/raid1/www/Hosts/bankrupt/TCR_Public/110330.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, March 30, 2011, Vol. 15, No. 88
Headlines
ACCREDITED HOME: Hearing on Plan Outline Moved to March 30
ACORN CAPITAL: Sued Over Plan to Divert Funds From Petters Victims
ADVANCE TECH: Case Summary & 20 Largest Unsecured Creditors
AES THAMES: Files Schedules of Assets and Liabilities
A.G. FERRARI: Case Summary & 20 Largest Unsecured Creditors
ALLEN CAPITAL: DLH Seeks Expedited Sale of Langdon Road Property
ALLEN CAPITAL: DLH Seeks Expedited Sale of ADESA Property
ALLEN CAPITAL: Hearing on ACP & DLH Plan Outline Reset to Apr. 18
ALLIED SPECIALTY: S&P Assigns 'B+' Corporate Credit Rating
ALLY FINANCIAL: Issuing 2.12% Demand Notes From March 28-April 3
ALPHATRADE.COM: Case Summary & 20 Largest Unsecured Creditors
AMERICAN APPAREL: Gets NYSE Notice for Incomplete 2009 Report
AMERICAN APPAREL: Lion/Hollywood Discloses 16.8% Equity Stake
AMERICAN APPAREL: CEO Charney Acquires 3.9-Mil. Add'l Shares
AMTRUST FINANCIAL: Plan Outline Hearing Reset to June 10
APPLESEED'S INTERMEDIATE: Lands Better Exit Financing Deal
ARVINMERITOR INC: Lawrence Robbins Discloses 5.72% Equity Stake
A.T. REYNOLDS: Refusing to Settle Not Contempt of Mediation Order
BANKS HOLDING: Files Schedules of Assets & Liabilities
BANKS HOLDING: Section 341(a) Meeting Scheduled for April 27
BANKS HOLDING: Wins Approval for Pitts Hay as Bankruptcy Counsel
BANKUNITED FINANCIAL: Seeks to Hire Structured Capital as Advisor
BORDERS GROUP: Has Approval for Jefferies as Investment Banker
BORDERS GROUP: Wins Nod for DJM Realty as Realtor
BORDERS GROUP: Committee Proposes BDO as Financial Advisor
BORDERS GROUP: Wins Final Approval for Claims Trading Limitations
BORDERS GROUP: Proposes to Fix June 1, 2011 as Claims Bar Date
BOUNDARY BAY: Case Summary & 20 Largest Unsecured Creditors
BUTLER INT'L: McBreen Demands Insurer Cover Fiduciary Claims
CARPENTER CONTRACTORS: Hires GlassRatner as Financial Advisors
CARPENTER CONTRACTORS: Has Until May 23 to Decide on Leases
CENTRAL LEASING: Hearing on Chapter 7 Conversion on April 26
CENTRAL LEASING: Can Employ Michael Muller as Counsel
CHINA CENTURY: Faruqi & Faruqi Investigates Potential Wrongdoing
CHINA INTELLIGENT: MaloneBailey Resigns Due to Accounting Fraud
CLEARWIRE CORP: CFO and COO Acquire Common Shares
COMMERCIAL VISIONS: Case Summary & 10 Largest Unsecured Creditors
CONTESSA PREMIUM: Creditors Panel Taps Arent Fox as Counsel
CONTESSA PREMIUM: Creditors Panel Hires FTI as Fin'l Consultants
CONTESSA PREMIUM: Has Court OK to Employ Scouler as Fin'l Advisor
CONTESSA PREMIUM: Files Schedules of Assets and Liabilities
CORUS BANKSHARES: Exclusivity Extension Hearing on March 31
CREEKSIDE DEVELOPMENT: Case Summary & 4 Largest Unsec. Creditors
CROSS COUNTY: Voluntary Chapter 11 Case Summary
DELTA AIR: Delta, Air France Consider Bid for Virgin Atlantic
DELTA AIR: Faces Passenger Lawsuit for Unpaid EU Compensation
DELTA AIR: Plans to Deal with Indian Jet Airways
DOLLAR GENERAL: S&P Gives Positive Outlook, Affirms 'BB' Rating
DOMTAR CORP: To Permanently Shut Down One Paper Machine in Ashdown
DRYSHIPS INC: Q4 Results Today; Conference Call Tomorrow
DYNEGY HOLDINGS: Moody's Lowers Corporate Credit Rating to 'Caa3'
EASTMAN KODAK: ITC to Review ALJ's Determination on Patent Claim
EL POLLO: Vulnerable to Default, Says S&P; Ratings Cut to 'CC'
ELLIPSO INC: Wants Claims in Suit vs. Mann Barred
ELLIPSO INC: Court Won't Reverse Ruling on Mann et al. Claims
ELLIPSO INC: Castiel's Motion to Reconsider Fails Under FRBP 3008
FISHER ISLAND: Case Transferred to Judge A. Jay Cristol
FISHER ISLAND: Petitioning Creditors Want Trustee to Take Over
FISHERMAN'S WHARF: Court Confirms Reorganization Plan
FIVE STAR: Organizational Meeting to Form Panel on April 6
FOUR LEAF: Case Summary & 5 Largest Unsecured Creditors
FUQI INTERNATIONAL: NASDAQ Delists Securities
GAMETECH INTERNATIONAL: Receives NASDAQ Noncompliance Notice
GAS CITY: Court OKs Bid Protections for Stalking Horse Bidders
GAS CITY: Court Approves Bid Protocol for Sale of Creamery Assets
GLC LIMITED: Sec. 341 Meeting of Creditors Set for May 5
GLC LIMITED: Has Access to Cash Collateral Until July 23
GMX RESOURCES: Files Form S-3; Retamco to Resell 2.3MM Shares
GOODYEAR TIRE: Moody's 'Ba3' Rating Unchanged by $435MM Offering
GRAND PARKWAY: Court Dismisses Chapter 11 Case
GREENWICH SENTRY: Needs More Time to File Bankruptcy Plan
GSC GROUP: Trustee Wins Approval for Retention Bonuses
GULFSTREAM INT'L: Wants Exclusivity Extended Pending Sale Closing
GULFSTREAM INT'L: Lease Decision Deadline Extended Until June 2
HARRINGTON WEST: Files Chapter 11 Plan of Liquidation
HARRY & DAVID: Has Interim OK to Use $30-Mil. of DIP Facility
HARRY & DAVID: Plan Implies 5% Unsecured Recovery
HEALTH ADVENTURE: Case Summary & 18 Largest Unsecured Creditors
HORIZON LINES: Incurs $57.97 Million Net Loss in Fiscal 2010
HUBBARD PROPERTIES: Ordered to File Chapter 11 Plan by April 27
HUBBARD PROPERTIES: Files Schedules of Assets and Liabilities
HUBBARD PROPERTIES: IWA OK on Deferring "SARE" Issue Until April
HUDSON CITY: Completes Balance Sheet Restructuring
IMPACT CASH: SEC Halts $47 Million Investment Fraud
ISE CORP: SSG Served as Adviser on Bluways Asset Sale
ITRON INC: Moody's Upgrades Corporate Family Rating to 'Ba2'
KENNEDY-WILSON: Moody's Assigns 'B1' Rating to Senior Notes
KENNEDY-WILSON: S&P Puts 'BB-' Counterparty Credit Rating
KEYSTONE AUTOMOTIVE: Closes Out-of-Court Restructuring
LACK'S STORES: Will Auction Victoria Store Property on April 6
LAS VEGAS MONORAIL: District Judge to Decide on Circuit Appeal
LEHMAN BROTHERS: Agrees to Pay $400,000 to Edgewood
LEHMAN BROTHERS: U.S. Trustee Opposes Milbank Employment
LEHMAN BROTHERS: Wins OK for Latham to Pursue Claims vs. Aegis
LEHMAN BROTHERS: Taps Locke Lord for Suit vs. Mortgage Lenders
LEHMAN BROTHERS: LBI Claim Transfers for July to February
LITTLE REST: Petitioning Creditors Want Ch. 11 Interim Trustee
LIZ CLAIBORNE: Moody's Assigns 'B2' Rating to $200 Mil. Notes
LIZ CLAIBORNE: S&P Assigns 'B-' Rating to $200 Mil. Senior Notes
LOCAL INSIGHT: Creditors Withdraw Objection to KEIP
LYONDELL CHEMICAL: UBS Can't Shake Highland Claims Over DIP
MADISON HOTEL: Case Summary & 10 Largest Unsecured Creditors
MERUELO MADDUX: Hearing to Modify Chapter 11 Plan Set for April 8
METRA WESTWOOD: Case Summary & 6 Largest Unsecured Creditors
MICROBILT CORPORATION: Files List of 20 Largest Unsec. Creditors
MICROBILT CORP: Wants 16-Day Extension for Filing of Schedules
MIDSTATE HAYES: Case Summary & 4 Largest Unsecured Creditors
MIKE V REAL ESTATE: Taps Craig Dwyer as Bankruptcy Counsel
MIKE V REAL ESTATE: OneWest Insists on Case Dismissal
MS LODGING: Voluntary Chapter 11 Case Summary
MUTUAL BENEFITS: Petitioning Creditors Want Ch. 11 Interim Trustee
NASON PARTNERS: Kelley Transit Operator Files for Chapter 11
NASON PARTNERS: Case Summary & 20 Largest Unsecured Creditors
NEW STREAM: Organizational Meeting to Form Panel on April 5
NO FEAR: Creditors Panel Objects to $3-Mil. Hilco DIP Loan
OM ENTERPRISES: Ky. App. Ct. Affirms DCR Mortgage Award
OWENS CORNING: Parties Object to Garlock Amended Rule 2019 Request
OWENS CORNING: Parties Object to Garlock's Plea to Reopen Case
OWENS CORNING: Parties Object to Garlock's Plea to Intervene
PALM HARBOR: Seeks Court OK to Sell Real Property to Select Homes
PARK PLAZA: Southern Nevada Development in Chapter 11
PARTSEARCH TECHNOLOGIES: $6.4-Mil. Sale to Best Buy Approved
PATIENT SAFETY: Inks 1st Amendment to Supply Pact With Cardinal
PEPTIMMUNE INC: Files for Chapter 7 Liquidation
PETTERS CO: Acorn Capital Sued for Diverting Funds From Victims
PFG ASPENWALK: Files Reorganization Plan & Disclosure Statement
PFG ASPENWALK: Seeks To Obtain $585,000 Advance From DIP Loan
PHILADELPHIA RITTENHOUSE: Organizational Meeting Moved to April 6
PHILLIPS SERVICES: Ohio App. Ct. Reverses Dismissal of Trill Suit
POINT BLANK: Has OK to Pay $275,000 in Plan Lender Fees
POINT BLANK: US Trustee Again Makes Changes to Creditors Committee
POINT BLANK: Objects to Former CEO's Motion to Stay De-register
POMPANO CREEK: Hearing on Plea to Hire Grant Clowery Set for April
PRA INTERNATIONAL: Moody's Upgrades Corp. Family Rating to 'B2'
PRINGLE DEVELOPMENT: Files for Chapter 7 Bankruptcy Liquidation
PRIUM MEEKER: Hearing on Motion for Final Decree Set Today
PRM DEVELOPMENT: Court Approves Disclosure Statement
PURSELL HOLDINGS: Files Schedules of Assets and Liabilities
REGENCY ENERGY: Moody's Affirms 'Ba3' Corporate Family Rating
REITTER CORP: Plan Outline Hearing Set for April 26
RESTAURANT TIERRA: Case Summary & 16 Largest Unsecured Creditors
RHI ENTERTAINMENT: Gets Court OK to Emerge from Chapter 11
RURAL/METRO CORP: S&P Puts 'B+' Rating on CreditWatch Negative
SAND HILL: To Sell Water Disposal Biz. Assets for $20 Million
SANSWIRE CORP: Unveils New Unmanned Airship "Argus One"
SHAN HOLDING: Case Summary & 9 Largest Unsecured Creditors
SHUBH HOTELS: Kiran Patel Nears Deal With Creditors
SINOBIOMED INC: CEO Yu Has Options to Buy 5 Million Shares
SOURCE PRECISION: 16 Molecular Diagnostic Programs Up for Sale
SUFFOLK REGIONAL: Chapter 9 Case Assigned to Judge Craig
SUFFOLK REGIONAL: Files List of 30 Largest Unsecured Creditors
SUMMIT BUSINESS: Court Approves Disclosure Statement
SUMNER REGIONAL: Files Chapter 11 Plan of Liquidation
SUMNER REGIONAL: Obtains Court Okay to Purchase D&O Policy
SW BOSTON: Has Deal to Sell W Hotel to Pebblebrook for $89.5-Mil.
SWANK & MCPOLAND: Case Summary & 18 Largest Unsecured Creditors
T.H. PROPERTIES: Fights Case Real Estate Adviser's Conversion Plea
THREE LOS AMIGOS: East Windmill Lane Center in Chapter 11
TRANSWEST RESORT: Seeks Emergency Cash Use; Lender Wants Trustee
TRAVELCLICK INC: Moody's Withdraws 'B1' Rating on $50 Mil. Loan
TRIBUNE CO: Barclays $30-Mil. L/C Agreement Extended Until 2012
TRIBUNE CO: Proposes to Lift Stay to Pay D&O Defense Costs
TRIBUNE CO: Time to Remove Actions Extended Until June 30
TRICO MARINE: Unit Extends Solicitation for Exchange, Prepack
TRICO MARINE: Accepts Offer for Suwanee River Assets
TRIPLE POINT: Moody's Assigns 'B2' Corporate Family Rating
TUPPERWARE BRANDS: Moody's Withdraws 'Ba1' Corporate Family Rating
UNIFI INC: Drops Ernst & Young, Taps KPMG as Auditor
USEC INC: Robert Namen Disposes of 28,855 Shares of Common Stock
USI HOLDINGS: S&P Withdraws 'B-' Rating on $98.8 Mil. Senior Loan
UTECH PROPERTIES: Case Summary & 3 Largest Unsecured Creditors
WALLACE THEATER: S&P Downgrades Corporate Credit Rating to 'CCC'
WASHINGTON MUTUAL: Files Second Chapter 11 Plan Modifications
WILLIAM HAWKINS: Bankruptcy Filing to Erase $20MM Tax Bill Denied
WJO INC: Expedited Motion to Use Additional Cash Collateral Denied
WOLVERINE TUBE: Seeks to Hire SSG Capital as Investment Banker
W.R. GRACE: Proposes 2011 Long-Term Incentive Plan
W.R. GRACE: Various Parties Appeal Plan Confirmation Order
W.R. GRACE: To Sell Equity Stake in Ceratech for $4.5-Mil.
XR-5 LP: Texas Appellate Court Rules on Receivership
YOUNG BROADCASTING: Vince Young on Wrong Side, Pushed Out
* Ex-Haynes Client Suffers Setback in Malpractice Suit
* Upcoming Meetings, Conferences and Seminars
*********
ACCREDITED HOME: Hearing on Plan Outline Moved to March 30
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has reset
to March 30, 2011, at 2:00 p.m., the hearing to consider approval
of the disclosure statement explaining Accredited Home Lenders
Holding Co. and its affiliated debtors' Third Amended Chapter 11
Plan of Liquidation. The hearing was originally scheduled for
March 24, 2011.
As reported in the TCR on March 4, 2011, under the latest
iteration of the Plan, the Debtors and their advisors expect
unsecured creditors of the operating companies to receive
significant recoveries that very well may reach 100%, and expect
unsecured creditors at the holding company level to receive
recoveries of approximately 65%. At the start of the case, the
Debtors expected returns of 5% to 10% to unsecured creditors. The
improvements in estimated unsecured creditor recoveries is
attributed to the global settlement reached between the Debtors,
their major creditor constituencies, and their potential
litigation targets.
About Accredited Home
San Diego, California-based Accredited Home Lenders Holding Co. --
http://www.accredhome.com/-- was a mortgage banker servicing U.S.
markets for conforming and non-prime residential mortgage loans
operating throughout the U.S. and in Canada. Accredited sold its
mortgage-servicing business in July 2009 as part of its
bankruptcy.
Accredited Home Lenders and its affiliates sought Chapter 11
protection (Bankr. D. Del. Case No. 09-11516) on May 1, 2009.
Gregory G. Hesse, Esq., Lynnette R. Warman, Esq., and Jesse T.
Moore, Esq., at Hunton & William LLP, serve as the Debtors'
bankruptcy counsel. Laura Davis Jones, Esq., James E. O'Neill,
Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl &
Jones LLP, serve as Delaware counsel. Kurtzman Carson Consultants
is the Debtors' claims agent. Andrew I Silfen, Esq., Schuyler G.
Carroll, Esq., Robert M. Hirsch, Esq., at Arent Fox LLP in New
York, and Jeffrey N. Rothleder, Esq., at Arent Fox LLP in
Washington, DC, represent the official committee of unsecured
creditors as co-counsel. Neil R. Lapinski, Esq., and Shelley A.
Kinsella, Esq., at Elliott Greenleaf, represent the Committee as
Delaware and conflicts counsel.
Accredited Home Lenders estimated its assets at $10 million to
$50 million and its debts at $100 million to $500 million in
its Chapter 11 petition.
ACORN CAPITAL: Sued Over Plan to Divert Funds From Petters Victims
------------------------------------------------------------------
The U.S. Securities and Exchange Commission obtained an emergency
court order to halt an attempt by a Connecticut-based fund manager
to divert to himself and others settlement funds intended for U.S.
victims of a Ponzi scheme operated by Minnesota businessman Thomas
Petters.
The SEC has charged Marlon M. Quan with facilitating the Petters
fraud and funneling several hundred million dollars of investor
money into the scheme. The SEC alleges that Quan and his firms
(Stewardship Investment Advisors LLC and Acorn Capital Group LLC)
invested hedge fund assets with Petters while pocketing more than
$90 million in fees. They falsely assured investors that their
money would be safeguarded by "lock box accounts" to protect them
against defaults. When Petters was unable to make payments on
investments held by the funds that Quan managed, Quan and his
firms concealed Petters's defaults from investors by concocting
sham round trip transactions with Petters.
In its emergency court action, the SEC alleges that Quan, despite
a glaring conflict of interest, more recently negotiated an
agreement to divert a settlement payment of approximately $14
million relating to a receivership and a bankruptcy of Petters's
entities. Although he purportedly negotiated on behalf of his U.S.
fund investors, Quan's U.S. victims would receive no money under
this agreement.
At the SEC's request, the Honorable Ann D. Montgomery of the U.S.
District Court for the District of Minnesota ordered that the
money -- paid into a firm affiliated with Quan's Acorn Capital
Group LLC -- be placed into a segregated account and frozen until
further order of the court. A hearing will be held on April 14 to
determine the SEC's request for additional emergency relief for
investors.
"Quan falsely assured his fund investors about safeguards that did
not exist and made up phony transactions to hide Petters's
defaults, all while he pocketed millions of dollars in fees," said
Robert Khuzami, Director of the SEC's Division of Enforcement.
"Our action shows that we will relentlessly pursue illegal profits
stolen from innocent investors through Ponzi schemes."
In the attempt blocked by the SEC, Quan had arranged for nearly $6
million of the settlement amount to be paid to a German bank, more
than $7 million to be paid to a liquidator appointed by a Bermuda
court for certain overseas fund investors, and approximately
$862,500 to be directed to pay Quan's lawyers and other expenses.
The SEC previously charged Petters and Illinois-based fund manager
Gregory M. Bell with fraud, and filed additional charges against
Florida-based hedge fund managers Bruce F. Pr‚vost and David W.
Harrold for facilitating the Petters Ponzi scheme.
According to the SEC's complaint, Petters sold promissory notes to
feeder funds like those controlled by Quan and his firms. Petters
used some of the note proceeds to pay returns to earlier
investors, diverting the rest of the cash to his own purposes.
Petters had promised investors that their money would be used to
finance the purchase of vast amounts of consumer electronics by
vendors who then re-sold the merchandise to such retailers as Wal-
Mart and Costco. In reality, this "purchase order inventory
financing" business was merely a Ponzi scheme. There were no
inventory transactions.
The SEC alleges that Quan and his firms funneled money into the
Petters Ponzi scheme beginning as early as 2001 and continuing
through 2008. Quan, who lives in Greenwich, Conn., sold interests
in his Stewardship Funds to individuals, charities, companies and
other hedge funds. He falsely assured investors of several
procedures that Acorn Capital Group purportedly undertook to
protect the investors in his hedge funds. However, Quan and his
firms implemented none of these safeguards.
The SEC further alleges that Quan falsely assured existing and new
investors that the Quan Hedge Funds were doing well when in
reality Petters began defaulting on the investments they held.
Instead of disclosing these defaults to his fund's investors, Quan
embarked on a series of convoluted transactions in which he
exchanged $187 million with Petters Co. in "round trips" that
created the false appearance that Petters was making his payments.
The SEC's complaint charges Quan and his firms with violations of
Section 17(a) of the Securities Act of 1933, Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and
Section 206(4) of the Investment Advisers Act of 1940 and Rule
206-4(8) thereunder. The SEC seeks entry of a court order of
permanent injunction against Quan and his firms as well as an
order of disgorgement, prejudgment interest and financial
penalties. The SEC also seeks equitable relief against relief
defendants Florene Quan, wife of Defendant Quan, and Asset Based
Resource Group LLC, an affiliate of Acorn Capital Group LLC.
Sally J. Hewitt, Donald A. Ryba, Charles J. Kerstetter and Peter
K.M. Chan of the SEC's Chicago Regional Office conducted the SEC's
investigation. Frank Hooper and Marie Hagelstein of the SEC's
Boston Regional Office's examination staff also assisted in the
SEC's investigation. The SEC's litigation is led by John E.
Birkenheier of the SEC's Chicago Regional Office. The SEC
acknowledges the assistance of the Bermuda Monetary Authority.
The SEC's investigation is continuing.
About Petters Group
Based in Minnetonka, Minn., Petters Group Worldwide LLC is a
collection of some 20 companies, most of which make and market
consumer products. It also works with existing brands through
licensing agreements to further extend those brands into new
product lines and markets. Holdings include Fingerhut (consumer
products via its catalog and Web site), SoniqCast (maker of
portable, WiFi MP3 devices), leading instant film and camera
company Polaroid (purchased for $426 million in 2005), Sun Country
Airlines (acquired in 2006), and Enable Holdings (online
marketplace and auction for consumers and manufacturers' overstock
inventory). Founder and chairman Tom Petters formed the company
in 1988.
Petters Company, Inc., is the financing and capital-raising unit
of Petters Group Worldwide.
Thomas Petters, the founder and former CEO of Petters Group, has
been indicted and a criminal proceeding against him is proceeding
in the U.S. District Court for the District of Minnesota.
Petters Company, Petters Group Worldwide and eight other
affiliates filed separate petitions for Chapter 11 protection
(Bankr. D. Minn. Lead Case No. 08-45257) on Oct. 11, 2008. James
A. Lodoen, Esq., at Lindquist & Vennum P.L.L.P., represents the
Debtors as counsel. In its petition, Petters Company estimated
its debts at $500 million and $1 billion. Parent Petters Group
Worldwide estimated its debts at not more than $50,000.
Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing
business as Sun Country Airlines, Inc., and MN Airline Holdings,
Inc., filed separate petitions for Chapter 11 bankruptcy
protection (Bankr. D. Minn. Case Nos. 08-45136, 08-35197 and
08-35198) on Oct. 6, 2008. Petters Aviation is a wholly owned
unit of Thomas Petters Inc. and owner of MN Airline Holdings, Sun
Country's parent company.
ADVANCE TECH: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Advance Tech Collision, Inc.
966 Piner Road
Santa Rosa, CA 95403
Bankruptcy Case No.: 11-11032
Chapter 11 Petition Date: March 23, 2011
Court: United States Bankruptcy Court
Northern District of California (Santa Rosa)
Judge: Alan Jaroslovsky
Debtor's Counsel: Michael C. Fallon, Esq.
LAW OFFICES OF MICHAEL C. FALLON
100 E St. #219
Santa Rosa, CA 95404
Tel: (707) 546-6770
E-mail: mcfallon@fallonlaw.net
Scheduled Assets: $277,917
Scheduled Debts: $1,539,961
A list of the Company's 20 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/canb11-11032.pdf
The petition was signed by Kari Solem, president.
Affiliate that previously sought Chapter 11 protection:
Petition
Debtor Case No. Date
------ -------- ----
Kari Solem 11-10942 03/16/11
AES THAMES: Files Schedules of Assets and Liabilities
-----------------------------------------------------
AES Thames, L.L.C., filed with the U.S. Bankruptcy Court for the
District of Delaware its schedules of assets and liabilities,
disclosing:
Name of Schedule Assets Liabilities
---------------- ------ -----------
A. Real Property $11,450,000
B. Personal Property $145,297,507
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $365,976
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $5,563,799
------------ ----------
TOTAL $156,747,507 $5,929,775
A copy of the Schedules of Assets and Liabilities is available for
free at http://bankrupt.com/misc/AESThames.SAL.pdf
About AES Thames
Uncasville, Connecticut-based AES Thames, L.L.C., owns and
operates a coal-fired power plant located in Montville,
Connecticut. The facility generates and sells electricity to
Connecticut Light and Power Company. It also supplies processed
steam to a recycled paperboard mill owned by Smurfit-Stone
Container Corp. AES Thames is a unit of AES Corp., the Arlington,
Virginia-based power producer with operations in 29 countries.
AES Thames filed for Chapter 11 bankruptcy protection (Bankr. D.
Del. Case No. 11-10334) on Feb. 1, 2011. The increased cost of
energy production and the "uneconomic and onerous provisions" of a
steam sale agreement with Smurfit-Stone's predecessor led AES
Thames to seek bankruptcy protection.
The Debtor is represented by Adam G. Landis, Esq., at Landis Rath
& Cobb LLP. Murtha Cullina LLP is the Debtor's special counsel.
The Debtor has selected Houlihan Lockey Capital, Inc., as its
financial advisor and investment banker.
A.G. FERRARI: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: A.G. Ferrari Foods
14234 Catalina Street
San Leandro, CA 94577
Bankruptcy Case No.: 11-43327
Chapter 11 Petition Date: March 28, 2011
Court: U.S. Bankruptcy Court
Northern District of California (Oakland)
Judge: Edward D. Jellen
Debtor's Counsel: Eric A. Nyberg, Esq.
KORNFIELD, NYBERG, BENDES AND KUHNER
1999 Harrison Street, #2675
Oakland, CA 94612
Tel: (510) 763-1000
E-mail: e.nyberg@kornfieldlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 20 largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/canb11-43327.pdf
The petition was signed by Patricia T. Saucy, CFO.
ALLEN CAPITAL: DLH Seeks Expedited Sale of Langdon Road Property
----------------------------------------------------------------
DLH Master Land Holding, LLC, asks the U.S. Bankruptcy Court for
the Northern District of Texas to approve on an expedited basis
the sale of the Langdon Road Property to Weeks Robinson
Acquisition, LLC, free and clear of all liens and encumbrances,
for a contemplated purchase price of $23,537,000. DLH will
receive no cash from the sale of the Langdon Road Property.
BBVA Compass Bank, as a successor in interest to Guaranty Bank,
has a first lien on the Langdon Road Property. The outstanding
claim as of filing was $26,413,506.
DLH says it, Debtor Allen Capital Partners, LLC, the Creditors
Committee and BBVA Compass Bank currently are negotiating a
settlement concerning Compass's unsecured deficiency claims
against the jointly administered Debtors in these bankruptcy
proceedings, resolution of which relies upon the sale of the
Langdon Road Property.
The Langdon Road Property refer to two tracts of land located at
4800 and 4900 Langdon Road, City of Dallas, Dallas County, Texas
known as DLH-Dallas Industrial No. 1, Lot 2 and Lot 3. 4800
Langdon consists primarily of a 635,000 square foot multi-tenant
industrial building located on 37.79 acres of land. 4900 Langdon
consists primarily of a 192,850 square foot multi-tenant
industrial building located on 13.92 acres of land.
In a separate motion filed concurrently, DLH also requests the
Court's approval to assume and assign the leases related to the
Langdon Road Property to Weeks Robinson.
About Allen Capital
Allen Capital Partners LLC and subsidiary DLH Master Land Holding
LLC, are the developers of Dallas Logistics Hub, a 6,000-acre
multimodal logistics park 12 miles (19 kilometers) from downtown
Dallas.
Allen Capital Partners, LLC, dba The Allen Group, filed for
Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 10-
30562) on Jan. 25, 2010. Mark MacDonald, Esq., at MacDonald +
MacDonald, P.C., represents the Debtor. Lain, Faulkner & Co. is
the Debtor's financial advisor. The Company disclosed
$220,325,201 in assets and $160,622,236 in liabilities as of the
Chapter 11 filing.
The Debtor's affiliate -- DLH Master Land Holding, LLC, dba The
Allen Group -- filed a separate Chapter 11 bankruptcy petition.
Another affiliate, Visalia, California-based Richard S. Allen,
Inc., filed for Chapter 11 bankruptcy protection (Bankr. N.D.
Texas Case No. 10-33211) on May 3, 2010. Patrick J. Neligan, Jr.,
Esq., at Neligan Foley LLP, represents the Debtor. The Company
disclosed $76,158,469 in assets and $53,728,982 in liabilities as
of the petition date.
ALLEN CAPITAL: DLH Seeks Expedited Sale of ADESA Property
---------------------------------------------------------
DLH Master Land Holding, LLC, asks the U.S. Bankruptcy Court for
the Northern District of Texas to approve on an expedited basis
the sale of the ADESA Project and a related lease to a limited
liability company designated by Cardinal Industrial Real Estate
and Fortress Credit Corp. for $50,750,000, free and clear of all
liens and encumbrances.
The ADESA Project refers to the approximately 174 acres of land
located at the northwest corner of Wintergreen Road and Lancaster-
Hutchins Road in City of Hutchins, Texas, while the ADESA lease
refers to that certain Reverse Build-to-Suit Single-Tenant Lease,
dated March 31, 2008, between DLH Hutchins and ADESA Texas, Inc.
Should the sale of the ADESA Property to Cardinal-Fortress fail to
close for any reason, DLH seeks approval to sell the property to
Greenfield Companies, who had earlier offered to purchase the
property for $49,500,000.
By separate motion filed concurrently herewith, DLH also seeks
approval effective at the closing to assume and assign the ADESA
Lease to a limited liability company designated by Cardinal-
Fortress.
The sale of the ADESA Property will satisfy in their entirety the
secured claims of Branch Banking & Trust Company and Great Western
Bankthe Banks, which are approximately $48,000,000.00, and
additionally will result in cash to the Debtors' estates in excess
of $1.5 million.
About Allen Capital
Allen Capital Partners LLC and subsidiary DLH Master Land Holding
LLC, are the developers of Dallas Logistics Hub, a 6,000-acre
multimodal logistics park 12 miles (19 kilometers) from downtown
Dallas.
Allen Capital Partners, LLC, dba The Allen Group, filed for
Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 10-
30562) on Jan. 25, 2010. Mark MacDonald, Esq., at MacDonald +
MacDonald, P.C., represents the Debtor. Lain, Faulkner & Co. is
the Debtor's financial advisor. The Company disclosed
$220,325,201 in assets and $160,622,236 in liabilities as of the
Chapter 11 filing.
The Debtor's affiliate -- DLH Master Land Holding, LLC, dba The
Allen Group -- filed a separate Chapter 11 bankruptcy petition.
Another affiliate, Visalia, California-based Richard S. Allen,
Inc., filed for Chapter 11 bankruptcy protection (Bankr. N.D.
Texas Case No. 10-33211) on May 3, 2010. Patrick J. Neligan, Jr.,
Esq., at Neligan Foley LLP, represents the Debtor. The Company
disclosed $76,158,469 in assets and $53,728,982 in liabilities as
of the petition date.
ALLEN CAPITAL: Hearing on ACP & DLH Plan Outline Reset to Apr. 18
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas has
reset to April 18, 2011, at 11:00 a.m., the hearing on the
disclosure statement explaining Allen Capital Partners, LLC, and
DLH Master Land Holding, LLC's proposed Chapter 11 plan.
As reported in the Troubled Company Reporter on Dec. 22, 2010,
according to the Disclosure Statement, the Plan contemplates the
Debtors obtaining a combination of one or more term loans or
equity contributions totaling $30 million to $50 million as exit
financing, using some of those monies to obtain releases of
collateral which would then be pledged as security to support the
exit financing facility.
The remaining exit financing proceeds will be used to pay the DIP
loan, fund post-Effective Date operations, pay Chapter 11 expenses
and provide certain cash outs to certain small unsecured creditors
willing to deeply discount their claims for cash, provide an
interest reserve and finance the construction of certain
improvements. The Debtors are discussing the financing with a
number of potential sources, but do not currently have a
commitment.
Under the Plan, Unsecured Allowed Claims against DLH total
approximately $11.6 million, including approximately $637,000 in
smaller claims (less than $ 125,000 each).
DLH proposes a cafeteria plan with options for Allowed Unsecured
Claims:
A) 20 % in cash paid to each electing holder of an Allowed
Claim of $125,000 or less or, the holder of any Allowed
Claim that is willing to reduce its claim to $125,000.
These claims are payable within 90 days after the Effective
Date and will be funded from proceeds of the Exit Financing.
B) Receive a Variable Pay Note in the principal amount of 50%
of the electing holder's Allowed Claim, payable without
interest from 75% of DLH Unsecured Net Proceeds. If not
previously paid, these notes will mature and be fully
payable seven years from the Effective Date.
C) Receive a Variable Pay Note in the principal amount of 100%
of the electing holder's Allowed Claim payable from 25% of
DLH Unsecured Net Proceeds, but only until the Option B
notes are paid in full, and thereafter receiving all of the
DLH Unsecured Net Proceeds. If not previously paid, these
notes will mature and be fully payable ten years from the
Effective Date, with interest accruing at the federal
judgment rate in effect on the Effective Date. From
September 27, 2010, to October 3, the federal judgment rate
was 0.25%.
D) An electing holder of an Allowed Unsecured Claim may convert
its Allowed Claim to a Class B Preferred Callable Membership
Interest with par value equal to the amount of the Allowed
Claim.
For all remaining unsecured ACP creditors, ACP proposes a
cafeteria plan whose options will be:
A) 20 % in cash paid to each holder of an Allowed Claim of
$60,000 or less or which the holder is willing to reduce its
claim to $60,000. These claims will be payable within 90
days after the Effective Date and will be funded from
proceeds of the Exit Financing.
B) Receive a Variable Pay Note in the principal amount of 50%
of the electing holder's Allowed Claim, payable without
interest from their pro rata share of 75% of ACP Unsecured
Creditor Net Proceeds. Unless previously paid, these notes
mature seven years from the Effective Date.
C) Receive a Variable Pay Note in the principal amount of 100%
of the electing holder's Allowed Claim payable from 25% of
ACP Unsecured Creditor Net Proceeds, but only until the
Option B notes are paid in full, and thereafter receiving
all of the ACP Unsecured Creditor Net Proceeds. If not
previously paid, these notes will mature and be fully
payable ten years from the Effective Date, with interest
accruing at the federal judgment rate on the Effective Date
of the Plan.
D) Class C Preferred Callable Preferred Membership Interests in
DLH.
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/AllenCapital_DS.pdf
About Allen Capital
Allen Capital Partners LLC and subsidiary DLH Master Land Holding
LLC, are the developers of Dallas Logistics Hub, a 6,000-acre
multimodal logistics park 12 miles (19 kilometers) from downtown
Dallas.
Allen Capital Partners, LLC, dba The Allen Group, filed for
Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 10-
30562) on Jan. 25, 2010. Mark MacDonald, Esq., at MacDonald +
MacDonald, P.C., represents the Debtor. Lain, Faulkner & Co. is
the Debtor's financial advisor. The Company disclosed
$220,325,201 in assets and $160,622,236 in liabilities as of the
Chapter 11 filing.
The Debtor's affiliate -- DLH Master Land Holding, LLC, dba The
Allen Group -- filed a separate Chapter 11 bankruptcy petition.
Another affiliate, Visalia, California-based Richard S. Allen,
Inc., filed for Chapter 11 bankruptcy protection (Bankr. N.D.
Texas Case No. 10-33211) on May 3, 2010. Patrick J. Neligan, Jr.,
Esq., at Neligan Foley LLP, represents the Debtor. The Company
disclosed $76,158,469 in assets and $53,728,982 in liabilities as
of the petition date.
ALLIED SPECIALTY: S&P Assigns 'B+' Corporate Credit Rating
----------------------------------------------------------
Standard & Poor's Ratings Services said that it has assigned its
'B+' corporate credit rating to Orlando, Fla.-based specialty
vehicle manufacturer Allied Specialty Vehicles Inc. The outlook
is stable.
"The ratings on ASV reflect S&P's view of the company's business
risk profile as weak and financial risk profile as aggressive,"
said Standard & Poor's credit analyst. "The rating considers the
risk inherent in the rollup of the several individual companies
that form ASV, as well as its limited, but demonstrated, history
of operating as an integrated company. Some of the company's
economies of scale and cost savings appear reasonable to us, even
though ASV has yet to fully achieve these measures."
ASV encompasses a number of manufacturers who make various types
of vehicles, including emergency vehicles (such as ambulances and
fire trucks), school buses, and motorized recreational vehicles.
Each of these manufacturers has a well-known industrial brand name
and operates in various end markets. ASV operates in highly
competitive and somewhat cyclical end markets, primarily in the
specialty-vehicle industry. The company lacks geographic
diversity -- all of its manufacturing capacity is in North
America. Demand in its motorized RV business depends highly upon
consumers' discretionary income, volatile gasoline prices, and the
availability of consumer credit. Municipal end markets provide a
bit more stability -- while these markets may face challenging
fiscal conditions, they still need to replace essential equipment
as it ages.
"S&P expects the ratings to remain stable over the next 12 to 18
months," Mr. Sico continued. "S&P could raise the ratings if the
company achieves, and even exceeds, its operational targets, for
example, if debt to EBITDA stays at or below 4x leverage. On the
other hand, S&P could lower the ratings if market demand for ASV's
vehicles declines due to economic conditions, a lack of credit
availability for big-ticket equipment purchases persists, or
continuing challenges in municipal markets result in leverage
greater than 5x."
ALLY FINANCIAL: Issuing 2.12% Demand Notes From March 28-April 3
----------------------------------------------------------------
In a Form 424B3 filing with the U.S. Securities and Exchange
Commission, Ally Financial Inc. filed a pricing supplement dated
March 28, 2011, to the demand notes - floating rate notes to be
issued by Ally Financial amounting to $12.50 billion. The Demand
Notes have annual yield of 2.12% with effective dates of March 28,
2011 through April 3, 2011.
About Ally Financial
Ally Financial Inc., formerly GMAC Inc., -- http://www.ally.com/
-- is one of the world's largest automotive financial services
companies. The Company offers a full suite of automotive
financing products and services in key markets around the world.
Ally's other business units include mortgage operations and
commercial finance, and the company's subsidiary, Ally Bank,
offers online retail banking products. Ally operates as a bank
holding company.
The Company's balance sheet at Dec. 31, 2010, showed
$172.008 billion in total assets, $151.519 billion in total
liabilities, and total equity of $20.489 billion.
GMAC obtained a $17 billion bailout from the U.S. government in
exchange for a 56.3% stake. Private equity firm Cerberus Capital
Management LP keeps 14.9%, while General Motors Co. owns 6.7%.
The Company has tapped Goldman Sachs Group Inc. and Citigroup Inc.
to advise on a range of issues, including strategic alternatives
for the mortgage business and repayment of taxpayer funds.
* * *
In January 2011, Standard & Poor's Ratings Services raised its
rating on the preferred stock of Ally Financial Inc. (Ally;
B/Stable/C) to 'CC' from 'C'. The ratings firm noted that Ally
improved its liquidity position and alleviated some funding
pressure at its holding Company in recent months, making it easier
to meet obligations on its preferred stock. Nevertheless, the
Company faces significant debt maturities at its holding Company
in 2011 and 2012, which is reflected in the 'CC' rating.
In February 2011, Moody's Investors Service upgraded the issuer
and senior unsecured ratings of Ally Financial Inc. and its
supported subsidiaries to B1 from B3. Concurrently, Moody's
upgraded the senior secured (second lien) and senior unsecured
ratings of mortgage finance subsidiary Residential Capital LLC to
Caa3 and Ca, respectively, from C. The rating outlook for both
Ally and ResCap is stable.
Moody's said the Ally and ResCap upgrades reflect a decline in
ResCap's exposure to portfolio under-performance and mortgage
repurchase risks and an associated decrease in contingent risks to
Ally relating to its support of ResCap. Additional factors
supporting Ally's upgrade include its strengthened liquidity and
capital positions and prospects for continued profitability in its
core auto finance and mortgage businesses based upon positive
asset quality performance trends.
ALPHATRADE.COM: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Alphatrade.com
3753 Howard Hughes Parkway, #200
Las Vegas, NV 89169
Bankruptcy Case No.:
Chapter 11 Petition Date: March 28, 2011
Court: U.S. Bankruptcy Court
District of Nevada (Las Vegas)
Judge: Linda B. Riegle
Debtor's Counsel: John J. Laxague, Esq.
CANE CLARK LLP
3273 E. Warm Springs Road
Las Vegas, NV 89120
Tel: (702) 312-6255
Fax: (702) 944-7100
E-mail: jlaxague@caneclark.com
Estimated Assets: $0 to $50,000
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/nvb11-14353.pdf
The petition was signed by Anthony K. Miller, president.
AMERICAN APPAREL: Gets NYSE Notice for Incomplete 2009 Report
-------------------------------------------------------------
American Apparel, Inc., received a letter from NYSE Amex LLC
relating to the Company's filing on Feb. 7, 2011, of an amendment
to its Form 10-K for the year ended Dec. 31, 2009, to remove from
the 2009 10-K the report by its former auditors, Deloitte & Touche
LLP, on the Company's previously issued consolidated financial
statements as of and for the year ended Dec. 31, 2009, including
Deloitte's report on internal control over financial reporting at
Dec. 31, 2009, as a result of the events previously disclosed in
the Company's Current Report on Form 8-K filed on Dec. 21, 2010.
The letter from the Exchange states that the filing of a complete
2009 10-K, which includes audited financials, is a condition for
the Company's continued listing on the Exchange, as required by
Sections 134 and 1101 of the Exchange's Company Guide, and the
Company's failure to have on file a complete 2009 10-K, which
includes audited financials, is a material violation of the
Company's listing agreement with the Exchange.
The letter from the Exchange provides that the Company must submit
to the Exchange by April 5, 2011 a plan to bring the Company in
compliance with Sections 134 and 1101 of the Exchange's Company
Guide by no later than June 20, 2011.
The Company intends to file as soon as practicable, currently
expected to be no later than April 15, 2011, an amendment to the
2009 10-K for the purpose of filing a new audit report on the 2009
financials and a new report on internal control over financial
reporting at Dec. 31, 2009, from its current auditors, Marcum LLP,
and, at such time, the notation in the 2009 10-K that the 2009
financials are "unaudited" would be removed.
About American Apparel
Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP)
-- http://www.americanapparel.com/-- is a vertically integrated
manufacturer, distributor, and retailer of branded fashion basic
apparel. As of Sept. 30, 2010, American Apparel employed over
10,000 people and operated 278 retail stores in 20 countries,
including the United States, Canada, Mexico, Brazil, United
Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the
Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan,
South Korea and China.
The Company's balance sheet at Sept. 30, 2010, showed
$322.7 million in total assets, $231.3 million in total
liabilities, and stockholders' equity of $91.4 million.
American Apparel disclosed in its quarterly report on Form 10-Q
for the third quarter of 2010 that based upon results of
operations for the nine months ended Sept. 30, 2010, and through
the issuance of the financial statements and projected for the
remainder of 2010, the Company may not have sufficient liquidity
necessary to sustain operations for the next twelve months, and
that it is probable that beginning Jan. 31, 2011, the Company will
not be in compliance with the minimum Consolidated EBITDA covenant
under the $80,000,000 term loan with Lion Capital LLP.
"Noncompliance with covenants under the Lion Credit Agreement
would constitute an event of default under the BofA Credit
Agreement, which, if not waived, could block the Company from
making borrowings under the BofA Credit Agreement," the Company
said in the filing. "These factors, among others, raise
substantial doubt that the Company will be able to continue as a
going concern."
AMERICAN APPAREL: Lion/Hollywood Discloses 16.8% Equity Stake
-------------------------------------------------------------
In an amended Schedule 13D with the U.S. Securities and Exchange
Commission, Lion/Hollywood LLC and its affiliates that they
beneficially own 16,759,809 shares of common stock of American
Apparel, Inc., representing 16.8% of the shares outstanding. The
percentage of the class of Common Stock represented by the shares
that are subject to the Schedule 13D is based on an aggregate of
82,771,426 shares of Common Stock outstanding, which is equal to:
(i) 71,447,445 shares of Common Stock outstanding as of
Nov. 9, 2010, as reported by the Company in its Quarterly
Report on Form 10-Q for the quarterly period ended
Sept. 30, 2010 (less 251,667 shares the Company has advised
have been returned to treasury); plus
(ii) 1,129,576 shares of Common Stock sold by the Company on
Dec. 1, 2010, as reported by the Company in its Current
Report on Form 8-K filed with the SEC on Dec. 2, 2010; plus
(iii) 6,532,673 shares of Common Stock granted to executive and
non-executive management employees and certain consultants
to the Company on Nov. 26, 2010, as reported by the Company
in its Current Report on Form 8-K filed with the SEC on
Dec. 2, 2010; plus
(iv) 3,913,399 shares of Common Stock issued to Mr. Charney on
March 24, 2011, as reported by the Company on its Current
Report on Form 8-K filed on March 28, 2011.
About American Apparel
Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP)
-- http://www.americanapparel.com/-- is a vertically integrated
manufacturer, distributor, and retailer of branded fashion basic
apparel. As of Sept. 30, 2010, American Apparel employed over
10,000 people and operated 278 retail stores in 20 countries,
including the United States, Canada, Mexico, Brazil, United
Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the
Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan,
South Korea and China.
The Company's balance sheet at Sept. 30, 2010, showed
$322.7 million in total assets, $231.3 million in total
liabilities, and stockholders' equity of $91.4 million.
American Apparel disclosed in its quarterly report on Form 10-Q
for the third quarter of 2010 that based upon results of
operations for the nine months ended Sept. 30, 2010, and through
the issuance of the financial statements and projected for the
remainder of 2010, the Company may not have sufficient liquidity
necessary to sustain operations for the next twelve months, and
that it is probable that beginning Jan. 31, 2011, the Company will
not be in compliance with the minimum Consolidated EBITDA covenant
under the $80,000,000 term loan with Lion Capital LLP.
"Noncompliance with covenants under the Lion Credit Agreement
would constitute an event of default under the BofA Credit
Agreement, which, if not waived, could block the Company from
making borrowings under the BofA Credit Agreement," the Company
said in the filing. "These factors, among others, raise
substantial doubt that the Company will be able to continue as a
going concern."
AMERICAN APPAREL: CEO Charney Acquires 3.9-Mil. Add'l Shares
------------------------------------------------------------
In a Form 4 filing with the U.S. Securities and Exchange
Commission, Dov Charney, director, chairman and CEO at American
Apparel, Inc., disclosed that he acquired 3,913,399 shares of
common stock of the Company on March 24, 2011. At the end of the
transaction, Mr. Charney beneficially owned 44,923,088 shares.
About American Apparel
Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP)
-- http://www.americanapparel.com/-- is a vertically integrated
manufacturer, distributor, and retailer of branded fashion basic
apparel. As of Sept. 30, 2010, American Apparel employed over
10,000 people and operated 278 retail stores in 20 countries,
including the United States, Canada, Mexico, Brazil, United
Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the
Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan,
South Korea and China.
The Company's balance sheet at Sept. 30, 2010, showed
$322.7 million in total assets, $231.3 million in total
liabilities, and stockholders' equity of $91.4 million.
American Apparel disclosed in its quarterly report on Form 10-Q
for the third quarter of 2010 that based upon results of
operations for the nine months ended Sept. 30, 2010, and through
the issuance of the financial statements and projected for the
remainder of 2010, the Company may not have sufficient liquidity
necessary to sustain operations for the next twelve months, and
that it is probable that beginning Jan. 31, 2011, the Company will
not be in compliance with the minimum Consolidated EBITDA covenant
under the $80,000,000 term loan with Lion Capital LLP.
"Noncompliance with covenants under the Lion Credit Agreement
would constitute an event of default under the BofA Credit
Agreement, which, if not waived, could block the Company from
making borrowings under the BofA Credit Agreement," the Company
said in the filing. "These factors, among others, raise
substantial doubt that the Company will be able to continue as a
going concern."
AMTRUST FINANCIAL: Plan Outline Hearing Reset to June 10
--------------------------------------------------------
The Hon. Pat E. Morgenstern-Clarren of the U.S. Bankruptcy Court
for the Northern District of Ohio will convene a hearing on
June 10, 2011, at 8:30 a.m., Eastern Time, to consider adequacy of
the disclosure statement explaining AmTrust Financial Corporation
nka AmFin Financial Corporation and its affiliated debtors' Joint
Plan of Reorganization, dated Jan. 5. Objections, if any, are due
4:00 p.m., on May 31.
The hearing was originally set for March 31, at 10:30 a.m. But
the Debtor on March 23 requested that the Court reschedule the
disclosure statement hearing.
As reported in the Troubled Company Reporter on Jan. 10, under the
Plan, the assets of each of the Debtors' bankruptcy estates will
revest in the Reorganized Debtors free and clear of all liens and
other encumbrances. Thereafter, the Reorganized Debtors will
operate their businesses free of the restrictions contained in the
Bankruptcy Code and will implement the terms of the AmFin Plan.
Following the effective date of the Plan, the business of the
Reorganized Debtors will be managed by a Chief Restructuring
Officer designated in the AmFin Plan. The Chief Restructuring
Officer will have responsibility to implement the AmFin Plan,
including
(a) converting the assets of the Reorganized Debtors into cash
and distributing the cash pursuant to the AmFin Plan;
(b) objecting to Claims against the Debtors and resolving such
objections;
(c) pursuing any retained causes of action of the Debtors;
(d) employing attorneys, accountants, and other professionals
in his or her discretion; and
(e) in general, taking all steps necessary to implement the
AmFin Plan.
The Debtors' attorneys can be reached at:
G. Christopher Meyer, Esq.
Sherri L. Dahl, Esq.
Peter R. Morrison, Esq.
SQUIRE SANDERS & DEMPSEY (US) LLP
127 Public Square, Suite 4900
Cleveland, OH 44114-1304
Tel: (216) 479-8500
Fax: (216) 479-8780
E-mail: christopher.meyer@ssd.com
sherri.dahl@ssd.com
peter.morrison@ssd.com
- and -
Stephen D. Lerner, Esq.
SQUIRE SANDERS & DEMPSEY (US) LLP
221 E. Fourth Street, Suite 2900
Cincinnati, OH 45202
Tel: (513) 361-1200
Fax: (513) 361-1201
E-mail: stephen.lerner@ssd.com
About AmTrust Financial
AmTrust Financial Corp (PINK: AFNL) was the owner of the AmTrust
Bank. AmTrust was the seventh-largest holder of deposits in South
Florida, with $4.7 billion in deposits and 21 branches.
In November 2008, the Office of Thrift Supervision issued a cease
and desist order requiring AmTrust to improve its capital ratios.
AmTrust Financial, together with affiliates that include
AmTrust Management Inc., filed for Chapter 11 bankruptcy
protection on November 30, 2009 (Bankr. N.D. Ohio Case No.
09-21323). G. Christopher Meyer, Esq., Christine M. Piepont,
Esq., and Sherri L. Dahl, Esq., at Squire Sanders & Dempsey (US)
LLP, in Cleveland, Ohio; and Stephen D. Lerner, Esq., at Squire
Sanders & Dempsey (US) LLP, in Cincinnati, Ohio, assist the
Debtors in their restructuring effort. Kurtzman Carson
Consultants serves as claims and notice agent. Attorneys at Hahn
Loeser & Parks LLP serve as counsel to the Official Committee of
Unsecured Creditors.
AmTrust Management estimated $100 million to $500 million in
assets and liabilities in its Chapter 11 petition.
AmTrust Bank was not part of the Chapter 11 filings. On Dec. 4,
2009, AmTrust Bank was closed by regulators and the Federal
Deposit Insurance Corporation was named receiver. New York
Community Bank, in Westbury, New York, assumed all of the deposits
of AmTrust Bank pursuant to a deal with the FDIC.
APPLESEED'S INTERMEDIATE: Lands Better Exit Financing Deal
----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that subsidiaries of retailer Orchard Brands Corp., which
are scheduled for confirmation of their prepackaged reorganization
on April 14, landed an offer for a more attractive loan to finance
emergence from Chapter 11. PNC Bank NA is offering a $90 million
credit, $10 million more than the previous offer from UBS Loan
Finance LLC, Wells Fargo Bank NA, and Ally Commercial Finance LLC.
Mr. Rochelle reports that the bankruptcy court was scheduled to
convene a hearing March 29 where the companies seek authority to
sign a commitment agreement. The loan itself would be approved as
part of the process of confirming the Chapter 11 plan.
About Appleseed's Intermediate
Based in Beverly, Massachusetts, Appleseed's Intermediate Holdings
LLC, aka Appleseed's Intermediate Holdings, Inc., aka Orchard
Brands sells clothing to people 55 and older. Orchard Brands has
17 brands including Appleseed's, Draper's & Damon's, Gold Violin,
Haband and Norm Thompson. It publishes catalogs and has stores
under its Appleseed's and Draper's & Damon's brands. It has
annual sales of about $1 billion and earnings before interest,
taxes, depreciation and amortization are about $50 million.
Appleseed's is owned by Golden Gate Capital Corp., which also
holds stakes in retailers Express Inc., Eddie Bauer Holdings Inc.
and Zale Corp.
Appleseed's Intermediate and its affiliates filed for Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 11-10160) on
Jan. 19, 2011. Appleseed's Intermediate estimated assets at
$100 million to $500 million and debts at $500 million to
$1 billion in its Chapter 11 petition.
Richard M. Cieri, Esq., Joshua A. Sussberg, Esq., at Brian E.
Schartz, at Kirkland & Ellis LLP, serve as the Debtors' bankruptcy
counsel. Domenic E. Pacitti, Esq., at Klehr Harrison Harvey
Branzburg LLP, serves as local counsel to the Debtors. Moelis &
Company LLC is the Debtors' investment banker and financial
advisor. Alvarez & Marshal North America, LLC, is the Debtors'
restructuring advisor. Pricewaterhousecoopers LLP is the Debtors'
independent auditor. Kurtzman Carson Consultants LLC is the
notice, claims and balloting agent.
Jay R. Indyke, Esq., Cathy Hershcopf, Esq., Brent Weisenberg,
Esq., and Richelle Kalnit, Esq., at Cooley LLP, in New York, and
Robert K. Malone, Esq., Michael P Pompeo, Esq., and Howard A
Cohen, Esq., at Drinker Biddle & Reath LLP, in Wilmington,
Delaware, represent the Official Committee of Unsecured Creditors.
ARVINMERITOR INC: Lawrence Robbins Discloses 5.72% Equity Stake
---------------------------------------------------------------
In a Schedule 13G filing with the U.S. Securities and Exchange
Commission, Glenview Capital Management, LLC, and Lawrence M.
Robbins disclosed that they beneficially own 5,388,617 shares of
common stock of Arvinmeritor, Inc., representing 5.72% of the
shares outstanding. There were 94,234,334 Shares outstanding as
of Jan. 2, 2011, according to the Company's quarterly report on
Form 10-Q/A, filed March 3, 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.
A.T. REYNOLDS: Refusing to Settle Not Contempt of Mediation Order
-----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that although a bankruptcy court can force someone to
mediate, it can't hold a party in contempt for failing to settle,
U.S. District Judge William Pauley III held on March 18 in
reversing a ruling by U.S. Bankruptcy Judge Cecelia Morris.
Wells Fargo Bank NA was ordered to mediate. There was an
impasse soon after mediation began. Following a report by the
mediator to the court, the bankruptcy judge conducted a hearing
and eventually held the bank and its lawyer in contempt for
failing to mediate in good faith.
Mr. Rochelle explains that in reversing, Judge Pauley began his
analysis by saying that "mediation is typically a voluntary
process." He then said the trial court can neither "force a party
to settle" nor "coerce a party into making an offer to settle."
The bank was "within its rights to enter the mediation with the
position it would not make a settlement offer," Judge Pauley
said. He said the bank also had the right to decide in advance
that it wasn't liable. Practically speaking, Judge Pauley said an
order to mediate "will not change the mind of a party who
believes that settlement is not in their best interest." Although
the trial court can investigate whether a party didn't mediate in
good faith, Judge Pauley ruled that the confidentiality
requirement surrounding mediation precludes the court "from
inquiring into the level of a party's participation."
On March 27, 2009, the Bankruptcy Court held an auction and sale
hearing, and Debtor was sold as a going concern to Boreal Water
Collection, Inc. The sale was made effective by an Order signed
and entered on April 3, 2009. A dispute erupted about who was
going to pay the Debtor's employees from March 30 through April 3,
2009. In a Mediation Order dated Aug. 27, 2009, Judge Morris
ordered the Debtor, CCV Restructuring, Boreal, Wells Fargo Bank,
and counsel to the Committee of Unsecured Creditors to mediation
with Robert Goldman, to resolve their disputes about the terms of
the Sec. 363 Sale.
At a hearing on Nov. 17, 2009, Mr. Goldman advised the Court that
one of the Mediation Parties failed to participate in the
Mediation in good faith, and that he would provide a report to the
Court describing his reasons for making this determination. On
Dec. 3, 2009, the Court issued an order to show cause directing
Wells Fargo and its counsel to appear and show cause why they
should not be sanctioned for contempt of the Mediation Order and
General Order M-390, the most current statement of the mediation
program for the Bankruptcy Court for the Southern District of New
York. The Court held a hearing on the Order to Show Cause on
Dec. 31, 2009, which was attended by two representatives of Wells
Fargo, and an associate and a partner of Wells Fargo's counsel in
this matter, Ruskin Moscou Faltischek, P.C.
The issue before Judge Morris was whether mere attendance at
court-ordered mediation, without active participation in the
mediation process, satisfies the requirement to participate in
good faith, and Judge Morris said that attendance without active
participation is insufficient to constitute good-faith
participation in mediation. "In the case at bar, the Court finds
that the Mediation Order was clear and unambiguous, and the Court
finds clear evidence that Wells Fargo and its counsel failed to
participate in good faith. Therefore, Wells Fargo and its counsel
must bear the costs of the mediation as a sanction for their
violation of General Order M-211 and the Mediation Order," Judge
Morris said.
The case is In re A.T. Reynolds & Sons Inc., 10-2917 (S.D.N.Y.).
About A.T. Reynolds
A.T. Reynolds & Sons, Inc., dba Leisure Time Spring Water, sought
chapter 11 protection (Bankr. S.D.N.Y. Case No. 08-37739) on
Dec. 5, 2008. Nicholas A. Pascale, Esq., at Tarshis Catania
Liberth Mahon Milligram in Newburgh, N.Y., represents the Debtor.
At the time of the filing, the Debtor reported $5,327,072 in
assets and $3,658,682 in liabilities.
Wells Fargo controlled and disbursed Debtor's cash collateral
pursuant to numerous court orders entered in the chapter 11 case.
BANKS HOLDING: Files Schedules of Assets & Liabilities
------------------------------------------------------
Banks Holding, L.P., has filed with the U.S. Bankruptcy Court for
the Western District of North Carolina its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ------ -----------
A. Real Property $10,022,600
B. Personal Property $18,024,429
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $6,880,000
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $505,010
----------- -----------
TOTAL $28,047,029 $7,385,010
Burnsville, North Carolina-based Banks Holding, L.P., filed for
Chapter 11 bankruptcy protection (Bankr. W.D. N.C. Case No. 11-
10258) on March 18, 2011. Edward C. Hay, Jr., Esq., at Pitts, Hay
& Hugenschmidt, P.A., serves as the Debtor's bankruptcy counsel.
BANKS HOLDING: Section 341(a) Meeting Scheduled for April 27
------------------------------------------------------------
The U.S. Trustee for the Western District of North Carolina will
convene a meeting of Banks Holding, L.P.'s creditors on April 27,
2011, at 1:00 p.m. The meeting will be held at Bankruptcy
Courtroom, First Floor, 100 Otis Street, Asheville, NC 28801.
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.
Burnsville, North Carolina-based Banks Holding, L.P., filed for
Chapter 11 bankruptcy protection (Bankr. W.D. N.C. Case No. 11-
10258) on March 18, 2011. Edward C. Hay, Jr., Esq., at Pitts, Hay
& Hugenschmidt, P.A., serves as the Debtor's bankruptcy counsel.
According to its schedules, the Debtor disclosed $28,047,029 in
total assets and $7,385,010 in total debts as of the Petition
Date.
BANKS HOLDING: Wins Approval for Pitts Hay as Bankruptcy Counsel
----------------------------------------------------------------
Banks Holdings, L.P., sought and obtained authorization from the
Hon. George R. Hodges of the U.S. Bankruptcy Court for the Western
District of North Carolina to employ Pitts, Hay & Hugenschmidt,
P.A., as bankruptcy counsel.
Neither Pitts Hay nor the Debtor disclosed how the law firm will
be compensated.
Edward C. Hay, Jr., Esq., an attorney at Pitts Hay, assures the
Court that the firm is a "disinterested person" within the meaning
of Section 101(14) of the Bankruptcy Code.
Burnsville, North Carolina-based Banks Holding, L.P., filed for
Chapter 11 bankruptcy protection (Bankr. W.D. N.C. Case No. 11-
10258) on March 18, 2011. According to its schedules, the Debtor
disclosed $28,047,029 in total assets and $7,385,010 in total
debts as of the Petition Date.
BANKUNITED FINANCIAL: Seeks to Hire Structured Capital as Advisor
-----------------------------------------------------------------
BankruptcyData.com reports that BankUnited Financial filed with
the U.S. Bankruptcy Court a request to hire Structured Capital
Solutions (Contact: Mark McTigue) as investment advisor for a
contingent fee equal to 15% of all amounts distributed to all
holders of allowed prepetition claims against the Debtor.
About BankUnited Financial
BankUnited Financial Corp. (OTC Ticker Symbol: BKUNQ) --
http://www.bankunited.com/-- was the holding company for
BankUnited FSB, the largest banking institution headquartered in
Coral Gables, Florida. On May 21, 2009, BankUnited FSB was closed
by regulators and the Federal Deposit Insurance Corporation
facilitated a sale of the bank to a management team headed by John
Kanas, a veteran of the banking industry and former head of North
Fork Bank, and a group of investors led by W.L. Ross & Co.
BankUnited, FSB, had assets of $12.8 billion and deposits of
$8.6 billion as of May 2, 2009.
BankUnited Financial and its affiliates filed for Chapter 11
protection (Bankr. S.D. Fla. Lead Case No. 09-19940) on
May 22, 2009. Stephen P. Drobny, Esq., and Peter Levitt, Esq., at
Shutts & Bowen LLP; Mark D. Bloom, Esq., and Scott M. Grossman,
Esq., at Greenberg Traurig, LLP; and Michael C. Sontag, at Camner,
Lipsitz, P.A., serve as the Debtors' bankruptcy counsel. Corali
Lopez-Castro, Esq., David Samole, Esq., at Kozyak Tropin &
Throckmorton, P.A.; and Todd C. Meyers, Esq., at Kilpatrick
Stockton LLP, serve as counsel to the official committee of
unsecured creditors.
In its bankruptcy petition, BankUnited Financial disclosed
$37,729,520 in assets against $559,740,185 in debts. Aside from
those assets, BankUnited Financial said that a "valuable" asset is
its $3.6 billion net operating loss carryforward.
Wilmington Trust Co., U.S. Bank, N.A., and the Bank of New York
were listed among the company's largest unsecured creditors in
their roles as trustees for security issues. BankUnited Financial
estimated the Bank of New York claim tied to convertible
securities at $184 million. U.S. Bank and Wilmington Trust are
owed $120 million and $118.171 million on account of senior notes.
As reported in the Troubled Company Reporter on November 25, 2010,
BankUnited Financial Corp. filed a Chapter 11 plan premised upon a
cash infusion by a new investor, who in turn will receive 21% of
the new common stock plus preferred stock. The cash infusion will
be used to make cash distributions under the Plan, with the
remaining amount for working capital.
BORDERS GROUP: Has Approval for Jefferies as Investment Banker
--------------------------------------------------------------
Borders Group Inc. and its units received the Bankruptcy Court's
permission to employ Jefferies & Company, Inc., as their
investment banker nunc pro tunc to the Petition Date.
As investment banker, Jefferies is contemplated to provide
investment banking advisory and financial advisory services to
the Debtors:
(A) Investment banking and advisory services. The firm will
provide advice and assistance to the Debtors in connection
with analyzing, structuring, negotiating and effecting, and
acting as exclusive financial advisor to the Debtors in
connection with any restructuring of the Debtors'
outstanding indebtedness, any liquidation under Chapter 7 or
Chapter 11 of the Bankruptcy Code, or any execution of an
agreement on a sale of the Debtors' assets or equity.
(B) Financial advisory services. The firm will:
(1) familiarize itself with and analyze the business,
operations, properties, financial condition and
prospects of the Debtors;
(2) advise the Debtors on the current state of the
"restructuring market;"
(3) assist and advise the Debtors in developing the terms of
and a general strategy for accomplishing a
Restructuring;
(4) assist and advise the Debtors in implementing and
negotiating a Restructuring, including soliciting,
reviewing and analyzing proposals for debtor-in-
possession and exit financing as appropriate;
(5) assist and advise the Debtors in evaluating and
analyzing a Restructuring, including the value of the
securities or debt instruments, if any, that may be
issued in any restructuring;
(6) advise the Debtors with respect to the placement of any
debt securities of the Debtors, and at the Debtors'
request, meet with management, the board, creditor
groups or other parties-in-interest and provide those
parties with information subject to appropriate
confidentiality arrangements and assist in the
preparation;
(7) participate in hearings before the Court; and
(8) render other financial advisory services as may from
time to time be agreed upon by the Debtors and
Jefferies.
The Debtors will pay Jefferies in accordance with this fee
structure:
* Monthly Fee. A monthly advisory fee equal to $200,000 per
month. Each Monthly Fee will be due on the first business
day of each month for the term of the Jefferies Agreement.
50% of the Monthly Fees exceeding $1.2 million actually paid
to Jefferies will be creditable once against any
Restructuring Fee, but not the Liquidation Fee, if
applicable, due to Jefferies.
* Restructuring Fee. Upon the consummation of a Restructuring
or similar transaction, a restructuring fee in an amount
equal to $5.5 million; provided that in the event that a
Restructuring is a liquidation of all or substantially all
of the Debtors' assets, other than as a going concern and
with respect to which the Company ceases operations, under
Chapter 7 or Chapter 11 of the Bankruptcy Code, the
Restructuring Fee will be $1.5 million. To be clear, no
Liquidation Fee will be due as a result of a sale conducted
and consummated by a Chapter 7 trustee.
* Debt Securities Fee. Promptly upon the purchase or
placement of Debt Securities with a party who is not a
creditor or controlling shareholder of the Debtors as of the
date hereof, a fee equal to 3.0% of the greater of the
aggregate gross proceeds received or to be received from the
sale of Debt Securities or the aggregate principal amount of
Debt Securities, including, without limitation, aggregate
amounts committed by investors to purchase Debt Securities,
it being understood that Jefferies will receive 100% of that
Debt Securities Fee.
The Debtors will also reimburse necessary and reasonable expenses
Jefferies incur, provided that those reimbursable expenses will
not exceed $300,000 without the Debtors' prior approval.
Richard K. Glein, senior vice president of Jefferies & Company,
Inc., relates that before the Petition Date, Jefferies received
$250,000 in fees and $15,000 as an expense deposit from the
Debtors for prepetition services rendered and expenses incurred.
Jefferies will hold any amounts received prepetition in excess of
fees and expenses that accrued prepetition, if any, and apply
those excess amounts toward fees and expenses that accrue
postpetition.
Mr. Glein discloses that Jefferies:
(a) currently represents or formerly represented parties in
matters unrelated to the Debtors' Chapter 11 cases, a
schedule of which is available for free at:
http://bankrupt.com/misc/Borders_JefferiesClients.pdf
(b) either made a market in or published research on the
securities of the entities, a schedule of which is
available for free at:
http://bankrupt.com/misc/Borders_JefferiesMarketEntities.pdf
Mr. Glein notes that certain affiliates of Jefferies serve as
managers for a number of investment vehicles. Jefferies
employees working in connection with the Debtors' Chapter 11
cases have no control over investment decisions or business
decisions made for the Managed Funds, he clarifies. Jefferies
also has a debt securities and bank loan trading affiliate,
Jefferies High Yield Trading, LLC. However, JHYT is a legally
separate entity and is separated from Jefferies' investment
banking department and its managing directors and employees
advising the Debtors, by an "informational barrier," he explains.
Mr. Glein also discloses that Jefferies or an affiliate holds
about 3,000 shares of one or more of the Debtors' equity.
Jefferies has made a good faith effort to sell or otherwise
dispose of the Equity but has been unable to do so, he reveals.
While Jefferies believes that its holdings do not cause it to be
not disinterested for purposes of the Debtors' Chapter 11 cases,
in order to avoid any appearance of not being disinterested,
Jefferies, on behalf of itself and its affiliates, is forever and
irrevocably disclaiming any interest in the Equity and is forever
and irrevocably waiving any rights to any distribution to which
the Equity is or may be entitled, Mr. Glein avers.
Jefferies previously advised Bennett S. LeBow and LeBow Gamma
Limited Partnership on an equity investment with the Debtors in
2010. Jefferies has not advised, is not advising, and will not
advise Mr. LeBow or LeBow Ganuna Limited Partnership in
connection with the Debtors' Chapter 11 cases, Mr. Glein assures
the Court.
Despite those disclosures, Mr. Glein maintains that Jefferies is
a "disinterested person" as the term is defined under Section
101(14) of the Bankruptcy Code.
About Borders Group
Borders Group is a leading operator of book, music and movie
superstores and mall-based bookstores. At Jan. 29, 2011, the
Debtors operated 642 stores, under the Borders, Waldenbooks,
Borders Express and Borders Outlet names, as well as Borders-
branded airport stores in the United States, of which 639 stores
are located in the United States and 3 in Puerto Rico. Two of
Borders' flagship stores (along with other less prominent stores)
are located in Manhattan. In addition, the Debtors operate a
proprietary e-commerce Web site, http://www.Borders.com/,
launched in May 2008, which includes both in-store and online e-
commerce components. As of Feb. 11, 2011, Borders employed a
total of 6,100 full-time employees, 11,400 part-time employees,
and approximately 600 contingent employees.
Borders Group Inc. and its affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in
Manhattan on Feb. 16, 2011.
David M. Friedman, Esq., David S. Rosner. Esq, Andrew K. Glenn,
Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres &
Friedman LLP, in New York, serve as counsel to the Debtors.
Jefferies & Company's Inc. is the financial advisor. DJM Property
Management is the lease and real estate services provider. AP
Services LLC is the interim management and restructuring services
provider. The Garden City Group, Inc., is the claims and notice
agent.
Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein
LLP, serve as counsel to the DIP Agents.
National law firm Lowenstein Sandler has been appointed to
represent the official unsecured creditors committee for Borders
Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein
Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights
Group, are leading the team.
The Debtor disclosed $1.28 billion in assets and $1.29 billion in
liabilities as of Dec. 25, 2010
Borders Group has sought approval to sell merchandise and owned
furniture, fixtures and equipment located at approximately 200 of
their stores and, at Borders' option, up to 75 of 136 potential
other stores, through store closing sales.
Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Borders Group Inc., the United States' second
largest bookstore chain. (http://bankrupt.com/newsstand/or
215/945-7000)
BORDERS GROUP: Wins Nod for DJM Realty as Realtor
-------------------------------------------------
Borders Group Inc. and its units received the Bankruptcy Court's
permission to employ DJM Realty Services LLC as their real estate
consultant, nunc pro tunc to the Petition Date.
As the Debtors' real estate consultant, DJM will:
(a) on the Debtors' behalf and in accordance with the goals
and parameters established by the Debtors, will attempt to
negotiate (i) modification of certain of the Debtors'
Leases to obtain rent reductions or other advantageous
modifications; (ii) the termination, assignment or other
disposition of certain of the Leases, including assisting
the Debtors at an auction of the Leases, if needed; (iii)
waivers or reductions of any amounts payable to cure a
default upon assumption of a lease pursuant to Section
365(b)(1)(A) of the Bankruptcy Code; and (iv) to obtain
extensions of time to assume or reject Leases. The
Debtors retain complete discretion to accept or reject any
proposed lease modification or other leasehold concession;
(b) report periodically to the Debtors regarding the status of
negotiations; and
(c) work with the Debtors and their counsel to document
accurately all rent reductions, lease term modifications
and other leasehold concessions, including reviewing
documents and assisting in resolving any problems that may
arise.
Pursuant to a services agreement between the Debtors and DJM, the
term of the firm's engagement will be on a month-to-month basis,
cancellable by either party on at least five days' prior notice
to the other party.
The Debtors have agreed to pay DJM these amounts:
(1) Lease Modifications. As to each Lease assumed by the
Debtors for which DJM's efforts result in a fully executed
Lease modification agreement including a Lease
modification of a monetary term in accordance with the
Debtors' directions to DJM, including but not limited to
rent reductions and deferrals of rent payments, DJM's fee
will be: (i) $1 million if Total Savings equal at least
$96 million; (ii) $1.5 million if Total Savings equal at
least $105 million; and (iii) $2 million if Total Savings
equal at least $120 million. For each additional $15
million of Total Savings exceeding $120 million, DJM will
receive an additional fee of $500,000.
"Total Savings" refers to the sum of Savings for all
Renegotiation Transactions but limited to Savings during
the first three years of the modified Lease term.
"Savings" for any Renegotiation Transaction refers to the
difference between the Occupancy Cost prescribed in the
Lease for the period to be modified and the renegotiated
Occupancy Cost for the period to be modified, from the
effective date of that Occupancy Cost modification through
the end of the Lease term, including any option term
exercised as part of the modification.
(2) Lease Dispositions. For each closing of a transaction in
which any Lease is assigned or otherwise transferred to a
third party, DJM will earn a fee in an amount equal to 3%
of the Gross Proceeds of that disposition. Lease
dispositions will include the disposition of the Debtors'
interest in any sublease.
(3) Reduction in Bankruptcy Claims. For any Lease rejected by
the Debtors, if the landlord agrees to reduce or waive the
claim it could reasonably assert under Section 502(b)(6)
of the Bankruptcy Code or otherwise, DJM will receive a
fee in an amount equal to 3% percent of the savings of any
distribution that otherwise would have been payable to the
landlord in the Debtors' bankruptcy cases. Claim
reductions will include reductions in any claims related
to any subleases.
(4) Extensions of Time to Assume or Reject Leases. If
directed by the Debtors to negotiate with landlords to
obtain extensions of time to assume or reject Leases, no
separate fee will be payable to DJM for that work.
(5) DJM's fees will be earned and payable on the earlier to
occur of the date that Total Savings is equal to at least
$96 million and thereafter, the applicable additional fees
will be paid when and if Total Savings is equal to any
additional thresholds as set forth in the Services
Agreement.
(6) DJM will be compensated for additional consulting
services rendered at the Debtors' specific request and
agreed to by DJM and that are not otherwise provided for
in the Services Agreement at the rate of $400 per hour.
A full-text copy of the DJM Services Agreement is available for
free at http://bankrupt.com/misc/Borders_ServicesAgr.pdf
The Debtors will also pay to DJM a $100,000 non-refundable
monthly retainer for each month of the term of the Services
Agreement.
Edward Zimmer, a senior managing director at DJM, made
disclosures of DJM's connections with other entities, a copy of
which is available for free at:
http://bankrupt.com/misc/Borders_DJMDisclosures.pdf
Despite those disclosures, Mr. Zimmer insists that DJM is a
"disinterested person" as the term is defined under Section
101(14) of the Bankruptcy Code.
About Borders Group
Borders Group is a leading operator of book, music and movie
superstores and mall-based bookstores. At Jan. 29, 2011, the
Debtors operated 642 stores, under the Borders, Waldenbooks,
Borders Express and Borders Outlet names, as well as Borders-
branded airport stores in the United States, of which 639 stores
are located in the United States and 3 in Puerto Rico. Two of
Borders' flagship stores (along with other less prominent stores)
are located in Manhattan. In addition, the Debtors operate a
proprietary e-commerce Web site, http://www.Borders.com/,
launched in May 2008, which includes both in-store and online e-
commerce components. As of Feb. 11, 2011, Borders employed a
total of 6,100 full-time employees, 11,400 part-time employees,
and approximately 600 contingent employees.
Borders Group Inc. and its affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in
Manhattan on Feb. 16, 2011.
David M. Friedman, Esq., David S. Rosner. Esq, Andrew K. Glenn,
Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres &
Friedman LLP, in New York, serve as counsel to the Debtors.
Jefferies & Company's Inc. is the financial advisor. DJM Property
Management is the lease and real estate services provider. AP
Services LLC is the interim management and restructuring services
provider. The Garden City Group, Inc., is the claims and notice
agent.
Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein
LLP, serve as counsel to the DIP Agents.
National law firm Lowenstein Sandler has been appointed to
represent the official unsecured creditors committee for Borders
Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein
Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights
Group, are leading the team.
The Debtor disclosed $1.28 billion in assets and $1.29 billion in
liabilities as of Dec. 25, 2010
Borders Group has sought approval to sell merchandise and owned
furniture, fixtures and equipment located at approximately 200 of
their stores and, at Borders' option, up to 75 of 136 potential
other stores, through store closing sales.
Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Borders Group Inc., the United States' second
largest bookstore chain. (http://bankrupt.com/newsstand/or
215/945-7000)
BORDERS GROUP: Committee Proposes BDO as Financial Advisor
----------------------------------------------------------
The Official Committee of Unsecured Creditors in Borders Group
Inc.'s Chapter 11 cases seeks the Bankruptcy Court's permission to
retain BDO USA, LLP as its financial advisor, nunc pro tunc to
Feb. 25, 2011.
As the Committee's financial advisor, BDO will:
(a) analyze the financial operations of the Debtors, as
necessary;
(b) analyze the financial ramifications of any proposed
transactions for which the Debtors seek Court approval
including, but not limited to, postpetition financing,
sale of all or a portion of the Debtors' assets, critical
vendor payments, assumption or rejection of leases or
executory contracts, retention of management or employee
incentive and severance plans;
(c) analyze and, as needed, assist the Debtors in formulating
business plans supporting the reorganization of all or
parts of the Debtors' business;
(d) analyze and, as needed, assist the Debtors in the
marketing and sale of substantially all or a portion of
the Debtors' assets;
(e) for any proposed sale transaction:
(i) assist the Committee and the Debtors' estates in
establishing criteria for potential qualified
purchasers and bidding procedures;
(ii) advise the Committee on the identification,
screening and ranking of prospective qualified
purchasers;
(iii) evaluate proposals received from potential
Purchasers;
(iv) advise the Committee and the Debtors' estates as to
strategy and tactics to achieve the highest and
best alternative from a sale;
(v) attend any auctions;
(vi) recommend to the Committee and the Debtors' estates
the "highest and best" alternative for submission
to the Court; and
(vii) assist the Committee and the Debtors' estates
through the closing process;
(f) establish criteria and advise the Committee on alternative
exit strategies;
(g) prepare certain valuation analyses of the Debtors'
businesses and assets using various professionally
accepted methodologies;
(h) as needed, prepare alternative business projections
relating to the valuation of the Debtors' business
enterprise;
(i) evaluate financing proposals and alternatives proposed by
the Debtors for debtor-in-possession financing, exit
financing, and capital raising supporting any plan of
reorganization;
(j) conduct any requested financial analysis including
verifying the material assets and liabilities of the
Debtors, as necessary, and their values;
(k) assist the Committee in its review of monthly statements
of operations submitted by the Debtors;
(l) perform claims analysis for the Committee;
(m) assist the Committee in its evaluation of cash flow and/or
other projections prepared by the Debtors;
(n) scrutinize cash disbursements on an ongoing basis for the
period subsequent to the commencement of these Chapter 11
cases;
(o) perform forensic investigating services, as requested by
the Committee and counsel, regarding prepetition
activities of the Debtors in order to identify potential
causes of action, including investigating intercompany
transfers, improvements in position, preferential payments
and fraudulent transfers;
(p) analyze transactions with insiders, related and/or
affiliated companies;
(q) analyze transactions with the Debtors' financing
institutions;
(r) attend meetings of creditors and conferences with
representatives of the creditor groups and their counsel;
(s) assist the Committee in its review of the financial
aspects of any plans of reorganization or liquidation
submitted by the Debtors and perform any related
analyses and evaluate best exit strategy;
(t) assist counsel in preparing for any depositions and
testimony, as well as prepare any necessary expert reports
and provide expert testimony at depositions and court
hearings, as requested; and
(u) perform other necessary services as the Committee or the
Committee's counsel may request from time to time with
respect to financial, business and economic issues that
may arise.
BDO's professionals will be paid according to the firm's
customary hourly rates:
Professional Rate per Hour
------------ -------------
PartnerslManaging Directors $475 to $795
Directors/Sr. Managers/Sr. Vice Presidents $375 to $550
Managers/Vice Presidents $325 to $425
Seniors/Analysts $200 to $350
Staff $150 to $225
BDO will also be reimbursed for necessary and actual expenses it
incurred or will incur.
William K. Lenhart, a partner at BDO, says his firm has and may
still be involved in matters unrelated to the Debtors' Chapter 11
cases with certain parties, a list of which parties is available
for free at http://bankrupt.com/misc/Borders_BDOClients.pdf
Mr. Lenhart further reveals that BDO provides audit, tax and
valuation services to Barnes & Noble, Inc. To prevent conflicts
of interest from arising, BDO has erected an ethical wall between
the professionals providing consulting services to the Creditors'
Committee in the Debtors' cases and members of the assurance, tax
and valuation teams, which provide professional services to B&N,
he says. He mentions that BDO has financial relationships with
PNC Bank, US Bank, N.A., Wells Fargo Retail Finance LLC, Comerica
Bank and Fifth Third Bank, which provide BDO with lending and
banking services in the normal course of BDO's business; but
assures the Court that the nature of BDO's relationship with
these entities does not create a conflict which is adverse to the
Creditors' Committee, the Debtors or the Debtors' estates.
In addition, BDO likely provides and may provide accounting, tax,
valuation or consulting services to creditors of the Debtors or
their affiliates who have yet to be disclosed by the Debtors in
matters unrelated to the Debtors, their affiliates, or these
Chapter 11 cases, Mr. Lenhart relates. BDO USA is the U.S.
member firm of BDO International and BDO International's
individual member firms have not performed work for the Debtors
or its affiliates, he states. BDO has been retained and likely
will continue to be retained by certain creditors of the Debtors,
but it is the intention of the firm to use commercially
reasonable efforts to limit any engagements to matters unrelated
to the Debtors' Chapter 11 cases, Mr. Lenhart adds.
Despite those disclosures, Mr. Lenhart insists that BDO is a
"disinterested person" as the term is defined under Section
101(14) of the Bankruptcy Code.
About Borders Group
Borders Group is a leading operator of book, music and movie
superstores and mall-based bookstores. At Jan. 29, 2011, the
Debtors operated 642 stores, under the Borders, Waldenbooks,
Borders Express and Borders Outlet names, as well as Borders-
branded airport stores in the United States, of which 639 stores
are located in the United States and 3 in Puerto Rico. Two of
Borders' flagship stores (along with other less prominent stores)
are located in Manhattan. In addition, the Debtors operate a
proprietary e-commerce Web site, http://www.Borders.com/,
launched in May 2008, which includes both in-store and online e-
commerce components. As of Feb. 11, 2011, Borders employed a
total of 6,100 full-time employees, 11,400 part-time employees,
and approximately 600 contingent employees.
Borders Group Inc. and its affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in
Manhattan on Feb. 16, 2011.
David M. Friedman, Esq., David S. Rosner. Esq, Andrew K. Glenn,
Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres &
Friedman LLP, in New York, serve as counsel to the Debtors.
Jefferies & Company's Inc. is the financial advisor. DJM Property
Management is the lease and real estate services provider. AP
Services LLC is the interim management and restructuring services
provider. The Garden City Group, Inc., is the claims and notice
agent.
Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein
LLP, serve as counsel to the DIP Agents.
National law firm Lowenstein Sandler has been appointed to
represent the official unsecured creditors committee for Borders
Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein
Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights
Group, are leading the team.
The Debtor disclosed $1.28 billion in assets and $1.29 billion in
liabilities as of Dec. 25, 2010
Borders Group has sought approval to sell merchandise and owned
furniture, fixtures and equipment located at approximately 200 of
their stores and, at Borders' option, up to 75 of 136 potential
other stores, through store closing sales.
Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Borders Group Inc., the United States' second
largest bookstore chain. (http://bankrupt.com/newsstand/or
215/945-7000)
BORDERS GROUP: Wins Final Approval for Claims Trading Limitations
-----------------------------------------------------------------
Bankruptcy Judge Martin Glenn approved, on a final basis, uniform
procedures designed to protect the potential value of Borders
Group Inc.'s net operating tax loss carryforward amounts,
potential net unrealized built-in losses in their assets, capital
loss carryforwards and certain other tax and business credit.
Any acquisition, disposition, or other transfer in violation of
the set 'trading' restrictions on will be null and void ab initio
as an act in violation of the automatic stay prescribed under
Section 362 of the Bankruptcy Code and pursuant to the Court's
equitable power prescribed in Section 105(a) of the Bankruptcy
Code, Judge Glenn ruled.
Judge Glenn further clarified that any trades made before the
entry of the Interim Order will not be subject to the Final
Order. The provisions of the Final Order will be effective nunc
pro tunc to February 16, 2011.
The Debtors will serve notice of the entry of the Court's Final
Order describing the authorized restrictions and notification
requirements to: (i) the U.S. Trustee for Region 2; (ii) counsel
for the Official Committee of Unsecured Creditors; (iii) counsel
for the DIP Agents; (iv) Kelley Drye & Warren LLP, attorneys for
certain landlords; (v) attorneys for General Growth Properties,
Inc.; (vi) attorneys for Bank of America, N.A.; (vii) any person
who has filed Schedule 13D or Schedule 13G with the U.S.
Securities and Exchange Commission since January 1, 2010 with
regard to the beneficial ownership of Borders stock; (viii) any
record holder of Borders stock or, in the case of persons or
entities holding Borders stock in "street name" through a nominee
holder, to that nominee holder or the designated mailing agent
for that nominee holder; (ix) the SEC; and (x) the Internal
Revenue Service. Any nominee holders or their designated mailing
agent will either provide the Debtors' claims and noticing agent,
The Garden City Group, Inc., with the last known names and
addresses of their clients who are beneficial owners of Borders
stock, or send the Final Procedures Notice to all beneficial
holders of Borders Stock known to the nominee holder or its
designated agent. Upon receipt of a proper invoice, the Debtors
will reimburse the nominee holder or its designated mailing agent
the cost of mailing the Final Procedures Notice.
The Debtors may waive, in writing, any and all restrictions,
stays, and notification procedures contained in the Final Order.
Judge Glenn clarified that nothing in the Final Order will
preclude any person or entity desirous of acquiring or disposing
of any claim or interest from requesting relief from the Final
Order in Court subject to the Debtors' rights to oppose that
relief.
Likewise, nothing in the Final Order or in the Debtors' Claims
Trading Procedures Motion will or will be deemed to prejudice,
impair or otherwise alter or affect the rights of any holders of
interests in or claims against the Debtors, including in
connection with the treatment of any of those interests or claims
under any plan, Judge Glenn said.
About Borders Group
Borders Group is a leading operator of book, music and movie
superstores and mall-based bookstores. At Jan. 29, 2011, the
Debtors operated 642 stores, under the Borders, Waldenbooks,
Borders Express and Borders Outlet names, as well as Borders-
branded airport stores in the United States, of which 639 stores
are located in the United States and 3 in Puerto Rico. Two of
Borders' flagship stores (along with other less prominent stores)
are located in Manhattan. In addition, the Debtors operate a
proprietary e-commerce Web site, http://www.Borders.com/,
launched in May 2008, which includes both in-store and online e-
commerce components. As of Feb. 11, 2011, Borders employed a
total of 6,100 full-time employees, 11,400 part-time employees,
and approximately 600 contingent employees.
Borders Group Inc. and its affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in
Manhattan on Feb. 16, 2011.
David M. Friedman, Esq., David S. Rosner. Esq, Andrew K. Glenn,
Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres &
Friedman LLP, in New York, serve as counsel to the Debtors.
Jefferies & Company's Inc. is the financial advisor. DJM Property
Management is the lease and real estate services provider. AP
Services LLC is the interim management and restructuring services
provider. The Garden City Group, Inc., is the claims and notice
agent.
Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein
LLP, serve as counsel to the DIP Agents.
National law firm Lowenstein Sandler has been appointed to
represent the official unsecured creditors committee for Borders
Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein
Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights
Group, are leading the team.
The Debtor disclosed $1.28 billion in assets and $1.29 billion in
liabilities as of Dec. 25, 2010
Borders Group has sought approval to sell merchandise and owned
furniture, fixtures and equipment located at approximately 200 of
their stores and, at Borders' option, up to 75 of 136 potential
other stores, through store closing sales.
Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Borders Group Inc., the United States' second
largest bookstore chain. (http://bankrupt.com/newsstand/or
215/945-7000)
BORDERS GROUP: Proposes to Fix June 1, 2011 as Claims Bar Date
--------------------------------------------------------------
Borders Group, Inc. and its debtor affiliates ask Judge Martin
Glenn of the U.S. Bankruptcy Court for the Southern District of
New York to establish:
(a) June 1, 2011, at 5:00 p.m., as the deadline for each
person or entity to file a proof of claim with respect to
a prepetition claim, including secured claims and priority
claims as well as claims under Section 503(b)(9) of the
Bankruptcy Code against any of the Debtors; and
(b) August 15, 2011, at 5:00 p.m., as the deadline for
governmental units to file a proof of claim with respect
to a prepetition claim against any of the Debtors.
Rule 3003(c)(3) of the Federal Rules of Bankruptcy Procedure
provides that the court will fix the time within which proofs of
claim must be filed in a Chapter 11 case pursuant to Section 501
of the Bankruptcy Code. Bankruptcy Rule 3003(c)(2) provides that
any creditor whose claim is not scheduled in a debtor's
statements of financial affairs, schedules of assets and
liabilities, and schedules of executory contracts or whose claim
is scheduled as disputed, contingent or unliquidated must file a
proof of claim. The Debtors expect to file their Statement of
Financial Affairs and Schedules on or before April 1, 2011.
Moreover, Section 502(b)(9) of the Bankruptcy Code provides that
"a claim of a governmental unit shall be timely filed it is filed
before 180 days after the date of the order for relief or such
later time as the Federal Rules of Bankruptcy Procedure may
provide. . . ."
The Debtors propose that all proofs of claim filed in their
Chapter 11 cases be consistent with these procedures:
(A) Proofs of Claim must:
* conform to the proposed form of proof of claim form;
* be (i) signed; (ii) include supporting documentation
or an explanation as to why documentation is not
available; (iii) be in the English language; and (iv) be
denominated in the United States currency; and
* specify the name and case number of the Debtor against
which the claim is filed; if the holder asserts a claim
against more than one Debtor or has claims against
different Debtors, a separate proof of claim form must be
filed with respect to each Debtor. To the extent a
claimant inserts an incomplete debtor name, such as
"Borders," that claim will be attributed to Borders, Inc.
(B) Proofs of claim will be deemed filed only when received by
The Garden City Group or the Clerk on before on or
applicable Bar Date. Claimants must deliver the original
proof of claim to this address:
If by first-class mail, to:
The Garden City Group, Inc.
Attn: Borders Group, Inc.
P.O. Box 9690
Dublin, Ohio 43017-4990
If by hand delivery or overnight courier, to:
The Garden City Group, Inc.
Attn: Borders Group, Inc.
5151 Blazer Parkway, Suite A
Dublin, Ohio 43017
Or
United States Bankruptcy Court, SDNY
One Bowling Green
Room 534
New York, New York 10004
(C) Neither the Court nor GCG will be required to accept Proofs
of Claim sent by facsimile, telecopy, or electronic mail
transmission.
(D) Any person or entity that asserts a claim that arises from
the rejection of an executory contract or unexpired lease
must file a Proof of Claim based on that rejection by the
later of (i) the applicable Bar Date, and (ii) the date that
is 45 days following entry of an order approving the
rejection or be forever barred from doing so.
(E) In the event the Debtors supplement or amend their Schedules
to (a) designate a claim as disputed, contingent, or
unliquidated; (b) change the amount of a claim; (c) change
the classification of a claim; (d) remove a claim; or (e)
add a claim that is not listed on the Schedules, the Debtors
will notify the claimant of the supplement or amendment.
The deadline for any holder of a claim so designated,
changed, or added to file a Proof of Claim on account of any
claim is the later of (i) applicable Bar Date, and (ii) the
date that is 30 days after the Debtors provide notice of the
supplement or amendment.
(F) Any person or entity that relies on the Schedules has the
responsibility to determine that the claim is accurately
listed in the Schedules.
These persons or entities are not required to file a Proof of
Claim on or before the applicable Bar Date:
(i) Any person or entity that has already filed a proof of
claim against the Debtors with the Clerk or GCG in a form
substantially similar to the Proof of Claim Form.
(ii) Any person or entity whose claim is listed on the
Schedules filed by the Debtors, provided that (A) the
claim is not scheduled as disputed, contingent or
unliquidated; and (B) the claimant does not disagree with
the amount, nature, and priority of the claim as set forth
in the Schedules; and (C) the claimant does not dispute
that the claim is an obligation of the specific Debtor
against which the claim is listed on the Schedules.
(iii) Any holder of a claim that has been allowed by order of
the Court.
(iv) Any person or entity whose claim has been paid in full by
any of the Debtors.
(v) Any holder of a claim for which specific deadlines have
previously been fixed by the Court.
(vi) Any Debtor having a claim against another Debtor or any of
the non-debtor subsidiaries of Borders Group, Inc. having
a claim against any of the Debtors.
(vii) Any holder of a claim allowable under Sections 503(b) and
507(a)(2) of the Bankruptcy Code as an expense in
Administration.
(viii) Any person or entity that holders an interest in the
Debtors, which ownership is based exclusively on the
ownership of common stocks, membership interests,
partnership interests, or warrants or rights to purchase,
sell or subscribe to a security or interest; provided that
interest holders that wish to assert claims against any of
the Debtors that arise out of or relate to the ownership
or purchase of an interest, including claims arising out
of or relating to the sale, issuance, or distribution of
the interest, must file Proofs of Claim on or before the
applicable Bar Date.
(ix) Any person or entity holding a claim for principal,
interest, and other fees and expenses on or under the
Prepetition Credit Facilities or the DIP Facility.
The Debtors propose that any holder of a claim against them who
is required, but fails, to file a proof of claim in accordance
with the Bar Date Order on or before the Bar Date will be forever
barred, estopped, and enjoined from asserting that claim against
the Debtors. The Debtors and their property will be forever
discharged from any and all indebtedness or liability with
respect to that claim, and that holder will not be permitted to
vote to accept or reject any plan of reorganization filed in
these Chapter 11 cases, or participate in any distribution in the
Debtors' Chapter 11 cases on account of that claim or to receive
further notices regarding the claim.
Pursuant to the Rule 2002(a)(7), (f), (1) of the Federal Rules of
Bankruptcy Procedure and the Procedural Guidelines, the Debtors
propose to serve a Proof of Claim Form and a Bar Date Notice, at
least 35 days prior to the General Bar Date, to these parties:
(i) The United States Trustee for Region 2;
(ii) Counsel for the Official Committee of Unsecured Creditors;
(iii) All persons or entities that have requested notice of the
proceedings in these Chapter 11 cases;
(iv) All persons or entities that have filed claims;
(v) All known creditors and other known holders of claims as
of the date of a Bar Date Order, including all persons or
entities listed in the Schedules as holding claims for
which the Debtors have addresses;
(vi) All parties to executory contracts and unexpired leases of
the Debtors;
(vii) The attorneys of record to all parties to pending
litigation against any of the Debtors;
(viii) The U.S. Internal Revenue Service, the U.S. Securities and
Exchange Commission, the United States Attorney's Office
for the Southern District of New York, and all applicable
government entities; and
(ix) All other parties in the Debtors' creditor matrix.
The Bar Date Notice notifies parties of:
-- the Bar Dates;
-- who must file a Proof of Claim;
-- the procedures for filing a Proof of Claim;
-- the consequence for failing to timely file a Proof of
Claim; and
-- where parties can find further information.
With regard to their current employees, the Debtors may provide
notice of the Bar Date to those employees using a notice
substantially similar to the Bar Date Notice.
The Debtors will also post the Proof of Claim Form and Bar Date
Notice on the Web site established by GCG for the Debtors' cases
at www.bordersreorganization.com
The Debtors also propose to publish a publication notice in The
New York Times at least 28 days prior to the General Bar Date,
thus satisfying the requirement of Bankruptcy Rule 2002(a)(7).
The Debtors propose to publish the Publication Notice, in their
sole discretion, in other newspapers, trade journals, or similar
publications.
Andrew K. Glenn, Esq., at Kasowitz, Benson, Torres & Friedman
LLP, in New York, notes that the Debtors will be providing no
less than 35 days' notice to all known creditors. The Debtors
believe that the proposed Bar Dates and notice procedures provide
sufficient time for all parties-in-interest, including foreign
creditors, to assert their claims.
"Because the proposed procedures will provide notice to all known
parties-in-interest by mail and notice to any unknown parties in
interest by publication, the proposed notice procedures are
reasonably calculated to provide notice to all parties that may
wish to assert a claim in these Chapter 11 cases," Mr. Glenn
asserts.
The Court will consider the Debtors' request on April 7, 2011.
Objections are due no later than March 31.
About Borders Group
Borders Group is a leading operator of book, music and movie
superstores and mall-based bookstores. At Jan. 29, 2011, the
Debtors operated 642 stores, under the Borders, Waldenbooks,
Borders Express and Borders Outlet names, as well as Borders-
branded airport stores in the United States, of which 639 stores
are located in the United States and 3 in Puerto Rico. Two of
Borders' flagship stores (along with other less prominent stores)
are located in Manhattan. In addition, the Debtors operate a
proprietary e-commerce Web site, http://www.Borders.com/,
launched in May 2008, which includes both in-store and online e-
commerce components. As of Feb. 11, 2011, Borders employed a
total of 6,100 full-time employees, 11,400 part-time employees,
and approximately 600 contingent employees.
Borders Group Inc. and its affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in
Manhattan on Feb. 16, 2011.
David M. Friedman, Esq., David S. Rosner. Esq, Andrew K. Glenn,
Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres &
Friedman LLP, in New York, serve as counsel to the Debtors.
Jefferies & Company's Inc. is the financial advisor. DJM Property
Management is the lease and real estate services provider. AP
Services LLC is the interim management and restructuring services
provider. The Garden City Group, Inc., is the claims and notice
agent.
Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein
LLP, serve as counsel to the DIP Agents.
National law firm Lowenstein Sandler has been appointed to
represent the official unsecured creditors committee for Borders
Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein
Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights
Group, are leading the team.
The Debtor disclosed $1.28 billion in assets and $1.29 billion in
liabilities as of Dec. 25, 2010
Borders Group has sought approval to sell merchandise and owned
furniture, fixtures and equipment located at approximately 200 of
their stores and, at Borders' option, up to 75 of 136 potential
other stores, through store closing sales.
Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Borders Group Inc., the United States' second
largest bookstore chain. (http://bankrupt.com/newsstand/or
215/945-7000)
BOUNDARY BAY: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Boundary Bay Capital, LLC, a California LLC
fka Covenant Bancorp, Inc.
Covenant Capital, LLC
17801 Cartwright Road
Irvine, CA 92614
Bankruptcy Case No.: 11-14298
Chapter 11 Petition Date: March 28, 2011
Court: U.S. Bankruptcy Court
Central District of California (Santa Ana)
Debtor's Counsel: Hutchison B. Meltzer, Esq.
WEILAND, GOLDEN, SMILEY, WANG EKVALL &
STROK, LLP
650 Town Center Drive, Suite 950
Costa Mesa, CA 92626
Tel: (714) 966-1000
Fax: (714) 966-1002
E-mail: hmeltzer@wgllp.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $50,000,001 to $100,000,000
The petition was signed by Jerry D. Smith, a member of Covenant
Management Group, LLC, managing member.
Debtor-affiliate filing separate Chapter 11 petition:
Entity Case No. Petition Date
------ -------- -------------
Cartwright Properties, LLC 10-17823 06/09/10
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Harrington Construction Co. Inc. Note Holder $1,362,872
Defined Benefit Pension Plan
22632 Golden Springs Drive, Suite 215
Diamond Bar, CA 91765
Henry Worthington Testamentary Note Holder $1,233,682
Trust dtd 10/28/1988
5602 Aztec Drive
La Mesa, CA 91942
The Maureen Ragan Rafael Revocable Note Holder $911,960
Trust UTD 10/12/2000
180 W. Jason Street
Leucadia, CA 92024
DBSK, LLC Note Holder $897,840
c/o Douglas & Betty Claude
8299 E. Brookdale Lane
Anaheim, CA 92807
Lynell G. Burmark Note Holder $775,845
713 Saranac Drive
Sunnyvale, CA 94087
Clinton & Joy Campbell Note Holder $774,022
2702 50th Avenue NE
Tacoma, WA 98422
Deborah D. Gallo Living Trust Note Holder $660,258
Dtd 03/03/06 Any Amendments Thereto
2844 Hawthorn Street
San Diego, CA 92104
Peggy A. Coon & Albert C. Wazlak Note Holder $636,466
Revocable Trust
1901 Pine Street
Huntington Beach, CA 92648
Ritter Family Trust dtd Note Holder $607,502
05/31/1995
11722 Welebir Street
Loma Linda, CA 92354
Botta Living Trust Note Holder $588,215
c/o Mike Botta, Trustee
49288 Sherman Street
Indio, CA 92201
Roy & Dorothy Callison Joint Note Holder $572,482
Trust
7840 Luane Trail
Colton, CA 92324
BOG, LLC Note Holder $550,190
c/o Hope McKenzie, Managing Member
1436 Hunter Drive
Redlands, CA 92374
IRA Resources, Inc. Note Holder $518,874
6825 La Jolla Boulevard
La Jolla, CA 92037
The Roy & Dorothy Callison FLIP Note Holder $511,688
Charitable Remainder Unitrust
7840 Luane Trail
Colton, CA 92324
WH Enterprises, LLC Note Holder $484,959
c/o Pat Sundstrom
14516 58th Place W
Edmonds, WA 98026
IRA Resources, Inc. Note Holder $456,443
FBO John F. Gilmartin IRA #17800
6825 La Jolla Boulevard
La Jolla, CA 92037
Putnam Trust Note Holder $453,129
c/o Paul Putnam, Trustee
1916 Day Island Boulevard W
University Place, WA 98466
Michael & Rhonda Bradbury Note Holder $415,507
31525 Larga Vista Road
Valley Center, CA 92082
Helen W. Nelson Living Trust Note Holder $382,707
c/o Helen W. Nelson, Trustee
5602 Aztec
La Mesa, CA 91942
IRA Resources, Inc. Peggy Note Holder $382,670
Fritzsche
Decd; Anton Hasso Bene IRA #34603
6825 La Jolla Boulevard
La Jolla, CA 92037
BUTLER INT'L: McBreen Demands Insurer Cover Fiduciary Claims
------------------------------------------------------------
Bankruptcy Law360 reports that McBreen & Kopko LLP asked an
Illinois federal court Thursday to dismiss a declaratory judgment
action brought against it by Twin City Fire Insurance Co. over
coverage for breach of fiduciary claims arising from Butler
International Inc.'s bankruptcy.
About Butler International
Based in Ft. Lauderdale, Florida, Butler International, Inc.
(PINKSHEETS: BUTL) -- http://www.butler.com/-- provides
Engineering and Technical Outsourcing services. During its 62-
year history of providing services, Butler International has
served clients in the aircraft/aerospace, federal/defense,
communications, consumer and manufacturing and commercial sectors.
The Company and its affiliates, including Butler Services
International Inc., filed for Chapter 11 bankruptcy
protection (Bankr. D. Del. Case No. 09-11914) on June 1, 2009.
Charlene D. Davis, Esq., at Bayard, P.A., serves as counsel to the
Debtor. The Company estimated $50,000,001 to $100,000,000 in
assets and $50,000,001 to $100,000,000 in debts as of the Chapter
11 filing.
CARPENTER CONTRACTORS: Hires GlassRatner as Financial Advisors
--------------------------------------------------------------
Carpenter Contractors of America Inc. and CCA Midwest Inc. seek
authority from the Bankruptcy Court to hire Thomas Santoro and
GlassRatner Advisory & Capital Group, LLC, to prepare a
liquidation analysis and provide additional financial advice and
related services. The liquidation analysis is required to be
filed together with a plan of reorganization and disclosure
statement for the Debtors.
The professionals who will be involved in the Debtors' cases and
their hourly rates are:
Tom Santoro, CPA $375
Managers and directors $205-$300
Other professional staff $150-$205
The firm may be reached at:
Tom Santoro, Principal
GLASSRATNER ADVISORY & CAPITAL GROUP, LLC
799 Brickell Plaza, Suite 701
Miami, FL 33131
Tel: 954-612-4017
Fax: 305-358-6092
E-mail: tsantoro@glassratner.com
Mr. Santoro attests that his firm does not have an interest
adverse to the Debtors or their estate, and is a "disinterested
person" within the meaning of Sec. 101(14) of the Bankruptcy Code
as required by Sec. 327(a).
About Carpenter Contractors
Pompano Beach, Florida-based Carpenter Contractors of America,
Inc., dba R&D Thiel, and CCA Midwest Inc. filed for Chapter 11
bankruptcy protection (Bankr. S.D. Fla. Lead Case No. 10-42604) on
Oct. 25, 2010. Chad P. Pugatch, Esq., serves as the Debtors'
bankruptcy counsel, and Shaw Gussis Fishman Glantz Wolfson &
Towbin LLC, serve as special counsel. Scott L. Spencer, CPA and
Crowe Horwath, LLP is the Debtors' accountant for audit work.
Great American Group Advisory & Valuation Services, LLC, serves as
appraisers.
Carpenter Contractors disclosed $42,900,573 in assets and
$25,861,652 in liabilities as of the Chapter 11 filing.
CARPENTER CONTRACTORS: Has Until May 23 to Decide on Leases
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida has
extended, at the behest of Carpenter Contractors of America, Inc.,
et al., the time to assume or reject unexpired leases of real
property with FLA Owner, LLC, WL Properties, and Donald Thiel
until May 23, 2011.
The affected leases are:
a) leases with Donald L. Thiel for the use of non-residential
real properties located at 941 SW 12th Avenue, Pompano Beach,
Florida; 3900 Avenue G., NW, New Haven, Florida; 190 Gills
Hill Road, Fayetteville, North Carolina; and 2340 Newburg
Road, Belvidere, Illinois;
b) leases with FLA Owner, LLC, for the use of non-residential
real property located at 9950 Princess Palm Avenue, Tampa,
Florida; and
c) leases with WL Properties for the use of non-residential real
property located at 2160 and 2162 Andrea Lane, Ft. Myers,
Florida.
The Debtors sought for an extension of time to assess and to make
an informed decision as to which leasehold interests they will
need to retain as part of their reorganization and which leasehold
interests may be rejected in furtherance of their rehabilitative
efforts.
The Debtors have been negotiating with its primary secured lender,
First American Bank, both as to final terms for use of cash
collateral and debtor-in-possession lending, as well as the
parameters of plan treatment. The Debtors and FAB have made
substantial progress in the negotiations and are in the process of
finalizing an agreement in principle. To finalize the agreement,
and to resolve other significant issues regarding a plan, the
Debtors sought an extension to evaluate all leasehold interests.
Pompano Beach, Florida-based Carpenter Contractors of America,
Inc., dba R&D Thiel, and CCA Midwest Inc. filed for Chapter 11
bankruptcy protection (Bankr. S.D. Fla. Lead Case No. 10-42604) on
Oct. 25, 2010. Chad P. Pugatch, Esq., serves as the Debtors'
bankruptcy counsel, and Shaw Gussis Fishman Glantz Wolfson &
Towbin LLC, serve as special counsel. GlassRatner Advisory &
Capital Group, LLC, led by Thomas Santoro, is the Debtors' as
financial advisor, and Scott L. Spencer, CPA and Crowe Horwath,
LLP is the Debtors' accountant for audit work. Carpenter
Contractors disclosed $42,900,573 in assets and $25,861,652 in
liabilities as of the Chapter 11 filing.
CENTRAL LEASING: Hearing on Chapter 7 Conversion on April 26
------------------------------------------------------------
New York Commercial Bank is asking the Bankruptcy Court to convert
conversion Central Leasing Co. of NJ, LLC's Chapter 11 case to one
under Chapter 7 of the Bankruptcy Code.
A hearing on NYCB's request will be held on April 26, 2011, at
10:00 a.m. Objections to the motion, if any, must be in writing
and filed with the Clerk of the Bankruptcy Court no later than
April 19.
NYCB said the Debtor owes it $2,821,663, secured by the Equipment
purchased through the line of credit provided by NYCB. NYCB also
asserts a security interest in the leases made by the Debtor to
its end-lessees including the rental stream derived therefrom.
In support of its motion for conversion, NYCB stated:
-- The Rents from the Lases constitute NYCB's "cash collateral"
within the meaning of Section 363(a) of the Bankruptcy Code.
NYCB contends that the Debtor is in violation of Section
363(c)(2) of the Bankruptcy Code, having failed to seek Court
approval to use NYCB's collateral although the Debtor's case
has been pending since January.
-- There is continuing loss to the estate and the absence of a
reasonable likelihood of rehabilitation of the Debtor. The
Debtor's principal had testified at the Section 341 meeting
that all of the Debtor's Leases listed in Schedule G of the
Debtor's Petition and Schedules are in default.
-- There is no ability to re-establish its business operations
and the Debtor's ongoing business prospects do not justify
continuance of its reorganization efforts. In fact, there is
no business to be run or reorganized in the first place.
Upon information and belief, all of the Leases terminate
within a short time and there are no further Leases being
entered into by the Debtor.
-- A Chapter 7 trustee is in the best position to analyze the
Leases and either collect the income stream and sell the
Equipment at termination, sell the Leases prior to
termination, or terminate them and take back and liquidate
the Equipment.
-- There has also been mismanagement of the Company by the
Debtor's principal, as well as misrepresentation (at least
as to NYCB).
-- Further, the Debtor's principal has, upon information and
belief, granted security interest in the same assets to
multiple lending institutions. There may have also been
numerous fraudulent conveyance and preference actions as a
result of payments to "favored" lending institutions which
the Chapter 7 trustee is the appropriate authority to
investigate and commence.
-- The Debtor's principal has been lax in seeking compliance
the Lessee's payment obligations under the Leases, which a
trustee has incentive to collect for the benefit of the
estate.
New York Commercial Bank is represented by:
Matthew G. Roseman, Esq.
Jennifer McLaughlin, Esq.
Bonnie L. Pollack, Esq.
CULLEN AND DYKMAN LLP
100 Quentin Roosevelt Blvd.
Garden City, NY 11530
Tel: (516) 357-3700
About Central Leasing
Midland Park, New Jersey-based Central Leasing Co. of NJ, LLC,
leases machinery and equipment. The Company filed for Chapter 11
bankruptcy protection (Bankr. D. N.J. Case No. 11-11917) on Jan.
24, 2011. Michael J. Muller, Esq., in New Jersey, serves as the
Debtor's bankruptcy counsel. The Debtor disclosed $12,212,082 in
assets and $10,229,575 in liabilities as of the Chapter 11 filing.
CENTRAL LEASING: Can Employ Michael Muller as Counsel
-----------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey has
granted Central Leasing Co., of NJ, LLC, permission to employ
Michael J. Muller, Esq., as its bankruptcy counsel.
The Bankruptcy Court is satisfied that Michael J. Muller, Esq.,
does not hold or represent an interest adverse to the Debtor or
its estate and that he is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code.
About Central Leasing
Midland Park, New Jersey-based Central Leasing Co. of NJ, LLC,
leases machinery and equipment. The Company filed for Chapter 11
bankruptcy protection (Bankr. D. N.J. Case No. 11-11917) on Jan.
24, 2011. The Debtor disclosed $12,212,082 in assets and
$10,229,575 in liabilities as of the Chapter 11 filing.
CHINA CENTURY: Faruqi & Faruqi Investigates Potential Wrongdoing
----------------------------------------------------------------
Faruqi & Faruqi, LLP, a national law firm concentrating on
investors rights, consumer rights and enforcement of federal
antitrust laws, is investigating potential wrongdoing at China
Century Dragon Media, Inc. Faruqi & Faruqi, LLP seeks to
determine whether China Century has violated federal securities
laws by issuing false and misleading financial statements to its
shareholders, in particular in connection with its May, 2010
private placement or its February 2011 public offering of its
common stock.
One March 28, 2011, China Century disclosed that its independent
auditor, MaloneBailey of Houston, had withdrawn its audit opinions
for 2008 and 2009 and formally resigned, the American Stock
Exchange had issued a delisting notice and the Securities and
Exchange Commission was investigating. MaloneBailey cited
discrepancies noted on customer confirmations and the auditor's
inability to directly verify the bank records. The auditor
believes that accounting irregularities that may create material
errors in previously disclosed financial statements may indicate
falsification of records. MaloneBailey's resignation led AMEX to
delist China Century's common stock and the SEC to initiate a
formal, nonpublic investigation into whether the Company had made
material misstatements or omissions concerning its financial
statements, including cash accounts and accounts receivable. The
SEC has served a subpoena for documents on China Century. In
response, China Century's Board claims to have formed a special
committee to investigate these matters.
About Faruqi & Faruqi, LLP
Faruqi & Faruqi, LLP -- http://www.faruqilaw.com/-- is a boutique
law firm, representing investors, consumers and companies in the
prosecution of claims under state corporate and consumer laws and
the federal securities and antitrust laws. The firm is focused on
providing exemplary legal services in complex litigation. Founded
in 1995, the firm maintains its principal office in New York City,
with offices in Delaware, California, Florida and Pennsylvania.
About China Century
China Century Dragon Media is a television advertising company in
China that primarily offers blocks of advertising time on certain
channels on China Central Television, the state television
broadcaster of China and China's largest television network. The
Company purchases, repackages and sells advertising time on
certain of the nationally broadcast television channels of CCTV.
CHINA INTELLIGENT: MaloneBailey Resigns Due to Accounting Fraud
---------------------------------------------------------------
China Intelligent Lighting and Electronics, Inc., announced on
March 29, 2011, that the Company's engagement with its registered
independent accounting firm, MaloneBailey LLP has been formally
terminated. On March 23, 2011, the Company provided notice of
termination to MaloneBailey as the Company's auditor, effective
immediately. On March 24, 2011, the Company received a notice of
resignation from MaloneBailey indicating that MaloneBailey is
terminating its engagement with the Company, effective
immediately. The Company has begun to seek to retain a new
auditor.
The Resignation Letter described MaloneBailey's resignation being
due to accounting fraud involving forging of the Company's
accounting records and forging bank statements, in addition to
other discrepancies identified in the Company's accounts
receivable. The Resignation Letter indicated that MaloneBailey
believed that the accounting records of the Company have been
falsified, which constitutes an illegal act. Furthermore,
MaloneBailey's letter notes that the discrepancies could indicate
a material error in previously issued financial statements. As a
result, MaloneBailey stated that it is unable to rely on
management's representations as they relate to previously issued
financial statements and it can no longer support its opinion
related to the Company's financial statements for the year ended
and as of Dec. 31, 2009.
On March 24, 2011, Michael Askew resigned as a member of the Board
of Directors of the Company, effective immediately, including his
position as the Chairman of the Company's Audit Committee.
Mr. Askew submitted his resignation to the Board via email on
March 24, 2011, approximately the twelve month anniversary of
appointment, indicating that his resignation was due to, among
other things, the circumstances relevant to his limited ability to
provide assistance and advice to the Company in the present
situation, including but not limited to the Board not seeking
Mr. Askew's input or professional services during his term on the
Board.
On March 24, 2011, the Company received a preliminary information
request from Amex requesting additional information. The Company
intends to fully cooperate with NYSE Amex regarding this matter.
The Company was also recently notified by the staff of the U.S.
Securities and Exchange Commission that it has initiated a formal,
nonpublic investigation into whether the Company had made material
misstatements or omissions concerning its financial statements,
including cash accounts and accounts receivable. The SEC has
informed the Company that the investigation should not be
construed as an indication that any violations of law have
occurred. On March 24, 2011, the SEC served the Company a
subpoena for documents relating to the matters under review by the
SEC. The Company is committed to cooperating with the SEC. It is
not possible at this time to predict the outcome of the SEC
investigation, including whether or when any proceedings might be
initiated, when these matters may be resolved or what, if any,
penalties or other remedies may be imposed.
In light of these events, the Board of Directors of the Company
has formed a Special Investigation Committee consisting of
independent members of the Board of Directors to launch an
investigation with respect to the concerns of MaloneBailey. The
Committee is authorized to retain experts and advisers, including
a forensic accounting firm and independent legal advisors, in
connection with its investigation. The Company does not intend to
provide further comment regarding the allegations until after the
conclusion of the Special Committee's investigation.
The Company expects that the filing of its Annual Report on Form
10-K for the year ended Dec. 31, 2010, will be delayed until
completion of the internal investigation, engagement of a new
auditor and audit of the Company's financial statements. The
Company is unable to provide an estimated date of filing of the
Form 10-K at this time.
About China Intelligent
China Intelligent Lighting and Electronics, Inc., is a China-based
company that provides a full range of lighting solutions,
including the design, manufacture, sales and marketing of high-
quality LED and other lighting products for the household,
commercial and outdoor lighting industries in China and
internationally. The Company currently offers over 1,000 products
that include LEDs, long life fluorescent lights, ceiling lights,
metal halide lights, super electric transformers, grille spot
lights, down lights, and recessed and framed lighting.
CLEARWIRE CORP: CFO and COO Acquire Common Shares
-------------------------------------------------
In a Form 4 filing with the U.S. Securities and Exchange
Commission, Hope F. Cochran, chief financial officer at Clearwire
Corp., disclosed that he acquired 100,000 shares of Class A common
stock of the Company on March 25, 2011. After the transaction,
Mr. Cochran beneficially owned 216,679 shares.
In a separate Form 4 filing with the SEC, Erik Prusch, chief
operating officer at Clearwire Corp., disclosed that he acquired
350,000 shares of Class A common stock of the Company on March 25,
2011. After the transaction, Mr. Prusch beneficially owned
631,813 shares.
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 reported a net loss of $2.30 billion on
$556.82 million of revenue for the year ended Dec. 31, 2010,
compared with a net loss of $1.25 billion on $274.46 million of
revenue during the prior year.
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.
The audit reports of Deloitte & Touche LLP, in Seattle,
Washington, on the Company's financial statements for 2009 and
2010 did not include a going concern qualification.
* * *
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 disclosure -- in its Form 10-Q
for quarter ended Sept. 30, 2010 -- 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.
COMMERCIAL VISIONS: Case Summary & 10 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Commercial Visions, LLC
3316 Old Hartford Rd
Lake Stevens, WA 98258
Bankruptcy Case No.: 11-13347
Chapter 11 Petition Date: March 24, 2011
Court: United States Bankruptcy Court
Western District of Washington (Seattle)
Judge: Karen A. Overstreet
Debtor's Counsel: Christine M. Tobin, Esq.
BUSH STROUT & KORNFELD LLP
601 Union St., Suite 5000
Seattle, WA 98101
Tel: (206) 292-2110
E-mail: ctobin@bskd.com
Scheduled Assets: $141,389
Scheduled Debts: $3,788,969
A list of the Company's 10 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/wawb11-13347.pdf
The petition was signed by Mark Verbarendse, member.
CONTESSA PREMIUM: Creditors Panel Taps Arent Fox as Counsel
-----------------------------------------------------------
The official committee of unsecured creditors in the bankruptcy
case of Contessa Premium Foods, Inc., seeks permission from the
Bankruptcy Court to retain as bankruptcy counsel:
Andy Kong, Esq.
Aram Ordubegian, Esq.
M. Douglas Flahaut, Esq.
Mette H. Kurth, Esq.
ARENT FOX LLP
555 W Fifth St Suite 4800
Los Angeles, CA 90013
Tel: 213-443-7554
Fax: 213-629-7401
E-mail: Kong.Andy@ArentFox.com
ordubegian.aram@arentfox.com
flahaut.douglas@arentfox.com
kurth.mette@arentfox.com
- and -
Katie A. Lane, Esq.
ARENT FOX LLP
1050 Connecticut Ave
Washington, DC 20036-5339
Tel: 202-828-3422
Fax: 202-857-6395
E-mail: lane.katie@arentfox.com
Arent Fox's hourly rates are:
Partners $500-$835
Of Counsel $480-$795
Associates $290-$540
Paraprofessionals $155-$285
Arent Fox did not receive a retainer with respect to its
representation of the Committee.
Ms. Kurth attests that Arent Fox does not hold or represent an
interest adverse to the Committee and that it is a "disinterested
person" within the meaning of Sec. 101(14) of the Bankruptcy Code
as required by Sec. 327(a).
U.S. Trustee Peter C. Anderson appointed five members to the
Creditors Committee on Feb. 8:
1. B and D Foods
c/o Timothy B. Andersen, President
3494 S. TK Avenue
Boise, ID 83705
Tel: 208-344-1183 ext. 101
Fax: 208-344-6825
E-mail: tanderson@banddfoods.net
2. BrucePac
c/o Glen Golomski, President/CEO
811 North 1 st Street
Silverton, OR 97381
Tel: 503-874-3022
Fax: 503-874-3015
E-mail: ggolomski@brucepac.com
3. Dedeaux Properties, LLC.
c/o Robert Santich, Mgr & Executive V.P.
c/o Ashok Aggarwal, Sr. V.P. Finance
1430 S. Eastman Avenue
Los Angeles, CA 90023
Tel: 323-981-8100
Fax: 323-981-8234
E-mail: rsantich@dartentities.com
aaggarwal@dartentities.com
4. Pacific Southwest Container
c/o James D. Mayol, Secretary/General Counsel
P.O. Box 3049
Modesto, CA 95353
Tel: 209-544-9555
Fax: 209-544-9875
E-mail: jmayol@mblaw.com
5. Sage V Foods, Inc.
c/o Victor P. Vegas, President
12100 Wilshire Blvd., Suite 605
Los Angeles, CA 90025
Tel: 310-820-4496 ext. 1
Fax: 310-820-2559
E-mail: pvegas@sagevfoods.com
About Contessa Premium Foods
San Pedro, California-based Contessa Premium Foods, Inc., fka ZB
Industries, Inc., and Contessa Food Products, Inc., provides farm
raised shrimp, convenience meals, stir-fry vegetables, and other
frozen food products that are marketed and sold primarily in the
United States and to a lesser extent in Canada, Europe, Asia, and
Mexico. It divides its business into two internal groups:
Contessa Seafood, which includes its seafood items, and Contessa
"Green Cuisine," which includes all other fruit, vegetable and
complete meal blends.
Contessa Premium filed for Chapter 11 bankruptcy protection
(Bankr. C.D. Calif. Case No. 11-13454) on Jan. 26, 2011. Craig A.
Wolfe, Esq., at Kelley Drye & Warren LLP, and Jeffrey W. Dulberg,
Esq., and Scotta E. McFarland, Esq., at Pachulski Stang Ziehl &
Jones LLP, serve as the Debtor's bankruptcy counsel. Scouler &
Company, LLC, serves as financial advisors. The Debtor scheduled
$49,370,438 in total assets and $35,305,907 in total liabilities.
Secured lender Wells Fargo Bank, N.A. is represented by:
John Francis Hilson, Esq.
Connie L. Chilton, Esq.
Cynthia Cohen, Esq.
PAUL HASTINGS JANOFSKY & WALKER
515 South Flower St., 25th Floor
Los Angeles, CA 90071
Tel: (213) 683-6300
Fax: (213) 996-3300
E-mail: johnhilson@paulhastings.com
conniechilton@paulhastings.com
cynthiacohen@paulhastings.com
Secured lender General Electric Capital Corp. is represented by:
Harvey S. Schochet, Esq.
Peter L. Isola, Esq.
DAVIS WRIGHT TREMAINE LLP
505 Montgomery Street, Suite 800
San Francisco, CA 94111
Tel: 415-276-6507
Fax: 415-276-6599
E-mail: harveyschochet@dwt.com
peterisola@dwt.com
CONTESSA PREMIUM: Creditors Panel Hires FTI as Fin'l Consultants
----------------------------------------------------------------
The official committee of unsecured creditors in the bankruptcy
case of Contessa Premium Foods, Inc., seeks permission from the
Bankruptcy Court to retain FTI Consulting Inc. as its financial
consultants. The Committee will also look to FTI to negotiate
with the Debtor and its secured creditors related to various
bankruptcy issues.
FTI's M. Freddie Reiss and Matthew Pakkala lead the engagement.
Messrs. Reiss and Pakkala bill $895 and $730 an hour,
respectively, for their services. As an accommodation to the
Committee, FTI agreed to a reduced rate charged of $595 for
Mr. Pakkala. Other FTI professionals that may provide services to
the Committee and their hourly rates are:
Senior managing directors $780-$895
Directors/managing directors $560-$745
Consultants/senior consultants $280-$530
Administration/paraprofessionals $115-$230
Mr. Reiss disclosed that FTI previously provided expert testimony
on behalf of Contessa in a litigation matter. The FTI individual
who provided testimony was not connected to the firm's Los Angeles
office, which is providing services to the Committee, and is no
longer connected to the firm. Mr. Reiss attests that FTI does not
hold or represent an interest adverse to the Committee and that it
is a "disinterested person" within the meaning of Sec. 101(14) of
the Bankruptcy Code as required by Sec. 327(a).
About Contessa Premium Foods
San Pedro, California-based Contessa Premium Foods, Inc., fka ZB
Industries, Inc., and Contessa Food Products, Inc., provides farm
raised shrimp, convenience meals, stir-fry vegetables, and other
frozen food products that are marketed and sold primarily in the
United States and to a lesser extent in Canada, Europe, Asia, and
Mexico. It divides its business into two internal groups:
Contessa Seafood, which includes its seafood items, and Contessa
"Green Cuisine," which includes all other fruit, vegetable and
complete meal blends.
Contessa Premium filed for Chapter 11 bankruptcy protection
(Bankr. C.D. Calif. Case No. 11-13454) on Jan. 26, 2011. Craig A.
Wolfe, Esq., at Kelley Drye & Warren LLP, and Jeffrey W. Dulberg,
Esq., and Scotta E. McFarland, Esq., at Pachulski Stang Ziehl &
Jones LLP, serve as the Debtor's bankruptcy counsel. Scouler &
Company, LLC, serves as financial advisors. The Debtor scheduled
$49,370,438 in total assets and $35,305,907 in total liabilities.
An official committee of unsecured creditors has been appointed in
the case, represented by lawyers at Arent Fox LLP.
Secured lender Wells Fargo Bank, N.A. is represented by attorneys
at Paul Hastings Janofsky & Walker. Secured lender General
Electric Capital Corp. is represented by lawyers at Davis Wright
Tremaine LLP.
CONTESSA PREMIUM: Has Court OK to Employ Scouler as Fin'l Advisor
-----------------------------------------------------------------
Contessa Premium Foods, Inc., won permission from the Bankruptcy
Court to employ Scouler & Company, LLC, as financial advisor,
effective as of its bankruptcy-filing date.
Daniel Scouler leads the engagement. Mr. Scouler attests that his
firm does not hold or represent an interest adverse to the
Debtor's estate and that it is a "disinterested person" within the
meaning of Sec. 101(14) of the Bankruptcy Code as required by Sec.
327(a).
Meanwhile, the Debtor awaits approval of a separate request to
employ Pachulski Stang Ziehl & Jones LLP as its California and
conflicts counsel.
About Contessa Premium Foods
San Pedro, California-based Contessa Premium Foods, Inc., fka ZB
Industries, Inc., and Contessa Food Products, Inc., provides farm
raised shrimp, convenience meals, stir-fry vegetables, and other
frozen food products that are marketed and sold primarily in the
United States and to a lesser extent in Canada, Europe, Asia, and
Mexico. It divides its business into two internal groups:
Contessa Seafood, which includes its seafood items, and Contessa
"Green Cuisine," which includes all other fruit, vegetable and
complete meal blends.
Contessa Premium filed for Chapter 11 bankruptcy protection
(Bankr. C.D. Calif. Case No. 11-13454) on Jan. 26, 2011. Craig A.
Wolfe, Esq., at Kelley Drye & Warren LLP, and Jeffrey W. Dulberg,
Esq., and Scotta E. McFarland, Esq., at Pachulski Stang Ziehl &
Jones LLP, serve as the Debtor's bankruptcy counsel. Scouler &
Company, LLC, serves as financial advisors. The Debtor scheduled
$49,370,438 in total assets and $35,305,907 in total liabilities.
An official committee of unsecured creditors has been appointed in
the case, represented by lawyers at Arent Fox LLP.
Secured lender Wells Fargo Bank, N.A. is represented by attorneys
at Paul Hastings Janofsky & Walker. Secured lender General
Electric Capital Corp. is represented by lawyers at Davis Wright
Tremaine LLP.
CONTESSA PREMIUM: Files Schedules of Assets and Liabilities
-----------------------------------------------------------
Contessa Premium Foods, Inc., filed with the Bankruptcy Court its
schedules of assets and liabilities, disclosing:
NAME OF SCHEDULE ASSETS LIABILITIES
---------------- ------ -----------
A - Real Property N/A
B - Personal Property $49,370,438
C - Property Claimed
as Exempt N/A
D - Creditors Holding
Secured Claims $26,098,000
E - Creditors Holding
Unsecured Priority
Claims $297,903
F - Creditors Holding
Unsecured
Nonpriority Claims $8,910,003
------ -----------
TOTAL $49,370,438 $35,305,907
About Contessa Premium Foods
San Pedro, California-based Contessa Premium Foods, Inc., fka ZB
Industries, Inc., and Contessa Food Products, Inc., provides farm
raised shrimp, convenience meals, stir-fry vegetables, and other
frozen food products that are marketed and sold primarily in the
United States and to a lesser extent in Canada, Europe, Asia, and
Mexico. It divides its business into two internal groups:
Contessa Seafood, which includes its seafood items, and Contessa
"Green Cuisine," which includes all other fruit, vegetable and
complete meal blends.
Contessa Premium filed for Chapter 11 bankruptcy protection
(Bankr. C.D. Calif. Case No. 11-13454) on Jan. 26, 2011. Craig A.
Wolfe, Esq., at Kelley Drye & Warren LLP, and Jeffrey W. Dulberg,
Esq., and Scotta E. McFarland, Esq., at Pachulski Stang Ziehl &
Jones LLP, serve as the Debtor's bankruptcy counsel. Scouler &
Company, LLC, serves as financial advisors. The Debtor scheduled
$49,370,438 in total assets and $35,305,907 in total liabilities.
An official committee of unsecured creditors has been appointed in
the case, represented by lawyers at Arent Fox LLP.
Secured lender Wells Fargo Bank, N.A. is represented by attorneys
at Paul Hastings Janofsky & Walker. Secured lender General
Electric Capital Corp. is represented by lawyers at Davis Wright
Tremaine LLP.
CORUS BANKSHARES: Exclusivity Extension Hearing on March 31
-----------------------------------------------------------
The Bankruptcy Court will convene a hearing on March 31, 2011, at
10:00 a.m. C.T., to consider Corus Bankshares, Inc.'s request to
extend its exclusivity period pursuant to section 11221(d) of the
Bankruptcy Code through and including May 30, 2011.
In seeking an extension, Corus explains that one of the primary
challenges in developing a plan in its chapter 11 case was the
lack of an active economic stakeholder in the Debtor's capital
structure. Despite this challenge, Corus said it has worked
diligently to develop, file, and formulate the Debtor's Amended
Plan Under Chapter 11 of the Bankruptcy Code with the official
committee of unsecured creditors.
Recently, however, Tricadia Capital Management, LLC and certain of
its affiliates, along with other investment funds that specialize
in distressed debt, purchased approximately $166.6 million of the
Debtor's trust originated preferred securities. As a result, the
Debtors now have economic stakeholders with which to negotiate.
Tricadia has requested some minor modifications to the Plan to
protect its investment. The Debtor thus seeks an extension of its
exclusive period to agree on consensual modifications to the Plan
with the Tricadia Group and the Committee.
Although the Tricadia Group generally supports the structure of
the Plan, 13 holders of the Debtor's TOPrS, including Tricadia,
have voted to reject the Plan as currently drafted. As counsel to
the Committee stated at the March 15, 2011 status conference,
after Tricadia and the other TOPrS holders voted against the Plan,
"[i]t became apparent that we weren't to going to be able to
confirm the [P]lan . . . without a huge fight. We weren't going
to be able to confirm that [P]lan in the face of those 100 million
plus of no votes .
The Tricadia Group, however, has indicated its members will change
their votes to support the Plan when their few concerns have been
addressed. As a result, the negotiation and incorporation of the
Tricadia Group's concerns will allow both confirmation of the Plan
and satisfy the concerns of the Committee's constituents, the
holders of the TOPrS.
Addressing the Tricadia Group's concerns and winning the votes of
the holders of the TOPrS will result in a minimal delay to
confirming a plan. Because the Tricadia Group acquired a
significant position in TOPrS debt recently, the Tricadia Group
required time to evaluate the Plan and potential alternatives to
the Plan. After retaining counsel and evaluating potential
restructuring options, including repeated discussions with counsel
to the Committee and FTI Consulting, Inc., the Committee's
financial advisors, Tricadia made its formal proposal for Plan
modifications to the Debtor and the Committee on the evening of
March 14, 2011. The Debtor estimates that, at most, the total
delay of the confirmation hearing as a result of the Tricadia
Group's involvement in plan negotiations will be a matter of weeks
-- a minor delay to reach a consensual plan given the emergence of
the Debtor's new stakeholders and to allow the Committee to
satisfy its fiduciary duties to the unsecured creditors, including
the Tricadia Group.
The Debtor believes Tricadia's proposed changes are minor. The
proposed changes do not affect the architecture or structure of
the Plan, and would not affect the Plan recoveries of any of the
Debtor's stakeholders. In fact, Tricadia's proposed changes
primarily address the identity of, and the selection process for,
the Plan Administrator and the Plan Committee. Without these
minor changes, it would be more challenging for the Debtor to
confirm the Plan on a consensual basis. The Debtor does not
believe that these few changes warrant resolicitation of the Plan.
Corus said the estate will not be harmed by this brief delay.
First, the Debtor has recently enjoyed a significant return on one
of its loan participation investments that has prevented any
material loss in value during the last five months of this chapter
11 case. In fact, in connection with this fruitful loan
participation investment, the Debtor has received approximately
$2.5 million in cash since November 2010, and anticipates
receiving another $162,000 this month. In addition, as case
activity has diminished since the filing and solicitation
of the Plan, the Debtor's professional fees have dropped
substantially and will not drain significant value from the
Debtor's estate during this brief delay.
The Debtor emphasizes that the Plan modifications are minor and
that the resulting delay will be brief. However, currently, the
exclusive period under section 1121(c)(3) to agree on
modifications to the Plan will expire on April 1, 2011. Without
an extension, the Exclusivity Period will expire, presenting a
risk of undue interference and disruption to the Debtor's plan
confirmation process.
About Corus Bankshares, Inc.
Chicago, Illinois-based Corus Bankshares, Inc., is a bank holding
company. Its lone operating unit, Corus Bank, N.A., was closed
on September 11, 2009, by regulators, and the Federal Deposit
Insurance Corporation was named receiver. To protect the
depositors, the FDIC entered into a purchase and assumption
agreement with MB Financial Bank, National Association, Chicago,
Illinois, to assume all of the deposits of Corus Bank.
The Company sought Chapter 11 protection (Bankr. N.D. Ill.
Case No. 10-26881) on June 15, 2010, disclosing $314,145,828 in
assets and $532,938,418 in liabilities as of the Chapter 11
filing.
Kirkland & Ellis LLP's James H.M. Sprayregen, Esq., David R.
Seligman, Esq., and Jeffrey W. Gettleman, Esq., serve as the
Debtor's bankruptcy counsel. Kinetic Advisors is the Company's
restructuring advisor. Plante & Moran is the Company's auditor
and accountant. Kilpatrick Stockton LLP's Todd Meyers, Esq., and
Sameer Kapoor, Esq.; and Neal Gerber & Eisenberg LLP's Mark
Berkoff, Esq., Deborah Gutfeld, Esq., and Nicholas M. Miller,
Esq., represent the official committee of unsecured creditors.
CREEKSIDE DEVELOPMENT: Case Summary & 4 Largest Unsec. Creditors
----------------------------------------------------------------
Debtor: Creekside Development, LLC
9190 Double Diamond Parkway
Reno, NV 89521
Bankruptcy Case No.: 11-50949
Chapter 11 Petition Date: March 25, 2011
Court: United States Bankruptcy Court
District of Nevada (Reno)
Judge: Bruce T. Beesley
Debtor's Counsel: Stephen R. Harris, Esq.
BELDING, HARRIS & PETRONI, LTD
417 W Plumb Ln
Reno, NV 89509
Tel: (775) 786-7600
Fax: (775) 786-7764
E-mail: steve@renolaw.biz
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $10,000,001 to $50,000,000
A list of the Company's four largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/nvb11-50949.pdf
The petition was signed by Jaffra A. Masad, manager.
Debtor-affiliate that filed separate Chapter 11 petition:
Petition
Debtor Case No. Date
------ -------- ----
Waltham Way Development, LLC 11-50948 03/25/11
CROSS COUNTY: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Cross County National Associates, LP
dba Cross County Mall
2301 Ohio Drive, Suite 208
Plano, TX 75093
Bankruptcy Case No.: 11-40915
Chapter 11 Petition Date: March 28, 2011
Court: U.S. Bankruptcy Court
Eastern District of Texas (Sherman)
Debtor's Counsel: John P. Lewis, Jr., Esq.
1412 Main Street, Suite 210
Dallas, TX 75202
Tel: (214) 742-5925
Fax: (214) 742-5928
E-mail: jplewisjr@mindspring.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Craig E. Landess, vice president of
general partner.
DELTA AIR: Delta, Air France Consider Bid for Virgin Atlantic
-------------------------------------------------------------
Delta Air Lines, Inc. and Air France-KLM are considering a joint
bid for Virgin Atlantic Airways, Ltd., Bloomberg News reported on
February 20, 2011. The Companies have hired Goldman Sachs Group,
Inc. as their adviser.
About Delta Air Lines
Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) --
http://www.delta.com/or http://www.nwa.com/-- provides scheduled
air transportation for passengers and cargo throughout the United
States, and around the world. The Company's route network is
centered on the hub system it operate at airports in Atlanta,
Cincinnati, Detroit, Memphis, Minneapolis/St. Paul, New York-JFK,
Salt Lake City, Paris-Charles de Gaulle, Amsterdam and Tokyo-
Narita. The hub operations include flights, which gather and
distribute traffic from markets in the geographic region
surrounding the hub to domestic and international cities and to
other hubs. The network is supported by a fleet of aircraft, which
is varied in terms of size and capabilities. On Dec. 31,
2009, the Company's wholly owned subsidiary Northwest Airlines,
Inc., merged with and into Delta. The wholly owned subsidiary of
the Company is Northwest Airlines Corporation.
Northwest and 12 affiliates filed for Chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).
On May 21, 2007, the Court confirmed the Northwest Debtors'
amended plan. That amended plan took effect May 31, 2007.
Delta and 18 affiliates filed for Chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall
S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta
Debtors in their restructuring efforts. On April 25, 2007, the
Court confirmed the Delta Debtors' plan. That plan became
effective on April 30, 2007.
(Bankruptcy Creditors Service Inc. publishes Delta Air Lines
Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000).
* * *
Delta Air Lines and Northwest Airlines carry a 'B/Stable/--'
corporate ratings from Standard & Poor's. They also continue to
carry 'B2' corporate family ratings from Moody's and "B-" LT
Issuer Default rating from Fitch.
S&P said at the end of February 2011 that its ratings on Atlanta,
Ga.-based Delta Air Lines Inc. reflect its highly leveraged
financial profile, with significant intermediate-term debt
maturities, and the risks associated with participation in the
price-competitive, cyclical, and capital-intensive airline
industry. The ratings also incorporate the reduced debt load and
operating costs Delta achieved while in Chapter 11 in 2005-2007,
and its enhanced competitive position and synergistic
opportunities associated with its 2008 merger with Northwest
Airlines Corp. (parent of Northwest Airlines Inc.), with the two
airlines fully integrated in December 2009. S&P characterize
Delta's business risk profile as weak and its financial risk
profile as highly leveraged.
DELTA AIR: Faces Passenger Lawsuit for Unpaid EU Compensation
-------------------------------------------------------------
Delta Air Lines, Inc. defends a lawsuit filed by passengers in a
U.S. courthouse in Chicago for allegedly not paying a European
Union-mandated compensation after three-hour delays or flight
cancellations, Bloomberg News reported on February 4, 2011.
E.U. regulation 261 of 2004 requires airlines to pay passengers
each time their flights to or from an E.U. member state's airport
are canceled or delayed more than three hours. Regulation 261
was adopted by the European parliament in February 2004 with the
stated intention of "establishing common rules for a denied
boarding compensation system" for travelers taking regularly
scheduled flights.
About Delta Air Lines
Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) --
http://www.delta.com/or http://www.nwa.com/-- provides scheduled
air transportation for passengers and cargo throughout the United
States, and around the world. The Company's route network is
centered on the hub system it operate at airports in Atlanta,
Cincinnati, Detroit, Memphis, Minneapolis/St. Paul, New York-JFK,
Salt Lake City, Paris-Charles de Gaulle, Amsterdam and Tokyo-
Narita. The hub operations include flights, which gather and
distribute traffic from markets in the geographic region
surrounding the hub to domestic and international cities and to
other hubs. The network is supported by a fleet of aircraft, which
is varied in terms of size and capabilities. On Dec. 31,
2009, the Company's wholly owned subsidiary Northwest Airlines,
Inc., merged with and into Delta. The wholly owned subsidiary of
the Company is Northwest Airlines Corporation.
Northwest and 12 affiliates filed for Chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).
On May 21, 2007, the Court confirmed the Northwest Debtors'
amended plan. That amended plan took effect May 31, 2007.
Delta and 18 affiliates filed for Chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented
the Delta Debtors in their restructuring efforts. On April 25,
2007, the Court confirmed the Delta Debtors' plan. That plan
became effective on April 30, 2007.
(Bankruptcy Creditors Service Inc. publishes Delta Air Lines
Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000).
* * *
Delta Air Lines and Northwest Airlines carry a 'B/Stable/--'
corporate ratings from Standard & Poor's. They also continue to
carry 'B2' corporate family ratings from Moody's and "B-" LT
Issuer Default rating from Fitch.
S&P said at the end of February 2011 that its ratings on Atlanta,
Ga.-based Delta Air Lines Inc. reflect its highly leveraged
financial profile, with significant intermediate-term debt
maturities, and the risks associated with participation in the
price-competitive, cyclical, and capital-intensive airline
industry. The ratings also incorporate the reduced debt load and
operating costs Delta achieved while in Chapter 11 in 2005-2007,
and its enhanced competitive position and synergistic
opportunities associated with its 2008 merger with Northwest
Airlines Corp. (parent of Northwest Airlines Inc.), with the two
airlines fully integrated in December 2009. S&P characterize
Delta's business risk profile as weak and its financial risk
profile as highly leveraged.
DELTA AIR: Plans to Deal with Indian Jet Airways
------------------------------------------------
Delta Air Lines and its French partner Air France-KLM are
reportedly interested in an Indian Jet Airways alliance, Macau
News reports on March 14, 2011.
India is being looked upon by Delta to be included in its Sky
Team program.
About Delta Air Lines
Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) --
http://www.delta.com/or http://www.nwa.com/-- provides scheduled
air transportation for passengers and cargo throughout the United
States, and around the world. The Company's route network is
centered on the hub system it operate at airports in Atlanta,
Cincinnati, Detroit, Memphis, Minneapolis/St. Paul, New York-JFK,
Salt Lake City, Paris-Charles de Gaulle, Amsterdam and Tokyo-
Narita. The hub operations include flights, which gather and
distribute traffic from markets in the geographic region
surrounding the hub to domestic and international cities and to
other hubs. The network is supported by a fleet of aircraft, which
is varied in terms of size and capabilities. On Dec. 31,
2009, the Company's wholly owned subsidiary Northwest Airlines,
Inc., merged with and into Delta. The wholly owned subsidiary of
the Company is Northwest Airlines Corporation.
Northwest and 12 affiliates filed for Chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).
On May 21, 2007, the Court confirmed the Northwest Debtors'
amended plan. That amended plan took effect May 31, 2007.
Delta and 18 affiliates filed for Chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented
the Delta Debtors in their restructuring efforts. On April 25,
2007, the Court confirmed the Delta Debtors' plan. That plan
became effective on April 30, 2007.
(Bankruptcy Creditors Service Inc. publishes Delta Air Lines
Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000).
* * *
Delta Air Lines and Northwest Airlines carry a 'B/Stable/--'
corporate ratings from Standard & Poor's. They also continue to
carry 'B2' corporate family ratings from Moody's and "B-" LT
Issuer Default rating from Fitch.
S&P said at the end of February 2011 that its ratings on Atlanta,
Ga.-based Delta Air Lines Inc. reflect its highly leveraged
financial profile, with significant intermediate-term debt
maturities, and the risks associated with participation in the
price-competitive, cyclical, and capital-intensive airline
industry. The ratings also incorporate the reduced debt load and
operating costs Delta achieved while in Chapter 11 in 2005-2007,
and its enhanced competitive position and synergistic
opportunities associated with its 2008 merger with Northwest
Airlines Corp. (parent of Northwest Airlines Inc.), with the two
airlines fully integrated in December 2009. S&P characterize
Delta's business risk profile as weak and its financial risk
profile as highly leveraged.
DOLLAR GENERAL: S&P Gives Positive Outlook, Affirms 'BB' Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it revised the
outlook on Goodlettsville, Tenn.-based Dollar General Corp. to
positive from stable. S&P also affirmed all the ratings on the
company, including S&P's 'BB' corporate credit rating.
"The ratings on Dollar General reflect S&P's expectation that the
company's value-focused merchandising strategy and continued store
expansion will sustain the positive operating momentum and
contribute to further improvement in credit measures," said
Standard & Poor's credit analyst Ana Lai.
DOMTAR CORP: To Permanently Shut Down One Paper Machine in Ashdown
------------------------------------------------------------------
Domtar Corporation announced on March 29, 2011, that, no later
than July 1, 2011, it will permanently shut down one of four paper
machines at its Ashdown, Arkansas pulp and paper mill. This will
reduce Domtar's annual uncoated freesheet paper production
capacity by approximately 125,000 short tons. The mill's
workforce will be reduced by approximately 110 employees.
"Domtar is committed to keeping a balance between its supply and
its customer demand. Because secular demand decline in North
America continues, we must permanently reduce our uncoated
freesheet paper production capacity," said John D. Williams,
President and Chief Executive Officer of Domtar. "I want to thank
affected employees for their efforts, and recognize all Domtar
Ashdown mill employees for their hard work and continued focus on
safety," added Mr. Williams.
Following the shutdown, the Ashdown mill will continue to operate
three fiber lines, a pulp dryer and three paper machines, and
employ approximately 940 people. The mill will have an annual
production capacity of approximately 810,000 metric tons of pulp
and approximately 780,000 short tons of paper.
The closure will result in an aggregate pre-tax charge to earnings
of approximately $80 million, which includes an estimated $77
million in non-cash charges relating to the accelerated
depreciation of the carrying amounts of manufacturing equipment
and the write-off of related spare parts and $3 million related to
other costs. Of the estimated total pre-tax charge of
approximately $80 million, $6 million is expected to be recognized
in the first quarter of 2011 and $74 million is expected to be
incurred in the second quarter of 2011.
About Domtar Corp
Domtar Corporation (NYSE/TSX:UFS) -- http://www.domtar.com/-- is
the largest integrated manufacturer and marketer of uncoated
freesheet paper in North America and the second largest in the
world based on production capacity, and is also a manufacturer of
papergrade, fluff and specialty pulp. The Company designs,
manufactures, markets and distributes a wide range of business,
commercial printing and publishing as well as converting and
specialty papers including recognized brands such as Cougar(R),
Lynx(R) Opaque Ultra, Husky(R) Opaque Offset, First Choice(R) and
Domtar EarthChoice(R) Office Paper, part of a family of
environmentally and socially responsible papers. Domtar owns and
operates ArivaTM, an extensive network of strategically located
paper distribution facilities. The Company employs approximately
8,500 people.
As reported in the Troubled Company Reporter on Dec. 1, 2010,
DBRS upgraded the Issuer Rating of Domtar Corporation (Domtar or
the Company) to BB (high) from BB and its Senior Unsecured Notes
rating to BB (high) from BB (low). DBRS has also upgraded the
rating of Domtar Inc. to BB (high) from BB (low). The trends on
the ratings are Stable.
The upgrade of Domtar's Issuer Rating reflects the Company's
progress in de-leveraging its balance sheet and strengthening its
financial profile. In addition, the Company has strengthened its
business risk profile by rightsizing its manufacturing footprint
and improving its cost competitiveness. In the next 12 to 18
months, DBRS expects the Company's operating results to stabilize
near current levels amid a slow recovery in the general economy.
Unless the Company generates operating results well above our
expectations and significantly strengthens its financial profile
from current levels, the ratings will remain unchanged in the near
term. Pursuant to the "DBRS Rating Methodology for Leveraged
Finance," a recovery rating of RR1 (90% to 100% recovery) has been
assigned to the Company's Senior Secured Credit Facility, which
results in the BBB (low) instrument rating, and recovery
ratings of RR2 (70% to 90% recovery) have been assigned to the
Company's Senior Unsecured Notes and to Domtar Inc.'s Unsecured
Notes and Debentures, which result in BB (high) instrument
ratings.
DRYSHIPS INC: Q4 Results Today; Conference Call Tomorrow
--------------------------------------------------------
DryShips Inc. announced that it will release its results for the
fourth quarter 2010 after the market closes in New York on
Wednesday, March 30, 2011.
DryShips' management team will host a conference call the
following day on Thursday, March 31, 2011, at 8:00 a.m. EDT to
discuss the Company's financial results.
Conference Call details
Participants should dial into the call 10 minutes before the
scheduled time using the following numbers: 1(866) 819-7111 (from
the US), 0(800) 953-0329 (from the UK) or +(44) (0) 1452 542 301
(from outside the US). Please quote "DryShips."
A replay of the conference call will be available until April 2,
2011. The United States replay number is 1(866) 247-4222; from
the UK 0(800) 953-1533; the standard international replay number
is (+44) (0) 1452 550 000 and the access code required for the
replay is: 2133051#.
Slides and audio webcast
There will also be a simultaneous live webcast over the Internet,
through the DryShips Inc. Web site (www.dryships.com).
Participants to the live webcast should register on the Web site
approximately 10 minutes prior to the start of the webcast.
About DryShips Inc.
Based in Greece, DryShips Inc. -- http://www.dryships.com/--
-- owns and operates drybulk carriers and offshore oil
deep water drilling units that operate worldwide. As of September
10, 2010, DryShips owns a fleet of 40 drybulk carriers (including
newbuildings), comprising 7 Capesize, 31 Panamax and 2 Supramax,
with a combined deadweight tonnage of over 3.6 million tons and
6 offshore oil deep water drilling units, comprising of 2 ultra
deep water semisubmersible drilling rigs and 4 ultra deep water
newbuilding drillships.
DryShips's common stock is listed on the NASDAQ Global Select
Market where it trades under the symbol "DRYS".
The Company's balance sheet at Sept. 30, 2010, showed
US$5.80 million in total assets, US$1.90 million in total current
liabilities, US$1.10 million in total noncurrent liabilities, and
stockholders' equity of US$2.80 million.
On November 25, 2010, DryShips Inc. entered into a waiver letter
for its US$230.0 million credit facility dated September 10, 2007,
as amended, extending the waiver of certain covenants through
Dec. 31, 2010.
As reported in the Troubled Company Reporter on Sept. 29, 2010,
the Company said it is currently in negotiations with its lenders
to obtain waivers, waiver extensions or to restructure its debt.
As of June 30, 2010, the Company's theoretical exposure (current
portion of long-term debt less cash and cash equivalents less
restricted cash) amounted to US$761.4 million.
DYNEGY HOLDINGS: Moody's Lowers Corporate Credit Rating to 'Caa3'
-----------------------------------------------------------------
Moody's Investors Service lowered the ratings of Dynegy Holdings,
Inc., including its Corporate Family Rating and Probability of
Default Rating to Caa3 from Caa1 along with the ratings of various
affiliates. The rating outlook for DHI is negative.
Downgrades:
Issuer: Dynegy Holdings Inc.
-- Corporate Family Rating, Downgraded to Caa3 from Caa1
-- Probability of Default Rating, Downgraded to Caa3 from Caa1
-- Senior Secured Bank Credit Facility, Downgraded to B2, LGD1,
06% from B1, LGD1, 07%
-- Senior Unsecured Regular Bond/Debenture, Downgraded to Caa3,
LGD4, 58% from Caa2, LGD4, 60%
-- Multiple Seniority Shelf, Downgraded to (P)Caa3, (P)Ca from
(P)Caa2, (P)Caa3
Issuer: Dynegy Inc.
-- Multiple Seniority Shelf, Downgraded to (P)Ca, (P)Ca, (P)Ca
from (P)Caa3, (P)Caa3, (P)Caa3
Issuer: NGC Corporation Capital Trust I
-- Preferred Stock Preferred Stock, Downgraded to Ca from Caa3
Issuer: Roseton-Danskammer 2001
-- Senior Secured Pass-Through, Downgraded to Caa3, LGD4, 58%
from Caa2, LGD4, 60%
Issuer: Dynegy Capital Trust II
-- Preferred Stock Shelf, Downgraded to (P)Ca from (P)Caa3
Issuer: Dynegy Capital Trust III
-- Preferred Stock Shelf, Downgraded to (P)Ca from (P)Caa3
Ratings Rationale
"The two notch downgrade of DHI's CFR and PDR reflects the change
in corporate governance announced earlier this month, which
Moody's believe increases default risk for bondholders, coupled
with the weak financial prospects that are expected to continue",
said A.J. Sabatelle, Senior Vice President of Moody's.
The downgrade partly reflects the uncertainty around Dynegy Inc.'s
corporate governance, including the appointment of four new board
members, the departure of the company's CEO and CFO, and the fact
that DYN's existing board plans to not stand for reelection at the
shareholder's meeting in June. Of the four board members that
will comprise DYN's future board, two represent the interests of
Icahn Enterprises, which now has the option to own up to 19.9% of
DYN's common stock, while a third represents Seneca Capital,
another large shareholder. While information remains limited
about the long-term intentions of the board, Moody's believe that
default risk, through some form of distressed debt exchange, has
increased with this change in corporate governance. The downgrade
also considers Moody's expectations for the company's financial
metrics over the next several years which remain weak, given the
expected margins for electric prices and the need for the company
to complete certain environmental capital investments.
As discussed in previous research published by Moody's, the most
pressing near-term concern is the potential covenant default in
the company's credit facilities caused by the combination of a
higher interest coverage covenant threshold and an expected
decline in cash flow (EBITDA). A failure to address this issue
could lead to the termination of about 75% of the company's
current liquidity which is critical given the prospects for
negative free cash flow over the next few years. The rating
action incorporates Moody's expectation that DHI will be able
rectify the potential covenant violation in some way with its
banks which may eventually lead to more moderately sized
replacement borrowing arrangements for use during this down cycle.
Moody's view is based on the substantial collateral coverage that
exists at DHI which should help to facilitate an amendment or a
replacement of this facility. Moody's also believe that Icahn and
Seneca, as board members and as the largest shareholders, have an
economic vested interest in not having DYN file for bankruptcy
particularly since large refinancing risk does not occur until
June 2015. Given this four year timeframe for the market dynamics
to change, Moody's believe that a core element of the new board's
strategy to enhance shareholder value may include the purchase of
a substantial amount of DHI debt at a discount in order to de-
lever the company in the hope that market economics will improve
by 2015.
From a recovery perspective, Moody's expects DHI to provide
similar recovery prospects as other global corporate enterprises.
While DYN's assets have a long life and cannot be easily
replicated, DYN operates a capital intensive commodity business
and like other commodity businesses, many of the factors that
influence valuation and overall credit quality remain outside of
the control of management, which in the case of unregulated power,
includes weather and the price of natural gas. Moreover, DHI's
operations are heavily dependent upon the performance of its
Midwest operations, where margins continue to be weaker than other
areas of the US due to a more tepid economic recovery and the
preponderance of nuclear generation in that part of the country.
Based upon Moody's Loss Given Default methodology and Moody's view
of average recovery prospects across the company, Moody's believe
that company's CFR and PDR should remain the same at Caa3.
DHI's speculative liquidity rating of SGL-4 reflecs Moody's
concern about DHI's internal sources of liquidity over the next
four quarters given the continued generation of negative free cash
flow as the company completes the required environmental capital
spend on its Midwestern generation fleet. The SGL-4 factors in
the impact of a potential covenant breach in the company's credit
facilities which could result in the loss of a substantial portion
of the company's liquidity and a possible bankruptcy filing.
Moody's observe that DHI has been able to raise liquidity in the
past from a variety of asset sales and note the $1.36 billion
value that NRG Energy, Inc. placed on DYN's California and Maine
assets as a data point that supports the company's ability to
raise alternate liquidity, if necessary. Moody's further believes
that DYN's California assets may be worth more following the
tragic earthquake in Japan given the importance of the Diablo
Canyon nuclear plant to the power needs of the state and the
scrutiny that has begun and will likely continue on that plant as
it pursues its relicensing efforts.
Moody's continues to view DHI as being a financially distressed
company, given its highly levered capital structure relative to
its ability to generate sustainable cash flow. The company's cash
flow generation is highly exposed to natural gas and power
commodity prices, which are expected to remain low over the next
several years. The continuing negative rating outlook also
factors in Moody's concern about the ultimate direction of the
company following the change in corporate governance, along with
the potential for a covenant violation in the company's credit
facilities.
Prospectively, ratings are unlikely to be upgraded over the
intermediate term horizon, largely due to Moody's expectations of
negative free cash flow for the next several years. Should DHI
address its near-term liquidity concerns, the rating and outlook
could stabilize. Longer-term, should natural gas and power
commodity prices and market heat rates improve materially, for a
sustained period of time, DHI's rating and rating outlook could
eventually, be upgraded.
Headquartered in Houston, Texas, DHI is an independent power
producer that owns a portfolio of more than 11,800 MW electric
generating assets. DHI is wholly-owned by Dynegy, Inc.
EASTMAN KODAK: ITC to Review ALJ's Determination on Patent Claim
----------------------------------------------------------------
The U.S. International Trade Commission issued a notice of its
determination to review in its entirety the initial determination
of the Administrative Law Judge in Eastman Kodak Company's Section
337 action against Apple Inc. and Research In Motion Limited. The
ALJ's initial determination found the Kodak patent claim at issue
invalid and not infringed. The ITC ordered additional briefing
from the parties on certain of the ALJ's findings.
The final decision in this case, based on the deliberation of the
full ITC, is expected by May 23, 2011.
As previously reported, on Jan. 14, 2010, Kodak filed a complaint
with the ITC against Apple and RIM for infringement of patents
related to digital camera technology. In the ITC case captioned,
In the Matter of Certain Mobile Telephones and Wireless
Communication Devices Featuring Digital Cameras and Components
Thereof, Kodak is seeking a limited exclusion order preventing
importation of infringing devices including iPHONES and camera
enabled BLACKBERRY devices.
About Eastman Kodak
Headquartered in Rochester, New York, Eastman Kodak Company
(NYSE:EK) -- http://www.kodak.com/-- provides imaging technology
products and services to the photographic and graphic
communications markets.
As of Dec. 31, 2010, the Company's balance sheet showed
$6.84 billion in total assets, $7.34 billion in total liabilities
and a $498 million deficit.
As reported by the Troubled Company Reporter on March 2, 2011,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Eastman Kodak to 'CCC' from 'B-'. S&P removed the
rating from CreditWatch, where S&P placed it with negative
implications on Jan. 26, 2011. The rating outlook is negative.
Issue-level ratings on the company's debt were also lowered and
removed from CreditWatch in conjunction with the corporate credit
rating change.
The 'CCC' corporate credit rating reflects S&P's expectation that
Eastman Kodak's pace of cash consumption will remain high over the
near term. It also reflects S&P's expectation of continued
secular volume decline 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 as vulnerable and support S&P's 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.
In the March 16, 2011 edition of the TCR, Fitch Ratings has
affirmed its 'CCC' Issuer Default Rating on Kodak. The ratings
and Negative Outlook reflect Kodak's continued struggles to gain
traction in its digital businesses as secular declines persist and
broaden to entertainment film within the traditional film
business.
EL POLLO: Vulnerable to Default, Says S&P; Ratings Cut to 'CC'
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
corporate credit rating on Costa Mesa, California-based El Pollo
Inc. to 'CC' from 'CCC'. The outlook is negative. The ratings
are unsolicited.
At the same time, S&P lowered issue-level rating on the company's
revolving credit facility to 'CCC' from 'B-'. The recovery rating
remains at '1', indicating S&P's expectation of very high (90% to
100%) recovery in the event of a payment default.
S&P also lowered the issue-level rating on the senior notes due
2012 to 'CCC-' from 'CCC+'. The recovery rating on these notes
remains at '2', indicating S&P's expectation of substantial (70%
to 90%) recovery in the event of a payment default. In addition,
S&P lowered the issue-level rating on the senior notes due 2013 to
'C' from 'CC', and the '6' recovery rating on the notes is
unchanged.
"The negative outlook reflects S&P's opinion that El Pollo Loco's
liquidity sources are unlikely to cover its cash uses," said
Standard & Poor's credit analyst Andy Sookram, "including the
mandatory redemption payment on the parent company (EPL
Intermediate Inc.) notes and interest payments coming due in
second-quarter 2011." S&P thinks the company is vulnerable to
default, and it may need to restructure its balance sheet.
ELLIPSO INC: Wants Claims in Suit vs. Mann Barred
-------------------------------------------------
Bankruptcy Judge S. Martin Teel, Jr., said he will grant the joint
motion of Ellipso, Inc. and the Chapter 11 trustee Wendell Webster
for a determination that any claims that depend on appealing the
judgment in Ellipso, Inc. v. Mann are barred, unless by April 4,
2011, the defendants file a motion for reconsideration of claims
under Federal Rules of Bankruptcy Procedure 3008 and 9024 or, in
the alternative, a Rule 9006 motion to file proofs of claim out of
time.
The joint motion addresses counterclaims of John Mann, Mann
Technologies LLC, and Robert Patterson as defendants in the civil
action of Ellipso, Inc. v. Mann that were dismissed by the
District Court and that are the subject of a pending appeal by
those defendants in the Court of Appeals. Even though the
Bankruptcy court granted relief from the automatic stay more than
a year ago to permit those defendants to pursue their appeal, the
defendants have failed to take any steps to pursue the appeal.
The joint motion effectively seeks a declaratory judgment that any
attempt to assert the dismissed counterclaims as claims in the
bankruptcy case under Chapter 11 of the Bankruptcy Code would be
barred.
A copy of the Bankruptcy Court's March 24, 2011 Memorandum
Decision and Order is available at http://is.gd/tIRQPUfrom
Leagle.com.
Ellipso, Inc., filed for Chapter 11 bankruptcy (Bankr. D. D.C.
Case No. 09-00148) on Feb. 25, 2009. Kermit A. Rosenberg, Esq. --
krosenberg@tighepatton.com -- at Tighe Patton Armstrong Teasdale,
PLLC, in Washington, DC, serves as the Debtor's counsel. In its
petition, the Debtor listed under $50,000 in assets and $1 million
to $10 million in debts.
ELLIPSO INC: Court Won't Reverse Ruling on Mann et al. Claims
-------------------------------------------------------------
Bankruptcy Judge S. Martin Teel, Jr., denied a request by Mann
Technologies, LLC, The Registry Solutions Company, John B. Mann,
and Robert B. Patterson to reconsider, alter or amend the Court's
decisions to disallow their claims (Claim Nos. 6, 7, 10, and 11).
Judge Teel said the motion is untimely under Federal Rule of
Bankruptcy Procedure 9023 and otherwise fails to state a basis for
relief under Rules 9024 and 3008.
A copy of the Court's March 23, 2011 Memorandum Decision is
available at http://is.gd/UkwBG8from Leagle.com.
Ellipso, Inc., filed for Chapter 11 bankruptcy (Bankr. D. D.C.
Case No. 09-00148) on February 25, 2009. Kermit A. Rosenberg,
Esq. -- krosenberg@tighepatton.com -- at Tighe Patton Armstrong
Teasdale, PLLC, in Washington, DC, serves as the Debtor's counsel.
In its petition, the Debtor listed under $50,000 in assets and
$1 million to $10 million in debts.
ELLIPSO INC: Castiel's Motion to Reconsider Fails Under FRBP 3008
-----------------------------------------------------------------
In an oral ruling on David Castiel's motion to reconsider the
disallowance of the bulk of his proof of claim, the Bankruptcy
Court noted that the motion was timely under Fed. R. Bankr. P.
9023. Nevertheless, Mr. Castiel failed to show cause under Rule
9023 because the evidence he now seeks to introduce was readily
available to him when the objection to claim was tried. The Court
neglected to address the motion to reconsider alternatively as a
motion under Fed. R. Bankr. P. 3008.
In a March 24, 2011 Memorandum Decision supplementing his oral
decision, Bankruptcy Judge S. Martin Teel Jr. held that Mr.
Castiel's motion for reconsideration under Rule 3008 failed to set
forth adequate cause for reconsideration. Even if Mr. Castiel is
proceeding in good faith, he fares no better under Rule 3008 than
under Rule 9023. The Court noted that Mr. Castiel had his
opportunity in a lengthy trial to present evidence to carry his
burden of proof to show that the unpaid compensation he claimed
was reasonable, and has not shown good reason why he could not
have presented then the evidence he seeks to introduce now via his
motion to reconsider. The creditor body ought not be put to the
burden of wrestling with evidence that was available and not
presented when Mr. Castiel put on his evidence at the trial of the
objection to his claim. This chapter 11 case has consumed an
inordinate amount of trial time, and reopening the evidence would
lead to further delay in the resolution of the case.
A copy of the Court's decision is available at http://is.gd/yOIfxc
from Leagle.com.
Ellipso, Inc., filed for Chapter 11 bankruptcy (Bankr. D. D.C.
Case No. 09-00148) on February 25, 2009. Kermit A. Rosenberg,
Esq. -- krosenberg@tighepatton.com -- at Tighe Patton Armstrong
Teasdale, PLLC, in Washington, DC, serves as the Debtor's counsel.
In its petition, the Debtor listed under $50,000 in assets and
$1 million to $10 million in debts.
FISHER ISLAND: Case Transferred to Judge A. Jay Cristol
-------------------------------------------------------
Fisher Island Investments, Inc.'s Chapter 11 bankruptcy case has
been transferred to Judge A. Jay Cristol. The case was previously
assigned to Judge Laurel M. Isicoff.
Solby+Westbrae Partners; 19 SHC, Corp.; Ajna Brands, Inc.;
601/1700 NBC, LLC; Axafina, Inc.; and Oxana Adler, LLM, filed an
involuntary Chapter 11 petition against Miami Beach, Florida-based
Fisher Island Investments, Inc. (Bankr. S.D. Fla. Case No. 11-
17047) on March 17, 2011.
On the same date, involuntary Chapter 11 petitions were also filed
against the Company's affiliates, Mutual Benefits Offshore Fund,
LTD (Bankr. S.D. Fla. Case No. 11-17051) and Little Rest Twelve,
Inc. (Bankr. S.D. Fla. Case No. 11-17061).
FISHER ISLAND: Petitioning Creditors Want Trustee to Take Over
--------------------------------------------------------------
Petitioning creditors Solby+Westbrae Partners; 19 SHC, Corp.; Ajna
Brands, Inc.; 601/1700 NBC, LLC; Axafina, Inc.; and Oxana Adler,
LLM, have asked the U.S. Bankruptcy Court for the Southern
District of Florida to authorize the appointment of a Chapter 11
interim trustee in the involuntary Chapter 11 bankruptcy case they
filed against Fisher Island Investments, Inc.; Mutual Benefits
Offshore Fund, Ltd.; and Little Rest Twelve, Inc.
The Petitioning Creditors request the appointment of an Interim
Trustee to take control and possession of the assets of the
Alleged Debtors pending a hearing on the involuntary petition or
the entry of an order for relief. The Petitioning Creditors
submit that absent the appointment of an Interim Trustee, there is
a substantial likelihood that the businesses and assets of the
Alleged Debtors will be further depleted and dissipated
completely.
Prior to the Petition Date, a dispute arose between the Alleged
Debtors and certain third parties who claim equity ownership in
the Alleged Debtors. Those third parties forcibly ejected the
legitimate management and the board of directors of the Alleged
Debtors from their various business premises without the benefit
of a court order. Currently, there are pending litigations in
Florida and New York touching upon some aspects of the dispute.
The Alleged Debtors believe the equity claims to be frivolous.
"However, the fact that the third parties presently have physical
possession of the Alleged Debtors' premises, and control of their
assets and resulting revenues, stands to prevent the Petitioning
Creditors, and any other creditor(s), from collecting their
legitimate debts. More importantly, upon information and belief,
the Alleged Debtors have never disputed, and do not now dispute,
any portion of their debt to the Petitioning Creditors, and the
Alleged Debtors are prepared to enter into repayment arrangements
with the Petitioning Creditors but for the third parties'
interference with and control over the Alleged Debtors, including
their business operations and revenues," the Petitioning Creditors
claim.
According to the Petitioning Creditors, the third parties'
physical control over the Alleged Debtors' assets has already
resulted in the potential depletion and/or dissipation of the
Alleged Debtors' estate. The Petitioning Creditors claim that the
third parties have previously attempted to sell certain properties
located on Fisher Island which were owned by the Alleged Debtor
Fisher Island. "But for the Alleged Debtors' last minute lis
pendens filings, the proposed sales most likely would have closed
with the resulting proceeds going directly to the third parties,"
the Petitioning Creditors state.
The Petitioning Creditors say that Little Rest operates a
successful restaurant in New York City which is producing ongoing
revenue presently not being used for the benefit of the Alleged
Debtor or their creditors. Little Rest is licensed by the New
York State Liquor Authority for the on-premises retail liquor
sale. The Petitioning Creditors believe that in the event a
licensed retailer under New York Law is subject to bankruptcy
proceedings the license is temporarily suspended and may be re-
instated at the request of a trustee in bankruptcy. "The liquor
license is a valued asset which should be preserved in the gap
period, and in so far as there is no immediate Trustee or Debtor
in Possession during the gap period, the pending ownership dispute
poses risk of loss to the value of the restaurant and the license.
The loss or suspension of the liquor license will pose significant
loss of revenue and value to the going concern business
operations," the Petitioning Creditors state.
With respect to Mutual Benefits, on April 24, 2010, the law firm
of Gusrae Kaplan Bruno & Nussbaum, which represents the third
parties claiming equity ownership in Mutual Benefits and the other
Alleged Debtors, filed a UCC financing statement against Mutual
Benefits' sole asset -- viatical insurance policies held by a
receiver of the now defunct Mutual Benefits Corp. -- and listing
itself as "secured party". The Petitioning Creditors believe that
this filing is an avoidable transfer and at a minimum an attempt
to divest Mutual Benefits of assets for the benefit of insiders at
the expense of creditors.
The Petitioning Creditors are represented by:
Chad P. Pugatch, Esq.
Craig A. Pugatch, Esq.
Rice Pugatch Robinson & Schiller, P.A.
101 N.E. Third Avenue, Suite 1800
Fort Lauderdale, FL 33301
Telephone: (954) 462-8000
Fax: (954) 462-4300
Solby+Westbrae Partners; 19 SHC, Corp.; Ajna Brands, Inc.;
601/1700 NBC, LLC; Axafina, Inc.; and Oxana Adler, LLM, filed an
involuntary Chapter 11 petition against Miami Beach, Florida-based
Fisher Island Investments, Inc. (Bankr. S.D. Fla. Case No. 11-
17047) on March 17, 2011.
On the same date, involuntary Chapter 11 petitions were also filed
against the Company's affiliates, Mutual Benefits Offshore Fund,
LTD (Bankr. S.D. Fla. Case No. 11-17051) and Little Rest Twelve,
Inc. (Bankr. S.D. Fla. Case No. 11-17061).
FISHERMAN'S WHARF: Court Confirms Reorganization Plan
-----------------------------------------------------
The Hon. Caryl E. Delano of the U.S. Bankruptcy Court for the
Middle District of Florida confirmed Fisherman's Wharf of Venice,
Inc., et al.' Third Amended Joint Plan of Reorganization, dated as
of Dec. 31, 2010.
Creditor Stephen A. Witzer also filed a competing Plan of
Reorganization.
According to the amended Disclosure Statement, the Debtors have
proposed two options for the Plan. The first proposal is based on
removing 20 feet of existing dock, which will satisfy Sarasota
County's Code violation. This would allow for 40 slips to be
leased.
The second proposal which is in front of the County Commission is
for allowing the original permitting issued by the City of Venice
for the construction of 57 slips. Based upon the representation
of the newly elected Mayor of the City of Venice, this proposal
is likely to succeed.
Treatment of Claims
* Class 1 - Claim of Stephen A. Witzer, Trustee.
The Secured Claim is disputed, however, the adequate
protection payments being made are based upon an amount of
$8,207,080. The Allowed Secured Witzer Claim will be
collectively satisfied by each Debtor at 5.25% interest. The
Creditor will receive interest only payments for 24 months in
the approximate amount of $36,000.
* Class 2 - Claim of Bank of America, N.A. ($17,523).
The Allowed Secured Claim will be collectively satisfied by
each Debtor at 5.25% interest, payments to begin 30 days from
the Effective date of the Plan.
* Class 3 - Claim of Ford Motor Credit Company, LLC ($29,797).
The Allowed Secured Claim will be collectively satisfied by
each Debtor at 5.25% interest, payments to begin 30 days from
the Effective date of the Plan.
* Class 4 - General Unsecured Claims.
All Allowed Class 4 Unsecured Claims will receive, 15% of
their Allowed Unsecured Claims, payments to begin 30 days
from the Effective date of the Plan unless otherwise
negotiated.
* Class 5 - Insider Claims.
Each Holder of an Allowed Insider Claim in Class 5 will
retain the claim; provided, however, the holder will not be
entitled to any distribution from the Reorganized Debtor on
account of the Claim until and unless each holder of an
Allowed Claim in Classes 1 through 4 is satisfied in full as
provided under this Plan.
* Class 6 Equity Claim.
John Konecnik will retain his interest in the Debtor.
A full-text copy of the Third Amended Disclosure Statement is
available for free at:
http://bankrupt.com/misc/Fishreman'sWharf_THIRDAMENDEDDS.pdf
About Fisherman's Wharf of Venice, Inc.
Venice, Florida-based Fisherman's Wharf of Venice, Inc., filed for
Chapter 11 protection (Bankr. M.D. Fla. Case No. 10-10694) on May
4, 2010. H. Bradley Staggs, Esq., at Bush Ross, P. A. represents
the Debtor. The Company disclosed $15,990,500 in assets and
$13,853,990 in liabilities as of the Chapter 11 filing.
The motion to dismiss the Debtors' case filed by creditor Stephen
Witzer is still pending at the Court.
FIVE STAR: Organizational Meeting to Form Panel on April 6
----------------------------------------------------------
Roberta A. DeAngelis, United States Trustee for Region 3, will
hold an organizational meeting on April 6, 2011, at 1:00 p.m. in
the bankruptcy case of Five Star Foods, Inc. The meeting will be
held at United States Trustee's Office, One Newark Center, 21st
Floor, Room 2106, Newark, New Jersey.
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' cases.
The organizational meeting is not the meeting of creditors
pursuant to Section 341 of the Bankruptcy Code. A representative
of the Debtor, however, may attend the Organizational Meeting, and
provide background information regarding the bankruptcy cases.
To increase participation in the Chapter 11 proceeding, Section
1102 of the Bankruptcy Code requires that the United States
Trustee appoint a committee of unsecured creditors as soon as
practicable. The Committee ordinarily consists of the persons,
willing to serve, that hold the seven largest unsecured claims
against the debtor of the kinds represented on the committee.
Section 1103 of the Bankruptcy Code provides that the Committee
may consult with the debtor, investigate the debtor and its
business operations and participate in the formulation of a plan
of reorganization. The Committee may also perform other services
as are in the interests of the unsecured creditors whom it
represents.
Rutherford, New Jersey-based Five Star Foods, Inc., filed for
Chapter 11 bankruptcy protection (Bankr. D. N.J. Case No. 11-
17073) on March 10, 2011. David Edelberg, Esq., at Nowell Amoroso
Klein Bierman, P.A., serves as the Debtor's bankruptcy counsel.
The Debtor estimated its assets and debts at $1 million to
$10 million.
FOUR LEAF: Case Summary & 5 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: Four Leaf Clover Dairy Leasing, LLC
1290 N. Shoop Avenue, Suite 140
Wauseon, OH 43567
Bankruptcy Case No.: 11-11036
Chapter 11 Petition Date: March 24, 2011
Court: United States Bankruptcy Court
Northern District of Indiana (Fort Wayne Division)
Judge: Robert E. Grant
Debtor's Counsel: Daniel J. Skekloff, Esq.
Sarah Mustard Heil, Esq.
Scot T. Skekloff, Esq.
SKEKLOFF, ADELSPERGER & KLEVEN, LLP
927 South Harrison Street
Fort Wayne, IN 46802
Tel: (260) 407-7000
Fax: (260) 407-7137
E-mail: djs@sak-law.com
sheil@sak-law.com
sts@sak-law.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 five largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/innb11-11036.pdf
The petition was signed by Ad Nieuwenhuis, manager.
Debtor-affiliate that filed separate Chapter 11 petition:
Petition
Debtor Case No. Date
------ -------- ----
Four-Leaf Clover Dairy, LLC 10-13574 08/11/10
FUQI INTERNATIONAL: NASDAQ Delists Securities
---------------------------------------------
FUQI International, Inc., announced on March 29, 2011, that, as
anticipated, the Company received written notice on March 28,
2011, that the NASDAQ Listing Qualifications Panel has determined
to delist the Company's securities from The NASDAQ Stock Market,
effective with the open of business on Tuesday, March 29, 2011.
As previously announced, the Company has been advised by Pink OTC
Markets Inc., which operates an electronic quotation service for
securities traded over-the-counter, that its securities are
immediately eligible for quotation on the Pink Sheets. The
Company anticipates that its shares will continue to trade under
the symbol FUQI. Investors can view real time stock quotes for
FUQI at http://www.otcmarkets.com.
About FUQI International
Based in Shenzhen, China, FUQI International, Inc. is a leading
designer, producer and seller of high quality precious metal
jewelry in China. FUQI develops, promotes, manufactures and sells
a broad range of products consisting of unique styles and designs
made from gold and other precious metals such as platinum and
Karat gold.
GAMETECH INTERNATIONAL: Receives NASDAQ Noncompliance Notice
------------------------------------------------------------
GameTech International, Inc., announced that on March 23, 2011, it
received a letter from the NASDAQ Stock Market stating that
GameTech did not timely file its Quarterly Report on Form 10-Q for
the period ended Jan. 30, 2011, with the Securities and Exchange
Commission. As a result, GameTech is not in compliance with the
continued listing requirements under NASDAQ Listing Rule 5250(c)(1
The notification of noncompliance has no immediate effect on the
listing or trading of GameTech's common stock on the NASDAQ Global
Market.
As previously reported by the Company in its Form 12b-25 filed
with the SEC on March 17, 2010, filing of the Quarterly Report has
been delayed primarily due to the resignation of the Company's
former Chief Financial Officer and the appointment of a new Chief
Financial Officer, effective March 1, 2011. As a result of this
transition, the process of compiling and disseminating the
information required to be included in the Quarterly Report, as
well as the completion of the required review of the Company's
financial information, could not be completed in a timely manner
without incurring undue hardship and expense. The Company intends
to file its Quarterly Report as soon as practicable.
Pursuant to the NASDAQ Listing Standards, GameTech has 60 calendar
days from the date of the notice to submit a plan to regain
compliance, and if NASDAQ accepts GameTech's plan, it can grant an
exception of up to 180 calendar days from the quarterly report's
due date, or until September 19, 2011, to regain compliance
About GameTech
Based in Reno, Nevada, GameTech develops and manufactures gaming
entertainment products and systems. GameTech holds a significant
position in the North American bingo market with its interactive
electronic bingo systems, portable and fixed-based gaming units,
and complete hall management modules. It also holds a significant
position in select North American VLT markets, primarily Montana,
Louisiana, and South Dakota, where it offers video lottery
terminals and related gaming equipment and software. It also
offers Class III slot machines and server-based gaming systems.
The Company reported a net loss of $20.4 million on $35.2 million
of revenue for the 52 weeks ended Oct. 31, 2010, compared with
a net loss of $10.5 million on $47.8 million of revenue for the
52 weeks ended Nov. 1, 2009.
Piercy Bowler Taylor & Kern, in Las Vegas, Nevada, expressed
substantial doubt about GameTech International, Inc.'s ability to
continue as a going concern. The independent auditors noted that
the Company has suffered reoccurring losses from operations and
has been unable to extend the maturity of its debt, or raise
additional capital necessary to execute its business plan.
GAS CITY: Court OKs Bid Protections for Stalking Horse Bidders
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
entered on March 21, 2011, its order granting the emergency motion
of Gas City Ltd., and William J. McEnergy Revocable Trust Dated
April 22, 1993, for the approval of bid protections, including
without limitation, the break-up fees and overbid requirements,
for the stalking horse bidders in connection with the proposed
auction sale of substantially all assets of Debtor Gas City, Ltd.,
and all related real estate owned or leased by Debtor
The assets include 51 gas stations and truck stops located across
Illinois, Indiana, Florida, and Arizona.
Pursuant to the Bid Procedures Order dated Jan. 13, 2011, the
Debtors intend to conduct an auction for the sale of the assets on
April 4, 2011. A hearing to approve the sale is set for April 13,
2011.
On March 2, 2011, the Debtors received a bid from Alimentation
Couche-Tard Inc. for all of the Debtors' Stations. Thereafter, on
March 7, 2011, the Debtors received a separate bid from TA
Operating, LLC, for several of the Debtors' truck stop stations.
On March 9, 2011, after subsequent discussions among the parties,
ACT submitted a revised bid for 46 Stations and TAO submitted a
revised bid for 4 of the Debtors' truck stop Stations.
Pursuant to the ACT Bid, ACT proposes to pay, in exchange for the
ACT Stations, a base cash purchase price equal to $91,545,000,
plus 100% of the value at Gas City's cost of its readily salable
inventory existing at closing for each purchased Station.
Pursuant to the TAO Bid, TAO proposes to pay, in exchange for the
TAO Stations, a base cash purchase price equal to $12,250,000,
plus 100% of the Working Capital Amount for each purchased
Station.
Each of the Stalking Horse Bids also requests certain bid
protections as follows:
* The ACT Bid requires Bid Protections in the form of (i) a
break-up fee in the amount of 3.28% of the ACT Bid for each ACT
Station that is sold to a third party (excluding any Working
Capital Amount), provided that the ACT Break-Up Fee will be fixed
at $3,000,000 if 13 or more of the ACT Stations are sold to a
third party; (ii) a requirement that any initial overbid be at
least 5.28% higher than the ACT Bid on a Station-by-Station basis;
(iii) a requirement that any subsequent overbids be at least 1%
higher than the then-current overbid for each ACT Station on a
Station-by-Station basis; and (iv) that ACT will have the right to
submit an overbid topping any overbid by a Qualified Bidder for
any ACT Station (and as part of such overbid will be given credit
for 3.28% of the ACT Bid on a Station-by-Station basis to account
for ACT's entitlement to the ACT Break-Up Fee).
* The TAO Bid includes Bid Protections in the form of (i) a
break-up fee of 3% of the TAO Bid for each TAO Station that is
sold to a third party (excluding any Working Capital Amount); (ii)
a requirement that any initial overbid be at least 5% higher for
each TAO Station subject to such overbid on a Station-by-Station
basis than the TAO Bid; (iii) a requirement that any subsequent
overbids be at least 1% higher than the then-current overbid for
each TAO Station on a Station-by-Station basis; and (iv) that TAO
will have the right to submit an overbid topping any overbid by a
Qualified Bidder for any TAO Station (and as part of such overbid
will be given credit for 3% of the TAO Bid on a Station-by-Station
basis to account for TAO's entitlement to the TAO Break-Up Fee).
About Gas City
Gas City Ltd. -- http://www.gascity.net/-- based in Frankfort,
Ill., is an independent petroleum marketer with locations in
Northeast Illinois, Northwest Indiana, Florida and Arizona.
Gas City sought Chapter 11 bankruptcy protection (Bankr. N.D.
Ill. Case No. 10-47879) on Oct. 26, 2010, estimating assets
at $50 million to $100 million and debts at $100 million to
$500 million. Gas City's parent, the William J. McEnery
Revocable Trust dated Apr. 22, 1993, filed a separate
Chapter 11 petition (Bankr. N.D. Ill. Case No. 10-47895).
Paul V. Possinger, Esq., Mark K. Thomas, Esq., Grayson T. Walter,
Esq., at Proskauer Rose LLP, in Chicago; and Daniel A. Zazove,
Esq., and Kathleen A. Stetsko, Esq., at Perkins Coie LLP, in
Chicago, represent the Debtors. A. Jeffrey Zappone at Conway
Mackenzie is the Debtors' chief restructuring officer. Kurtzman
Carson Consultants is the Debtors' claims agent. The Official
Committee of Unsecured Creditors has tapped Pachulski Stang Ziehl
& Jones LLP and Levenfeld Pearlstein, LLC, as co-counsel and
Mesirow Financial Consulting, LLC, as financial advisors.
The Bankruptcy Court extended Gas City's exclusive periods to file
and solicit acceptances for the proposed chapter 11 plan until
April 20, 2011, and May 20, respectively.
GAS CITY: Court Approves Bid Protocol for Sale of Creamery Assets
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
approved on March 8, 2011, the bidding procedures in connection
with the sale of the Creamery Assets of Debtor The William J.
McEnery Revocable Trust Dated April 23, 1993.
The hearing to approve the sale will be held on April 5, 2011, at
10:00 a.m.
Objections, if any, to the sale, must be in writing and filed with
the clerk of the Bankruptcy Court on or before 4:00 p.m. on
April 1, 2011.
About Gas City
Gas City Ltd. -- http://www.gascity.net/-- based in Frankfort,
Ill., is an independent petroleum marketer with locations in
Northeast Illinois, Northwest Indiana, Florida and Arizona.
Gas City sought Chapter 11 bankruptcy protection (Bankr. N.D.
Ill. Case No. 10-47879) on Oct. 26, 2010, estimating assets
at $50 million to $100 million and debts at $100 million to
$500 million. Gas City's parent, the William J. McEnery
Revocable Trust dated Apr. 22, 1993, filed a separate
Chapter 11 petition (Bankr. N.D. Ill. Case No. 10-47895).
Paul V. Possinger, Esq., Mark K. Thomas, Esq., Grayson T. Walter,
Esq., at Proskauer Rose LLP, in Chicago; and Daniel A. Zazove,
Esq., and Kathleen A. Stetsko, Esq., at Perkins Coie LLP, in
Chicago, represent the Debtors. A. Jeffrey Zappone at Conway
Mackenzie is the Debtors' chief restructuring officer. Kurtzman
Carson Consultants is the Debtors' claims agent. The Official
Committee of Unsecured Creditors has tapped Pachulski Stang Ziehl
& Jones LLP and Levenfeld Pearlstein, LLC, as co-counsel and
Mesirow Financial Consulting, LLC, as financial advisors.
The Bankruptcy Court extended Gas City's exclusive periods to file
and solicit acceptances for the proposed chapter 11 plan until
April 20, 2011, and May 20, respectively.
GLC LIMITED: Sec. 341 Meeting of Creditors Set for May 5
--------------------------------------------------------
The U.S. Trustee for Region 9, will convene a meeting of creditors
in GLC Limited's Chapter 11 case on May 5, 2011, at 2:00 p.m. The
meeting will be held at the Office of the US Trustee, 36 East
Seventh Street, Suite 2050, Cincinnati, Ohio.
This is the first meeting of creditors required under Section
341(a) of the 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.
Proctorville, Ohio-based GLC Limited is principally a liquidation
company in the wholesale/retail distribution industry. It offers
large selections of name brand products in many categories. It
distributes its goods through a network of wholesale distributors,
retail chains and discount and surplus centers. It owns four
warehouses for its goods which are located in Proctorville and
Columbus, Ohio and Huntington, West Virginia.
GLC filed for Chapter 11 bankruptcy protection (Bankr. S.D. Ohio
Case No. 11-11090) on Feb. 28, 2011. Ronald E. Gold, Esq., at
Frost Brown Todd LLC, serves as the Debtor's bankruptcy counsel.
The Debtor estimated its assets and debts at $10 million to
$50 million.
GLC LIMITED: Has Access to Cash Collateral Until July 23
--------------------------------------------------------
GLC Limited obtained final authorization from the Hon. Jeffery P.
Hopkins of the U.S. Bankruptcy Court for the Southern District of
Ohio to use cash collateral until July 23, 2011.
As reported by the Troubled Company Reporter on March 9, 2011, the
Debtor has sought authority from the Court to use cash collateral
to fund its Chapter 11 case, pay suppliers and other parties.
Ronald E. Gold, Esq., at Frost Brown Todd LLC, explained certain
parties have asserted liens against certain prepetition assets of
the Debtor. The alleged liens include, in sum, (i) certain liens
asserted by certain alleged judgment holders; and (ii) certain
liens asserted by various taxing authorities. A list of alleged
pre-petition lien holders and their alleged prepetition liens is
available for free at:
http://bankrupt.com/misc/GLC_allegedprepetitionlienholders.pdf
As adequate protection for the Debtor's use of the cash
collateral, to the extent of any actual diminution in value of any
alleged prepetition lien holder's interest in its prepetition
collateral as a result of the Debtor's use of the cash collateral,
the alleged prepetition lien holder is granted replacement liens
in the Debtor's postpetition assets to the extent that the
postpetition assets are the same as the prepetition collateral
that is allegedly encumbered by the alleged prepetition liens and
further provided that the alleged prepetition lien holder had a
valid, properly perfected, enforceable and non-avoidable lien in
and to the Debtor's assets prior to the Petition Date.
The Debtor will use the cash collateral pursuant to a budget, a
copy of which is available for free at:
http://bankrupt.com/misc/GLC_LIMITED_budget.pdf
About GLC Limited
Proctorville, Ohio-based GLC Limited is principally a liquidation
company in the wholesale/retail distribution industry. It offers
large selections of name brand products in many categories. It
distributes its goods through a network of wholesale distributors,
retail chains and discount and surplus centers. It owns four
warehouses for its goods which are located in Proctorville and
Columbus, Ohio and Huntington, West Virginia.
GLC filed for Chapter 11 bankruptcy protection (Bankr. S.D. Ohio
Case No. 11-11090) on Feb. 28, 2011. Ronald E. Gold, Esq., at
Frost Brown Todd LLC, serves as the Debtor's bankruptcy counsel.
The Debtor estimated its assets and debts at $10 million to
$50 million as of the Chapter 11 filing.
Creditors have until May 30, 2011, to file proofs of claim in the
case. Governmental agencies have until Aug. 31, 2011.
GMX RESOURCES: Files Form S-3; Retamco to Resell 2.3MM Shares
-------------------------------------------------------------
GMX Resources Inc. filed with the U.S. Securities and Exchange
Commission a Form S-3 registration relating to the resale of up to
2,268,971 shares of common stock, par value $0.001, of the Company
that may be offered and sold from time to time by Retamco
Operating, Inc.
The selling shareholder and certain transferees may offer and sell
from time to time the shares of common stock at market prices, in
negotiated transactions or otherwise, or distribute all or a
portion of the shares to its shareholders. The timing and amount
of any sale are within the sole discretion of the selling
shareholder. The selling shareholder may sell the shares of
common stock directly or through underwriters, brokers or dealers
or through a combination of these methods. The selling
shareholder will pay commissions or discounts to underwriters,
brokers or dealers in amounts to be negotiated prior to the sale.
The Company will not receive any of the proceeds from the sale of
the shares covered by this prospectus.
The Company's common stock is listed on The New York Stock
Exchange under the symbol "GMXR." On March 25, 2011, the closing
sale price of our common stock on The New York Stock Exchange was
$5.85 per share.
A full-text copy of the prospectus is available for free at:
http://is.gd/ZqMd7q
About GMX Resources
GMX Resources Inc. -- http://www.gmxresources.com/-- is an
independent natural gas production company headquartered in
Oklahoma City, Oklahoma. GMXR has 53 producing wells in Texas &
Louisiana, 24 proved developed non-producing reservoirs, 48 proved
undeveloped locations and several hundred other development
locations. GMXR has 9,000 net acres on the Sabine Uplift of East
Texas. GMXR has 7 producing wells in New Mexico. The Company's
strategy is to significantly increase production, revenues and
reinvest in increasing production. GMXR's goal is to grow and
build shareholder value every day.
The Company's balance sheet at Dec. 31, 2010 showed
$507.09 million in total assets, $368.87 million in total
liabilities and $138.22 million in total equity.
The Company reported a net loss of $138.29 million on
$96.52 million of oil and gas sales for the year ended Dec. 31,
2010, compared with a net loss of $181.08 million on $94.29
million of oil and gas sales during the prior year.
* * *
GMX Resources got a first time 'Caa1' Corporate Family Rating
and SGL-3 Speculative Grade Liquidity rating from Moody's
Investors Service in February 2011. GMX's 'Caa1' CFR reflects its
small size, limited diversification, production that is 97%
natural gas in a low gas price environment, high leverage on
production and reserves, and the risks inherent
in developing its newly acquired oil focused Bakken and Niobrara
acreage while outspending cash flow," commented Jonathan
Kalmanoff, Moody's Analyst. "The rating also considers the
potential for improvement in both profitability and
diversification if GMX is successful in developing its newly
acquired acreage, the pre-funding of the majority of 2011 capital
spending through both debt and equity offerings, a lack of
required drilling to hold acreage in the company's East Texas
properties, and hedges in place which add support to realized
prices for gas production through 2012."
Standard & Poor's Ratings Services in February 2011 said it
assigned its preliminary 'B-' corporate credit rating to GMX
Resources Inc. The outlook is stable. "The ratings on Oklahoma
City-based GMX Resources Inc. reflect the company's limited scale
of operations, meaningful exposure to weak natural gas prices, a
very aggressive near-term spending plan, limited liquidity beyond
2011, and elevated debt leverage," said Standard & Poor's credit
analyst Paul B. Harvey.
GOODYEAR TIRE: Moody's 'Ba3' Rating Unchanged by $435MM Offering
----------------------------------------------------------------
Moody's Investors Service said The Goodyear Tire & Rubber
Company's announcement that it has commenced a public offering of
$435 million of mandatory convertible preferred stock is a
positive credit development. The transaction should contribute to
a modest level of improvement in the company's credit metrics
which are weak for the current rating level. Consequently,
Goodyear's Ba3 Corporate Family Rating, SGL-2 Speculative Grade
Liquidity Rating, and stable rating outlook are unchanged.
The last rating action for Goodyear was on August 10, 2010, when
the Corporate Family Rating was affirmed at Ba3, and the rating
outlook changed to stable.
The Goodyear Tire & Rubber Company, based in Akron, OH, is one of
the world's largest tire companies with 56 manufacturing
facilities in 22 countries around the world. Revenues in 2010
were $18.8 billion.
GRAND PARKWAY: Court Dismisses Chapter 11 Case
----------------------------------------------
Judge Jeff Bohm issued an order on March 18 dismissing the Chapter
11 case of Grand Parkway Equities, Ltd. The Debtor's
representative, Tammy Huynh, is directed to appear before the
Court on April 19 to provide proof of payment of $975 in U.S.
Trustee fees under 28 U.S.C. Sec. 1930.
As reported by the Troubled Company Reporter, Judy A. Robbins, the
U.S. Trustee for Region 7, asked the Bankruptcy Court to dismiss
the Chapter 11 case because the Debtor:
-- has not filed a disclosure statement or plan of
reorganization;
-- has not filed monthly operating reports for May - December
2010; and
-- currently owes 3rd quarter 2010 fees in the amount of
$325 and will owe 4th quarter 2010 and 1st quarter 2011 fees
in the amount of $650.
The U.S. Trustee also asked the Bankruptcy Court to order the
Debtor to pay outstanding quarterly fees.
About Grand Parkway Equities
Richmond, Texas-based Grand Parkway Equities, Ltd. filed for
Chapter 11 protection (Bankr. S.D. Tex.Case No. 10-31013) on
Feb. 2, 2010. Richard L. Fuqua, II, Esq., at Fuqua & Keim assists
the Debtor in its restructuring effort. In its schedules, the
Debtor listed $38,000,000 in assets and $7,835,548 in liabilities.
GREENWICH SENTRY: Needs More Time to File Bankruptcy Plan
---------------------------------------------------------
Greenwich Sentry, L.P., and Greenwich Sentry Partners, L.P., are
asking Judge Burton Lifland for an extension of the periods within
which they have the exclusive right to file and solicit
acceptances of a plan of reorganization.
The Debtors consider themselves "net losers" in the SIPA
proceedings of Bernard L. Madoff Investment Securities LLC to the
extent of roughly $140 million for GS and for GSP. The Debtors
also face an adversary proceeding, brought by Irving H. Picard,
Esq., trustee for the substantively consolidated SIPA liquidation
of BLMIS, asserting "claw back" claims against the Debtors and
others, and seeking to disallow the Debtors' claims in the BLMIS
SIPA proceeding.
The Debtors have been named as parties in several civil actions,
pending in various courts and in different stages of litigation,
arising out of their accounts at BLMIS. The Debtors note that
they have been negotiating a settlement of the claims of the BLMIS
Trustee. Counsel for the Debtors have attended multiple
settlement conferences and have been exchanging proposed
settlement drafts with counsel for the BLMIS Trustee and other key
parties-in-interest. It is intended that the settlement, when
finalized, will be accomplished through a plan of reorganization
for the Debtors whose objective will be to return maximum value to
the innocent limited partners of both Debtors. The Debtors
believe they have made substantial progress with the BLMIS Trustee
so as to justify an extension of the Exclusive Periods to allow
them more time to accomplish a deal.
The Debtors request an extension to June 17 of the Exclusive Plan
Filing Deadline and to Aug. 16 of the Exclusive Solicitation
Period.
Absent an extension, the Exclusive Plan Filing Period was set to
expire March 19 and the Exclusive Solicitation Period on May 18.
A hearing on the request is set for April 5, 2011, at 10:00 a.m.
About Greenwich Sentry
Liquidators of Fairfield Sentry Limited, filed a Chapter 15
petition for Fairfield in June 2010 (Bankr. S.D.N.Y. Case No.
10-13164). In July 2010, Kenneth Krys and Christopher Stride of
Krys & Associates (BVI) Limited, the liquidators of Fairfield
Sentry Limited, Fairfield Sigma Limited and Fairfield Lambda
Limited obtained cross-border recognition as foreign main
proceedings by the U.S. Bankruptcy Court of the funds' insolvency
proceedings, pending in the British Virgin Islands. The
liquidators are represented in the U.S. by Brown Rudnick LLP.
Fairfield Sentry Limited was the largest "feeder fund" to Bernard
L. Madoff Investment Securities LLC, and invested approximately
95% of its assets with BLMIS. BLMIS was placed into liquidation
proceedings in the United States in December 2008, after it was
revealed that Bernard Madoff operated BLMIS as a Ponzi scheme for
many years. Fairfield Sigma Limited and Fairfield Lambda Limited
were both feeder funds of Fairfield Sentry Limited, and invested
all of their assets with Fairfield Sentry Limited.
Greenwich Sentry, L.P., and an affiliate filed for Chapter 11
protection on Nov. 19, 2010 (Bankr. S.D.N.Y. Case No. 10-16229)
hoping to settle lawsuits filed against it in connection with its
investments with Bernard L. Madoff. Paul R. DeFilippo, Esq., at
Wollmuth Maher & Deutsch LLP, in New York, represents the Debtors
in the Chapter 11 cases.
Bernard L. Madoff was charged by the Securities and Exchange
Commission in December 2008 of orchestrating the largest Ponzi
scheme in history, with losses topping US$50 billion. In March
2009, Mr. Madoff pleaded guilty to 11 federal crimes and admitted
to turning his wealth management business into a Ponzi scheme. A
trustee was appointed to liquidate and has been filing clawback
suits against investors who withdrew phony profits from Mr.
Madoff.
On May 18, 2009, Irving H. Picard, the trustee liquidating the
estate of Mr. Madoff and his firm, Bernard L. Madoff Investment
Securities, LLC, filed a lawsuit against Fairfield Sentry and
Greenwich, seeking the return of $3.55 billion that Fairfield
withdrew from Madoff during the period from 2002 to Madoff's
arrest in December 2008. Since 1995, the Fairfield funds invested
about $4.5 billion with BLMIS.
Mr. Picard claims that Fairfield knew or should have known about
the fraud give that it received from BLMIS unrealistically high
and consistent annual returns of between 10% and 21% in contrast
to the vastly larger fluctuations in the S&P 100 Index.
In schedules filed with the Court, Greenwich Sentry disclosed
$317,073,770 in total assets and $206,337,244 in total
liabilities.
GSC GROUP: Trustee Wins Approval for Retention Bonuses
------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that James L. Garrity, the former U.S. bankruptcy judge
serving as Chapter 11 trustee for GSC Group Inc., was authorized
by the bankruptcy court on March 25 to pay retention bonuses to
company officials while the business is being sold. According to
the report, the bankruptcy judge adopted Garrity's argument that
even the highest-ranking executives aren't "insiders" and thus may
be given retention bonuses.
Mr. Rochelle recounts that the trustee was appointed to oust GSC's
management after some lenders argued that company executives
became "quasi agents" for Black Diamond Capital Finance LLC, whose
funds hold a majority of the $206.6 million owing to secured
lenders.
Although Black Diamond won an October bankruptcy court-sanctioned
auction for GSC with a bid of $235 million, the Company later
withdrew the motion for approval of the sale to Black Diamond.
About GSC Group
Florham Park, New Jersey-based GSC Group, Inc. --
http://www.gsc.com/-- is a private equity firm specializing in
mezzanine and fund of fund investments. Originally named
Greenwich Street Capital Partners Inc. when it was a subsidiary of
Travelers Group Inc., GSC became independent in 1998 and at one
time had $28 billion of assets under management. Market reverses,
termination of some funds, and withdrawal of customers'
investments reduced funds under management at the time of
bankruptcy to $8.4 billion.
GSC Group filed for Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case No. 10-14653) on Aug. 31, 2010. Michael B. Solow,
Esq., at Kaye Scholer LLP, serves as the Debtor's bankruptcy
counsel. Epiq Bankruptcy Solutions, LLC, is the Debtor's notice
and claims agent. Capstone Advisory Group, LLC, is the Debtor's
financial advisor. The Debtor estimated its assets at $1 million
to $10 million and debts at $100 million to $500 million as of the
Chapter 11 filing.
GULFSTREAM INT'L: Wants Exclusivity Extended Pending Sale Closing
-----------------------------------------------------------------
Gulfstream International Group, Inc., and its debtor-affiliates
ask the Bankruptcy Court to extend the time within which only they
may file and solicit acceptances of a plan of reorganization.
As a caveat, the Debtors propose that the Official Committee of
Unsecured Creditors be allowed to file a plan should it so
chooses.
The Debtors obtained approval in January 2011 to sell
substantially all of their assets to VPAA Co. The transaction is
scheduled to close after the Purchaser receives all necessary
regulatory and governmental approvals.
The Debtors seek an extension of the exclusive period within which
only the Debtors, or the Committee as the case may be, may file a
plan. The Debtors request an extension of 120 days from March 4,
2011, through and including July 2, 2011. The Debtors also seek
an extension of the time within which only the Debtors, or the
Committee as the case may be, may solicit acceptances to their
plan, through and including August 31, 2011.
About Gulfstream International
Fort Lauderdale, Florida-based Gulfstream International Airlines
(NYSE Amex: GIA) operated a fleet of turboprop Beechcraft 19000
aircraft, and specialized in providing travelers with access to
niche locations not typically covered by major carriers. GIA
operated more than 150 scheduled flights per day, serving nine
destinations in Florida, 10 destinations in the Bahamas, five
destinations from Continental Airline's hub under the Department
of Transportation's Essential Air Service Program and supports
charter service to Cuba through a services agreement with
Gulfstream Air Charter, Inc., an entity otherwise unrelated to the
Debtors. GIA operated as a Continental Connection carrier, as
well as for United Airlines, Northwest Airlines and Copa Airlines,
through code share agreements. GIA has 620 employees, including
530 working full-time.
Gulfstream International Group, Inc., and its units including
Gulfstream International Airline, Inc., filed for Chapter 11
bankruptcy protection (Bankr. S.D. Fla. Lead Case
No. 10-44131) on Nov. 4, 2010. Brian K. Gart, Esq., at Berger
Singerman, P.A., serves as the Debtors' bankruptcy counsel.
Jetstream Aviation Capital, LLC and Jetstream Aviation Management,
LLC, serve as financial advisors to the Debtors. Robert A.
Schatzman, Esq., Steven J. Solomon, Esq., and Frank P. Terzo,
Esq., at GrayRobinson, P.A., in Miami, Florida, serve as counsel
to the Official Committee of Unsecured Creditors.
Gulfstream International Airlines disclosed $15,967,096 in total
assets and $25,243,099 in total liabilities.
As reported by the Troubled Company Reporter on Jan. 25, 2011,
Bankruptcy Judge John K. Olson entered an order authorizing
Gulfstream to sell its business to an affiliate of Chicago-based
Victory Park Capital Advisors LLC. Bill Rochelle, the bankruptcy
columnist for Bloomberg News, reported that Victory Park is buying
Gulfstream in return for financing it provided the Chapter 11
case. In addition, Victory Park is paying Raytheon Aircraft
Credit Co. $18.7 million to buy the 21 Beechcraft 1900 D aircraft
that Gulfstream operates. Raytheon also will be paid arrears on
the aircraft leases. Victory Park will pick up specified expenses
of the Chapter 11 case while setting aside a $600,000 fund to pay
professional fees. Victory Park is also allowing the creation of
a $100,000 fund to finance lawsuits. Mr. Rochelle noted that a
prior bankruptcy court order said there will be a "structured
dismissal" of the Chapter 11 case within 30 days of the completion
of the sale.
Victory Park provided Gulfstream with up to $5 million debtor-in-
possession financing to fund the Chapter 11 case.
GULFSTREAM INT'L: Lease Decision Deadline Extended Until June 2
---------------------------------------------------------------
Bankruptcy Judge John Olson extended for 90 days, through and
including June 2, 2011, the deadline for Gulfstream International
Group, Inc., and its debtor-affiliates to decide whether to assume
or reject unexpired leases. The extension is without prejudice to
the Debtors' right to seek an additional extension.
The Debtors obtained approval in January 2011 to sell
substantially all of their assets to VPAA Co. The transaction is
scheduled to close after the Purchaser receives all necessary
regulatory and governmental approvals.
The Debtors sought an extension of the Lease Decision Deadline to
maintain the status quo in advance of the closing of the Sale.
About Gulfstream International
Fort Lauderdale, Florida-based Gulfstream International Airlines
(NYSE Amex: GIA) operated a fleet of turboprop Beechcraft 19000
aircraft, and specialized in providing travelers with access to
niche locations not typically covered by major carriers. GIA
operated more than 150 scheduled flights per day, serving nine
destinations in Florida, 10 destinations in the Bahamas, five
destinations from Continental Airline's hub under the Department
of Transportation's Essential Air Service Program and supports
charter service to Cuba through a services agreement with
Gulfstream Air Charter, Inc., an entity otherwise unrelated to the
Debtors. GIA operated as a Continental Connection carrier, as
well as for United Airlines, Northwest Airlines and Copa Airlines,
through code share agreements. GIA has 620 employees, including
530 working full-time.
Gulfstream International Group, Inc., and its units including
Gulfstream International Airline, Inc., filed for Chapter 11
bankruptcy protection on Nov. 4, 2010 (Bankr. S.D. Fla. Case
No. 10-44131). Brian K. Gart, Esq., at Berger Singerman, P.A.,
serves as the Debtors' bankruptcy counsel. Jetstream Aviation
Capital, LLC and Jetstream Aviation Management, LLC, serve as
financial advisors to the Debtors. Robert A. Schatzman, Esq.,
Steven J. Solomon, Esq., and Frank P. Terzo, Esq., at
GrayRobinson, P.A., in Miami, Florida, serve as counsel to the
Official Committee of Unsecured Creditors.
Gulfstream International Airlines disclosed $15,967,096 in total
assets and $25,243,099 in total liabilities.
As reported by the Troubled Company Reporter on Jan. 25, 2011,
Bankruptcy Judge John K. Olson entered an order authorizing
Gulfstream to sell its business to an affiliate of Chicago-based
Victory Park Capital Advisors LLC. Bill Rochelle, the bankruptcy
columnist for Bloomberg News, reported that Victory Park is buying
Gulfstream in return for financing it provided the Chapter 11
case. In addition, Victory Park is paying Raytheon Aircraft
Credit Co. $18.7 million to buy the 21 Beechcraft 1900 D aircraft
that Gulfstream operates. Raytheon also will be paid arrears on
the aircraft leases. Victory Park will pick up specified expenses
of the Chapter 11 case while setting aside a $600,000 fund to pay
professional fees. Victory Park is also allowing the creation of
a $100,000 fund to finance lawsuits. Mr. Rochelle noted that a
prior bankruptcy court order said there will be a "structured
dismissal" of the Chapter 11 case within 30 days of the completion
of the sale.
Victory Park provided Gulfstream with up to $5 million debtor-in-
possession financing to fund the Chapter 11 case.
HARRINGTON WEST: Files Chapter 11 Plan of Liquidation
-----------------------------------------------------
BankruptcyData.com reports that Harrington West Financial Group
filed with the U.S. Bankruptcy Court a Chapter 11 Plan of
Liquidation and related Disclosure Statement.
According to the DS, "The Plan provides for the disposition of all
assets of the Debtors' estate through the establishment of a
liquidating trust for the benefit of the holders of allowed claims
consistent with the priority provisions of the Bankruptcy Code and
the Plan. Assets, to the extent not converted to cash or other
proceeds as of the effective date, will be sold or otherwise
disposed of by the liquidating trustee after effective date, with
all cash proceeds to be distributed to holders of allowed claims,
as provided for in the Plan."
The Court scheduled a June 22, 2011 hearing to consider the
adequacy of the information in the Disclosure Statement.
Harrington West Financial Group, Inc., filed a voluntary petition
to liquidate its assets under Chapter 11 of the Bankruptcy Code
(Bankr. N.D. Calif. Case No. 10-14677) on Sept. 10, 2010. Sharon
M. Kopman, Esq., at Landau Gottfried & Berger LLP, in Los Angeles,
serves as Debtor's bankruptcy counsel. In its schedules, the
Debtor disclosed $579,282 in assets and $26,004,000 in
liabilities.
HARRY & DAVID: Has Interim OK to Use $30-Mil. of DIP Facility
-------------------------------------------------------------
Dow Jones' DBR Small Cap reports that a judge Tuesday cleared
Harry & David Holdings Inc. to tap a bankruptcy financing package
totaling $155 million. Harry & David won approval to access a
two-pronged financing package aimed at keeping it afloat through
its proceedings, expected to last no more than six months.
"We hope not to be here very long," David Heiman, a Jones Day
attorney representing Harry & David, told Judge Mary Walrath at
the U.S. Bankruptcy Court in Wilmington.
According to DBR, Judge Walrath gave Harry & David the go-ahead to
use $30 million of a $55 million second-lien facility from a group
of senior noteholders and Wasserstein & Company LP, one of Harry &
David's two private equity owners.
First Day Motions Approved
Rachel Feintzeig, writing for Dow Jones' Daily Bankruptcy Review,
reports that Judge Walrath also granted approval for a series of
motions designed to ensure that Harry & David is able to continue
operating its business as usual while its reorganization plays out
in court, including authorization to maintain certain customer
programs.
Ms. Feintzeig notes that at the debut bankruptcy hearing Tuesday,
Judge Walrath divulged her familiarity with and appreciation for
the company's gourmet offerings. "I'm aware of their operations,"
Judge Walrath told an attorney for the company. "I have been the
recipient of a fruit-of-the-month club."
Ms. Feintzeig relates David Heiman, Esq., at Jones Day, paused for
a moment and then decided to ask the follow-up question everyone
was waiting for.
"At great risk, your honor, I'll ask if you enjoyed it," he said.
According to Ms. Feintzeig, the judge's reply of "absolutely"
could be a harbinger of success to come in the bankruptcy case, as
could Mr. Heiman's assurance that he would send some more fruit
her way if he could.
About Harry & David Holdings
Medford, Oregon-based Harry & David Holdings, Inc. is a multi-
channel specialty retailer and producer of branded premium gift-
quality fruit and gourmet food products and gifts marketed under
the Harry & David(R), Wolferman's(R) and Cushman's(R) brands. It
has 70 stores across the country. Products are also available
online at http://www.harryanddavid.com/,
http://www.wolfermans.com/, and http://www.honeybell.com/
Harry & David is controlled by The Medford, Oregon-based retailer,
owned by investment funds controlled by Wasserstein & Co., which
hold 63% of the shares. Affiliates of funds sponsored by
Highfields Capital Management LP own 34%. The Company has $304.3
million in total assets, $360.8 million in total liabilities, and
a stockholders' deficit of $56.5 million at Dec. 25, 2010.
Harry & David and its units filed voluntary petitions for
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.
Del. Lead Case No. 11-10884) on March 28, 2011, to implement an
agreed upon restructuring. Harry & David reached an agreement
with holders of approximately 81% of its senior notes on the terms
of a reorganization that will eliminate substantial indebtedness
and provide equity financing to restructure the Company's balance
sheet.
Under a Plan Support Agreement, the Debtors must file a Chapter 11
plan on the terms agreed by the parties no later than May 16,
2011. The Plan must be confirmed by Sept. 12, 2011, and the
Debtors must exit bankruptcy by Oct. 1, 2011.
Judge Mary F. Walrath presides over the case. David G. Heiman,
Esq., Brad B. Erens, Esq., and Timothy W. Hoffman, Esq., at Jones
Day; and Daniel J. DeFranceschi, Esq., Paul Noble Heath, Esq.,
Zachary I Shapiro, Esq., at Richards Layton & Finger, serve as
bankruptcy counsel. Rothschild Inc. serves as investment bankers,
Alvarez & Marsal LLC as financial advisors. Garden City Group
Inc. serves as claims and notice agent.
Kristopher M. Hansen, Esq., and Erez E. Gilad, Esq., at Stroock &
Stroock & Lavan LLP; Thomas B. Walper, Esq., at Munger, Tolles &
Olson LLP; and Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer
& Feld LLP, serve as counsel to Principal Noteholders. Moelis &
Company act as financial advisors to the Principal Noteholders.
HARRY & DAVID: Plan Implies 5% Unsecured Recovery
-------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the reorganization plan that Harry & David Holdings
Inc. negotiated with creditors before the Chapter 11 filing on
March 28 means a recovery of about 5% for holders of unsecured
notes and general unsecured claims, based on the price noteholders
will pay to purchase some of the new stock in an equity rights
offering.
As reported in yesterday's Troubled Company Reporter, Harry &
David announced that it has reached an agreement with holders
of approximately 81% of its senior notes on the terms of a
reorganization that will eliminate substantial indebtedness and
provide equity financing to restructure the Company's balance
sheet.
The Plan Support Agreement provides that the Debtors must file a
Chapter 11 plan on the terms agreed by the parties no later than
May 16, 2011. The Plan must be confirmed by Sept. 12, 2011, and
the Debtors must exit bankruptcy by Oct. 1, 2011.
Reorganize Harry & David will issue 1 million shares on the
effective date of the Plan. HD will raise $55 million in capital
through the consummation of the rights offering. Participants in
the rights offering can subscribe to the shares at an exercise
price of $75 per share, reflecting a 25% discount to the Plan's
implied equity value of $100 per share. The rights offering will
be backstopped by certain holders of the Notes.
The terms of the Plan agreed to by the parties are:
(a) Holders of administrative expense claims and priority tax
claims will be paid in full in cash on the effective date
of the Plan.
(b) Any holders of secured claims will receive payment in full
on the effective date of the Plan or the return of the
property securing the claim.
(c) Each holder of outstanding senior floating rate notes due
2012 and 9.0% senior notes due 2013 (together with the
general unsecured creditors) will receive its pro rata
share of 166,667 shares of new common stock of the
reorganized Harry & David, plus subscription rights to
acquire up to 733,333 shares in connection with a rights
offering.
(d) Each holder of an allowed general unsecured claim (other
than the noteholders) against the Debtors will receive, at
the option of each unsecured creditor, its pro rata share
of any one of the following:
(1) 166,667 shares of new common stock of the
reorganized Harry & David, plus subscription rights
to acquire up to 733,333 shares in connection with a
rights offering; or
(2) cash in an amount equal to 75% of the plan value of
the shares; or
(3) unsecured promissory notes -- bearing interest at
the annual rate of 6% and scheduled to mature in
seven years -- in a principal amount equal to the
value of the shares the unsecured creditor would
have otherwise been entitled to receive.
(d) Holders of existing common equity won't receive any
distributions on account of the interests, and the existing
interests will be cancelled.
Mr. Rochelle relates that assuming general unsecured claims total
$40 million, noteholders and unsecured creditors together would
recover about $12.5 million, or about 5%.
About Harry & David Holdings
Medford, Oregon-based Harry & David Holdings, Inc. is a multi-
channel specialty retailer and producer of branded premium gift-
quality fruit and gourmet food products and gifts marketed under
the Harry & David(R), Wolferman's(R) and Cushman's(R) brands. It
has 70 stores across the country. Products are also available
online at http://www.harryanddavid.com/,
http://www.wolfermans.com/, and http://www.honeybell.com/
Harry & David is controlled by The Medford, Oregon-based retailer,
owned by investment funds controlled by Wasserstein & Co., which
hold 63% of the shares. Affiliates of funds sponsored by
Highfields Capital Management LP own 34%. The Company has $304.3
million in total assets, $360.8 million in total liabilities, and
a stockholders' deficit of $56.5 million at Dec. 25, 2010.
Harry & David and its units filed voluntary petitions for
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.
Del. Lead Case No. 11-10884) on March 28, 2011, to implement an
agreed upon restructuring. Harry & David reached an agreement
with holders of approximately 81% of its senior notes on the terms
of a reorganization that will eliminate substantial indebtedness
and provide equity financing to restructure the Company's balance
sheet.
Under a Plan Support Agreement, the Debtors must file a Chapter 11
plan on the terms agreed by the parties no later than May 16,
2011. The Plan must be confirmed by Sept. 12, 2011, and the
Debtors must exit bankruptcy by Oct. 1, 2011.
Judge Mary F. Walrath presides over the case. David G. Heiman,
Esq., Brad B. Erens, Esq., and Timothy W. Hoffman, Esq., at Jones
Day; and Daniel J. DeFranceschi, Esq., Paul Noble Heath, Esq.,
Zachary I Shapiro, Esq., at Richards Layton & Finger, serve as
bankruptcy counsel. Rothschild Inc. serves as investment bankers,
Alvarez & Marsal LLC as financial advisors. Garden City Group
Inc. serves as claims and notice agent.
Kristopher M. Hansen, Esq., and Erez E. Gilad, Esq., at Stroock &
Stroock & Lavan LLP; Thomas B. Walper, Esq., at Munger, Tolles &
Olson LLP; and Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer
& Feld LLP, serve as counsel to Principal Noteholders. Moelis &
Company act as financial advisors to the Principal Noteholders.
HEALTH ADVENTURE: Case Summary & 18 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: The Health Adventure, Inc.
P.O. Box 180
Asheville, NC 28802
Bankruptcy Case No.: 11-10299
Chapter 11 Petition Date: March 28, 2011
Court: U.S. Bankruptcy Court
Western District of North Carolina (Asheville)
Judge: George R. Hodges
Debtor's Counsel: David G. Gray, Esq.
WESTALL, GRAY, CONNOLLY & DAVIS, P.A.
81 Central Avenue
Asheville, NC 28801
Tel: (828) 254-6315
E-mail: judyhj@bellsouth.net
Scheduled Assets: $1,433,700
Scheduled Debts: $4,272,158
A list of the Company's 18 largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/ncwb11-10299.pdf
The petition was signed by Paige Wheeler, president/CEO.
HORIZON LINES: Incurs $57.97 Million Net Loss in Fiscal 2010
------------------------------------------------------------
Horizon Lines, Inc., filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K reporting a net loss of
$57.97 million on $1.16 billion of operating revenue for the
fiscal year ended Dec. 26, 2010, compared with a net loss of
$31.27 million on $1.12 billion of operating revenue for the
fiscal year ended Dec. 20, 2009.
The Company's balance sheet at Dec. 26, 2010 showed
$785.75 million in total assets, $745.96 million in total
liabilities and $39.79 million in total stockholders' equity.
Ernst & Young LLP, in Charlotte, North Carolina, raised
substantial doubt about the Company's ability to continue as a
going concern. According to Ernst & Young, there is uncertainty
that Horizon Lines, Inc., will remain in compliance with certain
debt covenants throughout 2011 and will be able to cure the
acceleration clause contained in the convertible notes.
A full-text copy of the annual report on Form 10-K is available
for free at http://is.gd/4wZKkR
About Horizon Lines
Horizon Lines, Inc., based in Charlotte, North Carolina, through
its wholly-owned indirect operating subsidiary, Horizon Lines,
LLC, currently operates 11 of its 15 Jones Act qualified U.S.
flag container ships in Jones Act liner services between the
continental United States and either Alaska, Hawaii, or Puerto
Rico and five U.S. flag container ships between the Far East,
U.S. west coast and Guam.
* * *
As reported in the Troubled Company Reporter on March 8, 2011,
Moody's Investors Service said Horizon Lines, Inc.'s plea
agreement regarding antitrust matters in the Puerto Rico trade
lane is credit negative but does not at this time affect its
'Caa1' Corporate Family or its other debt ratings of Horizon.
The last rating action on Horizon was on May 18, 2010 when Moody's
lowered its ratings, including the corporate family rating to
'Caa1' and maintained the negative outlook.
HUBBARD PROPERTIES: Ordered to File Chapter 11 Plan by April 27
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida has
ordered Hubbard Properties, LLC, to file a Chapter 11 Plan and
disclosure statement by April 27, 2011.
Hubbard Properties owns tourist and entertainment center John's
Pass Village in Madeira Beach, Florida. Hubbard Properties said
it owes $22 million to Investors Warranty of America.
Hubbard Properties, LLC, filed for Chapter 11 protection (Bankr.
M.D. Fla. Case No. 11-01274) in Tampa on Jan. 27, 2011. David S.
Jennis, Esq., Kathleen I. DiSanto, Esq., and J. A. McPheeters,
Esq., at Jennis & Bowen, P.L., in Tampa, Fla., serve as bankruptcy
counsel. In its schedules, the Debtor disclosed $12,572,058 in
assets and $23,829,629 in liabilities as of the petition date.
HUBBARD PROPERTIES: Files Schedules of Assets and Liabilities
-------------------------------------------------------------
Hubbard Properties, LLC, filed with the U.S. Bankruptcy Court
for the Middle District of Florida its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ------ -----------
A. Real Property $12,000,000
B. Personal Property $572,058
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $22,030,000
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $1,799,629
----------- -----------
TOTAL $12,572,058 $23,829,629
A copy of the schedules is available for free at:
http://bankrupt.com/misc/hubbardproperties.SAL.pdf
Hubbard Properties owns tourist and entertainment center John's
Pass Village in Madeira Beach, Florida. Hubbard Properties said
it owes $22 million to Investors Warranty of America.
Hubbard Properties, LLC, filed for Chapter 11 protection (Bankr.
M.D. Fla. Case No. 11-01274) in Tampa on January 27, 2011. David
S. Jennis, Esq., Kathleen I. DiSanto, Esq., and J. A. McPheeters,
Esq., at Jennis & Bowen, P.L., in Tampa, Fla., serve as bankruptcy
counsel. The Debtor estimated its assets and debts at $10 million
to $50 million as of the Petition Date.
HUBBARD PROPERTIES: IWA OK on Deferring "SARE" Issue Until April
----------------------------------------------------------------
Hubbard Properties, LLC, and Investors Warranty of America, Inc.,
ask the U.S. Bankruptcy Court for the Middle District of Florida
to reschedule the final evidentiary hearing on (a) the motion of
Investors Warranty of America, Inc., for determination that
Debtor is a single asset real estate case, and (b) the
Debtor's amended response in opposition to Investors Warranty of
America, Inc.'s motion, together with related deadlines, currently
scheduled for March 7, 2011, at 9:30 a.m., until the first
available hearing time on or after April 27, 2011.
The Debtor and Investors Warranty of America submit that
additional time is needed to allow the Debtor to formulate a plan
of reorganization, to facilitate any potential settlement, and to
conduct and complete any discovery in the event efforts at
settlement are not successful.
Hubbard Properties owns tourist and entertainment center John's
Pass Village in Madeira Beach, Florida. Hubbard Properties said
it owes $22 million to Investors Warranty of America.
Hubbard Properties, LLC, filed for Chapter 11 protection (Bankr.
M.D. Fla. Case No. 11-01274) in Tampa, Florida, on Jan. 27, 2011.
David S. Jennis, Esq., Kathleen I. DiSanto, Esq., and J. A.
McPheeters, Esq., at Jennis & Bowen, P.L., in Tampa, Fla., serve
as bankruptcy counsel. The Debtor estimated its assets and debts
at $10 million to $50 million as of the Petition Date.
HUDSON CITY: Completes Balance Sheet Restructuring
--------------------------------------------------
Hudson City Bancorp, Inc., the holding company for Hudson City
Savings Bank, announced on March 28, 2011, that it has completed a
restructuring of its balance sheet that significantly reduced
higher-cost structured borrowings and will allow for increased
future net interest income. As a result, the Bank expects to be
better able to grow and compete in the current and foreseeable
residential mortgage marketplace.
In a series of transactions executed this month, Hudson City paid
off $12.50 billion in structured quarterly putable borrowings,
funded by the sale of $8.66 billion of securities, and $5.00
billion of new shorter-term fixed maturity borrowings with an
average cost of 0.66%. These transactions will negatively impact
first quarter 2011 after-tax earnings by approximately $644
million or $1.30 per share. For the full year 2011, the loss from
the restructuring will be reduced by four quarters of earnings,
absent the restructuring charge.
Hudson City expects its Tier 1 leverage capital ratio will be
substantially unchanged by the restructuring transactions and is
expected to increase to more than 8.0% by March 31, 2011 due to
earnings in the first quarter of 2011 absent the transaction. As
a result of the restructuring transactions, the net interest
margin will improve by as much as 40 basis points for the second
quarter of 2011 as compared to the fourth quarter of 2010.
The Bank's core business operations are performing in accordance
with management's expectations, and should continue to do so in
the three remaining quarters of 2011. The Company expects to
continue paying a dividend at a rate to be determined by the Board
of Directors at its meeting on April 19, 2011.
JP Morgan acted as adviser to the Company on the balance sheet
restructuring strategy.
Hudson City's decision to restructure reflects five critical
parameters:
* Interest rate risk: Structured quarterly putable borrowings
represented a significant portion of Hudson City's interest
rate risk exposure, both in current market pricing (reflected
in our calculation of net portfolio value) and sensitivity to
price changes from interest rate movements. Removing these
borrowings from our balance sheet is a necessary first step
to mitigate the current price risk exposure. In future
quarters, the Bank intends to further modify or hedge certain
of the remaining putable borrowings to reduce our exposure to
price sensitivity from interest rate movements. These
modifications will not result in extinguishment charges to
income. Putable borrowings remaining after the restructuring
total approximately $16.6 billion.
* Reduction of liquidity concerns: Borrowings subject to
quarterly put options can cause uncertainty regarding when
the borrowings will have to be repaid. By extinguishing a
large portion of these borrowings, uncertainty regarding
future cash outflows is substantially reduced.
* Reduction of low-yielding investments: By selling mortgage-
backed securities with a weighted-average yield of
approximately 3.20%, the Bank is reducing the risk inherent
in holding these securities in a rising-rate environment.
* Realignment of the overall funding mix: This restructuring
reduces putable borrowings' share of total non-equity
funding to 35% from its past 53% level. This realigned
funding mix will ease margin compression and give the Bank
a greater opportunity to control the cost of interest-bearing
liabilities.
* Future growth potential: By reducing the mismatch of
investing and funding rates, Hudson City will be better
positioned to take advantage of a rising rate environment
and begin to grow assets.
Ronald E. Hermance, Jr., Chairman and Chief Executive Officer of
the Company, commented on the restructuring, "Since our two highly
successful public offerings, we have constructed a balance sheet
that we believe returned substantial value to our shareholders.
The balance sheet was managed with a focus on fundamental banking
by originating and purchasing 1-4 family first mortgage loans with
substantial down payments. This focus has provided the Bank with
charge-offs that are still low by industry standards. Asset
quality and levels of anticipated charge-offs are not expected to
change as a result of the restructuring, as the restructuring was
not predicated upon these items. We funded our growth using a mix
of deposits and borrowings that, given normal market conditions,
would have matched well with the longer term assets we placed on
the balance sheet. In essence, the balance sheet was built to
handle normal interest rate volatility."
Mr. Hermance continued, "However, recent market events and the
unprecedented involvement of the United States government in both
the mortgage markets, through the government-sponsored enterprises
(the "GSEs"), and the maintenance of low market interest rates,
have resulted in an environment that has caused our balance sheet
to be less responsive to current market conditions. The extended
low interest rate environment has caused accelerated prepayment
speeds on our mortgage-related assets resulting in reinvestment in
these instruments at the current low market interest rates. These
lower-yielding assets and higher-cost borrowings, which did not
reprice during this extended low rate environment, have caused
interest rate risk and margin compression concerns for us. We
believe that when interest rates increase beyond where they are
today, the extension of the low yielding assets will cause greater
pressure on both these factors."
Mr. Hermance added, "Accordingly, we undertook this balance sheet
restructuring at a time when market interest rates are beginning
to increase with the intent on preserving our shareholders' equity
as much as reasonably possible and yet executing a trade that
looks to increase our forward earnings potential. We chose to
extinguish structured quarterly putable borrowings to address
interest rate risk and liquidity concerns that this extended low
interest rate environment exacerbated. We expect that this
transaction will position us to eventually return to our core
strategy of measured balance sheet growth funded with
appropriately matched liabilities. As a result of this
transaction, we should be properly positioned to do this when the
market conditions change. When the anticipated GSE reform is
enacted and a substantial portion of the mortgage market is
returned to the private sector, we believe we will be able to
capture a greater share of this market more profitably."
Mr. Hermance concluded, "We have analyzed this restructuring
carefully, as well as other potential actions to address our
balance sheet, interest rate risk and liquidity concerns, and
concluded that the transactions we have completed are in the best
interest of the long term health of the balance sheet and future
earnings of the institution and are consistent with regulatory
guidelines and directives regarding interest rate risk and
liquidity applicable to banks and thrifts."
Based in Paramus, New Jersey, Hudson City Bancorp, Inc., is a bank
holding company for Hudson City Savings Bank, its only subsidiary,
the largest savings bank in New Jersey, and one of the oldest
banks in the United States, with US$50 billion in assets.
IMPACT CASH: SEC Halts $47 Million Investment Fraud
---------------------------------------------------
The Securities and Exchange Commission obtained a court order
freezing the assets of two online payday loan companies and their
owner charged with perpetrating a $47 million offering fraud and
Ponzi scheme.
The SEC alleges that John Scott Clark of Hyde Park, Utah, promised
investors astronomical annual returns of 80% on their investments
in his companies -- Impact Cash LLC and Impact Payment Systems
LLC. Investors were told their money would be kept in separate
bank accounts and used to fund payday loans and other aspects of
the companies' operations. However, Clark instead commingled
investor funds into a single pool and used them to make
unauthorized investments, pay fictitious profits to earlier
investors, and finance his own lavish lifestyle.
"Investors were promised extraordinary returns while Clark was
actually diverting their money to make such extraordinary personal
purchases as a fully restored classic 1963 Corvette Stingray,"
said Ken Israel, Director of the SEC's Salt Lake Regional Office.
"Clark recruited new investors through referrals from earlier
investors who thought the Ponzi payments they received were actual
returns on their investments and sought to share the lucrative
opportunity with family and business associates."
The SEC alleges that in addition to buying multiple expensive cars
and snowmobiles, Clark stole investor funds to purchase a home
theater, bronze statues and other art for himself.
According to the SEC's complaint filed in U.S. District Court for
the District of Utah, Clark lured at least 120 investors into his
scheme. Besides word-of-mouth referrals from earlier investors,
Clark also recruited investors by attending trade shows in various
states, attending payday loan conferences, and paying salespeople
to locate potential investors to meet with Clark. He paid one
salesperson more than a half-million dollars over a multi-year
period to locate potential investors and attend payday loan
conferences and trade shows.
The SEC alleges that from at least March 2006 to September 2010,
Clark and the Impact companies raised funds from investors for the
stated purposes of funding payday loans, purchasing lists of leads
for payday loan customers, and paying Impact's operating expenses.
Impact did not distribute a private placement memorandum or any
other document disclosing the nature of the investment or the
risks involved to investors. The SEC's complaint charges Impact
and Clark with fraudulently selling unregistered securities.
According to the SEC's complaint, Clark routinely altered investor
account statements provided to him by Impact's accounting
department to create artificially high annual rates of return. The
altered account statements with purported profits were then sent
to investors. Account statements to customers showed annualized
returns varying from 30% to more than 200%.
In addition to the asset freeze approved late Friday, the court
has appointed a receiver to preserve and marshal assets for the
benefit of investors. The SEC's complaint seeks a preliminary and
permanent injunction as well as disgorgement, prejudgment interest
and financial penalties from Impact and Clark.
This matter was investigated by Jennifer Moore, Justin Sutherland
and Marie Elliott of the SEC's Salt Lake Regional Office, and the
litigation will be led by Tom Melton. The SEC appreciates the
assistance of the Utah Division of Securities in this matter.
ISE CORP: SSG Served as Adviser on Bluways Asset Sale
-----------------------------------------------------
SSG Capital Advisors, LLC, acted as investment banker to ISE
Corporation in its sale to Bluways USA, Inc. pursuant to Section
363 of the United States Bankruptcy Code in the U.S. Bankruptcy
Court for the Southern District of California. The sale was
approved on Jan. 12, 2011 and the transaction closed on
Jan. 31, 2011.
Bluways, a subsidiary of Bluways NV, is a Belgian system
integrator and supplier of hybrid electric drive systems and
components for heavy-duty applications. The company is a premier
manufacturer of high tech products in the field of drive
technology and power control electronics for a wide variety of
customers in the automobile industry.
Due to liquidity constraints, ISE filed for protection under
Chapter 11 in the U.S. Bankruptcy Court for the Southern District
of California on Aug. 10, 2010. SSG along with Cabrillo Advisors
LLC, was retained as the Company's investment banker to conduct a
sale process pursuant to Section 363 of the U.S. Bankruptcy Code.
The sale process yielded six qualified bidders, but each bidder
had interest in a different subset of the Company's assets. SSG
managed through this complexity by holding several sub-auctions to
create a consortium of buyers that could then compete with a
separate party that had interest in the entire business. After
many hours and several rounds of bidding that generated a multiple
increase in sale proceeds, Bluways was deemed the highest and best
bidder. Jobs were saved as the business was sold as a going
concern.
Other professionals who worked on the transaction include:
* Marc J. Winthrop, Garrick A. Hollander and Payam Khodadadi
from Winthrop Couchot, Debtor's Counsel;
* T. Scott Avila, Allen Soong and David W. Tiffany from CRG
Partners, Debtor's Chief Restructuring Officer;
* Channing Hamlet, Wade Hansen and Don Wanner from Cabrillo
Advisors, Debtor's Co-Investment Banker;
* Mark F. Thomann, Robert Aronoff, Craig Carothers and Myron J.
Kassaraba from Pluritas, Debtor's Intellectual Property
Advisory Firm;
* Jeffrey N. Pomerantz and Shirley S. Cho from Pachulski Stang
Ziehl & Jones, Counsel to Unsecured Creditors' Committee; and
* William K. Creelman and Alexander Koles from BDO Consulting,
Financial Advisor to Unsecured Creditors' Committee.
About SSG Capital Advisors, LLC
SSG Capital Advisors, LLC (Member FINRA, SIPC) is a wholly owned
broker dealer of SSG Holdings, LLC. SSG is a trade name for SSG
Capital Advisors, LLC. SSG provides investment banking,
restructuring advisory, merger, acquisition and divestiture
services, private placement services and valuation opinions.
About ISE Corporation
ISE Corporation, a California corporation, fka ISE Research
Corporation, is the operating subsidiary of Ise Limited. ISE Corp
-- http://www.isecorp.com/-- makes drive train systems for
hybrid gasoline/electric buses. Established in 1995, ISE is
headquartered in San Diego, California. It filed for Chapter 11
protection (Bankr. S.D. Calif. Case No. 10-14198) on Aug. 10,
2010. Marc J. Winthrop, Esq., at Winthrop Couchot Professional
Corp, assists the Debtor in its restructuring effort. The Debtor
estimated its assets at $10 million to $50 million and its debts
at $10 million to $50 million as of the Petition Date.
ITRON INC: Moody's Upgrades Corporate Family Rating to 'Ba2'
------------------------------------------------------------
Moody's Investors Service upgraded Itron Inc.'s corporate family
and probability of default ratings to Ba2 from Ba3, upgraded its
senior secured ratings to Ba1 from Ba2 and assigned a speculative
grade liquidity rating of SGL-2, indicating good liquidity. The
ratings outlook was changed to stable from positive. The ratings
upgrade reflects the company's strong operating results through
2010 and solid key credit metrics which provide meaningful
cushion to withstand an expected modest reduction in operating
profitability through 2011 driven by slower deployment of Advanced
Metering Infrastructure contracts and rising material costs.
Ratings Rationale
Itron's Ba2 corporate family rating primarily reflects its
strong global leadership among metering companies, its
competitive positioning with respect to AMI, good degree of
recurring replacement revenues, favorable diversification
characteristics within its niche industry and strong key
credit metrics. These strengths are offset by the company's
vulnerability to the spending cycles of utilities, possible
smart metering implementation delays, competitive pressures
from new market entrants and rising commodity costs which may
weigh on margins.
Itron generated strong results in 2010 driven mostly by an
increase in smart metering shipments tied to its four large
AMI contracts for electric utilities in North America. Itron
increased its adjusted EBITDA to $335 million (up 52% from 2009)
and applied free cash flow to reduce debt by $170 million (down
22% from 2009). As a result, its Debt/EBITDA improved to 2.3x
(incorporating Moody's standard adjustments) compared to 4.3x at
the end of 2009. While current AMI contracts will continue to
drive the company's results through the next 12 to 18 months,
Moody's expect Itron's revenues, profitability, and cash flow will
reduce modestly compared to 2010 levels. This reflects Moody's
view that future AMI deployment and contract wins could occur more
slowly as deployment to-date has been positively influenced by
regulatory and government stimulus initiatives and these catalysts
appear to be easing.
Itron's SGL-2 rating is supported by cash balances of roughly
$170 million, Moody's expectations for average annual free cash
flow generation around $100 million, and $271 million in
availability (after $44 million of L/C usage) under its committed
revolving credit facility due 2013. These resources should be
ample to fund Itron's $224 million (face value) in convertible
subordinated notes, which represent its earliest possible debt
maturity and could be put to the company in August 2011 (or
earlier should its share price trade above certain thresholds
which is not met currently). Moody's also do not anticipate
covenant compliance problems through at least the next year.
The ratings outlook is stable to reflect Moody's expectation that
Itron's strong market position and favorable diversification
characteristics should support its ability to generate free cash
flow to repay debt and sustain its financial leverage around 2.3x
through the next 12 to 18 months.
To further upgrade Itron's ratings, Moody's will need to gain
comfort that future AMI deployments will sustain the company's
growth into the medium term. Upward rating movement would then be
considered should Itron sustain its Debt/ EBITDA close to 2x and
EBITA/ Interest above 4.5x. Given the ratings upgrade, a near
term ratings downgrade is unlikely. However, a downgrade could
occur should adjusted Debt/ EBITDA be sustained above 3.5x or
EBITA/ Interest fall below 3x.
Moody's last rating action was on June 2, 2010 when Moody's
upgraded Itron's CFR to Ba3 and maintained a positive ratings
outlook.
Headquartered in Liberty Lake, Washington, Itron is a leading
provider of metering and related communication systems to
electric, gas and water utilities globally. Revenues for the last
fiscal year ended Dec. 31, 2010, were about $2.3 billion.
KENNEDY-WILSON: Moody's Assigns 'B1' Rating to Senior Notes
-----------------------------------------------------------
Moody's Investors Service has assigned a first-time rating of
(P)B1 to the proposed senior unsecured notes of Kennedy Wilson,
Inc., a wholly-owned subsidiary of Kennedy-Wilson Holdings, Inc.
Concurrently, Moody's assigned a B1 corporate family rating to
Kennedy Wilson. The rating outlook is stable. This is the first
time that Moody's has rated Kennedy Wilson, a real estate
investment and services firm with over $7 billion of assets under
management.
These ratings were assigned with a stable outlook:
Kennedy Wilson, Inc.
-- (P)B1 to the proposed senior unsecured notes
-- B1 corporate family rating
Ratings Rationale
Kennedy Wilson proposes to issue $200 million in senior unsecured
notes due 2019, under Rules 144A / Reg. S. The notes will rank
pari passu with other unsecured debt. The notes have various
covenants including: limitations on the incurrence of additional
debt, guarantees, and restricted payments. Proceeds from this
transaction will be used to pay down approximately $78 million of
corporate debt, with the remainder to be utilized for future
acquisitions and co-investments as well as for general corporate
purposes.
The B1 senior unsecured debt and corporate family ratings reflect
the company's vertically-integrated operating platform, which
differentiates its investment proposition for investors, and its
long-standing network of relationships that generates investment
opportunities for the company and its capital partners. KW
Investments (approximately 70% of total revenues) co-invests in
and manages separate accounts and closed-end funds that acquire
multifamily, residential and office properties as well as loans
secured by real estate. KW Services (approximately 30% of total
revenues) provides property management, auction and conventional
sales in addition to investment management. These businesses are
complementary to one another, with KW Services often acting as a
source for off-market real estate investments while KW Investments
has become a growing source of fee business for KW Services.
These strengths are counterbalanced by KW's material geographic
concentration, with investments in California (42.1%), Tokyo,
Japan (31.5%) and Hawaii (15.8%). In addition, KW's single
largest investment, a multifamily portfolio in Tokyo, Japan,
represents 30% of the firm's investment account. Also of concern
is KW's complex ownership structure, with over 70% of investments
held in joint ventures and funds. Furthermore, while the company
holds relatively moderate amounts of debt at the corporate level,
there is high use of off-balance sheet secured debt. Moody's
notes that the bulk of this off-balance sheet debt is in the form
of mortgages, which are non-recourse to the company and have
relatively low average loan-to-values (approximately 50%).
Kennedy Wilson is a small company with limited experience as a
public company. The company has grown significantly over the past
two years with 90% asset growth from 2008 to 2010. The rating
takes into account continued rapid growth over the near-term,
while assuming that KW will successfully scale its infrastructure
to meet the needs of its capital partners in KW Investments.
Finally, Moody's note that loss of key executives, and in
particular William McMorrow, CEO, could lead to loss of business
as these individuals' deep and long standing client relationships
have been relied upon over the years for deal flow.
The stable outlook reflects Moody's expectation that Kennedy
Wilson will scale its business successfully through the rapid
growth in KW Investments, while improving its credit metrics and
maintaining adequate liquidity.
An upgrade would be precipitated by an increase in size and
geographic diversity, reduction in on- and pro-rata off- balance
sheet effective leverage below 65% and growth in income-generating
unencumbered assets. A downgrade would be prompted by loss of key
business relationships, investment underperformance which would
result in lower fixed charge coverage and effective leverage
closer to 80% (on- and pro-rata off- balance sheet).
Kennedy-Wilson Holdings, Inc., is an international real estate
investment and services firm. The company has grown from a real
estate auction business into a vertically-integrated real estate
operating company with over $7 billion of assets under management
totaling over 40 million square feet of properties throughout the
United States and Japan, including ownership in 11,971 multifamily
apartment units.
KENNEDY-WILSON: S&P Puts 'BB-' Counterparty Credit Rating
---------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned a 'BB-'
long-term counterparty credit rating to Kennedy-Wilson Holdings
Inc. The outlook is stable. At the same time, S&P assigned a
'BB-' rating to the proposed $200 million in senior unsecured
notes to be issued by KW's principal subsidiary, Kennedy-Wilson
Inc., and guaranteed by Kennedy-Wilson Holdings and its U.S.-based
subsidiaries.
"S&P's ratings on KW, a CRE investment and services firm, reflect
the company's solid investment performance, strong niche position
serving financial institutions, and its liquidity management,"
said Standard & Poor's credit analyst Brendan Browne. The
company's geographic and CRE concentrations, its overall small
market share in CRE services, and modest EBITDA coverage limit the
rating.
KW offers a range of CRE services such as auction, property
management, brokerage, and leasing to financial institutions and
other real estate owners. It began investing in CRE through joint
ventures and closed-end funds in 1999. Since then, its JVs and
funds have generated an internal rate of return on their realized
investments of 43%. The company prudently avoided investing
heavily from 2005 to 2007, instead selling many properties.
Assets purchased in 2010 comprise most of its current portfolio.
It also has focused on multifamily properties in densely populated
areas with low vacancy rates. KW is now looking to capitalize on
the distress in CRE markets and grow its investment portfolio
substantially. Rapid investment growth might bring additional
risk. KW will use its proposed $200 million offering of senior
unsecured notes partly to help finance this growth.
S&P believes the company has been successful in sourcing
attractive investments through its niche positions in select
geographies and by providing services to banks and other real
estate owners. KW's services unit has provided auction, property
management, and other services for banks. Its relationships with
those banks and the market knowledge from KW's services unit have
enabled the company to find appealing investment opportunities.
KW's lack of geographic diversification and several large
individual investments also heavily expose it to the California
economy and to a lesser extent Hawaii and Japan. CRE problems in
any of these areas could be highly detrimental. Compounding that
risk, KW's services business has significant ties to its
investment business.
The outlook is stable because S&P expects earnings to improve
moderately and the company to avoid any outsize losses in its
investment portfolio. S&P could raise the rating if earnings
increase more than S&P expect, and without significant changes in
KW's leverage or risk profile. S&P could lower the rating if the
investment portfolio performs worse than S&P expects or if CRE
markets decline substantially.
KEYSTONE AUTOMOTIVE: Closes Out-of-Court Restructuring
------------------------------------------------------
Keystone Automotive Operations, Inc. along with its subsidiaries
and affiliates said Tuesday it closed on March 28, 2011, its
exchange offer and consent solicitation, whereby it has exchanged
approximately $172.7 million aggregate principal amount of its
9-3/4% Senior Subordinated Notes due 2013 (CUSIP No. 49338PABO)
for an estimated 22% of the new common stock of Keystone's holding
company and the ability to purchase each noteholder's pro rata
share of New Common Stock pursuant to a rights offering, upon the
terms and subject to the conditions set forth in the Offering
Memorandum and Disclosure Statement, dated February 15, 2011 and
the related letter of transmittal and consent, including any
amendments or supplements thereto.
Kirkland & Ellis LLP acted as legal advisor to the Company.
Miller Buckfire & Co. acted as investment banker for the Company.
FTI Consulting, Inc. acted as financial advisor to the Company.
The Garden City Group, Inc. acted as exchange agent and
information agent for the Exchange Offer.
Willkie Farr & Gallagher LLP acted as legal advisor to the ad hoc
committee of the majority holders of the Senior Subordinated
Notes. Latham and Watkins LLP acted as legal advisor to the agent
of the Company's new term loan credit facility. Bingham McCutchen
LLP acted as legal advisor to the agent of the Company's new
revolving credit facility.
As reported by the Troubled Company Reporter on Feb. 18, 2011,
Keystone Automotive Operations launched the and a solicitation of
acceptances of a prepackaged plan of reorganization.
The closing of the Exchange Offer was conditioned upon, among
other things, 98% of the aggregate principal amount of Senior
Subordinated Notes being validly tendered and not withdrawn, which
percentage may be modified by mutual agreement of the Company and
certain of the Company's stakeholders. If the Minimum Tender
Condition was not satisfied or another condition to the closing of
the Exchange Offer was not met, the Company intended to implement
a restructuring by commencing cases under chapter 11 of the United
States Bankruptcy Code and seeking confirmation of a prepackaged
plan of reorganization.
About Keystone Automotive
Headquartered in Exeter, Pennsylvania, Keystone Automotive
Operations, Inc. and its affiliates are wholesale distributors and
retailers of aftermarket automotive accessories and equipment,
with operations servicing customers in all regions of the United
States and provinces of Canada, as well as various other
international locations. The Company's fleet of over 300 trucks
provide multi-day per week delivery and returns covering the 48
contiguous states and nine provinces of Canada. The Company sells
and distributes specialty automotive products, such as light
truck/SUV accessories, car accessories and trim items, specialty
wheels, tires and suspension parts, and high performance products
to a fragmented base of approximately 15,000 customers. The
Company's wholesale operations include an electronic service
strategy providing customers the ability to view inventory and
place orders via its proprietary electronic catalog. The Company
also operates 20 retail stores in Pennsylvania.
At October 2, 2010, the Company had total assets of $387,843,000,
total liabilities of $461,476,000, and shareholder's deficit of
$73,633,000.
LACK'S STORES: Will Auction Victoria Store Property on April 6
--------------------------------------------------------------
Lack's Stores, Incorporated, et al., will auction a real property
on April 6, 2011, at 2:30 p.m., prevailing Central time, at the
United States Courthouse, Courtroom of the Honorable Jeff Bohm,
515 Rusk Avenue, Houston, Texas.
On Jan. 12, 2011, the Court approved the procedures and bid
protections for the sales of real property free and clear of
liens, claims, encumbrances, and other interests in which it
approved, among other things, a procedure for the sale of certain
real property and improvements owned by the Debtor.
The property to be sold consists of the real property and
improvements located in Store No. 106 at 5802 North Navarro,
Victoria, Texas, and any other assets as set for in the purchase
and sale agreement.
Lack Properties, Tim LaQuay and Linda LaQuay have executed that
certain PSA dated effective as of Feb. 9, 2011, relating to the
real property and improvements at 5802 North Navarro, Victoria,
Texas.
Lack Properties, Lack's Stores, Incorporated, Merchandise
Acceptance Corporation, and Lack's Furniture Centers, Inc., seek
Court approval of the PSA, subject to higher or better offers as
more particularly set forth in the sale procedures. The Debtors
propose that the sale be free and clear of all liens, claims,
encumbrances, and other interests, with any holder's lien, claim,
encumbrance, or other interest attaching to the proceeds of the
sale with the same nature, validity, and priority of that interest
prior to the proposed sale.
The Proposed Purchaser -- the LaQuays -- has agreed to purchase
the real property for $2.2 million cash at closing plus other
consideration, all of which is subject to the sale procedures.
Cash amounts of bids must be at least $55,000 in excess of the
consideration payable by the Proposed Purchaser under the PSA, and
with respect to each subsequent round of bidding at the Auction is
in excess of the aggregate consideration contained in the highest
standing qualified bid by an amount determined to be appropriate
by the Debtors prior to, at, or during the Auction.
Bids must be accompanied by reasonably satisfactory evidence of
committed financing or other ability to perform the transaction
and provides an earnest money deposit of 10% of the proposed
purchase price in the form of a certified check or wire transfer
to the Debtors in care of Chicago Title Insurance Company for the
sale of the real property, the Earnest Money Deposit being
refundable if the bid is not approved by the Court as the highest
bid.
Bids for the property must be submitted by April 1, 2011, at
4:00 p.m., prevailing Central Time.
Objections to the proposed sale of the real property must be filed
with the Court by April 1, 2011, at 4:00 p.m., prevailing Central
Time.
Hearing on the approval for the result of the sale is set for
April 6, 2011, at 2:30 p.m., prevailing Central Time, at the
United States Courthouse, Courtroom of the Honorable Jeff Bohm,
515 Rusk Avenue, Houston, Texas.
The closing of the sale of the real property will occur five
business days after the Court enters the sale order. If the Court
does not enter the sale order by May 10, 2011, the purchase and
sale agreement may be terminated.
If the successful bidder fails to consummate the purchase of the
real property, and the failure to consummate the purchase is the
result of a breach by the successful bidder, the Earnest Money
Deposit of the successful bidder will be forfeited to the Debtors,
and the Debtors specifically reserve the right to seek all
available damages from the defaulting successful bidder.
If the successful bidder fails to consummate the purchase of the
real property, the qualified bidder that had submitted the next
highest or otherwise best qualified bid at the Auction will be
deemed to be the successful bidder and the Debtors will be
authorized to consummate the sale of the real property with the
back-up bidder without further order of the Court and the
qualified bid will thereupon be deemed the successful bid.
A copy of the sale procedures is available for free at:
http://bankrupt.com/misc/LACKS_STORE_saleprocedures.pdf
About Lack's Stores
Victoria, Texas-based Lack's Stores, Incorporated, is one of the
largest, independently owned retail furniture chains in the United
States. Lack's Stores is a chain of 36 retail stores and operates
under the trade styles Lacks and Lacks Home Furnishings. The
Company sells a complete line of furnishings for the home
including furniture, bedding, major appliances and home
electronics. The stores are located in South, Central, and West
Texas.
Lack's Stores and its affiliates filed for Chapter 11 bankruptcy
protection (Bankr. S.D. Tex. Lead Case No. 10-60149) on Nov. 16,
2010. The Debtor disclosed $182,023,008 in assets and
$136,813,103 in liabilities as of the Chapter 11 filing.
Katherine D. Grissel, Esq., Michaela Christine Crocker, Esq., and
Richard H. London, Esq., at Vinson & Elkins LLP, serve as counsel
to the Debtor. Huron Consulting Group, Inc., is the financial
advisor.
The Official Committee of Unsecured Creditors formed in the
Chapter 11 case has tapped Platzer, Swergold, Karlin, Levine,
Goldberg & Jaslow, LLP, as bankruptcy counsel; Strong Pipkin
Bissell & Ledyard, L.L.P., as local counsel; and The Conway Mac
Kenzie, Inc., is the financial advisor.
LAS VEGAS MONORAIL: District Judge to Decide on Circuit Appeal
--------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that ordinarily, a motion to take an appeal directly to
the U.S. Court of Appeals is filed in the bankruptcy court and
decided by the bankruptcy judge. If the appeal already has been
docketed in the district court, then the district court is the
proper court to decide if the appeal should go directly to the
circuit court, according to a March 28 opinion by U.S. District
Judge James Mahan in Las Vegas. According to the report, Judge
Mahan said he was the proper judge to decide on direct appeal even
if he had already ruled that the order from the bankruptcy court
wasn't final and not proper for appeal. The case is Ambac
Assurance Corp. v. Las Vegas Monorail Co. (In re Las Vegas
Monorail Co.), 10-678 (D. Nev.).
About Las Vegas Monorail
Las Vegas, Nevada-based Las Vegas Monorail Company, organized by
the State of Nevada in 2000 as a nonprofit corporation, owns and
manages the Las Vegas Monorail. The Monorail is a seven-stop,
elevated train system that travels along a 3.9-mile route near the
Las Vegas Strip. LVMC has contracted with Bombardier Transit
Corporation to operate the Monorail. Though it benefits from its
tax-exempt status due to being a nonprofit entity, LVMC claims to
be the first privately-owned public transportation system in the
nation to be funded solely by fares and advertising. LVMC says it
receives no governmental financial support or subsidies.
The Company filed for Chapter 11 bankruptcy protection on
January 13, 2010 (Bankr. D. Nev. Case No. 10-10464). Gerald M.
Gordon, Esq., at Gordon Silver, assists the Company in its
restructuring effort. Alvarez & Marsal North America, LLC, is the
Debtor's financial advisor. Stradling Yocca Carlson & Rauth is
the Debtor's special bond counsel. Jones Vargas is the Debtor's
special corporate counsel. The Company disclosed $395,959,764 in
assets and $769,515,450 in liabilities as of the Petition Date.
In May 2010, Ambac Assurance Corp. lost its bid to stay the
bankruptcy case while a district court considers whether the
bankruptcy court wrongly rejected Ambac's argument that Monorail
was a municipality and thus ineligible to be a Chapter 11 debtor.
LEHMAN BROTHERS: Agrees to Pay $400,000 to Edgewood
---------------------------------------------------
Lehman Brothers Holdings Inc. entered into an agreement to settle
Edgewood Management LLC's claim against the company.
Under the settlement deal, LBHI agreed to pay $400,000 in
exchange for the withdrawal of the motion filed by Edgewood
Management for the turnover of $505,936 of cash held as an open
item in LBHI's account at Bank of America.
The $505,936 was generated from the sale of Lehman Brothers
Inc.'s shares of stock of Vestas Wind Systems, which Edgewood
Management was holding for its client, Edgewood Growth Fund. It
was supposed to be wired to EGF's account at U.S. Bank, however,
LBHI filed for bankruptcy protection in September 2008, and all
its bank accounts including the BofA account were frozen.
The settlement also calls for the disallowance of Edgewood
Management's claim on account of the funds, and the release of
any other claim it may have against LBHI.
The deal, which the Court approved on March 23, 2011, is
formalized in a five-page stipulation, a full-text copy of which
is available for free at:
http://bankrupt.com/misc/LBHI_StipEdgewood.pdf
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
disclosed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
Additional units, Merit LLC, LB Somerset LLC and LB Preferred
Somerset LLC, sought for bankruptcy protection in December 2009 or
more than a year after LBHI and its other affiliates filed their
bankruptcy cases.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on Sept. 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: U.S. Trustee Opposes Milbank Employment
--------------------------------------------------------
Tracy Hope Davis, the U.S. Trustee for Region 2, has criticized
the proposed employment of professionals who are part of the Tax
Account and Analysis Recovery Services program of Milbank Tweed
Hadley & McCloy LLP.
Trial attorney, Andrea Schwartz, Esq., who represents the U.S.
Trustee, said the proposed employment presents "potential
conflicts of interest" given that Milbank serves as legal counsel
to the Official Committee of Unsecured Creditors.
"Milbank, as counsel to the Creditors' Committee, may represent
interests adverse to the Debtors with respect to the tax matters
for which they would be retained," Ms. Schwartz said in a court
filing.
The trial attorney also pointed out that some of the
professionals who are part of the TAARS program are not lawyers.
Citing Section 327(e) of the Bankruptcy Code, she said the
provision is limited to the retention of attorneys for special
service purposes and may not be extended to the retention of non-
lawyers.
Ms. Schwartz further said the proposed employment is not
reasonable given that there are other firms available to provide
similar services. She pointed out that the Debtors already have
retained no fewer than five major law firms with extensive
litigation departments.
"It appears likely that tax litigation will fall within the
expertise of at least one of these firms, if not all," the trial
attorney further said.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
disclosed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
Additional units, Merit LLC, LB Somerset LLC and LB Preferred
Somerset LLC, sought for bankruptcy protection in December 2009 or
more than a year after LBHI and its other affiliates filed their
bankruptcy cases.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on Sept. 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Wins OK for Latham to Pursue Claims vs. Aegis
--------------------------------------------------------------
Lehman Brothers Holdings Inc. received the U.S. Bankruptcy Court's
authority to expand the scope of services provided by its special
counsel, Latham & Watkins LLP.
LBHI wants the firm to provide additional services including the
prosecution of claims against Aegis Mortgage Corp. and its
affiliates. Aegis Mortgage is an originator of residential
mortgage loans, some of which were conveyed to LBHI.
Prior to LBHI's bankruptcy filing, Latham & Watkins filed a claim
in the sum of $34 million against Aegis Mortgage on account of
the mortgage loans. The claim was filed on behalf of Aurora Loan
Services LLC, a subsidiary of LBHI.
The Debtors previously obtained approval of the U.S. Bankruptcy
Court to employ Latham & Watkins LLP as their special counsel to
represent them in a workout of a number of loans made to entities
controlled by Alan J. Worden, and provide advice concerning the
matters raised in proofs of claim against LBHI, which LBREM Reit
Holdings LLC and El Toro LLC filed in 2009. Latham & Watkins will
also represent Lehman Commercial Paper Inc. under various credit
agreements.
Latham & Watkins will be paid for its services on an hourly basis
and will be reimbursed for its expenses. The firm's hourly rates
are:
Professionals Hourly Rates
------------- -------------
Partners $780 - $1,090
Counsel $755 - $885
Associates $435 - $755
Paralegals $190 - $340
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
disclosed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
Additional units, Merit LLC, LB Somerset LLC and LB Preferred
Somerset LLC, sought for bankruptcy protection in December 2009 or
more than a year after LBHI and its other affiliates filed their
bankruptcy cases.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on Sept. 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Taps Locke Lord for Suit vs. Mortgage Lenders
--------------------------------------------------------------
Lehman Brothers Holdings Inc. and its affiliates received the U.S.
Bankruptcy Court for the Southern District of New York's authority
to employ Locke, Lord, Bissell & Liddell LLP as their special
counsel effective July 1, 2010.
Locke Lord has previously provided legal services to the Debtors
as a professional utilized in the ordinary course of business.
Its fees and expenses, however, are expected to exceed the $1
million compensation cap for "ordinary course" professionals,
prompting the Debtors to hire the firm pursuant to Sections 327
of the Bankruptcy Code.
The firm will continue to provide the same services, including
representing LBHI in the prosecution of matters in which the
company sued correspondent lenders for selling defective mortgage
loans to its affiliate.
In return for its services, Locke Lord will be paid on an hourly
basis and will be reimbursed for its expenses. The firm's hourly
rates are:
Professionals Hourly Rates
------------- ------------
Partners $425 - $705
Associates $245 - $420
Other Professionals $185 - $250
In a declaration, Robert Mowrey, Esq., at Locke Lord Bissell &
Liddell, assures the Court that his firm does not represent or
hold any interest adverse to the Debtors and their estates.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
disclosed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
Additional units, Merit LLC, LB Somerset LLC and LB Preferred
Somerset LLC, sought for bankruptcy protection in December 2009 or
more than a year after LBHI and its other affiliates filed their
bankruptcy cases.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on Sept. 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: LBI Claim Transfers for July to February
---------------------------------------------------------
The Office of the Clerk of the Bankruptcy Court received notices
of transfer of these claims in the SIPA liquidation proceeding of
Lehman Brothers Inc. from July 2010 to February 2011:
Transferee Transferor Claim No. Claim Amount
---------- ---------- --------- ------------
- Lynn P.
Harrison III - -
Harmonic Currency US Debt
Master Fund Recovery V, LP 800001774 $489,233
Harmonic Global US Debt
Fund Recovery V, LP 800001771 10,276
Harmonic Alpha US Debt
Plus Global Recovery V, LP
Currency Fund 800001779 5,617
NB Offshore Northumbrian
Diversified Management,
Arbitrage Trust L.L.C. 4934 14,068,773
Strategic Northumbrian
Commodities Management,
Master Fund, Ltd. L.L.C. 4936 1,505,621
NB Relative Value Northumbrian
Portfolio Trust Management,
L.L.C. 4938 2,827,326
Neuberger Berman Northumbrian
GTAA Unit Trust I Management, L.L.C. 6193 2,252,384
JPMorgan Chase Lazaret Partners,
Bank, N.A. L.L.C. 4462 3,431,815
Drawbridge Global Solstar Partners,
Macro Master Fund L.L.C.
Ltd. 800002253 4,734,121
Drawbridge Global Solstar Partners,
Macro Master Fund L.L.C.
Ltd. 800002257 27,036
Drawbridge Global Solstar Partners,
Macro Master Fund L.L.C.
Ltd. 800002259 2,083,833
Drawbridge Global Solstar Partners,
Macro Master Fund L.L.C.
Ltd. 800002262 1,920,258
Drawbridge Global Solstar Partners,
Macro Master Fund L.L.C.
Ltd. 800002263 62,809,775
Drawbridge Global Solstar Partners,
Macro Master Fund L.L.C.
Ltd. 900007986 42,634,171
Legg Mason USS Western Asset
Core Bond Fund US Core Bond
Fund - 192,781
INVISTA Textiles Western Asset
(U.K.) Limited US Core Bond
Pension Plan Fund - 17,406
Sailfish Multi- Sailfish
Strategy Fixed Investment
Income Master Management
Fund LLC 00003189 6,200,000
Intesa Sanpaolo SpA Goldman Sachs
Lending
Partners LLC - $3,744,664
John Hancock II Morgan Stanley
Strategic Bond Senior Funding
Fund Inc. 2598 66,195
John Hancock II Morgan Stanley
Strategic Bond Senior Funding
Fund Inc. 2626 75,281
Western Asset Legg Mason
US Core Plus Western Asset
Bond Fund US Core Plus
Bond Fund - 351,640
Sansar Capital Sansar Capital
Master Fund, Holdings, Ltd.
LP 900002702 112,276,727
Goldman Sachs CVI GVF (Lux)
Lending Partners Master Sarl
LLC - 3,744,664
Deutsche Bank CVI GVF (Lux)
AG, London Master Sarl
Branch - 764,348
Centaur Classic CVF Lux
Convertible Securities
Arbitrage Fund, Trading Sarl
Ltd. 800004258 61,619
Centaur Classic CVF Lux
Convertible Securities
Arbitrage Fund, Trading Sarl
Ltd. 800004256 860,522
DaimlerChrysler Morgan Stanley
Corporation Senior Funding
Defined Inc.
Contribution 2882 54,453
Diamondback Wooderson
Master Fund, Partners,
Ltd. L.L.C. 900004612 5,935,626
Diamondback Wooderson
Master Fund, Partners,
Ltd. L.L.C. 900004735 46,555,239
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
disclosed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
Additional units, Merit LLC, LB Somerset LLC and LB Preferred
Somerset LLC, sought for bankruptcy protection in December 2009 or
more than a year after LBHI and its other affiliates filed their
bankruptcy cases.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on Sept. 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LITTLE REST: Petitioning Creditors Want Ch. 11 Interim Trustee
--------------------------------------------------------------
Petitioning creditors Solby+Westbrae Partners; 19 SHC, Corp.; Ajna
Brands, Inc.; 601/1700 NBC, LLC; Axafina, Inc.; and Oxana Adler,
LLM, have asked the U.S. Bankruptcy Court for the Southern
District of Florida to authorize the appointment of a Chapter 11
interim trustee in the involuntary Chapter 11 bankruptcy case they
filed against Fisher Island Investments, Inc.; Mutual Benefits
Offshore Fund, Ltd.; and Little Rest Twelve, Inc.
The Petitioning Creditors request the appointment of an Interim
Trustee to take control and possession of the assets of the
Alleged Debtors pending a hearing on the involuntary petition or
the entry of an order for relief. The Petitioning Creditors
submit that absent the appointment of an Interim Trustee, there is
a substantial likelihood that the businesses and assets of the
Alleged Debtors will be further depleted and dissipated
completely.
Prior to the Petition Date, a dispute arose between the Alleged
Debtors and certain third parties who claim equity ownership in
the Alleged Debtors. Those third parties forcibly ejected the
legitimate management and the board of directors of the Alleged
Debtors from their various business premises without the benefit
of a court order. Currently, there are pending litigations in
Florida and New York touching upon some aspects of the dispute.
The Alleged Debtors believe the equity claims to be frivolous.
"However, the fact that the third parties presently have physical
possession of the Alleged Debtors' premises, and control of their
assets and resulting revenues, stands to prevent the Petitioning
Creditors, and any other creditor(s), from collecting their
legitimate debts. More importantly, upon information and belief,
the Alleged Debtors have never disputed, and do not now dispute,
any portion of their debt to the Petitioning Creditors, and the
Alleged Debtors are prepared to enter into repayment arrangements
with the Petitioning Creditors but for the third parties'
interference with and control over the Alleged Debtors, including
their business operations and revenues," the Petitioning Creditors
claim.
According to the Petitioning Creditors, the third parties'
physical control over the Alleged Debtors' assets has already
resulted in the potential depletion and/or dissipation of the
Alleged Debtors' estate. The Petitioning Creditors claim that the
third parties have previously attempted to sell certain properties
located on Fisher Island which were owned by the Alleged Debtor
Fisher Island. "But for the Alleged Debtors' last minute lis
pendens filings, the proposed sales most likely would have closed
with the resulting proceeds going directly to the third parties,"
the Petitioning Creditors state.
The Petitioning Creditors say that Little Rest operates a
successful restaurant in New York City which is producing ongoing
revenue presently not being used for the benefit of the Alleged
Debtor or their creditors. Little Rest is licensed by the New
York State Liquor Authority for the on-premises retail liquor
sale. The Petitioning Creditors believe that in the event a
licensed retailer under New York Law is subject to bankruptcy
proceedings the license is temporarily suspended and may be re-
instated at the request of a trustee in bankruptcy. "The liquor
license is a valued asset which should be preserved in the gap
period, and in so far as there is no immediate Trustee or Debtor
in Possession during the gap period, the pending ownership dispute
poses risk of loss to the value of the restaurant and the license.
The loss or suspension of the liquor license will pose significant
loss of revenue and value to the going concern business
operations," the Petitioning Creditors state.
With respect to Mutual Benefits, on April 24, 2010, the law firm
of Gusrae Kaplan Bruno & Nussbaum, which represents the third
parties claiming equity ownership in Mutual Benefits and the other
Alleged Debtors, filed a UCC financing statement against Mutual
Benefits' sole asset -- viatical insurance policies held by a
receiver of the now defunct Mutual Benefits Corp. -- and listing
itself as "secured party". The Petitioning Creditors believe that
this filing is an avoidable transfer and at a minimum an attempt
to divest Mutual Benefits of assets for the benefit of insiders at
the expense of creditors.
The Petitioning Creditors are represented by:
Chad P. Pugatch, Esq.
Craig A. Pugatch, Esq.
RICE PUGATCH ROBINSON & SCHILLER, P.A.
101 N.E. Third Avenue, Suite 1800
Fort Lauderdale, FL 33301
Telephone: (954) 462-8000
Fax: (954) 462-4300
Solby+Westbrae Partners; 19 SHC, Corp.; Ajna Brands, Inc.;
601/1700 NBC, LLC; Axafina, Inc.; and Oxana Adler, LLM, filed an
involuntary Chapter 11 petition against Miami Beach, Florida-based
Little Rest Twelve, Inc. (Bankr. S.D. Fla. Case No. 11-17061) on
March 17, 2011.
On the same date, involuntary Chapter 11 petitions were also filed
against the Company's affiliates, Mutual Benefits Offshore Fund,
LTD (Bankr. S.D. Fla. Case No. 11-17051) and Fisher Island
Investments, Inc. (Bankr. S.D. Fla. Case No. 11-17047).
LIZ CLAIBORNE: Moody's Assigns 'B2' Rating to $200 Mil. Notes
-------------------------------------------------------------
Moody's Investors Service assigned a B2 (LGD 3, 36%) rating to Liz
Claiborne's proposed $200 million senior secured notes due 2019.
At the same time Moody's affirmed Liz Claiborne's B3 Corporate
Family Rating, stable outlook and the Caa2 rating assigned to the
company's EUR350 million notes due 2013. Proceeds from the new
issue will be used to tender for a portion of the company's
outstanding EUR350 million senior unsecured notes. The ratings
assigned are subject to receipt and review of final documentation
for this transaction.
Ratings Rationale
Liz's B3 Corporate Family Rating reflects the company's weak
credit metrics, its recent sizable operating losses, and the
persistent weakness of its Mexx brand. The rating also reflects
the company's overall good liquidity and lack of near term debt
maturities. The rating encompasses Moody's expectations that
performance will begin to show meaningful improvement over the
remainder of 2011 as a result of initiatives such as the change in
its distribution strategy for its Liz Claiborne brand family and
initiatives of new management teams to execute recovery at certain
segments, notably Mexx and Lucky Brand Jeans.
The B2 rating assigned to the senior secured notes reflects their
first priority lien position in certain domestic trademarks of the
company including Juicy Couture, Lucky Brand and Kate Spade and
the second lien position on the collateral securing the company's
(unrated) $350 million asset based lending facility. The rating
also takes into consider the meaningful level of junior capital in
the company's capital structure pro-forma for the proposed
transaction
The stable rating outlook reflects Moody's expectations that the
company's credit metrics will continue to recover in the near term
as it reduces debt and as operating performance improves while
maintaining good overall liquidity.
Ratings could be upgraded if the company demonstrates sustained
progress reducing debt and improving operating performance.
Quantitatively, ratings could be upgraded if debt/EBITDA fell
below 5.5 times and EBITDA-CapEx/cash interest exceeded 1.25
times. At the same time the company would need to maintain its
good overall liquidity profile.
Ratings could be lowered if the company does not continue to make
consistent progress to reduce its operating losses over the course
of 2011 or if cash flows are not maintained at meaningfully
positive levels. Ratings could also be lowered if the company
does not maintain good overall liquidity.
These ratings were affirmed, and LGD assessments revised
-- Corporate Family Rating at B3
-- Probability of Default Rating at B3
-- EUR350 million unsecured notes due 2013 at Caa2 (to LGD 5,
88% from LGD 5, 80%)
This rating was assigned
-- $200 million senior secured notes due 2019 at B2 (LGD 3, 36%)
The last rating action on Liz Claiborne Inc. was on November 19,
2009, when the company's Corporate Family Rating was lowered to B3
from B2.
LIZ CLAIBORNE: S&P Assigns 'B-' Rating to $200 Mil. Senior Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its
preliminary 'B-' issue-level rating to New York City-based Liz
Claiborne Inc.'s proposed $200 million senior secured notes due
2019. The recovery rating is a preliminary '3', indicating S&P's
expectation of meaningful (50% to 70%) recovery in the event of a
payment default.
At the same time, S&P revised its recovery rating on Liz
Claiborne's existing 5% euro notes due 2013 and 6% convertible
notes due 2014 to '6' from '5'. The '6' recovery rating indicates
S&P's expectation of negligible (0% to 10%) recovery in the event
of a payment default. As a result of this recovery rating
revision, S&P has lowered the issue-level rating on the 6%
convertible notes to 'CCC' (two notches lower than the corporate
credit rating) from 'CCC+' and removed it from CreditWatch. All
other ratings remain on CreditWatch with negative implications,
where they were placed on March 11, 2011, following the company's
tender offer announcement.
Liz Claiborne has indicated that it will use the proceeds from the
new senior secured notes primarily to fund the cash tender offer
the company announced on March 8, 2011, through which Liz
Claiborne is offering to purchase up to EUR155 million of its
EUR350 million 5% euro notes due 2013.
"Based on S&P's criteria," said Standard & Poor's credit analyst
Jeffrey Burian, "S&P views the tender offer as a distressed
offer." The current CreditWatch listings for the corporate credit
rating and the 5% euro notes reflect S&P's expectation to lower
the corporate credit rating to 'SD' (selective default), and lower
S&P's rating on the 5% euro notes to 'D' (default) upon the
consummation of the tender offer. Upon completion of the tender
offer, S&P would re-evaluate the company's credit profile given
the resulting changes in the capital structure. Based on
currently available information, it is its preliminary view that
S&P would raise the corporate credit rating to 'B-' and also raise
the rating on the 5% euro notes that remain outstanding to 'CCC',
although this is subject to further review upon the emergence of
more details.
"The preliminary 'B-' issue-level rating on the proposed new
senior secured notes is based on S&P's preliminary view of raising
the corporate credit rating to 'B-' following completion of the
tender offer on its proposed terms," said Mr. Burian. The current
recovery rating revisions on both senior unsecured note issues and
the issue-level rating on the 6% convertible notes is based on the
assumption that the new senior secured notes and the tender offer
are completed on their respective proposed terms.
LOCAL INSIGHT: Creditors Withdraw Objection to KEIP
---------------------------------------------------
BankruptcyData.com reports that Local Insight Media's official
committee of unsecured creditors withdrew from the U.S. Bankruptcy
Court its objection to the Debtor's motion for an order
authorizing the implementation of a key employee incentive plan.
Bill Rochelle, Bloomberg News' bankruptcy columnist, reported
early this month that Local Insight Regatta Holdings Inc. is
seeking approval for bonuses covering 88 top executives and
managers. Local Insight, Mr. Rochelle discloses, says six senior
executives already quit, including the chief executive officer.
To prevent more losses, the company has lenders' support for a
program to pay incentive bonuses to the top 38 executives and
retention bonuses to 50 non-executive managers. The incentive
bonuses for the top 38 executives will be based on a combination
of achieving cash-flow targets and the date for emergence from
Chapter 11. A hearing on the incentive program was scheduled for
March 29.
About Local Insight Media Holdings
Wilmington, Delaware-based Local Insight Media Holdings, Inc., is
a publisher of print and online yellow page directories in the
United States. Local Insight, along with affiliates, including
Local Insight Regatta Holdings, Inc., filed for Chapter 11
bankruptcy protection on (Bankr. D. Del. Lead Case No. 10-13677)
on Nov. 17, 2010.
Richard M. Cieri, Esq., Christopher J. Marcus, Esq., and Ross M.
Kwasteniet, Esq., at Kirkland & Ellis LLP, serve as the Debtors'
bankruptcy counsel. Curtis A. Hehn, Esq., Laura Davis Jones,
Esq., and Michael Seidl, Esq., at Pachulski Stang Ziehl & Jones
LLP, are the Debtors' co-counsel.
The Debtors' investment banker and financial advisor is Lazard
Freres & Co. LLC. The Debtors' independent auditor is Deloitte &
Touche LLP. The Debtors' interim management and restructuring
advisors are Alvarez & Marsal North America, LLC, and Avarez &
Marsal Private Equity Performance Improvement Group, LLC.
Kurtzman Carson Consultants LLC is the Debtors' notice and claims
agent.
Local Insight Media Holdings estimated assets of less than $50,000
and liabilities of $100 million to $500 million in its Chapter 11
petition. Local Insight Regatta reported consolidated assets of
$796,270,000 against consolidated debts of $669,612,000 as of
Sept. 30, 2010, according to its Form 10-Q filed with the
Securities and Exchange Commission.
The Official Committee of Unsecured Creditors has tapped Milbank,
Tweed, Hadley & McCloy LLP as its counsel; Morris, Nichols, Arsht
& Tunnel LLP as Delaware co-counsel; and Houlihan Lokey Howard &
Zukin Capital Inc. as its financial advisor and investment banker.
LYONDELL CHEMICAL: UBS Can't Shake Highland Claims Over DIP
------------------------------------------------------------
Bankruptcy Law360 reports that Judge Robert E. Gerber, the judge
who oversaw LyondellBasell Industries NV's restructuring, ruled
Monday that the New York bankruptcy court remains the proper forum
for Highland Capital Management LP's contract claims against UBS
Securities LLC over the creation of a $1 billion restructuring
loan.
On Aug. 16, 2010, the Troubled Company Reporter reported that
Lyondell Chemical Co. has asked a bankruptcy judge to block a
lawsuit Highland Capital Management LP filed in New York state
court against Lyondell and UBS AG over an exit financing
agreement, saying the suit violates Lyondell's recently confirmed
Chapter 11 plan. Lyondell said in its motion that Highland's suit
is "a transparent attempt to end-run around the court's
confirmation order and multiple provisions of the plan."
About Lyondell Chemical
LyondellBasell Industries is one of the world's largest polymers,
petrochemicals and fuels companies. Luxembourg-based Basell AF
and Lyondell Chemical Company merged operations in 2007 to form
LyondellBasell Industries, the world's third largest independent
chemical company. LyondellBasell became saddled with debt as part
of the USUS$12.7 billion merger. Len Blavatnik's Access Industries
owned the Company prior to its bankruptcy filing.
On Jan. 6, 2009, LyondellBasell Industries' U.S. operations,
led by Lyondell Chemical Co., and one of its European holding
companies -- Basell Germany Holdings GmbH -- filed voluntary
petitions to reorganize under Chapter 11 of the U.S. Bankruptcy
Code to facilitate a restructuring of the company's debts. The
case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y.
Lead Case No. 09-10023). Seventy-nine Lyondell entities filed for
Chapter 11. Luxembourg-based LyondellBasell Industries AF S.C.A.
and another affiliate were voluntarily added to Lyondell
Chemical's reorganization filing under Chapter 11 protection on
April 24, 2009.
Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in
New York, served as the Debtors' bankruptcy counsel. Evercore
Partners served as financial advisors, and Alix Partners and its
subsidiary AP Services LLC, served as restructuring advisors.
AlixPartners' Kevin M. McShea acted as the Debtors' Chief
Restructuring Officer. Clifford Chance LLP served as
restructuring advisors to the European entities.
LyondellBasell emerged from Chapter 11 bankruptcy protection in
May 2010, with a plan that provides the Company with US$3 billion
of opening liquidity. A new parent company, LyondellBasell
Industries N.V., incorporated in the Netherlands, is the successor
of the former parent company, LyondellBasell Industries AF S.C.A.,
a Luxembourg company that is no longer part of LyondellBasell.
LyondellBasell Industries N.V. owns and operates substantially the
same businesses as the previous parent company, including
subsidiaries that were not involved in the bankruptcy cases.
LyondellBasell's corporate seat is Rotterdam, Netherlands, with
administrative offices in Houston and Rotterdam.
MADISON HOTEL: Case Summary & 10 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Madison Hotel Apartments, LLC
1021 West 1st Avenue
Spokane, WA 99201
Bankruptcy Case No.: 11-01441
Chapter 11 Petition Date: March 24, 2011
Court: United States Bankruptcy Court
Eastern District of Washington (Spokane/Yakima)
Debtor's Counsel: Barry W. Davidson, Esq.
DAVIDSON BACKMAN MEDEIROS PLLC
601 West Riverside Avenue, Suite 1550
Spokane, WA 99201
Tel: (509) 624-4600
Fax: (509) 623-1660
E-mail: cnickerl@dbm-law.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/waeb11-01441.pdf
The petition was signed by Andrew Steve Elliott, authorized
representative.
MERUELO MADDUX: Hearing to Modify Chapter 11 Plan Set for April 8
-----------------------------------------------------------------
BankruptcyData.com reports that the U.S. Bankruptcy Court has
scheduled a hearing for the Debtors' motion to further modify the
Debtors' proposed Chapter 11 Plan and order authorizing California
Bank & Trust to modify its votes to accept the Debtors' Plan for
April 8, 2011.
Early this month Meruelo Maddux filed a Second Modified Fourth
Amended Joint Plan or Reorganization with the U.S. Bankruptcy
Court. The Plan has been modified to incorporate the terms of the
settlements with East West Bank and to modify the treatment of
Bank of America's secured claims against Meruelo Maddux
Properties-760 S. Hill Street, LLC, and Merco Group-
Southpark, LLC.
As reported in the Troubled Company Reporter, three competing
plans have been filed in the Chapter 11 cases, by these parties:
(1) The Company.
-- The plan provides for the payment in full of all claims
over time with interest. The secured claims will be
paid interest only over the term of the Plan and the
principal balance will be paid either through the sale
of the property securing the claim or the refinance of
the secured debt. PI shareholders will retain their
shares in MMPI. General unsecured creditors will be
paid within 30 days after the effective date with
interest from the Petition Date at 5% per annum.
Holders of unsecured claims will be paid in the full
amount of their claims over 5 years from the effective
date.
(2) Lenders Legendary Investors Group No. 1 LLC and East West
Bank.
-- The plan's foundation is an $80 million
recapitalization via a $5 million cash infusion by
Legendary, conversion of about $65 million of debt to
equity and a $10 million rights offering to holders of
Meruelo Maddux existing common stock. East West will
receive 70% to 80% of the stock of the reorganized
company. Holders of unsecured claims will receive a
cash payment equal to 100% of the amount of their
allowed claims on the effective date, plus simple
interest at 5% per annum for the period from the
petition date through the date each allowed claim is
paid. Interest will be at the Federal Judgment Rate if
the creditors vote to reject the plan. Holders of the
existing stock will receive 20% of the stock in the
reorganized company.
(3) Existing shareholders Charlestown Capital Advisors LLC and
Hartland Asset Management Corp.
-- Under the plan, MMPI will receive a $31 million cash
investment from Charleston and Hartland-led investors
and from a rights offering made available to existing
MMPI shareholders. Non-insider general unsecured
creditors will be paid in full with interest as soon as
the plan becomes effective. Holders of secured claims
will receive monthly interest payments at 5.25% for four
years with full payment on the principal balance four
years after the effective date. Reorganized MMPI will
issue to existing holders of MMPI interests, if they
elect to receive stock instead of cash, will receive
up to 26% of the total stock of the reorganized company.
Stockholders can also purchase up to 19% of the stock in
an $8 million rights offering.
In January 2011, according to Dow Jones' Daily Bankruptcy Review,
Meruelo Maddux struck a deal with Legendary Investors to settle
the group's challenge to the Company's plan. According to DBR,
under the deal:
-- Legendary will swap its $67.8 million in Meruelo Maddux
mortgage debt for ownership of seven properties;
-- Legendary and fellow lender East West Bancorp Inc. will
drop their rival takeover plan, which proposes to remove
the Company's senior management, including Chief Executive
Richard Meruelo; and
-- Legendary will drop its liens on three other Meruelo
Maddux properties. The lender received interest in those
properties as additional collateral for its loans.
Legendary had earlier acquired all of East West's interest in
Meruelo Maddux loans.
About Meruelo Maddux
Meruelo Maddux and its affiliates filed for Chapter 11 protection
(Bankr. C.D. Calif. Lead Case No. 09-13356) on March 26, 2009.
Aaron De Leest, Esq., John J. Bingham, Jr., Esq., and John N.
Tedford, Esq., at Danning Gill Diamond & Kollitz, represent the
Debtors in their restructuring effort. The Debtors' financial
condition as of Dec. 31, 2008, showed $681,769,000 in assets
and $342,022,000 of debts.
FTI Consulting, Inc., serves as the Debtors' financial advisors,
Ernst & Young as independent auditors and tax advisors, DLA Piper
LLP (US) as special securities and litigation counsel, and Waldron
& Associates, Inc. as real estate appraiser.
The U.S. Trustee has appointed an official committee of unsecured
creditors and a separate official shareholders' committee in the
case. SulmeyerKupetz, APC, serves as the Creditors Committee's
counsel and Kibel Green, Inc., as its financial advisor. The
equity committee has sought to retain Ron Orr & Professionals,
Inc., Rodiger Law Office, and Jenner & Block as counsel, and Kibel
Green, Inc. as its financial advisor.
The Debtors; Legendary Investors Group No. 1, LLC, and East West
Bank; and Charlestown Capital Advisors, LLC and Hartland Asset
Management Corporation have proposed rival reorganization plans in
the case. In mid-January 2011, the Debtors struck a deal with the
Legendary Group to drop the group's competing plan.
The Debtors have hired Kurtzman Carson Consultants as solicitation
and balloting agent.
Legendary Investors Group No. 1, LLC, is represented in the case
by Jeremy V. Richards, Esq., and Jeffrey W. Dulberg, Esq., at
Pachulski Stang Ziehl & Jones LLP; and Surjit P. Soni, Esq., at
The Soni Law Firm. East West Bank is represented by Curtis C.
Jung, Esq., and Monica H. Lin, Esq., at Jung & Yuen, LLP, and
Elmer Dean Martin III, Esq.
Charlestown Capital Advisors, LLC and Hartland Asset Management
Corporation are represented in the case by Christopher E. Prince,
Esq., Matthew A. Lesnick, Esq., and Andrew R. Cahill, Esq., at
Lesnick Prince LLP.
METRA WESTWOOD: Case Summary & 6 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: METRA Westwood, L.P.
1800 Valley View Lane, Suite 300
Dallas, TX 75234
Bankruptcy Case No.: 11-31916
Chapter 11 Petition Date: March 23, 2011
Court: United States Bankruptcy Court
Northern District of Texas (Dallas)
Judge: Harlin DeWayne Hale
Debtor's Counsel: Hudson M. Jobe, Esq.
QUILLING, SELANDER, CUMMISKEY & LOWNDS
2001 Bryan Street, Suite 1800
Dallas, TX 75201
Tel: (214) 871-2100
Fax: (214) 871-2111
E-mail: hjobe@qsclpc.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 six largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/txnb11-31916.pdf
The petition was signed by Bradley J. Kyles, VP of Third
Millennium Partners, LLC.
MICROBILT CORPORATION: Files List of 20 Largest Unsec. Creditors
----------------------------------------------------------------
MicroBilt Corporation has filed with the U.S. Bankruptcy Court for
the District of New Jersey a list of its 20 largest unsecured
creditors.
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Chex Systems/Funds
Dept. 2634
Los Angeles, CA 90084 Trade Debt $1,020,405
LexisNexis
P.O. Box 7247-6157
Philadelphia, PA 19170 Trade Debt $236,549
Experian
Department 1971
Los Angeles, CA 90088 Trade Debt $166,026
Equifax Information Services Trade Debt $152,330
Certegy LTD Trade Debt $134,792
Transunion Trade Debt $56,921
US Motivation Trade Debt $54,146
Alliant Cooperative Data
Solutions, LLC Trade Debt $51,250
Fair Isaac Credit Services Trade Debt $34,748
Maselli Warren Legal Fees $24,134
Bloomreach, Inc. Trade Debt $17,586
XO Communications Trade Debt $15,162
Ciphertechs Trade Debt $13,000
LssiData Trade Debt $12,500
D&B Trade Debt $12,500
Hill Wallack LLP Legal Fees $11,407
First Advantage Trade Debt $10,510
Rockefeller Consulting Trade Debt $10,000
Early Warning Trade Debt $8,783
Logrhytm Trade Debt $8,000
About MicroBilt Corporation
MicroBilt Corporation in Princeton, New Jersey, and CL Verify LLC
in Tampa, Florida, offer small business owner solutions for fraud
prevention, consumer financing, debt collection, skip tracing and
background screening. MicroBilt provides access to over 3 billion
debit account records, nearly 30 billion pieces of demographic and
public record data and over 100 million unique consumer records to
prevent identity fraud, evaluate credit risk and retain customer
relationships.
MicroBilt and CL Verify filed for Chapter 11 five days apart:
MicroBilt (Bankr. D. N.J. Case No. 11-18143) on March 18, 2011,
and CL Verify (Bankr. D. N.J. Case No. 11-18715) on March 23,
2011. MicroBilt estimated $10 million to $50 million in both
assets and debts. CL Verify estimated $100 million to
$500 million in assets, but under $1 million in debts. Court
papers say the Debtors have roughly $8.4 million in unsecured debt
and no secured debt. According to court papers, the Debtors
believe they have an enterprise value of $150 million to $180
million. Kenneth Rosen, Esq., at Lowenstein Sandler PC, serves
as the bankruptcy counsel.
MICROBILT CORP: Wants 16-Day Extension for Filing of Schedules
--------------------------------------------------------------
Microbilt Corporation and CL Verify, LLC, ask for authorization
from the U.S. Bankruptcy Court for the District of New Jersey to
extend the time to file their schedules of assets, liabilities,
executory contracts, and statements of financial affairs for an
additional 16 days, or until April 18, 2011.
The Debtors have commenced the extensive process of gathering the
necessary information to prepare and finalize the Schedules and
Statements, but believe that the 15-day time period to file the
Schedules and Statements provided by Bankruptcy Rule 1007 won't be
sufficient to permit completion of the Schedules and Statements.
The Debtors are gathering the necessary information in support of
their Chapter 11 petition and first day motions and then will
focus on gathering the information for the Schedules and
Statements.
About MicroBilt Corporation
MicroBilt Corporation in Princeton, New Jersey, and CL Verify LLC
in Tampa, Florida, offer small business owner solutions for fraud
prevention, consumer financing, debt collection, skip tracing and
background screening. MicroBilt provides access to over 3 billion
debit account records, nearly 30 billion pieces of demographic and
public record data and over 100 million unique consumer records to
prevent identity fraud, evaluate credit risk and retain customer
relationships.
MicroBilt and CL Verify filed for Chapter 11 five days apart:
MicroBilt (Bankr. D. N.J. Case No. 11-18143) on March 18, 2011,
and CL Verify (Bankr. D. N.J. Case No. 11-18715) on March 23,
2011. MicroBilt estimated $10 million to $50 million in both
assets and debts. CL Verify estimated $100 million to
$500 million in assets, but under $1 million in debts. Court
papers say the Debtors have roughly $8.4 million in unsecured debt
and no secured debt. According to court papers, the Debtors
believe they have an enterprise value of $150 million to $180
million. Kenneth Rosen, Esq., at Lowenstein Sandler PC, serves
as the bankruptcy counsel.
MIDSTATE HAYES: Case Summary & 4 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Midstate Hayes 184 Distribution Center, LLC
125 S. Poridge Street, Suite 100
Visalia, CA 93291
Bankruptcy Case No.: 11-31917
Chapter 11 Petition Date: March 23, 2011
Court: United States Bankruptcy Court
Northern District of Texas (Dallas)
Judge: Barbara J. Houser
Debtor's Counsel: Douglas James Buncher, Esq.
NELIGAN FOLEY LLP
325 N. St. Paul, Suite 3600
Dallas, TX 75201
Tel: (214) 840-5300
Fax: (214) 840-5301
E-mail: dbuncher@neliganlaw.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 four largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/txnb11-31917.pdf
The petition was signed by Richard S. Allen, CEO of managing
member, Allen Development, Inc.
Affiliates that earlier commenced Chapter 11 cases:
Petition
Debtor Case No. Date
------ -------- ----
Allen Capital Partners, LLC 10-30562 01/25/10
Richard S. Allen 10-33186 05/03/10
Richard S. Allen, Inc. 10-33211 05/03/10
DLH Master Land Holding, LLC 10-30561 01/25/10
MIKE V REAL ESTATE: Taps Craig Dwyer as Bankruptcy Counsel
----------------------------------------------------------
Mike V Real Estate, LLC, asks the U.S. Bankruptcy Court for the
Southern District of California for permission to employ Craig E.
Dwyer, Esq., as its bankruptcy counsel.
Because of the extensive legal services required, Debtor desires
to employ Mr. Dwyer, under a general retainer at the rate of $250
per hour.
To the best of the Debtor's knowledge, Mr. Dwyer has no connection
with the Debtor or any other party in interest or their respective
attorneys, and that he represents no interest adverse to the
Debtor or its estate.
Mr. Dwyer can be reached at:
Craig E. Dwyer, Esq.
8745 Aero Drive, Suite 301
San Diego, CA
Tel: (858) 268-9909
La Jolla, California-based Mike V. Real Estate, LLC, filed for
Chapter 11 bankruptcy protection on January 26, 2011 (Bankr. S.D.
Calif. Case No. 11-01165). In its schedules, the Debtor disclosed
$55,000,000 in assets and $51,335,000 in liabilities as of the
petition date.
MIKE V REAL ESTATE: OneWest Insists on Case Dismissal
-----------------------------------------------------
Michael V Real Estate, LLC, raised the following issues and made
the following assertions in its opposition to OneWest Bank, FSB's
motion for dismissal of the Debtor's Chapter 11 case:
-- The Commercial Property is worth $43 million, far more than
the $25 million or so owed to OneWest and secured by the
Commercial Property.
-- Debtor intends to file a plan of reorganization that will
provide for the sale or refinancing of both the Commercial
Property and the Residential Property.
-- Five tenants occupy the Commercial Property, and such tenants
are paying rent in the amount of approximately $40,000/month.
-- The Commercial Property and the Residential Property were
transferred to the newly formed Debtor for the purpose of
attempting to sell or refinance the same.
-- No foreclosure proceedings have been commenced by OneWest
with respect to the Residential Property.
OneWest filed this reply:
-- At the first meeting of creditors, Michael Viscuso testified
that only 4 tenants currently occupy the premises, and only
three are currently paying rent (totaling $20,000/month).
Mr. Viscuso is the sole occupant of the Residential Property,
and the same generates no income.
-- The OneWest loan on the Commercial Property has been in
default since September of 2009. Mr. Viscuso has had ample
opportunity to deal with the underperformance of the
Commercial Property.
-- Transferring the Commercial Property to a newly formed entity
and commencing a Chapter 11 case for that entity shortly
before the scheduled continued foreclosure sale for the
Commercial Property can hardly be accurately characterized as
a good faith attempt to facilitate the sale or refinancing of
the property or to gain additional time to continue
discussions with OneWest, as asserted by the Debtor in the
Opposition.
-- Given the almost total lack of ability of the Commercial
Property to service even a fraction of the OneWest debt, and
the Debtor's unrealistic valuation and unrealistic plans for
reorganization, a better and more accurate characterization
of the Debtor's actions would be part of a legal strategy
that constitutes an attempt to further hinder and delay
OneWest from exercising its creditor rights with respect to
the property.
-- At most, the Commercial Property is currently generating only
$20,000 per month, and appears to be generating even less
than that, since the $13,000 or so that the Debtor has in the
DIP account is comprised of a combination of prepetition
rents and February rents. Even if V Entertainment Hollywood,
LLC, were to commence paying rent at the rate of $40,000 per
month, the total theoretical rents of about $60,000 per month
are far short of the interest accrual at the non-default
rate of about $150,000 per month (and about $185,000 per
month at the default rate), even before consideration of fees
and expenses incurred by OneWest.
-- According to the schedules and statement of affairs, Debtor
apparently has no unencumbered assets with which to fund its
Chapter 11 case, pay U.S. Trustee fees or to pay its
professionals.
-- It is difficult to conceive that Debtor's Chapter 11 case
will result in anything other than an insolvent
administration with no feasible plan of reorganization in
prospect -- which is indicative of the fact that the case was
filed in bad faith merely as a last gasp attempt to hinder
and delay OneWest from realizing upon its collateral.
OneWest requests that the Debtor's Chapter 11 case be dismissed as
a bad faith filing.
OneWest is represented by:
Jeffrey D Hermann, Esq.
ORRICK, HERRINGTON & SUTCLIFFE LLP
777 South Figueroa Street, Suite 3200
Los Angeles, CA 90017-5855
Tel: (213) 629-2020
E-mail: jhermann@orrick.com
- and -
Jess R. Bressi, Esq.
LUCE, FORWARD, HAMILTON & SCRIPPS LLP
2050 Main Street, Suite 600
Irvine, CA 92614
Tel: (949) 241-8967
E-mail: JBressi@luce.com
La Jolla, California-based Mike V. Real Estate, LLC, filed for
Chapter 11 bankruptcy protection on January 26, 2011 (Bankr. S.D.
Calif. Case No. 11-01165). Craig E. Dwyer, Esq., who has an
office in San Diego, California, serves as the Debtor's bankruptcy
counsel. In its schedules, the Debtor disclosed $55,000,000 in
assets and $51,335,000 in liabilities as of the petition date.
MS LODGING: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: MS Lodging LLC
7049 Enterprise Drive
Olive Branch, MS 38654
Bankruptcy Case No.: 11-11410
Chapter 11 Petition Date: March 28, 2011
Court: U.S. Bankruptcy Court
Northern District of Mississippi (Aberdeen)
Debtor's Counsel: Craig M. Geno, Esq.
HARRIS JERNIGAN & GENO, PLLC
P.O. Box 3380
Ridgeland, MS 39158-3380
Tel: (601) 427-0048
E-mail: cmgeno@hjglawfirm.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Boota Singh, managing member.
MUTUAL BENEFITS: Petitioning Creditors Want Ch. 11 Interim Trustee
------------------------------------------------------------------
Petitioning creditors Solby+Westbrae Partners; 19 SHC, Corp.; Ajna
Brands, Inc.; 601/1700 NBC, LLC; Axafina, Inc.; and Oxana Adler,
LLM, have asked the U.S. Bankruptcy Court for the Southern
District of Florida to authorize the appointment of a Chapter 11
interim trustee in the involuntary Chapter 11 bankruptcy case they
filed against Fisher Island Investments, Inc.; Mutual Benefits
Offshore Fund, Ltd.; and Little Rest Twelve, Inc.
The Petitioning Creditors request the appointment of an Interim
Trustee to take control and possession of the assets of the
Alleged Debtors pending a hearing on the involuntary petition or
the entry of an order for relief. The Petitioning Creditors
submit that absent the appointment of an Interim Trustee, there is
a substantial likelihood that the businesses and assets of the
Alleged Debtors will be further depleted and dissipated
completely.
Prior to the Petition Date, a dispute arose between the Alleged
Debtors and certain third parties who claim equity ownership in
the Alleged Debtors. Those third parties forcibly ejected the
legitimate management and the board of directors of the Alleged
Debtors from their various business premises without the benefit
of a court order. Currently, there are pending litigations in
Florida and New York touching upon some aspects of the dispute.
The Alleged Debtors believe the equity claims to be frivolous.
"However, the fact that the third parties presently have physical
possession of the Alleged Debtors' premises, and control of their
assets and resulting revenues, stands to prevent the Petitioning
Creditors, and any other creditor(s), from collecting their
legitimate debts. More importantly, upon information and belief,
the Alleged Debtors have never disputed, and do not now dispute,
any portion of their debt to the Petitioning Creditors, and the
Alleged Debtors are prepared to enter into repayment arrangements
with the Petitioning Creditors but for the third parties'
interference with and control over the Alleged Debtors, including
their business operations and revenues," the Petitioning Creditors
claim.
According to the Petitioning Creditors, the third parties'
physical control over the Alleged Debtors' assets has already
resulted in the potential depletion and/or dissipation of the
Alleged Debtors' estate. The Petitioning Creditors claim that the
third parties have previously attempted to sell certain properties
located on Fisher Island which were owned by the Alleged Debtor
Fisher Island. "But for the Alleged Debtors' last minute lis
pendens filings, the proposed sales most likely would have closed
with the resulting proceeds going directly to the third parties,"
the Petitioning Creditors state.
The Petitioning Creditors say that Little Rest operates a
successful restaurant in New York City which is producing ongoing
revenue presently not being used for the benefit of the Alleged
Debtor or their creditors. Little Rest is licensed by the New
York State Liquor Authority for the on-premises retail liquor
sale. The Petitioning Creditors believe that in the event a
licensed retailer under New York Law is subject to bankruptcy
proceedings the license is temporarily suspended and may be re-
instated at the request of a trustee in bankruptcy. "The liquor
license is a valued asset which should be preserved in the gap
period, and in so far as there is no immediate Trustee or Debtor
in Possession during the gap period, the pending ownership dispute
poses risk of loss to the value of the restaurant and the license.
The loss or suspension of the liquor license will pose significant
loss of revenue and value to the going concern business
operations," the Petitioning Creditors state.
With respect to Mutual Benefits, on April 24, 2010, the law firm
of Gusrae Kaplan Bruno & Nussbaum, which represents the third
parties claiming equity ownership in Mutual Benefits and the other
Alleged Debtors, filed a UCC financing statement against Mutual
Benefits' sole asset -- viatical insurance policies held by a
receiver of the now defunct Mutual Benefits Corp. -- and listing
itself as "secured party". The Petitioning Creditors believe that
this filing is an avoidable transfer and at a minimum an attempt
to divest Mutual Benefits of assets for the benefit of insiders at
the expense of creditors.
The Petitioning Creditors are represented by:
Chad P. Pugatch, Esq.
Craig A. Pugatch, Esq.
Rice Pugatch Robinson & Schiller, P.A.
101 N.E. Third Avenue, Suite 1800
Fort Lauderdale, FL 33301
Telephone: (954) 462-8000
Fax: (954) 462-4300
Solby+Westbrae Partners; 19 SHC, Corp.; Ajna Brands, Inc.;
601/1700 NBC, LLC; Axafina, Inc.; and Oxana Adler, LLM, filed an
involuntary Chapter 11 petition against Miami Beach, Florida-based
Mutual Benefits Offshore Fund, LTD (Bankr. S.D. Fla. Case No. 11-
17051) on March 17, 2011.
On the same date, involuntary Chapter 11 petitions were also filed
against the Company's affiliates, Fisher Island Investments, Inc.
(Bankr. S.D. Fla. Case No. 11-17047) and Little Rest Twelve, Inc.
(Bankr. S.D. Fla. Case No. 11-17061).
NASON PARTNERS: Kelley Transit Operator Files for Chapter 11
------------------------------------------------------------
David Krechevsky at Republican-American reports that Nason
Partners, the company that operates Kelley Transit Co., sought
protection from creditors in federal bankruptcy court in the U.S.
Bankruptcy Court in Bridgeport, Connecticut. Nason Partners
estimated between $1 million and $10 million in assets, and a
similar range of liabilities. The Company said its largest
unsecured debt is $28,234 for a Bank of American business credit
card.
NASON PARTNERS: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Nason Partners, LLC
dba cKelley Transit Company
53 John Street
Torrington, CT 06790
Bankruptcy Case No.: 11-50528
Chapter 11 Petition Date: March 23, 2011
Court: United States Bankruptcy Court
District of Connecticut (Bridgeport)
Judge: Alan H.W. Shiff
Debtor's Counsel: Myles H. Alderman, Jr., Esq.
ALDERMAN & ALDERMAN
20 Church Street
Hartford, CT 06103
Tel: (860) 249-0090
Fax: (888) 802-9992
E-mail: myles.alderman@alderman.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 20 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/ctb11-50528.pdf
The petition was signed by John F. Nason III, managing member.
NEW STREAM: Organizational Meeting to Form Panel on April 5
-----------------------------------------------------------
Roberta A. DeAngelis, United States Trustee for Region 3, will
hold an organizational meeting on April 5, 2011, at 12:00 p.m. in
the bankruptcy case of New Stream Secured Capital Inc., et al.
The meeting will be held at J. Caleb Boggs Federal Building, 844
King Street, Room 2112, Wilmington, Delaware.
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' cases.
The organizational meeting is not the meeting of creditors
pursuant to Section 341 of the Bankruptcy Code. A representative
of the Debtor, however, may attend the Organizational Meeting, and
provide background information regarding the bankruptcy cases.
To increase participation in the Chapter 11 proceeding, Section
1102 of the Bankruptcy Code requires that the United States
Trustee appoint a committee of unsecured creditors as soon as
practicable. The Committee ordinarily consists of the persons,
willing to serve, that hold the seven largest unsecured claims
against the debtor of the kinds represented on the committee.
Section 1103 of the Bankruptcy Code provides that the Committee
may consult with the debtor, investigate the debtor and its
business operations and participate in the formulation of a plan
of reorganization. The Committee may also perform other services
as are in the interests of the unsecured creditors whom it
represents.
About New Stream
New Stream is an inter-related group of companies that
collectively comprise an investment fund, headquartered in
Ridgefield, Connecticut. Founded in 2002, New Stream focuses on
providing non-traded private debt to the insurance, real estate
and commercial finance sectors.
New Stream Secured Capital, Inc., and three affiliates (New Stream
Insurance, LLC, New Stream Capital, LLC, and New Stream Secured
Capital, L.P.) filed Chapter 11 petitions (Bankr. D. Del. Lead
Case No. 11-10753) on March 13, 2011, with a proposed prepackaged
Chapter 11 plan.
Kurt F. Gwynne, Esq., J. Cory Falgowski, Esq., Michael J.
Venditto, Esq., and Scott M Esterbrook, Esq., at Reed Smith LLP,
serve as the Debtors' bankruptcy counsel. Kurtzman Carson
Consultants LLC is the Debtors' claims and notice agent.
NSSC, Inc., estimated its assets and debts at up to $50,000. NSC
estimated its assets at $100,000 to $500,000 and debts at $50,000
to $100,000. NSI estimated its assets at $100 million to
$500 million and debts at $50 million to $100 million. NSSC, LP,
estimated its assets and debts at $500 million to $1 billion.
NSI's insurance portfolio is being sold for $184.35 million as
part of the Chapter 11 plan. The aggregate indebtedness secured
by the investment portfolio of NSSC is $688,412,974. NSI owes
$81,573,376 to certain account classes under a Bermuda fund.
On March 7, 2011, when New Stream was still soliciting votes on
the Chapter 11 plan, certain investors filed a petition (Bankr. D.
Del. Lead Case No. 11-10690) seeking to force three new stream
funds -- New Stream Secured Capital Fund (U.S.) LLC, New Stream
Secured Capital Fund P1 (Cayman), Ltd. and New Stream Secured
Capital Fund K1 (Cayman), Ltd. -- to Chapter 11 bankruptcy.
The petitioning investors in the New Stream investment enterprise
say they are collectively owed over $90 million, representing
roughly 28% of the approximately $320 million owed to all U.S. and
Cayman investors.
The Petitioners are represented by (i) Joseph H. Huston, Jr.,
Esq., Maria Aprile Sawczuk, Esq., Meghan A. Cashman, Esq., at
Stevens & Lee, P.C., in Wilmington, Delaware, and Beth Stern
Fleming, Esq., at Stevens & Lee, P.C., in Philadelphia,
Pennsylvania, and Nicholas F. Kajon, Esq., David M. Green, Esq.,
and Constantine Pourakis, Esq., at Stevens & Lee, P.C., in New
York, (ii) Edward Toptani, Esq., at Toptani Law Offices, in New
York, and (iii) John M Bradham, Esq., and David Hartheimer, Esq.,
at Mazzeo Song & Bradham LLP, in New York.
NO FEAR: Creditors Panel Objects to $3-Mil. Hilco DIP Loan
----------------------------------------------------------
Dow Jones' DBR Small Cap reports that a group of creditors of No
Fear Retail Stores Inc. has raised concerns about the retailer's
proposed $3 million bankruptcy loan, saying it has a better offer
from a rival lender. No Fear has asked a bankruptcy judge to
approve a loan from Hilco Brands LLC and Infinity FS Brands,
saying the money would help it replenish "severely deficient"
inventory levels at its West Coast retail stores before the
upcoming summer-wear spending season. According to DBR, the
official committee of unsecured creditors called the loan
"extremely expensive on every possible level" and questioned
whether the loan would provide No Fear's operations with "any
meaningful liquidity," according to court papers filed Monday with
the U.S. Bankruptcy Court in San Diego.
About No Fear Retail
Carlsbad, California-based No Fear Retail Stores, Inc., is a
retailer of action, sports, and casual youth lifestyle apparel and
accessories, targeting young adults and teens. It operates 41
retail locations in California, Oregon, Arizona, Florida, Nevada,
North Carolina, and Texas.
No Fear filed for Chapter 11 bankruptcy protection (Bankr. S.D.
Calif. Case No. 11-02896) on Feb. 24, 2011. David S. Kupetz,
Esq., at Sulmeyer, Kupetz, A Professional Corp, 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.
Affiliates No Fear MX, Inc. (Bankr. S.D. Calif. Case No. 11-02897)
and Simo Holdings, Inc. (Bankr. S.D. Calif. Case No. 11-02898)
filed separate Chapter 11 petitions on Feb. 24, 2011.
As reported by the Troubled Company Reporter on March 25, 2011,
Tiffany L. Carroll, the U.S. Trustee for Region 15, appointed
three creditors to serve on the Creditors Committee.
OM ENTERPRISES: Ky. App. Ct. Affirms DCR Mortgage Award
-------------------------------------------------------
The Court of Appeals of Kentucky affirmed the Fayette Circuit
Court's award of summary judgment to DCR Mortgage III Sub I LLC,
authorizing it to collect $80,000 from Kimberly D. Owen and
husband Jeffrey R. Owen, over a personal guaranty related to O.M.
Enterprises of Louisville, Inc.
On Sept. 15, 2003, O.M. Enterprises of Louisville, Inc., executed
and delivered to DCR Mortgage's assignor, Integra Bank, N.A., a
promissory note for $1,170,000. To secure payment of the note,
O.M. Enterprises executed and delivered to Integra Bank three
separate mortgages on Kentucky properties located in Franklin,
Hardin, and Nelson Counties.
Mr. Owen was a principal in O.M. Enterprises. The Owens
personally guaranteed payment of the note. On July 13, 2005,
Integra Bank assigned the note to DCR Mortgage.
In June 2005, O.M. Enterprises defaulted. In May 2006, DCR
Mortgage sued the Owens to enforce their personal guarantees.
The appellate case is KIMBERLY D. OWEN AND JEFFREY R. OWEN, v. DCR
MORTGAGE III SUB I, LLC, No. 2009-CA-001788-MR (Ky. App. Ct.). A
copy of the Court's March 25, 2011 Opinion is available at
http://is.gd/qunKLOfrom Leagle.com. The panel consists of Judges
Glenn E. Acree and Christopher Shea Nickell, and Senior Judge Ann
O'Malley Shake. Judge Nickell penned the opinion.
O.M. Enterprises of Louisville Inc., inLouisville, Kentucky, filed
for Chapter 11 bankruptcy (Bankr. W.D. Ky. Case No. 04-35657) on
Sept. 3, 2004, Judge David T. Stosberg presiding. Timothy F.
Mann, Esq., served as bankruptcy counsel. In its petition, the
Debtor listed $1 million to $10 million in both assets and debts.
OWENS CORNING: Parties Object to Garlock Amended Rule 2019 Request
------------------------------------------------------------------
Owens Corning Sales LLC, several law firms, and asbestos
claimants committees filed formal objections to the amended
request by Garlock Sealing Technologies LLC for access to certain
verified statements of plaintiffs' law firm pursuant to Rule 2019
of the Federal Rules of Bankruptcy Procedure. The Objectors are:
1. Owens Corning Sales LLC;
2. Kazan, McClain, Lyons, Greenwood & Harley, Waters & Kraus
LLP, Stanley, Mandel & Iola, L.L.P., Simmons Browder
Gianaris Angelides & Barnerd LLC, Bergman, Draper & Frockt,
Gori Julian & Associates, P.C., Early, Lucarelli, Sweeney &
Strauss, Cooney & Conway, George & Sipes LLP, Lipsitz &
Ponterio, LLC, Bifferato LLC, and Montgomery, McCracken,
Walker & Rhoads, LLP, on their own behalf and on behalf of
their predecessors;
3. The Law Offices of Peter G. Angelos, P.C., Baron & Budd,
P.C., Brayton Purcell, LLP, Hissey Kientz, LLP, The Lipman
Law Firm, Reaud, Morgan & Quinn, Inc., Thornton & Naumes,
LLP, Waters & Kraus, LLP, and Williams Kherkher Hart
Boundas, LLP; and
4. the Official Committees of Asbestos Claimants in the
Flintkote, Grace, NARCO and Pittsburgh Corning bankruptcy
cases.
Garlock filed the Amended Motion in light of statements made by
the U.S. Bankruptcy Court for the District of Delaware that it
will dismiss the Original 2019 Access Motion without prejudice to
the bankruptcy cases that were closed at the time of filing.
Reorganized Owens and the Law Firms make the same arguments
revealed in their previous objections to Garlock's Original
Motion. Among other things, the Objectors assert that Garlock
may not seek general access to Rule 2019 Statements without
providing individual need or cause; and that Garlock does not
have sufficient standing to urge the re-opening of the closed
bankruptcy cases.
About Owens Corning
Headquartered in Toledo, Ohio, Owens Corning fka Owens Corning
(Reorganized) Inc. (NYSE: OC) -- http://www.owenscorning.com/--
is a producer of residential and commercial building materials and
glass fiber reinforcements, and other similar materials for
composite systems. The company has operations in 26 countries.
The Company filed for Chapter 11 protection on Oct. 5, 2000
(Bankr. D. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at
Saul Ewing LLP, represented the Debtors. Elihu Inselbuch, Esq.,
at Caplin & Drysdale, Chartered, represented the Official
Committee of Asbestos Creditors. James J. McMonagle served as the
Legal Representative for Future Claimants until June 20, 2007.
Mr. McMonagle was replaced by Michael J. Crames. Mr. Crames
served as Mr. McMonagle's counsel until July 2005, when he retired
from the law firm Kaye Scholer LLP.
On September 28, 2006, the Honorable John P. Fullam, Sr., of the
U.S. District Court for the Eastern District of Pennsylvania
affirmed the order of Honorable Judith Fitzgerald of the U.S.
Bankruptcy Court for the District of Delaware confirming Owens
Corning's Sixth Amended Plan of Reorganization. The Plan took
effect on October 31, 2006, marking the company's emergence from
Chapter 11.
Reorganized Owens sought on July 25, 2008, from the Delaware
Bankruptcy Court a final decree closing the Chapter 11 cases of 17
of its affiliates. Only the Chapter 11 case of Owens Corning
Sales, LLC, formerly known as Owens Corning, under Case No.
00-03837 will remain open.
(Owens Corning Bankruptcy News; Bankruptcy Creditors' Service
Inc.; http://bankrupt.com/newsstand/or 215/945-7000)
* * *
Reorganized Owens Corning carries a 'Ba1' corporate family rating
from Moody's Investors Service.
OWENS CORNING: Parties Object to Garlock's Plea to Reopen Case
--------------------------------------------------------------
The U.S. Trustee for Region 3 and several parties ask Judge
Fitzgerald not to grant Garlock Sealing Technologies LLC's
request to re-open seven closed bankruptcy cases for the limited
purpose of permitting Garlock to seek access to certain verified
statements of plaintiffs' law firm pursuant to Rule 2019 of the
Federal Rules of Bankruptcy Procedure.
The other Objecting Parties are:
1. Owens Corning Sales LLC;
2. The Law Offices of Peter G. Angelos, P.C., Baron & Budd,
P.C., Brayton Purcell, LLP, Hissey Kientz, LLP, The Lipman
Law Firm, Reaud, Morgan & Quinn, Inc., Thornton & Naumes,
LLP, Waters & Kraus, LLP, and Williams Kherkher Hart
Boundas, LLP; and
3. Kazan, McClain, Lyons, Greenwood & Harley, Waters & Kraus
LLP, Stanley, Mandel & Iola, L.L.P., Simmons Browder
Gianaris Angelides & Barnerd LLC, Bergman, Draper & Frockt,
Gori Julian & Associates, P.C., Early, Lucarelli, Sweeney &
Strauss, Cooney & Conway, George & Sipes LLP, Lipsitz &
Ponterio, LLC, Bifferato LLC, and Montgomery, McCracken,
Walker & Rhoads, LLP, on their own behalf and on behalf of
their predecessors.
Reorganized Owens contends that Garlock has not demonstrated
circumstances to justify reopening the Reorganized Owens Corning
Debtors' cases.
Mark Minuti, Esq., at Saul Ewing LLP, in Wilmington, Delaware,
asserts that if the Bankruptcy Court is inclined to give Garlock
access to the 2019 Statements, it can do so without reopening
Reorganized Owens' cases. He notes that the Court can simply
direct the Clerk of the Court to make the requested information
available, based on the Court's inherent authority to exercise
supervisory power over its own records and files.
Reorganized Owens would suffer significant prejudice, Mr. Minuti
emphasizes, if any of its cases were to be reopened. The last of
the Owens Corning cases was closed in August 2010, after almost
10 years in bankruptcy. "For obvious reasons, this was a major
milestone for Owens Corning. The reopening of one or more of its
cases would be a significant blow to internal morale and a
potential distraction to ongoing business operations," Mr. Minuti
argues.
The U.S. Trustee objects to the Motion to the extent that Garlock
seeks to reopen the Closed Cases while attempting to waive the
requirements for the Debtors and the Reorganized Debtors to file
post-confirmation operating reports and pay U.S. Trustee
quarterly fees. There is no legal basis for Garlock to seek the
waiver of the reporting and fee requirements, the U.S. Trustee
contends.
The Law Firms argue that Garlock lacks standing to request that
the Closed Cases be reopened. Rule 5010 of the Federal Rules of
Bankruptcy Procedure limits those parties who may invoke Section
350(b) of the Bankruptcy Code to reopen a closed bankruptcy case
to debtors or parties-in-interest in the case sought to be
reopened. They point out that Garlock was clearly not the debtor
or a trustee in any of the Closed Cases, and that Garlock cannot
reasonably claim an interest in the Closed Cases as the Motion
contains no reference to Garlock's "likely" creditor status.
About Owens Corning
Headquartered in Toledo, Ohio, Owens Corning fka Owens Corning
(Reorganized) Inc. (NYSE: OC) -- http://www.owenscorning.com/--
is a producer of residential and commercial building materials and
glass fiber reinforcements, and other similar materials for
composite systems. The company has operations in 26 countries.
The Company filed for Chapter 11 protection on Oct. 5, 2000
(Bankr. D. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at
Saul Ewing LLP, represented the Debtors. Elihu Inselbuch, Esq.,
at Caplin & Drysdale, Chartered, represented the Official
Committee of Asbestos Creditors. James J. McMonagle served as the
Legal Representative for Future Claimants until June 20, 2007.
Mr. McMonagle was replaced by Michael J. Crames. Mr. Crames
served as Mr. McMonagle's counsel until July 2005, when he retired
from the law firm Kaye Scholer LLP.
On September 28, 2006, the Honorable John P. Fullam, Sr., of the
U.S. District Court for the Eastern District of Pennsylvania
affirmed the order of Honorable Judith Fitzgerald of the U.S.
Bankruptcy Court for the District of Delaware confirming Owens
Corning's Sixth Amended Plan of Reorganization. The Plan took
effect on October 31, 2006, marking the company's emergence from
Chapter 11.
Reorganized Owens sought on July 25, 2008, from the Delaware
Bankruptcy Court a final decree closing the Chapter 11 cases of 17
of its affiliates. Only the Chapter 11 case of Owens Corning
Sales, LLC, formerly known as Owens Corning, under Case No.
00-03837 will remain open.
(Owens Corning Bankruptcy News; Bankruptcy Creditors' Service
Inc.; http://bankrupt.com/newsstand/or 215/945-7000)
* * *
Reorganized Owens Corning carries a 'Ba1' corporate family rating
from Moody's Investors Service.
OWENS CORNING: Parties Object to Garlock's Plea to Intervene
------------------------------------------------------------
Garlock Sealing Technologies LLC sought an order from the U.S.
Bankruptcy Court for the District of Delaware and the U.S.
Bankruptcy Court for the Western District of Pennsylvania to
intervene in the bankruptcy cases of 12 entities, including Owens
Corning, for the limited purpose of establishing its right to
access certain judicial records.
Subsequently, these parties ask the Courts to deny Garlock's
intervention request:
1. Kazan, McClain, Lyons, Greenwood & Harley, Waters & Kraus
LLP, Stanley, Mandel & Iola, L.L.P., Simmons Browder
Gianaris Angelides & Barnerd LLC, Bergman, Draper & Frockt,
Gori Julian & Associates, P.C., Early, Lucarelli, Sweeney &
Strauss, Cooney & Conway, George & Sipes LLP, Lipsitz &
Ponterio, LLC, Bifferato LLC, and Montgomery, McCracken,
Walker & Rhoads, LLP, on their own behalf and on behalf of
their predecessors;
2. The Law Offices of Peter G. Angelos, P.C., Baron & Budd,
P.C., Brayton Purcell, LLP, Hissey Kientz, LLP, The Lipman
Law Firm, Reaud, Morgan & Quinn, Inc., Thornton & Naumes,
LLP, Waters & Kraus, LLP, and Williams Kherkher Hart
Boundas, LLP; and
3. The Official Committees of Asbestos Claimants in the
Flintkote, Grace, NARCO and Pittsburgh Corning bankruptcy
cases.
The Law Firms argue that Garlock, despite failing to articulate
any actual financial or legal interest in the Bankruptcy Cases,
seeks to intervene in a dozen cases to "vindicate" illusory
"First Amendment, common law and statutory rights of access" to
materials provided in compliance with Rule 2019 of the Federal
Rules of Bankruptcy Procedure in those cases under orders
requiring that those materials be kept confidential.
Garlock is clearly not a party-in-interest, and makes no showing
of cause that would persuade the Courts to permit it to intervene
in the Bankruptcy Cases for the purpose of litigating whether it
is entitled to the relief sought by its Motion to Access Rule
2019 statements, the Law Firm assert.
The Official Asbestos Claimant Committees argue that Garlock has
not established that it has sufficiently shown "cause" to
intervene under Rule 2018 of the Federal Rules of Bankruptcy
Procedure. They add that Garlock is attempting to misuse
permissive intervention in the same manner it is attempting to
misuse Rule 2019 -- to obtain fishing-expedition discovery under
the guise of vindicating public rights of access.
About Owens Corning
Headquartered in Toledo, Ohio, Owens Corning fka Owens Corning
(Reorganized) Inc. (NYSE: OC) -- http://www.owenscorning.com/--
is a producer of residential and commercial building materials and
glass fiber reinforcements, and other similar materials for
composite systems. The company has operations in 26 countries.
The Company filed for Chapter 11 protection on Oct. 5, 2000
(Bankr. D. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at
Saul Ewing LLP, represented the Debtors. Elihu Inselbuch, Esq.,
at Caplin & Drysdale, Chartered, represented the Official
Committee of Asbestos Creditors. James J. McMonagle served as the
Legal Representative for Future Claimants until June 20, 2007.
Mr. McMonagle was replaced by Michael J. Crames. Mr. Crames
served as Mr. McMonagle's counsel until July 2005, when he retired
from the law firm Kaye Scholer LLP.
On September 28, 2006, the Honorable John P. Fullam, Sr., of the
U.S. District Court for the Eastern District of Pennsylvania
affirmed the order of Honorable Judith Fitzgerald of the U.S.
Bankruptcy Court for the District of Delaware confirming Owens
Corning's Sixth Amended Plan of Reorganization. The Plan took
effect on October 31, 2006, marking the company's emergence from
Chapter 11.
Reorganized Owens sought on July 25, 2008, from the Delaware
Bankruptcy Court a final decree closing the Chapter 11 cases of 17
of its affiliates. Only the Chapter 11 case of Owens Corning
Sales, LLC, formerly known as Owens Corning, under Case No.
00-03837 will remain open.
(Owens Corning Bankruptcy News; Bankruptcy Creditors' Service
Inc.; http://bankrupt.com/newsstand/or 215/945-7000)
* * *
Reorganized Owens Corning carries a 'Ba1' corporate family rating
from Moody's Investors Service.
PALM HARBOR: Seeks Court OK to Sell Real Property to Select Homes
-----------------------------------------------------------------
BankruptcyData.com reports that Palm Harbor Homes filed with the
U.S. Bankruptcy Court a motion seeking approval to sell two
parcels of real property, one in Linwood, NC and one in Florence,
SC to Select Homes for $253,980. The Court scheduled an April 19,
2011 hearing on the matter.
About Palm Harbor Homes
Addison, Texas-based Palm Harbor Homes, Inc. --
http://www.palmharbor.com/-- manufactures and markets factory-
built homes. The Company markets nationwide through vertically
integrated operations, encompassing manufactured and modular
housing, financing and insurance.
Palm Harbor, along with affiliates, filed for Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 10-13850) on
Nov. 29, 2010. It disclosed $321,263,000 in total assets and
$280,343,000 in total debts.
Brian Cejka at Alvarez & Marsal is the Debtors' chief
restructuring officer. Raymond James and Associates, Inc., is the
Debtors' investment banker. Alvarez & Marshal North America, LLC,
is the Debtors' financial advisor. BMC Group, Inc., is the
Debtors' claims agent. Pachulski Stang Ziehl & Jones LLP serves
as counsel to the Official Committee of Unsecured Creditors.
Following a court-approved sale process, Palm Harbor in March 2011
sold its business for $85.25 million to Fleetwood Enterprises
Inc., a venture between Cavco Industries Inc. and a fund advised
by Third Avenue Management LLC. Fleetwood is providing up to
$55 million in secured financing for Palm Harbor's reorganization.
PARK PLAZA: Southern Nevada Development in Chapter 11
-----------------------------------------------------
Steve Green at the Las Vegas Sun notes Park Central Plaza 32 LLC,
owner of a big development at 5700-5990 Losee Road, in Southern,
Nevada, filed for Chapter 11 bankruptcy protection.
According to the report, the Park Central development includes key
retailers and businesses such as a Neighborhood Wal-Mart, Checker
Auto Parts, McDonald's, KFC, Dotty's and a Wells Fargo Bank
branch. But the development has several vacancies and undeveloped
pads and has been mired in litigation with the owner of a now-
closed Timbers Bar & Grill at the center.
The litigation, the Las Vegas Sun discloses, includes allegations
of unpaid rent against Timbers -- and charges by Timbers that its
business was harmed by road access problems and delays in the
construction and opening of several other businesses at the
development.
Based in Las Vegas, Nevada, Park Central Plaza 32 LLC c/o Infinity
Plus Investments LLC filed for Chapter 11 bankruptcy protection
(Bankr. D. Nev. Case No. 11-14153) on March 23, 2011. Judge Bruce
T. Beesley presides over the case. Bob L. Olson, Esq., at
Greenberg Traurig LLP, represents the Debtor. In its petition,
the Debtor estimated both assets and debts of between $10 million
and $50 million.
PARTSEARCH TECHNOLOGIES: $6.4-Mil. Sale to Best Buy Approved
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that electronics retailer Best Buy Co. was authorized by
the bankruptcy court on March 25 to buy Partsearch Technologies
Inc. for $6.4 million. Best Buy had been the biggest customer for
Partsearch, which sold parts for consumer electronics and outdoor
power equipment until discovery it had been overcharged by
$5.9 million. The opening bid at auction from another prospective
buyer had been $2.875 million.
About Partsearch Technologies
Partsearch Technologies Inc., based in Kingston, New York, offers
parts for consumer electronics and outdoor power equipment. It
doesn't hold inventory of its own. Inventory comes from suppliers.
Partsearch filed for Chapter 11 protection (Bankr. S.D.N.Y. Case
No. 11-10282) on Jan. 27 after discovering it overcharged its
largest customer Best Buy Co. Inc. by $5.9 million. William R.
Baldiga, Esq., at Brown Rudnick LLP, in New York, serves as
counsel. Partsearch disclosed assets for $4 million and total
liabilities of $13 million.
PATIENT SAFETY: Inks 1st Amendment to Supply Pact With Cardinal
---------------------------------------------------------------
Patient Safety Technologies, Inc., entered into the First
Amendment to Supply and Distribution Agreement with Cardinal
Health 200, LLC, effective as of March 1, 2011. The First
Amendment amends that Supply and Distribution Agreement between
the Company and Cardinal Health dated Nov. 19, 2009. The First
Amendment amends a number of terms under the Supply Agreement,
including but not limited to extending the termination date of the
Supply Agreement from Nov. 19, 2014 to Dec. 31, 2015 and adding
certain provisions regarding target inventory levels and excess
inventory of the Company's products held by Cardinal Health.
Until Dec. 31, 2011, Cardinal Health is required to maintain any
inventory in excess of such target inventory levels. Additionally
the Company was granted the right to buy back any such excess
inventory from Cardinal Health at any time. Beginning Jan. 1,
2012, Cardinal Health may use excess inventory, if any, to
partially meet customer demand according to a formula set forth in
the First Amendment which limits the use of any excess inventory
over a 12 month time period.
The Company previously issued Cardinal Health, Inc., an affiliate
of Cardinal Health, warrants to purchase 1,250,000 shares of the
Company's common stock at $2 per share and 625,000 shares of the
Company's common stock at $4 per share on Nov. 19, 2009. The
warrants have a term of five years from the issue date. The
Company also granted Cardinal Health, Inc., certain registration
rights pursuant to a Registration Rights Agreement dated Nov. 19,
2009.
A full-text copy of the First Amendment to Supply and Distribution
Agreement is available for free at http://is.gd/1jl9w0
About Patient Safety Technologies
Patient Safety Technologies, Inc. (OTC: PSTX) --
http://www.surgicountmedical.com/-- through its wholly owned
operating subsidiary SurgiCount Medical, Inc., provides the
Safety-Sponge(TM) System, a system designed to improve the
standard of patient care and reduce health care costs by
preventing the occurrence of surgical sponges and other retained
foreign objects from being left inside patients after surgery.
RFOs are among one of the most common surgical errors.
The Company's balance sheet at Sept. 30, 2010, showed
$12.02 million in total assets, $10.10 million in total
liabilities, and a stockholders' equity of $1.92 million.
* * *
In its March 31, 2010 report, Squar, Milner, Peterson, Miranda &
Williamson, LLP, in San Diego, California, noted that the
Company's significant recurring net losses through Dec. 31,
2009, and significant working capital deficit as of Dec. 31,
2009, raise substantial doubt about the Company's ability to
continue as a going concern.
PEPTIMMUNE INC: Files for Chapter 7 Liquidation
-----------------------------------------------
XConomy.Com reports that Peptimmune Inc. has sought liquidation
under Chapter 7 of the Bankruptcy Code.
XConomy.Com, citing documents filed in court, relates that the
Company has about $2 million in assets and liabilities of about
$2.2 million. The Company's largest debt appears to be to the
Waltham biotech Alkermes Inc., which is due $730,249 related to a
lease-agreement termination, according to Boston.com.
According to XConomy.Com, chief executive Thomas Mathers said
Peptimmune, which raised about $100 million in equity and debt, is
seeking a sale of its assets after struggling to raise $35 million
to advance its lead drug, PI-2301, into a midstage clinical trial
for treating multiple sclerosis.
The experimental drug is a peptide copolymer that has similar
properties to the approved MS drug glatiramer acetate (Copaxone).
A potential advantage is that it is injected once per week, not
daily.
In October, XConomy.Com recalls, Peptimmune petitioned the FDA not
to approve a generic version of Teva Pharmaceuticals' glatiramer
acetate for multiple sclerosis.
Peptimmune, according to the Chapter 7 filing, licensed some of
its core technology from the Massachusetts Institute of
Technology, which the biotech owes $22,118 related to a licensing
agreement, Boston.com reports.
Peptimmune Inc. is a Somerville biotechnology firm that had been
developing a long-lasting drug for multiple sclerosis. The
Company was acquired by Genzyme Corp. in 1999 and then spun off
from that Cambridge drug maker as an independent firm in 2002.
PETTERS CO: Acorn Capital Sued for Diverting Funds From Victims
---------------------------------------------------------------
The U.S. Securities and Exchange Commission obtained an emergency
court order to halt an attempt by a Connecticut-based fund manager
to divert to himself and others settlement funds intended for U.S.
victims of a Ponzi scheme operated by Minnesota businessman Thomas
Petters.
The SEC has charged Marlon M. Quan with facilitating the Petters
fraud and funneling several hundred million dollars of investor
money into the scheme. The SEC alleges that Quan and his firms
(Stewardship Investment Advisors LLC and Acorn Capital Group LLC)
invested hedge fund assets with Petters while pocketing more than
$90 million in fees. They falsely assured investors that their
money would be safeguarded by "lock box accounts" to protect them
against defaults. When Petters was unable to make payments on
investments held by the funds that Quan managed, Quan and his
firms concealed Petters's defaults from investors by concocting
sham round trip transactions with Petters.
In its emergency court action, the SEC alleges that Quan, despite
a glaring conflict of interest, more recently negotiated an
agreement to divert a settlement payment of approximately $14
million relating to a receivership and a bankruptcy of Petters's
entities. Although he purportedly negotiated on behalf of his U.S.
fund investors, Quan's U.S. victims would receive no money under
this agreement.
At the SEC's request, the Honorable Ann D. Montgomery of the U.S.
District Court for the District of Minnesota ordered that the
money -- paid into a firm affiliated with Quan's Acorn Capital
Group LLC -- be placed into a segregated account and frozen until
further order of the court. A hearing will be held on April 14 to
determine the SEC's request for additional emergency relief for
investors.
"Quan falsely assured his fund investors about safeguards that did
not exist and made up phony transactions to hide Petters's
defaults, all while he pocketed millions of dollars in fees," said
Robert Khuzami, Director of the SEC's Division of Enforcement.
"Our action shows that we will relentlessly pursue illegal profits
stolen from innocent investors through Ponzi schemes."
In the attempt blocked by the SEC, Quan had arranged for nearly $6
million of the settlement amount to be paid to a German bank, more
than $7 million to be paid to a liquidator appointed by a Bermuda
court for certain overseas fund investors, and approximately
$862,500 to be directed to pay Quan's lawyers and other expenses.
The SEC previously charged Petters and Illinois-based fund manager
Gregory M. Bell with fraud, and filed additional charges against
Florida-based hedge fund managers Bruce F. Pr‚vost and David W.
Harrold for facilitating the Petters Ponzi scheme.
According to the SEC's complaint, Petters sold promissory notes to
feeder funds like those controlled by Quan and his firms. Petters
used some of the note proceeds to pay returns to earlier
investors, diverting the rest of the cash to his own purposes.
Petters had promised investors that their money would be used to
finance the purchase of vast amounts of consumer electronics by
vendors who then re-sold the merchandise to such retailers as Wal-
Mart and Costco. In reality, this "purchase order inventory
financing" business was merely a Ponzi scheme. There were no
inventory transactions.
The SEC alleges that Quan and his firms funneled money into the
Petters Ponzi scheme beginning as early as 2001 and continuing
through 2008. Quan, who lives in Greenwich, Conn., sold interests
in his Stewardship Funds to individuals, charities, companies and
other hedge funds. He falsely assured investors of several
procedures that Acorn Capital Group purportedly undertook to
protect the investors in his hedge funds. However, Quan and his
firms implemented none of these safeguards.
The SEC further alleges that Quan falsely assured existing and new
investors that the Quan Hedge Funds were doing well when in
reality Petters began defaulting on the investments they held.
Instead of disclosing these defaults to his fund's investors, Quan
embarked on a series of convoluted transactions in which he
exchanged $187 million with Petters Co. in "round trips" that
created the false appearance that Petters was making his payments.
The SEC's complaint charges Quan and his firms with violations of
Section 17(a) of the Securities Act of 1933, Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and
Section 206(4) of the Investment Advisers Act of 1940 and Rule
206-4(8) thereunder. The SEC seeks entry of a court order of
permanent injunction against Quan and his firms as well as an
order of disgorgement, prejudgment interest and financial
penalties. The SEC also seeks equitable relief against relief
defendants Florene Quan, wife of Defendant Quan, and Asset Based
Resource Group LLC, an affiliate of Acorn Capital Group LLC.
Sally J. Hewitt, Donald A. Ryba, Charles J. Kerstetter and Peter
K.M. Chan of the SEC's Chicago Regional Office conducted the SEC's
investigation. Frank Hooper and Marie Hagelstein of the SEC's
Boston Regional Office's examination staff also assisted in the
SEC's investigation. The SEC's litigation is led by John E.
Birkenheier of the SEC's Chicago Regional Office. The SEC
acknowledges the assistance of the Bermuda Monetary Authority.
The SEC's investigation is continuing.
About Petters Group
Based in Minnetonka, Minn., Petters Group Worldwide LLC is a
collection of some 20 companies, most of which make and market
consumer products. It also works with existing brands through
licensing agreements to further extend those brands into new
product lines and markets. Holdings include Fingerhut (consumer
products via its catalog and Web site), SoniqCast (maker of
portable, WiFi MP3 devices), leading instant film and camera
company Polaroid (purchased for $426 million in 2005), Sun Country
Airlines (acquired in 2006), and Enable Holdings (online
marketplace and auction for consumers and manufacturers' overstock
inventory). Founder and chairman Tom Petters formed the company
in 1988.
Petters Company, Inc., is the financing and capital-raising unit
of Petters Group Worldwide.
Thomas Petters, the founder and former CEO of Petters Group, has
been indicted and a criminal proceeding against him is proceeding
in the U.S. District Court for the District of Minnesota.
Petters Company, Petters Group Worldwide and eight other
affiliates filed separate petitions for Chapter 11 protection
(Bankr. D. Minn. Lead Case No. 08-45257) on Oct. 11, 2008. James
A. Lodoen, Esq., at Lindquist & Vennum P.L.L.P., represents the
Debtors as counsel. In its petition, Petters Company estimated
its debts at $500 million and $1 billion. Parent Petters Group
Worldwide estimated its debts at not more than $50,000.
Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing
business as Sun Country Airlines, Inc., and MN Airline Holdings,
Inc., filed separate petitions for Chapter 11 bankruptcy
protection (Bankr. D. Minn. Case Nos. 08-45136, 08-35197 and
08-35198) on Oct. 6, 2008. Petters Aviation is a wholly owned
unit of Thomas Petters Inc. and owner of MN Airline Holdings, Sun
Country's parent company.
PFG ASPENWALK: Files Reorganization Plan & Disclosure Statement
---------------------------------------------------------------
PFG AspenWalk, LLC delivered to the U.S. Bankruptcy Court for the
District of Minnesota a plan of reorganization and disclosure
statement on March 15, 2011.
The Plan will be funded by obtaining $9 million in new financing
after the Debtor obtains a final planned unit development approval
from the Aspen City Counsel. The Debtor has received a letter of
interest from Kennedy Funding, Inc. for the new financing, wherein
the potential lender has proposed a $9 million loan subject to,
among other things, 55% loan to market value as determined by an
appraiser chosen by the potential lender.
The Plan provides that creditors holding secured claims will
receive the full amount of their allowed secured claims with
interest. Creditors without security interests have, under the
Plan, a vested interest in the survival of the Debtor and will
receive 100% of their allowed claims without interest.
The Plan provides for the designation of claim classes. Class IA
Claim is the secured claim of Rapid Funding LLC for $540,000, plus
whatever the Debtor gets in the next DIP draw, up to $585,000.
Class IB Claim consist of the secured allowed claim held by Bank
of America for $6.4 million. Class II Claims consist of allowed
unsecured priority claims for tenant security deposits and prepaid
rent to tenants of a real property located at 404 Park Avenue,
Aspen, Pitkin County, Colorado, which claims are estimated by the
Debtor to aggregate $18,400. Class III Claims consist of allowed
unsecured claims not exceeding $500. Class IV Claims consist of
allowed unsecured claims not treated in any other class in the
Plan, which the Debtor estimates to aggregate $1.1 million. Class
V are allowed ownership interests of the Debtor. Holders of Class
V interests will retain their respective interests.
The Plan also provides for the treatment of administrative claims
and tax priority claims.
A hearing to consider approval of the Disclosure Statement will be
held on April 20, 2011, at 10:30 a.m.
A full-text copy of the Plan and Disclosure Statement is available
for free at http://bankrupt.com/misc/PFGASPENWALK_PLanandDS.pdf
About PFG AspenWalk
Minneapolis, Minnesota-based PFG AspenWalk, LLC, filed for Chapter
11 bankruptcy protection (Bankr. D. Minn. Case No. 10-47089) on
Sept. 23, 2010. Robert T. Kugler, Esq., at Leonard Street &
Deinard P.A., assists the Debtor in its restructuring effort.
According to its schedules, the Debtor disclosed $12,004,580 in
total assets and $7,535,608 in total liabilities as of the
Petition Date.
PFG ASPENWALK: Seeks To Obtain $585,000 Advance From DIP Loan
-------------------------------------------------------------
PFG AspenWalk, LLC, seeks authorization from the Hon. Robert J.
Kressel of the U.S. Bankruptcy Court for the District of Minnesota
to obtain additional postpetition secured financing from Bank of
America, N.A.
The Debtor is seeking to obtain another advance from the DIP Loan
up to a maximum amount of $585,000, with the funds being used
solely in these amounts and for these specific purposes:
Funding Date
Use of DIP Loan Proceeds 3/30/2011 4/15/2011 Total
------------------------ --------- --------- -----
Architectural/Engineering $65,000 $138,250 $203,250
Planning Consultant $20,000 $15,000 $35,000
Local Project Management $5,000 $5,000
Travel and Misc. $7,000 $7,000
Legal (Debtor) $50,000 $50,000 $100,000
Legal (Amend/Update APCHA Agmts.)
Developer Overhead $40,000 $40,000 $80,000
City Fees/Costs $14,500 $14,500
Closing Costs for Project
Recap/Chap 11 filing
Lender Points/Fees
Contingency (Chap 11/addl.
approval. costs, etc.) $40,250 $100,000 $140,250
-------- -------- --------
TOTAL $215,250 $369,750 $585,000
======== ======== ========
As reported in the Troubled Company Reporter in October 7, 2010,
PFG AspenWalk sought court approval to obtain up to $1,400,000 in
DIP financing, which may be drawn on by the Debtor on a non-
revolving basis to fund costs associated with the final Planned
Unit Development of the Development Project by the City of Aspen.
That DIP loan would mature in twelve months, and will bear
interest at an annual rate of the 13%. Additionally, the DIP
Lender will receive 5% of the common equity interests in the
Debtor. Subsequently, the Court entered an interim order,
allowing the Debtor to draw $132,000 under the DIP loan in
accordance with a stipulation reached by BofA and the Debtors,
which the Court approved on September 29, 2010.
On November 1, 2010, a hearing was scheduled with respect to the
portion of the DIP Motion seeking the Court's authorization to
draw an additional $452,500. On November 24, 2010, the Court
authorized the Debtor to draw an additional $320,000 from the DIP
Loan.
The Debtor's obligations to BofA are secured by a Deed of Trust
and a Financing Statement, which grant BofA a security interest in
all of the Debtor's property related to or arising from a certain
Development Property. As of July 27, 2010, the outstanding amount
of the Debtor's obligations to BofA under the Loan Documents,
excluding interest, aggregate $6,408,373.
The Debtor notes that these provisions are included in the DIP
Loan and the Sept. 29, 2010 Order approving the DIP Loan:
(a) DIP Availability: The DIP Loan in the amount of
$1,400,000 may be drawn on by the Debtor on a non-
revolving basis to fund costs associated with final
Planned Unit Development of the Development Project by the
City of Aspen.
(b) DIP Maturity: The DIP Loan will mature on October 31,
2011. The Debtor may extend the term of the DIP Loan
until April 30, 2012, by paying the DIP Lender a
$10,000 extension fee.
(c) Interest Rates: Amounts outstanding under the DIP Loan
will bear interest at an annual rate of the 13%, and the
Debtor must pay the DIP Lender a minimum interest payment
of $91,000, notwithstanding the amounts advanced under the
DIP Loan. Additionally, the DIP Lender will receive 5% of
the common equity interests in the Debtor.
(d) DIP Facility Fee: The DIP Lender will receive an
origination fee of $50,000 upon closing of the loan
facility. Additionally, the Debtor will pay $7,500 to
Nantucket Capital and $2,500 to CB Richard Ellis for loan
origination fees.
Minneapolis, Minnesota-based PFG AspenWalk, LLC, filed for Chapter
11 bankruptcy protection (Bankr. D. Minn. Case No. 10-47089) on
Sept. 23, 2010. Robert T. Kugler, Esq., at Leonard Street &
Deinard P.A., assists the Debtor in its restructuring effort.
According to its schedules, the Debtor disclosed $12,004,580 in
total assets and $7,535,608 in total liabilities as of the
Petition Date.
PHILADELPHIA RITTENHOUSE: Organizational Meeting Moved to April 6
-----------------------------------------------------------------
Roberta A. DeAngelis, United States Trustee for Region 3, will
hold an organizational meeting on April 6, 2011, at 2:00 p.m. in
the bankruptcy case of Philadelphia Rittenhouse Developer, L.P.
The meeting will be held at the Office of the United States
Trustee, 833 Chestnut Street, Suite 501, Philadelphia.
As reported by the Troubled Company Reporter on March 25, 2011,
the meeting was initially set for March 30, 2011.
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' cases.
The organizational meeting is not the meeting of creditors
pursuant to Section 341 of the Bankruptcy Code. A representative
of the Debtor, however, may attend the Organizational Meeting, and
provide background information regarding the bankruptcy cases.
To increase participation in the Chapter 11 proceeding, Section
1102 of the Bankruptcy Code requires that the United States
Trustee appoint a committee of unsecured creditors as soon as
practicable. The Committee ordinarily consists of the persons,
willing to serve, that hold the seven largest unsecured claims
against the debtor of the kinds represented on the committee.
Section 1103 of the Bankruptcy Code provides that the Committee
may consult with the debtor, investigate the debtor and its
business operations and participate in the formulation of a plan
of reorganization. The Committee may also perform other services
as are in the interests of the unsecured creditors whom it
represents.
Philadelphia Rittenhouse Developer, L.P. is a joint venture
between ARC Properties, Inc., based in Clifton, New Jersey, and
Philadelphia-based Wheeler Brothers Holdings, LLC. The Company
was formed to develop 10 Rittenhouse Square, a 33-story
condominium building in Philadelphia.
Rittenhouse filed for chapter 11 bankruptcy in response
to an action in Pennsylvania state court seeking to appoint a
receiver for the development project, which was brought by one of
the Company's lenders, iStar Tara, LLC.
Rittenhouse filed a Chapter 11 petition (Bankr. E.D. Pa. Case No.
10-31201) on Dec. 30, 2010. Albert A. Ciardi, III, Esq., at
Ciardi Ciardi & Astin, P.C., serves as the Debtor's bankruptcy
counsel. The Debtor estimated its assets and debts at
$100 million to $500 million. iStar Tara, LLC is represented in
the chapter 11 case by the firm of Blank Rome LLP.
PHILLIPS SERVICES: Ohio App. Ct. Reverses Dismissal of Trill Suit
-----------------------------------------------------------------
The Court of Appeals of Ohio, Sixth District, Sandusky County,
reversed a judgment of the Sandusky County Court of Common Pleas
dismissing a complaint filed by Bert and Peggy Trill.
On July 21, 2002, Bert Trill was driving in Bellevue, Ohio, with
his wife, Peggy Trill, when they were rear-ended by a vehicle
driven by Alberto Sifuentes. The vehicle was owned by Cousin's
Waste Control Corporation, Mr. Sifuentes' employer. The Trills
filed a personal injury suit on June 14, 2004, naming Mr.
Sifuentes and Cousins as defendants. In response, Cousins filed a
notice of bankruptcy stay. The notice advised the court and the
parties that Cousins' parent company, Phillips Services
Corporation, had filed for Chapter 11 bankruptcy. On July 20,
2004, the trial court issued an order staying the action until
further notice.
On July 24, 2006, the Trills filed a motion to reactivate their
case based on the fact that the bankruptcy case had concluded. On
Dec. 26, 2007, the trial court lifted the previous stay but
imposed another one based on the fact that the Trills were in the
process of filing a claim with their uninsured motorist carrier.
On April 1, 2010, the Trills filed a motion to reactivate their
case. The trial court granted their motion.
On April 13, 2010, the Trills filed a motion for default judgment
against Mr. Sifuentes. The motion was granted on April 19, 2010,
and a damages hearing was scheduled.
On May 7, 2010, Cousins filed a motion to dismiss pursuant to
Civ.R. 12(B)(6). Cousins argued that all of the Trills' claims
were discharged in bankruptcy. On May 19, 2010, the Trills filed
a notice of voluntary dismissal of Cousins. The notice
specifically stated that "[T]he cause of action against the
remaining defendant, Alberto Sifuentes, remains pending."
On May 21, 2010, Cousins filed a "motion to deny plaintiffs'
requested award of damages." Cousins sought an order from the
trial court denying the Trills damages in their case against Mr.
Sifuentes. Cousins claimed that the Trills were judicially
estopped from asserting such claims as the claims were not
included as an asset in a previous bankruptcy filed by the Trills.
In response, the Trills filed a motion to strike Cousins' motion
based on the fact that they are no longer a party to the action.
On July 6, 2010, the court granted Cousins' motion finding that
"grounds for application of the doctrine of judicial estoppel have
been met." Consequently, the trial court dismissed the Trills'
claims against Mr. Sifuentes. The Trills appealed.
The Court of Appeals of Ohio held that the judgment of the
Sandusky County Court of Common Pleas is reversed and the case is
remanded for a damages hearing on the Trills' claim against Mr.
Sifuentes.
The appellate case is Bert E. Trill, et al., v. Alberto Sifuentes,
et al., No. S-10-036 (Ohio Ct. App., Sandusky County). A copy of
the March 25, 2011 Decision and Judgment is available at
http://is.gd/8xnBIufrom Leagle.com. The appellate panel consists
of Peter M. Handwork, Arlene Singer, and Thomas J. Osowik.
Justice Singer wrote the opinion.
POINT BLANK: Has OK to Pay $275,000 in Plan Lender Fees
-------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Point Blank Solutions Inc. was authorized by the
bankruptcy judge on March 25 to pay as much as $275,000 in
deposits and expenses to potential lenders willing to provide some
of the funding necessary for an exit from Chapter 11.
According to the report, Point Bank said that some proceeds of the
loan would finance payments to creditors while also providing
working capital for the business going forward. The amount of the
loan wasn't mentioned. The loan itself would be approved in the
process of confirming a reorganization plan.
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. Point Blank has two plants. Revenue in
2009 exceeded $153 million.
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.
POINT BLANK: US Trustee Again Makes Changes to Creditors Committee
------------------------------------------------------------------
BankruptcyData.com reports that the U.S. Trustee assigned to the
Point Blank Solutions case filed second and third amended notices
of appointment to the official committee of unsecured creditors.
BData says the list of committee members was amended to reflect
the addition of Jon Jacks, Jack Thurmon and Steve McNeil on
March 25, 2011. The Committee list was amended again on March 28,
2011, to reflect the resignation of Steve McNeil and the addition
of Palogic Value Fund, LP.
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.
POINT BLANK: Objects to Former CEO's Motion to Stay De-register
---------------------------------------------------------------
BankruptcyData.com reports that Point Blank Solutions filed with
the U.S. Bankruptcy Court an objection to shareholder and former
CEO David H. Brooks' motion seeking to stay the Court's granting
Point Blank's request to de-register as a public company pending
appeal.
According to BData, the Debtors assert in their objection, "Brooks
is a criminal, who used the Debtors as his own private piggy bank.
His criminal conduct - for which he was convicted - included
damaging the Debtors through misappropriation and related party
transactions, pumping and dumping the Debtors' stock for over $180
million, and various forms of conspiracy, mail fraud and wire
fraud, all of which harmed the Debtors in an amount of at least
$100 million. Brooks' wrongdoing materially contributed to the
Debtors' need to file for bankruptcy and formed the basis for the
Complaint, which Point Blank has now successfully resolved through
the settlement. Brooks' request for a stay should be seen for what
it really is - another selfish attempt by Brooks to benefit at the
expense of Point Blank and its creditors."
The SEC filed a joinder to the Debtor's objection.
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.
POMPANO CREEK: Hearing on Plea to Hire Grant Clowery Set for April
------------------------------------------------------------------
The Hon. John K. Olson of the U.S. Bankruptcy Court Southern
District of Florida (Fort Lauderdale) will convene a hearing on
April 11, 2011, at 1:30 p.m. to consider approval of Pompano Creek
Associates, LLC's request to employ Grant Clowery to act as its
accountant.
According to the court docket, a hearing on the matter was
conducted on March 15 and the Court instructed the Debtor's
counsel, Loretta Bangor, Esq., at Law Office of Loretta Bangor, at
Boca Raton, Florida, to submit a proposed order providing that the
accountant would only be paid upon properly filed and approved fee
applications. Ms. Bangor, however, submitted a proposed order
which provided that, " . . . the debtor in possession is
authorized to employ Grant Clowery on behalf of the Debtor in
Possession and to pay him his regular hourly wage for services
performed on debtors behalf."
At the April 11 hearing, Ms. Bangor is expected to explain why she
submitted a proposed order which directly contradicted the Court's
ruling at the March 15th hearing.
Vienna, Virginia-based Pompano Creek Associates, LLC, filed for
Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No. 11-
11989) on Jan. 26, 2011. Loretta Bangor, Esq., at the Law Office
of Loretta Bangor, 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.
PRA INTERNATIONAL: Moody's Upgrades Corp. Family Rating to 'B2'
---------------------------------------------------------------
Moody's Investors Service upgraded the Corporate Family Rating of
PRA International, Inc., to B2 from B3. Moody's also upgraded the
ratings on the senior secured first-out portion of the credit
facility to Ba2 from B1 and the last-out portion of the credit
facility to B2 from B3. The rating outlook is stable.
Ratings upgraded:
PRA International:
-- $30 million senior secured revolving credit facility due
2013; to Ba2 (LGD2, 15%) from B1, (LGD3, 36%)
-- $70 million senior secured first-out term loan due 2014; to
Ba2 (LGD2, 15%) from B1, (LGD3, 36%)
-- $85 million senior secured last-out term loan due 2014; to B2
(LGD3, 48%) from B3, (LGD5, 73%)
-- Corporate Family Rating; B2
Pharmaceutical Research Associates Group, BV:
-- $10 million senior secured revolving credit facility due
2013; to Ba2 (LGD2, 15%) from B1, (LGD3, 36%)
-- $100 million senior secured first-out term loan due 2014; to
Ba2 (LGD2, 15%) from B1, (LGD3, 36%)
Ratings affirmed:
-- Probability of Default Rating; B2
The outlook for the ratings is stable.
Ratings Rationale
The upgrade reflects PRA's strong execution of its growth strategy
over the past several years, even in the face of a difficult
operating environment for contract research organizations. PRA
demonstrated organic, constant currency revenue growth in 2010
that Moody's believes well exceeded industry averages. In
addition, since the company's leveraged buyout in late 2007, the
company has grown EBITDA and used free cash flow to repay debt,
resulting in a significant reduction in adjusted financial
leverage. Moody's estimates adjusted debt/ EBITDA of below 5.0
times for the twelve months ended Dec. 31, 2010 versus debt/EBITDA
of greater than 7.0 times at the time of the leveraged buyout.
The upgrade also reflects Moody's expectation that the company
will continue to improve its financial metrics over the next year
resulting from further growth in EBITDA and debt repayment.
Despite the company's strong demonstrated track record, the
B2 Corporate Family Rating is constrained by risks inherent
in the CRO industry. Moody's views the industry as highly
competitive and large contract cancellations can lead to
material deterioration in a CRO's financial profile. Further,
PRA continues to be a mid-tier player versus several much larger
competitors. Overtime, Moody's believes pharmaceutical companies
will increasingly look to work with fewer contract service
providers, potentially putting pressure on the smaller and mid-
tier CROs.
Moody's could upgrade PRA's ratings if the company continues to
grow its scale within the CRO industry (i.e., revenues exceeding
$700 million) and maintains financial metrics that are strong for
the B1 rating category. Specifically, Moody's could upgrade the
ratings if PRA achieves adjusted financial leverage of 3.5 times
or lower and free cash flow to debt above 10%.
Moody's could downgrade the ratings if PRA were to experience an
elevated level of contract cancellations or poor new business wins
that led to top-line deterioration. Further, increased pricing
pressure or competitive pressures that led to material erosion in
EBITDA margins could also have negative rating implications.
Specifically, if adjusted debt/EBITDA increased to 5.3 times or
the company burned through a meaningful amount of its cash,
Moody's could downgrade the ratings. Further, if the company were
to pursue acquisitions or sponsor dividends that resulted in
significantly increased leverage and reduced interest coverage,
the ratings could come under pressure.
PRA International is a CRO that assists pharmaceutical and
biotechnology companies in developing drug compounds, biologics,
and drug delivery devices and gaining necessary regulatory
approvals. The company was acquired by Genstar Capital in 2007.
PRA generated net service revenues of approximately $451 million
for the twelve months ended Dec. 31, 2010.
PRINGLE DEVELOPMENT: Files for Chapter 7 Bankruptcy Liquidation
---------------------------------------------------------------
Mary Shanklin at Orlando Sentinel reports that Pringle Development
and its affiliates have filed for Chapter 7 bankruptcy liquidation
recently after having ceased operations in 2009.
Orlando Sentinel, citing filings in U.S. Bankruptcy Court in
Orlando, relates that eleven companies affiliated with the family-
owned operation had more than $49 million in debt, primarily owed
to North Carolina-based Bank, Branch & Trust Co.
According to the report, the liquidating Pringle companies are not
affiliated with Pringle Homebuilding Group LLC, a 2009 startup
company that purchased Pringle home-construction contracts. While
the bankrupt Pringle companies developed and built communities
aimed at retirees, the new operation focuses primarily on custom-
home construction, Orlando Sentinal discloses.
Pringle Development is an active-adult developer based in Lake
County.
PRIUM MEEKER: Hearing on Motion for Final Decree Set Today
----------------------------------------------------------
The hearing on Prium Meeker Mall LLC and Prium Kent Retail LLC's
motion for the entry of an order final decree closing their
Chapter 11 case will take place today at 9:00 a.m., before the
Hon. Paul B. Snyder, at Room H, 1717 Pacific Avenue, in Tacoma,
Washington.
As reported in the TCR on Dec. 29, 2010, the Hon. Paul B. Snyder
of the U.S. Bankruptcy Court for the Western District of
Washington confirmed Prium Meeker Mall LLC, and Prium Kent Retail
LLC's Plan of Reorganization. On Jan. 1, 2011, the Plan became
effective.
All claim objections have been resolved and the Debtors have
commenced payments to creditors under the Plan. The Debtors are
unaware of anything further to be done in this case that requires
resort to the Bankruptcy Court.
About Prium Meeker Mall LLC
Tacoma, Washington-based Prium Meeker Mall LLC filed for Chapter
11 bankruptcy protection on July 14, 2010 (Bankr. W.D. Wash. Case
No. 10-45713). Timothy W. Dore, Esq., at Ryan Swanson & Cleveland
PLLC, assists the Company in its restructuring effort. The
Company estimated assets and debts at $10 million to $50 million.
Two affiliates filed separate Chapter 11 petitions on June 8,
2010, Chelsea Heights LLC (Bankr. Case No. 10-44959); and Prium
Tumwater Buildings LLC (Bankr. Case No. 10-44962).
PRM DEVELOPMENT: Court Approves Disclosure Statement
----------------------------------------------------
The Hon. Harlin D. Dale of the U.S. Bankruptcy Court for the
Northern District of Texas approved on March 18, 2011, the
disclosure statement explaining the plan of reorganization filed
by PRM Development, LLC and its debtor affiliates.
The deadline by which the holders of claims and interests against
the Debtor may submit their ballots to vote to accept the Plan is
April 13, at 4:00 p.m. Central Standard Time.
Objections to the confirmation of the Plan must also be submitted
on or before April 13, and must be in writing and served on:
* Pronske & Patel, P.C.
2200 Ross Avenue, Suite 5350
Dallas, Texas 75201
Attention: Gerrit M. Pronske
Facsimile (214) 658-6509
* The Linares Law Firm, P.L.L.C.
2199 Turtle Creek Blvd., Suite 300
Dallas, Texas 75219
Attention: Julie Ann Linares
Facsimile (214) 614-9162
* United States Trustee
1100 Commerce Street, Room 976
Dallas, Texas 75242
Attention: Erin Schmidt
Facsimile (214) 767-8967
A hearing on confirmation of the Plan will be held on April 20, at
2:00 p.m. Central Standard Time in the Courtroom of the Honorable
Harlin D. Hale, United States Bankruptcy Court, 1100 Commerce St.,
14th Floor, Dallas, Texas 75242.
Days before the disclosure statement hearing, the Debtors filed an
amended, a full-text copy of which is available for free at:
http://bankrupt.com/misc/PRMDEVELOPMENT_AmendedDS.pdf
About PRM Development
Chicago, Illinois-based PRM Development, LLC, filed for Chapter 11
protection (Bankr. N.D. Tex. Case No. 10-35547) on Aug. 6, 2010.
Gerrit M. Pronske, Esq., at Pronske & Patel, P.C., assists the
Debtor in its restructuring effort. The Debtor estimated its
assets at $10 million to $50 million and debts at $1 million to
$10 million as of the Petition Date.
Affiliates Bon Secour Partners, LLC; PRS II, LLC; PRM Realty
Group, LLC; PMP II, LLC; Maluhia Development Group, LLC; Maluhia
One, LLC; Maluhia Eight, LLC; Maluhia Nine, LLC; and Long Bay
Partners, LLC, filed separate Chapter 11 petitions.
On Oct. 14, 2010, the Court jointly administered Econometric
Management, Inc., with the Debtors.
PURSELL HOLDINGS: Files Schedules of Assets and Liabilities
-----------------------------------------------------------
Pursell Holdings, LLC, filed with the U.S. Bankruptcy Court for
the Western District of Missouri its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $11,935,000
B. Personal Property $269,248
C. Property Claimed as Exempt
D. Creditors Holding
Secured Claims $8,865,274
E. Creditors Holding Unsecured
Priority Claims $1,313
F. Creditors Holding Unsecured
Non-priority Claims $14,516,153
----------- -----------
TOTAL $12,204,248 $23,382,741
Liberty, Missouri-based Pursell Holdings, LLC, filed for Chapter
11 bankruptcy protection (Bankr. W.D. Mo. Case No. 11-40999) on
March 10, 2011. Frank Wendt, Esq., Brown & Ruprecht, P.C., serves
as the Debtor's bankruptcy counsel. The Debtor estimated its
assets and debts at $10 million to $50 million.
Affiliate Damon Pursell Construction Company filed a separate
Chapter 11 petition on Sept. 15, 2010 (Bankr. W.D. Mo. Case No.
10-44965).
REGENCY ENERGY: Moody's Affirms 'Ba3' Corporate Family Rating
-------------------------------------------------------------
Moody's Investors Service affirmed Energy Transfer Partners,
L.P.'s Baa3 senior note rating with a stable outlook, Regency
Energy Partners LP's Ba3 Corporate Family Rating with a positive
outlook, and Energy Transfer Equity's Ba1 Corporate Family Rating
with a negative outlook, in response to the announcement that ETP
and Regency would acquire LDH Energy Asset Holdings LLC in an all-
cash transaction valued at $1.925 billion. The assets will be
held in a new joint venture owned 70% by ETP and 30% by Regency,
with expected closing in the May 2011 time frame.
"The ratings affirmations reflect the increased scale and asset
diversification for the MLPs and further gains in more stable fee
businesses arising from the addition of LDH's assets," said Tom
Coleman, Senior Vice President. "While Moody's continue to see
financial leverage for the MLPs and consolidated family as
elevated in the wake of the acquisition, expected equity issuances
and the rising cash flow from ETP's and Regency's existing
operations and from LDH should lead to improved financial leverage
by the end of 2011."
LDH's acquired assets will provide operational and geographic
diversification in natural gas liquids storage, fractionation and
transportation, with the West Texas Pipeline connecting NGLs
production from the Permian basin and northern Barnett Shale to
storage facilities in the key Mt. Belvieu NGLs hub. The LDH
assets are characterized overall at about 70% fee-based on a gross
margin basis, and provide a new NGLs platform contributing to a
more stable cash generating profile for ETP and Regency.
ETP will own 70% of the acquired assets through an unlevered
joint-venture and will operate it on behalf of Regency. Moody's
notes the acquisition multiple appears to be fully valued and will
be a leveraging transaction for the Energy Transfer entities. The
incremental debt post-acquisition will push ETP's proforma 2010
leverage to about 5.4 x Debt/EBITDA from 4.8x (including Moody's
debt adjustments and LDH's prorata EBITDA). Regency's Debt/EBITDA
also remains elevated at 5.7x on a prorata basis, including
similar adjustments.
Given the higher implicit leverage and growth spending for the
MLPs, timely issuance of equity and continuing access to both
equity and debt markets will be critical to reduce leverage and
retain access to their revolvers to help fund growth capital,
including potential investments on the LDH assets. Moody's
expects ETP to issue equity in the near-term, while Regency has
already obtained $204 million of equity financing to moderate
acquisition leverage. Structural complexity will also continue to
be an issue for the Energy Transfer entities, with bondholders
removed from direct access to cash flows by debt at the
subsidiaries and various joint ventures.
ETP and Regency should both benefit from rising cash flow in 2011.
ETP's large Fayetteville Express and Tiger Express Pipeline
projects are expected to ramp up and add tariff-based revenues in
2011 and 2012, while Regency should show an uptick in fee-based
contributions with a full year's EBITDA from its Zephyr gas
treatment services and distributions from Midcontinent Express
Pipeline. LDH's expected EBITDA contribution for a part of 2011
and into 2012 should also help both entities restore leverage
metrics to more appropriate levels.
To maintain a stable outlook ETP will need to restore Debt/EBITDA
to around 4.5x, and Regency will need to stabilize leverage below
4.8x Debt/EBITDA to maintain positive ratings momentum. Failure
to raise timely and adequate amounts of equity to fund growth, or
shortfalls in expected cash flow from operations could pressure
the outlooks and ratings for both ETP and Regency, especially in
light of the MLP distribution model.
Moody's is maintaining ETE's negative outlook for the Ba1
Corporate Family Rating and Ba2 securities ratings, reflecting
already high consolidated leverage and the risk that the EBITDA of
its two MLP investments and in turn, the support provided by
growing distributions, could fall short. ETE's consolidated
family leverage at just under 6.1x Debt/EBITDA and 6.5x proforma
for the LDH acquisition is quite elevated and pressures its
ratings as well as those of ETP and Regency. ETE's consolidated
EBITDA and cash distributions from the MLPs will need to show
continued growth and bring Debt/EBITDA back in line to 5.5x or
lower in 2011 to stabilize ETE's rating outlook.
REITTER CORP: Plan Outline Hearing Set for April 26
---------------------------------------------------
The U.S. Bankruptcy Court for the District of Puerto Rico will
convene a hearing on April 26, 2011, to consider the adequacy of
the disclosure statement explaining the bankruptcy plan filed by
Reitter Corporation.
Objections to the form and content of the Disclosure Statement
must be in writing and filed with the Court no later than April
12, 2011.
As reported in the March 18, 2011 edition of the Troubled Company
Reporter, Reitter Corporation has filed with the Court a proposed
Chapter 11 plan of reorganization and a disclosure statement
explaining the plan.
Under the plan, Reitter proposed to make payments to its creditors
which primarily consist of:
(i) payment of all administrative expenses on the later of the
effective date of the plan and the date those claims become
allowed;
(ii) monthly payment of 100% of all allowed priority tax claims
to be made within the sixth year of the date of assessment
of each particular claim;
(iii) payment of 100% of all claims from holders of executory
contracts that are being assumed by Reitter;
(iv) payment of approximately 2.8% of allowed unsecured claims
in 60 monthly payments to begin 30 days after the effective
date of the plan;
Reitter will also continue to pay its secured creditor, Banco
Popular, under an agreed upon payment scheme.
The effective date of the proposed plan will be 120 days after an
order confirming the plan is final and unappealable.
About Reitter Corporation
San Juan, Puerto Rico-based Reitter Corporation filed for Chapter
11 protection (Bankr. D. P.R. Case No. 10-07152) on Aug. 6, 2010.
Alexis Fuentes-Hernandez, Esq., at Fuentes Law Offices, assists
the Debtor in its restructuring effort. In its schedules, the
Debtor disclosed US$20,440,765 in total assets and US$17,250,033
in total debts.
RESTAURANT TIERRA: Case Summary & 16 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Restaurant Tierra Santa Inc.
248 Ave F D Roosevelt
San Juan, PR 00918
Bankruptcy Case No.: 11-02558
Chapter 11 Petition Date: March 23, 2011
Court: U.S. Bankruptcy Court
District of Puerto Rico (Old San Juan)
Debtor's Counsel: Carlos Rodriguez Quesada, Esq.
LAW OFFICE OF CARLOS RODRIGUEZ QUES
P.O. Box 9023115
San Juan, PR 00902-3115
Tel: (787) 724-2867
E-mail: cerqlaw@coqui.net
Scheduled Assets: $1,516,562
Scheduled Debts: $1,815,505
A list of the Company's 16 largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/prb11-02558.pdf
The petition was signed by Hani A. Saba, president.
RHI ENTERTAINMENT: Gets Court OK to Emerge from Chapter 11
----------------------------------------------------------
RHI Entertainment, Inc., announced on March 29, 2011, that it has
received approval from the bankruptcy court to emerge from
Chapter 11 under a pre-packaged Plan of Reorganization that will
effectively reduce debt and obligations by over $400 million. RHI
is working with its key constituencies and exit lenders to
complete the restructuring and make the reorganization plan
effective as quickly as possible.
"This is a great day for RHI Entertainment," said Robert Halmi,
Jr, Chief Executive Officer of RHI Entertainment. "With the
bankruptcy court's approval, we are cleared to emerge from Chapter
11 with a strengthened balance sheet and the financial flexibility
that will enable us to continue to deliver high quality, one-of-a-
kind entertainment content. As we move forward after emergence,
we will further execute on the many operational and financial
improvements we initiated during the reorganization process and
believe we are well positioned for success in the years to come.
"I am especially grateful to our employees for their commitment
and loyalty throughout this challenging process. We look forward
to their continued excellent work, which as always, is the
foundation for the future success of this company."
As part of the successful reorganization plan, upon implementation
RHI will have:
-- Consensually restructured its capital structure,
resulting in a reduction of debt of approximately
$298 million, or 49%;
-- Substantially lowered interest costs, extended debt
maturities and increased overall liquidity;
-- Executed settlement agreements with certain production
partners and talent guilds that eliminated, reduced
and/or favorably amended payment terms associated with
over $100 million in obligations;
-- Allowed for all remaining unsecured creditors claims
to be paid in full.
A form of the reorganization plan and the related disclosure
statement, which provide a substantial description of the
restructuring, may be accessed through www.loganandco.com.
Throughout the duration of the restructuring period, RHI continued
all operations, proceeded with business as usual and maintained
market share. During this period, the company commenced production
on three high profile mini-series -- "Neverland," "Treasure
Island" and "Blackout" - and produced a number of two-hour
television movies for networks including Syfy and Hallmark.
As RHI prepares to emerge from restructuring, the Company also
announced a number of significant content agreements with domestic
and international broadcast networks and other distribution and
production partners.
These include:
-- Syfy (US) -- RHI has reached an agreement to produce
two new two-hour TV movies for Syfy -- "Bog Monster"
and "Scarecrow";
-- Hallmark (US) -- RHI has licensed seven new two-hour
TV movies to Crown Media, including two based on stories
by best-selling international author Rosamunde Pilcher;
-- Power Corp (UK) -- In a multi-faceted agreement valued
at over $20 million in total, the companies will co-produce
three new mini-series and have reached agreement on two
output deals. The mini-series include "Alistair MacLean's
Air Force One Is Down," "Alistair MacLean's Dark Crusader"
and "Blackout," starring Eriq La Salle, Anne Heche,
James Brolin and Billy Zane.
The first output agreement is for four years and includes 40 new
two-hour TV movies and 16 new four-hour TV mini-series. The
second output agreement consists of a substantial number of
library titles. In both agreements, Power has rights to Central
and Eastern Europe and Latin America while RHI retains all other
worldwide rights;
-- M6 (France) --M6 has secured the France- exclusive rights
to the new RHI mini-series "Neverland," starring Rhys Ifans,
Anna Friel, Bob Hoskins and the voice of Keira Knightly,
as well as the France-exclusive rights to the mini-series
"Seven Deadly Sins." In addition, M6 acquires the rights
to a number of new two-hour TV movies and library mini-
series;
-- France TV (France) -- France TV has acquired the rights
to RHI's new mini-series "Treasure Island," starring
Eddie Izzard, Elijah Wood and Donald Sutherland. France
TV also acquires rights to "Moby Dick," as well as several
library mini-series.
-- Tele Munchen (Germany) -- Tele Munchen has acquired
Germany-exclusive rights to "Neverland" and "Treasure
Island." An additional agreement for a major mini-series
co-production between TMG and RHI is expected to be
announced shortly.
"RHI is producing, distributing and acquiring a tremendous amount
of content for the global marketplace," commented Halmi Jr. "We
continue to be in discussions with networks and broadcasters about
new projects throughout the world and you will be hearing much
more from us very shortly."
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.
RHI and its affiliates filed for Chapter 11 bankruptcy protection
(Bankr. S.D.N.Y. Lead 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. 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.
The Debtors disclosed $524,722,000 in total assets and
$834,094,000 as of the Chapter 11 filing.
RURAL/METRO CORP: S&P Puts 'B+' Rating on CreditWatch Negative
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it placed its 'B+'
corporate credit rating on Scottsdale, Arizona-based Rural/Metro
Corp., as well as all related issue-level ratings issued by its
subsidiaries Rural/Metro Operating Co. LLC and Rural/Metro Inc.,
on CreditWatch with negative implications. CreditWatch with
negative implications means that S&P could lower the ratings
following the completion of S&P's review.
The CreditWatch placement follows Rural/Metro's announcement that
it agreed to be acquired by private-equity firm Warburg Pincus for
$438 million. The acquisition price does not include $261 million
of debt on Rural/Metro's balance sheet.
"In S&P's opinion, Warburg Pincus will most likely finance the
equity purchase price with meaningful debt (at least 50%)," said
Standard & Poor's credit analyst Rivka Gertzulin, "weakening
Rural/Metro's credit metrics below current levels, which include
lease-adjusted debt to EBITDA of 4.3x and funds from operations to
total debt of 21% for the 12 months ended Dec. 31, 2010." S&P
expects Rural/Metro to maintain leverage below 5x to maintain its
current ratings.
"However," added Ms. Gertzulin, "S&P would consider a downgrade if
leverage exceeds 5x and S&P expects it to remain there on a
sustained basis." Currently S&P views the company's business risk
profile as weak and its financial risk profile as aggressive.
S&P will resolve the CreditWatch listing when S&P receives more
information regarding the financing of this transaction. S&P will
then assess the company's financial policy and the effect of the
transaction on the company's capital structure.
SAND HILL: To Sell Water Disposal Biz. Assets for $20 Million
-------------------------------------------------------------
Sand Hill Foundation, LLC and its debtor affiliates seek the U.S.
Bankruptcy Court for the Eastern District of Texas' permission to
sell their water disposal business assets to Heckmann Water
Resources, Inc. and Larry Joe Eaves, free and clear of liens, for
$20,000,000.
The Debtors' assets involved in the water disposal business also
include licenses and permits, furniture, fixtures, equipment,
machinery, furnishings, contracts and leases, as well as other
tangible and intangible property.
The Debtors believe that these assets are very valuable, thus,
they have determined that their best course to reorganize is to
sell the water disposal assets to Heckmann.
Specifically, the Debtors have decided to sell substantially all
of their water disposal assets, including but not limited to:
(a) Sand Hill #2 Well;
(b) Sand Hill #5 Well;
(c) 30 trucks and vacuum trailers, furniture, fixtures,
equipment, machinery, furnishings, and all other tangible
property;
(d) certain contracts and leases; and
(e) all prepaid expenses and goodwill.
With respect to adequate assurance of future performance, Heckmann
will continue to perform the obligations of Debtors under the
Assumed Contracts. The Debtors are current with respect to their
obligations under the Assumed Contracts, and Heckmann is willing
and has the financial ability to continue to perform.
About Sand Hill
Sand Hill Foundation, LLC is an oilfield service and construction
company. Sand Hill Foundation employs 145 people and owns assets
in the approximate amount of $10,000,000 including numerous
vehicles and equipment pieces of equipment.
Sand Hill Panola SWD #2 LLC owns a saltwater disposal well in
Panola County, Texas scheduled at over $2,500,000. Sand Hill
Panola SWD #5 LLC also owns a saltwater disposal well in Panola
County, Texas scheduled at over $1,500,000.
The Company filed for Chapter 11 bankruptcy protection (Bankr.
E.D. Tex. Case No. 10-90209) on May 25, 2010. Jeffrey Wells
Oppel, Esq., at Oppel, Goldberg & Saenz P.L.L.C., assists the
Debtor in its restructuring effort. The Company estimated its
assets and debts at $10 million to $50 million.
The U.S. Trustee has formed an official committee of unsecured
creditors in the Chapter 11 case.
SANSWIRE CORP: Unveils New Unmanned Airship "Argus One"
-------------------------------------------------------
Sanswire Corp. unveiled the Company's new UAV - "Argus One". The
introduction of Argus One follows the Company's recent filing of a
provisional patent application in the United States for the new
airship design and illustrates the uniqueness of the Company's UAV
design. Argus One, named after the Greek God Argus, the all-
seeing God with one hundred eyes, was designed to meet certain
requirements for intelligence, surveillance and reconnaissance
(ISR) applications for the US military and other governmental
agencies. Argus One provides governmental and commercial
solutions to a UAV market expected to exceed $62 billion by 2015.
Argus One is a lighter-than-air (LTA) UAV designed to fly over
areas of interest for extended durations carrying various payloads
designed to allow for ISR, communications and other applications.
Argus One has low acquisition, maintenance and operational costs
compared to heavier-than-air UAVs currently in operation. The
design and construction of Argus One follows years of research and
development by the Company of alternative LTA technologies and
solutions and combines innovative approaches to LTA technology
proprietary to Sanswire. Argus One is Sanswire's initial LTA UAV
equipped with the Company's newly developed, proprietary
stabilization system that autonomously controls the level of
rigidity of the airship in flight. This airship design
significantly differs from many of the LTA platforms that have
been in operation for over a century.
Argus One was specifically developed by Sanswire using US
developed technologies that take full advantage of the
microelectronics and command and control technologies protected
under the International Traffic in Arms Regulations (ITAR) for
potential US Government and approved commercial customers. The
Company is also refocusing its efforts on establishing
relationships with research and development and flight facilities
in the US for development of the Argus line of airships.
As part of this refocused business strategy, the Company has
entered into a Settlement Agreement with TAO Technologies that,
among other things, terminates all existing agreements between the
parties and provides for the dissolution of the Sanswire-TAO joint
venture. As part of the Settlement Agreement, TAO is entitled to
retain all consideration previously paid to it and the debt owing
by the Company under the prior agreements of approximately $2.5
million has been discharged. The Company is currently in
discussions with TAO to develop a mutually beneficial relationship
for future efforts. The Company plans to continue to review all
outstanding debts on its balance sheet as part of an ongoing
initiative to reduce the Company's liabilities and strengthen its
balance sheet.
Sanswire Chairman Michael K. Clark stated "The unveiling of Argus
One represents a key milestone for the Company and brings us
another step closer to commercial production of our airships."
Sanswire CEO Glenn Estrella, added "Argus One is the airship we
believe can address and help with many of the ISR and
communications challenges facing the world today, both domestic
and abroad. We look forward to demonstrating and proving Argus
One's capabilities and potential."
Argus One was developed for Sanswire under contract by Eastcor
Engineering, a US Department of Defense prime contractor,
specializing in high technology engineering products and services.
Sanswire and Eastcor continue to work together on Argus One and
other technologies at the Company's hangar facility located on the
grounds of the Easton Airport in Easton, MD where the Argus One is
currently housed.
About Sanswire Corp.
Aventura, Fla.-based Sanswire Corp. develops, markets and sells
autonomous, lighter-than-air unmanned aerial vehicles capable of
carrying payloads that provide persistent security solutions at
low, mid and high altitudes. The Company's airships are designed
for use by government-related and commercial entities that require
real-time intelligence, surveillance and reconnaissance support
for military, homeland defense, border and maritime missions.
The Company's balance sheet as of Sept. 30, 2010, showed
$1.6 million in total assets, $20.4 million in total liabilities,
and a stockholders' deficit of $18.8 million. The Company had a
working capital deficit of $20.2 million and an accumulated
deficit of $142.4 million at Sept. 30, 2010.
As reported in the Troubled Company Reporter on April 14, 2010,
Rosen Seymour Shapss Martin & Company 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 has experienced significant losses
and negative cash flows, resulting in decreased capital and
increased accumulated deficits.
SHAN HOLDING: Case Summary & 9 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Shan Holding, LP
dba Country Hearth Inn
fdba Day's Inn
Rodeway Inn
30 Keller Avenue
Lancaster, PA 17601
Bankruptcy Case No.: 11-12273
Chapter 11 Petition Date: March 28, 2011
Court: U.S. Bankruptcy Court
Eastern District of Pennsylvania (Philadelphia)
Judge: Magdeline D. Coleman
Debtor's Counsel: Joseph T. Bambrick, Jr., Esq.
JOSEPH T. BAMBRICK, JR. ESQ.
529 Reading Avenue, Suite K
West Reading, PA 19611
Tel: (610) 372-6400
Email: NO1JTB@juno.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/paeb11-12273.pdf
The petition was signed by Jayprakash Sheth and Pankaj Sheth,
partners.
Affiliate that earlier sought Chapter 11 protection:
Entity Case No. Petition Date
------ -------- -------------
Vraj Brig PA, LLC 11-11078 02/15/11
SHUBH HOTELS: Kiran Patel Nears Deal With Creditors
------------------------------------------------------------
Mark Belko at the Pittsburgh Post-Gazette reports that Dr. Kiran
C. Patel said he appears to be close to reaching a deal to settle
claims with vendors and other unsecured creditors who are owed
millions of dollars by former Hilton Pittsburgh.
According to the report, David Lampl, attorney for the committee
of unsecured creditors, said that the two sides were "extremely
close" to reaching an agreement on payments to vendors and others.
Mr. Belko says a deal with unsecured creditors is the last hurdle
standing between Dr. Patel and his bid to rescue the troubled
hotel, which lost the Hilton name in September. It is now known
as the Wyndham Grand Pittsburgh Downtown.
The Pittsburgh Post-Gazette relates that earlier this month, Dr.
Patel reached a settlement with New York lender BlackRock
Financial Management Inc. in their battle for control over the
hotel. As part of that deal, he will pay BlackRock a $10 million
"settlement fee" that will be used to reduce the $49.6 million
mortgage on the property.
Mr. Lampl said he hoped to have a deal in place for creditors by
Tuesday, when U.S. Bankruptcy Judge Jeffery A. Deller will hold a
hearing on Dr. Patel's proposed settlement with BlackRock and his
amended plan of reorganization, says Mr. Belko. The committee has
deemed Dr. Patel's treatment of unsecured creditors under the
amended plan as unacceptable, he adds.
The Pittsburgh Post-Gazette notes it would pay some preferred
creditors -- those with which the hotel wants to do business -- 35
cents on the dollar upfront, or in full over four years. The rest
would be paid from a pot of money that the committee estimates
would provide them with less than 10 cents on the dollar.
About Shubh Hotels Pittsburgh
Boca Raton, Florida-based Shubh Hotels Pittsburgh, LLC, owns and
operates the largest hotel in the City of Pittsburgh. For roughly
50 years, the Hotel operated as a Hilton franchise. Hilton
terminated the Hilton Franchise Agreement by letter dated
Sept. 1, 2010. The Debtor filed for Chapter 11 bankruptcy
protection (Bankr. W.D. Pa. Case No. 10-26337) on Sept. 7, 2010.
Scott M. Hare, Esq., in Pittsburgh, Pennsylvania, and attorneys at
Rudov & Stein, P.C., serve as co-counsel. The Debtor estimated
its assets at $10 million to $50 million and debts at $50 million
to $100 million.
SINOBIOMED INC: CEO Yu Has Options to Buy 5 Million Shares
----------------------------------------------------------
In a Form 3 filing with the U.S. Securities and Exchange
Commission, George Yu, president and CEO at Sinobiomed Inc.,
disclosed that he has option to buy 5 million shares of common
stock of the Company, which Option will expire on Sept. 1, 2015.
About Sinobiomed
Sinobiomed Inc. formerly CDoor Corp. (OTC BB: SOBM)
-- http://www.sinobiomed.com/-- was incorporated in the State of
Delaware. The Company is a Chinese developer of genetically
engineered recombinant protein drugs and vaccines. Based in
Shanghai, Sinobiomed currently has 10 products approved or in
development: three on the market, four in clinical trials and
three in research and development. The Company's products respond
to a wide range of diseases and conditions, including: malaria,
hepatitis, surgical bleeding, cancer, rheumatoid arthritis,
diabetic ulcers and burns, and blood cell regeneration.
Sinobiomed last filed financial statements with the Securities and
Exchange Commission in 2008.
Sinobiomed Inc.'s consolidated balance sheet at March 31, 2008,
showed $8,330,453 in total assets and $15,460,323 in total
liabilities, resulting in a $7,129,870 total stockholders'
deficit.
Going Concern Doubt
Schumacher & Associates Inc., in Denver, expressed substantial
doubt about Sinobiomed Inc.'s ability to continue as a going
concern after auditing the company's consolidated financial
statements for the year ended Dec. 31, 2007. The auditing
firm reported that the Company has experienced losses since
commencement of operations and has negative working capital and a
stockholders' deficit.
The Company is in the process of researching, developing, testing
and evaluating proposed new pharmaceutical products and has not
yet determined whether these products are technically or
economically feasible. Management's plan is to actively search
for new sources of capital, including government and non-
government grants toward research projects and new equity
investment.
SOURCE PRECISION: 16 Molecular Diagnostic Programs Up for Sale
--------------------------------------------------------------
Joseph F. Finn, Jr., C.P.A., Assignee for the Benefit of Creditors
of Source Precision Medicine, Inc., d/b/a Source MDx announced
that 16 molecular diagnostic development programs will be offered
for sale on April 29, 2011.
These molecular diagnostic programs are blood-based, not tissue-
based. Eight programs cover the following cancers: prostate, lung,
breast, cervical, ovarian, colon, bladder and melanoma. In
addition, two programs cover infectious diseases: sepsis and
hepatitis C infection; three programs cover autoimmune diseases:
rheumatoid arthritis, multiple sclerosis, lupus, osteoarthritis
and ocular and one covers transplant rejection.
Persons interested in bidding must sign a Confidentiality
Disclosure Agreement obtained from Finn's office -
jffinnjr@finnwarnkegayton.com or 781-237-8840. They will then
receive a bid package.
About Joseph F. Finn
Joseph F. Finn, Jr., C.P.A. is the founding partner of the firm,
Finn, Warnke & Gayton -- http://www.finnwarnkegayton.com--
Certified Public Accountants of Wellesley Hills, Massachusetts. He
works primarily in the area of management consulting for
distressed enterprises, bankruptcy accounting and related matters,
such as assignee for the benefit of creditors and liquidating
agent for a corporation. He has been involved in a number of loan
workouts and bankruptcy cases for thirty-five (35) years. His most
recent Assignments for the Benefit of Creditors in the biotech
field include Spherics, Inc., ActivBiotics, Inc., Prospect
Therapeutics, Inc., EPIX Pharmaceuticals Inc. and NoblePeak Vision
Corp.
SUFFOLK REGIONAL: Chapter 9 Case Assigned to Judge Craig
--------------------------------------------------------
The Honorable Dennis Jacobs, Chief Judge of the U.S. Court of
Appeals, Second Circuit, has designated Chief Bankruptcy Judge
Carla Craig to conduct all proceedings regarding the Suffolk
Regional Off-Track Betting Corporation Chapter 9 bankruptcy case
in the U.S. Bankruptcy Court for the Eastern District of New York.
The case is now transferred to Eastern District of New York
(Brooklyn), under Case No. 11-42250, from Eastern District of New
York (Central Islip), Case No. 11-71699.
Hauppauge, New York-based Suffolk Regional Off-Track Betting
Corporation, aka Suffolk OTB, filed for Chapter 9 bankruptcy
protection (Bankr. E.D. N.Y. Case No. 11-42250) on March 18, 2011.
Christopher F. Graham, Esq., at McKenna Long & Aldridge LLP,
serves as the Debtor's bankruptcy counsel. The Debtor estimated
its assets and debts at $10 million to $50 million.
SUFFOLK REGIONAL: Files List of 30 Largest Unsecured Creditors
--------------------------------------------------------------
Suffolk Regional Off-Track Betting Corporation has filed with the
U.S. Bankruptcy Court for the Eastern District of New York a list
of its 30 largest unsecured creditors.
Debtor's List of 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Yonkers Raceway Host track $2,467,398
810 Central Avenue settlements,
Yonkers, NY 10704 including
commissions
payable on
racing wagers;
other statutory
commissions;
Article 78
Proceedings --
Stayed
New York Racing Host track $1,711,341
Association, Inc. settlements,
P.O. Box 90 including
Jamaica, NY 11417 commissions
payable on
racing wagers;
Other statutory
Commissions
New York State and Contributions for $474,381
Local Retirement System future retirement
110 State Street benefits of
Albany, NY 12244 current
employees;
Article 78
Proceeding --
Award on appeal
Finger Lakes Racetrack Host track $461,443
P.O. Box 25250 settlements,
Farmington, NY 14425 including
commissions
payable on
racing wagers;
other statutory
commissions
New York State Employee $384,894
Department of Civil benefits
Service - Employee
Benefits Division
P.O. Box 3801
New York, NY 10008-3801
Stewart Avenue Promissory note $370,089
Associates LLC in consideration
877 Stewart Avenue, for branch
Suite 1 renovations; rent
Garden City, NY 11530
Monticello Raceway Host track $352,639
Routes 17 and 17B settlements,
Monticello, NY 12701 including
commissions
payable on
racing wagers;
other statutory
commissions
New York City Statutory $204,126
New York City Law Department surcharge
Sportech, Inc. Computational $163,984
and
communication
charges and
equipment rental
Turfway Park Host track $75,894
settlements,
including commissions
payable on
racing wagers
New York State Pari-Mutuel Tax $72,243
Department of Taxation on wagers
and Finance
Teamsters Union Local 237 Employee benefits $71,515
Parx Host track $62,240
settlements
including
commissions
payable on
racing wagers
Daly Racing Form Publications for $50,922
re-sale
New York State Racing Regulatory Fee $48,232
and Wagering Board on wagers
McKenna, Long and Legal services $46,458
Aldridge LLP
Sunland Park Host track $44,497
settlements,
including
commissions
payable on
racing wagers
XpressBet, Inc. Host track $42,547
settlements,
including
commissions
payable on
racing wagers
Nassau Regional Off-Track Statutory $37,000
Betting Corporation surcharge (estimate)
Churchill Downs Inc./ Host track $36,440
Churchill Downs settlements,
Simulcast Network including
commissions
payable on
racing wagers
Beulah Park Host track $35,837
settlements,
including
commissions
payable on
racing wagers
Los Angeles Turf Club Host track $31,089
(Santa Anita) settlements,
including
commissions
payable on
racing wagers
Roberts Communications, LLC Communication $29,400
services
Turf Paradise Host track $26,322
settlements,
including
commissions
payable on
racing wagers
Long Island Power Authority Utility services $26,103
Penn National Group Host track $25,016
(Charlestown) settlements,
including
commissions
payable on
racing wagers
Maryland Jockey Club Host track $24,033
(Laurel Park) settlements,
including
commissions
payable on
racing wagers
Nasrin Communication $23,475
services
Lewiston Raceway Settlement Host track $23,081
settlements,
including
commissions
payable on
racing wagers
About Suffolk Regional
Hauppauge, New York-based Suffolk Regional Off-Track Betting
Corporation, aka Suffolk OTB, filed for Chapter 9 bankruptcy
protection on March 18, 2011 (Bankr. E.D.N.Y. Case No. 11-42250).
The case was later transferred to Eastern District of New York
(Brooklyn), under Case No. 11-42250, with Judge Carla Craig
presiding over the case.
Christopher F. Graham, Esq., at McKenna Long & Aldridge LLP,
serves as the Debtor's bankruptcy counsel. The Debtor estimated
its assets and debts at $10 million to $50 million.
SUMMIT BUSINESS: Court Approves Disclosure Statement
----------------------------------------------------
Bankruptcy Law360 and Dow Jones' DBR Small Cap report that Summit
Business Media Holding Co. received bankruptcy court approval
Monday for its disclosure statement, clearing the way for the
Company to send its reorganization plan to creditors for a vote.
According to DBR, Judge Walsh on Monday signed off on Summit's
outline of its Chapter 11 plan of reorganization, called a
disclosure statement. The judge's approval of the plain-language
document is needed to ensure creditors have the details they need
to cast an informed vote on the plan describing how Summit will
pay them and emerge from bankruptcy.
DBR relates that Judge Walsh directed creditors to submit their
ballots by April 28 and said he'd consider confirming the
restructuring plan itself at a May 5 hearing.
As reported in the Feb. 22, 2011 edition of the Troubled Company
Reporter, Summit Business Media Holding Company, et al., filed on
Feb. 1, 2011, their Chapter 11 Plan of Reorganization with the
U.S. Bankruptcy Court for the District of Delaware.
On or as soon as practicable after the Effective Date, the
Reorganized Debtors will issue new equity interests pursuant to
Section 4.8 of the Plan. From and after the Effective Date, each
of the Reorganized Debtors will be deemed a separate and distinct
entity, properly capitalized, vested with all of the assets of
such debtor as they existed prior to the Effective Date and having
the liabilities and obligations provided for under the Plan.
Pursuant to the Plan terms, Allowed Priority Tax Claims, which are
unimpaired and unclassified under the Plan, will be paid over a
period not later than 5 years after the Petition Date.
Holders of Pre-Petition First Lien Secured Claims will receive a
Pro Rata Share of participation in a $110 million first-priority
first-lien term loan, and (b) a Pro Rata Share of 94.7% of the
Class A/B/C Units (with each holder (or designated affiliate)
being entitled to choose Class A Units, Class B Units or Class C
Units). The Class A/B/C Units will be entitled to a total of
94.44% of the distributions made with respect to NewCo LLC Equity.
Pre-Petition Second Lien Claims will receive, (a) a Pro Rata Share
of $1 million by wire transfer of immediately available funds and
(b) a Pro Rata Share of the Class E Units. The Class E Units will
be entitled to a total of 5.56% of the distributions made with
respect to NewCo LLC Equity.
Holders of Allowed General Unsecured Claims will receive a Pro
Rata Share of $100,000.
Equity Interests in Summit will be canceled and be of no further
force and effect. Holders are not entitled to receive or retain
any property or distribution under the Plan.
Equity Interests in All Debtors Other Than Summit will be
reinstated.
A copy of the Chapter 11 Plan is available for free at:
http://bankrupt.com/misc/SummitBusiness.PLan.pdf
About Summit Business Media
New York-based Summit Business Media Holding Company --
http://www.summitbusinessmedia.com/-- is a business-to-business
publisher and event organizer serving the insurance, investment
advisory, professional services and mining investment markets.
Summit employs nearly 400 employees in ten offices across the
United States. The Company was formed through seven acquisitions
since 2006.
Summit Business is a Delaware corporation that wholly owns Summit
Business Media Intermediate Holding Company, LLC, a Delaware
limited liability company. Summit Intermediate wholly owns The
National Underwriter Company, an Ohio corporation, which in turn
wholly owns six distinct subsidiary companies which comprise the
remaining Debtors.
Summit Business Media Holding Company and eight affiliates filed
for Chapter 11 protection (Bankr. D. Del. Case No. 11-10231) on
Jan. 25, 2011.
Kimberly E. Lawson, Esq., and Kathleen Murphy, Esq., at Reed Smith
LLP, in Wilmington, Delaware; and J. Andrew Rahl, Jr., Esq., at
Reed Smith LLP, in New York, serve as counsel to the Debtors.
Lincoln Partners Advisors LLC is the financial advisor. Garden
City Group is the claims and notice agent. Summit estimated
assets and debts of $100 million to $500 million in its Chapter 11
petition.
SUMNER REGIONAL: Files Chapter 11 Plan of Liquidation
-----------------------------------------------------
SRHS Bankruptcy, Inc. f/k/a Sumner Regional Health Systems, Inc.
and its debtor affiliates filed with the U.S. Bankruptcy Court for
the Middle District of Tennessee a Disclosure Statement explaining
their Plan of Liquidation on March 1, 2011.
The Plan provides a means by which the proceeds of the liquidation
of the Debtors' assets will be distributed to creditors under
Chapter 11 and sets forth the treatment of all Claims against the
Debtors.
The Debtors have consummated the Court-approved sale of
substantially all of their assets to LifePoint Acquisition Corp.
The Plan provides for the distribution to creditors of cash
generated from the sale of the Sale Assets, collections of
accounts receivables, and the sale, liquidation or other
disposition of the Debtors' remaining assets.
A summary of the treatment of Claims under the Plan is as follows:
Class Type of Claim Treatment of Allowed Claims
----- ------------- ---------------------------
- Administrative Each holder of an Allowed
Claims Administrative Claim will receive
Cash in an amount equal to the
Allowed Claim.
- Priority Tax Each holder of an Allowed
Claims Priority Tax Claim will receive
either payment in full in Cash or
regular installment payments in
Cash: (i) of a total value, as of
the Effective Date, equal to the
Allowed amount of the Claim; (ii)
which total value will include
simple interest to accrue on any
outstanding balance of the
Allowed Priority Tax Claim
starting on the Effective Date at
the rate of interest determined
under applicable nonbankruptcy
law pursuant to Section 511 of
the Bankruptcy Code; (iii) over a
period ending not later than five
years after the Petition Date;
and (iv) in a manner not less
favorable than the most favored
nonpriority Unsecured Claim
provided for by the Plan.
- Professional Each holder of an Allowed
Fee Claims Professional Fee Claim will be
paid in Cash in an amount equal to
the Allowed Claim.
- U.S. Trustee U.S. Trustee Fees incurred by the
Fees Debtors' estates prior to the
Effective Date will be paid in
Cash on the Effective Date in
accordance with the applicable
schedule for payment of those
fees. Until the Chapter 11 cases
are closed by entry of a final
decree of the Court, the Plan
Administrator will pay all
additional U.S. Trustee Fees
incurred in accordance with the
applicable schedule for the
payment of those fees.
1 Bond Trustee Pursuant to the Settlement
Secured Claim Agreement, the Bond Trustee
received $120,963,615 at the
Closing in partial satisfaction of
the Bond Trustee Secured Claim,
and also has been deemed to have
applied the Indenture Held Funds
to further reduce the Bond Trustee
Secured Claim. The Bond Trustee
will additionally receive (i)
distributions of (w) the Bond
Holdback Distribution, (x) the
Downstream LAC Proceeds, (y) the
proceeds of any sale, liquidation
or other disposition of the
Remaining Assets subject to the
Bond Trustee Liens and (z) the
proceeds of any Avoidance Actions,
which distributions will reduce
the Participating Remaining Bond
Claim on a dollar for dollar
basis, (ii) Pro Rata distributions
of Available Cash, which
distributions will be made as if
the Participating Remaining Bond
Claim was an Unsecured Claim,
which distributions will reduce
the Participating Remaining Bond
Claim on a dollar for dollar
basis, and (iii) after and only in
the event all Allowed Claims in
Classes 2, 3 and 4 of the Plan
have been satisfied or reserved
for in full in accordance with the
provisions of the Plan,
distributions of Available Cash;
provided, however, that in no
event will the Bond Trustee
receive more than the amount of
the Bond Trustee Secured Claim
without interest.
2 Other Secured Each holder of an Allowed Other
Claims Secured Claim will receive one of
these alternative treatments, at
the option of the Debtors: (a)
payment in full in Cash; (b) the
return of the collateral securing
the Claim; (c) the treatment
described in Section 1124(2) of
the Bankruptcy Code; or (d) other
recovery necessary to satisfy
Section 1129 of the Bankruptcy
Code.
3 Other Priority Each holder of an Allowed Other
Claims Priority Claim will be paid in
full in Cash.
4 Unsecured Each holder of an Allowed
Claims Unsecured Claim will receive Pro
Rata distributions of Available
Cash until each holder receives
100% of its Allowed Claim without
interest.
5 County After and only in the event all
Residual Claim Allowed Administrative Claims,
Priority Tax Claims, Professional
Fee Claims, Claims in Classes 1
through 4 of the Plan, and all
costs and expenses respecting
administration of the Plan have
been satisfied or reserved for in
full in accordance with the
provisions of the Plan, the County
will receive any remaining
Available Cash.
A full-text copy of the Disclosure Statement is available for free
at: http://bankrupt.com/misc/SumnerRegional_Mar1DS.pdf
Judge Marian F. Harrison will consider adequacy of the Disclosure
Statement on April 26, 2011. Objections to the Disclosure
Statement must be in writing and be filed on or before April 20.
About Sumner Regional
Gallatin, Tennessee-based Sumner Regional Health Systems, Inc.,
operates hospitals in Tennessee. As of Sept. 1, 2010, Sumner
Regional Health Systems, Inc., operates as a subsidiary of
Lifepoint Hospitals Inc.
On April 30, 2010, the Company and six affiliates filed for
bankruptcy protection under Chapter 11 of the Bankruptcy Code
(Bankr. M.D. Tenn. Lead Case No. 10-04766). Jeffrey w. Levitan,
Esq., and Adam T. Berkowitz, Esq., at Proskauer Rose, LLP, in New
York, represent the Debtors as lead counsel. Robert A. Guy, Esq.,
at Frost Brown Todd LLC, in Nashville, Tenn., represents the
Debtors as co-counsel. The Company estimated its assets and debts
at $100 million to $500 million at the time of the filing.
On June 24, 2010, the Bankruptcy Court entered an order
authorizing the sale of substantially all of the Debtors' assets
to LifePoint Acquisition Corp. and its successors and assigns2.
On July 30, 2010, the Debtors filed a motion in the Bankruptcy
Court to approve a settlement relating to the proposed
distribution of proceeds from the sale. On August 17, 2010, the
Court entered an order granting the Settlement Motion.
SUMNER REGIONAL: Obtains Court Okay to Purchase D&O Policy
----------------------------------------------------------
SRHS Bankruptcy, Inc. f/k/a Sumner Regional Health Systems, Inc.
and its debtor affiliates sought and obtained Court authorization
to purchase a D&O liability tail insurance policy.
Until recently, the Debtors had a directors and officers insurance
policy in effect with $15 million in coverage, which the Debtors
planned on renewing in the ordinary course of business. However,
shortly before the Old D&O Policy was scheduled to expire on
February 20, 2011, the Debtors were advised by their insurance
carrier that it would not renew the Old D&O Policy. Rather, the
insurance carrier offered to provide a new D&O Policy for a period
of one year with $5 million in coverage.
Given the limited timeframe and in order to ensure continuity of
coverage, the Debtors purchased the New D&O Policy on February 18,
2011 at a $33,000 cost to the Debtors' estates. In the event the
Debtors confirm a plan of liquidation and the Debtors' board is
dissolved prior to end of the New D&O Policy, the policy may be
terminated and the remaining premiums will be refunded to
the Debtors.
About Sumner Regional
Gallatin, Tennessee-based Sumner Regional Health Systems, Inc.,
operates hospitals in Tennessee. As of Sept. 1, 2010, Sumner
Regional Health Systems, Inc., operates as a subsidiary of
Lifepoint Hospitals Inc.
On April 30, 2010, the Company and six affiliates filed for
bankruptcy protection under Chapter 11 of the Bankruptcy Code
(Bankr. M.D. Tenn. Lead Case No. 10-04766). Jeffrey w. Levitan,
Esq., and Adam T. Berkowitz, Esq., at Proskauer Rose, LLP, in New
York, represent the Debtors as lead counsel. Robert A. Guy, Esq.,
at Frost Brown Todd LLC, in Nashville, Tenn., represents the
Debtors as co-counsel. The Company estimated its assets and debts
at $100 million to $500 million at the time of the filing.
On June 24, 2010, the Bankruptcy Court entered an order
authorizing the sale of substantially all of the Debtors' assets
to LifePoint Acquisition Corp. and its successors and assigns2.
On July 30, 2010, the Debtors filed a motion in the Bankruptcy
Court to approve a settlement relating to the proposed
distribution of proceeds from the sale. On August 17, 2010, the
Court entered an order granting the Settlement Motion.
SW BOSTON: Has Deal to Sell W Hotel to Pebblebrook for $89.5-Mil.
-----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that SW Boston Hotel Venture LLC, the owner of the W Hotel
in Boston, has an offer to sell the hotel portion of the project
for $89.5 million. The bankruptcy judge in Boston will hold a
hearing today, March 30, to approve auction and sale procedures.
Mr. Rochelle relates that Peeblebrook Hotel Trust, a real estate
investment trust, will purchase the 225-unit hotel and garage
portion of the property, absent a higher offer. SW says the price
is $30 million more than the appraisal offered by Prudential
Insurance Co. of America, the secured lender currently owed $148
million.
According to the report, under the deal, SW will retain ownership
of the 90 unsold condominium units. Thirty-two have been sold,
and five are under contract.
Sawyer Enterprises' Statement
Sawyer Enterprises announced on March 29, 2011, that it has
reached an agreement with Pebblebrook Hotel Trust of Bethesda,
Maryland for the sale of its W Hotel in Boston to Pebblebrook for
$89.5 million.
Under the agreement, an affiliate of Starwood Hotels and Resorts
Worldwide, Inc. will continue to operate the 235 room luxury hotel
and its affiliated W Residences.
"We were not looking to sell, but Pebblebrook presented us with a
compelling offer," said Carol Sawyer Parks, the Chief Executive
Officer of Sawyer Enterprises, a Boston-based owner and operator
of real estate. "The price is clear evidence of the strong
attributes of the "W" brand, and by extension has a positive
impact on the value of the "W" Residences. Both the hotel and the
residences will continue to be managed under the "W" flag. As for
the hotel, it will be business as usual, with the Hotel's guests
receiving the luxury amenities and services they have come to
expect."
Pebblebrook is a highly respected, publicly traded hospitality
real estate investment trust that has made a number of
acquisitions of late, such as the Sir Francis Drake Hotel in San
Francisco and the Hotel Monaco in Washington, D.C.
"With the steady sales of the residences and the funds provided by
the sale of the hotel, our timetable to pay off our indebtedness
will be accelerated," Mr. Parks said. "We have 43 sales closed or
under agreement, and sales activity continues to be strong. In
addition, our bankruptcy reorganization plan will be filed later
this week and we anticipate approval in June."
Sawyer Enterprises, Inc., develops, owns, and operates hotels and
spas. The company is based in Boston, Massachusetts.
About SW Boston Hotel
Boston, Massachusetts-based SW Boston Hotel Venture LLC is the
developer of the W Hotel in Boston. The Company filed for Chapter
11 bankruptcy protection on April 28, 2010 (Bankr. D. Mass. Case
No. 10-14535). Harold B. Murphy, Esq., and Natalie B. Sawyer,
Esq., at Hanify & King, P.C., is the Debtors' bankruptcy counsel.
Edwards Angell Palmer & Dodge LLP is the Company's special
counsel. The Company estimated its assets and debts at
$100 million to $500 million.
SWANK & MCPOLAND: Case Summary & 18 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Swank & McPoland, LLC
14341 N Hauser Lake Road
Post Falls, ID 83854
Bankruptcy Case No.: 11-01412
Chapter 11 Petition Date: March 23, 2011
Court: United States Bankruptcy Court
Eastern District of Washington (Spokane/Yakima)
Debtor's Counsel: Brett T. Sullivan, Esq.
SULLIVAN STROMBERG, PLLC
827 W 1st Ave., Suite 425
Spokane, WA 99201-3914
Tel: (509) 413-1004
Fax: (509) 413-1078
E-mail: bretts@sullivanstromberg.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 18 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/waeb11-01412.pdf
The petition was signed by Don Swank, member.
T.H. PROPERTIES: Fights Case Real Estate Adviser's Conversion Plea
------------------------------------------------------------------
David Hare at Montgomery News reports that T.H. Properties, L.P.
attorney Natalie Ramsey said real estate adviser Robert Reeves'
motion to convert the developer's Chapter 11 bankruptcy case to
Chapter 7 liquidation "is surprising both in its superficial
handling of the facts of this case, and in its casual lack of
concern for the company and their creditors."
According to the report, Mr. Ramsey goes on to say that Mr. Reeves
"should know as well as anyone the time and complexity associated
with reorganizing a homebuilder facing the financial and market
conditions present here." Moreover, Mr. Reeves' motion "does not
reflect the substantial progress achieved in these cases in a
relatively short period of time" and "seeks to liquidate the
Company despite the fact that it would not benefit -- but instead
would financially harm -- both himself and all parties of
interest."
Montgomery News recounts that in 2009, Mr. Reeves was brought on
as a real estate adviser in THP's bankruptcy case. The developer
claims he was let go in August that same year. Mr. Reeves
maintains THP never sent him a termination notice or filed one
with the court. In his initial motion to convert on March 4,
Reeves maintained he is owed more than $76,000, a mere portion
of the $2.2 million THP is said to owe in administrative fees.
Mr. Reeves recently filed a supplement to Ramsey's response to his
motion to convert. "THP has not made enough progress during the
last 23 months to warrant its continuing under Chapter 11
protection," the report quotes Mr. Reeves as saying. "THP has
been operating not as a viable business; if it had been, it would
be out of bankruptcy by now."
According to the Troubled Company Reporter on March 9, 2011,
Mr. Reeves said he is owed $76,854. "Failure to pay administrative
professionals is considered adequate cause for seeking conversion
[to Chapter 7]."
About T.H. Properties
Philadelphia-based T.H. Properties, L.P., has 12 working
developments in Pennsylvania and New Jersey. Timothy Hendricks
and his brother Todd started the firm in 1992. T.H. Properties
and its affiliates filed for Chapter 11 bankruptcy protection on
April 30, 2009 (Bankr. E.D. Pa. Case No. 09-13201). Northgate
Development Company, LP (Bankr. E.D. Calif. Case No. 09-____) was
among the affiliates that filed. Barry E. Bressler, Esq., at
Schnader, Harrison, Segal & Lewis, LLP, and Natalie D. Ramsey,
Esq., at Montgomery McCracken Walker and Rhoads LLP, represent the
Debtors in their restructuring efforts. T.H. Properties estimated
assets between $100 million and $500 million, and debts between
$10 million and $50 million in its Chapter 11 petition. A
creditors' committee has been appointed in the Debtors' chapter 11
proceedings.
Affiliate Wynstone Development Group, LP (Bankr. E.D. Calif. Case
No. 10-17863) filed for Chapter 11 protection on Sept. 14,
2010. It estimated assets and debts of $1 million to $10 million
in its Chapter 11 petition.
THREE LOS AMIGOS: East Windmill Lane Center in Chapter 11
---------------------------------------------------------
Steve Green at the Las Vegas Sun reports that Three Los Amigos
LLC, owner of a center at 560 East Windmill Lane in Las Vegas,
near Bermuda Road, filed for Chapter 11 bankruptcy reorganization.
The Company disclosed in its filing liabilities of $4.35 million
against assets of $1.9 million. Most of the liabilities are for a
$4.2 million mortgage loan provided by Rialto Capital.
The Las Vegas Sun, citing court documents, says, after generating
income of about $54,000 in 2009, the center lost more than $28,000
last year, the filing says. The center is half owned by the
Medina Family Limited Partnership with three limited liability
companies owning the rest.
Three Los Amigos LLC owns two more retail developments in Southern
Nevada.
Three Los Amigos, LLC, filed a Chapter 11 petition (Bankr. D. Nev.
Case No. 11-14339 on March 26, 2011). Samuel A. Schwartz, Esq.,
at The Schwartz Law Firm, in Las Vegas, serves as counsel to the
Debtor. In its schedules, the Debtor disclosed $1,949,118 in
assets and $4,352,637 in liabilities.
TRANSWEST RESORT: Seeks Emergency Cash Use; Lender Wants Trustee
----------------------------------------------------------------
Chapter11cases.com reports that JPMCC 2007-C1 Grasslawn Lodging,
LLC -- the senior lender of Transwest Resort Properties, Inc. and
its affiliates -- filed a notice of two debtors' default under the
bankruptcy court's second interim order authorizing their use of
JPMCC's cash collateral and the resulting termination of those
debtors' right to use JPMCC's cash collateral. The two debtors,
Transwest Tucson, LLC and Transwest Hilton Head, LLC, are the
owners of two resorts -- the Westin La Paloma Resort and Country
Club in Tucson, Arizona and the Westin Hilton Head Resort and Spa
in Hilton Head, South Carolina.
Chapter11cases.com also reports that JPMCC asked that the Debtors
be held in contempt of court for violating the terms of the second
interim cash collateral order and that a chapter 11 trustee for
the debtors be appointed. According to Chapter11cases.com, JPMCC
argued that the Debtors had "intentionally, willfully and
knowingly" violated the cash collateral order by "unilaterally
reducing" a required March 23 adequate protection payment by
$600,000. The Debtors and the senior lender disagree, however, on
the validity of the Debtors' basis for deciding to make less than
the full adequate protection payment.
According to Chapter11cases.com, the Debtors on Monday asked the
Court to enter a new emergency interim cash collateral order
allowing them to use the lender's cash collateral for four weeks
pursuant to a proposed emergency budget. The Debtors admit that
they failed to make the full March 23 adequate protection payment,
but argue that the cash collateral dispute is the result of "the
belligerent and irresponsible conduct of creditor JPMCC 2007-C1
Grasslawn Lodging, LLC in response to the Debtors using prudent
and cautious business judgment in order to preserve the going
concern value of their estates." The Debtors said they were
willing to "work on responsible solutions that would allow for
additional adequate protection payments but that also protect the
Resorts' operations," but the lender "declined to engage in any
discussion regarding practical solutions to the anticipated cash
flow problems at La Paloma" unless and until the full adequate
protection payment was made. The Debtors told the Court that
JPMCC's decision to terminate their right to use cash collateral
put at risk "the payroll checks of over 400 hardworking Tucsonans
that are scheduled for this coming Friday April 1, 2011," the
Debtors' "already fragile" relationships with their vendors, and
the resorts' ability to operate and going concern value.
The Bankruptcy Court will hold a hearing on both JPMCC's and the
Debtors' motions today March 30, beginning at 9:30 a.m. local
time.
About Transwest Resort
Tucson, Arizona-based Transwest Resort Properties, Inc., filed for
Chapter 11 bankruptcy protection on November 17, 2010 (Bankr. D.
Ariz. Case No. 10-37134). Kasey C. Nye, Esq., and Elizabeth S.
Fella, Esq., at Quarles & Brady LLP, in Tucson, Ariz., assist the
Debtor in its restructuring effort. The Debtor estimated its
assets at up to $50,000 and debts at $10 million to $50 million.
Affiliates Transwest Hilton Head Property, L.L.C. (Bankr. D. Ariz.
Case No. 10-37170), Transwest Tucson Property, L.L.C. (Bankr. D.
Ariz. Case No. 10-37160), Transwest Tucson II, L.L.C. (Bankr. D.
Ariz. Case No. 10-37151), and Transwest Hilton Head II, L.L.C.
(Bankr. D. Ariz. Case No. 10-37145) filed separate Chapter 11
petitions on November 17, 2010. Transwest Hilton Head Property
estimated its assets at $10 million to $50 million and debts at
$100 million to $500 million. Transwest Tucson Property estimated
its assets at $50 million to $100 million and debts at $100
million to $500 million.
Senior lender JPMCC 2007-C1 Grass Lodging LLC is represented by:
Ethan B. Minkin, Esq.
Jaclyn D. Foutz, Esq.
Dean C. Waldt, Esq.
Jon Theodore Pearson, Esq.
BALLARD SPAHR LLP
1 E. Washington Street, Suite 2300
Phoenix, AZ 85004
Tel: 602-798-5451
E-mail: minkine@ballardspahr.com
foutzj@ballardspahr.com
waldtd@ballardspahr.com
pearsonj@ballardspahr.com
TRAVELCLICK INC: Moody's Withdraws 'B1' Rating on $50 Mil. Loan
---------------------------------------------------------------
Moody's Investors Service withdrew the B1 rating on TravelCLICK,
Inc.'s proposed $50 million senior secured delayed draw term loan.
The company closed on its refinancing transaction without the
delayed draw loan. All other ratings were affirmed and the
outlook remains stable.
On March 16, 2011, TravelCLICK completed a previously announced
acquisition and concurrently refinanced the debt in its capital
structure. Proceeds from a $160 million term loan, along
with cash on hand and rollover equity, were used to fund the
acquisition, refinance existing debt of $118 million, and finance
certain fees and expenses. A $20 million revolver was undrawn at
close. The proposed $50 million delayed draw term loan was
ultimately not funded and Moody's has withdrawn the rating on this
proposed instrument.
TravelCLICK's B1 CFR incorporates its relatively stable
consolidated performance during the recession, Moody's positive
outlook on the U.S. lodging industry, and an expectation that the
company's liquidity profile should remain adequate throughout the
near term. TravelCLICK continues to benefit from a diverse
product offering, low customer concentration and considerable
geographic diversity. Nonetheless, the recent transaction has
increased financial leverage by nearly one turn to approximately
4.5 times on a pro forma basis as of September 30, 2010. The B1
CFR continues to be constrained by the company's relatively modest
revenue size, reliance on strategic partners, the potential for
additional debt-financed acquisitions, and the vulnerability of
revenues to highly cyclical demand within the luxury and upper
upscale hotel industry.
The stable outlook reflects Moody's expectations that the
acquisition will be successfully integrated in a timely manner
and TravelCLICK will modestly grow revenue in the near-term as
end market demand continues to rebound, particularly within the
business traveler segment. Due to TravelCLICK's relatively
modest size, it is unlikely the CFR will be upgraded in the
near term. However, the ratings or outlook could be raised if
TravelCLICK significantly expands its revenue base and permanently
reduces indebtedness such that financial leverage and free cash
flow to debt can be sustained at about 3 times and above 10%,
respectively. The outlook or ratings could be pressured if there
are additional debt-funded acquisitions or other material changes
in TravelCLICK's capital structure or strategic alliances, or if
the company's profitability or liquidity profile deteriorates.
Specifically, financial leverage and interest coverage above 5
times and below 1.7 times, respectively, could lead to a
downgrade.
Moody's withdrew this rating:
-- $50 million proposed senior secured delayed draw term loan
due 2016, B1 (LGD3, 30%)
Moody's affirmed these ratings (and adjusted the LGD point
estimates, as noted):
-- $20 million senior secured revolver due 2016, B1 / LGD3 (to
33% from 30%)
-- $160 million senior secured term loan B due 2016, B1 / LGD3
(to 33% from 30%)
-- Corporate Family Rating, B1
-- Probability of Default Rating, B2
TravelCLICK Holdings, Inc., is a leading provider of marketing and
reservation services to independent and chain hotels worldwide.
Headquartered in New York City, pro forma 2010 revenues are
estimated at approximately $200 million.
TRIBUNE CO: Barclays $30-Mil. L/C Agreement Extended Until 2012
---------------------------------------------------------------
Bankruptcy Judge Kevin Carey authorized Tribune Co. and its units
to enter into Amendment No. 4 to a Letter of Credit Agreement,
amending the Postpetition Letter of Credit dated December 8, 2008,
among Barclays Bank plc, as administrative agent and issuing bank,
and a syndicate of other financial institutions, and the Debtors,
to extend the Termination Date of the Letter of Credit Agreement
to (a) April 10, 2012, (b) the effective date of a plan of
reorganization under the Chapter 11 cases, or (c) other date on
which the Commitments terminate.
The Debtors and Barclays, in a separate joint motion, sought and
obtained Court authority to file under seal the fee letter related
to the $30 million Amended Letter of Credit Facility.
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 Dec. 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 Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets
and $12,972,541,148 in total debts. Chadbourne & Parke LLP and
Landis Rath LLP serve as co-counsel to the Official Committee
of Unsecured Creditors. AlixPartners LLP is the Committee's
financial advisor. Landis Rath Moelis & Company serves as the
Committee's investment banker. Thomas G. Macauley, Esq., at
Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the
Committee in connection with the lawsuit filed against former
officers and shareholders for the 2007 LBO of Tribune.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRIBUNE CO: Proposes to Lift Stay to Pay D&O Defense Costs
----------------------------------------------------------
Tribune Co. and its affiliates ask the Bankruptcy Court to lift
the automatic stay to allow payment and advancement by their
primary and excess directors and officers liability insurance
providers of past and future defense costs, fees and expenses
incurred by individual insured persons relating to:
-- the adversary proceeding captioned The Official Committee
of Unsecured Creditors of Tribune Company, on behalf of
Tribune Company, et al., v. FitzSimons, et al., Adv. Proc.
No. 10-54010; and
-- individual lawsuits filed in the Debtors' cases to avoid
allegedly preferential transfers to certain named
defendants.
In connection with defending against the Fitzsimons Lawsuit and
the Preference Lawsuits, the Individual Defendants have incurred
and will continue to incur defense costs, fees, and expenses,
according to Bryan Krakauer, Esq., at Sidley Austin LLP, in
Chicago, Illinois. The Individual Defendants are seeking payment
and advancement of the defense costs, fees and expenses from
Federal Insurance Company and other insurance providers of the
Debtors.
The purpose of the motion is to remove any impediments to the
ability of the Insurance Providers to immediately commence payment
of the outstanding and ongoing defense costs, fees, and expenses
that the Individual Defendants have incurred and will incur in the
future in the FitzSimons and the Preference Lawsuits, Mr. Krakauer
tells the Court.
Mr. Krakauer clarifies that, through this motion, the Debtors are
not asking for a determination of any of the Insurance Providers'
obligation to pay any particular expense or claim of the
Individual Defendants.
Creditors' Committee Objects
The Official Committee of Unsecured Creditors complains that the
Debtors' request is open-ended, with no monetary limit or cap on
the amounts that might be paid. The relief sought is surprising
given that those lawsuits have been stayed by agreement of the
Committee and order of the Court, Howard Seife, Esq., at
Chadbourne & Parke LLP, in New York, points out.
The Committee also asks the Court to adjourn the hearing on the
motion to a later date for two reasons:
1. The Committee has not yet received information concerning
the Debtors' third party primary and excess liability in
insurance policies because of the failure of the Debtors'
carrier, Federal Insurance Company (Chubb) to respond to
the Committee's discovery requests.
2. Given the stay of the FitzSimons Lawsuit and the Preference
Lawsuits, it is unclear what defense costs, fees and
expenses the named D&O Defendants reasonably could have
incurred to date or will incur in the future.
Debtors, et al., Respond to Committee
The Debtors argue that the Committee is attempting to delay and
restrict the Insured Persons' efforts to secure defense coverage
from the D&O insurers. The Debtors assert that payment of the
D&O's fees and expenses is critical to the ongoing reorganization
process and ultimately to any efforts to settle the Committee's
claims that the defense counsel for the Insured Persons and their
D&O insurers have an understanding of the Claims and can evaluate
them on the merits.
Certain directors and officers, in a separate filing, complain
that the Committee's objection is without merit. Contrary to the
Committee's position, the law is clear -- the proceeds of the D&O
policies are not property of the estate and should immediately be
made available to the D&Os so that they can properly prepare to
defend themselves against the Committee's claims, John R.
McCambridge, Esq., at Grippo & Elden LLC, in Chicago, Illinois,
asserts on behalf of the directors and officers.
Daniel G. Kazan, Crane Kenney, John Birmingham, Tom E. Ehlmann,
Mark W. Hianik, and Peter A. Knapp join in the directors' and
officers' objection.
Samuel Zell also separately asserts that the Committee's position
ignores the fact that he has already appropriately incurred
substantial reasonable expense in defending the Committee's
purported claims against him -- claims that he says should never
have been asserted in the first place, particularly in light of
the Examiner's determination that they have no plausible basis.
The Employee Compensation Defendants Group joins in the Debtors'
response to the Committee's objection.
* * *
The Court gave permission to the Debtors to pay the defense costs
for its directors and officers involved in litigation with the
Committee, Steven Church at Bloomberg News reported on March 22.
Judge Carey overruled an objection by the Creditors' Committee,
the report said.
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 Dec. 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 Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets
and $12,972,541,148 in total debts. Chadbourne & Parke LLP and
Landis Rath LLP serve as co-counsel to the Official Committee
of Unsecured Creditors. AlixPartners LLP is the Committee's
financial advisor. Landis Rath Moelis & Company serves as the
Committee's investment banker. Thomas G. Macauley, Esq., at
Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the
Committee in connection with the lawsuit filed against former
officers and shareholders for the 2007 LBO of Tribune.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRIBUNE CO: Time to Remove Actions Extended Until June 30
---------------------------------------------------------
The Bankruptcy Court has extended to June 30, 2011, the time for
Tribune Co. and its affiliates to file notices of removal of
claims and causes of action relating to their Chapter 11
proceedings.
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 Dec. 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 Dec. 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)
TRICO MARINE: Unit Extends Solicitation for Exchange, Prepack
-------------------------------------------------------------
Trico Shipping AS, a subsidiary of Trico Marine Services, Inc.,
announced on March 29, 2011, that it has extended the expiration
time of its out-of-court exchange offer to the holders of its 11
7/8% senior secured notes due 2014, the solicitation of consents
to the governing indenture, and the solicitation of acceptances
from its Noteholders and other creditors of a prepackaged plan of
reorganization, to 12:00 midnight Eastern Time on the end of
March 30, 2011. The Exchange Offer, Consent Solicitation and
solicitation of acceptances of the Prepackaged Plan are otherwise
unchanged.
The Exchange Offer, Consent Solicitation and solicitation of
acceptances of the Prepackaged Plan were originally scheduled to
expire at 12:00 midnight Eastern Time on the end of March 28,
2011. At 12:00 midnight Eastern Time on the end of March 28,
2011, $272,578,000 principal amount of Notes representing
approximately 68.14% of the outstanding principal amounts of the
Notes had been validly tendered and not withdrawn in the Exchange
Offer. The Company believes a number of Noteholders intend to
tender additional Notes, and the Company is in discussions with
other creditors regarding the restructuring.
The Exchange Offer is being made, and the New Common Stock is
being offered and issued within the United States only to
"qualified institutional buyers" as defined in Rule 144A under the
Securities Act of 1933, as amended or institutional "accredited
investors," as defined in Rule 501 under the Securities Act, and
outside the United States to non-U.S. investors. The New Common
Stock to be offered has not been registered under the Securities
Act and may not be offered or sold in the United States absent
registration or an applicable exemption from registration
requirements.
About Trico Marine
Headquartered in Texas, Trico Marine Services, Inc. --
http://www.tricomarine.com/-- provides subsea services, subsea
trenching and protection services, and towing and supply vessels.
Trico filed for Chapter 11 protection on August 25, 2010 (Bankr.
D. Del. Case No. 10-12653). John E. Mitchell, Esq., Angela B.
Degeyter, Esq., and Harry A. Perrin, Esq., at Vinson & Elkins LLP,
serve as the Debtor's bankruptcy counsel. The Debtor disclosed
US$30,562,681 in assets and US$353,606,467 in liabilities as of
the Petition Date.
Affiliates Trico Marine Assets, Inc. (Bankr. D. Del. Case No.
10-12648), Trico Marine Operators, Inc. (Case No. 10-12649), Trico
Marine International, Inc. (Case No. 10-12650), Trico Marine
Cayman, L.P. (Case No. 10-12651), and Trico Holdco, LLC (Case No.
10-12652) filed separate Chapter 11 petitions.
Cahill Gordon & Reindell LLP is the Debtors' special counsel.
Alix Partners Services, LLC, is the Debtors' chief restructuring
officer. Epiq Bankruptcy Solutions is the Debtors' claims and
notice agent. Postlethwaite & Netterville serves as the Debtors'
accountant and Ernst & Young LLP serves as tax advisors.
Pricewaterhousecoopers LLC provides the independent accountants
and tax advisors for the Debtors.
Aside from the Cayman Islands holding company, Trico's foreign
subsidiaries were not included in the filing and will not be
subject to the requirements of the U.S. Bankruptcy Code.
The Official Committee of Unsecured Creditors tapped Laura Davis
Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang,
Ziehl & Jones LLP, in Wilmington, Delaware, and Andrew K. Glenn,
Esq., David J. Mark, Esq., and Daniel A. Fliman, Esq., at
Kasowitz, Benson, Torres & Friedman LLP, in New York, as counsel.
TRICO MARINE: Accepts Offer for Suwanee River Assets
----------------------------------------------------
BankruptcyData.com reports that Trico Marine Services filed with
the U.S. Bankruptcy Court a notice that it has accepted an offer
from Odekole International Services to purchase its Suwanee River
assets for $700,000.
About Trico Marine
Headquartered in Texas, Trico Marine Services, Inc. --
http://www.tricomarine.com/-- provides subsea services, subsea
trenching and protection services, and towing and supply vessels.
Trico filed for Chapter 11 protection on August 25, 2010 (Bankr.
D. Del. Case No. 10-12653). John E. Mitchell, Esq., Angela B.
Degeyter, Esq., and Harry A. Perrin, Esq., at Vinson & Elkins LLP,
serve as the Debtor's bankruptcy counsel. The Debtor disclosed
US$30,562,681 in assets and US$353,606,467 in liabilities as of
the Petition Date.
Affiliates Trico Marine Assets, Inc. (Bankr. D. Del. Case No.
10-12648), Trico Marine Operators, Inc. (Case No. 10-12649), Trico
Marine International, Inc. (Case No. 10-12650), Trico Marine
Cayman, L.P. (Case No. 10-12651), and Trico Holdco, LLC (Case No.
10-12652) filed separate Chapter 11 petitions.
Cahill Gordon & Reindell LLP is the Debtors' special counsel.
Alix Partners Services, LLC, is the Debtors' chief restructuring
officer. Epiq Bankruptcy Solutions is the Debtors' claims and
notice agent. Postlethwaite & Netterville serves as the Debtors'
accountant and Ernst & Young LLP serves as tax advisors.
Pricewaterhousecoopers LLC provides the independent accountants
and tax advisors for the Debtors.
Aside from the Cayman Islands holding company, Trico's foreign
subsidiaries were not included in the filing and will not be
subject to the requirements of the U.S. Bankruptcy Code.
The Official Committee of Unsecured Creditors tapped Laura Davis
Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang,
Ziehl & Jones LLP, in Wilmington, Delaware, and Andrew K. Glenn,
Esq., David J. Mark, Esq., and Daniel A. Fliman, Esq., at
Kasowitz, Benson, Torres & Friedman LLP, in New York, as counsel.
TRIPLE POINT: Moody's Assigns 'B2' Corporate Family Rating
----------------------------------------------------------
Moody's Investors Service assigned a B2 corporate family rating to
first time issuer Triple Point Technology, Inc., as well as B2
ratings to Triple Point's $10 million revolver and $125 million
senior secured debt facilities. The debt will be used to finance
a $105 million (potentially up to $125 million) distribution to
its equity owners. The ratings outlook is stable.
Ratings Rationale
The B2 ratings reflects the moderate to high leverage pro forma
for the equity distribution, high reliance on service revenues
relative to other enterprise software providers as well the small
size of the company. The ratings also recognize the company's
strong niche position in the fast growing energy trading and risk
management software industry and the broader commodity management
software industry as well as the strong cash generating
capabilities of the company relative to its debt. Though the pro
forma leverage of 4.2x is less than other private equity owned
enterprise software companies in the B2 category, the size
(estimated 2010 revenues of $109 million) is small compared to
other B2 rated enterprise software companies.
The ratings also consider the company's shareholder friendly
financial policies as evidenced by the equity distribution (and
potential for additional distributions) as well as the acquisitive
nature of the company. Moody's expect the company will largely be
able to fund its acquisitions with internally generated cash but
there is a reasonable potential for debt financed acquisitions.
Triple Point has built a strong position providing a broad suite
of ERTM software particularly for companies that take physical
possession of energy products (including oil, gas etc.). In
recent years the company has also been developing a commodity
management business providing similar types of software products
for companies that use commodities in the production of their
goods (as opposed to firms that trade in commodities or financial
instruments tied to commodities). The commodity management
software industry has attracted recognition as commodity pricing
has become more volatile and manufacturers, agricultural companies
and food producers find it critical to manage, track and assess
their exposure to a given commodity.
The stable outlook reflects Moody's expectation that the company
will continue to grow and generate strong levels of free cash flow
relative to debt levels. The outlook also accommodates an
additional $20 million equity distribution as well as a continued
pace of acquisitions which at times will exceed free cash flow
production. The ratings could face downward pressure if the
company were to make a large debt financed acquisition or if
leverage were to exceed 5.5x for an extended period. Given the
small scale of the company and the shareholder friendly financial
policies, an upgrade is unlikely in the near term.
These ratings were assigned:
* Corporate family rating: B2
* Probability of default: B3
* Sr. Secured Revolver due 2016, B2 (LGD3 -- 34%)
* Sr. Secured First Lien Term Loan due 2016, B2 (LGD3 -- 34%)
Ratings on the proposed debt instruments were determined in
conjunction with Moody's Loss Given Default Methodology. The
senior secured debt facilities are rated the same as the corporate
family rating since they represent the preponderance of the
capital structure.
Triple Point, a provider of commodity management and energy
trading and risk management software is headquartered in Westport,
CT. The company is owned by private equity firm ABRY Partners and
management.
TUPPERWARE BRANDS: Moody's Withdraws 'Ba1' Corporate Family Rating
------------------------------------------------------------------
Moody's Investors Service upgraded Tupperware Brands Corporation's
ratings to investment grade including the company's senior secured
bank credit facilities to Baa2 from Baa3. Moody's withdrew the
company's Ba1 Corporate Family Rating, Ba2 probability of default
rating, and SGL-2 speculative grade liquidity rating consistent
with Moody's ratings practice for investment grade issuers. The
rating outlook is stable. This rating action concludes a review
for possible upgrade that was initiated on February 1, 2011.
These ratings of Tupperware were upgraded:
-- $200 million senior secured revolving credit facility to Baa2
from Baa3; and
-- $405 million senior secured term loan facility to Baa2 from
Baa3.
These ratings of Tupperware were withdrawn (including LGD
assessments):
-- Corporate Family rating of Ba1;
-- Probability of Default rating of Ba2; and
-- Speculative Grade Liquidity rating of SGL-2.
Ratings Rationale
The upgrade of Tupperware's ratings to investment grade reflects
its stable operating performance and significant balance sheet
deleveraging since its 2005 acquisition of Sara Lee's direct
selling business driven by its strong track record of product
innovation and expansion into high potential emerging markets.
The Baa2 ratings of bank facilities reflect the secured pledge of
substantially all of the tangible and intangible assets and would
have been one notch lower without this secured pledge. Tupperware
has no outstanding unsecured debt.
"Tupperware's favorable competitive position in attractive direct
selling emerging markets is a key driver of its above average
organic growth and should continue to drive strong profitability,"
says Moody's Vice President and Senior Credit Officer Janice
Hofferber, CFA. "In addition, Tupperware's conservative debt
management and financial policies, including a balanced share
repurchase program and dividend payout, is consistent with its
investment grade rating," adds Ms. Hofferber.
Accordingly, Moody's expect Tupperware's credit metrics to remain
well-positioned with low leverage (1.7 times at Dec. 31, 2010), a
large fiscal year-end cash balance, and anticipated good free cash
flow in 2011 of at least $150 million. Moody's expect future
share repurchases will be dependent upon the company's ability to
meet its cash flow targets during the year and dividend policies
will not meaningfully deviate from demonstrated earnings growth.
The ratings also take into consideration the company's moderate
scale, relatively narrow product diversification and share in the
broader consumer product, cosmetics and personal care sectors,
ongoing growth challenges in mature direct selling markets (Europe
and the U.S.), and its exposure to volatile raw material costs and
currency exchange rates,.
The stable outlook reflects Moody's expectation that Tupperware's
operating performance will continue to achieve above-average
organic growth relative to other consumer products companies,
consistently generate free cash flow and maintain strong,
investment grade credit metrics.
Tupperware's ratings could be upgraded if the company can maintain
its strong operating performance in an environment of large
competitors and volatile macro-economic conditions especially in
certain emerging markets while sustaining strong credit metrics,
including EBITA margins approaching 16% and/or retained cash flow
to net debt ratio above 30%. Tupperware financial policies
regarding share repurchases and debt-financed acquisitions will
also need to remain conservative.
Tupperware's ratings could be downgraded if global macro-economic
or competitive conditions resulted in lower profits and cash
flows, or if the company adopted more aggressive financial
policies such that its debt to EBITDA ratio was sustained above
3.0 times, EBITA margins were sustained below 12% or its interest
coverage ratio was sustained below 4.0 times.
The last rating action for Tupperware was on September 12, 2008,
when Moody's upgraded the company's Corporate Family rating to Ba1
from Ba2.
Headquartered in Orlando, Florida, Tupperware Brands Corporation
(NYSE: TUP) is a direct seller of premium food storage,
preparation, serving items and cosmetics and personal care
products with sales in almost 100 countries worldwide.
Tupperware's distribution system for its storage business includes
1,800 distributors, 58,700 managers and 1.2 million dealers
worldwide. In addition, the company's beauty business commands a
direct sales force over 1.1 million.
For the fiscal year ending December 25, 2010, sales were
approximately $2.3 billion.
UNIFI INC: Drops Ernst & Young, Taps KPMG as Auditor
----------------------------------------------------
Unifi, Inc., dismissed Ernst & Young LLP as the Company's
independent registered public accounting firm. The decision to
change accountants was approved by the audit committee of the
Company's board of directors.
The audit reports of Ernst & Young on the consolidated financial
statements of the Company as of and for the years June 27, 2010
and June 28, 2009, did not contain any adverse opinion or
disclaimer of opinion, nor were they qualified or modified as to
uncertainty, audit scope, or accounting principles.
During the Company's two fiscal years ended June 27, 2010 and
June 28, 2009, and during the subsequent interim period through
March 22, 2011, there were no (1) disagreements with Ernst & Young
on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedures, which
disagreements if not resolved to the satisfaction of Ernst & Young
would have caused Ernst & Young to make reference in connection
with their report to the subject matter of the disagreement, or
(2) "reportable events" as defined in Item 304(a)(1)(v) of
Regulation S-K.
On March 26, 2011, the Company engaged KPMG LLP as the Company's
new independent registered public accounting firm. The decision
to engage KPMG was approved by the audit committee of the
Company's board of directors. During the Company's two fiscal
years ended June 27, 2010 and June 28, 2009, and during the
subsequent interim period through March 26, 2011, neither the
Company's nor anyone acting on the Company's behalf consulted with
KPMG regarding any of the matters specified in Item 304(a)(2) of
Regulation S-K.
The change in Independent Registered Public Accounting Firm did
not result from any dissatisfaction with the quality of
professional services rendered by Ernst & Young.
About Unifi
Unifi, Inc. (NYSE: UFI) -- http://www.unifi.com/and
http://www.repreve.com/-- is a diversified producer and processor
of multi-filament polyester and nylon textured yarns and related
raw materials.
The Company's balance sheet at Dec. 26, 2010, showed
$514.80 million in total assets, $223.95 million in total
liabilities, and $290.84 million in stockholders' equity.
In December 2010, Standard & Poor's Ratings Services said that it
raised its corporate credit and senior secured debt ratings on
Greensboro, N.C.-based Unifi Inc. to 'B' from 'B-'. The ratings
upgrade and stable outlook reflect S&P's belief that Unifi will
continue to improve its operating performance and sustain its
recently strengthened credit measures as it end-use markets
continue to recover.
USEC INC: Robert Namen Disposes of 28,855 Shares of Common Stock
----------------------------------------------------------------
In a Form 4 filing with the U.S. Securities and Exchange
Commission, Robert Van Namen, SVP, Uranium Enrichment, at USEC
Inc., disclosed that he disposed of 28,855 shares of common stock
of the Company on March 28, 2011. At the end of the transaction,
Mr. Namen beneficially owned 316,839 common shares.
About USEC Inc.
Headquartered in Bethesda, Maryland, USEC Inc. (NYSE: USU) --
http://www.usec.com/-- supplies enriched uranium fuel for
commercial nuclear power plants.
The Company's balance sheet at Dec. 31, 2010 showed $3.84 billion
in total assets, $2.53 billion in total liabilities, and
$1.31 billion in stockholders' equity.
* * *
USEC Inc. carries 'Caa1' corporate and probability of default
ratings, with "developing" outlook, from Moody's, and 'CCC+' long
term foreign issuer credit rating and 'CCC-' long term local
issuer credit rating, with outlook "developing", from Standard &
Poor's.
In May 2010, S&P said that its rating and outlook on USEC Inc. are
not affected by the announcement that Toshiba Corp. and Babcock &
Wilcox Investment Co., an affiliate of The Babcock & Wilcox Co.,
have signed a definitive investment agreement for $200 million
with USEC.
USI HOLDINGS: S&P Withdraws 'B-' Rating on $98.8 Mil. Senior Loan
-----------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'B-' rating on USI
Holdings Corp.'s planned $98.8 million incremental senior secured
term loan D due in May 2014. The 'B-' counterparty credit rating
and stable outlook on USI, as well as all existing issue and
recovery ratings, remain unchanged.
The planned term loan D was a repricing of USI's existing
incremental senior secured term loan C, which the company expected
to retire once the planned transaction closed. Accordingly, the
incremental term loan C will now remain in place. The company
cancelled the transaction due to market conditions.
Ratings List
USI Holdings Corp.
Corporate Credit Rating B-/Stable/--
Ratings Withdrawn
USI Holdings Corp.
To From
-- ----
$98.8M Term Loan D Due 2014 NR B-
Recovery Rating NR 3
UTECH PROPERTIES: Case Summary & 3 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Utech Properties, LLC
210 W. University, #7
Rochester, MI 48307
Bankruptcy Case No.: 11-48219
Chapter 11 Petition Date: March 25, 2011
Court: United States Bankruptcy Court
Eastern District of Michigan (Detroit)
Judge: Marci B. McIvor
Debtor's Counsel: Michael I. Zousmer, Esq.
NATHAN, NEUMAN, NATHAN & ZOUSMER, P.C.
29100 Northwestern Hwy., Suite 260
Southfield, MI 48034
Tel: (248) 351-0099
E-mail: mzousmer@nathanzousmer.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 three largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/mieb11-48219.pdf
The petition was signed by Duane Utech, owner.
WALLACE THEATER: S&P Downgrades Corporate Credit Rating to 'CCC'
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Portland, Ore.-based Wallace Theater Holdings Inc. to
'CCC' from 'CCC+'. The rating outlook is negative. S&P rates
Wallace on a consolidated basis with subsidiary Hollywood Theaters
Inc.
S&P also lowered its issue-level rating on Wallace Theater's
senior secured notes due 2013 to 'CCC' (at the same level as the
'CCC' corporate credit rating on the company). The recovery
rating on this debt remains unchanged at '3', indicating S&P's
expectation of meaningful (50%-70%) recovery for noteholders in
the event of a payment default.
"The downgrade reflects Wallace Theater's narrowing liquidity in
light of its fractional EBITDA coverage of interest, worse-than-
anticipated recent box office performance, low cash balances, and
limited credit facility availability," said Standard & Poor's
credit analyst Jeanne Shoesmith.
Additionally, S&P expects the company to face tough comparisons in
the first quarter of 2011 because of the strong performance of
Avatar and other key films in last year's comparable period.
Lower cash flow, together with thin liquidity resources, could
strain Wallace's ability to meet interest payments due in June, in
S&P's opinion.
S&P's 'CCC' rating reflects Wallace's highly leveraged financial
risk profile, characterized by its expectation that the company's
leverage will remain high, EBITDA coverage of interest will
continue to be thin, and discretionary cash flow generation and
liquidity will be weak. S&P considers Wallace's business risk to
be vulnerable because of its participation in the mature and
highly competitive movie exhibition industry and its exposure to
the fluctuating popularity of movies. S&P also believes there is
meaningful risk that proliferation of competing entertainment
alternatives and shorter periods between theatrical release and
home video and video-on-demand release could pressure U.S. movie
theater attendance.
Wallace operates in small-to-midsize markets, primarily in 15
states in the South Central, Midwestern, and Western U.S. It has
upgraded its theater circuit over the past several years by
closing poorly performing theaters and opening several new ones,
which should result in improved profitability. Wallace's venues
are relatively modern, and a large proportion of its screens have
stadium seating, which increases their appeal to consumers. The
proportion of its theaters with unfettered access to all films in
release compares favorably with leading movie exhibitors. The
company's EBITDA margin, at around 15%, is toward the middle of
its peer group's. The limited appeal of Wallace's markets to
competitors and the industry's currently low level of new theater
development provide a modest degree of protection from competition
entering Wallace's markets.
WASHINGTON MUTUAL: Files Second Chapter 11 Plan Modifications
-------------------------------------------------------------
BankruptcyData.com reports that Washington Mutual Inc. filed with
the U.S. Bankruptcy Court Second Modifications of its Modified
Sixth Amended Joint Plan of Reorganization. The modifications
were made to exhibits A through E of the Plan.
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.
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 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.
Washington Mutual has filed with the U.S. Bankruptcy Court for the
District of Delaware a Modified Sixth Amended Joint Plan and a
related Supplemental Disclosure Statement. 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 Disclosure Statement is set for March 21.
WILLIAM HAWKINS: Bankruptcy Filing to Erase $20MM Tax Bill Denied
-----------------------------------------------------------------
Patrick Hoge at the San Francisco Business Times reports that U.S.
District Judge Jeffrey White has rejected the attempt of William
Hawkins to use personal bankruptcy to wipe out $20 million of
federal and California state tax obligations that arose from
abusive tax shelters he used to protect profits from Electronic
Arts Inc.
Forbes reporter William P. Barrett said Judge White upheld an
earlier bankruptcy-court ruling, saying Mr. Hawkins knew he was
broke after the U.S. Internal Revenue Service disallowed his tax
shelters but "continued to spend money extravagantly with
knowledge of his tax liabilities" to the IRS and the California
Franchise Tax Board.
"Hawkins planned to defeat his taxes via bankruptcy and continue
living the lifestyle to which he had grown accustomed," the report
quotes judge White as saying in a 16-page ruling. Cited evidence
included buying a $70,000 car -- the fourth vehicle in a two-
driver household.
Based in San Mateo, California, William M. Hawkins III, and Lisa
Warnes-Hawkins filed for Chapter 11 bankruptcy protection (Bankr.
N.D. Calif. Case No. 06-30815) on Sept. 8, 2006. Judge Thomas E.
Carlson presides over the case. Heinz Binder, Esq., at Binder &
Malter, LLP, represents the Debtors. The Debtors estimated assets
between $1 million and $10 million, and debts of $10 million and
$50 million.
WJO INC: Expedited Motion to Use Additional Cash Collateral Denied
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Pennsylvania
has denied an expedited motion by WJO, Inc. to use additional cash
collateral.
Bristol, Pennsylvania-based WJO, Inc., operates six family
practices located in Newtown, Bristol, Bensalem, Bustleton, South
Philadelphia, and Bethlehem, Pennsylvania and consists of Board
Certified Osteopathic Physicians specializing in Family Medicine.
WJO filed for Chapter 11 bankruptcy protection (Bankr. E.D. Pa.
Case No. 10-19894) on Nov. 15, 2010. Holly Elizabeth Smith,
Esq., and Thomas Daniel Bielli, Esq., at Ciardi Ciardi & Astin,
P.C., assist the Debtor in its restructuring effort. The Debtor
estimated its assets and debts at $10 million to $50 million.
WOLVERINE TUBE: Seeks to Hire SSG Capital as Investment Banker
--------------------------------------------------------------
BankruptcyData.com reports that Wolverine Tube filed with the U.S.
Bankruptcy Court a motion to retain SSG Capital Advisors (Contact:
J. Scott Victor) as investment banker and responsible party for
sale process for an initial fee of $40,000, a monthly fee of
$40,000 and a restructuring advisor fee of $100,000 and Deloitte
Financial Advisory Services (Contact: Justin Silber) as financial
advisor for the following hourly rates: partner, principal,
director at $500, senior manager at 420, manager at 360, senior
associate at 280, associate at 220.
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.
W.R. GRACE: Proposes 2011 Long-Term Incentive Plan
--------------------------------------------------
W.R. Grace and its debtor affiliates seek authority from Judge
Judith Fitzgerald of the U.S. Bankruptcy Court for the District of
Delaware to implement the W.R. Grace & Co. 2011 Long-Term
Incentive Plan and to effectuate the incentive based grants of
options to purchase Grace common stock made to certain eligible
employees of the Debtors.
Since the Petition Date, the Debtors have sought and obtained
Court authority to make payments to their employees under their
retention and incentive programs.
According to Adam Paul, Esq., at Kirkland & Ellis LLP, in Chicago,
Illinois, the basic design of the 2011 LTIP is similar to the
other LTIPs approved by the Court. However, the 2011 LTIP will
include only a stock component rather than stock and cash
components. The aggregate targeted award value of the 2011 LTIP
will be approximately $19 million, including payment to the
Debtors' chief executive officer.
Under the 2011 LTIP, the total aggregate targeted award will be
distributed to eligible employees in the form of options covering
Grace stock. No targeted cash payout opportunities will be
distributed under the 2011 LTIP.
The decision to grant only options on Grace Stock under the 2011
LTIP, and not include any cash incentives, is based on the
Debtors' continuing strategy to increasingly align the interest of
its management and other eligible employees with the interest of
its shareholders, Mr. Paul tells the Court.
The "strike price" of the stock options awarded under the 2011
LTIP will be the price of Grace Stock as of the award date. The
value of an option on a share of Grace Stock granted under the
2011 LTIP will be calculated by dividing the price of a share of
Grace Stock on the award date by the applicable Black Sholes
factor.
Mr. Paul says the Debtors anticipate awarding options to Eligible
Employees under the 2011 LTIP covering roughly 1.77 million shares
of Grace Stock based on a total aggregate targeted value of $19
million, and a price per share of $37.55, a recent price for a
share of Grace Stock. The number of shares covered by the awards
could range between approximately 2.08 million and 1.58 million,
depending on the price of a share of Grace Stock on the award
date. One third of the awarded stock options would vest in 2012,
one-third would vest in 2013, and the remaining one-third would
vest in 2014; each on the anniversaries of the award date.
The stock options would generally be exercisable for a period of
five years after grant, according to Mr. Paul.
Permitting the Debtors to continue their long-term incentive
compensation strategy by implementing the 2011 LTIP will
accomplish the sound business purpose of maximizing the value of
their estates and furthering their efforts to successfully
complete their reorganization and have the Joint Plan of
Reorganization become effective, by promoting the motivation and
retention of Eligible Employees who are necessary to achieve the
completion of their Chapter 11 cases in a prompt and efficient
manner, Mr. Paul tells the Court.
About W.R. Grace & Co.
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The Company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and
Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones,
LLP, represent the Debtors in their restructuring effort. The
Debtors hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock
& Stroock & Lavan, LLP, and Duane Morris, LLP, represent the
Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace and its debtor affiliates, with the support of the
Official Committee of Asbestos Personal Injury Claimants, the
Asbestos PI Future Claimants' Representative and the Official
Committee of Equity Security Holders, have submitted a proposed
Chapter 11 plan of reorganization. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. The Plan confirmation hearing
wrapped up on Jan. 25.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
W.R. GRACE: Various Parties Appeal Plan Confirmation Order
----------------------------------------------------------
Several parties-in-interest filed notices of appeal from Judge
Fitzgerald's January 31, 2011 order confirming the Debtors' Plan
of Reorganization:
* Anderson Memorial Hospital
* AXA Belgium
* BNSF Railway Company
* Garlock Sealing Technologies LLC
* Government Employees Insurance Company, Republic Insurance
Company, n/k/a Starr Indemnity & Liability Company
* Her Majesty the Queen in Right of Canada
* Libby Claimants
* Maryland Casualty Company
* State of Montana
As reported in the Feb. 3, 2011 edition of the Troubled Company
Reporter, Judge Judith Fitzgerald of the U.S. Bankruptcy Court for
the District of Delaware approved on Jan. 31, 2011, the Joint
Plan of Reorganization proposed by W.R. Grace & Co. and its debtor
affiliates, the Official Committee of Equity Security Holders,
the Official Committee of Asbestos-related Personal Injury
Claimants, and the Future Claims Representative.
Grace's Joint Plan will next be considered for confirmation by
the United States District Court for the District of Delaware, a
necessary step before Grace may exit Chapter 11.
Judge Fitzgerald confirmed the Plan after resolving all
outstanding objections and finding that the Plan satisfies all
applicable sections of the Bankruptcy Code, including Section
524(g). Judge Fitzgerald held that claimants in Classes 6, 7
(including both sub-classes 7A and 7B), and 8 have voted to
accept the Plan in the requisite numbers and amounts required by
Sections 524(g), 1126, and 1129.
The Joint Plan establishes two asbestos trusts to compensate
personal injury claimants and property owners. Funds for the
trusts will come from a variety of sources including cash,
warrants to purchase Grace common stock, deferred payment
obligations, insurance proceeds and payments from successor
companies. The trusts' assets and operations are designed to
cover all current and future asbestos claims, according to the
Debtors.
The Debtors filed for bankruptcy in April 2001 because of
increasing asbestos personal injury claims. They have submitted
several plans of reorganizations co-proposed by different
parties-in-interest since the Petition Date. The most recent
plan was filed in November 2008 and incorporated settlements of
the Debtors' present and future asbestos-related PI Claims.
In April 2008, the Debtors reached an agreement settling
all of their present and future asbestos-related PI claims
for $1.8 billion. Prior to the agreement, the Debtors were
involved in a series of trials to estimate their asbestos
personal injury claims. Grace's experts estimated that the
company's asbestos personal injury liabilities are between
$385 million and $1.314 billion. The PI Committee, representing
more than 100,000 asbestos claimants, said Grace's liabilities
range from $4.7 billion to $6.2 billion.
Pursuant to the April 2008 settlement, the asbestos trusts will
be funded by:
-- Cash in the amount of $250,000,000;
-- Warrants to acquire 10,000,000 shares of Grace common stock
at an exercise price of $17.00 per share, expiring one year
from the effective date of a plan of reorganization;
-- Rights to proceeds under Grace's asbestos-related insurance
coverage;
-- The value of cash and stock under the litigation settlement
agreements with Sealed Air Corporation and Fresenius
Medical Care Holdings, Inc.; and
-- Deferred payments at $110,000,000 per year for five years
beginning in 2019, and $100,000,000 per year for 10 years
beginning in 2024; the deferred payments would be
obligations of Grace backed by 50.1% of Grace's common
stock to meet the requirements of Section 524(g).
The Sealed Air settlement payment consists of (i) $512,500,000 in
cash, plus interest accrued from Dec. 21, 2005 until the Plan's
effective date, at a rate of 5.5% per annum compounded annually;
and (ii) 18,000,000 shares of Sealed Air common stock. As of
Jan. 31, 2011, Eastern Time, Sealed Air stocks are priced at
$26.69 per share, placing a value of about $480,420,000 on the
settlement pact.
In a company statement, Sealed Air said it will review the
Bankruptcy Court's confirmation order to ensure that the Debtors
implement the Plan in a manner fully consistent with a settlement
agreement signed on Nov. 20, 2003. Sealed Air added that it
stands ready to contribute its payment directly to one or more of
the trusts to be created under Section 524(g) once the provisions
of the settlement agreement are fully met. Sealed Air noted that
as of Dec. 31, 2010, its total cash payment would have been
approximately $788 million, which reflects the principal
settlement amount of $512.5 million and $275.5 million of accrued
interest, which accrues at 5.5% per annum and is compounded
annually. Sealed Air's payment to the Debtors would resolve all
current and future asbestos-related, fraudulent transfer and
successor claims the Debtors have against Sealed Air as a result
of the Cryovac transaction with W. R. Grace in 1998.
The Debtors will also fund a trust created for Canadian Zonolite
Attic Insulation Claims. In a recently amended settlement, the
Debtors' contribution to the Fund is increased from C$6,500,000
to C$8,595,632 in the event the U.S. Confirmation Order is
entered by the U.S. Court on or before Jan. 31, 2011; and
C$9,095,632 in the event that the U.S. Confirmation Order is
entered by the U.S. Court after Jan. 31, 2011, but on or
before July 31, 2011.
Non-Core Matters
W.R. Grace & Co., the Official Committee of Asbestos Personal
Injury Claimants, the Official Committee of Equity Security
Holders, and the Asbestos PI Future Claimants' Representative, in
response to the objections to the confirmation of the First
Amended Joint Plan of Reorganization, assert that all objections
fail in their entirety because Rule 9033 of the Federal Rules of
Bankruptcy Procedure limits objections to non-core matters and all
the findings of fact and conclusions of law contained in Judge
Fitzgerald's Jan. 31 Confirmation Order relate to core matters
concerning plan confirmation.
The Plan Proponents reserve the right to respond to the 9033
Objections and the arguments and authorities cited in support of
those objections in their appellate briefing that will be
submitted to the District Court.
Maryland Casualty Company, in a separate filing, said it opposes
the objections to the Bankruptcy Court's Jan. 31 Order to the
extent the objections seek any relief inconsistent with the
insurance company's position in its objection to the confirmation
of the Debtors' Plan of Reorganization.
About W.R. Grace & Co.
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The Company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and
Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones,
LLP, represent the Debtors in their restructuring effort. The
Debtors hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock
& Stroock & Lavan, LLP, and Duane Morris, LLP, represent the
Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace and its debtor affiliates, with the support of the
Official Committee of Asbestos Personal Injury Claimants, the
Asbestos PI Future Claimants' Representative and the Official
Committee of Equity Security Holders, have submitted a proposed
Chapter 11 plan of reorganization. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. The Plan confirmation hearing
wrapped up on Jan. 25.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
W.R. GRACE: To Sell Equity Stake in Ceratech for $4.5-Mil.
----------------------------------------------------------
W.R. Grace & Co. notified the Court that they propose to enter
into an agreement with CeraTech, Inc., a Delaware corporation that
has developed certain technology applicable to the construction
products industry. Among other things, the agreement provides:
(i) for options of Debtor W. R. Grace & Co.-Conn. to sell to
the Technology Company, and of the Technology Company to
buy from Grace, 112,500 shares of the convertible
preferred stock of the Technology Company owned by Grace,
at a purchase price of $40 per share for a maximum
aggregate purchase price of $4.5 million; and
(ii) in consideration of a payment to Grace of $250,000, the
termination of an agreement between Grace and the
Technology Company under which Grace has certain
exclusive distribution and other rights for products
utilizing the intellectual property of the Technology
Company.
The assets to be sold consist of the option to buy Grace's
ownership rights in up to 112,500 shares of the Class C
Convertible Redeemable Preferred Stock of the Technology Company
and Grace's exclusive distribution, license and other rights
respecting purchase and sale of certain products related to the
production of concrete under the Exclusive Sales, Market and
Distribution Agreement and the Supply Agreement between the
Technology Company and Grace.
The Debtors have determined in the reasonable exercise of their
business judgment that sound business reasons justify the Sale.
The investment in the Shares and Grace's entry into the SMD
Agreement and the Supply Agreement were made pursuant to a Court
order. The investment was made in order to develop and
commercialize products utilizing the Technology Company's
intellectual property, which the Debtors would sell under the SMD
Agreement. However, the Debtors relate, further work on the
intellectual property determined that successful development and
commercialization of the products would require significantly more
time and expense than anticipated, and the Debtors concluded that
further investment by Grace, or payment of annual minimum fees in
order to maintain its rights under the SMD Agreement, were not in
the Debtors' best interests. They further concluded that the best
interests of the Debtors lie in the sale of the Shares and Grace's
rights under the SMD Agreement and the Supply Agreement.
No person or entity other than the Technology Company has
expressed an interest in purchasing the Shares, the Debtors tell
the Court. It is uncertain whether the Technology Company will be
able to find additional investments to enable it to continue
development and commercialization of its intellectual property; or
whether in any event it will succeed in its efforts, they point
out. In addition, the Shares amount to less than 15% of the
voting power of the Technology Company stock, and have no class
vote or protective rights except those provided by Delaware law.
The Debtors say Grace's rights under the SMD Agreement and the
Supply Agreement are not assignable without the Technology
Company's consent. The Debtors, therefore, concluded that it was
futile to attempt to pursue the Sale with another party.
Any party wishing to submit an alternative bid with respect to the
Shares and the SMD Agreement must serve its bid in writing upon
Pachulski, Stang, Ziehl, & Jones LLP, Baer Higgins Fruchtman LLP,
and other notice parties so that it is received on or before March
30, 2011. Objections, if any, to the Sale must be in writing and
served upon Debtors' Counsel so that they are received on or
before March 30. In the event the Debtors do not receive any
written objections to the Sale or qualifying Alternative Bids on
or before the deadline, the Debtors are authorized to proceed with
the Sale without further Court approval.
A summary of the terms of the sale is available for free
at http://bankrupt.com/misc/26575_exA.pdf
About W.R. Grace & Co.
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The Company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and
Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones,
LLP, represent the Debtors in their restructuring effort. The
Debtors hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock
& Stroock & Lavan, LLP, and Duane Morris, LLP, represent the
Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace and its debtor affiliates, with the support of the
Official Committee of Asbestos Personal Injury Claimants, the
Asbestos PI Future Claimants' Representative and the Official
Committee of Equity Security Holders, have submitted a proposed
Chapter 11 plan of reorganization. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. The Plan confirmation hearing
wrapped up on Jan. 25.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
XR-5 LP: Texas Appellate Court Rules on Receivership
----------------------------------------------------
The Court of Appeals of Texas, Second District, Fort Worth,
reversed and remanded in part and affirm in part a trial court's
order appointing a receiver
The Court of Appeals of Texas, Second District, Fort Worth,
affirmed a trial court's order appointing a receiver with respect
to XR-5 LP and XR-5 LLC, and reversed with respect to Skull Creek
Corp.; and remand to the trial court for further proceedings
consistent with the opinion.
In January 2009, XR-5 LP was formed by Bura Ray Kelley and others,
including Peter Margolis, Mike Wood, and HiTex Resources, LP, "to
acquire, finance, manage, lease and/or sell real estate and/or oil
and gas interests." Mr. Kelley holds the largest limited
partnership interest in XR-5 and is the sole shareholder in
WiseTel Inc., XR-5's general partner. Mr. Kelley also wholly owns
Skull Creek Corp., a single-asset entity holding the 25.32 acres
of real property on which XR-5's well and equipment sit.
Mr. Kelley was XR-5's manager. In October 2009, HiTex assigned
Jennifer Sprouse, a Certified Public Accountant experienced in
forensic accounting, to review XR-5's 2009 books, records, and
other financial statements. She performed a follow-up audit in
March 2010, and in April 2010, Margolis et al. filed suit,
requesting appointment of a receiver under section 11.404 of the
business organizations code. In July 2010, before the hearing on
Margolis et al.'s petition to appoint a receiver, Mr. Kelley, in
an individual capacity, filed a voluntary petition for bankruptcy
under Chapter 11. Margolis et al. non-suited Mr. Kelley.
At the hearing, Mr. Kelley's attorney, who also represented Skull
Creek and XR-5, requested a continuance, arguing that the
automatic stay associated with Mr. Kelley's personal bankruptcy
filing prevented the trial court from proceeding on Margolis et
al.'s receivership petition because Skull Creek, wholly owned by
Mr. Kelley, was still a party to the suit. Mr. Kelley's attorney
also stated that because of the stay, he was unable to defend
against the receivership and that, should the trial court proceed
with the hearing, he did not "see any point in putting on the show
. . . just for show." The trial court denied the continuance and
admitted into evidence the affidavits by Sprouse, Kent Madden (an
XR-5 limited partner and XR-5's sales manager), and John Elder
(proposed receiver appointee) offered by Margolis et al.
After the hearing, the trial court issued an order appointing a
receiver over all of XR-5's and Skull Creek's assets and business
activities, namely (1) all real property, including the 25.32
acres held by Skull Creek; (2) all fixtures, real and personal
property, buildings, containers, tanks, equipment, facilities, and
contents; (3) all bank accounts; (4) the post-office box Kelley
used for all entities; and (5) all accounts payable, accounts
receivable, payroll, cash, books, records, and any other papers or
software or other records owned or possessed by the entities. The
appeal followed.
The appellate case is XR-5, LP, XR-5, LLC, and Skull Creek Corp.,
v. Peter Margolis, Mike Wood, and Hi-Tex Resources, LP, No. 02-10-
00290-CV (Tex. Ct. App.). The appellate panel consists of
Justices Lee Ann Dauphinot, Sue Walker and Bob McCoy. A copy of
the March 24, 2011 Memorandum Opinion, penned by Justice McCoy, is
available at http://is.gd/KlOPmSfrom Leagle.com.
YOUNG BROADCASTING: Vince Young on Wrong Side, Pushed Out
---------------------------------------------------------
Andrew Gauthier at mediabistro.com's TVSpy reports that Vince
Young has resigned from Young Broadcasting. After stepping down
as CEO in August of 2010, Mr. Young had been serving as a non-
executive chairman as shareholders attempted to save the Company
from bankruptcy.
According to TVNewsCheck, Vincent Young's departure from the
company that bears his family name was, in part, the result of his
alignment with the group that unsuccessfully sought to have its
bankruptcy reorganization plan imposed.
TVSpy reports that, during Young's bankruptcy, two competing
groups -- the secured lenders and the unsecured lenders --
submitted restructuring plans but the presiding judge ultimately
chose the secured lenders' plan.
TVSpy notes that Mr. Young's seat on the board has been filled by
Soo Kim of Standard General, a hedge fund that owns approximately
25% of the company, making it the largest shareholder.
About Young Broadcasting
Headquartered in New York City, Young Broadcasting, Inc.
-- http://www.youngbroadcasting.com/-- owns 10 television
stations and the national television representation firm, Adam
Young, Inc. Five stations are affiliated with the ABC Television
Network (WKRN-TV - Nashville, TN, WTEN-TV - Albany, NY, WRIC-TV -
Richmond, VA, WATE-TV - Knoxville, TN, and WBAY-TV - Green Bay,
WI), three are affiliated with the CBS Television Network (WLNS-TV
- Lansing, MI, KLFY-TV - Lafayette, LA and KELO-TV - Sioux Falls,
SD), one is affiliated with the NBC Television Network (KWQC-TV -
Davenport, IA) and one is affiliated with MyNetwork (KRON-TV - San
Francisco, CA).
The Company and its affiliates filed for Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 09-10645) on Feb. 13, 2009. Jo
Christine Reed, Esq., at Sonnenschein Nath & Rosenthal LLP,
represents the Debtors in their restructuring effort. The Debtors
selected UBS Securities LLC as consultant; Ernst & Young LLP as
accountant; Epiq Bankruptcy Solutions LLC as claims agent; and
David Pauker chief restructuring officer Andrew N. Rosenberg,
Esq., at Paul Weiss Rifkind Wharton & Harrison LLP, serves as
counsel to the official unsecured creditors committee.
* Ex-Haynes Client Suffers Setback in Malpractice Suit
------------------------------------------------------
Bankruptcy Law360 reports that a once-bankrupt man who won a
settlement to share in Beanie Babies sales profits lost another
attempt Wednesday to prevent his former attorneys at Haynes and
Boone LLP and Griffith Nixon & Davison PC from collecting $1.3
million in fees.
Judge David C. Godbey of the U.S. District Court for the Northern
District of Texas denied Timothy Frazin's motion for a rehearing
without comment, according to Law360.
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
Mar. 31-Apr. 3, 2011
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center,
National Harbor, Md.
Contact: 1-703-739-0800; http://www.abiworld.org/
April 27-29, 2011
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
JW Marriott, Chicago, IL
Contact: http://www.turnaround.org/
May 5, 2011
AMERICAN BANKRUPTCY INSTITUTE
Nuts and Bolts - New York City
Association of the Bar of the City of New York,
New York, N.Y.
Contact: 1-703-739-0800; http://www.abiworld.org/
May 6, 2011
AMERICAN BANKRUPTCY INSTITUTE
New York City Bankruptcy Conference
Hilton New York, New York, N.Y.
Contact: 1-703-739-0800; http://www.abiworld.org/
June 6, 2011
AMERICAN BANKRUPTCY INSTITUTE
Canadian-American Cross-Border Insolvency Symposium
Fairmont Royal York, Toronto, Ont.
Contact: 1-703-739-0800; http://www.abiworld.org/
June 9-12, 2011
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort and Spa, Traverse City, Mich.
Contact: http://www.abiworld.org/
July 21-24, 2011
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Hyatt Regency Newport, Newport, R.I.
Contact: 1-703-739-0800; http://www.abiworld.org/
July 27-30, 2011
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
The Sanctuary at Kiawah Island, Kiawah Island, S.C.
Contact: 1-703-739-0800; http://www.abiworld.org/
Aug. 4-6, 2011
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hotel Hershey, Hershey, Pa.
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 14, 2011
AMERICAN BANKRUPTCY INSTITUTE
NCBJ/ABI Educational Program
Tampa Convention Center, Tampa, Fla.
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. __, 2011
AMERICAN BANKRUPTCY INSTITUTE
International Insolvency Symposium
Dublin, Ireland
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 25-27, 2011
TURNAROUND MANAGEMENT ASSOCIATION
Hilton San Diego Bayfront, San Diego, CA
Contact: http://www.turnaround.org/
Dec. 1-3, 2011
AMERICAN BANKRUPTCY INSTITUTE
23rd Annual Winter Leadership Conference
La Quinta Resort & Spa, La Quinta, Calif.
Contact: 1-703-739-0800; http://www.abiworld.org/
April 3-5, 2012
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
Grand Hyatt Atlanta, Atlanta, Ga.
Contact: http://www.turnaround.org/
Apr. 19-22, 2012
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center,
National Harbor, Md.
Contact: 1-703-739-0800; http://www.abiworld.org/
July 14-17, 2012
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
The Ritz-Carlton Amelia Island, Amelia Island, Fla.
Contact: 1-703-739-0800; http://www.abiworld.org/
Aug. 2-4, 2012
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hyatt Regency Chesapeake Bay, Cambridge, Md.
Contact: 1-703-739-0800; http://www.abiworld.org/
November 1-3, 2012
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Westin Copley Place, Boston, Mass.
Contact: http://www.turnaround.org/
Nov. 29 - Dec. 2, 2012
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
JW Marriott Starr Pass Resort & Spa, Tucson, Ariz.
Contact: 1-703-739-0800; http://www.abiworld.org/
April 10-12, 2013
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
JW Marriott Chicago, Chicago, Ill.
Contact: http://www.turnaround.org/
October 3-5, 2013
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Wardman Park, Washington, D.C.
Contact: http://www.turnaround.org/
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers"
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com
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.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise
Marie Varquez, Philline Reluya, Ronald C. Sy, Joel Anthony G.
Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez,
Christopher G. Patalinghug, and Peter A. Chapman, Editors.
Copyright 2011. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
*** End of Transmission ***