/raid1/www/Hosts/bankrupt/TCR_Public/110511.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, May 11, 2011, Vol. 15, No. 129
Headlines
20 BAYARD: Amends Plan to Address "Cramdown" Issue
ACORN ELSTON: Kasowitz Benson Withdraws as Debtor Counsel
AGE REFINING: Chapter 11 Trustee Wants to Sell Redfish Bay Assets
AIRPARK VILLAGE: Has Interim Access to Mile High's Cash Collateral
ALL LAND: Can Sell Building No. 76 to Charlene Monroe for $224,000
ALLIANCE ONE: S&P Lowers CCR to 'B' on Weaker Industry Trends
ALT HOTEL: Allerton Hotel Owner Files for Chapter 11
ALTAIR NANOTECHNOLOGIES: Posts $5.9-Mil. Loss in 1st Quarter
AMBAC FINANCIAL: Settles Securities Class Suits for $2.5 Million
AMERICA'S BREWING: Two Brothers Buys Historic Roundhouse
ANGARAKA LIMITED: Wants Plan Hearing Postponed to June
APEX DIGITAL: Plan Filing Period Extended to June 13
ARTECITY MGT: Has Until May 17 to Amend Disclosure Statement
ARTISAN HOTEL: Atlantic Hotels Inks $2 Million Sale Deal
ART ONE: Seeks to Employ Barlow Garsek as Bankruptcy Counsel
ART ONE: Files Schedules of Assets and Liabilities
ATLANTIC BROADCASTING: Sells Radio Stations for $4.2 Million
AURASOUND INC: Reports $563,000 Net Income in March 31 Quarter
AVALON PLAZA: Case Summary & 6 Largest Unsecured Creditors
BABYLAND FAMILY: Organizational Meeting to Form Panel on May 11
BANNING LEWIS: Proposes June 28 Auction for Assets
BARNES BAY: Creditors Give Evidence to Back Bid for Ch. 11 Trustee
BATAA/KIERLAND LLC: U.S. Trustee Unable to Form Committee
BCBG MAX: Moody's Rates Proposed Term Loan B2; Junk CFR on Review
BERKLINE/BENCHCRAFT: Meeting to Form Committee on May 12
BERKLINE/BENCHCRAFT: Faces Suit for No Notice of Factory Shutdown
BERNARD L. MADOFF: Trustee Reaches Deal With Fairfield Sentry
BEVERLY PARK: Voluntary Chapter 11 Case Summary
BIOLASE TECHNOLOGY: Annual Meeting of Stockholders Held
BLANCA GAMES: Continues Non-U.S. Online Poker Operations
BLACK BULL: Schumacher Buys Bozeman Resort for $8.1 Million
BLOCKBUSTER INC: Dish to Reopen 2 Stores in Orange County
BOMBARDIER INC: Fitch Affirms 'BB+' Issuer Default Rating
BOWLNEBRASKA LLC: 8th Cir. Rejects Attempt to Avoid Lender's Lien
BRIGHAM EXPLORATION: Files Form 10-Q; Posts $1.55MM Net Income
BRIGHAM EXPLORATION: Completes Infill Wells in Williston Basin
BROOKE CORP: SEC Slaps Six Execs. of Fraud; Settlement Reached
CARBON RESOURCES: Court Sets June 6 Disclosure Statement Hearing
CARIBE MEDIA: Wins Interim Cash Use Approval
CARITAS HEALTH: Firm Shows Plan for St. John's Hospital Site
CBBT L.P.: Keelings Obtain Relief From Stay Over Nonexempt Asset
CELL THERAPEUTICS: Has $9.9-Mil. Operating Loss in March
CHEMTURA CORP: Has $7-Mil. Quarterly Profit After Emergence
CHINA FRUITS: Restates 2009 Annual Report to Correct Errors
CLICO (BAHAMAS): Creditors to Receive Payoff from Assets Sale
CMS ENERGY: Fitch Puts 'BB+' Rating to Unsecured Note Issuance
COMMPARTNERS HOLDING: Momentum Telecom Acquires VoIP Business
CONTINENTALAFA: Payments to Staffing Firm Not Preferential
CORELOGIC INC: Moody's Affirms 'Ba2' Corporate Family Rating
COYOTES HOCKEY: Glendale City Council Will Vote on New Plan
CAPITAL HOME: Cash Collateral Hearing Continued Until May 31
CASTLE HOME: Case Summary & 3 Largest Unsecured Creditors
CC MEDIA HOLDINGS: Incurs $131.83 Million Net Loss in 1st Qtr.
CHICAGOLAND CONSERVATIVE: Case Summary & Creditors List
CHRISTIAN RELIEF: S&P Affirms 'B' Rating on IX-A 1995 Bonds
CIVICA DEVELOPMENT: Case Summary & 4 Largest Unsecured Creditors
COATES INTERNATIONAL: Receives $10MM Funding from Black Swan
COLONY RESORTS: Posts $3.3 Million Net Loss in March 31 Quarter
COMMUNITY CENTRAL: Common Stock Delisted from NASDAQ
COMMUNITY SHORES: Incurs $734,219 Net Loss in March 31 Quarter
CORTO INVESTORS: Case Summary & Largest Unsecured Creditor
DALLAS MMK: Case Summary & 20 Largest Unsecured Creditors
DEARBORN LODGING: Court Cancels Proposed Sale to Unnamed Buyer
DIETER KLOHN: Equitable Recoupment Doctrine Won't Apply to Setoff
D.M.S. ELECTRIC: Case Summary & 20 Largest Unsecured Creditors
DOLLAR THRIFTY: S&P Retains 'B' CCR on New Hertz Takeover Bid
DOT VN: Signs Into Yahoo! Search Reseller Program
DOUGLAS DEPUGH: Court Rules on Bank's Challenge to Cash Use
DUNE ENERGY: Incurs $8.34 Million Net Loss in March 31 Quarter
DYNAVAX TECHNOLOGIES: Posts $18.5MM Net Loss in March 31 Quarter
E-Z BUS: Case Summary & 20 Largest Unsecured Creditors
EDIETS.COM: Stockholders Elect 6 Directors, OK E&Y as Accountant
ELAN CORP: S&P Places 'B' CCR on Watch Positive on EDT Biz Sale
EMERGENCY MEDICAL: S&P Puts 'B-' Rating on $950MM Sr. Unsec. Notes
ENCORIUM GROUP: Posts $3.9 Million Net Loss in Sept. 30 Quarter
ENERGY TRANSFER: Fitch Affirms 'BB-' Issuer Default Rating
ENTECH SOLAR: Posts $2.1-Mil. Net Loss in First Quarter
FAIRFIELD SENTRY: Liquidators Have Deal With Madoff Trustee
FAMOUS RECIPE: Soliciting Bids for Mrs. Winner's
FANNIE MAE: Posts $6.5 Billion Net Loss in 2011 First Quarter
FIDDLER'S CREEK: In Mediation on Contested Reorganization Plan
FIDDLERS' CREEK: Improperly Solicited Homeowners, U.S. Bank Says
FIRST FEDERAL: Gets Non-Compliance Notice from NASDAQ
FIRST FEDERAL: To Offer Rights to Purchase $2.91MM Common Shares
FRENCH BROAD: Plan Outline Hearing Continued Until May 18
FUSION TELECOMMUNICATIONS: Borrows $10,000 from Marvin Rosen
GANESS MAHARAJ: Court Rejects Plan, Permits Appeal to 4th Cir.
GARDEN APTS: Case Summary & 14 Largest Unsecured Creditors
GCI INC: Moody's Gives 'B2' Rating on New Note Offering
GCI INC: S&P Gives 'BB' Issue-Level Rating on $325MM Sr. Notes
GENON MID-ATLANTIC: Fitch Affirms Issuer Default Rating at 'B+'
GILLANI CONSULTING: Voluntary Chapter 11 Case Summary
GIORDANO'S ENTERPRISES: Ally Financial Wants to Recover Cadillac
GLOBAL CROSSING: Files Form 10-Q; Posts $33MM Loss in 1st Qtr.
GOLDENPARK, LLC: Case Summary & 12 Largest Unsecured Creditors
HAWKER BEECHCRAFT: Incurs $74.80 Million Net Loss in 1st Qtr.
HERRIN CLINIC: Court Warns on "Injudicious" Use of FedEx
HERTZ CORP: Moody's Reviews Low-B Ratings for Possible Downgrade
HOST HOTELS: Fitch Puts 'BB' Rating on Private Placement Sr. Notes
HOTI ENTERPRISES: Creditors Have Until June 1 to File Claims
HOUGHTON MIFFLIN: Fitch Puts 'B-' Issuer Default Rating
IL LUGANO: Has OK for Realty Marketing as Listing Broker
IL LUGANO: Can Sell Condo Unit #1208 for $625,000 to John D. Ryan
IMPERIAL CAPITAL: Creditors Will Not Be Paid in Full Under Plan
INDIANAPOLIS DOWNS: Gomes Opposes Management Contract Rejection
INDUSTRIAL SURFACING: Voluntary Chapter 11 Case Summary
INDUSTRY WEST: Fees of Bank Lender's Expert Witness Unreasonable
INNKEEPERS USA: Revises Chapter 11 Plan to Add Auction Results
INTERPUBLIC GROUP: Moody's Puts Ba2 Ratings on Review for Upgrade
JANE RASHAD: Garza Has OK to Pursue Claims Over Botched Sale
KEDZIE/FULLERTON LLC: Case Summary & 20 Largest Unsec Creditors
LAND O'LAKES: Moody's Raises Rating on $191MM Jr. Debt to 'Ba1'
LEE ENRIGHT: Case Summary & 8 Largest Unsecured Creditors
LEE ENTERPRISES: Files Form 10-Q; Posts $1.45 Million Net Loss
LENNY DYKSTRA: Wants Bail Reduced to $105,000
LINDA VISTA: Plan Confirmation Appeal Goes Straight to 9th Cir.
LINN ENERGY: Moody's Puts B2 Rating on $750MM Sr. Unsecured Notes
LIONS GATE: Moody's Gives 'B1' Rating to New $200MM Sr. Notes
LIONS GATE: S&P Holds 'B-' Corp. Credit Rating; Outlook Stable
LODGENET INTERACTIVE: John Pecora Discloses 6.6% Equity Stake
LODGENET INTERACTIVE: Files Form 10-Q; Posts $908,000 Loss in Q1
LONGVIEW FIBRE: S&P Gives 'B+' Corp. Credit Rating; Outlook Stable
MAUI LAND: Reports $12.4 Million Net Income in March 31 Quarter
MCCLATCHY CO: Incurs $1.96-Mil. Loss in March 27 Quarter
MEDICURE INC: Reports C$841,000 Net Income in Feb. 28 Quarter
MERITOR INC: Reports $22 Million Net Income in March 31 Quarter
MGM RESORTS: Posts $89.9-Mil. Loss in First Quarter
MGM RESORTS: To Provide WPIP on HKSE Common Stock Listing
MID-MOUNTAIN CONCRETE: Case Summary & Creditors List
MIDTOWN DEVELOPMENT: Claim Objection Barred Over Defective Notice
MIDWESTERN EQUITIES: Case Summary & 16 Largest Unsecured Creditors
MOHEGAN TRIBAL: Moody's Downgrades CFR to Caa3; Negative Outlook
MONEYGRAM INT'L: Amends Recapitalization Pact with THL, et al.
MORGANS HOTEL: Unit Sells Mondrian Hotel to Wolverines for $137MM
MOUNTAIN PROVINCE: Announces Results of Diamond Valuation
MOVIE GALLERY: Lenders Yield on Customer Collections
MSR RESORT: To Sell Doral Golf Resort & Spa
NET TALK.COM: Vicis Capital Lends $4 Million of Promissory Notes
NORCRAFT COMPANIES: Moody's Slashes Corporate Family Rating to B3
NORTHGATECROSSING LLC: Case Summary & 14 Largest Unsec Creditors
NORTHLAKE DEVELOPMENT: Transfer of Kindwood Property Voided
PARMALAT SPA: Trustee Presses to Move Auditor Suits to State Court
PEREGRINE I: Case Converted to Chapter 7 Amid Lack of Funding
PFG ASPENWALK: Disclosure Statement Hearing Today
PHILADELPHIA ORCHESTRA: To Escrow Ticket-Sale Proceeds
PHOENIX FOOTWEAR: Suspending Filing of Reports with SEC
PRM JACKSON: Case Summary & 18 Largest Unsecured Creditors
QINGDAO FOOTWEAR: Sherb & Co. Raises Going Concern Doubt
QWEST COMMUNICATIONS: Reports $211-Mil. Profit in March 31 Qtr.
RADIO ONE: Sees $1.22 to $1.24 Loss Per Share in 1st Quarter
RASER TECHNOLOGIES: Arranging July 25 Auction for Plan Sponsorship
RASER TECHNOLOGIES: Organizational Meeting to Form Panel on May 12
RATECH MACHINE: Case Summary & 20 Largest Unsecured Creditors
RCC SOUTH: Seeks July 28 Plan Exclusivity Extension
REAL MEX: Moody's Cuts Corp. Family Rating to 'Caa3'; Outlook Neg.
REDDY ICE: Incurs $39.10 Million Net Loss in March 31 Quarter
ROBERT PLAN: Can't Recoup Payments to Subsequent Transferee
ROYAL HOSPITALITY: Plan Outline Hearing Continued Until May 25
RURAL DEVELOPMENTS: Case Summary & 3 Largest Unsecured Creditors
RYLAND GROUP: Posts $19.53-Mil. Net Loss in March 31 Quarter
SAINTS MEDICAL: Fitch Keeps "Rating Watch Evolving" for Bonds
SANTA CLARA: Reorganization Plan Declared Effective in April
SCOTT ROTHSTEIN: Stake in Nightclub Up for Sale; Bids Due May 25
SEMGROUP LP: Samson v. Valero Referred to New Mexico Bankr. Court
SEVEN SEAS: S&P Puts 'B-' Issue-Level Rating on $200MM Sr. Notes
SHAHRIAR BOZORGZADEH: Court Warns on "Injudicious" Use of FedEx
SHOPS AT PRESTONWOOD: Files List of 20 Largest Unsecured Claims
SHOPS AT PRESTONWOOD: Files Schedules of Assets & Liabilities
SII LIQUIDATION: Court Overrules Objection to American Sand Claim
SINCLAIR BROADCAST: Files Form 10-Q; Posts $15.12MM Income in Q1
SONRISA REALTY: Court Directs Auction on May 19
SPANSION INC: Claims Agent Inks $8-Million Settlement With TSMC
SPANSION INC: S&P Raises CCR to 'BB-' on Revenue Growth
ST. JOSEPH HEALTH: Fitch Cuts Ratings on Bonds to 'B'
STILLWATER MINING: Seven Directors Elected at Annual Meeting
SUGARLEAF TIMBER: Case Summary & 8 Largest Unsecured Creditors
SUNSET VILLAGE: Hearing on Cash Collateral Use Set for May 25
SUNSET VILLAGE: Has Until June 30 to Solicit Acceptances of Plan
SURF CITY: Lender Fails in Bid to Dismiss Chapter 11 Case
SYMPHONYIRI GROUP: S&P Puts B+ Corp. Credit Rating; Outlook Stable
T3 MOTION: Extends Maturity of Immersive Promissory Note to May
TASTY BAKING: Posts $4.3 Million Net Loss in March 26 Quarter
TEEKAY CORP: Moody's Lowers Corp. Family Rating to 'B1'
TELIGENT INC: 2nd Cir. Upholds Protective Orders on Mediation Docs
TERRA-GEN FINANCE: Fitch To Rate $360MM Loan Facilities 'BB-'
THOMPSON CREEK: Moody's Assigns 'B3' Rating to Proposed Sr. Notes
THOMPSON CREEK: S&P Holds 'B+' Corp. Credit Rating; Outlook Stable
TIB FINANCIAL: North American Discloses 97.2% Equity Stake
TRANS-LUX CORPORATION: GAMCO Asset Discloses 4.2% Equity Stake
TRIPLE M: Case Summary & 20 Largest Unsecured Creditors
TRIUS THERAPEUTICS: Incurs $10-Mil. Net Loss in March 31 Qtr.
TROPICANA PARTNERS: Seeks Extension of Schedules Filing Deadline
TRUE NORTH: Posts $1.4 Million Net Loss in Sept. 30 Quarter
TRUE NORTH: Incurs $1.43 Million Net Loss in Sept. 30 Quarter
TRUE NORTH: S. Levenson Appointed Director, Pres., CFO, and CEO
TWINS RIVER: S&P Ups Corp. Credit Rating to 'BB-'; Outlook Stable
TYLER TOOL: Voluntary Chapter 11 Case Summary
UNIT CORP: S&P Rates Corp. Credit & $200MM Notes 'BB-'
UNIVERSAL SOLAR: Posts $260,400 Net Loss in March 31 Quarter
USEC INC: Unit Completes Effectiveness of Babcock Joint Venture
UTSTARCOM INC: Court Grants Preliminary OK of Derivative Pact
UTSTARCOM INC: Incurs $10.51 Million Net Loss in March 31 Quarter
V-R PROPERTY: Case Summary & 9 Largest Unsecured Creditors
VITA PARTNERS: Case Summary & 2 Largest Unsecured Creditors
VITESSE SEMICONDUCTOR: Incurs $9.04MM Net Loss in March 31 Qtr.
VITRO SAB: Receives Permission to Auction U.S. Businesses
VIVAKOR INC: Effects a 1-for-1000 Reverse Stock Split
WARNER MUSIC: S&P Puts 'B+' CCR on Watch on Merger Announcement
WASHINGTON LOOP: Section 341(a) Meeting Rescheduled for May 26
WASHINGTON LOOP: Proposes Palm Harbor as Bankruptcy Counsel
WOLF MOUNTAIN: Case Summary & 20 Largest Unsecured Creditors
YRC WORLDWIDE: Incurs $102.26 Million Net Loss in March 31 Qtr.
ZAIS INVESTMENT: Organizational Meeting to Form Panel on May 17
* Bankruptcy Filings Ease by 5.6% During First Quarter 2011
* U.S. Junk Default Rate Declines Again in April
* Market Absorbing High Volume Bank Facility Expirations
* Pepper Hamilton Taps Greenberg's Donald J. Detweiler
* Burleson LLP Appoints Two Partners in San Antonio
* Chadbourne & Parke Says Abbe D. Lowell Rejoins Firm
* Cohen & Grigsby Appoints Director Jessica Horowitz
* Sherry C. Dickman Joins McDonald Hopkins Law New Miami Office
* Upcoming Meetings, Conferences and Seminars
*********
20 BAYARD: Amends Plan to Address "Cramdown" Issue
--------------------------------------------------
20 Bayard Views, LLC, submitted to the U.S. Bankruptcy Court for
the Eastern District of New York a modified/amended Plan Of
Reorganization dated as of April 15, 2011.
As reported in the Troubled Company Reporter on March 10, 2011,
Judge Elizabeth S. Stong issued an order denying confirmation of
the Third Amended Plan of Reorganization, as modified. The Court
held that the Plan cannot be confirmed because it does not satisfy
11 U.S.C. Sec. 1129(b)'s cramdown requirements. Specifically, the
Debtor has not established by a preponderance of the evidence that
the Plan treats secured lender W Financial Fund LP fairly and
equitably by providing it with the present value of its claim.
According to the amended Disclosure Statement, the Debtor's Plan
is premised upon the Bankruptcy Court's approval of (a) the
Debtor's payment of secured claims over time, (b) the Debtor's
payment to general unsecured creditors, and (c) sales of the
Debtor's units as the Debtor deems appropriate in the exercise of
its business judgment and as necessary to comply with the payment
scheme in the Plan.
Pursuant to the Plan, the Debtor intends to pay 100% of the
$20,575,000 the secured claim of W. Financial Fund L.P. Holders
of general unsecured claims ($4,200,000 including related party
claims) will receive 50% of their claim if WFF's pendency interest
is calculated at the non-default contract rate of 12%, or 7% if
WFF's pendency interest is calculated at the default rate of 24%.
Equity security holders will receive nothing on account of their
claims.
A full-text copy of the Amended Disclosure Statement is available
for free at http://bankrupt.com/misc/20Bayard_ModifiedDS.pdf
The Debtor is represented by:
PORZIO, BROMBERG & NEWMAN, P.C.
P.O. Box 1997
Morristown, NJ 07962-1997
or
John S. Mairo, Esq.
Michael J. Naporano, Esq.
PORZIO, BROMBERG & NEWMAN, P.C.
100 Southgate Parkway
Morristown, NJ 07960
E-mail: jsmairo@pbnlaw.com
mjnaporano@pbnlaw.com
About 20 Bayard Views
Brooklyn, New York-based 20 Bayard Views, LLC, filed for Chapter
11 bankruptcy protection (Bankr. E.D.N.Y. Case No. 09-50723) on
Dec. 4, 2009. The Company scheduled $21,219,696 in total assets
and $20,976,363 in total liabilities.
ACORN ELSTON: Kasowitz Benson Withdraws as Debtor Counsel
---------------------------------------------------------
Kasowitz Benson Torres & Friedman has withdrawn as the counsel of
Acorn Elston LLC in its bankruptcy proceeding.
The withdrawal was authorized by the U.S. Bankruptcy Court for the
Southern District of New York in an order dated April 8, 2011.
About Acorn Elston
Acorn Elston, LLC, owns the real property, together with the
improvements situated thereon, known as Elston Plaza Shopping
Center, a grocery-anchored retail shopping center in Chicago,
Illinois.
On May 15, 2009, a court appointed C. Michelle Panovich as
receiver with respect to lender Road Bay Investments, LLC's
collateral.
The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Case
No. 10-14807) on Sept. 11, 2010. The Debtor disclosed
$21.92 million in assets and $16.49 million in liabilities as of
the Chapter 11 filing.
AGE REFINING: Chapter 11 Trustee Wants to Sell Redfish Bay Assets
-----------------------------------------------------------------
Eric J. Moeller, the duly appointed Chapter 11 Trustee for the
bankruptcy case of Age Refining, Inc., asks the U.S. Bankruptcy
Court for the Western District of Texas for permission to sell a
leasehold known as Redfish Bay.
The Chapter 11 trustee relates that the Redfish Bay assets were
marketed as part of the marketing effort of the estate's refinery
assets. Ultimately, the Redfish Bay assets were not included in
the sale to NuStar, but they have been marketed for several
months.
The Chapter 11 trustee adds that the purchaser is required to
deposit $1,000,000 with Langley & Banack, Incorporated, as escrow
agent, as credit for the purchase price of the Redfish assets.
The Chapter 11 trustee may determine to accept an offer under
which the potential buyer would be a stalking horse bidder and
entitled to a break-up fee, expense reimbursement and other
compensation.
The U.S. Trustee also asks that the Court approve the sale-related
schedule:
Offer Deadline May 17, at 4:00 p.m., Central Time
Determination of
Initial Higgest Bid May 18, at 5:00 p.m.
Auction May 19
The Chapter 11 Trustee is represented by:
David S. Gragg, Esq.
Steven R. Brook, Esq.
Allen Debard, Esq.
Natalie F. Wilson, Esq.
LANGLEY & BANACK, INCORPORATED
Suite 900, Trinity Plaza II
745 East Mulberry
San Antonio, TX 78212-3166
Tel: (210)-736-6600
Fax: (210) 735-6889
E-mail: dgragg@langleybanack.com
About Age Refining
Age Refining, Inc. owns a refinery in San Antonio, Texas. It
manufactures, refines and markets jet fuels, diesel products,
solvents and other highly specialized fuels.
The Company filed for Chapter 11 bankruptcy protection (Bankr.
W.D. Texas Case No. 10-50501) on Feb. 8, 2010. Aaron Michael
Kaufman, Esq.; Carol E. Jendrzey, Esq.; and Mark E. Andrews, Esq.,
t Cox Smith Matthews Incorporated, represent the Chapter 11
debtor. The Company estimated $10 million to $50 million in
assets and $100 million to $500 million in liabilities in its
bankruptcy petition.
Eric Moeller has been named chapter 11 trustee to take management
of the Debtor from Chief Executive Glen Gonzalez. In
November 2010, the trustee filed suit against Mr. Gonzalez,
alleging he breached his fiduciary duty by dipping into Company
coffers for his personal use while paying himself an excessive
salary and stock distributions, according to My San Antonio.
AIRPARK VILLAGE: Has Interim Access to Mile High's Cash Collateral
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Colorado authorized,
on an interim basis Airpark Village, LLC, to access the cash
collateral of Mile High Banks.
A final hearing on the Debtor's request for cash collateral use
will be held on June 14, at 1:30 p.m.
Aurora, Colorado-based Airpark Village, LLC, filed for Chapter 11
bankruptcy protection (Bankr. D. Colo. Case No. 11-12790) on
Feb. 16, 2011. Kenneth J. Buechler, Esq., at Buechler Law Office
LLC, serves as the Debtor's bankruptcy counsel. The Debtor
disclosed $15,112,195 in assets and $8,564,158 in liabilities as
of the Chapter 11 filing.
ALL LAND: Can Sell Building No. 76 to Charlene Monroe for $224,000
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
All Land Investments, LLC, to sell certain land, together with
improvements to Charlene Monroe for $224,000.
The sale of a home on the real property known as Building Lot
No. 76 in 158 Turin Drive, Clayton, Delaware, will be free and
clear of liens and claims.
Newark, Delaware-based All Land Investments, LLC, operates a real
estate business. The Company filed for Chapter 11 bankruptcy
protection (Bankr. D. Del. Case No. 09-13790) on Oct. 29, 2009.
Gary F. Seitz, Esq., at Rawle & Henderson LLP assists the Company
in its restructuring efforts. The Company disclosed $20,160,303
in assets and $22,796,539 in liabilities as of the Chapter 11
filing.
ALLIANCE ONE: S&P Lowers CCR to 'B' on Weaker Industry Trends
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on
Morrisville, N.C.-based Alliance One International (AOI) to 'B'
from 'B+'. "In addition, we lowered our issue-level ratings on
the company, including the senior secured debt rating to 'BB-'
from 'BB' (two notches higher than the 'B' corporate credit
rating); the recovery rating on this debt remains '1', indicating
our expectation for very high recovery (90% to 100%) in the event
of a payment default. We also lowered our rating on the company's
senior unsecured notes to 'B' from 'B+'. The recovery rating on
these notes remains '4', indicating our expectation of average
(30% to 50%) recovery for note holders in the event of a payment
default. At the same time, we lowered our rating on the company's
$115 million convertible notes due 2014 to 'CCC+' from 'B-', and
the recovery rating remains '6', indicating our expectation of
negligible (0% to 10%) recovery in the event of a payment
default," S&P related.
"The downgrade reflects our expectation that ongoing uncertainties
surrounding industry market trends (which include a meaningful
oversupply of crops and some shifting by tobacco manufacturers to
direct leaf procurement) and increasingly competitive market
conditions could negatively affect AOI's profitability heading
into fiscal 2012," said Standard & Poor's credit analyst Mark
Salierno. "As a result, we have taken a more conservative
assessment of AOI's business risk profile, which we now consider
to be weak. It is our opinion that these factors could result in a
deterioration of AOI's key credit protection measures over the
near term, including leverage potentially increasing above current
levels. We estimate leverage (as measured by the ratio of total
adjusted debt to EBITDA) to be approximately 5.3x for the 12
months ended Dec. 31, 2010. Our earlier expectation was for
leverage to remain closer to the 5x area, and we previously
indicated that we could consider a downgrade if we believed that
leverage could exceed 5.5x."
The outlook is negative, reflecting Standard & Poor's opinion that
operating conditions will remain difficult in fiscal 2012.
ALT HOTEL: Allerton Hotel Owner Files for Chapter 11
----------------------------------------------------
ALT Hotel, LLC, the owner of the Allerton Hotel, 701 N. Michigan,
in Chicago, Illinois, filed a Chapter 11 petition (Bankr. N.D.
Ill. Case No. 11-19401) in its hometown on May 5, 2011.
Bill Rochelle, bankruptcy columnist for Bloomberg News, relates
that because of the recession, revenue per available room declined
29% in the year following completion of a renovation in July 2008.
The hotel has 443 rooms.
The Chicago Sun-Times reports that the Debtor has filed for
Chapter 11 protection as it tries to fend off a lender seeking to
foreclose on the property. Diamond Rock Hospitality Co., which
owns the $69 million first mortgage on the property, is trying to
foreclose.
According to the Chicago Sun-Times report, the hotel will remain
open and employees will continue to be paid, said the owner, an
affiliate of Petra Capital Management LLC in New York.
The bankruptcy filing "is designed to protect against hostile
predatory actions by one secured creditor" that could hurt
operations, said the report quotes Neal Wolf, an attorney
representing the hotel's ownership, as saying.
ALT Hotel says in court papers that Diamond Rock, a real estate
investment trust, acquired the mortgage in May 2010 at a "steep
discount" expressly "for the purpose of acquiring ownership of the
hotel.". The Debtor alleges that Diamond Rock violated an
intercreditor agreement with a mezzanine lender by not honoring an
agreement where the junior lender could acquire the senior debt.
Attorneys at O'Rourke & Moody, and Neal Wolf & Associates, LLC
serve as counsel to ALT Hotel. The Debtor estimated $100,000,001
to $500,000,000 in assets and $50,000,001 to $100,000,000 in
liabilities in its Chapter 11 petition.
An affiliate, PETRA Fund REIT Corp., sought Chapter 11 protection
(Bankr. N.D. Ill. Case No. 10-15500) on Oct. 201, 2010.
A case summary, which contains a list of 20 largest unsecured
creditors, for ALT Hotel is in yesterday's edition of the Troubled
Company Reporter.
ALTAIR NANOTECHNOLOGIES: Posts $5.9-Mil. Loss in 1st Quarter
------------------------------------------------------------
Altair Nanotechnologies Inc. filed its quarterly report on Form
10-Q, reporting a net loss of $5.9 million on $2.6 million of
revenues for the three months ended March 31, 2011, compared with
a net loss of $6.1 million on $1.2 million of revenues for the
same period last year.
The Company's balance sheet at March 31, 2011, showed
$23.5 million in total assets, $8.1 million in total liabilities,
and stockholders' equity of $15.4 million.
Perry-Smith LLP, in Sacramento, California, expressed substantial
doubt about Altair Nanotechnologies' ability to continue as a
going concern, following the Company's 2010 results. The
independent auditors noted that the Company has incurred recurring
losses from operations resulting in an accumulated deficit of
$184,490,000 at Dec. 31, 2010. "Additionally, the Company
experienced $15,172,000 in negative cash flows from operations
during the year ended Dec. 31, 2010, resulting in a cash balance
of $4,695,000 at Dec. 31, 2010."
A complete text of the Form 10-Q is available for free at:
http://is.gd/Wbs9eT
Reno, Nev.-based Nano Technologies Inc. (Nasdaq: ALTI)
-- http://www.altairnano.com/-- is a Canadian corporation, with
principal assets and operations in the United States, whose
primary business is developing, manufacturing and selling its
nano-lithium titanate battery cells, batteries and battery packs
and providing related design, installation and test services.
AMBAC FINANCIAL: Settles Securities Class Suits for $2.5 Million
----------------------------------------------------------------
Bill Rochelle, bankruptcy columnist for Bloomberg News, reports
that Ambac Financial Group Inc. tentatively agreed to pay
$2.5 million in cash to settle several securities class-action
lawsuits first filed in January 2008. The settlement must
approved by the bankruptcy court in New York, where the Ambac
parent filed for Chapter 11 protection. Insurance companies that
provided directors' and officers' liability insurance will provide
an additional $24.6 million in the settlement.
Mr. Rochelle notes that the class actions were settled following a
fifth mediation that took place after Ambac's Chapter 11 filing in
November. In one of the class suits, the U.S. district judge in
New York dismissed claims based on a March 2008 securities
offering while sustaining claims related to a February 2007
offering, Mr. Rochelle says.
About Ambac Financial
Ambac Financial Group, Inc., headquartered in New York City, is a
holding company whose affiliates provided financial guarantees and
financial services to clients in both the public and private
sectors around the world.
Ambac Financial filed a voluntary petition for relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No.
10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will
continue to operate in the ordinary course of business as "debtor-
in-possession" under the jurisdiction of the Bankruptcy Court and
in accordance with the applicable provisions of the Bankruptcy
Code and the orders of the Bankruptcy Court.
Ambac's bond insurance unit, Ambac Assurance Corp., did not file
for bankruptcy. AAC is being restructured by state regulators in
Wisconsin. AAC is domiciled in Wisconsin and regulated by the
Office of the Commissioner of Insurance of the State of Wisconsin.
The parent company is not regulated by the OCI.
Ambac's consolidated balance sheet -- which includes non-debtor
Ambac Assurance Corp -- showed $30.05 billion in total assets,
$31.47 billion in total liabilities, and a $1.42 billion
stockholders' deficit, at June 30, 2010.
On an unconsolidated basis, Ambac said in a court filing that it
has assets of ($394.5 million) and total liabilities of $1.6826
billion as of June 30, 2010.
Bank of New York Mellon Corp., as trustee to seven different types
of notes, is listed as the largest unsecured creditor, with claims
totaling about $1.62 billion.
Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L.
Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's
bankruptcy counsel. The Blackstone Group LP is the Debtor's
financial advisor. Kurtzman Carson Consultants LLC is the claims
and notice agent. KPMG LLP is tax consultant to the Debtor.
Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller,
Esq., at Morrison & Foerster LLP, in New York, serve as counsel to
the Official Committee of Unsecured Creditors. Lazard Freres
& Co. LLC is the Committee's financial advisor.
AMERICA'S BREWING: Two Brothers Buys Historic Roundhouse
--------------------------------------------------------
Marie Wilson at Daily Herald reports that Two Brothers Brewing
Company of Warrenville purchased America's Historic Roundhouse in
Aurora, Illinois. Roundhouse owner Scott Ascher said he already
is working with Two Brothers co-founders Jason and Jim Ebel to
ensure the 70,000 square-foot entertainment complex transitions
smoothly from one operator to another. The facility at 205 N.
Broadway Ave. will continue to operate as America's Historic
Roundhouse until a grand opening yet to be scheduled renames it as
another location of Two Brothers Brewing, Ascher said. Two
Brothers will maintain its current Warrenville microbrewery and
Tap House restaurant at 30W315 Calumet Ave.
About America's Brewing
Schaumburg, Illinois-based America's Brewing Company and First
Round Fourth Pick Partnership, owners of America's Historic
Roundhouse restaurant and brewpub, filed for bankruptcy to sell
the restaurant building to Palentine-based Durty Nellie's Pub or
one of two other interested parties.
America's Brewing filed its Chapter 11 petition (Bankr. N.D. Ill.
Case No. 11-05656) on Feb. 14, 2011, estimating assets and debts
of between $1 million and $10 million. First Round simultaneously
filed its Chapter 11 petition (Bankr. N.D. Ill. Case No. 11-
05657), estimating $1 million to $10 million in assets and
liabilities. Paul M. Bauch, Esq., at Bauch & Michaels LLC,
represents the Debtors.
ANGARAKA LIMITED: Wants Plan Hearing Postponed to June
------------------------------------------------------
Angaraka Limited Partnership and C-III Asset Management LLC have
asked the U.S. Bankruptcy Court for the Northern District of Texas
to continue the hearing on the confirmation of Angaraka's proposed
Chapter 11 plan of reorganization until June 2011.
The parties are set to conduct discovery in connection with C-III
Asset's objection to the Debtor's proposed plan, and need
additional time to complete the discovery prior to the
confirmation hearing.
Angaraka and C-III Asset are set to conduct discovery next week,
during which expert reports will be exchanged. Depositions will
be conducted in the subsequent three weeks.
Last year, the Debtor filed a proposed plan that contemplates that
the Debtor will continue to operate the business and will payoff
claims from funds generated from business operations. Under the
plan, the lender will receive a note in the amount due of its
secured claim, with the note payable over 24 months, and bearing
interest at a rate of 4.35% per year. Each holder of an allowed
unsecured claim will receive over a period of six months from the
Effective Date, two equal payments payable on each quarterly
distribution date until the claim is paid in full. The holders of
equity interests will retain their interests in the reorganized
Debtor. A full-text copy of the explanatory disclosure statement
is available for free at
http://bankrupt.com/misc/AngarakaLimited_DS.pdf
About Angaraka Limited Partnership
Newport Beach, California-based Angaraka Limited Partnership, in
November 2005, acquired and assumed indebtedness secured by, among
other things, a Deed of Trust on four, Class B/C, garden-apartment
properties located in the Dallas/Fort-Worth Metroplex. The
Properties -- Woodchase, Clarendon, Keller Oaks, and Sycamore
Hills -- total 750 units and range in date of construction from
1979 to 1983. The Company filed for Chapter 11 bankruptcy
protection (Bankr. N.D. Tex. Case No. 10-33868) on May 31, 2010.
Vincent P. Slusher, Esq., and J. Seth Moore, Esq. at DLA Piper LLP
US, in Dallas, Texas, assist the Debtor in its restructuring
effort. The Debtor estimated its assets and debts at $10 million
to $50 million.
APEX DIGITAL: Plan Filing Period Extended to June 13
----------------------------------------------------
Apex Digital, Inc. sought and obtained from the U.S. Bankruptcy
Court for the Central District of California an extension of the
exclusive Chapter 11 plan filing period from March 15, 2011 to
June 13, 2011 and the exclusive period to solicit acceptances of a
plan from May 14, 2011 to August 12, 2011.
About Apex Digital
Walnut, California-based Apex Digital, Inc. -- aka AW XEPA
Technologies Inc., AW Apex R&D Shangai, AW Apex, AW E2Go, AW
Entertainment to Go -- is a privately held company that provides
and markets consumer electronics, including high-definition LCD
televisions, home entertainment media devices, solar powered
lights and digital set top boxes.
Apex Digital filed for Chapter 11 protection (Bankr. C.D. Calif.
Case No. 10-44406) on Aug. 17, 2010. Juliet Y. Oh, Esq., in Los
Angeles, California, represents the Debtor. The Debtor estimated
assets and debts at $10 million to $50 million as of the Petition
Date.
ARTECITY MGT: Has Until May 17 to Amend Disclosure Statement
------------------------------------------------------------
The Hon. A. Jay Cristol of the U.S. Bankruptcy Court for the
Southern District of Florida extended until May 17, 2011, Artecity
Management LLC et al.'s deadline to file an amended Disclosure
Statement explaining the Debtors' Plan of Liquidation.
The Court previously extended until May 2, the Debtors' deadline
to amend the Disclosure Statement to address Corus Construction
Ventures, LLC's objection to the confirmation of the Debtors'
Plan.
The Debtors related they need additional time to finalize
negotiations with CCV regarding the terms of a consensual plan.
According to the current iteration of the Disclosure Statement,
the Debtors propose to substantively consolidate the assets and
liabilities of their estates. Pursuant to the terms of the Plan:
i) unpaid allowed administrative expense claims and U.S.
Trustee fees will be paid in full on the effective date,
which the Debtors estimate to be April 1, 2011;
ii) individual holders of allowed priority unsecured deposit
claims in Class 1 will be paid the allowed amount of their
claim;
iii) the allowed secured claim of Miami-Dade County Tax Collector
in Class 2 will be paid from sale proceeds upon the earlier
closing of sales of condominium units;
iv) the allowed CCV secured claim in Class 3 will be paid an
amount equal to the CCV secured claim payment; and
v) the allowed CCV deficiency claim, allowed unsecured
mechanics' lien claims, and unsecured claims in Class 4A to
4C will be paid a quarterly pro rata distribution equal to
the amount of unsecured claims payment upon the earlier of
full payment of the CCV secured claim or exit loan. general
unsecured claims will receive an estimated distribution of
between 15% to 40% of their allowed claims.
About Artecity Park LLC
Miami Beach, Florida-based Artecity Park LLC filed for Chapter 11
bankruptcy protection (Bankr. S.D. Fla. Case No. 10-31410) on
July 26, 2010. Thomas R. Lehman, Esq., at Levine Kellogg Lehman
Schneider & Grossman LLP, in Miami, Fla., represents the Debtors
as counsel. The Company estimated assets at $50 million to
$100 million and debts at $10 million to $50 million.
Affiliates Artecity Management IXC (Case No. 10-41406), Artecity
Holding Ltd. (Case No. 10-31407), Artepark South Development LLC
(Case No. 10-31412, BKC-AJC), Artecity Plaza LLC (Case No.
10-31411), Artecity Governor LLC (Case No. 10-31409), and Park
Villas Development LLC (Case No. 10-31413) filed separate
Chapter 11 petitions. The cases are jointly administered under
Artecity Management, LLC.
The Debtors are engaged in the development of a real estate
condominium project in Miami Beach, Florida, known as the
Aretecity. The Project includes 202 condominium units in five
multi-level buildings, together with retail spaces, two pools, a
fitness and spa facility, and a parking garage.
Artecity Management manages the Debtors' operations and is the
general partner of Artecity Holding, Ltd. Artecity Holding owns
100% of the membership interests in Artecity Park LLC, Artecity
Plaza LLC, Artecity Governor LLC, Artepark South Development LLC,
and Park Villas Development LLC.
ARTISAN HOTEL: Atlantic Hotels Inks $2 Million Sale Deal
--------------------------------------------------------
David Crowder at El Paso Inc. reports that Atlantic Hotels Ltd.
has signed a $2-million contract to buy El Paso's derelict Artisan
Hotel. If the sale goes through, Atlantic plans to spend
$6 million to gut and rebuild it from the inside out. Atlantic's
president, Perwez Molubhoy, told El Paso Inc. his company owns
five hotels in the Dallas area that it built from the ground up.
About Artisan Hotel
The Artisan Hotel & Spa LLC -- http://www.theartisanhotel.com/ --
operates the Artisan Hotel & Spa in Las Vegas, Nevada.
The Company filed for Chapter 11 protection (Bankr. D. Nev. Case
No. 08-24684) on Dec. 9, 2008. David J. Winterton, Esq., at
David J. Winterton & Assoc. Ltd., represented the Debtor in its
restructuring effort. In its petition, the Debtor posted assets
between $10 million and $50 million, and debts of between
$1 million and $10 million.
Artisan is tied up in Chapter 7 bankruptcy. The case was
converted from Chapter 11 reorganization to Chapter 7 in April
2010.
ART ONE: Seeks to Employ Barlow Garsek as Bankruptcy Counsel
------------------------------------------------------------
ART One Hickory Corporation asks the U.S. Bankruptcy Court for the
Northern District of Texas for authority to employ Barlow Garsek &
Simon LLP as bankruptcy counsel.
Barlow Garsek's services as bankruptcy counsel are:
a. BGS will advise and consult with the Debtor concerning (i)
legal questions arising in administering and reorganizing
the Debtor's estate, and (ii) the Debtor's rights and
remedies in connection with the estate's assets and
creditors' claims;
b. BGS will provide legal services to the Debtor relating to
the sale of assets, outside the ordinary course of
business, if necessary;
c. BGS will assist the Debtor in obtaining confirmation and
consummation of the Plan;
d. BGS will assist the Debtor in preserving and protecting
property of the Debtor's estate, including the negotiation
of cash collateral agreements, the defense of motions for
relief from the automatic stay, and the prosecution of
litigation, if any;
e. BGS will, as appropriate, investigate and prosecute
preference, fraudulent transfer, and other actions arising
under the Debtor's avoidance powers and any causes of
action arising under state law;
f. BGS will prepare any pleadings, motions, answers, notices,
orders and reports that are required for the orderly
administration of the Debtor's estate; and
g. BGS will perform any and all other legal services for the
Debtor that the Debtor determines to be necessary and
appropriate to faithfully discharge its duties as a debtor-
in-possession.
The customary and proposed hourly rates to be charged by Barlow
Garsek for the individuals expected to be directly involved in
representing the Debtor are:
Henry W. Simon $400
Robert A. Simon $350
Spencer D. Solomon $225
The Debtor will also reimburse Barlow Garsek for its necessary
out-of-pocket expenses.
Robert A. Simon, Esq., a member at Barlow Garsek, assures the
Court that his firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
About ART One
Fort Worth, Texas-based ART One Hickory Corporation, aka ART Two
Hickory Corporation owns two four-story office buildings in North
Dallas, Texas. The first is located at 1800 Valley View Lane,
Dallas, Texas 75234, and is approximately 102,612 square feet.
The second is located at 1750 Valley View Lane, Dallas, Texas
75234, and is approximately 96,124 square feet.
ART One filed for Chapter 11 bankruptcy protection (Bankr. N.D.
Tex. Case No. 11-42024) on April 4, 2011. Robert A. Simon, Esq.,
at Barlow Garsek & Simon, LLP, serves as the Debtor's bankruptcy
counsel. The Debtor estimated its assets and debts at $10 million
to $50 million.
ART ONE: Files Schedules of Assets and Liabilities
--------------------------------------------------
ART One Hickory Corporation filed with the U.S. Bankruptcy Court
for the Northern District of Texas, its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ------ -----------
A. Real Property $22,000,000
B. Personal Property $2,770,573
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $18,027,362
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $1,531,343
----------- -----------
TOTAL $24,770,573 $19,558,705
About ART One
Fort Worth, Texas-based ART One Hickory Corporation, aka ART Two
Hickory Corporation owns two four-story office buildings in North
Dallas, Texas. The first is located at 1800 Valley View Lane,
Dallas, Texas 75234, and is approximately 102,612 square feet.
The second is located at 1750 Valley View Lane, Dallas, Texas
75234, and is approximately 96,124 square feet.
ART One filed for Chapter 11 bankruptcy protection on April 4,
2011 (Bankr. N.D. Tex. Case No. 11-42024). Robert A. Simon, Esq.,
at Barlow Garsek & Simon, LLP, serves as the Debtor's bankruptcy
counsel. The Debtor estimated its assets and debts at $10 million
to $50 million.
ATLANTIC BROADCASTING: Sells Radio Stations for $4.2 Million
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Atlantic Broadcasting of Linwood New Jersey LLC held
a May 4 auction for its radio stations where the price increased
to $4.2 million from $3 million. The buyer, Longport Radio LLC,
received approval for the transaction on May 6 from the bankruptcy
judge.
About Atlantic Broadcasting
Atlantic Broadcasting, based in Linwood, New Jersey, operates five
stations that cover Atlantic City and Cape May, New Jersey. The
business was purchased in 2008 by Northwood Ventures LLC which
retains 88% of the stock.
Atlantic Broadcasting of Linwood filed for Chapter 11 protection
on Dec. 20, 2010 (Bankr. D. N.J. Case No. 10-49149). Joshua T.
Klein, Esq., at Fox, Rothschild LLP, in Philadelphia, serves as
counsel to the Debtor.
The Debtor estimated assets and debts of $1 million to $10 million
in its chapter 11 petition. Secured lender Sun National Bank is
owed $6.3 million. There are $1.2 million in unsecured claims,
according to a court filing.
AURASOUND INC: Reports $563,000 Net Income in March 31 Quarter
--------------------------------------------------------------
AuraSound, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q reporting net income
of $562,961 on $16.03 million of net revenue for the three months
ended March 31, 2011, compared with a net loss of $480,653 on
$1.74 million of net revenue for the same period during the prior
year. The Company also reported net income of $1.61 million on
$54.18 million of net revenue for the nine months ended March 31,
2011, compared with a net loss of $1.53 million on $4.80 million
of net revenue for the same period a year ago.
The Company's balance sheet at March 31, 2011, showed
$34.09 million in total assets, $27.73 million in total
liabilities, all current, and $6.36 million in total stockholders'
equity.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/HOv6vU
Dec. 31 Form 10-Q Amended
AuraSound, Inc., amended its quarterly report on Form 10-Q for the
fiscal quarter ended Dec. 31, 2010 in order to (a) revise the
Company's unaudited consolidated financial statements as of and
for the six months ended Dec. 31, 2010 to correct errors
originating in the Company's unaudited consolidated financial
statements as of and for the three months ended Sept. 30, 2010,
the Company's determination of cost of sales and the Company's
calculation of earnings per share, (b) revise and restate Item 2,
"Management's Discussion and Analysis of Financial Condition and
Results of Operations," to reflect the foregoing and (c) amend
Item 4, "Controls and Procedures," each in response to comments
received by the Company from the SEC.
The restated statement of operations reflects net income of
$1.05 million on $38.15 million of net sales for the six months
ended Dec. 31, 2010, compared with net income of $901,288 on
$38.15 million of net sales as originally reported.
The Company's restated balance sheet at Dec. 31, 2010 showed
$45.59 million in total assets, $39.79 million in total
liabilities, and $5.80 million in total stockholders' equity. The
original balance sheet showed $45.59 million in total assets,
$39.94 million in total liabilities, and $5.65 million in total
stockholders' equity.
A full-text copy of the Amendment No. 1 to the Form 10-Q is
available for free at http://is.gd/uctXJY
Sept. 30 Form 10-Q Again Amended
AuraSound, Inc., filed an Amendment No. 2 on Form 10-Q/A to its
quarterly report on Form 10-Q for the fiscal quarter ended
Sept. 30, 2010, in order to restate Note 12 to the Company's
unaudited, consolidated financial statements as of and for the
three-months ended Sept. 30, 2010 in response to comments received
by the Company from the Securities and Exchange Commission.
The Company's restated statement of operations reflects net income
of $35,452 on $10.97 million of net revenue for the three months
ended Sept. 30, 2010, compared with net income of $413,234 on
$10.72 million of net revenue as originally reported.
The Company's restated balance sheet at Sept. 30, 2010 showed
$34.53 million in total assets, $34.32 million in total
liabilities, all current, and $211,310 in total stockholders'
equity. The original balance sheet showed $32.91 million in total
assets, $32.59 million in total liabilities, all current, and
$326,294 in total stockholders' equity.
A full-text copy of the Amended Form 10-Q is available for free at
http://is.gd/Pd7JYf
About AuraSound, Inc.
Santa Ana, Calif-based AuraSound, Inc. (OTC BB: ARUZE) --
http://www.aurasound.com/-- develops, manufactures, and markets
audio products. AuraSound's products include TV soundbars, high-
drivers for TVs and laptops, subwoofers, and tactile transducers.
Going Concern
Kabani & Company, Inc., in Los Angeles, expressed substantial
doubt about the Company's ability to continue as a going concern
following the fiscal 2010 results. The independent auditors noted
that during the year ended June 30, 2010, the Company incurred a
net loss of $2.2 million, and had negative cash flow from
operating activities of $202,383.
As of Dec. 31, 2010, the Company has an accumulated deficit of
$36,937,503, negative working capital of $4,716,502 and has
reported significant losses over the past several years. During
the six-month period ended Dec. 31, 2010 the Company recorded a
net income of $1,014,895 and had net cash provided by operating
activities of $627,713. According to the Form 10-Q for the
quarter ended Dec. 31, 2010, "The move to profitability and
positive cash flow is a directly result of the execution of new
management's post acquisition business plan to cut costs on all
business lines, hold and spread overhead costs against a larger
revenue base and to continue to move toward sustained
profitability. However, there can be no assurance that the
Company can sustain profitability or positive cash flows from
operations. As such, if the Company is unable to generate
positive net income and unable to continue to obtain financing for
its working capital requirements, it may have to curtail its
business sharply or cease business altogether."
AVALON PLAZA: Case Summary & 6 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Avalon Plaza, LLC
1109 Spring Street, Suite 602
Silver Spring, MD 20910
Bankruptcy Case No.: 11-19440
Chapter 11 Petition Date: May 5, 2011
Court: United States Bankruptcy Court
District of Maryland (Greenbelt)
Judge: Thomas J. Catliota
Debtor's Counsel: Richard H. Gins, Esq.
THE LAW OFFICE OF RICHARD H. GINS, LLC
3 Bethesda Metro Center, Suite 530
Bethesda, MD 20814
Tel: (301) 718-1078
Fax: (301) 718-8359
E-mail: richard@ginslaw.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/mdb11-19440.pdf
The petition was signed by Theo Margas, managing member.
BABYLAND FAMILY: Organizational Meeting to Form Panel on May 11
---------------------------------------------------------------
Roberta DeAngelis, the United States Trustee for Region 3, will
hold an organizational meeting on May 11, 2011, at 2:00 p.m. in
the bankruptcy case of Babyland Family Services, Inc. The meeting
will be held at United States Trustee's Office One, Newark Center,
14th Floor, Room 1401, Newark, NJ 07102.
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 Babyland Family
Babyland Family Services, Inc. is a child and family development
organization. Babyland provides school readiness and permanency
for children, strengthens family life, creates a safe and
nurturing community and empowers each person to live a full and
productive life.
Babyland Family sought Chapter 11 protection (Bankr. D. N.J. Case
No. 11-23207) on April 28, 2011.
BANNING LEWIS: Proposes June 28 Auction for Assets
--------------------------------------------------
Rich Laden at the Gazette reports that owners of the sprawling
Banning Lewis Ranch have filed with the bankruptcy court a motion
to conduct a sale process in June for the property.
The Debtor has selected a stalking horse bidder for the assets.
The stalking horse is a group controlled by ranch investors. The
Debtor will seek approval to sell the assets to the group absent
higher and better offers.
According to the report, the Court will convene a hearing on the
proposed auction procedures on May 18. If the schedule is
approved, bidders will have until June 23 to submit bids; an
auction will be held June 28 if competing bids are submitted; and
the court will convene the sale hearing on June 29. Closing of
the sale is expected on June 30.
The Gazette relates that Eastdil Secured LLC, a New York-based
real estate investment banking company hired to solicit bids on
the ranch, began marketing the land in mid-January. It sent
marketing materials to more than 1,400 investors representing 900
companies.
About Banning Lewis
Banning Lewis Ranch Co. is the owner of the undeveloped portion of
a 21,000-acre ranch in Colorado Springs, Colo. Banning Lewis
Ranch is a master-planned community in Colorado Springs, Colorado.
The first section built, the 350-acre Northtree Village, opened in
September 2007 and will have 1,000 homes priced from the high
$100,000s to the mid-$300,000s.
Banning Lewis Ranch filed for Chapter 11 bankruptcy protection
from creditors (Bankr. D. Del. Case No. 10-13445) on Oct. 28,
2010. It estimated assets of $50 million to $100 million and
debts of $100 million to $500 million in its Chapter 11 petition.
An affiliate, Banning Lewis Ranch Development I & II, LLC, also
filed for Chapter 11 (Bankr. D. Del. Case No. 10-13446).
Kevin Scott Mann, Esq., at Cross & Simon, LLC, serves as counsel
to the Debtors. Edward A. Phillips of Eisner Amper LLP has been
retained as the Company's chief restructuring officer.
BARNES BAY: Creditors Give Evidence to Back Bid for Ch. 11 Trustee
------------------------------------------------------------------
Lance Duroni at Bankruptcy Law360 reports that unsecured creditors
in Barnes Bay Development Inc.'s bankruptcy presented evidence
Friday in support of their motion to appoint a Chapter 11 trustee,
highlighting that the Company's plan releases potentially valuable
claims that an independent trustee could pursue.
As reported in the TCR on April 6, 2011, the Debtor has filed a
plan that contemplates that a Starwood Capital Group controlled
affiliate, which owns the $358 million mortgage on Viceroy
Anguilla Resort and Residences, will acquire the property through
credit bidding, absent higher and better bids.
However, the official committee of unsecured creditors is opposing
the sale, and instead has sought a Chapter 11 trustee who will
take over management of the Debtor's assets and estate. The
Creditors Committee noted that Starwood paid just $105 million to
buy the loan from Citigroup Inc. as "part of an insidious 'loan-
to-own' strategy." The creditors said a sale to Starwood would
leave them "holding an empty bag."
About Barnes Bay
Beverly Hills, California-based Barnes Bay Development Ltd., owns
the Viceroy Anguilla Resort & Residences on the British West
Indies island of Anguilla. Barnes Bay and two affiliates filed
for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No.
11-10792) on March 17, 2011. The Debtor disclosed $3,331,282 in
assets and $481,840,435 in liabilities as of the Chapter 11
filing.
Akin Gump Straus Hauer & Feld LLP is the Debtors' bankruptcy
counsel, and Keithley Lake & Associates is the Debtors' special
Anguillan counsel. Kurtzman Carson Consultants LLC is the
Debtors' claims, noticing, solicitation and balloting agent.
The Debtors' Chapter 11 plan is intended to facilitate the sale of
the Viceroy Anguilla Resort and Residences.
The U.S. Trustee appointed five members to the official committee
of unsecured creditors in the Debtors' cases. Brown Rudnick LLP
serves as the Committee's co-counsel, and Womble Carlyle Sandridge
& Rice, PLLC, as its Delaware co-counsel. FTI Consulting, Inc.,
serves as the Creditors Committee's financial advisors.
BATAA/KIERLAND LLC: U.S. Trustee Unable to Form Committee
---------------------------------------------------------
The United States Trustee said that a committee under 11 U.S.C.
sec. 1102 has not been appointed because an insufficient number of
persons holding unsecured claims against Bataa/Kierland, LLC have
expressed interest in serving on a committee. The U.S. Trustee
reserves the right to appoint such a committee should interest
develop among the creditors.
About Bataa/Kierland
Bataa/Kierland, LLC, owns and operates a Class "A" office building
known as Kierland Corporate Center located at 7047 E. Greenway
Parkway, Scottsdale, Arizona. It filed for Chapter 11 bankruptcy
protection (Bankr. D. Ariz. Case No. 11-05850) on March 9, 2011.
The Debtor estimated its assets and debts at $10 million to
$50 million.
BCBG MAX: Moody's Rates Proposed Term Loan B2; Junk CFR on Review
-----------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to BCBG Max Azria
Group, Inc.'s proposed $230 million first lien term loan. All
existing ratings, including the Caa1 Corporate Family, have been
placed on review direction uncertain to reflect the increasing
risk associated with upcoming maturities in the current capital
structure.
On April 28, 2011, BCBG launched a transaction to refinance the
existing $94 (originally $200) million first lien term loan due
August 10, 2011. Proceeds from a proposed $230 million first lien
loan will be used to refinance the existing term loan, reduce
borrowings under the company's ABL (unrated by Moody's) by
$48 million, repay a $50 million bridge loan and $8 million in
warrants owed to the second lien lender, and cover related fees
and expenses. In conjunction with the syndication of the first
lien term loan, BCBG will be amending and extending its
$229 million second lien term loan that is held by affiliates
of Guggenheim Partners.
Ratings Rationale
The review direction uncertain will primarily focus on BCBG's
progress in closing the transaction prior to the ABL's springing
maturity date of June 16, 2011 (which springs in the event the
first lien has not been refinanced). At March 31, 2011,
approximately $122 million was outstanding on the revolver. In
Moody's opinion, completion of the proposed refinancing is
critical to the ongoing viability of the company. Should the
transaction not be completed before the ABL's springing maturity
date, an event of default would be triggered and the ratings would
be downgraded several notches. The LGD assessment is also subject
to change.
If the transaction is completed as proposed, the CFR would likely
be upgraded one notch to B3 and the B2 rating on the new term loan
would be affirmed. The refinancing would address the significant
level of near term maturities in the company's capital structure
while also improving liquidity through additional revolver
availability and greater covenant cushion. Nonetheless,
consolidated revenues are expected to decline in the near term due
to deteriorating volumes in BCBG's mass market segment. The
related earnings decline from lower mass market revenue is
expected to be partly offset by continued same store sales growth
in company-owned retail stores and margin improvement in the
wholesale business, driven by lower promotional allowances.
Moody's review will also focus on the final terms of the executed
credit agreement, particularly the level of allowable investments
and loans to non-guarantor foreign subsidiaries.
Moody's assigned this rating:
-- Proposed $230 million first lien term loan due 2015, B2
(LGD3, 35%)
Moody's placed the below ratings on review direction uncertain:
-- Corporate Family Rating, Caa1
-- Probability of Default Rating, Caa1
-- $94 (originally $200) million first lien term loan due
August 2011, B3 (LGD3, 37%)
The principal methodology used in rating BCBG Max Azria Group,
Inc., was the Global Retail Industry Methodology, published
December 2006. Other methodologies used include Loss Given Default
for Speculative Grade Issuers in the US, Canada, and EMEA,
published June 2009.
Headquartered in Vernon, California, BCBG designs, markets,
distributes and licenses women's apparel, footwear and
accessories. Moody's ratings cover the domestic operations and
exclude the results of the non-guarantor subsidiaries. Restated
for the liquidation of the Max Rave stores, revenue for the
year ended January 29, 2011, is estimated at approximately
$950 million. The company is wholly owned by Max and Lubov Azria.
BERKLINE/BENCHCRAFT: Meeting to Form Committee on May 12
--------------------------------------------------------
Roberta DeAngelis, the United States Trustee for Region 3, will
hold an organizational meeting on May 12, 2011, at 11:00 a.m. in
the bankruptcy case of Berkline/BenchCraft Holdings LLC. The
meeting will be held at J. Caleb Boggs Federal Building, 844 King
Street, Room 5209, Wilmington DE 19801
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 Berkline/Benchcraft
Berkline/BenchCraft Holdings LLC, along with five subsidiaries,
filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-11369)
so the couch maker that specializes in home theaters can
liquidate.
Berkline/Benchcraft is a unit of turnaround specialist Sun Capital
Partners Inc. Until their decision to liquidate, the Debtors,
with their "Berkline" and "Benchcraft" brands, held a number five
market share and had a growing presence in home theater seating
including reclining sofas, love seats, and sectionals.
In February, Berkline hired FTI Consulting Inc. to help it
restructure and find a buyer. When Berkline was unable to sell
itself, the Company decided to liquidate and file for bankruptcy.
Berkline has a $140 million second-lien loan that is mostly owed
to its parent, SCSF Furniture LLC, which isn't in bankruptcy. A
total of $15 million is owed on a first lien term loan and
revolver from lenders led by Wells Fargo Capital Finance, LLC, as
administrative agent. The Debtors also owe $12.5 million under
unsecured subordinated notes.
Kenneth J. Enos, Esq., and Michael R. Nestor, Esq., at Young,
Conaway, Stargatt & Taylor, represent the Debtors in the
Chapter 11 case. Attorneys at Morgan, Lewis & Bockius LLP serve
as co-counsel. FTI Consulting is the advisor. Epiq Bankruptcy
Solutions is the claims and notice agent.
BERKLINE/BENCHCRAFT: Faces Suit for No Notice of Factory Shutdown
-----------------------------------------------------------------
Larry Thomas at Furniture Today reports that two former employees
of Berkline have filed a lawsuit in conjunction with the Company's
bankruptcy case that accuses Berkline of violating federal law by
failing to give 60 days notice prior to closing its factory.
The workers commenced an adversary proceeding claiming that the
Company violated the Worker Adjustment and Retraining Notification
Act when it suddenly closed its Morristown, Tenn., factory in late
March. The employees, Robert Rose and Ronald Seme, are seeking
class action status for their suit. The employees says they are
entitled to 60 days wages and benefits, and asks the court to
designate the payment as a wage priority claim in Berkline's
Chapter 11 bankruptcy case.
Sun Capital Partners, Berkline's majority owner, also was named as
a defendant. The suit claims Sun Capital "blocked outside
financing for Berkline" and prevented the company from being sold
as a going concern.
Furniture Today notes that Mr. Rose was one of several employees
who filed suits in U.S. District Court in April that also accused
Berkline of violating the WARN Act. Those cases have been put on
hold until the bankruptcy case has been resolved.
About Berkline/Benchcraft
Berkline/BenchCraft Holdings LLC, along with five subsidiaries,
filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-11369)
so the couch maker that specializes in home theaters can
liquidate.
Berkline/Benchcraft is a unit of turnaround specialist Sun Capital
Partners Inc. Until their decision to liquidate, the Debtors,
with their "Berkline" and "Benchcraft" brands, held a number five
market share and had a growing presence in home theater seating
including reclining sofas, love seats, and sectionals.
In February, Berkline hired FTI Consulting Inc. to help it
restructure and find a buyer. When Berkline was unable to sell
itself, the Company decided to liquidate and file for bankruptcy.
Berkline has a $140 million, second-lien loan that is mostly owed
to its parent, SCSF Furniture LLC, which isn't in bankruptcy. A
total of $15 million is owed on a first lien term loan and
revolver from lenders led by Wells Fargo Capital Finance, LLC, as
administrative agent. The Debtors also owe $12.5 million under
unsecured subordinated notes.
Kenneth J. Enos, Esq., and Michael R. Nestor, Esq., at Young,
Conaway, Stargatt & Taylor, represent the Debtors in the Chapter
11 case. Attorneys at Morgan, Lewis & Bockius LLP serve as co-
counsel. FTI Consulting is the advisor. Epiq Bankruptcy
Solutions is the claims and notice agent.
BERNARD L. MADOFF: Trustee Reaches Deal With Fairfield Sentry
-------------------------------------------------------------
Kenneth M Krys and Joanna Lau of KRyS Global, the Joint
Liquidators of Fairfield Sentry Ltd., Fairfield Sigma Ltd. and
Fairfield Lambda Ltd. has entered a compromise with Irving H.
Picard, the Trustee for the liquidation of Bernard L. Madoff
Investment Securities LLC, to resolve the matters in dispute
between the Fairfield Funds and the BLMIS Trustee.
As background, the BLMIS Trustee filed a complaint in New York
against the Fairfield Funds and other entities asserting that the
Fairfield Funds were liable to the BLMIS estate for the monies
Fairfield Sentry withdrew from BLMIS in the 6 years before
December 2008, totaling in excess of $3 Billion. In turn,
Fairfield Sentry had timely filed customer claims against the
BLMIS estate pursuant to the Securities Investor Protection Act,
which, based on the method for calculating such claims as employed
by the BLMIS Trustee and as approved by the U.S. Bankruptcy Court,
total approximately $1.2 billion. The BLMIS Trustee has asserted,
under applicable provisions of the U.S. Bankruptcy Code, that
Fairfield Sentry's claims should be disallowed unless and until it
satisfies its entire liability to the BLMIS estate.
The settlement resolves the parties' claims against each other,
thereby avoiding contentious, costly and uncertain litigation, and
it provides a structure that enables the Joint Liquidators and the
BLMIS Trustee to work jointly and cooperatively in seeking and
obtaining recoveries which will enhance their respective estates
for the benefit of their respective stakeholders.
The general terms of the settlement are such that certain pools of
litigation recoveries that are pursued by the Joint Liquidators
and the BLMIS Trustee will be shared depending on the nature of
those pools and other factors. In addition to the agreement to
share these assets, the Joint Liquidators and the BLMIS Trustee
will work together and cooperatively to maximize the assets that
are recovered for the benefit of their respective estates.
Pursuant to the agreement, the Joint Liquidators will pay $70
million from Fairfield Sentry's account to the BLMIS Trustee, and
in exchange the Trustee of BLMIS will allow a customer claim of
Fairfield Sentry in the amount of $230 million. The Joint
Liquidators will receive the principal benefit of litigation
recoveries from third party service providers of the Fairfield
Funds, with the exception of a smaller share of recoveries from
claims against their former investment manager and affiliates
thereof -- the Fairfield Greenwich Group and certain affiliates --
which claims will be assigned to the BLMIS Trustee.
With respect to the recoveries of redemptions from the Fairfield
Funds which are being pursued by the Joint Liquidators and the
BLMIS Trustee, the Joint Liquidators will receive from 85% to 40%
of such recoveries for the benefit of the Fairfield Funds'
estates, depending on the nature of the claim.
The agreement is subject to approval of the U.S. Bankruptcy Court
for the Southern District of New York and the Eastern Caribbean
Supreme Court in the British Virgin Islands.
Kenneth Krys, a licensed insolvency practitioner of the British
Virgin Islands and one of the Joint Liquidators of the Fairfield
Funds, said of the agreement with the BLMIS Trustee: "We are very
pleased with the result. These negotiations were hard given the
significant issues between the parties and took significant time
and resources to reach a conclusion. We are of a view that the
final result is very good for the stakeholders in the three
Fairfield Funds. It provides certainty to stakeholders as to how
recoveries will be received and allocated to the estates and will
allow the Joint Liquidators to now focus their efforts and
resources on recovery efforts rather than being hindered and
diverted by the impact that the claims by the BLMIS Trustee may
have on the Fairfield Funds' estates."
Forbes Hare (BVI) serves as general counsel to the Joint
Liquidators, and Brown Rudnick LLP serves as the Joint
Liquidators' U.S. counsel.
The Liquidators wish to acknowledge the efforts of the BLMIS
Trustee, Mr. Irving Picard, and those of his counsel at Baker
Hostetler LLP -- particularly Thomas Long and Mark Kornfeld -- in
reaching this important settlement.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping $50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970. The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims
agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
US$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.)
As of Feb. 18, 2011, a total of $6.85 billion in claims by
investors has been allowed, with $791.1 million to be paid by the
Securities Investor Protection Corp. Investors are expected to
receive additional distributions from money recovered by
Mr. Picard from lawsuits or settlements.
About Fairfield Sentry
Fairfield Sentry is being liquidated under the supervision of the
Commercial Division of the High Court of Justice in the British
Virgin Islands. It is one of the funds owned by the Fairfield
Greenwich Group, an investment firm founded in 1983 in New York
City.
Fairfield Sentry and other Greenwich funds had among the largest
exposures to the Bernard L. Madoff fraud.
Fairfield Sentry Limited, filed for Chapter 11 protection (Bankr.
S.D.N.Y. Case No. 10-13164) in June 2010.
Greenwich Sentry, L.P., and an affiliate filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. 10-16229) on Nov. 19, 2010,
hoping to settle lawsuits filed against it in connection with its
investments with Bernard L. 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.
BEVERLY PARK: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Beverly Park Associates LLC
4343 Roosevelt Way NE, #506
Seattle, WA 98105
Bankruptcy Case No.: 11-15398
Chapter 11 Petition Date: May 5, 2011
Court: U.S. Bankruptcy Court
Western District of Washington (Seattle)
Judge: Karen A. Overstreet
Debtor's Counsel: Larry B. Feinstein, Esq.
VORTMAN & FEINSTEIN
500 Union Street, Suite 500
Seattle, WA 98101
Tel: (206) 223-9595
E-mail: feinstein2010@gmail.com
Scheduled Assets: $1,200,181
Scheduled Debts: $320,000
The list of unsecured creditors filed together with its petition
does not contain any entry.
The petition was signed by Debra L. Wilson, managing member.
BIOLASE TECHNOLOGY: Annual Meeting of Stockholders Held
-------------------------------------------------------
Biolase Technology, Inc., made a slide presentation at its annual
meeting of stockholders held on May 5, 2011. The Company
demonstrated the progressive and biological hi-tech dentistry
using BIOLASE Waterlase Systems, including the new Waterlase iPlus
System. According to the Company, the BIOLASE brand is currently
known by over 80% of North American dentists and is growing
internationally. A copy of the Company's slide presentation is
available for free at http://is.gd/CJr7QC
About BIOLASE Technology
Irvine, Calif.-based BIOLASE Technology, Inc. (NASDAQ: BLTI)
-- http://www.biolase.com/-- is a dental laser company. The
Company develops, manufactures and markets Waterlase technology
and lasers and related products that advance the practice of
dentistry and medicine.
The Company reported a net loss of $12.02 million on
$24.58 million of products and services revenues for the year
ended Dec. 31, 2010, compared with a net loss of $2.95 million on
$42.14 million of products and services revenues during the prior
year.
The Company's balance sheet at Dec. 31, 2010, showed
$18.14 million in total assets, $21.19 million in total
liabilities and a $3.05 million total stockholders' deficit.
BDO USA, LLP raised substantial doubt about the Company's ability
to continue as a going concern. The accounting firm noted that
the Company has suffered recurring losses from operations, has had
declining revenues and has a working capital deficit at Dec. 31,
2010.
BLANCA GAMES: Continues Non-U.S. Online Poker Operations
--------------------------------------------------------
Blanca Games Inc., operator of online poker rooms Absolute Poker
and UB, said that it has ceased their U.S.-facing operations due
to recent legal developments in the United States. Absolute Poker
and UB, however, continue to operate their non-U.S.-facing
business.
"The company is currently restructuring and is focusing its
resources on consolidating its non-U.S., rest-of-the-world
operation and software business. In order to have a more
efficient and successful future business, an immediate need to
downsize and streamline operations significantly at both online
poker rooms has been required, " a statement by the Company said.
"The workforce has been liquidated, and the process of rehiring
approximately 20% of staff in key positions has commenced. All
affected employees have been informed of this necessary
restructure."
The Company added that a company spokesperson has addressed
erroneous reports that Blanca has filed for bankruptcy. "The
apparent confusion over this issue stems from the fact that Blanca
recently informed a debt holder, Madeira Fjord, that it was
terminating debt payments to, and its relationship with them. As
a result, Madeira Fjord apparently filed a notice of bankruptcy in
Norway. This notice has no negative impact upon Blanca, the
operating company, or its brands. As stated previously, Absolute
Poker and UB continue to operate their non-U.S. facing business
around the world."
Blanca said that for non-U.S. players, Absolute Poker and UB have
increased their maximum withdrawal limits to $1,000 for Visa
withdrawals and $500 for all other methods. "The number of
transactions being processed per day has been significantly
increased as well. Players are still restricted to one
transaction per week, but we are working to return non-U.S.
withdrawals to normal service levels as quickly as possible."
As confirmed earlier, the Company's legal counsel is in continuing
discussions this week with the U.S. Attorney's office to formalize
an agreement that would facilitate the return of funds to U.S.
players.
BLACK BULL: Schumacher Buys Bozeman Resort for $8.1 Million
-----------------------------------------------------------
Amanda Ricker at the Bozeman Daily Chronicle reports that
California real estate developer Rob Schumacher has bought Black
Bull Run subdivision and golf resort west of Bozeman, Montana, for
$8.1 million with financing from CrossHarbor Capital Partners.
The sale closed last month.
According to the report, in March, U.S. Bankruptcy Judge Ralph
Kirsher approved a 11 U.S.C. Sec. 363 bankruptcy sale of Black
Bull. Mr. Schumacher was the highest bidder at the auction.
Proceeds of the sale first went to pay $2.1 million in
construction liens and then to pay the bank mortgage, as called
for in Montana law.
The federal government, the Chronicle relates, closed Black Bull's
primary lender, La Jolla Bank, last year and Black Bull's
construction loan was sold to OneWest Bank. The Debtor owed
OneWest bank more than $31 million.
About Black Bull
Bozeman, Montana-based Black Bull Run Development LLC, filed for
Chapter 11 bankruptcy protection on March 26, 2010 (Bankr. D.
Mont. Case No. 10-60593). James A. Patten, Esq., who has an
office in Billings, Montana, assists the Company in its
restructuring effort. According to the schedules, the Company has
assets of $16,317,641, and total debts of $42,764,571.
In July 2010, the Court converted Black Bull's chapter 11 case to
one under Chapter 7 of the Bankruptcy Code.
BLOCKBUSTER INC: Dish to Reopen 2 Stores in Orange County
---------------------------------------------------------
Los Angeles Business reports that two Blockbuster stores in Orange
County, California, that were shut after the video rental chain
declared bankruptcy last fall will reopen in early May. According
to the report, the recently closed stores at 5341 Warner Ave. in
Huntington Beach and 32361 Golden Lantern in Laguna Niguel will
reopen soon, the Orange County Register said, citing Dish
spokesman Marc Lumpkin.
About Blockbuster Inc.
Based in Dallas, Texas, Blockbuster Inc. (Pink Sheets: BLOKA,
BLOKB) -- http://www.blockbuster.com/-- is a global provider of
rental and retail movie and game entertainment. It has a library
of more than 125,000 movie and game titles.
Blockbuster Inc. and 12 U.S. affiliates initiated Chapter 11
bankruptcy proceedings with a pre-arranged reorganization plan
in Manhattan (Bankr. S.D.N.Y. Case No. 10-14997) on Sept. 23,
2010. It disclosed assets of $1 billion and debts of $1.4 billion
at the time of the filing.
Blockbuster's non-U.S. operations and its domestic and
international franchisees, all of which are legally separate
entities, were not included in the filings and are not parties to
the Chapter 11 proceedings.
Martin A. Sosland, Esq., and Stephen Karotkin, Esq., at Weil,
Gotshal & Manges, serve as counsel to the Debtors. Rothschild
Inc. is the financial advisor. Alvarez & Marsal is the
restructuring advisor with A&M managing director Jeffery J.
Stegenga as chief restructuring officer. Kurtzman Carson
Consultants LLC is the claims and notice agent.
A steering group of senior secured noteholders is represented by
James P. Seery, Esq., and Paul S. Caruso, Esq., at Sidley Austin
LLP. U.S. Bank National Association as trustee and collateral
agent for the senior secured notes is represented by David
McCarty, Esq., and Kyle Mathews, Esq., at Sheppard Mullin Richter
& Hampton LLP. BDO Consulting is the financial advisor for U.S.
Bank.
Lenders led by Wilmington Trust FSB are providing the DIP
financing. The DIP Agent is represented by Peter Neckles, Esq.
and Alexandra Margolis, Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP, in New York.
The Official Committee of Unsecured Creditors has retained Cooley
LLP as its counsel.
The Bank of New York Trust Company, N.A., as trustee under that
certain indenture, dated as of Aug. 20, 2004, with respect to the
9% Senior Subordinated Notes due 2012 issued by Blockbuster Inc.,
is represented by Edward P. Zujkowski, Esq., at Emmet, Marvin &
Martin, LLP.
The Ad Hoc Studio Committee of Blockbuster Inc. et al. is
represented by Robert J. Feinstein, Esq., at Pachulski Stang Ziehl
& Jones LLP.
Blockbuster on Feb. 21, 2011, entered into an Asset Purchase and
Sale Agreement providing for the sale of substantially all of
their assets or the proceeds of those assets to a newly formed
entity named Cobalt Video Holdco LLC. For purposes of entering
into the Purchase Agreement, the Purchaser was established by
Monarch Alternative Capital LP, Owl Creek Asset Management LP,
Stonehill Capital Management, LLC, and Varde Partners, Inc. who
collectively hold more than 50% of the Senior Secured Notes and
each of which is a member of the Steering Committee. Cobalt Video
Holdco LLC, the stalking horse purchaser, was represented by Mark
Shinderman, Esq., at Milbank, Tweed, Hadley & McCloy LLP.
The auction was held earlier in April and Dish Network Corp. won
with an offer having a gross value of $320 million. Dish said it
expects to pay $228 million cash after adjustments for
Blockbuster's cash and inventory.
BOMBARDIER INC: Fitch Affirms 'BB+' Issuer Default Rating
---------------------------------------------------------
Fitch Ratings has affirmed the ratings for Bombardier Inc. (BBD)
at 'BB+' and revised the Rating Outlook to Stable from Negative.
The revision of the Outlook reflects higher than anticipated free
cash flow in fiscal 2011 and reduced concerns as to BBD's ability
to manage its leverage and liquidity while it addresses continued
weakness in parts of its aerospace markets and invests in new
aircraft programs. Previously, there were significant
uncertainties about global economic growth, demand trends for
business jets and regional aircraft, order activity at Bombardier
Transportation (BT), BBD's margin performance, and the impact of
these concerns on BBD's operating cash flow. These risks have not
been entirely eliminated, but aerospace markets are beginning to
stabilize, and BBD has effectively managed its cost structure,
including a reduction in production capacity at Bombardier
Aerospace (BA), enough to mitigate the negative impact on margins
from lower sales during the past two years. As a result, Fitch
anticipates that BBD will generate sufficient cash flow to support
new aerospace programs and maintain high cash balances. The
ratings are supported by the company's business diversification,
leading market positions, a substantial backlog at BT that helps
to buffer volatility in orders, and a conservative debt structure.
Fitch views BBD's leverage as within a normal range for the
current low point in the aerospace cycle. At Jan. 31, 2011
debt/EBITDA was 3.1 times (x) compared to 2.6x one year earlier.
The increase reflects lower sales and net debt issuance of
approximately $500 million during fiscal 2011. The debt issuance
contributed to an increase in cash balances which totaled nearly
$4.2 billion at Jan. 31, 2011. Credit metrics may not improve
until demand fully recovers for business jets and regional
aircraft, possibly in 2012. BBD's leverage also reflects cash
deployment to develop new aerospace programs including the
CSeries, Learjet 85 and Global 7000 and 8000 aircraft. These
programs are largely responsible for high capital spending at BA
which BBD projects at $1.5 billion in calendar 2011 compared to
$956 million in fiscal 2011 and $611 million in fiscal 2010. High
spending could continue through the next two to three years before
entry into service scheduled in 2013 for the CSeries.
Free cash flow after dividends in fiscal 2011 totaled $387 million
compared to negative free cash flow of $431 million in fiscal
2010. Much of the increase was due to changes in working capital.
Free cash flow could fluctuate around a neutral range during the
next couple of years as BBD uses operating cash flow to fund
capital expenditures. Free cash flow also includes the impact of
dividends ($197 million in fiscal 2011) and large pension
contribution of $437 million in fiscal 2011. BBD plans to
contribute nearly the same amount in calendar 2011. The company's
net pension obligation increased to $1.6 billion at Dec. 31, 2010
from $1.5 billion one year earlier due to a decline in the
discount rate which offset positive asset returns.
Free cash flow is typically positive at BT, which operates in more
stable markets than BA. There continue to be concerns about the
stability of BT's rail markets, especially in Europe, related to
sovereign debt risks and pressures on government budgets. However,
economic and environmental benefits of rail transportation, and a
need for infrastructure in international markets, are likely to
support long-term demand. BT's orders were strong in fiscal 2011
and totaled $14.3 billion, up from $9.6 billion in fiscal 2010,
and contributed to a high backlog of more than $33 billion.
BA anticipates that business jet deliveries in calendar 2011 will
be up slightly but that commercial aircraft deliveries will be
down (roughly flat if annualized for the 11-month forecast period;
BBD plans to change its year-end to Dec. 31, subject to approval
by its Board of Directors). The forecast is slightly more positive
than Fitch's industry forecast which assumes the overall market
will remain weak until 2012. However, BA has a proportionally
larger market presence for larger business jets than for light
jets, and demand for large jets has fared better through the
downturn than smaller jets. BA's backlogs for turboprops and light
business jets are below sustainable levels at current production
rates, which could potentially result in production cuts during
calendar 2011 if orders are not received early in the year.
Business jet utilization and used-jet inventories have been
improving but remain at weak levels.
Rating concerns include low margins at BA, project risk on
Transportation contracts, the challenge of managing foreign
currency risks, and high expenditures for the development of new
aircraft. BA's largest new aircraft program is the CSeries which
carries risks related to execution, customer demand, competitive
responses, and the performance of new technologies. The aircraft
includes Pratt & Whitney's GTF engine technology which has gained
increasing market acceptance in recent months. Rating concerns
also include contingent liabilities related to aircraft financing.
BBD's financing obligations are mitigated by the timing of the
liabilities, which are spread out over time.
The ratings or Outlook could be positively affected if margins
improve at BA, new-aircraft programs are executed successfully,
and free cash flow eventually increases from expected levels. Over
the long term, BBD intends to strengthen its financial position in
order to reduce its cost of funds and improve its financial and
strategic flexibility. The ratings or Outlook could be negatively
affected if weak demand for business jets and commercial aircraft
impairs operating results and liquidity, or if BBD is unable to
maintain high market shares at BA and BT.
BBD's liquidity increased during fiscal 2011, reflecting positive
free cash flow and net debt issuance. At Jan. 31, 2011, liquidity
included approximately $4.2 billion of unrestricted cash balances
and availability under a $500 million bank revolver that matures
in September 2011. Cash balances do not include $676 million
of restricted cash related to BBD's letter of credit (LOC)
facilities. Restricted cash balances are not available for
liquidity purposes or for the benefit of unsecured bondholders.
Scheduled annual debt maturities are modest and do not exceed
$173 million annually prior to calendar 2016. BBD has increasingly
used off-balance sheet debt to support its liquidity, including
sale-leaseback facilities used to fund inventories of used
business jets. At Jan. 31, 2011, usage under these facilities
totaled $219 million. BBD's aircraft inventories, including on-
balance sheet inventory and sale-leaseback facilities, have
declined but remain elevated compared to historical levels. BBD's
bank facilities contain financial covenants including various
leverage and liquidity requirements for both BA and BT. The
covenants remain in compliance but could potentially become a
concern if BBD's results or liquidity are weaker than expected.
Fitch has affirmed BBD's ratings:
-- Issuer Default Rating (IDR) at 'BB+';
-- Senior unsecured revolving credit facility at 'BB+';
-- Senior unsecured debt at 'BB+';
-- Preferred stock at 'BB-'.
The ratings affect approximately $5 billion of debt and preferred
stock outstanding at Jan. 31, 2011.
BOWLNEBRASKA LLC: 8th Cir. Rejects Attempt to Avoid Lender's Lien
-----------------------------------------------------------------
WestLaw reports that even assuming that the familial relationship
that existed between the member of a limited liability company who
executed deeds of trust on the LLC's behalf and the notary who
acknowledged this member's signature made the acknowledgement
defective and prevented the recorded deeds of trust from providing
constructive notice of the deed of trust lender's interest in
property, the admittedly proper prepetition recording of notices
of default constituted constructive notice of the lender's deed of
trust liens. Thus, the LLC, in its capacity as a Chapter 11
debtor-in-possession, could not avoid the liens in the exercise of
its strong-arm powers as a hypothetical bona fide purchaser. In
re BowlNebraska, L.L.C., ---B.R.----, 2010 WL 2606336 (8th Cir.
BAP).
A copy of the Bankruptcy Appellate Panel's decision dated July 1,
2010, upholding the validity and enforceability of Omaha State
Bank's liens securing repayment of an $8 million loan to the
Debtor, is available at http://is.gd/hAU5aVfrom Leagle.com.
BowlNebraska, L.L.C., located in Elkhorn, Neb., sought chapter 11
protection (Bankr. D. Neb. Case No. 09-83398) on Dec. 18, 2009,
and is represented by T. Randall Wright, Esq., at Baird Holm LLP
in Omaha. The Debtor estimated its assets and debts at less than
$10 million at the time of the filing.
BRIGHAM EXPLORATION: Files Form 10-Q; Posts $1.55MM Net Income
--------------------------------------------------------------
Brigham Exploration Company filed with the U.S. Securities and
Exchange Commission a Form 10-Q reporting net income of $1.55
million on $40.60 million of revenue for the three months ended
March 31, 2011, compared with net income of $11.31 million on
$32.57 million of revenue for the same period a year ago.
The Company's balance sheet at March 31, 2011 showed $1.16 billion
in total assets, $565.38 million in total liabilities and $595.91
million total stockholders' equity.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/m467VR
About Brigham Exploration
Austin, Texas-based Brigham Exploration Company (NASDAQ: BEXP)
-- http://www.bexp3d.com/-- is an independent exploration,
development and production company that utilizes advanced
exploration, drilling and completion technologies to
systematically explore for, develop and produce domestic onshore
oil and natural gas reserves. In late 2007, the majority of the
Company's drilling capital expenditures shifted from its
historically active areas in the Onshore Gulf Coast, the Anadarko
Basin and West Texas to the Williston Basin in North Dakota and
Montana, where the Company is currently targeting the Bakken,
Three Forks and Red River objectives.
* * *
Brigham carries 'Caa1' corporate family and probability of default
ratings, with 'positive' outlook, from Moody's Investors Service.
It has a 'B' corporate credit rating, with 'stable' outlook from
Standard & Poor's Ratings Services. Moody's noted in September
2010 that while Brigham's recent results and 2010-11 drilling
program are positive and provide strong cash flow visibility, the
Company remains very small measured by production and proven
reserves.
The Company reported net income of $42.89 million on $169.72
million of revenue for the year ended Dec. 31, 2010, compared with
a net loss of $122.99 million on $70.34 million of revenue during
the prior year.
BRIGHAM EXPLORATION: Completes Infill Wells in Williston Basin
--------------------------------------------------------------
Brigham Exploration Company announced the successful completion of
additional infill wells in the Williston Basin, including the Brad
Olson 9-16 #3H and the Erickson 8-17 #3H, bringing the total
number of infill wells completed by the company to date to four at
an average early 24-hour peak rate of approximately 3,378 barrels
of oil equivalent. To date, Brigham has completed 59 consecutive
long lateral high frac stage wells in North Dakota at an average
early 24-hour peak rate of approximately 2,860 barrels of oil
equivalent. Brigham also announced that it has completed two
acreage transactions and has grown its Williston Basin acreage
position to approximately 371,200 net acres. As a result of the
acreage transactions and the positive results of the Johnson 30-19
#1H well in Montana, Brigham's core acreage position has grown 6%
to approximately 217,900 net acres. Brigham also provided an
update on its drilling and completion activities in the Williston
Basin.
Infill Well Success
Brigham announced the successful completion of the Brad Olson 9-16
#3H and the Erickson 8-17 #3H, both of which are located in
Brigham's Rough Rider project area in Williams County, North
Dakota. The Brad Olson 9-16 #3H is the third well completed in
the spacing unit, and is located, on average, approximately 1,390
feet from the Brad Olson 9-16 #2H, which was completed in November
2010. Based on production to date, all three wells in the Brad
Olson spacing unit are performing comparably. The Erickson 8-17
#3H is the second well completed in the spacing unit, and is
located, on average, approximately 1,790 feet from the Erickson 8-
17 #1H. Similar to the Brad Olson wells, no interference was
noted in the early production performance of the two wells.
Overall, infill drilling results continue to support Brigham's
view that at least four wells should be completed per spacing unit
per producing horizon in the Williston Basin.
Williston Basin Acreage Acquisitions
Brigham has completed two acreage transactions during 2011, and
currently has approximately 371,200 net acres in the Williston
Basin. The majority of the acreage additions are located in
McKenzie County, North Dakota and Richland County, Montana. In
total, Brigham now believes that is has 217,900 net core de-risked
acres, which reflects the aforementioned acreage transactions and
the acreage added to the core de-risked position in Montana based
on the success of its Johnson 30-19 #1H well announced last month.
Brigham now believes that its remaining core de-risked drilling
inventory is comprised of 763 net locations, which represents a 5%
increase from year-end.
Williston Basin Operated Drilling and Completion Update
Brigham's accelerated development of its acreage in North Dakota
and Montana is proceeding with four operated rigs drilling in
Rough Rider, two operated rigs drilling in Ross and one operated
rig drilling in Montana. Brigham's eighth dedicated operated rig
is expected to arrive this month and is anticipated to drill wells
in Rough Rider.
In North Dakota, Brigham is currently drilling two Three Forks
wells, one in its Rough Rider project area in Williams County and
the other in its Ross project area in Mountrail County. Two
additional Three Forks wells are anticipated to spud in Rough
Rider by mid-summer, both of which are in McKenzie County.
In Montana, Brigham recently completed drilling operations on the
Gobbs 17-8 #1H, which is located in Roosevelt County, and will
drill two consecutive additional wells in Montana, one of which is
located in Roosevelt County and the other in Richland County.
Brigham currently has three wells flowing back, three wells
fracing, two of which are being simultaneously fracture
stimulated, and 15 wells waiting on completion. One of the wells
currently flowing back is the Voss 21-11H, which is located in
Richland County, Montana.
Brigham has added its additional fracture stimulation capacity and
is now running two fully dedicated frac crews focused on
completing Brigham operated horizontal wells in the basin. Brigham
estimates that it will be capable of fracture stimulating and
bringing on line to production a minimum of eight wells per month
due to the efficiencies gained by simultaneous fracture
stimulations.
Management Comments
Bud Brigham, the Chairman, President and CEO, commented, "Despite
the record winter weather conditions experienced in the Williston
Basin, the first quarter 2011 was decidedly positive. During the
quarter we completed a new record Bakken well in North Dakota with
our Sorenson 29-32 #2H, and our Johnson 30-19 #1H well was a
record Bakken well in Montana. Further, the production
performance of our density wells continues to support our view
that we should be able to drill at least four wells per spacing
unit for each producing horizon, and in March, for the first time
in our history, our Williston Basin production exceeded an average
daily rate of 10,000 barrels of equivalent."
Bud Brigham continued, "Looking ahead to the second quarter and
the remainder of 2011, we are very excited to further delineate
the Three Forks economics in our Rough Rider project area. In
addition to our successful Rough Rider Three Forks well drilled in
2010, other operators have had recent successful Three Forks
completions in the area, so we're very excited about the next
three Three Forks wells we're drilling and completing in Rough
Rider over the next several quarters. Activity is also
accelerating in Montana, and by this summer we expect to complete
six additional Brigham operated wells. Successful well results in
both of these areas would substantially add to our core de-risked
drilling inventory."
Bud Brigham concluded, "We are excited about the recent addition
of pressure pumping capacity, which takes us up to two fully
dedicated crews running in the basin. The combination of
increasing to two fully dedicated crews while also beginning to
implement our efficiency initiatives in the field is beginning to
accelerate our completions as we are currently in the process of
fracing three wells that should positively impact our second
quarter 2011 production volumes. We''re also pleased with our
continued success in obtaining additional high quality acreage in
the basin and the associated continued expansion of our core de-
risked inventory. Finally, despite an increase in drilling and
completion costs to approximately $8.9 million per 30 frac stage
well, the continued strength in crude pricing results in a strong
estimated net present value per well of approximately $12.3
million, utilizing a 10% discount rate assuming recent strip
pricing and a 600,000 barrel of equivalent estimated ultimate
recovery."
About Brigham Exploration
Austin, Texas-based Brigham Exploration Company (NASDAQ: BEXP)
-- http://www.bexp3d.com/-- is an independent exploration,
development and production company that utilizes advanced
exploration, drilling and completion technologies to
systematically explore for, develop and produce domestic onshore
oil and natural gas reserves. In late 2007, the majority of the
Company's drilling capital expenditures shifted from its
historically active areas in the Onshore Gulf Coast, the Anadarko
Basin and West Texas to the Williston Basin in North Dakota and
Montana, where the Company is currently targeting the Bakken,
Three Forks and Red River objectives.
The Company's balance sheet at March 31, 2011, showed
$1.16 billion in total assets, $565.38 million in total
liabilities, and $595.91 million in stockholders' equity.
The Company reported net income of $42.89 million on
$169.72 million of revenue for the year ended Dec. 31, 2010,
compared with a net loss of $122.99 million on $70.34 million of
revenue during the prior year.
* * *
As reported by the TCR on Feb. 18, 2011, Moody's Investors Service
upgraded Brigham Exploration Company's Corporate Family Rating to
B3 from Caa1 and the Probability of Default Rating to B3 from
Caa1. "The primary driver for the upgrade is Brigham's strong
reserve and production growth and significant financial
flexibility," said Francis J. Messina, Moody's Vice President.
"The B3 Corporate Family Rating is prospective and it incorporates
Moody's expectation that the company will significantly increase
proved developed reserves and production rates over the next two
years."
BROOKE CORP: SEC Slaps Six Execs. of Fraud; Settlement Reached
--------------------------------------------------------------
The Securities and Exchange Commission on May 4 charged six former
leading executives affiliated with a Kansas-based financial
corporation with hiding critical information from investors and
conducting a financial fraud.
The SEC alleges that senior executives at Brooke Corporation and
two subsidiaries -- whose line of business was insurance agency
franchising and providing loans to franchisees -- misrepresented
their deteriorating financial condition in filings to investors
and other public statements in 2007 and 2008. Meanwhile, behind
the scenes they engaged in various undisclosed schemes to meet
almost weekly liquidity crises, and falsified reports and made
accounting maneuvers to conceal the rapid deterioration of the
loan portfolio.
Five of the six executives have agreed to settle the SEC's charges
against them. The Brooke companies are no longer in business.
"The unscrupulous senior corporate executives at Brooke
Corporation orchestrated a massive scheme to conceal the company's
deteriorating financial condition through virtually any means
necessary, including reporting inflated asset values, double-
pledging collateral, and diverting funds for improper uses," said
Robert Khuzami, Director of the SEC's Division of Enforcement.
"The fallout from their fraud had a devastating impact on the
livelihood of hundreds of insurance franchisees that depended on
Brooke and on the balance sheets of regional banks and other
lenders, all of whom mistakenly relied on the good faith and
honesty of these executives."
The SEC's complaint filed in federal court in Kansas charged two
brothers and four other leading executives at Brooke Corporation
and its two publicly-traded subsidiaries -- Brooke Capital
Corporation (insurance agency franchisor) and Aleritas Capital
Corporation (lender to insurance agency franchises and other
businesses).
* Robert D. Orr - founder and former chairman of the board of
Brooke Corporation, former CEO and chairman of the board of
Brooke Capital, former CFO of Aleritas.
* Leland G. Orr - former CEO, CFO, and vice chairman of the
board of Brooke Corporation, and former CFO of Brooke
Capital.
* Kyle L. Garst - former CEO, president, and member of the
board of Brooke Capital.
* Michael S. Hess - former CEO and member of the board of
Aleritas.
* Michael S. Lowry - former CEO and member of the board of
Aleritas.
* Travis W. Vrbas - former CFO of Brooke Corporation and Brooke
Capital.
According to the SEC's complaint, Brooke Capital's former
management inflated the number of franchise locations by including
failed and abandoned locations in company totals. They concealed
that the financial assistance to franchisees was so burdensome
that Robert and Leland Orr secretly borrowed funds received from
Brooke insurance customers to pay company operating expenses. That
money was supposed to be held in trust for payment of insurance
premiums. They also hid Brooke Capital's inability to timely pay
funds owed to profitable franchisees and creditors. Aleritas's
former management hid the company's inability to repurchase
millions of dollars of short-term loans sold to its network of
regional lenders. They sold or pledged the same loans as
collateral to multiple lenders, and improperly diverted payments
from borrowers for the company's operating expenses. Aleritas's
former management concealed the deterioration of the company's
loan portfolio by falsifying loan performance reports to lenders,
understating loan loss reserves, and failing to write-down its
residual interests in securitization and credit facility assets.
In October 2008, Brooke Corporation declared Chapter 11 bankruptcy
and suspended most of their operations. The companies were unable
to reorganize in bankruptcy. The rapid collapse of the Brooke
Companies had a devastating regional impact as hundreds of its
franchisees failed. As a result of losses suffered on Aleritas
loans, several regional banks also failed.
The SEC's complaint charges violations of, among other things, the
antifraud, reporting, record-keeping, and internal controls
provisions of the federal securities laws. The complaint seeks
permanent injunctions, officer and director bars, and monetary
remedies against the Brooke executives.
Robert Orr, Leland Orr, Hess, Lowry, and Vrbas agreed to settle
the charges against them without admitting or denying the SEC's
allegations. The settlements are subject to the approval of the
U.S. District Court for the District of Kansas. The executives
each consented to orders of permanent injunction and permanent
officer and director bars. Lowry agreed to pay a disgorgement of
$214,500, prejudgment interest of $24,004, and a $175,000 penalty.
Hess agreed to pay a $250,000 penalty, and Vrbas agreed to pay a
$130,000 penalty. Robert Orr and Leland Orr agreed to pay
penalties and disgorgement in amounts to be determined by the
court.
The SEC's case against Garst continues in litigation.
The SEC acknowledges the assistance and cooperation of the Office
of the Kansas Securities Commissioner, the Kansas City Field
Office of the Federal Bureau of Investigation, and the U.S.
Attorney's Office for the District of Kansas.
The SEC's investigation was conducted by Kurt Gottschall, John
Martin, Jennifer Ostrom, and Tracy Bowen of the Denver Regional
Office. The SEC's litigation will be led by Stephen McKenna.
About Brooke Corp.
Albert Riederer was appointed special master of Brooke Corporation
in prepetition federal court proceedings. Shortly after Brooke
Corporation filed for Chapter 11 bankruptcy protection (Bankr. D.
Kansas Lead Case No. 08-22786) on October 28, 2008, Mr. Riederer
was appointed Chapter 11 Trustee. When the case was converted to
Chapter 7 on June 29, 2009, Mr. Riederer was appointed Chapter 7
Trustee. On October 29, 2008, the Court granted a motion to
jointly administer the bankruptcies of Brooke Corporation, Brooke
Capital Corporation, and Brooke Investment, Inc., with the Brooke
Corporation bankruptcy case being the lead case.
CARBON RESOURCES: Court Sets June 6 Disclosure Statement Hearing
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Mexico will hold
a hearing on June 6, 2011, to consider approval of the disclosure
statement explaining Carbon Resources, LLC's proposed Chapter 11
plan dated April 18, 2011.
Under the Plan, holders of unsecured claims will receive 75% of
their allowed claims on the effective date of the Plan and the
remaining 25% within one year after the Effective Date. A copy of
the Disclosure Statement is available for free at:
http://bankrupt.com/misc/CarbonResources_Plan_Outline.pdf
Sandia Park, New Mexico-based Carbon Resources LLC filed for
Chapter 11 bankruptcy protection (Bankr. N.M. Case No. 10-16104)
on Dec. 10, 2010. M.J. Keefe, Esq., at Gilpin & Keefe, PC, and
the law firm of James M. LaGanke P.L.L.C., serve 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.
CARIBE MEDIA: Wins Interim Cash Use Approval
--------------------------------------------
Bill Rochelle, Bloomberg News' bankruptcy columnist, reports that
Caribe Media Inc. received interim approval to use cash
representing collateral for secured lenders owed $126.5 million.
The final hearing on financing is set for May 25. The authority
to use cash carried with it an obligation to file a Chapter 11
plan by Sept. 30 and confirm the plan by Nov. 30. If there's a
sale, the lenders were given the right to bid their secured claims
rather than cash in the event of auction.
The May 6, 2011 edition of the Troubled Company Reporter reported
on Caribe Media's filing of a motion to access cash collateral.
Caribe Media and affiliate CII Acquisition Holding Inc. are
borrowers under a US$165 million March 2006 credit agreement with
Lehman Brothers Inc., and Banc of America Securities LLC, as joint
lead arrangers and joint bookrunners, Bank of America NA as
syndication agent, Wachovia Bank NA as documentation agent, Cantor
Fitzgerald Securities as administrative agent, and various
lenders. As of the petition date, the Debtors owed US$127 million
under the loan. The loan is secured by the Debtors' assets.
Caribe Media also issued US$45 million in 10% senior subordinated
notes to and WCAS Capital Partners IV LP, which notes mature on
March 31, 2014. As of the petition date, the Debtors owe
US$57 million under the notes. Obligations under the notes are
subordinate and junior in right of payment to the obligations
under the Cantor loan.
As of May 1, 2011, the Debtors held more than US$1.3 million in
unrestricted cash. The Debtors' projected 26-week cash flow
ending the week of Oct. 23, 2011, projects that they will have
positive cash flow during the 26-week reporting period.
The Debtors said in court papers that even in light of their
anticipated professional fees related to the Chapter 11 cases,
their projections show a net positive cash flow of US$5.4 million.
According to the Debtors, not only does this positive operational
cash flow demonstrate a sufficient cushion to protect the lenders'
interests in the cash collateral, but it demonstrates the need for
the Debtors to use cash collateral to meet their projections.
The Debtors are separately seeking permission to pay general
unsecured claims not to exceed US$500,000 in the aggregate without
further Court order. These claims represent obligations the
Debtors incurred to unsecured creditors who provide services that
support their continued operations.
The Debtors said that without ready access to cash collateral, the
parties would not be paid, and the Debtors' business would be
negatively impacted.
The Debtors are also seeking permission to pay US$100,000 in
prepetition taxes and fees through the petition date.
The Debtors said the lenders have consented to their use of cash
collateral.
The Debtors will provide the lenders adequate protection, subject
to a carve-out for professional and U.S. Trustee fees, for their
use of cash collateral. They will also pay necessary expenses of
the lenders' professionals.
Chris Batson, the chief financial offer to Caribe Media and CII
Acquisition, said in court papers that declining revenues and
increasing competition caused the Company to breach loan covenants
in November 2010. He said an ad hoc committee of senior secured
prepetition lenders wants the Debtors to pursue US$44.2 million in
dividend payments to certain Local Insight entities that the ad
hoc committee believes were fraudulent conveyances. The ad hoc
committee threatened to accelerate the loans if the Debtors won't
file for bankruptcy by May 3 to preserve their purported
fraudulent conveyance causes of action.
Since November 2010, the Debtors have engaged in discussions and
negotiations with counsel and advisors for Cantor and WCAS
regarding the terms of a comprehensive restructuring. Although
the parties were unable to reach consensus and commence the
bankruptcy pursuant to a lockup and support deal, the Debtors
believe they are close to achieving a consensual reorganization.
The prepetition agent's professionals in the Debtors' case are
Kaye Scholer LLP, Potter Anderson & Corroon, LLP, and Loughlin
Meghji + Company.
* * *
Lance Duroni at Bankruptcy Law360 reports that an attorney for
Caribe Media Inc. said that the Company was on the cusp of
reaching a restructuring agreement with secured lenders that
prodded the Company into bankruptcy in Delaware.
About Caribe Media
Caribe Media Inc. owns publication rights for certain print and
Internet directories in the Dominican Republic and Puerto Rico.
Caribe Media owns 60% of Axesa Servicios de Informacion, S. en C.,
a Yellow Pages publisher in Puerto Rico and the official publisher
of all telephone directories for Puerto Rico Telephone Company,
Inc., the largest local exchange carrier in Puerto Rico, and $100%
of Caribe Servicios de Informacion Dominicana, S.A., the sole
directory publisher in the Dominican Republic with the exclusive
right to publish under the brand of Codetel, the largest telecom
operator in the Dominican Republic. Caribe Media is wholly owned
by CII Acquisition Holding Inc. They are affiliates of Local
Insight Media Holdings, Inc.
Caribe Media and CII filed for Chapter 11 bankruptcy protection
(Bankr. D. Del. Case Nos. 11-11387 and 11-11388) on May 3, 2011.
Caribe Media is being represented by lawyers at Kirkland & Ellis
LLP and Pachulski Stang Ziehl & Jones LLP as bankruptcy counsel.
Lawyers at Curtis, Mallet-Prevost, Colt & Mosle LLP will serve as
conflicts counsel.
Local Insight Media is also a debtor in its own Chapter 11 pending
in Delaware. Local Insight Media filed in 2010. It is also being
represented by lawyers at Kirkland and Pachulski.
CARITAS HEALTH: Firm Shows Plan for St. John's Hospital Site
------------------------------------------------------------
The Queens Gazette reports that a representative for a Brooklyn
architectural firm has presented members of the Community Board 4
Land Use and Zoning committee with new plans for development of
the former St. John's Hospital site. Project architect Yuriy
Bolyshak, representing NSC Architecture, presented a proposal to
transform the former 227-bed hospital facility at 90-02 Queens
Blvd. into a mixed-use development featuring retail and office
space, apartments, medical offices and an ambulatory diagnostic
clinic.
The city Department of Buildings last month denied building owner,
Joshua Guttman, permission to build a mixed-use development at the
site. Mr. Guttman has since hired NSC to develop new plans for
the development. St. John's Hospital closed amid protest in 2009
when parent company, Caritas, filed for Chapter 11 bankruptcy
after racking up more than $100 million in debt. Caritas was also
sole owner of Mary Immaculate Hospital in Jamaica that closed its
doors at the same time.
About Caritas Health Care
Caritas Health Care Inc. was the owner of Mary Immaculate Hospital
and St. John's Queens Hospital. Caritas, created by Wyckoff
Heights Medical Center, purchased the two hospitals in a
bankruptcy sale in early 2007 from St. Vincent Catholic Medical
Centers of New York. St. John's has 227 generate acute-care beds
while Mary Immaculate has 189.
Caritas Health Care, Inc., and eight of its affiliates sought
chapter 11 protection (Bankr. E.D.N.Y., Case No. 09-40901) on
Feb. 6, 2009. Jeffrey W. Levitan, Esq., and Adam T. Berkowitz,
Esq., at Proskauer Rose, LLP, represent the Debtors. Martin G.
Bunin, Esq., and Craig E. Freeman, Esq., at Alston & Bird LLP,
represent the official committee of unsecured creditors.
Caritas sold the hospitals to Joshua Guttman in November 2009 for
$17.7 million.
CBBT L.P.: Keelings Obtain Relief From Stay Over Nonexempt Asset
----------------------------------------------------------------
Bankruptcy Judge Letitia Z. Paul granted the request of J. G. and
Sonya Keeling for relief from the stay in the bankruptcy case of
CBBT L.P. regarding nonexempt property. The Keelings have filed a
proof of claim, in the amount of $1,980,433.14. The Keelings seek
relief from stay for cause, on grounds the Debtor filed for
bankruptcy in bad faith to obtain an unfair advantage in a two-
party dispute, and under Section 362(d)(3) of the Bankruptcy Code
for failure of the Debtor to make payments at the nondefault rate
of interest or propose a feasible plan within 90 days after the
petition date.
During 2005, the Keelings sold the remaining portion of their
real property located in Chambers County, Texas, to the Debtor,
for $3 million. The Debtor executed a promissory note, in the
original principal amount of $2.5 million, payable to the
Keelings. The note required the Debtor to make payments, based on
a 15-year amortization, for five years, with a balloon payment due
at maturity on Nov. 29, 2010. The note bore an interest rate of
5% during its term, and 18% after maturity. The amount of the
monthly payment due each month under the note prior to maturity
was $19,769.84.
During 2010, the Debtor sought to refinance the Keelings' note but
was unable to obtain outside financing. The Debtor attempted to
negotiate for an extension from the Keelings.
On April 4, 2011, the Debtor filed its first amended Chapter 11
plan. In the plan, the Debtor proposes to commence making
payments to the Keelings, based on a 5% interest rate, in August
2011. The Debtor proposes either to refinance the debt by August
2011, to sell the property by executing an earnest money contract
by September 2011, or to sell the property at an auction by
December 2011. The Debtor's broker has been negotiating with
several potential buyers, but none of the potential buyers has
executed an earnest money contract or performed due diligence with
respect to the property. The Debtor has made no payment to the
Keelings since October 2010.
A copy of the Court's May 9, 2011 Memorandum Opinion is available
at http://is.gd/hKJ12jfrom Leagle.com.
CBBT, L.P., filed for Chapter 11 Bankruptcy (Bankr. S.D. Tex. Case
No. 11-30036) on Jan. 3, 2011, disclosing under $1 million in
estimated assets and debts. The Debtor is a single asset real
estate entity. The Debtor's property consists of approximately
145 acres of land, approximately 50 acres of which is submerged
under water. The submerged lands, which he described as "finger
lakes," are connected to Cedar Bayou, a navigable water, and allow
the property to be used for the storing and staging of tugboats
and barges, as well as for the loading and unloading of barges.
CELL THERAPEUTICS: Has $9.9-Mil. Operating Loss in March
--------------------------------------------------------
Cell Therapeutics, Inc., is providing the information pursuant to
a request from the Italian securities regulatory authority,
CONSOB, pursuant to Article 114, Section 5 of the Unified
Financial Act, that the Company issue at the end of each month a
press release providing a monthly update of certain information
relating to the Company's management and financial situation.
According to the report, the Company incurred a $9,941,000 loss
from operations and negative EBITDA of $40,675,000 in March.
About Cell Therapeutics
Headquartered in Seattle, Washington, Cell Therapeutics, Inc.
(NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a
biopharmaceutical company committed to developing an integrated
portfolio of oncology products aimed at making cancer more
treatable.
The Company reported a net loss of $82.64 million on $319,000 of
revenue for the 12 months ended Dec. 31, 2010, compared with a net
loss of $82.64 million on $80,000 of total revenue during the same
period in 2009.
The Company's balance sheet at March 31, 2011 showed
$60.92 million in total assets, $43.11 million in total
liabilities, $13.46 million in common stock purchase warrants and
$4.35 million total shareholders' equity.
Marcum LLP, in San Francisco, Calif., expressed substantial doubt
about the Company's ability to continue as a going concern in its
audit reports for the financial statements for 2009 and 2010. The
independent auditors noted that the Company has incurred losses
since its inception, and has a working capital deficiency of
approximately $14.2 million at Dec. 31, 2010.
CHEMTURA CORP: Has $7-Mil. Quarterly Profit After Emergence
-----------------------------------------------------------
Chemtura Corporation posted financial results for the first
quarter ended March 31, 2011. It also filed its Quarterly Report
on Form 10-Q with the Securities and Exchange Commission for the
quarter ended March 31, 2011. For the first quarter 2011,
Chemtura reported net sales of $699 million and net earnings from
continuing operations on a GAAP basis of $7 million, or $0.07 per
share. Net earnings on a managed basis were $14 million, or $0.14
per share.
I am pleased to report our return to profitability. Our first
quarter results provide the solid start to 2011 that we needed,"
commented Craig A. Rogerson, Chairman, President and CEO. "With
the reorganization costs almost behind us, we returned to
profitability on a GAAP basis. Importantly, we made significant
progress in recovering the increases in raw material costs and
together with the strength of our bromine franchise, our year-on-
year changes in selling prices exceeded year-on-year changes in
raw material cost by $19 million in the quarter.
"During the first quarter, we made two important investments,"
noted Mr. Rogerson. "The formation of the ISEM joint venture in
January will provide us access to two commercialized products and
accelerate the development and commercialization of new active
ingredients and molecules to build our product pipeline for our
Chemtura AgroSolutions segment. Our recently formed DayStar
Materials joint venture will manufacture and sell high purity
metal organic precursors for the rapidly growing LED market,
utilizing our organometallic products and technologies within our
Industrial Engineered Products segment.
"Recently," Mr. Rogerson continued, "we have also made a decision
that will provide us the bromine capacity we need to continue to
serve the robust demand from the electronics industry while
supporting recovering demand from oil and gas production in the
Gulf of Mexico and insulation and furniture foam applications as
well as the developing requirement for mercury removal from
utility plant emissions. We have decided to defer the planned
idling of certain of our bromine and brine capacity at our South
Arkansas facility and will invest to improve the operating
efficiency of those assets. This creates additional opportunities
for earnings growth by our Industrial Engineered Products
segment."
Mr. Rogerson concluded: "With a robust first quarter behind us, we
are now focused on delivering year-on-year improvement again in
the second quarter, a tougher challenge than the first quarter as
it is always our strongest quarter of the year. Our industrial
segments are performing strongly and they are expected to offset
any softness in our Consumer Products business. Meanwhile, we
expect continued improvement from Chemtura AgroSolutions. In 2011,
Chemtura intends to progress by recording year-on-year improvement
in Adjusted EBITDA each quarter."
A full text copy of the Company's first quarter results is
available free at:
http://ResearchArchives.com/t/s?75f5
About Chemtura Corp.
Based in Middlebury, Connecticut, Chemtura Corporation --
http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a
global manufacturer and marketer of specialty chemicals, crop
protection products, and pool, spa and home care products.
Chemtura Corporation and 26 of its U.S. affiliates filed voluntary
petitions for relief under Chapter 11 (Bankr. S.D.N.Y. Case No.
09-11233) on March 18, 2009. The Debtors disclosed total assets
of $3.06 billion and total debts of $1.02 billion as of the
Chapter 11 filing.
Chemtura completed its financial restructuring and emerged from
protection under Chapter 11 in November 2010. In connection with
the emergence, reorganized Chemtura is now listed on the New York
Stock Exchange under the ticker "CHMT".
M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York,
served as bankruptcy counsel for the Debtors. Wolfblock LLP was
the Debtors' special counsel. The Debtors' auditors and
accountant were KPMG LLP; their investment bankers are Lazard
Freres & Co.; their strategic communications advisors were Joele
Frank, Wilkinson Brimmer Katcher; their business advisors were
Alvarez & Marsal LLC and Ray Dombrowski served as their chief
restructuring officer; and their claims and noticing agent was
Kurtzman Carson Consultants LLC.
The Official Committee of Equity Security Holders tapped
Jay Goffman, Esq., and David Turetsky, Esq., at Skadden Arps Slate
Meagher & Flom LLP, in New York, as counsel. the Official
Committee of Unsecured Creditors retained Daniel H. Golden, Esq.,
Philip C. Dublin, Esq., and Meredith A. Lahaie, Esq., at Akin Gump
Strauss Hauer & Feld LLP, in New York, as counsel.
CHINA FRUITS: Restates 2009 Annual Report to Correct Errors
-----------------------------------------------------------
China Fruits Corporation filed on May 3, 2011, Amendment No. 1 to
its Form 10-K for the fiscal year ended Dec. 31, 2009, to correct
errors in the presentation of the consolidated statements of
operations and the consolidated statements of cash flows regarding
the issues from discontinued operations.
According to the Company's management, the consolidated statement
of operation for 2009 was not properly presented according to ASC
205-20, Discontinued Operations, and the consolidated statement of
cash flows was not properly presented according to ASC 230,
Statement of Cash Flows, regarding cash flows from discontinued
operations. The Form 10-K was originally filed with the
Securities and Exchange Commission on April 15, 2010.
In addition, this Amendment No. 1 is being filed to incorporate
certain changes to the Company's financial statements and
corresponding amendments to the Item entitled "Management's
Discussion and Analysis of Financial Condition and Results of
Operations."
The Company reported a net loss from continuing operations of
$170,438 on $1.9 million of sales for 2009 (Restated), compared
with net income from continuing operations of $79,777 on
$1.7 million of sales for 2008.
Including discontinued operations, net loss was $246,361 for 2009,
compared with net income of $161,902 for 2008.
The Company's balance sheet at Dec. 31, 2009, showed $4.1 million
in total assets, $1.8 million in total liabilities, and
stockholders' equity of $2.3 million.
As reported in the TCR on April 21, 2010, Lake & Associates CPA's
LLC said that in 2009 the Company suffered accumulated deficit and
negative cash flow from operations that raised substantial doubt
about its ability to continue as a going concern.
A complete text of the Form 10-K/A is available for free at:
http://is.gd/2maD1g
Based in Jiang Xi Province, China, China Fruits Corporation was
incorporated in the State of Delaware on Jan. 6, 1993, as Vaxcel,
Inc. The Company is engaged in the manufacturing, trading and
distributing of fresh tangerine and other fresh fruits in the PRC.
CLICO (BAHAMAS): Creditors to Receive Payoff from Assets Sale
-------------------------------------------------------------
Neil Hhartnell at Tribune Business reports that CLICO (Bahamas)
liquidator is likely to recover around $40 million for Bahamian
creditors of the insolvent insurer, having reached a preliminary
sales agreement that, if concluded, will see the real estate
project accounting for 63% of its assets generate $50 million in
gross proceeds.
According to the report, U.S. court documents obtained by Tribune
Business show that Craig A. Gomez, the Baker Tilly Gomez
accountant and partner, has reached an agreement to sell the
remaining 400-plus acres of Florida's Wellington Preserve
development to J-5 Wellington Preserve, a Colorado-domiciled
company, for $40 million.
Together with an earlier deal to sell a 102.74-acre Wellington
Preserve land parcel to Zacara Farm LLC, a Delaware-incorporated
company, for $10 million, Mr. Gomez appears on course to realise
$50 million in total gross proceeds from the sale of Wellington
Preserve, the report says.
According to the report, with his Chapter 11 plan for reorganising
Wellington Preserve thought to be close to receiving the approval
of the south Florida district bankruptcy court, Mr. Gomez will
likely use the $10 million raised from the Zacara Farm sale to
pay-off all the project's US-based creditors. As a result, once
closing costs are accounted for, the $40 million from the sale to
J-5 Wellington Preserve will be repatriated to the Bahamas to help
satisfy the demands of CLICO (Bahamas) creditors.
In a previous court filing referring to the Zacara Farm sale, Mr.
Gomez said: "The $10 million purchase price is enough to pay all
closing costs and all claims which have been either listed or
filed, or for which mechanic's liens have been filed.
About CLICO (Bahamas)
CLICO (Bahamas) Limited, also known as British Fidelity Insurance
Company, Limited, is a Bahamian company that was involved in
life and health insurance, pensions and annuities.
CLICO has insolvency proceedings pending before the Commercial
Division of the Supreme Court of the Bahamas. The proceedings
were commenced February 2009. Craig A. Gomez, at Fowler White
Burnett, P.A., was appointed by the Bahamian court as liquidator
of CLICO.
Mr. Gomez filed a Chapter 15 bankruptcy petition for CLICO on
April 28, 2009 (Bankr. S.D. Fla. Case No. 09-17829), to seek the
U.S.'s recognition of the insolvency proceedings in the Bahamas as
the "foreign main proceeding." Judge A. Jay Cristol presides over
the case. Ronald G Neiwirth, Esq., represents Mr. Gomez.
Mr. Gomez estimated both assets and debts of between US$100
million and US$500 million for CLICO.
CMS ENERGY: Fitch Puts 'BB+' Rating to Unsecured Note Issuance
--------------------------------------------------------------
Fitch Ratings has assigned a rating of 'BB+' to CMS Energy Corp.'s
(CMS) $250 million issuance of 2.75% senior unsecured notes, due
May 15, 2014. Proceeds from the sale will be used for general
corporate purposes, including repayment of amounts drawn under the
$550 million revolving credit facility due March 31, 2016. The new
notes rank equally in right of payment with existing senior
unsecured obligations of CMS. The Rating Outlooks for CMS is
Stable.
Key drivers of CMS' rating include: ownership of a regulated
electric and gas utility, Consumers Energy Co. (Issuer Default
Rating [IDR] 'BBB-', Stable Outlook), that represents more than
90% of operating income; stable cash flow metrics; sufficient
liquidity; and, a supportive regulatory environment in Michigan
allowing for timely rate case filings, the continuation of
mechanisms for full and timely commodity cost recovery with
monthly cost of gas adjustments, and revenue decoupling.
Fitch anticipates a settlement in the Consumers Energy gas rate
case shortly, following a Feb. 8, 2011 requirement on behalf of
the Michigan Public Service Commission (MPSC) that Consumers
Energy indefinitely delay its plans for self-implementation. Fitch
does not believe there is any political motivation at this time to
amend the Energy Law passed in 2008, which to date is working
well. On November 4, 2010 the MPSC authorized Consumers Energy a
rate increase of $146 million and a ROE of 10.7% in its annual
electric rate case. The final authorization represented 97% of the
amount self-implemented six months earlier by the utility. Fitch
anticipates a new annual electric rate case to be filed in mid-
2011.
CMS' cash flow based metrics are consistent with Fitch's
guidelines for 'BB+' utility parent companies, with the ratios at
March 31, 2011, of EBITDA-to-interest at 3.6 times (x), debt-to-
EBITDA at 4.8x; and, funds from operation (FFO)-to-interest at
3.7x. Fitch expects cash flow credit metrics at CMS to remain
consistent with its current ratings. The main drivers of future
financial performance will be the outcome of rate orders at the
utility and long-term debt levels at CMS. Debt-to-capital was 71%
at March 31, 2011.
Rating concerns relate to: high leverage at CMS, including a
sizeable amount of stand-alone long-term debt of approximately
$2.1 billion (including Convertible Senior Notes) at March 31,
2011 which is structurally subordinated to that of its
subsidiaries; the significant five-year capital investment plan of
$6.4 billion, focused primarily on investments in regulated
operations; and, exposure to a local economy that despite
improving dynamics, still presents the utility with low growth
expectations and high unemployment.
In addition to a sizeable amount of stand-alone long-term debt, in
2010 CMS raised its common dividend twice, indicating to Fitch
that reducing the substantial parent debt is not a current
management priority. CMS relies on cash distributions from
Consumers Energy to service its debt obligations and pay its
common dividend.
CMS' capital spending plan is focused primarily on investments in
its regulated distribution and generation operations, in addition
to environmental and renewable projects. Fitch expects CMS to
downstream equity distributions to support Consumers Energy's
capital spending budget, and for Consumers Energy to access
external capital markets for further funding needs.
Fitch's credit concerns are partially offset by consolidated
liquidity which is sufficient to meet near-term funding
requirements, including manageable consolidated debt maturities
of $431 million in 2011, $434 million in 2012 and $587 million
in 2013. Fitch expects maturing debt to be funded with a
combination of internal cash generation and external debt
financings. At March 31, 2011, consolidated liquidity was
$1.7 billion, including $897 million of availability under
credit facilities, and $801 million in cash and cash equivalents.
Furthermore, Fitch expects Consumers Energy will continue to make
cash distributions to CMS to support parent debt and other cash
obligations.
On March 31, 2011, both the five-year $550 million credit facility
at CMS and the five-year $500 million credit facility at Consumers
Energy were renewed, notably in advance of the respective maturity
dates of April 2012 and March 2012, and demonstrating the
capability of the company to access the bank credit market and
execute five-year credit agreements. The new credit facilities
expire March 31, 2016.
CMS is a utility holding company whose primary subsidiary is
Consumers Energy, a regulated electric and gas utility serving
more than 3.5 million customers in Michigan's Lower Peninsula. CMS
also has operations in natural gas pipelines and independent power
production.
COMMPARTNERS HOLDING: Momentum Telecom Acquires VoIP Business
-------------------------------------------------------------
Momentum Telecom has acquired CommPartners -- a VoIP services
provider based in Las Vegas -- through an asset liquidation
process resulting from Chapter 11 bankruptcy. Momentum was the
highest bidder of several companies considering the acquisition of
CommPartners' assets.
"Our management team identified an excellent opportunity to
acquire the assets of another digital voice provider for
financially favorable terms, giving us the ability to grow our
customer base, leverage significant core technology assets to the
advantage of current and future customers, and continue building
leadership in this space," said Alan Creighton, chief executive
officer of Momentum. "We have invested heavily in the supporting
applications and processes to scale our hosted IP telephony
business, putting Momentum in a perfect position to acquire
smaller companies that need capital infusions to continue
servicing customers."
CommPartners currently supports approximately 200 reseller
customers and more than 27,000 hosted seats and SIP trunks. At
its peak, the company reported annual revenues of $77 million.
CommPartners has primarily serviced data VARs and other resellers
that provide hosted IP telephony to small and medium-sized
businesses, closely mirroring Momentum's focus on providing hosted
solutions to cable company and municipality subscribers throughout
the U.S.
"As a Momentum Telecom customer for more than two years, we can
vouch for the company's advanced technical features that greatly
reduce unnecessary complexities for providing digital voice
service," said Tenzin Gyaltsen, Cable Television Director at City
of San Bruno. "We are conscious of cost, voice quality and access
to technical customer service teams, and Momentum Telecom has
proven to be a very good partner on all accounts."
CommPartners will be absorbed into Momentum and be rebranded as
details of the ownership change are worked out. The Las Vegas
office will remain open and Momentum will maintain CommPartners'
core IP infrastructure and later integrate CommPartners' platform
with Momentum's platform which is currently hosted in Atlanta, GA.
Sales support, account management, Tier 2 and Tier 3 technical
support will be maintained in Las Vegas to create a strong
regional presence. Momentum has been delivering hosted IP
telephony service since 2005 and is CLEC certified in 45 states,
and with the acquisition now exceeds 100,000 lines -- making it
one of the largest wholesale providers of digital IP telephony
services.
"We are already in the process of moving quickly to contact
CommPartners' customers, introduce ourselves and ensure they know
we are assuming all current contracts and agreements," said Sarah
Pieri, Momentum's director of sales and marketing. "And we are
looking forward to introducing these customers to Momentum's
custom web portal that automates many of the most tedious and
problematic tasks -- such as provisioning -- as well as access to
our own proprietary analytics tools for verifying and measuring
voice quality, a solution that will greatly enhance their service
experience."
For Momentum's existing customers, with the current Atlanta-based
colocation providing multiple layers of redundancy -- and
operating at the highest levels of availability -- adding
additional measures of backup in the western half of the U.S. is
advantageous. The addition of CommPartners' Broadsoft platform in
Las Vegas enables Momentum to deliver a carrier class level of
geo-redundancy.
About Momentum
Momentum -- http://www.momentumwholesale.com/-- provides
independent cable operators, municipalities and managed services
providers throughout the U.S. private label residential and
business digital voice solutions and the most comprehensive
operational and managed support services for broadband and voice
available.
About CommPartners Holding
Las Vegas-based, CommPartners Holding Co. provides voice over
Internet protocol services, and other services, to businesses.
CommPartners Holding Co. together with its affiliates --
CommPartners Carrier Services Corp., CommPartners Network Services
LLC and CommPartners LLC -- filed for bankruptcy under Chapter 11
in the U.S. Bankruptcy Court in Nevada to block AT&T from shutting
off services for its network.
The Company said it has $8.5 million in assets and $6.3 million in
debts as of April 30, 2010.
Commpartners, LLC, filed its Chapter 11 petition (Bankr. D. Nev.
Case No. 10-20933) on June 13, 2010, estimating assets of up to
$50,000 and debts of up to $10,000,000.
Matthew C. Zirzow, Esq., at Gordon & Silver, Ltd., in Las Vegas,
serves as counsel to the Debtors.
CONTINENTALAFA: Payments to Staffing Firm Not Preferential
----------------------------------------------------------
ContinentalAFA Liquidation Trust, v. Human Resource Staffing LLC,
Adv. Proc. No. 10-4213-659 (Bankr. E.D. Mo., April 26, 2010),
seeks to avoid and recover $103,856.28 in preferential transfers,
consisting of payments made by the Debtors to the Defendant
between May 8, 2008 and August 6, 2008, the 90-day period
proceeding the Debtors' bankruptcy filing.
The Defendant has provided temporary employee services to the
Debtors since 2001. The Defendant sent weekly invoices to the
Debtors for the temporary employee services furnished by the
Defendant.
The Plaintiff argues that the Plaintiff may recover the Transfers
from the Defendant pursuant to Section 550(a)(1) of the Bankruptcy
Code because the Defendant is the initial transferee and the
Transfers are preferential pursuant to Section 547(b). The
Plaintiff further argues that the Transfers were significantly
higher than the pre-preference period payments and as such, the
Transfers were not made in the ordinary course of business.
The Plaintiff concedes that the Defendant provided uncompensated
temporary employee services during the Preference Period and as
such, the new value defense is available to the Defendant.
However, the Plaintiff argues that the Defendant is only entitled
to retain $13,056.05, the amount equivalent to the new value
provided after the last avoidable transfer. Alternatively, the
Plaintiff argues that only $17,305.01 constitutes new value,
should the Court determine that the June 22, 2008 payments are
unavoidable.
The Defendant affirmatively defends that the Transfers were made
in the ordinary course of business as is consistent with the
business practice between the Debtors and the Defendant, as well
as with the industry custom. In the alternative, the Defendant
argues that it provided new value to the Debtors after the last
payment to the Defendant was received. The Defendant argues that
the unpaid invoices sent to the Debtors during the Preference
Period total $54,700.62, and therefore, should the Plaintiff
prevail in avoiding the Transfers, the Defendant is entitled to
assert the new value defense in that amount.
In his May 9, 2011 Findings of Fact and Conclusions of Law,
Bankruptcy Judge Kathy A. Surratt-States held that the Defendant
has established its ordinary course of business defense. The
Court did not address the new value defense. A copy of the
Court's decision is available at http://is.gd/JWKEoTfrom
Leagle.com.
About ContinentalAFA Dispensing
Headquartered in St. Peters, Missouri, ContinentalAFA Dispensing
Company, fka Indesco International, Inc. --
http://www.continentalafa.com/-- designs, manufactures and
supplies high quality plastic trigger sprayers and other liquid
dispensing technologies and systems for major consumer product
companies and industrial markets. The Debtors currently have no
business operations.
ContinentalAFA and its wholly owned subsidiaries, Continental
Sprayers International, Inc., and AFA Products, Inc., sought
Chapter 11 protection (Bankr. E.D. Mo. Case No. 08-45921 on
Aug. 7, 2008. This case represents a "chapter 22" filing by
Indesco International (Bankr. S.D.N.Y. Case No. 00-15452),
which sought chapter 11 protection on Nov. 17, 2000, obtained
confirmation of its Modified Fourth Amended Joint Plan of
Reorganization on Jan. 11, 2002, and emerged from chapter 11
on Mar. 15, 2002.
John J. Hall, Esq., Lawrence E. Parres, Esq., and Robert Scott
Moore, Esq., at Lewis, Rice & Fingersh, L.C., represent the Debtor
as counsel. Daniel D. Doyle, Esq., and David Michael Brown, Esq.,
at Spencer Fane Britt & Browne LLP, represent the official
unsecured creditors' committee. When CAFA filed for bankruptcy,
it estimated assets of $100 million to $500 million, and debts of
$10 million to $50 million.
The Honorable Kathy A. Surratt-States confirmed the First Amended
and Modified Plan of Liquidation dated Aug. 13, 2009, proposed by
ContinentalAFA's Creditors' Committee on Sept. 24, 2009. That
plan appointed RSM McGladrey, Inc., Scott Peltz and David Bart as
the Liquidation Trustee charged with implementing and
administering a Liquidation Trust in accordance with the Plan for
the benefit of creditors.
CORELOGIC INC: Moody's Affirms 'Ba2' Corporate Family Rating
------------------------------------------------------------
Moody's Investors Service affirmed CoreLogic, Inc.'s Ba2 corporate
family and probability of default ratings, and the SGL-1
Speculative Grade Liquidity Assessment. In addition, Moody's
assigned Baa3 ratings to the proposed $550 million Senior Secured
Revolving Credit Facility and $350 Million Senior Secured Term
Loan, and a Ba3 rating to the $350 million Senior Unsecured Note.
Moody's also affirmed the B1 ratings on the unsecured notes. The
rating outlook is stable.
Ratings Rationale
CoreLogic's Ba2 CFR reflects the company's strong market position
within the mortgage settlement services market, long-standing
relationships with several of the largest financial institutions,
solid financial performance through economic cycles, and very good
liquidity. The rating is also supported by its data analytics
business, which has benefited from increased credit and risk
management-related activity (e.g., loan performance and fraud
detection) during the housing downturn.
However, CoreLogic's high revenue is concentrated in the
real estate industry. Mortgage originations, which is a
significant driver of CoreLogic's revenue, are expected to
decline significantly this year driven by substantially
lower refinancing activity. In addition, the high customer
concentration (with 37% of revenues generated by the ten largest
U.S. mortgage originators), and low geographic diversity (with
substantially all of its revenue generated in the U.S.) weigh on
CoreLogic's business profile.
The stable rating outlook reflects Moody's expectation of
low single digit revenue declines during 2011 amidst the weak
real estate market. Moody's expects the decrease in mortgage
origination services (e.g., industry projections of a 30% decline
in 2011 over the prior year) to be partly offset by increasing
demand for risk and fraud analytics by mortgage servicers. In
addition, higher default services revenue following the resolution
of foreclosure procedures by mortgage servicers, and ongoing
outsourcing by the banks that still service the mortgages in-
house. For 2012, Moody's anticipates CoreLogic's revenue should
begin to grow again as foreclosure activity peaks and data
analytics opportunities for CoreLogic begin to arise (e.g.,
securitization markets begin to re-emerge). In addition, the
stable outlook considers Moody's expectation that management will
maintain financial practices to ensure that leverage does not
exceeding 3.5x.
The Ba2 rating could be upgraded if CoreLogic demonstrates organic
revenue and earnings growth while improving leverage such that
free cash flow to debt exceeds 12% and debt to EBITDA declines to
the mid 2x level on a sustained basis. Downward rating pressure
could arise from additional financial leverage or a decline in
profitability, such that free cash flow to debt declines to less
than 7% and debt to EBITDA exceeds 3.5x (Moody's adjusted) on a
sustained basis. CoreLogic, Inc., is the borrower for all of the
rated debt. Debt ratings and Loss Given Default (LGD) assessments
were based on the Ba2 CFR and PDR, each instrument's priority
ranking within the capital structure (considering security and
guarantees), the maturity of the $35 million subordinated note in
April 2012, and known amortization payments. The proposed senior
unsecured note is rated higher than the legacy unsecured debt as
the note benefits from guarantees from all material domestic
subsidiaries.
Ratings assigned:
$550 Million Senior Secured
Revolving Credit Facility due 2016 Baa3, (LGD 2, 23%)
$350 Million Senior Secured
Term Loan due 2016 Baa3, (LGD 2, 23%)
$350 million Senior Notes due 2021 Ba3, (LGD 5, 79%)
Ratings affirmed (assessments revised):
Corporate Family Rating Ba2
Probability of Default Rating Ba2
$59.6 million of 7.55%
Senior Debentures due 2028 B1, (LGD 6, 95%)
$34.8 million of 8.5%
Capital Securities due 2012 B1, (LGD 6, 97%)
Speculative Grade Liquidity Rating SGL-1
The rating outlook is stable.
Ratings to be withdrawn upon closing of the proposed financing:
$500 Million Senior Secured
Revolving Credit Facility due 2012 Ba2, (LGD 3, 42%)
$350 Million Senior Secured
Term Loan due 2016 Ba2, (LGD 3, 42%)
$1 million of 5.70% Senior Notes
due 2014 B1, (LGD 6, 91%)
The principal methodology used in rating CoreLogic was Global
Business & Consumer Service Industry Rating Methodology rating
methodology published in October 2010.
CoreLogic, Inc., with over $1.6 billion of annual revenues, is a
leading provider of property and mortgage data and analytics
products and solutions. The company provides outsource solutions
in mortgage risk analytics; property, credit and employment
information.
COYOTES HOCKEY: Glendale City Council Will Vote on New Plan
-----------------------------------------------------------
Mike Sunnucks at the Phoenix Business Journal reports that the
Glendale City Council will vote n a new Phoenix Coyotes plan that
involves the Arizona city coming up with another $25 million to
keep the team from moving to Winnipeg.
According to the report, the city and National Hockey League say
the new $25 million allotment gives the NHL -- which owns the
Coyotes -- and city another season to sell the team to "a
qualified ownership group that will be committed to retaining the
team in Glendale".
The Journal says that $25 million coupled with another $25 million
Glendale paid to the National Hockey League on Monday could also
help close a sale of the Coyotes to prospective buyer Matthew
Hulsizer. Glendale will consider a new resolution giving City
Manager Ed Beasley the "authority to sign the agreements and
secure the financial mechanisms" needed to keep the team from
being sold to a Canadian ownership group that wants to move the
team Winnipeg, according to the report.
The report says the Glendale resolution says the city's "fee
payment to the NHL shall not exceed $25 million". The NHL is on
board with the deal.
About Coyotes Hockey
Dewey Ranch Hockey LLC, Arena Management Group, LLC, Coyotes
Holdings, LLC, and Coyotes Hockey, LLC -- owners and affiliates of
the Phoenix Coyotes National Hockey League team -- filed for
Chapter 11 protection (Bankr. D. Ariz. Case No. 09-09488) on
May 5, 2009. The Debtors are represented by Thomas J. Salerno,
Esq., at Squire, Sanders & Dempsey, LLP, in Phoenix, and estimate
their assets and liabilities are between $100 million and
$500 million.
In the third quarter of 2009, Judge Redfield T. Baum approved the
sale of the Phoenix Coyotes to the National Hockey League, which
had bought the team to quash a plan by bidder Jim Balsillie's to
move the team to Ontario, Canada. Coyotes was sent to Chapter 11
to effectuate a sale by owner Jerry Moyes to Mr. Balsillie.
CAPITAL HOME: Cash Collateral Hearing Continued Until May 31
------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
has continued until May 31, 2011, at 10:30 a.m., the hearing to
consider Capital Home Sales, LLC's access to the cash collateral
securing its obligations to MB Financial Bank, NA.
The Court previously authorized, on an interim basis, the Debtor
to access access the cash collateral to fund its business
operations, postpetition.
As reported in the Troubled Company Reporter on March 22, the
Debtor owes M.B. $21,566,048, as of the Petition date. The debt,
secured by assets of the Debtor, is on account of a revolving note
in the principal amount of $25 million provided by M.B. on May 31,
2009.
In exchange for using cash collateral, the Debtor will grant M.B.
postpetition replacement liens to the same extent and with the
same priority held prepetition on the Collateral and all
postpetition property of the Debtor of the type or kind
substantially equivalent to the Collateral. The Debtor will
maintain adequate property insurance on the manufactured homes
listing M.B. as a lienholder where applicable.
About Capital Home
Portland, Oregon-based Capital Home Sales, LLC -- dba Falcon
Financial, LLC; Kestral Financial, LLC; Emerald Financial, LLC;
Teal Financial, LLC; Harrier Financial, LLC; Goshawk Financial,
LLC; Heron Financial, LLC; Wigeon Financial, LLC; Kestral Onel,
LLC; Kestral Rentals; Wigeon Rentals; and Goshawk Rentals --
started as a series of individual companies that performed sales
and rental functions for particular manufactured home communities,
which communities were often related affiliates of the Company.
The Company conducts the foregoing business operation of
purchasing, selling, leasing and financing homes.
The Company filed for Chapter 11 bankruptcy protection (Bankr.
N.D. Ill. Case No. 10-54387) on Dec. 8, 2010. Gregory K. Stern,
Esq., at Gregory K. Stern, P.C., serves as the Company's counsel.
The Company estimated assets at $50 million to $100 million
and debts at $10 million to $50 million.
CASTLE HOME: Case Summary & 3 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Castle Home Builders, Inc.
dba Luxury Living
dba Luxury Living Savannah
dba Luxury Living Chicago
aka Luxury Living Tybee
815 The Pines
Hinsdale, IL 60521
Bankruptcy Case No.: 11-19428
Chapter 11 Petition Date: May 6, 2011
Court: United States Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: Jacqueline P. Cox
Debtor's Counsel: Stephen J. Brown, Esq.
SCHUYLER ROCHE & CRISHAM
130 E. Randolph St., Ste. 3800
Chicago, IL 60601
Tel: (312) 565-2400
Fax: (312) 565-8300
E-mail: sjbrown@srcattorneys.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/ilnb11-19428.pdf
The petition was signed by Tammy Jo Long, president.
CC MEDIA HOLDINGS: Incurs $131.83 Million Net Loss in 1st Qtr.
--------------------------------------------------------------
CC Media Holdings, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q reporting a
net loss attributable to the Company of $131.83 million on $1.32
billion of revenue for the three months ended March 31, 2011,
compared with a net loss attributable to the Company of $175.41
million on $1.26 billion of revenue for the same period a year
ago.
The Company's balance sheet at March 31, 2011, showed $16.94
billion in total assets, $24.22 billion in total liabilities and a
$7.28 billion total shareholders' deficit.
Our first quarter results reflect continued improvement in the
advertising environment globally, combined with the ongoing
execution of our business plan," said Tom Casey, Executive Vice
President and Chief Financial Officer. "We generated growth in
advertising revenues across our businesses, including gains in
multiple markets and categories in our radio segment, as well as
increased revenues across many of our outdoor markets. These
gains, combined with a disciplined approach to cost management,
led to further improvement in our overall operating profit margin.
Looking ahead, we remain focused on maximizing our leadership
position by driving innovation across our operations, growing
market share and converting our top line performance into improved
returns for our shareholders."
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/sdPXcc
About CC Media and Clear Channel
San Antonio, Tex.-based CC Media Holdings, Inc. (OTC BB: CCMO)
-- http://www.ccmediaholdings.com/-- is the parent company of
Clear Channel Communications, Inc. CC Media Holdings is a global
media and entertainment company specializing in mobile and on-
demand entertainment and information services for local
communities and premier opportunities for advertisers. The
Company's businesses include radio and outdoor displays.
CC Media has three reportable business segments: Radio
Broadcasting; Americas Outdoor Advertising; and International
Outdoor Advertising. Approximately half of CC Media's revenue is
generated from its Radio Broadcasting segment.
The Company reported a net loss of $462.8 million on
$5.866 billion of revenue for the fiscal year ended Dec. 31, 2010,
compared with a net loss of $4.049 billion on $5.552 billion of
revenue for the fiscal year ended Dec. 31, 2009.
* * *
CC Media Holdings carries 'CCC+' issuer credit ratings from
Standard & Poor's. Clear Channel Carries a 'Caa2' corporate
family rating from Moody's Investors Service and an issuer default
rating of 'CCC' from Fitch Ratings.
Fitch said in November 2010, that its ratings concerns center on
the company's highly leveraged capital structure, with significant
maturities in 2014 and 2016; the considerable interest burden that
pressures free cash flow generation; technological threats and
secular pressures in radio broadcasting; and the company's
exposure to cyclical advertising revenue. The ratings are
supported by the company's leading position in both the outdoor
and radio industries, as well as the positive fundamentals and
digital opportunities in the outdoor advertising space.
In February 2011, Standard & Poor's affirmed it 'CCC+' corporate
credit rating and positive outlook on CC Media Holdings and
operating subsidiary Clear Channel, which S&P views on a
consolidated basis.
S&P said the 'CCC+' corporate credit rating on CC Media Holdings
Inc. reflects the risks surrounding the longer-term viability of
the company's capital structure--in particular, refinancing risk
relating to sizable secured debt maturities in 2014 ($3.2 billion
pro forma for the transaction) and 2016 ($10.4 billion). In S&P's
view, the company has a satisfactory business risk profile, due to
its position as the largest radio and global outdoor advertising
operator, its good geographic and market diversity, and moderate
long-term growth prospects at the outdoor business. S&P views the
financial risk profile as highly leveraged, given the company's
significant refinancing risk, roughly break-even EBITDA coverage
of interest expense, and slim discretionary cash flow.
CHICAGOLAND CONSERVATIVE: Case Summary & Creditors List
-------------------------------------------------------
Debtor: Chicagoland Conservative Jewish High School Foundation
Chicago
1095 Lake Cook Road
Deerfield, IL 60015
Tel: (847) 470-6700
Bankruptcy Case No.: 11-19342
Chapter 11 Petition Date: May 5, 2011
Court: U.S. Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: Susan Pierson Sonderby
Debtor's Counsel: Nathan F. Coco, Esq.
MCDERMOTT WILL & EMERY LLP
227 West Monroe Street
Chicago, IL 60606
Tel: (312) 984-3658
E-mail: ncoco@mwe.com
Debtor's Notice,
Claims and
Balloting Agent: GARDEN CITY GROUP
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $10,000,001 to $50,000,000
A list of the Company's 20 largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/ilnb11-19342.pdf
The petition was signed by Larry Gerber, treasurer.
CHRISTIAN RELIEF: S&P Affirms 'B' Rating on IX-A 1995 Bonds
-----------------------------------------------------------
Standard & Poor's Ratings Services revised the outlook on its
ratings on Wichita, Kan.'s (Brentwood Manor Project) multifamily
housing revenue bonds series IX-A 1995 and IX-B 1995, issued on
behalf of Christian Relief Services, to negative from stable. At
the same time, Standard & Poor's affirmed its 'B (sf)' and 'B-
(sf)' long-term ratings on the series IX-A 1995 and IX-B 1995
bonds.
"The affirmation reflects our opinion of the project's low average
occupancy rate of 86.30%, low debt service coverage of 1.02x on
the series IX-A bonds and 1.01x on the series IX-B bonds, and the
project's receipt of advances from an affiliate to fulfill its
financial obligations in the 2010 fiscal year," S&P stated.
"The negative outlook reflects our view of the project's declining
operating income and low debt service coverage occupancy levels,"
said Standard & Poor's credit analyst Raymond Kim.
"According to the audited financial results for the year ended
June 30, 2010, debt service coverage (DSC) levels were, in our
opinion, very low, with a DSC ratio of 1.02x in 2010 on the senior
bonds and 1.01x in 2010 on the junior bonds," S&P said.
The average net rent has decreased to $393 per unit per month from
$399 in 2009. The annual expenses have increased by 5% to $3,636
per unit from $3,471 in fiscal 2009, mainly due to an increase in
maintenance and repair expenses and payroll expenses.
The project is located in Wichita, Kan., and is owned and managed
by an affiliate of Christian Relief Services. This garden style
complex consists of 196 units, with 20% of the units restricted to
tenants earning below 50% of the area's median income.
CIVICA DEVELOPMENT: Case Summary & 4 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Civica Development, LLC
fdba Rose Properties Management, LLC
1855 East Northern Avenue, Suite 201
Phoenix, AZ 85020
Bankruptcy Case No.: 11-13137
Chapter 11 Petition Date: May 6, 2011
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Judge: Charles G. Case II
Debtor's Counsel: Shelton L. Freeman, Esq.
DECONCINI MCDONALD YETWIN & LACY PC
6909 East Main St.
Scottsdale, AZ 85251
Tel: (480) 398-3100
Fax: (480) 398-3101
E-mail: tfreeman@lawdmyl.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/azb11-13137.pdf
The petition was signed by Jack D. Rose, manager of Civigroup
Companies LLC.
COATES INTERNATIONAL: Receives $10MM Funding from Black Swan
------------------------------------------------------------
Coates International, Ltd., reported that on May 3, 2011, it
obtained a firm commitment from Black Swan Capital Group, Inc.,
for $10,000,000 funding which would provide substantial new
working capital. The Funding Commitment is expected to close
before the end of this month.
George J. Coates, President and CEO stated: "This is a significant
milestone in enabling the Company to proceed with its plans and I
am very excited because this will enable us to ramp up production
and fulfill orders for the Coates CSRV Natural Gas Industrial
Electric Power Generator Sets to our customers throughout the
Western Hemisphere."
The Company has licensing fees to be received totaling $54,800,000
of which payments are due this year. Other licenses are being
negotiated. This will add to earnings along with production and
sales of the Company's products. The Company should have positive
earnings soon.
This Funding was initiated by George J. Coates, President and CEO.
About Coates International
Based in Wall Township, N.J., Coates International, Ltd.
(OTC BB: COTE) -- http://www.coatesengine.com/-- was incorporated
on August 31, 1988, for the purpose of researching, patenting and
manufacturing technology associated with a spherical rotary valve
system for internal combustion engines. This technology was
developed over a period of 15 years by Mr. George J. Coates, who
is the President and Chairman of the Board of the Company.
The Coates Spherical Rotary Valve System (CSRV) represents a
revolutionary departure from the conventional poppet valve. It
changes the means of delivering the air and fuel mixture to the
firing chamber of an internal combustion engine and of expelling
the exhaust produced when the mixture ignites.
The Company reported a net loss of $1.05 million on $159,000 of
sales for the year ended Dec. 31, 2010, compared with a net loss
of $806,756 on $0 of sales during the prior year.
The Company's balance sheet at Dec. 31, 2010 showed $2.99 million
in total assets, $4.11 million in total liabilities, and a
$1.12 million in stockholders' deficiency.
Meyler & Company, LLC, in Middletown, New Jersey, expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
continues to have negative cash flows from operations, recurring
losses from operations, and a stockholders' deficiency.
COLONY RESORTS: Posts $3.3 Million Net Loss in March 31 Quarter
---------------------------------------------------------------
Colony Resorts LVH Acquisitions, LLC, filed its quarterly report
on Form 10-Q, reporting a net loss of $3.3 million on
$57.8 million of revenues for the three months ended March 31,
2011, compared with a net loss of $2.1 million on $60.0 million of
revenues for the same period last year.
The Company's balance sheet at March 31, 2011, showed
$356.3 million in total assets, $296.1 million in total
liabilities, $61.8 million in redeemable members' equity, and a
members' deficit of $1.6 million.
As reported in the TCR on March 29, 2011, Ernst & Young, in Las
Vegas, Nevada, expressed substantial doubt about Colony Resorts
LVH Acquisition's ability to continue as a going concern,
following the Company's 2010 results. The independent auditors
noted that the Company has incurred recurring net losses and has a
working capital deficiency.
A complete text of the Form 10-Q is available for free at:
http://is.gd/bUyQbT
Las Vegas, Nev.-based Colony Resorts LVH Acquisitions, LLC, owns
and operates the Las Vegas Hilton, a casino resort located in Las
Vegas, Nevada. The Company licenses from HLT Existing Franchise
Holding LLC the right to use the name "Hilton" and is part of
Hilton's reservation system and Hilton's "HHonors Programs(TM)."
COMMUNITY CENTRAL: Common Stock Delisted from NASDAQ
----------------------------------------------------
The Nasdaq Stock Market, Inc., has determined to remove
from listing the common stock of Community Central Bank Corp.,
effective at the opening of the trading session on May 16, 2011.
Based on review of information provided by the Company, Nasdaq
Staff determined that the Company no longer qualified for listing
on the Exchange pursuant to Listing Rule 5250(f). The Company was
notified of the Staffs determination on April 13, 2011. The
Company did not appeal the Staff determination to the Hearings
Panel, and the Staff determination to delist the Company became
final on April 25, 2011.
About Community Central
Community Central Bank Corporation is the holding company for
Community Central Bank in Mount Clemens, Michigan. The Bank
opened for business in October 1996 and serves businesses and
consumers across Macomb, Oakland, St. Clair and Wayne counties
with a full range of lending, deposit, trust, wealth management
and Internet banking services. The Bank operates four full
service facilities in Mount Clemens, Rochester Hills, Grosse
Pointe Farms and Grosse Pointe Woods, Michigan. Community Central
Mortgage Company, LLC, a subsidiary of the Bank, operates
locations servicing the Detroit metropolitan area and central and
northwest Indiana. River Place Trust and Community Central Wealth
Management are divisions of Community Central Bank. Community
Central Insurance Agency, LLC, is a wholly owned subsidiary of
Community Central Bank. The Corporation's common shares currently
trade on The NASDAQ Capital Market under the symbol "CCBD".
The Company's balance sheet at Sept. 30, 2010, showed
$513.7 million in total assets, $501.6 million in total
liabilities, and stockholders' equity of $12.1 million.
"As of Sept. 30, 2010, due to the Corporation's significant
net loss from operations in the three and nine months ended
Sept. 30, 2010, deterioration in the credit quality of the
loan portfolio, and the decline in the level of its regulatory
capital to support operations, there is substantial doubt about
the Corporation's ability to continue as a going concern," the
Corporation said in its Form 10-Q for the quarter ended Sept. 30,
2010.
The Bank is currently subject to a "consent order" with the
Federal Deposit Insurance Corporation and the Michigan Office of
Financial and Insurance Regulation and is "significantly
undercapitalized" under the FDIC's prompt corrective action (PCA)
rules and accordingly is operating under significant operating
restrictions. The Consent Order requires Community Central Bank
to take corrective measures in a number of areas to strengthen and
improve the Bank's financial condition and operations. The
Consent Order is effective as of November 1, 2010. By entering
into the Consent Order, the Bank is directed and has agreed to
increase board oversight and conduct an independent study of
management, improve regulatory capital ratios, charge-off certain
classified assets, reduce its level of loan delinquencies and
problem assets, limit lending to certain borrowers, revise lending
and collection policies, adopt and implement new profit, strategic
and liquidity plans, and correct loan underwriting and credit
administration deficiencies. The Consent Order also requires the
Bank to obtain prior regulatory approval before the payment of
cash dividends or the appointment of any senior executive officers
or directors. The Bank also is not allowed to accept brokered
deposits without a waiver from the FDIC and must comply with
certain deposit rate restrictions.
COMMUNITY SHORES: Incurs $734,219 Net Loss in March 31 Quarter
--------------------------------------------------------------
Community Shores Bank Corporation reported a net loss of $734,219
on $2.79 million of total interest income for the three months
ended March 31, 2011, compared with a net loss of $440,405 on
$3.02 million of total interest income for the same period during
the prior year.
The Company's balance sheet at March 31, 2011, showed $242.39
million in total assets, $242.25 million in total liabilities and
$141,754 in total shareholders' equity.
Heather D. Brolick, president and chief executive officer of
Community Shores Bank Corporation, commented, "As expected, we
continue to experience losses as we work through the final phase
of problem credits. While we do not expect a return to
profitability in 2011, we are content with this quarter's outcome
when compared to the magnitude of the losses recorded in the last
several linked quarters. We anticipate this fiscal year's
performance will reflect stabilization and eventually there will
be a consistent methodical return to health from an asset quality
standpoint as internal and external indicators continue to show
improvement."
A full-text copy of the press release announcing the financial
results is available for free at http://is.gd/I74dKO
About Community Shores
Muskegon, Mich.-based Community Shores Bank Corporation, organized
in 1998, is a Michigan corporation and a bank holding company.
The Company owns all of the common stock of Community Shores Bank.
The Bank was organized and commenced operations in January 1999 as
a Michigan chartered bank with depository accounts insured by the
FDIC to the extent permitted by law. The Bank provides a full
range of commercial and consumer banking services primarily in the
communities of Muskegon County and Northern Ottawa County.
As reported by the TCR on April 6, 2011, Crowe Horwath LLP, in
Grand Rapids, Michigan, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has incurred significant recurring
operating losses, is in default of its note payable collateralized
by the stock of its wholly-owned bank subsidiary, and the
subsidiary bank is undercapitalized and is not in compliance with
revised minimum regulatory capital requirements under a formal
regulatory agreement which has imposed limitations on certain
operations.
The Company reported a net loss of $8.88 million on $6.95 million
of net interest income for 2010, compared with a net loss of
$4.96 million on $6.79 million of net interest income for 2009.
Total non-interest income was $1.57 million for 2010, compared to
$1.97 million for 2009.
CORTO INVESTORS: Case Summary & Largest Unsecured Creditor
----------------------------------------------------------
Debtor: Corto Investors, LLC
479 Ocean Ave., Ste A
Laguna Beach, CA 92651
Bankruptcy Case No.: 11-16482
Chapter 11 Petition Date: May 6, 2011
Court: United States Bankruptcy Court
Central District of California (Santa Ana)
Judge: Mark S. Wallace
Debtor's Counsel: David G. Epstein, Esq.
THE DAVID EPSTEIN LAW FIRM
P.O. Box 4858
Laguna Beach, CA 92652-4858
Tel: (949) 715-1500
Fax: (949) 715-2570
E-mail: david@epsteinlitigation.com
The petition was signed by Mark Smith, managing member.
Debtor's List of Largest Unsecured Creditor:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Chisholm Land Landscape Design $10,000
Planning Services
DALLAS MMK: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Dallas MMK Enterprises, LP
dba Dallas Prairie Creek Manor Apartments
P.O. Box 3770
Beverly Hills, CA 90212
Bankruptcy Case No.: 11-29615
Chapter 11 Petition Date: May 5, 2011
Court: United States Bankruptcy Court
Central District of California (Los Angeles)
Judge: Thomas B. Donovan
Debtor's Counsel: Charles Shamash, Esq.
CACERES & SHAMASH LLP
8200 Wilshire Blvd Ste 400
Beverly Hills, CA 90211
Tel: (310) 205-3400
Fax: (310) 878-8308
E-mail: cs@locs.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/cacb11-29615.pdf
The petition was signed by Moussa Kashani, general partner -
designated party.
Affiliates that filed separate Chapter 11 petitions:
Petition
Debtor Case No. Date
------ -------- ----
Moussa Kashani 10-54460 10/15/10
Las Vegas Apartments, LLC 09-32896 08/26/09
Peak Properties, LLC 10-28771 05/11/10
Russell Avenue Apartments, LLC 09-40619 11/03/09
San Marino Properties, LLC 09-40614 11/03/09
Cedros Properties, LLC 10-26875 04/27/10
DEARBORN LODGING: Court Cancels Proposed Sale to Unnamed Buyer
--------------------------------------------------------------
Bankruptcy Judge Thomas J. Tucker cancelled a May 4 hearing to
consider the request of Dearborn Lodging, Inc., to sell its assets
to a proposed buyer described only as "an entity to be formed."
The Debtor, among other things, seeks approval to sell its
interest in real property to an unidentified purchaser under the
terms of a purchase agreement that is not provided, but that "will
be filed and served as soon as it is available."
In its May 3, 2011 ruling, the Court noted that it "is now the
afternoon [of May 3] before the hearing, and to date, no such
purchase agreement has been filed." The Court called the Sale
Motion "premature" as it failed to adequately identify the
proposed purchaser as well as adequately specify the auction
procedures that the Debtor proposes to use, to determine if there
will be higher and better offers for the property.
The Wayne County Treasurer, Community South Bank, and the City of
Dearborn objected to the sale.
A copy of the Court's May 3, 2011 Opinion and Order is available
at http://is.gd/QFW3jifrom Leagle.com.
Dearborn Lodging, Inc., dba Metro Inn, in Farmington Hills,
Michigan, filed for Chapter 11 bankruptcy (Bankr. E.D. Mich. Case
No. 11-42920) on Feb. 7, 2011, represented by Jay S. Kalish &
Associates, P.C. In its petition, the Debtor estimated under
$50,000 in assets and $1 million to $10 million in debts. The
petition was signed by Joseph Nofar, its president.
DIETER KLOHN: Equitable Recoupment Doctrine Won't Apply to Setoff
-----------------------------------------------------------------
Magistrate Judge Thomas E. Morris denied Dieter Klohn's motion for
the Court to reduce judgment obtained against him by applying the
doctrine of equitable recoupment.
Judge Morris said the Defendant is not entitled to any setoff by
virtue of the doctrine of equitable recoupment. The liabilities
at issue are separate and distinct, and arose from the operation
of two different corporations. The United States has not taken an
inconsistent position with respect to the amount of tax due and
owing on a single transaction, nor has it subjected Defendant to
double taxation on a single transaction. "Defendant asks this
Court to expand the doctrine of equitable recoupment beyond what
any court has ever done, and the Court declines to do so," Judge
Morris said.
United States of America, v. Dieter H. Klohn, No. 3:06-cv-222
(M.D. Fla.), is an action by the United States to reduce federal
tax liabilities to judgment. In its complaint, the United States
alleged that the Defendant was liable for: (1) a trust fund
recovery penalty for the period ending Sept. 30, 1991; (2) a TFRP
for the period ending March 31, 1992; (3) income tax for 1987; and
(4) income tax for 1988.
In both his original counterclaim and his amended counterclaim,
Mr. Klohn sought a refund of monies he claims were illegally
applied to an improperly assessed and invalid TFRP for the tax
period ending on Sept. 30, 1991. The Defendant requested that the
Court apply these monies to his March 31, 1992 TFRP assessment,
which he maintains was validly assessed. After the action was
commenced, the government conceded the income tax issues as well
as the refund claim to the extent of payments made within two
years of the Defendant's administrative claim for refund. Thus,
at issue is the remaining $27,218.68 that was improperly collected
by the IRS, but which falls outside the two year statute of
limitations period that applies to tax refund claims.
A copy of Judge Morris' May 6, 2011 Order is available at
http://is.gd/sqJP2Ifrom Leagle.com.
Magistrate Judge Morris says that Dieter Klohn "is a entrepreneur
who owned two steel companies in Boston, Massachusetts, before
going bankrupt in 1992 and moving to Jacksonville, Florida (Doc.
#23-2 at 89-97) [and] was the president and one hundred percent
owner of KSK Engineering Corporation ("KSKEC") and he was the
president and seventy percent owner of KSK Steel Erector Company
("KSKSEC") (Doc. #23-2 at 89-97)."
Dieter H. Klohn filed a bankruptcy petition (Bankr. D. Mass. Case
No. 92-11705) on Feb. 21, 1992, and the Honorable William C.
Hillman granted Mr. Klohn a chapter 7 discharge on Apr. 7, 1995.
KSK Steel Erection Company, Inc., filed a bankruptcy 11 petition
(Bankr. D. Mass. Case No. 92-11706) on Feb. 21, 1992. KSK's case
was converted to a chapter 7 liquidation proceeding and the
Chapter 7 Trustee (Joseph Braunstein, Esq. --
jbraunstein@riemerlaw.com -- at Riemer & Braunstein, LLP, in
Boston, obtained an order from Judge Hillman closing the case on
May 19, 1997.
D.M.S. ELECTRIC: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: D.M.S. Electric Apparatus Service, Inc.
630 Gibson Street
Kalamazoo, MI 49007
Bankruptcy Case No.: 11-05213
Chapter 11 Petition Date: May 6, 2011
Court: U.S. Bankruptcy Court
Western District of Michigan (Grand Rapids)
Judge: James D. Gregg
Debtor's Counsel: Matthew Frank, Esq.
FRANK & FRANK PC
30833 Northwestern Highway, Suite 205
Farmington Hills, MI 48334
Tel: (248) 932-1440
E-mail: frankandfrank@comcast.net
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/miwb11-05213.pdf
The petition was signed by Timothy E. Fielding, president.
DOLLAR THRIFTY: S&P Retains 'B' CCR on New Hertz Takeover Bid
-------------------------------------------------------------
Standard & Poor's Ratings Services' ratings on Tulsa, Okla.-based
auto rental company Dollar Thrifty Automotive Group Inc. (DTAG)
remain on CreditWatch with positive implications. This follows
competitor Hertz Global Holdings Inc.'s (Hertz) new bid to acquire
DTAG. Hertz's previous bid was rejected by DTAG's shareholders
on Sept. 30, 2010, in favor of a higher bid made by competitor
Avis Budget Group Inc. Avis Budget's bid has not yet received
regulatory approval. "We initially placed the DTAG ratings on
CreditWatch with positive implications on April 26, 2010, when the
company announced that it had signed a definitive agreement to be
acquired by Hertz," S&P related.
"In the proposed acquisition bids, DTAG's corporate debt would be
retired, and either Hertz or Avis Budget, both rated higher than
DTAG, would assume its $1.4 billion of fleet debt (as of March 31,
2011). The acquisition would result in an increase in market share
for either Avis Budget or Hertz in the U.S. on-airport sector,"
said Standard & Poor's credit analyst Betsy Snyder. There
currently are three major on-airport car rental companies: Hertz,
Avis (parent of the Avis and Budget brands), and Enterprise
Holdings Inc. (parent of the Enterprise, Alamo, and National
brands), each with roughly a 30% market share; DTAG accounts for
most of the balance. DTAG focuses on the leisure segment, which
has been the faster growing and more profitable business segment
since 2009, while Avis Budget and Hertz both serve a mixture of
business and leisure travelers. The acquisition would result in
increased penetration for Avis Budget and Hertz in the leisure
segment," S&P noted.
The Federal Trade Commission (FTC) has been reviewing the
acquisition of DTAG since April 2010, when Hertz made its initial
bid, and, subsequently, Avis Budget's July 2010 bid. Hertz has
proposed divestiture of its Advantage brand to allay antitrust
concerns and gain approval from the FTC. It has indicated
that once it receives approval, it will then commence discussions
with DTAG on a consensual transaction.
"Our current ratings on DTAG reflect its aggressive financial
profile and small market share, and the price-competitive and
cyclical nature of on-airport car rentals. The ratings also
incorporate the strong cash flow its business generates, even in
periods of weak demand. We characterize DTAG's business risk
profile as weak and its financial risk profile as aggressive," S&P
stated.
"We will evaluate the effect of the proposed acquisition by either
Avis Budget or Hertz on DTAG's business risk and financial risk
profiles to resolve the CreditWatch listing," Ms. Snyder added.
DOT VN: Signs Into Yahoo! Search Reseller Program
-------------------------------------------------
Dot VN, Inc., has executed a Yahoo! Search Reseller Program
agreement with Yahoo! Emerging Markets (Singapore) Pte. Ltd.
As a Yahoo! search marketing reseller, Dot VN will assist local
Vietnamese Clients increase their global reach and visibility by
being featured results in both the Yahoo! Sponsored Search Program
and Yahoo!'s content matching platform. Additionally, Dot VN
plans to offer Vietnamese clients the opportunity to advertise on
Yahoo! Messenger, the dominant messaging services in Vietnam.
"We are extremely pleased to announce our participation in the
Yahoo! Search Reseller Program. Using Yahoo!''s best of breed
platform we can help our Vietnamese clients reach the over
27,000,000 Vietnamese internet users as well as a global audience
through a single cost-effective service," said Dot VN CEO Thomas
Johnson.
A full-text copy of the Reseller Program Terms is available for
free at http://is.gd/taoqbQ
A full-text copy of the Search Reseller Program Terms is available
for free at http://is.gd/eq6ou6
About Dot VN
Dot VN, Inc. (OTC BB: DTVI) -- http://www.DotVN.com/-- provides
Internet and telecommunication services for Vietnam and operates
and manages Vietnam's innovative online media web property,
www.INFO.VN. The Company is the "exclusive online global domain
name registrar for .VN (Vietnam)." Dot VN is the sole distributor
of Micro-Modular Data Centers(TM) solutions and E-Link 1000EXR
Wireless Gigabit Radios to Vietnam and Southeast Asia region. Dot
VN is headquartered in San Diego, California with offices in
Hanoi, Danang and Ho Chi Minh City, Vietnam.
Dot VN was incorporated in the State of Delaware on May 27, 1998,
under the name Trincomali Ltd.
The Company's balance sheet at Jan. 31, 2011, showed $2.74 million
in total assets, $10.92 million in total liabilities and $8.18
million in total shareholders' deficit.
Dot VN reported a $7.3 million net loss on $1.1 million of
revenues for the fiscal year ended April 30, 2010, compared with a
$5.4 million net loss on $1.0 million of revenues for the same
period a year ago.
Following the Company's results for fiscal 2010, Chang G. Park CPA
expressed substantial doubt against Dot VN's ability to continue
as a going concern, citing the Company's losses from operations.
DOUGLAS DEPUGH: Court Rules on Bank's Challenge to Cash Use
-----------------------------------------------------------
Chief Bankruptcy Judge James M. Marlar ruled on Commerce Bank of
Arizona's objection to the request of Douglas Paul DePugh and
Robin Pinkerton DePugh to use lender's cash collateral.
Commerce Bank has a lien on the Debtors' inventory and
receivables, from the operation of the Debtors' business. As to
that "bundle of collateral," Commerce Bank agreed at the hearing
that a replacement lien on the inventory and receivables would
provide it adequate protection for that part of its collateral.
This stipulation was acceptable to the Debtors.
That leaves, then, Commerce Bank's lien interest on real property.
Commerce Bank's witness, the Bank's officer, Fred Dawson, who
partially relies on a PICOR opinion, maintains that the land has a
fair market value of between $1,262,436 or $1,600,000. The land is
leased to two tenants, The Bashful Bandit and Fascinations. The
Bashful Bandit pay $5,400 rent monthly, and Fascinations pay
$4,400 per month. Real property taxes run, on Commerce Bank's
collateral, at approximately $1,667 per month.
According to Judge Marlar, for purposes of the hearing, the
property, which also secures Commerce Bank's debt, to be worth
approximately $1,600,000, and that Commerce Bank is over secured.
The Debtors proposed at the hearing, to pay $7,000 per month in
adequate protection payments to Commerce Bank. Judge Marlar held
that, as to the real property, a monthly adequate protection
payment of $7,000 is fair, unless further proceedings uncover
other reasons to take another look at this figure. Of that
figure, $1,667 shall be impounded for payment of accruing real
property taxes, and the balance may be applied to accruing
interest on Commerce Bank's loans. Then, if anything is left over,
that may be applied to principal.
A copy of Judge Marlar's May 6, 2011 Memorandum Decision is
available at http://is.gd/q6NXoBfrom Leagle.com.
Douglas Paul DePugh and Robin Pinkerton DePugh filed for
Chapter 11 bankruptcy (Bankr. D. Ariz. Case No. 11-06304) on
March 11, 2011.
DUNE ENERGY: Incurs $8.34 Million Net Loss in March 31 Quarter
--------------------------------------------------------------
Dune Energy, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q reporting a net loss
of $8.34 million on $17.42 million of revenue for the three months
ended March 31, 2011, compared with a net loss of $7.91 million on
$16.96 million of revenue for the same period during the prior
year.
The Company's balance sheet at March 31, 2011, showed
$304.31 million in total assets, $386.18 million in total
liabilities, $151.64 million in redeemable convertible preferred
stock, and a $233.51 million total stockholders' deficit.
James A. Watt, President and Chief Executive Officer stated, "We
anticipate results from our 19,500' subsalt well at Garden Island
Bay before the end of the second quarter. Our 916 well
encountered encouraging zones immediately above our primary
objective which will be tested later in the year. This well
validated the 3-d seismic interpretation of the prospect. The
results of these wells will help us formulate a forward plan to
maximize value for all stakeholders."
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/5dEHnX
About Dune Energy
Dune Energy, Inc. (NYSE AMEX: DNE) -- http://www.duneenergy.com/
-- is an independent energy company based in Houston, Texas.
Since May 2004, the Company has been engaged in the exploration,
development, acquisition and exploitation of natural gas and crude
oil properties, with interests along the Louisiana/Texas Gulf
Coast. The Company's properties cover over 90,000 gross acres
across 27 producing oil and natural gas fields.
The Company reported a net loss of $75.53 million on $64.18
million of revenue for the year ended Dec. 31, 2010, compared with
a net loss of $59.13 million on $52.24 million of revenue during
the prior year.
* * *
Dune Energy carries a 'CCC-' corporate credit rating, with
negative outlook, from Standard & Poor's, and 'Ca' corporate
family and probability of default ratings, with negative outlook,
from Moody's Investors Service.
S&P said in April 2010 that "the company's heavy debt burden makes
the prospects of a distressed exchange or bankruptcy a distinct
possibility."
DYNAVAX TECHNOLOGIES: Posts $18.5MM Net Loss in March 31 Quarter
----------------------------------------------------------------
Dynavax Technologies Corporation filed its quarterly report on
Form 10-Q, reporting a net loss of $18.5 million on $1.7 million
of revenues for the three months ended March 31, 2011, compared
with a net loss of $9.2 million on $8.3 million of revenues for
the same period last year.
Research and development expense increased by $2.2 million, or
18%, to $14.7 million for the quarter ended March 31, 2011, as
compared to the same period in 2010 primarily due to the increase
in compensation and related personnel costs that resulted from the
increase in employee headcount.
The Company's balance sheet at March 31, 2011, showed
$65.5 million in total assets, $29.0 million in total liabilities,
and stockholders' equity of $36.5 million.
Ernst & Young LLP, in Palo Alto, California, expressed substantial
doubt about Dynavax Technologies' ability to continue as a going
concern, following the Company's 2010 results. The independent
auditors noted that of the Company's recurring losses from
operations.
A complete text of the Form 10-Q is available for free at:
http://is.gd/Xem5zw
Berkeley, Calif. Based Dynavax Technologies Corporation (NASDAQ:
DVAX) - http://www.dynavax.com/-- is clinical-stage
biopharmaceutical company. The Company discovers and develops
novel products to prevent and treat infectious and inflammatory
diseases. The Company's lead product candidate is HEPLISAV, a
Phase 3 investigational adult hepatitis B vaccine designed to
provide rapid and superior protection with fewer doses than
current licensed vaccines.
E-Z BUS: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------
Debtor: E-Z Bus, Inc.
2151 Consulate Dr, Suite 12B
Orlando, FL 32837
Bankruptcy Case No.: 11-06924
Chapter 11 Petition Date: May 6, 2011
Court: United States Bankruptcy Court
Middle District of Florida (Orlando)
Debtor's Counsel: Arvind Mahendru, Esq.
JOSEPH E. SEAGLE, P.A.
924 W Colonial Dr.
Orlando, FL 32804
Tel: (407) 770-0100
Fax: (407) 770-0200
E-mail: am@seaglelaw.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/flmb11-06924.pdf
The petition was signed by Luis Pineda, president.
EDIETS.COM: Stockholders Elect 6 Directors, OK E&Y as Accountant
----------------------------------------------------------------
At the eDiets.com, Inc., 2011 Annual Meeting of Stockholders held
on May 3, 2011, four proposals were submitted to and approved by
the Company's stockholders. Of 61,230,338 shares outstanding and
entitled to vote at the Company's Annual Meeting, 52,420,802 were
present in person or by proxy.
Stockholders elected six directors at the Annual Meeting:
(1) Kevin A. Richardson, II
(2) Robert L. Doretti
(3) Lee S. Isgur
(4) Ronald Luks
(5) Pedro N. Ortega-Dardet
(6) Kevin N. McGrath
To ratification of the appointment of Ernst & Young LLP as the
Company's independent registered certified public accounting firm
was approved. Stockholders approved the proposal to amend the
Company's Equity Incentive Plan. Stockholders also authorized the
Board to effect a reverse stock split.
About eDiets
eDiets.com, Inc. is a leading provider of personalized nutrition,
fitness and weight-loss programs. eDiets currently features its
award-winning, fresh-prepared diet meal delivery service as one of
the more than 20 popular diet plans sold directly to members on
its flagship site, http://www.eDiets.com.
Ernst & Young LLP, in Boca Raton, Florida, expressed substantial
doubt about eDiets.com's ability to continue as a going concern.
The independent auditors noted that the Company has incurred
recurring operating losses and has a working capital deficiency.
The Company reported a net loss of $43.3 million on $23.4 million
of revenues for 2010, compared with a net loss of $12.1 million on
$18.1 million of revenues for 2009.
At Dec. 31, 2010, the Company's balance sheet showed $3.6 million
in total assets, $5.6 million in total liabilities, and a
stockholders' deficit of $2.0 million.
ELAN CORP: S&P Places 'B' CCR on Watch Positive on EDT Biz Sale
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B' corporate credit
rating on Ireland-based Elan Corp. PLC and 'B' issue-level rating
on Elan Finance Corp. and Elan Finance PLC on CreditWatch with
positive implications.
The CreditWatch placement follows the company's announcement that
it will be selling its EDT business to newly formed Alkermes PLC
and that it will use the cash portion of the proceeds from that
sale to reduce debt.
"The low speculative-grade rating on Elan Corp. PLC primarily
reflects the company's critical dependence on sales of its
multiple sclerosis (MS) treatment, Tysabri, and a thin near-term
pipeline," said Standard & Poor's credit analyst Michael Berrian.
Co-promoted by Biogen Idec Inc., Tysabri is primarily marketed as
a second-line MS therapy for a patient population dissatisfied
with current treatment options. Elan's fundamental reliance on
this one drug for 79% of sales in the first quarter of 2011 is
key to our assessment of its business risk profile as weak. The
dependence on this key franchise was heightened following Johnson
& Johnson's acquisition of Elan's Alzheimer's Immunotherapy
Program (AIP) in 2009. This dependence will become ever more
critical following the just announced proposed sale of the EDT
business. As a result, Elan's financial performance is more
sensitive to fluctuations in demand for Tysabri. We characterize
Elan's financial risk profile as aggressive given its high
leverage and history of negative free cash flow," S&P elaborated.
A spike in cases of progressive multifocal leukoencephalopathy
(PML; a rare, often fatal brain disease) in the third and fourth
quarters of 2009 required changes to the information provided to
physicians about the use of Tysabri in early 2010. "In part
because of these new PML cases, the pace of demand growth for
Tysabri declined, and total company sales over the past year
underperformed relative to our expectations. We also expect the
competitive landscape for Tysabri to remain challenging. Although
we expect continued sales growth, the pace likely will be slower
than we expected following the 2010 launch Novartis' drug Gilenya
for oral use with relapsing forms of MS. Furthermore, Biogen Idec,
Teva Pharmaceuticals, and Genzyme are all developing products to
treat MS. Even excluding a one-time cash payment to settle claims
regarding the marketing of Zonegran, free operating cash flow has
been lower than we expected," S&P stated.
EMERGENCY MEDICAL: S&P Puts 'B-' Rating on $950MM Sr. Unsec. Notes
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' issue-level
rating and '6' recovery rating to Greenwood, Village, Colo.-based
medical transport and hospital outsourcing provider Emergency
Medical Services Corp.'s (EMSC) proposed $950 million senior
unsecured notes maturing in 2019. The company is using the
proceeds from the notes as part of the financing of the leveraged
buyout transaction by Clayton, Dubilier, and Rice.
The speculative-grade rating on EMSC reflects Standard & Poor's
expectations that it will face ongoing exposure to reimbursement
risk in both its ambulance transportation (American Medical
Response [AMR]) and physician staffing (EmCare) businesses
(although reimbursement is stable in the near term), and high
levels of uncompensated care that contribute to relatively thin
operating margins. "Notwithstanding these risks, we characterize
the business risk as fair, given expectations of modest revenue
growth, reflecting new contracts, acquisitions, and, to a smaller
extent, same-store growth. Pro forma for the proposed transaction,
we expect adjusted debt leverage to approximate 7x and funds from
operations (FFO) to adjusted debt of about 9%. The pro forma
credit metrics are consistent with a highly leveraged financial
risk profile. Liquidity is adequate," S&P stated.
Although AMR (49% of revenues) and EmCare (51%) are the largest
providers in their respective businesses (ambulance transportation
and emergency room outsourcing), they operate in highly fragmented
industries, where they each hold less than 10% market share,
according to management and competitor information, and where
government reimbursement historically has been uncertain. Tight
government reimbursement (27% of total revenues and 39%
of total volume) has contributed to thin operating margins.
Ratings List
Emergency Medical Services Corp.
Corporate Credit Rating B+/Stable/--
New Rating
Emergency Medical Services Corp.
Senior Unsecured
$950 mil notes due 2019 B-
Recovery Rating
ENCORIUM GROUP: Posts $3.9 Million Net Loss in Sept. 30 Quarter
---------------------------------------------------------------
Encorium Group, Inc., filed on May 5, 2011, its quarterly report
on Form 10-Q, reporting a net loss of $3.9 million on $3.7 million
of total revenue for the three months ended Sept. 30, 2010,
compared with a net loss of $1.0 million on $5.1 million of total
revenue for the same period of 2009.
The Company's balance sheet at Sept. 30, 2010, showed $9.9 million
in total assets, $14.3 million in total liabilities, and a
stockholders' deficit of $4.4 million.
Asher & Company, Ltd., in Philadelphia, following its audit of
Encorium Group's consolidated financial statements for the fiscal
year ended Dec. 31, 2009, said that the Company's recurring losses
from operations, current available cash, and anticipated level of
capital requirements necessary to fund its current operations
raise substantial doubt about the Company's ability to continue as
a going concern.
A complete text of the Form 10-Q is available for free at:
http://is.gd/v5YOdR
About Encorium Group
Encorium Group, Inc., is a clinical research organization that
engages in the design and management of complex clinical trials
for the pharmaceutical, biotechnology and medical device
industries. The Company was initially incorporated in August 1998
in Nevada. In June 2002, the Company changed its state of
incorporation to Delaware. In November 2006, it expanded its
international operations with the acquisition of its wholly-owned
subsidiary, Encorium Oy, a clinical research organization founded
in 1996 in Finland, which offers clinical trial services to the
pharmaceutical and medical device industries. Since 2006 the
Company has conducted substantially all of its European operations
through Encorium Oy and its wholly-owned subsidiaries located in
Denmark, Estonia, Sweden, Lithuania, Romania, Germany and Poland.
On July 16, 2009 the Company sold substantially all of the assets
relating to the Company's US line of business to Pierrel Research
USA, Inc., the result of which the Company no longer has any
employees or significant operations in the United States. Due to
this sale, for the three and nine months ended Sept. 30, 2010 and
2009, the results of the U.S. business have been presented as
discontinued operations in the consolidated condensed financial
statements.
ENERGY TRANSFER: Fitch Affirms 'BB-' Issuer Default Rating
----------------------------------------------------------
Fitch Ratings has affirmed the Issuer Default Ratings (IDRs) for
Energy Transfer Partners, L.P. (ETP) and Energy Transfer Equity,
L.P. (ETE) at 'BBB-' and 'BB-', respectively. The Rating Outlook
for both companies is Stable.
ETP's ratings and Stable Outlook reflect:
-- Significant scale and scope of operations and increasing
diversity of assets;
-- Favorable asset positioning enables ETP to benefit from
expanding natural gas shale development and associated
natural gas liquids (NGL) production;
-- With the start up of the Tiger and Fayetteville Express
interstate natural gas pipelines an increasing cash flow
contribution is being generated by contractually supported,
low-risk assets;
-- Adequate liquidity and capital market access, most recently
demonstrated by the issuance by ETP more than $700 million
in common units.
Other considerations and credit concerns include:
-- An aggressive growth and acquisition strategy;
-- The depressing effect of low natural gas prices and
compressed basis differentials on intrastate pipeline and
storage margins;
-- Debt leverage ratios modestly above historical norms.
Fitch projects adjusted debt to EBITDA to approximate 4.3 times
(x) in 2011 which is higher than targeted leverage of 4.0x or
below. Leverage should begin to improve in 2012. However, given
several large newly announced committed and potential projects
with heavy 2012 spending, leverage may remain above the company's
target
ETE owns 50.2 million ETP limited partner (LP) units and ETP's
1.8% general partner (GP) interest and 26.3 million Regency Energy
Partners LP (RGNC) LP units and RGNC's 2% GP interest. ETE's
investment in RGNC was completed on May 26, 2010. RGNC like ETP is
a master limited partnership (MLP) with growing midstream and
pipeline operations.
As ETP and RGNC increase in scale and scope, ETE's risks become
more geographically and operationally diversified. In addition,
cash flow from the MLPs is expected to increase as organic growth
projects and recent acquisitions generate returns. Fitch expects
ETE's standalone debt to EBITDA to end 2011 at 3.0x or below. ETE
issued $1.8 billion of unsecured notes in September 2010 and
repaid it outstanding term loans, significantly reducing its
refinancing risk. Concurrent with the note offering, ETE entered
into a new five-year $200 million secured revolving credit
facility.
Fitch affirms these ratings:
Energy Transfer Partners, L.P.
-- IDR at 'BBB-';
-- Senior unsecured debt at 'BBB-'.
Energy Transfer Equity, L.P.
-- IDR at 'BB-';
-- Senior secured revolving credit facility at 'BB';
-- Senior unsecured debt at 'BB'.
ENTECH SOLAR: Posts $2.1-Mil. Net Loss in First Quarter
-------------------------------------------------------
Entech Solar, Inc., filed its quarterly report on Form 10-Q,
reporting a net loss of $2.1 million on $49,000 of revenues for
the three months ended March 31, 2011, compared with a net loss of
$6.3 million on $15,000 of revenues for the same period last year.
The Company's balance sheet at March 31, 2011, showed
$40.7 million in total assets, $4.3 million in total liabilities,
$11.2 million of Series D-1 convertible preferred stock, and
stockholders' equity of $25.2 million.
A complete text of the Form 10-Q is available for free at:
http://is.gd/Dc3ebK
About Entech Solar
Fort Worth, Tex.-based Entech Solar, Inc., plans to become a
leading developer of renewable energy technologies for the
commercial, industrial and utility markets. The Company's primary
focus continues to be on developing and commercializing its state-
of-the-art concentrating photovoltaic ("CPV") products that can
provide electricity in the short term and potentially both
electricity and heat in the long term.
In September 2010, the Company submitted SolarVolt(TM) for
independent certification testing. The Company may follow
SolarVolt(TM) with a new and improved version of ThermaVolt(TM)T,
its electricity and hot water product.
The Company reported a net loss of $18.4 million on $246,000 of
revenues for 2010, compared with a net loss of $35.8 million on
$2.2 million of revenues for 2009.
As reported in the TCR on Marcy 29, 2011, EisnerAmper LLP, in
Edison, New Jersey, expressed substantial doubt about Entech
Solar's ability to continue as a going concern, following the
Company's 2010 results. The independent auditors noted that the
Company has suffered recurring losses and negative cash flows from
operations.
FAIRFIELD SENTRY: Liquidators Have Deal With Madoff Trustee
-----------------------------------------------------------
Kenneth M Krys and Joanna Lau of KRyS Global, the Joint
Liquidators of Fairfield Sentry Ltd., Fairfield Sigma Ltd. and
Fairfield Lambda Ltd. has entered a compromise with Irving H.
Picard, the Trustee for the liquidation of Bernard L. Madoff
Investment Securities LLC, to resolve the matters in dispute
between the Fairfield Funds and the BLMIS Trustee.
As background, the BLMIS Trustee filed a complaint in New York
against the Fairfield Funds and other entities asserting that the
Fairfield Funds were liable to the BLMIS estate for the monies
Fairfield Sentry withdrew from BLMIS in the 6 years before
December 2008, totaling in excess of $3 Billion. In turn,
Fairfield Sentry had timely filed customer claims against the
BLMIS estate pursuant to the Securities Investor Protection Act,
which, based on the method for calculating such claims as employed
by the BLMIS Trustee and as approved by the U.S. Bankruptcy Court,
total approximately $1.2 billion. The BLMIS Trustee has asserted,
under applicable provisions of the U.S. Bankruptcy Code, that
Fairfield Sentry's claims should be disallowed unless and until it
satisfies its entire liability to the BLMIS estate.
The settlement resolves the parties' claims against each other,
thereby avoiding contentious, costly and uncertain litigation, and
it provides a structure that enables the Joint Liquidators and the
BLMIS Trustee to work jointly and cooperatively in seeking and
obtaining recoveries which will enhance their respective estates
for the benefit of their respective stakeholders.
The general terms of the settlement are such that certain pools of
litigation recoveries that are pursued by the Joint Liquidators
and the BLMIS Trustee will be shared depending on the nature of
those pools and other factors. In addition to the agreement to
share these assets, the Joint Liquidators and the BLMIS Trustee
will work together and cooperatively to maximize the assets that
are recovered for the benefit of their respective estates.
Pursuant to the agreement, the Joint Liquidators will pay $70
million from Fairfield Sentry's account to the BLMIS Trustee, and
in exchange the Trustee of BLMIS will allow a customer claim of
Fairfield Sentry in the amount of $230 million. The Joint
Liquidators will receive the principal benefit of litigation
recoveries from third party service providers of the Fairfield
Funds, with the exception of a smaller share of recoveries from
claims against their former investment manager and affiliates
thereof -- the Fairfield Greenwich Group and certain affiliates --
which claims will be assigned to the BLMIS Trustee.
With respect to the recoveries of redemptions from the Fairfield
Funds which are being pursued by the Joint Liquidators and the
BLMIS Trustee, the Joint Liquidators will receive from 85% to 40%
of such recoveries for the benefit of the Fairfield Funds'
estates, depending on the nature of the claim.
The agreement is subject to approval of the U.S. Bankruptcy Court
for the Southern District of New York and the Eastern Caribbean
Supreme Court in the British Virgin Islands.
Kenneth Krys, a licensed insolvency practitioner of the British
Virgin Islands and one of the Joint Liquidators of the Fairfield
Funds, said of the agreement with the BLMIS Trustee: "We are very
pleased with the result. These negotiations were hard given the
significant issues between the parties and took significant time
and resources to reach a conclusion. We are of a view that the
final result is very good for the stakeholders in the three
Fairfield Funds. It provides certainty to stakeholders as to how
recoveries will be received and allocated to the estates and will
allow the Joint Liquidators to now focus their efforts and
resources on recovery efforts rather than being hindered and
diverted by the impact that the claims by the BLMIS Trustee may
have on the Fairfield Funds' estates."
Forbes Hare (BVI) serves as general counsel to the Joint
Liquidators, and Brown Rudnick LLP serves as the Joint
Liquidators' U.S. counsel.
The Liquidators wish to acknowledge the efforts of the BLMIS
Trustee, Mr. Irving Picard, and those of his counsel at Baker
Hostetler LLP -- particularly Thomas Long and Mark Kornfeld -- in
reaching this important settlement.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping $50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970. The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims
agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
US$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.)
As of Feb. 18, 2011, a total of $6.85 billion in claims by
investors has been allowed, with $791.1 million to be paid by the
Securities Investor Protection Corp. Investors are expected to
receive additional distributions from money recovered by
Mr. Picard from lawsuits or settlements.
About Fairfield Sentry
Fairfield Sentry is being liquidated under the supervision of the
Commercial Division of the High Court of Justice in the British
Virgin Islands. It is one of the funds owned by the Fairfield
Greenwich Group, an investment firm founded in 1983 in New York
City.
Fairfield Sentry and other Greenwich funds had among the largest
exposures to the Bernard L. Madoff fraud.
Fairfield Sentry Limited, filed for Chapter 11 protection (Bankr.
S.D.N.Y. Case No. 10-13164) in June 2010.
Greenwich Sentry, L.P., and an affiliate filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. 10-16229) on Nov. 19, 2010,
hoping to settle lawsuits filed against it in connection with its
investments with Bernard L. 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.
FAMOUS RECIPE: Soliciting Bids for Mrs. Winner's
------------------------------------------------
RestaurantNews.com reports that Arlington Capital Advisors has
been retained and will run a sale process for Mrs. Winner's. The
process will result in an auction for all of the assets of Famous
Recipe Company Operations, LLC and the related intellectual
property and franchise operations of Winners International
Restaurant Franchise Services, Inc.
According to the report, the Debtor is soliciting stalking horse
bids by June 3, 2011, and upon selection of a stalking horse bid,
will accept competing bids until June 23, 2011. Prospective
buyers may also meet with company management and tour store
locations prior to June 23, 2011, according to the report.
The final auction among the stalking horse bidder and any other
qualified bidders will be held in Atlanta, Georgia the week of
June 27, 2011. The parties will then seek Bankruptcy Court
approval of the final bid and close immediately thereafter.
Based in McDonough, Georgia, Famous Recipe Company Operations
LLC dba Mrs. Winner's Chicken & Biscuits filed for Chapter 11
bankruptcy protection on Nov. 10, 2011 (Bankr. N.D. Ga. Case No.
10-94027). John J. McManus, Esq., John J. McManus & Associates,
P.C., represents the Debtor. The Debtor disclosed assets of
$2,397,946, and debts of $21,906,873.
FANNIE MAE: Posts $6.5 Billion Net Loss in 2011 First Quarter
-------------------------------------------------------------
In a news release Friday, Fannie Mae announced its results for the
first quarter ended March 31, 2011.
Fannie Mae reported a net loss of $6.5 billion in the first
quarter of 2011, compared to net income of $73 million in the
fourth quarter of 2010 (which reflected a $1.2 billion reduction
to credit-related expenses resulting from the successful
resolution of certain outstanding repurchase requests), and a net
loss of $11.5 billion in the first quarter of 2010.
The change to a net loss in the first quarter of 2011 from net
income in the fourth quarter was due to an increase in credit-
related expenses, primarily driven by a decline in home prices
during the quarter. The Company estimates that, although home
prices have improved in some geographic regions, home prices on a
national basis declined by 1.8% in the first quarter of 2011,
which had a direct and negative impact on the Company's credit-
related expenses. Substantially all of the Company's credit-
related expenses in the first quarter were related to the
Company's legacy (pre-2009) book of business.
"We expect our credit-related expenses to remain elevated in 2011
as we continue to be negatively impacted by the prolonged decline
in home prices," said Michael J. Williams, president and chief
executive officer. "As we move forward, we are building a strong
new book of business that now accounts for 45% of the Company's
overall single-family guaranty book of business. We continue to
be the leading provider of liquidity for single-family mortgages
and affordable multifamily rental housing while we remain focused
on our responsibility to find solutions for distressed homeowners
and their families."
The vast majority of the Company's credit losses in the first
quarter were attributable to single-family loans that Fannie Mae
purchased or guaranteed from 2005 through 2008. The Company's
single-family book of business had $206 billion in nonperforming
loans as of March 31, 2011.
The Company's net loss attributable to common stockholders in the
first quarter of 2011 was $8.7 billion, including $2.2 billion in
dividend payments to the U.S. Treasury, compared with a loss of
$2.1 billion in the fourth quarter of 2010, and loss of
$13.1 billion for the first quarter of 2010.
As of March 31, 2011, the Company's net worth deficit was
$8.4 billion, The Federal Housing Finance Agency (FHFA) has
requested $8.5 billion on the Company's behalf from Treasury to
eliminate the deficit. Upon receipt of those funds, the Company's
total obligation to Treasury for its senior preferred stock will
be $99.7 billion. Since its senior preferred stock was issued,
the Company has paid a total of $12.4 billion in dividends to
Treasury.
Net revenues (net interest income plus fee and other income) were
$5.2 billion in the first quarter of 2011, up 6% from $4.9 billion
in the fourth quarter of 2010, due to an increase in net interest
income. Net revenues were $3.0 billion in the first quarter of
2010.
The Company's balance sheet at March 31, 2011, showed
$3.227 billion in total assets, $3.235 billion in total
liabilities, and a stockholders' deficit of $8.4 million.
A complete text of the Form 10-Q is available for free at:
http://is.gd/pr9v2b
A complete text of the news release is available for free at:
http://is.gd/rJhb5A
Based in Washington, D.C., Federal National Mortgage Association,
aka Fannie Mae -- http://www.fanniemae.com/-- is a government-
sponsored enterprise ("GSE") that was chartered by Congress in
1938 to support liquidity, stability and affordability in the
secondary mortgage market, where existing mortgage-related assets
are purchased and sold. The Company's charter does not permit the
Company to originate loans or lend money directly to consumers in
the primary mortgage market. The Company's most significant
activities are securitizing mortgage loans originated by lenders
into Fannie Mae mortgage-backed securities, which the Company
refers to as Fannie Mae MBS, and purchasing mortgage loans and
mortgage-related securities for its mortgage portfolio.
The U.S. Department of the Treasury owns the Company's senior
preferred stock and a warrant to purchase 79.9% of the Company's
common stock. Treasury has made a commitment under a senior
preferred stock purchase agreement to provide the Company with
funds under specified conditions to maintain a positive net worth.
The U.S. government does not guarantee the Company's securities or
other obligations.
The Company's common stock was delisted from the New York Stock
Exchange and the Chicago Stock Exchange on July 8, 2010, and since
then has been traded in the over-the-counter market and quoted on
the OTC Bulletin Board under the symbol "FNMA."
* * *
Fannie Mae have been under conservatorship, with the Federal
Housing Finance Agency acting as conservator, since Sept. 6, 2008.
As conservator, FHFA succeeded to all rights, titles, powers and
privileges of the company, and of any shareholder, officer or
director of the company with respect to the Company and its
assets. The conservator has since delegated specified authorities
to the Company's Board of Directors and has delegated to
management the authority to conduct the Company's day-to-day
operations.
FIDDLER'S CREEK: In Mediation on Contested Reorganization Plan
--------------------------------------------------------------
Bill Rochelle, Bloomberg News' bankruptcy columnist, reports that
although Fiddler's Creek LLC scheduled a May 26 confirmation
hearing for approval of the reorganization plan, the Debtor must
surmount two formidable obstacles before plan can be approved.
Foremost, the developer needs to negotiate a settlement with
bondholders in opposition to the plan. To assist, another
bankruptcy judge was appointed on May 6 as mediator. The
mediation must be completed by May 13.
According to Mr. Rochelle, Fiddler's Creek said in a court filing
last week that it's negotiating with the exit lender for an
increase in financing effective on implementation of the plan. If
discussions work out, the new financing will be $50 million rather
than $30 million.
The report relates that the current schedule called for the new
loan agreement to have been filed with the bankruptcy court by
May 6. Given the pursuit of a larger loan, Fiddler's Creek is
requesting an extension until May 22 of the deadline for filing
the new loan documents.
The Chapter 11 Plan
As reported in the April 11, 2011 edition of the Troubled Company
Reporter, the Hon. K. Rodney May of the U.S. Bankruptcy Court for
the Middle District of Florida extended the exclusive period of
Fiddler's Creek LLC and its debtor-affiliates to solicit
acceptances of their Chapter 11 plan of reorganization until May
26, 2011.
The Debtors scheduled a May 26 hearing for confirmation of its
reorganization plan after the bankruptcy judge in Fort Myers,
Florida, signed an order March 23 approving the explanatory
disclosure statement.
The Debtors proposed a revised plan after reaching agreement with
the official creditors' committee, an ad hoc group of homeowners,
and two lenders, Regions Bank NA and Fifth Third Bank.
A copy of the black-lined version of the Second Amended Joint
Consolidated Disclosure Statement is available at no charge at:
http://bankrupt.com/misc/FIDDLERSCREEK_BlacklinedDS.pdf
About Fiddler's Creek
Each of Fiddler's Creek, LLC, and its affiliates owns, operates or
is otherwise affiliated with the premier, fully integrated, master
planned residential community known as "Fiddler's Creek" in
southwestern Florida. Fiddler's Creek is located in Collier
County, Florida, approximately 12 miles southeast of the city of
Naples and six miles north of Marco Island. The Fiddler's Creek
development is comprised of nearly 4,000 zoned acres of prime
land in Naples, Florida, and is planned for and capable of
accommodating up to 6,000 residences upon projected build-out,
which is estimated to be in 2020. Fiddler's Creek contains five
distinctive neighborhoods known as: Fiddler's Creek, Veneta,
Aviamar, Marsh Cove and Meadow Run.
Fiddler's Creek filed for Chapter 11 bankruptcy protection (Bankr.
M.D. Fla. Case No. 10-03846) on Feb. 23, 2010. Attorneys
at Genovese Joblove & Battista, P.A., and at Woodward,Pires &
Lombardo PA represent the Debtors. Judge Alexander L. Paskay
presides over the case. The Company estimated assets and debts at
$100 million to $500 million.
The Official Unsecured Creditors' Committee is represented by Paul
S. Singerman, Esq., Jordi Guso, Esq., and Debi Evans Galler, Esq.,
at Berger Singerman PA, in Miami, Florida.
FIDDLERS' CREEK: Improperly Solicited Homeowners, U.S. Bank Says
----------------------------------------------------------------
U.S. Bank, N.A., as indenture trustee to certain bondholders,
complains that Fiddler's Creek LLC and its affiliated debtors have
improperly solicited the homeowners of Fiddler's Creek in
violation of Section 1125 of the Bankruptcy Code.
According to U.S. Bank, since obtaining approval of the Second
Amended Joint Consolidated Disclosure Statement for Plans of
Reorganization of the Debtors, the Debtors have distributed
unauthorized and misleading solicitations to the homeowners of
Fiddler's Creek seeking acceptance of the Plans. U.S. Bank said
the transparent purpose of the unauthorized and misleading
solicitation was to cause the homeowners to persuade community
development districts to vote in favor of the Plans with respect
to the treatment of the bond debt special assessments, against
bondholders' wishes.
The infrastructure of the Fiddler's Creek development was financed
in great part by bond debt. The community development districts
provided public improvement and community facilities to benefit
the real property; issued debt, including bond debt, secured by
and paid from non-ad valorem special assessments; and imposed and
levied non-ad valorem special assessments on real property within
the district to repay the bond debt that financed the improvements
and facilities benefiting the district's real property.
Both pre- and post- petition, the Debtors failed to pay bond debt
special assessments levied by the districts on the Debtors'
properties. The districts in turn owed U.S. Bank, as indenture
trustee, on behalf of the bondholders.
U.S. Bank said the districts scheduled a "joint public meeting" on
April 18 to supposedly allow "the Debtors, the Indenture Trustees,
the Official Unsecured Creditors Committee and members of the
Fiddler's Creek community and/or their counsel or representative"
to appear before the district to provide information, ask
questions and express opinions, concerns regarding the Plans.
Less than a week before the District Meeting, the Debtors,
according to U.S. Bank, distributed a "Summary and Highlights of
the Debtors' Second Amended Plans of Reorganization" to
homeowners. Neither the form nor the sending of these documents
was approved by the Court.
U.S. Bank said the Improper Solicitation achieved its intended
effect: hundreds of homeowners attended the meeting and urged the
districts to vote in favor of the Plans.
The Court is scheduled to convene hearings on May 26 and 27 to
consider confirmation of each Debtor's Plan. Confirmation
objections are due May 12.
However, U.S. Bank is asking the Court to direct the Debtors to
sent out a curing communication that corrects the Debtors'
misleading statements, and continue the confirmation hearing and
related deadlines so as to provide sufficient time for the Debtors
to do so and for the homeowners to consider the curing
communication.
Although the Debtors' Estates are presently being jointly
administered for procedural purposes, the Debtors and their
Estates have not been substantively consolidated. However,
pursuant to the Plans, certain of the Debtors will be
substantively consolidated with and into certain of the other
Debtors. As of the Effective Date, there will be 11 separate
Reorganized Debtors if each Plan is confirmed.
The Debtors' Financial Projections assume availability of
$30,000,000 in exit financing on or shortly after the Plan
Effective Date, a portion of which will be used to pay in full the
expected payments required under the Plans to the Holders of
Allowed Claims.
A copy of the black-lined version of the Second Amended Joint
Consolidated Disclosure Statement is available at no charge at:
http://bankrupt.com/misc/FIDDLERSCREEK_BlacklinedDS.pdf
About Fiddler's Creek
Each of Fiddler's Creek, LLC, and its affiliates owns, operates or
is otherwise affiliated with the premier, fully integrated, master
planned residential community known as "Fiddler's Creek" in
southwestern Florida. Fiddler's Creek is located in Collier
County, Florida, approximately 12 miles southeast of the city of
Naples and six miles north of Marco Island. The Fiddler's Creek
development is comprised of nearly 4,000 zoned acres of prime
land in Naples, Florida, and is planned for and capable of
accommodating up to 6,000 residences upon projected build-out,
which is estimated to be in 2020. Fiddler's Creek contains five
distinctive neighborhoods known as: Fiddler's Creek, Veneta,
Aviamar, Marsh Cove and Meadow Run.
Fiddler's Creek filed for Chapter 11 bankruptcy protection (Bankr.
M.D. Fla. Case No. 10-03846) on Feb. 23, 2010. Attorneys
at Genovese Joblove & Battista, P.A., and at Woodward,Pires &
Lombardo PA represent the Debtors. Judge Alexander L. Paskay
presides over the case. The Company estimated assets and debts at
$100 million to $500 million.
The Official Unsecured Creditors' Committee is represented by Paul
S. Singerman, Esq., Jordi Guso, Esq., and Debi Evans Galler, Esq.,
at Berger Singerman PA, in Miami, Florida.
FIRST FEDERAL: Gets Non-Compliance Notice from NASDAQ
-----------------------------------------------------
First Federal Bancshares of Arkansas, Inc., on May 4, 2010,
received a letter from The NASDAQ Stock Market notifying the
Company that it no longer meets NASDAQ's continued listing
requirement concerning the minimum number of publicly-held shares
of the Company's common stock, par value $0.01 per share, under
Listing Rule 5450(b)(1)(B). The Notification Letter states that
the minimum number of publicly-held shares of Common Stock has
dropped below the minimum 750,000 shares required under the
Publicly Held Share Rule and that the Company is therefore not in
compliance with the Publicly Held Share Rule.
The Company anticipated receiving the Notification Letter after
effecting the Reverse Split on May 3, 2011. The Notification
Letter has no effect at this time on the listing of the Company's
Common Stock on the Nasdaq Global Market, and the Company's Common
Stock will continue to trade on the Nasdaq Global Market under the
symbol "FFBH."
The Notification Letter states that the Company is afforded 45
calendar days, or until June 20, 2011, to submit a plan to regain
compliance. If the Company's plan to regain compliance is
accepted by NASDAQ, NASDAQ can grant an extension of up to 180
calendar days, or until Oct. 31, 2011, to regain compliance with
the Publicly Held Share Rule.
On May 3, 2011, pursuant to the terms of the Investment Agreement,
as amended, dated as of Jan. 27, 2011, with its wholly-owned
subsidiary, First Federal Bank, and Bear State Financial Holdings,
LLC, which sets forth the terms and conditions of the Company's
recapitalization plan, the Company amended its Articles of
Incorporation to effect a 1-for-5 reverse split of the Company's
issued and outstanding shares of Common Stock. By virtue of the
Reverse Split, the total outstanding shares of Common Stock
decreased from 4,846,785 to approximately 969,357 shares
outstanding. The impact of the Reverse Split was to reduce the
total number of publicly-held shares of Common Stock below the
minimum number of publicly-held shares required under the Publicly
Held Share Rule, after excluding shares of Common Stock held by
officers, directors, or beneficial owners of 10% or more.
As promptly as practical, the Company intends, pursuant to the
terms of the Investment Agreement, to issue up to 2,908,071 shares
of its Common Stock through a rights offering, pursuant to which
stockholders who hold shares of the Company's Common Stock on
March 23, 2011, after giving effect to the Reverse Split, will
receive the right to purchase three post-Reverse Split shares of
the Company's Common Stock for each one post-Reverse Split share
held by such stockholder at $3.00 per share (or $0.60 per share
pre-Reverse Split). If upon the closing of the Rights Offering
any of the 2,908,071 shares remain unsold, such remaining shares
will be sold to Bear State at a purchase price of $3.00 per share
(or $0.60 per share pre-Reverse Split) in a private placement,
subject to an overall limitation on Bear State's ownership of
94.90% of our Common Stock.
The Company anticipates that the closing of the above referenced
Rights Offering will result in the Company regaining compliance
with the Publicly Held Share Rule. The Company anticipates that
the Rights Offering will close prior to June 20, 2011.
About First Federal Bancshares of Arkansas
First Federal Bancshares of Arkansas, Inc. (NASDAQ GM:FFBH) --
http://www.ffbh.com/-- is a unitary savings and loan holding
company for First Federal Bank, a community bank serving consumers
and businesses with a full range of checking, savings, investment
and loan products and services. The Bank, founded in 1934,
conducts business from 20 full-service branch locations, one
stand-alone loan production office, and 30 ATMs located in
Northcentral and Northwest Arkansas.
The Company's balance sheet at March 31, 2011, showed
$577.67 million in total assets, $542.88 million in total
liabilities, and $34.79 million in total stockholders' equity.
The Company reported a net loss of $4.03 million on $29.82 million
of total interest income for the year ended Dec. 31, 2010,
compared with a net loss of $45.49 million on $36.04 million in
total interest income during the prior year.
BKD, LLP expressed substantial doubt about the bank holding
company's ability to continue as a going concern. The accounting
firm noted that the Company has experienced significant losses in
recent years and has significant levels of nonperforming assets.
Furthermore, the Company has entered into a written agreement with
the Office of Thrift Supervision which requires the Company to
meet certain capital requirements by Dec. 31, 2010, which were not
met.
FIRST FEDERAL: To Offer Rights to Purchase $2.91MM Common Shares
----------------------------------------------------------------
First Federal Bancshares of Arkansas, Inc., filed with the U.S.
Securities and Exchange Commission an Amendment No.1 to Form S-1
registration statement relating to the distribution, at no charge,
to holders of the Company's common stock, $0.01 par value per
share, non-transferable subscription rights to purchase up to
2,908,071 shares of Common Stock at a price of $3.00 per share in
this Rights offering, which could result in net proceeds of
approximately $8.5 million. Holders will receive one Right for
each share of the Company's Common Stock, as adjusted to take into
account the 1-for-5 reverse stock split that occurred on May 3,
2011, held by the holders of record as of 5:00 p.m., Eastern Time,
on March 23, 2011.
Each Right will entitle to purchase three shares of Common Stock
at a subscription price of $3.00 per share (or $0.60 per share
pre-Reverse Split).
A full-text copy of the Amended Prospectus is available at no
charge at http://is.gd/V18MXr
About First Federal Bancshares of Arkansas
First Federal Bancshares of Arkansas, Inc. (NASDAQ GM:FFBH) --
http://www.ffbh.com/-- is a unitary savings and loan holding
company for First Federal Bank, a community bank serving consumers
and businesses with a full range of checking, savings, investment
and loan products and services. The Bank, founded in 1934,
conducts business from 20 full-service branch locations, one
stand-alone loan production office, and 30 ATMs located in
Northcentral and Northwest Arkansas.
The Company's balance sheet at March 31, 2011, showed
$577.67 million in total assets, $542.88 million in total
liabilities, and $34.79 million in total stockholders' equity.
The Company reported a net loss of $4.03 million on $29.82 million
of total interest income for the year ended Dec. 31, 2010,
compared with a net loss of $45.49 million on $36.04 million in
total interest income during the prior year.
BKD, LLP expressed substantial doubt about the bank holding
company's ability to continue as a going concern. The accounting
firm noted that the Company has experienced significant losses in
recent years and has significant levels of nonperforming assets.
Furthermore, the Company has entered into a written agreement with
the Office of Thrift Supervision which requires the Company to
meet certain capital requirements by Dec. 31, 2010, which were not
met.
FRENCH BROAD: Plan Outline Hearing Continued Until May 18
---------------------------------------------------------
The Hon. George R. Hodges of the U.S. Bankruptcy Court for the
Western District of North Carolina has continued until May 18,
2011, at 9:30 a.m., the hearing to consider the confirmation of
the proposed Chapter 11 plan of French Broad LLC.
The Court approved the disclosure statement explaining the Plan on
Feb. 23.
As reported in the Troubled Company Reporter on March 9, 2011,
according to the Disclosure Statement, the Plan provides for
creditors to be paid in full from the sale of units by French
Broad Place. Under the Plan, Metromont Corporation, owed
$2,961,431 for its DIP claim, will receive 10% per annum accrued
interest for a period of 13 months, principal reduction will be
paid periodically as future inventory sales close on account of
Metromont's secured claim. Metromont will receive 40% of all
future net sales proceeds to be applied to the principal loan
balance outstanding.
Ashville Savings Bank, owed $8,620,619, secured by a second lien
deed of trust on the assets of the Debtor, will receive 40% of all
future sales net proceeds applied to the principal loan balance
outstanding on account of Ashville's impaired secured claim. Once
the DIP loan is repaid 100%, then 100% of the future NSP will be
paid to Ashville as loan principal reduction until paid in full
with interest at the contract rate.
Metromont, owed $2,765,234 secured by a third lien deed of trust,
will not be paid interest or principal during the DIP loan tenure.
The second deed of trust contract note will accrue interest at 5%
from the date of the Plan. Once the DIP loan is repaid 10% and
Ashville Savings Bank is repaid 100%, then Metromont will receive
monthly interest at 5% and 100% of future NSP until repaid 100%.
Ed Burdette Construction, holder a materialman's/mechanics lien in
the amount of $2,627,773, will have its claim paid as a general
unsecured claim.
General unsecured creditors, expected to total $3,300,000, which
includes the secured claim of Ed Burdette, will be paid in full
over a period of three years.
A copy of the Court-approved disclosure statement is available for
free at http://bankrupt.com/misc/French_Broad_Final_DS.pdf
About French Broad
French Broad Place LLC was formed for the development of a 48-unit
mixed used real estate community in downtown Brevard, North
Carolina. The owners -- led by Scott Latell and Joshua Burdette
as managing members -- have over $4,500,000 of cash equity in the
development to date. Appraisals conducted in the spring of 2010
valued the property from $10,500,000 to $12,5000,000. Secured
claims by lenders exceed $14,000,000.
French Broad Place LLC filed for Chapter 11 bankruptcy protection
on March 25, 2010 (Bankr. W.D. N.C. Case No. 10-10335). Edward C.
Hay, Jr., Esq., at Pitts, Hay & Hugenschmidt, P.A., represents the
Debtor. The Company disclosed $20,171,100 in assets and
$14,395,245 in liabilities as of the Chapter 11 filing.
FUSION TELECOMMUNICATIONS: Borrows $10,000 from Marvin Rosen
------------------------------------------------------------
Fusion Telecommunications International, Inc., borrowed $10,000
from Marvin S Rosen, a director of the Company. This note (a) is
payable on demand in full upon ten days notice of demand from the
lender, (b) bears interest on the unpaid principal amount at the
rate of 3.25% per annum, and (c) grants the lender a
collateralized security interest, pari passu with other lenders,
in the Company's accounts receivable. The proceeds of this note
are to be used primarily for general corporate purposes.
About Fusion Telecommunications
New York City-based Fusion Telecommunications International, Inc.
(OTC BB: FSNN) is a provider of Internet Protocol ("IP") based
digital voice and data communications services to corporations and
carriers worldwide.
As reported by the TCR on April 26, 2011, Rothstein, Kass &
Company, P.C., in Roseland, New Jersey, expressed substantial
doubt about Fusion Telecommunications' ability to continue as a
going concern. The independent auditors noted that the Company
the Company has negative working capital balances, incurred
negative cash flows from operations and net losses since
inception, and has limited capital to fund future operations.
Fusion Telecommunications reported a net loss of $5.8 million on
$41.8 million of revenues for 2010, compared with a net loss of
$9.6 million on $40.9 million of revenues for 2009.
At Dec. 31, 2010, the Company's balance sheet showed $5.0 million
in total assets, $13.0 million in total liabilities, and a
stockholders' deficit of $8.0 million.
GANESS MAHARAJ: Court Rejects Plan, Permits Appeal to 4th Cir.
--------------------------------------------------------------
Confirmation of Ganess and Vena Maharj's Chapter 11 plan is
opposed by a nominally secured creditor, DB Structured Products,
whose subordinate deed of trust against the Debtors' residence
would be stripped off. Additionally, the plan has not been
accepted by the class of general unsecured creditors, who will
receive an estimated 1.7 cents on the dollar over a period of five
years. Since the Debtors are retaining ownership of their
business as well as certain other assets, the question is squarely
raised as to whether the absolute priority rule continues to apply
in a chapter 11 case of an individual debtor following the
amendments made by the Bankruptcy Abuse Prevention and Consumer
Protection Act of 2005. The United States Trustee supports the
Debtors' position that the absolute priority rule does not apply.
A hearing was held on March 17, 2011, at which the court received
evidence and heard the contentions of the parties.
In a May 9, 2011 Memorandum Opinion, Bankruptcy Judge Stephen S.
Mitchell held that the absolute priority rule continues to apply
and precluded confirmation of the Debtors' plan.
Judge Mitchell, however, noted he "recognizes that a number of
able jurists have held to the contrary, and the reported opinions
are more or less evenly split. No court of appeals has yet ruled
on the issue, which is one of considerable public importance. The
number of individual chapter 11 filings appears to have risen
rather dramatically in the last two years, and the continued
existence or not of the absolute priority rule will dictate
whether plans can actually be confirmed in many of those cases.
Because the issue is clearly one of great importance and needs to
be authoritatively decided, the Court will, if the debtors so
request, certify its ruling under 28 U.S.C. Sec. 158(d)(2)(A)(i)
for direct appeal to the United States Court of Appeals for the
Fourth Circuit."
A copy of Judge Mitchell's ruling is available at
http://is.gd/bOlXF5from Leagle.com.
Ganess Maharaj and Vena Maharaj are husband and wife. He is an
autobody technician, and she is a receptionist. Since 1988, the
Maharajs have operated an auto body business called D&V, Inc.,
also known as D&V Autobody. From 1988 through 2007, the Maharajs
operated D&V at their residence located at 25872 Poland Road,
Chantilly, Virginia. The Maharajs filed for Chapter 11 bankruptcy
(Bankr. E.D. Va. Case No. 09-15777) on July 21, 2009, represented
by:
Ann E. Schmitt, Esq.
CULBERT & SCHMITT, PLLC
30C Catoctin Circle SE
Leesburg, VA 20175
Tel: (703) 737-6377
Fax: 703-737-6370
E-mail: aschmitt@culbert-schmitt.com
GARDEN APTS: Case Summary & 14 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Garden Apts. LLC
aka Gardenview Apartments
4127 W. 127th Street
Alsip, IL 60803
Bankruptcy Case No.: 11-19271
Chapter 11 Petition Date: May 5, 2011
Court: United States Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: Eugene R. Wedoff
Debtor's Counsel: David K. Welch, Esq.
CRANE HEYMAN SIMON WELCH & CLAR
135 S Lasalle St., Suite 3705
Chicago, IL 60603
Tel: (312) 641-6777
Fax: (312) 641-7114
E-mail: dwelch@craneheyman.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 14 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/ilnb11-19271.pdf
The petition was signed by Joseph Junkovic, manager.
Affiliate that filed separate Chapter 11 petition:
Petition
Debtor Case No. Date
------ -------- ----
Joseph Junkovic 10-55888 12/20/10
GCI INC: Moody's Gives 'B2' Rating on New Note Offering
-------------------------------------------------------
Moody's Investors Service has assigned a B2 rating to GCI, Inc.'s
proposed new $325 million senior unsecured note offering and
affirmed GCI's B1 corporate family rating (CFR). The company plans
to use the proceeds of the new notes offering to refinance its
existing $320 million 7.25% senior unsecured notes due 2014. The
outlook is stable.
Moody's has taken these rating actions:
Issuer: GCI, Inc.
-- Corporate Family Rating: B1 (unchanged)
-- Probability of Default Rating: B1 (unchanged)
-- Speculative Grade Liquidity: SGL 2 (unchanged)
Outlook: Stable (unchanged)
-- $325 Million New Senior Unsecured Notes due 2021, Assigned
B2 (LGD4 -- 61%)
-- $425 Million Senior Unsecured Notes due 2019, B2 (LGD4 --
61% vs. LGD4 -- 59% prior)
Ratings Rationale
GCI's corporate family rating reflects the company's modest
leverage, small scale and the highly competitive environment
in which it operates as well as the capital intensity of the
industry. The B1 rating also recognizes the company's shareholder
friendly financial policy and its reliance upon universal service
subsidies.
The rating is supported by GCI's base of recurring revenues which
have grown steadily, more than offsetting the pressure on voice
service pricing. Additionally, the company's success in capturing
market share with wireless and its quad-play service offering
offer an opportunity to continue growth.
The LGD assessment of GCI, Inc.'s senior unsecured notes reflects
the liabilities, both debt and non-debt, held at GCI's operating
companies. The company was awarded a federal stimulus grant to
provide broadband services to a rural community in Southeast
Alaska. The company will borrow half of the $88 million cost with
the remainder coming from a federal grant. The loan portion is RUS
debt secured at the operating subsidiary level. Additionally, the
company maintains a $75 million secured revolver at GCI Holdings,
Inc, an intermediate subsidiary of GCI Inc.. Both these
liabilities, along with the non-debt liabilities at the operating
subsidiaries are senior to the unsecured notes and result in a
one-notch difference from the B1 CFR.
Moody's views GCI's liquidity as good, and projects the company
will exit 2011 with over $30 million in cash. GCI's $75 million
revolving credit facility had $20 million outstanding at Dec. 31,
2010. Moody's anticipates that the company will use the revolver
to meet near term liquidity needs, especially as it implements its
relatively aggressive share repurchase program.
Upward ratings pressure may develop if Debt/EBITDA leverage drops
below 4.25x and FCF/TD Debt improves to 5%. Maintenance of a
strong liquidity position would also be a prerequisite.
The ratings may face downward pressure if GCI were to turn FCF
negative or if the company is involved in material debt-financed
acquisition activity or in the event of adverse liquidity
developments. Specifically, Debt/EBITDA leverage moving above 5.5x
would likely trigger a ratings downgrade.
The principal methodology used in this rating was Moody's Global
Telecommunications Industry published in December 2010.
The last rating action Moody's has made on GCI was on October 20,
2009 when the company's senior unsecured notes were rated B2.
GCI is a leading integrated, facilities-based communications
provider based in Anchorage, Alaska, offering local and long-
distance voice, cable video, data and Internet services to
consumer and commercial customers throughout most of the State of
Alaska.
GCI INC: S&P Gives 'BB' Issue-Level Rating on $325MM Sr. Notes
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its issue-level and
recovery ratings to Anchorage-based diversified telecommunications
provider GCI Inc.'s proposed $325 million of senior notes due
2021. "We rated the notes 'BB-' with a '4' recovery rating, which
indicates expectations for average (30% to 50%) recovery in the
event of default. The company will use the proceeds to tender
for its $320 million of senior notes due 2014 and pay related fees
and expenses. Total debt is expected to be about $878 million,"
S&P said.
"At the same time, we affirmed the 'BB-' corporate credit rating
and all other ratings on GCI," said Standard & Poor's credit
analyst Allyn Arden. The outlook is stable. The transaction does
not result in any change to the company's credit measures,
including adjusted leverage of 4.4x, although it does modestly
improve GCI's maturity profile," S&P continued.
The ratings on GCI continue to reflect its significant exposure to
the highly competitive Alaskan telecom market, lack of geographic
diversity, a declining network access business, and an aggressive
financial policy, including ongoing share repurchases. Tempering
factors include GCI's well-positioned, although maturing,
incumbent cable TV business and limited competition from
direct-to-home (DTH) satellite; growth in wireless services; and
bundled service offerings, which help improve customer retention.
GCI primarily offers telecommunications and cable TV services in
Alaska. The local telecom business has shown solid growth,
including attaining a wireline phone penetration almost equal to
the incumbent local exchange carrier (ILEC) Alaska Communications
Systems Holdings Inc. (ACS) in a number of major Alaskan markets.
Still, GCI still faces highly competitive conditions. The network
access (long-distance and carrier services) business has a leading
market share and is bolstered by long-term contracts. However,
weaker pricing trends, increased competition, and the migration of
AT&T Mobility's traffic off of GCI's network have eroded financial
performance of this business segment over the past year.
GCI's cable and wireless segments have favorable business
characteristics.
The cable business is the dominant provider of video and broadband
services in Alaska. It also benefits from below-industry-average
DTH satellite penetration, given the physical limitations placed
on DTH by Alaska's geography and volatile climate. However, basic
residential subscriber video trends have been flat the past few
quarters because of the maturity of that product. Growth in the
cable segment has primarily reflected increasing penetration of
broadband, telephony, and enhanced video services.
To improve customer retention and propel longer term growth, GCI
is expanding its telecommunications services into rural Alaskan
communities and is also offering its own wireless service,
achieved through a combination of acquisitions and the deployment
of a proprietary network. "Most of the resale customers to whom
GCI was providing wireless services through Dobson Communications
Inc. have been converted to GCI's network, which we expect to lead
to higher margins in this business in the near term, coupled with
organic growth. Nevertheless, while the company has achieved solid
market share gains to date and healthy growth in more
underpenetrated rural markets, Standard & Poor's Ratings Services
believes that continued strong growth is uncertain, given GCI's
limited operating history as a wireless carrier and the highly
competitive nature of the Alaskan wireless market, including
competition from wireless carrier AT&T Mobility, which carries the
very popular iPhone product," S&P noted.
In the fourth quarter of 2010, GCI's total revenue and EBITDA grew
a healthy 12%, year over year, reflecting strong demand in
consumer segment, partially offset by continued weakness in the
network access business. The EBITDA margin was solid at 34% in
2010 and improved from 32% in the year-ago period.
"Despite price compression in the network access business, we
expect margins to remain in the mid-30% area over the next year,"
S&P added.
GENON MID-ATLANTIC: Fitch Affirms Issuer Default Rating at 'B+'
---------------------------------------------------------------
Fitch Ratings has affirmed the 'B+' Issuer Default Rating (IDR)
of GenOn Mid-Atlantic, LLC (formerly Mirant Mid-Atlantic, LLC)
and the 'BB+/RR1' rating of its lease obligation pass through
certificates. Approximately $1 billion of pass through
certificates are outstanding. At the same time, Fitch withdraws
GenOn North America, LLC's (formerly Mirant North America, LLC)
'B+' IDR and the 'BB/RR1' ratings associated with its bank and
term loans. All debts related to this entity were retired
following the merger of Mirant Corp. (Mirant) and RRI Energy
(RRI) to create GenOn Energy, Inc. ('B' IDR). The Rating Outlook
for GenOn Mid-Atlantic, LLC, is Stable.
On Dec. 17, 2010, Fitch affirmed the 'B+' IDR of GenOn Americas
Generation, LLC, the parent of GenOn North America which in turn
is the parent of GenOn Mid-Atlantic. Debt associated with GenOn
North America was discharged concomitant with the closing of the
Mirant and RRI merger in December 2010 and redeemed on Jan. 3,
2011.
GILLANI CONSULTING: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: Gillani Consulting, Inc.
833 East Arapaho Road, Suite 102
Richardson, TX 75081
Bankruptcy Case No.: 11-19440
Chapter 11 Petition Date: May 5, 2011
Court: United States Bankruptcy Court
District of Maryland (Greenbelt)
Judge: Thomas J. Catliota
Debtor's Counsel: Richard H. Gins, Esq.
THE LAW OFFICE OF RICHARD H. GINS, LLC
3 Bethesda Metro Center, Suite 530
Bethesda, MD 20814
Tel: (301) 718-1078
Fax: (301) 718-8359
E-mail: richard@ginslaw.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by Syed M. Bilal, chief operating officer.
GIORDANO'S ENTERPRISES: Ally Financial Wants to Recover Cadillac
----------------------------------------------------------------
Katy Stech, writing for Dow Jones' Daily Bankruptcy Review,
reports that attorneys for auto lender Ally Financial have asked
for the bankruptcy court's permission to take over the 2007
Cadillac DTS that it had leased to Giordano's, formally Giordano's
Enterprises Inc. in its Chapter 11 bankruptcy filings.
DBR reports that the restaurant company began leasing the vehicle
in July 2007, according to court documents filed Friday in U.S.
Bankruptcy Court in Chicago. It later fell behind in payments now
amounting to a $3,325 claim.
DBR says Ally Financial attorneys argued that the vehicle doesn't
play a critical role in the restaurant company's financial
reorganization.
About Giordano's Enterprises
Chicago, Illinois-based Giordano's Enterprises, Inc., was founded
in 1974 in Chicago, Illinois, by two Argentinean immigrants, Efren
and Joseph Boglio. In 1988, John and Eva Apostolou purchased
control of Giordano's. Although this casual dining eatery offers
a broad array of fine Italian cuisine, it is primarily know for
its "Chicago's World Famous Stuffed Pizza". At present,
Giordano's operates six company owned stores in Chicagoland, four
joint venture stores, and thirty-five franchisee locations. In
addition, Giordano's operates Americana Foods, Inc., located in
Mount Prospect, Illinois, that serves as the commissary for the
majority of food products purchased by the Illinois locations.
An affiliated real estate holding company, Randolph Partners, LP,
owns 12 restaurant buildings that are leased to four of the
company-owned locations, two of the joint venture locations and
six of the franchisee locations. The other 33 locations are
leased from third party landlords; two for the Giordano's
locations, two for the joint venture locations and 29 for the
franchise locations. Giordano's is the lessee and subleases the
restaurant facility for 22 of the 29 franchise third party leases.
JBA Equipment Finance, Inc, another affiliated entity, leases
restaurant equipment packages to eight franchisee locations.
Giordano's Enterprises and 26 affiliates filed for Chapter 11
bankruptcy protection (Bankr. N.D. Ill. Lead Case No. 11-06098) on
Feb. 16, 2011. Six additional affiliates filed for Chapter 11
protection on Feb. 17, 2011. Kevin H Morse, Esq., and Michael L.
Gesas, Esq., at Arnstein & Lehr, LLP, serve as the Debtor's
bankruptcy counsel. Giordano's Enterprises estimated assets and
debts of $0 to $50,000 in its Chapter 11 petition.
Certain of the Debtors owe Fifth Third Bank not than $13,560,662,
pursuant to loans and financial accommodations, and $31,927,998
under a business loan as of the Petition Date. Fifth Third has
agreed to provide DIP financing of up to $35,983,563 to the
Debtors.
GLOBAL CROSSING: Files Form 10-Q; Posts $33MM Loss in 1st Qtr.
--------------------------------------------------------------
Global Crossing Limited filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q reporting a
net loss of $33 million on $661 million of revenue for the three
months ended March 31, 2011, compared with a net loss of $119
million on $648 million of revenue for the same period a year ago.
The Company's balance sheet at March 31, 2011, showed $2.26
billion in total assets, $2.78 billion in total liabilities and a
$525 million total shareholders' deficit.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/vHlwDF
About Global Crossing
Based in Hamilton, Bermuda, Global Crossing Limited (NASDAQ: GLBC)
-- http://www.globalcrossing.com/-- is a global IP, Ethernet,
data center and video solutions provider with the world's first
integrated global IP-based network.
Global Crossing Limited reported a consolidated net loss of
$172 million on $2.609 billion of consolidated revenue for the
twelve months ended Dec. 31, 2010, compared with a net loss of
$141 million on $2.159 billion of revenue during the prior year.
* * *
As reported by the Troubled Company Reporter on March 31, 2010,
Standard & Poor's Ratings Services raised all its ratings on
Global Crossing, including the corporate credit rating to 'B' from
'B-'. The outlook is stable. S&P assigned its 'CCC+' issue-level
rating and '6' recovery rating to Global Crossing's proposed $150
million of senior unsecured notes due 2019. The '6' recovery
rating indicates S&P's expectation for negligible (0%-10%)
recovery in the event of a payment default.
GOLDENPARK, LLC: Case Summary & 12 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Goldenpark, LLC
13111 Sycamore Drive
Norwalk, CA 90650
Bankruptcy Case No.: 11-30070
Chapter 11 Petition Date: May 8, 2011
Court: U.S. Bankruptcy Court
Central District of California (Los Angeles)
Judge: Peter Carroll
Debtor's Counsel: David B. Golubchik, Esq.
LEVENE NEALE BENDER YOO & BRILL LLP
10250 Constellation Boulevard, Suite 1700
Los Angeles, CA 90067
Tel: (310) 229-1234
E-mail: dbg@lnbrb.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Dae In Kim, managing member.
Debtor's List of 12 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Wilshire State Bank Credit Line $450,000
3200 Wilshire Boulevard
Los Angeles, CA 90010
Internal Revenue Service Payroll Taxes $200,000
Insolvency I Stop 5022
300 N. Los Angeles Street, #4062
Los Angeles, CA 90012-9903
Hilton Corp. Franchise Fees $26,797
4649 Paysphere Circle
Chicago, IL 60674
Pacific Central Alarm Trade $17,063
CA Cities Water Co. Utilities $14,137
Newmarket Int'l Inc. Trade $12,651
Hamilton Meats Trade $9,407
Saflok Trade $8,723
West Central Trade $7,994
Five Star Audio Trade $7,528
HD Supply Trade $6,848
Auto Club of Southern California Trade $5,983
HAWKER BEECHCRAFT: Incurs $74.80 Million Net Loss in 1st Qtr.
-------------------------------------------------------------
Hawker Beechcraft Acquisition Company, LLC, filed with the U.S.
Securities and Exchange Commission its quarterly report on Form
10-Q reporting a net loss of $74.80 million on $558.40 million of
total sales for the three months ended March 31, 2011, compared
with a net loss of $63.40 million on $568.20 million of total
sales for the three months ended March 28, 2010.
The Company's balance sheet at March 31, 2011, showed
$3.12 billion in total assets, $3.39 billion in total liabilities,
and a $275.50 million total deficit.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/J43LPD
About Hawker Beechcraft
Headquartered in Wichita, Kansas, Hawker Beechcraft Acquisition
Company, LLC -- http://www.hawkerbeechcraft.com/-- is a leading
designer and manufacturer of business jet, turboprop and piston
aircraft. The Company is also the sole source provider of the
primary military trainer aircraft to the U.S. Air Force and the
U.S. Navy and provide military trainer aircraft to other
governments. The Company has a diverse customer base, including
corporations, fractional and charter operators, governments and
individuals throughout the world. The Company provides parts,
maintenance and flight support services through an extensive
network of service centers in 32 countries to an estimated
installed fleet of more than 37,000 aircraft.
The Company reported a net loss of $304.3 million on
$2.805 billion of total sales for the year ended Dec. 31, 2010,
compared with a net loss of $451.3 million on $3.198 billion of
total sales during 2009.
* * *
Hawker Beechcraft carries 'Caa2' corporate family and probability
of default ratings from Moody's Investors Service and a 'CCC+'
long-term corporate credit rating from Standard & Poor's Ratings
Services.
HERRIN CLINIC: Court Warns on "Injudicious" Use of FedEx
--------------------------------------------------------
Bankruptcy Judge Laura K. Grandy cautioned the law firm of
SmithAmundsen LLC about the "injudicious" use of Federal Express.
SmithAmundsen is seeking payment for legal services as counsel to
debtors Herrin Clinic Ltd., and Shahriar S. Bozorgzadeh and Kelly
L. Evans.
The Court, however, held that it does not find a need, at this
time, to reduce the amount of out-of-pocket expenses for FedEx
charges for which SmithAmundsen may be reimbursed. In addition,
the Court holds that counsel's time spent in travel should be
compensated at counsel's full hourly rate.
In the Herrin case, William S. Hackney, Esq., and SmithAmundsen is
seeking interim compensation of $77,377.50 and expenses of
$5,765.66. In the individual debtors' case, SmithAmundsen is
seeking interim compensation of $71,051.50 and expenses of
$5,792.40. The amounts sought have been challenged by the United
States Trustee and by Herrin Security Bank pursuant to 11 U.S.C.
Sec. 330(a)(1) on the basis that some of the fees and expenses are
not reasonable in amount, are duplicative between the two
bankruptcy estates, or have not benefited the bankruptcy estates.
After conducting a thorough examination of the applications, the
objections and the bankruptcy case records of both cases, the
Court held that the attorney fees and expenses should be reduced.
A copy of Judge Grandy's May 6, 2011 Opinion is available at
http://is.gd/N8h4Ksfrom Leagle.com.
The small business Chapter 11 cases of Herrin Clinic Ltd., and
Shahriar S. Bozorgzadeh and Kelly L. Evans (Bankr. S.D. Ill. Case
Nos. 10-40189 and 10-40190) were filed on Feb. 11, 2010, primarily
as the result of a $920,403.26 state court judgment entered in
favor of Javier Muniz and against the debtors and Herrin Medical
Clinic, Ltd., a dissolved medical practice in which the individual
debtors and Muniz had practiced together at one time. Herrin and
the individual debtors have appealed the judgment issued in the
state court. With the result of the pending appeal having a
determinative impact on the formulation of a plan of
reorganization, Herrin and the individual debtors have obtained
two extensions of time, until after the appellate mandate issues,
to file a disclosure statement and plan of reorganization and to
confirm a plan of reorganization. Since the cases were filed in
early 2010, there has been little activity that was significant or
contested. As a result, the cases are best characterized as
placeholders, offering chapter 11 protections to Herrin and the
individual debtors while they await the decision of the appellate
court.
HERTZ CORP: Moody's Reviews Low-B Ratings for Possible Downgrade
----------------------------------------------------------------
Moody's Investors Service is reviewing the ratings of The Hertz
Corporation for possible downgrade following the company's revised
offer to acquire Dollar Thrifty Automotive Group (Dollar) for
$72 per share. The offer represents a total price of approximately
$2.1 billion consisting of $1.7 billion of cash and $400 million
of Hertz shares. Ratings under review include: Corporate Family
Rating (CFR) and Probability of Default Rating (PDR) at B1; senior
secured credit facilities at Ba1; secured Euro notes at B1; and
unsecured at B2. The company's Speculative Grade Liquidity rating
remains at SGL-3.
The outcome of the review will be determined by Hertz's ability
to close the proposed transaction, the final purchase price and
financing structure, and the degree to which the future earnings
and synergies harvested from Dollar can offset the costs of the
additional debt needed to fund the transaction. Additional
considerations will be the company's ability to maintain adequate
liquidity and funding sources given a larger vehicle fleet, and
its capacity to contend with the inherent cyclicality in the car
and equipment rental sector in the face of a higher debt burden.
Industry fundamentals within the North American car rental sector
continue to improve. Fleet size is being managed in a disciplined
manner, used car prices should remain strong through 2012, and
there have been no sustained efforts by competitors to gain share
through price reductions. Consequently, the earnings outlook for
Hertz and Dollar have continued to strengthen. These positive
industry fundamentals, along with the considerable synergies that
would result from the acquisition, have the potential to sustain
Hertz's current B1 CFR should the proposed offer for Dollar go
through. However, the key risk is that Hertz might have to pay a
higher price to acquire Dollar as a result of a bidding contest
with Avis Budget Group, Inc.
Hertz's $72 per share offer for Dollar is in competition with an
offer of approximately $59 per share from Avis. Neither the Hertz
offer nor the Avis offer has been accepted by Dollar, and the Avis
offer has been undergoing FTC review since December 2010. Hertz's
current offer is a significant increase over a $50 per share offer
that was rejected by Dollar shareholders in November 2010.
Following that rejection Hertz withdrew its offer and stated that
it was terminating its efforts to acquire Dollar. Upon Hertz's
withdrawal from the bidding contest for Dollar, Moody's confirmed
the company's ratings, but noted that the ratings would come under
pressure if Hertz were to resubmit an offer for Dollar.
The principal methodologies used in this rating were Global
Equipment and Automobile Rental Industry published in December
2010, and Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.
The last rating action for Hertz was confirmation of the B1 CFR on
November 30, 2010.
HOST HOTELS: Fitch Puts 'BB' Rating on Private Placement Sr. Notes
------------------------------------------------------------------
Fitch Ratings has assigned a 'BB' rating to the $425 million
5.875% private placement senior notes due 2029 issued by Host
Hotels & Resorts, L.P., the sole general partner of Host Hotels &
Resorts, Inc. (NYSE: HST). Fitch currently rates the company:
Host Hotels & Resorts, Inc.
-- Issuer Default Rating (IDR) 'BB'.
Host Hotels & Resorts, L.P.
-- IDR 'BB';
-- Bank credit facility 'BB';
-- Senior notes 'BB';
-- Exchangeable senior debentures 'BB'.
The Rating Outlook is Stable.
The net proceeds of the offering of approximately $415 million
will be used to redeem the company's entire $250 million aggregate
principal amount of outstanding 7.125% Series K senior notes due
November 2013, to repay $50 million in borrowings under the
company's bank credit facility, and for general corporate
purposes. The offering is expected to close May 11, 2011, subject
to the satisfaction or waiver of customary closing conditions.
Headquartered in Bethesda, MD, Host Hotels & Resorts, Inc., is a
lodging real estate investment trust focused on luxury and upper-
upscale hotels. Host currently owns 123 properties totaling
approximately 65,700 rooms, and also holds a non-controlling
interest in a joint venture in Europe that owns 11 hotels with
approximately 3,500 rooms. As of March 31, 2011, Host had
$12.5 billion in total assets and shareholders' equity of
$6.4 billion.
HOTI ENTERPRISES: Creditors Have Until June 1 to File Claims
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave creditors in the Chapter 11 cases of Hoti Enterprises, LP,
and Hoti Realty Management Co., Inc., until June 1, 2011, to file
proofs of claim.
The request for the establishment of a bar date in the Debtors'
cases came from GECMC 2007 C-1 Burnett Street, LLC, the holder of
a first mortgage on the sole asset of Hoti Enterprises, LP.
Proofs of claim to be filed on the Bar Date are:
(a) those proofs of claim to be filed by all persons and
entities, that assert a claim, as defined in Section 101(5)
of the Bankruptcy Code, against the Debtors which arose on
or prior to the filing of the Chapter 11 petitions on
October 12, 2010;
(b) those proofs of claim filed by governmental units; and
(c) those proofs of claim filed by entities asserting a claim
for payment of administrative expenses, including, but not
limited to, claims for goods delivered to the Debtors
within 20 days before the Petition Date under Sections
503(b)(9) or 507(a)(1) of the Bankruptcy Code, professional
fees rendered and expenses incurred and entitled to payment
under Sections 327, 328, 330 or 503 of the Bankruptcy Code,
and any other applicable provision of the Bankruptcy Code
that accrued prior to April 26, 2011.
About Hoti Enterprises
Harrison, New York-based Hoti Enterprises, LP, is a single asset
real estate holding company that owns an apartment complex located
at 2801 Fillmore Avenue, 3001 Avenue R and 2719 Fillmore Avenue --
collectively, known as 1865 Burnett Street -- in Brooklyn, New
York. Hoti Realty Management was in the business of owning and
operating a management company that managed the apartment complex.
Hoti filed for Chapter 11 bankruptcy protection on Oct. 12, 2010
(Bankr. S.D.N.Y. Case No. 10-24129). Hoti Enterprises estimated
its assets and debts at $10 million to $50 million.
A receiver of rents was appointed against Hoti Enterprises pre-
bankruptcy pursuant to a foreclosure proceeding commenced by GECMC
2007-C-1 Burnett Street, Hoti's mortgagee and largest secured
creditor.
No Official Committee of Unsecured Creditors has been appointed in
the case.
HOUGHTON MIFFLIN: Fitch Puts 'B-' Issuer Default Rating
-------------------------------------------------------
Fitch Ratings has published its 'B-' Issuer Default Rating (IDR)
on Houghton Mifflin Harcourt Publishers Inc (HMH Publishers) and
its subsidiaries. Fitch has also assigned a 'B/RR3' rating to HMH
Publisher's $1.35 billion proposed senior secured bond offering
due 2019 and to its senior secured credit facilities (including
the proposed new term loans). The Rating Outlook is Stable.
HMH Publishers is expected to use proceeds of the $1.35 billion
senior secured notes and the proposed senior secured term loan due
May 2017 to:
-- Refinance a portion of its existing $2.9 billion secured
credit facility;
-- Replace cash used to fund the $150 million note which
matured in March 2011;
-- Pay fees related to the transaction; and
-- For general corporate purposes.
In addition, 50% of the remaining credit facility balance is
expected to have its maturities extended from Dec. 2013
(revolver)/June 2014 (term loan) to May 2017 (expiring at the same
time as the new term loans).
The proposed capital structure would result in $3.2 billion in
funded debt, all guaranteed and secured with a first priority lien
on substantially all of the assets of HMH Publishers, the co-
borrowers and the assets of the guarantors. The guarantors include
HMH Publishers' parent holding company and U.S. subsidiaries that
make up a material portion of the business (100% of revenues and
98% of total assets).
Terms of the senior secured bonds include a change of control put
offer at 101%. A change of control is defined as a sale of all or
substantially all the assets of the borrower or subsidiary
guarantors, or if 50% of the voting control is acquired by a
person who is not a Permitted Holder, or if HMH Publishing Company
(parent holding company) is no longer the sole owner of HMH
Publishers.
Terms also include lien restrictions, with standard carveouts and
a general lien basket of $50 million. In addition, there are cross
defaults triggered by payment defaults on other borrower or
subsidiary guarantor debt and acceleration of debt that exceeds
$50 million.
HMH Publishers' Recovery Ratings reflect Fitch's expectation that
the enterprise value of the company, and hence recovery rates for
its creditors, will be maximized in a restructuring scenario
(going-concern) rather than a liquidation.
Fitch estimates an adjusted, distressed enterprise valuation of $2
billion using a 7x multiple. The 'RR3' Recovery Ratings for the
secured debt issues, represent an expected recovery at the lowest
end of Fitch's 51% to 70% range. There is very limited headroom in
the Recovery Rating for any additional debt (whether funded or
committed capacity).
The ratings reflect:
-- HMH Publishers' position as a leading educational provider
in the United States K-12 education market (captured 37% of
the 2010 adoption and open territory market excluding
Advanced Placement Sales based on Association of American
Publishers and company data). The ratings incorporate
Fitch's expectation that HMH Publishers will, at a minimum,
be able to defend its market share.
-- Fitch expects that state budgets will continue to come under
cyclical pressure and that any rebound in state and local
economies will be slower than the general economy, driven in
part by relatively high unemployment. Fitch expects Federal
stimulus aid to provide some offset to state spending
declines in K-12 education for 2011.
-- Ratings reflect that the American Recovery & Reinvestment
Act (ARRA) federal funds are expected to end in 2011. The
ARRA provided approximately $80 billion in additional
federal funds to offset the reduction of state spending on
K-12 education.
-- While there continues to be risk for further cuts in K-12
education funding, Fitch believes that a material portion of
the cuts will be on teachers, supporting personnel and
potential closings of schools. Education material purchases
may continue to be deferred, but Fitch believes at some
point textbooks and related materials need to be updated
and/or replaced.
-- Education has historically been and continues to be a
priority for the administration and federal law makers. The
total federal K-12 education budget (separate from the ARRA)
has remained relatively consistent, including the proposed
2012 budgets (which has not been finalized).
-- Fitch believes the adoption of the Common Core Standards by
over 40 states should help drive new sales of textbooks and
teaching materials.
-- The ratings incorporate Fitch's expectation and belief that
the education business is in a cyclical trough and that on a
long term basis the market is expected to grow in the low
single digits.
-- The ratings incorporate the company's weak credit metrics.
Fitch calculated adjusted interest coverage is expected to
be under 2 times (x), over the next two years, and gross
unadjusted leverage is expected to remain high in the near
to mid term.
Rating Drivers:
An upgrade could occur when Fitch calculated adjusted interest
coverage reaches 2.0x and Fitch comfortably expects it to remain
above this level.
A downgrade of the IDR would likely occur if revenues and EBITDA
were to decline in the low to single digits and high single
digits, respectively, whether due to cyclical pressure in the
education markets or loss of market share to competitors.
Liquidity and Leverage:
Fitch believes that cash balances of $380 million at the end of
Dec. 31, 2010, should be sufficient to weather the continued
cyclical weakness in the K-12 market. Liquidity is further
supported by $113 million in availability under the company's
$250 million accounts receivable facility (A/R Facility), maturing
in 2013. Under the proposed transaction, the company contemplates
to extend the maturity to 2017 and add an additional $100 million
in availability to the facility. This incremental capacity is
expected to have a second priority lien on the A/R Facility
assets.
As proposed, the company would have this maturity profile:
* December 2013 -- $66 million non-extending revolver;
* June 2014 -- $734 million non-extending term loans;
* 2017 -- $1.05 billion in extending and new term loans; A/R
Facility;
* 2019 -- $1.35 billion senior secured notes.
Fitch believes the company will have sufficient liquidity to deal
with the 2013 maturities; however Fitch expects the company to
rely on the capital markets to fund a portion of the 2014
maturities.
As of year-end 2010, Fitch calculates unadjusted gross leverage
at 12x (7x when adjusting for deferred revenue and other one
time items). Fitch expects the company to delever the balance
sheet through a combination of EBITDA expansion and modest
debt repayments (amortization of the term loan, approximately
$20 million a year). However, Fitch expects unadjusted leverage
to remain above 7x in the near term.
Fitch has published these ratings:
HMH Publishers
-- IDR 'B-';
-- Secured 1st Lien Credit Facility 'B'/RR3;
-- Proposed 1st Lien Term Loans 'B'/RR3;
-- Proposed Senior Secured 1st Lien Notes 'B/RR3'
Houghton Mifflin Harcourt Publishing Company.
-- IDR 'B-'.
HMH Publishers LLC
-- IDR 'B-'.
The Outlook is Stable.
IL LUGANO: Has OK for Realty Marketing as Listing Broker
--------------------------------------------------------
Il Lugano LLC sought and obtained authority from the U.S.
Bankruptcy Court for the District of Connecticut, Bridgeport
Division, to employ Realty Marketing & Development Corp. as
listing broker in connection with prospective sales of condominium
units.
The Court overruled the objection raised by EPI Lugano, LLC, and
EPI NCL, LLC, finding that RMDC is a "disinterested person" as the
term is defined in Section 101(14) and that RMDC represents or
holds no interest adverse to Il Lugano's estate.
About Il Lugano
Il Lugano LLC's main asset is a four-star, boutique-styled, luxury
condominium and hotel property located in Ft. Lauderdale,
Florida.
Il Lugano filed for Chapter 11 bankruptcy (Bankr. D. Conn. Case
No. 08-50811) on Aug. 29, 2008, Judge Alan H.W. Shiff presiding.
Douglas J. Buncher, Esq. -- dbuncher@neliganlaw.com-- at Neligan
Foley LLP in Dallas, Texas, and James Berman, Esq. --
jberman@zeislaw.com-- at Zeisler and Zeisler in Bridgeport,
Connecticut, serve as the Debtor's bankruptcy counsel. When the
Debtor filed for protection from its creditors, it estimated
assets between $50 million and $100 million and debts between
$1 million and $10 million.
IL Lugano filed for bankruptcy to prevent any adverse judgment and
subsequent enforcement actions against IL Lugano in a lawsuit
filed by EPI NCL, LLLC, in the Circuit Court of the 17th Judicial
Circuit of Broward County, Florida, which was set for trial on
September 2, 2008, and to allow adequate time for completion of
the restaurant and sale of the property.
SageCrest II is also in chapter 11 proceedings (Bankr. D. Conn.
Case No. 08-50754) before the Connecticut Bankruptcy Court.
IL LUGANO: Can Sell Condo Unit #1208 for $625,000 to John D. Ryan
-----------------------------------------------------------------
Judge Alan H. W. Shiff of the U.S. Bankruptcy Court for the
District of Connecticut, Bridgeport Division, authorized Il
Lugano, LLC, to sell condominium unit #1208, free and clear of all
liens, to John D. Ryan, Trustee for the John D. Ryan Revocable
Trust for $625,000.
The Court also authorized the Debtor to pay a real estate
commission of $31,250, representing 5% of the purchase price, to
Realty Marketing & Development Corp. upon closing of the proposed
sale.
After payment of real estate commissions and closing costs, the
net proceeds to the Debtor from the sale of the Unit are expected
to be $589,786.
The Debtor assert that a sale of the Unit will relieve it from
ongoing expenses at an annual cost of $32,349, associated with
owning the Unit.
About Il Lugano
Il Lugano LLC's main asset is a four-star, boutique-styled, luxury
condominium and hotel property located in Ft. Lauderdale,
Florida.
Il Lugano filed for Chapter 11 bankruptcy (Bankr. D. Conn. Case
No. 08-50811) on Aug. 29, 2008, Judge Alan H.W. Shiff presiding.
Douglas J. Buncher, Esq. -- dbuncher@neliganlaw.com-- at Neligan
Foley LLP in Dallas, Texas, and James Berman, Esq. --
jberman@zeislaw.com-- at Zeisler and Zeisler in Bridgeport,
Connecticut, serve as the Debtor's bankruptcy counsel. When the
Debtor filed for protection from its creditors, it estimated
assets between $50 million and $100 million and debts between
$1 million and $10 million.
IL Lugano filed for bankruptcy to prevent any adverse judgment and
subsequent enforcement actions against IL Lugano in a lawsuit
filed by EPI NCL, LLLC, in the Circuit Court of the 17th Judicial
Circuit of Broward County, Florida, which was set for trial on
September 2, 2008, and to allow adequate time for completion of
the restaurant and sale of the property.
SageCrest II is also in chapter 11 proceedings (Bankr. D. Conn.
Case No. 08-50754) before the Connecticut Bankruptcy Court.
IMPERIAL CAPITAL: Creditors Will Not Be Paid in Full Under Plan
---------------------------------------------------------------
As reported in the TCR on May 4, 2011, the U.S. Bankruptcy Court
for the Southern District of California scheduled a June 9, 2011
hearing to consider the disclosure statement explaining the
proposed Liquidating Plan of Reorganization of Imperial Capital
Bancorp, Inc.
In a regulatory filing Thursday, the Debtor provided a copy of
copy of the proposed Liquidating Plan of Reorganization and a copy
of the disclosure statement, as it was most recently amended and
filed with the Bankruptcy Court on April 28, 2011.
As described in the proposed Liquidating Plan of Reorganization
and the disclosure statement, if the Plan is confirmed by an order
of the Bankruptcy Court, based upon assets available for
distribution, creditors of the Company will not be paid in full
under the Plan. Consequently, the Company predicts that, after
payment to the Company's unsecured creditors, there will be no
assets available for distribution to the holders of the Company's
common stock. Holders of equity interests in the Company will not
receive or retain any property or assets under the Plan and are
therefore deemed to have rejected the Plan and are not entitled to
vote. With no available assets to distribute to the stockholders,
as contemplated in the Plan, the Company expects the Bankruptcy
Court to extinguish the Company's common stock upon approval of
the Plan. Promptly after such extinguishment, the Company will
seek to terminate its registration under Section 12(g) of the
Securities Exchange Act of 1934 by filing a Form 15 with the
Securities and Exchange Commission.
A complete text of the proposed Liquidating Plan of Reorganization
is available for free at http://is.gd/LYmMPr
A copy of the Disclosure Statement as filed on April 28, 2011, is
available for free at http://is.gd/QqHPAn
About Imperial Capital Bancorp
La Jolla, California-based Imperial Capital Bancorp, Inc., filed
for Chapter 11 bankruptcy protection (Bankr. S.D. Calif. Case No.
09-19431) on Dec. 18, 2009. Gregory K. Jones, Esq., at Stutman,
Treister & Glatt, P.C., serves as the Company's bankruptcy
counsel. The Company estimated its assets at $10 million to
$50 million and debts at $100 million in its Chapter 11 petition.
INDIANAPOLIS DOWNS: Gomes Opposes Management Contract Rejection
---------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the bankruptcy judge presiding over the
reorganization of Indianapolis Downs LLC will confront a
frequently posed problem at a hearing on May 17.
Mr. Rochelle notes that Indianapolis Downs filed a motion to
assume a trademark agreement and reject a management contract.
Both are with an affiliate of Gomes & Cordish Gaming Management
LLC. The two contracts were signed four months apart when the
track was being developed.
Mr. Rochelle says that Gomes & Cordish contends that the two
contracts are "inextricably intertwined." Consequently, it argues
that the track cannot terminate the management agreement without
also terminating the trademark licenses, Mr. Rochelle discloses.
Mr. Rochelle says that indicating a willingness to settle, Gomes &
Cordish said in a court filing that it would "consider" allowing
the trademark licenses to go forward if the track agrees to
continue a modified the management arrangement.
About Indianapolis Downs
Indianapolis Downs, LLC, operates a "racino," which is a combined
race track and casino, at a state-of-the-art 283 acre Shelbyville,
Indiana site. It also operates two satellite wagering facilities
in Evansville and Clarksville, Indiana. Total revenue for 2010
was $270 million, representing an 8.7% increase in 2009. The
casino captured 53% of the Indianapolis market share.
In July 2001, Indianapolis Downs was granted a permit to conduct a
horse track operation in Shelvyville, Indiana, and started
operating the track in 2002. It was granted permission to operate
the casino at the racetrack operation in May 2007. The casino
began operations in July 2010.
Indianapolis Downs and subsidiary, Indianapolis Downs Capital
Corp., sought Chapter 11 protection (Bankr. D. Del. Lead Case No.
11-11046) in Wilmington, Delaware, on April 7, 2011. Indianapolis
Downs estimated $500 million to $1 billion in assets and up to
$500 million in debt as of the Chapter 11 filing. According to a
court filing, the Debtor owes $98,125,000 on a first lien debt. It
also owes $375,000,000 on secured notes and $72,649,048 on
subordinated notes.
Matthew L. Hinker, Esq., Scott D. Cousins, Esq., and Victoria
Watson Counihan, Esq., at Greenberg Traurig, LLP in Wilmington,
Delaware, have been tapped as counsel to the Debtors. Christopher
A. Ward, Esq., at Polsinelli Shughart PC, in Wilmington, Delaware,
is the conflicts counsel. Lazard Freres & Co. LLC is the
investment banker. Bose Mckinney & Evans LLP and Bose Public
Affairs Group LLC serve as special counsel. Kobi Partners, LLC,
is the restructuring services provider. Epiq Bankruptcy
Solutions is the claims and notice agent.
INDUSTRIAL SURFACING: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: Industrial Surfacing Corp.
P.O. Box 62
Urbana, IL 61802
Bankruptcy Case No.: 11-90916
Chapter 11 Petition Date: May 6, 2011
Court: United States Bankruptcy Court
Central District of Illinois (Danville)
Judge: Gerald D. Fines
Debtor's Counsel: Jason S. Bartell, Esq.
BARTELL, BARICKMAN & POWELL, LLP
2919 Crossing Court, Suite 10
Champaign, IL 61822
Tel: (217) 352-5900
Fax: (217) 352-0182
E-mail: jbartell@jbar2.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by Rodger Ferguson, president.
INDUSTRY WEST: Fees of Bank Lender's Expert Witness Unreasonable
----------------------------------------------------------------
The confirmed plan in the Chapter 11 case of Industry West
Commerce Center LLC provides for payment in full to oversecured
creditor Central Pacific Bank. The Bank has filed a claim seeking
to recover of interest at the default rate up until plan
confirmation, plus attorneys' fees incurred in the bankruptcy
proceedings and pre-bankruptcy litigation in state court. The
Debtor objects.
In a May 4, 2011 Memorandum, Judge Alan Jaroslovsky held that the
Bank is not entitled to interest at the default rate. An
oversecured creditor is not entitled to interest at the default
rate where its claim is paid in full pursuant to the terms of a
Chapter 11 plan, the judge said, citing General Elec. Capital
Corp. v. Future Media Productions, Inc., 536 F.3d 969, 973 (9th
Cir. 2008). Pursuant to Sec. 506(b) of the Bankruptcy Code, an
oversecured creditor may recover reasonable fees and costs
provided for by agreement or state law, up until confirmation of a
plan, even if the creditor is not successful in its arguments.
After confirmation, the creditor can recover its fees only if it
is the prevailing party.
The Bank seeks a total of $295,685 in fees, of which $105,388.50
is for work done in the Chapter 11 case and the rest is for
prepetition work. It seeks a total of $91,159.87 in costs, of
which $55,273.68 was for an expert witness retained to testify at
the confirmation hearing.
Judge Jaroslovsky said the Bank's postpetition fees are
reasonable. However, the Court finds the fees of the Bank's
expert witness to be unreasonable. The proper scope of an
expert's testimony is to establish facts beyond the knowledge of
the court. The Bank's expert, Richard W. Ferrill, went far beyond
the permissible testimony of an expert. He purported to lecture
the court on the applicable law, offered up an improper opinion as
to the feasibility of the proposed plan, and applied his general
knowledge as an expert to the facts of this case. In other words,
he put himself in the place of the court and attempted to testify
as to the ultimate facts and legal conclusions the court should
reach. While the court tolerated this condescension at the
hearing, it is entirely inappropriate for the court to reward it
by allowing a huge and unreasonable fee as an expense of the Bank.
Accordingly, the court will disallow all but $7,500 of his fees as
a recoverable expense of the bank.
The Court will decide on the issue of the Bank's prepetition
attorneys' fees and costs at a later date. The judge said these
fees are not subject to Sec. 506(b), and may be recovered if
allowable under state law. Neither side, however, has
sufficiently addressed this issue in its briefs.
A copy of the Court's May 4 decision is available at
http://is.gd/fcOTQLfrom Leagle.com.
About Industry West
Santa Rosa, California-based Industry West Commerce Center, LLC, a
California limited liability company, filed for Chapter 11
bankruptcy protection on January 14, 2010 (Bankr. N.D. Calif. Case
No. 10-10088). John H. MacConaghy, Esq., at MacConaghy and
Barnier, assists the Company in its restructuring effort. The
Company estimated assets and debts at $10 million to $50 million
in its Chapter 11 petition.
The Bankruptcy Court confirmed Industry West's Plan of
Reorganization in August 2010. The Plan provides for the
Reorganized Debtor to operate its business without further
supervision or control by the Bankruptcy Court and free of any
restrictions imposed by the Bankruptcy Code. Specifically, and
without limitation, the Reorganized Debtor may sell, lease, or
refinance its properties without further Court order. The
Reorganized Debtor will continue to be managed by Rizzo &
Associates, LLC.
INNKEEPERS USA: Revises Chapter 11 Plan to Add Auction Results
--------------------------------------------------------------
Bill Rochelle, Bloomberg News' bankruptcy columnist, reports that
Innkeepers USA Trust filed a revised reorganization plan May 9
along with an updated disclosure statement incorporating the
outcome of last week's auction where Cerberus Capital Management
LP and Chatham Lodging Trust emerged as the winning bidders.
According to the report, Midland Loan Services Inc., the servicer
for $825 million of fixed-rate mortgage debt on 45 hotels,
immediately filed an objection to the revised plan, arguing that
the plan improperly releases its claims against a holding company
and in the process shortchanges its recovery by several million
dollars. Midland said the revised plan violates provisions in the
commitment agreement that allowed for the auction and lays out the
basic provisions in the plan. Midland contends that an Innkeepers
intermediate holding company called Grand Prix Holdings LLC was
not to receive a release from Midland's deficiency claims of more
than $100 million. Midland points out how the disclosure
statement says that Grand Prix will receive a distribution between
$8.1 million and $3.7 million. By cutting off its deficiency
claim, the value will flow improperly to Apollo, Innkeepers'
owner.
The terms of the revised plan are:
* Lehman Ali Inc. will be paid in full, although the amount of
cash it's to be paid remains blank. Lehman Ali, a non-
bankrupt subsidiary of Lehman Brothers Holdings Inc., has
$238 million in floating-rate mortgages on 20 of the
properties.
* Midland will recover almost 88% although the revised plan
does not say exactly what Midland will receive under the
plan.
* Holders of $131.3 million in mezzanine loans against the 65
hotels will recover about 12%. The disclosure statement has
a blank where the amount of the cash payment to the
mezzanine lenders is mentioned.
* General unsecured creditors, with as much as $7 million in
claims, will split up $4.65 million cash. Their recovery
will range from 67.6% to almost full payment. About
$70 million in loans made during the Chapter 11 case will be
paid off from the purchase price paid by Cerberus and
Chatham.
* There will be no recovery for equity holders, including
Apollo Investment Corp. which acquired the company in July
2007 in a $1.35 billion transaction. In return for a
release, Apollo will pay Midland $3 million.
* The Hilton Suites hotel in Anaheim, California, will be
turned over to the Lehman parent that controls the mezzanine
debt. The special servicer for the mortgage on the Hilton
in Ontario, California, will take over the property and
provide cash for what the disclosure statement calls a
"small percentage recovery" for unsecured creditors.
Sale to Cerberus and Chatham
As reported by the Troubled Company Reporter on May 4, 2011,
Innkeepers concluded a two-day auction that determined the
sponsors of the Company's Plan of Reorganization and yielded an
increase in value of more than $145 million when compared to the
stalking horse bid approved by the Bankruptcy Court.
The first successful proposal was submitted by a joint venture
between the private-equity firm Cerberus Capital Management, L.P.
and real estate investment trust Chatham Lodging. The joint
venture agreed to acquire the Debtors' interests in the portfolio
of hotel properties that comprise the collateral for Innkeepers'
$825.4 million fixed rate mortgage pool loan and the $238 million
floating rate mortgage pool loan. The final purchase price to be
paid by the joint venture is $1.1 billion.
The second successful proposal was submitted by Chatham Lodging
for the five properties (Residence Inn Mission Valley, Residence
Inn Anaheim (Garden Grove), Doubletree Washington, DC, Residence
Inn Tyson's Corner, and Homewood Suites San Antonio) that serve as
collateral for loan trusts serviced by LNR Partners LLC. The final
purchase price is $195 million.
According to DBR, the shareholders said the reason Chatham's bid
went largely unchallenged is that very few potential bidders knew
of the auction.
A hearing on Innkeepers' disclosure statement was scheduled to
take place May 10 and Innkeepers expects that a hearing on
confirmation of their Plan of Reorganization will take place on
June 23.
About Innkeepers USA Trust
Innkeepers USA Trust is a self-administered Maryland real estate
investment trust with a primary business focus on acquiring
premium-branded upscale extended-stay, mid-priced limited service,
and select-service hotels.
Innkeepers, through its indirect subsidiaries, owns and operates
an expansive portfolio of 72 upscale and mid-priced extended-stay
and select-service hotels, consisting of approximately 10,000
rooms, located in 20 states across the United States.
Apollo Investment Corporation acquired Innkeepers in June 2007.
Innkeepers USA Trust and 91 affiliates filed for Chapter 11
protection on July 19, 2010 (Bankr. S.D.N.Y. Case No. 10-13800).
Paul M. Basta, Esq., at Kirkland & Ellis LLP, in New York; Anup
Sathy, P.C., Esq., Marc J. Carmel, Esq., at Kirkland & Ellis in
Chicago; and Daniel T. Donovan, Esq., at Kirkland & Ellis in
Washington, D.C., serve as counsel to the Debtors. AlixPartners
is the restructuring advisor and Marc A. Beilinson is the chief
restructuring officer. Moelis & Company is the financial advisor.
Omni Management Group, LLC, is the claims and notice agent.
Attorneys at Morrison & Foerster, LLP, represent the Official
Committee of Unsecured Creditors.
The Company's consolidated assets for 2009 totaled approximately
$1.5 billion. As of July 19, 2010, the Company and its affiliates
have incurred approximately $1.29 billion of secured debt.
INTERPUBLIC GROUP: Moody's Puts Ba2 Ratings on Review for Upgrade
-----------------------------------------------------------------
Moody's Investors Service placed The Interpublic Group of
Companies, Inc.'s Ba2 Corporate Family rating (CFR) Ba2
Probability of Default rating (PDR), and all associated debt
ratings under review for possible upgrade. The rating outlook
previously had been positive.
The review is prompted by the company's sustained deleveraging and
improvement in operating metrics over the last 18 months. IPG has
benefited from the economic rebound through organic growth, and
generated better than expected free cash flow which it has been
partially applying towards debt reduction. The company's leverage
has declined steadily to 4.0x (incorporating Moody's standard
adjustments) at the end of the first quarter of 2011, from 5.4x at
2009 year end.
Accordingly, the review will largely focus on the company's
ability to continue its improving operating trend, particularly
its prospect for narrowing the difference between its operating
income and EBITDA margins versus those of its peers, having had
consistently lower margins over the past decade. The review will
also strongly consider management's commitment to further
deleveraging and sustaining lower leverage and a strong balance
sheet. The review is expected to conclude over the next several
weeks, and may result in a one or possibly two notch upgrade to
investment grade.
Interpublic's ratings were assigned by evaluating factors that
Moody's considers relevant to the credit profile of the issuer,
such as the company's (i) business risk and competitive position
compared with others within the industry; (ii) capital structure
and financial risk; (iii) projected performance over the near to
intermediate term; and (iv) management's track record and
tolerance for risk. Moody's compared these attributes against
other issuers both within and outside ABC Company's core industry
and believes ABC Company's ratings are comparable to those of
other issuers with similar credit risk.
The Interpublic Group of Companies, Inc. with its headquarters in
New York is among the world's largest advertising, marketing and
corporate communications holding companies in the world. Revenues
and EBITDA (incorporating Moody's standard adjustments) for the
twelve months ending March 31, 2011 were $6.7 billion and
$1.1 billion respectively.
JANE RASHAD: Garza Has OK to Pursue Claims Over Botched Sale
------------------------------------------------------------
Bankruptcy Judge Letitia Z. Paul granted the request of Garza
Properties LLC d/b/a Garza Maldonado Properties LLC for relief
from the automatic stay in the bankruptcy case of Jane Rashad to
proceed with state court litigation.
On June 17, 2008, J. Michael Kelly, an attorney who had
represented the Debtor's former husband, Mohammed N. Rashad, in a
divorce proceeding in California, obtained a judgment against the
Debtor for $79,761, in a proceeding in California. Mr. Kelly
domesticated the judgment in Texas, and on Dec. 21, 2009, obtained
a writ of execution and order of sale as to property located at
2341 Maroneal, Houston, Texas. The sale was scheduled for
March 2, 2010.
On March 2, 2010, the date of the scheduled sale, the Debtor
executed a special warranty deed conveying the property to her
son, Mark Rosetta. The Harris County Constable, Precinct 5,
conducted a levy and sale of the property on March 2, 2010, and
struck off the sale to Garza.
In Adversary Proceeding No. 10-3433, the Debtor has sought
avoidance of the March 2, 2010 sale to Garza. The Debtor asserts
that the sale is void, because the Debtor's obligations to Mr.
Kelly under the June 17, 2008 judgment were extinguished by a
subsequent stipulation; that the writ of execution was improperly
obtained; that the judgment lien could not attach to the property
because it was the Debtor's homestead; and that the transfer to
Garza was either a fraudulent transfer or a preference.
In its request, Garza seeks relief from stay to litigate any
claims it may have against the Debtor in a state court case.
Garza asserts that there is cause for lifting of the stay, in
light of the transfer of the property from the Debtor to Rosetta
on the date of the scheduled foreclosure sale.
A copy of Judge Paul's May 9, 2011 Memorandum Opinion is available
at http://is.gd/74Vmz8from Leagle.com.
Jane Rashad filed a voluntary petition under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Tex. Case No. 10-34549) on May 30,
2010.
KEDZIE/FULLERTON LLC: Case Summary & 20 Largest Unsec Creditors
---------------------------------------------------------------
Debtor: Kedzie/Fullerton, LLC
2408 N. Kedzie Blvd.
Chicago, IL 60647
Bankruptcy Case No.: 11-19492
Chapter 11 Petition Date: May 6, 2011
Court: United States Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: Susan Pierson Sonderby
Debtor's Counsel: David K. Welch, Esq.
CRANE HEYMAN SIMON WELCH & CLAR
135 S Lasalle St., Suite 3705
Chicago, IL 60603
Tel: (312) 641-6777
Fax: (312) 641-7114
E-mail: dwelch@craneheyman.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/ilnb11-19492.pdf
The petition was signed by Relu Stan, manager and member.
LAND O'LAKES: Moody's Raises Rating on $191MM Jr. Debt to 'Ba1'
---------------------------------------------------------------
Moody's Investors Service has upgraded the senior secured debt
ratings of Land O'Lakes to Baa2 from Baa3 and upgraded the
$191 million junior subordinated debt instrument of Land O'Lakes
Capital Trust I to Ba1 from Ba2. In addition, Moody's withdrew the
cooperative's Ba1 Corporate Family Rating, Ba1 Probability of
Default Rating, and SGL-3 Speculative Grade Liquidity rating. The
rating outlook is stable.
Ratings And Ratings Rationale
The ratings upgrade reflects Moody's current view that Land
O'Lakes is fundamentally an investment-grade company. This view is
based largely on the cooperative's demonstrated ability to
generate relatively stable operating performance through difficult
operating conditions such as experienced over the past two years
due to commodity price volatility. As a result of this upgrade,
Moody's has withdrawn all of the cooperative's ratings that are
typically associated with speculative-grade issuers, including the
Corporate Family Rating, Probability of Default Rating, and
Speculative Grade Liquidity rating.
The ratings reflect the strength of the eponymous Land O' Lakes
brand, and the cooperative's high market shares in crop inputs,
shell and specialty eggs, and animal feed. The ratings also take
into consideration the significant improvements that Land O' Lakes
has made to its business portfolio over the past several years
through the sale of its swine, liquid eggs, and other low-margin
businesses, and through other ongoing operational restructurings.
These initiatives have resulted in a more focused and stable
operating profile, improved financial controls and governance, and
gradual financial leverage reduction.
These strengths are balanced against the cooperative's high and
increasing exposure to agricultural and commodity markets that
results in i) periods of high sales and cash flow volatility; and
ii) increased earnings correlation among related operating
segments.
While the cooperative's earnings have flattened over the past two
years due to the soft economy, the diversity of the cooperative's
business lines has delivered relatively stable operating cash flow
during periods of high commodity price volatility. Moody's expects
that the dairy foods and feed businesses will continue to face
challenges in 2011; however, the seed and crop protection
businesses should deliver another year of strong performance
buoyed by rising demand for agricultural products. Depressed dairy
prices have hurt margins in cheese and milk powder, and have
caused distressed dairy farmers to cull herds, which in turn
reduces demand for Land O'Lakes' livestock feed products.
Given Moody's expectation for flat earnings growth and elevated
volatility in agricultural commodity prices, the rating agency
does not anticipate an upgrade in the near-term. However, if Land
O' Lakes is able to materially reduce financial leverage, and
improve the diversity and stability of its product portfolio, an
upgrade could occur. Conversely, if operating performance
deteriorates such that debt to EBITDA is sustained above 3.5
times, a downgrade could occur. The stable outlook reflects
Moody's expectation that Land O'Lakes will maintain relatively
stable credit metrics, and takes into consideration seasonal
working capital flows and commodity price volatility that may
cause intermediate periods of elevated financial leverage.
Ratings Upgraded:
Land O'Lakes, Inc.
-- $375 million senior secured revolving credit facility due
April 2013 to Baa2 from Baa3;
-- $155 million of 6.24% senior secured notes due December 2016
to Baa2 from Baa3;
-- $85 million of 6.67% senior secured notes due December 2019
to Baa2 from Baa3;
-- $85 million of 6.77% senior secured notes due 2021 to Baa2
from Baa3.
Land O'Lakes Capital Trust I
-- $191 million of 7.45% subordinated capital securities to Ba1
from Ba2.
Ratings Withdrawn:
Land O'Lakes, Inc.
-- Corporate Family Rating at Ba1;
-- Probability of Default Rating at Ba1;
-- Speculative Grade Liquidity Rating at SGL-3.
Structural Considerations
The Baa2 ratings on the senior secured debt instruments receive an
approximate one-notch lift due to the secured nature of the
facilities. However, Moody's notes that the terms of these debt
instruments include provisions that would likely cause the
collateral to be released if Land O'Lakes obtains an investment
grade rating from each of two credit rating agencies, including
Moody's.
Underlying the debt capital securities of Land O'Lakes Capital
Trust I are 7.45% subordinated deferrable interest debentures
issued by Land O'Lakes due March 15, 2028. The debentures are non-
callable, are junior in right of payment to all indebtedness of
Land O' Lakes, and feature optional payment deferrals.
Land O'Lakes, Inc., based in Arden Hills, Minnesota, is an
agricultural cooperative focusing on dairy food, animal feed, and
agricultural crop inputs. Moody's-adjusted revenues, EBITDA and
debt/EBITDA for the fiscal year ended Dec. 31, 2010, were
approximately $11.1 billion, $491 million, and 2.3, respectively.
The principal methodology used in rating Land O'Lakes was the
Global Agricultural Cooperatives Industry Methodology, published
March 2010.
LEE ENRIGHT: Case Summary & 8 Largest Unsecured Creditors
---------------------------------------------------------
Joint Debtors: Lee Patrick Enright, M.D.
Nancy Kuechler Enright
5125 Happy Canyon Road
Santa Ynez, CA 93460
Bankruptcy Case No.: 11-12156
Chapter 11 Petition Date: May 6, 2011
Court: United States Bankruptcy Court
Central District of California (Santa Barbara)
Judge: Robin Riblet
Debtor's Counsel: Franklyn S. Michaelson, Esq.
MICHAELSON, SUSI & MICHAELSON
7 W Figueroa Street 2nd Fl
Santa Barbara, CA 93101-3191
Tel: (805) 965-1011
E-mail: kim@msmlaw.com
Scheduled Assets: $14,273,743
Scheduled Debts: $9,733,138
Debtor's List of eight Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Global Financial LLC Money loaned $347,335
100 First Ave N
P.O. Box 1547
Great Falls, MT 59403
Wells Fargo Bank, N.A. Money loaned $275,648
c/o Trevor L. Hart Esq.
Perry Law PC
P.O. Box 637
Boise, ID 83701-0637
Blaine County Taxes $46,818
Treasurers Office
219 1st Ave. South,
Ste 102
Haley, ID 83333
American Express Credit Card $16,678
American Express Credit Card $15,429
Wells Fargo Bank, N.A. Money loaned $0
TitleOne Corporation Default/foreclosure $0
process services
Stewart Default Default/foreclosure $0
Services process services
LEE ENTERPRISES: Files Form 10-Q; Posts $1.45 Million Net Loss
--------------------------------------------------------------
Lee Enterprises, Incorporated, filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q reporting a
net loss of $1.45 million on $178.72 million of total operating
revenue for the 13 weeks ended March 27, 2011, compared with net
income of $2.98 million on $185.74 million of total operating
revenue for the 13 weeks ended March 28, 2010. The Company also
reported net income of $17.53 million on $386.39 million of total
operating revenue for the 26 weeks ended March 27, 2011, compared
with net income of $30.94 million on $395.58 million of total
operating revenue for the 26 weeks ended March 28, 2010.
The Company's balance sheet at March 27, 2011, showed $1.40
billion in total assets, $1.32 billion in total liabilities, and
$77.65 million in total equity.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/WdHMkM
About Lee Enterprises
Based in Davenport, Iowa, Lee Enterprises, Incorporated --
http://www.lee.net/-- is a premier provider of local news,
information and advertising in primarily midsize markets, with 49
daily newspapers and a joint interest in four others, rapidly
growing online sites and more than 300 weekly newspapers and
specialty publications in 23 states. Lee's newspapers have
circulation of 1.5 million daily and 1.8 million Sunday, reaching
four million readers daily. Lee stock is traded on the New York
Stock Exchange under the symbol LEE.
* * *
As reported by the Troubled Company Reporter on April 14, 2011,
Standard & Poor's Ratings Services Lee Enterprises its preliminary
'B' corporate credit rating. S&P also said, "At the same time, we
assigned our preliminary 'B' rating (the same as the corporate
credit rating) to the company's offering of $675 million first-
priority lien senior secured notes due 2017 with a preliminary
recovery rating of '3', indicating our expectation of meaningful
(50%-70%) recovery for lenders in the event of a payment default.
We also rated the company's second-priority lien senior secured
notes due 2018 a preliminary 'CCC+', with a preliminary recovery
rating of '6', indicating negligible (0%-10%) recovery for
lenders."
The TCR on April 13, 2011, said Moody's Investors Service assigned
first time ratings to Lee Enterprises, including a Caa1 Corporate
Family Rating (CFR), Caa1 Probability of Default Rating (PDR) and
SGL-3 speculative-grade liquidity rating. Moody's also assigned a
B1 rating to the company's proposed $50 million 5-year senior
secured first-lien first-out revolver, a B3 rating to its proposed
$675 million senior secured first-lien notes maturing 2017, and a
Caa2 rating to its proposed $375 million senior secured second-
lien notes maturing 2018. The rating outlook is stable.
LENNY DYKSTRA: Wants Bail Reduced to $105,000
---------------------------------------------
Patrick Fitzgerald, writing for Dow Jones' Daily Bankruptcy
Review, reports that Lenny Dykstra is heading to back to federal
court in downtown Los Angeles Wednesday in a bid to have his
$150,000 bail reduced to $105,000.
DBR relates Dykstra, 48, was indicted Friday by a federal grand
jury that accused him of bankruptcy fraud for allegedly selling
items from his $18 million mansion once owned by hockey great
Wayne Gretzky.
DBR says Mr. Dykstra has already posted a $75,000 bond. According
to DBR, Mr. Dykstra's lawyer, Mark J. Werksman, said his client
"has had difficulty in obtaining" the rest of the cash. He's only
been able to line up another $30,000, according to court filings.
DBR says a hearing on the request is scheduled for Wednesday
afternoon in U.S. District Court in Los Angeles.
According to DBR, in an op-ed with the New York Post Tuesday, Mr.
Dykstra wrote that he's a victim of persecution. He told
Bankruptcy Beat much the same thing over a year ago, DBR says.
DBR also relates that in an interview Tuesday, Mr. Werksman said
the criminal case against Mr. Dykstra is retaliation from the
bankruptcy case.
"This indictment is payback for Lenny's actions against the
trustee in the bankruptcy case," he said, according to DBR. "When
he complained about the trustee, the trustee retaliated by
referring the case to the U.S. attorney. Now they're playing
`gotcha' over a few thousand dollars in assets."
DBR recounts that bankruptcy trustee Arturo Cisneros resigned from
Mr. Dykstra's case after Mr. Dykstra sought his removal for
failing to disclose the extent of his business with J.P. Morgan
Chase & Co., which happened to be the largest creditor in Mr.
Dykstra's case.
About Lenny Dykstra
Lenny Dykstra is a former Major League Baseball all-star player.
He was center fielder for the New York Mets and Philadelphia
Phillies. He filed for Chapter 11 bankruptcy protection (Bankr.
C.D. Calif. Case No. 09-18409) on July 7, 2009, in Woodland Hills,
California. The Law Office of M. Jonathan Hayes, in Northridge,
California, represents the Debtor. The Debtor estimated up to
$50,000 in assets and $10 million to $50 million in debts in his
Chapter 11 petition.
A Chapter 11 trustee was appointed in September 2009, and the case
was converted to a liquidation in Chapter 7 on November 20, 2009.
The trustee -- Arturo M. Cisneros -- was investigating the
disposition of personal property both before and after the Chapter
11 filing.
In August 2010, Mr. Cisneros stepped down as Chapter 7 trustee
following issues with his failing to disclose the extent of his
business with J.P. Morgan Chase & Co., which happens to be largest
creditor in Mr. Dykstra's case.
LINDA VISTA: Plan Confirmation Appeal Goes Straight to 9th Cir.
---------------------------------------------------------------
Linda Vista Cinemas, L.L.C., can directly go the U.S. Court of
Appeals for the Ninth Circuit in its appeal from a bankruptcy
court order denying confirmation of its plan of reorganization.
District Judge Cindy K. Jorgenson granted the Debtor's Request for
Certification of Direct Appeal, holding that, under the facts of
the Debtor's case and the terms of the proposed Plan, there is no
controlling Ninth Circuit or Supreme Court authority addressing
the issue on appeal.
Linda Vista obtained a loan from the Bank of Arizona to help
finance a movie multi-plex known as Tower Theatres. The loan, in
excess of five million dollars, had several pieces of collateral
securing it and the Bank held continuing guarantees, for the
obligations of Debtor from Cutler Fire Protection, Inc., Grand
Cinemas, LLC, Daniel G. and Linda L. Cutler, The Daniel G. and
Linda L. Cutler Revocable Living Trust, and Kent and Angela
Edwards.
In response to collection actions by the Bank, Linda Vista filed
for Chapter 11 bankruptcy. The Debtor requested a preliminary
injunction, pursuant to 11 U.S.C. Sec. 105(a), against the Bank to
enjoin it from foreclosure against the collateral of certain non-
debtor guarantors of the Debtor's obligation to the Bank. In May
2010, the bankruptcy court granted the preliminary injunction and
prohibited the Bank from proceeding against the Debtor's
guarantors or their property during the pendency of the case
provided the Debtor met certain deadlines.
On Sept. 14, 2010, the Debtor submitted a proposed Plan that
included a request for the issuance of a temporary conditional
injunction against the Bank and in favor of the Debtor's
guarantors and their property. The Debtor asserts that the
requested temporary conditional injunction was very narrowly
tailored and that the Debtor only sought to prohibit the Bank from
proceeding against the Debtor's guarantors and their property so
long as the Debtor did not default under the terms of the Plan.
The Debtor further asserts that, "[p]ursuant to this narrowly
tailored conditional injunction, the Debtor's guarantors'
liability to the Bank [of] Arizona was not extinguished or
discharged, nor was any of their real or personal property
released from the Bank's prepetition lien. The Bank retained all
of its prepetition rights against the guarantors and their and
(sic) collateral after confirmation of the proposed Plan."
The Bank objected to the proposed Plan. On Nov. 24, 2010, the
Bankruptcy Court issued a Memorandum Decision that found that the
Debtor's Plan could not be confirmed. The Hon. James M. Marlar
said Linda Vista's amended Chapter 11 plan violated discharge
provisions under 11 U.S.C. Sec. 524(e). Except for Sec. 524(e),
Judge Marlar said the Debtor satisfied the legal requirements for
confirmation. The Troubled Company Reporter published a story on
the Bankruptcy Court's decision on Dec. 1, 2010.
The Debtor asserts that the question it seeks to present on direct
appeal is whether the Bankruptcy Code permits "confirmation of a
Plan that conditionally delays a creditor from pursuing
enforcement actions against contributing non-debtor guarantors so
long as the debtor does not default under the terms of the
confirmed Plan[.]" Further, the Debtor asserts this is a question
for which there is no controlling law from either the Ninth
Circuit Court of Appeal or the Supreme Court and is a question
that requires resolution of conflicting decisions.
A copy of the District Court's May 5, 2011 Order is available at
http://is.gd/rKeyh6from Leagle.com.
Based in Tucson, Arizona, Linda Vista Cinemas, L.L.C., owns and
operates a movie multi-plex known as Tower Theatres. Linda Vista
Cinemas filed for Chapter 11 bankruptcy (Bankr. D. Ariz. Case No.
10-14551) on May 12, 2010. Michael W. McGrath, Esq., at Mesch
Clark & Rothschild, in Tucson, serves as the Debtor's counsel. In
its petition, the Debtor estimated $1 million to $10 million in
both assets and debts.
LINN ENERGY: Moody's Puts B2 Rating on $750MM Sr. Unsecured Notes
-----------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Linn Energy,
LLC's proposed $750 million senior unsecured notes. Proceeds from
the proposed offering along with cash on hand will be used to fund
approximately $601 million out of $857 million of acquisitions in
2011 and pay down revolver debt. The outlook is stable.
Ratings Rationale
Linn's B1 Corporate Family Rating (CFR) reflects its large proved
developed (PD) reserve and production scale and the predominantly
long-lived nature of its property base. The rating is restrained
by the company's high debt levels relative to its production
volumes and PD reserves and high distributions paid to its unit
holders. Linn continues to expand its operations through an
acquisition driven growth strategy. Since 2008 the company's
reserves and production have grown about 71% and 44% respectively
pro-forma for 2011 acquisitions. Linn's acquire and exploit
strategy traditionally focused on long lived producing assets in
well known conventional basins where Linn possessed well developed
technical expertise. However, as Linn has grown in size it has now
shifted focus to more unconventional and technically challenging
basins including the Bakken shale development and the recent
Cleveland formation in the Texas Panhandle. These assets are both
in earlier stage of development with a large proven undeveloped
(PUD) portion of reserves which requires extensive future
development capital along with a steep technical learning curve.
Furthermore, despite raising close to $1.5 billion in equity
funding since 2010, due to over $2.2 billion of acquisitions in
the same period, Linn's leverage as measured by Debt/ Proven
developed reserves has substantially increased from $7.01/Boe at
March 31, 2010 to $10.68/Boe at March 31, 2011 pro-forma for
recent acquisitions. Simultaneously during the same period, debt/
average daily production has risen from about $40,000/Boe of daily
production to over $53,000/Boe of daily production pro-forma for
recent acquisitions. Therefore, despite a reserve and production
profile consistent with a higher rating, a broader exposure to
crude oil and natural gas liquids and competitive cost structure
as defined by low F&D costs, the high leverage has slowed Linn's
progress in developing an overall profile compatible with a higher
rating.
The stable outlook assumes that Linn will continue its track
record of funding significant acquisitions with a meaningful
equity component and continues to demonstrate positive
operational performance in terms of reserves and production
growth at competitive costs in recently entered basins. In order
to consider a positive outlook or rating upgrade, leverage on PD
reserves needs to decline to the $8.00-$9.00/Boe range, which is
consistent with the Ba3 peer group. A positive rating action would
also require evidence that the company's 2011 capital program and
the Bakken and Cleveland play development results in good reserve
and production growth at competitive costs. The outlook could be
changed to negative or the ratings downgraded if the company's
capital productivity were to deteriorate and/or leverage increases
significantly from current pro-forma levels.
The B2 senior notes ratings reflect both the overall probability
of default of Linn, to which Moody's assigns a PDR of B1, and a
loss given default of LGD4, 65% (changed from LGD5, 66%). The
company has a $1.5 billion borrowing base committed senior secured
revolving credit facility. The senior notes are unsecured and
therefore are subordinate to the senior secured credit facility's
potential priority claim to the company's assets. This results in
the senior notes being notched one rating beneath the B1 CFR under
Moody's Loss Given Default Methodology.
The principal methodologies used in rating Linn Energy was
Independent Exploration and Production (E&P) Industry, published
in December 2008. Other methodologies used include Loss Given
Default for Speculative Grade Issuers in the US, Canada, and EMEA,
published June 2009
Linn Energy is a Houston, TX based independent energy company
engaged in the development, production, acquisition, and
exploitation of long life crude oil and natural gas properties in
the United States. The company's reserves and production are
located in California, Permian, Mid- Continent , Michigan, Texas
Panhandle and Williston (Bakken) basins.
LIONS GATE: Moody's Gives 'B1' Rating to New $200MM Sr. Notes
-------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Lions Gate
Entertainment Inc.'s proposed $200 million senior secured second
priority notes due 2016. Lions Gate intends to use net proceeds to
repay all outstanding borrowings under the company's $340 million
revolving credit facility and for general corporate purposes. The
company's existing B2 Corporate Family Rating (CFR) and B2
Probability of Default Rating (PDR) remain unchanged. The
Speculative Grade Rating remains SGL-3 and the rating outlook
remains positive.
The new $200 million notes are expected to be secured and
guaranteed by the same assets as the company's senior secured
revolver and senior secured second lien notes, and will have a
second priority claim on these assets, pari passu with the
existing second lien notes. This includes substantially all assets
of Lions Gate Entertainment Corp. and the assets of certain
subsidiaries (including equity interests in certain of the
company's subsidiaries). The notes will rank senior to the
company's convertible senior subordinated notes which are
unsecured. The refinancing is roughly leverage neutral but
improves liquidity as it will help to push out the company's debt
maturities.
This is a summary of the ratings action:
Assignments:
Issuer: Lions Gate Entertainment Inc.
-- New Senior Secured Second Priority Notes due 2016, Assigned
B1, LGD3 - 42%
Changes to LGD point estimates:
Issuer: Lions Gate Entertainment Inc.
-- Senior Secured Second Lien Notes, Changed to B2, LGD3 - 42%
from B2, LGD3 - 39%
Ratings Rationale
Lions Gate's B2 CFR reflects the inherent high risk and typical
low margins associated with the general film and television
production businesses, and Lions Gates weak free cash flow
performance in recent years. The company has been growing its
investment in both film and television programming, which together
with the weak performance has resulted in two years of negative
EBITDA and negative free cash flow. The rating further reflects
Moody's expectation that Lions Gate return to profitability in
fiscal 2011, along with management's focus on debt reduction, will
result in moderating leverage. The company's rating is also
supported by its significant perceived asset value and Moody's
reasonable confidence that profitability will improve in the
coming years. This will be driven by management's pursuing a
disciplined film slate strategy focused on niches that have proven
profitable for the company in the past, growth in TV program
syndication revenues due to the popularity of such shows as Weeds
and Mad Men, and the increasing distribution and profitability of
EPIX premium cable channel.
The company's SGL-3 speculative grade liquidity rating primarily
reflects the volatility of cash flow, with negative free cash flow
generation over the last three years. Liquidity is supported by
access to a $340 million revolving credit facility which will be
undrawn upon issuance of the new notes. Moody's anticipates the
company may use some of the cash proceeds to pay down all or a
portion of its outstanding convertible senior subordinated notes
which may be put back to the company in October 2011 or March
2012.
The positive outlook reflects Moody's expectation that operating
performance will improve over the forward rating horizon as the
company focuses on profitable genres of films, and returns begin
to flow from the significant television investments. The outlook
is also supported by Moody's expectation that management will use
a portion of future free cash flows towards debt reduction and
will take steps to strengthen its balance sheet and improve and
sustain stronger credit metrics.
Moody's would consider an upgrade if operating performance
continues to reflect current performance trends and the company
demonstrates an ability to generate sustainable positive free cash
flow while materially reducing absolute debt and trade liabilities
(in excess of cash) and maintaining debt-to-EBITDA leverage of
around 5.0x or less. Sustainability depends upon increasing the
percentage of sustainable revenues and EBITDA as compared to the
volatile and more risky film segment. Lions Gate would also have
to continue to prudently manage upcoming maturities, including
obligations that could be put back to the company, in order to
support higher ratings.
The company's ratings could be downgraded if operating performance
falls short of current expectations and the company does not turn
free cash flow positive in 2012 which in turn, would likely
pressure Lions Gate's liquidity position without access to capital
markets. Additionally, downward pressure might occur if the
company engages in additional acquisitions that adversely impact
cash flow, leverage and/or liquidity.
Lions Gate's ratings were assigned by evaluating factors that
Moody's considers relevant to the credit profile of the issuer,
such as the company's (i) business risk and competitive position
compared with others within the industry; (ii) capital structure
and financial risk; (iii) projected performance over the near to
intermediate term; and (iv) management's track record and
tolerance for risk. Moody's compared these attributes against
other issuers both within and outside Lions Gate's core industry
and believes Lions Gate's ratings are comparable to those of other
issuers with similar credit risk. Other methodologies used include
Loss Given Default for Speculative Grade Issuers in the US,
Canada, and EMEA, published June 2009.
Lions Gate Entertainment Corp., with its headquarters in British
Columbia, Canada, is a motion picture studio with a diversified
presence in the production and distribution of motion pictures,
television programming, home entertainment, family entertainment,
video-on-demand and digitally delivered content. Revenue for the
twelve months ended Dec. 31, 2010, was $1.6 billion.
LIONS GATE: S&P Holds 'B-' Corp. Credit Rating; Outlook Stable
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B-' corporate
credit rating on British Columbia, Canada-domiciled and Santa
Monica, Calif.-headquartered Lions Gate Entertainment Corp.
and its subsidiary, Lions Gate Entertainment Inc. The
rating outlook is stable.
"At the same time, we lowered our issue-level rating on Lions
Gate's second-lien notes to 'B-' (the same as the company's
corporate credit rating) from 'B'. This occurred in connection
with our revision of the recovery rating on this debt to '4',
indicating our expectation of average (30% to 50%) recovery for
noteholders in the event of a payment default, from '2'. Lions
Gate has launched a $200 million add-on to its $236 million
second-lien notes due November 2016. The company plans to use
the net proceeds of the transaction primarily to repay borrowings
under its senior secured credit facility," S&P related.
"We view the proposed transaction as leverage-neutral to the
company's overall capital structure, although pro forma interest
coverage will deteriorate somewhat from its already fractional
level, as higher-coupon notes are replacing lower-rate bank
borrowings," said Standard & Poor's credit analyst Deborah Kinzer.
Standard & Poor's 'B-' rating and stable outlook on Lions Gate
reflect its expectation that the entertainment company's debt
leverage will remain high over the intermediate term and that
discretionary cash flow could fluctuate widely because of the
earnings volatility of its film business.
"In our view, the company's business risk profile is vulnerable
because of its position as a mid-size independent film studio, a
track record of minimal profitability from the film business for
the past several years, and a small, but growing, TV production
business," said Ms. Kinzer. "We regard its financial risk profile
as highly leveraged because of its very high debt-to-EBITDA ratio,
negative discretionary cash flow, and management's aggressive
financial policy. We view Lions Gate's debt versus equity
proportion of its capital structure as creating high risk in
relation to the volatility of the business and its cash flow."
"The stable rating outlook reflects our view that Lions Gate's
EBITDA is likely to remain low, cash flow could return to break-
even in the near-to-intermediate term, and liquidity is sufficient
in the meantime. "Still," added Ms. Kinzer, "we could lower the
rating if the company records large film write-downs, if home
video sales shrink and are not offset by sales of content in
digital formats, if the company makes large debt-financed
acquisitions that do not contribute EBITDA, or if liquidity
becomes strained in the face of unexpected losses or increasing
debt levels. More specifically, if EBITDA does not increase so
that EBITDA coverage of interest is consistently at least 1.25x,
and if the company is unable to make meaningful progress toward
reaching positive discretionary cash flow, we could lower the
rating."
LODGENET INTERACTIVE: John Pecora Discloses 6.6% Equity Stake
-------------------------------------------------------------
In a Schedule 13D filing with the U.S. Securities and Exchange
Commission, John P. Pecora disclosed that he beneficially owns
1,666,543 shares of common stock of Lodgenet Interactive
Corporation representing 6.6% of the shares outstanding, based
upon 25,152,080 shares outstanding as of March 7, 2011, as
reported in the Company's Form 10-K filed with the Securities and
Exchange Commission on March 14, 2011.
About LodgeNet Interactive
Sioux Falls, South Dakota-based LodgeNet Interactive Corporation
(Nasdaq:LNET), formerly LodgeNet Entertainment Corp. --
http://www.lodgenet.com/-- provides media and connectivity
solutions designed to meet the unique needs of hospitality,
healthcare and other guest-based businesses. LodgeNet Interactive
serves more than 1.9 million hotel rooms worldwide in addition to
healthcare facilities throughout the United States. The Company's
services include: Interactive Television Solutions, Broadband
Internet Solutions, Content Solutions, Professional Solutions and
Advertising Media Solutions. LodgeNet Interactive Corporation
owns and operates businesses under the industry leading brands:
LodgeNet, LodgeNetRX, and The Hotel Networks.
The Company reported a net loss of $11.68 million on $452.17
million of total revenues for the year ended Dec. 31, 2010,
compared with a net loss of $10.15 million on $484.49 million of
total revenue during the prior year.
The Company's balance sheet at March 31, 2011 showed
$439.21 million in total assets, $490.67 million in total
liabilities, and $51.46 million in total stockholders' deficiency.
* * *
Lodgenet carries a 'B3' long term corporate family rating and a
'Caa1' probability of default rating, with 'stable' outlook, from
Moody's. It has 'B' long term foreign and local issuer credit
ratings, with 'stable' outlook, from Standard & Poor's.
"In Moody's opinion, continued cautious investment from LodgeNet's
hotel customers will hamper intermediate term growth in its core
hospitality services business, and over the long term competing
forms of entertainment will pressure this revenue stream as the
company seeks to defend its relevance to both hotel operators and
hotel guests. The B3 corporate family rating incorporates these
weak growth prospects, mitigated somewhat by the company's
moderately high financial risk profile and demonstrated capacity
to generate positive free cash flow throughout challenging
economic conditions, along with a measure of stability from the
monthly fees it receives from hotels regardless of occupancy,"
Moody's said in October 2010.
LODGENET INTERACTIVE: Files Form 10-Q; Posts $908,000 Loss in Q1
----------------------------------------------------------------
LodgeNet Interactive Corporation filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
reporting a net loss of $908,000 on $107.72 million of total
revenues for the three months ended March 31, 2011, compared with
a net loss of $2.50 million on $118.05 million of total revenues
for the same period during the prior year.
The Company's balance sheet at March 31, 2011, showed $439.21
million in total assets, $490.67 million in total liabilities and
a $51.46 million total stockholders' deficiency.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/Z8dufv
About LodgeNet Interactive
Sioux Falls, South Dakota-based LodgeNet Interactive Corporation
(Nasdaq:LNET), formerly LodgeNet Entertainment Corp. --
http://www.lodgenet.com/-- provides media and connectivity
solutions designed to meet the unique needs of hospitality,
healthcare and other guest-based businesses. LodgeNet Interactive
serves more than 1.9 million hotel rooms worldwide in addition to
healthcare facilities throughout the United States. The Company's
services include: Interactive Television Solutions, Broadband
Internet Solutions, Content Solutions, Professional Solutions and
Advertising Media Solutions. LodgeNet Interactive Corporation
owns and operates businesses under the industry leading brands:
LodgeNet, LodgeNetRX, and The Hotel Networks.
The Company reported a net loss of $11.68 million on $452.17
million of total revenues for the year ended Dec. 31, 2010,
compared with a net loss of $10.15 million on $484.49 million of
total revenue during the prior year.
* * *
Lodgenet carries a 'B3' long term corporate family rating and a
'Caa1' probability of default rating, with 'stable' outlook, from
Moody's. It has 'B' long term foreign and local issuer credit
ratings, with 'stable' outlook, from Standard & Poor's.
"In Moody's opinion, continued cautious investment from LodgeNet's
hotel customers will hamper intermediate term growth in its core
hospitality services business, and over the long term competing
forms of entertainment will pressure this revenue stream as the
company seeks to defend its relevance to both hotel operators and
hotel guests. The B3 corporate family rating incorporates these
weak growth prospects, mitigated somewhat by the company's
moderately high financial risk profile and demonstrated capacity
to generate positive free cash flow throughout challenging
economic conditions, along with a measure of stability from the
monthly fees it receives from hotels regardless of occupancy,"
Moody's said in October 2010.
LONGVIEW FIBRE: S&P Gives 'B+' Corp. Credit Rating; Outlook Stable
------------------------------------------------------------------
Standard & Poor's Rating Services assigned its 'B+' corporate
credit rating to Longview, Wa.-based Longview Fibre Paper and
Packaging Inc. The rating outlook is stable.
"At the same time, we assigned a 'B+' issue-level rating (the same
as the corporate credit rating) to the company's proposed senior
secured notes due 2016. The recovery rating is '4', indicating our
expectation of average (30% to 50%) recovery for lenders in the
event of a payment default. These ratings are based on preliminary
terms and conditions," S&P continued.
Proceeds from the proposed offering will be used to fund a
distribution to shareholders. In addition, the company intends to
amend its existing asset-based lending (ABL) facility prior to, or
simultaneous with, the completion of the proposed offering. The
ABL facility, which will not be rated, will provide availability
up to $100.0 million, subject to a borrowing base limitation, for
a period of 4.5 years.
"The 'B+' rating reflects what we consider to be Longview Fibre's
aggressive financial risk profile and weak business risk profile,"
said Standard & Poor's credit analyst Tobias Crabtree. "Our view
of the company's aggressive financial risk profile is based on our
belief that adjusted leverage is likely to be maintained at 4x or
less and its liquidity profile to be adequate over the upcoming 12
to 18 months following the proposed offering and amendment to its
ABL facility. In addition, our ratings incorporate the expectation
that any potential acquisitions, growth initiatives, or additional
shareholder distributions would be financed in a manner that
doesn't negatively impact the company's financial risk profile.
Our assessment of Longview Fibre's weak business risk profile
incorporates the risk of operating a single paper mill complex,
its modest product and geographic diversity, and its small size
compared with more integrated containerboard and corrugated
products manufacturers. Longview Fibre does not publicly disclose
its financials."
S&P noted, "We believe that the kraft papers, containerboard, and
corrugated products industry fundamentals should remain favorable
over the next several quarters, reflecting better pricing compared
with the prior year's similar period and a steady increase in
demand due to a gradual economic recovery in the U.S. As a
result, we believe that Longview Fibre's full-year sales, which
increased approximately 20% in the first quarter of 2011 compared
with the prior year's first quarter, could meaningfully increase
in 2011 from 2010. In addition, we expect that 2011 adjusted
EBITDA will likely exceed its trailing-12-month level as of March
31, 2011, given the higher level of expected sales offset
somewhat by rising input costs. We believe the company's recent
improvement in profitability is sustainable given the ongoing
benefits from prior cost reductions and productivity improvement
initiatives, a more optimized product mix in kraft papers, and our
expected continued increase in sales volumes. Still, a key risk to
our EBITDA forecast is if a greater-than-expected increase in raw
material costs, especially that of wood and recycled fiber,
energy, and chemicals, is unable to be offset via price
increases."
"The stable rating outlook reflects our belief that the company's
liquidity position will remain adequate and operating performance
in the next several quarters will result in credit measures that
we would consider to be in-line with the ratings given the
company's weak business risk profile and aggressive financial risk
profile. Specifically, we consider leverage below 5x to be
acceptable for the 'B+' rating," S&P stated.
"We could lower the rating if the operating environment were to
worsen rather than improve, causing leverage to exceed 5x on a
sustained basis, given the company's weak business profile.
Specifically, based upon our expected debt levels following the
proposed transaction, adjusted EBITDA would have to decline more
than 20% from its trailing 12-month level as of March 31, 2011,
for this to occur. We could also lower the ratings if the company
adopted a more aggressive financial policy with regards to any
potential acquisitions, growth initiatives, or additional
shareholder distributions that would negatively impact the
company's financial risk profile," according to S&P.
"We consider a positive rating action unlikely in the intermediate
term, given Longview Fibre's weak business risk profile. In
addition, we would expect the company to use excess cash flow
generation to fund growth initiatives, potential acquisitions, or
additional shareholder distributions rather than to reduce debt,"
S&P added.
MAUI LAND: Reports $12.4 Million Net Income in March 31 Quarter
---------------------------------------------------------------
Maui Land and Pineapple Company, Inc., filed its quarterly report
on Form 10-Q, reporting net income of $12.4 million on
$6.4 million of operating revenues for the three months ended
March 31, 2011, compared with a net loss of $2.7 million on
$7.6 million of operating revenues for the same period of 2010.
Net income for the first quarter of 2011 was primarily due to
recognition of $15.1 million gain from the September 2010 sale of
the Kapalua Bay Course.
The Company's balance sheet at March 31, 2011, showed
$79.9 million in total assets, $91.6 million in total liabilities,
and a stockholders' deficit of $11.7 million.
As reported in the TCR on March 17, 2011, Deloitte & Touche LLP,
in Honolulu, Hawaii, expressed substantial doubt about Maui Land &
Pineapple's ability to continue as a going concern, following the
Company's 2010 results. The independent auditors noted that of
the Company's recurring negative cash flows from operations and
deficiency in stockholders' equity.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/mGmt4s
About Maui Land & Pineapple Company
Maui Land & Pineapple Company, Inc. (NYSE: MLP)
-- http://mauiland.com/-- develops, sells, and manages
residential, resort, commercial, and industrial real estate. The
Company owns approximately 23,000 acres of land on Maui and
operates retail, utility operations, and a nature preserve at the
Kapalua Resort. The Company's principal subsidiary is Kapalua
Land Company, Ltd., the operator and developer of Kapalua Resort,
a master-planned community in West Maui.
MCCLATCHY CO: Incurs $1.96-Mil. Loss in March 27 Quarter
--------------------------------------------------------
The McClatchy Company filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q reporting a net loss
of $1.96 million on $303.73 million of revenue for the three
months ended March 27, 2011, compared with net income of $2.20
million on $335.56 million of revenue for the three months ended
March 28, 2010.
The Company's balance sheet at March 27, 2011, showed $3.04
billion in total assets, $2.82 billion in total liabilities and
$220.13 million in stockholders' equity.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/u5Qtb1
About The McClatchy Company
Sacramento, Calif.-based The McClatchy Company (NYSE: MNI)
-- http://www.mcclatchy.com/-- is the third largest newspaper
company in the United States, publishing 30 daily newspapers, 43
non-dailies, and direct marketing and direct mail operations.
McClatchy also operates leading local websites in each of its
markets which extend its audience reach. The websites offer users
comprehensive news and information, advertising, e-commerce and
other services. Together with its newspapers and direct marketing
products, these interactive operations make McClatchy the leading
local media company in each of its premium high growth markets.
McClatchy-owned newspapers include The Miami Herald, The
Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City
Star, The Charlotte Observer, and The News & Observer (Raleigh).
* * *
In February 2010, Moody's Investors Service upgraded The McClatchy
Company's Corporate Family Rating to Caa1 from Caa2, Probability
of Default Rating to Caa1 from Caa2, and senior unsecured and
unguaranteed note ratings to Caa2 from Caa3, concluding the review
for upgrade initiated on January 27, 2010. The upgrades reflect
McClatchy's improved liquidity position and reduced near-term
default risk following completion of the company's refinancing,
and its ability to stabilize EBITDA performance through
significant cost reductions. The rating outlook is stable.
Standard & Poor's Ratings Services also raised its corporate
credit on Sacramento, California-based The McClatchy Co. to 'B'
from 'B-'. The upgrade reflects the significant current and
expected moderation in the pace of ad revenue declines in 2010 and
2011 and improving debt leverage and discretionary cash flow.
As reported by the Troubled Company Reporter on Feb. 8, 2011,
Fitch Ratings has upgraded the Issuer Default Rating of the
McClatchy Company to 'B-'. The Rating Outlook is Stable. The
revenue declines endured by McClatchy in 2010 were materially
lower than Fitch's expectation. Fitch had modeled declines in the
mid-teens versus actual declines in the mid-single digits. While
Fitch expected the company to focus on cost containment, the
company's success exceeded Fitch expectations. Fitch had expected
EBITDA to decline more than 10% versus actual EBITDA growth in the
mid-single digits. As a result absolute debt and leverage were
better than Fitch expectations. Fitch estimates 2010 year end
gross unadjusted leverage of approximately 4.7 times. Fitch
expects the company will be able to meet its pension funding
obligations and satisfy all of its maturities up to and including
its senior unsecured notes due in 2014 ($169 million balance as of
Sept. 30, 2010). Also, Fitch does not expect McClatchy will have
any issues meeting its credit agreement financial covenants (under
both Fitch's base and stress cases).
MEDICURE INC: Reports C$841,000 Net Income in Feb. 28 Quarter
-------------------------------------------------------------
Medicure Inc. reported net income of C$841,011 on products sales
of C$1.2 million for the three months ended Feb. 28, 2011,
compared with a net loss of C$2.1 million on product sales of
C$795,963 for the three months ended Feb. 28, 2010.
At Feb. 28, 2011, the Company was in default of the terms of its
long-term debt financing obligations, and continues to be in
default. Under an event of default, the lender can exercise its
security rights under the agreement, and accordingly the long-term
debt obligation has been classified as a current liability as at
Feb. 28, 2011.
The current portion of the minimum payments that are past due
included in the accrued interest on long-term debt is
C$4.8 million, or US$4.9 million). Of this amount, US$1.8 million
was originally due July 15, 2009; US$180,811 was originally due
Oct. 15, 2009; US$195,550 was originally due Jan. 15, 2010;
US$160,359 was originally due April 15, 2010; US$2.1 million was
originally due on July 15, 2010, US$168,085 was originally due
Oct. 15, 2010, US$167,025 was originally due Jan. 15, 2011, and
US$258,703 was originally due April 15, 2011. The debt agreement
contains no express provisions to accelerate debt payments in an
event of default, however under the agreement the lender can
exercise its security rights at any time while in default.
Accordingly, for financial reporting purposes, based on the
guidance in "EIC-59 Long Term Debt With Covenant Violations", the
outstanding long term debt of US$25.0 million that is in default
has been classified as a current liability as at Feb. 28, 2011.
At Feb. 28, 2011, the Company's consolidated balance sheets
showed C$5.7 million in total assets, C$30.7 million in total
liabilities, all current, and a shareholders' deficit of
$25.0 million.
As reported in the Troubled Company Reporter on Oct. 4, 2010,
KPMG LLP, in Winnipeg, Canada, expressed substantial doubt about
Medicure's ability to continue as a going concern, following its
results for the fiscal year ended May 31, 2010. The independent
auditors noted that the Company has experienced operating losses
and cash flows from operations since incorporation and has
significant debt servicing obligations that it does not have the
ability to repay.
A full-text copy of the Company's interim consolidated financial
statements for the three months ended Feb. 28, 2011, is
available for free at http://is.gd/mbImKI
A full-text copy of Management's Discussion and Analysis for the
period ended Feb. 28, 2011, is available for free at:
http://is.gd/gDsERm
About Medicure Inc.
Based in Winnipeg, Manitoba, Canada, Medicure Inc. (TSX/NEX:
MPH.H) -- http://www.medicure.com/-- is a biopharmaceutical
company engaged in the research, development and commercialization
of human therapeutics. The Company has rights to the commercial
product, AGGRASTAT(R) Injection (tirofiban hydrochloride) in the
United States and its territories (Puerto Rico, U.S. Virgin
Islands, and Guam). AGGRASTAT(R), a glycoprotein GP IIb/IIIa
receptor antagonist, is used for the treatment of acute coronary
syndrome (ACS) including unstable angina, which is characterized
by chest pain when one is at rest, and non-Q-wave myocardial
infarction.
MERITOR INC: Reports $22 Million Net Income in March 31 Quarter
---------------------------------------------------------------
Meritor, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q reporting income of
$22 million $1.19 billion of sales for the three months ended
March 31, 2011, compared with net income of $17 million on $868
million of sales for the same period during the prior year. The
Company also reported net income of $24 million on $2.16 million
of sales for the six months ended March 31, 2011, compared with
net income of $20 million on $1.66 million of sales for the same
period a year ago.
The Company's balance sheet at March 31, 2011, showed $2.67
billion in total assets, $3.68 billion in total liabilities and a
$1.01 billion total deficit.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/BB9zMy
About Meritor, Inc.
Meritor, Inc. -- http://meritor.com/default.aspx-- is a global
supplier of drivetrain, mobility, braking and aftermarket
solutions for commercial vehicle and industrial markets. With
more than a 100-year legacy of providing innovative products that
offer superior performance, efficiency and reliability, the
company serves commercial truck, trailer, off-highway, defense,
specialty and aftermarket customers in more than 70 countries.
Meritor is based in Troy, Mich., United States, and is made up of
more than 11,000 diverse employees who apply their knowledge and
skills in manufacturing facilities, engineering centers, joint
ventures, distribution centers and global offices in 19 countries.
Common stock is traded on the New York Stock Exchange under the
ticker symbol MTOR.
This concludes the Troubled Company Reporter's coverage of
Meritor, Inc., until facts and circumstances, if any, emerge
that demonstrate financial or operational strain or difficulty at
a level sufficient to warrant renewed coverage.
MGM RESORTS: Posts $89.9-Mil. Loss in First Quarter
---------------------------------------------------
MGM Resorts International filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q reporting a
net loss of $89.87 million on $1.50 billion of revenue for the
three months ended March 31, 2011, compared with a net loss of
$96.74 million on $1.45 billion of revenue for the same period
during the prior year.
The Company's balance sheet at March 31, 2011, showed $18.76
billion in total assets, $15.84 billion in total liabilities and
$2.92 billion in total stockholders' equity.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/UpdVsN
About MGM Resorts
MGM Resorts International (NYSE: MGM) --
http://www.mgmresorts.com/-- has significant holdings in gaming,
hospitality and entertainment, owns and operates 15 properties
located in Nevada, Mississippi and Michigan, and has 50%
investments in four other properties in Nevada, Illinois and
Macau.
The Company reported a net loss of $1.44 billion on $6.01 billion
of revenue for the year ended Dec. 31, 2010, compared with a net
loss of $1.29 billion on $5.97 billion of revenue during the prior
year.
* * *
As reported by the Troubled Company Reporter on Oct. 18, 2010,
Standard & Poor's Ratings Services revised its rating outlook on
MGM Resorts to stable from developing. At the same time, S&P
affirmed all of its existing ratings on MGM, including the 'CCC+'
corporate credit rating.
The 'CCC+' corporate credit rating reflects MGM's significant debt
burden, S&P's expectation for meaningful declines in cash flow
generation in 2010, and the company's weak liquidity position.
While MGM maintains a leading presence on the Las Vegas Strip,
2010 will be another challenging year for the Strip, and prospects
for a meaningful rebound in 2011 are uncertain. The recent
pricing of the primary offering of common stock has bolstered
liquidity; however, the company's ability to weather the current
downturn and continue to service its debt obligations over the
longer term relies on continued progress toward addressing its
challenging debt maturity schedule, as well as a substantial
rebound in cash flow generation.
The TCR also reported that Fitch Ratings revised the Rating
Outlook for MGM Resorts to Positive following the company's equity
issuance. In addition, Fitch affirmed the Issuer
Default Rating at 'CCC'. MGM's 'CCC' IDR continues to reflect a
credit profile with substantial credit risk. MGM's probability of
default still displays a high sensitivity to an uninterrupted
recovery in the Las Vegas market, significant reliance on a
favorable refinancing and capital markets environment due to its
heavy debt maturity schedule, a highly leveraged balance sheet
despite potential debt reduction from the equity issuance, and a
weak near-term free cash profile. In addition, MGM's obligation
under the CityCenter completion guarantee continues to escalate,
and Fitch believes the company is currently under-investing in its
properties, which will likely impact asset quality.
As reported by the TCR on March 4, 2011, Moody's upgraded MGM
Resorts International's Corporate Family rating to B3 and its
Probability of Default rating to Caa1. The upgrade reflects signs
of modest improvement in demand trends in Las Vegas, debt
repayment during 2010 from the proceeds of equity issuances, and
completion of a new multi-year financing package for CityCenter
(MGM's 50% owned project on the Las Vegas Strip.)
MGM RESORTS: To Provide WPIP on HKSE Common Stock Listing
---------------------------------------------------------
MGM Resorts International expects that it will make available on
its corporate Web site -- http://www.mgmresorts.com/-- a Web
Proof Information Pack prepared in connection with the proposed
listing of the shares of MGM China Holdings Limited on The Stock
Exchange of Hong Kong Limited for publication on the HKSE's Web
site. It is expected that the WPIP will be available for viewing
and downloading from the HKSE's Web site on or about the morning
of May 9, 2011 Hong Kong time (night of May 8, 2011 U.S. time), at
which time the WPIP will be posted to and available on the
Company's Web site. Because of the time differences between Hong
Kong and the United States, the Company plans to continue to use
its corporate Web site as a means of posting important information
about MGM China in the future.
About MGM Resorts
MGM Resorts International (NYSE: MGM) --
http://www.mgmresorts.com/-- has significant holdings in gaming,
hospitality and entertainment, owns and operates 15 properties
located in Nevada, Mississippi and Michigan, and has 50%
investments in four other properties in Nevada, Illinois and
Macau.
The Company's balance sheet at March 31, 2011, showed $18.76
billion in total assets, $15.84 billion in total liabilities and
$2.92 billion in total stockholders' equity.
The Company reported a net loss of $1.44 billion on $6.01 billion
of revenue for the year ended Dec. 31, 2010, compared with a net
loss of $1.29 billion on $5.97 billion of revenue during the prior
year.
* * *
As reported by the Troubled Company Reporter on Oct. 18, 2010,
Standard & Poor's Ratings Services revised its rating outlook on
MGM Resorts to stable from developing. At the same time, S&P
affirmed all of its existing ratings on MGM, including the 'CCC+'
corporate credit rating.
The 'CCC+' corporate credit rating reflects MGM's significant debt
burden, S&P's expectation for meaningful declines in cash flow
generation in 2010, and the company's weak liquidity position.
While MGM maintains a leading presence on the Las Vegas Strip,
2010 will be another challenging year for the Strip, and prospects
for a meaningful rebound in 2011 are uncertain. The recent
pricing of the primary offering of common stock has bolstered
liquidity; however, the company's ability to weather the current
downturn and continue to service its debt obligations over the
longer term relies on continued progress toward addressing its
challenging debt maturity schedule, as well as a substantial
rebound in cash flow generation.
The TCR also reported that Fitch Ratings revised the Rating
Outlook for MGM Resorts to Positive following the company's equity
issuance. In addition, Fitch affirmed the Issuer
Default Rating at 'CCC'. MGM's 'CCC' IDR continues to reflect a
credit profile with substantial credit risk. MGM's probability of
default still displays a high sensitivity to an uninterrupted
recovery in the Las Vegas market, significant reliance on a
favorable refinancing and capital markets environment due to its
heavy debt maturity schedule, a highly leveraged balance sheet
despite potential debt reduction from the equity issuance, and a
weak near-term free cash profile. In addition, MGM's obligation
under the CityCenter completion guarantee continues to escalate,
and Fitch believes the company is currently under-investing in its
properties, which will likely impact asset quality.
As reported by the TCR on March 4, 2011, Moody's upgraded MGM
Resorts International's Corporate Family rating to B3 and its
Probability of Default rating to Caa1. The upgrade reflects signs
of modest improvement in demand trends in Las Vegas, debt
repayment during 2010 from the proceeds of equity issuances, and
completion of a new multi-year financing package for CityCenter
(MGM's 50% owned project on the Las Vegas Strip.)
MID-MOUNTAIN CONCRETE: Case Summary & Creditors List
----------------------------------------------------
Debtor: Mid-Mountain Concrete Pumping, LLC
P.O. Box 1327
Casper, WY 82602
Bankruptcy Case No.: 11-20506
Chapter 11 Petition Date: May 6, 2011
Court: U.S. Bankruptcy Court
District of Wyoming (Cheyenne)
Judge: Peter J. McNiff
Debtor's Counsel: Paul Hunter, Esq.
2616 Central Avenue
Cheyenne, WY 82001
Tel: (307) 637-0212
Fax: (307) 637-0262
E-mail: attypaulhunter@prodigy.net
Scheduled Assets: $358,400
Scheduled Debts: $1,182,773
A list of the Company's 12 largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/wyb11-20506.pdf
The petition was signed by Deidra A. Homann, partner.
MIDTOWN DEVELOPMENT: Claim Objection Barred Over Defective Notice
-----------------------------------------------------------------
Bankruptcy Judge Thomas J. Tucker overruled Midtown Development
Group, Inc.'s objection to Claim No. 3 filed by AKT Peerless
Environmental Services, Inc. The Court held that the Debtor's
notice does not comply with L.B.R. 3007-1(a)(E.D. Mich.), because
it does not state "that if the creditor does not file a response
by 7 days before the date set for the hearing on the objection,
the court may cancel the hearing and enter an order sustaining the
objection." Rather, the Claim Objection leaves blank what the
written response deadline is.
A copy of the Court's May 3, 2011 order is available at
http://is.gd/c5rffEfrom Leagle.com.
Midtown Development Group, Inc., based in Detroit, Michigan, filed
for Chapter 11 bankruptcy (Bank. E.D. Mich. Case No. 11-41301) on
Jan. 16, 2011. Sheldon S. Toll, Esq. -- lawtoll@comcast.net -- at
SHELDON S. TOLL PLLC, serves as bankruptcy counsel. In its
petition, Midtown estimated $1 million to $10 million in both
assets and debts.
MIDWESTERN EQUITIES: Case Summary & 16 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Midwestern Equities LLC
aka Autumnwoods Apts
aka Brendonwoods Apts.
4127 W. 127th Street
Alsip, IL 60803
Bankruptcy Case No.: 11-19283
Chapter 11 Petition Date: May 5, 2011
Court: United States Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: Eugene R. Wedoff
Debtor's Counsel: David K. Welch, Esq.
CRANE HEYMAN SIMON WELCH & CLAR
135 S Lasalle St., Suite 3705
Chicago, IL 60603
Tel: (312) 641-6777
Fax: (312) 641-7114
E-mail: dwelch@craneheyman.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 16 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/ilnb11-19283.pdf
The petition was signed by Joseph Junkovic.
Affiliate that filed separate Chapter 11 petition:
Petition
Debtor Case No. Date
------ -------- ----
Joseph Junkovic 10-55888 12/20/10
MOHEGAN TRIBAL: Moody's Downgrades CFR to Caa3; Negative Outlook
----------------------------------------------------------------
Moody's Investors Service downgraded Mohegan Tribal Gaming
Authority's Corporate Family and Probability of Default ratings to
Caa3 from Caa2. At the same time, Moody's downgraded all the long-
term debt ratings of MTGA. The rating outlook is negative.
Ratings downgraded:
-- Corporate Family Rating to Caa3 from Caa2
-- Probability of Default Rating to Caa3 from Caa2
-- $200 mil. 11.5% secured notes due 2017 to Caa2 (LGD 3, 30%)
from B3 (LGD 3, 30%)
-- $250 mil. 6.125% sr. unsecured notes due 2013 to Caa2 (LGD
3, 37%) from Caa1 (LGD 3, 38%)
-- $150 mil. 6.875% sr. sub. notes due 2015 to Ca (LGD 5, 85%)
from Caa3 (LGD 5, 85%)
-- $250 mil. 8% sr. sub. notes due 2012 to Ca (LGD 5, 85%) from
Caa3 (LGD 5, 85%)
-- $225 mil. 7.125% sr. sub. notes due 2014 to Ca (LGD 5, 85%)
from Caa3 (LGD 5, 85%)
-- $16 mil. 8.375% sr. sub. notes due 2011 to Ca (LGD 5, 85%)
from Caa3 (LGD 5, 85%)
Ratings Rationale
The ratings downgrade reflects Moody's concern that MTGA has not
yet refinanced its unrated $675 million revolver expiring March
2012 -- a significant majority of which is outstandings -- and its
$250 million 8% senior subordinated notes that mature in April
2012. Both of these debt obligations are now considered to be
current. The Caa3 CFR also considers MTGA's significant leverage -
- debt/EBITDA is near 7 times -- continuation of weak consumer
gaming demand trends in the Northeastern U.S., and the possibility
of gaming in Massachusetts.
The negative ratings outlook reflects the relatively short time
frame in which MTGA has to address what Moody's believes to be a
significant capital structure issue. MTGA stated on its recent
earnings call that it continues to work with the Blackstone Group
and others to help deal with its capital structure issues,
although no details have been made available regarding MTGA's
options.
Ratings could be lowered if MTGA pursues a recapitalization that
Moody's considers to be a distressed exchange. MTGA ratings and/or
outlook could improve if the company is able to refinance its debt
maturity profile in a manner that substantially improves its
ability to deal with reduced demand and increased competition from
neighboring states.
The principal methodology used in rating Mohegan Tribal Gaming
Authority was the Global Gaming Industry Methodology, published
December 2009. Other methodologies used include Loss Given Default
for Speculative Grade Issuers in the US, Canada, and EMEA,
published June 2009.
MTGA owns and operates a gaming and entertainment complex located
near Uncasville, Connecticut, known as Mohegan Sun, and a gaming
and entertainment facility offering slot machines and harness
racing in Plains Township, Pennsylvania, known as Mohegan Sun at
Pocono Downs. MTGA generates annual net revenues of about
$1.4 billion.
MONEYGRAM INT'L: Amends Recapitalization Pact with THL, et al.
--------------------------------------------------------------
As previously disclosed, MoneyGram International, Inc., certain
affiliates and co-investors of Thomas H. Lee Partners, L.P., as
the holders of all of the Company's Series B Participating
Convertible Preferred Stock, and affiliates of Goldman, Sachs &
Co., as the holders of all of the Company's Series B-1
Participating Convertible Preferred Stock, are parties to the
Recapitalization Agreement, dated as of March 7, 2011, providing
for the recapitalization of the Company.
On May 4, 2011, the Company, the THL Investors and the GS
Investors entered into an amendment to the Recapitalization
Agreement. The Amendment amends the Recapitalization Agreement to
(i) modify the stockholder vote required for approval of the
Recapitalization to require the affirmative vote of a majority of
the outstanding shares of Common Stock (not including the Series B
Preferred Stock or any other stock of the Company held by any THL
Investor or GS Investor or any executive officer or director of
the Company) rather than the majority of such shares present in
person or by proxy at the special meeting of the Company's
stockholders called for the purpose of approving the
Recapitalization and (ii) provide that the closing condition with
respect to the receipt of the requisite stockholder approvals may
not be waived or amended by the Company or any THL Investor or GS
Investor.
The Recapitalization remains subject to the satisfaction or waiver
of the closing conditions as set forth in the Recapitalization
Agreement, as amended by the Amendment.
A full-text copy of the Amendment No.1 to Recapitalization
Agreement is available for free at http://is.gd/XtQvNF
About MoneyGram International
MoneyGram International, Inc. (NYSE: MGI) --
http://www.moneygram.com/-- is a global payment services company.
The Company's major products and services include global money
transfers, money orders and payment processing solutions for
financial institutions and retail customers. MoneyGram is a New
York Stock Exchange-listed company with 203,000 global money
transfer agent locations in 191 countries and territories.
The Company's balance sheet at March 31, 2011, showed
$4.97 billion in total assets, $4.90 billion in total liabilities,
$1.03 billion in total mezzanine equity, and a $955.76 million
total stockholders' deficit.
The Company reported net income of $43.80 million on $1.17 billion
of total revenue for the year ended Dec. 31, 2010, compared with a
net loss of $1.91 million on $1.16 billion of total revenue during
the prior year.
* * *
According to the Troubled Company Reporter on July 1, 2010, Fitch
Ratings has affirmed the Issuer Default Ratings for MoneyGram
International Inc. and MoneyGram Payment Systems Worldwide, Inc.,
at 'B+'. Outlook is stable. Fitch noted that the ratings could
be negatively impacted by further declines in remittance volumes
driven by macro economic factors or decreases in migrant labor
populations worldwide.
MORGANS HOTEL: Unit Sells Mondrian Hotel to Wolverines for $137MM
-----------------------------------------------------------------
Mondrian Holdings LLC, a subsidiary of Morgans Hotel Group Co.,
completed the sale of the Mondrian Los Angeles hotel to Wolverines
Owner LLC, an affiliate of Pebblebrook Hotel Trust, for $137
million in cash. The parties have agreed that the Company will
continue to operate the hotel under a 20-year management agreement
with one 10-year extension option.
The Company received net proceeds of approximately $40.0 million
after applying a portion of the proceeds from the sale along with
approximately $9.2 million of cash in escrow to retire the $103.5
million of outstanding mortgage debt secured by the hotel.
A copy of the purchase and sale agreement will be filed as an
exhibit to the Company's quarterly report on Form 10-Q for the
quarter ended June 30, 2011.
In connection with the disposition, the Company filed an unaudited
pro forma consolidated financial statements of the Company as of
and for the year ended Dec. 31, 2010, as if the disposition had
occurred as of the assumed dates set forth in the unaudited pro
forma consolidated financial statements, a full-text copy of which
is available for free at http://is.gd/idySGp
About Morgans Hotel Group
Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) --
http://www.morganshotelgroup.com/-- is widely credited as the
creator of the first "boutique" hotel and a continuing leader of
the hotel industry's boutique sector. Morgans Hotel Group
operates and owns, or has an ownership interest in, Morgans,
Royalton and Hudson in New York, Delano and Shore Club in South
Beach, Mondrian in Los Angeles and South Beach, Clift in San
Francisco, Ames in Boston, and Sanderson and St Martins Lane in
London. Morgans Hotel Group and an equity partner also own the
Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans
Hotel Group also manages hotels in Isla Verde, Puerto Rico and
Playa del Carmen, Mexico. Morgans Hotel Group has other property
transactions in various stages of completion, including projects
in SoHo, New York and Palm Springs, California.
The Company reported a net loss of $83.64 million on
$236.37 million of total revenues for the year ended Dec. 31,
2010, compared with a net loss of $101.60 million on $225.05
million of total revenues during the prior year.
The Company's balance sheet at Dec. 31, 2010 showed
$714.77 million in total assets, $716.58 million in total
liabilities, a $12.72 million shareholders' deficit and
$10.92 million noncontrolling interest.
MOUNTAIN PROVINCE: Announces Results of Diamond Valuation
---------------------------------------------------------
Mountain Province Diamonds Inc. announced the results of an
updated independent valuation of the diamonds recovered from the
Gahcho Kue Project. The valuation was conducted by WWW
International Diamond Consultants Ltd. and took place at the
London offices of the Diamond Trading Company in early April,
2011. All diamond values are based on the WWW Price Book as at
April 11, 2011.
Importantly, for the first time, the Gahcho Kue diamonds were
grouped into larger parcels, each parcel representing diamonds
from the Hearne, Tuzo and the separate lobes of the 5034
kimberlite. In the opinion of WWW, grouping of the diamonds into
larger parcels increased the accuracy of the diamond valuation.
Patrick Evans, Mountain Province President and CEO, said: "The
results of this independent diamond valuation reflect the strong
performance of rough diamond prices since the previous valuation
conducted on April 2010. Based on the analysis of leading diamond
producers and analysts, the global diamond industry will
experience peak diamond supply during 2011, with burgeoning demand
-- particularly from the robust Chinese and Indian markets --
outstripping mine supply. There is a strong probability that
rough diamond prices will continue to experience strong double
digit increases as production from aging mines decrease and new
mine supply falls short of growing demand. As the world's largest
and richest diamond development project, Gahcho Kue is well placed
to enjoy excellent diamond price support as it prepares for
production."
In their report to Mountain Province, WWW stated: "The most
valuable stone is in the Tuzo sample. This 25.13 carat stone is
the largest stone in all of the bulk samples. The stone is an
octahedron of H/I colour which WWW valued at $20,000 per carat
giving a total value of $502,600."
WWW added: "The stone with the highest value per carat sample is a
9.90 carat stone in the 5034 C/E sample. This is a makeable stone
of high colour (D/E) which WWW valued at $24,000 per carat giving
a total value of $237,600".
Commenting further, Mr. Evans said: "Experience shows that during
the mining phase larger populations of large, high value diamonds
are commonly recovered, which has the potential to improve modeled
diamond revenues. Besides the high-value 25.13 and 9.9 carat
diamonds referred to above, several other large high-value
diamonds of gem quality have been recovered from Gahcho Kue,
including 7.0 carat, 6.6 carat and 5.9 carat diamonds from the
5034 kimberlite and 8.7 carat, 6.4 carat and 4.9 carat diamonds
from the Hearne kimberlite. The presence of coarser diamonds is
an important driver of overall diamond value at Gahcho Kue."
The WWW averaged modeled price per carat for the Gahcho Kue
kimberlites is $122, which represents a 41 percent increase over
the WWW 2010 average price. The WWW models use size distribution
models (carats per size class) developed by De Beers.
Mr. Evans added: "The 2010 independent definitive feasibility
study, under which the revenue assumption was based on the mean
average of the April 2010 WWW and De Beers modeled diamond prices,
reported a 33.9 percent IRR excluding sunk costs. Further,
sensitivity analysis shows that a 10 percent increase in modeled
diamond prices results in an approximate 3 percent increase in the
project IRR. Accordingly, the 41 percent increase in the modeled
price over the past year would result in an approximate 12 percent
increase in the project IRR."
A full-text copy of the press release is available for free at:
http://is.gd/hQUfCw
About Mountain Province
Headquartered in Toronto, Canada, Mountain Province Diamonds Inc.
(TSX: MPV, NYSE AMEX: MDM) -- http://www.mountainprovince.com/--
is a Canadian resource company in the process of permitting and
developing a diamond deposit (the "Gahcho Kue Project" located in
the Northwest Territories of Canada. The Company's primary asset
is its 49% interest in the Gahcho Kue Project.
The Company's balance sheet at Dec. 31, 2010 showed C$117.30
million in total assets, C$12.14 million in total liabilities and
C$105.16 million in total shareholders' equity.
* * *
In its Management's Discussion and Analysis of the Company's
interim consolidated financial statements for the three months
ended June 30, 2010, the Company said its ability to continue as a
going concern and to realize the carrying value of its assets and
discharge its liabilities is dependent on the discovery of
economically recoverable mineral reserves, the ability of the
Company to obtain necessary financing to fund its operations, and
the future production or proceeds from developed properties.
However, the Company adds that there is no certainty that the
Company will be able to obtain financing to fund its operations.
As a result, the Company says, there is substantial doubt as to
its ability to continue as a going concern.
MOVIE GALLERY: Lenders Yield on Customer Collections
----------------------------------------------------
Bill Rochelle, bankruptcy columnist for Bloomberg News, reports
that the first-lien lenders to Movie Gallery Inc. agreed to
rectify procedures being used to collect on 3.3 million accounts
from customers owing $244 million in face amount.
Mr. Rochelle notes that when Movie Gallery confirmed its
liquidating Chapter 11 plan in October, the customer receivables
went into a trust created for first-lien term-loan lenders. The
trustee of the trust hired a collection agency that subcontracted
with National Credit Solutions LLC from Oklahoma City.
The attorneys general in all 50 states and the District of
Columbia charged that NCC was using improper collection tactics
and making inaccurate reports to credit-reporting agencies, Mr.
Rochelle says. The result was a settlement that the bankruptcy
judge in Movie Gallery's case approved on May 6, Mr. Rochelle
relates.
In the settlement, Mr. Rochelle notes, the Movie Gallery secured
lenders agreed to rescind all previously given negative credit
reports, make no new reports based on customer accounts, and add
no collection fees or interest charges to the principal amount
owed.
Customers will receive refunds for any improper fees or charges
they previously paid, Mr. Rochelle relates.
About Movie Gallery
Based in Wilsonville, Oregon, Movie Gallery, Inc., was the second
largest North American video and game rental company, operating
stores in the U.S. and Canada under the Movie Gallery, Hollywood
Video and Game Crazy brands.
Movie Gallery first filed for Chapter 11 bankruptcy protection on
Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853).
Kirkland & Ellis LLP and Kutak Rock LLP represented the Debtors.
The Company emerged from bankruptcy on May 20, 2008, with private-
investment firms Sopris Capital Advisors LLC and Aspen Advisors
LLC as its principal owners. William Kaye was appointed plan
administrator and litigation trustee.
Movie Gallery returned to Chapter 11 bankruptcy (Bankr. E.D. Va.
Case No. 10-30696) on Feb. 3, 2009. Attorneys at Sonnenschein
Nath & Rosenthal LLP and Kutak Rock LLP represent the Debtors in
their second restructuring effort. Kurtzman Carson Consultants
served as claims and notice agent.
MSR RESORT: To Sell Doral Golf Resort & Spa
-------------------------------------------
MSR Resort Golf Course LLC, et al., are seeking to sell the Doral
Golf Resort & Spa in Miami. Eric Morath, writing for Dow Jones'
Daily Bankruptcy Review, reports that the resorts' owners, a
Paulson & Co.-led investment group known as CNL-AB, said in court
papers filed Monday that a sale of the Doral would generate needed
cash while having little negative impact on the investment group's
bottom line.
According to DBR, the resort investors have hired real-estate
broker Hodges Ward Elliott Inc. to market Doral, home to the "Blue
Monster" course, a staple on the pro-golf tour for nearly a half
century.
A sale of Doral will permit the resorts "to reduce their funded
debt obligations and better position the enterprise to exit from
Chapter 11," the ownership group said in papers filed with the
U.S. Bankruptcy court in Manhattan, according to DBR. By selling
Doral now, the ownership group can use the cash to pay down other
debts and avoid the capital expenditure of updating the property.
About MSR Resort
MSR Hotels & Resorts, formerly known as CNL Hotels & Resorts Inc.,
owns a portfolio of eight luxury hotels with over 5,500 guest
rooms, including the Arizona Biltmore Resort & Spa in Phoenix, the
Ritz-Carlton in Orlando, Fla., and Hawaii's Grand Wailea Resort
Hotel & Spa in Maui.
On Jan. 28, 2011, CNL-AB LLC acquired the equity interests in the
portfolio through a foreclosure proceeding. CNL-AB LLC is a joint
venture consisting of affiliates of Paulson & Co. Inc., a joint
venture affiliated with Winthrop Realty Trust, and affiliates of
Capital Trust, Inc.
Morgan Stanley's CNL Hotels & Resorts Inc. owned the resorts
before the Jan. 28 foreclosure.
Following the acquisition, five of the resorts with mortgage debt
scheduled to mature on Feb. 1, 2011, were sent to Chapter 11 by
the Paulson and Winthrop joint venture affiliates. MSR Resort
Golf Course LLC and its affiliates filed for Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan on Feb. 1.
The resorts subject to the filings are Grand Wailea Resort and
Spa, Arizona Biltmore Resort and Spa, La Quinta Resort and Club
and PGA West, Doral Golf Resort and Spa, and Claremont Resort and
Spa.
James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O.
Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis,
LLP, serve as the Debtors' bankruptcy counsel. Houlihan Lokey
Capital, Inc., is the Debtors' financial advisor. Kurtzman Carson
Consultants LLC is the Debtors' claims agent.
The five resorts had $2.2 billion in assets and $1.9 billion in
debt as of Nov. 30, 2010, according to court filings. In its
schedules, debtor MSR Resort disclosed $59,399,666 in total assets
and $1,013,213,968 in total liabilities.
NET TALK.COM: Vicis Capital Lends $4 Million of Promissory Notes
----------------------------------------------------------------
Vicis Capital Master Fund completed its commitment to loan to Net
Talk.com, Inc., $4,000,000 represented by a series of promissory
notes ($1,000,000 funded January 2011, $1,500,000 funded March
2011 and $1,500,000 funded May, 2011) bearing interest at the rate
of 5% per annum, principal and interest payable upon demand.
Vicis is the holder of the Company's Senior Secured Debentures and
Series A Preferred Stock.
About Net Talk.com
Based in Miami, Fla., Net Talk.com, Inc., is a telephone company,
who provides, sells and supplies commercial and residential
telecommunication services, including services utilizing voice
over internet protocol ("VoIP") technology, session initiation
protocol ("SIP") technology, wireless fidelity technology,
wireless maximum technology, marine satellite services technology
and other similar type technologies.
At Dec. 31, 2010, the Company's balance sheets showed
$3.55 million in total assets, $13.41 million in total
liabilities, $1.36 million in redeemable preferred stock, and a
stockholders' deficit of $11.22 million. The Company has an
accumulated deficit of $13.64 million as of Dec. 31, 2010.
NORCRAFT COMPANIES: Moody's Slashes Corporate Family Rating to B3
-----------------------------------------------------------------
Moody's Investors Service downgraded Norcraft Holdings, L.P.'s
Corporate Family Rating to B3 from B2 and its Probability of
Default Rating to B3 from B2. In a related rating action, Moody's
downgraded Norcraft Holdings, L.P.'s Senior Unsecured Notes due
2012 to Caa2 from Caa1 and lowered Norcraft Companies, L.P.'s
Senior Secured 2nd lien Notes due 2015 to B3 from B2. The rating
outlook is negative.
These ratings/assessments were affected by this action:
Norcraft Holdings, L.P.
-- Corporate Family Rating downgraded to B3 from B2;
-- Probability of Default Rating downgraded to B3 from B2; and
-- $53.7 million Senior Unsecured Discount Notes due 2012
downgraded to Caa2 (LGD6, 91%) from Caa1 (LGD6, 91%); and
Norcraft Companies, L.P.
-- $180.0 million Senior Secured 2nd lien Notes due 2015
downgraded to B3 (LGD3, 44%) from B2 (LGD3, 44%).
Ratings Rationale
The downgrade of Norcraft Holdings, L.P.'s Corporate Family
Rating to B3 from B2 reflects Moody's view that the company will
experience deterioration in its debt leverage credit metrics.
Moody's believes that Norcraft will have difficulty in generating
sizeable levels of operating profits and free cash flow over the
intermediate term since demand for cabinetry, Norcraft's primary
product, will remain weak. Moody's projects that Norcraft
Holdings, L.P., operating though Norcraft Company, L.P., its
indirect wholly-owned operating subsidiary, (collectively
"Norcraft") will experience demand pressures resulting in debt-to-
EBITDA trending towards 7.0 times compared to 5.9 times at FYE10
and debt-to-book capitalization remaining near 100%. Moody's
further calculates that EBITA-to-interest expense will trend
towards 1.0 times versus 1.2 times for 2010 (all ratios adjusted
per Moody's methodology). The projected credit metrics exceed
those previously identified which would result in ratings
pressures. Nevertheless, Moody's recognizes Norcraft's solid
adjusted EBITA margin (13% for FYE10) as a credit strength.
The change in outlook to negative from stable reflects the looming
maturity of the Notes due 2012. Despite high operating margins,
Norcraft will not generate sufficient free cash flow to pay off
this debt, requiring the need for external financing. Improving
the company's maturity profile could result in ratings
stabilization.
The downgrade of Norcraft Companies, L.P.'s Senior Secured 2nd
lien Notes due 2015 to B3, the same as the corporate family
rating, from B2 results from the lowering of the Corporate Family
Rating These notes represent the preponderance of debt in
Norcraft's entire capital structure, and benefit from the
structurally subordinated notes issued by Norcraft Holdings, L.P.
The downgrade of Norcraft Holdings, L.P's Senior Unsecured Notes
due 2012 to Caa2, two notches below the corporate family rating,
from Caa1, results from the lowering of its credit rating. These
Notes are structurally subordinated to all of Norcraft Companies,
L.P.'s liabilities and are also the most junior credit facility in
Norcraft Holdings, L.P.'s overall capital structure.
A downgrade would likely ensue if Norcraft is unable to address
its looming maturity in the near term. Norcraft must also
demonstrate its ability to right-size its cost structure relative
to its revenues while generating meaningful earnings in order to
improve its credit metrics. EBITA-to-interest expense trending
below 1.0 times (adjusted per Moody's methodology) or a
deteriorating liquidity profile would cause ratings pressures and
may result in a downgrade as well.
An upgrade is unlikely in the near future since Norcraft must
contend with ongoing uncertainties in its end markets and demand
for its products. However, if debt-to-book capitalization begins
trending towards 70% or if EBITA-to-interest expense approaches
2.0 times (adjusted per Moody's methodology), then positive rating
actions may ensue.
The principal methodology used in rating Norcraft Holdings, L.P.,
was the Global Manufacturing Industry Methodology, published
December 2010 Other methodologies used include Loss Given Default
for Speculative Grade Issuers in the US, Canada, and EMEA,
published June 2009.
Norcraft Holdings, L.P., headquartered in Eagan, Minnesota, is a
holding company that conducts its operations through Norcraft
Companies, L.P. and its subsidiaries (collectively "Norcraft").
Norcraft is a domestic manufacturer and assembler of finished
kitchen and bathroom cabinetry. Revenues for 2010 totaled about
$263 million.
NORTHGATECROSSING LLC: Case Summary & 14 Largest Unsec Creditors
----------------------------------------------------------------
Debtor: NorthGateCrossing, LLC
Jefferson Street South of Indio Blvd.
Indio, CA 92201
Bankruptcy Case No.: 11-24944
Chapter 11 Petition Date: May 5, 2011
Court: United States Bankruptcy Court
Central District of California (Riverside)
Judge: Scott C. Clarkson
Debtor's Counsel: Richard H. Golubow, Esq.
WINTHROP COUCHOT
660 Newport Center Drive Ste 400
Newport Beach, CA 92660
Tel: (949) 720-4100
Fax: (949) 720-4111
E-mail: rgolubow@winthropcouchot.com
Scheduled Assets: $27,502,421
Scheduled Debts: $29,015,903
The petition was signed by Patrick B. Cobb, managing member of
Oresund Capital, LLC, Debtor's managing member.
Debtor's List of 14 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Desert Underground Trade $44,945
Utilities, Inc.
Attn: Paul Edmeier
74-478 HWY 111, #295
Palm Desert, CA 92260
MDS Consulting Consulting $40,675
Attn: Chris Bergh
17320 Redhill Ave., #350
Irvine, CA 92614
A Gallery Trade $36,646
Attn: Glenda Ramey
73956 El Paseo
Palm Desert, CA 92260
Delos Van Earl Art $36,000
Joseph Wise Gallery Art $24,091
Desert Cities Water Trade $15,390
Truck
Metal Motives Art $9,675
India Water Authority Trade $9,446
Imperial Irrigation Trade $4,000
District
South Coast Air Fees $3,300
Quality Management
SWRCB Fees $2,844
Muller/Oliver/ Trade $2,485
Whittaker, LLP
Mark Tipperman, Esq Legal $798
Alliance Protection Trade $197
NORTHLAKE DEVELOPMENT: Transfer of Kindwood Property Voided
-----------------------------------------------------------
Michael Earwood, the minority member of Kinwood Capital Group,
LLC, secretly formed Northlake Development, LLC, with himself as
sole owner. Mr. Earwood then signed a deed purporting to transfer
a parcel of Kinwood's property to Northlake, which then granted a
deed of trust on the property to secure a bank loan. Northlake
later defaulted on the loan and filed bankruptcy, listing the
property as an asset. Upon learning what Mr. Earwood had done,
Kinwood's majority member, George Kiniyalocts, filed an objection
in Northlake's bankruptcy proceeding, arguing that Mr. Earwood had
no authority to transfer Kinwood's property, and Northlake's deed
was void. Because Mr. Earwood had neither actual nor apparent
authority to transfer Kinwood's property, and because Kinwood did
not ratify the transaction, it was void and of no legal effect,
the Supreme Court of Mississippi ruled en banc on May 5.
The case before the Mississippi high court is In The Matter of
Northlake Development L.L.C.: Kinwood Capital Group, L.L.C.;
George Kiniyalocts, Individually and as General Partner of
Kiniyalocts Family Ptrs. I, Ltd., v. BANKPLUS, No. 2010-FC-01308-
SCT (Miss. Sup. Ct.). A copy of the decision is available at
http://is.gd/E6smXCfrom Leagle.com.
Presiding Justice Jess H. Dickinson penned the decision. Chief
Justice William L. (Bill) Waller, Jr., Presiding Justice George C.
Carlson, Jr., and Associate Justices Michael K. Randolph, Ann H.
Lamar, James W. Kitchens, David A. Chandler, Randy G. Pierce and
Leslie D. King concurred.
Northlake Development LLC in Ridgeland, Mississippi, filed for
Chapter 11 bankruptcy (Bankr. S.D. Miss. Case No. 06-01934)(Olack,
J.) on Sept. 14, 2006, represented by Robert B. Childers, Esq.
The Debtor previously filed for chapter 11 protection (Bankr.
S.D. Miss. Case No. 05-04348)(Ellington, J.) on Aug. 18, 2005.
It estimated $1 million to $10 million in assets and $500,000 to
$1 million in debts.
PARMALAT SPA: Trustee Presses to Move Auditor Suits to State Court
------------------------------------------------------------------
Samuel Howard at Bankruptcy Law360 reports that the foreign
trustee overseeing Parmalat SpA's reorganization overseas and a
liquidating Parmalat financial unit on Monday sought to move to
Illinois state court their suits in New York implicating auditor
Grant Thornton International in the securities fraud class
litigation that bankrupted the Italian dairy giant.
Parmalat Capital Finance Ltd., a subsidiary undergoing liquidation
in the Grand Caymans, and Dr. Enrico Bondi, trustee and CEO of the
reorganized Parmalat, urged the federal court in New York, the
site of Parmalat-related multidistrict litigation, to abstain from
exercising jurisdiction.
About Parmalat S.p.A.
Headquartered in Milan, Italy, Parmalat S.p.A. --
http://www.parmalat.net/-- sells nameplate milk products that can
be stored at room temperature for months. It also has about 40
brand product lines, which include yogurt, cheese, butter, cakes
and cookies, breads, pizza, snack foods and vegetable sauces,
soups and juices.
Parmalat S.p.A. and its Italian affiliates filed separate
petitions for Extraordinary Administration before the Italian
Ministry of Productive Activities and the Civil and Criminal
District Court of the City of Parma, Italy on Dec. 24, 2003. Dr.
Enrico Bondi was appointed Extraordinary Commissioner in each of
the cases. The Parma Court declared the units insolvent.
On June 22, 2004, Dr. Bondi, on behalf of the Italian entities,
sought protection from U.S. creditors by filing a petition under
Sec. 304 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No.
04-14268).
Parmalat's U.S. operations filed for Chapter 11 protection on
Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer,
Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP,
represented the U.S. Debtors. When the U.S. Debtors filed for
bankruptcy protection, they reported more than US$200 million in
assets and debts. The U.S. Debtors emerged from bankruptcy on
April 13, 2005.
Three special-purpose vehicles established by Parmalat S.p.A. --
Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food
Holdings Ltd. -- commenced separate winding up proceedings before
the Grand Court of the Cayman Islands. Gordon I. MacRae and James
Cleaver of Kroll (Cayman) Ltd. were appointed liquidators in the
cases. On Jan. 20, 2004, the Liquidators filed a Sec. 304
petition (Bankr. S.D.N.Y. Case No. 04-10362). Gregory M. Petrick,
Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey,
Esq., at Janvey, Gordon, Herlands Randolph, represented the
Finance Companies in the Sec. 304 case.
The Honorable Robert D. Drain presided over the Parmalat Debtors'
U.S. cases and Sec. 304 cases. In 2007, Parmalat obtained a
permanent injunction in the Sec. 304 cases.
PEREGRINE I: Case Converted to Chapter 7 Amid Lack of Funding
-------------------------------------------------------------
Exactly two weeks after its Chapter 11 bankruptcy filing,
Peregrine I LLC on Monday obtained an order from Judge Mary F.
Walrath converting its case to a liquidation under Chapter 7 of
the Bankruptcy Code.
In its Motion to Convert, which was filed on the same day, the
Debtor explained that the prepetition secured parties have not
consented to the use of their cash collateral beyond May 13. The
Debtor was not able to obtain postpetition financing on terms
acceptable to the prepetition secured parties and has no ability
to grant adequate protection to attempt to obtain authority for
contested financing alternatives, given that all of its assets are
encumbered and the prepetition secured parties are undersecured.
As a result, the Debtor will have no funding and no ability to use
cash collateral beyond Friday.
The Debtor also said it won't have an outside manager as the
prepetition secured parties have indicated that they will not
consent to the use of their cash collateral to pay any fees of its
manager, PE-Cayman Inc.
Earlier on Monday, Judge Walrath granted the Debtor interim
authority to use cash collateral securing its obligations to
lenders under a 2007 facilities agreement until May 15. The term
loan provided the Debtor $258,750,000 in prepetition funding. GE
Capital Markets Inc., and WestLB AG, New York Branch, serve as
lead arrangers, WestLB AG also acts as facility agent and security
trustee under the agreement. As of the petition date,
$189,973,592 was outstanding under the loan.
In its Cash Collateral Motion, the Debtor proposed to name a chief
restructuring officer to oversee an orderly process for the
marketing and sale of its oil drilling vessel. The hiring of the
CRO was struck out in the Interim Cash Collateral Order.
In the Interim Cash Collateral Order, Judge Walrath set a May 23
to consider the Debtor's cash use on a final basis.
On Friday, a meeting of creditors was scheduled by the U.S.
Trustee in the case. The U.S. Trustee set the meeting, pursuant
to Sec. 341 of the Bankruptcy Code, for June 1, 2011, at 2:00 p.m.
Pursuant to the Case Conversion Order, the Court gave the Debtor
until May 25 to file schedules of assets and liabilities and
statement of financial affairs. The U.S. Trustee is directed to
appoint a chapter 7 trustee.
Counsel Retention
Also on Monday, Peregrine I filed with the Bankruptcy Court a
request to employ Latham & Watkins as attorneys. The Debtor did
note in its request that it may need to convert the Chapter 11
case to a case under Chapter 7 if it is unable to obtain post-
petition debtor-in-possession financing or the use of cash
collateral from its secured lenders.
According to the request, the Debtor has consulted with L&W prior
to the bankruptcy filing with respect to, inter alia, advice
regarding issues related to the Debtor's restructuring efforts and
the preparation for the commencement and prosecution of the
Chapter 11 case. L&W has performed other work for the Debtor in
the past, and is therefore familiar with the Debtor's corporate
structure and business.
Latham's David S. Heller, Esq., attests that his firm does not
hold or represent any interest adverse to the Debtor or to its
bankruptcy estate, and is a "disinterested person" as that term is
defined in section 101(14) of the Bankruptcy Code, as modified by
section 1107(b) of the Bankruptcy Code.
L&W's billing rates are:
Partners $750 to $1,210 an hour
Counsel $695 to $975 an hour
Associates $295 to $725 an hour
Paraprofessionals $95 to $575 an hour
On April 25, 2011, the Debtor paid L&W $200,000 as a retainer for
its prepetition and postpetition services rendered and expenses
incurred on behalf of the Debtor. As of the Petition Date, the
Debtor does not owe L&W any amounts for legal services rendered
prior to the Petition Date.
The Debtor also has submitted a separate application to retain
Richards, Layton & Finger, P.A. to act as its co-counsel. RLF or
other conflicts counsel will also handle matters where L&W is
prohibited from assisting the Debtor due to the existence of a
conflict of interest.
Richards Layton's hourly rates are:
John H. Knight, Esq. $625 per hour
Russell C. Silberglied, Esq. $625 per hour
L. Katherine Good, Esq. $340 per hour
Marisa A. Terranova, Esq. $280 per hour
Cathy Greer, Esq. $200 per hour
On April 25, Richards Layton received a $100,000 retainer from the
Debtor. The firm also received an additional $25,000 as advance
payment for assistance in preparing statements of financial
affairs and schedules and attendance at a section 341 meeting of
creditors.
A hearing on the employment application was set for May 23, 2011
at 10:30 a.m.
About Peregrine I LLC
Headquartered in Cayman Islands, Peregrine I LLC, is an offshore
drilling company backed by a unit of General Electric Co.
Peregrine I, LLC, filed a Chapter 11 petition (Bankr. D. Del. Case
No. 11-11230) on April 25, 2011. Russell C. Silberglied, Esq., at
Richards, Layton & Finger, in Wilmington, Delaware, serves as
counsel. The Debtor estimated assets and debts of US$100 million
to US$500 million as of the Chapter 11 filing.
The Company said US$190 million of a US$259 million loan is
unpaid. The list of 20 largest unsecured creditors said that
WestLB AG, Banco Bilbao Vizcaya Argentaria, Dexia Credit Local,
DVB Bank, GE VFS Financing Holding, Inc., HSH Nordbank AG,
Santander Asset Finance PLC, and Sumitomo Mitsui Banking Corp.,
are owed money on account of the loan, although the percentage
held by each lender is not available at this time.
No official committee has been appointed in the Chapter 11 case.
WestLB AG, New York Branch, is represented in the case by:
Madlyn Gleich Primoff, Esq.
Mark F. Liscio, Esq.
KAYE SCHOLER LLP
425 Park Avenue
New York, NY 10022
E-mail: mprimoff@kayescholer.com
mliscio@kayescholer.com
- and -
Laurie Selber Silverstein, Esq.
POTTER ANDERSON & CORROON LLP
6th Floor, 1313 North Market Street
Wilmington, DE 19801
E-mail: lsilverstein@potteranderson.com
PFG ASPENWALK: Disclosure Statement Hearing Today
-------------------------------------------------
The U.S. Bankruptcy Court for the District of Minnesota will
continue on May 11, 2011, at 9:30 a.m. the hearing on PFG
AspenWalk, LLC's disclosure statement.
The hearing was previously scheduled for April 20, 2011, at
10:30 a.m.
As reported by the Troubled Company Reporter on March 30, 2011,
the Debtor delivered to the Court 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. A full-text copy of the Plan and Disclosure
Statement is available for free at:
http://bankrupt.com/misc/PFGASPENWALK_PLanandDS.pdf
Bank of America, N.A., together with the U.S. Trustee, objects to
the Debtor's disclosure statement for failure to provide adequate
and correct information.
Bank of America believes that (1) confirmation should be
contingent on resolution of the key risks identified by the Debtor
and (2) the Debtor should correct its misstatements with regards
to claim amounts.
Bank of America says, "The Debtor admits that the success of its
plan 'depends almost entirely on the ability of the Debtor to
obtain Final PUD Approval for the Development Property and then
refinance the Development Property as described in [the]
Disclosure Statement.' Essentially, the plan is not confirmable
unless these conditions occur. The UST thus believes that having
final financing in place should be a prerequisite to confirmation.
Bank of America agrees, and believes that Final PUD approval
should also be a prerequisite to confirmation. The Debtor has
identified these two key risks; it would be a waste of the Court's
and creditors' time to attempt to confirm the plan before
resolving them."
The UST notes that the disclosure statement provides inconsistent
information with respect to the amount of general unsecured
claims. Bank of America claims that the disclosure statement
appears to misstate the amount of other claims as well Bank of
America filed a secured claim of approximately $7.2 million,
consisting of no less than $6,488,884.77 under a note and no less
than $703,307.18 under a swap agreement. In the disclosure
statement, the Debtor describes Bank of America's claim as
$6,448,844. "The Debtor appears to have ignored Bank of America's
claim under the swap agreement, which it may not do without
successfully objecting to Bank of America's claim," Bank of
America states.
According to Bank of America, the Debtor also understates Rapid
Funding, LLC's claim. The disclosure statement states that, as of
March 15, the Debtor was indebted to Rapid Funding in the amount
of $540,000. "This understates the debtor's indebtedness to
Rapid Funding in that it ignores $30,000 in principal and accrued
interest of approximately $20,000. As such, the Debtor
understates its indebtedness to Rapid Funding by at least $50,000.
Further, the Debtor should be required to amend its disclosure
statement to include its most recent draw of $215,250 from the DIP
loan. When these changes are made, Bank of America expects that
the disclosure statement will reflect indebtedness to Rapid
Funding in excess of $800,000. Thus, in addition to the
corrections required by the UST, the disclosure statement should
be modified to (a) make confirmation conditional on both Final PUD
approval and confirmed financing, so that the plan will not be
patently unconfirmable when confirmation is sought, and (b)
provide accurate information with regard to the amount of all
claims. In all other regards, Bank of America adopts and endorses
the UST Objection," Bank of America says.
Bank of America is represented by:
Miller, Canfield, Paddock And Stone, P.L.C.
Timothy A. Fusco
Marc N. Swanson
Ronald A. Spinner
150West Jefferson, Suite 2500
Detroit, MI 48226
Phone: (313) 963-6420
E-mail: fusco@millercanfield.com
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.
PHILADELPHIA ORCHESTRA: To Escrow Ticket-Sale Proceeds
------------------------------------------------------
Bill Rochelle, Bloomberg News' bankruptcy columnist, reports that
a lawyer for the Philadelphia Orchestra told the bankruptcy judge
at a hearing May 9 that he couldn't see "any scenario" where the
there won't be a season this fall. To give comfort to
subscribers, he said proceeds from ticket sales will be placed in
escrow in case concerts are canceled.
About Philadelphia Orchestra
The Philadelphia Orchestra -- http://www.philorch.org/-- claims
to be among the world's leading orchestras. Bloomberg News says
the orchestra became the first major U.S. symphony to file for
bankruptcy protection, surprising the music world.
Previous conductors include Fritz Scheel (1900-07), Carl Pohlig
(1907-12), Leopold Stokowski (1912-41), Eugene Ormandy (1936-80),
Riccardo Muti (1980-92), Wolfgang Sawallisch (1993-2003), and
Christoph Eschenbach (2003-08). Charles Dutoit is currently chief
conductor, and Yannick Nezet-Seguin has assumed the title of music
director designate until he takes up the baton as The Philadelphia
Orchestra's next music director in 2012.
The Philadelphia Orchestra Association, The Academy of Music of
Philadelphia, Inc., and Encore Series, Inc., filed separate
Chapter 11 petitions (Bankr. E.D. Pa. Case Nos. 11-13098 to
11-13100) on April 16, 2011. Judge Eric L. Frank presides over
the case. The Philadelphia Orchestra Association is being advised
by Dilworth Paxson LLP, its legal counsel, and Alvarez & Marsal,
its financial advisor. In its petition, Philadelphia Orchestra
estimated $10 million to $50 million in assets and debts.
PHOENIX FOOTWEAR: Suspending Filing of Reports with SEC
-------------------------------------------------------
Phoenix Footwear Group, Inc., filed a Form 15 notifying of its
suspension of its duty under Section 15(d) to file reports
required by Section 13(a) of the Securities Exchange Act of 1934
with respect to its common stock. Pursuant to Rule 12h-3, the
Company is suspending reporting because there are currently less
than 300 holders of record of the notes. The holders of the
common shares as of May 4, 2011, total 201.
About Phoenix Footwear
Based in Carlsbad, California, Phoenix Footwear Group, Inc. (NYSE
Amex: PXG) specializes in quality comfort women's and men's
footwear with a design focus on fitting features. Phoenix
Footwear designs, develops, markets and sells footwear in a wide
range of sizes and widths under the brands Trotters(R),
SoftWalk(R), and H.S. Trask(R). The brands are primarily sold
through department stores, leading specialty and independent
retail stores, mail order catalogues and internet retailers and
are carried by approximately 650 customers in more than 900 retail
locations throughout the U.S. Phoenix Footwear has been engaged
in the manufacture or importation and sale of quality footwear
since 1882.
The Company reported a net loss of $1.70 million on $17.26 million
of net sales for the year ended Jan. 1, 2011, compared with a net
loss of $6.99 million on $18.76 million of net sales during the
prior year.
The Company's balance sheet at Jan. 1, 2011 showed $10.74 million
in total assets, $7.90 million in total liabilities and $2.84
million in total stockholders' equity.
As reported by the TCR on April 18, 2011, Mayer Hoffman McCann
P.C., San Diego, Calif., expressed substantial doubt about the
Company's ability to continue as a going concern, following the
2010 financial results. The independent auditors noted that the
Company has suffered recurring losses and negative cash flows from
continuing operations.
PRM JACKSON: Case Summary & 18 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: PRM Jackson Pond Resort Residential Development
Associates, LLC
c/o PRM Realty Group, LLC
118 N. Clinton Street, Suite LL366
Chicago, IL 60661
Bankruptcy Case No.: 11-33115
Chapter 11 Petition Date: May 5, 2011
Court: U.S. Bankruptcy Court
Northern District of Texas (Dallas)
Judge: Barbara J. Houser
Debtor's Counsel: John Mark Chevallier, Esq.
MCGUIRE, CRADDOCK & STROTHER, P.C.
2501 N. Harwood, Suite 1800
Dallas, TX 75201
Tel: (214) 954-6800
Fax: (214) 954-6850
E-mail: mchevallier@mcslaw.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 18 largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/txnb11-33115.pdf
The petition was signed by Peter R. Morris, president of PRM
Management of Illinois, Inc., manager of PRM Realty Group, LLC,
manager.
QINGDAO FOOTWEAR: Sherb & Co. Raises Going Concern Doubt
--------------------------------------------------------
Qingdao Footwear, Inc., filed on May 5, 2011, its annual report on
Form 10-K for the fiscal year ended Dec. 31, 2010.
Sherb & Co., LLP, in New York, expressed substantial doubt about
Qindao Footwear's ability to continue as a going concern. The
independent auditors noted that the Company has assumed fiscal
responsibilities related to tax liabilities and penalties for
periods prior to Dec. 31, 2009, related to VAT tax payable and
income tax payable.
"These liabilities are significant as the Company has a working
capital deficiency, and a shareholders' deficiency, as of Dec. 31,
2010, and 2009, subsequent to the Company's assumption of these
liabilities. In addition, although the Company operations have
provided cash from operating activities, these operations might
not be sufficient to satisfy VAT tax payable and income tax
payable assumed by the Company."
The Company reported net income of $4.0 million on $21.3 million
of net revenue for 2010, compared with net income of $5.1 million
on $17.9 million of net revenue for 2009.
The Company's balance sheet at Dec. 31, 2010, showed $10.2 million
in total assets, $16.8 million in total liabilities, and a
stockholders' deficit of $6.6 million.
A complete text of the Form 10-K is available for free at
http://is.gd/HLgQ9u
Qingdao Footwear, Inc., is a designer and retailer of branded
footwear in Northern China. The Company was organized to service
what it believes is an unmet and increasing demand for high
quality formal and casual footwear throughout the PRC.
The Company's principal business includes (1) designing and
selecting designs for men's and women's leather shoe lines; (2)
sourcing and purchasing contract-manufactured footwear; and (3)
selling these lines of footwear under the Company's proprietary
brand, "Hongguan". The Company does not manufacture or assemble
any shoes. The Company operates a number of flagship stores
throughout greater Qingdao.
QWEST COMMUNICATIONS: Reports $211-Mil. Profit in March 31 Qtr.
---------------------------------------------------------------
Qwest Communications International Inc. filed with the U.S.
Securities and Exchange Commission its quarterly report on Form
10-Q reporting net income of $211 million on $2.84 billion of
operating revenues for the three months ended March 31, 2011,
compared with net income of $38 million on $2.96 billion of
operating revenue for the same period during the prior year.
The Company's balance sheet at March 31, 2011, showed
$16.85 billion in total assets, $18.41 billion in total
liabilities, and a $1.56 billion total stockholders' deficit.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/HbioQ9
About Qwest
Based in Denver, Colorado, Qwest Communications (NYSE: Q) --
http://www.qwest.com/-- offers residential customers a new
generation of fiber-optic Internet service, high-speed Internet
solutions, as well as digital home phone, wireless service
available through Verizon Wireless and DIRECTV services. Qwest is
also the choice of 95% of Fortune 500 companies, offering a
full suite of network, data and voice services for small
businesses, large businesses, government agencies and wholesale
customers. Additionally, Qwest participates in Networx, the
largest communications services contract in the world, and is
recognized as a leader in the network services market by leading
technology industry analyst firms.
Qwest carries a 'Ba1' corporate family and probability of default
ratings from Moody's and has 'BB' issuer credit ratings from
Standard & Poor's.
"Our high debt levels pose risks to our viability and may make us
more vulnerable to adverse economic and competitive conditions, as
well as other adverse developments," the Company said in its Form
10-K for the year ended Dec. 31, 2009. At Dec. 31, the Company's
consolidated debt was approximately $14.2 billion. Approximately
$5.8 billion of its debt obligations come due over the next three
years. This amount includes $1.265 billion of our 3.50%
Convertible Senior Notes due 2025, which it may elect to redeem at
any time on or after November 20, 2010 and holders may require the
Company to repurchase for cash on November 15, 2010.
Fitch Ratings is maintaining the Rating Watch Positive on the
'BB' Issuer Default Rating assigned to Qwest Communications
International, Inc. and its subsidiaries. Concurrently, Fitch
has affirmed the 'BBB-' issue rating assigned to Qwest's
$1.035 billion senior secured credit facility and the senior
unsecured debt issued by Qwest Corporation. Approximately
$13.1 billion of debt outstanding as of June 30, 2010, including
$7.9 billion of debt outstanding at QC, is affected by Fitch's
action.
RADIO ONE: Sees $1.22 to $1.24 Loss Per Share in 1st Quarter
------------------------------------------------------------
Radio One, Inc., announced updated preliminary results for the
quarter ended March 31, 2011. The Company anticipates net revenue
of approximately $65.0 million, an increase of $6.0 million from
the same period in 2010, an increase of 10.2%. The Company now
anticipates Adjusted EBITDA(1) of approximately $9.9 million to
$10.9 million. However, the Company now anticipates a net loss of
$1.22 to $1.24 per share for the quarter ended March 31, 2011.
The Company had previously anticipated a net loss of $0.37 to
$0.39 per share for the period. The increase in the anticipated
net loss is primarily the result of a non-cash charge related to
its provision for income taxes. The Company now anticipates a
provision for income taxes for the quarter ended March 31, 2011,
of $45.6 million irrespective of the Company continuing to hold
net operating losses of approximately $548.0 million.
Approximately $45.3 million of the amount reflects the increase in
deferred tax liabilities associated with the amortization of
certain of the Company's radio broadcast licenses for tax
purposes.
The Company also made two announcements concerning its investment
in TV One, LLC. First, Radio One announced that TV One has closed
upon the redemption of a 12.4% ownership interest held by DIRECTV.
As an effect of the redemption, Radio One's ownership interest in
TV One has now increased to approximately 50.9%, giving Radio One
a majority interest in TV One. Further, Radio One announced that
it will account for TV One on a consolidated basis as of April 14,
2011. The Company made the announcement after having executed an
amendment to the TV One operating agreement with the remaining
members of TV One concerning certain governance issues separate
and apart from the redemption transaction increasing Radio One's
interest in TV One.
About Radio One
Based in Washington, Radio One, Inc. (Nasdaq: ROIAK and ROIA) --
http://www.radio-one.com/-- is a diversified media company that
primarily targets African-American and urban consumers. The
Company is one of the nation's largest radio broadcasting
companies, currently owning 53 broadcast stations located in 16
urban markets in the United States. Radio One operates
syndicated programming including the Russ Parr Morning Show, the
Yolanda Adams Morning Show, the Rickey Smiley Morning Show, CoCo
Brother Live, CoCo Brother's "Spirit" program, Bishop T.D. Jakes'
"Empowering Moments", the Reverend Al Sharpton Show, and the
Warren Ballentine Show.
The Company also owns a controlling interest in Reach Media, Inc.
-- http://www.blackamericaweb.com/-- owner of the Tom Joyner
Morning Show and other businesses associated with Tom Joyner.
Radio One owns Interactive One -- http://www.interactiveone.com/
-- an online platform serving the African-American community
through social content, news, information, and entertainment,
which operates a number of branded sites, including News One,
UrbanDaily, HelloBeautiful, Community Connect Inc. --
http://www.communityconnect.com/-- an online social networking
company, which operates a number of branded Web sites, including
BlackPlanet, MiGente, and Asian Avenue and an interest in TV One,
LLC -- http://www.tvoneonline.com/-- a cable/satellite network
programming primarily to African-Americans.
The Company reported a net loss of $26.62 million on $279.90
million of net revenue for the year ended Dec. 31, 2010, compared
with a net loss of $48.55 million on $272.09 million of net
revenue during the prior year.
The Company's balance sheet at Dec. 31, 2010 showed $999.21
million in total assets, $774.24 million in total liabilities,
$30.64 million in redeemable noncontrolling interests and $194.33
million in total stockholders' equity.
In its report dated Aug. 23, 2010, for the Company's fiscal 2009
financial statements, Ernst & Young LLP expressed substantial
doubt as to the Company's ability to continue as a going concern,
given certain covenant violations under the Company's loan
agreements which could have resulted in significant portions of
the Company's outstanding debt becoming callable by the Company's
lenders. The Company noted that these violations were cured as a
part of certain refinancing transactions more fully described in
our Current Report on Form 8-K filed, Dec. 1, 2010. Having cured
these violations, the Company's audited financial statements for
2010 have been prepared assuming that it will continue as a going
concern.
* * *
In the Dec. 10, 2010 edition of the TCR, Moody's confirmed the
Caa1 rating for Radio One, Inc.'s Corporate Family Rating and
confirmed its Caa2/LD Probability of Default Rating. According to
Moody's, the Caa1 corporate family rating will reflect Radio One's
high pro forma debt-to-EBITDA leverage of approximately 8.0x
(incorporating Moody's standard adjustments) mitigated by improved
operating performance due to expected political advertising gains
in 4Q10 followed by double digit EBITDA gains in 1Q11 compared to
a weak 1Q10. Despite expected growth in EBITDA and improving
debt-to-EBITDA leverage ratios, reported debt balances will remain
flat at approximately $655 million for the next 12 months due to
the anticipated funding of the TV One capital call as well as the
potential accretion of the PIK portion of the new 12.5%/15%
subordinated notes due 2016.
As reported by the Troubled Company Reporter on March 11, 2011,
Standard & Poor's Ratings Services said it raised its long-term
corporate credit rating on U.S. radio broadcaster Radio One Inc.
to 'B-' from 'CCC+'. The rating outlook is stable. "The 'B-'
rating and stable outlook reflect S&P's view that the
proposed transaction will improve Radio One's financial
flexibility by eliminating near-term refinancing risk and
increasing headroom under financial covenants," said Standard &
Poor's credit analyst Michael Altberg. "Going forward, S&P
believes the company's increased ownership in TV One LLC, a
growing African American-targeted cable TV network, provides
additional diversity to Radio One's business profile and access to
a more stable revenue stream."
RASER TECHNOLOGIES: Arranging July 25 Auction for Plan Sponsorship
------------------------------------------------------------------
Bill Rochelle, Bloomberg News' bankruptcy columnist, reports that
Raser Technologies Inc. intends on holding a July 25 auction for
the right to sponsor a reorganization plan and take ownership when
the company emerges from Chapter 11.
Raser filed a motion last week setting up a hearing on May 19 to
approve auction and sale procedures. Prepetition, the Debtor
reached agreement on a reorganization plan where Linden Advisors
LP and Tenor Capital Management LP will acquire all the new stock
for $19.7 million, absent higher and better offers. The price is
composed of $2.5 million cash and exchange for debt.
If the bid procedures are approved, other bids to sponsor the plan
would be due initially on July 20, two days before auction. The
sale itself would be approved as part of the confirmation process
on a Chapter 11 reorganization plan.
Linden and Tenor agreed to supply $8.75 million in financing for
the Chapter 11 case. From the total, $6 million is for paying off
existing debt. The two investors already own about half the
$57.2 million owing on 8% convertible senior unsecured notes.
About Raser Technologies, Inc.
Provo, Utah-based Raser Technologies, Inc., also known as Wasatch
Web Advisors, Inc., filed for Chapter 11 protection (Bankr. D.
Del. Case No. 11-11315) on April 29, 2011.
Other Debtor affiliates filed for separate Chapter 11 protection
on April 29, 2011, (Bankr. Case Nos. 11-11319 - 11-11350).
Peter S. Partee, Sr., Esq., and Richard P. Norton, Esq., at Hunton
& Williams LLP represent the Debtors in their restructuring
efforts. The Debtors' local counsel is Bayard, P.A. Sichenzia
Ross Friedman Ference LLP serves as the Debtors' corporate
counsel. The Debtors' financial advisor is Canaccord Genuity.
The Debtors disclosed $41.8 million in assets and $107.8 million
in debts as of Dec. 31, 2010.
The Company reported a net loss of $101.80 million on
$4.25 million of revenue for the fiscal year ended Dec. 31, 2010,
compared with a net loss of $20.90 million on $2.19 million of
revenue during the prior year.
The Company's balance sheet at Dec. 31, 2010, showed
$41.84 million in total assets, $107.78 million in total
liabilities, $5.00 million of Series A-1 cumulative convertible
preferred stock, and a stockholders' deficit of $70.94 million.
RASER TECHNOLOGIES: Organizational Meeting to Form Panel on May 12
------------------------------------------------------------------
Roberta DeAngelis, United States Trustee for Region 3, will hold
an organizational meeting on May 12, 2011, at 10:00 a.m. in the
bankruptcy case of Raser Technologies Inc., et al.. The meeting
will be held at J. Caleb Boggs Federal Building, 844 King Street,
Room 5209, Wilmington DE 19801
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 Raser Technologies, Inc.
Provo, Utah-based Raser Technologies, Inc., also known as Wasatch
Web Advisors, Inc., filed for Chapter 11 protection (Bankr. D.
Del. Case No. 11-11315) on April 29, 2011.
Other Debtor affiliates filed for separate Chapter 11 protection
on April 29, 2011, (Bankr. Case Nos. 11-11319 - 11-11350).
Peter S. Partee, Sr., Esq., and Richard P. Norton, Esq., at Hunton
& Williams LLP represent the Debtors in their restructuring
efforts. The Debtors' local counsel is Bayard, P.A. Sichenzia
Ross Friedman Ference LLP serves as the Debtors' corporate
counsel. The Debtors' financial advisor is Canaccord Genuity.
The Debtors disclosed $41.8 million in assets and $107.8 million
in debts as of Dec. 31, 2010.
The Company reported a net loss of $101.80 million on
$4.25 million of revenue for the fiscal year ended Dec. 31, 2010,
compared with a net loss of $20.90 million on $2.19 million of
revenue during the prior year.
The Company's balance sheet at Dec. 31, 2010, showed
$41.84 million in total assets, $107.78 million in total
liabilities, $5.00 million of Series A-1 cumulative convertible
preferred stock, and a stockholders' deficit of $70.94 million.
RATECH MACHINE: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Ratech Machine, Inc.
535 Simmon Drive
Osceola, WI 54020
Bankruptcy Case No.: 11-33053
Chapter 11 Petition Date: May 6, 2011
Court: U.S. Bankruptcy Court
District of Minnesota (St Paul)
Judge: Nancy C. Dreher
Debtor's Counsel: Thomas Flynn, Esq.
LARKIN HOFFMAN DALY & LINDGREN
7900 Xerxes Avenue South, Suite 1500
Bloomington, MN 55431
Tel: (952) 896-3362
E-mail: tflynn@larkinhoffman.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/mnb11-33053.pdf
The petition was signed by Ray Richardson, Jr., president.
RCC SOUTH: Seeks July 28 Plan Exclusivity Extension
---------------------------------------------------
RCC South, LLC, asks the U.S. Bankruptcy Court for the District of
Arizona to further extend its exclusive period to solicit
acceptances of its plan for a period of at least 90 days, or until
July 28, 2011.
John J. Hebert, Esq., at Polsinelli Shughart PC, in Phoenix,
Arizona, asserts that the underlying premise of the exclusivity
provisions of Section 1121 of the Bankruptcy Code is to promote
RCC South's reorganization by allowing it the exclusive right to
negotiate a Plan with its creditors for a period of time.
According to Mr. Hebert, RCC South has, in good faith, proposed a
plan of reorganization that is confirmable and is in the best
interests of all creditors and interest holders. In fact, RCC
South believes that the Plan currently on file will engender a
good faith discourse between RCC South and iStar's successor, SFI
Belmont, LLC, regarding the treatment of its claims, and RCC South
is confident that a consensual plan can be reached, Mr. Hebert
tells the Court.
However, if the Court does not extend the Exclusive Solicitation
Period, and thereby allows Belmont and any other interested
creditor to file a competing plan, particularly a liquidating
plan, then Belmont will have little incentive to engage in the
"consensual development" of a reorganization plan, RCC South will
lose its leverage to negotiate a consensual plan, and the
Congressionally recognized purpose for the grant of exclusivity,
specifically, and the goal of Chapter 11, generally, will be lost,
Mr. Hebert argues.
Scottsdale, Arizona-based RCC South, LLC, owns and operates two
Class A" office buildings known as Phase III and Phase IV of the
Raintree Corporate Center in Scottsdale Arizona. The Company
filed for Chapter 11 bankruptcy protection (Bankr. D. Ariz. Case
No. 10-23475) on July 27, 2010. John J. Hebert, Esq., at
Polsenelli Shughart, P.C., assists the Debtor in its restructuring
effort. The Debtor estimated its assets and debts at $50 million
to $100 million as of the Petition Date.
REAL MEX: Moody's Cuts Corp. Family Rating to 'Caa3'; Outlook Neg.
------------------------------------------------------------------
Moody's Investors Service downgraded Real Mex Restaurants, Inc.'s
corporate family rating and probability of default rating to Caa3
from Caa2, and rating of its senior secured notes due 2013 to Caa1
from B3. The speculative grade liquidity rating was lowered to
SGL-4 from SGL-3. The rating outlook is negative.
Ratings downgraded:
-- Corporate family rating -- to Caa3 from Caa2
-- Probability of default rating -- to Caa3 from Caa2
-- $130 million 2nd lien senior secured notes due 2013 -- to
Caa1 (LGD2, 27%) from B3 (LGD2, 24%)
-- Speculative Grade Liquidity Rating -- to SGL-4 from SGL-3
Rating outlook: negative
Ratings Rationale
The downgrades reflect Moody's belief that the company's default
risk has increased as potential covenant violations are likely in
the near term. The financial covenants under Real Mex's bond
indenture and revolving credit agreement became very onerous in
the latest reported quarter ended March 27, 2011 primarily due to
the company's deteriorating operating performance and cash flow
generation in part driven by declining guest traffic and margin
pressures. The Caa3 CFR also incorporates Real Mex's significant
leverage -- debt/EBITDA is above 7.0x -- and Moody's growing
concern on the sustainability of the company's current capital
structure and a potential need to restructure the balance sheet in
the next 6-12 months.
The negative outlook reflects the company's near-term distress
arising from the highly-levered capital structure and tight
covenants, as well as the ongoing challenges in the current
operating environment and Real Mex's limited prospects for a near-
term rebound in performance. "We expect the operating environment
will remain challenging for Real Mex both on the topline and on
the cost side, due to negative same store sales, store closure and
higher commodity costs," commented Moody's analyst John Zhao,
"Therefore, its credit metrics are expected to worsen further in
the near term."
The SGL-4 reflects the company's weak liquidity profile,
highlighted by Moody's anticipation of continued weak free cash
flow, upcoming maturity of the credit facilities in July 2012 and
very tight cushion under its financial covenants which would in
turn encumber the company access to its revolving credit facility.
Real Mex Restaurants, Inc., headquartered in Cypress, California,
is a leading Mexican-themed restaurant chain operator that owns,
operates and franchises casual dining restaurants primarily under
the El Torito, Chevys Fresh Mex and Acapulco Mexican Restaurant
concepts. Total revenues for twelve months ended March 27, 2011,
were approximately $474 million.
The principal methodology used in rating Real Mex Restaurants,
Inc., was the Global Restaurant Industry Methodology, published
July 2008. Other methodologies used include Loss Given Default for
Speculative Grade Issuers in the US, Canada, and EMEA, published
June 2009.
REDDY ICE: Incurs $39.10 Million Net Loss in March 31 Quarter
-------------------------------------------------------------
Reddy Ice Holdings, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q reporting a
net loss of $39.10 million on $40.75 million of revenue for the
three months ended March 31, 2011, compared with a net loss of
$22.59 million on $35.89 million of revenue for the same period
during the prior year.
The Company's balance sheet at March 31, 2011 showed $445.04
million in total assets, $513.35 million in total liabilities and
a $68.31 million total stockholders' deficit.
"Revenues increased over the prior year for the fourth consecutive
quarter as a result of organic growth, acquisitions, and improved
same store sales," commented Chief Executive Officer and President
Gilbert M. Cassagne. "The implementation of certain strategic
initiatives and other cost containment projects has also
contributed to improving EBITDA trends. We remain encouraged by
the sequential quarterly improvement in our business and current
results. We believe 2011 will be a turning point for our
business."
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/d2AmNB
About Reddy Ice
Reddy Ice Holdings, Inc. -- http://www.reddyice.com/--
manufactures and distributes packaged ice in the United States.
The company serves variety of customers in 31 states and the
District of Columbia under the Reddy Ice brand name.
Reddy Ice reported a net loss of $32.50 million on $315.45 million
of revenue for the year ended Dec. 31, 2010, compared with net
income of $14.30 million on $312.33 million of revenue during the
prior year.
* * *
Reddy Ice carries 'B-' issuer credit ratings, with "negative"
outlook, from Standard & Poor's.
As reported by the Troubled Company Reporter on Aug. 17, 2010,
Moody's Investors Service lowered Reddy Ice Holdings' corporate
family and probability-of-default ratings to B3 from B2, and its
$12 million senior discount notes due 2012 to Caa2 from Caa1.
Moody's also lowered the rating on Reddy Ice Corporations' $300
million first lien senior secured notes due 2015 to B2 from B1 and
the $139 million second lien notes due 2015 to Caa2 from Caa1.
The ratings outlook remains negative. The speculative grade
liquidity rating was affirmed at SGL-3.
The ratings downgrade was prompted by Reddy Ice's elevated
financial leverage through the first half of 2010 due to weaker
than expected operating performance and the expectation that
leverage will remain elevated. The B3 corporate family rating
considers ongoing operational risks related to weather as well as
increasing acquisition activity.
ROBERT PLAN: Can't Recoup Payments to Subsequent Transferee
-----------------------------------------------------------
Kenneth Kirschenbaum, as chapter 7 Trustee of the estate of The
Robert Plan of New York Corp., v. Leeds Morelli & Brown P.C. and
Nancy Isserlis, Adv. Proc. No. 810-8157 (Bankr. E.D.N.Y.), alleges
that an affiliated debtor, The Robert Plan Corporation, made two
transfers totaling $110,000 to the defendants that are avoidable
preferences. The Transfers were payments by the Debtors made
pursuant to a pre-bankruptcy settlement, and resulting judgment,
in an employment discrimination suit by Ms. Isserlis, represented
by LMB, against the Debtors. The Trustee further contends that
the Transfers are recoverable from both defendants as either
initial or subsequent transferees of the subject funds.
Prior to trial, the Trustee entered into a settlement agreement
with Ms. Isserlis pursuant to which Ms. Isserlis agreed to pay the
Trustee $70,000 in settlement of his claims against her. The
settlement subsequently was approved by the Court. The settlement
with Ms. Isserlis specifically provided that it would not affect
the Trustee's claims against LMB.
A trial was conducted on Dec. 16, 2010, against LMB only.
Resolution of the claims against LMB requires a two-step analysis
which necessarily involves a discussion of Ms. Isserlis's role in
the transactions, despite the fact that the claims against her
have been settled. First, the Trustee must prove that the
Transfers are avoidable under section 547 by proving that the
elements of section 547 have been met. Second, the Trustee must
prove that he is entitled to recover the value of those Transfers
from LMB pursuant to section 550.
In a May 5, 2011 decision, Bankruptcy Judge Robert E. Grossman
held that the Transfers, although avoidable preferences under
section 547 of the Bankruptcy Code, cannot be recovered from LMB
under section 550 because LMB was not an initial transferee of the
Transfers, but rather was a subsequent transferee who took the
transfers in good faith and for value and without knowledge of the
avoidability of the Transfers. A copy of the Court's decision is
available at http://is.gd/8mzdayfrom Leagle.com.
About Robert Plan
Headquartered in Bethpage, New York, The Robert Plan Corp. --
http://www.rpc.com/-- provided insurance services. Robert Plan
Corp. and its affiliate, Robert Plan of New York Corp., filed
voluntary Chapter 11 petitions (Bankr. E.D.N.Y. Case No. 08-74573)
on August 25, 2008, citing "serious cash flow problems" because of
Lincoln General Insurance's failure to make payments. Harold S.
Berzow, Esq., at Ruskin Moscou Faltischek, served as the Debtors'
counsel. Robert Plan disclosed total assets of $21.9 million and
total debts of $41.1 million.
On January 19, 2010, the cases were converted to Chapter 7.
Kenneth Kirschenbaum, Esq., was appointed as trustee for both
cases. By order entered on Sept. 9, 2010, the Debtors' cases were
substantively consolidated.
ROYAL HOSPITALITY: Plan Outline Hearing Continued Until May 25
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of New York
has continued until May 25, 2011, at 10:30 a.m., the hearing o
consider adequacy of the Disclosure Statement explaining Royal
Hospitality LLC's Plan of Reorganization.
The Debtor will begin soliciting votes on the Plan following
approval of the adequacy of the information in the Disclosure
Statement.
According to the Disclosure Statement, the Debtor proposes a 100%
payment to creditors. The Debtor believes that all creditors
except Ittleson Trust will support the Plan.
The Debtor believes that its revenue will exceed $2,000,000 per
year while its expenses will be approximately $1,350,000,
generating at least $650,000 per year to pay mortgage holders and
unsecured creditors.
The effective date of the Plan is expected to occur on Aug. 1,
2011.
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/RoyalHospitality_DS.pdf
The Debtor is represented by:
Richard L. Weisz, Esq.
HODGSON RUSS LLP
677 Broadway, Suite 301
Albany, NY 12207
Tel: (518) 465-2333
About Royal Hospitality LLC
Royal Hospitality LLC, dba Comfort Suites, has been operating the
Comfort Suites in Lake George, New York since May 2007. It filed
for Chapter 11 protection (Bankr. N.D.N.Y. Case No. 10-13090) on
Aug. 19, 2010. The Debtor disclosed $13,432,001 in assets and
$11,154,770 in liabilities as of the Petition Date.
RURAL DEVELOPMENTS: Case Summary & 3 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Rural Developments LLC
P.O. Box 328
Red Boiling Springs, TN 37150
Bankruptcy Case No.: 11-04628
Chapter 11 Petition Date: May 5, 2011
Court: U.S. Bankruptcy Court
Middle District of Tennessee (Cookeville)
Judge: Marian F. Harrison
Debtor's Counsel: Ben Hill Thomas, Esq.
THE LAW OFFICE OF BEN H. THOMAS
148 39Th Avenue N
Nashville, TN 37209
Tel: (615) 579-4413
E-mail: ben.t@comcast.net
Scheduled Assets: $1,237,500
Scheduled Debts: $1,371,728
A list of the Company's three largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/tnmb11-04628.pdf
The petition was signed by John N. Cook, member.
RYLAND GROUP: Posts $19.53-Mil. Net Loss in March 31 Quarter
------------------------------------------------------------
The Ryland Group, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q reporting a
net loss of $19.53 million on $174.93 million of total revenues
for the three months ended March 31, 2011, compared with a net
loss of $14.29 million on $250.76 million of total revenues for
the same period during the prior year.
The Company's balance sheet at March 31, 2011, showed
$1.61 billion in total assets, $1.08 billion in total liabilities,
and $536.64 million total equity.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/YDpoef
About Ryland Group
Headquartered in Calabasas, California, The Ryland Group, Inc.
(NYSE: RYL) -- http://www.ryland.com/-- is one of the nation's
largest homebuilders and a leading mortgage-finance company.
Since its founding in 1967, Ryland has built more than 285,000
homes and financed more than 240,000 mortgages. The Company
currently operates in 15 states and 19 homebuilding divisions
across the country and is listed on the New York Stock Exchange
under the symbol "RYL."
* * *
As reported by the Troubled Company Reporter on June 21, 2010,
Fitch Ratings has affirmed Ryland Group, Inc.'s ratings -- Issuer
Default Rating at 'BB'; and Senior unsecured debt at 'BB'. The
Rating Outlook has been revised to Stable from Negative.
Ryland Group carries Moody's "Ba3" corporate family rating, "Ba3"
probability of default rating, "Ba3" senior unsecured notes
rating, and "SGL-2" speculative grade liquidity rating. Ryland
Group carries Standard & Poor's Ratings Services' 'BB-' corporate
credit and senior unsecured note ratings.
SAINTS MEDICAL: Fitch Keeps "Rating Watch Evolving" for Bonds
-------------------------------------------------------------
As part of its continuous surveillance process, Fitch Ratings has
maintained the Rating Watch Evolving on these bonds, currently
rated 'BB+' on behalf of the Saints Medical Center (Saints):
-- $45 million Massachusetts Health and Educational Facilities
Authority revenue bonds, series 1993A.
The Rating Watch Evolving reflects a letter of intent signed by
Saints Medical Center and Steward Health Care System, LLC
(Steward) to have Saints become part of the Steward system. In
September 2010, affiliation discussions with Covenant Health
Systems (CHS; revenue bonds rated 'A' by Fitch) ceased in part,
due to the uncertainty surrounding a federal investigation for
technical violations of Stark laws. Following Saints self-report
of violations to the Centers for Medicare and Medicaid, original
liability estimates exceeded $14 million, but the final settlement
was a manageable $570,000, which Saints paid. Fitch views the
federal settlement as a significant credit positive as uncertainty
of this situation encumbered Saint's management's efforts to
pursue a merger.
Saints and Steward are currently in a period of due diligence
which is expected to end with the signing of a definitive
agreement including details on the terms of an asset purchase.
The Rating Watch Evolving indicates that the rating could be
affirmed, upgraded, or downgraded depending on the final
resolution of the acquisition terms.
General credit characteristics supporting the 'BB+' rating include
the narrowing of operating losses over the last three audited
years to a $405,000 operating loss in fiscal 2010 from a $1.5
million operating loss in fiscal 2008 and weak but consistent debt
service coverage. While liquidity dropped significantly from
fiscal 2009 (Sept. 30 year end) to fiscal 2010, Saints used cash
to fund capital and reduce its unfunded pension liability in
preparation for a merger. Fitch will continue to monitor the
situation and take rating action at the appropriate time.
Saints Medical Center operates a 163-bed acute care hospital in
Lowell, MA, located about 30 miles northwest of Boston. In fiscal
2010, total operating revenue was about $134 million.
SANTA CLARA: Reorganization Plan Declared Effective in April
------------------------------------------------------------
Santa Clara Square, LLC's plan of reorganization became effective
on April 8, 2011, according to a notice filed with the U.S.
Bankruptcy Court for the Northern District of California, San Jose
Division, prompting the Company's emergence from bankruptcy.
The deadline for filing any administrative claim, including Class
A Claims, is May 9, 2011, provided that holders of Administrative
Expense Claims that have already filed requests for payment or
proofs of claim are not required to file additional requests for
payment or proofs of claim unless additional amounts are sought by
that claimant. Objections to any such administrative claims must
be filed within 30 days of the Admin Expense Deadline.
The deadline to file with the Bankruptcy Court and serve upon the
Reorganized Debtor Claims arising from the rejection of executory
contracts and unexpired leases is May 9, 2011. Any objection to a
rejection damages claim must be filed within 30 days of the date
the rejection damages claim is filed.
The Court approved the Disclosure Statement explaining the
Debtor's Chapter 11 Plan on March 4, 2011.
About Santa Clara Square
Los Altos, California-based Santa Clara Square, LLC, filed for
Chapter 11 bankruptcy protection on December 21, 2009 (Bankr. N.D.
Calif. Case No. 09-61196). The Company estimated $10,000,001 to
$50,000,000 in assets and $10,000,001 to $50,000,000 in
liabilities.
The Debtor is represented by:
Lawrence A. Jacobson, Esq.
Sean M. Jacobson, Esq.
COHEN AND JACOBSON, LLP
900 Veterans Boulevard, Suite 600
Redwood City, California 94063
Tel: (650) 261-6280
Fax: (650) 368-6221
E-mail: laj@cohenandjacobson.com
sean@cohenandjacobson.com
SCOTT ROTHSTEIN: Stake in Nightclub Up for Sale; Bids Due May 25
----------------------------------------------------------------
The Florida Sun Sentinel reports that the U.S. Marshals Service is
selling Scott Rothstein's ownership stake in Cafe Iguana, a
Pembroke Pines, Fla., club, among the many assets the marshals
seized upon Mr. Rothstein's arrest. Mr. Rothstein has a 90% stake
in the nightclub.
According to the report, interested bidders may submit offers by
May 25, and bidders must offer at least $1.4 million. The report
says proceeds of the sale will be added to the pool of forfeiture
proceeds that will be used to compensate the victims of Mr.
Rothstein's fraud.
About Rothstein Rosenfeldt
Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler
PA -- http://www.rra-law.com/-- has been suspected of running a
$1.2 billion Ponzi scheme. U.S. authorities claimed in a civil
forfeiture lawsuit filed November 9, 2009, that Mr. Rothstein, the
firm's former chief executive officer, sold investments in non-
existent legal settlements. Mr. Rothstein pleaded guilty to five
counts of conspiracy and wire fraud on January 27, 2010.
Creditors of Rothstein Rosenfeldt Adler signed a petition sending
the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No.
09-34791). The petitioners include Bonnie Barnett, who says she
lost $500,000 in legal settlement investments; Aran Development,
Inc., which said it lost $345,000 in investments; and trade
creditor Universal Legal, identified as a recruitment firm, which
said it is owed $7,800. The creditors alleged being owed money
invested in lawsuit settlements.
Herbert M. Stettin, the state-court appointed receiver for
Rothstein Rosenfeldt, was officially carried over as the
Chapter 11 trustee in the involuntary bankruptcy case.
On June 10, 2010, Mr. Rothstein was sentenced to 50 years in
prison.
SEMGROUP LP: Samson v. Valero Referred to New Mexico Bankr. Court
-----------------------------------------------------------------
District Judge James O. Browning ruled that bankruptcy
jurisdiction exists to hear the lawsuit, Samson Resources Company
v. Valero Marketing and Supply Company, and referred the
consolidated cases to the United States Bankruptcy Court for the
District of New Mexico for adjudication.
On July 22, 2008, SemGroup, L.P., and its affiliates, including
SemCrude, L.P., and Eaglwing, L.P., filed for bankruptcy. Plains
Marketing has filed multiple proofs of claims against the SemGroup
Debtors, arising from the parties' contractual arrangements for
the purchase and sale of oil and gas. In addition, Plains
Marketing commenced an adversary proceeding in the Delaware
Bankruptcy Court seeking to tender approximately $2.5 million to
the Debtors, in full satisfaction of its obligations to them. On
Oct. 5, 2009, the Delaware Bankruptcy Court entered an agreed
order for Plains Marketing to tender $2.5 million to the Debtors
subject to certain conditions and limitations, including a
reservation of rights with respect to Samson's claims against
Plains Marketing. The Tendered Funds are being held in a
segregated account pending the outcome of Plains Marketing's
claims against the Debtors.
Samson commenced the combined cases in the Fifth Judicial District
for the State of New Mexico on July 21, 2009. The first case was
filed in New Mexico State District Court for Chaves County and
relates to oil and gas produced from wells located in Chaves
County. The second case was filed in the New Mexico State
District Court for Lea County and relates to oil and gas produced
from wells located in Lea County. Samson seeks declarations that
Plains Marketing is a first purchaser from Samson, that the crude
oil Samson sold to Plains Marketing and the resulting proceeds are
encumbered with statutory purchase-money security interests and
liens, or held in constructive/resulting trust for the benefit of
Samson under New Mexico state law, an accounting, surrender of the
crude oil and proceeds, and a lien foreclose. All of the claims
asserted in these cases, which relate solely to the production
from these two New Mexico counties, are based upon New Mexico law,
including claims pursuant to the Oil and Gas Products Lien Act,
N.M.S.A. 1978, Sections 48-9-1 through 48-9-8.
The cases were removed to the District Court pursuant to 28 U.S.C.
Sections 1334(b), 1446, and 1452(a) on Sept. 9, 2009. On Oct. 28,
2009, the Delaware Bankruptcy Court confirmed SemGroup, L.P., and
its affiliates' joint plan of reorganization. The order
confirming the plan provided that Plains Marketing could continue
to assert its claims, if any, against the Debtors, including
against the Tendered Funds, subject to all available defenses and
objections.
A copy of the District Court's May 6, 2011 Memorandum Opinion and
Order is available at http://is.gd/gLrQ1Zfrom Leagle.com.
The case is captioned, SAMSON RESOURCES COMPANY; SAMSON LONE STAR,
LLC; and SAMSON CONTOUR ENERGY E&P, LLC, Plaintiffs, v. VALERO
MARKETING AND SUPPLY COMPANY; NCRA/NATIONAL COOPERATIVE REFINERY
ASSOCIATION; HUSKY MARKETING AND SUPPLY COMPANY; CHEVRON TEXACO
LP; TEPPCO CRUDE GP, LLC; CIMARRON TRANSMISSION COMPANY;
INTERSTATE PETROLEUM CORPORATION; MERRILL LYNCH, PIERCE, FENNER &
SMITH, INCORPORATED; OCCIDENTAL ENERGY MARKETING, INC.; OASIS
TRANSPORTATION AND MARKETING CORPORATION; PLAINS MARKETING GP,
INC.; PLAINS MARKETING, L.P.; SHELL OIL COMPANY; BP OIL SUPPLY
COMPANY; J. ARON & COMPANY; SUNOCO LOGISTICS PARTNERS, LP;
CONOCOPHILLIPS COMPANY; and COFFEYVILLE RESOURCE REFINING &
MARKETING, LLC, Defendants, No. CIV 09-0863 JB/LAM, consolidated
with No. CIV 09-0865 JB/KBM (D. N.M.).
About SemGroup L.P.
SemGroup, L.P. -- http://www.semgrouplp.com/-- is a midstream
service company that provides diversified services for end users
and consumers of crude oil, natural gas, natural gas liquids and
refined products. Services include purchasing, selling,
processing, transporting, terminalling and storing energy.
SemGroup serves customers in the United States, Canada, Mexico and
Wales.
SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection (Bankr. D. Del. Case No. 08-11525) on July 22, 2008.
John H. Knight, Esq., L. Katherine Good, Esq. and Mark
D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller,
Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil,
Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A.
Mayer, Esq., at Weil Gotshal & Manges LLP, represented the Debtors
in their restructuring efforts. Kurtzman Carson Consultants
L.L.C. served as the Debtors' claims agent. The Blackstone Group
L.P. and A.P. Services LLC acted as the Debtors' financial
advisors.
Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represented the Debtors' prepetition
lenders.
SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act.
SemGroup LP's consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts.
SemGroup LP won confirmation from the Bankruptcy Court of its
Fourth Amended Plan of Reorganization on Oct. 28, 2008. The Plan,
which distributed more than $2.5 billion in value to stakeholders,
was declared effective on Nov. 30, 2008.
SEVEN SEAS: S&P Puts 'B-' Issue-Level Rating on $200MM Sr. Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its issue-level
rating of 'B-' (one notch lower than the 'B' corporate credit
rating on the company) to Seven Seas Cruises S. DE R.L.'s proposed
$200 million senior secured second-lien notes due 2019. "We also
assigned this debt a recovery rating of '5', indicating our
expectation of modest (10% to 30%) recovery for lenders in the
event of a payment default," S&P related.
"The company intends to use proceeds to refinance Seven Seas
Cruises' existing $139 million second-lien term loan, to repay $25
million of the existing first-lien term loan (which we do not
rate), and to bolster cash balances," S&P continued.
All other ratings, including the 'B' corporate credit rating,
remain unchanged. The outlook is stable.
"The 'B' rating reflects Seven Seas' vulnerability within the
cruise sector because of its small fleet and niche market strategy
and limited cash flow diversity, with three vessels driving the
bulk of cash flow generation," said Standard & Poor's credit
analyst Emile Courtney. Other factors include high debt leverage,
the capital-intensive nature of the cruise industry, and the
travel industry's susceptibility to economic cycles and global
political events. The high quality of Seven Seas' Regent branded
vessels, our favorable view of the niche segment in which the
company operates, and the company's good visibility into future
bookings serve as partial offsets to the negative rating factors.
The corporate credit rating incorporates a view of a consolidated
enterprise, including both Seven Seas and Oceania Cruises Inc. as
wholly owned subsidiaries of Prestige Cruise Holdings Inc., a
corporation controlled by Apollo Management L.P. "Although
management's intention is to maintain Regent (Seven Seas' brand)
and Oceania as two independent brands and they are financed
separately, we believe the strategic relationship between the
entities within the context of Apollo's investment in the high-end
cruise line niche warrants our taking a holistic view of the
family of companies. In addition, Prestige guarantees the bank
debt of Seven Seas and Oceania, further aligning the credit
quality of Seven Seas with Oceania," S&P added.
SHAHRIAR BOZORGZADEH: Court Warns on "Injudicious" Use of FedEx
---------------------------------------------------------------
Bankruptcy Judge Laura K. Grandy cautioned the law firm of
SmithAmundsen LLC about the "injudicious" use of Federal Express.
SmithAmundsen is seeking payment for legal services as counsel to
debtors Herrin Clinic Ltd., and Shahriar S. Bozorgzadeh and Kelly
L. Evans.
The Court, however, held that it does not find a need, at this
time, to reduce the amount of out-of-pocket expenses for FedEx
charges for which SmithAmundsen may be reimbursed. In addition,
the Court holds that counsel's time spent in travel should be
compensated at counsel's full hourly rate.
In the Herrin case, William S. Hackney, Esq., and SmithAmundsen is
seeking interim compensation of $77,377.50 and expenses of
$5,765.66. In the individual debtors' case, SmithAmundsen is
seeking interim compensation of $71,051.50 and expenses of
$5,792.40. The amounts sought have been challenged by the United
States Trustee and by Herrin Security Bank pursuant to 11 U.S.C.
Sec. 330(a)(1) on the basis that some of the fees and expenses are
not reasonable in amount, are duplicative between the two
bankruptcy estates, or have not benefited the bankruptcy estates.
After conducting a thorough examination of the applications, the
objections and the bankruptcy case records of both cases, the
Court held that the attorney fees and expenses should be reduced.
A copy of Judge Grandy's May 6, 2011 Opinion is available at
http://is.gd/N8h4Ksfrom Leagle.com.
The small business Chapter 11 cases of Herrin Clinic Ltd., and
Shahriar S. Bozorgzadeh and Kelly L. Evans (Bankr. S.D. Ill. Case
Nos. 10-40189 and 10-40190) were filed on Feb. 11, 2010, primarily
as the result of a $920,403.26 state court judgment entered in
favor of Javier Muniz and against the debtors and Herrin Medical
Clinic, Ltd., a dissolved medical practice in which the individual
debtors and Muniz had practiced together at one time. Herrin and
the individual debtors have appealed the judgment issued in the
state court. With the result of the pending appeal having a
determinative impact on the formulation of a plan of
reorganization, Herrin and the individual debtors have obtained
two extensions of time, until after the appellate mandate issues,
to file a disclosure statement and plan of reorganization and to
confirm a plan of reorganization. Since the cases were filed in
early 2010, there has been little activity that was significant or
contested. As a result, the cases are best characterized as
placeholders, offering chapter 11 protections to Herrin and the
individual debtors while they await the decision of the appellate
court.
SHOPS AT PRESTONWOOD: Files List of 20 Largest Unsecured Claims
---------------------------------------------------------------
The Shops at Prestonwood, LP has filed its list of creditors
holding 20 largest unsecured claims.
The list only contains two entries:
Creditor Claim Amount
-------- ------------
Holigan Investment Group Ltd. $3,500,000
4560 Beltline Rd., Suite 350
Addison, TX 75001
North Texas Lawn & Landscape $76,842
Attn: Michelle Lee
2055 Williams Street
Rockwall, TX
About The Shops at Prestonwood
Addison, Texas-based The Shops at Prestonwood, LP's primary assets
consist of approximately 144 residential townhome lots and an
additional 17.170 acres of residential undeveloped land located
within the Shops at Prestonwood subdivision in Denton County,
Texas.
The Debtor filed for Chapter 11 bankruptcy protection (Bankr. N.D.
Tex. Case No. 11-32209) on April 1, 2011. Melissa S. Hayward,
Esq., at Franklin Skierski Lovall Hayward LLP, serves as the
Debtor's bankruptcy counsel. The Debtor estimated its assets and
debts at $10 million to $50 million.
SHOPS AT PRESTONWOOD: Files Schedules of Assets & Liabilities
-------------------------------------------------------------
The Shops at Prestonwood, LP filed with the U.S. Bankruptcy Court
for the Northern District of Texas, its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ------ -----------
A. Real Property $18,200,000
B. Personal Property $0
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $10,574,397
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $3,576,842
----------- -----------
TOTAL $18,200,000 $14,151,239
About The Shops at Prestonwood
Addison, Texas-based The Shops at Prestonwood, LP's primary assets
consist of approximately 144 residential townhome lots and an
additional 17.170 acres of residential undeveloped land located
within the Shops at Prestonwood subdivision in Denton County,
Texas.
The Debtor filed for Chapter 11 bankruptcy protection (Bankr. N.D.
Tex. Case No. 11-32209) on April 1, 2011. Melissa S. Hayward,
Esq., at Franklin Skierski Lovall Hayward LLP, serves as the
Debtor's bankruptcy counsel. The Debtor estimated its assets and
debts at $10 million to $50 million.
SII LIQUIDATION: Court Overrules Objection to American Sand Claim
-----------------------------------------------------------------
Bankruptcy Judge Russ Kendig overruled the objection by John B.
Pidcock, trustee of the Medina Supply Company and its affiliated
debtors' creditor trust, to the claim filed by American Sand and
Gravel, a Division of Kenmore Construction Co., Inc.
The Creditor Trustee objects to the claim as untimely. American
Sand wants the Court to allow the late filing under an excusable
neglect theory pursuant to Federal Rule of Bankruptcy Procedure
9006(b). Countering, the Creditor Trustee argues that the late
filing does not meet the excusable neglect standard of Rule
9006(b).
In his May 6, 2011 order, Judge Kendig held that cause exists to
allow the request for payment. American Sand successfully
demonstrates a lack of prejudice and cognizable harm to Debtors
and an explanation for the delay. A copy of the Court's ruling is
available at http://is.gd/PR64kSfrom Leagle.com.
The case is In re: SII Liquidation Company, Chapter 11, (Bankr.
N.D. Ohio Case No. 10-60702).
SINCLAIR BROADCAST: Files Form 10-Q; Posts $15.12MM Income in Q1
----------------------------------------------------------------
Sinclair Broadcast Group, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q reporting
net income of $15.12 million on $179.48 million of total revenues
for the three months ended March 31, 2011, compared with net
income of $10.99 million on $167.46 million of total revenues for
the same period during the prior year.
The Company's balance sheet at March 31, 2011, showed $1.57
billion in total assets, $1.71 billion in total liabilities and a
$144.58 million total deficit.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/wtYt14
About Sinclair Broadcast
Based in Baltimore, Maryland, Sinclair Broadcast Group, Inc.
(Nasdaq: SBGI) -- http://www.sbgi.net/-- one of the largest and
most diversified television broadcasting companies, currently owns
and operates, programs or provides sales services to 58 television
stations in 35 markets. The Company's television group reaches
roughly 22% of U.S. television households and includes FOX,
ABC, CBS, NBC, MNT, and CW affiliates.
* * *
As reported by the TCR on Feb. 24, 2011, Standard & Poor's Ratings
Services raised its corporate credit rating on Hunt Valley, Md.-
based TV broadcaster Sinclair Broadcast Group Inc. to 'BB-' from
'B+'. The rating outlook is stable. "The 'BB-' rating on
Sinclair reflects S&P's expectation that the company could keep
its lease-adjusted debt to EBITDA below historical levels
throughout the election cycle, absent a reversal of economic
growth, meaningful debt-financed acquisitions, or significant
shareholder-favoring measures," explained Standard & Poor's credit
analyst Deborah Kinzer.
Moody's raised its ratings for Sinclair Broadcast Group, Inc., and
subsidiary Sinclair Television Group, Inc., including the
Corporate Family Rating and Probability-of-Default Rating, each to
Ba3 from B1, and the ratings for individual debt instruments,
concluding its review for possible upgrade as initiated on
Aug. 5, 2010. Moody's also assigned a B2 (LGD 5, 87%) rating to
the proposed $250 million issuance of Senior Unsecured Notes due
2018 by STG. The Speculative Grade Liquidity Rating remains
unchanged at SGL-2. The rating outlook is now stable.
As reported by the Troubled Company Reporter on Feb. 24, 2011,
Standard & Poor's Ratings Services raised its corporate credit
rating on Hunt Valley, Md.-based TV broadcaster Sinclair Broadcast
Group Inc. to 'BB-' from 'B+'. The rating outlook is stable.
"The 'BB-' rating on Sinclair reflects S&P's expectation that the
company could keep its lease-adjusted debt to EBITDA below
historical levels throughout the election cycle, absent a reversal
of economic growth, meaningful debt-financed acquisitions, or
significant shareholder-favoring measures," explained Standard &
Poor's credit analyst Deborah Kinzer.
SONRISA REALTY: Court Directs Auction on May 19
-----------------------------------------------
Bankruptcy Judge Letitia Z. Paul granted Compass Bank's request to
fast-track the sale of Sonrisa Realty Partners Ltd.'s property.
Judge Paul held that Compass Bank has articulated a sound business
justification for the auction to take place May 19, 2011.
On the petition date, the Debtor owned roughly 97.5 acres of
undeveloped real property near the intersection of Interstate
Highway 45 and Farm to Market Road 646 in Galveston County, Texas.
Compass Bank filed a proof of claim for $8,664,457.42, secured by,
inter alia, the real property owned by the Debtor. By orders
entered on April 1, 2010 and June 29, 2010, the Court authorized
the sale of 2.4625 acres of the Debtor's real property. From one
of the two sales, $250,000 was paid to Compass Bank, to be applied
as a principal reduction to the Debtor's debt to Compass Bank.
On October 20, 2010, Compass Bank filed a plan for the Debtor.
Compass Bank filed an amended plan on February 21, 2011. Compass
Bank's amended plan was confirmed on February 28, 2011. The Debtor
moved for reconsideration of the judgment confirming Compass
Bank's plan. That motion was denied, by order entered March 11,
2011. Confirmation of the plan was not appealed.
The Debtor had previously proposed a plan calling for a sale of up
to 35 acres of the property to Tanger Devco, LLC. Under the sale
proposed by the Debtor, Tanger would have obtained an exclusive
option to purchase the property for one year, for $250,000 per
acre, in exchange for a $100 option fee.
Compass Bank's confirmed plan calls for a sale, at an auction to
be held within 120 days of the effective date, of the Debtor's
real property. The effective date of the Compass plan occurred on
March 14, 2011.
In its motion, Compass Bank seeks approval of bidding procedures,
addressing an auction to take place on May 19, 2011. The Debtor
opposes the motion, on grounds an auction on May 19 affords
insufficient time to allow interested bidders to perform due
diligence with respect to the property, and thus would reduce the
number of potential bidders and the final auction price.
A copy of Judge Paul's May 6, 2011 Memorandum Opinion is available
at http://is.gd/jRK2fcfrom Leagle.com.
About Sonrisa Properties
Sonrisa Properties, Ltd., and Sonrisa Realty Partners, Ltd., each
of which is a single asset real estate entity, own unimproved real
property located in League City, Texas. Sonrisa Properties filed
for Chapter 11 bankruptcy protection on Jan. 4, 2010 (Bankr. S.D.
Tex. Case No. 10-80012), to stop Compass Bank, the largest secured
creditor, from foreclosing on the property. Sonrisa Realty
Partners also filed for Chapter 11 protection (Bankr. S.D. Tex.
Case No. 10-30084) on the same day. The two cases are not jointly
administered. Karen R. Emmott, Esq., in Houston, Texas,
represents both Debtors. Sonrisa Properties disclosed $21,098,818
in assets and $8,420,540 in liabilities as of the Petition Date.
Sonrisa Realty Partners estimated $10 million to $50 million in
assets and $1 million to $10 million in liabilities. In February
2010, the Sonrisa Realty Partners case was transferred to the
Galveston Division (Bankr. S.D. Tex. Case No. 10-80026).
Sonrisa Realty Partners and Sonrisa Properties were co-makers on a
note payable to Compass Bank's predecessor, Texas State Bank,
secured by the real property owned by Sonrisa Realty Partners, and
contiguous undeveloped real property owned by Sonrisa Properites.
Sonrisa Properties' Chapter 11 case was dismissed on its own
motion, by order entered on April 20, 2011.
SPANSION INC: Claims Agent Inks $8-Million Settlement With TSMC
---------------------------------------------------------------
Ian Thoms at at Bankruptcy Law360 reports that the claims agent
for the reorganized debtors in the Spansion LLC bankruptcy on
Friday struck an $8 million settlement to end an adversary case in
Delaware from Taiwan Semiconductor Manufacturing Co. Ltd.
TSMC claimed Spansion owed it more than $16 million for wafers -
slices of semiconductor material - and other items sent to the
flash memory chip maker prior to its filing for bankruptcy
protection, the claims agent said in a motion, according to
Law360.
About Spansion Inc.
Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- is a
Flash memory solutions provider, dedicated to enabling, storing
and protecting digital content in wireless, automotive,
networking and consumer electronics applications. Spansion,
previously a joint venture of AMD and Fujitsu, is the largest
company in the world dedicated exclusively to designing,
developing, manufacturing, marketing, selling and licensing Flash
memory solutions.
Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion
International, Inc., and Cerium Laboratories LLC filed voluntary
petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead
Case No. 09-10690). On Feb. 9, 2009, Spansion's Japanese
subsidiary, Spansion Japan Ltd., voluntarily entered into a
proceeding under the Corporate Reorganization Law (Kaisha Kosei
Ho) of Japan to obtain protection from its creditors as part of
the company's restructuring efforts. None of Spansion's
subsidiaries in countries other than the United States and Japan
are included in the U.S. or Japan filings. Michael S. Lurey,
Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at
Latham & Watkins LLP, have been tapped as bankruptcy counsel.
Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware
counsel. Epiq Bankruptcy Solutions LLC, is the claims agent.
The United States Trustee has appointed an official committee of
unsecured creditors in the case. As of Sept. 30, 2008,
Spansion disclosed total assets of US$3,840,000,000, and total
debts of US$2,398,000,000.
Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009
(Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's
counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said
that Spansion Japan had US$10 million to US$50 million in assets
and US$50 million to US$100 million in debts.
Spansion submitted its first plan of reorganization on Oct. 26,
2009, and gained approval from the U.S. Bankruptcy Court on its
amended disclosure statement on Dec. 22, 2009. Spansion
received confirmation from the U.S. Bankruptcy Court for its plan
on April 16, 2010, and emerged from Chapter 11 protection May 10,
2010.
Spansion entered Chapter 11 reorganization with more than
$1.5 billion in debt. Spansion emerged a well-capitalized company
with less than $480 million in debt and roughly $230 million in
cash, which is supplemented with an undrawn credit line of up to
$65 million.
SPANSION INC: S&P Raises CCR to 'BB-' on Revenue Growth
-------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Sunnyvale, Calif.-based memory supplier Spansion Inc. to
'BB-' from 'B'. The outlook is stable.
"At the same time, we raised our issue-level rating on subsidiary
Spansion LLC's outstanding $250 million first-lien senior secured
term loan to 'BB+' (two notches higher than the corporate credit
rating) from 'BB-'. The recovery rating remains '1', indicating
our expectation of very high (90%-100%) recovery for lenders in
the event of a payment default," S&P related.
S&P continued, "In addition we raised our issue-level rating on
Spansion Inc.'s $200 million in senior unsecured notes to 'BB-'
(the same as the corporate credit rating) from 'B'. The recovery
rating remains '3', indicating our expectation of meaningful (50%-
70%) recovery for lenders in the event of a payment default."
"At the same time, we removed all the ratings from CreditWatch,
where they were placed with positive implications on March 21,
2011," S&P said.
"We expect Spansion's adjusted trailing leverage to remain in the
2x area over the next few quarters," said Standard & Poor's credit
analyst Joseph Spence, "reflecting growth in revenues as well as
relatively stable memory pricing and margins." "In addition, we
expect Spansion's commitment to a less capital-intensive fab-lite
strategy, continued de-emphasis on wireless products, and the
completion of essentially all of its bankruptcy-related
payments to propel positive free operating cash flows in 2011 from
effectively negative in 2010."
ST. JOSEPH HEALTH: Fitch Cuts Ratings on Bonds to 'B'
-----------------------------------------------------
As part of its ongoing surveillance review process, Fitch Ratings
has downgraded these bonds issued by the Rhode Island Health and
Educational Building Corporation, on behalf of St. Joseph Health
Services of Rhode Island (SJHS) to 'B' from 'BB-'.
-- $18.8 million series 1999.
The Rating Outlook is Stable.
Rating Rationale:
-- The downgrade reflects a decline in SJHS' financial
performance since Fitch's 2009 review characterized by
continued operating losses, very weak liquidity, material
declines in patient volumes, and poor debt service coverage.
-- After losing $19.9 million in fiscal 2010 (negative 12.4%
operating margin), losses have been reduced but are still
negative at $1.7 million (negative 2.6% operating margin)
through five-months, Feb. 28, 2011 (unaudited).
-- At Sept. 30, 2010 (audited year-end) SJHS' liquidity
($6.4 million in unrestricted cash and investments) reached
critically low levels with days cash on hand (DCOH) of just
14.3, a 2.2 times (x) cushion ratio, and 35.4% cash to debt.
Interim figures show a strengthening of liquidity but
figures remain at low levels.
-- SJHS had a rate covenant violation in fiscal 2010 and
maximum annual debt service (MADS) coverage remains weak at
1x through the five month interim period.
-- Inpatient admissions have declined 18% since fiscal 2008
falling to 8,541 in 2010 from 10,426. Further, outpatient
surgeries demonstrated a similar trend decreasing to 11,724
in 2010 from 13,316 in 2008.
-- SJHS has a relatively light debt burden as MADS
($2.8 million) represented 1.8% of total revenues in 2010.
Key Rating Drivers:
-- SJHS' January 2010 affiliation with Roger Williams Medical
Center (RWMC) to form CharterCare Health Partners
(CharterCare) continues to yield benefits around
consolidated clinical and administrative services, expense
savings and revenue cycle initiatives.
-- Expectation that interim financial position will be
sustained and improved. Deterioration in financial
profile and volumes could lead to further rating pressure.
Security:
The bonds are secured by a pledge of SJHS gross receipts and real
estate.
Credit Summary:
Located in Rhode Island, SJHS consists of 359-bed Our Lady
of Fatima Hospital in North Providence. In 2010, SJHS had
$161.6 million in total revenue.
The rating downgrade to 'B' reflects SJHS' weakened financial
position since Fitch's last review in 2009. Specifically, SJHS
recorded a negative 12.4% operating margin and negative 7.9%
operating EBITDA margin in fiscal 2010. The operating loss was due
to continued volume losses, a handful of one-time expense items (a
$3.5 million receivable write down, $4.9 million malpractice
reserve adjustment, and $1.2 million in severance payments), and
additional expense items that came in above budget. In total, SJHS
lost $19.9 million in fiscal 2010 and violated its debt service
coverage covenant. However, management has implemented an action
plan, which includes several revenue cycle initiatives and
numerous expense reduction programs. As of Feb. 28, 2011, SJHS
lost $1.7 million from operations (negative 2.6% operating margin
and 1.8% operating EBITDA margin), which is improved from fiscal
2010, but nonetheless weak.
Additional negative credit factors include SJHS' balance sheet,
debt service coverage, volume trends, and ability to fund future
capital expenditures. SJHS has a weak balance sheet that had 14.3
DCOH, 2.2x cushion ratio, and 35.4% cash to debt in fiscal 2010.
However, through February 2011, liquidity indicators improved
slightly to 22.8 days, 3.2x, and 53.2% cash to debt. After
violating its debt service coverage covenant in 2010, SJHS had
MADS coverage 1x through the February 2011 interim period. Over
the past four fiscal years, debt service coverage has averaged a
negative 0.3x, which is low in comparison against Fitch's other
rated nonprofit healthcare borrowers. In fiscal 2010, SJHS spent
$2.7 million on capital, which equated to 45% of depreciation and
was unfavorable compared against the median of 66.2%.
On Jan. 4, 2010, SJHS signed an affiliation agreement with RWMC
and formed CharterCare. Operating with a new management team,
Fitch views SJHS' affiliation as a credit positive. Although the
affiliation is not a full merger and SJHS maintains its own debt,
management has identified approximately $28 million in savings
from the new organization that is benefiting SJHS. Benefits from
the affiliation have already been realized through the
streamlining of services and administrative functions. Over the
medium term, management anticipates further savings to come from
additional consolidation of services, expense efficiencies, and
benefits stemming from new information technology systems.
Additionally, there are other potential strategic benefits that
could improve the revenue for both organizations.
Other credit strengths include SJHS' manageable debt burden as
reflected in MADS as a percentage of revenue of 1.8% in fiscal
2010 and its conservative debt structure with all fixed rate debt.
The Stable Rating Outlook reflects Fitch's expectation that SJHS
will benefit from its organizational changes and maintain a
financial profile adequate for the current rating level. Negative
rating pressure may be warranted if losses increase again or
balance sheet metrics decline further. Management has a breakeven
goal for operations in fiscal 2012, which would be a major
milestone, and anticipates annual capital expenditures to range
from $5 million to $7 million.
Disclosure: SJHS covenants only to disclose annual audited
financial information to EMMA, which Fitch views as a weak legal
covenant.
STILLWATER MINING: Seven Directors Elected at Annual Meeting
------------------------------------------------------------
The Annual Meeting of Stockholders of Stillwater Mining Company
was held on May 3, 2011. Seven directors were elected at the
Annual Meeting, namely: Craig L. Fuller, Patrick M. James, Steven
S. Lucas, Francis R. McAllister, Michael S. Parrett, Sheryl K.
Pressler, and Michael Schiavone.
Stockholders approved the appointment of KPMG LLP as the Company's
independent public accounting firm for the fiscal year ending
Dec. 31, 2011.
Majority of the Stockholders favored a one year advisory vote on
the approval of executive compensation.
Stockholders rejected the proposal to approve changes to the
Certificate of Incorporation.
About Stillwater Mining
Billings, Montana-based Stillwater Mining Company --
http://www.stillwatermining.com/-- is the only U.S. producer of
palladium and platinum and is the largest primary producer of
platinum group metals outside of South Africa and Russia. The
Company's shares are traded on the New York Stock Exchange under
the symbol "SWC."
The Company's balance sheet at Dec. 31, 2010 showed
$909.47 million in total assets, $326.40 million in total
liabilities and $583.07 million in total stockholders' equity.
Stillwater carries 'Caa1' corporate family and probability of
default ratings, with 'stable' outlook, from Moody's Investors
Service. It has 'B' issuer credit ratings from Standard & Poor's.
SUGARLEAF TIMBER: Case Summary & 8 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Sugarleaf Timber, LLC
3832-10 Baymeadows Road, Suite 353
Jacksonville, FL 32217
Bankruptcy Case No.: 11-03352
Chapter 11 Petition Date: May 8, 2011
Court: U.S. Bankruptcy Court
Middle District of Florida (Jacksonville)
Debtor's Counsel: Robert D. Wilcox, Esq.
BRENNAN, MANNA & DIAMOND, PL
800 W. Monroe Street
Jacksonville, FL 32202
Tel: (904) 366-1500
Fax: (904) 366-1501
E-mail: rdwilcox@bmdpl.com
Scheduled Assets: $31,016,486
Scheduled Debts: $26,781,079
The petition was signed by Victoria D. Towers, manager of
Diversified Investments of Jacksonville LLC, manager.
Debtor's List of eight Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Smith Hulsey & Busey Legal Fees $20,008
P.O. Box 53315
Jacksonville, FL 32201-3315
Cornelius Schou Leone & Matteson Accounting/ $15,000
4496 Southside Boulevard Consulting
Jacksonville, FL 32216
RAM & Associates, Inc. Surveying Services $13,660
6701 Beach Boulevard
Jacksonville, FL 32216
Pappas Metcalf Jenks & Miller Legal Fees $8,021
Young Van Assenderp PA Legal Fees $4,029
EC&D - Carl Salafrio Consulting Services $3,313
Wendell W Wheeler, CPA Accounting Services $2,483
Stoneburner, Berry Glockner Accounting/ $335
Purcell & Greenhut, PA Consulting
SUNSET VILLAGE: Hearing on Cash Collateral Use Set for May 25
-------------------------------------------------------------
The hearing on the request of Sunset Village Limited Partnership
will be continued to May 25, 2011, at 10:00 a.m.
As previously reported by The Troubled Company Reported on April
20, 2011, Sunset Village won interim approval from the U.S.
Bankruptcy Court for the Northern District of Illinois to use the
cash collateral for the period April 1 to 30, 2011.
As adequate protection, Jefferson-Pilot Investments, Inc. is
granted a lien against all properties owned and will be owned by
Sunset Village as well as its rights to those properties.
Jefferson-Pilot is also granted superpriority administrative
expense claim, and replacement liens in Sunset Village's post-
petition assets.
The court order does not authorize Sunset Village to pay the
management fees to Capital First Realty or any other entity during
the period without the Court's approval.
About Sunset Village
Chicago, Illinois-based Sunset Village Limited Partnership is a
limited partnership that owns a manufactured home community,
consisting of approximately 404 sites, situated on approximately
30.0 acres located at 2450 Waukegan Road, Glenview, Illinois. It
filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Case
No. 10-45772) on Oct. 13, 2010. Eugene Crane, Esq., at
Crane Heyman Simon Welch & Clar, assists Sunset Village in its
restructuring effort. Sunset Village estimated its assets and
debts at $10 million to $50 million.
SUNSET VILLAGE: Has Until June 30 to Solicit Acceptances of Plan
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, gave Sunset Village Limited Partnership until
June 30, 2011 to solicit acceptances of its plan of
reorganization.
About Sunset Village
Chicago, Illinois-based Sunset Village Limited Partnership is a
limited partnership that owns a manufactured home community,
consisting of approximately 404 sites, situated on approximately
30.0 acres located at 2450 Waukegan Road, Glenview, Illinois. It
filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Case
No. 10-45772) on Oct. 13, 2010. Eugene Crane, Esq., at
Crane Heyman Simon Welch & Clar, assists Sunset Village in its
restructuring effort. Sunset Village estimated its assets and
debts at $10 million to $50 million.
SURF CITY: Lender Fails in Bid to Dismiss Chapter 11 Case
---------------------------------------------------------
Bankruptcy Judge Randy D. Doub rejected the request of Wells Fargo
Bank, National Association, successor by merger to Wachovia Bank,
National Association, for dismissal of the Chapter 11 bankruptcy
case filed by Surf City Investments, LLC. The Court said the
bankruptcy petition was properly authorized and subsequently
ratified by the members of the Debtor. Moreover, the Court held
that Wells Fargo failed to carry its burden of demonstrating
either objective futility or subjective bad faith.
According to Judge Doub, testimony indicated that revenues were
not enough to cover expenses. However such is true for many
Chapter 11 debtors at the outset of a case. These findings do not
rise to the level of objective futility at the outset of this
case. Additionally, the Debtor has conceded that it will comply
with the single asset real estate provisions of Sec. 362.
On Feb. 24, 2011, three legal entities converted and merged,
resulting in the formation of the Debtor: (1) Surf City
Investments, Inc. -- SCI -- a North Carolina corporation, (2)
Yow's Motel Investment, LLC -- YMI -- a North Carolina limited
liability company; and (3) Beach House Marina, LLC -- BHM -- a
North Carolina limited liability company. The Debtor purports to
be a member-managed limited liability company and has three
members identified in its Articles of Organization: Lionel Mark
Yow, who owns 50% of the Debtor, Lionel Leon Yow, who owns 15% of
the Debtor; and Jennifer Leech, who owns 35% of the Debtor. The
Debtor is engaged in the business of developing real property in
Pender County, North Carolina and owns a motel and marina
property.
On the same day as its formation, the Debtor filed for relief
under Chapter 11 of the Bankruptcy Code. Douglas Leech signed the
bankruptcy petition as a member manager of the Debtor.
Wells Fargo holds a promissory note, executed by SCI, YMI and BHM
as co-borrowers, in the principal amount of $9,000,000. The
promissory note is secured by certain real property and other
rights as described in a deeds of trusts. Two modifications to
the promissory note modified the interest rate, allowed for
partial release of real property collateral and required the
guarantors to reaffirm their guaranties of the note.
The three entities defaulted under the terms of the note by
failing to submit timely payments. Wells Fargo filed litigation
against the three entities to collect amounts due under the note
and initiated foreclosure proceedings. Multiple foreclosure sales
were scheduled for Feb. 25, 2011. As of the petition date, the
Debtor owed Wells Fargo the principal amount of $4,350,352.32,
accrued interest of $165,241.89, and late charges of $5,433.25,
plus fees, costs and expenses.
In its schedules, the Debtor listed real estate assets consisting
of 4.83 acres in Surf City, North Carolina; 2.44 acres and .43
acres known as Tract 3, Map Bk 45, Pg 1, Pender County Registry;
93 dry stack boat slips and Oceanfront Hotel located in Surf City,
North Carolina. Together, the properties were listed on Schedule
A with a current market value of $6,299,643.00. The debt to Wells
Fargo is listed in the amount of $4,332,589.50. The Debtor also
listed a secured debt owed to Mr. Leech for $42,039.00 which is
secured by a second deed of trust on the Oceanfront Hotel located
in Surf City, North Carolina. The Oceanfront Hotel has an alleged
market value of $253,249.00.
Wells Fargo possesses a first lien priority on all real estate
assets.
The Debtor contends there is equity in the collateral held by
Wells Fargo and Wells Fargo believes it is a marginally
oversecured creditor pursuant to 11 U.S.C. Sec. 506.
A copy of Judge Doub's May 6, 2011 Order is available at
http://is.gd/Q7TI69from Leagle.com.
Surf City Investments, formerly doing business as Yow Motel
Investments, LLC, Beach House Marina, LLC, and Surf City
Investments, Inc., filed a Chapter 11 petition (Bankr. E.D. N.C.
Case No. 11-01398) on Feb. 24, 2011. Trawick H. Stubbs, Jr.,
Esq., at Stubbs & Perdue, P.A., in New Bern, North Carolina,
represents the Debtor. In its schedules, the Debtor disclosed
$6,538,556 in assets and $6,687,803 in liabilities.
SYMPHONYIRI GROUP: S&P Puts B+ Corp. Credit Rating; Outlook Stable
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'B+'
corporate credit rating to Chicago, Ill.-based SymphonyIRI Group
Inc. The rating outlook is stable.
"At the same time, we assigned SymphonyIRI's $450 million secured
first-lien credit facilities our preliminary issue rating of 'B+'
(at the same level as the 'B+' preliminary corporate credit
rating) with a preliminary recovery rating of '3', indicating
our expectation of meaningful (50%-70%) recovery for debtholders
in the event of a payment default. The facilities consist of a
$50 million revolving credit facility due 2016 and a $400 million
term loan B due 2017," S&P stated.
"The 'B+' preliminary corporate credit rating incorporates our
assumptions of modest revenue growth and fairly stable credit
measures over the intermediate term," said Standard & Poor's
credit analyst Andy Liu. "SymphonyIRI's market measurement segment
is mature and accounts for a majority of the company's revenues.
Future revenue and EBITDA growth will mainly be driven by the
faster growing but smaller solutions and services segment.
Assuming SymphonyIRI won't be overly aggressive in pursuing
expiring client contracts at Nielsen Co. B.V. (its major
competitor), key credit measures should gradually improve over
time."
The rating outlook on SymphonyIRI is stable. "Over the medium
term, we expect modest revenue and EBITDA growth," said Mr. Liu.
"We also expect the company to generate positive discretionary
cash flow over the same horizon. This should enable to IRI to
gradually decrease its debt leverage."
T3 MOTION: Extends Maturity of Immersive Promissory Note to May
---------------------------------------------------------------
T3 Motion, Inc., entered into an Amendment No. 4 to the Promissory
Note granted by the Company to Immersive Media Corp. which
extended the maturity date to May 20, 2011. All accrued interest
through May 20, 2011, would be paid on May 31, 2011. A full-text
copy of the Amendment No.4 to Promissory Note is available for
free at http://is.gd/6MXMLE
About T3 Motion
Costa Mesa, Calif.-based T3 Motion, Inc., develops and
manufactures T3 Series vehicles, which are electric three-wheel
stand-up vehicles that are directly targeted to the public safety
and private security markets.
The Company reported a net loss of $8.32 million on $4.68 million
of net revenues for the year ended Dec. 31, 2010, compared with a
net loss of $6.70 million on $4.64 million of net revenues during
the prior year.
The Company's balance sheet at Dec. 31, 2010, showed $3.58 million
in total assets, $19.25 million in total liabilities, and a
$15.67 million stockholders' deficit.
As reported by the TCR on April 6, 2011, KMJ Corbin & Company LLP,
in Costa Mesa, Calif., expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has incurred significant operating
losses and has used substantial amounts of working capital in its
operations since inception, and at Dec. 31, 2010, has a working
capital deficit of $15,057,791 and an accumulated deficit of
$45,120,210.
TASTY BAKING: Posts $4.3 Million Net Loss in March 26 Quarter
-------------------------------------------------------------
Tasty Baking Company filed its quarterly report on Form 10-Q,
reporting a net loss of $4.3 million on $45.6 million of revenue
for the thirteen weeks ended March 26, 2011, compared with a net
loss of $3.9 million on $43.1 million of revenue for the thirteen
weeks ended March 27, 2010.
The Company's balance sheet at March 26, 2011, showed
$153.3 million in total assets, $172.2 million in total
liabilities, and a stockholders' deficit of $18.9 million.
On March 25, 2011, the Company entered into a Waiver, Consent and
Eighth Amendment to its Bank Credit Agreement dated as of Sept. 6,
2007, among the Company, Citizens Bank of Pennsylvania, Bank of
America, Sovereign Bank and Manufacturers and Traders Trust
Company, as amended. The Company also entered into a Waiver,
Consent and Second Amendment to the PIDC Agreement, which amended
the Credit Agreement, dated as of Sept. 6, 2007, as amended.
These amendments provide for an extension from 90 days to 105 days
after the Company's fiscal year end to provide audited financial
statements prepared in accordance with Generally Accepted
Accounting Principles and accompanied by a report and opinion of
an independent certified public accountant; waive the Specified
Lien Defaults; and permit the Company to enter into an agreement
for the disposition of certain assets, specifically related to the
sale of the accounts receivable balance from The Great Atlantic
and Pacific Tea Company, Inc. ("A&P"), subject to certain
limitations.
As reported in the TCR on April 14, 2011, PricewaterhouseCoopers
LLP, in Philadelphia, Pennsylvania, expressed substantial doubt
about Tasty Baking's ability to continue as a going concern,
following the Company's results for the 52 weeks ended Dec. 25,
2010. The independent auditors noted that of the Company's
cumulative losses, substantial indebtedness that is due June 30,
2011, in addition to its current liquidity situation.
A complete text of the Form 10-Q is available for free at:
http://is.gd/oS3Gb9
About Tasty Baking Company
Tasty Baking Company (NasdaqGM: TSTY) -- http://www.tastykake.com/
-- founded in 1914 and headquartered in Philadelphia, Pa., is one
of the country's leading bakers of snack cakes, pies, cookies, and
donuts. The Ccompany has manufacturing facilities in Philadelphia
and Oxford, Pa. The Company offers more than 100 products under
the Tastykake brand name.
TEEKAY CORP: Moody's Lowers Corp. Family Rating to 'B1'
-------------------------------------------------------
Moody's Investors Service downgraded its debt ratings of Teekay
Corporation; Corporate Family to B1 from Ba3, senior unsecured to
B2 from B1. Moody's affirmed the Speculative Grade Liquidity
rating of SGL-2. The outlook is stable.
Downgrades:
Issuer: Teekay Corporation
-- Corporate Family Rating, Downgraded to B1 from Ba3
-- Senior Unsecured Regular Bond/Debenture, Downgraded to B2
from B1
Ratings Rationale
The downgrade of the ratings reflects Moody's belief that Teekay
will no longer be able to restore its credit metrics to levels
that are supportive of the Ba-rating category. "We expect tanker
market fundamentals to remain weak well into 2012," said Moody's
Shipping Analyst, Jonathan Root, "keeping Teekay's spot rate fleet
from generating sufficient cash flows that could potentially be
applied to debt reduction." Examining the financial statements of
the daughter companies highlights the significant amount of debt
Teekay has incurred to transform itself from mainly a crude oil
tanker owner and operator to the self-described asset manager that
sources projects for the Teekay family of companies. Deployment of
capital for contracted long-term, project-like investments in the
LNG and offshore segments reduces the variability of operating
cash flows over the course of the tanker cycle. However, the
payout of an overwhelming majority of earnings of the daughter
companies to equityholders results in sustained high leverage in
these subsidiaries. Locking the vessels on long-term charters
lowers returns on capital relative to investments in conventional
tankers and reduces the potential to benefit when freight rates
increase. Maintaining exposure to the up-cycles is a key attribute
that tanker owners typically rely upon to generate significant
cash flow to de-lever when freight rates are strong.
The B1 Corporate Family Rating reflects Teekay's position as a
leading provider of seaborne transportation of oil and refined
petroleum products, its good liquidity and the contributions of
the fixed-rate fleet that cover it's operating and G&A expenses.
Moody's believes that the company's fleet deployment strategy
makes its risk profile stronger than that implied by its
particularly high leverage and modest coverage of interest. The B1
rating also contemplates that Teekay will continue to invest in
new projects including conventional oil or refined product
tankers. Although partially funded with equity, such investments
are likely to offset potential reductions in debt from scheduled
repayments and redeliveries of in-chartered vessels, limiting
strengthening of the credit metrics profile. The high payouts
required by the master limited partnership structure of the
daughter companies will keep financial leverage in the
organization at high levels. Moody's anticipates that the need to
grow the per unit distributions of Teekay LNG Partners L.P and
Teekay Offshore Partners L.P. (each not rated) to sustain their
respective per unit market values as well as enhance the value of
Teekay's general partner interests will require ongoing
investment, a portion of which will likely be debt-funded.
The stable outlook reflects the stability of cash flows from the
large contracted revenue base, which should help cover near-term
debt service obligations and the company's good liquidity.
The ratings presently accommodate credit metrics that are weak for
the rating category. The inability to sustain a path to a stronger
credit metrics profile by 2013 could result in a negative rating
action. For instance, Debt to EBITDA of above 5.5 times or FFO +
interest to interest of below 2.3 times would indicate
management's unwillingness or inability to de-risk the capital
structure. Retained Cash Flow to Net Debt that remains below 10%
could also be problematic for maintaining the B1 rating. Further
increases in debt, either from share purchases, acquisitions or
additional charters-in could also result in a downgrade. There is
no upwards pressure on the ratings because of the current credit
metrics profile. Significant strengthening of credit metrics
including sustained positive free cash flow generation would be
required before Moody's would consider a change in the outlook to
positive.
The principal methodology used in rating Teekay Corporation was
the Global Shipping Industry Methodology, published December 2009.
Other methodologies used include Loss Given Default for
Speculative Grade Issuers in the US, Canada, and EMEA, published
June 2009.
Teekay Corporation, a Marshall Islands corporation headquartered
in Hamilton, Bermuda, having its main operating office in
Vancouver, Canada, operates a fleet of 150 owned, chartered-in or
managed crude, refined products, LNG, LPG and FPSO vessels,
including 11 newbuildings on order.
TELIGENT INC: 2nd Cir. Upholds Protective Orders on Mediation Docs
------------------------------------------------------------------
The United States Court of Appeals for the Second Circuit upheld
an order of the U.S. District Court for the Southern District of
New York (Castel, J.) affirming the order of the bankruptcy court
(Bernstein, C.B.J.), which denied K&L Gates LLP's motion to lift
two protective orders prohibiting disclosure of communications
made during a mediation, and Savage & Associates, P.C.'s cross-
motion to enjoin K&L Gates from raising questions about the
validity of certain provisions of a settlement agreement as a
defense to malpractice in a related action.
With respect to the cross-appeal, the protective orders are silent
as to when their confidentiality restrictions may be lifted;
therefore, disclosure would have been warranted only if the party
seeking disclosure had demonstrated (1) a special need for the
confidential material it sought; (2) resulting unfairness from a
lack of discovery; and (3) that the need for the evidence
outweighed the interest in maintaining confidentiality. K&L Gates
failed to make the requisite showing, and accordingly, the Second
Circuit held there was no error in the denial of the law firm's
motion.
With respect to the lead appeal, because K&L Gates was, at most, a
potential debtor of a debtor of the estate, it could not have been
considered a "party in interest" with standing to contest the
validity of the settlement agreement when the motion to approve
that agreement was pending before the bankruptcy court. There
was, therefore, no error in the holding that K&L Gates is not
barred from asserting a defense challenging the validity of any
provision of the settlement agreement in connection with the
related malpractice action currently pending against the law firm.
Teligent Inc.'s former CEO Alex Mandl retained K&L Gates around
April 2001 in connection with his potential departure from
Teligent. At that time, $12 million was outstanding on a $15
million loan extended to Mr. Mandl. K&L Gates drafted a severance
agreement for Mandl that, according to the law firm, "reflect[ed]
that Teligent had terminated Mandl other than for Cause effective
as of April 27, 2001, thus triggering automatic loan forgiveness."
Less than a month after the parties ratified the severance
agreement, Teligent filed for Chapter 11 bankruptcy. Savage &
Associates was appointed by the bankruptcy court to be the
Unsecured Claims Estate Representative. Savage & Associates sued
Mr. Mandl to recover the balance of the loan. Mr. Mandl again
retained K&L Gates to represent him in connection with this
matter.
The bankruptcy court held a one-day trial after which it concluded
that Mr. Mandl had resigned before Teligent terminated his
employment, and therefore, Mr. Mandl was liable for the balance of
the loan. That finding was not appealed.
Shortly after the bankruptcy court issued its decision relating to
the loan, Mr. Mandl retained Greenberg Traurig LLP as new counsel.
Greenberg Traurig then filed a number of motions, including a
motion for relief from the judgment based in part on a claim of
newly discovered evidence. Around the same time, Savage and
Associates commenced a new lawsuit in the Eastern District of
Virginia against Mr. Mandl, naming as defendants his wife, Susan
Mandl, and ASM Investments LLC, an entity associated with Mr.
Mandl, and alleging that Mr. Mandl had fraudulently transferred
certain property through ASM to his wife to shelter his assets
from creditors.
All parties to the action in Virginia participated in a voluntary
mediation in attempt to resolve both the motions before the
bankruptcy court as well as the Virginia Action. Greenberg
Traurig invited K&L Gates to participate in the mediation, to
address Mr. Mandl's claim that K&L Gates committed malpractice in
the course of representing him during his termination from
Teligent and in the resulting adversary proceeding. K&L Gates
declined to participate.
In setting up a framework for the mediation, the parties agreed to
be bound by the terms of the protective orders routinely employed
by the Bankruptcy Court in the Southern District of New York in
the context of court-ordered mediation. The Protective Orders
imposed limitations, inter alia, on the disclosure of information
relating to the mediation. However, the Protective Orders
provided no guidance on when, or if, a party might be entitled to
release confidential information connected to the mediation.
Although formal mediation did not result in a settlement, the
parties thereafter reached an agreement. In exchange for
dismissal of the action in Virginia, Mr. Mandl agreed to pay the
estate $6.005 million and to commence a malpractice suit against
K&L Gates. The terms of the agreement also required Mr. Mandl to
remit to the estate 50% of the net value of any malpractice
recovery. The bankruptcy court approved the settlement.
On May 30, 2008, and as required by the settlement, Mr. Mandl
filed a malpractice action against K&L Gates in the Superior Court
of the District of Columbia. During discovery, K&L Gates sought
documents relating to "the negotiations leading up to the
Settlement Agreement, including all mediation and settlement
communications[.]" K&L Gates argued that the discovery was
"critical to issues such as causation, mitigation, and damages."
In response to K&L Gates's request, Mr. Mandl produced certain
documents.
When Savage and Associates learned that Mr. Mandl had disclosed
confidential mediation communications, Denice Savage, the firm's
principal, contacted Mr. Mandl, insisting that he withhold all
documents relating to the settlement agreement. Denise Savage
also demanded that K&L Gates destroy or return any such documents
in its possession. Both parties complied with these requests.
K&L Gates then filed a motion with the bankruptcy court, seeking
to lift the confidentiality provisions of the Protective Orders.
The bankruptcy court denied the motion, reasoning, among other
things, that K&L Gates had not shown a need for all mediation
communications, though the law firm had sought discovery of the
entire universe of documents. The bankruptcy court also noted
that its conclusion was "not intended to foreclose K&L's right to
argue before the DC court that a specific communication is not
covered by the confidentiality provisions of the [Protective]
Orders (e.g., it was not made `during the mediation process'), or
that the court should nevertheless order disclosure of a specific
communication under applicable law." The bankruptcy court's
denial of K&L Gates's motion to lift the confidentiality
provisions of the Protective Orders is the subject of the cross-
appeal.
Savage & Associates opposed the motion to lift the Protective
Orders before the bankruptcy court and cross-moved for injunctive
relief prohibiting K&L Gates from asserting any defense in the
District of Columbia action relating to the mediation of the
action filed in Virginia. Savage & Associates sought to enjoin
K&L Gates from raising as a defense to malpractice that certain
provisions in the settlement agreement between Mr. Mandl and
Savage were invalid. The bankruptcy court denied Savage &
Associates' motion for injunctive relief, and the district court
affirmed. These orders are the subject of the lead appeal.
The case before the Second Circuit is Savage & Associates, P.C.,
Plaintiff-Appellant-Cross-Appellee, v. K&L Gates LLP, Appellee-
Cross-Appellant, and Alex Mandl, Defendant-Appellee-Cross
Appellee, Nos. 10-2257-bk (L), 10-2411-bk (XAP) (2nd Cir.).
A copy of the Second Circuit's decision dated May 5, 2011, is
available at http://is.gd/C5R1MDfrom Leagle.com. Circuit Judges
Rosemary S. Pooler, Richard C. Wesley, and Denny Chin constitute
the three-judge panel. Judge Pooler penned the opinion.
TERRA-GEN FINANCE: Fitch To Rate $360MM Loan Facilities 'BB-'
-------------------------------------------------------------
Fitch Ratings expects to rate Terra-Gen Finance, LLC's (Terra-Gen)
$300 million term loan facility and $60 million working capital
facility 'BB-'. The Rating Outlook is Stable.
Rating Rationale:
The expected rating is based on Terra-Gen's financial profile
during the six-year tenor of the term loan facility, which is
structurally subordinated to project-level indebtedness, and
Terra-Gen's ability to refinance the outstanding principal balance
at maturity. Fitch believes there is a strong likelihood that
Terra-Gen will be able to refinance the term loan facility.
Despite the elevated risk profile of the portfolio over the long
term, Terra-Gen's debt capacity appears sufficient to refinance
outstanding indebtedness under varying levels of stress, primarily
due to the receipt of fixed-price contractual revenues. Fitch
views favorably Terra-Gen's cash sweep mechanism, which should
allow Terra-Gen to reduce leverage despite minimal scheduled
amortization. Fitch notes that potential liquidity constraints in
the financial markets may affect Terra-Gen's ability to refinance
the term loan as it approaches maturity.
Repayment of the term loan facility is generally supported by
revenues derived from fixed price contracts with an investment-
grade utility. Operational risks are partially mitigated due to
portfolio diversity, and Fitch's analysis considered the
established operating histories of the existing projects. However,
Terra-Gen is particularly susceptible to performance shortfalls at
Alta, a wind project that only recently achieved commercial
operations and the primary source of Terra-Gen's cash flows. Fitch
recognizes that Terra-Gen principally relies upon fixed-price
contractual revenues, though the rating also incorporates Terra-
Gen's exposure to price volatility on market-based power purchase
agreements (PPAs).
Terra-Gen's consolidated debt service coverage ratios (DSCRs)
range between 1.1 times (x) and 1.3x under several of Fitch's
stress scenarios. In particular, a reduction in cash distributions
from the Alta Wind project (Alta, rated 'BBB-' with a Stable
Outlook by Fitch) under Fitch rating case conditions could reduce
consolidated DSCRs to 1.1x. Fitch also considered Terra-Gen's
ability to refinance the term loan facility at different levels of
outstanding principal under the stress analyses. Based solely on
contractual, fixed price revenues derived from Alta and the Dixie
Valley geothermal facility under sponsor base case conditions,
Terra-Gen's loan life coverage ratios exceeded 1.4x at the
maturity of the term loan facility.
Key Rating Drivers:
-- Revenues could fall short of projections due to price
volatility under the regulatory short-run avoided cost
(SRAC) formula and on non-contracted merchant revenues.
Approximately 30% of portfolio capacity is exposed to price
risk;
-- Potential for higher expenses, such as escalating
maintenance costs at aging facilities or unexpected capital
expenditures that may be required to maintain projected
output. The long-term cost profile for the Alta project has
not been demonstrated and could exceed projections;
-- Structural subordination to project-level debt and cash
traps could reduce cash available to repay Terra-Gen's
indebtedness;
-- Terra-Gen is exposed to refinancing risk and depends upon a
cash sweep mechanism due to minimal scheduled amortization
during the term of the debt;
-- Variable interest rate exposure could increase debt service
costs and cash available to pay principal.
Security:
The bonds are secured by a first-priority security interest in
Terra-Gen's accounts, ownership interests and project dividends.
Credit Summary:
Terra-Gen is the holding company for a portfolio of 22 projects
that generate power using renewable resources. Terra-Gen is a
special-purpose company formed solely to acquire, own and operate
the portfolio. Affiliates of ArcLight Capital Partners and Global
Infrastructure Partners (collectively, the sponsors) hold the
ownership interests in Terra-Gen through their ownership of Terra-
Gen's parent, Terra-Gen Power, LLC. The proceeds of the issuance
will be used to fully repay existing indebtedness,fund a cash
distribution to the sponsors, cash-fund three months of interest
within the nine-month debt service reserve, and pay transaction
fees and expenses. The working capital facility will be used to
fund the balance of the debt service reserve at Terra-Gen, support
various project-level reserve obligations, and provide additional
liquidity as-needed.
The portfolio consists of geothermal, solar, and wind projects
with a total capacity of 1,236 MW. The facilities located in
California and Nevada account for 86% and 5%, respectively, of
portfolio capacity. The remaining 9% of capacity is distributed
amongst several wind projects primarily situated in the western
United States. The projects in the Terra-Gen portfolio are
entirely owned or leased by Terra-Gen with the exception of the
SEGS solar project, 50% of which is held indirectly by NextEra
Energy Resources. Nearly all of the projects are financed with
outstanding project-level or intermediate holding company
indebtedness.
The projects sell energy and capacity under various medium- and
long-term PPAs. Nearly 90% of the portfolio's nominal capacity is
contractually committed to Southern California Edison (SCE, rated
'A-' with a Stable Outlook by Fitch), the primary PPA
counterparty. The balance of the capacity is committed to other
utilities and municipal power authorities. The majority of
portfolio revenue is currently derived from fixed-price PPAs,
though a substantial proportion of revenue is subject to
volatility in SCE's SRAC over the long term.
THOMPSON CREEK: Moody's Assigns 'B3' Rating to Proposed Sr. Notes
-----------------------------------------------------------------
Moody's Investors Service assigned first-time ratings to Thompson
Creek Metals Company, Inc., including a corporate family rating of
B1, a probability of default rating of B1, and a B3 rating to the
company's proposed $300 million of guaranteed senior unsecured
notes. At the same time, Moody's assigned a speculative grade
liquidity rating of SGL-2. The outlook is stable.
Ratings Rationale
Thompson Creek's B1 corporate family rating reflects its
concentration in molybdenum, relatively small size, heavy reliance
currently on two mines, and need for favorable volume and price
trends in order to meet its increasingly aggressive capital
expenditure requirements over the next several years. Moody's
recognizes that pro forma for the proposed transaction, the
company will have a relatively debt-light capital structure, along
with a solid cash position, which, taken in isolation, could argue
for a higher rating. However, the rating is forward looking and
anticipates meaningful negative free cash flow (operating cash
flow minus capital expenditures) in each of 2011 and 2012,
particularly if the molybdenum price moves below $15/lb. At this
price level and below, which is not out of line with historical
movements, Moody's anticipates a contraction in liquidity and the
need for additional debt, especially if the common stock warrants
are not converted in October 2011. Consequently Moody's expects a
tightening in debt protection ratios over the next several years.
Further considerations include the decline in production levels at
the Thompson Creek mine where ongoing development will be needed
to maintain the production profile, although this will be somewhat
offset by the increased production at Endako following the
completion of its mine expansion by the end of 2011.
At the same time, the rating considers the long operating history
of Thompson Creek's mines and its Langeloth metallurgical
facility, as well the company's low political risk profile given
the location of its operations in the U.S. and Canada. Further
favorable factors in the rating include the fact that a
significant portion of the company's production is on a contract
basis, thus ensuring minimum offtakes although price risk remains,
and the company has a good relationship with its customer base.
The company's SGL-2 rating reflects its strong liquidity position.
Pro forma for the debt issuance, Thompson Creek will have
approximately $595 million of cash and a $300 million undrawn
revolver expiring in 2014. However, while Moody's anticipates a
reasonable amount of operating cash flow over the next several
years, free cash flow will be substantially negative, even with
robust molybdenum prices. The potential magnitude of increased
debt requirements, however, could be mitigated should the
company's warrants be converted in October 2011.
The B3 rating on the senior unsecured notes reflects their lower
rank in the capital structure behind the $300 million secured
revolver and up to $132 million in secured equipment financing to
fund the mobile fleet needed at the Mt. Milligan project.
The stable outlook reflects Moody's expectation that market
conditions and prices for molybdenum over the next twelve to
fifteen months will remain favorable and provide for a reasonable
level of cash generation to support the substantive capital
expenditures over this time frame. The outlook also anticipates
that the company will continue to maintain discipline with respect
to the use of debt in its capital structure and adjust or slow
capital spending should market conditions deteriorate.
Going forward, the ratings could be lowered if Thompson Creek
experiences any significant operational difficulties at either of
its two primary mines, capital requirements for Mount Milligan or
Endako increase more than is currently anticipated, or debt to
EBITDA exceeds 4.5x.
Upward rating pressure is limited at this time due to the
significant capital expenditures required over the next several
years. However, the outlook or rating could be favorably impacted
should the company maintain debt/EBITDA no greater than 4.25x,
EBIT/interest of at least 3.25x, operating cash flow less
dividends/debt of at least 15% and sound liquidity.
Assignments:
Issuer: Thompson Creek Metals Company Inc.
-- Probability of Default Rating, B1
-- Corporate Family Rating, B1
-- Speculative Grade Liquidity Rating, Assigned SGL-2
-- Senior Unsecured Regular Bond/Debenture, Assigned B3, LGD5
78%
Outlook Actions:
Issuer: Thompson Creek Metals Company Inc.
-- Outlook, Stable
The principal methodology used in rating Thompson Creek was the
Global Mining Industry Methodology, published May 2009. Other
methodologies used include Loss Given Default for Speculative
Grade Issuers in the US, Canada, and EMEA, published June 2009.
Thompson Creek Metals Company Inc., the world's fifth largest
producer of molybdenum at approximately 7% of global consumption
in 2010, operates through two open pit mines and two processing
centers. The company owns 100% of the Thompson Creek open-pit mine
in Idaho, 100% of the Langeloth processing facility in
Pennsylvania, and 75% of the Endako mine, concentrator, and
roaster in British Columbia. It is currently in the process of
constructing the Mount Milligan copper-gold mine in northern
British Columbia, whose operations are expected to commence in
2013. In 2010, Thompson Creek produced 32.6 million pounds of
molybdenum and generated approximately $595 million of revenues.
THOMPSON CREEK: S&P Holds 'B+' Corp. Credit Rating; Outlook Stable
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings, including
its 'B+' long-term corporate credit rating on Denver-based
Thompson Creek Metals Co. The outlook is stable.
"We also assigned our 'B' issue-level rating, and a '5' recovery
rating, to the company's proposed US$300 million senior unsecured
notes issuance. The '5' recovery rating indicates our expectation
of modest (10%-30%) recovery in the event of default," S&P stated.
"The ratings on Thompson Creek reflect what we view as the
company's weak business risk profile, highlighted by its reliance
on volatile molybdenum prices during a phase of large capital
expenditures, limited operating diversity, and the capital
intensity of its operations," said Standard & Poor's credit
analyst Donald Marleau. "Partially offsetting these factors in
our view are the company's relatively attractive cost profile and
long reserve lives at its two operating mines," Mr. Marleau added.
"Thompson Creek, in our opinion, has a very limited degree of
operating diversity as a single-commodity producer operating two
open-pit molybdenum mines, the largest of which will account for
close to two-thirds of operating cash flow in 2011. We believe
that the development of its recently acquired Mt. Milligan, B.C.-
based copper and gold mine project, will ultimately improve
the company's commodity and mine diversification, a key rating
constraint at the moment. However, improved operating diversity is
contingent on Thompson Creek's ability to bring Mt. Milligan into
production on time and on budget in 2013," S&P said.
According to S&P, "The stable outlook reflects our view that
Thompson Creek will generate credit metrics that support the
rating through a phase of growth-oriented capital spending, given
our expectation of continued strong molybdenum prices. At current
prices, we estimate 2011 EBITDA to be about $300 million,
resulting in adjusted debt to EBITDA under 1.5x and adjusted funds
from operations to debt of more than 50%. Furthermore, we estimate
that the company will maintain adequate liquidity despite a
multiyear period of considerably negative free operating cash
flow. The rating could come under pressure if molybdenum prices
deteriorate significantly, resulting in a debt-to-EBITDA leverage
ratio greater than 4.5x for an extended period of time. We
estimate that such a scenario could emerge if prices were
sustained below US$14 per pound in the first two years of the
company's capital expenditure program. We could consider a
positive rating action if Thompson Creek's growth plans deliver
the expected enhancement in cash flow diversity and earnings."
TIB FINANCIAL: North American Discloses 97.2% Equity Stake
----------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, North American Financial Holdings, Inc.,
disclosed that it beneficially owns 23,333,334 shares of common
stock of TIB Financial Corp. representing 97.2% of the shares
outstanding. The percentage was calculated based on 24,016,602
shares of Common Stock outstanding, which is the sum of (i)
12,349,935 shares of Common Stock outstanding as of April 20,
2011, as reported on the Definitive Proxy Statement filed by TIB
Financial Corp. with the Securities and Exchange Commission on
April 29, 2011 and (ii) 11,666,667 shares of Common Stock issuable
upon exercise of the Warrant.
About TIB Financial Corp.
Headquartered in Naples, Florida, TIB Financial Corp.
-- http://www.tibfinancialcorp.com/-- is a financial services
company with approximately $1.7 billion in total assets and 28
full-service banking offices throughout the Florida Keys,
Homestead, Naples, Bonita Springs, Fort Myers, Cape Coral and
Venice. TIB Financial Corp. is also the parent company of Naples
Capital Advisors, Inc., a registered investment advisor with
approximately $169 million of assets under advisement. TIB
Financial Corp., through its wholly owned subsidiaries, TIB Bank
and Naples Capital Advisors, Inc., serves the personal and
commercial banking and investment management needs of local
residents and businesses in its market areas.
The Company's balance sheet at Dec. 31, 2010 showed $1.75 billion
in total assets, $1.58 billion in total liabilities and $176.75
million in total shareholders' equity.
As reported in the Troubled Company Reporter on April 6, 2010,
Crowe Horwath LLP, in Fort Lauderdale, Fla., 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 incurred net losses in 2009, 2008 and 2007, primarily
from loan and investment impairments. In addition, the Company's
bank subsidiary is operating under an informal agreement with bank
regulatory agencies that requires, among other provisions, higher
regulatory capital requirements. The Bank did not meet the higher
capital requirement as of Dec. 31, 2009, and therefore is not
in compliance with the regulatory agreement. Failure to comply
with the regulatory agreement may result in additional regulatory
enforcement actions. The 2010 Annual Report did not contain a
going concern doubt.
TRANS-LUX CORPORATION: GAMCO Asset Discloses 4.2% Equity Stake
--------------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, GAMCO Asset Management Inc. and its
affiliates disclosed that they beneficially own 102,500 shares of
common stock of representing 4.20% of the shares outstanding. The
number of shares outstanding of the Company's common stock, par
value $1.00 per share, on March 30, 2011, was 2,442,923. A full-
text copy of the filing is available for free at:
http://is.gd/y6Riuf
About Trans-Lux Corporation
Norwalk, Conn.-based Trans-Lux Corporation (NYSE Amex: TLX) is a
designer and manufacturer of digital signage display solutions for
the financial, sports and entertainment, gaming and leasing
markets.
Trans-Lux reported a net loss of $7.03 million on $24.30 million
of total revenues for the year ended Dec. 31, 2010, compared with
a net loss of $8.79 million on $28.54 million of total revenues
during the prior year.
The Company's balance sheet at Dec. 31, 2010 showed $33.44 million
in total assets, $33.41 million in total liabilities and $30,000
in total stockholders' equity.
As reported by the TCR on April 8, 2011, UHY LLP, in Hartford,
Connecticut, expressed substantial doubt about the Company's
ability to continue as a going concern. The independent auditors
noted that the Company has incurred significant recurring losses
from continuing operations and has a significant working capital
deficiency. In 2009, the Company had a loss from continuing
operations of $8.8 million and has a working capital deficiency of
$16.0 million as of Dec. 31, 2009. Furthermore, the Company is in
default of the indenture agreements governing its outstanding 9
1/2% Subordinated debentures and its 8 1/4% Limited convertible
senior subordinated notes so that the trustees or holders of 25%
of the outstanding Debentures and Notes have the right to demand
payment immediately.
TRIPLE M: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: Triple M Tire, Inc
P.O. Box 1119
Gaylord, MI 49734
Bankruptcy Case No.: 11-21675
Chapter 11 Petition Date: May 5, 2011
Court: U.S. Bankruptcy Court
Eastern District of Michigan (Bay City)
Judge: Daniel S. Opperman
Debtor's Counsel: Matthew P. Taunt, Esq.
CHARLES J. TAUNT & ASSOCIATES, PLLC
700 East Maple Road, Second Floor
Birmingham, MI 48009
Tel: (248) 644-7800
E-mail: mtaunt@tauntlaw.com
Scheduled Assets: $1,826,964
Scheduled Debts: $4,851,539
A list of the Company's 20 largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/mieb11-21675.pdf
The petition was signed by Larry K. Miller, president.
TRIUS THERAPEUTICS: Incurs $10-Mil. Net Loss in March 31 Qtr.
-------------------------------------------------------------
Trius Therapeutics, Inc., reported a net loss of $10.06 million on
$2.71 million of total revenues for the three months ended
March 31, 2011, compared with a net loss of $4.27 million on $1.48
million of revenue for the same period a year ago.
The Company's balance sheet at March 31, 2011, showed $41.16
million in total assets, $4.90 million in total liabilities, all
current, $238,000 in deferred revenue and $36.02 million total
stockholders' equity.
A full-text copy of the press release announcing the financial
results is available for free at http://is.gd/UKoy6a
About Trius Therapeutics
San Diego, Calif.-based Trius Therapeutics, Inc. (Nasdaq: TSRX) --
http://www.triusrx.com/-- is a biopharmaceutical company focused
on the discovery, development and commercialization of innovative
antibiotics for serious, life-threatening infections. The
Company's first product candidate, torezolid phosphate, is an IV
and orally administered second generation oxazolidinone being
developed for the treatment of serious gram-positive infections,
including those caused by MRSA. In addition to the company's
torezolid phosphate clinical program, it is currently conducting
two preclinical programs using its proprietary discovery platform
to develop antibiotics to treat infections caused by gram-negative
bacteria.
The Company has incurred losses since its inception and it
anticipates that it will continue to incur losses for at least the
next several years. The Company does not anticipate that its
existing working capital, including the funds received on
Aug. 6, 2010, from its IPO, alone will be sufficient to fund its
operations through the successful development and
commercialization of torezolid phosphate or any other products it
develops. As a result, the Company says it will need to raise
additional capital to fund its operations and continue to conduct
clinical trials to support potential regulatory approval of
torezolid phosphate and any other product candidates.
The Company reported a net loss of $23.86 million on $8.03 million
of total revenues for the year ended Dec. 31, 2010, compared with
a net loss of $22.68 million on $5.01 million of total revenues
during the prior year.
TROPICANA PARTNERS: Seeks Extension of Schedules Filing Deadline
----------------------------------------------------------------
Tropicana Partners 2 LLC asks the U.S. Bankruptcy Court for the
District of Nevada to extend the deadline to file schedules and
statements to 30 days after the Court approves the request.
San Jose, California-based Tropicana Partners 2 LLC filed for
Chapter 11 bankruptcy protection on April 1, 2011 (Bankr. D. Nev.
Case No. 11-14920). Terry V. Leavitt, Esq., at Terry V. Leavitt,
serves as the Debtor's bankruptcy counsel. The Debtor estimated
its assets and debts at $10 million to $50 million.
TRUE NORTH: Posts $1.4 Million Net Loss in Sept. 30 Quarter
-----------------------------------------------------------
True North Finance Corporation filed its quarterly report on Form
10-Q, reporting a net loss of $1.43 million on $19,155 of interest
and fee income for the three months ended Sept. 30, 2010, compared
with a net loss of $3.17 million on $306,132 of interest and fee
income for the same period of 2009.
The Company's balance sheet at Sept. 30, 2010, showed
$1.04 million in total assets, $16.30 million in total
liabilities, and a stockholders' deficit of $15.26 million.
As reported in the Troubled Company Reporter on June 2, 2010,
L.L. Bradford & Company, LLC, in Las Vegas, expressed substantial
doubt about the Company's ability to continue as a going concern
after auditing the Company's financial statements for the year
ended Dec. 31, 2009. The independent auditors noted that the
Company has incurred recurring losses and its current liabilities
exceed its current assets.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/XFRfeF
About True North
True North Finance Corporation -- http://www.truenorthfinance.com/
-- was formerly known as CS Financing Corporation. On June 22,
2009, CS Financing Corporation changed its name to True North
Finance Corp. The Company is primarily a real estate lending
company.
CS Fund General Partner, LLC, became a wholly owned subsidiary of
True North Finance Corporation pursuant to a merger on June 30,
2009. Although CS Fund General Partner, LLC, was considered the
acquiring entity for accounting purposes, the Merger was
structured so that CS Fund General Partner, LLC, became a wholly
owned subsidiary of True North Finance Corporation.
TRUE NORTH: Incurs $1.43 Million Net Loss in Sept. 30 Quarter
-------------------------------------------------------------
True North Finance Corp. filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q reporting a
net loss of $1.43 million on $19,155 of interest and fee income
for the three months ended Sept. 30, 2010, compared with a net
loss of $3.16 million on $306,132 of interest and fee income for
the same period a year ago. The Company also reported net income
of $17.20 million on $74,756 of interest and fee income for the
nine months ended Sept. 30, 2010, compared with a net loss of
$3.16 million on $306,132 of interest and fee income for the same
period during the prior year.
The Company's balance sheet at Sept. 30, 2010, showed $1.04
million in total assets, $16.30 million in total liabilities and a
$15.26 million total stockholders' deficit.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/XFRfeF
About True North
True North Finance Corporation -- http://www.truenorthfinance.com/
-- was formerly known as CS Financing Corporation. On June 22,
2009, CS Financing Corporation changed its name to True North
Finance Corp. The Company is primarily a real estate lending
company.
CS Fund General Partner, LLC, became a wholly owned subsidiary of
True North Finance Corporation pursuant to a merger on June 30,
2009. Although CS Fund General Partner, LLC, was considered the
acquiring entity for accounting purposes, the Merger was
structured so that CS Fund General Partner, LLC, became a wholly
owned subsidiary of True North Finance Corporation.
As reported in the Troubled Company Reporter on June 2, 2010,
L.L. Bradford & Company, LLC, in Las Vegas, expressed substantial
doubt about the Company's ability to continue as a going concern
after auditing the Company's financial statements for the year
ended Dec. 31, 2009. The independent auditors noted that the
Company has incurred recurring losses and its current liabilities
exceed its current assets.
TRUE NORTH: S. Levenson Appointed Director, Pres., CFO, and CEO
---------------------------------------------------------------
The Board of Directors of True North Finance Corporation, on
Dec. 29, 2010, appointed Steven Levenson, as a Director and as the
President, CFO and CEO of the Company.
Mr. Levenson has been engaged in various capacities in the
financial securities industry for over two decades. His focus is
on the investment needs of high net-worth individuals and product
development. Mr. Levenson was a featured commentator on First
Word on Investing, a weekly financial television show broadcasted
on NBC affiliate WPTV West Palm Beach. He hosted First Word on
Investing, a daily financial radio program, and has also appeared
on CNBC. He has served as a member of the Investment Policy
Committee at Noble Capital Management, a registered investment
advisory firm. Throughout his career, Mr. Levenson has been the
Director of the Private Client Group at the Noble Financial Group;
President of the Cansesco Financial Group, a firm providing wealth
management services for professional athletes, entertainers, and
high net-worth individuals; and Senior Vice President of Corporate
Services at First Security Van Kasper, specializing in executive
financial and retirement planning. Mr. Levenson is a graduate of
California State University having received a Bachelor of Arts
Degree in History in 1981. He has formally been NASD licensed as
a General Securities Representative (Series 7), a General
Securities Principal (Series 24), a NYSE General Principle and
General Sales Supervisor (Series 9 & 10), a Securities Agent
(Series 63), and an Investment Advisor (Series 65).
On Dec. 29, 2010, following the appointment of Steven Levenson as
a Director of the Company and as the new President, CFO and CEO of
the Company, Todd Duckson, and Tim Redpath, resigned as officers
and directors of the Company. In addition, Mark Williams resigned
as CFO of the Company.
About True North
True North Finance Corporation -- http://www.truenorthfinance.com/
-- was formerly known as CS Financing Corporation. On June 22,
2009, CS Financing Corporation changed its name to True North
Finance Corp. The Company is primarily a real estate lending
company.
CS Fund General Partner, LLC, became a wholly owned subsidiary of
True North Finance Corporation pursuant to a merger on June 30,
2009. Although CS Fund General Partner, LLC, was considered the
acquiring entity for accounting purposes, the Merger was
structured so that CS Fund General Partner, LLC, became a wholly
owned subsidiary of True North Finance Corporation.
As reported in the Troubled Company Reporter on June 2, 2010,
L.L. Bradford & Company, LLC, in Las Vegas, expressed substantial
doubt about the Company's ability to continue as a going concern
after auditing the Company's financial statements for the year
ended Dec. 31, 2009. The independent auditors noted that the
Company has incurred recurring losses and its current liabilities
exceed its current assets.
The Company's balance sheet at Sept. 30, 2010, showed $1.04
million in total assets, $16.30 million in total liabilities and a
$15.26 million total stockholders' deficit.
TWINS RIVER: S&P Ups Corp. Credit Rating to 'BB-'; Outlook Stable
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on Twin
River Worldwide Holdings Inc. "We raised the corporate credit
rating to 'BB-' from 'B+'. The rating outlook is stable," S&P
related.
"At the same time, we assigned Twin River Management Group,
Inc.'s proposed $285 million senior secured credit facility our
preliminary issue-level rating of 'BB' (one notch higher than the
'BB-' corporate credit rating). We also assigned this debt our
preliminary recovery rating of '2', indicating our expectation of
substantial (70% to 90%) recovery for lenders in the event of a
payment default. The credit facility comprises a $25 million
revolving credit facility and a $260 million term loan. The
facility is guaranteed by parent Twin River Worldwide Holdings and
the borrower's UTGR subsidiary. All ratings are pending our review
of final documentation," S&P stated.
The company intends to use the proceeds from the new credit
facility to repay its existing term loan, which currently has a
balance of $260 million.
"The upgrade reflects outperformance relative to our previously
published expectations," said Standard & Poor's credit analyst
Melissa Long, "and our belief that Twin River can sustain at least
the level of EBITDA generated over the past 12 months."
"Additionally, under our performance expectations, we believe that
the company will generate meaningful levels of free operating
cash flow, which it will primarily use to repay debt."
"As a result, we expect that the company will be able to improve
its financial profile over the next few years to a level where it
can sustain leverage below 4x," added Ms. Long, "a level we
believe aligned with a 'BB-' corporate credit rating, even with
competition in Massachusetts over the longer term."
TYLER TOOL: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: Tyler Tool Company, Inc.
80 Highway 48 West
P.O. Box 272
Tylertown, MS 39667
Bankruptcy Case No.: 11-51066
Chapter 11 Petition Date: May 6, 2011
Court: U.S. Bankruptcy Court
Southern District of Mississippi (Gulfport Divisional
Office)
Judge: Katharine M. Samson
Debtor's Counsel: Craig M. Geno, Esq.
HARRIS JERNIGAN & GENO, PLLC
587 Highland Colony Parkway
P.O. Box 3380
Ridgeland, MS 39157
Tel: (601) 427-0048
Fax: (601) 427-0050
E-mail: cmgeno@hjglawfirm.com
Estimated Assets: $100,001 to $500,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Calvin McEwen, president.
UNIT CORP: S&P Rates Corp. Credit & $200MM Notes 'BB-'
------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' corporate
credit rating to Tulsa-based Unit Corp. The outlook is stable.
"At the same time, we assigned our 'BB-' subordinated debt rating
to Unit's proposed $200 million senior subordinated notes due
2021. The recovery rating is '3', indicating our expectation of
meaningful (50% to 70%) recovery in the event of a payment
default. We expect proceeds to be used to repay existing debt and
to help fund capital spending," S&P noted.
"The ratings on Unit Corp. reflect the company's modest, but
growing exploration and production subsidiary, the business
diversification provided by its contract drilling and mid-stream
subsidiaries, and expectations that the company will maintain a
modest financial policy, including target debt leverage of less
than 1.5x," said Standard & Poor's credit analyst Paul Harvey.
"The ratings also reflect the low utilization of the company's
rigs below 1,000 horsepower, limited scale of operations in its
businesses, and expectations that liquidity will remain adequate
despite the likelihood of negative free cash flow over the next 18
months."
S&P continued, "We expect Unit to generate solid financial
performance over the next 12 to 18 months. Based on our 2011 price
assumptions of $3.75 for natural gas and $75 per barrel crude oil,
and continued strong demand for rigs over 1,000 HP, adjusted debt
leverage should be below 1x and adjusted funds from operations
(FFO) to debt at about 100%. Likewise adjusted interest coverage
will be strong at about 30x. Although we expect near-term capital
spending to be more aggressive, we believe Unit will limit
spending such that debt leverage does not exceed 1.5x or that FFO
to debt falls below 60%."
"The stable outlook reflects our expectation that Unit will
maintain its prudent financial policies and maintain adequate
liquidity while it accelerates capital spending over the next 24
months. We could lower ratings if adjusted debt leverage exceeds
3x with no near-term correction, or if estimated liquidity were to
fall below $200 million. An upgrade is currently unlikely during
the next 12 months given the company's aggressive spending plans
and low utilization of its rig fleet," S&P added.
UNIVERSAL SOLAR: Posts $260,400 Net Loss in March 31 Quarter
------------------------------------------------------------
Universal Solar Technology, Inc. filed its quarterly report on
Form 10-Q, reporting a net loss of $260,382 on $955,011 of sales
for the three months ended March 31, 2011, compared with a net
loss of $248,642 on $0 revenue for the same period last year.
The Company's balance sheet at March 31, 2011, showed $9.7 million
in total assets, $10.8 in total liabilities, and a stockholders'
deficit of $1.1 million.
As reported in the TCR on April 5, 2011, Paritz & Company, P.A.,
in Hackensack, New Jersey, expressed substantial doubt about
Universal Solar Technology's ability to continue as a going
concern, following the Company's 2010 results. The independent
auditors noted that the Company's current liabilities exceeded its
current assets by $1.5 million and the Company has incurred net
loss of $1.5 million since inception.
A complete text of the Form 10-Q is available for free at:
http://is.gd/rKm4xW
Headquartered in Zhuhai City, Guangdong Province, in the People's
Republic of China, Universal Solar Technology, Inc., was
incorporated in the State of Nevada on July 24, 2007. It operates
through its wholly owned subsidiary, Kuong U Science & Technology
(Group) Ltd., a company incorporated in Macau, the People's
Republic of China on May 10, 2007, and its subsidiary, Nanyang
Universal Solar Technology Co., Ltd., a wholly foreign owned
enterprise registered on Sept. 8, 2008 under the wholly foreign-
owned enterprises laws of the PRC.
The Company primarily manufactures, markets and sells silicon
wafers to manufacturers of solar cells. In addition, the Company
manufactures photovoltaic modules with solar cells purchased from
third parties.
USEC INC: Unit Completes Effectiveness of Babcock Joint Venture
---------------------------------------------------------------
Effective May 1, 2011, American Centrifuge Holdings, LLC, a wholly
owned subsidiary of USEC Inc., and Babcock & Wilcox Technical
Services Group, Inc., a subsidiary of The Babcock & Wilcox
Company, completed the effectiveness of American Centrifuge
Manufacturing, LLC, a joint company for the manufacture and
assembly of AC100 centrifuge machines for the Company's American
Centrifuge project. American Centrifuge Manufacturing is owned
55% by ACP Holdings and 45% by B&W TSG.
Previously, on Sept. 2, 2010, in connection with the first closing
under the Securities Purchase Agreement dated as of May 25, 2010,
between USEC and Babcock & Wilcox Investment Company and Toshiba
Corporation, ACP Holdings and B&W TSG entered into a Limited
Liability Company Agreement for American Centrifuge Manufacturing
and agreed on a non-binding term sheet for the supply by American
Centrifuge Manufacturing of centrifuges and related equipment for
the American Centrifuge project. The Operating Agreement had
conditions to effectiveness relating to third-party funding for
the construction of the American Centrifuge Plant and the
execution and delivery of agreements contemplated by the non-
binding term sheet, including an equipment supply agreement for
the supply of centrifuge machines for the American Centrifuge
Plant, a guarantee by The Babcock & Wilcox Company supporting
American Centrifuge Manufacturing's obligations under the
equipment supply agreement, and a long-term supply agreement for
the supply of spare parts.
Effective May 1, 2011, the parties entered into the First
Amendment to the Operating Agreement to amend certain of the
conditions to the effectiveness of the Operating Agreement so that
the Operating Agreement could become effective. The Amendment
eliminated the conditions to effectiveness of American Centrifuge
Manufacturing related to third-party funding for the construction
of the American Centrifuge Plant and entering into a long-term
supply agreement between American Centrifuge Manufacturing and
American Centrifuge Enrichment, LLC, a wholly owned subsidiary of
ACP Holdings. The Amendment also provides that until (1) the
closing on third-party funding for the construction of the
American Centrifuge Plant and (2) the execution and delivery of
the long-term supply agreement, either party may cause the
transfer to ACP Holdings of B&W TSG's interest in American
Centrifuge Manufacturing without cost to either company. In
addition, B&W TSG's interest in American Centrifuge Manufacturing
will transfer to ACP Holdings automatically if the conditions
described in (1) and (2) above have not occurred by the outside
date for the third closing under the Securities Purchase Agreement
(Dec. 31, 2011 unless extended as contemplated in the Securities
Purchase Agreement).
Effective May 1, 2011, American Centrifuge Manufacturing entered
into an interim equipment supply agreement with the Company to
continue to produce a limited number of machines to maintain the
manufacturing infrastructure prior to closing on third-party
funding for the construction of the American Centrifuge Plant and
to complete the facilitization of manufacturing facilities to
support commercial plant volume manufacturing. American
Centrifuge Manufacturing also entered into a long-term equipment
supply agreement with ACE for the manufacture and assembly of
approximately 11,500 machines for the American Centrifuge Plant.
The Equipment Supply Agreement is not effective until closing on
third-party funding for the construction of the American
Centrifuge Plant. The Equipment Supply Agreement provides for a
fixed fee to be paid to B&W TSG with incentives tied to the
reduction of machine cost from an agreed upon target cost. The
target cost will be established prior to the effectiveness of the
Equipment Supply Agreement based on input received from suppliers
as part of the negotiations with suppliers. A ceiling cost will
also be set at the time the target cost is established which will
limit the total cost of the machines. Effective May 1, 2011, The
Babcock & Wilcox Company also delivered to ACE a limited guarantee
of performance of American Centrifuge Manufacturing under the
Equipment Supply Agreement.
As contemplated in the Operating Agreement, effective May 1, 2011,
USEC assigned certain contracts for machine manufacturing with key
machine manufacturing suppliers to American Centrifuge
Manufacturing. This included, but is not limited to, the
following contracts:
* Contract dated June 25, 2007 between USEC and BWXT Services,
Inc., filed as Exhibit 10.2 of the Company's Quarterly Report
on Form 10-Q for the quarter ended June 30, 2007; and
* Contract dated August 30, 2007 between USEC and Major Tool
and Machine, Inc., filed as Exhibit 10.3 to the Company's
Quarterly Report on Form 10-Q for the quarter ended Sept. 30,
2007, as amended by Amendment dated Nov. 3, 2009, filed as
Exhibit 10.40 to the Company's Annual Report on Form 10-K for
the year ended Dec. 31, 2009.
USEC and B&W are parties to the Securities Purchase Agreement, an
investor rights agreement and a strategic relationship agreement
and other agreements or arrangements described in the Company's
current reports on Form 8-K filed with the Securities and Exchange
Commission on May 25, 2010 and Sept. 2, 2010. B&W is a preferred
stockholder of the Company. In addition, as described in the
Company's quarterly report on Form 10-Q for the quarter ended
March 31, 2011, the U.S. Department of Energy awarded a contract
for the decontamination and decommissioning (D&D) of the
Portsmouth gaseous diffusion plant to a joint venture between The
Babcock & Wilcox Company and Fluor Corp. and USEC is transitioning
services at the Portsmouth site to the new D&D contractor.
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.
UTSTARCOM INC: Court Grants Preliminary OK of Derivative Pact
-------------------------------------------------------------
The Superior Court of the County of Alameda, California, granted
preliminary approval of a proposed settlement of Ernesto Espinoza
v. Ying Wu et al., Case No. RG06298775, a shareholder derivative
action that alleges various claims for relief in connection with
the granting of certain historical stock options by UTStarcom,
Inc. The proposed settlement is subject to final Court approval.
The Court has set a final approval hearing for July 22, 2011 at
11:00 a.m. in the courtroom of the Hon. Robert B. Freedman,
Superior Court Judge. The Court's preliminary approval order
requires the Company to provide a detailed notice to shareholders
of the terms of the proposed settlement on a Current Report on
Form 8-K.
A full-text copy of the Notice of Pendency and Proposed Settlement
of Shareholder Derivative Action is available for free at:
http://is.gd/B7JhSO
About UTStarcom, Inc.
UTStarcom, Inc. (Nasdaq: UTSI) -- http://www.utstar.com/-- is a
global leader in IP-based, end-to-end networking solutions and
international service and support. The Company sells its
solutions to operators in both emerging and established
telecommunications markets around the world. UTStarcom enables
its customers to rapidly deploy revenue-generating access services
using their existing infrastructure, while providing a migration
path to cost-efficient, end-to-end IP networks. The Company's
headquarters are currently in Alameda, California, with its
research and design operations primarily in China.
The Company reported a net loss of $65.29 million on $291.53
million of net sales for the year ended Dec. 31, 2010, compared
with a net loss of $225.70 million on $386.34 million of net sales
during the prior year.
The Company's balance sheet at Dec. 31, 2010 showed $784.28
million in total assets, $535.34 million in total liabilities and
$248.94 million in total equity.
The Company has recorded operating losses in 23 of the 24
consecutive quarters in the period ended Dec. 31, 2010. At
Dec. 31, 2010, the Company hasan accumulated deficit of $1,132.3
million. The Company has incurred net cash outflows from
operations of $92.2 million, $67.4 million and $55.2 million in
2010, 2009 and 2008, respectively. As operating results are
expected to improve in 2011 compared with prior years, the Company
expects to break-even on a full year basis in 2011.
UTSTARCOM INC: Incurs $10.51 Million Net Loss in March 31 Quarter
-----------------------------------------------------------------
UTStarcom, Inc., reported a net loss of $10.51 million on $61.26
million of net sales for the three months ended March 31, 2011,
compared with a net loss of $15.96 million on $80.84 million of
net sales for the same period during the prior year.
The Company's balance sheet at March 31, 2011, showed $726.30
million in total assets, $488.06 million in total liabilities and
$238.24 million total equity.
"We continued to make progress in improving our cost structure
during the first quarter," said Jack Lu, President and CEO of
UTStarcom, "and our gross profit margin increased from the
previous quarter, in part due to significant sales for our market-
leading PTN product. We remain confident that we will achieve our
full year financial targets."
A full-text copy of the press release announcing the financial
results is available for free at http://is.gd/ZbWvZv
About UTStarcom, Inc.
UTStarcom, Inc. (Nasdaq: UTSI) -- http://www.utstar.com/-- is a
global leader in IP-based, end-to-end networking solutions and
international service and support. The Company sells its
solutions to operators in both emerging and established
telecommunications markets around the world. UTStarcom enables
its customers to rapidly deploy revenue-generating access services
using their existing infrastructure, while providing a migration
path to cost-efficient, end-to-end IP networks. The Company's
headquarters are currently in Alameda, California, with its
research and design operations primarily in China.
The Company reported a net loss of $65.29 million on $291.53
million of net sales for the year ended Dec. 31, 2010, compared
with a net loss of $225.70 million on $386.34 million of net sales
during the prior year.
V-R PROPERTY: Case Summary & 9 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: V-R Property Management, A Nevada Corporation
2152 N. Carson Street
Carson City, NV 89706
Bankruptcy Case No.: 11-51521
Chapter 11 Petition Date: May 5, 2011
Court: U.S. Bankruptcy Court
District of Nevada (Reno)
Judge: Bruce T. Beesley
Debtor's Counsel: Paul W. Freitag, Esq.
THE LAW OFFICES OF PAUL FREITAG
885 Tyler Way
Reno, NV 89431
Tel: (775) 331-5666
E-mail: freitaglaw@yahoo.com
Scheduled Assets: $2,000,000
Scheduled Debts: $2,544,557
A list of the Company's nine largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/nvb11-51521.pdf
The petition was signed by Mohammad S. Ahmad, president.
VITA PARTNERS: Case Summary & 2 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Vita Partners, LLC
P.O. Box 2766
Yountville, CA 94599
Bankruptcy Case No.: 11-11708
Chapter 11 Petition Date: May 6, 2011
Court: United States Bankruptcy Court
Northern District of California (Santa Rosa)
Judge: Alan Jaroslovsky
Debtor's Counsel: Debra I. Grassgreen, Esq.
Maxim B. Litvak, Esq.
PACHULSKI, STANG, ZIEHL, AND JONES LLP
150 California St. 15th Fl.
San Francisco, CA 94111-4500
Tel: (415) 263-7000
E-mail: dgrassgreen@pszjlaw.com
mlitvak@pszjlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's two largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/canb11-11708.pdf
The petition was signed by Laura Cunningham, manager.
VITESSE SEMICONDUCTOR: Incurs $9.04MM Net Loss in March 31 Qtr.
---------------------------------------------------------------
Vitesse Semiconductor Corporation filed with the U.S. Securities
and Exchange Commission a Form 10-Q reporting a net loss of $9.04
million on $36.89 million of net revenues for the three months
ended March 31, 2011, compared with a net loss of $34.06 million
on $43.91 million of net revenues for the same period during the
prior year. The Company also reported a net loss of $16.77
million on $74.64 million of net revenues for the six months ended
March 31, 2011, compared with a net loss of $67.92 million on
$85.56 million of net revenues for the same period a year ago.
The Company's balance sheet at March 31, 2011, showed $74.72
million in total assets, $106.66 million in total liabilities and
a $31.94 million total stockholders' deficit.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/kCFEGa
About Vitesse
Based in Camarillo, California, Vitesse Semiconductor Corporation
(Pink Sheets: VTSS.PK) -- http://www.vitesse.com/-- designs,
develops and markets a diverse portfolio of semiconductor
solutions for Carrier and Enterprise networks worldwide.
In October 2009, Vitesse completed a debt restructuring
transaction that resulted in the conversion of 96.7% of the
Company's 2024 Debentures into a combination of cash, common
stock, Series B Preferred Stock and 2014 Debentures. With respect
to the remaining 3.3% of the 2024 Debentures, Vitesse settled its
obligations in cash. Additionally, Vitesse repaid $5.0 million of
its $30.0 million Senior Term Loan, the terms of which were
amended as part of the debt restructuring transactions.
The Company reported a net loss of $7.73 million on $37.45 million
of net revenue for the three months ended Dec. 31, 2010, compared
with a net loss of $33.86 million on $41.65 million of net revenue
for the same period a year ago.
VITRO SAB: Receives Permission to Auction U.S. Businesses
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that whether Vitro, S.A.B. de C.V. will have its Chapter
15 case in New York or in Texas will be decided at a hearing
before U.S. Bankruptcy Judge Harlin "Cooter" Hale in Dallas.
Mr. Rochelle notes that at a May 6 hearing, U.S. Bankruptcy Judge
Barbara Houser in Dallas gave approval for Vitro to sell the
businesses of four U.S. subsidiaries that put themselves into
Chapter 11 in the face of involuntary petitions filed by holders
of some of the $1.2 billion in defaulted bonds.
As reported in the Troubled Company Reporter on May 10, 2011, Mr.
Rochelle reported that Vitro SAB argued in a court filing on May 4
that its Chapter 15 case should remain in New York because the
bankruptcy judge in Fort Worth, Texas, is ill. Holders of some of
the US$1.2 billion in defaulted bonds filed a motion to transfer
the Chapter 15 case to Texas. Vitro filed its second Chapter 15
petition in New York on April 14 after a judge in Mexico
reinstated the previously dismissed Mexican reorganization.
Mr. Rochelle notes that under bankruptcy law, the court in Texas
with the first-filed case has the right to decide if it will take
a later case filed elsewhere. Vitro says that the judge in New
York, who had no prior familiarity with Vitro, is in the same
position as the other Texas judges because U.S. Bankruptcy Judge
Russell Nelms, who originally heard Vitro cases, will be off the
bench temporarily. Fintech Investments Ltd., calling itself a
substantial creditor, supports Vitro's bid to keep the Chapter 15
case in New York.
About Vitro SAB
Headquartered in Monterrey, Mexico, Vitro, S.A.B. de C.V. (BMV:
VITROA; NYSE: VTO), through its two subsidiaries, Vitro Envases
Norteamerica, SA de C.V. and Vimexico, S.A. de C.V., is a global
glass producer, serving the construction and automotive glass
markets and glass containers needs of the food, beverage, wine,
liquor, cosmetics and pharmaceutical industries.
Vitro is the largest manufacturer of glass containers and flat
glass in Mexico, with consolidated net sales in 2009 of MXN23,991
million (US$1.837 billion).
Vitro defaulted on its debt in 2009, and sought to restructure
around US$1.5 billion in debt, including US$1.2 billion in notes.
Vitro launched an offer to buy back or swap US$1.2 billion in debt
from bondholders. The tender offer would be consummated with a
bankruptcy filing in Mexico and Chapter 15 filing in the United
States. Vitro said noteholders would recover as much as 73% by
exchanging existing debt for cash, new debt or convertible bonds.
Concurso Mercantil & Chapter 15 Proceedings
Vitro SAB on Dec. 13, 2010, filed its voluntary petition for a
pre-packaged Concurso Plan in the Federal District Court for Civil
and Labor Matters for the State of Nuevo Leon, commencing its
voluntary concurso mercantil proceedings -- the Mexican equivalent
of a prepackaged Chapter 11 reorganization. Vitro SAB also
commenced parallel proceedings under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-16619) in Manhattan
on Dec. 13, 2010, to seek U.S. recognition and deference to its
bankruptcy proceedings in Mexico.
Early in January 2011, the Mexican Court dismissed the Concurso
Mercantil proceedings. The judge said Vitro couldn't push through
a plan to buy back or swap US$1.2 billion in debt from bondholders
based on the vote of US$1.9 billion of intercompany debt when
third-party creditors were opposed. Vitro as a result dismissed
the first Chapter 15 petition following the ruling by the Mexican
court.
On April 12, 2011, an appellate court in Mexico reinstated the
reorganization. Accordingly, Vitro SAB on April 14 re-filed a
petition for recognition of its Mexican reorganization in U.S.
Bankruptcy Court in Manhattan (Bankr. S.D.N.Y. Case No. 11-11754).
In the present Chapter 15 case, the Debtor seeks to block any
creditor suits in the U.S. pending the reorganization in Mexico.
Chapter 11 Proceedings
A group of noteholders opposed the exchange -- namely Knighthead
Master Fund, L.P., Lord Abbett Bond-Debenture Fund, Inc., Davidson
Kempner Distressed Opportunities Fund LP, and Brookville Horizons
Fund, L.P. Together, they held US$75 million, or approximately 6%
of the outstanding bond debt. The Noteholder group commenced
involuntary bankruptcy cases under Chapter 11 of the U.S.
Bankruptcy Code against Vitro Asset Corp. (Bankr. N.D. Tex. Case
No. 10-47470) and 15 other affiliates on Nov. 17, 2010.
Vitro engaged Susman Godfrey, L.L.P. as U.S. special litigation
counsel to analyze the potential rights that Vitro may exercise in
the United States against the ad hoc group of dissident
bondholders and its advisors.
A larger group of noteholders, known as the Ad Hoc Group of Vitro
Noteholders -- comprised of holders, or investment advisors to
holders, which represent approximately US$650 million of the
Senior Notes due 2012, 2013 and 2017 issued by Vitro -- was not
among the Chapter 11 petitioners, although the group has expressed
concerns over the exchange offer. The group says the exchange
offer exposes Noteholders who consent to potential adverse
consequences that have not been disclosed by Vitro. The group is
represented by John Cunningham, Esq., and Richard Kebrdle, Esq. at
White & Case LLP.
The U.S. affiliates subject to the involuntary petitions are Vitro
Chemicals, Fibers & Mining, LLC (Bankr. N.D. Tex. Case No. 10-
47472); Vitro America, LLC (Bankr. N.D. Tex. Case No. 10-47473);
Troper Services, Inc. (Bankr. N.D. Tex. Case No. 10-47474); Super
Sky Products, Inc. (Bankr. N.D. Tex. Case No. 10-47475); Super Sky
International, Inc. (Bankr. N.D. Tex. Case No. 10-47476); VVP
Holdings, LLC (Bankr. N.D. Tex. Case No. 10-47477); Amsilco
Holdings, Inc. (Bankr. N.D. Tex. Case No. 10-47478); B.B.O.
Holdings, Inc. (Bankr. N.D. Tex. Case No. 10-47479); Binswanger
Glass Company (Bankr. N.D. Tex. Case No. 10-47480); Crisa
Corporation (Bankr. N.D. Tex. Case No. 10-47481); VVP Finance
Corporation (Bankr. N.D. Tex. Case No. 10-47482); VVP Auto Glass,
Inc. (Bankr. N.D. Tex. Case No. 10-47483); V-MX Holdings, LLC
(Bankr. N.D. Tex. Case No. 10-47484); and Vitro Packaging, LLC
(Bankr. N.D. Tex. Case No. 10-47485).
A bankruptcy judge in Fort Worth, Texas, denied involuntary
Chapter 11 petitions filed against four U.S. subsidiaries. On
April 6, 2011, Vitro SAB agreed to put Vitro units -- Vitro
America LLC and three other U.S. subsidiaries -- that were subject
to the involuntary petitions into voluntary Chapter 11. The Texas
Court on April 21 denied involuntary petitions against the eight
U.S. subsidiaries that didn't consent to being in Chapter 11.
Vitro America, et al., have tapped Louis R. Strubeck, Jr., Esq.,
and William R. Greendyke, Esq., at Fulbright & Jaworski LLP, in
Dallas, Texas, as counsel. Kurtzman Carson Consultants is the
claims and notice agent.
The official committee of unsecured creditors appointed in the
Chapter 11 cases of Vitro America, et al., has selected Sarah Link
Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Dallas,
Texas, and Michael S. Stamer, Esq., Abid Qureshi, Esq., and Alexis
Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York,
as counsel.
VIVAKOR INC: Effects a 1-for-1000 Reverse Stock Split
-----------------------------------------------------
Vivakor, Inc., on April 14, 2011, filed a Certificate of Change
Pursuant to NRS 78.209 with the Nevada Secretary of State,
pursuant to which a one for one thousand reverse stock split would
be effected (with fractional shares rounded up to the nearest
whole number of shares) of both the total number of authorized
shares of Common Stock of the Company and the total number of
issued and outstanding shares of Common Stock of the Company, such
that the total number of authorized shares of Common Stock of the
Company would be decreased and the total number of issued and
outstanding shares of Common Stock of the Company held by each
stockholder of record at the effective date and time of such
decrease would be correspondingly decreased. The Financial
Industry Regulatory Authority has announced that May 4, 2011, was
the effective date of the Reverse Stock Split. Immediately before
the effectiveness of the Reverse Stock Split, the total number of
issued and outstanding shares of Common Stock of the Company was
239,878,853. As of the effectiveness of the Reverse Stock Split,
the total number of issued and outstanding shares of Common Stock
of the Company is approximately 239,879.
About Vivakor Inc.
Coralville, Iowa-based Vivakor, Inc., is a transdisciplinary
research company that develops products in the fields of molecular
medicine, electro-optics, biological handling and natural and
formulary compounds.
The Company's balance sheet at Sept. 30, 2010, showed
$2.65 million in total assets, $2.66 million in total liabilities,
and a stockholders' deficit of $11,602.
As reported in the Troubled Company Reporter on April 9, 2010,
McGladrey & Pullen, LLP, in Cedar Rapids, Iowa, expressed
substantial doubt about Vivakor, Inc.'s ability to continue as a
going concern, following the Company's 2009 results. The
independent auditors noted that the Company's ability to become a
profitable operating company is dependent upon obtaining financing
adequate to fulfill its research and market introduction
activities, and achieving a level of revenues adequate to support
the Company's cost structure.
WARNER MUSIC: S&P Puts 'B+' CCR on Watch on Merger Announcement
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B+'
corporate credit rating, as well as its senior secured and
senior unsecured debt ratings, on New York City-based Warner
Music Group Corp. (WMG) on CreditWatch with negative implications,
indicating that S&P may lower or affirm ratings based on the
ultimate pro forma capital structure and financial policy of the
new entity following the merger.
The CreditWatch listing follows WMG's announcement of a definitive
merger agreement under which it will be acquired by Access
Industries for $3.3 billion, or $8.25 per share.
"In resolving the CreditWatch listing, we will meet with WMG
management and review the pro forma capital structure, financial
policy, and business outlook of the new entity given long-term
industry trends," said Standard & Poor's credit analyst Michael
Altberg. "Key rating factors will include pro forma debt leverage
as well as the company's acquisition strategy over the
intermediate term," Mr. Altberg added.
WASHINGTON LOOP: Section 341(a) Meeting Rescheduled for May 26
--------------------------------------------------------------
The U.S. Trustee for Region 21 has rescheduled the meeting of
Washington Loop, LLC, a Limited Liability Company's creditors to
May 26, 2011, at 1:30 p.m. The meeting will be held at the United
States Courthouse Federal Building, 2110 First Street 2-101, Fort
Myers, Florida.
Punta Gorda, Florida-based Washington Loop, LLC, a Limited
Liability Company, filed for Chapter 11 bankruptcy protection on
March 31, 2011 (Bankr. M.D. Fla. Case No. 11-06053). Joel S.
Treuhaft, Esq., who has an office in Palm Harbor, Florida, serves
as the Debtor's bankruptcy counsel. According to its schedules,
the Debtor disclosed $45,098,259 in total assets and $19,654,992
in total debts as of the Petition Date.
The Debtor was dismissed from a prior Chapter 11 case, (Case No.
9:10-27981) by order of the Court entered on March 17, 2011. In
the Debtor's prior Chapter 11 case, the Debtor's Schedule F, as
filed under penalty of perjury, listed some 34 general unsecured
creditors totaling claims of $1,953,354.42. In that case, the
Debtor, under penalty of perjury listed all Schedule F debts and
non-contingent, liquidated, and undisputed.
The Debtor now declares, under penalty of perjury, that all
Schedule F debts are unliquidated. These schedules were filed no
less than two weeks after the dismissal of the prior Chapter 11
case, and only six weeks after the Debtor filed its Schedule F in
that case.
WASHINGTON LOOP: Proposes Palm Harbor as Bankruptcy Counsel
-----------------------------------------------------------
Washington Loop LLC seeks authority from the U.S. Bankruptcy Court
for the U.S. Bankruptcy Court for the Middle District of Florida
to employ Joel S. Treuhaft, Esq., and his firm Palm Harbor Law
Group P.A. as counsel.
The professional services Palm Harbor Law Group is to render are:
a. to give the Debtor legal advice with respect to its powers
and duties as Debtor and as Debtor-in Possession in the
continued operation of its business and management of its
property; if appropriate;
b. to prepare, on the behalf of your applicant, necessary
applications, answers, orders, reports, complaints, and
other legal papers and appear at hearings thereon; and
c. to perform all other legal services for Debtor as Debtor-
in-Possession.
The Debtor will employ Palm Harbor Law Group under a general
retainer agreement with fees to be awarded upon proper application
to the Court.
The Debtor asserts that Mr. Treuhaft and his firm is a
"disinterested person" and has no interest adverse to the Debtor's
estates.
The Court subsequently approved the Debtor's employment of Mr.
Treuhaft on an interim basis. A final hearing will be held at a
later date.
Punta Gorda, Florida-based Washington Loop, LLC, a Limited
Liability Company, filed for Chapter 11 bankruptcy protection on
March 31, 2011 (Bankr. M.D. Fla. Case No. 11-06053). Joel S.
Treuhaft, Esq., who has an office in Palm Harbor, Florida, serves
as the Debtor's bankruptcy counsel. According to its schedules,
the Debtor disclosed $45,098,259 in total assets and $19,654,992
in total debts as of the Petition Date.
The Debtor was dismissed from a prior Chapter 11 case, (Case No.
9:10-27981) by order of the Court entered on March 17, 2011. In
the Debtor's prior Chapter 11 case, the Debtor's Schedule F, as
filed under penalty of perjury, listed some 34 general unsecured
creditors totaling claims of $1,953,354.42. In that case, the
Debtor, under penalty of perjury listed all Schedule F debts and
non-contingent, liquidated, and undisputed.
The Debtor now declares, under penalty of perjury, that all
Schedule F debts are unliquidated. These schedules were filed no
less than two weeks after the dismissal of the prior Chapter 11
case, and only six weeks after the Debtor filed its Schedule F in
that case.
WOLF MOUNTAIN: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Wolf Mountain Resorts, L.C., a Utah limited liability
company
1847 Camino Palmero Street
Los Angeles, CA 90046
Bankruptcy Case No.: 11-30162
Chapter 11 Petition Date: May 9, 2011
Court: U.S. Bankruptcy Court
Central District of California (Los Angeles)
Judge: Peter Carroll
Debtor's Counsel: Mark S. Horoupian, Esq.
SULMEYERKUPETZ
333 S. Hope Street, 35th Floor
Los Angeles, CA 90071-1406
Tel: (213)-626-2311
E-mail: mhoroupian@sulmeyerlaw.com
Estimated Assets: $100,000,001 to $500,000,000
Estimated Debts: $100,000,001 to $500,000,000
The petition was signed by Kenneth W. Griswold, managing member.
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
ASC Utah, Inc. Breach of $55,000,000
P.O. Box 586 Contract Claim
Portland, ME 04112
DA Osguthorpe Family Partnership Breach of $40,000,000
Parleys Corporate Center, #115 Contract Claim
2455 Parleys Way
Salt Lake City, UT 84109
Park City West & Associates Claim for Breach $20,000,000
18300 Von Karman, Suite 850 of Contract
Irvine, CA 92715 Disputed
Summit County Property Tax $4,000,000
60 North Main Street Liability
Coalville, UT 84017
Fairstar Resources, Ltd. U3 Debt $1,250,000
136 Main Street
Osbourne Park WA 6017
Australia
Stephen Osguthorpe Breach of $1,200,000
Parleys Corporate Center, #115 Contract Claim
2455 Parleys Way and Services
Salt Lake City, UT 84109 Debt
Kirton & McConkie Legal Services $820,000
1800 Eagle Gate Tower
P.O. Box 45120
Salt Lake City, UT 84111
William Harris Loan $250,000
P.O. Box 233
Rosseau
ON POC 1JO
Canada
Robert Christe Loan $250,000
5390 Triangle Parkway
Norcross, GA 30092
Stone and Magnanini Arbitration Award $126,000
Sage Forensic Accounting Services Debt $105,560
Moore & Associates Services Debt $87,000
Distinctive Homes, Inc. Construction $79,755
Materials and Services
Mechanics Lien
Highlan Excavating, Inc. Construction $69,486
Materials and Services
Mechanics Lien
Vicky Fitlow Services Debt $55,000
Build, Inc. Construction $39,529
Materials and Services
Mechanics Lien
Grazo Electric, Inc. Construction $18,849
Materials and Services
Mechanics Lien
Allied Building Products Construction $13,444
Materials and Services
Consolidated Electrical Distrib. Construction $7,148
Materials and Services
Mechanics Lien
Troy Vincent Golf Course Designs Services Debt $6,247
YRC WORLDWIDE: Incurs $102.26 Million Net Loss in March 31 Qtr.
---------------------------------------------------------------
YRC Worldwide Inc. reported a net loss of $102.26 million on $1.12
billion of operating revenue for the three months ended March 31,
2011, compared with a net loss of $274.13 million on $987.14
million of operating revenue for the same period during the prior
year.
The Company's balance sheet at March 31, 2011, showed $2.62
billion in total assets, $2.91 billion in total liabilities and a
$287.64 million total shareholders' deficit.
A full-text copy of the press release announcing the financial
results is available for free at http://is.gd/ymXbGq
About YRC Worldwide
Headquartered in Overland Park, Kan., YRC Worldwide Inc. (NASDAQ:
YRCW) -- http://www.yrcw.com/-- is a holding company that through
wholly owned operating subsidiaries offers its customers a wide
range of transportation services. These services include global,
national and regional transportation as well as logistics.
The Company's balance sheet at Dec. 31, 2010, showed $2.63 billion
in total assets, $2.73 billion in total liabilities and $95.84
million in total shareholders' deficit.
KPMG LLP's audit reports on the consolidated financial statements
of YRC Worldwide Inc. and subsidiaries for 2009 and 2010 each
contain an explanatory paragraph that states that the Company has
experienced significant declines in operations, cash flows and
liquidity and these conditions raise substantial doubt about the
Company's ability to continue as a going concern.
* * *
In January 2011, Standard & Poor's Ratings Services placed its
'CCC-' corporate credit rating on YRC Worldwide Inc. (YRCW) on
CreditWatch developing. At the same time, S&P is withdrawing the
existing issue level ratings on Yellow Corp.'s senior unsecured
debt, given the negligible amounts outstanding.
"The ratings on Overland Park, Kan.-based YRCW reflect its near-
term liquidity challenges, meaningful off-balance-sheet contingent
obligations related to multiemployer pension plans, as well as its
participation in the competitive, capital-intensive, and cyclical
trucking industry," said Standard & Poor's credit analyst Anita
Ogbara. "YRCW's substantial (albeit deteriorating) market
position in the less-than-truckload (LTL) sector, which has high
barriers to entry, partially offsets these characteristics. We
characterize YRCW's business profile as weak, financial profile as
highly leveraged, and liquidity as weak."
As reported by the TCR on March 22, 2011, Moody's Investors
Service has lowered the Corporate Family Rating of YRC Worldwide,
Inc to Ca from Caa3. The rating outlook is negative. The rating
has been downgraded in response to the company's recent disclosure
of a "Milestone Failure" relating to requirements under its
amended credit agreement. Moody's believes that this development
increases the risk in YRC's efforts to conclude critical
refinancing that is instrumental to its ability to avoid
bankruptcy.
As reported by the TCR on May 5, 2011, Fitch Ratings downgraded
YRC's Issuer default rating to 'C' from 'CC'; Secured bank credit
facility rating downgraded to 'CCC/RR2' from 'B-/RR2'; and Senior
unsecured rating affirmed at 'C/RR6'. In addition, Fitch has
removed YRCW's ratings from Rating Watch Negative. Fitch said
that although it appears increasingly likely that the company will
successfully complete the restructuring, until the transactions
constituting the restructuring close, which is not anticipated
until late July 2011, there exists a potential for the transaction
to fail, in which case Fitch expects the company would be forced
to file for Chapter 11 bankruptcy protection.
ZAIS INVESTMENT: Organizational Meeting to Form Panel on May 17
---------------------------------------------------------------
Roberta DeAngelis, United States Trustee for Region 3, held an
organizational meeting on May 17, 2011, at 10:00 a.m. in the
bankruptcy case of Zais Investment Grade Limited VII. The meeting
will be held at United States Trustee's Office One, Newark Center,
14th Floor, Room 1401, Newark, NJ 07102.
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.
Zais Investment Grade Limited VII is based in Grand Cayman.
* Bankruptcy Filings Ease by 5.6% During First Quarter 2011
-----------------------------------------------------------
Dow Jones' DBR Small Cap reports that fewer business owners and
consumers sought bankruptcy protection throughout the first
quarter of 2011, leading to a 5.6% drop in filings, according to
recently released figures.
* U.S. Junk Default Rate Declines Again in April
------------------------------------------------
Bill Rochelle, columnist for Bloomberg bankruptcy news, reports
that the default rate on junk-rated debt in the U.S. declined at
the end of April to 2.6% from 2.9% in March, according to Moody's
Investors Service.
Mr. Rochelle notes that one year ago, the junk default rate was
9.5% in the U.S. Mr. Rochelle relates that there were no defaults
in April by companies with ratings from Moody's.
In April 2010, there were five defaults. The total defaults so
far this year is eight, Moody's said, Mr. Rochelle says.
Measured by dollar amount, the junk default rate was an even lower
1.4% at the end of April. In March, the dollar-weighted default
rate was 1.5%, Mr. Rochelle notes. A year ago, it was 9.5%.
Worldwide, the default rate on junk paper in April was 2.3%.
Moody's is predicting the default rate will decline to 1.5% by the
end of 2011, Mr. Rochelle adds.
* Market Absorbing High Volume Bank Facility Expirations
--------------------------------------------------------
Despite unprecedented volume of bank facility expirations in the
public finance sector in 2011, some 85% of facilities supporting
variable rate debt rated by Moody's Investors Service and due to
expire in the first quarter were extended or have been replaced by
new facilities provided by other banks, says the rating agency in
a new report.
Moody's cautions that, while the trend so far is a credit positive
for the municipal market, it is still early in the year, the peak
expiration months remain ahead, and a variety of risk factors and
challenges could still affect the market's ability to absorb all
of 2011's expiring facilities.
The large number of expirations this year, affecting approximately
$130 billion in variable rate demand bonds, results from the
massive VRDB issuance from the end of 2007 through late 2008.
This was due to the weakness and subsequent collapse of the
auction rate market, the credit deterioration of the bond
insurers, and broad-based market dislocation in late 2008. Moody's
rated some $83 billion in debt with facilities expiring in 2011.
"In general, issuers' needs were met despite a more limited number
of banks providing facilities," said Vice President-Senior Analyst
Robert Azrin, a co-author of the report, which is based on a
review of all Moody's-rated expirations in the first quarter. "In
addition to the sheer volume of expirations, they are happening
amidst the credit challenges faced by US public finance issuers
and an evolving global bank regulatory environment."
In the 15% of expiring bank facilities that were not extended or
replaced, the overwhelming majority of issuers refunded their debt
through new capital market transactions or direct loans from
banks, or redeemed bonds with their own liquidity. Only two
issuers' bank facilities expired without an alternative solution.
When this happens, the bank generally purchases all of the bonds
and the issuer must repay the bank on an accelerated schedule.
Moody's found that stronger issuers were able to negotiate longer
terms than lower-rated and unrated issuers, and that US banks
remain the dominant providers of support facilities in the U.S.
public finance sector.
"While issuers with weaker credit may have fewer options, orderly
resolution of bank facility expirations during the first quarter
is encouraging in light of the expiration bubble over the balance
of the year," said Moody's Vice President-Senior Credit Officer
Thomas Jacobs, a co-author of the report.
Moody's will monitor the process throughout 2011, and issue
quarterly update reports on how issuers and banks are faring in
the facility renewal process.
The report, "So Far So Good: Market Absorbing High Volume of U.S.
Public Finance Sector Bank Facility Expirations," is available at
http://www.moodys.com/
* Pepper Hamilton Taps Greenberg's Donald J. Detweiler
------------------------------------------------------
Samuel Howard at Bankruptcy Law360 reports that Pepper Hamilton
LLP said Thursday that it has given its corporate restructuring
and bankruptcy practice group in Delaware a major boost with the
addition of a Chapter 11 ace from Greenberg Traurig LLP.
According to Law360, Donald J. Detweiler, a decorated bankruptcy
attorney and litigator, joined Pepper Hamilton as a partner in the
firm's Wilmington, Del., office, where he will represent corporate
debtors, creditors and trustees in complex Chapter 11
reorganizations.
* Burleson LLP Appoints Two Partners in San Antonio
---------------------------------------------------
The energy law firm of Burleson LLP appointed two attorneys as
partners in its San Antonio office - Michael S. Browning and R.
Mark Payne.
Browning is board certified in oil, gas, and mineral law by the
Texas Board of Legal Specialization and has worked at Burleson's
San Antonio location since it opened in November of last year to
serve companies with an interest in the Eagle Ford Shale. Payne -
who, until now, has worked in the firm's Houston office - has a
broad background in energy law. He concentrates his practice in
oil and gas law, with an emphasis on title, unitization, pooling,
and leasing issues in the Eagle Ford Shale.
With these attorneys as partners - together with the 11 associates
and senior counsel in the San Antonio office - the office moved to
a new location on May 1st in the Weston Center. The firm has
leased nearly 10,000 square feet of office space on the seventh
floor of the building, which is located at 112 East Pecan Street.
"Both Payne and Browning have played a central role in our firm's
overall growth strategy. They have extensive experience in the
energy industry and have built solid reputations based on skill,
performance, and accountability," said Rick Burleson, managing
partner. "I'm proud of all they have accomplished so far in their
careers and couldn't be more pleased to have them as partners."
Browning previously served as managing counsel for the San Antonio
office. He has rendered numerous title opinions, including those
for drilling, division orders, leaseholds, and acquisitions, and
has advised clients on a range of issues, involving oil, gas, and
mineral titles; pooling and unitization; community leases;
undivided mineral ownership; and leasehold estates.
He has presented for the San Antonio Association of Professional
Landmen, an organization in which he is a member, and is involved
in the College of State Bar of Texas and the San Antonio Bar
Association Natural Resources Section.
Payne is licensed to practice in both Pennsylvania and Texas. In
addition to his experience as an attorney, he has trained
petroleum geologists for two Houston-based organizations,
overseeing the land department of an independent E&P company and
has served as an exploration manager, overseeing more than 50
exploratory wells.
He has taught oil and gas law and advanced civil litigation as an
adjunct professor at Houston Baptist University and the Texas
Wesleyan School of Law.
About Burleson LLP
Burleson LLP -- http://www.burlesonllp.com-- has earned a
reputation as the energy law firm the energy industry goes to. It
has grown significantly in recent years with over 75 attorneys and
offices in Houston, San Antonio, and Pittsburgh, Pennsylvania.
Serving clients in the upstream and midstream segments, the firm
provides counsel to oil and gas producers, transportation
companies, storage and processing businesses, and energy service
providers. Burleson's far-reaching experience includes mergers,
acquisitions, and divestitures; finance; private equity; venture
capital; securities; corporate governance and compliance; patents
and intellectual property; title review; real estate; litigation;
and bankruptcy/restructuring, land use, and environmental law.
* Chadbourne & Parke Says Abbe D. Lowell Rejoins Firm
-----------------------------------------------------
The international law firm of Chadbourne & Parke LLP disclosed
that nationally renowned, high-profile criminal and civil
litigator and trial attorney Abbe D. Lowell has rejoined the Firm
as a partner, splitting his time between Washington, D.C., and New
York.
Mr. Lowell returns to Chadbourne to head its White Collar Defense
and Special Litigation and Investigations Group, a position he
held from 2003 to 2007 and which he held at McDermott Will &
Emery's D.C. Office for the last several years.
Mr. Lowell is one of the nation's leading white collar defense and
trial attorneys. He has an impressive track record of
successfully representing companies and individuals in complex
investigations, criminal and civil trials, appeals, and
congressional and agency investigations across the United States.
His talents and accomplishments have been recognized by numerous
news organizations and publications, including The National Law
Journal, which just last month cited him as one of the "Most
Influential Lawyers" in the United States (a list of only 34
lawyers); The Washingtonian, which has named him one of its top
attorneys every year since 1986 when it first conducted this
survey; Chambers; Legal Times, which recognized him as one of the
best white collar lawyers in Washington; Best Lawyers in America
and Roll Call (a Capitol Hill newspaper), which has included him
as one of the attorneys whose business card people should keep in
their address books.
Within the past few months Mr. Lowell tried a 30 day federal
criminal trial in Puerto Rico, litigated an appeal in New York,
argued a freedom of information case in California, testified
before congressional committees about proposed changes to the
Espionage Act (and issues raised by the release of confidential
information by Wiki Leaks) as well as the Honest Services Criminal
Act (after the U.S. Supreme Court invalidated that statute), and
chaired a widely attended program at Washington's Newseum on the
First Amendment and criminal prosecutions.
"I am proud to welcome my friend and partner Abbe Lowell back to
Chadbourne," said Andrew A. Giaccia, the Firm's Managing Partner.
"Abbe is not only one of the best white collar and trial attorneys
in the United States, he is also a world class advisor to clients
facing legal, political, market or media controversies. We look
forward to having Abbe help us and our domestic and international
clients navigate today's increasingly complex worlds of white
collar, securities and business investigations and compliance,
especially when those clients face the possibility of trials and
high profile attention from the media."
"Sometimes law firms are hesitant to 'embrace' a partner who had
left," Mr. Giaccia added. "In Abbe's case, there was real
enthusiasm and not a moment of hesitation when this opportunity
arose."
For his part, Mr. Lowell also looks forward to rejoining
Chadbourne. "Chadbourne & Parke is a unique firm. It was among
the first to recognize that it could project its commitment to and
track record of excellent legal work internationally and yet
maintains a hard to find collegial setting where partners really
know and help one another," he said. "I am glad to be returning
to my friends and colleagues at Chadbourne and excited about
continuing my collaboration with my friend Andy Giaccia and many
other talented Chadbourne lawyers."
"Chadbourne is a firm that emphasizes its core competencies and
practice strengths throughout its 12 offices and maintains a
commitment to traditional values of making sure that its attorneys
are truly counselors to their clients. Its rich history and recent
successes make it an ideal place for my practice now and what I
expect it will be in the future," Mr. Lowell added.
Mr. Lowell has successfully tried dozens of high profile criminal
and civil jury cases throughout the country. The criminal cases
involved charges of public corruption, securities fraud, bank
fraud, bankruptcy fraud, mail and wire fraud, election law
violations, conspiracy and money laundering. His civil cases
included claims of breach of contract and fiduciary duty, unfair
trade and business practices, employment discrimination and civil
rights violations, securities fraud, negligence, and civil RICO
claims.
In addition to his representation of private clients, Mr. Lowell
was appointed Chief Investigative Minority Counsel to the U.S.
House of Representatives for the Impeachment of President Clinton;
Special Counselor to the U.N. High Commissioner for Human Rights
in Geneva; and Special Counsel to the U.S. House of
Representatives Ethics Committee. Prior to entering private
practice, he held various positions in the Department of Justice
including Special Assistant to the U.S. Attorney General and
Special Assistant U.S. Attorney in Washington, D.C.
Mr. Lowell has also briefed and argued over two dozen federal or
state court appeals, including arguments before the U.S. Supreme
Court. He represents and prepares individuals and businesses
called before grand juries and Congressional committees, or
summoned to provide other testimony as witnesses, and has
counseled numerous clients in state attorney general, office of
inspector general, and other federal agency inquiries.
Mr. Lowell provides advice on the law, ethics and strategy
concerning clients' dealings with the federal government. He has
also represented more than 35 elected officials or their campaign
committees, providing advice under the Federal Election Commission
Act, the Ethics in Government Act, and other similar rules and
regulations governing campaign contributions, filing of election
forms, filing of financial disclosure information and gifts.
He also teaches criminal procedure, evidence, and trial practice
at Columbia Law School and Georgetown Law School and has
contributed numerous articles to law reviews, legal newspapers and
daily newspapers.
About Chadbourne & Parke LLP
Chadbourne & Parke LLP -- http://www.chadbourne.com-- is an
international law firm headquartered in New York City, provides a
full range of legal services, including mergers and acquisitions,
securities, project finance, private funds, corporate finance,
venture capital and emerging companies, energy/renewable energy,
communications and technology, commercial and products liability
litigation, arbitration/IDR, securities litigation and regulatory
enforcement, special investigations and litigation, intellectual
property, antitrust, domestic and international tax, reinsurance
and insurance, environmental, real estate, bankruptcy and
financial restructuring, employment law and ERISA, trusts and
estates and government contract matters. Major geographical areas
of concentration include Russia, Central and Eastern Europe,
Turkey, the Middle East and Latin America.
* Cohen & Grigsby Appoints Director Jessica Horowitz
----------------------------------------------------
Cohen & Grigsby has added Jessica Horowitz as director in the
Florida Litigation Group, where she will focus on business and
commercial litigation. Horowitz is a member of the Florida and New
York State Bars, as well as the Collier County Bar Association,
Collier County Women's Bar Association and The Thomas S. Biggs
American Inn of Court, Naples, Florida Chapter.
"Jessica's background and range of expertise is impressive," said
Jason Korn, director and head of Florida litigation practice,
Cohen & Grigsby. "I'm pleased to welcome her to Cohen & Grigsby's
Bonita Springs office and am confident that her experience,
business acumen and drive will make her an ideal addition to our
litigation group."
Prior to joining Cohen & Grigsby, Horowitz served as an associate
at Bryant Law Office in Naples, Florida, where her areas of
litigation included general civil, commercial, business and
foreclosure defense. Previously, she served as an assistant
statewide prosecutor for the Florida Attorney General's Office in
the Office of Statewide Prosecution. She was responsible for
multi-jurisdictional crimes. Prior to working at the Attorney
General's Office, Horowitz was a supervising assistant district
attorney for the Rockland County District Attorney's Office, in
New City, New York. Horowitz obtained her Juris Doctorate (J.D.)
degree from the New York Law School. She is also a graduate of
the State University of New York at Albany, where she earned a
Bachelor of Arts Degree in political science with a minor in
business administration.
About Cohen & Grigsby
Established in 1981 in Pittsburgh, PA, Cohen & Grigsby --
http://www.cohenlaw.com/-- is a business law firm with
headquarters in Pittsburgh and an office in Bonita Springs, FL.
Cohen & Grigsby attorneys cultivate a culture of performance by
serving as business counselors as well as legal advisors to an
extensive list of clients that includes private and publicly held
businesses, nonprofits, multinational corporations, individuals
and emerging companies. The firm has more than 130 lawyers in
seven practice groups - Business & Tax, Labor & Employment,
Immigration/International Business, Intellectual Property,
Litigation, Bankruptcy & Creditors' Rights, and Estates & Trusts.
* Sherry C. Dickman Joins McDonald Hopkins Law New Miami Office
---------------------------------------------------------------
Sherry C. Dickman has joined the new Miami office of McDonald
Hopkins LLC, a business advisory and advocacy law firm with more
than 130 attorneys. Dickman is a seasoned litigator who
specializes in the areas of international litigation and
arbitration, commercial and financial services litigation, and
complex commercial litigation, with considerable trial experience
in state, federal and arbitration tribunals. Dickman has
substantial experience managing and coordinating complex foreign
and domestic multi-jurisdictional proceedings. She has also
represented numerous financial institutions and other financial
entities in commercial foreclosures, Uniform Commercial Code
actions, and real estate related litigation. Dickman's expertise
includes advising clients on a wide array of business matters
including financial fraud, contract, partnership and shareholder
disputes, construction litigation, non-compete covenants, and real
estate disputes. Before joining the Litigation Department at
McDonald Hopkins, Dickman was the principal of The Law Offices of
Sherry C. Dickman, P.A.
Dickman received her Bachelor of Arts degree, Phi Beta Kappa, from
the University of Connecticut, her J.D. from the University of
Virginia School of Law, and was Law Clerk for the Honorable C.
Roger Vinson, U.S. District Court, Northern District of Florida.
"I have known Sherry as an opposing lawyer and as a friend for
many years. She is widely respected in the legal community. Her
extensive experience in complex cross-border litigation and
business disputes will provide tremendous value to our clients,"
said Raquel A. "Rocky" Rodriguez, managing member of the firm's
new Miami office, which is located in the Southeast Financial
Center (formerly Wachovia), at 200 South Biscayne Boulevard. The
Miami office is the firm's second location in South Florida. John
T. Metzger is the managing member of the West Palm Beach office,
which opened in 2004 with four attorneys, and has grown to 11
today.
About McDonald Hopkins
McDonald Hopkins -- http://www.mcdonaldhopkins.com/--
is a business advisory and advocacy law firm focused on business
law, litigation, business restructuring and bankruptcy,
intellectual property, healthcare, and estate planning. The firm
has offices in Chicago, Cleveland, Columbus, Detroit, Miami and
West Palm Beach. The president of McDonald Hopkins is Carl J.
Grassi.
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
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/
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via
e-mail to conferences@bankrupt.com are encouraged.
*********
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 ***