/raid1/www/Hosts/bankrupt/TCR_Public/110922.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, September 22, 2011, Vol. 15, No. 263
Headlines
155 EAST TROPICANA: Court Approves Gordon Silver as Attorneys
94TH AND SHEA: Can Use JPMCC's Cash Collateral Until Nov. 11
ABCLD HOLDINGS: Makes 'Non-Material' Changes to Prepackaged Plan
ALEXANDER GALLO: Seeks Court's Nod to Borrow $20MM From Bayside
ALEXANDER GALLO: Has Stipulation on Use of Senior Lenders' Cash
AMERICAN RAILCAR: Moody's Changes Ratings Outlook to Stable
AMR CORPORATION: Moody's Affirms 'Caa1', Gives Negative Outlook
AQUILEX HOLDINGS: Plagued by Cash Crunch, Lurking Covenant Breach
ARCADIA RESOURCES: Fails to Comply with Comerica Credit Agreement
ARK DEVELOPMENT: BB&T Drops Motion to Appoint Chapter 11 Trustee
AUGUSTA APARTMENTS: Court Approves Turner as Trustee's Counsel
BANNING LEWIS: Court OKs Sale of 18,000 Acres to Ultra Resources
BARNES BAY: Confirmation Denied; Anguilla Resort to Modify Plan
BARRINGTON BROADCASTING: Moody's Lifts Corp. Family Rating to B2
BATAVIA NURSING: Case Summary & 20 Largest Unsecured Creditors
BELLS CROSSING: No New Lenders; Chapter 11 Case Dismissed
BERNARD L. MADOFF: Feeder Funds Seek Bankruptcy Suit Removal
BERNARD L. MADOFF: Trustee Sues 5 Banks Seeking $95MM From Funds
BIG FOOT: Case Summary & 4 Largest Unsecured Creditors
BILL BARRETT: Moody's Gives 'B1' Rating to $300MM Senior Notes
BLOCK 106: To Restructure Creditor Debt for $5.4 Million
BMB MUNAI: Voluntarily Delists Common Shares from NYSE Amex
BORDERS GROUP: Wants Until Jan. 12 to Remove Civil Actions
BORDERS GROUP: Has Settlement With Carl Hogan
BROCK P TUCY: 1st Cir. BAP Reverses Stay Relief Order
CARCADE LLC: Fitch Assigns 'B+' Long-Term Issuer Defaults Ratings
CARIBE MEDIA: Has Nov. 3 Plan Confirmation Hearing
CEDAR FAIR: Moody's Says 'Ba3' CFR Not Affected by Park Sale
CHEYENNE HOTEL: Has Deal on Cash Collateral Use Until Dec. 31
COLUSA MUSHROOM: To Forgo $1-Mil. Sale Proceed Amid Buyer's Woes
DAVID FINDEL: Pleads Guilty to Bankruptcy Fraud
DECISION INSIGHT: Moody's Affirms 'B2' Corporate Family Rating
DENNY'S CORP: Moody's Affirms 'B2' Corporate Family Rating
E-DEBIT GLOBAL: Signs MOU to Expand ATM & POS ISO in Canada
EAST HARLEM PROPERTY: Files for Chapter 11 Bankruptcy Relief
ELEPHANT TALK: Seven Directors Elected at Annual Meeting
ELITE PHARMACEUTICALS: Midsummer Does Not Own Common Shares
EMDEON INC: Moody's Assigns 'B2' Corporate Family Rating
ENER1 INC: Boris Zingarevich Discloses 48% Equity Stake
ENTELOS INC: Simulations Plus to Bid for Assets
FAIRFIELD SENTRY: 200 Lawsuits May Move Out of Bankr. Court
FAITH EMPOWERED: Court Converts Case to Chapter 7
FIRST SECURITY: Completes 10-for-1 Reverse Stock Split
FIRST SECURITY: Seven Directors Elected at Annual Meeting
FTI CONSULTING: Moody's Affirms 'Ba2' Corporate Family Rating
FUSION TELECOMMUNICATIONS: Borrows $28,000 from Director
GALP GRAYRIDE: Court Approves Matthew Hoffman as Bankr. Counsel
GATE GOURMET: S&P Keeps 'BB' Senior-Lien & First-Lien Loan Ratings
GBO INC: To File Proposal Under Canada's BIA
GENERAL MOTORS: Moody's Says UAW Deal a "Positive Development"
GERIATRIC REALTY: Case Summary & 4 Largest Unsecured Creditors
GOLDMAN POINT: Case Summary & 5 Largest Unsecured Creditors
GORDON PROPERTIES: Owners Must Hold 2011 Meeting or Face Sanction
GUARANTY FINANCIAL: Liquidating Trustee Begins Filing Lawsuits
HORIZON LINES: Clarifies Exchange Offer Documents
HORIZON VILLAGE: Has Deal on Use of Wells Fargo's Cash Collateral
IDEARC INC: Verizon Must Face Fraud Claims Over Spinoff
INNER CITY: Has Interim Nod to Use Sr. Lenders' Cash Collateral
IRON MOUNTAIN: Moody's Gives B1 Rating to Proposed Bond Offering
J.C. EVANS: Court Approves Burnham Securities as Fin'l Advisor
JERRY BROOKS: North Alabama Bank Debt Not Dischargeable
LAMAR CROSSING: 6th Cir. BAP Affirms Sanctions Against Byrd
LEHMAN BROTHERS: Delays Decision on Giants Stadium Documents
LEHMAN BROTHERS: Investors File Class Suit vs. BNY Over $35MM Loss
LEHMAN BROTHERS: Fifth Ave. Building Fetches $726MM Investment
LEHMAN BROTHERS: Cayman Fund Under Voluntary Wind-Up
LEHMAN BROTHERS: Paulson Group Withdraws Plea for Disclosure
M&M STONE: Case Summary & 20 Largest Unsecured Creditors
M&M STONE: Case Summary & 20 Largest Unsecured Creditors
MANISTIQUE PAPERS: Resumes Operation After Getting Financial Aid
MEDCORP INC: Owner Joins Bidding War With $7.2 Million Offer
MESA AIR: Wants Until Jan. 20 to Object to Claims
MESA AIR: DVB Bank Transfer $28.1MM Claims to DG Value, et al.
MINOR FAMILY: Exclusivity Period Extended Until January 2012
MMFX INTERNATIONAL: Plan Became Effective on Aug. 8
MORITZ WALK: Court Denies Confirmation of Second Amended Plan
MSR RESORT: Seeks Court OK for Deal With Singaporean Funds
NANCY VENCILL: Directed to Disclose Conversation With Lawyer
NEBRASKA BOOK: Lacks $250 Million Loan for Plan Confirmation
NETWORK CN: To Effect a 1-for-5 Reverse Stock Split
NEW RIVER DRY: Sales Agent's Lawyer Sanctioned for Misconduct
NEW STREAM: Court Extends Plan Filing Exclusivity Until Nov. 8
NEWPAGE CORP: To Honor Rumford Property Taxes, Town Manager Says
NORTHCORE TECHNOLOGIES: Launches First Social Commerce Client
OLD CORKSCREW: Proposes to Pay Critical Vendor Claims
ORANGE GROVE: Inks Agreement With American Continental
ORANGE GROVE: Court to Hold Plan Confirmation Hearing on Sept. 27
PACESETTER FABRICS: Can Use Cash Collateral Until Dec. 16
PATRIOT NATIONAL: Martin Noble Resigns as EVP and CLO
PENINSULA GENERAL: Voluntary Chapter 11 Case Summary
PENINSULA HOSPITAL: Files for Chapter 11 Bankruptcy Protection
PEREGRINE I: Oil-Drilling Vessel Headed to Bankruptcy Auction
PITT PENN: May Access DIP Loan Proceeds Thru September
PJ FINANCE: Files Plan to Fend Off Lender Torchlight
PRM DEVELOPMENT: U.S. Trustee to Receive Fees Until Case Closing
PVH CORP.: Moody's Upgrades Corporate Family Rating to 'Ba2'
QIMONDA NA: Wins Confirmation of 6% to 11% Liquidating Plan
QUALTEQ INC: Has Interim Access Sterling Bank's Cash Until Oct. 6
QUALTEQ INC: Creative Okayed to Use Harris Bank's Cash Collateral
RAY ANTHONY: Ordered File Plan by Oct. 28 or Face Case Dismissal
REDCO DEV'T: Confirmation & Plan Outline Hearing Set for Oct. 4
RENAISSANCE LEARNING: Moody's Assigns 'B2' CFR; Outlook Stable
RENAISSANCE SURGICAL: To Employ XRoads as Restructuring Advisor
RENAISSANCE SURGICAL: Court Grants Relief Under Chapter 11
RIO RANCHO: Has Stipulation for Cash Collateral Use Until Sept. 30
RIVER ISLAND: Hearing on Termination of Cash Use Set for Oct. 6
ROCHA DAIRY: Court Approves Deagle Ames as Accountant
RYLAND GROUP: Reports Net Unit Orders for July and August
SINOTECH ENERGY: Receives NASDAQ Delisting Notice
SPEARMAN FOOD: Dist. Ct. Says Appeal Over Elkins' Engagement Moot
SHENGDATECH INC: Seeks to Hire Greenberg Traurig as Counsel
SHENGDATECH INC: To Tap Lionel Sawyer as Nevada Special Counsel
SMART ONLINE: Board Elects Robert Brinson as Independent Director
SOLYNDRA LLC: Collapse Prompts House Inquiry Into Loan Programs
SOUTH EDGE: Focus South Needs to Block Deal Before Filing Suit
SOUTH POINTE: Case Summary & 3 Largest Unsecured Creditors
STEPHEN BALDWIN: IRS Has Bankruptcy Case Dismissed
STILLWATER MINING: Moody's Gives B2 Rating to Sr. Unsec. Notes
SUPERTEL HOSPITALITY: Nasdaq Notifies on Low Stock Price
SYNTAX-BRILLIAN: Judge Order SB Trust Must Arbitrate Claims vs. LG
TARPON LAKESIDE: Voluntary Chapter 11 Case Summary
TEN SAINTS: Wants Stipulation for Wells Fargo's Cash Use Approved
TETON AIR: U.S. Trustee Wants Case Dismissed or Converted to Ch. 7
TOUSA INC: Wants to Continue Using Cash Collateral in October
TOWN CENTER AT DORAL: Bank Foreclosure Cues Chapter 11 Filing
TOWN CENTER AT DORAL: Case Summary & 20 Largest Unsec. Creditors
UPSTREAM WORLDWIDE: Board Grants CEO & CFO 100MM Stock Options
URS CORPORATION: Moody's Raises Bank Facility Rating From 'Ba1'
U.S. EAGLE: Plan Filing Period Extended Until Dec. 1
USA COMMERCIAL: 9th Cir. Rules on Various Appeals
VAN HUNTER: Frost Nat'l. Bank Files Liquidation Plan for Firm
WARNER JEWELERS: Files for Chapter 11 to Fend Off Receiver
WASTE2ENERGY HOLDINGS: Two Law Firms Seek to Withdraw as Counsel
WESTERN COMMUNICATIONS: Can Use BofA Cash Collateral Until Nov. 27
WILLIAMS LOVE: Files Schedules of Assets and Liabilities
WOMEN'S APPAREL: Sells Assets; To Close Plant by Oct. 31
WORLDWIDE FINANCIAL: Former CEO Pleads Guilty to Bankruptcy Fraud
W.R. GRACE: EPA Awaiting Comment on Libby Amphibole Asbestos
W.R. GRACE: Receives DOE Grant for Carbon Capture Technologies
YUKOS OIL: Russia's Tax Suit Violated Yukos' Rights, Court Rules
ZALE CORP: Incurs $112.3 Million Net Loss in Fiscal 2011
* Defect in MERS Ownership, Judge Prevents Foreclosure
* 8th Circuit Pens Treatise on Improvement-in-Position
* Judge Defers to Tax Court on $44 Million Disputed Tax
* Lawyer Suspended for Demeaning Comments about Judge
* District Judges Disagree on Who Rules on Safe Harbor
* July Claims Trading Reaches Highest Level in Last 12 Mos.
* Federal Debt in Relation to GDP Now at Historic Levels
* Bibby Financial Creates Cash Flow for Automotive Parts Supplier
* Some Slam Aggressive Tactics Used to Win Bankruptcy Work
* Dewey & LeBoeuf Nabs 2 Orrick Restructuring Partners
* Treasury's Former Mr. Fix-It Millstein Strikes Out on His Own
* Recent Small-Dollar & Individual Chapter 11 Filings
*********
155 EAST TROPICANA: Court Approves Gordon Silver as Attorneys
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Nevada authorized
155 East Tropicana LLC to employ Gordon Silver as attorneys.
The firm can be reached at:
GORDON SILVER
Attorneys At Law
Ninth Floor
3960 Howard Hughes Pkwy
Las Vegas, Nevada 89169
Tel: (702) 796-5555
The firm, will among other things:
a. advise Debtors with respect to their rights, powers and
duties as debtors and debtors in possession in the continued
operation and management of their business and property;
b. prepare and pursue confirmation of a plan of reorganization
and approval of a disclosure statement; and
c. prepare on behalf of Debtors all necessary applications,
motions, answers, proposed orders, other pleadings, notices,
schedules and other documents, and review all financial
and other reports to be filed.
Neither GS, nor any other shareholder or associate thereof has any
prior or present connection with Debtors, or Debtors' creditors or
other parties-in-interest. GS and its shareholders and associates
do not hold or represent any interest adverse to Debtors' estates.
GS and its shareholders and associates are disinterested persons
within the meaning of 11 U.S.C. Sec 101(14) and 327 as modified by
11 U.S.C. Sec. 1107(b).
The firm will charge the Debtors based on the hourly rates of its
professionals:
Personnel Rates
--------- -----
Paraprofessionals $130-$175
Associates $185-$350
Shareholders $455-$700
About 155 East Tropicana
155 East Tropicana LLC owns the world's first Hooters Casino
Hotel, a 696-room and 4-suite hotel located one block from the Las
Vegas Strip and across Tropicana Blvd. from MGM Grand.
155 East Tropicana, along with an affiliate, sought Chapter 11
protection (Bankr. D. Nev. Case No. 11-22216) on Aug. 1, 2011.
155 East sought bankruptcy protection to stop a scheduled Aug. 8,
2011 foreclosure of the second-lien debt. The two secured credit
facilities were accelerated early this year. Canpartners Realty
Holding Co. IV LLC acquired 98.4% of the $130 million in 8.75%
second-lien senior secured notes. An additional $32.2 million of
interest is owing on the second-lien debt. US Bank NA is the
indenture trustee. Holders of the $14.5 million in first-lien
debt have Wells Fargo Capital Finance Inc. as their agent. The
first-lien obligation is fully secured. Interest has been paid
currently at the default rate.
Alvarez & Marsal is the financial and restructuring advisor to the
Debtors. Garden City Group, Inc., is the claims agent.
155 East Tropicana estimated $50 million in assets and
$100 million to $500 million in liabilities as of the Chapter 11
filing.
94TH AND SHEA: Can Use JPMCC's Cash Collateral Until Nov. 11
------------------------------------------------------------
The Hon. Sarah S. Curley of the U.S. Bankruptcy Court for the
District of Arizona authorized 94th and Shea LLC to use cash
collateral of JPMCC 2007-CIBC19 Shea Boulevard LLC, a secured
creditor, to pay the expenses under the budget until Nov. 11,
2011.
Judge Curley noted that the Debtor is not authorized to pay the
expenses described as "Asset Management Fee" or "Consultant
Retainer for City of Scottsdale" without the lender's consent or
further order of the Court.
As adequate protection, the lender will be granted a replacement
lien in the cash collateral that is held in the Debtor's debtor-
in-possession operating accounts, to the same extent, and with the
same validity and priority, as existed prior to the filing of the
Debtor's bankruptcy cases.
A full-text copy of the cash collateral budget is available for
free at http://bankrupt.com/misc/94THANDSHEA_Budget.pdf
About 94th and Shea
Scottsdale, Arizona-based 94th and Shea, L.L.C., owns and operates
real property known as The Shops And Office at 9400 Shea, located
at 9325, 9343, 9375, and 9397 East Shea Boulevard in Scottsdale,
Arizona. The Property consists of 37,037 square feet of retail
space and 35,238 square feet of office space.
94th and Shea filed for Chapter 11 bankruptcy protection (Bankr.
D. Ariz. Case No. 10-37387) on Nov. 19, 2010. John J. Hebert,
Esq., Mark W. Roth, Esq., and Wesley D. Ray, Esq., at Polsinelli
Shughart, P.C., in Phoenix, Ariz., serve as counsel to the Debtor.
The Debtor disclosed $123,588 plus unknown amount in assets and
$22,870,408 in liabilities as of the Chapter 11 filing.
ABCLD HOLDINGS: Makes 'Non-Material' Changes to Prepackaged Plan
----------------------------------------------------------------
ABCLD Holdings, LLC, and secured creditor Armed Forces Bank, as
joint proponents, ask the U.S. Bankruptcy Court for the Northern
District of Texas to accept a modified Plan of Reorganization, and
find that the modification to the Plan is non-material.
The Plan Proponents also ask the Court to consider the First
Amended Plan of Reorganization based on the previously distributed
Disclosure Statement and previously cast ballots of creditors.
Certain of the prepetition loans between AFB and the Debtor were
participated with another financial institution. As a result of
negotiations between AFB and the participant in the loan
concerning generally accepted accounting principles, it became
apparent that a change in the Plan would be required to break the
one consolidated note into two notes. As a result of this change,
the Debtor and AFB have determined to modify the Plan to
adequately describe the modified structure.
The modified structure of the Loan between the Debtor and AFB,
specifically, splitting the $40 million dollar note into two
separate notes, has been incorporated in the First Amended Plan of
Reorganization. The changes incorporated in the Amended Plan do
not affect creditors other than AFB.
The Debtor and AFB are requesting that the Court proceed with the
disclosure statement hearing, based on the previously distributed
Plan and Disclosure Statement, but substitute the Amended Plan.
AFB and the Debtor believe that any ballots cast prior to the
Petition Date should be counted without requiring re-balloting
because the proposed modifications to the Plan are non-material.
Melissa S. Hayward, Esq., at Franklin Skierski Lovall Hayward LLP,
tells the Court that the changes included in the Amended Plan have
been agreed to by all affected parties and impact no creditor
other than AFB. The Debtor also favors the changes, and except
for executing two notes totaling $40,000,000 instead of one
totaling $40,000,000 and executing two deeds of trust on the
Mercer Crossing Property and the Valwood Tract to secure the Two
Notes in the amount of $40,000,000, the Debtor is not
substantively affected by the changes. These minor changes do
not justify the delay and expense of distributing a new disclosure
statement and a repeated voting procedure.
Armed Forces Bank, N.A., is represented by:
Keith Miles Aurzada, Esq.
BRYAN CAVE LLP
JP Morgan Chase Tower
2200 Ross Avenue, Suite 3300
Dallas, Texas 75201
Tel: (214) 721-8041
Fax: (214) 220-6716
E-mail: Keith.Aurzada@BryanCave.com
About ABCLD Holdings
Dallas, Texas-based ABCLD Holdings is a Nevada limited liability
company created on March 18, 2011, to acquire properties owned by
FRE Real Estate Inc. in Texas for $59.8 million. All of the
capital stock of ABCLD Holdings is owned by ABC Land &
Development, Inc., which is a corporation owned by Ronald Akin and
DTS Holdings, LLC. FRE filed for bankruptcy Jan. 4, 2011. The
case was dismissed March 1, 2011.
ABCLD filed for bankruptcy to implement a prepetition settlement
agreement with Armed Forces Bank, as successor by merger to Bank
Midwest, N.A. is the secured creditor with respect to the acquired
FRE Properties. AFB played an active role in obtaining dismissal
of the FRE bankruptcy proceeding. The Agreement contemplates the
foreclosure of certain of the properties, a prepackaged bankruptcy
filing, and the restructuring of the AFB debt.
ABCLD commenced the prepackaged Chapter 11 bankruptcy (Bankr.
N.D. Tex. Case No. 11-34969) on Aug. 1, 2011. Judge Barbara J.
Houser presides over the case. Melissa S. Hayward, Esq., at
Franklin Skierski Lovall Hayward LLP, serves as bankruptcy
counsel to the Debtor. In its petition, the Debtor estimated
assets of $50 million to $100 million and debts of $10 million to
$50 million. The petition was signed by Craig Landess, vice
president. Armed Forces Bank is represented by Keith Miles
Aurzada, Esq., at Bryan Cave LLP.
According to its schedules, the Debtor disclosed $66,579,892 in
total assets and $40,454,914 in total debts.
The Bankruptcy Court will hold a combined hearing on Sept. 19,
2011, at 9:15 a.m. to consider approval of the disclosure
statement and solicitation and voting procedures and to confirm
the prepackaged Plan.
ALEXANDER GALLO: Seeks Court's Nod to Borrow $20MM From Bayside
---------------------------------------------------------------
Alexander Gallo Holdings, LLC, et al., ask the U.S. Bankruptcy
Court for the Southern District of New York for authorization to
obtain secured postpetition financing in the form of a revolving
credit facility of up to $20,000,000, and to use cash collateral.
The DIP facility is being provided by an affiliate of Bayside
Capital Inc. Bayside is already under contract to buy the
Debtor's business for $88 million, absent higher and better offers
at an auction. Before bankruptcy, Bayside acquired the
$22 million in second-lien debt.
The proposed postpetition financing will be subject and
subordinate to the liens of Wells Fargo Bank, N.A., as agent for
lenders owed $46.9 million a prepetition senior credit facility.
The senior credit facility is secured by substantially all of
AGH's assets and is guaranteed by each of its affiliate debtors'
assets.
The principal terms of the Bayside DIP Facility are:
Borrowers: Alexander Gallo Holdings, LLC and The Hobart
West Group, Inc.
Guarantors: Set Depo, LLC; AG/Sanction LLC; Unlimited
Languages, Inc.; Deponet, LLC; Esquire
Deposition Services, LLC; Esquire Litigation
Solutions, LLC; Esquire Solutions, LLC;
Hobart West Solutions, LLC; and D-M
Information Systems, Inc.
Administrative Agent: Bayside Gallo Recovery, LLC, or its
affiliate.
DIP Lenders: Bayside Gallo Recovery, LLC, or its
affiliates and certain other lender parties
as provided in the Bayside DIP Agreement.
DIP Facility: A revolving credit facility in an amount not
to exceed $20,000,000 at any one time
outstanding.
Term: The earlier of (i) six (6) months after the
Closing Date, (ii) the date of the closing
of a sale of all or substantially all of the
Debtors' assets pursuant to Section 363 of
the Bankruptcy Code, (iii) a conversion of
one or more of the Debtors' Chapter 11 cases
to cases under Chapter 7 of the Bankruptcy
Code, (iv) the date when all outstanding
obligations under the Bayside DIP Facility
are declared immediately due and payable
following the occurrence and during
the continuation of an event of default
under the Bayside DIP Facility, and (v) the
appointment of a trustee or examiner with
expanded powers in the Debtors' Chapter 11
cases.
Interest: 10% p.a.
Default Interest: The otherwise applicable interest rate then
in effect plus 2%, payable in cash on
demand.
Security: The Bayside DIP Facility will be secured by
(i) a perfected first priority lien and
security interest, subject to the Carve-Out,
on all prepetition and postpetition property
of the Debtors and their respective estates
that, as of the Petition Date, was not
subject to any valid, perfected, and non-
avoidable liens, and (ii) a perfected second
priority lien and security interest, subject
to the Carve-Out, certain permitted liens,
the liens and security interests of the
First Lien Secured Parties under the Senior
Credit Facility, on all prepetition and
postpetition property of the Debtors and
their respective estates (other than
property described in clause (i) above).
Superpriority Subject to the Carve-Out, the indebtedness
Administrative of the Debtors under the Bayside DIP
Expense Claim: Agreement will constitute, in accordance
with Section 364(c) of the Bankruptcy Code,
a superpriority administrative claim having
priority over any and all administrative
expenses.
Sale-Related The Bayside DIP Agreement requires (a) the
Deadlines: Debtors to file, by Sept. 14, 2011, a motion
for approval of bid procedures with
respect to a sale of all or substantially
all of their assets, (b) entry of a bid
procedures order by Sept. 28, 2011, (c) an
auction for the sale of all or substantially
all of the Debtors' assets to be conducted
by Oct. 18, 2011, and (d) consummation of a
sale of all or substantially all of the
Debtors' assets by Oct. 24, 2011.
The Debtors tell the Court that the First Lien Secured Parties and
the Second Lien Secured Parties consented to the Bayside DIP
Facility and the use of cash collateral, subject to their receipt
of the adequate protection agreed upon by the parties.
About Alexander Gallo Holdings
Marietta, Georgia-based Alexander Gallo Holdings LLC --
http://www.alexandergalloholdings.com-- is the largest full
service, IT-enabled court reporting and litigation support
services company in the United States. AGH offers court
reporting, litigation support, trial software and other similar
services and has the only true national footprint in its market,
with roughly 55 offices located throughout the United States, and
a preferred provider network which serves as an extension of
Alexander Gallo's geographic reach. Founded in 1999 by Alexander
J. Gallo, a former court reporter, AGH has made 18 acquisitions
since 2003. Mr. Gallo has remained as CEO.
AGH, along with affiliates, filed for Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 11-14220) on Sept. 7, 2011.
Alexander Gallo will sell the business via 11 U.S.C. Sec. 363 to
Bayside Capital Inc., which had acquired $22 million in second-
lien debt. The price wasn't disclosed.
Alexander Gallo disclosed assets of $208 million and debt totaling
$258 million as of June 30, 2011. Liabilities include $47 million
on a first-lien revolving credit and term loan where Wells Fargo
Bank NA is agent. In addition to the second-lien debt held by
Bayside, there is $33 million in junior unsecured subordinated
notes owing to Harvest Equity Partners LLC plus another $148
million in junior unsecured subordinated notes owing to insider
Gallo Holdings LLC.
Bayside will also provide $20 million in financing for the
Chapter 11 effort. The new loan will have a first priority lien
on unencumbered assets and a lien behind the first-lien debt.
Bankruptcy Judge Allan J. Gropper presides over the case. Thomas
R. Califano, Esq., Jeremy R. Johnson, Esq., Esq., and Daniel G.
Egan, Esq., at DLA Piper LLP (US), in New York, serve as the
Debtors' general counsel. Squire, Sanders & Demsey (US) LLP
serves as the Debtor's corporate counsel. The Debtors' financial
advisor is Gordian Group, LLC. Marc L. Pfefferle, a partner at
Carl Marks Advisory Group LLC, serves as the Debtors' chief
restructuring advisor. Kurtzman Carson Consultants LLC serves as
the Debtor's claims agent.
ALEXANDER GALLO: Has Stipulation on Use of Senior Lenders' Cash
---------------------------------------------------------------
Alexander Gallo Holdings, LLC, et al., and Wells Fargo Bank,
National Association, as senior administrative agent for the
prepetition senior lenders owed $46.9 million, have entered into a
stipulation on the Debtor's use of cash collateral.
As agreed, among others, the Debtors will segregate and maintain
all cash collateral solely for the benefit of Wells Fargo, and may
only use cash collateral pursuant to a budget.
In consideration of the right to use cash collateral and the right
to continue incurring indebtedness under the P-Card Agreement,
referring to the WellsOne Commercial Agreement dated Feb. 2, 2007,
pursuant to which Wells Fargo issued certain commercial cards to
Gallo Holdings, and to provide Wells Fargo with adequate
protection of its interest in the Collateral, including any
diminution in the value thereof, the Debtors grant to the Senior
Administrative Agent replacement liens on, and security interests
in, all assets of the Debtors.
Wells Fargo will have a superpriority claim in these cases to the
maximum extent allowed by Section 507(b) of the Bankruptcy Code in
the event that the cash collateral, Collateral and the replacement
liens granted to Wells Fargo are insufficient to pay the Senior
Indebtedness in full. For the avoidance of doubt, the replacement
liens of the Senior Administrative Agent will have priority over
any lien granted by the Debtors in favor of a debtor in possession
lender.
A copy of the stipulation is available for free at:
http://is.gd/tgNmms
Counsel for Wells Fargo Bank can be reached at:
Michael Stewart, Esq.
Colin Dougherty, Esq.
FAEGRE & BENSON LLP
2200 Wells Fargo Center
90 South Seventh Street
Minneapolis, MN 55402
Tel: (612) 766-7000
E-mail: mstewart@faegre.com
cdougherty@faegre.com
About Alexander Gallo Holdings
Marietta, Georgia-based Alexander Gallo Holdings LLC --
http://www.alexandergalloholdings.com-- is the largest full
service, IT-enabled court reporting and litigation support
services company in the United States. AGH offers court
reporting, litigation support, trial software and other similar
services and has the only true national footprint in its market,
with roughly 55 offices located throughout the United States, and
a preferred provider network which serves as an extension of
Alexander Gallo's geographic reach. Founded in 1999 by Alexander
J. Gallo, a former court reporter, AGH has made 18 acquisitions
since 2003. Mr. Gallo has remained as CEO.
AGH, along with affiliates, filed for Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 11-14220) on Sept. 7, 2011.
Alexander Gallo will sell the business via 11 U.S.C. Sec. 363 to
Bayside Capital Inc., which had acquired $22 million in second-
lien debt. The price wasn't disclosed.
Alexander Gallo disclosed assets of $208 million and debt totaling
$258 million as of June 30, 2011. Liabilities include $47 million
on a first-lien revolving credit and term loan where Wells Fargo
Bank NA is agent. In addition to the second-lien debt held by
Bayside, there is $33 million in junior unsecured subordinated
notes owing to Harvest Equity Partners LLC plus another $148
million in junior unsecured subordinated notes owing to insider
Gallo Holdings LLC.
Bayside will also provide $20 million in financing for the
Chapter 11 effort. The new loan will have a first priority lien
on unencumbered assets and a lien behind the first-lien debt.
Bankruptcy Judge Allan J. Gropper presides over the case. Thomas
R. Califano, Esq., Jeremy R. Johnson, Esq., Esq., and Daniel G.
Egan, Esq., at DLA Piper LLP (US), in New York, serve as the
Debtors' general counsel. Squire, Sanders & Demsey (US) LLP
serves as the Debtor's corporate counsel. The Debtors' financial
advisor is Gordian Group, LLC. Marc L. Pfefferle, a partner at
Carl Marks Advisory Group LLC, serves as the Debtors' chief
restructuring advisor. Kurtzman Carson Consultants LLC serves as
the Debtor's claims agent.
AMERICAN RAILCAR: Moody's Changes Ratings Outlook to Stable
-----------------------------------------------------------
Moody's Investors Service changed the ratings outlook of American
Railcar Industries, Inc. to stable from negative in consideration
of improved business conditions that have led to the restoration
of operating profits and prospects for sustainable revenue growth
over the near term.
ARI has a Corporate Family Rating of Caa1 and a Probability of
Default Rating of B3. The company has a Speculative Grade
Liquidity Rating of SGL-2.
RATINGS RATIONALE
ARI's B3 Probability of Default Rating balances the company's
strong cash balance and improvement in business conditions in the
railcar sector against expectations for increased spending on the
company's small, but growing leasing business, and risks
associated with the undertaking of this new business segment.
After several years of weak delivery levels and persistent
operating losses that coincided with a prolonged recession in the
railcar manufacturing sector, ARI has recently shown signs of
revived railcar demand that should result in improved operating
performance. ARI reported positive operating income in the second
quarter ending June 2011, for the first time since 2009, as
railcar shipments in the first half of 2011 were more than double
the levels of same period in 2010. Moody's expects that the
company will be able to book a stream of orders at a pace modestly
ahead of delivery levels, further increasing backlog and
supporting improved prospects for revenue growth.
The ratings consider risks and benefits associated with the
company's planned development of a railcar leasing business.
Unlike many other railcar manufacturers ARI has not had a captive
leasing business. Starting in 2011, the company began to build a
modest railcar leasing fleet through the sale of company-
manufactured equipment to its leasing division. As of June 2011,
approximately 640 railcars in ARI's backlog represent sales to its
leasing operations. This will result in a substantial increase in
investments, and free cash flow is expected to be negative over
the near term. While starting a new leasing business will involve
a number of risks, Moody's views positively the company's ability
to fund this investment from existing cash holdings. If
implemented successfully while maintaining adequate liquidity, the
addition of leasing operations could be a positive factor over the
long run.
The substantial cash balances underlie Moody's assessment of a
good liquidity position which supports the SGL-2 liquidity rating.
However, Moody's believes that the strong current liquidity could
be eroded over the near term due to increased calls on cash for
working capital as production levels increase, and a growing level
of investment in the company's new leasing operations. The
Corporate Family Rating is positioned at Caa1 to reflect Moody's
assessment that recovery would be substantially restricted in the
event of default.
The stable ratings outlook reflects expectations that the company
will be able to generate positive operating margins of at least 5%
quarterly through 2012, while backlog of railcars for sale to
external customers grows from current levels as orders outpace
deliveries over this period. ARI's cash balances are expected to
deteriorate as the result of investments in its lease fleet, but
should remain quite robust over the near term.
The ratings or their outlook could be raised if the trend in new
railcar deliveries remain on pace for over 4,000 units annually
while backlog continues to grow. Debt to EBITDA of less than 6.5
times and EBIT to Interest in excess of 1.2 time would support an
upgrade of the Probability of Default Rating to B2.
Ratings could be lowered if the company were to substantially
accelerate investment in its leasing fleet without commensurate
increases in sales of equipment to external customers, resulting
in the use of a majority of the company's current cash reserves
over the near term. This would be particularly concerning if a
large portion of lease fleet deliveries were taken on speculation,
rather than against firm lease commitments. An unexpected
deterioration in railcar demand that would result in a declining
trend in railcar deliveries, possibly resulting in a return to
operating losses, would also warrant lower rating consideration.
The principal methodology used in rating ARI was the Global
Manufacturing Industry Methodology published in December 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.
American Railcar Industries, Inc., headquartered in St. Charles,
Missouri, is a leading North American manufacturer of covered
hopper and tank railcars, and also provides railcar leasing,
repair and fleet management services on a modest scale.
AMR CORPORATION: Moody's Affirms 'Caa1', Gives Negative Outlook
---------------------------------------------------------------
Moody's Investors Service affirmed its ratings of AMR Corporation:
Caa1 corporate family, Caa1 probability of default, B1 and B2
senior secured, Caa2 senior unsecured and all of its ratings
assigned to the company's Equipment Trust Certificates and all but
one of its Enhanced Equipment Trust Certificates. Moody's changed
the Speculative Grade Liquidity rating to SGL-3 from SGL-2 and the
rating of the A-1 tranche of the company's 2001-1 EETC to Caa1
from B2. The outlook is negative.
RATINGS RATIONALE
The change in outlook to negative reflects Moody's expectations
that AMR will continue to demonstrate weak operating metrics over
the medium term as debt maturities and needed investment in fleet
modernization meaningfully exceed the operating cash flow that
Moody's anticipates the company will generate, resulting in an
erosion of the company's liquidity profile. The outlook change
also considers the pressure that the company's loss-making
operations exert on credit metrics and the uncertainty of AMR's
ability to timely achieve a cost structure that leads to sustained
positive free cash flow and de-levering of the capital structure.
The downgrade of the Speculative Grade Liquidity rating
anticipates that AMR will be hard pressed to achieve positive free
cash flow generation over at least the next 12 months. The
continuing high cost of jet fuel and potentially tepid growth in
travel demand in upcoming quarters will constrain pressure on free
cash flow generation, which was at a $1.1 billion deficit in the
last 12 months to June 30, 2011. AMR's disadvantaged cost
structure keeps it from achieving margins and operating cash flow
at levels that are competitive with its U.S. airline peers. With
few remaining unencumbered assets after completing the routes and
slots financing in March 2011, Moody's believes that AMR will
increasingly rely on its unrestricted cash balance, $5.2 billion
at June 30, 2011, to help meet a portion of the $3.1 billion of
debt due through year-end 2012. Accordingly, Moody's believes that
the company's cash balance could settle below $4.0 billion before
the end of 2012.
The Caa1 Corporate Family rating reflects the company's weak
credit metrics profile and continuing negative free cash flow
generation. Debt to EBITDA and EBIT to Interest approached ten
times and 0.5 times, respectively, at June 30, 2011. Uncompetitive
labor costs and the relative inefficiency of the fleet burden AMR
with an inferior profit margin profile. Needed replacement of the
fleet will sustain adjusted debt at high levels beyond the medium
term. The long time needed to transform the fleet is likely to
prevent marked improvement in operating earnings; keeping leverage
elevated. The prospects for attaining a competitive labor cost
structure also remain uncertain as does a sustained retreat of the
price of jet fuel. The combination of these factors is likely to
prevent AMR from strengthening credit metrics to levels indicative
of a higher rating level. The Caa1 rating also considers that AMR
should be able to fund deliveries of new aircraft as it has
arranged financing for an overwhelming majority of the order-book,
including sale leaseback transactions.
The downgrade of the rating on the A-tranche of the 2001-1 EETC
reflects Moody's estimate of a loan-to-value well in excess of
100% as the result of the recent change in this transaction's
collateral. Fourteen aircraft, either Boeing B737-800s or B777-
200ERs left the collateral pool of this EETC Series upon the
maturity of the A-2 tranche earlier this year. Thirty-two late
1990's vintage McDonnell Douglas MD-80's, an aircraft which is
becoming less desirable as fuel prices remain high, support the
remaining tranches of this EETC. Liquidity facilities support each
tranche, causing Moody's to affirm the Caa2 and Caa3 ratings on
the B and C tranches, respectively, leaving these ratings
equivalent to, or higher than Moody's ratings on the company's
various ETC's which do not benefit from liquidity facilities.
The ratings could be downgraded should AMR be unable to strengthen
credit metrics from the June 30, 2011 levels. The inability to
maintain unrestricted cash above $3.0 billion could also pressure
the rating. Moody's anticipates that the pace of improvement in
the metrics profile will be slow because it does not expect AMR to
achieve significant cost reductions that would dramatically
improve its profitability in upcoming quarters. Additionally, the
cost of jet fuel is likely to remain elevated above $2.50 per
gallon, preventing the company from experiencing some relief on
this expense line item. Potential weaker demand could also
challenge the industry, and AMR, to grow yields in upcoming
quarters. Debt to EBITDA that remains above 8.0 times, EBIT to
Interest sustained below 0.5 times or an EBITDA margin of less
than 10.0% could result in a downgrade as could the per gallon
cost of jet fuel being sustained above $3.50.
Demonstrated improvement in credit metrics relative to the levels
at June 30, 2011 would be required for Moody's to consider
returning the outlook to stable. Moody's would look for sustained
positive free cash flow generation in excess of two percent of
debt, Debt to EBITDA of less than 8.0 times and EBIT to Interest
greater than 0.8 times.
The principal methodology used in rating AMR Corporation was the
Enhanced Equipment Trust And Equipment Trust Certificates Industry
Methodology published in December 2010 and Global Passenger
Airlines Industry Methodology published in March 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.
AQUILEX HOLDINGS: Plagued by Cash Crunch, Lurking Covenant Breach
-----------------------------------------------------------------
Dow Jones' DBR Small Cap reports that after maxing out its
revolving loan last month, Aquilex Holdings LLC remains on the
radars of distressed-debt traders and analysts as they weigh the
potential of the Company securing a new credit line, an equity
injection or a waiver to avoid triggering debt covenants.
About Aquilex Holdings
Aquilex Holdings LLC is the parent of Aquilex Corporation, a
leading provider of critical maintenance, repair and industrial
cleaning solutions to the energy industry. Through our divisional
and branch offices in the United States and Europe, we provide our
services to a diverse global base of over 600 customers, primarily
in the oil and gas refining, chemical and petrochemical
production, fossil and nuclear power generation and waste-to-
energy industries.
The Company reported a net loss of $13.9 million on $226.6 million
of revenues for the six months ended June 30, 2011, compared with
a net loss of $25.1 million on $213.3 million of revenues for the
same period of 2010.
The Company's balance sheet at June 30, 2011, showed
$670.5 million in total assets, $490.9 million in total
liabilities, and stockholders' equity of $179.6 million.
The Company's Credit Agreement requires it to maintain certain
financial ratios, including a minimum ratio of Adjusted EBITDA to
total interest expense and maximum ratios of total debt and senior
secured debt to Adjusted EBITDA.
"While the Company was in compliance with its debt covenants as of
June 30, 2011, based on current business conditions and forecast,
there can be no assurance that the Company will be in compliance
with those covenants as of Sept. 30, 2011, or thereafter," the
Company said in its Form 10-Q for the quarter ended June 30, 2011.
ARCADIA RESOURCES: Fails to Comply with Comerica Credit Agreement
-----------------------------------------------------------------
Arcadia Services, Inc., and its wholly owned subsidiaries Arcadia
Health Services, Inc., Grayrose, Inc., Arcadia Health Services of
Michigan, Inc., and Arcadia Employee Services, Inc., as borrowers,
are parties to an Amended and Restated Credit Agreement with
Comerica Bank dated as of July 13, 2009, and as further amended by
Amendment No. 1 dated as of June 9, 2010, and Amendment No. 2
dated as of Oct. 31, 2010. The borrowings under the Credit
Agreement are guaranteed by RKDA, Inc., parent of ASI. RKDA is a
wholly owned subsidiary of Arcadia Resources, Inc.
On Sept. 13, 2011, Borrowers and RKDA received a letter from
Comerica stating that Borrowers have failed to comply with Section
5.16 of the Credit Agreement because as of July 31, 2011,
Borrowers failed to maintain the minimum required level of
Subordinated Debt, as defined in the Credit Agreement, owed to
Arcadia. As of Sept. 13, 2011, there was $8.5 million outstanding
under the Credit Agreement, which Indebtedness is subject to the
terms of the Revolving Credit Note dated as of July 13, 2009, as
amended on Oct. 31, 2010.
Because of the events described in the Notice Letter, Comerica
informed Borrowers that Comerica has no obligation to make further
advances under the Revolving Note and that future advances will be
subject to the sole discretion of Comerica. Comerica has not
sought to accelerate the repayment of the Indebtedness in its
Notice Letter and at the present time is continuing to advance
funds. While Borrowers expect that advances will continue, there
can be no assurances that Comerica will not exercise its
discretion to discontinue further advances under the Revolving
Note.
PrairieStone Pharmacy, LLC, a limited liability company whose
member interests are owned by Arcadia, is a party to a Line of
Credit and Security Agreement by and between PrairieStone and H.D.
Smith Wholesale Drug Co. dated as of April 23, 2010. As of
Sept. 13, 2011, PrairieStone had outstanding borrowings under the
LOC Agreement of $4.8 million, which borrowings are subject to the
Line of Credit Note dated April 23, 2011. Pursuant to Section
6(a) of the LOC Agreement, the Borrowers' failure to comply with
the Subordinated Debt Covenant under the Credit Agreement could
result in a Material Adverse Affect on Arcadia or could become a
default under the LOC Agreement. Should this occur, HD Smith
would have the right (a) under the HD Smith Note, at its option,
to declare the HD Smith Indebtedness immediately due and payable,
and (b) under the LOC Agreement and related loan documents, to
exercise its rights with respect to the Collateral as described
therein. On Sept. 16, 2011, PrairieStone gave written notice of
the Borrowers' failure to comply with the Subordinated Debt
covenant under the Credit Agreement.
About Arcadia HealthCare
Arcadia HealthCare is a service mark of Arcadia Resources, Inc.
(nyse amex:KAD), and is a leading provider of home care, medical
staffing and pharmacy services under its proprietary DailyMed
program. The Company, headquartered in Indianapolis, Indiana, has
65 locations in 18 states. Arcadia HealthCare's comprehensive
solutions and business strategies support the Company's vision of
"Keeping People at Home and Healthier Longer."
The Company's balance sheet at June 30, 2011, showed
$25.85 million in total assets, $48.57 million in total
liabilities, and a $22.72 million total stockholders' deficit.
The Company reported a net loss of $14.35 million on
$100.04 million of revenues for the fiscal year ended March 31,
2011, compared with a net loss of $31.09 million on $98.08 million
of revenues for the fiscal year ended March 31, 2010.
BDO USA, LLP, in Troy, Michigan, expressed substantial doubt about
Arcadia Resources' ability to continue as a going concern. The
independent auditors noted that the Company has suffered recurring
losses from operations and has a net capital deficiency.
ARK DEVELOPMENT: BB&T Drops Motion to Appoint Chapter 11 Trustee
----------------------------------------------------------------
Branch Banking and Trust Co. withdrew its motion filed with the
U.S. Bankruptcy Court for the Southern District of Florida for the
appointment of a Chapter 11 trustee in Ark Development/Oceanview
LLC's bankruptcy case.
BB&T is a North Carolina banking corporation, as successor-in-
interest to Colonial Bank by asset acquisition from the FDIC as
receiver for Colonial Bank.
About Ark Development
Ark Development/Oceanview LLC owns three pieces luxury homes in
Fort Lauderdale, Florida -- at 1431 North Atlantic Boulevard; 1427
North Atlantic Boulevard; and 1423 North Atlantic Boulevard. All
three properties are in the final stages of the construction
process. The Debtor estimates that the value of each property is
roughly $4 million.
Ark Development/Oceanview filed for Chapter 11 bankruptcy (Bankr.
S.D. Fla. Case No. 11-20382) on April 18, 2011. Judge John K.
Olson presides over the case. The Debtor disclosed $12,017,522 in
assets and $11,794,591 in liabilities as of the Chapter 11 filing.
The U.S. Trustee said it will not appoint at this time a committee
of creditors for the Debtor's case.
AUGUSTA APARTMENTS: Court Approves Turner as Trustee's Counsel
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of West
Virginia authorized Robert L. Johns, the Chapter 11 Trustee for
the bankruptcy estate of Augusta Apartments, LLC, to employ Turner
& Johns, PLLC as counsel.
The professional services of Turner & Johns will render are:
(a) To give the Trustee advice with respect to his powers and
duties and assist him as needed in his administration of
the Debtor's estate;
(b) To prepare on behalf of the Trustee any necessary
applications, motions, reports and other pleadings;
(c) To represent the Trustee at hearings on various motions,
applications and proceedings;
(d) To investigate and institute any proceedings relating to
transactions between the Debtor and its creditors;
(e) To perform accounting services related to Debtor's
accounts and payrolls; and
(f) To perform other legal and accounting services as
necessary and appropriate in connection with the Trustee's
performance of his duties.
The Debtor previously employed individuals to perform the
accounting functions for the Debtor. However, in December 2010,
the accounting personnel were no longer employed by the Debtor.
The Trustee and the Assistant U.S. Trustee have determined that it
is more economically feasible for the Trustee's law firm to
provide the needed accounting services.
The attorneys and paralegals will charge their ordinary hourly
rates, which they currently are:
Attorneys $175 to $360 per hour
Paralegals $90 per hour.
These professionals will also charge $90 to $200 per hour for
providing accounting assistance.
To the best of the trustee's knowledge, Turner & Johns is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached at:
Wendell B. Turner, Esq.
Robert L. Johns, Esq.
TURNER & JOHNS, PLLC
216 Brooks Street, Suite 200
Charleston, WV 25301
About Augusta Apartments
Morgantown, West Virginia-based Augusta Apartments, LLC, filed for
Chapter 11 bankruptcy protection on February 19, 2010 (Bankr. N.D.
W.Va. Case No. 10-00303). Kristian E. Warner, the Company's
managing member, signed the petition. The Company estimated its
assets and debts at $10 million to $50 million as of the Petition
Date.
In July 2010, Bankruptcy Judge Patrick M. Flatney approved the
appointment of Robert L. Johns as Chapter 11 trustee. A secured
creditor and the U.S. Trustee sought a trustee to replace
management, saying that Augusta management used funds from the
apartment to pay debts of Warner family members.
BANNING LEWIS: Court OKs Sale of 18,000 Acres to Ultra Resources
----------------------------------------------------------------
The Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware authorized The Banning Lewis Ranch Company,
LLC, et al., to sell 18,000 acres of land to Ultra Resources,
Inc., the stalking horse purchaser.
As reported in the Troubled Company Reporter on Aug. 30, 2011,
Ultra offered to buy 18,000 acres in the Banning Lewis Ranch area
for $26.2 million. The land was slated for the building of 75,000
homes, but the owners have filed for Chapter 11 bankruptcy
protection.
The Court also approved the assumption and assignment of certain
executory contracts to the stalking horse purchaser.
Ultra intends to complete the purchase of the acquired assets
pursuant to an asset purchase agreement dated as of June 29, 2011,
and fund the purchase price by Sept. 30, 2011.
The proceeds realized by the Debtor pursuant to the agreement will
be immediately used and disbursed, among other things:
a. to fund the expenses of the case in the amount of $565,00,
exclusive of fees and expenses related to any contested hearing
or adversary proceeding related to a rejection/assumption fight
with the City of Colorado Springs;
b. to repay any amount advanced by the lenders up to $300,000
of the 565,000 and used to pay such expenses of the case;
c. to fund expenses of the case and claims of the lenders in
the amount of $200,000;
d. to pay the commission payable to Eastdil Secured LLC
pursuant to the order retaining it entered by the Court; and
e. to fund the expense reimbursement of $250,000 to the
lenders.
Ultra Petroleum Corp. is an independent oil and gas company
engaged in the development, production, operation, exploration and
acquisition of oil and natural gas properties. The Company is
incorporated under the laws of the Yukon Territory, Canada. The
Company is headquartered in Houston.
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: Confirmation Denied; Anguilla Resort to Modify Plan
---------------------------------------------------------------
U.S. Bankruptcy Judge Peter J. Walsh rejected Barnes Bay
Development Ltd.'s reorganization plan, heeding the objections of
creditors seeking the return of deposits on residences at the
Viceroy Anguilla Resort and Residences.
After evidence wrapped up on the second day of a hotly contested
confirmation hearing, Judge Walsh cut off closing arguments and
said he would issue a ruling denying confirmation of the plan by
the end of the week, according to Lance Duroni at Bankruptcy
Law360.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Judge Walsh ruled the plan improperly discriminated
among those who had contracts to purchase units in the project.
Judge Walsh said he will file a written opinion later.
Meanwhile, according to the Bloomberg report, Judge Walsh told the
resort to file a revised plan by today, Sept. 22, in advance of a
renewed confirmation hearing Sept. 23.
According to Bloomberg, a lawyer for the resort said that the new
plan won't give purchasers anything aside from the ability to
carry out the contract and buy a unit. Or, they can sue in
Anguilla. Judge Walsh previously said that purchasers could use
the courts in Anguilla to establish if they have any rights in the
Objection by Creditors
A group of creditors identified as the Ad Hoc Committee of Class 8
Creditors asked the Court to deny confirmation of the Plan.
The Ad Hoc Committee consists of 35 individual members holding 16
claims against the Debtors. The objecting creditors are all
individuals or companies that put down deposits on residences at
the Debtors' swanky resort in Anguilla and cried foul when the
plan proposed that most would receive a 15% recovery and a few
would get 50%.
The modified amended Plan, the Ad Hoc Committee relates, provides
for cash distributions to the various unsecured classes as:
Unsecured Creditor Class Proposed Distribution
------------------------ ---------------------
Class 5 General Unsecured Claims 100%
Class 6 PSA Claims (Tier 1) 50%
Class 8 PSA Claims (Tier 3) 15%
Class 9 Prepetition Lender Deficiency Claim 0%
The modified amended Plan indicate that the public auction sale of
substantially all the Debtors' assets was conducted, and that
Starwood was the sole and successful bidder with a bid of
$165 million.
The Ad Hoc Committee explains, among other things:
-- the modified amended Plan cannot be confirmed, even if the
Class 8 creditor group's expectations of the modified amended
Plan's rejection by the Class 8 are met, the Plan is still not
subject to confirmation because it did not satisfy the
requirements of section 1129 (a) (1) of the Bankruptcy Code;
and
-- the offered justifications support neither the unfair
discrimination nor the separate classification of Class 8
creditors.
The Ad Hoc Committee of Class 8 Creditors is represented by:
William D. Sullivan, Esq.
SULLIVAN, HAZELTINE, ALLINSON LLC
901 North Market Street, Suite 1300
Wilmington, DE 19801
Tel: (302) 428-8191
Fax: (302) 428-8195
- and -
John J. Monaghan, Esq.
Diane N. Rallis, Esq.
HOLLAND & KNIGHT LLP
10 St. James Avenue
Boston, MA 02116
Tel: (617) 523-2700
Fax: (617) 523-6850
E-mail: john.monaghan@hklaw.com
diane.rallis@hklaw.com
Chapter 11 Plan
As reported in the Troubled Company Reporter on Sept. 16, 2011,
the Debtor filed on Aug. 19, a second amended modified joint
Chapter 11 plan of reorganization to, among other things, address
objections raised by Roberta A. DeAngelis, U.S. Trustee for
Region 3.
The Plan provides for the payment in full of all holders of
general unsecured creditors, including all trade vendors.
A blacklined version of the Aug. 19 Plan is available for free at
http://ResearchArchives.com/t/s?76be
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.
BARRINGTON BROADCASTING: Moody's Lifts Corp. Family Rating to B2
----------------------------------------------------------------
Moody's Investors Service upgraded Barrington Broadcasting Group
LLC's Corporate Family Rating (CFR) and Probability of Default
Rating (PDR) each to B2 from B3. Moody's also upgraded the
company's Senior Secured First Lien Revolver and Senior Secured
First Lien Term Loan each to B1, LGD 3 -- 34% from B2, LGD 3 --
36%, and the 10.5% Senior Subordinated Notes to Caa1, LGD 5 -- 88%
from Caa2, LGD 5 -- 86%. The upgrades reflect the company's
improved operating performance and credit metrics. The Speculative
Grade Liquidity Rating is unchanged at SGL -3. The rating outlook
is stable.
Upgrades:
Issuer: Barrington Broadcasting Group LLC
-- Corporate Family Rating: Upgraded to B2 from B3
-- Probability of Default Rating: Upgraded to B2 from B2
-- Senior Secured First Lien Revolver due August 2012 ($17.5
million reduced commitment): Upgraded to B1, LGD 3 -- 34%
from B2, LGD 3 -- 36%
-- Senior Secured First Lien Term Loan due August 2013 ($121.1
million outstanding): Upgraded to B1, LGD 3 -- 34% from B2,
LGD 3 -- 36%
-- Senior Subordinated Notes due August 2014 ($54.9 million
outstanding): Upgraded to Caa1, LGD 5 -- 88% from Caa2, LGD
5 -- 86%
Unchanged:
Issuer: Barrington Broadcasting Group LLC
-- Speculative Grade Liquidity Rating: Affirmed SGL -- 3
Outlook Action:
Issuer: Barrington Broadcasting Group LLC
-- Outlook is stable
RATINGS RATIONALE
Barrington's B2 corporate family rating incorporates its
moderately high, trailing 8 quarter debt-to-EBITDA ratio of
approximately 4.8x as of June 30, 2011 (including Moody's standard
adjustments, or approximately 4.2x based on trailing 4 quarters)
and good free cash flow. Moderately high leverage poses challenges
for managing a business vulnerable to advertising spending cycles.
Lack of scale also constrains the rating, although the company
benefits from a diverse station portfolio in terms of both
geography and network affiliations. These broadcast properties
combined with Barrington's continued local market focus and
attractive margins create the capacity to generate good unlevered
cash flow; however, the company faces heightened competition for
advertising dollars due to media fragmentation. Barrington has
reduced funded debt balances to $185.2 million as of June 2011
from $227.9 million at December 2009. Moody's expects management
to be opportunistic in the refinancing of its revolver and term
loan prior to their August 2012 and August 2013, respective
maturities, and ratings assume the company will be successful in
obtaining new or amended facilities given its improved credit
profile.
The stable outlook reflects Moody's expectation that Barrington
will maintain two year average debt-to-EBITDA ratios below 5.25x
(including Moody's standard adjustments) and generate free cash
flow-to-debt of 5% or more. The stable outlook also assumes
application of free cash flow to debt repayment, along with EBITDA
growth, will enable Barrington to further improve its financial
metrics.
Ratings could be downgraded if two-year average debt-to-EBITDA
ratios are sustained above 5.75x (including Moody's standard
adjustments) or if deterioration in operating performance results
in free cash flow ratios falling below 5%. Ratings could also be
downgraded if liquidity were to become strained or Barrington were
no longer able to comply with financial maintenance covenants due
to poor performance, cash dividends, or share repurchases.
Barrington's moderately high leverage and lack of scale limit
upward momentum; however, ratings could be upgraded if a reduction
in absolute debt or improvement in operating performance leads to
expectations for two-year average leverage being sustained
comfortably under 4.25x (incorporating Moody's standard
adjustments) and management showed a commitment to financial
policies consistent with the higher rating. An upgrade would also
require expectations for good liquidity, including the refinancing
of bank facilities and sustained positive free cash flow.
The principal methodology used in rating Barrington Broadcasting
Group was the Global Broadcast Industry Methodology published in
June 2008. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Barrington Broadcasting Group, LLC, headquartered in Hoffman
Estates, Illinois, owns or programs 24 network television stations
in 15 markets. Barrington focuses on small to mid-sized markets
ranked #69 - #199 across the United States and all of the
company's primary digital streams are affiliated with networks
including NBC (6 stations), ABC (6 stations), CBS (4 stations),
Fox (3 stations) and CW (5 stations). Barrington has been a
portfolio company of Pilot Group since the broadcaster was founded
2003. Net revenues for the 12 months ended June 30, 2011 totaled
$124 million.
BATAVIA NURSING: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Batavia Nursing Home, LLC
2302 Wherle Drive
Williamsville, NY 14221
Bankruptcy Case No.: 11-13223
Chapter 11 Petition Date: September 19, 2011
Court: U.S. Bankruptcy Court
Western District of New York (Buffalo)
Judge: Michael J. Kaplan
Debtor's Counsel: Arthur G. Baumeister, Jr., Esq.
AMIGONE, SANCHEZ, ET AL
1300 Main Place Tower
350 Main Street
Buffalo, NY 14202
Tel: (716) 852-1300
E-mail: abaumeister@amigonesanchez.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/nywb11-13223.pdf
The petition was signed by Marc I. Korn, managing member.
Affiliates that filed separate Chapter 11 petitions:
Entity Case No. Petition Date
------ -------- -------------
Fairchild Manor Nursing Home, LLC 11-13013 08/30/11
Geriatric Realty Corp. 11-13225 09/19/11
BELLS CROSSING: No New Lenders; Chapter 11 Case Dismissed
---------------------------------------------------------
Judge J. Craig Whitley of the U.S. Bankruptcy Court for the
Western District of North Carolina entered an order on Sept. 15,
2011, dismissing the Chapter 11 case of Bells Crossing, LLC.
As reported by The Troubled Company Reporter on Aug. 12, 2011,
Bells Crossing sought for the dismissal of its bankruptcy case,
stating that it had hoped to find new lenders but had been unable
to do so and thus, was unable to rehabilitate itself and file a
plan of reorganization. The Debtor noted a continuing loss to its
estate. Specifically, its single asset real estate entity owns a
parcel of property that has a value substantially less than the
outstanding balance on the note and deed of trust as to which the
property is collateral.
Bells Crossing, LLC, based in Mooresville, North Carolina, owns
230 acres of property in Iredell County. It filed for Chapter 11
bankruptcy (Bankr. W.D.N.C. Case No. 11-50572) on May 9, 2011.
Judge J. Craig Whitley presides over the case. R. Keith Johnson,
Esq. -- rkjpa@bellsouth.net -- in Stanley, North Carolina, serves
as the Debtor's bankruptcy counsel. In its schedules, the Debtor
estimated assets of $10,002,000 and liabilities of $15,429,162.
The petition was signed by Ben Thomas, its member and manager.
Bells Crossing owes $15.2 million to Community One Bank NA. Bells
Crossing estimates the land is worth $10 million.
Bankruptcy Administrator Linda W. Simpson has not appointed an
official committee of unsecured creditors in the Debtor's case.
BERNARD L. MADOFF: Feeder Funds Seek Bankruptcy Suit Removal
------------------------------------------------------------
Keith Goldberg at Bankruptcy Law360 reports that two alleged
feeder funds of Bernard L. Madoff's Ponzi scheme asked a New York
federal judge Monday to remove suits lodged by the trustee
overseeing liquidation of Madoff's firm from bankruptcy court,
saying the suits raise securities issues that belong in district
court.
Law360 says the Primeo Fund and the Herald Fund, affiliates of
HSBC PLC unit HSBC Securities Services Luxembourg SA, argue that
claims lodged by Irving H. Picard that they profited from Madoff's
scam raise questions that require interpretations of the
Securities Investor Protection Act.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970. The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims
agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
US$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.)
As of July 15, 2011, a total of US$6.88 billion in claims by
investors has been allowed, with US$794.9 million to be paid by
the Securities Investor Protection Corp. Investors are expected
to receive additional distributions from money recovered by Mr.
Picard from lawsuits or settlements.
BERNARD L. MADOFF: Trustee Sues 5 Banks Seeking $95MM From Funds
----------------------------------------------------------------
Bloomberg News reports that the liquidator of Bernard L. Madoff's
firm sued five banks and funds demanding return of about $95
million withdrawn from a so-called feeder fund to the Ponzi
scheme. Irving Picard, the trustee overseeing the liquidation of
Bernard L. Madoff Investment Securities LLC, sued Delta National
Bank & Trust Co. to recover at least $20.6 million allegedly
received from investments made with the money manager by Fairfield
Sentry Ltd. He sued the National Bank of Kuwait S.A.K. for
$18.7 million withdrawn from Fairfield Sentry. The trustee claims
Fairfield transferred "customer property" to Delta Bank, according
to court papers filed in U.S. Bankruptcy Court in Manhattan.
Mr. Picard is also seeking at least $26.8 million from Unifortune
Asset Management Sgr Spa and Unifortune Conservative Fund and at
least $14.8 million from DEZ Financial Management Ltd., according
to court filings.
Bloomberg News notes that Mr. Picard, who has filed more than
1,000 suits, is pursuing comparatively small amounts from
investors who redeemed money from the feeders before Mr. Madoff's
2008 arrest. The trustee's settlement with Walter Noel's
Fairfield Sentry was approved in court in June.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970. The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims
agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
US$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.)
As of July 15, 2011, a total of US$6.88 billion in claims by
investors has been allowed, with US$794.9 million to be paid by
the Securities Investor Protection Corp. Investors are expected
to receive additional distributions from money recovered by Mr.
Picard from lawsuits or settlements.
BIG FOOT: Case Summary & 4 Largest Unsecured Creditors
------------------------------------------------------
Debtor: Big Foot Properties, Inc.
1956 Jammes Road, Unit 51
Jacksonville, FL 32210
Bankruptcy Case No.: 11-06868
Chapter 11 Petition Date: September 19, 2011
Court: U.S. Bankruptcy Court
Middle District of Florida (Jacksonville)
Judge: Jerry A. Funk
Debtor's Counsel: Jason A. Burgess, Esq.
THE LAW OFFICES OF JASON A. BURGESS, LLC
2350 Park Street
Jacksonville, FL 32204
Tel: (904) 521-9868
E-mail: jason@jasonaburgess.com
Scheduled Assets: $1,260,935
Scheduled Debts: $2,140,051
A list of the Company's four largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/flmb11-06868.pdf
The petition was signed by Dan E. Footman, president.
BILL BARRETT: Moody's Gives 'B1' Rating to $300MM Senior Notes
--------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to the proposed
offering of $300 million senior notes due 2019 by Bill Barrett
Corporation (Bill Barrett). The proceeds from the notes offering
will be used to repay revolver borrowings incurred in 2011 to fund
acquisitions and capital expenditures in excess of operating cash
flow. The outlook remains stable.
RATINGS RATIONALE
"This debt offering refinances revolver borrowings on a long-term
basis and replenishes Bill Barrett's liquidity," commented Pete
Speer, Moody's Vice-President. "The stable outlook reflects our
expectation that the company's production and proved reserve
growth from this year's large capital investments will keep pace
with the increases in debt and thereby avoid further significant
increases in leverage metrics."
Bill Barrett's Ba3 Corporate Family Rating (CFR) is supported by
management's extensive experience in the Rocky Mountain region,
good liquidity and very competitive finding and development costs
and returns. The rating is restrained by the company's
concentration in natural gas, limited geographic diversification
and smaller production and reserve scale than all other Ba3 rated
peers. The two acquisitions completed in 2011 have significantly
increased Bill Barrett's leverage on production and proved
developed (PD) reserves since the properties acquired were
primarily acreage with relatively small volumes of PD reserves and
production. Pro forma debt/average daily production and debt/PD
reserves at June 30, 2011 were nearly $15,000/boe and $8/boe,
respectively, up from the relatively low levels of $9,500/boe and
$4.7/boe at the beginning of 2011.
While the pro forma leverage remains below many Ba3 rated peers,
Moody's views this leverage as full for Bill Barrett's Ba3 CFR
given its relatively low proportion of oil and natural gas liquids
in its production and smaller scale. However, Bill Barrett has a
consistent track record of strong capital productivity and
returns, and therefore Moody's expects the company to meet its
production growth targets and increase its PD reserves by the end
of 2011. This will increase the company's scale and limit further
increases in leverage metrics over the remainder of the year,
supporting its Ba3 CFR.
If Bill Barrett's production and PD reserve growth does not meet
expectations or the company makes significant additional acreage
acquisitions, then the outlook could be changed to negative or the
ratings downgraded. Debt/average daily production above
$17,500/boe or debt/PD above $8/boe could pressure the ratings. A
positive rating action is unlikely in the near to medium term
given Bill Barrett's elevated leverage and significantly smaller
scale than Ba2 and Ba3 rated peers.
The B1 senior notes rating reflects both the overall probability
of default of Bill Barrett, to which Moody's assigns a PDR of Ba3,
and a loss given default of LGD 4, 68% (changed from LGD 5, 75%).
The company has a $700 million committed senior secured revolving
credit facility with a borrowing base of $800 million per the most
recent re-determination in March 2011, that is expected to be
reduced to approximately $725 million because of the notes
offering. The senior notes are unsecured and therefore are
subordinate to the senior secured credit facility's potential
priority claim to the company's assets. This results in the senior
notes being notched one rating beneath the Ba3 CFR under Moody's
Loss Given Default Methodology.
The principal methodology used in rating Bill Barrett was the
Independent Exploration and Production (E&P) Industry Methodology
published in December 2008. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
Bill Barrett Corporation is a publicly traded independent
exploration and production company headquartered in Denver,
Colorado.
BLOCK 106: To Restructure Creditor Debt for $5.4 Million
--------------------------------------------------------
Block 106 Development, LLC, Block 106 Mtge, LLC, and 1320-1330
Madison Street, LLC, have reached a consensual resolution of their
disputes after extensive negotiations.
Debtor Block 106 Development was formed in 2005 by Ursa
Development Group, LLC, to accede Ursa's rights in a purchase
agreement to acquire a 3.5-acre real property from 1320-1330
Madison, as seller, for $10 million. The Debtor intended to
develop the Property into a residential condominium.
Creditor Block 106 Mgte is an affiliate of the Seller, to which
the Debtor's documents related to a $6 million loan with The
Provident Bank was assigned to in 2008. Obligations to the loan
were evidenced by a Mortgage Note. In January 2009, the Creditor
sought a foreclosure judgment on the Property. Faced with the
foreclosure, the Debtor filed for Chapter 11 protection. In June
2011, the Creditor sought a dismissal of the Debtor's bankruptcy
case or a classification of the Debtor as a single asset real
estate.
To resolve their dispute, the parties agree on these terms:
-- The Debtor and Creditor acknowledge that the outstanding
amount due to the Creditor as of Sept. 1, 2011, is
$5.4 million. The Creditor will also be entitled to recover
reasonable costs and expenses in connection with its rights
under the Agreement. The Debtor will be responsible for any
commission charged by the Sheriff.
-- The maturity date under the Agreement is extended until
Aug. 31, 2016.
-- For the period Sept. 1, 2011, through Aug. 31, 2013,
interest will accrue on the Amount at a rate of 3% per
annum. For the period Sept. 1, 2013, through Aug. 31, 2016,
interest on the Amount will accrue at the rate of 5% per
annum.
-- The Debtor will use commercially reasonable efforts to
construct a residential housing project on the Property.
-- The "Seller Claim" is recognized and preserved. The Seller
Claim refers to the Seller's entitlement, under the Purchase
Agreement, to a percentage of proceeds from the sale or
rental of each residential unit at the Property.
-- In the event a subsequent bankruptcy petition is filed by or
against the Debtor, the Creditor will be entitled to in rem
relief against the Property.
The Debtor asks the Court to (i) approve the settlement; (ii)
dismiss the Debtor's Chapter 11 case; or in the alternative, (iii)
reinstate the "Tax Lien Claim" and claims of unsecured creditors.
The Tax Lien Claim refers to the City of Hoboken's claim for
outstanding real estate taxes for the Property totaling $370,178.
The Debtor cites that by restructuring its debt with the Creditor
under the Settlement, it will be able to move forward with the
development of the Property.
About Block 106 Development
Block 106 Development, LLC, filed for Chapter 11 bankruptcy
(Bankr. D. N.J. Case No. 11-27050) on June 1, 2011. Judge Donald
H. Steckroth presides over the case. Michael D. Sirota, Esq., at
Cole, Schotz, Meisel, Forman & Leonard, P.A., serves as the
Debtor's bankruptcy counsel. In its petition, the Debtor
estimated $10 million to $50 million in assets and $1 million to
$10 million in debts.
Block 106 is affiliated with Tarragon Corporation and various
related entities which filed for bankruptcy (Bankr. D. N.J. Lead
Case No. 09-10555) Jan. 12, 2009. Michael D. Sirota, Esq., Warren
A. Usatine, Esq., and Felice R. Yudkin, Esq., at Cole Schotz,
represented the Tarragon Debtors as bankruptcy counsel.
Tarragon's Joint Plan of Reorganization became effective, and the
Company emerged from Chapter 11 protection in July 2010.
Based in New York City, Tarragon Corp. (NasdaqGS:TARR) --
http://www.tarragoncorp.com/-- is a developer of multifamily
housing for rent and for sale. Tarragon's operations are
concentrated in the Northeast, Florida, Texas, and Tennessee.
BMB MUNAI: Voluntarily Delists Common Shares from NYSE Amex
-----------------------------------------------------------
BMB Munai, Inc., notified the U.S. Securities and Exchange
Commission that it is voluntarily removing its common stock on the
NYSE Amex.
About BMB Munai
Based in Almaty, Kazakhstan, BMB Munai, Inc., is a Nevada
corporation that originally incorporated in the State of Utah in
1981. Since 2003, its business activities have focused on oil and
natural gas exploration and production in the Republic of
Kazakhstan through its wholly-owned operating subsidiary Emir Oil
LLP. Emir Oil holds an exploration contract that allows the
Company to conduct exploration drilling and oil production in the
Mangistau Province in the southwestern region of Kazakhstan until
January 2013. The exploration territory of its contract area is
approximately 850 square kilometers and is comprised of three
areas, referred to herein as the ADE Block, the Southeast Block
and the Northwest Block.
The Company realized a loss from continuing operations of
$15.1 million during fiscal year 2011 compared to $10.7 million
during fiscal year 2010. This 41% increase in loss from
continuing operations was primarily attributable to increased
general and administrative and interest expense and the foreign
exchange loss of $415,803 incurred during fiscal year 2011.
Hansen, Barnett & Maxwell, P.C., in Salt Lake City, said that as a
result of the pending sale of Emir Oil LLP, BMB Munai will have no
continuing operations that result in positive cash flow, which
raise substantial doubt about its ability to continue as a going
concern.
The Company did not generate any revenue during the fiscal years
ended March 31, 2011, and 2010, except from oil and gas sales
through Emir Oil.
The Company's balance sheet at June 30, 2011, showed
$326.89 million in total assets, $103.95 million in total
liabilities, and $222.93 million total stockholders' equity.
Bankruptcy Warning
The Company has disclosed that if it does not complete the sale,
it will not have sufficient funds to retire the restructured
Senior Notes when they become due. "In this event, we would
likely be required to consider liquidation alternatives, including
the liquidation of our business under bankruptcy
protection," the Company said.
BORDERS GROUP: Wants Until Jan. 12 to Remove Civil Actions
----------------------------------------------------------
Pursuant to Rules 9006(b) and 9027 of the Federal Rules of
Bankruptcy Procedure, Borders Group Inc. and its affiliates ask
Judge Martin Glenn to extend the time by which they must file
notices of removal of civil actions and proceedings to which they
are or may become party to, to the later of:
(a) Jan. 12, 2012; or
(b) 30 days after the entry of an order terminating the
automatic stay with respect to the particular Civil
Action sought to be removed.
The Debtors filed the extension request before a Sept. 14, 2011
deadline to remove civil actions that have not been stayed
pursuant to Rule 9027(a)(2). With respect to a postpetition
Civil Action, the Debtors only have 30 days from receipt to
determine whether removal is appropriate.
The Debtors are parties to more than 75 Civil Actions pending in
various state and federal courts, the majority of which are
employment-related claims, intellectual property claims and
collection actions against certain of the Debtors' subtenants.
Many of the Civil Actions are subject to removal pursuant to
Section 1452 of Title 28 of the U.S. Code, which applies to
claims relating to bankruptcy cases.
Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman
LLP, in New York, apprises Judge Glenn that the Debtors have
been, among other things, focusing on closing their remaining
stories; reviewing and, where necessary, objecting to proofs of
claim; and selling certain of their assets.
Mr. Gleit details the tasks the Debtors have undertaken:
(i) The Debtors sought and obtained approval of bidding
procedures and auction dates for the separate sale of
their remaining leases and certain of their intellectual
property assets.
(ii) The Debtors received and reviewed over 3,400 proofs of
claim, sought and obtained Court approval for uniform
procedures for objecting to proofs of claims and filed six
omnibus objections to claims.
(iii) The Debtors have been diligently responding to several
creditor, vendor, landlord, shareholder, customer and
employee inquiries and to substantial due diligence
requests made by representatives of the Official Committee
of Unsecured Creditors.
(iv) The Debtors also commenced an adversary proceeding against
Next Jump, Inc., seeking a temporary restraining order and
preliminary injunction against Next Jump.
(iv) The Debtors have been working with their advisors and the
Creditors' Committee to draft a Chapter 11 plan and
related disclosure statement.
Against this backdrop, the Debtors have not had sufficient time
to determine which, if any, of the Civil Actions should be
removed, Mr. Gleit asserts. Accordingly, he points out, the
Debtors need additional time to determine whether the Civil
Actions should be removed and, if appropriate, transferred to the
bankruptcy court. "Granting the Debtors this additional
opportunity to consider removal of the Civil Actions will assure
that the Debtors make fully informed decisions to protect the
estates' interests in the Civil Actions," he insists.
Mr. Gleit assures the Court that nothing in the Debtors' Motion
will prejudice any party to the Civil Actions from seeking the
remand of any removed action under Section 1452(b). If the
Debtors ultimately seek to remove any action pursuant to
Bankruptcy Rule 9027, any party to the litigation can seek to
have the action remanded pursuant to Section 1452(b), which
provides that "[t]he court to which such claim or cause of action
is removed may remand such claim or cause of action on any
equitable ground," he explains.
Judge Glenn will consider the Debtors' request on October 18,
2011. Objections are due no later than October 11.
Judge Glenn entered a bridge order extending the Debtors'
deadline to file notices of removal for the Civil Actions until
the time as the Court has entered an order determining the
proposed extension.
About Borders Group
Borders Group operates book, music and movie superstores and mall-
based bookstores. At Jan. 29, 2011, the Debtors operated 642
stores, under the Borders, Waldenbooks, Borders Express and
Borders Outlet names, as well as Borders-branded airport stores in
the United States, of which 639 stores are located in the United
States and 3 in Puerto Rico. In addition, the Debtors operate a
proprietary e-commerce Web site, http://www.Borders.com/,
launched in May 2008, which includes both in-store and online
e-commerce components. As of Feb. 11, 2011, Borders employed a
total of 6,100 full-time employees, 11,400 part-time employees,
and approximately 600 contingent employees.
Borders Group Inc. and its affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in
Manhattan on Feb. 16, 2011.
David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn,
Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres &
Friedman LLP, in New York, serve as counsel to the Debtors.
Jefferies & Company's Inc. is the financial advisor. DJM Property
Management is the lease and real estate services provider. AP
Services LLC is the interim management and restructuring services
provider. The Garden City Group, Inc., is the claims and notice
agent.
Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein
LLP, serve as counsel to the DIP Agents.
Lowenstein Sandler represents the official unsecured creditors
committee for Borders Group. Bruce S. Nathan and Bruce Buechler,
members of Lowenstein Sandlers' Bankruptcy, Financial
Reorganization & Creditors' Rights Group, are leading the team.
The Debtor disclosed $1.28 billion in assets and $1.29 billion in
liabilities as of Dec. 25, 2010
Borders Group is closing its remaining stores. Borders selected
proposals by Hilco and Gordon Brothers to conduct going out of
business sales for all stores after no going concern offers of
higher value were submitted by the deadline.
Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Borders Group Inc., the United States' second
largest bookstore chain. (http://bankrupt.com/newsstand/or
215/945-7000
BORDERS GROUP: Has Settlement With Carl Hogan
---------------------------------------------
Borders Group Inc. and its affilaites ask the U.S. Bankruptcy
Court for the Southern District of New York to approve a
stipulation with Carl R. Hogan, granting the parties relief from
the automatic stay with respect to an action filed in the Pierce
County Superior Court in the state of Washington, and now on
appeal in Division II of the Washington State Court of Appeals.
On February 17, 2005, the City of Puyallup, Washington, filed a
Petition in Eminent Domain captioned City of Puyallup v. Carl R.
Hogan, et al., in Pierce County Superior Court in the State of
Washington. The City sought to condemn portions of a shopping
center owned by Mr. Hogan in connection with a planned public
road widening and reconfiguration project, in which shopping
center "Borders" retail Store No. 417 was a tenant.
Mr. Hogan and the City entered into a stipulation whereby the
Pierce County Superior Court entered an order of immediate
possession and use in July 2007. In June 2009, a jury awarded
Mr. Hogan a lump sum condemnation award of $5,150,000 following
the City's exercise of eminent domain.
In the Action, the Debtors asserted a right to a tenant's share
of that award, alleging negative impact on the value of Debtor
Borders, Inc.'s leasehold interest. Thus, the Pierce County
Superior Court allocated $711,602 of the award to the Debtors,
and judgment was entered in July 2010 in the Action.
In July 2010, Mr. Hogan appealed the allocation decision in the
Action to the Washington State Court of Appeals. In July 2010,
the Pierce County Superior Court granted Mr. Hogan leave to
deposit the sum of $938,129 in the registry of the state court
pending resolution of the Appeal, and suspended the running of
interest. The Debtors cross-appealed the Pierce County Superior
Court's ruling insofar as it suspended the running of interest
pending resolution of the Appeal, but did not contest the
allocation decision.
Briefing in the Appeal has already been completed and no further
briefs are required, but oral argument has not yet been
scheduled.
Against this backdrop, the parties agreed to the modification of
the automatic stay to proceed with respect to the Action and
Appeal. By entering into the Parties' Stipulation, the Debtors
are not waiving any defenses or affirmative claims at law or in
equity that they may assert in the Action or Appeal. Neither the
Parties' Stipulation nor any negotiations and writings in
connection with the Parties' Stipulation will in any way be
construed as or deemed to be evidence of or an admission on
behalf of any Party regarding any claim or right that the Party
may have against the other Party in the Action or Appeal.
Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman
LLP, in New York, assures the Bankruptcy Court that prosecution
and defense of the Parties' appeals will not constitute a
significant expense to the bankruptcy estates -- because the
Appeal has already been fully briefed, the bulk of the work to be
done in the Appeal has already been completed.
The hearing on the Debtors' Motion, originally scheduled for
Sept. 20, 2011, has been adjourned to Sept. 22.
About Borders Group
Borders Group operates book, music and movie superstores and mall-
based bookstores. At Jan. 29, 2011, the Debtors operated 642
stores, under the Borders, Waldenbooks, Borders Express and
Borders Outlet names, as well as Borders-branded airport stores in
the United States, of which 639 stores are located in the United
States and 3 in Puerto Rico. In addition, the Debtors operate a
proprietary e-commerce Web site, http://www.Borders.com/,
launched in May 2008, which includes both in-store and online
e-commerce components. As of Feb. 11, 2011, Borders employed a
total of 6,100 full-time employees, 11,400 part-time employees,
and approximately 600 contingent employees.
Borders Group Inc. and its affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in
Manhattan on Feb. 16, 2011.
David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn,
Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres &
Friedman LLP, in New York, serve as counsel to the Debtors.
Jefferies & Company's Inc. is the financial advisor. DJM Property
Management is the lease and real estate services provider. AP
Services LLC is the interim management and restructuring services
provider. The Garden City Group, Inc., is the claims and notice
agent.
Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein
LLP, serve as counsel to the DIP Agents.
Lowenstein Sandler represents the official unsecured creditors
committee for Borders Group. Bruce S. Nathan and Bruce Buechler,
members of Lowenstein Sandlers' Bankruptcy, Financial
Reorganization & Creditors' Rights Group, are leading the team.
The Debtor disclosed $1.28 billion in assets and $1.29 billion in
liabilities as of Dec. 25, 2010
Borders Group is closing its remaining stores. Borders selected
proposals by Hilco and Gordon Brothers to conduct going out of
business sales for all stores after no going concern offers of
higher value were submitted by the deadline.
Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Borders Group Inc., the United States' second
largest bookstore chain. (http://bankrupt.com/newsstand/or
215/945-7000
BROCK P TUCY: 1st Cir. BAP Reverses Stay Relief Order
-----------------------------------------------------
The U.S. Bankruptcy Appellate Panel for the First Circuit reversed
the bankruptcy court's orders granting Digital Federal Credit
Union's motion for relief from the automatic stay in the
bankruptcy case of Brock P. Tucy and denying Mr. Tucy's motion for
reconsideration. The BAP noted that the bankruptcy court appears
to have concluded after months of hearings that Mr. Tucy had
failed to meet his burden of establishing that his property was
"necessary to an effective reorganization" under subparagraph (B)
of 11 U.S.C. Sec. 362(d)(2) by showing that he had "'a reasonable
possibility of a successful reorganization within a reasonable
time.'" The BAP said there is ample evidence in the record to
sustain that conclusion, including the operational history of Mr.
Tucy's enterprises, his ever changing financial projections, and
what appears to have been a questionable and potentially
burdensome loan commitment from a third party. "Yet despite great
effort on our part to comb the record, we found no facts to
support a finding of no equity under Sec. 362(d)(2)(A). Thus, it
is our conclusion that the bankruptcy court erred in granting
Digital relief from stay solely on the basis of Sec.
362(d)(2)(B)," the BAP said.
In March 2008, Tucy Enterprises, Inc., as Trustee of the BKT
Realty Trust, and Maple Park executed a $5,100,000 note in favor
of Digital, which Tucy guaranteed. To secure the Note, BKT Realty
Trust (by Tucy Enterprises, as trustee) granted Digital a mortgage
and security agreement on the Property. To further secure the
Note, Glen Charlie Realty Trust (by Tucy, as trustee) also granted
Digital a mortgage and security agreement on the Property.
By March 2009, Tucy Enterprises and Maple Park had defaulted on
their obligations under the Note. Thereafter, the parties entered
into a forbearance agreement, and when Tucy Enterprises and Maple
Park again defaulted, Digital commenced foreclosure proceedings.
The case before the BAP is, BROCK P. TUCY, Appellant, v. DIGITAL
FEDERAL CREDIT UNION, Appellee, No. MB 11-014 (1st Cir. BAP). A
copy of the BAP's Sept. 15, 2011 decision is available at
http://is.gd/p49xBXfrom Leagle.com.
About Brock Tucy
Brock P. Tucy, in East Wareham, Massachusetts, is the sole trustee
and beneficiary of BKT Realty Trust and Glen Charlie Realty Trust.
He is also the 100% shareholder of Maple Park Properties, Inc., as
well as its sole officer, director and general manager. Glen
Charlie Realty Trust and BKT Realty Trust are the owners of a 400-
acre parcel of land located in Wareham, Massachusetts, which
includes woodlands, cranberry bogs, and an RV camping resort
operated by Maple Park. The Property generates income from the
sale of cranberries, sand and gravel, and from the rental of RV
sites.
Mr. Tucy filed for Chapter 11 protection (Bankr. D. Mass. Case No.
09-22152) on Dec. 16, 2009. Norman Novinsky, Esq., at Novinsky &
Associates represents the Debtor. The Company disclosed
$18,190,005 in assets and $7,381,151 in debts as of the Chapter 11
filing.
CARCADE LLC: Fitch Assigns 'B+' Long-Term Issuer Defaults Ratings
-----------------------------------------------------------------
Fitch Ratings has assigned Carcade LLC Long-term foreign and local
Issuer Default Ratings (IDRs) of 'B+', a Short-term IDR of 'B' and
National Long-term rating of 'A-(rus)'. The Outlooks for the
Long-term IDRs and National Rating are Stable.
Carcade's ratings reflect its liquid lease book, which reasonably
mitigates risks from a concentrated and potentially volatile
funding base, sound profitability due to adequate underwriting
policies and rigorous collection function. The funding
flexibility also benefits from potential liquidity support from
its Polish parent, Getin Holding (not rated) and more likely (due
to the parent's limited operations) from Carcade's sister
companies, including Noble Bank SA ('BB'/Stable). On the
downside, in addition to concentrated funding, the ratings also
reflect narrow franchise and potential margin compression as a
result of increasing competition.
Carcade operates in a niche of auto leasing, where its target
customers are small enterprises. This market has not yet been on
the large players' radar, which has allowed Carcade to sustain
above average margins and to expand the business. However, the
pressure on Carcade's margins is likely to gradually increase as
the segment becomes more competitive. The sector is also highly
cyclical as it is susceptive to overall economic trends. It
substantially declined in 2008-2009 due to the crisis, but has
subsequently recovered quickly due to the delayed demand.
Despite operating in a volatile environment, Carcade maintains a
relatively low cost of risk, at about 0.6% in 2010 and 3.0% in a
stressed 2009. The subprime risk profile of lessees is mitigated
by a relatively liquid pledge of cars (most are new mid-class
vehicles) and the rigorous collection function. The share of 30+
overdue loans declined to a pre-crisis level of 6.6% in H111 from
13.1% at end-2009. The coverage of 30+ overdue by reserves was
satisfactory at 73% at end-H111.
Funding is concentrated, with three-quarters coming from five
banks. The average maturity is one to two years. In Fitch's
view, these are potentially volatile, especially in periods of
market instability. However, the liquidity risk is mitigated by
the relatively short duration of assets and positive liquidity
gaps. The company also proved its ability to deleverage in 2008-
2009, when it halved its lease portfolio. Potential funding
support from the parent and/or sister companies also adds comfort.
Carcade is planning to diversify funding by increasing the number
of creditor banks, as well as through the issuance of an
amortizing ruble bond. Fitch believes that this should be
positive for the company's credit profile.
Carcade's capital level is solid, with a debt to equity ratio
of 367% at end-H111 (450% deducting the amount used for the
acquisition of Kubanbank). Capitalization is planned to be
sustained through profit retention. However, given the planned
growth, the company's leverage should increase. The internal
debt/equity threshold is 6 times, after which the shareholder will
consider a new equity injection.
The rating actions are as follows:
-- Long-term foreign currency IDR: assigned at 'B+'; Stable
Outlook
-- Long-term local currency IDR: assigned at 'B+'; Stable
Outlook
-- Short-term IDR: assigned at 'B'
-- Long-term National Rating: assigned at 'A-(rus)'; Stable
Outlook
CARIBE MEDIA: Has Nov. 3 Plan Confirmation Hearing
--------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Caribe Media Inc. scheduled a Nov. 3 confirmation
hearing for approval of the Chapter 11 plan when the bankruptcy
judge in Delaware signed an order Sept. 20 approving the
explanatory disclosure statement. The company said it dealt with
an objection from the U.S. Trustee who said it wasn't proper to
give a release to venture capital investor Welsh, Carson, Anderson
& Stowe, whose funds control the equity.
The judge also extended the Company's exclusive right to propose a
plan until Nov. 30, according to the Bloomberg report.
The report discloses that the Company and affiliates filed the
plan in August. The plan calls for secured lenders owed $127
million to take ownership and receive a $55 million loan, for a
projected recovery of 77% to 93%. Subordinated noteholders owed
about $58.6 million are to receive noting under the plan.
About Caribe Media
Caribe Media Inc. owns publication rights for certain print and
Internet directories in the Dominican Republic and Puerto Rico.
Caribe Media owns 60% of Axesa Servicios de Informacion, S. en C.,
a Yellow Pages publisher in Puerto Rico and the official publisher
of all telephone directories for Puerto Rico Telephone Company,
Inc., the largest local exchange carrier in Puerto Rico, and
US$100% of Caribe Servicios de Informacion Dominicana, S.A., the
sole directory publisher in the Dominican Republic with the
exclusive right to publish under the brand of Codetel, the largest
telecom operator in the Dominican Republic. Caribe Media is
wholly owned by CII Acquisition Holding Inc. They are affiliates
of Local Insight Media Holdings, Inc.
Caribe Media and CII filed for Chapter 11 bankruptcy protection
(Bankr. D. Del. Case Nos. 11-11387 and 11-11388) on May 3, 2011.
Caribe Media is being represented by lawyers at Kirkland & Ellis
LLP and Pachulski Stang Ziehl & Jones LLP as bankruptcy counsel.
Lawyers at Curtis, Mallet-Prevost, Colt & Mosle LLP will serve as
conflicts counsel.
Local Insight Media is also a debtor in its own Chapter 11 in
Delaware. Local Insight Media filed in 2010. Lawyers at Kirkland
and Pachulski served as counsel to Local Insight Media.
CEDAR FAIR: Moody's Says 'Ba3' CFR Not Affected by Park Sale
------------------------------------------------------------
Moody's Investors Service said Cedar Fair, L.P.'s Ba3 Corporate
Family Rating (CFR) and stable rating outlook are not affected by
its announced agreement to sell Great America Park located in
Santa Clara for $70 million and the company's intention to utilize
the net proceeds to pay down its term loan.
Cedar Fair'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 Cedar Fair's core industry
and believes Cedar Fair's ratings are comparable to those of other
issuers with similar credit risk. Other methodologies used include
Loss Given Default for Speculative Grade Issuers in the US,
Canada, and EMEA, published June 2009.
Cedar Fair, headquartered in Sandusky, Ohio, is a publicly traded
Delaware master limited partnership (MLP) formed in 1987 that owns
and operates 11 amusement parks (declining to 10 with the proposed
sale of Great America), seven water parks (six outdoor and one
indoor) and hotels in North America. Properties are located in the
U.S. and Canada and include Cedar Point (OH), King's Island (OH),
Knott's Berry Farm (CA), and Canada's Wonderland (Toronto). Cedar
Fair's revenue for the LTM ended 5/26/2011 was approximately $986
million.
CHEYENNE HOTEL: Has Deal on Cash Collateral Use Until Dec. 31
-------------------------------------------------------------
Cheyenne Hotel Investments, LLC, asks the U.S. Bankruptcy Court
for approval of a stipulation with Wells Fargo Bank on the use of
cash collateral and grant of adequate protection.
A previous bankruptcy court order provides that the authorization
to the Debtor's use of the cash collateral will cease on Oct. 31,
2011, unless extended by agreement.
Upon entry of an order approving the Stipulation, the Debtor is
authorized to use cash collateral in the ordinary course of
business in accordance with a budget covering the period from
Aug. 1, 2011, through Dec. 31, 2011. Thereafter, the Debtor will
provide to Wells Fargo an updated budget and detailed financial
reports every 90 days, commencing on Jan. 1, 2012, and continuing
on the 90th day thereafter. In addition, the Debtor intends to
make a monthly deposit with Wells Fargo in the amount of $7,189
per month as an FF&E reserve, which the Debtor is authorized to
use the FF&E reserve for improvements.
As adequate protection for any diminution in value of Wells
Fargo's interests:
A. The Debtor will pay to Wells Fargo as adequate protection
commencing on Aug. 11, 2011 and continuing on the 11th day
of each and every month thereafter the sun of $55,689,
a monthly insurance escrow of $1,476, a monthly real
property tax escrow of $6,852, and a monthly FF&E
reserve in the sum of $7,189 for a total monthly
adequate protection payment in the sum of $71,206.
B. The Debtor will make a one time "catch-up" adequate
protection payment to the Lender to cover 5 months of
non-payment of the Insurance Escrow and Tax Escrow (March
2011-July 2011) in the sum of $41,641.
C. Subject only to the Liens and Security Interests and any
valid and perfected non-voidable liens that were senior to
the liens and interests of the Liens and Security
Interests on the Petition Date, and as additional adequate
protection for the Debtor's use of Wells Fargo's Cash
Collateral, Wells Fargo is granted a valid and perfected
first priority and senior security interest in and lien on
all Cash Collateral of the Debtor.
Wells Fargo Bank is represented by:
John H. Bernstein, Esq.
1801 California Street, Suite 3100
Denver, Colorado 80202
Tel: (303) 297-2400
Fax: (303) 292-7799
E-mail: john.bemstein@kutakrock.com
A copy of the cash collateral stipulation and budget is available
for free at:
http://bankrupt.com/misc/CHEYENNEHOTEL_cashcollstip.pdf
About Cheyenne Hotel
Cheyenne Hotel Investments, LLC, owns a property consisting of a
104 room hotel located in Colorado Springs, and known as Homewood
Suites by Hilton. The company filed for Chapter 11 bankruptcy
protection (Bankr. D. Colo. Case No. 11-25379) on June 28, 2011.
The Debtor disclosed assets of $12,912,702 and liabilities of
$8,074,325 as of the Petition Date. Thomas Quinn, Esq., at Thomas
F. Quinn, P.C., in Denver, Colorado -- tquinn@tfqlaw.com -- serves
as counsel to the Debtor.
COLUSA MUSHROOM: To Forgo $1-Mil. Sale Proceed Amid Buyer's Woes
----------------------------------------------------------------
Colusa Mushroom, Inc., which operated a mushroom farm, filed for
Chapter 11 (Bankr. N.D. Calif. Case No. 05-12180) on Aug. 22,
2005. Its plan of reorganization was confirmed June 29, 2006.
Pursuant to the plan, the debtor's business was to be sold to
Premier Mushrooms, LP. The debtor's estate was to receive a note
for roughly $1.3 million secured by the assets sold to Premier.
The note was to be paid in three annual installments of $100,000
and a balloon payment of roughly $1 million due on June 30, 2010.
Premier made the three installment payments but failed to make the
balloon payment. Colusa Mushroom's case was subsequently
converted to Chapter 7 and Jeffry Locke was appointed trustee.
Mr. Locke has asked the Court to approve a compromise whereby he
accepts $102,245 in full satisfaction of the note. One objection
has been filed, by an attorney who represented the Creditors
Committee before plan confirmation and the liquidating trustee
after confirmation and before conversion. While he bases his
standing on an alleged claim for unpaid fees, his motivation is
that he has been blamed for the loss which will be realized if the
compromise is approved.
In a Sept. 18, 2011 Memorandum approving the compromise,
Bankruptcy Judge Alan Jaroslovsky held that the problem arises
from the fact that the bankruptcy estate's security interest in
most of the assets sold to Premier was never perfected. After
confirmation, Premier encumbered its assets to secure loans from
Sacramento Valley Farm Credit (now known as Farm Credit West) of
about $23 million. It appears that Farm Credit West is now
secured by the assets and that the bankruptcy estate holds only an
unsecured note.
It also appears that Premier is in financial trouble. Mr. Locke
has produced its financial records, which show it has a negative
net worth. Mr. Locke has produced evidence that Premier has been
negotiating settlements with its creditors and alleges that
Premier has been the subject of an involuntary bankruptcy petition
dismissed on a technicality. Premier is currently operating under
a negotiated forbearance agreement with Farm Credit West. In Mr.
Locke's judgment, the settlement is his best chance to receive
anything at all on account of the note.
Judge Jaroslovsky sees no flaw in Mr. Locke's analysis of the
situation, noting there is a substantial possibility that Premier
will not be able to pay its debts, leaving the Colusa bankruptcy
estate to collect its note from its collateral. However, it
further appears that the estate's security interest, not having
been perfected, is junior to that of Farm West Credit. "The court
accordingly finds sound reason for Locke's conclusion that his
$102,000.00 bird in the hand is worth more than the objection's $1
million in the bush," Judge Jaroslovsky said.
A copy of Judge Jaroslovsky's decision is available at
http://is.gd/BLgr4gfrom Leagle.com.
Colusa Mushroom, Inc., based in Petaluma, California, filed for
Chapter 11 bankruptcy (Bankr. N.D. Calif. Case No. 05-12180) on
Aug. 22, 2005. The Law Offices of Michael C. Fallon represented
the Debtor. In its petition, the Debtor estimated $50,000 to
$100,000 in assets and $1 million to $10 million in assets.
DAVID FINDEL: Pleads Guilty to Bankruptcy Fraud
-----------------------------------------------
Moe Bedard at loansafe.org, citing the Federal Bureau of
Investigation, says U.S. Attorney Paul J. Fishman announced that
David Findel, former CEO of Worldwide Financial Resources, has
pleaded guilty to bankruptcy fraud in connection with his January
2010 personal bankruptcy.
Mr. Findel pleaded guilty to information charging him with
bankruptcy fraud before U.S. District Court Judge Peter G.
Sheridan in Trenton, N.J. federal court.
Mr. Findel filed for individual Chapter 7 bankruptcy protection on
Jan. 29, 2010. According to the report, in his bankruptcy
petition, Mr. Findel concealed almost $200,000 in personal assets
from the U.S. Trustee, the bankruptcy case trustee, and creditors.
Mr. Findel claimed in the petition he had $5,500 in cash on hand,
no household goods, no jewelry, no automobiles, and no other
personal property of any kind not already listed in the petition.
However, according to documents and statements of witnesses, Mr.
Findel actually had $41,851 in cash on hand, eight watches with an
estimated value of $55,350, 21 boxes of fine china and silver with
an estimated value of $13,965, 511 bottles of wine with an
estimated value of $44,540, 11 paintings with an estimated value
of $7,750, and four pieces of jewelry with an estimated value of
$6,240, at or around the time he filed the petition.
The report also relates Mr. Findel said he claimed that in June
2009 he had transferred a 2009 Jeep Wrangler to another individual
in exchange for $5,000, but documents and witnesses indicated he
still possessed the vehicle, which had an estimated value of
$19,350.
As part of his guilty plea, Mr. Findel admitted that he was the
sole owner of all the property. He agreed to forfeit all right,
title, or interest in the property to the United States.
According to the report, the bankruptcy fraud count to which M.
Findel pleaded guilty carries a maximum potential penalty of five
years in prison and a $250,000 fine. Sentencing was scheduled for
Nov. 14, 2011, before Judge Sheridan. Mr. Findel pleaded guilty
Oct. 14, 2010, to Information charging him with wire fraud in
connection with an $11 million fraudulent loan scheme. He is
scheduled to be sentenced on that count Sept. 27.
U.S. Attorney Fishman credited special agents of the FBI, under
the direction of Special Agent in Charge Michael B. Ward, in
Newark, and Region 3 U.S. Trustee Roberta DeAngelis and the Newark
office of the U.S. Trustee, with the investigation that resulted
in the guilty plea.
The government is represented by Assistant U.S. Attorneys Aaron
Mendelsohn of the Economic Crimes Unit and Frances Bajada of the
Criminal Division in Newark.
DECISION INSIGHT: Moody's Affirms 'B2' Corporate Family Rating
--------------------------------------------------------------
Moody's Investors Service affirmed Decision Insight Information
Group (US) I, Inc.'s B2 corporate family rating (CFR), B2
probability of default rating and Ba3 senior secured ratings but
changed the ratings outlook to negative from stable.
RATINGS RATIONALE
Decision Insight's results have been softer than Moody's expected
when the ratings were first assigned in late 2010. This has
occurred due to persisting weakness in the U.S. and U.K. housing
markets, which has dampened demand for the company's property-
related services. These services include both transactional and
subscription-based products for the property and casualty
insurance sector as well as various information solutions for loan
originators, mortgage providers and the conveyancing market. The
outlook change to negative reflects Moody's expectation for
limited earnings growth and the potential that the company's
financial leverage may remain above 6.5x through much of the 12 to
18 month ratings horizon, leaving very limited capacity within its
rating category to absorb any further downside in its operating
performance.
Decision Insights's B2 CFR is constrained by its small size and
significant exposure to the challenging U.S. and U.K. housing
markets together with its high adjusted financial leverage and
thin free cash flow. Nonetheless, the company maintains strong
market positions in multiple products, has good geographic
exposure, and derives a significant amount of its revenues from
recurring subscription services with blue chip customers. As well,
its products tend to be an essential, but relatively low cost
component of its customers' processes, which reduces the expected
volatility of its results. Moody's views the company's liquidity
profile as good although Moody's notes that cushion to covenants
may become tight towards the end of 2012 as step downs/steps ups
occur.
Downward rating pressure could arise if the company's earnings
remain pressured such that Debt/EBITDA is sustained above 6.5x or
free cash flow is negative for an extended period. In addition,
downward rating action could occur if the company faces challenges
maintaining an acceptable liquidity position, including its
ability to maintain compliance with its bank financial covenants.
For the outlook to be revised to stable, Decision Insight must
demonstrate sustained improvement in its operating results while
maintaining a good liquidity position. While not considered likely
in the near term, the rating could be considered for upgrade
should the company sustain its Debt/EBITDA below 5x while
maintaining its strong market position.
Moody's last rating action on Decision Insight was on December 1,
2010 when Moody's assigned first-time ratings to the company.
The principal methodology used in rating Decision Insight was the
Global Business and Consumer Service Industry Methodology,
published October 2010. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA, published June 2009.
Headquartered in New Berlin, Wisconsin, Decision Insight
Information Group (US) I, Inc. is a leading supplier of property
information and related solutions to the financial services sector
in the U.S., Canada, U.K. and Ireland.
DENNY'S CORP: Moody's Affirms 'B2' Corporate Family Rating
----------------------------------------------------------
Moody's Investors Service upgraded Denny's Corporation's
Speculative Grade Liquidity rating to SGL-2 from SGL-3. In
addition, Moody's affirmed Denny's B2 Corporate Family and revised
its Probability of Default rating to B3 from B2. Moody's also
affirmed Denny's Inc.'s B1 rating on its $60 million senior
secured revolving credit facility and $250 million senior secured
term loan.
RATINGS RATIONALE
The upgrade of Denny's Speculative Grade liquidity rating to SGL-2
from SGL-3 reflects a more stable earnings stream as it moves to a
more asset light business model and a much lower interest burden
given the material repayment of debt -- specifically its 10%
unsecured notes. Moody's also expects the cushion under its
covenants will be more than adequate over the intermediate term.
The B2 Corporate Family Rating reflects Denny's relatively new
management team, high leverage and Moody's view that soft consumer
spending and high levels of promotions and discounts by
competitors will continue to weight on same store sales and
earnings. The ratings are supported by Denny's reasonable level of
brand awareness in its core markets, meaningful scale with
approximately 1,677 units, and good liquidity.
The stable outlook reflects the appointment of a permanent senior
management team and Moody's view that Denny's will maintain a
level of operating performance and debt protection measures that
are appropriate for its ratings and that the company will maintain
good liquidity.
Factors that could result in an upgrade include management's
successful execution of its business strategy that results in a
sustained improvement in same store sales trends that drive
stronger operating performance and debt protection metrics.
Specifically, a higher rating would require debt-to-EBITDA of
under 5.0 times, EBITA coverage of interest of above 1.5 times,
positive free cash flow, and good liquidity on a sustained basis.
Factors that could result in a downgrade include a prolonged
deterioration in operating performance or higher adjusted debt
levels that result in a weakening in debt protection metrics.
Specifically, a downgrade could occur if debt-to-EBITDA approached
6.5 times or EBITA coverage of interest fell to around 1.0 time.
Deterioration in liquidity could also place downward pressure on
the ratings.
Ratings affirmed and LGD rates adjusted are:
Denny's Corporation
Corporate Family Rating rated B2
Denny's Inc
$60 million senior secured revolver due 2015, rated B1 (LGD 2, 24%
from LGD3, 40%)
$250 million senior secured term loan B due 2016, rated B1 (LGD 2,
24% from LGD3, 40%)
Rating upgraded:
Speculative Grade Liquidity rating to SGL-2 from SGL-3
The Probability of Default rating was revised to B3 from B2 which
is consistent with Moody's Loss Given Default criteria given
Denny's steady debt repayment resulting in an all bank capital
structure.
The principal methodology used in rating Denny's Holdings, Inc was
the Global Restaurant Industry Methodology published in June 2011.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Denny's Holdings, Inc., headquartered in Spartanburg, South
Carolina, owns, operates and franchises full-service family dining
restaurants. Annual revenues are approximately $550 million.
E-DEBIT GLOBAL: Signs MOU to Expand ATM & POS ISO in Canada
-----------------------------------------------------------
E-Debit Global Corporation announced to its shareholders at its
annual general meeting held on Sept. 17, 2011, in Calgary,
Alberta, that it has entered into a signed memorandum of
understanding to expand its national ATM and POS independent sales
organizations network.
"After a review by the Board of Directors on Friday September 16,
2011, the Company announced today at its AGM that it had entered
into a Memorandum of Understanding ("MOU") to expand and grow the
automated banking machine (ABM), Point of Sale (POS) and related
businesses in North America," E-Debit Chief Executive Doug Mac
Donald said after the AGM.
"Terms and conditions of the MOU are currently covered by a
confidentiality agreement during a sixty (60) day "Exclusivity
Period" which the parties have agreed in order to ensure complete
due diligence has been completed. We are confident after the
meetings of the parties at our Board meeting that all parties are
willing and quite capable of meeting the requirements outlined in
the MOU and hopefully we can move forward operationally prior to
the end of the lock up term ("Exclusivity Period") as this is a
significant development in the expansion of our business
operations," stated Mr. Mac Donald.
About E-Debit Global Corporation
E-Debit Global Corporation (WSHE) is a financial holding company
in Canada at the forefront of debit, credit and online computer
banking. Currently, the Company has established a strong presence
in the privately owned Canadian banking sector including Automated
Banking Machines (ABM), Point of Sale Machines (POS), Online
Computer Banking (OCB) and E-Commerce Transaction security and
payment. E-Debit maintains and services a national ABM network
across Canada and is a full participating member of the Canadian
INTERAC Banking System.
We provided C&H with a copy of this Current Report on Form 8-K
prior to its filing with the Securities and Exchange Commission,
and requested that C&H furnish us with a letter addressed to the
Commission stating whether it agrees with the statements made by
us in this Current Report, and if not, stating the aspects with
which it does not agree. Attached to this Current Report on Form
8-K is the letter provided by C&H.
The Company reported a net loss of $1.15 million on $3.97 million
of total revenue for the year ended Dec. 31, 2010, compared with a
net loss of $1.28 million on $3.64 million of revenue during the
prior year.
The Company's balance sheet at June 30, 2011, showed $1.91 million
in total assets, $2.59 million in total liabilities, and a
$681,160 total stockholders' deficit.
As reported by the TCR on April 15, 2011, Cordovano and Honeck
LLP, in Englewood, Colorado, expressed substantial doubt about the
Company's ability to continue as a going concern, following the
2010 financial results. The independent auditors noted that the
Company has suffered recurring losses, has a working capital
deficit at Dec. 31, 2010, and has an accumulated deficit of
$4,457,079 as of Dec. 31, 2010.
EAST HARLEM PROPERTY: Files for Chapter 11 Bankruptcy Relief
------------------------------------------------------------
Chapter11Cases.com reports that East Harlem Property Holdings, LP,
voluntarily filed for chapter 11 protection, identifying
membership interests in 27 special purpose entities. In
aggregate, those 27 SPEs own approximately 1,200 residential units
and 50 commercial units which are located across 47 buildings in
New York City. The buildings are primarily located in the East
Harlem neighborhood.
According to the report, Court filings list a mezzanine loan held
by LaSalle Bank National Association (a subsidiary of Bank of
America, N.A.) as the only secured debt. The listed amount of the
mezzanine loan is slightly more than $27.5 million.
Chapter11Cases.com notes that it appears that the bankruptcy
filing was a result of a UCC foreclosure sale which had been
scheduled to occur on Sept. 16. The report says pleadings also
note that "the vast majority of [East Harlem Property Holdings']
books and records" are currently in the possession of a receiver
who was appointed by the Supreme Court of the State of New York on
Sept. 22, 2009.
About East Harlem
East Harlem Property Holdings, LP, filed for Chapter 11 relief
(Bankr. S.D.N.Y. Case No. 11-14368) on Sept. 15, 2011. Judge
James M. Peck presides over the bankruptcy case. Adam P. Wofse,
Esq., at Lamonica Herbst & Maniscalco, LLP, in Wantagh, New York,
represents the Debtor as counsel. In its petition, the Debtor
listed assets of between $100 million and $500 million and debts
of between $10 million and $50 million. The petition was signed
by Linda Greenfield, vice president of Harlem Housing, LLC, sole
and managing member of East Harlem GP, LLC, general partner.
ELEPHANT TALK: Seven Directors Elected at Annual Meeting
--------------------------------------------------------
Elephant Talk Communications Inc. held its 2011 annual meeting on
Sept. 14, 2011. At the meeting, 82,945,010 or 79% of the
outstanding shares of Common Stock entitled to vote were
represented by proxy or in person and, therefore, a quorum was
present. All of the seven nominees for directors were elected to
serve until the 2012 Annual Meeting of Stockholders and until
their respective successors have been duly elected and qualified,
namely: (1) Steven Van der Velden, (2) Jacques Kerrest, (3) Martin
Zuurbier, (4) Johan Dejager, (5) Roderick de Greef, (6) Phil
Hickman, and (7) Rijkman Groenink.
The Company's change in corporate domicile from California to
Delaware was approved by the stockholders. An amendment to the
Company's 2008 Long-Term Incentive Compensation Plan to increase
the number of shares available for issuance under the Plan from
5,000,000 to 23,000,000 was approved by the stockholders. The
appointment of BDO Seidman LLP as the Company's independent
registered public accounting firm for the fiscal year ending
Dec. 31, 2011, was ratified and was approved by the stockholders.
About Elephant Talk
Lutz, Fla.-based Elephant Talk Communications, Inc. (OTC BB: ETAK)
-- http://www.elephanttalk.com/-- is an international provider of
business software and services to the telecommunications and
financial services industry.
The Company reported a net loss of $92.48 million on $37.17
million of revenue for the year ended Dec. 31, 2010, compared with
a net loss of $17.30 million on $43.65 million of revenue during
the prior year.
The Company's balance sheet at June 30, 2011, showed
$51.24 million in total assets, $14.14 million in total
liabilities, and $37.09 million in total stockholders' equity.
As reported by the TCR on April 6, 2011, BDO USA, LLP, noted that
the Company has suffered recurring losses from operations and has
a net capital deficiency that raise substantial doubt about its
ability to continue as a going concern. As of Dec. 31, 2010, the
Company incurred a net loss of $92.5 million, used cash in
operations of $14.1 million and had an accumulated deficit of
$154.8 million.
ELITE PHARMACEUTICALS: Midsummer Does Not Own Common Shares
-----------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Midsummer Investment Ltd. disclosed that it
does not own any shares of common stock of Elite Pharmaceuticals,
Inc. As previously reported by the TCR on Feb. 24, 2011,
Midsummer disclosed that that it beneficially owns 7,486,818
shares of common stock or 7.68% equity stake. A full-text copy of
the filing is available for free at http://is.gd/bMdOUd
About Elite Pharmaceuticals
Northvale, New Jersey-based Elite Pharmaceuticals, Inc., is a
specialty pharmaceutical company principally engaged in the
development and manufacture of oral, controlled-release products,
using proprietary technology and the development and manufacture
of generic pharmaceuticals. The Company has one product,
Phentermine 37.5mg tablets, currently being sold commercially.
Demetrius & Company, L.L.C., in Wayne, New Jersey, expressed
substantial doubt about Elite Pharmaceuticals' ability to continue
as a going concern. The independent auditors noted that the
Company has experienced significant losses resulting in a working
capital deficiency and shareholders' deficit.
The Company reported a net loss of $13.6 million on $4.3 million
of revenues for the fiscal year ended March 31, 2011, compared
with a net loss of $8.1 million on $3.3 million of revenues for
the fiscal year ended March 31, 2010.
The Company's balance sheet at June 30, 2011, showed
$11.49 million in total assets, $50.33 million in total
liabilities, and a $38.84 million total stockholders' deficit.
EMDEON INC: Moody's Assigns 'B2' Corporate Family Rating
--------------------------------------------------------
Moody's Investors Service assigned B2 corporate family and
probability of default ratings to Emdeon Inc. Concurrently,
Moody's assigned (P)Ba3 ratings to the proposed $1,200 million
senior secured term loan and $125 million senior secured revolving
credit facility. The proceeds from the term loan along with $750
million of other unsecured debt and a $1,200 million equity
contribution by financial sponsors will be used to fund the
acquisition of the company by Blackstone Capital Partners VI for
approximately $3,300 million. The ratings outlook is stable.
These rating actions were taken (LGD point estimates are subject
to change and all ratings are subject to the execution of the
transaction as currently proposed and Moody's review of final
documentation):
Emdeon Inc.:
Corporate Family Rating, assigned B2;
Probability of Default Rating, assigned B2;
$1,200 million senior secured term loan, assigned (P) Ba3 (LGD2,
29%);
$125 million senior secured revolving credit facility, assigned
(P) Ba3 (LGD2, 29%).
Upon the close of the transaction, Moody's will withdraw the
ratings of Emdeon Business Services, a subsidiary of Emdeon Inc.,
as the proposed debt securities are expected to reside at the
parent level. In addition, post the finalization of amounts and
terms of the rated securities, Moody's will remove the provisional
(P) indicator from the instrument ratings.
RATINGS RATIONALE
The B2 corporate family rating reflects the company's high pro
forma debt leverage for the rating category of 6.5 times that will
result from an increase in debt levels by almost $1 billion to
close to $2 billion from approximately $950 million at June 30,
2011 following the buyout by Blackstone. Moody's currently
anticipates that the company will use free cash flow to reduce
debt leverage below 6.5 times by the end of 2012. The B2 corporate
family rating and/or stable outlook will be pressured if the
company fails to de-leverage as currently expected. In addition,
the rating considers the company's historically aggressive
financial policy by growing through "tuck-in" acquisitions. The B2
corporate family rating also reflects the extremely competitive
landscape of the healthcare technology industry that may result in
pricing pressure and impact the company's margins.
The B2 corporate family rating is supported by Emdeon's good
liquidity profile and its position as one of the leading providers
of revenue and payment cycle management with revenues of
approximately $1.1 billion. The company has successfully
maintained a stable and recurring revenue base as well as a
diverse base of customers. The company's revenues are protected by
its broad network and by high integration costs that may deter
customers from changing technology solution providers.
Additionally, the B2 corporate family rating considers the
expected positive impact of healthcare reform. The number of
transactions the company processes is expected to benefit from
higher service utilization as more individuals enter the U.S.
healthcare system. Increased focus by the healthcare industry on
capturing operational efficiencies will also offer growth
opportunities as companies are anticipated to increase the
utilization of information technology for revenue and payment
cycle management and reduce paper based transactions. Emdeon's
ability to cross-sell services is also expected to increase
revenue growth and expand margins.
The stable outlook reflects Emdeon's good liquidity position and
recurring revenue base as well as management's intention to reduce
leverage through debt repayment to below 6.5 times.
The rating could be downgraded or the outlook changed to negative
if the company's adjusted debt leverage is sustained at or above
6.5 times and/or if the company's liquidity profile deteriorates.
In addition, the ratings could be negatively impacted if the
company pursues debt funded acquisitions that do not result in an
improvement in pro forma credit metrics or engages in shareholder
friendly initiatives. Further, the rating could be downgraded
and/or outlook changed to negative if the company faces
substantial pricing pressures and/or if it begins to experience
declines in its customer base.
While not likely over the near term, the ratings could be upgraded
or the outlook changed to positive if the company meaningfully
reduces debt leverage resulting in a sustainable improvement of
key credit metrics including adjusted debt-to-EBITDA below 4.5
times and free cash flow-to-debt above 7 percent.
The principal methodology used in rating Emdeon was Moody's rating
methodology for Global Business and Consumer Service Industry,
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.
Emdeon Inc. provides healthcare transaction processing services to
health benefits payers, healthcare providers (hospitals,
physicians, physician practices), and pharmacies. The company
generated approximately $1.1 billion of revenues for the trailing
twelve months ended June 30, 2011.
ENER1 INC: Boris Zingarevich Discloses 48% Equity Stake
-------------------------------------------------------
In an amended Schedule 13D with the U.S. Securities and Exchange
Commission, Boris Zingarevich, Bzinfin S.A., et. al., disclosed
that they beneficially own 105,661,995 shares of common stock of
Ener1, Inc., representing 48% of the shares outstanding. A full-
text copy of the filing is available for free at:
http://is.gd/OGSYUB
About Ener1
Ener1 Inc. (OTCBB: ENEI) -- http://www.ener1.com/-- has three
business lines, which the company conducts through three operating
subsidiaries. EnerDel, an 80.5% owned subsidiary, which is 19.5%
owned by Delphi, develops Li-ion batteries, battery packs and
components such as Li-ion battery electrodes and lithium
electronic controllers for lithium battery packs. EnerFuel
develops fuel cell products and services. NanoEner develops
technologies, materials and equipment for nanomanufacturing.
The Company and Bzinfin S.A., on Sept. 12, 2011, entered into an
amendment to the Line of Credit Agreement dated June 29, 2011.
Under the LOC Agreement, Bzinfin established a line of credit for
the Company in the aggregate principal amount of $15,000,000, of
which approximately $11,241,000 has been borrowed by the Company.
Under the terms of the Amendment, the maturity date for the
repayment of all advances under the LOC Agreement and all unpaid
accrued interest thereon was extended to July 2, 2013, and the
interest rate at which all outstanding advances will bear interest
from and after Sept. 12, 2011, was increased to 15% per year.
ENTELOS INC: Simulations Plus to Bid for Assets
-----------------------------------------------
Olivia D'Orazio at Proactiveinvestors reports that Simulations
Plus has submitted a bid to purchase substantially all of the
assets of the Entelos, as part of that company's Chapter 11
bankruptcy proceedings.
According to the report, the bankrupt company's assets are
scheduled for auction supervised by the U.S. Bankruptcy Court on
Sept. 21. If successful, Simulations Plus said it expects a sale
hearing on Sept. 23 approving the transaction, which remains
subject to regulatory and court approvals.
Entelos Inc., a developer of software for computer simulation of
clinical trials for new drugs, filed for Chapter 11 protection
(Bankr. D. Del. Case No. 11-12329) on July 25, 2011, the same day
the landlord of the head office was going to court in California
seeking eviction. Timothy P. Reiley, Esq., at Reed Smith LLP, in
Wilmington, Delaware, serves as counsel to the Debtor. The Debtor
estimated assets of up to $10 million and debts of $10 million to
$50 million.
FAIRFIELD SENTRY: 200 Lawsuits May Move Out of Bankr. Court
-----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that liquidators for Fairfield Sentry Ltd. and affiliated
funds may not be able to sue foreign customers in the U.S.
Bankruptcy Court in New York as the result of a Sept. 19 ruling by
Chief U.S. District Judge Loretta A. Preska in New York. The
liquidators might have a tactical advantage were they able to keep
the more than 200 lawsuits in bankruptcy court.
The report recounts that Bankruptcy Judge Burton R. Lifland in May
ruled that liquidators for the Fairfield Sentry funds from the
British Virgin Islands have the right to bring lawsuits in
bankruptcy court under the umbrella of the funds' Chapter 15
cases. The liquidators filed lawsuits in state courts before they
sought bankruptcy court assistance in Chapter 15. All together,
the liquidators had more than 200 suits which they brought into
the bankruptcy court after they received Chapter 15 relief. Judge
Lifland in May ruled that customers, even those located abroad,
could be sued in bankruptcy court. Defendants in 41 lawsuits
filed an appeal, contending the suits should be sent back to state
courts. In the 41 lawsuits, the liquidators are suing the
investors to recover $3 million.
Mr. Rochelle notes that Judge Lifland didn't fare so well in Judge
Preska's opinion as he did in the other opinion reported Sept. 21
on Fairfield Sentry's eligibility for Chapter 15. Judge Preska
began by granting customers the right to appeal. Reaching the
merits of the case, she reversed Judge Lifland by holding that a
suit in Chapter 15 against a foreign customer isn't a so-called
core matter. She also ruled that attempting to exercise core
jurisdiction against foreign customers would offend the doctrine
handed down in June by the U.S. Supreme Court in Stern v.
Marshall. In that case, the high court ruled that a bankruptcy
court doesn't have the right under the U.S. Constitution to make
final rulings on state-law claims against creditors. Judge Preska
said that foreign-law claims, like those brought by the
liquidators, are the same as state claims. Judge Preska rested
much of her opinion on territorial restrictions in Chapter 15.
Where Chapter 11 cases can affect property anywhere in the world,
Chapter 15, Judge Preska said, deals only with property in the
U.S. As to claims against foreigners, she said there was no U.S.
property giving rise to core jurisdiction.
According to the report, just like a foreign liquidator may not
sue to void transfers under Chapter 15 without filing a petition
in Chapters 7 or 11, Judge Preska said they don't have the right
to use the bankruptcy court to make final rulings voiding
transfers under foreign law when the property sought is outside
the U.S. Judge Preska didn't decide whether the bankruptcy court
has so-called related-to jurisdiction because she sent the case
back to bankruptcy court so Judge Lifland could decide if it's
mandatory for him to abstain and send the cases to state courts.
Judge Preska read most the issues on mandatory abstention as
pointing toward sending the cases back to state court.
About Fairfield Sentry
Fairfield Sentry is being liquidated under the supervision of the
Commercial Division of the High Court of Justice in the British
Virgin Islands. It is one of the funds owned by the Fairfield
Greenwich Group, an investment firm founded in 1983 in New York
City. Fairfield Sentry and other Greenwich funds had among the
largest exposures to the Bernard L. Madoff fraud.
Fairfield Sentry Limited filed for Chapter 15 protection (Bankr.
S.D.N.Y. Case No. 10-13164) on June 14, 2010.
Greenwich Sentry, L.P., and an affiliate filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. 10-16229) on Nov. 19, 2010,
hoping to settle lawsuits filed against it in connection with its
investments with Bernard L. Madoff.
On May 18, 2009, Irving H. Picard, the trustee liquidating the
estate of Mr. Madoff and his firm, Bernard L. Madoff Investment
Securities, LLC, filed a lawsuit against Fairfield Sentry and
Greenwich, seeking the return of US$3.55 billion that Fairfield
withdrew from Madoff during the period from 2002 to Mr. Madoff's
arrest in December 2008. Since 1995, the Fairfield funds invested
about US$4.5 billion with BLMIS.
Mr. Picard claims that Fairfield knew or should have known about
the fraud give that it received from BLMIS unrealistically high
and consistent annual returns of between 10% and 21% in contrast
to the vastly larger fluctuations in the S&P 100 Index.
In a decision dated Sept. 15, 2011, U.S. District Judge George B.
Daniels of the U.S. District Court for the Southern District of
New York affirmed the July 22, 2010 decision of the Bankruptcy
Court recognizing Fairfield Sentry's liquidation proceeding in the
British Virgin Islands as a "foreign main proceeding" under
Chapter 15 of the U.S. Bankruptcy Code, which entitled the Joint
Liquidators to cooperation and assistance of U.S. courts in aid of
their recovery efforts on behalf of Sentry's stakeholders.
FAITH EMPOWERED: Court Converts Case to Chapter 7
-------------------------------------------------
Bankruptcy Judge Letitia Z. Paul converted Faith Empowered LLC's
Chapter 11 case to one under Chapter 7 of the Bankruptcy Code, at
the request of MetroBank, N.A.
MetroBank held a first lien on the property and on all of the
Debtor's equipment, accounts, inventory and general intangibles.
As of the petition date, the Debtor owed MetroBank $1,599,965. On
Dec. 1, 2009, MetroBank foreclosed its lien rights against the
real property at a non-judicial foreclosure sale for the high
credit bid of $1,200,000, leaving a deficiency claim. Subsequent
to the foreclosure sale, MetroBank paid delinquent ad valorem
taxes for $198,950. MetroBank amended its proof of claim on Nov.
11, 2011 and seeks a total of $511,416, of which $74,784 is
designated as secured by MetroBank's blanket lien on the Debtor's
assets. The Debtor's sole remaining asset is the sum of $74,784
received per the compromise with Tradition Bank. Currently, this
money is being held in the trust account of the Debtor's
bankruptcy counsel.
The Debtor's Amended Disclosure Statement was approved on
Sept. 24, 2010. The proposed Plan provided for distribution of
the $74,784 settlement funds. MetroBank objected to confirmation
and at the confirmation hearing on Nov. 9, 2010, the Debtor said
an amended plan was to be filed. No amended plan was filed and
the court issued a Show Cause for dismissal for failure to
prosecute the case. At the Show Cause hearing, the Debtor
announced that it was not opposed to dismissal of the case.
MetroBank said conversion is in the best interests of the
creditors and the estate so the court can administer the Debtor's
remaining asset, $74,784.
A copy of Judge Paul's Sept. 13, 2011 Memorandum Opinion is
available at http://is.gd/UflW2Ifrom Leagle.com.
About Faith Empowered
Faith Empowered, LLC, designated as a non-profit real estate
development limited liability company, filed a voluntary chapter
11 bankruptcy petition (Bankr. S.D. Tex. Case No. 09-30173) on
Jan. 5, 2009. Faith Empowered consists of three member entities,
Pleasant Grove Community Development Corporation, New Bethlehem
Community Development Corporation, and Product Marketing
International, Inc., each having a 33-1/3% ownership interest in
the Debtor. At the time of the bankruptcy filing, Faith Empowered
owned 17.5 acres of real property consisting of a 7.375 acre tract
of undeveloped real estate and a 10.275 acre detention pond.
Kelley Austin, Esq. -- kwilson@akl-law.com -- served as the
Debtor's counsel. In its petition, the Debtor estimated $1
million to $10 million in assets and $1 million to $10 million in
debts. The petition was signed by Charles L. Jackson, manager of
the company.
FIRST SECURITY: Completes 10-for-1 Reverse Stock Split
------------------------------------------------------
First Security Group, Inc., completed its previously announced
ten-for-one reverse stock split on Sept. 19, 2011. Pursuant to
the reverse stock split, each ten shares of First Security's
16,420,540 currently issued and outstanding shares of common stock
have been converted into one share of new common stock. Following
the reverse stock split, First Security will continue to have
150,000,000 shares of common stock authorized by its Articles of
Incorporation. As part of the reverse stock split, First Security
did not issue fractional shares; instead, the number of shares of
new common stock issued to each shareholder will be rounded up to
the nearest whole number if, as a result of the reverse stock
split, the number of shares owned by any shareholder would not be
a whole number.
The reverse stock split was approved by the holders of over 64% of
First Security's common stock at the 2011 Annual Meeting of
shareholders on Tuesday, Sept. 13, 2011. The split-adjusted
shares of First Security's common stock will begin trading on
NASDAQ on Sept. 19, 2011. First Security's shares will continue
to trade under the symbol "FSGI," with a "D" added for 20 trading
days to signify the reverse stock split has occurred. A new CUSIP
number has been assigned to First Security's common stock as a
result of the reverse stock split.
First Security will soon provide letters of transmittal to the
holders of certificated shares of First Security's common stock to
enable these shareholders to exchange their stock certificates.
Shareholders owning shares in street name will have their shares
of common stock adjusted for the reverse stock split
automatically, without any exchange of stock certificates
required.
As a result of the reverse stock split, First Security anticipates
that it will regain compliance with relevant NASDAQ Marketplace
rules that require, among other things, that shares of First
Security's common stock close at or above $1.00 for at least ten
consecutive days by Oct. 3, 2011, and thus remain listed on the
NASDAQ Global Select Market.
About First Security Group
First Security Group, Inc., is a bank holding company
headquartered in Chattanooga, Tennessee, with $1.2 billion in
assets as of Sept. 30, 2010. Founded in 1999, First
Security's community bank subsidiary, FSGBank, N.A., has 37 full-
service banking offices, including the headquarters, along the
interstate corridors of eastern and middle Tennessee and northern
Georgia and 325 full-time equivalent employees. In Dalton,
Georgia, FSGBank operates under the name of Dalton Whitfield Bank;
along the Interstate 40 corridor in Tennessee, FSGBank operates
under the name of Jackson Bank & Trust.
On Sept. 7, 2010, the Company entered into a Written Agreement
with the Federal Reserve Bank of Atlanta, the Company's primary
regulator, which prohibits the Company from declaring or paying
dividends without prior written consent of the Federal Reserve.
The Company is also prohibited from taking dividends, or any other
form of payment representing a reduction of capital, from the Bank
without prior written consent.
The Company is also required, within 60 days of the Agreement, to
submit to the Federal Reserve a written plan designed to maintain
sufficient capital at the Company and the Bank.
On April 28, 2010, FSGBank, the Company's wholly-owned subsidiary,
consented and agreed to the issuance of a Consent Order by the
Office of the Comptroller of the Currency (OCC). Pursuant to that
Consent Order, within 120 days of the effective date of the Order,
the Bank is required to achieve and thereafter maintain total
capital at least equal to 13% of risk-weighted assets and
Tier 1 capital at least equal to 9% of adjusted total
assets.
As of Sept. 30, 2010, the first financial reporting period
subsequent to the 120 day requirement, the Bank's total capital to
risk-weighted assets was 12.93% and the Tier 1 capital to
adjusted total assets was 7.43%. The Bank has notified the
OCC of the non-compliance.
The Company reported a net loss of $44.34 million on
$54.91 million of total interest income for the year ended
Dec. 31, 2010, compared with a net loss of $33.45 million on
$64.00 million of total interest income during the prior year.
The Company's balance sheet at June 30, 2011, showed $1.10 billion
in total assets, $1.02 billion in total liabilities, and
$84.78 million in total stockholders' equity.
Joseph Decosimo and Company, PLLC, in Chattanooga, Tennessee,
expressed substantial doubt about the Company's ability to
continue as a going concern. The independent auditors noted that
the Company has incurred losses from operations for the past two
years. The Company is also operating under formal supervisory
agreements with the Federal Reserve Bank of Atlanta and the Office
of the Comptroller of the Currency and is not in compliance with
all provisions of the Agreements. Failure to achieve all of the
Agreements' requirements may lead to additional regulatory
actions.
According to the Company, its ability to continue as a going
concern is contingent upon its ability to devise and successfully
execute a management plan to develop profitable operations,
satisfy the requirements of the regulatory actions detailed below,
and lower the level of problem assets to an acceptable level.
FIRST SECURITY: Seven Directors Elected at Annual Meeting
---------------------------------------------------------
The annual meeting of shareholders of the First Security Group,
Inc., was held on Sept. 13, 2011. Seven nominees were elected as
Directors of the Company to serve until the 2012 Annual Meeting of
Shareholders and until their successors have been elected and
qualified, namely: (1) Ralph E. Coffman, Jr., (2) John J. Clarke,
Jr., (3) William C. Hall, (4) Carol H. Jackson, (5) Robert P.
Keller, (6) Ralph L. Kendall, and (7) Kelly P. Kirkland. Although
Mr. Clarke was elected to serve on the Company's Board by the
shareholders at First Security's Annual Meeting, he will not take
office until receiving applicable regulatory non-objection to his
appointment. First Security will make a public announcement at
the time Mr. Clarke formally joins First Security's Board of
Directors.
A non-binding resolution approving the compensation of First
Security's executives, as disclosed under the federal securities
laws, was approved. An amendment to First Security's Articles of
Incorporation to effect a ten-for-one reverse stock split of First
Security's common stock was approved. The appointment of Crowe
Horwath LLP, as First Security's independent public accounting
firm for the fiscal year ending Dec. 31, 2011, was ratified.
About First Security Group
First Security Group, Inc., is a bank holding company
headquartered in Chattanooga, Tennessee, with $1.2 billion in
assets as of Sept. 30, 2010. Founded in 1999, First
Security's community bank subsidiary, FSGBank, N.A., has 37 full-
service banking offices, including the headquarters, along the
interstate corridors of eastern and middle Tennessee and northern
Georgia and 325 full-time equivalent employees. In Dalton,
Georgia, FSGBank operates under the name of Dalton Whitfield Bank;
along the Interstate 40 corridor in Tennessee, FSGBank operates
under the name of Jackson Bank & Trust.
On Sept. 7, 2010, the Company entered into a Written Agreement
with the Federal Reserve Bank of Atlanta, the Company's primary
regulator, which prohibits the Company from declaring or paying
dividends without prior written consent of the Federal Reserve.
The Company is also prohibited from taking dividends, or any other
form of payment representing a reduction of capital, from the Bank
without prior written consent.
The Company is also required, within 60 days of the Agreement, to
submit to the Federal Reserve a written plan designed to maintain
sufficient capital at the Company and the Bank.
On April 28, 2010, FSGBank, the Company's wholly-owned subsidiary,
consented and agreed to the issuance of a Consent Order by the
Office of the Comptroller of the Currency (OCC). Pursuant to that
Consent Order, within 120 days of the effective date of the Order,
the Bank is required to achieve and thereafter maintain total
capital at least equal to 13% of risk-weighted assets and
Tier 1 capital at least equal to 9% of adjusted total
assets.
As of Sept. 30, 2010, the first financial reporting period
subsequent to the 120 day requirement, the Bank's total capital to
risk-weighted assets was 12.93% and the Tier 1 capital to
adjusted total assets was 7.43%. The Bank has notified the
OCC of the non-compliance.
The Company reported a net loss of $44.34 million on
$54.91 million of total interest income for the year ended
Dec. 31, 2010, compared with a net loss of $33.45 million on
$64.00 million of total interest income during the prior year.
The Company's balance sheet at June 30, 2011, showed $1.10 billion
in total assets, $1.02 billion in total liabilities, and
$84.78 million in total stockholders' equity.
Joseph Decosimo and Company, PLLC, in Chattanooga, Tennessee,
expressed substantial doubt about the Company's ability to
continue as a going concern. The independent auditors noted that
the Company has incurred losses from operations for the past two
years. The Company is also operating under formal supervisory
agreements with the Federal Reserve Bank of Atlanta and the Office
of the Comptroller of the Currency and is not in compliance with
all provisions of the Agreements. Failure to achieve all of the
Agreements' requirements may lead to additional regulatory
actions.
According to the Company, its ability to continue as a going
concern is contingent upon its ability to devise and successfully
execute a management plan to develop profitable operations,
satisfy the requirements of the regulatory actions detailed below,
and lower the level of problem assets to an acceptable level.
FTI CONSULTING: Moody's Affirms 'Ba2' Corporate Family Rating
-------------------------------------------------------------
Moody's Investors Service lowered FTI Consulting's Speculative
Grade Liquidity (SGL) Rating to SGL-2 from SGL-1 because of the
upcoming maturity of $149.9 million in senior subordinated
convertible notes. All other ratings were affirmed, including the
Ba2 Corporate Family Rating (CFR). The ratings outlook remains
stable.
Moody's lowered the below rating:
Speculative Grade Liquidity Rating, to SGL-2 from SGL-1
Moody's affirmed the following ratings:
$400 million senior unsecured notes due 2020, Ba2 (LGD 3, 49%)
$215 million senior unsecured notes due 2016, Ba2 (LGD 3, 49%)
$150 million senior subordinated convertible notes due 2012, B1
(LGD 6, 92% )
Corporate Family Rating, Ba2
Probability of Default Rating, Ba2
RATINGS RATIONALE
The Ba2 Corporate Family Rating is supported by FTI's brand name
and leading market positions within the business consulting
sector, a broad array of service offerings with differing demand
drivers, a good liquidity profile, and solid financial strength
metrics for the rating category. The ratings are constrained by
Moody's concern about the sustainability of consolidated earnings
should the cyclical decline in FTI's high-margin bankruptcy and
restructuring revenues continue. Although pro-cyclical services
such as economic consulting have seen rising demand, consolidated
EBITDA has steadily declined since 2009 due to a mix shift to
lower margin revenues. The ratings are also constrained by
significant share repurchases, a history of growth through
acquisitions, dependence on top employees, and reputation risks.
The downgrade in the liquidity rating to SGL-2 from SGL-1 reflects
the July 2012 maturity of the $149.9 million senior subordinated
convertible notes and the likelihood that FTI may need to deplete
its cash balance and tap the revolver to repay the notes, if not
refinanced. Nonetheless, Moody's expects FTI to maintain a good
liquidity profile over the next four quarters. At June 30, 2011,
the company reported cash on hand of $99 million, a portion of
which is held outside the US, and near complete availability under
the $250 million revolving credit facility. Despite softer
earnings, Moody's expects at least $100 million in free cash flow
over the next year and ample cushion under financial covenants.
The stable ratings outlook anticipates 5-7% consolidated revenue
growth (partly due to acquisitions) over the next 12-18 months
with modest margin compression. Moody's expects any further
declines in US corporate finance/restructuring revenues to be
offset by growth in the more pro-cyclical segments of FTI's
business. The ratings could be downgraded if FTI experiences a
material decline in consolidated revenue and liquidity, or
financial policies become more aggressive such that financial
leverage (gross debt/EBITDA) is maintained above 4 times and
interest coverage (EBITDA-capex/interest) falls below 2.5 times.
The ratings could be upgraded if FTI reports consolidated revenue
and earnings stability through a downturn in the restructuring
cycle while maintaining financial leverage below 2.5 times.
The principal methodology used in rating FTI Consulting, Inc. was
the Global Business & Consumer Service Industry 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.
FTI Consulting, Inc. is a global business advisory firm providing
services through five business segments: corporate
finance/restructuring; forensic and litigation consulting;
strategic communications; technology; and economic consulting.
Headquartered in West Palm Beach, Florida, the company is publicly
held (ticker: FCN) and reported revenue of nearly $1.5 billion in
the twelve month period ended June 30, 2011.
FUSION TELECOMMUNICATIONS: Borrows $28,000 from Director
--------------------------------------------------------
Fusion Telecommunications International, Inc., borrowed $28,000
from Marvin S Rosen, a director of the Company. This note (a) is
payable on demand in full upon ten days notice of demand from the
lender, (b) bears interest on the unpaid principal amount at the
rate of 3.25% per annum, and (c) grants the lender a
collateralized security interest, pari passu with other lenders,
in the Company's accounts receivable. The proceeds of this note
are to be used primarily for general corporate purposes.
About Fusion Telecommunications
New York City-based Fusion Telecommunications International, Inc.
(OTC BB: FSNN) is a provider of Internet Protocol ("IP") based
digital voice and data communications services to corporations and
carriers worldwide.
The Company's balance sheet at June 30, 2011, showed $4.81 million
in total assets, $14.33 million in total liabilities and a $9.52
million total stockholders' deficit.
As reported by the TCR on April 26, 2011, Rothstein, Kass &
Company, P.C., in Roseland, New Jersey, expressed substantial
doubt about Fusion Telecommunications' ability to continue as a
going concern. The independent auditors noted that the Company
the Company has negative working capital balances, incurred
negative cash flows from operations and net losses since
inception, and has limited capital to fund future operations.
Fusion Telecommunications reported a net loss of $5.8 million on
$41.8 million of revenues for 2010, compared with a net loss of
$9.6 million on $40.9 million of revenues for 2009.
GALP GRAYRIDE: Court Approves Matthew Hoffman as Bankr. Counsel
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas
authorized Galp Grayride Limited Partnership to employ the Law
Offices of Matthew Hoffman, P.C., as bankruptcy counsel.
Matthew Hoffman has agreed to, among other things:
a. conduct examinations of witnesses, claimants and other
parties in interest;
b. prepare pleadings and other legal instruments required to
be filed in the Debtor's bankruptcy case;
c. represent and advise the Debtor in the liquidation of its
assets through the Court; and
d. advise the Debtor in the formulation, solicitation,
confirmation, and consummation of any plan(s) of
reorganization which the Debtor may propose.
Matthew Hoffman will be paid based on these rates:
Matthew Hoffman $240
James Lee, Associate $115
Matthew Hoffman, the principal at the Law Offices of Matthew
Hoffman, assures the Court that the firm is a "disinterested
person" as that term defined in Section 101(14) of the Bankruptcy
Code.
Houston, Texas-based GALP Grayridge Limited Partnership filed for
Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Case No. 10-
40007) on Nov. 1, 2010. The Debtor estimated its assets and debts
at $10 million to $50 million.
GATE GOURMET: S&P Keeps 'BB' Senior-Lien & First-Lien Loan Ratings
------------------------------------------------------------------
Standard & Poor's Ratings Services revised the recovery ratings to
'3' from '4' on the senior-lien delayed-draw bank loan and the
first-lien bank loan issued by Gate Gourmet Borrower LLC (together
with Gate Gourmet Holdings S.C.A., Gate Gourmet; BB/Stable/--).
The issue ratings on the loans are unchanged at 'BB'.
"After reviewing Gate Gourmet's ability for further drawing under
the senior-lien delayed-draw bank loan and the first-lien bank
loan, we conclude that no further drawings are permitted. As a
result, there is an improvement in the debt coverage leading to a
recovery rating of '3' for these instruments, which translates
into meaningful recovery of 50%-70% for creditors," S&P stated.
"For further details of our corporate credit rationale on Gate
Gourmet, including its liquidity position, please refer to the
research update titled 'Airline Caterer Gate Gourmet Long-Term
Rating Raised to 'BB' On Ongoing Strong Operating Performance;
Outlook Stable,' published Sept. 12, 2011, and the full
recovery report 'Gate Gourmet Group Recovery Rating Profile,'
published Sept. 16, 2011, on Ratings Direct on the Global Credit
Portal," S&P added.
GBO INC: To File Proposal Under Canada's BIA
--------------------------------------------
GBO Inc. has filed a notice of intention to make a proposal
pursuant to the Bankruptcy and Insolvency Act (Canada). The
Company will present, as soon as possible, a proposal setting out
the terms of the restructuring of its debts and other obligations
to its creditors.
The Company hopes to be in a position to quickly resume operations
to satisfy its customers' orders. Suppliers of the Company for
goods and services provided after the filing of the notice of
intention will be paid in the normal course of business.
Founded in 1946, GBO Inc. is an important Canadian window and door
manufacturer. The Company designs, develops, manufactures,
markets and distributes a selection of mid-range and high-end
energy-efficient wood window arrangements, doors and accessories,
sold primarily under the "Bonneville" and "Polar" brands.
GENERAL MOTORS: Moody's Says UAW Deal a "Positive Development"
--------------------------------------------------------------
Moody's Investors Service said that it views positively the
announcement that General Motors Company (GM) and the United Auto
Workers Union (UAW) have reached a tentative agreement. The
announcement of the tentative agreement does not have any
immediate impact on ratings as the terms of the proposed new
contract have not been made public and the agreement must be
presented to GM's approximately 50,000 UAW workers for a
ratification vote.
Moody's said that completion of a UAW contract that preserves the
cost and operating competitiveness of GM's North American
operations is critical to potential improvement in the company's
ratings -- currently Corporate Family Rating at Ba2 and secured
credit facility at Baa3. As specific details of the contract are
disclosed by GM and the UAW, Moody's will assess the degree to
which the agreement preserves GM's operating flexibility,
competitive cost structure, and low breakeven level.
The central issue in any upward movement in GM's rating will be
the company's ability to sustain its improved performance in the
face of near-term economic uncertainty in the global economy and
the ongoing cyclicality within the automotive sector. Doing so
will require the ratification of a UAW contract that does not
compromise the company's competitive position in North America,
and a commitment by GM to maintain prudent operating and financial
disciplines.
Tha last rating action for GM was the assignment of the company's
Ba2 Corporate Family Rating on October 11, 2010. The principal
methodologies used in rating General Motors Company were Global
Automobile Manufacture Industry published in June 2011, and Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009. Other methodologies
and factors that may have been considered in the process of rating
this issuer can also be found on Moody's website.
GERIATRIC REALTY: Case Summary & 4 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Geriatric Realty Corp.
2302 Wherle Drive
Williamsville, NY 14221
Bankruptcy Case No.: 11-13225
Chapter 11 Petition Date: September 19, 2011
Court: U.S. Bankruptcy Court
Western District of New York (Buffalo)
Judge: Michael J. Kaplan
Debtor's Counsel: Arthur G. Baumeister, Jr., Esq.
AMIGONE, SANCHEZ, ET AL
1300 Main Place Tower
350 Main Street
Buffalo, NY 14202
Tel: (716) 852-1300
E-mail: abaumeister@amigonesanchez.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's four largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/nywb11-13225.pdf
The petition was signed by Marc I. Korn, president.
Affiliates that filed separate Chapter 11 petitions:
Entity Case No. Petition Date
------ -------- -------------
Batavia Nursing Home, LLC 11-13223 09/19/11
Fairchild Manor Nursing Home, LLC 11-13013 08/30/11
GOLDMAN POINT: Case Summary & 5 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Goldman Point, Corp.
121-06 22nd Avenue
College Point, NY 11356
Bankruptcy Case No.: 11-47962
Chapter 11 Petition Date: September 19, 2011
Court: U.S. Bankruptcy Court
Eastern District of New York (Brooklyn)
Judge: Joel B. Rosenthal
Debtor's Counsel: Jae Choi, Esq.
LAW OFFICE OF JAE CHOI
194-02 Northern Boulevard, Suite 212
Flushing, NY 11358
Tel: (718) 281-1700
Fax: (718) 281-0021
E-mail: jaechoi@jaechoilaw.com
Scheduled Assets: $2,223,844
Scheduled Debts: $1,846,963
A list of the Company's five largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/nyeb11-47962.pdf
The petition was signed by Hyo Sun Kim, president.
GORDON PROPERTIES: Owners Must Hold 2011 Meeting or Face Sanction
-----------------------------------------------------------------
The board of directors of First Owners' Association of Forty Six
Hundred Condominium, Inc., refused to hold the 2010 annual
meeting, a meeting that was required by its bylaws. It did so
with knowledge of the pendency of the bankruptcy case of Gordon
Properties LLC, which holds an interest in the condo, and the
automatic stay, with the guidance given by the Bankruptcy Court in
its written Memorandum Opinion that the automatic stay prohibited
the enforcement of the bylaws voting provision, and with the
advice of counsel that enforcing the bylaws voting provision could
result in action adverse to the association in the bankruptcy
court.
Bankruptcy Judge Robert G. Mayer said the decision of the board to
postpone the 2010 annual meeting was an indirect means to enforce
the bylaws voting provision and bring pressure on the debtor to
pay the pre-petition delinquency. The failure to hold the 2010
annual meeting violated the automatic stay imposed by Sec. 362 of
the Bankruptcy Code.
Judge Mayer also said the association will be held in contempt of
the court for its violation of the automatic stay. The court will
sanction the association $100,000 but will give it the opportunity
to purge its contempt by holding on Oct. 5, 2011, a full, fair and
transparent 2011 annual meeting at which the debtor will be
permitted to vote, its votes will be counted and it may hold
office as a director of the association, if elected.
The case is GORDON PROPERTIES, LLC, v. FIRST OWNERS ASSOCIATION OF
FORTY SIX HUNDRED, Adv. Proc. No. 11-1020 (Bankr. E.D. Va.). A
copy of Judge Mayer's Sept. 20, 2011 Memorandum Opinion is
available at http://is.gd/IFpUtafrom Leagle.com.
About Gordon Properties
Alexandria, Va.-based Gordon Properties LLC owns 40 condominium
units in a high-rise apartment building with both residential and
commercial units and two commercial units adjacent to the high-
rise building. Gordon Properties' ownership of these condos
represents about a 20% interest in the Forty Six Hundred
Condominium project -- http://foa4600.org/-- in Alexandria.
Gordon Properties also owns one of the adjacent commercial units,
a restaurant. Gordon Properties sought Chapter 11 protection
(Bankr. E.D. Va. Case No. 09-18086) on Oct. 2, 2009, and is
represented by Donald F. King, Esq. -- donking@ofplaw.com -- at
Odin, Feldman & Pittleman PC in Fairfax, Va. The Debtor disclosed
$11,149,458 in assets and $1,546,344 in liabilities in its
Schedules of Assets and Liabilities.
GUARANTY FINANCIAL: Liquidating Trustee Begins Filing Lawsuits
--------------------------------------------------------------
Bloomberg News reported that the trustee liquidating Guaranty
Financial Group Inc., the failed bank holding company, began
filing lawsuits against Temple-Inland Inc. and KBW Inc.
Kenneth Tepper, the trustee, sued Temple-Inland, the cardboard
maker fighting a $3.31 billion takeover bid from International
Paper Co., to recover $1 billion, according to the complaint filed
Aug. 22 in federal court in Dallas.
He claims that Temple-Inland, which spun off Guaranty Financial in
2007, and the former unit's directors and officials caused its
failure "by fraudulently looting" assets exceeding $1 billion.
"We do not believe that we have any liability related to the
spinoff of Guaranty Financial Group," Austin, Texas-based Temple-
Inland said in an Aug. 23 regulatory filing. "The company
believes that the claims made in this lawsuit are without merit
and intends to defend them vigorously."
The lawsuit claims Guaranty Bank was operated as "a captive
finance arm of Temple-Inland's manufacturing operation" and made
risky loans to Temple-Inland customers to sell building products.
The trustee also alleges that Temple-Inland spun off Guaranty
Financial Group after stripping its assets, to avoid "a disastrous
cross-default on Temple-Inland's own debt obligations." This left
Guaranty Financial Group, the Federal Deposit Insurance Corp. and
U.S. taxpayers to "suffer the enormous losses defendants created,"
according to the complaint.
The cases are Tepper v. Temple-Inland Inc., 3:11-cv-02088, U.S.
District Court, Northern District of Texas (Dallas); and Tepper v.
Keefe, Bruyette & Woods Inc., 652349-2011, New York State Supreme
Court, New York County (Manhattan).
About Guaranty Financial
Guaranty Financial, based in Austin, Texas, and its affiliates
filed for chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case
No. 09-35582) on Aug. 27, 2009, after its bank subsidiary was
taken over by regulators. Attorneys at Haynes & Boone, LLP,
served as the Debtors' bankruptcy counsel. According to the
schedules attached to its petition, Guaranty Financial disclosed
$24.3 million in total assets and $323.4 million in total debts,
including $305.0 million in trust preferred securities.
The bulk of Guaranty's remains were acquired by BBVA Compass, the
U.S. division of Banco Bilbao Vizcaya Argentaria SA of Spain.
Guaranty Financial received approval of its Second Amended Joint
Plan of Liquidation on May 11, 2011. The Plan was declared
effective later that month. The Plan is based on a settlement
with the FDIC and the indenture trustee for the noteholders. The
Plan calls for the FDIC to receive some of the remaining cash and
all of the tax refunds, which are estimated at $3.49 million.
Unsecured creditors with $382 million in claims stand to recover
between 1% and 3%, from proceeds generated from lawsuits.
HORIZON LINES: Clarifies Exchange Offer Documents
-------------------------------------------------
Horizon Lines, Inc., announced that it filed on Sept. 19, 2011, an
amendment to its Registration Statement on Form S-4 and an
amendment to Schedule TO relating to its previously announced
exchange offer and consent solicitation for its $330.0 million of
existing unsecured 4.25% convertible senior notes. The exchange
offer documents were revised to (i) further clarify what exchange
consideration holders of the 2012 convertible notes who are non-
U.S. citizens will receive, (ii) revise the summary of the
material terms of the new convertible secured notes to be issued
in the exchange offer and (iii) make other updating and conforming
changes. The company also provided an updated form of U.S.
citizenship questionnaire as an exhibit to the Registration
Statement on Form S-4. The SEC is continuing to review the
Company's Registration Statement on Form S-4 relating to the
exchange offer and consent solicitation and has not yet declared
the Registration Statement effective, which is a condition of the
exchange offer, among others.
As part of the exchange offer, the company is also seeking
consents from all holders of the 2012 convertible notes to remove
substantially all of the restrictive covenants and certain events
of default from the indenture governing the 2012 convertible
notes.
The Company will exchange the 2012 convertible notes for shares of
the Company's common stock and new 6.0% series A convertible
senior secured notes and 6.0% series B mandatorily convertible
senior secured notes. The company and its advisors continue to
work with the financial and legal advisors to the informal
committee of noteholders to finalize the documentation and terms
of the recapitalization plan, of which the exchange offer and
consent solicitation are a part. The company expects to complete
the exchange offer of the existing 2012 convertible notes by the
end of September, at which time it expects to close the entire
refinancing.
About Horizon Lines
Charlotte, N.C.-based Horizon Lines, Inc. (NYSE: HRZ) is the
nation's leading domestic ocean shipping and integrated logistics
company. The Company owns or leases a fleet of 20 U.S.-flag
containerships and operates five port terminals linking the
continental United States with Alaska, Hawaii, Guam, Micronesia
and Puerto Rico. The Company provides express trans-Pacific
service between the U.S. West Coast and the ports of Ningbo and
Shanghai in China, manages a domestic and overseas service partner
network and provides integrated, reliable and cost competitive
logistics solutions.
The Company's balance sheet at June 26, 2011, showed
$794.96 million in total assets, $793.45 million in total
liabilities, and a stockholders' deficit of $1.51 million.
The Company expects to experience a covenant breach under the
Senior Credit Facility in connection with the amended financial
covenants upon the close of the third fiscal quarter of 2011.
As reported in the TCR on March 30, 2011, Ernst & Young LLP, in
Charlotte, North Carolina, expressed substantial doubt Horizon
Lines' ability to continue as a going concern, following the
Company's results for the fiscal year ended Dec. 26, 2010. The
independent auditors noted that there is uncertainty that Horizon
Lines 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 by the TCR on Aug. 26, 2011, Standard & Poor's Ratings
Services lowered its long-term corporate credit rating on Horizon
Lines Inc. to 'SD' from 'CCC'.
The rating action on Horizon Lines follow the company's decision
to defer the interest payment on its $330 million senior
convertible notes due August 2012, exercising the 30-day grace
period. "Under our criteria, we view failure to make an interest
payment within five business days after the due date for
payment a default, regardless of the length of the grace period
contained in an indenture," said Standard & Poor's credit analyst
Funmi Afonja.
HORIZON VILLAGE: Has Deal on Use of Wells Fargo's Cash Collateral
-----------------------------------------------------------------
Horizon Village Square LLC, asks the U.S. Bankruptcy Court for the
District of Nevada to approve a stipulation entered with Wells
Fargo Bank, N.A., as successor by merger to Wachovia Bank, N.A,
authorizing it to access the cash collateral and disputed cash
collateral.
As of the Petition Date, the Debtor's obligation outstanding under
the note was $11.06 million on account of principal and contract
interest.
The Debtor will use the disputed cash collateral and cash
collateral to finance its operations.
The lender consented to Debtor's use of cash collateral and
disputed cash collateral on the terms and conditions set forth in
the stipulation which provides for, among other things:
-- the stipulation will be effective upon entry of an order of
the Bankruptcy Court approving the stipulation;
-- the Debtor's use of the fund will terminate at a date that
is the first to occur of: (i) five calendar days following
notice to Debtor that an Event of Default has occurred and is
otherwise continuing or otherwise unresolved for which notice
is required to be given; (ii) an event of default has occurred
for which no notice is required to be given; or (iii) the
effective date of a confirmed plan of reorganization;
-- the Debtor will timely file all monthly operating reports
and provide copies to the lender and its counsel at the time
the reports are filed;
-- as adequate protection of the lender's interests, the Debtor
will pay the sum of $18,500 per month to the lender;
-- the Debtor will grant the lender replacement lien in all of
Debtor's now-owned or after-acquired real and personal
property; and
-- all types all cash collateral and disputed cash collateral
will be subject to a carve out for the payment of all allowed
and unpaid professional fees and disbursements of the Debtor
incurred from the Petition Date until the termination date.
Wells Fargo Bank, N.A. is represented by:
Edward M. Zachary, Esq.
BRYAN CAVE LLP
Two North Central Avenue, Suite 2200
Phenix, AZ 85004-4406
Tel: (602) 364-7000
Fax: (602) 364-7070
E-mail: edwadzachary@bryancave.com
- and -
Robert M. Charles, Jr.
LEWIS AND ROCA LLP
3993 Howard Hughes Parkway, Suite 600
Las Vegas, NV 89169
Tel: (702) 216-6191
Fax: (702) 949-8321
E-mail: rcharles@lrlaw.com
About Horizon Village Square
Four related Las Vegas, Nevada-based entities sought Chapter 11
bankruptcy protection on July 13, 2011. The businesses are owned
or managed by local business people and firms, including Todd
Nigro, Nigro Development LLC, a Nigro family trust and other
investors.
Horizon Village Square LLC (Bankr. D. Nev. Case No. 11-21034) owns
the Vons-anchored Horizon Village Square Shopping Center near I-
515 and Horizon Drive in Henderson. The property includes five
retail buildings with nearly 43,000 square feet of space.
Ten Saints LLC (Bankr. D. Nev. Case No. 11-21028) owns the 134-
room Hampton Inn & Suites at St. Rose Parkway and Seven Hills
Drive in Henderson.
Beltway One Development Group LLC (Bankr. D. Nev. Case No. 11-
21026) owns the Desert Canyon Business Park at Russell Road and
the Las Vegas Beltway. It has two buildings and 15 acres.
Nigro HQ LLC (Bankr. D. Nev. Case No. 11-21014) owns an office
building at 9115 W. Russell Road occupied by Bank of George,
Infinity Plus LLC and Nigro Construction Inc.
Todd Nigro said the four bankruptcies were caused by threatened
foreclosures -- typically related to Wells Fargo Bank demanding
payments to keep loan-to-value ratios at specified levels.
Judge Mike K. Nakagawa presides over the cases. Lawyers at Gordon
Silver serve as the Debtors' bankruptcy counsel. The bankruptcy
petitions estimated assets and debts from $1 million to $10
million each for Nigro HQ; and from $10 million to $50 million in
both assets and debts for Horizon Village, Ten Saints and Beltway
One.
A fifth-related business, Russell Boulder LLC, filed for
bankruptcy (Bankr. D. Nev. Case No. 10-29724) on Oct. 19, 2010.
It owns the 600-suite Siena Suites extended stay property at
Boulder Highway and Russell Road.
IDEARC INC: Verizon Must Face Fraud Claims Over Spinoff
-------------------------------------------------------
A Texas federal judge on Monday refused to dismiss claims that
Verizon Communications Inc. defrauded creditors of spinoff company
Idearc Inc. by saddling the Company with billions of dollars of
debt and driving it into bankruptcy.
Idearc Inc. was a subsidiary of Verizon Communications Inc. until
it was spun off in 2006, about 28 months before Idearc filed for
Chapter 11 reorganization. Idearc's Chapter 11 plan, implemented
in January 2010, created a trust for creditors that sued Verizon
in U.S. District Court in Dallas, alleging that the spinoff was a
fraudulent transfer designed to generate $9.5 billion for the
second-largest phone company in the U.S. Verizon filed a motion
to dismiss, alleging that the suit didn't make sufficient
allegations to stand on its own.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that this week, U.S. District Judge A. Joe Fish allowed
almost all of the complaint to stand. Judge Fish said that the
trust's "factual allegations are sufficient to plead a claim for
actual fraudulent transfer." Judge Fish also said it was proper
for the trust to base claims on an alleged breach of fiduciary
duty. Although directors of a parent owe no duties to creditors
of a subsidiary such as Idearc, there are duties that can be
violated when the subsidiary becomes insolvent, he said.
Judge Fish, the report points out, noted that the complaint
alleged that the spinoff left Idearc insolvent and without
sufficient assets. Judge Fish did throw one bone to the
defendants. He said there is no claim to punitive damages for
breach of fiduciary duty.
The creditors' lawsuit is U.S. Bank National Association v.
Verizon Communications Inc., 10-01842, U.S. District Court,
Northern District Texas (Dallas).
About Idearc Inc.
Headquartered in DFW Airport, Texas, Idearc, Inc. (NYSE: IAR) --
http://www.idearc.com/-- formerly known as Directories
Disposition Corporation, provides yellow and white page
directories and related advertising products in the United States
and the District of Columbia. Products include print yellow
pages, print white pages, Superpages.com, Switchboard.com and
LocalSearch.com, the company's online local search resources, and
Superpages Mobile, their information directory for wireless
subscribers. Idearc is the exclusive official publisher of
Verizon print directories in the markets in which Verizon is
currently the incumbent local exchange carrier. Idearc uses the
Verizon brand on their print directories in their incumbent
markets, well as in their expansion markets.
Idearc and its affiliates filed for Chapter 11 protection on
March 31, 2009 (Bankr. N.D. Tex. Lead Case No. 09-31828). Toby L.
Gerber, Esq., at Fulbright & Jaworski, LLP, represented the
Debtors in their restructuring efforts. The Debtors tapped Moelis
& Company as their investment banker; Kurtzman Carson Consultants
LLC as their claims agent. William T. Neary, the United States
Trustee for Region 6, appointed six creditors to serve on an
official committee of unsecured creditors of Idearc, Inc., and its
debtor-affiliates. The Committee selected Mark Milbank, Tweed,
Hadley & McCloy LLP, as counsel, and Haynes and Boone, LLP,
co-counsel. The Debtors' financial condition as of Dec. 31, 2008,
showed total assets of $1,815,000,000 and total debts of
$9,515,000,000.
Idearc completed its debt restructuring and its plan of
reorganization became effective as of December 31, 2009. In
connection with its emergence from bankruptcy, Idearc changed its
name to SuperMedia Inc. Under its reorganization, Idearc reduced
its total debt from more than $9 billion to $2.75 billion of
secured bank debt.
INNER CITY: Has Interim Nod to Use Sr. Lenders' Cash Collateral
---------------------------------------------------------------
The Hon. Shelley C. Chapman of the U.S. Bankruptcy Court for the
Southern District of New York authorized Inner City Media
Corporation and its debtor-affiliates to use cash collateral from
senior lenders comprised of Yucaipa Corporate Initiatives Fund II
L.P., Yucaipa Corporate Initiatives (Parallel) Fund II L.P., CF
ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special
Opportunities Fund Ltd.
The Debtors owe $228 million plus accrued and unpaid interest and
fees to the senior lenders.
According to the Debtors, there is an immediate and critical need
exists for them to use "cash collateral" and including any and all
prepetition and postpetition proceeds of the collateral. The
Debtors' immediate use of the cash collateral is necessary in
order to ensure that the Debtors have sufficient working capital
and liquidity to preserve and maintain the value of their assets
and to conduct the orderly administration of the cases for the
benefit of their estates and all parties in interest.
As adequate protection for the Debtors' use of the cash
collateral, the senior lenders are entitled to adequate protection
of their interests in the collateral in an amount equal to the
aggregate diminution in the value of their interests in the
collateral, including, without limitation, any such diminution
resulting from the Debtors' use of the cash collateral.
A hearing is set for Oct. 4, 2011, at 11:00 a.m., to consider
final approval of the Debtors' request to use cash collateral.
Objections, if any, are due Sept. 28, 2011.
About Inner City
As reported by the Troubled Company Reporter on Aug. 23, 2011,
affiliates of Yucaipa and CF ICBC LLC, Fortress Credit Funding I
L.P., and Drawbridge Special Opportunities Fund Ltd., signed
involuntary Chapter 11 petitions for Inner City and its affiliates
(Bankr. S.D.N.Y. Case Nos. 11-13967 to 11-13979) to collect on a
$254 million debt.
The Petitioning Creditors are party to the senior secured credit
facility pursuant to which they (or their predecessors in
interest) extended $197 million in loans to the Alleged Debtors to
be used for general corporate purposes. More than two years ago,
the Alleged Debtors defaulted under the Senior Secured Credit
Facility, and in any event the entire amount of principal and
accrued and unpaid interest and fees became immediately due and
payable on February 13, 2010. As a result, the Senior Lenders are
owed approximately $250 million in principal and accrued and
unpaid interest and fees as of the Involuntary Chapter 11 Petition
Date.
Inner City Media Corporation's affiliates subject to the
involuntary Chapter 11 are ICBC Broadcast Holdings, Inc., Inner-
City Broadcasting Corporation of Berkeley, ICBC Broadcast
Holdings-CA, Inc., ICBC-NY, L.L.C., ICBC Broadcast Holdings-NY,
Inc., Urban Radio, L.L.C., Urban Radio I, L.L.C., Urban Radio II,
L.L.C., Urban Radio III, L.L.C., Urban Radio IV, L.L.C., Urban
Radio of Mississippi, L.L.C., and Urban Radio of South Carolina,
L.L.C.
Judge Shelley C. Chapman granted each of Inner City Media
Corporation and its debtor affiliates relief under Chapter 11 of
the United States Code. The decision came after considering the
involuntary petitions, and the Debtors' answer to involuntary
petitions and consent to entry of order for relief and reservation
of rights.
IRON MOUNTAIN: Moody's Gives B1 Rating to Proposed Bond Offering
----------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to a $300 million
senior subordinated bond offering by Iron Mountain Incorporated
(Iron Mountain). Proceeds from the offering will be used to
partially fund Iron Mountain's previously announced shareholder
payouts. All other ratings were affirmed, including the Ba3
Corporate Family Rating (CFR). The ratings outlook remains
negative.
RATINGS RATIONALE
The Ba3 CFR remains supported by Iron Mountain's large and
recurring revenue base, high operating margins, good liquidity
profile, considerable market share in North America, and the
diversification of revenues geographically and by customer.
Nonetheless, the business faces secular pressures stemming from
the gradual shift away from paper towards electronic media.
Moody's believes it may become increasingly difficult for Iron
Mountain to offset these pressures and normal churn in mature
markets with price increases and additional volumes from existing
and new customers.
The negative outlook reflects Moody's expectation that financial
leverage will rise to approximately 4.5 times (using Moody's
standard adjustments for operating leases) within 12-18 months
because of the shift in the company's financial policies towards
higher shareholder payouts, partially funded with debt. The
negative outlook further reflects the possibility that margin
enhancement initiatives in the international business could take
longer to achieve than planned, or not be fully realized, causing
financial leverage to be sustained at an even higher level longer
term.
The ratings could be lowered if Moody's were to anticipate
sustained organic revenue declines in mature markets, or changes
in financial policy, that would cause financial leverage to be
maintained above 4.7 times. Given management's three-year
strategic plan to enhance stockholder value, an upgrade is highly
unlikely. The outlook could be stabilized if Iron Mountain
achieves its near-term operational goals in the international
business while maintaining at least modestly positive consolidated
revenue growth, such that shareholder programs can be achieved
without raising financial leverage above 4.5 times on an adjusted
basis.
Moody's assigned these ratings to Iron Mountain Incorporated:
Proposed $300 million senior subordinated notes due 2019, B1
(LGD4, 65%)
Senior subordinated shelf expiring 2013, (P)B1
Moody's affirmed the below ratings (and updated the LGD
assessments) of Iron Mountain Incorporated:
Corporate Family Rating, Ba3
Probability of Default Rating, Ba3
Speculative Grade Liquidity Rating, SGL-2
GBP150 million 7.25% senior subordinated notes due 2014, B1 (LGD4,
to 65% from 66%)
$317 million 6.625% senior subordinated notes due 2016, B1 (LGD4,
to 65% from 66%)
$200 million 8.75% senior subordinated notes due 2018, B1 (LGD4,
to 65% from 66%)
EUR 225 million 6.75% senior subordinated notes due 2018, B1
(LGD4, to 65% from 66%)
$300 million 8% senior subordinated notes due 2020, B1 (LGD4, to
65% from 66%)
$548 million 8.375% senior subordinated notes due 2021, B1 (LGD4,
to 65% from 66%)
Moody's affirmed the following rating (and updated the LGD
assessment) of Iron Mountain Nova Scotia Funding Company:
C$175 million 7.5% senior subordinated notes due 2017, B1 (LGD4,
to 65% from 66%)
Moody's affirmed the following ratings (and updated the LGD
assessments) of Iron Mountain Information Management, Inc.:
$725 million senior secured revolver due 2016, Baa3 (LGD1, to 8%
from 9%)
$500 million senior secured term loan A due 2016, Baa3 (LGD1, to
8% from 9%)
The principal methodology used in rating Iron Mountain Inc. 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.
Headquartered in Boston, Massachusetts, Iron Mountain is an
international provider of information storage and related
services. Pro forma for the sale of the digital business,
consolidated revenues were approximately $2.9 billion in 2010.
J.C. EVANS: Court Approves Burnham Securities as Fin'l Advisor
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Texas
authorized JCE Delaware Inc. and its debtor-affiliates to employ
Burnham Securities Inc. and Reeves Snyder & Harthcock LLP as
financial advisors.
The firm will assist the Debtors in the marketing and sale of the
Debtors' quarry assets.
Jay Linde, senior managing director of Burnham Securities, tells
the Court that it has worked with Frank Reeves of Reeves, Snyder &
Harthcock LLP in their review of the Debtors' quarry assets for
the purpose of a possible sale of the assets. The firm has not
received any prepetition compensation for their work on behalf of
the Debtors.
The Debtors proposed that the compensation Burnham and RSH consist
of:
a) an initial retainer fee of $10,000;
b) up to five additional monthly retainer payments of $10,000
beginning the first day of the month immediately following the
entry of an order;
c) a transaction fee equal to $550,000, plus 4% of the
transaction value in excess of $25,000,000 payable in cash on
the closing date of the transaction, if, during the engagement
a transaction is consummated or an agreement is entered into
that subsequently results in a transaction involving the
assets. In addition, if the Debtor elects to and does retain
the assets and in addition exits its bankruptcy through a plan
of reorganization, the firms will be paid an exit fee of
$100,000 at confirmation.
To the best of the Debtors' knowledge, the firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Mr. Linde can be reached at:
BURNHAM SECURITIES INC.
1325 Avenue of the Americas, 26th Floor
New York, NY 10019
Tel: (212) 333-9606
E-mail: jlinde@bsibam.com
About J.C. Evans Construction
With roots stretching back over 55 years, J.C. Evans is a heavy
equipment construction company based in Leander, Texas. Through
J.C. Evans Construction Co., L.P., a Texas limited partnership
d/b/a/ American Aggregates, the Company owns and operates a
construction company specializing in heavy site preparation on
commercial, pipeline, utility and highway projects, including
excavating, trenching, site preparation and construction.
Through Adkins Land Development, L.P., a Texas limited
partnership, the Company owns a 700-acre quarry, which produces
aggregate for use in road construction.
J.C. Evans Construction Holdings is the holding company that owns
directly or indirectly each of the other entities. In turn,
Holdings is owned by a trust for the benefit of the current and
former employees of J.C. Evans through an Employee Stock Ownership
Plan.
Six affiliated companies filed for Chapter 11 (Bankr. W.D. Tex.
Case Nos. 11-11926 to 11-11931) on Aug. 1, 2011. These are JCE
Delaware Inc., J.C. Evans Construction Holdings, J.C. Evans
Nevada, LLC, EQUUS Development Inc., J.C. Evans Construction and
Adkins Land Development. The cases are jointly administered
before Judge Craig A. Gargotta. In its petition, JCE Delaware
estimated $50 million to $100 million in both assets and debts.
George H. Tarpley, Esq., and Mark E. Andrews, Esq., at Cox Smith
Matthews Incorporated, serve as bankruptcy counsel. Title
Advisory Group, Inc., has been tapped to solicit DIP financing for
the Debtors. Burnham Securities Inc. and Reeves, Snyder &
Harthcock, LLP, are financial advisors.
JERRY BROOKS: North Alabama Bank Debt Not Dischargeable
-------------------------------------------------------
Bankruptcy Judge Jack Caddell ruled that Jerry Glen Brooks' debt
owed to North Alabama Bank is nondischargeable pursuant to 11
U.S.C. Sec. 523(a)(2)(B), which makes nondischargeable any debt
for money, property, services, or an extension, renewal, or
refinancing of credit, to the extent obtained by use of a
statement in writing that is materially false; respecting the
debtor's or an insider's financial condition; on which the
creditor to whom the debtor is liable for such money, property,
services, or credit reasonably relied; and that the debtor caused
to be made or published with intent to deceive. Judge Caddell
said North Alabama Bank reasonably relied upon the debtor's April
2009 financial statement produced for the purpose of renewing a
loan, where the debtor misrepresented to the Bank the value of
those assets, and his liabilities including the liens and
encumbrances on property known as the Nick Davis Road property;
and that the debtor published the financial statement with the
intent to deceive. The case is NORTH ALABAMA BANK, v. Jerry Glen
Brooks, Adv. Proc. No. 11-80005 (Bankr. N.D. Ala.). A copy of
Judge Caddell's Sept. 19, 2011 Memorandum Opinion is available at
http://is.gd/z60jR8from Leagle.com.
Jerry Glen Brooks filed for Chapter 11 bankruptcy (Bankr. N.D.
Ala. Case No. 10-84089) on Oct. 5, 2010, estimating under
$1 million in assets and debts. A copy of the petition is
available at no charge at http://bankrupt.com/misc/alnb10-
84089.pdf
LAMAR CROSSING: 6th Cir. BAP Affirms Sanctions Against Byrd
-----------------------------------------------------------
Judge Marci B. McIvor, sitting on the Bankruptcy Appellate Panel
Judge for the Sixth Circuit, affirmed a bankruptcy court order
granting a motion for sanctions against Preston E. Byrd pursuant
to Federal Rule of Bankruptcy Procedure 9011. The order required
Mr. Byrd to pay Arvest Bank's attorney fees and expenses in the
amount of $42,299. Mr. Byrd, appearing pro se, took an appeal
from the order. Sanctions were imposed against Mr. Byrd for
causing the chapter 11 petition of Lamar Crossing Apartments,
L.P., to be filed without authority to do so, and doing so in bad
faith.
Mr. Byrd is the Chief Manager of Horizon Holding Company, LLC. On
June 14, 2007, Horizon and Boston Capital Corporate Tax Credit
Fund XXVI entered into a First Amended and Restated Agreement of
Limited Partnership for the purpose of constructing a housing
project in Germantown, Tennessee. Lamar Crossing was the owner of
this housing project under development. Originally, the general
partner of the Debtor was Horizon.
Preston E. Byrd, Appellant, v. Arvest Bank, Appellee, No. 10-8071
(6th Cir. BAP). A copy of the BAP's Sept. 20, 2011 decision is
available at http://is.gd/szEWFRfrom Leagle.com.
Lamar Crossing Apartments, L.P., in Collierville, Tennessee, filed
for Chapter 11 bankruptcy (Bankr. W.D. Tenn. Case No. 09-30194) on
Sept. 16, 2009. Samuel Jones, Esq. -- samueljones@bellsouth.net
-- represented the Debtor. In its petition, the Debtor estimated
$1 million to $10 million in assets and debts. The petition was
signed by Preston Byrd.
LEHMAN BROTHERS: Delays Decision on Giants Stadium Documents
------------------------------------------------------------
Judge Peck said he would put off deciding whether Lehman Brothers
Holdings Inc. could peek at 29 e-mails at the center of a $300
million dispute with Giants Stadium LLC, Richard Vanderford at
Law360 reported on Sept. 14.
Mr. Vanderford related that Judge Peck said at a hearing that he
would put off deciding on whether the e-mails were discoverable
until he had a chance to read them himself.
Lehman Brothers Holdings Inc. and Lehman Brothers Special
Financing Inc. ask Judge James Peck to order Giants Stadium LLC
to turn over documents related to its role as partner in a swap
deal.
The move came after Giant Stadium allegedly refused to turn over
certain documents that it shared with its financial adviser,
Goldman Sachs & Co., on grounds that they are protected by
"attorney client and work product privileges."
Earlier, LBHI served Giants Stadium with a subpoena to produce
the documents in connection with its investigation of the $301.8
million claim which Giants Stadium filed against the company and
LBSF.
The claim stemmed from the swap deal Giants Stadium entered into
with LBSF in connection with the $650 million in securities it
issued to finance the construction of the New Meadowlands
stadium. The swap deal was reportedly terminated by Giants
Stadium after the Lehman units filed for bankruptcy protection in
September 2008.
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 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)
LEHMAN BROTHERS: Investors File Class Suit vs. BNY Over $35MM Loss
------------------------------------------------------------------
Investors sued Bank of New York Mellon Corp. on Tuesday in a
putative class action accusing the bank of lending $35 million of
their assets to Lehman Brothers Holding Inc. and leaving the
loans drastically undersecured, even as the bank sought to
minimize its own exposure to the doomed firm, Liz Hoffman of
Law360 reported on Sept. 14.
The suit, filed in New York federal court by a pair of Detroit
public pension funds, accuses the bank of luring the funds into
its securities lending program, which purported to turn
investors' money around into, the report related.
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 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)
LEHMAN BROTHERS: Fifth Ave. Building Fetches $726MM Investment
--------------------------------------------------------------
The sale of the majority stake in the former International Toy
Center at 200 Fifth Ave. that was held by the estate of failed
investment bank Lehman Brothers closed on Friday. A real estate
fund run by J.P. Morgan Asset Management paid $726 million for
the stake in the 844,500-square-foot landmark office building,
Amanda Fung of Crain's New York reported on Sept. 16.
L&L Holding Company, which bought the building with Lehman in
2007, will remain invested in the 14-story property and will
become J.P. Morgan's partner, the report said. They will also
remain 200 Fifth Ave.'s property manager, according to Lehman
Brothers, which held an 89% equity stake in the building, the
report continued. Lehman Brothers and its partners bought 200
Fifth Ave. for $480 million at the peak of the market in 2007 and
spent close to $125 million refurbishing it, according to the
report.
In June 2010, the construction loan on the property was
restructured, and $98.5 million of new capital was invested into
the building to complete its makeover, $33 million of that came
from Lehman Brothers, the report related. Lehman Brothers said
the loan restructuring and building revamp were key to its
ability to recover value on the property, and vindicated its
decision to hold onto its real estate investments during the
downturn as opposed to trying for quick sales, the report noted.
Since the building's fiscal and physical makeovers, more than
335,000 square feet of space has been leased, Ms. Fung said.
"We not only earned a market return on the new capital we
invested, we recovered a substantial portion of our initial
equity investment in the project," said Ashish Gupta, the senior
investment professional on the deal for Lehman Brothers, which
retained brokerage Eastdil Secured to market the property, told
Crain's New York. "That's a pretty big win for our team."
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 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)
LEHMAN BROTHERS: Cayman Fund Under Voluntary Wind-Up
----------------------------------------------------
On August 16, 2011, the sole member of Lehman Brothers Global
Diversity Fund, Ltd. resolved to voluntarily wind up the
company's operations.
Only creditors who were able to file their proofs of debt by
Sept. 19, 2011, will be included in the company's dividend
distribution.
The company's liquidator is:
Richard Finlay
c/o Tania Dons
Telephone: (345) 814 7766
Facsimile: (345) 945 3902
P.O. Box 2681 Grand Cayman KY1-1111
Cayman Islands
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 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)
LEHMAN BROTHERS: Paulson Group Withdraws Plea for Disclosure
------------------------------------------------------------
A group of Lehman Brothers Holdings Inc.'s creditors led by hedge
fund Paulson & Co. withdrew, without prejudice, its motion to
implement a process that requires proponents of Chapter 11 plans
to publicly disclose their interests.
The proposed process previously drew flak from the Official
Committee of Unsecured Creditors and other Lehman creditors
including a group led by Goldman Sachs Bank USA and Goldman Sachs
International.
The Creditors' Committee expressed concern that the proposed
process, if approved, would impose "onerous disclosure
requirements" on creditors that are not obliged to disclose
information under the bankruptcy laws.
The Goldman Sachs group, meanwhile, complained that the Paulson
group proposed disclosure requirements "far out of proportion" to
those contemplated by the bankruptcy laws.
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 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)
M&M STONE: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: M&M Stone Co.
2840 W. Clymer Avenue
Telford, PA 18969
Bankruptcy Case No.: 11-17266
Chapter 11 Petition Date: September 18, 2011
Court: U.S. Bankruptcy Court
Eastern District of Pennsylvania (Philadelphia)
Judge: Eric L. Frank
Debtor's Counsel: Gregory R. Noonan, Esq.
WALFISH & NOONAN, LLC
528 DeKalb Street
Norristown, PA 19401
Tel: (610) 277-7899
E-mail: walfishnoonan@aol.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $1,000,001 to $10,000,000
The petition was signed by Brian L. Carpenter, president.
Affiliate that filed separate Chapter 11 petition:
Entity Case No. Petition Date
------ -------- -------------
Drum Construction Company, Inc. 11-14857 06/17/11
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Elliott Greenleaf Legal Fees $586,599
P.O. Box 3010
Blue Bell, PA 19422
William G. Carpenter Loan $335,544
2851 Willow Brook Lane
Pottstown, PA 19464
Martin Stone Co. Trade Debt $263,628
P.O. Box 297
Bechtelsville, PA 19505
Moyer & Son, Inc. Trade Debt $231,373
Nustar Refining Trade Debt $147,935
Geo. Schofield Co. Trade Debt $143,035
Wm G. Carpenter & Sons, Inc. Loan $145,000
McGlynn Family Trust -- $66,267
Kitteredge Donley Legal Fees $61,268
Highway Materials, Inc. Trade Debt $57,320
James A. Turner, Inc. Trade Debt $33,471
Aeon Geoscience Trade Debt $31,521
Peco Energy Unpaid Utilities $31,178
Maurer & Scott Sales Trade Debt $26,290
Phillips Brothers Electrical Trade Debt $23,140
Contractors
Frank Callahan Co. Trade Debt $16,605
BP Lubricants Trade Debt $14,920
Weldon Auto Parts, Inc. Trade Debt $14,260
Clayton H. Landis Co. Trade Debt $14,251
Midlantic Machinery Company Trade Debt $13,383
M&M STONE: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: M&M Stone Co.
2840 W. Clymer Avenue
Telford, PA 18969
Bankruptcy Case No.: 11-17266
Chapter 11 Petition Date: September 18, 2011
Court: U.S. Bankruptcy Court
Eastern District of Pennsylvania (Philadelphia)
Judge: Eric L. Frank
Debtor's Counsel: Gregory R. Noonan, Esq.
WALFISH & NOONAN, LLC
528 DeKalb Street
Norristown, PA 19401
Tel: (610) 277-7899
E-mail: walfishnoonan@aol.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $1,000,001 to $10,000,000
The petition was signed by Brian L. Carpenter, president.
Affiliate that filed separate Chapter 11 petition:
Entity Case No. Petition Date
------ -------- -------------
Drum Construction Company, Inc. 11-14857 06/17/11
Debtor's List of Its 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Elliott Greenleaf Legal Fees $586,599
P.O. Box 3010
Blue Bell, PA 19422
William G. Carpenter Loan $335,544
2851 Willow Brook Lane
Pottstown, PA 19464
Martin Stone Co. Trade Debt $263,628
P.O. Box 297
Bechtelsville, PA 19505
Moyer & Son, Inc. Trade Debt $231,373
Nustar Refining Trade Debt $147,935
Geo. Schofield Co. Trade Debt $143,035
Wm G. Carpenter & Sons, Inc. Loan $145,000
McGlynn Family Trust -- $66,267
Kitteredge Donley Legal Fees $61,268
Highway Materials, Inc. Trade Debt $57,320
James A. Turner, Inc. Trade Debt $33,471
Aeon Geoscience Trade Debt $31,521
Peco Energy Unpaid Utilities $31,178
Maurer & Scott Sales Trade Debt $26,290
Phillips Brothers Electrical Trade Debt $23,140
Contractors
Frank Callahan Co. Trade Debt $16,605
BP Lubricants Trade Debt $14,920
Weldon Auto Parts, Inc. Trade Debt $14,260
Clayton H. Landis Co. Trade Debt $14,251
Midlantic Machinery Company Trade Debt $13,383
MANISTIQUE PAPERS: Resumes Operation After Getting Financial Aid
----------------------------------------------------------------
Yona Gavino at Upper Michigans reports that Manistique Paper
resumes operations after receiving financial assistance from mBank
and the Michigan Economic Development Corporation. The report
notes the Company will now have a completely different customer
base. One target customer would be internet shops that have need
packages to ship items to customers.
About Manistique Papers
Manistique Papers Inc. operates a landfill in Manistique,
Michigan, whereby residuals resulting from paper production are
deposited. Manistique Papers filed for Chapter 11 bankruptcy
protection (Bankr. D. Del. Case No. 11-12562) on Aug. 12, 2011.
Daniel B. Butz, Esq., and Eric D. Schwartz, Esq., at Morris,
Nichols, Arsht & Tunnell LLP, serves as the Debtor's bankruptcy
counsel. Manistique Papers estimated assets of $10 million to
$50 million and debts of $50 million to $100 million in its
Chapter 11 petition.
MEDCORP INC: Owner Joins Bidding War With $7.2 Million Offer
------------------------------------------------------------
Business First, citing a report from the Toledo Blade, says the
owner of MedCorp Inc. is trying to buy the assets of his ambulance
company in bankruptcy. The bid by MedCorp founder Richard Bage
totals $7.2 million -- higher than the offer from Enhanced Equity
Fund LP of New York.
The Toledo Blade previously reported that Mr. Bage initially
offered $5.5 million. A state court judge, who oversees
MedCorp.'s receivership, disqualified the offer in part because
Mr. Bage did not provide proof he had financing to back the offer
and had not submitted $1 million in earnest money, as required
under bid rules.
MedCorp, Inc., filed a Chapter 11 petition (Bankr. N.D. Ohio Case
No. 11-33239) on June 10, 2011, estimating assets and debts of up
to $50,000. Affiliate Medcorp E.M.S. South, LLC (Bankr. N.D. Ohio
Case No. 11-33256) and Stickney Avenue Investment Properties LLC,
also filed.
MedCorp filed for Chapter 11 protection to halt the pending sale
of the ambulance company to Enhanced Equity Fund LP, which bid
$5.3 million in cash to buy the firm. The sale was ordered by
Lucas County Common Pleas Court Judge Gary Cook, who is presiding
over a MedCorp receivership case that began in August. Mark Uhrich
of Hillyer Group LLC is the receiver.
Judge Richard Speer is presiding over the bankruptcy cases.
MESA AIR: Wants Until Jan. 20 to Object to Claims
-------------------------------------------------
Mesa Air Group, Inc. and its affiliated reorganized debtors ask
the Honorable Martin Glenn of the U.S. Bankruptcy Court for the
Southern District of New York to further extend by 120 days the
date by which objections to claims must be filed, through and
including Jan. 20, 2012, without prejudice to their right to seek
further extensions of the Claims Objection Deadline.
Pursuant to the Court's extension order, dated Aug. 12, 2011, the
Claims Objection Deadline was extended through and including
Sept. 22, 2011.
Since the filing of the Extension Order, the Reorganized Debtors
have filed four omnibus objections with respect to 162 claims,
which are scheduled to be heard on Sept. 26. The Reorganized
Debtors have objected to approximately 1,100 proofs of claim,
which includes administrative expense claims.
In addition, the Reorganized Debtors have succeeded in
negotiating the settlement of numerous claims asserted against
certain of their estates and obtained the voluntary withdrawal of
various proofs of claim filed in these Chapter 11 cases,
according to John W. Lucas, Esq., at Pachulski Stang Ziehl &
Jones LLP, in New York. As of Sept. 19, more than 90% of the
total amount of general unsecured claims has been resolved and
approximately 68% of all claims filed in these Chapter 11 cases
have been resolved, he adds.
While a substantial portion of the claims reconciliation process
has been completed, the Reorganized Debtors require additional
time to continue negotiating with certain claimants in an effort
to resolve their claims without the need to file objections and
to finalize the claims reconciliation process, Mr. Lucas tells
the Court.
The Reorganized Debtors seek a further extension of the Claims
Objection Deadline with the intention of finalizing all claims
and making a final distribution so that these Chapter 11 cases
may be closed as expeditiously as possible, Mr. Lucas says.
Unless a written objection is filed and served so as to be
received by Sept. 28, 2011, there will not be a hearing and the
stipulation and order may be signed. If a written objection is
timely filed, a hearing to consider the motion will be held on
Oct. 10, 2011.
About Mesa Air
Mesa Air currently operates 76 aircraft with approximately 450
daily system departures to 94 cities, 38 states, the District of
Columbia, and Mexico. Mesa operates as US Airways Express and
United Express under contractual agreements with US Airways and
United Airlines, respectively, and independently as go! Mokulele.
This operation links Honolulu to the neighbor island airports of
Hilo, Kahului, Kona and Lihue. The Company was founded by Larry
and Janie Risley in New Mexico in 1982.
Mesa Air Group Inc. and its units filed their Chapter 11 petitions
(Bankr. S.D.N.Y. Lead Case No. 10-10018) on Jan. 5, 2010, in New
York, listing assets of $976 million against debt totaling
$869 million as of Sept. 30, 2009.
Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at
Pachulski Stang Ziehl & Jones LLP, serve as local counsel to the
Debtors. Imperial Capital LLC is the investment banker. Epiq
Bankruptcy Solutions is claims and notice agent. Brett Miller,
Esq., Lorenzo Marinuzzi, Esq., and Todd Goren, Esq., at Morrison &
Foerster LLP, serve as counsel to the Official Committee of
Unsecured Creditors.
Judge Martin Glenn entered a final order confirming the Third
Amended Joint Plan of Reorganization of Mesa Air Group, Inc., and
its debtor affiliates on Jan. 20, 2011. Under the plan, the
reorganized company will issue new notes, common stock and
warrants to creditors. Unsecured creditors that are U.S. citizens
will receive a combination of new notes and new common stock,
while unsecured creditors that are Non-U.S. citizens will receive
a combination of new notes and new warrants. An agreement with US
Airways paved way for the filing of the plan.
Mesa Air's Plan of Reorganization became effective March 1, 2011.
The Company's restructuring accomplishments included elimination
of 100 excess aircraft and associated leases and debt which
contributed to the deleveraging of Mesa's balance sheet in the
approximate amount of $700 million in capitalized leases and
$50 million in debt, and extending the term of the code-share
agreement with US Airways through September 2015.
Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Mesa Air Group Inc. and its units.
(http://bankrupt.com/newsstand/or 215/945-7000).
MESA AIR: DVB Bank Transfer $28.1MM Claims to DG Value, et al.
--------------------------------------------------------------
DVB Bank SE, as a loan participant holding the beneficial
ownership interests in Claim Nos. 1478 and 1196, which claims are
held in the legal name of its indenture trustee, U.S. Bank,
National Association, notifies the Court of its intention to
sell, trade, or otherwise transfer the Claims aggregating
$28,166,188 to certain DG Value Parties:
(a) DG Value Partners, LP, with respect to $14,646,418 of the
Claims;
(b) Special Situations X, LLC, with respect to $9,013,180 of
the Claims; and
(c) Special Situations, LLC, with respect to $4,506,590 of the
Claims.
DG Value Partners, Special Situations X, and Special Situations
also provide notice to the Court that they intend to purchase,
acquire, or otherwise accumulate the Claims. They disclose that
they beneficially own Allowed or Disputed Claims against the
Debtors in the aggregate principal amount of $45,678,156 and,
other than proceeds of those claims, zero shares of New Common
Stock, zero New Warrants, and zero 2023 Notes or 2024 Notes.
Once the proposed transfer from DVB Bank occurs, DG Value
Partners, Special Situations X, and Special Situations will
beneficially own claims against the Debtors in the aggregate
principal amount of $73,844,345. In addition, under a separate
transaction, the Purchasers are in the process of acquiring
$30,125,448 from another creditor.
In another filing, DV Bank SE, as the agent for itself and a
syndicate of lenders, proposes to sell, trade, or otherwise
transfer Claim Nos. 1216 and 1217, aggregating $34,300,000, as
well as the related New Warrants that are exercisable for 92,645
shares of New Common Stock and $539,585 of New 8% Notes (Series
B) to Lazard Capital Markets LLC.
Lazard Capital also provides notice to the Court of its intention
to purchase, acquire or otherwise accumulate the Transferred
General Unsecured Claims, New Warrants, and New 8% Notes (Series
B). It currently beneficially owns Allowed or Disputed Claims
against the Debtors in the aggregate principal amount of $0 and
no shares of New Common Stock, no New Warrants, and no New 8%
Notes (Series B).
About Mesa Air
Mesa Air currently operates 76 aircraft with approximately 450
daily system departures to 94 cities, 38 states, the District of
Columbia, and Mexico. Mesa operates as US Airways Express and
United Express under contractual agreements with US Airways and
United Airlines, respectively, and independently as go! Mokulele.
This operation links Honolulu to the neighbor island airports of
Hilo, Kahului, Kona and Lihue. The Company was founded by Larry
and Janie Risley in New Mexico in 1982.
Mesa Air Group Inc. and its units filed their Chapter 11 petitions
(Bankr. S.D.N.Y. Lead Case No. 10-10018) on Jan. 5, 2010, in New
York, listing assets of $976 million against debt totaling
$869 million as of Sept. 30, 2009.
Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at
Pachulski Stang Ziehl & Jones LLP, serve as local counsel to the
Debtors. Imperial Capital LLC is the investment banker. Epiq
Bankruptcy Solutions is claims and notice agent. Brett Miller,
Esq., Lorenzo Marinuzzi, Esq., and Todd Goren, Esq., at Morrison &
Foerster LLP, serve as counsel to the Official Committee of
Unsecured Creditors.
Judge Martin Glenn entered a final order confirming the Third
Amended Joint Plan of Reorganization of Mesa Air Group, Inc., and
its debtor affiliates on Jan. 20, 2011. Under the plan, the
reorganized company will issue new notes, common stock and
warrants to creditors. Unsecured creditors that are U.S. citizens
will receive a combination of new notes and new common stock,
while unsecured creditors that are Non-U.S. citizens will receive
a combination of new notes and new warrants. An agreement with US
Airways paved way for the filing of the plan.
Mesa Air's Plan of Reorganization became effective March 1, 2011.
The Company's restructuring accomplishments included elimination
of 100 excess aircraft and associated leases and debt which
contributed to the deleveraging of Mesa's balance sheet in the
approximate amount of $700 million in capitalized leases and
$50 million in debt, and extending the term of the code-share
agreement with US Airways through September 2015.
Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Mesa Air Group Inc. and its units.
(http://bankrupt.com/newsstand/or 215/945-7000).
MINOR FAMILY: Exclusivity Period Extended Until January 2012
------------------------------------------------------------
Aaron Richardson at the Daily Progress reports Richard Maxwell,
Esq., attorney for Minor Family Hotels LLC, said a federal judge
granted the Company a bankruptcy extension to get the project
finished. "What the court did was extend the period to come up
with a bankruptcy plan until January 2012," Mr. Maxwell said.
According to Mr. Maxwell, hiring a new developer is the first step
toward satisfying creditors of the bankrupt project. "As Mr.
Dixon told the judge yesterday, the first step is to do a full
engineering report on the hotel, then there's a marketing survey
to determine occupancy and room rates," Mr. Maxwell said. "Then,
it's up to Mr. Dixon to find financing for the completion of the
hotel project."
About Minor Family
Charlottesville, Virginia-based Minor Family Hotels, LLC, is the
owner of the Landmark Hotel project in downtown Charlottesville,
Virginia. Minor Family filed for Chapter 11 bankruptcy protection
(Bankr. W.D. Va. Case No. 10-62543) on September 1, 2010.
Benjamin Webb King, Esq., at Woods Rogers Hazlegrove, serves as
bankruptcy counsel. Minor Family estimated assets and debts at
$10 million to $50 million in its Chapter 11 petition.
Minor Family Hotels filed for Chapter 11 protection to resolve
"burdensome" lawsuits that have delayed the hotel's construction.
Eight lawsuits have been filed in connection with the project.
MMFX INTERNATIONAL: Plan Became Effective on Aug. 8
---------------------------------------------------
As reported in the TCR on July 29, 2011, the U.S. Bankruptcy Court
for the Central District of California, on June 22, 2011,
confirmed the Plan of Reorganization, amended as of June 7, 2011,
and proposed by MMFX International Holdings, Inc., Fasteel
Corporation, MMFX Steel Corporation of America, and MMFX
Technologies Corporation, the Official Committee of Unsecured
Creditors, Investment Funding, Inc., and Fourth Third LLC.
A full-text copy of the Amended Plan is available for free at
http://bankrupt.com/misc/MMFX_plan_amendedjointplan.pdf
The conditions precedent to the Effective Date have either
occurred or have been waived. As a result, the Effective Date of
the Plan is Aug. 8, 2011.
The Bankruptcy Court will retain jurisdiction of the Bankruptcy
Cases and the Plan to the extent set forth in the Confirmation
Order, any other order of the Bankruptcy Court, as provided in
Article X of the Plan, or otherwise to the greatest extent
permitted under law.
The notice of occurrence of Effective Date does not affect Lead
Debtor, MMFX Canadian Holdings, Inc., Case No. 10-10083.
About MMFX
Irvine, California-based MMFX International Holdings, Inc., and
MMFX Canadian Holdings, Inc., filed for Chapter 11 (Bankr. C.D.
Calif. Case Nos. 10-10085 and 10-10083) on Jan. 5, 2010. Margaret
M. Mann, Esq., at Sheppard Mullin Richter & Hampton LLP assists
the Debtors in their restructuring efforts. No committee of
unsecured creditors has been appointed. MMFX International
estimated assets and debts of $50 million to $100 million as of
the Chapter 11 filing.
MORITZ WALK: Court Denies Confirmation of Second Amended Plan
-------------------------------------------------------------
Bankruptcy Judge Letitia Z. Paul denied confirmation of Moritz
Walk LP's Second Amended Plan of Reorganization, as modified,
saying the Debtor has not met its burden of proof to show that the
plan has adequate means for its implementation, is not likely to
be followed by liquidation or the need for further financial
reorganization, and is fair and equitable as to lender Green Bank.
The bank loaned $2,355,000 to the Debtor to help finance the
Debtor's acquisition of 3.823 acres of undeveloped land in the
Spring Branch area of Houston, Texas in 2007. Green Bank filed a
proof of claim for $2,362,943.10, plus continuing taxes, interest,
and attorney fees. A copy of Judge Paul's Sept. 19, 2011
Memorandum Opinion is available at http://is.gd/v4fTwufrom
Leagle.com.
Based in Houston, Texas, Moritz Walk, L.P., filed for Chapter 11
protection (Bankr. S.D. Tex. Case No. 10-41069) on Dec. 6, 2010,
represented by James B. Jameson, Esq. -- jbjameson@jamesonlaw.net
-- at James B. Jameson & Associates. The Debtor scheduled assets
of $3,660,160 and debts of $3,392,181. The Debtor indicated in
its Chapter 11 petition that it is a single asset real estate
entity.
MSR RESORT: Seeks Court OK for Deal With Singaporean Funds
----------------------------------------------------------
Samuel Howard at Bankruptcy Law360 reports that Paulson &
Co.-owned MSR Resort Golf Course LLC on Tuesday sought bankruptcy
court approval in New York for a crucial truce with a group of
Singapore sovereign wealth funds that had vied for ownership of
the resort group.
Law360 relates that MSR said it had ironed out its differences
with the affiliates of the Government of Singapore Investment
Corp., bringing the dissident creditor, known as GIC RE, on board
by promising to pay its claim in full in cash under any debtor-run
Chapter 11 plan.
About MSR Resort
MSR Hotels & Resorts, formerly known as CNL Hotels & Resorts Inc.,
owns a portfolio of eight luxury hotels with over 5,500 guest
rooms, including the Arizona Biltmore Resort & Spa in Phoenix, the
Ritz-Carlton in Orlando, Fla., and Hawaii's Grand Wailea Resort
Hotel & Spa in Maui.
On Jan. 28, 2011, CNL-AB LLC acquired the equity interests in the
portfolio through a foreclosure proceeding. CNL-AB LLC is a joint
venture consisting of affiliates of Paulson & Co. Inc., a joint
venture affiliated with Winthrop Realty Trust, and affiliates of
Capital Trust, Inc.
Morgan Stanley's CNL Hotels & Resorts Inc. owned the resorts
before the Jan. 28 foreclosure.
Following the acquisition, five of the resorts with mortgage debt
scheduled to mature on Feb. 1, 2011, were sent to Chapter 11 by
the Paulson and Winthrop joint venture affiliates. MSR Resort
Golf Course LLC and its affiliates filed for Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan on Feb. 1.
The resorts subject to the filings are Grand Wailea Resort and
Spa, Arizona Biltmore Resort and Spa, La Quinta Resort and Club
and PGA West, Doral Golf Resort and Spa, and Claremont Resort and
Spa.
James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O.
Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis,
LLP, serve as the Debtors' bankruptcy counsel. Houlihan Lokey
Capital, Inc., is the Debtors' financial advisor. Kurtzman Carson
Consultants LLC is the Debtors' claims agent.
The five resorts had $2.2 billion in assets and $1.9 billion in
debt as of Nov. 30, 2010, according to court filings. In its
schedules, debtor MSR Resort disclosed $59,399,666 in total assets
and $1,013,213,968 in total liabilities.
NANCY VENCILL: Directed to Disclose Conversation With Lawyer
------------------------------------------------------------
Bankruptcy Judge William Stone, Jr., directed Nancy P. Vencill to
disclose to the U.S. Trustee the particulars of a conversation
which is indicated to have taken place in the month of September
2010, prior to the filing of Ms. Vencill's bankruptcy case,
between Ms. Vencill and Robert T. Copeland, Esq. concerning
certain real property which Ms. Vencill wanted to transfer to her
son, Paul Robert Vencill, III, and did in fact transfer to him
during that same month prior to filing her Chapter 11 bankruptcy
petition.
Mr. Copeland objected, citing attorney/client privilege. The U.S.
Trustee asserts that the conversation in question is not subject
to a claim of privilege for two reasons: that the Debtor waived
the privilege by testifying about advice given to her by Mr.
Copeland concerning other matters without claiming the privilege,
and that the communication is excluded from protection by the
crime/fraud exception to the attorney/client privilege.
In his ruling, Judge Stone directed the U.S. Trustee and his
counsel to keep the disclosure in confidence to the extent it
provides information not otherwise known and that it will be used
for no purpose other than the motion seeking the disqualification
of her bankruptcy counsel without having first obtained either the
Debtor's consent or the Court's authorization.
The case is UNITED STATES TRUSTEE v. ROBERT T. COPELAND, ESQ. and
COPELAND & BIEGER, P.C., No. 10-72956 (Bankr. W.D. Va.). A copy
of Judge Stone's Sept. 9, 2011 Memorandum Decision is available at
http://is.gd/Jdm4IUfrom Leagle.com.
Nancy P. Vencill, in Rosedale, Virginia, filed for Chapter 11
bankruptcy (Bankr. W.D. Va. Case No. 10-72956) on Dec. 21, 2010.
Robert Tayloe Copeland, Esq.-- rcopeland@copelandbieger.com -- at
Copeland & Bieger, P.C. In her petition, the Debtor estimated $1
million to $10 million in assets and debts.
Lebanon Equipment Company, Inc., an affiliate of the Debtor, filed
for Chapter 11 (Bankr. W.D. Va. 10-72524) on Oct. 25, 2010.
NEBRASKA BOOK: Lacks $250 Million Loan for Plan Confirmation
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Nebraska Book Co. has been unable to arrange $250
million in financing required for confirmation and implementation
of the reorganization plan that was scheduled for approval Oct. 4.
According to the report, the Company said in a court filing this
week that potential lenders pointed to "various macroeconomic
indicators, including a tightening of capital markets, as possible
concerns with the debtors' procuring the exit financing at this
time."
The lenders, according to the filing, want to see the results of
back-to-school sales before committing to a new loan. Sale
results won't be available from the stores until the end of
October, and then several weeks can be required to "get behind"
the numbers, the company said.
The plan confirmation hearing, according to Mr. Rochelle, has been
pushed back to Oct. 27. The plan would exchange existing debt for
new debt, cash and the new stock, after first-lien and second-lien
debt is paid in full. The stock would be divided mostly among
subordinated noteholders of the operating company and holders of
notes issued by the holding company. The plan was crafted to
remove $150 million of debt from the balance sheet.
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.
The Official Committee of Unsecured Creditors selected Lowenstein
Sandler LLP and Stevens & Lee, P.C., as lawyers and Mesirow
Financial Inc. as financial advisers.
Nebraska Book prepared a pre-packaged Chapter 11 plan that would
swap some of the existing debt for new debt, cash and the new
stock.
NETWORK CN: To Effect a 1-for-5 Reverse Stock Split
---------------------------------------------------
Network CN Inc. filed a Certificate of Amendment to its
Certificate of Incorporation with the Delaware Secretary of State
to effect a 1-for-5 reverse stock split of the Company's
outstanding common stock. A copy of the Certificate of Amendment
is available for free at http://is.gd/mkcUeC
About Network CN
Network CN Inc. (OTC QB: NWCN) -- http://www.ncnmedia.com/-- is
building a multi-media, multi-application out-of-home advertising
network in the key cities of China. Network CN Inc. was
incorporated in the State of Delaware in 1993 and is headquartered
in Causeway Bay, Hong Kong.
As reported in the TCR on Mar 24, 2011, Baker Tilly Hong Kong
Limited, in Hong Kong SAR, expressed substantial doubt about
Network CN's ability to continue as a going concern, following the
Company's 2010 results. The independent auditors noted that the
Company has incurred net losses of $2.60 million and
$37.38 million for the years ended Dec. 31, 2010, and 2009,
respectively. As of Dec. 31, 2010, the Company recorded a
stockholders' deficit of $3.52 million.
The Company's balance sheet at June 30, 2011, showed $1.28 million
in total assets, $5.59 million in total liabilities and a $4.30
million total stockholders' deficit.
NEW RIVER DRY: Sales Agent's Lawyer Sanctioned for Misconduct
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida, en
banc, sanctioned Kevin C. Gleason, Esq., for unprofessional and
disrespectful tone and content of his April 18, 2011 Response and
May 13, 2011 Supplemental Response to a show-cause order.
Mr. Gleason is suspended from practice before the United States
Bankruptcy Court for the Southern District of Florida for a period
of 60 days commencing Nov. 1, 2011. Mr. Gleason will be referred
to the Florida Bar for the imposition of any additional sanctions
that the Florida Bar may find appropriate.
Mr. Gleason represents a real estate sales agent engaged to sell
assets of New River Dry Dock, Inc. Mr. Gleason filed a Claim of
Exemption on behalf of his client asserting that a commission
received from a real estate sale was exempt from attachment or
garnishment under Florida law, and thus not subject to
disgorgement under an order entered in the case. An unsecured
creditor filed a motion to strike the Claim, and a motion for
sanctions based upon the filing of the Claim. Judge John Olson
denied the creditor's motion for sanctions because the 21-day safe
harbor period of Fed. R. Bankr. P. 9011 had not run before the
motion for sanctions was filed. In the same order, on the Court's
initiative pursuant to Fed. R. Bankr. P. 9011(c)(1)(B), Mr.
Gleason was ordered to show cause why non-monetary sanctions
should not be imposed for having filed the Claim.
In his Sept. 20, 2011 Order sanctioning Mr. Gleason, Chief
Bankruptcy Judge Paul G. Hyman said Mr. Gleason offers no material
justification for his diatribe. "Indeed, there is no appropriate
justification. If an attorney believes that a ruling is
incorrect, he may seek reconsideration or file an appeal. If an
attorney believes that a judge is unfairly prejudiced, he may seek
the judge's recusal. If an attorney has concerns about a
bankruptcy judge's behavior, he may file a judicial misconduct
complaint with the Eleventh Circuit. There are many avenues for
redress," Judge Hyman said. "However, a pleading containing a
hostile, undignified and insulting tirade against a particular
judge or the court in general is obviously not the way to redress
an unfavorable ruling or a judge's alleged unfairness."
Judge Hyman said Mr. Gleason compounded his error on April 29,
2011, by delivering a bottle of wine to Judge Olson's chambers
with a note suggesting that Mr. Gleason and Judge Olson resolve
their issues privately. "Not only was this an ex parte
communication prohibited by Fed. R. Bankr. P. 9003, it violated
Florida Bar Rule 4-3.5 which prohibits a lawyer's attempt to
influence a judge," Judge Hyman pointed out.
At the hearing, Mr. Gleason suggested that this ex parte
communication was somehow less troubling because there was no
adversary on the other side.
But Judge Hyman said Mr. Gleason's admitted ex parte communication
plainly involves the type of impropriety, or the appearance of
impropriety, that the Code of Judicial Conduct directs judges to
avoid. "Whether or not one has an adversary in litigation,
sending a judge a bottle of wine and a note suggesting an in-
person meeting is so far beyond appropriate attorney behavior that
any member of the bar, no matter how green, should reject such a
course of conduct without a second thought," Judge Hyman said.
A copy of Judge Hyman's ruling is available at http://is.gd/xt9mFy
from Leagle.com.
About New River Dry Dock
Based in Fort Lauderdale, Florida, New River Dry Dock, Inc., filed
for chapter 11 protection on July 18, 2006 (Bankr. S.D. Fla. Case
No. 06-13274). James H. Fierberg, Esq., at Berger Singerman,
P.A., represents the Debtor in its restructuring efforts. Mindy
A. Mora, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP
represents the Official Committee of Unsecured Creditors. When
the Debtor filed for protection from its creditors, it estimated
assets between $10 million and $50 million and its debts between
$1 million to $10 million.
The Bankruptcy Court confirmed New River Dry Dock's Chapter 11
Liquidation Plan in October 2007.
NEW STREAM: Court Extends Plan Filing Exclusivity Until Nov. 8
--------------------------------------------------------------
The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware extended the exclusive periods of New Stream
Secured Capital Inc. and its debtor-affiliates to:
a) file a Chapter 11 plan of reorganization until Nov. 8, 2011;
and
b) solicit acceptances of that plan until Jan. 7, 2012.
The Debtors told the Court that they are finalizing an amended
plan which they expect will be supported by their major
constituencies. However, the final negotiation of the plan's
language and preparation of the disclosure statement and
solicitation materials is likely to push the confirmation timeline
beyond the expiration of the current exclusivity period.
According to the Troubled Company Reporter on Aug. 18, 2011,
New Stream said the prepackaged plan filed with the Chapter 11
petition in March has been "indefinitely sidelined" as the result
of disagreements among creditors over the "priority and extent of
liens."
New Stream said upon entering Chapter 11 that the plan had been
accepted by the required majorities of creditors. Facing
opposition from the official creditors' committee and a group that
invested $90 million in New Stream's U.S. and Cayman Island funds,
New Stream previously agreed not to go ahead with approval of the
plan at an April confirmation hearing. The objecting investors
filed involuntary Chapter 11 petitions against three New Stream
funds not among those who filed the prepackaged petitions.
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.
NEWPAGE CORP: To Honor Rumford Property Taxes, Town Manager Says
----------------------------------------------------------------
Terry Karkos, staff writer at the Sun Journal, reports that Carlo
Puiia, manager at the town of Rumford, Maine, addressed mounting
speculation that NewPage Corp. wouldn't pay its taxes this year
for the Rumford mill after announcing on September 7 that the
company filed for Chapter 11 bankruptcy.
The report says NewPage pays 46% of the town of Rumford's property
taxes.
"The Rumford Paper Co., as it's called, is part of that
corporation, and I want to let everybody know that I was told by
their finance person just recently that the mill will pay their
property taxes on time," Mr. Puiia said, according to the report.
"So they've committed to getting us our property taxes as soon as
we supply them with the bill."
The report also notes NewPage owes $2.7 million to Rumford Falls
Hydro LLC, owned by Massachusetts-based Brookfield Renewable Power
Inc.
About NewPage Corporation
Headquartered in Miamisburg, Ohio, NewPage Corporation is the
leading producer of printing and specialty papers in North
America, based on production capacity, with $3.6 billion in net
sales for the year ended December 31, 2010. The company's product
portfolio is the broadest in North America and includes coated
freesheet, coated groundwood, supercalendered, newsprint and
specialty papers. These papers are used for corporate collateral,
commercial printing, magazines, catalogs, books, coupons, inserts,
newspapers, packaging applications and direct mail advertising.
NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan,
Minnesota, Wisconsin and Nova Scotia, Canada. These mills have a
total annual production capacity of approximately 4.1 million tons
of paper, including approximately 2.9 million tons of coated
paper, approximately 1.0 million tons of uncoated paper and
approximately 200,000 tons of specialty paper.
NewPage Corporation, along with affiliates, filed Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12804) on
Sept. 7, 2011. Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq.,
and Philip M. Abelson, Esq., Dewey & Leboeuf LLP, in New York,
serve as counsel. Laura Davis Jones, Esq., at Pachulski Stang
Ziehl & Jones LLP, in Wilmington, Delaware, serves as co-counsel.
Lazard Freres & Co. LLC is the investment banker, and FTI
Consulting Inc. is the financial advisor. Kurtzman Carson
Consultants LLC is the claims and notice agent. In its balance
sheet, the Debtors disclosed $3.4 billion in assets and $4.2
billion in total liabilities as of June 30, 2011.
NORTHCORE TECHNOLOGIES: Launches First Social Commerce Client
-------------------------------------------------------------
Northcore Technologies Inc. and Discount This Holdings Inc.
announced the launched of the Discount This social commerce
destination.
September 14th marks the initial public release of the Discount
This Group Purchase Platform. A select group of members will have
the opportunity to use the product and gain access to the first
wave of exclusive deals prior to the broader roll out. With a
focus on the underserved, high net worth male demographic, it
represents a fresh choice for both customers and vendors. The
product is further differentiated by the incorporation of a number
of novel methodologies and technologies. It is the only such
offering to extend viral discount accelerants and Northcore's
proprietary Dutch Auction to the consumer. This ensures that
clients are encouraged and incented to bring their social network
"into the deal", thereby creating additional benefits for all
participants. Exciting Dutch Auction events where prices will
fall as the deal time expires and support for a wide variety of
mobile devices add to the appeal of the service.
"We are excited to bring our unique vision of group buying to the
market," said Michael Smith, CEO Discount This. "We believe that
the Discount This Social Commerce platform is a significant
evolution of the existing models and I am optimistic that
participants will share my enthusiasm."
"The deployment of the Discount This social discounting platform
comes at an important juncture for Northcore," said Amit Monga,
CEO of Northcore Technologies. "We are proud to bring our proven,
enterprise level framework into the world of Social Commerce. Our
partners at Discount This will benefit from the inclusion of the
robust technology and proprietary IP that have become the
hallmarks of our engagements."
About Northcore
Toronto, Ontario-based Northcore Technologies Inc. (TSX: NTI; OTC
BB: NTLNF) -- http://www.northcore.com/-- provides a Working
Capital Engine(TM) that helps organizations source, manage,
appraise and sell their capital equipment. Northcore offers its
software solutions and support services to a growing number of
customers in a variety of sectors including financial services,
manufacturing, oil and gas and government.
Northcore owns 50% of GE Asset Manager, LLC, a joint business
venture with GE. Together, the companies work with leading
organizations around the world to help them liberate more capital
value from their assets.
Northcore reported a net loss for the first quarter of C$574,000.
This compares with a net loss of C$677,000 in the fourth quarter
of 2010. In the first quarter of 2010, Northcore reported a net
loss of $713,000.
Northcore reported consolidated revenues of C$183,000 for the
first quarter, an increase of 4% over the C$176,000 reported in
the fourth quarter of 2010. In the same period of 2010, Northcore
reported consolidated revenues of C$150,000.
Certain adverse conditions and events cast substantial doubt upon
the ability of the Company to continue as a going concern, the
Company said in the filing. "The Company has not yet realized
profitable operations and has relied on non-operational sources of
financing to fund operations."
The Company's balance sheet at June 30, 2011, showed C$1.39
million in total assets, C$1.33 million in total liabilities and
C$61,000 in total shareholders' equity.
OLD CORKSCREW: Proposes to Pay Critical Vendor Claims
-----------------------------------------------------
Old Corkscrew Plantation LLC and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Middle District of Florida for
permission to pay the prepetition claims of certain vendors that
are critical to the operation of the Debtors' businesses.
The Debtors tell the Court that these critical vendor claims
include obligations to vendors that may not have contracts with
the Debtors and who have threatened to suspend performance of
necessary harvesting and hauling services to the Debtors set to be
rendered in late September, early October 2011.
The Debtors lament that, if the critical Vendors do not receive
payment on account of their critical vendor claims, the critical
vendors will, likely terminate the harvesting and hauling services
they provide to the Debtors. The termination or disruption in the
provision of these critical services due to restart within the
next 30 days will result in material harm to the Debtors and their
estates.
The Debtors provided a list of critical vendors and their claims,
a copy of which is available for free at
http://bankrupt.com/misc/OLDCORKSCREW_List.pdf
About Old Corkscrew Plantation LLC
Fort Myers, Florida-based Old Corkscrew Plantation LLC, whose
oranges are made into Minute Maid and Tropicana juice, filed
for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case No. 11-14559) on
July 29, 2011, disclosing $25,264,047 in assets and $60,751,633 in
debts. Old Corkscrew sought Chapter 11 protection along with its
affiliates. Donald G. Scott, Esq., -- dscott@mcdowellrice.com --
at McDowell, Rice, Smith & Buchanan, in Kansas City, Missouri,
serves as the Debtors' bankruptcy co-counsel. The Debtors' orange
groves are valued at $24 million. Scott Westlake, the Debtors'
managing member, signed the petition. Mr. Westlake is also listed
as the Debtors' largest unsecured creditor, with $4,827,906 owed.
Another $338,511 debt is owed to Scott and Vicki Westlake.
ORANGE GROVE: Inks Agreement With American Continental
------------------------------------------------------
Orange Grove Service Inc. and its secured creditor, American
Continental Bank, entered into an agreement to resolve issues
concerning the bank's treatment under the proposed Chapter 11
plan.
Under the deal, Orange Grove and American Continental agreed to
revise the terms of the promissory note evidencing a
$3.475 million loan, which Orange Grove availed from the bank.
The revised terms provide that American Continental will continue
to hold first priority liens and security interests in the Fremont
Shopping Center as well as the cash generated by the property.
Orange Grove owns the California-based shopping center, which it
posted as collateral for the loan. As of September 1, 2011, it
owes more than $3.3 million to the bank.
The revised terms require Orange Grove to make "interest-only"
payments of $9,950 to American Continental for four months
starting September 1, 2011. Orange Grove is further required to
make "principal and interest payments" of $16,932 from January 1,
2012 to November 26, 2014, which is the maturity date for the
loan.
A full-text copy of the agreement is available without charge at
http://bankrupt.com/misc/OrangeGrove_StipAmContinental.pdf
About Orange Grove Service
La Verne, California-based Orange Grove Service, Inc., owns and
operates 2 "strip" shopping centers, the Lemon Creek in Walnut,
Calif., and the Fremont, in Alhambra, Calif. The Company filed
for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No.
10-21336) on March 25, 2010. Jerome S. Cohen, Esq., assists the
Debtor in its restructuring effort. The Debtor tapped Hahn Fife &
Company LLP, as its accountant to provide accounting services,
Michael R. Brown, Esq. as special litigation counsel (SWP
Litigation) and Paul T. Gough, Esq., as State Court Counsel (Aims
Academy Litigation). The Debtor disclosed $12,003,736 in assets
and $11,611,337 in liabilities as of the Chapter 11 filing.
ORANGE GROVE: Court to Hold Plan Confirmation Hearing on Sept. 27
-----------------------------------------------------------------
A hearing on the confirmation of the First Amended Plan of
Reorganization of Orange Grove Service, Inc., will be conducted on
Sept. 27, 2011, at 3:00 p.m.
The U.S. Bankruptcy Court for the Central District of California
approved the First Amended Disclosure Statement of the Debtor on
Aug. 17. 2011.
Only American Continental Bank filed an objection to the
Disclosure Statement and the Court determined that despite the
objection, the Disclosure Statement contained adequate information
pursuant to Section 1125(b) of the Bankruptcy Code.
Any party submitting a ballot on the plan and objection to
confirmation of the Plan had until Sept. 1, 2011, to do so.
As reported by The Troubled Company Reporter on June 10, 2011, the
Debtor's Plan designates 10 classes of Claims and Interests.
With the exception of Equity Interests in the Debtor under Class
10, all Classes are impaired and are entitled to vote. Secured
creditors Signal Walnut Partnership, LP (SWP), owed $7,555,609,
and American Continental Bank, owed $3,398,561, will each be paid
over a period of 60 months. Non-Priority Unsecured Claims - Non
Insiders, owed $351,677, will receive monthly payments of $5,861
for a period of 60 months. Non-Priority Unsecured Claims -
Insiders, owed $22,000, will receive monthly payments of $367 for
a period of 60 months. Equity Interests in the Debtor will retain
their interest under the Plan on the Effective Date.
The Debtor anticipates to have $92,099 available monthly for Plan
disbursements, after deducting operating expenses of $12,077 per
month from the anticipated monthly gross income of $104,176
derived from the 2 "strip" shopping centers and from income from
new leases. The gross income of $104,176 does not take into
account (1) the additional $101,250 from the Aim Academy
Litigation, (2) the Debtor's cash balance of $197,374 after
Effective Date payments, and (3) the potential $7,380 in rental
income from the 3,690 square foot vacant unit at the Fremont
Center.
A copy of the First Amended Disclosure Statement and Plan of
Reorganization is available at:
http://bankrupt.com/misc/orangegrove.DS.pdf
About Orange Grove Service
La Verne, California-based Orange Grove Service, Inc., owns and
operates 2 "strip" shopping centers, the Lemon Creek in Walnut,
Calif., and the Fremont, in Alhambra, Calif. The Company filed
for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No.
10-21336) on March 25, 2010. Jerome S. Cohen, Esq., assists the
Debtor in its restructuring effort. The Debtor tapped Hahn Fife &
Company LLP, as its accountant to provide accounting services,
Michael R. Brown, Esq. as special litigation counsel (SWP
Litigation) and Paul T. Gough, Esq., as State Court Counsel (Aims
Academy Litigation). The Debtor disclosed $12,003,736 in assets
and $11,611,337 in liabilities as of the Chapter 11 filing.
PACESETTER FABRICS: Can Use Cash Collateral Until Dec. 16
---------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
has approved on a final basis a stipulation between Pacesetter
Fabrics, LLC, and Cathay Bank on the use of the cash collateral.
As agreed by the parties, the "termination date" during which time
Debtor will be authorized to use the lender's cash collateral was
extended and will automatically expire at 5:00 p.m., California
time on Dec. 16, 2011, unless the Lender and the Debtor further
extend the expiration date by written agreement.
A copy of the cash collateral budget is available for free at:
http://bankrupt.com/misc/PACESETTER_cashcoll_secondstipulation.pdf
Cathay Bank is represented by:
Michael Gerard Fletcher, Esq.
Nicholas A. Merkin, Esq.
FRANDZEL ROBINS BLOOM & CSATO, L.C.
6500 Wilshire Boulevard, Seventeenth Floor
Los Angeles, California 90048-4920
Tel: (323) 852-1000
Fax: (323) 651-2577
E-mail: mfletcher@frandzel.com
nmerkin@frandzel.com
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.
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.
PATRIOT NATIONAL: Martin Noble Resigns as EVP and CLO
-----------------------------------------------------
Martin G. Noble resigned from his position as Executive Vice
President and Chief Lending Officer of Patriot National Bank, a
wholly-owned subsidiary of Patriot National Bancorp, Inc.
About Patriot National Bancorp
Stamford, Conn.-based Patriot National Bancorp, Inc. (NASDAQ:
PNBK) is the parent company of Patriot National Bank, a national
banking association headquartered in Stamford, Fairfield County,
in Connecticut. Patriot National Bank has 19 full service
branches, 16 in Connecticut and three in New York.
The Company reported a net loss of $15.40 million on
$35.61 million of total interest and dividend income for the year
ended Dec. 31, 2010, compared with a net loss of $23.88 million on
$42.97 million of total interest and dividend income during the
prior year.
The Company's balance sheet at June 30, 2011, showed $648.20
million in total assets, $596.94 million in total liabilities and
$51.26 million in total shareholders' equity.
PENINSULA GENERAL: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Peninsula General Nursing Home Corporation
dba Peninsula Center For Extended Care & Rehabilitation
50-15 Beach Channel Drive
Far Rockaway, NY 11691
Bankruptcy Case No.: 11-47985
Chapter 11 Petition Date: September 19, 2011
Court: U.S. Bankruptcy Court
Eastern District of New York (Brooklyn)
Judge: Joel B. Rosenthal
Debtor's Counsel: Deborah J. Piazza, Esq.
ABRAMS FENSTERMAN, ET AL.
630 Third Avenue, 5th Floor
New York, NY 10017
Tel: (212) 279-9200
Fax: (212) 279-0600
E-mail: dpiazza@abramslaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $10,000,001 to $50,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Todd Miller, chief restructuring
officer.
Affiliate that filed separate Chapter 11 petition:
Entity Case No. Petition Date
------ -------- -------------
Peninsula Hospital Center 11-47056 08/16/11
PENINSULA HOSPITAL: Files for Chapter 11 Bankruptcy Protection
--------------------------------------------------------------
Barbara Benson at Crain's New York Business reports that Peninsula
Hospital and its affiliate, Peninsula General Nursing Home Corp.
dba Peninsula Center for Extended Care & Rehabilitation, have
filed for Chapter 11 bankruptcy protection on Sept. 19, 2011.
They listed total assets of $34.6 million and $70.8 million in
liabilities as of May 31, 2011.
According to the report, on July 24, Peninsula, one of two
hospitals serving Far Rockaway, Queens, was set to close 90 days
after state officials confirmed a closure plan for the 200-bed
hospital. Some 1,000 workers were at risk of losing their jobs if
the closure plan was implemented.
The report says Peninsula's board spent the next weeks trying to
save the hospital. The board solicited proposals and interviewed
and negotiated with several groups interested in managing
Peninsula's operations and providing capital. Four groups
submitted proposals.
The report relates that the Peninsula board recently struck a deal
for the hospital and nursing home to be managed by an affiliate of
Revival Home Health Care, a for-profit, privately owned health
care group that provided an $8 million line of credit for the
hospital. The bankruptcy was a condition of the transaction. The
filing indicates that during the bankruptcy, the hospital and
nursing home will not change their current nonprofit status.
Todd Miller, Peninsula's chief restructuring officer as of
Sept. 1, 2011, said in his affidavit that Peninsula would break
even or become profitable "through a change in culture, marketing
strategies and by feeding off synergies with Revival's related
businesses." He added that the hospital and nursing home -- "with
a new management team and fresh capital" -- can boost revenue by
attracting more patients. About 80% of the Far Rockaway
population seeks health care services off the peninsula, and
primarily use the hospital only for emergency services.
The report says Mr. Miller said new management would try to tempt
residents with new offerings of cardiac services, more surgery
capabilities and improved oncology services. He said Revival
management believes "neither the hospital nor the nursing home
were aggressively managed in recent years and that implementation
of new procedures will result in significant savings, as well as
increased revenues."
The report notes Peninsula's payroll obligations, excluding
benefits, for the 30 days following the filing are $3.6 million,
with $2.8 million in payroll for the hospital, and the rest for
the nursing home. The hospital employs 134 doctors, four
administrators and 551 other workers. The nursing home employs
two doctors, two administrators, 36 registered nurses and 207
other workers.
On the Net: http://www.peninsulahospital.org/
PEREGRINE I: Oil-Drilling Vessel Headed to Bankruptcy Auction
-------------------------------------------------------------
Dow Jones' DBR Small Cap reports that the Peregrine I offshore
oil-drilling vessel is headed to the bankruptcy auction block,
where it will likely sell for less than the roughly $190 million
it owes, court papers say.
About Peregrine I
Headquartered in Cayman Islands, Peregrine I LLC, is an offshore
drilling company backed by a unit of General Electric Co.
Peregrine I, LLC, filed a Chapter 11 petition (Bankr. D. Del. Case
No. 11-11230) on April 25, 2011. Russell C. Silberglied, Esq., at
Richards, Layton & Finger, in Wilmington, Delaware, serves as
counsel. The Debtor estimated assets and debts of US$100 million
to US$500 million as of the Chapter 11 filing.
The Company said US$190 million of a US$259 million loan is
unpaid. The list of 20 largest unsecured creditors said that
WestLB AG, Banco Bilbao Vizcaya Argentaria, Dexia Credit Local,
DVB Bank, GE VFS Financing Holding, Inc., HSH Nordbank AG,
Santander Asset Finance PLC, and Sumitomo Mitsui Banking Corp.,
are owed money on account of the loan, although the percentage
held by each lender is not available at this time.
No official committee has been appointed in the Chapter 11 case.
WestLB AG, New York Branch, is represented in the case by:
Madlyn Gleich Primoff, Esq.
Mark F. Liscio, Esq.
KAYE SCHOLER LLP
425 Park Avenue
New York, NY 10022
E-mail: mprimoff@kayescholer.com
mliscio@kayescholer.com
- and -
Laurie Selber Silverstein, Esq.
POTTER ANDERSON & CORROON LLP
6th Floor, 1313 North Market Street
Wilmington, DE 19801
E-mail: lsilverstein@potteranderson.com
PITT PENN: May Access DIP Loan Proceeds Thru September
------------------------------------------------------
Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the
District of Delaware authorized Pitt Penn Holding Co., Inc., et
al., to use the remaining proceeds of their postbankruptcy
financing facilities through August and September 2011 in
conformity with a prepared budget.
The loan proceeds will be used to pay certain outstanding
administrative and professional claims, and operational expenses.
A copy of the Aug.-Sept. 2011 Budget is available for free at:
http://bankrupt.com/misc/PITTPENN_BudgetAugSept2011.pdf
The Debtors may exceed items budgeted for any category under the
Budget by 10% and may deviate from any other budget line item by
any amount provided that the Debtors do not exceed the total
amount budgeted for expenditures.
The Debtors' postpetition loan agreements are with Omtammot, LLC,
on the one hand, and with Omtammot II, LP, on the other hand.
The Court also approved the Debtors' Amended Loan Agreements with
the Lenders. The Amended Loan Agreements provide for the
extension of the maturity date of the Agreements through Dec. 31,
2012. However, the Court clarified, the claims of the Lenders
will have no priority over claims arising under Sections 105,
506(c), 1113 or 1114 of the Bankruptcy Code or over fees of the
Office of the U.S. Trustee or the Clerk of the Court. The
superpriority claims of Lender I and Lender II granted under the
Order will be pari passu with respect to each other, the Court
added.
Any loan expense provided for will be subject to review by the
Office of the U.S. Trustee.
About Industrial Enterprises
Pittsburgh, Pennsylvania-based Industrial Enterprises of America,
Inc., f/k/a Advanced Bio/Chem, Inc., filed for Chapter 11
protection (Bankr. D. Del. Case No. 09-11508) on May 1, 2009.
Pitt Penn Holding Co., Inc., and Pitt Penn Oil Co., LLC, each
filed voluntary petitions for Chapter 11 relief (Bankr. D. Del.
Case Nos. 09-11475 and 09-11476) on April 30, 2009. EMC
Packaging, Inc., filed a voluntary petition for Chapter 11 relief
(Bankr. D. Del. Case No. 09-11524) on May 4, 2009. Unifide
Industries, LLC, and Today's Way Manufacturing LLC, each filed a
voluntary petition for Chapter 11 relief (Bankr. D. Del. Case Nos.
09-11587 and 09-11586) on May 6, 2009.
PPH, PPO, EMC, Unifide, and Today's Way are each subsidiaries of
IEAM. The cases are jointly administered under Case No. 09-11475.
Christopher D. Loizides, Esq., at Loizides, P.A., in Wilmington,
Del., represents the Debtors as counsel. In its petition,
Industrial Enterprises disclosed total assets of $50,476,697 and
total debts of $17,853,997.
Industrial Enterprises originally operated as a holding company
with four wholly owned subsidiaries, PPH, EMC, Unifide, and
Today's Way. PPH, through its wholly owned subsidiary, PPO, was a
leading manufacturer, marketer and seller of automotive chemicals
and additives.
EMC's original business consisted of converting hydrofluorocarbon
gases R134a and R152a into branded private label refrigerant and
propellant products. Unifide was a leading marketer and seller of
automotive chemicals and additives. Today's Way manufactured and
packaged the products which were sold by Unifide.
PJ FINANCE: Files Plan to Fend Off Lender Torchlight
----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that PJ Finance Co. LLC, hoping to fend off what might be
the end of its reorganization effort at a hearing today, filed a
proposed Chapter 11 plan and explanatory disclosure statement this
week, arm in arm with the official creditors' committee. The
owner of 9,500 apartment units in 32 projects has been jousting
since the case began with secured lender Torchlight
Loan Services LLC.
According to the report, the Plan provides for these terms:
* The plan is to be financed with a fresh $10 million investment
by the owners.
* Torchlight two alternatives:
(A) Torchlight can elect to keep the full amount of a
$370 million secured claim on the properties. The new
debt would start off paying 3.5% interest and mature in
2019. In that event, unsecured creditors would split up
$5 million cash to cover $10 million in claims.
(B) Torchlight can elect to have a new secured debt equal to
whatever value the judge assigns to the collateral. The
new secured debt would start off paying 3% interest and
mature in 2022. In that case, unsecured creditors would
receive $4 million cash, and Torchlight would receive a
new unsecured note for 40% of its estimated $165 million
deficiency claim. The 40% is to represent the same
distribution received by unsecured creditors.
At a hearing today, Sept. 22, Torchlight, as special servicer for
$475 million in mortgage-backed securities, is scheduled to ask
the bankruptcy judge in Delaware to end the company's exclusive
right to propose a Chapter 11 plan. Torchlight will also beseech
the bankruptcy judge to end PJ Finance's use of the lenders' cash
collateral.
Torchlight had been seeking dismissal of the case, contending the
Chapter 11 filing was not made in good faith.
About PJ Finance
Chicago, Illinois-based PJ Finance Company, LLC, owns apartment
communities in the states of Arizona, Florida, Georgia, Tennessee
and Texas. PJ Finance owns or holds ownership interests in 32
apartment communities that collectively have more than 9,500
rentable units. It has 20 apartment locations in Texas, and the
remaining 12 in Arizona, Florida, Georgia and Tennessee. The day-
to-day operations of the portfolio are managed by a third party,
WestCorp Management Group One, Inc.
PJ Finance and various affiliates filed for Chapter 11 bankruptcy
protection (Bankr. D. Del. Lead Case No. 11-10688). Michelle E.
Marino, Esq., and Stuart M. Brown, Esq., at DLA Piper LLP (US), in
Wilmington, Delaware, serve as bankruptcy counsel. Kurtzman
Carson Consultants, LLC, is the Debtors' claims and notice agent.
An official committee of unsecured creditors has been named in the
case. Christopher A. Jarvinen, Esq., and Mark T. Power, Esq., at
Hahn & Hessen LLP, represent the committee as lead counsel.
Richard Scott Cobb, Esq., and William E. Chipman, Jr., Esq., at
Landis Rath & Cobb, in Wilmington, Del., serve as the committee's
local counsel.
The Debtors estimated total assets of at least $275 million
(estimated value of portfolio securing loan to Bank of America)
and total debts of at least $479 million ($475 million owed to
BofA, $4.4 million trade debt).
PJ Finance said it has a commitment for Gaia Real Estate
Investments LLC to invest $42 million and serve as the foundation
for a reorganization plan.
PRM DEVELOPMENT: U.S. Trustee to Receive Fees Until Case Closing
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
granted a motion by PRM Development LLC and its affiliated debtors
to revise a provision in its order which confirmed their Chapter
11 plan.
In a Sept. 12, 2011 decision, the Court granted the proposed
revision of the confirmation order to reflect that all quarterly
fees due to the United States Trustee will be paid until the
bankruptcy cases are closed, and not merely through the effective
date of the plan.
About PRM Development
Chicago, Illinois-based PRM Development, LLC, filed for Chapter 11
protection (Bankr. N.D. Tex. Case No. 10-35547) on Aug. 6, 2010.
Gerrit M. Pronske, Esq., at Pronske & Patel, P.C., assists the
Debtor in its restructuring effort. The Debtor estimated its
assets at $10 million to $50 million and debts at $1 million to
$10 million as of the Petition Date.
Affiliates Bon Secour Partners, LLC; PRS II, LLC; PRM Realty
Group, LLC; PMP II, LLC; Maluhia Development Group, LLC; Maluhia
One, LLC; Maluhia Eight, LLC; Maluhia Nine, LLC; and Long Bay
Partners, LLC, filed separate Chapter 11 petitions.
On Oct. 14, 2010, the Court jointly administered Econometric
Management, Inc., with the Debtors.
PVH CORP.: Moody's Upgrades Corporate Family Rating to 'Ba2'
------------------------------------------------------------
Moody's Investors Service upgraded PVH Corp.'s Corporate Family
Rating to Ba2 from Ba3. At the same time, Moody's upgraded the
company's various classes of secured debt to Ba1 from Ba2 and also
upgraded the company's senior unsecured notes due 2020 to Ba3 from
B2. The rating outlook remains positive.
RATINGS RATIONALE
"The upgrade of PVH's Corporate Family Rating primarily reflects
the company's progress deleveraging its balance sheet from the May
2010 debt financed acquisition of Tommy Hilfiger" said Moody's
Vice President Scott Tuhy. Since the acquisition, the company has
reduced debt by approximately $500 million and Moody's expects the
company will repay a further approximately $200 million of debt by
the end of this current fiscal year. At the same time the
integration of Tommy Hilfiger continues to proceed on plan and has
been smoothly integrated. PVH's other businesses continue to
perform well, notably its dress furnishing business as well as its
Calvin Klein segment. Moody's expects input cost pressures to
become more significant for PVH in the second half of 2011,
particularly in its heritage businesses which sell at more
moderate price points. Given the company's broad diversification
by product categories, geography and distribution channels Moody's
expects the company will be able to manage through rising input
costs on a consolidated basis.
The upgrade of the secured credit facilities rating to Ba1 from
Ba2 primarily reflects the upgrade of the Corporate Family Rating.
The two-notch upgrade of the senior unsecured rating to Ba3 from
B2 primarily reflects the upgrade of the corporate family rating
as well as the prepayment of a meaningful amount of secured debt
since the closing of the Tommy Hilfiger acquisition, which has
therefore improved recovery prospects for the unsecured notes.
The rating outlook remains positive as Moody's expects the company
to maintain positive trends in its businesses and to continue to
meaningfully deleverage. The positive outlook also contemplates
that the company's acquisitions will be limited in the near term
while it continues to deleverage.
Ratings could be upgraded if PVH is able to maintain overall
positive trends in performance and continue to deleverage while
managing through current macro economic conditions -- particularly
in Europe, which contributes a material portion of earnings.
Quantitatively, ratings could be upgraded if debt/EBITDA is
sustained below 3.6 times and interest coverage (EBITA/Interest)
remains above 3 times.
Ratings could be lowered if the company were to experience
negative trends in operating earnings or if financial policies
became more aggressive. Quantitatively, ratings could be
downgraded if debt/EBITDA were to be sustained above 4.25 or if
the company's good liquidity profile were to erode. The rating
outlook could be stabilized if the company is unable to make
meaningful further progress deleveraging such that debt/EBITDA was
expected to be sustained around the high 3 times range.
The following ratings were upgraded, and LGD assessments amended.
Corporate Family Rating to Ba2 from Ba3
Probability of Default Rating to Ba2 from Ba3
$1.9 billion Senior Secured Bank Credit Facilities to Ba1 (LGD 3,
31%) from Ba2 (LGD 3, 32%)
$100 million Senior Secured Debentures due 2023 to Ba1 (LGD 3,
31%) from Ba2 (LGD 3, 32%)
$600 million Senior Unsecured Notes due 2020 to Ba3 (LGD 5, 84%)
from B2 (LGD 5, 85%)
Senior unsecured shelf rating to (p) Ba3 from (p) B2
The principal methodology used in rating PVH Corp. was the Global
Apparel Industry Methodology published in May 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.
PVH Corp, headquartered in New York, NY designs, sources, markets,
licenses and distributes a broad line of dress shirts, neckwear
and sportswear under owned brands including Van Heusen, Calvin
Klein, IZOD, Arrow and Tommy Hilfiger and numerous licensed brands
including Geoffrey Beene, Kenneth Cole New York,Donald Trump
Signature Collection and numerous other licensees. LTM revenues
were $5.6 billion.
QIMONDA NA: Wins Confirmation of 6% to 11% Liquidating Plan
-----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Qimonda North America Corp. and affiliate Qimonda
Richmond LLC won approval of their Chapter 11 plan at the
scheduled confirmation hearing on Sept. 19. The plan was accepted
by all creditor classes entitled to vote.
According to the report, the disclosure statement predicts that
unsecured creditors with claims between $33 million and
$35 million would have a recovery between 6.1% and 11.1%. No
secured claims of significance remained. Unsecured creditors of
Qimonda Richmond were predicted to see a recovery between 8.7% and
13.4% on claims ranging between $390 million and $600 million.
Qimonda Richmond expects to have $72.7 million in cash when the
plan becomes effective in October, not including $40.4 million
being held aside if the challenge to the validity of a secured
claim succeeds. Qimonda North American expects to have
$21.1 million in cash when the plan takes effect.
About Qimonda AG
Qimonda AG (NYSE: QI) -- http://www.qimonda.com/-- is a leading
global memory supplier with a diversified DRAM product portfolio.
The Company generated net sales of EUR1.79 billion in financial
year 2008 and had -- prior to its announcement of a repositioning
of its business -- approximately 12,200 employees worldwide, of
which 1,400 were in Munich, 3,200 in Dresden and 2,800 in
Richmond, Va.
Qimonda AG commenced insolvency proceedings in a local court in
Munich, Germany, on Jan. 23, 2009. On June 15, 2009, QAG filed
a petition (Bankr. E.D. Va. Case No. 09-14766) for relief under
Chapter 15 of the U.S. Bankruptcy Code.
Qimonda North America Corp., an indirect and wholly owned
subsidiary of QAG, is the North American sales and marketing
subsidiary of QAG. QNA is also the parent company of Qimonda
Richmond LLC. QNA and QR sought Chapter 11 protection (Bankr.
D. Del. Case No. 09-10589) on Feb. 20, 2009. Mark D. Collins,
Esq., Michael J. Merchant, Esq., and Lee E. Kaufman, Esq., at
Richards Layton & Finger PA, in Wilmington Delaware; and Mark
Thompson, Esq., Morris J. Massel, Esq., and Terry Sanders, Esq.,
at Simpson Thacher & Bartlett LLP, in New York City, represent the
Debtors as counsel. Roberta A. DeAngelis, the United States
Trustee for Region 3, appointed seven creditors to serve on an
official committee of unsecured creditors. Jones Day and Ashby &
Geddes represent the Committee. In its bankruptcy petition,
Qimonda Richmond, LLC, estimated more than US$1 billion in assets
and debts. The information, the Debtors said, was based on
Qimonda Richmond's financial records which are maintained on a
consolidated basis with Qimonda North America Corp.
QUALTEQ INC: Has Interim Access Sterling Bank's Cash Until Oct. 6
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Qualteq, Inc., doing business as VCT New Jersey, Inc., et al., to
use Sterling National Bank's cash collateral.
Sterling Bank has consented to the Debtors' use of the cash
collateral to operate its business pending a final hearing which
is set for Oct. 6, 2011, at 3:30 p.m.
The Debtors may also use the cash collateral in an amount equal to
up to 10% more than the particular corresponding category in the
budget.
As adequate protection for any diminution in value of the lenders'
collateral, the Debtors will grant Sterling security interests in
and liens upon all the assets of the Debtors, and a superpriority
administrative expense claim status.
As further adequate protection, (i) all debtor and debtor-in-
possession accounts for the Debtors will be kept at sterling, with
the exception that VCT-NJ will maintain a payroll account and an
operating account a PNC Bank, with the payroll account funded from
Sterling DIP accounts only to the extent needed to fund VCT-NJ
payrolls.
About QualTeq Inc.
South Plainfield, New Jersey-based QualTeq, Inc., engages in the
design, manufacture, and personalization of plastic cards in the
United States. The company manufactures magnetic, contact, and
dual interface smart cards.
Qualteq Inc. and 17 affiliated companies filed for Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12572) on
Aug. 14, 2011. Eric Michael Sutty, Esq., and Jeffrey M. Schlerf,
Esq., at Fox Rothschild LLP, serve as local counsel to the
Debtors. K&L Gates LLP is the general bankruptcy counsel.
Scouler & Company is the restructuring advisors. QualTeq
estimated assets of up to $50 million and debts of up to
$100 million as of the Chapter 11 filing.
Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed four
unsecured creditors to serve on the Official Committee of
Unsecured Creditors of QualTeq, Inc.
QUALTEQ INC: Creative Okayed to Use Harris Bank's Cash Collateral
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized,
on an interim basis, Qualteq, Inc., doing business as VCT New
Jersey, Inc., et al., to use cash collateral in which Harris Bank
asserts an interest.
A final hearing to consider the cash collateral motion will be
held on Oct. 6, at 3:30 p.m. Objections, if any, are due
Sept. 29, at 4:00 p.m.
Debtors Creative Investments and Anar Real Estate would use the
cash collateral to fund its business operations until Oct. 15,
2011.
The Creative Entities may use the cash collateral in a amount
equal to up to 15% more than a particular corresponding category
in the budget.
As adequate protection, Creative Investments will grant Harris
Bank replacement liens upon all personal property assets of
Creative Investments, and a superpriority administrative expense
claim status.
About QualTeq Inc.
South Plainfield, New Jersey-based QualTeq, Inc., engages in the
design, manufacture, and personalization of plastic cards in the
United States. The company manufactures magnetic, contact, and
dual interface smart cards.
Qualteq Inc. and 17 affiliated companies filed for Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12572) on
Aug. 14, 2011. Eric Michael Sutty, Esq., and Jeffrey M. Schlerf,
Esq., at Fox Rothschild LLP, serve as local counsel to the
Debtors. K&L Gates LLP is the general bankruptcy counsel.
Scouler & Company is the restructuring advisors. QualTeq
estimated assets of up to $50 million and debts of up to
$100 million as of the Chapter 11 filing.
Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed four
unsecured creditors to serve on the Official Committee of
Unsecured Creditors of QualTeq, Inc.
RAY ANTHONY: Ordered File Plan by Oct. 28 or Face Case Dismissal
----------------------------------------------------------------
Judge Thomas P. Agresti of the U.S. Bankruptcy Court for the
Western District of Pennsylvania has ordered Ray International,
Inc., to file a Plan of Reorganization or move to dismiss this
Chapter 11 Case on or before Oct. 28, 2011.
About Ray Anthony International
West Mifflin, Pennsylvania-based Ray Anthony International, Inc.,
filed for Chapter 11 bankruptcy protection (Bankr. W.D. Pa. Case
No. 10-26576) on Sept. 15, 2010. The Debtor estimated assets
and debts at $50 million to $100 million as of the Chapter 11
filing. Affiliate Ray G. Anthony filed a separate Chapter 11
petition (Bankr. W.D. Pa. Case No. 10-26552) on Sept. 14, 2010.
REDCO DEV'T: Confirmation & Plan Outline Hearing Set for Oct. 4
---------------------------------------------------------------
The hearing on the Disclosure Statement and confirmation of the
Second Amended Chapter 11 Plan of Redco Development Co., LLC, at
which testimony will be received if offered and admissible, will
be held on Oct. 4, 2011, at 10:00 a.m.
The Debtor filed its Second Amended Plan and Disclosure Statement
on Aug. 2, 2011, specifying its settlement with RA Global LLC.
The Debtor specifically disclosed that it negotiated a settlement
to resolve two claims asserted by RA Global. Under the
settlement, the Debtor transferred its interests in the Clearview
Project as well as its 1/2 interest in the Good-Nite Inn to RA
Global in exchange for a satisfaction of RA Global's claims and a
$165,000 payment. The Debtor also received a release of its
guaranty to the obligation to South Valley Bank.
The U.S. Bankruptcy Court for the District of Oregon conditionally
approved the Disclosure Statement on Aug. 11, subject to the
Court's consideration of objections at the scheduled Oct. 4
hearing. For the Court to consider such objections, the objecting
party must have timely attempted to obtain the desired information
from the plan proponent without success.
Objections to the Disclosure Statement must be in writing, setting
forth the specific grounds and details of the objection, and must
be filed no less than seven days before the Oct. 4 hearing.
Complaints objecting to the Debtor's full discharge under Section
1141(d)(3) of the Bankruptcy Code must be filed no later than Oct.
4.
A summary of the ballots by class and a report of administrative
expenses must be filed with the Bankruptcy Clerk's office no less
than three business days before the Oct. 4 hearing.
As reported by The Troubled Company Reporter on March 18, 2011,
the Plan provides that all of Redco Development creditors will
be paid in full. Creditors holding secured claims will retain
their security and will be paid either monthly or when a $4
million note is paid to Redco Development. The $4 million note
due June 15, 2012, was guaranteed by Guy Farthing and Steve
Morgan, who purchased Redco Development's 25% stake in Northgate
LLC for $5 million. It is considered the company's most valuable
asset. Redco Development's current owner will continue to manage
its operations and use the balance remaining when the note is paid
and excess revenue to make annual payments until unsecured
creditors are paid in full, according to the plan.
Full-text copies of the Aug. 2 Plan and Disclosure Statement,
including certain exhibits, are available for free at:
http://bankrupt.com/misc/REDCO_PlannDSAug2.PDF
About Redco Development Co., LLC
Medford, Oregon-based Redco Development Co., LLC, filed for
Chapter 11 bankruptcy protection (Bankr. D. Ore. Case No. 10-
64783) on Aug. 3, 2010. James Ray Streinz, Esq., who has an
office in Portland, Oregon, assists the Debtor in its
restructuring effort. The Debtor estimated its assets at
$10 million to $50 million and debts at $1 million to $10 million.
RENAISSANCE LEARNING: Moody's Assigns 'B2' CFR; Outlook Stable
--------------------------------------------------------------
Moody's Investors Service assigned a B2 corporate family rating
and probability of default rating to Raphael Acquisition Corp., a
new entity formed by funds advised by Permira Advisers LLC and its
affiliates that will merge into Renaissance Learning, Inc.
("Renaissance" - the surviving entity) at transaction closing.
Moody's also assigned B1 ratings to Raphael Acquisition Corp.'s
proposed first lien senior secured credit agreement, consisting of
a $20 million revolving credit facility and $175 million term
loan. The ratings outlook is stable. This is a first time rating
for the company.
Proceeds from the proposed first lien term loan combined with a
$75 million second lien term loan (unrated) and an approximately
$197 million common equity contribution from the sponsor will be
used to fund the acquisition of Renaissance and to repay existing
debt for total consideration of approximately $479 million. The
transaction is expected to close in October.
Ratings assigned:
Proposed $20 million first lien senior secured revolving credit
facility due 2016 at B1 (LGD3, 34%);
Proposed $175 million first lien senior secured term loan due 2017
at B1 (LGD3, 34%).
Not rated:
Proposed $75 million second lien senior secured term loan due
2018.
RATINGS RATIONALE
Renaissance's B2 corporate family rating reflects the company's
small scale, high pro forma leverage with debt to EBITDA in excess
of 6.0 times (based on Moody's standard analytical adjustments),
modest interest coverage, and balance sheet debt that is well in
excess of revenues. The rating also considers the company's
reliance on one product - Accelerated Reader - for a large portion
of its revenues, competition from large scale well-capitalized
companies, and its susceptibility to school budget cuts. In
Moody's view, the company's high pro forma leverage reduces its
financial flexibility as well as its ability to withstand changes
to the competitive environment. Notwithstanding these risks, the
rating derives support from Renaissance's business position as a
provider of computer-based assessment technology in a fragmented
market, a large-base of active school customers, a material
proportion of recurring subscription-based revenues, and its
ability to grow the topline despite weak macroeconomic conditions
and the associated pressures on school budgets. The rating also
derives support from the company's good operating margins and
expectations for positive free cash flow generation supported by
modest capital expenditure requirements.
The stable outlook reflects Moody's expectation that Renaissance
will sustain business momentum and continue to grow new orders
despite continued school budgetary pressures while applying free
cash flow to debt reduction such that debt to EBITDA approaches or
is reduced below 6.0 times, EBITDA less capex to interest remains
above 1.5 times, and free cash flow to debt is in the high single-
digit range over the next twelve months.
The ratings could be pressured if the challenging operating
environment causes order trends to weaken such that Renaissance's
debt to EBITDA increases above 6.5 times and/or EBITDA less capex
to interest falls below 1.5 times. Debt financed acquisitions
and/or shareholder enhancement activities could also pressure the
ratings.
Moody's could upgrade Renaissance's ratings if it organically
grows its scale and improves its business diversity while
sustaining debt to EBITDA below 4.0 times, EBITDA less capex
coverage of interest expense above 2.0 times, and free cash flow
to debt in excess of 10%.
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 Renaissance Credit
Opinion published on Moodys.com.
The principal methodology used in rating Renaissance Learning,
Inc. 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.
Renaissance Learning, Inc. is a provider of computer-based
assessment technology and school improvement programs for pre-
kindergarten through senior high (pre-K-12) schools and districts.
Renaissance reported revenues of approximately $136 million for
the twelve months ended June 30, 2011.
RENAISSANCE SURGICAL: To Employ XRoads as Restructuring Advisor
---------------------------------------------------------------
Renaissance Surgical Arts At Newport Harbor LLC seeks approval of
the U.S. Bankruptcy Court for the Central District of California
to employ XRoads Solutions Group LLC as its financial and
restructuring advisor effective July 21, 2011.
Renaissance Surgical has selected XRoads Solutions because of the
firm's extensive experience and knowledge in restructuring, in
advising companies in Chapter 11 cases and in assisting them in
negotiations with their creditors, according to its lawyer,
Michael Good, Esq., at South Bay Law Firm, in Torrance,
California.
Adam Meislik, a principal of XRoads Solutions, or a suitable
replacement to be determined by the firm and Renaissance Surgical
will serve as the chief restructuring officer.
Among the services to be provided by XRoads Solutions include
negotiating and executing a plan of reorganization; assisting
Renaissance Surgical in implementing any approved capital
structure; evaluating and amending its business plan; and assuming
the leadership role for the design and implementation of new
management and financial reporting methodologies for Renaissance
Surgical's business.
The firm will also provide bankruptcy compliance and reporting
services, which include assisting Renaissance Surgical's lawyers
and other advisors in preparing preparing initial reporting
package for the United States Trustee, preparing schedules of
assets and liabilities, maintaining and administering claims
database, among other things.
XRoads Solutions will be paid an hourly rate of $350 per personnel
for its financial advisory services and an hourly rate of $100 per
person for administrative and billing services.
Meanwhile, in exchange for its bankruptcy compliance and reporting
services, the firm will be paid at these hourly rates:
Principal/Managing Director $350
Senior Managing Consultant $300
Senior Consultant $275
Consultant $250
Technology Programming $200
Project Specialist $125
Admin, Billing, Programming & Tech
Support Services $100
Clerical-data entry $40
XRoads Solutions will earn a performance fee and incentive fee
for restructurings consummated during the term of its employment
or within the 12 months thereafter that involves any party with
whom the firm or Renaissance Surgical had bona fide discussions
concerning restructurings or sale transaction during the course of
the firm's employment.
In a declaration, Mr. Meislik assures that XRoads Solutions does
not have interest adverse to the interest of the estate and that
the firm is a "disinterested person" under Section 101(14) of the
Bankruptcy Code.
About Renaissance Surgical Arts at Newport Harbor
An involuntary Chapter 11 petition was filed against Costa Mesa,
California-based Renaissance Surgical Arts at Newport Harbor
(Bankr. C.D. Calif. Case No. 11-19749) on July 11, 2011. On
Aug. 2, 2011, the Court entered an order for relief. Judge Erithe
A. Smith presides over the case.
The petitioners are Dr. Gary Reiter, allegedly owed $907,515;
Vascular Resources Inc., allegedly owed $2,462,492; and Anthony C.
Pings, allegedly owed $266,169. The Petitioners are represented
by Robert P. Goe, Esq., at Goe & Forsythe, LLP.
RENAISSANCE SURGICAL: Court Grants Relief Under Chapter 11
----------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
issued an order granting Renaissance Surgical Arts at Newport
Harbor LLC relief under Chapter 11 of the Bankruptcy Code.
An involuntary Chapter 11 petition was filed against Costa Mesa,
California-based Renaissance Surgical Arts at Newport Harbor
(Bankr. C.D. Calif. Case No. 11-19749) on July 11, 2011. On
Aug. 2, 2011, the Court entered an order for relief. Judge Erithe
A. Smith presides over the case.
The petitioners are Dr. Gary Reiter, allegedly owed $907,515;
Vascular Resources Inc., allegedly owed $2,462,492; and Anthony C.
Pings, allegedly owed $266,169. The Petitioners are represented
by Robert P. Goe, Esq., at Goe & Forsythe, LLP.
RIO RANCHO: Has Stipulation for Cash Collateral Use Until Sept. 30
------------------------------------------------------------------
Rio Rancho Super Mall, LLC, and Wilshire State Bank have entered
into a fifth stipulation authorizing the Debtor to use cash
collateral through Sept. 30, 2011, to make payments for post-
petition operating expenses, in accordance with an amended budget.
The Debtor may not exceed in any period any budgeted line item in
excess of 15% without prior written consent of WSB. Any budget
savings in one month may be carried over to subsequent months.
As adequate protection for the Debtor's use of cash collateral,
the Debtor will, among others, make monthly payments of $35,000 to
the Debtor. WSB is also granted a post-petition interest in and
replacement lien upon all of the Debtor's post-petition
collateral. To the extent that the adequate protection is
insufficient, WSB will also have a superpriority administrative
expense claim pursuant to Section 507(b) of the Bankruptcy Code.
As of the Petition Date, the Debtor was indebted to WSB pursuant
to the terms and conditions of the Noted dated as of April 6,
2006, in the original principal amount of $10,422,000. As of the
Petition Date, WSB was owed $9,812,503.44 in principal amount,
plus accrued interest of $172,889.89, late charges of $10,000, and
unpaid fees, including but not limited to, court costs,
foreclosure fees and attorney's fee to be determined later.
A copy of the Fifth Stipulation allowing the use of cash
collateral is available for free at http://is.gd/a3MldF
Moreno Valley, California-based Rio Rancho Supermall, LLC, owns,
manages and operates a commercial property known as the Rio Rancho
Super Mall that is utilized as an indoor swap-meet and retail
mall. It filed for Chapter 11 bankruptcy protection (Bankr. C.D.
Calif. Case No. 11-16835) on March 2, 2011. Thomas E. Kent, Esq.,
at Lee & Kent, in Los Angeles, California, serves as the Debtor's
bankruptcy counsel. The Debtor disclosed $7,691,584 in assets and
$12,253,866 in debts as of the Chapter 11 filing.
RIVER ISLAND: Hearing on Termination of Cash Use Set for Oct. 6
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida
will convene a hearing on Oct. 6, 2011, at 9:30 p.m., to consider
Creditor Gibraltar Private Bank & Trust Company's motion.
Secured Creditor asked the Court to (a) terminate the Debtor's
authority to use Gibraltar's cash collateral by Dec. 31, 2011; and
(b) authorize and direct the Debtor to immediately distribute
$426,805 of Gibraltar's cash collateral, the sales proceeds of
the Debtor's Mercedes home sale, to pay down Gibraltar's secured
claim, leaving a $219,500 cash collateral balance in the Debtor's
debtor-in-possession account to fund its Court-approved cash
collateral budget through Dec. 31, 2011.
The Debtors admits that as of Aug. 25, 2011, the principal
indebtedness secured by Gibraltar's mortgages is at least
$8,484,808 plus accrued and accruing interest.
Secured creditor asserts that if the $646,305 in the DIP Account
as of July 31, 2011, is used by the Debtor until Dec. 31, 2011,
consistent with the $43,900 cash collateral budget, which
authorizes the Debtor to pay a total of $219,500 for five months,
the remaining balance of Gibraltar's cash collateral in the DIP
Account will be $426,805 on Dec. 31, 2011. Gibraltar also seeks
the entry of an order authorizing and directing the Debtor to
immediately pay Gibraltar $426,805 remaining DIP Account balance
for partial payment of Gibraltar's secured claim.
Gibraltar does not consent to the Debtor's use of its cash
collateral after Dec. 31, 2011.
About River Island Farms, Inc.
Fort Lauderdale, Florida-based River Island Farms, Inc., filed for
Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No. 11-
15410) on Feb. 28, 2011. Martin L. Sandler, Esq., at Sandler &
Sandler By M. L. Sandler, P.A., serves as the Debtor's bankruptcy
counsel. The Debtor disclosed $23,974,222 in assets and
$14,467,808 in liabilities as of the Chapter 11 filing.
ROCHA DAIRY: Court Approves Deagle Ames as Accountant
-----------------------------------------------------
The U.S. Bankruptcy Court for the District of Idaho authorized
Rocha Dairy LLC aka Rocha Farms to employ Deagle, Ames & Co. as
its accountant.
The firm will:
a) establish a bookkeeping system that complies with the order
of this Court in relationship to accounting procedures;
b) prepare and file Debtor's income tax returns for current and
previous years, and preparing any returns required to be
filed during the pendency of this Chapter 11 bankruptcy;
and
c) perform any other accounting services necessary or required
by the debtor in the operation of its business to ensure
compliance with the operating guidelines established for a
Chapter 11 bankruptcy.
The firm will charge $192 per hour for accounting services, and
between $100 and $112 per hour for bookkeeping/data entry
services.
The Debtor assured the Court that the firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
About Rocha Dairy
Based in Wendell, Idaho, Rocha Dairy, LLC, aka Rocha Farms, filed
for Chapter 11 bankruptcy (Bankr. D. Idaho Case No. Case No. 11-
40836) on May 25, 2011. Judge Jim D. Pappas presides over the
case. Lawyers at Robinson, Anthon & Tribe serve as bankruptcy
counsel.
In its petition, the Debtor estimated $10 million to $50 million
in assets and $1 million to $10 million in debts. The petition
was signed by Elcidio Rocha, member.
RYLAND GROUP: Reports Net Unit Orders for July and August
---------------------------------------------------------
Ryland Homes announced that unit orders, net of cancellations,
were 336 and 301 in July and August of 2011, respectively,
compared to 257 and 254 for July and August of 2010. The order
improvement was largely driven by a 21% year-over-year increase in
active community count to start the quarter.
About Ryland Group
Headquartered in Calabasas, California, The Ryland Group, Inc.
(NYSE: RYL) -- http://www.ryland.com/-- is one of the nation's
largest homebuilders and a leading mortgage-finance company.
Since its founding in 1967, Ryland has built more than 285,000
homes and financed more than 240,000 mortgages. The Company
currently operates in 15 states and 19 homebuilding divisions
across the country and is listed on the New York Stock Exchange
under the symbol "RYL."
The Company's balance sheet at June 30, 2011, showed $1.57 billion
in total assets, $1.05 billion in total liabilities and $513.79
million in total equity.
* * *
As reported by the Troubled Company Reporter on June 21, 2010,
Fitch Ratings has affirmed Ryland Group, Inc.'s ratings -- Issuer
Default Rating at 'BB'; and Senior unsecured debt at 'BB'. The
Rating Outlook has been revised to Stable from Negative.
Ryland Group carries Moody's "Ba3" corporate family rating, "Ba3"
probability of default rating, "Ba3" senior unsecured notes
rating, and "SGL-2" speculative grade liquidity rating. Ryland
Group carries Standard & Poor's Ratings Services' 'BB-' corporate
credit and senior unsecured note ratings.
In the Sept. 14, 2011, edition of the TCR, Fitch Ratings has
downgraded its ratings for Ryland Group, Inc., including the
company's Issuer Default Rating (IDR) to 'BB-' from
'BB'. The Rating Outlook has been revised to Negative from
Stable.
The downgrade in RYL's IDR and senior unsecured ratings reflects
the still very challenging U.S. housing market which is likely
bouncing on the bottom, following a massive cyclical correction.
With the recent softening in the economy and lowered economic
growth expectations for 2011 and 2012, the environment may at best
only support a relatively modest recovery in housing metrics over
the next year and a half. Moreover, RYL's underperformance
relative to its peers in certain operational and financial
categories during recent quarters, and its slimming cash position
penalizes the ratings and influences the Outlook.
SINOTECH ENERGY: Receives NASDAQ Delisting Notice
-------------------------------------------------
SinoTech Energy has received a letter dated September 15, 2011
from The NASDAQ Stock Market LLC, stating that continued listing
of the Company's securities on NASDAQ is no longer warranted.
NASDAQ staff members, exercising their discretionary authority,
have determined to delist the Company's securities based on public
interest concerns under NASDAQ Listing Rule 5101 and the Company's
failure to provide NASDAQ with certain information requested by
NASDAQ on a timely basis, as required by NASDAQ Listing Rule
5250(a). Trading in the Company's stock has been halted by NASDAQ
since August 16, 2011.
Pursuant to the NASDAQ letter, the Company has until September 22,
2011 to request a hearing and appeal NASDAQ's determination. If
NASDAQ Hearings Department does not receive such a request from
the Company by September 22, 2011, the Company expects that a Form
25-NSE will be filed with the Securities and Exchange Commission,
which will remove the Company's securities from listing and
registration on NASDAQ. The Company currently intends to request
a hearing and appeal NASDAQ's determination before the September
22, 2011 deadline.
SPEARMAN FOOD: Dist. Ct. Says Appeal Over Elkins' Engagement Moot
-----------------------------------------------------------------
The U.S. District Court for the Western District of North
Carolina, in Asheville, says an appeal by the U.S. Bankruptcy
Administrator for the Western District of North Carolina over the
engagement of H. Trade Elkins, Esq., in the bankruptcy cases of
Joe D. Spearman Jr., Joe D. Spearman Sr., Spearman Furniture,
Inc., and Spearman Food Distributors Inc. may be moot. The
Administrator had argued that the entangled ownership positions
and debt load among Jr., Sr., and the corporate debtor-entities
rendered it impossible for Elkins to be a disinterested person
representing interests which were not adverse to Spearman Food.
While the appeal has been pending, the various bankruptcy
proceedings continued, including conversion of the cases to
Chapter 7 and consolidation. After the conversions and
consolidation, the individual debtors made significant concessions
to creditors which, the District Court notes, appear to have
rendered the appeal moot. The District Court directs the
Administrator to either move for dismissal of the appeal or file
an explanation why the appeal has not been rendered moot. A copy
of District Judge Martin Reidinger's Sept. 16, 2011 Order is
available at http://is.gd/kwfWiCfrom Leagle.com.
About Spearman
Flat Rock, North Carolina-based Spearman Food Distributors, Inc.,
filed for Chapter 11 bankruptcy (Bankr. W.D.N.C. Case No. 10-
10409) on April 14, 2010. Judge George R. Hodges presided over
the case. H. Trade Elkins, Esq. -- htelkins@prodigy.net -- at
Elkins and Elkins, served as Spearman Food's counsel. Spearman
Food estimated $1 million to $10 million in assets and debts.
Spearman Food's president Joe D. Spearman Jr. signed the petition.
Separate Chapter 11 petitions were also filed on April 14, 2010,
by Joe D. Spearman, Jr. (Bankr. W.D.N.C. Case No. 10-10412); Jr.'s
father and the Vice-President of Food, Joe D. Spearman, Sr.
(Bankr. W.D.N.C. Case No. 10-10411); and Spearman Furniture, Inc.
(Bankr. W.D.N.C. Case No. 10-10410).
The Chapter 11 proceedings were filed to preclude the foreclosure
proceedings initiated by Carolina First Bank against the three
parcels of real estate owned by Jr. and Sr. and which had been
used to collateralize a business loan to Food by the bank. The
loan had also been personally guaranteed by Jr. and Sr. The three
parcels of real estate: (1) Lot 12, Macedonia Lakes, a lake house,
title to which was held by Sr.; (2) the furniture store, title to
which was held by Sr.; and (3) the business location for Food,
title to which was held by Jr. Jr. owns 18% of the stock in Food
while Sr. owns 82% of the company's stock. Food's facility is
leased from Jr. who owns the real estate. At the same location,
Jr. leases space to Asheville Packing, Inc., a business owned by
Jr. Food also owns a $7,500 security deposit paid to Duke Power
by Sr. Two state court judgments were shown against Food and Jr.
as co-debtors: one by Enmark Stations, Inc. and a second by Arvon
Funding LLC.
Mr. Elkins also represented the individual debtors.
The Hon. George R. Hodges converted the Chapter 11 proceedings to
Chapter 7 on April 21, 2011. Langdon Cooper was appointed as
Chapter 7 trustee to operate Food's business. The Chapter 7
Trustee also employed Mr. Elkins as his attorney.
The Chapter 7 proceeding for Furniture moved apace with the
Trustee's Final Report being filed on May 23, 2011. On Sept. 15,
2011, the Final Decree closing Furniture's Chapter 7 case was
entered.
SHENGDATECH INC: Seeks to Hire Greenberg Traurig as Counsel
-----------------------------------------------------------
ShengdaTech, Inc., asks permission from the U.S. Bankruptcy Court
for the District of Nevada to employ Greenberg Traurig, LLP, as
its primary bankruptcy counsel nunc pro tunc to the Petition Date.
As counsel to the Debtor, Greenberg Traurig will advise the Debtor
of its rights and obligations and performance of its duties during
administration of the Chapter 11 case.
The firm is expected to attend meetings and negotiations with
other parties-in-interest in the case; take all necessary action
to protect and preserve the Debtor's estate; negotiate and prepare
a plan of reorganization, disclosure statement and related papers;
represent the Debtor in all proceedings before the Bankruptcy
Court or other courts; and prepare on behalf of the Debtor all
necessary applications, motions, answers, orders and other
documents.
The firm will also be advising the Debtor with respect to (i) the
subpoena issued by the U.S. Securities and Exchange Commission,
(ii) certain Chinese law-related issues, and (iii) the Debtor's
efforts in the British Virgin Islands and China to safeguard
assets.
Greenberg Traurig's current hourly rates are:
Shareholders $340 to $935
Of Counsel/Special Counsel $360 to $935
Associates $175 to $610
Legal Assistants/Paralegals $60 to $310
The Greenberg Traurig professionals and their hourly rates are:
Keith Shapiro Shareholder $935
Nancy A. Peterman Shareholder $850
Bob L. Olson Shareholder $670
Rachel Ehrlick Albanese Of counsel $670
Miriam G. Bahcall Shareholder $625
George Qi Shareholder $525
Paul Ferak Shareholder $495
Burke A. Dunphy Associate $445
Aviram Fox Associate $395
Michael Cedillos Associate $300
Carla Greenberg Paralegal $150
The Firm has agreed to discount the fees charged to the Debtor by
10% solely for purposes of the Chapter 11 case and consistent with
the parties' prepetition retention agreement. The Firm will also
charge the Debtors for reasonable and necessary expenses in
relation to the retention.
In connection with the Firm's pre-bankruptcy representation of the
Debtor, the Firm received payments prior to the Petition Date
aggregating $735,854, of which $350,000 was in the form of an
advance payment retainer. After application of the Advance
Payment Retainer, the Firm was owed $43,007. Upon court approval,
the Firm will write off this amount and waive the related claim
against the Debtor.
The Debtor also seeks Court authority to pay the Firm a $300,000
postpetition advance payment retainer for the anticipated legal
services.
Nancy A. Peterman, Esq., a Greenberg Traurig professional, assures
the Court that her firm does not hold or represent any interest
adverse to the Debtor and thus, is a "disinterested person" as
that term is defined under Section 101(14) of the Bankruptcy Code.
The Firm disclosed that from time to time, it has represented
certain of the Debtor's creditors and other parties-in-interest on
unrelated matters.
About ShengdaTech
Headquartered in Shanghai, China, ShengdaTech, Inc., makes nano
precipitated calcium carbonate for the tire industry.
ShengdaTech converts limestone into nano-precipitated calcium
carbonate (NPCC) using its proprietary and patent-protected
technology. NPCC products are increasingly used in tires, paper,
paints, building materials, and other chemical products. In
addition to its broad customer base in China, the Company
currently exports to Singapore, Thailand, South Korea, Malaysia,
India, Latvia and Italy.
ShengdaTech sought Chapter 11 bankruptcy protection from creditors
(Bankr. D. Nev. Case No. 11-52649) on Aug. 19, 2011, in Reno,
Nevada, in the United States.
The Shanghai-China based company said in its bankruptcy filing it
would fire all of its officers and restructure to try to recover
from an accounting scandal.
The Company disclosed US$295.4 million in assets and US$180.9
million in debt as of Sept. 30, 2011.
The Company's legal representative in its Chapter 11 case is
Greenberg Traurig, LLP. The Board of Directors Special
Committee's legal representative is Skadden, Arps, Slate, Meagher
& Flom LLP. On Aug. 23, 2011, the Court entered an interim order
confirm the Board of Directors Special Committee's appointment of
Michael Kang as the Debtor's chief restructuring officer.
Alvarez & Marsal North America, LLC, is the Company's chief
restructuring officer.
SHENGDATECH INC: To Tap Lionel Sawyer as Nevada Special Counsel
---------------------------------------------------------------
ShengdaTech, Inc., seeks to hire Lionel Sawyer & Collins as its
special counsel, acting through the special committee of the Board
of Directors of the Debtor, nunc pro tunc to Aug. 19, 2011.
Lionel Sawyer will act as Nevada counsel to assist special counsel
Skadden, Arps, Slate, Meager and Flom as necessary to continue the
investigation into accounting irregularities that gave rise to the
Chapter 11 case and to represent the Special Committee in
connection with the case and to provide advice on matters related
to Nevada law.
Lionel Sawyer has informed the Debtor that it will take all
appropriate steps to avoid unnecessary and wasteful duplication of
efforts by any other professionals retained in the Debtor's case.
The Debtor proposes to pay Lionel Sawyer in accordance with the
firm's hourly rates:
Attorneys $185 to $650
Law Clerks $140
Paralegals $160 to $200
The Debtor will also pay the Firm for reasonable and necessary
expenses incurred.
The parties' engagement agreement provides for a $25,0000 retainer
to cover projected fees, charge and disbursements.
Jennifer A. Smith, Esq., assures the Court that her firm does not
hold or represent any interest adverse to the Debtor, its
creditors, or any other party-in-interest in the case, with
respect to the matters on which the firm is to be employed.
About ShengdaTech
Headquartered in Shanghai, China, ShengdaTech, Inc., makes nano
precipitated calcium carbonate for the tire industry.
ShengdaTech converts limestone into nano-precipitated calcium
carbonate (NPCC) using its proprietary and patent-protected
technology. NPCC products are increasingly used in tires, paper,
paints, building materials, and other chemical products. In
addition to its broad customer base in China, the Company
currently exports to Singapore, Thailand, South Korea, Malaysia,
India, Latvia and Italy.
ShengdaTech sought Chapter 11 bankruptcy protection from creditors
(Bankr. D. Nev. Case No. 11-52649) on Aug. 19, 2011, in Reno,
Nevada, in the United States.
The Shanghai-China based company said in its bankruptcy filing it
would fire all of its officers and restructure to try to recover
from an accounting scandal.
The Company disclosed US$295.4 million in assets and US$180.9
million in debt as of Sept. 30, 2011.
The Company's legal representative in its Chapter 11 case is
Greenberg Traurig, LLP. The Board of Directors Special
Committee's legal representative is Skadden, Arps, Slate, Meagher
& Flom LLP. On Aug. 23, 2011, the Court entered an interim order
confirm the Board of Directors Special Committee's appointment of
Michael Kang as the Debtor's chief restructuring officer.
Alvarez & Marsal North America, LLC, is the Company's chief
restructuring officer.
SMART ONLINE: Board Elects Robert Brinson as Independent Director
-----------------------------------------------------------------
The Smart Online, Inc., Board of Directors expanded the size of
the Board by one member, from three to four, and elected Robert M.
Brinson, Jr., age 47, as an independent member of the Board. Mr.
Brinson was also appointed as chair of the Board's newly-
established Innovation Committee.
From 2005 until 2007, Mr. Brinson was a board member and Chief
Technology Officer of IntelliScience Corporation, a developer of
intelligent multi-modal image analysis systems and software. In
2007, Mr. Brinson became a board member and Chief Technology
Officer of IP Tank, LLC. Mr. Brinson is currently the Chief
Visionary Officer of Apokalyyis, Inc., a developer of consultative
technology solutions and serves as Chief Technology Officer of
Concept Connections and Affirm ID, LLC. Mr. Brinson serves on the
boards of directors of Apokalyyis, Inc., and iissee, LLC, a
company specializing in local search solutions. He is also a
self-employed technology consultant.
For his service as a director, Mr. Brinson will be entitled to the
compensation the Company generally provides to its non-employee
directors.
Mr. Brinson will also be able to participate in the Company's 2004
Equity Compensation Plan. Upon his election, Mr. Brinson received
an option to purchase 20,000 shares of the Company's common stock
at an exercise price of $1.35 per share. This option will vest
quarterly through the one-year anniversary of the grant. Mr.
Brinson will also receive a monthly fee in the amount of $1,500
for his service on the Board.
Mr. Brinson will be compensated separately at the rate of $10,500
per month for work performed as chair of the Innovation Committee.
Mr. Brinson and the Company will agree as to the duration of this
arrangement with the Company.
Mr. Brinson has no family relationships with any director or
executive officer of the Company, and there are no transactions in
which Mr. Brinson has an interest requiring disclosure under Item
404(a) of Regulation S-K.
About Smart Online
Headquartered in Durham, North Carolina, Smart Online, Inc. (OTC
BB: SOLN) -- http://www.smartonline.com/-- develops and markets
software products and services targeted to small businesses that
are delivered via a Software-as-a-Service (SaaS), or SaaS, model.
The Company also provides Web site consulting services, primarily
in the e-commerce retail industry products and services.
The Company reported a net loss of $3.95 million on $1.03 million
of total revenue for the year ended Dec. 31, 2010, compared with a
net loss of $9.54 million on $1.42 million of total revenue during
the prior year.
The Company's balance sheet at June 30, 2011, showed $1.28 million
in total assets, $22.34 million in total liabilities and a $21.06
million total stockholders' deficit.
As reported by the TCR on April 4, 2011, Cherry, Bekaert &
Holland, LLP, in Raleigh, North Carolina, noted that the Company
has suffered recurring losses from operations and has a working
capital deficiency as of Dec. 31, 2010. These conditions,
according to the independent auditors, raise substantial doubt
about the Company's ability to continue as a going concern, the
auditors said.
SOLYNDRA LLC: Collapse Prompts House Inquiry Into Loan Programs
---------------------------------------------------------------
Rachel Slajda at Bankruptcy Law360 reports that the U.S. House of
Representatives' Oversight and Government Reform Committee's
chairman said Tuesday that he planned to investigate government
loan programs like the one that helped fund Solyndra LLC, saying
corruption in such programs "seems to be endemic."
Also on Tuesday, Law360 says, two top executives for Solyndra
reportedly notified the House Energy and Commerce Committee, which
is conducting its own investigation into the company's bankruptcy,
that they will plead the Fifth Amendment at a hearing Friday.
Meanwhile, American Bankruptcy Institute reports that House
Judiciary Committee Chairman Lamar Smith (R-Texas) is calling for
Attorney General Eric Holder to appoint an examiner in Solyndra's
bankruptcy case to investigate the financial relationship between
the Department of Energy and the company.
About Solyndra LLC
Founded in 2005, Solyndra LLC is a U.S. manufacturer of solar
photovoltaic solar power systems specifically designed for large
commercial and industrial rooftops and for certain shaded
agriculture applications. The Company had approximately 968 full
time employees and 211 temporary employees. Solyndra has sold
more than 500,000 of its panels since 2008 and generated
cumulative sales of over $250 million.
Fremont, California-based Solyndra and affiliate 360 Degree Solar
Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D.
Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at
least the third solar company to seek court protection from
creditors since August 2011.
Solyndra owed secured lenders $783.8 million, including
$527.8 million to the U.S. government pursuant to a federal loan
guarantee, and held assets valued at $859 million as of the
Petition date. The U.S. Federal Financing Bank, owned by the U.S.
Treasury Department, is the Company's biggest lender.
In the Chapter 11 cases, the Debtors are pursuing a two-pronged
strategy to effectuate either a sale of their business to a
"turnkey" buyer who may acquire substantially all of Solyndra's
assets or, if the Debtors are unable to identify any such
potential buyers, an orderly liquidation of the Debtors' assets
for the benefit of their creditors.
Judge Mary F. Walrath presides over the Debtors' cases. The
Debtors are represented by Pachulski Stang Ziehl & Jones LLP as
legal adviser.
SOUTH EDGE: Focus South Needs to Block Deal Before Filing Suit
--------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that South Edge LLC avoided having one of the project's
minority owners muddy a settlement negotiated by the trustee with
KB Home and other homebuilders who were some of the ultimate
owners of the project. Focus South Group LLC, a junior partner in
the project, was rebuffed in court when it sought permission to
sue the homebuilders that agreed to settle. The bankruptcy judge
in Las Vegas said that Focus first needed to block the settlement
before seeking authority sue on the claims the trustee aims to
settle. Focus South believes the settlement is inadequate. By
suing, it believes enough can be collected for the project to be
completed. The settlement is with owners holding a 92 percent
interest in the project.
The bankruptcy judge has approved the disclosure statement
explaining the Chapter 11 plan. The plan, which is underpinned by
settlements with a number of building companies, provides lenders
with roughly $330 million in recoveries and offers unsecured
creditors a share of a $1 million fund. A hearing on the
confirmation of the plan has been scheduled for Oct. 17.
About South Edge
Las Vegas, Nevada-based South Edge LLC owns the Inspirada project,
an uncompleted 2,000-acre residential development in Henderson,
Nevada, about 16 miles (26 kilometers) southeast of Las Vegas.
The eight owners of the project include an affiliate of KB Home, a
49% owner. Other owners are Coleman Toll LP with 10.5%, Pardee
Homes Nevada Inc. with 4.9%, Meritage Homes with 3.5%, and Beazer
Homes USA Inc. with 2.6%.
JPMorgan Chase Bank, N.A., Credit Agricole Corporate and
Investment Bank, and Wells Fargo Bank, N.A., filed an involuntary
chapter 11 bankruptcy petition (Bankr. D. Nev. Case No. 10-32968)
on Dec. 9, 2010, against South Edge, LLC. The petitioning
creditors are part of a lender group that provided a $595 million
credit. New York-based JPMorgan serves as lender and agent for
the group. South Edge filed motions to dismiss the involuntary
petition.
The Court conducted a contested trial on Jan. 24 and 25, 2011, and
Feb. 2 and 3, 2011. On Feb. 3, 2011, the Court entered an order
for relief under Chapter 11 of the Bankruptcy Code against the
Debtor and issued an order directing the appointment of a chapter
11 trustee. The United States Trustee appointed Cynthia Nelson to
serve as Chapter 11 trustee on Feb. 20, 2011. The Court approved
the appointment three days later.
South Edge is represented by lawyers at Klee, Tuchin, Bogdanoff
and Stern LLP, and The Schwartz Law Firm, Inc., as legal counsel.
The Chapter 11 trustee also tapped Schwartzer & McPherson Law Firm
as local counsel.
Petitioning creditors JPMorgan Chase Bank, N.A., and Wells Fargo
Bank, N.A., are represented by lawyers at Morrison and Foerster
LLP; and Lewis and Roca LLP. Credit Agricole is represented by
lawyers at Haynes and Boone LLP, and Jolley Urga Wirth Woodbury &
Standish.
SOUTH POINTE: Case Summary & 3 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: South Pointe Family and Children Center, Inc.
1760 S. Glades Drive
North Miami Beach, FL 33162
Bankruptcy Case No.: 11-35758
Chapter 11 Petition Date: September 17, 2011
Court: U.S. Bankruptcy Court
Southern District of Florida (Miami)
Judge: A. Jay Cristol
Debtor's Counsel: Joel M. Aresty, Esq.
JOEL M. ARESTY P.A.
13499 Biscayne Boulevard, #T-3
No. Miami, FL 33181
Tel: (305) 899-9876
Fax: (305) 723-7893
E-mail: aresty@mac.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's three largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/flsb11-35758.pdf
The petition was signed by Nelson Bell, president.
STEPHEN BALDWIN: IRS Has Bankruptcy Case Dismissed
--------------------------------------------------
Bloomberg News reported that the Internal Revenue Service
persuaded a judge to dismiss the bankruptcy case of actor Stephen
Baldwin, who has starred in such films as "The Usual Suspects,"
after he failed to submit tax returns or comply with bankruptcy
court requirements. U.S. Bankruptcy Judge Robert D. Drain granted
the IRS's request after Mr. Baldwin made no objection, and ordered
the case dismissed in court documents filed April 4. The case was
terminated Aug. 24. The IRS was seeking to collect more than
$900,000 in back taxes from Mr. Baldwin.
Hollywood actor Stephen Baldwin and his wife filed for Chapter 11
bankruptcy protection on July 21, 2009 (Bankr. S.D.N.Y. Case No.
09-23296). Bruce Weiner, Esq., at Rosenberg, Musso & Weiner, LLP,
assists the Debtors in their restructuring effort.
Mr. Baldwin and his wife listed assets of $1.1 million against
debt totaling $2.3 million. The Baldwins filed for Chapter 11
protection to stop the foreclosure of their home in Upper
Grandview, New York. The Baldwins' petition said the home was
worth $1.1 million and had $1.2 million in mortgages.
STILLWATER MINING: Moody's Gives B2 Rating to Sr. Unsec. Notes
--------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Stillwater
Mining Company's proposed $300 million senior unsecured notes due
2016. The proceeds from the notes issuance are expected to be
used, together with cash on hand, to fund the cash portion of the
company's acquisition of Peregrine Metals (a Canada headquartered
company), for other expansion, and for general corporate purposes.
In a related rating action, Moody's upgraded the company's $30
million revenue bonds due 2020 to B2 from Caa1. The Corporate
Family Rating (CFR) and Probability of Default Rating were
affirmed at B2. The outlook is stable.
These ratings/assessments have been affected:
Corporate Family Rating affirmed at B2;
Probability of Default Rating affirmed at B2;
$300 million senior unsecured notes due 2016 assigned B2 (LGD4,
52%);
$30 million unsecured Revenue Bonds due 2020 upgraded to B2 (LGD4,
52%) from Caa1 (LGD5, 79%).
The rating outlook is stable.
RATINGS RATIONALE
The B2 CFR reflects the meaningful recovery in Stillwater's
primary end-market (the automotive sector) and the increase in
palladium and platinum pricing since their respective troughs
during the past financial crisis. The rating also considers the
company's good liquidity profile, moderate debt level, and minimal
debt service requirements. The CFR remains constrained by the
company's exposure to the volatile palladium and platinum precious
metal markets, primary reliance on mines in a single ore body, and
exposure to the cyclical automotive industry as its primary end
market. Although Stillwater's acquisition of Marathon assets in
Canada and potentially Altar assets in Argentina will diversify
the company geographically and in terms of metal exposure, Moody's
notes that neither of these two assets is yet developed.
Stillwater acquired Marathon PGM Corporation in 2010, and in July
2011 announced definitive agreement to acquire Peregrine Metals
and its Altar project in San Juan, Argentina. Marathon is slated
to start producing palladium and platinum in 2014, whereas Altar
is expected to start producing copper and gold in 2017-18.
Development of these properties will require significant capital
and expose Stillwater to material operational and execution risks
prior to the realization of any production.
The rating on the $30 million Montana Board of Investments revenue
bonds due 2020 was raised to B2, in line with the CFR, since the
revenue bonds and the proposed notes, post completion of the
financing transaction, will account for the majority of the debt
in the company's capital structure. Moody's notes that the revenue
bonds are senior unsecured obligations of the company and rank
pari passu with the proposed notes. The bonds had previously
remained at Caa1 despite an upgrade to the company's CFR in the
last rating action on July 27, 2011 as they would have been
structurally subordinated to any secured debt (including the $200
million bridge financing facility then in place) related to the
proposed acquisition of Peregrine.
The stable rating outlook anticipates that Stillwater will
maintain a liquidity position sufficient to support its operations
over the next two years, while the company increases its capital
spend to develop the Marathon asset.
A positive action is unlikely in the near term given the execution
risk and the potential that the company could need to raise
additional debt to support the capital spend of roughly $450
million required to develop the Marathon project through 2013-14.
A negative outlook or downgrade is possible if the company's
liquidity level (unrestricted cash/investments and availability)
were to fall below $100 million or if PGM prices drop
substantially on a combined basis (over 25%). Leverage approaching
4.0 times and cash flow from operations to debt below 20% could
also result in negative rating pressure.
The principal methodology used in rating Stillwater Mining Company
was the Global Mining 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.
Stillwater Mining Company is engaged in underground mining,
smelting and refining of palladium, platinum and associated
minerals. The company's mining operations consist of the
Stillwater and East Boulder mines, which are located at the
eastern and western ends of the J-M Reef in Montana, as well as
the Marathon PGM project in Canada. Stillwater also operates a
smelter and refinery where, in addition to processing its mined
production, it recycles spent automotive catalyst materials to
recover platinum group metals (PGMs). The company had revenue of
$680 million for the last twelve month period ended 6/30/2011.
SUPERTEL HOSPITALITY: Nasdaq Notifies on Low Stock Price
--------------------------------------------------------
Supertel Hospitality, Inc. received a notification letter from The
Nasdaq Stock Market stating that for the previous 30 consecutive
business days, the bid price of the Company's common stock closed
below the minimum $1.00 per share requirement for continued
inclusion on The Nasdaq Global Market pursuant to Nasdaq
Marketplace Rule 5450(a)(1). The Nasdaq letter has no immediate
effect on the listing of the Company's common stock.
In accordance with Marketplace Rule 5810(c)(3)(A), Supertel will
be provided with a grace period of 180 calendar days, or until
March 19, 2012, to regain compliance with the Minimum Bid Price
Rule. If at any time before March 19, 2012, the bid price of
Supertel's stock closes at $1.00 per share or more for a minimum
of 10 consecutive business days, Nasdaq will notify the Company
that it has achieved compliance with the Minimum Bid Price Rule.
If the Company does not regain compliance with the Minimum Bid
Price Rule by March 19, 2012, Nasdaq will notify the Company that
its common stock will be delisted from The Nasdaq Global Market.
In the event the Company receives notice that its common stock is
being delisted from The Nasdaq Global Market, Nasdaq rules permit
the Company to appeal any delisting determination by the Nasdaq
staff to a Nasdaq Hearings Panel. Alternatively, Nasdaq may
permit the Company to transfer its common stock to The Nasdaq
Capital Market if it satisfies the requirements for initial
inclusion set forth in Marketplace Rule 5505, except for the bid
price requirement. If its application for transfer is approved,
the Company would have an additional 180 calendar days to comply
with the Minimum Bid Price Rule in order to remain on The Nasdaq
Capital Market.
About Supertel Hospitality
As of September 21, 2011, Supertel Hospitality, Inc. owns 101
hotels comprised of 8,856 rooms in 23 states. The company's hotel
portfolio includes Baymont Inn, Comfort Inn/Comfort Suites, Days
Inn, Guest House Inn, Hampton Inn, Holiday Inn Express, Key West
Inns, Masters Inn, Quality Inn, Ramada Limited, Savannah Suites,
Sleep Inn, Super 8 and Supertel Inn. This diversity enables the
company to participate in the best practices of each of these
respected hospitality partners. The company specializes in
limited service hotels, which do not normally offer food and
beverage service. For more information or to make a hotel
reservation, visit www.supertelinc.com .
SYNTAX-BRILLIAN: Judge Order SB Trust Must Arbitrate Claims vs. LG
------------------------------------------------------------------
Jonathan Randles at Bankruptcy Law360 reports that U.S. District
Judge Susan Illston on Monday ordered SB Liquidation Trust, the
successor-in-interest to bankrupt Syntax-Brillian Corp., to
arbitrate claims against LG Display Co. Ltd. and its U.S.
subsidiary in multidistrict litigation over an alleged price-
fixing scheme in the liquid crystal display panel industry.
Law360 relates that Judge Illston partially granted LG Display and
LG Display America Inc.'s motion to compel arbitration, ruling
that SB Liquidation Trust was bound by sale and supply agreements
from 2006 and 2008.
About Syntax-Brillian
Based in Tempe, Arizona, Syntax-Brillian Corporation (Nasdaq:BRLC)
-- www.syntaxbrillian.com -- manufactured and marketed LCD HDTVs,
digital cameras, and consumer electronics products including
Olevia(TM) brand high-definition widescreen LCD televisions and
Vivitar brand digital still and video cameras. Syntax-Brillian
was the sole shareholder of California-based Vivitar Corporation.
The Company and two of its affiliates -- Syntax-Brillian SPE,
Inc., and Syntax Groups Corp. -- filed for Chapter 11 protection
on July 8, 2008 (Bankr. D. Del. Lead Case No.08-11407. Lawyers at
Greenberg Traurig LLP represented the Debtors as counsel. Five
members composed the official committee of unsecured creditors.
Pepper Hamilton, LLP, represented the Committee as counsel. Epiq
Bankruptcy Solutions, LLC, served as the Debtors' balloting,
notice, and claims agent. When the Debtors filed for protection
against their creditors, they disclosed total assets of
$175,714,000 and total debts of $259,389,000.
The Bankruptcy Court confirmed the Debtors' Joint Chapter 11
Liquidation Plan in an order dated July 6, 2009. Under the Plan,
general unsecured claims were to received pro rata distributions
from a liquidating trust after payment of the trust's expenses and
a "liquidating trust funding reimbursement." Holders of allowed
prepetition credit facility claims were to receive their pro rata
distributions from a lender trust, after payment in full of
allowed DIP facility claims. A full-text copy of the Debtors' 2nd
amended Chapter 11 liquidating plan is available at:
http://bankrupt.com/misc/syntax-brillian2ndamendedplan.pdf
Counsel to SB Liquidation Trust are:
David M. Fournier, Esq.
Evelyn J. Meltzer, Esq.
PEPPER HAMILTON LLP
Hercules Plaza, Suite 5100
1313 Market Street, P.O. Box 1709
Wilmington, DE 19899-1709
Tel: 302-777-6565
Fax: 302-421-8390
E-mail: fournierd@pepperlaw.com
meltzere@pepperlaw.com
Special counsel to SB Liquidation Trust are:
Allan B. Diamond, Esq.
Andrea L. Kim, Esq.
Eric D. Madden, Esq.
Michael J. Yoder, Esq.
DIAMOND McCARTHY LLP
Two Houston Center
909 Fannin Street, 15th Floor
Houston, TX 77010
Tel: (713) 333-5104
E-mail: adiamond@diamondmccarthy.com
akim@diamondmccarthy.com
emadden@diamondmccarthy.com
myoder@diamondmccarthy.com
TARPON LAKESIDE: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Tarpon Lakeside Development, Inc.
dba Lake Tarpon Resort
37611 US Highway 19 N.
Palm Harbor, FL 34684
Bankruptcy Case No.: 11-17475
Chapter 11 Petition Date: September 19, 2011
Court: U.S. Bankruptcy Court
Middle District of Florida (Tampa)
Debtor's Counsel: Buddy D. Ford, Esq.
BUDDY D. FORD, PA
115 N. MacDill Avenue
Tampa, FL 33609-1521
Tel: (813) 877-4669
Fax: (813) 877-5543
E-mail: Buddy@tampaesq.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by John (Jack) K. Krause, president.
TEN SAINTS: Wants Stipulation for Wells Fargo's Cash Use Approved
-----------------------------------------------------------------
Ten Saints LLC asks the U.S. Bankruptcy Court for the District of
Nevada to approve a stipulation entered with Wells Fargo Bank,
N.A., authorizing its use of cash collateral and disputed cash
collateral.
Wells Fargo Bank, N.A., is successor by merger to Wachovia Bank,
N.A.
As of the Petition Date, the Debtor's obligation outstanding under
the note and the ISDA Master Agreement was $14,320,465 on account
of principal and contract interest.
The Debtor will use the disputed cash collateral and cash
collateral to finance its business operations.
The lender has consented to Debtor's use of cash collateral and
disputed cash collateral on the terms and conditions of the
stipulation, which provides for, among other things:
-- the Debtor's use of the fund will terminate on the date that
is the first to occur of: (i) five calendar days after notice
to Debtor that an Event of Default has occurred and is
otherwise continuing or otherwise unresolved for which notice
is required to be given; (ii) an Event of Default has occurred
for which no notice is required to be given; or (iii) the
effective date of a confirmed plan of reorganization;
-- as adequate protection of lender's interests, the Debtor
will (i) pay $29,500 per month to the lender, (ii) grant the
lender a replacement lien in all of Debtor's now-owned or
after-acquired real and personal property of all types; and
-- all cash collateral and disputed cash collateral, will be
subject to a carve out for the payment of all allowed and
unpaid professional fees and disbursements of Debtor incurred
from the Petition Date until the termination date.
Wells Fargo Bank, N.A. is represented by:
Edward M. Zachary, Esq.
BRYAN CAVE LLP
Two North Central Avenue, Suite 2200
Phenix, AZ 85004-4406
Tel: (602) 364-7000
Fax: (602) 364-7070
E-mail: edwadzachary@bryancave.com
Robert M. Charles, Jr.
LEWIS AND ROCA LLP
3993 Howard Hughes Parkway, Suite 600
Las Vegas, NV 89169
Tel: (702) 216-6191
Fax: (702) 949-8321
E-mail: rcharles@lrlaw.com
About Ten Saints LLC
Las Vegas, Nevada-based Ten Saints LLC filed for Chapter 11
protection (Bankr. D. Nev. Case No. 11-21028) on July 13, 2011.
Judge Mike K. Nakagawa presides over the case. Gerald M. Gordon,
Esq., and Talitha B. Gray, Esq., at Gordon & Silver, Ltd.
represents the Debtor in its restructuring effort. The Debtor
estimates assets and liabilities at $10 million to $50 million.
The petition was signed by Todd A. Nigro, manager of Nigro Saints,
LLC, its manager.
TETON AIR: U.S. Trustee Wants Case Dismissed or Converted to Ch. 7
------------------------------------------------------------------
Robert D. Miller, Jr., the U.S. Trustee for Region 19, asks the
U.S. Bankruptcy Court for the District of Idaho to dismiss the
Chapter 11 case of Teton Air Rancd LLC or, in the alternative,
convert the Debtor's case to Chapter 7 liquidation proceeding.
The U.S. Trustee tells the Court that the Debtor has no employees
and no business operations. It adds that the Debtor has not bank
account since March 2010.
A hearing is set for Sept. 27, 2011 at 1:30 p.m., to consider the
U.S, Trustee's request. Objections, if any, are due Sept. 26,
2011.
About Teton Air
Teton Air Ranch LLC, in Pocatello, Idaho, filed for Chapter 11
bankruptcy (Bankr. D. Idaho Case No. 11-41190) on July 18, 2011.
Judge Jim D. Pappas presides over the case. Daniel C. Green,
Esq., at Racine Olson Nye Budge & Bailey, serves as bankruptcy
counsel. In its petition, the Debtor estimated $10 million to
$50 million in assets and debts. The petition was signed by Corey
Simon, authorized representative.
According to its schedules, the Debtor disclosed $13,799,537 in
total assets and $24,719,592 in total debts.
TOUSA INC: Wants to Continue Using Cash Collateral in October
-------------------------------------------------------------
TOUSA, Inc. and its affiliates seek authority to use cash
collateral of their prepetition lenders on and after Oct. 1, 2011.
As reported in the TCR on Sept. 5, 2011, the U.S. Bankruptcy Court
for the Southern District of Florida has authorized TOUSA, Inc.,
and its debtor-affiliates, to access the cash collateral of their
prepetition lenders through Sept. 30, 2011, in accordance with the
terms agreed with creditors.
The Debtors, Citicorp North America, Inc. and Wells Fargo Bank,
N.A., in their capacities as first and second lien administrative
agents to the prepetition lenders, and the Official Committee of
Unsecured Creditors are in discussions regarding the continued use
of cash collateral. The Debtors expect to reach an agreement with
the parties on terms nearly identical to those included in the
previous cash collateral order but these terms have not been
finalized yet.
Paul Steven Singerman, Esq., at Berger Singerman, P.A., tells the
Court that it is critical that the Debtors maintain access to cash
collateral to permit the debtors to complete implementation of
their wind-down business plan and continue to fund the
administrative expenses of these chapter 11 cases. The Debtors
contend that the interests of the Prepetition Lenders are
adequately protected by the proposed terms of the Debtors'
continued use of Cash Collateral.
The hearing on the cash collateral motion is on Sept. 28, 2011, at
9:30 A.M.
Pursuant to the previous cash collateral use stipulation, as
adequate protection for any diminution in value of the lenders'
collateral, the Debtors will grant the prepetition lenders
replacement liens, adequate protection and super priority
administrative expense.
About Tousa Inc.
Headquartered in Hollywood, Florida, TOUSA, Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A.
Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P.,
TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder
in the United States, operating in various metropolitan markets in
10 states located in four major geographic regions: Florida, the
Mid-Atlantic, Texas, and the West.
The Debtor and its debtor-affiliates filed for separate
Chapter 11 protection on Jan. 29, 2008 (Bankr. S.D. Fla. Case
No. 08-10928). The Debtors have selected M. Natasha Labovitz,
Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul
M. Basta, Esq., at Kirkland & Ellis LLP; and Paul Steven
Singerman, Esq., at Berger Singerman, to represent them in
their restructuring efforts. Lazard Freres & Co. LLC is the
Debtors' investment banker. Ernst & Young LLP is the Debtors'
independent auditor and tax services provider. Kurtzman Cars
LLC acts as the Debtors' Notice, Claims & Balloting Agent.
TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba
Eagle Homes, filed for Chapter 11 Protection on July 30, 2008
(Bankr. S.D. Fla. Case No. 08-20746). It estimated assets and
debts of $1 million to $10 million in its Chapter 11 petition.
The official committee of unsecured creditors has filed a proposed
chapter 11 liquidating plan for Tousa. However, the committee
said that it no longer intends to pursue approval of its
liquidation plan because of the pending appeal of its fraudulent
transfer case in the U.S. Court of Appeals for the Eleventh
Circuit. A district court in February 2011 held that the
bankruptcy judge was wrong in ruling that lenders who were paid
off received fraudulent transfers when Tousa gave liens on
subsidiaries' properties to bail out and refinance a joint
venture. Daniel H. Golden, Esq., and Philip C. Dublin, Esq., at
Akin Gump Strauss Hauer & Feld LLP, in New York, represent the
creditors committee.
TOWN CENTER AT DORAL: Bank Foreclosure Cues Chapter 11 Filing
-------------------------------------------------------------
The South Florida Business Journal reports that Town Center at
Doral LLC, Landmark at Doral East LLC, Landmark at Doral South
LLC, Landmark Club at Doral LLC and Landmark at Doral Developers
LLC, companies associated with the aborted Landmark at Doral
development, have filed for Chapter 11 bankruptcy almost three
years after AmTrust Bank sought to foreclose on the project.
According to the report, the mixed-use development comprised 120
acres and once envisioned 1,109 residential units and 460,000
square feet of commercial space. It was started by Boca Raton-
based EB Developers.
The report notes the companies all have assets of $1 million to
$10 million and liabilities ranging from $100 million to $500
million. Isaac Kodsi signed the petitions as vice president.
Bankruptcy counsel is Mindy Mora, Esq., at Bilzin Sumberg Baena
Price & Axelrod, who could not be reached immediately for comment
on Tuesday.
Cleveland, Ohio-based AmTrust filed for foreclosure in October
2008 based on the $124.4 million in mortgages that were granted
the developer in 2005.
The report says several projects started by EB Developers fell
into foreclosure after owner and CEO Elie Berdugo died in February
2008.
The bankruptcy counsel may be reached at:
Mindy Mora, Esq.
BILZIN SUMBERG BAENA PRICE & AXELROD
1450 Brickell Avenue, 23rd Floor
Miami, FL 33131-3456
Tel: 305.350.2414
E-mail: mmora@bilzin.com
TOWN CENTER AT DORAL: Case Summary & 20 Largest Unsec. Creditors
----------------------------------------------------------------
Debtor: Town Center at Doral, L.L.C.
c/o Steven Amster, Esq.
Kodsi Law Firm, P.A.
701 W. Cypress Creek Road, Suite 303
Ft. Lauderdale, FL 33309
Bankruptcy Case No.: 11-35884
Chapter 11 Petition Date: September 19, 2011
Court: U.S. Bankruptcy Court
Southern District of Florida (Miami)
Debtor's Counsel: Mindy A. Mora, Esq.
BILZIN SUMBERG BAENA PRICE & AXELROD, LLP
1450 Brickell Avenue, Suite 2300
Miami, FL 33131
Tel: (305) 350-2414
Fax: (305) 351-2242
E-mail: mmora@bilzin.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $100,000,001 to $500,000,000
The petition was signed by Isaac Kodsi, vice president.
Affiliates that simultaneously sought Chapter 11 protection:
Debtor Case No.
------ --------
Landmark at Doral East, LLC 11-35885
Landmark at Doral South, LLC 11-35886
Landmark Club at Doral, LLC 11-35887
Landmark at Doral Developers, LLC 11-35888
Town Center at Doral's List of Its 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Elya Yagudaev Loan $3,127,500
Alan R. Poppe, Esq.
Foley & Lardner, LLP
100 SE 2nd Street, Suite 1600
Miami, FL 33131
Mark Finkelshtein Loan $1,050,000
16047 Colins Avenue, Apartment #602
North Miami Beach, FL 33160
Frank Alter Loan $1,000,000
3902 NE 207th Street, Suite 1401
Miami, FL 33180
HD Investments Loan $950,000
c/o Harvey D. Friedman, Esq.
Friedman, Rodman & Frank, P.A.
3636 West Flagler Street
Miami, FL 33135
Sela & Be, LLC Loan $600,000
1 Post Road, Apartment 304
Toronto, Ontario
Canada M3B3R4
MFEB I, LLC Loan $500,000
16047 Collins Avenue, Apartment 602
North Miami Beach, FL 33160
Carla Pfeffer Revocable Trust Loan $500,000
c/o Peter J. Frommer, Esq.
Hinshaw & Culbertson LLP
One East Broward Boulevard, #1010
Fort Lauderdale, FL 33301
Lisa Friedman-Fuller Loan $300,000
c/o Harvey D. Friedman, Esq.
Friedman, Rodman & Frank, P.A.
3636 West Flagler Street
Miami, FL 33135
Frank & Carolyn Friedman Loan $300,000
c/o Harvey D. Friedman, Esq.
Friedman, Rodman & Frank, P.A.
3636 West Flagler Street
Miami, FL 33135
Rachel Bensimon Loan $300,000
7913 Tennyson Court
Boca Raton, FL 33433
Y & T Plumbing Corp. Trade Debt $108,609
Mod Space Trade Debt $101,761
National Millwork Trade Debt $50,000
Garmon Construction Corp. Trade Debt $42,976
Advance Insurance Underwriters Insurance $34,320
Ring Electric Trade Debt $33,581
Valle & Valle, Inc. Professional Fees $22,850
Dual Temp Mechanical Trade Debt $9,308
David Plummer & Associates Professional Fees $7,297
Eric Valle Professional Fees Unknown
UPSTREAM WORLDWIDE: Board Grants CEO & CFO 100MM Stock Options
--------------------------------------------------------------
The board of directors of Upstream Worldwide, Inc., granted
Douglas Feirstein, the Company's Chief Executive Officer, and
Daniel Brauser, the Company's Chief Financial Officer, 100,000,000
10-year stock options exercisable at $0.013 per share. The
options will vest annually over a four-year period, subject to
continued employment with the Company. The vesting of the options
is further subject to the Company entering into a certain
financing agreement in connection with the previously announced
ecoSquid transaction. Additionally, subject to the Company
entering into the financing agreement, the Company agreed to re-
price all of Messrs. Feirstein's and Brauser's outstanding stock
options to $0.013.
About Upstream Worldwide
Ft. Lauderdale, Fla.-based Upstream Worldwide, Inc., formerly,
Money4Gold Holdings, Inc. -- http://www.money4gold.com/-- is an
emerging leader in direct-from-consumer, reverse logistics,
currently specializing in the procurement and aggregation of
cellular phones and precious metals to be recycled. From the
inception of the Company's current business in 2008 through 2010,
substantially all of the Company's revenue came from the precious
metals business. In mid-2010, the Company began to diversify its
business by introducing a service, similar to its precious metals
business, for cellular phones as it saw the gold and silver
business begin to sharply retract.
The Company ended 2010 with a net loss of $16.8 million on $32.5
million of revenue and 2009 with a net loss of $4.1 million on
$29.0 million of revenue.
The Company's balance sheet at June 30, 2011, showed $1.96 million
in total assets, $3.77 million in total liabilities, all current,
and a $1.80 million total stockholders' deficit.
Berman & Company, P.A., in Boca Raton, Florida, expressed
substantial doubt about Upstream Worldwide's ability to continue
as a going concern. The independent auditors noted that the
Company has a net loss of $16,791,253 and net cash used in
operations of $3,161,683 for the year ended Dec. 31, 2010; and has
a working capital deficit of $2,070,274, and a stockholders'
deficit of $1,396,109 at Dec. 31, 2010.
URS CORPORATION: Moody's Raises Bank Facility Rating From 'Ba1'
---------------------------------------------------------------
Moody's Investors Service upgraded URS Corporation's senior
unsecured bank facility rating to Baa3 from Ba1 and revised the
company's rating outlook to stable from positive. As URS is now an
Investment Grade issuer, Moody's withdrew the company's Ba1
corporate family, Ba1 probability of default, and SGL-1
speculative grade liquidity ratings. The rating upgrade reflects
URS' disciplined approach to risk management and strong project
execution coupled with its ability to generate relatively stable
results through challenging market conditions. URS has also
demonstrated its commitment to using its consistent free cash flow
to reduce debt and quickly restore its credit metrics following
acquisition activity.
RATINGS RATIONALE
URS' Baa3 rating primarily reflects its relatively low business
risk due to a high proportion of stable operations and maintenance
revenue, mostly from the U.S. Federal government, a low proportion
of fixed price contract risk, and its reasonable diversity of
revenue sources, including meaningful exposure to State government
infrastructure work. Together with its significant order backlog,
these attributes help balance the revenue volatility of URS' Power
and Industrial & Commercial sectors. As well, although URS has
higher leverage (2.3x adjusted) than many of its rated engineering
and construction peers, it is able to generate dependable levels
of free cash flow through the economic cycle. Acquisition activity
could periodically raise URS' financial leverage and introduce
integration risks although URS has managed its past
transformational acquisitions well and Moody's expects future
acquisitions will be smaller. While there may be some future
revenue pressures as the US government seeks to reduce its budget
deficit, the near-essential services that URS provides and its
broad end market exposure mitigate this risk.
The stable outlook reflects Moody's belief that URS' debt capacity
created by modest earnings growth and free cash flow generation
will be consumed by acquisition activity and/or share repurchases
over the next 12 to 18 months.
For further upward rating consideration, URS would need to sustain
its adjusted Debt/ EBITDA below 2x and EBITA/ Interest Expense
above 7x. Negative rating pressure could develop if URS sustained
its Debt/ EBITDA above 3x or its EBITA/ Interest Expense below 4x.
Moody's last rating action on URS was on January 12, 2011 when
Moody's lowered URS' bank facility rating to Ba1 from Baa3 to
reflect the release of asset security from the collateral package.
The principal methodology used in rating URS was the Global
Construction Industry Methodology, published November 2010.
URS Corporation, headquartered in San Francisco, California, is a
leading engineering and construction firm and a major Federal
government contractor that provides a range of professional
planning, design, engineering, construction, operations and
maintenance, and decommissioning and closure services.
Consolidated revenue for the trailing twelve months to July 1,
2011 was approximately $9.4 billion.
U.S. EAGLE: Plan Filing Period Extended Until Dec. 1
----------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey has
further extended U.S. Eagle Corporation and its debtor-affiliates'
exclusive periods to file a plan of reorganization and to solicit
acceptances of a plan of reorganization, through and including
Dec. 1, 2011, and Feb. 1, 2012, respectively.
About U.S. Eagle
U.S. Eagle filed for Chapter 11 protection (Bankr. D. N.J. Case
No. 11-10392) on Jan. 6, 2011. Samuel Jason Teele, Esq., at
Lowenstein Sandler PC, serves as the Debtor's bankruptcy counsel.
The Debtor estimated its assets and debts at $10 million to
$50 million.
Affiliates U.S. Eagle Litho, Inc. (Bankr. D. N.J. Case No. 11-
10401), Eagle One Golf Products, Inc. (Bankr. D. N.J. Case No. 11-
10397), Julius Realty Corporation (Bankr. D. N.J. Case No. 11-
10393), Traffic Control Service, Inc., An Arizona Corporation
(Bankr. D. N.J. Case No. 11-10398), Traffic Control Service, Inc.,
A California Corporation (Bankr. D. N.J. Case No. 11-10403), and
Traffic Control Service, Inc., A Nevada Corporation (Bankr. D.
N.J. Case No. 11-10392) filed separate Chapter 11 petitions on
Jan. 6, 2011.
Three Twenty One Capital Partners, LLC serves as exclusive agent
for the Debtors.
On Feb. 22, 2011, the U.S. Trustee appointed an Official Committee
of Unsecured Creditors. Porzio, Bromberg & Newman, P.C.,
represents the Committee.
No trustee or examiner has been requested or appointed in the
Chapter 11 cases.
USA COMMERCIAL: 9th Cir. Rules on Various Appeals
-------------------------------------------------
The U.S. Court of Appeals for the Ninth Circuit issued its
decision on the consolidated interlocutory appeals arising from
the related bankruptcy proceedings of USA Commercial Mortgage and
Asset Resolution, LLC, as well as subsequent civil litigation
brought by certain creditors, the so-called Direct Lenders.
USACM was in the business of underwriting and brokering short-term
commercial loans on behalf of private investors, some of whom are
the Direct Lenders involved in the present litigation. USACM also
acted as the servicer for these loans pursuant to Loan Service
Agreements made with the Direct Lenders. Following USACM's
bankruptcy, Compass Partners LLC and Compass USA SPE LLC acquired
all of USACM's relevant assets, including its rights under the
LSAs. Silar Advisors LP financed Compass's acquisition of the
assets and subsequently foreclosed, conveying all interest in the
relevant LSAs to Asset Resolution. Prior to this development, the
parties had already been engaged in litigation over whether
USACM's successor in interest may be terminated as the loan
servicer under the LSAs, as well as the compensation to which
USACM's various successors might be entitled under the LSAs.
The issues raised by Asset Resolution and other affiliated
Appellants arose during the course of this litigation, which is
still ongoing before Chief Judge Robert C. Jones of the District
of Nevada.
The Ninth Circuit's ruling addresses its jurisdiction and decision
as to each appeal and petition.
Among others, the Ninth Circuit dismissed an appeal over a
bankruptcy court order authorizing the sale of a commercial
property, the "Gess Property," and directing the specific
distribution of the proceeds. The district court had allowed for
the sale of the Gess Property on an emergency basis because a
third-party lienholder had scheduled a foreclosure sale, in which
the Direct Lenders had acquired interest following the default of
the original borrower. The sale recovered only $8.5 million, less
than one-third of the original principal amount of $26.5 million.
Asset Resolution claims over $12 million in various servicing fees
under the LSAs associated with this property and seeks recovery of
all of the sale proceeds on this basis. In distributing the sale
proceeds, the district court did not allow Asset Resolution to
recover default interest or late fees under the LSAs and limited
its proportional recovery to the amount of the sale proceeds,
rather than the original loan amount. Asset Resolution appeals
the district court's distribution of the sale proceeds, arguing
that the district court disregarded the relevant terms of the
LSAs.
The Ninth Circuit held that although the distribution order was
final as to the Gess property, Asset Resolution's rights under the
LSAs is an issue at the heart of this litigation and will reappear
in relation to all of the properties at issue. Even if Asset
Resolution's contractual rights related to the Gess property were
limited by the emergency situation faced by the district court,
the Ninth Circuit said the issue is better evaluated following a
final judgment regarding the LSAs. Accordingly, the Ninth Circuit
dismissed the appeal for lack of appellate jurisdiction.
A copy of the Ninth Circuit's Sept. 19, 2011 Memorandum is
available at http://is.gd/1Ep3Xifrom Leagle.com.
About USA Commercial
Based in Las Vegas, Nevada, USA Commercial Mortgage Company, dba
USA Capital -- http://www.usacapitalcorp.com/-- provides more
than $1 billion in short-term and permanent financing to
homebuilders, commercial developers, apartment owners and
institutions nationwide. The Company and its debtor-affiliates
filed for chapter 11 protection on April 13, 2006 (Bankr. D. Nev.
Case Nos. 06-10725 to 06-10729).
Lenard E. Schwartzer, Esq., at Schwartzer & Mcpherson Law Firm,
and Annette W. Jarvis, Esq., at Ray Quinney & Nebeker, P.C.,
represented the Debtors in their restructuring efforts. Thomas J.
Allison, a senior managing director at Mesirow Financial Interim
Management LLC, served as Chief Restructuring Officer for the
Debtors.
Susan M. Freeman, Esq., and Rob Charles, Esq., at Lewis and Roca
LLP represented the Official Committee of Unsecured Creditors of
USA Commercial Mortgage Company. Edward M. Burr at Sierra
Consulting Group, LLC, provided financial advice to the Creditors
Committee of USA Mortgage.
Marc A. Levinson, Esq., and Jeffery D. Hermann, Esq., at Orrick,
Herrington & Sutcliffe LLP, and Bob L. Olson, Esq., and Anne M.
Loraditch, Esq., at Beckley Singleton, Chartered, represented the
Official Committee of Equity Security Holders of USA Capital
Diversified Trust Deed Fund, LLC. FTI Consulting, Inc., provided
financial advice to the Equity Committee of USA Diversified.
Candace C. Carlyon, Esq., and Shawn w. Miller, Esq., at Shea &
Carlyon, Ltd., and Jeffrey H. Davidson, Esq., Frank A. Merola,
Esq., and Eve H. Karasik, Esq., at Stutman, Treister & Glatt, PC,
represented the Official Committee of Equity Security Holders of
USA Capital First Trust Deed Fund, LLC. Matthew A. Kvarda, at
Alvarez & Marsal, LLC, provided financial advise to the Equity
Committee of USA First.
When the Debtors filed for protection from their creditors, they
estimated assets of more than $100 million and debts between
$10 million and $50 million.
The Debtor's Chapter 11 plan of reorganization was confirmed on
Jan. 8, 2007. USACM Liquidating Trust was created pursuant to the
Debtors' Third Amended Joint Chapter 11 Plan of Reorganization,
which became effective March 12, 2007. Under the Joint Plan, the
Trust obtained the right to enforce USACM's causes of action.
VAN HUNTER: Frost Nat'l. Bank Files Liquidation Plan for Firm
-------------------------------------------------------------
The Frost National Bank and Corey Van Trease filed with the U.S.
Bankruptcy Court for the Eastern District of Texas a plan of
liquidation and disclosure statement for Van Hunter Development,
Ltd., dated Sept. 16, 2011.
Frost is a secured lender of Van Hunter. Ten lots of the Debtor's
residential real properties in Flower Mound, Texas, are subject to
Frost's secured claim while one remaining lot is unencumbered.
The Plan proposed by Frost contemplates the liquidation of all
property of the Debtor. Within 14 days of the order confirming
the Plan becoming a final order, the Debtor will close on the sale
of its properties to JBGL Capital LP unless a higher and better
offer comes up. In such event, the Debtor will hold an auction
where JBGL will be considered the stalking horse offer, the
initial overbid will be $2.95 million, and JBGL will be entitled
to a $150,000 break-up fee.
Under the Plan, a $75,000 retainer the Debtor placed with its
bankruptcy counsel will be used to satisfy administrative claims
in the Debtor's case. The proceeds of Frost's collateral will be
used to satisfy closing costs and property taxes secured by such
property with the remainder paid to Frost. The remainder of the
retainer, the net proceeds of the sale of the Debtor's
unencumbered lot remaining after closing costs and taxes, and the
proceeds of the liquidation of all other property of the Debtor
will be used to satisfy the Allowed IRS Claim and the remainder
will be distributed to general unsecured creditors up to 100% of
their claim. The Debtor's equity holders will receive no value or
distribution until all other classes are paid in full.
The Plan does not contemplate the Debtor continuing to operate.
Instead, the Debtor will be dissolved after liquidating its
property and completing all other actions under the Plan.
A full-text copy of the Frost Plan is available for free at:
http://bankrupt.com/misc/VANHUNTER_FrostPlanSept16.PDF
Debtor Withdraws Own Disclosure Statement
The Debtor, on the other hand, notified the Court on Sept. 15 that
it is withdrawing the disclosure statement explaining its proposed
plan of reorganization dated May 13, 2011.
As reported in the Troubled Company Reporter on June 1, 2011, the
Debtor's Plan contemplates that Gary Evans, the principal of one
of the Debtor's partners, will be contributing sufficient capital
to pay off all of the Debtor's debt obligations to its various
secured creditors, unsecured creditors and the taxing authorities
in full. The Debtor has one unencumbered lot, which will be
returned to Compass Bank in return for a credit as set forth in
the Plan. The hearing to consider adequacy of the Debtor's
disclosure statement was previously continued to Sept. 19.
Dallas, Texas-based Van Hunter Development, Ltd, filed for
Chapter 11 bankruptcy (Bankr. E.D. Texas Case No. 10-40052) on
Jan. 4, 2010. Singer & Levick, P.C., in Addison, Texas, serve as
general bankruptcy counsel. In its schedules, the Debtor
disclosed $16,378,784 in assets and $15,294,367 in liabilities as
of the petition date.
WARNER JEWELERS: Files for Chapter 11 to Fend Off Receiver
----------------------------------------------------------
The Fresno Bee reports that Warner Co. Jewelers filed for Chapter
11 bankruptcy protection, saying it did so to fend off an effort
by the company's largest creditor to have a receiver appointed to
liquidate the company.
According to a statement, the long-time Valley jeweler said the
company's largest creditor, Westamerica Bank, filed suit against
the company on July 12 and is seeking the appointment of a
receiver to liquidate the 144-year-old company's assets and close
down the business.
"Under the circumstances, company executives had no choice but to
seek protection under Chapter 11 of the Bankruptcy Code in order
to continue day to day operations and to service the needs of its
customers and all of its creditors," the report quotes Warner Co.
Jewelers said in its statement.
Warner Co. -- http://warnercompany.com/-- designs and makes
jewelries.
WASTE2ENERGY HOLDINGS: Two Law Firms Seek to Withdraw as Counsel
----------------------------------------------------------------
Chapter11Cases.com says that two law firms that had appeared on
behalf of Waste2Energy Holdings, Inc., in the involuntary chapter
11 bankruptcy case filed against the company last month asked the
Delaware bankruptcy court to allow them to withdraw from the
firms' representation of the company. Last week, the bankruptcy
court entered orders (1) granting relief in the involuntary
bankruptcy case and (2) authorizing and directing the appointment
of a chapter 11 trustee for Waste2Energy.
According to the firms' court filings, the report notes, the firms
were retained by Waste2Energy to represent the company in the
period between the involuntary filing and the entry of the order
for relief. According to the report, while the firms each
received a retainer, they assert that both retainers have now been
exhausted and have not been replenished. In addition, the motion
states that "on or about September 8, 2011, all management of the
Debtor resigned," leaving the firms without any known
representatives of their client. The report adds that engagement
applications were not filed for either firm in the bankruptcy
case; in fact, Waste2Energy only filed two substantive pleadings
in the case: declarations of two members of the company's
management (John Joseph Murphy II and Christopher D'Arnaud-
Taylor). Each declaration was captioned as being in support of
Waste2Energy's opposition to the motion to appoint a trustee for
the company; however, no such opposition was ever actually filed.
According to Chapter11Cases.com, the law firms assert that they
cannot now be retained as professionals under section 327 of the
Bankruptcy Code because they are now creditors of Waste2Energy
and, therefore, not disinterested. They also argue that the court
should permit them to withdraw from representation of Waste2Energy
because the law firms "have no means to be paid, resulting in a
profoundly unreasonable financial burden on the [firms]; and (2)
the Debtor has no representative, which bars any functioning
attorney-client relationship, has caused the Debtor to fail to
fulfill all of its obligation to the [firms] regarding their legal
services, and renders the representation unreasonably difficult."
The firm's names were not disclosed in the report.
About Waste2Energy Holdings
Greenville, S.C.-based Waste2Energy Holdings, Inc. (Pink Sheets:
WTEZ) -- http://www.waste2energy.com/-- is a "cleantech"
technology company that designs, builds, installs and sells waste
to energy plants that generate "Renewable Green Power" converting
biomass or other solid waste streams traditionally destined for
landfills into clean renewable energy.
The Company's balance sheet at June 30, 2010, showed $3.4 million
in total assets, $11.7 million in total liabilities, and a
stockholders' deficit of $8.3 million.
On Aug. 8, 2011, four creditors filed an involuntary Chapter 11
petition against Waste2Energy Holdings (Bankr. D. Del. Case No.
11-12504). Judge Kevin J. Carey presides over the case. The
petitioning creditors, allegedly owed $3.2 million in the
aggregate, are represented by Frederick B. Rosner, Esq., at The
Rosner Law Group, LLC.
WESTERN COMMUNICATIONS: Can Use BofA Cash Collateral Until Nov. 27
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Oregon has granted
Western Communications, Inc., on an interim basis pending a final
hearing, authorization to use cash collateral in which Bank of
America, N.A., claims a security interest to pay costs and
expenses incurred by Debtor in the ordinary course of its
business, consistent with a budget. The Debtor may make
expenditures in excess of said sums in the budget so long as any
variance will not exceed 8% of the total disbursements, tested on
a monthly basis.
Debtor's lender, Bank of America, N.A., claims a security interest
in substantially all of Debtor's personal property and in certain
real property of Debtor.
Debtor's authority to use Cash Collateral will automatically
expire upon the earlier of (a) Nov. 27, 2011, at 11:59 p.m.; or
(b) regardless of whether Debtor has expended the entire amount
set forth in the Budget, the failure by Debtor to comply with any
provision of this Order (such failure being an "Event of
Default"), which failure is not remedied within five business days
after delivery of notice of such failure by B of A to Debtor (the
earlier of such date, the "Termination Date").
As adequate protection for the use by the Debtor of BofA's cash
collateral, BofA is granted a replacement security interest in and
lien upon all property of the Debtor and its estate.. This
security interest is not intended, nor will it be deemed, to
improve the collateral position of BofA as of the Petition Date.
The Replacement Lien will be in addition to all other security
interests and liens securing B of A's allowed secured claim in
existence on the Petition Date.
To the extent the replacement lien proves to be inadequate to
protect its interest, BofA will hold allowed administrative claims
under Section 503(b) of the Bankruptcy Code, which claims shall
have priority over, and be senior to, all other administrative
claims against Debtor pursuant to Section 507(b) of the Bankruptcy
Code.
A final hearing on the motion will be held on Oct. 4, 2011, at
11:00 a.m.
A copy of the Cash Collateral Budget is available for free at:
http://is.gd/wwnWc6
About Western Communications
Western Communications, Inc., is a family-owned corporation
founded by renowned editor Robert W. Chandler. Headquartered in
Bend, Oregon, Western Communications is a small market newspaper,
niche publishing, printing and digital media company with
publications spread throughout Oregon (six publications) and
California (two publications). The Company produces and publishes
the Bend Bulletin, the Baker City Herald, the La Grande Observer,
the Redmond Spokesman, the Brookings Curry Coastal Pilot, the
Crescent City Daily Triplicate, and the Sonora Union Democrat.
The Company also publishes the Central Oregon Nickel Ads in Bend,
Oregon.
Western Communications filed for Chapter 11 bankruptcy (Bankr.
Ore. Case No. 11-37319) on Aug. 23, 2011. Albert N. Kennedy,
Esq., and Michael W. Fletcher, Esq., at Tonkon Torp LLP, in
Portland, Oregon, serve as the Debtor's bankruptcy counsel. The
Zinser Law Firm, P.C., and Davis Wright Tremaine LLP serve as the
Debtor's special purpose counsel. The Debtor scheduled
$10 million to $50 million in assets and debts. The petition was
signed by Gordon Black, president.
WILLIAMS LOVE: Files Schedules of Assets and Liabilities
--------------------------------------------------------
Williams Love O'Leary & Powers P.C. filed its summary of schedules
of assets and liabilities in the U.S. Bankruptcy Court for the
District of Oregon, disclosing:
Name of Schedule Assets Liabilities
---------------- ------------ -----------
A. Real Property
B. Personal Property $8,602,955
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $4,958,141
E. Creditors Holding
Unsecured Priority
Claims
F. Creditors Holding
Unsecured Non-priority
Claims $1,776,689
------------ ------------
TOTAL $8,602,955 $6,734,830
A full-text copy of the Schedules of Assets & Debts is available
for free at http://bankrupt.com/misc/WILLIAMSLOVE_sal.pdf
About Williams Love O'Leary & Powers
Based in Portland, Oregon, Williams, Love, O'Leary & Powers, P.C.,
fdba Williams, Dailey & O'Leary, P.C., dba WLOP and WDO.com, filed
for Chapter 11 bankruptcy (Bankr. D. Ore. Case No. 11-37021) on
Aug. 14, 2011. Judge Elizabeth L. Perris presides over the case.
In its petition, the Debtor estimated $10 million to $50 million
in assets and $1 million to $10 million in debts. The petition
was signed by Michael L. Williams, its president.
Albert N. Kennedy, Esq., and Michael W. Fletcher, Esq., at Tonkon
Torp LLP, in Portland, Oregon, represent the Debtor as counsel.
WOMEN'S APPAREL: Sells Assets; To Close Plant by Oct. 31
--------------------------------------------------------
Charles Winokoor at GateHouse News Service reports that Boston
Apparel Group said it is winding down operations and will vacate
the plant at 300 Constitution Drive no later than Oct. 31, 2011.
According to the report, an affiliate of Blackstreet Capital
Management LLC, a Maryland-based private equity firm, reached a
deal to buy Boston Apparel's equipment and brands for $11.25
million in bankruptcy court.
Mr. Winokoor says the doors will shut next month at what once was
Chadwick's of Boston, marking the end of a women's mail-order
retail era dating back almost two decades.
The report notes 120 employees who are still working in the
warehouse and customer call center will lose their jobs. Hundreds
of jobs already have been lost in the region as the women's
apparel company was downsized in recent years.
About Women's Apparel Group
Women's Apparel Group LLC, under which Boston Apparel Group LLC
operates, filed Chapter 7 bankruptcy protection (Bankr. D. Mass.
11-_____) on June 29, 2011. WAG owned the Casual Living,
Chadwick's and metrostyle clothing line. One day after the
bankruptcy filing, representatives of Patton Boggs LLP, a
Washington, D.C.-based law firm, attempted to hold an on-site
auction to sell WAG's assets. At the last minute, the sale was
scaled back to just the Casual Living brand. The auction was a
bust.
In July 2011, the case was converted to Chapter 11 reorganization.
Boston Apparel was established in 2008 after Monomoy Capital
Investors of Manhattan acquired the Missy division of Redcats USA,
which at the time included Chadwick's, metrostyle and Closeout
Catalog Outlet.
WORLDWIDE FINANCIAL: Former CEO Pleads Guilty to Bankruptcy Fraud
-----------------------------------------------------------------
Ian Thoms at Bankruptcy Law360 reports that the former CEO of
Worldwide Financial Resources Co. pled guilty to bankruptcy fraud
on Monday in New Jersey federal court, admitting he hid $200,000
worth of assets, including 511 bottles of wine worth roughly
$45,000, from the U.S. trustee.
According to Law360, David Findel, who as chief executive of
Worldwide Financial perpetrated an $11 million fraudulent loan
scheme, faces five years in prison and a $250,000 fine on the
bankruptcy charge. He pled guilty to the loan fraud in October
2010.
W.R. GRACE: EPA Awaiting Comment on Libby Amphibole Asbestos
------------------------------------------------------------
The U.S. Environmental Protection Agency is providing the public
with an opportunity to comment on draft toxicity values for a
unique form of asbestos called Libby Amphibole asbestos. The
toxicity assessment provides a toxicological review of a specific
type of asbestos found in northwest Montana and proposes draft
toxicity values for both cancer and non-cancer health effects.
When final, the toxicity values will help EPA and the residents of
Libby and Troy, Montana, determine the best path forward for
asbestos cleanup and the protection of public health at the Libby
Asbestos Superfund site. The announcement is the latest step in
EPA's continuing efforts to protect human health by reducing
exposure to Libby Amphibole asbestos.
EPA is releasing the draft toxicity assessment for public comment
and peer review by EPA's Science Advisory Board. The Federal
Register notice calls for a 60-day public comment period from
August 25 to October 24, 2011. A public listening session also is
planned on Oct. 6, 2011. The Federal Register notice announces
the beginning of an external review process that provides the
public with an opportunity to comment on the draft toxicity
assessment and the science used to develop the Libby Amphibole
asbestos toxicity values.
To learn about the draft toxicity assessment and how to submit
comments and participate in the listening session, visit
http://www.epa.gov/ncea. Copies of the assessment and Federal
Register notice will be available in the EPA Information Office in
Libby as well as the Lincoln County and Troy, Montana Libraries.
Information on how to comment and participate in the Oct. 6
listening session also will be available at the Information Office
and libraries.
"This is an important step towards developing the best science to
finish the job of protecting public health in Libby and Troy,"
said Jim Martin, EPA's regional administrator in Denver. "Our
intent is to move forward with the input of independent experts
and local residents. Once finalized, these toxicity values will
help guide remaining cleanup actions and identify exposure
prevention practices to protect human health."
EPA announced initial draft toxicity values at a public meeting in
Libby on May 3, 2011. EPA released the draft information to the
residents earlier than usual in the scientific evaluation process
to ensure the community was fully informed. Since that time, the
values have undergone a review by scientists at EPA and other
federal agencies. These reviews did not result in any significant
changes to the draft toxicity values shared on May 3.
Based on requests from the community, the final toxicity values
for Libby Amphibole asbestos will be used to develop EPA's final
risk assessment at the Libby Asbestos Superfund site. EPA will
use these toxicity values to evaluate risks to adults, teens and
children who may be exposed to Libby Amphibole asbestos during
activities such as housework, gardening, mowing, bicycling or
working in an office or outside.
Since 1999, EPA has worked to reduce risk of exposure to Libby
Amphibole asbestos by focusing on removing the largest sources of
exposure. EPA Administrator Lisa P. Jackson in 2009 declared a
public health emergency in Libby, a first-of-its-kind action that
recognized serious impacts to public health. To date, the agency
has spent more than $370 million and has safely removed more than
873,350 cubic yards of asbestos- contaminated soil from source
areas at 1,509 commercial and residential properties. Although
EPA has made significant progress in helping to remove the threat
of asbestos in the land and air and reduce the risks of lung
cancer and other respiratory problems, actual and potential
releases of amphibole asbestos remain a concern in Libby.
Preliminary conclusions in the draft assessment are that the
cancer risk value for Libby Amphibole asbestos is similar to the
current Integrated Risk Information System (IRIS) cancer risk
value for other forms of asbestos. The preliminary assessment of
non-cancer effects indicates the potential for detrimental health
effects at low exposure levels. This is the first EPA non-cancer
toxicity value for asbestos.
EPA is conducting the review of the draft health assessment under
a process prescribed by IRIS. The results of this assessment will
affect states and private industry groups with Superfund cleanup
responsibilities at sites where Libby Amphibole asbestos is
present. The proposed toxicity values in this draft assessment
will also be useful in evaluating risk from potential exposures in
other environments where Amphibole asbestos may be present. EPA
expects to issue its final health assessment in September 2012.
About W.R. Grace & Co.
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The Company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and
Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones,
LLP, represent the Debtors in their restructuring effort. The
Debtors hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock
& Stroock & Lavan, LLP, and Duane Morris, LLP, represent the
Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace and its debtor affiliates, with the support of the
Official Committee of Asbestos Personal Injury Claimants, the
Asbestos PI Future Claimants' Representative and the Official
Committee of Equity Security Holders, have submitted a proposed
Chapter 11 plan of reorganization. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. The Plan confirmation hearing
wrapped up on Jan. 25.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
W.R. GRACE: Receives DOE Grant for Carbon Capture Technologies
--------------------------------------------------------------
W.R. Grace & Co. (NYSE: GRA) has been selected to receive a three-
year, $3 million grant from the U.S. Department of Energy to
develop advanced post-combustion technologies for capturing carbon
dioxide (CO2) from coal-fired power plants.
Existing technologies to capture and separate CO2 from power
plants require large amounts of energy for their operation (20% to
30% of the power produced by the plant) and can raise electricity
prices by as much as 85%. The goal of this project is to capture
at least 90% of power plant CO2 emissions, while minimizing
electricity cost increases.
Grace and its research partners will work to develop a cost-
effective CO2 capture process known as rapid pressure swing
adsorption (rPSA), which utilizes rapid pressure changes to
capture and release CO2. Grace will coordinate the activities of
a synergistic team consisting of Battelle (world renowned for
process R&D and scale-up), Catacel Corp. (innovator in coated
metal foil structures) and the University of South Carolina (known
worldwide for PSA process R&D) to work on this challenge.
"We are thrilled to begin collaborating with such high caliber
partners on developing clean coal technologies," said George
Young, Grace Davison's Vice President of Business Development.
"Grace has a long history of pioneering process adsorbents that
offer superior performance in many different applications. This
grant further validates our technological leadership and our
commitment to sustainability."
Grace has over five decades of experience developing and
manufacturing adsorbents for a variety of industrial applications,
including: Sodasorb(R) CO2 adsorbents for anesthesiology and re-
breathing applications; TriSyl(R) adsorbents for biodiesel
purification; Sylobead(R) process adsorbents used in petrochemical
and natural gas processes; and, PHONOSORB(R) molecular sieve
adsorbents that remove water and solvents from dual pane windows.
This grant is one of 16 projects -- valued at $41 million over
three years -- funded by the Department of Energy that focus on
reducing the energy and cost penalties associated with applying
currently available carbon capture technologies to existing and
new power plants.
This is the second grant awarded to Grace from the Department of
Energy in the past year. Grace was selected in September 2010 to
receive up to $3.3 million for the evaluation and enhancement of
advanced biofuel technologies.
About Battelle
As the world's largest independent research and development
organization, Battelle provides innovative solutions to the
world's most pressing needs through its four global businesses:
Health and Life Sciences; Laboratory Management; National
Security; and Energy, Environment and Material Sciences. It
advances scientific discovery and application by conducting $6.5
billion in global R&D annually through contract research,
laboratory management and technology commercialization.
Headquartered in Columbus, Ohio, Battelle oversees 22,000
employees in more than 130 locations worldwide, including seven
national laboratories which Battelle manages or co-manages for the
U.S. Department of Energy and the U.S. Department of Homeland
Security and a nuclear energy lab in the United Kingdom. Battelle
also is one of the nation's leading charitable trusts focusing on
societal and economic impact and actively supporting and promoting
science, technology, engineering and mathematics (STEM) education.
About W.R. Grace & Co.
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The Company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and
Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones,
LLP, represent the Debtors in their restructuring effort. The
Debtors hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock
& Stroock & Lavan, LLP, and Duane Morris, LLP, represent the
Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace and its debtor affiliates, with the support of the
Official Committee of Asbestos Personal Injury Claimants, the
Asbestos PI Future Claimants' Representative and the Official
Committee of Equity Security Holders, have submitted a proposed
Chapter 11 plan of reorganization. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. The Plan confirmation hearing
wrapped up on Jan. 25.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
YUKOS OIL: Russia's Tax Suit Violated Yukos' Rights, Court Rules
----------------------------------------------------------------
Derek Hawkins at Bankruptcy Law360 reports that the European Court
of Human Rights ruled Tuesday that the Russian government violated
OAO Neftyanaya Kompaniya Yukos' fair trial and property protection
rights when it prosecuted the now-defunct oil company for tax
fraud, but found that the case wasn't politically motivated.
According to Law360, the court ruled that Russian authorities
didn't give Yukos enough time to prepare for trial and appeal when
they brought enforcement proceedings against the company for
allegedly dodging billions of dollars in taxes.
About Yukos Oil
Headquartered in Moscow, Yukos Oil -- http://yukos.com/-- is an
open joint stock company existing under the laws of the Russian
Federation. Yukos is involved in energy industry substantially
through its ownership of its various subsidiaries, which own or
are otherwise entitled to enjoy certain rights to oil and gas
production, refining and marketing assets.
The Company filed for Chapter 11 protection on Dec. 14, 2004
(Bankr. S.D. Tex. Case No. 04-47742), but the case was dismissed
on Feb. 24, 2005, by the Hon. Letitia Z. Clark. A few days
later, the Russian Government sold its main production unit
Yugansk to a little-known firm Baikalfinansgroup for
US$9.35 billion, as payment for US$27.5 billion in tax arrears
for 2000-2003. Yugansk eventually was bought by state-owned
Rosneft, which is now claiming more than US$12 billion from
Yukos.
On March 10, 2006, a 14-bank consortium led by Societe Generale
filed a bankruptcy suit in the Moscow Arbitration Court in an
attempt to recover the remainder of a US$1 billion debt under
outstanding loan agreements. The banks, however, sold the claim
to Rosneft, prompting the Court to replace them with the state-
owned oil company as plaintiff.
On April 13, 2006, court-appointed external manager Eduard
Rebgun filed a chapter 15 petition in the U.S. Bankruptcy Court
for the Southern District of New York (Bankr. S.D.N.Y. Case No.
06-0775), in an attempt to halt the sale of Yukos' 53.7%
ownership interest in Lithuanian AB Mazeikiu Nafta.
On May 26, 2006, Yukos signed a US$1.49 billion Share Sale and
Purchase Agreement with PKN Orlen S.A., Poland's largest oil
refiner, for its Mazeikiu ownership stake. The move was made a
day after the Manhattan Court lifted an order barring Yukos from
selling its controlling stake in the Lithuanian oil refinery.
On Aug. 1, 2006, the Hon. Pavel Markov of the Moscow Arbitration
Court upheld creditors' vote to liquidate OAO Yukos Oil Co. and
declared what was once Russia's biggest oil firm bankrupt.
On Nov. 23, 2007, the Russian Trading System and Moscow
Interbank Currency Exchange stopped trading Yukos shares after
the company formally ceased to exist. Mr. Rebgun completed the
company's liquidation process afte Russia's Federal Tax Service
has entered Yukos' liquidation on the Uniform State Register of
Legal Entities.
As reported in the Troubled Company Reporter-Europe on Nov. 14,
2007, the Moscow Arbitration Court entered an order closing the
liquidation proceedings of OAO Yukos Oil Co., 15 months after it
was declared bankrupt on Aug. 1, 2006.
ZALE CORP: Incurs $112.3 Million Net Loss in Fiscal 2011
--------------------------------------------------------
Zale Corporation filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K reporting a net loss of
$112.30 million on $1.74 billion of revenue for the year ended
July 31, 2011, compared with a net loss of $93.67 million on $1.61
billion of revenue during the prior year.
The Company's balance sheet at July 31, 2011, showed $1.18 billion
in total assets, $977.07 million in total liabilities and $212.82
million in total stockholders' investment.
A full-text copy of the Form 10-K is available for free at:
http://is.gd/I55BNC
About Zale Corporation
Based in Dallas, Texas, Zale Corporation (NYSE: ZLC) --
http://www.zalecorp.com/-- is a specialty retailer of diamonds
and other jewelry products in North America, operating
approximately 1,900 retail locations throughout the United States,
Canada and Puerto Rico, as well as online. Zale Corporation's
brands include Zales Jewelers, Zales Outlet, Gordon's Jewelers,
Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Zale
also operates online at http://www.zales.com/,
http://www.zalesoutlet.com/,
http://www.gordonsjewelers.com/and http://www.pagoda.com/
As reported by the Troubled Company Reporter on February 10, 2010,
The Deal.com's Sara Behunek reported that analysts said bankruptcy
looms for Zale if it fails to restructure its debt and put in
place a solid merchandising strategy.
* Defect in MERS Ownership, Judge Prevents Foreclosure
------------------------------------------------------
Bill Rochelle, the bankruptcy columnist of Bloomberg News, reports
that U.S. Bank NA, as trustee for a securitization of home loans,
ran into a buzz saw when attempting to foreclose a mortgage.
Judge Martin Glenn himself examined the evidence the bank
submitted on the so-called motion to modify the automatic stay.
He found that the case fit squarely within the holding of a case
called Bank of New York v. Silverberg decided this year by a New
York intermediate appellate court. For lack of a paper trail
showing that U.S. Bank owned both the note and mortgage, Judge
Glenn rejected the motion for leave to foreclose, because no one
may foreclose without being the owner of both the note and
mortgage. The case is In re Lippold, 11-12300, U.S. Bankruptcy
Court, Southern District of New York (Manhattan).
* 8th Circuit Pens Treatise on Improvement-in-Position
------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reported that the U.S. Court of Appeals in St. Louis wrote a 16-
page opinion on Aug. 30 about the improvement-in-position test for
preferences to secured creditors under Section 547(c)(5) of the
Bankruptcy Code. Neither the facts nor the result was remarkable,
so we don't bother to summarize the case. It's nonetheless
noteworthy for its survey of law on Section 547(c)(5). Suffice
it to say that the 8th Circuit upheld the two lower courts that
found a preference and voided a previously granted security
interest in accounts receivable that wasn't perfected with a UCC
filing until less than 90 days before bankruptcy. The case is
Lange v. Inova Capital Funding LLC (In re Qualia Clinical Services
Inc.), 11-1201, U.S. Court of Appeals for the Eighth Circuit (St.
Louis).
* Judge Defers to Tax Court on $44 Million Disputed Tax
-------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the federal tax court, rather than the bankruptcy
court, should decide a disputed $44.3 million claim by the
Internal Revenue Service, according to an Aug. 30 opinion by U.S.
Bankruptcy Judge Arthur J. Gonzalez in New York. The case is In
re Gordon, 09-16230, U.S. Bankruptcy Court, Southern District of
New York (Manhattan).
* Lawyer Suspended for Demeaning Comments about Judge
-----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that a Florida lawyer named Kevin C. Gleason was suspended
from practicing in bankruptcy court for 60 days after making
"disrespectful and impertinent" attacks on U.S. Bankruptcy
Judge John K. Olson in Fort Lauderdale, Florida. The suspension
was meted out by all seven bankruptcy judges in Southern District
of Florida.
According to the report, in their collective, 25-page opinion
handed down yesterday, the judges pointed to the "extraordinary
nature of the language" in papers filed in bankruptcy court. The
judges quoted from Mr. Gleason's papers where he said, referring
to Olson, "It is sad when a man of your intellectual ability
cannot get it right when your own record does not support your
half-baked findings."
The report discloses that the panel called Mr. Gleason's language
"shockingly sarcastic and unprofessional." They said there was
"no material justification for his diatribe." They said that his
attempted apology "was a refusal to acknowledge the wrongful
nature of his conduct." On top of precluding Gleason from
practicing in bankruptcy courts in southern Florida for two
months, they referred the matter the Florida Bar Association for
disciplinary conduct.
The case is In re New River Dry Dock Inc., 06-13274, U.S.
Bankruptcy Court, Southern District Florida.
* District Judges Disagree on Who Rules on Safe Harbor
------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that U.S. District Judge John G. Koeltl in New York issued
an opinion last week in the liquidation of Lehman Brothers
Holdings Inc. at odds with rulings by District Judge Jed Rakoff in
the liquidation of Bernard L. Madoff Investment Securities Inc.
The judges reached opposite conclusions on whether the bankruptcy
court should be allowed to make the first rulings on the
applicability of the so-called safe harbor in bankruptcy law.
According to the report, Judge Koeltl's ruling, made from the
bench on Sept. 14, arose from a lawsuit the Michigan State Housing
Development Authority filed against Lehman regarding interest-rate
swaps. The housing authority filed a motion asking Judge Koeltl
to take the entire lawsuit out of bankruptcy court and rule on
whether Section 546(e) of the Bankruptcy Code, known as the safe
harbor, barred Lehman's counterclaim because it would upset a
transaction in securities. To decide if he should withdraw the
lawsuit from bankruptcy court, Judge Koeltl said that issues
surrounding the safe harbor were "plainly" core matters. He said
there was no basis for taking the case away from the bankruptcy
judge because the Lehman case, unlike Supreme Court's Stern v.
Marshall decision, is based entirely on bankruptcy law, not state
law.
Mr. Rochelle points out that, on the other hand, as he had done
before in cases involving financial institutions, Judge Rakoff
last week took part a Madoff lawsuit out of bankruptcy court so he
could make the first decision on whether the safe harbor bars the
trustee from suing customers who took out more cash than they put
in. Judge Rakoff is a district judge in New York like Judge
Koeltl.
The housing authority's suit in district court is Michigan
State Housing Development Authority v. Lehman Brothers Holdings
Inc. (In re Lehman Brothers Holdings Inc.), 11-3392, U.S.
District Court, Southern District New York (Manhattan).
* July Claims Trading Reaches Highest Level in Last 12 Mos.
-----------------------------------------------------------
Bloomberg News reported that Lehman Brothers Holdings Inc. once
again dominated trading of bankruptcy claims in July 2011 on the
secondary market, leading to the highest amount traded since a
record $12.7 billion in July last year. The number of transfers
of bankrupt company's claims reached 1,340 down from 1,809 in
June, totaling about $3.55 billion in face value of the claims,
according to data compiled from court records by SecondMarket Inc.
Lehman accounted for more than 96% of the dollar amount of claims
traded at $3.43 billion. Fifteen cases had their claims traded
for the first time, setting a record and driving the number of
cases that had trading activity to a new high of 59. About $27
billion in Lehman claims have traded in the past 12 months,
according to SecondMarket. Claims against Mesa Air Group Inc. were
the second most traded at $1.5 billion.
* Federal Debt in Relation to GDP Now at Historic Levels
--------------------------------------------------------
Rolfe Winkler, CFA, writer, Heard on the Street at The Wall Street
Journal in article Friday, says household, business and government
debt now amounts to some $36.5 trillion, a new nominal record.
And that figure excludes the government's unfunded liabilities for
Medicare and Social Security.
According to Mr. Winkler, total household debt relative to gross
domestic product declined to 66% in the second quarter. That is
down from a peak of 76% reached in early 2009, but remains far
above the historical average of 37% dating back to 1951.
Mr. Winkler says the federal government has stepped into the
breach. Total federal debt outstanding, according to the
quarterly report, is now 65% of GDP, a level not seen since the
late '40s.
Mr. Winkler notes that the huge amount of debt outstanding also
limits the Federal Reserve's flexibility: Any attempt to kick up
inflation to drive growth runs the risk of increasing long-term
interest rates, which would make refinancing the debt mountain
more difficult.
* Bibby Financial Creates Cash Flow for Automotive Parts Supplier
-----------------------------------------------------------------
Bibby Financial Services has funded a Michigan-based company to
help it emerge from bankruptcy. The business specializes in
coating automotive parts. It filed for Chapter 11 protection in
2008 and has since received court approval on its plan to
reorganize.
Bibby Financial Services worked alongside the client to support
that plan by allocating money for its taxes, quarterly bankruptcy
payments, and a bank loan as well as providing immediate working
capital. The company is going to use these funds to operate and
grow its business.
"It is encouraging to see companies like our client pull
themselves up by the bootstraps and move forward with solutions
and enthusiasm," said Bob Lall, Managing Director, Bibby Financial
Services Midwest and Canada.
"In the past five years the number of business bankruptcy filings
has nearly doubled. Today's business owners need to take
proactive steps to get moving again to help our economy flourish.
Working capital solutions, like factoring, have the flexibility to
lend money regardless of the client's financial history and it can
often be the stepping stone back to financial health," Lall added.
Bibby Financial Services is a worldwide market leader in business
cash flow solutions to small and medium-sized companies. With
offices in eight North American cities and 14 countries around the
world, its product portfolio includes accounts receivables
finance, factoring, export finance, purchase order finance,
specialist solutions for the staffing and trucking sectors, and it
is an approved lender for the Export-Import Bank's working capital
guaranty delegated authority program. Bibby Financial Services is
a subsidiary of a 203-year-old privately held company based in the
United Kingdom.
* Some Slam Aggressive Tactics Used to Win Bankruptcy Work
----------------------------------------------------------
Dow Jones' DBR Small Cap reports that a lack of corporate
bankruptcy filings is leading some hungry attorneys to push the
legal industry's ethical limits to land the often lucrative
assignment of representing creditors committees in Chapter 11
cases, and some of their colleagues are sounding the alarm.
* Dewey & LeBoeuf Nabs 2 Orrick Restructuring Partners
------------------------------------------------------
Eric Hornbeck at Bankruptcy Law360 reports that Dewey & LeBoeuf
LLP said Tuesday that two Orrick Herrington & Sutcliffe LLP
partners, including the co-head of its European restructuring
group, had joined the firm's London office.
The firm said Mark Fennessy, the co-head of Orrick's European
restructuring group and the head of its London restructuring and
insolvency group, and London restructuring attorney Hazel Miller
have joined Dewey as partners in its business solutions group,
according to the report.
* Treasury's Former Mr. Fix-It Millstein Strikes Out on His Own
---------------------------------------------------------------
Dow Jones' DBR Small Cap reports that as European debt woes
intensify, Jim Millstein, fresh off overseeing the Treasury
Department's turnaround of American International Group Inc.,
believes he can beat established Wall Street restructuring shops
at their own game.
* Recent Small-Dollar & Individual Chapter 11 Filings
-----------------------------------------------------
In Re Steven Williams
Bankr. E.D.N.C. Case No. 11-07135
Chapter 11 Petition filed September 17, 2011
In Re Joseph Cooper
Bankr. E.D.N.C. Case No. 11-07143
Chapter 11 Petition filed September 18, 2011
In Re Clarke County Healthcare, LLC
Bankr. S.D. Ala. Case No. 11-03851
Chapter 11 Petition filed September 19, 2011
See http://bankrupt.com/misc/alsb11-03851.pdf
Represented by Lawrence B. Voit, Esq.
lvoit@silvervoit.com
In Re Cecilia Gracian
Bankr. C.D. Calif. Case No. 11-49487
Chapter 11 Petition filed September 19, 2011
In Re Jobel Bernardo
Bankr. C.D. Calif. Case No. 11-49616
Chapter 11 Petition filed September 19, 2011
In Re Edemco Dryers, Inc.
Bankr. D. Colo. Case No. 11-32212
Chapter 11 Petition filed September 19, 2011
See http://bankrupt.com/misc/cob11-32212.pdf
Represented by Lee M. Kutner, Esq.
lmk@kutnerlaw.com
In Re Sharon Hrubes
Bankr. D. Colo. Case No. 11-32208-SBB
Chapter 11 Petition filed September 19, 2011
In Re Alvin Hrubes
Bankr. D. Colo. Case No. 11-32208
Chapter 11 Petition filed September 19, 2011
In Re Joseph Gega
Bankr. D. Conn. Case No. 11-51886
Chapter 11 Petition filed September 19, 2011
In Re Courtney Blackman
Bankr. M.D. Fla. Case No. 11-17524
Chapter 11 Petition filed September 19, 2011
In Re Lenworth Chisholm
Bankr. S.D. Fla. Case No. 11-35890-RBR
Chapter 11 Petition filed September 19, 2011
In Re William Hinton
Bankr. W.D. Ky. Case No. 11-34506
Chapter 11 Petition filed September 19, 2011
In Re BRENT OLSON
Bankr. D. Mont. Case No. 11-61822
Chapter 11 Petition filed September 19, 2011
In Re TODD DENNY
Bankr. D. Nev. Case No. 11-24757
Chapter 11 Petition filed September 19, 2011
In Re Mary Ellen Thompson
Bankr. M.D.N.C. Case No. 11-51434
Chapter 11 Petition filed September 19, 2011
In Re Dusan Bratic
Bankr. M.D. Pa. Case No. 11-06413
Chapter 11 Petition filed September 19, 2011
In Re I & J Enterprises, Inc.
Bankr. C.D. Calif. Case No. 11-49613
Chapter 11 Petition filed September 19, 2011
See http://bankrupt.com/misc/cacb11-49613.pdf
Represented by Michael Jay Berger
michael.berger@bankruptcypow
In Re Tip Top Novelties
Bankr. N.D. Calif. Case No. 11-58743
Chapter 11 Petition filed September 19, 2011
filed pro se
*********
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, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R.
Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G.
Patalinghug, and Peter A. Chapman, Editors.
Copyright 2011. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
*** End of Transmission ***