/raid1/www/Hosts/bankrupt/TCR_Public/110712.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, July 12, 2011, Vol. 15, No. 191
Headlines
3 G PROPERTIES: Plan Exclusivity Expires July 18
3 G PROPERTIES: Banks Say Sale-Based Plan Not Feasible
ABE PACIFIC: Case Summary & 20 Largest Unsecured Creditors
AEOLUS PHARMACEUTICALS: Dismisses Haskell & White as Accountants
AMERICAN APPAREL: Raises $6.7-Mil. from Sale of Common Shares
ALPHABET SOUP: Case Summary & 8 Largest Unsecured Creditors
AMERIFORM INC: Survives Recession, Plans Expansion
ARCHBROOK LAGUNA: Files for Chapter 11 to Sell Business
ARCHBROOK LAGUNA: Case Summary & Creditors List
ASARCO LLC: CNA Can't Shake Asarco Suit Over $33M Calif. Cleanup
AUTO VEGA: Case Summary & 20 Largest Unsecured Creditors
BANNING LEWIS: Court Lifts Stay to Allow Dismissal of Action
BARNES BAY: Court Approves Revised Disclosure Statement
BIOFUEL ENERGY: Seven Directors Elected at Annual Meeting
BPP TEXAS: Court OKs Cash Collateral Access Until July 29
BRIARWOOD CAPITAL: $4-Mil. Sale of Interests to Lennar Approved
BRIGHAM EXPLORATION: BlackRock Discloses 4.92% Equity Stake
CAMPANA FAMILY: MORs Not Filed; U.S. Trustee Warns Dismissal
CASA GRANDE: Voluntary Chapter 11 Case Summary
CATHOLIC CHURCH: Milw. Has OK to Pay $311,000 to Abuse Survivors
CATHOLIC CHURCH: Wilmington Plan Gets OK from Creditors
CATHOLIC CHURCH: Wilm. Abuse Survivors Want Deal Honored
CEDAR PROFESSIONAL: Voluntary Chapter 11 Case Summary
CITY MARKET: Sent to Receivership; Foreclosure Sale in August
CORROZI-FOUNTAINVIEW: Court Authorizes Condominium Units Sale
CORUS BANKSHARES: Mulls on a Plan to Exit Bankruptcy
CRD ENTERPRISES: Files for Chapter 7 Bankruptcy Protection
CROSSOVER FINANCIAL: Taps Nicholls & Associates as Bank. Counsel
DANCING BEAR: WestLB Obtains Clarification Re Lift Stay Request
DEB SHOPS: Has Access to Cash Until Termination of DIP Loans
DEMOLITION RESOURCES: In Receivership; Subcontractors Go Unpaid
DESERT OASIS: Can Hire Schwartzer & McPherson as Bankr. Counsel
DG FASTCHANNEL: Moody's Assigns 'B1' Corporate Family Rating
DJSP ENTERPRISES: DAL Completes $3.3-Mil. Sale of Default Unit
DOWN EAST: Local Control of Hospital May Resume Soon
EMMIS COMMUNICATIONS: Amends $84.3-Mil. Notes Exchange Offer
ENERGY TRANSFER: Moody's Comments on Revised Southern Union Bid
ENRON CORP: Judge Witholds Approval as Insurer Objects to Deal
ENTERTAINMENT PROPERTIES: Fitch Affirms 'BB' Pref. Stock Ratings
EVERGREEN SOLAR: BlackRock Discloses 2.53% Equity Stake
EXAMWORKS GROUP: Moody's Assigns 'B2' CFR; Outlook Stable
EXAMWORKS GROUP: S&P Assigns 'B' Corporate Credit Rating
FKF MADISON: Receives $220 Million Offer From Secured Creditor
FLORIDA EXTRUDERS: Court Confirms Plan of Liquidation
FLORIDA HOUSING: Moody's Downgrades Revenue Bond Rating to 'Ba2'
FMC REAL ESTATE: Fitch Cuts Rating on Class H Notes to 'C/RR6'
FRAZER EXTON: Court OKs Ciardi Ciardi as Bankruptcy Counsel
FRAZER/EXTON: Taps MacElree Harvey to Handle Makemie Transaction
FREDERIKSEN DEVELOPMENT: Sells Three Properties for $568,000
GELTECH SOLUTIONS: Still in Talks on FireIce Distribution Deal
GLOBAL CROSSING: Southeastern Asset Discloses 12.1% Equity Stake
GRAMERCY PARK: Court OKs Voluntarily Dismissal of Chapter 11 Case
GRANDE HOLDINGS: July 25 Hearing Set for Chapter 15 Petition
GREENBRIER COS: Incurs $2.80 Million Net Loss in May 31 Quarter
GROGAN ASSOCIATES: Case Summary & 20 Largest Unsecured Creditors
GSC GROUP: Judge Okays $1-Mil. Bonus for Chief Despite Objection
HAMPTON ROADS: Opens Loan Production Office in West Ocean City
HARDY-BEACON LLC: Voluntary Chapter 11 Case Summary
HARRY & DAVID: Court OKs PricewaterhouseCoopers as Auditor
HAWAII MEDICAL: Hires Robert A. Wade as Compliance Counsel
HAWKS PRAIRIE: HomeStreet Asks Court to Amend Confirmation Order
HEARUSA INC: Equity Committee Wants Assets Sale Documents
HERCULES OFFSHORE: Delta Assets Now "Discontinued Operations"
HORIZON LINES: Extends Subscription Deadline to July 22
HORIZON LINES: BlackRock Discloses 2.52% Equity Stake
HOSPITAL DAMAS: DIP Financing, Cash Use Extended to Sept. 30
ISAACSON STRUCTURAL: Sec. 341 Creditors Meeting Set for July 28
IMH FINANCIAL: Files Form S-8; Registers 1.2MM Common Shares
IMUA BLUEHENS: Has Until July 18 to File Schedules and Statements
ISAACSON STRUCTURAL: Claims Bar Date Set for Oct. 20
ISAACSON STRUCTURAL: Hiring William S. Gannon as General Counsel
ISAACSON STRUCTURAL: Has $500,000 Bridge Loan From Cate Street
ISAACSON STRUCTURAL: U.S. Trustee Appoints Creditors Panel
ISTAR FINANCIAL: Modifies Terms of Performance-Based RSUs
JACKSON HEWITT: Judge Allows Maryland's Appeal on Automatic Stay
KINETIC CONCEPTS: S&P Puts 'BB+' Corp. Rating on Watch Negative
KOBRA EFS: Wants Schedules Filing Extended for 30 More Days
LANDAMERICA FINANCIAL: PBGC to Pay Pensions for 4,500 Workers
LEE ENTERPRISES: BlackRock Discloses 2.02% Equity Stake
LEHMAN BROTHERS: Credit Agricole to Pay $53.5-Mil. for Close-Out
LOCATEPLUS HOLDINGS: Patrick F. Murphy Resigns as Director
LODGENET INTERACTIVE: BlackRock Holds 3.31% Equity Stake
LOS ANGELES DODGERS: Wants to Pay $1.1-Mil. to Critical Vendors
LOS ANGELES DODGERS: MLB Wants Info on McCourt's Payment
MAQ MANAGEMENT: Has Until July 9 to File Schedules and Statements
M.C. PIPE: Case Summary & 20 Largest Unsecured Creditors
MEDICAL CONNECTIONS: Executive Officers Disclose Shares Ownership
MERITA'S SCHOOLS: Moody's Assigns 'B2' CFR; Outlook Stable
MTR GAMING: Moody's Assigns 'B3' Rating to Senior Secured Notes
NCO GROUP: APAC Customer Services to be Bought by OEP for $470MM
NEBRASKA BOOK: Seeks to Hire Pachulski Stang Ziehl as Co-Counsel
NEW STREAM: Committee Wants Houlihan Lokey's April Fees Paid
NEW STREAM: Gets Go Signal to Employ Lyrics Services as Consultant
NON-INVASIVE MONITORING: Steve Mrha Resigns as COO
NORTH LAS VEGAS: State Close to Taking Control of Finances
NOVADEL PHARMA: Dr. Bergstrom's Employment Extended to June 2012
OLSEN AGRICULTURAL: Employs Moss Adams as Tax Accountants
OMEGA NAVIGATION: Greek Tanker Owner Files for Ch. 11 in Houston
OMEGA NAVIGATION: Press Release Announcing the Bankruptcy Filing
OMEGA NAVIGATION: Voluntary Chapter 11 Case Summary
ONE RENAISSANCE: Wells Fargo Wants Stay Lifted for "Cause"
OUTSOURCE HOLDINGS: Examiner Can Retain Traxi as Fin'l Advisors
OVERLAND STORAGE: Amends Form S-3 Registration Statement
PACESETTER FABRICS: Has Interim Access to Cathay Cash Collateral
PACIFIC DEVELOPMENT: Deal Default Cues Lift of Central Bank's Stay
PERKINS & MARIE: Wants to Hire Young Conaway as Delaware Counsel
PERKINS & MARIE: Taps Troutman Sanders as Bankruptcy Counsel
PERKINS & MARIE: Taps Whitby Santarlasci as Financial Advisor
PHILADELPHIA ORCHESTRA: Has Temporary Deal With Musicians
POST STREET: Files Schedules of Assets and Liabilities
PRECISION OPTICS: Maturity of $600,000 Notes Extended to July 20
PRO MACH: S&P Assigns 'B+' Corporate Credit Rating
REHOBOTH MCKINLEY: Fitch Affirms Rating on 2007A Bonds at 'BB-'
REXNORD LLC: S&P Affirms 'B' Corporate Credit Rating
RITE AID: Jean Coutu Discloses 26.8% Equity Stake
SABERTOOTH LLC: Sues Lender for $4 Million Over Chapter 11 Failure
SAINT VINCENTS: To Auction Sisters of Charity Assets on July 19
SALON MEDIA: David Talbot Appointed Interim CEO
SEAHAWK DRILLING: Plan Provides for Payment of All Allowed Claims
SEARCHMEDIA HOLDINGS: Receives Going Concern Qualification
SEQUA CORPORATION: Moody's Upgrades CFR to B3; Outlook Positive
SHALAN ENTERPRISES: Seeks to Borrow $1.5-Mil. from 5 Parties
SHAMROCK-SHAMROCK INC: Wants Robert Del Rose to Manage Property
SHAMROCK-SHAMROCK INC: PNC Bank Wants Cash Collateral Use Denied
STELLAR GT: Receivership Extended Until Oct. 31
STELLAR GT: Hiring Ballard Spahr as Bankruptcy Counsel
STELLAR GT: Sec. 341 Creditors Meeting Set for July 25
STELLAR GT: Proposes Sept. 8 Claims Bar Date
TRONOX INC: PBGC Preserves Pensions for 7,400 Workers in OKC
US AIRWAYS: S&P Rates Class C Pass-through Certificates at 'B'
US SECURITY: Moody's Assigns 'B1' CFR; Outlook Stable
US SECURITY: S&P Assigns Preliminary 'B' Corporate Credit Rating
USEC INC: BlackRock Discloses 4.98% Equity Stake
UTSTARCOM INC: Suspending Filing of Reports With SEC
VERTAFORE INC: Moody's Says B2 CFR Unaffected by Acquisition
VERTAFORE INC: S&P Rates $75-Mil. First Lien Term Loan B at 'B+'
VINEYARD AT SERRA: Files Schedules of Assets and Liabilities
VOICESERVE INC: Michael Studer CPA Raises Going Concern Doubt
WAGSTAFF PROPERTIES: Taps Alvarez & Marsal as Financial Advisor
WAGSTAFF PROPERTIES: Freeborn & Peters OK'd as Committee Counsel
WAGSTAFF PROPERTIES: Committee Taps Lommen Abdo as Local Counsel
WAGSTAFF PROPERTIES: Trinity Capital Approved as Investment Banker
WASHINGTON MUTUAL: Schwabe Williamson Tapped as Securities Counsel
WASHINGTON MUTUAL: Wants Perkins Coie to Handle Tax Proceedings
WILLIAM LYON: Inks Employment Agreements with Executive Officers
WL HOMES: Liquidation Trustee Reaches $1.2MM Deal With BofA
WORLDGATE COMMUNICATIONS: C. Vitale Resigns from All Positions
YRC WORLDWIDE: Steering Group to Grant $175-Mil First-Out Facility
* DOJ Won't Contest Joint Bankruptcies By Gay Couples
* S&P's Global Corp. Default Tally Remains at 18 for 2011
* Moody's: Spec-Grade Default Rate Ends at 2.2% in Q2 2011
* Large Companies With Insolvent Balance Sheets
*********
3 G PROPERTIES: Plan Exclusivity Expires July 18
------------------------------------------------
The U.S. Bankruptcy Court for the U.S. Bankruptcy Court for the
Eastern District of North Carolina last month entered an order
further extending 3 G Properties, LLC's exclusive period to obtain
acceptances of its plan of reorganization to and including July
18, 2011. In its motion, the Debtor related that it needs the
extension to protect its right and ability to propose a Plan of
Reorganization and to obtain requisite consents thereto.
The Debtor filed its plan of reorganization on Dec. 13, 2010, its
disclosure statement on Dec. 16, 2010, and its amended disclosure
statement on March 15, 2011. Confirmation hearings began May 19.
As reported in the TCR on May 3, 2011, the Plan provides for the
payment of all allowed, non-insider creditor claims in full. Any
deferred payments are subject to an applicable interest rate
component, such that each creditor will receive the present value
of its respective claim in full. Holders of membership interests
will retain their interests.
The Debtor principally operates two real estate projects located
primarily in Granville County, North Carolina: Triangle North
Development, an industrial tract and vacant excess land reserved
for additional phases, located in Oxford, North Carolina; and
Highland Trails Development, a mixed use development project in
Butner, North Carolina.
The Triangle North Development is encumbered by: (1) a first
deed of trust in favor of Capital Bank in an approximate amount
of $8,408,367, (2) a second deed of trust in favor of James M.
Adams, Sr. in the approximate amount of $330,000, (3) a third
deed of trust in favor of Goldston Family Lim. Liab. LP #2 in
the approximate amount of $1,250,000, (4) a fourth deed of trust
in favor of County of Granville in the approximate amount of
$1,400,000, and (5) a fifth deed of trust in favor of Kerr Tar
Regional Econ. Dev. Corp. in the approximate amount of $0.
The Highland Trails Property is subject to first deeds of trust on
the residential and commercial portions in favor of Southern
Community Bank in an approximate amount of $6,767,605.
About 3 G Properties
Wake Forest, North Carolina-based 3 G Properties, LLC, filed for
Chapter 11 bankruptcy (Bankr. E.D.N.C. Case No. 10-04763) on June
14, 2010. 3 G Properties is a North Carolina limited liability
company formed on June 14, 2010 as a result of the statutory
merger of three existing North Carolina limited liability
companies: (1) Lake Glad Road Partners, LLC, (2) Lake Glad Road
Commercial, LLC, and (3) Granville Park Partners, LLC. The
Debtor principally operates two real estate projects located
primarily in Granville County, North Carolina: Triangle North
Development and Highland Trails Development.
Gregory B. Crampton, Esq., and Kevin L. Sink, Esq., at Nicholls &
Crampton, P.A., in Raleigh, N.C., represent the Debtor in its
restructuring effort. The Company estimated its assets and debts
at $10 million to $50 million as of the Petition Date.
3 G PROPERTIES: Banks Say Sale-Based Plan Not Feasible
------------------------------------------------------
In May, 3 G Properties, LLC, filed with the U.S. Bankruptcy Court
for the Eastern District of North Carolina a second modification
to its plan of reorganization filed on Dec. 13, 2010. The
modifications reflect those announced in open court on May 24,
2011, and also include additional modifications. A copy of the
Second Modification is available at:
http://bankrupt.com/misc/3g.2ndplanmodification.pdf
In June, Capital Bank filed its continuing objection to
3 G Properties' Chapter 11 plan, as modified. In support of this
continuing objection, Capital Bank says:
-- The case has been pending for twelve months, but the Debtor
has received no offers to purchase its real estate, which
real estate is its sole source of revenue to pay Creditor
claims in this bankruptcy case.
-- Even though the Protherics Purchase Agreement is not a
binding contract with consideration, the Debtor improperly
proposes to pay a "broker commission." The terms of
the Protherics Purchase Agreement expressly provide that no
broker is involved.
-- Capital Bank objects to the modification dated May 27, 2011,
adding in an additional discretionary term at the end of the
period during which it can sell Capital Bank's collateral as
follows: "(a) Pay off the Capital Bank Aggregate Balance in
full by refinance, third party equity investment, or
combination of the two," as pure speculation, as no evidence
was presented regarding the Debtor's ability to obtain
financing, third party equity investment or any combination.
-- The Debtor's proposed use of Capital Bank's collateral
(timber proceeds held in its DIP account) for "costs of
administration claims, including attorney for Debtor fees" is
improper.
-- The Debtor has failed in its burden of proving all necessary
elements to confirm a feasible, fair and equitable Chapter 11
plan of reorganization.
For the foregoing reasons, Capital Bank asks the Court to deny
confirmation of the Debtor's Chapter 11 plan of reorganization, as
modified.
Southern Community Bank Also Objects
Secured creditor Southern Community Bank also filed a supplemental
objection to the confirmation of the Debtor's plan, as modified on
May 23, 2011, and as further modified on May 27, 2011.
Southern Community says it has timely filed ballots rejecting the
Plan, and reasserts its objection to the confirmation of the Plan,
because the Debtor has not met its burden to show that the Plan is
feasible and that it has adequate means for implementing the Plan.
Southern Community explains that Debtor has no regular source of
income with which to meet the obligations provided for in the
Plan. The only other source of payment for expenses is from the
sale of real property, which is highly speculative.
About 3 G Properties
Wake Forest, North Carolina-based 3 G Properties, LLC, filed for
Chapter 11 bankruptcy (Bankr. E.D.N.C. Case No. 10-04763)
on June 14, 2010. 3 G Properties is a North Carolina limited
liability company formed on June 14, 2010 as a result of the
statutory merger of three existing North Carolina limited
liability companies: (1) Lake Glad Road Partners, LLC, (2) Lake
Glad Road Commercial, LLC, and (3) Granville Park Partners, LLC.
The Debtor principally operates two real estate projects located
primarily in Granville County, North Carolina: Triangle North
Development and Highland Trails Development.
Gregory B. Crampton, Esq., and Kevin L. Sink, Esq., at Nicholls &
Crampton, P.A., in Raleigh, N.C., represent the Debtor in its
restructuring effort. The Company estimated its assets and debts
at $10 million to $50 million as of the Petition Date.
ABE PACIFIC: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Abe Pacific Heights Properties, LLC
2028 Laguna Street
San Francisco, CA 94115
Bankruptcy Case No.: 11-52216
Chapter 11 Petition Date: July 7, 2011
Court: U.S. Bankruptcy Court
District of Nevada (Reno)
Judge: Bruce T. Beesley
Debtor's Counsel: Chris D. Nichols, Esq.
BELDING, HARRIS & PETRONI
417 W. Plumb Lane
Reno, NV 89509
Tel: (775) 786-7600
E-mail: cnichols@renolaw.biz
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/nvb11-52216.pdf
The petition was signed by Calvin Abe, managing member.
AEOLUS PHARMACEUTICALS: Dismisses Haskell & White as Accountants
----------------------------------------------------------------
Aeolus Pharmaceuticals, Inc., early this month dismissed Haskell &
White LLP as its independent registered public accounting firm,
upon recommendation and approval of the Audit Committee of the
Company's Board of Directors.
The audit reports issued by Haskell & White for the past two years
did not contain any adverse opinion or disclaimer of opinion, nor
were the reports qualified or modified as to uncertainty, audit
scope or accounting principles, except that the audit reports of
Haskell & White on the Company's financial statements for the
fiscal years ended Sept. 30, 2009, and Sept. 30, 2010, each
included an explanatory paragraph noting that there was
substantial doubt about the Company's ability to continue as a
going concern.
During the fiscal years ended Sept. 30, 2009, and Sept. 30, 2010,
and through July 6, 2011, there were no disagreements between the
Company and Haskell & White 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 Haskell & White, would have caused Haskell & White
to make reference thereto in its report on the Company's financial
statements for those years.
On July 6, 2011, the Company approved the engagement of Grant
Thornton LLP to audit the Company's financial statements as of and
for the fiscal year ending Sept. 30, 2011. The Audit Committee of
the Company's Board of Directors determined to engage Grant
Thornton on July 6, 2011. The Company expects that its
stockholders will be asked at the 2012 annual meeting of
stockholders, or pursuant to an action by written consent in lieu
of the 2012 annual meeting of stockholders, to ratify the
appointment of Grant Thornton as the Company's independent
registered public accounting firm for the fiscal year ending
Sept. 30, 2012.
During the Company's two most recent fiscal years ended Sept. 30,
2009, and Sept. 30, 2010, and through July 6, 2011, the Company
did not consult Grant Thornton with respect to the application of
accounting principles to a specified transaction, either completed
or proposed, or the type of audit opinion that might be rendered
on the Company's financial statements, or any other matters or
reportable events as set forth in Item 304(a)(2)(ii) of Regulation
S-K.
About Aeolus Pharmaceuticals
Based in Mission Viejo, California, Aeolus Pharmaceuticals Inc.
(OTC BB: AOLS) -- http://www.aeoluspharma.com/-- is developing a
variety of therapeutic agents based on its proprietary small
molecule catalytic antioxidants, with AEOL 10150 being the first
to enter human clinical evaluation. AEOL 10150 is a patented,
small molecule catalytic antioxidant that mimics and thereby
amplifies the body's natural enzymatic systems for eliminating
reactive oxygen species, or free radicals. Studies funded by the
National Institutes for Health are currently underway evaluating
AEOL 10150 as a treatment for exposure to radiation, sulfur
mustard gas and chlorine gas. A second compound, AEOL 11207, has
demonstrated efficacy in animal models of Parkinson's disease and
is currently being evaluated as a potential treatment for
epilepsy.
Haskell & White LLP, in Irvine, California, expressed substantial
doubt about the Company's ability to continue as a going concern
after auditing the Company's financial statements for fiscal year
ended Sept. 30, 2010. The independent auditors noted that the
Company has suffered recurring losses, negative cash flows from
operations and management believes the Company does not currently
possess sufficient working capital to fund its operations past the
second quarter of fiscal 2012.
The Company reported a net loss of $25.9 million, which included a
non-cash charge of $21.3 million related to increases in the fair
value of warrants, for fiscal 2010, compared with a net loss of
$2.3 million for fiscal 2009. The Company did not generate any
revenue during fiscal 2010 or fiscal 2009.
The Company's balance sheet at March 31, 2011, showed
$2.59 million in total assets, $30.57 million in total
liabilities, and a $27.98 million total stockholders' deficit.
AMERICAN APPAREL: Raises $6.7-Mil. from Sale of Common Shares
-------------------------------------------------------------
American Apparel, Inc., on July 7, 2011, received a total of
approximately $6.7 million in proceeds from the issuance of
approximately 7.4 million shares in a private placement exempt
from registration pursuant to Section 4(2) of the Securities Act
of 1933, as amended.
Approximately $6.0 million of those proceeds resulted from the
exercise of rights by certain Purchasers to purchase approximately
6.7 million shares of the Company's common stock pursuant to the
Purchase and Investment Agreement, dated as of April 21, 2011,
between the Company and certain investors including members of the
Serruya family, Delavaco Capital, Inc., Dynamic Power Hedge Fund
and Front Street Investment Management, Inc.
Under the terms of the Investor Purchase Agreement, the Purchasers
have a right to purchase an aggregate of up to 27.4 million shares
of Common Stock at a price of $0.90 per share for a period of 180
days after April 26, 2011. There remains an aggregate of
approximately 20.7 million Purchase Right Shares available for
purchase under the Investor Purchase Agreement.
The remaining $700,000 of the proceeds resulted from the purchase
of 777,778 shares of Common Stock by Dov Charney, Chairman and
Chief Executive Officer of the Company, pursuant to the Purchase
Agreement, dated as of April 27, 2011, between the Company and Mr.
Charney, which transaction was approved by the Company's
stockholders on June 21, 2011. As previously disclosed in the
April 8-K, under the Charney Purchase Agreement, Mr. Charney has
the right to purchase up to an additional 1,555,556 shares of
Common Stock under substantially the same terms and conditions as
the Purchase Rights granted to the Purchasers under the Investor
Purchase Agreement.
The Company intends to use the proceeds from the issuance and sale
of such shares for working capital and general corporate purposes.
About American Apparel
Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP)
-- http://www.americanapparel.com/-- is a vertically integrated
manufacturer, distributor, and retailer of branded fashion basic
apparel. As of Sept. 30, 2010, American Apparel employed over
10,000 people and operated 278 retail stores in 20 countries,
including the United States, Canada, Mexico, Brazil, United
Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the
Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan,
South Korea and China.
American Apparel reported a net loss of $86.31 million on
$532.99 million of net sales for the year ended Dec. 31, 2010,
compared with net income of $1.11 million on $558.77 million of
net sales during the prior year.
The Company's balance sheet at March 31, 2011, showed
$333.95 million in total assets, $283.12 million in total
liabilities, and $50.83 million in total stockholders' equity.
The Wall Street Journal reports that Skadden, Arps, Slate, Meagher
& Flom has been advising the company on its recent restructuring
efforts alongside investment bank Rothschild Inc.
In April 2011, American Apparel said it raised $14.9 million in
rescue financing from a group of investors led by Canadian
financier Michael Serruya and private equity firm Delavaco Capital
Corp., allowing the casual clothing retailer to meet obligations
to its lenders for the time being.
Going Concern Doubt
Marcum LLP, in New York, in its audit report on American Apparel's
financial statements for the year ended Dec. 31, 2010, expressed
substantial doubt about the Company's ability to continue as a
going concern.
As of April 30, 2011, the Company had approximately $8,000,000 of
cash, approximately $8,900,000 of availability for additional
borrowings and $46,100,000 outstanding on the credit facility
under the BofA Credit Agreement and $1,400,000 of availability for
additional borrowings and $4,000,000 outstanding on the credit
facility under the Bank of Montreal Credit Agreement. As May 10,
2011, the Company had approximately $5,941,000 available for
borrowing under the BofA Credit Agreement and $1,481,000 available
under the Bank of Montreal Credit Agreement.
The Company incurred a loss from operations of $13,091,000 for the
three months ended March 31, 2011, compared to a loss from
operations of $21,556,000 for the three months ended March 31,
2010. The current operating plan indicates that losses from
operations may be incurred for all of fiscal 2011.
"If we are not able to timely, successfully or efficiently
implement the strategies that we are pursuing to improve our
operating performance and financial position, obtain alternative
sources of capital or otherwise meet our liquidity needs, we may
need to voluntarily seek protection under Chapter 11 of the U.S.
Bankruptcy Code," the Company said following its first quarter
results.
ALPHABET SOUP: Case Summary & 8 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Alphabet Soup LLC
P.O. Box 2228
Middleburg, VA 20118
Bankruptcy Case No.: 11-14959
Chapter 11 Petition Date: July 7, 2011
Court: U.S. Bankruptcy Court
Eastern District of Virginia (Alexandria)
Judge: Robert G. Mayer
Debtor's Counsel: Madeline A. Trainor, Esq.
CYRON & MILLER, LLP
100 N. Pitt Street, Suite 200
Alexandria, VA 22314
Tel: (703) 299-0600
Fax: (703) 299-0603
E-mail: mtrainor@cyronmiller.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's eight largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/vaeb11-14959.pdf
The petition was signed by John A. "Jack" Andrews, managing
member.
AMERIFORM INC: Survives Recession, Plans Expansion
--------------------------------------------------
Dave Alexander at Muskegon Chronicle reports Ameriform Inc.
President Dan Harris appeared before the city commission in
Muskegon, Michigan, requesting property tax abatement for a
$2 million company investment in equipment and real property at
1770 E. Keating.
The expansion could create 15 new jobs, according to the
application.
Mr. Harris said his company and the entire group of Harris family
manufacturing companies in Muskegon, were in financial trouble as
the economy was in a tailspin at the beginning of the Great
Recession, according to Muskegon Chronicle.
Ameriform, KL Industries and Five Peaks Technology, founded by his
father, the late Kenneth Harris Sr., were not suffering from a
lack of sales but of "mismanagement," Mr. Harris, the report
notes. Muskegon Chronicle relates that the situation resulted in
the companies going into receivership, ordered by a Muskegon judge
in early 2009 as the company owed Huntington Bank more than $25
million at the time.
Harris and his brothers got to work and have pulled the companies
back from the brink, the report relates. They came out of
receivership last August, Mr. Harris said, the report adds.
Ameriform Inc. produces plastic sheeting that can be used for KL
Industries' paddle boats and outdoor recreation equipment or by
Five Peaks for portable toilets.
ARCHBROOK LAGUNA: Files for Chapter 11 to Sell Business
-------------------------------------------------------
ArchBrook Laguna Holdings LLC and certain of its affiliates filed
voluntary petitions for reorganization under chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 11-13292) on
July 8. The Company has filed a motion with the bankruptcy court
seeking authority to sell substantially all of their assets
pursuant to a bankruptcy auction. The Company will seek to have
the bankruptcy auction held on August 8, 2011.
ArchBrook is a procurement and distribution intermediary between
production companies and end retailers. It distributes consumer
electronics, computers and appliances to principal customers that
include Wal-Mart Stores Inc., Best Buy Co. and Costco Wholesale
Corp. ArchBrook disclosed assets of $246.2 million against debt
totaling $176.4 million as of March 31, 2011.
Concurrently with its chapter 11 filing, the Company has entered
into an agreement with GE Capital Commercial Services, Inc. to
provide the Company with a $50 million debtor-in-possession
financing facility. The Company will use its cash-on-hand and the
debtor-in-possession financing to maintain business-as-usual
during the restructuring process. The Company believes its current
and anticipated cash resources will be suitable to pay its
expenses and maintain its business operations until the close of
the Sale. Vendors and suppliers should see no change in normal
business operations during chapter 11.
The Company is being advised by Macquarie Capital (USA) Inc. with
respect to the sale process and by Hawkwood Consulting LLC, whose
founder Stephen J. Gawrylewski is Chief Restructuring Officer of
the Company.
"After careful consideration of all available alternatives, we
determined filing chapter 11 was a necessary and prudent step and
in the best interests of our creditors. Furthermore, all signs
indicate that an open sale process is the most value-maximizing
alternative in these circumstances, and we are hopeful that the
process will result in continued operation of the underlying
business under new ownership. Our operations will not be impacted
during chapter 11 and our customers will continue to receive the
highest quality service that they have come to expect from the
Company," said Daniel J. Boverman, Interim Chief Financial Officer
of ArchBrook and a Managing Director of Hawkwood. "We greatly
appreciate and recognize the support of our employees, customers,
vendors and strategic partners whose support is vital to our
success."
Stalking Horse
While the Debtors aim a quick sale of the business, no buyer is
yet under contract. While it engaged in a marketing process for
the assets starting May, and was in talks with 47 potential
bidders, it failed to sign a deal for a stalking horse bidder
before the Chapter 11 filing.
ArchBrook is asking the bankruptcy judge to hold a hearing
July 19 to approve auction and sale procedures.
If the court approves the proposed rules, the auction will be on
Aug. 8 and the hearing to approve the sale would be held Aug. 10.
Road to Bankruptcy
GE Capital Services Inc., Bank of America NA and PNC Bank NA are
owed $36.9 million on an asset-based revolving credit facility.
Unsecured creditors with the largest claims and the amounts
they are owed include Dell Inc., $9.8 million; Direct
Entertainment Media Group Inc., $8.5 million; Garmin Ltd.,
$5.7 million; Toshiba Corp., $5.3 million; Samsung Electronics
Co., $4.9 million; Hewlett-Packard Co., $4.9 million; and TomTom
Inc., $3.7 million.
Based in Carlstadt, New Jersey, ArchBrook said that a series of
events that effectively erased the remaining availability under
its prepetition credit facility, placed additional demands on the
Debtors' ability to manage cash flow properly, and ultimately
prompted the liquidity crisis that necessitated the Chapter 11
filing.
Achrbrook said that due to a supplier's failure to meet
advertising commitments, $13.1 million worth of inventory has now
aged out of inventories eligible for inclusion as collateral under
the prepetition credit agreement.
In the fourth quarter of 2010, the Debtors migrated to a new
platform and implemented the Oracle Financial System for its
distribution system at a cost of $15 million. The Debtors
encountered difficulties in meshing the new software with the
existing platform. This caused a delay in invoicing and
inaccuracies in tracking returns. The audit for 2010 hasn't been
completed because of accounting problems. A mistake in accounting
for receivables resulted in a loan larger than the lenders were
required to make and an ensuing default under the credit
agreement.
The delay in the audit was a contributing factor in the decision
by certain insurers to withdraw the Debtors' trade credit
insurance. This impacted the willingness of vendors to continue
to extend trade credit to the Debtors.
ArchBrook generated $808 million revenue in 2010 by delivering 6.8
million packages, of which 44% were computers.
$50-Mil. to Fund Case
The lenders will provide $50 million in secured financing for the
Chapter 11 case. The new loan will pay off the old loan.
The Debtors say the DIP financing will give them the opportunity
to maintain nearly normal business operations while they attempt
to sell their business or assets.
According to Chapter11Cases.com, the Chief Financial Officer of
ArchBrook Laguna Holdings said in a press release announcing the
filings that the Companies have determined an open sale process is
the most value-maximizing alternative in these circumstances. The
Companies are hopeful that the process will result in continued
operation of the underlying business under new ownership.
The companies are represented in the bankruptcy cases by, among
others, Akin Gump Strauss Hauer & Feld LLP as legal counsel,
Macquarie Capital (USA) Inc. with respect to the sale process and
by Hawkwood Consulting LLC, whose founder Stephen J. Gawrylewski
is Chief Restructuring Officer of the Company.
ARCHBROOK LAGUNA: Case Summary & Creditors List
-----------------------------------------------
Debtor: ArchBrook Laguna Holdings LLC
350 Starke Road, Suite 400
Carlstadt, NJ 07072
Bankruptcy Case No.: 11-13292
Affiliates that simultaneously sought Chapter 11 protection:
Debtor Case No.
------ --------
ArchBrook Laguna New York LLC 11-13290
ArchBrook Laguna LLC 11-13293
ArchBrook Laguna West LLC 11-13294
Expert Warehouse LLC 11-13295
Lehrhoff ABL LLC 11-13296
Chimerica Global Logistics LLC 11-13297
Chapter 11 Petition Date: July 8, 2011
Court: U.S. Bankruptcy Court
Southern District of New York (Manhattan)
Debtors' Counsel: Ira S. Dizengoff, Esq.
AKIN, GUMP, STRAUSS, HAUER & FELD, LLP
One Bryant Park
New York, NY 10036
Tel: (212) 872-1000
Fax: (212) 872-1002
E-mail: idizengoff@akingump.com
Debtors'
Financial
Advisor: MACQUARIE CAPITAL (USA) INC.
Debtors'
Crisis Manager: HAWKWOOD CONSULTING LLC
Debtors'
Consultants: PRICEWATERHOUSECOOPERS LLP
Debtors' Notice,
Claims, and
Balloting Agent: THE GARDEN CITY GROUP, INC.
Total Assets: $246.2 million as of March 31, 2011
Total Debts: $176.4 million as of March 31, 2011
The petitions were signed by Peter A. Handy, authorized person.
Consolidated List of 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Dell Marketing LP Trade Debt $9,763,350
One Dell Way
Round Rock, TX 78682
Direct Entertainment Media Group Trade Debt $8,448,363
Inc.
8280 Willow Oaks Corporate Drive, Suite 800
Fairfax, VA 22031
Garmin International Inc. Trade Debt $5,681,842
P.O. Box 843611
Kansas City, MO 64184
Toshiba America Information System Trade Debt $5,341,800
91865 Collections Center Drive
Chicago, IL 60693
Samsung Electronics America Trade Debt $4,919,706
105 Challenger Road
Ridgefield Park, NJ 07660
Hewlett-Packard US Operations Trade Debt $4,911,641
Building CCM3
MC CCM0301-050
10555 SH 349
Houston, TX 77070
Tomtom Inc. Trade Debt $3,747,046
150 Baker Avenue Extension
Concord, MA 1742
Acer America Trade Debt $2,992,557
333 West San Carlos Street, Suite 1500
San Jose, CA 95110
Toshiba Consumer Products Trade Debt $2,095,761
9740 Irvine Boulevard
Irvine, CA 92618
LG Electronics USA Inc. Trade Debt $1,780,419
910 Sylvan Avenue
Englewood Cliffs, NJ 07632
Lenovo Trade Debt $993,065
1009 Think Place
Building 1, 2nd Floor 2G2
Morrisville, NC 27560
Sharp Electronics Corp. Trade Debt $985,181
Sharp Plaza, P.O. Box 650
Mahwah, NJ 07495-1163
Panasonic/First Chicago National Trade Debt $946,188
5201 Tollview Drive E1B-9
Rolling Meadows, IL 60008
Philips Consumer Lifestyle Trade Debt $946,145
1600 Summer Street
P.O. Box 120015
Stamford, Connecticut 06905
DXG Technology USA Inc. Trade Debt $768,044
1001 Lawson Street
City Industry, CA 91748
Mitac Digital Corp. Trade Debt $724,754
960 Overland Court
San Dimas, CA 91773
YRC Trade Debt $702,106
P.O. Box 7914
Overland Park, KS 66207
Tongfang Global LLC Trade Debt $653,600
10909 Valley View Road
Eden Prairie, MN 55344
Sterling Commerce Trade Debt $651,109
4600 Lakehurst Court
P.O. Box 8000
Dublin, OH 43016
Hamilton Beach Brands Inc. Trade Debt $518,076
4421 Waterfront Drive
Glen Allen, VA 23060
Federal Express Freight East Trade Debt $512,487
Department CH
P.O. Box 10306
Palentine, IL 60055
Sharp Appliances Trade Debt $373,011
Shap Plaza, P.O. Box 650
Mahwah, NJ 07495-1163
McElroy, Deutsch, Mulvaney & Legal $321,655
Carpenter, LLP
100 Mulberry Street
Newark, NJ 07102-4079
Fuego North America LLC Trade Debt $315,388
1500 Sansome Street
Roundhouse One
San Francisco, CA 94111
Helen of Troy LP Trade Debt $298,950
#1 Helen of Troy Plaza
El Paso, TX 79912
Centon Electronics Inc. Trade Debt $273,112
27412 Aliso Viejo Parkway
Aliso Viejo, CA 92656
Jarden Consumer Solutions Trade Debt $272,237
2381 Executive Center Drive
Boca Raton, FL 33431
Manhattan Associates Trade Debt $196,019
EB Excalibur Trade Debt $175,418
Home Entertainment Source Trade Debt $171,231
ASARCO LLC: CNA Can't Shake Asarco Suit Over $33M Calif. Cleanup
----------------------------------------------------------------
Martin Bricketto at Bankruptcy Law360 reports that U.S. District
Judge William Alsup on Thursday refused to grant CNA Holdings
Inc.'s bid to dismiss a lawsuit that Asarco LLC brought seeking
contributions toward a $33 million settlement over a California
Superfund site that the mining company reached during its
bankruptcy proceeding.
Judge Alsup disagreed with CNA that the lawsuit could not proceed
without certain alleged current or past owners of the Selby
Smelter Site in Contra Costa County, Calif., being joined as
defendants, Law360 says.
About Asarco LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection (Bankr. S.D. Tex. Case
No. 05-21207) on Aug. 9, 2005. Attorneys at Baker Botts
L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented
the Debtor in its restructuring efforts.
On Dec. 9, 2009, Grupo Mexico, S.A.B., consummated the Chapter
11 plan that it sponsored for Asarco LLC. The Plan, which was
confirmed both by the bankruptcy and district courts, reintegrated
Asarco LLC back to parent Grupo Mexico concluding the four-year
Chapter 11 proceeding.
AUTO VEGA: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Autos Vega, Inc.
P.O. Box 4252
San Juan, PR 00936
Bankruptcy Case No.: 11-05773
Chapter 11 Petition Date: July 6, 2011
Court: United States Bankruptcy Court
District of Puerto Rico (Old San Juan)
Debtor's Counsel: Antonio A. Arias-Larcada, Esq.
McConnell Valdes
P.O. Box 364225
San Juan, PR 00936-4225
Tel: (787) 250-5604
Fax: (787) 759-2771
E-mail: aaa@mcvpr.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Ramon Vega Diaz, president.
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Miguel A. Marrero Suit- Unjustified $4,398,989
c/o LCDO Edgardo L. Dismissal
Rodriguez
P.O. Box 365061
San Juan, PR 00936 5061
Departamento De Hacienda Taxes $1,578,780
PR Bankruptcy Section
(424B), P.O. Box 9024140
San Juan, PR 00902 4140
Jason Jimenez Torres Suit- Tort Action $1,045,214
URB Velomar #187
Vega Alta, PR 00692
Noel Torres Lopez
c/o LCDA Miriam Gonzalez Suit- Tort Action $305,000
P.O. Box 9023998
San Juan, PR 00902 3998
Ford Motor Credit Co. Inventory Purchases $220,538
P.O. Box 364189 Parts
San Juan, PR 00936
Migdoel Rodriguez Suit - Tort Action $150,000
Mercado
El Nuevo Dia Advertising $32,796
Alcalde Auto Parts Inventory Purchases $31,424
Parts
Lorena Lyn Gual Administrative $30,947
Proceedings
Carmen Rios Rivera Administrative $25,810
Proceedings
PR Electric Power Electric Power $23,350
(PREPA) Aut Bankruptcy Services
Office
Internal Revenue Service Payroll Taxes $16,262
Witholdings
Federal Express Corp Freight Services $15,868
Caribbean Truck Inventory Purchases- $12,934
Bodies Corp Truck
The Parts House Inc. Inventory Purchases- $10,117
Parts
Auto Accesorios De Inventory Purchases- $10,091
Puerto Rico Parts
Dort Rothafel Administrative $10,000
Proceedings
Eric Valentin Rodriguez Administrative $8,000
Proceedings
BG Puerto Rico Inventory Purchases- $6,244
Parts
Burgos Tire Center Inventory Purchases- $5,715
Parts
BANNING LEWIS: Court Lifts Stay to Allow Dismissal of Action
------------------------------------------------------------
The Banning Lewis Ranch Management Company; Farallon BLR
Investors, LLC; and Greenfield BLR Partners, LP, the limited
partner of Greenfield BLR Manager, LLC sought and obtained an
order from the U.S. Bankruptcy Court for the District of Delaware
granting them relief from the automatic stay in order to allow
them to file a request to dismiss with prejudice a certain action
filed in the Superior Court of California.
The California Action was filed by BLR Management Co. in April
2009, in the Superior Court of California, County of Orange,
styled as Banning Lewis Ranch Management Company v. Greenfield BLR
Partners L.P. et al., Orange County Superior Court.
The California Action arose out of a dispute between the members
of the Debtors concerning alleged breaches of fiduciary duty and
the covenant of good faith and fair dealing regarding the Banning
Lewis Ranch development in Colorado Springs, Colorado.
The California Action was stayed with the Debtors filed voluntary
petitions for protection under Chapter 11 of the Bankruptcy Code.
About Banning Lewis
Banning Lewis Ranch Co. is the owner of the undeveloped portion of
a 21,000-acre ranch in Colorado Springs, Colo. Banning Lewis
Ranch is a master-planned community in Colorado Springs, Colorado.
The first section built, the 350-acre Northtree Village, opened in
September 2007 and will have 1,000 homes priced from the high
$100,000s to the mid-$300,000s.
Banning Lewis Ranch filed for Chapter 11 bankruptcy protection
from creditors (Bankr. D. Del. Case No. 10-13445) on Oct. 28,
2010. It estimated assets of $50 million to $100 million and
debts of $100 million to $500 million in its Chapter 11 petition.
An affiliate, Banning Lewis Ranch Development I & II, LLC, also
filed for Chapter 11 (Bankr. D. Del. Case No. 10-13446).
Kevin Scott Mann, Esq., at Cross & Simon, LLC, serves as counsel
to the Debtors. Edward A. Phillips of Eisner Amper LLP has been
retained as the Company's chief restructuring officer.
BARNES BAY: Court Approves Revised Disclosure Statement
-------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that a Delaware
bankruptcy judge on Wednesday approved a revised disclosure
statement filed by Barnes Bay Development Ltd., nearly a week
after disgruntled creditors forced the Caribbean resort owner to
overhaul the original statement.
Barnes Bay was forced to make changes to the disclosure statement
explaining its Chapter 11 plan after questions were raised at a
June 30 hearing over disparate treatment of similar unsecured
creditors, according to Law360.
About Barnes Bay
Beverly Hills, California-based Barnes Bay Development Ltd., owns
the Viceroy Anguilla Resort & Residences on the British West
Indies island of Anguilla. Barnes Bay and two affiliates filed
for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No.
11-10792) on March 17, 2011, to facilitate the sale of the resort.
Barnes Bay disclosed $3,331,282 in assets and $481,840,435 in
liabilities as of the Chapter 11 filing.
Akin Gump Straus Hauer & Feld LLP is the Debtors' bankruptcy
counsel, and Keithley Lake & Associates is the Debtors' special
Anguillan counsel. Kurtzman Carson Consultants LLC is the
Debtors' claims, noticing, solicitation and balloting agent.
The U.S. Trustee appointed five members to the official committee
of unsecured creditors in the Debtors' cases. Brown Rudnick LLP
serves as the Committee's co-counsel, and Womble Carlyle Sandridge
& Rice, PLLC, as its Delaware co-counsel. C.R. Hodge & Associates
is the Committee's foreign counsel. FTI Consulting, Inc.,
serves as the Committee's financial advisors.
BIOFUEL ENERGY: Seven Directors Elected at Annual Meeting
---------------------------------------------------------
BioFuel Energy Corp., on May 19, 2011, held its Annual Meeting of
Stockholders, at which seven were re-elected to the Company's
Board of Directors, namely: (1) Mark W. Wong, (2) Scott H. Pearce,
(3) Elizabeth K. Blake, (4) David Einhorn, (5) Richard I. Jaffee,
(6) John D. March and (7) Ernest J. Sampias.
About Biofuel Energy
Denver, Colo.-based BioFuel Energy Corp. (Nasdaq: BIOF)
-- http://www.bfenergy.com/-- aims to become a leading ethanol
producer in the United States by acquiring, developing, owning and
operating ethanol production facilities. It currently has two
115 million gallons per year ethanol plants in the Midwestern corn
belt.
The Company reported a net loss of $25.22 million on $453.41
million of net sales for the year ended Dec. 31, 2010, compared
with a net loss of $19.70 million on $415.51 million of net sales
during the prior year.
The Company's balance sheet at March 31, 2011, showed $320.82
million in total assets, $220.71 million in total liabilities and
$100.11 million in total equity.
Going Concern Doubt;
Bankruptcy Warning
Grant Thornton LLP, in Denver, did not issue a going concern
qualification after auditing the Company's financial statements
for the year ended Dec. 31, 2010.
As reported in the Troubled Company Reporter on March 31, 2010,
Grant Thornton LLP, in Denver, expressed substantial doubt about
the Company's ability to continue as a going concern, following
its 2009 results. The independent auditors noted that the Company
has experienced declining liquidity and has $16.5 million of
outstanding working capital loans that mature in September 2010.
In the Form 10-K for the year ended Dec. 31, 2010, the Company
noted that its ability to make payments on and refinance its $230
million senior debt facility -- of which $189.4 million was
outstanding as of Dec. 31, 2010 -- depends on its ability to
generate cash from operations. The Company noted that during its
first two full years' of operations, it has been unable to
consistently generate positive cash flow. In addition, it
continues to have, severely limited liquidity, with $7.4 million
of cash on hand as of Dec. 31, 2010.
"If we do not have sufficient cash flow to service our debt, we
would need to refinance all or part of our existing debt, sell
assets, borrow more money or raise additional capital, any or all
of which we may not be able to do on commercially reasonable terms
or at all. If we are unable to do so, we may be required to
curtail operations or cease operating altogether, and could be
forced to seek relief from creditors through a filing under the
U.S. Bankruptcy Code. Because the debt under our Senior Debt
Facility subjects substantially all of our assets to liens, there
may be no assets left for stockholders in the event of a
liquidation. In the event of a foreclosure on all or
substantially all of our assets, we may not be able to continue to
operate as a going concern."
BPP TEXAS: Court OKs Cash Collateral Access Until July 29
---------------------------------------------------------
On June 28, 2011, the U.S. Bankruptcy Court for the Eastern
District of Texas approved the stipulation of BPP Texas, LLC, et
al., and Citizens Bank of Pennsylvania extending through to and
including July 29, 2011, the Debtors' use of cash collateral.
Each and every provision, protection, and requirement of the Final
Order [Docket 108] will continue during the Extended Period,
including all replacement liens, claims, and other rights granted
to Citizens thereunder, and further including all reporting
requirements imposed hereby on the Debtors.
About BPP Texas
Pittsburgh, Pennsylvania-based BPP Texas, LLC, along with BPP
Illinois, LLC, BPP Iowa, LLC, BPP Michigan, LLC, BPP Minnesota,
LLC, and BPP Wisconsin, LLC, own and operate 22 hotels located in
Texas, Illinois, Iowa, Michigan, Minnesota, and Wisconsin.
BPP Texas and several affiliates filed for Chapter 11 bankruptcy
protection (Bankr. E.D. Tex. Lead Case No. 10-44378) on Dec. 21,
2010. Davor Rukavina, Esq., and Jonathan Lindley Howell, Esq., at
Munsch Hardt Kopf & Harr, P.C., serve as the Debtors' bankruptcy
counsel. BPP Texas estimated its assets at $1 million to
$10 million and debts at $50 million to $100 million. In its
schedules, BPP Texas disclosed $3,731,144 in assets and
$65,892,831 in liabilities as of the petition date.
Affiliates BPP Illinois, BPP Iowa, BPP Michigan, BPP Minnesota,
and BPP Wisconsin filed separate Chapter 11 bankruptcy petitions.
BPP Wisconsin estimated its assets at $10 million to $50 million
and debts at $50 million to $100 million.
BRIARWOOD CAPITAL: $4-Mil. Sale of Interests to Lennar Approved
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of California
approved the settlement agreement entered by Leslie T. Gladstone,
Chapter 11 trustee in the case of Briarwood Capital LLC, and the
retention of Gordon & Holmes as special litigation counsel.
The settlement agreement was entered among (a) the trustee,
(b) Lennar Corporation, Lennar Homes of California, Inc., (c) KBR
Group, LLC, (d) KRMW Real Estate Investment Group, LLC, and (e)
City National Bank, N.A., including the Gordon & Holmes Settlement
and Release Agreement between the trustee, Lennar, KBR, KRMW, CNB,
and Gordon & Holmes, Frederic Gordon, and Rhonda Holmes.
Pursuant to the settlement agreement, Lennar has agreed to
purchase the Briarwood bankruptcy estate's interests in HCC
Investors, LLC and Lennar Bridges for $4 million. In addition,
the Briarwood Trustee has agreed to dismiss the litigation matters
brought against Lennar with prejudice, in exchange for mutual
releases. The Briarwood Trustee believes that dismissal of the
various litigation matters is in the best interests of the
Briarwood bankruptcy estate and the creditors because:
a) Lennar has agreed to withdraw with prejudice its claims
against the Briarwood estate (totaling over $600 million);
b) the revelation of criminal activity relating to the
Florida Action and the Bridges Action has raised concerns
about the viability and appropriateness of the various
litigation matters going forward; and
c) in light of the criminal activity and plea agreement by
Barry Minkow, the Briarwood Trustee is now concerned that
Lennar may prevail in the Florida Action and obtain a
substantial monetary judgment against the Briarwood estate
if no global resolution is reached.
Finally, the settlement involves agreements with the Briarwood
bankruptcy estate's largest secured creditors (KBR, KRMW, and
CNB) to reduce their respective secured claims to general
unsecured claims, well as an agreement from Gordon & Holmes
pursuant to the Gordon & Holmes Agreement to waive any claim to
attorneys' fees and costs against the Briarwood and Marsch
bankruptcy estates.
About Nicolas Marsch, Briarwood and Colony
Based in Rancho Santa Fe, California, Briarwood Capital, LLC's
primary business prepetition was land acquisition and organizing
financing for real estate development. Briarwood filed for
Chapter 11 bankruptcy protection (Bankr. S.D. Calif. Case No. 10-
02677) on Feb. 23, 2010. In its schedules, the Debtor disclosed
$292,798,759 in assets and $18,563,641 in liabilities as of the
Petition Date.
Colony Properties International, LLC -- Colony I -- (Bankr. S.D.
Calif. Case No. 10-02937) and Colony Properties International II,
LLC -- Colony II -- (Bankr. S.D. Calif. Case No. 10-03361) also
filed for Chapter 11.
Rancho Santa Fe, California-based Nicolas Marsch, III, filed for
Chapter 11 bankruptcy protection on Feb. 25, 2010 (Bankr. S.D.
Calif. Case No. 10-02939). Mr. Marsch estimated assets at
$100 million to $500 million and debts at $10 million to
$50 million.
Mr. Marsch has a 100% membership interest in Briarwood, which he
valued at over $274 million. He also has a 100% membership
interest in Colony Properties. Mr. Marsch also asserts more than
$2 million in claims against Briarwood and is a guarantor of debt
owed by Briarwood and by to KBR Opportunity Fund II. He is also
the guarantor of Colony's debt to KBR. Colony asserts more than
$668,000 in claims against Mr. Marsch. Colony also asserts more
than $50,000 in claims against Briarwood.
The cases are separately administered. Jeffry A. Davis, Esq., at
Mintz Levin Cohn Ferris Glovsky & Popeo, represents the Debtors in
their restructuring efforts. In July 2010, the Court held that
Mintz Levin was ineligible to represent the estates of Mr. Marsch,
Briarwood and Colony Properties, or any two of them. Chapter 11
trustees have been appointed in each of the cases.
Richard M. Kipperman serves as the Chapter 11 trustee for Colony
Properties International, LLC and Colony Properties International
II, LLC; and Leslie T. Gladstone serves as the Chapter 11 trustee
for Briarwood.
BRIGHAM EXPLORATION: BlackRock Discloses 4.92% Equity Stake
-----------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, BlackRock, Inc., disclosed that it
beneficially owns 5,758,483 shares of common stock of Brigham
Exploration Company representing 4.92% of the shares outstanding.
As of as of May 2, 2011, there were 117,063,422 shares of common
stock outstanding. A full-text copy of the filing is available
for free at http://is.gd/t2U3X2
About Brigham Exploration
Austin, Texas-based Brigham Exploration Company (NASDAQ: BEXP)
-- http://www.bexp3d.com/-- is an independent exploration,
development and production company that utilizes advanced
exploration, drilling and completion technologies to
systematically explore for, develop and produce domestic onshore
oil and natural gas reserves. In late 2007, the majority of the
Company's drilling capital expenditures shifted from its
historically active areas in the Onshore Gulf Coast, the Anadarko
Basin and West Texas to the Williston Basin in North Dakota and
Montana, where the Company is currently targeting the Bakken,
Three Forks and Red River objectives.
The Company reported net income of $42.89 million on
$169.72 million of revenue for the year ended Dec. 31, 2010,
compared with a net loss of $122.99 million on $70.34 million of
revenue during the prior year.
The Company's balance sheet at March 31, 2011, showed
$1.16 billion in total assets, $565.38 million in total
liabilities, and $595.91 million in stockholders' equity.
* * *
As reported by the TCR on Feb. 18, 2011, Moody's Investors Service
upgraded Brigham Exploration Company's Corporate Family Rating to
B3 from Caa1 and the Probability of Default Rating to B3 from
Caa1. "The primary driver for the upgrade is Brigham's strong
reserve and production growth and significant financial
flexibility," said Francis J. Messina, Moody's Vice President.
"The B3 Corporate Family Rating is prospective and it incorporates
Moody's expectation that the company will significantly increase
proved developed reserves and production rates over the next two
years."
CAMPANA FAMILY: MORs Not Filed; U.S. Trustee Warns Dismissal
------------------------------------------------------------
Ilene J. Lashinsky, the U.S. Trustee for Region 14, notifies the
U.S. Bankruptcy Court for the District of Arizona that Campana
Family LLC is delinquent in filing in filing monthly financial
reports for the January, February, March, April, and May 2011
periods.
The U.S. Trustee says that the deficiencies must be complied no
later than July 20, 2011 or the U.S. Trustee may file a motion to
convert or dismiss the Chapter 11 case.
Scottsdale, Arizona-based Campana Family, LLC, is a real estate
developer in Arizona. The Company owns a partially completed
real estate subdivision in Kingman, Mohave County, Arizona known
as Castlerock Village, consisting of 75 improved residential lots.
It also owns 213 partially improved premilinary platted lots. The
Company owns 23 additional acres adjoining Castlerock Village,
part of which is zoned R-2 for multi-unit apartments, part as C-2
zoning for mini-storage and part as C-1 for commercial
development. The Company filed for Chapter 11 bankruptcy
protection (Bankr. D. Ariz. Case No. 11-00530) on Jan. 8, 2011.
The Hendrickson Law Firm, PLLC, represents the Debtor in its
restructuring effort. The Debtor disclosed $11,077,036 in assets
and $3,241,510 in liabilities as of the Chapter 11 filing.
CASA GRANDE: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Casa Grande Capital Group, LLC
7208 E. Cave Creek Drive, Suite A
Carefree, AZ 85377
Bankruptcy Case No.: 11-19376
Chapter 11 Petition Date: July 6, 2011
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Judge: Redfield T. Baum Sr.
Debtor's Counsel: John J. Hebert, Esq.
POLSINELLI SHUGHART, P.C.
One East Washington Street
CityScape Building, Suite 1200
Phoenix, AZ 85004
Tel: (602) 650-2011
Fax: (602) 391-2546
E-mail: jhebert@polsinelli.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Douglas A. Dragoo fro Pacific Southwest
Capital, LLC - manager.
The Debtor did not file its list of largest unsecured creditors
when it filed its petition.
CATHOLIC CHURCH: Milw. Has OK to Pay $311,000 to Abuse Survivors
----------------------------------------------------------------
Judge Susan V. Kelley, bankruptcy judge for the U.S. Bankruptcy
Court for the Eastern District of Wisconsin, issued a written
order allowing the Archdiocese of Milwaukee to pay $311,000 to
Abuse Survivors in 2011 pursuant to settlement agreements.
Payments to Abuse Survivors from the Archdiocese in 2011 are
potentially subject to recoupment, and in the event the Debtor
has insufficient funds to make comparable payments to similarly
situated Abuse Survivors who did not enter into Settlement
Agreements, the funds may be recouped.
Acceptance of payments from the Archdiocese will in no way
diminish the rights of Abuse Survivors to challenge the
enforceability or binding nature of the Settlement Agreements if
they decide to make the challenge.
Judge Kelley's Order is without prejudice to the Archdiocese's
right to ask the Court at a later date to pay Abuse Survivors
money owed to them for the years 2012 to 2015 or incorporate the
payments into a Chapter 11 plan of reorganization.
In addition, Judge Kelley authorized the Debtor to participate in
voluntary mediations with the two Abuse Survivors -- whose
identities are undisclosed -- and pay any costs incident thereto;
however, the Archdiocese may not resolve any monetary issues or
require releases to participate in mediation. The Archdiocese,
however, may pay for therapy and related expenses for the Two
Abuse Survivors.
* * *
In a separate order, Judge Kelley directed the Debtor to file
under seal a supplement to the Master Mailing List/Matrix and to
Schedule F of its Schedules of Assets and Liabilities, which
contain the names of Abuse Survivors.
The Debtor must also file under seal a supplement to its
Statement of Financial Affairs containing the amount of any
transfers within 90 days immediately preceding the Petition Date
and the names of Abuse Survivors who received the transfers.
Unless otherwise specifically ordered by the Court, access to any
documents filed under seal will be limited to the Debtor, the
Debtor's counsel, the U.S. Trustee's Office, counsel for the
Committee, and Court personnel. No other individuals, including
Committee members and their personal counsel, may be permitted
access to documents filed under seal.
If the Debtor or Debtor's counsel does not receive written notice
from an Abuse Survivor, its counsel, or its authorized
representative requesting broader notice, the Debtor will follow
this limited notice procedure: All Abuse Survivors will
automatically receive from Debtor's counsel these notices by
U.S. Mail:
a. notice of Chapter 11 filing;
b. notice of any motions to dismiss the Reorganization Case;
c. notice of claims bar dates;
d. notice of hearing on adequacy of disclosure statement;
e. the plan of reorganization and disclosure statement
solicitation package (including ballots);
f. notice of any special Section 341 type meeting of Abuse
Survivors scheduled by the U.S. Trustee in the
Reorganization Case (although the U.S. Trustee has the
discretion to serve the notices itself);
g. notices of motions under Section 363 of the Bankruptcy Code
relating to property worth more than $1 million or any
motion related to the buyback of insurance; and
h. notice of final applications for compensation by
professionals.
The Abuse Survivors will also receive notices of any other
pleadings for which the Court so orders. Instead of serving the
Abuse Survivors with the identical notices served on other
parties in the bankruptcy case, the Debtor may serve Abuse
Survivors with summary notices that focus on likely Abuse
Survivors' concerns, but each Summary Notice will contain the
caption of the corresponding General Notice and a link or a
website address where the Abuse Survivor can, without cost, view
the General Notice.
Any Abuse Survivor who does not wish to receive the Critical
Notices must make, or have her counsel or other authorized
representative make, that request to the Debtor's counsel in
writing. The Debtor will honor such written requests, except
that the following Critical Notices must be served on all Abuse
Survivors:
a. Notice of Chapter 11 filing;
b. Notice of any motions to dismiss the reorganization case;
c. Notice of the claims bar dates; and
d. The plan of reorganization and disclosure statement
solicitation package (including ballots).
All affidavits or certificates of service relating to the service
of any papers on Abuse Survivors will state that the papers were
served upon the service list containing the names and addresses
of Abuse Survivors or their representatives. The Survivor
Service List will not be attached to any affidavit or certificate
of service.
The Debtor or its counsel will file the Survivor Service List
with the Court, under seal, and provide that Survivor Service
List only to counsel for the Committee and to the U.S. Trustee's
Office. No other persons may have access to the Survivor Service
List.
The Debtor or its counsel will update the Survivor Service List
as necessary. Promptly upon updating the Survivor Service List,
the Debtor or its counsel will file the update with the Court,
under seal, and provide the updated Survivor Service List to
counsel for the Committee and to the U.S. Trustee's Office.
The Debtor or its counsel, counsel for the Committee, and the
U.S. Trustee are each responsible for filing an affidavit or
certificate of service relating to the service of any papers they
serve on Abuse Survivors.
If an Abuse Survivor, its counsel, or its authorized
representative asks in writing to receive service in a different
fashion, the Debtor, its counsel, counsel to the Committee, and
the U.S. Trustee's Office will make reasonable attempts to honor
that request.
Any Abuse Survivor who wishes to receive all filings in the
Debtor's Reorganization Case but wants to have her identity
remain confidential may contact counsel for the Debtor (or have
her counsel or authorized representative do so) to arrange for
notice in any manner that is acceptable to the Abuse Survivor and
practicable for the party serving notice. The Debtor or its
counsel will specify that manner of notice on the Survivor
Service List so that the requests are clear to the parties in
interest, which may utilize the Survivor Service List.
Upon request to the Court, the U.S. Trustee may receive copies of
any Abuse Survivors' confidential Proof of Claim form. Because
the employees of the Office of the United States Trustee are not
signing a confidentiality agreement, they are ordered to keep
Abuse Survivor Proofs of Claim which come into their possession
confidential and, in connection with any Freedom of Information
Act request, to seek approval of the Court before complying, in
whole or in part, with any such request.
Notwithstanding the foregoing and unless the Debtor receives a
written request to the contrary, if an Abuse Survivor is
represented by counsel, the Debtor may serve all notices that
otherwise would have been served on the Abuse Survivor instead by
serving that Abuse Survivor's counsel.
The notice of Chapter 11 filing will be available on the
Archdiocese's Web site and the Web site maintained by Kurtzman
Carson Consultants LLC at http://www.kccllc.net/ArchMil
About the Diocese of Milwaukee
The Diocese of Milwaukee was established on Nov. 28, 1843, and
was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius
IX. The region served by the Archdiocese consists of 4,758 square
miles in southeast Wisconsin which includes counties Dodge, Fond
du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth,
Washington and Waukesha. There are 657,519 registered Catholics
in the Region.
The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for
Chapter 11 bankruptcy protection (Bankr. E.D. Wisc. Case No.
11-20059) on Jan. 4, 2011, to address claims over sexual abuse
by priests on minors.
The Archdiocese became at least the eighth Roman Catholic diocese
in the U.S. to file for bankruptcy to settle claims from current
and former parishioners who say they were sexually molested by
priests.
Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in
Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The
Official Committee of Unsecured Creditors in the bankruptcy case
has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and
Howard, Solochek & Weber, S.C., as its local counsel.
The Archdiocese estimated assets and debts of $10 million to
$50 million in its Chapter 11 petition.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
CATHOLIC CHURCH: Wilmington Plan Gets OK from Creditors
-------------------------------------------------------
The Garden City Group, Inc., submitted to the U.S. Bankruptcy
Court for the District of Delaware on July 6, 2011, the voting
and tabulation results in connection with the Second Amended
Chapter 11 Plan of Reorganization of the Catholic Diocese of
Wilmington, Inc., dated May 23, 2011.
As previously reported, the Plan provides for alternative
outcomes depending on the Class 3A (Survivor Claims) vote. The
"Settlement Plan" alternative provides for the creation of a
settlement trust for the benefit of survivor claims, to be funded
with $77.425 million contributed by or on behalf of Non-Debtor
Catholic Entities (approximately $62 million) and Settling
Insurers (approximately $15.4 million), made possible by a
series of interrelated settlements.
Pursuant to the declaration of Jeffrey S. Stein, Garden City's
vice president, 99.35% of holders of Class 3A Claims voted to
accept the Plan as a Settlement Plan. Accordingly, the
Confirmation Hearing scheduled for today, at 10:00 a.m., will
proceed solely on confirming the Plan as a Settlement Plan.
The Voting Classes are:
* Class 3A: Survivor Claims;
* Class 3B: Lay Pension Claims;
* Class 3C: DEDA Bond Transaction Claims;
* Class 3D: Clergy Pension Claims;
* Class 3E: Gift Annuity Claims; and
* Class 3F: Other Unsecured Claims.
The Class 3C Claims voted in favor of the Plan as a Settlement
Plan, and Classes 3D, 3E and 3F are deemed to accept by virtue of
their non-impairment. Class 3B did not accept the Plan as a
Settlement Plan (though the Debtor and the Lay Employees
Committee have resolved the Lay Employee Committee's objections
to the Plan), and Class 4 is deemed to reject.
The results of the tabulation of valid ballots are:
Class Accept Reject
----- ----------------- -----------------
Votes Amount Votes Amount
----- ------ ----- ------
3A Settlement 150 $150 1 $1
Plan (99.34%) (99.34%) (0.66%) (0.66%)
3A CDOW-Only 2 $2 143 $143
Plan (1.38%) (1.38%) (98.62%) (98.62%)
3B Settlement 417 $417 344 $344
Plan (54.80%) (54.80%) (45.20%) (45.20%)
3B CDOW-Only 572 $572 178 $178
Plan (76.27%) (76.27%) (23.73%) (23.73%)
3C Settlement 2 $22,427,035 0 $0
Plan (100%) (100%) (0%) (0%)
3C CDOW-Only 2 $22,427,035 0 $0
Plan (100%) (100%) (0%) (0%)
3D 23 $23 0 $0
(100%) (100%) (0%) (0%)
3E 0 $0 0 $0
(0%) (0%) (0%) (0%)
3F 345 $59,701,691 66 $38,950
(83.94%) (99.93%) (16.06%) (0.07%)
The detail report of the voting results is available for free at:
http://bankrupt.com/misc/WChrchDtlRepOfVotingResults.pdf
Plan Confirmation Objections
These parties filed objections to confirmation of Diocese's
Chapter 11 Plan of Reorganization:
* the Unofficial Committee of State Court Abuse Survivors;
* Charles Wiggins;
* the Premonstratensian Fathers;
* Nobertine Fathers, Inc.;
* Certain Underwriters at Lloyd's, London; and
* Joseph Curry.
A. Unofficial Committee
The Unofficial Committee argues that the Plan contains a
provision that the Diocese has "sneaked in" that would bar the
payment of settlement funds to Abuse Survivors until all
potential appeals are resolved by the appellate courts, which is
a direct violation of a certain settlement agreement that the
Diocese entered into with the Abuse Survivors on February 2,
2011.
The terms of that Settlement Agreement are reflected in a term
sheet which provides that the settlement funds would be paid
over, for the benefit of the Abuse Survivors, no later than 60
days after the Court's confirmation of the Plan. The Unofficial
Committee, however, points out that certain provisions in the
Plan delays payment until all appeals to the district court, the
Third Circuit, and the Supreme Court are resolved.
"This will take years and in the interim, more of the abuse
survivors will die, many will continue to suffer and all will be
unable to try to start the long, hard road towards healing,
forgiveness and finding peace," Thomas S. Neuberger, Esq., at the
Neuberger Firm P.A., in Wilmington, Delaware says.
In addition, Mr. Neuberger argues that there are several
professionals necessary to effect the terms of the settlement
agreement between the abuse survivors and the Diocese. He notes
that the Plan appears to indicate that the trustee and claims
reviewer are to be paid from the Settlement Trust.
"That such an expense was to be borne by the Settlement Trust and
the abuse survivors was never mutually agreed and instead
violates the agreement," Mr. Neuberger further argues.
B. Charles Wiggins
Charles Wiggins, a priest identified by the Diocese as a
suspected child abuser, argues that public disclosure of certain
information would violate his right to privacy.
The Plan requires church officials to release internal documents,
including personnel files of accused abusers, detailing how the
diocese handled pedophile priests.
Mr. Wiggins is concerned that the Plan gives committee members
the ability to give his entire personnel file to anyone or to
publicly disclose its contents. He argues that the provision
violates his rights, as well as overbroad and unnecessary.
Mr. Wiggins was removed from active ministry in 2003 after
allegations of improper conduct with children, which he claims
involved foot massages. But the diocese included him in a 2006
list of 20 diocesan priests with credible or substantiated
complaints of child sexual abuse, according to Randal Chase at
delmarvanow.com.
Mr. Wiggins denies being an abuser and says church officials in
Rome have directed that he be reinstated to active ministry,
notes the report.
Mr. Wiggins is a co-defendant with the Diocese and St. Mark's
High School in a child sexual abuse action pending in the
Superior Court.
C. Premonstratensian Fathers and Nobertine Fathers
The Premonstratensian Fathers and the Nobertine Fathers are
defined in the Plan as Religious Orders.
The Fathers argue that while taking care to preserve the proposed
Settlement Trust's rights to contribution from Religious Orders,
the Plan fails to acknowledge that the extinguishment of
Religious Order contribution claims against certain protected
parties will not adversely affect the setoff rights of the
Fathers under the Delaware Uniform Contribution Among Tortfeasors
Law.
James S. Yoder, Esq., at White and Williams LLP, in Wilmington,
Delaware, asserts that the "defect" in the Plan can be easily
remedied by the inclusion of a neutrality provision expressly
articulating that the Plan does not affect the contribution
setoff rights of any person deemed liable in a non-bankruptcy
forum.
The Diocese and the Premonstratensian Fathers are defendants in a
tort action in the Superior Court of Delaware in and for Kent
County styled as Jane Stoe #1, v. The Daughters of Charity of St.
Vincent De Paul, Northeast Province, et al.
D. Lloyd's Underwriters
The Underwriters specifically objects to Section 5.1(b) of the
Plan, which sets, generally, the contributions by settling
insurers pursuant to their settlement agreements.
Richard W. Riley, Esq., at Duane Morris LLP, in Wilmington,
Delaware, points out that the final sentence of Section 5.1(b)
states: "As additional consideration for, and expressly
conditioned upon, clauses (i)-(iii) of the preceding sentence,
and subject to the occurrence of the Effective Date, each of the
Settling Insurers shall assign to the Settlement Trust all right,
title and interest in and to any and all Order/Perpetrator
Indemnification Claims."
Mr. Riley argues that the Final Sentence does not reflect the
agreement between the Underwriters, the Diocese and the Non-
Debtor Catholic Entities. He asserts that the Underwriters have
not agreed to make the assignment, but will continue to attempt
to resolve the issue with the Diocese.
"Such requirement is unfair, inequitable, outside the scope of
the agreement, and not permitted under either the Bankruptcy Code
or applicable state law," Mr. Riley says.
E. Joseph Curry
Mr. Curry is the holder of an allowed general unsecured survivor
claim.
On behalf of Mr. Curry, Joseph W. Benson, Esq., in Wilmington,
Delaware, argues that the Plan cannot be confirmed as it unfairly
treats Mr. Curry's claim under Class 3A and extinguishes Mr.
Curry's rights under a stipulated final judgment in his favor
against St. Dennis Roman Catholic Church of Maryland, a non-
Debtor entity.
A tentative settlement was previously reached by the Parties in
late December 2011, whereby Mr. Curry's claim against St. Dennis
would be liquidated at $1.7 million, and a judgment entered on
the records of the Superior Court of Delaware, transferable to
the trial Court of the applicable County in the State of
Maryland.
The stipulated judgment would be a final judgment and encumber
all real assets of St. Dennis Roman Catholic Church. The initial
settlement was to be fully funded by the liability insurance
carrier for St. Dennis Roman Catholic Church, a co-insured with
the Diocese. A hearing on January 3 and 4, 2011, was held to
determine whether the insurance policy was so intertwined as an
asset of the Diocese's estate that it could not be utilized to
satisfy the judgment. The Court found that the insurance policy
was an asset of the estate, and thus, the carriers could not pay
the agreed to judgment.
As a result of the denial of funding by the insurance carriers, a
new settlement agreement was entered into on January 4, 2011.
Pursuant to the January 4 Settlement, a judgment was entered
against St. Dennis for $1.7 million. A condition of the judgment
was an initial payment to Mr. Curry, which left a balance of
$1,629,763. The judgment was entered as a final judgment order
in the State of Delaware and transferred to the Court in the
State of Maryland to become a lien against real estate and assets
of St. Dennis. The transfer of the judgment was accomplished in
January 2011.
"Mr. Curry agreed to forego execution on the judgment until the
[Diocese's] Plan of reorganization and a distribution pursuant to
and from a Trust agreed to by state counsel had been fully
depleted," Mr. Benson tells the Court. He adds that "if
distribution was less than $1,629,763, [Mr. Curry] then could
enforce the judgment against St. Dennis to achieve his full
settlement value of $1.7 million."
Mr. Benson contends that the Diocese is seeking to abrogate the
agreement that the Parties entered into through the Plan by
releasing the Diocese, its affiliates, including parishes, and
their officers and employees, from liability for all claims
asserted against them under the Child's Victim's Act. He notes
that there are 57 parishes, all non-Debtor entities, and several
other non-Debtor entities that seek a release from all claims
being made by creditors in Class 3A.
An exhibit to the Disclosure Statement indicates which Parishes
were contributors to a certain pooled investment. St. Dennis is
not a contributor to the pooled investment fund. Another exhibit
shows the contributions of non-Debtor Catholic entities to fund
the Plan. In the list of non-Debtor entities contributing to the
Plan, several parishes make contributions, but St. Dennis does
not make a contribution.
Mr. Benson notes that Mr. Curry does not have a problem with
releasing insurance carriers as long as the Court continues to
find they are assets of the Debtor's estate.
The total contributions of the parishes are just in excess of $2
million. Mr. Benson says that the amount is not an insubstantial
contribution by the few parishes. However, it is rather
insubstantial when compared to the $77 million being disbursed.
Mr. Benson argues that retaining Mr. Curry's judgment against St.
Dennis, a non-contributing entity does not impact the funding of
the Plan, the implementation of the Plan, or the settlement of
all abuse survivor claims against the Debtor and its insurance
carriers.
Mr. Benson also notes that in January 2011, when the judgment
would have had to be approved by the bishop of the Diocese, it
was already clear to the Bishop that he would have wished to
include all of its non-Debtor entities within the channeling
injunction.
"Yet knowing this fact the Bishop approved these liens,
encumbrances of the property of the parish and the payment of
$70,000 to Mr. Curry," he asserts. He adds that "this money had
to come from the parish because this Court entered an order that
no funds could be taken from the insurance policies of the
Diocese where it was co-insured with St. Dennis and the Debtor
made no request to spend any funds from its holdings for the use
of St. Dennis."
Accordingly, Mr. Curry urges that the Diocese have "unclean
hands" in attempting to release St. Dennis from a judgment he had
to agree to when knowing release of all Parishes was the Debtor's
intent.
Mr. Benson further contends that the Bishop's actions of
approving a lien whose final payment was to be the responsibility
of St. Dennis and simultaneously depriving Mr. Curry of his right
through the Debtor is a fraud on Mr. Curry, and should not be
allowed. He notes that the actions are attributable to the
Bishop in his dual capacity with the Parish and the Diocese.
"He should not be allowed based on this duplicity to ask this
Court for injunctive relief," Mr. Benson asserts.
Wilmington Settles Lay Committee's Plan Objections
The Official Committee of Lay Employees reached a settlement with
the Diocese regarding their contemplated objections to
confirmation of the Plan.
The main term point of the settlement with the Lay Employees
Committee is that if the Plan is confirmed as a Settlement Plan:
-- then in addition to the treatment of Class 3B Claims, the
Lay Pension Plan Trust will receive a fully-secured,
unsubordinated promissory note for $15,000,000. The
promissory note will be payable, without interest, upon
demand in the event the Lay Pension Plan Trust has
insufficient assets to make benefit payments when due under
the Lay Pension Plan; and
-- the Lay Pension Plan Reaffirmation Agreement will contain
these terms, which will supersede the terms set in the
Plan:
1. no further benefits under the Lay Pension Plan will
accrue as of December 31, 2011, and salary increases
after the Freeze Date will not be considered for
purposes of calculating the benefit payable under the
Lay Pension Plan;
2. participants in the Lay Pension Plan who have accrued,
but unvested benefits as of the Freeze Date will be
permitted to vest upon the satisfaction of the ordinary
conditions for vesting; and
3. the Reorganized Debtor's obligation to provide benefits
under the Lay Pension Plan will not be limited to the
amounts of benefits that are funded.
In addition, the Lay Employee Settlement provides that:
-- the Reorganized Debtor will fully fund the Lay Pension Plan
on an actuarial basis by June 30, 2060;
-- no later than December 31, 2011, the Reorganized Debtor
will contribute additional cash amounting $5,000,000 to the
Lay Pension Plan Trust;
-- no later than June 30, 2013, the Reorganized Debtor will
contribute not less than $2,000,000 to the Lay Pension Plan
Trust;
-- no later than June 30, 2014, the Reorganized Debtor will
contribute to the Lay Pension Plan Trust additional cash
amounting not less than $2,100,000;
-- no later than June 30, 2015, the Reorganized Debtor will
contribute $2,200,000 to the Lay Pension Plan Trust;
-- the Reorganized Debtor will contribute to the Lay Pension
Plan Trust cash proceeds from a capital campaign to be
conducted by the Diocese no later than December 31, 2015,
amounting $5,000,000 no later than December 31, 2016, and
an additional $5,000,000 no later than December 31, 2017;
and
-- for fiscal years 2016 and later, the term "Baseline
Contribution" will refer to $2,200,000 plus 2.5% interest
for each fiscal year after 2016. Beginning in fiscal year
2016, the Reorganized Debtor will make annual contributions
to the Lay Pension Plan Trust equal to the lesser of (i)
the Baseline Contribution and (ii) the amount recommended
by the Lay Pension Plan Advisory Committee based on an
amortization schedule that assumes full funding of the Lay
Pension Plan on an actuarial basis as of June 30, 2060.
The Lay Employee Committee says that its agreement will be the
subject of various revisions to the Plan as well as a
Reaffirmation Agreement and certain other agreements currently
being drafted and negotiated by the Lay Employee Committee and
the Diocese.
The Lay Employee Settlement does not require additional
disclosure or re-solicitation of creditors.
Until the documents relating to the settlement are completed and
filed with the Court, the Lay Committee reserves all rights to
object to the Plan.
The term sheet of the settlement is available for free at:
http://bankrupt.com/misc/WChrchLayTrmSht.pdf
Creditors' Committee: Concerned on Clergy Pension
In a separate filing, the Official Committee of Unsecured
Creditors notes that it has reached a settlement with the
Diocese. However, despite the settlement it entered into with
the Debtor, it is deeply offended by the Plan's treatment of the
Clergy Pension Claims or Other Unsecured Claims asserted by
anyone who is responsible for abuse.
Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in
Wilmington, Delaware, notes that under the Plan, a person
responsible for the sexual abuse of children will enjoy the full
benefits of a claim for pensions, sustenance or medical coverage;
even those people who the Diocese admits are admitted,
substantiated or credibly accused abusers.
"These people have destroyed the lives of countless men and
women. The Debtor's willingness to commit funds to such people
flies in the face of its professed desire to promote healing and
reconciliation for the abused. This issue is not about money --
it is about accountability and responsibility. The Debtor's
'fresh start' is sullied by its renewed commitments to these
abusers," Ms. Jones says.
Diocese Not Current on Payments
Pachulski Stang Ziehl & Jones LLP and Morgan, Lewis & Bockius LLP
tells the Court that the Diocese is not current on making the
outstanding payments that are due and owing to the Firms pursuant
to the terms of the Court's order establishing procedures for
interim compensation and reimbursement of expenses.
Greenberg Traurig LLP, the Lay Employee Committee's former
counsel, likewise says that the Diocese is not current on making
outstanding payments.
Diocese Responds to Objections
On behalf of the Diocese, James L. Patton, Esq., at Young Conaway
Stargatt & Taylor LLP, in Wilmington, Delaware, tells the Court
that the Confirmation Objections present narrow issues and are
capable of being resolved by the addition of language to the
confirmation order.
Specifically, Mr. Patton says that Mr. Curry's objection can be
resolved very easily by inclusion of language in the Confirmation
Order. He adds that to the extent the Confirmation Order is not
amended to resolve Mr. Curry's objection, the Diocese will make a
requisite evidentiary showing at the Confirmation Hearing in
support of the proposed channeling of Mr. Curry's claim.
However, with regard to the Unofficial Committee's objection,
Mr. Patton argues that the Plan complies fully with the
February 2 Settlement Term Sheet.
Mr. Patton says that the Unofficial Committee is concerned that
distributions from the Settlement Trust to holders of survivor
claims would be delayed pending the occurrence of the effective
date.
Mr. Patton explains that the timing of distributions from the
Settlement Trust was not addressed in the Settlement Term Sheet
but even if the Settlement Term Sheet had required that
distributions from the Settlement Trust commence within 60 days
after confirmation, the mere possibility that distributions might
not occur as required by the Settlement Term Sheet would not
constitute a present material breach by the Debtor.
"The Unofficial Committee persists in asserting -- with no
explanation of or citation to the Plan whatsoever in its six-page
argument on this point -- that the Debtor now seeks to
indefinitely delay payment of the funds until after all appeals
to the District Court, the Third Circuit and the Supreme Court
are resolved," Mr. Patton argues.
With regard to the Fathers' objection, Mr. Patton points out that
the Plan does not extinguish the alleged contribution claims of
the Fathers against the Debtor or the Protected Parties. He
notes that the Diocese is agreeable to the proposed language and
it will be included in the proposed Confirmation Order.
For the Creditors Committee's response, Mr. Patton contends that
the Creditors Committee appears to confuse "non-impairment" of a
class of claims with "allowance" of a given claim within the
class. He says that the Diocese does not acknowledge the
existence or validity of any "claims" for sustenance or medical
coverage, because sustenance and charity are based solely in
Canon Law and do not give rise to a "right to payment" under
secular law.
With regard to Lloyd's Underwriters' objection, Mr. Patton says
that while the Diocese does not necessarily agree with the
objection, the Diocese is willing to amend the Plan to remove the
requirement of Settling Insurers' assignment of Order/Perpetrator
Indemnification Claims to the Settlement Trust, which is an
immaterial modification to the Plan.
A table of the Diocese's responses is available for free at:
http://bankrupt.com/misc/WChrchObjRspTable.pdf
Settlement Plan
The Catholic Diocese of Wilmington and the holders of Class 3A
(Survivor Claims) claims under the Plan stipulate that the Plan is
accepted as a "Settlement Plan," as the term is defined in the
Plan.
In addition, the Parties agree that "holders of Class 3A Claims
will not prejudice any objection to the Plan by such holder".
About the Diocese of Wilmington
The Diocese of Wilmington covers Delaware and the Eastern Shore
of Maryland and serves about 230,000 Catholics. The Delaware
diocese is the seventh Roman Catholic diocese to file for Chapter
11 protection to deal with lawsuits for sexual abuse. Previous
filings were by the dioceses in Spokane, Washington; Portland,
Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and
San Diego, California.
The Diocese filed for Chapter 11 protection (Bankr. D.
Del. Case No. 09-13560) on Oct. 18, 2009. Attorneys at Young
Conaway Stargatt & Taylor, LLP, serve as counsel to the Diocese.
The Ramaekers Group, LLC, is the financial advisor. The petition
says assets range $50 million to $100 million while debts are
between $100 million to $500 million.
The bankruptcy filing automatically stayed eight consecutive abuse
trials scheduled in Delaware scheduled to begin Oct. 19, 2009.
There were 131 cases filed against the Diocese, with 30 scheduled
for trial, as of the bankruptcy filing.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
CATHOLIC CHURCH: Wilm. Abuse Survivors Want Deal Honored
--------------------------------------------------------
In a follow up letter filed by Thomas S. Neuberger, Esq., counsel
to the Unofficial Committee of State Court Abuse Survivors, Mr.
Neuberger tells the U.S. Bankruptcy Court for the District of
Delaware that the Catholic Diocese of Wilmington, Inc., has
reached an agreement with the Official Committee of Lay
Employees. However, he says that the Diocese continues to refuse
to honor the February 2, 2011 settlement term sheet with the
Abuse Survivors because of a dispute with the Allied Irish Bank
and its possible objection to the treatment of its claim under
the Diocese's proposed Chapter 11 Plan of Reorganization.
"The Abuse Survivors understand that the dispute with Allied
Irish Bank is only a matter of a couple of million dollars, a
small percentage of the total funds going to the Abuse Survivors
and the Lay Employees. Yet the Diocese will not waive its
belated wish to require a final non-appealable order before
funding and distributing the funds to the Abuse Survivors,"
Mr. Neuberger asserts.
He further argues that the Diocese's refusal to honor the
settlement term sheet is a material breach of the Diocese's
postpetition settlement agreement with the Abuse Survivors.
For these reasons, Mr. Neuberger asks the Court for a meeting to
try and end the dispute and avoid his clients voting against the
Plan. He asserts that it is extremely important to have the
meeting with the Court to attempt to reach closure for and begin
the healing process of the persons whose undisputed abuse claims
precipitated the bankruptcy.
About the Diocese of Wilmington
The Diocese of Wilmington covers Delaware and the Eastern Shore
of Maryland and serves about 230,000 Catholics. The Delaware
diocese is the seventh Roman Catholic diocese to file for Chapter
11 protection to deal with lawsuits for sexual abuse. Previous
filings were by the dioceses in Spokane, Washington; Portland,
Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and
San Diego, California.
The Diocese filed for Chapter 11 protection (Bankr. D.
Del. Case No. 09-13560) on Oct. 18, 2009. Attorneys at Young
Conaway Stargatt & Taylor, LLP, serve as counsel to the Diocese.
The Ramaekers Group, LLC, is the financial advisor. The petition
says assets range $50 million to $100 million while debts are
between $100 million to $500 million.
The bankruptcy filing automatically stayed eight consecutive abuse
trials scheduled in Delaware scheduled to begin Oct. 19, 2009.
There were 131 cases filed against the Diocese, with 30 scheduled
for trial, as of the bankruptcy filing.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
CEDAR PROFESSIONAL: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: Cedar Professional Center LLC
22725 44th Avenue West, Suite 101
Mountlake Terrace, WA 98043
Bankruptcy Case No.: 11-18127
Chapter 11 Petition Date: July 7, 2011
Court: U.S. Bankruptcy Court
Western District of Washington (Seattle)
Judge: Timothy W. Dore
Debtor's Counsel: Craig S. Sternberg, Esq.
STERNBERG THOMSON OKRENT & SCHER PLLC
500 Union Street, Suite 500
Seattle, WA 98101
Tel: (206) 386-5438
E-mail: craig@stoslaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Mariann G. Danard, managing member.
CITY MARKET: Sent to Receivership; Foreclosure Sale in August
-------------------------------------------------------------
flaglerlive.com reports that developer Bhagwan Asnani's hold on
City Market Place is coming to a close. A Flagler County, Florida
Circuit Court judge on June 1 granted a foreclosure order on the
entire property, according to the report.
A public sale of the property is set for August, at which time it
will go to the highest bidder.
The report notes that the changes won't affect tenants: the
property may be changing hands, but it's not going anywhere. The
report relates that Palm Coast's plans to build a $10 million city
hall of its own are no longer a priority, with public opposition
weighing heavily against the project and compelling the city to
stick with its current arrangements, at least for now.
Mr. Asnani defaulted on a $9.4 million loan from Branch Bank and
Trust Company (BB&T) in January 2009, flaglerlive.com recalls.
Mr. Asnani has since battled foreclosure, arguing that he had
built two of the four buildings with his own money and attempting
to exclude them from the foreclosure order, flaglerlive.com says.
The report, citing court papers, relays that Mr. Asnani claimed
BB&T improperly took the two buildings as collateral after the
bank extended him an additional $3 million loan to finish the two
other buildings.
Orlando-based Asset Preservation group was appointed receiver, and
on July 5 distributed letters to every tenant in the complex,
saying it would manage the property and take all rental payments
due beginning July 5, the report adds.
City Market Place is the 167,000 square-foot, four-building
commercial development on Cypress Point Parkway that's been home
to Palm Coast's city government since November 2008.
CORROZI-FOUNTAINVIEW: Court Authorizes Condominium Units Sale
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Corrozi-Fountainview, LLC to conduct sales of the condominium
units free and clear of liens, claims and encumbrances.
As reported in the Troubled Company Reporter on May 26, 2011, the
Debtor will sell its condominium units and to use the proceeds
from the sale to paydown the DIP financing facility the Debtor
intends to obtain.
Out of abundance of caution, and maintain transparency, the Debtor
sought permission to sell the condominium units.
In a separate motion, the Debtor asks Court approval on the
proposed DIP financing facility.
The Debtor's real estate in Newark, Delaware was divided into two
construction projects. One involves the erection of three
condominium buildings, each containing 64 units. The primary
secured lender on the project is PNC Bank, N.A. Two of the
condominium buildings have been completed and approximately 100 of
the units have been sold. The third condominium building is about
40% complete. Construction was slowed to a standstill when PNC
refused to fund further draws on its construction loan. The
second project involves the construction of 25 townhomes. The
primary secured lender for the project is Artisan's Bank. The
relief of stay was lifted on Aug. 20, 2010.
The Debtor will pay, at closing and from the proceeds of the sale
of each unit, contractors, who have the ability to assert a
mechanic's lien claim against the unit. RSSIAM LLC, a contractor
owned and operated by the Debtor's members, will receive 8.5% of
the sale proceeds.
The Debtor is also authorized and empowered, in its discretion,
to, among other things:
-- honor its pre- and post-petition sales contracts with buyers
and to close on the sales of units in the ordinary course of
business;
-- deliver deeds, bills of sale, assignments, releases, and any
other such instruments or documents that may be necessary or
requested by the buyers; and
-- honor deposits made pursuant to prepetition sales contracts
or the Debtor's past practices, regardless whether such
deposits are held in escrow.
Additionally, the Debtor is authorized and required to pay, at
closing and out of of the proceeds of each sale of a unit,
transaction cost not to exceed 8.5% of the gross sales price of
the unit being conveyed.
The Debtor's authority to close sale of units and take the other
actions authorized will expire automatically and without further
order of the Court on Dec. 31, 2011, provided that the extension
date may be extended on motion and after notice is given to
parties-in-interest.
About Corrozi-Fountainview
Wilmington, Delaware-based Corrozi-Fountainview, LLC, a single
asset real estate, filed for Chapter 11 protection (Bankr. D. Del.
Case No. 10-11090) on March 31, 2010. The Debtor disclosed
$15,962,545 in assets and $15,292,278 in liabilities as of the
Chapter 11 filing.
CORUS BANKSHARES: Mulls on a Plan to Exit Bankruptcy
----------------------------------------------------
American Bankruptcy Institute reports that after its liquidation
proposal was rejected, Corus Bankshares Inc. reversed course and
is poised to pitch creditors on a plan to emerge from bankruptcy.
About Corus Bankshares
Chicago, Illinois-based Corus Bankshares, Inc., is a bank holding
company. Its lone operating unit, Corus Bank, N.A., was closed
on September 11, 2009, by regulators, and the Federal Deposit
Insurance Corporation was named receiver. To protect the
depositors, the FDIC entered into a purchase and assumption
agreement with MB Financial Bank, National Association, Chicago,
Illinois, to assume all of the deposits of Corus Bank.
The Company sought Chapter 11 protection (Bankr. N.D. Ill.
Case No. 10-26881) on June 15, 2010, disclosing $314,145,828 in
assets and $532,938,418 in liabilities as of the Chapter 11
filing.
Kirkland & Ellis LLP's James H.M. Sprayregen, Esq., David R.
Seligman, Esq., and Jeffrey W. Gettleman, Esq., serve as the
Debtor's bankruptcy counsel. Kinetic Advisors is the Company's
restructuring advisor. Plante & Moran is the Company's auditor
and accountant. Kilpatrick Stockton LLP's Todd Meyers, Esq., and
Sameer Kapoor, Esq.; and Neal Gerber & Eisenberg LLP's Mark
Berkoff, Esq., Deborah Gutfeld, Esq., and Nicholas M. Miller,
Esq., represent the official committee of unsecured creditors.
CRD ENTERPRISES: Files for Chapter 7 Bankruptcy Protection
----------------------------------------------------------
The Providence Journal reports that CRD Enterprises Inc. dba
Jan-Pro Cleaning Systems of SNE filed for Chapter 7 bankruptcy
protection in Rhode Island (Case No. 12627). The Company estimated
assets between $100,000 and $500,000, and liabilities of between
$500,000 and $1 million.
CROSSOVER FINANCIAL: Taps Nicholls & Associates as Bank. Counsel
----------------------------------------------------------------
Crossover Financial I, LLC, asks the U.S. Bankruptcy Court for the
District of Colorado for permission to employ Nicholls &
Associates, P.C., as counsel.
The firm will assist in efforts to reorganize under Chapter 11 of
the Bankruptcy Code.
The hourly rates of the firm's personnel are:
Jon S. Nicholls $295
Stpehen C. Nicholls $295
Prepetition, the firm received $15,000, $7,500 was drawn against
the retainer representing prepetition services, leaving a retainer
balance of $7,500. The retainer was paid by the Debtor.
To the best of the Debtor's knowledge, the attorneys have no
present or past connection which would result in conflict of
interest with the Debtor, its creditors, or any other party-in-
interest or their respective attorneys.
Crossover Financial I, LLC, based in Elizabeth, Colorado, filed
for Chapter 11 bankruptcy (Bankr. D. Colo. Case No. 11-24257) on
June 15, 2011. Judge Sidney B. Brooks presides over the case.
Stephen C. Nicholls, Esq., at Nicholls & Associates, P.C., serves
as bankruptcy counsel. In its petition, the Debtor estimated
assets and debts of $10 million to $50 million. The petition was
signed by Mitchell B. Yellen.
DANCING BEAR: WestLB Obtains Clarification Re Lift Stay Request
---------------------------------------------------------------
WestLB AG sought and obtained an order from the U.S. Bankruptcy
Court for the District of Colorado clarifying a previously entered
order lifting the automatic stay in the three "Dancing Bear"
cases.
As previously reported by the Troubled Company Reporter, West LB's
motion for relief from stay in the case of Dancing Bear Land, LLC,
alleges that the Debtor has no equity in a real property and
improvements associated with a luxury fractional interest
residence club in Aspen, Colorado, and West LB's debt is now over
$60 million.
In the Capital case, West LB asserts Capital owns 100% of Land, an
insolvent single asset real property debtor.
With respect to Dancing Bear Development, West LB sought relief
from stay as to Development's equity ownership interest in
Capital.
In his decision to lift the automatic stay, Judge Romero held that
the Debtors' proposals with respect to reorganization and
providing payments to West LB are speculative and do not provide
adequate protection for purposes of relief from stay.
Subsequently, pursuant to WestLB's motion for clarification, Judge
Romero clarified that its order is without prejudice to WestLB's
right to file a subsequent request to seek relief from the
automatic stay to pursue remedies against collateral other than
the Real Property.
About Dancing Bear
DB Capital Holdings, LLC, is a limited liability company organized
under the laws of the State of Colorado. Its assets include its
membership interest in Dancing Bear Land, LLC, as well as Dancing
Bear Realty, LLC, and LCH LLC. Those entities were used to
develop and sell a luxury fractional ownership condominium project
(made up of two buildings located across the street from each
other) in Aspen, Colorado known as the "Dancing Bear Aspen".
Dancing Bear Land holds title to the two parcels of real property
on which the Project is being constructed. The Debtor has one
Class A member, Aspen HH Ventures, LLC, and one Class B member,
Dancing Bear Development, LP. The general partner of Dancing Bear
Development, LP, is Dancing Bear Management, LLC, which has no
membership or other interest in the Debtor, and is solely owned by
Tom DiVenere. The Debtor is managed, pursuant to its Operating
Agreement, by Dancing Bear Management, LLC.
Fred Funk, William Dennis, G.D.B.S. at Snowmass, Inc., Realty
Financial Resources, Inc., and O'Bryan Partnership, Inc., filed an
involuntary Chapter 11 bankruptcy petition (Bankr. D. Colo. Case
No. 10-25805) against DB Capital Holdings on June 24, 2010. The
order for relief was entered Nov. 29, 2010. Jeffrey S. Brinen,
Esq., represents the petitioners. In its schedules, DB Capital
disclosed liabilities of $57,456,046.
On Oct. 19, 2010, Dancing Bear Development, LP, filed for
Chapter 11 relief (Bankr. D. Colo. Case No. 10-36493) to stay
foreclosure of its membership interest in Capital. DB Development
estimated assets and debts below $1 million.
On Nov. 23, 2010, Dancing Bear Land, LLC, filed for Chapter 11
relief (Bankr. D. Colo. Case No. 10-39584), to stay foreclosure of
its Property. In its schedules of assets and liabilities, DB Land
disclosed $58 million in liabilities.
DEB SHOPS: Has Access to Cash Until Termination of DIP Loans
------------------------------------------------------------
As reported in the TCR on June 30, 2011, Deb Shops Inc. won
interim Court authority to obtain postpetition financing of up to
$15 million, from Ableco, LLC, which serves as administrative
agent and collateral agent.
The DIP lenders have committed to provide up to $21.7 million in
postpetition financing.
The Debtors are also authorized to use cash collateral until the
termination of the DIP Agent's and the DIP Lenders' commitment to
lend under the DIP Credit Agreement or the other DIP Loan
Documents.
As adequate protection, the First Lien Administrative Agent, for
the benefit of the First Lien Lenders, are granted Senior
Replacement Liens in all Collateral, junior and subordinate only
to the DIP Liens, the Permitted Priority Liens, the Carve Out
Expenses and any other liens permitted to be senior to the Senior
Liens by the First Lien Loan Documents.
To the extent that the Senior Replacement Liens offer insufficient
protection, the First Lien Administrative Agent, on behalf of the
First Lien Lenders, is also granted an allowed superpriority
administrative expense claim.
A copy of the interim order is available at:
http://bankrupt.com/misc/debshops.interimDIPfinancingorder.pdf
As reported in the TCR on July 6, 2011, Deb Shops Inc. scheduled a
July 21 hearing for a final hearing on a $21 million financing
package provided by first-lien lenders. On July 21 the Court will
also consider approval of procedures governing the auction and
sale of the business. Before the bankruptcy filing, Deb Shops
negotiated an agreement for a group of lenders led by Ableco
Finance LLC to purchase the business in 44 states in exchange for
$75 million in secured debt. The proposed schedule calls for
competing bids by Aug. 24, followed by an auction Aug. 31 and a
hearing to approve the sale Sept. 9.
About Deb Shops
Deb Shops Inc., is a closely held women's-clothing retailer based
in Philadelphia. Deb Shops sells junior and large-size clothing
for girls and women ages 13 to 25 through more than 320 U.S.
stores and through debshops.com. It was bought out by the New
York investment firm Lee Equity Partners in October 2007.
DSI Holdings Inc. and 54 affiliates, including Deb Shops, sought
bankruptcy protection (Bankr. D. Del. Lead Case No. 11-11941), on
June 26, 2011, to sell all assets under 11 U.S.C. Sec. 363. As of
April 30, 2011, the Debtors' unaudited financial statements
reflected assets totaling $124.4 million and liabilities totaling
$270.1 million.
Lawyers at Weil Gotshal & Manges LLP and Richards, Layton & Finger
P.A. serve as bankruptcy counsel. Rothschild Inc. serves as the
Debtors' investment banker and financial advisors. Kurtzman
Carson Consultants, LLC, serves as claims agent. Sitrick &
Company serves as public relations consultants.
Ableco, the DIP Agent is represented by Michael L. Tuchin, Esq.,
and David A. Fidler, Esq., at Klee Tuchin Bogdanoff & Stern LLP.
Conway Del Genio serves as financial advisors to the First Lien
Lenders. Schulte Roth serves as corporate and tax advisors to the
First Lien Lenders. Another lender, Lee DSI Holdings, is
represented by Jennifer Rodburg, Esq., at Fried Frank Harris
Shriver & Jacobson LLP.
DEMOLITION RESOURCES: In Receivership; Subcontractors Go Unpaid
---------------------------------------------------------------
CBC News reports that Demolition Resources Limited of Amherst has
been placed in receivership, leaving several small sub-contractors
unpaid. Demolition Resources was fired because it wasn't meeting
deadlines, according to the report.
CBC News notes that Scotiabank, which is a secured creditor of the
demolition company, is owed more than $200,000 and it forced the
receivership. The report relates that Tree Works Ltd. is still
waiting to be paid $7,500 for work it did in February; while
Verhagen Demolition Ltd. is out $7,000 and Fred M. Dunphy
Excavating & Construction Limited is owed $5,000.
DESERT OASIS: Can Hire Schwartzer & McPherson as Bankr. Counsel
---------------------------------------------------------------
Hon. Bruce A. Markell of the U.S. Bankruptcy Court for the
District of Nevada authorized Desert Oasis Apartments, LLC, to
employ Schwartzer & McPherson Law Firm as counsel under a general
retainer.
As reported in the Troubled Company Reporter on May 23, 2011, the
firm's rates are:
Attorneys
Lenard E. Schwartzer, Esq. $500
Jeanette E. McPherson, Esq. $400
Jason A. Imes, Esq. $300
Emelia L. Allen, Esq. $200
Paralegal/Legal Assistant
Angela Hosey $125
Sheena Clow $125
Mr. Schwartzer disclosed that his firm received a $173,053
retainer from the Debtor. He said the firm does not represent any
interest that is adverse to the Debtor or their estates. He,
however, noted that his firm represents Desert Land LLC and Desert
Oasis Investments, as well as the Debtor, in litigation brought by
Tom Gonzales, which is pending in the U.S. District Court for the
District of Nevada. Desert Land and Desert Oasis Investments are
owned directly or indirectly by Howard Bulloch and David Gaffin
who are managers of the Debtor. Desert Land is a creditor of the
Debtor. The firm also represented Desert Land in its chapter 11
case (Bankr. D. Nev. Case No. 02-16202). Desert Oasis Apartments
was a co-debtor in that case. A plan was confirmed in the Desert
Land case in April 2003. The confirmation order was appealed and
the last order regarding the appeal was entered by the Court of
Appeals for the Ninth Circuit in November 2005.
About Desert Oasis Apartments
Desert Oasis Apartments LLC owns a garden-style apartment complex
situated across the boulevard from the Mandalay Bay Resort. The
apartment complex is valued at at least $6,500,000.
Secured creditor Wells Fargo set a trustee's sale on the apartment
complex for May 11, 2011, but Desert Oasis sought bankruptcy
protection (Bankr. D. Nev. Case No. 11-17208) the day before the
sale. Lenard E. Schwartzer, Esq., at Schwartzer & McPherson Law
Firm, serves as the Debtor's bankruptcy counsel. The Company
disclosed $18,067,242 in assets and $20,291,316 in liabilities as
of the Chapter 11 filing.
DG FASTCHANNEL: Moody's Assigns 'B1' Corporate Family Rating
------------------------------------------------------------
Moody's Investors Services assigned a B1 Corporate Family Rating
and a B2 Probability of Default Rating (PDR) to DG FastChannel,
Inc. Moody's also assigned B1 (LGD3, 33%) ratings to the company's
proposed $150 million first lien revolver due 2016 and the $490
million first lien term loan due 2018. The new debt issuances will
partially fund the $517 million ($414 million net of cash)
acquisition of MediaMind Technologies Inc., an online advertising
technology and full service solutions provider. The rating outlook
is stable.
Assignments:
Issuer: DG FastChannel, Inc.
-- Corporate Family Rating: Assigned B1
-- Probability of Default Rating: Assigned B2
-- New First Lien Revolver due 2016 -- Assigned B1 (LGD3, 33%)
-- New First Lien Term Loan due 2018 -- Assigned B1 (LGD3, 33%)
The rating outlook is stable.
RATINGS RATIONALE
The company's B1 CFR reflects its moderate debt-to-EBITDA ratios
of approximately 3.6x pro forma for the MediaMind acquisition
(including Moody's standard adjustments, and management estimates
for June 30, 2011 financial results including $15 million of
expected synergies). Based on Moody's forecasts, debt-to-EBITDA
ratios improve to approximately 3.0x in the next 12 months
assuming no acquisitions and free cash flow is applied to prepay
term loans. Despite the absence of multi-year customer contracts
or revenue backlog, ratings are supported by maturing revenue
streams generated from DG's installed equipment base with U.S.
television broadcasters and established customer relationships,
primarily advertising agencies, for whom DG delivers spot
advertising and short form content. Ratings incorporate expected
margin pressure, typical of distributors, and some erosion in DG's
leading market position in North America. "The substitution of
High Definition (HD) content for lower margin Standard Definition
(SD) video attracts competition including providers of cloud-based
services potentially resulting in additional pricing pressures.
Moody's believes that DG will be able to manage this transition in
the near term given the current absence of meaningful competitors
and the challenge for potential entrants to replicate DG's North
American footprint (99% of television stations and cable systems
plus an estimated 95% of online publishers) and compete against
DG's national sales force," stated Carl Salas, a Moody's Vice
President and Senior Analyst. Moody's notes that DG and MediaMind
have the advantage of being independent and not affiliated with
publishers or other content providers.
Historically, DG has repaid acquisition financing and operated
debt free. Ratings reflect the company's ability to repay all debt
balances prior to scheduled maturities with free cash flow plus
balance sheet cash assuming no additional acquisitions; however,
Moody's believes DG will continue to fund tuck-in acquisitions
with excess cash given its track record of acquiring 8 companies
in the last 5 years. Ratings are supported by DG's good liquidity
with a minimum $140 million of balance sheet cash, an undrawn $100
million revolver, and approximately 15% free cash flow-to-total
debt ratios in the first year. Moody's believes debt-to-EBITDA
ratios need to be reduced below initial levels to maintain ratings
given risks related to heightened competition in its core TV
content distribution business (approximately 89% of revenues),
potential pricing erosion in HD deliveries, and challenges related
to expansion outside of North America. "Moody's notes that DG was
successful in transitioning physical content delivery to
electronic delivery, and is benefiting from the substitution of SD
content with higher margin HD content despite pricing pressures.
In the near term, Moody's believes DG should be able to position
itself to capture some share of growing demand for online content
distribution globally and offset potential declines in traditional
TV content distribution; however, there are longer term risks
associated to eroding barriers to entry and increasing competition
especially in the high growth online distribution segment," added
Salas.
RECENT EVENTS
On June 16, 2011, DG announced the $414 million (net of $103
million in cash) acquisition of MediaMind to add to its online
products and services as well as to accelerate its international
expansion. DG is a leading North American provider of ad
distribution services with a nearly ubiquitous server-based
delivery platform for advertising content across an estimated 99%
penetration of television and radio broadcasters as well as 95% of
online publishers in North America. DG's primarily North American
customers include 23 of the top 25 advertisers and 89 of top 100
advertisers. Roughly 77% of standalone revenues come from
distribution of television ads/short form footage. In contrast,
100% of MediaMind's revenues come from online advertising in the
fast growing global online ad market estimated at approximately
$70 billion in size. Post-acquisition, the combined companies will
provide distribution services for broadcast and online management
to TV, Internet, and mobile screens in North America and abroad.
The acquisition of Multimedia yields the two-fold impact of adding
significantly to DG's smaller on-line advertising offerings and
provides immediate entry into international markets. In addition
to $15 million of expected cost synergies (primarily redundant
positions and elimination of MediaMind's public company expenses)
the transaction should also generate revenue synergies as
MediaMind will be able to cross sell online ad services to the
DG's larger North American customer base and DG will be able to
offer robust online services (cloud-based) to its customers in the
U.S. and Canada.
Also on June 16, 2011, DG also announced that it entered into a
three year agreement with SmartJog, a subsidiary of TDF Group, and
a global leader in digital delivery of content in 70 countries.
SmartJog provides Content Delivery Network services to enable
Internet distribution of media content to connected devices.
SmartJog will support DG's plans to expand internationally.
The stable outlook reflects Moody's view that increasing volumes
should offset higher operating expenses related to assimilating
acquired businesses or potential pricing pressures impacting DG's
core server-based distribution business and that total debt-to
EBITDA ratios will be sustained below 3.5x (including Moody's
standard adjustments) over the rating horizon as a portion of free
cash flow is applied to reduce debt balances. The outlook also
incorporates Moody's expectation that the company will maintain
its penetration of advertising and ad agency clients, particularly
in North America.
Ratings could be downgraded if revenue or EBITDA fall short of
management's plan due to general economic weakness, decreasing
demand from ad agencies, or pricing erosion resulting in total
debt-to-EBITDA ratios being sustained above 3.75x. Margin erosion
resulting in weakened liquidity or deterioration in EBITDA cushion
relative to financial maintenance covenant requirements could also
lead to a downgrade. The uncertainties related to increased
competition in the electronic delivery of HD content and DG's
current lack of scale constrain ratings; however, ratings could be
upgraded if Moody's gets comfort that pricing across the company's
various distribution services are stabilizing and total debt-to-
EBITDA is sustained comfortably below 2.5x, with free cash flow-
to-debt ratios greater than 18%.
This is the first instance of a senior secured bank credit
facility to which Moody's has assigned a rating.
DG FastChannel's ratings were assigned by evaluating factors that
Moody's considers relevant to the credit profile of the issuer,
such as the company's (i) business risk and competitive position
compared with others within the industry; (ii) capital structure
and financial risk; (iii) projected performance over the near to
intermediate term; and (iv) management's track record and
tolerance for risk. Moody's compared these attributes against
other issuers both within and outside DG FastChannel's core
industry and believes DG FastChannel's ratings are comparable to
those of other issuers with similar credit risk.
DG FastChannel, Inc., headquartered in Irving, TX, provides
digital technology services, enabling the electronic delivery of
advertisements, syndicated programs, and video news releases to
broadcasters, online publishers and other media outlets. The
Company serves more than 5,000 advertisers and ad agencies through
a distribution reach of over 23,000 radio, television, cable
network and print publishing destinations in addition to more than
5,000 online publishers primarily in North America. The company
recently announced the acquisition of MediaMind Technologies Inc.
adding significantly to DG's online advertising offerings. DG is
publicly traded and shares are widely held. For the 12 months
ended March 31, 2011, combined revenues totaled approximately $335
million.
DJSP ENTERPRISES: DAL Completes $3.3-Mil. Sale of Default Unit
--------------------------------------------------------------
DAL Group, LLC, a subsidiary of DJSP Enterprises, Inc., on July 5,
2011, completed the sale of substantially all of the assets of its
subsidiary, Default Servicing, LLC, to Default Servicing USA, Inc.
a subsidiary of Homeland Security Capital Corporation. Default
provides real estate owned liquidation related services directly
to REO customers, including property inspection, valuation,
eviction, broker assignment, closing, and other services.
Pursuant to the purchase agreement, dated June 22, 2011, between
HSCC, USA, Default, and DAL, as consideration for the Assets, in
addition to the assumption of certain liabilities, USA will pay an
aggregate purchase price equal to the sum of the following:
$480,700 in cash paid at the closing of the transaction, and up to
approximately $2.9 million to be paid as a percentage of net
revenue through 2014. The Assets include certain contract rights
of Default, certain office furniture and equipment located at
Default's offices in Kentucky, and other rights and interests of
Default, including goodwill.
About DJSP Enterprises
Based in Plantation, Florida, DJSP Enterprises, Inc. (Nasdaq:
DJSP, DJSPW, DJSPU) provides a wide range of processing services
in connection with mortgages, mortgage defaults, title searches
and abstracts, REO (bank-owned) properties, loan modifications,
title insurance, loss mitigation, bankruptcy, related litigation
and other services. Its principal customer is The Law Offices of
David J. Stern, P.A. It has additional operations in Louisville,
Kentucky and San Juan, Puerto Rico. Its U.S. operations are
supported by a scalable, low-cost back office operation in Manila,
the Philippines, that provides data entry and document preparation
support for its U.S. operations.
As reported in the Jan. 20, 2011 edition of the TCR, DAL Group,
LLC, a subsidiary of DJSP Enterprises, has obtained waivers on
notes held by these parties for payments due through April 1,
2011:
Amount of Note
--------------
Law Offices of David J. Stern, P.A. $47,869,000
Chardan Capital, LLC, $1,000,000
Chardan Capital Markets, LLC $250,000
Kerry S. Propper $1,500,000
The waivers were sought by DAL as it develops and implements plans
to restructure its ongoing operations to reflect its significantly
reduced revenues and operations and the other changes.
DAL did not make the interest payments due Jan. 3, 2011 for (i)
unsecured term notes in the aggregate principal amount of
$1,600,000 (ii) and a $500,000 term note issued by Cornix
Management, LLC. DAL is seeking waivers from the holders of the
unsecured notes and Cornix of principal and interest payments
otherwise due under these notes, and the default interest rates
under these notes, through April 1, 2011.
DAL has entered into a forbearance agreement with BA Note
Acquisition, LLC, pursuant to which BNA has agreed to forbear from
taking action on a $5.5-million line of credit until March 9,
2011.
DOWN EAST: Local Control of Hospital May Resume Soon
----------------------------------------------------
Sharon Kiley Mack at Bangor Daily News reports that court-ordered
control of Down East Community Hospital, which began two years
ago, is nearly over after a hearing at Kennebec County Superior
Court, in Augusta, Maine.
After a successful Medicare survey and a major overhaul of
hospital policies and operations, Maine's Department of Health and
Human Services has recommended ending emergency receivership of
the Down East hospital, according to the report. Bangor Daily
News notes that the hospital was placed in receivership in July
2009, with Eastern Maine Healthcare Systems of Brewer taking over
operations after a number of investigations into clinical and
administrative complaints.
Bangor Daily News says that after agreeing to the receivership,
Eastern Maine Healthcare Systems took immediate steps to correct
deficiencies that could have affected the hospital's Medicare-
Medicaid provider status.
Doug Jones, acting DECH president and CEO, said that attorneys for
both the state and DECH told Justice Robert E. Murray on that the
goals for which the receivership was established have been
accomplished, the report says.
Bangor Daily News notes that Mr. Murray also accepted written
comments submitted by members of the public and considered the
effect of the receivership on DECH's contract with the Maine State
Nurses Association.
Jones reported that at the end of the hearing, the justice
requested submission of a proposed order that would allow the DECH
board of trustees to resume authority over governance of the
hospital and that would continue the receivership only as needed
to wind up outstanding legal issues that arose during the
receivership, Bangor Daily News adds.
EMMIS COMMUNICATIONS: Amends $84.3-Mil. Notes Exchange Offer
------------------------------------------------------------
Emmis Communications Corporation filed with the U.S. Securities
and Exchange Commission Amendment No. 3 to the Tender Offer
Statement on Schedule TO and Rule 13e-3 Transaction Statement
originally filed on May 27, 2010, as amended.
This Schedule TO/13E-3 relates to the offer by Emmis
Communications Corporation, to issue up to $84,275,100 aggregate
principal amount of new 12% PIK Senior Subordinated Notes due 2017
in exchange for any and all shares of its 6.25% Series A
Cumulative Convertible Preferred Stock, Par Value $0.01, at a rate
of $30.00 principal amount of New Notes for each $50.00
liquidation preference of Existing Preferred Stock, subject to the
terms and conditions of the Proxy Statement/Offer to Exchange.
Jeffrey H. Smulyan, JS Acquisition, LLC, and JS Acquisition, Inc.,
are deemed to be co-bidders and offerors in the Exchange Offer.
A full-text copy of the filing is available for free:
at http://is.gd/clrcyu
About Emmis Communications
Headquartered in Indianapolis, Indiana, Emmis Communications
Corporation -- http://www.emmis.com/-- owns and operates 22 radio
stations serving New York, Los Angeles, Chicago, St. Louis,
Austin, Indianapolis, and Terre Haute, as well as national radio
networks in Slovakia and Bulgaria. The company also publishes six
regional and two specialty magazines.
The Company reported a consolidated net loss of $11.54 million on
$251.31 million of net revenues for the year ended Feb. 28, 2011,
compared with a consolidated net loss of $118.49 million on
$242.56 million of net revenues during the prior year.
The Company's balance sheet at Feb. 28, 2011, showed
$472.47 million in total assets, $474.00 million in total
liabilities, $140.45 million in series A cumulative convertible
preferred stock, $0.01 par value, and a $141.98 million total
deficit.
* * *
In November 2010, Moody's Investors Service affirmed the 'Caa2'
Corporate Family Rating and 'Caa3' Probability of Default rating
for Emmis Communications Corporation, as well as its SGL-4
speculative grade liquidity rating. Operating performance
improved with the economic recovery, but absent debt reduction
with proceeds from an asset sale or equity infusion Emmis will
likely breach its leverage covenant when the covenant suspension
period ends for the quarter ending November 30, 2011, in Moody's
opinion.
Emmis' CFR and PDR incorporate expectations for a covenant breach
in November 2011. Moody's considers the Company's capital
structure unsustainable, and its operations in the cyclical
advertising business magnify this challenge. Furthermore, Emmis
relies on two markets, Los Angeles and New York, for approximately
50% of its revenue, although its ownership of stations in top
markets including Chicago as well as NY and LA, support the
rating.
The negative outlook incorporates Moody's expectations that Emmis
will not comply with its maximum leverage covenant when effective
for the quarter ending November 30, 2011.
ENERGY TRANSFER: Moody's Comments on Revised Southern Union Bid
---------------------------------------------------------------
Moody's Investors Service commented that Energy Transfer Equity,
L.P.'s revised $8.9 billion purchase price for Southern Union
Company has not affected the negative outlook for ETP's Baa3
senior unsecured note rating or the Baa3 long-term debt ratings of
SUG and its subsidiary Panhandle Eastern Pipeline (PEPL), each
having a stable outlook. ETE has increased its offer for SUG to a
total of $8.9 billion, up from $7.9 billion, but also simplified
the financing structure by offering $5.1 billion to SUG
shareholders in a combination of cash and ETE common units. ETE
will also assume $3.8 billion of SUG's long-term debt. The revised
acquisition terms, financing plans and execution risks will be
factored into Moody's current review for downgrade of ETE's Ba1
Corporate Family Rating and Ba2 long-term debt rating.
RATINGS RATIONALE
Moody's notes that although the revised offer increases the
purchase price of SUG by $1 billion, the combination of $2.1
billion of ETE common units issued up front and borrowings under a
$3.3 billion bridge facility will result in leverage similar to
the original structure, which included $4.1 billion of 8.25%
Series B units viewed as 75% debt. In addition, ETE has entered
into a binding agreement to drop down SUG's 50% interest in Citrus
Corporation to ETP, providing some $1.9 billion in proceeds for
ETE to de-lever. In addition, ETE's bridge facility is likely to
be lower cost than the originally proposed Series B units.
However, the review for downgrade of ETE's Ba1 rating reflects the
already strained leverage for the ETE consolidated group, as well
as the execution and integration risks in absorbing operations of
SUG's scale, uncertainties over the ultimate configuration of
ETE's operations as its seeks to optimize its larger portfolio of
assets, and the ETE family's increased structural complexity.
Moody's is maintaining a stable outlook for SUG's and PEPL's Baa3
long-term debt ratings based on their sizeable stable regulated
pipeline revenues and the expectation that SUG will be
substantially de-levered primarily via proceeds from dropdown
transactions or asset sales. SUG's leverage was already elevated
prior to the buyout offer, and its proforma Debt/EBITDA will be
about 5.25x following the Citrus dropdown to ETP. With the Citrus
proceeds dedicated to ETE's own debt reduction, ETE will have to
undertake other large dropdowns to its MLPs, most likely the SUGS
gathering and processing operations, to reduce SUG's leverage. The
stable outlooks is based on the expectation that this will occur
in a reasonable time frame following the closing of the
acquisition, which is expected to occur in early 2012.
Regarding ETP, the dropdown of the 50% stake in Citrus Corporation
for $1.9 billion reflects a high acquisition multiple estimated in
the area of 12x EBITDA, including some $1.4 billion of the prorata
debt of Citrus and Florida Gas Transmission. ETP's negative rating
outlook incorporates its already-elevated leverage prior to SUGS
at 4.8x EBITDA, uncertainty over other possible dropdowns at high
multiples (mainly the SUGS gathering and processing assets), and
its large roster of growth projects with execution and cash flow
ramp-up risk. In addition, ETP, as the largest contributor to
ETE's distribution stream, is affected by ETE's elevated leverage
profile with growing debt service and distribution needs.
Moody's will monitor Citrus and the impact of other dropdowns for
ETP over the next year. Moody's notes that Citrus has not been
paying distributions to its owners, but is expected to start
generating distributions following the recent completion of
Florida Gas Transmission's large Phase VIII expansion. To maintain
its Baa3 rating, ETP will need to issue substantial amounts of
equity to support Citrus and future dropdowns, as well as a roster
of large growth projects. The rating could be lowered if major
projects and cash flows are delayed, if its business risk profile
materially weakens, or if high dropdown multiples prevent ETP from
achieving leverage in the area of 4.5x Debt/EBITDA on a sustained
basis.
The principal methodology used in rating Energy Transfer Equity
was the Global Midstream Energy Industry Methodology, published
December 2010 and Natural Gas Pipeline Industry Methodology,
published December 2009. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA, published June 2009.
ENRON CORP: Judge Witholds Approval as Insurer Objects to Deal
--------------------------------------------------------------
Christie Smythe at Bankruptcy Law360 reports that U.S. Bankruptcy
Judge Arthur J. Gonzalez on Friday withheld approval of a
settlement of a long-standing fight between creditors of Enron
Corp. and the widow of its former chairman Kenneth Lay after John
Hancock Life Insurance Co. raised objections over the deal.
According to Law360, Judge Gonzalez told the parties in Manhattan
court that he would put off his consideration of the settlement
until later this month, eliciting displeasure from multiple sides
of the dispute.
About Enron Corp.
Based in Houston, Texas, Enron Corporation filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. 01-16033) on Dec. 2, 2001,
following controversy over accounting procedures that caused its
stock price and credit rating to drop sharply.
Enron hired lawyers at Togut Segal & Segal LLP; Weil, Gotshal &
Manges LLP; Venable; Cadwalader, Wickersham & Taft, LLP for its
bankruptcy case. The Official Committee of Unsecured Creditors in
the case tapped lawyers at Milbank, Tweed, Hadley & McCloy LLP.
The Debtors won confirmation of their Plan in July 2004, and the
Plan was declared effective on Nov. 17, 2004. After approval of
the Plan, the new board of directors decided to change the name of
Enron Corp. to Enron Creditors Recovery Corp. to reflect the
current corporate purpose. ECRC's sole mission is to reorganize
and liquidate certain of the operations and assets of the "pre-
bankruptcy" Enron for the benefit of creditors.
ECRC has been involved in the MegaClaims Litigation, an action
against 11 major banks and financial institutions that ECRC
believes contributed to Enron's collapse; the Commercial Paper
Litigation, an action involving the recovery of payments made to
commercial paper dealers; and the Equity Transactions Litigation,
which ECRC filed against Lehman Brothers Holdings, Inc., UBS AG,
Credit Suisse and Bear Stearns to recover payments made to the
four banks on transactions involving Enron's stock while the
company was insolvent.
ENTERTAINMENT PROPERTIES: Fitch Affirms 'BB' Pref. Stock Ratings
----------------------------------------------------------------
Fitch Ratings has affirmed the credit ratings of Entertainment
Properties Trust:
-- Issuer Default Rating at 'BBB-';
-- Unsecured revolving line of credit at 'BBB-';
-- Senior unsecured notes at 'BBB-';
-- Redeemable preferred stock at 'BB';
-- Convertible preferred stock at 'BB'.
The Rating Outlook is Stable.
The affirmation of EPR's IDR at 'BBB-' is driven by the consistent
cash flows generated by the company's triple-net leased megaplex
movie theatres and charter schools, together with the cash flows
from the company's other retail and entertainment-based loan
investments, which are solidly in excess of the company's fixed
charges. The affirmation also takes into account credit concerns
including the company investing in asset classes that are less
liquid and financeable during periods of potential financial
stress.
For the 12 months ended March 31, 2011, EPR's fixed charge
coverage ratio (defined as recurring operating EBITDA less
recurring capital expenditures, non-cash interest income and
straight-line rent adjustments, divided by interest incurred and
preferred stock dividends) was 2.3 times (x) compared with 2.3x
and 2.1x for the years ended Dec. 31, 2010 and 2009, respectively.
This coverage is solid for a 'BBB-' IDR. Fitch projects that EPR's
fixed charge coverage ratio will remain relatively unchanged over
the next 12-to-24 months due primarily to the long-term nature of
the company's leases and consistent operating margins, assuming
future acquisitions are effected on a leverage-neutral basis.
The company's leverage, measured as net debt to trailing twelve
months recurring operating EBITDA was 3.9x as of March 31, 2011,
down from 4.6x and 5.0x as of Dec. 31, 2010 and 2009,
respectively. Improvement stems primarily from the company using
the net proceeds from the sale of its unlevered Toronto Dundas
asset to reduce debt. Fitch projects that EPR's leverage will be
in the low-to-mid-4.0x range over the next 12-to-24 months.
EPR has solid contingent liquidity from its unencumbered property
pool. Unencumbered asset coverage of net unsecured debt would be
3.0x utilizing a stressed 12% capitalization rate on unencumbered
NOI from the owned property portfolio, a ratio that is strong for
a 'BBB-' IDR. The company also has $307 million book value of
unencumbered mortgage notes receivable that are currently
performing. Including 75% of these unencumbered assets to reflect
the cash-flowing nature of these investments would improve
unencumbered asset coverage to approximately 3.7x, which would
also be strong for a 'BBB-' IDR.
The company has a manageable lease expiration profile, with only
21% of rental revenue under leases expiring over the next five
years (including leases within the charter school segment). When
taking into account tenant renewal options, only 5% of rental
revenue expires over the next five years, which Fitch views
favorably in that it mitigates re-leasing risk and provides
predictability in portfolio-level cash flows, absent any tenant
bankruptcies.
The company also has a manageable debt maturity profile, with
approximately 55% of total debt maturing over the next five years.
While 19.4% of total debt matures in 2013, no other year over the
next five years comprises more than 15% of total debt maturities.
Nearly all of this maturing debt relates to mortgages that are
collateralized by assets with strong cash flow, mitigating
refinance risk. However, the company's long-term financing
strategy is to have a substantially unencumbered asset pool and
the company has shown good access to the common equity, unsecured
debt and preferred stock markets to actualize this goal. EPR's
objective to move to a substantially unsecured financing strategy
creates a growing unencumbered pool that should strengthen
financial flexibility.
The covenants under the company's credit agreements also do not
limit its financial flexibility.
Fitch calculates that EPR's sources of liquidity (unrestricted
cash, availability under its unsecured revolving credit facility,
expected retained cash flows from operating activities after
dividend payments) divided by uses of liquidity (pro rata debt
maturities and expected capital expenditures) is strong at 2.5x
for the period from April 1, 2011 to December 31, 2012. This
liquidity surplus is driven in large part by a mostly undrawn
revolving unsecured credit facility, and further reflects a lack
of upcoming debt maturities and the relatively low capital-
intensive nature of EPR's business.
The ratings take into consideration certain offsetting factors
including tenant concentration. Rent revenues from American Multi-
Cinema, Inc. (AMC) comprised approximately 56% and 36% of EPR's
annualized theatre rent revenue and total revenue, respectively,
for the quarter ended March 31, 2011, relatively unchanged from
prior periods. Other than Rave Cinemas (10%), no other tenant
contributes more than 10% to EPR's total revenues. While most of
EPR's theatre leases and all of EPR's charter school leases for a
given operator are cross-defaulted, a tenant bankruptcy would
allow for the rejection of certain non-economic leases. Given that
AMC Entertainment Inc. has an IDR of 'B' with a Stable Outlook by
Fitch and most of EPR's other top tenants are either unrated or
have below-investment grade ratings, the potential for corporate
default, bankruptcy and lease rejection could reduce EPR's rental
revenues.
One mitigant to this risk is that on a portfolio basis, property-
level EBITDAR covers rent payments by a healthy margin for nearly
all of EPR's theatre and charter school assets, indicative of
solid four-wall profitability. Further, there have also been only
limited instances in which box office revenues have declined,
indicative of stability in operator top-line cash flows, although
EBITDAR coverage of rent has declined across the theatre portfolio
over the last year due to the combination of flat box office
revenues and escalating rents. In addition, since the company's
formation in 1997, no theatre tenant has ever missed a lease
payment.
The company's real estate investments are in, or are backed by
mostly non-core property types (e.g., megaplex movie theatres,
charter schools, wineries, ski areas and waterparks) and thus may
be less liquid or financeable in periods of company or market
stress. While EPR's theatre properties are typically well-located
and have high-quality amenities, the demonstrated alternative use
of certain of the company's assets may be limited, absent the
company incurring costs to attract new, non-theatre tenants.
The company also made certain mortgage investments collateralized
by assets and other equity investments that deviated from EPR's
core strategy over the last few years. In particular, the company
originated debt investments on a planned resort in Upstate New
York, a multi-tenant retail center in Toronto and made an equity
investment in a multi-tenant retail center in White Plains, NY.
The company recognized impairments on some of these assets and the
ultimate recovery or value realization of the planned resort in
Upstate New York is uncertain. Going forward, management has
narrowed the range of potential future investments to primarily
focus on theatres, adjacent retail and charter schools.
The Stable Outlook reflects Fitch's view that while leverage will
likely increase above the 3.9x as of March 31, 2011, both leverage
and coverage will remain at levels that are appropriate for a
'BBB-' IDR. In addition, the company has strong liquidity and good
demonstrated access to capital, mitigating potential refinance
risk.
The two-notch differential between EPR's IDR and its preferred
stock rating is consistent with the 'Rating Hybrid Securities'
Criteria Report dated December 29, 2009, as EPR's preferred
securities have cumulative coupon deferral options exercisable by
EPR and thus have readily triggered loss absorption provisions in
a going concern.
These factors may have a positive impact on the ratings or
Outlook:
-- Net debt to recurring operating EBITDA sustaining below 4.0x
(leverage was 3.9x as of March 31, 2011, but Fitch expects
that it will increase to between 4.0x and 4.5x over the next
two years);
-- Fixed charge coverage sustaining above 3.0x (coverage was
2.3x for the twelve months ended March 31, 2011);
-- Growth in the unencumbered portfolio, particularly in the
megaplex movie theatre portfolio.
These factors may have a negative impact on the ratings or
Outlook:
-- Net debt to recurring operating EBITDA sustaining above
5.5x;
-- Fixed charge coverage sustaining below 2.2x;
-- A sustained liquidity coverage ratio of below 1.0x.
-- A weakening in the credit quality of EPR's tenants;
-- The company deviating from its core strategy of acquiring
theatres and charter schools.
EVERGREEN SOLAR: BlackRock Discloses 2.53% Equity Stake
-------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, BlackRock, Inc., disclosed that it
beneficially owns 975,080 shares of common stock of representing
2.53% of the shares outstanding. As of May 6, 2011, the Company
had 38,579,067 shares of common stock outstanding. A full-text
copy of the filing is available for free at http://is.gd/fBFbuB
About Evergreen Solar
Evergreen Solar, (NasdaqCM: ESLR) --
http://www.evergreensolar.com/-- develops, manufactures and
markets String Ribbon(R) solar power products using its
proprietary, low-cost silicon wafer technology.
The Company's balance sheet at April 2, 2011, showed $373,972,000
in assets, $455,506,000 in total liabilities, and a stockholders'
deficit of $81,534,000.
As reported in the TCR on May 17, 2011, Evergreen Solar, Inc.,
incurred a $33.4 million net loss in its fiscal first quarter and
said that it has hired financial and legal advisors to actively
evaluate restructuring alternatives.
The Company said its near-term liquidity has been negatively
impacted as a result of its low year-to-date sales volume and
potentially slower sales for the remainder of this year combined
with expected increased pricing pressure. Furthermore, cash to be
realized through the reduction in accounts receivable and
inventory from the recently closed Devens facility will be less
than previously expected and will take longer than expected to
realize. Accordingly, the Company believes it will need to secure
additional sources of cash sooner than expected and has retained
financial and legal advisors to actively evaluate restructuring
alternatives.
EXAMWORKS GROUP: Moody's Assigns 'B2' CFR; Outlook Stable
---------------------------------------------------------
Moody's Investors Service assigned a B2 Corporate Family and
Probability of Default Rating to ExamWorks Group, Inc. At the same
time, Moody's also assigned a B3 rating to ExamWorks' $250 million
senior unsecured notes due 2019 and a Speculative Grade Liquidity
Rating of SGL-2. The outlook is stable. The proceeds will be used
to refinance existing debt of about $195 million, finance
acquisitions and pay transaction expenses.
The company also has a $262 million senior secured revolver
expiring in 2016 (not rated). Moody's expects the revolver to be
used primarily to fund acquisitions; however, should the company
draw heavily on the revolver, under Moody's Loss Given Default
Methodology there is the potential for a downgrade on the senior
unsecured notes.
These ratings and LGD assessments have been assigned:
ExamWorks Group, Inc.
-- Corporate Family Rating at B2;
-- Probability of Default Rating at B2;
-- $250 million senior unsecured notes due 2019 at B3
(LGD 5, 77%)
-- Speculative Grade Rating at SGL-2
The outlook is stable.
RATINGS RATIONALE
ExamWorks' B2 Corporate Family Rating reflects its rapid growth
strategy with 31 acquisitions completed in the prior 30 months,
modest integration risk primarily concentrated within IT and
accounting systems conversion and its relative modest scale with
LTM revenue of $205 million as of March 31, 2011. ExamWorks'
rating is supported by a leading market share within the
independent medical examination industry, solid EBITDA margins and
no significant customer concentration
The stable outlook reflects Moody's anticipation for continued
acquisition activities, however, at a more moderate pace that does
not increase pro forma leverage, expected to be around 4 times by
the end of fiscal 2011. In addition, Moody's expects acquisition
integrations to have a minimal impact on overall operations.
Before Moody's would consider upgrading ExamWorks' CFR, ExamWorks
would need to establish a longer operating history and greater
scale to compensate for an aggressive growth strategy.
The ratings could be pressured if pricing tightens or significant
client losses result in declining revenues and operating margins.
A significant debt financed acquisition that weakens credit
metrics could also pressure the rating. If these conditions result
in sustained debt to EBITDA or free cash flow to debt of greater
than 6.0 times and less than 2%, respectively, a downgrade is
possible.
The principal methodology used in rating ExamWorks Group, Inc. was
the Global Business & Consumer Service Industry Methodology,
published in October 2010. Other methodologies used include Loss
Given Default for Speculative Grade Issuers in the US, Canada, and
EMEA, published June 2009.
Headquartered in Atlanta, GA, ExamWorks, Inc. is a leading
provider of independent medical examinations, peer reviews, bill
reviews and IME-related services to the insurance and legal
industries, third-party administrators, self-insured parties and
federal and state agencies. The company's portfolio of services
include medical assessment programs designed to meet the specific
needs of first-party insurers, attorneys, municipalities and
third-party administrators pertaining to workers' compensation,
automobile, no-fault, liability, short-term and long-term
disability, group health and no-fault claims. LTM revenue for the
twelve months ending March 31, 2011 was approximately $205
million.
EXAMWORKS GROUP: S&P Assigns 'B' Corporate Credit Rating
--------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Atlanta-based ExamWorks Group Inc. The rating
outlook is stable.
"At the same time, we assigned the company's proposed $250 million
senior unsecured notes due 2019 a 'CCC+' credit rating, two
notches below the corporate credit rating, and a '6' recovery
rating, indicating our expectation for negligible (0 to 10%)
recovery of principal in the event of a payment default," S&P
related.
"The low speculative-grade rating on Atlanta-based ExamWorks
reflects the risks inherent in managing very rapid growth and
integrating numerous acquisitions," said Standard & Poor's credit
analyst Gail I. Hessol. The vulnerable business risk profile also
takes account of the young company's narrow operating focus in a
small niche industry. The financial risk profile is aggressive.
Potential challenges in the company's ambitious growth strategy
could include difficulties integrating people and systems,
maintaining relationships with clients and medical panel members,
and achieving the expected volume and EBITDA growth from acquired
businesses. ExamWorks was formed in 2008 via the acquisition of
three companies. It has grown rapidly, fueled by more than 30
acquisitions, which included expansion into the U.K. and Canada.
Revenues were $15 million in 2008 and we estimate they will be in
excess of $400 million this year. S&P expects the company to spend
approximately $100 million to $150 million per year on
acquisitions in the years ahead.
FKF MADISON: Receives $220 Million Offer From Secured Creditor
--------------------------------------------------------------
American Bankruptcy Institute reports that FKF Madison Park Group
Owner LLC has received a $220 million offer from its new secured
creditor.
FKF Madison owns the One Madison Park condominium tower in New
York City. One Madison Park project came to halt in February 2010
when iStar Financial Inc., the chief financier for the project,
moved to foreclose on it. The high-profile condominium project, a
50-story tower was developed by Ira Shapiro and Marc Jacobs.
An involuntary Chapter 7 case (Bankr. D. Del. Case No. 10-11867)
was filed against FKF Madison on June 8, 2010. The case was
converted to a Chapter 11 in November 2010.
FLORIDA EXTRUDERS: Court Confirms Plan of Liquidation
-----------------------------------------------------
On July 1, 2011, the U.S. Bankruptcy Court for the Middle District
of Florida entered its order confirming Florida Extruders
International, Inc.'s Plan of Liquidation dated June 2, 2011.
Of the impaired Classes 3-7, Classes 3, 4, 6 and 7 all voted to
accept the Plan. Class 5 (First Insurance Funding Corp.) has not
voted to accept or reject the Plan.
A copy of the confirmation order is available at:
http://bankrupt.com/misc/floridaextruders.confirmationorder.pdf
As reported in the TCR on June 27, 2011, pursuant to the Plan, the
net proceeds from the sale of the Assets remaining following
payment of, or provision for, the Class 2 Secured Creditor Claims
(Ray Valdez, Seminole County Tax Collector), and the Excluded
Assets or the proceeds thereof will be distributed first, to Wells
Fargo to satisfy its Prepetition Secured Claims; second, to Wells
Fargo to satisfy its DIP Financing Secured Claims; and third, to
Wells Fargo to satisfy its Super-Priority Claims.
Wells Fargo agrees to a carve-out from the distribution an amount
up to $250,000 plus 2% of each dollar that the final Purchase
Price for the assets exceeds $8,000,000 to be distributed for the
benefit of the Class 6 General Unsecured Creditors.
Class 6 General Unsecured Creditors will be paid on a pro rata
basis from (1) the assets of the Debtor's estate or the proceeds
thereof remaining following payment in full of administrative and
priority claims, and payment of the Class 1-5 Secured Creditor
Claims; plus (2) the Guaranteed Distribution in the amount of
$250,000 plus 2% of each dollar that the final purchase price for
the Assets exceeds $8,000,000 less the amount distributed or to be
distributed to Class 6 Creditors, subject to reduction for excess
fees and costs of Committee Counsel.
Class 7 Equity interests of the Debtor will be deemed of no value.
The CRO will be authorized to take the necessary steps and actions
to obtain a final decree dissolving the Post Confirmation Debtor.
A full-text copy of the court-approved disclosure statement, dated
June 2, 2011, is available for free at
http://ResearchArchives.com/t/s?764f
About Florida Extruders
Headquartered in Sanford, Florida, Florida Extruders
International, Inc. -- http://www.floridaextruders.com/-- was
formed in 1989 and is a low cost, vertically integrated aluminum
extruder, window, sliding glass door, and patio screen door
manufacturer, and building products distributor. It filed a bare-
bones Chapter 11 petition (Bankr. M.D. Fla. Case No. 11-07761) on
April 25, 2011. The case has been assigned to Judge K. Rodney
May. Christopher C. Todd, Esq., at McIntyre, Panzarella,
Thanasides, serves as the Debtor's counsel. Triton Capital
Partners, LTD serves as financial advisor and investment banker.
The Company disclosed $33,816,432 in assets and $23,958,630 in
liabilities as of the Chapter 11 filing. The Debtor disclosed
$26.3 million in assets and $16.9 million in debt, mainly owed to
lender Wells Fargo & Co., in its original schedules. The secured
lender Wells Fargo Bank NA, owed $13.2 million, offered financing
for the Chapter 11 case.
FLORIDA HOUSING: Moody's Downgrades Revenue Bond Rating to 'Ba2'
----------------------------------------------------------------
Moody's Investors Service has downgraded the rating on Florida
Housing Finance Corporation Housing Revenue Bonds, 1999 Series J-1
& J-2 (Raceway Pointe Apartments) to Ba2 from Ba1. The rating
outlook on the bonds remains negative. The 1999 Series J-1 & J-2
bonds continue to be insured by MBIA.
The long-term Ba2 rating reflects the project's declining debt
service coverage ratio ranging from 1.17 to 1.06 per December 31,
2010 audited financial statements as well as increased operations
expenses. The previous rating action was a downgrade to Ba1 from
Baa3 with a negative outlook on June 10, 2010. The outlook remains
negative and is a reflection of the continuing trend of declining
debt service coverage , increased expenses and the continuing
necessity to offer deep concessions to maintain high occupancy as
illustrated by the past years financial performance of the
project. Moody's expects that the project will continue to offer
such concessions to maintain high occupancy levels, thus
maintaining rental revenues. While debt service coverage is lower
than original projections, Raceway Pointe continues to benefit as
a recipient of Low Income Housing Tax Credits (LIHTC), which
Moody's recognizes as a credit strength, given the additional
layers of oversight and asset management.
LEGAL SECURITY:
The bonds are secured by revenues derived from operations of the
Raceway Pointe Apartments Project, a 200 unit affordable apartment
complex in Volusia County, Florida, as well as any other funds
pledged to bondholders under the indenture.
RATING RATIONALE
STRENGTHS:
* While the property has experienced a decline in debt service
coverage, management reports that the property is currently 94%
physically occupied.
* The project is a recipient of Low Income Housing Tax Credits
(LIHTC), which Moody's recognizes as a credit strength, given
the additional layers of oversight and asset management
* Further bondholder security is provided by experienced property
management; Concord Management, Ltd., a subsidiary of the owner
CED, over 12,500 units under management in Florida, Georgia,
Illinois, Michigan, NY, North Carolina, South Carolina, Ohio,
Texas, and Tennessee. Concord Management, Ltd., a subsidiary of
the owner CED, is the manager for this property. Moody's
believes that Concord has provided sound property management on
this and other rated affordable properties in the past.
Concord's ability to control future expenses and economic
vacancy will be an important factor in maintaining adequate
financial performance.
CHALLENGES:
* Operational expenses continue to increase, exerting negative
pressure on net operating income (NOI).
* This project is subject to real estate risks and market
competition; however, these risks are mitigated somewhat by the
project's relatively new construction and the additional
security provided by LIHTC.
The outlook remains negative based on the projects declining debt
service coverage resulting from increased operating expenses.
Moody's will continue to monitor the property's monthly occupancy
rates, expenses, and debt service coverage closely.
The principal methodology used in this rating was Global Housing
Projects published in July 2010.
FMC REAL ESTATE: Fitch Cuts Rating on Class H Notes to 'C/RR6'
--------------------------------------------------------------
Fitch Ratings has upgraded two classes, affirmed eight classes,
and downgraded one class of FMC Real Estate CDO 2005-1 Ltd.
reflecting Fitch's base case loss expectation of 45.5%. Fitch's
performance expectation incorporates prospective views regarding
commercial real estate market values and cash flow declines.
The upgrades to the senior-most classes are the result of
significant paydown of the liabilities as a result of the CDO
exiting its reinvestment period in August 2010. Since last review,
class A-1 has received paydown of $107 million. Nine loans have
paid in full with multiple other loans subject to partial paydown
or amortization. Additionally, the discounted note sale of two
assets resulted in further paydown and minimal realized losses of
$3.8 million to the CDO. Defaulted assets have risen to 38.3% from
27.8% at last review while loans of concern have increased to
12.7% from 6.8%. The downgrade to class H reflects increased
expected losses from defaulted assets relative to the credit
enhancement to the class.
Under Fitch's methodology, approximately 86% of the portfolio is
modeled to default in the base case stress scenario, defined as
the 'B' stress. Fitch estimates that average recoveries will be
47.1%.
FMC 2005-1 is a commercial real estate (CRE) CDO managed by SCFFI
GP LLC, an affiliate of Five Mile Capital. Per Fitch
categorizations, the current CDO collateral consists of 47% senior
debt, 26% B-notes, 22% mezzanine debt, and 5% cash, which is
expected to be applied to further paydown class A-1 at the next
payment date.
The largest component of Fitch's base case loss expectation is
related to a defaulted mezzanine loan (7.9%) secured by ownership
interests in a portfolio of five resort hotels located in Wailea,
Hawaii; La Quinta, California; Phoenix, Arizona; Miami, Florida;
and Berkeley, California. The mezzanine position is significantly
over leveraged; Fitch modeled a full loss in its base case
scenario.
The second largest component of Fitch's base case loss expectation
is related to a defaulted B-note (5.6%) secured by approximately
18 acres of land located in Las Vegas, Nevada. The property is
located on Las Vegas Boulevard, in proximity to several popular
hotel/casinos. The land is currently improved with a variety of
commercial buildings, including a limited-service hotel,
restaurants and retail space. The sponsor's original plan was to
redevelop the site into an Elvis Presley-themed hotel/casino. The
plan stalled amid the economic downturn, and the loan defaulted in
January 2009. Fitch modeled a complete loss on this subordinate
position in its base case scenario.
The third largest component of Fitch's base case loss expectation
is related to cross-collateralized and cross-defaulted notes
secured by two multifamily properties (9.7%) located in Phoenix,
Arizona. The loans were crossed as part of a loan modification and
extension in 2009. Fitch modeled a term default with a significant
combined loss to both loans in its base case scenario.
This transaction was analyzed according to the 'Surveillance
Criteria for U.S. CREL CDOs and CMBS Large Loan Floating-Rate
Transactions', which applies stresses to property cash flows and
debt service coverage ratio (DSCR) tests to project future default
levels for the underlying portfolio. Recoveries are based on
stressed cash flows and Fitch's long-term capitalization rates.
The credit enhancement to classes A-1 through C were then compared
to the modeled expected losses, and determined to be consistent
with the rating assigned below. Based on prior modeling results,
no material impact was anticipated from cash flow modeling the
transaction.
The Positive and Stable Rating Outlook revisions for classes A-1
though C reflect the classes' senior positions in the transaction,
and better than expected loan recoveries over the past year;
should loan resolutions continue this positive trend, upgrades are
possible.
The 'CCC' and below ratings for classes D through H are based on a
deterministic analysis that considers Fitch's base case loss
expectation for the pool and the current percentage of defaulted
assets and Fitch Loans of Concern factoring in anticipated
recoveries relative to each class' credit enhancement. These
classes were assigned Recovery Ratings (RR) in order to provide a
forward-looking estimate of recoveries on currently distressed or
defaulted structured finance securities.
Fitch has upgraded and revised Loss Severity (LS) ratings and
Outlooks for these classes:
-- $24.8 million class A-1 to 'AAA/LS5' from 'BBB/LS4'; Outlook
to Stable from Negative;
-- $43.9 million class A-2 to 'A/LS5' from 'BBB/LS5'; Outlook
to Positive from Negative.
Fitch has downgraded this class:
-- $12.1 million class H to 'C/RR6' from 'CC/RR6'.
Fitch has affirmed and revised Outlooks for these classes:
-- $43.9 million class B at 'BB/LS5'; Outlook to Positive from
Negative;
-- $49.4 million class C at'B/LS5'; Outlook to Stable from
Negative;
-- $34.1 million class D at'CCC/RR4';
-- $13.2 million class E at 'CCC/RR6';
-- $22 million class F at 'CCC/RR6';
-- $35.2 million class G at 'CC/RR6'.
FRAZER EXTON: Court OKs Ciardi Ciardi as Bankruptcy Counsel
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Pennsylvania
authorized Frazer/Exton Development, L.P., et al., to employ
CIARDI CIARDI & ASTIN
Albert A. Ciardi, III, Esq.
Jennifer E. Cranston, Esq.
One Commerce Square
2005 Market Street, Suite 1930
Philadelphia, PA 19103
Tel: (215) 557-3550
Fax: (215) 557-3551
As reported in the Troubled Company Reporter on June 13, 2011, the
law firm of Ciardi Ciardi & Astin will represent the Debtors as
legal counsel. Albert A. Ciardi, III, Esq., and Jennifer C.
McEntee, Esq., will lead the engagement.
The law firm provided services to the Debtor prior to the petition
date. According to the statement of financial affairs filed by
Frazer/Exton Development L.P., Roskamp Management Company LLC paid
for Ciardi's prepetition services provided to the Debtor. Those
payments totaled roughly $136,000. According to the Statement,
Roskamp's earliest payments were on Dec. 3, 2010.
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.
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.
FRAZER/EXTON: Taps MacElree Harvey to Handle Makemie Transaction
----------------------------------------------------------------
Frazer/Exton Development, L.P., et al., ask the U.S. Bankruptcy
Court for the Eastern District of Pennsylvania for permission to
employ MacElree Harvey, Ltd., as special counsel to the Debtor.
MacElree Harvey will advise the Debtors on certain complex land
use and development well as to represent its interests in the
"Makemie transaction."
Prepetition, MacElree Harvey has represented the Debtors in
various legal matters, including, without limitation, the
negotiation of the Makemie transaction.
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.
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.
FREDERIKSEN DEVELOPMENT: Sells Three Properties for $568,000
------------------------------------------------------------
Jonathan D. Esptein at BuffaloNews.com reports that Frederiksen
Development's bankruptcy has led to the foreclosure sale of three
of his properties on Franklin Street and Delaware Avenue for
$568,093.
Based in Buffalo, New York, Frederiksen Development LLC filed for
Chapter 11 bankruptcy protection (Bankr. W.D. N.Y. Case No.11-
10214) on Jan. 26, 2011. Judge Michael J. Kaplan presides over
the case. James M. Joyce, Esq., represents the Debtor. The
Debtor disclosed $651,900 in assets and $1,201,103 in debts.
GELTECH SOLUTIONS: Still in Talks on FireIce Distribution Deal
--------------------------------------------------------------
GelTech Solutions, Inc., disclosed in April about a proposed
letter of intent with a Chinese company to serve as exclusive
distributor of FireIce and Skin Armor in China for a 10-year
period.
GelTech said in a new Form 8-K filed with the Securities and
Exchange Commission that no letter of intent has been executed,
although the Company continues its discussions with the proposed
distributor. An issue has risen with regard to the current
Chinese distributor which has the exclusive rights to distribute
FireIce in China.
Initially, the Company sought to have the proposed new distributor
and the current distributor act together, which would have
accelerated the ability to execute the contract. The current
distributor has not been able to come to terms with the new
distributor or the Company. Accordingly, the Company recently
gave notice to the current distributor terminating the agreement,
which requires a 30-day cure period. The current distributor has
the opportunity to remedy by becoming current on its minimum
purchase commitment of $5,360,000. If it does not, the agreement
will be terminated and the Company can finalize negotiations with
the proposed new distributor. The Company estimates that it will
take at least until September 2011 before it can receive new
permits from the Chinese government.
About GelTech Solutions
Jupiter, Fla.-based GelTech Solutions. Inc. (OTC Bulletin Board:
GLTC) -- http://www.GelTechsolutions.com/-- is a Delaware
corporation organized in 2006. The Company creates innovative,
Earth-friendly, cost-effective products that help industry,
agriculture, and the general public accomplish environmental and
safety goals, such as water conservation and the protection of
lives, homes, and property from fires. The Company's current
business model is focused on the following products: 1)
FireIce(R), a fire suppression product, 2) SkinArmor(TM), an
ointment used for protecting skin from direct flame and high
temperatures, and 3) Soil2O(TM), a line of agricultural moisture
retention products.
The Company's balance sheet at March 31, 2011, showed $933,598 in
total assets, $1.44 million in total liabilities and a $508,047
total stockholders' deficit.
Going Concern Doubt
As reported in the Troubled Company Reporter on Oct. 4, 2010,
Salberg & Company, P.A., in Boca Raton, Fla., expressed
substantial doubt about the Company's ability to continue as a
going concern, following the Company's results for the fiscal year
ended June 30, 2010.
In the Form 10-Q, the Company noted that as of Dec. 31, 2010, it
had a working capital deficit of $1,949,478, had an accumulated
deficit and stockholders' deficit of $12,412,626 and $1,787,641,
respectively, and incurred losses from operations of $2,568,513
for the six months ended Dec. 31, 2010 and used cash from
operations of $1,632,695 during the six months ended Dec. 31,
2010. In addition, the Company has not yet generated revenue
sufficient to support ongoing operations.
"The continuation of the Company as a going concern is dependent
upon the continued financial support from its stockholders, the
ability of the Company to obtain necessary debt or equity
financing to continue operations, and the attainment of profitable
operations," GalTech said.
GLOBAL CROSSING: Southeastern Asset Discloses 12.1% Equity Stake
----------------------------------------------------------------
In a Schedule 13G filing with the U.S. Securities and Exchange
Commission, Southeastern Asset Management, Inc., disclosed that it
beneficially owns 7,414,311 shares of common stock of Global
Crossing Limited representing 12.1% of the shares outstanding.
The number of shares of the Company's common stock, par value
$0.01 per share, outstanding as of April 28, 2011, was 61,124,576.
A full-text copy of the filing is available for free at:
http://is.gd/ZAW01z
About Global Crossing
Based in Hamilton, Bermuda, Global Crossing Limited (NASDAQ: GLBC)
-- http://www.globalcrossing.com/-- is a global IP, Ethernet,
data center and video solutions provider with the world's first
integrated global IP-based network.
Global Crossing Limited reported a consolidated net loss of
$172 million on $2.609 billion of consolidated revenue for the
twelve months ended Dec. 31, 2010, compared with a net loss of
$141 million on $2.159 billion of revenue during the prior year.
* * *
As reported by the Troubled Company Reporter on March 31, 2010,
Standard & Poor's Ratings Services raised all its ratings on
Global Crossing, including the corporate credit rating to 'B' from
'B-'. The outlook is stable. S&P assigned its 'CCC+' issue-level
rating and '6' recovery rating to Global Crossing's proposed $150
million of senior unsecured notes due 2019. The '6' recovery
rating indicates S&P's expectation for negligible (0%-10%)
recovery in the event of a payment default.
The Company's balance sheet at March 31, 2011, showed $2.26
billion in total assets, $2.78 billion in total liabilities and a
$525 million total shareholders' deficit.
GRAMERCY PARK: Court OKs Voluntarily Dismissal of Chapter 11 Case
-----------------------------------------------------------------
The Hon. James M. Peck of the U.S. Bankruptcy Court for the
Southern District of New York authorized Gramercy Park Land, LLC,
to voluntarily dismiss its Chapter 11 case.
As reported in the Troubled Company Reporter on June 7, 2011,
Judge James Peck, at the request of StabFund (USA), Inc.,
lifted the automatic stay to allow StabFund to take all steps
necessary in connection with the foreclosure action it filed
against the Debtor. Judge Peck also lifted the automatic stay to
allow StabFund to pursue the judgment of foreclosure and sale
respecting Gramercy Park's property, including, without
limitation, completing its pending foreclosure sale of the
property and any subsequent proceedings to evict or remove the
Debtor from the property and liquidation of any deficiency claim
remaining after completion of the foreclosure action.
New York-based Gramercy Park Land, LLC, filed for Chapter 11
bankruptcy protection on March 29, 2011 (Bankr. S.D.N.Y. Case No.
11-11385). Avrum J. Rosen, Esq., at The Law Offices of Avrum J.
Rosen, PLLC, served as the Debtor's bankruptcy counsel. The
Debtor estimated its assets and debts at $10 million to
$50 million.
Affiliates LT 266 Third Avenue, LLC (Bankr. S.D.N.Y. Case No. 11-
11386) and NK 266 Third Avenue, LLC (Bankr. S.D.N.Y. Case No. 11-
11387) simultaneously filed separate Chapter 11 petitions on
March 29, 2011.
GRANDE HOLDINGS: July 25 Hearing Set for Chapter 15 Petition
------------------------------------------------------------
Judge Robert E. Gerber will convene a hearing for July 25, 2011,
at 9:45 a.m., to consider the request of Fok Hei Yu and Roderick
John Sutton, provisional liquidators of The Grande Holdings
Limited, for entry of an order recognizing the liquidation of
Grande in the High Court of Hong Kong as a "foreign main"
proceeding pursuant to Section 1517 of the Bankruptcy Code.
The liquidators said Hong Kong is the "center of main interests"
for Grande Holdings as defined by Sections 1502(4), 1516(c),
1517(b)(1) of the Bankruptcy Code.
On May 27, 2011, Sino Bright Enterprises Co., Ltd., sent a demand
letter to Grande in regards to an outstanding loan balance. The
demand letter put Grande on notice that it was required to pay the
entire balance of the loan within 21 days, which amounted to
$238,978,462 -- converted from HK$1,859,754,567 on May 31, 2011.
On the same day, Grande responded in affirmation of the demand,
stating that it agreed that the entire balance was due, but due to
their current liquidity, that they would be unable to pay the
obligation. Sino then presented a petition to the Hong Kong Court
requested the immediate wind-up of Grande and a request to appoint
provisional liquidators. On May 31, 2011, the Hong Kong Court
appointed Messrs. Yu and Sutton as provisional liquidators.
Grande was also named as a defendant in an alter-ego lawsuit
brought by shareholders of MTC Electronics to enforce the judgment
obtained in a previously decided shareholder suit against MTC,
which at the time was owned by Grande. This case, which was
brought in the Superior Court for the State of California, the
County of Los Angeles, Kayne v. Grande Holdings Limited, Case No:
BC 363764, resulted in a statement of decision holding that Grande
was liable under an alter ego theory in the amount of $37,562,122.
A related federal case, based on the underlying state claim is
currently pending in the United States District Court, Central
District of California (Western Division), Kayne v. Christopher
Ho, et al, Case No.: 2:09-cv-06816-JAK-CW. The allegations in this
complaint state that (1) Grande is liable as an alter-ego for the
original judgment against MTC; (2) Grande fraudulently conveyed
certain assets to avoid attachment of a potential judgment on
those assets; (3) Grande violated the Federal RICO statutes.
About Grande Holdings
The Grande Holdings Limited is an investment holding company,
holding shares and equity interests in various groups of
companies. The principal activities of Grande's subsidiaries
consist of distribution of household appliances and consumer
electronic products and licensing of trademarks. Grande and its
subsidiary companies own three global brands -- Nakamichi, Akai
and Sansui -- which are recognized for their wide range of audio-
visual equipment, consumer electronics and digital products. The
products are distributed through its global network spanning Asia,
Africa, Europe, Oceania, the Middle East and the Americas.
Grande Holdings was originally incorporated in the Cayman Islands
on Sept. 5, 1990, but was discontinued and resumed under the laws
of Bermuda. Grande has been registered in Hong Kong under Part XI
of the Companies Ordinance, Chapter 32 of the Laws of Hong Kong,
and has its principal place of business at 12th Floor, The Grande
Building, 398-402 Kwun Tong Road, in Kowloon.
Fok Hei Yu and Roderick John Sutton, as provisional liquidators of
Grande Holdings, filed a petition under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 11-13119) on June 28,
2011, estimating $100 million to $500 million in assets and debts
for Grande. The petitioners are represented by:
Gerald C. Bender, Esq.
Daniel S. Shamah, Esq.
Jason A. Zimmerman, Esq.
O'MELVENY & MYERS LLP
7 Times Square
New York, NY 10036
Tel: 212-326-2000
Fax: 212-326-2061
Email: dshamah@omm.com
gbender@omm.com
GREENBRIER COS: Incurs $2.80 Million Net Loss in May 31 Quarter
---------------------------------------------------------------
The Greenbrier Companies, Inc., filed with the U.S. Securities and
Exchange Commission its Quarterly Report on Form 10-Q reporting a
net loss of $2.80 million on $317.28 million of revenue for the
three months ended May 31, 2011, compared with net earnings of
$6.07 million on $207.43 million of revenue for the same period a
year ago. The Company also reported a net loss of $5.15 million
on $800.55 million of revenue for the nine months ended May 31,
2011, compared with a net loss of $1.66 million on $577.44 million
of revenue for the same period during the prior year.
The Company's balance sheet at May 31, 2011, showed $1.21 billion
in assets, $853.76 million in liabilities and $363.97 million in
total equity.
William A. Furman, president and chief executive officer, said,
"As anticipated, we returned to profitability during the quarter,
excluding the one-time charge associated with retiring our $235
million senior unsecured notes. However, these results did not
fully meet our expectations, principally due to a temporary
shortage of castings in North America and a temporary delay in
certification of railcars in Europe, which dampened new railcar
deliveries by about 300 units. In addition, about $2 million of
certain other non-recurring general & administrative costs were
incurred during the third quarter."
Subsequent to quarter end, Greenbrier completed the refinancing of
its North American credit facility and fully repaid $72 million
outstanding under a term loan due June 2012. The new facility is
a five-year, $245 million revolving line of credit maturing
June 30, 2016. Borrowings under the facility currently bear
interest at Libor + 2.50%. During the fourth quarter, the Company
expects to take a one-time charge of about $6 million, pre-tax,
related to the early retirement of the term loan and revolving
line of credit.
As a result of these refinancings, the Company extended its
average loan maturity date from three to five years and added
nearly $75 million of liquidity and borrowing capacity. As
previously noted, the Company will also realize $10 million per
annum in cash interest savings.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/vLUfso
About Greenbrier Cos.
Based in Lake Oswego, Oregon, The Greenbrier Companies Inc.
operates in three primary business segments: manufacturing,
refurbishment and parts, and leasing and services. The
manufacturing segment, operating from four facilities in the
United States, Mexico and Poland, produces double-stack intermodal
railcars, conventional railcars, tank cars and marine vessels.
The refurbishment & parts segment performs railcar repair,
refurbishment and maintenance activities in the United States and
Mexico. The leasing & services segment owns roughly 8,000
railcars and provides management services for roughly 225,000
railcars.
* * *
As reported by the TCR on April 5, 2011, Moody's Investors Service
upgraded the ratings for The Greenbrier Companies Inc. Corporate
Family Rating to 'B3' from 'Caa1'. The upgrade of the CFR
reflects Moody's expectations that Greenbrier's earnings, revenues
and financial performance will improve over the next 12 to 18
months as a result of growing demand for rail cars. Greenbrier is
well position to benefit from improving industry conditions in the
rail car manufacturing and leasing businesses, where continued
growth in overall railroad freight volume will likely result in
robust demand growth for new railcars.
Greenbrier carries 'B-' issuer credit ratings from Standard &
Poor's Ratings Services. S&P said in May 2010 that the ratings on
Greenbrier reflect the company's fair business risk profile
stemming from the cyclicality of the freight car manufacturing
industry; the dramatic decline in demand for new railcars as a
result of slower economic growth and weaker carloadings; and
limited customer diversity. The Company, according to S&P, also
has a highly leveraged financial risk profile, marked by increased
debt balances as a result of acquisitions completed in recent
years.
GROGAN ASSOCIATES: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Grogan Associates, Inc.
P.O. Box 250
Davidson, NC 28036
Bankruptcy Case No.: 11-31775
Chapter 11 Petition Date: July 7, 2011
Court: U.S. Bankruptcy Court
Western District of North Carolina (Charlotte)
Judge: George R. Hodges
Debtor's Counsel: Travis W. Moon, Esq.
MOON WRIGHT & HOUSTON, PLLC
227 West Trade Street, Suite 1800
Charlotte, NC 28202
Tel: (704) 944-6565
Fax: (704) 944-0380
E-mail: tmoon@mwhattorneys.com
Estimated Assets: $500,001 to $1,000,000
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/ncwb11-31775.pdf
The petition was signed by I. Thomas Grogan, president.
GSC GROUP: Judge Okays $1-Mil. Bonus for Chief Despite Objection
----------------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that a New York
bankruptcy judge authorized a proposed $1 million bonus to the
president of bankrupt GSC Group Inc. on Thursday over the
objection of the U.S. trustee, who argued the payout was
unreasonable.
U.S. Trustee Tracy Hope Davis had argued that the proposed payout
to Peter R. Frank should be nixed by the bankruptcy judge because
the lavish bonus is not consistent with the Company's past
practices and inappropriately rewards Frank for the sale of GSC's
assets to Black Diamond Capital Management LLC.
About GSC Group
Florham Park, New Jersey-based GSC Group, Inc. --
http://www.gsc.com/-- is a private equity firm specializing in
mezzanine and fund of fund investments. Originally named
Greenwich Street Capital Partners Inc. when it was a subsidiary of
Travelers Group Inc., GSC became independent in 1998 and at one
time had $28 billion of assets under management. Market reverses,
termination of some funds, and withdrawal of customers'
investments reduced funds under management at the time of
bankruptcy to $8.4 billion.
GSC Group filed for Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case No. 10-14653) on Aug. 31, 2010. Michael B. Solow,
Esq., at Kaye Scholer LLP, serves as the Debtor's bankruptcy
counsel. Epiq Bankruptcy Solutions, LLC, is the Debtor's notice
and claims agent. Capstone Advisory Group, LLC, is the Debtor's
financial advisor. The Debtor estimated its assets at $1 million
to $10 million and debts at $100 million to $500 million as of the
Chapter 11 filing.
HAMPTON ROADS: Opens Loan Production Office in West Ocean City
--------------------------------------------------------------
Hampton Roads Bankshares, Inc., the holding company for Bank of
Hampton Roads and Shore Bank, announced that the Bank has expanded
its Maryland banking operations into the West Ocean City, Maryland
area with the opening of a Loan Production Office. The office
will be managed by Douglass M. Cook, Chief Lending Officer &
Maryland President. The Bank expects to open a full-service
branch in this market in 2012.
"The Bank's management team is eager to bring its commercial
experience and loan services to the business community in
Worcester County," said Thomas Mears, President and CEO of the
Bank.
The opening of the LPO is the first step in executing the Bank's
business plan to expand in the Maryland market and to capitalize
on the substantial market knowledge and experience of Mears and
Cook, both of whom have deep customer roots in this market.
Mears joined the Bank in January 2011 and has over 20 years of
banking experience in markets on the Eastern Shore of Maryland and
surrounding areas. He was the Market Manager for Wilmington Trust
in Lower Delaware and Eastern Shore of Maryland. Previously,
Mears served in positions of increasing responsibility with
Peninsula Bank, an affiliate of Mercantile Bankshares Corp., then
served as Regional President/Market Executive for PNC after its
acquisition of Mercantile Bankshares Corp.
Douglass M. Cook has over 18 years of experience in commercial and
consumer lending as well as bank operations. His extensive
experience in the Bank's markets includes positions as Senior Vice
President with BB&T and PNC/Mercantile Peninsula Bank on
Maryland's Eastern Shore.
About Shore Bank
Shore Bank first opened for business in 1961, and this year is
celebrating 50 years of providing financial services on the
Eastern Shore of Maryland and Virginia. The bank has two offices
in Salisbury, one on West Main Street at the Downtown Plaza and
one at 1503 South Salisbury Blvd. There is also an office in
Pocomoke in the Pocomoke Marketplace on Route 13. On Virginia's
Eastern Shore, there are currently five branches between
Chincoteague and Cape Charles. Shore Bank offers a full range of
financial services for individuals and business customers.
About Hampton Roads Bankshares
Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) --
http://www.hamptonroadsbanksharesinc.com/-- is a bank holding
company that was formed in 2001 and is headquartered in Norfolk,
Virginia. The Company's primary subsidiaries are Bank of Hampton
Roads, which opened for business in 1987, and Shore Bank, which
opened in 1961. Currently, Bank of Hampton Roads operates twenty-
eight banking offices in the Hampton Roads region of southeastern
Virginia and twenty-four offices in Virginia and North Carolina
doing business as Gateway Bank & Trust Co. Shore Bank serves the
Eastern Shore of Maryland and Virginia through eight banking
offices and fifteen ATMs.
Effective June 17, 2010, the Company and its banking subsidiary,
Bank of Hampton Roads ("BOHR"), entered into a written agreement
with the Federal Reserve Bank of Richmond and the Bureau of
Financial Institutions of the Virginia State Corporation
Commission. The Company's other banking subsidiary, Shore Bank,
is not a party to the Written Agreement.
Under the terms of the Written Agreement, among other things, BOHR
agreed to develop and submit for approval plans to (a) strengthen
board oversight of management and BOHR's operations, (b)
strengthen credit risk management policies, (c) improve BOHR's
position with respect to loans, relationships, or other assets in
excess of $2.5 million which are now, or may in the future become,
past due more than 90 days, are on BOHR's problem loan list, or
adversely classified in any report of examination of BOHR, (d)
review and revise, as appropriate, current policy and maintain
sound processes for determining, documenting, and recording an
adequate allowance for loan and lease losses, (e) improve
management of BOHR's liquidity position and funds management
policies, (f) provide contingency planning that accounts for
adverse scenarios and identifies and quantifies available sources
of liquidity for each scenario, (g) reduce the Bank's reliance on
brokered deposits, and (h) improve BOHR's earnings and overall
condition.
The Company said in its Form 10-Q for the Sept. 30, 2010 quarter
that due to its financial results, the substantial uncertainty
throughout the U.S. banking industry, and the Written Agreement
the Company and BOHR have entered into, doubts existed regarding
the Company's ability to continue as a going concern through the
second quarter of 2010. However, management believes this concern
has been mitigated by the initial closing of the Private Placement
that occurred on Sept. 30, 2010.
The Company reported a net loss of $210.35 million on $122.20
million of total interest income for the year ended Dec. 31, 2010,
compared with a net loss of $201.45 million on $149.44 million of
total interest income during the prior year.
The Company's balance sheet at March 31, 2011, showed $2.71
billion in total assets, $2.55 billion in total liabilities and
$159.86 million in total shareholders' equity.
HARDY-BEACON LLC: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Hardy-Beacon LLC
4200 196th Street SW, Suite 201
Lynnwood, WA 98036
Bankruptcy Case No.: 11-18113
Chapter 11 Petition Date: July 7, 2011
Court: U.S. Bankruptcy Court
Western District of Washington (Seattle)
Judge: Timothy W. Dore
Debtor's Counsel: Jeffrey B. Wells, Esq.
ATTORNEY AT LAW
500 Union Street, Suite 502
Seattle, WA 98101
Tel: (206) 624-0088
E-mail: paralegal@jeffwellslaw.com
Scheduled Assets: $5,949,999
Scheduled Debts: $3,943,000
The list of unsecured creditors filed together with its petition
does not contain any entry.
The petition was signed by Robert Hardy, sole member.
Affiliates that simultaneously sought Chapter 11 protection:
Debtor Case No.
------ --------
Hardy-Beacon LLC 11-18113
M Furniss-Beacon LLC 11-18116
KSC-Beacon LLC 11-18117
SKC-Beacon LLC 11-18118
HARRY & DAVID: Court OKs PricewaterhouseCoopers as Auditor
----------------------------------------------------------
The U.S. Bankruptcy Court of District Delaware has approved Harry
& David Holdings' application to employ PricewaterhouseCoopers
LLP, as independent auditor, nunc pro tunc to March 28, 2011.
Pursuant to the terms of the Engagement Letter, since Feb. 12,
2011, PwC has been providing auditing services in connection with
the consolidated financial statements of the Debtors at June 25,
2011 and for the year then ending, including reviews of the
unaudited consolidated quarterly financial information for each of
the first three quarters in the year ending June 25, 2011. PwC
intends to continue providing such services as set forth in the
Engagement Letter during the Debtors' bankruptcy cases.
PwC and the Debtors agreed to a fixed-fee arrangement of $590,000
for the 2011 Audit Services. Prior to the Petition Date, the
Debtors paid PwC $180,000 associated with the 2011 Audit Services.
PwC was not owed any amount on account of services rendered and
expenses incurred prior to the Petition Date in connection with
the PwC's employment by the Debtors.
During the Debtors' bankruptcy cases, PwC will seek payment of
$410,000 pursuant to the payment schedule as outlined in the
Engagement Letter:
Date Fee Amount
----- ----------
March 31, 2011 $60,000
April 30, 2011 $60,000
May 30, 2011 $60,000
June 30, 2011 $90,000
July 31, 2011 $90,000
August 31, 2011 $50,000
The Debtors assure the Court that the firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
About Harry & David
Medford, Oregon-based Harry & David Holdings, Inc. -- aka Bear
Creek Corporation; Bear Creek Direct Marketing, Inc.; Bear Creek
Stores, Inc.; Bear Creek Operations, Inc.; and Bear Creek
Orchards, Inc. -- is a multi-channel specialty retailer and
producer of branded premium gift-quality fruit and gourmet food
products and gifts marketed under the Harry & David(R),
Wolferman's(R) and Cushman's(R) brands. It has 70 stores across
the country.
Harry & David Holdings filed for Chapter 11 bankruptcy protection
(Bankr. D. Del. Case No. 11-10884) on March 28, 2011.
Affiliates Harry and David (Bankr. D. Del. Case No. 11-10885),
Harry & David Operations, Inc. (Bankr. D. Del. Case No. 11-10886),
and Bear Creek Orchards, Inc. (Bankr. D. Del. Case No. 11-10887)
filed separate Chapter 11 petitions. The cases are jointly
administered, with Harry David Holdings as lead case.
Daniel J. DeFranceschi, Esq.; Paul Noble Heath, Esq.; and Zachary
Shapiro, Esq., at Richards Layton & Finger, serve as the Debtors'
local counsel. David G. Heiman, Esq.; Brad B. Erens, Esq.; and
Timothy W. Hoffman, Esq., at Jones Day, are the Debtors' legal
counsel. Rothschild Inc. is the Debtors' investment banker.
Alvarez & Marsal LLC is the Debtors' financial advisor. Garden
City Group Inc. is the Debtors' claims and notice agent. McKinsey
Recovery & Transformation Services U.S. LLC is being tapped as
management consultants.
The Debtor also tapped DJM Realty Services, LLC, as real estate
consultants; Alvarez & Marsal North America to provide the Debtors
an interim chief executive officer and chief restructuring officer
and certain additional officers; and McKinsey Recovery &
Transformation Services U.S. LLC as their management consultant.
Kristopher M. Hansen, Esq., and Erez E. Gilad, Esq., at Stroock &
Stroock & Lavan LLP; Thomas B. Walper, Esq., at Munger, Tolles &
Olson LLP; and Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer
& Feld LLP are counsel to principal noteholders. Moelis & Company
is the financial advisor to the principal noteholders.
Lowenstein Sandler has been retained as counsel to the unsecured
creditors committee in the Harry & David bankruptcy case.
The Debtors disclosed $304.3 million in total assets and
$360.8 million in total debts as of Dec. 25, 2010.
The Debtors' proposed Plan of Reorganization will allow the
Company to convert all of its approximately $200 million of
outstanding public notes into equity of the reorganized company.
The Plan also includes an equity capital raise that will generate
$55 million in equity financing upon the Company's emergence from
chapter 11. The Plan has the support of the Official Committee of
Unsecured Creditors and the holders of approximately 81% of the
Company's public notes.
HAWAII MEDICAL: Hires Robert A. Wade as Compliance Counsel
----------------------------------------------------------
Hawaii Medical Center is tapping the services of Robert A. Wade,
Esq., at Krieg DeVault LLP as special compliance counsel to
represent them with respect to, among other things, the Stark Act
and the Emergency Medical Treatment and Active Labor Act.
Mr. Wade's services include reviewing the Debtors' implementation
of financial arrangements with healthcare providers, including
referring physicians, to ensure those arrangements are
commercially reasonable and consistent with the present fair
market value and that each financial arrangement with a referring
physician complies completely with an applicable exception to the
Stark Act.
Mr. Wade has extensive experience representing healthcare
facilities, hospitals, ambulatory surgical centers and physician
groups.
Mr. Wade's current hourly rate is $490.
Mr. Wade joined Krieg DeVault in March 2011. Prior to that, he
was a partner at Baker & Daniels LLP. During the 12 months prior
to the bankruptcy, the Debtors paid Baker & Daniels $59,654 for
legal services. Mr. Wade himself received $27,686 in payments
during the 12-month pre-bankruptcy period from the Debtors.
Mr. Wade attests he does not hold or represent any interest
adverse to the Debtors' estate and is a "disinterested person" as
that phrase is defined in Sec. 101(14) of the Bankruptcy Code.
About Hawaii Medical Center
The Hawaii Medical Center, along with its affiliates, filed for
Chapter 11 bankruptcy (Bankr. D. Hawaii Lead Case No. 11-01746) on
June 21, 2011, just a year after exiting court protection. Hawaii
Medical Center owns two hospital campuses -- HMC East in North
Honolulu and HMC West in Ewa Beach. The two hospitals have 342
licensed beds and have a total of more than 1,000 employees. The
hospitals were known as St. Francis Medical Center before Hawaii
Medical purchased the hospitals in 2007.
Judge Robert J. Faris presides over the 2011 case. Lawyers at
Moseley Biehl Tsugawa Lau & Muzzi, and McDonald Hopkins LLC serve
as the Debtors' counsel. The Debtors' financial advisors are
Scouler & Company, LLC. In its petition, Hawaii Medical Center
estimated $50 million to $100 million in assets and $100 million
to $500 million in debts. The petitions were signed by Kenneth J.
Silva, member of the board of directors.
An official committee of unsecured creditors has been appointed.
In the prior case, HMC and its affiliated debtors were converted
to new, Hawaii non-profit corporations. CHA Hawaii, one of HMC's
affiliated debtors and a subsidiary of Cardiovascular Hospitals of
America, LLC, discontinued management of the reorganized Debtors.
MidCap Financial, LLC, is owed $46.86 million for exit financing
provided in the previous Chapter 11 case. The Debtors have been
in default under the MidCap loan since December 2010. St. Francis
Medical Center is owed $39.18 million for a term loan provided in
August 2010. Creditors with allowed unsecured claims pursuant to
the 2010 Chapter 11 plan have not yet received payment -- first
installment would have been June 30 -- and are owed $19 million.
Wichita, Kansas-based CHA Hawaii LLC, and its affiliates --
including Hawaii Medical Center LLC -- filed for Chapter 11
protection on Aug. 29, 2008 (Bankr. D. Del. Case No. 08-12027).
Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP
represented the Debtors in their restructuring efforts. CHA
Hawaii estimated assets of up to $10 million and debts between
$50 million and $100 million when it filed for bankruptcy.
The Debtors obtained confirmation of their Chapter 11 plan in May
2010 and emerged from bankruptcy in August 2010.
HAWKS PRAIRIE: HomeStreet Asks Court to Amend Confirmation Order
---------------------------------------------------------------
Home Street Bank asks the U.S. Bankruptcy Court for the Western
District of Washington, to reconsider and amend its order
confirming Hawks Prairie Investment, LLC's Second Amended Plan,
entered June 8, 2011. |
On Dec. 13, 2010, HomeStreet Bank and Talbitzer and Glavin ("T/G")
were granted relief from Stay.
One of the provisions of the Plan was continuation of a stay
against action by secured creditors, HomeStreet and T/G to
March 15, 2011. The "Drop Dead Date" was defined in the Plan as
March 15, 2011.
In its objection, HomeStreet said the Court cannot through the
order confirming the Plan alter the terms of the Plan submitted by
the proponent. Specifically, HomeStreet objects to the provision
in the Court's order extending the stay beyond the Plan's Drop
Dead Date of March 15, 2011.
The entry of an order binding HomeStreet involuntarily to a stay
longer than set forth in the Plan was not consistent with the
record and thus not based upon facts supporting the change
to the Drop Dead Date in the Plan. Further, such a material
alteration in the terms of the Plan by a confirmation order is not
permitted.
A copy of HomeStreet's objection is available at:
http://bankrupt.com/misc/hawksprairie.homestreetobjection.pdf
About Hawks Prairie Investment LLC
Olympia, Washington-based Hawks Prairie Investment LLC owns real
property in Thurston County, Washington. It filed for Chapter 11
bankruptcy protection (Bankr. W.D. Wash. Case No. 10-46635) on
Aug. 13, 2010. Timothy W. Dore, Esq., at Ryan Swanson & Cleveland
PLLC, represents the Debtor. The Company disclosed $89,000,071 in
assets and $44,778,104 in liabilities as of the Chapter 11 filing.
An affiliate, Pacific Investment Group LLC, filed a separate
Chapter 11 petition (Bankr. W.D. Wash. Case No. 09-47915) on
Oct. 22, 2009.
Counsel for HomsStreet Bank may be reached at:
Dillon E. Jackson, Esq.
Christopher M. Alston, Esq.
FOSTER PEPPER PLLC
1111 Third Avenue, Suite 3400
Seattle, WA 98101-3299
Tel: (206) 447-4400
Fax: (206) 447-9700
HEARUSA INC: Equity Committee Wants Assets Sale Documents
---------------------------------------------------------
The Official Committee of Equity Security Holders in the
Chapter 11 case of HearUSA, INC., asks the U.S. Bankruptcy Court
for the Southern District of Florida to direct the Debtor to
include the Equity Committee in the parties to whom documents are
to be provided in connection with the proposed sale of
substantially all of the Debtor's assets.
The Equity Committee submits that notice of the sale documents is
necessary in order to facilitate its role as a fiduciary to the
Debtor's equity security holders pursuant to Section 1103(c) of
the Bankruptcy Code.
As reported in the Troubled Company Reporter on June 30, 2011, the
Court approved the Debtors' request to sell substantially all of
its assets to William Demant Holdings A/S or to the highest and
best bidder.
The Court also approved the bidding procedures governing the
proposed sale.
The deadline for submitting bids for the purchased assets is
July 21, 2011 at 4:30 p.m.
If Qualified Bids, other than the Qualified Bid of the Proposed
Purchaser are timely received, the Debtor will conduct an auction
on July 29, 2011 at 10:00 a.m.
The Proposed Purchaser will be entitled to credit bid each round
at the auction using the current outstanding balance of the DIP
Loan, and a break-up fee of $2,000,000.
The break-up fee will be paid to the Proposed Purchaser in the
event the Debtor consummates an alternative transaction, provided
that the APA has not been terminated by the Debtor.
Objections, if any, to the sale contemplated by the Asset Purchase
Agreement with the Proposed Purchaser must be filed on or before
July 22, 2011 at 4:30 p.m.
All objections to the Debtor's Bidding Procedure Motion or the
relief provided that have not been withdrawn, waived or settled,
and all reservations of rights included therein, are overruled and
denied on the merits, Judge Kimball ruled.
A full-text copy of the bidding procedures order is available for
free at: http://bankrupt.com/misc/HearUSA_BiddingProcsOrd.pdf
About HearUSA
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.
HERCULES OFFSHORE: Delta Assets Now "Discontinued Operations"
-------------------------------------------------------------
Hercules Offshore, Inc., in May 2011, completed the sale of
substantially all of Delta Towing's assets and certain liabilities
for aggregate consideration of $30 million in cash and recognized
a loss on the sale of approximately $13 million. The Company
retained the working capital of the Delta Towing business, which
was valued at approximately $6 million at the date of sale. As a
result of the Delta Towing Sale, the Company will classify the
results of operations of the Delta Towing assets as discontinued
operations.
Accordingly, the Company has recast certain information of its
filings to reflect the results of operations of the Delta Towing
assets as discontinued operations for all periods presented
included in the following sections of the Company's Annual Report
on Form 10-K for the year ended Dec. 31, 2010, and the Company's
Quarterly Report on Form 10-Q for the three months ended March 31,
2011.
The Company's adjusted Statement of Operations reflects a net loss
of $14.22 million on $159.37 million of revenue for the three
months ended March 31, 2011, compared with net loss of $15.95
million on $144.56 million of revenue for the same period a year
ago. The Company originally reported a net loss of $14.22 million
on $166.24 million of revenue for the three months ended March 31,
2011, compared with a net loss of $15.95 million on $150.85
million of revenue for the same period during the prior
year.
About Hercules Offshore
Hercules Offshore Inc. (NASDAQ: HERO) --
http://www.herculesoffshore.com/-- provides shallow-water
drilling and marine services to the oil and natural gas
exploration and production industry in the United States, Gulf of
Mexico and internationally. The Company provides these services
to integrated energy companies, independent oil and natural gas
operators and national oil companies. The Company operates in six
business segments: Domestic Offshore, International Offshore,
Inland, Domestic Liftboats, International Liftboats and Delta
Towing.
The Company's balance sheet at March 31, 2011, showed $2.01
billion in total assets, $1.17 billion in total liabilities and
$839.03 million in stockholders' equity.
The Company reported a net loss of $134.59 million on $657.48
million of revenue for the year ended Dec. 31, 2010, compared with
a net loss of $91.73 million on $742.85 million of revenue during
the prior year.
The Troubled Company Reporter said on Nov. 17, 2010, Moody's
Investors Service downgraded the Corporate Family Rating of
Hercules Offshore Inc. and the Probability of Default Rating to
Caa1 from B2. Moody's also downgraded Hercules' 10.5% senior
secured notes due 2017, its senior secured revolving credit
facility due 2012, and its senior secured term loan B due 2013,
all to Caa1 with LGD3, 45%. The outlook remains negative.
"The inability of Hercules to generate meaningful free cash flow
despite limited reinvestment in its aging fleet of rigs is cause
for concern," commented Stuart Miller, Moody's Senior Analyst.
"Without a significant de-leveraging of its balance sheet,
Hercules is following a path that could lead to financial hardship
at the first sign of a market softening." Hercules' Caa1 CFR
rating reflects its highly leveraged balance sheet and limited
ability to generate free cash flow. The Caa1 rating on the senior
secured notes reflects their pari passu secured position in
Hercules' capital structure relative to the senior secured credit
facilities.
HORIZON LINES: Extends Subscription Deadline to July 22
-------------------------------------------------------
Horizon Lines, Inc., on July 8, 2011, entered into a fifth
amendment with certain holders of a majority of its unsecured
4.25% convertible senior notes due 2012, to the previously
announced Restructuring Support Agreement, dated June 1, 2011, as
amended. The Amendment was entered into to extend, from July 8,
2011, to July 22, 2011, (i) the deadline by which the Company is
to receive subscription commitments for $350 million in aggregate
principal amount of the Company's 9.0% senior secured notes to be
issued and sold to the Exchanging Holders and (ii) the Exchanging
Holders' and the Company's continued support for the
recapitalization and to allow the parties to discuss certain
modifications to the terms of the recapitalization.
A full-text copy of the Fifth Amendment to Restructuring Support
Agreement is available for free at http://is.gd/V2ZjBR
About Horizon Lines
Horizon Lines, Inc., based in Charlotte, North Carolina, through
its wholly-owned indirect operating subsidiary, Horizon Lines,
LLC, currently operates 11 of its 15 Jones Act qualified U.S.
flag container ships in Jones Act liner services between the
continental United States and either Alaska, Hawaii, or Puerto
Rico and five U.S. flag container ships between the Far East,
U.S. west coast and Guam.
Horizon Lines reported a net loss of $57.97 million on
$1.16 billion of operating revenue for the fiscal year ended
Dec. 26, 2010, compared with a net loss of $31.27 million on
$1.12 billion of operating revenue for the fiscal year ended
Dec. 20, 2009.
The Company's balance sheet at March 27, 2011, showed
$804.0 million in total assets, $797.3 million in total
liabilities, and stockholders' equity of $6.66 million.
As reported in the TCR on March 30, 2011, Ernst & Young LLP, in
Charlotte, North Carolina, expressed substantial doubt about
Horizon Lines' ability to continue as a going concern, following
the Company's 2010 results. According to Ernst & Young, there is
uncertainty that Horizon Lines, Inc., will remain in compliance
with certain debt covenants throughout 2011 and will be able to
cure the acceleration clause contained in the convertible notes.
* * *
As reported in the Troubled Company Reporter on March 8, 2011,
Moody's Investors Service said Horizon Lines, Inc.'s plea
agreement regarding antitrust matters in the Puerto Rico trade
lane is credit negative but does not at this time affect its
'Caa1' Corporate Family or its other debt ratings of Horizon.
The last rating action on Horizon was on May 18, 2010 when Moody's
lowered its ratings, including the corporate family rating to
'Caa1' and maintained the negative outlook.
HORIZON LINES: BlackRock Discloses 2.52% Equity Stake
-----------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, BlackRock, Inc., disclosed that it
beneficially owns 779,239 shares of common stock of Horizon Lines
Inc. representing 2.52% of the shares outstanding. At April 25,
2011, 30,884,040 shares of the Company's common stock, par value
$.01 per share, were outstanding. A full-text copy of the filing
is available for free at http://is.gd/FMcZn1
About Horizon Lines
Horizon Lines, Inc., based in Charlotte, North Carolina, through
its wholly-owned indirect operating subsidiary, Horizon Lines,
LLC, currently operates 11 of its 15 Jones Act qualified U.S.
flag container ships in Jones Act liner services between the
continental United States and either Alaska, Hawaii, or Puerto
Rico and five U.S. flag container ships between the Far East,
U.S. west coast and Guam.
Horizon Lines reported a net loss of $57.97 million on
$1.16 billion of operating revenue for the fiscal year ended
Dec. 26, 2010, compared with a net loss of $31.27 million on
$1.12 billion of operating revenue for the fiscal year ended
Dec. 20, 2009.
The Company's balance sheet at March 27, 2011, showed
$804.0 million in total assets, $797.3 million in total
liabilities, and stockholders' equity of $6.66 million.
As reported in the TCR on March 30, 2011, Ernst & Young LLP, in
Charlotte, North Carolina, expressed substantial doubt about
Horizon Lines' ability to continue as a going concern, following
the Company's 2010 results. According to Ernst & Young, there is
uncertainty that Horizon Lines, Inc., will remain in compliance
with certain debt covenants throughout 2011 and will be able to
cure the acceleration clause contained in the convertible notes.
* * *
As reported in the Troubled Company Reporter on March 8, 2011,
Moody's Investors Service said Horizon Lines, Inc.'s plea
agreement regarding antitrust matters in the Puerto Rico trade
lane is credit negative but does not at this time affect its
'Caa1' Corporate Family or its other debt ratings of Horizon.
The last rating action on Horizon was on May 18, 2010 when Moody's
lowered its ratings, including the corporate family rating to
'Caa1' and maintained the negative outlook.
HOSPITAL DAMAS: DIP Financing, Cash Use Extended to Sept. 30
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Puerto Rico entered,
on July 1, 2011, its order granting Hospital Damas, Inc., and
Banco Popular de Puerto Rico's joint motion for the extension of
post-petition financing and use of cash collateral, through and
including Sept. 30, 2011, subject to the Term Sheet being filed by
July 8, 2011, and no oppositions are filed thereto by July 15,
2011. If a timely opposition is filed, the Court will schedule
this matter for July 19, 2011, at 9:30 a.m.
As reported in the TCR on May 19, 2011, Judge Mildred Caban Flores
approved an agreed to order extending the Debtor's authority to
obtain post-petition financing from Banco Popular de Puerto Rico,
use BPPR's cash collateral, and provide adequate protection,
through June 30.
Ponce, Puerto Rico-based Hospital Damas, Inc., filed for Chapter
11 bankruptcy protection (Bankr. D. P.R. Case No. 10-08844) on
Sept. 24, 2010. Charles A. Cuprill-Hernandez, Esq., at Charles A.
Cuprill, P.S.C., Law Offices, serves as the Debtor's bankruptcy
counsel. Silva CPA Group serves as its financial advisor.
Enrique Peral Law Offices, P.S.C., as special counsel. FPV &
Galindez PSC to will assist in processing and preparing
statistical data required for the preparation of the Medicare cost
report.
In October 2010, the U.S. Trustee appointed five creditors to
serve on the Official Committee of Unsecured Creditors of the
Debtor. Todd C. Meyers, Esq., and Colin M. Bernardino, Esq., at
Kilpatrick Stockton LLP, represents the Committee as legal
counsel, and Edgardo Munoz, Esq., at Edgardo Munoz, PSC, serves
the Committee as local counsel.
In its schedules, the Debtor disclosed $24,017,166 in total assets
and $21,267,263 in total liabilities as of the Petition Date.
ISAACSON STRUCTURAL: Sec. 341 Creditors Meeting Set for July 28
---------------------------------------------------------------
The United States Trustee has scheduled a meeting of creditors in
the bankruptcy cases of Isaacson Steel, Inc. and Isaacson
Structural Steel, Inc., pursuant to 11 U.S.C. Sec. 341(a) to take
place on July 28, 2011, at 2:00 p.m. at 1000 Elm Street, Rm 702,
Manchester, New Hampshire.
About Isaacson Structural Steel
Based in Berlin, New Hampshire, Isaacson Structural Steel, Inc.,
filed for Chapter 11 bankruptcy (Bankr. D. N.H. Case No. 11-12416)
on June 22, 2011. Bankruptcy Judge J. Michael Deasy presides over
the case. William S. Gannon PLLC serves as the Debtor's counsel.
Isaacson Structural Steel estimated both assets and debts of
$10 million to $50 million. The petition was signed by Arnold P.
Hanson, Jr., president.
An official committee of unsecured creditors has been appointed in
Isaacson Structural Steel's case. The Committee is represented
by:
Daniel W. Sklar, Esq.
Holly Kilibarda, Esq.
NIXON PEABODY LLP
900 Elm Street
Manchester, NH 03101
Tel: (603) 628-4000
Fax: 603-628-4040
E-mail: dsklar@nixonpeabody.com
hkilibarda@nixonpeabody.com
A bankruptcy petition was also filed for Isaacson Steel, Inc.
(Bankr. D. N.H. Case No. 11-12415) on June 22, 2011, estimating
assets and debts of $1 million to $10 million. The petition was
signed by Arnold P. Hanson, Jr., president. William S. Gannon,
Esq., also represents Isaacson Steel.
IMH FINANCIAL: Files Form S-8; Registers 1.2MM Common Shares
------------------------------------------------------------
IMH Financial Corporation filed with the U.S. Securities and
Exchange Commission a Form S-8 registration statement registering
1,200,000 shares of common stock to be offered under the 2010 IMH
Financial Corporation Employee Stock Incentive Plan. A full-text
copy of the Form S-8 is available for free at http://is.gd/dwK1Ru
About IMH Financial
Scottsdale, Ariz.-based IMH Financial Corporation was formed from
the conversion of IMH Secured Loan Fund, LLC, or the Fund, a
Delaware limited liability company, on June 18, 2010. The
conversion was effected following a consent solicitation process
pursuant to which approval was obtained from a majority of the
members of the Fund to effect the Conversion Transactions and
involved (i) the conversion of the Fund from a Delaware limited
liability company into a Delaware corporation named IMH Financial
Corporation, and (ii) the acquisition by the Company of all of the
outstanding shares of the manager of the Fund Investors Mortgage
Holdings Inc., or the Manager, as well as all of the outstanding
membership interests of a related entity, IMH Holdings LLC, or
Holdings on June 18, 2010.
The Company is a commercial real estate lender based in the
southwest United States with over 12 years of experience in many
facets of the real estate investment process, including
origination, underwriting, documentation, servicing, construction,
enforcement, development, marketing, and disposition. The Company
focuses on a niche segment of the real estate market that it
believes is underserved by community, regional and national banks:
high yield, short-term, senior secured real estate mortgage loans.
The intense level of underwriting analysis required in this
segment necessitates personnel and expertise that many community
banks lack, yet the requisite localized market knowledge of the
underwriting process and the size of the loans the Company seeks
often precludes the regional and community banks from efficiently
entering this market.
"Given the current state of the real estate and credit markets, we
believe the realization of full recovery of the cost basis in our
assets is unlikely to occur in a reasonable time frame and may not
occur at all, and we may be required to liquidate portions of our
assets for liquidity purposes at a price significantly below the
initial cost basis or potentially below current carrying values.
If we are not able to liquidate a sufficient portion of our assets
or access credit under the credit facility currently under
negotiation, there may be substantial doubt about our ability to
continue as a going concern. Nevertheless, we believe that our
cash and cash equivalents, coupled with liquidity derived from the
credit facility currently under negotiation and the disposition of
certain of the loans and real estate held for sale, will allow us
to fund current operations over the next 12 months," the Company
said in its Form 10-Q for the quarter ended Sept. 30, 2010.
The Company reported a net loss of $117.04 million on
$3.75 million of total revenue for the year ended Dec. 31, 2010,
compared with a net loss of $74.47 million on $22.52 million of
total revenue during the prior year.
The Company's balance sheet at March 31, 2011, showed $227.39
million in total assets, $31.43 million in total liabilities and
$195.96 million in total stockholders' equity.
As reported by the TCR on April 20, 2011, BDO USA, LLP, in
Phoenix, Arizona, expressed substantial doubt about the Company's
ability to continue as a going concern. The independent auditors
noted that the Company has suffered recurring losses and is not
currently generating sufficient cash flows to sustain operations
IMUA BLUEHENS: Has Until July 18 to File Schedules and Statements
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Hawaii directed Imua
Bluehens, LLC to file its Schedules A-H, and Statement of
Financial Affairs by July 18, 2011.
The Court stated that failure to file these documents by the
extended deadline will result in dismissal of the case without
further notice.
As reported in the Troubled Company Reporter on July 6, 2011, the
Debtor said it needed extra time to gather the information on its
assets and liabilities to be able to complete and prepare its
Schedules and Statement.
Honolulu, Hawaii-based Imua Bluehen, LLC, owns the Laniakea Plaza,
a commercial retail operation. Imua Bluehens filed for Chapter 11
bankruptcy (Bankr. D. Hawaii Case No. 11-01721) on June 17, 2011.
Judge Robert J. Faris presides over the case. In its petition,
the Debtor estimated assets and debts of $10 million to
$50 million. The petition was signed by James K. Kai, manager.
ISAACSON STRUCTURAL: Claims Bar Date Set for Oct. 20
----------------------------------------------------
The Bankruptcy Court established Oct. 20, 2011, as the last day
for filing proofs of claims for all creditors, except governmental
units, in the bankruptcy case of Isaacson Structural Steel, Inc.
The last day for a governmental unit to file proofs of claims in
the case is Dec. 18, 2011.
About Isaacson Structural Steel
Based in Berlin, New Hampshire, Isaacson Structural Steel, Inc.,
filed for Chapter 11 bankruptcy (Bankr. D. N.H. Case No. 11-12416)
on June 22, 2011. Bankruptcy Judge J. Michael Deasy presides over
the case. William S. Gannon PLLC serves as the Debtor's counsel.
Isaacson Structural Steel estimated both assets and debts of
$10 million to $50 million. The petition was signed by Arnold P.
Hanson, Jr., president.
An official committee of unsecured creditors has been appointed in
Isaacson Structural Steel's case.
A bankruptcy petition was also filed for Isaacson Steel, Inc.
(Bankr. D. N.H. Case No. 11-12415) on June 22, 2011, estimating
assets and debts of $1 million to $10 million. The petition was
signed by Arnold P. Hanson, Jr., president. William S. Gannon,
Esq., also represents Isaacson Steel.
ISAACSON STRUCTURAL: Hiring William S. Gannon as General Counsel
----------------------------------------------------------------
Isaacson Structural Steel, Inc., seeks Bankruptcy Court permission
to employ the law firm of William S. Gannon, PLLC, as its general
counsel.
William S. Gannon, Esq., attests that his firm is disinterested
within the meaning of 11 U.S.C. Section 101(14). The Debtor paid
Mr. Gannon within 90 days of the petition date for pre-filing
advice given.
Mr. Gannon is assisting the Debtor on issues involving Passumpsic
Savings Bank.
The Debtor is also hiring the law firm of Orr and Reno, P.A., to
continue to assist Mr. Gannon with negotiating the terms of a
$500,000 Cate Street Capital Inc. financing arrangement and
finalizing the documents necessary to close the deal; and
representing the Debtors in conjunction with Mr. Gannon with
respect to anticipated "tax credit financing arrangement" with
North Country Industrial Development Corporation and others, and a
$2.250 million working capital loan and New Hampshire Business
Finance Guaranty that may prove to be necessary.
The firm's hourly rates are:
William S. Gannon, Esq. $400 per hour
Jeanne Arquette-Koehler, Paralegal $120 per hour
Maryann Joyce, Paralegal $50 per hour
Beth E. Venuti, Paralegal $120 per hour
About Isaacson Structural Steel
Based in Berlin, New Hampshire, Isaacson Structural Steel, Inc.,
filed for Chapter 11 bankruptcy (Bankr. D. N.H. Case No. 11-12416)
on June 22, 2011. Bankruptcy Judge J. Michael Deasy presides over
the case. William S. Gannon PLLC serves as the Debtor's counsel.
Isaacson Structural Steel estimated both assets and debts of
$10 million to $50 million. The petition was signed by Arnold P.
Hanson, Jr., president.
An official committee of unsecured creditors has been appointed in
Isaacson Structural Steel's case.
A bankruptcy petition was also filed for Isaacson Steel, Inc.
(Bankr. D. N.H. Case No. 11-12415) on June 22, 2011, estimating
assets and debts of $1 million to $10 million. The petition was
signed by Arnold P. Hanson, Jr., president. William S. Gannon,
Esq., also represents Isaacson Steel.
ISAACSON STRUCTURAL: Has $500,000 Bridge Loan From Cate Street
--------------------------------------------------------------
Isaacson Structural Steel, Inc., is seeking Bankruptcy Court
approval of up to $500,000 in bridge financing with Cate Street
Capital Inc. for working capital. The loan will bear interest at
the rate of 5.25%, and will mature Sept. 30, 2011.
The Debtor needs the money to fund operations while its so-called
Liberty Mutual/Turner and Middletown School/MasterCraft contracts
come on line. The Debtor intends to assume those contracts, which
have a total contract price in excess of $24 million.
The Debtor said without the financing, it will have to suspend its
business operations and furlough or lay off employees.
The loan will be paid from the proceeds of collateral for the
financing or from the proceeds of a $2.25 million financing
expected to be made by the New Hampshire Business Finance
Authority and the North Country Industrial Development Corporation
through a New Market Tax Credits financing transaction.
Passumpsic Savings Bank froze or offset the Debtor's operating
accounts on June 10, depriving the Debtor of $930,000. The bank
has rejected repeated requests that it honor or pay as conservancy
costs checks given to pay the Debtor's subcontractors and vendors.
About Isaacson Structural Steel
Based in Berlin, New Hampshire, Isaacson Structural Steel, Inc.,
filed for Chapter 11 bankruptcy (Bankr. D. N.H. Case No. 11-12416)
on June 22, 2011. Bankruptcy Judge J. Michael Deasy presides over
the case. William S. Gannon PLLC serves as the Debtor's counsel.
Isaacson Structural Steel estimated both assets and debts of
$10 million to $50 million. The petition was signed by Arnold P.
Hanson, Jr., president.
An official committee of unsecured creditors has been appointed in
Isaacson Structural Steel's case.
A bankruptcy petition was also filed for Isaacson Steel, Inc.
(Bankr. D. N.H. Case No. 11-12415) on June 22, 2011, estimating
assets and debts of $1 million to $10 million. The petition was
signed by Arnold P. Hanson, Jr., president. William S. Gannon,
Esq., also represents Isaacson Steel.
ISAACSON STRUCTURAL: U.S. Trustee Appoints Creditors Panel
----------------------------------------------------------
Pursuant to 11 U.S.C. Sec. 1102(a), William K. Harrington, the
United States Trustee, appointed five members to the Official
Committee of Unsecured Creditors in the bankruptcy cases of
Isaacson Steel, Inc. and Isaacson Structural Steel, Inc.
1. Timothy M. Riley, Trustee
The Eli Isaacson Family Trust
c/o The Harbor Group - Bedford Commons
402 Riverway Place
Bedford, NH 03110
Tel: (603) 628-0634
Fax: (603) 668-4561
E-mail: triley@harborgrp.com
Asserted unsecured claim: $850,000
2. Gerard Bellavance, Secretary
United Steel Erectors, Inc.
P.O. Box 3
Wolcott, VT 05680
Tel: (802) 472-6146
Fax: none
E-mail: useigerard@gmail.com
Asserted unsecured claim: $194,003
3. Charles Fenderson, President
Charles Leonard Construction, Inc.
183 Pembroke Road
Concord, NH 03252
Tel: (603) 225-0211
Fax: (603) 225-0325
E-mail: charles@charlesleonardinc.com
Asserted unsecured claim: $197,502
4. Daryll Bridges, Vice President
James F. Stearns Co., Inc.
42 Winter Street
Pembroke, MA 02359
Tel: (781) 829-0098
Fax: (781) 829-0092
E-mail: dbridges@jfstearns.com
Asserted unsecured claim: $2,213,858
5. Kevin Tote, Credit Manager
Namasco Corporation
760 Newfield Street
Middletown, CT 06457
Tel: (860) 398-5224
Fax: (860) 398-4178
E-mail: ktoto@namasco.com
Asserted unsecured claim: $78,623
The U.S. Trustee is represented by:
Geraldine Karonis
Assistant U.S. Trustee
Ann Marie Dirsa, Esq.
Trial Attorney
1000 Elm Street, Suite 605
Manchester, NH 03101
Tel: (603) 666-7908
(603) 666-7912
Fax: (603) 666-7913
E-mail: Geraldine.L.Karonis@usdoj.gov
About Isaacson Structural Steel
Based in Berlin, New Hampshire, Isaacson Structural Steel, Inc.,
filed for Chapter 11 bankruptcy (Bankr. D. N.H. Case No. 11-12416)
on June 22, 2011. Bankruptcy Judge J. Michael Deasy presides over
the case. William S. Gannon PLLC serves as the Debtor's counsel.
Isaacson Structural Steel estimated both assets and debts of
$10 million to $50 million. The petition was signed by Arnold P.
Hanson, Jr., president.
An official committee of unsecured creditors has been appointed in
Isaacson Structural Steel's case.
A bankruptcy petition was also filed for Isaacson Steel, Inc.
(Bankr. D. N.H. Case No. 11-12415) on June 22, 2011, estimating
assets and debts of $1 million to $10 million. The petition was
signed by Arnold P. Hanson, Jr., president. William S. Gannon,
Esq., also represents Isaacson Steel.
ISTAR FINANCIAL: Modifies Terms of Performance-Based RSUs
---------------------------------------------------------
iStar Financial Inc. has modified the terms of certain outstanding
performance-based restricted stock units to provide that if the
remaining share price target of $10.00 has not been met before
Dec. 19, 2011, a portion of the Original Units will become
eligible for future vesting if extended service period
requirements are met. The number of Amended Units will be equal
to 75% of the Original Units granted to an employee less, in the
case of each executive level employee, the number of restricted
stock units granted to the executive in March 2011.
The Amended Units will vest ratably on each of Jan. 1, 2012, 2013
and 2014, so long as the employee remains employed by the Company
on the vesting dates. Vesting of the Amended Units will be
accelerated if an employee is terminated without cause, in cases
of death or disability and upon the occurrence of a change of
control transaction. If an executive is terminated without cause
on or before Jan. 31, 2012, the number of Amended Units that vest
will be reduced to 50% of the executive's Original Units less the
number of restricted stock units granted to the executive in March
2011 and any Amended Units that may have previously vested.
The Original Units were granted on Dec. 19, 2008, and provided for
vesting if a share price target of $4.00 was met before Dec. 19,
2009, $7.00 before Dec. 19, 2010, and $10.00 before Dec. 19, 2011.
The $10.00 share price target remains in effect until Dec. 19,
2011. If the $10.00 price target is met, all of the Original
Units will vest on Jan. 1, 2012, and any remaining Amended Units
will not come into effect. There are 8.3 million Original Units
outstanding.
A full-text copy of the Form 8-K is available for free at:
http://is.gd/oMUtZ8
About iStar Financial
New York-based iStar Financial Inc. (NYSE: SFI) provides custom-
tailored investment capital to high-end private and corporate
owners of real estate, including senior and mezzanine real estate
debt, senior and mezzanine corporate capital, as well as corporate
net lease financing and equity. The Company, which is taxed as a
real estate investment trust, provides innovative and value added
financing solutions to its customers.
The Company's balance sheet at March 31, 2011, showed
$8.88 billion in total assets, $7.11 billion in total liabilities,
and $1.77 billion in total equity.
* * *
As reported by the TCR on March 29, 2011, Fitch Ratings has
upgraded the Issuer Default Rating to 'B-' from 'C'.
The upgrade of iStar's IDR is based on the improved liquidity
profile of the company, pro forma for the new senior secured
credit agreement (the new financing) that extends certain of the
company's debt maturities, relieving the overhang of significant
secured debt maturities in June 2011.
In July 2010, Standard & Poor's Ratings Services lowered its long-
term counterparty credit rating on iStar Financial to 'CCC' from
'B-'. The outlook is negative. iStar's limited funding
flexibility and the severe credit quality deterioration in its
loan portfolio continue to put negative pressure on the rating,
S&P said.
As reported by the Troubled Company Reporter on March 22, 2011,
Standard & Poor's said that it raised its counterparty credit
rating on iStar Financial Inc. to 'B+' from 'CCC' and removed it
from CreditWatch where it was placed with positive implications on
Feb. 23. The outlook is stable.
"The upgrade reflects the company's closing of a $2.95 billion
senior secured credit facility, which it will use to refinance the
company's existing secured bank facilities and repay a portion of
the company's unsecured debt," said Standard & Poor's credit
analyst Jeffrey Zaun. If S&P's analysis of the new secured
facility indicates 100% or more collateral coverage, S&P will rate
the issue 'BB-'. If S&P's analysis of collateral indicates less
than 100% coverage, S&P will rate the issue 'B+'.
JACKSON HEWITT: Judge Allows Maryland's Appeal on Automatic Stay
----------------------------------------------------------------
Lance Duroni at Bankruptcy Law360 reports that U.S. Bankruptcy
Judge Mary F. Walrath on Friday allowed Maryland to appeal a
decision that put Jackson Hewitt Tax Services Inc. outside the
reach of the state's lending laws, finding that the appeal did not
violate the automatic stay in the tax preparer's Chapter 11 case.
Law360 relates that Judge Walrath permitted the state to move
forward with an appeal to the Maryland Court of Appeals, rejecting
Jackson Hewitt's argument that the appeal did not qualify for an
exemption from the automatic stay.
About Jackson Hewitt
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.
KINETIC CONCEPTS: S&P Puts 'BB+' Corp. Rating on Watch Negative
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB+' corporate
credit rating on San Antonio, Texas-based medical technology
company Kinetic Concepts Inc. on CreditWatch with negative
implications, meaning that it could lower or affirm the ratings
after completing its review.
The CreditWatch placement followed reports that Kinetic Concepts
may be subject to a takeover by a private-equity firm. S&P based
our CreditWatch listing entirely on widely reported news items.
"In our opinion, a highly leveraged transaction could weaken KCI's
credit metrics from current levels," said Standard & Poor's credit
analyst Jesse Juliano.
"We expect KCI to maintain an intermediate financial risk profile,
keeping debt leverage at less than 3x, to maintain the current
rating. However, we would consider a downgrade if leverage exceeds
3x and we expect it to remain there," S&P stated.
"KCI reported $1.1 billion in debt as of March 31, 2011. We
believe it would repay this debt in any potential transaction
given change-in-control provisions," S&P related.
"Currently, we view the company's business risk profile as fair
and its financial risk profile as intermediate," S&P said.
"We will update the CreditWatch when more information regarding a
potential transaction becomes available. We will then assess the
company's financial policy and the impact of any potential
transaction on its capital structure," S&P noted.
"We would likely affirm the rating and revise the outlook to
stable if a leveraging transaction appears unlikely," S&P related.
KOBRA EFS: Wants Schedules Filing Extended for 30 More Days
-----------------------------------------------------------
Kobra EFS, LLC, et al., ask the U.S. Bankruptcy Court for the
Eastern District of California to extend for an additional 30
days, the time to complete all schedules and pay all fees.
The Debtors relate that they had insufficient time to prepare
appropriate filings or pay the appropriate fees. The lender who
held a foreclosure sale of debtor-affiliate Stoneview Office LLC's
assets on June 20, 2011, brought an emergency motion for relief
from the automatic stay in order to be allowed to record the deeds
of trust after the sales.
On June 30, the Court heard arguments and testimony pertaining to
the lender's motion, and found, inter alia, that the petitions
were filed before the sales were concluded and the automatic stay
was in effect, thereby voiding the respective sales.
Due to uncertainty of the status of the bankruptcy petitions, the
associated schedules, and payments of fees were delayed pending
the Court's determination.
It is anticipated that the counsel for the initial petition filing
will be substituted out for the remainder of the proceedings.
The Debtors also request that all interviews be postponed until
after the completion and filing of all schedules.
The Debtors are represented by:
Paul A. Warner, Esq.
3001 Lava Ridge Court, Suite 300
Roseville, CA 95661-2838
Tel: (916) 746-0645
Fax: (916) 746-0612
E-mail: pwarner@pacdining.com
About Kobra EFS and Fairway Commons II
Kobra EFS, in Roseville, California, filed for Chapter 11
bankruptcy (Bankr. E.D. Calif. Case No. 11-35250) on June 20,
2011. Affiliates that also sought Chapter 11 protection are
Fairway Commons II, LLC (Case No. 11-35255) and Eureka Ridge, LLC
(Case No. 11-35256). Judge Christopher M. Klein presides over the
case. Paul A. Warner, Esq., serves as the Debtors' bankruptcy
counsel. Kobra EFS and Fairway Commons II separately estimated
$10 million to $50 million in both assets and debts.
Affiliates that previously sought Chapter 11 protection are:
Entity Case No. Petition Date
------ -------- -------------
Kobra Petroleum I, LLC 11-23348 02/10/11
Sierra Valley Associates, Inc. 09-40212 09/18/09
Central Valley Food Services, Inc. 09-40214 09/18/09
Kobra Associates, Inc. 09-40068 09/18/09
Food Service Management, Inc. 09-40066 09/18/09
Douglas Pointe, LLC 09-32854 06/23/09
Rocky Ridge Center, LLC 08-38105 12/09/08
Kobra Properties 08-37271 11/25/08
Vernon Street Associates, LLC 08-37273 11/25/08
Kobra Preserve, LLC 08-37272 11/25/08
LANDAMERICA FINANCIAL: PBGC to Pay Pensions for 4,500 Workers
-------------------------------------------------------------
The Pension Benefit Guaranty Corporation will pay pensions to
almost 4,500 employees and retirees of bankrupt LandAmerica
Financial Group, Inc., a real estate services firm based in Glen
Allen, Va.
PBGC, which safeguards the pensions of 44 million Americans, took
over the plan from LandAmerica which is liquidating.
PBGC will pay all pension benefits earned by LandAmerica retirees
up to a legal maximum of $51,750 a year for a 65-year-old.
Further information is available at the PBGC Web site,
http://www.pbgc.gov/, or by calling toll-free 1-800-400-7242.
TTY/TDD users should call the federal relay service toll-free at
1-800-877-8339 and ask for 800-400-7242.
LandAmerica retirees who get their pension from PBGC may be
eligible for the federal Health Coverage Tax Credit. For more
information, see http://www.pbgc.gov/wr/benefits/hctc/hctc-
faqs.html
PBGC expects few retirees will experience benefit reductions as
the agency will cover substantially all of the LandAmerica plan's
funding shortfall.
PBGC protects the pension benefits of 44 million Americans in
27,500 private-sector pension plans. The agency is directly
responsible for paying the benefits of more than 1.5 million
people in failed pension plans. PBGC receives no taxpayer dollars
and never has. Its operations are financed by insurance premiums
and with assets and recoveries from failed plans. PBGC's loss from
the LandAmerica plan's unfunded liabilities was included in its
fiscal year 2010 financial statements.
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.
LEE ENTERPRISES: BlackRock Discloses 2.02% Equity Stake
-------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, BlackRock, Inc., disclosed that it
beneficially owns 906,060 shares of common stock of Lee
Enterprises Inc. representing 2.02% of the shares outstanding.
As of March 27, 2011, 44,865,201 shares of Common Stock of the
Company were outstanding. A full-text copy of the filing is
available for free at http://is.gd/3ziNYi
About Lee Enterprises
Based in Davenport, Iowa, Lee Enterprises, Incorporated --
http://www.lee.net/-- is a premier provider of local news,
information and advertising in primarily midsize markets, with 49
daily newspapers and a joint interest in four others, rapidly
growing online sites and more than 300 weekly newspapers and
specialty publications in 23 states. Lee's newspapers have
circulation of 1.5 million daily and 1.8 million Sunday, reaching
four million readers daily. Lee stock is traded on the New York
Stock Exchange under the symbol LEE.
The Company's balance sheet at March 27, 2011, showed $1.40
billion in total assets, $1.32 billion in total liabilities, and
$77.65 million in total equity.
* * *
As reported by the Troubled Company Reporter on April 14, 2011,
Standard & Poor's Ratings Services Lee Enterprises its preliminary
'B' corporate credit rating. S&P also said, "At the same time, we
assigned our preliminary 'B' rating (the same as the corporate
credit rating) to the company's offering of $675 million first-
priority lien senior secured notes due 2017 with a preliminary
recovery rating of '3', indicating our expectation of meaningful
(50%-70%) recovery for lenders in the event of a payment default.
We also rated the company's second-priority lien senior secured
notes due 2018 a preliminary 'CCC+', with a preliminary recovery
rating of '6', indicating negligible (0%-10%) recovery for
lenders."
The TCR on April 13, 2011, said Moody's Investors Service assigned
first time ratings to Lee Enterprises, including a Caa1 Corporate
Family Rating (CFR), Caa1 Probability of Default Rating (PDR) and
SGL-3 speculative-grade liquidity rating. Moody's also assigned a
B1 rating to the company's proposed $50 million 5-year senior
secured first-lien first-out revolver, a B3 rating to its proposed
$675 million senior secured first-lien notes maturing 2017, and a
Caa2 rating to its proposed $375 million senior secured second-
lien notes maturing 2018. The rating outlook is stable.
LEHMAN BROTHERS: Credit Agricole to Pay $53.5-Mil. for Close-Out
----------------------------------------------------------------
James Giddens, trustee of Lehman Brothers Inc., obtained court
approval of an agreement, which requires Credit Agricole
Corporate and Investment Bank and Credit Agricole Securities
(USA) Inc. to pay $53.55 million to the trustee in connection
with the close-out of their transactions with the brokerage firm.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
disclosed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
Additional units, Merit LLC, LB Somerset LLC and LB Preferred
Somerset LLC, sought for bankruptcy protection in December 2009 or
more than a year after LBHI and its other affiliates filed their
bankruptcy cases.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on Sept. 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on Sept. 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LOCATEPLUS HOLDINGS: Patrick F. Murphy Resigns as Director
----------------------------------------------------------
On July 5, 2011, the Board of Directors of LocatePLUS Holdings
Corporation regretfully accepted the voluntary resignation of
Patrick F. Murphy from the position of Director and Secretary.
Mr. Murphy has served on the Board for approximately two and one-
half years during which the Board has valued his experience,
insight and contributions.
The Board of Directors and Company thanked Mr. Murphy for his
efforts, dedication and outstanding service to the company while
serving as a Director.
About LocatePLUS Holdings
Beverly, Mass.-based LocatePLUS Holdings Corporation, through
itself and its wholly-owned subsidiaries LocatePLUS Corporation,
Worldwide Information, Inc., Entersect Corporation, Dataphant,
Inc., and Employment Screening Profiles, Inc. are business-to-
business, business-to-government and business-to-consumer
providers of public information via its proprietary data
integration solutions.
On June 16, 2011 LocatePLUS Holdings Corporation and its
subsidiaries filed petitions under the Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Mass. Case No. 11-15791). Harold B.
Murphy, Esq., at Murphy & King, P.C., in Boston, represents the
Debtor as counsel. LocatePLUS Holdings estimated assets of $0 to
$50,000 and debts of $1,000,001 to $10 million.
The Company's balance sheet at March 31, 2011, showed
$2.08 million in total assets, $12.25 million in total liabilities
and a $10.17 million total stockholders' deficit.
LODGENET INTERACTIVE: BlackRock Holds 3.31% Equity Stake
--------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, BlackRock, Inc., disclosed that it
beneficially owns 832,896 shares of common stock of Lodgenet
Interactive Corp. representing 3.31% of the shares outstanding.
At May 2, 2011, there were 25,155,330 shares outstanding of the
Company's common stock, $0.01 par value. A full-text copy of the
filing is available for free at http://is.gd/l0IP4W
About LodgeNet Interactive
Sioux Falls, South Dakota-based LodgeNet Interactive Corporation
(Nasdaq:LNET), formerly LodgeNet Entertainment Corp. --
http://www.lodgenet.com/-- provides media and connectivity
solutions designed to meet the unique needs of hospitality,
healthcare and other guest-based businesses. LodgeNet Interactive
serves more than 1.9 million hotel rooms worldwide in addition to
healthcare facilities throughout the United States. The Company's
services include: Interactive Television Solutions, Broadband
Internet Solutions, Content Solutions, Professional Solutions and
Advertising Media Solutions. LodgeNet Interactive Corporation
owns and operates businesses under the industry leading brands:
LodgeNet, LodgeNetRX, and The Hotel Networks.
The Company reported a net loss of $11.68 million on $452.17
million of total revenues for the year ended Dec. 31, 2010,
compared with a net loss of $10.15 million on $484.49 million of
total revenue during the prior year.
The Company's balance sheet at March 31, 2011 showed
$439.21 million in total assets, $490.67 million in total
liabilities, and $51.46 million in total stockholders' deficiency.
* * *
Lodgenet carries a 'B3' long term corporate family rating and a
'Caa1' probability of default rating, with 'stable' outlook, from
Moody's. It has 'B' long term foreign and local issuer credit
ratings, with 'stable' outlook, from Standard & Poor's.
"In Moody's opinion, continued cautious investment from LodgeNet's
hotel customers will hamper intermediate term growth in its core
hospitality services business, and over the long term competing
forms of entertainment will pressure this revenue stream as the
company seeks to defend its relevance to both hotel operators and
hotel guests. The B3 corporate family rating incorporates these
weak growth prospects, mitigated somewhat by the company's
moderately high financial risk profile and demonstrated capacity
to generate positive free cash flow throughout challenging
economic conditions, along with a measure of stability from the
monthly fees it receives from hotels regardless of occupancy,"
Moody's said in October 2010.
LOS ANGELES DODGERS: Wants to Pay $1.1-Mil. to Critical Vendors
---------------------------------------------------------------
Los Angeles Dodgers LLC, et al., ask the U.S. Bankruptcy Court for
the District of Delaware for authorization to pay certain
prepetition claims of critical vendors in the ordinary course of
business.
The Debtors also ask the Court direct their banks to continue to
honor and pay checks issued prepetition on account of critical
vendor claims that have yet to be cashed to ensure that these
essential goods and services will continue to be available to the
Debtors without interruption.
The Debtors further ask that the proposed dollar in the original
critical vendor motion of $500,000 by an additional $600,000 and
to pay critical vendor claims in an aggregate amount not to exceed
$1,100,000.
The Debtors propose a hearing on July 20, 2011, at 10:00 a.m.
(E.T.), to consider their requested payment of critical vendors.
Objections, if any, are due July 15, at 4:00 p.m.
About the Los Angeles Dodgers
Los Angeles Dodgers LLC operates the Los Angeles Dodgers, a
professional Major League Baseball club in the Los Angeles
metropolitan area. Frank McCourt, a Boston real-estate developer
who unsuccessfully bid for the Boston Red Sox, bought the Dodgers
from Rupert Murdoch's Fox Entertainment Group, Inc. in 2004 for
$330 million. Mr. McCourt also bought the Dodgers Stadium from
Fox for $100 million.
Los Angeles Dodgers LLC filed for bankruptcy protection (Bankr. D.
Del. Lead Case No. 11-12010) on June 27, 2011, after MLB
Commissioner Bud Selig rejected a television deal with News
Corp.'s Fox Sports, leaving Mr. McCourt unable to make payroll for
June 30 and July 1. Fox Sports has exclusive cable television
rights for Dodgers games until the end of 2013 baseball season.
Chapter 11 filings were also made for LA Real Estate LLC, an
affiliated entity which owns Dodger Stadium, and three other
related holding companies.
The petition estimates assets of up to $500 million and debts of
up to $1 billion. According to Forbes, the team is worth about
$800 million, making it the third most valuable baseball team
after the New York Yankees and the Boston Red Sox.
Judge Kevin Gross presides over the case. Lawyers at Young,
Conaway, Stargatt & Taylor and Dewey & LeBoeuf LLP serve as the
Debtors' bankruptcy counsel.
MLB is represented by:
Glenn M. Kurtz, Esq.
WHITE & CASE
1155 Avenue of the Americas
New York, NY 10036-2787
Tel: 212-819-8252
Fax: 212-354-8113
E-mail: gkurtz@whitecase.com
The LA Dodgers is the 12th sports team in North America to have
sought bankruptcy protection, according to The Wall Street
Journal.
LOS ANGELES DODGERS: MLB Wants Info on McCourt's Payment
--------------------------------------------------------
Evan Weinberger at Bankruptcy Law360 reports that Major League
Baseball said Friday in Delaware that Highbridge Principal
Strategies LLC should be forced to hand over documents related to
its proposed $150 million debtor-in-possession financing for the
Los Angeles Dodgers, including an alleged $5.25 million payment
from the team's owner.
According to Law360, MLB said in a letter that it is seeking
information about a previously undisclosed $5.25 million fee
Dodgers owner Frank McCourt is believed to have paid to Highbridge
on top of a $4.5 million deferred commitment fee that it paid a
JPMorgan Chase.
About the Los Angeles Dodgers
Los Angeles Dodgers LLC operates the Los Angeles Dodgers, a
professional Major League Baseball club in the Los Angeles
metropolitan area. Frank McCourt, a Boston real-estate developer
who unsuccessfully bid for the Boston Red Sox, bought the Dodgers
from Rupert Murdoch's Fox Entertainment Group, Inc. in 2004 for
$330 million. Mr. McCourt also bought the Dodgers Stadium from
Fox for $100 million.
Los Angeles Dodgers LLC filed for bankruptcy protection (Bankr. D.
Del. Lead Case No. 11-12010) on June 27, 2011, after MLB
Commissioner Bud Selig rejected a television deal with News
Corp.'s Fox Sports, leaving Mr. McCourt unable to make payroll for
June 30 and July 1. Fox Sports has exclusive cable television
rights for Dodgers games until the end of 2013 baseball season.
Chapter 11 filings were also made for LA Real Estate LLC, an
affiliated entity which owns Dodger Stadium, and three other
related holding companies.
The petition estimates assets of up to $500 million and debts of
up to $1 billion. According to Forbes, the team is worth about
$800 million, making it the third most valuable baseball team
after the New York Yankees and the Boston Red Sox.
Judge Kevin Gross presides over the case. Lawyers at Young,
Conaway, Stargatt & Taylor and Dewey & LeBoeuf LLP serve as the
Debtors' bankruptcy counsel.
The LA Dodgers is the 12th sports team in North America to have
sought bankruptcy protection, according to The Wall Street
Journal.
MAQ MANAGEMENT: Has Until July 9 to File Schedules and Statements
-----------------------------------------------------------------
On June 30, 2011, the U.S. Bankruptcy Court for the Southern
District of Florida granted the motion of MAQ Management, Inc., et
al., extending the deadline for the filing of the Debtors'
required schedules and statements to July 9, 2011.
The Sec. 341 meeting of creditors is currently set for Aug. 1,
2011, at 1:00 p.m.
About MAQ Management
Based in Boca Raton, Florida, MAQ Management, Inc., and three
other affiliates serve as commercial landlords to convenience
stores and gas stations in primarily in South Florida. They filed
for Chapter 11 bankruptcy (Bankr. S.D. Fla. Cases No. 11-26571 to
11-26574) on June 15, 2011. Affiliates that sought Chapter 11
protection are Super Stop Petroleum, Inc., Super Stop Petroleum I,
Inc., and Super Stop Petroleum IV, Inc. Judge Erik P. Kimball
presides over the case. Lawyers at Talarchyk Merrill, LLC, serve
as the Debtors' counsel. MAQ Management estimated assets and
debts of $1 million to $10 million. Super Stop estimated assets
and debts of $10 million to $50 million. The petitions were
signed by Mahammad A. Qureshi, CEO.
M.C. PIPE: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: M.C. Pipe, Inc.
fdba M.C. Equipment, Inc.
Duchaine Properties, LLC
M.C. Precast Concrete, Inc.
P.O. Box 189
Apex, NC 27502
Bankruptcy Case No.: 11-05256
Chapter 11 Petition Date: July 7, 2011
Court: U.S. Bankruptcy Court
Eastern District of North Carolina (Wilson)
Debtor's Counsel: Trawick H. Stubbs, Jr., Esq.
STUBBS & PERDUE, P.A.
P.O. Drawer 1654
New Bern, NC 28563
Tel: (252) 633-2700
Fax: (252) 633-9600
E-mail: efile@stubbsperdue.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 20 largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/nceb11-05256.pdf
The petition was signed by Raymond Duchaine, president.
MEDICAL CONNECTIONS: Executive Officers Disclose Shares Ownership
-----------------------------------------------------------------
In separate amended Schedule 13D filings with the U.S. Securities
and Exchange Commission, Medical Connections Holdings, Inc.'s
executive officers and directors disclosed beneficial ownership of
common and preferred shares.
Jeffrey S. Rosenfeld, chief executive officer and a director,
disclosed that he beneficially owns 65,000 shares of the Company's
common stock and 70,000 shares of the Company's Series C Preferred
Stock representing 21.50% of the voting power. Anthony J.
Nicolosi, president and as a director, disclosed that he
beneficially owns 428,950 shares of the Company's common stock and
75,000 shares of the Company's Series C Preferred Stock
representing 24.13% of the voting power. Brian R. Neill, chief
financial officer, also disclosed that he beneficially owns
200,000 shares of the Company's common stock and 70,000 shares of
the Company's Series C Preferred Stock representing 21.91% of the
voting power.
Holders of the Company's common stock, Series A Preferred Stock
and Series C Preferred Stock vote together as a single class on
all matters, except the election of directors. Each share of
common stock and Series A Preferred Stock has 1 vote per share and
each share of Series C Preferred Stock has 100 votes per share.
The holders of a majority of the shares of the Company's Series C
Preferred Stock have the right to appoint a majority of the
directors serving on the Company's Board. The Series C Preferred
Stock does not have any dividend or liquidation preferences. The
Series C Preferred Stock is not convertible into shares of the
Company's common stock.
Full-text copies of the Schedules are available for free at:
http://is.gd/KoiSe6
http://is.gd/WVu5LQ
http://is.gd/jWavhW
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.
MERITA'S SCHOOLS: Moody's Assigns 'B2' CFR; Outlook Stable
----------------------------------------------------------
Moody's Investors Service assigned Meritas Schools Holdings, LLC
a B2 corporate family rating and probability of default rating.
Moody's also assigned a Ba3 rating to the company's proposed first
lien senior secured credit agreement, consisting of a $10 million
revolving credit facility due 2016 and a $125 million term loan
due 2017, and a B3 rating to the proposed $65 million second lien
term loan due 2018. The ratings outlook is stable. This is a first
time rating for the company.
These ratings were assigned:
Meritas Schools Holdings, LLC
-- Corporate family rating at B2;
-- Probability of default rating at B2;
-- Proposed $10 million first lien senior secured revolving
credit facility due 2016 at Ba3 (LGD2, 25%);
-- Proposed $125 million first lien senior secured senior loan
due 2017 at Ba3 (LGD2, 25%);
-- Proposed $65 million second lien senior secured term loan
due 2018 at B3 (LGD5, 74%).
RATINGS RATIONALE
Proceeds from the proposed refinancing will be used to refinance
existing mortgage debt and seller/subordinated debt at individual
schools. To facilitate the transaction, the company is creating
the holding company Meritas Schools Holdings, LLC, which is the
obligor under the proposed credit facilities. The proposed credit
facility does not include the recently acquired Claremont
Preparatory School and Leman International School in Chengdu,
China within the restricted group. In addition, these entities
will not secure or guarantee the credit facility.
The B2 rating incorporates Meritas' high leverage with debt to
EBITDA of about 7.0 times (including Moody's standard analytical
adjustments and 25% debt treatment for the preferred stock), small
scale, and a high proportion of revenue and earnings generated
from one school. While Moody's believes the overall network has
performed well, some schools did experience meaningful enrollment
declines during the economic downturn. Notwithstanding these
concerns, the rating derives support from a diverse network of
preparatory schools, the company's ability to increase revenues
during the downturn, good pro forma coverage of cash interest
expense, and generally improving operating margins. The rating
also reflects Moody's expectation that total enrollment levels
will moderately improve, and that it will maintain an adequate
liquidity profile, supported by a large unrestricted cash balance.
The stable outlook reflects Moody's expectation that Meritas will
exhibit modest top line growth and sustain or improve its
operating margins and paydown debt, such that debt to EBITDA is
reduced below 6.5 times and EBITDA less capex coverage of interest
expense exceeds 1.5 times by the end of the fiscal-year ended June
30, 2012. The rating also reflects Moody's expectation that the
company will maintain a healthy cash balance and not pursue
additional large-scale acquisitions.
The ratings could be downgraded if unfavorable enrollment trends,
or higher than expected expenses causes Meritas' operating
performance to decline such that debt to EBITDA is sustained above
6.5 times and/or EBITDA less capex coverage of interest expense is
less than 1.5 times. Sustained negative cash flow, debt financed
acquisition activity, and/or failure to maintain adequate cushion
under financial covenants could also pressure the ratings.
Given the company's small scale and high leverage, an upgrade is
unlikely in the near term. Over the medium term, the ratings could
be upgraded if Meritas increases scale and diversification and
organically grow its revenue/earnings through price increases and
enrollment growth such that debt to EBITDA is sustained below 5.0
times and EBITDA less capex coverage of interest expense above 2.0
times.
The ratings are subject to the conclusion of the transactions, as
proposed, and Moody's review of final documentation.
Additional information can be found in the Meritas Credit Opinion
published on Moodys.com.
The principal methodology used in rating Meritas Schools Holdings,
LLC was the Global Business & Consumer Service Industry Rating
Methodology, published October 2010. Other methodologies used
include Loss Given Default for Speculative Grade Issuers in the
US, Canada, and EMEA, published June 2009.
Headquartered in Northbrook, Illinois, Meritas Schools Holdings,
LLC, though its subsidiaries, operates a world-wide network of
college preparatory schools.
MTR GAMING: Moody's Assigns 'B3' Rating to Senior Secured Notes
---------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to MTR Gaming
Group's proposed $500 million senior secured notes due 2019, while
affirming its existing ratings including the B3 Corporate Family
Rating and Probability of Default Rating. The rating outlook
remains negative.
The company intends to apply the net proceeds, together with cash
on hand, to purchase all its outstanding senior subordinated notes
due 2012 and senior secured notes due 2014, to establish a video
lottery terminal (VLT) gaming facility at its Scioto Downs in Ohio
and to pay fees and expenses related to the transaction. The
company also anticipates to enter into a new revolving credit
facility of $20 million (will not be rated) and a separate
equipment loan to fund additional capital needs for the VLT
facility.
The rating of the new notes is subject to Moody's review of final
terms and conditions.
The rating action is:
Rating assigned:
-- $500 million senior secured notes due 2019 -- B3 (LGD4, 56%)
Ratings affirmed:
-- Corporate Family Rating -- B3
-- Probability of Default Rating -- B3
-- $260 million Senior Secured Notes due 2014 -- B2 (LGD3, 35%)
-- $125 million Senior Subordinated Notes due 2012 -- Caa2
(LGD5, 87%)
RATINGS RATIONALE
The B3 CFR continues to reflect the near-to-medium term challenges
MTR will likely face when the new casinos in Ohio, particularly
the ones in Cleveland and Columbus (and possibly Youngstown if one
VLT operator will relocate), are expected open in the next 12-24
months, as both of MTR's properties in West Virginia and western
Pennsylvania draw a significant percentage of its patrons from
Ohio (76% for Mountaineer's and 44% of Presque Isle Downs' slot
players are Ohio residents). Moody's acknowledges that the
proposed installation VLTs at MTR's Scioto Downs racetrack in Ohio
could mitigate some of the negative impact. However, the
installation of VLTs will also allow substantially more direct
competition assuming all or some of the other six racetracks will
do the same. This would add up to 17,500 new VLT slot machines
into the Ohio gaming market. Further, it remains uncertain if the
company can obtain licence, complete the construction, or compete
effectively with other many casinos in the surrounding area in a
new market, particularly the to-be-built large full-scale casino
in Columbus, OH. The B3 rating also considers the high pro-forma
financial leverage of more than 7.0x and weak interest coverage
post refinancing. "That being said, if the company is able to
start the VLT operation in Ohio on time and on budget, Moody's
expects the leverage to decline gradually over the next 12-18
months to below 6.5 times, a level more consistent with a B3
rating," commented John Zhao, an analyst at Moody's.
Positive consideration is given to the relatively stable EBITDA
despite the topline pressure, in part due to the implementation of
cost containment programs as well as the increased contribution
from Presque Isle Downs & Casino after its timely opening of table
games in July 2010. Additionally, a successful refinancing will
address the upcoming maturity of the subordinated notes in 2012,
thus improving the company's liquidity profile.
The negative rating outlook incorporates the significant execution
risks associated with the VLT facility as well as the difficult
operating environment MTR is faced with - increased regional
competition and the still weak gaming demand. The negative outlook
suggests the possibility of rating downgrade if Moody's deems that
MTR will not be able to mitigate the expected decline in EBITDA
(in the range between 40-50% on cumulative basis during 2012-2013
estimated by Moody's) because of the increased Ohio-based
competition and reduce its leverage to the targeted level in the
next 18-24 months.
Events/developments that could exert downgrade pressure on the
rating include: the company's inability to get regulatory approval
and licensing on the VLT, unfavorable revenue sharing agreement
with local Horseman Association, inability to obtain additional
financing to fund the construction and license fees, significant
project delay and cost overrun during construction, and materially
weaker-than-expected operating results after opening. Ratings
could be also downgraded if MTR is not able to complete the
proposed refinancing on economical terms timely or to renew its
gaming license in Pennsylvania.
Rating upside is limited at this time. Should MTR complete
refinancing on a timely basis, open Scioto Downs VLT facility on-
time and on budget and generate EBITDA that can more than offset
potential impact from Ohio new gaming operations, the rating
outlook would likely revert to stable. Moreover, stable outlook
would require debt/EBITDA to approach 6.0x on a sustained basis
and an adequate liquidity profile.
MTR Gaming Group, Inc., through its subsidiaries, owns and
operates Mountaineer Casino, Racetrack & Resort in Chester, West
Virginia; Presque Isle Downs & Casino in Erie, Pennsylvania and
Scioto Downs in Columbus, Ohio. MTR reported net revenues of
approximately $424 million in the last twelve months ended March
31, 2011.
The principal methodology used in rating MTR was the Global Gaming
Industry Methodology published in December 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
NCO GROUP: APAC Customer Services to be Bought by OEP for $470MM
----------------------------------------------------------------
APAC Customer Services, Inc., and One Equity Partners, a majority
shareholder of NCO Group, Inc., announced that they have entered
into a definitive merger agreement under which an affiliate of One
Equity will acquire 100% of APAC, through an all-cash transaction
with an aggregate equity value of approximately $470 million.
APAC's Board of Directors has unanimously approved the
transaction.
Under the terms of the agreement, One Equity Partners will pay
APAC stockholders $8.55 per share in cash, which represents a
premium of approximately 57% over APAC's closing share price on
July 6, 2011. The acquisition is anticipated to be funded through
committed equity and credit facilities and is not subject to any
financing contingencies.
Theodore G. Schwartz and his affiliated entities, representing
approximately 39% of APAC's outstanding shares, have entered into
a voting agreement to vote in favor of the transaction. The
transaction is expected to close in the fourth quarter of 2011,
subject to the satisfaction of customary closing conditions,
including Hart-Scott-Rodino clearance and approval of APAC's
shareholders.
One Equity is the majority owner of NCO Group, Inc., a leading
global provider of business process outsourcing services. OEP
will seek to combine APAC with NCO Group to build market
leadership in business process outsourcing and customer care
solutions.
"We believe that this transaction, at a 57% premium to yesterday's
closing price, represents compelling value, and the Board is
pleased to recommend this deal to APAC's shareholders," stated
Theodore Schwartz, Chairman of APAC.
"APAC has a market leading reputation for delivering exceptional
customer experiences. We believe this combination will allow both
APAC and NCO to enhance the levels of service and support that
they currently provide to their valued customers," said Tom
Kichler, Managing Director at One Equity Partners. "We are
excited about investing behind the growth of these two great
businesses."
Kevin Keleghan, APAC's President and CEO, commented, "We are
thrilled to be entering into a new chapter in APAC's history. My
management team and I look forward to working with One Equity
Partners to build a world-class enterprise dedicated to enhancing
the customer experience. We believe that a partnership with NCO
will create new opportunities for our company, our clients, and
our people."
Credit Suisse Securities (USA) LLC served as financial advisor to
APAC on the transaction. Kirkland & Ellis LLP served as legal
advisor to APAC.
Dechert LLP served as legal advisor to One Equity Partners.
About APAC Customer Services, Inc.
APAC Customer Services, Inc., is a leading provider of quality
customer care services and solutions to market leaders in
healthcare, business services, communications, media & publishing,
travel & entertainment, financial services and technology
industries. APAC partners with its clients to deliver custom
solutions that enhance bottom-line performance. For more
information, call 1-800-OUTSOURCE. APAC's comprehensive Web site
is http://www.apaccustomerservices.com.
About One Equity Partners
One Equity Partners is the private investment arm of JPMorgan
Chase & Co. and manages over $10.5 billion in commitments and
investments solely for the bank. OEP enters into long-term
partnerships with companies to create sustainable value through
long-term growth driven both organically and inorganically.
Founded in 2001, OEP has 39 investment professionals in New York,
Chicago, Silicon Valley, Frankfurt, Hong Kong and elsewhere around
the globe. Visit www.oneequity.com for more information.
About NCO Group Inc.
Based in Horsham, Pennsylvania, NCO is a global provider of
business process outsourcing services, primarily focused on
accounts receivable management and customer relationship
management. NCO has over 25,000 full and part-time employees who
provide services through a global network of over 100 offices.
The company is a portfolio company of One Equity Partners and
reported revenues of about $1.2 billion for the twelve month
period ended Sept. 30, 2007.
The Company reported a net loss of $155.71 million on
$1.60 billion of revenue for the year ended Dec. 31, 2010,
compared with a net loss of $88.14 million on $1.58 billion of
revenue during the prior year.
The Company's balance sheet at March 31, 2011, showed
$1.19 billion in total assets, $1.15 billion in total liabilities,
and a $44.80 million in total stockholders' equity.
* * *
As reported by the Troubled Company Reporter on Feb. 2, 2011,
Moody's Investors Service downgraded NCO Group, Inc.'s CFR to Caa1
from B3 and changed the outlook to negative. Simultaneously,
Moody's has also downgraded each of NCO's debt instrument ratings
by one notch and lower the Speculative Grade Liquidity rating to
SGL-4 from SGL3. The downgrade reflects Moody's concern that
greater than expected revenue declines and continued earnings
pressure will extend beyond current levels due to deteriorating
consumer payment patterns and weaker volumes. In addition,
Moody's expects financial flexibility will be further aggravated
by tightening headroom under its financial covenants and a
potential breach of covenants which will limit the company's
ability to draw upon its revolver. Also, the company faces an
impending maturity on its $100 million senior secured revolving
credit facility due November of 2011.
NEBRASKA BOOK: Seeks to Hire Pachulski Stang Ziehl as Co-Counsel
----------------------------------------------------------------
BankruptcyData.com reports that Nebraska Book Company filed with
the U.S. Bankruptcy Court a motion to retain Pachulski Stang Ziehl
& Jones (Contact: Laura Davis Jones) as co-counsel at hourly rates
ranging from $245 to $895; Kirkland & Ellis (Contact: Marc
Kieseistein) as attorney at the following hourly rates: partner at
$590 to $995, of counsel at $450 to $965, associate at $360 to $71
5, paraprofessional at 145 to 305; AlixPartners (Contact: Alan D.
Holtz) as restructuring advisor at the following hourly rates:
managing director at $740 to $995, director at $560 to $695, vice
president at $415 to $540, associate at $295 to $395, analyst at
$260 to $290 and paraprofessional at $200 to $220 and Rothschild
(Contact: Todd R. Snyder) as investment banker and financial
advisor for a monthly advisory fee of $175,000 and a completion
fee of $3.75 million.
About Nebraska Book Company
Lincoln, Nebraska-based Nebraska Book Company, Inc., is one of the
leading providers of new and used textbooks for college students
in the United States. Nebraska Book and seven affiliates filed
separate Chapter 11 petitions (Bankr. D. Del. Case Nos. 11-12002
to 11-12009) on June 27, 2011. Hon. Peter J. Walsh presides over
the case. lawyers at Kirkland & Ellis LLP and Pachulski Stang
Ziehl & Jones LLP, serve as the Debtors' bankruptcy counsel. The
Debtors; restructuring advisors are AlixPartners LLC; the
investment bankers are Rothschild, Inc.; the auditors are Deloitte
& Touche LLP; and the claims agent is Kurtzman Carson Consultants
LLC. As of the petition date, the Debtors had consolidated assets
of $657,215,757 and debts of $563,973,688.
JPMorgan Chase Bank N.A., as administrative agent for the DIP
lenders, is represented by lawyers at Richards, Layton & Finger,
P.A., and Simpson Thacher & Bartlett LLP. J.P. Morgan Investment
Management Inc., the DIP arranger, is represented by lawyers at
Bayard, P.A., and Willkie Farr & Gallagher LLP.
An ad hoc committee of holders of more than 50% of the Debtors'
Second Lien Notes is represented by lawyers at Brown Rudnick. An
ad hoc committee of holders of the Debtors' 8.625% unsecured
notes are represented by Milbank, Tweed, Hadley & McCloy LLP.
NEW STREAM: Committee Wants Houlihan Lokey's April Fees Paid
------------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
cases of New Stream Secured Capital, Inc., et al., filed with the
U.S. Bankruptcy Court for the District of Delaware an amended
motion to retain Houlihan Lokey Howard & Zukin Capital, Inc., nunc
pro tunc to, and effective as of, April 8, 2011, as financial
advisor and investment banker.
The Committee relates that on May 16, 2011, the Court held a
hearing on the original application and stated that Houlihan is
entitled to a flat fee under -- or a fee under 328 going forward.
Following the hearing, Houlihan Lokey, after consultation with the
creditors' Committee and the Creditors' Committee's attorneys,
determined that it would withdraw from its engagement by the
Creditors' Committee, effective as of May 16.
By the amended application, the Creditors' Committee seeks to
retain Houlihan Lokey for the time period from April 8, through
May 16. Houlihan Lokey would file a final fee application seeking
payment of $188,709 for its monthly fee on a pro-rated basis, well
as for reimbursement of its out-of-pocket expenses in the amount
of $32,442.
Michael Morrison and Charles Thresh, the joint NSSC receivers, and
John McKenna, the NSI receiver, who all filed objections to the
original application, have agreed to the terms of the retention.
The Committee set a July 14 hearing on its requested retention of
Houlihan Lockey.
About New Stream
New Stream is an inter-related group of companies that
collectively comprise an investment fund, headquartered in
Ridgefield, Connecticut. Founded in 2002, New Stream focuses on
providing non-traded private debt to the insurance, real estate
and commercial finance sectors.
On March 7, 2011, when New Stream was still soliciting votes on
the Chapter 11 plan, certain investors filed a petition (Bankr. D.
Del. Lead Case No. 11-10690) seeking to force three New Stream
funds -- New Stream Secured Capital Fund (U.S.) LLC, New Stream
Secured Capital Fund P1 (Cayman), Ltd. and New Stream Secured
Capital Fund K1 (Cayman), Ltd. -- to Chapter 11 bankruptcy.
The petitioning investors in the New Stream investment enterprise
say they are collectively owed over $90 million, representing
roughly 28% of the approximately $320 million owed to all U.S. and
Cayman investors. The Petitioners are represented by (i) Joseph
H. Huston, Jr., Esq., Maria Aprile Sawczuk, Esq., Meghan A.
Cashman, Esq., at Stevens & Lee, P.C., in Wilmington, Delaware,
and Beth Stern Fleming, Esq., at Stevens & Lee, P.C., in
Philadelphia, Pennsylvania, and Nicholas F. Kajon, Esq., David M.
Green, Esq., and Constantine Pourakis, Esq., at Stevens & Lee,
P.C., in New York, (ii) Edward Toptani, Esq., at Toptani Law
Offices, in New York, and (iii) John M Bradham, Esq., and David
Hartheimer, Esq., at Mazzeo Song & Bradham LLP, in New York.
New Stream Secured Capital, Inc., and three affiliates (New Stream
Insurance, LLC, New Stream Capital, LLC, and New Stream Secured
Capital, L.P.) filed Chapter 11 petitions (Bankr. D. Del. Lead
Case No. 11-10753) on March 13, 2011, with a proposed prepackaged
Chapter 11 plan.
Kurt F. Gwynne, Esq., J. Cory Falgowski, Esq., Michael J.
Venditto, Esq., and Scott M Esterbrook, Esq., at Reed Smith LLP,
serve as the Debtors' bankruptcy counsel. Kurtzman Carson
Consultants LLC is the Debtors' claims and notice agent.
NSSC, Inc., estimated its assets and debts at up to $50,000. NSC
estimated its assets at $100,000 to $500,000 and debts at $50,000
to $100,000. NSI estimated its assets at $100 million to
$500 million and debts at $50 million to $100 million. NSSC, LP,
estimated its assets and debts at $500 million to $1 billion.
NSI's insurance portfolio is being sold for $184.35 million as
part of the Chapter 11 plan. The aggregate indebtedness secured
by the investment portfolio of NSSC is $688,412,974. NSI owes
$81,573,376 to certain account classes under a Bermuda fund.
The Official Committee of Unsecured Creditors proposes to hire
Kurtzman Carson Consultants LLC as its communications agent;
Houlihan Lokey Howard & Zukin Capital, Inc., as its financial
advisor and investment banker; and Zolfo Cooper, LLC, as its
forensic accountants and litigation support consultants.
New Stream completed a sale of its assets on June 3. New Stream
sold the portfolio of life-insurance policies to an affiliate of
McKinsey & Co. for $127.5 million. There were no competing bids
at auction.
NEW STREAM: Gets Go Signal to Employ Lyrics Services as Consultant
------------------------------------------------------------------
The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware authorized New Stream Secured Capital, Inc.,
et al., to employ Lyric services, LLC as consultant.
Lyric is a consulting company comprised of Perry Gillies, former
president of the Debtors, well as certain former employees of the
Debtors that assisted the Debtors with the servicing of the
Insurance Portfolio.
Prior to the Petition Date, the Debtors negotiated, drafted and
solicited a Joint Plan of Reorganization, dated Jan. 25, 2011,
pursuant to which the Debtors contemplated the sale as part of the
Debtors' reorganization. While the sale did not close in
conjunction with the confirmation of the Plan, it has always been
the intent of the Debtors and Mr. Gillies that upon the closing of
the sale, Mr. Gillies would be devoting all of his time to Lyric
to continue to service the Insurance Portfolio for the new owners
and the services he performed as president would no longer be
needed by the Debtors.
Accordingly, Mr. Gillies resigned as president of the Debtors
effective upon the closing of the sale. Notwithstanding his
resignation, access to Mr. Gillies' knowledge and experience,
particularly relating to the Insurance Portfolio and any claims
arising or relating thereto, will be necessary.
The consulting services provided by Lyric will include providing:
a) consultation, analysis and testimony in connection with
pending or threatened litigation in the Debtors' bankruptcy
cases; and
b) advice, interpretations, opinions, and technical analyses
relating to life insurance assets currently or previously
owned or managed by the Debtors.
The Debtors are also authorized to, without application to the
Court, pay Lyric's fees and expenses in the ordinary course of
business, provided that the Debtors will be required to notify the
Official Committee of Unsecured Creditors upon receiving invoices
from Lyrics aggregating more than $45,000. The Committee are also
entitled to object to the Debtors' continued retention of Lyrics.
The hourly rate of Mr. Gillies is $315 and the hourly rate for
other Lyrics employees is $115.
To the best of the Debtors' knowledge, Lyrics is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
About New Stream
New Stream is an inter-related group of companies that
collectively comprise an investment fund, headquartered in
Ridgefield, Connecticut. Founded in 2002, New Stream focuses on
providing non-traded private debt to the insurance, real estate
and commercial finance sectors.
On March 7, 2011, when New Stream was still soliciting votes on
the Chapter 11 plan, certain investors filed a petition (Bankr. D.
Del. Lead Case No. 11-10690) seeking to force three New Stream
funds -- New Stream Secured Capital Fund (U.S.) LLC, New Stream
Secured Capital Fund P1 (Cayman), Ltd. and New Stream Secured
Capital Fund K1 (Cayman), Ltd. -- to Chapter 11 bankruptcy.
The petitioning investors in the New Stream investment enterprise
say they are collectively owed over $90 million, representing
roughly 28% of the approximately $320 million owed to all U.S. and
Cayman investors. The Petitioners are represented by (i) Joseph
H. Huston, Jr., Esq., Maria Aprile Sawczuk, Esq., Meghan A.
Cashman, Esq., at Stevens & Lee, P.C., in Wilmington, Delaware,
and Beth Stern Fleming, Esq., at Stevens & Lee, P.C., in
Philadelphia, Pennsylvania, and Nicholas F. Kajon, Esq., David M.
Green, Esq., and Constantine Pourakis, Esq., at Stevens & Lee,
P.C., in New York, (ii) Edward Toptani, Esq., at Toptani Law
Offices, in New York, and (iii) John M Bradham, Esq., and David
Hartheimer, Esq., at Mazzeo Song & Bradham LLP, in New York.
New Stream Secured Capital, Inc., and three affiliates (New Stream
Insurance, LLC, New Stream Capital, LLC, and New Stream Secured
Capital, L.P.) filed Chapter 11 petitions (Bankr. D. Del. Lead
Case No. 11-10753) on March 13, 2011, with a proposed prepackaged
Chapter 11 plan.
Kurt F. Gwynne, Esq., J. Cory Falgowski, Esq., Michael J.
Venditto, Esq., and Scott M Esterbrook, Esq., at Reed Smith LLP,
serve as the Debtors' bankruptcy counsel. Kurtzman Carson
Consultants LLC is the Debtors' claims and notice agent.
NSSC, Inc., estimated its assets and debts at up to $50,000. NSC
estimated its assets at $100,000 to $500,000 and debts at $50,000
to $100,000. NSI estimated its assets at $100 million to
$500 million and debts at $50 million to $100 million. NSSC, LP,
estimated its assets and debts at $500 million to $1 billion.
NSI's insurance portfolio is being sold for $184.35 million as
part of the Chapter 11 plan. The aggregate indebtedness secured
by the investment portfolio of NSSC is $688,412,974. NSI owes
$81,573,376 to certain account classes under a Bermuda fund.
The Official Committee of Unsecured Creditors proposes to hire
Kurtzman Carson Consultants LLC as its communications agent;
Houlihan Lokey Howard & Zukin Capital, Inc., as its financial
advisor and investment banker; and Zolfo Cooper, LLC, as its
forensic accountants and litigation support consultants.
New Stream completed a sale of its assets on June 3. New Stream
sold the portfolio of life-insurance policies to an affiliate of
McKinsey & Co. for $127.5 million. There were no competing bids
at auction.
NON-INVASIVE MONITORING: Steve Mrha Resigns as COO
--------------------------------------------------
Steve Mrha, the chief operating officer of Non-Invasive Monitoring
Systems, Inc., resigned to pursue other interests effective
July 1, 2011.
About Non-Invasive Monitoring
Based in Miami, Florida, Non-Invasive Monitoring Systems, Inc.,
(OTC BB: NIMU) -- http://www.nims-inc.com/-- is primarily engaged
in the research, development, manufacturing and marketing of a
line of motorized, non-invasive, whole body, periodic acceleration
platforms, which are intended as aids to improve circulation and
joint mobility, relieve minor aches and pains, relieve morning
stiffness, relieve troubled sleep and as mechanical feedback
devices for slow rhythmic breathing exercise for stress
management.
The Company's balance sheet at April 30, 2011, showed
$1.27 million in total assets, $1.32 million in total liabilities,
and a stockholders' deficit of $53,000.
As reported in the Troubled Company Reporter on Nov. 3, 2010,
Morrison, Brown Argiz & Farra, LLP, in Miami, Florida, expressed
substantial doubt about Non-Invasive Monitoring Systems' ability
to continue as a going concern, following the Company's fiscal
year ended July 31, 2010. The independent auditors noted that the
Company has experienced recurring net losses, cash outflows from
operating activities and has an accumulated deficit and
substantial purchase commitments.
NORTH LAS VEGAS: State Close to Taking Control of Finances
----------------------------------------------------------
The Las Vegas Sun reports that Senate Chairman of the
Legislature's Government Affairs Committee State Sen. John Lee
said that financially troubled North Las Vegas is in danger of
having its finances taken over by the state. The report relates
that Mr. Lee said, "No one wants to say "receivership," but it
might be the only way to save my community."
State law allows the Department of Taxation to take over local
government finances in the case of a "severe financial emergency."
Mr. Lee called the state's taking control of the city's purse a
"last resort," according to Las Vegas Sun.
The Las Vegas Sun discloses that the city of North Las Vegas is
losing $165,000 a week after a judge issued a temporary
restraining order preventing the layoff of public safety
employees.
In a fiscal emergency, the state's taxation director could force
cuts or tax increases, according to sources, Las Vegas Sun says.
It's unclear whether the state would assume any debt or have to
pay for city services, with one observer noting that this was
largely "uncharted territory."
North Las Vegas has seen steep declines in tax revenues during the
recession, while the city has seen costs escalate as it pays for
big projects planned in anticipation of continued growth, the Las
Vegas Sun notes.
The Las Vegas Sun adds that while local governments have been
financially strapped and forced to make big cuts in recent years,
this would be the first time a Southern Nevada municipality has
been taken over by the state.
NOVADEL PHARMA: Dr. Bergstrom's Employment Extended to June 2012
----------------------------------------------------------------
As previously disclosed, NovaDel Pharma Inc., had entered into an
employment agreement with David H. Bergstrom, Ph.D. on Dec. 4,
2006. The Employment Agreement expired by its terms on Dec. 4,
2009. On Dec. 31, 2009, the Compensation Committee of the Board
of Directors of the Company approved the recommendation to
maintain Dr. Bergstrom's services and to continue his employment
on the same terms and conditions as the Employment Agreement for a
period of one year from the expiration date of the Employment
Agreement. On March 23, 2011, the Compensation Committee approved
the recommendation to further extend Dr. Bergstrom's employment on
the same terms and conditions as the Employment Agreement through
June 30, 2011.
On July 5, 2011, the Compensation Committee approved the
recommendation to further extend Dr. Bergstrom's employment on the
same terms and conditions as the Employment Agreement through
June 30, 2012. On July 5, 2011, the Company and Dr. Bergstrom
entered into an amendment to the Employment Agreement
memorializing the extended term through June 30, 2012.
A full-text copy of the amended Employment Agreement is available
for free at http://is.gd/12zgY8
About NovaDel Pharma
Bridgewater, N.J.-based NovaDel Pharma Inc. (OTC BB: NVDL)
-- http://www.novadel.com/-- is a specialty pharmaceutical
company that develops oral spray formulations of marketed
pharmaceutical products. The Company's patented oral spray drug
delivery technology seeks to improve the efficacy, safety, patient
compliance, and patient convenience for a broad range of
prescription pharmaceuticals.
The Company's balance sheet at March 31, 2011, showed $2.7 million
in total assets, $9.4 million in total liabilities, and a
stockholders' deficit of $6.7 million.
As reported in the TCR on April 1, 2011, J.H. Cohn LLP, in
Roseland, New Jersey, expressed substantial doubt about Novadel
Pharma's ability to continue as a going concern, following the
Company's 2010 results. The independent auditors noted that the
Company has suffered recurring losses from operations and negative
cash flows from operating activities.
OLSEN AGRICULTURAL: Employs Moss Adams as Tax Accountants
---------------------------------------------------------
Olsen Agricultural Enterprises LLC sought and obtained authority
from the U.S. Bankruptcy Court for the District of Oregon to
employ Moss Adams LLP as tax accountants effective as of June 22,
2011.
The Debtor needs Moss Adams to work on unfiled tax returns for
2009 and 2010 and help formulate a Chapter 11 plan and disclosure
statement.
The Debtor will pay Moss Adams according to its customary hourly
rates. The persons presently designated to work on the Debtor's
case are:
Name Status Hourly Rates
---- ------ ------------
Joseph Karas Managing Partner $390
James Gaffney Partner $390
Melissa Wall Manager $220
Sarah Anderson Senior Accountant $180
Briana Crider Staff Accountant $145
Jaclyn Ng Staff Accountant $145
Adam Smithers Staff Accountant $145
The Debtor asserts that Moss Adams is a "disinterested person" as
the term is defined in Section 101(14) of the Bankruptcy Code.
About Olsen Agricultural Enterprises
Based in Monmouth, Oregon, Olsen Agricultural Enterprises LLC
operates an agricultural enterprise on roughly 7,762 acres of
owned and leased land located in Benton, Linn and Polk Counties.
Its business is comprised principally of three divisions: (a)
Olsen Seed Company, which produces and sells a variety of
grass seed and grains on 5,934 acres; (b) Olsen Agriculture, which
grows and sells peppermint, nursery stock, squash, hazelnuts and
blueberries on 1,334 acres; and (c) Olsen Family Vineyards, which
grows a variety of grapes on 494 acres and produces and sells
quality wines under the "Viridian" label as well as private
labels.
Olsen Agricultural Enterprises is the surviving entity of a merger
transaction that was consummated on June 1, 2011. In the merger
transaction, Olsen Agricultural Company, Inc., an Oregon
corporation, Jenks-Olsen Land Co., an Oregon general partnership,
Olsen Vineyard Company, LLC, an Oregon limited liability company
and The Olsen Farms Family Limited Partnership were merged with
and into Olsen Agricultural Enterprises.
Olsen Agricultural Enterprises filed for Chapter 11 bankrutpcy
(Bankr. D. Ore. Case No. 11-62723) on June 1, 2011. Judge Frank
R. Alley III presides over the case. Greene & Markley, P.C., acts
as the Debtor's bankruptcy counsel. Clyde A. Hamstreet &
Associates, LLC, serves as the Debtor's restructuring consultant
and financial advisor.
An official committee of unsecured creditors has been appointed in
the case.
In its petition, the Debtor estimated $10 million to $50 million
in assets and debts. The petition was signed by Robin G. Olsen,
operations director.
For the fiscal year ended December 31, 2010, OAC reported total
revenues of $6,428,880 and a net loss of ($5,791,310). At the time
of the merger, on a consolidated basis, the books and records of
OAC, JOLC and OVC reflected assets totaling $29.8 million and
liabilities totaling $37.2 million. The fair market value of the
Debtor's assets, on a going concern basis, is roughly $50 million.
OMEGA NAVIGATION: Greek Tanker Owner Files for Ch. 11 in Houston
----------------------------------------------------------------
Athens, Greece-based Omega Navigation Enterprises Inc. and
affiliates, owner and operator of tankers carrying refined
petroleum products, filed for Chapter 11 protection (Bankr. S.D.
Tex. Lead Case No. 11-35926) on July 8 in Houston.
Omega is an international provider of marine transportation
services focusing on seaborne transportation of refined petroleum
products. The Debtors disclosed assets of $527.6 million and debt
totaling $359.5 million. Together, the Debtors wholly own a fleet
of eight high-specification product tankers, with each vessel
owned by a separate debtor entity.
Secured lenders with first liens on the vessels are owed a total
of $242.7 million. HSH Nordbank AG is agent for the lenders that
include Bank of Scotland and Dresdner Bank AG. The ships are
encumbered with $36.2 million in second mortgages with NIBC Bank
NV is agent.
"The global recession lessened demand for international charter
shipping of refined petroleum products, and this negatively
impacted Omega's business," Gregory McGrath, Chief Financial
Officer of Omega Navigation, said in a court filing.
Mr. McGrath notes that at the time Omega undertook its senior debt
obligations, and also thereafter, Omega was promised by its senior
lenders a three-year extension on its senior debt facility if
certain conditions were met. Omega believes it has met those
conditions, yet Omega's senior lenders have not consented to the
agreed upon extension. Consequently, under threat of default and
acceleration, Omega has been forced to file the chapter 11 cases
to protect its interests.
Prepetition Omega sued senior bank lenders in the Courts of the
Hellenic Republic Greece contending the lenders violated an
agreement to grant a three-year extension on a loan that otherwise
matured in April.
In the first lawsuit, Omega asserts, among other things, that its
senior lenders materially breached an agreement to extend the time
for repayment of principal under the Senior Facility for three
years from the original due date, or until April 12, 2014. Omega
also asserts, among other things, that the Senior Lenders have
engaged in abusive exploitation their dominant position, based on
Article 82 of the European Convention and the related European
Commission Regulation 1/2003, which are applicable in Greece, as
well as pursuant to Greek Law 703/77.
In the second lawsuit, Omega asserts, among other things, that it
was seriously damaged by, among other things, the Senior Lenders'
breach and abusive actions, and seeks damages of approximately
$570,000,000 (plus interest).
The bankruptcy filing does not include affiliate Omega Management
Inc., the vessels' manager, and affiliates with partial ownership
interests in other vessels.
Omega reported a net loss of $394,000 on revenue of $34.4 million
for six months ended June 2010.
The vessels securing the $278.9 million debt as of the Petition
Date have book value exceeding $390 million, according to the
Debtors.
OMEGA NAVIGATION: Press Release Announcing the Bankruptcy Filing
----------------------------------------------------------------
Omega Navigation Enterprises Inc. disclosed that it and certain of
its subsidiaries have filed voluntary petitions under Chapter 11
of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the
Southern District of Texas (Houston). The Company believes that
the Chapter 11 process will facilitate restructuring, which is
designed to restore the Company to long-term financial health.
The Company believes that in light of the unwillingness of its
Senior Lenders to work with Omega on an out-of-court restructuring
of its Senior Loan Agreement, the Company needs the protection of
Chapter 11 to ensure the uninterrupted operation of its vessels
and services to its customers. The Company is disappointed in the
Senior Lenders' intransigence and has commenced litigation against
them in Greece. The Company wishes to assure its customers and
suppliers that Omega will continue to operate in the ordinary
course of business during its Chapter 11 proceedings.
The Chapter 11 filings include the following companies and
vessels: Omega Navigation Enterprises, Inc.; Omega Navigation
(USA) LLC; Galveston Navigation Inc (the Omega Lady Miriam);
Beaumont Navigation Inc (the Omega Lady Sarah); Carrolton
Navigation Inc (the Omega Prince); Decatur Navigation Inc (the
Omega Princess); Elgin Navigation Inc (the Omega Queen); Fulton
Navigation Inc (the Omega King); Orange Navigation Inc (the Omega
Emmanuel); and Baytown Navigation Inc (the Omega Theodore).
The Chapter 11 filings do not include Omega Management Inc, the
Company's technical vessel manager, nor does it include the
Company's wholly-owned subsidiary Omnicrom Holdings Ltd, which
indirectly owns a 50% interest in each of the vessels Omega Duke
and Alpine Marina through two separate joint venture entities, or
Omega Investments Inc, which owns 80% of OD Investment Inc, the
owner of the vessels Megacore Honami, Megacore Philomena and of
Hull 2295 (under construction) and Hull 2299 (under construction).
In addition, as separately announced by the Company, effective
July 1, 2011, the Company's joint venture with Topley Corporation,
named Megacore Shipping Ltd., was terminated. This termination
will have no effect on the Chapter 11 proceedings.
Omega's principal legal advisor for the restructuring process and
Chapter 11 proceedings is Bracewell and Giuliani LLP. The
Company's financial advisor is Jefferies & Company, Inc.
Omega Navigation Enterprises, Inc. (NASDAQ: ONAV, SGX: ONAV50)
-- http://www.omeganavigation.com/-- is an international provider
of global marine transportation services through the ownership and
operation of double hull product tankers. The current fleet
includes twelve double hull product tankers with a carrying
capacity of about 680,000 dwt. Eight of the vessels are fully
owned by the Company and four are owned through equal partnership
joint ventures with a wholly owned subsidiary of Glencore
International AG.
The Company was incorporated in the Marshall Islands in February
2005. Its principal executive offices are located in Athens,
Greece and it also maintains an office in the United States.
OMEGA NAVIGATION: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Omega Navigation Enterprises, Inc.
61. Vasilisis Sofias Avenue
115 21 Athens
Greece
Bankruptcy Case No.: 11-35927
Affiliates that simultaneously sought Chapter 11 protection:
Debtor Case No.
------ --------
Baytown Navigation Inc. 11-35926 (Lead Debtor)
Galveston Navigation Inc. 11-35928
Beaumont Navigation Inc. 11-35930
Carrolton Navigation Inc. 11-35931
Decatur Navigation Inc. 11-35933
Elgin Navigation Inc. 11-35934
Fulton Navigation Inc. 11-35936
Orange Navigation Inc. 11-35937
Omega Navigation (USA) LLC 11-35938
Chapter 11 Petition Date: July 8, 2011
Court: U.S. Bankruptcy Court
Southern District of Texas (Houston)
Judge: Jeff Bohm
Debtor's Counsel: Jason Gary Cohen, Esq.
BRACEWELL & GIULIANI LLP
711 Louisiana Street, Suite 2300
Houston, TX 77002
Tel: (713) 221-1416
Fax: (713) 222-3209
E-mail: jason.cohen@bgllp.com
- and -
William Alfred Wood, III, Esq.
BRACEWELL & GIULIANI LLP
711 Louisiana Street, Suite 2300
Houston, TX 77002-2781
Tel: (713) 223-2300
Fax: (713) 221-1212
E-mail: Trey.Wood@bgllp.com
Debtors'
Financial
Advisor: JEFFERIES & COMPANY, INC.
Total Assets: $527.6 million
Total Debts: $359.5 million
The Company did not file a list of creditors together with its
petition.
The petitions were signed by George Kassiotis, president.
ONE RENAISSANCE: Wells Fargo Wants Stay Lifted for "Cause"
----------------------------------------------------------
Wells Fargo Bank, N.A., successor by merger to Wells Fargo Bank
Minnesota, N.A., as trustee for the registered holders of Credit
Suisse First Boston Mortgage Securities Corp., Commercial Mortgage
Pass-Through Certificates, Series 2001-CK1 files a motion seeking
relief from the automatic stay as to certain real property and
rents related thereto.
Wells Fargo is the holder of a promissory note amounting
$18,800,000 from the Debtor, which is secured by a deed of trust
and security agreement granting Wells Fargo a security interest in
a six story office building at 3301 Benson Drive, Raleigh, North
Carolina.
The Note is further secured by an assignment of leases and rents,
pursuant to which the Debtor transferred and assigned the leases,
rents, and profits from the Real Property to Wells Fargo.
Pursuant to the Assignment of Leases, the Debtor's license to
collect the Rents from the Real Property terminated on January 11,
2011 and thereafter all Rents from the Real Property were to be
held in trust by the Debtor for the sole and exclusive benefit of
Wells Fargo.
After the expiration of the Debtor's license to collect the Rents
on January 11, 2011 through the Petition Date, the Debtor
transferred approximately $64,876 to its parent Renaissance
Holdings, LLC.
In addition, the Debtor on the Petition Date paid a leasing
commission to its affiliate DeWitt Real Estate Services Inc f/k/a
DeWitt Real Estate Services LLC of $43,562 in addition to
approximately $18,020 of what are believed to be expense
reimbursements and monthly management fees for January 2011.
After the default by the Debtor under the terms of the Loan
Documents, Wells Fargo commenced a foreclosure proceeding and
filed a petition for the appointment of a temporary and permanent
receiver on March 9, 2011.
Robert A. Cox, Jr., Esq., at McGuireWoods LLP, in Charlotte, North
Carolina, asserts that the Debtor filed its bankruptcy case in
order to stop Wells Fargo from having a receiver appointed for the
Real Property.
On the Petition Date, Wells Fargo was owed approximately
$18,421,756 in principal, interest and fees under the Note.
Postpetition, the Holder has received payments from the Debtor
totaling $361,873 which is an amount equal to three months of
interest at the non-default rate under the Note on only the
principal balance due under the Note, Mr. Cox notes.
" The Debtor's only source of income are the Rents which have been
assigned to the Holder," Mr. Cox tells the Court.
In addition, Mr. Cox notes that the Debtor will only have a cash
balance of $79,200 in its operating account as of June 30, 2011.
The Real Property was valued at $17,300,000 by the National
Valuation Consultants, Inc.
On June 7, 2011, the Debtor filed its Chapter 11 Plan of
Reorganization, which classifies the claim of Wells in Class II as
a fully secured obligation of the Debtor. The Plan provides that
the claim of Wells Fargo will receive this treatment: beginning
on the first day of the first full month following the Plan's
effective date, the Debtor will initially make monthly interest
only payments to Holder at a rate of 4.5% per annum -- as opposed
to the current non-default rate of interest under the Note of
8.34% per annum -- for a period of a year after the Effective
Date. After the year initial period, the Debtor will commence
monthly payments of principal and interest based upon a 25-year
amortization schedule with interest accruing at a fixed rate of
4.5% per annum. The final payment of all principal and unpaid
interest will be due seven years after the Effective Date.
Wells Fargo objects to the treatment of its claim as proposed
under the Plan, and intends to object to, and vote to reject, the
Plan in its current form, Mr. Cox tells the Court.
By this motion, Wells Fargo wants relief from the automatic stay
as to the Real Property and the Rents based upon the lack of
equity in the Real Property.
Mr. Cox points out that as the appraisal demonstrates, there is no
equity in the Real Property above the amount of the Holder's
claim. He adds that this is further supported by the Debtor's
inability to obtain other permanent financing to replace the
existing indebtedness.
Given the lack of equity, Wells Fargo is not adequately protected
in the Debtor's continued use of the Real Property and the Rents,
Mr. Cox asserts. He adds that although the Debtor has been making
postpetition interest payments to Wells Fargo, the payments are
being made from the Rents that are Wells Fargo's collateral, which
outside of bankruptcy, Wells Fargo would otherwise be entitled to
receive.
Raleigh, North Carolina-based One Renaissance, LLC, a limited
liability company, filed for Chapter 11 bankruptcy protection
(Bankr. E.D. N.C. Case No. 11-01793) on March 9, 2011. Jason L.
Hendren, Esq., at Hendren & Malone, PLLC, serves as the Debtor's
bankruptcy counsel. The Debtor estimated its assets and debts at
$10 million to $50 million.
No creditors committee has been appointed in the Debtor's case.
OUTSOURCE HOLDINGS: Examiner Can Retain Traxi as Fin'l Advisors
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
authorized Anthony J. Pacchia, the examiner appointed in the
Chapter 11 case of Outsource Holdings, Inc., to retain Traxi, LLC,
as his financial advisors.
As reported in the Troubled Company Reporter on June 16, 2011,
during its retention, Traxi, LLC, will, among other things:
a. investigating the Debtor's pre- and post-petition sales
efforts and all parts of the process leading up to and
including the Debtor's presentation to the Bankruptcy
Court of the Sale Motion and entry into the transactions
described therein;
b. investigating the Debtor's current stalking horse bid and
whether it is fair;
c. determining and reporting to the Court whether a higher or
better sale can be achieved;
The hourly rates of Traxi, LLC personnel are:
Personnel Rate
--------- ----
Managing Directors $450 - $595
Managers/Directors $275 - $450
Associates/Analysts $175 - $275
About Outsource Holdings
Lubbock, Texas-based Outsource Holdings, Inc.'s only significant
asset is its ownership of all of the outstanding capital stock of
Jefferson Bank, which is a state bank with five branch locations
in the Dallas/Fort Worth metroplex.
Outsource Holdings believes that a sale/merger of its interests in
Jefferson Bank before August 2011 offers the best opportunity for
maximizing the value of this asset for this bankruptcy estate and
its creditors. The Debtor has been unable to obtain consent from
its creditors to conduct a sale or merger outside of bankruptcy.
Since Outsource Holdings believes that a sale before August 2011
is necessary to avoid significant and sudden further declines in
the value of its interests in Jefferson Bank, Outsource Holdings
believes its fiduciary duties to its creditor body as a whole
required the initiation of the bankruptcy case.
Outsource Holdings filed for Chapter 11 bankruptcy protection on
April 3, 2011 (Bankr. N.D. Tex. Case No. 11-41938). Jeff P.
Prostok, Esq., at Forshey & Prostok, LLP, serves as Outsource
Holdings' bankruptcy counsel. The Debtor disclosed $10,571,121 in
assets and $13,887,431 in liabilities as of the Chapter 11 filing.
No creditors' committee has been appointed in the case.
OVERLAND STORAGE: Amends Form S-3 Registration Statement
--------------------------------------------------------
Overland Storage, Inc., filed with the U.S. Securities and
Exchange Commission Amendment No.1 to Form S-3 registration
statement relating to the resale or other disposition by certain
selling shareholders of up to an aggregate of (i) 8,653,045
outstanding shares of common stock and (ii) 3,911,167 shares of
common stock issuable upon the exercise of outstanding warrants.
The shares of common stock and warrants exercisable to purchase up
to 3,807,331 shares of common were issued and sold to certain
selling shareholders pursuant to a Purchase Agreement, dated as of
March 16, 2011, between the Company and the selling shareholders
party thereto, or the Purchase Agreement. The remaining warrants
to purchase up to 103,836 shares of common stock represent a
portion of the warrants initially issued to the placement agent as
partial compensation for its services in connection with the
transactions contemplated by the Purchase Agreement that were
subsequently transferred to certain selling shareholders
identified in this prospectus.
The selling shareholders may, from time to time, sell, transfer,
or otherwise dispose of any or all of their shares of common stock
on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These dispositions
may be at fixed prices, at prevailing market prices at the time of
sale, at prices related to the prevailing market price, at varying
prices determined at the time of sale, or at negotiated prices.
The Company is not offering any shares of common stock for sale
under this prospectus, and the Company will not receive any of the
proceeds from the sale or other disposition of the shares of
common stock. However, the Company will receive the exercise
price of any warrants exercised for cash.
The Company's common stock is traded on The NASDAQ Capital Market
under the symbol "OVRL". On May 17, 2011, the last reported sale
price for the Company's common stock on The NASDAQ Capital Market
was $2.10 per share.
The Company will pay the expenses related to the registration of
the shares of common stock covered by this prospectus. The
selling shareholders will pay any commissions and selling expenses
they may incur.
A full-text copy of the amended prospectus is available at no
charge at http://is.gd/5qKfg6
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.
PACESETTER FABRICS: Has Interim Access to Cathay Cash Collateral
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
approved a stipulation authorizing, on an interim basis,
Pacesetter Fabrics, LLC, to use the cash collateral.
As reported in the Troubled Company Reporter on July 7, 2011, the
Debtor and Cathay Bank entered into a stipulation for the Debtor's
interim use of the bank's cash collateral until Sept. 16, and the
grant of adequate protection.
The Stipulation requires the Debtor and Rock to identify obsolete
inventory and formulate a program by July 17 to sell the inventory
by September, to pay the bank an additional minimum payout of
$400,000 over and above all of the payments due to the lender.
The bank consents to Pacesetter's payment of $150,000 as retainer
to the Debtor's bankruptcy counsel.
Upon execution of the Stipulation, the Debtor paid the bank
$250,000. The deal requires the Debtor to pay $10,000 to the bank
each week beginning June 27.
The bank asserts that it is owed $12.6 million in the aggregate
plus attorneys' fees and costs as of June 17, 2011, under various
prepetition secured loan agreements with the Debtor.
The debt includes a $17.5 million loan under a 2009 agreement
among Pacesetter, its affiliate Rock L.A. Fashion LLC, and the
bank. The Debtor and Rock defaulted on the loan by failing to
make payment due December 2009. In February 2010, the parties
executed a forbearance agreement; the lender also provided a $4.3
million term loan to pay down the prior loan. The term loan was
due April 30, 2011. The Debtor and Rock defaulted on the loans by
failing to make required payments and violating disclosure
requirements.
The Debtor is also a guarantor under a $2 million loan extended by
the bank to Ramin Namvar, the manager of both the Debtor and Rock.
Mr. Namvar is also in default of his loan.
The Court said that the stipulation have established the prima
facie validity, priority, and extent of Cathay's prepetition
secured claim, and Cathay's need for and rights to the grant of
adequate protection for Pacesetter's use of Cathay's cash
collateral for postpetition operations of Pacesetter.
A final hearing will be conducted with regard to the motion on
Sept. 13, 2011, at 10:00 a.m. Objections, if any, are due
Sept. 6.
About Pacesetter Fabrics
Based in City of Commerce, California, Pacesetter Fabrics, LLC,
dba Pacesetter Off Price and Pacesetter Garments, is a distributor
of quality textile and garment fabrics in the United States and
international markets. The Company has been in business for over
14 years. The Company is owned 98% by Net, LLC, a California
limited liability company, 1% by Leora Namvar (Ramin Namvar's
wife), and 1% by Massoud Poursalimi (Leora Namvar and David
Poursalimi's father). Net LLC is in turn owned 99% by Ramin
Namvar and 1% Leora Namvar.
Pacesetter Fabrics filed for Chapter 11 bankruptcy (Bankr. C.D.
Calif. Case No. 11-36330) on June 17, 2011, estimating assets and
debts of $10 million to $50 million. Judge Ernest M. Robles
presides over the case. The Debtor is represented by Brian L.
Davidoff, Esq., C. John M. Melissinos, Esq., and Claire E. Shin,
Esq., at Rutter Hobbs & Davidoff Incorporated.
Brian Wygle -- Brian@lazarusresources.com -- president of Lazarus
Resources Group, LLC, a corporate turnaround consultant, assists
Pacesetter with its turnaround and reorganization efforts and the
financial affairs and management of the Company.
PACIFIC DEVELOPMENT: Deal Default Cues Lift of Central Bank's Stay
------------------------------------------------------------------
Central Bank notified the U.S. Bankruptcy Court for the District
of Utah that it is entitled for relief from the automatic stay
against the assets of Pacific Development, L.C. without further
notice or hearing. Central Bank also said that it is authorized
to pursue its remedies pursuant to the subject loan documents and
all other legal and equitable remedies against certain parcels the
real property defined in the stipulation as Trust Property No. 2
or Payson Commercial Property and the real property defined in the
Stipulation as Trust Property No. 3 or Heritage Village
Subdivision.
Central Bank related that the Debtor is in default under the terms
of the stipulation and the order based upon the its failure to
timely sell and close on the required number of lots from the
subject real properties.
Central Bank noted that the Debtor failed and refused to do these:
-- during the first quarter of 2011, the Debtor sold and closed
only five from the subject real properties. As a result,
the Debtor failed and refused to sell and close one of the
required six lots, as required in the stipulation and order.
-- during the second quarter of 2011, the Debtor did not sell
or close on any lots from the subject real properties. As a
result, the Debtor failed and refused to sell and close on
the required 12 lots, as required in the stipulation and
order.
A copy of the notice of default is available for free at:
http://bankrupt.com/misc/PACIFICDEVT_noticeofdefault.pdf
About Pacific Development
Provo, Utah-based Pacific Development, L.C., is the obligor on and
owner of various real estate development loans for properties
primarily located in Payson, Salem, Springville and Harrisburg,
Utah. The Company filed for Chapter 11 protection (Bankr. D. Utah
Case No. 10-22754) on March 10, 2010. Blake D. Miller, Esq., and
James W. Anderson, Esq., at Miller Guymon, PC, in Salt Lake City,
represent the Debtor in its restructuring effort. The Debtor
estimated its assets at $10 million to $50 million and
debts at $1 million to $10 million.
David P. Billings, Esq., and J. Thomas Beckett, Esq., at Parsons,
Behle & Latimer, P.C., in Salt Lake City, represent the Official
Committee of Unsecured Creditors.
PERKINS & MARIE: Wants to Hire Young Conaway as Delaware Counsel
----------------------------------------------------------------
Perkins & Marie Callender's Inc., et al., ask the U.S. Bankruptcy
Court for the District of Delaware for permission to employ the
law firm of Young Conaway Stargatt & Taylor, LLP as their Delaware
counsel.
The principal attorneys and paralegal designated to represent the
Debtors and their hourly rates are:
Robert S. Brady, partner $675
Robert F. Poppiti, Jr., associate $300
Morgan L. Seward, associate $280
Debbie Laskin, paralegal $225
Young Conaway received $25,000 initial retainer and another
$25,000 retainer supplement. In addition, the firm received a
payment of $24,992 on account of fees and expenses incurred
prepetition. The retainer was applied to the firm's outstanding
balance as of the Petition Date, $39,826.
To the best of the Debtors' knowledge, Young Conaway is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The Debtors set a July 12 meeting on the requested employment of
Young Conaway.
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.
Roberta A. Deangelis, U.S.s Trustee for Region 3, appointed seven
unsecured creditors to serve on the Official Committee of
Unsecured Creditors in the Debtors' cases.
PERKINS & MARIE: Taps Troutman Sanders as Bankruptcy Counsel
------------------------------------------------------------
Perkins & Marie Callender's Inc., et al., ask the U.S. Bankruptcy
Court for the District of Delaware for permission to employ
Troutman Sanders LLP as bankruptcy counsel.
Troutman has not received or been promised any compensation for
legal services rendered or to be rendered in connection with the
Debtors' cases.
To the best of the Debtors' knowledge, Troutman Sanders is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The Debtors set a July 12 meeting on the requested employment of
Troutman Sanders.
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.
Roberta A. Deangelis, U.S.s Trustee for Region 3, appointed seven
unsecured creditors to serve on the Official Committee of
Unsecured Creditors in the Debtors' cases.
PERKINS & MARIE: Taps Whitby Santarlasci as Financial Advisor
-------------------------------------------------------------
Perkins & Marie Callender's Inc., et al., ask the U.S. Bankruptcy
Court for the District of Delaware for permission to employ
Whitby, Santarlasci & Company as financial advisor and investment
banker to assist in the rehabilitating of their business and
developing, negotiating and confirming a plan or plans of
reorganization.
WS&Co. will be paid, among other things:
a) a monthly fee of $65,000, provided however that 50% of the
monthly fees paid will be credited against any
recapitalization fee or M&A fee;
b) an asset sale fee of 1.25% of the total consideration paid
or to be paid for the sale of assets conveyed in any asset
transaction, payable in cash upon the consummation of the
transaction;
c) a M&A fee equal to $1,500,000 payable in cash, however,
WS&Co. will be entitled to only a single M&A fee if more
than one M&A transaction is consummated; and
d) a recapitalization fee equal to $1,500,000 payable in cash.
To the best of the Debtors' knowledge, WS&Co. is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The Debtors set a July 12 meeting on the requested employment of
Whitby Santarlasci.
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.
Roberta A. Deangelis, U.S.s Trustee for Region 3, appointed seven
unsecured creditors to serve on the Official Committee of
Unsecured Creditors in the Debtors' cases.
PHILADELPHIA ORCHESTRA: Has Temporary Deal With Musicians
---------------------------------------------------------
The Associated Press reports that musicians and management of the
Philadelphia Orchestra have agreed to a temporary contract
extension while the cash-strapped institution is in bankruptcy
court.
According to the report, the extension of the concessionary
contract lasts through Nov. 13. It keeps the base pay for players
at $2,400 a week, or $124,800 a year.
The agreement gives both sides more time to reach a long-term deal
while the orchestra's Chapter 11 bankruptcy case continues. It
also means the orchestra will proceed without fearing a shutdown
of its summer residencies in Montreal and Saratoga Springs, N.Y.,
as well as a European tour in August and September.
The AP notes the main sticking point involves the musicians'
pension plan.
About the Philadelphia Orchestra
The Philadelphia Orchestra -- http://www.philorch.org/-- claims
to be among the world's leading orchestras. Bloomberg News says
the orchestra became the first major U.S. symphony to file for
bankruptcy protection, surprising the music world.
Previous conductors include Fritz Scheel (1900-07), Carl Pohlig
(1907-12), Leopold Stokowski (1912-41), Eugene Ormandy (1936-80),
Riccardo Muti (1980-92), Wolfgang Sawallisch (1993-2003), and
Christoph Eschenbach (2003-08). Charles Dutoit is currently chief
conductor, and Yannick Nezet-Seguin has assumed the title of music
director designate until he takes up the baton as The Philadelphia
Orchestra's next music director in 2012.
The Philadelphia Orchestra Association, The Academy of Music of
Philadelphia, Inc., and Encore Series, Inc., filed separate
Chapter 11 petitions (Bankr. E.D. Pa. Case Nos. 11-13098 to
11-13100) on April 16, 2011. Judge Eric L. Frank presides over
the case. The Philadelphia Orchestra Association is being advised
by Dilworth Paxson LLP, its legal counsel, and Alvarez & Marsal,
its financial advisor. Curley, Hessinger & Johnsrud serves as its
special counsel. In its petition, Philadelphia
Orchestra estimated $10 million to $50 million in assets and
debts.
Encore Series, Inc., tapped EisnerAmper LLP as accountants and
financial advisors.
Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed
seven members to the official committee of unsecured creditors in
the Debtors' case.
POST STREET: Files Schedules of Assets and Liabilities
------------------------------------------------------
Post Street, LLC, filed with the U.S. Bankruptcy Court for the
Northern District of California its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property Unknown
B. Personal Property $3,316
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $55,028,579
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $877,985
----------- -----------
TOTAL $3,316 $55,906,564
plus unknown
Post Street LLC, based in San Francisco, California, filed for
Chapter 11 bankruptcy (Bankr. Case No. 11-32255) on June 15, 2011.
Judge Thomas E. Carlson presides over the case. Eric D. Goldberg,
Esq., at Stutman, Treister and Glatt, serves as the Debtor's
bankruptcy counsel. In its petition, the Debtor estimated assets
and debts of $10 million to $50 million. The petition was signed
by Stanley W. Gribble, authorized agen
PRECISION OPTICS: Maturity of $600,000 Notes Extended to July 20
----------------------------------------------------------------
Precision Optics Corporation, Inc., on June 25, 2008, entered into
a Purchase Agreement, as amended on Dec. 11, 2008, with certain
accredited investors pursuant to which the Company sold an
aggregate of $600,000 of 10% Senior Secured Convertible Notes.
The Investors amended the Notes on several dates to extend the
"Stated Maturity Date" of the Notes. On July 6, 2011, the
Investors further amended the Notes to extend the "Stated Maturity
Date" to July 20, 2011. The Company believes the Investors will
continue to work with it to reach a positive outcome on the Note
repayment.
About Precision Optics
Headquartered in Gardner, Massachusetts, Precision Optics
Corporation, Inc., has been a developer and manufacturer of
advanced optical instruments since 1982. The Company designs and
produces high-quality micro-optics, medical instruments and other
advanced optical systems. The Company's medical instrumentation
line includes laparoscopes, arthroscopes and endocouplers and a
world-class product line of 3-D endoscopes for use in minimally
invasive surgical procedures.
The Company's balance sheet as of March 31, 2011, showed
$1.33 million in total assets, $2.27 million in total liabilities,
and a stockholders' deficit of $940,471.
As reported in the TCR on Sept. 27, 2010, Stowe & Degon LLC, in
Westborough, Mass., expressed substantial doubt about Precision
Optics' ability to continue as a going concern, following the
Company's results for the fiscal year ended June 30, 2010. The
independent auditors noted that the Company has suffered recurring
net losses and negative cash flows from operations.
PRO MACH: S&P Assigns 'B+' Corporate Credit Rating
--------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to Ohio-based Pro Mach Inc. "At the same time, we
assigned our 'B+' issue-level rating to the company's $255 million
senior secured credit facility (comprising a $35 million revolver
due 2016 and a $220 million term loan due 2017) with a recovery
rating of '3', indicating our expectation of a meaningful recovery
(50%-70%) in a default scenario. The outlook is stable," S&P
stated.
"The ratings on Pro Mach reflect its aggressive financial risk
profile and its weak business risk profile," said Standard &
Poor's credit analyst Peter Kelly. "The company operates in the
competitive and highly fragmented industry packaging equipment
industry, and its scope of operations is relatively narrow, marked
by limited diversity in end-markets and its mainly North American
presence. These factors are partially offset by the company's
sizable installed base, its breadth of integrated packaging
solutions, and its low capital intensity."
With the recently closed transaction, Pro Mach will be owned by
The Resolute Fund II L.P., an affiliate of private equity firm The
Jordan Co., and certain members of Pro Mach's management team. "We
view the company's overall diversity as relatively limited,
reflecting its North American footprint and focus on certain end-
markets. Demand for original equipment is relatively mature in
North America and exhibits some cyclicality, but the company
benefits from longstanding customer relationships and from a
sizeable installed base that provides for more stable and higher-
margin aftermarket revenues. This has enabled Pro Mach to sustain
EBITDA margins consistently in the high teens over the last few
years. The company's exposure to material cost is moderate, and
it has demonstrated some ability to pass on price increases to
customers in the past. This, coupled with modest capital
expenditures of about 1% of revenues annually and modest levels of
working capital, has led to the company's ability to generate
adequate cash flow generation," S&P related.
"We view Pro Mach's financial risk profile as aggressive. Pro
forma for the new debt issuance, we expect the company's financial
leverage as measured by the ratio of total adjusted debt to EBITDA
will be around 5.0x, and its ratio of funds from operations to
total adjusted debt will be slightly below 15%," according to S&P.
These ratios exclude the payment-in-kind (PIK) perpetual preferred
stock at the parent holding company. "While we view the preferred
stock as an obligation of the company, given its potential to be
taken out with debt in the event of a recapitalization, we note
that the absence of a maturity date and the absence of any cash
dividend payments provide the company with near-term financial
flexibility. For the rating, we expect credit measures over the
next year to remain around 4.0x-5.0x and in the 10%-15% range,
respectively, using free operating cash flow towards debt
reduction. We also expect the company to fund bolt-on acquisitions
using accumulated cash and, to a lesser extent, its revolving
credit facility," S&P stated.
The outlook is stable. "We expect modest growth and steady margin
performance over the next two years. We could lower the ratings if
subpar operating performance (resulting from a drop in demand for
Pro Mach's products and services, higher than expected cash
outflows, and/or debt-financed activities) adversely affect credit
measures," Mr. Kelly added. "For example, if revenues decline by
more than 5% and EBITDA margin contracts toward the mid-teens
range (from the high teen area) the ratio of adjusted debt to
EBITDA could weaken to more than 5.0x for an extended period. We
could also lower the ratings if the company's financial policies
become more aggressive than we expect. The company's weak business
profile limits the prospect for an upgrade."
REHOBOTH MCKINLEY: Fitch Affirms Rating on 2007A Bonds at 'BB-'
---------------------------------------------------------------
As part of its ongoing surveillance efforts, Fitch Ratings has
affirmed the 'BB-' rating on the $6.87 million New Mexico Hospital
Equipment Loan Council (Rehoboth McKinley Christian Hospital)
hospital facility improvement and refunding revenue bonds, series
2007A.
The Outlook has been revised to Negative from Stable.
Rating Rationale:
-- The Negative Outlook reflects additional challenges that
Rehoboth McKinley Christian Hospital (Rehoboth) is facing in
the interim period, which have resulted in a downturn in
financial performance through the four months ended
April 30, 2011.
-- The 'BB' category rating reflects a number of credit
concerns including its weak financial profile, poor payor
mix and small revenue base.
-- Financial performance had been steady through fiscal 2010,
with solid operating profitability and a rebuild of its
liquidity position; however, this has reversed in the
interim period due to physician turnover that resulted in
lower volume, higher expenses, and increased contractuals.
-- Main credit strengths include its dominant market position
and manageable debt burden, which have resulted in solid
debt service coverage.
-- Rehoboth is dependent on supplemental funds (sole community
provider and tax revenue) for profitability.
What Could Trigger a Downgrade?
-- Continued deterioration in financial performance.
-- Reduction in supplemental funds.
Security:
The bonds are secured by a pledge of revenues and equipment. In
addition, there is a debt service reserve fund.
Credit Summary:
Rehoboth's rating history has fluctuated between the 'B' and 'BB'
category since 2005 and reflects the volatility in Rehoboth's
financial performance in addition to constant management turnover.
The current CEO and CFO have been at Rehoboth since 2009 and 2008,
respectively, but key senior management positions remain on an
interim basis.
Fiscal 2010 performance was solid and continued a trend of steady
improvement in profitability and liquidity. Operating income was
$3.3 million (3.6% operating margin) for fiscal 2010 (16 months,
due to change in fiscal year end to Dec. 31, 2010) compared to
1.8% the same prior year period. Liquidity improved to 62.5 days
cash on hand and 139.7% cash to debt ($9.8 million unrestricted
cash and investments) at Dec. 31, 2010, from a low 7.3 days cash
on hand and 23.7% cash to debt at Aug. 31, 2006. The financial
performance was driven by revenue growth due to higher volume and
a focus on expense control. Fitch notes that the 2010 numbers are
unaudited and the last audited figures Fitch has received are for
fiscal 2009 (Aug. 31, 2009 year end). Although the fiscal 2010
audit is essentially complete, management stated it cannot be
shared until the state auditor approval process is complete.
Management stated that there are no material changes between the
unaudited figures provided to Fitch and the audited results. The
lack of timely release of audited financial statements is viewed
negatively.
One of Rehoboth's main credit strengths is its dominant market
position of 67%; however, the service area characteristics are
unfavorable, resulting in a payor mix with almost 30% of revenues
from Medicaid and 8% self-pay. Given its location, Rehoboth
benefits from sole community provider (SCP) funds as well as a
mill levy imposed by the county. The mill levy expires in 2012 and
requires further voter approval; however, the mill levy has
existed since 2004. Total supplemental funds were $9 million in
fiscal 2009 ($7.7 million SCP, $1.3 million mill levy), $8.9
million in fiscal 2010 ($7.5 million SCP, $1.3 million mill levy),
and expected to total $10.1 million in fiscal 2011. Rehoboth is
dependent on these funds for profitability and any reduction in
the supplemental funding would likely result in negative rating
pressure. In addition, Rehoboth's debt service coverage
calculation excludes the mill levy revenue as a source of funds
for debt service.
Through the interim period, Rehoboth is significantly under budget
with a $314,000 operating loss (-1.3% operating margin) compared
to 3.8% the prior year period. The main drivers of the poor
profitability include several physician departures, which affected
volume, higher expenses related to a consulting engagement to
prepare for its JCAHO survey, and increased contractuals due to
higher charity care and reduction in reimbursement from Medicaid.
The state has reduced its Medicaid reimbursement to approximately
30% of charges from 77% plus, historically. Management has
committed to several expense reduction items and believes they
will achieve a positive bottom line by the end of the year.
Expense reductions are mainly in the areas of labor and
productivity and purchased services with targeted savings of $1
million in fiscal 2011 and $2.5 million in fiscal 2012. The fiscal
2011 budget is for $1.4 million operating income (2% operating
margin). The inability to improve financial performance would
likely result in downward pressure on the rating. In addition, the
JCAHO survey will occur later this year (August-September) and
Rehoboth has engaged an outside firm to assist in meeting the
requirements. The failure to achieve this accreditation would
clearly be a credit negative.
Liquidity is weak at April 30, 2011 with $7.4 million unrestricted
cash and investments (42.9 days cash on hand, 106.7% cash to debt)
because the state withheld an SCP payment that was due in April;
however, these funds have been received and unrestricted cash in
May increased by $2.2 million.
Total debt outstanding was $7.6 million including $6.87 million of
bonds and $723,000 of capital leases. All of the debt is fixed
rate and Fitch used maximum annual debt service (MADS) of $1.1
million, which includes the capitalized leases. MADS coverage is
solid at 3.5x for fiscal 2010 (12 months) compared to 3.4x for
fiscal 2009 (these figures exclude the mill levy funds).
The Negative Outlook reflects Fitch's concern as to Rehoboth's
ability to turnaround its financial performance as there are
several revenue enhancement pressures. While the achievement of
projected expense reductions would be favorable, long-term
stability of the organization is dependent on its ability to
sustain consistent revenue growth. Rehoboth is considering opening
a specialty hospital for medical detox, which would enhance
revenue and would require capital costs of approximately $500,000.
Management would need to obtain a license for the service and
believes it would be another year before the additional service
line is available.
Rehoboth McKinley Christian Hospital is a 69-bed general acute
care hospital located in Gallup, New Mexico (138 miles east of
Albuquerque, NM and 180 miles west of Flagstaff, AZ). Rehoboth
changed its fiscal year end in fiscal 2010 to December from
August. Total operating revenue in fiscal 2010 (12 months) was $67
million. Rehoboth covenants to provide annual financial statements
within 30 days after the approval of the report by the state
auditor, which has usually resulted in fairly late receipt of
audits. Management stated that the audit should be available
within the next several months. Rehoboth has also been posting
monthly financial statements on EMMA.
REXNORD LLC: S&P Affirms 'B' Corporate Credit Rating
----------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings, including
the 'B' corporate credit rating, on Milwaukee, Wis.-based Rexnord
LLC and revised the outlook to positive.
"The outlook revision reflects our expectation that Rexnord is
likely to continue improving its credit measures in fiscal 2012
even though end-market conditions remain mixed," said Standard &
Poor's credit analyst Dan Picciotto. "The company's ultimate
parent, Rexnord Corp., filed an S-1 registration statement in May
2011 with the SEC for an initial public offering (IPO) of up to
$700 million. If successful, the company plans to use a portion of
the proceeds to repay up to $300 million of subordinated notes due
2016 (close to one turn of leverage). While Rexnord remains highly
leveraged, with debt to EBITDA of about 7x and funds from
operations (FFO) to adjusted debt of less than 10%, we expect
these metrics to improve to about 6x or less and FFO to debt to
approach 10% in the next year, even without an IPO. We expect the
somewhat difficult conditions for the company's water management
platform to be offset by better market conditions for its process
and motion control platform, resulting in modest revenue and
EBITDA growth in fiscal 2012 and free cash flow generation of more
than $100 million."
The company's highly leveraged financial risk profile is partly
mitigated by its fair business risk profile, which is itself
characterized by the firm's leading market positions and fair
product and end-market diversity. The company reported about $1.7
billion in sales in the year ended March 31, 2011.
"Rexnord's good market positions and engineering capabilities,
broad product portfolio within its served markets, as well as its
geographically diverse end markets, support our fair business risk
profile assessment. The company benefits from a large percentage
of aftermarket sales, but is subject to cyclical swings and some
demand volatility related to difficult municipal budget
environments," S&P stated.
The outlook is positive. "We expect Rexnord to improve its
operating performance and credit measures, and believe it could
continue to reduce its funded debt balances with cash on hand,"
Mr. Picciotto continued. "We could raise the ratings if we believe
the company's operating performance will improve so that debt to
EBITDA is 6x or less and expect further improvement toward our
range of expectations for a higher rating -- 5x or less. If
Rexnord's parent completes its IPO and uses the proceeds to repay
debt, this could boost its chances to achieve these credit
measures. We could lower the ratings if weakness in the company's
operating performance limits improvement in credit measures, for
instance, if the company appears unlikely to maintain FFO to
total debt of more than 5%, or if we expect it to be unable to
generate positive free cash flow."
RITE AID: Jean Coutu Discloses 26.8% Equity Stake
-------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, The Jean Coutu Group (PJC) Inc. and its
affiliates disclosed that they beneficially own 238,725,262 shares
of common stock of Rite Aid Corporation representing 26.8% of the
shares outstanding, based on 890,227,995 shares of Company's
common stock outstanding as of June 23, 2011, as reported in
Company's Form 10-Q for the quarterly period ended May 28, 2011.
A full-text copy of the filing is available for free at:
http://is.gd/ErGa57
About Rite Aid Corp.
Drugstore chain Rite Aid Corporation (NYSE: RAD) --
http://www.riteaid.com/-- based in Camp Hill, Pennsylvania, has
more than 4,700 stores in 31 states and the District of Columbia
and fiscal 2010 annual revenues of $25.7 billion.
Rite Aid carries 'Caa2' probability of default and corporate
family ratings from Moody's Investors Service. It has a 'B-'
corporate credit rating from Standard & Poor's Ratings Services.
The TCR reported on Feb. 21, 2011 that Standard & Poor's Ratings
Services said that it assigned its 'B+' issue rating and '1'
recovery rating to Rite Aid Corp.'s proposed $343 million senior
secured term loan tranche 5 due 2018. The '1' recovery rating
indicates S&P's expectation for very high (90%-100%) recovery in
the event of a payment default. According to the company, it will
use the proceeds to repay about $321 million in borrowings under
its tranche 3 term loan due 2014.
"The ratings reflect the difficulties Rite Aid faces in improving
its well-below-average operating performance relative to its
peers, especially amid intense industry competition," said
Standard & Poor's credit analyst Ana Lai. They also reflect the
company's significant debt burden and thin cash flow protection
measures.
As reported by the Troubled Company Reporter on Feb. 22, 2011,
Moody's assigned a B3 rating to Rite Aid Corp.'s proposed $343
million Tranche 5 senior secured first lien term loan due 2018.
All other ratings including its Caa2 Corporate Family Rating, Caa2
Probability of Default Rating, and SGL-3 Speculative Grade
Liquidity rating were affirmed. The rating outlook is stable.
The proceeds will be used to repay the $343 million (including
$21.2 original issue discount) Tranche 3 term loan due 2014.
Following the repayment, the Tranche 3 term loan will be retired
and its B3 rating withdrawn.
Rite Aid Corp. reported a net loss of $63.08 million on $6.39
billion of revenue for the 13 weeks ended May 28, 2011, compared
with a net loss of $73.68 million on $6.39 billion of revenue for
the 13 weeks ended May 29, 2010.
The Company's balance sheet at May 28, 2011, showed $7.50 billion
in total assets, $9.77 billion in total liabilities and a $2.27
billion total stockholders' deficit.
SABERTOOTH LLC: Sues Lender for $4 Million Over Chapter 11 Failure
------------------------------------------------------------------
Pete Brush at Bankruptcy Law360 reports that Sabertooth LLC, a
Pennsylvania real estate holder whose bankruptcy case was recently
tossed, filed a $4 million contract and fraud suit Thursday
against Liberty Lending Group Inc. claiming the lender derailed a
loan needed by the plaintiff to reorganize.
As it sought to exit Chapter 11, Law360 says, Sabertooth tried to
get a $1.8 million loan from the defendant in order to pay off its
primary creditor, Business Loan Express, but Liberty Lending
fraudulently delayed and otherwise botched its responsibilities,
according to the suit in Pennsylvania federal court.
About Sabertooth LLC
Single-asset real estate debtor Sabertooth, LLC, sought chapter 11
protection (Bankr. E.D. Pa. Case Nos. 09-11237) on Feb. 23, 2009.
Sabertooth is related to Gold's Gym operator and Venom Inc., which
sought chapter 11 protection (Bankr. E.D. Pa. Case No. 09-10445)
on Jan. 22, 2009. Green Goblin, Inc., another affiliate, filed a
chapter 11 petition (Bankr. E.D. Pa. Case No. 09-11239) on Feb.
23, 2009. The three cases are jointly administered, and the
debtors are represented by Robert Mark Bovarnick, Esq., in
Philadelphia, Pa. The Debtors estimate their assets and debts at
less than $10 million.
SAINT VINCENTS: To Auction Sisters of Charity Assets on July 19
---------------------------------------------------------------
Saint Vincents Catholic Medical Centers of New York and its debtor
affiliates sought and obtained an order from the U.S. Bankruptcy
Court for the Southern District of New York approving the break-up
fee and bidding procedures for the auction of substantially all of
the assets of Debtor Sisters of Charity Health Care System Nursing
Home, Inc. d/b/a St. Elizabeth Ann's Health Care & Rehabilitation
Center, which includes a skilled nursing and residential health
care facility located at 91 Tompkins Avenue, in Staten Island, New
York.
The auction will be conducted on July 19, 2011.
After a marketing process, the Debtors accepted a joint offer from
SV Operating Three, LLC -- the Nursing Home Purchaser -- and SV
Land Three, LLC -- the Real Estate Purchaser -- to act as a
stalking horse bidder in the sale of the SEA Assets.
A $680,000 break-up fee was approved by the Court in case a higher
bid is accepted by the Debtors.
The purchase prices to be paid by the Purchasers to the Debtors
are $15,000,000 for the Real Estate Assets and $19,000,000 for the
Nursing Home Assets, with a combined purchase price of
$34,000,000.
The Debtors will be assigning certain executory contracts and
unexpired leases attached to the Assets.
Any objections to the Sale must be filed by July 15, 2011. In the
event the Debtors choose a successful bidder or bidders other than
the Purchasers at the auction, the Objection Deadline solely with
respect to the Debtors' choice of an alternative Successful
Bidder(s) will be August 1, 2011 at 12:00 p.m. (prevailing Eastern
Time).
The Court will conduct a sale hearing and consider any unresolved
objections to the Sale on August 4, 2011 at 11:00 a.m.
A copy of the Bidding Procedures Order is available for free at:
http://bankrupt.com/misc/SVBidProcOrd.pdf
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 (Bankr. S.D.N.Y.
Case Nos. 05-14945 through 05-14951) on July 5, 2005.
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.
SALON MEDIA: David Talbot Appointed Interim CEO
-----------------------------------------------
Salon Media Group, Inc., on July 7, 2011, appointed David Talbot,
a member of the Company's Board of Directors, as interim chief
executive officer of the Company succeeding Mr. Richard Gingras
who resigned from his position as the CEO and Director of the
Company on June 21, 2011, effective as of July 8, 2011. Mr.
Talbot will serve as the Company's CEO until the Company completes
the process of hiring a longer term CEO.
Mr. Talbot has not entered into a written agreement with the
Company and the terms of his compensation for his service are not
yet subject to mutual agreement. The Company will disclose the
terms of Mr. Talbot's compensation arrangements as interim CEO
once they have been finalized.
Mr. Talbot, age 59, served as the Company's CEO from 1995 through
April 1999 and again from October 2003 through February 2005. He
was the Chairman of the Board of Directors from April 1999 through
December 2006. He served as Editor-in-Chief from the Company's
incorporation in 1995 through February 2005. More recently, Mr.
Talbot has been an author of books and articles for numerous
publications including Time, The New Yorker and Rolling Stone.
Additionally, in July 2007, Mr. Talbot joined Fenton
Communications as a Senior Vice President and, in 2008, he co-
founded a media company, The Talbot Players, which produces books,
documentaries and TV series. Mr. Talbot holds a Bachelor of Arts
degree in Sociology from the University of California at Santa
Cruz.
About Salon Media
San Francisco, Calif.-based Salon Media Group (OTC BB: SLNM.OB)
-- http://www.Salon.com/-- is an online news and social
networking company and an Internet publishing pioneer.
The Company reported a net loss attributable to common
stockholders of $2.58 million on $4.57 million of net revenues for
the year ended March 31, 2011, compared with a net loss
attributable to common stockholders of $4.86 million on $4.29
million of net revenues during the prior year.
The Company's balance sheet at March 31, 2011, showed $1.63
million in total assets, $10.63 million in total liabilities and a
$9.00 million total stockholders' deficit.
As reported by the TCR on July 4, 2011, Burr Pilger Mayer, Inc.,
in San Francisco, California, expressed substantial doubt about
the Company's ability to continue as a going concern following the
fiscal 2011 results. The independent auditors noted that the
Company has suffered recurring losses and negative cash flows from
operations and has an accumulated deficit of $108.4 million at
March 31, 2011.
SEAHAWK DRILLING: Plan Provides for Payment of All Allowed Claims
-----------------------------------------------------------------
On July 6, 2011, Seahawk Drilling, Inc., et al., filed their First
Amended Joint Plan of Reorganization of the Debtors and Debtors-
In-Possession Under Chapter 11 of the Bankruptcy Code and proposed
Disclosure Statement with the U.S. Bankruptcy Court for the
Southern District of Texas.
The Amended Proposed Disclosure Statement contains financial
projections at Exhibit C thereto and liquidation analysis at
Exhibit D thereto which were prepared for purposes of the
Bankruptcy Case.
As reported in the TCR on July 11, 2011, the Plan provides for the
creation of a Liquidating Trust on the Effective Date to which the
assets of the Debtors will be transferred with the exception of
the Hercules Common Stock which will continue to be held by the
Escrow Agent for the benefit of the Reorganized Debtors (the
'Liquidating Trust Assets') and for a Liquidating Trustee to
administer those assets, including prosecuting Causes of Action
for the benefit of creditors and stockholders. The beneficiaries
of the Liquidating Trust will be the holders of Allowed Claims and
Allowed Interests. The Liquidating Trustee will have the
authority to resolve issues regarding the Allowance of Claims and,
in conjunction with the Escrow Agent on behalf of the Reorganized
Debtors, will make Distributions to holders of Allowed Claims and
Allowed Interests in accordance with the Plan.
The Plan generally provides for the payment in full of all Allowed
Claims of all Classes of creditors and a pro rata distribution of
any remaining assets of the Debtors to holders of Interests
(Seahawk's stockholders).
The Plan designates eight (8) Classes of Claims and Interests.
With the exception of Class 1 Secured Tax Claims, all Classes are
Impaired under the Plan. Under the Plan, Secured Tax Claims will
be paid in full.
General Unsecured Claims in Class 4, with estimated allowed claims
of between $16 million and $18 million, will receive either (i) a
Distribution of Hercules Common Stock equal to the due and unpaid
portion of such Allowed Claim, plus (A) pre-petition interest, (B)
post-petition interest at the contractual rate of interest and, if
a contractual default rate is provided in the contract, at the
contractual default rate of interest, or, at the Plan Rate, and
(C) reasonable attorney's fees and costs.
On the Effective Date all existing Interests will, without any
further action, be canceled, annulled and extinguished and any
certificated or electronic shares representing such Interests will
become null, void and of no force or effect, and all such shares
will immediately be delisted from all exchanges and other trading
facilities.
A copy of the First Amended Joint Plan of Reorganization is
available at http://is.gd/GagBCu
A copy of the Disclosure Statement is available at:
http://is.gd/xPwBh8
About Seahawk Drilling
Houston, Texas-based Seahawk Drilling, Inc., engages in a jackup
rig business in the United States, Gulf of Mexico, and offshore
Mexico. It offers rigs and drilling crews on a day rate
contractual basis.
The Company and several affiliates filed for Chapter 11 bankruptcy
protection (Bankr. S.D. Tex. Lead Case No. 11-20089) on Feb. 11,
2011. Berry D. Spears, Esq., and Jonathan C. Bolton, Esq., at
Fullbright & Jaworkski L.L.P., in Houston, serve as the Debtors'
bankruptcy counsel. Shelby A. Jordan, Esq., and Nathaniel Peter
Holzer, Esq. at Jordan, Hyden, Womble, Culbreth & Holzer, P.C., in
Corpus Christi, Texas, serve as the Debtors' co-counsel. Alvarez
and Marsal North America, LLC, is the Debtors' restructuring
advisor. Simmons & Company International is the Debtors'
transaction advisor. Kurtzman Carson Consultants LLC is the
Debtors' claims agent. Judy A. Robbins, U.S. Trustee for Region
7, appointed three creditors to serve on an Official Committee of
Unsecured Creditors of Seahawk Drilling Inc. and its debtor-
affiliates. Heller, Draper, Hayden, Patrick & Horn, L.L.C.,
represents the creditors committee.
In its amended schedules, Seahawk Drilling disclosed $208,190,199
in assets and $438,458,460 in liabilities as of the petition date.
Seahawk filed for Chapter 11 protection to complete the sale of
all assets to Hercules Offshore, Inc. As reported by the Troubled
Company Reporter on April 11, 2011, the Bankruptcy Court approved
an Asset Purchase Agreement between Hercules Offshore and its
wholly owned subsidiary, SD Drilling LLC, and Seahawk Drilling,
pursuant to which Seahawk agreed to sell to Hercules, and Hercules
agreed to acquire from Seahawk, all 20 of Sellers' jackup rigs and
related assets, accounts receivable and cash and certain
liabilities of Sellers in a transaction pursuant to Section 363 of
the U.S. Bankruptcy Code.
According to DBR Small Cap, the deal was valued at about
$176 million when it received court approval.
Based on previous TCR reports, the purchase price for the
Acquisition will be funded by the issuance of roughly 22.3 million
shares of Hercules Offshore common stock and cash consideration of
$25 million, which will be used primarily to pay off Seahawk's
Debtor-in-Possession loan. The number of shares of Hercules
Offshore common stock to be issued will be proportionally reduced
at closing, based on a fixed price of $3.36 per share, if the
outstanding amount of the DIP loan exceeds $25 million, with the
total cash consideration not to exceed $45 million.
The deal closed on April 27, 2011.
SEARCHMEDIA HOLDINGS: Receives Going Concern Qualification
----------------------------------------------------------
SearchMedia Holdings Limited confirmed that it received a "going
concern" qualification in its Form 20-F for the fiscal year 2010
from its independent registered public accounting firm.
This announcement is required by the NYSE Amex Company Guide
Section 610(b), which requires separate disclosure of receipt of
an audit opinion containing a going concern qualification. This
announcement does not represent any change or amendment to
SearchMedia's Annual Financial Statements or to its Annual Report
on Form 20-F for the fiscal year ended December 31, 2010, which
was filed on June 30, 2011.
About SearchMedia
SearchMedia is a leading nationwide multi-platform media company
and one of the largest operators of integrated outdoor billboard
and in-elevator advertising networks in China. SearchMedia
operates a network of high-impact billboards and one of China's
largest networks of in-elevator advertisement panels in 50 cities
throughout China. Additionally, SearchMedia operates a network of
large-format light boxes in concourses of eleven major subway
lines in Shanghai. SearchMedia's core outdoor billboard and in-
elevator platforms are complemented by its subway advertising
platform, which together enable it to provide a multi-platform,
"one-stop shop" services for its local, national and international
advertising clients.
SEQUA CORPORATION: Moody's Upgrades CFR to B3; Outlook Positive
---------------------------------------------------------------
Moody's Investors Service upgraded the Corporate Family and
Probability of Default Ratings of Sequa Corporation to B3 from
Caa1 and the senior secured bank credit facility to B1 from B2.
The senior unsecured debt remained unchanged at the Caa2 level and
the rating outlook remained positive.
RATINGS RATIONALE
The upgrade in the CFR reflects the progress that the company has
made over the last several quarters reducing leverage on a Moody's
adjusted basis by almost two turns to below 6.5x. This reduced
level of leverage is more consistent with a B3 rating, and Moody's
expects further gradual decreases. While the absolute level of
debt outstanding has largely been unchanged, revenue and
profitability has increased in all three of its operating
segments-aerospace, automotive and metal coating-benefiting from
the improving economy post the 2008/09 decline, the increase in
airline traffic and utilization hours, the rebound in global
automotive production, and the company's extensive restructuring
initiatives over the last two plus years.These restructurings
enabled Sequa to effectively respond to the significant decline in
revenues that occured during 2009, and position the company to
generate significantly improved earnings and cash flow during the
cyclical upturn. For the LTM through March 2011, operating margins
on an adjusted basis improved by approximately 300 basis points
from 2009.
The B3 rating reflects Sequa's still high leverage, weak interest
coverage given the high debt level and coupon rate, and minimal
free cash flow generation following the 2007 leveraged buyout by
The Carlyle Group. Debt remains in excess of annual revenue and
goodwill and intangible assets represent a significant portion of
total assets.
The ratings, however, do recognize the company's long, well-
established market position in its niche segments, most
significantly in its largest operating unit's operations,
Chromalloy Gas Turbine. Chromalloy is a long established major
player in commercial aviation engine maintenance, repair and
overhaul (and a major alternative to OEMs) and is now building an
increasing presence in military applications. Moreover, the
ratings recognize the recent corporate wide revenue growth, the
positive effects of the operation's restructurings and cost-
cutting activities, and the adequate liquidity profile supported
by balance sheet cash and access to a largely undrawn $150 million
revolving credit facility and a $60 million receivables purchase
facility. Moreover, the company has no near-term debt maturities
and ample covenant cushion under its borrowing facilities.
The rating outlook remains positive due to Moody's expectation for
continued improvement in financial performance as benefits of the
restructuring activities and market expansion initiatives are more
fully realized and end-market demand for its products continues to
show cyclical rebound, most notably in aerospace and automotive.
These rating actions were taken:
Ratings upgraded:
-- Corporate Family Rating to B3 from Caa1;
-- Probability of Default Rating to B3 from Caa1;
-- $150 million senior secured revolver due December 2013 to B1
from B2--LGD assessment unchanged at LGD 2, 27%;
-- $954 million (originally $1,200 million) senior secured term
loan due December 2013 to B1 from B2--LGD assessment unchanged at
LGD 2, 27%;
Ratings unchanged:
-- $500 million 11.75% senior unsecured notes due December 2015
at Caa2 LGD 5, 81%;
-- $258 million 13.50% senior unsecured notes due December 2015
at Caa2 LGD 5, 81%.
The rating outlook remained Positive.
The last rating action was on July 14, 2010 when the rating
outlook was changed to Positive from Negative.
A rating upgrade, while not imminent, is possible in the 6 to 18
month time frame with revenue growth and if debt/EBITDA is reduced
to the 5x range, EBIT/interest maintained over 1.5x, and free cash
flow is projected to be positive in the low to mid-single digit
percent of debt. An upgrade would also require maintenance of an
adequate liquidity profile and believe that restructuring and
asset impairment activity is essentially completed.
The rating outlook could be lowered to stable if operating results
fail to show continued sequential improvement and deleveraging
ceases. Ratings could be lowered if the company's leverage again
increases to the 7x or higher range and if the company's liquidity
position weakens from its current position.
The principal methodology used in rating Sequa Corporation was the
Global Aerospace and Defense Industry Methodology published in
June 2010. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009 (and/or) the Government-Related
Issuers methodology published in July 2010.
SHALAN ENTERPRISES: Seeks to Borrow $1.5-Mil. from 5 Parties
------------------------------------------------------------
In separate filings, debtors Alan Rapoport and Shalan Enterprises
LLC sought and obtained authority from the U.S. Bankruptcy Court
for the Central District of California to borrow monies from these
parties:
Name Amount Collateral
---- ------ ----------
Carl Jones $300,000 5834 Capehorn, Agoura Hills
Michael Greenberg $300,000 5354 Capehorn, Agoura Hills
Don Weiss $300,000 5883 Capehorn, Agoura Hills
Robert Goldman $300,000 30729 Mainmast, Agoura Hills
William Tai $300,000 30723 Mainmast, Agoura Hills
The Borrowings are collateralized with a first senior lien on the
Properties in California.
The Debtors are owners of a number of single family dwellings in
California, Arizona, Nevada, and New York, including the
Properties. During the pendency of the Chapter 11 cases, they
have been marketing the single dwelling properties in order to
satisfy the claims of creditors and fund their exit from the
Chapter 11 cases.
The Debtors assert that although certain properties have been
sold, in light of current market conditions, they believe that a
more practical and expeditious resolution of their Chapter 11
cases can be achieved by borrowing monies, on a secured basis.
About Shalan Enterprises
Marina Del Rey, California-based Shalan Enterprises, LLC, a Nevada
limited liability company, was formed in 1999 for the purpose of
owning, operating and leasing and/or selling properties.
The Company filed for Chapter 11 bankruptcy protection (Bankr.
C.D. Calif. Case No. 09-43263) on Nov. 25, 2009. The Company has
assets of $12,540,000, and total debts of $7,426,313 as of the
Chapter 11 filing.
The Debtor's case is substantively consolidated with Alan
Rapoport, the manager of the Debtor. Mr. Rapoport filed for
Chapter 11 protection (Bankr. C.D. Calif. Case No. 09-43499) on
Nov. 30, 2009.
SHAMROCK-SHAMROCK INC: Wants Robert Del Rose to Manage Property
---------------------------------------------------------------
Shamrock-Shamrock, Inc., asks the U.S. Bankruptcy Court for the
Middle District of Florida for permission to employ Robert Del
Rose as broker for Coldwell Banker Surfcoast Realty, Inc.
Mr. Del Rose will manage, market and maintain the Debtor's various
pieces of commercial property. Mr. Del Rose has acted in the same
capacity prepetition.
The basic terms of the management agreement include:
a) a management fee equal to 10% of rents received;
b) a leasing fee equal to 50% of the gross first month's rent
of a new lease, paid when a new tenant enters into a new
lease agreement; and
c) reimbursement of costs/expenses.
To the best of the Debtor's knowledge, Mr. Del Rose is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
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.
SHAMROCK-SHAMROCK INC: PNC Bank Wants Cash Collateral Use Denied
----------------------------------------------------------------
PNC Bank, National Association, asks the U.S. Bankruptcy Court for
the Middle District of Florida to suspend Shamrock-Shamrock,
Inc.'s use of cash collateral, except for bona fide emergencies,
until the Debtor provides the promised and required information
and PNC Bank has had time to review it.
PNC Bank, National Association, as successor by merger to National
City Bank, and as successor by merger to Harbor Federal Savings
Bank, joins in and adopts the arguments in Standard Insurance
Company, et al.'s objection to Debtor's motion to allow use of
cash collateral.
PNC Bank relates that the Debtor has created a circumstance where
PNC Bank and the other secured lenders are not in a position to
evaluate the Debtor's Rental Income/Expense Chart to determine if
it contains sufficient information.
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 Debtor has proposed to access the cash collateral until
November 2011.
PNC Bank is represented by:
Allen R. Tomlinson, Esq.
JONES, FOSTER, JOHNSTON & STUBBS, P.A.
505 South Flagler Drive
P.O. Box 3475
West Palm Beach, FL 33402-3475
Tel: (561) 659-3000
Fax: (561) 650-0469
E-mail: atomlinson@jones-foster.com
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.
STELLAR GT: Receivership Extended Until Oct. 31
-----------------------------------------------
Stellar GT TIC LLC and VFF TIC LLC and lender Wells Fargo Bank,
N.A. -- as Trustee for the registered holders of Deutsche Mortgage
& Asset Receiving Corporation, COMM 2007-C9, Commercial Mortgage
Pass-Through Certificates, U.S. Bank National Association, as
Trustee, as successor in interest to Bank of America, National
Association, as Trustee, as successor in interest to Wells Fargo
Bank, N.A., as Trustee for the registered holders of Deutsche
Mortgage & Asset Receiving Corporation, CD 2007-CD5 Commercial
Mortgage Pass-Through Certificates, and FCP Georgian Towers, LLC,
acting by and through Helios AMC, LLC, in its capacity as Special
Servicer -- agreed to an extension of a state court order putting
the Debtors' property into the hands of a receiver until Oct. 31,
2011.
Stellar GT TIC LLC and VFF TIC LLC were formed to acquire, own,
rehabilitate and operate an 891-unit multi-family high rise
property -- consisting of two 14-story apartment buildings --
located at 8750 Georgia Avenue in Silver Spring, Maryland, and
commonly known as "The Georgian". The Project is owned by Stellar
and VFF as tenants in common, with Stellar holding a 10% interest
and VFF holding a 90% interest in the Project. The Project,
situated on a 3.249-acre site, was constructed in 1968, and
partially renovated in 2008 and 2009. As of the Petition Date,
the Project was over 90% occupied.
The Lender holds certain notes evidencing a mortgage loan
guaranteed by the Debtors in the aggregate original principal
amount of $185,000,000, secured by an Indemnity Deed of Trust,
Security Agreement, Financing Statement, Fixture Filing and
Assignment of Leases, Rents and Security Deposits dated Feb. 28,
2007.
On Dec. 29, 2009, the Lender commenced a receivership action in
the Circuit Court for Montgomery County, Maryland, Case No.
324928-V, seeking the appointment of a receiver for the
Project. The Montgomery County Court appointed Greystar
Management Services LP as receiver.
The Receivership Order expired by its own terms at 12:00 midnight
on June 30, 2011.
The Debtors commenced the chapter 11 proceedings to confirm a
joint plan of reorganization pursuant to which either the Project
will be sold or the Debtors and the mortgage indebtedness secured
by the Project will be reorganized and restructured.
The Debtors said c ontinuation of the receivership for a limited
period of time while the Debtors' seek to confirm the consensual
plan and either restructure the indebtedness or sell the Project
to a third-party, is in the best interests of all parties because
it will preserve the value of the Project and will prevent
disruption to the management and operation of the Project.
About Stellar GT TIC and VFF TIC
Stellar GT TIC LLC and VFF TIC LLC, owners of the Georgian
apartments located at 8750 Georgia Avenue in Silver Spring,
Maryland, filed for Chapter 11 bankruptcy protection (Bankr. D.
Md. Case Nos. 11-22977 and 11-22980) on June 22, 2011. Judge
Wendelin I. Lipp oversees the case. Michelle Maloney-Raymond is
the case administrator. Matthew G. Summers, Esq., at Ballard
Spahr LLP, serves as the Debtors' counsel.
The Debtors negotiated a plan of reorganization before filing for
Chapter 11. The proposed plan is premised on either (1) a sale of
the project pursuant to an auction process or (2) a consensual
restructuring of the secured debt. Broker CB Richard Ellis Inc.
has been hired to conduct the sale.
The auction rules provide that a first-round sealed bid would be
required to be submitted by Aug. 24. The broker would then have
until Sept. 5 to negotiate with the first-round bidders. Second-
round sealed bids would be due Sept. 5. The highest second-round
bid would be identified by Sept. 12, 2011. The highest bid would
be submitted for approval at the confirmation hearing in October.
Wells Fargo, the holder of a $207.6 million secured debt, can bid
at the auction. The Lender is represented by:
Mark Taylor, Esq.
KILPATRICK TOWNSEND & STOCKTON LLP
607 14th Street, NW, Suite 900
Washington, DC 20005-2018
Tel: (202) 508-5867
Fax: (202) 585-0073
E-mail: mdtaylor@kilpatricktownsend.com
- and -
Jantra Van Roy, Esq.
ZEICHNER ELLMAN & KRAUSE LLP
575 Lexington Avenue
New York, NY 10022
Tel: (212) 826-5353
Fax: (212) 753-0396
E-mail: jvanroy@zeklaw.com
STELLAR GT: Hiring Ballard Spahr as Bankruptcy Counsel
------------------------------------------------------
Stellar GT TIC LLC and VFF TIC LLC, seek Bankruptcy Court
permission to employ Ballard Spahr LLP as bankruptcy counsel.
The attorneys and paralegal presently designated to have primary
responsibility in representing the Debtors, and their hourly rates
(as discounted for attorneys) are:
(A) Attorneys
Roger Winston: $640 (real estate)
Matthew G. Summers: $494 (bankruptcy)
Mark Jackson: $520 (real estate)
Leslie Heilman: $361 (bankruptcy)
Michelle McGeogh: $323 (bankruptcy/litigation)
(B) Paralegals
Jason Kittinger: $180
Since December 2009, Ballard Spahr has been providing legal
services to the Debtors for the purpose of restructuring the
Debtors' financial affairs, negotiating with the Debtors'
creditors, representing the Debtors in a state court receivership
proceeding commenced by the Debtors' lenders, and representing the
Debtors in other litigation commenced against them. During Ballard
Spahr's pre-petition representation of the Debtors, Ballard Spahr
worked closely with the Debtors' management and other
professionals to negotiate a restructuring of the Debtors
financial affairs and to prepare the chapter 11 petitions and the
various motions and pleadings filed (or to be filed) in these
cases.
Ballard Spahr is a "disinterested person," as defined in Section
101(14) of the Bankruptcy Code and as required by section 327(a)
of the Bankruptcy Code.
About Stellar GT TIC and VFF TIC
Stellar GT TIC LLC and VFF TIC LLC, owners of the Georgian
apartments located at 8750 Georgia Avenue in Silver Spring,
Maryland, filed for Chapter 11 bankruptcy protection (Bankr. D.
Md. Case Nos. 11-22977 and 11-22980) on June 22, 2011. Judge
Wendelin I. Lipp oversees the case. Michelle Maloney-Raymond is
the case administrator.
The Debtors negotiated a plan of reorganization before filing for
Chapter 11. The proposed plan is premised on either (1) a sale of
the project pursuant to an auction process or (2) a consensual
restructuring of the secured debt. Broker CB Richard Ellis Inc.
has been hired to conduct the sale.
The auction rules provide that a first-round sealed bid would be
required to be submitted by Aug. 24. The broker would then have
until Sept. 5 to negotiate with the first-round bidders. Second-
round sealed bids would be due Sept. 5. The highest second-round
bid would be identified by Sept. 12, 2011. The highest bid would
be submitted for approval at the confirmation hearing in October.
Wells Fargo, the holder of a $207.6 million secured debt, can bid
at the auction. The Lender is represented by Mark Taylor, Esq.,
at Kilpatrick Townsend & Stockton LLP, and Jantra Van Roy, Esq.,
at Zeichner Ellman & Krause LLP.
STELLAR GT: Sec. 341 Creditors Meeting Set for July 25
------------------------------------------------------
The United States Trustee for Region 4 will convene a Meeting of
Creditors pursuant to 11 U.S.C. Sec. 341(a) in the bankruptcy
cases of Stellar GT TIC LLC and VFF TIC LLC on July 25, 2011, at
10:00 a.m. at 341 meeting room 6th Floor at 6305 Ivy Ln., in
Greenbelt.
The U.S. Trustee may be reached at:
US Trustee - Greenbelt, 11
c/o Lynn Kohen
6305 Ivy Lane, Suite 600
Greenbelt, MD 20770
E-mail: USTPRegion04.GB.ECF@USDOJ.GOV
About Stellar GT TIC and VFF TIC
Stellar GT TIC LLC and VFF TIC LLC, owners of the Georgian
apartments located at 8750 Georgia Avenue in Silver Spring,
Maryland, filed for Chapter 11 bankruptcy protection (Bankr. D.
Md. Case Nos. 11-22977 and 11-22980) on June 22, 2011. Judge
Wendelin I. Lipp oversees the case. Michelle Maloney-Raymond is
the case administrator. Matthew G. Summers, Esq., at Ballard
Spahr LLP, serves as the Debtors' counsel.
The Debtors negotiated a plan of reorganization before filing for
Chapter 11. The proposed plan is premised on either (1) a sale of
the project pursuant to an auction process or (2) a consensual
restructuring of the secured debt. Broker CB Richard Ellis Inc.
has been hired to conduct the sale.
The auction rules provide that a first-round sealed bid would be
required to be submitted by Aug. 24. The broker would then have
until Sept. 5 to negotiate with the first-round bidders. Second-
round sealed bids would be due Sept. 5. The highest second-round
bid would be identified by Sept. 12, 2011. The highest bid would
be submitted for approval at the confirmation hearing in October.
Wells Fargo, the holder of a $207.6 million secured debt, can bid
at the auction. The Lender is represented by Mark Taylor, Esq.,
at Kilpatrick Townsend & Stockton LLP, and Jantra Van Roy, Esq.,
at Zeichner Ellman & Krause LLP.
STELLAR GT: Proposes Sept. 8 Claims Bar Date
--------------------------------------------
Stellar GT TIC LLC and VFF TIC LLC ask the Bankruptcy Court to
enter an order:
(a) establishing Sept. 8, 2011, as the general bar date by
which all entities, other than governmental units, must
file proofs of claim on account of any prepetition claim
(whether secured, unsecured priority, or unsecured
nonpriority in nature) in the Debtors' chapter 11 cases;
(b) establishing Dec. 19, 2011, as the date by which all
governmental units must file proofs of claim in the
Debtors' chapter 11 cases; and
(c) establishing the date by which proofs of claim relating
to the Debtors' rejection of executory contracts or
unexpired leases must be filed in the Debtors' chapter 11
cases, except where otherwise provided by agreement or
order.
About Stellar GT TIC and VFF TIC
Stellar GT TIC LLC and VFF TIC LLC, owners of the Georgian
apartments located at 8750 Georgia Avenue in Silver Spring,
Maryland, filed for Chapter 11 bankruptcy protection (Bankr. D.
Md. Case Nos. 11-22977 and 11-22980) on June 22, 2011. Judge
Wendelin I. Lipp oversees the case. Michelle Maloney-Raymond is
the case administrator. Matthew G. Summers, Esq., at Ballard
Spahr LLP, serves as the Debtors' counsel.
The Debtors negotiated a plan of reorganization before filing for
Chapter 11. The proposed plan is premised on either (1) a sale of
the project pursuant to an auction process or (2) a consensual
restructuring of the secured debt. Broker CB Richard Ellis Inc.
has been hired to conduct the sale.
The auction rules provide that a first-round sealed bid would be
required to be submitted by Aug. 24. The broker would then have
until Sept. 5 to negotiate with the first-round bidders. Second-
round sealed bids would be due Sept. 5. The highest second-round
bid would be identified by Sept. 12, 2011. The highest bid would
be submitted for approval at the confirmation hearing in October.
Wells Fargo, the holder of a $207.6 million secured debt, can bid
at the auction. The Lender is represented by Mark Taylor, Esq.,
at Kilpatrick Townsend & Stockton LLP, and Jantra Van Roy, Esq.,
at Zeichner Ellman & Krause LLP.
TRONOX INC: PBGC Preserves Pensions for 7,400 Workers in OKC
------------------------------------------------------------
In an effort to save the retirement plans of roughly 7,400 workers
and retirees of the Oklahoma-based Tronox, the Pension Benefit
Guaranty Corporation successfully worked with the company to
emerge from bankruptcy with its pension plan intact.
"We work to preserve both businesses and their pensions," said
PBGC Director Josh Gotbaum. "PBGC doesn't ask a company to risk
its business if it can't afford its pension plan, but many
companies like Tronox go through bankruptcy with their pensions
unharmed."
If the pension plan is terminated, PBGC will pay pension benefits
to employees and retirees. However, because of limits set by law,
some retirees might get reduced pensions, and PBGC does not insure
health benefits at all.
PBGC's mission of pension protection includes helping bankrupt
employers finds ways to keep their plans going, within the
reorganized company or under a new owner. The agency's success in
the FY2011 second quarter secured benefits promised to some
10,4000 workers and kept more than $400 million in pension
liabilities off PBGC's balance sheet.
"PBGC wants employers to keep the pension promises they make,"
said Director Josh Gotbaum. "We're glad we were able to work with
these companies and their lenders to make sure workers will get
the retirement benefits they earned."
In addition to Tronox, PBGC worked with these companies to keep
pensions ongoing following bankruptcy reorganization or asset
sales in the second quarter of 2011:
Boston Generating LLC (Utilities) --
Boston, Mass., 113 participants
Fair Point Communications Inc. (Telecommunications and Cable)
-- Charlotte, N.C., 2,400 participants
Japan Airlines Co., Ltd. (Airlines) --
El Segundo, Calif., 500 participants
Since 2009, PBGC has worked with debtors and creditors in more
than 40 bankruptcies to preserve benefits for over 300,000 workers
and retirees, and to keep more than $4 billion off the agency's
books.
PBGC protects the pension benefits of 44 million Americans in
27,500 private-sector pension plans. The agency is directly
responsible for paying the benefits of more than 1.5 million
people in failed pension plans. PBGC receives no taxpayer dollars
and never has. Its operations are financed by insurance premiums
and with assets and recoveries from failed plans.
About Tronox Inc.
Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on Jan. 13, 2009 (Bankr. S.D.N.Y.
Case No. 09-10156). The case is before Hon. Allan L. Gropper.
Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Colin M.
Adams, Esq., at Kirkland & Ellis LLP in New York, represent the
Debtors. The Debtors also tapped Togut, Segal & Segal LLP as
conflicts counsel; Rothschild Inc. as investment bankers; Alvarez
& Marsal North America LLC, as restructuring consultants; and
Kurtzman Carson Consultants serves as notice and claims agent.
An official committee of unsecured creditors and an official
committee of equity security holders were appointed in the cases.
The Creditors Committee retained Paul, Weiss, Rifkind, Wharton &
Garrison LLP as counsel.
Until Sept. 30, 2008, Tronox was publicly traded on the New
York Stock Exchange under the symbols TRX and TRX.B. Since then,
Tronox has traded on the Over the Counter Bulletin Board under the
symbols TROX.A.PK and TROX.B.PK. As of Dec. 31, 2008, Tronox
had 19,107,367 outstanding shares of class A common stock and
22,889,431 outstanding shares of class B common stock.
On Nov. 17, 2010, the Bankruptcy Court confirmed the Debtors'
First Amended Joint Plan of Reorganization under Chapter 11 of the
Bankruptcy Code, dated November 5, 2010. Under the Plan, Tronox
reorganized around its existing operating businesses, including
its facilities at Oklahoma City, Oklahoma; Hamilton, Mississippi;
Henderson, Nevada; Botlek, The Netherlands and Kwinana, Australia.
US AIRWAYS: S&P Rates Class C Pass-through Certificates at 'B'
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B (sf)' rating to
US Airways Inc.'s series 2010-1 Class C pass-through certificates,
with an expected maturity of Oct. 22, 2014. The issue is a
drawdown under a Rule 415 shelf registration.
"The 'B (sf)' rating is based on US Airways' credit quality,
substantial collateral coverage by good quality aircraft, and on
legal and structural protections available to the pass-through
certificates," said Standard & Poor's credit analyst Betsy Snyder.
The company will use the proceeds of the offering to acquire
additional equipment notes, together with the previously issued
Class A and Class B equipment notes of Dec. 21, 2010, to refinance
five A321-200, two A330-200, and one A320-200 aircraft that were
delivered in 2009. "Each aircraft's secured notes are cross-
collateralized and cross-defaulted, a provision that we believe
increases the likelihood that US Airways would affirm the notes
(and thus continue to pay on the certificates) in bankruptcy," S&P
related.
The pass-through certificates benefit from legal protections
afforded under Section 1110 of the federal bankruptcy code.
"However, because the Class C certificates do not have a dedicated
liquidity facility (as do the Class A and Class B certificates),
we do not analyze them as enhanced equipment trust certificates
(EETCs)," S&P said.
"We believe that US Airways views these planes as important and
would, given the cross-collateralization and cross-default
provisions, likely affirm the aircraft notes in a bankruptcy
scenario. In contrast to most EETCs issued before 2009, the cross-
default would take effect immediately in a bankruptcy if US
Airways rejected any of the aircraft notes. This should prevent US
Airways from selectively affirming some aircraft notes and
rejecting others (cherry-picking), which often harms the interests
of certificateholders in a bankruptcy," S&P related.
"We consider the collateral pool overall to be of good quality.
The largest proportion of appraised value, about 52%, consists of
A321-200's. The A321-200 is the largest version of Airbus' popular
A320 narrowbody family of planes. The A321-200 has not been as
successful as the A320 or smaller A319, but nonetheless is
operated by 68 airlines worldwide, many more than Boeing's
competing B737-900ER (although the latter is a newer model and
thus has had less time to attract orders). Airbus has announced
that it will offer a more fuel-efficient new-engine-option (NEO)
on its narrowbody planes starting in 2016. It is too early to tell
how popular this option will be, and we believe a lot will depend
on how much more expensive the NEO is. If widely adopted, sale of
NEO planes could depress somewhat residual values of existing-
technology Airbus narrowbody planes. However, this effect is most
likely for older planes in the A320 family (e.g. those delivered
in the 1990's), rather than the recently delivered A321-200s and
A320s in the 2011-1 collateral pool," S&P continued.
The second-largest proportion of aircraft securing the
certificates is A330-200s, a small, long-range widebody plane.
This model, which incorporates newer technology than Boeing's
competing B767-300ER, has been successful, and is operated by 67
airlines worldwide. It will face more serious competition when
large numbers of Boeing's long-delayed B787 are delivered. Still,
it will take a while for this to occur, even if Boeing is able to
make its first delivery later in 2011. The final, and smallest,
proportion of value, about 8%, is represented by A320-200s. This
model is Airbus' most successful plane, with a very wide user base
around the world. Airbus will offer a new engine option on this
plane in the middle of this decade.
The initial loan-to-value of the Class C certificates is 85%,
using the appraised base values and depreciation assumptions in
the offering memorandum. "However, we focused on more conservative
maintenance-adjusted appraised values (not disclosed in the
offering memorandum). We also use more conservative depreciation
assumptions for all of the planes than those in the prospectus.
We assumed that, absent cyclical fluctuations, values of the A321-
200s and A330-200s would decline by 6.5% of the preceding year's
value per year, and the A320-200s 6%. Using those assumptions, our
initial loan-to-value is 91.4%, higher than the 89.7% loan-to-
value of US Airways' 2011-1 Class C certificates issued June 27,
2011. Our 'B (sf)' rating on the Class C certificates is lower
than our 'BBB (sf)' rating on the Class A certificates and 'B+
(sf)' rating on the Class B certificates because of a higher loan-
to-value, the fact that the Class C certificates are subordinated
to the more senior certificates, and because the Class C
certificates do not have a dedicated liquidity facility (which
would, if needed, pay interest on certificates if a bankrupt US
Airways was making insufficient payments to cover interest).
Still, the Class C certificates benefit from the fact that the
aircraft notes that secure all the certificates are cross-
defaulted and cross-collateralized, which, we believe, increases
the likelihood that US Airways would affirm the aircraft notes in
bankruptcy," S&P related.
"Our ratings on US Airways reflect our view of the consolidated
credit quality of parent US Airways Group Inc., which also owns
America West Airlines Inc.," S&P said
"We base the ratings on US Airways Group's substantial debt and
lease burden, limited (though improving) liquidity, and
participation in the high-risk U.S. airline industry. The ratings
also incorporate the company's better-than-average operating
costs. Tempe, Ariz.-based US Airways Group is the fifth-largest
U.S. airline, carrying about 8% of industry traffic. We
characterize the company's business profile as vulnerable and its
financial profile as highly leveraged," according to S&P.
"We expect US Airways' financial profile to remain fairly stable
over the next two years, with EBITDA interest coverage 1.6x-2.0x
and funds from operations (FFO)/debt in the low-teen percent area.
We believe that an upgrade is not likely over the near-term, but
could occur if FFO/debt moves consistently into the high-teens
percent area and unrestricted cash and short-term investments
increase to more than $2.5 billion. With US Airways' improved
operating performance and liquidity, we also believe a downgrade
is unlikely over the near term. However, if a stalled U.S.
economic recovery or serious oil price spike caused sustained
losses, causing liquidity to fall to below $1 billion, we could
lower ratings," S&P stated.
Ratings List
US Airways Inc.
US Airways Group Inc.
Corporate credit rating B-/Stable/--
New Ratings Assigned
US Airways Inc.
Series 2010-1 Class C pass-through certificates B (sf)
US SECURITY: Moody's Assigns 'B1' CFR; Outlook Stable
-----------------------------------------------------
Moody's Investors Service assigned Ba3 ratings to U.S. Security
Associates Holdings, Inc's proposed $435 million senior secured
credit facilities. Proceeds from the transaction will help finance
the leveraged buyout of U.S. Security by affiliates of Goldman
Sachs Capital Partners and refinance existing bank debt. Moody's
also assigned a B1 Corporate Family Rating and B1 Probability of
Default Rating to Valour Merger Sub Corp., an acquisition vehicle
that will be merged into U.S. Security Associates Holdings, Inc.
to complete the acquisition. U.S. Security will be the surviving
entity and borrower under the proposed credit facilities following
the closing of the transaction. The assigned ratings are subject
to Moody's review of final terms and conditions of the proposed
transaction. The company's existing ratings, including the B1 CFR
and the Ba3 ratings on the existing senior secured credit
facilities at U.S. Security Holdings, Inc., will be withdrawn upon
closing of the proposed acquisition. The rating outlook is stable.
On June 4, 2011, U.S. Security entered into a definitive agreement
to be acquired by GSCP for approximately $640 million (excluding
fees and expenses). Total transaction consideration including fees
and expenses is expected to be funded with the proceeds from a new
$285 million first lien senior secured term loan, issuance of $135
million senior unsecured notes, and an equity contribution from
GSCP and existing management. The bank credit facility is also
expected to include an undrawn $75 million first lien senior
secured revolving credit facility and an unfunded $75 million
delayed draw first lien senior secured term loan.
The transaction will result in an increase in debt of
approximately $230 million and a higher interest burden relative
to the current capital structure. As a result, Moody's expects
interest coverage to decline to the low 2 times range (from 4.1x
LTM 3/31/2011) and leverage to rise to the mid 5 times Debt/EBITDA
range (from 3.2x LTM 3/31/2011). However, the deterioration in
credit metrics will not cause a change in the B1 CFR, as leverage
will likely decline to below 5 times over the next two years as
the company generates free cash flow and applies it to debt
repayment.
Assignments:
Issuer: Valour Merger Sub Corp.
-- Corporate Family Rating, Assigned B1
-- Probability of Default Rating, Assigned B1
-- Senior Secured Credit Facilities, Assigned Ba3 LGD3 35%
-- Rating Outlook, Stable
RATINGS RATIONALE
The B1 CFR reflects the company's small scale relative to service
company peers, high debt leverage, modest interest coverage, a
fragmented and highly competitive security services industry, and
resultant low margins. The rating also incorporates risk
associated with the company's acquisition-based growth strategy,
though Moody's notes the company's success in integrating
acquisitions completed over the past several years, and
uncertainty related to the potential impact of mandatory health
insurance requirements scheduled to be imposed in 2014 as a result
of recent health reform legislation. The company's competitive
position, customer diversity, high retention rates, flexible cost
structure, and minimal capital spending requirements lend
stability to the financial performance of the business, which
collectively is a primary factor that supports the B1 CFR.
The stable outlook incorporates Moody's expectation that the
company will continue to improve its profitability and deploy its
free cash flow such that debt leverage is not materially above 5
times by the end of 2012. The stable outlook also anticipates that
the company will maintain good liquidity to support its operations
and that any acquisition activity would be neutral or
deleveraging.
Upward rating momentum is constrained by the prospective nature of
the B1 CFR and requisite improvement in credit metrics expected
over the next 18-24 months. However, the CFR could be raised to
Ba3 if the company continues to grow its revenue base organically,
reduces leverage to below 3.5 times, increases free cash flow to
above 12% of debt, and maintains a good liquidity position.
The CFR or outlook could be lowered if leverage is expected to be
sustained above 5 times, if interest coverage is expected to be
sustained below 2 times, if free cash flow deteriorates to near
breakeven levels, or if the company suffers erosion in its
liquidity position.
U.S. Security Associates Holdings, Inc. is a leading provider of
uniformed security guards in North America. In June 2011, Goldman
Sachs Capital Partners signed a definitive agreement to acquire
U.S. Security. The company reported revenue of approximately $800
million for the twelve months ended March 31, 2011. On a pro forma
basis for acquisitions, management estimates revenue of $878
million for the twleve months ended May 31, 2011.
The principal methodology used in rating U.S. Security Associates
Holdings was the Global Business & Consumer Service Industry
Rating Methodology published in October 2010. Other methodologies
used include Loss Given Default for Speculative-Grade Non-
Financial Companies in the U.S., Canada and EMEA published in June
2009.
US SECURITY: S&P Assigns Preliminary 'B' Corporate Credit Rating
----------------------------------------------------------------
Standard & Poor's Rating Services assigned its preliminary 'B'
corporate credit rating to Roswell, Ga.-based U.S. Security
Associates Holdings Inc. The outlook is stable.
"At the same time, we assigned our preliminary 'B' issue rating
(the same as the corporate credit rating) to the proposed first-
lien credit facilities, with a preliminary recovery rating of '3',
indicating that lenders could expect meaningful (50% to 70%)
recovery in the event of a payment default or bankruptcy. The
first-lien credit facilities consist of a $75 million revolving
credit facility (undrawn at close), a $285 million term loan, and
a $75 million delayed draw term loan (undrawn at close). We have
not assigned a rating to the proposed $135 million senior
unsecured notes, which are being sold in a private transaction.
The ratings are subject to change based on our review of final
documentation," S&P said.
The 'B+' corporate credit rating and 'BB-' bank loan rating on
U.S. Security Holdings Inc., which is a subsidiary of USS, will be
withdrawn following repayment of its bank debt.
"We estimate USS will have about $425 million in reported debt
outstanding pro forma for the transaction," S&P related.
The proposed LBO increases leverage to about 5.5x from 3x prior to
the transaction, while EBITDA coverage of interest expense
declines to about 2.3x from 4.8x, and the ratio of funds from
operations to total debt to falls to about 10.5% from 22%. "The
pro forma credit measures are slightly weaker than 'B' rating
category medians," said Standard & Poor's credit analyst Jerry
Phelan.
USS ranks fourth in the U.S. contract security officer industry by
sales, with pro forma annual sales of about $875 million. USS
competes against larger and more diversified companies such as
Securitas AB, which has $3.5 billion in North American sales; G4S
PLC, which has about $2.7 billion in North American sales; and
Allied Security Holdings LLC, which has about $1.7 billion in
North American sales.
The rating outlook is stable. "We forecast $20 million to $35
million of annual free cash flow, some of which may be directed
towards acquisitions and thereby potentially limiting meaningful
future credit measure improvement," said Mr. Phelan. "We could
lower the rating if credit measures deteriorate. While unlikely
over the near term, we could raise the rating if credit
measures return to pre-LBO transaction levels."
USEC INC: BlackRock Discloses 4.98% Equity Stake
------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, BlackRock, Inc., disclosed that it
beneficially owns 6,070,463 shares of common stock of USEC Inc.
representing 4.98% of the shares outstanding. As of April 29,
2011, there were 121,909,791 shares of common stock issued and
outstanding. A full-text copy of the filing is available for free
at http://is.gd/OS2QFe
About USEC Inc.
Headquartered in Bethesda, Maryland, USEC Inc. (NYSE: USU) --
http://www.usec.com/-- supplies enriched uranium fuel for
commercial nuclear power plants.
The Company's balance sheet at March 31, 2011, showed $4.05
billion in total assets, $2.71 billion in total liabilities and
$1.34 billion in stockholders' equity.
* * *
USEC Inc. carries 'Caa1' corporate and probability of default
ratings, with "developing" outlook, from Moody's, and 'CCC+' long
term foreign issuer credit rating and 'CCC-' long term local
issuer credit rating, with outlook "developing", from Standard &
Poor's.
In May 2010, S&P said that its rating and outlook on USEC Inc. are
not affected by the announcement that Toshiba Corp. and Babcock &
Wilcox Investment Co., an affiliate of The Babcock & Wilcox Co.,
have signed a definitive investment agreement for $200 million
with USEC.
UTSTARCOM INC: Suspending Filing of Reports With SEC
----------------------------------------------------
UTStarcom, Inc., filed a Form 15 notifying of its suspension of
its duty under Section 15(d) to file reports required by Section
13(a) of the Securities Exchange Act of 1934 with respect to its
common stock. Pursuant to Rule 12h-3, the Company is suspending
reporting because there are currently less than 300 holders of
record of common the shares.
About UTStarcom, Inc.
UTStarcom, Inc. (Nasdaq: UTSI) -- http://www.utstar.com/-- is a
global leader in IP-based, end-to-end networking solutions and
international service and support. The Company sells its
solutions to operators in both emerging and established
telecommunications markets around the world. UTStarcom enables
its customers to rapidly deploy revenue-generating access services
using their existing infrastructure, while providing a migration
path to cost-efficient, end-to-end IP networks. The Company's
headquarters are currently in Alameda, California, with its
research and design operations primarily in China.
The Company reported a net loss of $65.29 million on $291.53
million of net sales for the year ended Dec. 31, 2010, compared
with a net loss of $225.70 million on $386.34 million of net sales
during the prior year.
The Company's balance sheet at March 31, 2011, showed
$726.30 million in total assets, $488.06 million in total
liabilities, and $238.23 million in total equity.
VERTAFORE INC: Moody's Says B2 CFR Unaffected by Acquisition
-----------------------------------------------------------
Moody's Investors Service said Vertafore's B2 corporate family
rating would not be affected with the proposed $75 million first
lien add-on term loan to fund a $72 million acquisition of a
software company, as the financial leverage after the acquisition
is expected to be unchanged. However, if the company is unable to
raise the proposed $75 million incremental term loan to fund its
pending acquisition, Vertafore's would likely use a large amount
of its available liquidity. The reduced liquidity could pressure
the long term rating, which could result in a possible downgrade
to B3.
The principal methodology used in rating Vertafore, Inc. was the
Global Software Industry Methodology published in May 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
Vertafore, Inc., with projected annual revenues over $330 million,
is a provider of software solutions to the property and casualty
(P&C) insurance industry with a primary focus on agencies.
VERTAFORE INC: S&P Rates $75-Mil. First Lien Term Loan B at 'B+'
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' issue-level
ratings to Vertafore Inc.'s proposed $75 million first-lien tack-
on term loan B due 2016. The new rating is one notch above the
company's 'B' corporate credit rating, and is the same as the
rating on Vertafore's existing first-lien debt.
The company is issuing the debt under the $200 million incremental
facility contained in its existing first-lien credit agreement to
fund a $75 million acquisition. It is seeking an amendment to the
credit agreement to waive the 4.25x pro forma leverage test that
needs to be met to access the incremental facility and make the
acquisition. The amendment will also refresh the uncommitted
available amount of the incremental facility back to $200 million.
The proposed tack-on term loan will have the same terms as the
company's existing $550 million first-lien term loan. Vertafore
intends to use the new loan to acquire a company that provides
comparative ratings for personal line (PL) insurance policies, and
has a strong presence in California and the western U.S. The
acquisition will compliment Vertafore's existing PL Rating
product, and provide increased national coverage for this tool.
"We also assigned a '2' recovery rating to the tack-on term loan
B, indicating our expectation for substantial (70%-90%) recovery
for lenders in the event of a payment default. This recovery
rating is the same as the recovery rating assigned to the existing
first-lien credit facilities. However, despite the acquisition
modestly increasing our estimated default enterprise value for the
company, our estimated recovery for first-lien lenders moved to
the low end of the 70%-90% range because of the increase in total
first-lien debt outstanding at our projected year of default. The
issue-level rating on the company's $260 million second-lien term
loan is 'CCC+' (two notches below the corporate credit rating) and
the recovery rating is '6', indicating our expectation for
negligible (0%-10%) recovery in the even of a payment default,"
S&P related.
"We view this transaction as credit neutral given that the
acquisition bolsters Veratfore's PL rating business, and leverage
will only increase to about 7.25x at close from about 7.00x at
March 31, 2011. The company's first-quarter 2011 financial results
were also in line with our expectations, with revenue up 4%
and continued demonstration of EBITDA margin improvement.
Therefore, Vertafore's 'B' corporate credit rating and stable
outlook remain unchanged," S&P said.
"Our ratings on Vertafore reflect its highly leveraged financial
profile and weak business risk profile, which incorporates its
narrow addressable market and limited scale. Its defensible niche
market position, healthy operating margins, and high recurring
revenue base partially offset those factors. Standard & Poor's
expects that the company will gradually reduce its high leverage
primarily through EBITDA growth, as it modestly grows revenues and
slightly improves EBITDA margin," S&P added.
Ratings List
Vertafore Inc.
Corporate Credit Rating B/Stable/--
New Ratings
Vertafore Inc.
$75 mil 1st-lien tack-on
term loan B due 2016 B+
Recovery Rating 2
$260 mil 2nd-lien term loan
due 2017 CCC+
Recovery Rating 6
VINEYARD AT SERRA: Files Schedules of Assets and Liabilities
------------------------------------------------------------
The Vineyard at Serra Retreat, LLC, filed with the U.S. Bankruptcy
Court for the Central District of California its schedules of
assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $19,000,000
B. Personal Property $17,000
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $17,142,813
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $10,037,500
----------- -----------
TOTAL $19,017,000 $27,180,313
The Vineyard at Serra Retreat, LLC, in Malibu, California, filed
for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-17323)
on June 15, 2011. Judge Victoria S. Kaufman presides over the
case. The Law Offices of David W. Meadows serves as bankruptcy
counsel. In its petition, the Debtor estimated assets and debts
of $10 million to $50 million. The petition was signed by John
Hall, manager.
VOICESERVE INC: Michael Studer CPA Raises Going Concern Doubt
-------------------------------------------------------------
Voiceserve, Inc., filed on July 6, 2011, its annual report on Form
10-K for the fiscal year ended March 31, 2011.
Michael T. Studer CPA P.C., of Freeport, New York, expressed
substantial doubt about Voiceserve, Inc.'s ability to continue as
a going concern. Mr. Studer noted that as of March 31, 2011, the
Company had negative working capital of $313,059. Further, since
inception, the Company has incurred losses of $3,766,212.
The Company reported a net loss of $772,057 on $4.4 million of
revenues in fiscal 2011, compared with a net loss of $665,442 on
$3.3 million of revenues in fiscal 2010.
The Company's balance sheet at March 31, 2011, showed $2.4 million
in total assets, $738,604 in total liabilities, and stockholders'
equity of $1.7 million.
A copy of the Form 10-K is available at http://is.gd/wGypFP
Headquartered in Middlesex, England, Voiceserve, Inc.
(OTC BB: VSRV) -- http://www.voiceserve.com/-- is a software
platform provider focusing primarily on delivering affordable,
complete, next generation services to Internet Telephony Providers
(ITSPs).
WAGSTAFF PROPERTIES: Taps Alvarez & Marsal as Financial Advisor
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Minnesota authorized
Wagstaff Properties LLC, et al., to employ Alvarez & Marsal North
America, LLC as financial advisor.
A&M will have primary responsibility for preparing the Debtors'
cash collateral budgets, monitoring and reporting with respect to
the same. Moreover, to the extent that Wagstaff Texas, Inc. or
Wagstaff Properties Texas, LLC (collectively, the Texas Debtors)
engages an advisor other than A&M with respect to the sale or
disposition of the Texas Debtors' assets, A&M will not have
responsibility to perform those duties that are to be performed by
the other advisor. The Debtors will pay no more than one
completion fee, subject to the other terms of this order, and no
portion of the completion fee will be paid by the Texas Debtors.
To the best of the Debtors' knowledge, A&M is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
About Wagstaff Properties LLC
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.
On June 8, 2011, the U.S. Trustee appointed three member to the
Official Committee of Unsecured Creditors in the Debtors' cases.
WAGSTAFF PROPERTIES: Freeborn & Peters OK'd as Committee Counsel
----------------------------------------------------------------
The Hon. Nancy C. Dreher of the U.S. Bankruptcy Court for the
District of Minnesota authorized The Official Committee of
Unsecured Creditors in the Chapter 11 cases of Wagstaff Properties
LLC, et al., to retain Freeborn & Peters LLP as its counsel.
F&P is expected to, among other things:
a. represent and advise the Committee regarding the terms of
any sales of assets or plans of reorganization or
liquidation, and assist the Committee in negotiations with
the Debtors and other parties;
b. prepare, on behalf of the Committee, all necessary
pleadings, reports, and other papers; and
c. represent and advise the Committee in all proceedings in the
cases.
The billing rates for F&P attorneys for the 2011 calendar year
range from approximately $250 per hour for new associates to
$735 per hour for senior partners. Time devoted by
paraprofessionals for the 2011 calendar year are charged at
billing rates ranging from $205 to $250 per hour.
The hourly rates for the F&P professionals expected to have
primary responsibility for these cases are:
Richard S. Lauter, partner $575
Thomas R. Fawkes, partner $495
Michael A. Brandess, associate $250
To the best of the Committee's knowledge, F&P
is a "disinterested person" as that term is defined in Section
101(14) of the Bankruptcy Code.
The firm can be reached at:
Aaron L. Hammer, Esq.
Richard S. Lauter, Esq.
Thomas R. Fawkes, Esq.
FREEBORN &PETERS LLP
311 South Wacker Drive, Suite 3000
Chicago, IL 60606-6677
Tel: (312) 360-6000
Fax: (312) 360-6995
About Wagstaff Properties LLC
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.
On June 8, 2011, the U.S. Trustee appointed three member to the
Official Committee of Unsecured Creditors in the Debtors' cases.
WAGSTAFF PROPERTIES: Committee Taps Lommen Abdo as Local Counsel
----------------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
cases of Wagstaff Properties LLC, et al., asks the U.S. Bankruptcy
Court for the District of Minnesota for permission to retain the
law firm of Lommen, Abdo, Cole, King & Stageberg, P.A. as local
counsel.
Lommen Abdo will, among other things:
a. investigate the Debtors' assets and pre-bankruptcy conduct;
b. analyze the conduct and the perfection and priority of the
liens of the Debtors' secured creditors; and
c. prepare, on behalf of the Committee, all necessary
pleadings, reports, and other papers;
Deborah C. Swenson tells the Court that the billing rates are:
Attorneys:
New Associates $175
Senior Partners $425
Paraprofessionals $175 - $200
The hourly rates for the Lommen Abdo professionals expected to
have primary responsibility for these cases are:
Ms. Swenson, shareholder $315
Bryan R. Feldhaus, associate $200
Nicholas A. Dolejsi, associate $175
Ms. Swenson assures the Court that the firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
Ms. Swenson can be reached at:
Deborah C. Swenson, Esq.
LOMMEN, ABDO, COLE, KING & STAGEBERG, P.A.
2000 IDS Center
80 South Eighth Street
Minneapolis, MN 55402
Tel: (612) 336-9351
Fax: (612) 339-8064
Email: debs@lommen.com
About Wagstaff Properties LLC
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 PROPERTIES: Trinity Capital Approved as Investment Banker
------------------------------------------------------------------
The Hon. Nancy C. Dreher of the U.S. Bankruptcy Court for the
District of Minnesota authorized Wagstaff Properties LLC, et al.,
to employ Trinity Capital, LLC and its affiliated broker-dealer,
BWK Trinity Capital Securities LLC, as their investment banker
with respect to a sale of their assets.
The Debtors have employed Trinity since 2009 and have paid the
firm approximately $998,999 for services and $14,908 for costs
incurred prior to the Petition Date, with the unapplied balance of
approximately $151,388 to serve as a chapter 11 retainer. The
Debtors have agreed that Trinity will hold the retainer in trust
for application against its final allowed fees.
The parties have entered into the engagement agreement, which
governs the relationship between Trinity and the Debtors. Under
the engagement agreement, Trinity will provide investment banking
services to the Debtors at the direction of the Debtors' president
in connection with the Debtors' efforts to sell their assets. It
is anticipated that Trinity's activities will include the:
a) assisting the Debtors in the sale or other disposition of
their assets; and
b) other activities as are approved by the responsible officer
and agreed to by Trinity.
Trinity may work with Alvarez & Marsal, the Debtors' proposed
financial advisor, with respect to the sale process, but their
roles will be independent and not duplicative.
The terms of compensation are:
a) Trinity will earn a success fee of 2% of the total
transaction value for the sale or other disposition of the
Debtors' assets.
b) Trinity will be reimbursed for its reasonable out-of-pocket
expenses incurred in connection with this assignment, such
as travel, lodging, duplicating, messenger and telephone
charges.
c) All fees and expenses will be billed and payable on a
monthly basis as permitted under the Bankruptcy Code, Local
Bankruptcy Rules or order of the Court.
To the best of the Debtors' knowledge, Trinity is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
About Wagstaff Properties LLC
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.
On June 8, 2011, the U.S. Trustee appointed three member to the
Official Committee of Unsecured Creditors in the Debtors' cases.
WASHINGTON MUTUAL: Schwabe Williamson Tapped as Securities Counsel
------------------------------------------------------------------
The Official Committee of Equity Security Holders in the Chapter
11 cases of Washington Mutual Inc., et al., asks the U.S.
Bankruptcy Court for the District of Delaware for permission to
retain Schwabe, Williamson & Wyatt as securities counsel.
The Committee set a July 13 meeting on the proposed retention of
the securities counsel.
The firm will advise the Committee in connection with various
securities and corporate transactional aspects of the parties'
negotiations and issues related to the modified six amended plan
and proposed modified seven amended plan.
The hourly rates of the firm's personnel are:
A. Jeffry Bird, shareholder $520
Kevin E. Brannon, shareholder $480
Darius Hartwell, shareholder $410
Melissa Berube, associate $240
To the best of the Committee's knowledge, the firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
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: Wants Perkins Coie to Handle Tax Proceedings
---------------------------------------------------------------
Washington Mutual Inc., et al., ask the U.S. Bankruptcy Court for
the District of Delaware for authorization to expand the scope of
employment of Perkins Coie LLP as special counsel.
The Debtors set a July 28 hearing on the requested retention of
Perkins Coie LLP. Objections, if any, are due July 21, at
4:00 p.m.
Pursuant to an order dated Nov. 25, 2008, the Court authorized the
Debtors to retain Perkins as special counsel to provide certain
law services, employment law services, intellectual property
counsel, and to continue to provide legal services in connection
with certain matters worked on prepetition. Pursuant to a
July 19, 2010, order, the Court authorized the Debtor to expand
the retention of Perkins as special counsel to assist with certain
matters related to shareholder proceedings in the Superior Court
of the State of Washington for the County of Thurston and the U.S.
Bankruptcy Court for the Western District of Washington.
The Debtors now seek to expand the scope of services of Perkins to
include legal assistance as local counsel with respect to the tax
proceeding.
To the best of the Debtors' knowledge, Perkins is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
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.
WILLIAM LYON: Inks Employment Agreements with Executive Officers
----------------------------------------------------------------
William Lyon Homes, Inc., entered into executive employment
agreements with Matthew R. Zaist, the Company's Executive Vice
President, Colin T. Severn, the Company's Vice President and Chief
Financial Officer and Bryan W. Doyle, the Company's Senior Vice
President and California Region President effective July 1, 2011.
Each of these agreements was approved by the Company's
compensation committee.
The employment agreements provide for an employment term of 12
months from the date of the agreements. Each executive is
entitled to a fixed-base salary and is eligible to earn quarterly
bonuses based on the performance of the Company during 2011.
In addition, each executive is eligible to participate in the
Company's Project Completion Bonus Plan as it is in effect from
time to time.
Under the agreements, the executives are subject to a non-compete
covenant which lasts for the period following termination during
which the executive is receiving severance benefits as well as
restrictions on soliciting Company employees during the 18-month
period following the executive's termination of employment. These
non-compete and non-solicitation covenants do not apply if the
executive has been terminated without "cause" or has terminated
his employment for "good reason."
The agreements also provide that the executives will be
indemnified to the maximum extent permitted by applicable law.
A full-text copy of the Form 8-K is available for free at:
http://is.gd/Tg7Qis
About William Lyon Homes
Based in Newport Beach, California, William Lyon Homes and
subsidiaries -- http://www.lyonhomes.com/-- are primarily engaged
in designing, constructing and selling single family detached and
attached homes in California, Arizona and Nevada.
The Company's balance sheet at March 31, 2011, showed $627.54
million in total assets, $614.71 million in total liabilities and
$12.83 million in stockholders' equity.
* * *
William Lyon carries 'CCC' issuer credit ratings from Standard &
Poor's, and 'Caa2' long term corporate family and probability of
default ratings from Moody's.
"S&P raised its rating on William Lyon Homes because S&P believes
that near-term liquidity pressure has eased somewhat following the
partial funding of a secured term loan and reduced maturing credit
facility debt," said credit analyst James Fielding in November
2009 when S&P raised the rating on William Lyon to 'CCC' from
'CCC-'. He added, "However, this privately held homebuilder
remains very highly leveraged and may face challenges repaying or
refinancing intermediate-term debt maturities if its business
prospects don't improve in the interim."
Standard & Poor's Ratings Services raised its rating on William
Lyon Homes' 10.75% senior unsecured notes due 2013 to 'CC' from
'D' after the company repurchased $10.5 million of outstanding
principal for $9.0 million. S&P lowered its rating on the notes
to 'D' because S&P considered the discounted repurchase to be
tantamount to default under its criteria for exchange offers and
similar restructurings. In accordance with its criteria, S&P is
now raising its rating on these notes because the company
completed its repurchase, and S&P is not aware of additional
discounted repurchases at this time.
WL HOMES: Liquidation Trustee Reaches $1.2MM Deal With BofA
-----------------------------------------------------------
Samuel Howard at Bankruptcy Law360 reports that the liquidation
trustee for WL Homes LLC on Wednesday reached a $1.2 million
settlement in a four-way tussle in Delaware with Bank of America
NA, owners of defective homes and a contractor over millions of
dollars of bankruptcy claims.
The Chapter 7 trustee George Miller asked the bankruptcy court to
approve a settlement in which Bank of America will relinquish $1.1
million to Ayuda Management Corp., the estate and homeowners will
each receive $50,000 from the bank, and the trustee's lawsuits
will be extinguished, according to Law360.
About WL Homes
Irvine, California-based WL Homes LLC -- dba John Laing Homes,
John Laing Homes Luxury, Laing Urban, Laing Luxury Homes, and John
Laing Urban -- is one of metro Denver's largest homebuilders. It
builds under the John Laing brand primarily in Colorado,
California, Arizona, and Texas.
John Laing began as a builder in the United Kingdom and came to
the U.S. market in 1984. The company was sold to Dubai-based
Emaar Properties in 2006 for $1.05 billion. Emaar invested
$613 million in the company, but eventually stopped funding. John
Laing had a work force of 1,100 in 2006, but cut employees to
about 90 by the first week of February 2009. John Laing has 105
real estate developments across the country. It also builds
luxury and custom homes.
WL Homes and five of its affiliates filed for Chapter 11
protection on February 19, 2009 (Bankr. D. Del. Lead Case No. 09-
10571). Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at
Pachulski Stang Ziehl & Jones LLP, represent the Debtors' in their
restructuring efforts. Ashby & Geddes represents the Official
Committee of Unsecured Creditors. In its bankruptcy petition, WL
Homes estimated assets of more than $1 billion, and debts between
$500 million and $1 billion.
As reported in the TCR on June 10, 2009, the Bankruptcy Court
converted WL Homes LLC and its debtor affiliates' Chapter 11 cases
to cases under Chapter 7 liquidation, at the request of the
official committee of unsecured creditors.
WORLDGATE COMMUNICATIONS: C. Vitale Resigns from All Positions
--------------------------------------------------------------
Christopher V. Vitale tendered his resignation as Chief
Administrative Officer, Senior Vice President, Legal and
Regulatory, General Counsel and Secretary of WorldGate
Communications, Inc., and its subsidiaries effective July 29,
2011.
About Worldgate Communications
Trevose, PA, WorldGate Communications, Inc. (OTC BB: WGAT.OB)
designs and develops innovative digital video phones featuring
high quality, real-time, two-way video.
The Company's balance sheet at March 31, 2011, showed $9.7 million
in total assets, $15.9 million in total liabilities, and a
stockholders' deficit of $6.2 million.
As reported in the TCR on April 12, 2011, Marcum LLP, in New York,
expressed substantial doubt about WorldGate Communications'
ability to continue as a going concern, following the Company's
2010 results. The independent auditors noted that of the
Company's recurring losses from operations, working capital
deficiencies and stockholders' deficit.
YRC WORLDWIDE: Steering Group to Grant $175-Mil First-Out Facility
------------------------------------------------------------------
YRC Worldwide Inc. previously proposed a financial restructuring
that is intended to improve its balance sheet and the liquidity
available to the Company to operate its business. In connection
with the Restructuring, the Company executed a commitment letter
with JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC, The
Catalyst Capital Group Inc., Cyrus Capital Partners, L.P., and Owl
Creek Investments I, LLC, in which:
(i) the Steering Group Commitment Parties committed to provide
a $175.0 million senior secured first-out term facility and
a $225.0 million senior secured last-out term facility; and
(ii) JPM Securities agreed to structure and arrange the ABL
Facility and use commercially reasonable efforts to
syndicate the Last-Out Facility.
The proceeds of the ABL Facility will be used to refinance the
Company's current asset-backed securitization facility, to cash
collateralize letters of credit outstanding under the Existing ABS
Facility, to provide working capital and for other general
corporate purposes. The Commitment Letter is available for free
at http://is.gd/eNShy7
Under the Commitment Letter, (i) each Steering Group Commitment
Party committed, severally and not jointly, to provide $58.33
million of the First-Out Facility, and (ii) each Steering Group
Commitment Party committed, severally and not jointly to provide
up to $75.0 million of the Last-Out Facility, in each case subject
to satisfaction of certain conditions precedent.
The Company is working with JPM Securities to syndicate a portion
of the Last-Out Facility. Under the ABL Facility, JPMCB will be
both the administrative agent and collateral agent.
Pursuant to the terms of the ABL Facility, YRC Inc., USF Holland
Inc. and USF Reddaway Inc. will each sell, on an ongoing basis,
all accounts receivable originated by that Originator to a newly
formed, special purpose, bankruptcy remote, direct or indirect
subsidiary of the Company, which will be the borrower under the
ABL Facility. Under the ABL Facility, the Company will be
appointed to act as initial servicer of the receivables, but the
Company may delegate its duties to each Originator as a
subservicer.
The Company expects to improve its liquidity position by the
replacement of its Existing ABS Facility with the new ABL
Facility. As of June 30, 2011, Existing ABS Facility borrowings
were approximately $164 million and Existing ABS Facility letters
of credit were approximately $65 million, for a total Existing ABS
Facility facility usage of approximately $229 million and
availability of approximately $9.5 million. The new $400 million
ABL Facility is expected to have an initial borrowing base of
approximately $374 million. The Company expects to draw $255
million under the new ABL Facility to use with cash on hand to
repay the Existing ABS Facility borrowings, to cash-collateralize
Existing ABS Facility letters of credit, to fund the new ABL
Facility closing costs and original issue discount of
approximately $24 million and to deposit $90 million into the
escrow accounts. Post-refinancing, the Company expects undrawn
availability under the new ABL Facility of approximately $119
million.
About YRC Worldwide
Headquartered in Overland Park, Kan., YRC Worldwide Inc. (NASDAQ:
YRCW) -- http://www.yrcw.com/-- is a holding company that through
wholly owned operating subsidiaries offers its customers a wide
range of transportation services. These services include global,
national and regional transportation as well as logistics.
KPMG LLP's audit reports on the consolidated financial statements
of YRC Worldwide Inc. and subsidiaries for 2009 and 2010 each
contain an explanatory paragraph that states that the Company has
experienced significant declines in operations, cash flows and
liquidity and these conditions raise substantial doubt about the
Company's ability to continue as a going concern.
The Company's balance sheet at March 31, 2011, showed $2.62
billion in total assets, $2.91 billion in total liabilities, and a
$287.64 million total shareholders' deficit.
* * *
In January 2011, Standard & Poor's Ratings Services placed its
'CCC-' corporate credit rating on YRC Worldwide Inc. (YRCW) on
CreditWatch developing. At the same time, S&P is withdrawing the
existing issue level ratings on Yellow Corp.'s senior unsecured
debt, given the negligible amounts outstanding.
"The ratings on Overland Park, Kan.-based YRCW reflect its near-
term liquidity challenges, meaningful off-balance-sheet contingent
obligations related to multiemployer pension plans, as well as its
participation in the competitive, capital-intensive, and cyclical
trucking industry," said Standard & Poor's credit analyst Anita
Ogbara. "YRCW's substantial (albeit deteriorating) market
position in the less-than-truckload (LTL) sector, which has high
barriers to entry, partially offsets these characteristics. We
characterize YRCW's business profile as weak, financial profile as
highly leveraged, and liquidity as weak."
As reported by the TCR on March 22, 2011, Moody's Investors
Service has lowered the Corporate Family Rating of YRC Worldwide,
Inc to Ca from Caa3. The rating outlook is negative. The rating
has been downgraded in response to the company's recent disclosure
of a "Milestone Failure" relating to requirements under its
amended credit agreement. Moody's believes that this development
increases the risk in YRC's efforts to conclude critical
refinancing that is instrumental to its ability to avoid
bankruptcy.
As reported by the TCR on May 5, 2011, Fitch Ratings downgraded
YRC's Issuer default rating to 'C' from 'CC'; Secured bank credit
facility rating downgraded to 'CCC/RR2' from 'B-/RR2'; and Senior
unsecured rating affirmed at 'C/RR6'. In addition, Fitch has
removed YRCW's ratings from Rating Watch Negative. Fitch said
that although it appears increasingly likely that the company will
successfully complete the restructuring, until the transactions
constituting the restructuring close, which is not anticipated
until late July 2011, there exists a potential for the transaction
to fail, in which case Fitch expects the company would be forced
to file for Chapter 11 bankruptcy protection.
* DOJ Won't Contest Joint Bankruptcies By Gay Couples
-----------------------------------------------------
Carolina Bolado at Bankruptcy Law360 reports that the U.S.
Department of Justice will no longer contest joint bankruptcy
proceedings filed by legally married same-sex couples, according
to a filing made Friday in the California bankruptcy case of a gay
couple.
Law360 relates that the DOJ has dropped its pending challenges to
joint bankruptcy petitions by gay couples and informed bankruptcy
courts that "it will no longer seek dismissal of bankruptcy
petitions filed jointly by same-sex debtors who are married under
state law," according to DOJ spokeswoman Tracy Schmaler in
Friday's filing.
* S&P's Global Corp. Default Tally Remains at 18 for 2011
---------------------------------------------------------
The 2011 global corporate default tally remains at 18 after no
issuers defaulted last week, said an article published July 8 by
Standard & Poor's Global Fixed Income Research, titled
"Global Corporate Default Update (June 30 - July 6, 2011)
(Premium).
Of the total, 11 issuers were based in the U.S., two each were
based in Canada and New Zealand, and one each was based in the
Czech Republic, France, and Russia. By comparison, 46 global
corporate issuers had defaulted by this time in 2010. Of these
defaulters, 33 were U.S.-based issuers, two were European issuers,
four were from the emerging markets, and seven were in the other
developed region (Australia, Canada, Japan, and New Zealand).
Seven of this year's defaults were due to missed interest or
principal payments and six were due to distressed exchanges --
both among the top reasons for default in 2010. Of the remaining
five, three issuers defaulted after they filed for bankruptcy,
another had its banking license revoked by its country's central
bank, and the fourth was forced into liquidation as a result of
regulatory action.
Of the defaults in 2010, 28 defaults resulted from missed interest
or principal payments, 25 resulted from Chapter 11 and foreign
bankruptcy filings, 23 from distressed exchanges, three from
receiverships, one from regulatory directives, and one from
administration.
* Moody's: Spec-Grade Default Rate Ends at 2.2% in Q2 2011
----------------------------------------------------------
The trailing 12-month global speculative default rate finished the
second quarter at 2.2%, down from 2.5% in the first quarter of
2011, according to Moody's Investors Service in its monthly
default report. A year ago, the default rate stood at 6.2%.
Moody's default rate forecasting model now predicts that the
global speculative-grade default rate will fall to 1.5% by the end
of this year then edge up to 1.7% by the second quarter of 2012.
"Spreads are widening, particularly in Europe, and the continued
softness in the global economy is certainly worrying" says Albert
Metz, Moody's Director of Credit Policy Research. "But corporate
fundamentals still remain fairly good, spreads, though increasing,
remain near typical levels, and defaults continue to be few and
far between."
There were four debt defaults in the second quarter, bringing the
year to date total to 12. By comparison, there were 17 and 10
defaults in the first and second quarter of last year,
respectively.
Moody's expects default rates to be highest in the Wholesale
sector in the U.S. and the Media: Advertising, Printing &
Publishing sector in Europe.
In the U.S. the speculative-grade default rate ended the second
quarter at 2.6%, down from 2.9% in the previous quarter. At this
time last year, the U.S. default rate was 6.4%.
In Europe, the default rate fell from 1.9% in the first quarter to
1.4% in the second quarter. Last year, the European default rate
ended at 5.6% in the second quarter.
When measured on a dollar-volume basis the global speculative-
grade bond default rate fell slightly to 1.5% at the close of Q2
2011 from 1.6% in Q1 2011. A year ago, the global dollar-weighted
default rate was higher at 3.5%.
In the U.S., the dollar-weighted speculative-grade default rate
closed the quarter at 1.4%. The comparable rate last quarter was
1.5% and 3.5% a year ago.
In Europe, the dollar-weighted speculative-grade bond default rate
remained unchanged from the previous quarter at 1.8%. The
speculative-grade bond default rate stood at 3.4% this time last
year.
Moody's speculative-grade corporate distressed index -- a measure
of the percentage of high-yield issuers that have debt trading at
distressed levels -- rose to 9.5% at the end of the second
quarter, up from the 7.7% level in the previous quarter. A year
ago, the index was markedly higher at 16.0%.
Among U.S. leveraged loan issuers, the trailing 12-month default
rate was unchanged from the previous quarter at 1.7% but
significantly lower than the 6.2% rate recorded this time last
year. Four Moody's-rated companies defaulted on loans in the
second quarter, compared to one in the first quarter.
* Large Companies With Insolvent Balance Sheets
-----------------------------------------------
Total
Share- Total
Total Holders' Working
Assets Equity Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------ -------- -------
PURE INDUSTRIAL AAR-U CN 277.1 (8.6) -
ACCO BRANDS CORP ABD US 1,094.2 (77.0) 293.1
ABSOLUTE SOFTWRE ABT CN 116.3 (12.0) (12.6)
ALASKA COMM SYS ALSK US 609.8 (27.4) 6.3
AMR CORP AMR US 27,113.0 (3,949.0) (1,028.0)
ANOORAQ RESOURCE ARQ SJ 1,024.0 (77.0) 20.9
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
AMER AXLE & MFG AXL US 2,167.8 (415.4) 60.4
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
CINCINNATI BELL CBB US 2,636.2 (650.4) 6.4
COLUMBIA LABORAT CBRX US 27.8 (2.6) 11.5
CC MEDIA-A CCMO US 16,938.6 (7,280.4) 1,644.2
CADIZ INC CDZI US 46.7 (2.1) 2.1
CHOICE HOTELS CHH US 412.4 (49.0) (1.9)
TOWN SPORTS INTE CLUB US 460.0 (4.7) (15.4)
CLOROX CO CLX US 4,051.0 (82.0) (28.0)
CUMULUS MEDIA-A CMLS US 318.9 (324.4) 12.4
CHENIERE ENERGY CQP US 1,776.3 (547.6) 24.4
CABLEVISION SY-A CVC US 8,962.9 (6,462.4) (309.5)
CENVEO INC CVO US 1,439.5 (333.5) 208.1
CENTENNIAL COMM CYCL US 1,480.9 (925.9) (52.1)
DENNY'S CORP DENN US 296.8 (102.3) (36.9)
DISH NETWORK-A DISH US 10,280.6 (502.5) 705.1
DUN & BRADSTREET DNB US 1,825.5 (615.8) (321.8)
DOMINO'S PIZZA DPZ US 487.4 (1,167.7) 167.9
DIRECTV-A DTV US 20,593.0 (678.0) 2,813.0
EASTMAN KODAK EK US 5,882.0 (1,274.0) 954.0
DISH NETWORK-A EOT GR 10,280.6 (502.5) 705.1
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
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
GENCORP INC GY US 987.3 (161.1) 94.3
HCA HOLDINGS INC HCA US 23,809.0 (7,788.0) 2,719.0
HANDY & HARMAN L HNH US 372.2 (23.9) 13.2
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
US AIRWAYS GROUP LCC US 8,217.0 (30.0) (104.0)
LIZ CLAIBORNE LIZ US 1,255.8 (124.5) (26.5)
CHENIERE ENERGY LNG US 2,564.4 (509.7) 87.4
LORILLARD INC LO US 3,590.0 (449.0) 1,290.0
MOODY'S CORP MCO US 2,524.4 (223.2) 498.6
MAINSTREET EQUIT MEQ CN 453.0 (10.2) -
MORGANS HOTEL GR MHGC US 692.8 (29.2) 205.1
MEAD JOHNSON MJN US 2,465.4 (250.4) 572.3
MANNKIND CORP MNKD US 254.8 (203.5) 26.2
MPG OFFICE TRUST MPG US 2,725.0 (1,082.2) -
MERITOR INC MTOR US 2,675.0 (1,006.0) 205.0
NAVISTAR INTL NAV US 9,966.0 (764.0) 1,819.0
NATIONAL CINEMED NCMI US 796.4 (327.0) 74.0
NPS PHARM INC NPSP US 158.3 (159.7) 117.8
NEXSTAR BROADC-A NXST US 582.6 (181.2) 40.0
NYMOX PHARMACEUT NYMX US 10.0 (3.3) 6.8
ODYSSEY MARINE OMEX US 25.7 (8.1) (14.0)
OTELCO INC-IDS OTT US 319.2 (7.6) 22.4
OTELCO INC-IDS OTT-U CN 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-B PLA US 165.8 (54.4) (16.9)
PLAYBOY ENTERP-A PLA/A US 165.8 (54.4) (16.9)
PROTECTION ONE PONE US 562.9 (61.8) (7.6)
PRIMEDIA INC PRM US 208.0 (91.7) 3.6
QWEST COMMUNICAT Q US 16,849.0 (1,560.0) (2,828.0)
QUALITY DISTRIBU QLTY US 281.4 (124.4) 40.9
QUANTUM CORP QTM US 431.0 (61.1) 97.9
RADNET INC RDNT US 556.6 (81.8) 11.0
REVLON INC-A REV US 1,105.5 (686.5) 132.7
REGAL ENTERTAI-A RGC US 2,323.2 (541.6) (114.5)
RENAISSANCE LEA RLRN US 49.9 (31.4) (36.6)
RSC HOLDINGS INC RRR US 2,817.4 (62.2) (71.6)
RURAL/METRO CORP RURL US 303.7 (92.1) 72.4
SPIRIT AIRLINES SAVE US 545.2 (97.0) 27.6
SINCLAIR BROAD-A SBGI US 1,571.2 (144.6) 60.4
SALLY BEAUTY HOL SBH US 1,707.0 (340.6) 418.5
SINCLAIR BROAD-A SBTA GR 1,571.2 (144.6) 60.4
SMART TECHNOL-A SMA CN 546.2 (43.3) 173.7
SMART TECHNOL-A SMT US 546.2 (43.3) 173.7
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) -
THERAVANCE THRX US 315.1 (27.8) 266.9
TEAM HEALTH HOLD TMH US 832.2 (25.7) 44.8
LIN TV CORP-CL A TVL US 797.4 (127.9) 38.6
UNISYS CORP UIS US 2,949.3 (692.1) 547.6
UNITED RENTALS URI US 3,692.0 (29.0) 123.0
VONAGE HOLDINGS VG US 251.7 (102.0) (39.2)
VECTOR GROUP LTD VGR US 924.6 (61.4) 294.8
VANGUARD HEALTH VHS US 4,162.2 (186.6) 356.5
VIRGIN MOBILE-A VM US 307.4 (244.2) (138.3)
VENOCO INC VQ US 815.6 (21.6) 8.1
VERISK ANALYTI-A VRSK US 1,286.4 (109.1) (180.8)
WORLD COLOR PRES WC CN 2,641.5 (1,735.9) 479.2
WORLD COLOR PRES WC/U CN 2,641.5 (1,735.9) 479.2
WORLD COLOR PRES WCPSF US 2,641.5 (1,735.9) 479.2
WESTMORELAND COA WLB US 788.0 (173.9) (1.0)
WARNER MUSIC GRO WMG US 3,617.0 (254.0) (650.0)
WEIGHT WATCHERS WTW US 1,126.0 (636.6) (345.4)
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers"
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors" Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise
Marie Varquez, Philline Reluya, Ronald C. Sy, Joel Anthony G.
Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez,
Christopher G. Patalinghug, and Peter A. Chapman, Editors.
Copyright 2011. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
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re-mailing and photocopying) is strictly prohibited without prior
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herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $775 for 6 months delivered via e-
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are $25 each. For subscription information, contact Christopher
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*** End of Transmission ***