/raid1/www/Hosts/bankrupt/TCR_Public/110621.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, June 21, 2011, Vol. 15, No. 170
Headlines
2 FAIR OAKS: Case Summary & 2 Largest Unsecured Creditors
ACORN ELSTON: Court Approves Weitzman Group as Appraiser
ACORN ELSTON: Can Continue Using Cash Collateral Until June 30
ACORN ELSTON: Wants Plan Filing Exclusivity Extended to July 15
AFFIRMATIVE INSURANCE: A.M. Best Downgrades FSR to 'C+'
ALL CITY INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors
ALLIED IRISH: Announces Results of Notes and PPS Purchase Offers
ALT HOTEL: Files Schedules of Assets and Liabilities
AMBAC FINANCIAL: OCI Taps Peterson to Manage AAC Account
AMBASSADORS INT'L: TAC Cruise OK'd to Purchase Assets for $39MM
APEX DIGITAL: Can Continue Using Cash Collateral Until Sept. 30
ARGUS FIRE & CASUALTY: A.M. Best Downgrades FSR to 'E'
ART ONE: Court Approves Barlow Garsek as Bankruptcy Counsel
ART ONE: Court OKs Appointment of Regis Realty as Property Manager
AVIS BUDGET: DBRS Says 'B' Issuer Rating Unaffected by Purchase
BEAZER HOMES: To Support Confirmation of South Edge's Plan
BIOFUELS POWER: Significant Losses Cue Going Concern Doubt
BIOLASE TECHNOLOGY: Settles Philips Electronics Litigation
BLOCKBUSTER CANADA: Hearing on Trademark Use on Thursday
C&D TECHNOLOGIES: Receives Going Private Proposal from Angelo
CANO PETROLEUM: Michael Ricketts Resigns from All Positions
CAPITAL HOME: Hearing on Further Cash Use Continued Until June 29
CAPMARK FINANCIAL: Taps Welcome Parking as Broker
CATASYS INC: CFO Peter Donato to Resign Effective July 1
CENTER STREET: Voluntary Chapter 11 Case Summary
CHRISTIAN BROTHERS: Seeks Broker to Sell Harlem High School
CIT GROUP: DBRS Assigns 'B' Rating on Series C Notes
COMPOSITE TECHNOLOGY: Posts $8.6-Mil. Fiscal 2nd Quarter Net Loss
CORIDA COMMUNICATIONS: Auction for CLEC Assets Set for July 1
CRESTRIDGE ESTATES: Case Summary & 8 Largest Unsecured Creditors
CROSS BORDER: Common Stock to Trade on OTCQX Under XBOR Symbol
DAVIS PETROLEUM: 5th Cir. Bars Family Trust Claims v. Buyer
DEEP DOWN: Dismisses KPMG LLP, Hires Hein & Associates
DIABETES AMERICA: Taps Porter Hedges as New Counsel
DK AGGREGATES: Plan Disclosures Hearing on July 21
DK AGGREGATES: Files Schedules of Assets And Liabilities
DUKE AND KING: Has Access to Cash Collateral Until Aug. 31
DUKE AND KING: Can Sell Group Two Restaurant to Cave Enterprises
DUKE AND KING: Wants Stipulation on Sale of Warren Capital OK'd
DYE'S WALK: Likely to Emerge Under New Ownership
EAGLE INDUSTRIES: Wants Until July 1 to Propose Chapter 11 Plan
EDIETS.COM INC: To Continue Listing on NASDAQ
EMPIRE TOWERS: Bank Now Controls Assets, Ch. 11 Case Converted
ENERGY TRANSFER: Fitch Ratings Affirms IDR at 'BB-'
ENVISA USA: Can Access HFSL Cash Collateral Until Sept. 7
EQUIPMENT ACQUISITION: Suit v. Luxor Hotel Goes to Trial
EVANS OIL: Has Access to Fifth Third's Cash Until September 2
EVANS OIL: Lease Decision Period Extended Until Aug. 29
EVANS OIL: Court Considers Fifth Third's Stay Relief on July 7
FANNIE MAE: Robert Herz Elected to Board of Directors
FNB UNITED: Inks $75MM Subscription Agreement with Investors
FOUR MOONS: Case Summary & 7 Largest Unsecured Creditors
FRAZER/EXTON: Wants to Access $1.89-Mil. Loan From RMC
FRE REAL ESTATE: Hires Regis Realty as Property Manager
FRIENDSHIP VILLAGE: Fitch Cuts Rating on Revenue Bonds to 'BB-'
FRISCO BOAT: Case Summary & 14 Largest Unsecured Creditors
GAMETECH INTERNATIONAL: Steve Smallman's Employment Ends
GAMETECH INTERNATIONAL: Delays Filing of May 1 Quarterly Report
GREAT ATLANTIC & PACIFIC: Hearing on New C&S Deal on Thursday
GRUBB & ELLIS: Reaches Definitive Pact for Sale of Alesco Assets
HAWAII BIOTECH: Exits Bankruptcy Protection
HEARUSA INC: Court Approves Berger Singerman as Bankruptcy Counsel
HEARUSA INC: Committee Taps Ehrenstein Charbonneau as Counsel
HEARUSA INC: Committee Taps Duff & Phelps as Financial Advisors
HEARUSA INC: Can Hire AlixPartners as Communication Consultants
HEARUSA INC: Bryan Cave to Handle Securities, Litigation Matters
HIGHVIEW POINT: Court Freezes $230M in Illarramendi Ponzi Scam
IMPERIAL CAPITAL: Plan Outline Denied Due to Absent Proposed Order
INCREDIBLE DAVE'S: Case Summary & 20 Largest Unsecured Creditors
INNKEEPERS USA: Plan Draws Objections, Hearing Thursday
JACKSON HEWITT: U.S. Trustee Appoints RR Donnelley to Committee
JETBLUE AIRWAYS: Files Form S-8; Registers 23MM Common Shares
JMH DEVELOPMENT: Voluntary Chapter 11 Case Summary
KT SPEARS: U.S. Trustee Unable to Form Committee
KURRANT MOBILE: Delays Report for Fiscal Yr. Ended Feb. 28
LAKE AT LAS VEGAS: Judge Dismisses Suits Filed by Bass Brothers
LANDAMERICA FIN'L: Court OKs $14 Million Ch. 11 Deal With SunTrust
LENOX 126: Section 341(a) Meeting Scheduled for June 24
LEVI STRAUSS: President and CEO John Anderson to Retire
MAGIC BRANDS: Deel LLC Has Confirmed Liquidating Plan
MARCAL PAPER: Postpetition Pension Liability Is Admin Expense
MARCAL PAPER: Pension Withdrawal Liability Prorated as Admin. Cost
MEDICAL CONNECTIONS: Effects a 1-for-10 Reverse Stock Split
MERUELO MADDUX: Judge to Approve Charleston Reorganization Plan
METAMORPHIX INC: Jeoffrey L. Burtch Appointed as Chapter 7 Trustee
MICHAELS STORES: Jennifer Robinson Appointed CAO and Controller
MICROBILT CORP: Chex Systems Wants Kwall Showers Employment Denied
MID-MOUNTAIN: Case Summary & 20 Largest Unsecured Creditors
MMRGLOBAL INC: Robert Lorsch Elected as Director
MOUNTAIN PROVINCE: Seven Directors Elected at Annual Meeting
MP-TECH AMERICA: Seeks to Sell Substantially All Assets for $22MM
NEXT 1 INTERACTIVE: Sherb & Co. Raises Going Concern Doubt
NO FEAR RETAIL: Committee Okayed to Tap Pachulski Stang as Counsel
NO FEAR RETAIL: SulmeyerKupetz Approved as Debtor's Counsel
NO FEAR RETAIL: Sports Direct May Seek to Take Over License
NORTH GENERAL: Chapter 11 Trustee Files Plan Modifications
NXT NUTRITIONALS: Files Amendment No. 2 to 2010 Annual Report
OVERLAND STORAGE: Six Directors Elected at Annual Meeting
FRIENDSHIP VILLAGE: Fitch Cuts Rating on Revenue Bonds to 'BB-'
PARKER CENTRAL: Given Further Interim Access to Cash Collateral
PEGASUS RURAL: Organizational Meeting to Form Panel on June 23
PERKINS AND MARIE: Filing Won't Affect Four South Dakota Locations
PERKINS & MARIE: Organizational Meeting to Form Panel on June 24
PLAINS END: Fitch Affirms 'B+' Rating on Subordinated Sec. Notes
POLI-GOLD LLC: Wants to Finalize Negotiations with Primary Parties
POWER CONTRACTING: Trustee Wants to Access Bank's Cash Collateral
POWER CONTRACTING: Trustee Has Until Aug. 8 to Complete Schedules
R & S ST. ROSE: Amends Schedules of Assets & Liabilities
RAY ANTHONY: Court Enters Order on Ameriserv Adequate Protection
REAL MEX: Names Edie Ames as New Chief Operating Officer
REOSTAR ENERGY: Revokes Registration of Common Stock
REVLON CONSUMER: Completes 2011 Credit Facility Refinancing
RIVER EAST PLAZA: Amends Plan to Specify Clawback Payment
SAIGON VILLAGE: Settles with East West, Seeks Dismissal of Case
SAINT VINCENTS: Bid to Dismiss Malpractice Suit Denied
SEQUENOM INC: Seven Directors Elected at Annual Meeting
SHAMROCK-SHAMROCK: Can Access Cash Collateral Thru June 23
SLEAD'S CONSTRUCTION: Case Summary & 20 Largest Unsec Creditors
SMART-TEK SOLUTIONS: Inks $5.50 Million Funding with La Jolla
SMITHFIELD FOODS: Fitch Rates New Secured Loan at 'BB+/RR1'
SOUTHERN UNION: Fitch Affirms 'BB' Junior Subordinated Rating
SPRINGFIELD LANDMARKS: Reaches Deal With Creditors to Repay Debt
SUNFLOWER/423 LP: Case Summary & 13 Largest Unsecured Creditors
SUNWEST MANAGEMENT: Resolves $1.9 Million Land Project Fight
SUSQUEHANNA AREA: Fitch Affirms 'BB+' Rating on $24-Mil. Bonds
SWISS CHALET: CPG/GS Seeks to Prohibit Cash Collateral Use
TAYLOR & BISHOP: Bridgeview Says Plan is Unconfirmable
TERRESTAR NETWORKS: Challenges Sprint's $104 Million Claim
TITTLE CHOICE: Files for Chapter 7 Bankruptcy Protection
TORTILLA INC: Synergy Bids for Two Garduno Restaurants
TOTAL CATERERS: Files for Chapter 11 Bankruptcy Protection
TOWNSENDS INC: Wants Plan Exclusivity Extended to Aug. 16
TRANS ENERGY: Reports $11.8-Mil. First Quarter Net Profit
TRANS-GULF: Tex. App. Ct. Rules on Bank Dispute With Guarantor
TRICO MARINE: Says Tennenbaum Can't Collect Payment Under Plan
TUBO DE PASTEJE: To Replace 2016 Notes With New Notes Under Plan
UNITED AUTO: A.M. Best Places 'C' FSR Under Review
UNITED SECURITY: A.M. Best Downgrades FSR to 'B'
UNIVERSAL AMERICAN: A.M. Best Affirms 'bb' Issuer Credit Rating
UPSTREAM WORLDWIDE: Amends 2008 Equity Incentive Plan
US AIRWAYS: Bankr. Court Disallows $60.5-Mil. Claim of Ex-Worker
US AIRWAYS: Court Grants Hyland Relief From Discharge Injunction
US AIRWAYS: Reports May 2011 Traffic Results
US AIRWAYS: Reaches Tentative Agreement With TWU Dispatchers
VIDEOTRON LTEE: DBRS Assigns 'BB' Rating on Sr. Unsecured Notes
VILLAGE AT LAKERIDGE: Magnolia Village Building Files Chapter 11
VIRGINIA MOBILE: Files For Chapter 7 Bankruptcy Protection
VITRO SAB: Bondholders Lose Skirmish on Involuntary Chapter 11
WAGSTAFF MINNESOTA: Wants to Hire A&M as Financial Advisor
WAGSTAFF MINNESOTA: Taps Epiq Bankruptcy as Administrative Agent
WAGSTAFF MINNESOTA: Has Final Approval to Cash Collateral Use
WAGSTAFF MINNESOTA: U.S. Trustee Forms Creditor's Panel
WASHINGTON MUTUAL: Aurelius Balks at Renewed Shareholder Probe
WASHINGTON MUTUAL: Execs. Buy Time With FDIC Settlement Offers
WATERSONG APARTMENTS: U.S. Trustee Unable to Form Committee
* 5th Circuit Permits Releases for 3rd Party Fraud
* Survey: U.K. Distressed Investors Expect More Opportunities
* Large Companies With Insolvent Balance Sheets
*********
2 FAIR OAKS: Case Summary & 2 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: 2 Fair Oaks Holdings LLC
650 Town Center Dr
Costa Mesa, CA 92626
Bankruptcy Case No.: 11-18324
Chapter 11 Petition Date: June 13, 2011
Court: United States Bankruptcy Court
Central District of California (Santa Ana)
Judge: Erithe A. Smith
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
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $0 to $50,000
A list of the Company's two largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/cacb11-18324.pdf
The petition was signed by Mark S. Smith, manager.
ACORN ELSTON: Court Approves Weitzman Group as Appraiser
--------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York to
has approved Acorn Elston, LLC 's application to employ Weitzman
Group, Inc. as appraiser.
Weitzman Group, will, among other things:
a. prepare self-contained appraisal report estimating the
current market value of Elson Plaza for use by the Debtor in
its bankruptcy proceedings.
b. provide testimony in connection with any appraisal report
filed in the Court in connection with the Debtor's
bankruptcy proceedings.
The Engagement Letter provides that the all-inclusive fee to
complete the appraisal is $9,500 "the appraisal fee"). Upon
retention of Weitzman, John B. Coleman paid a retainer ("the
retainer") in the amount of $7,500.
About Acorn Elston, LLC
New York City-based Acorn Elston, LLC, filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. 10-14807) on Sept. 11, 2010.
Cadwalader, Wickersham & Taft LLP was tapped to represent the
Debtor in the Chapter 11 case effective April 19, 2011, after
Kasowitz Benson Torres & Friedman withdrew as counsel. The
Debtor also tapped The Reznick Group as its accountant, and D.E.
Shaw Real Estate Adviser LLC as its financial advisor. The Debtor
disclosed $21,929,346 in assets and $16,488,389 in liabilities as
of the Chapter 11 filing.
The Court appointed C. Michelle Panovich as receiver with respect
to the Elston Plaza Shopping Center, and its rents, income and
proceeds.
ACORN ELSTON: Can Continue Using Cash Collateral Until June 30
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
entered, on June 14, 2011, a fourth interim order, granting Acorn
Elston, LLC, permission to continue using cash collateral of Road
Bay Investments, LLC, as successor-in-interest to Allstate Life
Insurance Company, nunc pro tunc, for the period from June 1,
2011, through the earliest to occur of (a) the entry by the Court
of an order terminating the Receiver's use of cash collateral; (b)
the entry by the Court of a final order granting to the Lender
relief from the automatic stay; and (c) June 30, 2011.
As reported in the TCR on Feb. 14, 2011, Road Bay contends that,
as of the Petition Date, it is owed by the Debtor $18.0 million
pursuant to a $15 million Mortgage Note, dated April 19, 2007.
The obligations of the Debtor under the Note are guaranteed by
John B. Coleman, the sole member of the Debtor.
As adequate protection for any diminution in value of Road Bay's
collateral, the Debtor will grant the lender perfected
postpetition security interests and superpriority administrative
claim status, subject to carve-out. As further adequate
protection, the receiver will provide adequate protection payments
to the lender in the form of (i) monthly payments (calculated at
the non-default contract rate of 5.93% on a principal sum of
$15.9 million) in the amount of $78,700.
About Acorn Elston, LLC
New York City-based Acorn Elston, LLC, owns the Elston Plaza
Shopping Center, a grocery-anchored retail shopping center in
Chicago, Illinois. The Company filed for Chapter 11 protection
(Bankr. S.D.N.Y. Case No. 10-14807) on Sept. 11, 2010.
Cadwalader, Wickersham & Taft LLP, in New York, was tapped to
represent the Debtor in the Chapter 11 case effective April 19,
2011, after Kasowitz Benson Torres & Friedman withdrew as counsel.
The Debtor also tapped The Reznick Group as its accountant, and
D.E. Shaw Real Estate Adviser LLC as its financial advisor. The
Debtor disclosed $21,929,346 in assets and $16,488,389 in
liabilities as of the Chapter 11 filing.
The Court appointed C. Michelle Panovich as receiver with respect
to the Elston Plaza Shopping Center, and its rents, income and
proceeds.
ACORN ELSTON: Wants Plan Filing Exclusivity Extended to July 15
---------------------------------------------------------------
Acorn Elston, LLC, asks the U.S. Bankruptcy Court for the Southern
District of New York to extend its exclusive filing period through
and including July 15, 2011, and its exclusive solicitation period
through and including Sept. 15, 2011, in each case without
prejudice to the right of the Debtor and other parties in interest
to seek further extensions of the exclusive periods for cause
shown.
This is the third amendment to Debtor's second motion for an order
extending its exclusive periods within which to file and solicit
acceptances of its Chapter 11 plan. The hearing on the motion has
been adjourned to June 30, 2011, at 10:00 a.m. The Debtor,
through counsel, tells the Court that since the adjournment of the
May 26, 2011 hearing (to consider the second exclusivity motion
and the amendments thereto), the Debtor has expended significant
time and effort in its defense of Road Bay's motion for relief
from the automatic stay while it has continued to diligently
explore and pursue alternatives that will form the basis for its
Chapter 11 plan -- including actively pursuing financing
prospects.
According to the Debtor, the brief extension of the exclusive
periods it is requesting will permit it to complete its review of
these alternatives and, in the near term, to propose a
confirmable, and hopefully consensual, Chapter 11 plan.
About Acorn Elston, LLC
New York City-based Acorn Elston, LLC, filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. 10-14807) on Sept. 11, 2010.
Cadwalader, Wickersham & Taft LLP, in New York, was tapped to
represent the Debtor in the Chapter 11 case effective April 19,
2011, after Kasowitz Benson Torres & Friedman withdrew as counsel.
The Debtor also tapped The Reznick Group as its accountant, and
D.E. Shaw Real Estate Adviser LLC as its financial advisor. The
Debtor disclosed $21,929,346 in assets and $16,488,389 in
liabilities as of the Chapter 11 filing.
The Court appointed C. Michelle Panovich as receiver with respect
to the Elston Plaza Shopping Center, and its rents, income and
proceeds.
AFFIRMATIVE INSURANCE: A.M. Best Downgrades FSR to 'C+'
-------------------------------------------------------
A.M. Best Co. has downgraded the financial strength rating to C+
(Marginal) from B- (Fair) and issuer credit ratings to "b-" from
"bb-" of Affirmative Insurance Group and its members. A.M. Best
also has downgraded the FSR to C (Weak) from B- (Fair) and the ICR
to "ccc" from "bb-" of Affirmative Insurance Company of Michigan
(Bingham Farms, MI). This company also has been removed from the
group.
Concurrently, A.M. Best has downgraded the ICR to "cc" from "ccc+"
of the parent company, Affirmative Insurance Holdings, Inc.
(headquartered in Addison, TX). The outlook for all ratings is
negative.
The downgrades are based on the group's continued weakening
capital position and unfavorable underwriting results. The
group's underwriting performance in recent years has been severely
impacted by increased losses mainly from competitive pricing,
higher than expected severity of automobile personal injury
protection claims and adverse reserve development. In addition,
internal controls over operations were lacking and greatly
contributed to the decline in the group's earnings and capital in
recent years. Furthermore, financial leverage at Affirmative has
increased due to loss of surplus through March 2011.
The concerns are partially offset by significant remedial actions
that were taken beginning in 2010, with the change in the group's
chief executive officer and chief actuary. Subsequently,
initiatives to improve operations and earnings have begun, which
includes discontinuing operations in Florida and Michigan,
cancelling unprofitable agents, increasing premium rates,
contributing capital to the group, improving underwriting and
internal controls and reducing expenses.
A.M. Best has removed AICMI from the group due to its voluntary
withdrawal from the Michigan non-standard auto market. As a
result, it is A.M. Best's opinion that AICMI no longer supports
the group's business strategy and will no longer be a material
factor in the group's overall earnings. AICMI's ratings were
downgraded due to its weak capitalization, poor gross underwriting
performance and below average investment returns.
The ratings also consider the elevated financial leverage of
Affirmative. Although non-regulated insurance subsidiaries
currently generate adequate cash flows to service debt
obligations, revenues generated from insurance premiums may be
adversely impacted by the decline in the production of the
regulated insurance subsidiaries. The holding company carries an
above average risk of default on its debt, which puts pressure on
the ratings of its insurance subsidiaries. However, the insurance
subsidiaries may not pay dividends without prior regulatory
approval due to their negative unassigned surplus positions.
The negative outlook reflects the organization's continued
negative trend in capitalization, operating performance and
financial leverage and the challenges management faces to make
significant lasting improvements given weak economic conditions
and challenging underwriting and investment markets.
The FSR has been downgraded to C+ (Marginal) from B- (Fair) and
the ICR to "b-" from "bb-" for Affirmative Insurance Group and its
following members:
-- Affirmative Insurance Company
-- Insura Property and Casualty Insurance Company, Inc.
-- USAgencies Casualty Insurance Company, Inc.
ALL CITY INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: All City Industries, Incorporated
166 New Highway
Amityville, NY 11701
Bankruptcy Case No.: 11-74214
Chapter 11 Petition Date: June 14, 2011
Court: United States Bankruptcy Court
Eastern District of New York (Central Islip)
Judge: Robert E. Grossman
Debtor's Counsel: Marc A. Pergament, Esq.
WEINBERG GROSS & PERGAMENT LLP
400 Garden City Plaza
Garden City, NY 11530
Tel: (516) 877-2424
E-mail: mpergament@wgplaw.com
Scheduled Assets: $599,368
Scheduled Debts: $1,749,774
A list of the Company's 20 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/nyeb11-74214.pdf
The petition was signed by Frank Alfiero, president.
ALLIED IRISH: Announces Results of Notes and PPS Purchase Offers
----------------------------------------------------------------
Allied Irish Banks, p.l.c., on May 13, 2011, announced that it was
inviting all holders of the Notes to (i) tender any and all of the
Notes for purchase by the Bank for cash, and (ii) consent to
certain modifications of the terms of the Notes.
The Bank also announced that it was inviting holders to tender any
and all of the Perpetual Preferred Securities for purchase by the
Bank for cash.
In addition on the same date, AIB G.P. No. 1 Limited announced
that it was inviting all holders of the PPS to consent to certain
modifications of the terms of the PPS.
The Offers were made upon the terms and subject to the conditions
contained in the tender and consent memorandum dated 13 May 2011.
In conjunction with the invitation to tender any and all of the
Notes or PPS, as applicable, each of the Bank and AIB GP invited
holders of each Series of Notes and PPS to consider, and, if
thought fit, pass, the relevant Extraordinary Resolution in
relation to certain modifications of the terms of each Series of
the Notes or PPS as further described in the Tender and Consent
Memorandum.
These are the results of the Purchase Offers:
Nominal Amount of Noted
Notes Description Accepted for Purchase
----------------- -----------------------
(1) GBP350,000,000 Subordinated
Callable Fixed/Floating Rate
Notes Due 2030 GBP145,000
(2) U.S.$400,000,000 Dated Callable
Step-Up Subordinated Notes due 2015 U.S.$38,359,000
(3) GBP500,000,000 Subordinated
Callable GBP125,000
(4) EUR500,000,000 Callable
Subordinated EUR49,930,000
(5) GBP368,253,000 12.5 per cent.
Subordinated Notes
due 25 June 2019 GBP41,103,000
(6) EUR868,518,000 12.5 per cent.
Subordinated Notes
due 25 June 2019 EUR588,498,000
(7) U.S.$177,096,000 10.75 per cent.
Subordinated
Notes due 2017 $93,510,000
(8) GBP1,096,645,000 11.50 per cent
Subordinated Notes due 2022 GBP384,294,000
(9) EUR200,000,000 Perpetual Subordinated
Callable Step-Up Notes EUR53,515,000
(10) GBP400,000,000 Perpetual Callable
Step-Up Subordinated Notes GBP58,558,000
(11) EUR500,000,000 7.50 per cent. Step-Up
Callable Perpetual Reserve Capital
Instruments EUR229,509,000
(12) U.S.$100,000,000 Subordinated
Primary Capital Perpetual Floating
Rate Notes $98,980,000
(13) AIB UK I LP EUR1,000,000,000 Fixed
Rate/Floating
Rate Guaranteed Non-voting Non-cumulative
Perpetual Preferred Securities EUR187,390,000
(14) AIB UK 2 LP EUR500,000,000 Fixed
Rate/Floating
Rate Guaranteed Non-voting Non-cumulative
Perpetual Preferred Securities EUR94,624,000
(15) AIB UK 3 LP GBP350,000,000 Fixed
Rate/Floating Rate Guaranteed
Non-voting Non-cumulative
Perpetual Preferred Securities GBP36,728,000
Payment of the Purchase Price in respect of Notes and PPS validly
tendered in the relevant Offer and accepted for purchase is
expected to be made on Friday, June 17, 2011.
A full-text copy of the filing is available for free at:
http://is.gd/zv3N0j
About Allied Irish Banks, p.l.c.
Allied Irish Banks, p.l.c. -- http://www.aibgroup.com/-- is a
major commercial bank based in Ireland. It has an extensive
branch network across the country, a head office in Dublin and a
capital markets operation based in the International Financial
Services Centre in Dublin. AIB also has retail and corporate
businesses in the UK, offices in Europe and a subsidiary company
in the Isle of Man and Jersey (Channel Islands).
Since the onset of the global and Irish financial crisis, AIB's
relationship with the Irish Government has changed significantly.
As at Dec. 31, 2010, the Government, through the National Pension
Reserve Fund Commission ("NPRFC"), held 49.9% of the ordinary
shares of the Company (the share of the voting rights at
shareholders' general meetings), 10,489,899,564 convertible non-
voting ("CNV") shares and 3.5 billion 2009 Preference Shares. On
April 8, 2011, the NPRFC converted the total outstanding amount of
CNV shares into 10,489,899,564 ordinary shares of AIB, thereby
increasing its holding to 92.8% of the ordinary share capital.
In addition to its shareholders' interests, the Government's
relationship with AIB is reflected through formal and informal
oversight by the Minister and the Department of Finance and the
Central Bank of Ireland, representation on the Board of Directors
(three non-executive directors are Government nominees),
participation in NAMA, and otherwise.
As reported by the TCR on May 31, 2011, KPMG, in Dublin, Ireland,
noted that there are a number of material economic, political and
market risks and uncertainties that impact the Irish banking
system, including the Company's continued ability to access
funding from the Eurosystem and the Irish Central Bank to meet its
liquidity requirements, that raise substantial doubt about the
Company's ability to continue as a going concern.
The Company reported a net loss of EUR10.16 billion on
EUR1.84 billion of interest income for 2010, compared with a net
loss of EUR2.33 billion on $2.87 billion of interest income for
2009.
The Company's balance sheet at Dec. 31, 2010, showed
EUR145.2 billion in total assets, EUR140.9 billion in total
liabilities, and stockholders' equity of EUR4.3 billion.
ALT HOTEL: Files Schedules of Assets and Liabilities
----------------------------------------------------
ALT Hotel, LLC filed with U.S. Bankruptcy Court for the Northern
District of Illinois its schedules of assets and liabilities,
disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $0
B. Personal Property $2,549,379
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $69,000,000
E. Creditors Holding
Unsecured Priority
Claims $244,805
F. Creditors Holding
Unsecured Non-priority
Claims $564,190
----------- -----------
TOTAL $2,549,379 $69,808,995
About ALT Hotel LLC
ALT Hotel LLC's sole asset is the Allerton Hotel located in the
"Magnificent Mile" area of Chicago. The Hotel is managed by Kokua
Hospitality, LLC pursuant to a Hotel Management Agreement, dated
Nov. 9, 2006. Kokua is the exclusive manager and operator of the
Hotel, and receives management fees for its services, with the
amount of such fees directly linked to the annual performance of
the Hotel. Hotel Allerton Mezz, LLC, is the sole member of ALT
Hotel.
ALT Hotel filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case
No. 11-19401) on May 5, 2011. Judge A. Benjamin Goldgar presides
over the case. Lawyers at Paul, Hastings, Janofsky & Walker LLP,
and Neal Wolf & Associates, LLC, both in Chicago, Illinois, serve
as bankruptcy counsel to the Debtor. In its petition, the Debtor
estimated $100 million to $500 million in assets and $50 million
to $100 million in debts. Affiliate PETRA Fund REIT Corp. sought
Chapter 11 protection (Bankr. S.D.N.Y. Case No. 10-15500) on Oct.
20, 2010.
AMBAC FINANCIAL: OCI Taps Peterson to Manage AAC Account
--------------------------------------------------------
The Commissioner of Insurance for the State of Wisconsin,
Theodore K. Nickel, acting as rehabilitator of the Segregated
Account of Ambac Assurance Corporation, which was placed into
rehabilitation on March 24, 2010, entered into a consulting
agreement with Roger A. Peterson pursuant to which Mr. Peterson
has been engaged as a consultant to administer the Segregated
Account in the capacity of Special Deputy Commissioner for the
Segregated Account effective June 2, 2011, according to a public
statement dated June 10, 2011.
Mr. Peterson will commence providing services as a consultant on
the later of July 1, 2011 or such date as the consulting
agreement will have been approved by the Dane County Circuit
Court.
Mr. Peterson, who is currently serving as the Deputy
Administrator of the Division of Regulation and Enforcement for
the Office of the Commissioner of Insurance for the State of
Wisconsin and Special Deputy Commissioner for the Segregated
Account, will resign from his position as the Deputy
Administrator at OCI. Under the terms of the consulting
agreement, Mr. Peterson, is required to perform the consulting
services on a full-time basis, which services will principally be
performed in New York at the offices of AAC. Mr. Peterson will
report to the Rehabilitator and will be subject to the authority
of the Rehabilitator.
Under the terms of the consulting agreement, Mr. Peterson will
have primary responsibility for oversight and strategic
management of the Segregated Account, including, among other
things, responsibility for developing business plans, goals and
priorities for the Segregated Account; managing the Segregated
Account's loss mitigation efforts; and oversight of reserving
processes, litigation strategies (including litigation related to
recoveries in respect of representation and warranty claims in
the residential mortgage-backed securities book of business) and
surplus note issuance and payments.
In carrying out his responsibilities under the consulting
agreement, Mr. Peterson will act for the benefit of policyholders
and will not take into account the interests of security holders
of Ambac Financial Group, Inc. or holders of preferred shares of
Ambac Assurance. Under the terms of the consulting agreement,
Mr. Peterson's compensation arrangements include a bonus if he
remains as a consultant for a specified period of time, but do
not include incentive increased payments related to the financial
outcome for policyholders or holders of Ambac Assurance
securities.
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.
AMBASSADORS INT'L: TAC Cruise OK'd to Purchase Assets for $39MM
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Ambassadors International Inc., et al., to sell its assets to TAC
Cruise, LLC, a wholly owned subsidiary of Anschutz Corporation.
As reported in the Troubled Company Reporter on May 20, 2011, a
subsidiary of billionaire Philip Anschutz's holdings company won a
bankruptcy auction to purchase the assets of the Debtors for
$39 million.
The indenture trustee is directed to distribute the proceeds of
the sale to the holders of the senior secured notes and to pay
fees and expenses in accordance with the terms of the second lien
indenture.
The United States, acting on behalf of the Maritime
Administration, an agency of the U.S. Department of
Transportation, objected to the motion explaining that the sale
attempts to permanently enjoin or release suits against non-
debtors, which is inappropriate for a sale order and otherwise not
allowed in a reorganization under Chapter 11.
ACE American Insurance Company, on behalf of itself and its
affiliated insurers and reinsurers, also objected stating that ACE
Policies are not assignable without ACE's consent, and ACE lacked
knowledge or information sufficient to make a decision whether to
consent to the assignment.
MARAD is represented by:
J. Christopher Kohn, Esq.
Ruth Harvey, Esq.
J. Taylor Mcconkie, Esq.
Commercial Litigation Branch
Civil Division
U.S Department of Justice
1100 L Street, N.W. No. 10002
Washington D.C. 20005
Tel: (202) 307-0244
Fax: (202) 307-0494
Ace American is represented by:
James S. Yoder, Esq.
824 N. Market Street, Suite 902
P.O. Box 709
Wilmington, DE 19899-0709
Tel: (302) 467-4524
Fax: (302) 467-4554
E-mail: yoderj@whiteandwilliams.com
Helen Heifets, Esq.
BAZELON LESS & FELDMAN, P.C.
1515 Market Street, Suite 700
Philadelphia, PA 19102
Tel: (215) 568-1155
Fax: (215) 568-9319
About Ambassadors International
Headquarters in Seattle, Washington, Ambassadors International,
Inc. (NASDAQ: AMIE) -- http://www.ambassadors.com/-- operates
Windstar Cruises, a three-ship fleet of luxury yachts that explore
the hidden harbors and secluded coves of the world's most sought-
after destinations. Carrying 148 to 312 guests, the luxurious
ships of Windstar cruise to nearly 50 nations, calling at 100
ports throughout Europe, the Caribbean and the Americas.
Ambassadors International Inc. and 11 affiliates sought Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 11-11002) on
April 1, 2011.
Kristopher M. Hansen, Esq.; Sayan Bhattacharyya, Esq.; Marianne
Mortimer, Esq.; and Matthew G. Garofalo, Esq., at Stroock &
Stroock & Lavan LLP, serve as the Debtors' bankruptcy counsel.
Imperial Capital, LLC, is the Debtors' financial advisor. Phase
Eleven Consultants, LLC, is the Debtors' claims and notice agent.
The Debtors tapped Bifferato Gentilotti LLC as Delaware counsel,
and Richards, Layton & Finger as bankruptcy co-counsel.
The Official Committee of Unsecured Creditors tapped Kelley
Drye & Warren LLP as its counsel, and Lowenstein Sandler PC as its
co-counsel.
The Debtors disclosed $86.4 million in total assets and
$87.3 million in total debts as of Dec. 31, 2010.
APEX DIGITAL: Can Continue Using Cash Collateral Until Sept. 30
---------------------------------------------------------------
Apex Digital, Inc., has obtained interim authorization from the
U.S. Bankruptcy Court for the Central District of California to
continue using cash collateral of secured creditor Avision
Technology Company Limited, as assignee of Kith Electronics
Limited, through and including Sept. 30, 2011.
The Debtor is authorized to use cash collateral in accordance with
a budget, subject to a permitted deviance of up to 10% of the
total expenses for any week with any unused portions to be carried
over into the following week on a line-item by line-item basis
only.
As adequate protection, Avision will be granted a replacement lien
on, and security interest in, any and all assets of Debtor, now
owned or hereinafter acquired. The replacement lien will not
extend to avoidance actions.
As further adequate protection, Avision will receive additional
adequate protection in the form of monthly payments of $5,000
each, which payments will be made to Avision on each of the
following dates: June 8, 2011, July 13, 2011, and Aug. 10, 2011.
About Apex Digital
Walnut, California-based Apex Digital, Inc., was a leading
producer and seller of consumer electronic products, including
high-definition LCD televisions, home entertainment media devices,
digital set top boxes and lighting products (e.g., solar powered
lights), which are carried and sold in hundreds of retail outlets
nationwide.
Apex Digital filed for Chapter 11 protection (Bankr. C.D. Calif.
Case No. 10-44406) on Aug. 17, 2010. Juliet Y. Oh, Esq., Lindley
L. Smith, Esq., Philip A. Gasteier, Esq., at Levene, Neale,
Bender, Rankin & Brill LLP, in Los Angeles, California, represent
the Debtor. In its schedules, the Debtor disclosed $12,782,708 in
assets and $27,118,168 in liabilities, as of the Petition Date.
ARGUS FIRE & CASUALTY: A.M. Best Downgrades FSR to 'E'
------------------------------------------------------
A.M. Best Co. has downgraded the financial strength rating to E
(Under Regulatory Supervision) from D (Poor) and issuer credit
rating to "rs" from "c" of Argus Fire & Casualty Insurance Company
(Argus) (North Miami Beach, FL).
These actions follow the Consent Order by the Florida Office of
Insurance Regulation on May 31, 2011, putting Argus under
Regulatory Supervision and ordering the cancellation of all in
force policies.
ART ONE: Court Approves Barlow Garsek as Bankruptcy Counsel
-----------------------------------------------------------
ART One Hickory Corporation is authorized by the U.S. Bankruptcy
Court for the Northern District of Texas to employ Barlow Garsek &
Simon LLP as bankruptcy counsel.
As reported in the Troubled Company Reporter on May 11, 2011,
Barlow Garsek will provide these services:
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, assured 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: Court OKs Appointment of Regis Realty as Property Manager
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas to
has approved ART One Hickory Corporation's application to employ
Regis Realty Prime, LLC d/b/a Regis Property management LLC as the
property manager and leasing agent for the Debtor's real property.
As reported in the Troubled Company Reporter on June 1, 2011, the
Debtor owns two four-story office buildings located on Valley
View Lane, in Farmer's Branch, Texas. The Debtor estimates that
One Hickory Centre and Two Hickory Centre are each worth
approximately $11,000,000, such that the property, in the
aggregate, is worth approximately $22,000,000. The Debtor is
actively marketing the property to lease up the vacant space and
improve cash flow.
The Debtor's total mortgage obligation to Cathay Bank is in the
principal amount of $18,027,362. The Debtor estimates that it
has approximately $3,972,637 in equity in the property.
Regis' compensation includes:
-- a property management fee of 3% of gross monthly
collections;
-- a construction management fee of 4.5% of the construction
cost, in the event that Regis supervises the construction of
tenant improvements;
-- a base commission rate of 3.5% for new leases and expansions
of existing leases, assuming no co-broker, Regis will also
be providing leasing services on a commission basis. If
there is a co-broker, the commission rate to Regis would be
2%, and co-brokers would be paid 4%. The commission rate
for lease renewals would be 2% to Regis, with or without a
co-broker, and 2% to the co-broker, if there is one.
The Debtor relates that the 3% management fee, 4.5% construction
management fee, and the 3.5% base commission rate on new and
expanded leases are customary in the industry, and thus,
reasonable.
To the best of the Debtor's knowledge, Regis is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
Regis maintains its offices at One Hickory Centre, 1800 Valley
View Lane, Suite 200, Dallas, Texas.
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 disclosed $24,770,573 in assets and
$19,558,705 in liabilities as of the Chapter 11 filing.
AVIS BUDGET: DBRS Says 'B' Issuer Rating Unaffected by Purchase
---------------------------------------------------------------
DBRS Inc. has commented that the ratings of Avis Budget Group,
Inc., including its Issuer Rating of B (high) and Senior Unsecured
Debt rating of "B", are unaffected following the Company's
announcement that it has agreed to acquire Avis Europe plc for the
cash purchase price of $1.0 billion. The trend on all ratings is
Stable.
DBRS sees the proposed transaction as a long-term positive for
Avis Budget that will further strengthen Avis Budget's solid
franchise. Specifically, the Avis Europe franchise includes
corporate-owned locations in Europe and licensed operations in
Africa, the Middle East and Asia. Given Avis Budget's existing
international operations in Australia, New Zealand, Latin America
and the Caribbean, this transaction further expands Avis Budget's
global presence including access to the faster growing emerging
markets like China. Avis Budget's earnings generation ability
will be bolstered, as the acquisition is expected to be earnings
accretive upon closing. Moreover, this transaction adds a level
of diversity to the revenue stream. Indeed, in 2010, 75% of Avis
Budget revenue was generated in Domestic Car Rental, 18% from
International operations and 7% from Truck Rental. Pro-forma,
Avis Budget's 2010 revenues would have been 57% Domestic Car
Rental, 37% International and 5% from Truck Rental. Furthermore,
earnings capacity will benefit from the estimated $30 million of
cost savings from synergies, which DBRS views as conservative and
attainable.
Avis Budget intends to fund the transaction with $400 million of
available cash, issuance of up to $250 million of equity and $350
million of incremental debt from either new issuance or existing
bank facilities. Given the proposed funding structure of the
transaction and Avis Europe's modest debt load, DBRS does not
anticipate noteworthy movement in Avis Budget's leverage metrics.
Nonetheless, should the final financing package for the
acquisition include a larger proportion of new debt issuance than
currently planned, ratings could come under negative pressure.
DBRS notes that leverage (corporate debt-to-adjusted EBITDA) has
been reduced over the last several years. Given the increased
earnings capacity gained from the acquisition, DBRS expects that
Avis Budget will continue its efforts to reduce leverage post-
acquisition.
In DBRS's opinion integration risks are low with this transaction
as the companies share branding and operate on the same technology
platform. Moreover, there is essentially no overlap of physical
locations or fleet. Furthermore, DBRS sees the improving industry
fundamentals, which include increasing rental demand and volumes,
solid pricing, and improved market-wide access to funding, as
producing a favorable operating environment which should benefit a
successful integration.
Moreover, in leaving the ratings unchanged, DBRS assumes that Avis
Budget successfully raises the equity, focuses on integrating Avis
Europe and will forgo acquiring Dollar Thrifty Automotive Group,
Inc. However, should Avis Budget recommence its pursuit of
acquiring DTAG while integrating Avis Europe, ratings would likely
come under negative pressure reflecting heightened integration
risks and the likely stretched balance sheet of the Company.
Assuming a successful execution of the proposed transaction, DBRS
will look for realization of the aforementioned benefits and
synergies. If Avis Budget realizes the benefits of the broadened
customer base gained through this acquisition, while sustaining
its strong global brand, and further strengthens the balance sheet
ratings could see upward ratings migration. Conversely, failure
to capture the anticipated uplift to earnings or to restore the
positive trajectory in leverage could result in negative ratings
pressure.
BEAZER HOMES: To Support Confirmation of South Edge's Plan
----------------------------------------------------------
Beazer Homes USA, Inc., and one of its subsidiaries became parties
to an agreement among the administrative agent for the lenders to
South Edge, LLC, certain of the lenders to South Edge, and certain
of the other South Edge members and their respective parent
companies effective June 10, 2011. The Chapter 11 trustee for
South Edge has expressed its consent to the agreement. Under the
agreement, each of the parties will use commercially reasonable
efforts to support confirmation of a consensual plan of
reorganization for South Edge, and to obtain bankruptcy court
approval of a disclosure statement that will accompany the Plan,
to obtain the requisite support of the South Edge lenders to the
Plan, and to consummate the Plan promptly after confirmation, in
each case by certain specified dates. Under the agreement, the
effective date of the Plan following its confirmation is to occur
on or before Nov. 30, 2011, though it may be extended depending on
the date of Plan confirmation.
No disclosure statement for the Plan has been approved by the
bankruptcy court at this time, and nothing herein should be
construed as a solicitation of any vote on the Plan by creditors
of or equity holders in South Edge.
Pursuant to the agreement, on the effective date of the Plan, the
Company would pay to the lenders an amount between approximately
$15.7 million and $17 million, depending on certain contingencies
including the extent to which infrastructure development funds
already pledged to the Administrative Agent can be applied to the
Participating Members' obligations as set forth under the proposed
Plan. In addition, the Company would be responsible for its pro
rata share of various fees, expenses and charges of the
administrative agent for the lenders, the lenders and the
Chapter 11 trustee, and to pay its share of certain allowed
general unsecured claims in the South Edge bankruptcy case. The
Company may also be responsible for a portion of certain
administrative expenses that arise as part of the Plan
confirmation process. As previously disclosed in the Company's
Form 10-Q as of March 31, 2011, the Company has accrued $17.2
million related to its estimated obligation under the South Edge
repayment guarantee.
If the Plan as proposed under the agreement becomes effective, the
Company anticipates that one of its subsidiaries would acquire its
share of the land owned by South Edge as a result of a bankruptcy
court-approved disposition of the land to a newly created entity
in which such subsidiary would expect to be a part owner and which
would satisfy or assume the respective liens of the Administrative
Agent and the lenders on the land. In addition, if the Plan
becomes effective, the Company anticipates that current litigation
between the Agent and the Participating Members would be resolved,
although lenders who do not consent to the Plan may assert certain
claims against the Company (which claims the Company vigorously
disputes).
The agreement is subject to bankruptcy court approval and may be
terminated by the Administrative Agent or the Participating
Members upon the occurrence of certain specified events, including
a failure to meet the specified dates on which the above-described
activities in support of the Plan are to occur.
About Beazer Homes
Beazer Homes USA, Inc. (NYSE: BZH) -- http://www.beazer.com/--
headquartered in Atlanta, is one of the country's 10 largest
single-family homebuilders with continuing operations in Arizona,
California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada,
New Jersey, New Mexico, North Carolina, Pennsylvania, South
Carolina, Tennessee, Texas, and Virginia. Beazer Homes is listed
on the New York Stock Exchange under the ticker symbol "BZH."
The Company's balance sheet at March 31, 2011, showed
$1.85 billion in total assets, $1.55 billion in total liabilities,
and $295.89 million in total stockholders' equity.
* * *
Beazer carries (i) a 'B-' issuer credit rating, with "stable"
outlook, from Standard & Poor's, (ii) 'Caa1' probability of
default and long term corporate family ratings from Moody's, and
(iii) 'B-' issuer default rating, with stable outlook, from Fitch
Ratings.
Fitch said in November 2010 that the ratings and Outlook for
Beazer reflect the company's healthy liquidity position, improved
capital structure as well as the challenges still facing the
housing market. Fitch expects existing home sales will decline
7.5% in 2010 and increase 6% in 2011.
S&P said that although Beazer's business and liquidity profiles
have improved, S&P doesn't anticipate raising its ratings on the
company over the next 12 months because S&P expects costs
associated with the company's heavy debt load will weigh on
profitability.
The 'Caa1' corporate family rating, Moody's said in November 2010,
reflects its expectation that Beazer has reduced costs
sufficiently that it will continue to reduce losses in fiscal
2011. The impairments and other charges are likely to be less
material going forward, given the company's improving gross margin
performance, stabilizing pricing environment, and increasing
absorptions. However, Moody's expectation is that Beazer's cash
flow performance will weaken in 2011, as the benefits of inventory
liquidation have largely played out. The ratings also reflect the
company's extended debt maturity profile, improved Moody's-
adjusted debt leverage, and increased net worth position.
BIOFUELS POWER: Significant Losses Cue Going Concern Doubt
----------------------------------------------------------
Biofuels Power Corporation filed on June 15, 2011, its annual
report on Form 10-K/A for the fiscal year ended Dec. 31, 2010.
Clay Thomas, P.C., in Houston, expressed substantial doubt about
the Company's ability to continue as a going concern. The
independent auditor noted that the Company has suffered
significant losses and will require additional capital to develop
its business until the Company either (1) achieves a level of
revenues adequate to generate sufficient cash flows from
operations; or (2) obtains additional financing necessary to
support its working capital requirements.
The Company reported a net loss of $2.1 million on $0 revenue for
2010, compared with a net loss of $4.1 million on $0 revenue for
2009.
The Company's balance sheet at Dec. 31, 2010, showed $2.4 million
in total assets, $5.6 million in total liabilities, and a
stockholders' deficit of $3.2 million.
A copy of the Form 10-K/A is available at http://is.gd/oBkYJB
Humble, Tex.-based Biofuels Power Corporation is pioneering the
use of biodiesel and renewable diesel to fuel small-scale
distributed electrical power generating plants that include
ancillary heating and cooling facilities and are located in close
proximity to the end-users they serve.
The Company is not engaged in the business of manufacturing
biodiesel and it only refines, blends and reprocesses biofuels for
use in its generating facilities.
The initial focus of the Company is on an eight-county region
surrounding Houston, Texas that is generally referred to as the
Houston-Galveston-Brazoria Eight Hour Ozone Non-Attainment Area.
BIOLASE TECHNOLOGY: Settles Philips Electronics Litigation
----------------------------------------------------------
BIOLASE Technology, Inc., reached a final settlement agreement
with Koninklijke Philips Electronics N.V. and Discus Dental LLC,
regarding the litigation that Discus brought against BIOLASE in
2010 (Discus was subsequently acquired by Philips).
In the litigation, Discus asserted claims of design patent
infringement, federal unfair competition, common law trademark
infringement, unfair competition, and violation of the California
Unfair Trade Practices Act. Discus claimed that BIOLASE's iLaseTM
personal laser infringed Discus' design patent, as well as trade
dress rights Discus claimed in its own dental lasers. All of
Discus' and Philips' claims against BIOLASE have been completely
dropped and dismissed in their entirety with prejudice.
Discus and Philips had sought damages, attorneys' fees, as well as
a permanent injunction barring BIOLASE from selling the iLase. As
part of the settlement, BIOLASE denied any and all such liability,
and will continue to be able to sell the iLase throughout the
world without interruption of any kind. As part of the
settlement, Philips will receive a nominal payment, most of which
will be paid by BIOLASE's insurance carrier.
Federico Pignatelli, Chairman and CEO, said, "We are very pleased
to have concluded this litigation, which arose during the tenure
of prior management. I believed it was an unnecessary distraction
to our current management team, whose efforts are solely focused
on growing BIOLASE. We are obviously happy with the outcome."
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 March 31, 2011, showed
$20.30 million in total assets, $15.97 million in total
liabilities, and $4.33 million in total stockholders' equity.
BDO USA, LLP, raised substantial doubt about the Company's ability
to continue as a going concern, following the 2010 financial
results. 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.
BLOCKBUSTER CANADA: Hearing on Trademark Use on Thursday
--------------------------------------------------------
Marie Beaudette, writing for Dow Jones' Daily Bankruptcy Review,
reports that Blockbuster Canada will ask the Manhattan bankruptcy
court on Thursday to block Dish Network Corp. from stopping it
from using the Blockbuster name. Blockbuster Canada said the loss
of the brand name would be "devastating" to its business. The
unit's receiver said the company's receivership proceedings in
Canada prevent Blockbuster U.S. from rejecting contracts that
would prevent the subsidiary from using the Blockbuster name in
the more than 400 stores it operates in 10 Canadian provinces.
About Blockbuster Canada
Blockbuster Canada Co., an indirect subsidiary of Blockbuster
Inc., has operated video rental stores in Canada using the
Blockbuster trademarks since 1990. It employs roughly 4,000
employees in more than 400 stores across 10 Canadian provinces.
Blockbuster Canada's corporate head office is located in
Etobicoke, Ontario.
Blockbuster Canada went into receivership in Canada on May 3,
2011. Grant Thornton Limited was appointed by the Ontario
Superior Court of Justice.
Michael Creber, on behalf of Grant Thornton Ltd., commenced a
Chapter 15 case for Blockbuster Canada (Bankr. S.D.N.Y. Case No.
11-12433) in Manhattan on May 20, 2011, to seek the U.S. court's
recognition of the receivership proceedings in Canada. Robert J.
Feinstein, Esq., at Pachulski Stang Ziehl & Jones LLP, serves as
counsel for Grant Thornton. Blockbuster Canada is estimated to
have $50 million to $100 million in assets and liabilities.
About Blockbuster Inc.
Blockbuster Inc., the movie rental chain with a library of
more than 125,000 titles, along with 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.
Martin A. Sosland, Esq., and Stephen Karotkin, Esq., at Weil,
Gotshal & Manges, serve as counsel to the U.S. 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. The Official
Committee of Unsecured Creditors retained Cooley LLP as its
counsel.
In April 2011, Blockbuster conducted a bankruptcy court-sanctioned
auction for all the assets. Dish Network Corp. won with an offer
having a gross value of $320 million.
C&D TECHNOLOGIES: Receives Going Private Proposal from Angelo
-------------------------------------------------------------
C&D Technologies, Inc. received a non-binding proposal for a going
private transaction from affiliates of Angelo, Gordon & Co., LP,
the holder of approximately 65% of the Company's common stock, at
$9.50 per share in cash.
The board of directors expects to form a special committee of
independent directors to consider the proposal. The committee
would retain independent financial advisors and legal counsel to
assist it in its work. The Company cautions its shareholders and
others considering trading in its securities that it has only
received a non-binding proposal and it has not yet been evaluated.
There can be no assurance that any definitive offer will be made,
that any agreement will be executed or that this or any other
transaction will be approved or consummated.
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Angelo, Gordon & Co., L.P., and its
affiliates disclosed that they beneficially own 9,857,984 shares
of common stock of representing 64.86% of the shares outstanding.
A full-text copy of the filing is available for free at:
http://is.gd/ku0uPA
About C&D Technologies
C&D Technologies, Inc., is a manufacturer, marketer and
distributor of electrical power storage systems for the standby
power storage market. The Company makes lead acid batteries and
standby power systems that integrate lead acid batteries with
other electronic components, which are used to provide backup or
standby power for electrical equipment in the event of power loss
from the primary power source.
The Company reported a net loss of $55.55 million on
$354.83 million of net sales for the fiscal year ended Jan. 31,
2011, compared with a net loss of $25.78 million on
$335.71 million of net sales during the prior fiscal year.
The Company's balance sheet at April 30, 2011, showed $253.20
million in total assets, $158.80 million in total liabilities and
$94.40 million in total equity.
C&D Technologies in December 2010 escaped a bankruptcy filing
after completing an out-of-court restructuring that reduced the
Company's total debt from approximately $175 million to
$50 million. The Company in September had entered into a
restructuring support agreement with noteholders to a
restructuring that will be effected through (i) an offer to
exchange the Company's outstanding notes for up to 95% of the
Company's common stock, or (ii) a prepackaged plan of
reorganization under Chapter 11 of the U.S. Bankruptcy Code, if
the exchange offer fails to get the requisite support. C&D
Technologies elected not to make a semi-annual interest
payment due on its 5.25% Convertible Senior Notes due 2025 on
Nov. 1, 2010.
CANO PETROLEUM: Michael Ricketts Resigns from All Positions
-----------------------------------------------------------
Cano Petroleum, Inc., announced that Michael J. Ricketts informed
Cano of his decision to resign from his positions as the Senior
Vice President and Chief Financial Officer of Cano and from all
other positions he holds with Cano or any of its subsidiaries,
effective as of the close of business on June 20, 2011. Mr.
Ricketts is resigning to accept a position at another company.
The Board of Directors of Cano believes that it is in the final
stages of its search for a Chief Financial Officer to succeed Mr.
Ricketts and expects to announce a successor in the near future.
About Cano Petroleum
Cano Petroleum, Inc., is an independent Texas-based energy
producer with properties in the mid-continent region of the United
States. Cano's primary focus is on increasing domestic production
from proven fields using enhanced recovery methods. Cano trades
on the NYSE Amex Stock Exchange under the ticker symbol CFW.
The Company's balance sheet at March 31, 2011, showed
$257.88 million in total assets, $137.10 million in total
liabilities, and $120.78 million in total stockholders' equity.
The Company reported a net loss of $11.5 million on $22.8 million
of revenue for fiscal year ended June 30, 2010, compared with a
net loss of $231,000 on $23.4 million of revenue for fiscal 2009.
The Company reported a net loss of $12.53 million on $18.62
million of total operating revenue for the nine months ended March
31, 2011, compared with a net loss of $11.77 million on $16.36
million of total operating revenue for the same period a year ago.
As reported by the Troubled Company Reporter on Sept. 28, 2010,
the Company said if it is unable to successfully execute one of
its strategic alternatives, restructure its existing indebtedness,
obtain further waivers or forbearance from its existing lenders or
otherwise raise significant additional capital, it is unlikely
that it will be able to meet its obligations as they become due
and to continue as a going concern. As a result, the Company will
likely file for bankruptcy or seek similar protection. Moreover,
it is possible that the Company's creditors may seek to initiate
involuntary bankruptcy proceedings against it or against one or
more of its subsidiaries, which would force it to make a defensive
voluntary filing of its own.
CAPITAL HOME: Hearing on Further Cash Use Continued Until June 29
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
has continued until June 29, 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 the cash collateral to fund its business operations,
postpetition.
As reported in the Troubled Company Reporter on March 22, 2011,
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.
CAPMARK FINANCIAL: Taps Welcome Parking as Broker
-------------------------------------------------
BankruptcyData.com reports that Capmark Financial Group filed with
the U.S. Bankruptcy Court a motion to retain Welcome Parking
Solutions (Contact: Brett Harwood) as broker and consultant for a
fee equal to the percentage of the gross proceeds received by
Capmark Financial Group from the transaction.
About Capmark Financial
Based in Horsham, Pennsylvania, Capmark Financial Group Inc. --
http://www.capmark.com/-- provides financial services to
investors in commercial real estate-related assets. Capmark has
three core businesses: lending and mortgage banking, investments
and funds management, and servicing. Capmark operates in North
America, Europe and Asia. Capmark has 1,000 employees located in
37 offices worldwide.
On Oct. 25, 2009, Capmark Financial and certain of its
subsidiaries filed voluntary petitions for relief under Chapter 11
(Bankr. D. Del. Lead Case No. 09-13684). Capmark disclosed assets
of US$20 billion against total debts of US$21 billion as of
June 30, 2009.
Capmark's financial advisors are Lazard Freres & Co. LLC and
Loughlin Meghji + Company. Capmark's bankruptcy counsel is Dewey
& LeBoeuf LLP. Richards, Layton & Finger, P.A., serves as local
counsel. Beekman Advisors, Inc., is serving as strategic advisor.
KPMG LLP is tax and accounting advisor. Epiq Bankruptcy
Solutions, LLC, is the claims and notice agent.
The Official Committee of Unsecured Creditors in Capmark Financial
Group Inc.'s cases tapped Kramer Levin Naftalis & Frankel LLP as
its counsel and JR Myriad LLC as its commercial real estate
business advisors. The Committee also retained Cutler Pickering
Hale and Dorr LLP as its attorneys for the special purpose of
providing legal services in connection with Federal Deposit
Insurance Corporation matters.
Protech Holdings C LLC, an affiliate of Capmark, filed for
Chapter 11 protection on July 29, 2010 (Bankr. D. Del. Case No.
10-12387). The Debtor estimated assets and debts in excess of
$1 billion as of the filing date.
Since filing for Chapter 11, Capmark completed three sales to
generate more than $1 billion in cash. Berkshire Hathaway Inc.
and Leucadia National Corp. bought most of the business for
$468 million.
In April 2011, Greenline Ventures LLC completed the acquisition of
the New Markets Tax Credit division of Capmark Financial Group
Inc. Since inception of the NMTC program, Capmark's NMTC division
has closed over $1.1 billion of NMTC investment funds and financed
over $2.5 billion of projects and businesses in low income
communities nationwide.
CATASYS INC: CFO Peter Donato to Resign Effective July 1
--------------------------------------------------------
Peter Donato, the principal and chief financial officer of
Catasys, Inc., informed the Company he was relocating his family
out of state, and therefore tendered his resignation to the
Company effective July 1, 2011.
On June 13, 2011, the Board of Directors of the Company appointed
Susan Etzel as the Company's Chief Financial Officer, Principal
Financial Officer and Principal Accounting Officer effective
July 1, 2011.
Ms. Etzel, 37, has served as the Company's Corporate Controller
since Feb. 28, 2011. Prior to joining the Company, Ms. Etzel
acted as the Controller of Clearant, Inc., a developer of pathogen
inactivation technology, from July 2005 until Feb. 28, 2011. Ms.
Etzel received a Bachelor of Business Economics with an emphasis
in Accounting from the University of California, Santa Barbara.
She is also a Certified Public Accountant.
There are no arrangements or understandings between Ms. Etzel and
any other person pursuant to which Ms. Etzel was appointed as
Chief Financial Officer and Principal Accounting Officer. There
are no transactions to which the Company is a party and in which
Ms. Etzel has a material interest that is required to be disclosed
under Item 404(a) of Regulation S-K. Ms. Etzel has no family
relations with any directors or executive officers of the Company.
About Hythiam, Inc.
Based in Los Angeles, Hythiam, Inc., n/k/a Catasys, Inc., is a
healthcare services management company, providing through its
Catasys(R) subsidiary specialized behavioral health management
services for substance abuse to health plans.
The Company reported a net loss of $19.99 million on $448,000 of
total revenues for the twelve months ended Dec. 31, 2010, compared
with a net loss of $9.15 million on $1.53 million of total
revenues during the prior year.
The Company's balance sheet at March 31, 2011, showed
$6.26 million in total assets, $10.11 million in total liabilities
and a $3.85 million total stockholders' deficit.
Rose, Snyder & Jacobs, in Encino, 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 negative cash flows from
operations during the year ended Dec. 31, 2010.
CENTER STREET: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Center Street, Ltd.
fka Kiblinger, Simmons & Wylie, LLP predecessor by merger
106 Cedar Drive
Grand Prairie, TX 75052
Bankruptcy Case No.: 11-43386
Chapter 11 Petition Date: June 13, 2011
Court: United States Bankruptcy Court
Northern District of Texas (Ft. Worth)
Judge: Russell F. Nelms
Debtor's Counsel: Howard Marc Spector, Esq.
SPECTOR & JOHNSON, PLLC
12770 Coit Road
Banner Place, Suite 1100
Dallas, TX 75251
Tel: (214) 365-5377
Fax: (214) 237-3380
E-mail: hspector@spectorjohnson.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 Coye Wylie, president and secretary of
Center Street Mgmt., Inc., general partner.
CHRISTIAN BROTHERS: Seeks Broker to Sell Harlem High School
-----------------------------------------------------------
Dow Jones' DBR Small Cap reports that Christian Brothers Institute
Inc. is requesting court permission to hire a real-estate broker
to sell one of the Catholic high schools it operates in New York
upon the school's closure.
About Christian Brothers' Institute
The Christian Brothers' Institute in New Rochelle, New York, is a
domestic not-for-profit 501(c)(3) corporation organized under Sec.
102(a)(5) of the New York Not-for-Profit Corporation Law. CBI was
formed to establish, conduct and support Catholic elementary and
secondary schools principally throughout New York State.
The Christian Brothers of Ireland, Inc., in Chicago, Illinois, is
a domestic not-for-profit 501(c)(3) corporation organized under
the Not-for-Profit Corporation Law of the State of Illinois. CBOI
was formed to establish, conduct and support Catholic elementary
and secondary schools principally throughout the State of
Illinois, as well as other spiritual and temporal affairs of the
former Brother Rice Province of the Congregation of Christian
Brothers.
CBI and CBOI depend upon grants and donations to fund a portion of
their operating expenses.
The Christian Brothers' Institute and The Christian Brothers of
Ireland filed for Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case Nos. 11-22820 and 11-22821) on April 28, 2011.
Scott S. Markowitz, Esq., at Tarter Krinsky & Drogin LLP, serves
as the Debtors' bankruptcy counsel. CBI estimated its assets at
$50 million to $100 million and debts at $1 million to
$10 million. CBOI estimated its assets at $500,000 to $1 million
and debts at $1 million to $10 million.
CIT GROUP: DBRS Assigns 'B' Rating on Series C Notes
----------------------------------------------------
DBRS Inc. has assigned its B (high) rating to the new Series C
Notes issued by CIT Group Inc.
The new Series C Notes were issued as a result of the Company's
completed exchange offer for outstanding Series A Notes. The new
Series C Notes have maturities in 2015, 2016, and 2017. The trend
on the ratings is Positive.
The rating considers the secured position of the Series C Notes,
which benefit from a second lien on substantially all U.S. assets
of CIT that are not otherwise pledged to secure the borrowings of
special purpose entities and the equity of foreign subsidiaries.
Moreover, the Series C Notes rank pari passu with the existing
second lien Series A Notes and Series C Notes. Given the
aforementioned, the rating reflects DBRS's view that recovery on
the Series C Notes would be less than the first lien notes but
greater than the unsecured debt.
The rating action does not impact the issuer rating of CIT, which
remains B (high), with a Positive trend.
COMPOSITE TECHNOLOGY: Posts $8.6-Mil. Fiscal 2nd Quarter Net Loss
-----------------------------------------------------------------
Composite Technology Corporation filed its quarterly report on
Form 10-Q, reporting a net loss of $8.6 million on $1.4 million of
product revenue for the three months ended March 31, 2011,
compared with a net loss of $3.2 million on $4.3 million of
product revenues for the three months ended March 31, 2010.
The Company reported a net loss of $11.8 million on $6.6 million
of product revenues for the six months ended March 31, 2011,
compared with a net loss of $10.9 million on $7.0 million of
product revenues for the six months ended March 31, 2011.
The Company's balance sheet at March 31, 2011, showed
$19.0 million in total assets, $54.4 million in total liabilities,
and a stockholders' deficit of $35.4 million.
A copy of the Form 10-Q is available at http://is.gd/g09gjT
About Composite Technology
Headquartered in Irvine, California, Composite Technology
Corporation - http://www.compositetechcorp.com/-- develops,
produces, markets and sells energy efficient and renewable energy
products for the electrical utility industry. As of March 31,
2011, the Company has one business segment: CTC Cable Corporation.
CTC Cable produces and sells ACCC(R) conductor products and
related ACCC(R) hardware products. ACCC(R) conductor has been
sold commercially since 2005 and is currently marketed worldwide
to electrical utilities, transmission companies and transmission
design/engineering firms.
Composite Technology filed for Chapter 11 bankruptcy (Bankr. C.D.
Calif. Case No. 11-15058) on April 10, 2011, with Judge Mark S.
Wallace presiding over the case. The Debtor's bankruptcy case was
reassigned to Judge Scott C. Clarkson on April 13, 2011. The
Debtor estimated assets at $10 million to $50 million and
$1 million to $10 million in debts as of the Chapter 11 filing.
CTC Cable Corporation (Bankr. C.D. Calif. Case No. 11-15059) and
Stribog, Inc. (Bankr. C.D. Calif. Case No. 11-15065) also filed
for Chapter 11 protection.
The cases are jointly administered, with Composite Technology as
the lead case. Paul J. Couchot, Esq., at Winthrop Couchot PC,
serves as the Debtors' bankruptcy counsel. The McIntosh Group and
Marsch Fischman & Breyfogle LLP serve as special intellectual
property counsel.
CORIDA COMMUNICATIONS: Auction for CLEC Assets Set for July 1
-------------------------------------------------------------
The Ho. Karen S. Jennemann of the U.S. Bankruptcy Court for the
Middle District of Florida approved bidding procedures to govern
the sale of assets of Cordia Communications Corp. and its debtor-
affiliates, free and clear of liens, claims and encumbrances. The
sale is subject to higher and better offers.
The assets up for sale includes competitive local exchange carrier
operations of Cordia Communications Corp., CLEC operations of My
Tel Co., CLEC operations of Northstar, and CLEC operations of CCC
Virginia. The assets include all hardware, software, customer
contracts, intellectual property rights, callcenter operations in
the U.S. and technical and regulatory licenses used by the
Debtors.
The Debtors said they have reached a sale agreement with Birch
Communications Inc., which agrees to acquire the CLEC Assets for
$8 million. As the stalking horse bidder, Birch will purchase the
assets absent higher and better offers. In the event it is outbid
at the auction, Birch will receive a break-up fee, consisting of
the reimbursement of the purchaser for actual, reasonably incurred
costs and expenses in an amount not to exceed $200,000.
All bids for the Debtors' assets must be filed no later than 5:00
p.m., on June 29, 2011. An auction will take place on July 1,
2011, at 1:00 p.m., Eastern Time at the offices of Development
Specialists Inc., Southeast Financial Center, 200 South Biscayne
Boulevard, Suite 1818, Miami, Florida, followed by a hearing on
July 14, 2011, at 11:00 a.m. Objections, if any, are due July 8,
2011.
About Cordia Communications
Cordia Corporation -- through its operating subsidiaries, Cordia
Communications Corp., CordiaIP Corp., My Tel Co, Inc., Northstar
Telecom, Inc., Cordia Prepaid Corp., and Cordia International
Corp. -- offers business, residential, and wholesale customers
local and long distance telecommunications services in more than
60 countries utilizing traditional wireline and Voice over
Internet Protocol -- VoIP -- technologies.
CCC currently holds licenses to operate in 28 states throughout
the contiguous United States, and CCCVA is licensed in Virginia.
Winter Garden, Florida-based Cordia Communications Corp. filed for
Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 11-
06493) on May 1, 2011. The Debtor estimated its assets and debts
at $10 million to $50 million.
Affiliates Cordia Communications Corp. of Virginia (Bankr. M.D.
Fla. Case No. 11-06494), et al. simultaneously sought Chapter 11
protection.
The cases are jointly administered, with Cordia Communications
Corp. as lead case.
Scott L. Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP,
serves as the Debtors' bankruptcy counsel. The Debtors tapped
Source Capital Group, Inc. as their investment banker, Trustee
Services, Inc., as claims, notice, and balloting agent, and
Development Specialists, Inc., to provide restructuring and
management services, including the appointment of Joseph J.
Luzinski as Chief Restructuring Officer.
CRESTRIDGE ESTATES: Case Summary & 8 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Crestridge Estates LLC
650 Town Center Dr, Suite 1200
Costa Mesa, CA 92626
Bankruptcy Case No.: 11-18338
Chapter 11 Petition Date: June 13, 2011
Court: United States Bankruptcy Court
Central District of California (Santa Ana)
Judge: Robert N. Kwan
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
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $0 to $50,000
A list of the Company's eight largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/cacb11-18338.pdf
The petition was signed by Mark Smith, manager.
CROSS BORDER: Common Stock to Trade on OTCQX Under XBOR Symbol
--------------------------------------------------------------
Beginning on June 15, 2011, the common stock of Cross Border
Resources, Inc., will be traded on the OTC market's highest tier,
OTCQX U.S. Premier, under its current ticker symbol XBOR.
Investors can find current financial disclosure and Real-Time
Level 2 quotes for the Company's common stock at www.otcqx.com and
www.otcmarkets.com. C.K. Cooper & Company will serve as the
Company's Designated Advisor for Disclosure on OTCQX and is
responsible for providing guidance on OTCQX requirements.
About Cross Border Resources
Cross Border Resources, Inc. f/k/a Doral Energy Corp. (OTC BB:
DRLY) -- http://www.DoralEnergy.com/-- is a licensed oil and gas
operator in the state of New Mexico. The Company is headquartered
in Midland, Texas.
The Company's balance sheet at March 31, 2011, showed $24.91
million in total assets, $11.98 million in total liabilities and
$12.93 million in total stockholders' equity.
As reported in the Troubled Company Reporter on Nov. 23, 2010,
MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt
about Doral Energy's ability to continue as a going concern
following the Company's results for the fiscal year ended July 31,
2010. The independent auditors noted that the Company has
negative working capital and recurring losses from operations.
DAVIS PETROLEUM: 5th Cir. Bars Family Trust Claims v. Buyer
-----------------------------------------------------------
Shortly after the renowned patriarch of a family-owned oil and gas
drilling business passed away, the business began to suffer
financial reverses, and the family began to squabble. A potential
sale of the business was thwarted when one of the adult children
filed suit against her mother and siblings. Amid legal trouble
and a severe cash shortage, the company finally found refuge in a
prepackaged Chapter 11 case in which the debtor entities' assets
were sold to an investor consortium including Gregg Davis, one of
the sons. The greatly expedited Chapter 11 case was filed and
resolved by a confirmation order within less than a week. The
family members' equity interests received about $31 million.
Represented by a coterie of sophisticated expert legal counsel,
all interested parties exchanged releases in the plan of
reorganization. The Nancy Sue Davis Trust did not vote for the
Chapter 11 plan, but it also declined to register opposition. No
one appealed the confirmation order, which became final.
Six months later, the Davis Trust filed a motion to revoke the
confirmation order for fraud. The Davis Trust alleged that it had
recently become aware that Gregg Davis, former advisers to the
family including Willem Mesdag, and various representatives of the
purchasing entities had engaged in fraud that enabled them to buy
out the family's interests far below market value. The bankruptcy
court issued a lengthy opinion concluding that no fraud had
occurred. On appeal, the district court expressed some misgivings
that the motion had been disposed of by summary judgment. The
court then elected to vacate the bankruptcy court's ruling while
holding the appeal moot on the ground that the reorganization plan
had been substantially consummated. The Trust declined to appeal.
Instead, the Trust filed a motion with the district court seeking
leave not to revoke the confirmation, but to pursue damage claims
against Evercore, its affiliate buyers, and the individuals --
including Gregg Davis and Willem Mesdag -- who it claims
perpetrated fraud against the family members' equity interests.
The district court referred the motion to the bankruptcy court
because the motion required an interpretation of the Plan's
releases and exculpatory clause and the scope of its injunctive
relief. The bankruptcy judge rejected the motion as an
impermissible "collateral attack" on the Plan and confirmation
order. The Trust appealed the decision to the district court, but
on the appellees' motion the Fifth Circuit certified the appeal
for direct review.
The principal question posed on appeal is whether the Plan and
confirmation order bar the assertion of fraud claims against the
defendants-appellees.
In a six-page decision, the Fifth Circuit affirmed the bankruptcy
court judgment denying the Trust's motion to pursue its claims
against the Appellees. The Fifth Circuit held that all family
members, including the Trust, were continuously represented by
sophisticated counsel and could have elected zealously to pursue
their remedies under Chapter 11 rather than succumb to the hasty
process that occurred.
Circuit Judge Edith H. Jones, who wrote the opinion, noted that
"Bankruptcy cases must be and often are resolved in haste to
prevent the continuing depletion of a debtor's value and assets.
Haste, however, creates the danger that inadequate supervision of
deals, valuations, and participants in the process may occur,
leaving a fertile field for fraud."
But Judge Jones pointed out that, "in the context of reorganizing
a family-owned company all of whose shareholders had access to
sophisticated financial and legal assistance, and where the
releases and exculpatory provisions in the Plan and confirmation
order were essential to a reorganization that no party appealed,
those provisions bar the Trust's current claims."
The appellate case is Evercore Capital Partners II, L.L.C.; Gregg
Davis; Red Mountain Capital Partners, L.L.C.; Willem Mesdag;
Sankaty Advisors, L.L.C., Appellees, v. Nancy Sue Davis Trust,
Appellant, No. 09-41294 (5th Cir.). A copy of the Fifth Circuit's
decision dated June 16, 2011, is available at http://is.gd/qKLVVM
from Leagle.com. The Fifth Circuit panel consists of Judge Jones
and Circuit Judges and E. Grady Jolly and Emilio M. Garza.
About Davis Petroleum Corp.
Headquartered in Houston, Texas, Davis Petroleum Corp. --
http://www.davispetroleumcorp.com/-- was an oil and gas
exploration and production company operating in the onshore and
intermediate-deep water Gulf of Mexico, Texas, Louisiana, Oklahoma
and the Rocky Mountain region. The Company filed for chapter 11
protection (Bankr. S.D. Tex. Case No. 06-20152) on March 7, 2006.
Other affiliated entities that filed for bankruptcy are Davis
Offshore, L.P.; Davis Petroleum Pipeline, L.L.C.; and Davis
Offshore Holdings, L.L.C. Rhett G. Campbell, Esq., Diana Merrill
Woodman, Esq., and Matthew Ray Reed, Esq., at Thompson & Knight
LLP, and Nathaniel Peter Holzer, Esq., at Jordan Hyden Womble
Culbreth & Holzer PC, represent the Debtors. When the Debtors
filed for protection from their creditors, they estimated assets
and debts of $50 million to $100 million.
In March 2006, the Court confirmed a reorganization plan for Davis
Petroleum. The plan was based on a sale of the Company for
$150 million to a private equity group led by Evercore Capital
Partners LP, which also includes the company's senior management,
Red Mountain Capital Partners, and Sankaty Advisors, an affiliate
of Bain Capital.
DEEP DOWN: Dismisses KPMG LLP, Hires Hein & Associates
------------------------------------------------------
KPMG LLP was appointed as the independent registered public
accounting firm for Deep Down, Inc., on July 8, 2010. Upon the
recommendation of the Audit Committee of the Board of Directors,
the Company dismissed KPMG as principal independent registered
public accounting firm for the Company on June 8, 2011.
The audit report of KPMG on the Company's financial statements as
of and for the year ended Dec. 31, 2010, did not contain an
adverse opinion or disclaimer of opinion, and such report was not
qualified or modified as to uncertainty, audit scope or accounting
principle.
During the year ended Dec. 31, 2010, and through June 8, 2011,
there were no disagreements with KPMG on any matter of accounting
principles or practices, financial statement disclosure, or
auditing scope or procedure which disagreements, if not resolved
to the satisfaction of KPMG, would have caused it to make
reference to the subject matter of the disagreements in connection
with its reports on the financial statements for such year.
During the year ended Dec. 31, 2010, and through June 8, 2011,
there were no reportable events.
As noted in Item 9A of the Company's Form 10-K for the year ended
Dec. 31, 2010, the Company reported the following material
weaknesses in its internal control over financial reporting:
-- The Company did not maintain effective monitoring controls.
Specifically, the Company did not have sufficient personnel
with an appropriate level of technical accounting knowledge,
experience, and training who could execute appropriate
monitoring and review controls, particularly in situations
where transactions were complex or non-routine.
-- The Company did not have adequate controls to provide
reasonable assurance that revenue was recorded in accordance
with GAAP. Specifically, the Company did not have
appropriately designed or effectively operating management
review controls performed by individuals with appropriate
technical expertise to ensure that the accounting for
contracts under the percentage-of-completion method was
appropriate. This material weakness resulted in material
errors that caused a restatement of the Company's interim
financial statements for the fiscal periods ended March 31,
2010, June 30, 2010, and Sept. 30, 2010.
-- The Company did not have an adequate internal control
designed to prevent or detect and correct erroneous
information in the Company's project cost accounting
application. This material weakness resulted in material
errors that caused a restatement of the Company's interim
financial statements for the fiscal periods ended March 31,
2010, June 30, 2010, and Sept. 30, 2010.
The Audit Committee discussed the subject matter of this
reportable event with KPMG. The Company has authorized KPMG to
respond fully to the inquiries made by the new independent
registered public accounting firm concerning the subject matter of
this reportable event.
The Audit Committee engaged Hein & Associates LLP to serve as the
Company's principal independent registered public accounting firm
as of June 14, 2011.
During the Company's most recent fiscal year and any subsequent
interim period prior to engaging Hein, the Company has not
consulted with Hein regarding the application of accounting
principles to a specific transaction, either completed or
proposed, or the type of audit opinion that might be rendered on
the Company's financial statements, nor did Hein provide advice to
the Company, either written or oral, that was an important factor
considered by the Company in reaching a decision as to an
accounting, auditing or financial reporting issue. Further,
during the Company's most recent fiscal year and any subsequent
interim period prior to engaging Hein, the Company has not
consulted with Hein on any matter that was the subject of a
disagreement, as that term is defined in Item 304(a)(1)(iv) of
Regulation S-K and the related instructions to Item 304 of
Regulation S-K, or a reportable event, as that term is defined in
Item 304(a)(1)(v) of Regulation S-K.
About Deep Down
Houston, Tex.-based Deep Down, Inc. --
http://www.deepdowncorp.com/-- is an oilfield services company
specializing in complex deepwater and ultra-deepwater oil
production distribution system support services, serving the
worldwide offshore exploration and production industry.
The Company reported a net loss of $17.41 million on $42.47
million of revenue for the year ended Dec. 31, 2010, compared with
a net loss of $16.78 million on $28.81 million of revenue during
the prior year.
The Company's balance sheet at March 31, 2011, showed $30.08
million in total assets, $8.62 million in total liabilities and
$21.46 million in total stockholders' equity.
During the Company's fiscal years ended Dec. 31, 2010 and 2009,
the Company has supplemented the financing of its capital needs
through a combination of debt and equity financings. Most
significant in this regard has been the Company's debt facility
the Company has maintained with Whitney National Bank. The
Company's loans outstanding under the Amended and Restated Credit
Agreement with Whitney become due on April 15, 2012. The Company
will need to raise additional debt or equity capital or
renegotiate the existing debt prior to such date. The Company is
currently in discussions with several lenders who have expressed
interest in refinancing its debt. The Company's plan is to
refinance the outstanding indebtedness under the Restated Credit
Agreement or seek terms with Whitney that will provide an
extension of such Restated Credit Agreement along with additional
liquidity. However, the Company cannot provide any assurance that
any financing will be available to it on acceptable terms or at
all. If the Company is unable to raise additional capital or
renegotiate its existing debt, this would have a material adverse
impact on the Company's business or would raise substantial doubt
about its ability to continue as a going concern. In addition, as
of Dec. 31, 2010, the Company was not in compliance with the
financial covenants under the Restated Credit Agreement. On
March 25, 2011 the Company obtained a waiver for these covenants
as of Dec. 31, 2010.
DIABETES AMERICA: Taps Porter Hedges as New Counsel
---------------------------------------------------
Diabetes America, Inc., asks the U.S. Bankruptcy Court for the
Southern District of Texas for authority to employ Porter Hedges
LLP as counsel. PH will assume responsibility for all aspects of
this case from Looper Reed & McGraw P.C.
Porter Hedges' services as counsel are:
-- Advising the Debtor with respect to its powers and duties;
-- Advising the Debtor with respect to the rights and remedies
of the estate's creditors and other parties in interest;
-- Conducting appropriate examinations of witnesses, claimants
and otherparties in interest;
-- Preparing all additional appropriate pleadings and other
legal instruments required to be filed in this case;
-- Representing the Debtor in all proceedings before the Court
and in any other judicial or administrative proceeding in
which the rights of the Debtor or the estate may be
affected;
-- Advising the Debtor in connection with the formulation,
solicitation, confirmation and consummation of any plan or
plan of reorganization which the Debtor may propose; and
-- Performing any other legal services which may be appropriate
In connection with the continued operation of the Debtor's
business.
The firm will charge the Debtor based on the hourly rates of its
professionals:
Designations Hourly Rates
------------ ------------
Partners $375 - $600
Counsel $400 - $425
Associates/Staff Attorneys $225 - $375
Legal Assistants/Law Clerks $135 - $195
The Debtor assures the Court that the firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
About Diabetes America
Houston, Texas-based Diabetes America, Inc., fka Diabetes Centers
of America, Inc., operates a network of 17 centrally-managed
medical clinics that provide comprehensive outpatient medical
care, primarily to patients with Type 1, Type 2 and Gestational
Diabetes. The company's clinics are located in Texas and Houston
and generate 51,000 patient visits per year.
Diabetes America filed for Chapter 11 bankruptcy protection
(Bankr. S.D. Tex. Case No. 10-41521) on Dec. 21, 2010. H. Joseph
Acosta, Esq., and Micheal W. Bishop, Esq., at Looper Reed &
McGraw, P.C., in Dallas, represent the Debtor as bankruptcy
counsel. The Debtor estimated its assets and debts at $10 million
to $50 million as of the Petition Date.
Judy A. Robbins, the U.S. Trustee for Region 7, appointed three
members to the Official Committee of Unsecured Creditors in
Diabetes America's Chapter 11 case. The Committee has tapped
Butler, Snow, O'Mara, Stevens & Cannada, PLLC, as its counsel.
DK AGGREGATES: Plan Disclosures Hearing on July 21
--------------------------------------------------
A hearing is set for July 21, 2011, at 1:30 p.m., to consider the
approval of the disclosure statement explaining the proposed plan
of reorganization of DK Aggregates LLC.
The hearing will be held in the United States Bankruptcy
Courtroom, 7th Floor, Dan M. Russell, Jr., U.S. Courthouse, 2012
15th Street in Gulfport, Mississippi.
Objections, if any, to the adequacy of the information in the
Disclosure Statement are due July 14, 2011,
The Plan proposes to pay 100% to all claimholders except that the
percentage recovery of holders of damage suits or torts is limited
to policy limits under the proposed plan.
Among others, unsecured creditors, owed $1.75 million, will
receive 10 equal payments, first commencing four months after the
plan's effective date, and ever six months thereafter, until all
claims haven been satisfied. Secured claim of Hancock Bank will
be payable under a 20-year amortization with interest accruing at
6% per annum, with monthly payments of $10,542. Monthly payments
will commence on the 20th of the months immediately after the
plan's effective date. On the 60th month after the effective
date, the loan will mature and will be due and payable in full.
The adequate protection payments presently being made under order
of the Court will cease on the effective date.
A full-text copy of the disclosure statement is available for free
at http://bankrupt.com/misc/DKAGGREGATES_DS.pdf
A full-text copy of the Chapter 11 plan is available for free
at http://bankrupt.com/misc/DKAGGREGATES_Plan.pdf
Pearlington, Mississippi-based DK Aggregates LLC filed for Chapter
11 bankruptcy protection (Bankr. S.D. Miss. Case No. 10-51823) on
Aug. 9, 2010. Robert Alan Byrd, Esq., at Byrd & Wiser, assists
the Debtor in its restructuring effort. The Debtor disclosed
assets of $17,025,695 and liabilities of $7,004,953 as of the
petition date.
DK AGGREGATES: Files Schedules of Assets And Liabilities
--------------------------------------------------------
DK Aggregates LLC filed with the U.S. Bankruptcy Court for the
Southern District of Mississippi it schedules of assets and
liabilities, disclosing
Name of Schedule Assets Liabilities
---------------- ------------ -----------
A. Real Property $14,000,000
B. Personal Property 4,529,695
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $5,100,000
E. Creditors Holding
Unsecured Priority
Claims 200,000
F. Creditors Holding
Unsecured Non-priority
Claims 1,814,925
------------ ------------
TOTAL $18,529,695 $7,114,925
A full-text copy of the Schedules of Assets and Debts is available
for free at http://bankrupt.com/misc/DKAGGREGATES_schedules.pdf
Pearlington, Mississippi-based DK Aggregates LLC filed for Chapter
11 bankruptcy protection (Bankr. S.D. Miss. Case No. 10-51823) on
Aug. 9, 2010. Robert Alan Byrd, Esq., at Byrd & Wiser, assists
the Debtor in its restructuring effort. The Debtor disclosed
assets of $17,025,695 and liabilities of $7,004,953 as of the
petition date.
DUKE AND KING: Has Access to Cash Collateral Until Aug. 31
----------------------------------------------------------
The Gregory F. Kishel of the U.S. Bankruptcy Court for the
District of Minnesota approved a stipulation with Bank of America,
N.A., authorizing Duke and King Acquisition Corp., et al., to use
unencumbered cash or cash generated by the operation of their
businesses until Aug. 31, 2011.
As reported in the Troubled Company Reporter on Feb. 24, the
Debtors assert that Bank of America, N.A., Warren Capital
Corporation, the Coca-Cola Company, Duke Manufacturing Company
and/or Meadowbrook Meat Company, Inc., have a lien on certain non-
cash assets of the Debtors but have no lien on the their cash.
BofA and MBM assert that the Debtors' cash is cash collateral, the
use of which requires their consent or an order of the Court. The
Court makes no finding on the issue for purposes of its Final
Order. Rather, to the extent the Debtors' cash is cash
collateral, the Debtors' use of such cash is authorized and
approved on a final basis.
The Debtors may use such cash: (a) to pay all of the expenses set
forth in a budget up to amounts budgeted, provided, however, that
the Debtors may, if necessary, exceed certain respective line item
amounts in the budget by the following variances: payroll (7%),
food vendors (excluding bread) (10%), A/P ordinary course
checks (7%), rent (7%), sales taxes (10%), employee benefits (7%),
real estate/property taxes (7%), A/P ordinary course - wires (7%)
and professional fees (10%); and (b) to make those payments that
the Debtors are authorized to make pursuant to other orders of the
Court, including allowed amounts due to or on account of
prepetition wages and employee benefits, taxes and fees, critical
vendors, and customer obligations. Any unused portion of the
variance will carry over to the following week.
As adequate protection for the Debtors' use of BofA's and MBM's
alleged collateral, (a) BofA and MBM are granted replacement liens
in the Debtors' postpetition assets of the same type and nature as
those assets subject to the prepetition liens of BofA and
MBM.
About Duke and King Acquisition Corp.
Burnsville, Minnesota-based Duke and King Acquisition Corp., dba
Burger King, was formed in November 2006, to acquire 88 Burger
King franchise restaurants from the Nath Companies. Duke and
King, together with affiliates, filed for Chapter 11 bankruptcy
protection (Bankr. D. Minn. Lead Case No. 10-38652) on Dec. 4,
2010. Duke and King estimated its assets and debts at $10 million
to $50 million.
Clinton E. Cutler, Esq., and Douglas W. Kassebaum, Esq., at
Fredrikson & Byron, P.A., serve as the Debtors' bankruptcy
counsel. Mastodon Ventures, Inc., acts as the Debtors' investment
banker. Maslon Edelman Borman & Brand, LLP serves as local
counsel and Aaron L. Hammer, Esq., and Richard S. Lauter, Esq., at
Freeborn & Peters LLP, in Chicago, is the bankruptcy counsel to
the Official Committee Of Unsecured Creditors. Mesirow Financial
Consulting, LLC, serves as financial advisors of the Committee.
DUKE AND KING: Can Sell Group Two Restaurant to Cave Enterprises
----------------------------------------------------------------
The Gregory F. Kishel of the U.S. Bankruptcy Bankruptcy Court for
the District of Minnesota approved a stipulation, authorized Duke
and King Acquisition Corp., et al., to sell the Group Two
Restaurant to Cave Enterprises Operations, LLC.
The Debtor will sell all of the Debtor's right, title and interest
in, to and under the following properties, assets and rights owned
by the Debtors located at or used solely in connection with the
Group Two, free and clear of all Liens, liabilities, claims,
interests and encumbrances, other than permitted liens.
The aggregate consideration for the acquired assets will be (a)
the sum of (i) $10,000 in cash, plus (ii) the amount of on-hand
cash and the on-hand inventory; and (b) the assumption of the
liabilities.
Burnsville, Minnesota-based Duke and King Acquisition Corp., dba
Burger King, was formed in November 2006, to acquire 88 Burger
King franchise restaurants from the Nath Companies. Duke and
King, together with affiliates, filed for Chapter 11 bankruptcy
protection (Bankr. D. Minn. Lead Case No. 10-38652) on Dec. 4,
2010. Duke and King estimated its assets and debts at $10 million
to $50 million.
Clinton E. Cutler, Esq., and Douglas W. Kassebaum, Esq., at
Fredrikson & Byron, P.A., serve as the Debtors' bankruptcy
counsel. Mastodon Ventures, Inc., acts as the Debtors' investment
banker. Maslon Edelman Borman & Brand, LLP serves as local
counsel and Aaron L. Hammer, Esq., and Richard S. Lauter, Esq., at
Freeborn & Peters LLP, in Chicago, is the bankruptcy counsel to
the Official Committee Of Unsecured Creditors. Mesirow Financial
Consulting, LLC, serves as financial advisors of the Committee.
DUKE AND KING: Wants Stipulation on Sale of Warren Capital OK'd
---------------------------------------------------------------
Duke and King Acquisition Corp., et al., asks the U.S. Bankruptcy
Bankruptcy Court for the District of Minnesota to approved a
stipulation with Warren Capital relating to the sale of assets
securing obligations to Warren.
Pursuant to an Equipment Financing Agreement No. 2009-17A, Warren
advanced $138,392 to finance the Debtors' purchase of 15 Nieco
Broilers and associated parts and components, and the Debtors
granted Warren Capital an Article 9 security interest in the
collateral.
Warren Capital believes that the value of the collateral exceeds
the amount owed under the terms of the agreements.
The stipulation provides that:
-- Warren consent to the sale of the collateral securing
repayment of the amounts owed under the Agreements free and
clear of Warren Capital's liens and security interests;
-- Upon the closing of the sale of the Debtors' assets, out of
the proceeds therefrom, the Debtors will forthwith, but no
later than two days after the closing, deposit or cause to
be deposited into a segregated account at U.S. Bank National
Association the sum of $373,357. The Debtors will thereupon
deliver to counsel for Warren Capital copies of the deposit
agreement and the deposit receipt which evidences the
Deposit.
-- The Deposit will remain segregated and will not be
commingled with other funds pending further order of the
Bankruptcy Court, and will be held for the specific purpose
of satisfying in whole or in part Warren Capital's secured
claims under the agreements.
-- To the extent that the value of Warren's liens and security
interests exceeds the value of the Warren Capital collateral
to be sold by the Debtors, then Warren Capital will be
entitled to recover all principal, post petition interest,
and attorneys' fees out of the proceeds from the Deposit and
other proceeds from the sale of the Debtors' assets.
Warren Capital is represented by:
James M. Jorissen, Esq.
Andrew J. Budish, , Esq.
100 South Fifth Street, Suite 2500
Minneapolis, MN 55402
Tel: (612) 332-1030
About Duke and King Acquisition Corp.
Burnsville, Minnesota-based Duke and King Acquisition Corp., dba
Burger King, was formed in November 2006, to acquire 88 Burger
King franchise restaurants from the Nath Companies. Duke and
King, together with affiliates, filed for Chapter 11 bankruptcy
protection (Bankr. D. Minn. Lead Case No. 10-38652) on Dec. 4,
2010. Duke and King estimated its assets and debts at $10 million
to $50 million.
Clinton E. Cutler, Esq., and Douglas W. Kassebaum, Esq., at
Fredrikson & Byron, P.A., serve as the Debtors' bankruptcy
counsel. Mastodon Ventures, Inc., acts as the Debtors' investment
banker. Maslon Edelman Borman & Brand, LLP serves as local
counsel and Aaron L. Hammer, Esq., and Richard S. Lauter, Esq., at
Freeborn & Peters LLP, in Chicago, is the bankruptcy counsel to
the Official Committee Of Unsecured Creditors. Mesirow Financial
Consulting, LLC, serves as financial advisors of the Committee.
DYE'S WALK: Likely to Emerge Under New Ownership
------------------------------------------------
Scott Olson at the Indianapolis Business Journal reports that
Dye's Walk Country Club on South State Road 135 in Greenwood filed
Chapter 11, listing debt of $4.6 million and assets of $2.2
million. The Company said it is likely to emerge under new
ownership.
According to the report, the largest debtor is Indiana Bank &
Trust in Indianapolis, which is owed $2.5 million. The current
owner Brian Benham also owes $135,700 in federal taxes and $27,259
in property taxes, in addition to $31,470 in employee wages that
weren't paid in May.
Based in Greenwood, Indiana, Dye's Walk Country Club LLC fka Royal
Oak Country Club filed for Chapter 11 bankruptcy protection
(Bankr. S.D. Ind. Case No. 11-07272) on June 7, 2011. Judge
Anthony J. Metz, III, presides over the case. Jeffrey M. Hester,
Esq., at Tucker Hester LLC, represents the Debtor. The Debtor
disclosed $2,278,779 in assets and $4,650,943 in debts.
EAGLE INDUSTRIES: Wants Until July 1 to Propose Chapter 11 Plan
---------------------------------------------------------------
Eagle Industries, LLC, and Eagle Transportation, LLC, ask the U.S.
Bankruptcy Court for the Western District of Kentucky to extended
their exclusive periods to file and solicit acceptances for the
proposed chapter 11 plan until July 1, 2011, and Aug. 16,
respectively.
This is the second exclusivity extension requested by the Debtors.
The Debtors need more time to engage in discussions with the
Creditors Committee and other parties-in-interest, which the
Debtors hope will increase creditor confidence in the Debtors'
plan to be formulated.
Citizens First Bank and the Committee consent to the extension
proposed.
The Debtors are represented by:
David M. Cantor, Esq.
Tyler R. Yeager, Esq.
SEILLER WATERMAN LLC
Meidinger Tower - 22nd Floor
462 S. Fourth Street
Louisville, Kentucky 40202
Tel: (502) 584-7400
Fax: (502) 583-2100
E-mail: cantor@derbycitylaw.com
yeager@derbycitylaw.com
About Eagle Industries
Bowling Green, Kentucky-based Eagle Industries LLC filed for
Chapter 11 bankruptcy protection (Bankr. W.D. Ky. Case No. 10-
11636) on Oct. 27, 2010. David M. Cantor, Esq., at Seiller
Waterman LLC, represents the Debtor. The Debtor estimated assets
and debts at $10 million to $50 million.
Peter M. Gannott, Esq., at Alber Crafton, P.S.C., in Louisville,
Ky., represents the official unsecured creditors' committee.
EDIETS.COM INC: To Continue Listing on NASDAQ
---------------------------------------------
eDiets.com, Inc., received notification from The NASDAQ Stock
Market LLC that NASDAQ has determined to continue the listing of
the Company's securities on The NASDAQ Capital Market based upon
the Company's compliance with the terms of the NASDAQ Listing
Qualifications Panel decision dated March 9, 2011, by evidencing
full compliance with the minimum bid price requirement of $1.00
per share. Accordingly, the matter is now closed.
The Company remains subject to a 180-day compliance period within
which to demonstrate compliance with the minimum $35 million
market value of listed securities requirement for continued
listing on The NASDAQ Capital Market, as set forth in Listing Rule
5550(b), which expires on Aug. 1, 2011. As previously disclosed,
if the Company does not demonstrate compliance with the market
capitalization requirement or the alternative requirement of $2.5
million in stockholders' equity by Aug. 1, 2011, NASDAQ will
notify the Company that its securities are subject to delisting,
at which time the Company may appeal the delisting determination
to a NASDAQ Listing Qualifications Panel, and the Company would
remain listed on NASDAQ pending the outcome of that appeal.
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.
The Company's balance sheet at March 31, 2011, showed $4.51
million in total assets, $5.02 million in total liabilities, all
current, $17,000 in capital lease obligations, $151,000 in
deferred revenue and a $677,000 total stockholders' deficit.
EMPIRE TOWERS: Bank Now Controls Assets, Ch. 11 Case Converted
--------------------------------------------------------------
The Hon. James F. Schneider of the U.S. Bankruptcy Court for the
District of Maryland converted the Chapter 11 cases of Empire
Holdings Corporation and Empire Towers Corporation to one under
Chapter 7 of the Bankruptcy Code.
Joseph Bellinger, the U.S. Trustee for Region 4, asked the Court
to convert the cases because Bank of America was granted relief
from stay on the real property encumbered by the lien of BofA.
About Empire Towers and Empire Holdings
Empire Towers Corporation is the owner of certain real property
located at 7300-7310 Ritchie Highway, Glen Burnie, Maryland. The
office building, built on the property in 1974, is the tallest
building in northern Anne Arundel County and currently leases
space to business and retail enterprises of a wide variety.
Empire Towers filed for Chapter 11 bankruptcy protection (Bankr.
D. Md. Case No. 10-34611) on Oct. 27, 2010. Parent Empire
Holdings Corporation simultaneously filed for Chapter 11 (Bankr.
D. Md. Case No. 10-34580). Aryeh E. Stein, Esq., at Meridian Law,
LLC, in Baltimore, Md., assisted the Debtors in their
restructuring effort. The Debtors disclosed $12,482,584 in assets
and $14,876,779 in liabilities as of the Chapter 11 filing.
ENERGY TRANSFER: Fitch Ratings Affirms IDR at 'BB-'
---------------------------------------------------
Fitch Ratings has affirmed Energy Transfer Equity, L.P.'s 'BB-'
Issuer Default Rating and 'BB' debt ratings and placed ETE on
Rating Watch Positive. In addition Fitch has affirmed Energy
Transfer Partners, L.P.'s IDR and senior unsecured ratings at
'BBB-' with a Stable Rating Outlook. The rating actions follow the
announced proposed acquisition of Southern Union Company (SUG; IDR
'BBB-', Stable Outlook by Fitch) by ETE.
Approximately $8.35 billion of outstanding ETE and ETP long-term
debt is affected by the rating action.
The contemplated transaction assumes ETE will acquire SUG for
$33.00 per share, representing an approximate 17% premium over its
current share price. The transaction is to be funded through the
issuance of $4.2 billion of new ETE Series B units and the
assumption of $3.7 billion of debt. ETE will utilize its revolver
to fund transaction costs. The transaction will be subject to a
SUG shareholder vote as well as regulatory approvals and is
expected by management to close in approximately nine months.
SUG will become a wholly owned subsidiary of ETE. SUG will be
operated as an independent company and will distribute its
available cash to its parent company, ETE. ETE's relationship with
ETP remains unchanged and Fitch expects the transaction to be
credit neutral to ETP.
ETE's Positive Rating Watch reflects the financial benefits
expected from the cash distributions it will receive from SUG.
Additionally, the acquisition increases ETE's scale and scope of
operations and diversifies its cash flow. A significant portion of
SUG's revenues are fee-based or contractually supported.
Furthermore, SUG's asset mix provides the opportunity for asset
drop-downs to ETE's master limited partnership affiliates.
Fitch's ongoing analysis of ETE will consider details of the
transaction as they progress relating to structure and funding as
well as post-transaction operating and financial activities. Fitch
notes that the proposed hybrid Series B units have a fixed minimum
distribution yield and a distribution deferral provision unlike
ETE's outstanding limited partnership units and therefore are not
considered by Fitch to be pure equity units. Also, any future
asset dropdowns of SUG assets could affect ETP's credit profile.
ETE currently owns 50.2 million ETP LP units and ETP's 1.6%
general partner interest, and 26.3 million Regency Energy Partners
LP LP units and RGNC's 1.9% GP interest. ETE's investment in RGNC
was completed on May 26, 2010.
Fitch affirms these ratings and places them on Rating Watch
Positive:
Energy Transfer Equity, L.P.
-- IDR at 'BB-';
-- Senior secured revolving credit facility at 'BB';
-- Senior unsecured debt at 'BB'.
Fitch affirms these ratings with a Stable Outlook:
Energy Transfer Partners, L.P.
-- IDR at 'BBB-';
-- Senior unsecured debt at 'BBB-'.
ENVISA USA: Can Access HFSL Cash Collateral Until Sept. 7
---------------------------------------------------------
The Hon. Robert J. Kressel of the U.S. Bankruptcy Court for the
District of Minnesota authorized Eniva USA Inc. fka Eniva
Corporation to use cash collateral of Home Federal Savings & Loan
until Sept. 7, 2011, under the budget.
According to the Debtor, it has a need to use cash collateral to
pay, operating expenses in the amounts identified in the budget.
The Debtor said it could not continue to operate if the Court
denied it to use cash collateral.
The Debtor said it was indebted to Home Federal Savings & Loan in
the approximate principal amount of $489,559 as of the Petition
Date. Obligations owed to Home Federal are secured by a lien in
substantially all personal property of the Debtor, including
without limitation, accounts, inventory, equipment and general
intangibles.
The Debtor's collateral has these estimated values:
Cash $65,000
Inventory 478,000
Accounts 25,000
Estimated Furniture Fixtures and Equipment 775,731
Total $1,343,731
As of Sept. 7, 2011, Debtor estimates that the collateral's value,
will be:
Cash $87,765
Inventory 515,000
Accounts 25,000
Estimated Furniture Fixtures and Equipment 703,731
Total $1,331,496
The Debtor granted Home Federal replacement liens as adequate
protection.
Richard D. Anderson, Esq., at Briggs and Morgan represents the
Home Federal.
A full-text copy of the cash collateral budget is available for
free at http://bankrupt.com/misc/ENVISAUSA_Budget.pdf
About Eniva USA
Anoka, Minnesota-based Eniva USA, Inc., fka Eniva, Inc., has been
engaged in the development, production and sale of nutritional
supplements since 1998. It is a wholly owned subsidiary of
Wellspring International, Inc. It sells its products throughout
the U.S. through a network of approximately 25,000 active
independent sales representatives, each under non-exclusive
membership contract with the Debtor. It also sells its products
in Mexico, Puerto Rico, Bermuda, Canada and the U.K. through non
Debtor affiliates owned by Wellspring.
Eniva USA filed for Chapter 11 bankruptcy protection (Bankr. D.
Minn. Case No. 11-41414) on March 1, 2011. Michael F. McGrath,
Esq., at Ravich Meyer Kirkman & Mcgrath Nauman, serves as the
Debtor's bankruptcy counsel. Leslie A. Anderson, Ltd., as special
counsel in connection with the appeal or amendment of prior year
sales tax returns is approved. GuideSource as financial
consultant.The Debtor estimated its assets and
debts at $10 million to $50 million.
Habbo G. Fokkena, the U.S. Trustee for Region 12, appointed three
members to the official committee of unsecured creditors in the
Chapter 11 cases
EQUIPMENT ACQUISITION: Suit v. Luxor Hotel Goes to Trial
--------------------------------------------------------
Bankruptcy Judge John H. Squires denied the motion of Ramparts,
Inc. d/b/a Luxor Hotel and Casino for judgment on the pleadings on
the complaint filed against it by William A. Brandt, Jr., in his
capacity as plan administrator of the Chapter 11 plan of
liquidation of Equipment Acquisition Resources, Inc.
William A. Brandt, Jr., not individually but solely in his
capacity as Plan Administrator for Equipment Acquisition
Resources, Inc., v. Luxor Hotel and Casino, Adv. Proc. No. 10 A
02164 (Bankr. N.D. Ill. Oct. 22, 2010), alleges that the Debtor
made certain transfers to Luxor during both a two year and a four
year period prior to the Petition Date so that certain members of
the Debtor's board of directors and its officers could engage in
gambling and gaming activities at Luxor's casino and hotel.
Luxor argues that the Debtor's Plan and Disclosure Statement
contain only a blanket reservation of claims and that Exhibit C
attached to the Disclosure Statement represented a comprehensive
list of all possible "Litigation Claims" that the Plan
Administrator was authorized to bring. The Plan Administrator
responds that the Plan adequately reserved the causes of action
asserted in the adversary proceeding and, in any event, Luxor does
not have standing to challenge the Plan's reservation of claims
because Luxor was not a creditor in the Debtor's bankruptcy.
Judge Squires held that the Plan reserved against Luxor only
actions under 11 U.S.C. Sec. 548, 550, and 740 ILL. COMP. STAT.
160/5(a)(2). The Plan did not adequately reserve a cause of
action under 11 U.S.C. Sec. 544 against Luxor.
Judge Squires set the case for trial on Sept. 20, and 22, 2011, at
1:00 p.m.
A copy of Judge Squires' June 16, 2011 Memorandum Opinion is
available at http://is.gd/Isi1Ojfrom Leagle.com.
About Equipment Acquisition
Palatine, Illinois-based Equipment Acquisition Resources, Inc.,
was a market maker in semiconductor manufacturing equipment sales
and servicing. It owns 2000 pieces of semiconductor manufacturing
equipment and was engaged in fraudulent activity.
Equipment Acquisition filed for Chapter 11 bankruptcy protection
(Bankr. N.D. Ill. Case No. 09-39937) on Oct. 23, 2009. Barry A.
Chatz, Esq., at Arnstein & Lehr LLP, assisted the Company in its
restructuring efforts. The Company estimated $10 million to
$50 million in assets and $100 million to $500 million in
liabilities in its petition. Unsecured creditors were owed about
$102 million, according to court papers.
The Company faced allegations of being a Ponzi scheme. First
Premier Capital LLC, claiming to be owed $20 million, alleged that
that the scheme has cost creditors up to $175 million.
On July 15, 2010, the Court approved the Debtor's Second Amended
Plan of Liquidation. William A. Brandt, Jr., the Debtor's chief
restructuring officer, was named Plan Administrator.
EVANS OIL: Has Access to Fifth Third's Cash Until September 2
-------------------------------------------------------------
The Hon. David H. Adams of the U.S. Bankruptcy Court for the
Middle District of Florida authorized, on an interim basis, The
Evans Oil Company LLC, et al., to use the cash collateral until
Sept. 2, 2011.
The Debtors would use the cash collateral to fund their Chapter 11
case, pay suppliers and other parties.
As reported in the Troubled Company Reporter on Feb. 9, Fifth
Third Bank, Evans' principal working capital and secured lender,
asserts a security interest in Debtors' cash collateral. Fifth
Third Bank provides various credit facilities to Evans Oil,
pursuant to a certain Amended and Restated Credit Agreement
entered into as of April 16, 2010. Presently, Evans Oil owes
Fifth Third Bank approximately $34 million.
As adequate protection for any such interest in cash collateral
used by the Debtors, Fifth Third is granted replacement liens
upon, and security interests in, Debtors' postpetition cash
collateral, but only to the extent that Debtors diminish the cash
collateral. As further adequate protection of Fifth Third's
interests in the cash collateral, the Debtors will provide counsel
for Fifth Third and any creditors' committee with weekly and daily
financial reports. Fifth Third may, upon not less than two
business days' prior written notice to Debtors' counsel, have the
right to a hearing on stay relief.
The Court ordered the Debtors to pay a $20,000 management fee to
Randy M. Long for each of June and July 2011.
As a part of the Interim Adequate Protection Payments, and
pursuant to the terms of the Fourth Interim Cash Collateral Order,
Debtors will pay Fifth Third $40,000 on each of June 1 and July 1.
Fifth Third Bank objected to the eight interim order authorizing
the cash collateral use explaining that the Debtors are using
Fifth Third's cash collateral to obtain postpetition financing.
About Evans Oil
Naples, Florida-based Evans Oil Company LLC, aka Evans Oil Co LLC,
distributes bulk oil, gas, diesel and lubricant products. Evans
Oil, together with affiliates, filed for Chapter 11 bankruptcy
protection (Bankr. M.D. Fla. Lead Case No. 11-01515) on Jan. 30,
2011.
Attorneys at Hahn Loeser & Parks LLP as bankruptcy counsel serve
as bankruptcy counsel to the Debtors. Garden City Group Inc. is
the claims and notice agent. The Parkland Group Inc. is the
restructuring advisor.
Evans Oil estimated assets and debts at $10 million to $50 million
as of the Chapter 11 filing.
EVANS OIL: Lease Decision Period Extended Until Aug. 29
-------------------------------------------------------
The Hon. David H. Adams of the U.S. Bankruptcy Court for the
Middle District of Florida extended until Aug. 29, 2011, The
Evans Oil Company LLC, et al.'s time to assume or reject unexpired
leases of nonresidential real property.
Naples, Florida-based Evans Oil Company LLC, aka Evans Oil Co LLC,
distributes bulk oil, gas, diesel and lubricant products. Evans
Oil, together with affiliates, filed for Chapter 11 bankruptcy
protection (Bankr. M.D. Fla. Lead Case No. 11-01515) on Jan. 30,
2011.
Attorneys at Hahn Loeser & Parks LLP as bankruptcy counsel serve
as bankruptcy counsel to the Debtors. Garden City Group Inc. is
the claims and notice agent. The Parkland Group Inc. is the
restructuring advisor.
Evans Oil estimated assets and debts at $10 million to $50 million
as of the Chapter 11 filing.
EVANS OIL: Court Considers Fifth Third's Stay Relief on July 7
--------------------------------------------------------------
The Hon. David H. Adams of the U.S. Bankruptcy Court for the
Middle District of Florida will convene a hearing on July 7, 2011,
at 10:30 a.m., to consider Fifth Third Bank's motion for relief
from automatic stay from Evans Oil Company LLC, et al.'s assets.
The Court ordered that the automatic stay of Bankruptcy Code
Section 362(a) is continued in effect until further order.
Naples, Florida-based Evans Oil Company LLC, aka Evans Oil Co LLC,
distributes bulk oil, gas, diesel and lubricant products. Evans
Oil, together with affiliates, filed for Chapter 11 bankruptcy
protection (Bankr. M.D. Fla. Lead Case No. 11-01515) on Jan. 30,
2011.
Attorneys at Hahn Loeser & Parks LLP as bankruptcy counsel serve
as bankruptcy counsel to the Debtors. Garden City Group Inc. is
the claims and notice agent. The Parkland Group Inc. is the
restructuring advisor.
Evans Oil estimated assets and debts at $10 million to $50 million
as of the Chapter 11 filing.
FANNIE MAE: Robert Herz Elected to Board of Directors
-----------------------------------------------------
The Board of Directors of Fannie Mae elected Robert H. Herz to
join the Board. Mr. Herz will serve as a member of the Board's
Audit Committee.
Mr. Herz, age 57, has served as President of Robert H. Herz LLC
since September 2010, providing consulting services on financial
reporting and other matters. He has also served as a senior
advisor to WebFilings LLC, a provider of financial reporting
software, since February 2011. From July 2002 to September 2010,
Mr. Herz was Chairman of the Financial Accounting Standards Board.
He was also a part-time member of the International Accounting
Standards Board from January 2001 to June 2002. He was a partner
in PricewaterhouseCoopers LLP from 1985 until his retirement in
2002. He serves on the Accounting Standards Oversight Council of
Canada, on the Leadership Board of the Manchester Business School
in England, as Trustee of the Kessler Foundation, and as an
executive in residence at the Columbia Business School.
In accordance with Fannie Mae's non-management director
compensation practices, Mr. Herz will be paid a cash retainer at a
rate of $160,000 per year for serving as a Board member and
$10,000 per year for serving as a member of the Board's Audit
Committee. In accordance with its customary practice, Fannie Mae
is entering into an indemnification agreement with Mr. Herz.
About Fannie Mae
Federal National Mortgage Association, aka Fannie Mae, is a
government-sponsored enterprise that was chartered by U.S.
Congress in 1938 to support liquidity, stability and affordability
in the secondary mortgage market, where existing mortgage-related
assets are purchased and sold.
The Company's balance sheet at Dec. 31, 2010 showed
$3.222 trillion in total assets, $3.224 trillion in total
liabilities, and a $2.52 billion total deficit.
Fannie Mae has been under conservatorship, with the Federal
Housing Finance Agency acting as conservator, since September 6,
2008. As conservator, FHFA succeeded to all rights, titles,
powers and privileges of the company, and of any shareholder,
officer or director of the company with respect to the company and
its assets. The conservator has since delegated specified
authorities to Fannie Mae's Board of Directors and has delegated
to management the authority to conduct day-to-day operations.
The U.S. Department of the Treasury owns Fannie Mae's senior
preferred stock and a warrant to purchase 79.9% of its common
stock, and Treasury has made a commitment under a senior preferred
stock purchase agreement to provide Fannie with funds under
specified conditions to maintain a positive net worth.
FNB UNITED: Inks $75MM Subscription Agreement with Investors
------------------------------------------------------------
FNB United Corp., parent company of CommunityONE Bank, National
Association, on June 16, 2011, entered into subscription
agreements with accredited investors pursuant to which those
investors agreed to purchase shares of the Company's common stock,
at a purchase price of $0.16 per share, for an aggregate of
approximately $75.0 million.
The proposed investments by those investors are part of an
expected aggregate $310 million capital raise by the Company from
institutional and other investors through various private
placement transactions. As previously reported, the Company has
entered into separate investment agreements with each of an
affiliate of The Carlyle Group and affiliates of Oak Hill Capital
Partners, pursuant to which each Lead Investor has agreed, subject
to certain conditions, to invest approximately $77.5 million in
Common Stock. In connection with the proposed capital raise and
as previously reported by the Company, the Company has entered
into an Agreement and Plan of Merger, dated April 26, 2011, with
the Bank of Granite Corporation and a wholly owned acquisition
subsidiary of the Company, pursuant to which the wholly owned
subsidiary of the Company would, subject to certain conditions,
merge with and into Granite, with Granite surviving as a
subsidiary of the Company.
The closings under the Subscription Agreements are subject to the
following conditions, among others: receiving aggregate gross
proceeds of at least $310 million from the Investments and sales
of Common Stock to other investors in private placements by the
Company; the closing conditions under the Merger Agreement having
been satisfied or waived; the shares of Common Stock to be issued
under the Investment Agreements being authorized for listing on
NASDAQ; the exchange of the Company's preferred stock issued to
the U.S. Treasury and the amount of accrued and unpaid dividends
on the TARP Preferred Stock for Common Stock; the satisfaction of
conditions regarding minimum liquidity and non-brokered deposits
and the level of non-performing assets; receipt of advice as to
the absence of an Internal Revenue Code section 382 ownership
change as a result of the private placement investments; and
absence of a material adverse effect on the Company and its
subsidiaries.
Pursuant to the Subscription Agreements, the investors are
entitled to certain preemptive rights and registration rights.
The Company and the investors have also agreed to provide each
other with certain indemnification rights.
As previously reported, one of the conditions to the completion of
each Investment Agreement and the Merger Agreement is the
settlement of indebtedness of CommunityONE outstanding and held by
SunTrust Bank for cash at the discounted values specified in the
Investment Agreements.
On the terms and subject to the conditions set forth in a letter
agreement dated May 31, 2011, between CommunityONE and SunTrust
Bank, SunTrust Bank has preliminarily agreed to settle
CommunityONE's indebtedness for cash in amount equal to 35% of the
principal thereof, plus 100% of the unpaid and accrued interest on
the debt as of the closing date of the Investments.
As a result of the revised terms of the SunTrust Settlement, on
June 16, 2011, the Company, its wholly owned acquisition
subsidiary, and Granite agreed to amend the terms of the Merger
Agreement to revise the discounted settlement amount of the
SunTrust indebtedness from 25% to 35% of the principal thereof,
plus 100% of the unpaid and accrued interest on the debt as of the
closing date of the Investments. In addition, on June 16, 2011,
the Company and each Investor also agreed to amend the terms of
their respective Investment Agreements to revise the discounted
settlement amount of the SunTrust indebtedness from 25% to 35% of
the principal thereof, plus 100% of the unpaid and accrued
interest on the debt as of the closing date of the Investments.
The Company and each Investor have agreed to certain additional
modifications to each of their respective the Investment
Agreements.
The closing of each Investment remains subject to the following
conditions, among others: receiving aggregate gross proceeds of at
least $310 million from the Investments and sales of Common Stock
to other investors in private placements by the Company; the
closing conditions under the Merger Agreement having been
satisfied or waived; antitrust clearance; receipt of bank
regulatory approvals; Company shareholder approval of certain
proposals necessary for the Company to consummate the Investments,
the Merger and the related transactions; the shares of Common
Stock to be issued under the Investment Agreements being
authorized for listing on NASDAQ; the exchange of the Company's
TARP Preferred Stock; the completion of the SunTrust Settlement;
the settlement of preferred stock of CommunityONE outstanding and
held by SunTrust for cash at the discounted values specified in
the Investment Agreements; changes to the Company's Board of
Directors; the absence of burdensome regulatory conditions or
agreements at closing; the satisfaction of conditions regarding
minimum liquidity and non-brokered deposits and the level of non-
performing assets; the effectiveness of the Company's Deferred
Prosecution Agreement with the U.S. Department of Justice; receipt
of advice as to the absence of an Internal Revenue Code section
382 ownership change as a result of the private placement
investments; and the Company and the Granite not having
experienced a material adverse effect.
On June 10, 2011, the Company received a written notice from The
Nasdaq Stock Market of the Nasdaq staff's determination that the
Company has not provided a definitive plan evidencing its ability
to achieve near-term compliance with all of the continued listing
requirements of The Nasdaq Capital Market and, in particular, Rule
5550(a)(2), the bid price rule, and Rule 5550(b), the
stockholders' equity rule. Accordingly, unless the Company
requests an appeal of this staff determination, trading of the
Company's common stock will be suspended at the opening of
business on June 21, 2011, and a Form 25-NSE will be filed with
the Securities and Exchange Commission, which will remove the
Company's common stock from listing and registration on The Nasdaq
Stock Market.
The Company intends to request an appeal of the staff's
determination to the Nasdaq panel by June 17, 2011, which request
will stay the suspension of the Company's common stock and filing
of the Form 25-NSE pending the panel's decision. The Company's
common stock will continue to trade on The Nasdaq Capital Market
under the symbol "FNBN" during the appeals period.
The issuance and sale of the Common Stock to the investors
pursuant to the Subscription Agreements is exempt from
registration pursuant to Section 4(2) of the Securities Act of
1933, as amended. The Company has not engaged in general
solicitation or advertising with regard to the issuance and sale
of the Common Stock to the investors and is not offering
securities to the public in connection with the investments.
About FNB United
Asheboro, N.C.-based FNB United Corp. (Nasdaq:FNBN) is the bank
holding company for CommunityOne Bank, N.A., and the bank's
subsidiary, Dover Mortgage Company. Opened in 1907, CommunityOne
Bank -- http://www.MyYesBank.com/-- operates 45 offices in 38
communities throughout central, southern and western North
Carolina. Through these subsidiaries, FNB United offers a
complete line of consumer, mortgage and business banking services,
including loan, deposit, cash management, wealth management and
internet banking services.
The Company's balance sheet at March 31, 2011, showed
$1.82 billion in total assets, $1.89 billion in total liabilities,
and a $67.70 million total shareholders' deficit.
The Company incurred significant net losses in 2009, which
continued in 2010 and 2011, primarily from the higher provisions
for loan losses due to the significant level of nonperforming
assets and the write-off of goodwill.
Dixon Hughes PLLC, in Charlotte, North Carolina, in its
independent auditors' report dated March 14, 2011 and attached to
the financial statements, noted that the Company continued to
incur significant net losses in 2010, primarily from the higher
provisions for loan losses due to the significant level of non-
performing assets. According to Dixon Hughes, the Company is
significantly undercapitalized per regulatory guidelines and has
failed to reach capital levels required in the Consent Order
issued by the Office of the Comptroller of the Currency in 2010.
These matters, the accounting firm maintains, raise substantial
doubt about the Company's ability to continue as a going concern.
Dixon Hughes also said that FNB United Corp. and Subsidiary has
not maintained effective internal control over financial reporting
as of Dec. 31, 2010, based on criteria established in Internal
Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission.
FOUR MOONS: Case Summary & 7 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Four Moons, LLC
Rt. 3 Box 3622
Myton, UT 84052
Bankruptcy Case No.: 11-28693
Chapter 11 Petition Date: June 13, 2011
Court: United States Bankruptcy Court
District of Utah (Salt Lake City)
Judge: Joel T. Marker
Debtor's Counsel: Franklin L. Slaugh, Esq.
880 East 9400 South, Suite 103
Sandy, UT 84094
Tel: (801) 572-4412
Fax: (801) 572-9259
E-mail: frank@fiber.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's seven largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/utb11-28693.pdf
The petition was signed by Todd Moon, managing member.
FRAZER/EXTON: Wants to Access $1.89-Mil. Loan From RMC
------------------------------------------------------
Frazer/Exton Development LP and Whiteland Village Ltd. ask the
U.S. Bankruptcy Court for the Eastern District of Pennsylvania for
permission to access, in the aggregate, $1,898,698 in postpetition
loan from Roskamp Management Company for the purpose of funding
the operating cash flow deficiency of the Debtors.
The Debtors said the loan will not bear interest.
According to the Debtors they have no operating source of cash
flow other than the loan from RMC. The uses of the funds are
important to the continued development and sale of a project
located at 15 South Bacton Hill Road, Malvern, East and West
Whiteland Townships, Chester County, Pennsylvania, and cover
all expenses until Dec. 31, 2011.
The property was designated a superfund site. The Debtor said
they secured a deal for the sale of the property to Makemie, a
Pennsylvania nonprofit corporation and an affiliate of
Philadelphia Presbytery Homes Inc., for $7.3 million in cash and
the assumption of up to $5 million of debt.
The Debtors say they intend to file plan, which incorporates the
sale, development of the remaining premises and ultimate payment
to creditors. The sale of the property requires approval of the
recordation of subdivision and land condominium plans in order to
effectuate the transfer of the 30 acres to Makemie.
About Frazer/Exton Development
Based in Malvern, Pennsylvania, Frazer/Exton Development, L.P.,
owns real property in Chester County. Whiteland Village Ltd.
obtained various approvals and permits for the development of the
real property as a continued care retirement community. Whiteland
Village Ltd. and Frazer/Exton Development, L.P., filed for Chapter
11 bankruptcy (Bankr. E.D. Pa. Case Nos. 11-14036 and 11-14041) on
May 19, 2011. The case was initially assigned to Judge Stephen
Raslavich but was transferred to Judge Jean K. FitzSimon. Lawyers
at Ciardi Ciardi & Astin, P.C. serve as bankruptcy counsel.
Frazer/Exton Development L.P. filed with the Bankruptcy Court its
schedules of assets and liabilities disclosing $0 in total assets
and $46,953,617 in total liabilities.
The Debtors are selling a portion of the Property to Makemie at
Whiteland -- a Pennsylvania non-profit corporation and affiliate
of Philadelphia Presbytery Homes Inc. -- for $7,300,000 in cash
and assumption of up to $5,000,000 of debt. The deal is subject
to higher and better offers.
FRE REAL ESTATE: Hires Regis Realty as Property Manager
-------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
authorized FRE Real Estate, Inc., to employ Regis Realty Prime,
LLC, dba Regis Property Management, LLC, as the property manager
and leasing agent for the Debtor's real property.
Fort Worth, Texas-based FRE Real Estate, Inc., aka Fenton Real
Estate, Inc., owns a commercial real estate complex comprising two
seven-story office towers totaling approximately 696,458 square
feet and two five-level parking garages located at 1501-1503 and
1505-1507 LBJ Freeway in Farmer's Branch, Texas 75234.
FRE Real Estate filed for Chapter 11 bankruptcy protection (Bankr.
N.D. Tex. Case No. 11-42042) on April 4, 2011. Robert A. Simon,
Esq., at Barlow Garsek & Simon, LLP, serves as the Debtor's
bankruptcy counsel. The Debtor disclosed $70,635,902 in assets
and $66,887,513 in liabilities as of the Chapter 11 filing.
The Debtor intends to recast the mortgage through a plan note with
a longer maturity, at the same interest rate. Alternatively, the
Debtor may elect to sell the Property in a controlled liquidation.
Because the mortgage grants a lien on the rents and other charges
generated by the Property, NexBank has a lien on the Debtor's
cash.
FRE Real Estate previously filed for Chapter 11 bankruptcy
protection (Bankr. N.D. Tex. Case No. 11-30210) on Jan. 4, 2011.
John P. Lewis, Jr., Esq., served as the Debtor's bankruptcy
counsel. Wells Fargo Capital Finance, a major secured creditor of
the Debtor, however, asked the Bankruptcy Court to dismiss the
Debtor's Chapter 11 bankruptcy case on the grounds that the
petition was filed in bad faith.
Bankruptcy Judge Barbara J. Houser agreed to dismiss the case,
acknowledging that there was no "good business justification" for
TCI Texas Properties LLC to transfer 10 properties securing the
Wells Fargo loan to FRE -- and at the same time other affiliates
of TCI transferring numerous properties to FRE -- then later have
FRE file for bankruptcy. Judge Houser said that absent the "new
debtor syndrome", bankruptcy law would have put each mortgage
lender "substantially in control, if not in complete control."
To date, no committee of unsecured creditors has been appointed.
FRIENDSHIP VILLAGE: Fitch Cuts Rating on Revenue Bonds to 'BB-'
---------------------------------------------------------------
As part of its on-going surveillance efforts, Fitch Ratings has
downgraded the ratings on these revenue bonds issued by the County
of Franklin, Ohio on behalf of Friendship Village of Columbus:
-- $16,070,000 health care facilities revenue refunding and
improvement bonds, series 1998 to 'BB-' from 'BBB-'.
The Rating Outlook is revised to Stable from Negative.
Rating Rationale:
-- The downgrade to 'BB-' reflects FVC's weak financial metrics
relative to Fitch's 'BBB' category medians combined with
increased operating risk since Fitch's last review due to
the effects of the recession and continued pressure on local
home values.
-- FVC's liquidity position at April 30 is light (98.4 days
cash on hand, 2.7 times(x) cushion and 24% cash-to-long-term
debt) providing little cushion against a decline in
operating performance.
-- Occupancy in FVC's 228 independent living units (ILU)
remains low at 76% as of March 31, 2011 reflecting a rising
attrition rate and the difficult operating environment.
-- Management has done a solid job of controlling expenses to
match decreasing revenues over the last several years.
Key Rating Drivers:
The recent discounting of entrance fees has improved sales and
should stabilize occupancy and operations at the current level.
Security:
The bonds are secured by a pledge of FVC's gross revenues, a first
mortgage, and a debt service reserve fund.
Credit Summary:
The downgrade to 'BB-' from 'BBB-' reflects FVC's financial
metrics which are not consistent with Fitch's 'BBB' category
medians, heightened operating risk since Fitch's last review as
evidenced by low occupancy, increasing attrition and continued
pressure on home prices. At April 30, FVC had $3.7 million of
unrestricted cash and investments as compared to $5.2 million at
fiscal year end 2010 (June 30). Liquidity indicators including
days cash on hand, cash to debt and cushion ratio of 98.4, 24.0%
and 2.7x, respectively, are well below the corresponding 'BBB'
category medians of 372.7, 48.6% and 6.1x. Moreover, profitability
has been erratic over the last few years reflecting the more
difficult operating environment. Net operating margin-adjusted in
fiscal 2008, 2009 and 2010 was 10.1%, 9.8% and 11.6%,
respectively, which trails the 2010 'BBB' category median of
18.0%. Through the 10-month interim period, net operating margin-
adjusted was 7.3%.
Although profitability has been light, FVC's manageable debt
burden (maximum annual debt service [MADS] equates to just 8.7% of
fiscal 2010 revenues) has resulted in adequate coverage of 1.2x
and 1.3x in fiscal 2009 and 2010, respectively.
Occupancy in the independent living units remains weak as
increased attrition has offset unit sales. At April 30, there were
173 occupied units (76%) as compared to 175 and 176 each at fiscal
year end 2010 and 2009. The major concerns with the low occupancy
levels are FVC's historical reliance on entrance fees to cover
debt service and the declining revenue base due to less monthly
service fee receipts. Given the low unit turnover, the last four
fiscal years net entrance fees received have ranged from a low of
$570,000 in fiscal 2009 to a high of approximately $1.7 million in
fiscal 2007, which are relatively low for a facility of this size.
As a result, debt service coverage has averaged 1.3x over the last
four fiscal years, which compares unfavorably to the 'BBB'
category median of 1.7x.
Effective January 1 of this year, the board approved a 25%
reduction in entrance fees in an effort to jumpstart sales and
improve occupancy. The initiative seems to have had the intended
effect as FVC has generated 24 sales since January 1 compared to
just 11 in the first half of fiscal 2011. While the increased
sales are viewed positively, Fitch believes the magnitude of the
entrance fee discount is indicative of the difficult operating
environment.
Management's ability to effectively control expenses in response
to lower occupancy is viewed positively. Although revenues have
been flat over the last four fiscal years, management has been
successful in controlling expenses and maintaining a breakeven
bottom line over the last several years.
The Outlook revision to Stable reflects Fitch's expectation that
operating performance over the next 12 months should be consistent
with recent results. The discounting of the entrance fee should
stabilize or improve occupancy and allow for stable operating
performance despite the difficult environment. Although management
would like to pursue a campus repositioning/refurbishment plan,
Fitch believes this is unlikely until overall occupancy and
financial performance improves in the existing ILUs.
FVC operates a type-A continuing care retirement community located
in Columbus, OH, which consists of 228 independent living units,
63 assisted living units, and 80 skilled nursing beds. Total
revenues for fiscal 2010 were approximately $16.1 million.
FRISCO BOAT: Case Summary & 14 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Frisco Boat Storage, LP
301 Rose Lane
Frisco, TX 75034
Bankruptcy Case No.: 11-41873
Chapter 11 Petition Date: June 14, 2011
Court: United States Bankruptcy Court
Eastern District of Texas (Sherman)
Debtor's Counsel: Jason Michael Katz, Esq.
CURTIS CASTILLO PC
901 Main Street, Suite 6515
Dallas, TX 75202
Tel: (214) 752-2222
Fax: (214) 752-0709
E-mail: jkatz@curtislaw.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 14 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/txeb11-41873.pdf
The petition was signed by Jim Lee, manager of Debtor's general
partner.
Affiliate that filed separate Chapter 11 petition:
Petition
Debtor Case No. Date
------ -------- ----
Sunflower/423 LP 11-41872 06/14/11
GAMETECH INTERNATIONAL: Steve Smallman's Employment Ends
--------------------------------------------------------
Steve Smallman's appointment as Gametech International, Inc.'s
executive vice president of Bingo Product, Marketing, and Sales
ended on June 10, 2011. The Company intends to eliminate the
position of Executive Vice President of Bingo Product, Marketing,
and Sales with Mr. Smallman's departure.
About GameTech
Based in Reno, Nevada, GameTech develops and manufactures gaming
entertainment products and systems. GameTech holds a significant
position in the North American bingo market with its interactive
electronic bingo systems, portable and fixed-based gaming units,
and complete hall management modules. It also holds a significant
position in select North American VLT markets, primarily Montana,
Louisiana, and South Dakota, where it offers video lottery
terminals and related gaming equipment and software. It also
offers Class III slot machines and server-based gaming systems.
The Company reported a net loss of $20.4 million on $35.2 million
of revenue for the 52 weeks ended Oct. 31, 2010, compared with a
net loss of $10.5 million on $47.8 million of revenue for the
52 weeks ended Nov. 1, 2009.
Piercy Bowler Taylor & Kern, in Las Vegas, Nevada, expressed
substantial doubt about GameTech International, Inc.'s ability to
continue as a going concern. The independent auditors noted that
the Company has suffered reoccurring losses from operations and
has been unable to extend the maturity of its debt, or raise
additional capital necessary to execute its business plan.
The Company's balance sheet at Jan. 30, 2011, showed $40.86
million in current assets, $31.47 million in current liabilities
and $9.39 million in total stockholders' equity.
GAMETECH INTERNATIONAL: Delays Filing of May 1 Quarterly Report
---------------------------------------------------------------
GameTech International, Inc., notified the U.S. Securities and
Exchange Commission that it is unable to file its Form 10-Q for
the quarter ended May 1, 2011, within the prescribed time period
without unreasonable effort and expense as a result of the
Company's efforts to finalize an amended and restated loan
agreement with respect to its existing credit facility with U.S.
Bank, N.A., and Bank of West. As reported in the Company's
Current Report on Form 8-K filed with the SEC on June 16, 2011,
the Company entered into an amended and restated loan agreement
with its lenders on June 15, 2011.
About GameTech
Based in Reno, Nevada, GameTech develops and manufactures gaming
entertainment products and systems. GameTech holds a significant
position in the North American bingo market with its interactive
electronic bingo systems, portable and fixed-based gaming units,
and complete hall management modules. It also holds a significant
position in select North American VLT markets, primarily Montana,
Louisiana, and South Dakota, where it offers video lottery
terminals and related gaming equipment and software. It also
offers Class III slot machines and server-based gaming systems.
The Company reported a net loss of $20.4 million on $35.2 million
of revenue for the 52 weeks ended Oct. 31, 2010, compared with a
net loss of $10.5 million on $47.8 million of revenue for the
52 weeks ended Nov. 1, 2009.
Piercy Bowler Taylor & Kern, in Las Vegas, Nevada, expressed
substantial doubt about GameTech International, Inc.'s ability to
continue as a going concern. The independent auditors noted that
the Company has suffered reoccurring losses from operations and
has been unable to extend the maturity of its debt, or raise
additional capital necessary to execute its business plan.
The Company's balance sheet at Jan. 30, 2011, showed $40.86
million in current assets, $31.47 million in current liabilities
and $9.39 million in total stockholders' equity.
GREAT ATLANTIC & PACIFIC: Hearing on New C&S Deal on Thursday
-------------------------------------------------------------
Marie Beaudette, writing for Dow Jones' Daily Bankruptcy Review,
reports that Great Atlantic & Pacific Tea Co. will ask the
Bankruptcy Court on Thursday to approve a new supply and logistics
agreement with its principal wholesale supplier, C&S Wholesale
Grocers Inc., that will save it $50 million a year.
DBR says the company said in court papers the deal replaces an
"unfavorable" contract with C&S, which supplies about 70% of the
merchandise for A&P stores. The grocery chain reached the new
deal with C&S after launching a competitive bidding process for
its supply contract.
About Great Atlantic & Pacific
Founded in 1859, Montvale, New Jersey-based Great Atlantic &
Pacific is a leading supermarket retailer, operating under a
variety of well-known trade names, or "banners" across the mid-
Atlantic and Northeastern United States. It operates 395
supermarkets, combination food and drug stores, beer, wine, and
liquor stores, and limited assortment food stores in Connecticut,
Delaware, Massachusetts, Maryland, New Jersey, New York,
Pennsylvania, Virginia, and the District of Columbia. "Banners"
include A&P (101 stores), Food Basics (12 stores), Pathmark (128
stores), Super Fresh (57 stores), The Food Emporium (16 stores),
and Waldbaum's (59 stores).
A&P employs roughly 41,000 employees, including roughly 28,000
part-time employees. Roughly 95% of the workforce are covered by
collective bargaining agreements.
A&P and its affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y.
Case No. 10-24549) on Dec. 12, 2010 in White Plains, New York. In
its petition, A&P reported total assets of $2.5 billion and
liabilities of $3.2 billion as of Sept. 11, 2010.
Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C.
Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J.
Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois,
serve as counsel to the Debtors. Kurtzman Carson Consultants LLC
is the claims and notice agent. Lazard Freres & Co. LLC is the
financial advisor. Huron Consulting Group is the management
consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and
Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represent the Official Committee of Unsecured Creditors.
GRUBB & ELLIS: Reaches Definitive Pact for Sale of Alesco Assets
----------------------------------------------------------------
Grubb & Ellis Company has entered into a definitive agreement for
the sale of substantially all of the assets of its real estate
investment fund business, Alesco Global Advisors, to Lazard Asset
Management LLC. Terms of the transaction were not disclosed.
Alesco Global Advisors is a registered investment advisor that
focuses on real estate securities and manages three registered
mutual funds. Grubb & Ellis acquired a 51 percent interest in
Alesco Global Advisors through its Daymark subsidiary in 2007.
"We are executing on our plan to maximize value for our
stakeholders and strengthen the company's competitive position,"
said Thomas P. D'Arcy, president and chief executive officer of
Grubb & Ellis. "Today's agreement on Alesco is a positive step
forward in the sale of Daymark Realty Advisors, which is a key
part of our plan. At the same time, we believe Alesco and its
talented fund manager, Jay Leupp, will benefit from having access
to the scale and resources of Lazard Asset Management, one of the
world's preeminent asset management firms."
"We look forward to having this experienced real estate investment
team join our firm," said Ashish Bhutani, chief executive officer
of Lazard Asset Management. "By adding listed real estate
investment strategies to our platform, we will continue to provide
diversified and superior investment solutions for our clients."
The transaction is subject to related approvals by the mutual
funds' Board of Trustees and shareholders and is expected to close
in the third quarter of 2011.
About Grubb & Ellis Company
Grubb & Ellis Company -- http://www.grubb-ellis.com/-- is one of
the largest and most respected commercial real estate services and
investment companies in the world. Our 5,200 professionals in more
than 100 company-owned and affiliate offices draw from a unique
platform of real estate services, practice groups and investment
products to deliver comprehensive, integrated solutions to real
estate owners, tenants and investors. The firm's transaction,
management, consulting and investment services are supported by
highly regarded proprietary market research and extensive local
expertise. Through its investment management business, the
company is a leading sponsor of real estate investment programs.
The Company's balance sheet at March 31, 2011, showed $256.53
million in total assets, $242.77 million in total liabilities,
$92.97 million in 12% cumulative participating perpetual
convertible preferred stock, and a $79.22 million total deficit.
The Company reported a net loss of $69.7 million on $575.5 million
of revenues for 2010, compared with a net loss of $80.5 million on
$527.9 million of revenues for 2009.
HAWAII BIOTECH: Exits Bankruptcy Protection
-------------------------------------------
Hawaii Biotech, Inc. disclosed that Judge Robert Faris, presiding
judge in Federal Bankruptcy Court in Hawaii, ruled to confirm the
company's plan of reorganization and approve distributions and
close the bankruptcy proceedings against HBI. The company filed
for Chapter 11 reorganization with the Honolulu court in December
2009 after a shareholder dispute blocked a venture capital
financing.
"This is a significant milestone and an important day for Hawaii
Biotech," noted HBI CEO Elliot Parks, Ph.D. "We are very pleased
with the fairness, judgment and speed of the bankruptcy court. We
worked closely with our creditors and shareholders to accomplish
this goal and appreciate their cooperation and understanding."
"Substantial shareholder value was preserved through the process,"
noted Rob Robinson, member of the HBI Board of Directors and an
investor. "Hawaii Biotech is now in the position to move ahead
and attract additional funding from grant and other sources
unavailable during Chapter 11 reorganization."
HBI remains actively engaged in research and development at its
Aiea facility on Oahu. Currently HBI is focused on the
development of a tick-borne encephalitis virus vaccine with
funding from a grant from the National Institute of Allergy and
Infectious Diseases. Other subunit vaccines are also under
development including a malaria vaccine in collaboration with
academic researchers at the University of Hawaii-Manoa. With this
exit from bankruptcy, HBI can now focus on pursuing pre-clinical
and clinical development efforts for these and other future
vaccine targets.
Hawaii Biotech Inc. -- http://www.hibiotech.com/-- researches and
develops vaccines for infectious diseases. The Company filed for
Chapter 11 protection on Dec. 11, 2009 (Bankr. D. Hawaii Case No.
09-02908). Jerrold K. Guben, Esq., at O'Connor Playdon & Guben,
represents the Debtor in its restructuring effort. The Debtor
estimated assets and debts of $1 million to $10 million in its
Chapter 11 petition.
HEARUSA INC: Court Approves Berger Singerman as Bankruptcy Counsel
------------------------------------------------------------------
The Hon Erik P. Kimball of the U.S. Bankruptcy Court for the
Southern District of Florida authorized on a final basis, HearUSA,
Inc., to employ Paul Steven Singerman and the Law Firm of Berger
Singerman, P.A. as general counsel.
As reported in the Troubled Company Reporter on May 27, 2011,
Paul Steven Singerman, Esq., an attorney and shareholder at the
firm, disclosed that his firm represent creditors and other
parties-in-interest in matters unrelated to the Debtor's case. He
attested that his firm does not represent any interest adverse to
the Debtor, and is a "disinterested person" as that term is
defined in Sec. 101(14) of the Bankruptcy Code.
On March 23, Berger Singerman received a $25,000 initial retainer
from the Debtor. Since that time, the firm has received roughly
$300,000 for prepetition services rendered.
On May 13, the firm received $200,000, this time as bankruptcy
retainer.
The firm's attorneys who will primarily work on the Debtor's case
and their hourly rates are:
Paul Steven Singerman, Esq. $595
Brian Gart, Esq. $590
Associate attorneys $425 - $450
Legal assistants and
Paralegals $75 - $195
To the best of the Debtor's knowledge, the firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached at:
Debi Evans Galler, Esq.
BERGER SINGERMAN, P.A.
200 S. Biscayne Blvd., Suite 1000
Miami, FL 33131
Tel: (305) 755-9500
Fax: (305) 714-4340
E-mail: dgaller@bergersingerman.com
About HearUSA, Inc.
HearUSA, Inc., which sells hearing aids in 10 states, filed for
Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No.
11-23341) on May 16, 2011, to sell the business for $80 million to
William Demant Holdings A/S. The Debtor said that assets are
$65.6 million against debt of $64.7 million as of March 31, 2010.
HearUSA owes $31.3 million to Siemens Hearing Instruments Inc.,
the principal supplier and primary secured lender.
Judge Erik P. Kimball presides over the case. Brian K. Gart,
Esq., Paul Steven Singerman, Esq., and Debi Evans Galler, Esq., at
Berger Singerman, P.A., represent the Debtor. The Debtor has
tapped Bryan Cave LLP as special counsel; Sonenshine Partners LLC,
investment banker; Development Specialist Inc., restructuring
advisor ans Joseph J. Luzinski as chief restructuring officer; and
AlixPartners LLC, as communications consultant.
Trustee Services, Inc., serves as claims and notice agent.
HearUSA, INC.
The Official Committee of Unsecured Creditors was appointed on
May 25, 2011. Robert Paul Charbonneau and the law firm of
Ehrenstein Charbonneau Calderin represents the Committee.
HEARUSA INC: Committee Taps Ehrenstein Charbonneau as Counsel
-------------------------------------------------------------
The Hon. Erik P. Kimball of the U.S. Bankruptcy Court for the
Southern District of Florida authorized the Official Committee Of
Unsecured Creditors in the Chapter 11 cases of HearUSA, INC., to
retain Robert Paul Charbonneau and the law firm of Ehrenstein
Charbonneau Calderin as its counsel.
As reported in the Troubled Company Reporter on June 9, 2011,
Ehrenstein Charbonneau, will, among other things:
a. give advice to the Committee with respect to its powers
and duties as Committee;
b. represent the Committee in all proceedings before this
Court; and
c. prepare and review motions, pleadings, orders, applications,
adversary proceedings, and other legal documents arising in
the case.
HearUSA, Inc. will charge the Debtors' estates in accordance with
its customary hourly rates. The firm's hourly rates are:
Personnel Hourly Rate
--------- -----------
Attorneys $150-425
Associate attorneys $150-330
Paralegals $75-115
To the best of the Committee's knowledge, Mr. Charbonneau and ECC
are "disinterested person" as that term is defined in Section
101(14) of the Bankruptcy Code.
The firm can be reached at:
Robert P. Charbonneau, Esq.
EHRENSTEIN CHARBONNEAU CALDERIN
501 Brickell Key Dr, Suite 300
Miami, Florida 33131
Tel: (305) 722-2002
Fax: (305) 722-2001
E-mail: rpc@ecclegal.com
About HearUSA, Inc.
HearUSA, Inc., which sells hearing aids in 10 states, filed for
Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No.
11-23341) on May 16, 2011, to sell the business for $80 million to
William Demant Holdings A/S. The Debtor said that assets are
$65.6 million against debt of $64.7 million as of March 31, 2010.
HearUSA owes $31.3 million to Siemens Hearing Instruments Inc.,
the principal supplier and primary secured lender.
Judge Erik P. Kimball presides over the case. Brian K. Gart,
Esq., Paul Steven Singerman, Esq., and Debi Evans Galler, Esq., at
Berger Singerman, P.A., represent the Debtor. The Debtor has
tapped Bryan Cave LLP as special counsel; Sonenshine Partners LLC,
investment banker; Development Specialist Inc., restructuring
advisor ans Joseph J. Luzinski as chief restructuring officer; and
AlixPartners LLC, as communications consultant.
Trustee Services, Inc., serves as claims and notice agent.
HearUSA, INC.
The Official Committee of Unsecured Creditors was appointed on
May 25, 2011. Robert Paul Charbonneau and the law firm of
Ehrenstein Charbonneau Calderin represents the Committee. The
Committee tapped Brent Williams, CPA and the firm of Duff &
Phelps, LLC., as its financial advisors and forensic accountants.
HEARUSA INC: Committee Taps Duff & Phelps as Financial Advisors
---------------------------------------------------------------
HearUSA, Inc., asks the U.S. Bankruptcy Court for the Southern
District of Florida to deny the request of the Official Committee
Of Unsecured Creditors in the Chapter 11 case to retain Brent
Williams, CPA and the firm of Duff & Phelps, LLC., as its
financial advisors and forensic accountants.
The Debtor explains that the Committee failed to justify the
unnecessary expense to the Debtor's estate of the Committee's
retention of a financial advisor, investment banker and
forensic accountant under the circumstances.
As the Committee's financial advisor, the firm will, among other
things:
a) analyze any sale, merger, divestiture, joint-venture, or
investment transaction, including the proposed structure and
form thereof;
b) assist in the determination of an appropriate go-forward/
post emergence capital structure for the Company; and
c) assist the Committee in developing, evaluating, structuring
and negotiating the terms and conditions of a restructuring
or Plan of Reorganization, including the value of the
securities, if any, that may be issued to the Committee
under any such restructuring or Plan.
The Committee proposes that the Debtor will pay Duff & Phelps a
cash monthly fee of $75,000.
Mr. Williams, managing director of the firm, assures the Court
that the firm is a "disinterested person" as that term is defined
in Section 101(14) of the Bankruptcy Code.
About HearUSA, Inc.
HearUSA, Inc., which sells hearing aids in 10 states, filed for
Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No.
11-23341) on May 16, 2011, to sell the business for $80 million to
William Demant Holdings A/S. The Debtor said that assets are
$65.6 million against debt of $64.7 million as of March 31, 2010.
HearUSA owes $31.3 million to Siemens Hearing Instruments Inc.,
the principal supplier and primary secured lender.
Judge Erik P. Kimball presides over the case. Brian K. Gart,
Esq., Paul Steven Singerman, Esq., and Debi Evans Galler, Esq., at
Berger Singerman, P.A., represent the Debtor. The Debtor has
tapped Bryan Cave LLP as special counsel; Sonenshine Partners LLC,
investment banker; Development Specialist Inc., restructuring
advisor ans Joseph J. Luzinski as chief restructuring officer; and
AlixPartners LLC, as communications consultant.
Trustee Services, Inc., serves as claims and notice agent.
HearUSA, INC.
The Official Committee of Unsecured Creditors was appointed on
May 25, 2011. Robert Paul Charbonneau and the law firm of
Ehrenstein Charbonneau Calderin represents the Committee.
HEARUSA INC: Can Hire AlixPartners as Communication Consultants
---------------------------------------------------------------
The Hon Erik P. Kimball of the U.S. Bankruptcy Court for the
Southern District of Florida authorized HearUSA, Inc., to employ
AlixPartners, LLP as its communication consultants.
As reported in the Troubled Company Reporter on May 30, 2011,
HearUSA Inc. requires a communications consultant due to the
various audiences that will be impacted by its Chapter 11 case.
Internal and external communications, materials and strategies
will need to be developed to address inquiries from all audiences,
including employees, suppliers, customers, shareholders and the
media. The Debtor said its case is complex and it has limited
internal resources to address its communications needs.
Michelle Campbell, AlixPartners' managing director, will lead the
engagement.
Michelle Campbell
ALIXPARTNERS LLP
2101 Cedar Springs Road, Suite 1100
Dallas, TX 75201
E-mail: MCampbell@alixpartners.com
AlixPartners will charge these hourly rates:
Directors $415
Vice presidents $345
Associates $290
Analysts $195
Paraprofessionals $120
AlixPartners does not believe that in rendering communication
consulting services in the Chapter 11 case it is a "professional"
required to be "disinterested" pursuant to Sec. 101(14) of the
Bankruptcy Code. Nevertheless, AlixPartners said it is a
"disinterested person" within the meaning of Sec. 101(14), and
does not hold or represent an interest adverse to the Debtor's
estate.
AlixPartners received $30,000 from the Debtor as initial advance
retainer on May 10, 2011. During the 90-day period prior to the
petition date, the Debtor paid the firm $47,431 for prepetition
services.
AlixPartners has reconciled its fees and expenses for the period
immediately prior to the date of the Debtors' bankruptcy filing
and is not seeking to apply the retainer against any prepetition
fees or expenses.
To the best of the Debtor's knowledge, AlixPartners is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About HearUSA, Inc.
HearUSA, Inc., which sells hearing aids in 10 states, filed for
Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No.
11-23341) on May 16, 2011, to sell the business for $80 million to
William Demant Holdings A/S. The Debtor said that assets are
$65.6 million against debt of $64.7 million as of March 31, 2010.
HearUSA owes $31.3 million to Siemens Hearing Instruments Inc.,
the principal supplier and primary secured lender.
Judge Erik P. Kimball presides over the case. Brian K. Gart,
Esq., Paul Steven Singerman, Esq., and Debi Evans Galler, Esq., at
Berger Singerman, P.A., represent the Debtor. The Debtor has
tapped Bryan Cave LLP as special counsel; Sonenshine Partners LLC,
investment banker; Development Specialist Inc., restructuring
advisor ans Joseph J. Luzinski as chief restructuring officer; and
AlixPartners LLC, as communications consultant.
Trustee Services, Inc., serves as claims and notice agent.
HearUSA, INC.
The Official Committee of Unsecured Creditors was appointed on
May 25, 2011. Robert Paul Charbonneau and the law firm of
Ehrenstein Charbonneau Calderin represents the Committee.
HEARUSA INC: Bryan Cave to Handle Securities, Litigation Matters
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida
authorized HearUSA, Inc., to employ Bryan Cave, to represent the
Debtor as special corporate, securities, and litigation counsel in
the Chapter 11 case.
As reported in the Troubled Company Reporter on May 30, 2011,
Bryan Cave has represented the Debtor for roughly 18 years as its
outside general corporate and securities counsel. Bryan Cave also
has handled litigation in recent months with the Debtor's primary
secured creditor and supplier, Siemens Hearing Instruments, Inc.
LaDawn Naegle, Esq., at Bryan Cave, attested that her firm does
not hold or represent any interest adverse to the Debtor or its
estate.
The firm's hourly rates are:
Partners and Counsel $425 - $800
Associates $295 - $515
Legal Assistants $200 - $260
The firm can be reached at:
LaDawn Naegle, Esq.
BRYAN CAVE LLP
One Metropolitan Square
211 North Broadway, Suite 3600
St. Louis, MO 63102
E-mail: lnaegle@bryancave.com
- and -
Brian C. Walsh, Esq.
BRYAN CAVE LLP
One Atlantic Center, 14th Floor
1201 W. Peachtree St., NW
Atlanta, GA 30309
E-mail: brian.walsh@bryancave.com
About HearUSA, Inc.
HearUSA, Inc., which sells hearing aids in 10 states, filed for
Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No.
11-23341) on May 16, 2011, to sell the business for $80 million to
William Demant Holdings A/S. The Debtor said that assets are
$65.6 million against debt of $64.7 million as of March 31, 2010.
HearUSA owes $31.3 million to Siemens Hearing Instruments Inc.,
the principal supplier and primary secured lender.
Judge Erik P. Kimball presides over the case. Brian K. Gart,
Esq., Paul Steven Singerman, Esq., and Debi Evans Galler, Esq., at
Berger Singerman, P.A., represent the Debtor. The Debtor has
tapped Bryan Cave LLP as special counsel; Sonenshine Partners LLC,
investment banker; Development Specialist Inc., restructuring
advisor ans Joseph J. Luzinski as chief restructuring officer; and
AlixPartners LLC, as communications consultant.
Trustee Services, Inc., serves as claims and notice agent.
HearUSA, INC.
The Official Committee of Unsecured Creditors was appointed on
May 25, 2011. Robert Paul Charbonneau and the law firm of
Ehrenstein Charbonneau Calderin represents the Committee.
HIGHVIEW POINT: Court Freezes $230M in Illarramendi Ponzi Scam
--------------------------------------------------------------
Samuel Howard at Bankruptcy Law360 reports that a federal judge in
Connecticut on Thursday froze the offshore funds managed by
admitted fraudster Francisco Illarramendi, brushing aside protests
from shareholders that claimed $118 million they invested will be
wrongly meted out to Ponzi victims.
According to Law360, the judge granted the U.S. Securities and
Exchange Commission's bid to freeze $230 million held in Highview
Point Partners LLC hedge funds, finding that the funds likely
contain fraudulent proceeds of Illarramendi's scheme and should
not be distributed to investors.
Highview filed a Chapter 11 petition just before the SEC was to
appear in U.S. District Court seeking to have the Kenwood receiver
take over Highview as well. The receiver called Highview a non-
operating investment adviser that directed "fraudulent and illegal
transfers" between Highview funds and Kenwood funds. He said
principals of Highview have been under investigation by the SEC
and the U.S. Attorney in Connecticut.
Highview Point Partners LLC, a Connecticut investment management
firm focused on emerging markets, filed a Chapter 11 petition
(Bankr. D. Del. Case No. 11-11432) on May 6, 2011. Highview
Point, based in Stamford, estimated as much as $500,000 in assets.
Highview Point Offshore Ltd. and Highview Point Master Fund Ltd.,
both based in the Cayman Islands, and Highview Point LP in
Stamford, are atop the list of 20 largest unsecured creditors.
David B. Stratton, Esq. and Evelyn J. Meltzer, Esq., at Pepper
Hamilton LLP, in Wilmington, Delaware, serve as bankruptcy counsel
to the Debtor. Attorneys at Morrison & Foerster, LLP, serve as
co-counsel.
IMPERIAL CAPITAL: Plan Outline Denied Due to Absent Proposed Order
------------------------------------------------------------------
BankruptcyData.com reports that the U.S. Bankruptcy Court signed
an order in the Imperial Capital Bancorp case declaring the
Debtors' Disclosure Statement "not approved because Debtor's
counsel has not lodged an order and this order is not approved as
to form."
The order continues, "While court is sympathetic that Debtor may
miss its confirmation hearing deadline, Debtor had ample
opportunity to lodge an order and chose not to do so. If the
confirmation hearing must be continued, a hearing date/time is
available on 8/25/11 at 10:30 a.m.; however, Debtor must contact
the courtroom deputy to confirm this date."
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. FTI Consulting Inc. serves as its financial advisor.
The Company disclosed $40,439,363 in assets and $98,721,610 in
liabilities.
Tiffany L. Carroll, the U.S. Trustee for Region 15, appointed
three members to the official committee of unsecured creditors in
the Debtor's case.
The Debtor's proposed Liquidating Plan of Reorganization provides
that based upon assets available for distribution, creditors of
the Company will not be paid in full under the Plan. 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.
INCREDIBLE DAVE'S: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Incredible Dave's, LLC
3149 NE 163rd St.
North Miami Beach, FL 33160
Bankruptcy Case No.: 11-32944
Chapter 11 Petition Date: June 15, 2011
Court: United States Bankruptcy Court
Western District of Kentucky (Louisville)
Debtor's Counsel: Fred R. Simon, Esq.
3339 Taylorsville Road
Louisville, KY 40205
Tel: (502) 485-9200
Fax: (502) 485-9220
E-mail: fredrun3@gmail.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 20 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/kywb11-32944.pdf
The petition was signed by Dave Lawrence, president/CEO.
INNKEEPERS USA: Plan Draws Objections, Hearing Thursday
-------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the Chapter 11 plan for hotel owner Innkeepers USA
Trust drew objections from its primary secured creditors and from
a preferred shareholder. The objections will be aired when
Innkeepers' plan comes up for approval at a June 23 confirmation
hearing.
The report relates that Midland Loan Services Inc., the servicer
for $825 million of fixed-rate mortgages, and Lehman Ali Inc., the
holder of $238 million in floating-rate mortgages, objected to
approval of the plan by the bankruptcy court on many the same
grounds. They both say that $3.5 million earmarked for an ad hoc
committee of preferred shareholders is improper. They also
explain why the plan for an Innkeepers holding company can't be
approved because it's likely to be rejected by the only class of
voting creditors.
Mr. Rochelle's report adds that One East Capital Advisors LP, a
preferred shareholder, contends in its June 17 court filing that
the plan for one of the Innkeepers companies improperly gives
releases to Apollo Investment Corp., Innkeepers' owner. For its
preferred stock, One East describes the nothing to 6% it might
receive as an "uncertain small distribution" that "impermissibly
takes value" by precluding suit against Apollo. One East contends
that Apollo gave nothing in return for the release and that the
release is not required by the purchaser of the property. One
East also objects to how the plan would give $3.5 million to a
group of ad hoc preferred shareholders when other shareholders
would receive nothing. One East said the ad hoc committee's legal
fees are $2 million, meaning that preferred shareholders on the ad
hoc committee are receiving $1.5 million when other preferred
holders aren't.
According to Mr. Rochelle, Lehman Ali, a non-bankrupt subsidiary
of Lehman Brothers Holdings Inc., similarly objects to the
$3.5 million payment. Lehman goes further and argues that the
plan can't be used to pay a $500,000 bonus to Innkeepers' chief
executive. Midland likewise opposes the $3.5 million payment and,
like Lehman, argues that the holding company's plan can't be
approved. In addition, the holding company plan, Midland says,
improperly cuts off its claim on a guarantee. If the guarantee
claim isn't permitted, several million dollars will improperly go
to Apollo.
Cerberus Capital Management and Chatham Lodging Trust won the
bankruptcy auction for most of the Debtor's hotels with their
$1.12 billion offer. They beat a $970.7 million lead offer from
Lehman Ali and Five Mile Capital Partners. Lehman holds the
mortgage on 19 of the properties, and the rest are attached to a
mortgage held by Midland Loan Services Inc.
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 (Bankr. S.D.N.Y. Case No. 10-13800) on July 19, 2010.
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.
The confirmation hearing for approval of Innkeepers' Chapter 11
plan is set for June 23.
JACKSON HEWITT: U.S. Trustee Appoints RR Donnelley to Committee
---------------------------------------------------------------
Reuters reports a U.S. bankruptcy trustee appointed printing
services firm RR Donnelley & Sons Co to the official committee of
unsecured creditors in the Jackson Hewitt Tax Service Inc.'s
bankruptcy case.
Other members of the committee include Christian and Elizabeth
Harper and Sherita Fugate, who had both filed separate lawsuits
against the tax preparer.
About Jackson Hewitt Tax Service
Parsippany, New York-based Jackson Hewitt Tax Service Inc., aka
JHTS Inc., provides computerized preparation services for federal,
state and local individual income tax returns in the United States
through a nationwide network of franchised and company-owned
offices operating under the brand name Jackson Hewitt Tax Service.
The Company has 700 franchisees who collectively operated a total
of 4,846 offices. The Company also operates 1,110 company-owned
offices.
Jackson Hewitt and its affiliates filed for Chapter 11 bankruptcy
(Bankr. D. Del. Lead Case No. 11-11587) on May 24, 2011. Judge
Mary F. Walrath presides over the case. Skadden, Arps, Slate,
Meagher & Flom LLP, serves as the Debtors' bankruptcy counsel.
Alvarez & Marsal North America, LLC, serves as their financial
advisor. Moelis & Company LLC acts as investment banker. The
Garden City Group, Inc., serves as the Debtors' Claims and
Noticing Agent. The Debtors also tapped Deloitte & Touche to
serve as tax advisors and Kekst & Company to serve as
communications advisors.
The Debtors filed a Joint Prepackaged Plan of Reorganization and
Disclosure Statement together with their petitions. Under the
terms of the Plan, Jackson Hewitt's current secured lenders will
receive their pro rata share of a new $100 million term loan and
all of the equity in the reorganized enterprise. The Company also
anticipates entering into a new $115 million revolving credit
facility upon consummation of the Plan. It is anticipated that
upon consummation of the proposed Plan, Jackson Hewitt's new
equity will be privately held. All of the Company's existing
common stock will be cancelled upon Jackson Hewitt's emergence
from bankruptcy.
On May 23, 2011, the Debtors commenced solicitation of votes on
the Plan from the lenders. No other classes of creditors or
stockholders were solicited, as each such class is either being
paid in full or receiving no recovery and hence, is deemed either
to accept or reject the Plan, respectively. The Debtors received
overwhelming acceptances to the Plan from the lenders.
Mark McDermott, Esq., at Skadden Arps, told the Bankruptcy Court
at a May 25 hearing that investor and financier Bayside Capital is
in line to be "a significant majority" owner of Jackson Hewitt.
Bayside Capital has $4.5 billion under management. Bayside is the
largest of 10 secured lenders that Jackson Hewitt owes a total of
$357 million.
Mr. McDermott also told the Court that Jackson Hewitt, worth an
estimated $225 million, does not have sufficient value to cover
the secured debt.
The Court set a July 8 court date to consider confirmation of
Jackson Hewitt's Chapter 11 plan.
JETBLUE AIRWAYS: Files Form S-8; Registers 23MM Common Shares
-------------------------------------------------------------
JetBlue Airways Corporation filed a Form S-8 Registration
Statement with the U.S. Securities and Exchange Commission to
register under the Securities Act, the offer and sale of (i)
15,000,000 shares of Common Stock, par value $0.01 per share, of
the Company issuable pursuant to the 2011 Incentive Plan and (ii)
8,000,000 shares of Common Stock of the Company issuable pursuant
to the 2011 Stock Purchase Plan.
The Board of Directors of the Company adopted, subject to
stockholder approval, the 2011 Incentive Plan and the 2011 Stock
Purchase Plan. On May 26, 2011, the 2011 Incentive Plan and the
2011 Stock Purchase Plan were approved by the stockholders at the
Company's annual meeting of stockholders.
A full-text copy of the prospectus is available for free at:
http://is.gd/01Arb8
About JetBlue Airways
JetBlue Airways Corp., based in Forest Hills, New York, operates a
low-cost, point-to-point airline from a hub in New York. JetBlue
serves 60 cities with 600 daily non-stop flights.
The Company's balance sheet at March 31, 2011, showed $6.84
billion in total assets, $5.17 billion in total liabilities and
$1.67 billion in total stockholders' equity.
* * *
As reported by the TCR on June 10, 2011, Moody's Investors Service
raised its Corporate Family and Probability of Default ratings of
JetBlue Airways each to B3 from Caa1. "The upgrade of the
Corporate Family Rating reflects Moody's belief that JetBlue can
retain a majority of the improvement in credit metrics that it has
achieved since the most recent trough in early 2009. Its focus on
increasing service in certain markets where U.S. airline peers
have retrenched and first bag free marketing initiative seem to be
drawing traffic to its expanding network," said Moody's Airline
Analyst, Jonathan Root. Revenue passengers grew by over 8% through
the first four months of 2011 against a 2.6% increase in capacity.
Leading unit costs, including and excluding fuel, of the U.S.
carriers, industry-wide capacity discipline and pricing actions to
help offset the current higher cost of fuel should help JetBlue
sustain its liquidity profile, which also supports the ratings
upgrade.
In November 2010, Standard & Poor's Ratings Services affirmed its
ratings, including its 'B-' corporate credit rating, on Forest
Hills, New York-based JetBlue Airways Corp. At the same time, S&P
revised its outlook on the rating to positive from stable. The
recovery rating on senior unsecured debt remains '6', indicating
S&P's expectations of a negligible (0%-10%) recovery in a default
scenario. S&P noted that while JetBlue has been profitable in six
of the last seven quarters, its financial profile remains highly
leveraged, with EBITDA interest coverage of 2.5x, funds flow to
debt of 15.7%, and debt to capital of 75.2%.
JMH DEVELOPMENT: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: JMH Development, LLC
480 Airport Industrial Drive
Southaven, MS 38671
Bankruptcy Case No.: 11-25968
Chapter 11 Petition Date: June 14, 2011
Court: United States Bankruptcy Court
Western District of Tennessee (Memphis)
Judge: Paulette J. Delk
Debtor's Counsel: Russell W. Savory, Esq.
GOTTEN, WILSON, SAVORY & BEARD, PLLC
88 Union Avenue, 14th Floor
Memphis, TN 38103
Tel: (901) 523-1110
E-mail: russell.savory@gwsblaw.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 James M. Harris, Jr., member.
Affiliate that filed separate Chapter 11 petition:
Petition
Debtor Case No. Date
------ -------- ----
M&H Construction, Inc. 10-32470 11/12/2010
KT SPEARS: 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 KT Spears Creek, LLC have
expressed interest in serving on a committee.
The U.S. Trustee reserves the right to appoint such a committee
should interest developed among the creditors.
About KT Spears
KT Spears Creek, LLC, is a real estate holding company. One of
these real estate holding includes an operating apartment complex
and an additional area on which a second apartment complex may be
constructed. The operating apartment complex, Greenhill Parish
Crossing Apartments Homes, located in Elgin, S.C., is
substantially occupied. The Debtor's remaining two real estate
holdings are comprised of undeveloped commercial land.
KT Spears Creek filed for Chapter 11 bankruptcy (Bankr. S.D. Tex.
Case No. 11-33991) in Houston, Texas, on May 3, 2011, with Judge
Letitia Z. Paul presiding. Magdalene Duchamp Conner, Esq., at
Okin Adams & Kilmer LLP, serves as the Debtor's bankruptcy
counsel. The Debtor disclosed $13,104,543 in assets and
$29,851,834 in liabilities as of the Chapter 11 filing.
KURRANT MOBILE: Delays Report for Fiscal Yr. Ended Feb. 28
----------------------------------------------------------
Cogito Media Group, Inc., formerly known as Kurrant Mobile
Catering, Inc., disclosed that the filing of its Annual Report on
Form 10-K for fiscal year ended Feb. 28, 2011, is due June 15,
2011. The Company filed an extension on Form 12b-25 on May 31,
2011, providing until June 15, 2011, within which to file its
Annual Report.
On May 12, 2011, the Company filed a Current Report on Form 8-K
announcing the acquisition from Robert Brouillette of the
remaining 100 shares of categorie A common stock of Transit
Publishing Inc., a private Canadian corporation. Thus, after
consummation of the acquisition, TPI became the wholly-owned
subsidiary of the Company.
Therefore, based on the recent acquisition of TPI as the Company's
wholly-owned subsidiary, preparation and audit of the year end
financial statements for the Company has presented certain
complexities and issues. Therefore, the Company and its auditors
need additional time to prepare and audit the financial
statements. The Company acknowledges that it will be delinquent
in the filing of its Annual Report. Management anticipates that
the Annual Report will be filed by Friday, June 24, 2011.
About Kurrant Mobile
Montreal, Quebec-based Kurrant Mobile Catering, Inc., operates in
a single business segment that includes the publication and
distribution of books and eBooks. The Company sells its products
to distributors throughout the world.
The Company's balance sheet at Nov. 30, 2010, showed $1.02 million
in total assets, $1.71 million in total liabilities, and a
$686,774 stockholders' deficit.
According to the Form 10-Q for the quarter ended Nov. 30, 2010,
"The Company has incurred net losses and has negative cash flows
from its operations. These factors raise substantial doubt
regarding Kurrant Mobile's ability to continue as a going concern.
Realization value may be substantially different from carrying
values as shown and these financial statements do not include any
adjustments to the recoverability and classification of recorded
asset amounts and classification of liabilities that might be
necessary should Kurrant Mobile be unable to continue as a going
concern. The continuation of Kurrant Mobile as a going concern is
dependent upon the continued financial support from its
shareholders, the ability of Kurrant Mobile to obtain necessary
equity financing to continue operations, and the attainment of
profitable operations."
LAKE AT LAS VEGAS: Judge Dismisses Suits Filed by Bass Brothers
---------------------------------------------------------------
Steve Green at VegasInc reports that U.S. Bankruptcy Judge Linda
Riegle dismissed lawsuits filed by two of the billionaire Bass
brothers and other investors in the Lake Las Vegas resort
community against Credit Suisse AG and other lenders.
According to the report, the dismissals by Judge Riegle involved
lawsuits focused on a narrow legal issue. Her rulings likely will
only delay a probable legal showdown between the investors and
Credit Suisse over allegations the international lender provided
predatory "loan-to-own" loans to Lake Las Vegas, the Yellowstone
Mountain Club and other resort developments around the country
during the boom years of the mid 2000s.
VegasInc relates that critics said these loans involved appraisals
that were inflated at the insistence of Credit Suisse. They say
that after Credit Suisse encouraged investors to use the loan
money to pay themselves profits in the form of capital
distributions, the developments failed under crushing loan terms
and Credit Suisse then seized them through foreclosure or
bankruptcy. Credit Suisse has denied allegations of wrongdoing
with these loans.
Most of the damages won by the trustee would be turned over to
Credit Suisse and some 125 lenders that had participated in the
securitization of Credit Suisse's $670 million loan to Lake Las
Vegas.
Attorneys for the Bass brothers and fellow investors associated
with Transcontinental Corp. and the late Lake Las Vegas founder
Ron Boeddeker of Santa Barbara, California, retaliated, filing
suits in the bankruptcy case against the trustee, Credit Suisse
and scores of lenders, says VegasInc.
Mr. Green adds these suits charged that receipt of damages by
Credit Suisse and the other lenders would violate the terms of the
original non-recourse loans provided to the development by Credit
Suisse.
Attorneys for the trustee, Credit Suisse and other lenders argued
the investors were trying to rewrite the initial loan contract as
well as the Chapter 11 reorganization plan approved by Riegle last
year.
Judge Riegle rejected the investors' arguments, saying the
trustee's claims for damages on behalf of the bankruptcy estate
are independent of the initial loan contract.
About Lake Las Vegas Resort
Lake Las Vegas Resort is a 3,592 acre master-planned residential
development and resort community located approximately 20 miles
east of the center of Las Vegas, Nevada. Lake at Las Vegas Joint
Venture, LLC, and LLV-1, LLC and their jointly-affiliated debtors
filed separate Chapter 11 petitions (Bankr. D. Nev. Lead Case No.
08-17814) on July 17, 2008. Lake at Las Vegas Joint Venture, LLC,
estimated of $100 million to $500 million, and debts of $500
million to $1.0 billion in its Chapter 11 petition. Courtney E.
Pozmantier, Esq., Martin R. Barash, Esq., at Klee, Tuchin,
Bogdanoff & Stern LLP, Jason D. Smith, Esq., at Santoro, Driggs,
Walch, Kearney, Holley & Thompson, Jeanette E. McPherson, Esq.,
Lenard E. Schwartzer, Esq., at Schwartzer & McPherson Law Firm,
represented the Debtors as counsel. Kaaran E. Thomas, Esq., Ryan
J. Works, Esq., at McDonald Carano Wilson LLP, represented the
Official Committee of Unsecured Creditors as counsel. On June 21,
2010, the Debtors filed the Third Amended Chapter 11 Plan of
Reorganization, which was confirmed by Order dated July 1, 2010.
Lake Las Vegas emerged from Chapter 11 that month.
LANDAMERICA FIN'L: Court OKs $14 Million Ch. 11 Deal With SunTrust
------------------------------------------------------------------
Hilary Russ at Bankruptcy Law360 reports that U.S. Bankruptcy
Judge Kevin Huennekens on Thursday approved a $14.3 million
settlement between SunTrust Banks Inc. and the liquidation trustee
charged with recovering money for creditors of a LandAmerica
Financial Group Inc. subsidiary over the sale of auction rate
securities.
With the agreement, approved at a hearing by Judge Huennekens,
recoveries for many of the creditors of LandAmerica 1031 Exchange
Services Inc. will be 66.5%, following previous settlements,
including a $95.5 million deal with a second bank in October,
according to Law360.
About LandAmerica Financial
LandAmerica Financial Group, Inc., provided real estate
transaction services with offices nationwide and a vast network of
active agents. LandAmerica Financial Group and its affiliate
LandAmerica 1031 Exchange Services, Inc. filed for Chapter 11
protection Nov. 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994).
Attorneys at Willkie Farr & Gallagher LLP and McGuireWoods LLP
served as co-counsel. Zolfo Cooper served as the restructuring
advisor. Epiq Bankruptcy Solutions served as claims and notice
agent.
Attorneys at Akin Gump Strauss Hauer & Feld LLP and Tavenner &
Beran, PLC, served as counsel to the Creditors Committee of 1031
Exchange. Bingham McCutchen LLP and LeClair Ryan served as
counsel to the Creditors Committee of LFG.
In its bankruptcy petition, LFG reported total assets of
$3,325,100,000, and total debts of $2,839,800,000 as of
Sept. 30, 2008.
On March 6, 2009, affiliate LandAmerica Assessment Corporation,
aka National Assessment Corporation, filed its own Chapter 11
petition. Affiliate LandAmerica Title Company filed for for
Chapter 11 relief on March 27, 2009. LandAmerica Credit
Services, Inc., filed for Chapter 11 in July 2009.
LandAmerica filed a Joint Plan of Liquidation on Sept. 9, 2009.
The Bankruptcy Court confirmed that plan on Nov. 23, 2009, and the
plan took effect on Dec. 7, 2009.
LENOX 126: Section 341(a) Meeting Scheduled for June 24
-------------------------------------------------------
The U.S. Trustee for Region 2 will convene a meeting of creditors
in Lenox 126 Realty LLC's Chapter 11 case on June 24, 2011, at
3:00 p.m. The meeting will be held at the Office of the United
States Trustee, 80 Broad Street, Fourth Floor, New York City.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
About Lenox 126 Realty
Staten Island-based real estate investor Lorenzo De Luca, through
his Lenox 126 Realty LLC, filed for Chapter 11 protection (Bankr.
S.D.N.Y. Case No. 11-12275) on May 12, 2011, to block a
foreclosure sale at his apartment building at 321 Lenox Avenue in
New York. Mr. De Luca paid $9.1 million for the building in 2006.
Mr. De Luca defaulted on a $7.5 million loan from Chinatrust bank,
which later sold the first mortgage to Delshah Capital. In March,
State Supreme Court Justice Jane Solomon ordered the property be
sold at auction.
In its schedules, Lenox 126 Realty disclosed $10,377,689 in assets
and $14,718,905 in liabilities as of Chapter 11 filing. Judge
Sean H. Lane presides over the case.
LEVI STRAUSS: President and CEO John Anderson to Retire
-------------------------------------------------------
Levi Strauss & Co. announced that president and CEO John Anderson
is retiring after a 32 year career with the Company effective
Sept. 1, 2011. Mr. Anderson is also resigning from the Company's
Board of Directors. LS&Co. Board of Directors has appointed
Charles (Chip) V. Bergh as president and chief executive officer
effective Sept. 1, 2011. He will also join the Levi Strauss & Co.
Board of Directors. Mr. Bergh, 53, most recently served as the
Group President, Global Male Grooming of The Procter & Gamble
Company.
"We would like to thank John Anderson for the countless
contributions he has made to our company throughout the past
thirty-two years," Richard L. Kauffman, Chairman of the Board of
Directors of Levi Strauss & Co., commented. "Under his
leadership, Levi Strauss & Co. has completed a successful brand
transformation, honed its focus on brand management and made
investments in key growth platforms to leverage the strength of
our market-leading brands."
John Anderson said, "It has been my privilege to witness the
transformation of this exceptional Company throughout the last 32
years. I am proud of our accomplishments, and I look forward to
seeing the talented people of Levi Strauss & Co. continue to drive
the company forward."
During his 28 year career with The Procter & Gamble Company, Chip
Bergh served in a number of leadership positions with increasing
levels of complexity and scope, most recently serving as Group
President, Global Male Grooming where he was responsible for all
aspects of branding, innovation and key investment decisions of
the $7 billion global business. In this role, he led the global
expansion of Gillette Fusion to more than 80 markets outside of
North America building a $2 billion brand which has continued to
deliver above expectations increasing Fusion brand global market
share versus year ago for every month since its launch in
February, 2006 (63 consecutive months).
Mr. Bergh was the driving force behind a number of successful
product launches, including Fusion ProGlide and Fusion ProSeries,
and multi-platform marketing campaigns, including the 2010 award-
winning campaign for Old Spice which drove The Procter & Gamble
Company's Male Personal Cleansing business to market leadership in
North America. He has led multiple acquisitions, and led the
successful on-the-ground integration of Gillette, the largest
acquisition ever in the FMCG industry ($57 billion). He also
completed an extended tenure in Asia where he spearheaded
expansion strategies in a number of emerging markets. Prior to
joining The Procter & Gamble Company, Mr. Bergh served as a
Captain in the U.S. Army. He received his B.A. from Lafayette
College.
Mr. Bergh previously served on the Board of Directors for VF
Corporation, on the Economic Development Board, Singapore, and was
a member of the US-ASEAN Business Council, Singapore.
"Chip Bergh is a strategic leader with a proven ability to build
and grow brand powerhouses, bring new products to the mass market,
develop innovative marketing campaigns, and capitalize on digital
platforms to successfully drive brand awareness," said Richard L.
Kauffman. "This combined with his track record of operational
excellence, disciplined execution, significant international
experience, and ability to cultivate high performing teams will be
critical assets to our company as we continue to identify creative
ways to meet the ever-changing needs of consumers in markets
around the world."
"I am truly humbled and excited to join Levi Strauss & Co. to lead
the next phase of evolution and growth of its iconic brands," said
Chip Bergh. "I look forward to working with the Company's
impressive leadership team and talented employees to build on its
strong position as a consumer industry leader for the benefit of
shareholders, consumers and other stakeholders."
About Levi Strauss & Co.
Headquartered in San Francisco, California, Levi Strauss & Co. --
http://www.levistrauss.com/-- is one of the world's leading
branded apparel companies. The Company designs and markets jeans,
casual and dress pants, tops, jackets and related accessories, for
men, women and children under the Levi's(R), Dockers(R) and
Signature by Levi Strauss & Co.(TM). The Company markets its
products in three geographic regions: Americas, Europe, and Asia
Pacific.
The Company reported net income of $149.44 million on
$4.33 billion of net sales for the year ended Nov. 28, 2010,
compared with net income of $150.71 million on $4.02 billion of
net sales for the year ended Nov. 29, 2009.
The Company's balance sheet at Nov. 28, 2010 showed $3.14 billion
in total assets, $3.34 billion in total liabilities, and a
$208.80 million stockholders' deficit.
* * *
The Company carries a 'B+' corporate credit rating from Standard &
Poor's, a 'B1' corporate family rating from Moody's Investors
Service and a 'BB-' issuer default rating from Fitch Ratings.
As reported by the TCR on March 24, 2011, Fitch Ratings has
downgraded its Issuer Default Rating on Levi Strauss & Co. to 'B+'
from 'BB-'. The downgrade of the IDR reflects Levi's soft
operating trends and margin compression, continued high financial
leverage, and Fitch's expectation that Levi's financial profile
will not show meaningful improvement in the next one to two years.
MAGIC BRANDS: Deel LLC Has Confirmed Liquidating Plan
-----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the former owner of the Fuddruckers restaurant chain
was given approval of its liquidating Chapter 11 plan when the
bankruptcy judge in Delaware signed a confirmation order last
week. Restaurant operator Luby's Inc. bought the Fuddruckers
restaurant chain in July for $63 million. The Fuddruckers chain
then changed its name from Magic Brands LLC to Deel LLC and filed
a liquidating Chapter 11 plan in January.
According to the report, with secured claims paid, unsecured
creditors with claims ranging between $24.3 million and $37.2
million were slated for a recovery between 37.4% and 61%, the
disclosure statement said.
About Magic Brands
Headquartered in Austin, Texas, Magic Brands, LLC --
http://www.fuddruckers.com/-- operated 62 Fuddruckers locations
in 11 states and 3 Koo Koo Roo restaurants in California.
Magic Brands and its operating units filed for Chapter 11
protection on April 21, 2010 (Bankr. D. Del. Lead Case No.
10-11310). It estimated assets of up to $10 million and debts at
$10 million to $50 million in its Chapter 11 petition. Affiliate
Fuddruckers, Inc., also filed, estimating assets and debts at
$50 million to $100 million.
FocalPoint Securities, LLC, serves as investment banker to Magic
Brands, and Goulston & Storrs serves as lead bankruptcy counsel.
Kurtzman Carson Consultants, LLC, is the claims and notice agent.
The Official Committee of Unsecured Creditors has tapped Kelley
Drye & Warren LLP as counsel and Klehr Harrison Harvey Branzburg
LLP as co-counsel.
Magic Brands in July 2010 closed the sale of the Fuddruckers
stores and franchise business to restaurant operator Luby's Inc.
for $63.5 million. Magic Brands changed its name to Deel LLC
following the Luby's sale.
MARCAL PAPER: Postpetition Pension Liability Is Admin Expense
-------------------------------------------------------------
The U.S. Court of Appeals for the Third Circuit upheld a district
court ruling that under the Employee Retirement Income Security
Act, as amended by the Multiemployer Pension Plan Amendments Act,
the portion of withdrawal liability that is attributable to the
post-petition time period constitutes an administrative expense
entitled to priority under the Bankruptcy Code. The District
Court overturned a decision in Marcal Paper Mills, Inc.'s
bankruptcy case. Marcal Paper Mills LLC, which purchased the
Debtor's assets and assumed liability for this claim, took an
appeal, arguing that the entire claim for withdrawal liability
should be classified as a general unsecured claim.
Circuit Judge Dolores Sloviter, who penned the decision, noted
that the dispute is an issue of first impression in the Third
Circuit.
According to Judge Sloviter, it is clear that the covered
employees were required to perform work post-petition to keep
Marcal in operation, unquestionably conferring a benefit to the
estate. Pursuant to the continued-collective bargaining agreement
and pension plan, Marcal promised to provide pension benefits in
exchange for that post-petition work. The portion of the
withdrawal liability which corresponds to that post-petition work
is owed by Marcal LLC in fulfillment of the promise it assumed as
part of its purchase of Marcal's assets to provide pension
benefits in consideration for that necessary post-petition work.
Therefore, the requirements of 11 U.S.C. Sections 503(b)(1)(A) and
507(a)(2) of the Bankruptcy Code are satisfied.
The Second Circuit is the only other Court of Appeals to address
this issue in In re McFarlin's, Inc., 789 F.2d.
A copy of the Third Circuit's Opinion, dated June 16, 2011, is
available at http://is.gd/Ht1ZPpfrom Leagle.com.
The panel consists of Circuit Judges Sloviter and Thomas Hardiman,
and the Hon. C. Darnell Jones, II, District Judge for the United
States District Court for the Eastern District of Pennsylvania,
sitting by designation.
Marcal is represented in the appeal by:
Gerald H. Gline, Esq.
COLE, SCHOTZ, MEISEL, FORMAN & LEONARD
25 Main Street-Court Plaza North
P.O. Box 800
Hackensack, NJ 07601.
Tel: 201-525-6240
Fax: 201-678-6240
E-mail: ggline@coleschotz.com
- and -
James M. Hirschhorn, Esq.
Andrew H. Sherman, Esq.
SILLS, CUMMIS & GROSS
One Riverfront Plaza
Newark, NJ 07102
Tel: (973) 643-5288
E-mail: jhirschhorn@sillscummis.com
asherman@sillscummis.com
The multiemployer fund is represented by:
David Grossman, Esq.
Paul A. Montalbano, Esq.
COHEN, LEDER, MONTALBANO & GROSSMAN LLC
1700 Galloping Hill Road
Kenilworth, NJ 07033
Tel: (908) 298-8800
Fax: (908) 298-9333
Based in Elmwood Park, New Jersey, Marcal Paper Mills Inc. --
http://www.marcalpaper.com/-- was a privately-held business of
producing finished paper products. It filed for chapter 11
protection (Bankr. D. N.J. Case No. 06-21886) on Nov. 30, 2006.
Attorneys at Andora & Romano, LLC; Cole, Schotz, Meisel, Forman &
Leonard, P.A.; Windels, Marx, Lane & Mittendorf, LLP; Lowenstein
Sandler PC; and Charles V. Bonin, Esq., represent the Debtor as
counsel. The Debtors selected Logan and Company Inc. as claims
agent. In its schedules filed with the Court, the Debtor
disclosed total assets of $178,626,436 and total debts of
$178,890,725.
MARCAL PAPER: Pension Withdrawal Liability Prorated as Admin. Cost
------------------------------------------------------------------
The U.S. Court of Appeals in Philadelphia ruled in a June 16
opinion that withdrawal liability from a multi-employer pension
plan is an expense of administration of a Chapter 11 case based on
a proration for services performed during bankruptcy. The 3rd
Circuit, in an opinion by Circuit Judge Dolores K. Sloviter,
upheld the district court and ruled that a prorated portion of the
liability is an administration expense.
Mr. Rochelle notes that although lower courts considered the
question, the 3rd Circuit is the only court of appeals to rule on
the issue. While the U.S. Court of Appeals in Manhattan reached
the same conclusion in a 1986 case called In re McFarlin's, the
statement was so-called non-controlling dicta because it was
unnecessary for a decision in the case.
Based in Elmwood Park, New Jersey, Marcal Paper Mills Inc. --
http://www.marcalpaper.com/-- was a privately-held business of
producing finished paper products. It filed for chapter 11
protection (Bankr. D. N.J. Case No. 06-21886) on Nov. 30, 2006.
Attorneys at Andora & Romano, LLC; Cole, Schotz, Meisel, Forman &
Leonard, P.A.; Windels, Marx, Lane & Mittendorf, LLP; Lowenstein
Sandler PC; and Charles V. Bonin, Esq., represent the Debtor as
counsel. The Debtors selected Logan and Company Inc. as claims
agent. In its schedules filed with the Court, the
Debtor disclosed total assets of $178,626,436 and total debts of
$178,890,725.
MEDICAL CONNECTIONS: Effects a 1-for-10 Reverse Stock Split
-----------------------------------------------------------
Medical Connections Holdings, Inc., announced that it will effect
a 1-for-10 reverse stock split, that will become effective on the
opening of trading on Monday, June 20, 2011.
As a result of the reverse stock split, each 10 shares of the
Company's common stock that are issued and outstanding will be
automatically converted into one issued and outstanding share of
common stock. The reverse stock split affects all issued and
outstanding shares of the Company's common stock, preferred stock
and common stock underlying stock options and warrants immediately
prior to the effectiveness of the reverse stock split. Each
shareholder's new share count will be rounded up to the nearest
whole share if the number of shares is not evenly divisible by the
ratio of the reverse stock.
The reverse stock split will not affect any shareholder's
ownership percentage of the Company's common stock, except to the
limited extent that the reverse split would result in any
fractional shares being rounded up. The reverse stock split will
reduce the number of shares of the Company's common stock
outstanding from approximately 113.6 million to approximately 11.3
million shares. The number of authorized shares of common stock
will be reduced from 200 million to 20 million shares and all
authorized and issued preferred shares are reduced on a
proportional basis, as well.
It is expected that the OTC Bulletin Board will append a "D" to
the company's ticker symbol to indicate the completion of the
reverse split and that after a 20 day trading period following
effectiveness of the reverse split, the ticket symbol will revert
to "MCTH." In addition, the common stock will also trade under a
new CUSIP number, 58455T203, effective as of June 20, 2011.
When the reverse split takes effect, shareholders holding
certificated shares or shares through a brokerage account will
have their shares automatically, adjusted to reflect the reverse
stock split on the effective date. The issuance of new stock
certificates will not be required, however, shareholders may, if
they choose, obtain a new certificate from the Company's transfer
agent for a customary exchange and mailing fee.
"We believe the reverse stock split will better position our
company to apply for a listing on a national securities market or
exchange. Our goal is to work towards meeting their listing
standards, and the reverse split of our shares will place us one
significant step closer to achieving that goal. Moreover, the
Company believes that a higher share price would broaden the
Company's appeal to investors," said Jeffrey Rosenfeld, the CEO of
Medical Connections Holdings, Inc.
About Medical Connections
Boca Raton, Fla.-based Medical Connections Holdings, Inc., is a
healthcare staffing company which provides staffing services for
allied professionals and nurses to the Company's clients on a
national basis.
The Company's balance sheet at March 31, 2011, showed $3.3 million
in total assets, $538,039 in total liabilities, and stockholders'
equity of $2.8 million.
As reported in the TCR on April 6, 2011, De Meo, Young, McGrath,
in Boca Raton, Fla., expressed substantial doubt about Medical
Connections Holdings' ability to continue as a going concern,
following the Company's 2010 results. The independent auditors
noted that of the Company's dependence on outside financing, lack
of sufficient working capital, and recurring losses from
consolidated operations.
MERUELO MADDUX: Judge to Approve Charleston Reorganization Plan
---------------------------------------------------------------
Ryan Vaillancourt at Los Angeles Downtown News reports that
Meruelo Maddux Properties is poised for a shake-up that would see
the ouster of its top two executives, including founder Richard
Meruelo.
According to the report, after two years of often bitterly
contested Chapter 11 bankruptcy proceedings, U.S. Bankruptcy
Court Judge Victoria Kaufman is expected to rule soon in favor of
a reorganization plan from shareholders Charlestown Capital
Advisors and Hartland Asset Management.
Judge Kaufman approved the Plan, which would infuse the struggling
real estate firm with $23.6 million in equity from two investors
in addition to replacing the firm's executives, in May. A Meruelo
motion asking the judge to reconsider her decision was denied on
Monday.
The court is slated to consider revisions to the Charlestown plan
this week, but Judge Kaufman is expected to finalize the plan in
July, the report says.
According to court documents, the Charlestown plan would use some
of the new equity to pay for physical improvements at several MMPI
industrial properties in order to reduce the firm's vacancy rate.
Despite an industrial vacancy rate in Downtown of approximately
3%, MMPI's vacancy rate was nearly 40% in December, according to
court filings.
The report relates that the plan could involve the sale of several
Downtown properties. Ted McGonagle, a former MMPI employee
working with Charlestown, who would serve as COO under the firm's
reorganization proposal, told the court in December that the new
company would aim to sell holdings including the property that
houses J Restaurant & Lounge, the Union Lofts and a 32,000-square-
foot produce facility at 788 S. Alameda St.
About Meruelo Maddux
Meruelo Maddux and its affiliates filed for Chapter 11 protection
(Bankr. C.D. Calif. Lead Case No. 09-13356) on March 26, 2009.
John N. Tedford, IV, Esq., and Enid M. Colson, Esq., at Danning
Gill, Diamond & Kollitz, LLP, in Los Angeles, represent the
Debtors in their restructuring effort. The Debtors' financial
condition as of Dec. 31, 2008, showed $681,769,000 in assets
and $342,022,000 of debts.
FTI Consulting, Inc., serves as the Debtors' financial advisors,
Ernst & Young as independent auditors and tax advisors, DLA Piper
LLP (US) as special securities and litigation counsel, and Waldron
& Associates, Inc. as real estate appraiser.
The U.S. Trustee has appointed an official committee of unsecured
creditors and a separate official shareholders' committee in the
case. SulmeyerKupetz, APC, serves as the Creditors Committee's
counsel and Kibel Green, Inc., as its financial advisor. The
equity committee has sought to retain Ron Orr & Professionals,
Inc., Rodiger Law Office, and Jenner & Block as counsel, and Kibel
Green, Inc. as its financial advisor.
The Debtors; Legendary Investors Group No. 1, LLC, and East West
Bank; and Charlestown Capital Advisors, LLC and Hartland Asset
Management Corporation have proposed rival reorganization plans in
the case. In mid-January 2011, the Debtors struck a deal with the
Legendary Group to drop the group's competing plan.
The Debtors have hired Kurtzman Carson Consultants as solicitation
and balloting agent.
Legendary Investors Group No. 1, LLC, is represented in the case
by Jeremy V. Richards, Esq., and Jeffrey W. Dulberg, Esq., at
Pachulski Stang Ziehl & Jones LLP; and Surjit P. Soni, Esq., at
The Soni Law Firm. East West Bank is represented by Curtis C.
Jung, Esq., and Monica H. Lin, Esq., at Jung & Yuen, LLP, and
Elmer Dean Martin III, Esq.
Charlestown Capital Advisors, LLC and Hartland Asset Management
Corporation are represented in the case by Christopher E. Prince,
Esq., Matthew A. Lesnick, Esq., and Andrew R. Cahill, Esq., at
Lesnick Prince LLP.
METAMORPHIX INC: Jeoffrey L. Burtch Appointed as Chapter 7 Trustee
------------------------------------------------------------------
Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed
Jeoffrey L. Burtch as interim trustee/trustee of the estates of
MetaMorphix Inc., and MMI Genomics Inc.
On April 20, 2011, the Hon. Mary F. Walrath granted the Debtors'
motion to convert the Chapter 11 case to one under Chapter 7 of
the Bankruptcy Code.
Headquartered in Beltsville, Maryland Metamorphix, Inc. --
http://www.metamorphixinc.com-- a life sciences company, along
with its subsidiary MMI Genomics, Inc., developed tools,
technologies, and products for livestock and companion animal
health and productivity. The Company offered systems for DNA-
based parent verification and diagnostic testing in livestock and
companion animals.
Metamorphix had been forced into Chapter 7 bankruptcy by 14
creditors owed $1.69 million. The original case was filed on
Jan. 28, 2010, in the U.S. Bankruptcy Court for the District of
Delaware. On Sept. 30, 2010, the Court converted the case from an
involuntary Chapter 7 to one under Chapter 11 (Bankr. D. Del. Case
No. 10-10273).
MetaMorphix's subsidiary, MMI Genomics Inc., filed for Chapter 11
(Bankr. D. Del. Case No. 10-13775) on Nov. 18, 2010. The cases
are jointly administered under Case No. 10-10273.
Adam Hiller, Esq., Donna L. Harris, Esq., and Kevin M. Capuzzi,
Esq., at Pinckney, Harris & Weidinger, LLC, in Wilmington,
Delaware, represent the Debtors as counsel.
Metamorphix disclosed assets of $314,000 and debt of $79.5 million
in its Schedules of Assets and Liabilities. MMI Genomics
disclosed assets of $1.28 million and debts of $10.9 million.
MICHAELS STORES: Jennifer Robinson Appointed CAO and Controller
---------------------------------------------------------------
Jennifer N. Robinson, was appointed Vice President - Chief
Accounting Officer and Controller of Michaels Stores, Inc., on
June 12, 2011. Ms. Robinson assumes the role of principal
accounting officer from Richard S. Jablonski, who has held the
role of principal accounting officer since August 2010 and
previously from April 2008 to April 2010. Mr. Jablonski will
continue to serve the Company as Vice President of Finance and
Strategy.
Ms. Robinson, 34, previously served as Director-Financial
Reporting from June 2008 and as Manager-Financial Reporting from
September 2007 to May 2008. Prior to joining the Company, she was
Audit Senior Manager at Deloitte & Touche from August 2005 to
August 2007.
Ms. Robinson will participate in the usual compensation and
benefit programs available to a Vice President level officer of
the Company, including an option to purchase shares of common
stock with the number of shares and exercise prices to be
determined on the date of grant.
No arrangement or understanding exists between Ms. Robinson and
any other person pursuant to which Ms. Robinson was selected as an
officer of the Company.
There is no family relationship between any director, executive
officer, or person nominated or chosen by the Company to become a
director or executive officer of the Company and Ms. Robinson. In
addition, since the beginning of the Company's last fiscal year,
there has been no transaction (or series of transactions), and
there is no currently proposed transaction (or series of
transactions), to which the Company was or is to be a party, in
which the amount involved exceeds $120,000 and in which Ms.
Robinson or any member of her immediate family had or will have a
direct or indirect material interest.
About Michaels Stores
Headquartered in Irving, Texas, Michaels Stores, Inc., is the
largest arts and crafts specialty retailer in North America. As
of March 9, 2009, the Company operated 1,105 "Michaels" retail
stores in the United States and Canada and 161 Aaron Brothers
Stores.
The Company's balance sheet at Jan. 29, 2011 showed $1.77 billion
in total assets, $4.43 billion in total liabilities and a
$2.66 billion stockholders' deficit.
* * *
Michaels Stores carries a 'B3' corporate family rating from
Moody's Investors Service.
As reported by the Troubled Company Reporter on Oct. 8, 2010,
Moody's assigned Caa1 rating to Michaels Stores's proposed
$750 million senior unsecured bonds due 2018. Proceeds from the
note offering will be used to tender for an existing $750 million
series of unsecured notes. The refinancing, while improving the
maturity profile of the company, has no impact on Michaels'
current capital structure or ratings.
Moody's said Michaels' CFR reflects its significant financial
leverage and weak credit metrics. It also recognizes Michaels'
leadership position in the highly fragmented arts and crafts
segment, and its high operating margins. The rating takes into
consideration the company's participation in some segments that
have greater sensitivity to economic conditions, such as its
custom framing business. Michaels' ratings also reflect its good
liquidity with limited near term debt maturities.
MICROBILT CORP: Chex Systems Wants Kwall Showers Employment Denied
------------------------------------------------------------------
Creditor Chex Systems, Inc., asks the U.S. Bankruptcy Court for
the District of New Jersey sustain its objection, and deny the
Florida counsel employment of Kwall, Showers & Barack, P.A., for
MicroBilt Corporation and CL Verify LLC.
As reported in the Troubled Company Reporter on June 20, 2011, the
Court approved the employment of Kwall, Shower, as its special
litigation counsel.
KSB will provide such legal services as are necessary and
requested by the Debtors in the prosecution of those litigation in
which KSB is the Florida counsel of record, including litigation
between (i) MicroBilt and Chex Systems, Inc., in the United States
District Court for the Middle District of Florida; (ii) CL Verify
and Chex in the United States District Court for the Middle
District of Florida and (iii) CL Verify and Clarity Services,
Inc., in the Circuit Court for Hillsborough County, Florida.
Chex tells the Court that retention of Florida counsel at this
time is premature and a waste of estate resources in light of the
procedural nature of the cases (i.e., either the Florida Court's
disposition will resolve the cases or the Florida Court will rule
on the Debtors' request to transfer venue).
Chex reserves the right to raise additional arguments at or prior
to any hearing on the Florida counsel retention application.
Chex is represented by:
Derek J. Baker, Esq.
Princeton Forrestal Village
136 Main Street, Suite 250
Princeton, New Jersey 08543
Tel: (609) 987-0050
Fax: (609) 951-0824
About MicroBilt Corporation
MicroBilt Corporation in Princeton, New Jersey, and CL Verify LLC
in Tampa, Florida, offer small business owner solutions for fraud
prevention, consumer financing, debt collection, skip tracing and
background screening. MicroBilt provides access to over 3 billion
debit account records, nearly 30 billion pieces of demographic and
public record data and over 100 million unique consumer records to
prevent identity fraud, evaluate credit risk and retain customer
relationships.
MicroBilt and CL Verify filed for Chapter 11 five days apart:
MicroBilt (Bankr. D. N.J. Case No. 11-18143) on March 18, 2011,
and CL Verify (Bankr. D. N.J. Case No. 11-18715) on March 23,
2011. The Debtors tapped Lowenstein Sandler PC as their counsel,
and Maselli Warren, PC, as their special litigation counsel.
MicroBilt estimated $10 million to $50 million in both assets and
debts. CL Verify estimated $100 million to $500 million in
assets, but under $1 million in debts. Court papers say the
Debtors have roughly $8.4 million in unsecured debt and no secured
debt. The Debtors believe they have an enterprise value of
$150 million to $180 million.
MID-MOUNTAIN: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Mid-Mountain Machinery, Inc.
7916 West Sunset Highway
Spokane, WA 99224
Bankruptcy Case No.: 11-02930
Chapter 11 Petition Date: June 13, 2011
Court: United States Bankruptcy Court
Eastern District of Washington (Spokane/Yakima)
Judge: Patricia C. Williams
Debtor's Counsel: Barry W Davidson, Esq.
DAVIDSON BACKMAN MEDEIROS PLLC
601 West Riverside Avenue, Suite 1550
Spokane, WA 99201
Tel: (509) 624-4600
Fax: (509) 623-1660
E-mail: cnickerl@dbm-law.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 20 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/waeb11-02930.pdf
The petition was signed by Mark V. Blutcher, president.
MMRGLOBAL INC: Robert Lorsch Elected as Director
------------------------------------------------
MMRGlobal, Inc., held its 2011 annual meeting of stockholders on
Wednesday, June 15, 2011, at the Beverly Wilshire, a Four Seasons
Hotel, located at 9500 Wilshire Boulevard, Beverly Hills,
California. At the Annual Meeting, the Company's stockholders:
(a) elected Robert Lorsch to serve on the Company's Board of
Directors as a Class II director for a term of three years
expiring upon the Company's 2014 annual meeting of stockholders or
until his respective successor is duly elected and qualified; and
(b) ratified the appointment of Rose Snyder & Jacobs as the
Company's independent registered public accounting firm for the
fiscal year ending December 31, 2011.
As of April 19, 2011, the record date for the Annual Meeting, the
Company had 245,629,010 shares of its common stock outstanding and
entitled to vote. At the Annual Meeting, 164,835,177 shares of
the Company's common stock were present in person or represented
by proxy and entitled to vote.
About MMRGlobal
Los Angeles, Calif.-based MMR Global, Inc. (OTC BB: MMRF)
-- http://www.mmrglobal.com/-- through its wholly-owned operating
subsidiary, MyMedicalRecords, Inc., provides secure and easy-to-
use online Personal Health Records (PHRs) and electronic safe
deposit box storage solutions, serving consumers, healthcare
professionals, employers, insurance companies, financial
institutions, and professional organizations and affinity groups.
As reported by the TCR on April 7, 2011, Rose, Snyder & Jacobs, in
Encino, Calif., expressed substantial doubt about MMRGlobal's
ability to continue as a going concern. The independent auditors
noted that the Company has incurred significant operating losses
and negative cash flows from operations during the year ended Dec.
31, 2010, and 2009.
The Company reported a net loss of $17.9 million on $972,988 of
revenues for 2010, compared with a net loss of $10.3 million on
$619,249 of revenues for 2009.
The Company's balance sheet at March 31, 2011, showed
$1.87 million in total assets, $7.18 million in total liabilities,
and a $5.31 million total stockholders' deficit.
MOUNTAIN PROVINCE: Seven Directors Elected at Annual Meeting
------------------------------------------------------------
Mountain Province Diamonds Inc. held its annual meeting of
shareholders on June 15, 2011. At the Annual Meeting, the
Shareholders elected seven nominees to Board of Directors, namely:
(1) Jonathan Comerford, (2) Patrick Evans, (3) Elizabeth J.
Kirkwood, (4) Carl Verley, (5) David Whittle, (6) D.H.W. (Harry)
Dobson and (7) Peeyush Varshney. The Shareholders also approved
the reappointment of KPMG LLP, Chartered Accountants, as auditors
of the Corporation to hold office until the next general meeting
of the shareholders and to authorize the directors to fix the
auditor's remuneration.
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 March 31, 2011, showed $70.13
million in total assets, C$8.19 million in total liabilities and
C$61.93 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.
MP-TECH AMERICA: Seeks to Sell Substantially All Assets for $22MM
-----------------------------------------------------------------
MP-Tech America, LLC, seeks authority from the U.S. Bankruptcy
Court for the Middle District of Alabama to sell its operating
automotive parts manufacturing facility located on approximately
26 acres of real property in Cusseta, Chambers County, Alabama,
and all of its manufacturing equipment.
Joon LLC, d/b/a Ajin USA, the Debtor's DIP lender, has submitted
an initial bid of $22,000,000 to purchase the Property. The
Initial Bid includes, as part of the bid value, the assumption of
the Debtor's loan obligations to Korean Development Bank, which
holds a first priority security interest in the Property securing
the Debtor's prepetition debt of approximately $15,077,000. The
Initial Bid is subject to Ajin successfully renegotiating pricing
on certain of the Debtor's contracts to be assigned.
The Debtor believes the best way to maximize the value of its
assets and to insure that its customers and creditors are
protected while it operates is to sell the Property at auction to
the highest qualified bidder pursuant to Section 363 of the
Bankruptcy Code while the Debtor continues to operate its
business, Michael A. Fritz, Sr., Esq., at Fritz Hughes & Hill,
LLC, in Montgomery, Alabama, tells the Court.
To generate the greatest possible sale price of the Property, the
Debtor seeks approval of bidding procedures governing the sale of
the Property.
The Debtor proposes to conduct an auction on July 22, 2011, at
10:00 a.m., at the offices of Nelson Mullins Riley & Scarborough
LLP, at 201 17th Street, Suite 1700, in Atlanta, Georgia.
Interested bidders may submit an initial overbid upon the Property
in an amount so that the net amount of the bid results in a bid
that is at least equal to or greater than the sum of the Initial
Bid plus $50,000. Bidding will commence at the Initial Bid and
continue in increments of $50,000.
KDB and Ajin are each deemed a Qualified Bidder. KDB may credit
bid up to the allowed amount of its secured claim and additionally
bid beginning with the Floor Bid.
Closing upon the sale of the Property must occur on before
Aug. 15, 2011.
The Debtor is represented by:
Michael A. Fritz, Sr., Esq.
Fritz Hughes & Hill, LLC
7020 Fain Park Drive, Suite 1
Montgomery, AL 36117
Telephone: 334-215-4422
E-mail: michael@fritzandhughes.com
-- and --
Joseph J. Burton, Jr., Esq.
Burton & Armstrong, LLP
2 Ravinia Drive, Suite 1750
Atlanta, GA 30346
Telephone: 404-892-4144
E-mail: jayburton@ballp.com
Creditors' Committee Objects
The Official Committee of Unsecured Creditors object to the
proposed sale of substantially all of the Debtor's assets to Ajin
because the transaction between Ajin and the Debtor cannot be
considered arm's-length in light of their many relationships.
Ajin, Clark R. Hammond, Esq., at Johnston Barton Proctor & Rose
LLP, in Birmingham, Alabama, asserts, is not the Debtor's only
customer, and any sale of assets needs to be conducted in a manner
as to ensure that all interested constituents and possible buyers
are provided a fair opportunity to participate in the sale.
The Committee also objects to the bidding schedule complaining
that the deadlines are truncated and do not allow enough time for
other potential purchasers to perform due diligence, to review and
provide suggested comments to the asset purchase agreement with
Ajin and to negotiate a final agreement.
The Committee is represented by:
Clark R. Hammond, Esq.
Lindan J. Hill, Esq.
JOHNSTON BARTON PROCTOR & ROSE LLP
Colonial Brookwood Center
569 Brookwood Village, Suite 901
Birmingham, AL 35209
Tel: (205) 458-9400
Fax: (205) 458-9500
About MP-Tech America
Cusseta, Alabama-based MP-Tech America, LLC, is the maker of parts
for Kia Motors Corp. and Hyundai Motor Co. at their plants in
Georgia and Alabama. It filed a Chapter 11 petition (Bankr. M.D.
Ala. Case No. 11-30895) on April 8, 2011. The Debtor estimated
assets and debts of $10 million to $50 million as of the Chapter
11 filing. The Debtor has a $15 million secured debt to Korea
Development Bank.
The Debtor is represented by Michael A. Fritz, Sr., Esq., at Fritz
Hughes & Hill, LLC, in Montgomery, Alabama, and Joseph J. Burton,
Jr., Esq., at Burton & Armstrong, LLP, in Atlanta, Georgia.
EXIM Bank, Venture Express, Woori Bank, Sunkyoung, ICS & M, Inc.,
and Midsouth Employee Services Corp. were appointed members to the
Official Committee of Unsecured Creditors. The Committee is
represented by Clark R. Hammond, Esq., and Lindan J. Hill, Esq.,
at Johnston Barton Proctor & Rose LLP, in Birmingham, Alabama.
NEXT 1 INTERACTIVE: Sherb & Co. Raises Going Concern Doubt
----------------------------------------------------------
Next 1 Interactive, Inc., filed on June 15, 2011, its annual
report on Form 10-K for the fiscal year ended Feb. 28, 2011.
Sherb & Co., LLP, in Boca Raton, Fla., expressed substantial doubt
about Next 1 Interactive's ability to continue as a going concern.
The independent auditors noted that the Company had an accumulated
deficit of $53.2 million and a working capital deficit of
$13.4 million at Feb. 28, 2011, net losses for the year ended
Feb. 28, 2011, of $23.2 million and cash used in operations during
the year ended Feb. 28, 2011, of $9.6 million.
The Company reported a net loss of $23.2 million on $2.5 million
of revenues for fiscal 2011, compared with a net loss of
$11.9 million on $1.3 million of revenues for fiscal 2010. The
increase from 2010 to 2011 was primarily due to the cost incurred
to launch and operate a television network as well as the
amortization and loss on impairment of significant intangible
assets and equity issued in raising capital.
The Company's balance sheet at Feb. 28, 2011, showed $4.5 million
in total assets, $14.8 million in total liabilities, and a
stockholders' deficit of $10.3 million.
A copy of the Form 10-K is available at http://is.gd/nJgYOw
About Next 1 Interactive
Weston, Fla.-based Next 1 Interactive, Inc. (OTC BB: NXOI.BB)
-- is a multi-faceted media company specializing in Travel and
Real Estate. Next 1 delivers targeted content via digital
platforms including satellite, cable, broadcast, broadband and
mobile. Along with the full time R&R TV digital network
(broadcast via satellite and cable carriers), the Company will
deliver its content and sponsors' messages on Video on Demand
outlets enhanced by interactive applications.
NO FEAR RETAIL: Committee Okayed to Tap Pachulski Stang as Counsel
------------------------------------------------------------------
The U.S. Bankruptcy Court of the District of California authorized
the Official Committee of Unsecured Creditors at the Chapter 11
cases of No Fear Retail Stores, et al., to retain Pachulski Stang
Ziehl & Jones LLP as bankruptcy counsel.
As reported in the Troubled Company Reporter on April 21, 2011,
the firm is assisting, advising and representing the Committee in
its consultation with the Debtors regarding the administration of
the Chapter 11 cases.
Jeffrey N. Pomerantz, Esq., and Jeffrey W. Dulberg, Esq.,
charge $795 and $625 per hour for this engagement, respectively.
Patricia Jeffries, the primary paralegal likely to work on these
cases, will bill $255 per hour.
To the best of the Committee's knowledge, the firm is a
"disinterested person" within the meaning of Section 101(14) of
the Bankruptcy Code.
About No Fear Retail
Carlsbad, California-based No Fear Retail Stores, Inc., is a
retailer of action, sports, and casual youth lifestyle apparel and
accessories, targeting young adults and teens. It operates 41
retail locations in California, Oregon, Arizona, Florida, Nevada,
North Carolina, and Texas.
No Fear filed for Chapter 11 bankruptcy protection (Bankr. S.D.
Calif. Case No. 11-02896) on Feb. 24, 2011. David S. Kupetz,
Esq., at Sulmeyer, Kupetz, A Professional Corp, serves as the
Debtor's bankruptcy counsel. The Debtor tapped Jones Day as
special intellectual property counsel; Avant Advisory Group's
George Blanco as chief restructuring officer, and Venturi &
Company LLC, as financial advisors.
The Debtor estimated disclosed $31,648,063 in assets and
$12,552,985 in liabilities as of the Chapter 11 filing.
Affiliates No Fear MX, Inc. (Bankr. S.D. Calif. Case No. 11-02897)
and Simo Holdings, Inc. (Bankr. S.D. Calif. Case No. 11-02898)
filed separate Chapter 11 petitions on Feb. 24, 2011.
Tiffany L. Carroll, the Acting U.S. Trustee for Region 15,
appointed three creditors to serve on an Official Committee of
Unsecured Creditors of No Fear MX, Inc. BDO USA LLP serves as
financial advisor to provide financial advisory services to the
Committee.
NO FEAR RETAIL: SulmeyerKupetz Approved as Debtor's Counsel
-----------------------------------------------------------
The U.S. Bankruptcy Court of the District of California authorized
No Fear Retail Stores, et al., to employ SulmeyerKupetz, a
professional corporation, as counsel.
SulmeyerKupetz may withdraw funds from the separate account
maintained by SK for the balance of the retainer paid prepetition.
SK may withdraw the funds in the amount requested with further
notice, hearing or order, provided that SK will withdraw only 80%
of the fees.
To the best of the Debtors' knowledge, SK is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
About No Fear Retail
Carlsbad, California-based No Fear Retail Stores, Inc., is a
retailer of action, sports, and casual youth lifestyle apparel and
accessories, targeting young adults and teens. It operates 41
retail locations in California, Oregon, Arizona, Florida, Nevada,
North Carolina, and Texas.
No Fear filed for Chapter 11 bankruptcy protection (Bankr. S.D.
Calif. Case No. 11-02896) on Feb. 24, 2011. David S. Kupetz,
Esq., at Sulmeyer, Kupetz, A Professional Corp, serves as the
Debtor's bankruptcy counsel. The Debtor tapped Jones Day as
special intellectual property counsel; Avant Advisory Group's
George Blanco as chief restructuring officer, and Venturi &
Company LLC, as financial advisors.
The Debtor estimated disclosed $31,648,063 in assets and
$12,552,985 in liabilities as of the Chapter 11 filing.
Affiliates No Fear MX, Inc. (Bankr. S.D. Calif. Case No. 11-02897)
and Simo Holdings, Inc. (Bankr. S.D. Calif. Case No. 11-02898)
filed separate Chapter 11 petitions on Feb. 24, 2011.
Tiffany L. Carroll, the Acting U.S. Trustee for Region 15,
appointed three creditors to serve on an Official Committee of
Unsecured Creditors of No Fear MX, Inc. BDO USA LLP serves as
financial advisor to provide financial advisory services to the
Committee.
NO FEAR RETAIL: Sports Direct May Seek to Take Over License
-----------------------------------------------------------
Dow Jones' DBR Small Cap reports that major U.K. sports retailer
Sports Direct International PLC said it will seek to elbow out the
U.S. owner of the No Fear brand in a joint licensing agreement
that allows Sports Direct to sell No Fear clothing and accessories
abroad.
About No Fear Retail
Carlsbad, California-based No Fear Retail Stores, Inc., is a
retailer of action, sports, and casual youth lifestyle apparel and
accessories, targeting young adults and teens. It operates 41
retail locations in California, Oregon, Arizona, Florida, Nevada,
North Carolina, and Texas.
No Fear filed for Chapter 11 bankruptcy protection (Bankr. S.D.
Calif. Case No. 11-02896) on Feb. 24, 2011. David S. Kupetz,
Esq., at Sulmeyer, Kupetz, A Professional Corp, serves as the
Debtor's bankruptcy counsel. The Debtor estimated its assets at
$10 million to $50 million and debts at $1 million to $10 million.
Affiliates No Fear MX, Inc. (Bankr. S.D. Calif. Case No. 11-02897)
and Simo Holdings, Inc. (Bankr. S.D. Calif. Case No. 11-02898)
filed separate Chapter 11 petitions on Feb. 24, 2011.
Tiffany L. Carroll, the Acting U.S. Trustee for Region 15,
appointed three creditors to serve on an Official Committee of
Unsecured Creditors of No Fear MX, Inc.
NORTH GENERAL: Chapter 11 Trustee Files Plan Modifications
----------------------------------------------------------
James L. Garrity, Jr., as the chapter 11 trustee of the cases of
General Hospital, General Service Corporation and North General
Diagnostic & Treatment Center, et al., filed a Further Revised
Second Amended Plan of Liquidation, as modified, dated June 3,
2011, to the U.S. Bankruptcy Court for the Southern District of
New York.
The Plan Modifications reflect the fact that the Plan is being
proposed by the Trustee rather than the Debtors. The Trust
succeeds to the Debtors' status as plan proponent and, as such, is
authorized to propose the Plan Modifications.
Moreover, the Plan Modifications modify the injunction, release,
and exculpation provisions in Article 12 of the Plan in order to
preserve, among other things, (a) claims against
parties over which the Court does not have jurisdiction to grant
releases, (b) claims arising out of fraud, gross negligence or
willful misconduct, and (c) claims arising out of any
misadministration of these cases, including the potential claims
identified in the Examiner's Report.
The Plan Modifications also modify provisions in Article 8 of the
Plan relating to the rights and obligations of the Liquidation
Trustee. For example, as modified, the Plan provides that:
a. the Liquidation Trustee will have the right to abandon or
dissolve Estate Assets reasonably deemed to be burdensome to
the estate or of inconsequential value and benefit to the
estate, without further notice or approval of the Court;
b. to the extent any cash derived from Estate Assets remains on
account with the Liquidation Trustee, in his or her capacity
as such, following a final cash distribution, such cash may
be donated by the Liquidation Trustee to a qualified
not-for-profit organization in the medical and/or healthcare
field; and
c. the Liquidation Trustee may settle any Disputed Claim (or
aggregate of Claims if held by a single Creditor) in an
amount of up to $200,000, respectively, without notice, a
Court hearing, or Court approval.
Finally, the Plan Modifications correct drafting errors.
A full-text copy of the Further Revised 2nd Amended Plan is
available for free at:
http://bankrupt.com/misc/NORTHGENERAL_frev2ndamndPlan.pdf
The Trustee asserts that the Plan Modifications do not adversely
change the treatment of the claim of any creditor or the interest
of any equity security holder.
Accordingly, the Trustee asks the Court to (i) find that the
proposed modifications in the Further Revised Second Amended Plan
of Liquidation are not material, and thus (ii) deem the Plan, as
modified, accepted by all holders of claims who have previously
accepted the Plan.
About North General
New York-based North General Hospital is a not-for-profit 200-bed
community hospital in upper Manhattan that has serviced the
communities of East and Central Harlem since the 1970s. The
Hospital filed for Chapter 11 bankruptcy protection on July 2,
2010 (Bankr. S.D.N.Y. Case No. 10-13553). Charles E. Simpson,
Esq., at Windels, Marx, Lane & Mittendorf, LLP, assists the
Debtor in its restructuring effort. Garfunkel Wild, P.C., is the
Debtor's special healthcare and regulatory counsel. Healthcare
Management Solutions, LLC, is the Debtor's financial and
healthcare reimbursement manager. Alston & Bird, LLP, serves as
the Official Committee of Unsecured Creditors' counsel. NHB
Advisors, Inc., is the financial advisor to the Committee. The
Company disclosed $67 million in assets and $293 million in
liabilities as of the Petition Date.
NXT NUTRITIONALS: Files Amendment No. 2 to 2010 Annual Report
-------------------------------------------------------------
As reported in the TCR on April 7, 2011, NXT Nutritionals, Inc.,
filed its annual report on Form 10-K, reporting a net loss of
$17.40 million on $187,516 of sales for the fiscal year ended
Dec. 31, 2010, compared with a net loss of $23.95 million on
$905,728 of sales during the prior fiscal year.
The Company's balance sheet at Dec. 31, 2010, showed $2.24 million
in total assets, $14.79 million in total liabilities, and a
$12.55 million total stockholders' deficit.
Berman & Company, P.A, in Boca Raton, Fla., expressed substantial
doubt about the Company's ability to continue as a going concern.
The independent auditors noted that the Company had a net loss of
$17,402,736 and net cash used in operations of $3,035,079 for the
year ended Dec. 31, 2010; and a working capital deficit and
stockholders' deficit of $11,076,205 and $12,547,616,
respectively, at Dec. 31, 2010,
On June 15, 2011, the Company filed Amendment No. 2 to its 2010
annual report to correct the Dec. 31, 2009 and 2008 statement of
stockholders' deficit. The Company inadvertently used incorrect
balances for Dec. 31, 2008, for the recapitalization and for stock
based compensation. The Company previously restated these amount
during 2010 but inadvertently used the prior amount.
A copy of the Form 10-K/A is available at http://is.gd/pLium3
About NXT Nutritionals
Springfield, Mass.-based NXT Nutritionals Holdings, Inc. (OTC BB:
NXTH) -- http://www.nxtnutritionals.com/-- through its wholly
owned subsidiary NXT Nutritionals, Inc., is a developer and
marketer of a proprietary, patent-pending, all-natural, healthy
sweetener sold under the brand name SUSTA(TM) and other food and
beverage products.
OVERLAND STORAGE: Six Directors Elected at Annual Meeting
---------------------------------------------------------
The 2010 Annual Meeting of Shareholders of Overland Storage, Inc.,
was held on June 14, 2011. The Shareholders elected six nominees
to Board of Directors, namely: (1) Robert A. Degan, (2) Nora M.
Denzel, (3) Joseph A. De Perio, (4) Eric L. Kelly, (5) Scott
McClendon and (6) Shmuel Shottan.
The Stockholders approved an amendment to the Company's Amended
and Restated Articles of Incorporation to increase the authorized
number of shares of the Company's common stock from 45,100,000
shares to 90,200,000 shares. The Stockholders approved amendments
to the Company's 2009 Equity Incentive Plan, including an increase
in the number of shares of common stock available for award grant
purposes under the 2009 Equity Incentive Plan by 3,200,000 shares
of common stock. The Stockholders approved amendments to the
Company's 2006 Employee Stock Purchase Plan, including an increase
in the number of shares reserved for issuance under the 2006
Employee Stock Purchase Plan by 600,000 shares. The Stockholders
also ratified the appointment of Moss Adams LLP as the Company's
independent registered public accounting firm for the fiscal year
ending July 3, 2011.
About Overland Storage
San Diego, Calif.-based Overland Storage, Inc. (Nasdaq: OVRL) --
http://www.overlandstorage.com/-- is a global provider of unified
data management and data protection solutions designed to enable
small and medium enterprises (SMEs), corporate departments and
small and medium businesses (SMBs) to anticipate and respond to
change.
As reported in the Troubled Company Reporter on Sept. 28, 2010,
Moss Adams LLP, in San Diego, Calif., expressed substantial
doubt about Overland Storage's ability to continue as a going
concern, following the Company's results for the fiscal year ended
June 30, 2010. The independent auditors noted of the Company's
recurring losses and negative operating cash flows.
The Company's balance sheet at March 31, 2011, showed $48.50
million in total assets, $35.89 million in total liabilities and
$12.61 million in total shareholders' equity.
FRIENDSHIP VILLAGE: Fitch Cuts Rating on Revenue Bonds to 'BB-'
---------------------------------------------------------------
As part of its on-going surveillance efforts, Fitch Ratings has
downgraded the ratings on these revenue bonds issued by the County
of Franklin, Ohio on behalf of Friendship Village of Columbus:
-- $16,070,000 health care facilities revenue refunding and
improvement bonds, series 1998 to 'BB-' from 'BBB-'.
The Rating Outlook is revised to Stable from Negative.
Rating Rationale:
-- The downgrade to 'BB-' reflects FVC's weak financial metrics
relative to Fitch's 'BBB' category medians combined with
increased operating risk since Fitch's last review due to
the effects of the recession and continued pressure on local
home values.
-- FVC's liquidity position at April 30 is light (98.4 days
cash on hand, 2.7 times(x) cushion and 24% cash-to-long-term
debt) providing little cushion against a decline in
operating performance.
-- Occupancy in FVC's 228 independent living units (ILU)
remains low at 76% as of March 31, 2011 reflecting a rising
attrition rate and the difficult operating environment.
-- Management has done a solid job of controlling expenses to
match decreasing revenues over the last several years.
Key Rating Drivers:
The recent discounting of entrance fees has improved sales and
should stabilize occupancy and operations at the current level.
Security:
The bonds are secured by a pledge of FVC's gross revenues, a first
mortgage, and a debt service reserve fund.
Credit Summary:
The downgrade to 'BB-' from 'BBB-' reflects FVC's financial
metrics which are not consistent with Fitch's 'BBB' category
medians, heightened operating risk since Fitch's last review as
evidenced by low occupancy, increasing attrition and continued
pressure on home prices. At April 30, FVC had $3.7 million of
unrestricted cash and investments as compared to $5.2 million at
fiscal year end 2010 (June 30). Liquidity indicators including
days cash on hand, cash to debt and cushion ratio of 98.4, 24.0%
and 2.7x, respectively, are well below the corresponding 'BBB'
category medians of 372.7, 48.6% and 6.1x. Moreover, profitability
has been erratic over the last few years reflecting the more
difficult operating environment. Net operating margin-adjusted in
fiscal 2008, 2009 and 2010 was 10.1%, 9.8% and 11.6%,
respectively, which trails the 2010 'BBB' category median of
18.0%. Through the 10-month interim period, net operating margin-
adjusted was 7.3%.
Although profitability has been light, FVC's manageable debt
burden (maximum annual debt service [MADS] equates to just 8.7% of
fiscal 2010 revenues) has resulted in adequate coverage of 1.2x
and 1.3x in fiscal 2009 and 2010, respectively.
Occupancy in the independent living units remains weak as
increased attrition has offset unit sales. At April 30, there were
173 occupied units (76%) as compared to 175 and 176 each at fiscal
year end 2010 and 2009. The major concerns with the low occupancy
levels are FVC's historical reliance on entrance fees to cover
debt service and the declining revenue base due to less monthly
service fee receipts. Given the low unit turnover, the last four
fiscal years net entrance fees received have ranged from a low of
$570,000 in fiscal 2009 to a high of approximately $1.7 million in
fiscal 2007, which are relatively low for a facility of this size.
As a result, debt service coverage has averaged 1.3x over the last
four fiscal years, which compares unfavorably to the 'BBB'
category median of 1.7x.
Effective January 1 of this year, the board approved a 25%
reduction in entrance fees in an effort to jumpstart sales and
improve occupancy. The initiative seems to have had the intended
effect as FVC has generated 24 sales since January 1 compared to
just 11 in the first half of fiscal 2011. While the increased
sales are viewed positively, Fitch believes the magnitude of the
entrance fee discount is indicative of the difficult operating
environment.
Management's ability to effectively control expenses in response
to lower occupancy is viewed positively. Although revenues have
been flat over the last four fiscal years, management has been
successful in controlling expenses and maintaining a breakeven
bottom line over the last several years.
The Outlook revision to Stable reflects Fitch's expectation that
operating performance over the next 12 months should be consistent
with recent results. The discounting of the entrance fee should
stabilize or improve occupancy and allow for stable operating
performance despite the difficult environment. Although management
would like to pursue a campus repositioning/refurbishment plan,
Fitch believes this is unlikely until overall occupancy and
financial performance improves in the existing ILUs.
FVC operates a type-A continuing care retirement community located
in Columbus, OH, which consists of 228 independent living units,
63 assisted living units, and 80 skilled nursing beds. Total
revenues for fiscal 2010 were approximately $16.1 million.
PARKER CENTRAL: Given Further Interim Access to Cash Collateral
---------------------------------------------------------------
The Hon. Bruce T. Beesly of the U.S. Bankruptcy Court for the
District of Nevada entered a second interim order authorizing
Debtor Park Central Plaza 32 LLC to collect rents and CAMS
generated by Park Central Plaza, LLC, and hold the same in
a segregated account.
Under the Court's June 7, 2011, interim order, the Debtor is
permitted on an interim basis to use the rents collected to
maintain its real property and pay actual costs itemized in a
prepared budget; provided that the monthly payment to Swan &
Gardiner will be limited to $400 per month and further provided
that the Debtor will provide METEJEMEI, LLC, five days' advance
notice of any intended payment to vendors not indicated in the
budget for extraordinary expenses and Nigro Construction.
A copy of the Debtor's budget is available for free at:
http://bankrupt.com/misc/PARKCENTRAL_BudgetAprtoDec2011.pdf
The Debtor is to obtain from the China a Go Go tenant and provide
to the Court and METEJEMEI proof of expenditures of the tenant
improvements for the premises it is leasing before the Court will
further consider authorizing payment of the requested tenant
improvements, Judge Beesly ordered.
The Debtor is further authorized to accrue an amount not to exceed
$5,000 from the rents in addition to authorized expenses as a
reserve for future obligations, pending approval of the Court or
METEJEMEI.
All amount in excess of the Authorized Expenditures and the
Reserve will be paid to METEJEMEI by check directed to counsel for
METEMEJEI.
As adequate protection for any diminution in value of the cash
collateral, the Debtor will grant METEJEMEI, as secured creditor,
replacement liens on all of their assets.
As reported in the Troubled Company Reporter on April 21, 2011,
according to the Debtor, METEJEMEI LLC holds a secured interest in
the Debtor's real property in an amount in excess of $25,000,000
and must consent to the usage of the cash collateral unless the
Court orders otherwise. METEJEMEI is the successor to Nevada
State Bank in regards to a Deed of Trust executed by Debtor in
favor of NSB. The underlying loan agreement between NSB and
Debtor was entered on or about Feb. 10, 2004 in the principal
amount of $5,931,000 and was subsequently amended.
Before the Court entered the June 7 interim order, METEJEMEI filed
an objection to the cash collateral use request. In its May 16,
2011 court filing, METEJEMEI raised objections to, among other
things: (i) the reduction of property management fees of $5,600 to
a market rate of $2,550; (ii) payment of the China Go Go Tenant
Improvement reimbursement; (iii) reduction by at least 50% of the
Nigro Construction fee of $2,800 per month for repair and
maintenance and/or supervision of same; (iv) acceptable resolution
of miscellaneous expense of $1,000 per month, accountant fee of
$1,000 per month, and leasing category expense; and (v) request
for a budget variance of 25% per line item, up to 10% of the
entire budget.
METEJEMEI is represented by:
Laurel E. Davis, Esq.
FENNEMORE CRAIG, P.C.
300 South Fourth Street, Suite 1400
Las Vegas, Nevada 89101
Tel. (702) 692-8000
E-mail: ldavis@fclaw.com
About Park Central Plaza 32, LLC
Las Vegas, Nevada-based Park Central Plaza 32, LLC, filed for
Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 11-
14153) on March 23, 2011. Bob L. Olson, Esq., at Greenberg
Traurig LLP, serves as the Debtor's bankruptcy counsel. The
Debtor estimated its assets and debts at $10 million to
$50 million.
PEGASUS RURAL: Organizational Meeting to Form Panel on June 23
--------------------------------------------------------------
Roberta DeAngelis, United States Trustee for Region 3, will hold
an organizational meeting on June 23, 2011, at 1:00 p.m. in the
bankruptcy case of Pegasus Rural Broadband, 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.
Pegasus Rural Broadband, LLC, and its affiliates, including
Xanadoo Holdings Inc., sought Chapter 11 protection (Bankr. D.
Del. Lead Case No. 11-11772) on June 10 in Delaware.
The Debtors are subsidiaries of Xanadoo Company, a 4G wireless
Internet provider. Xanadoo Co. was not among the Chapter 11
filers. The subsidiaries sought Chapter 11 protection after they
were unable to restructure $52 million in 12.5% senior secured
promissory notes that matured in May. The notes are owing to
Beach Point Capital Management LP.
PERKINS AND MARIE: Filing Won't Affect Four South Dakota Locations
------------------------------------------------------------------
Austin Kaus at the Daily Republic reports that the filing for
Chapter 11 bankruptcy by restaurant owner Perkins and Marie
Callender's Inc. will not affect at least four South Dakota
locations, including Mitchell.
According to the report, Gary Kulm, special project manager for JB
Enterprises, said the franchise, which owns Perkins restaurants in
Mitchell, Brookings and Sioux Falls, said has no plans to close
any of the locations.
Mr. Kaus says the company plans to close 65 stores and cut 2,500
jobs, or about 20 percent of its work force of 12,350.
The company must file a plan of reorganization by no later than
July 14 and complete the plan by no later than Oct. 21, notes Mr.
Kaus.
Mr. Kaus, citing papers filed with the Court, says the company
could not afford to build new restaurants and upgrade existing
ones, so it lost traffic to better funded restaurant competitors.
About Perkins & Marie Callender's Inc.
Based in Memphis, Tennessee, Perkins & Marie Callender's Inc., fka
The Restaurant Company, is the owner or franchiser of nearly 600
family-dining restaurants, the Perkins Restaurants and Marie
Callender's. Perkins & Marie and several affiliates filed for
Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 11-11795) on
June 13, 2011. Perkins & Marie disclosed $290 million in assets
and $441 million in debt as of the Chapter 11 filing.
Judge Kevin Gross presides over the case. Robert S. Brady, Esq.,
and Robert F. Poppiti, Jr., Esq., at Young, Conaway, Stargatt &
Taylor, LLP; and Mitchel H. Perkiel, Esq., Hollace T. Cohen, Esq.,
and Brett D. Goodman, Esq., at Troutman Sanders, LLP, serve as
bankruptcy counsel. The Debtors' financial advisors are Whitby,
Santarlasci & Company. Their claims agent is Omni Management
Group, LLC.
DIP lender Wells Fargo is represented by lawyers at Paul,
Hastings, Janofsky & Walker LLP.
PERKINS & MARIE: Organizational Meeting to Form Panel on June 24
----------------------------------------------------------------
Roberta DeAngelis, United States Trustee for Region 3, held an
organizational meeting on June 24, 2011, at 10:00 a.m. in the
bankruptcy case of Perkins & Marie Callender's Inc. The meeting
will be held at:
DoubleTree Hotel Wilmington
700 N. King Street
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 Perkins & Marie Callender's Inc.
Based in Memphis, Tennessee, Perkins & Marie Callender's Inc., fka
The Restaurant Company, is the owner or franchiser of nearly 600
family-dining restaurants, the Perkins Restaurants and Marie
Callender's. Perkins & Marie and several affiliates filed for
Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 11-11795) on
June 13, 2011. Perkins & Marie disclosed $290 million in assets
and $441 million in debt as of the Chapter 11 filing.
Judge Kevin Gross presides over the case. Robert S. Brady, Esq.,
and Robert F. Poppiti, Jr., Esq., at Young, Conaway, Stargatt &
Taylor, LLP; and Mitchel H. Perkiel, Esq., Hollace T. Cohen, Esq.,
and Brett D. Goodman, Esq., at Troutman Sanders, LLP, serve as
bankruptcy counsel. The Debtors' financial advisors are Whitby,
Santarlasci & Company. Their claims agent is Omni Management
Group, LLC.
DIP lender Wells Fargo is represented by lawyers at Paul,
Hastings, Janofsky & Walker LLP.
PLAINS END: Fitch Affirms 'B+' Rating on Subordinated Sec. Notes
----------------------------------------------------------------
Fitch Ratings has affirmed the debt ratings of Plains End
Financing LLC:
-- Senior secured bonds of $117.7 million ($110.3 million
outstanding) due 2028 at 'BB';
-- Subordinated secured notes of $20.0 million ($19.0 million
outstanding) due 2023 at 'B+'.
The Rating Outlook is Stable for the senior notes and Negative for
the subordinate notes.
Rating Rationale:
-- The project is expected to continue its strong operational
performance with availability to remain at 96% or higher for
the project term.
-- Fitch expects stabilization of the consolidated capacity
factors at 8-9% annually for the projected periods in 2011
and beyond.
-- Historical DSCRs as calculated by Fitch over the last two
years have been low for the ratings. DSCRs have averaged
1.14 times (x) at the senior level, and 0.97x at the
consolidated level, due primarily to significantly higher
capacity factors and property taxes than originally
projected.
-- The Fitch rating case projects an average senior debt
service coverage ratio (DSCR) of 1.35x, and an average
consolidated, senior and subordinated level, DSCR of 1.07x
going forward that supports the rating.
-- Stable, fixed price purchase power agreements (PPAs) with
strong utility counterparty Public Service Company of
Colorado, Fitch rated 'BBB+' with a Stable Outlook underpin
the rating. The two PPAs match the term of the senior bonds,
and both also exceed the term of the sub notes by five
years.
-- The new operator, NAES Corporation, and plant manager, Power
Plant Management Services Inc. (PPMS), are experienced
players who have had successful collaborations with Plains
End's sponsor, Energy Investor Funds (EIF).
The Stable Outlook on the senior bonds reflects:
-- Cash flow cushion at the senior level that can accommodate
volatility in the consolidated capacity factor.
The Negative Outlook on the subordinate bonds reflects:
-- Expected use of the debt service reserve funds in the short
term under the Fitch rating case;
-- Uncertainty regarding the outcome of the property tax
negotiations.
-- Limited cash flow cushion at the subordinate level to allow
for volatility in the consolidated capacity factor.
Key Rating Drivers:
-- Further increases in property tax liability above current
projections would have a negative rating impact; and
-- Sustained increases in capacity factors resulting in
corresponding increases in major maintenance expenses would
have a negative rating impact.
Security:
Plains End's obligations are jointly and severally guaranteed by
operating plants Plains End LLC (PEI) and Plains End II LLC
(PEII). The obligations of the issuer and guarantors are secured
by a first-priority perfected security interest in favor of the
collateral agent. The collateral includes all real and personal
property, all project documents and material agreements, all cash
and accounts, and all ownership interests in the issuer and
guarantors.
The collateral will be applied first to the senior secured bonds
and then to the subordinated secured notes.
Credit Summary:
Plains End is indirectly owned 100% by EIF-managed funds following
the acquisition of 20% of ownership interests from Cogentrix in
2011. Plains End was formed solely to own and develop two gas-
fired peaking projects, PEI and PEII, located in Arvada, Jefferson
County, Colorado. The plants are peaking facilities used primarily
as a back-up for wind generation, as well as other generation
sources, in Colorado.
PEI and PEII are neighboring, nearly identical facilities, with a
combined capacity of 228.6 MW. PEI is a nominal 113 MW plant,
consisting of 20 Wartsila 18V34SG engine/generator sets. PEII is a
nominal 116 MW plant, consisting of 14 Wartsila 20V34SG
engine/generator sets. PEI began commercial operation in May 2002,
and PEII in May 2008. Combined cash flows from both plants service
the obligations under the two bond issues.
PEI and PEII have long-term PPAs structured as tolling contracts
with the Public Service Company of Colorado that expire in 2028.
Under the PPAs, PSCo has a right to all of the capacity, energy
and dispatch of the facilities. PEI and PEII receive capacity
payments and variable energy payments that generally reimburse
their variable operating expenses.
POLI-GOLD LLC: Wants to Finalize Negotiations with Primary Parties
------------------------------------------------------------------
Poli-Gold, L.L.C., asks the U.S. Bankruptcy Court for the District
Of Arizona to extend its exclusive periods to file and solicit
acceptances for the proposed chapter 11 plan until Aug. 15, 2011,
and Oct. 14, respectively.
The Debtors filed their request for an extension before the
exclusive periods was set to expire on June 15, 2011
The Debtor relates that it needs more time to negotiate with its
primary secured creditor, and Environmental Protection Agency,
another primary party in Debtor's case. The Debtor believes it is
making progress with the parties relating to consensual plan
treatment and potential settlements, but cannot finalize the items
prior to June 15.
About Poli-Gold
Fort Mohave, Arizona-based Poli-Gold, LLC, owns a cabin and RV
resort in Panguitch, Utah. It also owns a commercial
building/warehouse/storage facility in Fort Mohave, Arizona, as
well as a commercial property in Lake Havasu City, Arizona, and
some vacant lots in Kingman, Arizona.
Poli-Gold filed for Chapter 11 bankruptcy protection (Bankr. D.
Ariz. Case No. 10-37018) on Nov. 17, 2010. Attorneys at Engelman
Berger, P.C., serve as the Debtor's bankruptcy counsel. Keller
Williams River Cities Specialists serves as real estate listing
broker. In its schedules, the Debtor disclosed assets of
$30,384,943 and liabilities of $14,401,515 as of the petition
date.
POWER CONTRACTING: Trustee Wants to Access Bank's Cash Collateral
-----------------------------------------------------------------
Carlota M. Bohm, Trustee of the Bankruptcy Estate of Power
Contracting Inc., asks the U.S. Bankruptcy Court for the Western
District of Pennsylvania for permission to access cash collateral
of Fifth Third Bank or cease operations.
The trustee says the Debtor owes $20,606,667 in loan to Fifth
Third. The bank is secured by a lien upon all of the Debtor's
assets pursuant to security agreements dated Dec. 2, 2010 and
related financing statements were filed.
According to the document, the bank informed the trustee that she
has no authority to use said bank's cash collateral for operations
of the Debtor. More specifically, the bank's directive to the
trustee was to immediately cease use of any cash collateral. The
effect of the bank's mandate is to force the trustee to cease
operations and prevents her from paying any post-petition accounts
payable, including payroll and related employee expenses.
The Debtor says it will not be able to conduct business or
reasonably wind down operations without the use of cash
collateral.
About Power Contracting, Inc.
Wildwood, Pennsylvania-based, Power Contracting, Inc., aka Max &
Erma's Restaurant, Inc. filed for Chapter 11 protection (Bankr.
W.D. Penn. Case No. 11-22841) on May 2, 2011.
Debtor affiliate Gary Reinert, operates several companies in the
construction business and the restaurant business.
Debtor-affiliates also sought Chapter 11 protection on May 2, 2011
(Bankr. W.D. Penn Case Nos. 11-22840 - 11-22846). Calaiaro &
Corbett, P.C. represents the Debtors in their restructuring
efforts. The Debtors estimated assets and debts at $10 million to
$50 million.
POWER CONTRACTING: Trustee Has Until Aug. 8 to Complete Schedules
-----------------------------------------------------------------
The Hon. Jeffery A. Deller of the U.S. Bankruptcy Court for the
Western District of Pennsylvania granted Carlota M. Bohm, Trustee
of Power Contracting Inc., an extension of time until Aug. 8,
2011, to complete the Debtor's schedules.
The Trustee said the extension of time will allow it to continue
to meet with Debtor to review schedules and gather missing
information in order to complete the schedules.
About Power Contracting, Inc.
Wildwood, Pennsylvania-based, Power Contracting, Inc., aka Max &
Erma's Restaurant, Inc. filed for Chapter 11 protection (Bankr.
W.D. Penn. Case No. 11-22841) on May 2, 2011.
Debtor affiliate Gary Reinert, operates several companies in the
construction business and the restaurant business.
Debtor-affiliates also sought Chapter 11 protection on May 2, 2011
(Bankr. W.D. Penn Case Nos. 11-22840 - 11-22846). Calaiaro &
Corbett, P.C. represents the Debtors in their restructuring
efforts. The Debtors estimated assets and debts at $10 million to
$50 million.
R & S ST. ROSE: Amends Schedules of Assets & Liabilities
--------------------------------------------------------
R & S St. Rose Lenders, LLC, filed with the U.S. Bankruptcy Court
for the Northern District of Nevada, filed new schedules of assets
and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ------- -----------
A. Real Property $0
B. Personal Property $12,041,574
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $0
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $24,502,319
---------- -----------
TOTAL $12,041,574 $24,502,319
The previously schedules filed by the Debtor showed $12,041,574 in
assets and $19,688,291 in liabilities.
R & S St. Rose Lenders, LLC, filed for Chapter 11 bankruptcy
protection (Bankr. D. Nev. Case No. 11-14973) on April 4, 2011.
Zachariah Larson, Esq., and Sarah Larson, Esq., at Larson &
Stephens, LLC, in Las Vegas, serve as bankruptcy counsel.
RAY ANTHONY: Huntington et al Seek Abandonment of Century Interest
------------------------------------------------------------------
United Bank, Inc. and The Huntington National Bank seek that all
of Ray G. Anthony's interests in Century Steel Erectors Company,
LP, be abandoned.
Mr. Anthony own a corporation called Ray Anthony International,
LLC. Mr. Anthony and his spouse pledged their ownership interests
in Century Steel, among other assets, as additional collateral to
United Bank and HNB. Both United Bank and HNB are secured
creditors holding blanket liens in all of RAI's cash collateral
and various assets.
Currently pending before the U.S. Bankruptcy for the Western
District of Pennsylvania in RAI's bankruptcy case is a motion to
sell a significant portion of its remaining assets to Red White &
Blue Crane, LLC. Unless the Debtor's interests in Century Steel
are sold, RWB cannot obtain the financing to consummate its
acquisition of the Debtor's assets. If the RWB sale does not
close, it is anticipated that there will be significant
further diminution in the value of RAI's cash collateral, and the
deficiency claims of creditors whose cranes and other collateral
proposed to be sold in the RWB sale, which were guaranteed
by the Debtor, will be substantially increased, thereby
substantially increasing the aggregate claims for the Debtor's
estate.
Based upon the significant liens held by United and HNB upon the
Debtor's Century Steel equity interests, and the asserted
exemption to which no party objected, it appears that there is no
equity interest in the Debtor's estate in said property.
West Mifflin, Pennsylvania-based Ray Anthony International, Inc.,
filed for Chapter 11 bankruptcy protection (Bankr. W.D. Pa. Case
No. 10-26576) on Sept. 15, 2010. The Debtor estimated assets
and debts at $50 million to $100 million as of the Chapter 11
filing. Affiliate Ray G. Anthony filed a separate Chapter 11
petition (Bankr. W.D. Pa. Case No. 10-26552) on Sept. 14, 2010.
RAY ANTHONY: Court Enters Order on Ameriserv Adequate Protection
----------------------------------------------------------------
Judge Thomas P. Agresti of the U.S. Bankruptcy Court for the
Western District of Pennsylvania approved a third extended consent
order on adequate protection relief for Ameriserv Financial Bank
in the bankruptcy cases of Ray Anthony International, LLC.
In order to resolve the lift stay motion filed by Ameriserv, the
consent order provides that:
-- The Debtor will have made one adequate protection payment to
Ameriserv from the cash collateral generated from and with
respect to four crane equipment in the amount of $31,250.
-- Ameriserv, upon receipt of payment, will disburse to United
Bank, Inc. $2,500 as a form of adequate protection pending
resolution of the dispute between Ameriserv, United Bank and
The Huntington National Bank regarding the priority of each
parties security interest in the RT700 Rough Terrain Crane,
Serial No. 15606.
-- The automatic stay is terminated to permit Ameriserv to
negotiate a resolution of the insurance claim related to
damage noted in the 2008 AC 80-2 All Terrain Crane, Serial
No. 48105. In this regard, United Bank and Huntington
acknowledge and agree that Ameriserv holds a senior interest
in the 2008 AC 80-2 All Terrain Crane, Serial No. 48105, and
that Ameriserv is entitled to the proceeds up to the amount
of its debt.
-- The Debtor will provide Ameriserv, upon request, proof that
full insurance coverage is in place on the Cranes and that
Ameriserv is listed as a lender-loss payee for each Crane.
-- The Debtor will have tender, by May 31, 2011, payment of a
sum acceptable to Ameriserv for full settlement of Debtor's
obligations with respect to the Cranes. Ameriserv's right
to receive payment of the Settlement Amount is subject to
the rights, liens and any interests of United Bank and
Huntington in the Cranes, and Ameriserv will hold in escrow
the portion of the Settlement Amount related to the security
interests disputed by Ameriserv, United Bank and/or
Huntington pending resolution of any dispute by agreement of
Ameriserv, United Bank and/or Huntington or further order of
the court.
-- Ameriserv consents to Debtor using cash collateral,
including cash collateral in which Ameriserv is determined
to have a senior interest, pursuant to and in accordance
with the cash collateral Orders entered in the Debtor's
case, including the Second Amended Consented to Final
Cash Collateral Order which the parties acknowledge remain
subject to Huntington's Motion for Reconsideration.
West Mifflin, Pennsylvania-based Ray Anthony International, Inc.,
filed for Chapter 11 bankruptcy protection (Bankr. W.D. Pa. Case
No. 10-26576) on Sept. 15, 2010. The Debtor estimated assets
and debts at $50 million to $100 million as of the Chapter 11
filing. Affiliate Ray G. Anthony filed a separate Chapter 11
petition (Bankr. W.D. Pa. Case No. 10-26552) on Sept. 14, 2010.
RAY ANTHONY: Huntington Seeks $347,000 Adeq. Protection Payments
----------------------------------------------------------------
Huntington National Bank seeks a court order requiring Ray Anthony
International, LLC, to make a $347,141.02 adequate protection
payment for the continued use of the collateral without delay.
The Debtors and Huntington are parties to pre-bankruptcy loan
agreements, including a $2 million commercial loan and 6 financing
leases.
Huntington notes that the Debtors indicated in October 2010 that
they would surrender and turn over Huntington's collateral as they
did not need it for business. However, Huntington has not been
able to recover the Collateral as of May 20, 2011.
In this light, Huntington asserts that it is entitled to adequate
protection payments from the Debtors for the use of the Collateral
because its interest in the Collateral have been impaired as the
value of the equipment has eroded by the continued use of the
equipment in the Debtors' operation which caused the Collateral to
depreciate.
West Mifflin, Pennsylvania-based Ray Anthony International, Inc.,
filed for Chapter 11 bankruptcy protection (Bankr. W.D. Pa. Case
No. 10-26576) on Sept. 15, 2010. The Debtor estimated assets
and debts at $50 million to $100 million as of the Chapter 11
filing. Affiliate Ray G. Anthony filed a separate Chapter 11
petition (Bankr. W.D. Pa. Case No. 10-26552) on Sept. 14, 2010.
REAL MEX: Names Edie Ames as New Chief Operating Officer
--------------------------------------------------------
Real Mex Restaurants, Inc., appointed Edie Ames as the Company's
new Chief Operating Officer, effective July 11, 2011.
A seasoned restaurant industry executive, Ms. Ames most recently
served as Chief Operating Officer of Del Frisco's Restaurant
Group, LLC, a boutique steakhouse company that owns and operates
the Del Frisco's Double Eagle Steak House and Sullivan's
Steakhouse concepts. In that role, she was responsible for
operations, culinary, beverage, training, marketing, social media,
human resources and national sales. Previously, she served as
President of Morton's Restaurant Group, Inc., for five years,
overseeing all restaurant operations, along with purchasing,
marketing, training, human resources and sales with a worldwide
staff of more than 4,500 employees. Ms. Ames began her restaurant
career at California Pizza Kitchen, Inc., where she held positions
of increasing responsibility over an 11 year period, including
restaurant general manager, regional director of operations, and
regional vice president of operations and training.
David Goronkin, Chairman, President and Chief Executive Officer of
Real Mex Restaurants, Inc., said, "We are pleased to be welcoming
Edie to Real Mex Restaurants and are highly confident that she
will play an instrumental role in shaping our Company's future.
Edie has a tremendous passion for people and a unique ability to
engage them in driving organizational success. Throughout her
career, she has established a proven track record of aligning
functional departments with operations to improve efficiencies and
execution, and we intend to leverage Edie's well-defined skill set
to achieve similar objectives at Real Mex. We are delighted that
an individual of her caliber is joining our executive team."
About Real Mex
Based in Cypress, California, Real Mex Restaurants, Inc., owns and
operates restaurants, primarily through its major subsidiaries El
Torito Restaurants, Inc., Chevys Restaurants, LLC, and Acapulco
Restaurants, Inc. The Company operated 183 restaurants as of
March 28, 2010, of which 152 were located in California and the
remainder were located in 12 other states, primarily under the
trade names El Torito Restaurant(R), Chevys Fresh Mex(R) and
Acapulco Mexican Restaurant Y Cantina(R). In addition, the
Company franchised or licensed 34 restaurants in 12 states and two
foreign countries as of March 28, 2010. The Company's other major
subsidiary, Real Mex Foods, Inc., provides internal production,
purchasing and distribution services for the restaurant operations
and also provides distribution services and manufactures specialty
products for sale to outside customers.
Real Mex carries a 'Caa2' Corporate Family Rating, and stable
Outlook from Moody's Investors Service.
At the end of August 2010, Moody's said the 'Caa2' CFR continues
to reflect the challenges Real Mex will face to reverse its
revenue decline primarily driven by the ongoing, albeit somewhat
decelerated, negative same store sales trend, in a very difficult
operating environment for casual dining concepts. The rating also
incorporates the company's high financial leverage, poor interest
coverage and weak free cash flow generation.
The Company reported a net loss of $17.78 million on $227.91
million of total revenues for the six months ended Dec. 26, 2010,
compared with a net loss of $49.59 million on $500.60 million of
total revenues for the fiscal year ended Dec. 27, 2009.
The Company's balance sheet at March 27, 2011, showed $276.64
million in total assets, $255.35 million in total liabilities and
$21.29 million in total stockholders' equity.
REOSTAR ENERGY: Revokes Registration of Common Stock
----------------------------------------------------
ReoStar Energy Corporation filed on June 16, 2011, on Form 15 a
notice of termination of registration of their Common Stock, par
value $0.001 per share under Section 12(g) of the Securities
Exchange Act of 1934.
A copy of the Form 15 is available at http://is.gd/tjvO3d
About ReoStar Energy
Fort Worth, Texas-based ReoStar Energy Corporation is engaged in
the exploration, development and acquisition of oil and gas
properties, primarily located in the state of Texas. The Company
owns roughly 9,000 acres of leasehold, which include 5,000 acres
of exploratory and developmental prospects as well as 4,000 acres
of enhanced oil recovery prospects. The Company filed for Chapter
11 bankruptcy protection (Bankr. N.D. Tex. Case No. 10-47176) on
Nov. 1, 2010. Bruce W. Akerly, Esq., Arthur A. Stewart, Esq.,
and Perry J. Cockerell, Esq., at Cantey Hanger LLP, in Dallas,
represent the Debtors in their restructuring efforts. Greenberg
Taurig, LLP, serves as special corporate/securities counsel.
Reostar Energy disclosed $15,335,337 in assets and $16,391,412 in
liabilities.
ReoStar Energy's bankruptcy case is jointly administered with
ReoStar Gathering, Inc., ReoStar Leasing, Inc., and ReoStar
Operating, Inc. ReoStar Energy is the lead case.
No trustee was appointed in the Debtors' cases. On Jan. 10, 2011,
Michael McConnell was appointed as Chapter 11 examiner in the
Debtors cases.
REVLON CONSUMER: Completes 2011 Credit Facility Refinancing
-----------------------------------------------------------
Revlon Consumer Products Corporation consummated the previously-
disclosed refinancing of its existing revolving credit facility.
Under the new $140 million revolving credit facility, the interest
rate spread over the LIBOR base rate was reduced from a 3.00% flat
rate under RCPC's prior revolving credit facility to a range of
2.00% to 2.50%, based on availability under the 2011 Revolving
Credit Facility, with the initial interest rate expected to be
2.00%. Also, under the 2011 Revolving Credit Facility, the
commitment fee on unused revolver availability was reduced from
0.75% to 0.375%. Further, the maturity was extended to June 2016
(it was previously scheduled to mature in March 2014).
Additional existing terms in RCPC's prior revolving credit
facility were modified under the 2011 Revolving Credit Facility to
conform to the recent amendments to RCPC's 2011 Term Loan
Facility, which, as previously disclosed, was refinanced in May
2011.
The 2011 Revolving Credit Facility continues to be guaranteed and
secured by the same collateral package and guarantees that secured
the prior revolving credit facility, including being supported by,
among other things, guarantees from Revlon, Inc. and, subject to
certain limited exceptions, RCPC's domestic subsidiaries.
About Revlon Consumer
Headquartered in New York, Revlon Consumer Products Corporation is
a worldwide cosmetics, skin care, fragrance, and personal care
products company. The company is a wholly-owned subsidiary of
Revlon, Inc., which is majority-owned by MacAndrews & Forbes,
which is in turn wholly-owned by Ronald O. Perelman. Revlon's
net sales for the twelve-month period ended December 2009 were
approximately $1.3 billion. M&F beneficially owns approximately
77.4% of Revlon's outstanding Class A common stock, 100% of
Revlon's Class B common stock and 78.8% of Revlon's combined
outstanding shares of Class A and Class B common stock, which
together represent approximately 77.2% of the combined voting
power of such shares.
The Company's balance sheet at March 31, 2011 showed $1.14 billion
in total assets, $1.78 billion in total liabilities, and a
$644.30 million total stockholders' deficiency.
* * *
As reported by the TCR on Dec. 2, 2010, Standard & Poor's Ratings
Services said that it raised its corporate credit rating on Revlon
Consumer Products Corp. to 'B+' from 'B'. "S&P raised the ratings
on Revlon Consumer Products Corp. to reflect the continued
improvements in operating performance, credit metrics, and its
enhanced liquidity profile," said Standard & Poor's credit analyst
Susan Ding.
In April 2011, Moody's Investors Service upgraded Revlon Consumer
Products Corporation's Corporate Family and Probability of Default
ratings to B1 from B2. The upgrade of Revlon's Corporate Family
rating to B1 reflects the company's ability to sustain operating
and financial momentum despite the ongoing challenges of the
macroeconomic environment and intensified competitive environment.
Revlon's credit metrics continue to improve modestly driven by
strong profitability and cash flow generation with further gains
expected in fiscal 2011.
RIVER EAST PLAZA: Amends Plan to Specify Clawback Payment
---------------------------------------------------------
River East Plaza, LLC, together with plan proponents Geneva
Leasing Associates, Inc. and Geneva Investment Management
Services, Inc. amended their Joint Chapter 11 Plan and Disclosure
Statement.
The Amended Plan, dated May 20, 2011, basically reflects similar
terms to previous plan version. Among other things, Secured
Claims will be paid in full up to the value of the collateral
securing the claims; and Unsecured Claims will receive their pro
rata share of funds in the Unsecured Claims Reserve Account and
are estimated to receive a 4% recovery. Plan financing and
investment will be provided by the SLC Lender and SLC Investor not
to exceed $17.5 million in the aggregate.
An added feature in the Amended Plan is the "Clawback Payment."
Under the treatment for Class 2 Secured Lender's Claims, if the
"Reserve" is insufficient to fund Distributions for all Allowed
Class 3 Senior Mechanics Lien Claims, Allowed Class 4 Other
Secured Claims and all Allowed Claims for unpaid real estate taxes
on the Project accrued prepetition, then the Lender and any
affiliate to whom it has paid any Distribution under the Plan on
account of Lender's Class 2 Claims will remit to the Reorganized
Debtor Cash in the amount -- the Clawback Payment -- necessary to
complete Distributions from the Reserve.
The "Reserve" is equal to: (i) the amount to be deposited in the
Secured Claims Reserve Account, and (ii) all unpaid real estate
taxes on the Project accrued prepetition.
The Amended Disclosure Statement is also updated to disclose
bankruptcy-related events that occurred since the filing of the
previous plan version.
As reported by the Troubled Company Reporter on June 1, 2011, the
Honorable Bruce has established July 11, 2011, as the combined
hearing date to consider the adequacy of the disclosure
statement and confirmation of the Chapter 11 Plan. Eligible
voting creditors have until June 29, 2011, to file their ballots.
Full-text copies of the Amended Plan and Disclosure Statement,
dated May 20, are available for free at:
http://bankrupt.com/misc/RIVEREAST_May20Plan.pdf
http://bankrupt.com/misc/RIVEREAST_May20DS.pdf
Chicago, Illinois-based River East Plaza, LLC, filed for Chapter
11 bankruptcy protection (Bankr. N.D. Ill. Case No. 11-05141) on
Feb. 10, 2011. Michael E. Gosman, Esq., at Whyte Hirschboeck
Dudek S.C., serves as the Debtor's bankruptcy counsel. The Debtor
estimated its assets and debts at $10 million to $50 million.
SAIGON VILLAGE: Settles with East West, Seeks Dismissal of Case
---------------------------------------------------------------
Saigon Village, LLC, asks the U.S. Bankruptcy Court for the
Northern District of California, San Jose Division, to dismiss its
Chapter 11 case after entering into a settlement with East West
Bank, as assignee of the Federal Deposit Insurance Corporation as
receiver of United Commercial Bank.
The settlement provides, among other things, that:
-- EWB will restructure the loan to a principal amount of
$12,000,000, from approximately $18,000,000;
-- the Restructured Loan will have a term of 12 months with
interest at the Wall Street Journal Prime Rate plus 2%;
-- the Debtor will make monthly interest-only payments of
$60,000 per month;
-- the Restructured Loan will be subject to execution of new
loan documents reflecting the restructured terms;
-- the bank's security interests will remain unchanged;
-- the term of the Restructured Loan may be extended based upon
Debtor reaching certain benchmarks for the sale of the
commercial condominiums owned by Debtor;
-- the Debtor will establish two reserve accounts with the
funds currently held in the DIP Account, with one reserve
utilized for payment of interest, and the other as an
operating account to pay for operating expenses and approved
tenant improvements;
-- EWB, which is also a tenant at the property owned by Debtor,
will have the right to terminate its lease prior to the end
of the term of the lease, subject to a penalty if
termination occurs prior to October 31, 2011;
-- the parties waive the provisions of Section 1542 of the
California Civil Code;
-- EWB will dismiss a currently pending state court litigation
against the Debtor; and
-- the Debtor will dismiss the adversary proceeding pending
before the Court against East West.
According to Lawrence A. Jacobson, Esq., at Cohen and Jacobson,
LLP, in Redwood City, California, the settlement resolves the
primary and central dispute pending in the Bankruptcy Case.
The settlement, Mr. Jacobson tells the court, will reduce EWB's
claim against the Debtor by $6,000,000, and will allow Debtor the
opportunity to rent and sell its property in order to pay its
creditors. The settlement will also reduce the risks associated
with the litigation pending between the parties, he adds.
In the pending litigations the bank alleges that it is fully
secured, presently entitled to foreclose upon the property, and
that the value of the property is insufficient to pay the balance
owing to EWB. While the Debtor disputes EWB's claims, and alleges
both that EWB is unsecured and that the value of the property
exceeds the balance of the loan, if EWB were to prevail at trial
then Debtor would lose the real property which constitutes the
Debtor's most valuable asset. However, the settlement
significantly reduces the bank's claim, allows Debtor to sell the
property in order to pay the bank, and will therefore allow Debtor
the opportunity to pay other creditors after the loan balance is
paid, Mr. Jacobson says.
About Saigon Village, LLC
Milpitas, California-based Saigon Village, LLC, filed for Chapter
11 bankruptcy protection on December 3, 2009 (Bankr. N.D. Calif.
Case No. 09-60597). Lawrence A. Jacobson, Esq., at Law Offices of
Cohen and Jacobson represents the Debtor. The Company estimated
assets and liabilities at $10 million to $50 million.
SAINT VINCENTS: Bid to Dismiss Malpractice Suit Denied
------------------------------------------------------
Judge Alice Schlesinger of the Supreme Court, New York County,
denied in all respects the request of Saint Vincent Catholic
Medical Centers of New York s/h/a St. Vincent's Catholic Medical
Centers, to dismiss a medical malpractice action as against it
pursuant to Civil Practice Law and Rules Section 3211 (a)(5) and
(7) on the ground that plaintiffs claims are barred due to
discharge in bankruptcy. Plaintiff vigorously opposes, asserting
that the claims were properly preserved pursuant to a Stipulation
and Order dated Feb. 16, 2011, and approved by United States
Bankruptcy Judge Cecelia G. Morris. Defendants Dr. Roshan and Dr.
Shaw argue that, regardless of the disposition of plaintiffs
claim, their right to seek contribution from St. Vincent's has not
yet accrued and therefore cannot be barred. In reply, St.
Vincent's contends that plaintiff's claims were barred before the
Stipulation and Order was issued and that the Stipulation does not
prevent St. Vincent's from asserting the defense of a discharge of
the claim in bankruptcy.
The case is Yu Yun Dong, as mother and natural guardian of Danny
Chen, an infant, v. Reginald Ruiz, M.D., Daniel Clement, M.D.,
Daniel Roshan, M.D., Mary Marron-Corwin, Walter Von Pechman, M.D.,
Eileen Cassidy, M.D., Alexander Maatveevski, M.D., Richelle
Gaskin, M.D., Tina Lung, M.D., Betsy Arnald, Leahy, C.N.M., and
St. Vincent's Catholic Medical Centers, Docket No. 109135/2009
(N.Y. Sup. Ct. New York Cty.). A copy of the Court's slip
opinion, dated June 14, 2011, is available at http://is.gd/X42ns7
from Leagle.com.
About Saint Vincents
Saint Vincents Catholic Medical Centers of New York, doing
business as St. Vincent Catholic Medical Centers --
http://www.svcmc.org/-- was anchored by St. Vincent's Hospital
Manhattan, an academic medical center located in Greenwich Village
and the only emergency room on the Westside of Manhattan from
Midtown to Tribeca, St. Vincent's Westchester, a behavioral health
hospital in Westchester County, and continuing care services that
include two skilled nursing facilities in Brooklyn, another on
Staten Island, a hospice, and a home health agency serving the
Metropolitan New York area.
Saint Vincent Catholic Medical Centers of New York and six of its
affiliates first filed for Chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case Nos. 05-14945 through 05-14951).
St. Vincents Catholic Medical Centers returned to bankruptcy court
by filing another Chapter 11 petition (Bankr. S.D.N.Y. Case No.
10-11963) on April 14, 2010. The Debtor estimated assets of $348
million against debts totaling $1.09 billion in the new petition.
Although the hospitals emerged from the prior reorganization in
July 2007 with a Chapter 11 plan said to have "a realistic chance"
of paying all creditors in full, the bankruptcy left the medical
center with more than $1 billion in debt. The new filing occurred
after a $64 million operating loss in 2009 and the last potential
buyer terminated discussions for taking over the flagship
hospital.
Adam C. Rogoff, Esq., and Kenneth H. Eckstein, Esq., at Kramer
Levin Naftalis & Frankel LLP, represent the Debtor in its
Chapter 11 effort.
SEQUENOM INC: Seven Directors Elected at Annual Meeting
-------------------------------------------------------
Sequenom, Inc.'s Board of Directors elected Charles P. Slacik as a
director. In addition, the Company's Board of Directors appointed
Mr. Slacik to the Audit Committee of the Company's Board of
Directors. In accordance with the Company's compensation policies
for non-employee directors, Mr. Slacik was granted a nonqualified
stock option to purchase 40,000 shares of the Company's common
stock at $7.89 per share, the fair market value of the common
stock on the date of grant. Mr. Slacik will receive additional
compensation for his service as a director in accordance with the
Company's compensation policies for non-employee directors, which
are described under "Board of Director Compensation" in the
Company's proxy statement filed with the Securities and Exchange
Commission on April 25, 2011. Mr. Slacik entered into an
indemnification agreement with the Company.
On June 15, 2011, the Company held its Annual Meeting at which the
Company's stockholders (i) elected Ernst-Gunter Afting, Kenneth F.
Buechler, John A. Fazio, Harry F. Hixson, Jr., Richard A. Lerner,
Ronald M. Lindsay and David Pendarvis as directors to hold office
until the Company's annual meeting of stockholders in 2012, (ii)
approved the Company's 2006 Equity Incentive Plan, as amended, to
increase the number of shares of the Company's common stock
available for issuance under such plan by 4,000,000 shares, to
extend the plan's termination date until April 14, 2021, and to
reapprove the plan's performance criteria and award limits for
purposes of Internal Revenue Code Section 162(m), (iii) approved,
on an advisory basis, the compensation of the Company's named
executive officers, (iv) indicated, on an advisory basis, that the
preferred frequency of stockholder advisory votes on the
compensation of our named executive officers is every year, and
(v) ratified the selection by the Audit Committee of Ernst & Young
LLP as the Company's independent auditors for the fiscal year
ending Dec. 31, 2011.
About Sequenom
Sequenom, Inc. (NASDAQ: SQNM) -- http://www.sequenom.com/-- is a
life sciences company committed to improving healthcare through
revolutionary genetic analysis solutions. Sequenom develops
innovative technology, products and diagnostic tests that target
and serve discovery and clinical research, and molecular
diagnostics markets. The company was founded in 1994 and is
headquartered in San Diego, California.
Sequenom reported a net loss of $120.85 million on $47.45 million
of total revenue for the year ended Dec. 31, 2010, compared with a
net loss of $71.01 million on $37.86 million of total revenue
during the prior year.
Ernst & Young LLP of San Diego, California, in its audit report
attached to the 2010 financial statements, did not include a going
concern qualification for Sequenom. E&Y, in its report on the
2009 results, expressed substantial doubt against Sequenom's
ability as a going concern, noting that the Company "has incurred
recurring operating losses and does not have sufficient working
capital to fund operations through 2010."
The Company's balance sheet at March 31, 2011, showed
$162.60 million in total assets, $21.08 million in total
liabilities, and $141.52 million in total stockholders' equity.
SHAMROCK-SHAMROCK: Can Access Cash Collateral Thru June 23
----------------------------------------------------------
Judge Arthur B. Briskman of the U.S. Bankruptcy Court for the
Middle District of Florida granted Shamrock-Shamrock, Inc. interim
access to use cash collateral of its lenders through June 23,
2011.
The Debtor is authorized to use cash collateral for (1) payment of
utilities on each of its respective income-producing properties
from the cash collateral generated by each such property; and (2)
necessary repairs on its income-producing properties, where the
net income generated by the property is sufficient to pay for
those repairs, after payment of utilities.
If a parcel of real property does not generate sufficient income
for payment of necessary repairs related to that property, the
Debtor is not permitted to utilize cash collateral to make repairs
to that property without (i) obtaining the consent of the secured
lender whose cash collateral the debtor seeks to utilize; or (ii)
filing a motion with the court for such use of cash collateral.
Use of cash collateral is conditioned on the Debtor:
a. Identifying each parcel of real property and corresponding
lien holder.
b. Identifying the amount of cash collateral generated by each
parcel of real property, and the expenses related to each
such parcel of real property.
c. Identifying, through the Debtor's monthly operating reports,
the cash collateral received from each property.
d. To the extent a secured creditor's cash collateral is used,
that secured creditor will be granted a replacement lien on
postpetition cash, cash collateral, and rents in the same
priority and to the same extent as the secured creditor's
prepetition liens.
As reported by the Troubled Company Reporter on May 26, 2011, the
cash collateral secure the Debtors' obligations to lender parties
American Home Mortgage Services Inc., American Brokers Conduit,
Friends Bank, Litton Loan Servicing LP, National City/PNC Bank,
Select Portfolio Servicing Inc., Stancorp Financial Group, Inc.,
SunTrust, and Wells Fargo Bank N.A.
The Court-granted replacement liens and security interests secures
payment of the Debtor's prepetition indebtedness owed to the
Secured Lender Parties in an amount equal to any diminution of
value of the Lenders' interest in their prepetition collateral
which occurs during the pendency of the Debtor's bankruptcy case.
The Court is set to conduct a final evidentiary hearing on the
Debtor's cash collateral use motion on June 23, at 1:00 p.m.
About Shamrock-Shamrock
Daytona Beach, Florida-based Shamrock-Shamrock Inc. owns 70
parcels of Florida real property. It filed for Chapter 11
protection (Bankr. M.D. Fla. Case No. 11-07061) on May 10, 2011.
Judge Arthur B. Briskman presides over the case. The Law Offices
of Mickler & Mickler serves as bankruptcy counsel. The Company
scheduled assets of $12,284,976 and liabilities of $17,021,201,
owing on mortgages to a variety of lenders.
SLEAD'S CONSTRUCTION: Case Summary & 20 Largest Unsec Creditors
---------------------------------------------------------------
Debtor: Slead's Construction, Inc.
dba Slead Construction
9021 Waller Road East
Tacoma, WA 98446
Bankruptcy Case No.: 11-44853
Chapter 11 Petition Date: June 15, 2011
Court: United States Bankruptcy Court
Western District of Washington (Tacoma)
Judge: Brian D. Lynch
Debtor's Counsel: Jeffrey P. Helsdon, Esq.
OLDFIELD & HELSDON PLLC
1401 Regents Blvd Suite 102
Fircrest, WA 98466
Tel: (253) 564-9500
E-mail: jhelsdon@tacomalawfirm.com
Scheduled Assets: $2,380,755
Scheduled Debts: $2,047,214
A list of the Company's 20 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/wawb11-44853.pdf
The petition was signed by Lester A. Slead, president.
SMART-TEK SOLUTIONS: Inks $5.50 Million Funding with La Jolla
-------------------------------------------------------------
Smart-Tek Automated solutions entered into a $5,500,000 funding
arrangement with La Jolla Cove Investors, Inc., consisting of a
$500,000 Convertible Debenture and a $5,000,000 Equity Investment
Agreement.
The basic terms are as follows:
* $5,500,000 Financing Proposal
* Security: $500,000 Convertible Debenture with $5,000,000
Equity Investment Agreement
* Debenture Funding: $500,000 funded upon closing
* EIA [Equity Investment Agreement]: $5,000,000 of investment
will be made via the EIA. For every $50,000 funded under the
EIA, La Jolla shall receive the right to purchase 10,000
shares of Smart-Tek at $1 per share, expiring 5 years after
the issuance date.
* EIA Funding Schedule: Funding will be made available for the
acquisition of PEO businesses, as a part of the Smart-Tek
consolidation/roll-up strategy. Such funds will be
considered prepayment under the EIA. The acquisitions are
subject to LJCI's approval; such approval will not be
unreasonably withheld.
* Commencing 6 months from the closing date, LJCI will begin
funding $50,000 per month under the EIA
* Debenture Conversion: Pursuant to each EIA funding, La Jolla
will have the right, but not the obligation, to convert an
amount of the Debenture equal to 1/10th of the amount funded
under the applicable EIA advance.
* The number of shares into which the Debenture can be
converted is equal to the dollar amount of Debenture being
converted divided by the Conversion Price divided by 10, plus
the amount of Debenture being converted divided by the
Conversion Price
* Conversion Price: The lesser of: (a) $0.35, or (b) 80% of the
average of the 3 lowest VWAP (Volume Weighted Average Price)
prices during the 21 trading days prior to the election to
convert.
* Floor Price: $0.035, such that if Common Stock of the Company
is trading below such level, the Company may elect to refuse
such Conversion in exchange for redemption of the portion
LJCI sought to convert
* Interest Rate: 4.75% per annum on the Debenture, payable
monthly in either cash or Common Stock, at the Company's '
option
* Maturity Date: 5 years from the Closing Date
* Control Limitation: LJCI is willing to limit its holding to
less than 9.99% of outstanding Common Stock of the Company
* Use of Proceeds: The Company will use the proceeds for
working capital and business expansion purposes and not for
the repayment or redemption of any obligations or interests
held by any officers, directors, or shareholders of the
Company or any other notes or indebtedness
About Smart-tek Solutions
Newport Beach, Calif.-based Smart-tek Solutions Inc. has two
business lines. Through its wholly owned subsidiary Smart-Tek
Communications Inc. the Company specializes in the design and
development of Radio Frequency Identification (RFID) integration,
monitoring and tracking solutions to meet industry demands.
Through its wholly owned subsidiary Smart-Tek Automated Services
Inc. the Company provides professional employer organization
services.
John Kinross-Kennedy, of Irvine, California, expressed substantial
doubt about the Company's ability to continue as a going concern.
Mr. Kinross-Kennedy noted that that the Company has suffered
recurring losses until the latest fiscal year, and has a working
capital deficiency of $994,278 and a stockholders' deficiency of
$438,164 at June 30, 2010.
The Company's balance sheet at March 31, 2011, showed $4.31
million in total assets, $3.17 million in total liabilities, all
current, and $1.13 million in total stockholders' equity.
SMITHFIELD FOODS: Fitch Rates New Secured Loan at 'BB+/RR1'
-----------------------------------------------------------
Fitch Ratings has revised Smithfield Foods, Inc.'s Rating Outlook
to Positive from Stable. Fitch has also assigned a 'BB+/RR1'
rating to the company's new 5-year $925 million asset-based
revolving loan and has withdrawn the rating on Smithfield's old $1
billion ABL due July 2, 2012.
Additionally, Fitch has affirmed these ratings:
-- Long-term Issuer Default Rating (IDR) at 'B+';
-- Secured term loan at 'BB+/RR1';
-- Secured notes at 'BB+/RR1';
-- Senior unsecured debt at 'B/RR5'.
At May 1, 2011, Smithfield had approximately $2.0 billion of total
debt and $375 million of cash.
Rating Rationale and Triggers:
The Positive Outlook is due to Smithfield's commitment to maintain
conservative financial policies and Fitch's outlook for the pork
industry. Smithfield's leverage, defined as total debt-to-
operating EBITDA, is currently below 2.0 times (x). The company
has stated that it is comfortable with net debt-to-adjusted EBITDA
at or below 3.0x with a ceiling of 4.0x and as of this time has
terminated negotiations to acquire a controlling interest in
Campofrio Food Group. Furthermore, while grain prices remain
elevated, tight global supply and good export demand continue to
result in strong pricing across the pork complex. A prudent
financial strategy combined with good supply/demand dynamics
should enable Smithfield to generate meaningful cash flow and
bolster internally generated liquidity.
Smithfield's credit metrics are better than Fitch had anticipated
following the two notch upgrade of the company's IDR and
corresponding issue-level ratings on Jan. 31, 2011. For the year
ended May 1, 2011, total debt-to-operating EBITDA is below 2.0, as
mentioned above, while operating EBITDA-to-gross interest expense
is about 5.0x. Fitch estimates that Smithfield's consolidated
EBITDA margin was over 9% and that the company generated over $400
million of free cash flow (FCF) during fiscal 2011.
Liquidity, including cash and revolver availability, at Jan. 30,
2011 was $1.3 billion. Smithfield has indicated that its liquidity
as of June 16, 2011, is approximately $1.5 billion. Upcoming
maturities include about $78 million of 7% senior unsecured notes
due Aug. 1, 2011, $160 million of 7.75% senior unsecured notes due
May 15, 2013, and $400 million of 4% convertible notes due June
30, 2013.
Smithfield's ratings continue to reflect the volatility and
relatively low normalized margins of the commodity protein
industry along with the company's lack of meaningful product
diversity. Absolute debt levels, the maintenance of adequate
liquidity and good risk management are key factors for the
company's ratings.
The Outlook revision considers that fiscal 2011 was a record year
and, due to the potential for margin contraction in fiscal 2012,
reflects the fact that Fitch rates through the operating cycle for
commodity food companies. Fitch currently views 6% as a mid-cycle
EBITDA margin and roughly $100 million as normalized FCF
generation for Smithfield. These levels are below the record
levels achieved in fiscal 2011 but would be adequate even if the
company's ratings were above current levels.
The existing 'B+' IDR reflects Fitch's view that Smithfield can
maintain leverage below 4.0x in most years. Therefore, additional
upgrades are likely should management maintain leverage at its
comfort level and total debt-to-operating EBITDA approximates 3.0x
or lower over the near-to-intermediate term. A prudent approach to
share repurchases would also be viewed positively.
The 'RR1' rating on Smithfield's secured debt indicates that Fitch
views recovery prospects on this debt as outstanding at 91% --
100%. The 'RR5' rating assigned to Smithfield's senior unsecured
notes reflects Fitch's opinion that recovery prospects would be
below average at 11%-30% if the bonds went into default, though
this is not anticipated. Fitch's recovery analysis consists of an
estimate of Smithfield's enterprise value in a distressed
situation and the assumption that the company's revolver is fully
drawn.
New Credit Facilities and Amended Term Loan:
Smithfield's new $925 million ABL is due June 9, 2016 or March 15,
2014 if more than $300 million, less balance sheet cash in excess
of $75 million; of the company's 10% senior secured notes due July
15, 2014 are outstanding at that time. Approximately $649 million
of these notes are currently outstanding. The ABL, which has a
$300 million expansion feature, has collateral consisting chiefly
of a first priority claim on cash, inventory and receivables not
pledged under the company's accounts receivable (A/R)
securitization facility along with a second priority claim on net
property, plant and equipment (PP&E). The applicable Eurodollar
margin for the new ABL is leverage-based and ranges from 2.5%-
3.25%. Pricing on Smithfield's old ABL was ratings-based with a
Eurocurrency spread of 4.0% -- 4.5%.
Smithfield also extended the maturity date on its $200 million
secured term loan to June 9, 2016 from Aug. 29, 2013. The term
loan is mainly secured by a 1st priority lien on PP&E and a 2nd
priority lien on ABL collateral. The applicable Eurodollar margin
for the term loan has been reduced to 3.75% from 5.75% before the
amendment.
Fitch views the refinancing positively because it extends
maturities, lowers on-going interest expense and increases the
company's financial flexibility. When factoring in the company's
new $275 million A/R securitization facility due June 9, 2014,
Smithfield has also increased its overall liquidity by $200
million.
The new ABL and amended term loan include financial maintenance
covenants that did not previously exist under the old agreements.
The ABL has a maximum leverage ratio (defined as consolidated
funded debt-to-consolidated capitalization) of 50%, a minimum
interest coverage ratio of 2.5x, and capital expenditures limits
of $350 million for fiscal 2012 and $300 million thereafter. The
old ABL contained significant restrictions but the only financial
covenant was a springing fixed charge coverage ratio, based on
availability, of 1.1x.
The amended term loan also subjects Smithfield to a minimum
interest coverage ratio of 1.75x which did not exist previously.
Based on Smithfield's record performance during fiscal 2011, Fitch
estimates that the company has nearly 50% EBITDA cushion under its
coverage-based financial maintenance covenants.
The term loan also includes an amendment that results in a less
onerous repayment schedule. Prior to the 2016 maturity date, one
$25 million installment is due on June 9, 2015 versus two $25
million installments on Aug. 29, 2011 and Aug. 29, 2012 prior to
the amendment.
SOUTHERN UNION: Fitch Affirms 'BB' Junior Subordinated Rating
-------------------------------------------------------------
Fitch Ratings has affirmed the issuer default ratings of Southern
Union Company and Panhandle Eastern Pipe Line Company, LP at 'BBB'
following the announcement of the acquisition by Energy Transfer
Equity, L.P.
SUG and ETE announced earlier that ETE will purchase all of SUG's
outstanding common stock in exchange for newly issued ETE Series B
Units. The total purchase price is $7.9 billion, including $4.2
billion in equity units and assumed debt of $3.7 billion. The
transaction is expected to close in the first quarter of 2012
subject to SUG shareholder and regulatory approvals.
The affirmation reflects Fitch's consideration of the impact the
change in ownership is expected to have on the financial profile
of both SUG and PEPL going forward. While no additional debt is
expected to be issued at either entity, the pace of previously
anticipated deleveraging through free cash flow could slow given
higher equity distributions under the new ownership structure.
However, Fitch also expects that debt could be reduced in
connection with future asset dropdowns to master limited
partnership affiliates (through ETE), depending on the amount and
allocation of proceeds.
While management has indicated that maintenance of investment
grade ratings is a priority, SUG's bond indentures include limited
restrictions on asset sales thus providing little if any
protection to bondholders. The buyer has indicated that SUG will
be maintained as a separate legal entity with its own board of
directors, including one independent director, although Fitch does
not give significant weight to this as a form of bondholder
protection.
The key drivers of SUG's ratings continue to be the stable
performance of the company's regulated businesses which include
significant Federal Energy Regulatory Commission -- regulated
pipeline transportation and storage assets, as well as regulated
gas distribution businesses in Missouri and Massachusetts. SUG's
pipeline assets include PEPL, Trunkline LNG (contractually
supported by contracts with BG LNG Services), and an indirect 50%
interest in Florida Gas Transmission. The ratings also consider
the volatility associated with the gathering and processing
business, which represents significant commodity risk, despite an
active hedging program. While PEPL's standalone credit profile is
supported by stable FERC-regulated pipeline operations, LNG
facilities under long-term contracts and the structural seniority
of its debt obligations to those at SUG, its ratings have
reflected the clear linkage between the parent and subsidiary.
In addition to those factors noted, the Stable Outlook for both
SUG and PEPL reflects the expectation that, absent this
transaction, both issuers' credit and business risk profiles are
expected to improve in the near term given that the Trunkline LNG
Infrastructure Enhancement Project came online in 2010 and longer
term as dividends from FGT are restored following the completion
in April of its Phase 8 expansion project.
Fitch affirms these ratings:
Southern Union Company
-- IDR at 'BBB-';
-- First Mortgage bonds at 'BBB';
-- Senior Unsecured at 'BBB-';
-- Junior Subordinated at 'BB'.
Panhandle Eastern Pipe Line Company
-- IDR at 'BBB-';
-- Senior Unsecured at 'BBB-';
The Outlook for both issuers is Stable.
SPRINGFIELD LANDMARKS: Reaches Deal With Creditors to Repay Debt
----------------------------------------------------------------
The Springfield Landmarks Preservation Trust reached an agreement
with creditors, including Guaranty Bank, to repay its debt and
keep the theatre open, according to OzarksFirst.com.
According to the report, more than $183,000 in donations were
pledged to help save the theatre, which had undergone a multi-
million dollar renovation that was completed in October 2006.
On Friday, Theater Board President Dave Rolling said, "a Federal
Bankruptcy judge will enter the order that will become the new
contract between SLPT / Gillioz-Netters LP and its creditors,
thereby allowing the closing of the bankruptcy case. As part of
the plan, SLPT and Netters-Gillioz Partnership will repay the note
with Guaranty Bank in accordance with terms to be submitted to and
approved by the bankruptcy court. "
The report relates that the Gillioz says the plan of
reorganization proposed required ballots of approval from SLPT and
Netters-Gillioz, LP creditors. All ballots cast at the hearing
were in favor of the proposed agreement, including a ballot of
approval from the City of Springfield.
About Springfield Landmarks & Gillioz Restoration
Based in Springfield, Missouri, The Springfield Landmarks
Preservation Trust and Gillioz Restoration Partnership, LP, filed
for Chapter 11 bankruptcy (Bankr. W.D. Mo. Cases No. 10-63128 and
10-63130, respectively) on Dec. 30, 2010, to forestall a
foreclosure sale of the Gillioz Theater by Guaranty Bank on
account of a $3.5 million loan.
Judge Arthur B. Federman presides over the cases. David E.
Schroeder, Esq. -- bk1@dschroederlaw.com -- at David Schroeder Law
Offices, PC, in Springfield, Missouri, represents both Debtors.
The Trust estimated assets and debts of $1 million to $10 million
in its Chapter 11 petition. Gillioz Restoration estimated under
$50,000 in assets and $1 million to $10 million in debts.
SUNFLOWER/423 LP: Case Summary & 13 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Sunflower/423, LP
2511 Sunflower Drive
Little Elm, TX 75068
Bankruptcy Case No.: 11-41872
Chapter 11 Petition Date: June 14, 2011
Court: United States Bankruptcy Court
Eastern District of Texas (Sherman)
Debtor's Counsel: Jason Michael Katz, Esq.
CURTIS CASTILLO PC
901 Main Street, Suite 6515
Dallas, TX 75202
Tel: (214) 752-2222
Fax: (214) 752-0709
E-mail: jkatz@curtislaw.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 13 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/txeb11-41872.pdf
The petition was signed by Jim Lee, manager of Debtor's general
partner.
SUNWEST MANAGEMENT: Resolves $1.9 Million Land Project Fight
------------------------------------------------------------
Ian Thoms at Bankruptcy Law360 reports that the receiver for
Sunwest Management Inc., which collapsed amid allegations it ran a
$400 million Ponzi scheme, settled a dispute in Oregon on Friday
with a group of investors who sunk $1.9 million into a bare land
project co-owned by the Company.
Under the agreement, Law360 says, the so-called Smart Park 3
investors will get back their investments - minus the money they
made from leasing the Washington property to a Sunwest subsidiary
- from the assets of the litigation trust.
About Sunwest Management
Founded in Oregon in 1991, Sunwest Management --
http://www.sunwestmanagement.com/-- was one of the largest
private senior living providers in the U.S. In March 2009, U.S.
District Judge Michael Hogan appointed Michael Grassmueck --
founder and principal of Portland, Oregon-based Grassmueck Group,
a national firm that specializes in fiduciary and insolvency
services -- as receiver for the Company after the Securities and
Exchange Commission filed suit against Sunwest and former CEO Jon
Harder, alleging securities fraud.
Sunwest Management placed 10 assisted living centers -- two in
Oregon -- into Chapter 11 bankruptcy. Briarwood Retirement and
Assisted Living Community LLC, which owns a retirement center in
Springfield, and Century Fields Retirement and Assisted Living
Community LLC, which owns a center in Lebanon, filed for Chapter
11 protection on August 19, 2008. On Aug. 17, 2008, eight
Sunwest-affiliated LLCs filed for Chapter 11 bankruptcy protection
from creditors in Tennessee.
Sunwest was later renamed Stayton SW Assisted Living. As reported
by the Troubled Company Reporter on July 16, 2010, Judge Hogan
confirmed the plan of reorganization in the Chapter 11 proceedings
of Stayton. The plan provides for the sale of up to 149 senior
living facilities to a joint venture formed by Blackstone Real
Estate Advisors VI L.P., Emeritus Senior Living and Columbia
Pacific Advisors. The Blackstone/Emeritus joint venture acquired
the properties in exchange for cash, securities and debt valued at
$1.3 billion in cash.
Under the Plan, existing Sunwest investors were permitted to
receive either cash or securities in the new company, with a
choice between Class A preferred interests paying 6%, or up to 49%
in common interests in the joint venture. The reorganization plan
also provides for the creation of a Trustco entity to hold certain
non-senior living assets, such as apartments, office buildings and
bare land, and liquidate the assets over time for the benefit of
the estate's investors and creditors. The Receiver oversees
Trustco.
In August 2010, Stayton completed the sale of 132 senior living
facilities to the joint venture. The transaction was valued at
$1.2 billion.
In December 2010, the federal equity receiver in charge of former
Oregon-based senior living provider Sunwest Management announced a
40% initial distribution to investors and other claimants in the
Sunwest securities violation case and related Chapter 11
bankruptcy proceeding. Resources for the initial distribution
total $228 million and derive from a $1.2 billion real estate
transaction closed earlier this year, in which a joint venture led
by Blackstone Real Estate Advisors VI LP and Emeritus Senior
Living acquired 144 Sunwest properties in exchange for cash,
securities and assumption of debt.
SUSQUEHANNA AREA: Fitch Affirms 'BB+' Rating on $24-Mil. Bonds
--------------------------------------------------------------
Fitch Ratings affirms the 'BBB-' underlying rating on Susquehanna
Area Regional Airport Authority's (SARAA; the airport or
authority) approximately $149 million senior lien airport revenue
bonds and 'BB+' on $24 million subordinate lien airport revenue
bonds. The authority's senior and subordinate lien bonds are
secured by a pledge of airport system net revenues and an
irrevocable commitment of passenger facility charge receipts. The
Rating Outlook is Stable.
Rating Rationale:
-- The authority's historically narrow coverage levels on its
combined senior and subordinate debt obligations combined
with an ongoing weak fund balances.
-- Elevated leverage levels that constrains the airport's
financial profile in future years. The debt burden is
significant at approximately $273 million debt per
enplanement when compared to the level of airport operations
resulting in airline charges at close to $15 per
enplanement.
-- Limited size of the local air trade service area which is
also subject to ongoing competition risk from larger
regional airports. The traffic base is supported primarily
by origin & destination demand anchored by state government
and area corporations and universities but the overall
passenger traffic level is small at approximately 650,000
enplanements. Carrier concentration is modest but any
service reductions may influence traffic activity.
-- Demonstrated ability by airport management in times of
service fluctuations to raise airline rates and charges to
meet bondholder covenants.
-- Minimal future capital needs, with no additional debt plan.
Key Rating Drivers:
-- Management actions to maintain adequate cash flow to cover
total airport obligations including rate adjustments to
carriers and cost-containment strategies;
-- Adverse developments with regard to air service or traffic.
The AirTran service could be at risk given the recent
acquisition by Southwest which currently serves at larger
airports in the region.
-- Actions to rebuild the airport's unrestricted liquidity and
managing its debt service reserve accounts given the
presence of credit lines which will expire in 2014. Fitch
believes the liquidity risk exposure is potentially greater
for the subordinate bonds given the lower coverage levels
for such bonds.
Security:
The senior lien bonds, which are secured by a pledge of airport
system net revenues and an irrevocable commitment of PFC receipts.
The subordinate lien bonds are secured by a subordinate pledge of
airport system net revenues and receipts under a Federal Aviation
Administration Airport Improvement Program (AIP) Letter of Intent
(LOI) grant, all of which monies have been received.
Credit Summary:
Historical financial challenges confronting the authority is a
result of an aggressive capital spending for terminal
infrastructure in the prior decade coupled with general
underperformance of passenger volumes when compared to
projections. The airport's dual lien structure allows for debt
service coverage to remain solid at the senior lien level but
otherwise weak on total debt. Coverage in fiscal 2010 with the
benefit of a coverage account for calculation purposes was
relatively stable from the previous year at 2.44 times (x) and
1.35x on senior lien and subordinate bonds, respectively. Without
the coverage account, coverage levels on total debt was 1.21x.
Fitch notes that with some traffic and revenue improvement in
fiscal 2010, coverage has improved from 2008 and 2009 performance.
Both coverage levels exceeded the required rate covenants of 1.25x
for the senior bonds and 1.10x for all debt. For fiscal 2011, the
authority expects senior lien debt service coverage to decline
slightly to 2.23x, even with taking into account the use of PFCs
as debt service offsets and considering the coverage account. Debt
service coverage on total debt is expected to be 1.24x, in-line
with historical coverage levels. The slight dip in coverage
captures the authority's intention to increase staffing and
forecast for slightly lower enplanement growth.
Traffic trends at the airport have been relatively stable during
the recent recession with minimal air service and enplanement
declines, despite the authority's very high cost per enplanement
(CPE) levels at almost $15 per enplaned passenger. During 2010,
travel demand improved with the growth in both load factors and
seat capacity over the previous year. Fitch notes that in 2010 the
airport turned in a seven year high traffic record of 671,000
enplanements. For fiscal 2011, the authority forecasts
enplanements to decrease by approximately 3%, reflecting the
ongoing uncertainty with rising oil prices and the possible
adverse impacts on seat capacity. Additionally, Fitch views the
airport to be highly sensitive to changes in service, particularly
from AirTran given the pending integration with Southwest and the
carrier's longstanding presence at Baltimore Washington
International and Philadelphia International Aiport airports. The
entrance of AirTran into the marketplace in late 2008, thus the
airport's high cost structure and small enplanement base may leave
the airport more vulnerable to retrenchment should AirTran and
Southwest choose to consolidate operations in the general region.
Operating revenues increased by 6% from 2009, underpinned by a
7.3% increase in enplanements in 2010 from 2009. Almost all
business activities posted improvements; parking revenues
increased a notable 21%, cargo landed weight increased by 20%, and
landing fees grew by 19%. Additionally, in 2010, the authority
raised vehicle parking charges in parking garages and long-term
surface lots to $20 per day and $8.50 per day, respectively.
Parking rates were also raised in 2009 to $18 in the garage spaces
per day and $7 in the long-term surface lot per day. The authority
delivered two years of operating and expense controls. In 2010,
operations and maintenance decreased marginally by 1.6%, driven by
mid-year layoffs implemented in 2009 and the lack of any large
renewal and maintenance efforts during calendar year. In 2009, O&M
declined by 3.0%, which was accomplished through layoffs and
cutting back employee benefits.
Airline cost levels are comparatively high for a small-size
airport and will likely remain elevated given the authority's debt
profile remains at maximum annual debt service through 2033. In
2010, the authority's CPE of $13.34 was only slightly lower than
$14.65 CPE generated in 2009. For 2011, the authority expects this
figure to remain largely unchanged, reflecting the authority's
demonstrated ability to control its variable O&M costs.
SWISS CHALET: CPG/GS Seeks to Prohibit Cash Collateral Use
----------------------------------------------------------
CPG/GS PR NPL LLC asks the U.S. Bankruptcy Court for the District
of Puerto Rico to prohibit Swiss Chalet, Inc.'s use of its cash
collateral.
CPG/GS is the purchaser and successor-in-interest of certain
assets of First Bank Puerto Rico, including, among others, credit
facilities pursuant to the loans of more than $127 million made by
by FBPR to the Debtor. The Loans were provided for the
development, construction and operation of three distinct real
estate projects of the Debtor and a land loan. The Loans are
secured by virtually all of the Debtor's assets, including cash
collateral.
The Debtor has admitted to have used CPG/GS's cash collateral
without an agreement to do so. "This has left CPG/GS without
adequate protection, which it has demanded to no avail, and
continues to demand now," David P. Freedman, Esq., at O;Neill &
Borges, in San Juan, Puerto Rico, asserts, on Swiss Chalet's
behalf.
Moreover, CPG/GS seeks that the Court grant it adequate protection
on an emergency basis by:
(a) requiring an accounting of all Cash Collateral received by
or for the benefit of the Debtor since the Petition Date;
(b) requiring that any Cash Collateral of CPG/GS that is in the
possession, custody or control of the Debtor or any of the
Insiders of the Debtor be turned over to CPG/GS;
(c) prohibiting the Debtor from using any Cash Collateral of
CPG/GS unless otherwise ordered by the Court;
(d) permitting CPG/GS immediate access to the books and records
of the Debtor, including all electronic records on any
company computers, to make electronic copies, photocopies
or abstracts of the business records of the Debtor.
The Court will convene a hearing on June 23, 2011, to consider
CPG/GS's request
About Swiss Chalet
The Swiss Chalet Inc., which owns the Best Western Hotel Pierre in
San Juan, Puerto Rico, filed a Chapter 11 petition (Bankr. D. P.R.
Case No. 11-04414) on May 27, 2011. Charles A. Cuprill, P.S.C.
Law Offices serves as its bankruptcy counsel. In its Schedules,
the Debtor listed total assets of $118,521,510 and total debts of
$132,741,094. The petition was signed by Arnold Benus, director.
TAYLOR & BISHOP: Bridgeview Says Plan is Unconfirmable
------------------------------------------------------
Bridgeview Bank Group, the only secured creditor of Taylor &
Bishop, LLC, complains that the Debtor's proposed bankruptcy plan
effectively strips its security interest in $10 million of
mandatory annual contributions by reclassifying those
contributions as voluntary charitable donations.
The Debtor and Bridgeview are parties to a 2007 agreement for
loans over $10 million. As security for the Loans, the Debtor
granted Bridgeview a security interest in its membership interests
and mandatory capital contributions.
The Plan, Bridgeview asserts, gives the Debtor the authority to
release those members from liability for the continued failure to
meet their contractual duties to make fixed annual contributions.
The Plan also presumes that after five years of making minimal
payments to Bridgeview, it will somehow refinance nearly $9
million in debt to payoff Bridgeview, the secured creditor notes.
In the meantime, the Debtor intends to pay an unsecured creditor
in full, at nearly twice the interest rate offered to Bridgeview
plus a bonus, the secured creditor adds.
"In short, the Plan is not feasible, renders Bridgeview's most
significant collateral nearly worthless, fails to offer the
indubitable equivalent of that collateral, and exists largely to
shield the Debtor's insiders from liability," Marvin C. Ruth,
Esq., at Lewis and Roca LLP, in Phoenix, Arizona, says, on behalf
of Bridgeview. "The Plan is not confirmable as a legal and
factual matter."
Discovery is in order before the plan confirmation hearing will be
conducted, Bridgeview maintains.
As reported in the May 6, 2011 edition of the Troubled Company
Reporter, under the Plan, Bridgeview Bank Group, the Debtor's pre-
bankruptcy lender and largest creditor, owed $9.4 million in loan
amounts, will retain its liens on all property of the Debtor that
served as collateral for repayment of the loans. Bridgeview,
unimpaired under the Plan, will be paid in monthly installments
according to a 25-year amortization schedule. It may elect a
discounted payoff in a lump sum equal to 50% of the allowed claim.
The Court has approved the adequacy of the Disclosure Statement.
A full-text copy of the First Amended Disclosure Statement is
available for free at http://ResearchArchives.com/t/s?75f0
Evidentiary Hearings
Evidentiary hearings are set for July 31, 2011, and September 1,
2011, in the Arizona Bankruptcy Court to consider confirmation of
the Plan.
About Taylor & Bishop
Phoenix, Arizona-based Taylor & Bishop, LLC, was formed in 2007
solely for the purpose of owning and maintaining the real property
located at 1431 West Taylor Street, Chicago, Illinois, in order to
house the National Italian American Sports Hall of Fame. From its
inception, Taylor & Bishop has operated much like a non-profit
company, its fundamental purpose being to pay tribute to Italian-
American athletes and raise money for scholarships and other
charitable causes.
Taylor & Bishop filed for Chapter 11 bankruptcy protection on
October 8, 2010 (Bankr. D. Ariz. Case No. 10-32563). John R.
Clemency, Esq., at Gallagher & Kennedy PA, assists Taylor & Bishop
in its restructuring effort. According to its schedules, Taylor &
Bishop disclosed $16,040,393 in total assets and $9,934,149 in
total liabilities at the Petition Date.
TERRESTAR NETWORKS: Challenges Sprint's $104 Million Claim
----------------------------------------------------------
Joseph Checkler, writing for Dow Jones' Daily Bankruptcy Review,
reports that TerreStar Networks Inc. is disputing a $104 million
claim by Sprint Nextel Corp. for band-clearing fees Sprint says it
is owed. TerreStar Networks said in papers filed in Court on
Friday that the claim is a "misplaced attempt to disregard
corporate structure and recover its claim" that "is based on its
incorrect and unfounded interpretation" of a Federal
Communications Commission ruling. TerreStar said that, because it
isn't a licensee of the bandwidth in question, it doesn't owe
Sprint any money.
According to DBR, TerreStar said licensees are four Canadian
TerreStar entities that didn't file for Chapter 11 protection. It
isn't clear whether the FCC would consider TerreStar Networks
liable for those entities.
DBR notes a Sprint spokesman didn't immediately respond to a
request for comment. TerreStar had said previously it would make
the filing, which asks a judge for summary judgment in the
dispute.
About TerreStar Corp. and TerreStar Networks
TerreStar Corporation and TerreStar Holdings, Inc., filed
voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for
the Southern District of New York on Feb. 16, 2011.
TSC's Chapter 11 filing joins the bankruptcy proceedings of
TerreStar Networks Inc. and 12 other affiliates, which filed on
Oct. 19, 2010. The October Chapter 11 cases are procedurally
consolidated under TSN's Case No. 10-15446 under Judge Sean H.
Lane.
TSC is the parent company of each of the October Debtors. TSC has
four wholly owned direct subsidiaries: TerreStar Holdings, Inc.,
TerreStar New York Inc., Motient Holdings Inc., and MVH Holdings
Inc.
TSC's case is jointly administered with the cases of seven of the
October Debtors under the caption In re TerreStar Corporation, et
al., Case No. 11-10612 (SHL). The seven Debtor entities who
sought joint administration with TSC are TerreStar New York Inc.,
Motient Communications Inc., Motient Holdings Inc., Motient
License Inc., Motient Services Inc., Motient Ventures Holdings
Inc., and MVH Holdings Inc.
TSC is a Delaware corporation whose main asset is the equity in
non-Debtor TerreStar 1.4 Holdings LLC, which has the right to use
a "1.4 GHz terrestrial spectrum" pursuant to 64 licenses issued by
the Federal Communication Commission. TSC also has an indirect
89.3% ownership interest in TerreStar Network, Inc., which
operates a separate and distinct mobile communications business.
TerreStar Holdings is a Delaware corporation that directly holds
100% of the interests in 1.4 Holdings LLC.
TerreStar Networks -- TSN -- the principal operating entity of
TSC, developed an innovative wireless communications system to
provide mobile coverage throughout the United States and Canada
using satellite-terrestrial smartphones. The system, however,
required an enormous amount of capital expenditures and initially
produced very little in the way of revenue. TSN's available cash
and borrowing capacity were insufficient to cover its funding;
thus, forcing TSN to seek bankruptcy protection in October 2010.
TSC estimated assets and debts of $100 million to $500million in
its Chapter 11 petition.
Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP,
in New York, serves as counsel for the TSC and TSN Debtors.
Garden City Group is the claims and notice agent. Blackstone
Advisory Partners LP is the financial advisor.
The Garden City Group, Inc., is the claims and noticing agent in
the Chapter 11 cases. Otterbourg Steindler Houston & Rosen P.C.
is the counsel to the Official Committee of Unsecured Creditors
formed in TSN's Chapter 11 cases. FTI Consulting, Inc., is the
Committee's financial advisor.
TITTLE CHOICE: Files for Chapter 7 Bankruptcy Protection
--------------------------------------------------------
The Washington Post reports that Title Choice Corp., 7535 Little
River Tpk., S.208-A, Annandale, Virginia, filed for Chapter 7
protection (Bankr. E.D. Va. Case No. 11-14368-SSM). Richard G.
Hall represents the Company as its attorney. The Company
estimated assets between $100,000 and $500,000, and liabilities of
between $50,000 and $100,000. The Company owes $18,892 to
unsecured creditor Bank of America.
TORTILLA INC: Synergy Bids for Two Garduno Restaurants
------------------------------------------------------
Rivkela Brodsky at the Albuquerque Journal reports that a
$1.75 million bid for the Mexican restaurant's two locations, two
liquor licenses, recipes, logos and more by Synergy Ventures Inc.,
who are also partners in Keva Juice Southwest, is up for approval.
Chief Bankruptcy Judge James Starzynski will make a decision on a
motion to approve the sale Wednesday.
According to the report, there have been two other offers, but
Synergy Ventures Inc.'s is the only one poised to move forward.
That's because Syngery has negotiated agreements for the
Cottonwood and Winrock Garduno's locations -- property that is not
owned by the bankruptcy estate.
A preliminary hearing in the case was held in early June to
address several objections to the motion to approve the Synergy
bid. Those objections included offers by two other parties,
concerns over payment of the debt attached to the five liquor
licenses for sale and other issues, notes the Albuquerque Journal.
The Albuquerque Journal adds that two other offers were made on
the sale of the Garduno's estate. One was a $2.75 million cash
offer for two locations and all five liquor licenses by Fuego
Enterprises LLC, a company owned by Laguna Development Corp.,
which owns and operates Route 66 Casino. The other was a
$1.3 million offer by Ricardo Chavez for two restaurants and five
liquor licenses. The latter was called "a bogus offer" by Michael
Caplan, the trustee overseeing the case, during the hearing.
At the time of the hearing, a purchase agreement and escrow
agreement with Synergy was in process. Synergy also had signed a
letter of intent and was working on a lease agreement with Winrock
Partners for the Winrock Gardu¤o's location and had signed a
purchase agreement with the owners of the Cottonwood site, relates
the report.
About Tortilla, Inc.
Tortilla, Inc., doing business as Garduno's of Mexico, and parent
of Garduno's Restaurant, filed a Chapter 11 petition (Bankr. D.
New Mexico Case No. 10-10966) on March 1, 2010. Daniel J. Behles,
Esq., at Cuddy & McCarthy, LLP, in Albuquerque, New Mexico, serves
as counsel to the Debtor. The Debtor estimated assets and debts
of $1,000,001 to $10,000,000 as of the Chapter 11 filing.
Garduno's Restaurant -- http://www.gardunosrestaurants.com/--
operates a chain of restaurants. Garduno's Restaurant closed
three of five restaurant locations in Albuquerque, New Mexico,
when Tortilla filed for bankruptcy.
TOTAL CATERERS: Files for Chapter 11 Bankruptcy Protection
----------------------------------------------------------
The Washington Post reports that Total Caterers Enterprises
Inc., 1409 14th St., NW, Washington, D.C., filed for Chapter 11
protection (Bankr. D.C. Case No. 11-00442). Michael R. Murphey
represents the Company as its attorney. The Company estimated
assets of less than $50,000, and liabilities of between $100,000
and $500,000.
TOWNSENDS INC: Wants Plan Exclusivity Extended to Aug. 16
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Townsends Inc. for a second time is requesting an
extension of the exclusive right to propose a liquidating Chapter
11 plan. Townsends, which filed under Chapter 11 in December,
scheduled a hearing for July 15 where it will ask the bankruptcy
judge in Delaware to preclude others from filing a plan at least
until Aug. 16. The motion for more exclusivity says the company
is "developing a strategy for the future." Otherwise, there is no
hint about how the case will turn out for creditors.
About Townsends Inc.
Founded in 1891, Townsends Inc. is a third-generation, family-
owned poultry company. Headquartered in Georgetown, Delaware,
Townsends operates production and processing facilities in
Arkansas and North Carolina. Townsends Inc. -- fka Townsend
Speciality Foods -- and several affiliates filed for Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 10-14092) on
Dec. 19, 2010. As of Dec. 5, 2010, the Debtors disclosed
$131 million in total assets and $127 million in total debts.
Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell, serves
as the Debtors' bankruptcy counsel. McKenna Long & Aldridge LLP
serves as special counsel. Huron Consulting Group's Dalton T.
Edgecomb serves as the Debtors' chief restructuring officer. SSG
Capital Advisors, LLC, serves as investment banker. Donlin,
Recano & Company, Inc., is the Debtors' claims, noticing and
balloting agent.
An Official Committee of Unsecured Creditors has been appointed in
the case. The Committee has tapped Lowenstein Sandler PC as its
counsel and J.H. Cohn LLP as its financial advisor. No trustee or
examiner has been appointed in the Debtors' bankruptcy cases.
In February 2011, Townsends obtained approval from the bankruptcy
judge to sell to Omtron USA LLC two chicken processing plants in
Chatham County, North Carolina, and other assets for $24,936,950.
Omtron is an affiliate of Agroholding Avangard, Ukraine's largest
egg producer. The Debtor changed its name to TW Liquidation Corp.
following the sale.
TRANS ENERGY: Reports $11.8-Mil. First Quarter Net Profit
---------------------------------------------------------
Trans Energy, Inc., filed its quarterly report on Form 10-Q,
reporting net income of $11.8 million on $1.6 million of revenues
for the three months ended March 31, 2011, compared with a net
loss of $1.2 million on $1.1 million of revenues for the same
period of 2010. The Company recognized a gain of $12.9 million on
the sale of certain oil and gas assets during the first three
months of 2011.
The Company's balance sheet at March 31, 2011, showed
$60.6 million in total assets, $31.2 million in total liabilities,
and stockholders' equity of $29.3 million.
As reported by the TCR on April 18, 2011, Maloney + Novotny, LLC,
in Cleveland, Ohio, expressed substantial doubt about the
Company's ability to continue as a going concern, following the
Company's 2010 results. The independent auditors noted that the
Company has generated significant losses from operations and has a
working capital deficit of $19,699,824 at Dec. 31, 2010.
A copy of the Form 10-Q is available at http://is.gd/wbwUQK
About Trans Energy
St. Marys, West Virginia-based Trans Energy, Inc. (OTC BB: TENG)
-- http://www.transenergyinc.com/-- is an oil and gas exploration
and development company in the Appalachian Basin.
TRANS-GULF: Tex. App. Ct. Rules on Bank Dispute With Guarantor
--------------------------------------------------------------
The Court of Appeals of Texas, Eleventh District, affirmed in part
and reversed in part the trial court's judgment in the case, C.
Kyle Smith, Appellant, v. Community National Bank, Appellee, No.
11-09-00196-CV (Tex. App. Ct.). That portion of the judgment
awarding damages to Community National Bank is reversed, and the
cause is remanded to the trial court for a recalculation of
damages, giving C. Kyle Smith credit due to him. In all other
respects, the trial court judgment is affirmed.
The case stemmed from a note and security agreement dated Oct. 29,
2007, that Trans-Gulf Drilling Services, Inc. and Trans-Gulf Rig
#1 LP executed in favor of Community National Bank. The
promissory note was in the original principal amount of $2,336,182
and was secured by a drilling rig, related equipment, and an
insurance policy on the rig. C. Kyle Smith, the director of
Trans-Gulf, issued a personal guaranty to CNB in which he
guaranteed the amount due to CNB under the note.
Trans-Gulf filed for Chapter 11 bankruptcy in January 2008. On
Feb. 28, 2008, CNB sought relief from the bankruptcy court to
foreclose its security interest in the rig and equipment. In
March, CNB also brought the action against Mr. Smith as guarantor
of the note. On Oct. 28, 2008, the rig collapsed and became
incapable of operating. Trans-Gulf's insurance company was
notified of the collapse, and a claim was submitted for the value
of the rig.
The bankruptcy trustee entered into a stipulation with CNB to
assign to CNB all of the rights of the trustee, Trans-Gulf, and
the bankruptcy estate in the rig, the equipment, and the related
insurance claim. On March 1, 2009, the bankruptcy court entered
an agreed order approving the stipulation and assigning and
transferring the rig, equipment, and insurance claim from Trans-
Gulf's estate to CNB.
CNB sought summary judgment against Mr. Smith. On June 5, 2009,
the trial court granted summary judgment to CNB and rendered a
$2,828,612 judgment against Mr. Smith. Mr. Smith appealed on
these issues:
(1) Whether the assignment of the rig, equipment, and
insurance claim to CNB was an acceptance by CNB of the collateral
in full or partial satisfaction of Trans-Gulf's indebtedness;
(2) Whether the assignment of the rig, equipment, and
insurance claim to CNB constituted value which should be credited
against the amount guaranteed by Mr. Smith; and
(3) Whether CNB's entry into the stipulation constituted an
accord and satisfaction of Trans-Gulf's and Mr. Smith's
indebtedness.
CNB agrees that it should provide Mr. Smith a credit for the
insurance proceeds it received and the amount it received from the
sale of the equipment, less its expenses. In its brief, CNB
states that it received $1.9 million in insurance proceeds on
Aug. 5, 2009, and $102,400 from the sale of the equipment. CNB
claims that, after deducting expenses incurred in connection with
the insurance settlement and sale of the equipment, it offered Mr.
Smith a credit against the judgment of $1,810,872. These amounts
are not part of the record for the summary judgment and cannot be
considered as part of the appeal. However, Mr. Smith is due a
credit if CNB sold the rig and equipment and received insurance
proceeds.
In its ruling on the appeal, the Court of Appeals disagreed with
Mr. Smith's contention that the value of the credit should be
determined at the time of the agreed order. The Court of Appeals
remanded to the trial court for a determination of the amount of
the credit that Mr. Smith is due for the insurance proceeds and
sale proceeds received by CNB after deducting its expenses
incurred in connection with the insurance settlement and the sale
of the equipment.
A copy of the Court of Appeal's Opinion dated June 16, 2011, is
available at http://is.gd/gXWlx1from Leagle.com. The appellate
court's panel consists of Chief Justice Jim R. Wright, Justice
Terry McCall and John G. Hill, Former Justice, Court of Appeals,
2nd District of Texas at Fort Worth, sitting by assignment.
Justice McCall wrote the opinion.
About Trans-Gulf Drilling Services
Based in Longview, Texas, Trans-Gulf Drilling Services, Inc. --
http://www.trans-gulf.com/-- engages in gas and oil exploration.
It filed for Chapter 11 bankruptcy (Bankr. E.D. Tex. Case No.
08-60050) on Jan. 18, 2008. Trans-Gulf Rig No. 1, LP, filed a
separate Chapter 11 petition (Case No. 08-60051). Judge Bill
Parker presides over the case. Jason T. Rodriguez, Esq., and Mark
A. Castillo, Esq., at The Curtis Law Firm, PC, serve as bankruptcy
counsel. Trans-Gulf Drilling Services listed $1 million to
$10 million in both assets and debts.
TRICO MARINE: Says Tennenbaum Can't Collect Payment Under Plan
--------------------------------------------------------------
Peg Brickley, writing for Dow Jones' Daily Bankruptcy Review,
reports that Trico Marine Services Inc. said secured lender
Tennenbaum Capital Partners is attempting to muscle in on the slim
recovery creditors are getting under its Chapter 11 plan.
According to DBR, Trico said Tennenbaum was completely repaid, at
a "significant profit," after conducting a "scorched-earth"
campaign during the Chapter 11 case. Trico contends Tennenbaum
pressured to "force a fire sale" of the company's fleet of supply
vessels. Now it's making a last-minute grab for more cash.
According to DBR, court papers indicate Tennenbaum collected as
much as 20% interest on portions of its loan to Trico, receiving a
total of more than $3 million interest, as well as loan fees and
professional fees of $3.7 million. Tennenbaum also collected
against Trico's former operating companies, which never filed for
bankruptcy but worked out their debts out of court.
DBR notes Trico said Tennenbaum is pressing claims against Trico
based on guarantees involving those operating companies that dealt
with their debts outside Chapter 11 and that also paid Tennenbaum.
Trico's Chapter 11 plan of liquidation is circulating among voting
creditors now in advance of a July 18 confirmation hearing.
Creditors are getting just pennies on the dollar under Trico's
Chapter 11 plan. According to DBR, Trico warned that if
Tennenbaum succeeds in its claims, those pennies will have to
stretch over more debt.
DBR relates Tennenbaum on Monday declined to comment on Trico's
request.
About Trico Marine
Headquartered in Texas, Trico Marine Services, Inc. --
http://www.tricomarine.com/-- provides subsea services, subsea
trenching and protection services, and towing and supply vessels.
Trico filed for Chapter 11 protection (Bankr. D. Del. Case No.
10-12653) on Aug. 25, 2010. John E. Mitchell, Esq., Angela B.
Degeyter, Esq., and Harry A. Perrin, Esq., at Vinson & Elkins LLP,
serve as the Debtor's bankruptcy counsel. The Debtor disclosed
US$30,562,681 in assets and US$353,606,467 in liabilities as of
the Petition Date.
Affiliates Trico Marine Assets, Inc. (Bankr. D. Del. Case No.
10-12648), Trico Marine Operators, Inc. (Case No. 10-12649), Trico
Marine International, Inc. (Case No. 10-12650), Trico Marine
Cayman, L.P. (Case No. 10-12651), and Trico Holdco, LLC (Case No.
10-12652) filed separate Chapter 11 petitions.
Cahill Gordon & Reindell LLP is the Debtors' special counsel.
Alix Partners Services, LLC, is the Debtors' chief restructuring
officer. The financial advisors are Evercore Partners and AP
Services LLC. Epiq Bankruptcy Solutions is the Debtors' claims
and notice agent. Postlethwaite & Netterville serves as the
Debtors' accountant and Ernst & Young LLP serves as tax advisors.
PricewaterhouseCoopers LLC provides the independent accountants
and tax advisors for the Debtors.
Aside from the Cayman Islands holding company, Trico's foreign
subsidiaries were not included in the filing and were not subject
to the requirements of the U.S. Bankruptcy Code.
The Official Committee of Unsecured Creditors tapped Laura Davis
Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang,
Ziehl & Jones LLP, in Wilmington, Delaware, and Andrew K. Glenn,
Esq., David J. Mark, Esq., and Daniel A. Fliman, Esq., at
Kasowitz, Benson, Torres & Friedman LLP, in New York, as counsel.
The Trico Supply Group -- which includes Trico Supply AS, Trico
Shipping AS, DeepOcean AS, CTC Marine Projects Ltd. and other
subsidiaries -- completed an out-of-court restructuring in May
2011. Pursuant to the out-of-court restructuring, $399,500,000 or
99.88%, of Trico Shipping's 11-7/8% Senior Secured Notes due 2014,
the Trico Supply Group's working capital facility debt and
intercompany claims and interests held by Trico Marine entities,
were equitized and the holders received common stock of DeepOcean
Group Holding AS, a new Norwegian private limited company.
DeepOcean Holding and its subsidiaries, including Trico Supply,
Trico Shipping, DeepOcean, CTC and other subsidiaries, were spun
off Trico Marine.
TUBO DE PASTEJE: To Replace 2016 Notes With New Notes Under Plan
----------------------------------------------------------------
Tubo De Pasteje, S.A. de C.V., and Cambridge-Lee Holdings, Inc.,
together with their indirect parent, Industrias Unidas, S.A. de
C.V., delivered to the U.S. Bankruptcy Court for the District of
Delaware a Plan of Reorganization and Disclosure Statement dated
June 7, 2011.
The Plan is premised upon implementing the terms proposed in a
restructuring agreement through a series of transactions designed
to maximize recoveries to all creditors and enhance the financial
stability of the Reorganized Debtors and the IUSA Group, as a
whole.
Among other things, the Restructuring Transactions include (a) the
cancellation of the IUSA-issued 11.50% senior notes due 2016 Notes
and the Espirito Santo or ESBDS Loan; and (b) the issuance of (i)
New Series A Notes, which will be guaranteed by Tubo and secured
by the capital stock of CLH to the holders of the Old 2016 Notes
and the ESBDS Loan, and (ii) New Series B Notes, which will be
substantially the same terms as the New Series A Notes, but will
not be secured by any assets of the Reorganized Debtors, to
holders of the Copper Debt and holders of the Commercial Paper who
elect to accept the New Series B Notes in exchange for their
current claims against the IUSA Group.
The Plan leaves unimpaired the rights of all holders of claims
against and equity interests in the Debtors, with the exception of
the rights of the Holders of Old 2016 Notes and ESBDS Loan.
A full-text copy of the Disclosure Statement is available for free
at:
http://bankrupt.com/misc/TUBODEPASTEJE_Jun7DS_1.pdf
http://bankrupt.com/misc/TUBODEPASTEJE_Jun7DS_2.pdf
About Tubo de Pasteje
Tubo de Pasteje SA and subsidiary Cambridge-Lee Holdings Inc.
filed Chapter 11 petitions (Bankr. D. Del. Case No. 09-14353) on
Dec. 7, 2009, following a Nov. 15 payment default on US$200
million in 11.5% senior notes due 2016. Tubo and its subsidiary
sought bankruptcy protection when the 30-day grace period was
nearing its end.
Tubo is a subsidiary of Mexico City-based Industrias Unidas SA de
CV, a manufacturer of copper and electrical products. The
U.S. subsidiary Cambridge-Lee is based in Reading, Pennsylvania.
IUSA is the issuer of the notes which were secured by a pledge of
Cambridge-Lee stock.
UNITED AUTO: A.M. Best Places 'C' FSR Under Review
--------------------------------------------------
A.M. Best Co. has placed under review with developing implications
the financial strength rating of C (Weak) and issuer credit
ratings of "ccc" of United Automobile Insurance Group and its
member, United Automobile Insurance Company (United Auto) (Miami
Gardens, FL).
These rating actions follow the Consent Order by the Florida
Office of Insurance Regulation on May 31, 2011, which put under
Regulatory Supervision and ordered the cancellation of all in
force policies by Argus Fire & Casualty Insurance Company (North
Miami Beach, FL), a wholly owned subsidiary of United Auto.
The under review status with developing implications for the group
is the result of uncertainty, with respect to the potential impact
on United Auto's financial position, in the event of catastrophic
weather events in Florida prior to the cancellation date of the
Argus policies. The Consent Order stipulates that United Auto
provide excess of loss per risk coverage to Argus in the aggregate
amount of $5 million in excess of $100 thousand until such time
that all policies have been cancelled, which is expected to occur
in late July 2011. Going forward, the risk-adjusted
capitalization of United Auto is anticipated to improve, without
the impact of Argus' prior property book of business.
The ratings will remain under review until the cancellation of all
policies and the surrender of Argus' Certificate of Authority to
the OIR, which is expected in late July 2011, and until A.M. Best
conducts further analyses and discussions with United Auto's
management.
UNITED SECURITY: A.M. Best Downgrades FSR to 'B'
------------------------------------------------
A.M. Best Co. has downgraded the financial strength rating to B
(Fair) from B+ (Good) and issuer credit rating to "bb" from "bbb-"
of United Security Assurance Company of Pennsylvania (Souderton,
PA). Additionally, these ratings have been placed under review
with negative implications.
The ratings downgrade of United Security reflects A.M. Best's
concerns regarding the company's ultimate parent company, CMS
Financial Services Corp., and other non-insurance entities within
the organization. CMS has been reliant on United Security to
service the debt, which was a result of the financing of its
acquisition of the company in late 2007. While CMS and its non-
insurance entities have made progress in the generation of revenue
since the formation of CMS in 2007, CMS has considerable leverage
and currently has limited access to capital to support its
business needs. Additionally, A.M. Best is concerned with CMS's
delay in completing its audited financials over the last few years
and believes there will likely be a material decline in the GAAP
equity when its audits are finalized.
United Security's ratings will remain under review with negative
implications pending the completion of CMS's 2009 and 2010 audited
financials. This must be completed before CMS can proceed with
its planned purchase of a minority interest in the company and
execute its capital development strategy. CMS's management can
then move forward with its business plan without the audit
distraction.
United Security continues to report a relatively consistent level
of profitability, and capital remains adequate to support its
current liabilities. Most recently, the company experienced higher
than anticipated claims in some of its recently acquired blocks of
long-term care business. While United Security has not increased
rates in recent years, it continues to monitor all of its business
to determine whether rate increases are necessary to offset any
unfavorable claims experience. A.M Best notes that the company
continues to maintain a sound, conservative investment philosophy
generating a steady stream of net investment income.
UNIVERSAL AMERICAN: A.M. Best Affirms 'bb' Issuer Credit Rating
---------------------------------------------------------------
A.M. Best Co. has removed from under review with developing
implications and affirmed the issuer credit rating of "bb" of
Universal American Corp. (Rye Brook, NY).
A.M. Best also has removed from under review with developing
implications and affirmed the financial strength rating of B++
(Good) and ICR of "bbb" of American Progressive Life & Health
Insurance Company of New York (American Progressive) (Rye Brook,
NY) and The Pyramid Life Insurance Company (Overland Park, KS).
The outlook for these ratings is negative.
Additionally, A.M. Best has removed from under review with
developing implications and affirmed the FSR of B+ (Good) and ICR
of "bbb-" of American Pioneer Life Insurance Company (Lake Mary,
FL), Constitution Life Insurance Company (Constitution Life),
Marquette National Life Insurance Company, SelectCare of Texas,
LLC and Union Bankers Insurance Company (Union Bankers).
Concurrently, A.M. Best has removed from under review with
developing implications and affirmed the FSR of B (Fair) and ICR
of "bb+" of Today's Options of Oklahoma, Inc. (Oklahoma City, OK).
The outlook for these ratings is stable.
At the same time, A.M. Best has removed from under review with
developing implications and withdrawn the indicative debt ratings
for the $140 million shelf registration of Universal American.
All companies are subsidiaries of Universal American and domiciled
in Houston, TX, unless otherwise specified.
The rating actions follow the close of the transaction between
Universal American and CVS Caremark Corporation on April 29, 2011,
under which CVS Caremark acquired the Medicare Part D business of
Universal American.
The affirmation of the ICR for Universal American reflects its
continued profitability, improved financial leverage and increased
liquidity. The negative outlook is due to the company's decreased
premium revenue based on the sale of its Medicare Part D business,
as well as the lack of new sales in its Medicare Advantage
business due to Centers for Medicare and Medicaid Services'
sanctions on Universal American. Additionally, the company may be
challenged to adjust its fixed administrative expenses based on a
lower volume of business.
The rating affirmations for American Progressive and Pyramid life
recognize their roles as core subsidiaries of Universal American,
which are projected to generate over half of the organization's
revenue and pre-tax income for 2011. The negative outlook is due
to premium revenue decline and a decline in overall earnings
related to the decreased volume of Medicare Advantage business.
The rating affirmations for American Pioneer, Constitution Life,
Marquette National, SelectCare and Union Bankers acknowledge their
contribution to the overall business profile and product offerings
of the organization.
The rating affirmations for Today's Options reflect its continued
enrollment and premium growth.
The withdrawal of the indicative debt ratings for the $140 million
shelf registration of Universal American is due to the holding
company change, which occurred as a result of the transaction with
CVS Caremark.
The following debt ratings have been withdrawn:
Universal American Corp.-
-- "bb" on senior unsecured debt
-- "bb-" on subordinated unsecured debt
-- "b+" on preferred stock
UPSTREAM WORLDWIDE: Amends 2008 Equity Incentive Plan
-----------------------------------------------------
The Board of Directors of Upstream Worldwide, Inc., amended the
2008 Equity Incentive Plan to eliminate the automatic stock option
grants to non-employee directors. Consequently, the automatic
stock option grants which were due to the non-employee directors
serving on July 1, 2011, will not occur.
About Upstream Worldwide
Ft. Lauderdale, Fla.-based Upstream Worldwide, Inc., formerly,
Money4Gold Holdings, Inc. -- http://www.money4gold.com/-- is an
emerging leader in direct-from-consumer, reverse logistics,
currently specializing in the procurement and aggregation of
cellular phones and precious metals to be recycled. From the
inception of the Company's current business in 2008 through 2010,
substantially all of the Company's revenue came from the precious
metals business. In mid-2010, the Company began to diversify its
business by introducing a service, similar to its precious metals
business, for cellular phones as it saw the gold and silver
business begin to sharply retract.
Berman & Company, P.A., in Boca Raton, Florida, expressed
substantial doubt about Upstream Worldwide's ability to continue
as a going concern. The independent auditors noted that the
Company has a net loss of $16,791,253 and net cash used in
operations of $3,161,683 for the year ended Dec. 31, 2010; and has
a working capital deficit of $2,070,274, and a stockholders'
deficit of $1,396,109 at Dec. 31, 2010.
The Company reported a net loss of $16.8 million on $32.5 million
of revenue for 2010, compared with a net loss of $4.1 million on
$29.0 million for 2009.
The Company's balance sheet at March 31, 2011, showed $2.19
million in total assets, $3.61 million in total liabilities, all
current, and a $1.42 million total stockholders' deficit.
US AIRWAYS: Bankr. Court Disallows $60.5-Mil. Claim of Ex-Worker
----------------------------------------------------------------
US Airways Inc. and its affiliated debtors sought and obtained a
bankruptcy court order disallowing a $60.475 million claim by a
former employee.
The order dated June 8, 2011, disallowed Claim No. 3018 filed by
Fougere Holcombe, a former US Airways fleet service agent, who
sued the company for alleged employment discrimination under the
Americans with Disabilities Act.
The ruling came three weeks after US Airways sought to disallow
Ms. Holcombe's claim as a sanction for not complying with Judge
Stephen Mitchell's May 5, 2011 order. The order required Ms.
Holcombe to provide written responses to the company's discovery
requests and to attend the deposition last month.
Judge Mitchell of the U.S. Bankruptcy Court for the Eastern
District of Virginia said he has "little difficulty in concluding
that default judgment disallowing any remaining claim is fully
justified."
"This is not a case in which a party has made at least some
attempt to comply with discovery obligations or was merely
negligent in not complying," Judge Mitchell said in an opinion
dated June 8, 2011.
Judge Mitchell pointed out that Ms. Holcombe made a "deliberate
decision" not to comply with the Bankruptcy Court's discovery
order based on her assertion that the Bankruptcy Court lacks
jurisdiction over her claim. He further said that US Airways
cannot defend itself without the information being sought from
its former employee.
In the same order, the bankruptcy judge also denied
Ms. Holcombe's request to delay the hearing on the disallowance
of her claim.
Ms. Holcombe made the request a week after US Airways proposed to
disallow her claim, saying she could not participate in any
discovery proceedings for health reasons.
Judge Mitchell said that he was not convinced by Ms. Holcombe's
reason for her inability to attend the hearing held on June 1,
2011.
"The court has previously allowed her to appear by telephone,
and, in any event, her legal position is amply set forth in the
multitude of pleadings she has filed in her effort to avoid an
adjudication by this court of the merits of her claim," the
bankruptcy judge said.
Earlier, US Airways also questioned Ms. Holcombe's contention,
saying it was "not credible" in light of the fact that she has
managed to draft and file court papers since last month to press
her claim and that the Bankruptcy Court has routinely
accommodated her by allowing her to participate in hearings
telephonically.
Judge Mitchell noted that since the resolution of Ms. Holcombe's
claim is the last remaining matter in US Airways' second Chapter
11 case, he will also grant the company's long-pending motion to
close its bankruptcy case.
Ms. Holcombe's lawsuit for employment discrimination against US
Airways has dragged on for almost eight years. The lawsuit was
filed in the U.S. District Court for the Eastern District of New
York prior to the company's second bankruptcy filing in 2004.
Ms. Holcombe, who worked for US Airways from 1992 to 2003, when
she was placed on medical leave until her employment was
terminated in 2006, did not file any proof of claim in the
company's first bankruptcy case that culminated in confirmation
of its restructuring plan in March 2003. However, she filed a
timely proof of claim for $60.475 million under the ADA.
US Airways opposed the filing of the claim, and on motion for
summary judgment, the Bankruptcy Court ruled that the claim had
been discharged and was not allowable in the second bankruptcy
case because it arose prior to confirmation of the plan in the
first bankruptcy case. That ruling was affirmed by the U.S.
District Court for the Eastern District of Virginia and by the
U.S. Court of Appeals for the Fourth Circuit but it was reversed
and remanded for consideration of any claim for discrimination.
After the matter was remanded to the Bankruptcy Court, US Airways
proposed to dismiss the remaining claim as moot while Ms.
Holcombe moved to revisit the original denial of her claim. The
Bankruptcy Court denied both motions, scheduled an evidentiary
hearing to resolve the issue specified by the Fourth Circuit and
allowed additional discovery limited to that issue.
US Airways served discovery requests and notice of deposition on
Ms. Holcombe but her lawyer advised the company that the
discovery would not be provided, prompting US Airways to file a
motion to compel discovery, which was heard on May 3, 2011.
In response, Ms. Holcombe filed a cross-motion to dismiss for
lack of jurisdiction as well as a motion to disqualify US
Airways' legal counsel, McGuireWoods LLP. In asking for
McGuireWoods' disqualification, Ms. Holcombe alleged that the law
firm improperly distributed $2.3 million created specifically in
connection with her claim.
The Bankruptcy Court denied both motions. Meanwhile, it granted
US Airways' motion to compel discovery on May 5, 2011, and
ordered Ms. Holcombe to respond to the discovery requests by the
company and to appear for her deposition.
Ms. Holcombe filed a motion for leave to appeal all three orders
and unsuccessfully sought a stay pending appeal from the Virginia
District Court. The motion was opposed by US Airways, describing
it as "frivolous and dilatory" and an attempt to delay litigation
of her claim.
Ms. Holcombe's failure to comply with the May 5 order prompted US
Airways to move for the disallowance of her $60.475 million
claim. The former employee responded by requesting to delay the
hearing on the disallowance of her claim and to stay all
proceedings until her prior motion to withdraw her claim could be
heard ?- all of which had been denied by the Bankruptcy Court.
She also filed a motion to withdraw the reference of her claim
and transfer the proceedings to the New York District Court
which, US Airways argued, is already moot in light of the June 8
order.
About US Airways
US Airways --http://www.usairways.com/-- along with US Airways
Shuttle and US Airways Express, operates more than 3,000 flights
per day and serves more than 190 communities in the U.S., Canada,
Mexico, Europe, the Middle East, the Caribbean, Central and South
America.
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another Chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represented the
Debtors in their restructuring efforts. The USAir II bankruptcy
plan became effective on September 27, 2005. The Debtors
completed their merger with America West on the same date. (US
Airways Bankruptcy News; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
As of Sept. 30, 2010, US Airways had $8.006 billion in total
assets, $3.049 billion in current liabilities, $4.883 billion in
non-current liabilities, and $74 million in stockholders' equity.
* * *
US Airways Group carries Moody's "Caa1" Long-Term rating, LT Corp.
family rating and probability of default rating. Outlook is
negative.
US Airways Group carries Standard & Poor's "B-" LT Foreign Issuer
Credit rating and LT Local Issuer credit rating. Outlook is also
negative.
US Airways Group carries Fitch's "CCC" LT Issuer default rating
and "C" Senior unsecured debt rating. Outlook is also negative
US AIRWAYS: Court Grants Hyland Relief From Discharge Injunction
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Virginia
issued an order on June 15, 2011, modifying the discharge
injunction to allow Matthew Hyland to prosecute a personal injury
lawsuit against US Airways Inc.
Mr. Hyland filed the lawsuit in 2005 in Richmond County after he
figured in an accident involving US Airways. The lawsuit seeks
to recover insurance claim against the company's insurance
carrier.
The Court held that in case Mr. Hyland wins the lawsuit, any
collection will be limited to any liability insurance carried by
US Airways.
Mr. Hyland originally filed a motion to lift the automatic stay
but the Court held that it would be treated as a motion for
relief from discharge injunction.
About US Airways
US Airways --http://www.usairways.com/-- along with US Airways
Shuttle and US Airways Express, operates more than 3,000 flights
per day and serves more than 190 communities in the U.S., Canada,
Mexico, Europe, the Middle East, the Caribbean, Central and South
America.
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another Chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represented the
Debtors in their restructuring efforts. The USAir II bankruptcy
plan became effective on September 27, 2005. The Debtors
completed their merger with America West on the same date. (US
Airways Bankruptcy News; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
As of Sept. 30, 2010, US Airways had $8.006 billion in total
assets, $3.049 billion in current liabilities, $4.883 billion in
non-current liabilities, and $74 million in stockholders' equity.
* * *
US Airways Group carries Moody's "Caa1" Long-Term rating, LT Corp.
family rating and probability of default rating. Outlook is
negative.
US Airways Group carries Standard & Poor's "B-" LT Foreign Issuer
Credit rating and LT Local Issuer credit rating. Outlook is also
negative.
US Airways Group carries Fitch's "CCC" LT Issuer default rating
and "C" Senior unsecured debt rating. Outlook is also negative
US AIRWAYS: Reports May 2011 Traffic Results
--------------------------------------------
US Airways Group, Inc. announced May and year-to-date 2011 traffic
results. Mainline revenue passenger miles (RPMs) for the month
were 5.6 billion, up 7.4 percent versus May 2010. Mainline
capacity was 6.5 billion available seat miles (ASMs), up 4.4
percent versus May 2010.
Mainline passenger load factor was a record 85.2 percent, up 2.3
points versus May 2010.
US Airways' President Scott Kirby said, "Our May consolidated
(mainline and Express) passenger revenue per available seat mile
(PRASM) increased approximately 11 percent versus the same period
last year."
For the month of May, US Airways' preliminary on-time performance
as reported to the U.S. Department of Transportation was 74.9
percent with a completion factor of 98.9 percent.
The following summarizes US Airways Group's traffic results for
the month and year-to-date ended May 31, 2011 and 2010, consisting
of mainline operated flights as well as US Airways Express flights
operated by wholly owned subsidiaries PSA Airlines and Piedmont
Airlines.
US Airways Mainline
May
2011 2010 % Change
Mainline Revenue Passenger Miles (000)
Domestic 4,046,550 3,754,286 7.8
Atlantic 1,123,774 1,028,195 9.3
Latin 410,597 415,365 (1.1)
--------- ---------
Total 5,580,921 5,197,846 7.4
Mainline Available Seat Miles (000)
Domestic 4,697,032 4,487,370 4.7
Atlantic 1,353,600 1,231,782 9.9
Latin 496,712 553,866 (10.3)
--------- ---------
Total 6,547,344 6,273,018 4.4
Mainline Load Factor (%)
Domestic 86.2 83.7 2.5 pts
Atlantic 83.0 83.5 (0.5) pts
Latin 82.7 75.0 7.7 pts
--------- ---------
Total 85.2 82.9 2.3 pts
Mainline Enplanements
Domestic 4,134,068 3,880,675 6.5
Atlantic 271,785 254,072 7.0
Latin 305,530 321,212 (4.9)
--------- ---------
Total 4,711,383 4,455,959 5.7
Year to Date
2011 2010 % Change
Mainline Revenue Passenger Miles (000)
Domestic 18,151,100 17,449,628 4.0
Atlantic 3,657,185 3,144,365 16.3
Latin 2,287,724 2,397,882 (4.6)
--------- ---------
Total 24,096,009 22,991,875 4.8
Mainline Available Seat Miles (000)
Domestic 21,838,757 21,253,794 2.8
Atlantic 4,863,356 4,160,636 16.9
Latin 2,867,060 3,172,897 (9.6)
--------- ---------
Total 29,569,173 28,587,327 3.4
Mainline Load Factor (%)
Domestic 83.1 82.1 1.0 pts
Atlantic 75.2 75.6 (0.4) pts
Latin 79.8 75.6 4.2 pts
--------- ---------
Total 81.5 80.4 1.1 pts
Mainline Enplanements
Domestic 19,039,590 18,219,612 4.5
Atlantic 896,188 776,860 15.4
Latin 1,682,642 1,779,615 (5.4)
--------- ---------
Total 21,618,420 20,776,087 4.1
US Airways Express
(Piedmont Airlines, PSA Airlines)
May
2011 2010 % Change
Express Revenue Passenger Miles (000)
Domestic 212,920 188,317 13.1
Express Available Seat Miles (000)
Domestic 276,216 259,279 6.5
Express Load Factor (%)
Domestic 77.1 72.6 4.5 pts
Express Enplanements
Domestic 722,659 707,569 2.1
Year to Date
2011 2010 % Change
Express Revenue Passenger Miles (000)
Domestic 927,419 821,988 12.8
Express Available Seat Miles (000)
Domestic 1,312,995 1,217,082 7.9
Express Load Factor (%)
Domestic 70.6 67.5 3.1 pts
Express Enplanements
Domestic 3,170,537 3,041,104 4.3
Consolidated US Airways Group, Inc.
May
2011 2010 % Change
Consolidated Revenue Passenger Miles (000)
Domestic 4,259,470 3,942,603 8.0
Atlantic 1,123,774 1,028,195 9.3
Latin 410,597 415,365 (1.1)
--------- ---------
Total 5,793,841 5,386,163 7.6
Consolidated Available Seat Miles (000)
Domestic 4,973,248 4,746,649 4.8
Atlantic 1,353,600 1,231,782 9.9
Latin 496,712 553,866 (10.3)
--------- ---------
Total 6,823,560 6,532,297 4.5
Consolidated Load Factor (%)
Domestic 85.6 83.1 2.5 pts
Atlantic 83.0 83.5 (0.5) pts
Latin 82.7 75.0 7.7 pts
--------- ---------
Total 84.9 82.5 2.4 pts
Consolidated Enplanements
Domestic 4,856,727 4,588,244 5.9
Atlantic 271,785 254,072 7.0
Latin 305,530 321,212 (4.9)
--------- ---------
Total 5,434,042 5,163,528 5.2
Year to Date
2011 2010 % Change
Consolidated Revenue Passenger Miles (000)
Domestic 19,078,519 18,271,616 4.4
Atlantic 3,657,185 3,144,365 16.3
Latin 2,287,724 2,397,882 (4.6)
--------- ---------
Total 25,023,428 23,813,863 5.1
Consolidated Available Seat Miles (000)
Domestic 23,151,752 22,470,876 3.0
Atlantic 4,863,356 4,160,636 16.9
Latin 2,867,060 3,172,897 (9.6)
--------- ---------
Total 30,882,168 29,804,409 3.6
Consolidated Load Factor (%)
Domestic 82.4 81.3 1.1 pts
Atlantic 75.2 75.6 (0.4) pts
Latin 79.8 75.6 4.2 pts
--------- ---------
Total 81.0 79.9 1.1 pts
Consolidated Enplanements
Domestic 22,210,127 21,260,716 4.5
Atlantic 896,188 776,860 15.4
Latin 1,682,642 1,779,615 (5.4)
--------- ---------
Total 24,788,957 23,817,191 4.1
About US Airways
US Airways --http://www.usairways.com/-- along with US Airways
Shuttle and US Airways Express, operates more than 3,000 flights
per day and serves more than 190 communities in the U.S., Canada,
Mexico, Europe, the Middle East, the Caribbean, Central and South
America.
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another Chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represented the
Debtors in their restructuring efforts. The USAir II bankruptcy
plan became effective on September 27, 2005. The Debtors
completed their merger with America West on the same date. (US
Airways Bankruptcy News; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
As of Sept. 30, 2010, US Airways had $8.006 billion in total
assets, $3.049 billion in current liabilities, $4.883 billion in
non-current liabilities, and $74 million in stockholders' equity.
* * *
US Airways Group carries Moody's "Caa1" Long-Term rating, LT Corp.
family rating and probability of default rating. Outlook is
negative.
US Airways Group carries Standard & Poor's "B-" LT Foreign Issuer
Credit rating and LT Local Issuer credit rating. Outlook is also
negative.
US Airways Group carries Fitch's "CCC" LT Issuer default rating
and "C" Senior unsecured debt rating. Outlook is also negative
US AIRWAYS: Reaches Tentative Agreement With TWU Dispatchers
------------------------------------------------------------
US Airways announced that it has reached a tentative agreement on
a new, four-year collective bargaining agreement with the
Transport Workers Union (TWU) that represents the airline's 164
flight dispatchers. Once ratified by the members of the TWU, the
contract will be the second agreement between the airline and
flight dispatchers since the merger of US Airways and America West
Airlines in 2005.
"We are very pleased to have reached a tentative agreement with
the TWU and thank the union leadership for their dedication and
continued partnership with the airline," said US Airways' Vice
President Labor Relations Al Hemenway. "This tentative agreement
is a win-win for our employees and US Airways as it recognizes the
contributions of our professional dispatchers while ensuring US
Airways is well positioned for long-term success in a competitive
environment."
The TWU will be presenting the details of the tentative agreement
to its members for consideration with an endorsement for
ratification, which is expected to take place in the coming weeks.
Once ratified, the new agreement will extend through June 2015.
About US Airways
US Airways --http://www.usairways.com/-- along with US Airways
Shuttle and US Airways Express, operates more than 3,000 flights
per day and serves more than 190 communities in the U.S., Canada,
Mexico, Europe, the Middle East, the Caribbean, Central and South
America.
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another Chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represented the
Debtors in their restructuring efforts. The USAir II bankruptcy
plan became effective on September 27, 2005. The Debtors
completed their merger with America West on the same date. (US
Airways Bankruptcy News; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
As of Sept. 30, 2010, US Airways had $8.006 billion in total
assets, $3.049 billion in current liabilities, $4.883 billion in
non-current liabilities, and $74 million in stockholders' equity.
* * *
US Airways Group carries Moody's "Caa1" Long-Term rating, LT Corp.
family rating and probability of default rating. Outlook is
negative.
US Airways Group carries Standard & Poor's "B-" LT Foreign Issuer
Credit rating and LT Local Issuer credit rating. Outlook is also
negative.
US Airways Group carries Fitch's "CCC" LT Issuer default rating
and "C" Senior unsecured debt rating. Outlook is also negative
VIDEOTRON LTEE: DBRS Assigns 'BB' Rating on Sr. Unsecured Notes
---------------------------------------------------------------
DBRS has assigned ratings of BB (high) and RR3 to Videotron Ltee's
issuance of $300 million 6.875% senior unsecured notes maturing
July 15, 2021. The trend is Stable. The Notes will rank equally
with all of the Company's existing and future unsecured
unsubordinated indebtedness.
This debt issuance was initiated by Videotron yesterday for
settlement on or around July 5, 2011. The Notes will be issued by
way of an offering memorandum and reference the trust indenture
dated July 5, 2011.
DBRS expects Videotron to use the proceeds from this issue for the
early repayment of a portion of its outstanding U.S. 6 7/8% notes
due 2014 and related cross-currency swaps.
VILLAGE AT LAKERIDGE: Magnolia Village Building Files Chapter 11
----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Village at Lakeridge LLC, the owner of the Magnolia
Village commercial building at 6990 South McCarran Boulevard in
Reno, Nevada, filed for Chapter 11 protection (Bankr. D. Nev. Case
No. 11-51994) on June 16, 2011, in its hometown in response to a
foreclosure suit. The petition says assets are $9.4 million while
debt totals $19 million. Secured claims are $16.1 million. The
property had $1.59 million in rental income in 2010, down 25% from
2008's $2.13 million.
VIRGINIA MOBILE: Files For Chapter 7 Bankruptcy Protection
----------------------------------------------------------
The Washington Post reports that Virginia Mobile Homes Inc., 17695
Washington St., No. 104, Dumfries, Virginia, filed for Chapter 7
protection (Bankr. E.D. Va. Case No. 11-14323). The Company
estimated assets of less than $50,000, and liabilities between $1
million and $10 million. Scott J. Newton represents the Company
as its attorney. The Company owes $497,019 to unsecured creditor
Tammac Holdings.
VITRO SAB: Bondholders Lose Skirmish on Involuntary Chapter 11
--------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that eight non-bankrupt U.S. subsidiaries of Vitro SAB won
a skirmish last week when the bankruptcy judge in Dallas refused
to allow dissenting bondholders to serve a notice accelerating
$1.2 billion in debt owing on the bonds. The bankruptcy judge
ruled in April that the eight subsidiaries couldn't be thrown into
Chapter 11 involuntarily as the bondholders sought. The judge
said there had been no acceleration of the debt, meaning that the
subsidiaries' liability on the guarantee of the bonds was only
contingent. Since contingent debt is not the basis for filing an
involuntary petition, the judge threw it out.
According to the report, the bondholders responded in two ways.
They filed a motion asking the judge to reconsider denial of the
involuntary petition. Second, they filed a motion asking the
judge to allow them to serve Vitro with a notice of acceleration
that would make the guarantee debt non-contingent.
Mr. Rochelle relates that at the hearing last week, U.S.
Bankruptcy Judge Harlin "Cooter" Hale denied the motion to file
the acceleration notice. Consequently, he will reconsider his
denial of the involuntary petitions at a June 28 hearing on the
same facts. Had the bondholders won, the facts would have been
more in their favor, enhancing the chance they might force the
other Vitro companies into Chapter 11 along with the five that
filed voluntarily in the face of involuntary petitions.
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.
Kurtzman Carson Consultants is the claims and notice agent to
Vitro America, et al. Alvarez & Marsal North America LLC, is the
Debtors' operations and financial advisor.
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.
On June 13, 2011, U.S. Bankruptcy Judge Harlin "Cooter" Hale
authorized the U.S. Debtors to sell their businesses to an
affiliate of Sun Capital Partners Inc. for what the creditor's
committee described as a gross price of $64.4 million.
WAGSTAFF MINNESOTA: Wants to Hire A&M as Financial Advisor
----------------------------------------------------------
Wagstaff Minnesota Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Minnesota for permission to
employ Alvarez & Marsal North America LLC as financial advisor.
The firm will, among other things:
a) review the Debtors' business plan and projections, including
cash collateral budgets;
b) assist in development, evaluation and execution of strategic
alternatives for the Debtors, including development of a
plan of reorganization;
c) assist with financing issues including liaising with
creditors, landlords, and the Debtors' franchisor;
d) work with Debtors' counsel to support the bankruptcy process
and provide analysis as appropriate; and
e) provide expert testimony when necessary related to a plan of
reorganization.
The firm will receive a monthly fee at the rate of $75,000
per month for the first month, and $50,000 for each subsequent
month, which fee will be paid monthly on or prior to the first
day of the month for which such fee applies. In addition, the
firm will earn a completion fee of $200,000 upon the (a) sale,
transfer, or disposition of all or a substantial portion of assets
or equity of the Debtors in one or more transactions to which the
Debtors consent to or arrange, or (b) confirmation of a plan of
reorganization, or (c) a restructuring or refinancing of all or
a substantial portion of the Debtors' debt.
The Debtor assures the Court that the firm is a "desinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
About Wagstaff Properties
Hanford, California-based Wagstaff Properties LLC and its debtor-
affiliates filed for Chapter 11 protection (Bankr. D. Minn. Case
No. 11-43074) on April 30, 2011.
The cases are jointly administered with Wagstaff Minnesota Inc.
(Bankr. Case No. 11-43073). Bankruptcy Judge Nancy C. Dreher
presides the case. Fredrikson & Byron, PA, and Peitzman Weg &
Kempinsky LLP represent the Debtor in their restructuring efforts.
The debtors estimated assets and liabilities at $10 million to
$50 million.
WAGSTAFF MINNESOTA: Taps Epiq Bankruptcy as Administrative Agent
----------------------------------------------------------------
Wagstaff Minnesota Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Minnesota for permission to
employ Epiq Bankruptcy Solutions LLC their administrative agent.
The firm will:
i) transmit and publish certain notices to creditors and
parties in interest in these cases;
ii) obtain and organize, for the benefit of the Debtors, proofs
of claim in these cases;
iii) assist with claims reconciliation and preparing claims
objections and exhibits;
iv) oversee the distribution of solicitation material, if any;
v) assist with the review and tabulation of ballots required
under Local Rule 3020-2;
vi) assist the Debtors in their preparation of the required
schedules and statements of financial affairs;
vii) manage any distributions pursuant to a consummated plan of
reorganization, and
viii) perform other administrative tasks that the Debtors may
request under the terms of the Services Agreement, such as
maintaining creditor lists and mailing notices.
The firm's rate for professional services:
Standard
Designation Hourly Rates 15% Discounted Rates
----------- ------------ --------------------
Clerk $40-$60 $34-$51
Case Manager $95-145 $80.75-$123.25
IT/Programming $140-$190 $119-$161.50
Snr. Case Manager/ $165-$220 $140.25-$187
Consultant
Senior Consultant $225-$275 $191.25-$233.75
Vice President $295 $250.75
The Debtor assures the Court that the firm is a "desinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
Hanford, California-based Wagstaff Properties LLC and its debtor-
affiliates filed for Chapter 11 protection (Bankr. D. Minn. Case
No. 11-43074) on April 30, 2011.
The cases are jointly administered with Wagstaff Minnesota Inc.
(Bankr. Case No. 11-43073). Bankruptcy Judge Nancy C. Dreher
presides the case. Fredrikson & Byron, PA, and Peitzman Weg &
Kempinsky LLP represent the Debtor in their restructuring efforts.
The debtors estimated assets and liabilities at $10 million to
$50 million.
WAGSTAFF MINNESOTA: Has Final Approval to Cash Collateral Use
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Minnesota authorized
Wagstaff Minnesota Inc. and its debtor-affiliates to use, on a
final basis, cash collateral of General Electric Capital
Corporation, General Electric Capital Business Asset Funding
Corporation of Connecticut, GE Capital Franchise Finance
Corporation, and Colonial Pacific Leasing Corporation.
The Debtors also request authority to use certain cash and cash
equivalents to the extent that they constitute "cash collateral"
of Perella Weinberg Partners Asset Based Value Master Fund I L.P.
and Perella Weinberg Partners ABV Opportunity Master Fund II A
L.P.
The Debtors will use the cash to continue their operations and
preserve the going-concern value of their assets.
After the expiration of the term of the budget, the Debtors would
be able to obtain use of any cash collateral under the procedures
as follows:
a) through and including the period covered by the budget;
b) through and including the term of any subsequent budget that
is filed and served not less than 21 days prior to the
expiration of the terms of the budget;
c) if an objection is filed to that budget proposed in
accordance with clause;
e) the Debtors will schedule a hearing on that proposed budget,
in which case, the use of cash collateral shall continue for
the term authorized by the Court;
f) this process may continue through and including April 30,
2012.
The Debtors said they are obligated to GE in an aggregate amount
in excess of $45 million, and PWP in the amount in excess of $13
million. All of the amounts owing to PWP and GE are legal, and
are not subject to any offset, defense, claim, counterclaim or any
other diminution of any kind.
As adequate protection for any diminution in the secured creditors
collateral arising from the Debtors use, the Debtors granted
secured creditors replacement liens in each of the respective
Debtors' post-petition cash, accounts, equipment, inventory and
the proceeds of the foregoing to the extent of the Debtors'
utilization thereof.
A full-text copy of the cash collateral budget is available for
free at http://bankrupt.com/misc/WAGSTAFF_Budget.pdf
Hanford, California-based Wagstaff Properties LLC and its debtor-
affiliates filed for Chapter 11 protection (Bankr. D. Minn. Case
No. 11-43074) on April 30, 2011.
The cases are jointly administered with Wagstaff Minnesota Inc.
(Bankr. Case No. 11-43073). Bankruptcy Judge Nancy C. Dreher
presides the case. Fredrikson & Byron, PA, and Peitzman Weg &
Kempinsky LLP represent the Debtor in their restructuring efforts.
The debtors estimated assets and liabilities at $10 million to
$50 million.
WAGSTAFF MINNESOTA: U.S. Trustee Forms Creditor's Panel
-------------------------------------------------------
Habbo G. Fokkena, the United States Trustee for Region 12,
appointed three creditors to serve on an Official Committee of
Unsecured Creditors of Wagstaff Minnesota Inc and its debtor-
affiliates.
The members of the Committee are:
1) Prime Source Food Service Equipment, Inc.
1409 S. Lamar Street, Suite 1007
Dallas, TX 75215
Contact Person: Charles A. Aman
Tel: (214) 273-5928
2) Hart Property Consultants
2173 232nd Street
St. Cloud, MN 56301
Contact Person: Steven Hart
Tel: (320) 253-1610
3) Powerhouse Repair
107 Wheelock Pky West
St. Paul, MN 55117
Contact Person: John Bearth
Tel: (651) 491-1558
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtor's
expense. They may investigate the Debtor's business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also attempt to negotiate the terms of a
consensual Chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtor is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.
Hanford, California-based Wagstaff Properties LLC and its debtor-
affiliates filed for Chapter 11 protection (Bankr. D. Minn. Case
No. 11-43074) on April 30, 2011.
The cases are jointly administered with Wagstaff Minnesota Inc.
(Bankr. Case No. 11-43073). Bankruptcy Judge Nancy C. Dreher
presides the case. Fredrikson & Byron, PA, and Peitzman Weg &
Kempinsky LLP represent the Debtor in their restructuring efforts.
The debtors estimated assets and liabilities at $10 million to
$50 million.
WASHINGTON MUTUAL: Aurelius Balks at Renewed Shareholder Probe
--------------------------------------------------------------
Patrick Fitzgerald, writing for Dow Jones' Daily Bankruptcy
Review, reports that Aurelius Capital Management called the
shareholder-driven investigation into the possibility that it
engaged in insider trading in Washington Mutual Inc. a "malicious
witch hunt" designed to force a settlement with the shareholders
committee. The $2.5 billion hedge fund, led by former bankruptcy
lawyer Mark Brodsky, says it's the victim of a "shakedown" by the
shareholders committee.
The Troubled Company Reporter on June 17, 2011, reported that the
proposed settlement between the shareholder group and the hedge
funds has collapsed, and the equity committee has resumed its
investigation of alleged insider trading by four hedge funds
involved in the case -- Appaloosa Management, Aurelius Capital
Management, Centerbridge Partners and Owl Creek Management. The
shareholder group had agreed to postpone the investigation in
early June after reaching a tentative restructuring deal with the
funds, before those talks broke down.
According to the TCR, Matt Wirz, writing for The Wall Street
Journal, said WaMu will seek confirmation for a reorganization
plan without support from shareholders at a July 6 hearing unless
negotiations between the equity committee and the hedge funds
resume. One source familiar with the matter told the Journal that
representatives for the equity committee flew to New York last
week to meet with settlement holders and ultimately rejected the
most recent version of the restructuring plan.
The funds own majority stakes in the company's subordinated bonds
and trust preferred securities.
The settlement would have given WaMu shareholders new stock in a
successor entity that would own the tax benefits from the net
operating losses the bank accumulated in 2007 and 2008.
The hedge funds have denied wrongdoing.
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- is a holding company for Washington Mutual
Bank as well as numerous non-bank subsidiaries.
Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S.
government regulators. The next day, WaMu and its affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns
100% of the equity in WMI Investment. When WaMu filed for
protection from its creditors, it disclosed assets of
$32,896,605,516 and debts of $8,167,022,695. WMI Investment
estimated assets of $500 million to $1 billion with zero debts.
WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal &
Manges LLP in New York City; Mark D. Collins, Esq., at Richards,
Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari,
Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver &
Hedges, LLP. The Debtor tapped Valuation Research Corporation as
valuation service provider for certain assets.
Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New
York and David B. Stratton, Esq., at Pepper Hamilton LLP in
Wilmington, Del., represent the Official Committee of Unsecured
Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and
William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the
Equity Committee. The official committee of equity security
holders also tapped BDO USA as its tax advisor. Stacey R.
Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis,
Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent
JPMorgan Chase, which acquired the WaMu bank unit's assets prior
to the Petition Date.
On Jan. 7, 2011, the U.S. Bankruptcy Court for the District of
Delaware entered a 107-page opinion determining that the global
settlement agreement, among certain parties including WMI, the
Federal Deposit Insurance Corporation and JPMorgan Chase Bank,
N.A., upon which the Plan is premised, and the transactions
contemplated therein, are fair, reasonable, and in the best
interests of WMI. Additionally, the Opinion and related order
denied confirmation, but suggested certain modifications to the
Company's Sixth Amended Joint Plan of Affiliated Debtors that, if
made, would facilitate confirmation.
Washington Mutual has filed with the Bankruptcy Court a Modified
Sixth Amended Joint Plan and a related Supplemental Disclosure
Statement. The Company believes that the Modified Plan has
addressed the Bankruptcy Court's concerns and looks forward to
returning to the Bankruptcy Court to seek confirmation of the
Modified Plan.
WASHINGTON MUTUAL: Execs. Buy Time With FDIC Settlement Offers
--------------------------------------------------------------
Pete Brush at Bankruptcy Law360 reports that three top officers of
Washington Mutual Bank NA, accused by the Federal Deposit
Insurance Corp. of wrecking the once-flourishing financial
institution, bought more time for negotiations Thursday, telling a
federal judge in Washington state that settlement offers have been
exchanged.
The FDIC sued former WaMu CEO Kerry K. Killinger and his wife,
Linda; former Chief Operating Officer Stephen J. Rotella and his
wife, Esther; and former home loans president David C. Schneider
in March claiming they took "historically unprecedented risks,"
while pocketing millions of dollars, according to Law360.
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- is a holding company for Washington Mutual
Bank as well as numerous non-bank subsidiaries.
Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S.
government regulators. The next day, WaMu and its affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns
100% of the equity in WMI Investment. When WaMu filed for
protection from its creditors, it disclosed assets of
$32,896,605,516 and debts of $8,167,022,695. WMI Investment
estimated assets of $500 million to $1 billion with zero debts.
WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal &
Manges LLP in New York City; Mark D. Collins, Esq., at Richards,
Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari,
Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver &
Hedges, LLP. The Debtor tapped Valuation Research Corporation as
valuation service provider for certain assets.
Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New
York and David B. Stratton, Esq., at Pepper Hamilton LLP in
Wilmington, Del., represent the Official Committee of Unsecured
Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and
William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the
Equity Committee. The official committee of equity security
holders also tapped BDO USA as its tax advisor. Stacey R.
Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis,
Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent
JPMorgan Chase, which acquired the WaMu bank unit's assets prior
to the Petition Date.
On Jan. 7, 2011, the U.S. Bankruptcy Court for the District of
Delaware entered a 107-page opinion determining that the global
settlement agreement, among certain parties including WMI, the
Federal Deposit Insurance Corporation and JPMorgan Chase Bank,
N.A., upon which the Plan is premised, and the transactions
contemplated therein, are fair, reasonable, and in the best
interests of WMI. Additionally, the Opinion and related order
denied confirmation, but suggested certain modifications to the
Company's Sixth Amended Joint Plan of Affiliated Debtors that, if
made, would facilitate confirmation.
Washington Mutual has filed with the Bankruptcy Court a Modified
Sixth Amended Joint Plan and a related Supplemental Disclosure
Statement. The Company believes that the Modified Plan has
addressed the Bankruptcy Court's concerns and looks forward to
returning to the Bankruptcy Court to seek confirmation of the
Modified Plan.
WATERSONG APARTMENTS: 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 Watersong Apartments,
L.P. have expressed interest in serving on a committee.
The U.S. Trustee reserves the right to appoint such a committee
should interest developed among the creditors.
Solana Beach, California-based Watersong Apartments, L.P., filed
for Chapter 11 bankruptcy protection on April 2, 2011 (Bankr. S.D.
Calif. Case No. 11-05632). David Reeder, Esq., at Reeder Law
Corporation, serves as the Debtor's bankruptcy counsel. The
Debtor estimated its assets at $10 million to $50 million and
debts at $1 million to $10 million.
* 5th Circuit Permits Releases for 3rd Party Fraud
--------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Court of Appeals in New Orleans ruled in a
June 16 opinion written by Chief Circuit Judge Edith H. Jones that
when a confirmed Chapter 11 plan gave a release to a nonbankrupt
third party for claims of fraud, other participants in the
bankruptcy case were barred from filing a fraud suit later.
According to the report, in the course of the opinion, Judge Jones
ruled that a Chapter 11 plan governs if a confirmation order
purports to grant releases broader than the plan.
The case is Evercore capital Partners II LLC v. Nancy Sue
Davis Trust (In re Davis Offshore LP), 09-41294, 5th U.S.
Circuit Court of Appeals (New Orleans)
* Survey: U.K. Distressed Investors Expect More Opportunities
-------------------------------------------------------------
Dow Jones' DBR Small Cap reports that distressed investors are
seeing more opportunities for turnaround investments, with many
opting to step in before insolvency to avoid the red tape of
acquiring companies out of administration, according to new
research from KPMG.
* Large Companies With Insolvent Balance Sheets
-----------------------------------------------
Total
Share- Total
Total Holders' Working
Assets Equity Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------ -------- -------
A&W REV ROYAL-UT AWRRF US 179.2 (147.6) 3.6
A&W REV ROYAL-UT AW-U CN 179.2 (147.6) 3.6
ABSOLUTE SOFTWRE ABT CN 116.3 (12.0) (12.6)
ACCO BRANDS CORP ABD US 1,094.2 (77.0) 293.1
ALASKA COMM SYS ALSK US 609.8 (27.4) 6.3
AMER AXLE & MFG AXL US 2,167.8 (415.4) 60.4
AMR CORP AMR US 27,113.0 (3,949.0) (1,028.0)
ANOORAQ RESOURCE ARQ SJ 1,024.0 (77.0) 20.9
AUTOZONE INC AZO US 5,884.9 (1,119.5) (655.3)
BLUEKNIGHT ENERG BKEP US 323.5 (35.1) (85.8)
BOSTON PIZZA R-U BPF-U CN 148.2 (100.1) 1.3
CABLEVISION SY-A CVC US 8,962.9 (6,462.4) (309.5)
CC MEDIA-A CCMO US 16,938.6 (7,280.4) 1,644.2
CENTENNIAL COMM CYCL US 1,480.9 (925.9) (52.1)
CENVEO INC CVO US 1,439.5 (333.5) 208.1
CHENIERE ENERGY CQP US 1,776.3 (547.6) 24.4
CHENIERE ENERGY LNG US 2,564.4 (509.7) 87.4
CHOICE HOTELS CHH US 412.4 (49.0) (1.9)
CLOROX CO CLX US 4,051.0 (82.0) (28.0)
COLUMBIA LABORAT CBRX US 27.8 (2.6) 11.5
DENNY'S CORP DENN US 296.8 (102.3) (36.9)
DIRECTV-A DTV US 20,593.0 (678.0) 2,813.0
DISH NETWORK-A DISH US 10,280.6 (502.5) 705.1
DISH NETWORK-A EOT GR 10,280.6 (502.5) 705.1
DOMINO'S PIZZA DPZ US 487.4 (1,167.7) 167.9
DUN & BRADSTREET DNB US 1,825.5 (615.8) (321.8)
EASTMAN KODAK EK US 5,882.0 (1,274.0) 954.0
EPICEPT CORP EPCT SS 12.4 (6.0) 6.0
EXELIXIS INC EXEL US 495.7 (68.7) 126.1
FREESCALE SEMICO FSL US 4,097.0 (5,076.0) 1,468.0
GENCORP INC GY US 989.6 (177.7) 83.8
GLG PARTNERS INC GLG US 400.0 (285.6) 156.9
GLG PARTNERS-UTS GLG/U US 400.0 (285.6) 156.9
GRAHAM PACKAGING GRM US 2,943.5 (501.5) 313.1
HANDY & HARMAN L HNH US 372.2 (23.9) 13.2
HCA HOLDINGS INC HCA US 23,809.0 (7,788.0) 2,719.0
IDENIX PHARM IDIX US 54.9 (40.6) 19.6
INCYTE CORP INCY US 459.6 (104.0) 315.8
IPCS INC IPCS US 559.2 (33.0) 72.1
ISTA PHARMACEUTI ISTA US 131.7 (161.7) 6.6
JUST ENERGY GROU JE CN 1,588.6 (219.4) (303.2)
KNOLOGY INC KNOL US 823.7 (4.0) 42.7
LIN TV CORP-CL A TVL US 797.4 (127.9) 38.6
LIZ CLAIBORNE LIZ US 1,255.8 (124.5) (26.5)
LORILLARD INC LO US 3,590.0 (449.0) 1,290.0
MAINSTREET EQUIT MEQ CN 453.0 (10.2) -
MANNKIND CORP MNKD US 254.8 (203.5) 26.2
MEAD JOHNSON MJN US 2,465.4 (250.4) 572.3
MERITOR INC MTOR US 2,675.0 (1,006.0) 205.0
MOODY'S CORP MCO US 2,524.4 (223.2) 498.6
MORGANS HOTEL GR MHGC US 692.8 (29.2) 205.1
NATIONAL CINEMED NCMI US 796.4 (327.0) 74.0
NAVISTAR INTL NAV US 9,966.0 (764.0) 1,819.0
NEXSTAR BROADC-A NXST US 582.6 (181.2) 40.0
NPS PHARM INC NPSP US 158.3 (159.7) 117.8
NYMOX PHARMACEUT NYMX US 10.0 (3.3) 6.8
ODYSSEY MARINE OMEX US 25.7 (8.1) (14.0)
OTELCO INC-IDS OTT-U CN 319.2 (7.6) 22.4
OTELCO INC-IDS OTT US 319.2 (7.6) 22.4
PALM INC PALM US 1,007.2 (6.2) 141.7
PDL BIOPHARMA IN PDLI US 248.7 (371.2) (161.6)
PLAYBOY ENTERP-A PLA/A US 165.8 (54.4) (16.9)
PLAYBOY ENTERP-B PLA US 165.8 (54.4) (16.9)
PRIMEDIA INC PRM US 208.0 (91.7) 3.6
PROTECTION ONE PONE US 562.9 (61.8) (7.6)
PURE INDUSTRIAL AAR-U CN 277.1 (8.6) -
QUALITY DISTRIBU QLTY US 281.4 (124.4) 40.9
QUANTUM CORP QTM US 431.0 (61.1) 97.9
QWEST COMMUNICAT Q US 16,849.0 (1,560.0) (2,828.0)
RADNET INC RDNT US 556.6 (81.8) 11.0
REGAL ENTERTAI-A RGC US 2,323.2 (541.6) (114.5)
RENAISSANCE LEA RLRN US 49.9 (31.4) (36.6)
REVLON INC-A REV US 1,105.5 (686.5) 132.7
RSC HOLDINGS INC RRR US 2,817.4 (62.2) (71.6)
RURAL/METRO CORP RURL US 303.7 (92.1) 72.4
SALLY BEAUTY HOL SBH US 1,707.0 (340.6) 418.5
SINCLAIR BROAD-A SBGI US 1,571.2 (144.6) 60.4
SINCLAIR BROAD-A SBTA GR 1,571.2 (144.6) 60.4
SMART TECHNOL-A SMT US 546.2 (43.3) 173.7
SMART TECHNOL-A SMA CN 546.2 (43.3) 173.7
SPIRIT AIRLINES SAVE US 545.2 (97.0) 27.6
SUN COMMUNITIES SUI US 1,160.1 (111.7) -
SWIFT TRANSPORTA SWFT US 2,555.7 (9.8) 204.6
TAUBMAN CENTERS TCO US 2,535.6 (512.8) -
TEAM HEALTH HOLD TMH US 832.2 (25.7) 44.8
THERAVANCE THRX US 315.1 (27.8) 266.9
TOWN SPORTS INTE CLUB US 460.0 (4.7) (15.4)
UNISYS CORP UIS US 2,949.3 (692.1) 547.6
UNITED RENTALS URI US 3,692.0 (29.0) 123.0
US AIRWAYS GROUP LCC US 8,217.0 (30.0) (104.0)
VECTOR GROUP LTD VGR US 924.6 (61.4) 294.8
VENOCO INC VQ US 815.6 (21.6) 8.1
VERISK ANALYTI-A VRSK US 1,286.4 (109.1) (180.8)
VIRGIN MOBILE-A VM US 307.4 (244.2) (138.3)
VONAGE HOLDINGS VG US 251.7 (102.0) (39.2)
WARNER MUSIC GRO WMG US 3,617.0 (254.0) (650.0)
WEIGHT WATCHERS WTW US 1,126.0 (636.6) (345.4)
WESTMORELAND COA WLB US 788.0 (173.9) (1.0)
WORLD COLOR PRES WC CN 2,641.5 (1,735.9) 479.2
WORLD COLOR PRES WCPSF US 2,641.5 (1,735.9) 479.2
WORLD COLOR PRES WC/U CN 2,641.5 (1,735.9) 479.2
*********
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.
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