/raid1/www/Hosts/bankrupt/TCR_Public/120120.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, January 20, 2012, Vol. 16, No. 19
Headlines
216 WEST: Court Confirms Liquidation Plan, Approves Plan Outline
3848 DUMBARTON: Case Summary & 3 Largest Unsecured Creditors
400 BLAIR: Court Denies Wells Fargo's Motion for Chap. 11 Trustee
ATLANTIC & PACIFIC: Secures $750MM Loan to Fund Bankruptcy Exit
A&S BOOKSELLERS: Case Summary & 20 Largest Unsecured Creditors
ABSOLUTE LIFE: Posts $4.4 Million Net Loss in Nov. 30 Quarter
AES EASTERN: Sec. 341 Meeting of Creditors Set for Feb. 9
AES EASTERN: Moody's Withdraws Ratings After Chapter 11 Filing
AINSWORTH FEED: 8th Cir. BAP Flips Ruling on Sears Insurance
AMERICAN AIRLINES: Paid Small Fraction to Pension Plan
AMERICAN LASER: Versa Loan Approved Over Committee Objection
ATLANTIC & PACIFIC: Posts $123.6MM Loss in Fiscal 2011 3rd Quarter
AURA SYSTEMS: Incurs $3.2 Million Net Loss in Nov. 30 Quarter
BANKUNITED FINANCIAL: Panel Seeks Clarification on Claims Deadline
BERNARD L. MADOFF: Son Reasserts Ignorance of Ponzi Scheme
BLITZ USA: Committee Seeks to Hire Lowenstein Sandler as Counsel
BLITZ USA: Committee Seeks to Hire Womble Carlyle as Co-Counsel
BRAY & JAMISON: Judge Dismisses Chapter 11 Case
BUTTERY: Files for Chapter 11 Bankruptcy Protection
CALAIS RESOURCES: Delays Form 10-Q for Nov. 30 Quarter
CASELLA WASTE: Moody's Assigns 'B3' Rating to $21.4-Mil. Bonds
CATALYST PAPER: Clarifies Recapitalization Process Reports
CATALYST PAPER: Files for CCAA, Seeks U.S. Recognition
CATALYST PAPER: Moody's Lowers Corporate Family Rating to 'Ca'
CDC CORP: Committee Seeks to Retain Troutman Sanders as Counsel
CDC CORP: Sues Subsidiary CDC Software to Stop Sale
CENTURION PROPERTIES: Court OKs Cash Access Until March 31
CHARTER SCHOOL: S&P Cuts Educational Revenue Bond Rating to 'BB'
CHERUPUSHPAM LLC: Voluntary Chapter 11 Case Summary
CIT GROUP: To Redeem $500MM of Second Lien Notes Due 2016
CITIZENS CORP: Files List of 19 Largest Unsecured Creditors
CITIZENS DEVELOPMENT: To File New Chapter 11 Plan
COLOWYO COAL: S&P Raises Rating on $100-Mil. Bonds From 'BB-'
COMMERCIAL VEHICLE: Arnold Siemer Discloses 10.5% Equity Stake
CROSS BORDER: Red Mountain Discloses 38.1% Equity Stake
DE TECHNOLOGIES: Amends List of Largest Unsecured Creditors
DELTATHREE INC: Peter Friedman to Resign as Counsel & Secretary
DIGITAL DOORSTEP: Files for Ch. 7; Plum District Refunds Customers
DON MERTENS: Case Summary & 4 Largest Unsecured Creditors
DULCES ARBOR: Courts Dismisses Chapter 11 Bankruptcy Case
EAGLE INDUSTRIES: P. Gannott Substitutes as Committee's Counsel
EAST HARLEM: Wants Exclusive Filing Period Extended Until May 12
EASTMAN KODAK: Files for Chapter 11 in Manhattan
EASTMAN KODAK: Case Summary & 50 Largest Unsecured Creditors
ESSAR OIL: Expects to Appeal Court Ruling in Tax Case
EVANS OIL: Fifth Third May File Competing Plan
EVERGREEN SOLAR: Palo Alto Resigns from Creditors Committee
EXECUTIVE LIFE: Beneficiary Blasts Receiver's Insolvency Bid
EXTERRA ENERGY: Bankruptcy Should Be Dismissed, Trustee Says
FILENE'S BASEMENT: Syms Gets OK to Pay Up to $650,000 in Bonuses
FIRSTGOLD CORP: IRS Wants Chapter 11 Case Converted or Dismissed
FORT WAYNE TELSTAT: Creditor Loses Challenge to Settlement
FRANCISCAN COMMUNITIES: Court OKs GCC as Claims & Noticing Agent
FRANCISCAN COMMUNITIES: Can Employ Houlihan as Investment Banker
FRANCISCAN COMMUNITIES: Court Approves Jones Day as Counsel
FRANCISCAN COMMUNITIES: B. Laubert Named Patient Care Ombudsman
FRANKLIN COUNTY: Moody's Cuts Rating on Revenue Bonds to 'Ba3'
GALAXY GLOBAL: Case Summary & Largest Unsecured Creditor
GEORGIA GULF: Moody's Reviews 'Ba3' PDR for Possible Upgrade
GEORGIA GULF: S&P Puts 'B+' Corporate Rating on Watch Positive
GRAB GOLF: Voluntary Chapter 11 Case Summary
GRACE AHN: Selling Pierpont Inn & Spa for $8.5 Million
GREYSTONE LOGISTICS: Reports $368,830 Net Income in Nov. 30 Qtr.
GRUBB & ELLIS: BGC Has Until Jan. 31 to Provide Financing
GUITAR CENTER: Posts $612.6MM Consolidated Net Sales in Q4 2011
HANLEY WOOD: S&P Cuts Corporate Credit Rating to 'SD'
HARRISBURG, PA: Officials Ignored Incinerator Risk, Audit Says
HBC ENTERPRISES: Case Summary & 3 Largest Unsecured Creditors
HERBST GAMING: Reclassification of Punitive Damages Claim Affirmed
HOME LOAN: Case Summary & 2 Largest Unsecured Creditors
HOSPITAL DAMAS: Will Seek Plan Confirmation at Feb. 9 Hearing
HOVENSA LLC: Fitch Assigns 'BB-' Rating to Tax-Exempt Bonds
INNER CITY: Can Access Senior Lenders Cash Coll. Until Mar. 6
JACOBS FINANCIAL: Delays Form 10-Q for Nov. 30 Quarter
JCK HOTELS: Wants Plan Filing Period Extended Until April 2
JEFFERSON COUNTY: Eyes J.P. Morgan Deal With Houston Astros Owner
JESCO CONSTRUCTION: Files List of 19 Largest Unsecured Creditors
KGB: S&P Lowers Corp. Credit Rating to 'B-'; Outlook Developing
KLEPZIG MATERIAL: Case Summary & 20 Largest Unsecured Creditors
L.A. TRADERS: Case Summary & 20 Largest Unsecured Creditors
LE-NATURE'S INC: Two More Scammers Get 5-Year Sentence
LEVEL 3: Subsidiary Plans to Offer $350 Million Senior Notes
LEVEL 3: Unit Completes Offering of $900MM 8.625% Senior Notes
LOCATION BASED: Incurs $1.9 Million Net Loss in Nov. 30 Quarter
MAJESTIC CAPITAL: Responds to US Trustee Objection to Plan Outline
MARCO POLO: Sues Two Creditors, Blames Them for Bankruptcy
MBIA INC: Strikes Accord With BNP Over 2009 Restructuring
MCG CAPITAL: Fitch Withdraws 'B' Long-Term Issuer Default Rating
MEDICAL CONNECTIONS: Extends Employments of Named Execs. to 2015
NATIVE WHOLESALE: Section 341(a) Meeting Moved to March 26
NET ELEMENT: Amends Stock Purchase Agreement with Motorsport
NORTEL NETWORKS: Court Approve Wind-Down of Japan Unit
NORTHGATE PLACE: Case Summary & 11 Largest Unsecured Creditors
NOVADEL PHARMA: Won't Have Enough Cash After January
O'BANNON PLAZA: Case Summary & 15 Largest Unsecured Creditors
OVERSEAS SHIPHOLDING: S&P Lowers Corporate Credit Rating to 'B-'
PACIFIC MONARCH: No Competing Bids for Monarch Grand
PONCE DE LEON: Gets More Time to File Chapter 11 Plan
PRESTIGE BRANDS: Moody's Confirms 'B1' CFR; Outlook Negative
PRESTIGE BRANDS: S&P Affirms 'B+' Corporate Credit Rating
PT ARPENI PRATAMA: Has U.S. Chapter 15 Approval
QIMONDA AG: Files Suit Against LSI Over Circuit Patents
RAKHRA MUSHROOM: Case Summary & 20 Largest Unsecured Creditors
RANGE RESOURCES: Moody's Issues Summary Credit Opinion
R.E. LOANS: WF Agrees to Extend Deadline to Object to Tort Claims
REFCO INC: Customers Lose Appeal on Dismissal of D&O Lawsuit
ROTHSTEIN ROSENFELDT: TD Bank Loses $67MM Verdict Over Fraud Role
RUGGERO'S SPECIALTY: Case Summary & 8 Largest Unsecured Creditors
S&E OPERATIONS: Case Summary & 8 Largest Unsecured Creditors
SHUBH HOTELS LINCOLN: Filed in Bad Faith, Mezzanine Lender Says
SHUBH HOTELS LINCOLN: Lender Seeks Dismissal of Case
SOLYNDRA LLC: To Cancel Auction Again After Failing to Lure Bids
SOLYNDRA LLC: Daley Resigned Due to Probe, Congressman Says
SOUTHERN PRODUCTS: Posts $513,200 Net Loss in Nov. 30 Quarter
SP NEWSPRINT: Confirms Talks to Sell Biz in the "Near Future"
STANFORD INT'L: Liquidators Ask Fraud Victims to File Claims
SULTAN REALTY: Case Summary & 4 Largest Unsecured Creditors
SUMMITT LOGISTICS: Indiana Court Approves Chapter 11 Plan
SUPERIOR WALLS: Case Summary & 20 Largest Unsecured Creditors
SUSTAINABLE ENVIRONMENTAL: Sells 5 Million Units for US$500,000
TELETOUCH COMMUNICATIONS: Posts $7.7MM Net Income in Nov. 30 Qtr.
TELTRONICS INC: Panel Urges Creditors to Vote Against Plan
TERRESTAR CORP: Court Sets March 7 Confirmation Hearing
TMP DIRECTIONAL: Former Monster Unit Wins Plan Approval
TRIDENT MICROSYSTEMS: Common Stock to Trade on OTC Markets
TRUMP ENTERTAINMENT: Judge Approves $13MM Settlement With Latham
UNITEK GLOBAL: Moody's Says 'B2' CFR Not Hit by CEO Resignation
U.S. COATING: Voluntary Chapter 11 Case Summary
WASHINGTON MUTUAL: Court Denies TruPS Consortium's Stay Motion
WASHINGTON MUTUAL: Shareholders Want Hedge Funds to Release Info
WESTMORELAND COAL: Plans to Offer $130-Mil. 10.75% Senior Notes
WESTMORELAND COAL: Moody's Assigns 'Caa2' Rating to Senior Notes
WESTMORELAND COAL: S&P Affirms 'CCC+' Corporate Credit Rating
WINDOW FACTORY: Sec. 341 Meeting of Creditors Set for Feb. 16
WOONSOCKET CITY: Moody's Cuts General Obligation Rating to 'Ba2'
XODTEC LED: Delays Form 10-Q for November 30 Quarter
XZERES CORP: Posts $2.1 Million Net Loss in November 30 Quarter
* Disputed Marriott Deal Threatens Commercial-Mortgage Market
* Dewey & LeBoeuf One of Law360's Bankruptcy Group of The Year
* Kirkland & Ellis Among Law360's Bankruptcy Group of 2011
* BOOK REVIEW: J Beaty and S.C. Gwynne's The Outlaw Bank
*********
216 WEST: Court Confirms Liquidation Plan, Approves Plan Outline
-----------------------------------------------------------------
Judge Stuart M. Bernstein of the U.S. Bankruptcy Court for the
Southern District of New York confirmed on Dec. 29, 2011, the
Prepackaged Liquidating Chapter 11 Plan of 216 West 18 Owner LLC,
et al.
The Plan satisfied the confirmation requirements of the Bankruptcy
Code, the Court opined.
On the same date, the Court also approved the Disclosure Statement
for the Plan as containing adequate information under Section 1125
of the Bankruptcy Code; and acknowledged that the solicitation of
acceptances for the Plan prior to the bankruptcy filing complied
with provisions of the Bankruptcy Code.
As reported in the Nov. 24, 2011 edition of the Troubled Company
Reporter, the Plan, originally proposed for the Debtors by Atlas
Capital Group LLC in August 2011, provides the Debtors and their
stakeholders with an opportunity to resolve a prepetition
foreclosure action and a completion guaranty action related to the
Debtors' property. The Plan will provide for the transfer of the
property to an Atlas designee; the distributions on account of
unsecured claims against 216 West 18 Owner; and the cancellation
of existing equity. The Plan will also effectuate a loan purchase
agreement where the Atlas designee will purchase a mortgage loan
held by 216 West 18 Lender LLC, an affiliate of Fishman Holdings
North America Inc., for $62 million. The Fishman entity bought
the mortgage loan from Bank of America. The total amount
outstanding under the loan is $73.5 million as of Sept. 15, 2011.
Preliminary appraisal completed prior to solicitation of the plan
shows the value of the mortgage property to be $62.3 million.
The Plan estimates the Class 2 Mortgage Lender Claim to total
$73.5 million, whereby the claim holder is projected to recoup
84.33% of the allowed claim amount. Holders of Class 3 Owner
General Unsecured Claims, totaling $2.6 million, are projected to
recoup 19.6%. Classes 4 Other General Unsecured Claims, Class 5
Mezzanine Loan Claims and Class 6 Equity Interests are out of the
money.
About 216 West 18
216 West 18 Owner LLC, 216 West 18 Mezz LLC, and 216 West 18
Holder LLC own a parcel of improved real estate at 218 West 18th
Street in New York. 216 West 18 Owner is wholly owned by 216 West
18 Mezz. Mezz is wholly owned by 216 West 18 Holder LLC. Holder
is owned 94.2% by HAJ 18 LLC and 5.8% by JK 18 LLC. HAJ 18,
wholly owned by Harry Jeremias, is the managing member of Holder.
The 216 West 18 entities do not have any employees.
The 216 West 18 entities, through their restructuring officer,
Steven A. Carlson, filed for Chapter 11 bankruptcy (Bankr.
S.D.N.Y. Case Nos. 11-15110 to 11-15112) on Nov. 1, 2011. Bryan
Cave LLP serves as bankruptcy counsel for the Debtors. In its
petition, 216 West 18 Owner estimated $50 million to $100 million
in both assets and debts.
The Debtors filed for bankruptcy to implement a prepackaged plan
of liquidation originally proposed by Atlas Capital Group LLC.
The Plan provides for the transfer of the Mortgaged Property to
their mortgage lender.
Atlas is represented by Greenberg Traurig LLP. HAJ 18 LLC is
represented by Herrick Feinstein LLP.
The mortgage lender, 216 West 18 Lender, an affiliate of Fishman
Holdings North America, is represented by Alston & Bird LLP.
3848 DUMBARTON: Case Summary & 3 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: 3848 Dumbarton, LLC
8000 Capps Ferry Road
Douglasville, GA 30135
Bankruptcy Case No.: 12-50871
Chapter 11 Petition Date: January 12, 2012
Court: United States Bankruptcy Court
Northern District of Georgia (Atlanta)
Judge: James Massey
Debtor's Counsel: Michael Rothenberg, Esq.
MICHAEL ROTHENBERG PLLC
Suite B345
2526 Mt. Vernon Road
Dunwoody, GA 30338
Tel: (404) 954-0902
Scheduled Assets: $1,295,000
Scheduled Liabilities: $1,766,453
A list of the Company's three largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/ganb12-50871.pdf
The petition was signed by Hugh O. Nowell, manager.
400 BLAIR: Court Denies Wells Fargo's Motion for Chap. 11 Trustee
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey denied
the request of Wells Fargo Bank, N.A., for the appointment of a
Chapter 11 trustee.
Wells Fargo is the trustee for the registered holders of Solomon
Brothers Mortgage Securities VII, Inc., Commercial Mortgage Pass-
Through Certificates, Series 2000-C2. The claim of Wells Fargo
exceeds $9 million.
Wells Fargo asserted that the Debtor, Lawrence Berger, United
States Land Resources, United States Realty Resources and Realty
Management Associates, have engaged in numerous bad acts and
breaches of fiduciary which necessitate the appointment of a
Chapter 11 Trustee. It added that these bad acts include, without
limitation, failure to file tax returns for the last five years,
disobedience of court orders, and making false statements under
oath, including failure to report income and preferential payments
in Debtor's schedules.
About 400 Blair Realty
400 Blair Realty Holdings, LLC, in Morristown, New Jersey, was
formed in June 2000 to acquire real property improved with 181,000
sq. ft industrial building situated on 14.7 acres located at 400
Blair Road, Carteret, Middlesex County, New Jersey. The Property
was acquired on Aug. 6, 1999.
United States Land Resources, L.P., holds a 50% equity interest in
400 Blair. USLR's general partner is United States Realty
Resources, Inc., and Lawrence S. Berger is the president of USRR.
400 Blair's other member is Success Treuhand GmbH, which holds a
50% equity interest. Success is a trust set up under German law.
Success operates much like a United States trust company.
Success' sole owner is Eckart Straub, a German national.
400 Blair filed for Chapter 11 bankruptcy (Bankr. D. N.J. Case No.
11-37887) on Sept. 23, 2011, after a court appointed a receiver
for its property and ordered a foreclosure sale. Judge Michael B.
Kaplan presides over the case. In its petition, the Debtor
estimated $10 million to $50 million in assets and $1 million to
$10 million in debts. The petition was signed by Lawrence S.
Berger, manager.
The Debtor's bankruptcy counsel is Morris S. Bauer, Esq., at
Norris McLaughlin & Marcus, PA, in Bridgewater, New Jersey.
ATLANTIC & PACIFIC: Secures $750MM Loan to Fund Bankruptcy Exit
---------------------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that the owner of the
A&P grocery chain, which hopes to exit bankruptcy in the coming
months, has lined up $750 million in financing from J.P. Morgan &
Chase Co. and Credit Suisse Group AG to fund its emergence from
Chapter 11 protection.
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 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.
A&P filed a proposed Chapter 11 plan founded upon a $490 million
debt and equity financing announced this month. The proposed
financing, tentatively approved by the bankruptcy judge, allows
A&P to accept a better offer if one appears. New investors
sponsoring the plan include Yucaipa Cos., Goldman Sachs Group Inc.
and Mount Kellett Capital Management LP.
A&S BOOKSELLERS: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: A&S Booksellers, Inc.
dba A+S Booksellers
dba Crown Books West Corporation
dba Crown Books Corporation
dba Kids & Design
dba Crown Design
dba Crown Kids & Design
dba Crown Outlet
dba A&S Bargain Books
dba Century City/Crown Books
dba A+S Crown Books
dba Super Crown & Design
dba Broders Books, Inc.
dba R.I.P. Halloween
dba Super Crown Books Corporation
dba Crown Books & Design
6605 Fallbrook Ave.
West Hills, CA 91307
Bankruptcy Case No.: 12-10392
Chapter 11 Petition Date: January 13, 2012
Court: United States Bankruptcy Court
Central District of California (San Fernando Valley)
Judge: Victoria S. Kaufman
Debtor's Counsel: Michael Jay Berger, Esq.
LAW OFFICES OF MICHAEL JAY BERGER
9454 Wilshire Blvd 6th Flr
Beverly Hills, CA 90212-2929
Tel: (310) 271-6223
Fax: (310) 271-9805
E-mail: michael.berger@bankruptcypower.com
Estimated Assets: $100,001 to $500,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 20 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/cacb12-10392.pdf
The petition was signed by Andrew Weiss, president.
ABSOLUTE LIFE: Posts $4.4 Million Net Loss in Nov. 30 Quarter
-------------------------------------------------------------
Absolute Life Solutions, Inc., filed its quarterly report on Form
10-Q, reporting a net loss of $4.4 million for the three months
ended Nov. 30, 2011, compared with net income of $11.0 million for
the three months ended Nov. 30, 2010.
Total other income decreased from $20.7 million for the three
months ended Nov. 30, 2010, to a loss of $7.6 million for the
three months ended Nov. 30, 2011.
The Company's balance sheet at Nov. 30, 2011, showed $91.1 million
in total assets, $17.7 million in total liabilities, and
stockholders' equity of $73.4 million.
Marcum LLP, in New York, N.Y., expressed substantial doubt about
Absolute Life's ability to continue as a going concern following
the Company's results for the fiscal year ended Aug. 31, 2011.
The independent auditors noted that the Company that the continued
existence of the Company is dependent upon its ability to generate
profit from its life settlement investments and to meet its
obligations as they become due. ?The demand for and selling
prices of the Company's products, may not be sufficient to meet
cash flow expectations. These conditions raise substantial doubt
about the Company?s ability to continue as a going concern.?
A copy of the Form 10-Q is available for free at:
http://is.gd/ryzdr5
New York, N.Y.-based Absolute Life Solutions, Inc., is a specialty
financial services company engaged in the business of purchasing
life settlement contracts for long-term investment purposes.
AES EASTERN: Sec. 341 Meeting of Creditors Set for Feb. 9
---------------------------------------------------------
Roberta A. DeAngelis, U.S. Trustee for Region 3, will convene a
meeting of creditors of AES Eastern Energy, L.P., et al., on
Feb. 9, 2012 at 1:30 p.m. (EST). The meeting will be held at:
J. Caleb Boggs Federal Building
844 King Street, 2nd Floor, Room 2112
Wilmington, Delaware 19801
This is the first meeting of creditors under Section 341(a) of
the Bankruptcy Code.
The meeting offers creditors a one-time opportunity to examine the
Debtors' representative under oath about the Debtors' financial
affairs and operations that would be of interest to the general
body of creditors. Attendance by the Debtor's creditors at the
meeting is welcome, but not required. The meeting may be
continued and concluded at a later date specified in a notice
filed with the U.S. Bankruptcy Court for the Southern District of
New York.
About AES Eastern Energy
Ithaca, New York-based AES Eastern Energy, L.P. operates four
coal-fired electricity generating facilities with a gross capacity
of 1,169 MW. AEE leases two of those plants. AEE sells
electricity into the spot market at prevailing New York
Independent System Operator wholesale market prices. AEE is a
special purpose entity that is indirectly wholly owned by AES
Corp.
AES Eastern Energy and 13 affiliates filed for Chapter 11
bankruptcy (Bankr. D. Del. Case Nos. 11-14138 through 11-14151) on
Dec. 30, 2011. Lawyers at Weil, Gotshal & Manges LLP and
Richards, Layton & Finger, P.A. are legal counsel to AES Eastern
Energy and affiliates. Barclays Capital is serving as investment
banker and financial advisor. Kurtzman Carson Consultants serves
as claims and noticing agent. AES Eastern Energy estimated
$100 million to $500 million in assets and $500 million to
$1 billion in debts. The petition was signed by Peter Norgeot,
general manager.
AES EASTERN: Moody's Withdraws Ratings After Chapter 11 Filing
--------------------------------------------------------------
Moody's Investors Service has withdrawn the rating of AES Eastern
Energy, L.P. (AEE) 1999 Series Trust Pass Through Certificates
following the company's filing for Chapter 11 bankruptcy
protection.
RATINGS RATIONALE
On December 30, 2011, AEE and affiliated entities filed petitions
for relief under Chapter 11 in the U.S. Bankruptcy Court for the
District of Delaware. The bankruptcy filing was brought about by a
culmination of factors, but was generally a result of the
company's operation as a 100% coal-fired merchant power generator
in an environment of persistent low natural gas and power prices
with simultaneously increased coal prices. As a result, the
company is currently unable to generate sufficient cash flow to
continue operations while servicing its debt.
Also on December 30, 2011, AEE reached an agreement in principal
with a majority of the certificate holders for the transfer of the
Somerset and Cayuga facilities to an entity sponsored by them in
exchange for a $300 million credit bid. The $300 million credit
bid is to be used as a stalking horse bid for potentially higher
third party bids. A non-binding term sheet outlining the agreement
was filed with the court on January 4, 2012; proposed bidding
procedures were filed with the bankruptcy court on January 11,
2012, with a sale/transfer of the assets to be completed by March
30, 2012. The agreement remains subject to definitive
documentation and approval by the bankruptcy court.
To facilitate a smooth transition, AEE employees will continue to
operate the facilities during the bankruptcy process, and most are
expected to be offered positions by the new entity.
The last rating action on AEE occurred on July 21, 2011 when the
rating was revised to Caa2 from B3 with the outlook remaining
negative. The action reflected Moody's view of a likely near-term
payment default or restructuring - which has now occurred. The
rating also recognized the relatively critical and low-cost nature
of the facilities, particularly the Somerset unit, and the
absolute amount of certificate debt at the project - approximately
$450 million or $460 per kW, which Moody's felt would be
supportive of some ultimate recovery for the lenders. The non-
binding settlement agreement appears consistent with this view.
The principal methodology used in this rating was Power Generation
Projects published in December 2008.
AES Eastern operates a portfolio of four coal-fired power plants
with a total of 1,166 MWs of base-load generating capacity in
western New York. The portfolio includes facilities at Somerset
(675 MW) and Cayuga (303 MW), which are leased from independent
owner trusts, in addition to smaller and older units at Westover
(84 MW) and Greenidge (104 MW), which are owned by subsidiaries of
AEE, and are currently in protective lay-up or cold standby and
not operating. The plants participate in the NYISO's wholesale
energy and capacity markets on a merchant basis, Somerset and
Cayuga have historically been among the lowest cost assets in
western and central New York. AES Eastern is a wholly owned
subsidiary of AES NY, LLC and AES NY2, LLC, which are, in turn,
both wholly owned subsidiaries of AES Corporation (Ba3 corporate
family rating). The Pass Through Certificates are secured by lease
payments from AEE (unsecured obligations of AEE payable from all
of AEE's cash flows, including those generated by the AEE-owned
plants), in addition to liens on the Somerset and Cayuga
facilities.
AINSWORTH FEED: 8th Cir. BAP Flips Ruling on Sears Insurance
------------------------------------------------------------
The U.S. Bankruptcy Appellate Panel for the Eighth Circuit
reversed a Sept. 6, 2011 bankruptcy court order finding that the
bankruptcy estate of AFY, Inc., a/k/a Ainsworth Feed Yards
Company, Inc., is contractually and equitably entitled to receive
the cash value of a life insurance policy, owned by Robert A.
Sears and paid for by AFY, to reimburse AFY for policy premiums
paid. On appeal, Mr. Sears argues that the bankruptcy court
lacked jurisdiction, that his agreement with AFY was an executory
contract, which was rejected, resulting in an abandonment of the
policy which reverted to Mr. Sears' estate, and that the
bankruptcy court erred in concluding the AFY estate has an
equitable interest in the insurance policy.
Prior to Mr. Sears' and AFY's bankruptcies, Mr. Sears served as
AFY's president. On Sept. 27, 1996, Mr. Sears and AFY entered
into a split dollar agreement defining their contractual
relationship in a life insurance policy naming Mr. Sears as the
insured. The agreement calls for a policy owned by Mr. Sears with
a face value of $350,000 and provides him the ability to select
the beneficiary. At all relevant times, the beneficiary of the
policy has been Mr. Sears's wife, Diana Sears. In the event of
Mr. Sears' death, the agreement requires repayment to AFY of all
amounts paid in premiums, with the remainder of the death benefit
paid to the designated beneficiary.
The agreement provides three different ways it can be terminated:
1) if Mr. Sears ends his employment with AFY, 2) if either party
provides written notice to the other and 3) if AFY attempts to
impair or defeat Mr. Sears' interest in the policy. In the event
the agreement is terminated, Mr. Sears has 30 days to repay AFY
all premium amounts in exchange for a complete release of the
collateral assignment and all indebtedness. Failure to repay the
premiums within the 30-day period coupled with a request by AFY to
transfer ownership requires Mr. Sears to transfer ownership of the
insurance policy to AFY. Mr. Sears signed the agreement in his
capacity as an employee of AFY and as the president of AFY.
The life insurance policy was issued by the IDS Life Insurance
Company and was received by Mr. Sears on the same day the split
dollar agreement was signed: Sept. 27, 1996. Mr. Sears did not
collaterally assign the policy or sign any demand notes in favor
of AFY.
In total, AFY paid $172,500 in premiums over 14 years, of which
$3,916.27 was refunded to Mr. Sears. AFY's last payment was on
Sept. 17, 2009.
Mr. Sears filed a chapter 11 petition on Feb. 2, 2010. In his
Schedule B, the Ameriprise Life policy, valued at $136,669,5 is
listed as one of his personal property assets. In Schedule C, he
elected to choose his exemptions under 11 U.S.C. Sec. 522(b)(3)
allowing him to claim exemptions according to Nebraska state law.
Under Neb. Rev. Stat. Sec. 44-371 Mr. Sears claimed an exemption
of "$10,000 or other maximum" with a total value listed on
Schedule C of $136,669.
AFY filed a chapter 11 petition on March 25, 2010. Similar to Mr.
Sears' petition, AFY's Schedule B lists the Ameriprise life
insurance policy as an asset valued at $136,669. Mr. Sears signed
AFY's chapter 11 petition as the president of AFY. Neither AFY
nor Mr. Sears lists the split dollar agreement as an executory
contract in Schedule G, or any schedule for that matter.
On May 6, 2010, Joseph H. Badami was appointed as the chapter 11
trustee in AFY's case. He filed an adversary complaint against
Mr. Sears and the insurance company on June 14, 2010, asserting an
ownership interest in the insurance policy and requesting to
recover the cash value of the policy. An amended complaint was
filed on July 27, 2010, correctly naming the insurance company,
claiming an equitable interest in the policy, requesting the court
to void Mr. Sears's interest in the policy, and asking for payment
of the value of the policy from RiverSource. AFY's case was
converted to chapter 7 on Sept. 2, 2010. Mr. Badami was appointed
the chapter 7 trustee.
After a trial, the bankruptcy court ruled that AFY's bankruptcy
estate is contractually and equitably entitled to receive the cash
value of the life insurance policy to reimburse AFY for amounts
paid for premiums.
The case before the 8th Circuit BAP is, Joseph H. Badami,
Plaintiff-Appellee, v. Robert A. Sears, Defendant-Appellant.
RiverSource Life Insurance Policy, Defendant-Appellee, No. 11-6065
(8th Cir. BAP). The panel consists of Bankruptcy Chief Judge
Robert J. Kressel, and Bankruptcy Judges Barry S. Schermer and
Jerry W. Venters. A copy of the Jan. 13, 2012 decision is
available at http://is.gd/Ik7naFfrom Leagle.com.
About AFY Inc.
Ainsworth, Nebraska-based AFY, Inc., doing business as Ainsworth
Feed Yards Company, Inc., filed for Chapter 11 bankruptcy
protection (Bankr. D. Neb. Case No. 10-40875) on March 25, 2010.
Jerrold L. Strasheim, Esq., in Omaha, served as the Debtor's
counsel. AFY estimated its assets and debts at $10 million to
$50 million as of the bankruptcy filing.
Affiliates Robert A. Sears and Korley B. Sears filed Chapter 11
petitions (Bankr. D. Neb. Case Nos. 10-40275 and 10-40277) on
Feb. 12, 2010. Mr. Strasheim also represented the Sears Debtors.
Disputes arose in the three cases as to who actually owned or
controlled the voting rights of the shares of stock in AFY. The
disputes were between Robert and Korley Sears on the one hand and
members of the Sears family on the other hand. Partly due to this
dispute over the ownership and control of AFY, on April 29, 2010,
the Bankruptcy Court granted a motion to appoint a Chapter 11
trustee. Joseph H. Badami was subsequently appointed as the
Chapter 11 trustee. Mr. Strasheim withdrew as attorney for AFY in
June 2010.
The case was converted to one under Chapter 7 on the trustee's
motion.
AMERICAN AIRLINES: Paid Small Fraction to Pension Plan
------------------------------------------------------
Michael Corkery, writing for The Wall Street Journal, reports that
AMR Corp. contributed just $6.5 million of the roughly $100
million payment it was scheduled to contribute to the company's
employee pension plans by the Jan. 15 deadline. The shortfall
threatens to further undermine funding at pension funds that cover
130,000 American Airlines workers and retirees, a Pension Benefit
Guaranty Corp. spokesman said Thursday.
"The company has determined this is the appropriate course of
action," an AMR spokesman said. "This action allows the company to
preserve cash."
WSj says AMR's partial payment will raise further questions about
the company's intentions. If AMR terminates its plans, the agency
would be able honor some, but not all, of the airline's pension
obligations. Under that scenario, some employee and retiree
benefits would shrink. The agency pegged AMR's total obligations
at $18.5 billion.
The report notes AMR in 2007 was among a handful of airlines that
Congress allowed to reduce the amount of cash the companies set
aside for pensions.
"It would be a tragedy if American repaid Congress's generosity by
turning around and killing the plans anyway," Josh Gotbaum,
director of the pension agency, said last week.
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on $18.02
billion of total operating revenues for the nine months ended
Sept. 30, 2011. AMR recorded a net loss of $471 million in the
year 2010, a net loss of $1.5 billion in 2009, and a net loss of
$2.1 billion in 2008.
The Company's balance sheet at Sept. 30, 2011, showed
$24.72 billion in total assets, $29.55 billion in total
liabilities, and a $4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, John Lyons, Felecia Perlman and Jay Goffman at
Skadden, Arps, Slate, Meagher & Flom LLP entered their appearance
as proposed counsel to the Official Committee of Unsecured
Creditors in AMR's chapter 11 proceedings on Dec. 9, 2011.
The Committee has selected Togut, Segal & Segal LLP as co-counsel
for conflicts and other matters; Moelis & Company LLC as its
investment banker, and Mesirow Financial Consulting, LLC as its
financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
AMERICAN LASER: Versa Loan Approved Over Committee Objection
------------------------------------------------------------
The Bankruptcy Court for the District of Delaware, on Jan. 10,
2011, gave final approval to American Laser Centers' request to
obtain postpetition secured financing.
Prior to the said final approval, the Official Committee of
Unsecured Creditors filed its objection to the entry of a final
order approving the DIP Motion.
The Committee cited, among other things, the DIP Loan Agreement is
a one-sided and coercive pact imposed by Versa, intended to
further Versa's scheme to acquire the Debtors' assets and business
in a breakneck-pace auction without allowing the Debtors time to
conduct a full, transparent and fair sale process. The Committee
claimed that the DIP Loan Agreement contains numerous
objectionable, non-market terms that Versa was able to insist on
because it controls the Debtors through its board member designee,
who was the sole member of the Debtors' board of directors when
the DIP Loan was negotiated.
Syneron Inc., one of the Debtors' suppliers, earlier objected to
the DIP Financing, alleging that the Debtors lack neutrality.
Syneron said the Debtors intend to sell their assets to Versa and
then convert their cases to Chapter 7 because the carve-out is
inadequate for any other outcome. Syneron also alleged that Versa
is driving ALC into bankruptcy to extinguish existing equity
interests, including Syneron's equity investment made in October.
The DIP Financing
As reported in the TCR on Dec. 20, 2011, Bellus ALC Investments 1
LLC, a unit of Versa Capital Management LLC, is providing a
$58,784,000 DIP facility for the Debtors. On Dec. 9, Judge Mary
F. Walrath granted the Debtors interim authority to tap
$13,287,400 from the DIP Loan package.
The Debtors need the liquidity as they pursue a bankruptcy sale of
their assets. The Debtors said Bellus, which also serves as agent
to the Debtors' prepetition lenders, has a lien on substantially
all of the Debtors' cash and is not willing to consent to the use
of cash collateral alone.
The DIP loan matures on the earliest of Feb. 3, 2012, or upon the
occurrence of an event of default or upon dismissal or conversion
of the case to Chapter 7, or upon confirmation of a bankruptcy
plan.
The DIP Loan carries an interest rate of prime plus 4.25% per
annum.
The DIP Loan requires the Debtors to obtain approval of a sale no
later than Jan. 26, 2012, and close the deal by Jan. 30, 2012.
Bellus has the right to credit bid the total amount of the DIP
loans at the sale.
The DIP facility earmarks up to $15,000 to be used by any official
committee of creditors appointed in the case to investigate and
challenge the validity, extent, amount, perfection, priority or
enforceability of the prepetition secured lenders' liens.
About American Laser Centers
ALC Holdings LLC, dba American Laser Centers, operates 156 laser
hair-removal clinics in 27 states. At the peak, the Farmington
Hills, Michigan-based company had 222 stores generating
$130.6 million in annual revenue.
ALC Holdings, along with its affiliates, filed a Chapter 11
bankruptcy petition (Bankr. D. Del. Lead Case No. 11-13853) on
Dec. 8, 2011. Assets are $80.4 million. Liabilities include
$40.3 million owing on a first-lien debt and $51 million in
subordinated notes. Some $17.9 million is owing to trade
suppliers.
The Company selected Zolfo Cooper LLC as its adviser; Landis Rath
& Cobb LLP as legal counsel; Traverse LLC as restructuring
adviser; SSG Capital Advisors LLC as investment bankers; and BMC
Group as claims agent.
Prepetition, the Company signed a deal for Philadelphia-based
private equity firm Versa Capital Management LLC to acquire
assets, subject to higher and better offers at a bankruptcy court-
sanctioned auction. Versa has agreed to pay $30 million plus $18
million of new-money financing to support the bankruptcy, unless
outbid at an auction in January 2012.
ATLANTIC & PACIFIC: Posts $123.6MM Loss in Fiscal 2011 3rd Quarter
------------------------------------------------------------------
Great Atlantic & Pacific filed its quarterly report on Form 10-Q,
reporting a net loss of $123.6 million on $1.571 billion of sales
for the 12 weeks ended Dec. 3, 2011, compared with a net loss of
$198.7 million on $1.794 billion of sales for the 12 weeks ended
Dec. 4, 2010.
For the 40 weeks ended Dec. 3, 2011, the Company has reported a
net loss of $379.4 million on $5.441 billion of sales, compared
with a net loss of $473.5 million on $6.277 billion of sales for
the 40 weeks ended Dec. 4, 2010.
Loss from continuing operations before nonoperating income (loss),
interest expense, net and reorganization items, net was
$79.5 million for the 12 weeks ended Dec. 3, 2011, compared to
loss from continuing operations before nonoperating income (loss),
interest expense, net and reorganization items net of
$142.7 million for the 12 weeks ended Dec. 4, 2010.
During the third quarter of fiscal 2011 and 2010, the Company
recorded a favorable adjustment of $61,000 and an unfavorable
adjustment of $213,000, respectively, relating to the Company's
Series B warrants acquired in connection with our purchase of
Pathmark. These adjustments are primarily a function of
fluctuations in the market price of the Company's common stock.
Interest expense, net was $34.5 million for the third quarter of
fiscal 2011 compared to the prior year interest expense of
$40.0 million.
For the 12 weeks ended Dec. 3, 2011, professional fees of
$10.2 million were accrued and $11.4 million were paid related to
the Company's bankruptcy filing. U.S. Trustee fees of
approximately $254,000 were incurred and paid during the 12 weeks
ended Dec. 3, 2011.
Loss from continuing operations before income taxes was
$124.4 million for the third quarter of fiscal 2011, compared to
loss from continuing operations before income taxes of
$183.0 million for the third quarter of 2010.
The Company's balance sheet at Dec. 3, 2011, showed $2.137 billion
in total assets, $3.501 billion in total liabilities,
$148.3 million in Series A redeemable preferred stock, and a
stockholders' deficit of $1.512 billion.
A copy of the Form 10-Q is available for free at:
http://is.gd/FfGF9D
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 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.
On Nov. 14, 2011, the Company filed with the Bankruptcy Court the
a proposed Chapter 11 plan. On Nov. 30, 2011, the Company filed
revised versions of the Plan and related Disclosure Statement.
On Dec. 20, 2011, the Bankruptcy Court approved the adequacy of
information in the Disclosure Statement. The deadline for voting
on the Plan is Jan. 24, 2012. A hearing before the Bankruptcy
Court on the confirmation of the Plan is scheduled for Feb. 6,
2012.
AURA SYSTEMS: Incurs $3.2 Million Net Loss in Nov. 30 Quarter
-------------------------------------------------------------
Aura Systems, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q, reporting a net loss
of $3.27 million on $527,185 of net revenues for the three months
ended Nov. 30, 2011, compared with a net loss of $2.25 million on
$1.25 million of net revenues for the same period during the prior
year.
For the nine months ended Nov. 30, 2011, the Company reported a
net loss of $11.10 million on $2.09 million of net revenues,
compared with a net loss of $7.86 million on $2.83 million net
revenues for the same period a year ago.
The Company's balance sheet at Nov. 30, 2011, showed $4.62 million
in total assets, $13.54 million in total liabilities, and a
$8.92 million total stockholders' deficit.
Kabani & Company, Inc., in Los Angeles, Calif., expressed
substantial doubt about Aura Systems' ability to continue as a
going concern, following the Company's results for the fiscal year
ended Feb. 28, 2011. The independent auditors noted that the
Company has historically incurred substantial losses from
operations and may not have sufficient working capital or outside
financing available to meet its planned operating activities over
the next twelve months.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/9ubRtN
About Aura Systems
El Segundo, Calif.-based Aura Systems, Inc., designs, assembles,
tests and sells its proprietary and patented Axial Flux induction
machine known as the AuraGen(R) for industrial and
commercial applications and VIPER for military applications.
BANKUNITED FINANCIAL: Panel Seeks Clarification on Claims Deadline
------------------------------------------------------------------
BankruptcyData.com reports that BankUnited Financial's official
committee of unsecured creditors filed with the U.S. Bankruptcy
Court a motion to clarify and confirm that, based on the
solicitation procedures order, the reference in the form local
order to the "claims objection deadline" establishes a deadline
solely with respect to objections filed by the committee (or the
Debtor) to claims for purposes of voting on the Third Amended
Committee Plan.
BankruptcyData.com says documents filed with the Court explain,
"In light of the possibility of multiple interpretations of the
Claims Objection Deadline, the Committee respectfully requests
that the Court clarify and confirm that (a) the Court's approval
of the Solicitation Procedures Motion included an approval of the
Committee's request that the Claims Objection Deadline be limited
solely to objections to claims for the purposes of voting on the
Third Amended Committee Plan; (b) consistent with such relief, the
reference in the Form Local Order to the 'Claims Objection
Deadline' establishes a deadline solely with respect to objections
filed by the Committee (or the Debtor) to claims for purposes of
voting on the Third Amended Committee Plan; and (c) the deadline
for objecting to claims for all other purposes shall be
established at a later time, in connection with Third Amended
Committee Plan (or such other plan as is confirmed in these
bankruptcy cases)."
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 that include W.L. Ross & Co.,
Blackstone Group, Carlyle and Centerbridge. The new owners
installed Mr. Kanas as CEO and he sought to revamp BankUnited as a
commercial lender in south Florida.
BankUnited Financial 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.
The banking unit had assets of $12.8 billion and deposits of $8.6
billion as of May 2, 2009. The holding company, in its bankruptcy
petition, disclosed $37,729,520 in assets against $559,740,185 in
debts. Aside from those assets, BankUnited said 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.
The Bankruptcy Court will hold a hearing on Feb. 21 for approval
of the Chapter 11 plan proposed by the Creditors' Committee. The
disclosure statement says that holders owed $321 million on senior
notes will recover about 1% to as much as 14.3%. Holders owed $245
million on subordinated notes won't receive anything as the result
of a subordination agreement. There is almost nothing in the way
of unsecured claims, the committee believes. Almost all unsecured
claims are against the bank subsidiary, in the committee's
judgment.
Federal Deposit Insurance Corp. asserts a $1.47 billion claim
based on the bank's capital deficiency. There is a separate
dispute over ownership of a $50 million tax refunds. The plan is
based on a partial settlement with the FDIC.
Aside from the tax refund claim, a principal asset is the $4.25
billion net tax loss carryforward. The bankruptcy judge has ruled
that the tax refund claim belongs to BankUnited. The FDIC has
taken an appeal.
BERNARD L. MADOFF: Son Reasserts Ignorance of Ponzi Scheme
----------------------------------------------------------
Michael Bathon, substituting for Bloomberg News bankruptcy
columnist Bill Rochelle, reports that Madoff's son Andrew
responded to a $198 million lawsuit by the trustee liquidating his
father's former brokerage, denying wrongdoing and reasserting his
ignorance of the Ponzi scheme, according to a Jan. 17 court
filing.
The report recounts that U.S. District Judge William Pauley in
Manhattan declined to hear an appeal of the lawsuit in December.
Irving Picard, the trustee liquidating Bernard L. Madoff
Investment Securities LLC, is claiming money from Madoff family
members including Andrew Madoff and the estate of Mark Madoff, who
committed suicide in December 2010.
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.
Mr. Picard has filed 1,000 lawsuits seeking $100 billion from
banks such as HSBC Holdings Plc and JPMorgan Chase & Co. The
trustee has seen more than $28 billion of his claims tossed by
district judges.
BLITZ USA: Committee Seeks to Hire Lowenstein Sandler as Counsel
----------------------------------------------------------------
The Official Committee of Unsecured Creditors of Blitz U.S.A.,
Inc., et al., seeks permission from the U.S. Bankruptcy Court for
the District of Delaware to retain Lowenstein Sandler PC as its
counsel.
The firm will:
(a) provide legal advice as necessary with respect to the
Committee's powers and duties as an official committee
appointed under Section 1102 of the Bankruptcy Code;
(b) assist the Committee in investigating the acts, conduct,
assets, liabilities, and financial condition of the
Debtors, the operation of the Debtors' businesses,
potential claims, and any other matters relevant to the
case, to the sale of assets or to the formulation of a plan
of reorganization;
(c) participate in the formulation of a Plan;
(d) provide legal advice as necessary with respect to any
disclosure statement and Plan filed in the Chapter 11 cases
and with respect to the processes for approving or
disapproving disclosure statements and confirming or
denying confirmation of a Plan;
(e) prepare on behalf of the Committee, as necessary,
applications, motions, complaints, answers, orders,
agreements and other legal papers;
(f) appear in Court to present necessary motions, applications,
and pleadings, and otherwise protect the interests of those
represented by the Committee;
(g) assist the Committee in requesting the appointment of a
trustee or examiner, should such action be necessary; and
(h) perform such other legal services as may be required and
that are in the best interests of the Committee and
creditors.
Lowenstein Sandler's current hourly rates are:
Members (principals) $435 - $895
Senior Counsel $390 - $660
Counsel $350 - $630
Associates $250 - $470
Paralegals and Assistants $145 - $245
The firm will also seek for reimbursement of expenses.
To the best of the Committee's knowledge, Lowenstein Sandler is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Lowenstein Sandler can be reached at:
LOWENSTEIN SANDLER PC
Kenneth A. Rosen, Esq.
Sharon L. Levine, Esq.
Jeffrey D. Prol, Esq.
65 Livington Avenue
Roseland, New Jersey 07068
Tel: (973) 597-2500
Fax: (973) 597-2400
E-mail: krosen@lowenstein.com
slevine@lowenstein.com
jprol@lowenstein.com
About Blitz USA
Blitz U.S.A. Inc., is a Miami, Oklahoma-based manufacturer of
plastic gasoline cans. The company, controlled by Kinderhook
Capital Fund II LP, filed for bankruptcy protection to stanch a
hemorrhage resulting from 36 product-liability lawsuits.
Parent Blitz Acquisition Holdings, Inc., and its affiliates filed
for Chapter 11 protection (Bankr. D. Del. Case Nos. 11-13602 thru
11-13607) on Nov. 9, 2011. The Hon. Peter J. Walsh presides over
the case. Debtor-affiliate Blitz Acquisition estimated assets and
debts at $50 million to $100 million.
Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger
represents the Debtors in their restructuring efforts. The
Debtors tapped Zolfo Cooper, LLC, as restructuring advisor; and
Kurtzman Carson Consultants LLC serves as notice and claims agent.
Lowenstein Sandler PC from Roseland, New Jersey, represents the
Official Committee of Unsecured Creditors.
The Chapter 11 case is financed with a $5 million secured
loan from Bank of Oklahoma. Bank of Oklahoma, as DIP agent, is
represented by Samuel S. Ory, Esq. -- sory@fdlaw.com -- at
Frederic Dorwart Lawyers in Tulsa.
BLITZ USA: Committee Seeks to Hire Womble Carlyle as Co-Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of Blitz U.S.A.,
Inc., et al., seeks permission from the U.S. Bankruptcy Court for
the District of Delaware to retain Womble Carlyle Sandridge &
Rice, LLP, as its co-counsel. According to the Committee, Womble
Carlyle will work with Lowenstein Sandler PC to avoid duplication
of effort.
Womble Carlyle will, among other things:
(a) provide legal advice as necessary with respect to the
Committee's powers and duties as an official committee
appointed under Section 1102 of the Bankruptcy Code;
(b) assist the Committee in investigating the acts, conduct,
assets, liabilities, and financial condition of the
Debtors, the operation of the Debtors' businesses,
potential claims, and any other matters relevant to the
case, to the sale of assets or to the formulation of a plan
of reorganization;
(c) participate in the formulation of a Plan;
(d) provide legal advice as necessary with respect to any
disclosure statement and Plan filed in the Chapter 11 cases
and with respect to the processes for approving or
disapproving disclosure statements and confirming or
denying confirmation of a Plan;
(e) prepare on behalf of the Committee, as necessary,
applications, motions, complaints, answers, orders,
agreements and other legal papers;
(f) appear in Court to present necessary motions, applications,
and pleadings, and otherwise protect the interests of those
represented by the Committee;
(g) assist the Committee in requesting the appointment of a
trustee or examiner, should such action be necessary; and
(h) perform other legal services as may be required and that
are in the best interests of the Committee and creditors.
Womble Carlyle's current hourly rates are:
Members $315 - $650
Of counsel $300 - $500
Associates $200 - $445
Senior Counsel $350 - $375
Counsel $250 - $430
Paralegals $100 - $270
The firm will also seek reimbursement of expenses.
To the best of the Committee's knowledge, Womble Carlyle is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be contacted at:
WOMBLE CARLYLE SANDRIDGE & RICE, LLP
Francis A. Monaco, Jr., Esq.
Kevin J. Mangan, Esq.
Thomas M. Horan, Esq.
222 Delaware Avenue, Suite 1501
Wilmington, Delaware 19801
Tel: (302) 252-4320
Fax: (302) 252-4330
About Blitz USA
Blitz U.S.A. Inc., is a Miami, Oklahoma-based manufacturer of
plastic gasoline cans. The company, controlled by Kinderhook
Capital Fund II LP, filed for bankruptcy protection to stanch a
hemorrhage resulting from 36 product-liability lawsuits.
Parent Blitz Acquisition Holdings, Inc., and its affiliates filed
for Chapter 11 protection (Bankr. D. Del. Case Nos. 11-13602 thru
11-13607) on Nov. 9, 2011. The Hon. Peter J. Walsh presides over
the case. Debtor-affiliate Blitz Acquisition estimated assets and
debts at $50 million to $100 million.
Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger
represents the Debtors in their restructuring efforts. The
Debtors tapped Zolfo Cooper, LLC, as restructuring advisor; and
Kurtzman Carson Consultants LLC serves as notice and claims agent.
Lowenstein Sandler PC from Roseland, New Jersey, represents the
Official Committee of Unsecured Creditors.
The Chapter 11 case is financed with a $5 million secured
loan from Bank of Oklahoma. Bank of Oklahoma, as DIP agent, is
represented by Samuel S. Ory, Esq. -- sory@fdlaw.com -- at
Frederic Dorwart Lawyers in Tulsa.
BRAY & JAMISON: Judge Dismisses Chapter 11 Case
-----------------------------------------------
Bankruptcy Judge Letitia Z. Paul dismissed the Chapter 11 case
commenced by Bray & Jamison PLLC after a show cause hearing
wherein the judge required the Debtor to explain why the case
should not be dismissed in light of the appearance that the Debtor
has almost no operations other than continuing with a few state
court lawsuits, and that the Debtor may have filed the case to
obtain unfair advantage in litigation commenced in state court
against Anloc, L.L.C., Michael Coolures, James W. Alexander 1993
Living Trust, Alexander Energy, and DMA Oil & Gas, LLC. The Anloc
Parties have sought appointment of a Chapter 11 trustee.
In dismissing the case, Judge Paul noted that the Debtor's
operations consist of litigating (as a party, not representing as
attorneys) against its former clients, and seeking new clients.
There is no indication of any ongoing business to reorganize.
"Were the instant case to remain in Chapter 11, the court likely
would be compelled to appoint a Chapter 11 trustee, in light of
the apparent self-dealing between Debtor and other entities owned
by [Messrs. Bruce] Jamison and [Thomas] Bray," Judge Paul said.
"However, Jamison and Bray are individuals. The court does not
compel them to practice law solely through this Debtor entity, and
the evidence indicates that they have practiced, both separately
and together, through other entities. The sole matters involving
this Debtor, as an entity, are its ongoing pieces of litigation
against the Anloc Parties and KPC. The court concludes, in the
totality of circumstances, that the Chapter 11 case should be
dismissed."
A copy of Judge Paul's Jan. 5, 2012 Memorandum Opinion is
available at http://is.gd/uKUgFFfrom Leagle.com.
About Bray & Jamison
Bray & Jamison PLLC, based in Houston, Texas, filed for Chapter 11
bankruptcy (Bankr. S.D. Tex. Case No. 11-38957) on Oct. 23, 2011.
Judge Letitia Z. Paul presides over the case. Thomas R. Bray,
Esq., at Bray Associates, serves as the Debtor's counsel. The
petition was signed by Bruce L. Jamison and Thomas R. Bray, as the
Debtor's managers. The Debtor also won permission to employ
Margaret M. McClure, Esq., as counsel. The Debtor scheduled
$26,571,885 in assets and $222,217 in debts.
BUTTERY: Files for Chapter 11 Bankruptcy Protection
---------------------------------------------------
Larry Rulison at timesunion.com reports that the Buttery has filed
for Chapter 11 bankruptcy protection as part of an apparent rent
dispute.
According to the report, the restaurant is still open. Landlord
Picotte Management Co. has been trying to evict owner James
Muscatello over a $28,000 rent dispute.
The report notes that the bankruptcy is likely being used to
settle the rent issue without having to shut down the restaurant.
Mr. Muscatello owns the restaurant under the corporate name Just-
Jimmies Inc. It is located at 111 Washington Ave., in New York.
CALAIS RESOURCES: Delays Form 10-Q for Nov. 30 Quarter
------------------------------------------------------
Calais Resources Inc. notified the U.S. Securities and Exchange
Commission that it will be late in filing its quarterly report on
Form 10-Q for the period ended Nov. 30, 2011. The Company said
that recent activities have delayed the preparation and review of
the Report. The Company estimates loss for the three months ended
Nov. 30, 2011, to be approximately ($1,291,000), compared to a
loss of ($408,894) for the three months ended Nov. 30, 2010.
About Calais Resources
Nederland, Colorado-based Calais Resources, Inc. (Pink Sheets:
CAAUF) is an exploration and development company and owns and
operates the Cross/Caribou gold and silver mine operations in
Colorado and the White Caps mine operation in Manhattan, Nevada.
The company is currently in the initial stages for reviewing the
reopening of the fully permitted Cross Mine which includes
planning to resume underground exploration activities in Colorado
and surface exploration in Nevada.
Calais has inked forbearance agreements with lender Brigus Gold
Corp. for three secured notes. In December 2011, Calais said that
it is in negotiations with Brigus with respect to the $10.5
million fully payable on Dec. 1, 2011.
CASELLA WASTE: Moody's Assigns 'B3' Rating to $21.4-Mil. Bonds
--------------------------------------------------------------
Moody's Investors Service has assigned a B3 rating to the $21.4
million of limited obligation bonds of the Finance Authority of
Maine (FAME) that will be guaranteed by operating subsidiaries of
Casella Waste Systems, Inc. (Casella), pursuant to the bond
remarketing planned for February 1, 2012. Following the mandatory
tender and conversion to a fixed rate structure of a portion of
the FAME bonds, credit support will come from the Casella
subsidiary guarantee; only $3.6 million of the existing $25
million FAME bonds due January 2025 will continue to receive
letter of credit support.
RATINGS RATIONALE
All existing debt ratings of Casella are affirmed. The new
instrument rating of B3, one notch below the company's corporate
family rating of B2, reflects a high proportion of effectively
senior (secured) debt in Casella's capital structure. The
instrument rating does somewhat benefit from $200 million of
subordinated debt (rated Caa1) which offers loss-absorption
benefit to the recovery prospects of senior creditors.
The B2 corporate family rating reflects debt to EBITDA of +6x
(Moody's adjusted basis) that should decline to around 5x by
FY2013. A good regional market position and management's narrow
focus on yield and operating costs management should help margins
become more on par with sector peers. The company intends to
reduce leverage to 3.5x (not Moody's adjusted basis), and has
indicated a willingness to divest non-core assets toward achieving
that goal.
The speculative grade liquidity on Casella remains unchanged at
SGL-4, denoting a weak liquidity profile. Weaker earnings periods
of FY2011 continue to cause tightness under the first lien
revolving credit facility's covenant compliance tests. Low
headroom cushion is driving a very low effective revolver
borrowing availability level versus the company's size and
potential liquidity needs. Letters of credit utilization under the
revolving credit line will decline from the planned remarketing
transaction but the effective borrowing availability will be
unchanged since the existing $25 million of FAME bonds are already
included in the credit facility's leverage tests.
The stable outlook of the B2 corporate family rating anticipates
gradually improving core volumes with a slowly improving U.S.
economy in 2012. With better volumes and Casella's ongoing yield
initiatives, Moody's anticipates low but steadily growing net
profit in FY2013, with free cash flow to debt in the mid-single
digit percentage range. Such performance levels should help
stabilize the liquidity situation and bring credit metrics more in
line with the assigned rating level.
The ratings are:
Corporate Family, affirmed at B2
Probability of Default, affirmed at B2
$180.0 million 11.00% gtd second lien notes due 2014, unchanged at
B2 LGD3, 44%
$200.0 million 7.75% gtd subordinated notes due 2019, unchanged at
Caa1 LGD5, to 84% from 82%
$21.4 million Finance Authority of Maine bonds, assigned at B3
LGD4, 63%
Speculative grade liquidity, unchanged at SGL-4
Outlook, Stable
The principal methodology used in rating Casella was the Solid
Waste Management Industry Methodology published in February 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.
Casella Waste Systems, Inc. ("Casella"), based in Rutland, VT, is
a vertically-integrated regional solid waste services company that
provides collection, transfer, disposal and recycling services to
residential, industrial and commercial customers, primarily in the
eastern United States. Revenues for the last twelve months ended
October 31, 2011 were $478 million.
CATALYST PAPER: Clarifies Recapitalization Process Reports
----------------------------------------------------------
Catalyst Paper Corporation has applied for and received an initial
court order under the Canada Business Corporations Act (CBCA) to
commence the consensual restructuring process with its noteholders
announced on Jan. 14, 2012. Contrary to certain media reports
this is not a bankruptcy proceeding. The company is also seeking
recognition of these proceedings with the US Court in order for
the Canadian order under the CBCA to be recognized in the United
States.
The company will continue to operate and satisfy its obligations
to trade creditors, customers, employees and retirees in the
ordinary course of business during this restructuring process.
About Catalyst Paper
Catalyst Paper -- http://www.catalystpaper.com/-- manufactures
diverse specialty mechanical printing papers, newsprint and pulp.
Its customers include retailers, publishers and commercial
printers in North America, Latin America, the Pacific Rim and
Europe. With four mills, located in British Columbia and Arizona,
Catalyst has a combined annual production capacity of 1.9 million
tons. The Company is headquartered in Richmond, British Columbia,
Canada and its common shares trade on the Toronto Stock Exchange
under the symbol CTL.
The Company also reported a net loss of C$266.30 million on
C$941.70 million of sales for the nine months ended Sept. 30,
2011, compared with a net loss of C$407.20 million on C$895
million of sales for the same period during the prior year.
The Company's balance sheet at Sept. 30, 2011, showed
C$1.45 billion in total assets, C$1.31 billion in total
liabilities, and C$135.60 million in shareholders' equity.
* * *
Catalyst Paper carries Moody's Investors Service's 'Caa3'
corporate family rating with the outlook "negative."
The Caa3 CFR reflects Moody's view that Catalyst's capital
structure is unsustainable and that material losses are likely in
a restructuring scenario. The rating considers the company's
significant debt load, its weak financial performance and the
expectation that the company will continue to face challenging
industry conditions for some of its paper products. Two of the
company's primary products, newsprint and directory paper,
continue to face secular demand declines. The rating is supported
by the company's position as one of the leading producers of
telephone directory paper in the world and specialty papers and
newsprint in Western North America.
Standard & Poor's gave the company an 'SD' (selective default) in
December following the deferred payment.
CATALYST PAPER: Files for CCAA, Seeks U.S. Recognition
------------------------------------------------------
Catalyst Paper Corporation has applied for and received an initial
court order under the Canada Business Corporations Act (CBCA) to
commence a consensual restructuring process with its noteholders.
Affiliate Catalyst Paper Holdings Inc., sought creditor protection
under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case
No. 12-10219) on Jan. 17, 2012. The company is seeking
recognition of these proceedings with the Delaware Court in order
for the Canadian order under the CBCA to be recognized in the
United States.
The company will continue to operate and satisfy its obligations
to trade creditors, customers, employees and retirees in the
ordinary course of business during this restructuring process.
As reported by the Troubled Company Reporter, Catalyst on Dec. 15,
2011, deferred a US$21 million interest payment on its outstanding
11.00% Senior Secured Notes due 2016 and Class B 11.00% Senior
Secured Notes due 2016 due on Dec. 15, 2011. Catalyst said it was
reviewing alternatives to address its capital structures and it is
currently in discussions with noteholders. Perella Weinberg
Partners served as the financial advisor.
Reuters relates Catalyst last week said it had entered into a
restructuring agreement, which will see its bondholders taking
control of the company and includes an exchange of debt for
equity. The agreement said it would slash the company's debt by
C$315.4 million ($311 million) and reduce its cash interest
expenses. Catalyst also said it will continue to "operate and
satisfy" its obligations to customers, trade creditors, employees
and retirees in the ordinary course of business during the
restructuring process.
Reuters notes Catalyst Paper joins a line of paper producers that
have succumbed to higher costs, increased competition from Asia
and Europe, and falling demand as more advertisers and readers
move online. Last year, Cerberus Capital-backed NewPage Corp.
filed for bankruptcy protection, followed by SP Newsprint Co.,
owned by newsprint magnate and fine art collector Peter Brant. In
December, Wausau Paper said it will close its Brokaw mill in
Wisconsin, cut 450 jobs and exit its print and color business.
About Catalyst Paper
Catalyst Paper -- http://www.catalystpaper.com/-- manufactures
diverse specialty mechanical printing papers, newsprint and pulp.
Its customers include retailers, publishers and commercial
printers in North America, Latin America, the Pacific Rim and
Europe. With four mills, located in British Columbia and Arizona,
Catalyst has a combined annual production capacity of 1.9 million
tons. The Company is headquartered in Richmond, British Columbia,
Canada and its common shares trade on the Toronto Stock Exchange
under the symbol CTL.
The Company's balance sheet at Sept. 30, 2011, showed
C$1.45 billion in total assets, C$1.31 billion in total
liabilities, and C$135.60 million in shareholders' equity.
CATALYST PAPER: Moody's Lowers Corporate Family Rating to 'Ca'
--------------------------------------------------------------
Moody's Investors Service downgraded Catalyst Paper Corporation's
(Catalyst) corporate family (CFR) and probability of default (PDR)
rating to Ca from Caa3, senior secured notes rating to Caa3 from
Caa2, and senior unsecured notes rating to C from Ca. The
company's speculative grade liquidity rating remains SGL-4 and the
ratings remain on review for possible further downgrade. The
rating action reflects the company's announcement that it intends
to implement a recapitalization through a plan of arrangement
under the Canada Business Corporations Act (CBCA).
RATINGS RATIONALE
Catalyst's Ca CFR reflects the likelihood of either a financial
restructuring resulting in an economic loss to bond holders, or a
filing for creditor protection. The company intends to implement a
recapitalization through a plan of arrangement under the Canada
Business Corporations Act. In the event that the approvals
required to complete the recapitalization are not obtained, the
company has stated its intention to implement the recapitalization
pursuant to the Companies' Creditors Arrangement Act (CCAA).
The company's proposed recapitalization plan includes an exchange
of debt for equity for both the senior secured and senior
unsecured notes, which Moody's would consider to be a distressed
exchange, representing a default.
In addition, Catalyst deferred $21 million of interest payments
due on its senior secured notes on December 15, 2011. The company
reports that a portion of both its senior secured and senior
unsecured bondholders have agreed to forbear from taking any legal
action until January 31, 2012 for the missed coupon payment.
Should the company not make the deferred interest payment within
the grace period, which expires January 18, 2012, Moody's will
lower the PDR to LD.
Should the proposed recapitalization transaction close, or should
the company pursue protection under the CCAA, Moody's will lower
the PDR to D and subsequently withdraw the company's ratings.
An upward change in the rating seems unlikely at present.
Downgrades:
Issuer: Catalyst Paper Corporation
-- Probability of Default Rating, Downgraded to Ca from Caa3
-- Corporate Family Rating, Downgraded to Ca from Caa3
-- Senior Secured Regular Bond/Debenture, Downgraded to Caa3
from Caa2
-- Senior Unsecured Regular Bond/Debenture, Downgraded to C
from Ca
The last rating action for the company took place on December
15th, 2011 when the corporate family rating and probability of
default rating was lowered to Caa3 from Caa1.
The principal methodology used in rating Catalyst was the Global
Paper and Forest Products Industry Methodology published in
September 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.
Headquartered in Richmond, British Columbia, Catalyst is a
producer of specialty printing papers, newsprint and pulp. With
four mills located in British Columbia and Arizona, Catalyst has a
combined annual production capacity of 1.9 million tonnes. For the
last-twelve months ending September 2011, the company generated
revenues of approximately C$1.3 billion.
CDC CORP: Committee Seeks to Retain Troutman Sanders as Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of CDC Corporation
seeks permission from the U.S. Bankruptcy Court for the Northern
District of Georgia to retain Troutman Sanders LLP as its counsel.
The Committee hired the firm to:
(a) provide legal advice with respect to the Committee's rights
and duties under the Bankruptcy Code and the Bankruptcy
Rules;
(b) prepare on behalf of the Committee necessary motions,
applications, orders, reports, pleadings, and other legal
papers;
(c) appear before the Court and the United States Trustee to
represent and protect the interests of the Committee;
(d) represent the Committee and assist with and participate in
negotiations with the Debtor, creditors, and other parties-
in-interest in formulating a plan of reorganization,
drafting such a plan and related disclosure statement, and
taking necessary steps to confirm such a plan;
(e) represent the Committee and assist with and participate in
negotiation with the Debtor, creditors, and other parties-
in-interest for the sale or use of any of the Debtor's
assets, including the formulation of any necessary
documents required to execute any sale or use of the
Debtor's assets;
(f) represent the Committee and assist with and participate in
negotiations with potential financing sources for the
Debtor;
(g) represent the Committee in all adversary proceedings,
contested matters, and other matters involving the
administration of the Debtor's case in which the Committee
has interest; and
(h) perform other legal services that may be necessary for the
preservation of the Committee's rights and interests in the
Debtor's Chapter 11 case.
Troutman Sanders' billing rates for the partners and senior
counsel expected to render services in this representation range
from $325 to $750 per hour, for associates from $210 to $535 per
hour, and for para-professionals from $125 to $275 per hour.
The firm also will seek reimbursement for its expenses including,
messengers, courier mail, computer assisted legal research,
transportation and lodging.
To the best of the Committee's knowledge, Troutman Sanders is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About CDC Corp
Based in Atlanta, CDC Corp. (Nasdaq: CHINA) --
http://www.cdccorporation.net/-- is the parent company of CDC
Software (Nasdaq: CDCS). CDC Software is based dually in
Shanghai, China, and Atlanta and produces enterprise software
applications, IT consulting services, outsourced applications
development and IT staffing. The company's owners include Asia
Pacific Online Ltd., Xinhua News Agency and Evolution Capital
Management.
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. Moelis & Company LLC
serves as its financial advisor and investment banker. Marcus A.
Watson at Finley Colmer and Company serves as chief restructuring
officer. The Debtor estimated assets and debts at $100 million
to $500 million as of the Chapter 11 filing.
CDC CORP: Sues Subsidiary CDC Software to Stop Sale
---------------------------------------------------
Dow Jones' DBR Small Cap reports that CDC Corp. sued one of its
subsidiaries to block the acquisition of two companies by a
private investment firm, arguing that the sale of these companies
would cause CDC Corp. shareholders to "lose substantial value,
perhaps irretrievably."
About CDC Corp.
Based in Atlanta, CDC Corp. (Nasdaq: CHINA) --
http://www.cdccorporation.net/-- is the parent company of CDC
Software (Nasdaq: CDCS). CDC Software is based dually in
Shanghai, China, and Atlanta and produces enterprise software
applications, IT consulting services, outsourced applications
development and IT staffing. The company's owners include Asia
Pacific Online Ltd., Xinhua News Agency and Evolution Capital
Management.
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. Moelis & Company LLC
serves as its financial advisor and investment banker. Marcus A.
Watson at Finley Colmer and Company serves as chief restructuring
officer. The Debtor estimated assets and debts at $100 million
to $500 million as of the Chapter 11 filing.
CENTURION PROPERTIES: Court OKs Cash Access Until March 31
----------------------------------------------------------
Judge Frank L. Kurtz granted Centurion Properties III, LLC,
authority to access cash collateral of General Electric Capital
Corporation through March 31, 2012.
The court's Dec. 30 order comes upon a sixth stipulation of the
parties for continued cash collateral use by the Debtor.
As reported by the Troubled Company Reporter on Jan. 19, 2012, the
Debtor will use the cash collateral to administer the estate, meet
contractual obligations, and meet payments of creditors associated
with post-confirmation operations.
Moreover, as adequate protection from diminution in value of the
lender's collateral, the Debtor will make adequate protection
payments to GECC of $330,000 per month.
About Centurion Properties
Kennewick, Washington-based Centurion Properties III, LLC, was
established in 2006 for the sole purpose of acquiring real estate
project Battelle Leaseholds located in Richland, Washington. Its
sole asset is its leasehold interests in the Battelle Memorial
Institute Campus and improvements, valued in excess of
$90 million.
CPIII filed for Chapter 11 bankruptcy protection (Bankr. E.D.
Wash. Case No. 10-04024) on July 9, 2010, with Judge Frank Kurtz
presiding. John D. Munding, Esq., at Crumb & Munding, assists the
Company in its restructuring effort. The United States Trustee
was unable to appoint a creditors committee in the case. The
Company estimated its assets and debts at $50 million to $100
million.
The second amended version of the Debtor's plan was confirmed by
Judge Kurtz on Dec. 15, 2011.
CHARTER SCHOOL: S&P Cuts Educational Revenue Bond Rating to 'BB'
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on Yonkers
Economical Development Corp., N.Y.'s educational revenue bonds,
issued for the Charter School of Educational Excellence, N.Y. to
'BB' from 'BB+'.
"The downgrade reflects our opinion of the school's June 2012
projected ending cash balance of $1,277 due to more than $1
million in extra payments to vendors resulting from the September
bankruptcy of the lead developer of the school's new building
project," said Standard & Poor's credit analyst Sharon
Gigante. "Management expected completion of the new school
building in June of 2010 with all students in kindergarten through
eighth-grade starting the 2011-2012 school year in the new
building; however, due to the unanticipated cost overruns, delays
in construction and the bankruptcy of the developer, the new
school building did not open until January 2012," said Ms.
Gigante.
The school has received a temporary certificate of occupancy.
In Standard & Poor's opinion, credit strengths, which preclude a
lower rating, at this time, include the school's:
Solid enrollment history and a large waiting list;
Good academic performance;
Adequate 1.03x coverage of maximum annual debt service by
fiscal 2011 net operating revenues, despite the weak liquidity
position caused by capital expenditures; and
Good report from the school's authorizer, the New York Board
of Regents.
The stable outlook reflects Standard & Poor's expectation that the
school will receive a full certificate of occupancy and increase
cash to 2009-2010 levels. According to Standard & Poor's, the
school needs future enrollment increases to be at or near
projected levels for the school to generate adequate per
pupil revenues and sufficient debt service coverage. Standard &
Poor's could consider a lower rating if the school does not
receive a full certificate of occupancy and the school is unable
to increase its cash position.
CHERUPUSHPAM LLC: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Cherupushpam LLC
1921 23rd Street
Everett, WA 98201
Bankruptcy Case No.: 12-10284
Chapter 11 Petition Date: January 12, 2012
Court: U.S. Bankruptcy Court
Western District of Washington (Seattle)
Judge: Karen A. Overstreet
Debtor's Counsel: Douglas E. Schwed, Esq.
SCHWED LAW OFFICES
10900 NE 4th Street, #2300
Bellevue, WA 98004
Tel: (425) 440-2515
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Joy Pazhampassery, managing member.
CIT GROUP: To Redeem $500MM of Second Lien Notes Due 2016
---------------------------------------------------------
CIT Group Inc. will redeem an additional $500 million of 7% Series
A Second Lien Notes maturing in 2016 with cash on hand. Following
this redemption, roughly $1 billion principal amount of the Notes
maturing in 2016 and roughly $2.9 billion principal amount of the
Notes maturing in 2017 will remain outstanding.
"Our decision to eliminate another $500 million of high cost debt
will further reduce our funding costs and benefit our net interest
margin and profitability," said John A. Thain, Chairman and Chief
Executive Officer.
Including the Series A redemption, CIT will have eliminated or
refinanced roughly $18 billion of first lien and second lien debt
since the beginning of 2010, including $7.5 billion of first lien
debt, roughly $8.3 billion of Series A Notes and its entire $2.1
billion of Series B Notes.
The Company has provided a redemption notice for the Series A
Notes to the trustee and intends to complete the Series A
redemption on Feb. 21, 2012. As provided under the terms of the
Series A Notes, the Notes will be redeemed at par and will be
redeemed on a pro-rata basis among all of the 2016 Series A Notes.
CIT Group may be reached through C. Curtis Ritter and Matt Klein
(Media Relations) -- Curt.Ritter@cit.com and Matt.Klein@cit.com --
or Ken Brause (Investor Relations) -- Ken.Brause@cit.com
About CIT Group
Founded in 1908, CIT Group (NYSE: CIT) -- http://www.cit.com/
-- is a bank holding company with more than $34 billion in
financing and leasing assets. A member of the Fortune 500, it
provides financing and leasing capital to its more than one
million small business and middle market clients and their
customers across more than 30 industries.
CIT Group Inc. and affiliate CIT Group Funding Company of Delaware
LLC filed for Chapter 11 (Bankr. S.D.N.Y. Case No. 09-16565) on
Nov. 1, 2009, with a prepackaged Chapter 11 plan of
reorganization. Evercore Partners, Morgan Stanley and FTI
Consulting served as the Company's financial advisors and Skadden,
Arps, Slate, Meagher & Flom LLP served as legal counsel in
connection with the restructuring plan. Sullivan & Cromwell
served as legal advisor to CIT's Board of Directors.
The Court validated the vote of CIT's impaired classes of
creditors and confirmed the Plan on Dec. 8, 2009. The Plan
provided for the conversion to equity or reinstatement of seven
classes of debt issued primarily in the form of notes and
debentures; one class of unsecured notes was exchanged for new
debt. General unsecured creditors, including holders of claims
arising from the rejection of executory contracts, were paid in
full and deemed unimpaired. Holders of preferred and common
stock, as well as subordinated claims, received no recovery.
CIT emerged from bankruptcy protection on Dec. 11, 2009.
* * *
In May 2011, Moody's Investors Service upgraded CIT Group Inc.'s
Corporate Family Rating to 'B2' from 'B3'. The rating outlook is
stable. The upgrade reflects the progress CIT has made addressing
its most immediate organizational, operational, and financial
challenges subsequent to its bankruptcy reorganization in December
2009. Moody's, however, notes that CIT's weak margins and
uncertainty regarding the pace and adequacy of future margin
improvements are constraints on the firm's ratings.
As reported by the Troubled Company Reporter on Aug. 7, 2011,
Dominion Bond Rating Service affirmed CIT's ratings, including its
Issuer Rating of B (high), unchanged following the Company's
second quarter 2011 financial results.
CITIZENS CORP: Files List of 19 Largest Unsecured Creditors
-----------------------------------------------------------
Citizens Corporation has filed with the U.S. Bankruptcy Court for
the Middle District of Tennessee a list of its 19 largest
unsecured creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
BBC Holdings
101 Forrest Crossing Boulevard
Suite 100
Franklin, TN 37064 Working Capital $284,000.00
Peoples State Bank of Commerce
P.O. Box 307
Nolensville, TN 37135 $108,056.42
Peoples State Bank of
Commerce
MasterCard
5399 Main Street
Grant, AL 35747 Credit Card $70,719.21
AT&T Telephone Services $35,000.00
Alexander Thompson Arnold PLLC Accounting Services $23,727.19
PBLF Co-Landlord $22,797.10
Taylor Consulting Group, Inc. Valuation Advisory
Services $11,339.73
Baker Donelson Bearman Caldwell Legal
& Berkow Services $6,131.67
FedEx $291.76
Cisco Capital Leased Equipment $45,000.00
(Unknown
secured)
Tennessee Commerce Bank $17,259,871.00
(Unknown
secured)
US Bancorp Equipment Finance Leased Equipment $13,897.36
(Unknown
secured)
About Citizens Corp.
Franklin, Tennessee-based Citizens Corp. operates a mortgage
brokerage business. Citizens Corp. filed for Chapter 11
bankruptcy (Bankr. M.D. Tenn. Case No. 11-11792) on Nov. 28, 2011.
Judge George C. Paine, II presides over the case. Robert J.
Mendes, Esq., at MGLAW, PLLC, serves as the Debtor's counsel. In
its petition, the Debtor estimated $10 million to $50 million in
assets and debts. Marion Ed Lowery, a former owner of Peoples
State Bank of Commerce of Nolensville and various other entities,
serves as chairman of the company. He signed the Chapter 11
petition.
Lenders Tennessee Commerce Bank is represented by David W.
Houston, IV, Esq., at Burr & Forman LLP.
CITIZENS DEVELOPMENT: To File New Chapter 11 Plan
-------------------------------------------------
Aviva Gat at The Deal Pipeline reports that Citizens Development
Corp. will file a new reorganization plan and disclosure statement
after settling with a secured creditor.
According to the report, CDC and Telesis Community Credit Union
resolved a seven-month dispute over the debtor's use of its cash
collateral and the lender's request to foreclose on the debtor's
Lake San Marcos, California, property in a stipulation filed and
approved Jan. 11, 2012, by Judge Laura S. Taylor of the U.S.
Bankruptcy Court for the Southern District of California in San
Diego.
The report says, under the stipulation, CDC can use Telesis' cash
collateral through Feb. 29, 2012, so long as the debtor files a
new plan incorporating their agreement by Feb. 17, 2012.
Documents show a hearing on the related disclosure statement would
be scheduled once the plan is filed.
The report says Judge Taylor was set to consider CDC's previous
disclosure statement on Jan. 13, 2012, but the court vacated the
hearing.
The report further says the settlement also calls for Telesis to
have a $5.3 million allowed claim, of which $4.7 million will be
secured. Telesis will waive the unsecured amount if CDC "fully and
timely performs all its obligations" under the settlement,
documents show. For its claim, Telesis will receive a loan that
will accrue interest at 5.25% and mature Nov. 30, 2016.
The Deal says CDC also must make monthly deposits of $3,392 and
$3,284, respectively, in two accounts with Telesis to fund repairs
at the debtor's resort. The debtor can draw from the accounts
with the lender's approval. The lender can also direct CDC to use
the funds for certain repairs.
CDC and affiliates LSM Hotel LLC, LSM Country Club LLC, and LSM
Executive Course LLC own and operate the Lake San Marcos Resort &
Country Club, on the shore of the 80-acre Lake San Marcos about 30
miles north of San Diego. The 252-acre resort has a 139-room
hotel, meeting and banquet space, two 18-hole golf courses with a
clubhouse and pro-shop, a fitness center, four tennis courts, two
outdoor swimming pools and three restaurants.
LSM Executive Course, which owns the golf courses, filed for
Chapter 11 on April 30, 2010. LSM Hotel and CDC followed, filing
for Chapter 11 on July 26, 2010, and Aug. 26, 2010, respectively.
LSM Country Club did not file for bankruptcy.
The report says the estates of the four resort owners were
substantively consolidated under a Jan. 27, 2011, court order.
LSM Executive Course's bankruptcy is proceeding separately.
The report notes Telesis holds a lien on the country club,
consisting of a recreation center, the pools, tennis courts and
docks for boat rentals and fishing. Telesis lent CDC $4.74
million on July 29, 2008. The loan matured in August 2009 and CDC
could not repay it. Telesis then filed a lawsuit in the San Diego
Superior Court on April 5, 2010, seeking repayment, leading to
CDC's bankruptcy petition.
The report recounts that Telesis had sought relief from the
automatic Chapter 11 stay to foreclose on the recreation center,
valuing the property at $4.7 million. In its June 30 disclosure
statement, CDC valued the recreation center at $1.5 million to $2
million. The parties commenced negotiations over Telesis'
request, leading to the January 11 agreement.
According to the Deal, earlier in the case, CDC settled with
Symphony Asset Pool X LLC, resulting in the creditor foreclosing
on the debtor's hotel on June 1, 2011. The debtor filed the
settlement on April 27, and the court approved it on May 31, 2011.
CDC allowed Symphony to foreclose on the hotel in return for a
$200,000 cash payment. Symphony also had to enter into a lease
agreement with LSM Hotel and pay the estate $1,000 on a monthly
basis for its nonexclusive right to use the debtor's signage
parcels, which advertise the resort at the intersection of Rancho
Santa Fe Road and Lake San Marcos Road. Symphony also agreed to
support the debtor's plan.
The report says Symphony's claim arose from a $11.35 million loan
extended by First National Bank to LSM Hotel on June 13, 2006.
The note was transferred to Pacific Western Bank and then to
German American Capital Corp., which notified the debtor of a
default in February 2010 and subsequently filed a complaint
against LSM Hotel and president Matthew C. DiNofia in the San
Diego Superior Court on July 2, 2010. The suit alleged breach of
guaranty by Mr. DiNofia and sought the appointment of a receiver
and the ability to foreclose.
The report says California Credit Union holds a lien on the
country club, which consists of one golf course, the clubhouse,
pro-shop and one restaurant, from a $6 million secured loan. The
loan was made to LSM Country Club and is not in default. The
substantive consolidation order made the debtor affiliates
responsible for the loan, and the debtor plans to modify it,
according to the previous disclosure statement.
According to the report, the old plan says CDC aims to reopen the
Quail Restaurant, which had closed in January 2009. The debtor
tried to rent out the 150-seat lakefront venue but could not find
a tenant and has alternatively explored reopening the space. D&A
Semi Annual Mortgage Fund III LC holds a lien on the property from
a $1.55 million loan, which matured in March 2009. D&A has agreed
to modify its loan under the plan, according to the report.
The report notes the June 30 plan contemplates a $250,000
contribution from LDG Golf Marketing LLC in exchange for 100% of
the debtor's equity. Christopher DiNofia, the brother of CDC's
owner, owns the new entity, and both brothers would contribute
portions of the investment.
The report further says, under the old plan, unsecured creditors,
owed between $3.6 million and $7.4 million, would have received a
pro rata share of $50,000 and net recoveries obtained by the
debtor from avoidance actions. In the June 30 disclosure
statement, CDC valued its assets at $11.4 million and its
liabilities at $17.9 million to $21.6 million.
About Citizens Development Corp.
San Marcos, California-based Citizens Development Corp., owns and
operates the Lake San Marcos Resort and Country Club located in
San Diego County. The Company filed a voluntary petition for
relief under Chapter 11 (Bankr. S.D. Calif. Case No. 10-15142) on
August 26, 2010. Ron Bender, Esq., at Levene, Neale, Bender, Yoo
& Brill LLP, represents the Debtor. The Debtor estimated its
assets and debts at $10 million to $50 million.
Chapter 11 petitions were also filed by affiliates LSM Executive
Course, LLC (Bankr. S.D. Calif. Case No. 10-07480), and LSM Hotel,
LLC (Bankr. S.D. Calif. Case No. 10-13024).
COLOWYO COAL: S&P Raises Rating on $100-Mil. Bonds From 'BB-'
-------------------------------------------------------------
Standard & Poor's Ratings Services raised its rating to 'A' from
'BB-' on Colowyo Coal Funding Corp.'s $100 million 10.19%
amortizing bonds due Nov. 15, 2016 ($34.47 million outstanding).
The outlook is stable. Colowyo Coal Funding's $92.8 million
9.56% amortizing bonds were paid in full on the due date of Nov.
15, 2011.
In December 2011, the project was acquired by Western Fuels-
Colorado LLC (WFC), a subsidiary of Tri-State Generation and
Transmission Assn. (Tri-State; A/Stable), from the previous owner,
Rio Tinto.
"The rating action reflects our view of the unconditional
guarantee of Colowyo's debt obligations by Tri-State," said
Standard & Poor's credit analyst Ben Macdonald. The rating on the
project is now linked to that on Tri-State.
The Colowyo project securitizes revenue from several long-term
coal sales contracts expiring in 2017, net of transfer payments to
the project's two equity partners. The trustee is the Bank of New
York Mellon.
Prior to the acquisition, the project operating company, Colowyo
Coal Co L.P., was owned by Kennecott Colorado Coal Inc. (20%) and
Rio Tinto White Horse Co. (80%). Each of these companies was owned
by Rio Tinto Energy America Inc.
In the transaction, Rio Tinto sold both of these companies to WFC,
a Colorado company 99% owned by Tri-State and 1% owned by Western
Fuels Association Inc. The two intermediate companies were renamed
Axial Basin Coal Co. (20% owner) and Taylor Creek Holding Co. (80%
owner) because they no longer have any economic connection to Rio
Tinto or Kennecott. Rio Tinto White Horse Co. had held $65 million
of the bonds, and WFC canceled these bonds shortly after the
acquisition.
Project documents restrict the project from issuing new debt, so
any future capital expenditure at the mine would be funded by Tri-
State outside the existing project structure.
The letter of credit (LOC) with Banco Bilbao Vizcaya Argentaria
S.A. was terminated and drawn amounts repaid as part of the
acquisition. Colowyo Coal Co. entered into a new LOC issued by
Bank of America N.A. (A/Negative/A-1) for $18.3 million, which was
the same as the undrawn balance of the previous LOC. Finally, Tri-
State provided an unconditional guarantee to the bondholders of
Colowyo Coal Funding Corp.
"The company had previously operated with a coverage ratio close
to 1x. The ratio would frequently fall to less than 1x, and the
company would draw on the LOC to cover shortfalls. The LOC had
sufficient funds to allow the bonds to pay in full if the debt
coverage from operations averaged at least 0.89x. Following the
acquisition and cancelation of 65% of the bonds, future debt
repayments have been reduced by the same percentage, and we
anticipate that the debt service coverage ratio will range from
2.2x to 3.0x for the term of the debt. Debt service is payable on
May 15 and Nov. 15 of each year," S&P said.
"The project's principal liquidity is in the form of an
irrevocable standby debt service LOC provided by the Los Angeles
branch of Bank of America N.A. for the benefit of the trustee, to
be repaid by Tri-State. To fully drain this LOC prior to debt
maturity, the project would have to generate annual revenues that
are less than 24% of the average annual revenues achieved over the
past four years. This liquidity is unlikely to be called through
the life of the bonds because we do not anticipate that debt
service coverage will fall to less than 2.2x. In case the LOC is
fully drawn, the project is further backed by an unconditional
guarantee by Tri-State," S&P said.
"The stable outlook reflects our view of Tri-State's capacity to
support its guarantee. In addition, with the reduction in project
debt, good operational performance, and historically stable cash
flow, the project has strong creditworthiness on a stand-alone
basis," S&P said.
Ratings List
Upgraded
To From
Colowyo Coal Funding Corp.
$100 mil amortizing bds A BB-
COMMERCIAL VEHICLE: Arnold Siemer Discloses 10.5% Equity Stake
--------------------------------------------------------------
In a Schedule 13G filing with the U.S. Securities and Exchange
Commission, Arnold B. Siemer disclosed that, as of Jan. 17, 2012,
he beneficially owns 3,058,748 shares of common stock of
Commercial Vehicle Group, Inc., representing 10.52% of the shares
outstanding. Mr. Siemer is a director of the Company. A full-
text copy of the filing is available at http://is.gd/JsPdHa
About Commercial Vehicle Group
New Albany, Ohio-based Commercial Vehicle Group, Inc., (Nasdaq:
CVGI) supplies fully integrated system solutions for the global
commercial vehicle market, including the heavy-duty truck market,
the construction and agricultural markets, and the specialty and
military transportation markets. The Company has facilities
located in the United States in Arizona, Indiana, Illinois, Iowa,
North Carolina, Ohio, Oregon, Tennessee, Virginia and Washington
and outside of the United States in Australia, Belgium, China,
Czech Republic, Mexico, Ukraine and the United Kingdom.
The Company's balance sheet at Sept. 30, 2011, showed
$400.79 million in total assets, $391.26 million in total
liabilities and $9.52 million total stockholders' investment.
* * *
In the Oct. 4, 2011, edition of the TCR, Moody's Investors Service
upgraded Commercial Vehicle Group, Inc.'s Corporate Family Rating
to B2 from B3, and Probability of Default Rating to B2 from B3.
The B2 CFR reflects modest size, relatively high debt leverage,
and exposure to highly cyclical commercial vehicle end markets.
Demand for commercial vehicle components is primarily sensitive to
economic cycles, fleet age, and regulatory implementation
schedules. The CFR considers the substantial cash balance and
absence of funded debt maturities until 2019. Moody's recognizes
CVGI's demonstrated ability to manage its cost structure and
working capital position to minimize cash burn in a challenging
economic environment. Moody's believes the company is positioned
to benefit from additional modest improvement in commercial
vehicle build rates at least through mid 2012 and has sufficient
liquidity to support associated working capital needs.
As reported by the TCR on April 12, 2011, Standard & Poor's
Ratings Services said it raised its corporate credit rating on New
Albany, Ohio-based Commercial Vehicle Group Inc. (CVG) to 'B-'
from 'CCC+'. "The upgrade reflects our assumption that CVG can
improve EBITDA and cash flow in the next two years, because we
believe commercial truck production volumes will continue to rise
year-over-year in 2011 and 2012," said Standard & Poor's credit
analyst Nancy Messer. Heavy-duty truck production increased by a
meaningful 30% in 2010, leading to a 30% year-over-year sales
increase.
CROSS BORDER: Red Mountain Discloses 38.1% Equity Stake
-------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Red Mountain Resources, Inc., and its
affiliates disclosed that, as of Jan. 10, 2012, they beneficially
own 6,973,589 shares of common stock of Cross Border Resources,
Inc., representing 38.1% of the shares outstanding. As previously
reported by the TCR on Dec. 21, 2011, Red Mountain disclosed
beneficial ownership of 6,672,660 shares. A full-text copy of the
filing is available for free at http://is.gd/A4XaRq
About Cross Border Resources
Cross Border Resources, Inc. f/k/a Doral Energy Corp. (OTC BB:
DRLY) -- http://www.DoralEnergy.com/-- is a licensed oil and gas
operator in the state of New Mexico. The Company is headquartered
in Midland, Texas.
The Company's balance sheet at Sept. 30, 2011, showed
$25.92 million in total assets, $7.88 million in total liabilities
and $18.04 million in total stockholders' equity.
As reported in the Troubled Company Reporter on Nov. 23, 2010,
MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt
about Doral Energy's ability to continue as a going concern
following the Company's results for the fiscal year ended July 31,
2010. The independent auditors noted that the Company has
negative working capital and recurring losses from operations.
DE TECHNOLOGIES: Amends List of Largest Unsecured Creditors
-----------------------------------------------------------
DE Technologies, Inc., has filed with the U.S. Bankruptcy Court
for the Western District of Virginia a list of its largest
unsecured creditors, adding these four creditors to the list:
Revenu Quebec, Michael B. Cooke, IShop USA, Inc., and
International Checkout, Inc.
Debtor's Amended List of Its Nine Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Joyce King
450 North Barfield Drive
Marko Island, FL 34145 Loan $175,000.00
Estate of James Ruble
c/o Helen Ruble
1941 June Drive
Roanoke, VA 24019 Loan $165,000.00
France Charbonneau
2332 Boulevard Marie Victorin
Longueuil, Quebec J4G 1B4 Loan $52,500.00
Lev Intellectual Property Consulting Legal Services $30,000.00
Revenue Quebec Unknown $10,262.50
Michael B. Cooke, CPA Accounting
Services $0.00
IShop USA, Inc. Counterclaim Unknown
International Checkout, Inc. Counterclaim Unknown
Altitude Tech, LLC Agreement Unknown
About DE Technologies
Headquartered in Blacksburg, Virginia, DE Technologies, Inc. --
http://www.detechnologies.com/-- provides international
electronic order entry systems. Its Borderless Order Entry System
(BOESTM) allows merchants to conduct a seamless international
transaction from EXW (Ex Works) through DDP (Delivered Duty Paid)
including intermediary steps. DE Technologies was founded by Ed
Pool.
DE Technologies filed for Chapter 11 bankruptcy (Bankr. W.D. Va.
Case No. 11-72430) on Dec. 5, 2011. Judge Ross W. Krumm presides
over the case. Benjamin Webb King, Esq., at Woods Rogers PLC,
serves as the Debtor's counsel. In its petition, the Debtor
estimated $10 million to $50 million in assets and $1 million to
$10 million in debts.
DELTATHREE INC: Peter Friedman to Resign as Counsel & Secretary
---------------------------------------------------------------
Peter Friedman tendered his resignation as General Counsel and
Secretary of deltathree, Inc., to pursue other opportunities. The
resignation will be effective Feb. 14, 2012. The Company has
begun exploring different options how best to carry out Mr.
Friedman's duties and responsibilities following his departure.
About deltathree
Based in New York, deltathree, Inc. (OTC QB: DDDC) --
http://www.deltathree.com/-- is a global provider of video and
voice over Internet Protocol (VoIP) telephony services, products,
hosted solutions and infrastructures for service providers,
resellers and direct consumers.
The Company reported a net loss of $2.5 million on $14.2 million
of revenue for 2010, compared with a net loss of $3.2 million on
$19.0 million of revenue for 2009.
The Company also reported a net loss of $2.46 million on
$8.20 million of revenue for the nine months ended Sept. 30, 2011,
compared with a net loss of $2.01 million on $9.98 million of
revenue for the same period during the prior year.
The Company's balance sheet at Sept. 30, 2011, showed
$1.63 million in total assets, $5.47 million in total liabilities
and a $3.84 million total stockholders' deficiency.
As reported in the TCR on March 23, 2011, Brightman Almagor Zohar
& Co., in Tel Aviv, Israel, expressed substantial doubt about
deltathree, Inc.'s ability to continue as a going concern,
following the Company's 2010 results. The independent auditors
noted that of the Company's recurring losses from operations and
deficiency in stockholders' equity.
Bankruptcy Warning
In view of the Company's current cash resources, nondiscretionary
expenses, debt and near term debt service obligations, the Company
may begin to explore all strategic alternatives available to it,
including, but not limited to, a sale or merger of the Company, a
sale of its assets, recapitalization, partnership, debt or equity
financing, voluntary deregistration of its securities, financial
reorganization, liquidation or ceasing operations. In the event
that it is unable to secure additional funding, the Company may
determine that it is in its best interests to voluntarily seek
relief under Chapter 11 of the U.S. Bankruptcy Code. Seeking
relief under the U.S. Bankruptcy Code, even if the Company is able
to emerge quickly from Chapter 11 protection, could have a
material adverse effect on the relationships between the Company
and its existing and potential customers, employees, and others.
Further, if the Company was unable to implement a successful plan
of reorganization, the Company might be forced to liquidate under
Chapter 7 of the U.S. Bankruptcy Code.
DIGITAL DOORSTEP: Files for Ch. 7; Plum District Refunds Customers
------------------------------------------------------------------
Plum District is fully refunding all customers who were unable to
fulfill their recent purchases offered through a merchant, Digital
Doorstep.
Plum District grew increasingly concerned with Digital Doorstep's
severe difficulties in processing and fulfilling customer orders
for the Starbucks/Fandango and Target/Restaurant.com gift cards,
and filed a lawsuit for breach of contract earlier this week. In
light of Digital Doorstep's announcement of their Chapter 7
bankruptcy filing this morning, the company chose to refund all
remaining unfulfilled purchases to ensure that all customers will
be made whole.
Plum District strives to "Make Mom's Day" through offers with
merchants that make moms' lives easier and more enjoyable. The
company is extremely disappointed that this merchant was unable to
provide the level of satisfaction that its moms expect and
deserve, and is focused on ensuring that customers receive full
refunds. Moving forward, it is strengthening internal controls to
ensure all merchant partners can help deliver experiences that
delight customers.
About Plum District
Plum District -- http://www.plumdistrict.com-- is the leading
local commerce destination for moms, by moms. Plum District is a
community of moms sharing offers from local and national merchants
for other moms to enjoy. P lum District puts Mom first by
connecting her with products and inspirations that make her life
easier.
DON MERTENS: Case Summary & 4 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Don Mertens Custom Homes, Inc.
P.O. Box 258
Andover, KS 67002
Bankruptcy Case No.: 12-40034
Chapter 11 Petition Date: January 12, 2012
Court: United States Bankruptcy Court
District of Kansas (Topeka)
Judge: Janice Miller Karlin
Debtor's Counsel: Todd Allison, Esq.
LAW OFFICE OF TODD ALLISON, PA
200 W Douglas, Suite 250
Wichita, KS 67202
Tel: (316) 558-3750
Fax: (316) 558-3753
E-mail: todd@toddallisonlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $0 to $50,000
A list of the Company's four largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/ksb12-40034.pdf
The petition was signed by Don Mertens, president.
DULCES ARBOR: Courts Dismisses Chapter 11 Bankruptcy Case
---------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Texas has
dismissed Dulces Arbor, S. De R.L. De C.V.'s Chapter 11 bankruptcy
case.
As reported by the Troubled Company Reporter, on Dec. 6, 2011,
Judy A. Robbins, U.S. Trustee for Region 7, asked the Court to
dismiss or convert the Debtor's Chapter 11 case to one under
Chapter 7 of the Bankruptcy Code, claiming that:
(a) The Bankruptcy Court, having granted relief from the
automatic stay to Maple Commercial Financial Corporation, no
longer offers the Debtor any protection from foreclosure by
Maple;
(b) The Debtor's operating reports for June 22, 2011, through
August 2011 revealed no income, and no operating reports
were filed for September or October 2011; and
(c) The Debtor, upon filing the case, disclosed $7,067,796 in
general unsecured debt -- $3,500,000 was listed as a
disputed debt to Maple, and an additional $3,338,850 was
scheduled as owed to members of the Ducorsky family or
entities that they own. The remaining $228,946 was
scheduled to non-insider individuals or entities. Non-
insider creditors equal less than ten percent of the general
unsecured debt.
The Debtor disagrees with some of the assertions, particularly the
importance of the $228,946 in non-insider debt, the extent of
relief from stay that was granted, and the possibility that the
Debtor could still reorganize. The Debtor has decided that, while
it might need the protection of the Bankruptcy Court in the
future, it doesn't need to continue under Chapter 11 of the
Bankruptcy Code at this time.
About Dulces Arbor
Dulces Arbor, S. de R.L. de C.V., aka Dulces Arbor, S.A. de C.V.,
is a Mexican corporation that has been doing business for years in
the greater El Paso-Ciudad Juarez area in Texas. It filed for
Chapter 11 bankruptcy (Bankr. W.D. Tex. Case No. 11-31199) on
June 22, 2011. Judge Leif M. Clark presides over the case.
In its petition, the Debtor estimated assets of $10 million to
$50 million, and debts of $1 million to $10 million. The petition
was signed by Raymond Ducorsky, sole administrator. Mr. Ducorsky
is also its largest unsecured creditor with a $2,300,000 claim.
The U.S. Trustee said that a committee was not appointed because
an insufficient number of persons holding unsecured claims against
the Debtor expressed interest in serving on a committee.
EAGLE INDUSTRIES: P. Gannott Substitutes as Committee's Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of Eagle Industries,
LLC, sought and obtained permission from the U.S. Bankruptcy Court
for the Western District of Kentucky to substitute counsel.
Accordingly, Peter M. Gannott, Esq., substituted as counsel of
record for the Committee in place of Alber Crafton, PSC. With
this representation, Mr. Gannott is acting as counsel for the
Committee in his individual capacity, not as a member of the law
firm Alber Crafton.
Mr. Gannott can be contacted at:
Peter M. Gannott, Esq.
12910 Shelbyville Road
Suite 115
P.O. Box 43755
Louisville, Kentucky 40243
Tel: (502) 749-8800
(205) 523-5062 (mobile)
E-mail: Pgannott@gannottlaw.com
About Eagle Industries LLC
Bowling Green, Kentucky-based Eagle Industries, LLC, is engaged in
furniture manufacturing, sales and delivery. Eagle Industries
filed for Chapter 11 bankruptcy protection (Bankr. W.D. Ky. Case
No. 10-11636) on Oct. 27, 2010. David M. Cantor, Esq., at Seiller
Waterman LLC, represents the Debtor. The Debtor estimated assets
and debts at $10 million to $50 million.
EAST HARLEM: Wants Exclusive Filing Period Extended Until May 12
----------------------------------------------------------------
East Harlem Property Holdings, LP, asks the U.S. Bankruptcy Court
for the Southern District of New York to extend its exclusive
periods to file a plan of reorganization and solicit acceptances
thereof through and including May 12, 2012 and July 11, 2012,
respectively.
The requested extensions will afford Debtor a reasonable amount of
time to (a) gains access to its own books and records; (b) review
those books and records; (c) file bankruptcy schedules of assets
and liabilities and a statement of financial affairs; (d) propose
a disclosure statement containing adequate information, including
an accurate assessment of the amounts of allowed claims against
the Debtor?s estate and to prepare and file a confirmable plan of
reorganization.
This motion is the Debtor's first request for an extension of
exclusivity.
About East Harlem
East Harlem Property Holdings, LP, is a limited partnership formed
in Delaware on March 13, 2007. The Debtor owns 100% of the
limited liability company membership interests in 27 special
purpose entities), which own, in the aggregate, approximately
1,200 residential units and 50 commercial units located within 47
buildings located in New York, New York. The Real Properties are
primarily located in an area bounded by 100th Street to the south,
188th Street to the north, Pleasant Avenue to the east and Park
Avenue to the west.
The Debtor filed for Chapter 11 relief (Bankr. S.D.N.Y. Case No.
11-14368) on Sept. 15, 2011. Judge James M. Peck presides over
the bankruptcy case. Salvatore LaMonica, Esq., and Jordan
Pilevsky, Esq., at Lamonica Herbst & Maniscalco, LLP, in Wantagh,
New York, represent the Debtor as counsel. In its petition, the
Debtor listed assets of between $100 million and $500 million and
debts of between $10 million and $50 million. The petition was
signed by Linda Greenfield, vice president of Harlem Housing, LLC,
sole and managing member of East Harlem GP, LLC, general partner.
EASTMAN KODAK: Files for Chapter 11 in Manhattan
------------------------------------------------
Eastman Kodak Company and its U.S. subsidiaries on Jan. 19
voluntarily filed for Chapter 11 reorganization in Manhattan.
Subsidiaries outside of the U.S. are not included in the filing
and will continue to operate as usual.
"The Chapter 11 process allows us to continue normal business
operations while we reorganize to bolster liquidity in U.S. and
abroad, monetize non-strategic intellectual property, fairly
resolve our legacy costs, and enable the Company to focus on our
most valuable business lines," Kodak said in a posting on its Web
site.
EASTMAN KODAK BANKRUPTCY NEWS (http://bankrupt.com/newsstand/or
215/945-7000) reports that the Company, founded in 1880 by George
Eastman, was once the world's leading producer of film and
cameras. In recent years, Kodak has been working to transform
itself from a business primarily based on film and consumer
photography to a smaller business with a digital growth strategy
focused on the commercialization of proprietary digital imaging
and printing technologies.
Having invested significantly in research and development for over
a century, Kodak has a vast portfolio of patents. In 1975, Kodak
scientists invented the first digital camera. Kodak then went on
to develop a vast collection of patented technologies to enhance
digital image capture and processing, technologies that are used
in virtually every modern digital camera, smartphone and tablet,
as well as numerous other devices.
Kodak has 8,900 patent and trademark registrations and
applications in the United States, as well as 13,100 foreign
patents and trademark registrations or pending registration in
roughly 160 countries.
From 2003 to 2010, Kodak negotiated roughly $3.0 billion of
licensing revenue from its digital capture patent portfolio;
however, the company only generated $98 million in licensing
revenue in 2011. The Company anticipates substantial future
revenue from licensing its intellectual property for use in
smartphones and tablets that employ digital cameras, as well as in
next-generation products that utilize Kodak technology, or from
the disposition of related patents to third parties.
Kodak, headquartered in Rochester, New York, has operations and
assets located throughout the world. Roughly 70% of Kodak's sales
and half of its employees are located outside the United States.
In fiscal year 2010, the Company earned roughly 57% of its revenue
abroad.
Most of the Company's research and development is performed in the
U.S., in Rochester, New York; Boston, Massachusetts; New Haven,
Connecticut; Dayton, Ohio; and San Jose, Emeryville and San Diego,
California. However, several comparatively smaller R&D operations
are located outside the U.S. in Canada, England, Israel, Germany,
Japan, China and Singapore.
Digital Transformation
At its peak in the early 1980s, the company employed 62,000 people
in Rochester and 130,000 worldwide. From 2003 to 2010, Kodak
reduced its workforce by 50,000 employees, and closed 13 of its 15
film plants and 130 photo labs.
Kodak has transitioned to a digital company as the market for film
based products has declined rapidly over the past 10 years. The
transition reduced the workforce to 17,000 employees in 2011, and
led to a financially smaller Kodak, with revenues declining from
roughly $13.3 billion in 2003 to about $6.0 billion in 2011.
Kodak's digital businesses generated roughly 75%, or $4.5 billion,
of Kodak's revenue in fiscal year 2011. Kodak's digital products
include consumer devices such as self-service photo kiosks and ink
jet printers, and business-to-business products and services such
as its technologically advanced PROSPER commercial inkjet printing
systems, electrophotographic printing systems, digital printing
plates, high-volume document scanners and new technologies related
to packaging and workflow software solutions.
Since initiating its digital transformation strategy in 2003,
Kodak has generated roughly $4.0 billion from the sale of assets
and businesses, including the Health Group, Remote Sensing
Systems, HPA, Light Management Films, Image Sensor Solutions,
Eastman Gel, Silver Operations, a variety of chemical operations,
OLED and Kodak's ownership interest in Lucky Film.
Since 2008, despite Kodak's best efforts, restructuring costs and
recessionary forces have continued to negatively impact the
Company's liquidity position, ultimately leading to the
commencement of these chapter 11 cases.
In 2011, Kodak took actions to enhance its cash position,
including: (i) issuing $250 million in senior secured notes due
2019; (ii) entering into a second amended and restated credit
agreement with its lenders that facilitated a draw of roughly $160
million; and (iii) selling certain non-strategic businesses and
assets.
The Company's transition to a digital business, however, has been
interrupted by a liquidity shortfall, primarily in the United
States. Kodak also said its liquidity has been impaired further
by difficulties collecting licensing fees from infringers of
Kodak's intellectual property, who Kodak believes have employed a
strategy of delay in light of Kodak's liquidity position, and by
substantial foreign and U.S. legacy costs.
Imaging Portfolio
As announced publicly on July 20, 2011, the Company has been
exploring, and continues to explore, strategic alternatives
related to its digital capture and imaging systems and services
portfolios of roughly 1,150 patents with related foreign and
pending applications. The Imaging Portfolio pertains to
capturing, processing, storing, organizing, editing, sharing and
monetizing digital images, and is fundamental to the digital
imaging industry, including the cell phone, tablet and social
networking markets. The Imaging Portfolio comprises one of the
world's richest collections of imaging-related intellectual
property, reflecting decades of scientific innovation and billions
of dollars of investment in R&D.
Prepetition Capital Structure
Kodak disclosed $5.10 billion in assets and $6.75 billion in
liabilities as of Sept. 30, 2011. The net book value of all
assets located outside the United States as of Dec. 31, 2011 is
$13.5 million.
Kodak said in a court filing that it has more than 100,000
creditors. Kodak says that as a global business, its creditors
are substantially international. In addition to holders of its
public debt securities, Kodak anticipates working constructively
with significant creditors from the United Kingdom, as well as
other foreign jurisdictions, who have substantial claims against
the Debtors.
Kodak says it has "significant" legacy liabilities, which include
$1.2 billion in non-U.S. pension liabilities, $1.3 billion of
Other Post-Employment Benefit ("OPEB") liabilities and roughly
$100 million in environmental liabilities.
Kodak has outstanding funded debt in an aggregate amount of
roughly $1.6 billion, consisting primarily of roughly: (a) $100
million outstanding under the first lien revolving credit facility
plus an additional $96 million in face amount of outstanding
letters of credit; (b) $750 million in principal amount of second
lien secured notes; (c) $400 million in principal amount of
convertible notes; and (d) $283 million in principal amount of
other senior unsecured debt. Kodak also has roughly $425 million
in outstanding trade debt.
Road to Bankruptcy
Antoinette P. McCorvey, CFO and senior vice president at Eastman
Kodak, said in a court filing that there are several key drivers
for the Debtors' near-term liquidity issues:
(1) Market conditions since 2008 have caused losses in
Kodak's historically profitable traditional businesses, reduced
revenue, earnings and cash from the Company's digital cash
generating business and delayed revenue generation from Kodak's
digital growth initiatives. The Kodak planned to source funds for
its transformation from the historically profitable business; but
the rate of the decline of the market was significantly deeper
than expected. Kodak "invested heavily" on the consumer inkjet but
hasn't sold enough printers.
(2) Legacy post-employment benefits continue to consume a
substantial amount of Kodak's cash. Post-employment benefit
liabilities consumed roughly $245 million in 2011. Despite actions
taken, Kodak has been unable to reduce the amount of cash consumed
by post-employment benefit obligations to make them proportional
to a financially smaller Kodak.
(3) Cash flow from the licensing and sale of intellectual
property has been delayed due to litigation tactics employed by a
small number of infringing technology companies with strong
balance sheets and an awareness of Kodak's liquidity challenges.
(4) Near the end of 2011, negative publicity and other
external issues caused substantial strains on trade credit. In
the last few weeks leading up to these chapter 11 proceedings,
some vendors have stopped shipping and providing services to
Kodak, making it more difficult to operate.
In September, Kodak tapped $160 million from a pre-existing $400
million credit line, prompting Moody's to downgrade the company's
debt securities further into junk territory. A month later, Kodak
warned that it could run out of cash if it failed to sell a number
of its patents, raised additional capital or borrowed more money.
Kodak is headed for its sixth annual loss in the past seven years.
Its cash and equivalents dropped to $862 million at the end of its
third quarter from $1.4 billion a year earlier.
Just over a week ago, Kodak announced that it has streamlined its
corporate structure, cutting the Company's divisions from three to
two. Back in December, three directors resigned from Kodak's
board in December, two of them from KKR & Co., which helped the
company refinance debt in 2009.
Delays in Licensing
According to Ms. McCorvey, when Kodak's financial condition
started to deteriorate, Kodak began to experience delays in
licensing negotiations with Apple Inc., Research In Motion, Corp.,
and HTC Corporation, all of which owe substantial royalties for
use of Kodak's digital capture portfolio. Kodak has pursued
patent litigation against each of Apple, RIM and HTC to enforce
its rights relating to the digital camera functionality included
in their smartphone handsets and, in the cases of Apple and HTC,
in their tablets. In addition, Kodak believes Apple's operating
system itself, which employs object-linking capability, infringes
Kodak's patents (now expired) directed to such fundamental
technology. The Company expects that these lawsuits, once
resolved, will benefit Kodak stakeholders substantially.
As an alternative to lengthy patent litigation, Kodak has explored
the sale of the imaging portfolio to third parties. However, the
Company has faced difficulties executing the sale due to
uncertainty about its financial condition, Ms. McCorvey said.
Slow Death
Adam Hanft, CEO of Hanft Projects, says, "Kodak had many 'Kodak
Moments' which they could have used to pivot their business.
Film has been dying a slow death for twenty years. Their
inability to respond was neither a function of a lack of resources
or technology, but of corporate denial on a level nearly
unprecedented. To squander that much consumer love and retailer
support required years of well-orchestrated brand negligence.
Beyond a series of ineffectual CEOs, the ultimate responsibility
resides in the Kodak board. The board holds the fiduciary
responsibility for shareholders, and they were derelict, clearly,
in believing the hocus-pocus and faith-healing claptrap that
management PowerPointed them with. Their lack of situational
awareness has been breathtaking."
"They were a company stuck in time," said Robert Burley, an
associate professor at Toronto's Ryerson University, according to
Bloomberg News. "Their history was so important to them, this
rich century-old history when they made a lot of amazing things
and a lot of money along the way. Now their history has become a
liability," added Mr. Burley, who has photographed shuttered Kodak
facilities in the U.S., Canada and France since 2005.
Chapter 11 Case
During the 30-day period following the Chapter 11 case, Kodak
expects cash receipts to total $190 million and cash disbursements
to aggregate $355 million.
Within the 30-day period following the Chapter 11 case, Kodak
expects that payments to employees would total $52.3 million.
Payments to officers and directors would be $415,000.
Kodak has obtained a fully-committed, $950 million debtor-in-
possession credit facility with an 18-month maturity from
Citigroup to enhance liquidity and working capital while under
Chapter 11 protection.
Kodak expects to pay employee wages and benefits and continue
customer programs. Subsidiaries outside of the U.S. are not
subject to proceedings and will honor all obligations to
suppliers, whenever incurred. Kodak and its U.S. subsidiaries will
honor all post-petition obligations to suppliers in the ordinary
course.
Kodak said that it will suspend quarterly conference calls during
its reorganization proceedings and it has cancelled its annual
strategy day for investors in February.
Kodak said that it has "no immediate plans to reduce" its
workforce but noted that during its restructuring, it will
"consider all ways to reduce costs and operate more efficiently."
Kodak said it won't leave its Rochester headquarters. As to its
facilities, Kodak said it will evaluate all of its facilities to
ensure that it is competitive and efficient, and determine whether
it needs to reduce, exit or modify any facilities.
Kodak said in a note to employees that it expects to complete its
U.S.-based restructuring in 2013.
Law firm Sullivan & Cromwell and investment bank Lazard Ltd.,
along with FTI, are advising Kodak in its bankruptcy case.
EASTMAN KODAK: Case Summary & 50 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Eastman Kodak Company
343 State Street
Rochester, New York 14650
Bankruptcy Case No.: 12-10202
Debtor-affiliate that filed separate Chapter 11 petition:
Debtor Case No.
------ --------
Creo Manufacturing America LLC 12-10203
Eastman Kodak Int'l Capital Co., Inc. 12-10204
Far East Development Ltd. 12-10205
FPC Inc. 12-10206
Kodak (Near East), Inc. 12-10207
Kodak America, Ltd. 12-10208
Kodak Aviation Leasing LLC 12-10209
Kodak Imaging Network, Inc. 12-10210
Kodak Philippines, Ltd. 12-10211
Kodak Portuguesa Limited 12-10212
Kodak Realty, Inc. 12-10201
Laser-Pacific Media Corporation 12-10213
NPEC Inc. 12-10214
Pakon, Inc. 12-10215
Qualex Inc. 12-10216
Type of Business: Eastman Kodak Company provides imaging
Technology products and services to the
photographic and graphic communications
markets.
Website: http://www.kodak.com/
Chapter 11 Petition Date: Jan. 19, 2012
Court: U.S. Bankruptcy Court
Southern District of New York
Debtors'
Counsel: Andrew G. Dietderich, Esq.
John J. Jerome, Esq.
Michael H. Torkin, Esq.
Mark U. Schneiderman, Esq.
SULLIVAN & CROMWELL LLP
125 Broad Street
New York, NY 10004-2498
Tel: (212) 558-4000
Fax: (212) 558-3588
E-mail: dietdericha@sullcrom.com
jeromej@sullcrom.com
schneidermanm@sullcrom.com
Debtors'
Co-Counsel: Pauline K. Morgan, Esq.
Joseph M. Barry, Esq.
YOUNG CONAWAY STARGATT & TAYLOR, LLP
Rockefeller Center
1270 Avenue of the Americas Suite 2210
New York, NY 10020
Tel: 212-332-8840
Fax: 212-332-8855
E-mail: pmorgan@ycst.com
jbarry@ycst.com
Debtors'
Financial
and
Restructuring
Advisor: FTI CONSULTING, INC.
Debtors'
Investment
Banker and
Financial
Advisor: LAZARD FRERES & CO. LLC
Debtors'
Claims and
Noticing
Agent: KURTZMAN CARSON CONSULTANTS LLC
Counsel to
Ad Hoc Group
of Holders
of Second
Lien Secured
Notes: AKIN GUMP STRAUSS HAUER & FELD LLP
One Bryant Park,
New York, New York 10036-6745
Total Assets: $5,102,000,000 as of Sept. 30, 2011
Estimated Liabilities: $6,751,000,000 as of Sept. 30, 2011.
The petition was signed by Patrick M. Sheller, senior vice
president, general counsel and secretary.
Consolidated List of 50 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
The Bank of New York Mellon, as Unsecured Notes $406,066,667
Indenture Trustee (2017 Sr.
ATTN: Corporate Trust Unsecured
Administration Convertibles -
101 Barclay Street, 8W 7.00%)
New York, NY 10286
Tel: (212) 815-4779
Fax: (732) 667-9185
The Bank of New York Mellon, as Unsecured Notes $252,416,667
Indenture Trustee (2013 Sr.
ATTN: Corporate Trust Unsecured Notes
Administration - 7.25%)
101 Barclay Street, 8W
New York, NY 10286
Tel: (212) 815-4779
Fax: (732) 667-9185
AOF IMAGING TECHNOLOGY Trade Debt $31,187,577
(USA) INC.
ATTN: Albert Lin -VP
2/F., Continental Electric
Building
No. 17 Wang Chiu Road
Kowloon Bay, Kowloon Hong Kong
Tel: 86-769-85535435 ext 6143
Fax: 86-769-85534957
E-mail: albertlin@sintai.com
ATLC, Ltd. Settlement $26,400,000
ATTN: Ed Andre Agreement and
100 Rialto Place, Suite 950 Release
Melbourne, FL 32901
Tel: (321) 725-9605
Fax: (321) 725-1527
Rumberger, Kirk & Caldwell, P.A.
ATTN: David C. Willis, Esquire
300 S. Orange Ave., Suite 1400
(32801)
P.O. Box 1873
Tel: (407) 839-2186
Fax: (407) 835-2086
CAL-COMP OPTICAL Trade Debt $23,687,280
ELECTRONICS
ATTN: Nova Chen - Director CP2
Div., Computer Peripherals BU
147, Section 3, Beishen Rd.
Shenkeng Shiang, Taipei Taiwan 222,
R.O.C.
Tel: 886-2-7705-8001 ext 27410 (w)
E-mail: hsumin@kinpogroup.com
ALTEK CORPORATION Trade Debt $22,008,354
ATTN: Jason Lin - VP
3F, No. 10, Li-Hsin Road
Science-Based Industrial Park,
Hsinchu Taiwan
Tel: 886-3-578-4567 ext 1102
(Hsinchu)
886-2-875-6620 ext 3606 (Taipei)
E-mail: JasonLin@altek.com.tw
WEESP UNLIMITED Term Note $20,000,000
ATTN: G.R. E. Jurgens, Managing
Director
Glenside Works, Mil Lane,
Palmerston, Dublin
20, Ireland
Tel: 353 01 6206868
Fax: 353 01 6262573
SONY STUDIOS Trade Debt $16,666,667
ATTN: Stefan
Litt10202 W. Washington Blvd
Culver City, CA 90232
Tel: (310) 244-6268
E-mail: stefan_litt@spe.sony.com
WARNER BROTHERS Trade Debt $14,175,000
ATTN: Darcy Antonellis
4000 Warner Blvd
Burbank, CA 91522
Tel: (818) 977-4016
E-mail: darcy.antonellis@warnerbros.com
XPEDX Trade Debt $12,949,939
ATTN: Steve Bowden
6285 Tri Ridge Blvd.
Loveland, Ohio 45140
Tel: (513) 965-2918
E-mail: steve.bowden@ipaper.com
Nokia Corporation Amended and $12,000,000
ATTN: Vice President Restated Sensor
Intellectual Agreement
Property Rights
P.O. Box 226
FIN-00045
Nokia Group
Finland
Tel: 358-7180-08000
E-mail: iproyaltyreporting@nokia.com
PRIMAX ELECTRONICS LIMITED Trade Debt $11,585,196
ATTN: Jack Pan - President
No. 669, Ruey Kuang Road Neihu
Taipei, Taipei Taiwan, R.O.C.
Tel: 886-2-2798-9008
Fax: 886-2-8797-7730
WALMART Trade Debt $11,421,973
ATTN: Kevin Oconnor
702 SW 8th Street
Bentonville, Arkansas 72716
Tel: (479) 273-6281
E-mail: kevin.oconnor@wal-mart.com
The Bank of New York Mellon as Unsecured Notes $10,220,209
Indenture Trustee (2021 Sr.
ATTN: Corporate Trust Unsecured Notes
Administration - 9.20%)
101 Barclay Street, 8W
New York, NY 10286
Tel: (212) 815-4779
Fax: (732) 667-9185
NBC Universal Inc. Trade Debt $9,275,570
ATTN: Marcia Haynes
100 Universal City Plaza
Universal City, CA 91608
Tel: (818) 777-3741
E-mail: marcia.haynes@nbcuni.com
TARGET Trade Debt $9,009,509
ATTN: Nik Nayar
1000 Nicollet Mall
Minneapolis, MN 55403
Tel: (612) 696-8234
E-mail: nikhil.nayar@target.com
BEST BUY Trade Debt $8,397,115
ATTN: Lisa Farrell7601
Penn Ave South Richfield, MN
55423-3645
Tel: (612) 291-5608
E-mail: lisa.farrell@bestbuy.com
PARAMOUNT STUDIOS Trade Debt $6,750,000
ATTN: Mark Christiansen
5555 Melrose Ave
Los Angeles, CA 90038
Tel: (323) 956-7722
E-mail: mark_christiansen@paramount.com
SANYO ELECTRIC CO., LTD. Trade Debt $4,994,354
ATTN: Satoru Hotta-VP
5-5, Keihan-hondori 2-chome
Moriguchi City, Osaka 570-8677
Japan
Tel: 81-6-6994-1045
E-mail: Ryusuke.Date@sanyo.com
OFFICE MAX Trade Debt $4,658,704
ATTN: Igor Anshakov
263 Shuman Blvd.
Naperville, IL 60563
Tel: (630) 864-6423
E-mail: igoranshakov@officemax.com
PREFERRED CARE INC Employee $4,350,643
ATTN: Lisa Brubaker-Exec. VP Benefits
220 Alexander St
Rochester, NY 14607
Tel: (585) 258-8674
E-mail: lbrubaker@mvphealthcare.com
DISNEY STUDIOS Trade Debt $4,162,500
ATTN: Jeff Miller
500 S Buena Vista
Burbank, CA 91521
Tel: (818) 560-3050
E-mail: jeff.miller@disney.com
FELIX SCHOELLER HOLDING Trade Debt $4,105,358
GMBH & CO. KG
ATTN: Guido Hofmeyer, Sr VP
PO Box 3667
D-49026 Osnabruck, Lower Saxony
Germany
Tel: (05 41) 38 00-0
Fax: (05 41) 38 00-425
E-mail: ghofmeyer@felix-Schoeller.com
NANJING WANLIDA Trade Debt $3,663,550
TECHNOLOGY CO LTD
ATTN: Jason Zeng - VP
No. 618, Jiahe Road
Xiamen, Fujian China 361006
Tel: 86-592-5700999 (8354)
E-mail: jason@Malata.com
FLEXTRONICS INTERNATIONAL Trade Debt $3,478,974
LTD.
ATTN: EC Sykes -President Industrial
1007 Gilbraltar Drive, Building # 7
Milipitas, CA 95035
Tel: (408) 576-5060
E-mail: ec.sykes@flextronics.com
STAPLES Trade Debt $3,182,384
ATTN: Mark Mettler500
Staples Drive
Framingham, MA 01702
Tel: (508) 253-5000
E-mail: mark.mettler@staples.com
CVS Trade Debt $3,168,410
ATTN: Jim Shiels
1 CVS Drive
Woonsocket, RI 02895
Tel: (401) 770-2400
E-mail: jashiel@cvscaremark.com
WYNIT Trade Debt $3,126,229
ATTN: Pete Richichi
5801 East Taft Rd
North Syracuse, New York 13212
Tel: (315) 437-1086
E-mail: prichichi@wynit.com
The Bank of New York Mellon as Unsecured Notes $3,104,000
Indenture Trustee (2018 Sr.
ATTN: Corporate Trust Unsecured Notes
Administration - 9.95%)
101 Barclay Street, 8W
New York, NY 10286
Tel: (212) 815-4779
Fax: (732) 667-9185
AMAZON.COM Trade Debt $3,027,401
ATTN: Heather Cartwright
701 5th Ave
Seattle, Washington 98104
Tel: (206) 683-7447
E-mail: heacart@amazon.com
OFFICE DEPOT Trade Debt $2,899,193
ATTN: Randy Wick
6600 North Military Trail
Boca Raton, FL 33496
Tel: (561) 438-4800
E-mail: randy.wick@officedepot.com
ALCOA, INC. Trade Debt $2,817,978
ATTN: Jennifer Fredieu - Account
Manager
2300 North Wright Road
Alcoa, TN 37701-3141
Tel: (865) 977-2386
E-mail: Jennifer.Fredieu@alcoa.com
RYDER SYSTEM, INC. Trade Debt $2,711,174
ATTN: Steve Sensing VP-General
Manager
1000 Corporate Centre Drive,
Suite 350
Franklin, TN 37067
Tel: (615) 771-4039 x208
Fax: (615) 771-9914
E-mail: ssensing@ryder.com
SAMS WHOLESALE CLUB Trade Debt $2,709,212
ATTN: Joe Hartsig
2101 Simple Savings Drive
Bentonville, Arkansas 72716
Tel: (479) 273-4000
E-mail: joe.hartsig@samsclub.com
ADECCO S.A. Trade Debt $2,484,451
ATTN: Deborah J.
Cave-Harnden National Account
Manager1330 Lexington Ave
Rochester, NY 14606
Tel: (585) 546-1660
Fax: (585) 262-3266
E-mail: deborah.cave@adeccona.com
GE RICHARDS GRAPHIC Trade Debt $2,345,011
SUPPLIES CO INC
ATTN: Jeff Wagner
928 Links Avenue (PO Box 339)
Landisville, PA 17538
Tel: (717) 940-2384
E-mail: jwagner@gerichards.com
DEUTSCH INC Trade Debt $2,295,056
ATTN: Erica Grau - EVP, Dir. Of
Client and Agency Operations
111 8th Ave.
NY, NY 10011
Tel: (212) 981-8091
Fax: (212) 981-7525
E-mail: erica.grau@deutschinc.com
MATSUSHITA ELECTRIC Trade Debt $2,274,068
INDUSTRIAL CO., LTD.
ATTN: Rick Martin
1-1 Matsushita-cho
Moriguchi City, Osaka 570-8511
Japan
Tel: (704) 992-1657
E-mail: rick.martin@us.panasonic.com
JOHNSON CONTROLS, INC. Trade Debt $2,247,999
ATTN: Tom Bourke, VP and GM
507 E Michigan St, PO Box 423
Milwaukee, WI 53201-0423
Tel: (810) 714-0445
E-mail: thomas.f.bourke@jci.com
TORAY INDUSTRIES, INC. Trade Debt $1,924,227
ATTN: Richard R. Schloesser - CEO
50 Belver Avenue
North Kingstown, RI 02852-7500
Tel: (401) 294-4511 ext 2203
E-mail: rick.schloesser@toraytpa.com
SANMINA-SCI CORPORATION Trade Debt $1,912,296
ATTN: Tom Clawson - President
Industrial
2700 North First Street
San Jose, CA 95134
Tel: (408) 964-3298
E-mail: tom.clawson@sanminasci.com
COLLINS INK CORP. Trade Debt $1,889,468
ATTN: Lawerance Gamblin-Owner
1201 Edison Drive
Cincinnati, OH 45216
Tel: (513) 948-9000
E-mail: lgamblin@collinsink.com
INTERNATIONAL BUSINESS Trade Debt $1,874,781
MACHINES CO
ATTN: Anthony Martinez - GM
Managed Business Process Services
3301 Carrack Court
Raleigh, NC 27613
Tel: (914) 766-4810
E-mail: tmart@us.ibm.com
CHAMPION PHOTOCHEMISTRY Trade Debt $1,746,376
INTERNATIO
ATTN: R. Fraser
Mason - CEOPO Box 44105 RPO
Wexford Plaza Brampton, ON L6Z
4V7, Canada
Tel: (905) 670-7900
Fax: (905) 670-2581
E-mail: fraser@championphotochemistry.com
OPTIMATION TECHNOLOGY INC Trade Debt $1,736,932
ATTN: Bill Pollock, President
and CEO
50 High Tech Drive
Rush, NY 14543
Tel: (585) 321-2300
Fax: (585) 321-2700
E-mail: bill.pollock@optimation.us
MOSAIC SALES SOLUTIONS Trade Debt $1,663,980
ATTN: Angie Damron-Beene Senior
Director, Client Services
6051 N State Hwy 161
Irving, TX 75038-2236
Tel: (972) 870-4824 (direct)
Fax: (972) 870-4845
E-mail: aidan.tracey@mosaic.com
CRANEL INCORPORATED Trade Debt $1,645,643
ATTN: Craig Wallace
8999 Gemini Pkwy
Columbus, Ohio 43240-2010
Tel: (614) 431-8000
E-mail: cwallace@cranel.com
WIPRO LIMITED Trade Debt $1,640,773
ATTN: NS Bala - Senior VP
425 National Ave # 200
Mountain View, CA 94043
Tel: (650) 316-3522
Fax: (650) 316-3467
E-mail: nsbala@wipro.com
State of California Franchise Trade Debt Unknown but
Tax Board estimated
ATTN: Ms. Mary Genoese at over
1212 Avenue of the Americas $1,640,772
4th Floor
New York, NY 10036-1601
Tel: (718) 687-0145 (cell)
Fax: (212) 575-1524
E-mail: mary.genoese@ftb.ca.gov
New York State Department of Tax Claim Unknown but
Taxation and Finance, Buffalo estimated
District Office at over
ATTN: Mr. David Agnew $1,640,772
77 Broadway, Suite 112
Buffalo, NY 14203-1670
Tel: (716) 855-5843
E-mail: david.agnew@tax.ny.gov
ESSAR OIL: Expects to Appeal Court Ruling in Tax Case
-----------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that Essar Oil Ltd.
said it is considering appealing an Indian Supreme Court of India
ruling that excludes the private-sector refiner from a program
that would have allowed it to defer paying sales tax by a few
years.
About Essar Oil
India-based Essar Oil Limited -- http://www.essar.com/-- is
engaged in the exploration, production and marketing of oil and
gas. The company?s principal activities range from oil
exploration to the downstream sectors of marketing oil products
and petrochemicals. It is organized into three divisions:
exploration and production, refinery and marketing. EOL has two
onshore blocks in Rajasthan and one in the Mumbai offshore
region, where it has completed the first phase and started test
drilling. The company also has a block each in the Cambay basin
(Gujarat) and Cachar (Assam). It also has the Ratna and R-
series oilfields for development and production, in partnership
with Oil and Natural Gas Commission. EOL has won a coal bed
methane (CBM) block in West Bengal. The company is implementing
a 10.5-million metric-ton-per-annum oil refinery at Vadinar,
Gujarat. EOL had a retail network of 1178 as at March 31, 2007.
Vadinar Power Company Limited is a wholly owned subsidiary of
the company.
EVANS OIL: Fifth Third May File Competing Plan
----------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Evans Oil Co. LLC didn't fare well at a hearing last
week. U.S. Bankruptcy Judge Barry S. Schermer in Fort Myers,
Florida, not only refused to approve the disclosure statement
explaining Evans' plan, he also terminated the company's exclusive
right to propose a Chapter 11 plan, court records show.
According to the report, secured lender Fifth Third Bank, owed $34
million, was told by Judge Schermer to file its competing plan and
disclosure statement within 45 days. There will be another
hearing for approval of a disclosure statement March 9. Evans did
prevail on one dispute. The judge turned down the bank's motion
for appointment of a Chapter 11 trustee.
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 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 SOLAR: Palo Alto Resigns from Creditors Committee
-----------------------------------------------------------
Roberta A. Deangelis, U.S. Trustee for Region 3 amended the notice
of appointment of an Committee of Unsecured Creditors in the
Chapter 11 case of Evergreen Solar, Inc. to reflect the
resignation of Palo Alto Investors, LLC effective Dec. 15, 2011.
The Creditors Committee now comprises:
1. Wells Fargo Bank, N.A.
Attn: James Lewis, Esq.
45 Broadway, 12th Floor
New York, NY 10006
Tel: (212) 515-5258
Fax: (866) 524-4681
2. Computershare Trust Company, NA
Attn: John M. Wahl
350 Indiana Street, Suite 650
Golden, CO 80401
Tel: (303) 262-0707
Fax: (303) 262-0608
3. Trishield Capital Managment
Attn: Jeff Buick
230 Park Avenue, 10th Floor
New York, NY 10169
Tel: (646) 867-1875
Fax: (646) 304-3195
4. Capital Ventures International
c/o Susquehanna International Group LLP,
Attn: Todd Silverberg, 401 City Avenue, Suite 220
Bala Cynwyd, PA 19004
Tel: (610) 747-1724
Fax: (610) 747-2081
5. Praxair, Inc.
Attn: Jeffrey Weiss, Esq.
39 Old Ridgebury Road
Danbury, CT 06810
Tel: (203) 887-2104
6. Global Telecom & Technology
Attn: Chris McKee
8484 Westpark Drive, Suite 720
McLean, VA 22102
Tel: (703) 442-5508
Fax: (709) 442-5595
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.
At an auction in November, Evergreen Solar sold some of its core
assets to Max Era Properties Limited.
EXECUTIVE LIFE: Beneficiary Blasts Receiver's Insolvency Bid
------------------------------------------------------------
Hilary Russ at Bankruptcy Law360 reports that a move to liquidate
the Executive Life Insurance Co. of New York, which has a
$1.6 billion deficit, has reignited a long-dormant court case and
prompted a challenge Tuesday by a policyholder who says
beneficiaries could lose hundreds of millions of dollars
altogether under the proposal.
Daniel J. Tucker, who like many other ELNY beneficiaries is
supposed to receive lifetime payments for a serious personal
injury, said in an objection filed by Kobre & Kim LLP attorneys.
As reported in the Troubled Company Reporter on Jan. 10, 2012,
Kobre & Kim LLP, a firm focusing on investigations and financial
products litigation, said it is examining the circumstances
regarding the potential short-changing of numerous annuity holders
arising out of the insolvency of Executive Life.
On Dec. 7, 2011, the New York Liquidation Bureau mailed shortfall
letters to many individual ELNY structured settlement annuity
beneficiaries (SSA payees) notifying them about the proposed
liquidation and restructuring agreement filed in November, as well
as the amount of shortfall for each SSA payee. Those shortfall
letters follow up on the Sept. 1, 2011, Petition for Order of
Liquidation and Approval of Restructuring Agreement filed by the
Superintendent of Financial Services. The Petition revealed that
ELNY's assets will be able to cover only roughly 34% of its
remaining annuity obligations and that notwithstanding the
anticipated contributions from various guaranty associations,
roughly 21% of the annuities will have shortfalls (meaning less
than the full amount of the annuity payments will be covered).
Some of those shortfalls will be substantial, and many annuity
owners have significant exposure. This matter was initiated in
Supreme Court of Nassau County of the State of New York (Index No.
008023/1991).
Kobre & Kim LLP is working to understand the amount to which
annuity holders may be entitled under various guaranty association
acts and agreements with insurers, and is conducting an analysis
of how exposure on the shortfalls may be reduced or eliminated.
The Court has set a Jan. 16, 2012, deadline for the filing of
answering papers to the Petition for Order of Liquidation and
Approval of Restructuring Agreement.
Executive Life Insurance Company (ELIC) was a large issuer of life
insurance, structured settlement annuities, group annuities, and
guaranteed investment contracts (GICs) issued to pension plans and
municipalities. A conservation order was issued for ELIC on
April 11, 1991, and a liquidation order was entered on Dec. 6,
1991. Most of the company's policies were assumed by Aurora
National Life Insurance Company in 1993.
EXTERRA ENERGY: Bankruptcy Should Be Dismissed, Trustee Says
------------------------------------------------------------
Michael Bathon, substituting for Bloomberg News bankruptcy
columnist Bill Rochelle, reports that Exterra Energy Inc. should
have its case dismissed because the company has failed to hire
legal counsel to represent it as required by the bankruptcy code.
"Corporations are required to be represented by counsel in federal
court," attorney Elizabeth A. Ziegler said in court papers for
U.S. Trustee. "Under the facts of this case, failing to employ
counsel establishes cause to convert or dismiss the case."
Mr. Bathon notes that the U.S. Trustee argues that if the court
denies the request for dismissal, the case should be converted to
liquidation under chapter 7 of the bankruptcy code.
Exterra Energy Inc., an oil and natural-gas exploration and
production company in Amarillo, Texas, filed a bare-bones Chapter
11 petition (Bankr. N.D. Tex. Case No. 11-46956) on Dec. 15, 2011,
in Fort Worth. Two weeks later, Exterra filed lists of assets and
debt claiming to have property worth $19.4 million. The company
also filed a balance sheet from February listing assets for $5.1
million. The formal bankruptcy lists show total debt of $7.5
million, including $4.6 million in secured claims. The company's
Web site says Exterra has 12 wells in Pecos County, Texas, plus
interests in another 50.
FILENE'S BASEMENT: Syms Gets OK to Pay Up to $650,000 in Bonuses
----------------------------------------------------------------
Dow Jones' DBR Small Cap reports that Syms Corp. has received
court permission to pay bonuses to employees who remain with
liquidating retailer while it winds down in bankruptcy.
About Filene's Basement
Massachusetts-based Filene's Basement, also called The Basement,
is the oldest off-price retailer in the United States. The
Basement focuses on high-end goods and is known for its
distinctive, low-technology automatic markdown system.
Filene's Basement first filed for Chapter 11 bankruptcy protection
in August 1999. Filene's Basement was bought by a predecessor of
Retail Ventures, Inc., the following year. Retail Ventures in
April 2009 transferred the unit to Buxbaum.
Filene's Basement, Inc. and its affiliates filed for Chapter 22
(Bankr. D. Del. Case No. 09-11525) on May 4, 2009, represented by
lawyers at Pachulski Stang Ziehl & Jones LLP. Epiq Bankruptcy
Solutions serves as claims and notice agent. The Debtors
disclosed assets of $236 million, including real estate of $97.7
million, and liabilities of $94 million, including $31.1 million
owing on a revolving credit with Bank of America NA as agent. In
addition, there were $11.1 million in letters of credit
outstanding on the revolver.
The 2009 Debtor was formally renamed FB Liquidating Estate,
following the sale of all of its assets to Syms Corp. in June
2009.
Pursuant to the Liquidating Plan confirmed in January 2010,
secured creditors in the Chapter 11 case have been paid in full,
and holders of priority, administrative and convenience class
claims have received 100% of their allowed claims. As reported by
the Troubled Company Reporter on Dec. 20, 2010, Alan Cohen,
Chairman of Abacus Advisors LLC and Chief Restructuring Officer
for FB Liquidating Estate disclosed that a second distribution of
dividend checks to Filene's unsecured creditors amounting to 12.5%
of approved claims has been made, bringing the cumulative
distributions on unsecured claims to 62.5%.
On Nov. 2, 2011, Syms Corp. placed itself, Filene's Basement and
two other units in Chapter 11 bankruptcy (Bankr. D. Del. Case Nos.
11-13511 to 11-13514) after a failed bid to sell the business.
The two units are Syms Clothing Inc. and Syms Advertising Inc.
Judge Kevin J. Carey presides over the case. Lawyers at Skadden
Arps Slate Meagher & Flom LLP serve as the Debtors' counsel. The
Debtors tapped Rothschild Inc. as investment banker and Cushman
and Wakefield Securities, Inc., as real estate financial advisors.
Syms shuttered its namesake and Filene's Basement outlets upon the
bankruptcy filing and tapped a joint venture of Gordon Brothers
Retail Partners LLC and Hilco Merchant Resources LLC to run the
going-out-of-business sales. The sale may continue until Jan. 31,
2012.
Filene's Basement estimated $1 million to $10 million in assets
and $50 million to $100 million in debts. The petitions were
signed by Gary Binkoski, authorized representative of Filene's
Basement.
The official committee of unsecured creditors appointed in the
2011 case has retained Hahn & Hessen LLP as legal counsel.
Holders of equity in Syms Corp. pushed for an official
shareholders' committee and separation of the Syms and Filene's
Basement bankruptcy estates.
Gordon Brothers and Hilco are represented by Goulston & Storrs,
P.C. and Ashby & Geddes, P.A.
FIRSTGOLD CORP: IRS Wants Chapter 11 Case Converted or Dismissed
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Nevada will convene
a hearing on Feb. 15, 2012, at 10:00 a.m., to consider the request
of the United States of America, on behalf of its agency, the
Internal Revenue Service, to convert the Chapter 11 case of
Firstgold Corp.
The Service's proof of claim asserts secured tax claims totaling
$529,708 and unsecured priority tax claims totaling $70,500.
According to the Service, the Debtor's financial status is not
clear because the Debtor is not filing monthly operating reports.
The case has been pending for almost two years and confirmation of
a Chapter 11 plan is not imminent and not likely.
The USA is represented by:
Daniel G. Bogden, Esq.
United States Attorney
333 Las Vegas Blvd. South, Suite 5000
Las Vegas, NV 89101
Tel: (702) 388-6336
- and -
Rollin G. Thorley, Esq.
Special Assistant United States Attorney
110 N. City Parkway, Suite 301
Las Vegas, NV 89106
Tel: (702) 868-5167
(702) 868-5154
Fax: (702) 868-5440
E-mail: rollin.g.thorley@irscounsel.treas.gov
About Firstgold Corporation
Lovelock, Nevada-based Firstgold Corp. filed for Chapter 11
bankruptcy protection (Bankr. D. Nev. Case No. 10-50215) on
Jan. 27, 2010. Stephen R. Harris, Esq., at Belding, Harris &
Petroni, Ltd., and Edmund Buddy Miller, Esq., assist the Company
in its restructuring effort. The Company has assets of
$17,957,805, and total debts of $26,981,427.
As reported by the TCR on April 28, 2010, Firstgold's management,
at a bankruptcy hearing held on April 20, 2010, reported its
inability to timely develop a reorganization plan to restart
business operations. In light of the foregoing, Firstgold
stipulated to allowing its primary secured lenders, Platinum Long
Term Growth, LLC, and Lakewood Group, LLC, to pursue their
contractual and state law rights and remedies to foreclose and
take possession of all collateral securing their debt obligations
with Firstgold pursuant to their security interests. The
collateral securing their debt obligations includes substantially
all of Firstgold's assets including the Relief Canyon Mine
property, all improvements to the mine property, and additional
mining properties and interests. In addition, Firstgold agreed to
relinquish possession of the collateral to allow Platinum and
Lakewood to preserve and protect such collateral as of April 21,
2010.
Firstgold will continue in a Chapter 11 status which will allow
Firstgold's management to pursue a possible reorganization of the
corporate entity with another company. The next status conference
hearing relating to the Firstgold corporate entity is set for May
11, 2010.
FORT WAYNE TELSTAT: Creditor Loses Challenge to Settlement
----------------------------------------------------------
Thomson Reuters News & Insight, citing a report from Chip
Giambrone of Westlaw Journal Bankruptcy, says Fort Wayne Telstat
Inc. has defeated a challenge by JAS Partners Ltd., its largest
unsecured creditor, to a $100,000 settlement of a dispute with
Indiana University over the rights to a Federal Communications
Commission license.
According to the report, the creditor had argued the license was
worth more than $4 million. But a three-judge panel of the 7th
U.S. Circuit Court of Appeals concluded the debtor's trustee had
reasonably estimated the value of the license at only $600,000 and
made a similarly reasonable decision that pursuing a claim for the
license was hopeless.
The report says the dispute centers on an "instructional
television fixed service" license that the FCC had issued to
Indiana University.
The report notes that the school purportedly had agreed to
transfer the license to the Fort Wayne Public Broadcasting
Service, which, in turn, had agreed to lease a substantial portion
of the broadcasting rights to Fort Wayne Telstat.
The report relates that FWT believed the underlying transfer had
gone through and modified its broadcasting equipment at a cost of
$350,000. The university, however, denied that the transfer had
been accomplished.
The report says a court-appointed trustee filed a claim against
Indiana University under a theory of promissory estoppel. The
trustee alleged FWT had reasonably relied upon the school's
alleged promise to transfer the license to PBS when it modified
its equipment, the opinion says.
The report adds the trustee later settled the claim for $100,000.
The deal did not include an assignment of the license to the
debtor because the trustee had concluded the university's license
had never actually been transferred to PBS.
According to Reuter, JAS Partners, in its objection, estimated the
license to be worth $4.1 million and accused the trustee of
failing to adequately investigate the possibility of obtaining the
license. The Bankruptcy Court upheld the settlement as
reasonable, and the U.S. District Court for the Northern District
of Indiana affirmed on appeal by JAS.
Fort Wayne Telstat is a television broadcaster forced into Chapter
11 bankruptcy (Bankr. N.D. Ind. 05-_____) in March 2005.
FRANCISCAN COMMUNITIES: Court OKs GCC as Claims & Noticing Agent
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Ohio
authorized Franciscan Communities St. Mary of the Woods Inc. to
employ The Garden City Group, Inc., as its claims and noticing
agent.
As claims and noticing agent, GCG will:
a) prepare and serve required notices, including the notice
of commencement and bar date notice;
b) file with the Clerk's Office an affidavit or certificate
of service with respect to each service conducted by GCG,
that includes a reference to the notice served and the
corresponding docket number, an alphabetical list of all
persons to whom it was mailed, and the date and manner of
service;
c) maintain copies of all proofs of claim and proofs of
interest filed and maintain the official claims register;
and
d) maintain the official mailing list of all entities that
have filed a proof of claim or proof of interest,
which list shall be available upon request by a
party-in-interest or the Clerk's Office.
The Debtor will compensate GCG on a monthly basis upon GCG's
submission of invoices summarizing, in reasonable detail, the
services rendered and expenses incurred in connection with
services.
About Franciscan Communities
Illinois-based Franciscan Communities St. Mary of the Woods, Inc.,
owns and operates a senior living community in Avon, Ohio. The
not-for-profit community is owned and managed by the Franciscan
Sisters of Chicago Service Corp.
Franciscan Communities St. Mary of the Woods filed for Chapter 11
bankruptcy (Bankr. N.D. Ohio Case No. 11-19865) on Nov. 21, 2011,
after it failed to negotiate an out-of-court workout with holders
of tax-free bonds. Judge Jessica E. Price Smith oversees the
case. The Debtor disclosed assets of $36 million and debt
totaling $48 million as of the Chapter 11 filing.
The Debtor is represented by Heather Lennox, Esq., Carl E.
Black, Esq., and Daniel M. Syphard, Esq., at Jones Day, as
bankruptcy counsel. The Garden City Group, Inc., is the claims
and noticing agent.
Franciscan Sisters of Chicago, the sole member of the Debtor, is
providing $4.5 million in DIP loans. The DIP Lender is
represented by George Mesires, Esq., and Daniel P. Strzalka, Esq.,
at Ungaretti & Harris LLP. The Bank of New York Mellon Trust
Company, N.A., the bond trustee, is represented by Bruce H. White,
Esq., and Clifton R. Jessup, Esq., at Greenberg Traurig LLP.
Wells Fargo Bank, N.A., as Master Trustee, is represented by
Daniel S. Bleck, Esq., at Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C., and John R. Weiss, Esq., at Duane Morris LLP.
Sovereign Bank, provider of the Debtor's letter of credit
facility, is also represented by John R. Weiss, Esq., at Duane
Morris LLP.
FRANCISCAN COMMUNITIES: Can Employ Houlihan as Investment Banker
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Ohio
authorized Franciscan Communities St. Mary of the Woods Inc. to
employ Houlihan Lokey Capital, Inc., as its investment banker.
As investment banker, Houlihan Lokey will, among other things:
a) assist and advise the Debtor with the analysis,
evaluation, pursuit and effectuation of any
potential transaction;
b) conduct immediate and comprehensive due diligence
on the operations, assets and claims (priorities
and collateral);
c) review the Transaction timeline and assisting the
Debtor in obtaining necessary creditor support and
liquidity for the process;
d) assist the Debtor in the development, preparation
and distribution of selected information, documents
and other materials in an effort to create interest
in and to consummate any Transaction(s), including,
if appropriate, advising the Debtor in the preparation
of any teaser summary materials, confidentiality
agreements, offering memoranda, data rooms, etc.; and
e) solicit and evaluate indications of interest and
proposals regarding any Transaction(s) from current
and/or potential lenders, investors, acquirers
and/or strategic partners.
The firm will, among other things, receive a monthly fee of
$50,000.
About Franciscan Communities
Illinois-based Franciscan Communities St. Mary of the Woods, Inc.,
owns and operates a senior living community in Avon, Ohio. The
not-for-profit community is owned and managed by the Franciscan
Sisters of Chicago Service Corp.
Franciscan Communities St. Mary of the Woods filed for Chapter 11
bankruptcy (Bankr. N.D. Ohio Case No. 11-19865) on Nov. 21, 2011,
after it failed to negotiate an out-of-court workout with holders
of tax-free bonds. Judge Jessica E. Price Smith oversees the
case. The Debtor disclosed assets of $36 million and debt
totaling $48 million as of the Chapter 11 filing.
The Debtor is represented by Heather Lennox, Esq., Carl E.
Black, Esq., and Daniel M. Syphard, Esq., at Jones Day, as
bankruptcy counsel. The Garden City Group, Inc., is the claims
and noticing agent.
Franciscan Sisters of Chicago, the sole member of the Debtor, is
providing $4.5 million in DIP loans. The DIP Lender is
represented by George Mesires, Esq., and Daniel P. Strzalka, Esq.,
at Ungaretti & Harris LLP. The Bank of New York Mellon Trust
Company, N.A., the bond trustee, is represented by Bruce H. White,
Esq., and Clifton R. Jessup, Esq., at Greenberg Traurig LLP.
Wells Fargo Bank, N.A., as Master Trustee, is represented by
Daniel S. Bleck, Esq., at Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C., and John R. Weiss, Esq., at Duane Morris LLP.
Sovereign Bank, provider of the Debtor's letter of credit
facility, is also represented by John R. Weiss, Esq., at Duane
Morris LLP.
FRANCISCAN COMMUNITIES: Court Approves Jones Day as Counsel
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Ohio
authorized Franciscan Communities St. Mary of the Woods, Inc., to
employ Jones Day as its counsel. Jones Day will, among other
things:
(a) advise the Debtor of its rights, powers and duties as
debtor and debtor-in-possession continuing to operate and
manage its business and properties under Chapter 11 of the
Bankruptcy Code;
(b) prepare on behalf of the Debtor all necessary and
appropriate applications, motions, proposed orders, other
pleadings, notices schedules and other documents, and
review all financial and other reports to be filed in the
Chapter 11 case;
(c) advise the Debtor concerning, and prepare responses to,
applications, motions, other pleadings, notices and other
papers that may be filed by other parties;
(d) advise the Debtor with respect to, and assist in the
negotiation and documentation of, financing agreements and
related transactions; and
(e) review the nature and validity of any liens asserted
against the Debtor's property and advice the Debtor
concerning the enforceability of those liens.
The Debtor will pay Jones Day based on its ordinary and
customary hourly rates:
Name Position Hourly Rate
---- -------- -----------
Carl Black Partner $675
Martin Gates Partner $450
Heather Lennox Partner $775
George Howard Associate $350
Jennifer Seidman Associate $325
Daniel Syphard Associate $425
Betty Yakovich Legal Assistant $225
About Franciscan Communities
Illinois-based Franciscan Communities St. Mary of the Woods, Inc.,
owns and operates a senior living community in Avon, Ohio. The
not-for-profit community is owned and managed by the Franciscan
Sisters of Chicago Service Corp.
Franciscan Communities St. Mary of the Woods filed for Chapter 11
bankruptcy (Bankr. N.D. Ohio Case No. 11-19865) on Nov. 21, 2011,
after it failed to negotiate an out-of-court workout with holders
of tax-free bonds. Judge Jessica E. Price Smith oversees the
case. The Debtor disclosed assets of $36 million and debt
totaling $48 million as of the Chapter 11 filing.
The Debtor is represented by Heather Lennox, Esq., Carl E.
Black, Esq., and Daniel M. Syphard, Esq., at Jones Day, as
bankruptcy counsel. The Garden City Group, Inc., is the claims
and noticing agent.
Franciscan Sisters of Chicago, the sole member of the Debtor, is
providing $4.5 million in DIP loans. The DIP Lender is
represented by George Mesires, Esq., and Daniel P. Strzalka, Esq.,
at Ungaretti & Harris LLP. The Bank of New York Mellon Trust
Company, N.A., the bond trustee, is represented by Bruce H. White,
Esq., and Clifton R. Jessup, Esq., at Greenberg Traurig LLP.
Wells Fargo Bank, N.A., as Master Trustee, is represented by
Daniel S. Bleck, Esq., at Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C., and John R. Weiss, Esq., at Duane Morris LLP.
Sovereign Bank, provider of the Debtor's letter of credit
facility, is also represented by John R. Weiss, Esq., at Duane
Morris LLP.
FRANCISCAN COMMUNITIES: B. Laubert Named Patient Care Ombudsman
---------------------------------------------------------------
The Bankruptcy Court entered a stipulated order directing Daniel
McDermott, the U.S. Trustee for Region 9, to appoint the State
Ombudsman as Patient Care Ombudsman in the bankruptcy case of
Franciscan Communities St. Mary of the Woods, Inc.
The State Ombudsman will serve at no cost to the Debtor's estate
for her services as the Bankruptcy Ombudsman.
Accordingly, the U.S. Trustee appointed Beverly Laubert as Patient
Care Ombudsman. She can be reached at:
Beverly L. Laubert
State Long Term Ombudsman, Chief
Ohio Department of Aging, Elder Rights Division
50 W. Broad Street, 9th Floor
Columbus, Ohio 43215-3363
(614)644-7922
(800)282-1206
Fax(614)6445201
Email:blaubert@age.oh.us
It is the responsibility of the Patient Care Ombudsman to monitor
the quality of patient care provided to patients of the Debtor and
to report to the Court at a hearing or in writing its findings.
About Franciscan Communities
Illinois-based Franciscan Communities St. Mary of the Woods, Inc.,
owns and operates a senior living community in Avon, Ohio. The
not-for-profit community is owned and managed by the Franciscan
Sisters of Chicago Service Corp.
Franciscan Communities St. Mary of the Woods filed for Chapter 11
bankruptcy (Bankr. N.D. Ohio Case No. 11-19865) on Nov. 21, 2011,
after it failed to negotiate an out-of-court workout with holders
of tax-free bonds. Judge Jessica E. Price Smith oversees the
case. The Debtor disclosed assets of $36 million and debt
totaling $48 million as of the Chapter 11 filing.
The Debtor is represented by Heather Lennox, Esq., Carl E.
Black, Esq., and Daniel M. Syphard, Esq., at Jones Day, as
bankruptcy counsel. The Garden City Group, Inc., is the claims
and noticing agent.
Franciscan Sisters of Chicago, the sole member of the Debtor, is
providing $4.5 million in DIP loans. The DIP Lender is
represented by George Mesires, Esq., and Daniel P. Strzalka, Esq.,
at Ungaretti & Harris LLP. The Bank of New York Mellon Trust
Company, N.A., the bond trustee, is represented by Bruce H. White,
Esq., and Clifton R. Jessup, Esq., at Greenberg Traurig LLP.
Wells Fargo Bank, N.A., as Master Trustee, is represented by
Daniel S. Bleck, Esq., at Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C., and John R. Weiss, Esq., at Duane Morris LLP.
Sovereign Bank, provider of the Debtor's letter of credit
facility, is also represented by John R. Weiss, Esq., at Duane
Morris LLP.
FRANKLIN COUNTY: Moody's Cuts Rating on Revenue Bonds to 'Ba3'
--------------------------------------------------------------
Moody's Investors Service has downgraded to Ba3 from Baa1 the
rating of County of Franklin, Ohio Multifamily Housing Revenue
Bonds, Series 1997A (GNMA Collateralized -- Country Ridge
Apartment Project), following a review of projected cash flows for
the life of the bonds. This rating action affects approximately
$2,575,000 of outstanding debt.
RATINGS RATIONALE
The downgrade is based on the expectation that if investment
earnings continue to be low there could be shortfalls in revenue
needed to cover debt service beginning in 3 years. The losses
given the likelihood of default are projected to be less than 1%
of the current amount of bonds outstanding. Moody's expects
further downgrades if interest rates do not increase substantially
and the likelihood of default becomes more certain.
WHAT COULD CHANGE THE RATINGS: UP
- Cash contribution to ensure cash flow sufficiency
- Substantial increase in reinvestment rates
WHAT COULD CHANGE THE RATINGS: DOWN
- Prolonged low interest rate environment
The principal methodology used in this rating was "GNMA
Collateralized Multifamily Housing Bonds" published in June 2006.
GALAXY GLOBAL: Case Summary & Largest Unsecured Creditor
--------------------------------------------------------
Debtor: Galaxy Global Investments, LLC
618 N.W. 159 Avenue
Hollywood, FL 33028
Bankruptcy Case No.: 12-00208
Chapter 11 Petition Date: January 13, 2012
Court: United States Bankruptcy Court
Middle District of Florida (Jacksonville)
Debtor's Counsel: Ronald Cutler, Esq.
RONALD CUTLER PA
1172 Pelican Bay Drive
Daytona Beach, FL 32119
Tel: (386) 788-4480
Fax: (386) 788-6040
E-mail: ronaldcutlerpa@bellsouth.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
In its list of 20 largest unsecured creditors, the Company placed
only one entry:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Nicolas Villalba Wholesalers $850,000
P.O. Box 160520
Hialeah, FL 33016
The petition was signed by Juan R. Sepulveda, director.
GEORGIA GULF: Moody's Reviews 'Ba3' PDR for Possible Upgrade
------------------------------------------------------------
Moody's Investors Service placed the Baa3 ratings of Westlake
Chemical Corporation under review for possible downgrade and the
ratings (Ba3 Corporate Family Rating) of Georgia Gulf Corporation
under review for possible upgrade. These actions were taken after
Westlake disclosed that it had made an offer to acquire GGC for
$30 per share ($1.7 billion transaction value including GGC's
outstanding debt). Westlake has not disclosed how it will fund
the transaction, but stated that its offer does not have a
financing contingency. Additionally, any transaction would be
subject to regulatory review. "While this is clearly a strategic
acquisition for Westlake, the company has never undertaken a
hostile bid for a large company," stated John Rogers, Senior Vice
President at Moody's. "Management's financing for the transaction
will likely be a key determinant in its ability to remain
investment grade."
RATINGS RATIONALE
The review of Westlake's and Georgia Gulf's ratings will focus on
Westlake's financing for the transaction, potential integration
risks, the magnitude of synergies expected from the transaction,
and management's ability to maintain very strong credit metrics
despite the planned acquisition and previously announced capacity
additions.
On Review for Possible Downgrade:
Issuer: Westlake Chemical Corporation
-- Senior Unsecured Regular Bond/Debenture, Placed on Review
for Possible Downgrade, currently Baa3
Issuer: Louisiana Loc Govt Envir Fac & Comm Dev Auth
-- Senior Unsecured Revenue Bonds, Placed on Review for
Possible Downgrade, currently Baa3
-- Senior Unsecured Revenue Bonds, Placed on Review for
Possible Downgrade, currently Baa3
On Review for Possible Upgrade:
Issuer: Georgia Gulf Corporation
-- Probability of Default Rating, Placed on Review for Possible
Upgrade, currently Ba3
-- Corporate Family Rating, Placed on Review for Possible
Upgrade, currently Ba3
-- Senior Secured Regular Bond/Debenture, Placed on Review for
Possible Upgrade, currently B1
Outlook Actions:
Issuer: Georgia Gulf Corporation
-- Outlook, Changed To Rating Under Review From Stable
Issuer: Westlake Chemical Corporation
-- Outlook, Changed To Rating Under Review From Stable
The principal methodology used in rating Westlake and Georgia Gulf
was the 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.
Westlake Chemical Corporation, headquartered in Houston, TX, is a
producer of commodity petrochemicals (ethylene and styrene),
plastics (polyvinyl chloride and polyethylene), as well as
compounded PVC resins and fabricated PVC products (window and door
profiles, siding, etc.). Revenues were $3.4 billion for the LTM
ended September 30, 2011.
Georgia Gulf Corporation (GGC), headquartered in Atlanta, Georgia,
is a producer of commodity chemicals including chlorovinyls
(chlorine, caustic soda, vinyl chloride monomer, polyvinyl
chloride resins and vinyl compounds), PVC fabricated products
(pipe, siding, window profiles, moldings, etc.), and aromatics
(cumene, phenol and acetone). The company generated revenues of
$3.4 billion for the LTM ended September 30, 2011.
GEORGIA GULF: S&P Puts 'B+' Corporate Rating on Watch Positive
--------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings, including
the 'BBB-' corporate credit rating, on Houston-based Westlake
Chemical Corp. on CreditWatch with negative implications,
following the company's announcement that it has submitted a
proposal to Atlanta-based Georgia Gulf Corp. to acquire all
outstanding shares of Georgia Gulf for approximately $1.1 billion
in cash. "This excludes about $780 million in adjusted debt at
Georgia Gulf as of Sept. 30, 2011. At the same time, we placed our
'B+' corporate credit rating, and all issue-level ratings, on
Georgia Gulf on CreditWatch with positive implications. Westlake's
announcement also included a statement that it had already
acquired 4.8% of the outstanding common shares of Georgia Gulf,"
S&P said.
"The CreditWatch placement reflects the increased likelihood that
we will lower our ratings on Westlake and its debt issues
following its proposed acquisition of Georgia Gulf because of the
expected increase in the company's debt leverage," said Standard &
Poor's credit analyst Paul Kurias. "Westlake's announcement did
not provide details of any funding plans for the proposed cash
payment to Georgia Gulf shareholders. However, given the large
size of the proposed transaction relative to Westlake's own
operations and cash flow, and the fact that Georgia Gulf has
substantial debt obligations of its own, we believe that
Westlake's financial profile is likely to be stretched beyond
expectations at the current ratings. We also note that Westlake
announced that Georgia Gulf has rejected its proposal; therefore,
the CreditWatch listing also reflects the uncertainty on the
ultimate size of the proposal and its funding."
"At the current ratings, we expect Westlake to maintain the key
ratio of funds from operations (FFO) to total adjusted debt above
35%. The ratio was 56% as of Sept. 30, 2011 (65%, net of
restricted cash funded by debt). We believe the strength in credit
metrics offers some cushion against volatility in earnings and
cash flow at Westlake's commodity vinyls and olefin/polyolefin
businesses, and for moderate-size strategic acquisitions like the
$235 million purchase of Eastman Chemical Co.'s polyethylene and
epolene polymers business in 2006. However, larger acquisitions,
such as the proposed Georgia Gulf transaction, reflect a more-
aggressive financial policy than we had factored into our
ratings and will likely increase leverage beyond our current
expectations. While we believe the acquisition will have limited
benefits in terms of product diversity at Westlake and will not
reduce the risks arising out of exposure to commodity markets, we
believe that there will be potential for some improvement in
scale, integration, and operating efficiency, and we will weigh
these potential benefits to the business profile if the
acquisition is successful. We expect that meaningful cash balances
at Westlake will mainly fund proposed capital spending plans," S&P
said.
Westlake, with $3.5 billion in 12-month sales as of Sept. 30,
2011, is a midsize producer of commodity petrochemical products in
two broad chemical categories: olefin/polyolefins and vinyls.
Georgia Gulf is an integrated producer of PVC building and home
improvement products, PVC resin, and aromatic chemicals, with
annual revenue of nearly $3.2 billion as of Sept. 30, 2011.
"We will monitor developments relating to this transaction and
will resolve the CreditWatch listings once greater details related
to the transaction become available, including a funding plan,"
Mr. Kurias continued. "We could lower the ratings if debt levels
increase as a result of the transaction so that the company is
unable to meet our expectations at the rating, after reassessing
the business risk profile. However, while less likely, we could
still affirm ratings on Westlake if a meaningful component of the
funding plan consists of equity or cash on the balance sheet, and
we conclude that it can restore and maintain credit metrics at
levels consistent with the current ratings."
GRAB GOLF: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: GRAB Golf, LLC
dba Turquoise Hills Golf & RV
800 East Country Club Drive
Benson, AZ 85602
Bankruptcy Case No.: 12-00725
Chapter 11 Petition Date: July 13, 2012
Court: United States Bankruptcy Court
District of Arizona (Tucson)
Judge: Eileen W. Hollowell
Debtor's Counsel: John F. Battaile, Esq.
ALTFELD & BATTAILE P.C.
250 N. Meyer Avenue
Tucson, AZ 85701
Tel: (520) 622-7733
Fax: (520) 622-7967
E-mail: jfbattaile@abazlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by Arthur L. Bale, manager.
GRACE AHN: Selling Pierpont Inn & Spa for $8.5 Million
------------------------------------------------------
Carol Lawrence at Ventura County Star reports that Harry and Grace
Ahn are selling the Pierpont Inn & Spa for $8.5 million.
According to the report, Paramount Real Estate & Property
Management is handling the sale of the 6.2-acre property, and
several parties have shown interest in the hotel, said Karine
Aslanian, broker and co-owner of the firm.
The report says the hotel has a 2011 assessed land value of $5.58
million, with an improvement value of $2.79 million. It is owned
by Ahn (Family) Trust, with Grace Ahn listed as the trustee,
according to the Ventura County Assessor's Office.
Grace Ahn filed for Chapter 11 protection (Bankr. C.D. Calif. Case
No. 11-58376) on Nov. 25, 2011.
GREYSTONE LOGISTICS: Reports $368,830 Net Income in Nov. 30 Qtr.
----------------------------------------------------------------
Greystone Logistics, Inc., filed with the U.S. Securities and
Exchange Commission its Quarterly Report on Form 10-Q reporting
net income of $368,830 on $6.21 million of sales for the three
months ended Nov. 30, 2011, compared with a net loss of $428,693
on $5.05 million of sales for the same period a year ago.
For the six months ended Nov. 30, 2011, the Company reported net
income of $751,141 on $11.99 million of sales, compared with a net
loss of $846,335 on $10.04 million of sales for the same period a
year ago.
The Company's balance sheet at Nov. 30, 2011, showed $12.26
million in total assets, $20.26 million total liabilities and a $8
million total deficit.
HoganTaylor LLP, in Tulsa, Oklahoma, said Company has a working
capital deficit of $5,141,078, stockholders' deficit of
$14,206,077 and total deficit of $9,704,991. The independent
auditors noted that these deficits raise substantial doubt about
the Company's ability to continue as a going concern.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/gaxt0P
About Greystone Logistics
Tulsa, Okla.-based Greystone Logistics, Inc. (OTC BB: GLGI.OB -
News) -- http://www.greystonelogistics.com/-- manufactures and
sells plastic pallets through its wholly owned subsidiary,
Greystone Manufacturing, LLC. Greystone sells its pallets through
direct sales and a network of independent contractor distributors.
Greystone also sells its pallets and pallet leasing services to
certain large customers direct through its President, Senior Vice
President of Sales and Marketing and other employees.
GRUBB & ELLIS: BGC Has Until Jan. 31 to Provide Financing
---------------------------------------------------------
Grubb & Ellis Company, on Jan. 16, 2012, entered into an
exclusivity agreement with BGC Partners, L.P., pursuant to which
BGC has the exclusive right commencing on Jan. 16, 2012, and
expiring on Jan. 31, 2012, to pursue a potential debt or equity
financing or a strategic transaction with the Company.
A full-text copy of the Exclusivity Agreement is available for
free at http://is.gd/3v2yFP
In accordance with the terms of that certain, previously disclosed
letter agreement dated Oct. 16, 2011, by and among the Company, C-
III Investments LLC and ColFin GNE Loan Funding, LLC, on Jan. 15,
2012, the "Exclusivity Period" expired in accordance with its
terms.
About Grubb & Ellis Company
Grubb & Ellis Company -- http://www.grubb-ellis.com/-- is one of
the largest and most respected commercial real estate services and
investment companies in the world. Our 5,200 professionals in more
than 100 company-owned and affiliate offices draw from a unique
platform of real estate services, practice groups and investment
products to deliver comprehensive, integrated solutions to real
estate owners, tenants and investors. The firm's transaction,
management, consulting and investment services are supported by
highly regarded proprietary market research and extensive local
expertise. Through its investment management business, the
company is a leading sponsor of real estate investment programs.
The Company reported a net loss of $69.7 million on $575.5 million
of revenues for 2010, compared with a net loss of $80.5 million on
$527.9 million of revenues for 2009.
The Company also reported a net loss of $28.61 million on
$378.90 million of total revenue for the nine months ended Sept.
30, 2011, compared with a net loss of $58.56 million on
$372.38 million of total revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed
$149.77 million in total assets, $152.74 million in total
liabilities, $98.89 million in preferred stock, and a
$101.85 million total deficit.
The Company said it may seek additional financing prior to the
completion of its review of strategic alternatives. It is
anticipated that any strategic alternative would include
provisions to extend, retire or refinance the Colony credit
facility at or prior to maturity. If the Company is unable to
extend, retire or refinance the Colony credit facility prior to
maturity, it could create substantial doubt about the Company's
ability to continue as a going concern for the twelve month period
following the date of these financial statements. The Company
believes that upon completion of its strategic alternative process
the Company will have sufficient liquidity to operate in the
normal course over the next twelve month period.
GUITAR CENTER: Posts $612.6MM Consolidated Net Sales in Q4 2011
---------------------------------------------------------------
Guitar Center Holdings, Inc., reported a consolidated net sales
for the quarter ended Dec. 31, 2011, increased 2.5% to
$612.6 million from $597.5 million for the same period in 2010.
Guitar Center net sales for the quarter increased 6.3% to
$455.4 million from $428.6 million for the same period in 2010.
Comparable Guitar Center sales, including online operations,
increased 3.6% for the quarter. Comparable Guitar Center retail
store sales increased 2.5% for the quarter. Direct Response net
sales for the quarter decreased 11.3% to $105.7 million from
$119.1 million for the same period in 2010. Music & Arts net
sales for the quarter were $51.5 million, compared to
$49.8 million for the same period in 2010.
Consolidated net sales for the year ended Dec. 31, 2011, increased
3.6% to $2.083 billion from $2.011 billion for 2010. Guitar
Center net sales for 2011 increased 5.9% to $1.530 billion from
$1.445 billion for 2010. Comparable Guitar Center sales,
including online operations, increased 4.3% for the full year.
Comparable Guitar Center retail store sales increased 3.7% for the
full year. Direct Response net sales decreased 4.1% to
$374.3 million in 2011 from $390.4 million in 2010. Music & Arts
net sales for 2011 were $178.5 million, compared to $175.7 million
in 2010.
As of Dec. 31, 2011, the Company did not have any borrowings on
its ABL and had cash and cash equivalents of approximately $106
million.
The Company's calculation of comparable retail store sales
includes sales from stores that have been open for 14 months and
does not include the sales of online operations. The Company does
not exclude relocated stores from the calculation of comparable
store sales.
About Guitar Center
Guitar Center, Inc., headquartered in Westlake Village, Calif., is
the largest musical instrument retailer with 312 stores and a
direct response segment, which operates its websites. It operates
three distinct musical retail business - Guitar Center (about 70%
of revenue), Music & Arts (about 7% of revenue), and Musician's
Friend (its direct response subsidiary with 24% of revenue).
Total revenue is about $2 billion.
The Company also reported a net loss of $64.78 million on
$1.46 billion of net sales for the nine months ended Sept. 30,
2011, compared with a net loss of $54.17 million on $1.41 billion
of net sales for the same period during the prior year.
The Company's balance sheet at Sept. 30, 2011, showed
$2.06 billion in total assets, $1.97 billion in total liabilities
and $93.77 million in total stockholders' equity.
* * *
As reported in the Troubled Company Reporter on Feb. 28, 2011,
Moody's Investors Service affirmed Guitar Center, Inc.'s Caa2
Corporate Family Rating and the $622 million existing term loan
rating of Caa1 due October 2014. The Probability of Default
Rating was revised to Caa2/LD from Caa2 while the Speculative
Grade Liquidity assessment was changed to SGL-2 from SGL-3. The
rating outlook remains stable.
The Caa2/LD Probability of Default rating reflects Moody's view
that the extended deferral of interest on the Holdco notes
constitutes a distressed exchange under Moody's definition and
also anticipates that additional exchanges of this nature are
possible over the near term. The Limited Default designation was
prompted by the company's executed amendment of the HoldCo notes,
which allows for a deferral of 50% of the interest payments for 18
months. Moody's views this as a distressed exchange that provides
default avoidance. This LD designation applies to the proposed
follow-on amendment to defer the HoldCo note interest payments by
another six months. Subsequent to the actions, Moody's will
remove the LD designation and the PDR will be Caa2 going forward.
HANLEY WOOD: S&P Cuts Corporate Credit Rating to 'SD'
-----------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Washington, D.C.-based Hanley Wood to 'SD' (selective
default) from 'CCC-'.
"In addition, we lowered our issue-level rating on the company's
senior secured debt to 'D' from 'CC'. The recovery rating on this
debt remains unchanged at '5' (10% to 30% recovery expectation),"
S&P said.
"The downgrade reflects the application of our criteria on subpar
debt exchange transactions, which we view as tantamount to a
default, to Hanley Wood's recent recapitalization," explained
Standard & Poor's credit analyst Jeanne Shoesmith.
The recapitalization reduces the company's debt to about $80
million, from $406 million as of Sept. 30, 2011. As a result, debt
to EBITDA, adjusted for operating leases, was reduced to 4.2x for
the 12 months ended Sept. 30, 2011, from 18.8x. In conjunction
with the recapitalization, the company has a new ownership group
that invested $35 million in capital.
For the first nine months of 2011, revenue and EBITDA increased 3%
and 19% due to a slight recovery in print revenues. Although
results exceeded our expectations for the company, EBITDA remains
at very depressed levels, largely because EBITDA from trade shows
dropped 35% in 2010 and 3% in the first nine months of 2011. For
the 12 months ended Sept. 30, 2011, the company's EBITDA margin
was 16.3%, up from 13.5% in the prior-year period, because of
print revenue growth. The company's margin had been at or above
20% for several years prior to 2010.
"We will reassess the corporate credit rating upon further review
of credit documents and business trends," S&P said.
HARRISBURG, PA: Officials Ignored Incinerator Risk, Audit Says
--------------------------------------------------------------
Michael Bathon, substituting for Bloomberg News bankruptcy
columnist Bill Rochelle, reports that, according to an audit of
the financings that drove Harrisburg into insolvency, officials
and advisers of the Pennsylvania capital knew there was
"substantial risk" an incinerator wouldn't repay its debt and
proceeded with bond deals anyway.
According to the report, the Harrisburg Authority, the agency that
owns the incinerator, released the forensic report on deals that
saddled the city with more than $300 million in debt, a load five
times its general-fund budget. The state placed the community in
receivership last year.
"They received significant guarantee fees or insurance premiums
for doing so, knowing the risks associated with default," the
audit said. "All evidence pointed to the RRF's inability to
service existing and contemplated debt."
Philadelphia-based law firm Klehr Harrison Harvey Branzburg LLC,
accounting firm ParenteBeard LLC and New York-based Public
Resources Advisory Group conducted the audit.
The report comes ahead of the recovery plan David Unkovic,
Harrisburg's state-appointed receiver, will submit for court
approval Feb. 6.
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.
The Harrisburg city council voted 4-3 on Oct. 11, 2011, to
authorize the filing of a Chapter 9 municipal bankruptcy (Bankr.
M.D. Pa. Case No. 11-06938). 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.
Judge Mary D. France presided over the Chapter 9 case. Mark D.
Schwartz, Esq. and David A. Gradwohl, Esq., served as Harrisburg's
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.
Harrisburg 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.
The Commonwealth of Pennsylvania, the County of Dauphin, and
Harrisburg city mayor Linda D. Thompson and other creditors and
interested parties objected to the Chapter 9 petition. The state
later adopted a new law allowing the governor to appoint a
receiver.
Kenneth W. Lee, Esq., Christopher E. Fisher, Esq., Beverly Weiss
Manne, Esq., and Michael A. Shiner, Esq., at Tucker Arensberg,
P.C., represented Mayor Thompson in the Chapter 9 case. Counsel to
the Commonwealth of Pennsylvania was Neal D. Colton, Esq., Jeffrey
G. Weil, Esq., Eric L. Scherling, Esq., at Cozen O'Connor.
In November 2011, the Bankruptcy Judge dismissed the Chapter 9
case because (1) the City Council did not have the authority under
the Optional Third Class City Charter Law and the Third Class City
Code to commence a bankruptcy case on behalf of Harrisburg and (2)
the City was not specifically authorized under state law to be a
debtor under Chapter 9 as required by 11 U.S.C. Sec. 109(c)(2).
That same month, the state governor appointed David Unkovic as
receiver for Harrisburg. Mr. Unkovic is represented by the
Municipal Recovery & Restructuring group of McKenna Long &
Aldridge LLP, led by Keith Mason, Esq., co-chair of the group.
HBC ENTERPRISES: Case Summary & 3 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: HBC Enterprises Inc.
P.O. Box 6
Aurora, MO 65605
Bankruptcy Case No.: 12-30011
Chapter 11 Petition Date: January 13, 2012
Court: U.S. Bankruptcy Court
Western District of Missouri (Joplin)
Judge: Jerry W. Venters
Debtor's Counsel: Norman E. Rouse, Esq.
COLLINS, WEBSTER & ROUSE, PC
5957 E. 20th Street
Joplin, MO 64801
Tel: (417) 782-2222
Fax: (417) 782-1003
E-mail: twelch@cwrcave.com
Scheduled Assets: $451,000
Scheduled Liabilities: $1,097,128
The Company?s list of its three largest unsecured creditors filed
with the petition is available for free at:
http://bankrupt.com/misc/mowb12-30011.pdf
The petition was signed by Greg Hagebusch & James Fiddler,
secretary and president.
HERBST GAMING: Reclassification of Punitive Damages Claim Affirmed
------------------------------------------------------------------
District Judge Robert C. Jones affirmed the portion of the
bankruptcy court order confirming Herbst Gaming's Chapter 11 plan
that provided for the reclassification of a punitive damages
claim.
Juan Delegado, Sr., individually and in his capacity as the
administrator of the Estate of Rosa Delegado, sued E-T-T Inc., one
of the Debtors, in state court, winning compensatory damages of
$4,183,250.50 and punitive damages in the same amount after
remittitur. The amended judgment is under consideration by the
Nevada Supreme Court on rehearing en banc.
In the bankruptcy case, Mr. Delegado filed unsecured proofs of
claim against ETT based upon the punitive damages award. At least
two other claimants filed proofs of claim against ETT or other of
the Debtors based in part upon punitive damages, but those claims
had not been reduced to judgment.
The Debtors' proposed plan would have put all general unsecured
claims in Class 4, to be paid in full, but would have put all
claims for punitive damages in Class 6, to be totally impaired.
Mr. Delegado et al. filed an objection to the Plan, arguing that
it unfairly discriminated against Class 6 claims because they were
unsecured claims like those in Class 4 and therefore should have
been included with them under 11 U.S.C. Sec. 726(a)(4).
The bankruptcy court ruled that all of Mr. Delegado et al.'s
claims, compensatory and punitive, had to be included in Class 4,
because to put them in another class would have been unfairly
discriminatory. The bankruptcy court noted that Sec. 726(a) was a
mandatory classification scheme for Chapter 7 cases, but although
not mandatory in Chapter 11 cases, could be used as a basis for
appealing to a bankruptcy judge's discretion under 11 U.S.C. Sec.
1122(a) in Chapter 11 cases. The bankruptcy judge then ruled that
putting the Claim into Class 6, or any class apart from Class 4,
would not comport with the Bankruptcy Code because it would
constitute unfair discrimination. The bankruptcy court reasoned
that because the Claim was the only claim based upon punitive
damages that had been reduced to judgment, it would be unfair to
separate the Claim from other unsecured claims.
The bankruptcy court issued the confirmation order, adopting the
Plan, modified as follows: (1) the Plan did not comply with the
"best interests of creditors" test under Sec. 1129(a)(7) as to the
proposed Class 6 claims; (2) modification of Class 6 claims was
required under Sections 1122(a) and 1123(a)(1)-(2); and (3) the
Plan unfairly discriminated against Class 6 claims under Sec.
1129(b). The Confirmation Order therefore moved all proposed
Class 6 claims into Class 4.
The Debtors appealed the Confirmation Order to the extent it puts
the proposed Class 6 claims into Class 4. Two other appeals of
the Confirmation Order have since been voluntarily dismissed. The
propriety of the punitive damages award underlying the Claim is
currently under en banc reconsideration by the Nevada Supreme
Court in Case No. 46901. That Court heard the case in January
2011 but has yet to issue a ruling. The District Court stayed the
case pending the Nevada Supreme Court's ruling, but at a recent
status conference the Court determined to hold oral argument and
rule in the present case directly.
In his ruling, Judge Jones said Sec. 1122(a) does not prohibit
putting substantially similar claims into different classes, but
Sec. 1129(b)(1) requires a rational reason for doing it. The
usual rationale for subordinating punitive claims to other claims
is that it is inequitable to make a debtor's innocent creditors
suffer a prorated share of a debtor's punishment by diluting their
claims in favor of a punitive claim. Neither does treating
punitive claims like other claims in liquidation serve the
purposes of punitive damages (deterrence and punishment), because
a liquidated debtor will be none the worse whether the punitive
claims are allowed or not. This iniquity will always be the
result where punitive claims are classed with non-punitive claims
in liquidation cases, which is probably at least part of the
reason Congress has mandated strict subordination of punitive
claims to non-punitive claims under Sec. 726(a).
But in the present reorganization case, according to Judge Jones,
no creditors are heard to argue that their claims have been
diluted by the reclassification of Mr. Delegado et al.'s punitive
claims. And the reason for their silence is clear: all Class 4
claims are to be paid in full, in cash, or to be left otherwise
unimpaired.
The Debtors' "only grievance is that they will emerge from
reorganization with less capital that they had hoped because the
bankruptcy court has refused to impose a 100% cram-down against
[Mr. Delegado et al.] -- judgment creditors who hold a state court
judgment against them," Judge Jones said. "This is not a
liquidation case or even a reorganization case where the class of
claims into which the punitive damages claim has been put is
capped at some arbitrary amount with a prorated cram-down, and
there is therefore no harm to innocent creditors from the payment
of the punitive damages claim."
Judge Jones also noted that the only remaining rationale the
Debtors propose is that had it not been for the Debtors'
supposition that punitive claims would remain totally impaired in
Class 6, they would have offered no "gift" to the other unsecured
creditors in Class 4, because they feared tens of millions of
dollars in other potential punitive damages awards. But, Judge
Jones pointed out, Mr. Delegado et al.'s $4.2 million Claim cannot
have contributed to any uncertainty over the potential for future
punitive damages when the Debtors proposed their plan, because Mr.
Delegado et al.'s claim had already been reduced to judgment in
state court and was due and owing like every other unsecured
claim.
The case is ZANTE, INC. et al., Appellants, v. JUAN DELGADO, SR.
et al., Appellees, No. 3:10-cv-00131-RCJ-WGC (D. Del.). A copy of
Judge Jones' Jan. 10 Order is available at http://is.gd/z2sTvyc
from Lealge.com.
Appellee Wilmington Trust Company is represented by Bruce T.
Beesley, Esq., at Lewis and Roca LLP; and Thomas Kreller, Esq. --
tkreller@milbank.com -- at Milbank Tweed Hadley & McCloy LLP.
Appellee KMart Corporation is represented by Jeffrey L. Hartman,
Esq. -- mail: jlh@bankruptcyreno.com. Reno, NV HARTMAN & HARTMAN.
Paul Roshetko, Appellee, represented by Cecilia Lee.
Juan Delegado, Sr., Appellee, represented by Craig S Dunlap,
Fennemore Craig, P.C..
Estate of Rosa Delegado, Juan Delegado, Special Administrator,
Appellee represented by Craig S Dunlap, Fennemore Craig, P.C..
Clark County Development Corporation, Appellee, represented by Amy
N Tirre.
Clark County Development Corporation, Appellee, represented by
Douglas E Gross, Brown Winick Gross Graves Baskerville and
Schoenebaum.
About Herbst Gaming
Headquartered in Reno, Nevada, Herbst Gaming, Inc. --
http://www.herbstgaming.com/-- is a diversified gaming company.
The Company and its subsidiaries focus on two business lines, slot
route operations and casino operations. The Company's route
operations involves the exclusive installation and, as of
September 30, 2009, operation of around 6,300 slot machines in
non-casino locations, such as grocery stores, drug stores,
convenience stores, bars and restaurants. The casino operations
consist of 16 casinos located in Nevada, Iowa and Missouri.
The Company and 17 of its affiliates filed for Chapter 11
protection on March 22, 2009 (Bankr. D. Nev. Lead Case No.
09-50752). Thomas H. Fell, Esq., and Gerald M. Gordon, Esq., at
Gordon Silver, represented the Debtors in their restructuring
effort. Herbst Gaming had $919.1 million in total assets and
debts of $1.57 billion as of the Chapter 11 filing. The
Bankruptcy Court issued an order on Jan. 22, 2010, confirming the
company's amended joint plan of reorganization. The plan became
effective Feb. 5, 2010.
Herbst Gaming LLC, the reorganized entity, changed its name to
Affinity Gaming LLC in May 2011. On Dec. 31, 2010, (i) Affinity
Gaming acquired substantially all of the assets of its Predecessor
(Herbst Gaming Inc. or HGI) in consideration of $350 million in
aggregate principal amount of senior secured loans and the
issuance to Predecessor of all of the Company's common membership
units, (ii) the senior secured loans and common units were
distributed by Predecessor to the lenders under HGI's prior credit
facility on a pro rata basis in accordance with HGI's bankruptcy
plan, (iii) all of Predecessor's roughly $1.1 billion in
outstanding long-term debt obligations, consisting of borrowings
under HGI's credit facility, $160.0 million of outstanding
principal amount of 8.125% senior subordinated notes and $170.0
million of outstanding principal amount of 7% senior subordinated
notes, were terminated, and (iv) 100% of the existing equity in
Predecessor was cancelled.
HOME LOAN: Case Summary & 2 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: Home Loan Service Corporation
dba California Home Loans
1885 The Alameda, Suite 203
San Jose, CA 95126
Bankruptcy Case No.: 12-50247
Chapter 11 Petition Date: January 12, 2012
Court: United States Bankruptcy Court
Northern District of California (San Jose)
Judge: Charles Novack
Debtor's Counsel: David S. Levin, Esq.
LEVIN LAW FIRM
405 Sherman Ave.
Palo Alto, CA 94306
Tel: (650) 858-8500
E-mail: david@levinlawfirm.com
Scheduled Assets: $51,909
Scheduled Liabilities: $3,482,643
A list of the Company's two largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/canb12-50247.pdf
The petition was signed by Keith C. Knapp, president.
Affiliates that filed separate Chapter 11 petitions:
Petition
Debtor Case No. Date
------ -------- ----
In Re Derald R. Kenoyer 11-53472 04/13/2011
Kenoyer V. Cardinale 11-5130 04/20/2011
Cardinale V. Kenoyer 11-5214 07/18/2011
HOSPITAL DAMAS: Will Seek Plan Confirmation at Feb. 9 Hearing
-------------------------------------------------------------
As reported in the TCR on Jan. 12, 2012, Judge Edward A. Godoy of
the U.S. Bankruptcy Court for the District of Puerto Rico approved
on Dec. 6, 2011, the disclosure statement explaining Hospital
Damas Inc.'s First Amended Joint Plan of Reorganization Plan.
The hearing on confirmation of the Plan is currently set for
Feb. 9, 2012, 9:30 a.m.
As previously reported by the Troubled Company Reporter on
Dec. 16, 2011, the Plan segregates various claims and shareholder
interest into five classes. The Class 1 Allowed Claim of Banco
Popular de Puerto Rico for $23,081,328 will be paid in full over
time. Class 2 Allowed General Unsecured Claims arising from
medical malpractice actions, totaling $1,006,613 as of July 31,
2011, will be paid on a pro rata basis from a self-insured fund to
be established. Class 3 Other Allowed General Unsecured Claims,
estimated at $6,988,997, is projected to make a 50% recovery from
a creditor trust to be established. Class 4 Allowed General
Unsecured Claims arising from assumed executory contracts,
estimated at $3,627,259, is estimated to make a 62.9% recovery
through different payment plans negotiated with landlords or
suppliers. Class 5 Interests will be retained.
A copy of the First Amended Joint Disclosure Statement explaining
the Plan is available for free at:
http://bankrupt.com/misc/hospitaldamas.dkt819.pdf
About Hospital Damas
Ponce, Puerto Rico-based Hospital Damas, Inc., operates a general
acute care hospital, providing critical care, general medical and
skilled nursing services. Debtor is a wholly owned subsidiary of
Fundacion Damas Inc.
The Company filed for Chapter 11 bankruptcy protection (Bankr. D.
P.R. Case No. 10-08844) on Sept. 24, 2010. According to its
schedules, the Debtor disclosed US$24,017,166 in total assets and
US$21,267,263 in total liabilities.
Attorneys at Charles A. Cuprill, P.S.C., in San Juan, Puerto
Rico, represent the Debtor as counsel. Jorge P. Sala Law Offices
serves as the Debtor's labor law special counsel, to be assisted
by special counsel Fiddler, Gonzalez & Rodriguez, P.S.C.
Attorneys at Kilpatrick Townsend & Stockton LLP, in Atlanta, Ga.,
represent the Official Committee of Unsecured Creditors as
counsel.
HOVENSA LLC: Fitch Assigns 'BB-' Rating to Tax-Exempt Bonds
-----------------------------------------------------------
HOVENSA L.L.C. announced that it will shut down its refinery
operations and expects to tender for 100% of the outstanding $356
million tax-exempt bonds maturing in 2021 and 2022 at par value.
Fitch rates the bonds 'BB-' with a Stable Outlook. Fitch believes
the debt may be retired subsequent to the tender offer, subject to
a review of complete terms and conditions of the tender offer.
If HOVENSA successfully purchases all of the outstanding bonds,
the company will have no outstanding bond or bank obligations.
Bank obligations have been met, as management reports that it
terminated and paid the $400 million credit revolver, which was
due to expire December 2012. Fitch will assess the need to
maintain any debt rating once the tender transaction closes.
HOVENSA was formed as a joint venture between subsidiaries of Hess
Corporation (Hess; Issuer Default Rating 'BBB', Stable Outlook by
Fitch) and Petroleos de Venezuela S.A. (PDVSA; IDR 'B+', Stable
Outlook) to own and operate a refinery located in St. Croix, U.S.
Virgin Islands. PDVSA supplies up to 75% of crude to the project
at prices that are largely Brent-linked, while the remaining crude
supplies are mainly sourced through West African markets. Hess
and PDVSA each purchase 50% of the project's refined products,
after any spot sales. Approximately 80% of HOVENSA's products are
sold into the U.S. East & Gulf Coasts, while the remaining 20% is
mainly sold into the Caribbean and U.S. Virgin Islands. The
refinery has experienced increasing financial stress since 2008.
HOVENSA announced on Jan. 18, 2012 that it will shut down its
refinery by the middle of February and will operate it as an oil
storage terminal. HOVENSA cited losses of $1.3 billion in the
last three years that were projected to continue, caused primarily
by weakness in demand for refined petroleum products amid the
global economic slowdown and the addition of new refining capacity
in emerging markets. On or about Jan. 23, 2012 HOVENSA expects to
offer to purchase all of the outstanding approximately $356
million senior secured tax-exempt bonds at par value. The tender
offer for the tax-exempt bonds is expected to expire on Feb. 17,
2012.
INNER CITY: Can Access Senior Lenders Cash Coll. Until Mar. 6
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
entered, on Jan. 10, 2012, a seventh interim order authorizing
Inner City Media Corporation, et al., to use cash collateral of
the Senior Lenders through and including March 6, 2012, solely in
accordance with an approved budget and a 13-week professional fee
budget. The cash collateral will be used exclusively to fund
working capital and general corporate purposes of the Debtors, and
the costs, fees, and expenses incurred in connection with the
administration and prosecution of the cases.
The Court held that subject to availability of sufficient cash
under the Approved Budget, the Debtors will pay:
(i) all reasonable fees and out-of-pocket costs and expenses
of the Agent, including, but not limited to, reasonable
fees and out-of-pocket costs and expenses of counsel to
the Agent, incurred after August 19, 2011, up to an
aggregate amount of $50,000 per month; and
(ii) all reasonable fees and out-of-pocket costs and expenses
of the Senior Lenders, including, but not limited to,
reasonable fees and out-of-pocket costs and expenses of
counsel to the Senior Lenders, incurred (a) after
August 19, 2011, through January 31, 2012, up to an
aggregate amount of $300,000 and (b) from February 1,
2012 through the date on which the sale of all or
substantially all of the Debtors' assets is consummated
up to an aggregate amount of $200,000 per month, all
promptly upon receipt of invoices for such fees, costs,
and expenses with copies of the invoices provided to the
U.S. Trustee and any statutory committee of unsecured
creditors appointed in the Cases. If the Agent Fees and
Expenses are less than $50,000 in any monthly period,
the unused amount may be carried over to future Agent
Fees and Expenses periods.
None of these payable fees, costs, and expenses will be subject to
separate approval by the Court, and no recipient of any
payment will be required to file any interim or final fee
applications with respect to the Agent Fees and Expenses or the
Senior Lenders Fees and Expenses.
In the event the Court determines by final, non-appealable order
that any Adequate Protection Payment was improper as a result of
application of Section 506(b) of the Bankruptcy Code, the Adequate
Protection Payments will be subject to total or partial
application to principal, as the Court may determine.
In addition, the Court Order disclosed amended milestones, which
provides that:
(a) On or before January 23, 2012, the Debtors and NewCo will
have entered into an asset purchase agreement together
with related disclosure schedules, which will (i)
memorialize the Term Sheet and any non-material
modifications resulting from the due diligence of the
parties and (ii) be in form and substance acceptable to
the Debtors and the Senior Lenders.
(b) On or before January 23, 2012, the Debtors will have
filed a proposed order approving the Sale.
(c) If any other Qualified Bid is submitted prior to the Bid
Deadline, the Debtors will have commenced the Auction, if
any, on or before February 16, 2012.
(d) On or before February 21, 2012, the Bankruptcy Court will
have commenced a hearing to consider approval of the Sale.
(e) On or before February 24, the Bankruptcy Court will have
entered an order approving the Sale, which order will be
in form and substance acceptable to the Debtors and the
Senior Lenders.
(f) Within two business days after entry of the Sale Order,
the Debtors will have filed the requisite applications
with the Federal Communications Commission, seeking FCC
consent to (i) the assignment of the Debtors' FCC licenses
for the Purchased Stations to NewCo or the Permitted
Designee (as applicable) in connection with the Sale and
(ii) the assignment of the Debtors' FCC licenses for the
Trust Station to the Divestiture Trust.
About Inner City Media Corp.
On Aug. 23, 2011, affiliates of Yucaipa and CF ICBC LLC, Fortress
Credit Funding I L.P., and Drawbridge Special Opportunities Fund
Ltd., signed involuntary Chapter 11 petitions for Inner City Media
Corp. and its affiliates (Bankr. S.D.N.Y. Case Nos. 11-13967 to
11-13979) to collect on a $254 million debt.
The Petitioning Creditors are party to the senior secured credit
Facility pursuant to which they (or their predecessors in
interest) extended $197 million in loans to the Alleged Debtors to
be used for general corporate purposes. More than two years ago,
the Alleged Debtors defaulted under the Senior Secured Credit
Facility, and in any event the entire amount of principal and
accrued and unpaid interest and fees became immediately due and
payable on Feb. 13, 2010.
Inner City Media's affiliates subject to the involuntary Chapter
11 are ICBC Broadcast Holdings, Inc., Inner-City Broadcasting
Corporation of Berkeley, ICBC Broadcast Holdings-CA, Inc., ICBC-
NY, L.L.C., ICBC Broadcast Holdings-NY, Inc., Urban Radio, L.L.C.,
Urban Radio I, L.L.C., Urban Radio II, L.L.C., Urban Radio III,
L.L.C., Urban Radio IV, L.L.C., Urban Radio of Mississippi,
L.L.C., and Urban Radio of South Carolina, L.L.C.
Judge Shelley C. Chapman granted each of Inner City Media
Corporation and its debtor affiliates relief under Chapter 11 of
the United States Code. The decision came after considering the
involuntary petitions, and the Debtors' answer to involuntary
petitions and consent to entry of order for relief and reservation
of rights.
Attorneys for Yucaipa Corporate Initiatives Fund II, L.P. and
Yucaipa Corporate Initiatives (Parallel) Fund II, L.P. are John J.
Rapisardi, Esq., and Scott J. Greenberg, Esq., at Cadwalader,
Wickersham & Taft LLP. Attorneys for CF ICBC LLC, Fortress Credit
Funding I L.P., and Drawbridge Special Opportunities Fund Ltd. are
Adam C. Harris, Esq., and Meghan Breen, Esq., at Schulte Roth &
Zabel LLP.
Akin Gump Strauss Hauer & Feld LLP serves as the Debtors' counsel.
Rothschild Inc. serves as the Debtors' financial advisors and
investment bankers. GCG Inc. serves as the Debtors' claims agent.
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
Inner City Media because an insufficient number of persons holding
unsecured claims against the Debtor has expressed interest in
serving on a committee.
JACOBS FINANCIAL: Delays Form 10-Q for Nov. 30 Quarter
------------------------------------------------------
Jacobs Financial Group, Inc., was unable without unreasonable
effort and expense to prepare its accounting records and schedules
in sufficient time to allow its accountants to complete their
review of the Company's financial statements for the period
ended Nov. 30, 2011, before the required filing date for the
subject Quarterly Report on Form 10-Q. The Company intends to
file the subject Quarterly Report on Form 10-Q on or before the
fifth calendar day following the prescribed due date.
About Jacobs Financial
Jacobs Financial Group, Inc. (OTC Bulletin Board: JFGI) is a
Charleston, West Virginia-based holding company for First Surety
Corporation, a West Virginia domiciled surety, Triangle Surety
Agency, an insurance agency that specializes in coal reclamation
surety bonds, and Jacobs & Company, a registered investment
advisor.
The Company reported a net loss of $1.30 million on $1.56 million
of total revenues for the year ended May 31, 2011, compared with a
net loss of $1.45 million on $1.37 million of total revenues
during the prior year.
The Company's balance sheet at Aug. 31, 2011, showed $8.90 million
in total assets, $13.82 million in total liabilities, $3.16
million in total mandatorily redeemable preferred stock, and a
$8.08 million total stockholders' deficit.
Malin, Bergquist & Co., LLP, in Pittsburgh, PA, noted that the
Company's significant net working capital deficit and operating
losses raise substantial doubt about its ability to continue as a
going concern.
JCK HOTELS: Wants Plan Filing Period Extended Until April 2
-----------------------------------------------------------
JCK Hotels, LLC, asks the U.S. Bankruptcy Court for the Southern
District of California for a second extension of its exclusive
periods to file a plan and to solicit acceptances thereof through
and including April 2, 2012, and May 28, 2012, respectively, based
on the need to finalize negotiations with a third-party investor,
whose contribution to Debtor will fund a plan of reorganization.
About JCK Hotels, LLC
JCK Hotels, LLC, fka Mira Mesa Hotels, LLC, operates the Holiday
Inn Express Mira Mesa Hotel and the Comfort Suites Mira Mesa Hotel
in San Diego, California. The Hotels are operated under licensing
and franchise agreements with Holiday Inn Express and Comfort
Suites.
JCK Hotels filed for Chapter 11 bankruptcy (Bankr. S.D. Calif.
Case No. 11-09428) on June 3, 2011. Judge Louise DeCarl Adler
presides over the case. William M. Rathbone, Esq., and Daniel C.
Silva, Esq., at Gordon & Rees LLP, in San Diego, Calif., serve as
bankruptcy counsel. The Debtor tapped Dae Hyun Kim, CPA &
Associates as financial advisor. While no formal appraisal has
been done recently, the Debtor believes the fair market value of
both Hotels exceeds $18 million. The Debtor disclosed
$19,611,552 in assets and $14,974,079 in liabilities as of the
Chapter 11 filing. The petition was signed by Charles Jung,
managing member.
Tiffany L. Carroll, Acting United States Trustee for Region 16,
under 11 U.S.C. Sec. 1102(a) and (b), appointed three unsecured
creditors to serve on the Official Committee of Unsecured
Creditors of JCK Hotels, LLC.
JEFFERSON COUNTY: Eyes J.P. Morgan Deal With Houston Astros Owner
-----------------------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that gearing up for a
fight with J.P. Morgan Chase & Co. over disastrous sewer-bond
deals, Alabama's Jefferson County is seeking to investigate a
settlement that the investment bank cut last week with Houston
Astros owner Jim Crane, who got stuck with the county's soured
bonds when the financial markets collapsed.
About Jefferson County
Jefferson County has its seat in Birmingham, Alabama. It has a
population of 660,000.
Jefferson County filed a bankruptcy petition under Chapter 9
(Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an
agreement among elected officials and investors to refinance
$3.1 billion in sewer bonds fell apart.
John S. Young Jr. LLC was appointed as receiver by Alabama Circuit
Court Judge Albert Johnson in September 2010.
Jefferson County's bankruptcy represents the largest municipal
debt adjustment of all time. The county said that long-term debt
is $4.23 billion, including about $3.1 billion in defaulted sewer
bonds where the debt holders can look only to the sewer system for
payment.
The county said it would use the bankruptcy court to put a value
on the sewer system, in the process fixing the amount bondholders
should be paid through Chapter 9.
Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers
at Bradley Arant Boult Cummings LLP and Klee, Tuchin, Bogdanoff &
Stern LLP, led by Kenneth Klee, represent the Debtor as counsel.
Kurtzman Carson Consultants LLC serves as claims and noticing
agent. Jefferson estimated more than $1 billion in assets. The
petition was signed by David Carrington, president.
JESCO CONSTRUCTION: Files List of 19 Largest Unsecured Creditors
----------------------------------------------------------------
JESCO Construction Corporation has filed with the U.S. Bankruptcy
Court for the Southern District of Mississippi a list of its 19
largest unsecured creditors:
Entity Claim Amount
------ ------------
R E Huber Construction Co.
2023 US Highway 68
Maysville, KY 41056 $3,548,160.00
Walter C. Ernest III
2154 Venetia Road
Mobile, AL 36605 $3,121,000.00
Theodore Conner III
dba War-Con Construction
3820 Horseshoe Road
New Bern, NC 28562 $1,200,000.00
Ann Shavers $1,000,000.00
Brian P. Min $10,312.80
CS & Associates $84,000.00
D&S Excavators, LLC $673,200.00
Dean Holmes $10,000.00
Gary Riebschlager $13,750.40
Leland C. de la Garza $10,312.80
MEPCO $157,704.18
Michael Thompson $63,121.20
Post, Buckley, Schuh et al $19,411.07
Rainer Lorenz $10,312.80
Ralph Wheat $130,000.00
Robert J. Noe $19,000.00
Thomas Carpenter $5,000.00
Victoria Cornea $50,000.00
William M. Beadie $10,312.80
Headquartered in Wiggins, Mississippi, Jesco Construction Corp., a
Delaware Corporation, specializes in disaster response and was
part of the Hurricane Katrina cleanup. It filed for Chapter 11
bankruptcy (Bankr. S.D. Miss. Case No. 12-50014) on Jan. 5, 2012.
Judge Katharine M. Samson presides over the case. Craig M. Geno,
Esq., at Harris Jernigan & Geno, PLLC, serves as the Debtor's
counsel. In its petition, the Debtor estimated $100 million to
$500 million in assets and $10 million to $50 million in debts.
KGB: S&P Lowers Corp. Credit Rating to 'B-'; Outlook Developing
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
directory assistance provider kgb, including the corporate credit
rating, which it lowered to 'B-' from 'B+'. The outlook is
developing.
"We also lowered the rating on the first-lien credit facilities to
'B-' from 'B+', with the recovery remaining '3'. In addition, we
lowered the rating on the second-lien term loan to 'CCC' from 'B-
', with the recovery rating remaining '6'," S&P said.
"These rating actions reflect the fact that kgb has $206 million
in term debt maturing in December 2012 and an undrawn revolving
credit facility also maturing in December 2012. The company has
yet to announce a refinancing plan," S&P said.
"Given the one-year time horizon for the debt maturities, and the
fact that cash from operations and available cash balances are not
sufficient to repay this debt," said Standard & Poor's credit
analyst Catherine Cosentino, "we have revised the liquidity
assessment of the company to 'weak' from 'less than adequate' (as
defined in our criteria). Under our liquidity criteria, the
corporate credit rating for a company with weak liquidity can be
no higher than 'B-'."
"The outlook is developing. We could lower the ratings within the
next 12 months if the company can't address its near-term
maturities and we considered a debt restructuring to be more
likely. Conversely, if the company addresses the term loan
maturity and $125 million of second-lien debt maturing in
December 2013, through a refinancing that materially improves the
company's liquidity to either 'adequate' or 'less than adequate'
under our criteria definition, we could raise the corporate credit
rating by one notch. However, such an upgrade would also depend on
the company's ability to keep revenue and EBITDA declines to the
high-single-digit and 10% range for 2012," S&P said.
KLEPZIG MATERIAL: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Klepzig Material & Trucking, Inc.
4809 Williams Drive
Georgetown, TX 78633
Bankruptcy Case No.: 12-10068
Chapter 11 Petition Date: January 12, 2012
Court: U.S. Bankruptcy Court
Western District of Texas (Austin)
Judge: H. Christopher Mott
Debtor's Counsel: Frank B. Lyon, Esq.
6836 Austin Center Boulevard, Suite 150
Austin, TX 78731
Tel: (512) 345-8964
Fax: (512) 697-0047
E-mail: frank@franklyon.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company?s list of its 20 largest unsecured creditors filed
with the petition is available for free at:
http://bankrupt.com/misc/txwb12-10068.pdf
The petition was signed by Dalton Kaye, CFO.
L.A. TRADERS: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: L.A. Traders, Inc.
dba Mr. Special
12010 N. Miami Avenue
Miami, FL 33169
Bankruptcy Case No.: 12-00209
Chapter 11 Petition Date: January 13, 2012
Court: United States Bankruptcy Court
Middle District of Florida (Jacksonville)
Debtor's Counsel: Ronald Cutler, Esq.
RONALD CUTLER PA
1172 Pelican Bay Drive
Daytona Beach, FL 32119
Tel: (386) 788-4480
Fax: (386) 788-6040
E-mail: ronaldcutlerpa@bellsouth.net
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 20 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/flmb12-00209.pdf
The petition was signed by Juan R. Sepulveda, president.
LE-NATURE'S INC: Two More Scammers Get 5-Year Sentence
------------------------------------------------------
Martin Bricketto at Bankruptcy Law360 reports that another former
Le-Nature's Inc. officer and a one-time equipment broker for the
bankrupt beverage maker were each sentenced in Pennsylvania
federal court to five years in prison for their roles in the
company's $668 million accounting fraud.
While former LNI CEO Gregory J. Podlucky had been pinned as the
alleged mastermind of the fraud, he purportedly had help from
within and outside the company. His brother Jonathan Podlucky and
Donald K. Pollinger, the Charlotte, N.C.-based equipment broker,
both pled guilty May 26, according to Law360.
About Le-Nature's Inc.
Headquartered in Latrobe, Pennsylvania, Le-Nature's Inc. --
http://www.le-natures.com/-- made bottled waters, teas, juices
and nutritional drinks. Its brands included 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.
LEVEL 3: Subsidiary Plans to Offer $350 Million Senior Notes
------------------------------------------------------------
Level 3 Communications, Inc., announced that its subsidiary, Level
3 Financing, Inc., plans to offer $350 million aggregate principal
amount of senior notes that will mature in 2020 and will bear
interest at a fixed rate in a proposed private offering to
"qualified institutional buyers," as defined in Rule 144A under
the Securities Act of 1933, as amended, and non-U.S. persons
outside the United States under Regulation S under the Securities
Act of 1933. Level 3 Financing, Inc.'s obligations under the
senior notes will be fully and unconditionally guaranteed on an
unsecured basis by Level 3 Communications, Inc.
A portion of the net proceeds from the offering of the senior
notes will be used to redeem a portion of Level 3 Financing,
Inc.'s outstanding 9.25% Senior Notes due 2014. Any remaining net
proceeds will be used for general corporate purposes.
The senior notes will not be registered under the Securities Act
of 1933 or any state securities laws and, unless so registered,
may not be offered or sold except pursuant to an applicable
exemption from the registration requirements of the Securities Act
of 1933 and applicable state securities laws.
About Level 3 Communications
Headquartered in Broomfield, Colorado, Level 3 Communications,
Inc., is a publicly traded international communications company
with one of the world's largest communications and Internet
backbones.
The Company's balance sheet at Sept. 30, 2011, showed $9.25
billion in total assets, $9.77 billion in total liabilities and a
$523 million total stockholders' deficit.
Level 3 Communications carries a 'Caa1' corporate family rating,
and 'Caa2' probability of default rating, with negative outlook
from Moody's, a 'B-' issuer default rating from Fitch, and 'B-'
long term issuer credit ratings from Standard & Poor's.
LEVEL 3: Unit Completes Offering of $900MM 8.625% Senior Notes
--------------------------------------------------------------
Level 3 Financing, Inc., Level 3 Communications, Inc.'s wholly-
owned subsidiary, has completed its previously announced offering
of $900 million aggregate principal amount of its 8.625% Senior
Notes due 2020 in a private offering to "qualified institutional
buyers," as defined in Rule 144A under the Securities Act of 1933,
as amended, and non-U.S. persons outside the United States under
Regulation S under the Securities Act of 1933.
The notes will mature on July 15, 2020. Level 3 Financing, Inc.'s
obligations under the 8.625% Senior Notes will be fully and
unconditionally guaranteed on an unsecured basis by Level 3
Communications, Inc.
A portion of the net proceeds from the offering will be used to
redeem all of Level 3 Financing's outstanding 9.25% Senior Notes
due 2014 in aggregate principal amount of $807 million. The
remaining proceeds will constitute purchase money indebtedness
under the existing indentures of Level 3 and will be used solely
to fund the cost of construction, installation, acquisition,
lease, development or improvement of any Telecommunications/IS
Assets, including the cash purchase price of any past, pending or
future acquisitions.
On Jan. 13, 2012, a notice of redemption was distributed to
holders of Level 3 Financing's 9.25% Senior Notes due 2014. The
redemption of all Level 3 Financing's outstanding 9.25% Senior
Notes due 2014 is scheduled to occur on Feb. 12, 2012.
The notes are not registered under the Securities Act of 1933 or
any state securities laws and, unless so registered, may not be
offered or sold except pursuant to an applicable exemption from
the registration requirements of the Securities Act of 1933 and
applicable state securities laws.
About Level 3 Communications
Headquartered in Broomfield, Colorado, Level 3 Communications,
Inc., is a publicly traded international communications company
with one of the world's largest communications and Internet
backbones.
The Company's balance sheet at Sept. 30, 2011, showed $9.25
billion in total assets, $9.77 billion in total liabilities and a
$523 million total stockholders' deficit.
Level 3 Communications carries a 'Caa1' corporate family rating,
and 'Caa2' probability of default rating, with negative outlook
from Moody's, a 'B-' issuer default rating from Fitch, and 'B-'
long term issuer credit ratings from Standard & Poor's.
LOCATION BASED: Incurs $1.9 Million Net Loss in Nov. 30 Quarter
---------------------------------------------------------------
Location Based Technologies, Inc., filed with the U.S. Securities
and Exchange Commission its Quarterly Report on Form 10-Q
reporting a net loss of $1.97 million on $44,116 of total net
revenue for the three months Nov. 30, 2011, compared with a net
loss of $876,237 on $1,972 of total net revenue for the same
period a year ago.
Location Based reported a net loss of $8.22 million on $16,969 of
total net revenue for the year ended Aug. 31, 2011, compared with
a net loss of $9.06 million on $67,090 of total net revenue during
the prior year.
The Company's balance sheet at Nov. 30, 2011, showed $8.12 million
in total assets, $4.68 million in total liabilities, $652,596 in
commitments and contingencies and $2.78 million in total
stockholders' equity.
Comiskey & Company, in Denver Colorado, expressed substantial
doubt about the Company's ability to continue as a going concern
following the 2011 results. The independent auditors noted that
the Company has incurred recurring losses since inception and has
an accumulated deficit in excess of $37,000,000. There is no
established sales history for the Company's products, which are
new to the marketplace.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/GJnLEy
About Location Based Technologies
Headquartered in Irvine, Calif., Location Based Technologies, Inc.
(OTC BB: LBAS) -- http://www.locationbasedtech.com/-- designs,
develops, and sells personal, pet, and vehicle locator devices and
services.
MAJESTIC CAPITAL: Responds to US Trustee Objection to Plan Outline
------------------------------------------------------------------
BankruptcyData.com reports that Majestic Capital filed with the
U.S. Bankruptcy Court a response to Disclosure Statement
objections previously filed by the U.S. Trustee assigned to the
case and Alesco entities.
The response explains, "The Debtors have conferred with the United
States Trustee and have resolved the issues raised in the Trustee
Objection, as further set forth below. With respect to the Alesco
Objection, the Debtors intend to make certain revisions to the
Disclosure Statement, as described below, and have also agreed to
meet with Alesco over the next several days to hopefully address
its concerns."
About Majestic Capital
Headquartered in Poughkeepsie, New York City, Majestic Capital,
Ltd., formerly known as CRM Holdings Ltd., has two wholly owned
subsidiaries, Majestic USA and Twin Bridges, a Bermuda-based
reinsurance company. Twin Bridges and Majestic Insurance, a
downstream subsidiary of Majestic USA are the two principal
insurance companies.
The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Case
No. 11-36225) on April 29, 2011.
Affiliates also sought Chapter 11 protection (Bankr. S.D.N.Y. Case
Nos. 11-36221 - 11-36234) on April 29, 2011. The Debtors
retained Murphy & King, P.C. as their general bankruptcy counsel
and Genova & Malin as their local counsel. The Debtors tapped
Michelman & Robinson, LLP, as special counsel, and Day Seckler,
LLP, as accountants and financial advisors. The Debtor disclosed
$436,191,000 in assets and $421,757,000 in liabilities as of
Dec. 31, 2010.
Bruce F. Smith, Esq., and Steven C. Reingold, Esq., at Jager Smith
P.C., represent the Official Committee of Unsecured Creditors.
The Committee has also tapped J.H. Cohn LLP as its financial
advisors.
MARCO POLO: Sues Two Creditors, Blames Them for Bankruptcy
----------------------------------------------------------
Dow Jones' DBR Small Cap reports that Marco Polo Seatrade B.V. is
suing two Liberian shipping companies, claiming they unleashed a
scheme that ruined the company's prebankruptcy restructuring
efforts and pushed it into Chapter 11.
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.
The cases are before Judge James M. Peck. Evan D. Flaschen, Esq.,
Robert G. Burns, Esq., and Andrew J. Schoulder, Esq., at Bracewell
& Giuliani LLP, serve as the Debtors' bankruptcy counsel.
Kurtzman Carson Consultants LLC serves as notice and claims agent.
The petition noted that the Debtors' assets and debt are both
more than US$100 million and less than US$500 million.
Tracy Hope Davis, United States Trustee for Region 2, appointed
three members to serve on the Official Committee of Unsecured
Creditors. The Committee has retained Blank Rome LLP as its
attorney.
Secured lender Credit Agricole Corporate and Investment Bank is
represented by Alfred E. Yudes, Jr., Esq., and Jane Freeberg
Sarma, Esq., at Watson, Farley & Williams (New York) LLP.
MBIA INC: Strikes Accord With BNP Over 2009 Restructuring
---------------------------------------------------------
American Bankruptcy Institute reports that the New York Department
of Financial Services said that MBIA Inc. and BNP Paribas settled
litigation challenging the bond insurer's 2009 restructuring.
The Troubled Company Reporter, citing a prior ABI report, said on
June 24, 2011, that New York's highest court was asked by Bank of
America Corp., UBS AG and other institutions to reinstate their
lawsuit claiming that MBIA's 2009 restructuring was intended to
defraud policyholders.
MBIA was split into two companies in 2009, with National Public
Finance Guarantee, holding onto the company's healthy portfolio of
municipal bond insurance. The second company, MBIA Insurance,
retains the structured-finance policies that became toxic with the
housing implosion during the great recession.
Headquartered in Armonk, New York, MBIA Inc. (NYSE:MBI) --
http://www.mbia.com/-- provides financial guarantee insurance,
investment management services, and municipal and other services
to public finance and structured finance clients on a global
basis.
MCG CAPITAL: Fitch Withdraws 'B' Long-Term Issuer Default Rating
----------------------------------------------------------------
Fitch Ratings has downgraded and withdrawn the long-term Issuer
Default Rating (IDR) of MCG Capital Corporation (MCG) to 'B' from
'BB-' and removed the company from Rating Watch Negative. The
ratings are being withdrawn as Fitch no longer considers the
company as relevant to its existing rating coverage.
On Jan. 17, 2012, MCG announced it amended its credit facility
covenant and SunTrust accepted Richard W. Neu as an acceptable
Chief Executive Officer to replace Stephen F. Tunney Sr. The
facility's scheduled termination was accelerated to Jan. 17, 2012
and has entered into a 24 month amortization period. MCG also
announced a $35 million stock repurchase program.
Fitch believes the acceleration of the facility and possible cash
outlays to repurchase shares further weakens the company's
liquidity profile and reduces MCG's already limited funding
flexibility. At Jan. 17, 2012, approximately $51.1 million was
outstanding under the SunTrust facility.
MCG repaid in full its $8.72 million outstanding private placement
notes on Jan. 17, 2012. As such, Fitch has withdrawn MCG's
unsecured debt rating.
As a business development company, MCG primary lends to and or
invests in middle market companies. Investment capital is often
used to fund acquisitions, recapitalizations, buyouts or to
support organic growth and working capital. The company is
headquartered in Arlington, Virginia.
Fitch has taken the following rating actions:
MCG Capital Corporation
-- Long-term IDR downgraded to 'B' from 'BB-'; Rating Withdrawn;
-- Senior unsecured debt 'BB-'; Rating Withdrawn.
MEDICAL CONNECTIONS: Extends Employments of Named Execs. to 2015
----------------------------------------------------------------
Medical Connections Holdings, Inc., on Jan. 10, 2012, entered into
amended and restated employment agreements with Jeffrey S.
Rosenfeld, its Chief Executive Officer, Anthony J. Nicolosi, its
President, and Brian R. Neill, its Chief Financial Officer. The
amendments to the employment agreements:
(i) extended the term of the employment agreements for each of
these executives for a three year period scheduled to
expire on Jan. 11, 2015;
(ii) clarified the provisions contained in Section 10(a) of the
employment agreements pertaining to the exercisability of
options and stock awards after death or disability for a
one year period after a termination event; and
(iii) revised the provisions contained in Sections 10(c) and
11(a) of the employment agreements relating to the exercise
of options after termination of employment if the executive
is terminated for a reason other than death, disability,
"for cause" or in the event of a change of control, from a
90 day period to a period equal to the term remaining under
the option or stock award.
On Jan. 10, 2012, the independent members of the Company's Board
of Directors approved option grants to purchase 1 million shares
of the Company's common stock to each of Mr. Rosenfeld, Mr.
Nicolosi and Mr. Neill as bonus payments for the Company's
successful performance in (i) increasing gross profit margin in
travel by 66% compared to the prior year, (ii) restructuring
contracts with hospitals and the sales team, both resulting in a
43% increase in traveler headcount, and (iii) opening a healthcare
IT division. The exercise price of the options is $.32 per share
and the options are exercisable for a period of 10 years after the
grant date. The options are immediately vested and will be
registered on a registration statement on Form S-8.
On Jan. 10, 2012, the disinterested members of the Board approved
option grants to purchase 25,000 shares of the Company's common
stock to each of the Company's non-employee directors, Dr. Biehl,
Mr. Taylor and Mr. Wallace pursuant to the Company's 2010 Stock
Incentive Plan. The exercise price of the options is $.32 per
share, the options are immediately vested and the options are
exercisable for a period of 10 years after the grant date.
About Medical Connections
Boca Raton, Fla.-based Medical Connections Holdings, Inc., is a
healthcare staffing company which provides staffing services for
allied professionals and nurses to the Company's clients on a
national basis.
The Company also reported a net loss of $2.74 million on
$5.17 million of revenue for the nine months ended Sept. 30, 2011,
compared with a net loss of $5.72 million on $5.60 million of
revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed
$1.92 million in total assets, $408,470 in total liabilities, all
current, and $1.52 million in total stockholders' equity.
As reported in the TCR on April 6, 2011, De Meo, Young, McGrath,
in Boca Raton, Fla., expressed substantial doubt about Medical
Connections Holdings' ability to continue as a going concern,
following the Company's 2010 results. The independent auditors
noted that of the Company's dependence on outside financing, lack
of sufficient working capital, and recurring losses from
consolidated operations.
NATIVE WHOLESALE: Section 341(a) Meeting Moved to March 26
----------------------------------------------------------
Tracy Hope Davis, U.S. Trustee for Region 2, will convene a
meeting of creditors of Native Wholesale Supply Company on
March 26, 2011, at 2:00 p.m. at Buffalo UST - Olympic Towers.
The meeting was previously set for Dec. 21, 2011, at 1:30 p.m.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
About Native Wholesale
Native Wholesale Supply Company is in the business of importing
cigarettes and other tobacco products from Canada and selling them
within the United States. It purchases the products from Grand
River Enterprises Six Nations, Ltd., a Canadian corporation and
the Debtor's only secured creditor. Native is an entity organized
under the Sac and Fox Nation and has its principal place of
business at 10955 Logan Road in Perrysburg, New York.
Native filed for Chapter 11 bankruptcy (Bankr. W.D.N.Y. Case No.
11-14009) on Nov. 21, 2011. The Chapter 11 filing was triggered
to resolve an ongoing dispute with the United States government
regarding up to $43 million in assessments made by the government
against the Debtor pursuant to the Fair and Equitable Tobacco
Reform Act of 2004 and the Tobacco Transition Payment Program and
to restructure the terms of payment of any obligation determined
to be owing by the Debtor to the U.S. under the Disputed
Assessment. The issues pertaining to the Disputed Assessment
resulted in two lawsuits, subsequently consolidated, now pending
in the Federal District Court.
NET ELEMENT: Amends Stock Purchase Agreement with Motorsport
------------------------------------------------------------
In connection with Net Element, Inc.'s acquisition of Motorsport,
LLC, on Feb. 1, 2011, the Company assumed all of Motorsport's
obligations under that certain Stock Purchase Agreement dated as
of Dec. 17, 2010, between Motorsport, on the one hand, and Tom
Haapanen, Jack Durbin, Nancy Schilke and Eric Gilbert, on the
other hand. Pursuant to the SPA, Motorsport purchased from the
Sellers 80% of the outstanding common stock of Motorsport.com,
Inc., a Florida corporation engaged in the operation of a news and
information Web site relating to the international motorsport
industry. The SPA requires Motorsport to pay an aggregate of
$450,000 to the Sellers in four quarterly installments beginning
on Dec. 1, 2013. The Sellers have a security interest in the
Internet domain names of Motorsport.com, Inc., as collateral for
the Company's and Motorsport's obligations to pay the Second
Payment Amount. In addition, the SPA provides Motorsport an
option until Dec. 16, 2018, to purchase the remaining 20% of the
outstanding common stock of Motorsport.com, Inc., for a price per
share of between $0.1075 and $0.1435 depending upon when the
option is exercised, payable in either cash or shares of preferred
stock of Motorsport.com, Inc., having an equivalent value. If the
option were exercised before Dec. 17, 2015, then the purchase
price for the Remaining Interests would be $0.1075 per share, or
an aggregate of $400,330.
On Jan. 10, 2012, the Company, Motorsport and the Sellers entered
into an amendment to the SPA. Pursuant to the Amendment, the
Company's and Motorsport's obligations to pay the Second Payment
Amount were amended to provide that: (i) Motorsport must pay to
the Sellers $300,000 in cash in four equal annual installments of
$75,000 each beginning on Jan. 10, 2012, with each subsequent
installment payable on each annual anniversary thereafter until
such $300,000 is paid in full; and (ii) the Company must issue to
the Sellers an aggregate of 1,333,333 shares of its common stock
on Jan. 10, 2012. In addition, pursuant to the Amendment,
Motorsport exercised its option to acquire the Remaining Interests
for a purchase price consisting solely of the Company's issuance
to the Sellers of an aggregate of 3,333,333 shares of its common
stock.
About Net Element
Miami, Fla.-based Net Element, Inc. (formerly TOT Energy, Inc.)
currently operates several online media websites in the film, auto
racing and emerging music talent markets.
The Company reported a net loss of $3.1 million on $242 of sales
for the nine-month period ended Dec. 31, 2010. The Company had a
net loss of $6.6 million on $0 revenue for the twelve months ended
March 31, 2010.
The Company also reported a net loss of $23.53 million on $143,988
of net revenues for the nine months ended Sept. 30, 2011, compared
with a net loss of $2.62 million on $0 of net revenues for the
same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed
$1.95 million in total assets, $5.69 million in total liabilities,
and a $3.73 million total stockholders' deficit.
Daszkal Bolton LLP, in Fort Lauderdale, Fla., expressed
substantial doubt about Net Element's ability to continue as a
going concern. The independent auditors noted that the Company
has experienced recurring losses and has an accumulated deficit
and stockholders' deficiency at Dec. 31, 2010.
NORTEL NETWORKS: Court Approve Wind-Down of Japan Unit
------------------------------------------------------
BankruptcyData.com reports that the U.S. Bankruptcy Court approved
Nortel Networks' motion to enter into certain agreements to
facilitate the wind-down of Nortel Networks Japan (aka Nortel
Networks Kabushiki Kaisha).
According to the Debtors, "Historically, NN Japan engaged in the
sale and marketing of Nortel telecommunications equipment in
Japan; however, it has ceased all active operations and is in the
process of preparing a voluntary solvent liquidation of its
assets. After accounting for all of its liabilities, obligations,
and liquidation costs, NN Japan anticipates that it will have a
significant surplus cash balance, which it is willing to
repatriate to NNI."
About Nortel Networks
Nortel Networks (OTC BB: NRTLQ) -- http://www.nortel.com/-- was
once North America's largest communications equipment provider.
It has sold most of the businesses while in bankruptcy.
Nortel Networks Corp., Nortel Networks Inc., and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List). Ernst & Young was appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group.
The Monitor sought recognition of the CCAA Proceedings in the
U.S. by filing a bankruptcy petition under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary
Caloway,Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll &
Rooney PC, in Wilmington, Delaware, serves as the Chapter 15
petitioner's counsel.
Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions (Bankr. D. Del. Case No. 09-10138) on Jan. 14, 2009.
Judge Kevin Gross presides over the case. James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent. Fred S. Hodara, Esq.,
at Akin Gump Strauss Hauer & Feld LLP, in New York, and
Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, represent the Official Committee of
Unsecured Creditors.
Certain of Nortel's European subsidiaries also made consequential
filings for creditor protection. On May 28, 2009, at the request
of the Administrators, the Commercial Court of Versailles, France
ordered the commencement of secondary proceedings in respect of
Nortel Networks S.A. On June 8, 2009, Nortel Networks UK Limited
filed petitions in this Court for recognition of the English
Proceedings as foreign main proceedings under chapter 15 of the
Bankruptcy Code.
Nortel Networks divested off key assets while in Chapter 11.
Nortel has raised $3.2 billion by selling its operations as it
prepares to wind up a two-year liquidation due to insolvency. In
June 2011, Nortel added US$4.5 billion to its cash pile after
agreeing to sell its remaining patent portfolio to Rockstar Bidco,
a consortium consisting of Apple Inc., EMC Corporation,
Telefonaktiebolaget LM Ericsson, Microsoft Corp., Research In
Motion Limited, and Sony Corporation. The consortium defeated a
$900 million stalking horse bid by Google Inc. at an auction. The
deal closed in July 2011.
Nortel Networks has filed a proposed plan of liquidation in the
U.S. Bankruptcy Court. The Plan generally provides for full
payment on secured claims with other distributions going in
accordance with the priorities in bankruptcy law.
NORTHGATE PLACE: Case Summary & 11 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Northgate Place Apartments, Ltd.
4300 Atoll Court
Naples, FL 34116
Bankruptcy Case No.: 12-00406
Chapter 11 Petition Date: January 12, 2012
Court: United States Bankruptcy Court
Middle District of Florida (Ft. Myers)
Judge: Jeffery P. Hopkins
Debtor's Counsel: Richard B. Webber, II, Esq.
ZIMMERMAN KISER & SUTCLIFFE PA
315 East Robinson Street, Ste 600
Orlando, FL 32801
Tel: (407) 425-7010
Fax: (407) 425-2747
E-mail: rwebber@zkslawfirm.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the list of 11 largest unsecured creditors is
available for free at http://bankrupt.com/misc/flmb12-00406.pdf
The petition was signed by Allan Taube, president of Northgate
General Partners, Inc.
NOVADEL PHARMA: Won't Have Enough Cash After January
----------------------------------------------------
NovaDel Pharma Inc. is continuing to explore various strategic
alternatives for the Company, including selling the Company or
some or all of its pharmaceutical products or license rights, or
raising capital for the Company through a financing transaction.
The Company has estimated the timing and amounts of cash receipts
and disbursements over the next month and believes it will not
have adequate cash to meet its working capital needs after the end
of January 2012. If the Company is unsuccessful in promptly
implementing a transaction to sell the Company or some or all of
its assets or in obtaining additional financing, the Company
intends to file for bankruptcy protection.
On January 12, 2012, the following directors of the Company
resigned: Mark Baric, Thomas Bonney and Charles Nemeroff. Mr.
Steven B. Ratoff continues to remain as Chairman and Chief
Executive Officer and is continuing the pursuit of strategic
alternatives.
About Novadel Pharma
NovaDel Pharma Inc. -- http://www.novadel.com/-- is a specialty
pharmaceutical company that develops oral spray formulations of
marketed pharmaceutical products. The Company's patented oral
spray drug delivery technology seeks to improve the efficacy,
safety, patient compliance, and patient convenience for a broad
range of prescription pharmaceuticals.
O'BANNON PLAZA: Case Summary & 15 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: O'Bannon Plaza LLC
4847 Bonvue Avenue
Los Angeles, CA 90027-1104
Bankruptcy Case No.: 12-10368
Chapter 11 Petition Date: January 13, 2012
Court: U.S. Bankruptcy Court
District of Nevada (Las Vegas)
Judge: Linda B. Riegle
Debtor's Counsel: David J. Winterton, Esq.
DAVID J. WINTERTON & ASSOC., LTD.
211 N. Buffalo Drive #A
Las Vegas, NV 89145
Tel: (702) 363-0317
E-mail: david@davidwinterton.com
Scheduled Assets: $4,542,078
Scheduled Liabilities: $3,266,482
The Company?s list of its 15 largest unsecured creditors filed
with the petition is available for free at:
http://bankrupt.com/misc/nvb12-10368.pdf
The petition was signed by Morris Zagha, managing member.
OVERSEAS SHIPHOLDING: S&P Lowers Corporate Credit Rating to 'B-'
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Overseas
Shipholding Group Inc. (OSG), including the long-term corporate
credit rating, to 'B-' from 'B'.
"At the same time, Standard & Poor's removed all ratings from
CreditWatch, where they had been placed with negative implications
on Nov. 9, 2011. The outlook is negative," S&P said.
"The downgrade reflects a steep deterioration in Overseas
Shipholding Group's financial profile and our expectation that
credit measures will remain weak, over at least the next two
years," said Standard & Poor's credit analyst Funmi Afonja.
"Our action also highlights our concern that earnings pressures
and a smaller revolver commitment could constrain OSG's
liquidity," she continued. "A new $900 million forward-start
facility will replace the existing $1.65 billion revolver
beginning in February 2013. As of Sept. 30, 2011, OSG's
outstanding revolver balance was $929 million."
"OSG is one of the world's leading liquid bulk shipping companies.
It primarily provides ocean transport of crude oil and petroleum
products internationally and for the domestic U.S. flag trade. As
of Oct. 28, 2011, the company operated a fleet of 111 vessels (65
owned, 46 chartered-in), totaling about 10.9 million deadweight
tons. The company will take delivery of four vessels through 2013,
bringing its total fleet at that time to 115 vessels," S&P said.
"OSG's financial profile has weakened because of prolonged weak
tanker rates, rising operating losses, and its significant debt
burden. The deterioration has continued despite the company's
ongoing cost-cutting programs, reduced dividends, a gradual
reduction in lease/charter-in expenses, and negotiated reductions
in the company's ship delivery commitments," S&P said.
Although OSG continues to benefit from the more stable and
profitable U.S. domestic and international liquefied natural gas
(LNG) shipping businesses, Standard & Poor's expects the company's
overall operating prospects to remain vulnerable to volatile spot
market rates in the international crude oil and product shipping
segments.
PACIFIC MONARCH: No Competing Bids for Monarch Grand
----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the auction for resort timeshare operator Pacific
Monarch Resorts Inc. attracted no competing bids, so the auction
was canceled. Before the Chapter 11 in October in Santa Ana,
California, it negotiated a contract for Diamond Resorts Corp. to
purchase the business for $49.25 million. There was a companion
auction to sell debt held by Resort Finance America LLC, which
made the first and only bid using $130 million of its debt.
About Pacific Monarch
Pacific Monarch Resorts, Inc., and certain affiliated debtors
filed voluntary Chapter 11 petitions (Bankr. C.D. Calif. Lead Case
No. 11-24720) on Oct. 24, 2011, disclosing $100 million to $500
million in both assets and debts. The affiliated debtors are
Vacation Interval Realty Inc., Vacation Marketing Group Inc., MGV
Cabo LLC, Desarrollo Cabo Azul, S. de R.L. de C.V., and Operadora
MGVM S. de R.L. de C.V.
Based in Laguna Hills, California, Pacific Monarch and its
affiliates generate revenue primarily from the sale and financing
of "vacation ownership points" in a timeshare program commonly
known and marketed as "Monarch Grand Vacations," a multi-location
vacation timeshare program that establishes a uniform plan for the
development, ownership, use and enjoyment of specified resort
accommodations for the benefit of its members. MGV is a nonprofit
mutual benefit corporation whose members are timeshare owners, and
it is administered by a board of directors elected by MGV members.
As of the Petition Date, MGV owned Resort Accommodations within
these resorts: Palm Canyon Resort (Palm Springs), Riviera Oaks
Resort & Racquet Club (Ramona), Riviera Beach & Spa Resort -
Phases I and II (Dana Point), Riviera Shores Beach (Dana Point),
Cedar Breaks Lodge (Brian Head), Tahoe Seasons Resort (South Lake
Tahoe), Desert Isle of Palm Springs (Palm Springs), the Cancun
Resort (Las Vegas), and the Cabo Azul Resort (Los Cabos, Mexico).
Future Vacation Accommodations are currently in the pre-
development stage in Kona, Hawaii and Las Vegas, Nevada.
Additionally, the Cabo Azul Resort has construction in progress on
two buildings.
The Pacific Monarch entities do not include the entities that
actually own the timeshare properties that have been dedicated to
use by the purchasers of timeshare points. The trusts that own
the properties are not liable for the Pacific Monarch entities'
obligations.
MGV is not a debtor.
Judge Erithe A. Smith presides over the jointly administered
cases. Lawyers at Stutman, Treister & Glatt PC serve as counsel
to the Debtors. The petition was signed by Mark D. Post, chief
executive officer and director.
Creditor Ikon Financial Services is represented by Christine R.
Etheridge. Creditor California Bank & Trust is represented in the
case by Michael G. Fletcher at Frandzel Robins Bloom & Csato, L.C.
Marshall F. Goldberg, Esq. at Glass & Goldberg argues for creditor
Fifth Third Bank. Creditor The Macerich Company is represented by
Brian D. Huben, Esq. at Katten Muchin Rosenman LLP. Interested
Party DPM Acquisition is represented by Joshua D. Wayser, Esq. at
Katten Muchin Rosenman LLP.
PONCE DE LEON: Gets More Time to File Chapter 11 Plan
-----------------------------------------------------
Ponce De Leon 1403, Inc., sought and obtained approval from
Judge Enrique S. Lamoutte Inclan of the U.S. Bankruptcy Court for
the District of Puerto Rico to extend the exclusive period within
which it may submit its disclosure statement to March 15, 2012,
and the period within which it may secure votes to confirm a plan
of reorganization to 60 days.
The Debtor is currently in the process of transferring
administrative responsibility regarding the common areas for the
Metro Plaza Towers to the Home Ownership Association for Metro
Plaza.
Due to the holiday schedule, the critical need to conduct
negotiations over the use of cash collateral that have occurred
throughout the proceeding, the need to finalize the transfer to
the Metro Plaza HOA, and the desire to have all claims submitted
prior to concluding a Plan of Reorganization, the Debtor sought an
extension of its exclusive periods.
About Ponce De Leon
San Juan, P.R.-based Ponce De Leon 1403, Inc., developed,
constructed, and operates the Metro Plaza Tower condominium and
commercial property project in Santurce, Puerto Rico. The Metro
Plaza Tower project consists of two 15-story towers atop a base
structure that serves as a parking garage, common area, and retail
space. Each tower houses 87 residential units. The base
structure provides approximately 567 parking spaces and has
approximately 14,000 square feet of commercial space available for
lease. The common areas of the project include a swimming pool, a
gym, gardens and a gazebo.
Ponce De Leon 1403 Inc. filed for Chapter 11 protection (Bank. D.
P.R. Case No. 11-07920) on Sept. 19, 2011. The Debtor estimated
both assets and debts of between US$10 million and US$50 million.
Carmen Conde Torres, Esq., at C. Conde & Assoc., in Old San Juan,
Puerto Rico, represents the Debtor as counsel.
U.S. Bankruptcy Court for the District of Puerto Rico has
granted Ponce De Leon 1403 Inc. permission to employ Doris Barroso
Vicens as accountant, with compensation to be paid in such amounts
as may be allowed by the Court.
PRESTIGE BRANDS: Moody's Confirms 'B1' CFR; Outlook Negative
------------------------------------------------------------
Moody's Investors Service confirmed Prestige Brands, Inc.'s
("Prestige") Corporate Family Rating of B1 and revised the outlook
to negative. At the same time, Moody's assigned a Ba3 rating to
the company's proposed $620 million senior secured term loan due
2019 and a B3 rating to its proposed $290 million senior unsecured
notes offering due 2020. Proceeds from the proposed refinancing
will be used to complete the company's planned acquisition of the
North American rights to 17 consumer and over-the-counter (OTC)
brands from GlaxoSmithKline ("GSK") for $660 million in cash.
Final ratings will depend on Moody's successful review of final
documentation and existing ratings will be withdrawn upon
completion of the proposed financing. This concludes a review for
possible downgrade initiated on December 20, 2011.
"The GSK acquisition gives Prestige meaningful additional
portfolio scale in the OTC category and complements its highly
profitable outsourced manufacturing business model with limited
integration risk," says Moody's Senior Vice President Janice
Hofferber. "While we expect some modest deleveraging over the next
12 to 18 months, the company's ability to restore organic growth
to these brands through investments in marketing and promotional
expenditures while maintaining already high profit margins will be
company's biggest integration challenge and will largely determine
the extent of credit metric improvement," adds Ms. Hofferber.
These ratings were confirmed/affirmed:
- Corporate Family Rating of B1
- Probability of Default Rating of B1
- Speculative Grade Liquidity Rating of SGL-2
These ratings were confirmed and will be withdrawn upon completion
of the transaction:
- $40 million senior secured revolving credit facility due 2015 of
Ba2 (LGD 2, 25%)
- $265 million senior secured term loan B due 2016 of Ba2 (LGD 2,
25%)
These ratings were assigned:
- $620 million senior secured term loan due 2019 of Ba3 (LGD 3,
37%)
- $290 million senior unsecured notes due 2020 of B3 (LGD 5, 89%)
These ratings were upgraded:
- $250 million senior secured notes due 2018 of Ba3 (LGD 3, 37%)
from B3 (LGD 5, 80%)
The outlook is negative
RATINGS RATIONALE
Prestige's B1 Corporate Family Rating is supported by a diverse
and balanced portfolio of leading niche brands; high margins;
strong cash flow, flexible, outsourced business model; and low-
capital spending requirements. The rating is constrained by the
company's relatively high leverage (pro forma debt-to-EBITDA of
5.6 times) especially given its participation in highly
competitive segments in near-pharmacy like categories, primarily
with companies that have significantly more resources and
financial flexibility. Prestige's sizable OTC business, while
attractive in terms of profitability and growth potential, makes
it relatively more exposed to product recalls and possible legal
liability than its consumer products peers, while the company's
substantially smaller household segment remains mature and is
constrained by its declining organic growth. In addition, the
company's financial policies are likely to remain aggressive as it
continues to supplement its growth through leveraged acquisitions.
The outlook for Prestige is negative, largely due to its elevated
leverage profile, as well as potential challenges associated with
the relatively large acquisition of GSK's North American OTC brand
portfolio. Most notably, Prestige must improve flat-to-declining
organic growth rates in a number of the acquired brands, while
balancing the amount of advertising and promotional expenses
incurred in doing so to protect its solid profitability profile.
Prestige's ratings could be downgraded if the company's financial
performance deteriorates as result of unexpected weakness in the
company's existing product portfolio and/or management
significantly deviates from its current disciplined financial
policies. Additionally, debt-to-EBITDA sustained above 5.0 times
or EBIT-to-interest below 2.0 times could result in a downgrade.
For an upgrade, Prestige's scale would need to significantly
improve beyond its current level and be sustained by a strong
organic growth rate. Financial metrics would need to be maintained
for an extended period of time such that debt-to-EBITDA was
sustained below 4.0 times and EBIT-to-interest was sustained above
2.5 times.
The principal methodology used in rating Prestige Brands, Inc was
the Global Packaged Goods Industry Methodology published in July
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.
Prestige Brands, Inc., headquartered in Irvington, New York, is a
marketer of a broad portfolio of branded over-the-counter ("OTC")
healthcare products and household cleaning products. Key brands
include Chloraseptic, Clear Eyes, Compound W, The Doctor's
NightGuard, Little Remedies, PediaCare, Dramamine, Luden's,
Efferdent,Wartner, New Skin, Comet, Chore Boy, and Spic and Span.
The GSK brands include BC Goody's, beano, FiberChoice, Ecotrin,
Gaviscon, and Debrox. Total revenues for standalone Prestige
during the twelve month period ending September 30, 2011 were
approximately $390 million. Pro forma for the acquired brands of
GSK, revenues during the twelve month period ended September 30,
2011 were approximately $600 million.
PRESTIGE BRANDS: S&P Affirms 'B+' Corporate Credit Rating
---------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on Irvington, N.Y.-based Prestige Brands Inc. "At
the same time, we removed the ratings from CreditWatch with
negative implications, where they were placed on Dec. 20, 2011,
based on our expectation for weaker credit measures resulting from
the planned debt-financed acquisition of 17 North American OTC
brands from GSK for a total purchase price of $660 million (which
includes an estimated $125 million of tax benefits, based on its
current present value). Pro forma for the acquisition, total debt
outstanding is approximately $1.16 billion. The outlook is
negative," S&P said.
"At the same time, we assigned a 'BB-' issue rating (one notch
higher than the corporate credit rating) to Prestige Brands'
proposed $620 million senior secured term loan facility due 2019.
The recovery rating on the new credit facility is '2', indicating
our expectation for substantial (70% to 90%) recovery in the event
of a payment default. The proposed $50 million senior secured
asset-based revolving credit facility due 2017 is not rated," S&P
said.
"Also, we raised the issue rating on the company's $250 million
senior secured notes due 2018 to 'BB-' (one notch higher than the
corporate credit rating) from 'B', reflecting improved recovery
prospects for lenders resulting from the addition of collateral in
conjunction with the roll-over of this debt. These notes will be
pari passu to the company's new secured term loan facility. We
revised the recovery rating on these notes to '2', indicating our
expectation for substantial (70% to 90%) recovery in the event of
a payment default, from '5'," S&P said.
"In addition, we assigned a 'B-' issue rating to the company's
$290 million of new senior unsecured notes, with a recovery rating
of '6', indicating our expectation for negligible recovery (0%-
10%) in the event of a payment default. We will withdraw the
ratings on the company's existing senior secured debt (to be
repaid as part of this financing) upon closing of the
transaction," S&P said.
"We believe the company will successfully integrate the acquired
brands and apply free cash flow to debt reduction to improve
credit protection measures over the next two to three years," said
Standard & Poor's credit analyst Mark Salierno. "This includes our
forecast for leverage to decline below 5x by the end of fiscal
2013, from 5.3x pro forma at the close of the transaction, and
below 4.5x by the end of fiscal 2014. We could still lower the
rating if integration does not proceed as planned or if credit
measures do not strengthen over the next year, which could occur
if sales are weaker than expected despite increased brand
spending, which we believe could result in reduced cash flow
generation and leverage remaining above the 5x level."
PT ARPENI PRATAMA: Has U.S. Chapter 15 Approval
-----------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that PT Arpeni Pratama Ocean Line Tbk. won the signature
of a bankruptcy judge in New York on an order last week
recognizing a court in Indonesia as having the company's principal
insolvency proceeding.
About PT Arpeni Pratama
PT Arpeni Pratama Ocean Line Tbk -- http://www.apol.co.id/-- is
Indonesia's leading diversified shipping company, owning and
operating the largest fleet of Indonesian flagged dry bulk
vessels. Arpeni operates a fleet of general-purpose specialist,
such as their tweendecker MV Alas, which is designed to transport
dry cargoes such as plywood and agricultural products. As of
June 30, 2011, Arpeni operated 77 wholly-owned vessels and two
vessels under long term charters.
Arpeni filed for bankruptcy protection on Dec. 12, 2011, in the
U.S. to block a group of dissident note holders from torpedoing
its debt restructuring in Indonesia. Fida Unidjaja, as PT
Arpeni's foreign representative, estimated $500 million to
$1 billion in assets and liabilities in the Chapter 15 petition
(Bankr. S.D.N.Y. Case No. 11-15691) for the company. Judge Allan
L. Gropper oversees the Chapter 15 case. Fida Unidjaja is
represented by Pedro A. Jimenez, Esq., and Ross Barr, Esq., at
Jones Day.
Arpeni sought U.S. court recognition of its proceeding before
the Commercial Court at the Central Jakarta District Court
as a foreign main proceeding. PT Bank Central Asia Tbk., an
unsecured lender, commenced the Jakarta proceeding on Aug. 5,
2011, which Arpeni voluntarily joined. On Aug. 24, 2011, the
Jakarta Court issued a temporary suspension of debt payment
decision, effectively staying actions on claims against the
Foreign Debtor for an initial period of 45 days.
Throughout the proceeding, Arpeni remained in possession of and
continued its business while it restructured its debt.
On Dec. 9, 2009, Arpeni announced an informal payment moratorium
with certain of its creditors pursuant to which Arpeni ceased
making payments of interest or principal.
The trustee under the indenture with respect to the U.S. Notes on
Sept. 6, 2011, had accelerated the U.S. Notes and demanded
performance by the Debtor of its obligations as guarantor under
the U.S. Notes Indenture.
In the Jakarta proceeding, the Debtor sought and obtained
approval of a composition plan from the requisite percentage of
its creditors participating in the plan pursuant to Indonesian
bankruptcy law. In particular, the Composition Plan was approved
by approximately 95% of the Debtor's secured creditors and 80% of
the Debtor's unsecured creditors, in each case present and voting
at a hearing before the Indonesian Court on Nov. 1, 2011 and
holding claims that had been verified for inclusion in the
Foreign Proceeding. As provided in the Composition Plan as
embodied in the Settlement Agreement, on Nov. 18, 2011, Arpeni
launched an exchange offer and tender offer.
QIMONDA AG: Files Suit Against LSI Over Circuit Patents
-------------------------------------------------------
Megan Leonhardt at Bankruptcy Law360 reports that the insolvency
administrator for Qimonda AG hit LSI Corp. with a suit in
Virginia, contending the semiconductors and software manufacturer
infringed five patents covering integrated circuit technology.
On behalf of Qimonda, Michael Jaffe claims LSI infringed five
patents owned by the bankrupt German company by producing and
selling processors, modems, transceivers and other products that
accelerate storage and networking in data centers and mobile
networks, according to Law360.
About Qimonda AG
Qimonda AG (NYSE: QI) -- http://www.qimonda.com/-- was a global
memory supplier with a diversified DRAM product portfolio. The
Company generated net sales of EUR1.79 billion in financial year
2008 and had -- prior to its announcement of a repositioning of
its business -- roughly 12,200 employees worldwide, of which 1,400
were in Munich, 3,200 in Dresden and 2,800 in Richmond, Va.
Qimonda AG commenced insolvency proceedings in a local court in
Munich, Germany, on Jan. 23, 2009. On June 15, 2009, QAG filed
a petition (Bankr. E.D. Va. Case No. 09-14766) for relief under
Chapter 15 of the U.S. Bankruptcy Code.
Qimonda North America Corp., an indirect and wholly owned
subsidiary of QAG, is the North American sales and marketing
subsidiary of QAG. QNA is also the parent company of Qimonda
Richmond LLC. QNA and QR sought Chapter 11 protection (Bankr.
D. Del. Case No. 09-10589) on Feb. 20, 2009. Mark D. Collins,
Esq., Michael J. Merchant, Esq., and Lee E. Kaufman, Esq., at
Richards Layton & Finger PA, in Wilmington Delaware; and Mark
Thompson, Esq., Morris J. Massel, Esq., and Terry Sanders, Esq.,
at Simpson Thacher & Bartlett LLP, in New York City, represented
the Debtors as counsel. Roberta A. DeAngelis, the United States
Trustee for Region 3, appointed seven creditors to serve on an
official committee of unsecured creditors. Jones Day and Ashby &
Geddes represented the Committee. In its bankruptcy petition,
Qimonda Richmond, LLC, estimated more than US$1 billion in assets
and debts. The information, the Chapter 11 Debtors said, was
based on QR's financial records which are maintained on a
consolidated basis with QNA.
In September 2011, the Chapter 11 Debtors won confirmation of
their Chapter 11 liquidation plan which projects that unsecured
creditors with claims between $33 million and $35 million would
have a recovery between 6.1% and 11.1%. No secured claims of
significance remained.
RAKHRA MUSHROOM: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Rakhra Mushroom Farm Corporation
P.O. Box 2002
Alamosa, CO 81101
Bankruptcy Case No.: 12-10560
Chapter 11 Petition Date: January 12, 2012
Court: United States Bankruptcy Court
District of Colorado (Denver)
Judge: Howard R. Tallman
Debtor's Counsel: Harvey Sender, Esq.
Matthew T. Faga, Esq.
Regina Ries, Esq.
SENDER & WASSERMAN, P.C.
1660 Lincoln St., Ste. 2200
Denver, CO 80264
Tel: (303) 296-1999
Fax: (303) 296-7600
E-mail: Sendertrustee@sendwass.com
faga@sendwass.com
GRies@sendwass.com
Scheduled Assets: $7,803,880
Scheduled Liabilities: $8,201,297
A list of the Company's 20 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/cob12-10560.pdf
The petition was signed by Karmjit Singh Salh, president.
RANGE RESOURCES: Moody's Issues Summary Credit Opinion
------------------------------------------------------
This release represents Moody's Investors Service's summary credit
opinion on Range Resources Corporation (Range) and includes
certain regulatory disclosures regarding its ratings. This release
does not constitute any change in Moody's ratings or rating
rationale for Range.
Moody's current ratings for Range Resources Corporation are:
LT Corporate Family (domestic currency) Rating of Ba2
Probability of Default Rating of Ba2
Senior Subordinate (domestic currency) Rating of Ba3
Senior Unsec. Shelf (domestic currency) Rating of (P)Ba3
Senior Subordinate Shelf (domestic currency) Rating of (P)Ba3
LGD Senior Subordinate (domestic currency) Assessment of 69 - LGD4
RATINGS RATIONALE
Range's Ba2 CFR reflects the scale of the company's reserves as
well as the positive trend in reserve and production growth. The
nature of the company's reserves allows for a very low finding and
development costs which over time should lead to improving credit
metrics. However, the company is currently engaged in an
aggressive capital spending program with a primary focus on
developing the "liquids-rich" areas of the Marcellus Shale. This
has resulted in an outspending of cash flow that was funded
primarily with the sale of its Barnett Shale properties in 2011.
Looking forward, depressed natural gas prices in combination with
the aggressive spending program are expected to lead to higher
debt levels for the next few years. The out-spending of cash flow
along with an increasing reserve concentration in the Marcellus
Shale, limits the near term upside to the company's credit rating.
The stable outlook is based on an expectation that while debt may
increase over the next twelve months, reserve additions and
production increases will support the higher debt levels. To
consider an upgrade, Range would need to improve the ratio of
retained cash flow to debt to 40% and reduce the ratio of debt to
average daily production to less than $20,000 per boe. Both of
these ratios are being negatively impacted by Range's significant
out-spending of internally generated cash flow. A downgrade would
be appropriate if the company's capital productivity stalls which
would be signaled by an increase in leverage. If the ratio of debt
to average daily production approaches $30,000 per boe, a negative
outlook becomes increasingly likely.
The principal methodology used in rating Range Resources was the
Independent Exploration and Production (E&P) Industry Methodology
published in December 2008. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
R.E. LOANS: WF Agrees to Extend Deadline to Object to Tort Claims
-----------------------------------------------------------------
R.E. Loans, LLC, the Official Committee of Note Holders, and Wells
Fargo Capital Finance, LLC, have filed supplemental stipulation
relating to the Final Financing Order entered by the U.S.
Bankruptcy Court for the Northern District of Texas on Nov. 23,
2011.
On Nov. 23, 2011, the Bankruptcy Court entered the "Joint
Stipulation and Agreed Final Order: (I) Authorizing Debtors to (A)
Obtain Post-Petition Financing of up to $20.0 million on a Super-
Priority, Secured and Priming Basis in Favor of Wells Fargo
Capital Finance, LLC; (B) Use Cash Collateral on a Final Basis;
(C) Provide Adequate Protection to Wells Fargo Capital Finance,
LLC and the Noteholders; and (D) Enter into Post-Petition
Agreements with Wells Fargo Capital Finance, LLC; and (II)
Modifying the Automatic Stay" [Docket No. 273] (the "Final
Financing Order").
Paragraph 9(x) of the Final Financing Order provides that Dec. 31,
2011, is the deadline for the Debtors and Committee (if granted
standing to assert such claims) to file any objection, complaint
or other challenge based on the provisions set forth in Paragraph
9(x) and sub-paragraphs (8)(a), 8(b), 8(c)(i) and 8(d)(i) of the
Final Financing Order, and under Paragraph 9(y), Feb. 29, 2012, is
the deadline for the Debtors and Committee (if granted standing to
assert such claims) to file any objection, complaint or other
challenge based on the provisions set forth in Paragraph 9(y) and
sub-paragraphs (8)(c)(ii), 8(d)(ii), 8(e) and 8(f) of the Final
Financing Order.
As of the date of this Stipulation, or Dec. 31, 2011, the Debtors
and the Committee are continuing to investigate the perfection of
Wells Fargo's security interests in and liens upon the Debtors'
commercial tort claims that may compose part of the Pre-Petition
Collateral.
The supplemental stipulation provides:
1. Without affecting any right of Wells Fargo to oppose any such
objection or other challenge, including the rights preserved under
Paragraph 3, below, the deadline for the Debtors and Committee to
object to or otherwise challenge the perfection of Wells Fargo's
prepetition security interests in and liens on the Debtors'
commercial tort claims is extended from Dec. 31, 2011, to Feb. 29,
2012.
2. Without affecting any rights described in paragraph 6, infra,
which include any potential objections and claims covered by
Paragraph 9(y) of the Final Financing Order to be made on or
before Feb. 29, 2012, the Debtors and Committee agree that no
objection or defense that could only have been raised on or before
Dec. 31, 2011, pursuant to Paragraph 9(x) of the Final Financing
Order has been or will be asserted prior to the expiration of that
objection period and such objections and claims are, therefore,
barred, except to the limited extent that the period is extended
under Paragraph 1 of this Stipulation solely with respect to the
perfection of Wells Fargo?s security interest in commercial tort
claims.
3. Wells Fargo reserves all rights to respond to any objections
asserted by the Debtors and Committee, including the assertion
that Wells Fargo has valid and perfected security interests in and
liens upon Debtor?s commercial tort claims, directly, or as
proceeds of Pre-Petition Collateral covered by Wells Fargo's pre-
petition perfected security interests and liens.
4. Nothing herein will affect any Post-Petition Liens or any
administrative expense priority claims granted to Wells Fargo
under the Final Financing Order to secure payment of the
DIP Credit Facility.
5. Nothing herein will constitute a grant of standing to the
Committee to bring causes of action owned by the Debtors' estates
against Wells Fargo, without a subsequent order of the Court
granting such standing after notice and a hearing.
6. Nothing in this Stipulation or order approving this Stipulation
modifies the rights of the bankruptcy estates or the Committee (if
granted standing to assert such claims) to file an objection,
complaint or other challenge to (a) invalidate, set aside, or
subordinate or recharacterize the Pre-Petition Lender Debt (as
such term is defined in the Final Financing Order), (b) object to
the extent, validity, priority, or perfection of the Lender's (as
such term is defined in the Final Financing Order) pre-petition
security interests and liens or any other causes of action
regarding the Prepetition Lender Debt (as such term is defined in
the Final Financing Order) or (c) challenge any other
acknowledgement or agreement set forth in paragraphs 8(c)(ii),
(d)(ii), (e), and (f) in the Final Financing Order for a period of
time commencing on the Petition Date and continuing through and
including Feb. 29, 2012, including any claim or cause of action
arising from any facts or transactions that occurred prior to the
Petition Date.
Counsel for Wells Fargo may be reached at:
David Weitman, Esq.
Artoush Varshosaz, Esq.
K&L GATES LLP
1717 Main Street, Suite 2800
Dallas, TX 75201
Tel: (214) 939-5500
Fax: (214) 939-6100
E-mail: david.weitman@klgates.com
About R.E. Loans
R.E. Loans LLC was, for many years, in the business of providing
financing to home builders and developers of real property. R.E.
Future LLC and Capital Salvage own the real property obtained
following foreclosure proceedings initiated by R.E. Loans against
its borrowers. R.E. Loans is the sole shareholder of Capital
Salvage and the sole member of R.E. Future. B-4 Partners LLC is
the sole member of R.E. Loans. As a result of the multiple
defaults by R.E. Loans' borrowers, R.E. Loans has transitioned
from being a lender to becoming a property management company.
Lafayette, California-based R.E. Loans, R.E. Future and Capital
Salvage filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case
Nos. 11-35865, 11-35868 and 11-35869) on Sept. 13, 2011. Judge
Barbara J. Houser presides over the case. Stutman, Treister &
Glatt Professional Corporation, in Los Angeles, and Gardere, Wynne
Sewell LLP, in Dallas, represent the Debtors as counsel. James A.
Weissenborn at Mackinac serves as R.E. Loans' chief restructuring
officer. The Debtors tapped Hines Smith Carder as their
litigation and outside general counsel. The Debtors tapped
Alixpartners, LLP as noticing agent, and Latham & Watkins LLP as
special counsel in real estate matters. R.E. Loans disclosed
$713,622,015 in assets and $886,002,786 in liabilities as of the
Chapter 11 filing.
William T. Neary, the U.S. Trustee for Region 6, appointed 12
members to the Official Committee of Noteholders of R.E. Loans
LLC. Akin Gump Strauss Hauer & Feld LLP, in Dallas, represents
the Committee as counsel.
REFCO INC: Customers Lose Appeal on Dismissal of D&O Lawsuit
------------------------------------------------------------
American Bankruptcy Institute reports that former Refco Inc.
customers lost a bid in appeals court to reverse a lower-court
ruling that dismissed their claims against the bankrupt brokerage.
About Refco Inc.
Headquartered in New York, Refco Inc. -- http://www.refco.com/--
was a diversified financial services organization with operations
in 14 countries and an extensive global institutional and retail
client base. Refco's worldwide subsidiaries were members of
principal U.S. and international exchanges, and were among the
most active members of futures exchanges in Chicago, New York,
London and Singapore. Refco was also a major broker of cash
market products, including foreign exchange, foreign exchange
options, government securities, domestic and international
equities, emerging market debt, and OTC financial and commodity
products. Refco was one of the largest global clearing firms for
derivatives. The Company had operations in Bermuda.
The Company and 23 of its affiliates filed for Chapter 11
protection on October 17, 2005 (Bankr. S.D.N.Y. Case No.
05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP, represented the Debtors in their restructuring
efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the
Official Committee of Unsecured Creditors. Refco reported
US$16.5 billion in assets and US$16.8 billion in debts to the
Bankruptcy Court on the first day of its Chapter 11 cases.
The Court confirmed the Modified Joint Chapter 11 Plan of
Refco Inc. and certain of its Direct and Indirect Subsidiaries,
including Refco Capital Markets, Ltd., and Refco F/X Associates,
LLC, on December 15, 2006. That Plan became effective on Dec. 26,
2006. Pursuant to the plan, RJM, LLC, was named plan
administrator to reorganized Refco, Inc., and its affiliates, and
Marc S. Kirschner as plan administrator to Refco Capital Markets,
Ltd.
ROTHSTEIN ROSENFELDT: TD Bank Loses $67MM Verdict Over Fraud Role
-----------------------------------------------------------------
Michael Bathon, substituting for Bloomberg News bankruptcy
columnist Bill Rochelle, reports that Toronto-Dominion Bank lost a
$67 million jury verdict over claims it helped Scott Rothstein,
the disbarred Florida attorney who admitted running a $1.2 billion
Ponzi scheme, by telling victims their money was safe as he
depleted accounts.
Mr. Bathon relates that a jury in federal court in Miami returned
the verdict Jan. 18 in a lawsuit brought by Coquina Investments,
based in Corpus Christi, Texas. The panel deliberated about four
hours before reaching its verdict after a trial before U.S.
District Judge Marcia Cooke.
"It was clear cut for us," the jury forewoman, Shonda Smith, said
after the verdict. "We were all surprised at how much stuff they
allowed to go through, all the deposits and transfers. At any
point, someone could have stopped it."
According to the report, Coquina's lawyer David Mandel on Jan. 17
urged the jury to award $32 million in compensatory damages and
$140 million in punitive damages. The verdict was for $32 million
in compensatory damages and $35 million in punitive damages.
"This Ponzi scheme would have been impossible if it weren't for TD
Bank's actions," Mandel said after the verdict, referring to the
Miami unit.
A spokeswoman, Rebecca Acevedo, said the bank is disappointed with
the verdict "and is considering all of its options." "We still
maintain that we were Rothstein Rosenfeldt Adler's bank and that
it was Scott Rothstein who defrauded investors," she said by
e-mail.
About Rothstein Rosenfeldt
Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler
PA -- http://www.rra-law.com/-- has been suspected of running a
$1.2 billion Ponzi scheme. U.S. authorities claimed in a civil
forfeiture lawsuit filed November 9, 2009, that Mr. Rothstein, the
firm's former chief executive officer, sold investments in non-
existent legal settlements. Mr. Rothstein pleaded guilty to five
counts of conspiracy and wire fraud on January 27, 2010.
Creditors of Rothstein Rosenfeldt Adler signed a petition sending
the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No.
09-34791). The petitioners include Bonnie Barnett, who says she
lost $500,000 in legal settlement investments; Aran Development,
Inc., which said it lost $345,000 in investments; and trade
creditor Universal Legal, identified as a recruitment firm, which
said it is owed $7,800. The creditors alleged being owed money
invested in lawsuit settlements.
Herbert M. Stettin, the state-court appointed receiver for
Rothstein Rosenfeldt, was officially carried over as the
Chapter 11 trustee in the involuntary bankruptcy case.
On June 10, 2010, Mr. Rothstein was sentenced to 50 years in
prison.
RUGGERO'S SPECIALTY: Case Summary & 8 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Ruggero's Specialty Foods, Inc.
2055 Linden Road
Flint, MI 48532
Bankruptcy Case No.: 12-30163
Chapter 11 Petition Date: January 14, 2012
Court: U.S. Bankruptcy Court
Eastern District of Michigan (Flint)
Judge: Daniel S. Opperman
Debtor's Counsel: David J. Fisher, Esq.
SMITH BOVILL, P.C.
200 St. Andrews Road
Saginaw, MI 48638
Tel: (989) 792-9641
E-mail: djfsecretary@smithbovill.com
Scheduled Assets: $1,008,630
Scheduled Liabilities: $1,357,352
The Company?s list of its eight largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/mieb12-30163.pdf
The petition was signed by Michael L. Mondelli, vice president.
S&E OPERATIONS: Case Summary & 8 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: S&E Operations, Inc.
11 Snow Pond Place
Spring, TX 77382
Bankruptcy Case No.: 12-30358
Chapter 11 Petition Date: January 13, 2012
Court: U.S. Bankruptcy Court
Southern District of Texas (Houston)
Judge: Karen K. Brown
Debtor's Counsel: Lawrence D. Tackett, Esq.
LAWRENCE D. TACKETT, PLLC
1400 Woodloch Forest Drive, Suite 540
The Woodlands, TX 77380-1179
Tel: (281) 419-2626
E-mail: lawtackett@aol.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
The Company?s list of its eight largest unsecured creditors filed
with the petition is available for free at:
http://bankrupt.com/misc/txsb12-30358.pdf
The petition was signed by Bob Syphrett, president.
SHUBH HOTELS LINCOLN: Filed in Bad Faith, Mezzanine Lender Says
---------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the owner of the Cornhusker Marriott Hotel in
Lincoln, Nebraska, filed under Chapter 11 in bad faith and should
have the case dismissed, mezzanine lender Cornhusker PREH LLC said
in a motion filed Jan. 13 in U.S. Bankruptcy Court in West Palm
Beach, Florida.
Mr. Rochelle notes that the hotel itself isn't in bankruptcy.
Instead, it's an entity named as Shubh Hotels Lincoln Mezzanine
LLC that filed in Chapter 11. Shubh Hotels owns the stock of the
entity that owns the hotel.
Shubh Hotels pledged the stock as security for a $3.4 million loan
from the mezzanine lender Cornhusker PREH. The lender says the
loan has been in default since it was made.
As reason for dismissing the Chapter 11 petition, the mezzanine
lender quotes from a forbearance agreement dating from July where
the hotel's owner said it has no intention of filing in
bankruptcy. The owner acknowledges in the agreement that a
bankruptcy filing would be in bad faith and made "solely" for the
purpose of delaying foreclosure.
The Chapter 11 filing was made on Jan. 4 (Bankr. S.D. Fla. Case
No. 12-10103), a half-hour before scheduled foreclosure, the
mezzanine lender said.
A hearing has yet to be set on the motion to dismiss. The
forbearance agreement also requires the borrower to waive any
right to object to dismissal while admitting that reorganization
is not feasible.
The franchisor Marriott International Inc. will terminate the
franchise, unless the lender takes over, court papers show.
Susan D. Lasky, Esq., at Susan D. Lasky PA, in Wilton Manors,
Florida, serves as counsel. The Debtor estimated assets and debts
of $1 million to $10 million.
SHUBH HOTELS LINCOLN: Lender Seeks Dismissal of Case
----------------------------------------------------
Richard Piersol, writing for the Lincoln Journal Star, reports
that Shubh Hotels Lincoln Mezzanine LLC, which holds a stake in
The Cornhusker Marriott Hotel in Lincoln, Nebraska, filed for
Chapter 11 bankruptcy before the U.S. Bankruptcy Court in South
Florida to avert a scheduled auction of its interest to settle a
debt.
According to the report, the lender, named Shubh Hotels Lincoln
Mezzanine, holds a $3.4 million loan and has asked the Bankruptcy
Court to dismiss the petition. The report notes the lender is
controlled by LEM Mezzanine, a Philadelphia investment
organization. The lender accuses Atul Bisaria, the hotel's owner,
of filing the Chapter 11 petition in bad faith in violation of a
forbearance agreement he reached with those lenders last year.
The report relates that, in a letter to the bankruptcy court, the
lender says Mr. Bisaria has defaulted on his agreement with
Marriott International, and Marriott will pull its "flag" from the
hotel on Feb. 5. If that happens, the letter said, it would take
the Lincoln hotel out of the Marriott reservation system, it could
depress the rates the hotel is able to charge and might jeopardize
the primary mortgage on the hotel.
According to the report, the letter also indicated that Mr.
Bisaria defaulted on the franchise by failing to live up to an
agreement made last May settling at least six earlier defaults.
The letter was sent Dec. 7 to Mr. Bisaria by John H. Moore Jr.,
senior vice president of full-service franchising operations for
Marriott.
The report notes the letter also said Mr. Bisaria owes Marriott
$126,214.48, of which $84,065.75 is overdue. Mr. Bisaria also
agreed to complete renovations of the hotel, but failed.
The report relates the lender would prefer that Marriott not pull
the brand, because that would render the hotel less valuable and
could cause a default on the primary mortgage with another
company, which could complicate the mezzanine loan dispute even
more. "Our intent is to gain control of the hotel and work
something out with Marriott," said Leslie Gern Cloyd, Esq. --
LCloyd@bergersingerman.com -- a Florida attorney representing the
lender. Ms. Cloyd is with Berger Singerman LLP.
The report notes that Island Hospitality, the hotel's management
company, said the hotel itself isn't in bankruptcy and its
operations have been undisrupted by the bankruptcy filings.
Island Hospitality has had its own legal and financial conflicts
with Mr. Bisaria. Island Hospitality is represented by
Christopher McKenna, Esq.
In a separate report, the Lincoln Journal Star's Mr. Piersol says
the bankruptcy filing shows the claim against Mr. Bisaria's
company is $3.4 million, but it values the secured collateral at
$8.9 million. The report notes creditors may dispute these values
later on.
The report also notes that a $34 million first mortgage on the
hotel is serviced by LNR Partners for the holders of mortgage
securities secured by Shubh Hotels Lincoln, Mr. Bisaria's company
that owns the hotel and the attached Cornhusker Square commercial
space. LNR representatives could not be reached for comment.
Based in Boca Raton, Florida, Shubh Hotels Lincoln Mezzanine, LLC,
filed for Chapter 11 bankruptcy protection on Jan. 4, 2012 (Bankr.
S.D. Fla. Case No. 12-10103). Judge Paul G. Hyman Jr. presides
over the case. Susan D. Lasky, Esq., at Susan D. Lasky PA,
represents the Debtor. The Debtor estimated both assets and debts
of between $1 million and $10 million.
SOLYNDRA LLC: To Cancel Auction Again After Failing to Lure Bids
----------------------------------------------------------------
Michael Bathon, substituting for Bloomberg News bankruptcy
columnist Bill Rochelle, reports that Solyndra LLC will again
cancel an auction planned for today after failing to draw any
offers to continue operating the company, a financial adviser
said.
"Solyndra did not receive any acceptable bids to acquire the
business on a turnkey basis," Solyndra's financial adviser, Eric
Carlson with Imperial Capital LLC, said in an e-mail to Bloomberg
on Jan. 18.
According to the report, the auction was intended to keep the
company operating and potentially resurrect the jobs lost by some
of Solyndra's former employees. The company set up a supplemental
auction in case Jan. 19's planned sale fell through. The
piecemeal sale of the company's assets will begin with the first
round starting on Feb. 22.
Mr. Bathon notes that the solar-panel maker has twice delayed the
auction of its business after failing to draw any acceptable bids,
court documents show.
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. BDO Consulting,
a division of BDO USA, LLP, as financial advisor and BDO Capital
Advisors, LLC, serves as investment banker for the creditors'
panel. Johnson Associates, Inc. acts as compensation advisor.
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. The Committee has tapped
Blank Rome LLP as counsel.
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 LLC: Daley Resigned Due to Probe, Congressman Says
-----------------------------------------------------------
Lance Duroni at Bankruptcy Law360 reports that the Republican
congressman spearheading the probe of Solyndra LLC said that White
House Chief of Staff William Daley's departure was spurred by the
investigation of the bankrupt solar panel maker's $535 million
government-backed loan.
According to Law360, Rep. Cliff Stearns, R-Fla., said in a
statement that Mr. Daley "led the administration's obstruction of
the committee's investigation," and warned that his successor
needs to comply with a subpoena for the administration's records
on Solyndra that Mr. Daley had dodged.
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. BDO Consulting,
a division of BDO USA, LLP, as financial advisor and BDO Capital
Advisors, LLC, serves as investment banker for the creditors'
panel.
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. The Committee has tapped
Blank Rome LLP as counsel.
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.
SOUTHERN PRODUCTS: Posts $513,200 Net Loss in Nov. 30 Quarter
-------------------------------------------------------------
Southern Products, Inc., filed its quarterly report on Form 10-Q,
reporting a net loss of $513,285 on $1.3 million of revenues for
the three months ended Nov. 30, 2011, compared with a net loss of
$2,224 on $nil revenue for the three months ended Nov. 30, 2010.
For the nine months ended Nov. 30, 2011, the Company has reported
a net loss of $870,559 on $3.6 million of revenues, compared with
a net loss of $8,162 on $nil revenue for the nine months ended
Nov. 30, 2010.
The Company's balance sheet at Nov. 30, 2011, showed $2.4 million
in total assets, $3.3 million in total liabilities, and a
stockholders' deficit of $900,025.
?We have negative working capital and have incurred losses since
inception,? the Company said in the filing. ?These factors create
substantial doubt about our ability to continue as a going
concern.?
A complete text of the Form 10-Q is available for free at:
http://is.gd/NJ4rD5
City of Industry, Calif.-based Southern Products, Inc., is in the
business of designing, assembling and marketing consumer
electronics products, primarily flat screen high-definition
televisions using LCD and LED technologies. Through Nov. 30,
2011, the Company has six LCD and LED widescreen televisions on
the market.
SP NEWSPRINT: Confirms Talks to Sell Biz in the "Near Future"
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that SP Newsprint Holdings LLC confirmed in a court paper
late last week that it's negotiating for a going-concern sale of
the business in the "near future."
Mr. Rochelle relates that the Company used the impending sale as
reason for granting a first extension of the exclusive right to
propose a reorganization plan. If the exclusivity motion is
granted at a Feb. 7 hearing, the new deadline will be March 14.
Last week the bankruptcy court named Direct Fee Review LLC to
serve as fee examiner and issue recommendations on the payment of
fees to professionals.
About SP Newsprint
Greenwich, Conn.-based SP Newsprint Holdings LLC -- aka Bulldog
Acquisition I LLC, Bulldog Acquisition II LLC, Publishers Papers,
Southeastern Paper Recycling and SP Newsprint Merger LLC -- and
three affiliates, SP Newsprint Co. LLC, SP Recycling Corporation
and SEP Technologies L.L.C, filed for Chapter 11 bankruptcy
(Bankr. D. Del. Lead Case No. 11-13649) on Nov. 15, 2011.
SP Newsprint Holdings LLC is a newsprint company controlled by
polo-playing mogul Peter Brant. It is one of the largest
producers of newsprint in North America. SP Recycling
Corporation, a Georgia corporation and the Debtors' other
operating company, was established in 1980 as a means for SP to
secure a ready supply of recycled fiber, a key raw material for
its newsprint.
SP Newsprint is the second Brant-owned newsprint company to tumble
into bankruptcy proceedings in recent years. Current and former
affiliated entities are Bear Island Paper Company, L.L.C., Brant
Industries, Inc., F.F. Soucy, Inc., Soucy Partners Newsprint,
Inc., White Birch Paper Company.
Judge Christopher S. Sontchi presides over the case. Joel H.
Levitin, Esq., Maya Peleg, Esq., and Richard A. Stieglitz Jr.,
Esq., at Cahill Gordon & Reindel LLP serve as the Debtors' lead
counsel. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at
Richards, Layton & Finger, P.A., serve as the Debtors' Delaware
counsel. AlixPartners LLP serves as the Debtors' financial
advisors and The Garden City Group Inc. serves as the Debtors'
claims and noticing agent. In its petition, SP Newsprint Holdings
estimated $100 million to $500 million in assets and debts. The
petitions were signed by Edward D. Sherrick, executive vice
president and chief financial officer.
An official committee of unsecured creditors appointed in the case
tapped BDO Consulting as financial advisor; and Lowenstein Sandler
PC and Ashby & Geddes as counsel.
STANFORD INT'L: Liquidators Ask Fraud Victims to File Claims
------------------------------------------------------------
Michael Bathon, substituting for Bloomberg News bankruptcy
columnist Bill Rochelle, reports that liquidators of R. Allen
Stanford's Antigua-based bank said investors who lost money in the
alleged $7 billion fraud should submit formal claims to creditors.
Grant Thornton LLP, appointed by an Antiguan court to wind up
Stanford International Bank, said creditors and victims needed to
complete and submit a claim form if they wanted to receive
distributions from the liquidators. The firm hopes to release
funds held in the U.K., Canada and Switzerland and proceeds from
the sale of Stanford property in Antigua.
"Today we can't say that either is imminent, but we continue
pushing forward on both fronts as hard as we can to make
distribution to depositor victims," Grant Thornton liquidator Hugh
Dickson said in an e-mailed statement Jan. 17.
Liquidators in Antigua and the U.S. are seeking control of
Stanford's assets to return money to his alleged victims,
including those who bought worthless certificates of deposit from
Stanford International Bank.
About Stanford International Bank
Domiciled in Antigua, Stanford International Bank Limited --
http://www.stanfordinternationalbank.com/-- is a member of
Stanford Private Wealth Management, a global financial services
network with US$51 billion in deposits and assets under
management or advisement. Stanford Private Wealth Management
serves more than 70,000 clients in 140 countries.
On February 16, 2009, the United States District Court for the
Northern District of Texas, Dallas Division, signed an order
appointing Ralph Janvey as receiver for all the assets and
records of Stanford International Bank, Ltd., Stanford Group
Company, Stanford Capital Management, LLC, Robert Allen Stanford,
James M. Davis and Laura Pendergest-Holt and of all entities they
own or control. The February 16 order, as amended March 12,
2009, directs the Receiver to, among other things, take control
and possession of and to operate the Receivership Estate, and to
perform all acts necessary to conserve, hold, manage and preserve
the value of the Receivership Estate.
The U.S. Securities and Exchange Commission, on Feb. 17, charged
before the U.S. District Court in Dallas, Texas, Mr. Stanford and
three of his companies for orchestrating a fraudulent, multi-
billion dollar investment scheme centering on an US$8 billion
Certificate of Deposit program.
A criminal case was pursued against him in June before the U.S.
District Court in Houston, Texas. Mr. Stanford pleaded not
guilty to 21 charges of multi-billion dollar fraud, money-
laundering and obstruction of justice. Assistant Attorney
General Lanny Breuer, as cited by Agence France-Presse News, said
in a 57-page indictment that Mr. Stanford could face up to 250
years in prison if convicted on all charges. Mr. Stanford
surrendered to U.S. authorities after a warrant was issued for
his arrest on the criminal charges.
The criminal case is U.S. v. Stanford, H-09-342, U.S. District
Court, Southern District of Texas (Houston). The civil case is
SEC v. Stanford International Bank, 3:09-cv-00298-N, U.S.
District Court, Northern District of Texas (Dallas).
SULTAN REALTY: Case Summary & 4 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Sultan Realty, LLC
984 Intervale Avenue
Bronx, NY 10459
Bankruptcy Case No.: 12-10119
Chapter 11 Petition Date: January 12, 2012
Court: U.S. Bankruptcy Court
Southern District of New York (Manhattan)
Debtor's Counsel: Raymond J. Aab, Esq.
61 Broadway, 25th Floor
New York, NY 10006
Tel: (917) 551-1300
Fax: (917) 551-0030
E-mail: rja120@msn.com
Scheduled Assets: $3,123,534
Scheduled Liabilities: $3,657,649
The Company?s list of its four largest unsecured creditors filed
with the petition is available for free at:
http://bankrupt.com/misc/nysb12-10119.pdf
The petition was signed by Hamad Ali, president.
SUMMITT LOGISTICS: Indiana Court Approves Chapter 11 Plan
---------------------------------------------------------
Kevin Eigelbach at Business First reports that Judge Basil Lorch
III of U.S. Bankruptcy Court for the Southern District of Indiana
approved on Jan. 5, 2012, the Chapter 11 reorganization plan for
the Summitt Trucking companies, effectively giving the U.S.
government's seal of approval for the Clarksville companies'
efforts to restructure their debts. According to the report, the
judge concluded that the plan met all requirements of the U.S.
Bankruptcy Code, which is a requirement for successful
reorganizations.
Summitt Logistics & Brokerage LLC, in Clarksville, Indiana, and
three other affiliates filed for Chapter 11 bankruptcy (Bankr.
N.D. Ind. Case Nos. 09-90630 to 09-90633) on March 2, 2009.
Affiliates that filed separate Chapter 11 petitions are Summitt
Trucking LLC; Tractor Leasing LLC; and Trailer Leasing LLC.
Summitt Logistics -- http://www.summitttrucking.com/-- offers
transportation and logistic services.
Judge Basil H. Lorch III presides over the case. Terry E. Hall,
Esq., at Baker & Daniels, serves as the Debtors' counsel. In its
petition, Summitt Logistics estimated $10 million to $50 million
in assets and debts.
SUPERIOR WALLS: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Superior Walls of East Tennessee, Inc.
P.O. Box 168
10144 Sparta Highway
Rock Island, TN 38581
Bankruptcy Case No.: 12-10166
Chapter 11 Petition Date: January 14, 2012
Court: U.S. Bankruptcy Court
Eastern District of Tennessee (Winchester)
Judge: Shelley D. Rucker
Debtor's Counsel: Steven L. Lefkovitz, Esq.
LEFKOVITZ & LEFKOVITZ
618 Church Street, Suite 410
Nashville, TN 37219
Tel: (615) 256-8300
Fax: (615) 255-4516
E-mail: sllbkecf@gmail.com
Scheduled Assets: $2,322,710
Scheduled Liabilities: $2,305,035
The Company?s list of its 20 largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/tneb12-10166.pdf
The petition was signed by Joe Stewart, chairman of the board.
SUSTAINABLE ENVIRONMENTAL: Sells 5 Million Units for US$500,000
---------------------------------------------------------------
Sustainable Environmental Technologies Corporation, on Jan. 12,
2012, entered into an agreement with an accredited investor for
the purchase of 5,000,000 units of securities of the Company for
US$500,000. Each individual Unit had the purchase price of $0.10
per Unit and consisted of one share of restricted common stock and
one warrant to purchase one share of restricted common stock at
the exercise price of $0.15. The accredited investor purchased
5,000,000 Units, totaling 5,000,000 shares of restricted common
stock and a warrant to purchase 5,000,000 shares of restricted
common stock for US$500,000.
The Units sold by the Company relied upon exemptions from
registration provided for in Regulation S and Sections 4(2) and
4(6) of the Securities Act of 1933, as amended, including
Regulation D promulgated thereunder based on the accredited
investors knowledge of the Company's operations, financial
condition and experience in financial and business matters that
allowed them to evaluate the merits and risk of receipt of the
Units.
About Sustainable Environmental
Upland, Calif.-based Sustainable Environmental Technologies
Corporation (formerly RG Global Lifestyles, Inc.) offers water and
wastewater treatment engineering and construction services.
The Company's balance sheet at Sept. 30, 2011, showed $3.21
million in total assets, $3.40 million in total liabilities and a
$192,319 total stockholders' deficit.
During the quarter ended Dec. 31, 2010, the Company incurred an
operating loss from continuing operations before income taxes of
$265,464. As of Dec. 31, 2010, the Company had a working capital
deficit of approximately $2.3 million. "These conditions raise
substantial doubt about the Company's ability to continue as a
going concern," the Company said in the filing.
TELETOUCH COMMUNICATIONS: Posts $7.7MM Net Income in Nov. 30 Qtr.
-----------------------------------------------------------------
Teletouch Communications, Inc., filed with the U.S. Securities and
Exchange Commission its Quarterly Report on Form 10-Q reporting
net income of $7.78 million on $7.98 million of total operating
revenues for the three months ended Nov. 30, 2011, compared with a
net loss of $705,000 on $8.94 million of total operating revenues
for the same period a year ago.
The Company reported net income of $7.01 million on $18.40 million
of total operating revenues for the six months ended Nov. 30,
2011, compared with a net loss of $935,000 on $17.92 million of
total operating revenues for the same period during the prior
year.
The Company's balance sheet at Nov. 30, 2011, showed $19.72
million in total assets, $23.17 million in total liabilities and a
$3.45 million total shareholders' deficit.
As reported by the TCR on Sept. 1, 2011, BDO USA, LLP, in Houston,
Texas, noted that the Company has increasing working capital
deficits, significant current debt service obligations, a net
capital deficiency along with current and predicted net operating
losses and negative cash flows which raise substantial doubt about
its ability to continue as a going concern.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/Bwxjvt
About Teletouch
Teletouch Communications, Inc., offers a comprehensive suite of
wireless telecommunications solutions, including cellular, two-way
radio, GPS-telemetry and wireless messaging. Teletouch is an
authorized provider of AT&T (NYSE: T) products and services
(voice, data and entertainment) to consumers, businesses and
government agencies, as well as an operator of its own two-way
radio network in Texas. Recently, Teletouch entered into national
agency and distribution agreements with Sprint (NYSE: S) and
Clearwire (NASDAQ: CLWR), providers of advanced 4G cellular
network services. Teletouch operates a chain of 26 retail and
agent stores under the "Teletouch" and "Hawk Electronics" brands,
in conjunction with its direct sales force, customer care (call)
centers and various retail eCommerce Web sites including:
http://www.hawkelectronics.com/and http://www.hawkexpress.com/
Through its wholly-owned subsidiary, Progressive Concepts, Inc.,
Teletouch operates a national distribution business, PCI
Wholesale, primarily serving large cellular carrier agents and
rural carriers, as well as auto dealers and smaller consumer
electronics retailers, with product sales and support available
through http://www.pciwholesale.com/and
http://www.pcidropship.com/among other B2B oriented Web sites.
TELTRONICS INC: Panel Urges Creditors to Vote Against Plan
-----------------------------------------------------------
The creditors' committee is urging unsecured creditors to vote
against a reorganization plan for Teltronics Inc.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Teltronics Inc. scheduled a confirmation hearing for
Feb. 15 when the bankruptcy judge last week approved a disclosure
statement explaining the Chapter 11 plan.
Mr. Rochelle notes that before the plan is approved, Teltronics
must overcome opposition from the official creditors' committee
which is urging unsecured creditor to vote against the plan.
The plan allows unsecured creditors to share $50,000 that secured
lender Wells Fargo Capital Finance Inc. will give up from proceeds
of sale. Teltronics said in its disclosure statement that filed
unsecured claims currently total $12 million.
The report relates that lawsuits will be turned over to a trust
for creditors. The committee nonetheless objects because the plan
provides no money for the trust to pay the cost of litigation.
The plan calls for holding an auction on Jan. 25 where a buyer has
the option of acquiring the assets in a sale or taking over the
new stock through confirmation of a plan.
Speyside Capital Partners LLC is already under contract to buy the
business for $5.5 million cash. Proceeds will be entirely eaten
up in paying off the secured creditor and other claims that must
be paid in full before a plan will be confirmed. Unless the price
rises at auction, there will be nothing additional for unsecured
creditors. Speyside's price will pay off the $2.8 million owing
to Wells Fargo for the loan financing the bankruptcy and $1.4
million in the pre-bankruptcy loan.
Margie Manning at Tampa Bay Business Journal reports, citing court
documents, that proceeds would be used to pay the secured
creditor, Wells Fargo Capital Finance Inc., with a $50,000 "carve-
out" for general unsecured creditors. The unsecured creditors are
owed about $12 million.
The Business Journal report relates that, unless the auction
results in a higher purchase price or Wells Fargo agrees to
increase the "carve-out" for unsecured credits, the Official
Creditors' Committee said it would not support the reorganization
plan.
About Teltronics Inc.
Palmetto, Fla.-based Teltronics, Inc. (OTC BB: TELT)
-- http://ww.teltronics.com/-- designs, installs, develops,
manufactures and markets electronic hardware and application
software products, and engages in electronic manufacturing
services primarily in the telecommunication industry. Teltronics
has three wholly owned subsidiaries, Teltronics Limited, 36371
Yukon Inc., and TTG Acquisition Corp.
Teltronics filed for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case
No. 11-12150) on June 27, 2011. Judge K. Rodney May presides over
the case. Charles A. Postler, Esq., at Stichter, Riedel, Blain &
Prosser, serves as the Debtor's counsel. The petition was signed
by Ewen R. Cameron, president.
The U.S. trustee has appointed an official committee of unsecured
creditors in the case.
Wells Fargo Capital Finance Inc., as DIP Lender, is represented by
Donald Kirk, Esq., at Fowler White Boggs P.A., and Pamela Kohlman,
Esq., at Webster, Buchalter Nemer, P.C.
TERRESTAR CORP: Court Sets March 7 Confirmation Hearing
-------------------------------------------------------
Hilary Russ at Bankruptcy Law360 reports that U.S. Bankruptcy
Judge Sean H. Lane last week signed off on TerreStar Corp.'s
disclosures about its Chapter 11 plan after several objections
were either resolved or shelved. Judge Lane also agreed to
schedule a tentative March 7 hearing for parties to debate whether
the bankrupt company's Chapter 11 plan should be confirmed.
About TerreStar Corp. and TerreStar Networks
TerreStar Corporation and TerreStar Holdings, Inc., filed
voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for
the Southern District of New York on Feb. 16, 2011.
TSC's Chapter 11 filing joins the bankruptcy proceedings of
TerreStar Networks Inc. and 12 other affiliates, which filed on
Oct. 19, 2010. The October Chapter 11 cases are procedurally
consolidated under TSN's Case No. 10-15446 under Judge Sean H.
Lane.
TSC is the parent company of each of the October Debtors. TSC has
four wholly owned direct subsidiaries: TerreStar Holdings, Inc.,
TerreStar New York Inc., Motient Holdings Inc., and MVH Holdings
Inc.
TSC's case is jointly administered with the cases of seven of the
October Debtors under the caption In re TerreStar Corporation, et
al., Case No. 11-10612 (SHL). The seven Debtor entities who
sought joint administration with TSC are TerreStar New York Inc.,
Motient Communications Inc., Motient Holdings Inc., Motient
License Inc., Motient Services Inc., Motient Ventures Holdings
Inc., and MVH Holdings Inc.
TSC is a Delaware corporation whose main asset is the equity in
non-Debtor TerreStar 1.4 Holdings LLC, which has the right to use
a "1.4 GHz terrestrial spectrum" pursuant to 64 licenses issued by
the Federal Communication Commission. TSC also has an indirect
89.3% ownership interest in TerreStar Network, Inc., which
operates a separate and distinct mobile communications business.
TerreStar Holdings is a Delaware corporation that directly holds
100% of the interests in 1.4 Holdings LLC.
TerreStar Networks -- TSN -- the principal operating entity of
TSC, developed an innovative wireless communications system to
provide mobile coverage throughout the United States and Canada
using satellite-terrestrial smartphones. The system, however,
required an enormous amount of capital expenditures and initially
produced very little in the way of revenue. TSN's available cash
and borrowing capacity were insufficient to cover its funding;
thus, forcing TSN to seek bankruptcy protection in October 2010.
TSC estimated assets and debts of $100 million to $500million in
its Chapter 11 petition.
Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP,
in New York, serves as counsel for the TSC and TSN Debtors.
Garden City Group is the claims and notice agent. Blackstone
Advisory Partners LP is the financial advisor. The Garden City
Group, Inc., is the claims and noticing agent in the Chapter 11
cases.
Otterbourg Steindler Houston & Rosen P.C. is the counsel to the
Official Committee of Unsecured Creditors formed in TSN's Chapter
11 cases. FTI Consulting, Inc., is the Committee's financial
advisor.
TerreStar has signed a contract to sell its business to Dish
Network Corp. for $1.38 billion. TerreStar cancelled a June 30
auction because there were no competing bids submitted by the
deadline.
As reported in the TCR on Nov. 23, 2011, TerreStar Networks Inc.
sold the business to Dish Network Corp. for $1.38 billion,
negotiated a settlement with creditors, and filed a liquidating
Chapter 11 plan. Bill Rochelle, the bankruptcy columnist for
Bloomberg News, reports the hearing to approve the explanatory
disclosure statement is set for Dec. 16. If the plan stays on
track, the confirmation hearing for approval
of the plan would take place Feb. 13.
TMP DIRECTIONAL: Former Monster Unit Wins Plan Approval
-------------------------------------------------------
Michael Bathon, substituting for Bloomberg News bankruptcy
columnist Bill Rochelle, reports that TMP Directional Marketing
LLC won court approval of its liquidating chapter 11 plan. U.S.
Bankruptcy Judge Mary Walrath at a Jan. 17 hearing approved the
plan, which is projected to give unsecured creditors a recovery
between 11 and 18 cents on the dollar, according to court
documents in Wilmington, Delaware.
The report relates that an ad hoc committee of unsecured creditors
was formed to negotiate a Chapter 11 plan. The committee's
members have $112 million in unsecured claims, court papers show.
The Chapter 11 plan was accepted by more than 95 percent of voting
creditors. Under the plan the company will transfer all of its
remaining assets to a liquidating trust that would distribute the
proceeds to creditors.
About TMP Directional
TMP Directional Marketing LLC, along with affiliates, filed for
bankruptcy on Dec. 5, 2011 (Bankr. D. Del. Case No. 11-13835) with
plans to liquidate its remaining assets according to a prepackaged
plan. TMP specialized in placing ads in the yellow pages of local
telephone books. Before ceasing substantially all of operations
in early April 2011, TMP was one of the leading providers of
directed search marketing in the United States, employing nearly
400 people in 10 offices throughout the country.
TMP was spun off from Monster Worldwide Inc. Audax Group acquired
TMP in the 2005 spinoff. Monster isn't in bankruptcy and is no
longer involved in the company.
The Chapter 11 plan has been accepted by more than 95% of voting
creditors. The Company estimated that unsecured creditors will
collect 11% to 18% of what they are owed. Secured lenders
required TMP to pay them off earlier this year, helping cause the
business to shut down. Unsecured creditors, asserting
$112 million in claims, formed an ad hoc committee to negotiate
the Chapter 11 plan. The Ad Hoc Committee consists of AT&T Yellow
Pages Holdings LLC; Genesis Publisher Services, SuperMedia LLC,
Dex One Corporation, Directory Publishing Solutions Inc., Local
Insight Media Holdings Inc., National Solutions, Inc., Yellowbook,
Inc., and Names and Numbers. Other members may be added from time
to time.
James A. Stempel, Esq., and Ryan Blaine Bennett, Esq.,
at Kirkland & Ellis LLP; and Domenic E. Pacitti, Esq., and Morton
Branzburg, Esq., at Klehr Harrison Harvey Branzburg LLP, serve as
the Debtors' counsel. CRG Partners Group LLC serves as the
Debtors' restructuring advisors. Epiq Bankruptcy Solutions LLC
serves as claims and balloting agent. The petition was signed by
Timothy P. Nugent, vice president, assistant secretary, and
assistant treasurer.
In its schedules, the Debtor disclosed $33,058,884 in assets and
$120,832,845 in liabilities.
Affiliates filing for bankruptcy are TMP DM, Inc. (Case No.
11-13836) and TMP DM, LLC (Case No. 11-13837).
General Electric Capital Corp., as agent to the prepetition
lenders, is represented by: Peter Knight, Esq., at Latham &
Watkins LLP, and Eric Lopez Schnabel, Esq., at Dorsey & Whitney
LLP. Lender CapitalSource is represented by Mary Bucci, Esq., at
Brown Rudnick LLP, and Jeffrey C. Wisler, Esq., at Connolly Bove
Lodge & Hutz LLP. The Ad Hoc Committee is represented by Brett H.
Miller, Esq., and William M. Hildbold, Esq., at Morrison &
Foerster LLP.
TRIDENT MICROSYSTEMS: Common Stock to Trade on OTC Markets
----------------------------------------------------------
Trident Microsystems, Inc. anticipates that its common stock will
begin trading under the symbol "TRIDQ" on the OTCQB marketplace,
operated by OTC Markets Group, on Thursday, Jan. 19, 2012. More
information, including Real-Time Level 2 quotes, is expected to be
available at otcmarkets.com.
As previously announced, NASDAQ has advised Trident that its
common stock, traded under the symbol TRID, will be suspended from
trading on NASDAQ prior to the opening of the market on Thursday,
Jan. 19, 2012. NASDAQ advised Trident that it is taking these
steps due to Trident's Chapter 11 bankruptcy filing, and Trident
had previously been notified of a potential delisting due to its
stock price trading under $1.00.
Due to Trident's Chapter 11 filing, Trident did not oppose the
suspension and delisting of its securities. Trident cannot
predict the ultimate value of its common stock and it remains too
early to determine whether holders of common stock will receive
any distribution in the Chapter 11 reorganization. The Company
noted that in most Chapter 11 cases holders of equity securities
receive little or no recovery of value from their investment. As
a result, Trident urges investors to exercise appropriate caution
with respect to any existing or future investments in Trident's
securities.
About Trident Microsystems
Sunnyvale, California-based Trident Microsystems, Inc., currently
designs, develops, and markets integrated circuits and related
software for processing, displaying, and transmitting high quality
audio, graphics, and images in home consumer electronics
applications such as digital TVs, PC-TV, and analog TVs, and set-
top boxes. The Company has research and development facilities in
Beijing and Shanghai, China; Freiburg, Germany; Eindhoven and
Nijmegen, The Netherlands; Belfast, United Kingdom; Bangalore and
Hyderabad, India; Austin, Texas; and Sunnyvale, California. The
Company has sales offices in Seoul, South Korea; Tokyo, Japan;
Hong Kong and Shenzhen, China; Taipei, Taiwan; San Diego,
California; Mumbai, India; and Suresnes, France. The Company also
has operations facilities in Taipei and Kaoshiung, Taiwan; and
Hong Kong, China.
Trident Microsystems and its Cayman subsidiary, Trident
Microsystems (Far East) Ltd. filed for Chapter 11 bankruptcy
protection (Bankr. D. Del. Lead Case No. 12-10069) on Jan. 4,
2011. Trident said it expects to shortly file for protection in
the Cayman Islands.
Judge Christopher S. Sontchi presides over the case. Lawyers at
DLA Piper LLP (US) serve as the Debtors' counsel. FTI Consulting,
Inc., is the financial advisor. Kurtzman Carson Consultants is
the claims and notice agent.
Trident had $309,992,980 in assets and $39,607,591 in liabilities
as of Oct. 31, 2011. The petition was signed by David L.
Teichmann, executive VP, general counsel & corporate secretary.
TRUMP ENTERTAINMENT: Judge Approves $13MM Settlement With Latham
----------------------------------------------------------------
Evan Weinberger at Bankruptcy Law360 reports that a bankruptcy
judge in New Jersey has approved a $13.2 million settlement
between the reorganized Trump Entertainment Resorts Inc. and law
firm Latham & Watkins LLP.
Under the settlement, approved by Judge Judith H. Wizmur of the
Camden, N.J., bankruptcy court, Latham agreed to drop all but four
of its remaining 10 claims against the casino and resort operator;
each of the four claims is valued at approximately $3.3 million,
according to Law360.
About Trump Entertainment
Based in Atlantic City, New Jersey, Trump Entertainment Resorts
Inc. (NASDAQ: TRMP) -- http://www.trumpcasinos.com/-- owns and
operates three casino hotel properties in Atlantic City, New
Jersey, which include Trump Taj Mahal Casino Resort, Trump Plaza
Hotel and Casino, and Trump Marina Hotel Casino. The Company
conducts gaming activities and provides customers with casino
resort and entertainment.
Donald Trump is a shareholder of the Company and, as its non-
executive Chairman, is not involved in the daily operations of the
Company. The Company is separate and distinct from Mr. Trump's
privately held real estate and other holdings.
Trump Entertainment Resorts, TCI 2 Holdings, LLC, and other
affiliates filed for Chapter 11 protection on Feb. 17, 2009
(Bankr. D. N.J. Lead Case No. 09-13654). The Company tapped
Charles A. Stanziale, Jr., Esq., at McCarter & English, LLP, as
lead counsel, and Weil Gotshal & Manges as co-counsel. Ernst &
Young LLP served as the Company's auditor and accountant and
Lazard Freres & Co. LLC was the financial advisor. Garden City
Group was the claims agent. The Company disclosed assets of
$2,055,555,000 and debts of $1,737,726,000 as of Dec. 31, 2008.
Trump Hotels & Casino Resorts, Inc., filed for Chapter 11
protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898
through 04-46925). Trump Hotels obtained the Court's confirmation
of its Chapter 11 plan on April 5, 2005, and in May 2005, it
exited from bankruptcy under the name Trump Entertainment Resorts
Inc.
UNITEK GLOBAL: Moody's Says 'B2' CFR Not Hit by CEO Resignation
---------------------------------------------------------------
Moody's Investors Service commented that Unitek Global Services
Inc.'s ("Unitek") January 11, 2012 announcement that its CEO,
Scott Hisey and President and Chairman of the Board, Peter
Giacalone have resigned has no immediate impact on the company's
B2 corporate family rating and stable ratings outlook.
RATINGS RATIONALE
The principal methodology used in rating Unitek was the Global
Business & Consumer Service Industry Methodology published in
October 2010. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
U.S. COATING: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: U.S. Coating Specialties & Supplies, LLC
125 W. Mayes Street
Jackson, MS 39213
Bankruptcy Case No.: 12-00121
Chapter 11 Petition Date: January 13, 2012
Court: U.S. Bankruptcy Court
Southern District of Mississippi (Jackson Divisional
Office)
Judge: Edward Ellington
Debtor's Counsel: Herbert J. Irvin, Esq.
IRVIN & ASSOCIATES PLLC
P.O. Box 1869
Jackson, MS 39215-1869
Tel: (601) 624-8110
E-mail: iq.attys@gmail.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Earl Washington, managing member.
WASHINGTON MUTUAL: Court Denies TruPS Consortium's Stay Motion
--------------------------------------------------------------
BankruptcyData.com reports that the U.S. Bankruptcy Court denied
the motion of Washington Mutual's consortium of trust preferred
security holders to determine propriety of the proposed
classification of interests subject to treatment under Class 19 of
the Company's Seventh Amended Plan of Liquidation. Separately,
the Court also denied the consortium's motion for stay of the
confirmation proceedings pending appeal of the Court's
Jan. 7, 2012 ruling in the adversary proceeding captioned Black
Horse Capital et al. v. J.P. Morgan Chase Bank et al. (the TPS
litigation).
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- was the holding company for Washington
Mutual Bank as well as numerous non-bank subsidiaries.
Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S.
government regulators. The next day, WaMu and its affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns
100% of the equity in WMI Investment. When WaMu filed for
protection from its creditors, it disclosed assets of
$32,896,605,516 and debts of $8,167,022,695. WMI Investment
estimated assets of $500 million to $1 billion with zero debts.
WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal &
Manges LLP in New York City; Mark D. Collins, Esq., at Richards,
Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari,
Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver &
Hedges, LLP. The Debtor tapped Valuation Research Corporation as
valuation service provider for certain assets.
Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New
York, and David B. Stratton, Esq., at Pepper Hamilton LLP in
Wilmington, Del., represent the Official Committee of Unsecured
Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and
William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the
Equity Committee. The official committee of equity security
holders also tapped BDO USA as its tax advisor. Stacey R.
Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis,
Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent
JPMorgan Chase, which acquired the WaMu bank unit's assets prior
to the Petition Date.
On Jan. 7, 2011, the Bankruptcy Court entered a 107-page opinion
determining that the global settlement agreement, among certain
parties including WMI, the Federal Deposit Insurance Corporation
and JPMorgan, upon which the Plan is premised, and the
transactions contemplated therein, are fair, reasonable, and in
the best interests of WMI. However, the Opinion and related order
denied confirmation, but suggested certain modifications to the
Company's Sixth Amended Joint Plan of Affiliated Debtors that, if
made, would facilitate confirmation.
WaMu filed a Modified Sixth Amended Joint Plan and a related
Supplemental Disclosure Statement, which it believes would address
the Bankruptcy Court's concerns.
On Sept. 13, 2011, Judge Walrath denied confirmation of WaMu's
Modified Sixth Amended Plan and granted equity committee standing
to prosecute claims for equitable disallowance but stayed the
ruling pending mediation.
WaMu said it would seek confirmation of a revised plan "as soon as
practicable."
The Plan proposes to pay more than $7 billion to creditors and
incorporates a global settlement agreement resolving issues among
the Debtors, JPMorgan Chase, the Federal Deposit Insurance Corp.
in its corporate capacity and as receiver for WaMu Bank, certain
large creditors, certain WMB senior noteholders, and the
creditors' committee. The Settlement Noteholders are Appaloosa
Management, L.P., Aurelius Capital Management LP, Centerbridge
Partners, LP, and Owl Creek Asset Management, L.P.
WASHINGTON MUTUAL: Shareholders Want Hedge Funds to Release Info
----------------------------------------------------------------
Keith Goldberg at Bankruptcy Law360 reports that a group of
Washington Mutual Inc. shareholders has urged a Delaware
bankruptcy judge to force the bank and hedge funds involved in
forging the settlement at the heart of WMI's latest proposed
reorganization plan to turn over additional information before
confirming the plan.
Law360 relates that the TPS Group, which represents five WMI
shareholders, says the settlement and plan submitted Dec. 12 that
would give shareholders a stake in the reorganized company
unfairly benefits the hedge funds by releasing them from
shareholder claims that they improperly traded on.
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- was the holding company for Washington
Mutual Bank as well as numerous non-bank subsidiaries.
Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S.
government regulators. The next day, WaMu and its affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns
100% of the equity in WMI Investment. When WaMu filed for
protection from its creditors, it disclosed assets of
$32,896,605,516 and debts of $8,167,022,695. WMI Investment
estimated assets of $500 million to $1 billion with zero debts.
WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal &
Manges LLP in New York City; Mark D. Collins, Esq., at Richards,
Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari,
Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver &
Hedges, LLP. The Debtor tapped Valuation Research Corporation as
valuation service provider for certain assets.
Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New
York, and David B. Stratton, Esq., at Pepper Hamilton LLP in
Wilmington, Del., represent the Official Committee of Unsecured
Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and
William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the
Equity Committee. The official committee of equity security
holders also tapped BDO USA as its tax advisor. Stacey R.
Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis,
Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent
JPMorgan Chase, which acquired the WaMu bank unit's assets prior
to the Petition Date.
On Jan. 7, 2011, the Bankruptcy Court entered a 107-page opinion
determining that the global settlement agreement, among certain
parties including WMI, the Federal Deposit Insurance Corporation
and JPMorgan, upon which the Plan is premised, and the
transactions contemplated therein, are fair, reasonable, and in
the best interests of WMI. However, the Opinion and related order
denied confirmation, but suggested certain modifications to the
Company's Sixth Amended Joint Plan of Affiliated Debtors that, if
made, would facilitate confirmation.
WaMu filed a Modified Sixth Amended Joint Plan and a related
Supplemental Disclosure Statement, which it believes would address
the Bankruptcy Court's concerns.
On Sept. 13, 2011, Judge Walrath denied confirmation of WaMu's
Modified Sixth Amended Plan and granted equity committee standing
to prosecute claims for equitable disallowance but stayed the
ruling pending mediation.
WaMu said it would seek confirmation of a revised plan "as soon as
practicable."
The Plan proposes to pay more than $7 billion to creditors and
incorporates a global settlement agreement resolving issues among
the Debtors, JPMorgan Chase, the Federal Deposit Insurance Corp.
in its corporate capacity and as receiver for WaMu Bank, certain
large creditors, certain WMB senior noteholders, and the
creditors' committee. The Settlement Noteholders are Appaloosa
Management, L.P., Aurelius Capital Management LP, Centerbridge
Partners, LP, and Owl Creek Asset Management, L.P.
WESTMORELAND COAL: Plans to Offer $130-Mil. 10.75% Senior Notes
---------------------------------------------------------------
Westmoreland Coal Company announced that it, together with
Westmoreland Partners, its indirect wholly-owned subsidiary, as
Co-Issuer, intends to offer $130 million principal amount of
10.75% Senior Secured Notes due 2018 as additional notes to the
already outstanding $150 million principal amount of existing
10.75% Senior Secured Notes due 2018, in a private placement. The
terms, timing and structure of any transaction are subject to
market and other conditions. There can be no assurance that any
transaction will ultimately be pursued or that any transaction, if
pursued, will be successful.
The net proceeds from the offering of the Notes are expected to be
used, together with cash on hand, to finance the acquisition of
the Kemmerer Mine. The net proceeds will be used to pay the cash
consideration of $74.4 million, approximately $32.0 million for
reclamation bonding collateral and the remainder to fund initial
Kemmerer working capital and to pay estimated transaction fees and
expenses.
The Notes will be sold only to qualified institutional buyers in
the United States in reliance on Rule 144A under the Securities
Act of 1933, as amended, and outside the United States to non-U.S.
persons in reliance on Regulation S under the Securities Act. The
proposed issuance of the Notes will not be registered under the
Securities Act, and may not be offered or sold in the United
States absent registration under the Securities Act or an
applicable exemption from the registration requirements of the
Securities Act.
About Westmoreland Coal
Colorado Springs, Colo.-based Westmoreland Coal Company (NYSE
AMEX: WLB) -- http://www.westmoreland.com/-- is the oldest
independent coal company in the United States. The Company's coal
operations include coal mining in the Powder River Basin in
Montana and lignite mining operations in Montana, North Dakota and
Texas. Its power operations include ownership of the two-unit
ROVA coal-fired power plant in North Carolina.
The Company reported a net loss of $3.2 million on $506.1 million
of revenues for 2010, compared with a net loss of $29.2 million on
$443.4 million of revenues for 2009. Operating income was
$20.5 million in 2010 compared to a loss of $31.8 million in 2009.
The Company also reported a net loss of $25.07 million on
$372.35 million of revenue for the nine months ended Sept. 30,
2011, compared with a net loss of $621,000 on $378.15 million of
revenue for the same period during the prior year.
The Company's balance sheet at Sept. 30, 2011, showed $768.96
million in total assets, $286.46 million in total debt, and a
$174.36 million total deficit.
* * *
As reported in the TCR on March 4, 2011, Standard & Poor's Ratings
Services said that it assigned a 'CCC+' corporate credit rating to
Colorado Springs, Colorado-based Westmoreland Coal Co. The rating
outlook is stable.
WESTMORELAND COAL: Moody's Assigns 'Caa2' Rating to Senior Notes
----------------------------------------------------------------
Moody's Investors Service assigned a Caa2 rating to Westmoreland
Coal Company's (Westmoreland) proposed $130 million senior secured
note offering. At the same time, Moody's affirmed the existing
ratings, including the company's Caa1 corporate family rating and
its SGL-3 speculative grade liquidity rating. Westmoreland's
rating outlook is stable.
On January 17, 2012, Westmoreland announced that it intends to
offer $130 million principal amount of 10.75% Senior Secured Notes
due 2018 as an additional issuance to the already outstanding
notes with principal amount of $150 million. The net proceeds from
the offering are expected to be used to finance the acquisition of
the Kemmerer Mine, which will include cash consideration of $74.4
million, reclamation bonding collateral of approximately $32.0
million, initial Kemmerer working capital and estimated
transaction fees and expenses.
Moody's took these rating actions:
-Assigned Caa2 to $130 million 10.75% Senior Secured Notes due
2018.
RATINGS RATIONALE
Westmoreland's Caa1 CFR considers the high level of debt within
the capital structure, the relatively tight interest coverage
metrics, and limited headroom under financial covenants in the
secured debt facility at Westmoreland Mining LLC (WML). The rating
also acknowledges the company's healthy margins and the high
proportion of coal production already contracted for the next 12
to 18 months.
While Kemmerer acquisition adds approximately 118 million tons of
coal to Westmoreland's reserves (equivalent to about 20 years of
production - a credit positive), it is also likely to increase the
company's leverage in the near term. That said, Moody's expects
that cash flow (cash from operations less capital expenditures)
attributable to the Kemmerer mine will be positive over the
ratings horizon, and that Westmoreland's Debt/ EBITDA and other
debt protection metrics will remain at the levels appropriate for
the current Caa1 CFR. As part of the acquisition, Westmoreland
will also assume approximately $118.0 million in certain
liabilities, including post retirement medical, pension, black
lung, and asset retirement obligation liabilities. The ratings
reflect Moody's expectation that pension obligations will
represent a small proportion of liabilities assumed and that near-
term service requirements related to these liabilities will be
limited.
Moody's Caa2 rating for the senior secured notes reflects, in
addition to the aforementioned concerns, their structural
subordination to debt at WML or future subsidiaries that will not
be guarantors of the notes. WML's assets generate the majority of
Westmoreland's consolidated EBITDA but WML's debt agreements place
restrictions on dividends that can be paid to the parent, which,
in Moody's opinion, could impair Westmoreland's ability to service
debt at the parent level.
The speculative grade liquidity of SGL-3 reflects Moody's
expectation that Westmoreland will maintain an adequate liquidity
profile over the next 12 months, but that it may have limited
headroom under WML's debt covenants.
Westmoreland's stable outlook reflects its adequate liquidity pro
forma for the new financing arrangements, and margin stability due
to committed sales contracts.
Ratings could be upgraded if leverage is consistently maintained
at below 5x EBITDA, and EBIT to interest tracks above 1.5x (all
ratios include Moody's adjustments).
The ratings could come under pressure if free cash flows are
persistently negative, if liquidity deteriorates, if Debt/ EBITDA
rises above 7.0x or if EBIT margins turn negative.
The principal methodology used in rating Westmoreland was the
Global Mining Industry Methodology, published in May 2009. Other
methodologies used include Loss Given Default for Speculative
Grade Issuers in the US, Canada, and EMEA, published June 2009.
Westmoreland Coal Company, headquartered in Denver, Colorado,
produces sub-bituminous coal and lignite for sale to electric
power plants located near their mines. It owns five surface mines
in Montana, North Dakota, Texas, and Wyoming, and two power
generating assets (ROVA) in North Carolina. For the twelve months
ended September 30, 2011, the company generated $500 million in
revenue and had 390 million tons of proven and probable coal
reserves (all data is historical and excludes the Kemmerer mine).
WESTMORELAND COAL: S&P Affirms 'CCC+' Corporate Credit Rating
-------------------------------------------------------------
Standard and Poor's Rating Services revised its outlook on
Englewood, Co.-based Westmoreland Coal Co. (WLB) to positive from
stable and affirmed its 'CCC+' corporate credit rating on the
company. "At the same time, we revised the issue-level rating on
WLB's existing $150 million senior secured notes to 'CCC+' from
'CCC' as a result of the proposed $130 million add-on. The total
financing amount for the 2018 notes is now $280 million. We also
revised our recovery rating on the notes to '4', indicating that
investors can expect to receive average recovery (30% to 50%) in
the event of a payment default, from '5'," S&P said.
"The outlook revision reflects our expectation that the
acquisition, improved reserve position, and stronger coal pricing
could bring WLB's credit metrics in line with a higher rating over
the next several quarters," said Standard & Poor's credit analyst
Gayle Bowerman. "The revised recovery rating reflects the
company's increased reserve position and asset base following its
acquisition of Kemmerer."
"The rating and outlook for WLB also incorporate the combination
of what we consider to be its 'vulnerable' business risk profile
and 'highly leveraged' financial risk profile (as our criteria
define the terms). The ratings also reflect WLB's high-cost
position in the Powder River Basin (PRB) and Texas, relatively
short reserve life, high customer concentration, challenges posed
by the inherent risks of coal mining, and liquidity that's less
than adequate to meet the company's near-term obligations," S&P
said.
"We anticipate that WLB's 2012 adjusted EBITDA will total about
$120 million as a result of the increased tonnage sold due to the
acquisition and, given our expectations for higher coal demand,
better pricing on its coal contracts. We expect WLB to produce
about 27 million tons of coal (including the contribution from
Kemmerer) -- a 23% increase over 2011. Including the new financing
and additional assumed liabilities, we expect total adjusted debt
around $820 million, with debt to EBITDA of about 6.9x and funds
from operations (FFO) to adjusted debt of about 5%. Per our
criteria, the adjusted debt figure includes the impact of around
$415 million in operating leases, postretirement benefit
obligations, and asset retirement obligations. We expect the
company's credit metrics to improve in 2013 as it integrates the
acquisition and further increase production. We expect 2013
adjusted EBITDA of around $140 million, with adjusted debt to
EBITDA around 5.6x and FFO to adjusted debt of about 7%, which we
view as appropriate for our assessment of WLB's highly leveraged
financial risk profile," S&P said.
"WLB announced its intention to purchase the Kemmerer mine from
Chevron Mining Inc. for $179 million, including $74 million in
cash and the assumption of $118 million in liabilities related to
including post-retirement medical, pension, black lung, and asset
retirement obligations. Kemmerer is a mine-mouth operation, which
positions it as a lower-cost fuel supplier to utility-owned power
plants located near its mines, producing about 4.7 million tons
annually and includes 118 million tons of high heat rate coal
reserves, which sell for a premium under long-term coal contracts.
We view the acquisition positively given that it aligns with the
company's current mine-mouth strategy and we expect it will
contribute approximately $27 million to adjusted EBITDA in 2012,"
S&P said.
"The positive rating outlook reflects our expectations that
profitability will continue to improve over the next several
quarters due to greater production and higher pricing, and that
WLB will continue to strengthen its liquidity position.
Specifically, we expect 2012 adjusted EBITDA to be about $120
million, resulting in adjusted debt to EBITDA of about 6.9x and
FFO to adjusted debt under 10%, driven by the higher debt load
following the additional notes issuance. Our assessment of the
firm's liquidity is less than adequate given that its EBITDA
cushion at the time of covenant step-down is less than 15%," S&P
said.
"A positive rating action could occur if WLB is able to stay in
compliance with its covenants even as step-downs take effect, if
they are able to successfully integrate the acquisition of
Kemmerer as expected, and if they achieve anticipated production
levels. Specifically, we could raise the rating if the company's
EBITDA increases so that it can maintain a cushion of at least 15%
above its financial covenants, which would meet our criteria for
'adequate' liquidity," S&P said.
"We would consider a negative rating action if, as a result of
deterioration in operating performance during the next several
quarters, WLB's credit measures and liquidity position
deteriorated (including the cushion on its financial covenants
declining to less than 10%)," Ms. Bowerman continued. "This could
occur if the economic recovery takes longer than we expect and
coal-powered electricity consumption falls, resulting in a
prolonged decline in coal prices."
WINDOW FACTORY: Sec. 341 Meeting of Creditors Set for Feb. 16
-------------------------------------------------------------
Tiffany Carroll, Assistant U.S. Trustee for Region 15, will
convene a meeting of creditors of The Window Factory, Inc., on
Feb. 16, 2012 at 10:00 a.m. The meeting will be held at:
402 W. Broadway, Emerald Plaza Building
Suite 660 (B), Hearing Room B
San Diego, CA 92101
This is the first meeting of creditors under Section 341(a) of
the Bankruptcy Code.
The meeting offers creditors a one-time opportunity to examine the
Debtors' representative under oath about the Debtors' financial
affairs and operations that would be of interest to the general
body of creditors. Attendance by the Debtor's creditors at the
meeting is welcome, but not required. The meeting may be
continued and concluded at a later date specified in a notice
filed with the U.S. Bankruptcy Court for the Southern District of
New York.
On Dec. 8, 2011, American Integrity Corp., Ajit Ahooja, and Herde
Computer Services signed involuntary Chapter 11 petitions for The
Window Factory, Inc., (Bankr. S.D. Calif. Case No. 11-19842).
Judge Laura S. Taylor presides over the case. Jeffrey D.
Schreiber, Esq., at The Schreiber Law Firm, serves as counsel to
the petitioning creditors, which allege $407,000 in total claims.
WOONSOCKET CITY: Moody's Cuts General Obligation Rating to 'Ba2'
----------------------------------------------------------------
Moody's Investors Service has downgraded the City of Woonsocket's
(RI) underlying General Obligation rating to Ba2 from Ba1. The
outlook is negative. At this time, Moody's has also downgraded the
city's underlying rating on the Rhode Island Health and Education
Building Corporation Bond Issue, Series 2009E to Ba2 from Ba1. The
outlook is negative. All outstanding debt is secured by the city's
general obligation, unlimited tax pledge.
RATINGS RATIONALE
The downgrade to Ba2 rating reflects a continued deterioration of
the city's school operating financial position despite the recent
issuance of deficit bonds due to multiple deficits in previous
years. The negative outlook reflects the city's near-term credit
stress due to the continuation of deficits in the school
unrestricted fund and ongoing underfunding of the locally
administered pension plan.
STRENGTHS
-Improved City financial management practices and oversight
-Demonstrated willingness to increase revenues in a difficult
economic environment
CHALLENGES
-Historic and ongoing deficits in school operations
-Continuing lack of revenue predictability, including the
potential for an additional state aid reduction
-Increasing fixed costs, including debt service and pension
obligations
OUTLOOK:
The negative outlook reflects Moody's belief that the continuation
of deficits in the school unrestricted fund and ongoing
underfunding of the locally administered pension plan will provide
near term credit stress.
What would make the rating move - UP
- Structurally balanced operations and improved reserve liquidity
levels
- Significant reductions in debt burden
What could change the rating - DOWN
- Continued structurally imbalanced operations in the General or
School Unrestricted Funds
- Return to a reliance on cash-flow borrowing
- Significant increases in debt burden
PRINCIPAL METHODOLOGY
The principal methodology used in this rating was General
Obligation Bonds Issued by U.S. Local Governments published in
October 2009.
XODTEC LED: Delays Form 10-Q for November 30 Quarter
----------------------------------------------------
Xodtec LED, Inc., notified the U.S. Securities and Exchange
Commission that the compilation, dissemination and review of the
information required to be presented in the Form 10-Q for the
period ended Nov. 30, 2011, has imposed time constraints that have
rendered timely filing of the Form 10-Q impracticable without
undue hardship and expense to the Company. The Company undertakes
the responsibility to file such report no later than five days
after its original prescribed due date.
About Xodtec LED
Headquartered in Jhonghe City, Taiwan, Xodtec LED, Inc. is a
Nevada corporation incorporated on November 29, 2006, under the
name Sparking Events, Inc. On June 28, 2009, the Company's
corporate name was changed to "Xodtec Group USA, Inc." and on
May 17, 2010, the Company's corporate name was changed to "Xodtec
LED, Inc."
The Company, through its subsidiaries, is engaged in the design,
marketing and selling of advanced lighting solutions which are
designed to use less energy and have a longer life than
traditional incandescent, halogen, fluorescent light sources. The
Company's wholly-owned subsidiaries, Xodtec Technology Co., Ltd.;
Targetek Technology Co., Ltd.; UP Technology Co., Ltd., are
organized under the laws of the Republic of China (Taiwan). The
Company also owns a 35% interest in Radiant Sun Development S.A.,
a company organized under the laws of the Independent State of
Samoa.
As reported in the TCR on Oct. 27, 2011, the Company reported a
net loss of $640,612 on $168,107 of net sales for the three months
ended Aug. 31, 2011, compared with a net loss of $212,144 on
$244,653 of net sales for the same period during the prior year.
The Company's balance sheet at Aug. 31, 2011, showed $1.2 million
in total assets, $2.0 million in total liabilities and a $814,351
total stockholders' deficit.
As reported by the TCR on June 20, 2011, Simon & Edward, LLP, in
City of Industry, California, expressed substantial doubt about
the Company's ability to continue as a going concern, following
the results for the year ended Feb. 28, 2011. The independent
auditors noted that the Company has incurred significant operating
losses, has serious liquidity concerns and may require additional
financing in the foreseeable future.
XZERES CORP: Posts $2.1 Million Net Loss in November 30 Quarter
---------------------------------------------------------------
XZERES Corp. files its quarterly report on Form 10-Q, reporting a
net loss of $2.1 million on $927,451 of revenues for the three
months ended Nov. 30, 2011, compared with a net loss of
$1.3 million on $471,534 of revenues for the three months ended
Nov. 30, 2010.
For the nine months ended Nov. 30, 2011, the Company has reported
a net loss of $5.9 million on $3.3 million of revenues, compared
with a net loss of $3.2 million on $837,403 of revenues for the
nine months ended Nov. 30, 2010.
The Company's balance sheet at Nov. 30, 2011, showed $5.0 million
in total assets, $2.9 million in total liabilities, and
stockholders' equity of $2.1 million.
As reported in the TCR on June 1, 2011, Silberstein Ungar, PLLC,
in Bingham Farms, Michigan, expressed substantial doubt about
XZERES Corp.'s ability to continue as a going concern, following
the Company's results for the fiscal year ended Feb. 28, 2011.
The independent auditors noted that the Company has incurred
losses from operations, has negative working capital, and is in
need of additional capital to grow its operations so that it can
become profitable.
A complete text of the Form 10-Q is available for free at:
http://is.gd/xMG2wN
About XZERES Corp.
Wilsonville, Oregon-basec XZERES Corp. is in the business of
business of designing, developing, and marketing distributed
generation, wind power systems for the small wind (2.5kW-100kW)
market as well as power management solutions.
* Disputed Marriott Deal Threatens Commercial-Mortgage Market
-------------------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that the commercial
real-estate industry has seen more than more than three years of
"tranche warfare" among debtholders who hold various degrees of
risk on mortgages that were sliced up and sold by Wall Street
firms.
* Dewey & LeBoeuf One of Law360's Bankruptcy Group of The Year
--------------------------------------------------------------
Carolina Bolado at Bankruptcy Law360 reports that Dewey & LeBoeuf
LLP attorneys guided Los Angeles Dodgers LLC through its July
Chapter 11 filing, helped insurer Ambac Financial Group Inc.
through its restructuring and were tapped to represent unsecured
creditors in the massive MF Global Holdings Ltd. bankruptcy,
earning the firm a spot among Law360's Bankruptcy Groups of 2011.
* Kirkland & Ellis Among Law360's Bankruptcy Group of 2011
----------------------------------------------------------
Lance Duroni at Bankruptcy Law360 reports that Kirkland & Ellis
LLP's restructuring group recently sealed a landmark environmental
settlement in the reorganization of Tronox Inc. and solidified its
strong reputation in real estate bankruptcies by shepherding the
sale of Innkeepers USA Trust and adjusting to difficult
circumstances on the fly, earning it a place among Law360's
Bankruptcy Groups of 2011.
* BOOK REVIEW: J Beaty and S.C. Gwynne's The Outlaw Bank
--------------------------------------------------------
Authors: Jonathan Beaty and S. C. Gwynne
Publisher: Beard Books, Washington, D.C. 2004 (reprint of book
published by Random House in 1993). 399 pages.
List Price: $34.95 trade paper, ISBN 1-58798-146-7.
Toward the end of their labyrinthine study of an international
financial scam running over 20 years, the authors are prophetic:
"Since none of the rules [allowing for the BCCI scam] have
changed, there is nothing to prevent other BCCIs from springing up
in the artfully created regulatory gaps. And no one in authority
wants the rules to change." The BCCI scam which was disclosed in
the early 1990s prefigured the scams in the field of finance and
investing that have come to light in 2008 and are continuing to be
reported and investigated. The $20 million involved in the BCCI
scandal made it the biggest financial scandal in history up to the
1990s. The investigative reporters Beaty and Gwynne see that BCCI
and the worldwide network of individuals at all levels of private
business and government became exposed because of their excesses.
If they had been less greedy and a little more discreet, the BCCI
operation could likely have continued indefinitely. But this is
how such scandals usually come to an end--the greed becomes
uncontrollable, those involved become reckless. Beaty and Gwynne
track how BCCI originated, how it grew phenomenally, and how it
came apart at the seams.
BCCI stands for Bank of Credit and Commerce. The Pakistani Agha
Hasan Abedi founded the bank in 1972. Promoting it as the Third
World's first multinational bank, he was soon getting involvement
from sponsors and investors throughout the Middle East and in the
United States. Bert Lance, Jimmy Carter's short-lived budget
director, and Clark Clifford, at the time legendary Washington
D.C. "fixer", were early sponsors profiting from BCCI's growth and
connections.
The book grew from the authors reporting on the unfolding BCCI
scandal for Time magazine. This account has more dimensions than
even a long-running investigative journalism report given much
space in a news periodical could hope to deal with. With
unparalleled maneuverability to expose the story from their
association with the major news magazine Time and consummate
investigative journalism skills, Beaty and Gwynne accomplish the
best account possible of the mind-boggling scandal. But as their
prophecy near the end implies, there is no neat conclusion nor
sense of finality to the story. Some of the perpetrators and some
of the enablers such as Clifford have faced prosecution and have
plea bargained or been found guilty. But rather than been brought
to accountability, nearly all those involved have been instead
dispersed to become involved in other enterprises whose bases and
aims are bound to be suspect. Several of the key players who
provided much of the inside information to the dogged authors are
given pseudonyms so as not to put them at risk for reprisals by
any of the dozens of persons involved in BCCI who are going about
their lives as if nothing had happened.
The book is not a reworking or even simple expansion of the
authors' investigative journalism for Time magazine. Even those
familiar with the BCCI story will find the book engaging. With
the colorful characters continually popping up, the high financial
states, international scope, and touches of danger, it reads like
a gripping espionage novel.
Both authors were leaders in investigative reporting in their
careers at Time magazine. Now retired, Jonathan Beaty is writing
a book on the CIA and Middle East arms dealing. S. C. "Sam" Gwynne
was an international banker at one time, and is now executive
editor of Texas Monthly Magazine.
*********
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 2012. 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 ***