/raid1/www/Hosts/bankrupt/TCR_Public/111025.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, October 25, 2011, Vol. 15, No. 296
Headlines
15-35 HEMPSTEAD: Auctioneer Providing Services Post-Closing
4KIDS ENTERTAINMENT: Committee Can Retain Hahn & Hessen as Counsel
ADINO ENERGY: Signs Production Agreement with BlueRock
AMACORE GROUP: Enters Into Payment Agreement with John Zubak
AMR CORP: Report Raises American Airlines Chapter 11 Fears
ARTFEST INTERNATIONAL: Has 2nd Amendment to 2010 Form 10-K
AVISTAR COMMUNICATIONS: Reports $493,000 3rd Quarter Net Income
BANK OF GRANITE: Common Stock Delisted from NASDAQ
BANKUNITED FUNANCIAL: One of Two Plan Investors Drops Out
BERNARD L. MADOFF: Trustee Slams Madoff Son's Appeal Bid
BOCA BRIDGE: Employs Gonano & Harrell as Special Counsel
BOISE PAPER: Moody's Upgrades Corporate Family Rating to 'Ba2'
BRIGHAM EXPLORATION: Inks Tender and Voting Agreements with D&Os
CANO PETROLEUM: Incurs $185.7 Million Net Loss in Fiscal 2011
CANO PETROLEUM: Receives Non-Compliance Notice from NYSE Amex
CAPSALUS CORP: To Buy 100% of GeneWize Stock for $5 Million
CB HOLDING: Punts on Disclosure, Has Exclusivity
CDC CORP: Section 341(a) Meeting Scheduled for Nov. 15
CENTURY PLAZA: Files for Chapter 11 in Indiana
CHEF SOLUTIONS: Donlin Recano Retained as Claims Agent
CHEF SOLUTIONS: Hires PricewaterhouseCoopers as Financial Advisor
CHRYSLER LLC: Old Chrysler Liquidators Reach Deal Over Wis. Plant
CHURCH OF GOD: Mortgage Broker Cleared From Loan Dispute
CLAIRVEST GROUP: Emerges From Chapter 11 Protection
COMPASS DIVERSIFIED: Moody's Keeps 'Ba3' After Staffmark Sale
CONGRESSIONAL HOTEL: U.S. Trustee Unable to Form Committee
CORNERSTONE BANCSHARES: Posts $523,668 Net Income in 3rd Quarter
DPAC TECHNOLOGIES: Stephen Vukadinovich Appointed President
DYNEGY INC: Extending $1.2 Billion Exchange Offers to Oct. 27
EAGLE CROSSROADS: U.S. Trustee Unable to Form Committee
EASTMAN KODAK: Seeking $900MM Bailout; Bondholders Hiring Counsel
EVANS OIL: Fifth Third Withdraws Support for Reorganization Plan
EVERGREEN ENERGY: Special Committee Retains Dahlman as Advisor
EVERGREEN SOLAR: Creditors Seek to Limit Lenders' Credit Bid
EVERGREEN TRANS: Court Slashes Silver Voit's Fees
F&G LEONARD: Oversecured Lender Gets $217T in Attorneys' Fees
FAIRFIELD SENTRY: Liquidators Halt Suits During Appeal
FINANCE AMERICA: Allstate Suit Over Toxic Loans Remanded
FKF MADISON: Wins More Time to Work on Restructuring
FORD MOTOR: S&P Hikes Corp. Credit Rating to BB+; Outlook Stable
FRIENDLY ICE CREAM: U.S. Trustee Finds Fault With Auction Plans
FULL CIRCLE: Court Approves Robert Wilcox as Counsel
GENTA INC: Stockholders OK Reverse Stock Split of Common Shares
GLEN ROSE: BDO USA Raises Going Concern Doubt
GREAT ATLANTIC: PwC to Provide Auditing for Fiscal 2012
HARRISBURG, PA: Governor Declares Fiscal Emergency in City
HARRISBURG, PA: Governor Signs Bill to Seize Control
HEARUSA INC: Makes Second Request to Extend Exclusivity Period
HOMELAND SECURITY: Christopher Leichtweis Resigns as President
HUSSEY COPPER: Donlin Recano Retained as Claims Agent
HYTHIAM INC: David Smith Discloses 40.3% Equity Stake
IMPERIAL PETROLEUM: Reports $6.1-Mil. Net Income in Fiscal 2011
INNKEEPERS USA: Court Approves Revised Cerberus Deal
INNKEEPERS USA: Judge Approves $1-Billion Deal With Cerberus
INPHASE TECHNOLOGIES: Files for Chapter 11 in Denver
INTERNAL FIXATION: Matt Endara Resigns from All Positions
JACKSON GREEN: Taps Gussis Law Group as Attorney
JACKSON GREEN: Wells Fargo Wants Chapter 11 Case Moved to Illinois
JEFFERSON COUNTY, AL: Commissioner Says Bankruptcy May Be Near
JER/JAMESON MEZZ: Mezzanine Borrower in Ch. 11 to Stop Foreclosure
KINGS PROFESSIONAL: Involuntary Ch. 11 Filed by "General Partner"
KINGSBURY CORP: Hearing on DIP Loan Scheduled for Oct. 31
KOOSHAREM CORP: S&P Cuts Corp. Credit Rating to 'CC' After Audit
LAKE PLEASANT: Plan Outline Hearing Continued Until Nov. 2
LAS VEGAS RAILWAY: Gilbert Lamphere Elected to Board
LE-NATURE'S INC: Ex-Chief Executive Officer Sentenced to 20 Years
LEVELLAND/HOCKLEY: Taps Houlihan Lokey as Financial Advisor
LUND'S HARDWARE: To Sell Property, Starts Liquidation Sale
LYDIAN SF: Taps MacDonald & Associates as Bankruptcy Counsel
LYDIAN SF: Seeks to Employ Philip Keith as Litigation Counsel
LYMAN LUMBER: Mid-America Can Hire McGuire as Real Estate Broker
LYMAN LUMBER: Can Employ Deloitte to Provide Fixed Fee Services
LYONDELLBASELL INDUSTRIES: Moody's Reviews 'Ba2' CFR for Upgrade
LYONDELLBASELL INDUSTRIES: S&P Puts 'BB-' CCR on Watch Positive
MACROSOLVE INC: Sells $275,000 Debentures & 2.1MM Shares Warrants
MAQ MANAGEMENT: To Provide FCB Accounting of Cash Collateral Use
MARCO POLO: Judge Nixes Lenders' Bid to Sink Ch. 11 Case
MASSACHUSETTS ELEPHANT: Taps Hilco for Consultancy Services
MCCLATCHY CO: Reports $9.4 Million Third Quarter Net Income
MERIDIAN HEALTHCARE: Calif. App. Ct. Affirms Jurisdiction Ruling
METALDYNE LLC: S&P Affirms 'B+' Corporate Credit Rating
MICHAEL H. CLEMENT: Appeals Court Rules in Alegre Dispute
MMRGLOBAL INC: Unregistered Sale of Stock Exceeds 5% Threshold
MOHEGAN TRIBAL: Files September Games Statistical Report
MSR RESORT: Donald Trump Gets Contract to Buy Doral Golf
MSR RESORT: Seeks to Sell Doral Golf to Trump for $170 Million
NAKNEK ELECTRIC: Plan Outline Hearing Scheduled for Dec. 1
NEBRASKA BOOK: Given Less Exclusivity Than Requested
NEW ENGLAND: Submits Compliance Plan to NYSE Amex
NEW ERA: Court Appoints Lowell Cage as Chapter 11 Trustee
NEWLAND INTERNATIONAL: Moody's Cuts Sr. Secured Rating to 'Caa3'
NEWPAGE CORP: Committee Taps Alvarez & Marsal as Financial Advisor
NO FEAR: Court Okays Gibson Dunn as Committee's Conflicts Counsel
NO FEAR: Taps Lapidus & Lapidus as Special Litigation Counsel
OMEGA NAVIGATION: Has Access to Cash Collateral Until Dec. 12
ONE RENAISSANCE: Court Confirms Reorganization Plan
OUTSOURCE HOLDINGS: Plan Outline Hearing Scheduled for Nov. 10
OVERLAND STORAGE: Marathon Capital Discloses 13.5% Equity Stake
OXFORD INDUSTRIES: Moody's Affirms 'B1' Corporate Family Rating
PACIFIC DEVELOPMENT: Automatic Stay Lifted on Payson Commercial
PEGASUS RURAL: BPC AS Wants Evidence of Settlement Terms Excluded
PENINSULA HOSPITAL: Ombudsman Taps Neubert Pepe as Counsel
PETROHAWK ENERGY: Moody's Lifts Sr. Unsec. Notes Rating From B3
PHI GROUP: Dave Banerjee CPA Raises Going Concern Doubt
POST 240: Seeks Bankruptcy Protection in California
PROTEONOMIX INC: To Move Forward with Offshore Stem Cell Testing
QUALTEQ INC: Asks Court to Approve $4.5MM DIP Financing
QUANTUM FUEL: Earns $3.4 Million from Sale of Notes and Warrants
REAL MEX: Seeks to Hire DJM Realty as Real Estate Consultant
REAL MEX: Seeks to Hire Ernst & Young to Provide Tax Services
REAL MEX: Seeks to Hire DJM Realty as Real Estate Consultant
REDPRAIRIE CORPORATION: Moody's Affirms B2 CFR; Outlook Positive
REMY INC: Loses Second Round in Malpractice Suit v. Ice Miller
RENAISSANCE LEARNING: S&P Assigns 'B' Corporate Credit Rating
REOSTAR ENERGY: Amended Plan Outline Hearing Scheduled for Dec. 12
RICCO INC: Chapter 11 Trustee Taps John Boyd Company's Services
RIVER ROCK: Plans to Offer $205 Million of Senior Notes Due 2018
RIVER ROCK: Has $37.9MM Estimated Cash Balance as of Sept. 30
RIVER ROCK: Moody's Assigns 'B3' Rating to Proposed Notes
RQB RESORT: Second Amended Reorganization Plan Confirmed
SAAB AUTOMOBILE: Administrator Tries Wants to End Insolvency Case
SAPPHIRE POWER: S&P Assigns 'BB' Rating to $185MM Sr. Term Loan
SCOTTO RESTAURANT: Taps Henderson Law as Bankruptcy Counsel
SEMGROUP CORP: All American Pipeline Reveals Proposal to Buy Firm
SHILOH INDUSTRIES: Moody's Upgrades CFR to B1; Outlook Stable
SIGNATURE STYLES: Ex-Spiegel Catalog Owner's Exclusivity Extended
SNOQUALMIE ENTERTAINMENT: S&P Raises Issuer Credit Rating to 'B'
SOLAR THIN: Agrees to Convert $836,506 Debt Into 83.6MM Shares
SOLYNDRA LLC: Auction Delayed to Nov. 18
SOLYNDRA LLC: Paid $20,000 to Lobbyist as Bankruptcy Loomed
TANDUS FLOORING: Moody's Affirms 'B2' CFR; Outlook Positive
TRAILER BRIDGE: Ivy Suter Resigns as Chief Executive Officer
UNIGENE LABORATORIES: Completes Dosing in Phase 2 Study of PTH
UNITED STATES: Ratings May Be Cut Again by Yearend, Merrill Says
VISTEON CORP: Venue of Avoidance Suit v. GBSI is Proper
VISUALANT INC: Amends 15.3 Million Common Shares Offering
VUZIX CORP: Secures License to See-Through Optics Tech from Nokia
YELLOWSTONE CLUB: Owner Tells Life Story in New Book
* U.S. Municipal Defaults Declined Last Quarter, Newsletter Says
* Parties Agree Stern No Limit on Power of Magistrates
* Former Bankruptcy Judge Garrity Moves to Morgan Lewis
* Four Banks Closed Friday; Year's Tally Now 84
* One Default Last Week Brings S&P Tally to 35
* Struggling California City Issues an Early Warning on Bonds
* Large Companies With Insolvent Balance Sheets
*********
15-35 HEMPSTEAD: Auctioneer Providing Services Post-Closing
-----------------------------------------------------------
Karen L. Gilman, Esq., Chapter 11 trustee of 15-35 Hempstead
Properties LLC and Jackson 299 Hempstead LLC, asks the Hon. Gloria
M. Burns of the U.S. Bankruptcy Court for the District of New
Jersey for permission to revised the employment FC Development
Group LLC as auctioneer.
According to the Chapter 11 trustee, the revised employment of the
firm is necessary because, with the sale of the Debtors' principal
asset, it requires certain monthly services of the firm to
continue following the closing of the sale of the Debtors' real
property, which occurred on Sept. 19, 2011.
Among other things, the firm will:
a) process invoices received post-closing for pre-closing
services or goods provided;
b) oversee outside payroll company to assure processing of
payroll taxes and filing of quarterly and final returns as
well as processing wage and tax statements to employees for
pre-closing period of the current year;
c) assist with preparing month operating report to be submitted
to the court including bank account reconciliations;
d) follow-up, as necessary, on tenant and employment matters
occurring prior to the closing and transfer of ownership of
Sept. 19, 211; and
e) review, process, and assist with management of state
compliance issues and follow-up as needed with applicable
state agencies.
The firm will be paid $7,500 for initial project assessment &
start up, and $10,000 monthly project management.
The Chapter 11 trustee assured the Court that the firm is a
"disinterested person" within the meaning of Section 101(14) of
the Bankruptcy Code.
About 15-35 Hempstead Properties
15-35 Hempstead Properties, LLC, and affiliate Jackson 299
Hempstead, LLC, owned real property at 101 Boardwalk in Atlantic
City, New Jersey. They filed for Chapter 11 bankruptcy protection
(Bankr. D. N.J. Case Nos. 10-43178 and 10-43180) on Oct. 26, 2010.
Albert A. Ciardi, III, Esq., at Ciardi Ciardi & Astin, serves as
counsel to the Debtors. The Debtors each estimated assets and
debts at $10 million to $50 million.
4KIDS ENTERTAINMENT: Committee Can Retain Hahn & Hessen as Counsel
------------------------------------------------------------------
Judge Shelley C. Chapman of the U.S. Bankruptcy Court for the
Southern District of New York permitted the Official Committee of
Unsecured Creditors to retain Hahn & Hessen LLP as its counsel in
the Chapter 11 cases of 4Kids Entertainment, Inc. and its debtor
affiliates, effective as of July 12, 2011.
Hahn & Hessen will be compensated at its customary hourly rates,
except that the firm has agreed to voluntarily reduce fees charged
for senior partners Mark S. Indelicato and Mark T. Power by 15% of
their standard hourly rates, in accordance with the procedures set
forth in Sections 330 and 331 of the Bankruptcy Code.
Mr. Indelicato, senior partner at Hahn & Hessen LLP, in New York -
- mindelicato@hahnhessen.com -- insists that his firm is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code.
About 4Kids Entertainment
New York-based 4Kids Entertainment, Inc., dba 4Kids, is an
entertainment and media company specializing in the youth oriented
market, with operations in these business segments: (i) licensing,
(ii) advertising and media broadcast, and (iii) television and
film production/distribution. The parent entity, 4Kids
Entertainment, was organized as a New York corporation in 1970.
4Kids filed for Chapter 11 to protect its most valuable asset --
its rights under an exclusive license relating to the popular
Yu-Gi- Oh! ("YGO") series of animated television programs -- from
efforts by the licensor, a consortium of Japanese companies, to
terminate the license and force 4Kids out of business.
4Kids, along with affiliates, filed for Chapter 11 bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-11607) on April 6,
2011. Kaye Scholer LLP is the Debtors' restructuring counsel.
Epiq Bankruptcy Solutions, LLC, is the Debtors' claims and notice
agent. BDO Capital Advisors, LLC, is the financial advisor and
investment banker. EisnerAmper LLP fka Eisner LLP serves as
auditor and tax advisor. 4Kids Entertainment disclosed
$78,397,971 in assets and $86,515,395 in liabilities as of the
Chapter 11 filing.
On July 8, 2011, Tracy Hope Davis, the U.S. Trustee for Region 2,
appointed three members to the official committee of unsecured
creditors in the Chapter 11 cases. Hahn & Hessen LLP serves as
counsel to the Committee.
ADINO ENERGY: Signs Production Agreement with BlueRock
------------------------------------------------------
Adino Energy Corporation, on Oct. 14, 2011, entered into a
production agreement with BlueRock Energy Capital II, LLC. Under
the production agreement, BlueRock has agreed to fund Adino with
$410,000 for the drilling of five oil wells on the Company's
Leonard lease in Coleman County, Texas and for working capital.
Under the terms of the production agreement, BlueRock will be
entitled to 65% of the net revenue interest of the wells until
BlueRock receives $410,000 plus an 18% return on investment.
These amounts are to be paid as the Company receives production
payments on the new wells. After payment of this amount, BlueRock
will receive a 3% overriding royalty interest on the wells.
The production agreement requires Adino to use the funds as
specified above (unless waived by BlueRock) and to operate the
Leonard lease as a reasonably prudent operator. The failure to do
so will be considered an event of default under the agreement. In
addition, if a change of control occurs at Adino, such change of
control can also be deemed an event of default.
The financing provided under the BlueRock agreement is non-
recourse, meaning that Adino is not liable to BlueRock if the
wells do not produce sufficiently, unless there is otherwise a
breach of the agreement.
The production agreement also contains other undertakings
customary in such financing facilities.
About Adino Energy
Based in Houston, Texas, Adino Energy Corporation (OTC BB: ADNY)
-- http://www.adinoenergycorp.com/-- through its wholly owned
subsidiary Intercontinental Fuels, LLC, specializes in fuel
terminal operations for retail, wholesale, and governmental
suppliers.
The Company reported a net loss of $277,802 on $2.00 million of
total revenues for the year ended Dec. 31, 2010, compared with net
income of $23,029 on $2.18 million of total revenues during the
prior year.
The Company's balance sheet at June 30, 2011, showed $3.53 million
in total assets, $6.39 million in total liabilities, and a
$2.85 million total stockholders' deficit.
As reported by the TCR on April 8, 2011, M&K CPAS, PLLC, in
Houston, Texas, 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 from operations and
maintains a working capital deficit.
AMACORE GROUP: Enters Into Payment Agreement with John Zubak
------------------------------------------------------------
The Amacore Group, Inc., on Oct. 14, 2011, entered into a Payment
Agreement with the plaintiffs, John Zubak and Harvey Mitgang, of a
civil action filed in the Superior Court of New Jersey, Law
Division, Mercer County, Docket No. MER-L-001730-09. The Action,
claiming breach of contract, sought recovery for principal,
interest, late fees, counsel fees and costs in connection with
that certain Promissory Note dated June 30, 2004. On Sept. 29,
2011, an Order of Judgment was entered in favor of the Plaintiffs,
awarding an aggregate of $299,384. Upon receiving notice of the
Judgment, the Company and the Plaintiffs, desiring to amicably
resolve any potential collection issues, negotiated and executed
the Payment Agreement, setting forth a payment schedule as
follows:
1. $100,000 payable on or before Oct. 21, 2011;
2. $75,000 payable on or before Nov. 21, 2011;
3. $75,000 payable on or before Dec. 21, 2011; and
4. $50,000 payable on or before Jan. 6, 2012.
About The Amacore Group
Based in Maitland, Florida, The Amacore Group, Inc., (OTC BB:
ACGI) -- http://www.amacoregroup.com/-- is primarily a provider
and marketer of healthcare related products, including healthcare
benefits, vision and dental networks, and administrative services
such as billing, fulfillment, patient advocacy, claims
administration and servicing.
* * *
In its March 31, 2010 report, McGladrey & Pullen, LLP in Orlando,
Florida, raised substantial doubt about the Company's ability to
continue as a going concern. The auditor said the Company has
suffered recurring losses from operations and has not generated
sufficient cash flows from operations to meet its needs.
The Company's balance sheet at June 30, 2010, showed $8,595,986 in
total assets, $25,985,443 in total liabilities, and a $17,147,252
stockholders' deficit.
AMR CORP: Report Raises American Airlines Chapter 11 Fears
----------------------------------------------------------
Evan Weinberger at Bankruptcy Law360 reports that a financial
industry analyst warned Friday that American Airlines parent AMR
Corp. would be forced into bankruptcy if it didn't get help from
lenders or scare up huge amounts of cash quickly, leading
investors to sell off company stock in droves.
The report, from Morningstar analyst Basili Alukos, came just two
days after Fort Worth, Texas-based American Airlines announced it
had lost $162 million for the third quarter of 2011 and was
implementing major cost-cutting measures, according to Law360.
About AMR Corporation
Headquartered in Fort Worth, Texas, AMR Corporation (NYSE:
AMR) operates with its principal subsidiary, American Airlines
Inc. -- http://www.aa.com/-- a worldwide scheduled passenger
airline. As of Dec. 31, 2009, American provided scheduled jet
service to approximately 160 destinations throughout North
America, the Caribbean, Latin America, Europe and Asia.
Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two
regional airlines, American Eagle Airlines Inc. and Executive
Airlines Inc., and does business as "American Eagle." American
Beacon Advisors Inc., a wholly owned subsidiary of AMR, is
responsible for the investment and oversight of assets of AMR's
U.S. employee benefit plans, as well as AMR's short-term
investments.
* * *
AMR carries a 'CCC' issuer default rating from Fitch Ratings,
'Caa1' corporate family and probability of default ratings from
Moody's, and a 'B-' corporate credit rating from Standard &
Poor's.
In November 2010, Standard & Poor's Ratings Services revised its
outlook on AMR Corp. and its major operating subsidiary, American
Airlines Inc., to stable from negative, based on AMR's improved
operating performance, which has bolstered credit quality. S&P
also affirmed its 'B-' corporate credit rating and most issue
ratings on the two companies and lowered selected ratings on
American's enhanced equipment trust certificates.
ARTFEST INTERNATIONAL: Has 2nd Amendment to 2010 Form 10-K
----------------------------------------------------------
Artfest International, Inc., filed on Oct. 20, 2011, amendment no.
2 (Form 10-K/A) to its annual report for the fiscal year ended
Dec. 31, 2010.
Eugene M. Egeberg, CPA, expressed substantial doubt about Artfest
International's ability to continue as a going concern. Mr.
Egeberg noted that the Company has a large accumulated deficit
through Dec. 31, 2010.
The Company reported a net loss of $3.6 million on $2.4 million of
revenue for the fiscal year ended Dec. 31, 2010, compared with a
net loss of $1.3 million on $2.5 million of revenue for the fiscal
year ended Dec. 31, 2009.
The Company's balance sheet at Dec. 31, 2010, showed $5.6 million
in total assets, $3.1 million in total liabilities, and
stockholders' equity of $2.5 million.
A complete text of the Form 10-K/A is available for free at:
http://is.gd/AilN2x
Dallas, Texas-based Artfest International Inc., through its wholly
owned subsidiaries, Art Channel Galleries, Inc., PBS Holdings
Inc., Tradestar Resources Corp. and Charity Sports Distributors,
Inc., markets and sells paintings (both original and reproduced on
canvas using the Giclee and lithograph processes), autographed
limited-edition celebrity photographs, and a wide variety of
authentic autographed memorabilia, sports memorabilia and
collectibles.
AVISTAR COMMUNICATIONS: Reports $493,000 3rd Quarter Net Income
---------------------------------------------------------------
Avistar Communications Corporation reported net income of $493,000
on $3.92 million of revenue for the three months ended Sept. 30,
2011, compared with a net loss of $1.50 million on $2.23 million
of total revenue for the same period during the prior year.
The Company also reported a net loss of $4.11 million on $6.78
million of total revenue for the nine months ended Sept. 30, 2011,
compared with net income of $6.32 million on $18.03 million of
total revenue for the same period a year ago.
The Company reported net income of $4.45 million on $19.65 million
of total revenue for the year ended Dec. 31, 2010, compared with a
net loss of $3.98 million on $8.82 million of total revenue during
the prior year.
The Company's balance sheet at Sept. 30, 2011, showed
$6.60 million in total assets, $17.47 million in total
liabilities, and a $10.86 million total stockholders' deficit.
Bob Kirk, CEO of Avistar, said, "In the third quarter of 2011
Avistar successfully achieved very specific objectives with regard
to our product, sales and operational goals. These goals which
were laid out as part of our 2011 planning process focused on
ensuring that our virtualized product strategy succeeded through
strong partnerships such as the one we have forged with Citrix,
while expanding the value and features of our all-software visual
communications infrastructure. In addition, we sized our
operations to help ensure that we had all the assets in place to
succeed in our target markets and scale when needed. Based on our
hard work and success, we believe that Avistar has a portfolio of
unified visual communications solutions that are unique and
compelling and will continue to be seen by top unified
communications and videoconferencing vendors, as well as large
enterprises, as a suite of solutions that can benefit their
products and businesses. This recognition is an important step
towards Avistar's continued success and growth."
A full-text copy of the press release announcing the financial
results is available for free at http://is.gd/jBb6Sm
About Avistar Communications
Headquartered in San Mateo, California, Avistar Communications
Corporation (Nasdaq: AVSR) -- http://www.avistar.com/-- holds a
portfolio of 80 patents for inventions in video and network
technology and licenses IP to videoconferencing, rich-media
services, public networking and related industries. Current
licensees include Sony Corporation, Sony Computer Entertainment
Inc. (SCEI), Polycom Inc., Tandberg ASA, Radvision Ltd. and
Emblaze-VCON.
BANK OF GRANITE: Common Stock Delisted from NASDAQ
--------------------------------------------------
The NASDAQ Stock Market LLC notified the U.S. Securities and
Exchange Commission regarding the removal from listing or
registration of Bank of Granite Corp.'s common stock in accordance
with Section 12(b) of the Securities Exchange Act of 1934.
About Bank of Granite
Granite Falls, N.C.-based Bank of Granite Corporation is a
Delaware corporation that was organized June 1, 1987, as a bank
holding company. The Company's only businesses are the ownership
and operation of Bank of Granite, a state bank chartered under the
laws of North Carolina on Aug. 2, 1906, and Granite Mortgage,
Inc., a mortgage bank chartered under the laws of North Carolina
on June 24, 1985. Granite Mortgage discontinued its origination
activities during 2009.
The Company conducts its community banking business operations
from 20 full-service offices located in Burke, Caldwell, Catawba,
Forsyth, Iredell, Mecklenburg, Watauga, and Wilkes counties in
North Carolina.
The Company's balance sheet at June 30, 2011, showed
$807.06 million in total assets, $787.75 million in total
liabilities, and $19.30 million in total stockholders' equity.
Cease and Desist Order
In 2009, Bank of Granite entered into a Stipulation and Consent to
the issuance of an Order to Cease and Desist by the Federal
Deposit Insurance Corporation and the North Carolina Commissioner
of Banks. Based on the Company's Consent, the FDIC and the
Commissioner jointly issued the Order on Aug. 27, 2009.
The Order requires the Bank to achieve and maintain Tier 1
Leverage Capital Ratio of not less than 8% and a Total Risk-Based
Capital of not less than 12% for the life of the Order.
Going Concern Doubt
The Company reported a net loss of $23.66 million on
$44.80 million of total interest income for the year ended
Dec. 31, 2010, compared with a net loss of $25.62 million on
$52.64 million of total interest income during the prior year.
Dixon Hughes PLLC, in Charlotte, North Carolina, expressed
substantial doubt about the Company's ability to continue as a
going concern, following the Company's 2010 financial results.
The independent auditors noted that the Company incurred net
losses in 2010 and 2009, primarily from higher provisions for loan
losses. Bank of Granite Corporation's wholly-owned bank
subsidiary is under a regulatory order that requires, among other
provisions, higher regulatory capital requirements. The Bank did
not meet the higher capital requirements as of Dec. 31, 2010 and
is not in compliance with the regulatory agreement. Failure to
comply with the regulatory agreement may result in additional
regulatory enforcement actions.
BANKUNITED FUNANCIAL: One of Two Plan Investors Drops Out
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that although the creditors' committee for BankUnited
Financial Corp. landed a partial settlement with the Federal
Deposit Insurance Corp. sufficient to file a reorganization plan
and disclosure statement, what they lack is equity financing to
confirm and implement the plan.
The Company announced that talks on an equity infusion ended with
one potential investor described as a "Fortune 500 company."
Talks continue with what BankUnited described as a "multinational
financial institution." BankUnited said that the potential
investor to drop out did so for "internal reasons."
Currently, there is a hearing on the Nov. 21 calendar for approval
of the disclosure statement.
BankUnited, which had its bank taken over and sold by regulators
in May 2009, failed to confirm a plan because of FDIC's $1.47
billion claim based on the bank's capital deficiency. There was a
separate a dispute over ownership of tax refunds.
The committee could file a plan because BankUnited has been in
Chapter 11 more than 18 months.
About BankUnited Financial
BankUnited Financial Corp. (OTC Ticker Symbol: BKUNQ) --
http://www.bankunited.com/-- was the holding company for
BankUnited FSB, the largest banking institution headquartered in
Coral Gables, Florida. On May 21, 2009, BankUnited FSB was closed
by regulators and the Federal Deposit Insurance Corporation
facilitated a sale of the bank to a management team headed by John
Kanas, a veteran of the banking industry and former head of North
Fork Bank, and a group of investors led by W.L. Ross & Co.
BankUnited, FSB, had assets of $12.8 billion and deposits of
$8.6 billion as of May 2, 2009.
The Company and its affiliates filed for Chapter 11 protection
(Bankr. S.D. Fla. Lead Case No. 09-19940) on May 22, 2009.
Stephen P. Drobny, Esq., and Peter Levitt, Esq., at Shutts & Bowen
LLP; Mark D. Bloom, Esq., and Scott M. Grossman, Esq., at
Greenberg Traurig, LLP; and Michael C. Sontag, at Camner, Lipsitz,
P.A., represent the Debtors as counsel. Corali Lopez-Castro,
Esq., David Samole, Esq., at Kozyak Tropin & Throckmorton, P.A.;
and Todd C. Meyers, Esq., at Kilpatrick Stockton LLP, serve as
counsel to the official committee of unsecured creditors.
In its bankruptcy petition, BankUnited Financial Corp. disclosed
$37,729,520 in assets against $559,740,185 in debts. Aside from
those assets, BankUnited said that a "valuable" asset is its $3.6
billion net operating loss carryforward.
Wilmington Trust Co., U.S. Bank, N.A., and the Bank of New York
were listed among the company's largest unsecured creditors in
their roles as trustees for security issues. BankUnited estimated
the Bank of New York claim tied to convertible securities at
$184 million. U.S. Bank and Wilmington Trust are owed
$120 million and $118.171 million on account of senior notes.
BERNARD L. MADOFF: Trustee Slams Madoff Son's Appeal Bid
--------------------------------------------------------
Ian Thoms at Bankruptcy Law360 reports that the trustee
liquidating Bernard L. Madoff's investment firm asked a New York
bankruptcy judge on Friday to prohibit a proposed appeal of a
decision that retained most claims in his $198 million clawback
suit against the convicted con man's family.
On Oct. 6, Andrew Madoff, son of the imprisoned Ponzi schemer,
sought permission to file an interlocutory appeal of U.S.
Bankruptcy Judge Burton Lifland's Sept. 22 decision, in which the
judge dismissed 11 counts in trustee Irving Picard's complaint but
otherwise allowed the case to continue, Law360 relates.
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.
BOCA BRIDGE: Employs Gonano & Harrell as Special Counsel
--------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida has
authorized Boca Bridge LLC to employ and retain Douglas E. Gonano,
Esq. and the firm Gonano & Harrell, Chartered as special counsel
for the Debtor.
The firm can be reached at:
DOUGLAS E. GONANO, ESQ.
Gonano & Harrell, Chartered
1600 S. Federal Highway, Suite 200
Fort Pierce FL 34950
Mr. Gonano will charge the Debtor $485 per hour.
About Boca Bridge LLC
In August 2010, ten creditors owed $69,400 filed an involuntary
Chapter 11 petition (Bankr. S.D. Fla. Case No. 10-34538) against
Boca Bridge LLC, the owner of the Boca Raton Bridge Hotel. In
November, the bankruptcy judge entered ruling placing the Boca
Bridge LLC into Chapter 11. The Debtor disclosed $10,286,336 in
assets and $11,850,060 in liabilities as of the Chapter 11 filing.
Bernice C. Lee, Esq., and Bradley Shraiberg, Esq., at Shraiberg,
Ferrara & Landau, P.A., in Boca Raton, Florida, represent the
Debtor as counsel.
BOISE PAPER: Moody's Upgrades Corporate Family Rating to 'Ba2'
--------------------------------------------------------------
Moody's Investors Service upgraded the corporate family rating
(CFR) of Boise Paper Holdings, L.L.C. (Boise) to Ba2 from Ba3 and
upgraded the company's unsecured notes to Ba3 from B1. A Baa3
rating was assigned to the company's proposed senior secured
revolving credit facility of up to $500 million and a proposed
$200 million senior secured term loan. Moody's also affirmed the
company's SGL-2 speculative grade liquidity rating. The rating
outlook is stable. The upgrade reflects Moody's expectations of
strong credit protection metrics over near-term and the company's
increased focus on the more stable packaging business segment.
Upgrades:
Issuer: Boise Paper Holdings, L.L.C.
-- Corporate Family Rating, Upgraded to Ba2 from Ba3
-- Senior Unsecured Regular Bond/Debenture, Upgraded to Ba3
(LGD5 72%) from B1 (LGD4 68%)
Assignments:
Issuer: Boise Paper Holdings, L.L.C.
-- Senior Secured Bank Credit Facility, Assigned Baa3 (LGD2
19%)
Boise is seeking to refinance its existing $250 million secured
revolver and $163 million secured term loan with a new secured
revolver of up to $500 million and a $200 million secured term
loan. The refinancing is expected to be essentially leverage
neutral, and the revolver is anticipated to be undrawn at close.
The proposed revolver and term loan are guaranteed by operating
subsidiaries and secured by essentially all assets of the company.
The revolver and term loan are rated Baa3, two notches above the
Ba2 corporate family rating, reflecting their preferential
position in Boise's capital structure and the loss absorption
cushion provided by the $600 million of unsecured notes and other
unsecured obligations. The $600 million senior unsecured notes are
rated Ba3, a notch below the assigned CFR, reflecting the note
holder's unsecured position behind the secured debt. The ratings
are subject to the conclusion of the proposed transaction and
Moody's review of final documentation.
RATINGS RATIONALE
The CFR upgrade to Ba2 reflects Boise's strong operating
performance and expectations that the company will be able to
maintain solid credit protection metrics over the cycle. Including
Moody's standard adjustments for items such as operating leases
and pensions, financial leverage (adjusted debt/EBITDA) is
expected to be around 2.5 to 3 times over the next 12 to 18
months. The recent acquisition of Tharco Packaging and the pending
acquisition of Hexacomb, has increased Boise's market position in
the more stable packaging sector and is consistent with the
company's long term strategy to shift the company's product mix
away from paper. Primary credit challenges include the continuing
secular decline in demand in the North American uncoated freesheet
market, the complexity of shifting paper production to other
grades and the expectation of continued acquisitions. The company
is also exposed to volatile fiber and energy costs and the
inherent cyclicality of the paper and packaging industry.
Boise's SGL-2 liquidity rating indicates good liquidity. This is
supported primarily by approximately $244 million of availability
(net of $6 million in letters of credit as of June 30, 2011) under
the company's $250 million senior secured revolving credit
facility that matures in 2013 and approximately $36 million of
cash on-hand (proforma for the Hexacomb acquisition and recent
share repurchases). Moody's estimates Boise will have annual free
cash flow generation of approximately $70 million and will remain
in compliance with its debt covenants over the next 12 month
period. The company has near-term debt maturities of $77 million.
The proposed financing will significantly increase the company's
revolver availability and will improve the company's debt maturity
profile. Most of the company's assets are encumbered.
Boise's stable outlook reflects Moody's mid-term expectation that
the uncoated paper sector will continue to rationalize its supply
base to offset declining demand and maintain above average
pricing. It also reflects Moody's expectation that the company
will be able to offset declining demand in its paper business
through modest acquisitions or by shifting paper production to
other grades. An upgrade may be warranted if the company reduces
debt such that adjusted (RCF-Capex)/Debt approaches 12% with
adjusted Debt/EBITDA around 3x (on a sustainable basis). The
ratings may be downgraded should the company face significant
price and volume deterioration such that normalized adjusted (RCF-
Capex)/Debt drops below 5%.
The principal methodology used in rating Boise was the Global
Paper and Forest Products Industry Methodology, published
September 2009. Other methodologies used include Loss Given
Default for Speculative Grade Issuers in the US, Canada, and EMEA,
published June 2009.
Boise Paper Holdings, L.L.C., an indirect wholly owned subsidiary
of Boise Inc., headquartered in Boise, Idaho, is the third-largest
North American producer in uncoated free sheet paper and has a
significant presence in the markets for linerboard, corrugated
containers, and specialty and premium paper products. Proforma for
the recent Tharco Packaging and announced Hexacomb acquisition,
the company's LTM sales through June 2011 were approximately $2.6
billion, with 43% of sales from communication papers, 42% from
packaging and 15% from paper used for packaging applications (such
as label and release papers and flexible packaging papers).
BRIGHAM EXPLORATION: Inks Tender and Voting Agreements with D&Os
----------------------------------------------------------------
Brigham Exploration Company, on Oct. 17, 2011, entered into an
Agreement and Plan of Merger with Statoil ASA, and Fargo
Acquisition Inc., an indirect wholly owned subsidiary of Parent,
pursuant to which Merger Sub will commence an offer to acquire all
of the outstanding shares of the Company's common stock, par value
$0.01 per share, for $36.50 per Share, net to the stockholders in
cash, without interest.
In connection with the parties' entry into the Merger Agreement,
all of the directors and executive officers of the Company
entered into a Tender and Voting Agreement with Parent and Merger
Sub pursuant to which they have agreed, among other things, to
tender their Shares into the Offer and, if required by applicable
law, to vote their Shares in favor of adopting the Merger
Agreement. The Stockholder Parties have agreed to comply with
certain restrictions on the disposition of those Shares, subject
to the terms and conditions contained in the Tender and Voting
Agreement.
Moreover, the Company entered into Employment and Consulting
Agreements with each of Ben M. Brigham, Eugene B. Shepherd, Jr.,
and David T. Brigham contemporaneously with the execution of the
Merger Agreement. The Consulting Agreements are to be effective
at the initial time Parent accepts for payment Shares validly
tendered and not withdrawn pursuant to the terms and conditions of
the Offer.
The board of directors of the Company has resolved to recommend
that stockholders of the Company tender their Shares into the
Offer and, if necessary, vote to adopt the Merger Agreement.
A full-text copy of the Form 8-K is available for free at:
http://is.gd/yIIWHn
About Brigham Exploration
Austin, Texas-based Brigham Exploration Company (NASDAQ: BEXP)
-- http://www.bexp3d.com/-- is an independent exploration,
development and production company that utilizes advanced
exploration, drilling and completion technologies to
systematically explore for, develop and produce domestic onshore
oil and natural gas reserves. In late 2007, the majority of the
Company's drilling capital expenditures shifted from its
historically active areas in the Onshore Gulf Coast, the Anadarko
Basin and West Texas to the Williston Basin in North Dakota and
Montana, where the Company is currently targeting the Bakken,
Three Forks and Red River objectives.
The Company reported net income of $42.89 million on
$169.72 million of revenue for the year ended Dec. 31, 2010,
compared with a net loss of $122.99 million on $70.34 million of
revenue during the prior year.
The Company's balance sheet at June 30, 2011, showed $1.60 billion
in total assets, $931.54 million in total liabilities and $668.94
million in total stockholders' equity.
* * *
As reported by the TCR on Feb. 18, 2011, Moody's Investors Service
upgraded Brigham Exploration Company's Corporate Family Rating to
B3 from Caa1 and the Probability of Default Rating to B3 from
Caa1. "The primary driver for the upgrade is Brigham's strong
reserve and production growth and significant financial
flexibility," said Francis J. Messina, Moody's Vice President.
"The B3 Corporate Family Rating is prospective and it incorporates
Moody's expectation that the company will significantly increase
proved developed reserves and production rates over the next two
years."
CANO PETROLEUM: Incurs $185.7 Million Net Loss in Fiscal 2011
-------------------------------------------------------------
Cano Petroleum, Inc., filed with the U.S. Securities and Exchange
Commission its Annual Report on Form 10-K reporting a net loss of
$185.70 million on $26.12 million of total operating revenues for
the year ended June 30, 2011, compared with a net loss of
$11.54 million on $22.85 million of total operating revenues
during the prior year.
The Company's balance sheet at June 30, 2011, showed
$65.43 million in total assets, $118.80 million in total
liabilities, and a $53.36 million total stockholders' deficit.
Hein & Associates LLP, in Dallas, Texas, 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.
Bankruptcy Warning
In the past, the Company's strategy had been to convert its
estimated proved undeveloped reserves into proved producing
reserves, improve operational efficiencies in its existing
properties and acquire accretive proved producing assets suitable
for secondary and enhanced oil recovery at low cost. Due to the
Company's current financial constraints, including continued
losses, defaults under the Company's loan agreements and the
Company's Series D Preferred Stock, no available borrowing
capacity, constrained cash flow, negative working capital, and
limited to no other capital availability, the Company is reviewing
strategic alternatives which include the sale of the Company, the
sale of some or all of the Company's existing oil and gas
properties and assets, potential business combinations, debt
restructuring, including recapitalizing the Company, and
bankruptcy. The Company continues to focus on cash management and
cost reduction efforts to improve both its cash flow from
operations and profitability.
A full-text copy of the Form 10-K is available for free at:
http://is.gd/YjZWug
About Cano Petroleum
Cano Petroleum, Inc., is an independent Texas-based energy
producer with properties in the mid-continent region of the United
States. Cano's primary focus is on increasing domestic production
from proven fields using enhanced recovery methods. Cano trades
on the NYSE Amex Stock Exchange under the ticker symbol CFW.
CANO PETROLEUM: Receives Non-Compliance Notice from NYSE Amex
-------------------------------------------------------------
Cano Petroleum, Inc., received a letter from NYSE Amex LLC
indicating that the Exchange has determined that Cano is not in
compliance with Sections 134 and 1101 of the Exchange's Company
Guide due to Cano's failure to timely file its annual report on
Form 10-K for the year ended June 30, 2011, with the Securities
and Exchange Commission. In addition, the Exchange asserted that
Cano's failure to timely file its Annual Report is a material
violation of its listing agreement with the Exchange. Pursuant to
the Exchange's rules, Cano has until Oct. 28, 2011, to submit a
plan advising the Exchange of actions it has taken, or will take,
that would bring Cano back into compliance with Sections 134 and
1101 of the Company Guide by no later than Jan. 12, 2012.
The Company filed its Annual Report on Oct. 20, 2011.
About Cano Petroleum
Cano Petroleum, Inc., is an independent Texas-based energy
producer with properties in the mid-continent region of the United
States. Cano's primary focus is on increasing domestic production
from proven fields using enhanced recovery methods. Cano trades
on the NYSE Amex Stock Exchange under the ticker symbol CFW.
The Company reported a net loss of $185.70 million on $26.12
million of total operating revenues for the year ended June 30,
2011, compared with a net loss of $11.54 million on $22.85 million
of total operating revenues during the prior year.
The Company's balance sheet at June 30, 2011, showed $65.43
million in total assets, $118.80 million in total liabilities and
a $53.36 million total stockholders' deficit.
Hein & Associates LLP, in Dallas, Texas, 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.
Bankruptcy Warning
In the past, the Company's strategy had been to convert its
estimated proved undeveloped reserves into proved producing
reserves, improve operational efficiencies in its existing
properties and acquire accretive proved producing assets suitable
for secondary and enhanced oil recovery at low cost. Due to the
Company's current financial constraints, including continued
losses, defaults under the Company's loan agreements and the
Company's Series D Preferred Stock, no available borrowing
capacity, constrained cash flow, negative working capital, and
limited to no other capital availability, the Company is reviewing
strategic alternatives which include the sale of the Company, the
sale of some or all of the Company's existing oil and gas
properties and assets, potential business combinations, debt
restructuring, including recapitalizing the Company, and
bankruptcy. The Company continues to focus on cash management and
cost reduction efforts to improve both its cash flow from
operations and profitability.
CAPSALUS CORP: To Buy 100% of GeneWize Stock for $5 Million
-----------------------------------------------------------
Capsalus Corp. has finalized the definitive agreement with leading
biosciences company GeneLink Biosciences, Inc., to acquire 100% of
the stock of its wholly owned direct-selling subsidiary GeneWize
Life Sciences, Inc., pending GeneLink shareholder approval and
other related terms. The deal, Capsalus' third in less than a
year, will provide immediate revenues.
Subject to the terms and conditions of this agreement, Capsalus
has agreed to purchase all of the issued and outstanding capital
stock of GeneWize, from its parent, GeneLink, for $500,000 plus an
earn-out. The earn-out is the greater of (a) $25,000 per month or
(b) 15% of the gross revenues generated by GeneWize during the
preceding month. The earn-out will be paid to GeneLink beginning
the second month following the Closing Date and ending 60 months
thereafter. The total consideration to be paid by Capsalus for
the Shares will not exceed an aggregate of $5,000,000 including
the $500,000 and the earn-out.
Between the execution of this agreement and the close of the Stock
Purchase Agreement, Capsalus will, subject to certain rights of
GeneLink, assume all management responsibilities and control of
all assets and liabilities of GeneWize and its business. During
this Interim Period Capsalus will receive as compensation for its
management services all profits earned by GeneWize beginning
Oct. 1, 2011, and ending with the closing of the Stock Purchase
Agreement
Noteworthy investors backing Capsalus in financing the transaction
include New York-based asset management firm, Wharton Equity
Partners, as well as former National Football League quarterbacks
Bernie Kosar and Gary Danielson. With their collective
participation, Capsalus plans to bring not only financial support
to GeneWize, but also hands-on operational expertise and strategic
development opportunities.
From the outset, GeneWize is expected to be a key driver in
significantly enhancing Capsalus shareholder value in the near
term. Earning distinction as the first network sales company to
focus on providing individually customized nutritional
formulations based on a consumer's personal DNA assessment,
GeneWize generated more than $25 million in revenues over the past
three years.
The deal secures Capsalus' stake in the combined $20 billion
market of skin care, weight management and wellness supplements in
the U.S. The relationship with GeneWize adds to Capsalus' track
record of sourcing opportunities and consummating investments in
promising developing stage enterprises offering innovative
products and services in fast-growing segments of the wellness
sector.
"Over the course of finalizing this deal and ramping up operating
plans, we have been impressed by the leadership of GeneWize
President Sharon Tahaney and her team," said Capsalus interim CEO
Steven M. Grubner. "Considering their current outstanding
performance in the market combined with our operating
capabilities, professional resources and financial support, we are
already off to a great start in paving a clear path for rapid
expansion."
Added GeneWize's Tahaney, "What we had hoped for when we embarked
on this exploration is being realized in terms of overall business
optimization potential. With this deal we are bringing together
extraordinary science and business expertise to take our company
to the next level through a distinctly robust strategy combining
consumer genetics with social marketing."
GeneWize is a significant addition to the family of Capsalus'
companies across the consumer products, media and technology,
biotechnology and healthcare industry spectrum, including Wish
Upon a Hero, the world's largest online social helping network,
connecting people in need with people who can help; Guava
Healthcare, specializing in customized in-home, non-medical and
medical staffing and services to clients across the age spectrum,
listed among Entrepreneur's "Franchise 500" this year and last;
White Hat Brands, an emerging player in the branded consumer
products market; and PanTheryx, creating and selling biologics,
pharmaceuticals and medical products to the expanding healthcare
professional market in India.
Simultaneously with the signing of the Stock Purchase Agreement
and the Interim Management Agreement, a License and Distribution
Agreement was entered into between GeneLink and Gene Elite LLC., a
Delaware limited liability company. The managing director and a
principal membership holder in Gene Elite is a director and major
shareholder of Capsalus and therefore may be considered an
"affiliate" of Capsalus. Under the LDA, both Capsalus and
GeneWize are listed as approved sub-distributors to market the
GeneLink Nutritional System and the GeneLink Skin Care System for
the direct sales and multi level marketing industries. The
closing of the LDA is subject to, among other conditions, the
approval of the GeneLink shareholders of the sale of GeneWize to
Capsalus and to the payment of $1,000,000 by Gene Elite to
GeneLink, of which $500,000 will be credited to Capsalus' $500,000
obligation pursuant to its Stock Purchase Agreement with GeneLink.
A full-text copy of the Stock Purchase Agreement is available for
free at http://is.gd/ZfdjOH
About Capsalus Corp.
Atlanta, Ga.-based Capsalus Corp. offers a broad range of
solutions to global health problems. WhiteHat Holdings, LLC, was
acquired on April 14, 2010. In combining with WhiteHat, the
Company is creating a new, consumer-driven business unit, the
Nutritional Products Division, focused on healthy food and
beverages.
The Company reported a net loss of $16.02 million for the year
ended Dec. 31, 2010, compared with a net loss of $10.89 million
during the prior year.
The Company's balance sheet at June 30, 2011, showed $4.63 million
in total assets, $6.06 million in total liabilities, and a
$1.42 million total stockholders' deficit.
As reported by the TCR on April 21, 2011, Moquist Thorvilson
Kaufmann Kennedy & Pieper LLC, in Edina, Minnesota, 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 losses
from operations since its inception.
CB HOLDING: Punts on Disclosure, Has Exclusivity
------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the former operator of Charlie Brown's Steakhouse
restaurants said that court approval of the liquidating Chapter 11
plan should be "largely consensual." Nonetheless, the Oct. 18
hearing for approval of the explanatory disclosure statement was
pushed back to a date to be determined.
According to Mr. Rochelle, in the meantime, the court approved an
extension until Dec. 12 of the period within which only the
company can file a plan.
The disclosure hearing was originally scheduled for Sept. 9. The
company completed sales of the three branches of the business
between April and July. The plan would distribute proceeds in
line with priorities in bankruptcy law.
About CB Holding
New York-based CB Holding Corp. operated 20 Charlie Brown's
Steakhouse, 12 Bugaboo Creek Steak House, and seven The Office
Beer Bar and Grill restaurants when it filed for bankruptcy
protection. The Company closed 47 locations before filing for
Chapter 11.
CB Holding and its affiliates filed for Chapter 11 bankruptcy
protection (Bankr. D. Del. Case No. 10-13683) on Nov. 17, 2010.
After filing for Chapter 11, CB Holding sold 20 Charlie Brown's
locations for $9.5 million. The 12 remaining Bugaboo Creek stores
realized $10.05 million while the seven The Office Restaurants
produced $4.675 million.
Joel H. Leviton, Esq., Stephen J. Gordon, Esq., Richard A.
Stieglitz Jr., Esq., and Maya Peleg, Esq., at Cahill Gordon &
Reindel LLP, in New York; and Mark D. Collins, Esq., Christopher
M. Samis, Esq., and Tyler D. Semmelman, Esq., at Richards, Layton
& Finger, P.A., in Wilmington, Delaware, assist the Debtors in
their restructuring effort. The Garden City Group, Inc., is the
Debtors' notice, claims and solicitation agent.
Jeffrey N. Pomerantz, Esq., at Pachulski Stang Ziehl & Jones LLP,
in Los Angeles; and Bradford J. Sandler, Esq., at Pachulski Stang
Ziehl & Jones LLP, in Wilmington, Delaware, represent the
Official Committee of Unsecured Creditors.
CB Holding estimated its assets at $100 million to $500 million
and debts at $50 million to $100 million. At the outset of the
Chapter 11 case, the lenders were owed $70.2 million.
CDC CORP: Section 341(a) Meeting Scheduled for Nov. 15
------------------------------------------------------
The U.S. Trustee for Region 21 will convene a meeting of creditors
of CDC Corporation on Nov. 15, 2011, at 11:00 a.m. The meeting
will be held at Third Floor ? Room 365, Russell Federal Building,
75 Spring Street SW, Atlanta, Georgia.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
CDC Corporation, doing business as Chinadotcom, filed a Chapter 11
petition (Bankr. N.D. Ga. Case No. 11-79079) on Oct. 4, 2011.
James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout, PA,
in Atlanta, Georgia, serves as counsel. The Debtor estimated
assets and debts at $100 million to $500 million.
CENTURY PLAZA: Files for Chapter 11 in Indiana
------------------------------------------
Carla Main at Bloomberg News reports that Century Plaza LLC filed
for Chapter 11 bankruptcy protection (Bankr. N.D. Ind. 11-24075)
in Hammond, Indiana, on Oct. 18, declaring assets and debts each
in the range of $10 million to $50 million. The Company, based in
Merrillville, Illinois, estimates there will be funds to pay
unsecured creditors, according to court papers. A meeting of
creditors is set for Dec. 2 in Hammond.
CHEF SOLUTIONS: Donlin Recano Retained as Claims Agent
------------------------------------------------------
Donlin, Recano & Company, Inc. on Oct. 24 disclosed that it has
been retained to provide claims agent services to Chef Solutions
Holdings, LLC in its Chapter 11 cases.
About Donlin Recano
Donlin Recano -- http://www.donlinrecano.com-- is a provider of
claims, noticing, balloting, solicitation and technology
solutions. The company also provides bondholder identification
services, pre-pack bankruptcy solicitation and balloting, crisis
communications, financial printing services and call center
services through one of the largest and most technologically
advanced call centers in the country. It is a division of DF King
Worldwide, a financial communications, proxy solicitation and
stakeholder management company, serving over 1,000 public company,
mutual fund family and private equity firm clients domiciled in
North America, Europe and Asia.
About Chef Solutions
Chef Solutions Inc., through subsidiary Orval Kent Food, is the
second largest manufacturer in North America of fresh prepared
foods for retail, foodservice and commercial channels.
Chef Solutions and its affiliates filed for Chapter 11 protection
(Bankr. D. Del. Case No. 11-13139) on Oct. 4, 2011, with the aim
of selling the business to a joint venture between Mistral Capital
Management LLC and Reser's Fine Foods Inc. The Debtor estimated
assets and debts both exceeding $100 million.
Judge Kevin Gross presides over the case. Lawyers at Richards,
Layton & Finger, P.A., serve as the Debtors' bankruptcy counsel.
Donlin Recano is the claims and notice agent. Piper Jaffray & Co.
has been hired as investment banker. PricewaterhouseCoopers
serves as financial advisor.
Judge Gross has authorized Chef Solutions to borrow $9 million to
fund operations as the Company gears up to sell its assets.
A joint venture between Mistral Capital Management LLC and Reser's
Fine Foods Inc. has signed a contract to buy the business for
$36.4 million in cash and $25.3 million in secured debt. The deal
is subject to higher and better offers.
Lowenstein Sandler PC represents the creditors' committee
appointed in the case.
CHEF SOLUTIONS: Hires PricewaterhouseCoopers as Financial Advisor
-----------------------------------------------------------------
Chef Solutions Inc. asks permission from the U.S. Bankruptcy Court
for the District of Delaware to employ PricewaterhouseCoopers LLP
as financial advisor.
Upon retention, the firm will, among other things:
a) assist the Debtors' finance personnel in the review of the
Debtors' business, including but not limited to a review of
the financial assessment of financial information that has
been, and that will be provided by the Debtors to their
creditors, including without limitation, the Debtors' short
and long-term cash flows and business plans;
b) assist the Debtors in the preparation, review and analysis
of their liquidity and cash management; and
c) assist in the management and analysis required under the
Debtors' post-petition financing facilities.
PwC received payment of $225,000 during the 90 days prior to the
Petition Date. As of the Petition Day, the Debtors owed PwC
approximately $180,000 for services. PwC agrees to waive these
fees upon approval of the retention.
The firm's rates are:
Personnel Rates
--------- -----
Partners/Managing Directors $610-$790
Director/Manager $435-$560
Senior Associate/Associate $305-$360
Paraprofessional Staff $110-$200
PwC will also bill the Debtors for reasonable out-of-pocket
expenses and internal per-ticket charges for booking travel
Perry M. Mandarino, partner of PricewaterhouseCoopers LLP, attests
that the firm is a "disinterested person," as that term is defined
in section 101(14) of the Bankruptcy Code.
About Chef Solutions
Chef Solutions Inc., through subsidiary Orval Kent Food, is the
second largest manufacturer in North America of fresh prepared
foods for retail, foodservice and commercial channels.
Chef Solutions and its affiliates filed for Chapter 11 protection
(Bankr. D. Del. Case No. 11-13139) on Oct. 4, 2011, with the aim
of selling the business to a joint venture between Mistral Capital
Management LLC and Reser's Fine Foods Inc. The Debtor estimated
assets and debts both exceeding $100 million.
Judge Kevin Gross presides over the case. Lawyers at Richards,
Layton & Finger, P.A., serve as the Debtors' bankruptcy counsel.
Donlin Recano is the claims and notice agent. Piper Jaffray & Co.
has been hired as investment banker. PricewaterhouseCoopers
serves as financial advisor.
Judge Gross has authorized Chef Solutions to borrow $9 million to
fund operations as the Company gears up to sell its assets.
A joint venture between Mistral Capital Management LLC and Reser's
Fine Foods Inc. has signed a contract to buy the business for
$36.4 million in cash and $25.3 million in secured debt. The deal
is subject to higher and better offers.
Lowenstein Sandler PC represents the creditors' committee
appointed in the case.
CHRYSLER LLC: Old Chrysler Liquidators Reach Deal Over Wis. Plant
-----------------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that the liquidating
trust for the bankrupt remnants of Chrysler LLC on Thursday
reached a settlement in New York bankruptcy court of environmental
claims Wisconsin and the federal government filed over a former
engine plant.
According to Law360, the deal means the 107-acre property, which
is currently out of use and potentially contaminated, will be
transferred from the Old Carco LLC liquidating trust to the city
of Kenosha, Wis. ? also a plaintiff in the suit ? ready for
demolition and environmental cleanup.
About Chrysler
Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram
Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles
and products. Headquartered in Auburn Hills, Michigan, Chrysler
Group LLC's product lineup features some of the world's most
recognizable vehicles, including the Chrysler 300, Jeep Wrangler
and Ram Truck. Fiat will contribute world-class technology,
platforms and powertrains for small- and medium-sized cars,
allowing Chrysler Group to offer an expanded product line
including environmentally friendly vehicles.
Chrysler LLC and 24 affiliates on April 30, 2009, sought Chapter
11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead
Case No. 09-50002). Chrysler hired Jones Day, as lead counsel;
Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory
Group LLC, and Greenhill & Co. LLC, for financial advisory
services; and Epiq Bankruptcy Solutions LLC, as its claims agent.
Chrysler has changed its corporate name to Old CarCo following its
sale to a Fiat-owned company. As of Dec. 31, 2008, Chrysler
had $39,336,000,000 in assets and $55,233,000,000 in debts.
Chrysler had $1.9 billion in cash at that time.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat. As part of the
deal, Fiat acquired a 20% equity interest in Chrysler Group.
Under the terms approved by the Bankruptcy Court, the company
formerly known as Chrysler LLC on June 10, 2009, formally sold
substantially all of its assets, without certain debts and
liabilities, to a new company that will operate as Chrysler Group
LLC.
The U.S. and Canadian governments provided Chrysler with
$4.5 billion to finance its bankruptcy case. Those loans were
repaid with the proceeds of the bankruptcy estate's liquidation.
In April 2010, the Bankruptcy Court confirmed Chrysler's repayment
plan.
Post-bankruptcy, Fiat has since raised its stake to 53.5% after
snapping up the U.S. government's remaining interest in July 2011.
CHURCH OF GOD: Mortgage Broker Cleared From Loan Dispute
--------------------------------------------------------
In February 2004, Joseph King, Jr., the Senior Pastor of Church of
God In Christ #2, and Timothy Russell, the Senior Pastor of Word 2
Heart Ministries, executed a Letter of Intent to Merge Non-Profit
Entities to merge Church of God and Word into a newly merged
entity to be named in a merger agreement. Though the merger did
not take place, never being approved by the vote of the membership
of Church of God, Mr. Russell was designated Co-Pastor of Church
of God, and his sister, Jamesetta Russell, was designated as Chief
Financial Officer.
Around the same time Mr. Russell contacted Daniel Aranda at BDM
Mortgage Services, Inc., a mortgage broker, to negotiate a loan
for Church of God. Mr. Aranda requested certain information and
documentation from Russell, including a copy of Church of God's
By-Laws. He did not request or obtain a Statement of Officers of
Church of God from the Secretary of State of California. Mr.
Aranda did not read Church of God's By-Laws but forwarded them to
the title company that was going to be involved in the loan
transactions.
BDM brokered and thereafter serviced a loan of $238,000 from third
party lenders to Church of God. Mr. Russell provided BDM with a
Letter of Resolution that reflected that Church of God's board had
authorized BDM to arrange a loan of $215,000, secured by Church of
God's real estate on Turk Street in San Francisco. The Letter of
Resolution purported to authorize Russell and Jamesetta Russell to
execute all loan documents. Mr. Russell signed Mr. King's name.
There is no evidence that Mr. King knew that Mr. Russell did so.
There is no evidence that Church of God's Board approved or
ratified this loan.
In June 2005, BDM brokered a second loan to Church of God, this
time for $84,500. Mr. Russell again signed Mr. King's name to a
Letter of Resolution that was similar to the earlier one. There
is no evidence that Mr. King knew that Mr. Russell did so. There
is no evidence that Church of God's Board approved or ratified
this loan.
In January 2006, BDM brokered a third loan whereby Church of God
borrowed $372,500, most of which went to refinance the First Loan
and the Second Loan and out of which Church of God received a net
of just over $30,000. There is no evidence that Church of God's
Board approved or ratified this loan. At the time of the Third
Loan the First Loan and the Second Loan were both current. BDM
received payments on the Third Loan for several months before the
loan went into default.
Shortly after the First Loan was funded a letter dated May 3,
2004, was executed wherein King Mr. purported to authorize Mr.
Russell to act on his behalf as Chief Executive Officer of Church
of God and authorized him to procure funds to be secured by the
Church for purposes of remodeling and maintaining the property and
establishing new programs. There is no evidence that the May 3,
2004, letter was provided to BDM until October 2006, after all
three loans had been funded. In fact, Mr. Aranda could not recall
when he first saw the letter or if and when he relied on it to
make any of the three loans. He did not request it.
Church of God commenced an adversary proceeding on Oct. 17, 2008,
against BDM, saying BDM acted negligently and breached a fiduciary
duty. Church of God contends that because the three loans were
never properly authorized in accordance with its By-Laws, that BDM
is liable to it for a total amount which it is obligated to pay
the lenders who made it, plus the amount of money it borrowed from
others to service the BDM loans, plus attorneys fees incurred in
state court proceedings and in bankruptcy court. Church of God
contends that BDM owed it a fiduciary duty that gives rise to this
liability; in the alternative it contends that BDM negligently
permitted Church of God, primarily through the actions of Mr.
Russell, to borrow the funds when it was unable to pay for them.
BDM disputes the allegations. BDM contends that regardless of its
conduct, it was not the proximate cause of Church of God's loss --
Mr. Russell was. It argues that even if BDM breached a fiduciary
duty or was negligent, that conduct did not cause compensable
damages it should pay.
In an Oct. 20, 2011 Memorandum Decision, Judge Dennis Montali
acknowledged that BDM's conduct was not admirable and it should
have been more careful in following basic principles of knowing
who its borrower was and what that borrower was or was not
authorizing. Despite that conduct it did not cause Church of God
harm such that it should be held accountable under the theories
presented. Had Mr. Russell asked that the loan proceeds be
diverted to a separate account or discussed his plans with Mr.
Aranda the results might be otherwise. The compensable harm was
caused by Mr. Russell, Jamesetta Russell or Word, and BDM was not
their guarantor. Stated otherwise, facilitating unauthorized
loans that largely benefited Church of God does not impose strict
liability for wrongful conduct by the wrongdoers who diverted some
of the loan proceeds.
The case is CHURCH OF GOD CHRIST #2, dba LITTLE CHURCH OF GOD IN
CHRIST, a California Corporation, v. BDM MORTGAGE SERVICES, INC.,
a California Corporation, et al., Adv. Proc. No. 08-3126DM (Bankr.
N.D. Calif.). A copy of the Court's decision is available at
http://is.gd/JAZeusfrom Leagle.com.
Church of God in Christ #2, dba Little Chapel Church of God in
Christ, in San Francisco, California, filed for Chapter 11
bankruptcy (Bankr. N.D. Calif. Case No. 08-30750) on May 1, 2008.
Judge Dennis Montali presides over the case. Ruth Elin Auerbach,
Esq. -- Email: attorneyruth@sbcglobal.net -- serves as the
Debtor's counsel. In its petition, the Debtor listed assets of
$2,613,690 and debts of $534,000.
CLAIRVEST GROUP: Emerges From Chapter 11 Protection
---------------------------------------------------
Clairvest Group Inc., Clairvest Equity Partners IV Limited
Partnership and Clairvest Equity Partners IV-A Limited Partnership
disclosed that Centaur, LLC and its affiliated debtors emerged
from Chapter 11 protection on October 1, 2011, and implemented its
court-approved Plan of Reorganization. Per the terms of the Plan,
pre-petition first lien debt holders received a combination of
cash and securities in the reorganized Company, which is known as
Centaur Holdings, LLC. Through its operating subsidiaries,
Centaur holds various gaming interests including the Hoosier Park
Racing & Casino in Anderson, Indiana.
As holders of US$141.0 million face principal value of pre-
petition first lien debt, Clairvest, CEP IV and co-investors
received the following: approximately US$23.0 million in cash,
US$59.2 million in new first lien secured notes, US$22.2 million
in new second lien secured notes and US$18.5 million in unsecured
term loan with stapled warrants, which, subject to regulatory
approval, are convertible upon exercise into 35.8% of the
Company's Class A units prior to the effect of any management
incentive (Class M) units.
"We are very pleased that Centaur has completed this important
step. We look forward to supporting management as they continue
to do what they do best: providing a high-quality racing and
gaming experience to their clientele in the greater Indianapolis
area," said Michael Wagman, Managing Director of Clairvest.
In exchange for its US$39.1 million face principal value in
Centaur's first lien debt which had a total cost of US$35.1
million, Clairvest received approximately US$6.4 million in cash,
US$16.4 million in new first lien secured notes, US$6.2 million in
new second lien secured notes and US$5.1 million in unsecured term
loan with stapled warrants, convertible upon exercise (following
regulatory approval) into 9.9% of the Class A units in Centaur.
About Clairvest
Clairvest Group Inc. is a private equity management firm which
invests its own capital, and that of third parties through the
Clairvest Equity Partners limited partnerships, in businesses that
have the potential to generate superior returns. In addition to
providing financing, Clairvest contributes strategic expertise and
execution ability to support the growth and development of its
investee partners. Clairvest realizes value through investment
returns and the eventual disposition of its investments.
COMPASS DIVERSIFIED: Moody's Keeps 'Ba3' After Staffmark Sale
-------------------------------------------------------------
Moody's Investors Service says Compass Diversified Holdings'
announcement that it has sold its staffing business, Staffmark,
does not affect its ratings or stable outlook at this time. The
ratings are: CFR at Ba3, PDR at B1, revolver at Ba1, term loan at
B1 and speculative-grade liquidity rating at SGL 3.
RATINGS RATIONALE
The principal methodology used in rating Compass was the Global
Consumer Durables rating methodology published in October 2010.
Moody's Special Comment, "Analytical Considerations in Assessing
Conglomerates" published in September 2007 was also used as an
analytical resource.
Compass holds majority ownership interests in eight distinct
unrelated operating subsidiaries: Advanced Circuits, American
FurnitureManufacturing, Anodyne Medical Devices, Fox Factory, Halo
Branded Solutions, Liberty Safe, ERGObaby and Camelbak. Its
strategy is to acquire and manage businesses that operate in
industries with long term macroeconomic growth opportunities and
have positive and stable cash flows. The company reported revenue
of approximately $1 billion for the twelve months ended June 30,
2011 (pro forma for Camelbak acquisition and sale of Staffmark).
CONGRESSIONAL HOTEL: U.S. Trustee Unable to Form Committee
----------------------------------------------------------
The United States Trustee said that an official committee under 11
U.S.C. Sec. 1102 has not been appointed in the bankruptcy case of
Congressional Hotel because an insufficient number of persons
holding unsecured claims against the Debtor expressed interest in
serving on a committee. The U.S. Trustee reserves the right to
appoint such a committee should interest developed among the
creditors.
About Congressional Hotel and CASCO Hotel Group
Casco Hotel Group, LLC, owns the Legacy Hotel in Rockville,
Maryland. Congressional Hotel Corporation is a holdover tenant on
the Property and manages the Property on behalf of CASCO. The
hotel was previously known as Ramada Inn.
Congressional Hotel filed for Chapter 11 relief (Bankr. D. Md.
Case No. 11-26732) on Aug. 15, 2011. CASCO filed for Chapter 11
relief (Bankr. D. Md. Case No. 11-26880) two days later.
CASCO is a single-asset real estate company. Casco Hotel
disclosed $17,810,966 in assets and $14,053,752 in liabilities as
of the Chapter 11 filing. Congressional Hotel scheduled $709,121
in assets and $19,883,667 in debts. James Greenan, Esq., at
McNamee Hosea, represents Congressional Hotel.
Congressional Hotel previously filed for Chapter 11 bankruptcy
(Bankr. D. Md. Case No. 09-17901) on May 3, 2009. James Greenan,
Esq., at McNamee Hosea represented the Debtor in its restructuring
efforts. The 2009 petition estimated the Debtor's assets and
debts from $10 million to $50 million. The case was dismissed on
May 18, 2011, at the request of creditor Mervis Diamond Corp. But
a resolution couldn't be confirmed with Mervis Diamond and other
creditors, prompting Congressional Hotel to seek Chapter 11
protection again.
CORNERSTONE BANCSHARES: Posts $523,668 Net Income in 3rd Quarter
----------------------------------------------------------------
Cornerstone Bancshares, Inc., reported net income of $523,668 on
$5.11 million of total interest income for the three months ended
Sept. 30, 2011, compared with net income of $213,674 on
$5.93 million of total interest income for the same period during
the prior year.
The Company also reported net income of $917,230 on $15.49 million
of total interest income for the nine months ended Sept. 30, 2011,
compared with net income of $575,607 on $19.76 million of total
interest income for the same period a year ago.
The Company reported a net loss of $4.71 million on $25.21 million
of total interest income for the year ended Dec. 31, 2010,
compared with a net loss of $8.17 million on $26.31 million of
total interest income during the prior year.
The Company's balance sheet at Sept. 30, 2011, showed
$426.36 million in total assets, $393.91 million in total
liabilities, and $32.44 million in total stockholders' equity.
"I'm extremely pleased with the progress made thus far and where
we stand today," said Cornerstone's President Frank Hughes. "At
every level and in every department, our Cornerstone team has
really pulled together and put forth the effort to help us regain
our solid earnings footprint and return to greater profitability."
A full-text copy of the press release announcing the financial
results is available for free at http://is.gd/ZxWkE6
About Cornerstone Bancshares
Chattanooga, Tenn.-based Cornerstone Bancshares, Inc. is a bank
holding company. Its wholly-owned subsidiary, Cornerstone
Community Bank, is a Tennessee-chartered commercial bank with five
full-service banking offices located in Hamilton County,
Tennessee.
Consent Order
The Company disclosed in 10-Q for the quarter ended June 30, 2010,
that following the issuance of a written report by the Federal
Deposit Insurance Corporation and the Tennessee Department of
Financial Institutions concerning their joint examination of
Cornerstone Community Bank in October 2009, the Bank entered a
consent order with the FDIC on April 2, 2010, and a written
agreement with the TDFI on April 8, 2010, each concerning areas of
the Bank's operations identified in the report as warranting
improvement and presenting substantially similar plans for making
those improvements.
The consent order and written agreement, which the Company
collectively refers to as the "Action Plans", convey specific
actions needed to address certain findings from the joint
examination and to address the Company's current financial
condition. The Action Plans contain a list of strict requirements
ranging from a capital directive, which requires the Company to
achieve and maintain minimum regulatory capital levels in excess
of the statutory minimums to be well-capitalized, to developing a
liquidity risk management and contingency funding plan, in
connection with which the Company will be subject to limitations
on the maximum interest rates it can pay on deposit accounts.
The Action Plans also contain restrictions on future extensions of
credit and requires the development of various programs and
procedures to improve the Company's asset quality as well as
routine reporting on its progress toward compliance with the
Action Plans to the Board of Directors, the FDIC and the TDFI.
As of April 2, 2010, the date of the Action Plans, the Bank was
deemed to be "adequately capitalized."
DPAC TECHNOLOGIES: Stephen Vukadinovich Appointed President
-----------------------------------------------------------
The Board of Directors of DT Sale Corp., formerly known as DPAC
Technologies Corp., at a meeting held on Oct. 17, 2011, appointed
Stephen J. Vukadinovich, the Company's current Chief Financial
Officer, as President of the Company. Mr. Vukadinovich will
continue to serve as the Company's Chief Financial Officer, which
position he has held since 2004, having previously served as
Controller since May of 2000.
Effective midnight, Oct. 17, 2011, Mr. Sam Tishler resigned as
Chairman and as a member, and Messrs. Mark Chapman and Dennis
Leibel resigned as members, of the Board of Directors of the
Company. The resignations were rendered in connection with the
dissolution and wind down of the Company's business pursuant to
Plan of Complete Liquidation and Dissolution previously reported
in the Company's Current Reports on Form 8-K filed Aug. 9, 2011,
and Oct. 18, 2011.
About DPAC Technologies
Hudson, Ohio-based DPAC Technologies Corp. (OTC QB: DPAC)
-- http://www.quatech.com/-- through its wholly owned subsidiary,
Quatech, Inc., designs, manufactures, and sells device
connectivity and device networking solutions for a broad market.
Quatech sells its products through a global network of
distributors, system integrators, value added resellers, and
original equipment manufacturers. The Company sells to customers
in both domestic and foreign markets.
DPAC, together with its wholly owned subsidiary Quatech, Inc., on
Aug. 3, 2011, entered into an Asset Purchase Agreement with B&B
Electronics Manufacturing Company and its wholly owned subsidiary,
Q-Tech Acquisition, LLC. The Asset Purchase Agreement provides
for the sale of substantially all of the assets of Quatech for
$10.5 million in cash. In connection with the Asset Purchase
Agreement, each of Fifth Third Bank, N.A., and the State of Ohio,
as lenders to DPAC and Quatech, entered into forbearance
agreements with DPAC and Quatech, pursuant to which each consented
to DPAC and Quatech entering into the Asset Purchase Agreement and
agreed to forbear from exercising certain rights under their
respective loan agreement with DPAC and Quatech until the closing
has occurred or the Asset Purchase Agreement has terminated.
The Company's balance sheet at June 30, 2011, showed $9.69 million
in total assets, $7.20 million in total liabilities and $2.48
million in total stockholders' equity.
The Company said certain conditions exist that raise substantial
doubt about its ability to continue as a going concern. These
conditions include recent operating losses, deficit working
capital balances and the inherent risk in extending or refinancing
the Company's bank line of credit, which matures on Sept. 5, 2011.
As reported by the TCR on May 24, 2011, Maloney + Novotny in
Cleveland, Ohio, expressed substantial doubt about DPAC
Technologies' ability to continue as a going concern, following
the Company's 2010 results. The independent auditors noted that
of the Company's continued operating losses, deficit working
capital balances and the inherent risk in extending or refinancing
its bank line of credit, which matures on May 31, 2011.
DYNEGY INC: Extending $1.2 Billion Exchange Offers to Oct. 27
-------------------------------------------------------------
Dynegy Inc. is extending the previously announced offers to
exchange up to $1,250,000,000 principal amount of the outstanding
notes, debentures and capital income securities of Dynegy
Holdings, LLC, its direct, wholly-owned subsidiary, for Dynegy's
new 10% Senior Secured Notes due 2018 and cash to midnight, New
York City time, on Oct. 27, 2011, unless further extended or
earlier terminated by Dynegy. The Exchange Offers were previously
scheduled to expire at midnight, New York City time, on Oct. 20,
2011. The withdrawal deadline for the Exchange Offers expired at
5:00 p.m., New York City time, on Oct. 18, 2011, and has not been
extended.
Through 5:00 p.m., New York City time, on Oct. 20, 2011, holders
had validly tendered and not withdrawn approximately:
(i) $1.1 million aggregate principal amount of the 7.625%
Senior Debentures due 2026,
(ii) $0.9 million aggregate principal amount of the 7.750%
Senior Unsecured Notes due 2019,
(iii) $5,000 aggregate principal amount of the 7.125% Senior
Debentures due 2018,
(iv) $1.8 million aggregate principal amount of the 8.375%
Senior Unsecured Notes due 2016,
(v) $2.7 million aggregate principal amount of the 7.50% Senior
Unsecured Notes due 2015,
(vi) $0.2 million aggregate principal amount of the 8.750%
Senior Notes due 2012 and
(vii) $84.1 million aggregate principal amount of the Series B
8.316% Subordinated Capital Income Securities due 2027.
The Exchange Offers are made only by and pursuant to the terms of
the Offering Circular dated Sept. 15, 2011, and the accompanying
Letter of Transmittal. Except for the change in Expiration Date,
the terms and conditions of the Exchange Offers remain unchanged.
Credit Suisse Securities (USA) LLC serves as lead dealer manager,
and Barclays Capital Inc., Deutsche Bank Securities Inc.,
Jefferies & Company, Inc., and Lazard Capital Markets LLC serve as
co-dealer managers and D.F. King & Co., Inc., serves as the
exchange agent and information agent for the Exchange Offers.
Requests for documents, including the Offering Circular and Letter
of Transmittal, may be directed to D.F. King & Co., Inc., by
telephone at (212) 269-5550 (brokers and banks) or (800) 697-6975
(all others) or in writing at 48 Wall Street, 22nd Floor, New
York, New York 10005. Questions regarding the Exchange Offers may
be directed to Credit Suisse Securities (USA) LLC at (800) 820-
1653 (toll free) or (212) 538-2147 (collect).
About Dynegy Inc.
Through its subsidiaries, Houston, Texas-based Dynegy Inc.
(NYSE:DYN) -- http://www.dynegy.com/-- produces and sells
electric energy, capacity and ancillary services in key U.S.
markets. The power generation portfolio consists of approximately
12,200 megawatts of baseload, intermediate and peaking power
plants fueled by a mix of natural gas, coal and fuel oil.
Failed Sale
The Troubled Company Reporter has chronicled Dynegy's attempts to
sell itself. In August 2010, Dynegy struck a deal to be acquired
by an affiliate of The Blackstone Group at $4.50 a share or
roughly $4.7 billion. That offer was raised to $5.00 a share in
November. Through Carl Icahn and investment fund Seneca's
efforts, shareholders thumbed down both offers.
In December 2010, an affiliate of Icahn commenced a tender offer
to purchase all of the outstanding shares of Dynegy common stock
for $5.50 per share in cash, or roughly $665 million in the
aggregate. In February 2011, Icahn Enterprises L.P. terminated
the proposed merger agreement with the Company after it failed to
garner the required number of shareholder votes.
Goldman, Sachs & Co. and Greenhill & Co., LLC, served as financial
advisors and Sullivan & Cromwell LLP served as legal counsel to
Dynegy on the sale efforts.
Bankruptcy Warning
Dynegy warned shareholders in March it might be forced into
bankruptcy if it is unable to renegotiate the terms of its
existing debt.
The Company's balance sheet at March 31, 2011, showed $9.82
billion in total assets, $7.15 billion in total liabilities and
$2.67 billion in total stockholders' equity.
Ernst & Young LLP, in Houston, said Dynegy projects that it is
likely that it will not be able to comply with certain debt
covenants throughout 2011. "This condition and its impact on
Dynegy Inc.'s liquidity raises substantial doubt about Dynegy
Inc.'s ability to continue as a going concern."
* * *
In July 2011, Moody's downgraded Dynegy Holdings' probability of
default rating to 'Ca' from 'Caa3'. "The downgrade of DHI's PDR
and senior unsecured notes to Ca reflects the increased likelihood
of a distressed debt exchange transaction occurring within the
next several months following announcement of a corporate
reorganization that seeks to modify asset ownership within DHI
through the formation of several wholly-owned subsidiaries", said
A.J. Sabatelle, Senior Vice President of Moody's. "Separate
financing arrangements being established at these subsidiaries
will have annual limits placed on the amount of cash flow that can
be paid to their indirect parent, which Moody's believes raises
default prospects for DHI's senior unsecured notes and the
company's lease", added Mr. Sabatelle.
EAGLE CROSSROADS: U.S. Trustee Unable to Form Committee
-------------------------------------------------------
The United States Trustee said that an official committee under 11
U.S.C. Sec. 1102 has not been appointed in the bankruptcy case of
Eagle Crossroads Center LLC because an insufficient number of
persons holding unsecured claims against the Debtor have expressed
interest in serving on a committee. The U.S. Trustee reserves the
right to appoint such a committee should interest developed among
the creditors.
Los Angeles, California-based Eagle Crossroads Center LLC owns and
operates a retail shopping center property located at 6464 Decatur
Boulevard, in North Las Vegas, Nevada. The Property has
consistently maintained strong occupancy rates, and is currently
roughly 95% occupied.
Eagle Crossroads Center filed for Chapter 11 bankruptcy (Bankr. D.
Nev. Case No. 11-23749) on Aug. 30, 2011, before Judge Bruce T.
Beesley. Thomas H. Fell, Esq., at Gordon Silver, serves as the
Debtor's bankruptcy counsel. The Debtor estimated assets and
debts of $50 million to $100 million as of the Chapter 11 filing.
EASTMAN KODAK: Seeking $900MM Bailout; Bondholders Hiring Counsel
-----------------------------------------------------------------
Reuters' Liana B. Baker and Andre Grenon report that news service
Debtwire said Friday Eastman Kodak Co. held meetings with hedge
funds to negotiate up to $900 million in rescue financing. The
Debtwire report cited sources saying Kodak met with firms,
including Cerberus Capital Management and Silverpoint. The talks
are intended to give Kodak a four or six-month "bridge period to
facilitate the sale of its digital imaging portfolio," the article
said.
"We don't comment on rumors," Kodak spokesman Chris Veronda said
on Friday, according to Reuters. "In general, we're committed to
optimizing our cash generation and we are always assessing the
financing strategies available to us."
The Wall Street Journal's Mike Spector and Dana Mattioli report
that people familiar with the matter said since about mid-
September, Kodak has held discussions with Cerberus Capital
Management LP, Silver Point Capital LP, Centerbridge Partners LP
and Highbridge Capital Management LLC.
The sources told the Journal that the discussions are preliminary,
and it remained unclear whether they would lead to a deal. One of
the sources said Kodak hasn't yet negotiated details of the
possible financing.
The Journal relates the financing talks suggest Kodak is concerned
about shoring up its cash position as it tries to sell a portfolio
of 1,100 patents and complete a challenging transformation from a
company reliant on the dying film business to a seller of consumer
and commercial printers.
Kodak reports its third-quarter earnings on Nov. 3, and a new cash
infusion could provide good news amid precipitous drops in the
company's stock in recent weeks, the Journal says.
The Journal relates one of Kodak's bonds, maturing in November
2013, was trading at 45 cents on the dollar Oct. 24, up slightly
from Friday.
According to the Journal, people familiar with the matter said the
$900 million in new funds could be used to pay down Kodak's
existing senior debt, with the remaining money strengthening the
company's cash coffers. Kodak has $160 million outstanding under
a $400 million credit line that ranks first in repayment ahead of
$750 million in so-called second-lien debt.
The sources also said the new financing, which would likely rank
first in repayment priority among Kodak's debts, could serve to
calm investors and quell bankruptcy rumors as the company tries to
sell its patents. The money could also bolster Kodak's leverage
in negotiations with potential buyers, giving it time to negotiate
a better price rather than be forced to sell the patents
immediately to garner additional cash, the people said.
One of the sources also told the Journal that Kodak's bankers
remained steadfast that they want the company to avoid filing for
bankruptcy protection.
Akin Gump Represents Bondholders
According to Reuters, Debtwire said bondholders, including Avenue
Capital, Solus Alternative Asset Management, DE Shaw and P.
Schoenfeld Asset Management were fielding legal pitches from law
firms on Friday.
People familiar with the matter told the Journal bondholders
holding Kodak's second-lien debt could soon hire a financial
adviser to help negotiate with the company. The sources said
bondholders retained law firm Akin Gump Strauss Hauer & Feld LLP
on Friday to try and start a dialogue with Kodak. Potential
financial advisers include Moelis & Co. and Rothschild Inc., the
people said.
These bondholders could also be interested in providing rescue
financing for Kodak, one of the people said, according to the
Journal.
The Journal also reports that Kodak last week sued Collins Ink
Corp., a major supplier of commercial printing ink that stopped
doing business with it this month amid concerns about the
company's financial health. Kodak says it is committed to meeting
obligations to suppliers and other creditors and, in the lawsuit,
noted it remained current on all bills with Collins. In U.S.
District Court in Rochester, N.Y., Monday the two companies agreed
to temporarily reinstate their contract until they meet again in
court next week.
Default Likely
As reported by the Troubled Company Reporter on Sept. 30, 2011,
Moody's Investors Service and Fitch Ratings downgraded Kodak's
ratings deeper into junk territory. Fitch said its 'CC' rating
signifies that default of some kind appears probable.
Moody's said it lowered Kodak's ratings, including the corporate
family and probability of default to Caa2 from Caa1, the senior
unsecured to Caa3 from Caa2, the senior secured to B3 from B1 and
the Speculative Grade Liquidity rating to SGL-3 frm SGL-2. The
outlook remains negative. The rating downgrade reflects Moody's
expectations that "ongoing weakness in the company's core business
operations in addition to a softening demand environment will
pressure operating performance and liquidity over the foreseeable
future," said Moody's senior vice president, Richard Lane.
Moody's and Fitch said Kodak's decision on Sept. 23, 2011, to draw
down $160 million from its $400 million secured revolving credit
facility signals weaker cash flow prospects. Moody's noted the
the draw was just prior to what is usually Kodak's strongest cash
flow quarter (the 4th quarter). Although Kodak had $957 million
of cash balances at June 30, 2011 and no material debt maturities
until November 2013, "we anticipate that Kodak will consume cash
over the next year, thus weakening its liquidity profile," said
Moody's Mr. Lane.
Fitch downgraded Kodak's ratings -- Issuer Default Rating (IDR) to
'CC' from 'CCC'; Senior secured revolving credit facility (RCF) to
'B/RR1' from 'B+/RR1'; Senior secured second priority debt to 'B-
/RR1' from 'B+/RR1'; and Senior unsecured debt to 'C/RR5' from
'CC/RR5'. Fitch's actions affect approximately $1.5 billion in
total debt. Fitch believes a weak macro-environment, insufficient
scale in the company's key growth initiatives, continued secular
decline in traditional film and moderating, but still elevated
component costs, will adversely affect the company's seasonally
strong second-half, resulting in cash flows below historical
levels.
Fitch said potential proceeds from the sale of a portion of the
company's patent portfolio in the absence of an improvement in
free cash flow will not materially improve the company's credit
profile. Fitch also added that Kodak's enterprise value would be
maximized in liquidation, rather than a going-concern scenario.
About Eastman Kodak
Headquartered in Rochester, New York, Eastman Kodak Company
(NYSE:EK) -- http://www.kodak.com/-- provides imaging technology
products and services to the photographic and graphic
communications markets.
The Company's balance sheet at June 30, 2011, showed $5.33 billion
in total assets, $6.75 billion in total liabilities and a $1.42
billion total deficit.
Kodak has hired Jones as legal adviser and investment bank Lazard
Ltd., but denied rumors it is filing for bankruptcy. Kodak is
exploring a sale of its patents.
EVANS OIL: Fifth Third Withdraws Support for Reorganization Plan
----------------------------------------------------------------
Fifth Third Bank, as the senior secured creditor to Evans Oil
Company LLC and its affiliates, objects to confirmation of the
Debtors' Plan of Reorganization dated Aug. 12, 2011.
According to Brian T. Giles, Esq., at Statman, Harris & Eyrich
LLC, representing Fifth Third, the Debtors' Plan provides that
Fifth Third, as the Class 2 Prepetition Senior Secured Creditor,
will have an allowed claim for $27 million which will be paid
through a series of notes executed by the Reorganized Debtors and
delivered to Fifth Third as an Exit Facility. The Exit Facility
was to have consisted of a working capital revolving line of
credit, a loan secured by real estate, two separate term notes,
and renewal of three existing letters of credit issued to Debtors'
fuel suppliers. Although this restructuring arrangement was
agreed to as of the date the Plan was filed, subsequently, the
Debtors sought to revise the deal and seek more capital from
Fifth Third.
After filing of the Plan, Debtors approached Fifth Third to fund
A $2.7 million over advance. The increased over advance is not
discussed in the Plan or Disclosure Statement. This request would
have required Fifth Third to lend $1 million more than that which
is provided for in the restructuring presented in the Plan. In
addition, the Debtors requested an increase to the letters of
credit totaling approximately $1.5 million. In order to comply
with the Debtors' request and proceed to a consensual
reorganization, Fifth Third requested that the Debtors provide
more collateral so that Fifth Third would be adequately protected
for the increased amount. To date, the Debtors and Fifth Third
are not in agreement. In the absence of an agreement, Fifth Third
voted to reject the Plan and withhold its financial support for
the Plan. Therefore, because the financial foundation supporting
the reorganization has been eliminated, the Debtors' Plan is not
feasible. Absent financial support from the secured lender,
the Debtors have not demonstrated that they can continue to
operate their business or reorganize.
Mr. Giles tells the Court that the Disclosure does not provide
sufficient financial information that would enable a hypothetical
reasonable investor typical of holders of claims or interests of
the relevant class to make an informed judgment about the Plan.
According to Mr. Giles, "The Debtors' failure to provide financial
information makes it difficult for creditors to determine how to
vote. The lack of salient financial information coupled with
Fifth Third's rejection of the Plan should provide this Court with
sufficient evidence that the Disclosure Statement is inadequate
and should not be approved. The Debtors have not provided any
evidence that they can be a financially viable enterprise without
the cooperation and funding by Fifth Third or an infusion of
capital by a third party. Therefore, confirmation should be
denied."
The Debtors, according to Fifth Third, need to show that Fifth
Third will receive under the Plan, property of a value equal to
the allowed amount of its secured claim. Because Fifth Third has
withdrawn its financial support for the Plan, the Debtors have
failed to show that Fifth Third will receive property equal to its
prepetition secured claim. Because there is no mechanism to repay
Fifth Third's secured obligation, the Plan cannot be confirmed,
Mr. Giles contends.
The Plan also provides that Fifth Third has a Class 3 Deficiency
Claim which is being waived upon confirmation. Having withdrawn
support of the Plan, Fifth Third does not waive its deficiency
claim. The Plan also has junior classes of creditors sharing pro
rata in a fund of $116,000. However, because Fifth Third is not
being paid in full and because it has not agreed to accept
different treatment, junior classes cannot be paid from the fund
without violating the absolute priority rule.
Mr. Giles notes that the Plan provides in that the Debtors will be
dissolved and equity interests of Randy M. Long will be cancelled.
Although it appears that the junior interests of Class 7 are not
receiving any distribution under the Plan and, in fact, are being
cancelled, stock is being given to Mr. Long, based on his
contributions. Mr. Long really is not losing anything since he is
gaining stock in the Debtors. Not only is Mr. Long receiving
stock, the Reorganized Debtors will have less negative equity than
the Debtors because of Fifth Third's cramdown. As a consequence,
Mr. Long is receiving more than classes senior to his. The Plan
does not discuss his contributions, whether monetary or otherwise.
Therefore, because there is a lack of discussion as to what his
contributions are to the Reorganized Debtors and the fact that a
junior class (Class 7) will basically retain its interest and
receive more than the classes higher in priority, the Plan
violates the absolute priority rule and cannot be confirmed.
Mr. Giles states that Fifth Third is prepared to file a competing
Plan of Reorganization which contains identical provisions to the
one filed by the Debtor, albeit with some minor changes. Fifth
Third will agree to fund an over advance, but rather than allow
the stock of the Reorganized Debtors to be owned by Mr. Long,
Fifth Third will accept a pledge of stock to act as additional
collateral for the increased funding by Fifth Third.
Further, Fifth Third will also replace current management with the
business advisors it has in place so that the cost-cutting
measures can continue and the Reorganized Debtors operate
efficiently. By replacing management, infusing capital and
accepting the pledge of stock from the Reorganized Debtors as
collateral for the infusion of capital, Fifth Third will have a
plan which is feasible, does not violate the absolute priority
rule and is confirmable. Creditors will receive the same
treatment under Fifth Third's Plan as they would receive under the
Plan originally proposed by the Debtors.
Fifth Third Bank is represented by:
Brian T. Giles, Esq.
Alan J. Statman, Esq.
STATMAN, HARRIS & EYRICH LLC
441 Vine Street, 3700 Carew Tower
Cincinnati, Ohio 45202
Tel: (513) 621-2666
Fax: (513) 621-4896
E-mail: bgiles@statmanharris.com
Wells Fargo Says Plan Not in Good Faith
Wells Fargo Dealer Services, Inc., also objects to confirmation of
the reorganization plan filed by Evans Oil on grounds that it's
not proposed in good faith, does not meet the requirements for the
treatment of each impaired class of creditors and has not been
accepted by each class of creditors.
Wells Fargo contends that the Plan is not feasible; thus, the Plan
is likely to be followed by the liquidation or the need for
further financial reorganization of the Debtor or any successor to
the Debtor under the Plan.
Wells Fargo is the holder of a claim against Debtor, Octane, LLC,
in the amount of $3,753,482, that is secured by collateral
described as 2007 Lazzara Yacht O.N. #1195459; HIN #LYC840771607.
Wells Fargo has obtained stay relief and will liquidate the
Collateral in a commercially reasonable manner, after which a
significant deficiency balance may remain. Wells Fargo objects to
the Plan in that it fails to provide for Wells Fargo's entitlement
to an unsecured deficiency claim, to be paid pro rata with other
general unsecured claims.
Wells Fargo is represented by:
David E. Hicks, Esq.
DENNIS LeVINE & ASSOCIATES, P.A.
P.O. Box 707
Tampa, Florida. 33601-0707
Tel: (813) 253-0777
Fax: (813) 253-0975
E-mail: David@bcylaw.com
About Evans Oil
Naples, Florida-based Evans Oil Company LLC, aka Evans Oil Co LLC,
distributes bulk oil, gas, diesel and lubricant products. Evans
Oil, together with affiliates, filed for Chapter 11 bankruptcy
protection (Bankr. M.D. Fla. Lead Case No. 11-01515) on Jan. 30,
2011.
Attorneys at Hahn Loeser & Parks LLP as bankruptcy counsel serve
as bankruptcy counsel to the Debtors. Garden City Group Inc. is
the claims and notice agent. The Parkland Group Inc. is the
restructuring advisor.
Evans Oil estimated assets and debts at $10 million to $50 million
as of the Chapter 11 filing.
EVERGREEN ENERGY: Special Committee Retains Dahlman as Advisor
--------------------------------------------------------------
Evergreen Energy Inc. announced that the Special Committee of the
Company's Board of Directors has retained Dahlman Rose & Company,
LLC, to act as its independent financial adviser in connection
with the Special Committee's evaluation of the unsolicited offer
by Stanhill Capital Partners to acquire the Company's K-Fuel
business. Dahlman Rose will work alongside Cooley LLP, which had
previously been engaged as independent legal counsel to the
Special Committee.
On Oct. 4, 2011, Evergreen announced that it had received an offer
from Stanhill to purchase the Company's K-Fuel process and
technology business for $30 million. Among other things, the
offer is expressly conditioned upon completion of due diligence,
negotiation of definitive documents, the approval of Evergreen's
stockholders and final approval of Stanhill's investment
committee.
A Special Committee of the Board of Directors of Evergreen was
formed to consider the Stanhill offer and other strategic
alternatives. The Special Committee has not set a definitive
timetable for completion of its evaluation of the Stanhill offer
or any other alternative, and does not currently intend to
announce developments unless and until an agreement has been
reached. There can be no assurance that the Special Committee's
process will lead to the approval or completion of any
transaction.
About Evergreen Energy
Evergreen Energy Inc. has developed two, proprietary, patented,
and green technologies: the GreenCert(TM) suite of software and
services and K-Fuel(R). GreenCert, which is owned exclusively by
Evergreen, is a science-based, scalable family of environmental
intelligence solutions that quantify process efficiency and
greenhouse gas emissions from energy, industrial and agricultural
sources and may be used to create verifiable emission reduction
credits. K-Fuel technology significantly improves the performance
of low-rank coals, yielding higher efficiency and lowering
emissions.
The Company reported a net loss of $21.02 million on $403,000 of
total operating revenue for the year ended Dec. 31, 2010, compared
with a net loss of $58.53 million on $423,000 of total operating
revenue during the prior year.
Hein & Associates LLP, in Denver, Colo., expressed substantial
doubt about Evergreen Energy's ability to continue as a going
concern. The independent auditors noted that the Company has
suffered recurring losses from operations and has had recurring
cash used in operations.
The Company's balance sheet at June 30, 2011, showed
$24.54 million in total assets, $21.52 million in total
liabilities, $2,000 in preferred stock, and $3.02 million in total
stockholders' equity.
EVERGREEN SOLAR: Creditors Seek to Limit Lenders' Credit Bid
------------------------------------------------------------
Dow Jones' DBR Small Cap reports that Evergreen Solar Inc.'s
unsecured creditors are asking the court to limit the ability of
the company's lenders to use their claims against the solar
company as currency at an upcoming auction of the company's
assets.
About Evergreen Solar
Evergreen Solar, Inc. -- http://www.evergreensolar.com/--
develops, manufactures and markets String Ribbon solar power
products using its proprietary, low-cost silicon wafer technology.
The Company's patented wafer manufacturing technology uses
significantly less polysilicon than conventional processes.
Evergreen Solar's products provide reliable and environmentally
clean electric power for residential and commercial applications
globally.
The Marlboro, Mass.-based Company filed for Chapter 11 bankruptcy
(Bankr. D. Del. Case No. 11-12590) on Aug. 15, 2011, before Judge
Mary F. Walrath. The Company's balance sheet at April 2, 2011,
showed $373,972,000 in assets, $455,506,000 in total liabilities,
and a stockholders' deficit of $81,534,000.
Ronald J. Silverman, Esq., and Scott K. Seamon, Esq., at Bingham
McCutchen LLP, serve as general bankruptcy counsel to the Debtor.
Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski
Stang Ziehl & Jones LLP, serve as co-counsel. Hilco Industrial
LLC serves as exclusive marketing and sales agent. Klehr Harrison
Harvey Branzburg serves as special conflicts counsel. Zolfo
Cooper LLC is the financial advisor. UBS Securities, LLC, serves
as investment banker. Epiq Bankruptcy Solutions has been tapped
as claims agent.
In conjunction with the Chapter 11 filing, the Company entered
into a restructuring support agreement with certain holders of
more than 70% of the outstanding principal amount of the Company's
13% convertible senior secured notes. As part of the bankruptcy
process the Company will undertake a marketing process and will
permit all parties to bid on its assets, as a whole or in groups
pursuant to 11 U.S.C. Sec. 363. An entity formed by the
supporting noteholders, ES Purchaser, LLC, entered into an asset
purchase agreement with the Company to serve as a "stalking-horse"
and provide a "credit-bid" pursuant to the Bankruptcy Code for
assets being sold.
The supporting noteholders are represented by Michael S. Stainer,
Esq., and Natalie E. Levine, Esq., at Akin Gump Strauss Hauer &
Feld LLP, in New York.
An official committee of unsecured creditors has retained Pepper
Hamilton and Kramer Levin Naftalis & Frankel as counsel. The
Committee tapped Garden City Group as communications services
agent.
Evergreen Solar is at least the fourth solar company to seek court
protection from creditors since August 2011. Other solar firms
are start-up Spectrawatt Inc., which also filed in August,
Solyndra Inc., which filed early in September, and Stirling Energy
Systems Inc., which filed for Chapter 7 bankruptcy late in
September.
EVERGREEN TRANS: Court Slashes Silver Voit's Fees
-------------------------------------------------
Silver, Voit & Thompson requests fees of $161,239 and expenses of
$1,562 for work done as attorneys for Evergreen Transportation,
Inc. Some of the time and expenses were incurred after April 12,
2011, the date the case was converted to a chapter 7 case. The
trustee objected to payment of any fees and expenses incurred
after April 12, 2011. In an Oct. 18, 2011 Order, available at
http://is.gd/NvSHm9from Leagle.com, Bankruptcy Judge Margaret A.
Mahoney sustained the trustee's objection and reduced Silver
Voit's fees.
Alabama-based Evergreen Transportation, Inc., operated a freight
and logistics business. The Company filed for Chapter 11
bankruptcy (Bankr. S.D. Ala. Case No. 09-13525) on Aug. 4, 2009.
Silver, Voit & Thompson, Attorneys at Law, P.C. --
lvoit@silvervoit.com -- represented the Debtor in its
restructuring efforts. Ross Consulting Services, LLC, and
Carriage Hill Partners, Ltd., served as financial advisors. In
its petition, the Debtor estimated $10 million to $50 million in
assets and up to $10 million in debts as of the Chapter 11 filing.
In May 2011, the Hon. Margaret A. Mahoney converted the case to
one under Chapter 7 of the Bankruptcy Code at the behest of
bankruptcy administrator Travis M. Bedsole, Jr., after the Debtor
failed to propose a plan of reorganization. The Court appointed
Lynn Harwell Andrews as Chapter 7 trustee in the case.
F&G LEONARD: Oversecured Lender Gets $217T in Attorneys' Fees
-------------------------------------------------------------
Bankruptcy Judge J. Rich Leonard granted Textron Financial
Corporation's application for payment of attorneys' fees and
expenses totalling $217,415, pursuant to 11 U.S.C. Sec. 506(b)
over the objection of F & G Leonard LLC.
Textron is the debtor's primary secured creditor. On March 8,
2011, Textron filed a proof of secured claim in the debtor's case
and is owed $2,800,395.87 on a prepetition promissory note. The
note obliged the debtor to pay Textron the principal sum of up to
$3,750,000 -- of which Textron advanced $2,800,000 -- plus all
interest, fees, costs, and expenses.
It is undisputed that Textron is oversecured, as the promissory
note1 is secured by substantially all of the debtor's assets,
which the debtor admits are worth more than Textron's claim. The
promissory note included provisions related to payment of
attorneys' fees and costs in the event of the debtor's default.
Hunton & Williams LLP represented Textron.
The debtor objects to "the number of Hunton lawyers who billed
significant time to this case, their billing rates, the billing
rates of their paralegals and the amount of time billed." The
debtor also objects to numerous billing entries specifically. Most
notably, the debtor objects to billing entries related to
discovery, mediation preparation, and updating pleading indices.
Furthermore, the debtor argues that fees incurred by Hunton &
Williams relating to the foreclosure on the property are
duplicative of work performed by Ward & Smith, P.A., and that the
$5,820 witness fee relating to Peter Vangraafeiland is "not an
attorney fee."
In granting the lender's request, Judge Leonard pointed out that
the note and deed of trust held by Textron grant a broad range of
attorneys' fees to the creditor in the event the creditor must
collect on the debt or enforce or preserve its rights related to
the security of the note. This provision specifically includes
fees incurred in any bankruptcy case involving the maker of the
note. Based on the broad language of the attorneys' fees provision
in the note and keeping in line with the liberal construction of
the attorneys' fees statute, all of the services described in
Textron's application are reasonable.
A copy of Judge Leonard's Oct. 21 order is available at
http://is.gd/Pj1WVdfrom Leagle.com.
New Bern, North Carolina-based F & G Leonard LLC filed a Chapter
11 petition (Bankr. E.D.N.C. Case No. 11-01297) on Feb. 21, 2011.
Judge J. Rich Leonard presides over the case. Trawick H Stubbs,
Jr., Esq. -- efile@stubbsperdue.com -- Stubbs & Perdue, P.A.,
serves as the Debtor's counsel. In its petition, the Debtor
scheduled assets of $3,115,874 and debts of $3,715,336.
FAIRFIELD SENTRY: Liquidators Halt Suits During Appeal
------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that liquidators from the British Virgin Islands for
Fairfield Sentry Ltd. and affiliated funds, which had been the
largest feeder funds for Bernard L. Madoff Investment Securities
Inc., put on ice the lawsuits in which they were attempting to sue
foreign customers in U.S. Bankruptcy Court in New York.
According to the report, the freeze resulted from an appeal the
liquidators lost last month when Chief U.S. District Judge Loretta
A. Preska in New York ruled that the Chapter 15 case can't be used
to initiate lawsuits in bankruptcy court against non-U.S.
customers.
Mr. Rochelle recounts that Judge Preska early this month
recognized the significance of the issues and granted the
liquidators permission to seek an appeal to the U.S. Court of
Appeals. Because Judge Preska's decision last month didn't end
the lawsuits entirely, the liquidators needed permission to
appeal.
The U.S. Court of Appeals still must accept the appeal, Mr.
Rochelle discloses.
Meanwhile, the bankruptcy court signed an order on Oct. 18
freezing the lawsuits pending the outcome of the appeal to the
Court of Appeals.
The liquidators' lawsuit in bankruptcy court is Fairfield Sentry
Ltd. v. Theodoor GGC Amsterdam (In re Fairfield Sentry Ltd.), 10-
03496, U.S. Bankruptcy Court, Southern District New York.
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.
FINANCE AMERICA: Allstate Suit Over Toxic Loans Remanded
--------------------------------------------------------
District Judge Naomi Reice Buchwald granted the plaintiffs'
request to remand the lawsuit, ALLSTATE BANK (f/k/a ALLSTATE
FEDERAL SAVINGS BANK), and KENNETT CAPITAL, INC., v. CREDIT SUISSE
SECURITIES (USA) LLC, CREDIT SUISSE FIRST BOSTON MORTGAGE
SECURITIES CORP., ASSET BACKED SECURITIES CORPORATION, and DLJ
MORTGAGE CAPITAL, INC., No. 11 Civ. 2232 (S.D.N.Y.).
However, the Court denied the Plaintiffs' request for costs and
expenses.
The Plaintiffs brought the action in the New York State Supreme
Court of New York County on Feb. 28, 2011, alleging state common
law claims of fraud and negligent misrepresentation. The
Defendants removed the action to the District Court on March 31,
2011, pursuant to 28 U.S.C. Sections 1334(b), 1441, 1446, and
1452(a). On May 2, 2011, plaintiffs moved to remand the case back
to state court, or alternatively for the Court to abstain from
exercising jurisdiction pursuant to 28 U.S.C. Sections 1334(c)(1)-
(2) and 1452(b), and for costs and expenses incurred as a result
of the removal pursuant to 28 U.S.C. Sec. 1447(c).
The Plaintiffs are subsidiaries of The Allstate Corporation.
The Defendants, all part of the Credit Suisse corporate family and
formed in Delaware with their principal places of business in New
York, sponsored, sold, underwrote, or issued residential mortgage-
backed securities purchased by the Plaintiffs.
DLJ Mortgage Capital, Inc. acted as sponsor or seller for all of
the offerings of the Certificates.
Credit Suisse Securities (USA) LLC, or its predecessor Credit
Suisse First Boston LLC, acted as underwriter for the
Certificates, while Credit Suisse First Boston Mortgage Securities
Corp. and Asset Backed Securities Corporation were the registrants
for certain registration statements filed with the SEC and issued
certain of the Certificates.
Together, the Defendants purchased mortgage loans from third-party
originators, transferred them to trusts, and then issued the
Certificates, which represented interests in the mortgage loans
held by the trusts.
The Certificates were grouped in tranches according to the level
of risk associated with the underlying mortgage loans. Investors
must rely on the issuers' registration statements, prospectuses
and supplements, terms sheets, and other written materials to
learn about such risk; issuers, in turn, rely on the loan files
developed by originators, which files are unavailable to
investors. The Defendants sold the Certificates to various
investors -- including the Allstate entities, who purchased over
$231 million worth of the Certificates, which were typically rated
AAA/Aaa or AA/Aa.
The Plaintiffs allege that the Defendants' failure to disclose
that the loans underlying the Certificates constituted "a toxic
mix" and were "highly likely to default" caused a "drastic drop in
the value of the Certificates," leading to significant losses for
the Plaintiffs. The complaint includes claims for common law
fraud, fraudulent inducement, and negligent misrepresentation,
based on the allegation that the Defendants knew or should have
known that they were making materially false or misleading
statements or omissions in connection with the Certificates.
On March 31, 2011, the Defendants removed the action to the
District Court, asserting that the Court has "related to"
jurisdiction under 28 U.S.C. Sec. 1334(b) because the Defendants
may have indemnification or contribution claims against three
originators who are currently in bankruptcy proceedings: Finance
America, LLC; New Century Mortgage Corporation; and Taylor, Bean &
Whitaker Mortgage Corporation. The Bankrupt Originators were
responsible for roughly 7.4% of the total value of the loans in
the securitizations at issue; the remainder was contributed by a
number of other originators not named in the Notice of Removal.
The Defendants assert that, based on written agreements between
them, "the Bankrupt Originators would owe certain of the
defendants indemnity and/or contribution obligations that could
affect the Debtors' property in the event a loss is sustained by
Defendants in connection with this action with respect to the
Certificates."
BNC Mortgage LLC, the ultimate successor to Finance America, filed
a petition in the Southern District of New York for Chapter 11
reorganization on Jan. 9, 2009. The Defendants have filed no
proofs of claim in that proceeding, and the bar date for claim
filing was Sept. 22, 2009.
New Century instituted its Chapter 11 reorganization on April 2,
2007, in the District of Delaware. The bar date for any proofs of
claim in that proceeding was Aug. 31, 2007, and, prior to that
date, the defendants did file certain claims, which have since
been settled. New Century's liquidation plan was confirmed on
Nov. 20, 2009, and the proceeding is currently in the post-
confirmation stage.
Taylor Bean filed for reorganization under Chapter 11 in the
Middle District of Florida on Aug. 24, 2009. The Defendants filed
a proof of claim in that proceeding on June 11, 2010, four days
before the bar date. That claim was based on the agreement
pursuant to which the Defendants purchased mortgage loans from
Taylor Bean, though the claim did not assert indemnification
rights.
In remanding the case, the District Court held that the Defendants
failed to establish that the action is sufficiently "related to"
any bankruptcy proceedings to justify the District Court taking
jurisdiction. However, the Court held that while the removal
petition was not likely to succeed, it cannot conclude that the
effort was so objectively unreasonable as to support an award of
attorney's fees.
A copy of Judge Buchwald's Oct. 19, 2011 Memorandum and Order is
available at http://is.gd/6pkNlBfrom Leagle.com.
FKF MADISON: Wins More Time to Work on Restructuring
----------------------------------------------------
Dow Jones' DBR Small Cap reports that One Madison Park won more
time to work on a deal that would see the luxury Manhattan condo
project emerge from Chapter 11 protection under the control of
once-dueling investors HFZ Capital Group and Related Cos.
About FKF Madison
FKF Madison owns the One Madison Park condominium tower in New
York City. One Madison Park project came to halt in February 2010
when iStar Financial Inc., the chief financier for the project,
moved to foreclose on it. The high-profile condominium project, a
50-story tower was developed by Ira Shapiro and Marc Jacobs.
An involuntary Chapter 7 case (Bankr. D. Del. Case No. 10-11867)
was filed against FKF Madison on June 8, 2010. The case was
converted to a Chapter 11 in November 2010.
FORD MOTOR: S&P Hikes Corp. Credit Rating to BB+; Outlook Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Ford Motor Co. and Ford Motor Credit Co. LLC to 'BB+'
from 'BB-', and removed the ratings from CreditWatch, where they
were placed with positive implications on Sept. 29, 2011. The
outlook is stable. "We also raised the counterparty credit rating
on FCE Bank PLC, Ford Credit's European bank, to 'BBB-' from 'BB',
maintaining the one-notch rating differential between FCE and its
parent," S&P related.
"The upgrade reflects our view that, among other things, Ford's
prospects for generating free cash flow and profits in its
automotive manufacturing business remain intact, because of its
cost base in North America," said Standard & Poor's credit analyst
Robert Schulz. "Our base case assumes some improvement in light-
vehicle sales in North America into 2012. We estimate Ford's
automotive operating cash flow (before separation payments and UAW
contract costs) during 2011 will be at least $5 billion (roughly
equivalent to more than 10% of our estimate of adjusted automotive
and post-retirement debt in 2011). We also assume that Ford can
sustain its pretax EBIT margin in North America in the upper?
single-digit percentage area and in the mid-single digit area in
total for automotive and avoid large losses in Europe. The upgrade
also considers our continued assessment of Ford's business risk
profile as fair, and its financial risk profile as significant.
Under our criteria, the combination of these profiles is
consistent within a one-notch band of a 'BB' corporate
credit rating," S&P said.
"We believe the company's automotive operations in North America
will remain profitable with industry light-vehicle sales at or
even somewhat below current levels (i.e., more than 11.5 million
units). We also believe Ford has good prospects for generating at
least $2 billion in automotive operating cash flow in 2012, even
if the key U.S. auto market does not recover significantly. But
we also note that cash flow will be sensitive to volume and cost
headwinds -- including commodity prices and other cost increases -
- as well as future production volatility. These factors could
temper year-over-year cash flow generation. As the inventories of
the Japanese automakers recover, we believe some modest market
share losses by many non-Japanese automakers could occur in the
U.S. over the coming quarters. We assume automakers competing in
the U.S. market will continue to demonstrate the same discipline
we have observed since late 2009 regarding the level of production
and inventories relative to sales, avoiding excess inventories and
incentives," S&P related.
FRIENDLY ICE CREAM: U.S. Trustee Finds Fault With Auction Plans
---------------------------------------------------------------
Dow Jones' DBR Small Cap reports that the federal watchdog
assigned to the bankruptcy case of Friendly Ice Cream Corp. is
speaking out against the restaurant chain's sale plans.
About Friendly Ice Cream
Friendly Ice Cream Corp. -- http://www.friendlys.com/-- the owner
and franchiser of 490 full-service, family-oriented restaurants
and provider of ice cream products in the Eastern United States,
filed for Chapter 11 reorganization together with four affiliates
(Bankr. D. Del. Lead Case No. 11-13167) on Oct. 5, 2011, to sell
the business mostly in exchange for debt to Sundae Group Holdings
II LLC, a unit of Sun Capital Partners Inc. The existing owner
and holder of the Debtors' second-lien debt are also affiliates of
Sun Capital. Friendly's, based in Wilbraham, Massachusetts, also
announced the closing of 63 stores, leaving about 424 operating.
Franchise operators have about 230 of the locations.
Judge Kevin Gross oversees the case. James A. Stempel, Esq., Ross
M. Kwasteniet, Esq., and Jeffrey D. Pawlitz, Esq., at Kirkland &
Ellis LLP; and Laura Davis Jones, Esq., Timothy P. Cairns, Esq.,
and Kathleen P. Makowski, Esq., at Pachulski Stang Ziehl & Jones
LLP, serve as the Debtors' bankruptcy counsel. Zolfo Cooper
serves as the Debtors' financial advisors.
In its petition, Friendly Ice Cream Corp. estimated $100 million
to $500 million in assets and debts. The petitions were signed by
Steven C. Sanchioni, executive vice president, chief financial
officer, treasurer, and assistant secretary.
Sundae Group Holdings proposes to pay about $120 million for the
business. The price includes enough cash to pay first-lien debt
and an amount of cash for unsecured creditors to be negotiated
with the official creditors' committee. Aside from cash, Sun
Capital will make a credit bid from the $267.7 million in second-
lien, pay-in-kind notes.
The bid from Sun Capital is subject to higher and better offers
at an auction. Under the proposed time-line, bids would be due
Nov. 24, followed by an auction on Dec. 1. A competing bid must
be at least $122.6 million in cash.
Friendly's is the second company under Sun Capital's portfolio to
file for bankruptcy in a span of two days. Mexican-food chain
Real Mex, which operates restaurants such as Chevys, filed in
Delaware bankruptcy court on Oct. 3, 2011.
FULL CIRCLE: Court Approves Robert Wilcox as Counsel
----------------------------------------------------
The U.S. Bankruptcy Court for the District of Florida authorized
Full Circle Dairy LLC to employ Robert D. Wilcox and Brennan,
Manna & Diamond, P.L., as counsel.
As reported in the Sept. 15, 2011 edition of the TCR, the Debtor
disclosed it originally hired Robert D. Wilcox and Wilcox Law Firm
by corporate resolution dated May 25, 2010 to negotiate with its
creditors, including SunTrust bank, and subsequently paid Wilcox
Law Firm a $50,000 retainer. Subsequent to that date, it appeared
that Full Circle could reach agreements with its major creditors
that would allow it to avoid filing this case. During late July
2010, negotiations broke down and it became increasing clear that
an out-of-court workout could not be successful, and Full Circle
either had to cease operations or file this case on an emergency
basis on Aug. 9, 2010.
The firm's rates are:
Personnel Rates
--------- -----
Robert D. Wilcox $305 per hour
Partners $250-$395 per hour
Associates $165-$235 per hour
To the best of Full Circle's knowledge, the firm has no connection
with the creditors or any other party-in-interest in this case.
About Full Circle Dairy
Full Circle Dairy, LLC, operates a dairy in Lee, Florida. It
filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case
No. 10-06895) on Aug. 9, 2010. Robert D Wilcox, Esq., at Brennan,
Manna & Diamond, PL, in Jacksonville, Fla., represents the Debtor.
The official committee of unsecured creditors in the Chapter 11
case has tapped John T. Rogerson, III, Esq., at Volpe, Bajalia,
Wickes, Rogerson & Wachs, P.A., in Jacksonville, Fla., as counsel.
The Company disclosed $14,281,637 in assets and $12,879,703 in
liabilities as of the Petition Date.
GENTA INC: Stockholders OK Reverse Stock Split of Common Shares
---------------------------------------------------------------
Genta Incorporated held a Special Meeting of Stockholders on
Oct. 21, 2011. The stockholders authorized the Company's Board of
Directors to effect up to two reverse stock splits of the
Company's outstanding Common Stock, with each reverse stock split
having a ratio ranging from 1-for-2 up to 1-for-500, until
Dec. 31, 2012. The stockholders also approved an amendment and
restatement of the Company's 2009 Stock Incentive Plan to change
the number of shares of Common Stock authorized for issuance under
that plan.
About Genta Incorporated
Berkeley Heights, New Jersey-based Genta Incorporated (OTC BB:
GNTA) -- http://www.genta.com/-- is a biopharmaceutical company
engaged in pharmaceutical (drug) research and development. The
Company is dedicated to the identification, development and
commercialization of novel drugs for the treatment of cancer and
related diseases.
EisnerAmper LLP, in Edison, New Jersey, expressed substantial
doubt about Genta's ability to continue as a going concern
following the 2010 financial results. The independent auditors
noted that of the Company's recurring losses from operations,
negative cash flows from operations and current maturities of
convertible notes payable.
Amper, Politziner & Mattia, LLP, in Edison, New Jersey, did not
include a going concern explanatory paragraph in its audit report
on the Company's financial statements for fiscal 2009.
The Company reported a net loss of $167.3 million on $257,000 of
sales for 2010, compared with a net loss of $86.3 million on
$218,000 for 2009.
The Company's balance sheet at June 30, 2011, showed $6.44 million
in total assets, $19.10 million in total liabilities, and a
$12.65 million total stockholders' deficit.
At June 30, 2011, Genta had cash and cash equivalents totaling
$5.2 million, compared with $12.8 million at Dec. 31, 2010. Net
cash used in operating activities during the first six months of
2011 was $7.3 million, or approximately $1.2 million per month.
Bankruptcy Warning
Presently, with no further financing, the Company projects that it
will run out of funds during the third quarter of 2011. The
Company currently does not have any additional financing in place.
If the Company is unable to raise additional funds, it could be
required to reduce its spending plans, reduce its workforce,
license one or more of its products or technologies that it would
otherwise seek to commercialize, sell certain assets, or even
declare bankruptcy. The Company said there can be no assurance
that it can obtain financing, if at all, or raise such additional
funds, on terms acceptable to it.
GLEN ROSE: BDO USA Raises Going Concern Doubt
---------------------------------------------
Glen Rose Petroleum Corporation filed on Oct. 17, 2011, its annual
report on Form 10-K for the fiscal year ended March 31, 2011.
BDO USA, LLP, in New York, N.Y., expressed substantial doubt about
Glen Rose Petroleum's ability to continue as a going concern. The
independent auditors noted that the Company has suffered recurring
losses from operations and has an accumulated deficit of
$67,984,551.
The Company reported a net loss of $14.7 million on $1.1 million
of oil and gas sales for the fiscal year ended March 31, 2011,
compared with a net loss of $12.2 million on $124,815 of oil and
gas sales for the fiscal year ended March 31, 2010.
The Company's balance sheet at March 31, 2011, showed $8.2 million
in total assets, $28.6 million in total liabilities, and a
stockholders' deficit of $20.4 million.
A complete text of the Form 10-K is available for free at:
http://is.gd/mT7D9M
Katy, Tex.-based Glen Rose Petroleum Corporation owns UHC
Petroleum Corporation, a Texas corporation and licensed operator
with the Texas Railroad Commission. UHC Petroleum is an
independent producer of crude oil, based in Katy, Texas. UHC
Petroleum operates the Wardlaw Lease and Adamson Lease, located
approximately 28 miles west of Rocksprings in Edwards County,
Texas.
GREAT ATLANTIC: PwC to Provide Auditing for Fiscal 2012
-------------------------------------------------------
The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York authorized Great Atlantic & Pacific
Tea Company to expand the scope of employment of
PricewaterhouseCoopers as auditor to include audit services for an
additional year, the year ending Feb. 25, 2012.
The firm will provide audit services as necessary and requested by
the Debtors, including:
a) audit the consolidated financial statements of the Debtors;
b) review the Debtors' unaudited consolidated quarterly
financial statements for each of first three quarters in the
year ending February 25, 2012; and
c) perform incremental audit and review procedures for the 2011
financial statement and quarterly reviews.
The firm will charge the Debtors are these hourly rates:
Partner $860-$995
Managing director $610-$995
Director $700
Senior manager $525-$770
Manager $415-$430
Senior associate $225-$310
Associate $145-$235
The Debtors assured the Court that the firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
About Great Atlantic & Pacific
Founded in 1859, Montvale, New Jersey-based Great Atlantic &
Pacific is a supermarket retailer, operating under a variety of
well-known trade names, or "banners" across the mid-Atlantic and
Northeastern United States. Before filing for bankruptcy in 2010,
A&P operated 429 stores in 8 states and the District of Columbia
under the following trade names: A&P, Waldbaum's, Pathmark,
Pathmark Sav-a-Center, Best Cellars, The Food Emporium, Super
Foodmart, Super Fresh and Food Basics. A&P had 41,000 employees
prior to the bankruptcy filing.
A&P and its affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y.
Case No. 10-24549) on Dec. 12, 2010 in White Plains, New York. In
its petition, A&P reported total assets of $2.5 billion and
liabilities of $3.2 billion as of Sept. 11, 2010.
Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C.
Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J.
Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois,
serve as counsel to the Debtors. Kurtzman Carson Consultants LLC
is the claims and notice agent. Lazard Freres & Co. LLC is the
financial advisor. Huron Consulting Group is the management
consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and
Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represent the Official Committee of Unsecured Creditors.
A&P obtained court approval for a new contract with C&S Wholesale
Grocers Inc., its principal supplier. The contract is designed to
save A&P $50 million a year when the supermarket operator emerges
from Chapter 11 reorganization.
A&P sold postpetition 12 Super-Fresh stores in the Baltimore-
Washington area for $37.83 million, plus the value of inventory.
Thirteen other locations didn't attract buyers at auction and were
closed mid-July 2011.
HARRISBURG, PA: Governor Declares Fiscal Emergency in City
----------------------------------------------------------
Governor Tom Corbett declared a fiscal emergency in the distressed
city of Harrisburg to ensure that vital municipal services are
maintained.
"City council's failure to enact a recovery plan in order to deal
with the city's distressed finances has led me to declare a fiscal
emergency," Corbett said. "This action ensures that vital
services will continue and public safety will be protected."
In accordance with Act 47 as amended, the governor is authorized
to declare a fiscal emergency, after it is determined that a
distressed third-class city has failed to adopt a fiscal recovery
plan and is insolvent, projected to be insolvent within 180 days
or unable to provide citizens with vital services.
The criteria to declare a fiscal emergency in Harrisburg is met
because the city council has failed to adopt the Act 47
coordinator's fiscal recovery plan or the mayor's fiscal recovery
plan, and the city's continued default on debt obligations related
to its resource-recovery facility.
As a result of the declaration, the governor will now direct the
secretary of the Department of Community and Economic Development
(DCED) -- within 10 days -to develop an Emergency Action Plan for
the city of Harrisburg to coordinate vital services and ensure
public safety. Services include police and firefighting, water
and wastewater, trash collection, payroll, and pension and debt
payments.
During a fiscal emergency, the city's authorities and elected
officials will continue to carry out the duties of their
respective offices as long as no decision or action conflicts with
the emergency action plan.
With the signing of this declaration, Harrisburg has a final
opportunity to develop or agree to a financial recovery plan that
is acceptable to the DCED secretary. Harrisburg city council has
a total of 30 days to complete this action, including 20 days to
prepare and submit a recovery plan to the DCED secretary, three
days for the secretary to review and determine if the plan is
sufficient to overcome the city's financial distress, and seven
days to pass an ordinance to enact the agreed-upon recovery plan.
About Harrisburg, Pennsylvania
The city of Harrisburg, in Pennsylvania, is coping with debt
related to a failed revamp of an incinerator. The city is
$65 million in default on $242 million owing on bonds sold to
finance an incinerator that converts trash to energy.
Four members of the City Council of Harrisburg on Oct. 11, 2011,
authorized the filing of a Chapter 9 bankruptcy petition (Bankr.
M.D. Pa. Case No. 11-06938) by the City of Harrisburg. Judge Mary
D. France presides over the case. Mark D. Schwartz, Esq. --
markschwartz6814@gmail.com -- and David A. Gradwohl, Esq., serve
as counsel. The petition estimated $100 million to $500 million
in assets and debts. Susan Wilson, the city's chairperson on
Budget and Finance, signed the petition.
The city council voted 4-3 on Oct. 11, 2011, to authorize the
Chapter 9 municipal bankruptcy filing. The city claims to be
insolvent, unable to pay its debt and in imminent danger of having
tax revenue seized by holders of defaulted bonds.
The city said in court papers it is in imminent jeopardy through
six pending legal actions by creditors with respect to a number of
outstanding bond issues relating to the Harrisburg Materials,
Energy, Recycling and Recovery Facilities, which processes waste
into steam and electrical energy. The owner and operator of the
incinerator is The Harrisburg Authority, which is unable to pay
the bond issues. The city is the primary guarantor under each
bond issue. The lawsuits were filed by Dauphin County, where
Harrisburg is located, Joseph and Jacalyn Lahr, TD Bank N.A., and
Covanta Harrisburg Inc.
Harrisburg Mayor Linda D. Thompson and the state of Pennsylvania
have objected to the bankruptcy filing. Mayor Thompson is
represented in the case by Kenneth W. Lee, Esq., Christopher E.
Fisher, Esq., Beverly Weiss Manne, Esq., and Michael A. Shiner,
Esq., at Tucker Arensberg, P.C. Counsel to the Commonwealth of
Pennsylvania are Neal D. Colton, Esq., Jeffrey G. Weil, Esq., Eric
L. Scherling, Esq., at Cozen O'Connor.
HARRISBURG, PA: Governor Signs Bill to Seize Control
----------------------------------------------------
Carla Main at Bloomberg News reports that Pennsylvania Governor
Tom Corbett signed a bill that lets him seize control of the
finances of Harrisburg even as City Council members seek
bankruptcy for the capital in an effort to ward off state action.
According to the report, legislators Oct. 19 empowered the
Republican governor to appoint a receiver who will be able to
overrule elected officials, a first for the state. After Gov.
Corbett declares a fiscal emergency, the city would have 30 days
to pass a state approved recovery plan before he may install the
manager.
Ms. Main recounts that a divided council authorized a bankruptcy
filing, the first for a U.S. capital in at least 40 years, after
the city skipped payments on debt tied to a trash-to-energy
incinerator project. The state and Mayor Linda Thompson, a
Democrat, have challenged the filing, and a judge will consider
the city's fate Nov. 23.
Kevin Harley, a spokesman for Gov. Corbett, said in an interview
with Bloomberg News Oct. 19 that the Governor's plan is to proceed
"as if the bankruptcy filing would be found illegal, the fiscal
emergency will be declared and a receiver will be named."
The city owes $310 million. That includes payments it missed and
that were then made by Dauphin County, which guaranteed some of
the incinerator debt, and bond insurer Assured Guaranty Municipal
Corp. of Hamilton, Bermuda.
According to Bloomberg News, Ashweeta Durani, an Assured
spokeswoman, declined to comment on a settlement. Gov. Corbett
said Oct. 18 that there were no negotiations by his
administration. Clayton Davidson, a Harrisburg-based lawyer
representing Dauphin County, said it would be open to mediation.
During a first hearing on Harrisburg's bankruptcy in federal court
Oct. 17, Judge Mary D. France urged the council, mayor and
commonwealth to enter mediation. A receiver would have the power
to sell assets, hire advisers and suspend the authority of elected
officials who interfere.
House Approves Bill
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
earlier reported that Harrisburg, Pennsylvania's capital, is
nearing the end of control over its destiny and facing the
possibility of dismissal of its municipal bankruptcy filing.
The state House of Representatives voted 177-18 in favor of a bill
allowing the governor to put the city into receivership.
The state Senate approved the bill the day before. The
legislation goes to the governor who already said he would sign
it. The receiver may seek to have the municipal Chapter 9 case
dismissed at a Nov. 23 hearing in U.S. Bankruptcy Court in
Harrisburg.
The state filed a motion to dismiss the bankruptcy two days after
the Oct. 11 bankruptcy filing that was purportedly authorized by a
4-3 vote of the city council.
About Harrisburg, Pennsylvania
The city of Harrisburg, in Pennsylvania, is coping with debt
related to a failed revamp of an incinerator. The city is
$65 million in default on $242 million owing on bonds sold to
finance an incinerator that converts trash to energy.
Four members of the City Council of Harrisburg on Oct. 11, 2011,
authorized the filing of a Chapter 9 bankruptcy petition (Bankr.
M.D. Pa. Case No. 11-06938) by the City of Harrisburg. Judge Mary
D. France presides over the case. Mark D. Schwartz, Esq. --
markschwartz6814@gmail.com -- and David A. Gradwohl, Esq., serve
as counsel. The petition estimated $100 million to $500 million
in assets and debts. Susan Wilson, the city's chairperson on
Budget and Finance, signed the petition.
The city council voted 4-3 on Oct. 11, 2011, to authorize the
Chapter 9 municipal bankruptcy filing. The city claims to be
insolvent, unable to pay its debt and in imminent danger of having
tax revenue seized by holders of defaulted bonds.
The city said in court papers it is in imminent jeopardy through
six pending legal actions by creditors with respect to a number of
outstanding bond issues relating to the Harrisburg Materials,
Energy, Recycling and Recovery Facilities, which processes waste
into steam and electrical energy. The owner and operator of the
incinerator is The Harrisburg Authority, which is unable to pay
the bond issues. The city is the primary guarantor under each
bond issue. The lawsuits were filed by Dauphin County, where
Harrisburg is located, Joseph and Jacalyn Lahr, TD Bank N.A., and
Covanta Harrisburg Inc.
Harrisburg Mayor Linda D. Thompson and the state of Pennsylvania
have objected to the bankruptcy filing. Mayor Thompson is
represented in the case by Kenneth W. Lee, Esq., Christopher E.
Fisher, Esq., Beverly Weiss Manne, Esq., and Michael A. Shiner,
Esq., at Tucker Arensberg, P.C. Counsel to the Commonwealth of
Pennsylvania are Neal D. Colton, Esq., Jeffrey G. Weil, Esq., Eric
L. Scherling, Esq., at Cozen O'Connor.
HEARUSA INC: Makes Second Request to Extend Exclusivity Period
--------------------------------------------------------------
Carla Main at Bloomberg News reports that HearUSA Inc. asked to
extend the period in which it has the exclusive right to file a
reorganization plan.
The request was HearUSA's second to the U.S. Bankruptcy Court in
West Palm Beach, Florida. It previously obtained an extension to
Oct. 28.
The new request, if granted, would give the company until Dec. 1
to file a plan, court papers showed.
In support of its request, HearUSA said in court papers that it is
"generally paying post-petition debts as they come due" and the
bankruptcy case involves "complex legal and business issues."
About HearUSA Inc.
HearUSA, Inc., which sells hearing aids in 10 states, filed for
Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No.
11-23341) on May 16, 2011, to sell the business for $80 million to
William Demant Holdings A/S. The Debtor said that assets are
$65.6 million against debt of $64.7 million as of March 31, 2010.
HearUSA owes $31.3 million to Siemens Hearing Instruments Inc.,
the principal supplier and primary secured lender.
Judge Erik P. Kimball presides over the case. Brian K. Gart,
Esq., Paul Steven Singerman, Esq., and Debi Evans Galler, Esq., at
Berger Singerman, P.A., represent the Debtor. The Debtor has
tapped Bryan Cave LLP as special counsel; Sonenshine Partners LLC,
investment banker; Development Specialist Inc., restructuring
advisor ans Joseph J. Luzinski as chief restructuring officer; and
AlixPartners LLC, as communications consultant. Trustee Services,
Inc., serves as claims and notice agent.
The Official Committee of Unsecured Creditors has been appointed
in the case. Robert Paul Charbonneau, Esq., and Daniel L. Gold,
Esq., at Ehrenstein Charbonneau Calderin, represent the Creditors
Committee.
An Official Committee of Equity Security Holders has also been
appointed. Mark D. Bloom, Esq., at Greenberg Traurig P.A., in
Miami, Fla., represents the Equity committee as counsel.
The U.S. Bankruptcy Court approved on Aug. 17, 2011, the sale of
substantially all of the assets of the Company to Audiology
Distribution, LLC, a wholly owed subsidiary of Siemens Hearing
Instruments, Inc., which submitted the highest and best bid for
the assets in the July 29, 2011 auction pursuant to 11 U.S.C.
Section 363. The purchase price is estimated to be roughly $109
million and comprised of $66.8 million in cash plus certain
assumed liabilities -- which includes repayment or assumption of
the $10 million DIP financing provided by the stalking horse
bidder, William Demant Holdings A/S -- plus the payment of cure
costs for assumed contracts, and the assumption of various
liabilities of the company.
HOMELAND SECURITY: Christopher Leichtweis Resigns as President
--------------------------------------------------------------
Christopher P. Leichtweis resigned from his position as President
and a director of Homeland Security Capital Corporation effective
Oct. 14, 2011.
About Homeland Security
Homeland Security Capital Corporation is an international provider
of specialized technology-based radiological, nuclear,
environmental disaster relief and electronic security solutions to
government and commercial customers.
The Company reported a net loss of $3.98 million on $0 of revenue
for the year ended June 30, 2011, compared with net income of
$2.04 million on $0 of revenue during the prior year.
The Company's balance sheet at June 30, 2011, showed $33.73
million in total assets, $40.35 million in total liabilities,
$169,768 in warrants payable, and a $6.79 million total
stockholders' deficit.
Coulter & Justus, P.C., in Knoxville, Tennessee, noted that
related party senior notes payable totaling $19,725,040 are due
and payable, the Company has incurred a loss from operations for
year ended June 30, 2011, and has a net capital deficiency in
addition to a working capital deficiency, which raises substantial
doubt about its ability to continue as a going concern.
In March 2008, the Company entered into a stock purchase agreement
with YA Global Investments, L.P. pursuant to which the Company
sold to YA 10,000 shares of its Series H Convertible Preferred
Stock. The Series H Stock is convertible into shares of Common
Stock at an initial ratio of 33,333 shares of Common Stock for
each share of Series H Stock, subject to adjustments -- including
the Company's wholly owned subsidiary, Safety & Ecology Holdings
Corporation, achieving certain earnings milestones, as defined,
for the calendar years ending December 31, 2009 and 2008.
Safety operates its business on a fiscal year ending June 30.
Safety achieved the first milestone for the calendar year ending
December 31, 2008. However, the second financial milestone for
the calendar year ended December 31, 2009, has not been satisfied,
resulting in a potential adjustment to the conversion ratio
yielding approximately 56,300 shares of Common Stock for each
share of Series H Stock, or approximately a potential additional
230,000,000 shares of the Company's Common Stock in the aggregate.
Management is discussing with YA the possibility of a waiver or
amendment of any adjustment to the Series H Stock conversion
ratio, however there can be no assurances YA will waive or amend
the adjustment, if any, to the Series H Stock conversion ratio.
YA has not exercised its conversion rights as of February 22,
2010.
In June 2009 the Company entered into an agreement YA extending
the due date on its senior notes payable, and accrued interest, to
YA from March 14, 2010, until October 1, 2010, for $2,500,000 and
April 1, 2011, for $10,560,000. In exchange, the Company agreed
to an increase in the interest rate, from 13% to 15%, on the
senior notes payable and certain other debt due to YA, effective
January 1, 2010, if the Company failed to secure a certain
contract by March 2010. In December 2009, the Company was
informed that it had been eliminated from the award process for
this contract. Accordingly, the Company will begin recording
interest expense at the increased rate effective Jan. 1, 2010.
As reported by the TCR on Aug. 10, 2011, Homeland Security entered
into a Forbearance Agreement by and among YA Global Investments,
L.P., as lender, Homeland Security Advisory Services, Inc.,
Celerity Systems, Inc., and Nexus Technology Group, Inc., pursuant
to which the Lender agreed to forbear from exercising its rights
and remedies under the Financing Documents and applicable law with
respect to one or more Events of Default that have occurred and
are continuing as a consequence of the Company having failed to
pay, when due at maturity, all outstanding principal and accrued
and unpaid interest under the Company's outstanding debt with the
Lender.
HUSSEY COPPER: Donlin Recano Retained as Claims Agent
-----------------------------------------------------
Donlin, Recano & Company, Inc. on Oct. 24 disclosed that it has
been retained to provide claims, noticing and balloting agent
services to Hussey Copper Corp. in its Chapter 11 cases.
About Donlin Recano
Donlin Recano -- http://www.donlinrecano.com-- is a provider of
claims, noticing, balloting, solicitation and technology
solutions. The company also provides bondholder identification
services, pre-pack bankruptcy solicitation and balloting, crisis
communications, financial printing services and call center
services through one of the largest and most technologically
advanced call centers in the country. It is a division of DF King
Worldwide, a financial communications, proxy solicitation and
stakeholder management company, serving over 1,000 public company,
mutual fund family and private equity firm clients domiciled in
North America, Europe and Asia.
About Hussey Copper
Hussey Copper Corp., based in Leetsdale, Pennsylvania, is one of
the leading manufacturers of copper products in the United States.
Hussey Copper was founded in Pittsburgh in 1848. The Company and
its affiliates, which operate one manufacturing facility in
Leetsdale and two facilities in Eminence, Kentucky, manufacture "a
wide range of value-added copper products and copper-nickel
products. The Company has more than 500 full-time employees.
Hussey Copper Corp. filed a Chapter 11 petition (Bankr D. Del.
Case No. 11-13010) on Sept. 27, 2011, with a deal to sell
substantially all assets. Five other affiliates also filed
separate petitions (Case Nos. 11-13012 to 11-13016). Hussey
Copper Ltd. estimated $100 million to $500 million in assets and
debts. Hussey Copper Corp. estimated up to $50,000 in assets and
up to $100 million in debts.
Mark Minuti, Esq., at Saul Ewing LLP, serves as counsel to the
Debtors. Donlin Recano & Company Inc. is the claims and notice
agent.
An official creditors' committee has been appointed in the case.
The panel selected Lowenstein Sandler PC as counsel.
The stalking horse bidder, KHC Acquisitions LLC, a unit of Kataman
Metals LLC, is represented in the case by David D. Watson, Esq.,
and Scott Opincar, Esq., at McDonald Hopkins LLC, in Cleveland.
Counsel to PNC Bank NA, as lender, issuer and agent for the
Debtors' secured lenders, are Lawrence F. Flick II, Esq., Blank
Rome LLP, in New York, and, Regina Stango Kelbon, Esq., at Blank
Rome LLP, in Wilmington, serves as counsel.
HYTHIAM INC: David Smith Discloses 40.3% Equity Stake
-----------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, David E. Smith disclosed that he beneficially
owns 11,083,186 shares of common stock of Catasys, Inc.,
representing 40.3% of the shares outstanding. The percentage is
based on 21,704,217 shares of Common Stock of Catasys, Inc.,
issued and outstanding as of Oct. 5, 2011, as reported in the
Company's S-1/A, as filed with the SEC on Oct. 11, 2011.
A full-text copy of the amended Schedule 13D is available for free
at http://is.gd/FkQR16
About Hythiam, Inc.
Based in Los Angeles, California, Hythiam, Inc., n/k/a Catasys,
Inc., is a healthcare services management company, providing
through its Catasys(R) subsidiary specialized behavioral health
management services for substance abuse to health plans.
The Company reported a net loss of $19.99 million on $448,000 of
total revenues for the twelve months ended Dec. 31, 2010, compared
with a net loss of $9.15 million on $1.53 million of total
revenues during the prior year.
The Company's balance sheet at June 30, 2011, showed $3.48 million
in total assets, $4.13 million in total liabilities, and a
$652,000 total stockholders' deficit.
Rose, Snyder & Jacobs, in Encino, Calif., expressed substantial
doubt about the Company's ability to continue as a going concern.
The independent auditors noted that the Company has incurred
significant operating losses and negative cash flows from
operations during the year ended Dec. 31, 2010.
IMPERIAL PETROLEUM: Reports $6.1-Mil. Net Income in Fiscal 2011
---------------------------------------------------------------
Imperial Petroleum, Inc., filed with the U.S. Securities and
Exchange its Annual Report on Form 10-K reporting net income of
$6.07 million on $109.97 million of total operating income for the
year ended July 31, 2011, compared with a net loss of
$17.81 million on $5.66 million of total operating income during
the prior year.
The Company's balance sheet at July 31, 2011, showed
$24.53 million in total assets, $24.10 million in total
liabilities, and $431,300 in total stockholders' equity.
Weaver Martin & Samyn, LLC, in Kansas City Missouri, expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
has suffered recurring losses from operations and is dependent
upon obtaining debt financing for funds to meet its cash
requirements.
A full-text copy of the Form 10-K is available for free at:
http://is.gd/9wCSI7
About Imperial Petroleum
Headquartered in Evansville, Ind., Imperial Petroleum Inc.
(OTC BB: IPMN) operates as a diversified energy and mineral mining
company in the United States. Its oil and natural gas properties
include the Coquille Bay field located in Plaqumines Parish,
Louisiana; the Haynesville field located in Claiborne and Webster
Parishes in north Louisiana; the Bastian Bay field located in
Plaquemines parish, Louisiana; LulingField located in Guadalupe
county, Texas; and the Shrewsbury field in Grayson County and the
Claymour field in Todd County, western Kentucky.
As reported by the TCR on June 24, 2011, the Company anticipates
its current working capital will not be sufficient to meet its
required capital expenditures and that the Company will be
required to either access additional borrowings from its lender or
access outside capital. Currently the Company projects it will
require non-discretionary capital expenditures of approximately
US$500,000 in the next fiscal year to re-establish and maintain
economic levels of production at Coquille Bay. Without access to
such capital for non-discretionary projects, the Company's
production may be significantly curtailed or shut in and
jeopardize its leases.
INNKEEPERS USA: Court Approves Revised Cerberus Deal
----------------------------------------------------
Joseph Checkler, writing for Dow Jones Newswires, reports that
Judge Shelley C. Chapman on Friday approved a lower-priced sale of
Innkeepers USA Trust's hotels to private-equity firm Cerberus
Capital Management LP, putting the hotelier's bankruptcy exit back
on track after nearly two months of hiccups. According to Dow
Jones, Judge Chapman "very happily" approved the compromise,
Innkeepers said on Wednesday.
The Troubled Company Reporter on Oct. 20, 2011, reported that
Innkeepers reached an updated agreement with Cerberus Series Four
Holdings, LLC, Chatham Lodging Trust and other related parties
that is supported by Innkeepers' constituents and clears the way
for the sale of 64 Innkeepers hotels to a Cerberus-Chatham joint
venture for $1.02 billion.
The sales price yields an increase in value of $75 million to
creditors when compared to the baseline bid established for the
May 2011 auction. Moreover, the settlement can be effectuated
through consensual modifications to the existing Plan of
Reorganization confirmed by the U.S. Bankruptcy Court in June
2011, which will allow the Company to exit from Chapter 11 as
planned.
"We are very pleased with this outcome," said Innkeepers' Chief
Restructuring Officer, Marc A. Beilinson. "The updated agreement
provides a significant cash premium to the original stalking horse
bid and a meaningful return to our creditors, and it allows us to
move ahead with a timely exit from Chapter 11."
With the exception of Midland Loan Services and Lehman ALI Inc.,
both of which support the terms of the deal and have agreed to
their treatment under the modified Plan, all of Innkeepers'
unsecured creditors and equity holders will continue to receive
the same treatment they were promised under the confirmed Plan in
June. The revised agreement is subject to Court approval.
The fixed-rate debt, serviced by Midland, will be modified to the
new amount of approximately $675 million. Lehman, the holder of
the floating-rate mortgages, will receive a cash payment of
approximately $224 million on account of its claims.
Mr. Beilinson noted that throughout its restructuring process,
Innkeepers has maintained normal business operations at all of its
properties, including completing substantial work on the property
improvement plans required by franchisors on time and under
budget, as well as successfully maintaining its supportive
relationships with its franchisors.
"Chatham and Cerberus are excited about owning this valuable
portfolio and look forward to creating significant value for their
shareholders and investors," said Jeff Fisher, Chatham's Chief
Executive Officer.
About Innkeepers USA Trust
Innkeepers USA Trust is a self-administered Maryland real estate
investment trust with a primary business focus on acquiring
premium-branded upscale extended-stay, mid-priced limited service,
and select-service hotels.
Innkeepers, through its indirect subsidiaries, owns and operates
an expansive portfolio of 72 upscale and mid-priced extended-stay
and select-service hotels, consisting of approximately 10,000
rooms, located in 20 states across the United States.
Apollo Investment Corporation acquired Innkeepers in June 2007.
Innkeepers USA Trust and 91 affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. 10-13800) on July 19, 2010.
The Company's consolidated assets for 2009 totaled approximately
$1.5 billion. As of July 19, 2010, the Company and its affiliates
have incurred $1.29 billion of secured debt.
Paul M. Basta, Esq., at Kirkland & Ellis LLP, in New York; Anup
Sathy, P.C., Esq., Marc J. Carmel, Esq., at Kirkland & Ellis in
Chicago; and Daniel T. Donovan, Esq., at Kirkland & Ellis in
Washington, D.C., serve as counsel to the Debtors. AlixPartners
is the restructuring advisor and Marc A. Beilinson is the chief
restructuring officer. Moelis & Company is the financial advisor.
Omni Management Group, LLC, is the claims and notice agent.
Attorneys at Morrison & Foerster, LLP, represent the Official
Committee of Unsecured Creditors.
INNKEEPERS USA: Judge Approves $1-Billion Deal With Cerberus
------------------------------------------------------------
Hilary Russ at Bankruptcy Law360 reports that U.S. Bankruptcy
Judge Shelley C. Chapman signed off Friday on Innkeepers USA
Trust's hard-fought $1.02 billion deal to sell 64 hotels to a unit
of Cerberus Capital Management LP, which had been hit with a
lawsuit after it backed out of the transaction.
Judge Chapman approved the settlement laying out the revised
offer, which had previously been $1.12 billion before Cerberus
Series Four Holdings LLC and Chatham Lodging Trust nixed the deal
on Aug. 19, citing turmoil in the world financial markets,
according to Law360.
About Innkeepers USA Trust
Innkeepers USA Trust is a self-administered Maryland real estate
investment trust with a primary business focus on acquiring
premium-branded upscale extended-stay, mid-priced limited service,
and select-service hotels.
Innkeepers, through its indirect subsidiaries, owns and operates
an expansive portfolio of 72 upscale and mid-priced extended-stay
and select-service hotels, consisting of approximately 10,000
rooms, located in 20 states across the United States.
Apollo Investment Corporation acquired Innkeepers in June 2007.
Innkeepers USA Trust and 91 affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. 10-13800) on July 19, 2010.
The Company's consolidated assets for 2009 totaled approximately
$1.5 billion. As of July 19, 2010, the Company and its affiliates
have incurred $1.29 billion of secured debt.
Paul M. Basta, Esq., at Kirkland & Ellis LLP, in New York; Anup
Sathy, P.C., Esq., Marc J. Carmel, Esq., at Kirkland & Ellis in
Chicago; and Daniel T. Donovan, Esq., at Kirkland & Ellis in
Washington, D.C., serve as counsel to the Debtors. AlixPartners
is the restructuring advisor and Marc A. Beilinson is the chief
restructuring officer. Moelis & Company is the financial advisor.
Omni Management Group, LLC, is the claims and notice agent.
Attorneys at Morrison & Foerster, LLP, represent the Official
Committee of Unsecured Creditors.
INPHASE TECHNOLOGIES: Files for Chapter 11 in Denver
----------------------------------------------------
Carla Main at Bloomberg News reports that InPhase Technologies
Inc., a data-processing and storagetechnology company, filed for
Chapter 11 bankruptcy protection in Denver on Oct. 18 (Bankr. D.
Col. Case No. 11-br-34489). InPhase, based in Longmont, Colorado,
declared assets of less than $100 million and liabilities of less
than $50 million. Signal Lake SF LLC, based in Westport,
Connecticut, owns 100% of the preferred stock, while 78.5 million
common shares are spread among other owners, including 4.3 million
owned by employees, according to court files. Among the 20
largest creditors listed are law firms Morrison & Foerster LLP,
owed $422,987, and Vedder Price PC, owed $357,352. A meeting of
creditors is scheduled for Nov. 28.
Based in Longmont, Colorado, InPhase Technologies --
http://www.inphase-tech.com-- develops holographic data storage
recording media and systems. InPhase was founded in 2000.
InPhase is led by CEO Art Rancis and senior vice president of
engineering James Russo. Initial InPhase customers have included
the likes of Turner Broadcasting.
INTERNAL FIXATION: Matt Endara Resigns from All Positions
---------------------------------------------------------
Matt Endara resigned from all positions with Internal Fixation
Systems, Inc., namely, Vice President - Sales and Corporate
Strategic Planning and as a member of the Company's Board of
Directors.
On Oct. 17, 2011, the Company and Mr. Endara entered into a
Separation Agreement. The Separation Agreement provides that with
respect to stock options to purchase 150,000 shares of the
Company's common stock which were granted to Mr. Endara in
connection with the execution of his Employment Agreement dated
Oct. 1, 2010, as amended: (i) options to purchase 75,000 shares
will be exercisable at any time and from time to time from
Oct. 17, 2011, through Oct. 31, 2014, at a per share purchase
price of $.20; and (ii) the remaining stock options were forfeited
and of no further force or effect.
Under the terms of the Separation Agreement, Mr. Endara has
agreed, for a one year period commencing on Oct. 17, 2011, not to
offer, sell, contract to sell, pledge or grant any option to
purchase, make any short sale or otherwise dispose of any more
than 30,000 shares of the Company's common stock beneficially
owned by him during any three-month period; provided however, that
this restriction does not apply to any shares of common stock
acquired by him on the open market after the Separation Date.
The Separation Agreement also provides for a mutual release of the
parties from any and all known or unknown claims, demands, actions
or causes of action that now exist or that may arise in the
future, based upon events occurring or omissions on or before the
date of the execution of the Separation Agreement, provided
however, that the Separation Agreement specifically excludes from
such release certain of Mr. Endara's rights and claims arising
from or under or related to any obligation of the Company under
the Separation Agreement, any indemnification, advancement of
expenses, or contribution claims or rights that Mr. Endara might
have under any agreement, plan, program, policy, or arrangement of
the Company, COBRA, and any vested stock options.
On Oct. 18, 2011, the Company and Stephen J. Dresnick, M.D.
entered into an Amended and Restated Employment Agreement
containing compensation and other terms related to Dr. Dresnick's
service as the Company's Chairman, President and Chief Executive
Officer. The term of the Dresnick Employment Agreement is three
years, which term may be extended for two additional two-year
periods by the Company in its sole discretion, and such other
additional periods as are mutually agreed by the parties.
Under the Dresnick Employment Agreement, Dr. Dresnick is required
to perform the duties as determined by the Board of Directors from
time to time and is to devote sufficient working time, attention
and energies to the performance of the Company's business. Dr.
Dresnick is entitled to receive an annual salary of $125,000 and
certain employee benefits, including a car allowance of $650 per
month. The Dresnick Employment Agreement also confirms the terms
of the options granted to Dr. Dresnick under the prior employment
agreement with the Company, whereby Dr. Dresnick was granted
options to purchase 150,000 shares of the Company's common stock
at an exercise price per share equal to $.20 per share. The
options are exercisable for a three-year period in 50,000
increments commencing on Oct. 1, 2011, and each one-year
anniversary date thereafter.
Under the Dresnick Employment Agreement, if Dr. Dresnick's
employment is terminated for cause by the Company, Dr. Dresnick is
entitled to receive accrued salary through the termination date
and if his employment is terminated for any other reason, he is
entitled to receive severance equal to two years' salary. The
termination of his employment for any reason shall terminate all
other positions held by Dr. Dresnick within the Company, including
his service on committees and boards of the Company or any of the
Company's subsidiaries. The Dresnick Employment Agreement also
contains certain restrictive covenants, including a restriction
prohibiting Dr. Dresnick from competing with the Company for three
years following any termination of his employment.
On Oct. 18, 2011, the Company and Kenneth West entered into an
Amended and Restated Employment Agreement containing compensation
and other terms related to Mr. West's service as the Company's
Vice President - Sales and Marketing of the Company. The term of
the West Employment Agreement is three years, which term may be
extended for two additional two-year periods by the Company in its
sole discretion, and such other additional periods as are mutually
agreed by the parties.
Under the West Employment Agreement, Mr. West is required to
perform the duties as determined by the Company's President and
Chief Executive Officer from time to time and is to devote
sufficient working time, attention and energies to the performance
of the Company's business. Mr. West is entitled to receive an
annual salary of $125,000 and certain employee benefits including
a car allowance of $650 per month. The West Employment Agreement
also confirms the terms of the options granted to Mr. West under
the prior employment agreement with the Company, whereby Mr. West
was granted options to purchase 150,000 shares of the Company's
common stock at an exercise price per share equal to $.20 per
share. The options are exercisable for a three-year period in
50,000 increments commencing on October 1, 2011 and each one-year
anniversary date thereafter.
Under the West Employment Agreement, if Mr. West's employment is
terminated for cause by the Company, Mr. West will be entitled to
receive accrued salary through the termination date and if his
employment is terminated for any other reason, he is entitled to
receive severance equal to two years' salary. The termination of
his employment for any reason shall terminate all other positions
held by Mr. West within the Company, including his service on
committees, and boards of the Company or any of the Company's
subsidiaries. The West Employment Agreement also contains certain
restrictive covenants, including a restriction prohibiting Mr.
West from competing with the Company for three years following any
termination of his employment.
On Oct. 18, 2011, the Company and Christopher Endara entered into
an Amended and Restated Employment Agreement containing
compensation and other terms related to Mr. Endara's service as
the Company's Vice President - Engineering, Quality and Regulatory
Affairs of the Company. The term of the Endara Employment
Agreement is three years, which term may be extended for two
additional two-year periods by the Company in its sole discretion,
and such other additional periods as are mutually agreed by the
parties.
Under the Endara Employment Agreement, Mr. Endara is required to
perform the duties as determined by the Company's President and
Chief Executive Officer from time to time and is to devote
sufficient working time, attention and energies to the performance
of the Company's business. Mr. Endara is entitled to receive an
annual salary of $125,000 and certain employee benefits including
a car allowance of $650 per month. The Endara Employment
Agreement also confirms the terms of the options granted to Mr.
Endara under the prior employment agreement with the Company,
whereby Mr. Endara was granted options to purchase 150,000 shares
of the Company's common stock at an exercise price per share equal
to $.20 per share. The options are exercisable for a three-year
period in 50,000 increments commencing on Oct. 1, 2011, and each
one-year anniversary date thereafter.
Under the Endara Employment Agreement, if Mr. Endara's employment
is terminated for cause by the Company, Mr. Endara will be
entitled to receive accrued salary through the termination date
and if his employment is terminated for any other reason, he is
entitled to receive severance equal to two years' salary. The
termination of his employment for any reason will terminate all
other positions held by Mr. Endara within the Company, including
his service on committees, and boards of the Company or any of the
Company's subsidiaries. The Endara Employment Agreement also
contains certain restrictive covenants, including a restriction
prohibiting Mr. Endara from competing with the Company for three
years following any termination of his employment.
About Internal Fixation
South Miami, Fla.-based Internal Fixation Systems, Inc., is a
manufacturer and marketer of generically priced orthopedic and
podiatric implants. Customers include ambulatory surgery centers,
hospitals and orthopedic surgeons. IFS's strategy is to focus on
commonly used implants that no longer have patent protection. The
Company enhances the implants and sells them at prices below the
market leaders.
Goldstein Schechter Koch P.A., in Hollywood, Florida, expressed
substantial doubt about Internal Fixation Systems' ability to
continue as a going concern, following the Company's 2010 results.
The independent auditors noted that the Company had a net loss of
$781,440 for the year ended Dec, 31, 2010, cumulative losses since
inception of $757,218 and a working capital deficit of $123,409.
The Company's balance sheet at June 30, 2011, showed $1.65 million
in total assets, $2.02 million in total liabilities, and a
$372,582 stockholders' deficit.
JACKSON GREEN: Taps Gussis Law Group as Attorney
------------------------------------------------
Jackson Green LLC asks the U.S. Bankruptcy Court for the Western
District of Wisconsin to employ Gussis Law Group LLC as attorney
for creation and review of leases, the commencement of suit, for
collection of rents and savings tenants and compromising claims.
Samuel P. Gussis will charge $325 per hour for this engagement.
The Debtor assures the Court that the firm is "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
About Jackson Green
Based in Minocqua, Wisconsin, Jackson Green LLC owns a commercial
office building and parking lot in Chicago. Jackson Green
originally filed for Chapter 11 bankruptcy (Bankr. W.D. Wis. Case
No. 09-10099) on Jan. 9, 2009. The Court confirmed the Debtor's
chapter 11 plan on May 18, 2010.
Jackson Green returned to bankruptcy (Bankr. W.D. Wis. Case No.
11-14038) on June 23, 2011. Judge Thomas S. Utschig presides over
the so-called Chapter 22 case. The Law Office of Terrence J.
Byrne serves as the Debtor's Chapter 22 counsel.
In its schedules, the Debtor disclosed $25,194,530 in assets and
$22,838,968 in liabilities. The petition was signed by Paula
Heyes, member.
Secured lender Wells Fargo is represented by lawyers at Foley &
Lardner LLP.
The United States Trustee said that a committee under 11 U.S.C.
Sec. 1102 has not been appointed because an insufficient number of
persons holding unsecured claims against Jackson Green LLC, have
expressed interest in serving on a committee.
JACKSON GREEN: Wells Fargo Wants Chapter 11 Case Moved to Illinois
------------------------------------------------------------------
Wells Fargo Bank N.A., as trustee for the registered Holders of
Credit Suisse First Boston Mortgage Securities Corp., Commercial
Mortgage Pass-Through Certificates, Series 2006-C4, asks the Hon.
Thomas S Utschig of the U.S. Bankruptcy Court for the Western
District of Wisconsin to transfer the venue of the Chapter 11 case
of Jackson Green LLC to the Northern District of Illinois.
According to the bank, the Debtor is an Illinois limited liability
company and the owner of a commercial office building and parking
lot in Chicago. The Debtor's members currently reside in Iowa.
The Debtor's primary secured creditor, the Trustee, is a South
Dakota corporation. There is therefore no connection whatsoever to
Wisconsin, and the Trustee requests that this Court enter an order
transferring the chapter 11 case to the Northern District of
Illinois.
Joanne Lee, Esq., at Foley & Lardner LLP, represents the bank.
About Jackson Green
Based in Minocqua, Wisconsin, Jackson Green LLC owns a commercial
office building and parking lot in Chicago. Jackson Green
originally filed for Chapter 11 bankruptcy (Bankr. W.D. Wis. Case
No. 09-10099) on Jan. 9, 2009. The Court confirmed the Debtor's
chapter 11 plan on May 18, 2010.
Jackson Green returned to bankruptcy (Bankr. W.D. Wis. Case No.
11-14038) on June 23, 2011. Judge Thomas S. Utschig presides over
the so-called Chapter 22 case. The Law Office of Terrence J.
Byrne serves as the Debtor's Chapter 22 counsel.
In its schedules, the Debtor disclosed $25,194,530 in assets and
$22,838,968 in liabilities. The petition was signed by Paula
Heyes, member.
Secured lender Wells Fargo is represented by lawyers at Foley &
Lardner LLP.
The United States Trustee said that a committee under 11 U.S.C.
Sec. 1102 has not been appointed because an insufficient number of
persons holding unsecured claims against Jackson Green LLC, have
expressed interest in serving on a committee.
JEFFERSON COUNTY, AL: Commissioner Says Bankruptcy May Be Near
--------------------------------------------------------------
Carla Main at Bloomberg News reported Oct. 21 that Sandra Little
Brown, a Jefferson County commissioner, told constituents that a
bankruptcy filing is five to seven days away if Alabama
legislators don't act on legal changes needed to enable a
settlement with holders of $3.14 billion in debt.
According to the report, Ms. Brown described the situation as a
"race for time." Speaking at a public meeting in her district,
Ms. Brown urged residents to lobby lawmakers to pass laws needed
to cement a tentative deal the five-member commission approved in
September to ward off a record municipal bankruptcy.
The agreement, Bloomberg relates, would cut more than $1 billion
off the county's obligation created by a failed financing for a
sewer renovation.
The report discloses that in a meeting last week, the county's
Democratic lawmakers -- about half its delegation -- said they
opposed the agreement. Democrats and Republicans disagree on how
to bring new revenue to replenish the county's general fund in the
wake of a court order striking down a tax on wages, a situation
that might force bankruptcy on its own. A single lawmaker can
derail the deal, under Alabama legislative procedure.
The tentative deal requires a series of rate increases for those
who use the system. The Alabama Legislature also must pass laws
creating a new sewer authority, backing new debt with "moral
obligation," and finding new money for the county.
Jimmie Stephens, the commission's finance committee chairman,
disputed Brown's timeline for a bankruptcy decision. He said in a
telephone interview that creditors -- and a receiver now
representing them -- have until the end of the month to decide
whether to impose rate increases on sewer customers outside the
settlement agreement.
About Jefferson County
Jefferson County has its seat in Birmingham, Alabama. It has a
population of 660,000. It ended its 2006 fiscal year with a
$42.6 million general fund balance, according to Standard &
Poor's.
Jefferson County is trying to restructure $3.14 billion in sewer
debt. A bankruptcy by Jefferson County stands to be the largest
municipal bankruptcy in U.S. history. It could beat the record of
$1.7 billion set by Orange County, California in 1994.
In September 2010, Alabama Circuit Court Judge Albert Johnson
named John S. Young Jr. LLC as receiver for the sewer system.
Jefferson County has retained Kenneth Klee, Esq., at Klee Tuchin
Bogdanoff & Stern LLP to represent the county in the event of
bankruptcy. Mr. Klee is considered to be a municipal-bankruptcy
expert, having handled Orange County, Calif.'s bankruptcy case in
1994.
A Chapter 9 filing Jefferson County would be the largest in U.S.
municipal history.
JER/JAMESON MEZZ: Mezzanine Borrower in Ch. 11 to Stop Foreclosure
------------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that a mezzanine lender for the Jameson Inns Inc. hotel
chain put a mezzanine borrower -- JER/Jameson Mezz Borrower II LLC
-- into Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-13338)
on Oct. 18 in Delaware to prevent foreclosure by another mezzanine
lender.
Gramercy Loan Servicing LLC, as lender on a $40 million
obligation, previously took over a mezzanine borrower to the hotel
chain, which has 100 properties in 12 states. Gramercy was facing
foreclosure on Oct. 19 of another $40 million mezzanine loan held
by Colony Capital LLC from Santa Monica, California.
The hotels have a total of $335 million in financing, according to
a court filing. At the top of the list is a $175 million mortgage
loan with Wells Fargo Bank NA serving as special servicer. There
are four tranches of mezzanine loans, each for $40 million.
All of the mezzanine loans matured in August, with Gramercy taking
over its mezzanine borrower at the time. The Chapter 11 filing
had the effect of preventing Colony from wiping out Gramercy's
interest.
The Jameson properties are operated under the names Jameson Inn
and Signature Inn. The hotels are based in Smyrna, Georgia.
The mezzanine lender in Chapter 11 said its assets are worth more
than $100 million while debt is less than $50 million.
About Jameson
Founded in 1987, Jameson is a chain of 103 small, budget hotels
operating under the Jameson brand in the Southeast and Midwest.
The chain was taken private in a 2006 buyout by JER Partners, a
unit of real-estate investor J.E. Robert Cos. JER then put $330
million of debt on the chain to finance the buyout.
Colony specializes in real estate and has roughly $34 billion of
assets under management.
KINGS PROFESSIONAL: Involuntary Ch. 11 Filed by "General Partner"
-----------------------------------------------------------------
On Thursday Cura Financial, LLC, of Capitola, California, filed an
involuntary chapter 11 petition in the U.S. Bankruptcy Court for
the Eastern District of California in Sacramento against an entity
named Kings Professional Basketball Club, asserting its interest
as that of a general partner. No other alleged creditors or
partners of Kings Professional Basketball Club are listed on the
involuntary petition.
According to Chapter11Cases.com, it appears that Kings
Professional Basketball Club is a legal entity which is a minority
owner of the Sacramento Kings.
Chapter11Cases.com notes that while the name of the entity
suggests that the involuntary petition has been filed against the
legal entity which owns the Sacramento Kings franchise of the
National Basketball Association (NBA), it appears to actually be
an entity which owns 7.06% of the legal entity that owns the
Sacramento Kings. Various available records reflect that the
legal entity which directly owns the Sacramento Kings is
Sacramento Kings Limited Partnership, not Kings Professional
Basketball Club. Chapter11Cases.com says the California Secretary
of State's online business search does not list a corporation,
limited liability company or limited partnership under the entity
name of Kings Professional Basketball Club.
Chapter11Cases.com avers that there is evidence, however, that the
Kings Professional Basketball Club legal entity is related to the
Sacramento Kings NBA franchise. First, Google's news archives
reflect that the then-Kansas City-Omaha Kings were sold to Kings
Professional Basketball Club, Inc., in May 1973. In addition, the
involuntary petition asserts that the Kings Professional
Basketball Club bankruptcy is related to an Aug. 8, 2011
bankruptcy filing by Robert A. Cook, who according to several
articles, is a minority owner of Sacramento Kings. Finally,
Chapter11Cases.com states, the list of Robert Cook's largest 20
unsecured creditors attached to his bankruptcy petition contains a
listing for a disputed $13 million claim potentially owing to Omni
Financial, LLC, which shares the same address in Capitola as Cura
Financial, LLC.
The nature of the disputed claim is listed as "shares of Kings
Professional Basketball Club - subject to pending litigation in
Santa Cruz Superior Court". Chapter11Cases.com further notes that
in the schedules of assets and liabilities filed in the Cook
bankruptcy case, Cook scheduled his ownership of KPBC (presumably
a reference to Kings Professional Basketball Club) and states that
"KPBC owns 7.06% of Sacramento Kings, LP and Arco Arena, LP." The
value of his ownership in KPBC was scheduled as a single dollar,
but the schedules state that "market value is net value of
debtor's interests in these entities less encumbrances." The list
of creditors attached to the petition listed $10 million of Omni
Financial's disputed claim as being secured (presumably by the
interest in Kings Professional Basketball Club).
At present, Chapter11Cases.com says no other significant pleadings
have been filed in the involuntary case.
KINGSBURY CORP: Hearing on DIP Loan Scheduled for Oct. 31
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Hampshire will
convene a hearing on Oct. 31, 2011, at 9:30 a.m., to consider
Kingsbury Corporation's request for authorization to obtain
postpetition financing from Diamond Business Credit, LLC, in the
form of an increase in the inventory advance rate with the advance
not to exceed $300,000, in addition to the Debtor's prepetition
revolving line of credit with Diamond.
AS reported in the Troubled Company Reporter on Oct. 20, 2011, the
Debtor required the proposed postpetition financing in order to
rehire employees and purchase supplies necessary to restart its
operations and meet other critical postpetition obligations in the
ordinary course. The proceeds of the DIP Financing will be used
to pay the expenses set forth in a Budget, such as payroll, vendor
and supplier costs, and other expenses necessary to restart and
maintain operations. Absent this relief, the Debtor will be
forced to liquidate its assets quickly, to the substantial
detriment of its creditors. The DIP Financing is necessary to
preserve, protect and maintain the going concern value of the
Debtor's assets and maximize the value of its estate.
According to Jennifer Rood, Esq., at Berstein, Shur, Sawyer &
Nelson, the Debtor is unable to obtain unsecured credit sufficient
to operate or reorganize its business by providing an
administrative expense claim. The DIP Financing was obtained on
the most favorable terms available to the Debtor following
discussions with various lending sources. Under existing time
constraints and conditions, and considering the limited available
collateral of the Debtor, alternative financing was not and is not
available at all, or on a timely basis.
Ms. Rood informed the Court that the Debtor does not have an
alternative source of working capital with which to continue its
operations and to pay its ordinary course obligations, as those
owed to suppliers, employees, insurers, and taxing authorities.
In order for the Debtor to continue operating its business during
the case, the Debtor needs a source of working capital.
About Kingsbury Corp.
Kingsbury Corp. -- http://www.kingsburycorp.com-- makes and
assembles machine systems.
Kingsbury Corporation and affiliate Ventura Industries, LLC, filed
Chapter 11 petition (Bankr. D. N.H. Case Nos. 11-13671 and 11-
13687) on Sept. 30, 2011. Jennifer Rood, Esq., and Robert J.
Keach, Esq., at Berstein, Shur, Sawyer & Nelson, serves as counsel
to the Debtors. Kingsbury estimated assets and debts of up to
$50 million in its Chapter 11 petition.
KOOSHAREM CORP: S&P Cuts Corp. Credit Rating to 'CC' After Audit
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating and first-lien rating on Koosharem Corp. to 'CC' from 'CCC-
'. The second-lien rating is affirmed at 'C'. The recovery ratings
on the company's debt issues remain unchanged. The rating outlook
is negative.
The rating action is based on the company's receipt in September
2011 of an adverse $51 million damage judgment regarding its
litigation with the California State Fund, and the company's
auditor, PricewaterhouseCoopers LLP, stating "these factors raise
substantial doubt about the company's ability to continue as a
going concern." "The company is negotiating a settlement and
payment plan with the California State Fund and has plans to
appeal to verdict. It has accrued $52.1 million as a current
liability for legal and settlement of this matter, but in our
opinion it does not have sufficient liquidity to make the payment
and still fund operations, given that its first-lien lenders have
frozen its access to its revolving credit facility. Also, the
company is in active talks with its investment bankers to
restructure its debt facilities, which would qualify as a
'distressed exchange' under our criteria," according to S&P.
"In addition to these developments, the rating also considers the
company's business risk profile vulnerable, because of its
position as a small player in the highly fragmented, competitive,
and cyclical temporary staffing industry. The company has a highly
leveraged financial profile, in our view, because of very high
debt usage, and strained liquidity," S&P related.
"We expect Koosharem to continue to underperform its larger peers,
especially in revenue growth," said Standard & Poor's credit
analyst Hal Diamond.
The competitive nature of the staffing industry and the company's
small size expose Koosharem to competitive pricing pressures from
much larger players with greater operating efficiencies.
Discounting is widespread in the industry and even the largest
players operate with a slim EBITDA margin. Roughly 40% of
Koosharem's revenues are generated in California, which makes the
company vulnerable to cyclical shifts in the local economy and
high workers' compensation costs. Also, highly cyclical light
industrial staffing accounts for about two-thirds of its business.
Light industrial staffing demand remains very susceptible to the
continued downsizing of U.S. manufacturing and the loss of jobs
overseas.
"The negative rating outlook reflects our view that the company
either could default over the near term, or do some form of
distressed debt exchange. We would lower the corporate credit
rating to 'SD' if the company restructures its debt for equity. We
consider the completion of a debt-to-equity exchange, even with
investor consent, to be tantamount to a default when the
nonpayment is a function of the borrower being in financial
distress," S&P related.
"An upgrade, which we believe is highly unlikely, would require a
significant equity infusion and a refinancing at par value, with
either substantially the same terms or what we would regard as
appropriate compensation to lenders for an easing of terms or
lengthening of maturity," S&P said.
LAKE PLEASANT: Plan Outline Hearing Continued Until Nov. 2
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona has
continued until Nov. 2, 2011, at 1:30 p.m., the hearing to
consider adequacy of the information in the disclosure statement
explaining Lake Pleasant Group's Chapter 11 Plan.
As reported in the Troubled Company Reporter on July 25, 2011,
the Debtors' schedules list Johnson Bank as a creditor with a
total claim in the approximate amount of $19.4 million secured by
a first position lien on the Properties. Lake Pleasant's
schedules list unsecured creditors in the amount of $151,000, and
DLGC's schedules list unsecured creditors in the amount of
$190,000.
The Debtors are currently in the process of seeking a rezoning of
the Properties to Mixed Used-Recreational Vehicle Resort and
Commercial to allow a luxury oriented recreational-vehicle resort
with approximately 1,512 spaces to exist on the Properties. The
DLGC Property will also include a 22-acre commercial site which
will allow the opportunity for supporting retail and two R.V.
storage parcels, as ancillary uses to help support the RV resort
and the surrounding areas.
The Debtors and Pensus Cholla Hills RV Resort LLC have entered
into the Sales Agreement which provides for the sale of the
Properties to Pensus, for not less than $23 million. The Sale of
the Properties will be conditioned upon the Properties being
rezoned as set forth above. The Sale will result in all creditors
being paid in full on their allowed claims.
A copy of the Disclosure Statement is available at:
http://bankrupt.com/misc/lakepleasant.DS.pdf
About Lake Pleasant
Phoenix, Arizona-based Lake Pleasant Group, LLP, was formed for
the purpose of purchasing and developing 244 acres of real
property located near State Route 74 and Old Lake Pleasant Road in
Peoria, Arizona. The partnership filed for Chapter 11 bankruptcy
protection (Bankr. D. Ariz. Case No. 11-10170) on April 13, 2011.
In its schedules, Lake Pleasant Group disclosed assets of
$15,780,263 and liabilities of $10,301,552 as of the Petition
Date.
Affiliate DLGC II, LLC, simultaneously filed for Chapter 11
protection (Bankr. D. Ariz. Case No. 11-10174). DLGC owns 210
acres of real property located near State Route 74 and Old Lake
Pleasant Road in Peoria, Arizona. DLGC also owns interests in
Lake Pleasant Water Company and Lake Pleasant Sewer Company. DLGC
has valued these interests at $1,313,511 in its schedules. Mark
W. Roth, Esq., and Wesley D. Ray, Esq., at Polsinelli Shughart PC,
in Phoenix, Ariz., represent the Debtors as counsel. Earl Curley
& Lagarde PC serves as special zoning counsel; and Morrill &
Aronson, P.L.C. as special counsel for DLGC with respect to
certain condemnation litigation brought by the Arizona Department
of Transportation, which is pending in the Maricopa County
Superior Court as case number CV2010-015022.
LAS VEGAS RAILWAY: Gilbert Lamphere Elected to Board
----------------------------------------------------
Gilbert H. Lamphere was elected to the Board of Directors and
elected Chairman of the Board of Directors of Las Vegas Railway
Express, Inc.
About Las Vegas Railway
Las Vegas, Nev.-based Las Vegas Railway Express, Inc., formerly
Liberty Capital Asset Management, Inc. was formed March 9, 2007,
as Corporate Outfitters, a development stage company. On Nov. 3,
2008, with a share exchange, asset purchase agreement the Company
acquired Liberty Capital Asset Management, a Nevada corporation,
formed in July of 2008 as a holding company for all the assets of
CD Banc LLC in contemplation of the company going public via a
reverse merger into a publicly trading corporation.
CD Banc LLC was formed in 2003 as a Nevada limited liability
corporation with the purpose of acquiring real estate assets and
holding them for long-term appreciation.
The Company acquired Las Vegas Railway Express (LVRE) in
January 2010 and began its operations as the primary business of
the Company. The Company subsequently changed its name from Las
Vegas Railway Express, to Las Vegas Railway Express, Inc., and is
traded under the symbol XTRN.OB.
The Company's balance sheet at June 30, 2011, showed $894,758 in
total assets, $1.89 million in total liabilities and a $997,404
total stockholders' deficit.
As reported by the TCR on June 28, 2011, Hamilton, PC, in Denver,
Colorado, expressed substantial doubt about the Company's ability
to continue as a going concern following the 2010 results. The
independent auditors noted that the Company suffered recurring
losses from operations.
LE-NATURE'S INC: Ex-Chief Executive Officer Sentenced to 20 Years
-----------------------------------------------------------------
Carla Main at Bloomberg News reports that former Le-Nature's Inc.
Chief Executive Officer Gregory J. Podlucky was sentenced to 20
years in prison for fraud, tax evasion and money-laundering
related to the 2006 collapse of the bottled-water company.
According to the report, Mr. Podlucky was the mastermind behind a
scheme that cost lenders, shareholders and others $684.5 million,
Assistant U.S. Attorney James Y. Garrett said in court papers
filed. Some of the money was used to buy gems, watches and toy
trains, which investigators found in a secret room at the
company's Latrobe, Pennsylvania, bottling plant, according to
court records.
About Le-Nature's Inc.
Headquartered in Latrobe, Pennsylvania, Le-Nature's Inc. --
http://www.le-natures.com/-- makes bottled waters, teas, juices
and nutritional drinks. Its brands include Kettle Brewed Ice
Teas, Dazzler fruit juice drinks and lemonade, and AquaAde
vitamin-enriched water.
Four unsecured creditors of Le-Nature's filed an involuntary
Chapter 7 petition against the Company (Bankr. W.D. Pa. Case No.
06-25454) on Nov. 1, 2006. On Nov. 6, 2006, two of Le-Nature's
subsidiaries, Le-Nature's Holdings Inc., and Tea Systems
International Inc., filed voluntary petitions for relief under
Chapter 11 of the Bankruptcy Code. Judge McCullough converted Le
Nature's Inc.'s case to a Chapter 11 proceeding. The Debtors'
cases are jointly administered. The Debtors' schedules filed with
the Court showed $40 million in total assets and $450 million in
total liabilities.
Douglas Anthony Campbell, Esq., Ronald B. Roteman, Esq., and
Stanley Edward Levine, Esq., at Campbell & Levine, LLC, represent
the Debtors in their restructuring efforts. The Court appointed
R. Todd Neilson as Chapter 11 Trustee. Dean Z. Ziehl, Esq.,
Richard M. Pachulski, Esq., Stan Goldich, Esq., Ilan D. Scharf,
Esq., and Debra Grassgreen, Esq., at Pachulski, Stang, Ziehl,
Young, Jones & Weintraub LLP, represent the Chapter 11 Trustee.
David K. Rudov, Esq., at Rudov & Stein, and S. Jason Teele, Esq.,
and Thomas A. Pitta, Esq., at Lowenstein Sandler PC, represent the
Official Committee of Unsecured Creditors. Edward S. Weisfelner,
Esq., Robert J. Stark, Esq., and Andrew Dash, Esq., at Brown
Rudnick Berlack Israels LLP, and James G. McLean, Esq., at Manion
McDonough & Lucas represent the Ad Hoc Committee of Secured
Lenders. Thomas Moers Mayer, Esq., and Matthew J. Williams, Esq.
at Kramer Levin Naftalis & Frankel LLP, represent the Ad Hoc
Committee of Senior Subordinated Noteholders.
In July 2008, the Chapter 11 plan of liquidation for Le-Nature's
took effect.
LEVELLAND/HOCKLEY: Taps Houlihan Lokey as Financial Advisor
-----------------------------------------------------------
Levelland/Hockley County Ethanol LLC asks the bankruptcy court for
authority to employ Houlihan Lokey Howard & Zukin Capital, Inc.,
as financial advisor.
As financial advisor, Houlihan Lokey will be assisting the Debtor,
among others:
(a) in the development and distribution of selected
information, documents and other materials, including, if
appropriate, advising the Company in the preparation of an
offering memorandum;
(b) in evaluating indications of interest and proposals
regarding any Transaction(s) (as defined in the Agreement)
from current and/or potential lenders, equity investors,
acquirers and/or strategic partners; and
(c) with the negotiation of any Transaction(s), including
participating in negotiations with creditors and other
parties involved in any Transaction(s).
The Debtor will pay Houlihan Lokey according to this structure:
a. Restructuring Transaction Fee. In the case of an in-court
Restructuring Transaction, a cash "Restructuring
Transaction Fee" of $750,000 to be paid at closing. If all
or any portion of the Senior Lenders receive over 50% of
the Company's equity as a result of or following the
Restructuring Transaction, Houlihan Lokey will instead be
paid a Restructuring Transaction Fee of $375,000.
b. Sale Transaction Fee. Upon the closing of a Sale
Transaction, a "Sale Transaction Fee" paid from the gross
proceeds of such Sale Transaction, as a cost of the Sale
Transaction, in cash based upon Aggregate Gross
Consideration, calculated as:
ARC up to $35.0 million: $750,000, plus
ARC in excess of $35.0 million: 5% of such incremental
AGC.
c. Upon the closing of each Financing Transaction, paid from
gross proceeds of such Financing Transaction, as a cost, a
cash "Financing Transaction Fee" equal to: (I) 2% of the
gross proceeds of any indebtedness raised or committed that
is senior to other indebtedness of the Debtor, secured by a
first priority lien and unsubordinated, with respect to
both lien priority and payment, to any other obligations of
the Debtor provided that the proceeds are sufficient to pay
all obligations owed to the Senior Lenders in full and are
so paid to the Senior Lenders at the closing of the
Financing Transaction; (II) 4% of the gross proceeds of any
indebtedness raised or committed that is secured by a lien
(other than a first lien), is unsecured and/or is
subordinated; and (III) 6% of the gross proceeds of all
equity or equity-linked securities (including, without
limitation, convertible securities and preferred stock)
placed or committed. However, the aggregate Financing
Transaction Fee payable is limited to (i) $750,000 in the
event that all obligations owed to the Senior Lenders are
not paid in full at the closing of such Financing
Transactions or (ii) $375,000 if all or any portion of the
Senior Lenders receive over 50% of the Company's equity as
a result of, in connection with, or following the Financing
Transactions.
Adam Dunayer, a managing director of Houlihan Lokey, assures the
Court that his firm is a "disinterested person" as term is defined
in Section 101(14) of the Bankruptcy Code.
The Application will be heard on Oct. 27, 2011 at 1:30 p.m.
About Levelland/Hockley
Levelland/Hockley County Ethanol LLC is a Texas limited liability
company that owns and operates a 40 million gallon per annum
Ethanol production plant located in Levelland, Hockley county,
Texas. The LLC has over 100 members many of whom are local
farmers, business people and civic leaders. A recent appraisal
Of its facility values its assets, with the Plant under full
operation, at over $51.5 million.
Levelland Ethanol filed for Chapter 11 bankruptcy (Bankr. N.D.
Tex. Case No. 11-50162) on April 27, 2011. I. Richard Levy, Esq.,
Christopher M. McNeill, Esq., and Susan Frierott, Esq., at Block &
Garden, LLP, in Dallas, represent the Debtor as counsel. The
Debtor disclosed total assets of $60,451,124 and total liabilities
of $47,557,432 in its schedules.
On May 9, 2011, William T. Neary, U.S. Trustee for Region 6,
appointed unsecured creditors to the Official Committee of
Unsecured Creditors in the Debtor's cases. Stephen M. Pezanosky,
Esq., and Mark Elmore, Esq., at Haynes and Boone, LLP, in Fort
Worth, Tex., represent the Committee.
LUND'S HARDWARE: To Sell Property, Starts Liquidation Sale
----------------------------------------------------------
Debbie Griffin at the River Falls Journal reports that owner-
operators of Lund's Hardware, Fred and Yvonne Benson, began
winding down the business with a liquidation sale that started on
Oct. 20. It runs through Nov. 26 and offers all merchandise in
the store at a discount of 35% - 50%.
According to the report, the longtime Lund's holds the sale in
preparation for the sale of its property to Minnesota-based
grocery company Nash Finch. Mr. Benson said the business would be
'handing over the keys' on Dec. 1, 2011, the report notes.
Lund's Hardware is a family owned store that has been in business
for over one hundred years.
LYDIAN SF: Taps MacDonald & Associates as Bankruptcy Counsel
------------------------------------------------------------
Lydian SF Holdings LLC sought and obtained authority from the
court to employ Macdonald & Associates as counsel under a general
retainer.
The Debtor's obligation to pay fees and costs is subject to the
Guidelines for Compensation and Expense Reimbursement of
Professionals and Trustees, promulgated by the United States
Bankruptcy Court for the Northern District of California and
payment of such fees and costs are subject to prior court
approval.
The Debtor asserted that Macdonald & Associates is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code.
Macdonald & Associates can be reached at:
IAIN A. MACDONALD
Macdonald & Associates
221 Sansome Street, Third Floor
San Francisco, CA 94104
About Lydian and First Street Holdings
Lydian SF Holdings LLC and First Street Holdings NV LLC, in
Oakland, California, filed separate Chapter 11 petitions (Bankr.
N.D. Calif. Case Nos. 11-49301 and 11-49300) on Aug. 30, 2011.
Judge Roger L. Efremsky presides over the First Street case while
Judge Edward D. Jellen oversees the Lydian case. Iain A.
Macdonald, Esq., at MacDonald and Associates, serves as the
Debtors' counsel.
Both Lydian and First Street estimated $50 million to $100 million
in assets and $10 million to $50 million in debts. The petitions
were signed by Graham Seel, SVP of CMR Capital, LLC,
manager.
LYDIAN SF: Seeks to Employ Philip Keith as Litigation Counsel
-------------------------------------------------------------
Lydian SF Holdings LLC asks the bankruptcy court for authority to
employ Philip Keith as litigation counsel.
The Debtor says that it requires experienced counsel to prosecute
claims and counterclaims against MS Mission Holdings LLC, and its
predecessor in interest, CapitalSource Finance LLC. The Debtor
will allege claims or counterclaims based upon breach of contract
by CapSource with respect to the authorization to the Debtor to
obtain junior financing and grant a security interest junior to
CapSouce's lien, and CapSource's refusal to allow the junior
financing to proceed under the agreed terms. The Debtor will
asserts claims or counterclaims based upon fraud for intentional
misrepresentation and fraudulent concealment of material facts by
CapSource of its intent not to allow the Debtor to obtain
secondary financing despite CapSource's representations to the
contrary. These representations and concealments were made to
induce the Debtor to reply on them and the Debtor did so rely.
The promises to allow secondary financing were made without any
intent to perform by CapSource. The Debtor obtained secondary
financing commitments from third parties which were made
unavailable due to CapSource's refusal to timely consent to
secondary financing. Additional claims or counterclaims based
upon equitable estoppel; promissory estoppel; estopped by conduct;
and equitable subordination of MS Mission Holdings' claim may be
asserted.
The Debtor's obligation to pay fees and costs is subject to the
Guidelines for Compensation and Expense Reimbursement of
Professionals and Trustees, promulgated by the United States
Bankruptcy Court for the Northern District of California and
payment of such fees and costs are subject to prior court
approval.
The Debtor asserts that Mr. Keith is a "disinterested person" as
the term is defined in Section 101(14) of the Bankruptcy Code.
About Lydian and First Street Holdings
Lydian SF Holdings LLC and First Street Holdings NV LLC, in
Oakland, California, filed separate Chapter 11 petitions (Bankr.
N.D. Calif. Case Nos. 11-49301 and 11-49300) on Aug. 30, 2011.
Judge Roger L. Efremsky presides over the First Street case while
Judge Edward D. Jellen oversees the Lydian case. Iain A.
Macdonald, Esq., at MacDonald and Associates, serves as the
Debtors' counsel.
Both Lydian and First Street estimated $50 million to $100 million
in assets and $10 million to $50 million in debts. The petitions
were signed by Graham Seel, SVP of CMR Capital, LLC, manager.
LYMAN LUMBER: Mid-America Can Hire McGuire as Real Estate Broker
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Minnesota has
granted Mid-America Cedar, Inc., an affiliate of Lyman Lumber
Company, permission to employ Percival McGuire Commercial Real
Estate Brokerage, LLC, as its real estate broker with respect to
the sale of certain real property located at 3700 Smith Farm Road,
Stallings, in North Carolina.
The Court is satisfied that McGuire is a "disinterested person" as
that term is defined in Section 101(14) of the Bankruptcy Code,
and that McGuire neither holds nor represents an interest adverse
to the Debtors' estates.
Upon the close of the sale of the Property, the Debtor will be
authorized to immediately pay in full McGuire's commission of up
to 8 percent of the Purchase Price, in the amount of $76,000, as
set forth in the Listing Agreement, and no further application for
fees will be made by McGuire.
A copy of the Listing Agreement is available for free at:
http://bankrupt.com/misc/lymanlumber.mcguirelistingagreement.pdf
About Lyman Lumber
Lyman Lumber Company sells building supplies, such as framing
beams, roofing materials, siding and drywall to residential
builders. The 113-year old company and several affiliates sought
Chapter 11 petition (Bankr. D. Minn. Lead Case No. 11-45190) on
Aug. 4, 2011. Judge Dennis O'Brien presides over the cases.
Lyman Lumber estimated $50 million to $100 million in assets and
$100 million to $500 million in debts. The petition was signed by
James E. Hurd, president and chief executive officer.
The affiliates that filed for Chapter 11 are: Lyman Holding
Company; Automated Building Components, Inc.; Building Material
Wholesalers; Carpentry Contractors Corp.; Construction Mortgage
Investors Co.; Lyman Development Co.; Lyman Lumber of Wisconsin,
Inc.; Lyman properties LLC; Mid-America Cedar, Inc.; Woodinville
Lumber, Inc.; and Woodinville Construction Services LLC.
Cynthia A. Moyer, Esq., Douglas W. Kassebaum, Esq., James L.
Baillie, Esq., and Sarah M. Gibbs, Esq., at Fredrikson &
Bryon, P.A., serve as bankruptcy counsel. BGA Management, LLC
d/b/a Alliance Management, developed and executed a sale process
and marketing strategy for the Debtors' assets.
The Official Committee of Unsecured Creditors of Lyman Lumber
Company tapped Fafinsky, Mark & Johnson, P.A., as its counsel.
Alliance Management is the financial and turnaround consultant.
When they filed for bankruptcy, the Debtors had in hand a term
sheet with SP Asset Management, LLC, a unit of Steel Partners
Holdings L.P., to serve as stalking horse bidder for the assets of
the Debtors. New York City-based Steel Partners is a diversified
holding company that owns and operates businesses in a variety of
industries.
LYMAN LUMBER: Can Employ Deloitte to Provide Fixed Fee Services
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Minnesota has
granted Lyman Lumber Company, et al., permission to employ
Deloitte Consulting LLP with the assistance of its affiliate
Deloitte Tax LLP to prepare Internal Revenue Service Form 5500
filings for the Debtors and schedules thereto and to assist the
Debtors to update their retirement plan documents in connection
with termination of the plans.
The Court finds that the firms do not hold or represent an
interest adverse to the estates and that they are disinterested
within the meaning of 11 U.S.C. Section 327(a).
The Debtors may pay Deloitte Consulting $6,650 upon completion of
the Fixed Fee Services without further order of this Court.
For the Additional Consulting Services, Deloitte's professionals
will charge hourly rates ranging from $100 to $425.
About Lyman Lumber
Lyman Lumber Company sells building supplies, such as framing
beams, roofing materials, siding and drywall to residential
builders. The 113-year old company and several affiliates sought
Chapter 11 petition (Bankr. D. Minn. Lead Case No. 11-45190) on
Aug. 4, 2011. Judge Dennis O'Brien presides over the cases.
Lyman Lumber estimated $50 million to $100 million in assets and
$100 million to $500 million in debts. The petition was signed by
James E. Hurd, president and chief executive officer.
The affiliates that filed for Chapter 11 are: Lyman Holding
Company; Automated Building Components, Inc.; Building Material
Wholesalers; Carpentry Contractors Corp.; Construction Mortgage
Investors Co.; Lyman Development Co.; Lyman Lumber of Wisconsin,
Inc.; Lyman properties LLC; Mid-America Cedar, Inc.; Woodinville
Lumber, Inc.; and Woodinville Construction Services LLC.
Cynthia A. Moyer, Esq., Douglas W. Kassebaum, Esq., James L.
Baillie, Esq., and Sarah M. Gibbs, Esq., at Fredrikson &
Bryon, P.A., serve as bankruptcy counsel. BGA Management, LLC
d/b/a Alliance Management, developed and executed a sale process
and marketing strategy for the Debtors' assets.
The Official Committee of Unsecured Creditors of Lyman Lumber
Company tapped Fafinsky, Mark & Johnson, P.A., as its counsel.
Alliance Management is the financial and turnaround consultant.
When they filed for bankruptcy, the Debtors had in hand a term
sheet with SP Asset Management, LLC, a unit of Steel Partners
Holdings L.P., to serve as stalking horse bidder for the assets of
the Debtors. New York City-based Steel Partners is a diversified
holding company that owns and operates businesses in a variety of
industries.
LYONDELLBASELL INDUSTRIES: Moody's Reviews 'Ba2' CFR for Upgrade
----------------------------------------------------------------
Moody's Investors Service placed the Corporate Family Rating (CFR)
rating of LyondellBasell Industries N.V. (LYB) and the debt
ratings of Lyondell Chemical Company under review for upgrade
following its commencement of a tender offer and consent
solicitation for roughly $2.8 billion in existing debt. LYB will
repurchase the debt with existing cash balances. The company is
seeking to remove the security from its existing debt and obtain
less restrictive covenants under both indentures. Lyondell has
also stated that it will seek to fund a special dividend to its
existing shareholders of up to $2.6 billion.
Ratings placed under review for possible upgrade:
LyondellBasell Industries N.V. (Guarantor of the rated debt)
-- Corporate Family Rating at Ba2
-- Probability of Default Rating at Ba2
Lyondell Chemical Company
-- Guaranteed Senior Secured 1st lien term loan at Ba1(LGD
3/35%)
-- Guaranteed Senior Secured 1st lien notes at Ba1(LGD 3/35%)
-- Guaranteed Senior Secured 3rd lien notes at Ba3(LGD 4/66%)
RATINGS RATIONALE
The review will focus on the amount of debt that will ultimately
be repaid under the tender offer and consent solicitation, the
ultimate size of the special dividend and amount of debt that may
be issued to fund it. The reduction in debt and the move to a
largely unsecured balance sheet are credit positives and should
offset the size of the potential dividend and the continuing large
share ownership by affiliates of Apollo Management and their
presence on the Board of Directors, which includes the Chairman's
position. Moody's noted that the ratings on the 8% senior secured
first lien notes due 2017 may actually decline due to the loss of
security and their ranking in the capital structure if the consent
solicitation is successful.
In order for Lyondell to remove the security and modify the
covenants in the indenture existing debt holders of the US and
Euro 8% senior secured first lien notes due 2017 must tender, or
provide consent for the changes to the indenture, for over $1.47
billion (66.7%) of the $2.2 billion of notes outstanding. For the
11% senior secured third lien notes due 2018, only $1.32 billion
(41%) of the $2.64 billion of debt must be either tendered or LYB
must receive consent for changes to the indenture. The threshold
to change the 2018 indenture is less than 50% due to Apollo's
ownership of over $600 million of the notes.
The principal methodologies used in rating LyondellBasell was
Global Chemical Industry Methodology published in December 2009.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
LyondellBasell Industries N.V. is one of the world's largest
independent petrochemicals companies. LYB is a leading
manufacturer of olefins, polyolefins, propylene oxide and related
derivatives; it also has a large global licensing and catalyst
business (primarily related to polyolefins production
technologies). LYB also has two refineries with a total capacity
of over 370 thousand barrels per day.
LYONDELLBASELL INDUSTRIES: S&P Puts 'BB-' CCR on Watch Positive
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB-' corporate
credit rating on LyondellBasell Industries N.V. on CreditWatch
with positive implications.
"We are placing the corporate credit rating on CreditWatch with
positive implications because the company has indicated that it
will reduce debt using a substantial portion of the large cash
balance it has accumulated since emerging from bankruptcy," said
Standard & Poor's credit analyst Cynthia Werneth. LyondellBasell
announced that it plans to use cash on hand to fund its tender
offer for up to about $2.8 billion of its existing debt. It also
expects to use cash and proceeds from a new debt financing to pay
a special dividend of up to $2.6 billion. If the tender offer is
successful, it will result in the release of certain collateral
securing the rated debt.
Standard & Poor's also placed its 'BB+' rating on LyondellBasell
subsidiary Lyondell Chemical Co.'s 8% first-lien U.S. dollar and
euro senior secured notes due 2017 on CreditWatch with negative
implications. The CreditWatch placement indicates that, depending
on the ultimate corporate credit rating and recovery prospects for
these notes, the ratings could be either affirmed or lowered.
At the same time, Standard & Poor's placed its 'BB-' rating on
Lyondell Chemical's 11% third-lien senior secured notes due 2018
on CreditWatch with positive implications. This CreditWatch
placement indicates that the ratings could be affirmed or raised
depending on the ultimate corporate credit rating and recovery
prospects for these notes in the new capital structure.
"We expect to resolve the CreditWatch during the next few weeks,"
Ms. Werneth said. "We plan to review management's business
strategies and financial policies and assess how the company is
likely to perform during the next few years. In addition, we
expect to evaluate recent changes in ownership and corporate
governance."
LyondellBasell, incorporated in the Netherlands with
administrative offices in Houston and Rotterdam, is a leading
global petrochemical producer, with 2010 sales of more than $40
billion. The majority of its products are cyclical commodities
such as ethylene, propylene, and their derivatives, including
various plastic resins used to manufacture a wide variety of
durable goods and consumer products.
MACROSOLVE INC: Sells $275,000 Debentures & 2.1MM Shares Warrants
-----------------------------------------------------------------
MacroSolve, Inc., on Oct. 20, 2011, entered into a subscription
agreement with six accredited investors, providing for the sale by
the Company to the Investors of an aggregate of (i) convertible
debentures in the aggregate principal amount of $275,000 and (ii)
Series B warrants to purchase 2,050,459 shares of common stock of
the Company.
The Debentures accrue interest at an annual rate of 12%, which
will be paid quarterly exclusively from the Debenture Account.
Principal on the Debentures will be paid quarterly, on a pro rata
basis with all Debentures, as the Debenture Account permits, but
only after all accrued interest has been paid. The Debenture
Account is a bank account established with a financial institution
for the deposit of 25% of any funds the Company receives from any
judgment or settlement in any patent infringement cases involving
United States Patent Number 7,822,816.
The Debentures may be converted into shares of Common Stock at the
option of the holder. Upon conversion, the holder will be
entitled to receive the number of shares of Common Stock that
equal to 200% of the amount of the Debentures, together with
accrued and unpaid interest, being converted, divided by the
conversion price, which is the weighted average price for the
five-day trading period before the notice of conversion, provided,
however, that the Conversion Price will not be less than $0.10 per
share at any time. Any Debentures that are outstanding on the
maturity date that have not been repaid from the Debenture Account
will be repaid by the issuance of shares of Common Stock at the
conversion price.
The Warrants are exercisable until Dec. 31, 2016, at an exercise
price of the weighted average price for the five-day trading
period before the notice of exercise, provided, however, that the
exercise price will not be less than $0.10 per share at any time.
The Warrants are also exercisable on a cashless basis at any time.
About MacroSolve, Inc.
Tulsa, Okla.-based MacroSolve, Inc. (OTC BB: MCVE)
-- http://www.macrosolve.com/-- is a technology and services
company that develops mobile solutions for businesses and
government. A mobile solution is typically the combination of
mobile handheld devices, wireless connectivity, and software that
streamlines business operations resulting in improved efficiencies
and cost savings.
The Company's balance sheet at June 30, 2011, showed $1.86 million
in total assets, $2.48 million in total liabilities, and a
$612,657 total stockholders' deficit.
As reported in the Troubled Company Reporter on April 7, 2010,
Hood Sutton Robinson & Freeman CPAs, P.C., expressed substantial
doubt about the Company's ability to continue as a going concern,
following its 2009 results. The independent auditors noted of the
Company's recurring losses from operations and net capital
deficiency.
MAQ MANAGEMENT: To Provide FCB Accounting of Cash Collateral Use
----------------------------------------------------------------
The Hon. Erik P. Kimball of the U.S. Bankruptcy Court for the
Southern District of Florida directed MAQ Management, Inc., et
al., to:
i) comply with the Court's order conditionally granting
creditor 1st National Bank of South Florida's motion to
prohibit use cash collateral and Wauchula Bank's Ore Tenus
motion to segregate cash collateral;
ii) provide Florida Community Bank, N.A. with an accounting of
FCB's cash collateral held in any account;
iii) provide FCB with copies of the agreements referenced in the
cash collateral order;
iv) provide FCB with a budget for use of FCB's cash collateral;
and
v) provide evidence that the Debtors are not utilizing FCB's
cash collateral in violation of the cash collateral order.
FCB formerly known as Premier American Bank, N.A., as successor-
in-interest to Peninsula Bank, has a security interest in certain
deposits, rents, profits, revenues, proceeds, etc., arising from
the Debtors' property, which serves as FCB's cash collateral.
In its amended motion, FCB related that on Aug. 4, 2011, the Court
entered the cash collateral order. The cash collateral order
provided, in part, as:
1. Each of the Debtors is prohibited, nunc pro tunc to the
Petition Date, from the use of cash collateral of any secured
lender until an order is entered by the Court, pursuant to motion
or agreement.
2. The Debtors will segregate all cash collateral into separate
Debtor-in- Possession Accounts; one for each creditor that has
rents included as part of their collateral.
3. The Debtors will provide the CC Creditors with copies of all
current written agreements, whether formal or informal, and any
amendments, between any of the Debtors and any vendor; equipment
or vehicle lessor or lender; supplier; tenant; or provider of
services with respect to any of the CC Creditors' collateral; and
will furthermore provide accurate budgets, set forth by property.
The Court denied FCB's original motion for cash collateral order
compliance as moot.
Florida Community is represented by:
Jordi Guso, Esq.
Deborah B. Talenfeld, Esq.
BERGER SINGERMAN
200 South Biscayne Boulevard, Suite 1000
Miami, FL 33131
Tel: (305) 755-9500
Fax: (305) 714-4340
E-mails: jguso@bergersingerman.com
dtalenfeld@bergersingerman.com
About MAQ Management
Based in Boca Raton, Florida, MAQ Management, Inc., and three
other affiliates serve as commercial landlords to convenience
stores and gas stations in primarily in South Florida. They filed
for Chapter 11 bankruptcy (Bankr. S.D. Fla. Cases No. 11-26571 to
11-26574) on June 15, 2011. Affiliates that sought Chapter 11
protection are Super Stop Petroleum, Inc., Super Stop Petroleum I,
Inc., and Super Stop Petroleum IV, Inc. Judge Erik P. Kimball
presides over the case. MAQ Management estimated assets and
debts of $1 million to $10 million. Super Stop estimated assets
and debts of $10 million to $50 million. The petitions were
signed by Mahammad A. Qureshi, CEO.
Richard J. McIntyre, Esq., and Chirstopher C. Todd, Esq., at
McIntyre, Panzarella, Thanasides, Hoffman, Bringgold & Todd, P.L.,
in Tampa, Florida, serve the Debtors as substitute counsel.
The U.S. Trustee announced that until further notice, it will not
appoint a committee of creditors for the Debtors' cases.
stores and gas stations in primarily in South Florida. They filed
for Chapter 11 bankruptcy (Bankr. S.D. Fla. Cases No. 11-26571 to
11-26574) on June 15, 2011. Affiliates that sought Chapter 11
protection are Super Stop Petroleum, Inc., Super Stop Petroleum I,
Inc., and Super Stop Petroleum IV, Inc. Judge Erik P. Kimball
presides over the case. Lawyers at Talarchyk Merrill, LLC, serve
as the Debtors' counsel. MAQ Management estimated assets and
debts of $1 million to $10 million. Super Stop estimated assets
and debts of $10 million to $50 million. The petitions were
signed by Mahammad A. Qureshi, CEO.
The U.S. Trustee announced that until further notice, it will not
appoint a committee of creditors for the Debtors' cases.
MARCO POLO: Judge Nixes Lenders' Bid to Sink Ch. 11 Case
--------------------------------------------------------
Hilary Russ at Bankruptcy Law360 reports that a New York federal
bankruptcy judge on Friday shot down an attempt by the Royal Bank
of Scotland and Credit Agricole SA to get Marco Polo Seatrade BV's
Chapter 11 case thrown out of court in the U.S.
About Marco Polo
Marco Polo Seatrade B.V. operates an international commercial
vessel management company that specializes in providing commercial
and technical vessel management services to third parties.
Founded in 2005, the Company mainly operates under the name of
Seaarland Shipping Management and maintains corporate Headquarters
in Amsterdam, the Netherlands. The primary assets consist of six
tankers that are regularly employed in international trade, and
call upon ports worldwide.
Marco Polo and three affiliated entities filed for Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 11-13634) on July 29,
2011. The other affiliates are Seaarland Shipping Management
B.V.; Magellano Marine C.V.; and Cargoship Maritime B.V.
Marco Polo is the sole owner of Seaarland, which in turn is the
sole owner of Cargoship, and also holds a 5% stake in Magellano.
The remaining 95% stake in Magellano is owned by Amsterdam-based
Poule B.V., while another Amsterdam company, Falm International
Holding B.V. is the sole owner of Marco Polo. Falm and Poule
didn't file bankruptcy petitions.
The filings were prompted after lender Credit Agricole Corporate
& Investment Bank seized one ship on July 21, 2011, and was on
the cusp of seizing two more on July 29. The arrest of the
vessel was authorized by the U.K. Admiralty Court. Credit
Agricole also attached a bank account with almost US$1.8 million
on July 29. The Chapter 11 filing precluded the seizure of the
two other vessels.
Evan D. Flaschen, Esq., Robert G. Burns, Esq., and Andrew J.
Schoulder, Esq., at Bracewell & Giuliani LLP, serve as bankruptcy
counsel. The cases are before Judge James M. Peck.
The petition said assets and debt are both more than
US$100 million and less than US$500 million.
MASSACHUSETTS ELEPHANT: Taps Hilco for Consultancy Services
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts
authorized Massachusetts Elephant & Castle Group Inc. and its
debtor-affiliates to employ Hilco Real Estate LLC.
The firm will provide services in connection with the
restructuring of the Debtors' unexpired real property leases and
other real estate related matters. The Debtors believe that the
engagement of the firm will lead to a restructuring of certain of
the Debtors' leases, which will ultimately make the Debtors'
businesses more valuable.
The firm will receive a fee equal to $2,500 plus the aggregate
lease savings realized by such restructuring multiplied by 6.5%.
The Debtors assured the Court that the firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
About Massachusetts Elephant & Castle Group
Boston-based Massachusetts Elephant & Castle Group and its
affiliates operates 21 British-style restaurant pubs
in the U.S. and Canada. The chain, with 10 locations in the U.S.,
generated revenue of $47.5 million in 2010, throwing off
$3.9 million of earnings before interest, taxes, depreciation,
amortization, and foreign exchange gains or losses.
Elephant & Castle filed for Chapter 11 protection (Bankr. D. Mass.
Lead Case No. 11-16155) on June 28, 2011. Bankruptcy Judge Henry
J. Boroff presides over the case. Repechage Investments'
estimated assets and debts at $10 million to $50 million. Other
Debtors' estimated assets and debts at $0 to $10 million.
Eckert Seamans Chein & Mellott, LLC, represent the Debtors as
counsel and BellMark Partners, LLC as financial advisor. Epiq
Bankruptcy Solutions, LLC as claims, noticing and balloting agent.
FTI Consulting, Inc., is the Official Committee of Unsecured
Creditors' financial advisors. Goulston & Storrs, P.C., is the
Committee's counsel.
MCCLATCHY CO: Reports $9.4 Million Third Quarter Net Income
-----------------------------------------------------------
The McClatchy Company reported net income of $9.40 million on
$300.22 million of net revenues for the three months ended
Sept. 25, 2011, compared with net income of $11.92 million on
$327.71 million of net revenues for the three months ended
Sept. 26, 2010.
The Company also reported net income of $12.38 million on $918.20
million of net revenues for the nine months ended Sept. 25, 2011,
compared with net income of $21.40 million on $1 billion of net
revenues for the nine months ended Sept. 26, 2010.
Commenting on McClatchy's third quarter results, Gary Pruitt,
chairman and chief executive officer, said, "Advertising revenues
were down 10.0% in the third quarter of 2011, in line with the
trend so far this year. We saw some improvement in revenue trends
late in the quarter: advertising revenue was down 10.4% in July,
10.8% in August and 8.7% in September."
A full-text copy of the press release announcing the financial
results is available for free at http://is.gd/74EXiD
About The McClatchy Company
Sacramento, Calif.-based The McClatchy Company (NYSE: MNI)
-- http://www.mcclatchy.com/-- is the third largest newspaper
company in the United States, publishing 30 daily newspapers, 43
non-dailies, and direct marketing and direct mail operations.
McClatchy also operates leading local websites in each of its
markets which extend its audience reach. The websites offer users
comprehensive news and information, advertising, e-commerce and
other services. Together with its newspapers and direct marketing
products, these interactive operations make McClatchy the leading
local media company in each of its premium high growth markets.
McClatchy-owned newspapers include The Miami Herald, The
Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City
Star, The Charlotte Observer, and The News & Observer (Raleigh).
The Company's balance sheet at June 30, 2011, showed $3.05 billion
in total assets, $2.85 billion in total liabilities, current and
non-current, and $203.47 million in total stockholders' equity.
* * *
In February 2010, Moody's Investors Service upgraded The McClatchy
Company's Corporate Family Rating to Caa1 from Caa2, Probability
of Default Rating to Caa1 from Caa2, and senior unsecured and
unguaranteed note ratings to Caa2 from Caa3, concluding the review
for upgrade initiated on January 27, 2010. The upgrades reflect
McClatchy's improved liquidity position and reduced near-term
default risk following completion of the company's refinancing,
and its ability to stabilize EBITDA performance through
significant cost reductions. The rating outlook is stable.
In the May 12, 2011, edition of the TCR, Standard & Poor's Ratings
Services lowered its corporate credit rating on Sacramento,
Calif.-based The McClatchy Co. to 'B-' from 'B'. "The downgrade
reflects our expectation that continued declines in advertising
revenues will outweigh the company's cost reduction measures,
resulting in steadily rising debt leverage over the intermediate
term despite some modest debt reduction that will likely occur
over the near term," said Standard & Poor's credit analyst Harold
Diamond. The 'B-' corporate credit rating on Sacramento, Calif.-
based McClatchy reflects Standard & Poor's expectation that
advertising revenues will decline at a high-single-digit% rate in
2011, and EBITDA will fall at a mid-double-digit pace.
As reported by the Troubled Company Reporter on Feb. 8, 2011,
Fitch Ratings has upgraded the Issuer Default Rating of the
McClatchy Company to 'B-'. The Rating Outlook is Stable. The
revenue declines endured by McClatchy in 2010 were materially
lower than Fitch's expectation. Fitch had modeled declines in the
mid-teens versus actual declines in the mid-single digits. While
Fitch expected the company to focus on cost containment, the
company's success exceeded Fitch expectations. Fitch had expected
EBITDA to decline more than 10% versus actual EBITDA growth in the
mid-single digits. As a result absolute debt and leverage were
better than Fitch expectations. Fitch estimates 2010 year end
gross unadjusted leverage of approximately 4.7 times. Fitch
expects the company will be able to meet its pension funding
obligations and satisfy all of its maturities up to and including
its senior unsecured notes due in 2014 ($169 million balance as of
Sept. 30, 2010). Also, Fitch does not expect McClatchy will have
any issues meeting its credit agreement financial covenants (under
both Fitch's base and stress cases).
MERIDIAN HEALTHCARE: Calif. App. Ct. Affirms Jurisdiction Ruling
----------------------------------------------------------------
Midcoast Care, Inc., appeals from an order quashing service of
summons on Scott Hilinski, Chisholm Partners, IV, LP; Fleet Equity
Partners VI, LP; and Kennedy Plaza Partners II, LLC, for lack of
personal jurisdiction. Respondents are not residents of
California. Midcoast contends that California has jurisdiction
over them because Mr. Hilinski engaged in wrongful conduct aimed
at California residents, and did so on behalf of the other
respondents. Alternatively, it contends that the court erred in
denying its request to conduct jurisdictional discovery.
In an Oct. 19, 2011 decision, available at http://is.gd/3YorKu
from Leagle.com, the Court of Appeals of California, Second
District, Division Six, held that Midcoast has not presented
competent evidence establishing that Mr. Hilinski was a primary
participant in a wrongdoing that was intentionally directed at a
California resident, and that the court did not err when it denied
Midcoast's untimely and nonspecific request to conduct discovery.
The appeals court affirmed.
In 1999, Chisholm Partners, IV, LP; Fleet Equity Partners VI, LP;
and Kennedy Plaza Partners II, LLC -- the Funds -- invested in a
California-based healthcare management company, Meridian
Healthcare Management, Inc. Meridian was in the business of
managing the finances and insurance contracts of medical
providers. Meridian's customers included Midcoast.
Scott Hilinski is a managing director of the Funds' administrator,
Nautic Partners, LLC. He served on Meridian's board of directors
as a designee of one of the Funds, and, at another time, served as
a designated observer of Meridian's board. Mr. Hilinski declares
he had no involvement in the day-to-day management of Meridian.
Midcoast disputes this.
In 2003, Meridian lost a major customer, Pacificare. Afterward,
Meridian struggled financially. Its CFO, Brian Sato, later
admitted that from 2004 to 2005 he transferred about $9 million in
unauthorized and unearned "fees" from Meridian's customer
accounts, including Midcoast's accounts, to cover Meridian's cash
shortfalls (the advanced fees scheme). According to Midcoast, the
misappropriated money included about $2 million from its account.
In 2005, a company named "e4e" bought all of Meridian's shares for
about $6.2 million. The purchase price did not reflect the true
financial condition of Meridian. Meridian's CFO, Mr. Sato, and its
CEO, Michael Alper, had prepared false financial statements in
connection with the sale.
Shortly after the e4e purchase, Mr. Sato's transfers were
discovered. Meridian terminated Messrs. Sato and Alper. In 2006,
Meridian stopped doing business and filed for Chapter 11
reorganization (Bankr. C.D. Calif. Case No. 06-10733). The
bankruptcy was later converted to liquidation under Chapter 7.
Midcoast now seeks to recover from Meridian's officers, directors,
and investors, including the Funds and Hilinski, the money that
Mr. Sato transferred from Midcoast's account. Midcoast's action
was preceded by actions in other courts by other Meridian
customers and creditors in which there have been orders finding
that California has no personal jurisdiction over the Funds or Mr.
Hilinski and finding that evidence upon which Midcoast now relies
was inadmissible. Midcoast was not a party to those proceedings.
The case is MIDCOAST CARE, INC., Plaintiff and Appellant, v.
CHISHOLM PARTNERS et al., Defendants and Respondents, 2d Civil No.
B228269 (Calif. App. Ct.).
Midcoast is represented by:
THE LAW OFFICES OF WILLIAM A. OKERBLOM
1414 S Miller St
Santa Maria, CA 93454
Tel: 805-928-8881
Chisholm Partners, IV, LP; Fleet Equity Partners VI, LP; and
Kennedy Plaza Partners II, LLC, are represented by:
Joshua Briones, Esq.
Ana Tagvoryan, Esq.
Mark A. Nadeau, Esq.
DLA Piper (US)
2000 Avenue of the Stars, Suite 400 North Tower
Los Angeles, CA 90067-4704
Tel: 310-595-3076
Fax: 310-595-3376
E-mail: joshua.briones@dlapiper.com
ana.tagvoryan@dlapiper.com
mark.nadeau@dlapiper.com
Scott Hilinski is represented by:
John K. Rubiner, Esq.
BIRD, MARELLA, BOXER, WOLPERT, NESSIM,
DROOKS & LINCENBERG
1875 Century Park East, 23rd Floor
Los Angeles, CA 90067-2561
Tel: 310-201-2100
E-mail: jkr@birdmarella.com
- and -
Jonathan L. Kotlier, Esq.
Sarah P. Kelly, Esq.
NUTTER MCLENNEN & FISH
Seaport West
155 Seaport Boulevard
Boston, MA 02210
Tel: 617-439-2683
Fax: 617-310-9683
E-mail: jkotlier@nutter.com
skelly@nutter.com
Francisco J. Silva, Long X. Do, Lisa Matsubara, appeared for
Amicus Curiae California Medical Association.
METALDYNE LLC: S&P Affirms 'B+' Corporate Credit Rating
--------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on Plymouth, Mich.-based automotive supplier
Metaldyne LLC. "At the same time, we affirmed our 'B+' issue-level
rating on its $375 million senior secured term loan due
2017. The outlook is stable," S&P related
"The ratings reflect what we consider Metaldyne's weak business
risk profile and aggressive financial risk profile," said Standard
& Poor's credit analyst Nishit Madlani. "Our business risk
assessment incorporates the multiple industry risks facing
automotive suppliers, including volatile demand, high fixed costs,
intense competition, and severe pricing pressures. These risks
more than offset the favorable fact that Metaldyne's products are
used mostly in vehicle powertrains and therefore have longer
lives, are less commodity-like than many other automotive parts,
and support the company's double-digit EBITDA margins. The
financial risk assessment reflects our view that low free
operating cash flow (FOCF) and, in the long term, possible
future additional distributions to shareholders will likely limit
significant debt reduction," S&P said.
MICHAEL H. CLEMENT: Appeals Court Rules in Alegre Dispute
---------------------------------------------------------
Michael H. Clement and his wholly owned corporation, Michael H.
Clement Corporation, appeal from a judgment of the Contra Costa
County Superior Court in favor of Frank C. Alegre, Sr.,
individually, and Frank C. Alegre, Sr. and Helen C. Alegre as
Trustees of the Frank C. Alegre and Helen C. Alegre Revocable
Trust on the plaintiffs' action against Alegre for specific
performance of an alleged agreement for Alegre to resell certain
real property -- the Wilbur property -- to the plaintiffs, for
rescission of MHCC's previous sale of the property to Alegre, and
for declaratory relief. The plaintiffs also appeal the trial
court's order holding Clement liable individually for its award of
attorney fees and costs to Alegre.
The trial court granted Alegre's motion for judgment after the
plaintiffs' presentation of its case, finding that the plaintiffs
had failed to introduce admissible evidence that they were "ready,
willing, and able" to purchase the property. It granted the
motion for judgment after excluding the plaintiffs' evidence of
conditional approval of two loans to MHCC from Sonoma National
Bank. The two loan commitments were for a $650,000 loan directly
from the bank and a $520,000 loan to be paid by a Small Business
Association debenture loan guarantee.
The court sustained defense objections and excluded the evidence
on the ground that plaintiffs' refusal to provide discovery to
Alegre that would allow Alegre to cross-examine the loan
facilitator and the bank witness regarding the financial
information they received from plaintiffs upon which the loan
commitment was based, was fundamentally unfair to Alegre and
denied him due process of law.
The Plaintiffs contend that the court committed prejudicial error
in excluding evidence of the loan commitment. They further
contend that the court erred in holding Clement individually
liable for attorney fees and costs, notwithstanding his assignment
of his interest in the lawsuit to MHCC, a corporation in Chapter
11 in the bankruptcy court.
In an Oct. 18, 2011 decision, available at http://is.gd/L2hllT
from Leagle.com, the Court of Appeals of California, First
District, Division Two, affirmed the lower court's ruling. The
case is MICHAEL H. CLEMENT et al., Plaintiffs and Appellants, v.
FRANK C. ALEGRE, Sr., et al., Defendants and Respondents, No.
A125953 (Calif. App. Ct.).
Based in Antioch, California, Michael H. Clement Corporation
sought chapter 11 protection (Bankr. N.D. Calif. Case No.
09-43502) on Apr. 28, 2009. James A. Tiemstra, Esq., in Oakland,
Calif., represents the Debtor. At the time of the filing, the
Debtor estimated its assets at more than $1 million and its debts
at less than $1 million.
MMRGLOBAL INC: Unregistered Sale of Stock Exceeds 5% Threshold
--------------------------------------------------------------
MMRGlobal, Inc., is required to file a Form 8-K to report
particular information related to unregistered sales of the
Company's Common Stock, if the aggregate number of those shares
sold since the filing of the Company's last periodic report is
equal to or greater than 5% of the outstanding Common Stock.
On Oct. 17, 2011, the aggregate number of shares of Common Stock
sold in unregistered transactions by the Company exceeded the 5%
threshold.
On Sept. 26, 2011, the Company granted 93,484 shares of Common
Stock to a vendor at a price of $0.06 per share for services
rendered in the amount of $5,609.
On Sept. 27, 2011, and Oct. 17, 2011, the Company entered into two
Convertible Promissory Notes with two unrelated third-parties for
a principal amount of $392,000 and warrants to purchase 1,276,000
shares of the Company's Common Stock. The Convertible Promissory
Notes mature on March 31, 2012, and April, 30, 2012, and the
Company may, at its own discretion, extend the maturity date for
an additional six months. The Notes bear interest of 12% per
annum payable in cash or shares of common stock or a combination
of cash and shares of common stock.
On Oct. 3, 2011, the Company granted 183,312 shares of Common
Stock to a third-party note holder for quarterly interest payment
in the amount of $6,049.
On Oct. 6, 2011, the Company granted 394,286 shares of common
stock to a third-party who exercised options at a price of $0.105
per share in exchange for a reduction in accounts payable of
$41,400.
On Oct. 6, 2011, the Company granted 37,217 shares of common stock
to a vendor at a price of $0.06 per share in exchange for a
reduction in accounts payable of $2,233.
On Oct. 12, 2011, the Company granted a third-party a warrant to
purchase 166,667 shares of Common Stock at a price of $0.06 per
share in exchange for services in the amount of $10,000. The
warrant vests equally over two years.
On Oct. 19, 2011, the Company granted Michael Finely a Warrant to
purchase 1,050,000 shares of Common Stock at a price of $0.06 per
share in connection with his appointment to the Company's Board of
Directors. The Warrant vests equally over three years and expires
five years after the issuance date.
About MMRGlobal
Los Angeles, Calif.-based MMR Global, Inc. (OTC BB: MMRF)
-- http://www.mmrglobal.com/-- through its wholly-owned operating
subsidiary, MyMedicalRecords, Inc., provides secure and easy-to-
use online Personal Health Records (PHRs) and electronic safe
deposit box storage solutions, serving consumers, healthcare
professionals, employers, insurance companies, financial
institutions, and professional organizations and affinity groups.
As reported by the TCR on April 7, 2011, Rose, Snyder & Jacobs, in
Encino, Calif., expressed substantial doubt about MMRGlobal's
ability to continue as a going concern. The independent auditors
noted that the Company has incurred significant operating losses
and negative cash flows from operations during the year ended Dec.
31, 2010, and 2009.
The Company reported a net loss of $17.9 million on $972,988 of
revenues for 2010, compared with a net loss of $10.3 million on
$619,249 of revenues for 2009.
The Company's balance sheet at June 30, 2011, showed $2.24 million
in total assets, $6.27 million in total liabilities and a $4.02
million total stockholders' deficit.
MOHEGAN TRIBAL: Files September Games Statistical Report
--------------------------------------------------------
The Mohegan Tribal Gaming Authority, on Oct. 21, 2011, posted on
its Web site its Table Games Statistical Report for Mohegan Sun at
Pocono Downs containing statistics relating to gross table games
revenues, table games tax and weighted average number of table
games. The Table Games Statistical Report includes these
statistics on a monthly basis for the fiscal years ended Sept. 30,
2011, and 2010. A copy of the Table Games Statistical Report is
available for free at http://is.gd/fbiTmR
About Mohegan Tribal
Headquartered in Uncasville, Conn., Mohegan Tribal Gaming
Authority conducts and regulates gaming activities on Tribal
lands, which are federally recognized Indian tribe reservations in
southeastern Connecticut.
The Authority has noted that its Bank Credit Facility matures on
March 9, 2012 and its 2002 Senior Subordinated Notes mature on
April 1, 2012. In addition, a substantial portion of the
Authority's remaining indebtedness matures over the following
three fiscal years. The Authority believes that it will need to
refinance all or part of its indebtedness at or prior to each
maturity thereof in order to maintain sufficient resources for its
operations. The Authority has engaged Blackstone Advisory
Partners, L.P. to assist in its strategic planning relating to its
debt maturities.
The Company's balance sheet at June 30, 2011, showed $2.17 billion
in total assets, $1.99 billion in total liabilities, and
$176.04 million in total capital.
* * *
At the end of November 2010, Moody's Investors Service downgraded
Mohegan Tribal Gaming Authority's Corporate Family and Probability
of Default ratings to Caa2 from B3. All of MTGA's rated long-term
debt was also lowered. The rating outlook is negative.
The ratings downgrade reflects Moody's view that MTGA could
find it difficult to refinance significant upcoming debt
maturities without some impairment to bondholders given its high
leverage -- debt/EBITDA is over 7 times -- limited near-term
growth prospects for Mohegan Sun Casino, the likely continuation
of weak consumer gaming demand trends in the Northeastern U.S.,
and the strong possibility of gaming in Massachusetts. The
company's $675 million revolver ($527 million outstanding at
Sept. 30, 2010) expires in March 2012 and its $250 million 8%
senior subordinated notes mature in April 2012. Combined, these
debt items account for about 50% of MTGA's total debt outstanding.
MTGA has announced that it hired Blackstone Group to help deal
with its capital structure issues, although no details have been
made available regarding MTGA's options. Given the company's
recently announced weak fiscal fourth quarter results along with
the significant near- and long-term challenges previously
mentioned, Moody's believes a restructuring that involves some
impairment to bondholders will be considered.
The negative ratings outlook reflects the relatively short time
frame in which MTGA has to address what Moody's believes to be a
significant capital structure issue. If MTGA is not able to
refinance by March 2011 its $675 million revolver will be become
current. The same holds true for the company's $250 million 8%
senior subordinated notes to the extent these notes are not
refinanced by April 1, 2011.
MSR RESORT: Donald Trump Gets Contract to Buy Doral Golf
--------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Donald Trump has a contract to buy the Doral Golf
Resort and Spa in Miami for $170 million.
The report relates that the Doral is one of five resorts that
Paulson & Co. and Winthrop Realty Trust took over from Morgan
Stanley's CNL Hotels & Resorts Inc. in January through
foreclosure.
According to the report, in a wrinkle on the usual procedure for
selling properties in Chapter 11, Paulson and Winthrop won't have
the bankruptcy court in New York set up auction and sale
procedures until Mr. Trump waives the right to terminate or his
so-called due diligence review period ends on Nov. 28.
Mr. Rochelle also notes there is a second atypical provision in
the Trump contract, which calls for termination of the management
arrangement with an affiliate of Marriott International Inc. If
it turns out that ending the Marriott arrangement results in a
"material detrimental financial effect on the net proceeds of the
sale," the owner can cancel the Trump deal by paying Mr. Trump as
much as $3.7 million in fees and expenses.
If Mr. Trump is outbid at auction, he would receive a $6.8 million
breakup fee, assuming the bankruptcy judge approves.
According to the report, court papers say that the owners won't
schedule a hearing to approve auction and sale procedures until
Trump's time for canceling the contract ends. He has the right to
back out for any reason or no reason while he conducts due
diligence by examining the property and financial records.
Paulson and Winthrop previously said that the price offered by
Trump implies a value for all the resorts "significantly"
exceeding the $1.5 billion in debt. After the Doral sale, the
remaining resorts would be the Grand Wailea Resort Hotel and Spa
in Hawaii; the La Quinta Resort and Club and the PGA West golf
course in La Quinta, California; the Arizona Biltmore Resort and
Spa in Phoenix; and the Claremont Resort & Spa in Berkeley,
California.
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
bankruptcy 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, 2011. 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.
MSR RESORT: Seeks to Sell Doral Golf to Trump for $170 Million
--------------------------------------------------------------
Samuel Howard at Bankruptcy Law360 reports that Paulson & Co.-
owned MSR Resort Golf Course LLC on Tuesday asked for a bankruptcy
court's permission to sell the iconic Doral Golf Resort & Spa in
Miami to celebrity real estate mogul Donald Trump for $170
million, unless a superior offer surfaces at auction.
According to Law360, the debtor sought a New York bankruptcy
judge's blessing for the sales process that would hand Trump the
keys to the celebrated 692-room resort and four of its five golf
courses for $170 million, and enable MSR to focus on exiting
Chapter 11.
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
bankruptcy 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, 2011. 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.
NAKNEK ELECTRIC: Plan Outline Hearing Scheduled for Dec. 1
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Alaska will convene
a hearing on Dec. 1, 2011, at 9:30 a.m., to consider adequacy of
the Disclosure Statement explaining NakNek Electric Association,
Inc.'s Plan of Reorganization.
As reported in the Troubled Company Reporter on Sept. 29, 2011,
the Plan proposed that the Debtor will pay Class 13, unsecured
creditors, $3 million over 60 months commencing on the Effective
Date. Based on the current claims filed in the case, the proposed
payment will pay unsecured creditors a dividend of about $0.10 on
each dollar of claim.
The Debtor will amend the Plan if prior to confirmation, the U.S.
Department of Energy permits the Debtor to utilize grants funds
dedicated to the Debtor's geothermal project to drill a side-track
well to confirm with the Debtor's geothermal resource.
The Debtor will sell the drill rig, geothermal inventory and
equipment and pay first allowed secured claims having liens
against the equipment and inventory.
The Debtor believes it can make payments under the Plan with
minimal increases in utility rates.
A full-text copy of the Disclosure Statement is available for free
at http://ResearchArchives.com/t/s?770a
About Naknek Electric Association
Naknek, Alaska-based Naknek Electric Association, Inc., operates a
diesel power generation plant, storage and distribution system
on approximately 9.34 acres of land it owns in Naknek, Alaska.
It provides electricity to 591 members of the cooperative. It
also is developing a geothermal well.
Naknek Electric filed for Chapter 11 bankruptcy protection (Bankr.
D. Alaska Case No. 10-00824) on Sept. 29, 2010. Erik LeRoy,
Esq., at Erik Leroy P.C., assists the Debtor in its restructuring
effort. The Debtor estimated its assets and debts at $10 million
to $50 million as of the Petition Date.
NEBRASKA BOOK: Given Less Exclusivity Than Requested
----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Nebraska Book Co. received an enlargement of the
exclusive right to propose a Chapter 11 plan, although not so much
as the company sought given opposition from second-lien lenders.
Mr. Rochelle relates that unable to land $250 million in outside
financing to support confirmation of the plan worked out in
advance of bankruptcy, Nebraska Book asked for four more months of
so-called exclusivity.
Characterizing the case as neither "unusually large" nor
"complex," the second-lien lenders objected to a four-month
extension of the exclusive right to file a plan. The judge
compromised, giving a three-month extension until Jan. 23.
The plan in limbo would pay off first- and second-lien debt in
full, while giving most of the new equity to subordinated
noteholders of the operating company and holders of notes issued
by the holding company.
The confirmation hearing for approval of the plan was set for
Oct. 24. The company previously said there is a "substantial
possibility" of further delay.
About Nebraska Book
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.
NEW ENGLAND: Submits Compliance Plan to NYSE Amex
-------------------------------------------------
New England Realty Associates Limited Partnership disclosed that
on October 4, 2011 the Partnership submitted a compliance plan to
the NYSE Amex LLC setting forth its plan for regaining compliance
with the continued listing standards of the NYSE Amex as set forth
in Part 10 of the NYSE Amex Company Guide. On September 9, 2011,
the Partnership received a notification letter from the Corporate
Compliance Department of the NYSE Amex indicating that as of
June 30, 2011 the Partnership is not in compliance with the
minimum stockholders' equity requirement for continued listing of
the Partnership's Depositary Receipts on the NYSE Amex.
Specifically, the Partnership is not in compliance with Section
1003(a)(i) of the Company Guide since it reported stockholders'
equity of less than $2,000,000 at June 30, 2011 and has incurred
losses from continuing operations and/or net losses in two out of
its three most recent fiscal years ended December 31, 2010.
The Compliance Plan is now subject to review by the Corporate
Compliance Department of the NYSE Amex and the Partnership expects
to receive a determination from the Compliance Department by the
end of the current fiscal quarter. If the Corporate Compliance
Department of the NYSE Amex determines that the Compliance Plan
does not reasonably demonstrate the Partnership's ability to
regain compliance with Section 1003(a)(i) of the Company Guide, or
if the Partnership otherwise fails to make progress consistent
with the Compliance Plan, then the Corporate Compliance Department
of the NYSE Amex will provide written notice that the
Partnership's Depositary Receipts are subject to delisting from
the NYSE Amex. At that time, the Partnership will be permitted to
appeal the determination of the Corporate Compliance Department to
a Listing Qualifications Panel.
NEW ERA: Court Appoints Lowell Cage as Chapter 11 Trustee
---------------------------------------------------------
The Hon. Karen K. Brown of the U.S. Bankruptcy Court for the
Southern District of Texas appointed Lowell T. Cage as Chapter 11
trustee to oversee the bankruptcy case of New Era Hospitality LLC
The judge made the appointment at at the behest of Judy Robins,
the U.S. Trustee for Region 7.
Houston, Texas-based New Era Hospitality Inc. filed for Chapter 11
bankruptcy protection (Bankr. S.D. Tex. Case No. 11-36492) on
July 30, 2011, to avoid foreclosure of its hotel property at 801
St. Joseph Parkway. Money woes stalled its hotel construction
plans. Judge Karen K. Brown presides over the case. Samuel L.
Milledge, Esq., Milledge Law Firm, P.C., represents the Debtor.
The Debtor disclosed $14,000,000 in assets, and $4,213,828 in
debts.
NEWLAND INTERNATIONAL: Moody's Cuts Sr. Secured Rating to 'Caa3'
----------------------------------------------------------------
Moody's Investors Service downgraded Newland International
Properties, Corp.'s senior secured rating to Caa3 from B3 and
placed the rating under review for further downgrade.
This rating was downgraded and placed under review for further
downgrade:
Newland International Properties, Corp.
-- senior secured debt rating to Caa3 from B3
RATINGS RATIONALE
This rating action follows the announcement on October 19th that
Newland plans to present a restructuring plan for its $220 million
secured bond to its note-holders in the coming weeks as a result
of insufficient funds available to make its first scheduled
principal payment on November 15th of $31.4 million. The company
has hired Gapstone as its financial advisor and is currently
working on a proposal to investors that would avoid a default
under the bond indenture. Nevertheless, should the company execute
a restructuring, the transaction would constitute a distressed
exchange under Moody's definition of default. Moody's includes
distressed exchanges in its definition of default in order to
capture credit events whereby issuers effectively fail to meet
their debt service obligations, but yet do not actually file for
bankruptcy or miss an interest or principal payment. Please refer
Moody's Special Comment, "Distressed Exchanges: Implications for
Probability of Default Ratings, Corporate Family Ratings and Debt
Instrument Ratings" published in March of 2009.
In its review Moody's will examine the details of the expected
debt restructuring plan as well as analyze the overall recovery
for bondholders once the restructuring plan is consummated.
Newland's current liquidity position is weak, as the company has
limited sources of additional capital other than collections,
which have been difficult to execute. Should the company not
adequately address its liquidity constraints, or the contemplated
debt restructuring plan results in higher loss severity for
bondholders than the loss reflected in the Caa3 rating, the
ratings will be downgraded further.
Moody's last rating action with respect to Newland was on July 5,
2011, when Moody's downgraded Newland's rating to B3 from B2 and
maintained the negative outlook.
Newland's rating was assigned by evaluating factors we believe are
relevant to the credit profile of the issuer, such as i) the
business risk and competitive position of the company versus
others within its industry, ii) the capital structure and
financial risk of the company, iii) the projected performance of
the company over the near to intermediate term, and iv)
management's track record and tolerance for risk. These attributes
were compared against issuers both within and outside of Newland's
core industry and the company's ratings are believed to be
comparable to those of other issuers of similar credit risk.
Newland International Properties Corp. is a sociedad an¢nima
organized under the laws of the Republic of Panama. Newland is a
real estate development company established to develop the "Trump
Ocean Club International Hotel & Tower" in Panama City, Panama.
Trump Ocean Club is being developed as a multi-use luxury tower,
overlooking the Pacific Ocean, with luxury condominium residences,
a hotel condominium, a limited number of offices, and premier
leisure amenities. Trump Ocean Club will be located on the Punta
Pacifica Peninsula in Panama City, on approximately 2.8 acres
(11,200 square meters) of land, including approximately 295 lineal
feet (90 lineal meters) of oceanfront.
NEWPAGE CORP: Committee Taps Alvarez & Marsal as Financial Advisor
------------------------------------------------------------------
BankruptcyData.com reports that NewPage's official committee of
unsecured creditors filed with the U.S. Bankruptcy Court motions
to retain Alvarez & Marsal North America (Contact: Jeffery J.
Stegenga) as financial advisor for a monthly fee of $75,000 and a
completion fee of $500,000 and Moelis & Company (Contact: Robert
Flachs) as investment banker for a monthly fee of $125,000 and a
$2 million restructuring fee.
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.
Attorneys at Young Conaway Stargatt & Taylor, LLP, and Paul,
Hastings, Janofsky & Walker LLP, represent the Official Committee
of Unsecured Creditors.
Bill Rochelle, the bankruptcy columnist for Bloomberg News, said
that NewPage Corp. prevailed over most objections from the
official creditors' committee and won agreement from the
bankruptcy judge on final approval for $600 million in secured
financing.
Moody's Investors Service assigned a Ba2 rating to the
$350 million first-out revolving debtor-in-possession credit
facility and a B2 rating to the $250 million second-out debtor-in-
possession term loan, collectively, the "DIP facilities", of
NewPage Corporation.
NO FEAR: Court Okays Gibson Dunn as Committee's Conflicts Counsel
-----------------------------------------------------------------
The Hon. Margaret M. Mann of the U.S. Bankruptcy Court for the
Southern District of California authorized the Official Committee
of Unsecured Creditors appointed in the bankruptcy case of Simo
Holdings, Inc., to retain Gibson Dunn & Crutcher LLP as its
special conflicts counsel, nunc pro tunc to August 29, 2011.
According to the Troubled Company Reporter on Oct. 21, 2011,
Simo Holdings, Inc., No Fear Retail Stores, Inc. and No Fear MX,
Inc.'s sales of their intellectual property and certain related
assets to Brands Holdings Limited and of their inventory and other
retail operations related assets, excluding intellectual property,
to Ryderz Compound, Inc., closed in late July. From the sale
proceeds, the Debtors' postpetition DIP financing secured lender
and their prepetition secured lender have been paid in full and
the secured lenders have executed claim releases. Since closings
of the BHL and Ryderz sale transactions, the Debtors and the NFRS
creditors' committee and the SHI Committee have, in consultation
with each other, moved forward with the further administration of
the cases and have begun the development and preparation of a
Chapter 11 plan of liquidation and related disclosure statement.
The Debtors, the NFRS Committee, and the SHI Committee, as "Plan
Proponents," intended to expeditiously pursue confirmation of the
Plan that will distribute the net proceeds of the sales to
creditors pursuant to the priorities set forth in the Bankruptcy
Code. In connection with these efforts, the Plan Proponents have
collectively had initial discussions on how to address areas of
potential conflict among each of the Debtors' estates while
minimizing overall professional costs related to exiting Chapter
11. These issues include, for example, whether the plan should
provide for the substantive consolidation for the Debtors' assets
and liabilities and whether prepetition transfers of intellectual
property by SHI to NFRS should be avoided as constructively
fraudulent.
With respect to the Substantive Consolidation Issues and the
Fraudulent Transfer Issues, (a) SulmeyerKupetz PC will represent
the interests of the NFMX estate; and (b) Pachulski Stang Ziehl &
Jones LLP will represent the interests of the NFRS estate.
The financial analysis necessary to address these issues will
be performed jointly by BDO Consulting, currently financial
advisors to the NFRS Committee and the SHI Committee, and Avant
Advisory Services, currently the Chief Restructuring Officer for
all of the Debtors.
SulmeyerKupetz, Pachulski Stang, and Gibson Dunn, with input from
BDO and Avant, will prepare a joint memorandum which sets forth
agreed facts, disputed facts and a summary of the legal arguments
relating to each of these issues as well as a recommendation as to
a potential resolution of the issues and the rationale in
support of the resolution. The Joint Memorandum will be provided
to the NFRS Committee, the SHI Committee, the Official Committee
of Unsecured Creditors of NFMX, and the Debtors' Board of
Directors.
Accordingly, the SHI Committee said, Gibson Dunn's employment as
its special conflicts counsel to represent it in these matters is
necessary and appropriate.
As special conflicts counsel to the SHI Committee, Gibson Dunn
will:
(1) advise the SHI Committee and negotiate on its behalf in
connection with the Plan, the Joint Memorandum, the
Substantive Consolidation Issues, and the Fraudulent
Transfer Issues;
(2) participate in the drafting of the Joint Memorandum and
Plan on behalf of the SHI Committee;
(3) representing the SHI Committee at hearings and other
proceedings in connection with the Plan, the Joint
Memorandum, the Substantive Consolidation Issues, and the
Fraudulent Transfer Issues; and
(4) if requested by the SHI Committee and in Gibson Dunn's
discretion, performing other legal services for and on
behalf of the SHI Committee as special conflicts counsel
to assist the SHI Committee in satisfying its duties under
Section 1103 of the Bankruptcy Code where either a
potential or actual conflict precludes representation by
general counsel for the SHI Committee.
In exchange for its services, Gibson Dunn will be paid based on
its customary hourly rates. The specific hourly rates for the
attorneys that are anticipated to represent the SHI Committee as
special conflicts counsel are:
Attorney 2011 Billable Rate
-------- ------------------
Craig Millet $895
Kenneth Glowacki $675
Doug Levin $430
The firm will also be reimbursed for expenses incurred in
connection with its limited representation.
Craig Millet, Esq., a partner at Gibson Dunn, assured the Court
that his firm and its attorneys are "disinterested" persons as
that term is defined under Section 101(14) of the Bankruptcy
Code.
Tiffany L. Carroll, the Acting U.S. Trustee for Region 15 has no
objection to the proposed retention.
About No Fear Retail
Carlsbad, California-based No Fear Retail Stores, Inc., is a
retailer of action, sports, and casual youth lifestyle apparel and
accessories, targeting young adults and teens. It operates 41
retail locations in California, Oregon, Arizona, Florida, Nevada,
North Carolina, and Texas.
No Fear filed for Chapter 11 bankruptcy protection (Bankr. S.D.
Calif. Case No. 11-02896) on Feb. 24, 2011. David S. Kupetz,
Esq., at Sulmeyer, Kupetz, A Professional Corp, serves as the
Debtor's bankruptcy counsel. The Debtor tapped Jones Day as
special intellectual property counsel; Avant Advisory Group's
George Blanco as chief restructuring officer, and Venturi &
Company LLC, as financial advisors.
The Debtor estimated disclosed $31,648,063 in assets and
$12,552,985 in liabilities as of the Chapter 11 filing.
Affiliates No Fear MX, Inc. (Bankr. S.D. Calif. Case No. 11-02897)
and Simo Holdings, Inc. (Bankr. S.D. Calif. Case No. 11-02898)
filed separate Chapter 11 petitions on Feb. 24, 2011.
Tiffany L. Carroll, the Acting U.S. Trustee for Region 15,
appointed three creditors to serve on an Official Committee of
Unsecured Creditors of No Fear MX, Inc. Pachulski Stang
Ziehl & Jones LLP represents the Committee. BDO USA LLP serves as
financial advisor to provide financial advisory services to the
Committee.
NO FEAR: Taps Lapidus & Lapidus as Special Litigation Counsel
-------------------------------------------------------------
No Fear Retail Stores Inc. and No Fear MX Inc. ask the U.S.
Bankruptcy Court for the Southern District of California for
permission to employ Lapidus & Lapidus as special litigation
counsel.
The firm agrees to render professional services to the Debtors
regarding preparing, commencing, and prosecuting adversary
proceedings.
The firm says it will seek payment of interim compensation in an
amount 80% of the fees sough and 100% of the expenses incurred
during the prior month. Daniel Lapidus, Esq., attorney at the
firm charges $395 for this engagement.
The Debtors assure the Court that the firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
About No Fear Retail
Carlsbad, California-based No Fear Retail Stores, Inc., is a
retailer of action, sports, and casual youth lifestyle apparel and
accessories, targeting young adults and teens. It operates 41
retail locations in California, Oregon, Arizona, Florida, Nevada,
North Carolina, and Texas.
No Fear filed for Chapter 11 bankruptcy protection (Bankr. S.D.
Calif. Case No. 11-02896) on Feb. 24, 2011. David S. Kupetz,
Esq., at Sulmeyer, Kupetz, A Professional Corp, serves as the
Debtor's bankruptcy counsel. The Debtor tapped Jones Day as
special intellectual property counsel; Avant Advisory Group's
George Blanco as chief restructuring officer, and Venturi &
Company LLC, as financial advisors.
The Debtor estimated disclosed $31,648,063 in assets and
$12,552,985 in liabilities as of the Chapter 11 filing.
Affiliates No Fear MX, Inc. (Bankr. S.D. Calif. Case No. 11-02897)
and Simo Holdings, Inc. (Bankr. S.D. Calif. Case No. 11-02898)
filed separate Chapter 11 petitions on Feb. 24, 2011.
Tiffany L. Carroll, the Acting U.S. Trustee for Region 15,
appointed three creditors to serve on an Official Committee of
Unsecured Creditors of No Fear MX, Inc. Pachulski Stang
Ziehl & Jones LLP represents the Committee. BDO USA LLP serves as
financial advisor to provide financial advisory services to the
Committee.
OMEGA NAVIGATION: Has Access to Cash Collateral Until Dec. 12
-------------------------------------------------------------
Omega Navigation Enterprises Inc. disclosed that, in connection
with its Chapter 11 proceedings in Houston, Texas, the Court has
granted the continuing use of cash collateral through Dec. 12,
2011. This relief, which was entered on a consensual basis with
Omega's senior and junior lenders and the creditors' committee,
includes:
-- The right to continue to operate and pay all operating
expenses in the ordinary course
-- The right to continue to pay employees and crew in the
ordinary course
-- The right to continue all cash management procedures in the
ordinary course
-- The right to continue to maintain all insurance in the
ordinary course
The management team continues to operate the business in the
ordinary course. Omega will continue to honor all of its charter
obligations during the pendency of the court protection. Omega
believes the Chapter 11 reorganization process will help the
Company facilitate a restructuring of its balance sheet and is
working towards exiting Chapter 11 as a financially stronger
entity that will be positioned to enjoy future growth based on the
strength of its existing modern fleet of product tanker vessels.
About Omega Navigation
Athens, Greece-based Omega Navigation Enterprises Inc. and
affiliates, owner and operator of tankers carrying refined
petroleum products, filed for Chapter 11 protection (Bankr. S.D.
Tex. Lead Case No. 11-35926) on July 8, 2011, in Houston.
Omega is an international provider of marine transportation
services focusing on seaborne transportation of refined petroleum
products. The Debtors disclosed assets of US$527.6 million and
debt totaling US$359.5 million. Together, the Debtors wholly own
a fleet of eight high-specification product tankers, with each
vessel owned by a separate debtor entity.
Judge Karen K. Brown presides over the case. Bracewell &
Giuliani LLP serves as counsel to the Debtors. Jefferies &
Company, Inc., is the financial advisor and investment banker.
The Official Committee of Unsecured Creditors has tapped Winston
& Strawn as local counsel; Jager Smith as lead counsel; and First
International as financial advisor.
ONE RENAISSANCE: Court Confirms Reorganization Plan
---------------------------------------------------
Judge Randy D. Doub of the U.S. Bankruptcy Court for the Eastern
District of North Carolina confirmed the Chapter 11 Plan of
Reorganization of One Renaissance, LLC, on Sept. 26, 2011.
The Plan is confirmed under the "cramdown" provisions of Section
1129(b) of the Bankruptcy Code, subject to certain modifications,
the Court ruled.
Certain of the modifications pertain to the treatment of the claim
of Class II Creditor Wells Fargo, N.A. The allowed claim of Wells
Fargo, N.A., will be treated as a fully secured obligation of the
Debtor. The Debtor will initially make monthly interest only
payments on Wells Fargo's Claim at a rate of 5.5% per annum for a
period of 18 months. Thereafter, the Debtor will commence monthly
payments of principal and interest based on a 25-year amortization
schedule with interest fixed at 5.5% per annum. The final payment
of all unpaid amounts owing under Wells Fargo's Claim will be due
60 months from the Effective Date.
A full-text copy of the Confirmation Order is available for free
at http://bankrupt.com/misc/ONERENAISSANCE_confORD.PDF
The Debtor is required to file post-confirmation reports to
reflect any progress made in consummating the Plan during the
period covered by the report.
As reported in the June 27, 2011 edition of the Troubled Company
Reporter, under the Plan:
-- The Debtor will pay its administrative costs in full on the
Effective Date or upon other mutually acceptable terms as
the parties may agree.
-- Any and all priority taxes due and owing to the Internal
Revenue Service, North Carolina Department of Revenue, or
any county or city taxing authority will be paid in full.
-- The Debtor will treat the secured claim of Wells Fargo,
N.A., totaling, as of the Petition Date, $17,109,510, as an
impaired claim. Wells Fargo will retain its lien over the
Debtor's properties until its claim is paid in full.
-- Class III includes any credit holding an allowed, secured
lien claim pursuant to Chapter 44A of the North Carolina
General Statutes. The class is impaired. Holders of
claims in Class III will retain their liens pursuant to
Section 1129(b)(2)(A)(i)(1) of the Bankruptcy Code until
their claims are paid in full and will be treated as fully
secured.
-- The total of estimated unsecured claims is approximately
$83,163. The Debtor will pay all allowed unsecured
claims in full.
-- Renaissance Holdings, LLC, which holds a 99.9967%
membership interest in the Debtor, and Renaissance
Management, Inc., which holds a 0.0033% membership in the
Debtor, will retain their ownership interests upon
confirmation of the Plan.
Full-text copies of the Plan and Disclosure Statement dated
June 7, 2011, are available for free at:
http://ResearchArchives.com/t/s?764d
http://bankrupt.com/misc/ONERENAISSANCE_plan.pdf
About One Renaissance, LLC
Raleigh, North Carolina-based One Renaissance, LLC, a limited
liability company, filed for Chapter 11 bankruptcy protection
(Bankr. E.D. N.C. Case No. 11-01793) on March 9, 2011. Jason L.
Hendren, Esq., at Hendren & Malone, PLLC, serves as the Debtor's
bankruptcy counsel. The Debtor estimated its assets and debts at
$10 million to $50 million.
No creditors committee has been appointed in the Debtor's case.
OUTSOURCE HOLDINGS: Plan Outline Hearing Scheduled for Nov. 10
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas will
convene a hearing on Nov. 10, 2011, at 1:30 p.m., to consider
adequacy of the Disclosure Statement explaining Outsource
Holdings, Inc.'s Plan of Reorganization.
As reported in the Troubled Company Reporter on Oct. 13, 2011, the
Debtor has caused all outstanding stock of Jefferson Bank to be
merged with First Bank & Trust pursuant to an acquisition
agreement. The Plan provides for the distribution of the net
proceeds from that transaction to holders of Allowed Claims.
Under the Plan, Allowed Administrative Claims will be paid in
full. After payment of these Claims, the Debtor estimates there
will be between $1.3 million and $6.3 million in funds available
for distribution.
Creditors in Classes 1 (Allowed Claim of Keefe, Bruyette & Woods,
Inc.), 2 (Allowed Claims of 2010 Noteholders), 3 (Allowed Claims
of TRUPs Holders), and 4 (Allowed Claims of the 2009 Noteholders)
are impaired under the Plan and are eligible to vote to accept or
reject the Plan. Class 5 Claims (Allowed Equity Interests) will
not receive any distributions under the Plan. Accordingly,
holders of Allowed Equity Interests are conclusively presumed to
have rejected the Plan and are not entitled to vote to accept or
reject the Plan.
KBW will receive cash from the initial proceeds equal to $100,000.
Each holder of an Allowed Class 2 Claim will receive cash from the
initial proceeds equals to the principal portion of the claimant's
allowed Class 2 claim. The aggregate payment to be made to Class
2 Claimants pursuant to the Plan is estimated to be $200,000.
Class 3 Claims will be deemed senior to Class 4 Claims to the
extent of the agreed TRUPs Distribution. All existing Equity
Interests in the Debtor will be canceled and Class 3 Claimants
will be issued a Pro Rata Share of Equity Interests in the
Reorganized Debtor. TRUPs Holders are the statutory trust holding
notes issued by the Debtor in the approximate amount of $5
million, which has, in turn, issued trust preferred securities to
various persons.
A full-text copy of the Disclosure Statement, dated Oct. 3, is
available for free at http://ResearchArchives.com/t/s?7725
About Outsource Holdings
Lubbock, Texas-based Outsource Holdings, Inc.'s only significant
asset was its ownership of all of the outstanding capital stock of
Jefferson Bank, which is a state bank with five branch locations
in the Dallas/Fort Worth metroplex.
Outsource Holdings filed for Chapter 11 bankruptcy protection
(Bankr. N.D. Tex. Case No. 11-41938) on April 3, 2011. Jeff P.
Prostok, Esq., at Forshey & Prostok, L.L.P., in Fort Worth, Tex.,
serves as Outsource Holdings' bankruptcy counsel. The Debtor also
tapped Commerce Street Capital, LLP, as investment banker and
financial advisor, Fenimore, Kay, Harrison & Ford, LLP as special
transaction and regulatory counsel. The Debtor disclosed
$10,571,121 in assets and $13,887,431 in liabilities as of the
Chapter 11 filing.
Anthony J. Pacchia was appointed as Chapter 11 examiner in the
Debtor's case. The examiner tapped Cole, Schotz, Meisel, Forman &
Leonard, P.A., as counsel and Traxi, LLC, as financial advisors.
No creditors' committee has been appointed in the case.
OVERLAND STORAGE: Marathon Capital Discloses 13.5% Equity Stake
---------------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Marathon Capital Management, LLC, disclosed
that it beneficially owns 3,154,000 shares of common stock of
Overland Storage Inc. representing 13.5% of the shares
outstanding. As reported by the TCR on April 12, 2011, Marathon
Capital disclosed beneficial ownership of 3,007,836 shares of
common stock or 13.1%.
A full-text copy of the amended Schedule 13G is available for free
at http://is.gd/iPYP49
About Overland Storage
San Diego, Calif.-based Overland Storage, Inc. (Nasdaq: OVRL) --
http://www.overlandstorage.com/-- is a global provider of unified
data management and data protection solutions designed to enable
small and medium enterprises (SMEs), corporate departments and
small and medium businesses (SMBs) to anticipate and respond to
change.
The Company reported a net loss of $14.50 million on $70.19
million of net revenue for the fiscal year ended June 30, 2011,
compared with a net loss of $12.96 million on $77.66 million of
net revenue during the prior fiscal year.
The Company's balance sheet at June 30, 2011, showed $40.92
million in total assets, $33.79 million in total liabilities and
$7.13 million in total shareholders' equity.
Moss Adams LLP, in San Diego, California, noted that the Company's
recurring losses and negative operating cash flows raise
substantial doubt about the Company's ability to continue as a
going concern.
OXFORD INDUSTRIES: Moody's Affirms 'B1' Corporate Family Rating
---------------------------------------------------------------
Moody's Investors Service revised Oxford Industries, Inc.'s
(Oxford) outlook to positive from stable and assigned a first time
Speculative Grade Liquidity Rating of SGL-1. Concurrently, Moody's
affirmed all existing ratings including the company's B1 Corporate
Family Rating, the B1 Probability of Default Rating, and the B1
Senior Secured Notes rating.
RATINGS RATIONALE
Moody's affirmation of Oxford's B1 rating was based on the
company's modest credit metrics, its good near term liquidity, and
its breadth of distribution across multiple channels. At the same
time, the rating also incorporates Oxford's limited scale, high
reliance on the Tommy Bahama business which has retail stores
largely concentrated in the southern and western United States,
and fashion risk.
"The outlook change acknowledges Oxford's positive momentum in
earnings growth and margin improvements since its acquisition of
the higher margin Lilly Pulitzer brand" stated Moody's analyst
Mariko Semetko. The improvement in profitability has led to
stronger credit metrics. For the twelve months ended July 30,
2011, Oxford's debt/EBITDA was 2.9 times as compared to 4.1 times
a year ago. Similarly, as-reported operating margins (adjusted for
non-recurring charges) increased by over 300 basis points to about
9.4% over this period.
The positive outlook reflects Moody's expectation for sales growth
stemming from store openings and same store sales increases, and
continued very good liquidity. The outlook also assumes the
company will continue to maintain or improve profitability and
credit metrics as it anniversaries the Lilly Pulitzer acquisition.
Lilly Pulitzer has contributed to the improvement in Oxford's
credit metrics in the first half of fiscal 2011. Lilly Pulitzer is
a small niche brand and is a relatively new addition to Oxford. As
such, Moody's will continue to monitor its performance and the
integration closely. Oxford's track record of managing Tommy
Bahama and maintaining relatively conservative financial policies
balance the company's relatively short track record of managing
Lilly Pulitzer.
The Speculative Grade Liquidity rating of SGL-1 is supported by
Oxford's cash balances, revolver availability and healthy free
cash flow expected over the next twelve months. The SGL-1 further
reflects Moody's view that Oxford will maintain prudent share
repurchase and dividend policies.
Ratings Assigned:
- Speculative Grade Liquidity Rating of SGL-1
Ratings Affirmed (LGD assessment changed):
- Corporate Family Rating at B1
- Probability of Default Rating at B1
- $110 million Senior Secured Notes rating at B1 (to LGD4, 57%
from LGD4, 52%)
The rating could be upgraded if Oxford maintains debt/EBITDA below
3.5 times and continues to demonstrate solid same store sales
growth as it anniversaries the Lilly Pulitzer acquisition. Further
diversification by product category and successful execution of
geographic expansion also would be viewed positively.
Given the positive outlook, a downgrade in the near term is
unlikely. Downward rating momentum would build if the company were
to experience cost pressures or become promotional such that
margins started to fall. Ratings could be downgraded if
debt/EBITDA increases and remains above 5.0 times or interest
coverage falls and is sustained below 1.5x.
The principal methodologies used in rating Oxford Industries, Inc.
were the Global Apparel Industry Methodology published in May 2010
and the Global Retail 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.
Headquartered in Atlanta, Georgia, Oxford Industries, Inc. is a
producer and marketer of branded and private label apparel. Major
brands include Tommy Bahama, Lilly Pulitzer and Ben Sherman.
Revenues for the last twelve months through July 30, 2011 were
approximately $690 million.
PACIFIC DEVELOPMENT: Automatic Stay Lifted on Payson Commercial
---------------------------------------------------------------
The Hon. R. Kimball Mosier of the U.S. Bankruptcy Court for the
District of Utah approved a stipulation resolving motion to
enforce order approving stipulation and granting Central bank
relief from the automatic stay on Pacific Development, L.C.'s
Payson Commercial Property and Heritage Village Subdivision.
As reported in the Troubled Company Reporter on July 12, 2011,
Central Bank notified the Court that it is entitled for relief
from the automatic stay against the assets of the Debtor without
further notice or hearing. Central Bank also said that it is
authorized to pursue its remedies pursuant to the subject loan
documents and all other legal and equitable remedies against
certain parcels the real property defined in the stipulation as
Trust Property No. 2 or Payson Commercial Property and the real
property defined in the Stipulation as Trust Property No. 3 or
Heritage Village Subdivision.
Central Bank related that the Debtor is in default under the terms
of the stipulation and the order based upon the its failure to
timely sell and close on the required number of lots from the
subject real properties.
The stipulation was entered among the Debtor, secured creditor
Central Bank, and the Official Committee of Unsecured Creditors.
A full-text copy of the stipulation is available for free at:
http://bankrupt.com/misc/PACIFICEVELOPMENT_stipulation.pdf
Central Bank is represented by:
J. Scott Brown, Esq.
PARSONS KINGHORM HARRIS
A Professional Corporation
111 East Broadway, 11th Floor
Salt Lake City, UT 84111
Tel: (801) 363-4300
Fax: (801) 363-4378
About Pacific Development
Provo, Utah-based Pacific Development, L.C., is the obligor on and
owner of various real estate development loans for properties
primarily located in Payson, Salem, Springville and Harrisburg,
Utah. The Company filed for Chapter 11 protection (Bankr. D. Utah
Case No. 10-22754) on March 10, 2010. Blake D. Miller, Esq., and
James W. Anderson, Esq., at Miller Guymon, PC, in Salt Lake City,
represent the Debtor in its restructuring effort. The Debtor
estimated its assets at $10 million to $50 million and
debts at $1 million to $10 million.
David P. Billings, Esq., and J. Thomas Beckett, Esq., at Parsons,
Behle & Latimer, P.C., in Salt Lake City, represent the Official
Committee of Unsecured Creditors.
PEGASUS RURAL: BPC AS Wants Evidence of Settlement Terms Excluded
-----------------------------------------------------------------
BPC AS LLC, asks with the U.S. Bankruptcy Court for the District
of Delaware to exclude any evidence, argument or reference of
settlement negotiations in connection with The Pegasus Rural
Broadband, LLC, et al.'s response and opposition to the motion of
BPC AS to dismiss the Chapter 11 case of Xanadoo Spectrum, LLC,
and for the appointment of a Chapter 11 trustee for Xanadoo
Holdings, Inc.; Pegasus Rural Broadband, LLC, Regasus Guard Band,
LLC; and Xanadoo LLC.
BPC AS is the collateral agent for the holders of 12.5% senior
secured promissory notes and puttable warrants issued by certain
of the Debtors.
BPC AS explains that among other things:
-- the Debtors, by way of their response, impermissibly
introduce substantive terms of settlement negotiations. Far
from generalized references to the mere occurrence of the
negotiations, the Debtors offer and set forth very specific
details, including the supposed demands made by te agent (and
noteholders) to reach a compromise and resolve underlying
dispute; and
-- the letter agreement is clear in regarding the parties'
obligations on any settlement negotiations, any and all
discussion are to be kept confidential.
BPC AS is represented by:
Ricardo Palacio, Esq.
Karen B. Skomorucha, Esq.
ASHBY & GEDDES, P.A.
500 Delaware Avenue, 8th Floor
Wilmington, DE 19801
Tel: (302) 654-1888
Fax: (302) 654-2067
E-mail: rpalacio@ashby-geddes.com
kskomorucha@ashby-geddes.com
- and -
Mark Shinderman, Esq.
Haig M. Maghakian, Esq.
MILBANK, TWEED, HADLEY & McCLOY LLP
601 South Figueroa Stree, 30th Floor
Los Angeles, CA 90017-5735
Tel: (213) 892-4000
Fax: (213) 629-5063
E-mail: mshinderman@milbank.com
hmaghakian@milbank.com
About Pegasus Rural Broadband
Pegasus Rural Broadband, LLC, and its affiliates, including
Xanadoo Holdings Inc., sought Chapter 11 protection (Bankr. D.
Del. Lead Case No. 11-11772) on June 10, 2011. The Debtors are
subsidiaries of Xanadoo Company, a 4G wireless Internet provider.
Xanadoo Co. was not among the Chapter 11 filers.
The subsidiaries sought Chapter 11 protection after they were
unable to restructure $52 million in 12.5% senior secured
promissory notes that matured in May. The notes are owing to
Beach Point Capital Management LP.
Xanadoo Holdings, through Xanadoo LLC -- XLC -- offers wireless
high-speed broadband service, including digital phone services,
under the Xanadoo brand utilizing licensed frequencies in the 2.5
GHz frequency band. As of May 31, 2011, XLC served 12,000
subscribers in Texas, Oklahoma and Illinois. In the summer of
2010, the Debtors closed all of their retail stores and kiosks in
its six operating markets and severed all fulltime sales
personnel. Since the closings, the Debtors relied one key
retailer in each market to serve as local point of presence to
market customer transactions.
Judge Peter J. Walsh presides over the case. Rafael Xavier
Zahralddin-Aravena, Esq., Shelley A. Kinsella, Esq., and Jonathan
M. Stemerman, Esq., at Elliott Greenleaf, in Wilmington, Delaware,
serve as counsel to the Debtor. NHB Advisors Inc. is their
financial advisors. Epiq Systems, Inc., is the claims and notice
agent.
Xanadoo Holdings, Pegasus Guard Band and Xanadoo Spectrum each
estimated assets of $100 million to $500 million and debts of
$50 million to $100 million.
The Chapter 11 filing followed the maturity in May of almost $60
million in secured notes owing to Beach Point Capital Management
LP.
After filing for bankruptcy, the Debtors faced an effort by the
agent for secured noteholders to appoint a trustee or dismiss the
case. The agent contended that on the eve of bankruptcy, Xanadoo
created a new intermediate holding company to hinder and delay
creditors by taking over ownership of the operating companies.
The Debtors called the trustee motion a distraction that hindered
them from moving the case more quickly.
PENINSULA HOSPITAL: Ombudsman Taps Neubert Pepe as Counsel
----------------------------------------------------------
Daniel T. McMurray, the patient care ombudsman appointed in the
Chapter 11 case of Peninsula Hospital Center, asks the U.S.
Bankruptcy Court for the Eastern District of New York for
permission to employ Neubert, Pepe & Monteith P.C. as counsel.
The firm will represent the ombudsman in any proceeding or hearing
in the Court, and in any action in other courts where the rights
of the patients generally may be litigated or affected as a result
of the case.
The firm will charge $400 per hour of this engagement.
The ombudsman assures the Court that the firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
About Peninsula Hospital
Wayne S. Dodakian, Vinod Sinha, and Shannon Gerardi filed an
involuntary Chapter 11 bankruptcy protection against Peninsula
Hospital Center -- http://www.peninsulahospital.org/-- (Bankr.
E.D.N.Y. Case No. 11-47056) on Aug. 16, 2011. Judge Elizabeth S.
Stong presides over the case. Marilyn Cowhey Macron, Esq., Macron
& Cowhey, represents the petitioners.
Peninsula Hospital Center and Peninsula General Nursing Home
Corp., employed Alvarez & Marsal Healthcare Industry Group, LLC,
as financial advisors. The Hospital employed Abrams Fensterman et
al. as their attorneys. Judge Stong appointed Daniel T. McMurray
at Focus Management Group as patient care ombudsman.
Tracy Hope Davis, the United States Trustee for Region 2,
appointed five unsecured creditors to serve on the Official
Committee of Unsecured Creditors of Peninsula Hospital Center.
PETROHAWK ENERGY: Moody's Lifts Sr. Unsec. Notes Rating From B3
---------------------------------------------------------------
Moody's Investors Service upgraded the rating of PetroHawk Energy
Corporation's (PetroHawk) outstanding senior unsecured notes to
Baa3 from B3 to reflect the company's recent acquisition by BHP
Billiton (A1 stable). Simultaneously, the Corporate Family Rating
for PetroHawk was withdrawn. This action concludes the ratings
review that was initiated on July 15, 2011 when the acquisition
was announced.
RATINGS RATIONALE
The upgrade reflects a bottoms-up analysis of PetroHawk as an un-
guaranteed subsidiary of BHP Billiton. Since completion of the
acquisition, BHP Billiton has invested approximately $500 million
of equity into PetroHawk, an immediate and tangible credit-
positive event. The proceeds were used for general corporate
purposes including the repayment of all of the borrowings under
PetroHawk's $2.5 billion bank revolving credit, the size of which
was subsequently to $25 million. Moody's has always believed that
the scale of PetroHawk's operations and assets could support a
higher credit rating. But the credit rating was constrained by the
company's aggressive growth plans that were highly dependent on
external sources of funding. While rapid growth in reserves and
production will likely continue, Moody's expects BHP Billiton to
provide the necessary capital through equity injections into
PetroHawk thereby reducing leverage over time. The initial
leverage reduction and better access to capital would support
upgrading the rating for PetroHawk's bonds into the Ba rating
category.
However, additional ratings up-lift to Baa3 is provided by the
less tangible benefits associated with being a part of much larger
and well-capitalized company. Access to capital has reduced the
funding risk of PetroHawk's planned growth, and better capital
discipline is expected. Looking forward, we expect debt balances
to remain constant despite an out-spending of cash flow. As
reserves and production grow, leverage will decline.
Despite the upgrade, PetroHawk's note rating remains materially
weaker than BHP Billiton's rating as the notes are not guaranteed
by BHP Billiton. Absent a guarantee, BHP Billiton retains the
option to walk away from PetroHawk should a material obligation
arise.
"The acquisition by BHP Billiton materially improves the credit
risk underlying PetroHawk's senior notes," said Stuart Miller,
Moody's Vice President -- Senior Analyst. "However, the lack of
parental guarantee forces us to evaluate the risk to the PetroHawk
bonds on a standalone basis to take into account the unlikely
event that BHP Billiton chooses to walk away from its investment
at some point in the future."
Our projections for PetroHawk are based on the assumption that
capital expenditures will continue at $2 billion annually, a level
that is expected to require $1.0 to $1.5 billion of additional
investment by BHP Billiton through the end of 2013. At the end of
2013, production is projected to be over 100 million Boe and
proved developed reserves could approach 400 million Boe. Assuming
the additional investment from BHP Billiton is in the form of
equity, debt to proved developed reserves would drop from $19.5
per Boe at June 30, 2011 to $8.3 per Boe and debt to average daily
production would drop from $24,500 per Boe to less than $12,000
per Boe. These credit metrics would be comparable to companies
that are rated in the Ba rating level such as Newfield Exploration
(Ba1 stable), Range Resources (Ba2 stable), and Continental
Resources (Ba3 positive). Additional value is embedded in
PetroHawk's acreage position and midstream assets which helps to
explain the $15.1 billion purchase price for PetroHawk, a value
far in excess of the SEC reported total proved reserve value of $3
billion as of December 31, 2010.
An upgrade is unlikely in near term unless BHP Billiton decides to
guarantee the PetroHawk notes. The current rating level was
assigned with an expectation that PetroHawk's growth in reserves
and production will continue at its current pace for the next two
years. A downgrade is possible if leverage does not improve as
anticipated.
The principal methodology used in this rating were the Global
Exploration and Production (E&P) Industry rating methodology
published in December 2008.
PetroHawk Energy Corporation is headquartered in Houston, Texas.
PHI GROUP: Dave Banerjee CPA Raises Going Concern Doubt
-------------------------------------------------------
PHI Group, Inc., filed on Oct. 14, 2011, its annual report for the
fiscal year ended June 30, 2011.
Dave Banerjee CPA, in Woodland Hills, Calif., expressed
substantial doubt about PHI Group'ability to continue as a going
concern. The independent auditors noted that the Company has
accumulated deficit of $28,177,788 and net loss amounting
$1,178,297 for the year ended June 30, 2011.
The Company reported a net loss of $1.2 million on $409,317 of
revenue for the fiscal year ended June 30, 2011, compared with a
net loss of $3.6 million on $83,990 of revenue for the fiscal year
ended June 30, 2010.
The Company's balance sheet at June 30, 2011, showed $1.6 million
in total assets, $9.2 million in total liabilities, and a
stockholders' deficit of $7.6 million.
A complete text of the Form 10-K is available for free at:
http://is.gd/PznVoe
Huntington Beach, Calif.-based PHI Group, Inc., through its wholly
owned and majority-owned subsidiaries, is engaged in a number of
business activities, the scope of which includes consulting and
merger and acquisition advisory services, real estate and
hospitality development, mining, natural resources, energy, and
investing in special situations. The Company invests in various
business opportunities within its chosen scope of business,
provides financial consultancy and M&A advisory services to U.S.
and foreign companies, and acquires selective target companies
under special situations to create additional long-term value for
its shareholders.
POST 240: Seeks Bankruptcy Protection in California
---------------------------------------------------
Post 240 Partners LP, a single-asset real estate entity, filed for
Chapter 11 protection on Oct. 19 in U.S. Bankruptcy Court in San
Francisco, California (Bankr. N.D. Calif. Case No. 11-33788).
The partnership has assets and liabilities each in the range of
$50 million to $100 million, court records show. An affiliate,
Post Street LLC, filed for bankruptcy in June.
Among the partnership's largest unsecured creditors are Cushman &
Wakefield, owed $500,626, and Festival Management Corp., owed
$278,744.
PROTEONOMIX INC: To Move Forward with Offshore Stem Cell Testing
----------------------------------------------------------------
Proteonomix, Inc., intends to move forward with the testing of its
StromaCel technology through its PRTMI subsidiary or its
affiliates. The Company decided to examine the possibility of
testing its cardiac stem cell treatment offshore in light of the
progress toward its trial of UMK-121, its stem cell treatment for
patients awaiting liver transplant to overcome End Stage Liver
Disease, in the United States.
Michael Cohen, President of the Company, stated: "Since we
progress toward the commencement of our trial of UMK-121 in the
United States, we have decided to explore the possible testing of
our cardiac treatment offshore in order to reduce the cost of
bringing the cardiac treatment to market. This strategic decision
is being made in recognition of the increasing costs associated
with bringing a new drug to market in the United States through
the NDA (New Drug Application) process and the availability of
expert medical testing capabilities offshore at a fraction of the
cost."
Mr. Cohen continued: "Once we have established the efficacy of our
cardiac stem cell treatment offshore and have commenced foreign
sales, then we will be in a better financial position to pursue
the NDA in the United States." We have been approached by one
group that has expressed interest in exploring such a possibility
and we will follow through with this in the coming weeks.
Meanwhile we will seek out others interested in a similar
transaction keeping mind at all times that any such deal would
have to provide immediate benefit to our shareholders."
About Proteonomix
Proteonomix, Inc. (OTC BB: PROT) -- http://www.proteonomix.com/--
is a biotechnology company focused on developing therapeutics
based upon the use of human cells and their derivatives.
The Company's balance sheet at June 30, 2011, showed $3.51 million
in total assets, $6.95 million in total liabilities and a $3.43
million total stockholders' deficit.
As reported in the TCR on April 1, 2011, KBL, LLP, in New York,
expressed substantial doubt about Proteonomix, Inc.'s ability to
continue as a going concern, following the Company's 2010 results.
The independent auditor noted that the Company has sustained
significant operating losses and is currently in default of its
debt instrument and needs to obtain additional financing or
restructure its current obligations.
QUALTEQ INC: Asks Court to Approve $4.5MM DIP Financing
-------------------------------------------------------
Carla Main at Bloomberg News reports that QualTeq Inc. asked for
court permission Oct. 19 to borrow as much as $4.5 million to
finance operations while in bankruptcy.
QualTeq seeks to convert a pre-bankruptcy loan facility into so-
called debtor-in-possession financing. The company's business "is
strong and continues to grow," South Plainfield, New Jersey-based
QualTeq said in court papers.
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.
QUANTUM FUEL: Earns $3.4 Million from Sale of Notes and Warrants
----------------------------------------------------------------
Quantum Fuel Systems Technologies Worldwide, Inc., entered into
Subscription Agreements with certain "accredited investors", as
that term is defined in Rule 501(a) of Regulation D under the
United States Securities Act of 1933, as amended, for the purchase
and sale of 10% convertible promissory notes and warrants. During
the period from Oct. 17, 2011, through Oct. 21, 2011, the Company
received gross proceeds of approximately $3,400,000 from the
offering, which will be used for general working capital purposes
and repayment of debt. The Investors received warrants to
purchase up to 1,301,431 shares of the Company's common stock.
The holders of the Convertible Notes have the right at any time to
convert all or part of the outstanding principal amount due under
the Convertible Notes into shares of the Company's common stock at
a conversion price of $2.7727 per share, subject to customary
anti-dilution adjustments for stock splits, stock dividends and
similar corporate events. The Convertible Notes mature one year
from the date of issuance. Interest is payable in cash on a
quarterly basis. The Convertible Notes are subordinate in all
respects to the Company's obligations to its senior secured
lender. The Company has the right to prepay all or part of the
Convertible Notes at any time upon 30 days prior written notice.
The exercise price for the Investor Warrants is $2.64 per share.
The Investor Warrants are not exercisable for six months and
permit cashless exercise unless the resale of the shares
underlying the Investor Warrants has been registered under the
Securities Act, in which case, they must be exercised for cash.
The Company paid its placement agent a cash fee of $340,000 for
its services as placement agent in connection with the offering.
A full-text copy of the Form 8-K is available for free at:
http://is.gd/87L3Bj
About Quantum Fuel
Based in Irvine, California, Quantum Fuel Systems Technologies
Worldwide, Inc., is a fully integrated alternative energy company
and considers itself a leader in the development and production of
advanced clean propulsion systems and renewable energy generation
systems and services.
Quantum Fuel and its senior lender, WB QT, LLC, entered into a
Ninth Amendment to Credit Agreement and a Forbearance Agreement on
Jan. 3, 2011. The Senior Lender agreed to provide the Company
with a $5.0 million non-revolving line of credit, which may be
drawn upon at any time prior to April 30, 2011. Advances under
the New Line of Credit do not bear interest -- unless an event of
default occurs, in which case the interest rate would be 10% per
annum -- and mature on April 30, 2011. The Senior Lender also
agreed to forbear from accelerating the maturity date for any
portion of the Senior Debt Amount and from exercising any of its
rights and remedies with respect to the Senior Debt Amount until
April 30, 2011.
The Company's balance sheet at July 31, 2011, showed
$74.15 million in total assets, $31.62 million in total
liabilities, and $42.53 million total stockholders' equity.
The Company reported a net loss attributable to stockholders of
$11.03 million on $20.27 million of total revenue for the year
ended Apri1 30, 2011, compared with a net loss attributable to
stockholders of $46.29 million on $9.60 million of total revenue
during the prior year.
Ernst & Young LLP, in Orange County, California, noted that
Quantum Fuel's recurring losses and negative cash flows combined
with the Company's existing sources of liquidity and other
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
Possible Bankruptcy
The Company anticipates that it will need to raise a significant
amount of debt or equity capital in the near future in order to
repay certain obligations owed to the Company's senior secured
lender when they mature. As of June 15, 2011, the total amount
owing to the Company's senior secured lender was approximately
$15.5 million, which includes approximately $12.5 million of
principal and interest due under three convertible promissory
notes that are scheduled to mature on Aug. 31, 2011, and a $3.0
million term note that is potentially payable in cash upon demand
beginning on Aug. 1, 2011, if the Company's stock is below $10.00
at the time demand for payment is made. If the Company is unable
to raise sufficient capital to repay these obligations at maturity
and the Company is otherwise unable to extend the maturity dates
or refinance these obligations, the Company would be in default.
The Company said it cannot provide any assurances that it will be
able to raise the necessary amount of capital to repay these
obligations or that it will be able to extend the maturity dates
or otherwise refinance these obligations. Upon a default, the
Company's senior secured lender would have the right to exercise
its rights and remedies to collect, which would include
foreclosing on the Company's assets. Accordingly, a default would
have a material adverse effect on the Company's business and, if
the Company's senior secured lender exercises its rights and
remedies, the Company would likely be forced to seek bankruptcy
protection.
REAL MEX: Seeks to Hire DJM Realty as Real Estate Consultant
------------------------------------------------------------
Real Mex Restaurants, Inc. and its debtor-affiliates ask the
bankruptcy court for authority to employ DJM Realty Services LLC
as real estate consultants nunc pro tunc to the Petition Date.
The Debtors will engage DJM to perform, among other things, these
services:
(a) meeting with the Debtors to ascertain the Debtors' goals,
objectives and financial parameters;
(b) negotiating the modification of certain of the Debtors'
leases, as directed by the Debtors, to obtain rent
reductions or other advantageous modifications;
(c) negotiating the termination, assignment or other
disposition of certain of the Leases, as may be directed
by the Debtors, including preparing and implementing a
marketing plan therefor and assisting the Debtors at any
auctions of those Leases, if needed;
(d) as may be directed by the Debtors, negotiating waivers or
reductions of prepetition cure amounts and claims pursuant
to Section 502(b)(6) of the Bankruptcy Code with respect
to Leases;
(e) negotiating with landlords to obtain extensions of time to
assume or reject Leases; and
(f) reporting periodically to the Debtors regarding the status
of negotiations.
The Debtors will compensate DJM in accordance with this
compensation structure:
(a) Initial Fee. Upon the execution of the Consulting Services
Agreement and the entry of the order approving DJM's
retention, the Debtors will pay DJM a non-refundable initial
fee amounting $50,000. The initial fee will be non-
refundable but the Debtors may offset up to the full amount
of this initial fee against any other fees owed to DJM
pursuant to the Consulting Services Agreement.
(b) Lease Modifications. In consideration of DJM's services in
connection with any renegotiation of the monetary terms of
any Lease, including but not limited to rent reductions,
elimination of percentage rent payments, reductions in term
and reductions or limitations on extra charges, DJM's fee
will be the dollar amount equal to five (5.0%) percent of
Occupancy Cost Savings (as defined in the Consulting Service
Agreement), for each Lease Modification.
As to each Lease for which DJM's efforts resulted in landlord
approval of a monetary term Lease modification and, for
whatever reason, including but not limited to the conversion
of the Bankruptcy Case to a Chapter 11 liquidation or a
Chapter 7 proceeding, the relevant Lease is not later assumed
by the Debtors, then DJM shall earn and be paid an
alternative fee in the amount of fifty (50.0%) percent of the
fee it would have earned, if such modified Lease had been
assumed; provided that such alternative fee will be offset
against any other fee payable to the DJM which is related to
the disposition of that particular Lease.
(c) Dispositions. As to Leases, if any, the Debtors direct DJM
to market for disposition, then for each closing of a
transaction in which any Lease is sold, assigned or otherwise
transferred to a third party (including lease termination
transactions with landlords in which the landlord pays the
Debtors for such termination and/or agrees to waive claims in
consideration for such termination, the sale of so-called
"Designation Rights" and sales to purchasers of substantially
all the equity or assets of the Debtors), as evidenced by a
firm, written agreement between the applicable parties, then
DJM will earn a fee in a dollar amount equal to five percent
(5.0%) of the Gross Proceeds of such disposition. The term
"Gross Proceeds" means the total amount of consideration paid
or payable (including any cure or other claim amounts paid or
waived) by the purchaser, assignee, designation rights
purchaser, landlord or other transferee.
(d) Reduction in Bankruptcy Claims. For any Lease rejected by
the Debtors, if, as a result of DJM's efforts as directed by
the Debtors, the landlord agrees to reduce or waive the claim
it could reasonably assert under Section 502(b)(6) of the
Bankruptcy Code or otherwise, DJM will receive a fee in an
amount equal to five percent (5.0%) of the savings of any
distribution that otherwise would have been payable to the
landlord in the Debtors' bankruptcy cases. For any Lease
assumed by the Debtors, if, as a result of DJM's efforts as
directed by the Debtors, the landlord agrees to reduce or
waive its cure claim, DJM will receive a fee in an amount
equal to five percent (5.0%) of such reduction or waiver.
(e) Extensions of Time to Assume/Reject Leases. If the Debtors
direct DJM to negotiate with landlords to obtain extensions
of time to assume or reject Leases under Section 365(d)(4) of
the Bankruptcy Code, then DJM will earn and be paid a fee of
$500 per each Debtor-directed and landlord executed Extension
Agreement. An executed Extension Agreement will be evidenced
by and consist of a binding written consent from an
authorized representative of landlord agreeing to the
extension.
Edward P. Zimmer, a member of DJM, assures the Court that his firm
is a "disinterested person" as the term is defined in Section
101(14) of the Bankruptcy Code.
About Real Mex
Based in Cypress, California, Real Mex Restaurants, Inc., owns and
operates restaurants, primarily through its major subsidiaries El
Torito Restaurants, Inc., Chevys Restaurants, LLC, and Acapulco
Restaurants, Inc. It has 178 restaurants, with 149 in California.
There are also 30 franchised locations. It acquired Chevys Inc.
for $90 million through confirmation of Chevy's Chapter 11 plan in
2004.
Real Mex Restaurants and 16 of its affiliates filed for Chapter 11
bankruptcy protection (Bankr. D. Del. Case Nos. 11-13122 to
11-13138) on Oct. 4, 2011. Judge Brendan Linehan Shannon oversees
the case. Judge Peter Walsh was initially assigned to the case.
The Debtors are represented by Mark Shinderman, Esq., Fred
Neufeld, Esq., and Haig M. Maghakian, Esq., at MILBANK, TWEED,
HADLEY & McCloy LLP; and Laura Davis Jones, Esq., and Curtis A.
Helm, Esq., at PACHULSKI STANG ZIEHL & JONES LLP as counsel. The
Debtors' financial advisors are Imperial Capital, LLC. The
Debtors' claims, noticing, soliciting and balloting agent is Epiq
Bankruptcy Solutions, LLC.
Assets are $272.2 million while debt totals $250 million,
according to the Chapter 11 petition. The petitions were signed
by Richard P. Dutkiewiez, chief financial officer and executive
vice president.
Counsel to GE Capital Corp., the DIP Agent and the Prepetition
First Lien Secured Agent, are Jeffrey G. Moran, Esq., and Peter P.
Knight, Esq., at Latham & Watkins LLP; and Kurt F. Gwynne, Esq.,
at Reed Smith LLP as counsel.
Counsel to the Prepetition Secured Second Lien Trustee are Mark F.
Hebbeln, Esq., and Harold L. Kaplan, Esq., at Foley & Lardner LLP.
Counsel to the Majority Prepetition Second Lien Secured
Noteholders are Adam C. Harris, Esq., and David M. Hillman, Esq.,
at Schulte Roth & Zabel LLP; and Russell C. Silberglied, Esq., at
Richards Layton & Finger.
Z Capital Management LLC, which holds nearly 70% of the Opco term
loan, is represented by Derek C. Abbott, Esq., and Chad A. Fights,
Esq., at Morris Nichols Arsht & Tunnell LLP; and Lee R. Bogdanoff,
Esq., and Whitman L. Holt, Esq., at Klee Tuchin Bogdanoff & Stern
LLP.
REAL MEX: Seeks to Hire Ernst & Young to Provide Tax Services
-------------------------------------------------------------
Real Mex Restaurants, Inc. and its Debtor affiliates ask the court
for authority to employ Ernst & Young LLP as tax services provider
nunc pro tunc to the Petition Date.
Among others Ernst & Young will advise the Debtors of any personal
property tax assessments that, in its professional judgment,
determine to be excessive, with respect to the January 1, 2011
lien date and any prior years that may be open pursuant to an
existing appeal or audit, as deemed necessary.
Ernst & Young's hourly rates for the services generally range:
Executive Director/Principal/Partner $600 to $720
Senior Manager $500 to $615
Manager $375 to $545
Staff/Senior $235 to $420
Richard P. Dutkiewicz, the Debtors' executive vice president and
chief financial officer, assures the Court that Ernst & Young is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code.
About Real Mex
Based in Cypress, California, Real Mex Restaurants, Inc., owns and
operates restaurants, primarily through its major subsidiaries El
Torito Restaurants, Inc., Chevys Restaurants, LLC, and Acapulco
Restaurants, Inc. It has 178 restaurants, with 149 in California.
There are also 30 franchised locations. It acquired Chevys Inc.
for $90 million through confirmation of Chevy's Chapter 11 plan in
2004.
Real Mex Restaurants and 16 of its affiliates filed for Chapter 11
bankruptcy protection (Bankr. D. Del. Case Nos. 11-13122 to
11-13138) on Oct. 4, 2011. Judge Brendan Linehan Shannon oversees
the case. Judge Peter Walsh was initially assigned to the case.
The Debtors are represented by Mark Shinderman, Esq., Fred
Neufeld, Esq., and Haig M. Maghakian, Esq., at MILBANK, TWEED,
HADLEY & McCloy LLP; and Laura Davis Jones, Esq., and Curtis A.
Helm, Esq., at PACHULSKI STANG ZIEHL & JONES LLP as counsel. The
Debtors' financial advisors are Imperial Capital, LLC. The
Debtors' claims, noticing, soliciting and balloting agent is Epiq
Bankruptcy Solutions, LLC.
Assets are $272.2 million while debt totals $250 million,
according to the Chapter 11 petition. The petitions were signed
by Richard P. Dutkiewiez, chief financial officer and executive
vice president.
Counsel to GE Capital Corp., the DIP Agent and the Prepetition
First Lien Secured Agent, are Jeffrey G. Moran, Esq., and Peter P.
Knight, Esq., at Latham & Watkins LLP; and Kurt F. Gwynne, Esq.,
at Reed Smith LLP as counsel.
Counsel to the Prepetition Secured Second Lien Trustee are Mark F.
Hebbeln, Esq., and Harold L. Kaplan, Esq., at Foley & Lardner LLP.
Counsel to the Majority Prepetition Second Lien Secured
Noteholders are Adam C. Harris, Esq., and David M. Hillman, Esq.,
at Schulte Roth & Zabel LLP; and Russell C. Silberglied, Esq., at
Richards Layton & Finger.
Z Capital Management LLC, which holds nearly 70% of the Opco term
loan, is represented by Derek C. Abbott, Esq., and Chad A. Fights,
Esq., at Morris Nichols Arsht & Tunnell LLP; and Lee R. Bogdanoff,
Esq., and Whitman L. Holt, Esq., at Klee Tuchin Bogdanoff & Stern
LLP.
REAL MEX: Seeks to Hire DJM Realty as Real Estate Consultant
------------------------------------------------------------
Real Mex Restaurants, Inc. and its Debtor affiliates ask the court
for authority to employ Grant Thornton LLP as auditor nunc pro
tunc to the Petition Date.
Grant Thornton will, among others:
-- audit the consolidated balance sheet of certain of the
Debtors as of December 25, 2011 and the related
consolidated statements of operations, stockholders' equity
and cash flows for the year then ended.
-- audit the consolidated balance sheet of RM Restaurant
Holding Corp. as of December 25, 2011, and the related
consolidated statement of operations, stockholders' equity
and cash flows for the year then ended; and
-- perform audit procedures on consolidated financial
statement schedules that are required to be included in the
filings with the SEC to determine whether in Grant
Thornton's opinion, these schedules, when considered in
relation to the basic financial statements taken as a
whole, present fairly, in all material respects.
Grant Thornton will also perform a review, but not an audit, of
the Debtors' interim financial information for the third quarter
in the fiscal year ending December 25, 2011 included in Forms 10-Q
to be filed with the U.S. Securities and Exchange Commission. In
conjunction with Grant Thornton's year-end audit procedures, Grant
Thornton will also perform a review of the fourth quarter
financial information.
The Debtors will pay Grant Thornton these amounts:
A. Auditing Services
Billing Date Fees
------------ ----
Nov. 20, 2011 $60,000
Jan. 20, 2011 $75,000
Feb. 20, 2011 $100,000
Mar. 20, 2011 $35,000
B. Interim Review Services
Nov. 20, 2011 $30,000
The Debtors assert that Grant Thornton is a "disinterested person"
as the term is defined in Section 101(14) of the Bankruptcy Code.
About Real Mex
Based in Cypress, California, Real Mex Restaurants, Inc., owns and
operates restaurants, primarily through its major subsidiaries El
Torito Restaurants, Inc., Chevys Restaurants, LLC, and Acapulco
Restaurants, Inc. It has 178 restaurants, with 149 in California.
There are also 30 franchised locations. It acquired Chevys Inc.
for $90 million through confirmation of Chevy's Chapter 11 plan in
2004.
Real Mex Restaurants and 16 of its affiliates filed for Chapter 11
bankruptcy protection (Bankr. D. Del. Case Nos. 11-13122 to
11-13138) on Oct. 4, 2011. Judge Brendan Linehan Shannon oversees
the case. Judge Peter Walsh was initially assigned to the case.
The Debtors are represented by Mark Shinderman, Esq., Fred
Neufeld, Esq., and Haig M. Maghakian, Esq., at MILBANK, TWEED,
HADLEY & McCloy LLP; and Laura Davis Jones, Esq., and Curtis A.
Helm, Esq., at PACHULSKI STANG ZIEHL & JONES LLP as counsel. The
Debtors' financial advisors are Imperial Capital, LLC. The
Debtors' claims, noticing, soliciting and balloting agent is Epiq
Bankruptcy Solutions, LLC.
Assets are $272.2 million while debt totals $250 million,
according to the Chapter 11 petition. The petitions were signed
by Richard P. Dutkiewiez, chief financial officer and executive
vice president.
Counsel to GE Capital Corp., the DIP Agent and the Prepetition
First Lien Secured Agent, are Jeffrey G. Moran, Esq., and Peter P.
Knight, Esq., at Latham & Watkins LLP; and Kurt F. Gwynne, Esq.,
at Reed Smith LLP as counsel.
Counsel to the Prepetition Secured Second Lien Trustee are Mark F.
Hebbeln, Esq., and Harold L. Kaplan, Esq., at Foley & Lardner LLP.
Counsel to the Majority Prepetition Second Lien Secured
Noteholders are Adam C. Harris, Esq., and David M. Hillman, Esq.,
at Schulte Roth & Zabel LLP; and Russell C. Silberglied, Esq., at
Richards Layton & Finger.
Z Capital Management LLC, which holds nearly 70% of the Opco term
loan, is represented by Derek C. Abbott, Esq., and Chad A. Fights,
Esq., at Morris Nichols Arsht & Tunnell LLP; and Lee R. Bogdanoff,
Esq., and Whitman L. Holt, Esq., at Klee Tuchin Bogdanoff & Stern
LLP.
REDPRAIRIE CORPORATION: Moody's Affirms B2 CFR; Outlook Positive
----------------------------------------------------------------
Moody's Investors Service affirmed RedPrairie Corporation's
(RedPrairie) B2 Corporate Family Rating, its B3 Probability of
Default Rating, and the B2 ratings for its senior secured credit
facilities. Moody's maintained the positive outlook for the
ratings reflecting the potential for improvement in RedPrairie's
credit metrics in the next 12 to 18 months, which could warrant a
ratings upgrade.
Moody's affirmed these ratings:
Issuer: RedPrairie Corporation
-- Corporate Family Rating -- B2
-- Probability of Default Rating -- B3
-- $30 million senior secured credit facility -- B2, LGD3
(33%), changed from LGD3 (34%)
-- $240 million (originally) senior secured term loan facility
-- B2, LGD3 (33%), changed from LGD3 (34%)
RATINGS RATIONALE
The affirmation of the B2 CFR reflects the risks from RedPrairie's
acquisitive growth strategy, which Moody's believes will continue
to interrupt the company's deleveraging trend. Although Moody's
expects RedPrairie to produce good levels of free cash flow, the
ratings agency believes the majority of free cash flow will be
used to fund future acquisitions to bolster the company's market
share or strengthen its portfolio of products or technologies.
The B2 CFR reflects RedPrairie's high financial leverage (4.8x
Debt/LTM June 2011 EBITDA, Moody's adjusted), small scale relative
to some larger and better capitalized competitors, and its product
revenue concentration within warehouse management applications.
RedPrairie's rating also reflects the company's high business
risks resulting from its large revenue exposure to retail and
consumer-goods end-markets, and its highly competitive and
fragmented supply chain management software market. However,
Moody's believes that RedPrairie's business and financial risks
are mitigated by its competitive product offerings and domain
expertise in the niche warehouse and transportation workforce
management segments of the enterprise software market. The B2
rating is supported by the high barriers to entry in RedPrairie's
core markets stemming from the business critical nature and high
switching costs of its products, and the predictability of the
company's cash flows from recurring maintenance revenue and its
high revenue retention rates.
The positive outlook reflects Moody's expectations that
RedPrairie's Debt/EBITDA leverage could decline to less than 4.0x
and its free cash flow could exceed 12% to 15% of total debt in
2012, driven by organic revenue growth in the mid single digit
rates and successful integration of recent acquisitions.
Moody's could change the ratings outlook to stable if RedPrairie's
organic revenue growth stalls, its market share declines or
competitive pressures intensify, and as a result if the company's
FCF/Debt ratio falls below 5% and Debt/EBITDA leverage remains
above 4.0x. The rating or the outlook could come under pressure if
RedPrairie's liquidity becomes weak, the company undertakes
moderate to large-size acquisitions, or a series of small
acquisitions, which increase integration risk and delay the
expected deleveraging.
Conversely, Moody's could raise RedPrairie's ratings if the
company demonstrates lower financial risk tolerance while pursuing
inorganic expansion and its cash flow generation improves, driven
by revenue and earnings growth. Upward rating pressure could
develop if RedPrairie could sustain Debt/EBITDA leverage of less
than 4.0x (Moody's adjusted) while pursuing its expansion
strategy, and free cash flow remains strong.
Headquartered in Alpharetta, Georgia, RedPrairie provides
inventory, transportation and workforce management products and
related services to enterprise customers globally. The company
generated $312 million in revenues in the twelve months ended June
30, 2011.
The principal methodology used in rating RedPrairie Corporation
was the Global Software Industry Methodology published in May
2009. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009 (and/or) the Government-Related
Issuers methodology published in July 2010.
REMY INC: Loses Second Round in Malpractice Suit v. Ice Miller
--------------------------------------------------------------
To improve its cash flow, General Motors supplier Remy Inc.
arranged for an entity known as Hennessey to purchase most of
Remy's GM accounts receivables at a discount. Remy asked Kathy S.
Kiefer, Esq. -- kathy.kiefer@icemiller.com -- an "of counsel"
attorney with Ice Miller LLP, to get Remy's lenders to approve the
Hennessey deal and to take a "quick look" at the "already-
negotiated" agreement. GM insisted on wiring all its payments to
Remy to a single account, and Hennessey insisted that those
payments be deposited in its account at LaSalle Bank in Michigan.
Remy knew that Hennessey had a lender, known as Lancelot, but
Hennessey refused to let Remy see the lending documents. Remy's
top financial officers knew that it was risky for all GM funds to
be wired to a single account over which Remy had no control, and
Ms. Kiefer was also aware of this risk. Remy explored the
possibility of segregating the purchased and the nonpurchased
receivables in Hennessey's account but determined that this would
be too time-consuming and expensive.
Hennessey stopped purchasing Remy's receivables and defaulted on a
payment to Lancelot. Shortly thereafter, two of Lancelot's
employees swept $6.6 million from Hennessey's account, over $5.5
million of which was for nonpurchased receivables belonging to
Remy. Remy sued Hennessey, Lancelot, and the two Lancelot
employees in Michigan, and the court determined that Lancelot "had
no legitimate basis for sweeping funds which belonged to Remy."
The Michigan lawsuit was ultimately settled for $3.5 million.
Remy then sued Ice Miller and Ms. Kiefer for legal malpractice,
alleging that, but for their negligence, Remy "would not have
suffered damages in the form of the diverted money and the legal
expenses incurred to try to collect it." Ice Miller and Ms.
Kiefer filed a motion for summary judgment, asserting that they
did not breach a duty to Remy, that they did not proximately cause
Remy's damages, and that Remy had released its claims against them
in a bankruptcy proceeding. The trial court summarily granted the
summary judgment motion, and Remy now appeals.
In an Oct. 19, 2011 Memorandum Decision, available at
http://is.gd/2auVGdfrom Leagle.com, the Court of Appeals of
Indiana concluded as a matter of law that Ice Miller and Ms.
Kiefer did not proximately cause Remy's damages and therefore
affirmed the trial court.
The case is REMY INC., Appellant-Plaintiff, v. ICE MILLER LLP and
KATHY S. KIEFER, Appellees-Defendants, No. 49A02-1012-CT-1419
(Ind. App. Ct.).
About Remy
Based in Anderson, Indiana, Remy Worldwide Holdings Inc. acts as
a holding company of all the outstanding capital stock of Remy
International Inc. Remy International -- http://www.remyinc.com/
-- manufactures, remanufactures and distributes Delco Remy brand
heavy-duty systems and Remy brand starters and alternators,
locomotive products and hybrid power technology. The company also
provides a worldwide component core-exchange service for
automobiles, light trucks, medium and heavy-duty trucks and other
heavy-duty, off-road and industrial applications. Remy has
operations in the United Kingdom, Mexico and Korea, among others.
The company and its debtor-affiliates filed for Chapter 11
protection on Oct. 8, 2007 (Bankr. D. Del. Cases No. 07-11481 to
07-11509). Douglas P. Bartner, Esq., Fredric Sosnick, Esq., and
Michael H. Torkin, Esq., at Shearman & Sterling LLP, represented
the Debtors' in their restructuring efforts. Pauline K. Morgan,
Esq., Edmon L. Morton, Esq., and Kenneth J. Enos, Esq., at Young
Conaway Stargatt & Taylor, LLP, served as co-counsels to the
Debtors. The Debtors' claims agent was Kurtzman Carson
Consultants LLC and their restructuring advisor was AlixPartners,
LLC. Greenbert Traurig LLP was the Debtors' special corporate
advisory and litigation counsel, and Ernst & Young LLP their
accountant, auditor and tax services provider.
The Debtors obtained confirmation of a Joint Prepackaged Plan of
Reorganization on Nov. 20, and the Plan became effective Dec. 5,
2007.
RENAISSANCE LEARNING: S&P Assigns 'B' Corporate Credit Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Wisconsin Rapids, Wisc.-based Renaissance
Learning Inc. The outlook is stable.
"We also assigned 'BB-' issue-level and '1' recovery ratings to
Renaissance's $195 million senior secured credit facilities. The
'1' recovery rating indicates our expectations for very high (90%-
100%) recovery in the event of payment default," S&P said.
"The ratings on Renaissance reflect government budget headwinds
and its highly leveraged financial profile," said Standard &
Poor's credit analyst David Tsui. "Renaissance's incumbency
position in its fragmented niche market, highly recurring
subscription revenue base, and good free operating cash flow
characteristics are partly offsetting factors."
Renaissance benefits from an incumbency position in the U.S.
computer-based assessment market. In the U.S., there are
approximately 118,000 Pre-K to 12 schools, of which about 70,000
schools use Renaissance's products, representing a 59% penetration
rate, although a lower rate of classroom penetration.
Additionally, there are about 1,500 schools as users in the U.K.
and Ireland. "We expect growth to be higher overseas than in the
U.S.; however, the impact of overseas revenue contribution to the
company's overall growth in the medium term is likely to be
marginal," S&P related.
The stable outlook reflects Renaissance's highly recurring revenue
base, stable profitability, and good free operating cash flow
generation. "We could consider an upgrade if the company can
generate higher-than-expected growth by successfully penetrating
the district-wide sales in the U.S. or by further expansion
overseas, while improving free cash flow generation and applying
excess cash for debt reduction, leading to leverage declining to
the low-5x area. We would consider a lower rating if government
budget concerns or competitive pressure intensifies, leading to
customer attrition, EBITDA decline and leverage deteriorating to
and being sustained at the mid- to high-6x level," S&P stated.
REOSTAR ENERGY: Amended Plan Outline Hearing Scheduled for Dec. 12
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas will
convene a hearing on Dec. 12, 2011, at 9:30 a.m., to consider
adequacy of the disclosure statement explaining ReoStar Energy
Corporation, et al.'s First Amended Plan of Reorganization dated
as of Aug. 2, 2011.
As reported in the Troubled Company Reporter on Aug. 16, 2011, the
Plan provides for the restructure of Debtors and their emergence
from bankruptcy as reorganized privately held entities.
After payment of Secured Claims, Administrative Claims, and
Priority Claims under the priorities of the Bankruptcy Code, the
Debtors have agreed to pay some holders of Allowed General
Unsecured Claims their Pro Rata Share of (a) 20% of their Allowed
General Unsecured Claim amounts over 36 equal monthly payments
starting on the first business day following the Effective Date,
plus up to (b) 50% of the Net Proceeds, if any, from all Estate
Actions pursued by the Debtors.
The Allowed secured claim of BT & MK Energy and Commodities, LLC
(of unknown amount) will be paid over 10 years amortized at 5%.
BT & MK's Allowed unsecured claim (of unknown amount) will receive
20% of its claim paid over 2 years.
All Class 6 Interests in the Debtors will be canceled as of the
Effective Date. New interests will be sold to the Interested
Purchasers.
A copy of the First Amended Disclosure Statement is available at:
http://bankrupt.com/misc/reostar.1stamendedDS.pdf
About ReoStar Energy
Fort Worth, Texas-based ReoStar Energy Corporation is engaged in
the exploration, development and acquisition of oil and gas
properties, primarily located in the state of Texas. The Company
owns roughly 9,000 acres of leasehold, which include 5,000 acres
of exploratory and developmental prospects as well as 4,000 acres
of enhanced oil recovery prospects. The Company filed for Chapter
11 bankruptcy protection (Bankr. N.D. Tex. Case No. 10-47176) on
Nov. 1, 2010. Bruce W. Akerly, Esq., and Arthur A. Stewart, Esq.,
at Cantey Hanger LLP, in Dallas, represent the Debtors in their
restructuring efforts. Greenberg Taurig, LLP, serves as special
corporate/securities counsel. Reostar Energy disclosed
$15,335,337 in assets and $16,391,412 in liabilities.
ReoStar Energy's bankruptcy case is jointly administered with
ReoStar Gathering, Inc., ReoStar Leasing, Inc., and ReoStar
Operating, Inc. ReoStar Energy is the lead case.
No trustee was appointed in the Debtors' cases. On Jan. 10, 2011,
Michael McConnell was appointed as Chapter 11 examiner in the
Debtors cases.
RICCO INC: Chapter 11 Trustee Taps John Boyd Company's Services
---------------------------------------------------------------
Robert L. Johns, trustee of the Chapter 11 case of Ricco Inc.,
asks the U.S. Bankruptcy Court for the Northern District of West
Virginia for permission to employ John T. Boyd Company to perform
preliminary assessment services.
The firm will charge $25,000 for consultancy services and $35,000
for valuation services.
The Chapter 11 trustee assures the Court that the firm is a
"disinterested person" within the meaning of Section 101(14) of
the Bankruptcy Code.
Elk Garden, West Virginia-based Ricco, Inc. -- aka Amico Partners,
Ambizioso Partners, Lupo Tana Partners, and Tre Manichinos
Partners -- filed for Chapter 11 bankruptcy protection on
January 7, 2010 (Bankr. N.D. W.V. Case No. 10-00023). Todd
Johnson, Esq., at Johnson Law, PLLC, assists the Company in its
restructuring effort. The Company has assets of $15,162,600, and
total debts of $4,093,674.
W. Clarkson McDow, Jr., U.S. Trustee for Region 4 appointed six
members to the official committee of unsecured creditors in the
Chapter 11 cases of Ricco, Inc.
RIVER ROCK: Plans to Offer $205 Million of Senior Notes Due 2018
----------------------------------------------------------------
The River Rock Entertainment Authority intends to offer, pursuant
to exemptions from registration under the Securities Act, $205
million aggregate principal amount of Senior Notes due 2018.
The Authority intends to use the proceeds from the offering of the
New Notes, together with cash on hand and the proceeds from a
concurrent private placement of $27.6 million of 6.50% Senior
Subordinated Notes due 2019, to retire all of the Company's
outstanding 9 3/4% Senior Notes due 2011 and the Tribe's
outstanding notes and to fund the construction of an emergency
access road over the Tribe's reservation and a portion of newly
acquired property.
About River Rock
Headquartered in Geyserville, California, River Rock Entertainment
Authority is a governmental instrumentality of the Dry Creek
Rancheria Band of Pomo Indians, a federally recognized Indian
tribe. River Rock Casino is a governmental development project of
the Authority. The Casino offers Class III slot and video poker
gaming machines, house banked table games, including Blackjack,
Three card poker, Mini-baccarat and Pai Gow poker, Poker,
featuring Texas Hold' em, comprehensive food and non-alcoholic
beverage offerings, and goods for sale on tribal land located in
Geyserville, California.
* * *
As reported by the TCR on March 18, 2011, Moody's Investors
Service downgraded River Rock Entertainment Authority's Corporate
Family Rating and Probability of Default Rating to Caa1 from B2,
and the rating on the $200 million senior notes due 2011 to Caa1
from B2. All ratings are kept under review for further possible
downgrade. The downgrade of CFR to Caa1 reflects the significant
refinancing risk stemming from upcoming maturity of RREA's $200
million senior notes on Nov. 1, 2011 and lack of evidence that the
Authority has made meaningful progress in addressing the maturity
since its ratings were initially placed under review for possible
downgrade in October 2010.
In the Dec. 13, 2010 edition of the Troubled Company Reporter,
Standard & Poor's Ratings Services lowered its ratings on Sonoma
County, California-based River Rock Entertainment Authority; the
issuer credit rating was lowered to 'B-' from 'B+'. At the same
time, S&P placed the ratings on CreditWatch with negative
implications. RREA was created to operate the River Rock casino
for the Dry Creek Rancheria Band of Pomo Indians (the Tribe).
"The rating downgrade and CreditWatch listing reflect River Rock's
limited progress in addressing near-term refinancing needs
associated with its $200 million senior notes due November 2011,
as well as other debt held at the Tribe," said Standard & Poor's
credit analyst Michael Halchak. "With less than 12 months to the
maturity on the senior notes, S&P has become increasingly
concerned around River Rock's ability to successfully address
these refinancing needs. In addition, S&P believes River Rock
faces additional liquidity needs related to the Tribe's memorandum
of agreement with Sonoma County, associated with infrastructure
spending needs in and around the casino."
The Company's balance sheet at June 30, 2011, showed
$224.41 million in total assets, $210.64 million in total
liabilities, all current, and $13.77 million in total net assets.
Bankruptcy Warning
The Company has a significant amount of debt coming due in fiscal
2011 that it may not be able to repay. The Company's $200.0
million of Senior Notes mature in November 2011. The Company has
been exploring its options to refinance its Senior Notes and
expect to propose a refinancing transaction in the near future.
While the Company expects to be able to refinance this debt, there
can be no assurances that this in fact will occur. In such case,
failure to refinance or extend the maturity date of this debt will
give the holders of such debt certain rights under the Company's
indenture which are limited by the terms of the Company's
indenture, the Company's waiver of sovereign immunity and remedies
available to creditors to Native American gaming operators under
federal law and by the Company's Compact. In addition, it is
uncertain whether the Company or the Dry Creek Rancheria Band of
Pomo Indians may be a debtor in a case under the U.S. Bankruptcy
Code. Without bankruptcy court protection, other creditors might
receive preferential payments or otherwise obtain more than they
would have under a bankruptcy court proceeding. If the Company
commences a case under the U.S. Bankruptcy Code and the bankruptcy
court does not dismiss the case, payments from the debtor would
cease. It is uncertain how long payments under the Senior Notes
could be delayed following commencement of a bankruptcy case.
RIVER ROCK: Has $37.9MM Estimated Cash Balance as of Sept. 30
-------------------------------------------------------------
The River Rock Entertainment Authority currently estimates that
the Company's net revenue, income before distributions to the
Tribe and EBITDA for the three-month period ended Sept. 30, 2011,
will be in the range of approximately $30.5 million to $31.5
million, $7.8 million to $8.3 million and $14.0 million to $14.7
million, compared to $30.4 million, $5.3 million and $13.1
million, respectively for the same period in 2010. The Company's
estimated cash balance as of Sept. 30, 2011, was approximately
$37.9 million, excluding approximately $4.3 million in restricted
cash.
The Company has not yet finalized its financial results for the
three months ended Sept. 30, 2011.
About River Rock
Headquartered in Geyserville, California, River Rock Entertainment
Authority is a governmental instrumentality of the Dry Creek
Rancheria Band of Pomo Indians, a federally recognized Indian
tribe. River Rock Casino is a governmental development project of
the Authority. The Casino offers Class III slot and video poker
gaming machines, house banked table games, including Blackjack,
Three card poker, Mini-baccarat and Pai Gow poker, Poker,
featuring Texas Hold' em, comprehensive food and non-alcoholic
beverage offerings, and goods for sale on tribal land located in
Geyserville, California.
* * *
As reported by the TCR on March 18, 2011, Moody's Investors
Service downgraded River Rock Entertainment Authority's Corporate
Family Rating and Probability of Default Rating to Caa1 from B2,
and the rating on the $200 million senior notes due 2011 to Caa1
from B2. All ratings are kept under review for further possible
downgrade. The downgrade of CFR to Caa1 reflects the significant
refinancing risk stemming from upcoming maturity of RREA's $200
million senior notes on Nov. 1, 2011 and lack of evidence that the
Authority has made meaningful progress in addressing the maturity
since its ratings were initially placed under review for possible
downgrade in October 2010.
In the Dec. 13, 2010 edition of the Troubled Company Reporter,
Standard & Poor's Ratings Services lowered its ratings on Sonoma
County, California-based River Rock Entertainment Authority; the
issuer credit rating was lowered to 'B-' from 'B+'. At the same
time, S&P placed the ratings on CreditWatch with negative
implications. RREA was created to operate the River Rock casino
for the Dry Creek Rancheria Band of Pomo Indians (the Tribe).
"The rating downgrade and CreditWatch listing reflect River Rock's
limited progress in addressing near-term refinancing needs
associated with its $200 million senior notes due November 2011,
as well as other debt held at the Tribe," said Standard & Poor's
credit analyst Michael Halchak. "With less than 12 months to the
maturity on the senior notes, S&P has become increasingly
concerned around River Rock's ability to successfully address
these refinancing needs. In addition, S&P believes River Rock
faces additional liquidity needs related to the Tribe's memorandum
of agreement with Sonoma County, associated with infrastructure
spending needs in and around the casino."
The Company's balance sheet at June 30, 2011, showed
$224.41 million in total assets, $210.64 million in total
liabilities, all current, and $13.77 million in total net assets.
Bankruptcy Warning
The Company has a significant amount of debt coming due in fiscal
2011 that it may not be able to repay. The Company's $200.0
million of Senior Notes mature in November 2011. The Company has
been exploring its options to refinance its Senior Notes and
expect to propose a refinancing transaction in the near future.
While the Company expects to be able to refinance this debt, there
can be no assurances that this in fact will occur. In such case,
failure to refinance or extend the maturity date of this debt will
give the holders of such debt certain rights under the Company's
indenture which are limited by the terms of the Company's
indenture, the Company's waiver of sovereign immunity and remedies
available to creditors to Native American gaming operators under
federal law and by the Company's Compact. In addition, it is
uncertain whether the Company or the Dry Creek Rancheria Band of
Pomo Indians may be a debtor in a case under the U.S. Bankruptcy
Code. Without bankruptcy court protection, other creditors might
receive preferential payments or otherwise obtain more than they
would have under a bankruptcy court proceeding. If the Company
commences a case under the U.S. Bankruptcy Code and the bankruptcy
court does not dismiss the case, payments from the debtor would
cease. It is uncertain how long payments under the Senior Notes
could be delayed following commencement of a bankruptcy case.
RIVER ROCK: Moody's Assigns 'B3' Rating to Proposed Notes
---------------------------------------------------------
Moody's Investors Service assigned a B3 rating to River Rock
Entertainment Authority's proposed $205 million 7-year senior
notes, consisting of $110 million series A taxable notes and $95
million series B tax exempt note. All existing ratings, including
RREA's Caa2 Corporate Family and Probability of Default ratings,
remain under review for possible downgrade.
RREA intends to use the proceeds from the notes offering, together
with cash on hand and the proceeds from a concurrent private
placement of $27.6 million of 6.50% Senior Subordinated Notes due
2019 (not rated), to retire all of its outstanding 9?% Senior
Notes due 2011 and the existing notes of its owner - the Dry Creek
Rancheria Band of Pomo Indians (the "Tribe") and to fund the
construction of an emergency access road over the Tribe's
reservation and a portion of newly acquired property.
Rating assigned:
$110 million senior secured series A notes due 2018 -- B3 (LGD 3,
46%)
$95 million senior secured series B notes due 2018 -- B3 (LGD 3,
46%)
Ratings are kept on under review for possible downgrade:
Corporate Family Rating -- Caa2
Probability of Default Rating -- Caa2
$200 million senior notes due November 2011 -- Caa2
RATING RATIONALE
The Caa2 CFR and review for possible downgrade continue to reflect
the high default probability and potential challenges RREA is
likely to face in seeking to refinance within a very short
timeframe its existing senior notes that mature on November 1,
2011 while capital market remains precarious. "If the proposed
refinancing is completed on time, we would likely upgrade the CFR
to B3, and the B3 rating on the new senior notes reflects this
scenario. However, if the transaction does not close, the ratings
will most likely be downgraded," explained Moody's lead analyst,
John Zhao. The B3 rating on the new senior notes is subject to
closing of the transaction as currently proposed and to Moody's
review of final terms and conditions.
The post-refinancing B3 CFR assumption would incorporate Moody's
expectation that the Authority's free cash flow will likely remain
positive over the next 12-18 months despite the modestly increased
financial leverage, and other increased financial cash
obligations. Moody's also anticipates the funded debt to decline
modestly over the next year as the majority of the free cash flow
will be mandatorily required (per the proposed terms) to pay down
the new senior notes. However, our rating assessment also reflects
the significant future impact from new competition, an on-going
threat that could materialize in the near-to-medium term. In
particular, the Graton Rancheria Tribe may open a large casino at
Rohnert Park site, CA -- approximately 35 miles away from River
Rock- in the next few years. Although the project still faces
several hurdles before it opens, we expect the impact on River
Rock's future operations and cash flow to be significant should it
open, considering its proximity to River Rock and the fact that
the proposed site is closer to the key feeder market in San
Francisco, CA than River Rock's casino. In a severe case where the
new casino opens within the next 2-3 years, and RREA's EBITDA
declines by more than expected as a result of the new competition,
the Authority's free cash flow could diminish and its ability to
service the debt and other financial obligations could be
impaired.
Further, ratings are also constrained by RREA's single asset
profile, significant other financial and non-financial obligations
that can either dilute its cash flow or bear execution risk and
uncertainties, such as the construction of the emergency access
road, the MOA payment to the local county, and debt service
requirements for the mortgage note held at the tribe level. Also
considered are the political nature and lack of transparency of
the tribe's decision-making process and other unique risks common
to Native American gaming issuers. Positive rating considerations
are given to River Rock's relatively stable operating performance
and strong margins thanks to the casino's attractive location
absent future competition. The rating also considers that the
tribal distribution will be lowered post refinancing to help
offset the higher cash payment obligations as mentioned above.
The principal methodology used in rating River Rock was the Global
Gaming Industry Methodology published in December 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
River Rock is an unincorporated governmental instrumentality of
the Dry Creek Rancheria Band of Pomo Indians, a federally
recognized Indian tribe with 947 enrolled members and an
approximately 75-acre reservation in Sonoma County, California.
River Rock was formed in 2003 to own and operate the River Rock
Casino, which reported approximately $122 million in net revenues
for the last twelve-month period ended June 30, 2011.
RQB RESORT: Second Amended Reorganization Plan Confirmed
--------------------------------------------------------
Chief Judge Paul M. Glenn has confirmed the Second Amended Plan of
RQB Resort, LP, and RQB Development, LP, dated Sept. 20, 2011.
Judge Glenn rules that the order will have no effect on Dr. Ellen
Pan's ability to seek recovery from the Debtors' insurance
providers in a personal injury action against the Debtors and
other defendants.
The distributions, proposed treatment and expected recoveries
under the Plan for the Debtors' creditors and equity interest
holders are:
A. Administrative Claims, estimated to be approximately $1.85
million, will be payable in full on the Effective Date
unless creditor agrees to different treatment. The
estimated recovery rate of administrative claims is
expected to be 100%.
B. Class 1 (Secured Tax Claims) is estimated to be between
$1.8 Million and $2.2 Million. These claims is payable in
full on the Effective Date with 4% interest paid on pre-
petition taxes. The estimated recovery rate of Class 1
claims is expected to be 100%.
C. Class 2 (Goldman's Secured Claim) is estimated to be $132
million. In full satisfaction of the claim, the Debtors
will transfer its encumbered assets to Goldman. The
estimated recovery rate of Class 2 claims is expected to
be 100%.
D. Class 3 (Unsecured Claims against RQB Resort) is estimated
to be approximately $190,000. These claims are payable on
the later of the Effective Date or the date claim is
allowed. The estimated recovery rate of Class 3 claims is
expected to be 50%.
E. Class 4 (General Unsecured Claims) is estimated to be
approximately $73.71 Million. These claims will be
payable on the later of the Effective Date or the date the
claim is allowed. The estimated recovery rate of Class 4
claims is expected to be 2.8%.
F. Class 5 (Equity Interests General and limited partnership
interests) will be cancelled with no distribution under
the Plan. The estimated recovery rate of Class 4 claims is
expected to be 0%.
RQB Resort, LP, and RQB Development, LP, amended its Chapter 11
Plan of Reorganization to accommodate revisions requested by
Goldman Sachs Mortgage Company, the Debtors' largest creditor
holding a claim secured by substantially all of the Debtors'
assets and a large unsecured claim.
In connection with their proposed reorganization, the Debtors
filed a joint plan on August 18, 2011. The Initial Plan proposed
to satisfy Goldman's secured claim by transferring all of the
equity interests in the Post-Confirmation Debtors to Goldman. The
Initial Plan also proposed to reject the Debtors' franchise
agreement with Marriott International, Inc., to assume, on
modified terms, the Debtors' hotel management agreement with
Interstate Hotels and Resorts, LLC, and to assume the Debtor's
agreement with SGR Asset Management LLC.
Immediately upon filing the Initial Plan, the Debtors informed
Goldman that the Debtors would cooperate with Goldman regarding
the manner in which the Debtors' encumbered property would be
transferred to Goldman and the assumption or rejection of the
Debtors' agreements.
Goldman has requested that the Debtors revise their Initial Plan
as follows: (i) transfer the Debtors' assets (rather than equity
interests in the Post-Confirmation Debtors) to Goldman, (ii)
appointment of a distribution agent to administer the
Post-Confirmation Debtors, (iii) assume and assign the Debtors'
franchise agreement with Marriott (rather than reject it), (iv)
reject the Debtors' hotel management agreement with Interstate,
effective after confirmation of a plan (rather than to assume it
on modified terms) and (v) reject the Debtors' asset and
development management agreements with SGR Asset Management, LLC.
The Debtors accepted Goldman's proposed revisions to the Initial
Plan in exchange for Goldman's agreement (i) to support the
Debtors' revised plan and (ii) to enter into a mutual release
agreement among the Debtors (including without limitation their
general partners, David O'Halloran, Patrick Murphy, Niall McFadden
and Patrick Kelly as limited guarantors of the Debtors'
indebtedness to Goldman and SGR Asset Management, LLC) and Goldman
(including Archon and Sandelman Partners) as well as all the
parties' successors, assigns, subsidiaries and present and former
affiliates, officers, directors, employees, agents, consultants,
professionals, and attorneys.
A full-text copy of the Second Amended Disclosure Statement dated
Sept. 20, is available for free at:
http://bankrupt.com/misc/RQB_secondamendeddisclosure.pdf
A copy of the confirmation order is available at:
http://bankrupt.com/misc/RQB_planorder.pdf
About RQB Resort LP
RQB Resort LP and RQB Development LP own Florida's Sawgrass
Marriott Resort, the site of the U.S. PGA Tour's Tournament
Players Championship.
Ponte Vedra Beach, Florida-based RQB Resort, LP, aka Sawgrass
Marriott Resort & Cabana Club, filed for Chapter 11 bankruptcy
protection (Bankr. M.D. Fla. Case No. 10-01596) on March 1, 2010.
The Company's affiliate -- RQB Development, LP, aka Sawgrass
Marriott Golf Villas & Spa -- filed a separate Chapter 11
petition. The Company estimated its assets and debts at
$100 million to $500 million in its Chapter 11 petition.
SAAB AUTOMOBILE: Administrator Tries Wants to End Insolvency Case
-----------------------------------------------------------------
Eric Hornbeck at Bankruptcy Law360 reports that the insolvency
administrator of Swedish Automobile NV's Saab Automobile AB unit
has asked a Swedish court to terminate the troubled carmaker's
voluntary insolvency proceedings, which it sought while trying to
salvage a deal to sell a majority stake to Chinese investors,
Swedish Automobile said Friday.
Law360 relates that the administrator, Guy Lofalk, filed an
application to end the voluntary reorganization process for Saab
and two subsidiaries, Saab Automobile Powertrain AB and Saab
Automobile Tools AB, the company and the court said.
About Saab Automobile
Saab Automobile AB is a Swedish car manufacturer owned by Dutch
automobile manufacturer Swedish Automobile NV, formerly Spyker
Cars NV.
Saab has sought creditor protection to give it time until a
promised investment of EUR245 million from car firms Pangda
Automobile Trade Co. Ltd. and Zhejiang Youngman Lotus Automobile
gets the nod from Chinese authorities.
Saab on Sept. 19 said it has arranged EUR70 million (US$96
million) in bridge financing with the help of a Chinese
guarantee.
Swedish Automobile N.V. disclosed that Saab Automobile AB and its
subsidiaries Saab Automobile Powertrain AB and Saab Automobile
Tools AB received approval for their proposal for voluntary
reorganization from the Court of Appeal in Gothenburg,
Sweden on Sept. 20. The purpose of the voluntary
reorganization process is to secure short-term stability while
simultaneously attracting additional funding, pending the inflow
of the equity contributions by Pang Da and Youngman.
SAPPHIRE POWER: S&P Assigns 'BB' Rating to $185MM Sr. Term Loan
---------------------------------------------------------------
Standard & Poor's Rating Services assigned its 'BB' long-term
rating to Sapphire Power Finance LLC's (Sapphire) $185 million
senior-secured term loan due in October 2018 and $25 million
senior-secured revolving credit facility due in October 2016. The
outlook is stable. The recovery rating is '1', indicating a very
high (90% to 100%) probability of recovery.
"The 'BB' rating reflects our view of the limited geographical and
technological diversification of the assets, exposure to merchant
capacity markets starting in June 2015, and the assumption of all
operating risks," said Standard & Poor's credit analyst Grace
Drinker. "However, the rating is supported by debt service
coverage levels that remain well above 1.0x in various scenarios
and that most of the plants are located in high-priced segments of
the PJM Independent System Operator capacity and energy markets,"
Ms. Drinker added.
Note proceeds were used to purchase a 778.4 megawatt (MW)
portfolio of seven natural-gas fired power plants located in
Pennsylvania, New Jersey, and Massachusetts as well as to pay for
a cash-funded operating and major maintenance reserve and fees
expenses associated with this transaction.
Sapphire has purchased a 778.4 MW portfolio of natural-gas fired
power plants in:
York, Pa.: 51.0 MW;
Camden, N.J.: 151.5 MW;
Newark Bay, N.J.: 128.5 MW;
Elmwood Park, N.J.: 70.0 MW;
Pedricktown, N.J.: 125.0 MW;
Bayonne, N.J.: 163.0 MW; and
Dartmouth, Mass.: 89.4 MW.
The portfolio mainly comprises combined-cycle power plants (CCGTs)
that sell power into the PJM Independent System Operator (ISO)
capacity and energy markets. The PJM ISO assets (York, Camden,
Newark Bay, Elmwood Park, Pedricktown, and Bayonne) make up 89% of
the overall nameplate capacity of the portfolio, and contribute
approximately 100% of aggregate EBITDA through the debt tenor. The
remaining plant, Dartmouth, includes a combined cycle and peaking
facility that sells into the New England ISO.
SCOTTO RESTAURANT: Taps Henderson Law as Bankruptcy Counsel
-----------------------------------------------------------
Scotto Restaurant Group LLC asks the U.S. Bankruptcy Court for the
Western District of North Carolina for permission to employ
Henderson Law Firm as bankruptcy counsel to perform the legal
services that will be necessary during this Chapter 11 case.
The principal attorneys and paralegals designated to represent the
Debtor and their current standard hourly rates are:
James H. Henderson, Esq. $340
Stacy C. Cordes, Esq. $275
Mollie Thorn James, Esq. $250
Haley Mathews Jonas, Esq. $240
The Debtor assures the Court that the firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
About Scotto Restaurant
Denver, North Carolina-based Scotto Restaurant Group, LLC, fka
Scotto Holdings, LLC, operates 7 Firehouse Subs franchise
locations and has approximately 100 employees.
Three creditors placed Scotto Restaurant Group, LLC, fka Scotto
Holdings LLC, in bankruptcy by filing an involuntary Chapter 11
petition (Bankr. W.D.N.C. Case No. 11-40506) on Aug. 11, 2011.
The petitioning creditors are Lester B. High, William Holmes and
Donald L. Myers. They allege to be owed $1.85 million in the
aggregate on account of unsecured promissory notes. The
petitioning creditors are represented by Kiah T. Ford, IV, Esq.,
at Parker, Poe, Adams & Bernstein LLP, as counsel. Judge George
R. Hodges oversees the case.
James H. Henderson, Esq., at The Henderson Law Firm, in Charlotte,
N.C., represents the Debtor as counsel.
SEMGROUP CORP: All American Pipeline Reveals Proposal to Buy Firm
-----------------------------------------------------------------
Plains All American Pipeline disclosed that on October 6, 2011 it
submitted a proposal to SemGroup Corporation to acquire all of the
outstanding shares of SemGroup for $24.00 per share in cash. The
proposal was made orally and in a letter delivered to SemGroup's
President and Chief Executive Officer Norman Szydlowski. PAA's
proposal is subject to customary documentation and regulatory
approvals, but is not subject to a financing contingency.
Under its terms, the proposal represents a premium of
approximately 16% to SemGroup's 10-day average closing price
through October 5, 2011, the day immediately prior to PAA's
proposal, and a premium of approximately 20% over the 10-day
average closing price immediately prior to SemGroup's August 31,
2011 announcement of its pending asset sale to NGL Energy Partners
LP. Following SemGroup's rejection of and refusal to engage in
constructive discussions regarding the October 6 proposal, PAA
today sent a letter to SemGroup expressing its continued interest
in pursuing the acquisition. PAA is making the letter public in
order to inform SemGroup's stockholders and other stakeholders of
the proposal and PAA's commitment to completing a transaction on
the proposed terms.
"We are disappointed that SemGroup's Board of Directors has
refused to engage in constructive discussions with us regarding a
possible transaction," said Greg L. Armstrong, PAA's Chairman and
Chief Executive Officer. "Since SemGroup's emergence from
bankruptcy in November 2009, its assets and businesses have
consistently and materially under-performed the projections in its
Plan of Reorganization. We believe that the attractive and
certain value we are proposing to deliver to SemGroup's
stockholders is greater than any value that might be created on a
reasonable timetable from any of SemGroup's other strategic
alternatives, including the value attributable to a successful
completion of SemGroup's proposed initial public offering of its
newly-formed master limited partnership, Rose Rock Midstream,
L.P., and its announced transaction with NGL Energy Partners, the
expected value of which are already reflected in SemGroup's stock
price. Notably, our proposal incorporates and offers to
SemGroup's stockholders benefits from cost savings and synergies
that we believe PAA is uniquely positioned to realize upon
consummation of the proposed transaction."
About SemGroup L.P.
SemGroup, L.P. -- http://www.semgrouplp.com/-- is a midstream
service company that provides diversified services for end users
and consumers of crude oil, natural gas, natural gas liquids and
refined products. Services include purchasing, selling,
processing, transporting, terminalling and storing energy.
SemGroup serves customers in the United States, Canada, Mexico and
Wales.
SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection (Bankr. D. Del. Case No. 08-11525) on July 22, 2008.
John H. Knight, Esq., L. Katherine Good, Esq. and Mark
D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller,
Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil,
Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A.
Mayer, Esq., at Weil Gotshal & Manges LLP, represented the Debtors
in their restructuring efforts. Kurtzman Carson Consultants
L.L.C. served as the Debtors' claims agent. The Blackstone Group
L.P. and A.P. Services LLC acted as the Debtors' financial
advisors.
Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represented the Debtors' prepetition
lenders.
SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act.
SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts.
SemGroup LP won confirmation from the Bankruptcy Court of its
Fourth Amended Plan of Reorganization on Oct. 28, 2008. The
Plan, which distributed more than $2.5 billion in value to
stakeholders, was declared effective on November 30, 2008.
SHILOH INDUSTRIES: Moody's Upgrades CFR to B1; Outlook Stable
-------------------------------------------------------------
Moody's Investors Service upgraded Shiloh Industries, Inc.'s
("Shiloh") Corporate Family Rating ("CFR") to B1 from B2 and
Probability of Default ("PDR") rating to B2 from B3. In a related
action, the company's amended and restated $80 million revolving
credit facility due April 2016 was assigned a Ba2 rating. Moody's
also assigned a speculative grade liquidity rating of SGL-3 to
Shiloh. The rating outlook remained stable.
RATINGS RATIONALE
The rating upgrade to a B1 CFR reflects Shiloh's strong financial
metrics and Moody's expectation that improved cost structure,
lower break-even levels, and business wins will continue to yield
strong sustained operating results for Shiloh even if macro
economic conditions pressure the automotive production volumes
from their current levels. The upgrade also recognizes the
recovery in auto production levels, lack of debt maturities over
the next few years, the expectation for continued high plant
utilization rates, and a conservative financial philosophy at
Shiloh. However, Moody's notes that the company's small revenue
base, particularly the modest size of the value added portion
(defined as sales minus raw materials cost), significant customer
concentration with General Motors and Chrysler accounting for
nearly half of revenues, and the exposure to the cyclical
automotive industry constrain the company's rating. A significant
majority of steel used by Shiloh is purchased through customers'
purchase programs, thus limiting exposure risk to price
fluctuations and therefore Moody's estimates and monitor the
portion of revenues which is controllable by the company.
Moody's rated the senior secured revolving credit facility at Ba2.
The two-notch uplift from the B1 CFR results from (i) Moody's
expectations for better than average family recovery in a
bankruptcy scenario (ii) and a significant amount of unsecured
liabilities (predominantly comprised of trade claims and
underfunded pension liabilities which are contractually
subordinated to the revolver in a bankruptcy scenario) relative to
the secured debt levels.
The assignment of SGL-3 speculative grade liquidity rating
signifies expectation for an adequate liquidity profile for the
next 12 to 15 months supported primarily by an amended and
restated $80 million revolving credit facility due April 2016.
Shiloh keeps minimal cash balances and is reliant on the facility,
which has been drawn consistently over the past few years to
address seasonal working capital needs. After $30.6 million of
borrowings and $1.7 million of letter of credit as of July 31,
2011, the company had approximately $47.7 million of availability
remaining. Moody's expects Shiloh to maintain adequate
availability under its revolver as free cash flow is applied
towards revolving credit outstandings, with adequate covenant
cushion expected to ensure access.
The stable outlook anticipates the company to be able to sustain
strong credit metrics given cost restructuring benefits even in
the case of a modest decline in light vehicle production levels.
Shiloh's solid market position as a Tier 1 and Tier 2 supplier of
engineered welded blanks, stampings and assemblies, customer pass-
through arrangements for raw materials, strong credit metrics for
the rating category, and management's demonstrated commitment to
low debt levels support the CFR at the B1 level.
While unlikely in the near-term, Moody's could consider a positive
outlook or an upgrade with improved customer and end-market
diversity, bigger revenue base, sustained improvement in auto
build rates, improvement in absolute free cash flow, and continued
adherence to maintaining a conservative leverage profile. However,
Moody's could consider a negative outlook or a downgrade if there
were (i) a sharp reversal in the recovery of automotive end
markets, (ii) competitive challenges as contracts under new
automobile platforms are awarded, (iii) a sustained increased of
leverage from a use of cash outside of current expectations, or
(iv) a deteriorating liquidity profile.
These ratings/assessments have been affected:
Corporate Family Rating, upgraded to B1 from B2;
Probability of Default Rating, upgraded to B2 from B3;
$80 million senior secured revolving credit facility due April
2016, assigned Ba2 (LGD2, 20%);
Speculative Grade Liquidity Rating, assigned SGL-3.
The outlook remains stable.
The principal methodology used in rating Shiloh Industries, Inc.
was the Global Automotive Supplier Industry Methodology published
in January 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.
Shiloh Industries, Inc., headquartered in Valley City, Ohio, is a
manufacturer of first operation blanks, engineered welded blanks,
complex stampings and modular assemblies for the automotive, heavy
truck and other industrial markets. Shiloh had approximately $500
million of revenues for the twelve month period ending July 31,
2011.
SIGNATURE STYLES: Ex-Spiegel Catalog Owner's Exclusivity Extended
-----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the former owner of the Spiegel catalog sought and
was granted an extension until Jan. 4 of the exclusive right to
propose a liquidating Chapter 11 plan. The company filed for
bankruptcy protection on June 6 and completed the sale of the
business to the secured lender on Sept. 12.
About Signature Styles
Signature Styles LLC, owner of the Spiegel catalog, filed a
Chapter 11 petition (Bankr. D. Del. Case No. 11-11733) on June 6,
2011, along with a deal to sell the business to affiliates of the
current owners and lenders.
New York-based Signature Styles, which filed for bankruptcy
together with its affiliates, disclosed assets of $48.6 million
and debt of $867.6 million. It purchased the Spiegel business for
$21.7 million at a foreclosure sale in June 2009. Debt includes
$37.2 million owing on a secured term loan and revolving credit.
Unsecured debt totals $35.3 million, which include $9.8 million
owing to trade suppliers and $23.2 million in customer
obligations. The lenders and owners are funds affiliated with
Patriarch Partners LLC.
Christopher A. Ward, Esq., at Polsinelli Shughart PC, in
Wilmington, Delaware, serves as counsel to the Debtor. Western
Reserve Partners LLC serves as investment bankers. Epiq Bankruptcy
Solutions, LLC, is the claims and notice agent.
A fund affiliated with Patriarch Partners LLC has an agreement to
buy the business in return for the assumption of specified debt,
including $30 million owing on the term loan and revolving credit.
The buyer also will honor some customer obligations. The
stalking-horse purchase agreement requires approval of bidding
procedures by July 7 and approval of a sale by Aug. 4.
Roberta A. DeAngelis, U.S. Trustee for Region 3 appointed the
Official Committee of Unsecured Creditors of Signature Styles LLC.
A trustee or examiner has not been appointed to the case.
SNOQUALMIE ENTERTAINMENT: S&P Raises Issuer Credit Rating to 'B'
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its issuer credit rating
on King Co., Wash.-based Snoqualmie Entertainment Authority (the
Authority) to 'B' from 'B-'. "We also raised our rating on
Snoqualmie's senior unsecured debt to 'B' from 'B-'. The
rating outlook is stable," S&P related.
The Snoqualmie Entertainment Authority is an unincorporated
instrumentality of the Snoqualmie Indian Tribe (the Tribe),
created to develop and operate the Snoqualmie Casino.
"The upgrade reflects a longer operating history that demonstrates
the Snoqualmie Casino's ability to generate a level of EBITDA
sufficient to comfortably meet fixed charges, including tribal
distributions," explained Standard & Poor's credit analyst Carissa
Schreck. "Additionally, the upgrade reflects our belief that the
Authority will maintain an adequate cushion relative to financial
maintenance covenants in the furniture, fixtures, and equipment
(FF&E) facility," S&P said.
"While there remains some uncertainty surrounding the Authority's
longer term development plans, as well as the Tribe's longer term
financial policy regarding distributions," added Ms. Schreck, "we
believe Snoqualmie's credit and liquidity profiles support the
higher rating."
The 'B' issuer credit rating reflects the Authority's narrow
business position as an operator of a single casino property, high
debt leverage, and some uncertainty around the Tribe's longer term
financial policy and expansion plans. These risks are only
somewhat tempered by continued improvement in operating
performance, which has resulted in credit measures and a liquidity
profile in line with the 'B' rating.
SOLAR THIN: Agrees to Convert $836,506 Debt Into 83.6MM Shares
--------------------------------------------------------------
Solar Thin Films, Inc., entered into agreements with three of the
Company's largest creditors granting each of the Entities an
option to purchase the debt which was owed to said creditors by
the Company. These Entities entered into agreements with the
Company in which the Company granted to each of the Entities an
option to convert an aggregate of $836,506 of the Company's debt
into an aggregate of up to 83,650,651 shares of the Company's
common stock at a conversion price of $0.01 per share. In
addition, with respect to two of those creditors, the Company
remains liable for the payment of any portion of the Company's
indebtedness if the consideration for the option is not paid to
the creditor regardless of whether such option is exercised.
Management has been advised that during the month of October
another entity will enter into an agreement with the Company's
largest creditor granting the Entity an option to purchase the
debt which was owed to that creditor by the Company. This Entity
intends to enter into an agreement with the Company in which the
Company grants to the Entity an option to convert an aggregate of
$1,176,466 of the Company's debt into an aggregate of up to
39,215,533 shares of the Company's common stock at a conversion
price of $0.03 per share.
If all of the options are exercised, this will be a major step in
cleaning up the Company's balance sheet. In addition, the Company
intends to restructure into an international developer and
syndicator of solar power projects.
Pursuant to the Agreements, as of Oct. 19, 2011, the Company has
issued an aggregate of 18,745,400 shares of Common Stock pursuant
to the conversion of an aggregate of $187,454 the Company's debt.
In addition, on Aug. 31, 2011, the Company issued to its President
and CEO Robert M. Rubin 12,000,000 shares of its restricted common
stock, par value $.01 per share in satisfaction of $360,000 in
past due salary for services provided to us between Jan. 1, 2009,
and Dec. 31, 2010.
About Solar Thin
Headquartered in New York, Solar Thin Films, Inc., engages in
the design, manufacture and installation of thin-film amorphous
silicon ("a-Si") photovoltaic turnkey manufacturing facilities.
RBSM LLP, in New York, N.Y., expressed substantial doubt about
Solar Thin Films, Inc.'s ability to continue as a going concern,
following the Company's 2009 results. The independent auditors
noted that the Company has suffered recurring losses from
operations.
The Company's balance sheet at Sept. 30, 2010, showed
$2.05 million in total assets, $5.40 million in total liabilities,
and a stockholders' deficit of $3.35 million.
SOLYNDRA LLC: Auction Delayed to Nov. 18
----------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the sale of Solyndra LLC is being delayed. In the
wake of the Sept. 6 Chapter 11 filing, the bankruptcy court in
Delaware approved procedures calling for an auction on Oct. 27,
with bids due Oct. 25 and a hearing to approve the sale on Nov. 2.
A revised schedule posted on the court docket now calls for bids
on Nov. 16, followed by a Nov. 18 auction and a hearing on Nov. 22
for approval of the sale.
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 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. AlixPartners LLP serves as noticing claims and
balloting agent. Imperial Capital LLC serves as the company's
investment banker and financial adviser. The Debtors also tapped
former Massachusetts Governor William F. Weld, now with the law
firm McDermott Will & Emery, to represent the company in
government investigations and related litigation.
Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven
unsecured creditors to serve on the Official Committee of
Unsecured Creditors of Solyndra LLC.
Solyndra is at least the fourth solar company to seek court
protection from creditors since August 2011. Other solar firms
are Evergreen Solar and start-up Spectrawatt Inc., both of which
filed in August, and Stirling Energy Systems Inc., which filed for
Chapter 7 bankruptcy late in September.
Solyndra successfully opposed a motion by the U.S. Trustee for
appointment of a Chapter 11 trustee to oust incumbent management.
Instead, the judge authorized hiring R. Todd Neilson to serve as
chief restructuring officer.
SOLYNDRA LLC: Paid $20,000 to Lobbyist as Bankruptcy Loomed
-----------------------------------------------------------
Carla Main at Bloomberg News at Bloomberg News reports that
Solyndra LLC paid a Washington firm $20,000 to lobby the U.S.
Congress as the company approached bankruptcy, according to
federal documents.
According to the report, Glover Park Group LLC registered as
Solyndra's lobbyist in July, a little more than a month before the
Fremont, California-based maker of solar panels closed its doors,
firing 1,100 workers. The amount paid to Glover Park was listed
on federal lobbying disclosure forms due yesterday and posted on
the Senate Web site.
Bloomberg relates that Republicans and Democrats on the House
energy committee have criticized Solyndra Chief Executive Officer
Brian Harrison for presenting an optimistic picture of the
Company's financial health in meetings with them in July. Glover
Park helped Harrison convey a similar message to the public,
hosting a press conference for him at its Washington offices on
July 21.
Mr. Harrison, according to the report, invoked his Fifth Amendment
rights under the Constitution not to make self-incriminating
statements and refused to answer questions about the loan
guarantee at a Sept. 23 House hearing. He stepped down as chief
this month.
Solyndra, the report relates, previously reported spending
$480,000 in the first half of the year to lobby Congress,
according to records filed with the Senate. Besides Glover Park,
the company hired five additional firms to lobby on its behalf
since 2009, spending at least $1.3 million on issues relating to
its loan guarantee and other policies promoting solar power,
according to the disclosure records.
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 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. AlixPartners LLP serves as noticing claims and
balloting agent. Imperial Capital LLC serves as the company's
investment banker and financial adviser. The Debtors also tapped
former Massachusetts Governor William F. Weld, now with the law
firm McDermott Will & Emery, to represent the company in
government investigations and related litigation.
Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven
unsecured creditors to serve on the Official Committee of
Unsecured Creditors of Solyndra LLC.
Solyndra is at least the fourth solar company to seek court
protection from creditors since August 2011. Other solar firms
are Evergreen Solar and start-up Spectrawatt Inc., both of which
filed in August, and Stirling Energy Systems Inc., which filed for
Chapter 7 bankruptcy late in September.
TANDUS FLOORING: Moody's Affirms 'B2' CFR; Outlook Positive
-----------------------------------------------------------
Moody's Investors Service has revised the rating outlook of Tandus
Flooring, Inc. (Tandus) to positive from stable. In addition, all
other ratings were affirmed, including the B2 corporate family
rating.
The following ratings were affirmed:
Corporate family rating at B2;
Probability of default rating at B2; and
The $188 million senior secured term loan B due May 2014 at B2
(LGD4, 57% from 56%).
RATINGS RATIONALE
The change in outlook to positive from stable reflects Moody's
expectation that credit metrics will continue to improve in 2012,
notably its debt-to-EBITDA of 4.1x and interest coverage of 3.5x
as of July 30, 2011. Moody's anticipates that Tandus will generate
modest cash flows over the near term which will provide the
opportunity to make additional debt paydowns. Further, Moody's
anticipates moderate growth in earnings largely from renovations
taking place in the corporate retail segment despite weakness in
certain government related end markets.
The B2 corporate family rating of Tandus reflects its high
leverage and small size relative to competitors. Further, the
rating reflects a highly competitive environment in the North
American corporate and institutional floor covering sector and
weak macroeconomic conditions that will likely weigh on sales
within segments of the floor covering industry over the near term.
Conversely, the rating benefits from the company's solid credit
metrics relative to rating peers, its commitment to debt
reduction, relatively stable EBITDA margins, and a good liquidity
profile, supported by consistent cash generation and conservative
cash balances.
A sustained improvement in credit metrics, while maintaining its
good liquidity profile, would need to be evidenced for an upgrade
to offset the company's relatively small size and private equity
ownership. Moody's would expect Debt/EBITDA to be permanently
reduced below 4.0x (including Moody's standard adjustments) prior
to an upgrade. Although Moody's does not anticipate negative
ratings pressure in the near term, a deterioration in liquidity or
credit metrics such that Debt/EBITDA approaches 6.0x or interest
coverage falls below 1.5x would likely lead to a negative rating
action.
Tandus is a leading manufacturer of vinyl-backed floor covering
products, including six-foot roll carpet, modular carpet tile and
high-style broadloom carpets. The company is a wholly-owned
subsidiary of Tandus Group, Inc, whose capital stock is majority
owned by funds managed by Oaktree Capital Management, LLC, through
the OCM Principal Opportunities Fund II, L.P. and BancAmerica
Capital Investors II, L.P. The company's revenues for the last
twelve months ending July 30, 2011 were approximately $325
million.
The principal methodology used in rating Tandus 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.
TRAILER BRIDGE: Ivy Suter Resigns as Chief Executive Officer
------------------------------------------------------------
Ivy Barton Suter resigned as the Chief Executive Officer of
Trailer Bridge, Inc. Ms. Suter's resignation will be treated as a
termination without cause under the terms of her Employment
Agreement dated Aug. 26, 2009.
Effective Oct. 21, 2011, William G. Gotimer, Jr., Executive Vice
President, General Counsel and Secretary, and Mark Tanner, Vice
President of Administration and Chief Financial Officer, were
appointed as co- Chief Executive Officers.
About Trailer Bridge
Jacksonville, Fla.-based Trailer Bridge, Inc., is an integrated
trucking and marine freight carrier that provides freight
transportation between the continental U.S., Puerto Rico and the
Dominican Republic.
BDO USA, LLP, in Miami, Fla., expressed substantial doubt about
Trailer Bridge's ability to continue as a going concern. The
independent auditors noted that the Company has a significant
working capital deficit resulting from the current maturities of
long term debt.
The Company reported a net loss of $2.3 million on $118.2 million
of revenues for 2010, compared with net income of $2.6 million on
$114.3 million of revenues for 2009.
The Company's balance sheet at June 30, 2011, showed
$105.62 million in total assets, $119.54 million in total
liabilities, and a $13.92 million total stockholders' deficit.
Bankruptcy Warning
If the Company's cash flow and capital resources are insufficient
to fund its debt service obligations, including refinancing the
Notes due Nov. 15, 2011, the Company could face substantial
liquidity problems and might be forced to reduce or delay capital
expenditures, dispose of material assets or operations, seek to
obtain additional equity capital, restructure or refinance its
indebtedness. In the event that the Company is required to
dispose of material assets or operations to meet its debt service
obligations, the Company said it cannot be sure as to the timing
of those dispositions or the proceeds that it would realize from
those dispositions. Further, the Company said it cannot provide
assurance that it will be able to restructure or refinance any of
its indebtedness or obtain additional financing, given the
uncertainty of prevailing market conditions from time to time.
Such alternative measures may not be successful and may not permit
the Company to meet its scheduled debt service obligations. In
such an event, the Company may be forced to file for protection
under federal bankruptcy laws.
If the Company is able to restructure or refinance its
indebtedness or obtain additional financing, the Company
anticipates that the economic terms on which such indebtedness is
restructured, refinanced or obtained will not be as favorable to
the Company as its current indebtedness and may include an equity
component that could include a change of control.
* * *
As reported by the TCR on May 25, 2011, Moody's Investors Service
downgraded Trailer Bridge, Inc.'s Corporate Family and Probability
of Default ratings two notches to Caa2 from B3. The ratings
downgrade was prompted by Trailer Bridge's upcoming maturities
comprising the majority of the company's debt structure over the
next twelve months combined with insufficient liquidity sources to
satisfy these obligations absent a refinancing.
In the June 15, 2011, edition of the TCR, Standard & Poor's
Ratings Services lowered its long-term corporate credit rating on
Jacksonville, Fla.-based Trailer Bridge Inc. to 'CCC' from 'B-'.
"At the same time, we lowered our rating on the company's senior
secured debt to 'CCC' (the same as the new corporate credit
rating), from 'B-' and revised the recovery rating to '4' from
'3', indicating our expectations of an average (30%-50%) recovery
in the event of a payment default. The outlook is developing,"
S&P said.
S&P related, "Our ratings on Trailer Bridge reflect its weak
liquidity, highly leveraged financial profile, concentrated end-
market demand, and participation in the capital-intensive and
competitive shipping industry. Positive credit factors include the
less-cyclical nature of demand for consumer staples that Trailer
Bridge mostly carries and barriers to entry due to the Jones Act
(which regulates intra-U.S. shipping). We categorize Trailer
Bridge's business risk profile as vulnerable, its financial risk
profile as highly leveraged, and liquidity as weak."
UNIGENE LABORATORIES: Completes Dosing in Phase 2 Study of PTH
--------------------------------------------------------------
Unigene Laboratories, Inc., announced that all patients have
completed the course of therapy in the Phase 2 study of an
experimental oral parathyroid hormone (PTH) analog for the
treatment of osteoporosis in postmenopausal women. Unigene is
developing its oral PTH in collaboration with GlaxoSmithKline as
part of an exclusive worldwide licensing agreement.
Ashleigh Palmer, president and chief executive officer of Unigene
Laboratories said, "Completing all treatment rounds and patient
final visits in the Phase 2 study of our proprietary oral
formulation of the recombinantly produced PTH analog is a key
milestone in the advancement of this investigational product for
women with postmenopausal osteoporosis. We now look forward to
assessing the data and presenting top-line results by year-end,
while working closely with GSK on the next stages of development."
The Phase 2 study of Oral PTH for the treatment of osteoporosis in
postmenopausal women is a multicenter, double blind with respect
to placebo, randomized, repeat dose placebo controlled study that
includes an open label comparator arm of the Forsteo injectable
formulation. The primary endpoint is an increase in bone mineral
density (BMD) at the lumbar spine in subjects at 24 weeks in 93
postmenopausal osteoporotic women following once daily treatment
with the orally delivered PTH analog compared to baseline.
Secondary endpoints will evaluate biochemical markers of bone
formation and resorption, as well as the safety, tolerability and
pharmacokinetics of the oral formulation.
The Company expects to report top-line results before year-end.
About Unigene
Unigene Laboratories, Inc. OTCBB: UGNE) -- http://www.unigene.com/
-- is a biopharmaceutical company focusing on the oral and nasal
delivery of large-market peptide drugs.
Grant Thornton LLP, in New York, expressed substantial doubt about
Unigene Laboratories' ability to continue as a going concern
following the Company's 2009 results. The firm noted that the
Company has incurred a net loss of $13,400,000 during the year
ended Dec. 31, 2009 and has an accumulated deficit of
approximately $143,000,000 as of Dec. 31, 2009. As of that
date, the Company's current liabilities exceeded its current
assets by $1,251,000 and its total liabilities exceeded total
assets by $30,442,000.
The Company reported a net loss of $27.86 million on $11.34
million of revenue for the year ended Dec. 31, 2010, compared with
a net loss of $13.37 million on $12.79 million of revenue during
the prior year.
The Company's balance sheet at June 30, 2011, showed $21.79
million in total assets, $76.33 million in total liabilities and a
$54.53 million total stockholders' deficit.
UNITED STATES: Ratings May Be Cut Again by Yearend, Merrill Says
----------------------------------------------------------------
Walter Brandimarte, writing for Reuters, reports that Bank of
America Merrill Lynch said in a research note published Friday the
United States will likely suffer the loss of its triple-A credit
rating from another major rating agency by the end of this year
due to concerns over the deficit. The trigger would be a likely
failure by Congress to agree on a credible long-term plan to cut
the U.S. deficit.
According to Reuters, the bipartisan congressional committee
formed to address the deficit -- known as the "super committee" --
needs to break an impasse between Republicans and Democrats to
reach a deal to reduce the U.S. deficit by at least $1.2 trillion
by Nov. 23. If a majority of the 12-member committee fails to
agree on a plan, $1.2 trillion in automatic spending cuts will be
triggered, beginning in 2013. Those automatic cuts, mostly in
discretionary spending, would weigh further on a fragile U.S.
economy, Merrill said. In the same report, the bank reduced its
2012 and 2013 growth forecasts for the United States to 1.8% and
1.4%, respectively.
If there were a downgrade, it was not clear which ratings agency
would move first.
In August, Standard & Poor's cut the country's ratings to AA on
concerns about the government's budget deficit and rising debt
burden. A second loss of the country's top credit rating would be
an additional blow to the sluggish U.S. economy, Merrill said,
according to Reuters.
VISTEON CORP: Venue of Avoidance Suit v. GBSI is Proper
-------------------------------------------------------
Judge Christopher S. Sontchi denied the request of Governor
Business Solutions, Inc., to dismiss an avoidance action commenced
by Visteon Corp. for improper venue or, in the alternative, to
transfer venue of the action to the Eastern District of Michigan.
Judge Sontchi said 28 U.S.C. Section 1409 expressly allows a
debtor to file an avoidance action in the district in which its
bankruptcy case is pending. In addition, applying the 12 factor
test established by the Third Circuit, the Court denies the motion
to transfer venue.
In May 2011, Visteon filed a complaint against GBSI, seeking to
avoid and recover certain transfers as preferences under section
547 of the Bankruptcy Code. Visteon also alleges that the
transfers were fraudulent and are avoidable under sections
544(b)(1) and 548(a)(1) of the Code. Visteon argues that it is
entitled to recover the avoided transfers under section 550(a) of
the Bankruptcy Code.
GBSI responded to the complaint by filing a motion to dismiss for
improper venue or for change of venue to the Eastern District of
Michigan.
A copy of Judge Sontchi's opinion is available at
http://is.gd/Z0MivOfrom Leagle.com.
About Visteon Corp
Headquartered in Van Buren Township, Michigan, Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is an automotive supplier
that designs, engineers and manufactures innovative climate,
interior, electronic and lighting products for automakers. The
Company has corporate offices in Van Buren Township, Michigan
(U.S.); Shanghai, China; and Kerpen, Germany. It has facilities
in 27 countries and employs roughly 35,500 people. The Company
disclosed assets of US$4,561,000,000 and debts of US$5,311,000,000
as of March 31, 2009.
Visteon Corporation and 30 of its affiliates filed for Chapter 11
protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786
through 09-11818). Judge Christopher S. Sontchi oversees the
Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein,
Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in
Chicago, Illinois, represented the Debtors in their restructuring
effort. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy
P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang
Ziehl & Jones LLP, in Wilmington, Delaware, served as the Debtors'
local counsel. The Debtors' investment banker and financial
advisor were Rothschild Inc. The Debtors' notice, claims, and
solicitation agent was Kurtzman Carson Consultants LLC. The
Debtors' restructuring advisor was Alvarez & Marsal North America,
LLC.
The Bankruptcy Court entered an order on Aug. 31, 2010, confirming
the Fifth Amended Plan of Reorganization of Visteon Corporation
and its debtor-affiliates. Visteon emerged from Chapter 11 on
Oct. 1.
* * *
In December 2010, Standard & Poor's Ratings Services assigned its
'B+' corporate credit rating on reorganized Visteon. Moody's
Investors Service gave Visteon Corporate Family and Probability of
Default Ratings of 'B1'.
VISUALANT INC: Amends 15.3 Million Common Shares Offering
---------------------------------------------------------
Visualant, Inc., filed with the U.S. Securities and Exchange
Commission Amendment No.1, 2 and 3 to Form S-1 registration
statement relating to the resale by Seaside 88 Advisors, LLC,
Gemini Master Fund Ltd, Ascendiant Capital Partners, LLC, et al.,
of up to 15,340,361 shares of the Company's common stock, $.001
par value per share.
The Company will not receive any of the proceeds from the sale of
the common stock by the selling security holders.
The Company's common stock trades on the OTCBB under the symbol
"VSUL". On Aug. 22 , 2011, the last reported sale price for the
Company's common stock as reported on OTCBB was $0. 15 per share.
Full-text copies of Amendments are available for free at:
http://is.gd/A0hLEH
http://is.gd/UBAnd9
http://is.gd/y97K7n
About Visualant Inc.
Seattle, Wash.-based Visualant, Inc., was incorporated under the
laws of the State of Nevada on October 8, 1998. The Company
develops low-cost, high speed, light-based security and quality
control solutions for use in homeland security, anti-
counterfeiting, forgery/fraud prevention, brand protection and
process control applications.
As reported in the Troubled Company Reporter on Jan. 4, 2011,
Madsen & Associates CPA's, Inc., Salt Lake City, expressed
substantial doubt about Visualant, Inc.'s ability to continue as a
going concern, following the Company's results for the fiscal year
ended September 30, 2010. The independent auditors noted that the
Company will need additional working capital for its planned
activity and to service its debt.
The Company's balance sheet at June 30, 2011, showed $4.70 million
in total assets, $5.96 million in total liabilities, $39,072 in
noncontrolling interest and a $1.29 million total stockholders'
deficit.
VUZIX CORP: Secures License to See-Through Optics Tech from Nokia
-----------------------------------------------------------------
Vuzix Corporation entered into a technology license agreement with
Nokia to develop and produce see-through waveguide optics for use
in near-eye display systems based on Nokia's proprietary see-
through (Exit Pupil Expanding) EPE optics technology. The
agreement, combining Vuzix and Nokia technology, is expected to
accelerate the development and introduction of new NED products to
the market.
Under the agreement, Vuzix will perform on-going research and
development and is expected to manufacture and bring to market
components and products containing the licensed technology. In
addition, Vuzix will provide Nokia with access to its products and
components which incorporate the licensed technology.
The see-through EPE technology has been developed and prototyped
by Nokia over the past decade in various configurations. Vuzix
believes that it has the potential to form the basis for sunglass-
styled video eyewear, which could be manufactured in high volume
and appeal to mass consumer markets.
"We believe that Nokia's EPE technology solves a long missing
piece in the NED business for creating sunglass-style video
eyewear," said Paul Travers, Vuzix President and CEO. He added,
"Integrate this Nokia technology with Vuzix's advanced display
engine developments with partners like Fraunhofer IPMS, and we
expect to be able to offer the video glasses that Hollywood and
Sci-Fi writers have only been able to imagine."
Jyri Huopaniemi, Director and Head of the Nokia Research Center
Media Technologies Laboratory said, "Vuzix' specialized expertise
in video eyewear will be critical in driving the further
development of EPE technology and ensuring its integration in new
consumer products. We are excited to be enabling a new era of
innovation."
About Vuzix Corp.
Rochester, New York-based Vuzix Corporation (TSX-V: VZX)
OTC BB: VUZI) -- http://www.vuzix.com/-- is a supplier of Video
Eyewear products in the defense, consumer and media &
entertainment markets.
The Company's balance sheet at June 30, 2011, showed $7.03 million
in total assets, $11.65 million in total liabilities and a $4.62
million total stockholders' equity.
The Company reported a net loss of $4.55 million on $12.25 million
of total sales for the year ended Dec. 31, 2010, compared with a
net loss of $3.25 million on $11.88 million of total sales during
the prior year.
As reported by the TCR on April 6, 2011, EFP Rotenberg, LLP, in
Rochester, New York, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has incurred substantial losses
from operations in recent years. In addition, the Company is
dependent on its various debt and compensation agreements to fund
its working capital needs. According to the independent auditors,
some of these obligations include financial covenants which the
company must comply with.
YELLOWSTONE CLUB: Owner Tells Life Story in New Book
----------------------------------------------------
In a new article, developer and Yellowstone Club Founder Tim
Blixseth explains that he will never stop fighting for justice in
the lawsuits brought about by the Yellowstone Club bankruptcy.
"Unfortunately, injustice can sometimes be bought," Blixseth tells
the Bozeman Daily Chronicle. "Fortunately, justice cannot."
Blixseth details his life story in the article, titled "A
Billionaire in Big Sky," from his humble roots growing up on
welfare in Roseburg, Oregon, to the heady days starting the
exclusive Yellowstone Club resort in Montana.
In the article, Blixseth explains that he has written 250 pages of
his autobiography, titled: "You Couldn't Make This Up." "It'll be
a journey about my life and some of the interesting things, the
hardships, the joys, just life," Blixseth said. "Neither you nor
I know the ending yet."
Blixseth explains in the article that, before coming to Montana,
he grew up in a poor family in Oregon. His father was a hard-
working Norwegian immigrant. "My father's American dream never
came to fruition, I don't think, but mine sure has," Blixseth
tells the Chronicle. "I'm thankful I was born in America."
After learning young that he had a knack for making deals,
Blixseth would eventually make millions from the timber industry.
He told CNN Money in 2008 that when he was about 13, he bought
three donkeys for $25 each after seeing a classified ad for them,
the article states. Then, he turned around and sold them for $75
after rebranding them as pack mules.
"So he gives me the $225, and a light bulb went on and I went,
'Huh, okay,'" he said in the CNN Money article. Blixseth went on
to make a series of timber deals that made him millions, and he
retired in North Tahoe Lake, Nev., at the age of 40. But he got
bored and wasn't out of the development world for long. After a
land swap with the U.S. government that required two acts of
Congress, Blixseth became the proud owner of nearly 15,000 acres
south of Big Sky, Montana, an area that would become the
Yellowstone Club.
The early years
The Yellowstone Club thrived from the beginning, the article
explains, with a fancy lodge, a golf course designed by Tom
Weiskopf and a first-class private ski mountain for families.
Patrons included Bill Gates and Dan Quayle.
But when Blixseth and this then-wife, Edra, divorced, she bought
out her husband's portion of the club and became its owner.
Within months, the article explains, the Yellowstone Club went
bankrupt. In May 2009, it was sold at a "fire-sale price of $115
million" to Sam Byrne, a principal at CrossHarbor Capital and a
club member. Previously he had tried to buy it from Blixseth for
$450 million, but he reneged on the deal, the article explains.
Now
The article chronicles the lawsuits surrounding the Yellowstone
Club bankruptcy, including one in which Tim Blixseth alleges the
club's bankruptcy filing was an elaborate scheme concocted by Edra
Blixseth and Sam Byrne. "Essentially, Byrne was paying Edra to
file the bankruptcy so he could get the club for a cheaper price,
Blixseth alleges now," according to the article.
"Unfortunately, injustice can sometimes be bought," Blixseth said.
"Fortunately, justice cannot."
Blixseth tells the Chronicle he's happier than ever today, married
to his wife, Jessica, and confident he will prevail in the end.
"I'm having a better time today than ever in my life," he said.
"Every day I wake up have a smile on my face."
About Yellowstone Club
Located near Big Sky, Montana, Yellowstone Mountain Club LLC --
http://www.theyellowstoneclub.com/-- is a private golf and ski
community with more than 350 members, including Bill Gates and Dan
Quayle. The Company was founded in 1999.
Yellowstone Club and its affiliates filed for Chapter 11
bankruptcy (Bankr. D. Montana, Case No. 08-61570) on Nov. 10,
2008. The Company's owner affiliate, Edra D. Blixseth, filed for
Chapter 11 relief on March 27, 2009 (Case No. 09-60452).
In June 2009, the Bankruptcy Court entered an order confirming
Yellowstone's Chapter 11 Plan. Pursuant to the Plan, CrossHarbor
Capital Partners, LLC, acquired equity ownership in the
reorganized Club for $115 million.
Attorneys at Bullivant Houser Bailey PC and Bekkedahl & Green
PLLC represented the Debtors. The Debtors hired FTI Consulting
Inc. and Ronald Greenspan as CRO. The official committee of
unsecured creditors were represented by Parsons, Behle and
Latimer, as counsel, and James H. Cossitt, Esq., at local counsel.
Credit Suisse, the prepetition first lien lender, was represented
by Skadden, Arps, Slate, Meagher & Flom.
* U.S. Municipal Defaults Declined Last Quarter, Newsletter Says
----------------------------------------------------------------
Carla Main at Bloomberg News reports that that U.S. municipal
defaults fell last quarter as local governments reduced expenses
instead of forgoing payments on debt, bucking banking analyst
Meredith Whitney's forecast for surge in failures. There were 12
defaults in the period, totaling $126 million, a decline from 18
in the same quarter last year and 24 in the same three months of
2009, according to the Distressed Debt Securities Newsletter. For
the first nine months of 2011, defaults totaled $949 million,
about a tenth of the amount of failures in corporate debt,
according to the newsletter, published by Miami Lakes, Florida-
based Income Securities Advisor Inc.
* Parties Agree Stern No Limit on Power of Magistrates
------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Court of Appeals in New Orleans is primed to
rule after oral argument in early December whether the Stern v.
Marshall bankruptcy opinion from the U.S. Supreme Court equally
hamstrings U.S. Magistrate Judges. In Stern, the high court
concluded that bankruptcy judges don't have power to make final
judgments on state-based counterclaims beyond what's necessary to
rule on a creditor's proof of claim.
According to Mr. Rochelle, before the decision came down in late
June, the appeals court in New Orleans heard argument in a case
where the parties consented to allowing a U.S. Magistrate Judge to
conduct a trial and enter a final judgment. The case will be
argued once again before a panel of three judges during the week
of Dec. 5. The case is Technical Automation Services Corp. v.
Liberty Surplus Insurance Corp., 10-20640, 5th U.S. Circuit Court
of Appeals (New Orleans).
* Former Bankruptcy Judge Garrity Moves to Morgan Lewis
-------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that James L. Garrity Jr., a U.S. Bankruptcy Judge in New
York from 1991 to 1999, left Shearman & Sterling LLP where he was
a partner since leaving the bench.
Judge Garrity joined the New York office of Philadelphia-based
Morgan Lewis & Bockius LLP. He was a 1986 graduate of St. John's
University School of Law.
Judge Garrity was an assistant U.S. Attorney in New York before
ascending to the bench. Recently, he was appointed as Chapter 11
trustee for GSC Group Inc.
* Four Banks Closed Friday; Year's Tally Now 84
-----------------------------------------------
The Federal Deposit Insurance Corp. on Friday closed four banks,
two in Georgia, and one bank each in Florida and Colorado, taking
the count of U.S. bank closures in 2011 to 84.
The four banks were shuttered, with the assets of the failed banks
beings assumed by other banks in an FDIC-assisted transaction. The
FDIC estimates that the cost to the Deposit Insurance Fund by the
four bank closures will be a total of $438.1 million.
Boca Raton, Florida-based 1st United Bank assumed the banking
operations, including all the deposits, of Old Harbor Bank from
FDIC, and Atlanta, Georgia-based Fidelity Bank assumed from the
FDIC all of the deposits of Decatur First Bank in Georgia.
Meanwhile, Macon, Georgia-based State Bank and Trust Co. assumed
from the FDIC all of the deposits of Community Capital Bank, and
Kansas City, Missouri-based Bank Midwest, National Association,
assumed all of the deposits of Community Banks in Colorado from
FDIC.
2011 Failed Banks List
The FDIC was appointed as receiver for the closed banks. To
protect the depositors, the FDIC entered into a purchase and
assumption agreement with various banks that agreed to assume the
deposits of most of the closed banks. The FDIC also entered into
loss-share transactions on assets bought by the banks.
For this year, the failed banks are:
Loss-Share
Transaction Party FDIC Cost
Assets of Bank That Assumed to Insurance
Closed Bank Deposits & Bought Fund
Closed Bank (millions) Certain Assets (millions)
----------- ----------- ----------------- ------------
Community Banks $1,380.0 Bank Midwest, N.A. $224.9
Community Capital $181.2 State Bank and Trust $62.0
Old Harbor Bank $215.9 1st United Bank $39.3
Decatur First Bank $191.5 Fidelity Bank $32.6
Country Bank $190.6 Blackhawk Bank & Trust $66.3
First State Bank $204.4 Northfield Bank $45.8
Piedmont Community $201.7 State Bank and Trust $71.6
Blue Ridge Savings $161.0 Bank of North Carolina $38.0
Sun Security Bank $355.9 Great Southern Bank $118.3
The RiverBank $417.4 Central Bank $71.4
First International Bank $239.9 American First Nat'l $53.8
Citizens Bank of N. Ca. $288.8 Tri Counties Bank $37.2
Bank of the Commonwealth $985.1 Southern Bank and Trust $268.3
First Nat'l Bank, Fla. $296.8 CharterBank $46.9
CreekSide Bank $102.3 Georgia Commerce Bank $27.3
Patriot Bank of Georgia $150.8 Georgia Commerce Bank $44.4
First Choice Bank Geneva $141.0 Inland Bank & Trust $31.0
First Southern Nat'l $164.6 Heritage Bank of the South $39.6
Lydian Private Bank $1,700.0 Sabadell United Bank $293.2
Public Savings Bank $46.8 Capital Bank, N.A. $11.0
1st Nat'l Bank of Olathe $538.1 Enterprise Bank & Trust $116.6
Bank of Whitman $548.6 Columbia State Bank $134.8
Bank of Shorewood $110.7 Heartland Bank and Trust $25.6
Integra Bank $2,200.0 Old National Bank $170.7
BankMeridian, N.A. $239.8 SCBT N.A. $65.4
Virginia Business $95.8 Xenith Bank $17.3
Bank of Choice $1,070.0 Bank Midwest, N.A. $213.6
LandMark Bank of Fla. $275.0 American Momentum $34.4
Southshore Community $46.3 American Momentum $8.3
Summit Bank $72.0 The Foothills Bank $11.3
First Peoples Bank $228.3 Premier American Bank $7.4
One Georgia Bank $186.3 Ameris Bank $44.4
High Trust Bank $192.5 Ameris Bank $66.0
Colorado Capital $717.5 First-Citizens Bank $283.8
First Chicago Bank $959.3 Northbrook Bank $284.3
Signature Bank $66.7 Points West Community $22.3
Mountain Heritage $103.7 First American Bank $41.1
First Commercial Bank $98.6 Stonegate Bank $28.5
McIntosh State Bank $339.9 Hamilton State Bank $80.0
Atlantic Bank and Trust $208.2 First Citizens Bank $36.4
First Heritage Bank $173.5 Columbia State $34.9
First Georgia Banking $731.0 CertusBank $156.5
Atlantic Southern $741.9 CertusBank $273.5
Summit Bank $142.7 Columbia State $15.7
Coastal Bank $129.4 Premier American Bank $13.4
Community Central $476.3 Talmer Bank & Trust $183.2
The Park Avenue Bank $953.3 Bank of the Ozarks $306.1
Cortez Community Bank $70.9 Florida Community Bank $18.6
First National Bank $352.0 Florida Community Bank $42.9
First Choice Community $308.5 Bank of the Ozarks $92.4
Heritage Banking $224.0 Trustmark National $49.1
Rosemount National $37.6 Central Bank $3.6
Nexity Bank $793.7 AloStar Bank of Commerce $175.4
New Horizons Bank $110.7 Citizens South Bank $30.9
Bartow County Bank $330.2 Hamilton State Bank $69.5
Superior Bank $3,000.0 Superior Bank, N.A. $259.6
Nevada Commerce Bank $144.9 City National Bank $31.9
Western Springs $186.8 Heartland Bank $31.0
Bank of Commerce $163.1 Advantage National $41.9
Legacy Bank $190.4 Seaway Bank and Trust $43.5
First Nat'l Bank of Davis $90.2 The Pauls Valley National $26.5
Valley Community Bank $123.8 First State Bank $22.8
Citizens Bank $214.3 Heritage Bank $59.4
San Luis Trust $332.6 First California $96.1
Habersham Bank $387.6 SCBT National $90.3
Charter Oak Bank $120.8 Bank of Marin $21.8
Sunshine State $125.5 Premier American $30.0
Badger State Bank $83.8 Royal Bank $17.5
Canyon National $210.9 Pacific Premier Bank $10.0
Peoples State Bank $390.5 First Michigan Bank $87.4
American Trust Bank $238.2 Renasant Bank $71.5
Community First $51.1 Northbrook Bank $11.7
North Georgia Bank $153.2 BankSouth $35.2
First Community Bank $2,310.0 U.S. Bank, N.A. $260.0
FirsTier Bank $781.5 No Acquirer $242.6
Evergreen State $246.5 McFarland State $22.8
The First State Bank $43.5 Bank 7 $20.1
The Bank of Asheville $195.1 First Bank $56.2
CommunitySouth Bank $440.6 Certus Bank $46.3
Enterprise Banking $100.9 [No Acquirer] $39.6
United Western Bank $2,050.0 First-Citizens Bank $312.8
Oglethorpe Bank $230.6 Bank of the Ozarks $80.4
Legacy Bank, Arizona $150.6 Enterprise Bank & Trust $27.9
First Commercial Bank $598.5 First Southern Bank $78.0
In 2010, there were 157 failed banks, compared with 140 in 2009
and just 25 for 2008.
A complete list of banks that failed since 2000 is available at:
http://www.fdic.gov/bank/individual/failed/banklist.html
865 Banks in Problem List
The Federal Deposit Insurance Corp.'s list of "problem" banks fell
in the second quarter 2011 for the first time since 2006 as the
industry's income improved and costs tied to bad loans eased. The
confidential list of banks deemed at greater risk of collapse
shrank by 23 firms to 865, the FDIC said Aug. 23 in its Quarterly
Banking Profile. The last time that happened was the third
quarter of 2006 before the credit crisis began, the agency said.
The FDIC defines "problem" institutions as those with financial,
operational or managerial weaknesses that threaten their
viability.
The deposit insurance fund, which protects customer holdings up to
$250,000 per account in the event of a failure, was positive for
the first time in two years, the agency said. The fund rose to
$3.9 billion, because of fewer expected bank failures and
assessment revenue, the agency said. The FDIC insures deposits at
more than 7,500 banks and thrifts.
Problem Institutions Failed Institutions
-------------------- -------------------
Year Number Assets (Mil) Number Assets (Mil)
---- ------ ------------ ------ ------------
2010 884 $390,017 157 $92,085
2009 702 $402,800 140 $169,700
2008 252 $159,405 25 $371,945
2007 76 $22,189 3 $2,615
2006 50 $8,265 0 $0
2005 52 $6,607 0 $0
2004 80 $28,250 4 $170
Federal regulators assign a composite rating to each financial
institution, based upon an evaluation of financial and operational
criteria. The rating is based on a scale of 1 to 5 in ascending
order of supervisory concern. "Problem" institutions are those
institutions with financial, operational, or managerial weaknesses
that threaten their continued financial viability. Depending upon
the degree of risk and supervisory concern, they are rated either
a "4" or "5." The number and assets of "problem" institutions are
based on FDIC composite ratings. Prior to March 31, 2008, for
institutions whose primary federal regulator was the OTS, the OTS
composite rating was used.
* One Default Last Week Brings S&P Tally to 35
----------------------------------------------
One corporate issuer defaulted last week, raising the 2011 global
corporate default tally to 35, said an article published today by
Standard & Poor's Global Fixed Income Research, titled "Global
Corporate Default Update (Oct. 13 - 19, 2011)."
The rating on U.S.-based Wastequip Inc. was revised to 'SD' from
'CCC-' after the company provided confidential information
regarding its unrated mezzanine loan.
Of the total defaulters this year, 25 are based in the U.S., three
are based in New Zealand, two are in Canada, and one each is in
the Czech Republic, Greece, France, Israel, and Russia. Of the
defaulters by this time in 2010, 49 were U.S.-based issuers, nine
were from the other developed region (Australia, Canada, Japan,
and New Zealand), eight were from the emerging markets, and two
were European issuers.
Fourteen of this year's defaults were due to missed interest or
principal payments and seven were due to distressed exchanges --
both of which were among the top reasons for defaults in 2010.
Bankruptcy filings followed with six defaults, and regulatory
actions accounted for three. Of the remaining defaults, one
issuer failed to finalize refinancing on its bank loan, one issuer
had its banking license revoked by its country's central bank,
another was appointed a receiver, and two were confidential.
By comparison, in 2010, 28 defaults resulted from missed interest
or principal payments, 25 from Chapter 11 and foreign bankruptcy
filings, 23 from distressed exchanges, three from receiverships,
one from a regulatory directive, and one from administration.
Standard & Poor's expects the U.S. corporate trailing 12-month
speculative-grade default rate to decline to 1.6% by June 2012. A
total of 25 issuers would need to default from July 2011 to June
2012 to reach this forecast. By comparison, the default rate was
2.25% in June 2011. In the 12 months ended June 2011, 32
speculative-grade issuers defaulted. Less than one-third of those
defaults occurred in the first half of 2011. Improved lending
conditions and greater availability of capital, even for low-rated
issuers, continue to temper S&P's default expectations in the
short term. In addition, stronger credit quality, as reflected by
fewer downgrades and lower negative bias, should help companies
mitigate the effects of lackluster economic growth and uncertainty
about domestic and international sovereign funding.
In addition to its baseline projection, S&P forecasts the default
rate in S&P's optimistic and pessimistic scenarios. In S&P's
optimistic default rate forecast scenario, the economy and the
financial markets improve more than expected, and, as a result,
the agency would expect the default rate to be 1.2% (18 defaults
in the next 12 months).
On the other hand, if the economic recovery stalls and the
financial markets deteriorate -- which is its pessimistic scenario
-- S&P expects the default rate to be 4% (62 defaults) by June
2012.
S&P bases its forecasts on quantitative and qualitative factors
that S&P considers, including, but not limited to, S&P's
proprietary default model for the U.S. corporate speculative-grade
bond market. S&P updates its outlook for the U.S. issuer-based
corporate speculative-grade default rate each quarter after
analyzing the latest economic data and expectations.
* Struggling California City Issues an Early Warning on Bonds
-------------------------------------------------------------
Dow Jones' DBR Small Cap reports that with its exceptionally high
foreclosure rate and shrinking tax base, Stockton, Calif.,
officials might have thought their city's problems couldn't get
worse.
* Large Companies With Insolvent Balance Sheets
-----------------------------------------------
Total
Share- Total
Total Holders' Working
Assets Equity Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------ -------- -------
ABSOLUTE SOFTWRE ABT CN 116.7 (13.2) (2.9)
ACCO BRANDS CORP ABD US 1,135.8 (28.3) 339.3
ALASKA COMM SYS ALSK US 615.6 (37.7) 20.4
AMC NETWORKS-A AMCX US 2,110.5 (1,099.4) 514.7
AMER AXLE & MFG AXL US 2,195.4 (357.9) 50.1
AMERISTAR CASINO ASCA US 2,067.1 (121.9) (40.8)
ANOORAQ RESOURCE ARQ SJ 1,016.8 (119.1) 20.8
AUTOZONE INC AZO US 5,869.6 (1,254.2) (638.5)
BLUEKNIGHT ENERG BKEP US 327.4 (45.5) (90.0)
BOSTON PIZZA R-U BPF-U CN 146.1 (101.0) 1.3
CABLEVISION SY-A CVC US 6,975.1 (5,439.8) (703.4)
CAPMARK FINANCIA CPMK US 20,085.1 (933.1) -
CARBONITE INC CARB US 42.4 (15.7) (25.4)
CC MEDIA-A CCMO US 16,882.1 (7,270.0) 1,501.0
CENTENNIAL COMM CYCL US 1,480.9 (925.9) (52.1)
CENVEO INC CVO US 1,410.8 (330.1) 223.4
CHEFS WAREHOUSE CHEF US 95.8 (45.1) 6.9
CHENIERE ENERGY CQP US 1,726.6 (559.0) 22.7
CHENIERE ENERGY LNG US 2,619.8 (430.3) (103.2)
CHOICE HOTELS CHH US 441.3 (27.9) 6.5
CINCINNATI BELL CBB US 2,658.5 (633.6) 30.5
CLOROX CO CLX US 4,163.0 (86.0) (86.0)
DENNY'S CORP DENN US 286.7 (99.5) (39.9)
DIRECTV-A DTV US 19,177.0 (1,399.0) 1,270.0
DISH NETWORK-A DISH US 12,827.7 (92.6) 2,164.2
DISH NETWORK-A EOT GR 12,827.7 (92.6) 2,164.2
DOMINO'S PIZZA DPZ US 438.2 (1,221.0) 118.2
DUN & BRADSTREET DNB US 1,767.1 (567.8) (483.7)
ECOSYNTHETIX INC ECO CN 45.2 (346.7) 32.2
EXELIXIS INC EXEL US 454.2 (81.8) 90.2
FRANCESCAS HOLDI FRAN US 69.7 (0.1) 22.8
FREESCALE SEMICO FSL US 3,596.0 (4,488.0) 1,386.0
GENCORP INC GY US 994.2 (143.4) 102.2
GLG PARTNERS INC GLG US 400.0 (285.6) 156.9
GLG PARTNERS-UTS GLG/U US 400.0 (285.6) 156.9
GRAHAM PACKAGING GRM US 2,947.5 (520.8) 298.5
GRAMERCY CAPITAL GKK US 5,278.7 (548.4) -
HCA HOLDINGS INC HCA US 23,877.0 (7,534.0) 2,613.0
HUGHES TELEMATIC HUTC US 100.6 (94.9) (28.3)
HUGHES TELEMATIC HUTCU US 100.6 (94.9) (28.3)
INCYTE CORP INCY US 416.7 (136.3) 281.3
IPCS INC IPCS US 559.2 (33.0) 72.1
ISTA PHARMACEUTI ISTA US 135.7 (66.5) 10.4
JUST ENERGY GROU JE CN 1,471.5 (208.2) (299.7)
JUST ENERGY GROU JSTEF US 1,471.5 (208.2) (299.7)
LEVEL 3 COMM INC LVLT US 8,862.0 (432.0) (50.0)
LIN TV CORP-CL A TVL US 797.5 (119.9) 47.4
LIZ CLAIBORNE LIZ US 1,247.3 (211.1) (52.7)
LORILLARD INC LO US 2,498.0 (831.0) 904.0
MAINSTREET EQUIT MEQ CN 475.2 (10.5) -
MANNKIND CORP MNKD US 228.4 (245.4) 5.3
MEAD JOHNSON MJN US 2,526.1 (184.5) 652.4
MERITOR INC MTOR US 2,838.0 (963.0) 226.0
MOODY'S CORP MCO US 2,744.6 (16.6) 691.1
MORGANS HOTEL GR MHGC US 604.4 (51.3) 112.0
NATIONAL CINEMED NCMI US 817.6 (329.8) (110.0)
NEXSTAR BROADC-A NXST US 558.0 (183.4) 35.4
NPS PHARM INC NPSP US 253.3 (27.3) 201.5
OTELCO INC-IDS OTT US 317.0 (8.6) 21.8
OTELCO INC-IDS OTT-U CN 317.0 (8.6) 21.8
PALM INC PALM US 1,007.2 (6.2) 141.7
PDL BIOPHARMA IN PDLI US 284.3 (293.5) (4.6)
PLAYBOY ENTERP-A PLA/A US 165.8 (54.4) (16.9)
PLAYBOY ENTERP-B PLA US 165.8 (54.4) (16.9)
PRIMEDIA INC PRM US 208.0 (91.7) 3.6
PROTECTION ONE PONE US 562.9 (61.8) (7.6)
QUALITY DISTRIBU QLTY US 279.4 (113.4) 47.2
QWEST COMMUNICAT Q US 16,849.0 (1,560.0) (2,828.0)
RAPTOR PHARMACEU RPTP US 20.5 (14.6) (21.4)
REGAL ENTERTAI-A RGC US 2,367.9 (538.3) (72.9)
RENAISSANCE LEA RLRN US 57.0 (28.2) (31.4)
REVLON INC-A REV US 1,100.0 (677.5) 144.6
RSC HOLDINGS INC RRR US 3,075.9 (50.7) (199.1)
RURAL/METRO CORP RURL US 303.7 (92.1) 72.4
SALLY BEAUTY HOL SBH US 1,725.5 (260.7) 429.3
SINCLAIR BROAD-A SBGI US 1,497.3 (135.3) 69.0
SINCLAIR BROAD-A SBTA GR 1,497.3 (135.3) 69.0
SKULLCANDY INC SKUL US 108.5 (12.5) 33.2
SMART TECHNOL-A SMA CN 574.8 (17.3) 194.3
SMART TECHNOL-A SMT US 574.8 (17.3) 194.3
SUN COMMUNITIES SUI US 1,322.8 (65.4) -
TAUBMAN CENTERS TCO US 2,518.2 (467.9) -
THERAVANCE THRX US 303.1 (37.5) 253.4
TOWN SPORTS INTE CLUB US 450.6 (4.3) (35.4)
UNISYS CORP UIS US 2,642.9 (661.8) 374.7
VECTOR GROUP LTD VGR US 941.2 (50.1) 257.6
VERISIGN INC VRSN US 1,795.6 (4.2) 873.4
VERISK ANALYTI-A VRSK US 1,408.1 (144.4) (216.1)
VIRGIN MOBILE-A VM US 307.4 (244.2) (138.3)
VONAGE HOLDINGS VG US 235.9 (75.0) (65.6)
WARNER MUSIC GRO WMG US 3,583.0 (289.0) (630.0)
WEIGHT WATCHERS WTW US 1,104.5 (542.4) (274.4)
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers"
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors" Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise
Marie Varquez, 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 ***