/raid1/www/Hosts/bankrupt/TCR_Public/110314.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, March 14, 2011, Vol. 15, No. 72*
Headlines
ACORN ELSTON: Proposes Reznick Group as Accountant
ACORN ELSTON: Court Sets April 5 as Claims Bar Date
ACORN ELSTON: Taps D.E. Shaw Real as Financial Advisor
AEQUICAP INSURANCE: AM Best Cuts Financial Strength to 'E'
ANCHOR BLUE: Perry Ellis Completes Purchase of IP Assets
ANCHOR BLUE: Creditors Panel Taps Campbell as Delaware Counsel
ANCHOR BLUE: Creditors Panel Taps Kelley Drye as Lead Counsel
ANCHOR BLUE: Committee Taps Deloitte FAS as Financial Advisors
ARAB UNION: AM Best Puts 'B' FSR Under Review for Downgrade
ARMSTRONG WORLD: Moody's Assigns 'B1' Rating to Senior Loan
ARVINMERITOR INC: FMR LLC Discloses 2.156% Equity Stake
ASARCO LLC: Claimants Want Payment of Unclaimed Funds
ASARCO LLC: V. Karl Files Docs. to Support Lift Stay Plea
BERTHEL GROWTH: Unit to Receive No Proceeds From FMS Sale
BIOLASE TECHNOLOGY: Incurs $12.02 Million Net Loss in 2010
BONDS.COM GROUP: Sells 4 Units for $400,000 to Two Investors
BRIAR RIDGE: Section 341(a) Meeting Scheduled for April 1
BRUNSCHWIG & FILS: Auction Raises Price 33%; Kravet Still Wins
CANFOR CORP: DBRS Confirms 'BB (High)' Issuer & Sr. Notes Rating
CAPITOL BANCORP: Shares of Capital Stock Hiked to $1.52 Billion
CARGO TRANSPORTATION: Court Approves Hunton as Panel's Counsel
CARGO TRANSPORTATION: US Trustee Adds Two to Creditors Committee
CARGO TRANSPORTATION: Has Until April 1 to File Chapter 11 Plan
CATHOLIC CHURCH: Milw. Panel Wins OK to Hire Pachulski
CATHOLIC CHURCH: Milw. Panel Wins OK to Hire Local Counsel
CATHOLIC CHURCH: Lawyer Reaches Out to Survivors in Wisconsin
CC MEDIA: Posts $462.8 Million Net Loss in Full-Year 2010
CDC PROPERTIES: Section 341(a) Meeting Slated for April 6
CDC PROPERTIES: Wants to Access Midland's Cash Collateral
CENTRAL EUROPEAN: S&P Downgrades Corporate Credit Rating to 'B'
CHOA VISION: Seeks Approval to Sell Rooftop Easement
CLASS A PROPERTIES: Case Summary & 10 Largest Unsecured Creditors
CLEARWIRE CORP: Names Chairman John Stanton as Interim CEO
CNOSSEN DAIRY: Can Hire General Counsel, Accountant
COACH AMERICA: S&P Affirms 'B-' Corporate Credit Rating
COMMERCIAL VEHICLE: FMR LLC Discloses 8.607% Equity Stake
COMPTON PETROLEUM: FMR LLC's Equity Stake Down to 0%
CONSTITUTIONAL CASUALTY: AM Best Cuts FSR on 'Insolvency' Ruling
COVENTRY HEALTH CARE: AM Best Holds 'B' Financial Strength Rating
COVENTRY HEALTH PLAN: AM Best Affirms 'B', Outlook Now Positive
COVENTRY SUMMIT: AM Best Holds 'B' Financial Strength Rating
CROWN FOREX: Judge Allows Feds to Join $84 Mil. Fraud Suit
CRYSTALLEX INT'L: Request for Arbitration Registered by ICSID
CUMULUS MEDIA: Citadel Buyout Credit Positive, Says Moody's
DBSI INC: Individual Defendants Escape Wavetronix Litigation
DEEP DOWN: Inks Management Services Agreement with CFT
DEL MONTE: Moody's Assigns 'B1' Corporate Family Rating
DIABETES AMERICA: Taps Looper Reed as Bankruptcy Counsel
DIABETES AMERICA: Gets Court's Final OK to Use Cash Collateral
DIABETES AMERICA: Committee Taps Butler Snow as Counsel
DJSP ENTERPRISES: To Voluntarily Delist Securities From NASDAQ
DJSP ENTERPRISES: Deregisters Unsold Securities
DJSP ENTERPRISES: Deregisters $1.57MM Incentive Plan Offering
DOLLAR THRIFTY: DBRS B (High) Issuer Rating Unmoved by Net Income
DOUGLAS DYNAMICS: Moody's Upgrades Corporate Family Rating to 'B1'
DOUGLAS DYNAMICS: S&P Affirms 'BB-' Corporate Credit Rating
DRESSER-RAND GROUP: Moody's Assigns 'B1' Rating to $375 Mil. Notes
DRESSER-RAND GROUP: S&P Downgrades Rating to Senior Debt to 'BB+'
DYNAMIC BUILDERS: Parties Stipulate to Extend Plan Deadlines
DYNEGY INC: Incurs $164 Million Net Loss in 4th Quarter
DYNEGY INC: Going Concern Doubt Cues Fitch's Downgrade to 'CC'
E-DEBIT GLOBAL: Inks Pact for 10% Equity Purchase of Ebackup
EASTMAN KODAK: Moody's Assigns 'B1' Rating to $200 Mil. Debt
EASTMAN KODAK: S&P Assigns 'CCC' Rating to $200 Mil. Notes
EQUIPMENT MANAGEMENT: Taps Janette Lentes as Accountant
EQUIPMENT MANAGEMENT: Can Access Cash Collateral on Interim Basis
EQUIPMENT MANAGEMENT: Taps Paul Levasseur as General Manager
FANNIE MAE: John Nichols Does Not Own Any Securities
FEY 240: Post-Confirmation Status Conference on June 15
FEY 240: Hires Terrafirma to Prepare Appraisals
FIBRE CRAFT: Case Summary & Largest Unsecured Creditor
FIFTH THIRD: Loan Amendment Won't Affect Moody's 'Ba3' Ratings
FIRST DATA: Incurs $846.90 Million Net Loss in 2010
FOOT LOCKER: S&P Raises Corporate Credit Rating to 'BB-'
FORD CREDIT: DBRS Puts 'BB' Rating to $500MM Sr. Unsecured Notes
FOREVER CONSTRUCTION: Wants Control of Case Until July 14
FOREVER CONSTRUCTION: May Hire Real Estate Sales Agent
FREMONT GENERAL: Examiner Approves $2.6 Million Weiland Fee
GELTECH SOLUTIONS: Receives U.S. Forest Service Listing
GENERAL MOTORS: Old GM Signs Deal to Rejection of Pontiac Contract
GENERAL MOTORS: Old GM Asks Court to Expunge NUMMI Claim
GENERAL MOTORS: Signs Deal to Resolve Treasury's Claims
GLOBAL SHIP: Reports $1.22 Million Net Income in 4th Quarter
HAWKER BEECHCRAFT: Files Form 10-K; Posts $304.3MM Loss in 2010
HCA HOLDINGS: Moody's Retains 'B2' Corporate Family Rating
HERCULES OFFSHORE: Amends $475-Mil. & $175-Mil. Credit Facilities
HERTZ CORP: DBRS 'BB' Issuer Rating Unmoved By Financial Results
HHI HOLDINGS: Moody's Affirms Corporate Family Rating at 'B2'
HOTI ENTERPRISES: Rattet Quits as Bankruptcy Counsel
HOTI ENTERPRISES: Hires Tanya Dwyer to Replace Rattet Firm
HOTI ENTERPRISES: Klinger Serves as Accountants
HSAD 3949: Seeks Case Dismissal; $33T Available to Unsecureds
HSAD 3949: Court Approves Mutual Releases With KeyBank
IMS HEALTH: Moody's Assigns 'Ba3' Rating to $2 Bil. Amended Loan
INNKEEPERS USA: Wins Judge's OK for $1-Bil. Auction Proposal
INTELSAT SA: Incurs $507.77 Million Net Loss in 2010
J&B HALDEMAN: Case Summary & 10 Largest Unsecured Creditors
JACKSON HEWITT: Says It May Pursue Prepack Chapter 11 Filing
JAMES RIVER: Int'l Resource Deal Cues Moody's Rating Review
JETBLUE AIRWAYS: PRIMECAP Management Holds 5.04% Equity Stake
K-V PHARMACEUTICAL: Fulfills Obligation Under 2nd Amended RRA
KAR AUCTION: S&P Raises Corporate Credit Rating to 'B+'
KE KAILANI: Taps Dubin Law Office as Bankruptcy Counsel
KE KAILANI: Court to Consider SARE Motion Today
KINETEK HOLDINGS: S&P Affirms 'CCC+' Corporate Credit Rating
KL ENERGY: Thomas Schueller Resigns as Board Chairman
LODGENET INTERACTIVE: Wants to Extend Credit Facility Beyond 2014
LTV STEEL: High Court Rejects National Union's Admin. Claim
MAJESTIC STAR: Receives Confirmation of Plan of Reorganization
MEDICOR LTD: Atty. Says UBS Touted Fraudulent Medicore Investments
MEG ENERGY: Moody's Assigns 'B3' Rating to $500 Mil. Notes
MIRACLE HOSTINGS: Case Summary & 5 Largest Unsecured Creditors
MIRAMAR REAL ESTATE: Section 341(a) Meeting Scheduled for April 11
MIRAMAR REAL ESTATE: Taps Latimer Biaggi as Bankruptcy Counsel
MONTGOMERY WARD: Third Circuit Loosens Res Judicata Rules
MSCI INC: S&P Affirms Corporate Credit Rating at 'BB'
MWM CARVER: Asks for Court OK to Use Fannie Mae's Cash Collateral
MWM CARVER: Section 341(a) Meeting Scheduled for April 11
MWM CARVER: Taps Whiteford Taylor as Bankruptcy Counsel
NEW STREAM: Says Involuntaries Filed in 'Bad Faith'
NORTEL NETWORKS: Court Approves Claim Settlement with ACS Cable
ORBIT INT'L: Posts $3MM Loss in Q4 2010; Seeks Waiver from Lender
P&C POULTRY: Creditors Panel Taps Blakeley as Counsel
PARK-OHIO INDUSTRIES: Moody's Upgrades Corp. Family Rating to 'B2'
PARK-OHIO INDUSTRIES: S&P Assigns 'CCC+' Rating to $250 Mil. Notes
PEARLAND SUNRISE: Hearing on Plan Outline Reset to April 4
PETRA FUND: PwC Provides Tax Advisory Services
PENZANCE CASCADES: Has Green Light to Hire Paul Hastings
PETROHUNTER ENERGY: Alan Bruner Discloses 10% Equity Stake
PETROHUNTER ENERGY: Marc Bruner Discloses 5.7% Equity Stake
PHOENIX FOOTWEAR: Dennis Nelson to Step Down By End of March
PIERMONT PLAZA: Voluntary Chapter 11 Case Summary
POINT BLANK: Judge Delays Approval of SEC Deal with Firm
PRECISION DRILLING: Moody's Assigns 'Ba2' Rating to Senior Notes
PRECISION DRILLING: S&P Assigns 'BB+' Rating to Senior Debt
PRIUM LAKEWOOD: Confirmation Hearing Schedules for March 30
PROVIDENCE HALL: Case Summary & 7 Largest Unsecured Creditors
PURSELL HOLDINGS: Case Summary & 20 Largest Unsecured Creditors
QUIET TITLE: Case Summary & 19 Largest Unsecured Creditors
QIMONDA NA: Panel to File Avoidance Suit v. German Affiliate
RADIO ONE: Incurs $26.62 Million Net Loss in 2010
RHI ENTERTAINMENT: DS Objection Deadline Moved to March 22
R.E.X. INC: Case Summary & 2 Largest Unsecured Creditors
RESERVE DEV'T: Corus Wants Stay Lifted to Allow It to Foreclose
REYNOLDS & REYNOLDS: Moody's Upgrades Corp. Family Rating to 'Ba2'
RHI ENTERTAINMENT: Seeks to Transfer New York Headquarters
RINCON DEVELOPERS: Case Summary & 20 Largest Unsecured Creditors
RIVIERA HOLDINGS: Sternlicht Get Board's Temporary OK to Purchase
ROTECH HEALTCHARE: Announces Pricing of $290MM Notes Offering
SBLI USA: AM Best Downgrades Financial Strength Rating to 'B'
SEAHAWK DRILLING: Equity Panel Offers Alternative Financing
SEMINOLE CASUALTY: AM Best Cuts Financial Strength Rating to 'E'
SEQUENOM INC: Incurs $120.84 Million Net Loss in 2010
SIX3 SYSTEMS: Moody's Assigns 'B3' Corporate Family Rating
SMART ONLINE: Atlas Capital Holds 40% Equity Stake
SOUTH FORK: Case Summary & 20 Largest Unsecured Creditors
SPECIALTY PRODUCTS: Keating Muething to Represent Asbestos Trust
ST. VINCENT: Rudins, North Shore LIJ to Buy Property for $260MM
STANLEY TORGERSON: In Chapter 11 with $2.3-Mil. Debt
STARPOINTE ADERRA: Court Sets March 23 Plan Confirmation Hearing
STATION CASINOS: N. Rapaport Wants to be Fee Examiner
STATION CASINOS: Squire Sanders Seeks $1.125-Mil. for Work
SUNWEST MANAGEMENT: Receiver Settles $3.8 Million Loan Dispute
TACO DEL MAR: Faces Rival Chapter 11 Plan From Creditors Committee
TAMACH GABLES: Coral Gables Office Condo in Chapter 11
TAYLOR BEAN: Ex-Chief Gets E&Y Subpoena in Fraud Suit
TBS INTERNATIONAL: Peter Shaerf Won't for Seek Re-Election
TC GLOBAL: Catherin Campbell Does Not Own Any Securities
TELKONET INC: Completes Sale of Series 5 Tech. to Dynamic Ratings
TEMPUS RESORTS: Hires Appraisers for Mystic Dunes Golf Club
TN METRO: Case Summary & 20 Largest Unsecured Creditors
TPF II: Moody's Downgrades Ratings on Senior Secured Loan to 'B2'
TPF GENERATION: Moody's Downgrades Ratings on Senior Loan to 'B1'
TRIBUNE CO: Proposes to Set Cure Amounts Procedures
TWIN CITY: Reaches Tentative Sale Deal With Trinity Hospital
UNIFI INC: S&P Raises Rating to Senior Secured Notes
UNIGENE LABORATORIES: Incurs $27.87 Million Net Loss in 2010
UNITEK GLOBAL: Moody's Assigns 'B2' Corporate Family Rating
UNITEK GLOBAL: S&P Assigns 'B+' Corporate Credit Rating
UNIVERSAL BUILDING: Court Confirms Liquidation Plan
USHEALTH GROUP: AM Best Cuts Financial Strength Rating to 'B-'
VALEANT PHARMACEUTICALS: S&P Assigns 'BB-' Rating to Senior Notes
VIKING SYSTEMS: Board Approves Incentive Plan for CEO and CFO
VILLAGE OAKS: Case Summary & 9 Largest Unsecured Creditors
WASHINGTON MUTUAL: Objections Filed to Modified WaMu Disclosures
WELLPOINT SYSTEMS: Court Recognizes CA Receivership Proceeding
WESTMORELAND COAL: Posts $3.2 Million Net Loss in Full-Year 2010
WOLVERINE TUBE: May Hire Deloitte as Tax Advisors
YRC WORLDWIDE: Transitions CFO Responsibilities
ZALE CORP: Files Jan. 2011 10-Q; Posts $27.21MM Net Earnings
* S&P's Global Corporate Default Tally This Year Remains at Three
* Bank Toll Rises to 25 in 2011 With Oklahoma, Wisconsin Closures
* In New Deal, Developer Aims to Continue Hollywood's Comeback
* Paul Weiss' Alice Eaton Earns Spot in Law360's Lawyers to Watch
* BOND PRICING -- For Week From March 7 - 11, 2011
*********
ACORN ELSTON: Proposes Reznick Group as Accountant
--------------------------------------------------
Acorn Elston LLC asks the Hon. Sean H. Lane of the U.S. Bankruptcy
Court for the Southern District of New York for permission to
employ The Reznick Group as accountant.
The firm will assist the Debtor in the preparation of its monthly
operating reports and will provide its services to the Debtor in a
cost effective, efficient, and timely manner.
The Debtor proposes to pay the firm based on the hourly rates of
its professionals
Designations Hourly Rates
------------ ------------
Senior Principal $450-$550
Principal $400-$425
Senior Manager $325-$390
Manager $240-$325
Senior Associate $175-$235
Associate $125-$175
Paraprofessional $75-$125
The Debtor assures the Court that the firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
About Acorn Elston
Acorn Elston, LLC, owns the real property, together with the
improvements situated thereon, known as Elston Plaza Shopping
Center, a grocery-anchored retail shopping center in Chicago,
Illinois.
On May 15, 2009, a court appointed C. Michelle Panovich as
receiver with respect to lender Road Bay Investments, LLC's
collateral.
The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Case
No. 10-14807) on Sept. 11, 2010. Lawrence F. Morrison, Esq., and
Kasowitz, Benson, Torres & Friedman LLP, represent the Debtor in
its restructuring effort. The Debtor disclosed $21.92 million in
assets and $16.49 million in liabilities as of the Chapter 11
filing.
ACORN ELSTON: Court Sets April 5 as Claims Bar Date
---------------------------------------------------
The Hon. Sean H. Lane of the U.S. Bankruptcy Court for the
Southern District of New York set April 5, 2011, at 5:00 p.m.
(prevailing Eastern Time), as the deadline for creditors of Acorn
Elston LLC to file proofs of claim.
About Acorn Elston
Acorn Elston, LLC, owns the real property, together with the
improvements situated thereon, known as Elston Plaza Shopping
Center, a grocery-anchored retail shopping center in Chicago,
Illinois.
On May 15, 2009, a court appointed C. Michelle Panovich as
receiver with respect to lender Road Bay Investments, LLC's
collateral.
The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Case
No. 10-14807) on Sept. 11, 2010. Lawrence F. Morrison, Esq., and
Kasowitz, Benson, Torres & Friedman LLP, represent the Debtor in
its restructuring effort. The Debtor disclosed $21.92 million in
assets and $16.49 million in liabilities as of the Chapter 11
filing.
ACORN ELSTON: Taps D.E. Shaw Real as Financial Advisor
------------------------------------------------------
Acorn Elston LLC asks the Hon. Sean H. Lane of the U.S. Bankruptcy
Court for the Southern District of New York for permission to
employ D.E. Shaw Real Estate Adviser LLC as its financial advisor.
The firm will provide these services:
a) General Financial Advisory Services: the firm will, to the
extent it deems necessary, appropriate and feasible:
i) familiarize itself with the Debtor's business,
operations, properties, financial condition and prospects
of the Debtor; and
ii) if the Debtor determines to undertake anyone or more
restructurings or financings, advise and assist the
Debtor in the financial structuring of the a transaction,
subject to the terms and conditions of the engagement
letter.
b) Restructuring Services: In connection with assisting the
Debtor to restructure the Debtor's existing loan with the
lender, the firm will, to the extent it deems necessary,
appropriate and feasible:
i) negotiate a reduced payoff amount for the Loan and/
negotiate an extension or other modification of the Loan,
including without limitation:
1) draft term sheets and written communications between
the Debtor and the Lender in connection with the
Restructuring;
2) perform financial analysis in connection with the
Restructuring;
3) lead all negotiations on the Debtor's behalf in
connection with the Restructuring; and
4) review and evaluating any loan modification documents,
reduced payoff offers, and other restructuring
proposals and agreements from the Lender.
c) Financing Services: In connection with assisting the Debtor
to raise debt and equity proceeds for the purchase or
repayment of the Loan. The firm, to the extent it deems
necessary, appropriate and feasible and as requested by the
Debtor:
i) Provide financial advice to the Debtor in structuring and
effecting a Financing, identify potential sources of debt
and equity proceeds and, at the Debtor's request, contact
and meet with such Investors; and
ii) Assist the Debtor and participate in negotiations with
potential Investors.
The firm will get a restructure fee of $350,000 if a successful
restructuring is consummate.
The Debtor assures the Court that the firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
About Acorn Elston
Acorn Elston, LLC, owns the real property, together with the
improvements situated thereon, known as Elston Plaza Shopping
Center, a grocery-anchored retail shopping center in Chicago,
Illinois.
On May 15, 2009, a court appointed C. Michelle Panovich as
receiver with respect to lender Road Bay Investments, LLC's
collateral.
The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Case
No. 10-14807) on Sept. 11, 2010. Lawrence F. Morrison, Esq., and
Kasowitz, Benson, Torres & Friedman LLP, represent the Debtor in
its restructuring effort. The Debtor disclosed $21.92 million in
assets and $16.49 million in liabilities as of the Chapter 11
filing.
AEQUICAP INSURANCE: AM Best Cuts Financial Strength to 'E'
----------------------------------------------------------
A.M. Best Co. has downgraded the financial strength rating to E
(Under Regulatory Supervision) from C++ (Marginal) and issuer
credit rating to "rs" from "b" of AequiCap Insurance Company (Fort
Lauderdale, FL).
On February 28, 2011, The State of Florida issued a consent order
of rehabilitation of AequiCap Insurance Company.
ANCHOR BLUE: Perry Ellis Completes Purchase of IP Assets
--------------------------------------------------------
Perry Ellis International, Inc., PERY has completed the purchase
of all intellectual property assets of Anchor Blue, Inc.
The Company made a successful $500,000 bid in a March 3rd, 2011
auction for the Anchor Blue and Miller's Outpost trademarks, and
all other intellectual property holdings associated with Anchor
Blue, Inc. The intellectual property assets were purchased free
and clear or any liens, claims or encumbrances. The transaction
was approved by the bankruptcy court in the state of Delaware and
closed on March 11, 2011.
"As the Anchor Blue name continues to have a loyal consumer
following, especially within the denim category we feel the
benefit of adding these brands to our current portfolio is two
fold. First, it will allow us to further develop our current
denim business across all brands and second, as Anchor Blue
continues to be very well known along the West Coast and among the
younger Hispanic community, we feel it will allow us to continue
developing our connection to a younger demographic." commented
Oscar Feldenkreis, President and Chief Operating Officer of Perry
Ellis International.
About Anchor Blue
Anchor Blue is a specialty retailer of casual apparel and
accessories for the teenage market. Founded in 1972, the Company
has 117 stores located in nine western and southwestern states:
Arizona, California, Colorado, New Mexico, Oregon, Texas, Utah and
Washington. The Company employs 1,400 full and part-time
employees in their stores and their corporate headquarters in
Corona, California. Anchor Blue is an indirect affiliate of Sun
Capital Partners, a Florida-based investment firm.
Anchor Blue Holding Corp., together with Anchor Blue Inc., filed
for Chapter 11 bankruptcy protection on Jan. 11, 2011 (Bankr. D.
Del. Lead Case No. 11-10110). As of Jan. 1, 2011, the Debtors'
books and records reflected total combined assets of roughly $24.7
million (book value) and total combined liabilities of roughly
$38.5 million.
Neil Herman, Esq., and Rachel Mauceri, Esq., at Morgan Lewis, in
Philadelphia, Pennsylvania, serves as counsel to the Debtors.
Epiq Bankruptcy Solutions, LLC, is the claims and notice agent.
The Official Committee of Unsecured Creditors is represented by
Eric R. Wilson, Esq., at Kelley Drye & Warren LLP, in New York.
The prepetition first lien lender is represented by
Julia Frost-Davies, Esq., at Bingham McCutchen LLP, in Boston,
Massachusetts, and Regina Stango Kelbon, Esq., at Blank Rome LLP,
in Philadelphia, Pennsylvania. The prepetition second lien
lenders is represented by Thomas E. Patterson, Esq., at Klee,
Tuchin, Bogdanoff & Stern LLP, in Los Angeles, California. The
Debtors' prepetition subordinated lender is represented by James
Stempel, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois.
ANCHOR BLUE: Creditors Panel Taps Campbell as Delaware Counsel
--------------------------------------------------------------
The Official Committee of Unsecured Creditors of Anchor Blue
Holdings Corp., et al., asks the U.S. Bankruptcy Court for the
District of Delaware for authority to retain Campbell & Levine,
LLC as its Delaware counsel, nunc pro tunc to Jan. 19, 2011.
Campbell & Levine will, among other things:
a) assist and advise the Committee in its consultations with the
Debtors and other parties-in-interest relative to the overall
administration of the estates;
b) represent the Committee at hearings to be held before the
Court and communicate with the Committee regarding the
matters and issues raised as well as the decisions and
considerations of the Court; and
c) assist and advise the Committee in its examination and
analysis of the Debtors' conduct and financial affairs.
Campbel & Levine professionals proposed represent the Committee
are:
Hourly Rates
------------
Marla R. Eskin, Esq., Member $450
Mark T. Hurford, Esq., Junior Member $375
Kathleen Campbell Davis, Esq., Junior Member $375
Aesha Chacko Bennett, Esq., Associate $225
Matthew Brushwood, Paralegal $125
Santae Boyd, Paralegal $110
The Committee is satisfied that Campbell & Levine doe not
represent any interest adverse to the Committee, and that the law
firm is a "disinterested person" as that phrase in defined in
Section 101(14) of the Bankruptcy Code.
About Anchor Blue
Anchor Blue is a specialty retailer of casual apparel and
accessories for the teenage market. Founded in 1972, the Company
has 117 stores located in nine western and southwestern states:
Arizona, California, Colorado, New Mexico, Oregon, Texas, Utah and
Washington. The Company employs 1,400 full and part-time
employees in their stores and their corporate headquarters in
Corona, California. Anchor Blue is an indirect affiliate of Sun
Capital Partners, a Florida-based investment firm.
Anchor Blue Holding Corp., together with Anchor Blue Inc., filed
for Chapter 11 bankruptcy protection on Jan. 11, 2011 (Bankr. D.
Del. Lead Case No. 11-10110). As of Jan. 1, 2011, the Debtors'
books and records reflected total combined assets of roughly
$24.7 million (book value) and total combined liabilities of
roughly $38.5 million.
Neil Herman, Esq., and Rachel Mauceri, Esq., at Morgan Lewis, in
Philadelphia, Pennsylvania, serve as counsel to the Debtors. Epiq
Bankruptcy Solutions, LLC, is the claims and notice agent. The
Official Committee of Unsecured Creditors is represented by Eric
R. Wilson, Esq., at Kelley Drye & Warren LLP, in New York.
The prepetition first lien lender is represented by
Julia Frost-Davies, Esq., at Bingham McCutchen LLP, in Boston,
Massachusetts, and Regina Stango Kelbon, Esq., at Blank Rome LLP,
in Philadelphia, Pennsylvania. The prepetition second lien
lenders are represented by Thomas E. Patterson, Esq., at Klee,
Tuchin, Bogdanoff & Stern LLP, in Los Angeles, California. The
Debtors' prepetition subordinated lender is represented by James
Stempel, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois.
ANCHOR BLUE: Creditors Panel Taps Kelley Drye as Lead Counsel
-------------------------------------------------------------
The Official Committee of Unsecured Creditors of Anchor Blue
Holdings Corp., et al., asks the U.S. Bankruptcy Court for the
District of Delaware for authority to retain Kelley Drye & Warren
LLP as its lead counsel, nunc pro tunc to Jan. 19, 2011.
Kelley Drye, will, among other things:
a) advise the Committee with respect to its rights, duties, and
powers in the Debtors' cases;
b) assist and advise the Committee in its consultation with the
Debtors regarding the administration of the Debtors' cases;
and
c) assist the Committee in analyzing the claims of the Debtors'
creditors and the Debtors' capital structure, and negotiate
with holders of claims and equity interests.
Kelley Drye's professionals bill:
Partners $435-$920 per hour
Counsel $385-$680 per hour
Associates $305-$580 per hour
Paraprofessionals $110-$310 per hour
To the best of the Committee's knowledge, information and belief,
neither Kelley Drye nor any of its attorneys represent any
interest adverse to the Committee.
About Anchor Blue
Anchor Blue is a specialty retailer of casual apparel and
accessories for the teenage market. Founded in 1972, the Company
has 117 stores located in nine western and southwestern states:
Arizona, California, Colorado, New Mexico, Oregon, Texas, Utah and
Washington. The Company employs 1,400 full and part-time
employees in their stores and their corporate headquarters in
Corona, California. Anchor Blue is an indirect affiliate of Sun
Capital Partners, a Florida-based investment firm.
Anchor Blue Holding Corp., together with Anchor Blue Inc., filed
for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No.
11-10110) on Jan. 11, 2011. As of Jan. 1, 2011, the Debtors'
books and records reflected total combined assets of roughly
$24.7 million (book value) and total combined liabilities of
roughly $38.5 million.
Neil Herman, Esq., and Rachel Mauceri, Esq., at Morgan Lewis, in
Philadelphia, Pennsylvania, serve as counsel to the Debtors. Epiq
Bankruptcy Solutions, LLC, is the claims and notice agent. The
Official Committee of Unsecured Creditors is represented by Eric
R. Wilson, Esq., at Kelley Drye & Warren LLP, in New York.
The prepetition first lien lender is represented by Julia Frost-
Davies, Esq., at Bingham McCutchen LLP, in Boston, Massachusetts,
and Regina Stango Kelbon, Esq., at Blank Rome LLP, in
Philadelphia, Pennsylvania. The prepetition second lien
lenders are represented by Thomas E. Patterson, Esq., at Klee,
Tuchin, Bogdanoff & Stern LLP, in Los Angeles, California. The
Debtors' prepetition subordinated lender is represented by James
Stempel, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois.
ANCHOR BLUE: Committee Taps Deloitte FAS as Financial Advisors
--------------------------------------------------------------
The Official Committee of Unsecured Creditors of Anchor Blue
Holdings Corp., et al., asks the U.S. Bankruptcy Court for the
District of Delaware for authority to retain Deloitte Financial
Advisory Services LLP as its financial advisor, nunc pro tunc to
Jan. 19, 2011.
Deloitte FAS will assist the Committee in connection with the
restructuring and reorganization of the Debtors' affairs
throughout the course of the Chapter 11 cases. Specifically,
Deloitte FAS, will, among other things:
a) assist the Committee in understanding the business and
financial impact of various restructuring alternative on the
Debtors;
b) assist the Committee in its analysis of the Debtors'
financial restructuring process, including its review of the
Debtors' liquidation of stores; and
c) assist the Committee in its review and analysis of potential
contingency plans to reflect the impact of restructuring
alternatives on the Debtors.
To the best of the of the Committee's knowledge, Deloitte FAS
neither holds or represents an interest adverse to the Debtors or
the Debtors' estate in connection with the cases.
The professional fees of Deloitte FAS will be based upon a blended
average hourly billing rate of $325 per hour for all professional
staff. Support personnel will bill at $125 per hour.
About Anchor Blue
Anchor Blue is a specialty retailer of casual apparel and
accessories for the teenage market. Founded in 1972, the Company
has 117 stores located in nine western and southwestern states:
Arizona, California, Colorado, New Mexico, Oregon, Texas, Utah and
Washington. The Company employs 1,400 full and part-time
employees in their stores and their corporate headquarters in
Corona, California. Anchor Blue is an indirect affiliate of Sun
Capital Partners, a Florida-based investment firm.
Anchor Blue Holding Corp., together with Anchor Blue Inc., filed
for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No.
11-10110) on Jan. 11, 2011. As of Jan. 1, 2011, the Debtors'
books and records reflected total combined assets of roughly
$24.7 million (book value) and total combined liabilities of
roughly $38.5 million.
Neil Herman, Esq., and Rachel Mauceri, Esq., at Morgan Lewis, in
Philadelphia, Pennsylvania, serve as counsel to the Debtors. Epiq
Bankruptcy Solutions, LLC, is the claims and notice agent. The
Official Committee of Unsecured Creditors is represented by Eric
R. Wilson, Esq., at Kelley Drye & Warren LLP, in New York.
The prepetition first lien lender is represented by Julia Frost-
Davies, Esq., at Bingham McCutchen LLP, in Boston, Massachusetts,
and Regina Stango Kelbon, Esq., at Blank Rome LLP, in
Philadelphia, Pennsylvania. The prepetition second lien lenders
are represented by Thomas E. Patterson, Esq., at Klee, Tuchin,
Bogdanoff & Stern LLP, in Los Angeles, California. The Debtors'
prepetition subordinated lender is represented by James Stempel,
Esq., at Kirkland & Ellis LLP, in Chicago, Illinois.
ARAB UNION: AM Best Puts 'B' FSR Under Review for Downgrade
-----------------------------------------------------------
A.M. Best Europe - Rating Services Limited has placed under review
with negative implications the financial strength rating of B
(Fair) and issuer credit rating of "bb+" of Arab Union Reinsurance
Company (AURe) (Syria).
The rating action reflects the impact of the recent political
unrest in the region on AURe's operations. There are concerns
regarding the sustainability of AURe's business profile, with
approximately 25% of its business written sourced from affected
areas. Additionally, AURe has exposure to Libya through its
branch operation, where the company receives 10% legal cessions.
Moreover, the Libyan government owns 50% of AURe and has
representation on its board, which may give rise to uncertainty in
AURe's prospective viability. At present, A.M. Best is not in a
position to determine the long-term effect that this will have on
the company's operations and liquidity.
The under review status will be resolved once there is further
clarity regarding the political situation in the region and any
impact on AURe.
ARMSTRONG WORLD: Moody's Assigns 'B1' Rating to Senior Loan
-----------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Armstrong World
Industries, Inc.'s Senior Secured Term Loan B due 2018, and
affirmed its B1 Corporate Family Rating and B1 Probability of
Default Rating. Proceeds from this credit facility will be used
to reduce an equal amount of the company's existing Senior Secured
Term Loan B due May 23, 2017. The outlook is stable.
These ratings/assessments were affected by this action:
* Corporate Family Rating affirmed at B1;
* Probability of Default Rating affirmed at B1;
* $250 million Senior Secured Revolving Credit Facility 11/23/2015
affirmed at B1 (LGD3, 42%);
* $250 million Senior Secured Term Loan A due 11/23/2015 affirmed
at B1 (LGD3, 42%);
* $550 million Senior Secured Term Loan B due 05/23/2017 affirmed
at B1 (LGD3, 42%); and,
* $550 million Senior Secured Term Loan B due 2018 assigned B1
(LGD3, 42%).
The company's speculative grade liquidity rating remains SGL-2.
Ratings Rationale
The B1 rating assigned to the proposed $550 million Senior Secured
Term Loan B due 2018, the same rating as the corporate family
rating, is secured by a first priority security in substantially
all of the company's domestic assets and is pari passu to the
company's other senior secured bank credit facilities. Proceeds
from this credit facility will be used to pay off company's Senior
Secured Term Loan B due 2017 -- at which time the rating will be
withdrawn -- and cash on hand will be used to pay related fees and
expenses. Although the proposed debt issuance will reduce cash
interest costs up to $5.5 million per year, it will have minimal
impact on the company's credit metrics, but extends the maturity
profile.
Armstrong's B1 Corporate Family Rating reflects its leveraged
capital structure following its special cash dividend of
approximately $800 million that occurred in December 2010. For
the twelve months through December 31, 2010, debt-to-EBITDA was
5.1 times while free cash flow to debt approximated 8% (excluding
the dividend) for the same time period. The contributions from
the WAVE JV are critical to supporting the current rating, since
Armstrong's core operating margins remain weak. However, the
company's strong North American market position in providing
flooring to the new construction and remodeling end markets
positions it to benefit from an eventual economic and construction
recovery. Armstrong's good liquidity profile supports the rating
too.
A rating upgrade appears unlikely over the intermediate term due
to Armstrong's low margins, its debt burden, and generally weak
end market demand. However, over time, if the company proved able
to drive EBITA-to-interest coverage towards 3.0 times, and debt-
to-EBITDA towards 3.5 times (all ratios adjusted per Moody's
methodology), through a mixture of operating improvements and debt
reduction a rating upgrade would be considered.
A rating downgrade could result from evidence that Armstrong is
not benefiting from its cost reduction programs or financial
performance is negatively impacted by an unexpected decline in the
company's end markets. EBITA-to-interest expense remaining below
1.5 times or debt-to-EBITDA sustained above 4.5 times (all ratios
adjusted per Moody's methodology) for an extended period of time
could pressure the ratings. Future shareholder friendly
activities, or deterioration in the company's liquidity profile,
or debt-financed dividends, share repurchases or acquisitions may
also stress Armstrong's ratings.
The last rating action was on November 15, 2010, at which time
Moody's downgraded Armstrong World Industries, Inc.'s Corporate
Family Rating to B1 from Ba2.
Armstrong World Industries, Inc., headquartered in Lancaster, PA,
is a global producer of flooring products and ceiling systems for
use primarily in the construction and renovation of residential,
commercial and institutional buildings. The company also designs,
manufactures and sells kitchen and bathroom cabinets for the U.S.
market. Revenues for the twelve months through December 31, 2010
totaled approximately $2.8 billion.
ARVINMERITOR INC: FMR LLC Discloses 2.156% Equity Stake
-------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, FMR LLC and Edward C. Johnson 3d disclosed
that they beneficially own 2,032,110 shares of common stock of
ArvinMeritor Inc. representing 2.156% of the shares outstanding.
94,234,334 shares of Common Stock, $1.00 par value, of
ArvinMeritor, Inc. were outstanding on Jan. 2, 2011.
About ArvinMeritor
Based in Troy, Michigan, ArvinMeritor, Inc. --
http://www.arvinmeritor.com/-- supplies integrated systems,
modules and components to the motor vehicle industry. The Company
celebrated its centennial anniversary in 2009. The Company serves
commercial truck, trailer and specialty original equipment
manufacturers and certain aftermarkets, and light vehicle
manufacturers.
The Company's balance sheet at Dec. 31, 2010, showed $2.81 billion
in total assets, $3.80 billion in total liabilities and a
$990 million deficit. The deficit was $1.023 billion at Sept. 30,
2010.
* * *
At the end of January 2011, Standard & Poor's Ratings Services
raised its corporate credit rating on ArvinMeritor Inc. to 'B'
from 'B-'. The outlook is stable. At the same time, S&P also
raised its issue-level ratings on the Company's senior secured and
unsecured debt.
S&P said the ratings on ArvinMeritor reflect the Company's highly
leveraged financial risk profile and weak business risk profile.
The Company's limited profitability has kept cash generation low,
given the cyclical and competitive pricing pressures of the
industry. Although S&P expect margins to improve, S&P believe
pension funding and working capital investments will result in a
use of cash in fiscal 2011. But S&P believe the Company's large
cash balances will be sufficient to fund this cash use.
As reported by the Troubled Company Reporter on Feb. 22, 2011,
Moody's Investors Service raised the Corporate Family and
Probability of Default ratings of ArvinMeritor, Inc., to B2 from
B3. The upgrade of ArvinMeritor's Corporate Family Rating to B2
reflects the company's improving credit metrics over the recent
quarters combined with Moody's expectation that recovering
economic trends will support increasing commercial vehicle demand
over the near-term. In January 2011 the company sold its Body
Systems group which will permit management to focus on further
strengthening performance of the commercial vehicle and industrial
segments. With about 50% of total revenues derived from North
America, ArvinMeritor is positioned to benefit from higher
commercial vehicle orders, supported by increasing freight
volumes, and an aging vehicle fleet. In addition, the company's
exposure to other regional growth markets, such as South America
(about 15% of revenues) and Asia (about 14%), is expected to help
lift profitability over the near-term.
ASARCO LLC: Claimants Want Payment of Unclaimed Funds
-----------------------------------------------------
Several claimants filed separate applications, through J.
Armstrong Duffield of American Property Locators, for an order
authorizing payment of unclaimed funds now in the possession of
the plan administrator of Asarco LLC.
Amount
of Check
Claimant Claim No. Issued
-------- --------- --------
Swift Transportation Co., Inc. 10004885 $32,443
Industrial Radiator Service Co. 10005452 24,401
Staver Foundry Co. 10004853 14,609
Outokumpu Wenemec Inc. 8356 7,089
Roy Wahl 10006526 6,100
Roy E. Grimes 10394 5,000
Employment StoneRiver Pharmacy
Solutions, Inc. 10004810 4,131
Employment Solutions Mgmt. Inc. 10004847 4,106
StoneRiverPharmacy Solutions Inc. 10004676 2,557
Canyon State Oil Co., Inc. 10006163 2,277
Amarillo Landscape, Inc. 10005979 1,960
Gary Hughes 10006245 1,933
Alloys and Act 10005966 1,820
Quarles & Clearley 10005073 1,765
Industrial Radiator Service Co. 10005451 1,010
No objections were filed against the Claimants' proofs of claim,
and the Claims were allowed as a general unsecured claim. As
part of the distribution to the holders of allowed claims, the
Plan Administrator mailed checks payable to the Claimants.
According to the Plan Administrator, the checks mailed to the
Claimants were not negotiated and the funds were held in an
unclaimed funds reserve.
As previously reported, the Plan Administrator asked Judge
Schmidt to (i) approve subsequent distribution to Reorganized
ASARCO LLC of funds in the Undeliverable and Unclaimed
Distribution Reserve, and (ii) authorize him to distribute
certain forfeited distributions to ASARCO as a subsequent
distribution.
APL and another creditor objected to the Distribution Motion.
On behalf of the Claimants, John Mayer, Esq., at Ross, Banks,
May, Cron & Cavin, P.C., in Houston, Texas, relates that in the
four years that passed between the time that the proofs of claim
were filed and the time that the distribution was made, the
mailing addresses of the Claimants changed and the Claimants did
not receive the distribution from the Plan Administrator.
Hence, the Claimants ask the Court to allow payment of the funds
due to them in care of J. Armstrong Duffield of APL.
The Court will convene a hearing on April 28, 2011, to consider
the requests for allowance.
Plan Administrator Responds
On behalf of the Plan Administrator, K. Elizabeth Sieg, Esq., at
McGuirewoods LLP, in Richmond, Virginia -- bsieg@mcguirewoods.com
-- relates that at a hearing held on February 4, 2011, the Court
granted the Distribution Motion, and adjourned the hearing on the
Distribution Motion to April 28, 2011, as to all affected
claimants from whom the Plan Administrator received a response,
whether formal or informal.
Ms. Sieg says that the Plan Administrator intends to file a
response to the Claimants' requests for allowance prior to the
April 28 hearing. Hence, the Plan Administrator asks Judge
Schmidt to take no action on those requests, or any subsequent
similar requests, until the hearing.
About Asarco LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection on August 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). Attorneys at Baker Botts
L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented
the Debtor in its restructuring efforts.
On December 9, 2009, Grupo Mexico, S.A.B., consummated the Chapter
11 plan that it sponsored for Asarco LLC. The Plan, which was
confirmed both by the bankruptcy and district courts, reintegrated
Asarco LLC back to parent Grupo Mexico concluding the four-year
Chapter 11 proceeding.
Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
ASARCO LLC: V. Karl Files Docs. to Support Lift Stay Plea
---------------------------------------------------------
Victor Karl filed with the U.S. Bankruptcy Court for the Southern
District of Texas another memorandum in further support of his
request to lift the automatic stay with respect to his two
pending prepetition lawsuits before the U.S. District Court for
the Southern District of New York against ASARCO's Parent and the
ASARCO Administrative Committee as benefit plans' fiduciaries
relating to his entitlement of payments under a post-retirement
group life insurance and a Medicare supplement plan.
Mr. Karl contends that ASARCO LLC and Reorganized ASARCO LLC are
one and the same, and that Reorganized ASARCO is the alter ego of
ASARCO LLC.
"Not only is there an implied assumption of liabilities upon the
REORGANIZED ASARCO LLC, there is a merger of interests evidenced
by the continuity of ownership and general business operations
and the REORGANIZED ASARCO LLC is merely 'a restructured or
reorganized' continuation of the business operations and product
lines of the ASARCO LLC formed in February 2005," Mr. Karl tells
Judge Schmidt.
To assert that Reorganized ASARCO has no successor liability for
the panoply of ERISA rights and issues he raised in the
bankruptcy proceeding and in the New York litigation could,
arguably, be the basis for the transfer of interests being for
the fraudulent purpose of escaping liability by ASARCO, Mr. Karl
points out, among other things.
In another letter, Mr. Karl tells the Bankruptcy Court that he
has received a proposed scheduling order from the Plan
Administrator's counsel. He asserts that the order is
inappropriate at this time.
Mr. Karl says that he waives discovery and asks for a bench
ruling from the Bankruptcy Court, based upon submission of the
parties to date, regarding his DIBS claim and the claim to
restore his post-retirement group life insurance coverage. He
adds that he has raised jurisdictional issues in his previous
submissions as for his claim on Medicare Supplement Plan. Hence,
he objects to the inclusion of that claim in any scheduling
order.
About Asarco LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection on August 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). Attorneys at Baker Botts
L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented
the Debtor in its restructuring efforts.
On December 9, 2009, Grupo Mexico, S.A.B., consummated the Chapter
11 plan that it sponsored for Asarco LLC. The Plan, which was
confirmed both by the bankruptcy and district courts, reintegrated
Asarco LLC back to parent Grupo Mexico concluding the four-year
Chapter 11 proceeding.
Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
BERTHEL GROWTH: Unit to Receive No Proceeds From FMS Sale
---------------------------------------------------------
Berthel SBIC, LLC, Berthel Growth & Income Trust I's wholly owned
subsidiary, owned 435,590 shares of common stock in Feed
Management Systems, Inc., a privately held company located in
Minnesota. The FMS Securities represented all of Berthel SBIC's
investment in FMS, and there are no other material relationships
between FMS and Berthel SBIC or the Company or any of their
affiliates, directors, officers or any associate of any such
director or officer.
The U.S. Small Business Administration has been appointed the
receiver for Berthel SBIC LLC, pursuant to that order entered on
Jan. 7, 2009, by the United States Court for the Northern District
of Iowa.
The Receiver filed the First Receiver's Report for the Period from
Jan. 7, 2009 through Dec. 31, 2009 with the Court on Feb. 26,
2010. The First Report was approved by Order of the Court entered
March 3, 2010.
The USSBA gave notice that FMS was merged into another company
effective July 1, 2010.
A Second Receiver's Report was filed by the USSBA for the period
from Jan. 1, 2010, through Dec. 31, 2010. The Receiver's Report
states that FMS has advised USSBA that no proceeds from the merger
transaction are available to distribute to the holders of FMS
common stock. The Receiver's Report declares that there will be
no recoveries for Berthel SBIC in connection with the FMS
Securities, and the Receiver recommends and requests that the
Court authorize the Receiver to abandon further liquidation
efforts related to the FMS Securities.
The Company previously reported that on Jan. 7, 2009, the Court
entered a Consent Order and Judgment by which it appointed the SBA
as the receiver for Berthel SBIC, for the purpose of liquidating
all of Berthel SBIC's assets and satisfying the claims of its
legitimate creditors in the order of priority as determined by the
court.
A copy of the Second Receiver's Report is available for free at:
http://ResearchArchives.com/t/s?74e2
About Berthel Growth
Based in Marion, Iowa, Berthel Growth & Income Trust I was a
Delaware business trust that has elected to be treated as a
business development company under the Investment Company Act of
1940. The trust's Registration Statement was declared effective
June 21, 1995, at which time the trust began offering Shares of
Beneficial Interest. The underwriting period was completed on
June 21, 1997, with a total of $10,541,000 raised.
The trust is a closed-end management investment company intended
as a long-term investment and not as a trading vehicle.
At Sept. 30, 2008, the Trust had $2,760,919 in total assets
and $9,565,186 in total liquidation.
BIOLASE TECHNOLOGY: Incurs $12.02 Million Net Loss in 2010
----------------------------------------------------------
Biolase Technology, Inc., reported net income of $174,000 on
$9.72 million of net revenue for the three months ended Dec. 31,
2010, compared with a net loss of $1.47 million on $10.35 million
of net revenue for the three months ended Dec. 31, 2009.
The Company also reported a net loss of $12.02 million on
$26.22 million of net revenue for the year ended Dec. 31, 2010,
compared with a net loss of $2.95 million on $43.35 million of net
revenue during the prior year.
The Company's balance sheet at Dec. 31, 2010 showed $18.15 million
in total assets, $21.19 million in total liabilities and a
$3.04 million stockholders' deficit.
Federico Pignatelli, the Company's Chairman and CEO since Aug. 27,
2010, said, "Our new business model, combined with the refocusing
of the entire organization, resulted in sequential growth and
regained net profitability in the fourth quarter of 2010. In
addition, our direct sales force has gained momentum into 2011 as
our new products, in particular our new flagship product, the
Waterlase iPlusTM All-Tissue Laser, launched Jan. 27, 2011, began
to gain traction in North America, and as new distributors compete
for market share among their respective customer segments both
domestically and internationally."
A full-text copy of the press release announcing the financial
results is available for free at:
http://ResearchArchives.com/t/s?74e8
About BIOLASE Technology
Irvine, Calif.-based BIOLASE Technology, Inc. (NASDAQ: BLTI)
-- http://www.biolase.com/-- is a dental laser company. The
Company develops, manufactures and markets Waterlase technology
and lasers and related products that advance the practice of
dentistry and medicine.
As reported in the Troubled Company Reporter on March 22, 2010,
BDO Seidman, LLP, in Costa Mesa, Calif., expressed substantial
doubt about the Company's ability to continue as a going concern,
following its 2009 results. The independent auditors noted that
the Company has suffered recurring losses from operations, has had
declining revenues, has limited financial resources at
Dec. 31, 2009, and is substantially dependent upon its primary
distributor for future purchases of the Company's products.
BONDS.COM GROUP: Sells 4 Units for $400,000 to Two Investors
------------------------------------------------------------
On Feb. 2, 2011, Bonds.com Group, Inc., consummated a group of
related transactions, including the sale of 65 units of securities
for an aggregate purchase price of $6,500,000 to two accredited
investors, with each unit comprised of (a) warrants to purchase
1,428,571.429 shares of the Company's Common Stock, par value
$0.0001 per share, at an initial exercise price of $0.07 per
share, and (b) 100 shares of a newly-created class of preferred
stock designated as Series D Convertible Preferred Stock.
Additionally, as part of that transaction, the Company, the
purchasers and certain other security holders entered into a
Series D Stockholders Agreement and an Amended and Restated
Registration Rights Agreement.
On March 7, 2011, the Company entered into two separate Unit
Purchase Agreements with two accredited investors pursuant to
which, among other things, the Company sold 4 Units for an
aggregate purchase price of $400,000. Additionally, in connection
with those sales, the two accredited investors joined as parties
to the Series D Stockholders Agreement and the Amended and
Restated Registration Rights Agreement.
In addition to providing for the sale of the of the Units, these
Unit Purchase Agreements contain representations and warranties of
the Company in favor of the investors. Additionally, in the Unit
Purchase Agreements, the Company covenants that, as promptly as
possible, but in no event later than the date 180 days after the
date of the Unit Purchase Agreement, the Company will undertake
any and all actions necessary to authorize, approve and effect the
increase of its authorized Common Stock from 300,000,000 shares to
1,000,000,000 shares.
About Bonds.com Group
Based in Boca Raton, Florida, Bonds.com Group, Inc. (OTC BB: BDCG)
-- http://www.bonds.com/-- through its subsidiary Bonds.com,
Inc., serves institutional fixed income investors by providing a
comprehensive zero subscription fee online trading platform. The
Company designed the BondStation and BondStationPro platforms to
provide liquidity and competitive pricing to the fragmented Over-
The-Counter Fixed Income marketplace.
The Company differentiates itself by offering through Bonds.com,
Inc. an inventory of more than 35,000 fixed income securities from
more than 175 competing sources. Asset classes currently offered
on BondStation and BondStationPro, the Company's fixed income
trading platforms, include municipal bonds, corporate bonds,
agency bonds, certificates of deposit, emerging market debt,
structured products and U.S. Treasuries.
The Company's balance sheet at Sept. 30, 2010, showed $1,565,132
in total assets, $9,823,058 in total liabilities, and a
stockholders' deficit of $8,257,925.
In its Form 10-Q for the quarter ended Sept. 30, 2010, the Company
noted that since its inception, it has generated limited revenues
and has incurred a cumulative net loss of $23,619,174. As of
September 30, 2010, the Company has a working capital deficit of
$5,796,898, including approximately $1,050,000 and $82,000 of
outstanding notes payable to related parties and other,
respectively, and $22,153 of outstanding convertible notes payable
due within the next twelve months.
"The Company faces a liquidity crisis," the Form 10-Q added. "If
the Company is unable to raise sufficient capital in the very near
term, it may experience an interruption or cessation of its
business and may be forced to seek reorganization or liquidation
under U.S. bankruptcy laws. For these reasons and others, there
is substantial doubt about the Company's ability to continue as a
going concern."
BRIAR RIDGE: Section 341(a) Meeting Scheduled for April 1
---------------------------------------------------------
The U.S. Trustee for Region 10 will convene a meeting of Briar
Ridge Country Club Unit 16 LLC's creditors on April 1, 2011, at
10:30 a.m. The meeting will be held at 1st Floor, Suite 1700,
Corner of Hohman Ave & Douglas Street, Hammond, Indiana 46320.
This is the first meeting of creditors required under Section
341(a) of the U.S. Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Schererville, Indiana-based Briar Ridge Courty Club, Unit 16,
LLC, filed for Chapter 11 bankruptcy protection on March 3, 2011
(Bankr. N.D. Ind. Case No. 11-20666). Andrew J. Kopko, Esq., at
the Law Office of Kevin W. Schmidt P.C., serves as the Debtor's
bankruptcy counsel. The Debtor estimated its assets at
$10 million to $50 million and debts at $1 million to $10 million.
BRUNSCHWIG & FILS: Auction Raises Price 33%; Kravet Still Wins
--------------------------------------------------------------
Bill Rochelle, Bloomberg News' bankruptcy columnist, reports that
Kravet Inc. won the right to buy competitor Brunschwig & Fils
Inc., although it must pay one-third more for the century-old
distributor of wall coverings and upholstery fabrics.
According to the report, there were 27 rounds of bidding at this
week's auction. Bethpage, New York-based Kravet had the first bid
of $6.5 million. It ended up having to pay $9.66 million.
The U.S. bankruptcy judge in White Plains, New York, approved the
sale on March 9. Kravet has been providing financing for the
Chapter 11 case.
About Brunschwig & Fils
Over one hundred and ten years ago, Brunschwig & Fils was founded
as a tapestry weaving mill in Aubusson and Bohain, France.
Brunschwig & Fils designs and distributes traditional and
contemporary decorative fabrics, wall coverings, trimmings,
upholstered furniture, lamps, tables, mirrors and accessories. All
design is performed in-house at the Studio in the Decoration &
Design Building, NYC and they work with 150 mills around the
world. The company is headquartered in White Plains, NY with 21
national and international showrooms. Additionally, there are
agents and distributors in 24 countries.
Brunschwig & Fils filed for Chapter 11 protection (Bankr. S.D.N.Y.
Case No. 11-22036) in White Plains, New York on Jan. 12, 2011.
Alan D. Halperin, Esq., at Halperin Battaglia Raicht LLP, in New
York, serves as the Debtor's bankruptcy counsel. The Debtor
estimated assets and debts of $1 million to $10 million in its
Chapter 11 petition.
CANFOR CORP: DBRS Confirms 'BB (High)' Issuer & Sr. Notes Rating
----------------------------------------------------------------
DBRS has confirmed the Issuer Rating and Senior Notes rating of
Canfor Corporation (Canfor or the Company) at BB (high). The
trend has been changed to Stable from Negative. This rating
action recognizes the Company's much-improved financial results in
2010, which were well above expectations, demonstrating Canfor's
ability to benefit from positive market developments to strengthen
its financial profile.
Prior to 2010, operating performance at Canfor had been weak,
affected by a prolonged, severe downturn in the U.S. housing
sector, and the Company had reported losses in the previous four
years. The U.S. housing market bottomed in 2009 but the pace of
recovery through 2010 has been disappointing. However, both
lumber and pulp prices strengthened in 2010, helped by some
unexpected developments. A temporary demand/supply imbalance in
lumber led to a sharp increase in prices in early 2010. Prices
retreated sharply in mid-year as the imbalance dissipated.
However, producer discipline in managing supply and much stronger-
than-expected demand from China reversed the decline, resulting in
a substantial year-over-year increase in 2010 average lumber
prices. A similar supply/demand imbalance also helped raise pulp
prices. Demand for pulp has been growing in emerging markets,
especially China, as their economies strengthened. A supply
disruption caused by the earthquake in Chile in February 2010
worsened already-tight inventory conditions in the global pulp
market. Pulp prices rose sharply, peaking in Q3 2010, and
remained at elevated levels despite a moderate retrenchment.
Canfor reported much stronger results in 2010, helped by sharply
higher product prices, especially for lumber, as well as by
benefits from cost savings initiatives which were partly offset by
a strong Canadian dollar.
In the near term, the lumber business is expected to report modest
profit improvement. Canfor has made good progress in developing
the Chinese market, where sales are expected to continue to rise
due to an ongoing increase in consumption and restricted supply
from Russia. In addition, the growing use of high-grade lumber in
China will lead to a better sales mix. However, the health of the
U.S. market remains the key to Canfor's overall performance; the
United States still accounts for 54% of Canfor's 2010 sales,
compared with China's 17%. DBRS believes that the U.S. housing
market has passed its trough but there are still headwinds facing
the industry: (1) The boost from the homebuyer tax credit in the
United States expired at the end of April 2010. The lack of
stimulus and the negative impact of pulled-forward sales could
dampen demand for the rest of 2010 and into 2011. (2) The
persistent high unemployment rate in the United States and its
resultant impact on the confidence of potential homebuyers could
continue to pressure demand and further delay any meaningful
recovery in the housing market, despite favorable mortgage rates.
(3) Credit availability remains tight and weighs on builders'
ability to start new projects. Consequently, DBRS believes that
residential construction and the resultant demand for lumber is
not likely to show a meaningful improvement until late 2012.
The near-term outlook for pulp is stable but has a downward bias.
Global pulp inventory levels are lean and demand/supply appears to
be in balance. However, an increase in supply from Chile (from
the restoration of production post-earthquake) and the start-up of
new mills at Latin America would tip the balance. Hardwood pulp
prices have been under pressure. In addition, there are signs
that the momentum of economic recovery in some major economies is
stalling. Lingering concerns about the European sovereign debt
situation and recent political turmoil in the Arab countries
further add to the uncertainty. A slowdown in global economic
activities would dampen demand and put pressure on pulp prices.
Moreover, the industry still has excess capacity, which is
temporarily idled and can be easily restarted when prices become
more favourable. This capacity overhang would also limit the
upside in pulp prices.
Overall, DBRS believes that Canfor should continue to show modest
improvement in its operating performance until the U.S. housing
market shows meaningful growth.
The Company's strong balance sheet provides good support to the
current rating. Canfor has continued to pay down debt and its
gross leverage was a modest 18% (21.4% adjusted for operating
leases) at the end of 2010. With a liquidity position of about
$643 million (cash and unused credit facility) at December 31,
2010, the Company has adequate liquidity to weather an extend
period of weak market conditions. DBRS expects the Company's
financial risk profile to show modest improvement and the rating
to remain stable in the near term.
DBRS has simulated a default scenario for Canfor in order to
analyze the potential recovery of the Company's senior debt in the
event of default. The scenario assumes a prolonged period of
severe economic conditions regardless of how hypothetical or
unlikely the conditions may be, in which product demand and prices
plummet. Based on the recovery analysis, DBRS believes that the
senior note holders would recover approximately 50% to 70% of the
principal; DBRS has therefore assigned a recovery rating of RR3,
an improvement from the prior recovery rating of RR4.
CAPITOL BANCORP: Shares of Capital Stock Hiked to $1.52 Billion
---------------------------------------------------------------
On Feb. 23, 2011, at a special meeting of the shareholders of
Capitol Bancorp Ltd., holders of the common stock approved a
proposal, which was previously approved by the Board of Directors
of Capitol, to authorize an increase in the total number of shares
of capital stock of Capitol to 1,520,000,000, consisting of (i)
20,000,000 shares of preferred stock, no par value per share and
(ii) 1,500,000,000 shares of common stock, no par value per share.
On March 9, 2011, Capitol filed a Certificate of Amendment to the
Articles of Incorporation with the Michigan Department of Energy,
Labor and Economic Growth, Bureau of Commercial Services. The
Certificate of Amendment increases the total number of shares of
capital stock of all classes which Capitol has authority to issue
from 70,000,000 to 1,520,000,000 shares, of which 1,500,000,000
shares are classified as common stock and 20,000,000 shares are
classified as preferred stock.
A copy of the Certificate of Amendment is available for free at:
http://ResearchArchives.com/t/s?74e5
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.
The reported a net loss of $254.36 million on $163.69 million of
total interest income for the year ended Dec. 31, 2010, compared
with a net loss of $264.54 million on $197.78 million of total
interest income during the prior year.
The Company's balance sheet at Dec. 31, 2010 showed $3.54 billion
in total assets, $3.57 billion in total liabilities and
$38.68 million in total deficit.
CARGO TRANSPORTATION: Court Approves Hunton as Panel's Counsel
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
authorized the Official Committee of Unsecured Creditors of Cargo
Transportation Services Inc. to employ Hunton & Williams LLP as
its counsel.
Among other things, the firm will:
a) advise the Committee with respect to its rights, powers and
duties in the Chapter 11 case;
b) advise and consult with the Committee concerning various
legal financial and operational issues arising from the
administration of the Debtor's estate;
c) advise and consult with the Committee concerning the
unsecured creditors' rights and remedies with respect to the
assets of the Debtor's estate and the claims of
administrative, secured, priority and general unsecured
creditors as well as other parties in interest;
d) prosecute, defend and represent the Committee's interest in
actions arising in or related to the Debtor's case; and
e) assist in the preparation of pleadings, motions, notices and
orders.
The firm will be paid based on the hourly rates of its
professionals:
Attorneys Hourly Rates
--------- ------------
Craig V. Rasile, Esq. $780
Matthew Mannering, Esq. $405
Victor A. de Diego, Esq. $300
Ann DeBoer $205
The Debtor assured the Court that the firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
About Cargo Transportation
Sunrise, Florida-based Cargo Transportation Services, Inc.,
provides transportation services to clients nationwide, including
customized consolidation, distribution, logistics and warehousing
services. It has 140 employees and averages $100,000,000 in gross
revenue per year.
Cargo Transportation filed for Chapter 11 bankruptcy protection
(Bankr. M.D. Fla. Case No. 11-00432) on Jan. 12, 2011. Edward J.
Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser, PA,
serves as the Debtor's bankruptcy counsel. The Debtor disclosed
$11,728,760 in total assets, and $11,869,375 in total liabilities.
CARGO TRANSPORTATION: US Trustee Adds Two to Creditors Committee
----------------------------------------------------------------
Donald F. Walton, United States Trustee for Region 21, added two
creditors more to serve on the Official Committee of Unsecured
Creditors of Cargo Transportation Services Inc.
The two creditors are R & L Transfer, Inc., and Estes Express
Lines.
The Creditors Committee now consist of:
a) Ryder Truck Rental, Inc.
Kevin Sauntry, Corporate Collection Manager
6000 Windward Parkway
Alpharetta, GA 30005
E-mail: kevin_sauntry@ryder.com
Tel: (770) 569-6511
Fax: (770) 569-6712
b) AAA Cooper Transportation
Michelle Lewis, Director - Admin. & Customer Accounts
1751 Kinsey Road (334) 796-0882 (cell)
Dothan, AL 36303
E-mail: michelle.lewis@aaacooper.com
Tel: (334) 671-3122
Fax: (334) 671-1306
c) Precision Truck Lines, Inc.
Ravi Annand, Vice President of Finance
8111 Huntington Road
Woodbridge, Ontario Canada, L4H 0S6
E-mail: ravi@precisiontrucklines.com
Tel: (905) 851-1996 ext. 2231
Fax: (905) 851-5527
d) R & L Transfer, Inc.
Michael Shroyer, Chief Financial Officer
600 Gillam Road
Wilmington, OH 45177
E-mail: mshroyer@rlcarriers.com
Tel: (800) 543-5589 ext. 1139
e) Estes Express Lines
Wendy Belcher, Credit Manager
3901 West Broad Street
Richmond, VA 23230
E-mail: wbelcher@estes-express.com
Tel: (804) 353-1900 ext. 2321
Fax: (804) 204-1720
Official creditors' 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 Cargo Transportation
Sunrise, Florida-based Cargo Transportation Services, Inc.,
provides transportation services to clients nationwide, including
customized consolidation, distribution, logistics and warehousing
services. It has 140 employees and averages $100,000,000 in gross
revenue per year.
Cargo Transportation filed for Chapter 11 bankruptcy protection
(Bankr. M.D. Fla. Case No. 11-00432) on Jan. 12, 2011. Edward J.
Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser, PA,
serves as the Debtor's bankruptcy counsel. The Debtor disclosed
$11,728,760 in total assets and $11,869,375 in total liabilities.
CARGO TRANSPORTATION: Has Until April 1 to File Chapter 11 Plan
---------------------------------------------------------------
The Hon. Michael G. Williamson of the U.S. Bankruptcy Court for
the Middle District of Florida set April 1, 2011, as the deadline
for Cargo Transportation Services Inc. to file its Chapter 11 plan
of reorganization and explanatory disclosure statement.
If the disclosure statement is timely filed, the Court will
review its adequacy. If the disclosure statement is found to be
adequate, the Court will enter an order of conditional approval,
establishing pertinent deadlines and scheduling the consolidated
hearing for May 4, 2011 at 1:30 p.m.
About Cargo Transportation
Sunrise, Florida-based Cargo Transportation Services, Inc.,
provides transportation services to clients nationwide, including
customized consolidation, distribution, logistics and warehousing
services. It has 140 employees and averages $100,000,000 in gross
revenue per year.
Cargo Transportation filed for Chapter 11 bankruptcy protection
(Bankr. M.D. Fla. Case No. 11-00432) on Jan. 12, 2011. Edward J.
Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser, PA,
serves as the Debtor's bankruptcy counsel. Donald F. Walton,
United States Trustee for Region 21, appointed three creditors to
serve on the Official Committee of Unsecured Creditors.
CATHOLIC CHURCH: Milw. Panel Wins OK to Hire Pachulski
------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in the
Archdiocese of Milwaukee's bankruptcy case received authority from
the United States Bankruptcy Court for the Eastern District of
Wisconsin to retain Pachulski Stang Ziehl & Jones LLP as its
counsel, nunc pro tunc to January 25, 2011.
Charles Linneman, chairman of the Creditors Committee, tells Judge
Kelley that Pachulski Stang has represented official committees in
other diocesan bankruptcy cases, and is well-qualified to render
the proposed services to the Creditors Committee.
As counsel, Pachulski Stang will, among other things:
(a) assist, advise and represent the Creditors Committee in
its consultations with the Archdiocese regarding the
administration of the case;
(b) assist, advise and represent the Creditors Committee in
analyzing the Archdiocese's assets and liabilities,
investigate the extent and validity of liens and
participate in and review any proposed asset sales, any
asset dispositions, financing arrangements and cash
collateral stipulations or proceedings. Pachulski Stang
does not anticipate involvement in analyzing the Debtor's
liability to any particular survivor of sexual abuse;
(c) review and analyze all applications, motions, orders,
statements of operations and schedules filed with the
Court by the Archdiocese or third parties, advise the
Creditors Committee as to their propriety, and, after
consultation with the Creditors Committee, take
appropriate action;
(d) prepare necessary applications, motions, answers, orders,
reports and other legal papers on behalf of the Creditors
Committee;
(e) represent the Creditors Committee at hearings held before
the Court and communicate with the Creditors Committee
regarding the issues raised, as well as the decisions of
the Court; and
(f) to perform all other legal services for the Creditors
Committee, which may be necessary and proper in the
proceeding.
Pachulski Stang will be paid based on its standard hourly rates,
and will be reimbursed for actual, necessary expenses and other
charges. The principal attorneys presently designated to
represent the Creditors Committee and their current standard
hourly rates are:
Professional Rate
------------ ----
James I. Stang $650
Kenneth H. Brown $650
Gillian N. Brown $550
Pamela E. Singer $550
Gillian N. Brown, Esq., a partner at Pachulski Stang, assures the
Court that the firm is a "disinterested person," as that term is
defined in Section 101(14) of the Bankruptcy Code.
About the Archdiocese of Milwaukee
The Diocese of Milwaukee was established on November 28, 1843, and
was elevated to an Archdiocese on February 12, 1875, by Pope Pius
IX. The region served by the Archdiocese consists of 4,758 square
miles in southeast Wisconsin which includes counties Dodge, Fond
du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth,
Washington and Waukesha. There are 657,519 registered Catholics
in the Region.
The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for
Chapter 11 bankruptcy protection (Bankr. E.D. Wisc. Case No.
11-20059) on January 4, 2011, to address claims over sexual abuse
by priests on minors.
The Archdiocese became at least the eighth Roman Catholic diocese
in the U.S. to file for bankruptcy to settle claims from current
and former parishioners who say they were sexually molested by
priests.
Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in
Milwaukee, Wisconsin, serves as the Archdiocese's counsel.
The Archdiocese estimated assets and debts of $10 million to
$50 million in its Chapter 11 petition.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
CATHOLIC CHURCH: Milw. Panel Wins OK to Hire Local Counsel
----------------------------------------------------------
The Official Committee of Unsecured Creditors in the bankruptcy
case of the Archdiocese of Milwaukee received permission from the
United States Bankruptcy Court for the Eastern District of
Wisconsin to retain Howard, Solochek & Weber, S.C., as its local
counsel, nunc pro tunc to January 25, 2011.
The Office of the U.S. Trustee previously notified the Court that
it does not oppose the Application.
As local counsel, HS&W will, among other things:
-- advise the Creditors Committee with respect to its rights,
duties and powers in the bankruptcy case;
-- assist and advise the Creditors Committee in its
consultations with the Archdiocese relating to the
administration of the case;
-- assist and advise the Creditors Committee in analyzing the
claims of the Archdiocese's creditors and its capital
structure, and in negotiating with the holders of claims,
and if appropriate, equity interests;
-- assist the Creditors Committee's investigation of the acts,
conduct, assets, liabilities and financial condition of the
Archdiocese and other parties involved with the Diocese and
its operation; and
-- assist the Creditors Committee in analyzing transactions
and issues relating to the Archdiocese's non-debtor
affiliates.
Albert Solochek, Esq., Andrew Herback, Esq., and Jason Pilmaier,
Esq., are presently expected to do the primary work on the case,
Charles Linneman, chairman of the Creditors Committee, informs
Judge Kelley. HS&W will be paid based on its ordinary and
customary hourly rates in effect on the date the services are
rendered, and will be reimbursed of its necessary expenses.
The current hourly rates of HS&W are:
Professional Rate
------------ ----
Partners $225
Associates $200
Paraprofessionals $50 - $70
Mr. Solochek assures Judge Kelley that HS&W is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
About the Archdiocese of Milwaukee
The Diocese of Milwaukee was established on November 28, 1843, and
was elevated to an Archdiocese on February 12, 1875, by Pope Pius
IX. The region served by the Archdiocese consists of 4,758 square
miles in southeast Wisconsin which includes counties Dodge, Fond
du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth,
Washington and Waukesha. There are 657,519 registered Catholics
in the Region.
The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for
Chapter 11 bankruptcy protection (Bankr. E.D. Wisc. Case No.
11-20059) on January 4, 2011, to address claims over sexual abuse
by priests on minors.
The Archdiocese became at least the eighth Roman Catholic diocese
in the U.S. to file for bankruptcy to settle claims from current
and former parishioners who say they were sexually molested by
priests.
Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in
Milwaukee, Wisconsin, serves as the Archdiocese's counsel.
The Archdiocese estimated assets and debts of $10 million to
$50 million in its Chapter 11 petition.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
CATHOLIC CHURCH: Lawyer Reaches Out to Survivors in Wisconsin
-------------------------------------------------------------
Jeff Anderson, Esq., at Jeff Anderson & Associates, in St. Paul,
Minnesota, launched a 30-day media blitz in Milwaukee on March 3,
2011, to reach out to victims of clergy abuse and encourage them
to come forward, The Associated Press reports.
Mr. Anderson, who represents certain creditors in the Archdiocese
of Milwaukee's bankruptcy case, has accused the Archdiocese of
transferring as much as $75,000,000 off its books in an effort to
shield funds from sex abuse settlements. He also alleged that the
Archdiocese's recently filed schedule of assets and liabilities
and statement of financial affairs are incomplete.
Georgia Pabst of the Journal Sentinel says that Mr. Anderson and
other lawyers representing Abuse Survivors are mounting an unusual
outreach campaign through television and radio ads, print ads, the
Internet and social media to encourage them to speak now. A Web
site http://www.AbusedinWisconsin.comwas also launched.
Four people, who alleged that they were abused as a child, also
urged others to come forward.
A media advisory posted at the firm's Web site at
http://wwww.andersonadvocates.comexplains the reason for the
March 3 news conference launching the effort:
WHY: Reports have documented hundreds of clergy abuse cases in
the Milwaukee Archdiocese over four decades. Many of the
victims in these cases may not be aware of the Archdiocese's
bankruptcy filing or how it may affect their ability to file a
claim. Because the bankruptcy court will limit amount of time
allowed to bring claims, it is important to publicize this
opportunity for victims to be informed and come forward.
Jerry Topczewski, the chief of staff to Archbishop Jerome
Listecki, said the Archdiocese had done outreach to victims of
clergy abuse since 2002 through print ads, bulletins and other
avenues, Journal Sentinel reports.
"We've always asked for people to come forward," Mr. Topczewski is
quoted by Journal Sentinel as saying. "At the end of the day,
until a person comes forward, we can't work with them on healing
and resolution," he added.
A claims bar date is the deadline wherein creditors must file
proofs of claim against a debtor to allow the debtor to determine
the universe of potential claimants against it.
A claims bar date has not yet been set in the Archdiocese's
bankruptcy case.
Church: More Concerned About Reputation than Victims
In another report, Journal Sentinel says lawyers for the Abuse
Survivors allege that the former head of the Archdiocese,
Archbishop Timothy Dolan, was more concerned about the Church's
reputation than the actions of an abusive priest.
Annysa Johnson of the Journal Sentinel says Archbishop Dolan
sought to have Franklyn Becker, a priest accused of pedophilia,
defrocked in May 2003 in a letter to future Pope Benedict XVI,
saying Mr. Becker's recent arrest in a California abuse case "make
the potential for true scandal very real."
"It underscores the whole ethos, the whole desire to keep secrets
and avoid scandal," Mr. Anderson is quoted by the Journal Sentinel
as saying.
A copy of the letter is posted at Mr. Anderson's firm Web site at
http://andersonadvocates.com/Files/315/Dolan-Cardinal-Ratzinger-
letterspdf
"The priest was restricted from ministry, a request was made to
the Vatican that he be immediately removed from the priesthood,
and the significant 'impact on his various victims' was
acknowledged," Joseph Zwilling, a spokesman for Archbishop Dolan,
said in an e-mail to the Journal Sentinel.
According to a report by Milwaukee News Buzz, Archbishop Dolan was
told that Mr. Becker was a serial pedophile but waited nine months
before asking the Vatican to defrock the wayward priest. The
report added that it was only after Mr. Becker was arrested on
California sex abuse charges that Archbishop Dolan acted, and the
Vatican, in turn, waited more than a year and a half to act.
About the Archdiocese of Milwaukee
The Diocese of Milwaukee was established on November 28, 1843, and
was elevated to an Archdiocese on February 12, 1875, by Pope Pius
IX. The region served by the Archdiocese consists of 4,758 square
miles in southeast Wisconsin which includes counties Dodge, Fond
du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth,
Washington and Waukesha. There are 657,519 registered Catholics
in the Region.
The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for
Chapter 11 bankruptcy protection (Bankr. E.D. Wisc. Case No.
11-20059) on January 4, 2011, to address claims over sexual abuse
by priests on minors.
The Archdiocese became at least the eighth Roman Catholic diocese
in the U.S. to file for bankruptcy to settle claims from current
and former parishioners who say they were sexually molested by
priests.
Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in
Milwaukee, Wisconsin, serves as the Archdiocese's counsel.
The Archdiocese estimated assets and debts of $10 million to
$50 million in its Chapter 11 petition.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
CC MEDIA: Posts $462.8 Million Net Loss in Full-Year 2010
---------------------------------------------------------
CC Media Holdings, Inc., filed its annual report on Form 10-K,
reporting a net loss of $462.8 million on $5.866 billion of
revenue for the fiscal year ended Dec. 31, 2010, compared with a
net loss of $4.049 billion on $5.552 billion of revenue for the
fiscal year ended Dec. 31, 2009.
Consolidated revenue increased $313.8 million for the year ended
Dec. 31, 2010, compared to 2009, primarily as a result of improved
economic conditions.
The Company recorded impairment charges of $15.4 million during
the fourth quarter of 2010, primarily related to a specific
outdoor market for which the unfavorable impact of litigation has
resulted in the impairment of certain advertising structures and
declines in revenue. In comparison, as a result of the global
economic downturn and the corresponding reduction of revenues, the
Company also recorded non-cash impairment charges of
$4.119 billion in 2009.
The Company's balance sheet at Dec. 31, 2010, showed
$17.480 billion in total assets, $24.685 in total liabilities, and
a stockholders' deficit of $7.205 billion.
A full-text copy of the Form 10-K is available for free at:
http://researcharchives.com/t/s?74eb
About CC Media and Clear Channel
San Antonio, Tex.-based CC Media Holdings, Inc. (OTC BB: CCMO)
-- http://www.ccmediaholdings.com/-- is the parent company of
Clear Channel Communications, Inc. CC Media Holdings is a global
media and entertainment company specializing in mobile and on-
demand entertainment and information services for local
communities and premier opportunities for advertisers. The
Company's businesses include radio and outdoor displays.
CC Media has three reportable business segments: Radio
Broadcasting; Americas Outdoor Advertising; and International
Outdoor Advertising. Approximately half of CC Media's revenue is
generated from its Radio Broadcasting segment.
* * *
CC Media Holdings carries 'CCC+' issuer credit ratings from
Standard & Poor's. Clear Channel Carries a 'Caa2' corporate
family rating from Moody's Investors Service and an issuer default
rating of 'CCC' from Fitch Ratings.
Fitch said in November 2010, that its ratings concerns center on
the company's highly leveraged capital structure, with significant
maturities in 2014 and 2016; the considerable interest burden that
pressures free cash flow generation; technological threats and
secular pressures in radio broadcasting; and the company's
exposure to cyclical advertising revenue. The ratings are
supported by the company's leading position in both the outdoor
and radio industries, as well as the positive fundamentals and
digital opportunities in the outdoor advertising space.
In February 2011, Standard & Poor's affirmed it 'CCC+' corporate
credit rating and positive outlook on CC Media Holdings and
operating subsidiary Clear Channel, which S&P views on a
consolidated basis.
S&P said the 'CCC+' corporate credit rating on CC Media Holdings
Inc. reflects the risks surrounding the longer-term viability of
the company's capital structure--in particular, refinancing risk
relating to sizable secured debt maturities in 2014 ($3.2 billion
pro forma for the transaction) and 2016 ($10.4 billion). In S&P's
view, the company has a satisfactory business risk profile, due to
its position as the largest radio and global outdoor advertising
operator, its good geographic and market diversity, and moderate
long-term growth prospects at the outdoor business. S&P views the
financial risk profile as highly leveraged, given the company's
significant refinancing risk, roughly break-even EBITDA coverage
of interest expense, and slim discretionary cash flow.
CDC PROPERTIES: Section 341(a) Meeting Slated for April 6
---------------------------------------------------------
Robert D. Miller Jr., the United States Trustee for Region 18,
will convene a meeting of creditors of CDC Properties I LLC on
April 6, 2011 at 02:00 p.m., at Courtroom J, Union Station,
Tacoma, Washington.
This is the first meeting of creditors required under Section
341(a) of the U.S. Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Tacoma, Washington-based CDC Properties I, LLC, owns 10 commercial
buildings in Washington. Most of the space in its buildings is
leased to the State of Washington and occupied by various of its
agencies. CDC Properties filed for Chapter 11 bankruptcy
protection (Bankr. W.D. Wash. Case No. 11-41010) on Feb. 10, 2011.
Timothy W. Dore, Esq., at Ryan Swanson & Cleveland PLLC, serves as
the Debtor's general counsel. The Debtor disclosed $47,304,590 in
total assets, and $75,714,502 in total liabilities as of the
Chapter 11 filing.
CDC PROPERTIES: Wants to Access Midland's Cash Collateral
---------------------------------------------------------
CDC Properties I LLC is asking the Hon. Paul B. Snyder of the U.S.
Bankruptcy Court for the Western District of Washington for
authority to access a prepetition lender's cash collateral.
A hearing is set for March 17, 2011, at 9:00 a.m., to consider the
Debtor's request.
The Debtor said it has no material assets other than buildings and
the rents they generate. All or substantially all of the Debtor's
assets are subject to a security interest in favor of Midland Loan
Services Inc. The Debtor believes Midland's security interest in
perfected and in first position. The Debtor owes Midland about
$39,600,00 as of the Debtor's bankruptcy filing. There is as
security interest junior to Midland's security interest in favor
of Equity Funding LLC or its successors or assigns. The Debtor's
obligations to Equity is a joint obligation of numerous entities
affiliates with the Debtor and those affiliated entities have also
granted security interest in their assets to Equity. The amount
owed to Equity is about $36,600,000.
The Debtor's obligations to Midland are evidence by a series of
loan documents originating with tow promissory notes and deeds of
trust and assignments of rents dated Sept. 29, 2004.
As of the Debtor's bankruptcy filing, it estimates that the value
of the buildings is about $45,000,000.
The Debtor assures that Midland is adequately protected by an
equity cushion in the buildings. Based on the current rental and
other income of about $425,000 per month, the Debtor expects to be
able to pay all of its postpetition expenses and its regular
monthly payment to Midland.
The Debtor proposes to use cash collateral in accordance with a
budget, a copy of which is available for free at
http://ResearchArchives.com/t/s?74da
About CDC Properties
Tacoma, Washington-based CDC Properties I, LLC, owns 10 commercial
buildings in Washington. Most of the space in its buildings is
leased to the State of Washington and occupied by various of its
agencies. CDC Properties filed for Chapter 11 bankruptcy
protection (Bankr. W.D. Wash. Case No. 11-41010) on Feb. 10, 2011.
Timothy W. Dore, Esq., at Ryan Swanson & Cleveland PLLC, serves as
the Debtor's general counsel. The Debtor disclosed $47,304,590 in
total assets, and $75,714,502 in total liabilities as of the
Chapter 11 filing.
CENTRAL EUROPEAN: S&P Downgrades Corporate Credit Rating to 'B'
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it has lowered its
long-term corporate credit rating on U.S.-based Central European
Distribution Corp., the parent company of Poland-based vodka
manufacturer CEDC International sp. z o.o., to 'B' from 'B+'. The
outlook is stable.
At the same time, S&P has lowered its issue rating on CEDC's
$380 million and EUR430 million senior secured notes due 2016 to
'B' from 'B+', and have lowered its issue rating on CEDC's
$310 million senior unsecured convertible notes due 2013 to 'CCC+'
from 'B-'.
"The downgrade reflects S&P's view of CEDC's weak 2010 operating
performance, the deterioration of its credit metrics, and its
belief that deleveraging will likely be delayed by at least a
year," said Standard & poor's credit analyst Florence Devevey.
CEDC reported EBITDA of $144 million in 2010, down from
$216 million in 2009 (pro forma). Consequently, net debt to
EBITDA (as per the covenant definition) reached almost 6.5x at
end-December 2010, significantly exceeding the 5.0x level set
in the covenant of the company's Polish zloty (PLN)330 million
($112 million) credit facility, of which only PLN130 million
($44 million) was drawn at end-February 2011. Standard & Poor's-
adjusted leverage was about 7.5x at end-December 2010 (pro forma
for the recent minority buyout). While S&P previously anticipated
that CEDC would likely reduce leverage (adjusted by Standard &
Poor's) to 5.0x in 2011, S&P now believe that CEDC will unlikely
deleverage to this level before year-end 2012.
The rating on CEDC also reflects the company's business risk
profile, which S&P views as "fair" according to its criteria,
given limited product and geographic diversification, and
significant exposure to the Russian market. Additional rating
constraints are CEDC's high leverage and strong exposure to
exchange rate fluctuations. These risks are partially mitigated,
in S&P's view, by CEDC's position as the largest vodka
manufacturer in Central Europe and its well-established regional
brands, which enable substantial free operating cash flow
generation.
The stable outlook reflects S&P's belief that CEDC's performance
will likely start recovering in 2011, as well as its view of
CEDC's robust cash generation capacity and management's declared
focus on deleveraging," said Ms. Devevey. "Rating stability also
depends on CEDC's re-establishment of its debt metrics in 2011 to
close to 6x for adjusted debt to EBITDA and to more than 2x for
EBITDA interest coverage."
A downgrade would be possible if CEDC were unable to successfully
address its covenant issues by, for example, resetting them or
arranging alternative financing. S&P could also lower the rating
if CEDC were unable to generate positive free cash flow in 2011 or
if it failed to deleverage to the level S&P mention above.
In S&P's opinion, the potential for an upgrade is currently
limited due to CEDC's high leverage and its uncertainty regarding
a significant recovery in the Russian market and the impact of the
company's marketing initiatives in Poland.
CHOA VISION: Seeks Approval to Sell Rooftop Easement
----------------------------------------------------
CHOA Vision LLC asks the Hon. Richard M. Neiter of the U.S.
Bankruptcy Court for the Central District of California to approve
a sale transaction for certain easement assets, free and clear of
all liens, mortgages and encumbrances.
The Debtor tells the Court that it has an offer to sell a rooftop
easement to T6 Unison Site Management LLC for $230,000. The
proposed sale of the easement will allow the Debtor to generate
cash for operation of its hotel and will further allow funding of
a viable, confirmable Chapter 11 plan, which will benefit the
Debtor's bankruptcy estate and its creditors, according to the
Debtor.
The Debtor adds that Unison will receive from the tenant, the
currently scheduled rent stream for the term of the easement
purchased. The Debtor and Unison will each receive 50% of all
rent collected from new tenants located within the additional
space.
Secured creditor 50 Morgan CT LLC protested to the Debtor's sale.
About Choa Vision
CHOA Vision LLC owns the Crowne Plaza hotel just north of downtown
Hartford, Connecticut. The 350-room hotel is being managed by
Packard Hospitality Group. CHOA is owned by the Christian Hotel
Owners Association, a group of primarily Korean American investors
led by Chan Soo Cho.
CHOA Vision filed for Chapter 11 protection on August 18, 2010
(Bankr. C.D. Calif. Case No. 10-44798). Michael Jay Berger, Esq.,
at the Law Offices Of Michael Jay Berger, in Beverly Hills,
California, serve as the Debtor's bankruptcy counsel. The Debtor
estimated its assets and debts at $10 million to $50 million.
CLASS A PROPERTIES: Case Summary & 10 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Class A Properties Twenty, LLC
7W240 22nd Street, Suite 305
Oak Brook Terrace, IL 60181
Bankruptcy Case No.: 11-09680
Chapter 11 Petition Date: March 9, 2011
Court: United States Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: Jacqueline P. Cox
Debtor's Counsel: Penelope N. Bach, Esq.
BACH LAW OFFICES
P.O. Box 1285
Northbrook, IL 60065
Tel: (847) 564-0808
Fax: (847) 564-0985
E-mail: pnbach@bachoffices.com
Scheduled Assets: $1,614,550
Scheduled Debts: $1,942,909
A list of the Company's 10 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/ilnb11-09680.pdf
The petition was signed by Ventura Ramirez, president.
CLEARWIRE CORP: Names Chairman John Stanton as Interim CEO
----------------------------------------------------------
John Stanton, chairman of Clearwire's board of directors and
former CEO of Western Wireless and VoiceStream Wireless, has been
named CEO of Clearwire on an interim basis, effective immediately.
Stanton will continue to serve in his role as board chairman.
Stanton replaces Bill Morrow who has resigned as CEO and as a
director of the board, citing personal reasons. Morrow will
continue to serve as an advisor to the company during the
transition period. The company has appointed a search committee,
chaired by board member Dennis Hersch, to lead the hiring process
for a new CEO.
"I would like to commend Bill for his tremendous leadership in
building the first U.S. 4G network, adding more than 5 million
subscribers, and raising funds in a challenging economic
environment," said John Stanton. "Bill built a strong leadership
team which enables us to promote Erik Prusch and Hope Cochran to
new roles. Together, the entire management team at Clearwire
remains focused on delivering value to its customers and
shareholders."
Other Executive Appointments
As part of the announcement, Erik Prusch, Clearwire's CFO, has
been promoted to the newly created position of chief operating
officer. In this position, Prusch will be responsible for the
company's day-to-day operations, including wholesale and retail
sales, marketing, customer service, supply chain, human resources,
IT and network operations. In addition, Hope Cochran, Clearwire's
senior vice president and treasurer, has been promoted to the
position of CFO. Cochran will be responsible for all of the
company's financial and investor related functions, including
overseeing Clearwire's ongoing fundraising efforts.
The company also announced that Mike Sievert, chief commercial
officer, and Kevin Hart, CIO, are both leaving the company to
pursue other opportunities. Both Sievert and Hart will remain
with the company for a transition period. "We thank Mike and
Kevin for their service and contributions during an incredible
period of growth for Clearwire, and we wish them continued success
in the future," said Stanton.
The Company said the changes in executive leadership are not
expected to impact its progress on an agreement with Sprint to
resolve wholesale pricing disputes. Clearwire believes that an
agreement with Sprint is imminent.
Stanton has held numerous leadership positions during his career
in the wireless industry. He currently serves as chairman of the
board of Trilogy Partnerships including Trilogy International
Partners which operates wireless systems in Haiti, Dominican
Republic, Bolivia and New Zealand. Stanton served as chairman and
CEO of Western Wireless Corporation from 1992 until its
acquisition by ALLTEL Corporation in 2005. From 1994 to 2003,
Stanton served as chairman and CEO of VoiceStream Wireless
Corporation, which was sold to Deutsche Telecom and became T-
Mobile USA.
About Clearwire Corporation
Kirkland, Wash.-based Clearwire Corporation (NASDAQ: CLWR)
-- http://www.clearwire.com/-- through its operating
subsidiaries, is a leading provider of wireless broadband
services. Clearwire's 4G mobile broadband network serves 68
markets, including New York City, Los Angeles, Chicago, Dallas,
Philadelphia, Houston, Miami, Washington, D.C., Atlanta and
Boston.
The Company's balance sheet at Dec. 31, 2010 showed $11.04 billion
in total assets, $5.17 billion in total liabilities $5.87 billion
in total equity.
The Company disclosed in its Form 10-Q for the third quarter ended
Sept. 30, 2010, that its expected continued losses from operations
and the uncertainty about its ability to obtain sufficient
additional capital raise substantial doubt about the Company's
ability to continue as a going concern.
"Without additional financing sources, we forecast that our cash
and short-term investments would be depleted as early as the
middle of 2011. Thus, we will be required to raise additional
capital in the near-term in order to continue operations.
* * *
As reported by the Troubled Company Reporter on Nov. 11, 2010,
Standard & Poor's Ratings Services lowered its corporate credit
rating, and all other ratings, on Clearwire Corp. to 'CCC' from
'B-'. At the same time, S&P revised the CreditWatch listing on
the company from negative to developing. S&P had initially placed
the ratings on CreditWatch with negative implications on Oct. 6,
2010, based on S&P's view that Clearwire faced significant near-
term liquidity risks.
The downgrade follows the company's recent disclosure with the
Securities and Exchange Commission regarding the uncertainty about
its ability to obtain additional capital and continue as a going
concern. In Clearwire's 2010 third-quarter earnings report and
conference call, the company indicated that it expected to run out
cash by mid-2011, which is consistent with S&P's earlier comments.
Cash totaled around $1.4 billion as of Sept. 30, 2010.
CNOSSEN DAIRY: Can Hire General Counsel, Accountant
---------------------------------------------------
Cnossen Dairy won permission from the Bankruptcy Court to employ
William Hunter as general counsel.
The Debtor also obtained permission to hire Brad Carr as
accountant.
Mr. Hunter is from the law firm Hunter & Oelke P.C. Mr. Hunter
said his firm has no connection with the Debtor except that he has
represented the Debtor, the family members and related entities as
general counsel since 2005. Mr. Hunter said Cnossen Dairy owes
his firm $3,500 for pre-bankruptcy services plus $230 in
postpetition fees.
Mr. Hunter charges $200 per hour for his services.
About Cnossen Dairy
Hereford, Texas-based Cnossen Dairy filed for Chapter 11
bankruptcy protection (Bankr. N.D. Tex. Case No. 10-20760) on
Nov. 12, 2010. J. Bennett White, Esq., at J. Bennett White, P.C.,
serves as bankruptcy counsel to the Debtor. Templeton, Smithee,
Hayes, Heinrich & Russell, LLP, is the local counsel. The Debtor
estimated its assets and debts at $50 million to $100 million.
The bankruptcy cases of Cnossen Family Partnership and UC Farms,
LLC (Case Nos. 10-20793 and 10-20794) are jointly administered
with the Cnossen Dairy's case.
COACH AMERICA: S&P Affirms 'B-' Corporate Credit Rating
-------------------------------------------------------
Standard & Poor's Ratings Services said that it has affirmed its
ratings on Coach America Holdings Inc., including the 'B-'
corporate credit rating, and removed them from CreditWatch, where
they were placed with negative implications on Nov. 15, 2010. S&P
also assigned a stable outlook.
"The ratings on Coach reflect its highly leveraged capital
structure, the capital-intensive nature of the bus transportation
industry, and the company's vulnerability to economic and
competitive pressures," said Standard & Poor's credit analyst Lisa
Jenkins. "Positive credit factors include Coach's significant
market position (albeit in highly fragmented markets), diversified
customer base, and contractual arrangements with certain customers
that provide some stability to revenues and earnings. S&P
characterize its business profile as weak and its financial
profile as highly leveraged."
The outlook is stable. S&P believes that the company's currently
depressed operating performance and ongoing capital investment
requirements will result in continued weak credit metrics and
preclude an upgrade in the coming year. However, S&P believes the
improving economy should lead to better operating results over
time. This, coupled with the recent easing of covenants and an
equity infusion from owner Fenway Partners should prevent a
ratings downgrade this year.
"However, S&P could lower the ratings if continued operating
pressures or higher-than-expected capital investment cause
liquidity to deteriorate from current levels or covenant
compliance issues to resurface," Ms. Jenkins continued. "If
operating results and credit metrics improve faster than S&P
currently anticipate, so that debt to EBITDA improves to 5.5x and
liquidity stays at or above current levels, S&P could raise the
ratings modestly."
COMMERCIAL VEHICLE: FMR LLC Discloses 8.607% Equity Stake
---------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, FMR LLC and Edward C. Johnson 3d disclosed
that they beneficially own 2,456,978 shares of common stock of
Commercial Vehicle Group Inc. representing 8.607% of the shares
outstanding. The number of shares outstanding of the Company's
common stock, par value $.01 per share, at Sept. 30, 2010 was
28,545,253 shares.
About Commercial Vehicle Group
New Albany, Ohio-based Commercial Vehicle Group, Inc., (Nasdaq:
CVGI) supplies fully integrated system solutions for the global
commercial vehicle market, including the heavy-duty truck market,
the construction and agricultural markets, and the specialty and
military transportation markets. The Company has facilities
located in the United States in Arizona, Indiana, Illinois, Iowa,
North Carolina, Ohio, Oregon, Tennessee, Virginia and Washington
and outside of the United States in Australia, Belgium, China,
Czech Republic, Mexico, Ukraine and the United Kingdom.
* * *
Commercial Vehicle carries a 'Caa2' Corporate Family Rating and
'Caa2/LD' Probability of Default Rating from Moody's. It has
'CCC+' issuer credit ratings from Standard & Poor's.
The Company's balance sheet at Dec. 31, 2010 showed
$286.21 million in total assets, $286.32 million in total
liabilities, and a $112,000 stockholders' deficit.
In mid-October 2010, Moody's Investors Service upgraded Commercial
Vehicle Group, Inc.'s Corporate Family Rating to Caa1 from Caa2,
and revised the ratings outlook to positive from negative. These
positive actions recognize the continuing improvement in the build
rates for commercial vehicles and the realized benefits of the
company's operating and capital restructurings. According to
Moody's, the Caa1 CFR reflects modest size, high debt leverage,
and exposure to highly cyclical commercial vehicle end markets.
Demand for commercial vehicle components is sensitive to both
economic cycles and regulatory implementation schedules.
COMPTON PETROLEUM: FMR LLC's Equity Stake Down to 0%
----------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, FMR LLC and Edward C. Johnson 3d disclosed
that they do not own any shares of common stock of Compton
Petroleum Corp.
About Compton Petroleum
Compton Petroleum Corporation is an exploration and production
company. The Company explores for, develops, and produces oil and
gas in western Canada. Compton's interests include the areas of
Shekille, Senex, Deep Basin, Rimbey, and Vulcan/Gladys, all in
Alberta, Canada.
The Company's balance sheet at Dec. 31, 2010 showed $1.38 billion
in total assets, $712.29 million in liabilities and
$664.03 million in shareholders' equity.
* * *
Moody's Investors Service has withdrawn Compton Petroleum's
ratings following the repayment of its rated debt. Ratings
withdrawn include the 'Caa1' Corporate Family Rating and
Probability of Default Rating, and the 'Caa2' senior unsecured
notes rating.
As reported by the Troubled Company Reporter on Dec. 1, 2010,
Standard & Poor's Ratings Services withdrew its 'B' long-
term corporate credit rating on Compton Petroleum Corp. At the
same time, Standard & Poor's withdrew its 'B-' senior unsecured
rating and '5' recovery rating on subsidiary Compton Petroleum
Finance Corp.'s US$193.5 million senior unsecured notes. S&P
withdrew the ratings at the Company's request.
CONSTITUTIONAL CASUALTY: AM Best Cuts FSR on 'Insolvency' Ruling
----------------------------------------------------------------
A.M. Best Co. has downgraded the financial strength rating to F
(In Liquidation) from D (Poor) and issuer credit rating to "rs"
from "c" of Constitutional Casualty Company (Constitutional)
(Chicago, IL).
On January 21, 2011, the Circuit Court of Cook County Illinois
entered an Agreed Order of Liquidation with a finding of
insolvency against Constitutional.
COVENTRY HEALTH CARE: AM Best Holds 'B' Financial Strength Rating
-----------------------------------------------------------------
A.M. Best Co. has revised the outlook to stable from negative and
affirmed the financial strength ratings (FSR) and issuer credit
ratings (ICR) of the majority of health care subsidiaries of
Coventry Health Care, Inc. (Coventry) (Delaware) [NYSE: CVH]. At
the same time, A.M. Best has revised the outlook to stable from
negative and affirmed the ICR of "bbb-" and all debt ratings of
Coventry.
Additionally, A.M. Best has upgraded the FSR to B++ (Good) from B+
(Good) and ICRs to "bbb" from "bbb-" of HealthCare USA of
Missouri, LLC (St. Louis, MO) due to its improved operating
performance and capitalization. The outlook for these ratings
also has been revised to stable from negative. (See below for a
detailed listing of the companies and ratings.)
Coventry's operating results improved substantially, as net income
increased 81% in 2010 following two consecutive years of net
earnings decline. The underwriting and operating gains grew at
the majority of the subsidiaries in 2010, following their exit
from the Medicare Advantage Private Fee For Service (PFFS) line of
business, along with improved commercial pricing, some benefit
changes for Medicare Advantage and reductions in administrative
expenses. In addition, stronger earnings and premium reductions
due to the exit from the PFFS business led to risk-based
capitalization improvement. Furthermore, Coventry substantially
improved its financial leverage during 2010, as the debt/capital
ratio was 27.6% at year-end 2010, compared to 30.1% in the fourth
quarter of 2009 and 35.7% in the fourth quarter of 2008. Coventry
has a strong liquidity position, with $850 million cash on hand
and $390 million of revolving credit available as of December 31,
2010.
Though Coventry's regulated earnings have improved, both the
current and historical medical loss ratio at a number of Coventry
subsidiaries is below the minimum loss ratio requirement for 2011.
A.M. Best is concerned that Coventry's future regulated earnings
may decline driven by mandatory rebates and eventually a higher
medical loss ratio. In addition, earnings may be pressured by a
growing share of lower margins in the Medicare and Medicaid
businesses, as Coventry's commercial membership, though improved
in 2010 compared to 2009, declined as a share of total enrollment
over time.
The FSR of A- (Excellent) and ICRs of "a-" have been affirmed for
these subsidiaries of Coventry Health Care, Inc.:
-- Coventry Health and Life Insurance Company
-- Carelink Health Plans, Inc.
-- Group Health Plan, Inc.
-- HealthAmerica Pennsylvania, Inc.
-- HealthAssurance Pennsylvania, Inc.
-- Coventry Health Care of Georgia, Inc.
The FSR of B++ (Good) and ICRs of "bbb+" have been affirmed for
these subsidiaries of Coventry Health Care, Inc.:
-- PersonalCare Insurance of Illinois, Inc.
-- Southern Health Services, Inc.
-- Altius Health Plans
-- Coventry Health Care of Iowa, Inc.
-- WellPath Select, Inc.
The FSR of B++ (Good) and ICRs of "bbb" have been affirmed for
these subsidiaries of Coventry Health Care, Inc.:
-- Coventry Health Care of Kansas, Inc.
-- First Health Life & Health Insurance Company
-- Cambridge Life Insurance Company
The FSR of B+ (Good) and ICRs of "bbb-" have been affirmed for
these subsidiaries of Coventry Health Care, Inc.:
-- Coventry Health Care of Louisiana, Inc.
-- Coventry Health Care of Delaware, Inc.
-- OmniCare Health Plan, Inc.
-- Coventry Health Care of Nebraska, Inc.
-- Mercy Health Plans of Missouri, Inc.
-- Mercy Health Plans
The FSR of B (Fair) and ICRs of "bb+" have been affirmed for these
subsidiaries of Coventry Health Care, Inc.:
-- Coventry Health Care of Florida, Inc.
-- Coventry Health Plan of Florida, Inc.
-- Coventry Summit Health Plan, Inc.
These debt ratings have been affirmed:
Coventry Health Care, Inc.:
-- "bbb-" on $400 million 6.3% senior unsecured notes, due 2014
-- "bbb-" on $250 million 5.875% senior unsecured notes, due
2012
-- "bbb-" on $250 million 6.125% senior unsecured notes, due
2015
-- "bbb-" on $400 million 5.950% senior unsecured notes, due
2017
COVENTRY HEALTH PLAN: AM Best Affirms 'B', Outlook Now Positive
---------------------------------------------------------------
A.M. Best Co. has revised the outlook to stable from negative and
affirmed the financial strength ratings (FSR) and issuer credit
ratings (ICR) of the majority of health care subsidiaries of
Coventry Health Care, Inc. (Coventry) (Delaware) [NYSE: CVH]. At
the same time, A.M. Best has revised the outlook to stable from
negative and affirmed the ICR of "bbb-" and all debt ratings of
Coventry.
Additionally, A.M. Best has upgraded the FSR to B++ (Good) from B+
(Good) and ICRs to "bbb" from "bbb-" of HealthCare USA of
Missouri, LLC (St. Louis, MO) due to its improved operating
performance and capitalization. The outlook for these ratings
also has been revised to stable from negative. (See below for a
detailed listing of the companies and ratings.)
Coventry's operating results improved substantially, as net income
increased 81% in 2010 following two consecutive years of net
earnings decline. The underwriting and operating gains grew at
the majority of the subsidiaries in 2010, following their exit
from the Medicare Advantage Private Fee For Service (PFFS) line of
business, along with improved commercial pricing, some benefit
changes for Medicare Advantage and reductions in administrative
expenses. In addition, stronger earnings and premium reductions
due to the exit from the PFFS business led to risk-based
capitalization improvement. Furthermore, Coventry substantially
improved its financial leverage during 2010, as the debt/capital
ratio was 27.6% at year-end 2010, compared to 30.1% in the fourth
quarter of 2009 and 35.7% in the fourth quarter of 2008. Coventry
has a strong liquidity position, with $850 million cash on hand
and $390 million of revolving credit available as of December 31,
2010.
Though Coventry's regulated earnings have improved, both the
current and historical medical loss ratio at a number of Coventry
subsidiaries is below the minimum loss ratio requirement for 2011.
A.M. Best is concerned that Coventry's future regulated earnings
may decline driven by mandatory rebates and eventually a higher
medical loss ratio. In addition, earnings may be pressured by a
growing share of lower margins in the Medicare and Medicaid
businesses, as Coventry's commercial membership, though improved
in 2010 compared to 2009, declined as a share of total enrollment
over time.
The FSR of A- (Excellent) and ICRs of "a-" have been affirmed for
these subsidiaries of Coventry Health Care, Inc.:
-- Coventry Health and Life Insurance Company
-- Carelink Health Plans, Inc.
-- Group Health Plan, Inc.
-- HealthAmerica Pennsylvania, Inc.
-- HealthAssurance Pennsylvania, Inc.
-- Coventry Health Care of Georgia, Inc.
The FSR of B++ (Good) and ICRs of "bbb+" have been affirmed for
these subsidiaries of Coventry Health Care, Inc.:
-- PersonalCare Insurance of Illinois, Inc.
-- Southern Health Services, Inc.
-- Altius Health Plans
-- Coventry Health Care of Iowa, Inc.
-- WellPath Select, Inc.
The FSR of B++ (Good) and ICRs of "bbb" have been affirmed for
these subsidiaries of Coventry Health Care, Inc.:
-- Coventry Health Care of Kansas, Inc.
-- First Health Life & Health Insurance Company
-- Cambridge Life Insurance Company
The FSR of B+ (Good) and ICRs of "bbb-" have been affirmed for
these subsidiaries of Coventry Health Care, Inc.:
-- Coventry Health Care of Louisiana, Inc.
-- Coventry Health Care of Delaware, Inc.
-- OmniCare Health Plan, Inc.
-- Coventry Health Care of Nebraska, Inc.
-- Mercy Health Plans of Missouri, Inc.
-- Mercy Health Plans
The FSR of B (Fair) and ICRs of "bb+" have been affirmed for these
subsidiaries of Coventry Health Care, Inc.:
-- Coventry Health Care of Florida, Inc.
-- Coventry Health Plan of Florida, Inc.
-- Coventry Summit Health Plan, Inc.
These debt ratings have been affirmed:
Coventry Health Care, Inc.:
-- "bbb-" on $400 million 6.3% senior unsecured notes, due 2014
-- "bbb-" on $250 million 5.875% senior unsecured notes, due
2012
-- "bbb-" on $250 million 6.125% senior unsecured notes, due
2015
-- "bbb-" on $400 million 5.950% senior unsecured notes, due
2017
COVENTRY SUMMIT: AM Best Holds 'B' Financial Strength Rating
------------------------------------------------------------
A.M. Best Co. has revised the outlook to stable from negative and
affirmed the financial strength ratings (FSR) and issuer credit
ratings (ICR) of the majority of health care subsidiaries of
Coventry Health Care, Inc. (Coventry) (Delaware) [NYSE: CVH]. At
the same time, A.M. Best has revised the outlook to stable from
negative and affirmed the ICR of "bbb-" and all debt ratings of
Coventry.
Additionally, A.M. Best has upgraded the FSR to B++ (Good) from B+
(Good) and ICRs to "bbb" from "bbb-" of HealthCare USA of
Missouri, LLC (St. Louis, MO) due to its improved operating
performance and capitalization. The outlook for these ratings
also has been revised to stable from negative. (See below for a
detailed listing of the companies and ratings.)
Coventry's operating results improved substantially, as net income
increased 81% in 2010 following two consecutive years of net
earnings decline. The underwriting and operating gains grew at
the majority of the subsidiaries in 2010, following their exit
from the Medicare Advantage Private Fee For Service (PFFS) line of
business, along with improved commercial pricing, some benefit
changes for Medicare Advantage and reductions in administrative
expenses. In addition, stronger earnings and premium reductions
due to the exit from the PFFS business led to risk-based
capitalization improvement. Furthermore, Coventry substantially
improved its financial leverage during 2010, as the debt/capital
ratio was 27.6% at year-end 2010, compared to 30.1% in the fourth
quarter of 2009 and 35.7% in the fourth quarter of 2008. Coventry
has a strong liquidity position, with $850 million cash on hand
and $390 million of revolving credit available as of December 31,
2010.
Though Coventry's regulated earnings have improved, both the
current and historical medical loss ratio at a number of Coventry
subsidiaries is below the minimum loss ratio requirement for 2011.
A.M. Best is concerned that Coventry's future regulated earnings
may decline driven by mandatory rebates and eventually a higher
medical loss ratio. In addition, earnings may be pressured by a
growing share of lower margins in the Medicare and Medicaid
businesses, as Coventry's commercial membership, though improved
in 2010 compared to 2009, declined as a share of total enrollment
over time.
The FSR of A- (Excellent) and ICRs of "a-" have been affirmed for
these subsidiaries of Coventry Health Care, Inc.:
-- Coventry Health and Life Insurance Company
-- Carelink Health Plans, Inc.
-- Group Health Plan, Inc.
-- HealthAmerica Pennsylvania, Inc.
-- HealthAssurance Pennsylvania, Inc.
-- Coventry Health Care of Georgia, Inc.
The FSR of B++ (Good) and ICRs of "bbb+" have been affirmed for
these subsidiaries of Coventry Health Care, Inc.:
-- PersonalCare Insurance of Illinois, Inc.
-- Southern Health Services, Inc.
-- Altius Health Plans
-- Coventry Health Care of Iowa, Inc.
-- WellPath Select, Inc.
The FSR of B++ (Good) and ICRs of "bbb" have been affirmed for
these subsidiaries of Coventry Health Care, Inc.:
-- Coventry Health Care of Kansas, Inc.
-- First Health Life & Health Insurance Company
-- Cambridge Life Insurance Company
The FSR of B+ (Good) and ICRs of "bbb-" have been affirmed for
these subsidiaries of Coventry Health Care, Inc.:
-- Coventry Health Care of Louisiana, Inc.
-- Coventry Health Care of Delaware, Inc.
-- OmniCare Health Plan, Inc.
-- Coventry Health Care of Nebraska, Inc.
-- Mercy Health Plans of Missouri, Inc.
-- Mercy Health Plans
The FSR of B (Fair) and ICRs of "bb+" have been affirmed for these
subsidiaries of Coventry Health Care, Inc.:
-- Coventry Health Care of Florida, Inc.
-- Coventry Health Plan of Florida, Inc.
-- Coventry Summit Health Plan, Inc.
These debt ratings have been affirmed:
Coventry Health Care, Inc.:
-- "bbb-" on $400 million 6.3% senior unsecured notes, due 2014
-- "bbb-" on $250 million 5.875% senior unsecured notes, due
2012
-- "bbb-" on $250 million 6.125% senior unsecured notes, due
2015
-- "bbb-" on $400 million 5.950% senior unsecured notes, due
2017
CROWN FOREX: Judge Allows Feds to Join $84 Mil. Fraud Suit
----------------------------------------------------------
Bankruptcy Law360 reports that a judge in Minnesota gave federal
prosecutors a green light Thursday to intervene in a U.S.
Commodity Futures Trading Commission civil suit accusing the
principals and subsidiaries of Crown Forex SA of perpetrating an
$84 million foreign exchange scheme.
Crown Forex SA -- http://www.crownforex.com/-- was a Bassecourt,
Switzerland-based company that offered trading on 13 currency
pairs + gold and silver.
Swiss markets regulator FINMA entered a bankruptcy ruling took
over the Company on Dec. 9, 2008, and entered a ruling to
liquidate the Company on Feb. 23, 2009, following a money
laundering investigation. The regulator declared the Company
bankrupt on May 29, 2009.
CRYSTALLEX INT'L: Request for Arbitration Registered by ICSID
-------------------------------------------------------------
Crystallex International Corporation announced that its
Feb. 16, 2011, Request for Arbitration before the Additional
Facility of the World Bank's International Centre for Settlement
of Investment Disputes against the Bolivarian Republic of
Venezuela has been registered by the Secretary General of ICSID.
The arbitration, pursuant to the Agreement between the Government
of Canada and the Government of the Republic of Venezuela for the
Promotion and Protection of Investments, was commenced by
Crystallex following the Venezuelan Government's failure to
propose any resolution to the dispute notified by Crystallex on
Nov. 24, 2008 and the subsequent unlawful termination on
Feb. 3, 2011, of the Las Cristinas Mine Operation Contract.
Crystallex's claim is for breach of the Treaty's protections
against expropriation, unfair and inequitable treatment and
discrimination. Crystallex is seeking restitution by Venezuela of
Crystallex's investments, including the MOC, the issuance of the
Permit to develop Las Cristinas and compensation for interim
losses suffered, or alternatively full compensation for the value
of its investment in excess of US$3.8 billion.
The details of the registration are available on ICSID's website
at http://icsid.worldbank.org/ICSID/
About Crystallex International
Based in Toronto, Canada, Crystallex International Corporation
(TSX: KRY) (NYSE Amex: KRY) -- http://www.crystallex.com/-- is a
Canadian-based company, which has been granted the Mine Operating
Contract to develop and operate the Las Cristinas gold properties
located in Bolivar State, Venezuela.
The Company's balance sheet at Sept. 30, 2010, showed
US$63.62 million in total assets, US$108.10 million in total
liabilities, and a stockholders' deficit of US$44.48 million.
"As at Sept. 30, 2010, the Company had working capital of
US$12.50 million, including cash of $21.47 million. Management
estimates that these funds will be sufficient to meet the
Company's obligations and budgeted expenditures for the
foreseeable future, but will not be sufficient to repay the
US$100.00 million notes payable due on December 23, 2011."
CUMULUS MEDIA: Citadel Buyout Credit Positive, Says Moody's
-----------------------------------------------------------
Moody's Investors said on March 10, 2011, Cumulus Media Inc.
(Caa1, on review for upgrade) announced it entered into a
definitive agreement to acquire Citadel Broadcasting Corporation
(Ba2, stable) in a $2.4 billion deal that would create the second-
largest radio group in the U.S., with approximately 572 stations,
after Clear Channel Communications (Caa2, stable), with over 800
stations. Under the proposed transaction, shareholders of Citadel
Broadcasting Corporation would receive cash or stock. The
transaction would also include the refinancing of funded debt of
Cumulus (approximately $600 million), CMP Susquehanna Corp.
(approximately $690 million) as well as Citadel (approximately
$780 million).
In Moody's view, the acquisition is credit positive for Cumulus,
initially reducing its leverage with an equity injection of
$500 million less related transaction fees. The acquisition would
also be credit positive for CMP Susquehanna Corp. as leverage
would be reduced when it is folded under the Cumulus umbrella.
"Moody's placed ratings of Cumulus and CMP Susquehanna Corp. on
review for potential upgrade in mid-February, and the review will
consider recent improvements in the performance of the stations
due to greater advertising demand, Moody's outlook for radio
broadcasting, the potential for meaningful cost savings, as well
as final terms of the Citadel acquisition in combination with the
acquisition of the remaining 75% interest in CMP Susquehanna Corp.
that Cumulus does not already own (announced on January 31,
2010)," stated Carl Salas, Vice President at Moody's Investors
Service. As the review will incorporate each of the transactions,
it is not expected to be concluded until after FCC approval is
obtained.
The radio broadcasting industry is mature and faces competition
with internet services such as Pandora and Mog, hand held devices,
and satellite radio. Radio broadcasters have been looking for
growth through acquisitions. Recently announced transactions
include Cumulus increasing its ownership in CMP Susquehanna Corp.;
Radio One Inc. increasing its ownership in TV One, a cable TV
network; Hubbard Broadcasting Inc. expanding into radio from TV
with the purchase of radio stations from Bonneville International.
DBSI INC: Individual Defendants Escape Wavetronix Litigation
------------------------------------------------------------
WestLaw reports that the adversary complaint of the trustees for
litigation and liquidating trusts created under a confirmed
Chapter 11 plan failed to adequately plead claims to avoid and
recover alleged actual and constructive fraudulent transfers to
two individual owners of a technology company in which the debtor
had invested and one owner's wife, who was on the company's board.
The complaint failed to identify any transfers that were made to
or for the benefit of these defendants. In re DBSI, Inc., ---
B.R. ----, 2011 WL 781487 (Bankr. D. Del.).
A copy of the Honorable Peter J. Walsh's Memorandum Opinion in
Zazzali, et al. v. Wavetronix LLC, et al., Adv. Pro. No. 10-55963
(Bankr. D. Del.), is available at http://is.gd/LtDPVVat no
charge.
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. Lead 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. Mr. Zazzali and Conrad Myers were appointed as the
post-confirmation trustees. Messrs. Zazzali and Myers are
represented by lawyers at Blank Rime LLP and Gibbons P.C.
DEEP DOWN: Inks Management Services Agreement with CFT
------------------------------------------------------
On Dec. 31, 2010, Deep Down, Inc., and Cuming Flotation
Technologies, LLC, entered into a Management Services Agreement,
to be effective as of Jan. 1, 2011, pursuant to which Deep Down
will provide CFT with the services of certain of its officers and
management personnel.
On March 3, 2011, Deep Down entered into Amendment No. 1 to the
Management Services Agreement, dated effective as of March 1,
2011. The key purposes of entering into the First Amendment are
to (i) alter the minimum monthly fee to be paid to Deep Down by
CFT due partly to a change in the staffing levels for services and
personnel provided by Deep Down to CFT, (ii) modify the procedures
for requesting and agreeing on additional services, and (iii)
amend the invoicing and payment procedures for those services.
A full-text copy of the First Amendment to Management Services
Agreement is available for free at:
http://ResearchArchives.com/t/s?74df
About Deep Down
Houston, Tex.-based Deep Down, Inc. --
http://www.deepdowncorp.com/-- is an oilfield services company
specializing in complex deepwater and ultra-deepwater oil
production distribution system support services, serving the
worldwide offshore exploration and production industry.
The Company's balance sheet at Sept. 30, 2010, showed
$49.3 million in total assets, $16.8 million in total liabilities,
and stockholders' equity of $32.5 million.
"The Whitney National Bank Amended and Restated Credit Agreement
becomes due on April 15, 2011, and we will need to raise
additional debt or equity capital or renegotiate the existing debt
prior to the expiration date," the Company said in its Form 10-Q
for the quarter ended Sept. 30, 2010. "If we are unable to raise
additional capital or renegotiate our existing debt, this would
have a material adverse impact on our business or would raise
substantial doubt about our ability to continue as a going
concern."
DEL MONTE: Moody's Assigns 'B1' Corporate Family Rating
-------------------------------------------------------
Moody's Investors Service has assigned a definitive Corporate
Family Rating of B1 to Del Monte Foods Company, the parent company
of Del Monte Corporation, following the closing of the previously
announced leveraged buyout of Del Monte by an investor group led
by Kohlberg Kravis Roberts & Co. L.P. that also includes Vestar
Capital Partners and Centerview Capital, L.P. Moody's also
assigned a Ba3 rating to a new $2.7 billion senior secured term
loan and a B3 rating to $1.3 billion in new senior unsecured
notes, both issued to fund the transaction. Finally, Moody's
assigned a Speculative Grade Liquidity rating of SGL-2 to Del
Monte Foods. The rating outlook is stable.
In connection with the LBO transaction, substantially all of the
preexisting rated debt at Del Monte Corporation (operating
company) totaling $1.27 billion was retired using the proceeds
from new debt issued by Del Monte Foods Company (holding company).
Holders of approximately $10.5 million of Del Monte Corporation
senior subordinated notes did not tender by the March 8th deadline
under the previously announced $700 million tender offer.
However, Moody's expect these remaining operating company notes to
be retired in the near-term. As such, Moody's will withdraw all
the outstanding ratings of Del Monte Corporation. This concludes
the rating review of Del Monte Corporation that began on Nov. 26,
2010 when the LBO transaction was announced.
Rating Rationale
The B1 Corporate Family Rating of Del Monte Foods reflects the
high financial leverage resulting from the LBO of the company
balanced against anticipated stable operating-level performance at
Del Monte Corporation, along with improving product mix and
operating margins over time. The SGL-2 Speculative Grade
Liquidity rating reflects strong internal cash flow and external
liquidity, abundant covenant cushion under the "covenant-lite"
senior secured bank facility, and the mostly-encumbered asset
base.
Prior to the LBO transaction, Del Monte's credit metrics had been
trending positively in recent years-debt-to-EBITDA had fallen
below three times compared to over five times a few years ago-
especially following the Starkist canned tuna sale in 2009 that
accelerated the company's strategy of shifting sales mix away from
consumer foods and toward the higher margin pet food business.
Moody's estimates proforma debt-to-EBITDA at 6.7 times currently,
declining to below 6 times by the end of fiscal 2012.
"We expect Del Monte's core operating performance to remain stable
in the intermediate term with the expanding pet food business
being the key driver of margin expansion and earnings growth,"
commented Moody's senior credit officer, Brian Weddington.
"Barring a major leveraged acquisition, earnings growth should
provide for steady reduction in leverage over time," added
Weddington.
The LBO transaction, valued at $5.3 billion enterprise value, was
financed with a $1.6 billion equity investment from the private
equity sponsors and $4.75 billion of new debt instruments issued
by Del Monte Foods Company ($4.0 billion outstanding at closing)
consisting of a $750 million five-year asset-backed revolving loan
facility (not rated by Moody's), a new $2.7 billion seven-year
senior secured term loan, and $1.3 billion of eight-year senior
unsecured notes. The company issued $200 million more secured
debt than originally contemplated and reduced the unsecured notes
by the same amount to accommodate strong investor demand for the
floating-rate term loan. The shift did not affect the security
ratings.
Ratings assigned:
Del Monte Foods Company:
-- Corporate Family Rating at B1;
-- Probability of Default Rating at B1;
-- $2.7 billion senior secured term loan due March 8, 2018 at
Ba3 (LGD3) LGD rate at 32%;
-- $1.3 billion of senior unsecured notes due February 15, 2019
at B3 (LGD5), LGD rate at 85%;
-- Speculative Grade Liquidity rating at SGL-2.
The senior secured term loan is secured by a first priority lien
on substantially all the assets of Del Monte Foods Company (other
than ABL collateral) and each guarantor, and a second priority
lien on the ABL collateral. The Del Monte Foods Company debt is
guaranteed by all direct and indirect subsidiaries, including Del
Monte Corporation.
The debt instrument ratings reflect both the overall probability
of default (as reflected in the B1 PDR) and an average mean family
loss given default assessment of 50% (or a mean family recovery
estimate of 50%), in line with Moody's LGD Methodology.
Ratings withdrawn:
Del Monte Corporation:
-- Corporate Family Rating of Ba2;
-- Probability of Default Rating of Ba2;
-- Senior secured bank credit facility of Baa3 (LGD2), LGD rate
of 20%;
-- Senior subordinated notes of Ba3 (LGD5), LGD rate of 74%;
-- Speculative Grade Liquidity rating of SGL-2.
Moody's believes that leverage and event risk likely will remain
high at Del Monte Foods while under the control of private equity
sponsors. For this reason, the possibility of a ratings upgrade
in the foreseeable future is limited. However, the ratings could
be considered for an upgrade if the company maintains stable
operating performance, and is able to sustain Debt to EBITDA below
5.0 times and Retained Cash Flow to Net Debt above 11%.
A ratings downgrade could be caused by deterioration in operating
performance, a major acquisition or unfavorable change in capital
structure. Quantitatively, downward ratings pressure would build
if Debt to EBITDA exceeded 7.0 times, or Retained Cash Flow to Net
Debt fell below 10%.
The most recent rating action on Del Monte Foods Company was on
January 25, 2011, when Moody's assigned provisional ratings to the
corporate family and to the company's proposed $4 billion debt
offering to fund the $5.3 billion LBO transaction announced on
November 25, 2010. The most recent rating action on Del Monte
Corporation was on November 26, 2010 when Moody's placed its
ratings on review for possible downgrade following the company's
announcement that it had agreed to sell itself to an investor
group led by KKR for a total of $5.3 billion.
Headquartered in San Francisco, California, Del Monte Corporation
is one of the largest producers, distributors and marketers of
premium quality branded food and pet products for the U.S. retail
market. Revenues for the last twelve months ended October 31,
2010 were approximately $3.7 billion.
DIABETES AMERICA: Taps Looper Reed as Bankruptcy Counsel
--------------------------------------------------------
Diabetes America Inc. asks the U.S. Bankruptcy Court for the
Southern District of Texas for permission to employ Looper Reed &
McGraw P.C. as its attorneys.
Among other things, the firm will:
a) provide the Debtor legal advice with respect to its duties
and powers in the bankruptcy case;
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 plan or plans of reorganization;
c) assist the Debtor in the preparation and filing of its
schedules and statement of financial affairs and any other
pleadings or documents necessary to be filed, included, but
not limited, to a cash collateral motion, postpetition
financing motion, and cash management motion, if necessary;
d) assist the Debtor evaluate the necessity of, and negotiate
with counterparties to, executory contracts and real
property leases; and
e) assist the Debtor enforce the automatic stay against
creditors, landlords, and third parties.
The Debtor says it agrees to pay the firm's professionals at their
hourly rate for services provided.
The Debtor assures the Court that the firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
About Diabetes America
Houston, Texas-based Diabetes America, Inc., fka Diabetes Centers
of America, Inc., operates a network of 17 centrally-managed
medical clinics that provide comprehensive outpatient medical
care, primarily to patients with Type 1, Type 2 and Gestational
Diabetes. The company's clinics are located in Texas and Houston
and generate 51,000 patient visits per year.
Diabetes America filed for Chapter 11 bankruptcy protection
(Bankr. S.D. Tex. Case No. 10-41521) on Dec. 21, 2010. The Debtor
estimated its assets and debts at $10 million to $50 million as of
the Petition Date.
Judy A. Robbins, the U.S. Trustee for Region 7, formed a three-
member Official Committee of Unsecured Creditors in Diabetes
America's Chapter 11 case. Butler, Snow, O'Mara, Stevens &
Cannada, PLLC, represents the Committee.
DIABETES AMERICA: Gets Court's Final OK to Use Cash Collateral
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas
authorized, on a final basis, Diabetes America, Inc., to use the
cash collateral of MetroBank, N.A., and the other secured
creditors.
According to the Troubled Company Reporter on Dec. 30, 2010,
pursuant to the terms of a Promissory Note dated Sept. 7, 2007, as
may have been extended and amended, Debtor obtained a loan in the
original principal amount of $600,000 from MetroBank. The
approximate indebtedness owing to MetroBank by Debtor, as of the
Petition Date, was $556,112.
In addition to the asserted secured claim by MetroBank, these
parties have filed UCC financing statements that may arguably
create a lien on Debtor's inventory and accounts receivable:
Alleged Creditor Alleged Claim Amount
---------------- --------------------
Denly ACI Partners, Ltd. $93,500
Dennis C. Von Waaden and Sally A. Von
Waaden, Co-Trustees of the Von Waaden
2004 Revocable Trust $450,000
Afton Capital, Inc. $90,000
Apelles Investment Management, LLC $4,900,000
Frank and Dina Basile $150,000
Baytree Leasing Company, LLC Unknown
Bonita Lue Groesser $50,000
Kimon J. Angelides Unknown
KB Centre, Ltd. Unknown
Venue at Hometown, Ltd. Unknown
H. Joseph Acosta, Esq., Looper Reed & Mcgraw, P.C., explained that
the Debtor needs to access cash collateral to fund its Chapter 11
case, and pay suppliers and other parties.
In exchange for using the cash collateral, the Debtor will grant
MetroBank and the other secured creditors a replacement lien on
the Debtor's postpetition accounts receivable and proceeds of
collection of the Debtor's accounts receivable, to the extent the
use of any creditors' cash collateral results in a decrease in the
value of each creditors interests in the property upon which the
creditor holds a validly perfected and unavoidable lien on
property of the Debtor's bankruptcy estate.
The Court has set a further interim hearing for Jan. 6, 2011, at
3:00 p.m. on the Debtor's request to use cash collateral.
About Diabetes America
Houston, Texas-based Diabetes America, Inc., fka Diabetes Centers
of America, Inc., operates a network of 17 centrally-managed
medical clinics that provide comprehensive outpatient medical
care, primarily to patients with Type 1, Type 2 and Gestational
Diabetes. The company's clinics are located in Texas and Houston
and generate 51,000 patient visits per year.
Diabetes America filed for Chapter 11 bankruptcy protection
(Bankr. S.D. Tex. Case No. 10-41521) on Dec. 21, 2010. H. Joseph
Acosta, Esq., and Micheal W. Bishop, Esq., at Looper Reed & McGraw
P.C., serve as the Debtor's bankruptcy counsel. The Debtor
estimated its assets and debts at $10 million to $50 million as of
the Petition Date.
Judy A. Robbins, the U.S. Trustee for Region 7, formed a three-
member Official Committee of Unsecured Creditors in Diabetes
America's Chapter 11 case. Butler, Snow, O'Mara, Stevens &
Cannada, PLLC, represents the Committee.
DIABETES AMERICA: Committee Taps Butler Snow as Counsel
-------------------------------------------------------
The Official Committee of Unsecured Creditors of Diabetes America
Inc. asks the U.S. Bankruptcy Court for the Southern District of
Texas for permission to retain Butler, Snow, O'Mara, Stevens &
Cannada, PLLC, as its counsel.
Among other things, the firm will:
a) advise the Committee with respect to its rights and
responsibilities under the Bankruptcy Code;
b) assist the Committee in performing its duties under the
Bankruptcy Code;
c) represent the Committee in matters pertaining to Debtor's
use of cash collateral, debtor-in-possession financing and
the liens and claims of secured creditors;
d) identify and prosecute claims, adversary proceedings and
causes of action which may be asserted by the Committee; and
e) assist the Committee in negotiating, drafting and
structuring a plan or plan of reorganization for the Debtor;
The Debtor says James E. Bailey III, Esq., charges $350 per hour
and that partners involved in the case on bankruptcy issues will
charge between $300 and $350 per hour with associates being billed
at between $225 and $275 per hour and paralegals being billed at
between $90 and $110 per hour. Further, to the extent that
attorneys in the firm who have particular healthcare
experience are utilized, those attorneys' rates range
from $350 to $450 per hour.
The firm will bill the Debtor's estate based on the hourly rates
of its professionals:
Designations Hourly Rates
------------ ------------
Attorneys $150-$450
Paralegals $85-$150
The Debtor assures the Court that the firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
Houston, Texas-based Diabetes America, Inc., fka Diabetes Centers
of America, Inc., operates a network of 17 centrally-managed
medical clinics that provide comprehensive outpatient medical
care, primarily to patients with Type 1, Type 2 and Gestational
Diabetes. The company's clinics are located in Texas and Houston
and generate 51,000 patient visits per year.
Diabetes America filed for Chapter 11 bankruptcy protection
(Bankr. S.D. Tex. Case No. 10-41521) on Dec. 21, 2010. H. Joseph
Acosta, Esq., and Micheal W. Bishop, Esq., at Looper Reed & McGraw
P.C., serve as the Debtor's bankruptcy counsel. The Debtor
estimated its assets and debts at $10 million to $50 million as of
the Petition Date.
DJSP ENTERPRISES: To Voluntarily Delist Securities From NASDAQ
--------------------------------------------------------------
DJSP Enterprises, Inc., announced that it has submitted written
notice to The NASDAQ Stock Market LLC of its intent to voluntarily
delist its ordinary shares, warrants, and units from the NASDAQ
Global Market and deregister its ordinary shares, warrants, and
units under the Securities Exchange Act of 1934, as amended.
The Company currently anticipates that, on or about March 18,
2011, but no earlier than March 18, 2011, the Company will file
with the Securities and Exchange Commission and NASDAQ a Form 25
relating to the delisting and deregistration of its ordinary
shares, warrants, and units. The Company expects that trading in
the Company's ordinary shares, warrants, and units will be
suspended on the date the Form 25 is filed, with the official
delisting of the Company's ordinary shares, warrants, and units
becoming effective ten days thereafter. Accordingly, the Company
anticipates that trading of its ordinary shares, warrants, and
units on NASDAQ will be suspended on or about March 18, 2011 and
that its ordinary shares, warrants, and units will be delisted
from NASDAQ on or about March 28, 2011, and on or about that date
the Company will file with the SEC a Form 15, Notice of
Termination and Suspension of Duty to File, to terminate its
reporting obligations under the Exchange Act. When the Form 15
has been filed, the Company's obligations to file certain reports
with the SEC, including Forms 10-K, 10-Q and 8-K, will immediately
be suspended. The Company expects that the deregistration of its
ordinary shares, warrants, and units will become effective 90 days
after the date the Form 15 is filed with the SEC. The Company is
eligible to deregister its ordinary shares, warrants, and units
because it has fewer than 300 shareholders of record. The
deregistration of the Company's ordinary shares, warrants, and
units is subject to the SEC's approval of its post-effective
amendment terminating the Company's Registration Statement on Form
F-1, and no SEC objection to the Company's filed Form 15.
Following the delisting and deregistration of the Company's
ordinary shares, warrants, and units, it is expected that trading
of the Company's ordinary shares, warrants, and units by
continuing shareholders may be effected through privately
negotiated transactions or, if the Company qualifies, through
quotations on the Pink OTC Market (a centralized quotation service
that collects and publishes market maker quotes for securities).
This will require at least one market maker to quote the Company's
ordinary shares, warrants, and units on the Pink OTC Market, after
the market maker complies with certain filing and disclosure rules
or by complying with the unsolicited customer order rule. There
is no assurance that either the Company or a market maker will
comply with those rules. More information about the Pink OTC
Market can be obtained from its Web site at
http://www.otcmarkets.com/otc-pink/home
The Company's Board of Directors authorized the delisting and
deregistration of the Company's ordinary shares, warrants, and
units after concluding that the consequences of remaining an SEC-
reporting company, including the significant costs associated with
regulatory compliance, outweighed the current benefits of public
company status to the Company and its shareholders. Among the
factors considered were the costs, both direct and indirect,
incurred by the Company each year in connection with the
preparation and filing of periodic reports and forms with the SEC.
As previously reported, the Company has received letters from
NASDAQ notifying it that deficiencies exist with regard to
continued listing pursuant to the following NASDAQ Listing Rules:
(a) Rule 5450(b)(2)(C), because the Company's publicly held
securities failed to maintain a minimum market value of
$15,000,000; (b) Rule 5450(b)(2)(A), because the Company's listed
securities failed to maintain a minimum market value of
$50,000,000; and (c) Rule 5450(a)(1), because the Company's listed
securities failed to maintain a minimum bid price of $1 per share.
The Company was given a cure period to regain compliance with each
of these Listing Rules, the earliest of which is May 23, 2011.
The Company does not believe that it will be able to regain
compliance with the Listing Rules by this date.
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.
DJSP ENTERPRISES: Deregisters Unsold Securities
-----------------------------------------------
DJSP Enterprises, Inc., filed with the U.S. Securities and
Exchange Commission a Post-Effective Amendment No. 1 to Form F-1
on Form S-1 relating to the Registration Statement on Form F-1.
The Company filed the Registration Statement covering the
following:
* 2,291,666 Ordinary Shares underlying units issued to
shareholders of the Company prior to its initial public
offering.
* 8,266,667 Ordinary Shares issuable upon conversion of
common units of DAL Group, LLC, issued in connection with
the Company's acquisition of a controlling interest in DAL
Group, LLC.
* 1,500,000 Ordinary Shares issued in a private placement to
certain accredited investors in connection with the
consummation of a transaction.
* 2,291,666 Warrants to Purchase Ordinary Shares underlying
units issued to shareholders of the Company prior to its
initial public offering.
* 2,291,666 Ordinary Shares underlying warrants, underlying
units issued to shareholders of the Company prior to its
initial public offering.
* 2,000,000 Warrants to Purchase Ordinary Shares issued to
the founding shareholders of the Company prior to its
initial public offering.
* 2,000,000 Ordinary Shares underlying warrants issued to the
founding shareholders of the Company prior to its initial
public offering.
* 233,010 Ordinary Shares which may be issued to certain of
the holders of the 2,000,000 warrants issued in a private
placement in connection with their agreement to exercise or
sell those warrants.
The offering of shares pursuant to this Registration Statement is
terminated. As a result, in accordance with the undertaking made
by the Company in the Registration Statement to remove from
registration by means of a post-effective amendment any of the
securities that remain unsold at the termination of the offering
of shares pursuant to this Registration Statement, the Company is
filing this Post-Effective Amendment No. 1 to deregister all of
the Registered Securities registered under the Registration
Statement that remain unsold as of March 4, 2011.
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.
DJSP ENTERPRISES: Deregisters $1.57MM Incentive Plan Offering
-------------------------------------------------------------
DJSP Enterprises, Inc., has filed Registration Statement No. 333-
167948 covering 1,570,000 of its ordinary shares for issuance
under its 2009 Equity Incentive Plan. The offering of shares
pursuant to this Registration Statement is terminated. The
Company is terminating the Registration Statement and
deregistering the remaining Registered Shares registered but
unsold under the Registration Statement, in accordance with an
undertaking made by the Company in Part II of the Registration
Statement to remove from registration, by means of a post-
effective amendment, any of the Registered Shares that had been
registered for issuance that remain unsold at the termination of
the offering of shares pursuant to this Registration Statement.
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.
DOLLAR THRIFTY: DBRS B (High) Issuer Rating Unmoved by Net Income
-----------------------------------------------------------------
DBRS Inc. (DBRS) has commented that the ratings of Dollar Thrifty
Automotive Group, Inc. (DTAG or the Company), including its Issuer
Rating of B (high) are unaffected following the Company's
announcement of $12.5 million of net income, on a U.S. GAAP basis,
in 4Q10 and $131.2 million for full year 2010. The trend on all
ratings remains Stable.
DBRS views DTAG's results as demonstrating solid operating
performance given the tepid economic recovery and modest increase
in leisure travel volumes. On an underlying basis, DTAG reported
corporate adjusted EBITDA, excluding merger-related expenses, of
$258.3 million for the full year, up an impressive 160% over 2009,
and the best year in the Company's history. For 4Q10, the Company
reported corporate adjusted EBITDA of $30.2 million, a 15%
increase over the comparable period a year ago, and the eighth
consecutive quarter of year-on-year double digit growth. Results
benefited from the solid revenue generation ability of the
franchise and lower direct vehicle and operating expenses.
Further, the improving industry fundamentals, which include
recovering rental demand and volumes, solid pricing and improved
market-wide access to funding, are benefiting results.
For the quarter, total vehicle rental revenue increased to
$335 million on a 2.8% improvement in transaction days. In 4Q10,
revenue per day (RPD) declined modestly year-on-year to $46.67,
reflecting a slightly more competitive marketplace. DBRS expects
continuing solid financial performance into 2011 as rental demand
improves driven by the slowly recovering economy.
Results benefited from the continuing management focus on cost
control efforts. Despite a higher revenue base, direct vehicle
and operating expenses declined 6% to $168 million on favorable
vehicle insurance expense and lower maintenance costs due to the
reduced age of the fleet. DTAG continues to demonstrate solid
fleet management. Despite the average fleet increasing 1.6% in
the quarter, fleet utilization increased 90 basis points. Vehicle
depreciation per unit for 4Q10 totaled $308 per month, 12.4%
higher than a year ago, owed to lower gains on sale of risk
vehicles and the refreshment of the fleet undertaken in 2010.
Gains declined by $16.3 million due to the disposition of
approximately 11,000 fewer vehicles, as the Company chose to slow
the sale of vehicles in the seasonally weak quarter for used
vehicle values. As the used vehicle market normalizes, DBRS
foresees vehicle depreciation costs and gains on sale of risk
vehicles as returning to historical levels; however, given the
sound fleet management acumen of DTAG, DBRS sees the Company as
well-placed to manage this risk.
The Company continues to have solid access to the capital markets.
In 2010, DTAG completed $950 million of new fleet financings in
the U.S., while reducing the overall debt stack by more than
$300 million. At quarter end, the Company had over $1.0 billion
of available liquidity to address near-term maturities. To this
end, in December 2010, DTAG began amortizing a $600 million medium
term note, which DBRS views as manageable.
DOUGLAS DYNAMICS: Moody's Upgrades Corporate Family Rating to 'B1'
------------------------------------------------------------------
Moody's Investors Service upgraded Douglas Dynamics, Inc.'s
Corporate Family Rating to B1 from B2, and assigned a B1 rating to
the proposed $125 million senior secured term loan facility.
Douglas intends to refinance its existing bank debt with a new
unrated $70 million asset-based senior secured revolving credit
facility and a $125 million senior secured term loan. This
transaction will improve the company's debt maturity profile and
liquidity on a pro forma basis. The ratings on the existing bank
loans will be withdrawn upon completion of the company's
refinancing transaction. The rating outlook is stable.
This summarizes the rating actions:
Ratings upgraded:
-- Corporate Family Rating to B1 from B2
-- Probability of Default Rating to B1 from B2
-- $85 million term loan due 2013 to B1 (LGD 3; 49%) from B2
(LGD 3; 49%) *
-- $40 million term loan due 2016 to B1 (LGD 3; 49%) from B2
(LGD 3; 49%) *
* to be withdrawn after completion of refinancing transaction.
Ratings assigned:
-- Proposed $125 million term loan due 2018 B1 (LGD 3; 48%)
-- Rating outlook changed to stable from positive.
Ratings Rationale
The upgrade to B1 CFR reflects the company's strong market
position in snow and ice control equipment, extensive distribution
network, variable cost structure, demonstrated ability to generate
free cash flow through business cycles, and improvement in credit
metrics. The B1 CFR also acknowledges multi-quarter track record
as a public company, and recent winter weather that Moody's
expects will be supportive of equipment sales over the next year.
The CFR is principally constrained by small scale (less than
$200 million of revenue), moderate debt leverage (approx. 3.6x
debt-to-EBITDA LTM 9/30/10), and shareholder-friendly financial
philosophy that includes a stated dividend policy.
Moody's expects liquidity to remain adequate to support operations
over the near-term. Pro forma for the transaction, Moody's expect
the company will have at least about $10 million of balance sheet
cash and likely will generate positive free cash flow on an annual
basis. The seasonality of the business model is such that the
company historically consumes cash in the second and third
quarters to fund production and distribution of equipment for the
upcoming winter snow season. Moody's expects Douglas will rely on
its new $70 million asset-based revolving credit facility to
manage these working capital requirements. Moody's expect the
revolver will have a springing fixed charge coverage ratio test,
but Moody's do not expect availability to fall below the threshold
required to activate the financial maintenance covenant. If
Douglas does not complete the proposed transaction, liquidity
could be somewhat pressured given the scheduled maturity of
existing undrawn $60 million asset-based revolving credit facility
in 2012 and roughly $85 million of the company's term loan in
2013.
The stable rating outlook incorporates expectations that Douglas
will complete its refinance transaction at economical terms, debt
leverage will remain below 4.0x, the company will continue to
generate positive free cash flow. Small scale and an aggressive
financial philosophy limit upward rating momentum. Moody's could
take a negative action if leverage is expected to exceed 4.0x on a
sustained basis, if free cash flow turns negative, if the company
does not maintain an adequate liquidity position, or if the
company fails to effect a timely extension of its debt maturities.
Douglas Dynamics is the North American leader in the design,
manufacture, sale and support of snow and ice control equipment
through its Western, Fisher, and Blizzard brands. In 2010, the
company is expected to have generated over $175 million of
revenues.
DOUGLAS DYNAMICS: S&P Affirms 'BB-' Corporate Credit Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services said that it affirmed its
'BB-' corporate credit rating on Douglas Dynamics Inc. At the
same time, S&P assigned its 'BB' issue-level rating to Douglas
Dynamics LLC's (a wholly owned subsidiary of Douglas) proposed new
$125 million senior secured term loan due 2018. The recovery
rating is '2' indicating S&P's expectations for a substantial
recovery (70% to 90%) in the event of a payment default. The
outlook is stable.
"The ratings on Milwaukee, Wisc.-based snow- and ice-control
products maker Douglas Dynamics Inc. reflect S&P's expectation
that the company's track record of good profitability and
consistent free cash flow generation should enable it to maintain
a financial leverage of less than 4x adjusted debt to EBITDA,
and to support its significant dividend payout, despite its high
exposure to unpredictable weather patterns," said Standard &
Poor's credit analyst Gregoire Buet. "S&P views Douglas' business
risk profile as weak and its financial profile as aggressive."
The company sells its snow and ice control products mainly in the
U.S., but also to a modest extent in Canada and through export
sales, resulting in limited geographic diversity. Demand for its
products depends significantly on snowfall, which creates a
significant demand risk beyond the company's control. Demand
depends somewhat on light-truck sales and the health of the
overall economy, which affect customers' spending decisions on new
equipment and replacement parts. The company's leading position
in a niche market, its limited customer concentration, and its
good technical capabilities temper these risks. Although Douglas
is exposed to volatile input costs for key raw materials such as
steel, strong brands (including Western and Fisher), as well as
good market share, have enabled it to offset higher raw material
costs and achieve relatively high operating margins before
depreciation and amortization. Its completion of a factory
closure could result in additional cost savings. The company's
limited capital spending requirements have historically translated
into positive free operating cash flow generation, even during
below-average snowfall seasons.
The outlook is stable. While S&P expects the company's credit
measures to be volatile due to seasonal weather patterns, S&P
believes the company will maintain adjusted financial leverage at,
or below, 4x total debt to EBITDA. For the ratings, S&P also
expects Douglas to generate more than $10 million of annual free
cash flow. If unfavorable weather conditions curtail demand for
the company's products for a prolonged period, or if manufacturing
inefficiencies pressure operating margins below 20%, this would
likely hamper free cash flow generation and credit protection
measures, leading us to possibly lower the ratings. S&P is
unlikely to raise the ratings in the foreseeable future, since S&P
views the company's weak business profile as a limitation.
DRESSER-RAND GROUP: Moody's Assigns 'B1' Rating to $375 Mil. Notes
------------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Dresser-Rand
Group, Inc.'s proposed $375 million subordinated notes. Moody's
also affirmed DRC's Ba3 Corporate Family Rating and SGL-2
Speculative Grade Liquidity Rating. DRC has announced a tender
offer for the existing $370 million subordinated notes and Moody's
will withdraw its B1 rating upon completion of the tender. DRC
has announced it intends to replace its senior secured revolving
credit facility and Moody's will withdraw its Ba1 rating upon
completion of that process, The rating outlook is positive.
"DRC's proposed acquisition of Grupo Guascor S.L., for
EUR500 million ($690 million) helps to strengthen an already
strong business profile," said Francis J. Messina, Moody's Vice-
President. "While DRC will initially pay the sellers $283 million
of cash and 5.0 million shares of stock, DRC will commence a share
repurchase program to repurchase 5.0 million shares of currently
issued stock."
Ratings Rationale
DRC's Ba3 CFR reflects the company's strong market share and
technological expertise, dependable aftermarket business,
and a relatively strong financial profile. The company has
long-standing relationships with its client base due to its
distinctively engineered and difficult to duplicate equipment
tailored to its customers, which has resulted in the largest
installed base in its industry. As a result of the size and
tailored engineered base, DRC's ratings benefit from its strong
aftermarket service segment, which is less cycle sensitive and
generated 51% of 2010's revenues? The company's 2010 bookings
and backlog have grown to $2,236 million and $1,965 million,
increasing 35% and 15%, respectively, from the previous year.
In a strategy to increase its served market and technological
and service offerings, DRC announced the proposed acquisition
of Grupo Guascor for approximately $690 million. Additionally,
DRC has announced it will repurchase shares with the intention
of optimizing use of financial leverage to return value to
stockholders. The company will use over $300 million of its
cash and proceeds from a new $330 million term loan to repurchase
up to $379 million of shares. With the new secured term loan,
cash on hand, and secured revolver, Dresser-Rand will have enough
resources to finance its capital expenditures and research and
development budget for 2011 through 2013. With approximately
$2 billion in revenues, strong earnings growth relative to its
peers, and a previously under-leveraged balance sheet, Moody's
does not expect the transaction to negatively impact ratings.
The positive outlook reflects: (i) DRC's strong liquidity and
cash generating ability; (ii) continued ability to generate a
relatively strong base of earnings during the downcycle; and,
(iii) strong market demand for the company's products and
services. DRC's ratings could be upgraded if debt/EBITDA is
estimated to remain less then 3x and RCF/debt is greater than
20%.
The rating outlook could be move back to stable if returns and
cash flow generation measures are less than anticipated. DRC's
ratings could come under pressure if: (1) its earnings and returns
were to weaken substantially; (2) a material increase to financial
leverage; or (3) a material decline in liquidity.
The SGL-2 rating is based on Moody's expectation that DRC will
have good liquidity over the next twelve months. At December 31,
2010, DRC had $420.8 million in cash and $329.3 million of
availability under its $500 million revolving credit facility,
maturing August 30, 2012. The company is in the process of
upsizing its revolving credit facility to $600 million and
extending its maturity to 2016. Moody's expect revolver covenants
to be similar to its current facility, where the company has ample
coverage to its leverage and interest coverage covenants.
Historically, capital expenditures have been less than 2% of its
sales.
The B1 rating on the $375 million senior subordinated notes
reflects both DRC's overall probability of default, to which
Moody's assigns a PDR of Ba3, and a loss given default of LGD 5,
84%. The senior subordinated notes are notched one rating
category lower than the Ba3 CFR. The notching reflects the
priority of claim that the senior secured revolving credit
facility and its senior secured term loan would be entitled to in
a liquidation or bankruptcy.
The last rating action on DRC was March 24, 2010, at which time
Moody's changed DRC's outlook to positive from stable and affirmed
its ratings.
Dresser-Rand Group Inc. is headquartered in Houston, Texas.
DRESSER-RAND GROUP: S&P Downgrades Rating to Senior Debt to 'BB+'
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its senior
secured debt rating on Houston-based Dresser-Rand Group Inc. to
'BB+' (one notch higher than the corporate credit rating) from
'BBB-' and revised the recovery rating on these issues to '2',
indicating S&P's expectation of substantial (70% to 90%) recovery
in the event of a payment default, from '1'.
At the same time S&P lowered the subordinated debt rating to 'B+'
(two notches lower than the corporate credit rating) from 'BB-',
and revised the recovery rating to '6', indicating S&P's
expectation of negligible recovery (0% to 10%) in the event of a
payment default, from '5'.
S&P also assigned a 'B+' rating to Dresser-Rand's proposed
$375 million subordinated notes due 2021, and assigned a '6'
recovery rating to the notes, indicating S&P's expectation of
negligible recovery (0% to 10%) in the event of a payment default.
The rating actions reflect the substantial increase to secured
debt and the resulting lower recovery prospects following Dresser-
Rand's announcement that it plans to enter borrow from a new $330
million first-lien term loan, and at the same time increase its
credit facility by $100 million. Proceeds from the term loan will
be used to help finance the previously announced acquisition of
Grupo Guascor and for share repurchases.
Dresser-Rand plans to use proceeds from the $375 million note
offering to fund the tender for its existing $370 million of
subordinated notes.
Dresser-Rand has announced the acquisition of diesel and gas
engine manufacturer Grupo Guascor S.L. for $690 million,
including the assumption of about $172 million net-debt. At the
same time the company announced it would repurchase approximately
$364 million of common stock, including about $235 million used to
acquire Grupo Guascor (5 million shares at $46.75 per share).
Dresser-Rand also announced it plans to raise about $330 million
of term loan financing to help fund the acquisition and share
repurchases.
The combined transactions will raise adjusted debt leverage to
over 2.5x, and speaks to a more aggressive financial policy than
previously assumed in the rating. However, S&P expects Dresser-
Rand to focus on near-term repayment of the term loan debt through
operating cash flows, reducing adjusted debt leverage to about 2x
by 2012. In addition, Dresser-Rand's business risk profile will
benefit from the additional scale and diversification, both asset
and geographic, provided by the Grupo Guascor acquisition.
The 'BB' rating and stable outlook on Dresser-Rand Group Inc.
reflect the company's exposure to the highly cyclical oil and
gas production and processing industries and lack of scale
relative to larger peers. Partially mitigating these weaknesses
are the company's strong aftermarket component of revenues, free
cash flow generation, and robust credit measures. Pro forma for
the proposed transactions, Dresser-Rand should have about
$1.1 billion of adjusted debt.
Ratings List
Dresser-Rand Group Inc.
Corporate credit rating BB/Stable/--
Ratings Lowered; Recovery Rating Revised
To From
-- ----
Senior secured debt rating BB+ BBB-
Recovery rating 2 1
Subordinated debt rating B+ BB-
Recovery rating 6 5
New Rating
Proposed $375 mil sub nts due 2021 B+
Recovery rating 6
DYNAMIC BUILDERS: Parties Stipulate to Extend Plan Deadlines
------------------------------------------------------------
Dynamic Builders, Inc., filed with the U.S. Bankruptcy Court for
the Central District of California early this month a third
stipulation between the Debtor and Lenders Comerica Bank, City
National Bank, Citizens Business Bank and Bank of America further
extending certain Plan related deadlines under the Plan Term Sheet
agreed to by the Debtor and the Lenders, including:
-- the deadline for the Debtor to file a plan acceptable to the
Lenders and a disclosure statement in connection with the
Plan is extended from Feb. 22, 2011, to March 3, 2011;
-- the deadline for the Debtor to solicit acceptances of a plan
is extended from May 15, 2011, to May 24, 2011.
-- the Disclosure Statement must be approved no later than
April 8, 2011, the Plan must be confirmed no later than
May 25, 2011, and the Effective Date of the Plan must occur
no later than June 9, 2011.
-- As to Bank of America, the Termination Deadline and Sale
Deadline, will be extended from May 9, 2011, and June 6,
2011, respectively, to May 18, 2011, and June 18, 2011,
respectively. The Deadlines as to BofA are defined in the
Order approving the stipulation for order resolving BofA's
claims, including stipulation for an order terminating the
automatic stay of action against the estate's and the
Debtor's interest in the Washington Food Center, as entered
by the Bankruptcy Court on Dec. 30, 2010.
The Debtor informs the Bankruptcy Court that it has provided a
copy of its proposed disclosure statement, which includes all Plan
terms, to the Lenders for review and comments before filing with
the Bankruptcy Court.
In order to allow time for the Lenders to complete their review,
the Debtor asks the Bankruptcy Court to approve the stipulation.
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, represents the Bonins in their Chapter 11 case.
Dynamic Builders 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.
RINGSTAD & SANDERS, LLP
2030 Main Street, 12th Floor
Irvine, CA 92614
Tel: (949) 851-7450
Fax: (949) 851-6926
E-mail: todd@ringstadlaw.com
nanette@ringstadlaw.com
DYNEGY INC: Incurs $164 Million Net Loss in 4th Quarter
-------------------------------------------------------
Dynegy Inc. reported a net loss of $164 million on $451 million of
revenue for the three months ended Dec. 31, 2010, compared with a
net loss of $356 million on $441 million of revenue for the same
period during the prior year.
The Company also reported a net loss of $234 million on
$2.32 billion of revenue for the twelve months ended Dec. 31,
2010, compared with a net loss of $1.26 billion on $2.46 billion
of revenue during the prior year.
As of Dec. 31, 2010, Dynegy's liquidity was $1.8 billion. This
consisted of $397 million in cash on hand and $1.4 billion in
unused availability under the Company's credit facility.
As of March 3, 2011, liquidity was $1.8 billion, which consisted
of $448 million in cash on hand and $1.4 billion in unused
availability under the Company's credit facility. The increase in
cash on hand is primarily related to the expiration of an
agreement and the subsequent release of restricted cash.
A copy of the press release announcing the fourth quarter and full
year 2010 results is available for free at http://is.gd/QM2XO4
About Dynegy Inc.
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.
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.
DYNEGY INC: Going Concern Doubt Cues Fitch's Downgrade to 'CC'
--------------------------------------------------------------
Fitch Ratings has downgraded the ratings on Dynegy Inc. and its
subsidiaries and affiliates following the company's filing of its
2010 10k wherein Dynegy's auditors have raised substantial doubt
as to its ability to continue as a going concern and the company
announced it would likely trip debt covenants in its credit
facilities. Fitch believes a restructuring of Dynegy's capital
structure is now likely consistent with the Issuer Default Ratings
below.
Fitch has taken these rating actions:
Dynegy Inc.
-- Issuer Default Rating downgraded to 'CC' from 'CCC'.
Dynegy Holdings, Inc.
-- IDR downgraded to 'CC' from 'CCC';
-- Secured bank facilities downgraded to 'B/RR1' from 'B+/RR1';
-- Senior unsecured rating downgraded to 'CC/RR4' from
'CCC/RR4'.
Dynegy Capital Trust I
-- Trust preferred rating affirmed at 'C/RR6'.
Sithe Independence Funding Corp.
-- Secured bond rating downgraded to 'B/RR1' from 'B+/RR1'.
The Rating Outlook is Negative.
The underperformance of Dynegy's merchant generation operations
reflects the decline in hedged electricity and fuel commodity
margins and Dynegy reported another large loss in 2010. With the
collapse of two previous acquisition offers, any improvement in
Dynegy's financial profile will be contingent upon an increase in
power prices, shrinkage in the reserve capacity margins and
improvement in electricity demand in the wholesale market where
Dynegy owns and operates its generating plants. Fitch believes
these market factors will improve over time, albeit too slowly for
Dynegy to generate sufficient cash flow for its capital and
operating needs.
Given its poor near term operating prospects, Dynegy's financial
flexibility has become increasingly constrained. Dynegy does own
valuable assets in desirable markets including natural gas fired
generation assets in California that previously were under
contract of sale for $1.4 billion as part of an earlier
acquisition of Dynegy by the Blackstone Group, although Dynegy
would not likely realize such value in the environment.
The 'RR1' rating for Dynegy Holdings secured credit facility and
priority notes reflects Fitch's estimate of superior recovery for
secured creditors in the 90% to 100% of the par value of their
claims in the event of a bankruptcy. Senior unsecured creditors
are likely to receive average recovery in the 30% to 50% range.
Trust preferred securities have poor recovery prospects.
Fitch has also downgraded the ratings of Sithe/Independence
Funding Corporation's secured bonds. Fitch continues to view the
project as a distinct entity, separate from the project's owner.
However, in light of the Dynegy companies' dual role as owner and
off taker as well as their current credit ratings, Fitch views the
project's credit profile as being closely analogous to a
separately secured financing of Dynegy and has notched its ratings
as such.
E-DEBIT GLOBAL: Inks Pact for 10% Equity Purchase of Ebackup
------------------------------------------------------------
E-Debit Global Corporation is pleased to announce that it has
agreed to purchase a 10% interest in ebackup Inc. of Calgary
Alberta in an off market trade in a cash or share exchange
authorized by the Board of Directors on Feb. 25, 2011.
Overview
"The agreement solidifies the Company's commitment our "end-to-
end" payment delivery and processing solution. ebackup Inc.
currently supplies the Company's PCI compliant data centre,
technical support and data protection services," notes E-Debit
Chief Executive Doug Mac Donald. "This deal gives us a stake in
the infrastructure and marketing that we need to propel our
solutions in the future".
"ebackup is committed to supporting the growth of E-Debit and is
investing funds to further develop back-end infrastructure and to
bring new products and services to E-Debit direct clients and its
Coast to Coast network of distributors", Rowland Perkins, ebackup
President & CEO stated. "We are excited to have E-Debit as an
equity partner."
The equity deal is a combination of shares and warrants at current
market prices.
About E-Debit Global Corporation
E-Debit Global Corporation (WSHE) is a financial holding company
in Canada at the forefront of debit, credit and online computer
banking. Currently, the Company has established a strong presence
in the privately owned Canadian banking sector including Automated
Banking Machines (ABM), Point of Sale Machines (POS), Online
Computer Banking (OCB) and E-Commerce Transaction security and
payment. E-Debit maintains and services a national ABM network
across Canada and is a full participating member of the Canadian
INTERAC Banking System.
The Company's balance sheet at Sept. 30, 2010, showed
US$1.79 million in total assets, US$1.96 million in total
liabilities, and a stockholders' deficit of US$165,000. As of
Sept. 30, 2010, the Company had a working capital deficit of
US$770,000 and an accumulated deficit of US$4.08 million.
Cordovano and Honeck LLP, in Englewood, Colorado, expressed
substantial doubt about E-Debit Global Corporation's ability to
continue as a going concern, following the Company's 2009 results.
The independent auditors noted that the Company has suffered
recurring losses, has a working capital deficit, and has an
accumulated deficit of US$760,509 as of Dec. 31, 2009.
EASTMAN KODAK: Moody's Assigns 'B1' Rating to $200 Mil. Debt
------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to the proposed
$200 million senior secured debt offering by Eastman Kodak
Company. The outlook remains negative.
Ratings Rationale
The company plans to use the proceeds of the note offering for
general corporate purposes. The notes will be guaranteed on a
senior secured basis by the company's material domestic operating
companies. The guaranty is supported by the majority of the
company's U.S. assets, excluding certain properties, fixed assets
and equity interests in restricted subsidiaries.
As described more fully in Moody's credit opinion dated, March 4,
2011, the rating reflects the company's ongoing challenge to
achieve sustained profitability and positive cash generation over
the intermediate term. The debt issuance would provide the
company with some incremental liquidity, however, this amount is
consistent with Moody's expectations that, in part, supported
Moody's ratings downgrade in March 2011.
Rating assigned include:
* Senior secured notes -- rated B1 (LGD 2, 20%)
Other ratings not affected:
-- Corporate family rating at Caa1;
-- Probability of default at Caa1;
-- $500 million Senior Secured Notes due 2018, at B1; LGD2, 20%;
-- $3 million Senior Unsecured Notes due 2018, at Caa2; LGD4,
68%;
-- $10 million Senior Unsecured Notes due 2021, at Caa2; LGD4,
68%;
-- $300 million Senior Unsecured Global Notes due 2013, at Caa2;
LGD4, 68%;
-- Speculative Grade Liquidity Rating, SGL-2
The last rating action on Eastman Kodak took place on March 3,
2011, when Moody's lowered the company's Corporate Family Rating
to Caa1 and assigned a negative outlook.
Eastman Kodak Company, headquartered in Rochester, N.Y., provides
imaging technology products and services to the photographic,
graphic arts commercial printing, consumer digital, and
entertainment imaging market. Kodak reported $7.2 billion in
revenue for the fiscal year December 2010.
EASTMAN KODAK: S&P Assigns 'CCC' Rating to $200 Mil. Notes
----------------------------------------------------------
Standard & Poor's Ratings Services assigned Eastman Kodak Co.'s
new $200 million senior secured notes due 2019 its preliminary
issue-level rating of 'CCC' (at the same level as the 'CCC'
corporate credit rating on the company). The preliminary recovery
rating on this debt is '4', indicating S&P's expectation of
average (30% to 50%) recovery for lenders in the event of a
payment default. Proceeds of the notes will be used for general
corporate purposes.
In addition, if the company completes the contemplated
transaction, S&P would likely revise its recovery rating on the
existing $500 million second-lien notes due 2018 to '4' from '3'
(50% to 70% recovery expectation), subject to S&P's review of the
final terms and conditions of the proposed notes. The issue-level
rating would remain unchanged at 'CCC' regardless, as S&P does not
notch its issue-level ratings from its corporate credit rating for
either a '3' or a '4' recovery rating, as per S&P's recovery
rating criteria.
S&P's corporate credit rating on Rochester, N.Y.-based image
technology provider Eastman Kodak is 'CCC' and the rating outlook
is negative. The rating reflects S&P's expectation that the
company's pace of cash consumption will remain high over the near
term. It also reflects S&P's expectation of continued secular
volume declines of the traditional photographic products and
services business, that the company's consumer digital imaging
businesses will not quickly turn convincingly profitable, and that
intellectual property earnings, which constitute a significant
portion of the company's EBITDA, could decline significantly from
2010 levels. These factors underpin S&P's view of Kodak's
business risk profile as vulnerable and support its view that
revenue and EBITDA will decline in 2011. S&P views the company's
financial risk profile as highly leveraged because of the risk
that its earnings and cash flow could become insufficient to
support its debt.
Ratings List
Eastman Kodak Co.
Corporate Credit Rating CCC/Negative/--
New Rating
Eastman Kodak Co.
$200M sr secd nts due 2019 CCC(prelim)
Recovery Rating 4(prelim)
EQUIPMENT MANAGEMENT: Taps Janette Lentes as Accountant
-------------------------------------------------------
Equipment Management Technology asks the U.S. Bankruptcy Court for
the District of Nevada for permission to employ Janette Lentes as
its accountant.
Ms. Lentes will:
a) prepare annual and quarterly financial statements;
b) prepare corporate tax returns for 2010;
c) provide general bookkeeping services; and
d) provide general tax reporting and filing advice.
Mr. Lentes charges $50 per hour for services provided.
The Debtor assures the Court that the Ms. Lentes is a
"disinterested person" within the meaning of Section 101(14) of
the Bankruptcy Code.
Las Vegas, Nevada-based Equipment Management Technology filed for
Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 11-
11816) on Feb. 9, 2011. Judge Linda B. Riegle presides over the
case. Attorneys at The Schwartz Law Firm, Inc., represent the
Debtor in its restructuring effort. The Debtor estimated its
assets and debts at $10 million to $50 million.
EQUIPMENT MANAGEMENT: Can Access Cash Collateral on Interim Basis
-----------------------------------------------------------------
The Hon. Bruce T. Beesley of the U.S. Bankruptcy Court for the
District of Nevada authorized Equipment Management Technology to
use, on an interim basis, cash collateral of its prepetition
lender FCC LLC, doing business as First Capital Western Region
LLC.
The lender provided to the Debtor up to $22 million in loans in
August 2008. On Nov. 9, 2010, an order was entered by the
District Court, Clark County, Nevada, appointing a receiver with
respect to the Debtor's assets, in favor of FCC. At the time of
the appointment, FCC alleged it was owed the principal amount of
$13,474,161, plus interest, attorneys' fees, costs and other
items. FCC alleges that it is owed the principal amount of
$11,899,378, plus interest, attorneys' fees, costs and other items
as of the Petition Date.
During the period the Court grants interim access to cash
collateral, FCC will fund the Debtor's expenses, at a rate of
$40,000 per week, which amount will be wired into the Debtor's
debtor-in-possession bank account each Monday of the week,
provided, the initial weekly payment of $40,000 will wired into
the Debtor's debtor-in-possession bank account.
The Debtor is authorized to use cash collateral to pay (i) $3,000
to its President, Vito Longo, (ii) $2,0000 to its General Manager,
Paul Levasseur; provided, however, that the Debtor will forthwith
file an application to employ Mr. Levasseur.
As adequate protection, the prepetition lender is granted
replacement liens on and security interests in all of the Debtor's
property and assets.
Las Vegas, Nevada-based Equipment Management Technology filed for
Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 11-
11816) on Feb. 9, 2011. Judge Linda B. Riegle presides over the
case. Attorneys at The Schwartz Law Firm, Inc., represent the
Debtor in its restructuring effort. The Debtor estimated its
assets and debts at $10 million to $50 million.
EQUIPMENT MANAGEMENT: Taps Paul Levasseur as General Manager
------------------------------------------------------------
Equipment Management Technology asks the U.S. Bankruptcy Court for
the District of Nevada for permission to employ Paul Levasseur as
general manager.
Mr. Levasseur has agreed to provide:
a) general management of the Debtor's day to day operations;
b) management of the rental, leasing and selling of the
Debtor's high technology test equipment;
c) management of the Debtor's employees; and
d) management of the Debtor's bookkeeping, budget and
financial operations.
The Debtor proposes to pay Mr. Levasseur an annual salary of
$90,000.
The Debtor assures the Court that Mr. Levasseur is a
"disinterested person" as defined in Section 101(14) of the
Bankruptcy Code.
Las Vegas, Nevada-based Equipment Management Technology filed for
Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 11-
11816) on Feb. 9, 2011. Judge Linda B. Riegle presides over the
case. Attorneys at The Schwartz Law Firm, Inc., represent the
Debtor in its restructuring effort. The Debtor estimated its
assets and debts at $10 million to $50 million.
FANNIE MAE: John Nichols Does Not Own Any Securities
----------------------------------------------------
In a Form 3 filing with the U.S. Securities and Exchange
Commission, John R. Nichols, SVP, interim chief risk officer at
Federal National Mortgage Association Fannie Mae, disclosed that
he does not beneficially owns any securities of the Company.
About Fannie Mae
Federal National Mortgage Association, aka Fannie Mae, is a
government-sponsored enterprise that was chartered by U.S.
Congress in 1938 to support liquidity, stability and affordability
in the secondary mortgage market, where existing mortgage-related
assets are purchased and sold.
Fannie Mae has been under conservatorship, with the Federal
Housing Finance Agency acting as conservator, since Sept. 6, 2008.
As conservator, FHFA succeeded to all rights, titles, powers and
privileges of the company, and of any shareholder, officer or
director of the company with respect to the company and its
assets. The conservator has since delegated specified authorities
to Fannie Mae's Board of Directors and has delegated to management
the authority to conduct day-to-day operations.
The U.S. Department of the Treasury owns Fannie Mae's senior
preferred stock and a warrant to purchase 79.9% of its common
stock, and Treasury has made a commitment under a senior preferred
stock purchase agreement to provide Fannie with funds under
specified conditions to maintain a positive net worth.
The Company's balance sheet at Dec. 31, 2010 showed
$3.222 trillion in total assets, $3.224 trillion in total
liabilities and a $2.52 billion total deficit.
The Company reported a net loss of $14.02 billion on
$154.27 billion of total interest income for the year ended
Dec. 31, 2010, compared with a net loss of $72.02 billion on
$39.35 billion of total interest income during the prior year.
FEY 240: Post-Confirmation Status Conference on June 15
-------------------------------------------------------
According to docket information in the bankruptcy cases of Fey 240
North Brand LLC, Bankruptcy Judge Alan M. Ahart will convene a
post-confirmation status conference on June 15, 2011, at 10:00
a.m., at Courtroom 1375, 255 E Temple St., Los Angeles,
California.
The hearing was held to consider confirmation of Fey 240 North
Brand's Fourth Amended Chapter 11 Plan of Reorganization on
Feb. 23. The plan faces objection from Citizens Business Bank.
As reported by the Troubled Company Reporter, according to the
explanatory disclosure statement explaining the Plan, the Debtor
proposes to pay all allowed claims in full in accordance with the
terms of the Fourth Amended Plan. During the life of the Plan,
the Debtor will use its rental income to repay creditors. The
Debtor anticipates selling the property towards the end of the
Plan to pay any outstanding amounts then owed to secured or
unsecured creditors. The previous plan stated that the Debtor
anticipated refinancing or selling the property.
The 4th Amended Plan states that if the property is sold during
the Plan period, the Debtor anticipates that secured and unsecured
creditors will be paid in full from the sales proceeds.
Most likely, undisputed general unsecured creditors can expect
payment in full over the life of the plan. Beginning the first
month after plan confirmation and continuing through the terms of
the Plan, general unsecured creditors would receive their pro rata
share of the 60 equal monthly payments of $8,227.09, and payments
would be made through the 60th month of the Plan unless or until
the claim is paid in full.
The Plan proposed a Feb. 1, 2011 effective date. In the previous
plan, the effective date was Dec. 1, 2010.
With respect to classified claims:
Classification Treatment
-------------- ---------
1A - Los Angeles County Assessor -- amortized and paid monthly
through 60-month term of the
Plan beginning with the first
month
1B - Citizens business Bank 1st -- monthly interest only at 5%
Trust Deed Including Costs & for the first 19 months;
Penalties thereafter a 30-year
amortization schedule with
interest calculated on the
unpaid balance of the loan
for the remaining 41 months
of the Plan to satisfy the
secured claim
1C - DeLovely Properties 2nd -- monthly interest at 5% for 60
Trust Deed months of plan term; unpaid
balance paid at the end of
the plan term
1D - Glendale Career Schools -- monthly interest at 6% for 60
Secured Claim months of plan term; unpaid
balance paid at the end of
plan term
1E - Barnust Properties 4th -- unpaid balace paid at the end
Trust Deed of the plan term
1F - Evilsizer Construction -- paid in equal monthly
Mechanic's Lien installments through 60-month
term of plan beginning with
the first month
2A - General Unsecured Claims -- 60 Equal payments of
$8,277.09 beginning at the
first month of the Plan
2B - Unsecured Claims of Lobar -- unpaid balance will be paid
& Dorn. Platz at the end of the plan term
2C - Security Deposits -- will be paid pursuant to the
terms of lease
Class 3 -- Shareholders Interest -- members will retain their
membership interest in the
LLC
Under the 4th Amended Plan, classes 1A, 1B, 1C, 1D, 1E, 1F, 2A,
2B, and 2C are impaired and therefore entitled to vote. In the
previous plan, classes 1A, 1B, 1C, 1D, 1E, 1F, 2A, 2B, and 3 are
impaired and therefore entitled to vote.
The 4th Amended Plan states that a tentative settlement has been
reached with Class 1D and claimant should be entitled to vote to
the extent that it has an allowed claim. The previous plan stated
that Class 2C is disputed and claimant will be entitled to vote to
the extent that it has an allowed claim.
Under the 4th Amended Plan, Class 3 is unimpaired and therefore
doesn't vote. Class 1E as well as Class 2B -- unsecured creditors
Lobar Properties and Dorn Platz -- aren't affiliates of the Debtor
and there isn't a common ownership between the Debtor and the
entities.
Under the previous plan, Class 4 is unimpaired and therefore
doesn't vote. Class 1D as well as Class 2B -- unsecured creditors
Lobar Properties and Dorn Platz -- aren't affiliates of the Debtor
and there isn't a common ownership between the Debtor and the
entities.
Class lB, Citizens Business Bank, submitted an altered ballot,
changing the amount of the allowed claim and rejected the plan.
To the extent that this requires a cram down the Debtor requests
that the Plan for that class be approved as proposed.
A copy of the disclosure statement explaining the Plan is
available for free at:
http://bankrupt.com/misc/FEY240_4thamendedds.pdf
About Fey 240 North Brand
Pasadena, California-based Fey 240 North Brand LLC, filed for
Chapter 11 on December 4, 2009 (Bankr. C.D. Calif. Case No.
09-44228). John P. Schock, Esq. at Schock & Schock, alc,
represents the Debtor in its restructuring effort. Fey 240
scheduled $16,080,050 in assets and $12,222,451 in liabilities.
FEY 240: Hires Terrafirma to Prepare Appraisals
-----------------------------------------------
The Bankruptcy Court granted the application of Fey 240 North
Brand LLC to employ the firm Terrafirma to prepare the necessary
appraisals and provide testimony.
On Feb. 15, 2011, BGM filed and served a Notice of Motion for
Order Without Hearing Pursuant to LBR 9013-1(o) and Motion for
Authority to Employ Expert. No Request for Hearing or other
objection to the motion was filed or received.
About Fey 240 North Brand
Pasadena, California-based Fey 240 North Brand LLC, filed for
Chapter 11 on December 4, 2009 (Bankr. C.D. Calif. Case No.
09-44228). John P. Schock, Esq. at Schock & Schock, alc,
represents the Debtor in its restructuring effort. The Debtor
estimated assets and debts at $10 million to $50 million.
FIBRE CRAFT: Case Summary & Largest Unsecured Creditor
------------------------------------------------------
Debtor: Fibre Craft Properties, LLC
P.O. Box 1415
Dandridge, TN 37725
Bankruptcy Case No.: 11-31107
Chapter 11 Petition Date: March 9, 2011
Court: United States Bankruptcy Court
Eastern District of Tennessee (Knoxville)
Judge: Richard Stair Jr.
Debtor's Counsel: Keith L. Edmiston, Esq.
P.O. Box 425
Knoxville, TN 37902
Tel: (865) 384-2827
E-mail: keith.edmiston@gmail.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The list of 20 largest unsecured creditors contains only one
entry:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Community South Bank $3,200,000
625 S. Gay Street, Ste. 110
Knoxville, TN 37902
The petition was signed by Walt Rosin, chief manager.
FIFTH THIRD: Loan Amendment Won't Affect Moody's 'Ba3' Ratings
--------------------------------------------------------------
Moody's Investors Service says that Fifth Third Processing
Solutions, LLC's plan to amend and increase its 1st lien credit
facility by $200 million to repay the 2nd lien credit facility
will not affect the ratings on the 1st lien credit facility or the
corporate family rating; both rated Ba3. The rating outlook is
stable.
Fifth Third Processing Solutions, LLC, is a full service payment
solutions provider servicing financial institutions' and
retailers' credit card, debit card, merchant and private label
programs primarily in North America.
FIRST DATA: Incurs $846.90 Million Net Loss in 2010
---------------------------------------------------
First Data Corporation filed its annual report on Form 10-K
reporting a net loss $846.90 million on $10.38 billion of revenue
for the year ended Dec. 31, 2010, compared with a net loss of
$1.01 billion on $9.31 billion of revenue during the prior year.
The Company's balance sheet at Dec. 31, 2010, showed
$37.54 billion in total assets, $33.45 billion in total
liabilities and $4.05 billion in total equity.
A full-text copy of the Annual Report is available for free at:
http://ResearchArchives.com/t/s?74e6
About First Data
Based in Atlanta, Georgia, First Data Corporation, with over
$10 billion of revenue for the 12 months ended June 30, 2010,
provides commerce and payment solutions for financial
institutions, merchants, and other organizations worldwide.
* * *
The Company's carries a 'B3' corporate family rating, with a
stable outlook, from Moody's Investors Service, a 'B' corporate
credit rating, with stable outlook, from Standard & Poor's, and
a 'B' long-term issuer default rating from Fitch Ratings.
Standard & Poor's Ratings Services in December 2010 assigned its
'B-' issue rating with a '5' recovery rating to First Data Corp.'s
(B/Stable/--) $2 billion of 8.25% second-lien cash-pay notes due
2021, $1 billion $8.75% second-lien pay-in-kind-toggle notes due
2022, and $3 billion 12.625% unsecured cash-pay notes due 2021.
The '5' recovery rating indicates lenders can expect modest (10%-
30%) recovery in the event of payment default. Under S&P's
default analysis, there is insufficient collateral to fully cover
First Data's first-lien debt. As a result, the remaining value of
the company (generated by non-U.S. assets and not pledged) would
be shared pari passu among the uncovered portion of first-lien
debt, new second-lien debt, and new and existing unsecured debt.
FOOT LOCKER: S&P Raises Corporate Credit Rating to 'BB-'
--------------------------------------------------------
Standard & Poor's Ratings Services said that it raised its
corporate credit rating on New York City-based Foot Locker Inc. to
'BB-' from 'B+'. The outlook is stable.
As the same time, S&P raised the issue-level rating on the
company's unsecured debt to 'BB-' from 'B+'. The '4' recovery
rating on the debt indicates S&P's expectation of average (30%-
50%) recovery in the event of a payment default.
"The upgrade reflects the company's performance over the past
year, which was ahead of S&P's forecast," said Standard & Poor's
credit analyst David Kuntz. As a result, credit metrics
demonstrated significant improvement. In addition, S&P estimate
that the company should maintain this momentum with modest
operational growth, and S&P anticipates somewhat stronger credit
metrics over the near term because of continued operating
leverage.
FORD CREDIT: DBRS Puts 'BB' Rating to $500MM Sr. Unsecured Notes
----------------------------------------------------------------
DBRS has assigned a rating of BB with a Stable trend to the Ford
Credit Canada Limited (Ford Credit Canada or the Company) issue of
$500 million 4.875% fixed-rate senior unsecured notes (the Notes)
to be issued on March 15, 2011 and maturing March 17, 2014.
The Notes to be issued by the Company are unconditionally
guaranteed by Ford Motor Credit Company LLC (Ford Credit), Ford
Credit Canada's parent, and rank pari passu with all other senior
unsecured debt of Ford Credit Canada.
FOREVER CONSTRUCTION: Wants Control of Case Until July 14
---------------------------------------------------------
Forever Construction, Inc., is asking Judge Jack B. Schmetterer to
extend the period within which it has the exclusive right to file
a plan of reorganization to and including May 2, 2011, and the
period within which it has the exclusive right to solicit
acceptances of a plan to and including July 1.
The Debtor was initially given until Nov. 24, 2010, to file a plan
and disclosure statement. That deadline was later extended to
Feb. 26. The Debtor is now seeking yet another extension.
SPCP Group V, LLC, filed a motion for relief from the automatic
stay with respect to six parcels of the Debtor's real estate
consisting of multiple rental units. The Debtor responded by
indicating that two of the parcels -- the property at 920 Grand
Avenue and at 927 Grand Avenue, both in Waukegan, Illinois -- will
be surrendered, but disputed the relief as to the remaining four
parcels. The parties later reached an accord, which was approved
by the Court early in February.
The Debtor told the Court it will attempt to refinance the
mortgages on the real property known as 1206 Brookside Avenue and
1725 Sunset Avenue, both in Waukegan, Illinois, or list and market
those properties. If SPCP does not receive enough proceeds from
either a sale or refinance of those properties by July 14, the
stay will be modified.
The Debtor said the disposition of the Grand Avenue properties
will have an effect on its plan of reorganization. While it
believes that the disposition of the Brookside and Sunset
properties will also have an effect on the plan, the Debtor said
it will attempt to provide alternative provisions in its plan as
to those properties.
The Debtor has previously obtained orders authorizing it to use
cash collateral and make adequate protection payments to various
lenders. The Debtor informed the Court that it is current in its
obligations pursuant to the cash collateral orders.
Waukegan, Illinois-based Forever Construction, Inc., filed for
Chapter 11 on July 27, 2010 (Bankr. N.D. Ill. Case No. 10-33276).
Joel A. Schechter, Esq., assists the Debtor in its restructuring
effort. The Debtor estimated its assets and debts at $10 million
to $50 million in its Chapter 11 petition. No creditors committee
has been appointed in the case.
FOREVER CONSTRUCTION: May Hire Real Estate Sales Agent
------------------------------------------------------
Forever Construction, Inc., obtained Judge Jack B. Schmetterer's
permission to employ Jon P. Morgan of InTerra Realty as its real
estate sales agent.
As of the bankruptcy filing date, the Debtor owns various parcels
of real estate located in the city of Waukegan, Illinois.
According to the Debtor, on Oct. 15 SPCP Group V, LLC, purchased
certain mortgage loans from JPMorgan Chase Bank, which loans were
tied to the parcels of real estate. SPCP has sought relief from
the automatic stay with regard to certain of the parcels. As a
result, the Debtor entered into an accord with SPCP pursuant to
which the Debtor agreed to list, market and sell two properties.
The Debtor said it needs Mr. Morgan for the job. The Debtor said
Mr. Morgan will get a 5% commission. No commission will be due
until a sale closes and the proceeds are distributed.
The Debtor expects the listing price for the property at 920 Grand
Avenue in Waukegan to be $365,000 and the property at 927 Grand
Avenue in Waukegan to be $465,000.
Waukegan, Illinois-based Forever Construction, Inc., filed for
Chapter 11 (Bankr. N.D. Ill. Case No. 10-33276) on July 27, 2010.
Joel A. Schechter, Esq., assists the Debtor in its restructuring
effort. The Debtor estimated its assets and debts at $10 million
to $50 million in its Chapter 11 petition. No creditors committee
has been appointed in the case.
FREMONT GENERAL: Examiner Approves $2.6 Million Weiland Fee
-----------------------------------------------------------
Bankruptcy Law360 reports that an examiner appointed in the
bankruptcy of Fremont General Corp. has determined that the
majority of a $2.6 million fee request by counsel for the official
committee of unsecured creditors is legitimate.
About Fremont General
Based in Santa Monica, California, Fremont General Corp. (OTC:
FMNTQ) -- http://www.fremontgeneral.com/-- was a financial
services holding company with $8.8 billion in total assets at
Sept. 30, 2007. Fremont General ceased being a financial services
holding company on July 25, 2008, when its wholly owned bank
subsidiary, Fremont Reorganizing Corporation (f/k/a Fremont
Investment & Loan) completed the sale of its assets, including all
of its 22 branches, and 100% of its $5.2 billion of deposits to
CapitalSource Bank.
Fremont General filed for Chapter 11 protection on June 18, 2008,
(Bankr. C.D. Calif. Case No. 08-13421). Robert W. Jones, Esq.,
and J. Maxwell Tucker, Esq., at Patton Boggs LLP, Theodore
Stolman, Esq., Scott H. Yun, Esq., and Whitman L. Holt, Esq., at
Stutman Treister & Glatt, represent the Debtor as counsel.
Kurtzman Carson Consultants LLC is the Debtor's noticing agent and
claims processor. Lee R. Bogdanoff, Esq., Jonathan S. Shenson,
Esq., and Brian M. Metcalf, at Klee, Tuchin, Bogdanoff & Stern
LLP, represent the Official Committee of Unsecured Creditors as
counsel. Fremont's formal schedules showed $330,036,435 in total
assets and $326,560,878 in total debts.
Fremont General Corporation emerged from bankruptcy and filed
Amended and Restated Articles of Incorporation with the Secretary
of State of Nevada on June 11, 2010, which, among other things,
changed the Debtor's name to Signature Group Holdings, Inc.
Signature's plan of reorganization became effective on June 11,
2010. As of that date Fremont General changed its name to
Signature Group Holdings, Inc.
GELTECH SOLUTIONS: Receives U.S. Forest Service Listing
-------------------------------------------------------
GelTech Solutions, Inc. announced that its product, FireIce, after
24 months of evaluation, has passed all tests in accordance with
Forest Service Specification 5100-306a and has received listing
on the United States Forest Service's Qualified Products List.
This listing qualifies FireIce to be sold directly to Federal and
state governments as an important tool in combating these deadly
and costly wildfires.
The Qualified Products List or QPL is a list of products that have
been tested and certified by the U.S. Forest Service. This strict
testing process takes 24 months and involves over 40 product tests
to ensure a product's effectiveness and its safety for the
environment. FireIce met these requirements.
The U.S. Forest Service specification 5100-306a is the testing
procedure for 'water enhancers' to be used in wildland and
wildland-urban interface fire management. FireIce is now approved
for use on Federal land with ground application equipment or can
be dropped from planes and helicopters to suppress spreading
wildfires. Unlike other products, FireIce can be "applied"
directly to the fire area to slow or stop combustion, and for
exposure protection.
Receiving the U.S. Forest Service listing is one of the highest
certifications a suppression product can receive. FireIce now has
the ability to be chosen and used in large scale operations around
the world. Joseph Ingarra, President of GelTech, stated, "Many
countries around the world follow the QPL. This approval allows
us to create a worldwide footprint for FireIce over the coming
months and years."
Michael Cordani, CEO of GelTech Solutions, stated, "I am extremely
proud of our team for reaching this important and crucial
milestone. Having received the Forest Service 'stamp of approval'
is a huge step and gives instant credibility to FireIce in the
marketplace. The U.S. Forest Service approval now gives us the
ability to assist with the large scale wildfires around the entire
United States. We feel FireIce is going to be a valuable tool for
eradicating wildfires both domestically and around the world."
Cordani added that "unlike competitive products FireIce is Eco
Friendly. This becomes a significant factor based upon FireIce's
ability to aid in the re-growth of grass and plant life in the
areas where it is used as well as protecting animals and fish."
Joseph Ingarra, President of GelTech Solutions, stated, "We are
extremely excited and prepared for the next phase of GelTech's
business plan -- ramping up sales of FireIce. Our distribution
partners have been preparing for this along with us and will play
a significant role in taking GelTech to the next level."
Paul Curtis, CEO of LN Curtis & sons, a leading distributor of
fire suppression products to the Federal and state governments
stated: "L.N. Curtis & sons is enormously excited about the news
of FireIce receiving QPL Status. The extensive testing that a
product must undergo in order to pass these standards speaks to
the high quality of FireIce. We are very enthusiastic about
taking this news to the marketplace. L.N. Curtis & sons is
committed to providing effective and safe tools to emergency
responders. We are grateful to GelTech in taking this extra step
to ensure our hero customers receive only the finest products. "
Peter Cordani, the inventor of FireIce stated: "After 4 long, hard
years, we have achieved validation at the highest level. Cordani
added, "This gives us a clear runway to roll out many more of the
inventions we've put in place over the years to help fuel the
future growth of GelTech."
Wildfire Statistics
Federal fire suppression costs have increased significantly in
recent years, exceeding $1 billion in five of the last seven
years. Almost 50% of the U.S. Forest Service budget is now spent
on fire suppression each year. Recent articles state that the
U.S. Forest Service uses an average of 26 million gallons of
aerial retardant annually and that figure is expected to increase
by 500,000 gallons per year. There has also been an increase in
large scale wildfires (100,000 acres +) in recent years. Since
1997, 98 large scale wildfires have broken out in the U.S. alone
with 54 taking place since 2005. Since 2000, there has been over
785,000 wildfire fires affecting over 69,000,000 acres in the
United States alone. Globally, this number is multiplied many
times over with recent examples being the historic fires taking
place in Russia, Greece and Israel. "The prospect of taking
market share in this global multi-billion dollar marketplace has
everyone at GelTech extremely excited at the near and long term
potential for our company," said Joseph Ingarra.
About GelTech Solutions
Jupiter, Fla.-based GelTech Solutions Inc. (OTC Bulletin Board:
GLTC) -- http://www.GelTechsolutions.com/-- is a Delaware
corporation organized in 2006. The Company creates innovative,
Earth-friendly, cost-effective products that help industry,
agriculture, and the general public accomplish environmental and
safety goals, such as water conservation and the protection of
lives, homes, and property from fires. The Company's current
business model is focused on the following products: 1)
FireIce(R), a fire suppression product, 2) SkinArmor(TM), an
ointment used for protecting skin from direct flame and high
temperatures, and 3) Soil2O(TM), a line of agricultural moisture
retention products.
The Company's balance sheet at Sept. 30, 2010, showed $1.0 million
in total assets, $2.6 million in total liabilities, and a
stockholders' deficit of $1.6 million.
As reported in the Troubled Company Reporter on October 4, 2010,
Salberg & Company, P.A., in Boca Raton, Fla., expressed
substantial doubt about the Company'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 the
Company has a net loss and net cash used in operating activities
in 2010 of $3.5 million and $2.6 million, respectively, and has an
accumulated deficit, a stockholders' deficit and working capital
deficit of $9.6 million, $1.1 million, and $1.7 million,
respectively, at June 30, 2010.
GENERAL MOTORS: Old GM Signs Deal to Rejection of Pontiac Contract
------------------------------------------------------------------
Motors Liquidation Co. and DTE Pontiac North, LLC, entered into a
Bankruptcy Court-approved stipulation for the rejection of a
Utility Services Agreement.
Specifically, the parties agree that the Utility Services
Agreement, Asset Purchase Agreement, Lease Agreement and all
related amendments constitute a single, integrated contract and
thus, all three agreements are deemed rejected by the Debtors,
nunc pro tunc to January 24, 2011.
The Parties agree that all issues relating to the allowance,
amount, priority and treatment of any claim, right, or remedy
asserted by DTE with respect to the Rejection are preserved, and
the Debtors' defenses or right to object to any claim, right, or
remedy asserted by DTE with respect to the Rejection are also
preserved.
DTE will have until the date that is 30 days after service of
this stipulation to file a proof of claim with respect to any
general unsecured claim for damages arising from the Rejection.
Nothing contained in the Parties' Stipulation will limit the
Debtors' rights to seek any amounts due to the Debtors under the
Utility Services Agreement, Asset Purchase Agreement, and Lease
Agreement, or DTE's right to receive payment in the ordinary
course for goods and services provided prior to the Rejection.
Similarly, neither the timing of the Rejection nor any other
provision in the Parties' Stipulation will prejudice in
any way DTE's rights, if any, under Section 365(h) of the
Bankruptcy Code in respect of the Lease Agreement arising as a
result of the Rejection; however, the Parties reserve all rights
with respect to the impact of exercising 365(h) rights on the
rights and obligations of the Parties under the integrated
Utility Services Agreement, Asset Purchase Agreement, and
Lease 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)
GENERAL MOTORS: Old GM Asks Court to Expunge NUMMI Claim
--------------------------------------------------------
Motors Liquidation Co. and its affiliates ask the Bankruptcy Court
to disallow and expunge Claim No. 70842 filed by New United Motor
Manufacturing, Inc.
As previously reported, NUMMI asserted Claim No. 67537 against
Motors Liquidation Company for, among other things, breach of
contract for $500 million. Subsequently, NUMMI filed Claim No.
70191 for any damages arising from the rejection of its
contracts. NUMMI then filed a complaint asserting claims for
breach of contract and promissory estoppel against MLC.
Following oral argument on February 9, 2011, the Court took the
matter under submission pending additional briefing on certain
issues, as asked by the Court. In February 2011, NUMMI asserted
Claim No. 70842 for all liabilities of the Debtors to NUMMI
relating to or arising from events occurring subsequent to the
Petition Date, whether asserted by NUMMI in the Complaint,
arising or related to the Adversary Proceeding, or otherwise.
NUMMI alleges that its administrative expense claim is in a
contingent and unliquidated amount.
Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, in New
York, argues that after the Petition Date, MLC promptly
took certain actions to cease postpetition business with NUMMI, a
fact conceded by NUMMI in the Complaint. MLC also rejected all
contracts with NUMMI that it believed may be characterized as
executory, he asserts. Thus, it is clear that MLC had no
postpetition obligations to NUMMI and that the NUMMI
Administrative Claim cannot arise from consideration provided in
a postpetition transaction between the NUMMI and MLC, he
contends. To the extent the NUMMI Administrative Claim attempts
to recover administrative expenses arising from obligations
incurred before the Petition Date, it must be disallowed, he
tells the Court.
Mr. Smolinsky continues that NUMMI's postpetition efforts to wind
down its affairs have been undertaken solely for its own
interests and have provided no direct benefit to any of the
Debtors' estates. Indeed, NUMMI does not even attempt to explain
in its administrative proof of claim as to the benefit conferred
on the Debtors by its postpetition actions, he points out.
Essentially, the NUMMI Administrative Claim fails to provide
sufficient specificity to establish a claim for administrative
expenses, he insists.
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: Signs Deal to Resolve Treasury's Claims
-------------------------------------------------------
General Motors Corp, now known as Motors Liquidation Co. and the
U.S. Government entered into a Bankruptcy Court-approved
stipulation resolving claims filed by the U.S. Department of the
Treasury in the Debtors' Chapter 11 cases.
The Treasury Department timely filed Claim No. 65669 against
Motors Liquidation Company, asserting a secured contingent
unliquidated claim arising from the Loan and Security Agreement.
The Treasury also filed Claim No. 65754 against MLC asserting an
allowed superpriority administrative expense claim arising from
the Secured Superpriority Debtor-In-Possession Credit Agreement.
The claims asserted in the LSA Claim and DIP Claim were allowed
by a Court order dated June 25, 2009, as amended on July 5, 2009.
The Treasury Department timely filed Claim Nos. 70252 and 70253
against Remediation and Liability Management Company and Claim
Nos. 70256 and 70257 against Environmental Corporate Remediation
Company, Inc., asserting the same claims previously asserted
against MLC.
The Amended Joint Chapter 11 Plan of Reorganization provides that
joint obligations of two or more of the Debtors and identical
claims against multiple Debtors, are to be merged based on the
doctrine of substantive consolidation.
By this stipulation, the U.S. Government on behalf of the
Treasury Department, withdraws Claim Nos. 70252 and 70253 filed
against REALM and Claim Nos. 70256 and 70257 filed against
ENCORE. The U.S. Government also withdraws Claim No. 65669
against MLC.
The Debtors' claims agent will be authorized to adjust the claims
register to reflect the withdrawal of Claim Nos. 70252 and 70253
filed against REALM; Proofs of Claim Nos. 70256 and 70257 filed
against ENCORE; and Proof of Claim No. 65669 filed against MLC.
Upon the withdrawal of the Claims, the Debtors waive any right to
object to the DIP Claim on the grounds that the DIP Claim was
filed against the incorrect Debtor. The DIP Claim constitutes a
timely claim against all Debtors and will be allowed and entitled
specifically to the treatment set forth in the Amended Joint
Chapter 11 Plan of Reorganization.
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)
GLOBAL SHIP: Reports $1.22 Million Net Income in 4th Quarter
------------------------------------------------------------
Global Ship Lease, Inc., reported net income of $1.22 million on
$40.03 million of time charter revenue for the three months ended
Dec. 31, 2010, compared with net income of $12.35 million on
$39.88 million of time charter revenue for the same period during
the prior year.
The Company also reported a net loss of $3.97 million on
$158.84 million of time charter revenue for the year ended
Dec. 31, 2010, compared with net income of $42.37 million on
$148.71 million of time charter revenue during the prior year.
The Company's balance sheet at Dec. 31, 2010 showed $981.02
million in total assets, $656.46 million in total liabilities and
$324.56 million in stockholders' equity.
Ian Webber, Chief Executive Officer of Global Ship Lease, stated,
"2010 was a year of significant progress for Global Ship Lease.
We achieved almost 100% utilization of our vessels and posted
record revenues. We proactively converted our contractual
obligation to acquire two 4,250 TEU vessels in December 2010 into
purchase options under which we have the ability to purchase one
vessel in December 2011 and the other in January 2012. Finally,
we paid down $55.4 million of debt during the year. These steps
improve our financial flexibility going forward."
A full-text copy of the press release announcing the financial
results is available for free at:
http://ResearchArchives.com/t/s?74e0
About Global Ship Lease
London-based Global Ship Lease (NYSE: GSL, GSL.U and GSL.WS)
-- http://www.globalshiplease.com/-- is a containership charter
owner. Incorporated in the Marshall Islands, Global Ship Lease
commenced operations in December 2007 with a business of owning
and chartering out containerships under long-term, fixed rate
charters to world class container liner companies.
Global Ship Lease owns 17 vessels with a total capacity of 66,297
TEU with a weighted average age at June 30, 2010, of 6.3 years.
All of the current vessels are fixed on long-term charters to CMA
CGM with an average remaining term of 8.6 years. The Company has
contracts in place to purchase two 4,250 TEU newbuildings from
German interests for approximately $77 million each that are
scheduled to be delivered in the fourth quarter of 2010. The
Company also has agreements to charter out these newbuildings to
Zim Integrated Shipping Services Limited for seven or eight years
at charterer's option.
As reported in the Troubled Company Reporter on May 25, 2010,
PricewaterhouseCoopers expressed substantial doubt about the
Company's ability to continue as a going concern, following the
Company's results for 2009. The independent auditors noted of the
uncertainty related to the financial situation of the Company's
charterer, CMA CGM. "If CMA CGM is unable to accomplish a
financial restructuring and ceases doing business or otherwise
fails to perform its obligations under the Company's charters,
Global Ship Lease's business, financial position and results of
operations would be materially adversely affected as it is
probable that, should the Company be able to find replacement
charters, these would be at significantly lower daily rates and
for shorter durations than currently in place. In this situation
there would be significant uncertainty about the Company's ability
to continue as a going concern."
HAWKER BEECHCRAFT: Files Form 10-K; Posts $304.3MM Loss in 2010
---------------------------------------------------------------
Hawker Beechcraft Acquisition Company, LLC, has filed its annual
report on Form 10-K for the fiscal year ended Dec. 31, 2010.
The Company reported a net loss of $304.3 million on
$2.805 billion of total sales for the year ended Dec. 31, 2010,
compared with a net loss of $451.3 million on $3.198 billion of
total sales during 2009.
The Company's balance sheet at Dec. 31, 2010, showed
$3.212 billion in total assets, $3.426 billion in total
liabilities, and a deficit of $214.4 million.
A full-text copy of the Form 10-K is available for free at:
http://researcharchives.com/t/s?74ec
About Hawker Beechcraft
Headquartered in Wichita, Kansas, Hawker Beechcraft Acquisition
Company, LLC -- http://www.hawkerbeechcraft.com/-- is a leading
designer and manufacturer of business jet, turboprop and piston
aircraft. The Company is also the sole source provider of the
primary military trainer aircraft to the U.S. Air Force and the
U.S. Navy and provide military trainer aircraft to other
governments. The Company has a diverse customer base, including
corporations, fractional and charter operators, governments and
individuals throughout the world. The Company provides parts,
maintenance and flight support services through an extensive
network of service centers in 32 countries to an estimated
installed fleet of more than 37,000 aircraft.
* * *
Hawker Beechcraft carries 'Caa2' corporate family and probability
of default ratings from Moody's Investors Service and a 'CCC+'
long-term corporate credit rating from Standard & Poor's Ratings
Services.
HCA HOLDINGS: Moody's Retains 'B2' Corporate Family Rating
----------------------------------------------------------
Moody's Investors Service commented that the completion of the IPO
by HCA Holdings, Inc., has no immediate impact on the company's B2
Corporate Family Rating. The outlook for the ratings remains
positive. While Moody's believes that the completion of the IPO
is a credit positive since proceeds are expected to be used to
repay outstanding debt, the estimated $2.6 billion of proceeds to
the company won't meaningfully reduce HCA's $28.2 billion debt
load.
Moody's last rating action on HCA was on November 9, 2010, when
it assigned a Caa1 (LGD 6, 96%) rating to the company's senior
unsecured notes issued at the parent holding company. Moody's
also changed the rating outlook to positive at that time.
Headquartered in Nashville, Tennessee, HCA is the nation's
largest acute care hospital company with 164 hospitals and 106
freestanding surgery centers (including eight hospitals and nine
freestanding surgery centers that are accounted for using the
equity method) as of December 31, 2010. For the year ended
December 31, 2010, the company recognized revenue in excess of
$30 billion.
HERCULES OFFSHORE: Amends $475-Mil. & $175-Mil. Credit Facilities
-----------------------------------------------------------------
On March 3, 2011, Hercules Offshore, Inc., entered into an
amendment to its credit agreement governing its $475 million term
loan and $175 million revolving credit facility with a syndicate
of financial institutions. A fee of 0.25%, or $1.4 million, was
paid to the lenders consenting to the Amendment, based on their
total commitment.
Among other things, the Amendment allows the Company to use cash
to fund a portion of the purchase price for the assets of Seahawk
Drilling, Inc., as previously announced. In addition, the
Amendment increases the Company's investment basket from $25
million to $50 million. The amount available for borrowing under
the Company's revolving credit facility was reduced by $35.0
million to $140.0 million, and the interest rates on borrowings
under the Credit Facility will increase to 5.5% plus the London
Interbank Offered Rate for Eurodollar Loans and 4.5% plus the
Alternate Base Rate for ABR Loans, compared to prior rates of 4.0%
plus LIBOR for Eurodollar Loans and 3.0% plus the Alternate Base
Rate for ABR Loans. There will continue to be a 2.0% floor rate
on LIBOR for Eurodollar Loans and a minimum base rate of 3.0% with
respect to ABR loans.
Depending upon whether or not the Seahawk acquisition has been
completed in the relevant quarter, the Amendment would revise the
covenant threshold levels of the Total Leverage Ratio, as defined
in the Credit Agreement.
In addition, the Amendment exempts the pro forma treatment of
historical results from the Seahawk assets with respect to the
calculation of the financial covenants in the Credit Agreement.
A full-text copy of the Amendment is available for free at:
http://ResearchArchives.com/t/s?74e1
About Hercules Offshore
Hercules Offshore Inc. (NASDAQ: HERO) --
http://www.herculesoffshore.com/-- provides shallow-water
drilling and marine services to the oil and natural gas
exploration and production industry in the United States, Gulf of
Mexico and internationally. The Company provides these services
to integrated energy companies, independent oil and natural gas
operators and national oil companies. The Company operates in six
business segments: Domestic Offshore, International Offshore,
Inland, Domestic Liftboats, International Liftboats and Delta
Towing.
Hercules carries a corporate credit rating of 'B-/Negative/--'
from Standard & Poor's Ratings Services. S&P said in February
2011 that the ratings on Hercules reflect S&P's view of the weak
market conditions the company faces as a provider of shallow-water
drilling and marine services to the oil and gas industry. S&P
expects weak market conditions for jack-up rigs due to low
utilization and soft day rates in the shallow Gulf of Mexico (GOM)
through 2011.
The Troubled Company Reporter reported on Nov. 17, 2010, that
Moody's Investors Service downgraded the Corporate Family Rating
of Hercules Offshore Inc. and the Probability of Default Rating to
'Caa1' from 'B2'. Moody's also downgraded Hercules' 10.5% senior
secured notes due 2017, its senior secured revolving credit
facility due 2012, and its senior secured term loan B due 2013,
all to Caa1 with LGD3, 45%. The outlook remains negative.
"The inability of Hercules to generate meaningful free cash flow
despite limited reinvestment in its aging fleet of rigs is cause
for concern," commented Stuart Miller, Moody's Senior Analyst.
"Without a significant de-leveraging of its balance sheet,
Hercules is following a path that could lead to financial hardship
at the first sign of a market softening." Hercules' Caa1 CFR
rating reflects its highly leveraged balance sheet and limited
ability to generate free cash flow. The Caa1 rating on the senior
secured notes reflects their pari passu secured position in
Hercules' capital structure relative to the senior secured credit
facilities.
HERTZ CORP: DBRS 'BB' Issuer Rating Unmoved By Financial Results
----------------------------------------------------------------
DBRS Inc. (DBRS) has commented that the ratings of Hertz
Corporation (Hertz or the Company), including its Issuer Rating of
BB are unaffected following the Company's announcement of 4Q10 and
full year financial results indicating narrower pre-tax losses, on
a GAAP basis, of $7.8 million for the quarter and $13.6 million
for full year 2010. The trend on all ratings is Stable.
Hertz's results indicate continuing positive momentum across the
franchise and improving underlying profitability despite an uneven
economic recovery and travel volumes remaining below pre-recession
levels. On an underlying basis, corporate adjusted EBITDA for the
quarter grew 20% year-on-year to $265.7 million and increased a
solid 12% for the full year to $1.1 billion. Importantly, the
results evidence good momentum across all businesses with revenue
growth in all three operating segments. For the quarter, Company
earnings were driven by a 6.3% year-on-year increase in worldwide
revenues, excluding the effects of foreign currency movements, to
$1.8 billion. Revenue growth was primarily driven by recovering
commercial travel volumes with transaction days increasing 6.6%.
Pricing remained firm across both the U.S. and European car rental
segments. Moreover, revenue generation benefited from the
continued expansion of the off-airport business and Advantage, the
Company's cost-conscious leisure travel brand.
Management's cost reduction efforts have improved fleet efficiency
benefiting profitability. While direct operating expenses
increased 1.4% on a dollar basis, owed to a larger fleet and the
continuing expansion of the Company's off-airport operations and
the Advantage brand, as a percentage of revenues, direct operating
expenses were 220 basis points lower at 56.5%. In 4Q10, corporate
adjusted EBITDA margins improved by 180 basis points year-on-year
to 14.5%, reflecting improved earnings generation over a reduced
cost base. DBRS considers the results as evidencing that ongoing
management efforts to diversify the revenue base and streamline
the fixed cost base are positively impacting financial
performance.
By segment, the positive trajectory of Hertz's results continued
in 4Q10. For the quarter, U.S. car rental revenue increased
6% year-on-year, while European car rental revenue, excluding
the effects of foreign currency movements, improved 7.3%.
Importantly, off-airport demand continues to demonstrate solid
growth with volumes increasing a noteworthy 11.6% year-on-year.
For the quarter, Hertz Equipment Rental Corporation (HERC)
generated $286.1 million of revenue, a 4% increase year-on-year,
on increasing volumes and utilization rates. DBRS notes this was
the second consecutive quarter of positive revenue growth in HERC
indicating stabilization and the early stages of a recovery in the
equipment rental market.
The Company continues to demonstrate good fleet management acumen.
U.S. fleet utilization in 2010 remained relatively stable year-on-
year at 79.5%, despite the average fleet increasing approximately
9%. Moreover, fleet costs continue to benefit from the healthy
used-vehicle market and continuing development of more profitable
remarketing channels. U.S. vehicle depreciation per unit for 4Q10
totaled $304 per month, 4% lower than a year ago, while European
unit costs declined nearly 7%.
The Company's funding profile is solid, underpinned by good access
to the capital markets. During 2010, Hertz successfully completed
approximately $6.0 billion in global debt refinancings, while
lowering overall funding costs. Near-term maturities are
manageable with $460 million of fleet debt and only $157 million
of corporate debt to be refinanced in 2011. At December 31, 2010,
pro-forma corporate liquidity totaled a solid $2.0 billion,
adjusted for the redemption of $1.1 billion of notes completed in
January 2011.
HHI HOLDINGS: Moody's Affirms Corporate Family Rating at 'B2'
-------------------------------------------------------------
Moody's Investors Service affirmed the Corporate Family and
Probability of Default Ratings of HHI Holdings, LLC, at B2. In a
related action Moody's assigned a B2 rating on the senior secured
term loan. The rating outlook is changed to positive.
HHI plans to use the proceeds of the $325 million new senior
secured term loan to refinance the existing $222 million
senior secured term loan, fund a distribution to equity holders
(including the company's sponsor, KPS Capital Partners, LP, and
minority equity holders, including Mitsubishi Corporation) and pay
related fees and expenses. This special distribution follows
other special distributions made in September 2010 and March 2010.
These ratings were assigned:
-- B2 (LGD4, 50%), for the $325 million senior secured term loan
These ratings were affirmed:
-- Corporate Family Rating, B2;
-- Probability of Default, B2;
-- B3 (LGD4, 59%), for the existing $222 million senior secured
term loan (this rating will be withdrawn upon the facility's
repayment)
Rating Rationale
The affirmation of HHI's B2 Corporate Family Rating reflects
Moody's view that while the company's leverage will increase
following the transaction, the incremental leverage will still
be modestly less than previous expectations for year-end 2010
under the prior term loan. HHI's performance in 2010 outpaced
Moody's expectations as a result of stronger profitability in
the company's forging operations following the October 2009
acquisition of Formtech Industries, LLC. That said, the benefit
to the company's debt leverage profile is substantially offset by
the company's third distribution to equity holders over the last
12 months. The CFR also continues to embody the company's modest
size, high regional exposure to North America, and high customer
concentrations to the Detroit-3 (about 75% of revenues). As such,
the company is very susceptible to the cyclical automotive
industry and fluctuations in the operations and end-markets of its
major customers.
The ratings benefit from barriers to entry, including high capital
investment requirements for the forging industry. Through the
acquisition of forging assets, HHI has developed a material share
of the outsourced forging market within the automotive industry.
HHI has successfully demonstrated an ability to integrate a number
of automotive forging acquisitions over the recent years while the
automotive industry has experienced a significant downturn in
production followed by a modest recovery.
The positive rating outlook incorporates Moody's view that,
despite the incremental leverage generated by the proposed
distribution to equity holders, expected improvement in North
American automotive production should support HHI's improved
operating performance over the near-term. The terms of the new
senior secured term loan and asset based revolver are expected to
include significantly improved borrowing rates such that interest
costs are expected to remain relatively unchanged. This, combined
with the company's expected performance, should result in strong
interest coverage over the near-term, and thus be supportive of
higher ratings. Pro forma for the new capital structure, fiscal
2010 Debt/EBITDA and EBIT/interest coverage are expected to
approximate 3.2x and 3.8x, respectively (including Moody's
standard adjustments).
The B2 rating on the new senior secured term loan reflects Moody's
expectation of improved recovery prospects, despite its increased
size, following HHI's better than expected performance in 2010.
This improved performance is expected to continue over the
intermediate term. Thus, the deficiency claim on the term loan
was removed.
HHI is expected to continue to have a good liquidity profile over
the near-term supported by Moody's anticipation of positive free
cash flow over the next twelve months and availability under the
new asset based revolving credit facility. Cash balances are
expected to be nominal upon completion of the transaction. The
new $100 million asset based revolving credit facility (unrated by
Moody's) will be partially funded at closing. However, the
facility is expected to be largely unused, as the company's strong
operating margins should lead to positive free cash flow
generation over the next twelve months, after nominal required
amortization under the term loan. Financial covenants under the
new term are anticipated to include a maximum debt leverage test
and a minimum interest coverage test. The asset based revolving
credit facility is anticipated to have a springing minimum fixed
charge coverage test when availability falls below a determined
level. Alternate liquidity is limited as essentially all of the
company's assets secure the credit facilities.
The rating could improve if HHI were to continue to maintain its
strong niche market position, and revenue participation in the
industry's recovery resulting in EBIT margins maintained above
13%, debt/EBITDA below 3.0x, and EBIT/Interest above 3.5x.
Further customer and industry diversification could also result
in positive ratings momentum.
The outlook or rating could be lowered if North American
automotive production levels do not recover as anticipated,
resulting in substantially weaker profitability or a deterioration
in liquidity. If operations were to weaken such that debt/EBITDA
were to increase over 4.0 times or free cash flow generation was
not realized, the company's rating and/or outlook could be
lowered. The ratings or outlook also could be lowered if
additional shareholder distributions are made.
The last rating action was on September 22, 2010, when the B2
Corporate Family Rating was affirmed.
HHI Holdings, LLC, headquartered in Royal Oak, Michigan, is a full
service supplier of highly engineered metal forgings and machined
components, wheel bearings, and powdered metal engine and
transmission components for automotive and industrial customers.
Operations are conducted through three subsidiaries: Forging
Holdings, LLC; Bearing Holdings, LLC, and Gearing Holdings, LLC.
HOTI ENTERPRISES: Rattet Quits as Bankruptcy Counsel
----------------------------------------------------
Judge Robert D. Drain has granted the application of Rattet,
Pasternak & Gordon-Oliver, LLP, to withdraw as bankruptcy counsel
to Hoti Enterprises, L.P. and Hoti Realty Management Co., Inc.
Rattet had complained to the Court that the Debtor has
continuously failed to accurately disclose facts which are germane
to the firm's effective representation of the Debtors and their
estates.
The Debtors filed for Chapter 11 proceeding as a result of a
pending foreclosure action and the appointment of a Receiver of
Rents in a pending foreclosure action encaptioned, GECMC 2007-C1
Burnett Street, LLC v. Hoti Enterprises, L.P. pending in the
Supreme Court of the State of New York, County of Kings, Index No.
5006/09.
Rattet was retained by Court order dated Dec. 31, 2010, nunc pro
tunc, as of the Filing Date or Oct. 12, 2010. According to papers
filed by the firm in January, it has worked diligently and
tirelessly to assist the Debtors in their attempts to resolve
their issues with GECMC 2007-C-1 Burnett Street, the Debtor's
mortgagee and largest secured creditor. The firm defended actions
brought by GECMC in the Bankruptcy Court and negotiated a
Stipulation for the use of cash collateral with GECMC. In all
respects, the firm said it has maximized its efforts to protect
the rights of the Debtors and assist in their efforts to
reorganize.
However, the firm said it has not been able to obtain the frank
and open disclosure of the Debtors' affairs as is necessary for
effective representation. There have been difficulties in
communication concerning, inter alia, the Debtors prepetition
books and records and the Debtors the turnover of the Tenant Rent
Deposits.
The firm recounted that under the terms of the Cash Collateral
Order the Debtors were required to turn over prepetition tenant
rent deposits in the amount of $100,000. The Tenant Rent Deposits
have not yet been turned over by the Debtors, the firm said in the
January filings.
The firm also told the Court it has made numerous attempts to
counsel the Debtors with respect to their duties and
responsibilities in these proceedings, however, the Debtors and
the firm have been unable to agree on a course of action going
forward. Moreover, communications between the Debtor and the firm
have been strained.
In their application to employ Rattet, the Debtor had proposed to
pay the firm on an hourly basis at these rates:
Professional Hourly Rate
------------ -----------
Partners $475-$650
Of counsel $475
Associates $200-$450
Paraprofessionals $150
In a separate affidavit, GJelosh Dedvukaj, Hoti's vice president,
disclosed that Rattet has been paid $62,500 pre-bankruptcy to
submit first day filings, monthly operating reports, and a
feasible plan with potential investors, and for all other efforts
to represent the Debtors. Rattet has also requested an additional
postpetition payment of $111,703. No plan of reorganization has
been filed in the case.
The firm may be reached at:
Robert L. Rattet, Esq.
RATTET, PASTERNAK & GORDON-OLIVER, LLP
550 Mamaroneck Avenue
Harrison, NY 10528
Tel: (914) 381-7400
About Hoti Enterprises
Harrison, New York-based Hoti Enterprises, LP, is a single asset
real estate holding company that owns an apartment complex located
at 2801 Fillmore Avenue, 3001 Avenue R and 2719 Fillmore Avenue --
collectively, known as 1865 Burnett Street -- in Brooklyn, New
York. Hoti Realty Management was in the business of owning and
operating a management company that managed the apartment complex.
Hoti filed for Chapter 11 bankruptcy protection on Oct. 12, 2010
(Bankr. S.D.N.Y. Case No. 10-24129). Hoti Enterprises estimated
its assets and debts at $10 million to $50 million.
A receiver of rents was appointed against Hoti Enterprises pre-
bankruptcy pursuant to a foreclosure proceeding commenced by GECMC
2007-C-1 Burnett Street, Hoti's mortgagee and largest secured
creditor.
No Official Committee of Unsecured Creditors has been appointed in
the case.
HOTI ENTERPRISES: Hires Tanya Dwyer to Replace Rattet Firm
----------------------------------------------------------
Hoti Enterprises, L.P. and Hoti Realty Management Co., Inc., to
seek authority from Judge Robert D. Drain to employ as their
replacement bankruptcy counsel:
Tanya Dwyer, Esq.
DWYER & ASSOCIATES, LLC
11 Broadway, Suite 615
New York, NY 10004
Tel: (212) 518-3663
Fax: (343) 332-1737
E-mail: tanya@dwyerlawnyc.com
Dwyer & Associates will replace Rattet, Pasternak & Gordon-Oliver,
LLP, as Hoti's bankruptcy counsel. Rattet has stepped down after
complaining to the Court that the Debtor has continuously failed
to accurately disclose facts which are germane to the firm's
effective representation of the Debtors and their estates.
Victor Dedvukaj, president of Hoti, disclosed that he and his
spouse are being represented by Dwyer in a personal residential
foreclosure matter. Mr. Dedvukaj said neither the Debtor gives
fund to him or his family, outside the scope of the bankruptcy
proceedings. He also noted that the payment Dwyer has reeived for
the Chapter 11 proceedings was received from Dedvukaj
Construction, Inc., a company that is entirely separate from Hoti.
Mr. Dedvukaj said the Debtors do need able representation but Hoti
does not and has never had access to their funds since the
inception of the bankruptcy cases. Therefore, legal fees are
being paid by Dedvukaj Construction. The Debtors plan to repay
Dedvukaj Construction upon confirmation and execution of their
bankruptcy plan.
Mr. Dedvukaj further disclosed that Dwyer received postpetition
third party retainer payments from Dedvukaj Construction in the
amounts of $1,690 and $5,000.
About Hoti Enterprises
Harrison, New York-based Hoti Enterprises, LP, is a single asset
real estate holding company that owns an apartment complex located
at 2801 Fillmore Avenue, 3001 Avenue R and 2719 Fillmore Avenue --
collectively, known as 1865 Burnett Street -- in Brooklyn, New
York. Hoti Realty Management was in the business of owning and
operating a management company that managed the apartment complex.
Hoti filed for Chapter 11 bankruptcy protection on Oct. 12, 2010
(Bankr. S.D.N.Y. Case No. 10-24129). Hoti Enterprises estimated
its assets and debts at $10 million to $50 million.
A receiver of rents was appointed against Hoti Enterprises pre-
bankruptcy pursuant to a foreclosure proceeding commenced by GECMC
2007-C-1 Burnett Street, Hoti's mortgagee and largest secured
creditor.
No Official Committee of Unsecured Creditors has been appointed in
the case.
HOTI ENTERPRISES: Klinger Serves as Accountants
-----------------------------------------------
Judge Robert D. Drain has authorized Hoti Enterprises, L.P. and
Hoti Realty Management Co., Inc., to employ Klinger & Klinger,
LLP, as accountants. In their application, the Debtors said they
need Klinger & Klinger, LLP, to perform necessary accounting
services for the Debtors including, but not limited to,
preparation of schedules and preparation of operating reports and
other accounting information as is necessary for the successful
prosecution of the Debtors' Chapter 11 cases. Lee Klinger,
C.P.A., a member of Klinger, leads the engagement.
About Hoti Enterprises
Harrison, New York-based Hoti Enterprises, LP, is a single asset
real estate holding company that owns an apartment complex located
at 2801 Fillmore Avenue, 3001 Avenue R and 2719 Fillmore Avenue --
collectively, known as 1865 Burnett Street -- in Brooklyn, New
York. Hoti Realty Management was in the business of owning and
operating a management company that managed the apartment complex.
Hoti filed for Chapter 11 bankruptcy protection on Oct. 12, 2010
(Bankr. S.D.N.Y. Case No. 10-24129). Hoti Enterprises estimated
its assets and debts at $10 million to $50 million.
A receiver of rents was appointed against Hoti Enterprises pre-
bankruptcy pursuant to a foreclosure proceeding commenced by GECMC
2007-C-1 Burnett Street, Hoti's mortgagee and largest secured
creditor.
No Official Committee of Unsecured Creditors has been appointed in
the case.
HSAD 3949: Seeks Case Dismissal; $33T Available to Unsecureds
-------------------------------------------------------------
HSAD 3949 Lindell, Ltd., asks the Bankruptcy Court to dismiss its
Chapter 11 case.
The Debtor's First Amended Plan of Reorganization was set for
confirmation at a hearing on Dec. 13, 2010. Rather than
proceeding with the confirmation hearing, the Debtor entered into
a settlement agreement with its primary secured lender, GB St.
Louis 1, LLC, which was approved by the Court in January. The
accord became effective Feb. 8.
GB St. Louis is the assignee to certain of the Debtor's
construction loans from KeyBank N.A. and certain mezzanine loans
from Key Real Estate Equity Capital, Inc. As of the Petition
Date, the Debtor owed GB St. Louis not less than $24,616,443 under
the construction loans and $6,598,764 under the mezzanine debt.
GB St. Louis has sought for relief from the automatic stay to
exercise its rights under the construction loans. It has also
sued entities affiliated with the Debtor over guaranties with
respect to the loans. It also challenged the feasibility of the
Debtor's exit plan.
Pursuant to the deal, the Debtor agreed to convey its real
property to GB St. Louis and transferred $250,000 to affiliated
entity, Hepfner, Smith, Airhart & Day, Inc. On Feb. 28, 2011,
also pursuant to the accord, the Debtor transferred all cash
collateral to GB St. Louis with the exception of $33,943, which
remains held in the Debtor's account for distribution to unsecured
creditors.
The Agreement also requires the Debtor to seek dismissal of the
case.
The Court held a status conference on Feb. 14 whereby the Debtor
indicated it would withdraw the Plan.
The Debtor said it has taken all actions necessary to comply with
the GB St. Louis accord -- although it is still within a 90-day
compliance period within which it must use its best efforts to
obtain the issuance of tax increment financing notes from the city
of St. Louis.
GB St. Louis 1, LLC is represented by:
David M. Bennett, Esq.
Katharine E. Battaia, Esq.
THOMPSON & KNIGHT LLP
1722 Routh Street, Suite 1500
Dallas, TX 75201
Telephone: 214-969-1700
Facsimile: 214-969-1751
E-mail: David.Bennett@tklaw.com
Katie.Battaia@tklaw.com
About HSAD 3949 Lindell
HSAD 3949 Lindell, Ltd., is a Texas limited partnership with its
principal place of business located in Dallas. The Company's
general partner is HSAD 3949 Lindell GP, Inc., a Texas
Corporation. The Company owns a four-story luxury apartment
complex in St. Louis, Missouri.
The Company filed for Chapter 11 bankruptcy protection on June 1,
2010 (Bankr. N.D. Tex. Case No. 10-33986). Frank Jennings Wright,
Esq., at Wright Ginsberg Brusilow P.C., assists the Debtor in its
restructuring effort. The Company estimated its assets and debts
at $10 million to $50 million.
HSAD 3949: Court Approves Mutual Releases With KeyBank
------------------------------------------------------
Judge Barbara J. Houser approved a settlement agreement among HSAD
3949 Lindell, Ltd., KeyBank N.A., and Key Real Estate Equity
Capital, Inc.
The Debtor's affiliated entities -- Hepfner, Smith, Airhart & Day,
Inc., John W. Airhart, Christopher C. Smith, James P. Hepfner and
Thomas C. Day -- are also parties to the deal.
GB St. Louis is the assignee to certain of the Debtor's
construction loans from
KeyBank provided construction loans to the Debtor to fund its
apartment complex. KREEC also made mezzanine loans. Those loans
were later assigned to GB St. Louis. As of the Petition Date, the
Debtor owed GB St. Louis not less than $24,616,443 under the
construction loans and $6,598,764 under the mezzanine debt. GB
St. Louis has sought for relief from the automatic stay to
exercise its rights under the construction loans. It has also
sued entities affiliated with the Debtor over guaranties with
respect to the loans. It also challenged the feasibility of the
Debtor's exit plan.
Pursuant to the KeyBank accord, the parties agree to mutual
releases of all claims arising out of the project, the loans, the
affiliated entities' guaranties, and claims that were or could
have been asserted in the GB St. Louis lawsuit.
The Debtor has executed a separate settlement with GB St. Louis.
About HSAD 3949 Lindell
HSAD 3949 Lindell, Ltd., is a Texas limited partnership with its
principal place of business located in Dallas. The Company's
general partner is HSAD 3949 Lindell GP, Inc., a Texas
Corporation. The Company owns a four-story luxury apartment
complex in St. Louis, Missouri.
The Company filed for Chapter 11 bankruptcy protection on June 1,
2010 (Bankr. N.D. Tex. Case No. 10-33986). Frank Jennings Wright,
Esq., at Wright Ginsberg Brusilow P.C., assists the Debtor in its
restructuring effort. The Company estimated its assets and debts
at $10 million to $50 million.
IMS HEALTH: Moody's Assigns 'Ba3' Rating to $2 Bil. Amended Loan
----------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to the proposed
$2 billion amended term loan and $375 million amended revolver of
IMS Health Incorporated. Moody's also affirmed the B1 Corporate
Family Rating. The rating outlook is stable.
On January 14, 2011, IMS announced the pending acquisition of SDI
Health, Inc. The purchase price is $340 million and is subject to
a working capital adjustment. IMS expects to use the proceeds
from an upsized term loan, revolver borrowings and cash on hand to
fund the acquisition, which is subject to antitrust approval. The
amendment to the existing credit facility is expected to, among
other things, reduce the interest spread and LIBOR floor, extend
maturity dates, eliminate the interest coverage ratio, and relax
step-downs of the leverage ratio.
Moody's took these rating actions (LGD assessments revised):
* Assigned $2 billion secured term loan due 2017, Ba3 (LGD 3, 31%)
* Assigned $375 million secured revolving credit facility due
2016, Ba3 (LGD 3, 31%)
* Affirmed $275 million secured revolving credit facility expiring
2015, Ba3 (LGD 3, 31%) - rating to be withdrawn upon closing of
refinancing
* Affirmed $1.9 billion secured term loan due 2016, Ba3 (LGD 3,
31%) - rating to be withdrawn upon closing of refinancing
* Affirmed $1 billion senior unsecured notes due 2018, B3 (LGD 5,
85%)
* Affirmed Corporate Family Rating, B1
* Affirmed Probability of Default Rating, B1
Ratings Rationale
The B1 Corporate Family Rating is principally constrained by
revenue concentration with large branded pharmaceutical customers,
reliance on a group of large data suppliers, moderately high
leverage, and the potential for regulatory changes to limit
product and service offerings. The ratings are supported by the
company's leading market position in the pharmaceutical
intelligence sector, diverse product offerings, substantial
geographic diversity and improving revenues and Adjusted EBITDA in
2010.
Moody's views the proposed SDI acquisition favorably since it
expands the breadth of the company's service offerings and
provides for potentially significant cost synergies over the next
few years.
The stable rating outlook reflects Moody's expectation of a
moderate improvement in Adjusted EBITDA and relatively steady
financial strength metrics over the next year. Adjusted EBITDA
growth should benefit from further cost restructuring benefits and
modest organic revenue growth.
The ratings could be downgraded if Moody's come to expect debt
to EBITDA and free cash flow to debt to be sustained above 5.5
times or below 2%, respectively. Factors that could lead to a
weakening of credit metrics include (i) a significant decline in
profitability attributable to weak demand from customers, pricing
pressures or increasing data costs; (ii) a significant debt
financed acquisition or recapitalization; or (iii) an adverse
regulatory change that adversely affects the company's ability to
offer a substantial product offering.
The ratings could be upgraded if the company demonstrates
significant top line growth and improving credit metrics such that
Moody's come to expect debt to EBITDA and free cash flow to debt
to be sustained at less than 4.5 times and over 8%, respectively.
The last rating action on IMS was on January 28, 2010, when
Moody's assigned first time ratings to IMS in connection with its
pending leveraged buyout.
IMS Health Incorporated, headquartered in Norwalk Connecticut,
is a leading global provider of market intelligence to the
pharmaceutical and healthcare industries. The company is
controlled by affiliates of TPG Capital, L.P., CPP Investment
Board Private Holdings Inc. and Leonard Green & Partners, L.P.
IMS reported revenues of approximately $2.2 billion for the year
ended December 31, 2010.
INNKEEPERS USA: Wins Judge's OK for $1-Bil. Auction Proposal
------------------------------------------------------------
Bankruptcy Law360 reports that a New York judge put Innkeepers USA
Trust on track Friday to emerge from bankruptcy protection under
the control of creditors including a Lehman Brothers Holdings Inc.
affiliate in a deal valuing the bulk of the hotel investment
company at $970.7 million.
Five Mile-Lehman Plan
As reported in the Jan. 25, 2011 edition of the Troubled Company
Reporter, the Debtor filed a Chapter 11 plan based where Five Mile
Capital Partners and Lehman Ali Inc. will bankroll Innkeepers'
exit and turn the Company over to creditors, absent higher and
better offers.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the hearing began March 10, was adjourned, and was to
continue March 10.
According to Mr. Rochelle, Innkeepers hashed out a revised plan as
during the past two weeks with help from conferences with U.S.
Bankruptcy Judge Shelley C. Chapman. Mr. Rochelle relates that
the new reorganization plan, to be filed in April, is designed to
satisfy most objections from the creditors' committee and
preferred shareholders. Under the new proposal, as with the prior
version from January, Lehman Ali Inc. and Five Mile Capital
Partners LLC will acquire the new equity, assuming no better bid
appears at auction.
Mr. Rochelle relates the terms of the revised plan are:
* Lehman and Five Mile no longer will be buying seven hotel
properties. Those hotels will be dealt with through a
separate Chapter 11 plan.
* The preferred shareholders will be free to craft a separate
plan for the seven hotels that aren't subject to the blanket
mortgages that Lehman and Midland Loan Services Inc. have on
the 65 other properties. Preferred shareholders had objected
that the prior version of the plan would have forced them to
take $5.9 million cash in exchange for their shares. They
claimed that there was more equity in the seven hotels.
* As in January, Five Mile and Lehman Ali, a subsidiary of
Lehman Brothers Holdings Inc., together will provide
$174.1 million of equity capital and convert $200.3 million of
Lehman's debt into equity. Five Mile is the provider of
$53 million in secured financing for the Chapter 11 case, and
Lehman is the holder of $238 million in floating-rate
mortgages on 20 of Innkeepers' 72 properties.
* Midland, as servicer for $825 million of fixed-rate mortgage
debt on 45 properties, will emerge from Chapter 11 with
mortgages for $622.5 million on revised terms.
* As before, Lehman is to receive 50 percent of the new
equity plus $26.2 million cash in exchange for all its debt.
The secured loans for the Chapter 11 case will be paid in
full. For its equity contribution, Five Mile is to have the
other half of the new equity.
* Unsecured creditors previously were offered $2.5 million in
cash in return for voting in favor of the plan. To garner
their support, the pot was increased to $3.75 million so
unsecured creditors can recover as much as 65 percent. Secured
lenders' deficiency claims won't participate in the
distribution to unsecured creditors. Also, preference suits
against unsecured creditors will be waived.
* Apollo Investment Corp., Innkeepers' current owner, is to
receive releases of claims from the company and creditors in
return for supplying $375,000 of the pot for unsecured claims.
An auction will be held in about two months to test whether there
is a better offer for the 65 hotels. The change of ownership
after the auction would take place when a Chapter 11 plan is
confirmed for the properties. Innkeepers says the transaction for
the 65 hotels is valued at $971 million, including $622.5 million
in debt and $348.2 million of equity.
With Lehman and Midland, the plan is supported by holders of more
than $1 billion of $1.29 billion of pre-bankruptcy secured debt.
If someone else bids at auction, the offer must contain enough
cash so Lehman is paid at least $200.3 million in cash.
Any competing bid must be at least $363.2 million in cash, to take
advantage of the Midland financing and cover all the items in the
Lehman-Midland sponsored plan, plus an overbid.
About Innkeepers USA Trust
Innkeepers USA Trust is a self-administered Maryland real estate
investment trust with a primary business focus on acquiring
premium-branded upscale extended-stay, mid-priced limited service,
and select-service hotels.
Innkeepers, through its indirect subsidiaries, owns and operates
an expansive portfolio of 72 upscale and mid-priced extended-stay
and select-service hotels, consisting of approximately 10,000
rooms, located in 20 states across the United States.
Apollo Investment Corporation acquired Innkeepers in June 2007.
Innkeepers USA Trust and 91 affiliates filed for Chapter 11 on
July 19, 2010 (Bankr. S.D.N.Y. Case No. 10-13800). Paul M. Basta,
Esq., at Kirkland & Ellis LLP, in New York; Anup Sathy, P.C.,
Esq., Marc J. Carmel, Esq., at Kirkland & Ellis in Chicago; and
Daniel T. Donovan, Esq., at Kirkland & Ellis in Washington, DC,
serve as counsel to the Debtors. AlixPartners is the
restructuring advisor and Marc A. Beilinson is the chief
restructuring officer. Moelis & Company is the financial advisor.
Omni Management Group, LLC, is the claims and notice agent.
Attorneys at Morrison & Foerster, LLP, represent the Official
Committee of Unsecured Creditors.
The Company's consolidated assets for 2009 totaled approximately
$1.5 billion. As of July 19, 2010, the Company and its affiliates
have incurred approximately $1.29 billion of secured debt.
INTELSAT SA: Incurs $507.77 Million Net Loss in 2010
----------------------------------------------------
Intelsat S.A. filed its annual report with the U.S. Securities and
Exchange Commission reporting a net loss of $507.77 million on
$2.54 billion of revenue for the year ended Dec. 31, 2010,
compared with a net loss of $782.06 million on $2.51 billion of
revenue during the prior year.
The Company also reported a net loss of $115.07 million on $643.97
million of revenue for the three months ended Dec. 31, 2010,
compared with a net loss of $96.94 million on $620.82 million of
revenue for the same period during the prior year.
Intelsat CEO Dave McGlade stated, "Our fourth quarter 2010 revenue
growth of 4 percent capped a solid second half of 2010. Our
Government business grew 14 percent in the quarter and 16 percent
for 2010. Our Network Services and Media businesses were solid
despite the effects of the two satellite anomalies that occurred
in the first half of 2010. During the year, we increased and
improved capacity for future growth as new satellites entered
service, including Intelsat 14, Intelsat 16 and Intelsat 25, and
we built backlog through long-term agreements with strategic
accounts in each of our customer sets. Our contracted backlog
grew to $9.8 billion at Dec. 31, 2010, providing visibility and
stability of future cash flows."
The Company's balance sheet at Dec. 31, 2010 showed $17.59 billion
in total assets, $18.29 billion in total liabilities, and
$698.94 million in total Intelsat S.A shareholder's deficit.
A full-text copy of the annual report on Form 10-K is available
for free at http://ResearchArchives.com/t/s?74d6
About Intelsat
Intelsat S.A., formerly Intelsat, Ltd., provides fixed-satellite
communications services worldwide through a global communications
network of 54 satellites in orbit as of December 31, 2009, and
ground facilities related to the satellite operations and control,
and teleport services. It had $2.5 billion in revenue in 2009.
Luxembourg-based Intelsat S.A. carries 'B' issuer credit ratings
from Standard & Poor's. It has 'Caa1' corporate family and
probability of default ratings from Moody's Investors Service.
Washington D.C.-based Intelsat Corporation, formerly known as
PanAmSat Corporation, is a fully integrated subsidiary of Intelsat
S.A., its indirect parent. Intelsat Corp. had $7.70 billion in
assets against $4.86 billion in debts as of Dec. 31, 2010.
J&B HALDEMAN: Case Summary & 10 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: J&B Haldeman Holdings, LLC
19 Main Street
Black River Falls, WI 54615
Bankruptcy Case No.: 11-11386
Chapter 11 Petition Date: March 9, 2011
Court: United States Bankruptcy Court
Western District of Wisconsin (Eau Claire)
Judge: Thomas S. Utschig
Debtor's Counsel: Galen W. Pittman, Esq.
GALEN W. PITTMAN, S.C
300 N. 2nd Street, Suite 210
P.O. Box 668
La Crosse, WI 54602-0668
Tel: (608) 784-0841
E-mail: galenpittman@centurytel.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 10 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/wiwb11-11386.pdf
The petition was signed by James B. Haldeman, member.
JACKSON HEWITT: Says It May Pursue Prepack Chapter 11 Filing
------------------------------------------------------------
Jackson Hewitt Tax Service Inc. is in discussions with senior
secured lenders on a restructuring, which might be completed
through a prepackaged Chapter 11 filing, the Company said in a
regulatory filing.
As of Jan. 31, 2011, the Company had an aggregate of $362.3
million in borrowings outstanding under a Credit Agreement, which
requires mandatory payments of $30 million on April 30, 2011 and
the remaining balance at maturity on Oct. 6, 2011. As of Jan. 31,
2011, the Company had $76.5 million outstanding under the
$105 million revolving credit commitment. Interest expense for
the nine months ended January 31, 2011 included $15.3 million of
interest that was added to the principal balance of outstanding
borrowings under the Credit Agreement and will be paid at maturity
(paid-in-kind interest) in October 2011.
On April 30, 2010, the Company entered into a Fourth Amendment to
the Amended and Restated Credit Agreement due to the financial
impact on its business resulting from a lack of full availability
of RALs in all of the tax preparation offices in the Company's
network for the 2010 tax season. The amended credit facility
contains a number of events of default, including a default
related to the inability to have 100% coverage of RALs for the
2011 tax season.
On Dec. 17, 2010, the Company entered into a Fifth Amendment to
the Credit Agreement which amended and deleted certain events of
default related to the Company's RAL and assisted refund program,
including the requirement for 100% RAL coverage, and further
provided that the $105 million revolving commitments would remain
available through the maturity date of the Credit Agreement,
subject to an amended and increased availability block and
permitted net expenditure schedule. Additionally, the amendment
provided that, from April 4, 2011 through July 15, 2011, the
Lenders would be permitted to require the Company to repay term
loans up to an aggregate amount of $25 million, which is
incremental to the mandatory payment of $30 million due on April
30, 2011, at the direction of a supermajority of Lenders
representing two-thirds of the aggregate loans.
On Feb. 7, 2011, the Company entered into a Sixth Amendment to the
Credit Agreement, which amended the requirement to apply cash on
hand toward the reduction of certain outstanding loan amounts. It
allowed for such cash, subject to a modified level of maximum
expenditures, to be deposited in a cash collateral account that
would be the property of Jackson Hewitt. The Company will be able
to draw on the cash collateral account to meet its operational
needs following the tax season subject to limitations set out
under the agreement, as permitted under a budget to be agreed by
the Company and its Lenders, and provided that the Company is not
otherwise in default under the agreement.
The Company said in its Form 10-Q for the quarter ended Jan. 31,
2011, "The Lenders and the Company also agreed to use good faith
efforts to agree upon a mutually satisfactory plan for the
restructuring of the Company's balance sheet and go-forward
funding needs, which may include a "pre-packaged bankruptcy," and
to execute definitive documentation relating thereto, on or prior
to April 29, 2011. No assurance can be given with respect to the
value, if any, that would be available for stockholders in any
such restructuring. Failure to execute such definitive
documentation by April 29, 2011 would permit the Lenders to
trigger an event of default under the Credit Agreement and to
cease further funding."
The Company added, "If a default were declared and the amended
credit facility were terminated, or matured without renewal, there
can be no assurance that any debt or equity financing alternatives
will be available to the Company when needed or, if available at
all, on terms which are acceptable to the Company. As such, there
can be no assurance that the Company will have sufficient funding
to meet its obligations on an ongoing basis. In this event, the
Company will be required to consider restructuring alternatives
including, but not limited to, seeking protection from creditors
under bankruptcy laws."
About Jackson Hewitt
Jackson Hewitt Tax Service Inc. (NYSE: JTX)
-- http://www.jacksonhewitt.com/-- provides computerized
preparation of federal, state and local individual income tax
returns in the United States through a nationwide network of
franchised and company-owned offices operating under the brand
name Jackson Hewitt Tax Service(R). The Company provides its
customers with convenient, fast and quality tax return preparation
services and electronic filing. In connection with their tax
return preparation experience, the Company's customers may select
various financial products to suit their needs, including refund
anticipation loans ("RALs") in the offices where such financial
products are available.
Jackson Hewitt was incorporated in Delaware in February 2004 as
the parent corporation. Jackson Hewitt Inc. is a wholly-owned
subsidiary of Jackson Hewitt Tax Service Inc. Jackson Hewitt
Technology Services LLC is a wholly-owned subsidiary of JHI that
supports the technology needs of the Company. Company-owned
office operations are conducted by Tax Services of America, Inc.
("TSA"), which is a wholly-owned subsidiary of JHI. The Company
is based in Parsippany, New Jersey.
The Company's balance sheet at Jan. 31, 2011, showed
$388.57 million in total assets, $448.85 million in total
liabilities, and a stockholders' deficit of $56.27 million.
Jackson Hewitt reported a net loss of $33.18 million for the nine
months ended Jan. 31, 2011, versus a net loss of $320.34 million
in the nine months ended Sept. 30, 2010.
JAMES RIVER: Int'l Resource Deal Cues Moody's Rating Review
-----------------------------------------------------------
Moody's Investors Service placed the ratings of James River Coal
Company on review for possible upgrade following the company's
announcement that it has signed a definitive agreement to acquire
International Resource Partners and Logan & Kanawha Coal Company,
LLC, for $475 million in cash. The company has $375 million in
committed bridge financing and cash on hand to fund the cash
consideration to IRP and L&K stockholders. However, James River
has mentioned that it will consider long-term financing options
between signing and closing in place of the committed financing.
The review is prompted by the transformational nature of the
transaction and lack of final financing details currently.
Moody's believes the proposed transaction could significantly
increase James River's metallurgical coal production, diversify
its operations by adding two new mining complexes in Central
Appalachia, and provide greater access to export markets.
James River's asset base would rise to 36 mines (including 23
underground, 13 surface, and 4 high wall miner mines) across
8 mining complexes on a pro forma basis. Moody's estimates
production would immediately increase by 2 million tons (from
a 8.8 million tons in 2010), including over 1.2 million tons of
high-vol metallurgical coal. Moody's believes the metallurgical
tons could create significant margin opportunity over the
intermediate term given Moody's favorable view of the market.
In addition, the metallurgical production and acquired coal
brokerage business could increase customer diversity by providing
access to export markets.
The review will focus on operational prospects, capital
requirements, post-acquisition capitalization, and liquidity
position. Moody's will specifically assess expected operating
costs and investment requirements at acquired metallurgical coal
mines to determine the potential margin opportunity. The
magnitude of a positive action on the CFR likely could be limited
by the level of debt used to finance the acquisition and any
reduction in liquidity.
These ratings are placed under review for possible upgrade (LGD
assessments are subject to change):
-- Corporate Family Rating at Caa2
-- Probability of Default Rating at Caa2
-- $150 million 9.375% Sr Unsecured Notes due 2012 at Caa1 (LGD
3; 42%)
The last rating action was on May 27, 2010, when the ratings of
James River Coal Company were raised to Caa2 from Caa3.
Headquartered in Richmond, Virginia, James River Coal Company is
engaged in the mining and marketing of steam and industrial coal.
The company currently operates six mining complexes in Central
Appalachia and the Illinois Basin. Revenues were approximately
$701 million for 2010.
JETBLUE AIRWAYS: PRIMECAP Management Holds 5.04% Equity Stake
-------------------------------------------------------------
In a Schedule 13G filing with the U.S. Securities and Exchange
Commission, PRIMECAP Management Company disclosed that it
beneficially owns 14,848,410 shares of common stock of JetBlue
Airways Corp. representing 5.04% of the shares outstanding. The
number of shares outstanding of the Company's common stock as of
Jan. 31, 2011 was 294,752,749 shares.
About JetBlue Airways
JetBlue Airways Corp., based in Forest Hills, New York, operates a
low-cost, point-to-point airline from a hub in New York. JetBlue
serves 60 cities with 600 daily non-stop flights.
The Company's balance sheet at Dec. 31, 2010 showed $6.59 billion
in total assets, $4.94 billion in total liabilities, and
$1.65 billion in stockholders' equity.
* * *
JetBlue carries 'Caa1' long term corporate family and probability
of default ratings, with positive outlook, from Moody's. It has a
'B-' long term issuer default rating, with stable outlook, from
Fitch. It also has a 'B-' issuer credit ratings from Standard &
Poor's.
In November 2010, Standard & Poor's Ratings Services affirmed its
ratings, including its 'B-' corporate credit rating, on Forest
Hills, New York-based JetBlue Airways Corp. At the same time, S&P
revised its outlook on the rating to positive from stable. The
recovery rating on senior unsecured debt remains '6', indicating
S&P's expectations of a negligible (0%-10%) recovery in a default
scenario. S&P noted that while JetBlue has been profitable in six
of the last seven quarters, its financial profile remains highly
leveraged, with EBITDA interest coverage of 2.5x, funds flow to
debt of 15.7%, and debt to capital of 75.2%.
K-V PHARMACEUTICAL: Fulfills Obligation Under 2nd Amended RRA
-------------------------------------------------------------
K-V Pharmaceutical Company, certain of the Company's subsidiaries,
and each of U.S. Healthcare I, L.L.C. and U.S. Healthcare II,
L.L.C., are parties to a Credit and Guaranty Agreement, dated Nov.
17, 2010, as amended by that certain Amended and Restated
Amendment No. 1 to Credit Agreement dated as of Jan. 6, 2011, as
amended by that Amendment No. 2 to Credit Agreement dated as of
March 2, 2011. Pursuant to the Credit Agreement, at various times
prior to March 8, 2011 the Company has provided to the Lenders
certain information regarding the Company and its business,
including various consolidated financial projections and liquidity
forecasts and internal financial information and results. The
Company and the Lenders are also parties to that certain Second
Amended and Restated Registration Rights Agreement, dated as of
March 2, 2011, pursuant to which the Company has agreed to
register for resale under the Securities Act of 1933, as amended,
shares of the Company's Class A Common Stock which are issuable
upon the exercise of warrants issued by the Company to the Lenders
in connection with the Credit Agreement. Under the Second Amended
RRA, the Company is obligated under certain circumstances to
publicly disclose all of the previously publicly undisclosed
confidential information provided to the Lender or its affiliates
that, in the Company's reasonable judgment, constitutes material
non-public information.
The Company filed a Current Report on Form 8-K for the purpose of
fulfilling its obligation under the Second Amended RRA to disclose
the portions of the Provided Information that have not previously
been publicly disclosed and which the Company reasonably believes
constitute material non-public information.
A complete copy of the 8-K filing is available for free at:
http://ResearchArchives.com/t/s?74e3
About KV Pharmaceutical
KV Pharmaceutical Co., with headquarters in St. Louis, Missouri,
is a specialty pharmaceutical company that develops, manufactures
and markets innovative branded, quality generic/non-branded and
unique specialty ingredient products, utilizing proprietary drug
delivery technologies. In addition to its comprehensive research
& development and manufacturing processes, KV has broad marketing
and sales capabilities through its two wholly owned subsidiaries,
Ther-Rx Corporation, marketing branded products and ETHEX
Corporation, marketing generic/non-branded products.
At March 31, 2010, the Company's balance sheet showed
$358.6 million in total assets, $497.7 million in total
liabilities, and a stockholders' deficit of $139.1 million.
* * *
As reported in the Troubled Company Reporter on Jan. 3, 2011,
BDO USA, LLP, in Chicago, expressed substantial doubt about K-V
Pharmaceutical's ability to continue as a going concern, following
the Company's results for the fiscal year ended March 31, 2010.
The independent auditors noted that the Company has suspended the
shipment of all but one of the products manufactured by the
Company and must comply with a consent decree with the Food and
Drug Administration before approved products can be reintroduced
to the market.
The Company reported a net loss of $283.6 million on
$152.2 million of net revenues for fiscal 2010, compared to a net
loss of $313.6 million on $312.3 million of net revenue for fiscal
2009.
KAR AUCTION: S&P Raises Corporate Credit Rating to 'B+'
-------------------------------------------------------
Standard & Poor's Ratings Services said it has raised its
corporate credit rating on Carmel, Ind.-based KAR Auction
Services Inc. to 'B+' from 'B'. The outlook is stable. S&P
also raised the issue-level ratings on the company's debt.
"The upgrade reflects S&P's revised assessment of KAR's financial
risk profile as aggressive from highly leveraged," said Standard &
Poor's credit analyst Nancy Messer. KAR permanently reduced its
debt by nearly $400 million in 2010, using cash generated from
operations and cash on hand. Lease-adjusted leverage declined to
4.2x at year-end 2010 because of lower debt and increased EBITDA
from the 6.0x at year-end 2009. The company generated about
$240 million in cash after capital spending in 2010 on adjusted
EBITDA of $564 million, by S&P's calculations. For the rating,
S&P expects the company to generate positive cash flow after
capital expenditures and lease-adjusted leverage to decline
further to about 4.0x by year-end 2011.
The ratings on KAR reflect the still-heavy debt from its leveraged
buyout and merger in 2007 but also reflect a track record of
positive discretionary cash flow generation and a fair business
position. Notably, S&P assume the company's continuing focus on
cash flow generation and permanent debt reduction will allow it to
refinance during the next two years its $1.1 billion term loan B
that matures in October 2013.
The ratings also reflect S&P's assumptions that the company's
strategic and financial policies will remain consistent; that KAR
will use its free cash flow primarily to reduce debt; and that the
company will not make any meaningful changes in its business
strategies. S&P expects the company to pursue moderate-size
acquisitions to expand its market share as opportunities arise.
The track record of the current senior management team in
successfully improving operating efficiencies and reducing working
capital requirements in recent years was a positive factor in the
rating.
S&P continues to view the company's business risk profile as fair
because of KAR's established position in its whole-car and salvage
auction markets and its demonstrated profitability, which benefits
from its fee-based business model.
The stable outlook reflects S&P's opinion that KAR can generate
earnings and free cash flow during the year ahead because of its
relatively consistent business model and tight financial controls.
For the rating, S&P expects lease-adjusted debt to EBITDA to
decline to 4.0x or less by year-end 2011. For this to occur, S&P
estimates the company would need to generate reported EBITDA of at
least $500 million and use some excess cash to permanently reduce
debt.
S&P could lower the ratings if KAR's annualized free cash flow
turns meaningfully negative or if a shortfall in EBITDA in the
year ahead prevents expected deleveraging, leading to about 5.0x
lease-adjusted total debt to EBITDA. S&P could also lower the
ratings if aggressive debt-financed acquisition activity reduces
availability under the revolving credit facility or if financial
policies were to be altered, perhaps because of a material shift
in ownership.
S&P could raise the ratings if KAR's lease-adjusted leverage seems
poised to decline to 3.0x through a combination of cash flow
generation, permanent debt reduction, and improved EBITDA.
Achievement of 3.0x leverage would require further lease-adjusted
debt reduction of about $700 million, given the year-end 2010
EBITDA of $564 million, by S&P's adjusted calculation. S&P would
also need to conclude that any use of cash would be consistent
with its expectations for a higher rating and that the company's
ownership structure was moving even further toward public
ownership.
KE KAILANI: Taps Dubin Law Office as Bankruptcy Counsel
-------------------------------------------------------
Ke Kailani Development, LLC, is seeking permission from the
Bankruptcy Court to employ The Dubin Law Offices, a nine-member
law firm, to handle all legal matters pertaining to the Debtor's
Chapter 11 bankruptcy:
Gary Victor Dubin, Esq.
Andrew R. Tellio, Esq.
Frederick J. Arensmeyer, Esq.
DUBIN LAW OFFICES
55 Merchant Street, Suite 3100
Honolulu, HI 96813
Telephone: (808) 537-2300
Facsimile: (808) 537-7733
E-mail: gdublin@dubinlaw.net
atellio@dubinlaw.net
farensmeyer@dubinlaw.net
The Dubin Law Offices attests that the firm holds no interest
adverse to the Debtor and is disinterested as that term is defined
under Section 101(14) of the Bankruptcy Code. The firm was
counsel to Michael Fuchs, sole member of the Debtor. It withdrew
representation when the Debtor filed for Chapter 11 and the local
office of the United States Trustee raised questions about
potential conflicts of interest.
According to papers filed in court, the firm has negotiated for
the Debtor the terms of a restructuring that benefits the entire
estate, making it possible for all valid prepetition debts to be
paid. In particular, the firm negotiated for $50 million in new
refinancing and restructuring of the Debor that will establish a
$31.5 million fund to pay 100% of all valid secured and unsecured
claims. The firm also indicated that to facilitate the Debtor's
reorganization, Mr. Fuchs has agreed to transfer 95% of his
ownership interest in the Debtor to a new group.
The firm has represented the Debtor since September 2009 in
various actions, including a state foreclosure case involving the
Bank of Hawaii. That suit is presently on appeal.
The firm said Mr. Fuchs doesn't owe it nor any of its members
money. The firm also doesn't hold any money from Mr. Fuchs.
About Ke Kailani Development
Honolulu, Hawaii-based Ke Kailani Development, LLC, is a company
formed by ex-Home Box Office Chief Executive Michael Fuchs that
planned to develop a $100 million luxury home subdivision on the
Big Island. The Company sought Chapter 11 protection on January
5, 2011 (Bankr. D. Hawaii Case No. 11-00019). Gary Victor Dubin,
Esq., at Dublin Law Offices, in Honolulu, represents the Debtor.
The Debtor estimated assets and debts of $10,000,001 to
$50,000,000 in its Chapter 11 petition.
The bankruptcy filing listed an affiliate of Texas-based Hunt Cos.
as the largest creditor, at $22 million, The AP relates.
KE KAILANI: Court to Consider SARE Motion Today
-----------------------------------------------
The Bankruptcy Court will convene a hearing Monday to consider the
request of secured creditor Ke Kailani Partners, LLC, for a
determination that Ke Kailani Development LLC is a single asset
real estate debtor, subject to 11 U.S.C. Sec. 362(d)(3).
The Debtor is objecting the request. Ke Kailani Community
Association, Mauna Lani Resort Association, and The Association of
Villa Owners of Ke Kailani filed a joinder in support of the
request.
At a status hearing on Feb. 22, the Court directed the Debtor to
file a Disclosure Statement, Notice of Hearing, and Plan of
Reorganization by March 28.
The Debtor is also facing a motion by the secured creditor to lift
the automatic stay in the case. A scheduling conference has been
scheduled for March 17 in this matter.
According to papers filed in court, the Debtor's counsel indicated
it has negotiated for the Debtor the terms of a restructuring that
benefits the entire estate, making it possible for all valid
prepetition debts to be paid. In particular, the firm negotiated
for $50 million in new refinancing and restructuring of the Debor
that will establish a $31.5 million fund to pay 100% of all valid
secured and unsecured claims. The firm also indicated that to
facilitate the Debtor's reorganization, Michael Fuchs, sole member
of the Debtor, has agreed to transfer 95% of his ownership
interest in the Debtor to a new group.
About Ke Kailani Development
Honolulu, Hawaii-based Ke Kailani Development, LLC, is a company
formed by ex-Home Box Office Chief Executive Michael Fuchs that
planned to develop a $100 million luxury home subdivision on the
Big Island. The Company sought Chapter 11 protection on January
5, 2011 (Bankr. D. Hawaii Case No. 11-00019). Gary Victor Dubin,
Esq., at Dublin Law Offices, in Honolulu, represents the Debtor.
The Debtor estimated assets and debts of $10,000,001 to
$50,000,000 in its Chapter 11 petition.
The bankruptcy filing listed an affiliate of Texas-based Hunt Cos.
as the largest creditor, at $22 million, The AP relates.
KINETEK HOLDINGS: S&P Affirms 'CCC+' Corporate Credit Rating
------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'CCC+' CCR on
Deerfield, Ill.-based Kinetek Holdings Corp. and revised the
outlook to stable from negative. At the same time, S&P upgraded
S&P's issue-level rating on Kinetek's $220 million first-lien
senior secured term loan due 2013 to 'B-' from 'D' (one notch
above the CCR). The recovery rating remains unchanged at '2'.
S&P is also upgrading its issue-level rating on Kinetek's
$95 million second-lien term loan due 2014 to 'CCC' from 'D'
(one notch below the CCR). The recovery rating remains unchanged
at '5'.
"The CCR affirmation and issue-ratings upgrades reflect S&P's view
that, amid improving operating and financial performance trends,
the potential of continued repurchase of debt below par levels,
which S&P has consider distressed, is becoming less likely," said
Standard & Poor's credit analyst Peter kelly. "However, S&P
believes that the tightening of Kinetek's financial covenants this
year will require sustained improvement in performance, and S&P
remain concerned that a substantial portion of the company's
excess cash reserves results from its partially drawn revolver,
which matures in about 18 months."
The ratings on Kinetek reflect the company's highly leveraged
financial risk profile and its weak liquidity position, which more
than offset a recent trend of improving business and financial
performance. S&P expects reasonably good growth in revenues in
2011 along with favorable end-market demand, but S&P believes that
increasing input costs could limit profit growth. S&P believes
credit measures could continue to improve gradually, but liquidity
will likely remain weak, in S&P's view, until covenant headroom
improves more significantly, revolver borrowings decrease, or
sustained operating and leverage improvement further reduces
refinancing risks. Despite Kinetek's well-established positions
in several niche markets and its low-cost manufacturing
capabilities, S&P characterize the company's business profile as
weak.
The outlook is stable. The company's operating and financial
performance has improved in recent quarters, but S&P believes that
continued improvement will be required for Kinetek to further
strengthen its liquidity position. "S&P believes its repurchase
of debt below par levels has become less likely and expect that
the company could use some of its available excess cash to reduce
debt and maintain compliance over its tightening financial
covenants," Mr. Kelly continued. "S&P could raise the ratings if
the company further strengthens its liquidity by maintaining
adequate covenant headroom and reducing revolver borrowings ahead
of the facility's maturity. On the other hand, S&P could lower
the ratings if Kinetek violates its covenants and the likelihood
of obtaining a satisfactory cure is low, or if the company's
refinancing risk increases."
KL ENERGY: Thomas Schueller Resigns as Board Chairman
-----------------------------------------------------
Effective March 4, 2011, Thomas Schueller resigned as Chairman of
the Board but remains as a Director and has assumed the
responsibilities as Director of Corporate Affairs. Mr. Alan Rae,
a Director of the Company since 2008, was appointed as the new
Chairman of the Board.
About KL Energy Corporation
Based in Rapid City, South Dakota, KL Energy Corporation
-- http://www.klenergycorp.com/-- formerly known as Revive-it
Corp., focuses on developing unique technical and operational
capabilities designed to enable the production and
commercialization of biofuel, in particular ethanol from
cellulosic biomass. The Company also plans to provide contracted
engineering and project development services to third party
customers.
The Company's balance sheet as of Sept. 30, 2010, showed
$4.68 million in total assets, $8.19 million in total liabilities,
and a stockholders' deficit of $3.51 million.
As reported in the Troubled Company Reporter on March 11, 2010,
Ehrhardt Keefe Steiner & Hottman PC, in Denver, expressed
substantial doubt about the Company's ability to continue as a
going concern, following the Company's 2009 results. The
independent auditors noted of the Company's recurring losses and
accumulated deficit of $9.27 million as of December 31, 2009.
LODGENET INTERACTIVE: Wants to Extend Credit Facility Beyond 2014
-----------------------------------------------------------------
LodgeNet Interactive Corporation seeks to amend its existing
Credit Facility. The proposed amendment will modify certain terms
of the existing Credit Facility, including an increase in the
permitted leverage under the Facility, the creation of a specific
preferred stock dividend payment basket, and the potential to
extend the term of the Credit Facility beyond its current
expiration in April, 2014. The proposed amendment will also
reduce the commitments under the Company's Revolving Credit
Facility, increase the interest rate and required amortization
under the Facility and adjust other covenants. The Company is and
has remained in full compliance with all of its Credit Facility
covenants since obtaining the Credit Facility in April 2007.
"We have proactively managed our business through the recession by
diversifying our revenue base, significantly increasing our free
cash flow and decreasing our outstanding debt by more than one-
third over the past two years," said Scott C. Petersen, chairman
and CEO. "As we enter 2011, we are experiencing strong interest
in our High Definition interactive television systems and, in
particular, our next generation Envision platform. These systems
provide state of the art media services to our hotel partners and
strong financial returns to LodgeNet. Therefore, we believe it is
in the best interest of both our debt and equity investors to
increase our flexibility to invest more of our operating cash flow
into the rollout of our HD platform and other growth initiatives
at our best hotels throughout North America. In addition, the
creation of a specific dividend basket will allow LodgeNet to
continue to pay quarterly dividends on our Series B Preferred
shares."
About LodgeNet Interactive
Sioux Falls, South Dakota-based LodgeNet Interactive Corporation
(Nasdaq:LNET), formerly LodgeNet Entertainment Corp. --
http://www.lodgenet.com/-- provides media and connectivity
solutions designed to meet the unique needs of hospitality,
healthcare and other guest-based businesses. LodgeNet Interactive
serves more than 1.9 million hotel rooms worldwide in addition to
healthcare facilities throughout the United States. The Company's
services include: Interactive Television Solutions, Broadband
Internet Solutions, Content Solutions, Professional Solutions and
Advertising Media Solutions. LodgeNet Interactive Corporation
owns and operates businesses under the industry leading brands:
LodgeNet, LodgeNetRX, and The Hotel Networks.
The Company's balance sheet at Sept. 30, 2010, showed
$454.88 million in total assets, $509.32 million in total
liabilities, and a stockholders' deficit of $54.44 million.
* * *
Lodgenet carries a 'B3' long term corporate family rating and a
'Caa1' probability of default rating, with 'stable' outlook, from
Moody's. It has 'B' long term foreign and local issuer credit
ratings, with 'stable' outlook, from Standard & Poor's.
"In Moody's opinion, continued cautious investment from LodgeNet's
hotel customers will hamper intermediate term growth in its core
hospitality services business, and over the long term competing
forms of entertainment will pressure this revenue stream as the
company seeks to defend its relevance to both hotel operators and
hotel guests. The B3 corporate family rating incorporates these
weak growth prospects, mitigated somewhat by the company's
moderately high financial risk profile and demonstrated capacity
to generate positive free cash flow throughout challenging
economic conditions, along with a measure of stability from the
monthly fees it receives from hotels regardless of occupancy,"
Moody's said in October 2010.
LTV STEEL: High Court Rejects National Union's Admin. Claim
-----------------------------------------------------------
WestLaw reports that claimed expenses which had not yet been
realized, but which the insurer that provided workers'
compensation insurance to the Chapter 11 debtors postpetition
would inevitably incur in connection with the policies in effect
during the bankruptcy, were not "actual" expenses, as required to
support the insurer's claim for administrative expense priority,
the Sixth Circuit previously ruled in a case in which the United
States Supreme Court has now denied certiorari. The Bankruptcy
Code provides that administrative expenses, that is, "the actual,
necessary costs and expenses of preserving the estate," are
generally entitled to priority over prepetition unsecured claims.
Here, even though the estate had a contractual obligation to
reimburse the insurer for these anticipated payments, and even
though an arbitration panel had determined the value of the
insurer's claim, given the ongoing nature of the employees'
claims, the insurer's claimed expenses would not be "actual" until
the insurer made payment and sought reimbursement from the estate,
the Court of Appeals reasoned, adding that this could occur years
post-confirmation.
A concurring opinion questioned Sixth Circuit precedent holding
that post-confirmation claims for deductible reimbursements by an
insurance company fail to qualify as actual and necessary expenses
that benefit the estate, and thus cannot attain administrative
expense priority as a matter of law, and urged en banc review of
the application of that rule to the present case.
The question presented in the insurer's petition for a writ of
certiorari asked whether a Chapter 11 debtor is obligated to pay
in full as an administrative expense the cost of necessary
insurance that it purchases during the course of its Chapter 11
case. The case is National Union Fire Ins. Co. v. VP Bldgs.,
Inc., 606 F.3d 835, slip op. http://is.gd/jM6xhy(9th Cir. 2010).
National Union Fire Ins. Co. v. VP Bldgs., Inc., --- S.Ct. ----
(Mem), 2011 WL 767658, 79 USLW 3361 (U.S.).
MAJESTIC STAR: Receives Confirmation of Plan of Reorganization
--------------------------------------------------------------
The Majestic Star Casino, LLC and certain of its subsidiaries and
affiliates have received confirmation of their Second Amended
Joint Plan of Reorganization from the United States Bankruptcy
Court for the District of Delaware. Confirmation of the Plan was
supported by the Company's primary creditor constituencies. The
Court's ruling and entry of a confirmation order following a
hearing held on March 10, 2011 allows Majestic Star to implement a
capital restructuring that reduces the Company's long-term debt
from approximately $735 million to approximately $160 million.
"While the Company still has some important steps to take before
it officially emerges from Chapter 11, this is a significant
milestone for Majestic Star," said Don H. Barden, the Company's
Chairman, President and Chief Executive Officer. "The Court's
approval of the Company's capital restructuring means the Company
will have a strengthened balance sheet that allows it to compete
more effectively in its respective markets. Now that the
financial restructuring has been approved, we will continue to
focus on marketing and operations with the continued goal of
enhancing the Company's performance and profitability."
The Company will work towards meeting the conditions of the Plan,
including obtaining the necessary gaming regulatory approvals in
the various jurisdictions where the Company operates, at which
time the Plan will become effective and the Company will emerge
from Chapter 11. Until that time, Majestic Star will continue to
manage its businesses and operate its casinos in the ordinary
course just as it has during the course of the Chapter 11 cases.
"Our ability to achieve this capital restructuring with minimal
impact on our employees, customers and suppliers is a testament to
the outstanding effort put forth by the senior management team,
all of our employees, our Board of Directors, our creditors and
our restructuring advisors," said Mike Darley, the Company's
Executive Vice President and Chief Operating Officer. "On behalf
of the Board and management, we are grateful for everyone's
efforts. I also would like to thank our customers and suppliers
for their support and understanding during the Chapter 11
process."
Under the Plan, upon its emergence, Majestic Star will have access
to a new $58 million senior secured credit facility which, along
with cash on hand and cash generated through its various casinos,
is expected to provide sufficient liquidity to allow the Company
to meet its ongoing business obligations and reinvest in its
casino operations.
Consensual Plan
Bill Rochelle, Bloomberg News' bankruptcy columnist, reports that
judge's job in confirming the plan was made easy because all
objections were resolved.
Mr. Rochelle relates that the plan gives senior secured credit
facility lenders, owed $65.3 million, full payment by receiving
some cash and rolling over remaining debt. If new financing is
available, the existing facility will be paid in cash. Holders of
$348.4 million in senior secured notes are to have a 52% recovery
by receiving 58% of the new equity and $100.6 million in cash. If
new financing isn't available, noteholders will receive new debt
instead of cash. Holders of the senior notes will receive 42% of
the new equity for about $233 million in debt, resulting in a 25%
recovery. General unsecured creditors will see 25% in cash or a
share in $1 million, whichever is less. Holders of $72.6 million
in discount notes receive nothing.
About Majestic Star
The Majestic Star Casino, LLC -- aka Majestic Star Casino, aka
Majestic Star -- is based in Las Vegas, Nev., and is a wholly
owned subsidiary of Majestic Holdco, LLC, which is a wholly owned
subsidiary of Barden Development, Inc. The Company was formed on
December 8, 1993, as an Indiana limited liability company to
provide gaming and related entertainment to the public. The
Company commenced gaming operations in the City of Gary at
Buffington Harbor, located in Lake County, Inc., on June 7, 1996.
The Company is a multi-jurisdictional gaming company with
operations in three states -- Indiana, Mississippi and Colorado.
The Company sought Chapter 11 bankruptcy protection (Bankr. D.
Del. Case No. 09-14136) on Nov. 23, 2009. The Company's
affiliates -- The Majestic Star Casino II, Inc., The Majestic Star
Casino Capital Corp., Majestic Star Casino Capital Corp. II,
Barden Mississippi Gaming, LLC, Barden Colorado Gaming, LLC,
Majestic Holdco, LLC, and Majestic Star Holdco, Inc. -- filed
separate Chapter 11 petitions.
The Majestic Star Casino's balance sheet at June 30, 2009,
showed total assets of $406.42 million and total liabilities of
$749.55 million.
Kirkland & Ellis LLP is the Debtors' bankruptcy counsel. James E.
O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns,
Esq., at Pachulski Stang Ziehl & Jones LLP, are the Debtors'
Delaware counsel. XRoads Solutions Group, LLC, is the Debtors'
financial advisor, while EPIQ Bankruptcy Solutions LLC serves as
the Debtors' claims and notice agent.
Michael S. Stamer, Esq., and Alexis Freeman, Esq., at Akin Gump
Strauss Hauer & Feld LLP, in New York, and Bonnie Glantz Fatell,
Esq., and David W. Carickhoff, Esq., at Blank Rome LLP, in
Wilmington, Delaware, represent the Official Committee of
Unsecured Creditors.
MEDICOR LTD: Atty. Says UBS Touted Fraudulent Medicore Investments
------------------------------------------------------------------
Bankruptcy Law360 reports that UBS AG knew that Medicor Ltd. was
being propped up with fraudulent investments by its chairman even
as it touted those same investments to a private equity firm, an
attorney told a New York appeals court Thursday.
According to Law360, Medicor Chairman Donald K. McGhan was
operating a Ponzi scheme and funneling the ill-gotten funds into
Medicor, Mark Landau of Kaplan Landau LLP, an attorney for Silver
Oak Capital LLC, said.
About Medicor Ltd.
Headquartered in North Las Vegas, Nevada, MediCor Ltd. --
http://www.medicorltd.com/-- manufactures and markets products
primarily for aesthetic, plastic and reconstructive surgery and
dermatology markets.
The Company and seven of its affiliates filed for Chapter 11
protection on June 29, 2007 (Bankr. D. Del. Lead Case No. 07-
10877) to effectuate the orderly marketing and sale of their
business. Dennis A. Meloro, Esq., and Victoria Watson Counihan,
Esq., at Greenberg Traurig, LLP, represent the Debtors' as
Delaware counsel. The Debtors engaged Alvarez & Marsal North
America, LLC as their restructuring advisor. David W. Carickhoff,
Jr., Esq., at Blank Rome LLP represents the Official Committee of
Unsecured Creditors as counsel. In its schedules of assets and
debts, MediCor Ltd. disclosed total assets of $96,553,019, and
total debts of $158,137,507.
MediCor completed the sale of the assets in May 2008. The net
proceeds from the sale were approximately $45.5 million at the
time.
MEG ENERGY: Moody's Assigns 'B3' Rating to $500 Mil. Notes
----------------------------------------------------------
Moody's Investors Service assigned a B3 rating to MEG Energy
Corp.'s proposed $500 million senior unsecured notes issue and
raised the rating to Ba3 from B1 on both the $1 billion first
secured bank term loan and the $500 million first secured bank
revolver, which is being increased from $200 million. MEG's B1
Corporate Family Rating and B1 Probability of Default Rating were
affirmed. The company's Speculative Grade Liquidity rating
remains SGL-1. The rating outlook is stable. The proceeds of the
notes issue will be used to bolster the company's cash liquidity
and for general corporate purposes.
Ratings Rationale
MEG's B1 CFR reflects its production of approximately 27,000
barrels per day of bitumen and favorable Steam Oil Ratio of
approximately 2.4, as well as the company's significant cash
position, which along with anticipated cash flow should enable
MEG to substantially construct and commission Phase 2B of the
company's Christina Lake oil sands property, a 35,000 barrels
per day expansion. Phase 2B has an estimated capital cost of
C$1.4 billion, of which about C$200 million has been spent through
2010. The rating also considers MEG's substantial reserves and
land position in key productive areas of the Athabasca Oil Sands
region, as well as 50% ownership of the Access pipeline. However,
the rating also considers a high debt level, the execution risk of
constructing and ramping up Phase 2B to targeted levels through
2014, MEG's still relatively small production base, and associated
operating risks.
The SGL1 speculative grade liquidity rating reflects MEG's
excellent liquidity. Pro forma for the notes issue MEG should
have approximately C$1.8 billion of cash and short term
investments on hand. MEG will also have a $500 million revolving
credit facility, maturing in 2016, which is undrawn. MEG will
have ample cash on hand and cash flow over the next 12 months to
cover both sustaining and growth capital as it develops the Phase
2B expansion.
The stable outlook considers MEG's successful achievement
of production in excess of design capacity at Phases 1 and
2, it's large cash position and 100% ownership of a large
base of long-lived bitumen reserves. The rating could be
considered for upgrade if Phases 1 and 2 continue to produce
in the range of 25,000 bbls/day and Phase 2B advances toward
targeted production at anticipated costs and timeline. The
ratings could be downgraded if it becomes apparent that MEG is
unable to maintain current production levels, if the operating
economics of production deteriorate materially, or if Phase 2B
construction runs considerably over budget or requires significant
additional debt to complete.
MEG is a Calgary, Alberta-based publicly-held oil sands operating
and project development company.
MIRACLE HOSTINGS: Case Summary & 5 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Miracle Hostings, LLC
dba Rustic Inn
3009 Linwood Drive
Paragould, AR 72450
Bankruptcy Case No.: 11-11503
Chapter 11 Petition Date: March 9, 2011
Court: United States Bankruptcy Court
Eastern District of Arkansas (Jonesboro)
Judge: Audrey R. Evans
Debtor's Counsel: James F. Dowden, Esq.
JAMES F. DOWDEN, P.A.
212 Center Street, 10th Floor
Little Rock, AR 72201
Tel: (501) 324-4700
Fax: (501) 374-5463
E-mail: jfdowden@swbell.net
Scheduled Assets: $2,114,500
Scheduled Debts: $2,166,498
A list of the Company's five largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/areb11-11503.pdf
The petition was signed by David L. Watson, managing member.
MIRAMAR REAL ESTATE: Section 341(a) Meeting Scheduled for April 11
------------------------------------------------------------------
The U.S. Trustee for Region 21 will convene a meeting of Miramar
Real Estate Management Inc.'s creditors on April 11, 2011, at 9:00
a.m. The meeting will be held at 341 Meeting Room, Ochoa
Building, 500 Tanca Street, First Floor, San Juan, Puerto Rico.
This is the first meeting of creditors required under Section
341(a) of the U.S. Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
San Juan, Puerto Rico-based Miramar Real Estate Management Inc.
filed for Chapter 11 bankruptcy protection on March 2, 2011
(Bankr. D. P.R. Case No. 11-01786). Fausto D. Godreau Zayas,
Esq., at Latimer, Biaggi, Rachid & Godreau, LLP, serves as the
Debtor's bankruptcy counsel. The Debtor estimated its assets and
debts at $100 million to $500 million.
MIRAMAR REAL ESTATE: Taps Latimer Biaggi as Bankruptcy Counsel
--------------------------------------------------------------
Miramar Real Estate Management, Inc., asks for authorization from
the U.S. Bankruptcy Court for the District of Puerto Rico to
employ the law firm of Latimer, Biaggi, Rachid & Godreau as
bankruptcy counsel.
Latimer Biaggi will:
a. give the Debtor legal advice with respect to the Debtor's
Chapter 11 case;
b. represent the Debtor in any adversary proceeding, index or
contested matters filed by or against Debtor; and
c. represent or advise the Debtor in any other matter
requested by it.
Latimer Biaggi will be paid based on the hourly rates of its
professionals:
Patners $175
Associates $125
F. David Godreau Zayas, Esq., a member at Latimer Biaggi, assures
the Court that the firm is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code.
San Juan, Puerto Rico-based Miramar Real Estate Management Inc.
filed for Chapter 11 bankruptcy protection on March 2, 2011
(Bankr. D. P.R. Case No. 11-01786). The Debtor estimated its
assets and debts at $100 million to $500 million.
MONTGOMERY WARD: Third Circuit Loosens Res Judicata Rules
---------------------------------------------------------
Bill Rochelle, Bloomberg News' bankruptcy columnist, reports that
the U.S. Court of Appeals in Philadelphia decided a case on
March 9 announcing principles governing when a trustee or a debtor
is bound after a bankruptcy filing by prior judicial rulings
involving the bankrupt company.
Mr. Rochelle relates that the case involved Montgomery Ward and
its two bankruptcies, the most recent a liquidation that began in
2000. The dispute involved a question of whether the
administrator of the liquidating plan in the second case was bound
under the principles of res judicata by rulings in the first
bankruptcy.
According to Mr. Rochelle, the 3rd Circuit in Philadelphia
explained that res judicata prevents a party from relitigating a
claim if there previously was a final judgment on the merits
between the same parties "or their privies."
The case is In re Montgomery Ward LLC, 09-1735, U.S. 3rd
Circuit Court of Appeals (Philadelphia).
A copy of the Third Circuit's ruling is available at
http://is.gd/dujCvhfrom Leagle.com.
Montgomery Ward operated hundreds of retail department stores
throughout the nation for more than a century. On July 7, 1997,
it filed a petition under chapter 11 of the Bankruptcy Code in the
U.S. Bankruptcy Court for the District of Delaware. A plan of
reorganization was confirmed on July 25, 1999, and Montgomery Ward
emerged as a wholly-owned subsidiary of GE Capital Corp. Its
business plan called for increased sales and a store-remodeling
program to attract the modern consumer. Financing was arranged
through loans from major banks as well as equity, debt and credit
enhancements by GE Capital. The reorganization did not meet GE
Capital's expectations. Following its second disappointing
Christmas season after reorganization, Montgomery Ward filed for
bankruptcy a second time on December 28, 2000 (Bankr.D. Del. Case
No. 00-4667). The Debtor immediately announced its plan to
liquidate and set out to do just that. A plan of liquidation
proposed by the Creditors Committee was confirmed on August 6,
2002. A Plan Administrator, John L. Palmer, controlled the estate
after following the effective date of the Plan.
MSCI INC: S&P Affirms Corporate Credit Rating at 'BB'
-----------------------------------------------------
Standard & Poor's Ratings Services said that it affirmed its 'BB'
corporate credit rating on New York City-based MSCI Inc. S&P
revised the outlook to stable, from negative.
At the same time, S&P assigned its preliminary 'BB+' issue rating
to MSCI's amended $1.125 billion term loan B due 2017. S&P still
rates the existing $100 million revolving credit facility due 2015
'BB+'. The preliminary '2' recovery rating on the debt indicates
S&P's expectations for a substantial (70%-90%) recovery for
lenders in the event of a payment default.
"The ratings on MSCI reflect consistent profitability through the
financial industry downturn, good free cash flow, and S&P's
expectation that continued integration of RiskMetrics will result
in positive operating momentum," said Standard & Poor's credit
analyst Andrew Chang. These factors partially offset what S&P
considers an aggressive growth strategy and the resultant
temporary spikes in leverage.
MSCI is a provider of investment decision support tools, including
indices, portfolio risk and performance analytics, and corporate
governance products and services. Major products include global
equity indices marketed under MSCI brand and risk and portfolio
management analytics sold under RiskMetrics and Barra brands.
Acquisition of RiskMetrics in 2010 added risk management and
governance capabilities and somewhat diversified its product
portfolio. MSCI's asset-based fee revenues, which are part of the
index products, are based on the clients' assets under management
linked to MSCI indices and are growing rapidly from a small base.
MWM CARVER: Asks for Court OK to Use Fannie Mae's Cash Collateral
-----------------------------------------------------------------
MWM Carver Terrace, LLC, seeks authority from the U.S. Bankruptcy
Court for the District of Columbia to use, until December 2011,
the cash collateral of Federal National Mortgage Association.
Fannie Mae has not consented to the use of cash collateral.
A loan for the purchase of the Debtor's residential apartment
building was provided by Citibank pursuant to a certain a fixed
rate promissory note, in the original principal amount of
$9.60 million, which is secured by a first position lien and
security interest in the Property pursuant to a Deed of Trust,
Assignment of Rents, Security Agreement and Fixture Filing dated
Aug. 31, 2007, and duly recorded among the land records of the
District of Columbia. On Dec. 18, 2007, Citibank assigned all of
its right, title and interest in and to the Note, the security
instrument and the assignment of rents to Fannie Mae. As of
Nov. 30, 2010, after Fannie Mae accelerated the Loan, it asserted
that in excess of $8.3 million was owed by the Debtor.
Brent C. Strickland, Esq., at Whiteford, Taylor & Preston L.L.P.,
explains that the Debtor needs the money to fund its Chapter 11
case, pay suppliers and other parties. The Debtor will use the
collateral pursuant to a budget, a copy of which is available for
free at http://bankrupt.com/misc/MWM_budget.pdf
In exchange for using the cash collateral, the Debtor proposes to
grant Fannie Mae: (i) a replacement lien on all the postpetition
assets of the Debtor to the extent of diminution in the value of
Fannie Mae's interest in cash collateral; and (ii) an
administrative priority expense claim to the extent there is a
diminution in the value of Fannie Mae's interest in cash
collateral.
Washington, DC-based MWM Carver Terrace, LLC, owns a 407-unit
residential apartment building located at 2026 Maryland Avenue NE,
Washington D.C. 20002. It filed for Chapter 11 bankruptcy
protection on March 3, 2011 (Bankr. D. Colo. Case No. 11-00168).
Brent C. Strickland, Esq., at Whiteford, Taylor, & Preston L.L.P.,
serves as the Debtor's bankruptcy counsel. The Debtor estimated
its assets at $10 million to $50 million and debts at $1 million
to $10 million.
MWM CARVER: Section 341(a) Meeting Scheduled for April 11
---------------------------------------------------------
The U.S. Trustee for Region 4 will convene a meeting of MWM Carver
Terrace, LLC's creditors on April 11, 2011, at 2:00 p.m. The
meeting will be held at 333 Constitution Avenue, N.W., Room 1207,
First Floor, Washington, DC 20001.
This is the first meeting of creditors required under Section
341(a) of the U.S. Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Washington, DC-based MWM Carver Terrace, LLC, owns a 407-unit
residential apartment building located at 2026 Maryland Avenue NE,
Washington D.C. 20002. It filed for Chapter 11 bankruptcy
protection on March 3, 2011 (Bankr. D. Colo. Case No. 11-00168).
Brent C. Strickland, Esq., at Whiteford, Taylor, & Preston L.L.P.,
serves as the Debtor's bankruptcy counsel. The Debtor estimated
its assets at $10 million to $50 million and debts at $1 million
to $10 million.
MWM CARVER: Taps Whiteford Taylor as Bankruptcy Counsel
-------------------------------------------------------
MWM Carver Terrace, LLC, asks for authorization from the U.S.
Bankruptcy Court for the District of Columbia to employ Whiteford,
Taylor & Preston L.L.P., as bankruptcy counsel.
WT&P will assist the Debtor with, among other things, the
preparation of documents and pleadings, and with the prosecution
of the Debtor's Chapter 11 cases, including all matters necessary
or appropriate to achieve a successful result in Chapter 11.
WT&P will be paid based on the hourly rates of its professionals:
Partners $400-$610
Associates $280-$440
Paralegals $140-$260
Brent C. Strickland, Esq., a partner at WT&P, assures the Court
that the firm is a "disinterested person" within the meaning of
Section 101(14) of the Bankruptcy Code.
Washington, DC-based MWM Carver Terrace, LLC, owns a 407-unit
residential apartment building located at 2026 Maryland Avenue NE,
Washington D.C. 20002. It filed for Chapter 11 bankruptcy
protection on March 3, 2011 (Bankr. D. Colo. Case No. 11-00168).
The Debtor estimated its assets at $10 million to $50 million and
debts at $1 million to $10 million.
NEW STREAM: Says Involuntaries Filed in 'Bad Faith'
---------------------------------------------------
Dow Jones' DBR Small Cap and Bill Rochelle, Bloomberg News'
bankruptcy columnist, reported that three funds managed by New
Stream Capital LLC responded to investors who filed involuntary
Chapter 11 petitions on March 7.
Mr. Rochelle relates that the funds filed papers on March 9 saying
that the investors' request for expedited discovery is a "pure
litigation tactic" taken "in bad faith." They characterized
the investors as "recalcitrant creditors" bent on obtaining a
"head start" in opposition to the funds' forthcoming prepackaged
Chapter 11 reorganization.
Before the involuntary petitions were filed, the funds were
soliciting acceptances for a prepackaged Chapter 11 plan. As
reported in the March 11 edition of the Troubled Company Reporter,
New Stream Capital, LLC's investors overwhelmingly approved its
plan of reorganization of New Stream Secured Capital, LP (NSSC),
one of the funds for which NSC is a general partner, and certain
of their affiliates. Voting on the plan concluded on March 8,
2011.
The bankruptcy court in Delaware will hold a March 15 hearing on
the investors' motion for expedited discovery.
Investors who pumped $90 million into the Connecticut hedge fund
group filed involuntary Chapter 11 petitions against New Stream's
Cayman and U.S. feeder funds in a bid to "stop the fraud being
perpetuated by New Stream" while it restructures, according to
DBR.
New Stream, according to DBR, has deemed the involuntary
bankruptcy filings a "pure litigation tactic" grounded upon
"blatant misrepresentations and falsehoods" and undertaken in bad
faith, the report notes.
"The motion is an attempt by a small group of recalcitrant
creditors of the involuntary debtors to obtain a head start on
their promised opposition to New Stream's prepackaged Chapter 11
plan," New Stream said in court papers, DBR adds.
About New Stream
New Stream Capital, LLC, is a private investment manager focused
on providing non-traded private debt to the insurance, real estate
and commercial finance sectors. It was founded in 2002 and is
headquartered in Ridgefield, Connecticut.
Creditors of New Stream Secured Capital Fund (U.S.) LLC filed a
petition (Bankr. D. Del. Case No. 11-10690) seeking to force the
fund into involuntary bankruptcy, saying the fund owes $320
million to U.S. and Cayman creditors.
The petitioning investors in the New Stream investment enterprise
are collectively owed over $90 million, representing roughly 28%
of the approximately $320 million owed to all U.S. and Cayman
investors.
The investors filed involuntary Chapter 11 petitions for other New
Stream affiliates including New Stream Secured Capital Fund P1
(Cayman), Ltd. and New Stream Secured Capital Fund K1 (Cayman),
Ltd.
The petitioning investors in the New Stream investment enterprise
are collectively owed over $90 million, representing roughly 28%
of the approximately $320 million owed to all U.S. and Cayman
investors.
The Investors filed together with the petition a request for a
Chapter 11 trustee, saying the appointment of a Chapter 11 trustee
is made all the more urgent because New Stream's management and
the Liquidators have distributed a prepackaged joint plan of
liquidation along with a disclosure statement for which they are
currently soliciting support, which they propose to confirm
immediately following the filing of voluntary Chapter 11 petitions
by four New Stream entities no later than March 11, 2011.
The Petitioners are represented by:
Joseph H. Huston, Jr., Esq.
Maria Aprile Sawczuk, Esq.
Meghan A. Cashman, Esq.
STEVENS & LEE, P.C.
1105 North Market Street, 7th Floor
Wilmington, DE 19801
Tel: (302) 425-3310
(302) 425-3306
(302) 425-3307
Fax: (610) 371-7972
E-mail: jhh@stevenslee.com
masa@stevenslee.com
maca@stevenslee.com
- and -
Beth Stern Fleming, Esq.
STEVENS & LEE, P.C.
1818 Market Street, 29th Floor
Philadelphia, PA 19103
Tel: (215) 575-0100
E-mail: bsf@stevenslee.com
- and -
Nicholas F. Kajon, Esq.
David M. Green, Esq.
Constantine Pourakis, Esq.
STEVENS & LEE, P.C.
485 Madison Avenue, 20th Floor
New York, NY 10022
Tel: (212) 319-8500
E-mail: nfk@stevenslee.com
dmg@stevenslee.com
cp@stevenslee.com
- and -
Edward Toptani, Esq.
TOPTANI LAW OFFICES
127 E. 59th Street, 3rd Floor
New York, NY 10022
Tel: (212) 699-8930
E-mail: edward@toptanilaw.com
- and -
John M Bradham, Esq.
David Hartheimer, Esq.
MAZZEO SONG & BRADHAM LLP
708 Third Avenue, 19th Floor
New York, NY 10017
Telephone: (212) 599-0700
E-mail: jbradham@mazzeosong.com
dhartheimer@mazzeosong.com
NORTEL NETWORKS: Court Approves Claim Settlement with ACS Cable
---------------------------------------------------------------
BankruptcyData.com reports that the U.S. Bankruptcy Court approved
Nortel Networks' motions seeking approval of a claims settlement
with ACS Cable Systems, Inc. and a settlement and inventory
agreement with Nortel, Telefonaktiebolaget LM Ericsson, the
purchaser of Nortel's Multi-Service Switch business, and Jabil
Circuit, a provider of circuit boards used in Nortel's Multi-
Service Switch business.
According to the settlement with ACS Cable Systems, they will now
have a $2.05 million claim against Nortel with $300,000 of that
claim being classified as an administrative claim and the balance
will be considered a general unsecured claim.
About Nortel Networks
Nortel Networks (OTC BB: NRTLQ) -- http://www.nortel.com/-- was
once North America's largest communications equipment provider.
It has sold most of the businesses while in bankruptcy.
Nortel Networks Corp., Nortel Networks Inc., and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List). Ernst & Young was appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group.
The Monitor sought recognition of the CCAA Proceedings in the U.S.
by filing a bankruptcy petition under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway,
Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney
PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's
counsel.
Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138).
Judge Kevin Gross presides over the case. James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent. Fred S. Hodara, Esq.,
at Akin Gump Strauss Hauer & Feld LLP, in New York, and
Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, represent the Official Committee of
Unsecured Creditors.
Certain of Nortel's European subsidiaries also made consequential
filings for creditor protection. On May 28, 2009, at the request
of the Administrators, the Commercial Court of Versailles, France
ordered the commencement of secondary proceedings in respect of
Nortel Networks S.A. On June 8, 2009, Nortel Networks UK Limited
filed petitions in this Court for recognition of the English
Proceedings as foreign main proceedings under chapter 15 of the
Bankruptcy Code.
Nortel Networks divested off key assets while in Chapter 11.
In March 2009, the U.S. Bankruptcy Court entered an order
approving the sale of the Layer 4-7 assets to Radware Ltd. as the
successful bidder at auction. In July 2009, Nortel sold its CDMA
and LTE-related assets to Telefonaktiebolaget LM Ericsson (Publ).
In September 2009, the Court Nortel sold its Enterprise Solutions
business to Avaya Inc. In October 2009, the Court approved the
sale of assets associated with Nortel's Next Generation Packet
Core network components to Hitachi, Ltd. On December 2, 2009, the
Court approved the sale of assets associated with Nortel's
GSM/GSM-R business to Telefonaktiebolaget LM Ericsson (Publ) and
Kapsch Carriercom AG. In December 2009, the Debtors sold their
Metro Ethernet Networks business to Ciena Corporation. In March
2010, Nortel sold its Carrier Voice Over IP and Application
Solutions business to GENBAND Inc. In September 2010, Nortel sold
its Multi-Service Switch business to Ericsson.
Nortel Networks has filed a proposed plan of liquidation in the
U.S. Bankruptcy Court. The Plan generally provides for full
payment on secured claims with other distributions going in
accordance with the priorities in bankruptcy law.
ORBIT INT'L: Posts $3MM Loss in Q4 2010; Seeks Waiver from Lender
-----------------------------------------------------------------
Orbit International Corp. announced Thursday results for the
fourth quarter and year ended Dec. 31, 2010. The Company noted
that the results for the final quarter and year were adversely
affected by a non-recurring expense in connection with the non-
renewal of the employment contract of its former President and CEO
("senior officer expense") at 2010 year-end.
Fourth Quarter 2010 vs. Fourth Quarter 2009
-- Net sales declined by 7.3% to $6,946,000 compared to
$7,489,000;
-- Gross margin declined to 32.6% from 42.3% due, in part, to
2010 inventory write-downs and inventory disposals due to
obsolescence;
-- The net loss for the quarter was $3,028,000 compared to a
net loss of $1,580,000. The net loss for the current
period included a charge of $2,000,000 for the senior
officer expense (including a non-cash charge of $312,000
due to accelerated stock vesting) and $924,000 of non-cash
impairment charges taken in connection with recorded
intangible assets and goodwill related to its Integrated
Combat Systems, Inc. ("ICS") subsidiary. Excluding these
charges, the net loss for the quarter was $104,000; and,
-- For the final quarter of 2009, there was a net loss of
$1,580,000 or $0.36 per share which included $2,048,000 of
non-cash impairment charges taken in connection with
recorded intangible assets and goodwill related to its ICS
subsidiary.
Year End 2010 vs. Year End 2009
-- Net sales increased slightly to $26,749,000 from
$26,518,000;
-- Gross margin was 35.4% compared to 40.5%;
-- The net loss for 2010 was $3,025,000 compared to a net loss
of $1,607,000. The net loss for the current period
included a charge of $2,000,000 for the senior officer
expense (including a non-cash charge of $312,000 due to
accelerated stock vesting) and $924,000 of non-cash
impairment charges taken in connection with recorded
intangible assets and goodwill related to its ICS
subsidiary. Excluding these charges, the net loss for the
year was $101,000; and,
-- For 2009, there was a net loss of $1,607,000 which included
$2,048,000 of non-cash impairment charges taken in
connection with recorded intangible assets and goodwill
related to its ICS subsidiary.
Mitchell Binder, Acting Chief Executive Officer stated, "We expect
revenue and profitability to improve in 2011 due to a number of
factors:
-- Backlog at Dec. 31, 2010, was $20.1 million, up 8.9% from
$18.4 million at year-end 2009, which had been reduced by
$2.1 million due to a canceled order. In addition, our
ICS subsidiary booked a $1.1 million order for the MK-437
in February 2011. The prior year's order for the MK-437
was already reflected into our prior year-end backlog.
-- Additionally, 2010 was a good year for bookings. Our
Behlman division booked $10.46 million in new orders, an
8.9% increase over 2009 and the Orbit Instrument division
exceeded $11 million in new orders. Similarly, ICS and
Tulip divisions also had a strong year of bookings.
-- Favorable trends continued in 2011; for January and
February of 2011, bookings/orders aggregated approximately
$4.9 million.
-- Our cost structure in 2010 included compensation for our
former CEO, whose contact was not renewed at Dec. 31, 2010.
Without his compensation, our operating expenses in 2011
will be considerably lower than in 2010.
-- All goodwill and intangible assets of ICS have been
entirely written off as of Dec. 31, 2010.
-- In addition, we recently renegotiated the lease terms of
our Hauppauge facility resulting in an expense reduction of
approximately $100,000 per year effective Jan. 1, 2011,
through Dec. 31, 2019.
-- Because of the operating leverage inherent in our business,
a modest internal growth rate historically produces double
digit bottom line improvement."
Mr. Binder added, "We are focusing on growing our Company both
organically and through acquisitions. While pursuing new business
opportunities, we continue to harvest production orders and repeat
business from what were once prototype awards. To grow our
business faster and to achieve better utilization at our existing
facilities, we are looking into synergistic acquisitions."
David Goldman, Acting Chief Financial Officer, noted, "Due to the
loss during the current fourth quarter and the liability
associated with the senior officer expense, the Company was not in
compliance with one of its financial covenants with its primary
lender. The Company has met with its primary lender and is
currently seeking a waiver for the fourth quarter and an amendment
to the financial covenant for the first two quarters in 2011. The
Company believes it will obtain such waiver and amendment from its
lender, but there is no assurance that these will be obtained. In
the event that the waiver and amendment are not obtained, all
long-term debt reflected in the Company's financial statements
would be reclassified to current liabilities. The Company expects
to be back in compliance with the original financial covenant by
the third quarter."
Mr. Goldman added, "Our financial condition remains strong. At
Dec. 31, 2010, total current assets were $19,566,000 versus total
current liabilities of $4,560,000 for a 4.3 to 1 current ratio.
Our cash, cash equivalents and marketable securities as of
Dec. 31, 2010, were approximately $2.1 million. To enhance future
cash flow, we have approximately $22 million and $8 million in
federal and state net operating loss carryforwards, respectively,
to shield profits from federal and state taxes. Our tangible book
value at Dec. 31, 2010, decreased to $3.07 per share, compared to
$3.45 per share at Sept. 30, 2010, and $3.43 at Dec. 31, 2009."
At Dec. 31, 2010, the Company's balance sheet showed $24.4 million
in total assets, $8.2 million in total liabilities, and
stockholders' equity of $16.2 million.
Hauppauge, N.Y.-based Orbit International Corp.
-- http://www.orbitintl.com/-- is an electronics manufacturer and
software solution provider. The Company is involved in the
manufacture of customized electronic components and subsystems for
military and nonmilitary government applications through its
production facilities in Hauppauge, New York, and Quakertown,
Pennsylvania; and designs and manufactures combat systems and gun
weapons systems, provides system integration and integrated
logistics support and documentation control at its facilities in
Louisville, Kentucky. Its Behlman Electronics, Inc. subsidiary
manufactures and sells high quality commercial power units, AC
power sources, frequency converters, uninterruptible power
supplies and associated analytical equipment. The Behlman
military division designs, manufactures and sells power units and
electronic products for measurement and display.
P&C POULTRY: Creditors Panel Taps Blakeley as Counsel
-----------------------------------------------------
The Bankruptcy Court granted the application of the Official
Committee of Unsecured Creditors in the bankruptcy cases of P&C
Poultry Distributors, Inc., or Custom Processors, Inc., to retain
Blakeley & Blakeley LLP as bankruptcy counsel:
Scott E. Blakeley, Esq.
Ronald A. Clifford, Esq.
BLAKELEY & BLAKELEY LLP
2 Park Plaza, Suite 400
Irvine, CA 92614
Telephone: (949) 260-0611
Facsimile: (949) 260-0613
E-Mail: seb@blakeleyllp.com
rclifford@blakeleyllp.com
Among other things, the firm will assist the Committee in its
investigation of the acts, conduct, assets, liabilities and
financial condition of the Debtors, the operation of the Debtors'
business, including the formulation of a plan of reorganization.
The firm will be paid on an hourly basis. The professionals who
will provide services and their hourly rates are:
Professional Hourly Rate
------------ -----------
Scott E. Blakely, Esq. $450
Bradley D. Blakely, Esq. $395
Ronald A. Clifford, Esq. $295
Other Associates $245
Law Clerks $145
Paralegals $145
Attorneys of Blakeley & Blakeley attest that they are
disinterested persons and do not represent or hold interests
adverse to the interests of the Debtors or their estates.
About P&C Poultry and Custom Processors
City of Industry, California-based P&C Poultry Distributors, Inc.,
and its affiliate Custom Processors, Inc., are a further processes
and distributes processed poultry products operating out of a
U.S.D.A.-certified facility in the City of Industry, California.
P&C produces value-added frozen and fresh poultry products for re-
sale to major fast food restaurant chains and casual dining
services, including CKE Restaurants, Inc. (Carl's Jr., Hardee's),
Yum! Brands, Inc. (KFC, Taco Bell), the Carlson Companies (Pickup
Stix, T.G.I. Friday's) and Daphne's Greek Cafe.
P&C filed for Chapter 11 bankruptcy protection on Aug. 27, 2010
(Bankr. C.D. Calif. Case No. 10-46350). Brian L. Davidoff, Esq.,
who has an office in Century City, California, represents the
Debtors. The Debtor estimated assets and debts at $10 million to
$50 million. Custom Processors filed a separate Chapter 11
petition on the same day. The cases are jointly administered.
PARK-OHIO INDUSTRIES: Moody's Upgrades Corp. Family Rating to 'B2'
------------------------------------------------------------------
Moody's Investors Service upgraded Park-Ohio Industries, Inc.'s
Corporate Family Rating to B2 from B3 and assigned a B3 rating to
the company's proposed $250 million senior subordinated notes due
2021. Park-Ohio intends to refinance its existing asset-based
senior secured revolving credit facility, senior secured term
loans, and senior subordinated notes with the proceeds of the
$250 million senior subordinated notes issuance and drawing down
on an amended $200 million asset-based senior secured revolving
credit facility. This transaction will improve the company's debt
maturity profile and liquidity on a pro forma basis. The rating
on the existing senior subordinated notes due 2014 will be
withdrawn upon completion of the company's refinancing
transaction. The rating outlook remains stable.
This summarizes the rating actions:
Ratings upgraded:
-- Corporate Family Rating to B2 from B3
-- Probability of Default Rating to B2 from B3
-- $183 million senior subordinated notes due 2014 to B3 (LGD 5;
77%) from Caa1 (LGD 5; 77%)*
* to be withdrawn after completion of refinancing transaction.
Ratings assigned:
-- Proposed $250 million senior subordinated notes due 2021 at
B3 ( LGD 5; 73%)
-- Outlook remains stable.
Ratings Rationale
The upgrade to B2 CFR reflects improved liquidity and leverage
metrics for Park-Ohio and Moody's expectations for continued
operating improvement. Even though the transaction is expected to
modestly increase debt leverage to about 6x (pro forma for 2010;
incorporating Moody's standard analytical adjustments), Moody's
note that leverage has declined from roughly 9x-10x (when
excluding gains on debt repurchases from EBITDA), its recession-
era peak in late 2009 and early 2010. Moody's expects leverage to
further decline towards 5x over the near term. Moody's also
expect interest coverage to improve towards 2x EBIT-to-Interest
and free cash flow to remain positive over the intermediate term.
The B2 rating favorably reflects a broad product portfolio,
relatively diversified customer base, expected cyclical
improvement in end markets, and countercyclical cash flows that
support liquidity during an economic downturn. A good near-term
liquidity position and extension of the company's debt maturity
profile by its proposed refinance transaction also support the
CFR. The B2 CFR is constrained by small scale, high debt
leverage, and exposure to cyclical end markets.
Moody's believes that Park-Ohio possesses good liquidity to
support its operations. Moody's expect pro forma balance sheet
cash of about $60 million and breakeven-to-modestly positive free
cash flow over the near term as the company uses cash for working
capital needs. Moody's expect revolving credit availability to
remain in the $50 million range (after considering outstanding
cash advances and letters of credit) over the next twelve months.
Moody's do not expect a springing financial maintenance covenant
to apply over the near-term given expected availability in excess
of a $30 million minimum availability threshold.
The stable fundamental rating outlook assumes debt leverage will
decline below 6x over the next twelve-to-eighteen months, Park-
Ohio will maintain a good liquidity position, and refinancing
transaction will be completed on economic terms.
There is limited upside to the ratings in the near-term due to the
somewhat prospective nature of the B2 CFR. A positive action
likely would require expectations for leverage below 4.5x,
EBIT/Interest coverage above 2x, and sustained positive free cash
flow approaching 10% of debt. Conversely, Moody's could take a
negative action if leverage is not expected to decline below 6x in
2011, if free cash flow turns negative, or if the company
experiences a substantive deterioration in its liquidity position.
Park-Ohio Industries, Inc., headquartered in Cleveland, Ohio, is
an industrial supply chain logistics and diversified manufacturing
business operating in three segments: Supplier Technologies,
Aluminum Products, and Manufactured Products. Park-Ohio's
revenues were $814 million in 2010.
PARK-OHIO INDUSTRIES: S&P Assigns 'CCC+' Rating to $250 Mil. Notes
------------------------------------------------------------------
Standard and Poor's Rating Services said that it has assigned
its 'CCC+' issue-level rating (two notches lower than the CCR)
to Cleveland, Ohio-based Park-Ohio Industries Inc.'s proposed
$250 million senior subordinated notes. The recovery rating is
'6', indicating S&P's expectation of negligible recovery (0%-10%)
in a payment default scenario. At the same time, S&P affirmed
its 'B' CCR on Park-Ohio. S&P expects the company to use the
proceeds from the proposed notes and new unrated $200 million
revolver to redeem its existing senior subordinated notes and all
debt outstanding under its current credit facility. The outlook
is stable.
"The ratings on Park-Ohio reflect the company's highly leveraged
financial risk profile and its weak business risk profile as a
diversified operator of logistics and manufacturing businesses
serving cyclical and competitive end markets," said Standard
& Poor's credit analyst Sarah Wyeth. "S&P expects revenue
growth in the high single digits in 2011, due in part to recent
acquisitions. This, combined with a slightly improved, but still
weak, operating margin (before depreciation and amortization) of
less than 10% should result in debt to EBITDA of 5x-6x, and funds
from operations to debt in excess of 10%--levels appropriate for
the rating."
The outlook is stable. "S&P could raise the ratings if the
company's operating performance continues to improve, for
instance, if increasing volumes and stable operating margins allow
it to reduce debt to EBITDA to less than 5x, and S&P believes the
improvements are likely to be sustained," Ms. Wyeth added. "On
the other hand, S&P could lower the ratings if recent improvement
in end markets reverses or if the company pursues debt-funded
acquisitions that result in leverage greater than 6x for a
sustained period."
PEARLAND SUNRISE: Hearing on Plan Outline Reset to April 4
----------------------------------------------------------
The hearing on the disclosure statement explaining Pearland
Sunrise Lake Village I, LP's proposed Chapter 11 Plan has been
rescheduled from Feb. 28, 2011 at 1:30 p.m. Central Time to April
4, 2011, at 9:00 a.m. Central Time.
As reported in the Troubled Company Reporter on Feb. 2, 2011, the
Plan proposes to repay the Debtor's creditors in full through the
continued operation of its real property in Broadland, Texas, the
use of settlement funds deposited into the registry of the 23rd
District Court of Brazoria County, Texas, and the possible
recovery of other funds related to a lawsuit identified as the
"National Lawsuit".
After confirmation, the Debtor will continue to operate its
business, focusing its attention on leasing its real property.
The salient terms of the Plan include:
(1) Holders of administrative claims and priority claims will be
paid in full on the effective date of the Plan;
(3) Holders of secured claims will be paid over time.
(4) Holders of unsecured claims will be paid the allowed amounts
of their claims pro-rata in 60 equal installments beginning
on the Effective Date.
(5) Holders of partnership interests will retain their
interests, but the interests will not re-vest until all
other allowed claims have been paid in full.
A copy of the Disclosure Statement, dated Nov. 30, 2010, is
available for free at:
http://bankrupt.com/misc/PearlandSunrise.DS.pdf
About Pearland Sunrise Lake
Marble Falls, Texas-based Pearland Sunrise Lake Village I, LP, dba
SRLVI, was chartered in June 2005 for the purpose of acquiring and
developing an approximately 5.8 acres of land at 9415 Broadland,
Texas. Office space of 36,008 square feet of retail space and
42,973 square feet of office space was built on the property. The
Company filed for Chapter 11 bankruptcy protection (Bankr. W.D.
Tex. Case No. 10-11926) on July 9, 2010. Frank B. Lyon, Esq., at
the Law Offices of Frank B. Lyon, in Austin, Texas, represents the
Debtor. In its schedules, the Debtor disclosed $10,253,717 in
assets and $16,222,127 in liabilities.
PETRA FUND: PwC Provides Tax Advisory Services
----------------------------------------------
Petra Fund REIT Corp. and Petra Offshore Fund LP have employed
PricewaterhouseCoopers LLP as their tax advisors for their chapter
11 proceedings. PwC's James Guiry leads the engagement.
Pursuant to the engagement, PwC prepares certain U.S. federal and
state income tax returns for the Debtors, and provides tax
services necessary to respond to matters presented to PwC by
Offshore Fund, including recurring tax consulting services and
advice, or assistance relating to matters involving tax
authorities. PwC has provided services to the Debtors since April
2007.
PwC is being paid on an hourly basis. The firm's rates are:
Professional Hourly Rate
------------ -----------
Partner $890
Managing director $640
Director $510
Manager $395
Senior Associate $295
Associate $210
The Debtors have also agreed to indemnify PwC, except for claims
arising out of PwC's bad-faith, selfdealing, breach of fiduciary
duty (if any), gross negligence, or willful misconduct.
PwC's fees will not exceed $105,000.
PwC represents or holds no interest adverse to the Debtors or
their estates as to the matters upon which it is to be engaged and
is "disinterested" as that term is defined under section 101(14)
of the Bankruptcy Code, as modified by section 1107(b) of the
Bankruptcy Code.
About Petra Fund
Petra Fund REIT Corp. and its affiliates are in the business of
originating, investing in, structuring and trading loans secured
by commercial real-estate. Petra Offshore Fund LP is the parent.
Petra Fund and Petra Offshore sought Chapter 11 protection (Bankr.
S.D.N.Y. Lead Case No. 10-15500) on Oct. 20, 2010, and are
represented by Shaya M. Berger, Esq., and Brian E. Goldberg, Esq.,
at Dickstein Shapiro, LLP. At the time of the filing, each of the
Debtor estimated its assets at less than $10 million and its debts
at more than $100 million.
Petra Fund blamed its Chapter 11 filing on the extraordinary and
unprecedented collapse of the credit and commercial real estate
markets, which caused a mark-to-market value of its assets to
plummet.
PENZANCE CASCADES: Has Green Light to Hire Paul Hastings
--------------------------------------------------------
Judge Robert E. Gerber granted the application of Penzance
Cascades North, LLC and its affiliated debtors to employ as their
bankruptcy counsel:
Bryan R. Kaplan, Esq.
Harvey A. Strickon, Esq.
PAUL, HASTINGS, JANOFSKY & WALKER LLP
75 East 55th Street
New York, NY 10022
Tel: (212) 318-6339
Fax: (212) 90318-6428
E-mail: bryankaplan@paulhastings.com
harveystrickon@paulhastings.com
In his affidavit filed with the Court, Mr. Strickon attested that
his firm is a "disinterested person," as defined in Section
101(14) of the Bankruptcy Code and as required by Section 327(a)
of the Bankruptcy Code, and neither has represented nor represents
an interest materially adverse to the interests of the estates or
of any class of creditors or equity security holders by reason of
any direct or indirect relationship to, connection with, or
interest in, the Debtors or for any other reason.
About Penzance Cascades
Penzance Cascades North LLC, along with affiliates, filed for
bankruptcy protection in Manhattan (Bankr. S.D.N.Y. Lead Case No.
10-16643). The affiliates that filed are Penzance Cascades West
LLC (Bankr. S.D.N.Y. Case No. 10-16644), Penzance Parkridge Two,
LLC (Case No. 10-16645) and Penzance Parkridge Five, LLC (Case No.
10-16646).
The Penzance entities own office buildings in Reston, Virginia.
They filed Chapter 11 petitions on Dec. 15, 2010, to head off
foreclosure the next day. The properties, whose ultimate owner is
a fund managed by Garrison Investment Group, owe $107 million on a
mortgage where $67.5 million of the debt is now held in a
securitization.
Penzance Cascades North, owner of a five-story building in Reston,
Virginia, estimated assets of $10 million to $50 million and debt
of $100 million to $500 million.
Harvey A. Strickon, Esq., at Paul, Hastings, Janofsky & Walker
LLP, in New York, serves as counsel to the Debtors.
PETROHUNTER ENERGY: Alan Bruner Discloses 10% Equity Stake
----------------------------------------------------------
In a Schedule 13G filing with the U.S. Securities and Exchange
Commission, Alan Shane Bruner and James E. McNair disclosed that
they beneficially own 43,700,000 shares of common stock of
Petrohunter Energy Corporation representing 10.0% of the shares
outstanding. As of Jan. 31, 2011, the Company had 439,078,759
shares of common stock outstanding.
About PetroHunter Energy
Denver, Colo.-based PetroHunter Energy Corporation is an oil and
gas exploration company. The Company currently owns oil and gas
leasehold interests either directly or through an equity
investment in Australia (Beetaloo Basin) and in Western Colorado
(Piceance Basin).
The Company's balance sheet at Dec. 31, 2010, showed $1.8 million
in total assets, $65.3 million in total liabilities, and a
stockholders' deficit of $63.5 million.
As reported in the Troubled Company Reporter on Dec. 28, 2010,
Eide Bailly LLP, in Greenwood Village, Colo., expressed
substantial doubt about PetroHunter Energy'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 an accumulated deficit of $286.0 million and net
loss of $6.8 million for the year ending September 30, 2010, and
as of that date, has a working capital deficit of $11.3 million
PETROHUNTER ENERGY: Marc Bruner Discloses 5.7% Equity Stake
-----------------------------------------------------------
In a Schedule 13G filing with the U.S. Securities and Exchange
Commission, Marc E. Bruner and Cynthia L. Gausvik disclosed that
they beneficially own 25 million shares of Petrohunter Energy
Corporation common stock representing 5.7% of the shares
outstanding. As of Jan. 31, 2011, the Company had 439,078,759
shares of common stock outstanding.
About PetroHunter Energy
Denver, Colo.-based PetroHunter Energy Corporation is an oil and
gas exploration company. The Company currently owns oil and gas
leasehold interests either directly or through an equity
investment in Australia (Beetaloo Basin) and in Western Colorado
(Piceance Basin).
The Company's balance sheet at Dec. 31, 2010, showed $1.8 million
in total assets, $65.3 million in total liabilities, and a
stockholders' deficit of $63.5 million.
As reported in the Troubled Company Reporter on Dec. 28, 2010,
Eide Bailly LLP, in Greenwood Village, Colo., expressed
substantial doubt about PetroHunter Energy'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 an accumulated deficit of $286.0 million and net
loss of $6.8 million for the year ending September 30, 2010, and
as of that date, has a working capital deficit of $11.3 million.
PHOENIX FOOTWEAR: Dennis Nelson to Step Down By End of March
------------------------------------------------------------
Phoenix Footwear Group, Inc., announced that its Chief Financial
Officer, Secretary and Treasurer, Dennis Nelson, will be stepping
down and leaving the Company at the end of March 2011.
James Riedman, President and Chief Executive Officer, commented,
"Dennis has been an important partner and resource for the Company
as we have transitioned the business this past 18 months. With
that work largely behind us, I want to thank Dennis for his
contributions."
About Phoenix Footwear
Based in Carlsbad, California, Phoenix Footwear Group, Inc. (NYSE
Amex: PXG) specializes in quality comfort women's and men's
footwear with a design focus on fitting features. Phoenix
Footwear designs, develops, markets and sells footwear in a wide
range of sizes and widths under the brands Trotters(R),
SoftWalk(R), and H.S. Trask(R). The brands are primarily sold
through department stores, leading specialty and independent
retail stores, mail order catalogues and internet retailers and
are carried by approximately 650 customers in more than 900 retail
locations throughout the U.S. Phoenix Footwear has been engaged
in the manufacture or importation and sale of quality footwear
since 1882.
The Company's balance sheet at Oct. 2, 2010, showed $10,837,000
in total assets, $6,760,000 in total liabilities, and $4,077,000
in stockholders' equity.
As reported by the Troubled Company Reporter on Nov. 29, 2010,
the Company said in its quarterly report on Form 10-Q for the
period ended October 2, 2010, that the severe global recession has
been challenging during the past two years and has dramatically
affected the Company's business as it is dependent on consumer
demand for its products. During this time, the Company has faced
significant working capital constraints as the result of the
decline in sales, expenditures, and obligations associated with
its restructuring and diminished borrowing capacity. These
factors, together with net losses and negative cash flows during
the past three fiscal years, raise substantial doubt about the
Company's ability to continue as a going concern.
PIERMONT PLAZA: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Piermont Plaza Realty LLC
One Roundhouse Road
Piermont, NY 10968
Bankruptcy Case No.: 11-22425
Chapter 11 Petition Date: March 9, 2011
Court: United States Bankruptcy Court
Southern District of New York (White Plains)
Judge: Robert D. Drain
Debtor's Counsel: Joseph J. Haspel, Esq.
JOSEPH J. HASPEL, PLLC
40 Matthews Street, Suite 301
Goshen, NY 10924
Tel: (845) 294-8950
Fax: (845) 294-3843
E-mail: jhaspel@haspellaw.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by Philip Griffin, managing member.
POINT BLANK: Judge Delays Approval of SEC Deal with Firm
--------------------------------------------------------
Bankruptcy Law360 reports that Judge Peter J. Walsh of the U.S.
Bankruptcy Court for the District of Delaware on Thursday held off
on approving a settlement between the U.S. Securities and Exchange
Commission and Point Blank Solutions Inc. over a shareholder's
concern that the deal might affect forfeiture recoveries from the
body-armor maker's former management.
As reported in the Troubled Company Reporter on March 1, 2011,
Dow Jones' Small Cap said Point Blank Solutions Inc. struck a deal
to head off a potential lawsuit from the U.S. Securities &
Exchange Commission accusing it of fraud and other violations of
securities rules. The report relates that the SEC has already
filed complaints against three of the company's former officers,
alleging that they defrauded investors, and was gearing up to
launch litigation against Point Blank itself.
But last year, DBR recounted, Point Blank and the SEC negotiated a
settlement that "completely resolve[s]" the SEC's claims against
the company, and Point Blank is now ready to present the deal to
the bankruptcy court for approval. Under the so-called "consent
agreement," Point Blank is prohibited from further violating
securities rules but will not have to see any damages or monetary
penalties, according to DBR.
In order to keep its end of the bargain, Point Blank plans to
deregister itself so that it doesn't have to get up to date with
public disclosures, which could cost $1 million in legal and
accounting fees, the company said in court papers, DBR added.
About Point Blank
Headquartered in Pompano Beach, Florida, Point Blank Solutions,
Inc. -- http://www.pointblanksolutionsinc.com/-- designs and
produces body armor systems for the U.S. Military, Government and
law enforcement agencies, as well as select international markets.
The Company maintains facilities in Pompano Beach, Florida, and
Jacksboro, Tennessee.
The Company's former chief executive officer and chief operating
officer were convicted in September 2010 of orchestrating a
$185 million fraud.
Point Blank Solutions, formerly DHB Industries, filed for
Chapter 11 protection on April 14, 2010 (Bankr. D. Del. Case No.
10-11255). Laura Davis Jones, Esq., and Timothy P. Cairns, Esq.,
at Pachulski Stang Ziehl & Jones LLP, serve as bankruptcy counsel
to the Debtor. Olshan Grundman Frome Rosenweig & Wolosky LLP
serves as corporate counsel. T. Scott Avila of CRG Partners Group
LLC is the restructuring officer. Epiq Bankruptcy Solutions
serves as claims and notice agent.
The U.S. Trustee has appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Equity Security
Holders in the case. The Equity Committee has tapped Morrison
Cohen LLP, and The Bayard, P.A., as counsel. Robert M. Hirsh,
Esq., and Heike M. Vogel, Esq., at Arent Fox LLP, serve as counsel
to the Creditors Committee, and Frederick B. Rosner, Esq., and
Brian L. Arban, Esq., at Messana Rosner & Stern LLP, serve as
co-counsel.
PRECISION DRILLING: Moody's Assigns 'Ba2' Rating to Senior Notes
----------------------------------------------------------------
Moody's Investors Service assigned a Ba2 (LGD5, 70%) rating to
Precision Drilling's proposed issuance of C$200 million issue of
senior unsecured notes. The proceeds of the new notes will be
used to repay amounts outstanding under its existing senior
secured revolving credit facilities. The rating outlook is
stable.
Ratings Rationale
Precision's Ba1 Corporate Family Rating reflects its favorable
market position and broad geographic footprint in the major North
American land drilling markets, a high quality rig fleet, low
leverage, and history of conservative fiscal management. The
rating also considers the company's solid operating margins, the
capacity to generate free cash flow, and longstanding customer
relationships that reduce cash flow volatility. Precision's
servicing and manufacturing businesses, while small, also add some
diversity to the revenue mix. The rating is restrained by
concentration in one general major market, North America, the
inherent cyclicality of contract land drilling, and the weak
fundamentals of the natural gas industry.
The stable outlook reflects Precision's contracted rig position,
Moody's expectation that its rig utilization will remain favorable
through at least 2011 and the company's favorable leverage. A
positive rating action is unlikely in the next 12-18 months.
However, the outlook could be changed to positive if the company
settles its contingent tax liability in a manner that does not
increase leverage from current levels, and the outlook for North
American gas drilling activity stabilizes. Moody's would also
look for a greater proportion of contracted rigs and broader
presence outside of North America or diversity in line of service
for any positive rating action. A negative rating action is
unlikely in 2011. Longer term, negative pressures may result if
leverage increases considerably from the levels in combination
with a prolonged downturn in the North American onshore drilling
market. More specifically, the rating could be lowered if debt to
EBITDA appears unsustainable below 3.0x.
The note rating is one notch below the Precision's Ba1 CFR because
of the high level of prior ranking debt in the capital structure,
principally comprised of the company's US$650 million revolving
credit facilities. The senior notes are unsecured and therefore
subordinate to the senior secured credit facility's potential
priority claim to the company's assets. This notching is in
accordance with Moody's Loss Given default Methodology.
Precision Drilling Corporation is a Calgary, Alberta-based
corporation engaged in onshore drilling and providing well
completion and production services to upstream oil and gas
companies in North America.
PRECISION DRILLING: S&P Assigns 'BB+' Rating to Senior Debt
-----------------------------------------------------------
Standard & Poor's Rating Services said it assigned its 'BB+'
issue-level debt rating and '4' recovery rating to Calgary, Alta.-
based Precision Drilling Corp.'s proposed C$200 million senior
unsecured debt issue due 2019. The '4' recovery rating indicates
S&P's expectation of average recovery (30%-50%) in the event of
default.
"This bond issue effectively refinances Precision Drilling's
recently repaid C$175 million 10% notes due 2017, which will leave
its prospective capital structure relatively unchanged," said
Standard & Poor's credit analyst Michelle Dathorne. "Assuming the
current capital structure mix remains unchanged, and given S&P's
current estimated enterprise value for the company at the time of
default, there is limited capacity to issue additional senior
unsecured debt at the current '4' recovery rating. Based on S&P's
estimated enterprise value and the company's existing senior debt,
the current '4' recovery rating could support an additional
C$100 million of senior unsecured debt," Ms. Dathorne added.
S&P will publish a complete recovery analysis on RatingsDirect on
the Global Credit Portal once S&P review the notes' final terms
and conditions.
In its simulated default analysis, S&P believes the most likely
default scenario for Precision Drilling would be a sustained
period of weak crude oil and North American natural gas prices,
with a corresponding sharp decline in capital spending by
exploration and production companies. At such a cyclical trough,
S&P expects a dramatic reduction in oilfield services revenues and
cash flows, as well as operating margin compression. In addition,
industry use would fall. The resulting rig oversupply would
increase competitive pressures and trigger large-scale day rate
reductions. S&P's simulated default scenario assumes the
company's cash flows would decrease such that it would be unable
to meet its debt servicing obligations.
The ratings on Precision Drilling reflect Standard & Poor's
opinion of the company's participation in the cyclical and highly
volatile oilfield services sector, and the diminished cash flow
generation profile associated with the current weak outlook for
natural gas exploration and production. S&P believes the
company's ability to secure long-term contracts for its tier one
rigs, good cost management, the size and expanded geographic
diversification of its drilling and service rig fleet, and the
large number of rigs with deep drilling capabilities in the U.S.
and the Western Canadian Sedimentary Basin markets are positive
offsetting factors to the industry fundamentals that weaken
Precision's credit profile.
Ratings List
Precision Drilling Corp.
Corporate credit rating BB+/Stable/--
Rating Assigned
Prop C$200 mil. sr. unsec. debt due 2019 BB+
Recovery rating 4
PRIUM LAKEWOOD: Confirmation Hearing Schedules for March 30
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Washington
has approved the disclosure statement explaining Lakewood
Buildings LLC's Plan of Reorganization. Details of the approval
are not available as the order approving the disclosure statement
has still to be issued by the Court. The hearing on the
confirmation of the Plan is set for March 30, 2011, at 9:00 a.m.
As reported in the TCR on Feb. 2, 2011, On Jan. 3, 2011, Prium
Lakewood Buildings LLC filed a disclosure statement explaining its
Plan of Reorganization. The Plan centers on the restructuring of
the Debtor's obligations to the First Independent Bank, leasing
the remaining vacant space at the Lakewood Colonial Center
(approximately 10%) and a sale or refinance of the Center in 2013.
First Independent Bank will retain its first position security
interest against the Center. The Debtor will make monthly
payments to the Bank based on the new principal balance of the
Bank's claims (about $15,950,000) and an amortization period of 25
years (roughly $60,000 a month) from its rental income and a lump
sum payment to the Bank of the balance of its claim upon a sale or
refinance of the Center.
Bingo Investments I, LLC's claim will be fixed in the principal
amount of $500,000 on the effective date of the Plan. Bingo will
receive monthly payments to $1,875 (interest only) from its rental
income and a lump sum payment of the balance of its claim upon a
sale or refinance of the Center.
Unsecured claims will be paid $25,000 every six months from rental
income from October 2011 until December 2013 or paid in full,
whichever comes first.
Prium Companies LLC, the sole member of the Debtor, will retain
its membership interests.
A copy of the Disclosure Statement, dated January 3, 2011, is
available for free at:
http://bankrupt.com/misc/priumlakewood.DS.pdf
About Prium Lakewood Buildings LLC
Tacoma, Washington-based Prium Lakewood Buildings LLC owns several
parcels of commercial real property. The properties comprise
Lakewood Colonial Center, an income-producing retail and office
center. Prium Lakewood is owned by Prium Companies LLC.
Prium Lakewood filed for Chapter 11 bankruptcy protection on
October 19, 2010 (Bankr. W.D. Wash. Case No. 10-48621). Timothy
W. Dore, Esq., at Ryan Swanson & Cleveland PLLC, in Seattle,
Wash., assists Prium Lakewood in its restructuring effort. Prium
Lakewood estimated its assets and debts at $10 million to $50
million as of the Petition Date.
Affiliates Chelsea Heights LLC (Bankr. W.D. Wash. Case No.
10-44959), Prium Kent Retail LLC (Bankr. W.D. Wash. Case No.
10-45715), Prium Meeker Mall LLC (Bankr. W.D. Wash. Case No.
10-45713), and Prium Tumwater Buildings LLC (Bankr. W.D. Wash.
Case No. 10-44962) filed separate Chapter 11 petitions.
PROVIDENCE HALL: Case Summary & 7 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Providence Hall Associates Limited Partnership
43312 Vestals Place
Leesburg, VA 20176
Bankruptcy Case No.: 11-11656
Chapter 11 Petition Date: March 9, 2011
Court: United States Bankruptcy Court
Eastern District of Virginia (Alexandria)
Judge: Stephen S. Mitchell
Debtor's Counsel: Thomas Mansfield Dunlap, Esq.
David Ludwig, Esq.
DUNLOP, GRUBB & WEAVER, PLLC
199 Liberty St. SW
Leesburg, VA 20175
Tel: (703) 777-7319
Fax: (703) 777-3656
E-mail: dludwig@dglegal.com
tdunlap@dglegal.com
Scheduled Assets: $6,558,174
Scheduled Debts: $3,060,679
A list of the Company's seven largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/vaeb11-11656.pdf
The petition was signed by Victor Guerrero, manager of Lake Shore
Family, LLC.
PURSELL HOLDINGS: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Pursell Holdings, LLC
300 N. Church Road
Liberty, MO 64068
Bankruptcy Case No.: 11-40999
Chapter 11 Petition Date: March 10, 2011
Court: U.S. Bankruptcy Court
Western District of Missouri (Kansas City)
Judge: Dennis R. Dow
Debtor's Counsel: Frank Wendt, Esq.
BROWN & RUPRECHT, P.C.
911 Main Street, Suite 2300
Kansas City, MO 64105-5319
Tel: (816) 292-7000
Fax: (816) 292-7050
E-mail: fwendt@brlawkc.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Michael D. Pursell, member.
Debtor-affiliate filing separate Chapter 11 petition:
Entity Case No. Petition Date
------ -------- -------------
Damon Pursell Construction Company 10-44965 09/15/10
Pursell Holdings' List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
North American Savings Bank Guaranty $5,000,000
12520 S. 71 Highway
Grandview, MO 64030
Bank of the West Guaranty $3,500,000
850 South State Route 291
Liberty, MO 64068
PAF Investment, LLC Guaranty $2,416,021
3100 Dundee, Suite 916
Northbrook, IL 60062
Pony Express Bank Guaranty $1,200,000
215 N. 291 Highway
Liberty, MO 64068
Bank of Franklin County Guaranty $1,120,000
900 East 8th Street
Washington, MO 63090
Commerical Credit Group Guaranty $600,000
212 S. Tryon Street, Suite 1400
Charlotte, NC 28281
Daman Pursell Construction Services $530,631
300 N. Church Road
Liberty, MO 64068
Clay County Collector Taxes $164,822
City of Kansas City Taxes $65,508
Randall McPike Services $36,775
BKD, LLP Services $17,800
Gunn, Shank & Stover Services $17,024
Pony Express Bank First Deed of Trust $12,867
City of Excelsior Springs Taxes $6,329
Vaughn Mechanical, Inc. Services $3,814
Chris Leon Mason Painting Services $3,703
Wilson Floor Coverings, Inc. Materials $3,271
Porter Roofing Company Services $2,630
All-American Redi-Mix, LLC Materials $1,919
City of Liberty Taxes $1,837
QUIET TITLE: Case Summary & 19 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Quiet Title Co., LLC
123 Grant Ave.
Santa Fe, NM 87501
Bankruptcy Case No.: 11-10978
Chapter 11 Petition Date: March 9, 2011
Court: United States Bankruptcy Court
New Mexico (Albuquerque)
Judge: James S. Starzynski
Debtor's Counsel: Koo Im Sakayo Tong, Esq.
MOORE, BERKSON, & GANDARILLA, P.C.
P.O. Box 7459
Albuquerque, NM 87194
Tel: (505) 242-1218
Fax: (505) 242-2836
E-mail: kooimt@swcp.com
Estimated Assets: $100,001 to $500,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 19 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/nmb11-10978.pdf
The petition was signed by J. Michael Hyatt, manager.
Debtor-affiliate that filed separate Chapter 11 petition:
Petition
Debtor Case No. Date
------ -------- ----
Joe Michael Hyatt 11-10973 03/09/11
QIMONDA NA: Panel to File Avoidance Suit v. German Affiliate
------------------------------------------------------------
Qimonda Richmond, LLC, and Qimonda North America Corp. have
entered into a deal with the official committee of unsecured
creditors appointed in the Debtors' bankruptcy cases, appointing
the committee as estate representative and conferring standing
upon the committee to prosecute or resolve all causes of action
relating to the avoidance of certain transfers made by the Debtors
to Qimonda Dresden GmbH & Co. oHG pursuant to Sections 544, 547
and 550 of the Bankruptcy Code. The accord allows the committee
to pursue up to $3.5 million in purported preferential payments
made by the Debtors to QDresden in the year preceding the Chapter
11 bankruptcy filing.
QDresden is a German subsidiary of the Debtors' parent, Qimonda
AG. Qimonda AG and QDresden filed applications to open insolvency
proceedings in Munich in January 2009. The local court in Munich,
the Amtsgericht - Munchen - Insolvenzgericht, in April 2009
entered an order commencing the foreign proceedings and appointing
Dr. Michael Jaffe to administer the reorganization or liquidation
of Qimonda AG and QDresden under the foreign court's supervision
in accordance with the insolvency laws of Germany.
The Debtors filed substantial claims against Qimonda AG and
QDresden in German insolvency court on June 12, 2009. The parent
and QDresden, in turn, filed proofs of claim for substantial
amounts in the Chapter 11 proceedings.
In May 2010, the Debtors filed a complaint for recharacterization,
equitable subordination, avoidance of fraudulent obligations, and
setoff, against Dr. Jaffe. The Debtors also objected to the
claims.
Any recovery from the Avoidance Action will accrue to the benefits
of the unsecured creditors.
Counsel to the Committee are:
William P. Bowden, Esq.
Amanda M. Winfree, Esq.
ASHBY & GEDDES, PA
500 Delaware Avenue, 8th Floor
P.O. Box 1150
Wilmington, DE 19899
Telephone: 302-654-1888
Facsimile: 302-654-2067
E-mail: wbowden@ashby-geddes.com
- and -
Gregory M. Gordon, Esq.
Daniel P. Winikka, Esq.
Craig F. Simon, Esq.
JONES DAY
2727 North Harwood Street
Dallas, Texas 75201-1515
Telephone: 214-220-3939
Facsimile: 214-969-5100
E-mail: gmgordon@jonesday.com
About Qimonda AG
Qimonda AG (NYSE: QI) -- http://www.qimonda.com/-- is a leading
global memory supplier with a diversified DRAM product portfolio.
The Company generated net sales of EUR1.79 billion in financial
year 2008 and had -- prior to its announcement of a repositioning
of its business -- approximately 12,200 employees worldwide, of
which 1,400 were in Munich, 3,200 in Dresden and 2,800 in
Richmond, Va.
Qimonda AG commenced insolvency proceedings in a local court in
Munich, Germany, on January 23, 2009. On June 15, 2009, QAG filed
a petition (Bankr. E.D. Va. Case No. 09-14766) for relief under
Chapter 15 of the U.S. Bankruptcy Code.
Qimonda North America Corp., an indirect and wholly owned
subsidiary of QAG, is the North American sales and marketing
subsidiary of QAG. QNA is also the parent company of Qimonda
Richmond LLC. QNA and QR sought Chapter 11 protection (Bankr.
D. Del. Case No. 09-10589) on Feb. 20, 2009. Mark D. Collins,
Esq., Michael J. Merchant, Esq., and Maris J. Finnegan, Esq.,
at Richards Layton & Finger PA, represent the Debtors.
Roberta A. DeAngelis, the United States Trustee for Region 3,
appointed seven creditors to serve on an official committee of
unsecured creditors. Jones Day and Ashby & Geddes represent the
Committee. In its bankruptcy petition, Qimonda Richmond, LLC,
estimated more than US$1 billion in assets and debts. The
information, the Debtors said, was based on Qimonda Richmond's
financial records which are maintained on a consolidated basis
with Qimonda North America Corp.
RADIO ONE: Incurs $26.62 Million Net Loss in 2010
-------------------------------------------------
Radio One, Inc., reported a consolidated net loss of $26.57
million on $71.20 million of net revenue for the three months
ended Dec. 31, 2010, compared with a consolidated net loss of
$14.21 million on $67.26 million of net revenue for the same
period during the prior year.
The Company also reported a consolidated net loss of
$26.62 million on $279.90 million of net revenue for the year
ended Dec. 31, 2010, compared with a consolidated net loss of
$48.55 million on $272.09 million of net revenue during the prior
year.
The Company's balance sheet at Dec. 31, 2010 showed
$999.21 million in total assets, $774.24 million in total
liabilities, redeemable noncontrolling interests of $30.63 million
and $194.33 million in total stockholders' equity.
Alfred C. Liggins, III, Radio One's CEO and President stated,
"Overall core radio revenues were up 8.1% in the fourth quarter
compared to last year led by national business, which was up
19.3%, and radio segment internet revenue, which was up 179.1%.
Our internet business revenues were down 8.0% this quarter
compared to the fourth quarter of 2009 but were up 14.1% for the
full year; and we continue to believe that our on-line platform
will be a major source of revenue and EBITDA growth for the
future. Q1 2011 has started sluggishly, with radio station
revenue currently pacing flat to up low single-digits on a
combined basis. Normalizing for a timing difference for Reach
Media's cruise, consolidated net revenue and EBITDA are expected
to be approximately flat year over year."
A full-text copy of the press release announcing the financial
results is available for free at:
http://ResearchArchives.com/t/s?74d7
About Radio One
Based in Washington, Radio One, Inc. (Nasdaq: ROIAK and ROIA) --
http://www.radio-one.com/-- is a diversified media company that
primarily targets African-American and urban consumers. The
Company is one of the nation's largest radio broadcasting
companies, currently owning 53 broadcast stations located in 16
urban markets in the United States. Radio One operates
syndicated programming including the Russ Parr Morning Show, the
Yolanda Adams Morning Show, the Rickey Smiley Morning Show, CoCo
Brother Live, CoCo Brother's "Spirit" program, Bishop T.D. Jakes'
"Empowering Moments", the Reverend Al Sharpton Show, and the
Warren Ballentine Show.
The Company also owns a controlling interest in Reach Media, Inc.
-- http://www.blackamericaweb.com/-- owner of the Tom Joyner
Morning Show and other businesses associated with Tom Joyner.
Radio One owns Interactive One -- http://www.interactiveone.com/
-- an online platform serving the African-American community
through social content, news, information, and entertainment,
which operates a number of branded sites, including News One,
UrbanDaily, HelloBeautiful, Community Connect Inc. --
http://www.communityconnect.com/-- an online social networking
company, which operates a number of branded Web sites, including
BlackPlanet, MiGente, and Asian Avenue and an interest in TV One,
LLC -- http://www.tvoneonline.com/-- a cable/satellite network
programming primarily to African-Americans.
* * *
Ernst & Young LLP, in Baltimore, Maryland, expressed substantial
doubt about the Company's ability to continue as a going concern
in its report on the Company's restated consolidated financial
statements for 2009. The independent auditors noted that in June
and July 2010 the Company violated certain covenants of its loan
agreements, which ultimately may result in significant amounts of
outstanding debt becoming callable by lenders.
Moody's Investors Service has repositioned Radio One Inc.'s
Probability of Default Rating to Caa2/LD, from Caa2, following
expiration of the 30-day grace period under the indenture
governing the company's 6.375% senior subordinated notes due 2013.
The August interest payment was not made in accordance with the
scheduled terms, and Moody's treats the failure to meet the
original contractual terms as a limited default. All of Radio
One's debt ratings remain under review for possible downgrade,
including Radio One's Caa1 corporate family rating.
RHI ENTERTAINMENT: DS Objection Deadline Moved to March 22
----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New york
has further extended to March 22, 2011, the deadline for filing
and serving objections to the adequacy and approval of the
disclosure statement explaining RHI Entertainment, Inc. and its
affiliated debtors' Plan of Reorganization, the approval of the
Solicitation Procedures and the confirmation of the Plan has been
further extended to Tuesday, March 22, 2011, at 4:00 p.m. (Eastern
Time).
As reported in the TCR on Feb. 24, 2011, the hearing to consider
the adequacy and approval of the Disclosure Statement, the
approval of the Solicitation Procedures and the confirmation of
the Plan has been continued to Tuesday, March 29, 2011, at 2:00
p.m. (Eastern Time).
About RHI Entertainment
New York-based RHI Entertainment, Inc., develops, produces and
distribute new made-for-television movies, mini-series and other
television programming worldwide. It filed for Chapter 11
bankruptcy protection (Bankr. S.D.N.Y. Case No. 10-16536) on
Dec. 10, 2010. D.J. Baker, Esq., Rosalie Walker Gray, Esq., Keith
A. Simon, Esq., Adam S. Ravin, Esq., and Jude Gorman, Esq., at
Latham & Watkins LLP, serve as the Debtors' bankruptcy counsel.
The Debtor disclosed $524,722,000 in total assets and $834,094,000
in total debts in its chapter 11 petition.
Affiliates RHI Entertainment, LLC (Bankr. S.D.N.Y. Case No.
10-16537), RHIE Holdings Inc. (Bankr. S.D.N.Y. Case No. 10-16538),
RHI Entertainment Holdings II, LLC (Bankr. S.D.N.Y. Case No.
10-16541), RHI Entertainment Distribution, LLC (Bankr. S.D.N.Y.
Case No. 10-16549), RHI International Distribution Inc. (Bankr.
S.D.N.Y. Case No. 10-16550), RHI Entertainment Productions, LLC
(Bankr. S.D.N.Y. Case No. 10-16551), HE Pro Tunes, Inc. (Bankr.
S.D.N.Y. Case No. 10-16552), HEGOA INC. (Bankr. S.D.N.Y. Case No.
10-16553), HEP Music, Inc. (Bankr. S.D.N.Y. Case No. 10-16554),
HEP SS Music Inc. (Bankr. S.D.N.Y. Case No. 10-16555), Don
Quixote, Inc. (Bankr. S.D.N.Y. Case No. 10-16556), Independent
Projects, Inc. (Bankr. S.D.N.Y. Case No. 10-16557), Library
Storage, Inc. (Bankr. S.D.N.Y. Case No. 10-16558), Metropolitan
Productions, Inc. (Bankr. S.D.N.Y. Case No. 10-16560), NGP
Holding, Inc. (Bankr. S.D.N.Y. Case No. 10-16561), and SLB
Productions, Inc. (Bankr. S.D.N.Y. Case No. 10-16562) filed
separate Chapter 11 petitions.
Logan & Company, Inc., serves as the Debtors' claims and noticing
agent.
RHI's First Lien Lenders are represented by Michael A. Chapnick,
Esq. -- mchapnick@morganlewis.com -- and Wendy S. Walker, Esq. --
wwalker@morganlewis.com -- at Morgan, Lewis & Bockius LLP, and
RHI's Second Lien Lenders are represented by Mark R. Somerstein,
Esq. -- mark.somerstein@ropesgray.com -- and Patricia I. Chen,
Esq. -- patricia.chen@ropesgray.com -- at Ropes & Gray LLP.
R.E.X. INC: Case Summary & 2 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: R.E.X., Inc.
3425 U.S. Rt. 60 E
Barboursville, WV 25504
Bankruptcy Case No.: 11-30157
Chapter 11 Petition Date: March 9, 2011
Court: United States Bankruptcy Court
Southern District of West Virginia (Huntington)
Judge: Ronald G. Pearson
Debtor's Counsel: Joe M. Supple, Esq.
SUPPLE LAW OFFICE, PLLC
801 Viand Street
Point Pleasant, WV 25550
Tel: (304) 675-6249
Fax: (304) 675-4372
E-mail: supplelawoffice@yahoo.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 two largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/wvsb11-30157.pdf
The petition was signed by Forrest R. Donahue, president.
RESERVE DEV'T: Corus Wants Stay Lifted to Allow It to Foreclose
---------------------------------------------------------------
Corus Construction Venture LLC has requested the U.S. Bankruptcy
Court for the District of Nevada to grant it relief from the
automatic stay to allow it to pursue a foreclosure sale that was
stayed by The Reserve Development LLC's bankruptcy filing, as to
the Debtor's condominium property in the Spanish Palms condominium
in Las Vegas. Corus tells the Bankruptcy Court that the automatic
stay should be terminated as this is a single real estate case,
and because of the Debtor's lack of equity and lack of a prospect
of an effective reorganization in a reasonable period of time.
In support of its claim that there is no effective reorganization
in prospect, Corus states:
1. The Plan is not confirmable on its face because:
-- the Plan improperly classifies the unsecured debt to
isolate and unfairly discriminate against Corus' unsecured
deficiency claim;
-- the Plan does not give the secured creditor deferred
payments equal to the value of the collateral; and
-- the Plan violates the Absolute Priority Rule, which, with
one exception, prohibits the bankruptcy court from
confirming the Plan if any of the debtor's former equity
holders retain any equity interest in the estate without
also providing to senior objecting creditors cash or other
property equal to the present value of their claim.
2. Debtor cannot confirm a Plan without the approval of Corus,
the only secured creditor. Corus also has an unsecured
claim, which should properly belong in the same class as the
other unsecured creditors. Thus, any plan capable of being
approved could have only two voting classes - secured and
unsecured. Even if all other unsecured claimants voted to
accept the Plan, Corus, whose unsecured claim dwarfs all
unsecured caims, would prevent class acceptance.
Corus, the first secured lender, is owed approximately
$25.7 million as of the petition date, secured by the Debtor's
remaining 188 condominium units and related common area in the
Spanish Palms condominiums located at 5250 S. Rainbow Boulevard,
in Las Vegas, which the Debtor claims has a market value of
approximately $14 million, leaving an unsecured deficiency claim
in the approximate amount of $11.7 million.
Corus relates that at the Jan. 21, 2011 hearing on the disclosure
statement explaining the Debtor's plan of reorganization, Debtor's
counsel asked that the matter be taken off calendar purportedly
due to an unexpected large secured claim having been filed shortly
before the hearing (the proof of claim bar date having been
Jan. 19, 2011), requiring an amended plan and disclosure
statement. The Court did so. Thus, Corus contends, there is no
disclosure statement and plan pending before the Bankruptcy Court.
On Dec. 3, 2010, the Debtor filed a disclosure statement
explaining its plan of reorganization. On the Effective Date of
the Plan, the Debtor will provide a New Value Contribution in the
amount of $750,000.
Pursuant to the Plan terms, Corus' Secured Claim will be satisfied
by modification of the Corus Loan and the Corus Loan Documents, to
reduce the loan amount to $14,000,000. The loan modification will
reflect a 25 year amortization, at 3% interest, that matures 7
years after the Effective Date. The loan modification will also
permit the Reorganized Debtor three one-year extensions of the
loan maturity date, and it will contain release prices, in the
event that the Debtor resumes the sale of condominium units.
There are two Classes of Unsecured Claims. The first class is the
Administrative Convenience Class, consisting of all claims against
the Debtor that are less than $15,000. The second class of
unsecured claims consists of the General Unsecured Claims, which
consists of all unsecured claims against the Debtor in excess of
$15,000, which include the Corus Loan unsecured, deficiency claim.
The Administrative Convenience Class will be paid in full on the
initial Distribution Date. Allowed General Unsecured Claims will
receive $250,000 from Effective Date Cash on the Initial
Distribution Date. Thereafter, for 12 consecutive quarterly
distributions, Allowed General Unsecured Claims will receive
Interim Distributions from the New Value Contribution in the
amount of $62,500 each quarter until the New Value Contribution
has been paid in full.
Equity interests will retain their Equity Interests in the
Reorganized Debtor.
A complete text of the Disclosure Statement is available for free
at http://bankrupt.com/misc/ReserveDevt.DS.pdf
The Reserve Development LLC, based in Las Vegas, Nevada, owns and
operates the remaining unsold units of the Spanish Palms
Condominium Project, a fractured 372 unit condominium project
located at 5250 South Rainbow, in Las Vegas, Nevada. The Company
filed for Chapter 11 bankruptcy protection on Sept. 1, 2010
(Bankr. D. Nev. Case No. 10-26715). Laurel E. Davis, Esq., at
Fennemore Craig, P.C., represents the Debtor. In its schedules,
the Company disclosed $13,274,818 in assets and $25,842,878 in
liabilities as of the Petition Date.
REYNOLDS & REYNOLDS: Moody's Upgrades Corp. Family Rating to 'Ba2'
------------------------------------------------------------------
Moody's Investors Service upgraded the ratings on The Reynolds &
Reynolds Company's debt: Corporate Family Rating to Ba2 from Ba3,
the Probability of Default Rating to Ba3 from B1, and the Senior
Secured Credit Facilities to Ba2 from Ba3. Moody's also assigned
Ba2 ratings to the proposed $600 million senior secured term loan
A due 2016 and $950 million senior secured term loan B due 2018,
which will refinance the existing Senior Secured Term Loan (due
2017). Ratings on the existing Senior Secured Credit Facilities
will be withdrawn following completion of the refinancing. The
outlook is revised to stable from positive.
Ratings Rationale
The ratings upgrade "reflects the ongoing improvement in Reynolds'
core automotive dealer management systems operations, enhanced
credit protection measures, as well as the expectation of further
reduction in total debt to EBITDA to below the 3x level,"
according to Moody's vice president, Gregory Fraser. This is a
function of Reynolds' consistent year-over-year expansion in
operating margin and EBITDA, as well as its high conversion of
EBITDA to free cash flow.
Moody's expects Reynolds to continue to de-lever through a
combination of EBITDA expansion and debt repayment. This should
result in total debt to EBITDA (Moody's adjusted) declining to
under 3x over the coming year versus about 3.4x as of December 31,
2010. The rating revision also captures the significant interest
savings (approximately $23 million per annum) as a result of the
proposed refinancing which should further improve debt protection
measures. Moody's views favorably the redistribution of Reynolds'
debt maturity profile across a three-year time span (2016-18) as a
result of the proposed transaction.
The stable rating outlook reflects the company's leading
automotive dealership management systems market share which
results in good revenue visibility from its recurring software
maintenance business, and the importance of automotive services
and DMS to automotive retailers' day-to-day operations. Given
that Reynolds will no longer have access to a revolver, Moody's
expect the company to maintain at least $100 million of cash and
generate substantial free cash flow.
The rating could be upgraded following steady organic revenue
growth, particularly from successful initiatives targeting dealer
spend outside Reynolds' traditional DMS business without impairing
its core DMS operations, expand margins and reduce total debt to
EBITDA to under 2x (Moody's adjusted). However, Moody's view
Reynolds' termination of its revolver as a credit negative. So
any upgrade is unlikely until a fully committed credit facility is
restored.
The rating could be lowered if Reynolds experienced customer
and/or market share losses resulting in meaningful revenue
contraction, margin erosion, and lower EBITDA and free cash flow.
Leverage above 3.5x adjusted total debt to EBITDA could also
result in a downgrade.
Reynolds intends to use the new facility proceeds to refinance its
existing $1.6 billion senior secured term loan maturing 2017.
Moody's will withdraw the ratings on the existing credit
facilities upon their full retirement.
These ratings were upgraded:
-- Corporate Family Rating to Ba2 from Ba3
-- Probability of Default Rating to Ba3 from B1
-- $1.6 Billion (originally $1.82 Billion) Senior Secured Term
Loan due 2017 to Ba2 (LGD-3, 32%) from Ba3 (LGD-3, 32%)
-- $75 Million Senior Secured Revolving Credit Facility due 2015
to Ba2 (LGD-3, 32%) from Ba3 (LGD-3, 32%)
These new ratings were assigned:
-- $600 Million Senior Secured Term Loan A due 2016 -- Ba2 (LGD-
3, 31%)
-- $950 Million Senior Secured Term Loan B due 2018 -- Ba2 (LGD-
3, 31%)
The last rating action was on April 7, 2010, when Moody's upgraded
the company's Corporate Family Rating to Ba3 with a positive
outlook.
The Reynolds & Reynolds Company, headquartered in Dayton, Ohio, is
a privately-owned leading provider of dealership management
systems and integrated solutions for automotive retailers.
RHI ENTERTAINMENT: Seeks to Transfer New York Headquarters
----------------------------------------------------------
The Bankruptcy Court will convene a hearing Tuesday to consider
the request of RHI Entertainment, LLC and RHI Entertainment,
Inc.,a to enter into a lease agreement for a new headquarters
with West 55th Street Building LLC.
The Debtors' New York office is currently located at 1325 Avenue
of the Americas, New York. The Debtors lease their current
premises from 1325 Avenue of the Americas, L.P., under a lease
agreement, dated May 22, 2008. The Debtors lease the entire 21st
floor, a portion of the 22nd floor, and certain storage space.
As a result of the financial difficulties that led to the filing
of the Chapter 11 Cases, the Debtors failed to make certain
payments on account of rent and other amounts due under the
Original Lease. Accordingly, prior to the Petition Date, the
Debtors entered into negotiations with 1325 Avenue, which led to
the amendment of the lease agreement. Pursuant to the Amended
Lease, the Debtors agreed, among other things, to (i) relinquish
possession of the 22nd floor, (ii) make payments on account of
certain unpaid rent that was due and owing under the Original
Lease and (iii) make monthly rent payments through April 30, 2011,
the new termination date under the Amended Lease. The Original
Lease was scheduled to terminate on July 1, 2019.
After executing the Amended Lease in October, the Debtors engaged
a real estate broker and undertook an extensive search for
appropriate space into which they could move after the expiration
of the Amended Lease. In the course of that search, the Debtors
located office space on the 12th floor of an office building at
423 West 55th Street that they believe will accommodate their
business needs in a cost-effective manner.
Among other terms, the New Lease will have a term of 10 years and
two months, beginning on the Commencement Date, which is expected
to occur on or about May 1, 2011. The Debtors have an option for
one five-year extension of the New Lease.
The Debtors will pay $854,000 in annual fixed rent payments from
the Commencement Date through the fifth anniversary of the
Commencement Date. After the fifth anniversary of the
Commencement Date, the Fixed Rent will increase to $951,600 per
year. For the first two months of the New Lease and the first
three months of the sixth lease year, the Debtors are not required
to make any payments in respect of Fixed Rent.
Upon execution of the New Lease, the Debtors will provide a cash
deposit or letter of credit to the New Landlord for $902,800.
About RHI Entertainment
New York-based RHI Entertainment, Inc., develops, produces and
distribute new made-for-television movies, mini-series and other
television programming worldwide. It filed for Chapter 11
bankruptcy protection (Bankr. S.D.N.Y. Case No. 10-16536) on
Dec. 10, 2010. D.J. Baker, Esq., Rosalie Walker Gray, Esq., Keith
A. Simon, Esq., Adam S. Ravin, Esq., and Jude Gorman, Esq., at
Latham & Watkins LLP, serve as the Debtors' bankruptcy counsel.
The Debtor disclosed $524,722,000 in total assets and $834,094,000
in total debts in its chapter 11 petition.
Affiliates RHI Entertainment, LLC (Bankr. S.D.N.Y. Case No.
10-16537), RHIE Holdings Inc. (Bankr. S.D.N.Y. Case No. 10-16538),
RHI Entertainment Holdings II, LLC (Bankr. S.D.N.Y. Case No.
10-16541), RHI Entertainment Distribution, LLC (Bankr. S.D.N.Y.
Case No. 10-16549), RHI International Distribution Inc. (Bankr.
S.D.N.Y. Case No. 10-16550), RHI Entertainment Productions, LLC
(Bankr. S.D.N.Y. Case No. 10-16551), HE Pro Tunes, Inc. (Bankr.
S.D.N.Y. Case No. 10-16552), HEGOA INC. (Bankr. S.D.N.Y. Case No.
10-16553), HEP Music, Inc. (Bankr. S.D.N.Y. Case No. 10-16554),
HEP SS Music Inc. (Bankr. S.D.N.Y. Case No. 10-16555), Don
Quixote, Inc. (Bankr. S.D.N.Y. Case No. 10-16556), Independent
Projects, Inc. (Bankr. S.D.N.Y. Case No. 10-16557), Library
Storage, Inc. (Bankr. S.D.N.Y. Case No. 10-16558), Metropolitan
Productions, Inc. (Bankr. S.D.N.Y. Case No. 10-16560), NGP
Holding, Inc. (Bankr. S.D.N.Y. Case No. 10-16561), and SLB
Productions, Inc. (Bankr. S.D.N.Y. Case No. 10-16562) filed
separate Chapter 11 petitions.
Logan & Company, Inc., serves as the Debtors' claims and noticing
agent.
RHI's First Lien Lenders are represented by Michael A. Chapnick,
Esq. -- mchapnick@morganlewis.com -- and Wendy S. Walker, Esq. --
wwalker@morganlewis.com -- at Morgan, Lewis & Bockius LLP, and
RHI's Second Lien Lenders are represented by Mark R. Somerstein,
Esq. -- mark.somerstein@ropesgray.com -- and Patricia I. Chen,
Esq. -- patricia.chen@ropesgray.com -- at Ropes & Gray LLP.
RINCON DEVELOPERS: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Rincon Developers Phase II, LLC
c/o David Kriozere
489 Harrison St., #306
San Francisco, CA 94105
Bankruptcy Case No.: 11-30926
Chapter 11 Petition Date: March 9, 2011
Court: United States Bankruptcy Court
Northern District of California (San Francisco)
Judge: Dennis Montali
Debtor's Counsel: Heinz Binder, Esq.
Roya Shakoori
LAW OFFICES OF BINDER AND MALTER
2775 Park Ave.
Santa Clara, CA 95050
Tel: (408) 295-1700
E-mail: heinz@bindermalter.com
roya@bindermalter.com
Scheduled Assets: $45,000
Scheduled Debts: $38,716,616
A list of the Company's 20 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/canb11-30926.pdf
The petition was signed by David Kriozere, vice president of The
Kriozere Corporation, et al.
Debtor-affiliate that filed separate Chapter 11 petition:
Petition
Debtor Case No. Date
------ -------- ----
Urban West Rincon Developers II, LLC 11-30924 03/09/11
RIVIERA HOLDINGS: Sternlicht Get Board's Temporary OK to Purchase
-----------------------------------------------------------------
Howard Stutz at the Las Vegas Review-Journal reports that
financier Barry Sternlicht was not ready to commit to a full-on
redevelopment of the aging Riviera. Mr. Sternlicht told Nevada
gaming regulators, however, he plans to celebrate the heritage of
the 55-year-old Strip resort, which his company is acquiring out
of bankruptcy.
The Gaming Control Board gave tentative approval of Sternlicht's
purchase of 2,075-room Riviera, which was restructured in a
Chapter 11 filing with the U.S. Bankruptcy Court, according to the
report.
Mr. Sternlicht will control 79% of the Riviera while longtime
Riviera investor Derek Stevens, who owns 50% of the Golden Gate,
will own the other 21%, says Mr. Stutz.
The report says the deal completes a two-year quest by Sternlicht
to get control of the Riviera, which went into bankruptcy
following the death of former chief executive William Westerman
last April.
The report notes that the Riviera is expected to emerge from
bankruptcy by the end of the month if the Nevada Gaming Commission
signs off on the acquisition March 24. Messrs. Sternlicht,
Stevens and other Riviera management will still need to licensed
by Nevada gaming regulators.
About Riviera Holdings
Riviera Holdings Corporation, through its wholly owned subsidiary,
Riviera Operating Corporation, owns and operates the Riviera Hotel
& Casino located in Las Vegas, Nevada, which consists of a hotel
comprised of five towers with 2,075 guest rooms, including 177
suites, and which has traditional Las Vegas-style gaming,
entertainment and other amenities.
In addition, Riviera Holdings, through its wholly-owned
subsidiary, Riviera Black Hawk, Inc., owns and operates the
Riviera Black Hawk Casino, a casino in Black Hawk, Colorado and
has various non-gaming amenities, including parking, buffet-styled
restaurant, delicatessen, a casino bar and a ballroom.
Riviera Holdings together with the two affiliates filed for
Chapter 11 on July 12, 2010 in Las Vegas, Nevada (Bankr. D. Nev.
Case No. 10-22910). Riviera Holdings estimated assets and debts
of $100 million to $500 million in its petition. Thomas H. Fell,
Esq., at Gordon Silver, represents the Debtors in the Chapter 11
cases. XRoads Solutions Group, LLC, is the financial and
restructuring advisor. Garden City Group Inc. is the claims and
notice agent.
Riviera Holdings' Second Amended Joint Plan of Reorganization was
confirmed on Nov. 17, 2010. Under the Plan, nearly $280 million
in debt will be replaced with a $50 million loan. Creditors will
receive new stock relative to what they are owed, and holders of
current stock will receive nothing. A total of $10 million in
working capital will come from the new owners, along with $20
million in loans to cover investments in the Las Vegas hotel.
ROTECH HEALTCHARE: Announces Pricing of $290MM Notes Offering
-------------------------------------------------------------
Rotech Healthcare Inc. announced the pricing of its offering of
$290 million in aggregate principal amount of Senior Second Lien
Notes due 2018. The notes will be sold to investors at a price of
98.197% of the principal amount thereof and will bear a coupon
rate equal to 10.500% per annum. The offering is expected to
close on March 17, 2011.
The Company estimates that the proceeds from this offering will be
approximately $284.8 million before deducting the initial
purchasers' discounts and estimated offering expenses. The
Company will use the net proceeds of the offering, together with
cash on hand, to repay all of its Senior Subordinated Notes due
2012 of approximately $287 million.
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 are
being sold 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 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.
As reported by the Troubled Company Reporter on March 10, 2011,
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 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.
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.
SBLI USA: AM Best Downgrades Financial Strength Rating to 'B'
-------------------------------------------------------------
A.M. Best Co. has downgraded the financial strength rating to B
(Fair) from B+ (Good) and issuer credit ratings to "bb" from "bbb-
" of SBLI USA Mutual Life Insurance Company, Inc. (SBLI USA) (New
York, NY) and its wholly owned subsidiary, S.USA Life Insurance
Company, Inc. (Phoenix, AZ). The two companies are collectively
referred to as the SBLI USA Group. The outlook for all ratings is
negative.
The ratings reflect SBLI USA's statutory results at year-end 2010,
which show a material decline in the company's absolute level of
capital and surplus. This decline was triggered primarily by
substantial unrealized investment losses generated due to "mark to
market" adjustments precipitated by the NAIC's reclassification of
certain commercial mortgage-backed securities. Additionally,
approximately $20 million of one-time costs associated with the
group's restructuring strategies added to the decline. Based on
Best's Capital Adequacy Ratio (BCAR), these reduced levels of
capital and surplus could no longer support the company's previous
ratings.
In maintaining the negative outlook, A.M. Best remains concerned
that SBLI USA's overall investment concentration in real estate
(that also includes non-agency residential mortgage-backed
structured securities -- with some exposure to the sub-prime and
Alt-A residential mortgage markets -- and its direct investments
in real estate held for sale and limited real estate
partnerships), could be at risk for additional investment losses
should the U.S.' fragile economic recovery stall or deteriorate.
Offsetting these factors is the group's positive operating
performance that A.M. Best believes should return to a more
normalized level going forward as the group continues to manage
its existing insurance businesses.
SEAHAWK DRILLING: Equity Panel Offers Alternative Financing
-----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports the official shareholders' committee for Seahawk Drilling
Inc. said it identified lenders who would provide financing on
terms more favorable than those up for approval March 11 in U.S.
Bankruptcy Court in Corpus Christi, Texas.
Mr. Rochelle recounts that Seahawk has won interim approval to
borrow $28.5 million from an affiliate of DE Shaw & Co. The
initial draw on the loan paid off the existing $18.2 million
secured loan from Natixis. At the March 11 hearing, Seahawk was
seeking final approval for a $35 million loan.
Mr. Rochelle discloses that the official equity committee, formed
just over a week ago, complained about the 15% interest rate on
the Shaw loan and allegedly excessive fees. The equity committee
said there are lenders offering more favorable terms and claimed
Seahawk "rebuffed" approaches from other lenders.
The equity committee has asked that the March 11 hearing be
adjourned to accommodate discussions with other lenders.
The equity committee contends Seahawk is "clearly solvent." The
stock closed March 10 at $6.48 a share, up from a closing low of
$4.11 on Feb. 23.
"The DIP credit facility is significantly over-market, and imposes
harsh restrictions on the debtors' ability to manage these Chapter
11 cases," the equity holders said in papers filed Wednesday with
the U.S. Bankruptcy Court in Corpus Christi, Texas, the Equity
Committee said, according to Dow Jones' DBR Small Cap.
The Equity Committee is represented by:
Charles R. Gibbs, Esq.
Michael P. Cooley, Esq.
AKIN GUMP STRAUSS HAUER & FELD LLP
1700 Pacific Avenue, Suite 4100
Dallas, Texas 75201
Telephone: (214) 969-2800
Fax: (214) 969-4343
- and -
David H. Botter, Esq.
AKIN GUMP STRAUSS HAUER & FELD LLP
One Bryant Park
New York, New York 1036
Tel: (212) 872-1000
Fax: (212) 872-1002
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., serves
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. Judy A.
Robbins, U.S. Trustee for Region 7, appointed three creditors to
serve on an Official Committee of Unsecured Creditors of Seahawk
Drilling Inc. and its debtor-affiliates. Heller, Draper, Hayden,
Patrick & Horn, L.L.C., represents the creditors committee.
The Debtors disclosed $504,897,000 in total assets and
$124,474,000 in total debts as of the Petition Date.
SEMINOLE CASUALTY: AM Best Cuts Financial Strength Rating to 'E'
----------------------------------------------------------------
A.M. Best Co. has downgraded the financial strength rating to E
(Under Regulatory Supervision) from C+ (Marginal) and issuer
credit rating to "rs" from "b-" of Seminole Casualty Insurance
Company (Tamarac, FL).
On March 4, 2011, The State of Florida issued an order suspending
the certificate of authority of Seminole Casualty Insurance
Company.
SEQUENOM INC: Incurs $120.84 Million Net Loss in 2010
-----------------------------------------------------
Sequenom, Inc., reported a net loss of $22.02 million on
$13.75 million of total revenue for the three months ended Dec.
31, 2010, compared with a net loss of $18.40 million on $10.78
million of total revenue for the same period during the prior
year.
The Company also reported a net loss of $120.84 million on
$47.45 million of total revenue for the year ended Dec. 31, 2010,
compared with a net loss of $71.01 million on $37.86 million of
total revenue during the prior year.
The Company's balance sheet at Dec. 31, 2010 showed
$174.27 million in total assets, $23.54 million in total
liabilities and $150.73 million in total stockholders' equity.
A full-text copy of the press release announcing the financial
results is available for free at:
http://ResearchArchives.com/t/s?74d8
About Sequenom
Sequenom, Inc. (NASDAQ: SQNM) -- http://www.sequenom.com/-- is a
life sciences company committed to improving healthcare through
revolutionary genetic analysis solutions. Sequenom develops
innovative technology, products and diagnostic tests that target
and serve discovery and clinical research, and molecular
diagnostics markets. The company was founded in 1994 and is
headquartered in San Diego, California.
* * *
In its March 15, 2010 audit report, Ernst & Young LLP of San
Diego, California, expressed substantial doubt against Sequenom's
ability as a going concern. The auditor noted that the Company
has incurred recurring operating losses and does not have
sufficient working capital to fund operations through 2010.
SIX3 SYSTEMS: Moody's Assigns 'B3' Corporate Family Rating
----------------------------------------------------------
Moody's Investors Service has assigned Six3 Systems, Inc., a
corporate family and probability of default rating of B3. The
company's planned first lien credit facility has also been
assigned a B3 rating. The rating outlook is stable. Proceeds
from the planned facility will refinance Six3's existing bank debt
and sponsor/management-held subordinate debt, fund an earn-out
payment, and provide $28 million of additional balance sheet cash.
On a Moody's adjusted basis (includes 50% debt treatment of
ultimate parent holding company preferred equity), the 2010 debt
to EBITDA ratio, proforma for the transaction, would rise to the
mid-7x range from 6x, unadjusted to the mid-5x range from 4x.
Ratings Rationale
The B3 corporate family rating balances a well-positioned
defense/intelligence service offering against small size, an
acquisitive focus, and a brief operating history. The company
provides "ISR" (intelligence, surveillance, reconnaissance)
services within the U.S. intelligence community, centered on
developing and maintaining subsystems that boost intelligence
data. The U.S. government's emphasis on asymmetric warfare
threats and cyber security will likely drive funding and outlays
for technologically complex intelligence systems, and efforts to
improve security of government facilities and networks-this
fundamental driver should support demand for Six3's work. Outlays
on these more intelligence systems-based areas should continue
despite a U.S. budget shift toward greater fiscal austerity.
Although Six3 is largely comprised of two smaller, intelligence
community service contractors acquired in 2009, the company has
limited exposure to small business set-aside contracts, which
should limit risk of contracts not continuing at renewal. Moody's
expect annual revenues will grow in the mid-single digit
percentage range over the next few years.
Six3's 2010 EBITDA margin (+12%, Moody's adjusted) is strong
versus peers; the level could eventually tighten but Moody's see
the risk as an intermediate-term, rather than a near-term, one.
Although the government's ability to economically in-source work
that Six3's contracts cover will probably remain low, beyond 2012
the U.S. government's shift to fiscal austerity could reduce the
rates paid to contractors.
The rating anticipates that Six3 will be acquisitive, to quickly
gain greater scale as the niche grows. Although balance sheet
cash added from the planned facility's proceeds and free cash flow
should fund a portion of acquisition growth, pace of expansion and
valuation multiples of companies that would complement Six3 will
probably require external capital. The B3 CFR contemplates
periods of elevated leverage related to acquisition activity as
the company pursues its goals.
Upward rating momentum would likely follow expectation of debt to
EBITDA sustained below 5.5 times, EBIT to interest above 1.5
times, free cash flow to debt in the high single digit percentage
range, and an adequate liquidity profile.
Downward rating momentum would likely follow expectation of debt
to EBITDA sustained above 7.5 times, lack of profitability, or a
weakening liquidity profile.
Ratings are, subject to review of final documentation:
* Corporate family, B3
* Probability of default, B3
* $30 million first lien revolver due 2016, B3 LGD3, 44%
* $140 million first lien term loan due 2017, B3 LGD3, 44%
Six3 Systems, Inc., provides strategic and differentiated
solutions and services to Unites States Government agencies in
support of the nation's national security priorities. Revenues in
2010 were approximately $230 million.
SMART ONLINE: Atlas Capital Holds 40% Equity Stake
--------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Atlas Capital, SA, disclosed that it
beneficially owns 7,265,269 shares of common stock of Smart
Online, Inc., representing 40% of the shares outstanding. As of
Nov. 11, 2010, there were 18,343,542 shares of the Company's
common stock, par value $0.001 per share, outstanding.
As of March 4, 2011, Atlas Capital has acquired, in the aggregate,
7,265,269 shares of Common Stock either from the Company or from
other shareholders of the Company. Atlas Capital has paid an
aggregate of $19,644,247 for these shares from corporate funds,
including 56,206 shares acquired from Dennis Michael Nouri (the
former President and Chief Executive Officer of the Company)
pursuant to a note cancellation agreement. In exchange for the
shares acquired from Mr. Nouri, Atlas Capital cancelled a note
under which Mr. Nouri owed Atlas Capital principal and interest
totaling $85,117.
On Nov. 14, 2007, in an initial closing, the Company sold
convertible secured subordinated notes due Nov. 14, 2010 in the
aggregate principal amount of $3.3 million to noteholders,
including Atlas Capital. In addition, the Noteholders committed
to purchase Notes of up to an aggregate principal amount of $5.2
million, on a pro rata basis, upon approval and call by the
Company's Board of Directors in future closings. On Aug. 12,
2008, the Company exercised its option to sell Notes in the
aggregate principal amount of $1.5 million with substantially the
same terms and conditions as the Notes sold on Nov. 14, 2007. In
connection with the sale of the additional Notes, the Noteholders
holding a majority of the aggregate principal amount of the Notes
outstanding agreed to increase the aggregate principal amount of
Notes that they committed to purchase from $8.5 million to
$15.3 million. On Nov. 21, 2008, the Company sold Notes in the
aggregate principal amount of $500,000 to two new investors, and
on Jan. 6, 2009, the Company sold a Note in the principal amount
of $500,000 to the Reporting Person, all on substantially the same
terms and conditions as the previously issued Notes.
On Feb. 24, 2009, the Company sold a Note in the principal amount
of $500,000 to Atlas Capital on substantially the same terms and
conditions as the previously issued Notes. On the same date, the
Noteholders holding a majority of the aggregate principal amount
of the Notes outstanding agreed that the Company may sell
additional convertible secured subordinated notes in an aggregate
principal amount of up to $6 million to new investors or existing
Noteholders at any time on or before Dec. 31, 2009 with a maturity
date of Nov. 14, 2010 or later. In addition, the definition of
"Maturity Date" for each of the Notes was changed from Nov. 14,
2010 to the date upon which the Note is due and payable, which is
the earlier of (1) Nov. 14, 2010, (2) a change of control, or (3)
if an event of default occurs, the date upon which Noteholders
accelerate the indebtedness evidenced by the Notes.
About Smart Online
Headquartered in Durham, North Carolina, Smart Online, Inc. (OTC
BB: SOLN) -- http://www.smartonline.com/-- develops and markets
software products and services targeted to small businesses that
are delivered via a Software-as-a-Service (SaaS), or SaaS, model.
The Company also provides Web site consulting services, primarily
in the e-commerce retail industry products and services.
Smart Online reported a net loss of $1.32 million on $260,968 of
total revenues for the three months ended Sept. 30, 2010, compared
with a net loss of $2.86 million on $293,650 of total revenues for
the same period a year ago.
The Company's balance sheet at Sept. 30, 2010, showed $631,424 in
total assets, $18.72 in total liabilities, and a stockholders'
deficit of $18.10 million.
SOUTH FORK: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: South Fork Farms, LLC
aka Southfork Dairy
aka Chuck Adams
aka John Adams
8375 S Stoney Lake Rd
Jackson, MI 49201
Bankruptcy Case No.: 11-46267
Chapter 11 Petition Date: March 9, 2011
Court: United States Bankruptcy Court
Eastern District of Michigan (Detroit)
Judge: Steven W. Rhodes
Debtor's Counsel: Daniel L. Kraft, Esq.
THE KRAFT LAW FIRM, PLLC
320 W. Ottawa
Lansing, MI 48933
Tel: (517) 485-8885
E-mail: kraftd3@sbcglobal.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 20 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/mieb11-46267.pdf
The petition was signed by Charles O. Adams, member.
SPECIALTY PRODUCTS: Keating Muething to Represent Asbestos Trust
----------------------------------------------------------------
The United States Mineral Products Company Asbestos Personal
Injury Settlement Trust has substituted Keating Muething & Klekamp
PLL as its lead counsel in place and instead of John J. Preefer,
Esq., to represent it with respect to the bankruptcy cases of
Specialty Products Holdings Corp., et al. The Rosner Law Group
LLC remains as the trust's local counsel.
Counsel to United States Mineral Products Company Asbestos
Personal Injury Settlement Trust may be reached at:
Frederick B. Rosner, Esq.
Scott J. Leonhardt, Esq.
Brian L. Arban, Esq.
THE ROSNER LAW GROUP LLC
824 Market Street, Suite 810
Wilmington, DE 19801
Tel: 302-777-1111
E-mail: rosner@teamrosner.com
Leonhardt@teamrosner.com
- and -
Kevin E. Irwin, Esq.
Jennifer J. Morales, Esq.
KEATING MUETHING & KLEKAMP PLL
One East Fourth Street, Suite 1400
Cincinnati, OH 45202
Phone: 513-579-6400
Fax: 513-579-6457
E-mail: kirwin@kmklaw.com
jmorales@kmklaw.com
About Specialty Products
Cleveland, Ohio-based Specialty Products Holdings Corp., aka RPM,
Inc., is a wholly owned subsidiary of RPM International Inc. The
Company is the holding company parent of Bondex International,
Inc., and the direct or indirect parent of certain additional
domestic and foreign subsidiaries. The Company claims to be a
leading manufacturer, distributor and seller of various specialty
chemical product lines, including exterior insulating finishing
systems, powder coatings, fluorescent colorants and pigments,
cleaning and protection products, fuel additives, wood treatments
and coatings and sealants, in both the industrial and consumer
markets.
The Company and filed for Chapter 11 bankruptcy protection on May
31, 2010 (Bankr. D. Del. Lead Case No. 10-11780), estimating its
assets and debts at $100,000,001 to $500,000,000. The Company's
affiliate, Bondex International, Inc., filed a separate Chapter 11
petition on May 31, 2010 (Case No. 10-11779), estimating its
assets and debts at $100,000,001 to $500,000,000.
Gregory M. Gordon, Esq., Dan B. Prieto, Esq., and Robert J. Jud,
Esq., at Jones Day, serve as bankruptcy counsel to the
Debtors. Daniel J. DeFranceschi, Esq., and Zachary I. Shapiro,
Esq., at Richards Layton & Finger, serve as co-counsel. Logan and
Company is the Company's claims and notice agent. Blackstone
Advisory Partners L.P. is the Debtors' financial advisor and
investment banker.
As of the Petition Date, the Debtors were defendants in over
10,000 pending asbestos-related bodily injury lawsuits. A
significant portion of these lawsuits involve mesothelioma claims.
Attorneys at Montgomery McCracken Walker & Rhoads, LLP, serve as
counsel to the Committee of Asbestos Personal Injury Claimants.
ST. VINCENT: Rudins, North Shore LIJ to Buy Property for $260MM
---------------------------------------------------------------
Bill Rochelle, Bloomberg News' bankruptcy columnist, reports that
St. Vincent Catholic Medical Centers, a shuttered 727-bed acute-
care hospital in Manhattan's Greenwich Village, has an agreement
to sell the property for $260 million in cash to the Rudin family
and North Shore-Long Island Jewish Health System. The sale, which
wouldn't be tested by auction, isn't contingent on zoning,
landmark or other regulatory approval, a court filing says. The
sale is to be considered for approval at a hearing in U.S.
Bankruptcy Court in Manhattan on April 7.
According to the report, North Shore LIJ will invest $110 million
while renovating the O'Toole Building to serve as a freestanding
emergency department for 72,000 patients a year. The Rudins will
contribute $10 million toward the health-care project. The Rudins
also will develop the remainder of the property. The hospital's
motion says that sale proceeds together with other assets should
be sufficient for full payment to General Electric Capital Corp.,
the principal secured creditor owed $313 million. Other claims
will be paid "in accordance with their priority," according to the
motion.
Mr. Rochelle discloses that according to the court filing, the
hospital had been negotiating with the Rudins after the prior
bankruptcy and before the new one. Another potential buyer was
making offers in competition with the Rudins.
About Saint Vincents
Saint Vincents Catholic Medical Centers of New York, doing
business as St. Vincent Catholic Medical Centers --
http://www.svcmc.org/-- was anchored by St. Vincent's Hospital
Manhattan, an academic medical center located in Greenwich Village
and the only emergency room on the Westside of Manhattan from
Midtown to Tribeca, St. Vincent's Westchester, a behavioral health
hospital in Westchester County, and continuing care services that
include two skilled nursing facilities in Brooklyn, another on
Staten Island, a hospice, and a home health agency serving the
Metropolitan New York area.
Saint Vincent Catholic Medical Centers of New York and six of its
affiliates first filed for Chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case Nos. 05-14945 through 05-14951).
St. Vincents Catholic Medical Centers returned to bankruptcy court
by filing another Chapter 11 petition (Bankr. S.D.N.Y. Case No.
10-11963) on April 14, 2010. The Debtor estimated assets of
$348 million against debts totaling $1.09 billion in the new
petition.
Although the hospitals emerged from the prior reorganization in
July 2007 with a Chapter 11 plan said to have "a realistic chance"
of paying all creditors in full, the bankruptcy left the medical
center with more than $1 billion in debt. The new filing occurred
after a $64 million operating loss in 2009 and the last potential
buyer terminated discussions for taking over the flagship
hospital.
Adam C. Rogoff, Esq., and Kenneth H. Eckstein, Esq., at Kramer
Levin Naftalis & Frankel LLP, represent the Debtor in its
Chapter 11 effort.
STANLEY TORGERSON: In Chapter 11 with $2.3-Mil. Debt
----------------------------------------------------
Nathan Gonzalez at The Republican reports that, Stanley D.
Torgerson, which has filed for Chapter 11 bankruptcy protection,
listed more than $2.3 million in debts. None of those debts
appear to involve dozens of customers who claim to be owed more
than $600,000 after Mr. Torgerson's company, International Classic
Auctions, sold their vehicles but never paid them.
In January, investigators executed a search warrant at Mr.
Torgerson's auction business. At the time, 20 alleged victims in
Arizona and others in Texas, Alabama and Wisconsin had come
forward, said Sgt. Bill Balafas, a police spokesman. Since then,
about 20 additional victims have come forward, Balafas said.
The investigation, according to the report, is ongoing.
Mr. Torgerson remains a suspect in the case, but no arrests have
been made.
Stanley Torgerson filed a Chapter 11 petition (Bankr. D. Ariz.
Case No. 11-03677) on Feb. 14, 2011.
STARPOINTE ADERRA: Court Sets March 23 Plan Confirmation Hearing
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona has
scheduled a hearing for March 23, 2011, at 3:30 p.m. to consider
the confirmation of Starpointe Aderra Condominiums, L.P.'s Amended
Liquidating Chapter 11 Plan.
The Court had earlier approved the Amended Disclosure Statement
explaining the Debtor's Amended Plan.
The Court fixed March 18, 2011, as the last day for filing and
serving, pursuant to Fed. R. Bankr. P. 3020(b)(1), written
objections to confirmation of the Amended Plan.
The Court also fixed March 18, 2011, as the last day for filing
written acceptances or rejections of the Amended Plan.
March 22, 2010, is the deadline for the filing of a ballot report.
As reported in the TCR on Feb. 22, 2011, the Debtor filed with the
U.S. Bankruptcy Court for the District of Arizona a liquidating
Chapter 11 Plan, dated Feb. 7, 2011, and an amended disclosure
statement.
Although Starpointe Aderra initially intended to retain its assets
and reorganize its debts, it realized that without the support of
its senior secured lender CCS of Arizona II, LLC, it would be
difficult if not impossible to succeed in confirming a plan of
reorganization. Thus, in January 2011 Starpointe Aderra and CCS
negotiated a settlement whereby Starpointe Aderra agreed to stay
relief to allow CCS to foreclose on its collateral, and CCS agreed
to waive its unsecured claims against Starpointe Aderra and to
allow Starpointe Aderra to retain $600,000 to fund a distribution
to its remaining creditors through a plan of liquidation.
Under the Plan, the Debtor intends to distribute to its creditors
the $600,000 in proceeds that it will receive upon approval of the
CCS Settlement. The funds will be used to pay down the Allowed
Claims of Estate creditors in accordance with the priority scheme
set forth in the Bankruptcy Code.
Holders of allowed unsecured claims will be paid their pro rata
share of the $600,000 settlement fund after payment of
Administrative and Priority Claimants.
Existing equity interests will be canceled.
A copy of the Amended Disclosure Statement is available for free
at http://bankrupt.com/misc/StarpointeAderra.AmendedDS.pdf
As reported in the TCR on Feb. 25, 2011, the foreclosure sale was
allowed to proceed by the bankruptcy court on Feb. 23, 2011, and
subsequently, CCS became the owner of the 312-unit Aderra
Condominium Residences project in Phoenix, Arizona.
About Starpointe Aderra Condominiums
Scottsdale, Arizona-based Starpointe Aderra Condominiums, L.P., is
an upscale community of 312 condominium units located in thirteen
three-story buildings in North Central Phoenix. Starpointe Aderra
is one of several local 'Starpointe' real estate projects
developed by Starpointe Communities. The principals of Starpointe
Communities are Robert A. Lyles and Patricia A. Watts.
The Company filed for Chapter 11 bankruptcy protection (Bankr. D.
Ariz. Case No. 09-33625) on Dec. 29, 2009. Warren J. Stapleton,
Esq., and Brenda K. Martin, Esq., at Osborn Maledon P.A., in
Phoenix, Ariz., represent the Debtor. An official committee of
unsecured creditors has not been formed in the Debtor's case. In
its schedules, the Debtor disclosed $$26,545,819 in assets and
$30,581,468 in liabilities as of the petition date.
Aderra Condominium Residences, a 312-unit, 13-building condominium
community in Phoenix, Ariz., is now owned and managed by Denver-
based Condo Capital Solutions (CCS).
Denver-based Condo Capital Solutions is part of the Real Capital
Solutions companies that includes Homebuilding Capital Solutions
and Apartment Capital Solutions. CCS specializes in investing in
distressed real estate with a focus on condominium projects. The
company has developed a portfolio approaching 40 communities
nationwide, including projects in Arizona, Colorado, Florida,
Texas and Wyoming.
STATION CASINOS: N. Rapaport Wants to be Fee Examiner
-----------------------------------------------------
Nancy B. Rapoport, Esq., in Las Vegas, Nevada -- nrapoport@money-
law.org -- asks the Bankruptcy Court to appoint her as fee
examiner.
Ms. Rapoport proposes that she and her staff review the fees and
expenses of the professionals employed in the Debtors' bankruptcy
cases, including Milbank, Tweed, Hadley & McCloy LLP and Lewis and
Roca LLP.
The appointment of a fee examiner would aid the Court in its duty
to review and evaluate the lengthy and detained fee applications
filed in the cases, Ms. Rapoport asserts. She adds that the fee
examiner's report will assist the Court regarding its
determination of reasonableness and the necessity of the requested
fees and expenses.
Ms. Rapoport tells Judge Zive that she has served as a bankruptcy
court's fee expert in two large cases: (i) In re Pilgrim's Pride
Corp., Case No. 08-45664 (DML) (Bankr. N.D. Tex. 2008), and (ii)
In re Mirant Corporation, Case No. 03-46590 (Bankr. N.D. Tex
2003). She avers that her academic scholarship concentrates on
the intersection of professional responsibility with fields like
the behavior of bankruptcy lawyers and corporate boards. She
adds, among other things, that she is a tenured professor at the
William S. Boyd School of Law at the University of Nevada, Las
Vegas.
Ms. Rapoport proposes this compensation scheme:
(a) Starting as of March 1, 2011, and continuing until the
Court has entered final orders concerning the Covered
Professionals' final fees and expenses, Ms. Rapoport will
be paid $15,000 per month as a flat fee, payable by the
Debtors, with the first $15,000 payment to be made by the
14th day of her appointment.
(b) To the extent that Ms. Rapoport must testify in the cases,
either in depositions or at hearings, she will be paid for
her time, including her preparation and travel time, based
on her standard hourly rate of $800, with travel time
billed at 50% of her rate, in addition to her flat fee.
(c) To offset any inadvertent use of UNLV property, staff or
time, the Debtors will pay to the UNLV Foundation $1,000
per month.
(d) The hourly rates of the staff that Ms. Rapoport will use
to assist her in her work as a fee examiner are:
* $20 per hour for any UNLV law students assisting in the
review of fees and expenses;
* $40 per hour for secretarial and managerial assistance
by Annette Mann; and
* $40 per hour for assistance by any recent UNLV law
graduates assisting in the review of fees and expenses.
(e) Reimbursement of reasonable expenses for Ms. Rapoport and
her staff, including PACER downloads.
The Debtors will be authorized and required to indemnify, hold
harmless, provide contribution to and reimburse her and her staff
if they become involve in any action, claim, lawsuit,
investigation or proceeding brought against them in connection
with their services.
Ms. Rapoport assures Judge Zive that she is a "disinterested
person" under Section 101(14) of the Bankruptcy Code.
About Station Casinos
Station Casinos, Inc., is a gaming and entertainment company that
currently owns and operates nine major hotel/casino properties
(one of which is 50% owned) and eight smaller casino properties
(three of which are 50% owned), in the Las Vegas metropolitan
area, as well as manages a casino for a Native American tribe.
Station Casinos Inc., together with its affiliates, filed for
Chapter 11 protection on July 28, 2009 (Bankr. D. Nev. Case No.
09-52477). Milbank, Tweed, Hadley & McCloy LLP serves as legal
counsel in the Chapter 11 case; Brownstein Hyatt Farber Schreck,
LLP, as regulatory counsel; and Lewis and Roca LLP is local
counsel. Lazard Freres & Co. LLC is investment banker and
financial advisor. Kurtzman Carson Consultants LLC is the claims
and noticing agent. Brad E Scheler, Esq., and Bonnie Steingart,
Esq., at Fried, Frank, Shriver, Harris & Jacobson LLP, in New
York, serves as counsel to the Official Committee of Unsecured
Creditors.
In its bankruptcy petition, Station Casinos said that it had
assets of $5,725,001,325 against debts of $6,482,637,653 as of
June 30, 2009. About 4,378,929,997 of its liabilities constitute
unsecured or subordinated debt securities.
Bankruptcy Creditors' Service, Inc., publishes Station Casinos
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Station Casinos Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
STATION CASINOS: Squire Sanders Seeks $1.125-Mil. for Work
----------------------------------------------------------
Squire, Sanders & Dempsey (US) LLP asks the Bankruptcy Court to
allow the payment of its fees aggregating $1,125,295 and expenses
for $90,130 for the period from August 1, 2009, through November
30, 2010. Squire Sanders served as special counsel to the Special
Litigation Committee of the Board of Directors of Stations Casino,
Inc.
A hearing will be held on April 11, 2011, to consider Squire
Sanders' final fee application.
About Station Casinos
Station Casinos, Inc., is a gaming and entertainment company that
currently owns and operates nine major hotel/casino properties
(one of which is 50% owned) and eight smaller casino properties
(three of which are 50% owned), in the Las Vegas metropolitan
area, as well as manages a casino for a Native American tribe.
Station Casinos Inc., together with its affiliates, filed for
Chapter 11 protection on July 28, 2009 (Bankr. D. Nev. Case No.
09-52477). Milbank, Tweed, Hadley & McCloy LLP serves as legal
counsel in the Chapter 11 case; Brownstein Hyatt Farber Schreck,
LLP, as regulatory counsel; and Lewis and Roca LLP is local
counsel. Lazard Freres & Co. LLC is investment banker and
financial advisor. Kurtzman Carson Consultants LLC is the claims
and noticing agent. Brad E Scheler, Esq., and Bonnie Steingart,
Esq., at Fried, Frank, Shriver, Harris & Jacobson LLP, in New
York, serves as counsel to the Official Committee of Unsecured
Creditors.
In its bankruptcy petition, Station Casinos said that it had
assets of $5,725,001,325 against debts of $6,482,637,653 as of
June 30, 2009. About 4,378,929,997 of its liabilities constitute
unsecured or subordinated debt securities.
Bankruptcy Creditors' Service, Inc., publishes Station Casinos
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Station Casinos Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
SUNWEST MANAGEMENT: Receiver Settles $3.8 Million Loan Dispute
--------------------------------------------------------------
Bankruptcy Law360 reports that the receiver for Sunwest Management
Inc., which collapsed amid allegations that it ran a $400 million
Ponzi scheme, settled a dispute Wednesday with a lender over a
$3.8 million loan.
Sunwest's receiver, Michael Grassmueck, settled with the lender,
Vestin Realty Mortgage Inc., by reducing the principle on the loan
to $1.425 million, and converting the rest into a $2.4 million,
Law360 says.
About Sunwest Management
Founded in Oregon in 1991, Sunwest Management --
http://www.sunwestmanagement.com/-- was one of the largest
private senior living providers in the U.S. In March 2009, U.S.
District Judge Michael Hogan appointed Michael Grassmueck --
founder and principal of Portland, Oregon-based Grassmueck Group,
a national firm that specializes in fiduciary and insolvency
services -- as receiver for the Company after the Securities and
Exchange Commission filed suit against Sunwest and former CEO Jon
Harder, alleging securities fraud.
Sunwest Management placed 10 assisted living centers -- two in
Oregon -- into Chapter 11 bankruptcy. Briarwood Retirement and
Assisted Living Community LLC, which owns a retirement center in
Springfield, and Century Fields Retirement and Assisted Living
Community LLC, which owns a center in Lebanon, filed for Chapter
11 protection on August 19, 2008. On Aug. 17, 2008, eight
Sunwest-affiliated LLCs filed for Chapter 11 bankruptcy protection
from creditors in Tennessee.
Sunwest was later renamed Stayton SW Assisted Living. As reported
by the Troubled Company Reporter on July 16, 2010, Judge Hogan
confirmed the plan of reorganization in the Chapter 11 proceedings
of Stayton. The plan provides for the sale of up to 149 senior
living facilities to a joint venture formed by Blackstone Real
Estate Advisors VI L.P., Emeritus Senior Living and Columbia
Pacific Advisors. The Blackstone/Emeritus joint venture acquired
the properties in exchange for cash, securities and debt valued at
$1.3 billion in cash.
Under the Plan, existing Sunwest investors were permitted to
receive either cash or securities in the new company, with a
choice between Class A preferred interests paying 6%, or up to 49%
in common interests in the joint venture. The reorganization plan
also provides for the creation of a Trustco entity to hold certain
non-senior living assets, such as apartments, office buildings and
bare land, and liquidate the assets over time for the benefit of
the estate's investors and creditors. The Receiver oversees
Trustco.
In August 2010, Stayton completed the sale of 132 senior living
facilities to the joint venture. The transaction was valued at
$1.2 billion.
In December 2010, the federal equity receiver in charge of former
Oregon-based senior living provider Sunwest Management announced a
40% initial distribution to investors and other claimants in the
Sunwest securities violation case and related Chapter 11
bankruptcy proceeding. Resources for the initial distribution
total $228 million and derive from a $1.2 billion real estate
transaction closed earlier this year, in which a joint venture led
by Blackstone Real Estate Advisors VI LP and Emeritus Senior
Living acquired 144 Sunwest properties in exchange for cash,
securities and assumption of debt.
TACO DEL MAR: Faces Rival Chapter 11 Plan From Creditors Committee
------------------------------------------------------------------
Taco Del Mar Franchising Corp. and its Official Committee of
Unsecured Creditors filed separate proposed Chapter 11 plans of
liquidation for Taco Del Mar in the U.S. Bankruptcy Court for the
Western District of Washington.
A hearing is set for March 18, 2011, at 9:30 a.m., to consider the
adequacy of the disclosure statements explaining the Plans.
According to the Committee, the Plans are virtually identical.
Among other things, the Plans estimate that the implementation
will result in prompt recoveries of 100% of the allowed claims in
class 1 secured claim, recoveries of up to 100% in class 2
convenience claim, and a recovery ranging from 2% to 12% to class
3 general unsecured claim. Holders of equity interest will
receive nothing, and equity interests will be extinguished.
The Committee has concluded that recoveries to creditors would
still be maximized by liquidation of the Debtor's assets and
distribution under the supervision of a plan agent appointed
pursuant to a confirmed Chapter 11 plan.
On the other hand, the Debtor has concluded that recoveries to
Creditors will be maximized by liquidation of remaining
unliquidated assets of the Debtor, if any, and distribution by
the Debtor without a Chapter 11 plan. In light of the efforts
of the Committee to require that a liquidation plan be confirmed
to accomplish the remaining administration of the estate, the
Debtor proposed that any Chapter 11 plan which is confirmed
appoint the Reorganized Debtor either outright or as plan agent to
administer the plan.
The parties propose April 29, 2011, at 9:30 a.m., as confirmation
hearing date.
A full-text copy of the Debtor's Disclosure Statement and Plan is
available for free at http://ResearchArchives.com/t/s?74b9
A full-text copy of the Committee's Disclosure Statement and Plan
is available for free at http://ResearchArchives.com/t/s?74ba
About Taco Del Mar Franchising
Founded in Seattle, Washington, in 1992 by brothers James and John
Schmidt, Taco Del Mar is a quick-service casual restaurant chain
inspired by southern Baja, Mexico, and coastal beach shacks known
for serving some of the tastiest burritos and tacos. Today, Taco
Del Mar operates in more than 225 locations throughout the U.S.,
Canada and Guam.
Taco Del Mar Franchising Corp. and its affiliate, Conrad & Barry
Investments Inc., filed for Chapter 11 bankruptcy protection
(Bankr. W.D. Wash. Case No. 10-10528) on January 22, 2010. George
S. Treperinas, Esq., at Karr Tuttle Campbell represents the Debtor
in its restructuring effort. The Official Unsecured Creditors'
Committee is represented by Geoffrey Groshong, Esq., at Miller
Nash LLP. The Company estimated assets at $10 million to $50
million and debts at $50 million to $100 million.
TAMACH GABLES: Coral Gables Office Condo in Chapter 11
------------------------------------------------------
South Florida Business Journal reports that Tamach Gables Square
LLC, which is in Chapter 11 bankruptcy protection, is the owner of
a Coral Gables office condo that was hit with a foreclosure last
year.
According to the report, a year ago, Boca Raton-based Sun American
Bank filed a notice of foreclosure against Tamach Gables Square.
Carlos Gonzalez, listed as president of Tamach Investments, also
heads Tamach Group.
In March 2009, the Business Journal reported that Tamach was among
the first commercial real estate owners to suffer from the growing
meltdown in that market. The head of Coral Gables-based Tamach
Group faced four foreclosure lawsuits in early 2009. Mercantil
Commercebank also filed a $5.7 million foreclosure judgment
against Tamach Coral Gables regarding eight office condo units.
Tamach Gables Square LLC filed a Chapter 11 petition (Bankr. S.D.
Fla. Case No. 11-15983) on March 7, 2011 in Miami, Florida.
Ronald G. Neiwirth, Esq., at Fowler White Burnett, P.A., in Miami,
serves as counsel to the Debtor. The Debtor estimated assets and
debts of $10,000,001 to $50,000,000 as of the Chapter 11 filing.
Tamach Gables is described as a single-asset real estate company,
meaning it was founded only to develop the office condo.
TAYLOR BEAN: Ex-Chief Gets E&Y Subpoena in Fraud Suit
-----------------------------------------------------
Bankruptcy Law360 reports that a former Taylor Bean & Whitaker
Mortgage Corp. executive charged in Virginia federal court with
orchestrating a $2 billion fraud secured a subpoena Tuesday
seeking documents from Ernst & Young LLP following threats to hold
the accounting firm in contempt.
The new subpoena, less broad than former TBW Chairman Lee Bentley
Farkas initially requested, seeks documents related to an April
2009 Ernst & Young audit report of Colonial BancGroup
Inc.,.according to Law360.
About Taylor Bean
Taylor, Bean & Whitaker Mortgage Corp. grew from a small Ocala-
based mortgage broker to become one of the largest mortgage
bankers in the United States. In 2009, Taylor Bean was the
country's third largest direct-endorsement lender of FHA-insured
loans of the largest wholesale mortgage lenders and issuer of
mortgage backed securities. It also managed a combined mortgage
servicing portfolio of approximately $80 billion. The company
employed more that 2,000 people in offices located throughout the
United States.
Taylor Bean sought Chapter 11 protection (Bankr. M.D. Fla. Case
No. 09-07047) on August 24, 2009. Taylor Bean filed the
Chapter 11 petition three weeks after federal investigators
searched its offices. The day following the search, the Federal
Housing Administration, Ginnie Mae and Freddie Mac prohibited the
company from issuing new mortgages and terminated servicing
rights. Taylor Bean estimated more than $1 billion in both assets
and liabilities in its bankruptcy petition.
Jeffrey W. Kelly, Esq., and J. David Dantzler, Jr., Esq., at
Troutman Sanders LLP, in Atlanta, Ga., and Russel M. Blain, Esq.,
and Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain &
Prosser, PA, in Tampa, Fla., represent the Debtors. Paul Steven
Singerman, Esq., and Arthur J. Spector, Esq., at Berger Singerman
PA, in Miami, Fla., represent the Committee. BMC Group, Inc.,
serves as the claims and noticing agent.
TBS INTERNATIONAL: Peter Shaerf Won't for Seek Re-Election
----------------------------------------------------------
On March 7, 2011, Peter S. Shaerf notified TBS International plc
of his intention not to stand for re-election as a director of the
Company at the Company's 2011 Annual General Meeting of
Shareholders. Mr. Shaerf will continue to serve as a director of
the Company until the expiration of his term at the conclusion of
the 2011 Annual Meeting, which is expected to be held in June
2011. Mr. Shaerf's decision not to stand for re-election does not
involve any disagreement with the Board of Directors or the
Company. The Company thanks Mr. Shaerf for his distinguished
service as a member of the Board of Directors since 2001.
About TBS International plc
Dublin, Ireland-based TBS International plc (NASDAQ: TBSI)
-- http://www.tbsship.com/-- is a fully-integrated transportation
service company that provides worldwide shipping solutions to a
diverse client base of industrial shippers.
At Sept. 30, 2010, TBS had total assets of US$906.794 million,
total debt, including current portion, of US$328.259 million, and
shareholders' equity of US$513.154 million. TBS had working
capital deficit of US$297.663 million at Sept. 30, 2010.
As reported in the Troubled Company Reporter on March 19, 2010,
PricewaterhouseCoopers LLP, in New York, expressed substantial
doubt about the Company's ability to continue as a going concern,
following its 2009 results. The independent auditors noted that
the Company believes it will not be in compliance with the
financial covenants under its credit facilities during 2010, which
under the agreements would make the debt callable. "This has
created uncertainty regarding the Company's ability to fulfill its
financial commitments as they become due."
TBS International in December 2010 disclosed that its various
lender groups have agreed to extend the current forbearance period
until Jan. 31, 2011. During such period, the lender groups
will continue to forbear from exercising their rights and remedies
which arise from the Company's failure to make principal payments
when due. The Company will not make principal payments due on its
financing facilities during the extended forbearance period, but
it will continue to pay interest on those facilities at the
default interest rate.
TC GLOBAL: Catherin Campbell Does Not Own Any Securities
--------------------------------------------------------
In a Form 3 filing with the U.S. Securities and Exchange
Commission, Catherine Mary Campbell, chief financial officer at TC
Global, Inc., disclosed that she does not own any securities of
the Company.
About TC Global
Headquartered in Seattle, Washington, TC Global, Inc., dba Tully's
Coffee -- http://www.tullyscoffeeshops.com/-- is a specialty
coffee retailer and wholesaler. Through company owned, licensed
and franchised specialty retail stores in Washington, Oregon,
California, Arizona, Idaho, Montana, Colorado, Wyoming and Utah,
throughout Asia with Tully's Coffee International, and with its
global alliance partner Tully's Coffee Japan, Tully's premium
coffees are available at 545 branded retail locations globally.
TC Global also has the rights to distribute Tully's coffee through
all wholesale channels internationally, outside of North America,
the Caribbean and Japan.
The Company reported a net loss of $1.03 million on $9.13 million
of net sales for the thirteen weeks ended Dec. 26, 2010, compared
with a net loss of $1.46 million on $8.97 million of net sales for
the 13 weeks ended Dec. 27, 2009.
The Company's balance sheet at Dec. 26, 2010 showed $9.38 million
in total assets, $16.23 million in total liabilities and
$6.85 million in total stockholders' deficit.
TELKONET INC: Completes Sale of Series 5 Tech. to Dynamic Ratings
-----------------------------------------------------------------
Telkonet, Inc., said it has taken a key step in management's
strategic restructuring. Telkonet completed the sale of the non-
core Series 5 Power Line Communication business unit assets to
Wisconsin-based Dynamic Ratings, Inc. to strengthen its focus on
the Company's core business, energy efficiency. The Series 5
product line was a nonstrategic business unit that comprised less
than 5% of Telkonet's 2010 revenues. As consideration, Telkonet
received $1.7 million from Dynamic Ratings, consisting of a $1
million cash payment and a $700,000 loan provided as an advance
against certain earn-out provisions pursuant to associated
Distribution and Consulting Agreements.
Under the Asset Purchase Agreement, Dynamic Ratings acquired all
assets of the Series 5 business unit and will act as the sole
distributor to the Utility industry, while Telkonet will continue
to supply the Series 5 product to non-utility applications, and
will provide Dynamic Ratings with ongoing transition assistance
and consulting services for the Series 5 product. Under the terms
of the associated three-year Distribution and Consulting
Agreements, Telkonet will receive preferred pricing for Series 5
product and will pay down the $700,000 loan through related earn-
out provisions that encompass both Telkonet and Dynamic Ratings
sales. Provided specific metrics of the Distribution and
Consulting Agreements are met, Telkonet will have retired the
unsecured $700,000 loan prior to its expiration on March 31, 2014.
Telkonet also completed the final step in management's extensive
restructuring of its short-term debt by retiring a $1.6 million
convertible debenture due on May 29, 2011 and cancelling related
warrants covering 11.7 million shares of the Company's stock. In
exchange for the early retirement of debt and cancellation of
warrants, Telkonet issued the lender an unsecured, one-year note
for $50,000.
"We are extremely pleased to have completed this transaction and
look forward to a successful and profitable partnership with
Dynamic Ratings. They are a valuable partner and have
demonstrated leadership in SmartGrid technology and development,"
stated Jason Tienor, Telkonet's President and Chief Executive
Officer. "In addition, management is proud to have completed this
historic step in Telkonet's financial, strategic and operational
restructuring and is excited about Telkonet's growth and future
outlook."
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.
TEMPUS RESORTS: Hires Appraisers for Mystic Dunes Golf Club
-----------------------------------------------------------
The Bankruptcy Court authorized Tempus Resorts International, Ltd.
and its debtor-affiliates to employ Darius Hatami and HVS Golf
Services to conduct an appraisal of the Mystic Dunes Golf Club,
nunc pro tunc to Jan. 28, 2011, pursuant to a general retainer.
HVS Golf is tasked to, among others, estimate the club's "as is"
market value and meet with the Debtors' representatives to discuss
the project in detail and formulate a schedule for performing
fieldwork.
The Debtors also obtained permission to employ John P. Lancet and
HVS Shared Ownership Services to conduct an appraisal of the
club's inventory, nunc pro tunc to Jan. 28.
HVS Golf may be reached at:
Darius Hatami
HVS Golf Services
2229 Broadway
Boulder, CO 80302
Telephone: 303-301-1126
Facsimile: 303-443-4186
HVS Shared Ownership Services may be reached at:
John Lancet
Associate Managing Director
HVS Shared Ownership Services
8925 SW 148th Street, Suite 216
Miami, FL 33176
Telephone: 305-378-0404
Facsimile: 303-378-4484
The Debtor told the Court that both firms do not represent the
individual interest of any insider or affiliate of the Debtors.
HVS Golf has requested a $7,500 retainer. The Debtors said the
total fee for the fieldwork, analysis and preparation of an
appraisal report will be $13,250, which will be payable prior to
delivery of the final report.
HVS Shared Ownership Services, meanwhile, will be paid on an
hourly basis. Standard rates range from $150 to $250 an hour.
HVS Shared Ownership Services has requested a $6,000 retainer.
However, all compensation will be subject to prior Court approval.
An official committee of unsecured creditors on Feb. 3. The
committee is represented by:
Roy S. Kobert, Esq.
BROAD AND CASSEL
Post Office Box 4961
Orlando, FL 32802
Telephone: 407-839-4200
Facsimile: 407-425-8377
E-mail: orlandobankruptcy@broadandcassel.com
About Tempus Resorts
Orlando, Florida-based Tempus Resorts International, Ltd., filed
for Chapter 11 bankruptcy protection on November 19, 2010 (Bankr.
M.D. Fla. Case No. 10-20709). Elizabeth A. Green, Esq., at Baker
& Hostetler LLP, assists the Debtor in its restructuring effort.
It estimated its assets and debts at $100 million to $500 million.
Affiliates Tempus Palms International, Ltd. (Bankr. M.D. Fla. Case
No. 10-20712); Tempus Golf Development, LLC (Bankr. M.D. Fla. Case
No. 10-20714); Tempus Select, LLC (Bankr. M.D. Fla. Case No. 10-
20715); Backstage Myrtle Beach, LLC (Bankr. M.D. Fla. Case No. 10-
20716); Tempus Resorts Management, Ltd. (Bankr. M.D. Fla. Case No.
10-20717); Tempus Resorts Realty, LLC (Bankr. M.D. Fla. Case No.
10-20718); Tempus International Marketing Enterprises, Ltd.
(Bankr. M.D. Fla. Case No. 10-20719); and Time Retail, LLC (Bankr.
M.D. Fla. Case No. 10-20720) filed separate Chapter 11 petition.
Tempus Resorts estimated its assets and debts at $100,000 to
$500,000. Tempus Golf Debt. Estimated its assets and debts at
$1 million to $10 million. Tempus Palms International estimated
its assets at $100 million to $500 million.
TN METRO: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: TN Metro Holdings XII, LLC
251 North Avenue, 2nd Floor
New Rochelle, NY 10801
Bankruptcy Case No.: 11-22428
Chapter 11 Petition Date: March 9, 2011
Court: United States Bankruptcy Court
Southern District of New York (White Plains)
Judge: Robert D. Drain
Debtor's Counsel: David Carlebach, Esq.
LAW OFFICES OF DAVE CARLEBACH
40 Exchange Place
New York, NY 10005
Tel: (212) 785-3041
Fax: (212) 785-3618
E-mail: david@carlebachlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $10,000,001 to $50,000,000
A list of the Company's 20 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/nysb11-22428.pdf
The petition was signed by Selim Zherka, managing member.
TPF II: Moody's Downgrades Ratings on Senior Secured Loan to 'B2'
-----------------------------------------------------------------
Moody's Investors Service has downgraded TPF II LC, LLC's senior
secured credit facilities to B2 from Ba3 and changed the outlook
to negative from stable. The credit facilities that are affected
are an original $165 million term loan due 2014 (approx.
$100 million currently outstanding) and a $40 million working
capital facility also due 2014.
Ratings Rationale
The downgrade reflects TPF II's exposure to merchant power prices
after May 2011, when an existing tolling agreement expires, as
well as lower than expected PJM RPM capacity prices. It is not
expected that TPF II will extend or replace a tolling agreement
that one of its generating facilities (Lincoln) has with Exelon
Generation Company (A3; stable) when it matures in May 2011.
After the expiration of the tolling agreement, Lincoln, like the
Crete generating facility, will sell into the ComEd sub-region of
PJM as a merchant generator. As a result, the TPF II portfolio of
peaking facilities will be fully exposed to merchant energy
revenues and RPM capacity revenues in an operating environment of
low capacity and electricity prices.
Both of these peaking facilities bid their capacity into PJM's RPM
market, for which the facilities earn capacity revenues. The RPM
capacity revenues, which are known through May 2014, provide a
degree of cash flow predictability at least through that date.
However, recent RPM clearing prices have been lower than had been
expected beginning in June 2012, when the capacity price is just
$16.46/MW-day. The capacity price for the delivery year beginning
in June 2013 is higher at $27.73/MW-day, but this too is lower
than expectations when the deal was first rated by Moody's. These
low capacity prices make TPF II dependent upon merchant energy
margins to cover fixed costs and to cover scheduled debt service,
especially in the delivery year beginning in June 2012, when known
capacity prices are at their lowest. In addition, the facilities
are running less frequently than expected, reducing the amount of
variable margin available to cover fixed expenses. Based upon
Moody's analysis, given currently low prices in the merchant
energy markets, low capacity factors and low known capacity
prices, TPF II may not be able to generate enough cash flow to
cover required debt service in 2013.
Moody's notes that the project has been performing well to date
from an operational standpoint. In addition, TPF II has
historically produced improving credit metrics, and debt has been
reducing in line with original expectations. Moody's expects that
through 2011 and 2012, even under a scenario where there is little
or no merchant energy margin (together with low capacity prices),
TPF II should still be able to comfortably cover its fixed costs,
meet required debt service and even continue to contribute to
further debt reduction via the sweep (which dropped to 75% of
excess cash flow once the project reached the 3.0x threshold for
leverage (Debt/CFADS) in September 2010, although the project has
continued to sweep 100%).
However, past financial performance in this case is not a prologue
for future financial performance, especially in an environment of
low merchant power prices. Starting in 2013, when known RPM
capacity prices fall to $16.46/MW-day for the 2012/2013 delivery
year, and assuming markets for TPF II's power remain weak, margin
compression is expected to be accelerated to the point where the
project may have difficulty covering its fixed operating expenses
and meeting required debt service in 2013.
Moody's is therefore taking prospective rating action at this
time in anticipation of this possibility. There is time for
factors to change that could prevent a potential default in 2013.
Merchant power prices could rebound in the meantime, offsetting
the capacity price decline, or the project could enter into a
new tolling agreement that could provide support to the cash
flows. Furthermore, there is time for Tenaska Power Fund II, the
project's sponsor, to work out a solution, including strategic
options, especially if capacity prices increase after the next RPM
auction scheduled for May 2011, for delivery year 2014/2015. In
addition, Moody's notes that the project does have liquidity in
the form of a 6-month debt service reserve supported by a letter
of credit as well as a $40 million revolver with approximately
$30 million available that does not expire until 2014. These
pockets of liquidity give the project flexibility during a period
of low power prices and margin compression. Moody's also believes
that the longer term recovery prospects for the holders of the
debt should be good. Therefore, Moody's is not lowering the
rating below B2 at this time.
The negative outlook reflects Moody's expectation that power
prices and merchant energy prices will remain low. The longer
term outlook for the project is highly dependent upon a
significant strengthening of power markets. Moody's also notes
that even if TPF II makes it through 2013, it still faces
refinancing risk in 2014, at a time when it is reliant upon
merchant cash flows.
The rating is not likely to be revised upward in the near term.
The outlook can be revised to stable if there is significant
improvement in power prices and capacity prices such that a
potential default can be averted and refinancing risk reduced.
The rating could be revised downward if it becomes clear that the
potential for payment default comes earlier than 2013, or there
are operational problems at either Lincoln or Crete.
The last rating action on TPF II occurred on September 17, 2007,
when Moody's assigned the TPF II rating of Ba3.
TPF II LC, LLC, is a 984 MW portfolio consisting of two peaking
facilities, Lincoln and Crete, each located outside of Chicago,
Illinois. The Lincoln facility is a nominally rated 656 MW
simple-cycle, natural gas-fired plant located in Manhattan,
Illinois, about 48 miles south of Chicago. The Crete facility is
a nominally rated 328 MW simple-cycle, natural gas-fired plant
located in Crete, Illinois, about 30 miles southwest of Chicago.
Both Lincoln and Crete operate in the Commonwealth Edison Northern
Illinois sub-region of the PJM Interconnection (Aa3, Issuer
Rating; Stable).
TPF II is a wholly-owned subsidiary of TPF II, LP, a second
generation, private equity fund focused primarily on the energy
sector. TPF II, LP's sponsors are the employee-owners of Tenaska
Energy, which is one of the largest privately-owned, independent
power developers in the U.S., having developed over 8,000 MW of
gas-fired electric generating facilities.
TPF GENERATION: Moody's Downgrades Ratings on Senior Loan to 'B1'
-----------------------------------------------------------------
Moody's Investors Service has downgraded TPF Generation Holdings,
LLC's first lien senior secured credit facilities to B1 from Ba3
and changed the outlook to negative from stable. At the same
time, Moody's has affirmed the B3 rating on the second lien credit
facility and also changed its outlook to negative from stable.
The first lien credit facilities that are affected are an original
$850 million term loan due 2013 (approx. $365 million currently
outstanding), a $250 million synthetic letter of credit facility
also due 2013, and a $50 million synthetic working capital
revolving credit facility due 2011. The second lien credit
facility consists of a $495.0 million term loan due 2014 (all of
the $495 million is currently outstanding).
Ratings Rationale
The rating action reflects TPF Generation's increasing exposure to
merchant power prices after December 2011, and full merchant power
price exposure after December 2012, when two heat rate call
options expire respectively at the two combined cycle plants in
the portfolio. There currently are no new agreements in place to
extend or replace these agreements. In addition, the rating
action reflects concerns about exposure to low PJM RPM capacity
prices starting with the 2012/2013 delivery year. While the low
merchant power and capacity prices are not expected to result in a
possible payment default, these factors could result in a
potential financial covenant violation on the part of TPF
Generation and contribute to greater refinancing risk than
expected when Moody's first rated this debt.
Two of the largest assets in the TPF Generation portfolio, High
Desert and Rio Nogales, benefit from power offtake agreements.
The High Desert facility, the largest combined-cycle asset in the
portfolio, had a power purchase agreement with the California
Department of Water Resources (Aa3) that expired in January
2011, but it now benefits from an energy call option agreement
with J. Aron & Company from February 2011 to December 2012 that
immediately follows the expiration of the CDWR agreement. Rio
Nogales also has a heat rate call option agreement with J. Aron,
which runs from October 2008 through December 2011. As there are
currently no new agreements in place to extend or replace these
agreements, these two plants will become exposed to merchant power
prices starting after December 2011 and December 2012.
The TPF Generation portfolio also consists of three peaking units
that bid their capacity into PJM's RPM market, for which the
facilities earn capacity revenues. The RPM capacity revenues,
which are known through May 2014, provide a degree of cash flow
predictability at least through that date. However, recent RPM
clearing prices have been lower than had been expected beginning
in June 2012, when the capacity price is just $16.46/MW-day. The
capacity price for the delivery year beginning in June 2013 is
higher at $27.73/MW-day, but this is still below what forecasters
had expected for the PJM capacity market when Moody's first rated
the debt. As a result, the TPF Generation portfolio of assets
will over time become increasingly exposed to merchant energy
revenues and RPM capacity revenues in an operating environment of
low capacity and electricity prices. Based upon Moody's analysis,
given currently low prices in the merchant energy markets and low
known capacity prices, TPF Generation is not expected to suffer a
potential payment default, but it could under certain downside
scenarios violate one of its financial covenants (the leverage
ratio covenant in 2012 or 2013), and it will have higher than
expected refinancing risk in 2013, when the first lien debt
becomes due.
Moody's notes that the five facilities making up the TPF
Generation portfolio have been performing well to date from
an operational standpoint. In addition, TPF Generation has
historically produced improving credit metrics, and the first
lien term loan has been reducing as a result of the 100% excess
cash flow sweep. The second lien term loan, which matures a year
later in 2014, has not been reduced because the sweep will not
apply until the first lien is fully repaid. The second lien has
been current on its interest. In addition, Moody's notes that TPF
Generation does have liquidity in the form of a cash-funded 6-
month debt service reserve. This gives the project flexibility
during a period of low power prices and margin compression.
Therefore, Moody's is not lowering the rating below B1 on the
first lien at this time.
There is time for the ratings drivers to change. Merchant power
prices and capacity prices could rebound or the facilities could
enter into new agreements with investment grade counterparties
that could provide stability to the cash flows. Furthermore,
there is time for Tenaska Power Fund, the project's sponsor, to
work out solutions, including strategic options, especially if
capacity prices improve after the next RPM auction scheduled for
May 2011 for delivery year 2013/2014.
The generation portfolio consists of five natural gas-fired
generation facilities, of which two are combined cycle facilities
and three are simple cycle peaking facilities. Moody's believes
there is real value in TPF Generation, especially in the two
combined cycle units, and that the longer term recovery prospects
for the holders of the debt, including the second lien debt,
should be good. Therefore, Moody's is not lowering the first lien
debt below B1 at this time and is narrowing the notching between
the two classes of debt to two notches from three and is keeping
the rating on the second lien at B3, reflecting the value of the
portfolio.
The negative outlook reflects Moody's expectation that power
prices and merchant energy prices will remain low. The longer
term outlook for the project is highly dependent upon a
significant strengthening of power markets. Moody's also notes
that TPF Generation faces increased refinancing risk in 2014 at a
time when it is reliant upon merchant cash flows.
The rating is not likely to be revised upward in the near term.
The outlook can be revised to stable if there is significant
improvement in power prices and capacity prices such that a
potential covenant violation could be averted and the refinancing
risk reduced. The rating could be revised downward if it becomes
clear that the financial situation worsens more than expected or
if there are operational problems at either of the two important
combined cycle facilities.
The last rating action on TPF Generation occurred on December 16,
2008, when Moody's affirmed the ratings of Ba3 and B3 for the
first and second lien facilities, respectively.
TPF Generation Holdings, LLC, is an indirect subsidiary of
Tenaska Power Fund, L.P., and is a special purpose entity
formed to acquire and operate several generation facilities
across the continental United States. The portfolio was
acquired from Constellation Energy, and the facilities are
located in five states, with a total production capability of
2,480 MW. Electricity from the plants is sold into three regional
transmission grids; CAISO, ERCOT and the PJM Interconnection. The
generation portfolio currently consists of five natural gas-fired
generation facilities, of which two are combined-cycle facilities
and three are simple-cycle peaking facilities.
TRIBUNE CO: Proposes to Set Cure Amounts Procedures
---------------------------------------------------
Tribune Co. and its debtor-affiliates seek the Bankruptcy Court's
authority to establish procedures to fix cure amounts with respect
to the assumption of certain executory contracts and unexpired
leases that they anticipate assuming pursuant to the DCL Plan of
Reorganization upon the Effective Date of the Plan.
The Debtors also seek the Court's authority to provide notice of
the proposed assumption of certain executory contracts and
unexpired leases by a successor to a Debtor, including by an
affiliated Reorganized Debtor, or potential assignment to a
successor to a Debtor, including to an affiliated Reorganized
Debtor, after giving effect to the Restructuring Transactions that
are not contemplated to occur pursuant to the DCL Plan.
Prior to the Petition Date, the Debtors, in the ordinary course of
their businesses, entered into thousands of contracts and leases,
to which, as of the Petition Date, they were still a party and
were executory or unexpired within the meaning of Section 365 of
the Bankruptcy Code. In the aggregate, the Debtors identified
approximately 45,000 Executory Contracts and Unexpired Leases to
their schedules of assets and liabilities.
The Debtors relate that, since the Petition Date, they have been
working diligently with their financial and legal advisors to
identify those Executory Contracts and Unexpired Leases, on one
hand, are necessary or useful to sustain their business operations
throughout and after their emergence from Chapter 11, and which,
on the other hand, may be burdensome or no longer beneficial to
their estates.
As provided in the DCL Plan, all Executory Contracts and Unexpired
Leases that are not otherwise assumed or rejected, or otherwise
treated in accordance with the terms of the Plan, will be deemed
to be assumed on the Effective Date pursuant to and in accordance
with Sections 365 and 1123 of the Bankruptcy Code. In order to
comply with the requirements of Sections 365(b)(1) and
1123(a)(5)(G), the Debtors must satisfy or cure all monetary
defaults under each of the Assumed Contracts and Leases that will
be deemed assumed by operation of the DCL Plan. The DCL Plan
provides that, as a default, the proposed cure amount for the
Assumed Contracts and Leases will be zero dollars, unless
otherwise indicated.
Procedures for Fixing Cure Amounts
Due to a large number of Assumed Contracts and Leases that will be
assumed pursuant to the DCL Plan, the Debtors desire to establish
protocols and procedures to efficiently and fairly resolve any and
all potential disputes regarding the Proposed Cure Amounts in
order to facilitate the Debtors' ongoing reorganization efforts
and to minimize the costs and burdens to the Debtors' estates and
to their contract counterparties.
To the extent the Debtors make any additional payments on any of
the Assumed Contracts or Leases on account of the Proposed Cure
Amounts, the Debtors seek authority to reduce those Proposed Cure
Amounts with respect to such Assumed Contract or Lease by the
amount of any such payments.
For the Assumed Contracts and Leases that are not listed on the
Contract Exhibits, the Debtors propose to satisfy all those
scheduled or filed claims in full at the Initial Distribution
Date.
With respect to prepetition defaults, counterparties to the
Subsidiary Assumed Contracts/Leases that are not identified
because they hold prepetition claims of less than $25,000 may
refer to the official claims register maintained in the Chapter 11
cases to determine the amount that the Debtors have scheduled as
being due or the amount asserted as being due by a timely-filed
Proof of Claim on account of that Assumed Contract or Lease.
If a party disagrees with the Proposed Cure Amount, that party
will be required to submit a written response within 21 days from
the date of the entry of an order approving the procedures
requested. Each such Response must:
(a) be in writing;
(b) state with specificity the grounds for the disagreement
and the fully-liquidated Cure Amount which that party
believes is required under the Bankruptcy Code;
(c) include any supporting documentation, including the
specific nature and dates of any alleged defaults, the
pecuniary losses therefrom and the conditions giving rise
thereto; and
(d) be served on counsel to the Debtors so as to be actually
received on or before the Response Deadline at these
addresses:
Sidley Austin LLP
One South Dearborn Street
Chicago, IL 60603
Attn: Jillian K. Ludwig
E-mail: jillian.ludwig@sidley.com
Cole, Schotz, Meisel, Forman & Leonard, P.A.
1500 Delaware Avenue, Suite 1410
Wilmington, DE 19801
Attn: Norman L. Pernick
To facilitate the post-Effective Date administration of all
contracts and leases to which the Debtors and Reorganized Debtors
are a party, the Debtors propose to serve a notice of the
assumption or assignment of contracts and leases to each of their
known contract and leases counterparties.
Copies of the Assumed Contracts/Leases, Assumed Customer Program
Obligations, Summary of Restructuring Transactions, and Notice of
Restructuring Transactions are available for free at:
http://bankrupt.com/misc/Tribune_CureMoExhibits.pdf
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)
TWIN CITY: Reaches Tentative Sale Deal With Trinity Hospital
------------------------------------------------------------
Lee Morrison at TimesReporter.com reports that Twin City Hospital
has reached a tentative agreement for a sale to Trinity Hospital
Twin City, an affiliate of the Franciscan Services Corp.
According to the report, interim CEO Frank Swinehart announced
that the Twin City Hospital board of trustees unanimously voted to
approve the sale during a special meeting. Financial terms of the
sale were not released.
The report says Mr. Swinehart said the sale will enable the
facility to continue to operate as a critical access hospital and
will preserve jobs.
The Twin City Medical Group, a hospital-owned physician practice
with 10 doctors, is part of the agreement, which will enable
primary care services to be maintained in the Dennison and
Uhrichsville areas. The hospital has a total of 215 employees,
with a full-time equivalent of about 160, notes the report.
About Trinity Hospital
Based in Erin, Tennessee, Trinity Hospital LLC dba Trinity
Hospital filed for Chapter 11 bankruptcy protection on Aug. 19,
2008 (Bankr. M.D. Tenn. Case No. 08-07349). Judge Marian F.
Harrison presides over the case. G. Rhea Bucy, Esq., Linda W.
Knight, Esq., and Thomas H. Forrester, Esq., at Gullett, Sanford,
Robinson, Martin, represent the Debtor. In its petition, the
Debtor estimated both assets and debts of $1 million and $10
million.
About Twin City Hospital
Dennison, Ohio-based Twin City Hospital filed for Chapter 11
bankruptcy protection on Oct. 13, 2010 (Bankr. N.D. Ohio Case
No. 10-64360). Shawn M. Riley, Esq., at McDonald Hopkins LLC,
assists the Debtor in its restructuring effort. The Debtor
estimated its assets and debts at $10 million to $50 million.
UNIFI INC: S&P Raises Rating to Senior Secured Notes
----------------------------------------------------
Standard & Poor's Ratings Services said that it is raising the
issue-level rating on Unifi Inc.'s (B/Stable/--) 11.5% senior
secured notes due 2014 to 'B+' (one notch higher than the
corporate credit rating) from 'B'. The upgrade follows Unifi's
$30 million principle partial redemption on these notes completed
in February 2011 and resulting improvement in S&P's view of
recovery prospects for these notes. The recovery rating has been
revised to '2' from '4', indicating S&P's expectation for
substantial (70% to 90%) recovery in the event of a payment
default. S&P evaluated the recovery prospects for this issue
using both the enterprise and discrete valuation methods and both
methods resulted in a revised recovery rating of '2'. The
discrete method analysis included Unifi's equity interest in the
Parkdale America LLC joint venture. For the complete recovery
analysis, see the recovery report on Unifi Inc., to be published
separately on RatingsDirect.
The 'B' corporate credit rating on Unifi and the stable outlook
remain unchanged. S&P's ratings on Unifi reflect the company's
narrow business focus, the highly competitive conditions in its
markets, the fundamental changes in the way the textile industry
operates (which have hurt Unifi's operating performance in recent
years), and its leveraged, yet improved, financial profile. S&P
believes Unifi benefits from its large customer base and diverse
end user markets, but could face some inflationary pressure in the
near term.
Ratings List
Unifi Inc.
Corporate credit rating B/Stable/--
Ratings upgraded To From
---------------- -- ----
Senior Secured B+ B
Recovery rating 2 4
UNIGENE LABORATORIES: Incurs $27.87 Million Net Loss in 2010
------------------------------------------------------------
Unigene Laboratories, Inc., reported a net loss of $27.87 million
on $11.34 million of revenue for the year ended Dec. 31, 2010,
compared with a net loss of $13.38 million on $12.79 million of
revenue during the prior year.
Unigene announced net loss of $0.04 per share for the three months
ended Dec. 31, 2010.
The Company's balance sheet at Dec. 31, 2010 showed $28.47 million
in total assets, $68.90 million in total liabilities and $40.43
million in total stockholders' deficit.
Ashleigh Palmer, Unigene President and CEO stated, "I am extremely
pleased with our progress in the fourth quarter, specifically
having extended our projected cash runway deep into 2012, and
believe we are laying a strong foundation to ensure the successful
turnaround of Unigene." Palmer continued, "The demand for
peptides is escalating and therefore we are committed to
exploiting our proprietary PeptelligenceTM core competence and
intellectual property portfolio both internally and via industry
leading strategic partnerships. Looking forward, our business
model allows us to advance numerous opportunities in parallel.
These multiple shots on goal, coupled with the solid execution of
our strategy, promise to make 2011 a transformational year for the
new Unigene."
A full-text copy of the press release announcing the financial
results is available for free at:
http://ResearchArchives.com/t/s?74e9
About Unigene
Unigene Laboratories, Inc. OTCBB: UGNE) -- http://www.unigene.com/
-- is a biopharmaceutical company focusing on the oral and nasal
delivery of large-market peptide drugs.
Grant Thornton LLP, in New York, expressed substantial doubt about
Unigene Laboratories' ability to continue as a going concern
following the Company's 2009 results. The firm noted that the
Company has incurred a net loss of $13,400,000 during the year
ended Dec. 31, 2009 and has an accumulated deficit of
approximately $143,000,000 as of Dec. 31, 2009. As of that
date, the Company's current liabilities exceeded its current
assets by $1,251,000 and its total liabilities exceeded total
assets by $30,442,000.
UNITEK GLOBAL: Moody's Assigns 'B2' Corporate Family Rating
-----------------------------------------------------------
Moody's Investors Service assigned first-time ratings to UniTek
Global Services, Inc. consisting of a B2 Corporate Family Rating,
B2 Probability of Default Rating, Ba2 senior secured rating to its
new asset-backed revolver, B3 senior secured rating to its new
term loan 'B' and a speculative grade liquidity rating of SGL-3,
indicating adequate liquidity. The ratings outlook is stable.
The ratings are being assigned subject to review of final
documentation.
Ratings Rationale
UniTek's B2 Corporate Family rating considers the relatively high
business risks associated with its small scale providing
fulfillment and infrastructure services to the video television
and communications industries in North America. The rating also
reflects UniTek's significant customer concentration, project
execution risks, exposure to cyclical spending by its customer
base and the extent to which acquisition activity has driven the
company's historical results. Adjusted leverage of roughly 4.5x
(including capitalized operating leases) is slightly favorable for
the rating, but this advantage is offset by Moody's expectation
that free cash flow generation is likely to be modest through 2011
as UniTek funds working capital related to growth in its
Engineering & Construction segment. As well, further acquisitions
could increase debt levels, offsetting organic de-leveraging
achieved through earnings growth, and sustain integration risks
within the company's business profile. Favorably, the rating
considers the company's established market position, blue-chip
customer base, good visibility into a high proportion of its near
term revenues and its expansive capabilities across the industries
its serves. Longer term, the trend toward the outsourcing of
technical services should expand market opportunities, however
relatively low entry barriers and execution risks are factors that
could alter the company's market share.
The company's new bank facilities consist of a $75 million senior
secured asset-backed revolver due 2016 and $85 million senior
secured term loan 'B' due 2018; the proceeds of which will be used
to refinance essentially all of the company's existing debt. The
ABL facility is secured by a first charge on accounts receivables
and a second lien on all other assets whereas the term loan 'B'
has the reciprocal security package. The instrument ratings have
been assigned pursuant to Moody's loss-given-default methodology,
with the ABL facility ranked ahead of the TLB facility, reflecting
the relative quality of the receivables in the security package.
Liquidity is adequate (represented by the SGL-3 rating),
underscored by modest cash balances and expected free cash flow
generation compared to nominal near-term debt maturities. Funded
usage of the ABL facility will be about $20 million at the close
of the transaction with overall availability expected to initially
be limited to about $50 million due to borrowing base constraints.
The ratings outlook is stable reflecting Moody's expectation that
UniTek's organic earnings should increase modestly through the
next couple of years, but that cash flow may remain relatively
weak through this period and acquisition activity may hinder
meaningful deleveraging.
UniTek's ratings could be considered for possible upgrade if the
company continues to profitability increase its scale while
sustaining adjusted Debt/ EBITDA towards 3.5x. Ratings could come
under downward pressure should adjusted Debt/ EBITDA increase and
be sustained towards 5x.
Based in Blue Bell, PA, UniTek Global Services, Inc. provides
outsourced customer installation, upgrade, disconnect as well as
network management services for cable and satellite industries.
As well, UniTek provides outsourced project management,
engineering, design and construction services for the wireless and
wireline telecom industries. Total annual revenues approximate
$400 million.
UNITEK GLOBAL: S&P Assigns 'B+' Corporate Credit Rating
-------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its
preliminary 'B+' corporate credit rating to Blue Bell, Pa.-based
UniTek Global Services Inc. The outlook is stable.
At the same time, S&P issued preliminary issue-level and recovery
ratings to the company's proposed $160 million senior secured
credit facility. This facility consists of a $75 million senior
secured asset-based loan revolving credit facility (with expected
$20 million funding at closing) which S&P rate preliminary 'BB'
(two notches above the corporate credit rating) with a preliminary
'1' recovery rating.
In addition, S&P is assigning a preliminary 'B' issue-level rating
and preliminary '5' recovery rating to the $85 million senior
secured term loan. The '1' recovery rating on the ABL revolving
credit facility indicates that lenders can expect very high
(90%-100%) recovery in the event of a payment default. The '5'
recovery on the term loan indicates that lenders can expect modest
(10%-30%) recovery in the event of a payment default. The company
intends to use the proceeds to repay all existing outstanding
debt, which totaled $102 million at the end of 2010.
"The ratings on UniTek reflect its aggressive financial profile,
high customer concentration, and participation in a very
competitive and fragmented industry," said Standard & Poor's
credit analyst Naveen Sarma. Partially tempering factors include
S&P's expectation for good growth prospects over the next two
years, which S&P bases on the company's sizable backlog, multiyear
contracts with key customers, and likely continued healthy capital
expenditures by the telecommunications industry over the
intermediate term.
UniTek is a provider of outsourced infrastructure services. It
reports its results in two segments: fulfillment and engineering
and construction. The fulfillment segment, which represents about
two-thirds of consolidated revenues, primarily serves the
satellite TV and broadband cable industries, where it provides
outsourced installation, upgrade, and network management services.
The engineering and construction segment primarily serves the
wireless and wireline telecommunications industries, where it
provides engineering, design, construction, and project management
services.
UNIVERSAL BUILDING: Court Confirms Liquidation Plan
---------------------------------------------------
Bankruptcy Law360 reports that Universal Building Products Inc.
received confirmation of its Chapter 11 liquidation plan Tuesday
in Delaware, concluding a litigious reorganization that included
counsel upheavals and a fallout with the private equity group that
acquired the company's assets and funded the bankruptcy.
About Universal Building
Westminster, California-based Universal Building Products, Inc.,
dba UBP, filed for Chapter 11 bankruptcy protection on August 3,
2010 (Bankr. D. Del. Case No. 10-12453). Mark Minuti, Esq.,
MaryJo Bellew, Esq., and Teresa K.D. Currier, Esq., at Saul Ewing
LLP, represents the Debtor. UBP estimated $1 million to
$10 million in assets and $10 million to $50 million in debts in
its petition.
The Debtor's affiliates Accubrace, Inc. (Bankr. D. Del. Case No.
10-12454), Don De Cristo Concrete Accessories, Inc. (Case No. 10-
12455), Form-Co, Inc. (Case No. 10-12456), and Universal Form
Clamp, Inc. (Case No. 10-12457), filed separate Chapter 11
petitions on August 4, 2010. Accubrace estimated $500,001 to
$1 million in assets and $10 million to $50 million in debts.
Universal Form Clamp, Inc, an affiliate, disclosed $62,384,813 in
assets and $50,837,823 in liabilities as of the Chapter 11 filing.
The Garden City Group, Inc., serves as the Debtors' claims and
noticing agent.
USHEALTH GROUP: AM Best Cuts Financial Strength Rating to 'B-'
--------------------------------------------------------------
A.M. Best Co. has downgraded the financial strength rating to B-
(Fair) from B (Fair) and issuer credit ratings to "bb-" from "bb"
of Freedom Life Insurance Company of America (Freedom Life) and
National Foundation Life Insurance Company (NFL), both
subsidiaries of USHEALTH Group, Inc. (USHEALTH). The outlook for
both ratings has been revised to stable from negative. All
companies are domiciled in Fort Worth, TX.
The rating downgrades reflect Freedom Life and NFL's worse than
expected 2010 operating results, due principally to a litigation
charge, resulting in a decline in their risk-adjusted
capitalization. Last year, USHEALTH accrued for a possible
sizeable adverse legal judgment in its non-core, run-off cancer
insurance business, which negatively impacted its operating
results. Additionally, given the group's concentrated business
profile in the individual medical insurance market, the passage of
the Patient Protection and Affordable Care Act (PPACA) creates
numerous additional challenges for USHEALTH. A.M. Best believes
small medical carriers like Freedom Life and NFL will have the
most difficulty adapting to PPACA. While the organization is
trying to address many of these additional challenges with expense
reduction initiatives and revamping its product portfolio to adapt
to the new regulatory environment, it remains to be seen how
successful these efforts will be.
To help bolster its capital position somewhat, NFL divested, via a
reinsurance agreement, its non-core, limited benefit supplemental
specified disease business in the second half of 2010. A.M. Best
notes USHEALTH continues to maintain a conservative investment
portfolio.
VALEANT PHARMACEUTICALS: S&P Assigns 'BB-' Rating to Senior Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services reports that the previously
published version of this article identified a maturity as 2021,
rather than 2022; a corrected version follows, along with updated
amounts following pricing.
S&P said that it assigned its 'BB-' issue-level rating and '4'
recovery rating to Valeant Pharmaceuticals International's $950
million of senior unsecured notes due 2016 and $550 million of
senior unsecured notes due 2022.
"At the same time, S&P affirmed its 'BB-' corporate credit rating
on Valeant Pharmaceuticals International, the 'BB+' senior secured
issue-level rating on the senior secured credit facility, the 'BB-
' senior unsecured rating (which takes into consideration the new
$1.5 billion of notes), and the 'B' issue-level rating on the
subordinated notes," said Standard & Poor's credit analyst Michael
Berrian. S&P's '1' recovery rating on the senior secured
revolving credit facility, the '4' recovery rating on the senior
unsecured notes, which also takes into consideration the new $1.5
billion of notes, and the '6' recovery rating on the subordinated
notes remains unchanged. S&P will withdraw the rating on the
existing senior secured credit facility once this transaction
closes. The rating outlook on Valeant is stable.
The ratings affirmation recognizes the modest improvement in
disposable cash flow from the replacement of amortizable debt
with higher-cost, but lower cash-flow impact term debt. Valeant
Pharmaceuticals will use the aforementioned notes to refinance
its existing term loan A, pre-fund redemption of its convertible
subordinated notes, and to finance a share repurchase for investor
ValueAct.
VIKING SYSTEMS: Board Approves Incentive Plan for CEO and CFO
-------------------------------------------------------------
On March 4, 2011, Viking Systems, Inc.'s board of directors
approved the Viking Systems, Inc. 2011 Management Incentive
Compensation Plan. The Plan is designed to retain and reward the
highly qualified executives important to the Company's success,
and to provide incentives relating directly to the financial
performance and long-term growth of the Company Company.
The approved executive officers in the Plan are John "Jed"
Kennedy, president and chief executive officer, and Robert
Mathews, executive vice president and chief financial officer.
The Plan provides for the availability of target bonus amounts as
incentive compensation, calculated as a percentage of the
officer's annual salary if certain financial goals and other
individual objectives are met during the year. The board will
base its determinations for each Plan participant's attainment of
financial performance goals for the 2011 fiscal year upon three
financial metrics: total annual sales, the number of 3DHD systems
sold, and operating profit excluding non cash stock option
charges. 75% of each Plan participant's bonus target will be tied
evenly to each of those metrics (25% each). The remaining 25% of
each Plan participant's bonus target will be tied to achievement
of his or her individual goals and overall performance as an
executive officer of our Company. Mr. Kennedy's approved bonus
target is 20% of his annual salary, or $54,600. Mr. Mathews'
approved bonus target is 15% of his annual salary, or $33,075.
About Viking Systems
Based in Westborough, Massachusetts, Viking Systems, Inc. (OTCBB:
VKNG.OB) -- http://www.vikingsystems.com/-- is a developer,
manufacturer and marketer of visualization solutions for complex
minimally invasive surgery. The Company partners with medical
device companies and healthcare facilities to provide surgeons
with proprietary visualization systems enabling minimally invasive
surgical procedures, which reduce patient trauma and recovery
time.
The Company reported a net loss applicable to common shareholders
of $2.44 million on $8.04 million of sales for the year ended Dec.
31, 2010, compared with a net loss applicable to common
shareholders of $1.07 million on $7.22 million of sales
during the prior year.
The report from Viking Systems, Inc.'s independent registered
public accounting firm, Squar, Milner, Peterson, Miranda &
Williamson, LLP, dated February 22, 2010, includes a going concern
explanatory paragraph which states that factors relating to the
Company's net losses and working capital concerns raise
substantial doubt the Company's ability to continue as a going
concern. Viking Systems said it will need to generate significant
additional revenue to achieve profitability and it may require
additional financing during 2010. "The going concern explanatory
paragraph in the independent auditor's report emphasizes the
uncertainty related to our business as well as the level of risk
associated with an investment in our common stock," Viking Systems
said.
VILLAGE OAKS: Case Summary & 9 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Village Oaks Square, LLC
406 N. Florida St., Suite 1
Covington, LA 70433
Bankruptcy Case No.: 11-10726
Chapter 11 Petition Date: March 9, 2011
Court: United States Bankruptcy Court
Eastern District of Louisiana (New Orleans)
Judge: Jerry A. Brown
Debtor's Counsel: Barry W. Miller, Esq.
HELLER, DRAPER, HAYDEN, PATRICK & HORN, LLC.
P.O . Box 86279
Baton Rouge, LA 70879-6279
Tel: (225) 767-1499
Fax: (225) 761-0706
E-mail: bmiller@hellerdraper.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 nine largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/laeb11-10726.pdf
The petition was signed by John C. Yemelos, manager.
WASHINGTON MUTUAL: Objections Filed to Modified WaMu Disclosures
----------------------------------------------------------------
Bill Rochelle, Bloomberg News' bankruptcy columnist, reports that
Washington Mutual Inc. creditors and shareholders filed their
objections last week to the disclosure statement describing the
Chapter 11 plan for the holding company of the largest bank ever
to fail in the U.S.
Mr. Rochelle relates that a group of noteholders with $2.1 billion
in debt said they are "wondering when they will receive"
distributions under the new plan. Without changes, they "may be
forced to wait an additional excruciating period," they said.
In particular, the noteholders want the plan modified so the judge
can impose the proper rate of interest if she disagrees with the
interest rate WaMu proposes.
According to Mr. Rochelle, holders of notes issued by the bank
subsidiary complained that the new plan "provides for interest
payments to certain unsecured creditors before payments are made
to satisfy claims of other unsecured creditors."
Mr. Rochelle relates that the official shareholders' committee
said WaMu "largely ignored the most glaring deficiencies and
issues identified by the court" in the January opinion.
Holders of trust-preferred securities, the report relates, called
the disclosure statement "materially misleading and incomplete,"
largely on account of perceived deficiencies in the valuation
analysis and liquidation analysis.
May 2 is the tentative date for the confirmation hearing for
approval of the modified plan. When confirmed, the plan will
distribute more than $7 billion.
Peg Brickley, writing for Dow Jones' Daily Bankruptcy Review,
reported that a spokesman for Washington Mutual said Wednesday the
company will file papers this week to respond to the plan's
critics.
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- is a holding company for Washington Mutual
Bank as well as numerous non-bank subsidiaries.
Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S.
government regulators. The next day, WaMu and its affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns
100% of the equity in WMI Investment. When WaMu filed for
protection from its creditors, it disclosed assets of
$32,896,605,516 and debts of $8,167,022,695. WMI Investment
estimated assets of $500 million to $1 billion with zero debts.
WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal &
Manges LLP in New York City; Mark D. Collins, Esq., at Richards,
Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari,
Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver &
Hedges, LLP. Fred S. Hodera, Esq., at Akin Gump Strauss Hauer &
Fled LLP in New York City and David B. Stratton, Esq., at Pepper
Hamilton LLP in Wilmington, Del., represent the Official Committee
of Unseucred Creditors. Stephen D. Susman, Esq., at Susman
Godfrey LLP and William P. Bowden, Esq., at Ashby & Geddes, P.A.,
represent the Equity Committee. Stacey R. Friedman, Esq., at
Sullivan & Cromwell LLP and Adam G. Landis, Esq., at Landis Rath &
Cobb LLP in Wilmington, Del., represent JPMorgan Chase, which
acquired WaMu's assets prior to the Petition Date.
Washington Mutual has filed with the U.S. Bankruptcy Court for the
District of Delaware a Modified Sixth Amended Joint Plan of
Affiliated Debtors Pursuant to Chapter 11 of the United States
Bankruptcy Code and a related Supplemental Disclosure Statement.
On Jan. 7, 2011, the Bankruptcy Court entered a 107-page opinion
determining that the global settlement agreement, among certain
parties including WMI, the Federal Deposit Insurance Corporation
and JPMorgan Chase Bank, N.A., upon which the Modified Plan is
premised, and the transactions contemplated therein, are fair,
reasonable, and in the best interests of WMI. Additionally, the
Opinion and related order denied confirmation, but suggested
certain modifications to the Company's Sixth Amended Joint Plan of
Affiliated Debtors that, if made, would facilitate confirmation.
The Company believes that the Modified Plan has addressed the
Bankruptcy Court's concerns and looks forward to returning to the
Bankruptcy Court to seek confirmation of the Modified Plan.
The hearing for approval of the revised disclosure statement is
set for March 21.
WELLPOINT SYSTEMS: Court Recognizes CA Receivership Proceeding
--------------------------------------------------------------
The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware recognized the Canadian Receivership
Proceeding of WellPoint Systems and its debtor-affiliates pending
in the Canadian Court in Alberta, Canada, as a "Foreign Main
Proceeding."
About WellPoint Systems
Founded in 1997, Calgary-based WellPoint Systems --
http://www.wellpointsystems.com/-- is publicly traded on the TSX
Venture Exchange under the symbol WPS.
WellPoint Systems delivers software solutions and services that
transform complex data into Business Insight for more than 450
companies in 60 countries worldwide. WellPoint Systems is
recognized as a leader in providing Financial, Energy Marketing
and Trading solutions to the Oil and Gas industry with its award
winning BOLO, IDEAS, Energy Financial Management and Energy Broker
products.
The Company filed for Chapter 15 bankruptcy protection on Feb. 10,
2011 (Bankr. D. Del. Lead Case No. 11-10423). Judge Mary Walrath
presides over the case. Jeremy William Ryan, Esq., and Ryan M.
Murphy, Esq., at Potter Anderson & Corroon LLP, represents the
Debtors. In their petition, the Debtors estimated both assets and
debts of between $50 million and $100 million. Ernst & Young,
Inc., as court-appointed receiver.
WESTMORELAND COAL: Posts $3.2 Million Net Loss in Full-Year 2010
----------------------------------------------------------------
Westmoreland Coal Company reported Thursday its results for the
fiscal year ended Dec. 31, 2010.
The Company reported a net loss of $3.2 million on $506.1 million
of revenues for 2010, compared with a net loss of $29.2 million on
$443.4 million of revenues for 2009. Operating income was
$20.5 million in 2010 compared to a loss of $31.8 million in 2009.
"During 2010, we increased our operating profit by over
$52 million by improving both our coal and power operating results
while significantly driving down our heritage costs," said Keith
E. Alessi, Westmoreland's President and CEO. "Absent the mark-to-
market expense on our convertible debt feature, we would have
posted a net income for 2010. Our coal operations achieved strong
cost performance during the year, while again demonstrating our
commitment to safety by significantly beating the national surface
mine averages."
"With the closing of our $150 million senior secured notes issued
on February 4th, we have significantly enhanced our liquidity
position, strengthened our balance sheet, and positioned the
company for the future. The refinancing expenses and the
conversion premium on our convertible debt will result in a first
quarter charge of approximately $20 million. Absent those
charges, we expect our results to continue to improve in 2011."
Westmoreland's 2010 net loss includes $3.4 million of mark-to-
market expense from the conversion feature on the Company's
convertible notes and $1.4 million of debt discount amortization
expense also associated with the accounting requirements for the
convertible notes.
Westmoreland's 2009 net loss includes a $17.1 million non-cash
income tax benefit resulting from other comprehensive income
gains, $5.1 million of income from the favorable valuation of the
conversion feature in the Company's convertible notes, an $800,000
gain related to the settlement of a heritage benefit claim, and
$4.8 million of expense related to the settlement of a customer
dispute.
The increase in revenues was primarily driven by a $56.9 million
increase in coal segment revenue due to price increases under
existing coal supply agreements, the start of new agreements, and
the significant customer shutdowns we experienced during 2009.
The Company's balance sheet at Dec. 31, 2010, showed
$750.3 million in total assets, $912.7 million in total
liabilities, and a stockholders' deficit of $162.4 million.
The Company's earnings release is available for free at:
http://researcharchives.com/t/s?74fa
The Company's annual report on Form 10-K is available for free at:
http://researcharchives.com/t/s?74f9
Colorado Springs, Colo.-based Westmoreland Coal Company (NYSE
AMEX: WLB) -- http://www.westmoreland.com/-- is the oldest
independent coal company in the United States. The Company's coal
operations include coal mining in the Powder River Basin in
Montana and lignite mining operations in Montana, North Dakota and
Texas. Its power operations include ownership of the two-unit
ROVA coal-fired power plant in North Carolina.
As reported in the TCR on March 4, 2011, Standard & Poor's Ratings
Services said that it assigned a 'CCC+' corporate credit rating to
Colorado Springs, Colorado-based Westmoreland Coal Co. The rating
outlook is stable
WOLVERINE TUBE: May Hire Deloitte as Tax Advisors
-------------------------------------------------
Wolverine Tube Inc. and its debtor-affiliates said they need the
services of a tax advisor to assist them with tax issues that will
arise in connection with their Chapter 11 plan of reorganization.
Accordingly, they won permission from the Bankruptcy Court to
employ Deloitte Tax LLP. Deloitte's M. Sean Lay will lead the
engagement.
The Debtors said Deloitte's services won't duplicate the services
of the other bankruptcy professionals they have employed.
Pursuant to the parties' Engagement Letter, Deloitte's per-hour
blling rates are:
Professional Rate
------------ ----
Partner, Principal or Director $575, $695
Senior manager $515, $590
Manager $445, $515
Senior $315, $360
Staff $255, $295
Deloitte will also be reimbursed for necessary expenses.
The Debtors also agreed to provide indemnification to Deloitte on
account of its services, except from gross negligence, bad faith
or intentional misconduct.
Mr. Lay said his firm is a "disinterested person" within the
meaning of Sec. 101(14) of the Bankruptcy Code.
About Wolverine Tube
Huntsville, Alabama-based Wolverine Tube, Inc., is a global
manufacturer and distributor of copper and copper alloy tube,
fabricated products, and metal joining products. The Company
currently operates seven facilities in the United States, Mexico,
China, and Portugal. It also has distribution operations in the
Netherlands and the United States.
Wolverine Tube sought Chapter 11 bankruptcy protection (Bankr. D.
Del. Case No. 10-13522) on Nov. 1, 2010. Mark E. Felger, Esq.,
and Simon E. Fraser, Esq., at Cozen O'Connor represent the Debtor.
Scott K. Rutsky, Esq., and Adam T. Berkowitz, Esq., at Proskauer
Rose LLP, serve as the Debtor's special corporate and tax counsel.
Deloitte Financial Advisory Services LLP is the Debtor's financial
advisor. Donlin Recano & Company, Inc., is the Debtor's claim
agent. The Debtor disclosed $115 million in total assets and $237
million in total debts at the time of the filing.
Affiliates Tube Forming, L.P. (Bankr. D. Del. Case No. 10-13523),
Wolverine Joining Technologies, LLC (Bankr. D. Del. Case No.
10-13524), TF Investor Inc. (Bankr. D. Del. Case No. 10-13525),
and WT Holding Company, Inc. (Bankr. D. Del. Case No. 10-13526)
filed separate Chapter 11 petitions.
No official committee of unsecured creditors has been appointed in
the case.
The Debtors filed a prearranged chapter 11 plan proposing to pay
unsecured creditors in full and turning ownership of the
reorganized company over to their noteholders.
YRC WORLDWIDE: Transitions CFO Responsibilities
-----------------------------------------------
YRC Worldwide Inc. announced that Sheila Taylor, executive vice
president and chief financial officer, has decided to leave the
company effective March 31 to pursue opportunities outside of the
less-than-truckload industry. Ms. Taylor has been CFO since
October 2009 and prior to that was Vice President of Investor
Relations and Treasurer.
"Sheila has been instrumental in the company's financial
restructuring over the last few years, including the significant
turnaround in operating results and the generation and
preservation of liquidity," stated Bill Zollars, chairman,
president and CEO of YRC Worldwide. "I personally appreciate what
we have accomplished under her leadership and wish her well as she
takes her career in a different direction."
William Trubeck, a member of the Board of Directors since 1994,
will take over as interim Executive VP & CFO while the company
completes its restructuring efforts.
Trubeck has over 30 years experience in executive leadership
positions for Fortune 500 companies including specific experience
as the CFO at H&R Block, Waste Management, and International
Multi-Foods. In addition, he has led a variety of restructuring
efforts during his career.
"We are extremely fortunate to have a person of Bill's executive
experience and capability, as well as a long-term member of our
Board, step into this interim role as CFO. We fully expect him to
play an important role in completing the final steps in the
restructuring efforts of YRCW," stated John Lamar, chief
restructuring officer.
Trubeck has served in various corporate director positions
including WellCare Health Plans, Dynegy, Ceridian Corporation and
The Federal Home Loan Bank of Des Moines and is currently vice
chairman of the board of trustees of Monmouth College, Monmouth,
Ill. Trubeck received his Bachelor of Arts in Business
Administration from Monmouth College and a Master of Business
Administration from the University of Connecticut.
About YRC Worldwide
Headquartered in Overland Park, Kan., YRC Worldwide Inc. (NASDAQ:
YRCW) -- http://www.yrcw.com/-- is a holding company that through
wholly owned operating subsidiaries offers its customers a wide
range of transportation services. These services include global,
national and regional transportation as well as logistics.
The Company's balance sheet at Dec. 31, 2010, showed
$2.63 billion in total assets, $2.73 billion in total liabilities
and $95.84 million in total shareholders' deficit.
The Company recorded a net loss of $322.23 million on
$4.33 billion of operating revenue for the twelve months ended
Dec. 31, 2010, compared with a net loss of $622.02 million on
$4.87 billion of operating revenue during the prior year.
As reported in the Troubled Company Reporter on March 18, 2010,
KPMG LLP, in Kansas City, Missouri, expressed substantial doubt
about YRC Worldwide's ability to continue as a going concern in
its report on the Company's consolidated financial statements as
of and for the year ended Dec. 31, 2009. The independent
auditors noted that the Company has experienced significant
declines in operations, cash flows, and liquidity.
* * *
In January 2011, Standard & Poor's Ratings Services placed its
'CCC-' corporate credit rating on YRC Worldwide Inc. (YRCW) on
CreditWatch developing. At the same time, S&P is withdrawing the
existing issue level ratings on Yellow Corp.'s senior unsecured
debt, given the negligible amounts outstanding.
"The ratings on Overland Park, Kan.-based YRCW reflect its near-
term liquidity challenges, meaningful off-balance-sheet contingent
obligations related to multiemployer pension plans, as well as its
participation in the competitive, capital-intensive, and cyclical
trucking industry," said Standard & Poor's credit analyst Anita
Ogbara. "YRCW's substantial (albeit deteriorating) market
position in the less-than-truckload (LTL) sector, which has high
barriers to entry, partially offsets these characteristics. We
characterize YRCW's business profile as weak, financial profile as
highly leveraged, and liquidity as weak."
ZALE CORP: Files Jan. 2011 10-Q; Posts $27.21MM Net Earnings
------------------------------------------------------------
Zale Corporation filed its quarterly report on Form 10-Q reporting
net earnings of $27.21 million on $626.41 million of revenue for
the three months ended Jan. 31, 2011, compared with net earnings
of $6.65 million on $582.25 million of revenue for the same period
during the prior year.
The Company also reported a net loss of $70.67 million on $953.45
million of revenue for the six months ended Jan. 31, 2011,
compared with a net loss of $53.05 million on $911.46 million of
revenue for the same period during the prior year.
The Company's balance sheet at Jan. 31, 2011 showed $1.20 billion
in total assets, $960.97 million in total liabilities and $244.01
million in total stockholders' investment.
A full-text copy of the Quarterly Report is available for free at:
http://ResearchArchives.com/t/s?74e7
About Zale Corporation
Based in Dallas, Texas, Zale Corporation (NYSE: ZLC) --
http://www.zalecorp.com/-- is a specialty retailer of diamonds
and other jewelry products in North America, operating
approximately 1,900 retail locations throughout the United States,
Canada and Puerto Rico, as well as online. Zale Corporation's
brands include Zales Jewelers, Zales Outlet, Gordon's Jewelers,
Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Zale
also operates online at http://www.zales.com/,
http://www.zalesoutlet.com/,
http://www.gordonsjewelers.com/and http://www.pagoda.com/
Zale reported a net loss of $93.67 million on $1.62 billion of
revenues for the year ended July 31, 2010, compared with a net
loss of $166.35 million on $1.78 billion of revenues for the same
period a year ago.
As reported by the Troubled Company Reporter on February 10, 2010,
The Deal.com's Sara Behunek reported that analysts said bankruptcy
looms for Zale if it fails to restructure its debt and put in
place a solid merchandising strategy.
* S&P's Global Corporate Default Tally This Year Remains at Three
-----------------------------------------------------------------
The 2011 global corporate default tally remains at three issuers
after no issuers defaulted this week, said an article published
March 11 by Standard & Poor's, titled "Global Corporate Default
Update (March 4 - 10, 2011) (Premium)."
Two of these defaults were based in the U.S. and one was based in
the Czech Republic. By comparison, 19 global corporate issuers
defaulted at this time last year (15 U.S.-based issuers and one
each based in Argentina, Australia, Bahrain, and Canada).
All three of this year's defaulters missed interest or principal
payments, which was one of the top reasons for default last year.
Of the defaults in 2010, 28 defaults resulted from missed interest
or principal payments, 25 defaults resulted from Chapter 11 and
foreign bankruptcy filings, 23 from distressed exchanges, three
from receiverships, one from regulatory directives, and one from
administration.
* Bank Toll Rises to 25 in 2011 With Oklahoma, Wisconsin Closures
-----------------------------------------------------------------
Regulators shut down banks in Oklahoma and Wisconsin that held
less than $300 million in combined assets as U.S. closures this
year climbed to 25.
The First National Bank of Davis, Davis, Oklahoma, was closed
March 11 by the Office of the Comptroller of the Currency, which
appointed the Federal Deposit Insurance Corporation (FDIC) as
receiver. To protect the depositors, the FDIC entered into a
purchase and assumption agreement with The Pauls Valley National
Bank, Pauls Valley, Oklahoma, to assume all of the deposits of The
First National Bank of Davis. The FDIC estimates that the cost to
the Deposit Insurance Fund (DIF) will be $26.5 million. "Compared
to other alternatives, The Pauls Valley National Bank's
acquisition was the least costly resolution for the FDIC's DIF,"
the FDIC said.
Legacy Bank, Milwaukee, Wisconsin, was closed by the Wisconsin
Department of Financial Institutions, which appointed the Federal
Deposit Insurance Corporation (FDIC) as receiver. To protect the
depositors, the FDIC entered into a purchase and assumption
agreement with Seaway Bank and Trust Company, Chicago, Illinois,
to assume all of the deposits of Legacy Bank. The FDIC estimates
that the cost to the DIF will be $43.5 million.
Bloomberg News notes that banks are closing even as commercial
real estate prices, which fell 45% from the October 2007 peak to
the trough last August, have risen in three of the last four
months, according to Moody's Investors Service. Since 2008, 347
lenders have been shut down by regulators.
2011 Failed Banks List
The FDIC was appointed as receiver for the closed banks. To
protect the depositors, the FDIC entered into a purchase and
assumption agreement with various banks that agreed to assume the
deposits of most of the closed banks. The FDIC also entered into
loss-share transactions on assets bought by the banks.
For this year, the failed banks are:
Loss-Share
Transaction Party FDIC Cost
Assets of Bank That Assumed to Insurance
Closed Bank Deposits & Bought Fund
Closed Bank (millions) Certain Assets (millions)
----------- ---------- -------------- -----------
Legacy Bank $190.4 Seaway Bank and Trust $43.5
First Nat'l Bank of Davis $90.2 The Pauls Valley National $26.5
Valley Community Bank $123.8 First State Bank $22.8
Citizens Bank $214.3 Heritage Bank $59.4
San Luis Trust $332.6 First California $96.1
Habersham Bank $387.6 SCBT National $90.3
Charter Oak Bank $120.8 Bank of Marin $21.8
Sunshine State $125.5 Premier American $30.0
Badger State Bank $83.8 Royal Bank $17.5
Canyon National $210.9 Pacific Premier Bank $10.0
Peoples State Bank $390.5 First Michigan Bank $87.4
American Trust Bank $238.2 Renasant Bank $71.5
Community First $51.1 Northbrook Bank $11.7
North Georgia Bank $153.2 BankSouth $35.2
First Community Bank $2,310.0 U.S. Bank, N.A. $260.0
FirsTier Bank $781.5 No Acquirer $242.6
Evergreen State $246.5 McFarland State $22.8
The First State Bank $43.5 Bank 7 $20.1
The Bank of Asheville $195.1 First Bank $56.2
CommunitySouth Bank $440.6 Certus Bank $46.3
Enterprise Banking $100.9 [No Acquirer] $39.6
United Western Bank $2,050.0 First-Citizens Bank $312.8
Oglethorpe Bank $230.6 Bank of the Ozarks $80.4
Legacy Bank, Arizona $150.6 Enterprise Bank & Trust $27.9
First Commercial Bank $598.5 First Southern Bank $78.0
In 2010, there were 157 failed banks, compared with 140 in 2009
and just 25 for 2008.
A complete list of banks that failed since 2000 is available at:
http://www.fdic.gov/bank/individual/failed/banklist.html
884 Banks in Problem List
The FDIC said for all of 2010, mergers absorbed 197 institutions,
while 157 insured commercial banks and savings institutions
failed. This is the largest annual number of bank failures since
1992, when 181 institutions failed.
The number of institutions on the FDIC's "Problem List" increased
from 860 in the third quarter to 884 in the fourth quarter. There
were 775 banks on the list at the end of the first quarter and 829
at June 30.
Total assets of "problem" institutions increased from $379 billion
at Sept. 30, 2010, to $390 billion at the end of the fourth
quarter. The assets though are below the $403 billion reported at
year-end 2009.
FDIC Chairman Sheila C. Bair notes the rate of increase in the
number of "problem" banks has declined in each of the past four
quarters. Thirty insured institutions failed during the fourth
quarter, bringing the total number of failures for the full year
to 157. "As we have repeatedly stated, we believe that the number
of failures peaked in 2010, and we expect both the number and
total assets of this year's failures to be lower than last
year's," added Bair.
Problem Institutions Failed Institutions
-------------------- -------------------
Year Number Assets (Mil) Number Assets (Mil)
---- ------ ------------ ------ ------------
2010 884 $390,017 157 $92,085
2009 702 $402,800 140 $169,700
2008 252 $159,405 25 $371,945
2007 76 $22,189 3 $2,615
2006 50 $8,265 0 $0
2005 52 $6,607 0 $0
2004 80 $28,250 4 $170
Federal regulators assign a composite rating to each financial
institution, based upon an evaluation of financial and operational
criteria. The rating is based on a scale of 1 to 5 in ascending
order of supervisory concern. "Problem" institutions are those
institutions with financial, operational, or managerial weaknesses
that threaten their continued financial viability. Depending upon
the degree of risk and supervisory concern, they are rated either
a "4" or "5." The number and assets of "problem" institutions are
based on FDIC composite ratings. Prior to March 31, 2008, for
institutions whose primary federal regulator was the OTS, the OTS
composite rating was used.
* In New Deal, Developer Aims to Continue Hollywood's Comeback
--------------------------------------------------------------
Dow Jones' DBR Small Cap reports that the Hollywood district of
Los Angeles, which fell from its glory days like an aging starlet,
has been recovering some of its lost glamour over the past decade.
Starting with the opening of the Hollywood & Highland Center
complex in 2001 and the return of the Academy Awards ceremony in
2002, Hollywood has seen more than $3 billion in projects over the
past 10 years, according to the Hollywood Chamber of Commerce.
Last year, the report relates, the W Hollywood hotel opened with
305 rooms.
Now the Los Angeles City Council could approve an agreement to
sell a property at 1601 North Vine St. for about $825,000 to a
developer slated to build an eight-story office building on the
site, according to the report.
Under the terms of the transaction, DBR notes, a majority of the
space would be reserved for businesses tied to the entertainment
industry, something that is needed, given the new housing in the
area, according to the developer.
* Paul Weiss' Alice Eaton Earns Spot in Law360's Lawyers to Watch
-----------------------------------------------------------------
Alice Eaton's ability to take on wildly diverse clients and handle
the biggest, most complex bankruptcy matters that Paul Weiss
Rifkind Wharton & Garrison LLP has thrown her way - including the
bankruptcies of AbitibiBowater Inc. and CIT Group Inc. - have
earned her a place on Law360's list of five bankruptcy lawyers
under 40 to watch.
Ms. Eaton helped negotiate the largest prepackaged bankruptcy in
history in the case of CIT, a huge lender to small and midsize
businesses in the U.S.
* BOND PRICING -- For Week From March 7 - 11, 2011
--------------------------------------------------
Company Coupon Maturity Bid Price
------- ------ -------- ---------
155 E TROPICANA 8.750% 4/1/2012 4.659
ACARS-GM 8.100% 6/15/2024 20.320
ADVANTA CAP TR 8.990% 12/17/2026 13.000
AHERN RENTALS 9.250% 8/15/2013 47.000
AMBAC INC 5.950% 12/5/2035 11.500
AMBAC INC 6.150% 2/7/2087 1.500
AMBAC INC 7.500% 5/1/2023 15.250
AMBAC INC 9.500% 2/15/2021 11.063
AMBASSADORS INTL 3.750% 4/15/2027 38.250
AMER GENL FIN 5.000% 3/15/2011 99.742
AMER GENL FIN 5.100% 3/15/2011 99.630
BANK NEW ENGLAND 8.750% 4/1/1999 11.250
BANK NEW ENGLAND 9.875% 9/15/1999 13.000
BANKUNITED FINL 6.370% 5/17/2012 5.500
BIGLARI HOL-CALL 14.000% 3/30/2015 96.000
BLOCKBUSTER INC 9.000% 9/1/2012 1.188
CAPMARK FINL GRP 5.875% 5/10/2012 44.351
CS FINANCING CO 10.000% 3/15/2012 3.000
DUNE ENERGY INC 10.500% 6/1/2012 71.750
EDDIE BAUER HLDG 5.250% 4/1/2014 4.000
EVERGREEN SOLAR 4.000% 7/15/2013 34.500
FAIRPOINT COMMUN 13.125% 4/1/2018 10.375
FRIEDE GOLDMAN 4.500% 9/15/2004 0.950
GENERAL MOTORS 7.125% 7/15/2013 27.541
GENERAL MOTORS 7.700% 4/15/2016 29.975
GENERAL MOTORS 9.450% 11/1/2011 26.000
GENWORTH GLOBAL 5.125% 3/15/2011 100.090
GREAT ATLA & PAC 5.125% 6/15/2011 39.750
GREAT ATLA & PAC 6.750% 12/15/2012 38.500
GREAT ATLANTIC 9.125% 12/15/2011 32.000
HARRY & DAVID OP 9.000% 3/1/2013 34.938
KEYSTONE AUTO OP 9.750% 11/1/2013 25.000
LEHMAN BROS HLDG 1.500% 3/23/2012 22.875
LEHMAN BROS HLDG 4.500% 8/3/2011 25.500
LEHMAN BROS HLDG 4.700% 3/6/2013 22.500
LEHMAN BROS HLDG 4.800% 2/27/2013 22.500
LEHMAN BROS HLDG 4.800% 3/13/2014 25.125
LEHMAN BROS HLDG 5.000% 1/22/2013 22.750
LEHMAN BROS HLDG 5.000% 2/11/2013 25.030
LEHMAN BROS HLDG 5.000% 3/27/2013 25.750
LEHMAN BROS HLDG 5.000% 8/5/2015 24.625
LEHMAN BROS HLDG 5.100% 1/28/2013 24.000
LEHMAN BROS HLDG 5.150% 2/4/2015 24.000
LEHMAN BROS HLDG 5.250% 2/6/2012 25.131
LEHMAN BROS HLDG 5.250% 2/11/2015 23.300
LEHMAN BROS HLDG 5.350% 2/25/2018 17.800
LEHMAN BROS HLDG 5.500% 4/4/2016 24.750
LEHMAN BROS HLDG 5.625% 1/24/2013 26.500
LEHMAN BROS HLDG 5.750% 7/18/2011 25.500
LEHMAN BROS HLDG 5.750% 5/17/2013 25.875
LEHMAN BROS HLDG 5.750% 1/3/2017 0.055
LEHMAN BROS HLDG 6.000% 7/19/2012 25.000
LEHMAN BROS HLDG 6.000% 6/26/2015 24.000
LEHMAN BROS HLDG 6.000% 12/18/2015 23.100
LEHMAN BROS HLDG 6.200% 9/26/2014 25.250
LEHMAN BROS HLDG 6.625% 1/18/2012 25.500
LEHMAN BROS HLDG 8.500% 8/1/2015 25.000
LEHMAN BROS HLDG 8.750% 12/21/2021 24.000
LEHMAN BROS HLDG 8.800% 3/1/2015 25.000
LEHMAN BROS HLDG 8.920% 2/16/2017 25.750
LEHMAN BROS HLDG 9.500% 12/28/2022 23.500
LEHMAN BROS HLDG 9.500% 1/30/2023 22.500
LEHMAN BROS HLDG 9.500% 2/27/2023 22.750
LEHMAN BROS HLDG 10.000% 3/13/2023 22.300
LEHMAN BROS HLDG 10.375% 5/24/2024 23.750
LEHMAN BROS HLDG 11.000% 6/22/2022 23.250
LEHMAN BROS HLDG 11.000% 3/17/2028 23.750
LEHMAN BROS HLDG 12.120% 9/11/2009 5.390
LEHMAN BROS HLDG 18.000% 7/14/2023 22.500
LEHMAN BROS HLDG 22.650% 9/11/2009 24.000
LOCAL INSIGHT 11.000% 12/1/2017 4.000
LTX-CREDENCE 3.500% 5/15/2011 90.000
MAGNA ENTERTAINM 7.250% 12/15/2009 3.000
MAJESTIC STAR 9.750% 1/15/2011 18.000
METALDYNE CORP 11.000% 6/15/2012 5.000
NEWPAGE CORP 10.000% 5/1/2012 66.000
NEWPAGE CORP 12.000% 5/1/2013 35.500
RASER TECH INC 8.000% 4/1/2013 35.000
RESTAURANT CO 10.000% 10/1/2013 8.250
RESTAURANT CO 10.000% 10/1/2013 8.500
SBARRO INC 10.375% 2/1/2015 25.000
SBC COMMUNICATIO 6.250% 3/15/2011 99.500
SPHERIS INC 11.000% 12/15/2012 1.500
THORNBURG MTG 8.000% 5/15/2013 2.000
TIMES MIRROR CO 7.250% 3/1/2013 35.000
TRANS-LUX CORP 8.250% 3/1/2012 16.200
TRICO MARINE 3.000% 1/15/2027 6.625
TRICO MARINE SER 8.125% 2/1/2013 10.250
TXU ENERGY CO 7.000% 3/15/2013 29.000
UAL-CALL03/11 5.000% 2/1/2021 100.000
UNITEDHEALTH GRP 5.250% 3/15/2011 100.000
VIRGIN RIVER CAS 9.000% 1/15/2012 50.000
WASH MUT BANK FA 5.125% 1/15/2015 0.225
WOLVERINE TUBE 15.000% 3/31/2012 30.000
*********
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
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than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
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related conferences are encouraged. Send announcements to
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On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
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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
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re-mailing and photocopying) is strictly prohibited without prior
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herein is obtained from sources believed to be reliable, but is
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