/raid1/www/Hosts/bankrupt/TCR_Public/120301.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, March 1, 2012, Vol. 16, No. 60
Headlines
AMBAC FINANCIAL: Offers IRS Deal Ahead of March 13 Hearing
AMBAC FINANCIAL: AAC and Hercules Settle $4.1-Mil. Suit
AMERICAN AIRLINES: Files Formal Schedules of Assets and Debts
AMERICAN AIRLINES: Files Statement of Financial Affairs
AMERICAN AIRLINES: Proposes to Reject Dallas Forth Worth Deals
AMERICAN AIRLINES: Committee Seeks OK for Skadden as Counsel
AMERICAN AIRLINES: Wants Unions to Hasten $1.2BB Cost-Cut Talks
AMERENENERGY GENERATING: Cut by S&P to 'BB'; Outlook Negative
AMERICAN AMEX: Proposes D. Blair Clark as Bankruptcy Counsel
AMERICAN AMEX: Files Lists of Largest Unsecured Creditors
AMERICAN AMEX: Files Schedules of Assets and Liabilities
AMTRUST FINANCIAL: Senior Noteholders' Contribution Claim Nixed
ANGARAKA LIMITED: Files Post-Confirmation Modification to Plan
ARTECITY MANAGEMENT: Wants to Tap Del Vecchio for SDC Claims
ARTECITY MANAGEMENT: Wants to Hire Ferretti for Chubb Dispute
ATLANTIC & PACIFIC: Judge Approves Reorganization Plan
BERNARD L. MADOFF: SEC's Former Top Attorney to Repay $556,000
BIOPURE CORP: Court Spares Asset Buyer From High Contributions
BLUEGREEN CORP: Communities Purchase Price Reduced to $29 Million
BUFFETS INC: Has Until March 18 to File Schedules and Statements
BUFFETS INC: Committee Wants FTI Consulting as Financial Advisor
BUFFETS INC: Committee Taps Otterbourg as Lead Co-Counsel
BUFFETS INC: Creditors Panel Taps Pachulski Stang as Co-Counsel
BUFFETS RESTAURANTS: Taps Deloitte & Touche as Independent Auditor
C&M RUSSELL: Court OKs Kenneth Blake as Accountant
C&M RUSSELL: Court OKs Coldwell Banker as Real Estate Broker
C&M RUSSELL: Wants to Hire Professional Property Manager
CAGLE'S INC: Committee's Financial Advisor Hikes Rates
CAGLE'S INC: Lease Decision Period Extended Until May 16
CAGLE'S INC: Plan Exclusivity Period Extended Until June 15
CAGLE'S INC: Creditors' Proofs of Claim Due April 2
CDC CORP: Court OKs Software Shares Auction, $250MM Opening Bid
CDC PROPERTIES I: Chapter 11 Bankruptcy Case Closed
CITIZENS REPUBLIC: Reports $6.6 Million Net Income in 2011
CITY CAPITAL: Suspending Filing of Reports with SEC
CLAIRE'S STORES: Offering Add'l $100-Mil. of 9% Sr. Secured Notes
CLAIRE'S STORES: S&P Maintains 'B' Rating on First-Lien Notes
CLEAR CHANNEL: Fitch Rates Proposed $1.25-Bil. Sr. Notes at 'B+'
CLEAR CHANNEL: S&P Rates $1.2-Billion Subordinated Notes at 'B'
CLIFFS CLUB: Files for Bankr. to Sell to Carlile, Drop Memberships
COLONY RESORTS: CEO Monahan Resigns; Exec. VP Ciancimino Also Out
COLT DEFENSE: S&P Affirms 'B-' Corporate Credit Rating
CORRECTIONS CORP: Fitch Says Dividend Has No Rating Impact
COUDERT BROTHERS: 2nd Cir. Revives Statek's Malpractice Claim
CROWN MEDIA: S&P Affirms 'B' Corporate; Outlook Positive
DAVID KINGSTON: Bankruptcy Court to Hear Spanish Palms Suit
DEBUT BROADCASTING: Sariah Hopkins Quits as Exec. VP and CFO
DELTA PETROLEUM: Court Approves HYPERAMS as Auctioneer
DELTA PETROLEUM: KPMG LLP OK'd as Audit and Tax Service Provider
DELTA PETROLEUM: Court Sets March 23 as Claims Bar Date
DIPPIN' DOTS: Asks Judge to Reject Bid to CEO Ouster
DIPPIN' DOTS: Wants $2-Mil. Bankruptcy Loan to Avoid Liquidation
DYNEGY INC: Plan Docs. Hearing Again Pushed Back; Now Set March 12
DYNEGY INC: Debtors Ask for Plan Filing Exclusivity Until July 5
DYNEGY INC: Debtor Wants Until June 4 to Decide on Leases
EAGLE POINT: Files Schedules of Assets and Liabilities
EAGLE POINT: Sec. 341 Creditors' Meeting Set for March 21
EDIETS.COM INC: Enters Into Employment Pact with Thomas Connerty
ENER1 INC: Boris Zingarevich Files 15th Amendment to Schedule 13D
ENERGY CONVERSION: Seeks Approval of Employee Incentive Plan
ENERGY CONVERSION: To Auction Solar Biz; No Stalking Horse So Far
FIRSTGOLD CORP: Escapes Dismissal, Agrees With IRS on Timeline
FREEDOM COMMUNICATIONS: Newspaper Carriers to Get $30MM Settlement
GENERAL MARITIME: Creditors Cleared to Vote on Chapter 11 Plan
GENERAL NUTRITION: S&P Raises Corporate Credit Rating to 'BB-'
GENERAL SHOPPING: Fitch Assigns 'B (exp)' Rating to Sub. Notes
GETTY PETROLEUM: Court Approves Ross Rosenthal as Accountants
GETTY PETROLEUM: Judge Grants Temporary Stay on 3rd-Party Suits
GLOBAL AVIATION: Taps Kurtzman Carson as Administrative Agent
GOLDEN STATE: S&P Cuts Rating on $127.1-Mil. Term Notes to 'BB-'
GRUBB & ELLIS: Unsecured Creditors Object to Sale Plan
GTP CELLULAR: Fitch Assigns 'BB-' Rating to $155-Mil. Notes
GUIDED THERAPEUTICS: Submits CE Mark Application for LuViva
GULFMARK OFFSHORE: Moody's Assigns 'B1' Rating to Proposed Notes
GULFMARK OFFSHORE: S&P Rates $300-Mil. Sr. Unsec. Notes at 'BB-'
HARRISBURG, PA: Council Seeks to Reinstate Bankruptcy Appeal
HEALTH INSURANCE: S&P Affirms 'BB+' Financial Strength Rating
H.J. HEINZ: Fitch Assigns Rating to Senior Unsecured Notes
HOLLY ENERGY: S&P Rates $300-Mil. Sr. Unsecured Notes at 'BB-'
HOSTESS BRANDS: B&C Union Fund Opposes Rejection of CBAs
HOTEL AIRPORT: Plan Filing Exclusivity Expires July 31
HOTEL AIRPORT: Wins OK for RS & Associates as External Auditors
IDENTIPHI INC: Jury Slams DLA Piper With $1.3MM Negligence Verdict
INDIANAPOLIS CITY: Moody's Cuts Housing Rev. Bond Rating to 'B1'
INTERPUBLIC GROUP: Fitch Assigns Rating to Senior Unsecured Notes
INTERPUBLIC GROUP: S&P Affirms 'BB+' Corporate Credit Rating
IPC SYSTEMS: S&P Assigns 'B-' Rating to First-Lien Debt Due 2017
JETBLUE AIRWAYS: Fitch Affirms 'B-' Issuer Default Rating
LEHMAN BROTHERS: Court OKs $5-Bil. Reserve for RMBS Claims
LEHMAN BROTHERS: LBI Trustee Taps Lexolution to Provide Staffing
LEHMAN BROTHERS: Deal for HSBC to Return $52MM Approved
LIBERTY BANKERS: A.M. Best Affirms B- Financial Strength Rating
LIMITED BRANDS: S&P Affirms 'BB+' Corporate Credit Rating
LINN ENERGY: S&P Affirms 'B+' Corporate Credit Rating
LOS ANGELES DODGERS: Narrow Down Bidders for MLB Screening
LOUISIANA LOCAL: Moody's Cuts Housing Revenue Bond Rating to 'B2'
MAMMOTH GRADING: Ferguson Dispute Remanded to Bankruptcy Court
MERCED REDEV'T: S&P Cuts Rating on Series 2009A Bonds to 'BB+'
MF GLOBAL: Freeh Sporkin Okayed as Trustee's Regulatory Counsel
MF GLOBAL: Kasowitz Approved as Trustee's Conflicts Counsel
MF GLOBAL: Ch. 11 Trustee Wins OK for FTI as Financial Advisor
MF GLOBAL: Committee Wins OK for Capstone as Financial Advisor
MF GLOBAL: SIPA Trustee Wins OK for Slaughter as English Counsel
MGM RESORTS: Extends Maturity of $1.8BB Credit Facility to 2015
MOUNTAIN PROVINCE: Spin-out of Kennady Diamonds Remains on Track
MSR RESORT: Trump Buys Miami Doral Resort for $150 Million
NIP COMPANY: Files for Chapter 11 in Austin
OILSANDS QUEST: Annual Meeting Scheduled for April 24
OLD CORKSCREW: Fine-Tunes Chapter 11 Plan Documents
ONCOR ELECTRIC: Moody's Affirms 'Caa2'; Outlook Negative
PACIFIC MONARCH: Raymond Gaskill OK'd as Special Timeshare Counsel
PITTSBURGH CORNING: Corning Prices $750-Mil. of Unsecured Notes
QEP RESOURCES: Moody's Assigns 'Ba1' Rating to New Senior Notes
QEP RESOURCES: S&P Rates $500-Mil. Sr. Unsecured Notes at 'BB+'
REALOGY CORP: Incurs $439 Million Net Loss in 2011
REALOGY CORP: Chairman H. Silverman Resigns; R. Smith Takes Over
REGAL ENTERTAINMENT: Reports $40.1 Million Net Income in 2011
RITE AID: Completes Offering of $481-Mil. Senior Notes Due 2020
R.R. DONNELLEY: Fitch Assigns 'BB+' Rating to Note Offering
RR DONNELLEY: S&P Rates $300-Million Unsecured Notes at 'BB+'
SAAB AUTOMOBILE: North America Unit Taps McTevia as Consultant
SEALY CORP: Goldman Sachs Ceases to Hold 5% Equity Stake
SECURITY NATIONAL: U.S. Trustee Unable to Form Committee
SEDGWICK CLAIMS: S&P Affirms 'B+' Counterparty Credit Rating
SKYSHOP LOGISTICS: Suspending Filing of Reports with SEC
SPRINT NEXTEL: Moody's Assigns 'B3' Rating to Proposed Offering
SPRINT NEXTEL: S&P Rates $1-Bil. Sr. Guaranteed Notes at 'BB-'
SWIFT TRANSPORTATION: S&P Rates $200-Mil. Term Loan at 'BB'
TELETOUCH COMMUNICATIONS: Thermo Wants Borrowing Base Changed
TOWN CENTER: Hearing on Value Collateral Plea Set for March 5
TR SHADOW: Court Dismisses Chapter 11 Case
UNITED AIRLINES: Flight Attendants Ratify Contract
US FIDELIS: Wants to Expand David Lander's Scope of Employment
W.R. GRACE: Wins February 2013 Extension of ART Facility
W.R. GRACE: Wins OK of 2nd Try to Tap PwC as Accountant
W.R. GRACE: Paid $19.4 Million to Executives in 2011
WALTER ENERGY: S&P Affirms 'BB-' Corporate Credit Rating
WCA WASTE: S&P Raises Rating to 'B+'; Outlook Stable
WILCOX EMBARCADERO: Taps Hellenic Pacific to Manage Property
WINDSOR PETROLEUM: S&P Cuts Rating on Secured Term Notes to 'B'
WYNDHAM WORLDWIDE: Moody's Rates Pref. Debt Shelf at '(P) Ba2'
XAVIER PS: Inexperience Costs Lawyer to Forfeit Fees
YELLOWSTONE MOUNTAIN: Sumpter Entitled Only to Return of Deposit
* President Obama Defends Auto Bailout, Lashes Out at Critics
* Recent Small-Dollar & Individual Chapter 11 Filings
*********
AMBAC FINANCIAL: Offers IRS Deal Ahead of March 13 Hearing
----------------------------------------------------------
Ambac Financial Group, Inc. submitted to Judge Shelley C. Chapman
of the U.S. Bankruptcy Court for the Southern District of New
York on February 24, 2012, a Third Amended Plan of
Reorganization.
After several months of negotiations, the Debtor, together with
the Official Committee of Unsecured Creditors, Ambac Assurance
Corporation, its Segregated Account, the Office of the
Commissioner of Insurance for the State of Wisconsin, and the OCI
in his capacity as rehabilitator of the Segregated Account, made
a settlement offer to the Internal Revenue Service on Feb. 24,
2012, relating to the dispute regarding the tax treatment of
credit default swaps, which generated approximately $7.3 billion
in net operating losses or NOLs.
On the basis of such settlement offer, the Debtor filed a Third
Amended Plan that sets forth a description of the settlement
offer to the IRS, certain provisions to the Amended Plan
Settlement with respect to outstanding tax and expense-related
issues between AFG and AAC, and certain other changes.
"Successful resolution of this long-standing dispute with the IRS
is a condition precedent to consummation of the Amended Plan,"
the Debtor said in a Feb. 27, 2012 statement.
In also a Feb. 27 statement, the Rehabilitator said he believes
the Offer is in the best interest of policyholders and other
creditors of the Segregated Account as it represents an important
incremental step in furtherance of the rehabilitation process by
resolving all related litigation with the IRS, eliminating
uncertainty and avoiding further legal costs.
IRS Settlement
AFG Senior Managing Director and General Counsel Stephen M.
Ksenak cites the principal terms of the Offer Letter:
(i) AAC will pay the IRS approximately $100 million, as
permitted by the Mediation Agreement under the Plan;
(ii) the Debtor will pay the IRS approximately $1.9 million in
connection with the IRS Claims;
(iii) the Debtor's consolidated tax group will relinquish its
claim to all loss carry-forwards resulting from losses on
credit default swap contracts and arising on or before
December 31, 2010 to the extent such loss carry-forwards
exceed $3.4 billion; and
(iv) the IRS will be paid 12.5% of any payment to the Debtor by
AAC associated with NOL Usage Tier C as defined in the
Amended Tax Sharing Agreement and the IRS will be paid
17.5%of any payment to the Debtor by AAC associated with
NOL Usage Tier D as defined in the Amended TSA.
The Debtor made clear that IRS has not yet accepted the Offer.
The Debtor also clarifies that there are no assurances the Offer
will be accepted, the final terms of any settlement will not
change, or that a settlement can be finalized within a certain
period of time. Finality of the settlement will require the
satisfaction of certain conditions and the receipt of certain
approvals, including approvals by the Bankruptcy Court and the
Circuit Court of the State of Wisconsin, Dane County, which
oversees the rehabilitation of the Segregated Account.
Pending finalization of the IRS Settlement and regardless of
entry of the Confirmation Order, the Debtor will not consummate
the Plan; will not make any distributions to Holders of Claims or
Equity Interests outside of the ordinary course of business; nor
file a motion pursuant to Rule 9019 of the Federal Rules of
Bankruptcy Procedure requesting approval of the IRS Settlement
without the U.S. Government's prior written approval, says Mr.
Ksenak.
Mr. Ksenak also clarifies that no provision of the Disclosure
Statement, Plan, or Confirmation Order will impair, change, or
modify the IRS's rights in connection with the IRS Dispute and no
statements or assertions by the Debtor in the Disclosure
Statement, Plan, or any other pleading will be deemed to estop
the IRS from asserting any arguments in the IRS Dispute,
particularly with respect to the NOLs or tax refunds. Moreover,
confirmation of the Plan and entry of the Confirmation Order will
be without prejudice to the IRS in the IRS Dispute, he adds.
Other Plan Modifications
(1) The relevant changes to the Amended Plan Settlement include
these terms:
* The portion of any net operating losses or NOLs during the
taxable year 2011 will be allocated to either the Pre-
Determination Date NOLs or the Post-Determination Date NOLs
on the basis of a deemed closing of the books and records
of the AAC Subgroup and members of the Ambac Consolidated
Group.
The Pre-Determination NOLS refer to certain NOLs generated
by the Ambac Consolidated Group on or before September 30,
2011, not taking into account the consequences of any
settlement with respect to the IRS Dispute. Any NOLs
generated by the AAC Subgroup determined on a separate
company tax basis after the Determination Date will mean
the Post-Determination Date NOLs, which will be available
for use by the AAC Subgroup at no cost.
The AAC Subgroup refers to the subgroup of Affiliates,
created pursuant to an amendment to the Tax Sharing
Agreement entered into on June 7, 2010, of which AAC is the
common parent, that are members of the Ambac Consolidated
Group.
* The cash portion of Pre-Determination NOLs allocated to
the AAC Subgroup is amended from $3.8 billion to
$3.65 billion.
* Prior to a Deconsolidation Event, the Debtor and any AFGI
Subsidiary will be able to utilize NOLs of the Group in an
amount equal to the AFGI NOL Amount, and following a
Deconsolidation Event, the Ambac Consolidated Group will be
able to utilize the aggregate amount of the Ambac
Consolidated Group's NOLs, other than the Post-
Deconsolidation Allocated NOL Amount and the Post-
Determination Date NOLs to the fullest extent permitted by
the Internal Revenue Code without limitation or any
requirement to pay or otherwise compensate AAC or any AAC
Subsidiary.
* If AAC or the Rehabilitator believes that a Deconsolidation
Event or Adjustment Event may have occurred in a taxable
period for which no election or protective election was
made pursuant to Section 1.1502-36 of the Treasury
Regulations, and if AAC or the Rehabilitator desires to
obtain relief from the IRS for the failure to make such an
election, the Debtor or the Reorganized Debtor will
reasonably cooperate with AAC and the Rehabilitator in
obtaining such relief; provided, that (i) any costs
incurred in connection with obtaining any such relief will
be borne solely by AAC and (ii) the Debtor or the
Reorganized Debtor, as applicable, is permitted to review
and comment on any written materials provided to the IRS
with respect to such relief and attend any meetings or
participate in any other communication with the IRS.
(2) The Debtor, the Creditors' Committee, AAC, the Segregated
Account, and the Rehabilitator entered into a "Ruling Request
Agreement," which is filed as an exhibit to the Plan.
(3) Following the Confirmation Date, approximately every 180
days, but no more than every 210 days, each of the
Professionals will file with the Court an application for
interim Court approval and allowance of the compensation and
reimbursement of expenses requested.
If, prior to consummation of the Plan, it appears that there
will be insufficient funds in the Debtor's estate to pay
Allowed Administrative Claims in accordance with the Plan,
the professionals will discuss methods of reducing Claims for
Accrued Professional Compensation.
(4) The discharge, release, and injunction provisions contained
in the Plan and Confirmation Order are not intended and will
not be construed to bar the U.S. Government from, subsequent
to entry of the Confirmation Order, pursuing any police or
regulatory action.
A full-text copy of the Plan dated February 24, 2012 is available
for free at: http://bankrupt.com/misc/Ambac_Feb24Plan.pdf
A blacklined version of the February 24 Plan is available for
free at: http://bankrupt.com/misc/Ambac_Feb24Plan_blacklined.pdf
March 13 Plan Confirmation Hearing Set
Judge Chapman will consider confirmation of the Third Amended
Plan on March 13, 2012.
Objections to confirmation of the Plan must be filed no later
than February 29.
The Plan voting deadline remains set for February 29.
About Ambac Financial
Ambac Financial Group, Inc., headquartered in New York City, is a
holding company whose affiliates provided financial guarantees and
financial services to clients in both the public and private
sectors around the world.
Ambac Financial filed a voluntary petition for relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No.
10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will
continue to operate in the ordinary course of business as "debtor-
in-possession" under the jurisdiction of the Bankruptcy Court and
in accordance with the applicable provisions of the Bankruptcy
Code and the orders of the Bankruptcy Court.
Ambac's bond insurance unit, Ambac Assurance Corp., did not file
for bankruptcy. AAC is being restructured by state regulators in
Wisconsin. AAC is domiciled in Wisconsin and regulated by the
Office of the Commissioner of Insurance of the State of Wisconsin.
The parent company is not regulated by the OCI.
Ambac's consolidated balance sheet -- which includes non-debtor
Ambac Assurance Corp -- showed US$30.05 billion in total assets,
US$31.47 billion in total liabilities, and a US$1.42 billion
stockholders' deficit, at June 30, 2010.
On an unconsolidated basis, Ambac said in a court filing that
it has assets of (US$394.5 million) and total liabilities of
US$1.6826 billion as of June 30, 2010.
Bank of New York Mellon Corp., as trustee to seven different types
of notes, is listed as the largest unsecured creditor, with claims
totaling about US$1.62 billion.
Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L.
Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's
bankruptcy counsel. The Blackstone Group LP is the Debtor's
financial advisor. Kurtzman Carson Consultants LLC is the claims
and notice agent. KPMG LLP is tax consultant to the Debtor.
Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller,
Esq., at Morrison & Foerster LLP, in New York, serve as counsel
to the Official Committee of Unsecured Creditors. Lazard Freres
& Co. LLC is the Committee's financial advisor.
Ambac Financial disclosed Feb. 16 that, in order to give it
additional time to negotiate a final settlement of its dispute
with the Department of the Treasury -- Internal Revenue Service,
the voting deadline relating to the Second Amended Plan of
Reorganization of Ambac Financial dated Sept. 30, 2011 has been
extended to Feb. 29, 2012 at 5:00 p.m. (prevailing Pacific Time)
and the Plan objection deadline has been extended to Feb. 29, 2012
at 4:00 p.m. The Bankruptcy Court hearing relating to the
confirmation of the Plan remains scheduled for March 13, 2012.
Bankruptcy Creditors' Service, Inc., publishes Ambac Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Ambac Financial Group and the restructuring proceedings of
Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945-
7000).
AMBAC FINANCIAL: AAC and Hercules Settle $4.1-Mil. Suit
-------------------------------------------------------
The city of Hercules and Ambac Assurance Corporation have reached
a settlement resolving a $4.1 million lawsuit,
www.HerculesPatch.com reported.
"It was a very complicated negotiation, with all parties doing
their best to protect their interests and their rights," City
Manager Steve Duran said in an e-mail announcing the settlement
to www.HerculesPatch.com. Details on the agreement were not
provided, according to the report.
AAC sued the City's redevelopment agency to recover $4.1 million
in tax increments collected in December. The City also failed to
make a Feb. 1 bond interest payment to AAC, forcing the bond
insurer to foot the bill and pay out bondholders, said the
report. If the bond insurer prevailed in the lawsuit, it would
have led to the City's bankruptcy, the report continued.
In light of the settlement, AAC will be asked to "dismiss the
lawsuit without prejudice, which means it could be brought again
if the terms of the settlement are breached," Mr. Duran said, the
report relayed.
About Ambac Financial
Ambac Financial Group, Inc., headquartered in New York City, is a
holding company whose affiliates provided financial guarantees and
financial services to clients in both the public and private
sectors around the world.
Ambac Financial filed a voluntary petition for relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No.
10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will
continue to operate in the ordinary course of business as "debtor-
in-possession" under the jurisdiction of the Bankruptcy Court and
in accordance with the applicable provisions of the Bankruptcy
Code and the orders of the Bankruptcy Court.
Ambac's bond insurance unit, Ambac Assurance Corp., did not file
for bankruptcy. AAC is being restructured by state regulators in
Wisconsin. AAC is domiciled in Wisconsin and regulated by the
Office of the Commissioner of Insurance of the State of Wisconsin.
The parent company is not regulated by the OCI.
Ambac's consolidated balance sheet -- which includes non-debtor
Ambac Assurance Corp -- showed US$30.05 billion in total assets,
US$31.47 billion in total liabilities, and a US$1.42 billion
stockholders' deficit, at June 30, 2010.
On an unconsolidated basis, Ambac said in a court filing that
it has assets of (US$394.5 million) and total liabilities of
US$1.6826 billion as of June 30, 2010.
Bank of New York Mellon Corp., as trustee to seven different types
of notes, is listed as the largest unsecured creditor, with claims
totaling about US$1.62 billion.
Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L.
Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's
bankruptcy counsel. The Blackstone Group LP is the Debtor's
financial advisor. Kurtzman Carson Consultants LLC is the claims
and notice agent. KPMG LLP is tax consultant to the Debtor.
Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller,
Esq., at Morrison & Foerster LLP, in New York, serve as counsel
to the Official Committee of Unsecured Creditors. Lazard Freres
& Co. LLC is the Committee's financial advisor.
Ambac Financial disclosed Feb. 16 that, in order to give it
additional time to negotiate a final settlement of its dispute
with the Department of the Treasury -- Internal Revenue Service,
the voting deadline relating to the Second Amended Plan of
Reorganization of Ambac Financial dated Sept. 30, 2011 has been
extended to Feb. 29, 2012 at 5:00 p.m. (prevailing Pacific Time)
and the Plan objection deadline has been extended to Feb. 29, 2012
at 4:00 p.m. The Bankruptcy Court hearing relating to the
confirmation of the Plan remains scheduled for March 13, 2012.
Bankruptcy Creditors' Service, Inc., publishes Ambac Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Ambac Financial Group and the restructuring proceedings of
Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945-
7000).
AMERICAN AIRLINES: Files Formal Schedules of Assets and Debts
-------------------------------------------------------------
A. Real Property
Fee Simple
Miami Office $9,383,403
London Residence 1,861,972
6.3 Acres, South Credit Union 1,232,668
Centro Letonia Torre ING 686,916
Southwestern Reservations Office 29,931
Tulsa APU Facility 18,412
Tulsa Composite Shop/Warehouse 7,772
Office Building - 1st and 2nd Floor Undetermined
Office Building and Parking Spots Undetermined
Storage Facility Undetermined
B. Personal Property
B.1 Cash on hand
Systemwide Station Petty Cash and Working Funds 530,422
B.2 Bank Accounts
JP Morgan Chase 1,072,166,959
Banco Mercantil 69,367,279
Corp Banca, C.A. 12,413,530
CIBC-Canadian Imperial Bank Commerce 10,171,016
Citibank N.A. 9,081,373
Banesco Banco Universal 8,554,076
Banco De Venezuela 7,797,701
Natwest 6,618,840
Others 94,130,232
See http://bankrupt.com/misc/AmAirB2BankAccts.pdf
B.3 Security Deposits with public utilities
Purchase Equipment Deposits
(Boeing and Airbus) 846,991,445
Secured Cash Collateral Deposit
(U.S. Bank, N.A.) 41,450,000
Other Deposits 10,555,064
Security Deposits 7,389,726
Fuel Deposits 3,322,001
Provisional Deposits 2,893,896
Reserve Deposits (Airports) 1,640,270
Utility Deposits 882,450
Warranty Deposits 348,579
Guaranty Deposits 649,861
Rent Deposits 157,959
B.4 Household goods 0
B.5 Books
Artwork and Collectibles 1,280,727
B.6 Wearing apparel 0
B.7 Furs and jewelry 0
B.8 Firearms and sports 0
B.9 Interests in insurance policies 0
B.10 Annuities 0
B.11 Interests in an education IRA 0
B.12 Interests in IRA/ERISA/Koegh/other pension plans 0
B.13 Stock and interests Undetermined
See http://bankrupt.com/misc/AmAirB13Interests.pdf
B.14 Interests in partnerships or joint ventures 3,973,332
B.15 Government and corporate bonds 3,361,330,157
See http://bankrupt.com/misc/AmAirB15Bonds.pdf
B.16 Accounts receivable
Credit Cards Receivable 428,932,662
AAdvantage Receivable 117,219,867
Trade Receivable - Net 112,575,177
Interline Receivable 81,439,876
Intercompany Receivable - SC Investment, Inc. 43,284,220
Texas Aero Engine Service LLC
Long Term Inventory Receivable 41,240,736
Intercompany Receivable - AA Real Estate
Holding L.P. 38,491,474
Intercompany Receivable - American Eagle
Holding Corporation 21,042,220
Intercompany Receivable - American
Aviation Supply Llc 20,104,526
Intercompany Receivable - Americas Ground
Services, Inc. 16,435,535
Sky Chef Long Term Receivable 15,609,544
VAT 13,036,270
Intercompany Receivable - AA Division De
Servicios Aero 11,895,382
Others 120,263,430
See http://bankrupt.com/misc/AmAirB16AcctReceivable.pdf
B.17 Alimony, maintenance support, prop. settlements 0
B.18 Other liquidated debts
Various Insurance Claims for Recovery of
Property Damage 1,087,014,937
Sales Tax on Fuel 41,177,707
Sales Tax on Utilities 9,206,721
Federal Insurance Contributions Act
Refund on Severance Benefits 7,489,645
Payroll Tax Refund 3,302,227
Real and Personal Property Taxes 2,712,000
Interest on Payroll and Tax Refunds 2,195,771
Hotel Occupancy Tax 1,307,413
Fuel Excise Tax 849,991
Federal Unemployment Tax Act Refund 549,810
Income Tax Refund on Loss Carrybacks
from 2004 and 2005 353,984
Income Tax Credit for Development of
JFK Airport Undetermined
Sales and Use Taxes on Goods and Services Undetermined
B.19 Equitable or future interests 0
B.20 Contingent and non-contingent interests 0
B.21 Other contingent and unliquidated claims 0
B.22 Patents, Copyrights and Other Intellectual Property
See http://bankrupt.com/misc/AmAirB22Patents.pdf
B.23 Licenses, franchises and other general intangibles
Non-Amortizing Routes 686,443,093
Amortizing Airport Slots 150,532,756
Amortizing Gates 47,919,458
Non-Amortizing Airport Slots 20,431,453
Various State Alcohol Licenses Undetermined
B.24 Customer lists or other compilations 0
B.25 Automobiles, trucks, trailers, and other vehicles 0
B.26 Boats, motors and accessories 0
B.27 Aircraft and accessories
Airframe-owned 9,068,814,083
Engines-owned 1,861,027,789
Flight assemblies 305,140,902
Airframe-capital lease 253,662,572
Flight construction work-in-progress 181,522,357
Improvements on leased aircraft 122,918,152
Engines-capital lease 72,316,087
Capitalized interest 49,338,448
B.28 Office equipment, furnishings, and supplies
Ground construction work-in-progress 128,833,088
Software 40,434,588
Computer Equipment - capital lease 26,265,808
Computer Equipment 24,111,223
Furniture & Office Equipment 17,090,884
B.29 Machinery, fixtures, equipment and supplies
Ground Equipment 97,280,405
Ramp Equipment-Motorized 19,165,522
Line Maintenance Tooling 14,398,639
Flight Training Equipment 14,632,053
Ramp Equipment-Nonmotorized 3,121,466
Ground Vehicles/Equipment 2,437,167
M&E Equipment 2,471,821
B.30 Inventory
Expendable and Rotable Parts, Net 812,699,453
Obsolescence Reserve Spare Parts (510,628,050)
Jet Aircraft Fuel Inventory 205,622,076
General Materials and Supplies 72,472,059
Passenger Supplies 4,083,885
Ground Fuel Inventory 1,634,091
B.31 Animals 0
B.32 Crops 0
B.33 Farming equipment 0
B.34 Farm supplies 0
B.35 Other personal property
Special Facility Revenue Bonds - Leasehold
Improvements 975,965,292
Leasehold Improvements 680,884,420
Fuel Swaps/Options 206,188,613
Prepaid Rent - Special Facility Revenue Bonds 175,610,646
Prepaid Fuel Vendors 152,218,952
Special Facility Revenue Bonds and Debt
Reserve Funds - Airports 146,226,703
Unamortized Special Facility Revenue Bonds
and Debt Issue Costs 131,732,438
Prepaid Credit Card Fees 62,136,837
Deferred Charge Revenue Guarantee 54,189,474
Others 157,999,890
See http://bankrupt.com/misc/AmAirB35OtherPersonalProp.pdf
TOTAL SCHEDULED ASSETS $24,363,995,707
===========================================================
C. Property Claimed as Exempt N/A
D. Creditors Holding Secured Claims
Various Lenders - Mortgage Financing $4,514,956,852
US Bank NA - Enhanced Equipment Trust
Certificates 1,984,858,300
US Bank NA - 7.5% Senior Secured Notes 1,015,416,666
Citicorp Credit Services - Aadvantage
Forward Sale 913,175,441
See http://bankrupt.com/misc/AmAirSchedDAttachment.pdf
E. Creditors Holding Unsecured Priority Claims
Taxes and Certain Other Debts Owed to
Governmental Units 21,217,360
See http://bankrupt.com/misc/AmAirSchedE1Taxes.pdf
F. Creditors Holding Unsecured Nonpriority Claims
Trade Payables 3,493,277,121
See http://bankrupt.com/misc/AmAirSchedF1TradePayables.pdf
Litigation Undetermined
See http://bankrupt.com/misc/AmAirSchedF2Litigation.pdf
Tax Exempt Bonds 3,282,840,256
See http://bankrupt.com/misc/AmAirF3TaxExemptBonds.pdf
Notes 104,956,286
See http://bankrupt.com/misc/AmAirSchedF4Notes.pdf
Other Payables Undetermined
See http://bankrupt.com/misc/AmAirF5OtherPayables.pdf
Insurance Undetermined
See http://bankrupt.com/misc/AmAirF6Insurance.pdf
Environmental Undetermined
See http://bankrupt.com/misc/AmAirF7EnvlClaims.pdf
TOTAL SCHEDULED LIABILITIES $15,330,698,287
===========================================================
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 AIRLINES: Files Statement of Financial Affairs
-------------------------------------------------------
American Airlines, Inc., reported income from the operation of its
business, mainly from passenger/freight/mail/operating revenue,
during the two years immediately preceding the Petition Date:
Income Period
------ ------
$21,948,133,621 YTD 11/29/11
$22,126,912,939 FYE 2010
$19,883,465,107 FYE 2009
American Airlines Managing Director for Corporate Accounting James
B. Burnett disclosed that the Debtor received income other than
from the operation of its business, specifically from interest
income, during the two years immediately preceding the Petition
Date:
Income Period
------ ------
$23,596,876 YTD 11/29/11
$25,295,861 FYE 2010
$35,100,821 FYE 2009
Mr. Burnett stated that the Debtor made payments to various
creditors within 90 days immediately before the Petition Date. A
schedule of the 90-day payments is available for free at:
http://bankrupt.com/misc/AmAirSofA3b.pdf
Mr. Burnett further disclosed that the Debtor made payments within
one year immediately preceding the Petition Date to or for the
benefit of creditors who are or were insiders. A schedule of the
payments is available for free at:
http://bankrupt.com/misc/AmAirSofA3c.pdf
The Debtor is party to various lawsuits and administrative
proceedings within a year immediately preceding the Petition Date.
A schedule of the lawsuits is available for free at:
http://bankrupt.com/misc/AmAirSofA4a.pdf
In the ordinary course of business, AMR Corp. and certain of its
subsidiaries may return goods received to the seller in exchange
for a refund or credit. Likewise, AMR and certain of its
subsidiaries may place various aircraft parts or other assets with
custodians in the ordinary course of business.
The Debtor made gifts or charitable contributions within one year
immediately preceding the Petition Date:
Name of Organization Date of Gift Value of Gift
-------------------- ------------ -------------
Children's Museum 2011 $150,000
Tulsa Air and Space Museum 2011 150,000
Tulsa Tech Center 2011 150,000
Seven Donations Various 360,000
13 Donations Various 154,326
71 Donations Various 166,941
The Debtor made payments totaling $12,375,700 relating to debt
counseling or bankruptcy to these professionals within one year
immediately before the Petition Date:
Professional Amount Paid
------------ -----------
Paul Hastings $2,000,000
Rothschild 1,090,000
Weil Gotshal Manges 7,665,000
Deloitte Financial Advisory 681,532
Skyworks Capital, LLC 456,982
Groom Law Group 197,726
Perella Weinberg Partners 142,500
2020 Venture Partners, LLC 75,000
Debevoise & Plimpton LLP 66,960
The Debtor also listed financial accounts which were closed, sold
or otherwise transferred within one year immediately preceding the
Petition Date:
Name of Institution Amt. of Final Balance
------------------- --------------------
Citibank, N.A. $71,461
Central European International Bank Ltd. 4,974
Barbados National Bank 3,095
Comerica Bank 0
JPMorgan Chase Bank 0
KeyBank National Association 0
PNC Financial Services Group 853
PNC Financial Services Group 737
The Debtor holds or controls property for another person. A
schedule of the properties is available for free at:
http://bankrupt.com/misc/AmAirSofA14.pdf
The Debtor's bookkeepers and accountants who within the two years
immediately preceding the Petition Date kept or supervised the
keeping of books and records are:
Name Period
---- ------
Isabella D. Goren July 2010 to present
Thomas W. Horton March 2006 to July 2010
Ernst & Young is the Debtor's auditor within two years preceding
the Petition Date. The Debtor's books of account and records are
in possession of Ms. Goren.
Mr. Burnett disclosed that the last two inventories taken of the
Debtor's property, the name of the person who supervised the
inventories, and the value of each inventory are:
Date of Inventory Value of
Inventory Supervisor Inventory
--------- ---------- ---------
Ongoing (Expendables Jeff McCowan $889,255,397
and Rotables)
Monthly (Jet Fuel) Phil Welch $207,256,167
Each Inventory Supervisors is in possession of the records of the
inventory he has taken.
These officers own, control or hold 5% or more of the voting or
equity securities of the Debtor:
Nature and %
Name Title of Stock ownership
---- ----- ------------------
AMR Corporation Shareholder 100%
Thomas W. Horton Chairman of the Board, N/A
President and Chief
Executive Officer
Alberto Ibarguen Director N/A
Ann M. Korologos Director N/A
Armando M. Codina Director N/A
John W. Bachmann Director N/A
Judith Rodin Director N/A
Matthew K. Rose Director N/A
Michael A. Miles Director N/A
Philip J. Purcell Director N/A
Ray M. Robinson Director N/A
Roger T. Staubach Director N/A
Stephen M. Bennett Director N/A
Daniel P. Garton Executive Vice President N/A
Robert W. Reding Executive Vice President No longer
and Chief Operating Officer employed by
Debtors
Craig S. Kreeger Senior Vice President N/A
Gary F. Kennedy Senior Vice President, N/A
General Counsel and
Chief Compliance Officer
Isabella D. Goren Senior Vice President N/A
and Chief Financial Officer
James B. Ream Senior Vice President N/A
Jeffrey J. Brundage Senior Vice President N/A
Monte E. Ford Senior Vice President and No longer
Chief Information Officer employed by
Debtors
Peter J. Dolara Senior Vice President N/A
Tom R. Del Valle Senior Vice President N/A
Virasb Vahidi Senior Vice President N/A
William K. Ris Jr. Senior Vice President N/A
Beverly K. Goulet Treasurer N/A
Kenneth W. Wimberly Corporate Secretary N/A
The Debtor's former officers are:
Name Title
---- -----
David L. Boren Director
Gerard J. Arpey Chairman and Chief Executive
Officer
Rajat K. Gupta Director
The Debtor also prepared a list of withdrawals or distributions
credited or given to an insider, including compensation in any
form, bonuses, loans, stock redemptions, options exercised and any
other perquisite during one year immediately preceding the
Petition Date. The list is available for free at:
http://bankrupt.com/misc/AmAirSofA23.pdf
The Debtor has been contributing to several pension funds at any
time within six years immediately before the Petition Date. A
list of the pension fund contributions is available for free at:
http://bankrupt.com/misc/AmAirSofA25.pdf
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 AIRLINES: Proposes to Reject Dallas Forth Worth Deals
--------------------------------------------------------------
AMR Corp. and its debtor affiliates seek authority from Judge Sean
Lane of the U.S. Bankruptcy Court for the Southern District of New
York to reject facilities agreements relating to revenue bonds
issued in connection with the financing of the costs of
acquisition, construction, equipment, and improvement by American
Airlines of certain airport facilities located at the Dallas/Fort
Worth International Airport and the Alliance Airport.
American Airlines is a party to seven facilities agreement with
the Dallas/Fort Worth International Airport Facility Improvement
Corporation and two facilities agreements with AllianceAirport
Authority, Inc.
According to the Debtors, under the facilities agreements,
American make payments on revenue bonds, totaling $1 billion, that
financed the airport. The Debtors believe the facilities
agreements are not executory contracts but are unsecured
obligations of the Debtors.
Phil Villaluz, managing director of municipal research at Sterne
Agee & Leach Inc. in New York, told Bloomberg News that American's
rejection of the facilities agreements may just be a negotiating
tactic to get better terms.
Sean Collins, an AMR spokesman, said in an e-mail sent to
Bloomberg, that the motion to reject the special facility revenue
bond facilities agreements at DFW and AFW does not relate to the
airline's leases of space and premises at those airports. In
court papers, the Debtors say American Airlines' right to lease
and use the premises and projects financed with the special
facilities revenue bonds are governed by separate lease
agreements.
Bloomberg noted that prices rose for some American-backed bonds
for Dallas-Fort Worth, after falling as much as 68% following
AMR's Chapter 11 bankruptcy filing Nov. 29. A bond maturing in
May 2029 traded at an average of 26.75 cents on the dollar on Feb.
25, up from 26 cents on the dollar on Feb. 2, Bloomberg said.
According to Bloomberg, AMR and American sold the tax-exempt
facilities bonds through airports and municipal authorities to pay
for things like maintenance hangars in New York, Los Angeles,
Dallas and other cities. About $3.2 billion of the debt was
outstanding when American filed for bankruptcy.
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 AIRLINES: Committee Seeks OK for Skadden as Counsel
------------------------------------------------------------
The Official Committee of Unsecured Creditors in AMR Corp.'s cases
seeks the Bankruptcy Court's authority to retain Skadden, Arps,
Slate, Meagher & Flom LLP and affiliates as its counsel, nunc pro
tunc to December 5, 2011.
As counsel, Skadden Arps will:
(a) advise the Committee regarding its rights, powers, and
duties in the Chapter 11 Cases;
(b) assist and advise the Committee in its consultations with
the Debtors concerning the administration of the Chapter
11 Cases;
(c) assist and advise the Committee in its investigation of
the acts, conduct, assets, liabilities, and financial
condition of the Debtors, the operation of the Debtors'
business and the desirability of the continuance of the
business;
(d) assist the Committee, as applicable, in the formulation,
review, analysis and negotiation of any plan of
reorganization that may be filed and assist the Committee,
as applicable, in the formulation, review, analysis and
negotiation of the disclosure statement accompanying any
plan of reorganization;
(e) assist the Committee in preparing pleadings and
applications including, if applicable, any request for
appointment of a trustee or examiner under Section 1104 of
the Bankruptcy Code;
(f) represent the Committee at court hearings and proceedings;
(g) assist the Committee in the review, analysis, and
negotiation of any financing agreements;
(h) assist and advise the Committee as to its communications
with its constituents regarding significant matters in
these cases, including but not limited to communications
required under Section 1102(b)(3) of the Bankruptcy Code;
and
(i) review and analyze motions, applications, orders,
statements of operations and schedules filed with the
Court and advise the Committee as to their propriety.
Under an engagement agreement, Skadden, Arps and the Committee
have agreed that the firm's standard bundled rate structure will
apply to the Debtors' Chapter 11 cases. The current hourly rates
under the standard bundled rate structure range from $840 to
$1,150 for partners, $815 to $895 for counsel, $365 to $755 for
associates and $195 to $310 for legal assistants and support
staff.
John Wm. Butler, Esq., a partner at Skadden, Arps, Slate, Meagher
& Flom LLP, in New York, assures the Court that his firm is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code and does not represent any interest adverse
to the Committee, the Debtors, and their estates.
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 AIRLINES: Wants Unions to Hasten $1.2BB Cost-Cut Talks
---------------------------------------------------------------
AMR Corp.'s American Airlines, Inc., urged its unions to speed up
talks to secure $1.2 billion in labor cost reduction for the
carrier to emerge successfully from restructuring, Mary
Schlangenstein of Bloomberg News reported.
American said union leaders should recognize the urgency of the
situation and the need to reach agreements in "a matter of weeks,"
in comments posted on a negotiations Web site, Bloomberg relayed.
"Our challenge is clear -- work quickly to restructure our
contracts, achieve the targeted cost savings and begin
implementing the changes so we can emerge from restructuring in
the near term," Bloomberg quoted American as saying. Remaining on
the current path will "jeopardize our business plan and ultimate
success," the carrier was quoted as saying.
Bloomberg noted that if the carrier fails to reach agreements with
the unions, American can ask the court overseeing its bankruptcy
case to void current contracts and impose the new terms, which it
outlined on Feb. 1.
Meanwhile, American rejected proposals from two unions that aimed
to reduce the carrier's 13,000 planned job cuts, Bloomberg
continued. In response to early-out plans offered by the
Association of Professional Flight Attendants and the Transport
Workers Union, American asserted that the early-out incentives
would significantly increase costs and do not address the
company's need for sustainable cost savings and efficiency, the
report disclosed.
Under the APFA proposal, full pensions and medical coverage to as
many as 3,000 workers retiring early, Bloomberg related. The AFPA
also noted that its proposal will allow American to immediately
begin hiring 500 new workers at lower salaries, the report
continued. American will cut 2,300 jobs from among the 16,000
attendants represented by the union, the report noted. Amidst
lay-offs and pay cuts, the APFA recently reelected Laura Glading
to lead the union, Associated Press said in another report.
The TWU, which represents mechanics, baggage handlers and
other airport ground workers, proposed a one-time payment of
$75,000 and certain health and other benefits for members who
chose to leave, Bloomberg stated. American's plan will affect
8,800 jobs within the union, which represents more than 23,000
workers, the report noted.
American said it was willing to consider other plans to reduce the
number of involuntary terminations as long as they do not worsen
the carrier's cost structure, Bloomberg said. American wants to
place some jobs with third-party vendors, freeze pensions, extend
work hours and make other changes to reduce labor costs that it
has said are $800 million above those
of its peers, the report added.
American is also in talks with the Allied Pilots Association,
whose board has said it wants American to freeze pensions instead
of terminating them, Bloomberg said.
In a Feb. 21, 2011 letter to employees, American Chief Commercial
Officer Virasb Vahidi said American's plan to secure $1 billion in
new annual revenue after leaving bankruptcy is built upon securing
the $1.25 billion in labor cuts and $750 million in other cost
reductions, Bloomberg added.
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).
AMERENENERGY GENERATING: Cut by S&P to 'BB'; Outlook Negative
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior unsecured debt ratings on AmerenEnergy Generating Co.
(GenCo) to 'BB' from 'BBB-'. The rating outlook on GenCo is
negative. "We assigned a '3' recovery rating to GenCo's senior
unsecured debt, indicating expectations of meaningful (50%-70%)
recovery in the event of payment default. At the same time, we
affirmed our 'BBB-' corporate credit ratings and positive outlook
on Ameren Corp. and its other subsidiaries, Ameren Illinois Co.
and Ameren Missouri," S&P said.
"The 'BB' corporate credit rating on GenCo reflects our view that
Ameren Corp.'s long-term economic incentive to support GenCo has
weakened due to the sharp decline in forward power pricing.
Furthermore, the parent company's recent decision to reduce its
capital spending at GenCo by decelerating construction on the
Newton Energy Center scrubber project reinforces our view that
management's support for the merchant business is limited.
Although Ameren could theoretically support GenCo during a period
of financial stress, we believe that it would not do so to the
detriment of the regulated utilities. As such, we view Ameren's
support of GenCo as very limited and as a basis to separate the
ratings. The current rating continues to assume a degree of
parental support for GenCo. GenCo's stand-alone business and
financial risk profiles are 'fair' and 'aggressive'," S&P said.
"The negative outlook on GenCo reflects our expectations that
absent improvement to the forward power prices over the next 6 to
12 months, parent company Ameren's economic incentive and
willingness to support GenCo even for the short term may diminish.
We could lower our ratings on GenCo if power prices remain weak
and causes FFO to debt to decline to below 12% on a sustained
basis, reflecting no parental support. We could revise the outlook
on GenCo to stable if the power price curve improves and
forecasted FFO to debt approximates 15%. Upside ratings momentum
for GenCo is not foreseen in the forecast period given our
expectations for cash generation and debt coverage," S&P said.
"The positive outlook on Ameren reflects the company's gradually
improving regulatory risk and our expectations that there is at
least a one-in-three probability that it will continue to improve
over the intermediate period," S&P said.
AMERICAN AMEX: Proposes D. Blair Clark as Bankruptcy Counsel
------------------------------------------------------------
American Amex, Inc., asks the Bankruptcy Court for authorization
to employ the Law Offices of D. Blair Clark PLLC as counsel.
The Debtor submits that employment of counsel is necessary to
enable the Debtor to execute faithfully the duties of debtor-in-
possession and to develop, propose, and consummate a Chapter 11
plan. The counsel will:
a. take all necessary action to protect and preserve the
estate of the Debtor, including the prosecution of actions
on the Debtors' behalf, the defense of any actions
commenced against the Debtors, the negotiation of disputes
in which the Debtors is involved, and the preparation of
objections to claims filed against the estate; prepare on
behalf of the Debtors, as debtor-in-possession, all
necessary motions, applications, answers, orders, reports,
and papers in connection with the administration of the
estate;
b. prepare on behalf of the Debtor, as debtor-in-possession,
all necessary motions, applications, answers, orders,
reports, and papers in connection with the administration
of the estate;
c. prosecute, on behalf of the Debtor, a proposed plan of
reorganization and all related transactions and any
revisions, amendments, etc., relating to same; and
d. perform all other necessary legal services in connection
with this Chapter 11 case.
Compensation will be payable on an hourly basis, plus
reimbursement of actual, necessary expenses and other charges.
The principal attorneys, paralegals, and clerks presently
designated to represent the Debtor and their current standard
hourly rates are:
D. Blair Clark $250.00 per hour
Mary Beth Blair, Paralegal $ 85.00 per hour
D. Blair Clark, Esq., assures the Court that the firm is
"disinterested" as that term is defined in Section 101(14) of the
Bankruptcy Code.
About American Amex
American Amex, Inc., filed for Chapter 11 protection petition
(Bankr. D. Ore. Case No. 12-30656) on Feb. 1, 2012. American Amex
disclosed total assets of $30 million and total debts of
$10.49 million in its schedules.
AMERICAN AMEX: Files Lists of Largest Unsecured Creditors
---------------------------------------------------------
American Amex, Inc., has filed with the U.S. Bankruptcy Court for
the District of Oregon a list of its largest unsecured creditors:
Entity Claim Amount
------ ------------
Bureau of Land Management Unknown
333 S.W. 1st Avenue
Portland, OR 97204
Erwin Singh Braich, Trustee Unknown
Peregrine Trust
c/o Corey Byler Rew Lorenzen & Hojem
P.O. Box 218
Pendleton, OR 97801
Jim Carpenter, Esq. Unknown
601 S. Canyon Blvd
John Day, OR 97845
American Amex, Inc., filed for Chapter 11 protection petition
(Bankr. D. Ore. Case No. 12-30656) on Feb. 1, 2012. American Amex
disclosed total assets of $30 million and total debts of $10.49
million in its schedules. The Law Offices of D. Blair Clark PLLC
has been tapped as counsel.
AMERICAN AMEX: Files Schedules of Assets and Liabilities
--------------------------------------------------------
American Amex, Inc., filed with the U.S. Bankruptcy Court for the
District of Oregon its schedules of assets and liabilities.
In its schedule, the Debtor disclosed:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $30,000,000
B. Personal Property $0
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $10,490,027
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $0
----------- -------------
TOTAL $30,000,000 $10,490,027
A full-text copy of the schedules is available for free at:
http://bankrupt.com/misc/AMERICAN_AMEX_sal.pdf
About American Amex
American Amex, Inc., filed for Chapter 11 protection petition
(Bankr. D. Ore. Case No. 12-30656) on Feb. 1, 2012. The Law
Offices of D. Blair Clark PLLC has been tapped as counsel.
AMTRUST FINANCIAL: Senior Noteholders' Contribution Claim Nixed
---------------------------------------------------------------
Chief Bankruptcy Judge Pat E. Morgenstern-Clarren denied a request
by senior noteholders of AmTrust Financial Corp., nka AmFin
Financial Corporation, to have $950,000 of their fees and expenses
allowed as an administrative expense under 11 U.S.C. Sec. 503(b)
based on their having made a substantial contribution in the
chapter 11 cases. The Debtors support the motion, while the
Federal Deposit Insurance Corporation, as Receiver of AmTrust
Bank, and the United States trustee object.
The Senior Noteholders move under Bankruptcy Code Sec. 503(b)(3)
and (4) for the allowance of $950,000 as reasonable compensation
which they paid or will pay for services rendered by their counsel
and for amounts paid or to be paid by collateral agent Bank of New
York Mellon to its counsel. They state that they incurred charges
greater than $1,154,460, of which $1,015,353 was incurred in
making a substantial contribution to the cases. They limit their
application, though, to the $950,000 provided for in the confirmed
plan.
The Senior Noteholders -- which comprise holders and investment
advisors or managers for the account holders of the 11.78% Senior
Notes issued by AmFin Financial Corp. and due Oct. 20, 2012,
together with the Bank of New York Mellon as collateral agent in
connection with the Senior Notes -- argue they were instrumental
in achieving a favorable outcome for creditors and that the cases
could have followed a very different path without their
cooperative and meaningful participation. They also argue that
the settlement which they proposed for their own issues became the
blueprint for the distribution scheme used in the confirmed plan
and assured a quick plan process. On this point, they argue
further that their agreement that the first $2 million would be
distributed to general unsecured creditors essentially lowered
their own priority to the direct benefit of the estates' other
creditors.
The objectors challenge the Senior Noteholders' characterization
of their participation in the cases. They argue that the
Noteholders did only what was required to protect their self-
interest and not more. The FDIC also argues that the claim should
be denied because the activities duplicated those of the estate
professionals.
"On the record before it, this court cannot find that the Senior
Noteholders proved that they made a substantial contribution to
these cases within the meaning of Sec. 503(b)(3)(D). It is beyond
question that the Senior Noteholders recognized at the outset that
litigating their position would not preserve value, and so they
sensibly chose to focus on reaching a consensus. They did so
sooner rather than later, which helped the case to proceed
smoothly with respect to the issues involving the Senior
Noteholders. It is equally clear that their counsel acted with the
utmost professionalism, which approach avoided administrative and
litigation costs for the estates. However, the efforts by the
Senior Noteholders to settle their own claims are not properly
characterized as a substantial contribution to the case. While the
settlement spared the estates and other creditors from the expense
and inconvenience of litigation, this is true of any settlement
reached," Judge Morgenstern-Clarren held.
"The Senior Noteholders also point to the settlement term,
incorporated into the plan, which provided for a $2 million
distribution to general unsecured creditors. The Senior
Noteholders agreed to this term as part of a settlement of the
claims raised in the initial adversary proceeding, where the
debtors sought to recover about $12 million paid to the
noteholders before the chapter 11 filings. Agreeing to compromise
that cause of action for $2 million does not establish that the
settlement benefitted the estate beyond the benefit that
accompanies any settlement; i.e. resolution of issues without
expending more time and money," Judge Morgenstern-Clarren added.
A copy of the Court's Feb. 28, 2012 Memorandum of Opinion and
Order is available at http://is.gd/ZRIUymfrom Leagle.com.
The debtors filed their chapter 11 cases at the point in time when
they concluded that the Office of Thrift Supervision would likely
seize control of AmTrust Bank. At filing, the debtor AFC had
roughly $100 million of principal debt attributable to the Senior
Notes. On the day the debtors filed the cases, they also filed an
adversary proceeding against the Senior Noteholders seeking to
avoid about $12 million in payments, guarantees, and liens as
preferential transfers and constructively fraudulent transfers.
The debtors dismissed the adversary proceeding one month later,
and eventually compromised the issues with the Senior Noteholders.
Early on in the cases, the OTS took control of the bank subsidiary
and appointed the FDIC as receiver. The FDIC has two major
disputes with the debtors:
1. It initially contended that it had a $2 billion plus
claim, all or substantially all of which was entitled to priority
under the Bankruptcy Code based on AFC's alleged commitment to
maintain the capital of the bank subsidiary. The parties filed
several contested matters related to that issue (Capital
litigation). The District Court tried the matter on withdrawal of
the reference, entering judgment in favor of the debtors. The case
is on appeal.
2. The second major dispute stems from a 2009 tax refund of
about $194 million; the FDIC claims the refund is its property,
while the debtors claim that it is their property. The FDIC filed
a complaint for a declaratory judgment on that issue, the District
Court withdrew the reference, and the matter is pending (Refund
litigation).
The debtors' plan, confirmed consensually on Nov. 4, 2011 with the
FDIC litigation unresolved, necessarily poses a question as to the
debtors' ability to make the contemplated distributions. If the
FDIC prevails in the Capital litigation, its priority claim
exceeds the projected value of the debtors' assets. The debtors
cannot, therefore, make any distribution to unsecured creditors
until the Capital litigation is resolved.
The Senior Noteholders took the position that it made economic
sense to reach agreement on their disputes, in lieu of heated
litigation. This approach was successful. The confirmed plan
incorporates the settlement terms, including: (1) each holder of a
Senior Note Claim is treated as the holder of a single unsecured
claim in the aggregate amount of $100,763,414.93 against the
substantively consolidated debtors; (2) any lien, guarantee,
mortgage, or security interest which was granted under the Senior
Notes Agreement is disregarded; and (3) a settlement amount of $2
million will not be distributed to the holders of Senior Note
claims, but will instead be distributed to holders of other
unsecured claims (other than Subordinated Note Claims) on a pro
rata basis.
The $2 million redistribution resolved the debtors' claim to
recover the roughly $12 million paid by the debtors to the holders
of the Senior Note Claims in September 2009, and the debtors
believed it reasonably approximated the net benefit which the
adversary proceeding would have yielded had it been successfully
prosecuted. Additionally, the debtors agreed not to object to the
Senior Noteholders' claim for substantial contribution up to a
total of $950,000.
About AmTrust Financial
AmTrust Financial Corp. was the owner of the AmTrust Bank.
AmTrust was the seventh-largest holder of deposits in South
Florida, with $4.7 billion in deposits and 21 branches.
In November 2008, the Office of Thrift Supervision issued a cease
and desist order requiring AmTrust to improve its capital ratios.
AmTrust Financial, together with affiliates that include AmTrust
Management Inc., filed for Chapter 11 bankruptcy protection
(Bankr. N.D. Ohio Case No. 09-21323) on Nov. 30, 2009. The debtor
subsidiaries include AmFin Real Estate Investments, Inc., formerly
AmTrust Real Estate Investments, Inc. (Case No. 09-21328).
G. Christopher Meyer, Esq., Christine M. Piepont, Esq., and Sherri
L. Dahl, Esq., at Squire Sanders & Dempsey (US) LLP, in Cleveland,
Ohio; and Stephen D. Lerner, Esq., at Squire Sanders & Dempsey
(US) LLP, in Cincinnati, Ohio, served as counsel to the Debtors.
Kurtzman Carson Consultants served as claims and notice agent.
Attorneys at Hahn Loeser & Parks LLP serve as counsel to the
Official Committee of Unsecured Creditors. AmTrust Management
estimated $100 million to $500 million in assets and debts in its
Chapter 11 petition.
AmTrust Bank was not part of the Chapter 11 filings. On Dec. 4,
2009, AmTrust Bank was closed by regulators and the Federal
Deposit Insurance Corporation was named receiver. New York
Community Bank, in Westbury, New York, assumed all of the deposits
of AmTrust Bank pursuant to a deal with the FDIC.
AmTrust, nka AmFin Financial Corp., obtained confirmation of its
Amended Joint Plan of Reorganization on Nov. 3, 2011. The plan
was declared effective in December.
ANGARAKA LIMITED: Files Post-Confirmation Modification to Plan
--------------------------------------------------------------
Angaraka Limited Partnership filed a Post Confirmation
Modification to the Chapter 11 Plan of Reorganization to reduce to
writing the modifications proposed orally by the Debtor at the
hearing on January 26, 2012.
Section 2.2(a) of the Plan will be modified by removing all
references to the 24-month term of payment on the Lender's Claim,
and replacing it with a 20-month term of payment on the Lender's
Claim.
As reported in the Troubled Company Reporter on Oct. 7, 2011,
Judge Stacey G. Jernigan of the U.S. Bankruptcy Court for the
Northern District of Texas has confirmed the modified plan of
reorganization filed by Angakara on Sept. 28, 2010. The Modified
Plan and each of its provisions are approved and confirmed under
section 1129 of the Bankruptcy Code.
The classification and treatment of claims under the plan are:
A. Administrative claims will be paid in full in cash.
B. Class 1 (Lender Claims) will receive a note in the amount
due on the Petition Date after application of the escrows
held by the Lender, payable over 24 months from the
Distribution Date, and bearing interest at a rate of 4.35%
per year. Reorganized Debtor will make monthly payments
on the note equal to its excess cash flow. All
outstanding principal and interest will be due and payable
at the end of the 24-month term provided that the
Reorganized Debtor will have the ability to liquidate one
or more of the Properties prior to the end of the 24-month
term, and upon doing so, will be required to remit to
Lender a minimum of 70% of the net proceeds from the sale
to be applied to the principal balance outstanding on the
note. Reorganized Debtor may retain up to 30% of the net
proceeds of the sale, to be used solely for the purpose
of improving the remaining Properties through deferred
maintenance and capital improvement rehabilitation
projects. The Lender will retain all of its liens to the
same extent, validity and priority as existed prepetition.
C. Class 2 (Other Secured Claims) will receive (i) payments
under the same terms and conditions as existed between the
Debtor and holder prior to the Commencement Date; (ii)
other treatment as may be agreed upon in writing by holder
and Debtor; or (iii) the Collateral securing Allowed Other
Secured Claim.
D. Class 3 (Unsecured Claims) will receive over a period of
six months from the Effective Date, two equal payments
payable on each Quarterly Distribution Date until the
Claim is paid in full.
E. Class 4 (Old Equity Interests) will be cancelled and the
holder will receive equity interests in the Reorganized
Debtor equal to the holder's Old Equity Interest.
A copy of the Plan of Reorganization is available for free at:
http://bankrupt.com/misc/ANGARAKA_plan.pdf
About Angaraka Limited Partnership
Newport Beach, California-based Angaraka Limited Partnership, in
November 2005, acquired and assumed indebtedness secured by, among
other things, a Deed of Trust on four, Class B/C, garden-apartment
properties located in the Dallas/Fort-Worth Metroplex. The
Properties -- Woodchase, Clarendon, Keller Oaks, and Sycamore
Hills -- total 750 units and range in date of construction from
1979 to 1983. The Company filed for Chapter 11 bankruptcy
protection (Bankr. N.D. Tex. Case No. 10-33868) on May 31, 2010.
Vincent P. Slusher, Esq., and J. Seth Moore, Esq. at DLA Piper LLP
US, in Dallas, Texas, assist the Debtor in its restructuring
effort. The Debtor estimated assets and debts at $10 million
to $50 million.
ARTECITY MANAGEMENT: Wants to Tap Del Vecchio for SDC Claims
------------------------------------------------------------
Artecity Management LLC and its affiliates ask the Bankruptcy
Court for authorization to employ Paul J. Del Vecchio Construction
Consultants, Inc., as consultant for "retained causes of action."
On April 1, 2008, certain of the Debtors commenced a Circuit Court
action case number 08-17586, asserting four breaches of contract
claims against Soares da Costa, CS, LLC (SDC) and four breaches of
guaranty claims against Soares da Costa Constucao, S.G.P.S., S.A.
(SDC-CS), for cumulative damages in excess of $45 million. SDC
and SDC-CS have denied all material allegations against them and
contend that the Reorganized Debtors' damages Claims are excessive
and should be capped at $2 million due to liquidated damages
provisions in various contracts between the parties, which the
Reorganized Debtors dispute. SDC and SDC-CS have also asserted
counterclaims, including breach of contract claims, claims for
unjust enrichment and quantum merit and lien foreclosure claims.
The Debtors want to employ Del Vecchio Consultants as a consultant
in connection with their claims against SDC and SDC-CS, to analyze
the construction work done by SDC, financial transfers between the
Reorganized Debtors, SDC and SDC-CS and the damage caused by SDC's
abandonment of the Artecity Project.
Paul J. Del Vecchio, Del Vecchio Consultants' principal, has more
than 35 years of construction industry experience. Del Vecchio
has extensive personal knowledge of SDC's construction work and
abandonment having served as a consultant on the Artecity Project
from March 2007 through March 2009. In that position, Vecchio
witnessed the many events relating to SDC's work on and
abandonment of the Artecity Project.
In consideration for services as consulting expert, Del Vecchio
will be compensated at the rate of $200 per hour, plus
reimbursement of expenses. Del Vecchio will also be compensated
at the rate of $300 per hour for testifying in a deposition or
evidentiary hearing.
About Artecity Park LLC
Miami Beach, Florida-based Artecity Park LLC filed for Chapter 11
bankruptcy protection (Bankr. S.D. Fla. Case No. 10-31410) on
July 26, 2010. Thomas R. Lehman, Esq., at Levine Kellogg Lehman
Schneider & Grossman LLP, in Miami, Fla., represents the Debtors
as counsel. The Company estimated assets at $50 million to
$100 million and debts at $10 million to $50 million.
Affiliates Artecity Management IXC (Case No. 10-41406), Artecity
Holding Ltd. (Case No. 10-31407), Artepark South Development LLC
(Case No. 10-31412, BKC-AJC), Artecity Plaza LLC (Case No.
10-31411), Artecity Governor LLC (Case No. 10-31409), and Park
Villas Development LLC (Case No. 10-31413) filed separate
Chapter 11 petitions. The cases are jointly administered under
Artecity Management, LLC.
The Debtors are engaged in the development of a real estate
condominium project in Miami Beach, Florida, known as the
Aretecity. The Project includes 202 condominium units in five
multi-level buildings, together with retail spaces, two pools, a
fitness and spa facility, and a parking garage.
Artecity Management manages the Debtors' operations and is the
general partner of Artecity Holding, Ltd. Artecity Holding owns
100% of the membership interests in Artecity Park LLC, Artecity
Plaza LLC, Artecity Governor LLC, Artepark South Development LLC,
and Park Villas Development LLC.
ARTECITY MANAGEMENT: Wants to Hire Ferretti for Chubb Dispute
-------------------------------------------------------------
Artecity Management LLC and its affiliates ask the Bankruptcy
Court for authorization to employ Alessandro Ferretti as
consultant for retained causes of action.
In November 2011, the Debtors filed a complaint against Chubb
Custom Insurance Company in Miami-Dade Circuit Court for breach of
an insurance policy. The complaint seeks recovery of at least
$2,434,570 in soft cost losses incurred by the Debtors resulting
from torrential rains at the Artecity Project on June 5, 2009.
Chubb has refused to pay the soft cost losses and disputes the
claim.
Chubb removed the action to the District Court for the Southern
District of Florida (Case No. 11-24492-CIV-JAL) and has filed its
answer and affirmative defenses to the Reorganized Debtors'
complaint. Pursuant to the Parties' Joint Scheduling Report, the
trial is tentatively scheduled to commence on January 28, 2013.
Discovery is underway and mediation is scheduled for April 24,
2012.
Mr. Ferretti was the manager of the Artecity Holdings LTD from
2004 until 2010. In that position, Mr. Ferretti acquired
extensive knowledge of the facts underlying both the Construction
Claim and the insurance claim against Chubb. Mr. Ferretti
witnessed and was involved in the many events relating to SDC's
work, SDC's abandonment and the rain storm that resulted in the
soft cost claim against Chubb.
The Debtors seek to employ Ferretti as a consultant in both the
SDC/SDC-CS litigation and in the Chubb litigation. In that
capacity, Mr. Ferretti would analyze the construction work done by
SDC and the soft cost losses incurred by the Debtors resulting
from the rainstorm that is the subject of their action against
Chubb.
Mr. Ferretti will be compensated at the rate of $300 per hour for
his services, plus reimbursement of expenses.
About Artecity Park LLC
Miami Beach, Florida-based Artecity Park LLC filed for Chapter 11
bankruptcy protection (Bankr. S.D. Fla. Case No. 10-31410) on
July 26, 2010. Thomas R. Lehman, Esq., at Levine Kellogg Lehman
Schneider & Grossman LLP, in Miami, Fla., represents the Debtors
as counsel. The Company estimated assets at $50 million to
$100 million and debts at $10 million to $50 million.
Affiliates Artecity Management IXC (Case No. 10-41406), Artecity
Holding Ltd. (Case No. 10-31407), Artepark South Development LLC
(Case No. 10-31412, BKC-AJC), Artecity Plaza LLC (Case No.
10-31411), Artecity Governor LLC (Case No. 10-31409), and Park
Villas Development LLC (Case No. 10-31413) filed separate
Chapter 11 petitions. The cases are jointly administered under
Artecity Management, LLC.
The Debtors are engaged in the development of a real estate
condominium project in Miami Beach, Florida, known as the
Aretecity. The Project includes 202 condominium units in five
multi-level buildings, together with retail spaces, two pools, a
fitness and spa facility, and a parking garage.
Artecity Management manages the Debtors' operations and is the
general partner of Artecity Holding, Ltd. Artecity Holding owns
100% of the membership interests in Artecity Park LLC, Artecity
Plaza LLC, Artecity Governor LLC, Artepark South Development LLC,
and Park Villas Development LLC.
ATLANTIC & PACIFIC: Judge Approves Reorganization Plan
------------------------------------------------------
U.S. Bankruptcy Judge Robert D. Drain on Monday entered an order
confirming the First Amended Joint Plan of Reorganization dated
Feb. 17, 2012, of The Great Atlantic & Pacific Tea Co.
The plan was approved despite objections filed by several parties.
The Debtor looks to exit Chapter 11 with $645 million in exit
financing and an additional infusion from private equity
investors.
The Plan provides for, among other things, a $490 million in
financing from Yucaipa Cos., cancellation of existing equity
interests and zero recovery for shareholders. Yucaipa's Ron
Burkle will be chairman of the reorganized entity.
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.
BERNARD L. MADOFF: SEC's Former Top Attorney to Repay $556,000
--------------------------------------------------------------
A former top attorney for the Securities and Exchange Commission
and his two brothers have agreed to pay back half a million
dollars they inherited that was tied to the Bernard L. Madoff's
Ponzi scheme.
The SEC's former general counsel David Becker on Monday settled
claims brought by Madoff liquidating trustee Irving Picard over
inheritance money Mr. Becker received from the imprisoned
fraudster's Ponzi scheme.
Mr. Becker has agreed to pay $556,017 to resolve claims that he
and his brothers had received more than $2 million in payments
from Madoff's securities firm through the estate of their late
mother.
A motion seeking approval of the settlement has been filed.
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 Feb. 8, 2012, Mr. Picard has recovered $8.7 billion for
investors. A total of $325.5 million has been distributed to
investors.
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.
In February 2012, U.S. District Judge Deborah A. Batts ruled that
the bankruptcy judge was correct in ignoring a request by a
customer named Marsha Peshkin to remove Mr. Picard and his
attorneys. Batts, in her Feb. 16 opinion, said the request was
improperly made because it first appeared in a reply brief
submitted on a motion seeking the bankruptcy judge to revoke
approval of a $220 million settlement with the estate of Norman F.
Levy.
BIOPURE CORP: Court Spares Asset Buyer From High Contributions
--------------------------------------------------------------
OPK Biotech LLC, which acquired BioPure Corp.'s assets in a court-
authorized auction free and clear of all interests under 11 U.S.C.
Sec. 363(b) and (f), has moved for enforcement of the sale order
against the Massachusetts Department of Workforce Development,
Division of Unemployment Assistance. OPK contends that the DUA
has been violating the Sec. 363(f) features of the order by
charging OPK for contributions to the state's unemployment
compensation fund according to a rate that imputes to OPK, as
purchaser of assets from the debtor, certain attributes of the
debtor -- known collectively in distilled form as its "experience
rating" -- resulting in a higher contribution rate than would
otherwise obtain.
The DUA responds (i) that it had no notice of the sale motion and
therefore may yet be heard on its objection to sale pursuant to
Sec. 363(f), (ii) that the debtor was not entitled to authority
under Sec. 363(f) to sell free and clear of interests, and (iii)
that the debtor's experience rating is not an "interest" within
the meaning of Sec. 363(f).
In a Feb. 27, 2012 Memorandum of Decision is available at
http://is.gd/diPR4bfrom Leagle.com, Bankruptcy Judge Frank J.
Bailey held that the sale to OPK pursuant to the Sale Order was
free and clear of the Debtor's experience rate and contribution
rate as those terms are defined in Mass. Gen. Laws c. 151A, Sec.
14. The Court directed the DUA to refund to OPK overpayments
attributable to its attribution to OPK of the Debtor's experience
rate.
The Court will schedule a further hearing to determine what
further process may be necessary to quantify the refund.
The Court declined to rule on OPK's requests to compel the DUA to
assign to OPK a 2.89% contribution rate as an employer newly
subject to G.L. c. 151A, retroactive to the Sale Date, as such
contribution rate may be adjusted from time to time in accordance
with OPK's experience rate without regard to the Debtor's pre-sale
ratings. The Court said it cannot dictate to the DUA what rate it
should apply on a prospective basis, provided the DUA's
determination of that issue does not run afoul of the Sale Order.
The Court noted that resolution of that issue will have no bearing
on the bankruptcy case and therefore is outside the court's
subject matter jurisdiction.
About BioPure Corp.
Based in Cambridge, Massachusetts, BioPure Corporation --
http://www.biopure.com/-- developed and marketed pharmaceuticals,
called oxygen therapeutics, which were intravenously administered
to deliver oxygen to the body's tissues. BioPure filed for
Chapter 11 bankruptcy protection on July 16, 2009 (Bankr. D. Mass.
Case No. 09-16725). Christopher J. Panos, Esq., at Craig and
Macauley, P.C., assisted the Debtor in its restructuring efforts.
The Debtor listed $5,076,000 in assets and $2,729,000 in debts.
On Aug. 20, 2009, the Debtor sold substantially all of its assets
to OPK, which prevailed at an auction with a bid of $4,050,000.
BioPure changed its name to PBBPC, Inc.
BLUEGREEN CORP: Communities Purchase Price Reduced to $29 Million
-----------------------------------------------------------------
As previously disclosed, a Purchase and Sale Agreement was entered
into on Oct. 12, 2011, between seven subsidiaries of Bluegreen
Corporation and Southstar Development Partners, Inc., which
provided for the sale to Southstar of substantially all of the
assets that comprise the Company's Bluegreen Communities business
segment for a purchase price of $31.5 million in cash and an
amount equal to 20% of the net proceeds that Southstar receives
upon its sale, if any, of two specified parcels of real estate to
be purchased by Southstar under the Agreement. Under the terms of
the Agreement, as previously amended, Southstar delivered a
$500,000 deposit.
On Feb. 21, 2012, the Company's subsidiaries and Southstar entered
into an amendment to the Agreement, pursuant to which the Closing
Date Cash Payment was reduced from $31.5 million to $29.0 million,
and Southstar delivered an additional $4.0 million deposit. This
amendment also extended the period for closing the transaction to
a date no later than April 30, 2012. The Agreement previously
provided for the transaction to be closed on or before March 2,
2012, subject to an extension to a date no later than April 2,
2012 if necessary for all required consents to the transfer of
certain operating contracts related to Bluegreen Communities'
business to be obtained.
Of the total $4.5 million deposit paid by Southstar, $50,000 has
been deemed earned and paid to the Company. The remaining
$4,450,000 is being held in escrow pending closing of the
transaction and, under the terms of the Agreement, will only be
refunded to Southstar in the event the transaction is not
consummated as a result of a breach of the Agreement by one or
more of the Company's subsidiaries which is not timely cured.
About Bluegreen Corp.
Bluegreen Corporation -- http://www.bluegreencorp.com/-- provides
places to live and play through its resorts and residential
community businesses.
In December 2010, Standard & Poor's Rating Services raised its
corporate credit rating on Bluegreen Corp to 'B-' from 'CCC'.
S&P's rating outlook on the Company is stable. S&P believes that
Bluegreen will grow its fee-based sales commission revenue from
$20 million in 2009 to an estimated $50 million in 2010. At this
time, S&P expects that Bluegreen may be able to generate at least
the same amount of commission based revenue in 2011. While the
increase in fee- based revenue allowed Bluegreen to expand the
level of sales that do not require financing, S&P believes that
the company will likely remain heavily reliant on its lines of
credit, receivable- backed warehousing facilities, and access to
the timeshare securitization markets to fund timeshare sales. In
S&P's view, Bluegreen currently has adequate sources of liquidity
to cover its needs over the next 12-18 months mainly due to the
successful closing of a timeshare securitization transaction.
The Company reported a net loss of $35.87 million in 2010 and net
income of $3.90 million in 2009. The Company also reported a net
loss of $11.85 million for the nine months ended Sept. 30, 2011.
The Company's balance sheet at Sept. 30, 2011, showed $1.12
billion in total assets, $820.20 million in total liabilities and
$306.23 million in total shareholders' equity.
* * *
In December 2010, Standard & Poor's Rating Services raised its
corporate credit rating on Bluegreen Corp to 'B-' from 'CCC'.
S&P's rating outlook on the Company is stable. S&P believes that
Bluegreen will grow its fee-based sales commission revenue from
$20 million in 2009 to an estimated $50 million in 2010. At this
time, S&P expects that Bluegreen may be able to generate at least
the same amount of commission based revenue in 2011. While the
increase in fee- based revenue allowed Bluegreen to expand the
level of sales that do not require financing, S&P believes that
the company will likely remain heavily reliant on its lines of
credit, receivable- backed warehousing facilities, and access to
the timeshare securitization markets to fund timeshare sales. In
S&P's view, Bluegreen currently has adequate sources of liquidity
to cover its needs over the next 12-18 months mainly due to the
successful closing of a timeshare securitization transaction.
BUFFETS INC: Has Until March 18 to File Schedules and Statements
----------------------------------------------------------------
The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware extended until March 18, 2012, Buffets
Restaurants Holdings, Inc., et al., time to file their schedules
of assets and liabilities and statements of financial affairs.
As reported in the Troubled Company Reporter on Feb. 16, 2012, the
Debtors explained that they need more time to compile and
consolidate the date required for the schedules and statements.
The extension would enable them to assemble and verify information
and prepare the schedules and statements.
About Buffets Inc.
Buffets Inc., the nation's largest steak-buffet restaurant
company, operates 494 restaurants in 38 states, comprised of 483
steak-buffet restaurants and 11 Tahoe Joe's Famous Steakhouse(R)
restaurants, and franchises 3 steak-buffet restaurants in two
states. The restaurants are principally operated under the Old
Country Buffet(R), HomeTown(R) Buffet, Ryan's(R) and Fire
Mountain(R) brands. Buffets employs 28,000 team members and
serves 140 million customers annually.
Buffets Inc. and all of its subsidiaries filed Chapter 11
petitions (Bankr. D. Del. Lead Case No. 12-10237) on Jan. 18,
2012, after it reached a restructuring support agreement with 83%
of its lenders to eliminate virtually all of the Company's roughly
$245 million of outstanding debt. The Debtors are seeking to
reject leases for 83 underperforming restaurants.
Buffets had 626 restaurants when it began its prior bankruptcy
case (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). It emerged
from bankruptcy in April 2009.
Higher gasoline and energy costs, along with a decline in guest
count, have hampered the Debtors' ability to service their long-
term debt and caused a liquidity strain, forcing the Company to
return to Chapter 11 bankruptcy.
In the new Chapter 11 case, Buffets Inc.'s legal advisors are
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Young, Conaway,
Stargatt & Taylor, LLP. The Company's financial advisor is
Moelis, Inc. Epiq Bankruptcy Solutions LLC serves as claims,
noticing and balloting agent.
An ad hoc committee of secured lenders is represented by Willkie
Far & Gallagher LLP and Blank Rome LLP as counsel and Conway, Del
Genio, Gries & Co. as financial advisors. Credit Suisse, as DIP
Agent and Prepetition First Lien Agent, is represented by Skadden
Arps Slate Meagher & Flom as counsel.
The U.S. Trustee has appointed a 5-member Official Committee of
Unsecured Creditors in the Debtors' cases.
BUFFETS INC: Committee Wants FTI Consulting as Financial Advisor
----------------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
cases of Buffets Restaurants Holdings, Inc., et al., asks the U.S.
Bankruptcy Court for the District of Delaware for permission to
retain FTI Consulting Inc. as financial advisor.
The services of FTI are deemed necessary to enable the Committee
to assess and monitor the efforts of the Debtors and their
professional advisors to maximize the value of their estates and
to reorganize successfully. Further, FTI is well qualified and
able to represent the Committee in a cost-effective, efficient and
timely manner.
FTI represented the Committee in connection with the Debtors'
prior bankruptcy filing. In that capacity, FTI became completely
familiar with the facts and circumstances surrounding the Debtors'
operations, their financing and all matters relevant to the
current Chapter 11 filings.
FTI is not owed any amounts with respect to prepetition fees and
expenses. FTI will seek payment for compensation on a fixed
monthly basis of $125,000, plus reimbursement of actual and
necessary expenses incurred by FTI, including legal fees related
to the retention application and future fee applications as
approved by the Court.
The hourly rates of FTI's personnel are:
Senior Managing Directors $780 - $895
Directors/Managing Directors $560 - $745
Consultants/Senior Consultants $280 - $530
Administrative/Paraprofessionals $115 - $230
To the best of the Committee's knowledge, FTI does not hold or
represent any interest adverse to the estate.
About Buffets Inc.
Buffets Inc., the nation's largest steak-buffet restaurant
company, operates 494 restaurants in 38 states, comprised of 483
steak-buffet restaurants and 11 Tahoe Joe's Famous Steakhouse(R)
restaurants, and franchises 3 steak-buffet restaurants in two
states. The restaurants are principally operated under the Old
Country Buffet(R), HomeTown(R) Buffet, Ryan's(R) and Fire
Mountain(R) brands. Buffets employs 28,000 team members and
serves 140 million customers annually.
Buffets Inc. and all of its subsidiaries filed Chapter 11
petitions (Bankr. D. Del. Lead Case No. 12-10237) on Jan. 18,
2012, after it reached a restructuring support agreement with 83%
of its lenders to eliminate virtually all of the Company's roughly
$245 million of outstanding debt. The Debtors are seeking to
reject leases for 83 underperforming restaurants.
Buffets had 626 restaurants when it began its prior bankruptcy
case (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). It emerged
from bankruptcy in April 2009.
Higher gasoline and energy costs, along with a decline in guest
count, have hampered the Debtors' ability to service their long-
term debt and caused a liquidity strain, forcing the Company to
return to Chapter 11 bankruptcy.
In the new Chapter 11 case, Buffets Inc.'s legal advisors are
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Young, Conaway,
Stargatt & Taylor, LLP. The Company's financial advisor is
Moelis, Inc. Epiq Bankruptcy Solutions LLC serves as claims,
noticing and balloting agent.
An ad hoc committee of secured lenders is represented by Willkie
Far & Gallagher LLP and Blank Rome LLP as counsel and Conway, Del
Genio, Gries & Co. as financial advisors. Credit Suisse, as DIP
Agent and Prepetition First Lien Agent, is represented by Skadden
Arps Slate Meagher & Flom as counsel.
The U.S. Trustee has appointed a 5-member Official Committee of
Unsecured Creditors in the Debtors' cases. The Committee tapped
Pachulski Stang Ziehl & Jones LLP as its co-counsel; Otterbourg,
Steindler, Houston & Rosen, P.C. as its lead co-counsel.
BUFFETS INC: Committee Taps Otterbourg as Lead Co-Counsel
---------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
cases of Buffets Restaurants Holdings, Inc., et al., asks the U.S.
Bankruptcy Court for the District of Delaware for permission to
retain Otterbourg, Steindler, Houston & Rosen, P.C. as its lead
co-counsel.
The hourly rates of OSH&R's personnel are:
Partner/Counsel $570 - $895
Associate $255 - $610
Paralegal $225 - $245
OSH&R intends to work closely with the Debtors' representatives
and the other professionals retained by the Committee to ensure
that there is no unnecessary duplication of services performed or
charged to the Debtors' estates.
To the best of the Committee's knowledge, the members and
associates of OSH&R do not have any connection with the debtors,
their creditors or any other party in interest.
About Buffets Inc.
Buffets Inc., the nation's largest steak-buffet restaurant
company, operates 494 restaurants in 38 states, comprised of 483
steak-buffet restaurants and 11 Tahoe Joe's Famous Steakhouse(R)
restaurants, and franchises 3 steak-buffet restaurants in two
states. The restaurants are principally operated under the Old
Country Buffet(R), HomeTown(R) Buffet, Ryan's(R) and Fire
Mountain(R) brands. Buffets employs 28,000 team members and
serves 140 million customers annually.
Buffets Inc. and all of its subsidiaries filed Chapter 11
petitions (Bankr. D. Del. Lead Case No. 12-10237) on Jan. 18,
2012, after it reached a restructuring support agreement with 83%
of its lenders to eliminate virtually all of the Company's roughly
$245 million of outstanding debt. The Debtors are seeking to
reject leases for 83 underperforming restaurants.
Buffets had 626 restaurants when it began its prior bankruptcy
case (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). It emerged
from bankruptcy in April 2009.
Higher gasoline and energy costs, along with a decline in guest
count, have hampered the Debtors' ability to service their long-
term debt and caused a liquidity strain, forcing the Company to
return to Chapter 11 bankruptcy.
In the new Chapter 11 case, Buffets Inc.'s legal advisors are
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Young, Conaway,
Stargatt & Taylor, LLP. The Company's financial advisor is
Moelis, Inc. Epiq Bankruptcy Solutions LLC serves as claims,
noticing and balloting agent.
An ad hoc committee of secured lenders is represented by Willkie
Far & Gallagher LLP and Blank Rome LLP as counsel and Conway, Del
Genio, Gries & Co. as financial advisors. Credit Suisse, as DIP
Agent and Prepetition First Lien Agent, is represented by Skadden
Arps Slate Meagher & Flom as counsel.
The U.S. Trustee has appointed a 5-member Official Committee of
Unsecured Creditors in the Debtors' cases. The Committee tapped
Pachulski Stang Ziehl & Jones LLP as its co-counsel; and FTI
Consulting Inc. as its financial advisor.
BUFFETS INC: Creditors Panel Taps Pachulski Stang as Co-Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
cases of Buffets Restaurants Holdings, Inc., et al., asks the U.S.
Bankruptcy Court for the District of Delaware for permission to
retain Pachulski Stang Ziehl & Jones LLP as its co-counsel.
The hourly rates of PSZJ's personnel are:
Partners $575 - $975
Of Counsel $495 - $565
Associates $395 - $525
Paralegals $210 - $275
The professionals and paralegals designated to represent the
Committee and their standard hourly rates are:
Bradford J. Sandler $695
Peter J. Keane $395
Patricia B. Cuniff $265
To the best of the Committee's knowledge, PSZJ does not hold or
represent any interest that is adverse to the Committee and the
Debtors' estates and does not hold or represent any interest
adverse to and has no connection with the Committee, the Debtors,
their creditors or any party-in-interest.
About Buffets Inc.
Buffets Inc., the nation's largest steak-buffet restaurant
company, operates 494 restaurants in 38 states, comprised of 483
steak-buffet restaurants and 11 Tahoe Joe's Famous Steakhouse(R)
restaurants, and franchises 3 steak-buffet restaurants in two
states. The restaurants are principally operated under the Old
Country Buffet(R), HomeTown(R) Buffet, Ryan's(R) and Fire
Mountain(R) brands. Buffets employs 28,000 team members and
serves 140 million customers annually.
Buffets Inc. and all of its subsidiaries filed Chapter 11
petitions (Bankr. D. Del. Lead Case No. 12-10237) on Jan. 18,
2012, after it reached a restructuring support agreement with 83%
of its lenders to eliminate virtually all of the Company's roughly
$245 million of outstanding debt. The Debtors are seeking to
reject leases for 83 underperforming restaurants.
Buffets had 626 restaurants when it began its prior bankruptcy
case (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). It emerged
from bankruptcy in April 2009.
Higher gasoline and energy costs, along with a decline in guest
count, have hampered the Debtors' ability to service their long-
term debt and caused a liquidity strain, forcing the Company to
return to Chapter 11 bankruptcy.
In the new Chapter 11 case, Buffets Inc.'s legal advisors are
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Young, Conaway,
Stargatt & Taylor, LLP. The Company's financial advisor is
Moelis, Inc. Epiq Bankruptcy Solutions LLC serves as claims,
noticing and balloting agent.
An ad hoc committee of secured lenders is represented by Willkie
Far & Gallagher LLP and Blank Rome LLP as counsel and Conway, Del
Genio, Gries & Co. as financial advisors. Credit Suisse, as DIP
Agent and Prepetition First Lien Agent, is represented by Skadden
Arps Slate Meagher & Flom as counsel.
The U.S. Trustee has appointed a 5-member Official Committee of
Unsecured Creditors in the Debtors' cases. The Committee tapped
Otterbourg, Steindler, Houston & Rosen, P.C. as its lead co-
counsel; and FTI Consulting Inc. as its financial advisor.
BUFFETS RESTAURANTS: Taps Deloitte & Touche as Independent Auditor
------------------------------------------------------------------
BankruptcyData.com reports that the Buffets Restaurants Holdings
filed a motion with the U.S. Bankruptcy Court to retain Deloitte &
Touche (Contact: Scott Loveless) as independent auditor and
accountant.
The firm will be paid at these hourly rates:
Partner/principal/director $490 to $690
Senior manager $410 to $580
Manager $360 to $550
Senior accountant $230 to $420
Staff accountant $205 to $320
Administrative staff $85 to $110
About Buffets Inc.
Buffets Inc., the nation's largest steak-buffet restaurant
company, operates 494 restaurants in 38 states, comprised of 483
steak-buffet restaurants and 11 Tahoe Joe's Famous Steakhouse(R)
restaurants, and franchises 3 steak-buffet restaurants in two
states. The restaurants are principally operated under the Old
Country Buffet(R), HomeTown(R) Buffet, Ryan's(R) and Fire
Mountain(R) brands. Buffets employs 28,000 team members and
serves 140 million customers annually.
Buffets Inc. and all of its subsidiaries filed Chapter 11
petitions (Bankr. D. Del. Lead Case No. 12-10237) on Jan. 18,
2012, after it reached a restructuring support agreement with 83%
of its lenders to eliminate virtually all of the Company's roughly
$245 million of outstanding debt. The Debtors are seeking to
reject leases for 83 underperforming restaurants.
Buffets had 626 restaurants when it began its prior bankruptcy
case (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). It emerged
from bankruptcy in April 2009.
Higher gasoline and energy costs, along with a decline in guest
count, have hampered the Debtors' ability to service their long-
term debt and caused a liquidity strain, forcing the Company to
return to Chapter 11 bankruptcy.
In the new Chapter 11 case, Buffets Inc.'s legal advisors are
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Young, Conaway,
Stargatt & Taylor, LLP. The Company's financial advisor is
Moelis, Inc. Epiq Bankruptcy Solutions LLC serves as claims,
noticing and balloting agent.
An ad hoc committee of secured lenders is represented by Willkie
Far & Gallagher LLP and Blank Rome LLP as counsel and Conway, Del
Genio, Gries & Co. as financial advisors. Credit Suisse, as DIP
Agent and Prepetition First Lien Agent, is represented by Skadden
Arps Slate Meagher & Flom as counsel.
The U.S. Trustee has appointed a 5-member Official Committee of
Unsecured Creditors in the Debtors' cases.
C&M RUSSELL: Court OKs Kenneth Blake as Accountant
--------------------------------------------------
C & M Russell LLC sought and obtained permission from the U.S.
Bankruptcy Court for the Central District of California to employ
Kenneth Blake, CPA, as accountant.
Mr. Blake will be the only person performing services for the
Debtor as accountant. Mr. Blake's current billing rate is $150 an
hour. Mr. Blake will charge $0.10 per page for copies and faxes,
and will bill the Debtor for actual costs for U.S. postage as
incurred.
Mr. Blake attests that he is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The accountant can be reached at:
Kenneth Blake, CPA
440 S. Brea Blvd., Suite B
Brea, CA 92821
Tel: 714 529-1040
E-mail: ken@kenblakecpa.com
About C&M Russell
Los Angeles, California-based C & M Russell LLC owns five
multifamily apartment buildings all located in either Redondo
Beach or El Segundo, California. The Company first made a pro
se Chapter 11 bankruptcy filing (Bankr. C.D. Calif. Case No.
11-49889) on Sept. 21, 2011. C & M Russell filed for another
Chapter 11 petition (Bankr. C.D. Case No. 11-53845) on Oct. 20,
2011. Judge Sandra R. Klein presides over the case. Alan G.
Tippie, Esq., and Avi E. Muhtar, Esq., at SulmeyerKupetz, serve as
the Debtor's counsel. In the second petition, the Debtor
scheduled assets of $17,499,500 and debts of $9,300,331. The
petition was signed by Mattie B. Evans, chief executive member.
C&M RUSSELL: Court OKs Coldwell Banker as Real Estate Broker
------------------------------------------------------------
C & M Russell LLC sought and obtained permission from the U.S.
Court to employ Coldwell Banker to act as the Debtor's real estate
broker.
Coldwell Banker will sell three residential apartment buildings
owned by the Debtor, namely:
-- 216 W. Imperial, El Segundo, California ("216");
-- 302 W. Imperial, El Segundo, California ("302"); and
-- 732 W. Imperial, El Segundo, California ("732").
The Broker has not received a retainer. Pursuant to the terms
contained in the Listing Agreements, the Broker will be entitled
to a 5% commission for each of the El Segundo Properties.
The Debtor attests that the firm is a "disinterested person" as
the term is defined in Section 101(14) of the Bankruptcy Code.
About C&M Russell
Los Angeles, California-based C & M Russell LLC owns five
multifamily apartment buildings all located in either Redondo
Beach or El Segundo, California. The Company first made a pro
se Chapter 11 bankruptcy filing (Bankr. C.D. Calif. Case No.
11-49889) on Sept. 21, 2011. C & M Russell filed for another
Chapter 11 petition (Bankr. C.D. Case No. 11-53845) on Oct. 20,
2011. Judge Sandra R. Klein presides over the case. Alan G.
Tippie, Esq., and Avi E. Muhtar, Esq., at SulmeyerKupetz, serve as
the Debtor's counsel. In the second petition, the Debtor
scheduled assets of $17,499,500 and debts of $9,300,331. The
petition was signed by Mattie B. Evans, chief executive member.
Kenneth Blake, CPA, acts as accountant.
C&M RUSSELL: Wants to Hire Professional Property Manager
--------------------------------------------------------
C & M Russell LLC asks permission from the U.S. Bankruptcy Court
to employ a professional property manager to manage the Debtor's
properties.
The Debtor's properties are located in either Redondo Beach or El
Segundo, California, namely:
(a) 2120 Vanderbilt Lane, Redondo Beach, California 90278;
(b) 2722 Vanderbilt Lane, Redondo Beach, California 90278;
(c) 216 West Imperial Avenue, El Segundo, California 90245;
(d) 302 West Imperial Avenue, El Segundo California, 90245;
and
(e) 732 West Imperial Avenue, El Segundo California, 90245.
About C&M Russell
Los Angeles, California-based C & M Russell LLC owns five
multifamily apartment buildings all located in either Redondo
Beach or El Segundo, California. The Company first made a pro
se Chapter 11 bankruptcy filing (Bankr. C.D. Calif. Case No.
11-49889) on Sept. 21, 2011. C & M Russell filed for another
Chapter 11 petition (Bankr. C.D. Case No. 11-53845) on Oct. 20,
2011. Judge Sandra R. Klein presides over the case. Alan G.
Tippie, Esq., and Avi E. Muhtar, Esq., at SulmeyerKupetz, serve as
the Debtor's counsel. In the second petition, the Debtor
scheduled assets of $17,499,500 and debts of $9,300,331. The
petition was signed by Mattie B. Evans, chief executive member.
Kenneth Blake, CPA, acts as accountant.
CAGLE'S INC: Committee's Financial Advisor Hikes Rates
------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
case of Cagle's, Inc., and Cagle's Farms, Inc., has filed a
supplemental application with the Bankruptcy Court related to the
panel's employment of J.H. Cohn LLP as financial advisors. The
Committee said the firm has raised its hourly rates as of Feb. 1,
necessitating the filing of the supplemental application.
The Court first approved the Committee's employment of JH Cohn in
November 2011.
Effective as of Feb. 1, the firm's billing rates for the
accounting and financial advisory services of the nature to be
rendered to the Committee are:
Professional Adjusted 2012 Hourly Rate
------------ -------------------------
Partners/Senior Partners $580 - $720
Managers/Senior
Managers/Directors $430 - $610
Other Professional Staff $270 - $400
Paraprofessionals $180
In the event no objection is filed to JH Cohn's proposed rate
increases, then the proposed rate increases will be deemed
approved and no hearing regarding the Supplemental Application
will be held.
About Cagle's
Cagle's Farms (NYSE: CGL.A) -- http://www.cagles.net/-- engages
in the production, marketing, and distribution of fresh and frozen
poultry products in the United States.
Cagle's Inc. and its wholly owned subsidiary Cagle's Farms filed
on Oct. 19, 2011, voluntary petitions for relief under Chapter 11
of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 11-80202 and
11-80203). Paul K. Ferdinands, Esq., at King & Spalding, in
Atlanta, Georgia, serves as counsel. FTI Consulting, Inc., serves
as the Debtors' financial advisors. Kurtzman Carson LLC serves as
their claims, noticing, and balloting agent. In its schedules,
Cagle's Inc. disclosed $81,998,077 in assets and $55,304,599 in
liabilities as of the Petition Date.
The Official Committee of Unsecured Creditors is represented by
McKenna Long & Aldridge LLP and Lowenstein Sandler as counsel.
J.H. Cohn LLP serves as the panel's financial advisors.
CAGLE'S INC: Lease Decision Period Extended Until May 16
--------------------------------------------------------
Cagle's Inc. and Cagle's Farms, Inc. obtained an interim order
extending their deadline under Section 365(d)(4)(A) of the
Bankruptcy Code to decide whether to assume or reject unexpired
leases of nonresidential real property. The lease decision period
is extended through and including May 16, 2012.
The Court will hold a final hearing on March 14, 2012 at 10:00
a.m.
The Debtors cited several factors in support of their request:
-- the Debtors have continued to pay any and all rent required
under the Lease on a post-petition basis and intend to
continue doing so;
-- this is a large and complex case; and
-- the lessor will not be damaged beyond the compensation
available under the Bankruptcy Code due to the Debtors'
continued occupation of the property.
About Cagle's
Cagle's Farms (NYSE: CGL.A) -- http://www.cagles.net/-- engages
in the production, marketing, and distribution of fresh and frozen
poultry products in the United States.
Cagle's Inc. and its wholly owned subsidiary Cagle's Farms filed
on Oct. 19, 2011, voluntary petitions for relief under Chapter 11
of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 11-80202 and
11-80203). Paul K. Ferdinands, Esq., at King & Spalding, in
Atlanta, Georgia, serves as counsel. FTI Consulting, Inc., serves
as the Debtors' financial advisors. Kurtzman Carson LLC serves as
their claims, noticing, and balloting agent.
In its schedules, Cagle's Inc. disclosed $81,998,077 in assets and
$55,304,599 in liabilities as of the Petition Date.
The Official Committee of Unsecured Creditors is represented by
McKenna Long & Aldridge LLP and Lowenstein Sandler as counsel.
J.H. Cohn LLP serves as its financial advisors.
CAGLE'S INC: Plan Exclusivity Period Extended Until June 15
-----------------------------------------------------------
The U.S. Bankruptcy Court approved Cagle Inc. and Cagle's Farms'
motion to extend the exclusivity periods during which only the
Debtors may file and solicit acceptances of a plan of
reorganization.
The Debtors have an initial 120 days from the bankruptcy filing
date -- through Feb. 16, 2012 -- within which they have the
exclusive right to file a plan and 180 days -- through April 16,
2012 -- within which they have the exclusive right to solicit plan
votes.
The Court extended the Exclusive Plan Filing period through and
including June 15, 2012; and the Exclusive Solicitation Period
through and including Aug. 14, 2012.
As reported in the Troubled Company Reporter on Jan. 13, 2012, the
official creditors' committee and the U.S. Trustee have filed
opposition to Cagle's proposal to implement a $250,000 bonus
program. The U.S. Trustee said there is a "very real possibility"
the company is "administratively insolvent," meaning it won't be
able to pay debt that arose after the Chapter 11 filing in
October.
About Cagle's
Cagle's Farms (NYSE: CGL.A) -- http://www.cagles.net/-- engages
in the production, marketing, and distribution of fresh and frozen
poultry products in the United States.
Cagle's Inc. and its wholly owned subsidiary Cagle's Farms filed
on Oct. 19, 2011, voluntary petitions for relief under Chapter 11
of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 11-80202 and
11-80203). Paul K. Ferdinands, Esq., at King & Spalding, in
Atlanta, Georgia, serves as counsel. FTI Consulting, Inc., serves
as the Debtors' financial advisors. Kurtzman Carson LLC serves as
their claims, noticing, and balloting agent.
In its schedules, Cagle's Inc. disclosed $81,998,077 in assets and
$55,304,599 in liabilities as of the Petition Date.
The Official Committee of Unsecured Creditors is represented by
McKenna Long & Aldridge LLP and Lowenstein Sandler as counsel.
J.H. Cohn LLP serves as its financial advisors.
No trustee or examiner has been appointed in the Debtors'
bankruptcy cases.
CAGLE'S INC: Creditors' Proofs of Claim Due April 2
---------------------------------------------------
The creditors of Cagle's Farms and Cagles Inc. are required to
file their proofs of debt by April 2, 2012, to be included in the
company's dividend distribution.
The company's claim agent is:
Cagle's Claims Processing Center
c/o Kurtzman Carson Consultants LLC
2335 Alaska Avenue
El Segundo, CA 90245
Cagle's Farms (NYSE: CGL.A) -- http://www.cagles.net/-- engages
in the production, marketing, and distribution of fresh and frozen
poultry products in the United States.
Cagle's Inc. and its wholly owned subsidiary Cagle's Farms filed
on Oct. 19, 2011, voluntary petitions for relief under Chapter 11
of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 11-80202 and
11-80203). Paul K. Ferdinands, Esq., at King & Spalding, in
Atlanta, Georgia, serves as counsel. FTI Consulting, Inc., serves
as the Debtors' financial advisors. Kurtzman Carson LLC serves as
their claims, noticing, and balloting agent.
In its schedules, Cagle's Inc. disclosed $81,998,077 in assets and
$55,304,599 in liabilities as of the Petition Date.
The Official Committee of Unsecured Creditors is represented by
McKenna Long & Aldridge LLP and Lowenstein Sandler as counsel.
J.H. Cohn LLP serves as its financial advisors.
No trustee or examiner has been appointed in the Debtors'
bankruptcy cases.
CDC CORP: Court OKs Software Shares Auction, $250MM Opening Bid
---------------------------------------------------------------
The Hon. Paul W. Bonapfel of the U.S. Bankruptcy Court for the
Northern District of Georgia authorized CDC Corp. to sell shares
in CDC Software in an auction led by Archipelago Holdings, a
Cayman Islands exempted company.
On Feb. 1, 2012, the Debtor and Software International executed a
Share Purchase Agreement with Archipelago Holdings, a Cayman
Islands exempted company, as purchaser, for the sale of the
CDC Software Shares for a cash purchase price of $249,788,301, or
$10.50 per share.
The an auction of the CDC Software Shares on will be held on
March 16, beginning at 10:00 a.m. local time, at the offices of
the Debtor's counsel, Lamberth, Cifelli, Stokes, Ellis & Nason,
P.A., located at 3343 Peachtree Road, N.E., Suite 550, Atlanta,
Georgia 30326, or at other location as may be designated by the
Debtor. Bid deadline is set for March 9.
The Court also ordered that any overbid after the opening bid will
be made in increments of at least $2,000,000 of cash or other
equivalent value acceptable to Debtor, after consultation with the
Committee and Evolution, in its sole discretion.
The Court will consider the sale of the assets to Archipelago or
the winning bidder at a hearing on the March 20, at 11:00 a.m.
As reported in the Troubled Company Reporter on Feb. 23, 2012, CDC
said the sale would be sufficient to pay all claims, including a
$67 million judgment and $5 million owing to trade suppliers, plus
professional fees.
When the sale was first announced Feb. 7, CDC doubled in price to
close at $3.05. On Feb. 21, CDC fell 3 cents to $3.63 in over-
the-counter trading.
Committee's Objection
The Official Committee of Equity Security Holders of CDC
Corporation objected to the bid procedures motion with respect to
(i) the combined amount of the requested break-up fee and initial
minimum overbid increment and (ii) the requested minimum overbid
increment. The Committee said that the bid protections as may
chill the bidding process.
The Committee also objected to, among other things, the initial
minimum overbid increment of $10,000,000, which is approximately
4% of the purchase price. The Committee suggested that the
initial minimum overbid increment must be no more than $1,000,000,
which would reduce the initial bid protection total to no more
than $10,991,532, which is approximately 4.4% of the purchase
price.
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.
The Official Committee of Equity Security Holders of CDC
Corporation is represented by Troutman Sanders. The Committee
tapped Morgan Joseph TriArtisan LLC as its financial advisor.
CDC PROPERTIES I: Chapter 11 Bankruptcy Case Closed
---------------------------------------------------
The Hon. Paul B. Snyder of the U.S. Bankruptcy Court for the
Western District of Washington closed the Chapter 11 case of CDC
Properties I, LLC, on Feb. 15, 2012. The Debtor had filed an
application for final decree, stating that the Joint Plan of
Reorganization has substantially been consummated. The Court
confirmed the Plan in Nov. 22, 2011.
A copy of the Chapter 11 Plan, as accepted by all voting
creditors, is available for free at:
http://bankrupt.com/misc/cdcpropertiesI.doc119.pdf
The Plan centers on the restructuring of the Debtor's obligations
to its three largest creditors: Midland Loan Services, Inc., Wells
Fargo Bank, N.A., and Equity Funding, LLC, and the payment in full
to the Debtor's unsecured creditors. Unsecured creditors are to
receive semi-annual payments of $50,000 from the income of the
real property each January and July commencing in January 2012
until the claims are paid in full. Holders of equity interests in
will retain their interests.
About CDC Properties I
Tacoma, Washington-based CDC Properties I, LLC, owns 10 commercial
buildings in Washington. Most of the space in its buildings is
leased to the State of Washington and occupied by various of its
agencies. CDC Properties filed for Chapter 11 bankruptcy
protection (Bankr. W.D. Wash. Case No. 11-41010) on Feb. 10, 2011.
Brad A. Goergen, Esq., and Mark D. Northrup, Esq., at Graham &
Dunn PC, in Seattle, Wash., represent the Debtor. The Debtor
disclosed $47,304,590 in total assets, and $75,714,502 in total
liabilities as of the Chapter 11 filing.
CITIZENS REPUBLIC: Reports $6.6 Million Net Income in 2011
----------------------------------------------------------
Citizens Republic Bancorp, Inc., filed with the U.S. Securities
and Exchange Commission its annual report on Form 10-K disclosing
net income of $6.66 million on $407.82 million of total interest
income for the year ended Dec. 31, 2011, compared with a net loss
of $292.92 million on $484.44 million of total interest income
during the prior year.
The Company's balance sheet at Dec. 31, 2011, showed $9.46 billion
in total assets, $8.44 billion in total liabilities, and
$1.02 billion total shareholders' equity.
A full-text copy of the Form 10-K is available for free at:
http://is.gd/F9SlSJ
About Citizens Republic
Flint, Michigan-based Citizens Republic Bancorp, Inc., is a
diversified banking and financial services company that is
registered as a bank holding company under the Bank Holding
Company Act of 1956, as amended. Citizens provides a full range
of banking and financial services to individuals and businesses
through its banking subsidiary, Citizens Bank.
As reported by the TCR on Feb. 8, 2012, Fitch Ratings has upgraded
the long-term Issuer Default Rating (IDR) of Citizens Republic
Bancorp, Inc. (CRBC) and its principal bank subsidiaries two
notches to 'B' from 'CCC'. Fitch's rating action follows CRBC's
three quarters of profitability after having reported losses for
the prior 12 quarters. This has been primarily accomplished
through management's accelerated asset resolution program, whereby
it conducted bulk sales, note sales, and workouts of problem
loans.
* * *
This concludes the Troubled Company Reporter's coverage of
Citizens Republic until facts and circumstances, if any, emerge
that demonstrate financial or operational strain or difficulty at
a level sufficient to warrant renewed coverage.
CITY CAPITAL: Suspending Filing of Reports with SEC
---------------------------------------------------
City Capital Corporation filed a Form 15 notifying of its
suspension of its duty under Section 15(d) to file reports
required by Section 13(a) of the Securities Exchange Act of 1934
with respect to its common stock, par value $0.001 per share.
Pursuant to Rule 12g-4, the Company is suspending reporting
because there are currently less than 500 holders of record of the
common shares. There were only 481 holders of the common shares
as of Feb. 9, 2012.
About City Capital
Franklin, Tenn.-based City Capital is a professional management
and diversified holding company engaged in leveraging investments,
holdings and other assets to build value for investors and
shareholders.
After auditing the Company's financial results in 2008 and 2009,
Spector & Associates LLP expressed substantial doubt about City
Capital Corporation's ability as a going concern. The firm noted
that the Company has recurring losses, substantial accumulated
deficit and negative cash flows from operations.
The Company's balance sheet at Dec. 31, 2009, showed $2,997,088 in
total assets, $9,820,316 in total liabilities, and a stockholder's
deficit of $6,674,519.
City Capital Corp. said it could not timely file its quarterly
report on Form 10-Q for the period ended June 30, 2010, with the
Securities and Exchange Commission.
The Company filed its last Quarterly Report with the SEC on
March 23, 2010, for the quarterly period ended Sept. 30, 2009.
The Company filed its most recent Annual Report on June 15, 2010,
for the year ended Dec. 31, 2009.
CLAIRE'S STORES: Offering Add'l $100-Mil. of 9% Sr. Secured Notes
-----------------------------------------------------------------
Claire's Stores, Inc., announced the sale of an additional $100
million aggregate principal amount of 9.00% senior secured first
lien notes due 2019. The Additional Notes were priced at 101.50%
of the principal amount thereof, plus accrued and unpaid interest
from Feb. 28, 2012. The Additional Notes will be issued by the
Company and will be of the same series as the $400 million
aggregate principal amount of 9.00% Senior Secured First Lien
Notes due 2019. The Original Notes will be issued by Claire's
Escrow II Corporation on Feb. 28, 2012. Settlement of the
Additional Notes is scheduled to occur on March 12, 2012.
The Original Notes will be issued by the Escrow Issuer prior to
the merger of the Escrow Issuer with and into the Company upon the
availability of the Company's financial statements for the fiscal
year ended Jan. 28, 2012, demonstrating compliance with certain
existing debt covenants. The Company expects that those financial
statements will be available on or prior to the issuance of the
Additional Notes on the settlement date. The Additional Notes
and, upon the merger, the Original Notes, will each be guaranteed
by all of the Company's direct or indirect wholly-owned domestic
restricted subsidiaries and secured on a first-priority basis by
substantially all of the assets of the Company and the guarantors.
The security interests will rank equally with those securing the
Company's senior secured credit facility.
The Company intends to use the net proceeds of the offering of the
Notes to reduce outstanding indebtedness under the Company's
current credit facility.
The Additional Notes are being offered only to "qualified
institutional buyers" in reliance on Rule 144A under the
Securities Act of 1933, as amended, and outside the United States
only to non-U.S. persons in reliance on Regulation S under the
Securities Act. The Additional Notes have not been and will not
be registered under the Securities Act or any state securities
laws and may not be offered or sold in the United States absent
registration or an applicable exemption from the registration
requirements of the Securities Act and applicable state securities
laws.
About Claire's Stores
Claire's Stores, Inc. -- http://www.clairestores.com/-- operates
as a specialty retailer of fashion accessories and jewelry for
preteens and teenagers, as well as for young adults in North
America and internationally. It offers jewelry products that
comprise costume jewelry, earrings, and ear piercing services; and
accessories, including fashion accessories, hair ornaments,
handbags, and novelty items.
Based in Pembroke Pines, Florida, Claire's Stores operates under
two brands: Claire's(R), which operates worldwide and Icing(R),
which operates only in North America. As of Jan. 31, 2009,
Claire's Stores, Inc., operated 2,969 stores in North America and
Europe. Claire's Stores also operates through its subsidiary,
Claire's Nippon, Co., Ltd., 213 stores in Japan as a 50:50 joint
venture with AEON, Co., Ltd. The Company also franchises 198
stores in the Middle East, Turkey, Russia, South Africa, Poland
and Guatemala.
The Company's balance sheet at Oct. 29, 2011, showed $2.81 billion
in total assets, $2.86 billion in total liabilities, and a
$44.61 million stockholders' deficit.
CLAIRE'S STORES: S&P Maintains 'B' Rating on First-Lien Notes
-------------------------------------------------------------
Standard & Poor's Ratings Services is maintaining the 'B' issue-
level rating and '2' recovery rating on U.S. specialty retailer
Claire's Stores Inc.'s first-lien notes due 2019. They remain
unchanged after the company's announcement of a $50 million
add-on to its existing first-lien notes. "Once Claire's Stores
completes the transaction, we estimate that the total size of the
first-lien notes will be $450 million. According to the company,
it will use the proceeds to reduce outstanding indebtedness under
its existing term loan," S&P said.
Ratings List
Claire's Stores Inc.
Corporate Credit Rating B-/Stable/--
Senior secured
$450 mil 8.7% first-lien notes B
Recovery Rating 2
CLEAR CHANNEL: Fitch Rates Proposed $1.25-Bil. Sr. Notes at 'B+'
----------------------------------------------------------------
Fitch Ratings has assigned a 'B+/RR3' rating to Clear Channel
Worldwide Holdings, Inc.'s (CCWW) proposed $1.25 billion senior
subordinated eight-year notes maturing 2020. Fitch expects CCWW
will use the proceeds to ultimately fund a dividend to the
shareholders of Clear Channel Outdoor Holdings, Inc. (CCOH), which
is 89% owned by Clear Channel Communications, Inc. (Clear
Channel). Clear Channel will in turn use its portion of the
proceeds (approximately $1.1 billion) to reduce secured debt. The
Outlook on all ratings is Stable.
CCWW is expected to use the proceeds to make a loan, net of
underwriting fees, of $1.23 billion to its parent Clear Channel
Outdoor, Inc. (CCO), which in turn will make a special cash
dividend of the loan proceeds to its direct parent CCOH. CCOH is
89% owned by Clear Channel Holdings, Inc. (CCH) (88.5% directly,
and .4% via CCH's subsidiary CC Finco, which purchased the shares
on the open market during 2011 under Clear Channel's share
repurchase program), and 11% by a public stake. CCH is 100% owned
by Clear Channel. CCWW is a holding company that owns the
international operations of CCOH.
The notes will be guaranteed by the same entities that guarantee
CCWW's 2017 unsecured notes - CCOH, CCO, and certain of CCOH
domestic subsidiaries that house the majority of the company's
domestic outdoor operations. The international operations are not
part of the guarantee. The guarantee will be junior to the
guarantee on the unsecured notes. The notes will be callable
beginning 2015.
CCWW will issue two tranches of notes in a single transaction
under separate indentures: $250 million Series A and $1 billion
Series B. The Series B notes are subject to certain more
restrictive covenants (limitations on asset sales, limitation on
restricted payments, limitations on restricted subsidiaries) to
which CCWW will be bound as long as the series B notes are
outstanding.
Upon the occurrence of a change of control, CCWW will be required
to make an offer to repurchase the bonds at 101%. A change of
control occurs in the event of i) CCWW is no longer a wholly-owned
subsidiary of CCOH; ii) CCOH becomes a wholly owned subsidiary of
Clear Channel; iii) a sale of all or substantially all of CCOH
assets to persons other than a Permitted Holder (private equity
owners, management, Clear Channel); iv) the acquisition of a
majority of the voting stock of CCOH by persons other than
Permitted Holders; iv) certain changes to the Board of Directors.
Several of the covenants governing the subordinated notes are more
flexible than those governing CCWW's existing 2017 unsecured
notes. The notes provide a restricted payments basket of 50% of
consolidated net income beginning April 1, 2012, plus cash
proceeds from equity sales, equity contributions, and asset sales.
Other carve-outs include a one-time $500 million dividend and
debt-funded dividends assuming total leverage remains below 7.0
times (x). The company is also subject to a 7.0x total leverage
test for incremental debt and debt-funded dividends (the unsecured
indenture is 6.5x total leverage for incremental debt and 6.0x
total leverage for debt-funded dividends). However, the unsecured
restrictions are in place while those notes remain outstanding.
The unsecured notes are callable beginning December 2012.
The transaction is in-line with Fitch's expectations. The ratings
on CCWW incorporated Fitch's expectations that leverage would
migrate towards 6x, and increased interest expense would reduce
its free cash flow, as Clear Channel sought to extract cash from
this entity via debt-funded dividends. Fitch estimates that total
leverage at CCOH will increase from the current 3.2x to 4.7x
(under the leverage as defined under the bond indenture; Fitch
estimates that total leverage is 3.5x, growing to 5.2x). Fitch
estimates that there is currently approximately $1 billion of
additional debt-funded dividend capacity, in addition to a one-
time $500 million cash dividend, available from CCOH.
Clear Channel will use the $1.1 billion dividend it receives to
permanently repay a portion of the $1.33 billion outstanding under
its revolving credit fund (RCF) maturing 2014. Pro forma for the
repayment, Fitch estimates approximately $231 million outstanding
under the RCF, and $602 million availability (less any letters of
credit [LOCs] outstanding). Fitch estimates that the transaction
will reduce gross secured leverage at Clear Channel by 0.6x, to
7.3x, from 7.9x at Dec. 31, 2011. Total consolidated leverage
(which includes CCWW) will increase 0.1x, to 11.1x.
The transaction has no impact on Clear Channel's ratings or
recovery analysis, which had previously incorporated maximum debt-
funded dividends out of CCOH. Nonetheless, the transaction is a
positive for Clear Channel's near-term liquidity, as it will
reduce the 2014 maturity wall to $1.7 billion from $2.8 billion.
The ratings had previously incorporated Fitch's view that the
company's financial flexibility around 2014 maturities had
improved over the past year. While a maturity extension on 2014
bank debt will provide the company with increased financial
flexibility to deal with subsequent maturities, Fitch believes
Clear Channel could likely handle the $2.4 billion of combined
legacy notes and bank debt that mature 2012-2014 using a
combination of cash swept from CCOH that is held in Clear
Channel's accounts, further dividends from CCOH, and issuance out
of Clear Channel.
That being said, Clear Channel still faces $12.2 billion of debt
(primarily bank loans) maturing in 2016. Addressing this will
require flexibility on the part of 2016 term-loan holders by way
of maturity extension, which Fitch believes will depend on Clear
Channel's ability to reduce secured leverage to a level where
lenders would be willing to recommit capital.
At Dec. 31, 2011, Clear Channel had $686 million of cash,
excluding $543 million of cash held at CCOH. This cash includes
$656 million of CCOH funds swept to Clear Channel for cash
management purposes. Clear Channel can access these funds and use
them at its discretion, although they are due to CCOH on demand.
Even absent this cash, Clear Channel has adequate backup
liquidity, including $602 million availability under its RCF (less
any LOCs) and an undrawn asset-based lending (ABL) facility
(subject to an undisclosed borrowing base; $321 million
outstanding at first quarter 2011, the last reported date before
the facility was repaid). Any FCF comes from CCOH; although a
portion would be swept to Clear Channel, this entity does not
currently generate cash on its own.
The ratings at CCOH incorporate Fitch's favorable outlook on the
outdoor industry and CCOH's position within it. The ratings also
consider Fitch's expectations that total leverage is likely to
migrate towards 6x over the next several years as CCU seeks to
maximize its cash from the subsidiary. The ratings also
incorporate the legal provisions that separate the two entities
and protect the subsidiary, including dividend restrictions, lack
of guarantee, and CCOH protection from a CCU default. However,
there are strong operational ties to the weaker parent, including
centralized treasury and senior management overlap. Additionally,
the parent can pull cash out of the sub (with restrictions), which
it will rely on to service a portion of its debt.
Pro forma for the transaction, there is approximately $3.8 billion
of debt at CCWW, consisting primarily of:
-- $500 million series A senior unsecured notes, maturing
December 2017;
-- $2 billion series B senior unsecured notes, maturing December
2017;
-- $1.25 billion of the proposed subordinated notes.
CCOH's Recovery Ratings reflect Fitch's expectation that
enterprise value would be maximized as a going concern. stresses
outdoor EBITDA by 30%, to approximately the level where the
company could not cover its fixed charges (pro forma for the new
issuance), and applies a 7x valuation multiple. Fitch estimates
the enterprise value would be $3.2 billion. This indicates 100%
recovery for the unsecured notes; however, Fitch notches the debt
up only two notches from the Issuer Default Rating (IDR) given the
unsecured nature of the debt. In Fitch's analysis the proposed
subordinated notes recover 53%, indicating 'RR3', or one notch up
from the IDR.
For more details please see Fitch's press release 'Fitch Affirms
Clear Channel's Ratings; Outlook Stable' dated Feb. 7, 2012.
Fitch currently rates Clear Channel and CCWW as follows:
Clear Channel
-- Long-term IDR at 'CCC';
-- Senior secured term loans and senior secured revolving credit
facility (RCF) at 'CCC/RR4';
-- Senior unsecured leveraged buyout (LBO) notes at 'C/RR6';
-- Senior unsecured legacy notes at 'C/RR6'.
CCWW
-- Long-Term IDR at 'B';
-- Senior unsecured notes at 'BB-/RR2'.
Fitch has assigned the following rating to CCWW:
-- Senior subordinated notes at 'B+/RR3'.
CLEAR CHANNEL: S&P Rates $1.2-Billion Subordinated Notes at 'B'
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned Clear Channel
Worldwide Holdings Inc.'s proposed $1.25 billion senior
subordinated notes due 2020 an issue-level rating of 'B' (two
notches higher than the 'CCC+' corporate credit rating on the
parent company). "We also assigned this debt a recovery rating of
'1', indicating our expectation of very high (90% to 100%)
recovery in the event of a payment default," S&P said.
"In addition, we are affirming our 'CCC+' corporate credit rating
and negative outlook on CC Media Holdings and operating subsidiary
Clear Channel, which we view on a consolidated basis," S&P said.
"We also revised our recovery rating on the existing senior
secured debt at CCU to '4', indicating our expectation of average
(30% to 50%) recovery for lenders in the event of a payment
default, from '3' (50% to 70% recovery expectation). The revision
of the recovery rating reflects the meaningful increase in debt
issued at Clear Channel Worldwide Holdings and the corresponding
reduction in our estimate of CCO's equity value available to
secured lenders in our simulated year of default," S&P said.
"We believe CCU will use proceeds from the proposed transaction to
repay a portion of its 2014 debt maturities, specifically its
revolving credit facility, which had $1.3 billion outstanding as
of Dec. 31, 2011," S&P said.
"Importantly, because of the public equity stake in CCO, $135
million of the distribution is unavailable to CCU to repay debt,
which we regard as an inefficiency in the current capital
structure. As a result, assuming successful completion of the
transaction, we would have increased confidence that the company
could meet its remaining $1.1 billion of 2014 secured debt
maturities through a combination of cash and/or additional
borrowings at the CCO or CCU level. Pro forma for the proposed
transaction, total debt to EBITDA at CCO increases to 4.6x from
3.1x, below the 6.5x incurrence covenant in the existing CCO
indentures. Consolidated CC Media pro forma cash interest coverage
declines minimally, to about 1.4x from 1.5x as of Dec. 31, 2011,"
S&P said.
"The 'CCC+' corporate credit rating reflects the company's steep
debt leverage and significant 2016 debt maturities of roughly
$12.3 billion. Over the last year, we believe the company has made
progress in addressing its 2014 debt maturities, as well as
increasing flexibility for future transactions. We continue to
view a significant increase in the average cost of debt or
deterioration in operating performance as a major risk as the
company proceeds with a strategy to deal with its 2016 maturities.
We view CC Media's financial risk profile as 'highly leveraged'
(based on our criteria), given the company's significant
refinancing risk, narrow EBITDA coverage of interest expense, and
minimal discretionary cash flow compared to its debt burden. In
our view, the company has a 'fair' business risk profile, because
of its position as the largest U.S. radio and global outdoor
advertising operator," S&P said.
"CC Media Holdings is the largest U.S. radio broadcaster, with
over 55% of its stations located in the top 100 markets. The
company has the No. 1 or No. 2 audience position in the top 10
markets, which, in conjunction with its size and scale, confers
significant cost efficiencies. Ad rates in the radio industry
dropped sharply during the recession, and although we believe
Clear Channel and competitors experienced ad rate growth in 2010
and 2011, we suspect ad rates remain well below prerecession
levels. The company's more stable global outdoor business has good
geographic diversity, with a presence in 30 countries. In our
view, there are moderate longer-term growth prospects at the
outdoor segment, which is under less structural pressure than
certain other local media, such as newspapers and directories. The
outdoor segment is also benefiting from the increasing deployment
of digital billboards and the ongoing slow recovery in ad rates
and occupancy. While audience levels have remained relatively
stable in radio, we believe visibility into 2012 and beyond
remains low, and in our opinion radio operators will have to
meaningfully enhance their online and mobile efforts to maintain
sustained growth. Clear Channel's established local and national
market reach work to its advantage in this endeavor," S&P said.
"Under our base-case scenario, in 2012 we expect revenue and
EBITDA to grow at low- to mid-single-digit and high-single-digit
percentage rates. However, visibility remains low, and our outlook
could improve or worsen based on the global economy and
advertising demand. For 2012, given more difficult revenue
comparisons in the first half of the year and continued global
economic uncertainty, we expect core spot revenue in the U.S.
radio industry to be relatively flat. A likely boost from
political revenue and a quarter's contribution from the Westwood
One acquisition, in our view, could lead to low-single-digit radio
revenue growth for Clear Channel. In our opinion, the outdoor
industry has less structural pressure than radio, although
economic weakness in Europe could hamper international growth. On
a consolidated basis, under our base case scenario, we expect
outdoor revenue to grow at a low- to mid-single-digit rate in
2012," S&P said.
CLIFFS CLUB: Files for Bankr. to Sell to Carlile, Drop Memberships
------------------------------------------------------------------
Travelers Rest, South Carolina-based The Cliffs Club & Hospitality
Group, Inc., doing business as The Cliffs Golf & Country Club,
along with 10 affiliates, sought Chapter 11 protection (Bankr. D.
S.C. Lead Case No. 12-01220) in Spartanburg, on Feb. 28, 2012.
The parent, The Cliffs Communities Inc., and affiliated
development companies (DevCo) did not file for Chapter 11.
The Cliffs has eight premier, private master-planned residential
communities, each to have its own world-class golf course.
Approximately 3,734 lots have been sold. There are currently
1,385 finished homes, with 63 under construction. The properties
for sale are owned by non-debtor DevCo entities.
The Debtors operate the exclusive membership clubs for golf,
tennis, wellness and social activities at The Cliffs' communities
in North and South Carolina. The clubs have 2,280 members, and
there are 766 resigned members with refundable deposits totaling
$37 million. The Debtors do not own the golf courses -- they only
own or lease all the "core amenities" for the operation of the
golf courses.
Road to Bankruptcy
Timothy P. Cherry, president and chief executive officer, said in
a court filing, that as a result of a prolonged recession in the
high-end real estate market, beginning in 2008, CCI began to look
for replacement debts as banks and traditional lenders withdrew
from the marketplace. Over the last two years, CCI has engaged
five different investment banking groups -- TriLyn LLC, the
Sonneblick Goldman division of Cushman Wakefield, KPG Investments
LLC, the Carl Marks Advisory Group, and Carlton LLC -- to run a
process to identify potential investors and facilitate the
infusion of new capital.
Mr. Cherry said the Debtors have faced severe liquidity pressures
that precipitated the decision to commence the Chapter 11 cases.
Mr. Cherry continued, "The Debtors' revenues and liquidity have
been severely impacted by the overall slowdown in the United
States economy and real estate market. As a result, the Debtors
have experienced a slower than anticipated sales pace of club
memberships, reduced utilization of club facilities, difficulty
and servicing their existing debt, difficulty in obtaining
additional or replacement financing, and challenges in funding the
completion of planned club amenities and the renovation of
existing amenities."
Beginning in August 2011, the Debtors began an intensive process
to locate a "stalking horse" for the purchase of the Debtors'
assets. Carlile Development Group will buy the Debtors' assets,
absent higher and better offers at a bankruptcy court-sanctioned
auction.
Prepetition Capital Structure
For the fiscal year ending Dec. 31, 2011, the Debtors'
consolidated financial statements reflect $29 million in revenue,
assets of $175 million at book value, and liabilities of $333
million. Included in those amounts are the full amounts of all
refundable membership deposits.
The Debtors owe $72.2 million on certain Series A Notes due 2017
and Series B Notes due 2017, under which Wells Fargo Bank, N.A.,
serves as indenture trustee. The debt is secured by personal
property and leasehold mortgage of the Debtors. The Debtors also
have senior secured liabilities of $2 million on a bridge loan
obtained on Jan. 31, 2012.
The Debtors relate that they owe $37 million to resigned members
of the club. They also owe $181 million in face amount of
potential club membership refunds to current members should they
resign from the club.
Chapter 11 Case
The Debtors say that they will continue normal operations while
undergoing the Chapter 11 process.
The Debtors filed typical first day motions, including requests to
implement their existing cash management system, extend the time
to file their schedules of assets and liabilities, honor their
obligations to customers, and pay prepetition employee wages and
benefits.
The Debtors have also filed a motion to use cash collateral and
obtain DIP financing of $7.5 million from Carlile Development
Company LLC. The financing will bear interest of 12% per annum on
the outstanding balance, according to the term sheet. Fees will
consist of a 2% origination fee and payment of the lender's
reasonable legal expenses and monitoring costs. The facility will
be secured by a super-priority lien on all property of the
Debtors' estates. The facility will mature in six monts, with a
right to extend for another six months.
McKenna Long & Aldridge LLP serves as bankruptcy counsel to the
Debtors and Dana Wilkinson is the local counsel. GGG Partners,
LLC and Katie S. Goodman have been tapped as restructuring
advisors and chief restructuring officer, respectively. BMC
Group, Inc., is the claims, noticing and balloting agent.
Pursuant to the term sheet with Carlile, through a confirmed plan
of reorganization, it is contemplated that:
(i) The Debtors will transfer all assets -- other than
avoidance actions and certain other causes of action -- to
Carlile;
(ii) Carlile will assume the principal outstanding on the senior
secured notes;
(iii) All administrative expenses and priority claims will be paid
in full;
(iv) Any valid undisputed mechanics or materialmen's liens will
be paid in full over time;
(v) Any undisputed trade unsecured claims (other than member
claims) will be paid pro rata and in the aggregate 75% over
time by Carlile;
(vi) Executory contracts of members will be rejected and all
current and former members, in good standing, will be
invited to join a new club upon paying a transfer fee and
dues on a go forward basis; and
(vii) A litigation trust will be established holding $100,000 cash
and the Debtors' avoidance actions and certain causes of
action for payment of member claims for the benefit of those
members who do not elect to join the new club.
The transaction described in the Term Sheet is subject to higher
and better offers. The Debtors have offered to pay a "break up"
fee to Carlile if it is outbid. The Debtors have agreed to pay a
$1 million break-up fee plus $750,000 expense reimbursement which
will increase by an additional $100,000 per month for each month
after the first six months after the Petition Date until paid in
full.
According to the Term Sheet, every Rejoining Member will pay to
Carlile a one-time transfer fee as follow, if paid within 30 days
of the Plan Closing: (i) Wellness -- $1,500; (ii) Family --
$2,500, and Golf -- either $5,000 in one payment, or $5,500
($2,5000 initial, five quarterly payments for the balance).
Annual dues will be $10,380 for Golf; $5,280 for Family and $3,720
for Wellness.
Sale of Other Properties Outside Chapter 11
Mr. Cherry said in a court filing that Carlile and other
interested investors are currently in discussions with various
secured creditors of different non-debtor DevCo entities about the
potential acquisition of specific real estate collateral,
including lots and undeveloped land in the Cliffs communities.
According to the Term Sheet, Carlile will commit up to $85 million
to acquire, joint venture, land bank, or otherwise gain control of
development land and lots.
COLONY RESORTS: CEO Monahan Resigns; Exec. VP Ciancimino Also Out
-----------------------------------------------------------------
David J. Monahan notified Colony Resorts LVH Acquisitions, LLC, of
his resignation as Chief Executive Officer and General Manager
effective Feb. 29, 2012. Another officer, Kenneth M. Ciancimino,
notified the Company of his resignation as Executive Vice
President - Administration effective March 31. 2012.
About Colony Resorts
Las Vegas, Nev.-based Colony Resorts LVH Acquisitions, LLC, owns
and operates the Las Vegas Hilton, a casino resort located in Las
Vegas, Nevada. The Company licenses from HLT Existing Franchise
Holding LLC the right to use the name "Hilton" and is part of
Hilton's reservation system and Hilton's "HHonors Programs(TM).
The Company's balance sheet at June 30, 2011, showed
$347.55 million in total assets, $296.17 million in total
liabilities, $61.80 million in redeemable members' equity, and a
$10.42 million members' deficit.
Default Under Term Loan
On May 11, 2006, the Company entered into a Loan Agreement with
Goldman Sachs Commercial Mortgage Capital, L.P. The Term Loan was
for an initial principal amount of $209.2 million and for an
initial term of two years. The Company has drawn an additional
$40.8 million against the Term Loan, the maximum funding of the
Term Loan. Covenants under the Term Loan restrict the Company's
future borrowing capacity. The loan had an original two-year term
and three, one-year extensions.
Interest on the loan was based on LIBOR plus 2.9% with a minimum
LIBOR rate of 1.5%. Interest incremented to LIBOR plus 3.5% from
July 2009 through May 2010 and increased to LIBOR plus 4.0% from
June 2010 through May 2011.
As of July 29, 2011, the Company is in default on its Term Loan.
Accordingly, the lender is entitled to exercise various rights,
powers and remedies including acceleration of the Loan,
termination or suspension of all or any portion of advances or
disbursement of funds from restricted cash accounts, accrual of
interest at the default rate and the exercise of remedies under
collateral documents. The Company is currently in discussions
with its lender to negotiate a restructuring of its debt. If the
Company is not successful in a restructuring agreement or entering
into a transaction to address its liquidity and capital structure,
the note holders have the ability to demand accelerated repayment
of all amounts under the Term Loan. The Company would not have
the liquidity to meet this demand.
According to the Company, these conditions raise substantial doubt
about its ability to continue as a going concern.
As reported in the TCR on March 29, 2011, Ernst & Young, in Las
Vegas, Nevada, expressed substantial doubt about Colony Resorts
LVH Acquisition's ability to continue as a going concern,
following the Company's 2010 results. The independent auditors
noted that the Company has incurred recurring net losses and has a
working capital deficiency.
The District Court of Clark County appointed Ronald Paul Johnson
as receiver for the property and businesses, including the hotel
and gaming operations, of Colony Resorts LVH Acquisitions, LLC, as
reported by the TCR on Jan. 17, 2012.
COLT DEFENSE: S&P Affirms 'B-' Corporate Credit Rating
------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B-' corporate
credit rating on Colt Defense LLC. The outlook is stable.
"At the same time, Standard & Poor's lowered the issue-level
rating on the company's unsecured debt to 'CCC+' from 'B-' and
revised the recovery rating to '5' from '4'," S&P said.
"The ratings reflect our expectation that the company will be able
to maintain adequate liquidity despite a more uncertain operating
environment over the next two years," said Standard & Poor's
credit analyst Chris Mooney.
"Colt Defense produces small arms for U.S. and foreign military
forces as well as for law enforcement agencies and resells the
related accessories. The company experienced healthy revenue
growth in the second half of 2011, supported by a large
international order that it began to deliver in the third quarter
of 2011 after delays. However, sales remain significantly below
peak levels experienced in 2009 due to decreased demand for its M4
carbine from its main customer, the U.S. military, following the
withdrawal of troops from Iraq," S&P said.
"We believe the company will attempt to offset lower U.S. sales
with more international sales combined with new product
offerings," Mr. Mooney said. "However, the international market is
more competitive and unpredictable than the U.S. market."
"Colt Defense recently began to produce M240 machine guns and
replacement M240 and M249 machine gun barrels. It won this
business from a competitor. Roughly one-third of total sales are
of spare parts, which provides some revenue visibility given the
vast amount of M4s currently in service, although the Army
recently awarded contracts for spare parts to a competitor
following a competitive solicitation," S&P said.
"Overall, we expect sales to remain relatively flat over the next
year. Although credit metrics have shown meaningful improvement in
recent months, most remain very weak, and we do not expect further
improvement, given the challenging operating environment that Colt
currently faces," S&P said.
CORRECTIONS CORP: Fitch Says Dividend Has No Rating Impact
----------------------------------------------------------
Corrections Corp. of America's (CCA) ratings, including the 'BB+'
Issuer Default Rating (IDR), are unaffected by the company's
implementation of a quarterly dividend and the cancellation of its
share repurchase program, according to Fitch Ratings. The Rating
Outlook is Stable.
In early January 2012, CCA refinanced its credit facility and
obtained additional flexibility to issue dividends or buyback
shares, so long as total debt/EBITDA leverage remains below 3.5
times (x). Subsequently, the company announced its intention to
initiate a quarterly dividend of 20 cents per share starting in
June (roughly $80 million annually), and the cancellation of its
share repurchase program.
CCA maintains solid financial flexibility as it generates annual
funds from operations less maintenance capex (AFFO) of roughly
$250 million that can be used to support an ample amount of
fluctuations in accounts receivable, prison construction, and
dividends/share repurchases. The company has guided to AFFO of
$237 million - $253 million range for the year ending Dec. 31,
2012, which is after roughly $50 million - $55 million in
maintenance capex.
Cash flow stability is supported by CCA's contractual based
income, and is adequately suited for the dividend payouts. The
short-term nature of the contacts with governmental authorities is
a concern. Typical contracts are for roughly three to five years
with multiple renewal terms, but can be terminated at any time
without cause.
Historical contract retention rates have been high, somewhat
mitigating this concern. Additionally, the company had strong
relative performance through the recent recession.
Since 2007, Fitch calculates that EBITDA has grown from $354
million to $451 million as of the fiscal year end, without
reflecting a decline in any single year. The company bought back
nearly $240 million of stock last year and more than $500 million
in aggregate since 2008, so the new annual dividend will be less
than recent share repurchase activity.
Fitch calculates total debt/latest 12 months (LTM) EBITDA was 2.8x
for the fiscal year end at Dec. 31, 2012, while interest coverage
was 6.2x, and FFO fixed charge coverage was 4.9x.
Dividend payments (and share repurchases) are limited by growth in
the senior unsecured notes' restricted payments (RP) basket, which
increases each quarter by 50% of net income. The dividend payout
is set to an amount that will draw on nearly the entirety of
quarterly additions to the RP basket, so additional shareholder
friendly actions are limited by covenants in the unsecured bond
indentures.
Liquidity is adequate. Pro forma for the credit facility
refinancing transaction as of the first quarter of 2012 (1Q'12),
unrestricted cash would be nearly $25 million with roughly $204
million of availability under the new revolver.
CCA's debt maturity profile is also attractive. The $785 million
credit facility refinancing transaction that closed on Jan. 6,
2012 replaced an existing $450 million facility, extended the term
to December 2016, repaid $335 million of 2013 unsecured notes (out
of $375 million outstanding), and achieved pricing of L+150. The
$40 million remaining on the 2013 notes and $150 million of 2014
notes are the only substantive maturities prior to the credit
facility expiration.
As of Dec. 31, 2011, leverage through the secured credit facility
was roughly 0.6x and 1.7x on a fully drawn basis. Pro forma for
the partial re-pay of the 2013 6.25% senior notes, leverage
through the secured credit facility is approximately 1.3x.
The secured credit facility is rated 'BBB-', one notch above the
IDR. CCA's accounts receivables are pledged as collateral, which
totaled $273 million as of Dec. 31, 2011. Equity in the company's
domestic operating subsidiaries and 65% of international
subsidiaries are also pledged as collateral, but long-term fixed
assets are not pledged.
The ratings incorporate management's current financial policies
including: (1) a target leverage ratio of 3.0x; (2) a fixed charge
coverage of no less than 3.5x; and (3) minimum liquidity of at
least $100 million. The company's ROI hurdle rate is 13%-15%
cash-on-cash, pre-tax EBITDA returns to all capital investments.
Fitch currently rates CCA as follows:
-- Issuer Default Rating (IDR) 'BB+';
-- $785 million secured credit facility 'BBB-';
-- $645 million of senior unsecured notes 'BB+'.
For additional information, refer to Fitch's initial rating
comment dated Feb. 7, 2012.
COUDERT BROTHERS: 2nd Cir. Revives Statek's Malpractice Claim
-------------------------------------------------------------
The U.S. Court of Appeals for the Second Circuit vacated a
bankruptcy court ruling disallowing an $85 million legal
malpractice claim filed by Statek Corporation against Coudert
Brothers LLP, saying the bankruptcy court should not have applied
the choice of law rules of New York, the state in which it sits,
but instead the choice of law rules of Connecticut, where Statek
filed its pre-bankruptcy action seeking damages that later
constituted its claim against the bankruptcy estate. Although the
case was not technically transferred under 28 U.S.C. Sec. 1404(a),
the practical effect of filing a proof of claim in the bankruptcy
court was to transfer the case from Connecticut federal court to
New York federal court. Extending the well-established rule of
Van Dusen v. Barrack, 376 U.S. 612 (1964), and Ferens v. John
Deere Co., 494 U.S. 516 (1990), the Second Circuit said that in a
case such as Statek's, where: (1) the claim before the bankruptcy
court is wholly derived from another legal claim already pending
in a parallel, out-of-state, non-bankruptcy proceeding; and (2)
the pending original, or "source," claim was filed in a court
prior to the commencement of the bankruptcy case, bankruptcy
courts should apply the choice of law rules of the state where the
prepetition claim was filed.
The Second Circuit's opinion recounts that from 1984 until 1996,
Statek was controlled by Hans Frederick Johnston. Mr. Johnston,
who had obtained control of the company by fraud, devoted most of
his tenure with Statek to looting the corporate treasury and
traveling lavishly at the company's expense. Mr. Johnston caused
Statek to retain Coudert in 1990. Although Coudert's fees were
paid by Statek, the firm counseled Mr.Johnston personally, helping
him to hide and launder various assets stolen from Statek. Among
other things, lawyers in Coudert's London office created secret
shell corporations, established offshore asset protection trusts,
procured safe deposit boxes in the name of those trusts, assisted
with West Indian real estate purchases, and coordinated the
removal from the United States of a multi-million dollar art and
stamp collection.
Eventually, Mr.Johnston's crimes were discovered. He was removed
from power and was sued by Statek for fraud and waste. While the
fraud and waste lawsuit was ongoing, Statek strove to locate
company funds that Johnston and his associate Sandra Spillane
misappropriated. The search only intensified after Statek
obtained a judgment against Mr. Johnston and Ms. Spillane for over
$30 million. Progress was slow because Mr. Johnston had spread
his ill-gotten gains widely, moving money into and out of shell
corporations, offshore trusts, art and collectibles, and a variety
of other laundering devices. Many of the assets were believed to
be in the hands of third parties.
For assistance, Statek turned to its old law firm, Coudert. As
the fraud and waste lawsuit got underway in 1996, Statek sent a
request to Coudert for any information and all files relating to
its representation of Statek during the Johnston years. Coudert
responded with six files pertaining mostly to the creation of a
Statek subsidiary. After Statek secured a large money judgment
against Mr. Johnston, it and two other judgment creditors forced
Mr. Johnston into involuntary bankruptcy in the United Kingdom.
At that point, a trustee was appointed for Mr. Johnston's estate
and charged with collecting its assets. In 2002, the trustee
approached Coudert for information about its representation of
Statek and learned about Courdert's work for Mr. Johnston moving
art to Europe. More inquires led to more revelations. By 2004, the
trustee had learned of Coudert's role in setting up Mr. Johnston's
offshore asset protection trusts, obtaining secret safe deposit
boxes, and facilitating the West Indian property deal. Statek
believes that Coudert's delay turning over files and information,
to which as a former client it was entitled, allowed Mr. Johnston
to irretrievably dispose of millions of dollars. Statek also
asserts that if Coudert had been forthcoming about its
representation during Mr. Johnston's reign, Statek would have
saved the time and money it was forced to expend recovering assets
hidden around the world. All told, Statek claims that Coudert's
inaction has cost it in the neighborhood of $85 million.
In October 2005, Statek filed a malpractice lawsuit against
Coudert in state court in Connecticut where Mr. Johnston had
allegedly lived, run Statek, and received many of Coudert's
services. Several months later, Coudert -- which was already in
dissolution -- filed a motion to dismiss Statek's action on the
basis of lack of personal jurisdiction and forum non conveniens.
While that motion was pending, Coudert filed a Chapter 11 petition
in the Southern District of New York. Statek thereafter filed a
proof a claim based on its pending malpractice action, and it
attached to its claim as an exhibit the complaint it had filed in
state court almost a year earlier.
In March 2007, Coudert removed the Connecticut action to the
United States District Court for the District of Connecticut
pursuant to 28 U.S.C. Sec. 1452, which allows for removal of any
state court action over which there is bankruptcy jurisdiction.
Once the Connecticut action was removed, Statek moved the
bankruptcy court in New York for relief from the automatic stay so
that it could proceed with the malpractice action in federal
district court in the District of Connecticut. Coudert objected,
and the two sides ultimately compromised: the stay was lifted only
as to conducting discovery on and resolving Coudert's motion to
dismiss in the Connecticut action. In February 2008, the district
court in Connecticut (Underhill, J.) conditionally dismissed
Statek's complaint on forum non conveniens grounds, but Coudert
would not consent to the conditions. The case thus remained
pending in Connecticut and the stay was automatically reimposed.
In June 2008, Statek again moved the bankruptcy court for relief
from the stay, and the parties again settled on less than a full
relief from the stay. In August 2008, the stay was partially
lifted so that Statek could file an amended complaint in the
District of Connecticut, which was also incorporated into its
proof of claim pending in the bankruptcy court. Additionally, the
bankruptcy court granted relief from the stay to allow for
mediation between the parties and Coudert's malpractice insurer
with the hopes of liquidating the claim. Mediation failed and, in
March 2009, the Plan Administrator appointed pursuant to Coudert's
confirmed Chapter 11 Plan for Liquidation filed a motion in
bankruptcy court to disallow the claim.
In July 2009, the bankruptcy court applied New York choice of law
rules to Statek's claim. Under New York's anti-forum shopping
"borrowing statute," N.Y. C.P.L.R. Sec. 202, the bankruptcy court
determined that because Statek was a non-resident, its claim must
be judged by the shorter of either New York's statute of
limitations or the statute of limitations of the jurisdiction
where the claim accrued (presumably Connecticut or the United
Kingdom). As Statek had already conceded that its claim was
untimely under the New York statute of limitations, the bankruptcy
court determined that provision to be as short as or shorter than
any other possibilities, applied it, and disallowed the claim.
Statek filed an unsuccessful motion for reconsideration and then
sought to have its claim reinstated on appeal to the U.S. District
Court for the Southern District of New York (Hellerstein, J.).
That district court affirmed the bankruptcy court's two orders,
prompting Statek to go to the Second Circuit.
On Tuesday, the Second Circuit vacated the district court's order
and remanded the case to the district court with instructions to
remand the case to the bankruptcy court and, in so doing,
instructing the bankruptcy court to apply the choice of law rules
of Connecticut to decide Statek's motion for reconsideration.
The appellate case is STATEK CORPORATION, Appellant, v.
DEVELOPMENT SPECIALISTS, INC., PLAN ADMINISTRATOR FOR COUDERT
BROTHERS LLP, Appellee, No. 10-2723-bk (2nd Cir.). The Second
Circuit panel consists of Circuit Judges Newman, Calabresi, and
Hall, who penned the opinion.
A copy of the Second Circuit's Feb. 28 decision is available at
http://is.gd/LF9sLcfrom Leagle.com.
About Coudert Brothers
Coudert Brothers LLP was an international law firm specializing in
complex cross-border transactions and dispute resolution. The
firm had operations in Australia and China. The Debtor filed for
Chapter 11 protection (Bankr. S.D.N.Y. Case No. 06-12226) on
Sept. 22, 2006. John E. Jureller, Jr., Esq., and Tracy L.
Klestadt, Esq., at Klestadt & Winters, LLP, represented the Debtor
in its restructuring efforts. The U.S. Trustee for Region 2
appointed five creditors to serve on an Official Committee of
Unsecured Creditors. Brian F. Moore, Esq., and David J. Adler,
Esq., at McCarter & English, LLP, represented the Official
Committee of Unsecured Creditors. Coudert scheduled total assets
of $30.0 million and total debts of $18.3 million as of the
Petition Date. The Bankruptcy Court in August 2008 signed an
order confirming Coudert's chapter 11 plan. The Plan contemplated
on paying 39% to unsecured creditors with $26 million in claims.
CROWN MEDIA: S&P Affirms 'B' Corporate; Outlook Positive
--------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
Studio City, Calif.-based cable network company Crown Media
Holdings Inc. to positive from stable. The 'B' corporate credit
rating was affirmed.
"The positive rating outlook reflects our view that the company
could continue improving the business position of its cable
network franchise over the intermediate term, leading to further
EBITDA growth and leverage reduction," said Standard & Poor's
credit analyst Deborah Kinzer.
"Our rating on Crown Media reflects our view that the company has
a 'weak' business risk profile and a 'highly leveraged' financial
risk profile, according to our criteria. The company's narrow
business focus on two cable channels with relatively low audience
ratings, underdeveloped distribution, and a subpar EBITDA margin
compared with other cable network companies support our assessment
of the business risk profile as weak. We regard Crown Media's
financial risk profile as highly leveraged because of its still-
high debt leverage and aggressive financial policy, although
leverage has started to decline over the past couple of quarters,"
S&P said.
"Crown Media owns and operates two cable TV channels in the U.S.,
the Hallmark Channel and Hallmark Movie Channel. Although the
company has been operating for 10 years, neither channel is fully
distributed. The Hallmark Channel reaches about 87 million
subscribers and the Hallmark Movie Channel reaches about 47
million subscribers, compared with about 105 million total
domestic cable and satellite TV subscribers. Some cable operators
do not put the company's channels on their basic tier,
particularly the movie channel, which leads to lower penetration
and lower subscription and ad revenue. Crown Media's subscription
revenue is less than 25% of total revenue, compared with 40%-50%
for other cable network companies. Advertising revenue forms the
remainder of revenue, and growth in ad revenue is subject to both
economic conditions and audience ratings. Apart from special
programming aired during the holiday season, the networks'
audience ratings are low. The company is introducing new daytime
content in an attempt to attract higher audience ratings and
younger viewers, but initially this has resulted in confusion
among viewers and ratings declines. Over the longer term, we
expect Crown Media and other cable network companies to face
growing competition from the Internet and other forms of digital
media, which could lower audience share and lessen attractiveness
as an advertising medium," S&P said.
"We expect the company to continue benefiting from generally
favorable ad demand in 2012. Achievement of faster ad and
subscription revenue growth will depend on the company's ability
to attract more viewers with appealing new programming, which is
likely to take several years and additional investment. Our base-
case scenario for 2012 assumes total revenue growth at a high
single-digit percentage rate, consisting of about 10% growth in ad
revenue and mid-single-digit growth in subscription revenue. We
further assume that expense growth will lag revenue growth
slightly, leading to about 10% EBITDA growth and about a 50-basis-
point improvement in the EBITDA margin," S&P said.
DAVID KINGSTON: Bankruptcy Court to Hear Spanish Palms Suit
-----------------------------------------------------------
Bankruptcy Judge Jim D. Pappas ruled that the Bankruptcy Court has
subject matter jurisdiction under 28 U.S.C. Sec. 1334(b) over the
lawsuit captioned as, Spanish Palms Marketing, LLC and Corus
Construction Venture, LLC., Plaintiffs, v. David O. Kingston,
Defendant; and David O. Kingston, Counterclaimant, v. Spanish
Palms Marketing, LLC and Corus Construction Venture, LLC.,
Counterdefendants, Adv. Proc. No. 11-8079 (Bankr. D. Idaho).
Judge Pappas also held that all claims and counterclaims asserted
by the parties are core proceedings.
Spanish Palms Marketing and Corus Construction Venture initiated
the adversary proceeding against Mr. Kingston on Sept. 21, 2011,
asserting two exception-to-discharge claims against Mr. Kingston,
one pursuant to 11 U.S.C. Sec. 523(a)(2)(B), and the other
pursuant to Sec. 523(a)(6). Mr. Kingston asserted five
counterclaims against the Plaintiffs, seeking (1) avoidance of a
fraudulent transfer pursuant to Sec. 548(a); (2) breach of an
implied covenant of good faith and fair dealing; (3) a limit on
the Plaintiffs' ability to recover under applicable Nevada
statutes; (4) the rejection of the Plaintiffs' claim in Mr.
Kingston's bankruptcy case; and (5) declaratory judgment relating
to a dispute between the parties over the language of a
contractual guaranty. Mr. Kingston seeks an adjustment or
elimination of the Plaintiffs' claim in his bankruptcy case. He
also seeks to recover "costs and damages arising as a result of
his bankruptcy filing" under the breach of an implied covenant of
good faith and fair dealing claim.
A copy of Judge Pappas' Feb. 27 Order is available at
http://is.gd/e9ry0vfrom Leagle.com.
Larry Prince, Esq. -- lprince@hollandhart.com -- at HOLLAND &
HART, in Boise, Idaho, argues for Spanish Palms Marketing and
Corus Construction Venture.
Robert Maynes, Esq., at MAYNES TAGGART, PLLC, in Idaho Falls,
Idaho, argues for Mr. Kingston.
David O. Kingston filed for Chapter 11 bankruptcy (Bankr. D. Idaho
Case No. 11-40128) in 2011.
DEBUT BROADCASTING: Sariah Hopkins Quits as Exec. VP and CFO
------------------------------------------------------------
Sariah Hopkins voluntarily resigned her position as Executive Vice
President and Chief Financial Officer. Debut is in the process of
seeking a Chief Financial Officer.
About Debut Broadcasting
Debut Broadcasting Corporation, Inc. (OTC BB: DBTB) --
http://www.debutbroadcasting.com/-- is a radio broadcasting and
syndication company that produces and distributes syndicated radio
programming to radio stations in the United States and Canada.
The company maintains radio syndication in Nashville, Tenn., and
produces and distributes 15 radio programs, which are broadcasted
over approximately 1,400 radio station affiliates. It owns and
operates five broadcast radio stations, which include WIQQ FM
102.3 MHz in Leland, WBAQ FM 97.9 MHz and WNIX AM 1330 kHz in
Greenville, and WNLA FM 105.5 MHz and WNLA AM 1380 kHz in
Indianola, Miss. The company is based in Nashville, Tenn.
As reported by the TCR on April 6, 2011, Silberstein Ungar, PLLC,
in Bingham Farms, Michigan, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has incurred losses from
operations, has a working capital deficit, and is in need of
additional capital to grow its operations so that it can become
profitable.
The Company reported a net loss of $29,359 in 2010 and a net loss
of $419,593 in 2009. The Company also reported a net loss of
$411,205 for the nine months ended Sept. 30, 2011.
The Company's balance sheet at Sept. 30, 2011, showed
$3.78 million in total assets, $3.61 million in total liabilities,
and $174,796 in total stockholders' equity.
DELTA PETROLEUM: Court Approves HYPERAMS as Auctioneer
------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Delta Petroleum Corporation, et al., to employ HYPERAMS, LLC as
auctioneer.
The engagement letter contemplates that the Debtors' assets will
be liquidated in multiple tranches, to be determined by the
Debtors in the exercise of their business judgment.
HYPERAMS will be assigned to sell these assets: (i) office
equipment on the 42nd floor and excess computer equipment on the
43rd floor of Delta Petroleum Corporation's corporate office; and
(ii) unused office equipment in off-site storage facilities of
Mesa Systems Moving and Storage.
HYPERAMS is expected to, among other things:
a) provide a supervisor(s) to supervise and conduct the sale;
b) oversee the liquidation and disposal of the assets,
including making its best efforts to find cost free methods
to dispose of the assets that cannot be sold; provided,
however, HYPERAMS may abandon the assets that have not been
removed from the facilities by the end of the sale term;
and
c) determine and implement appropriate external advertising
prior to and during the sale term to effectively sell the
assets during the sale term.
The Debtors have agreed to compensate HYPERAMS for professional
services rendered on a percentage-of-sale-price basis and to
reimburse HYPERAMS for all reasonable and documented expenses,
which expenses will not exceed $17,000 for Tranche One without the
Debtors' consent.
The Debtors proposes that HYPERAMS be paid:
1) a commission of 10% percent of gross sales proceeds;
2) a sale expense allowances for reimbursement of direct sale
related expenses associated with Tranche One of $17,000.
These expenses would mainly include the compensation for
onsite set up, personnel, travel and marketing costs and the
costs of the online sale; and
3) a buyer's premium not to exceed fifteen (15%) percent, which
is consistent with industry standards and is to be assessed
and paid for by all auction buyers.
To the best of the Debtors' knowledge, HYPERAMS is a
"disinterested person," as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Delta Petroleum
Delta Petroleum Corporation (NASDAQ: DPTR) is an independent oil
and gas company engaged primarily in the exploration for, and the
acquisition, development, production, and sale of, natural gas and
crude oil. Natural gas comprises over 90% of Delta's production
services. The core area of its operations is the Rocky Mountain
Region of the United States, where the majority of the proved
reserves, production and long-term growth prospects are located.
Delta and seven of its subsidiaries sought Chapter 11 bankruptcy
protection (Bankr. D. Del. Case Nos. 11-14006 to 11-14013,
inclusive) on Dec. 16, 2011, roughly six weeks before the Jan. 31,
2012 scheduled maturity of its $38.5 million secured credit
facility with Macquarie Bank Limited and after several months of
unsuccessful attempts to sell the business. Delta disclosed
$375,498,248 in assets and $310,679,157 in liabilities, which also
include $152,187,500 in outstanding obligations on account of the
7% senior unsecured notes issued in March 2005 with US Bank
National Association indenture trustee; and $115,527,083 in
outstanding obligations on account of 3-3/4% Senior Convertible
Notes due 2037 issued in April 2007. In its amended schedules,
the Delta Petroleum disclosed $373,836,358 in assets and
$312,864,788 in liabilities.
W. Peter Beardsley, Esq., Christopher Gartman, Esq., Kathryn A.
Coleman, Esq., and Ashley J. Laurie, Esq., at Hughes Hubbard &
Reed LLP, in New York, N.Y., represent the Debtors as counsel.
Derek C. Abbott, Esq., Ann C. Cordo, Esq., and Chad A. Fights,
Esq., at Morris, Nichols, Arsht & Tunnel LLP, in Wilmington, Del.,
represent the Debtors as co-counsel. Conway Mackenzie is the
Debtors's restructuring advisor. Evercore Group L.L.C. is the
financial advisor and investment banker. The Debtors selected
Epiq Bankruptcy Solutions, LLC as claims and noticing agent. The
petition was signed by Carl E. Lakey, chief executive officer and
president.
Delta will hold an auction for the business on March 26, 2012. No
buyer is under contract. There is $57.5 million in financing for
the Chapter 11 effort.
The U.S. Trustee told the bankruptcy judge that there was
insufficient interest from creditors to form an official committee
of unsecured creditors.
DELTA PETROLEUM: KPMG LLP OK'd as Audit and Tax Service Provider
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Delta Petroleum Corporation, et al., to employ KPMG LLP as service
provider for audit, tax compliance and tax consulting matters.
As reported in the Troubled Company Reporter on Feb. 14, 2012,
KPMG is expected to, among other things:
i. audit the consolidated balance sheets of Delta Petroleum
and its subsidiaries as of Dec. 31, 2011, and 2010,
the related consolidated statements of operations,
stockholders' equity and cash flows for each of the years in
the three-year period ended Dec. 31, 2011, and the audit of
internal control over financial reporting as of Dec. 31,
2011, which may be required to be filed with the Securities
and Exchange Commission
ii. provide an analysis of the Debtors' Section 382 issues
including the historical Section 382 ownership shifts and
Section 382 issues arising in connection with the Chapter 11
cases; and
iii. prepare federal and state corporate tax return(s) and
supporting schedules for the Debtors' 2011 and 2012 short
period tax years.
In addition, KPMG will provide other consulting, advice, research,
planning and analysis regarding audit, tax compliance and tax
consulting matters as may be necessary, desirable or requested
from time to time.
Robert C. Dennis, a Certified Public Accountant and partner of
KPMG, tells the Court that majority of fees to be charged in the
audit engagement reflect a reduction of approximately 50% to 55%
from KPMG's normal and customary rates, depending on the types of
services to be rendered. The hourly rates for audit services to
be rendered by KPMG and applicable herein are:
Audit and Audit-Related Services Discounted Rate
-------------------------------- ---------------
Partners $375 - $500
Senior Managers $325 - $350
Managers $275 - $300
Senior Associates $200 - $225
Associates $100 - $150
The majority of fees to be charged in the tax engagements reflect
a reduction of approximately 25% to 35% from KPMG's normal and
customary rates, depending on the types of services to be
rendered. The hourly rates for tax compliance and tax consulting
services to be rendered by KPMG and applicable herein are:
Tax Consulting Services Discounted Rate
----------------------- ---------------
Partners $638 - $746
Managing Directors $638 - $694
Senior Managers $544 - $675
Managers $432 - $600
Senior Associates $300 - $450
Associates $245 - $281
Tax Compliance Services Discounted Rate
----------------------- ---------------
Partners $553 - $647
Managing Directors $553 - $601
Senior Managers $471 - $585
Managers $374 - $520
Senior Tax Associates $260 - $390
Tax Associates $211 - $244
To the best of the Debtors' knowledge, KPMG is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
About Delta Petroleum
Delta Petroleum Corporation (NASDAQ: DPTR) is an independent oil
and gas company engaged primarily in the exploration for, and the
acquisition, development, production, and sale of, natural gas and
crude oil. Natural gas comprises over 90% of Delta's production
services. The core area of its operations is the Rocky Mountain
Region of the United States, where the majority of the proved
reserves, production and long-term growth prospects are located.
Delta and seven of its subsidiaries sought Chapter 11 bankruptcy
protection (Bankr. D. Del. Case Nos. 11-14006 to 11-14013,
inclusive) on Dec. 16, 2011, roughly six weeks before the Jan. 31,
2012 scheduled maturity of its $38.5 million secured credit
facility with Macquarie Bank Limited and after several months of
unsuccessful attempts to sell the business. Delta disclosed
$375,498,248 in assets and $310,679,157 in liabilities, which also
include $152,187,500 in outstanding obligations on account of the
7% senior unsecured notes issued in March 2005 with US Bank
National Association indenture trustee; and $115,527,083 in
outstanding obligations on account of 3-3/4% Senior Convertible
Notes due 2037 issued in April 2007. In its amended schedules,
the Delta Petroleum disclosed $373,836,358 in assets and
$312,864,788 in liabilities.
W. Peter Beardsley, Esq., Christopher Gartman, Esq., Kathryn A.
Coleman, Esq., and Ashley J. Laurie, Esq., at Hughes Hubbard &
Reed LLP, in New York, N.Y., represent the Debtors as counsel.
Derek C. Abbott, Esq., Ann C. Cordo, Esq., and Chad A. Fights,
Esq., at Morris, Nichols, Arsht & Tunnel LLP, in Wilmington, Del.,
represent the Debtors as co-counsel. Conway Mackenzie is the
Debtors's restructuring advisor. Evercore Group L.L.C. is the
financial advisor and investment banker. The Debtors selected
Epiq Bankruptcy Solutions, LLC as claims and noticing agent. The
petition was signed by Carl E. Lakey, chief executive officer and
president.
Delta will hold an auction for the business on March 26, 2012. No
buyer is under contract. There is $57.5 million in financing for
the Chapter 11 effort.
The U.S. Trustee told the bankruptcy judge that there was
insufficient interest from creditors to form an official committee
of unsecured creditors.
DELTA PETROLEUM: Court Sets March 23 as Claims Bar Date
-------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
established March 23, 2012 at 4:00 p.m. (ET) as the deadline for
individuals or entity to file proofs of claim against Delta
Petroleum Corporation, et al.
The Court also set June 13, 2012, as the bar date applicable to
governmental units, except for Castle Exploration Company, Inc.,
which is July 5.
Proofs of claim must be filed to:
If via mail, send to:
Delta Petroleum Corporation Claims Processing Center
c/o Epiq Bankruptcy Solutions, LLC
FDR Station, P.O. Box 5012
New York, NY 10150-5012
If via Hand Delivery or Overnight Courier, send to:
Delta Petroleum Corporation Claims Processing Center
c/o Epiq Bankruptcy Solutions, LLC
757 Third Avenue, 3rd Floor
New York, NY 10017
About Delta Petroleum
Delta Petroleum Corporation (NASDAQ: DPTR) is an independent oil
and gas company engaged primarily in the exploration for, and the
acquisition, development, production, and sale of, natural gas and
crude oil. Natural gas comprises over 90% of Delta's production
services. The core area of its operations is the Rocky Mountain
Region of the United States, where the majority of the proved
reserves, production and long-term growth prospects are located.
Delta and seven of its subsidiaries sought Chapter 11 bankruptcy
protection (Bankr. D. Del. Case Nos. 11-14006 to 11-14013,
inclusive) on Dec. 16, 2011, roughly six weeks before the Jan. 31,
2012 scheduled maturity of its $38.5 million secured credit
facility with Macquarie Bank Limited and after several months of
unsuccessful attempts to sell the business. Delta disclosed
$375,498,248 in assets and $310,679,157 in liabilities, which also
include $152,187,500 in outstanding obligations on account of the
7% senior unsecured notes issued in March 2005 with US Bank
National Association indenture trustee; and $115,527,083 in
outstanding obligations on account of 3-3/4% Senior Convertible
Notes due 2037 issued in April 2007. In its amended schedules,
the Delta Petroleum disclosed $373,836,358 in assets and
$312,864,788 in liabilities.
W. Peter Beardsley, Esq., Christopher Gartman, Esq., Kathryn A.
Coleman, Esq., and Ashley J. Laurie, Esq., at Hughes Hubbard &
Reed LLP, in New York, N.Y., represent the Debtors as counsel.
Derek C. Abbott, Esq., Ann C. Cordo, Esq., and Chad A. Fights,
Esq., at Morris, Nichols, Arsht & Tunnel LLP, in Wilmington, Del.,
represent the Debtors as co-counsel. Conway Mackenzie is the
Debtors's restructuring advisor. Evercore Group L.L.C. is the
financial advisor and investment banker. The Debtors selected
Epiq Bankruptcy Solutions, LLC as claims and noticing agent. The
petition was signed by Carl E. Lakey, chief executive officer and
president.
Delta will hold an auction for the business on March 26, 2012. No
buyer is under contract. There is $57.5 million in financing for
the Chapter 11 effort.
The U.S. Trustee told the bankruptcy judge that there was
insufficient interest from creditors to form an official committee
of unsecured creditors.
DIPPIN' DOTS: Asks Judge to Reject Bid to CEO Ouster
----------------------------------------------------
Max Stendahl at Bankruptcy Law360 reports that Dippin' Dots Inc.
on Tuesday asked the Kentucky federal judge overseeing its
bankruptcy case to reject claims by senior lender Regions Bank
that the company's CEO should be replaced by a court-appointed
trustee amid budget woes.
According to Law360, the filing challenged a bid to oust Curt
Jones as CEO of Dippin' Dots, which makes bead-shaped ice cream
snacks sold at franchised venues. The bank said in a Feb. 24
filing that Jones had sapped the company's finances and broken the
terms of a $200,000 debtor-in-possession.
The Debtor's biggest lender wants the bankruptcy court to oust the
founder and president, Curt Jones, after accusing him of
manipulating the Kentucky manufacturer's sale and putting its
future at risk.
About Dippin' Dots
Founded in 1988 by microbiologist Curt Jones, Dippin' Dots Inc.
manufactures quirky and colorful ice cream beads, which are flash
frozen using liquid nitrogen. It owns a 120,000-square-foot plant
in Kentucky that can produce more than 25,000 gallons of frozen
dots a day. It has about 140 Dippin' Dots retail locations, which
are mostly controlled by franchisees, and agreements with 9,952
small vendors who sell the ice cream at fairs, festivals and
sports games. Dippin' Dots isn't sold in grocery stores because
of its extreme cooling requirements.
Dippin' Dots filed a Chapter 11 petition (Bankr. W. D. Ky Case No.
11-51077) on Nov. 3, 2011 in Paducah, Kentucky. Judge Thomas H.
Fulton presides over the case. Farmer & Wright, PLLC, represents
the Debtor as Chapter 11 counsel. The Debtor disclosed
$20,233,130 in assets and up to $20,233,130 in debts. The
petition was signed by Curt Jones, president.
Regions Bank, the Debtor's secured lender, is represented by Brian
H. Meldrum, Esq., at Stites & Harbison PLLC.
DIPPIN' DOTS: Wants $2-Mil. Bankruptcy Loan to Avoid Liquidation
----------------------------------------------------------------
Dow Jones' DBR Small Cap reports that Dippin' Dots Inc. executives
want to dip into a pool of borrowed money with a request to take
out a second bankruptcy loan: $2 million the company says it needs
to keep its 145-worker factory in Kentucky churning out the
colorful ice cream treat.
About Dippin' Dots
Founded in 1988 by microbiologist Curt Jones, Dippin' Dots Inc.
manufactures quirky and colorful ice cream beads, which are flash
frozen using liquid nitrogen. It owns a 120,000-square-foot plant
in Kentucky that can produce more than 25,000 gallons of frozen
dots a day. It has about 140 Dippin' Dots retail locations, which
are mostly controlled by franchisees, and agreements with 9,952
small vendors who sell the ice cream at fairs, festivals and
sports games. Dippin' Dots isn't sold in grocery stores because
of its extreme cooling requirements.
Dippin' Dots filed a Chapter 11 petition (Bankr. W. D. Ky Case No.
11-51077) on Nov. 3, 2011 in Paducah, Kentucky. Judge Thomas H.
Fulton presides over the case. Farmer & Wright, PLLC, represents
the Debtor as Chapter 11 counsel. The Debtor disclosed
$20,233,130 in assets and up to $20,233,130 in debts. The
petition was signed by Curt Jones, president.
Regions Bank, the Debtor's secured lender, is represented by Brian
H. Meldrum, Esq., at Stites & Harbison PLLC.
DYNEGY INC: Plan Docs. Hearing Again Pushed Back; Now Set March 12
------------------------------------------------------------------
Judge Cecelia G. Morris of the U.S. Bankruptcy Court for the
Southern District of New York has further pushed back the hearing
to consider the adequacy of the disclosure statement describing
the Chapter 11 Plan of Reorganization for Dynegy Holdings, LLC,
to March 12, 2012 at 8:30 a.m.
The Disclosure Statement Hearing will be held at Poughkeepsie
Office, 355 Main Street. All hearings for the objections to the
Disclosure Statement are also adjourned to March 12.
The hearing was previously scheduled for Feb. 24, and then pushed
back to March 9, before it was again postponed to March 12.
The Official Committee of Unsecured Creditors, the U.S. Trustee
and other parties have asked the Court to reject approval of -- or
defer the hearing on -- the Disclosure Statement as Susheel
Kirpalani, Esq., as the Chapter 11 examiner, has not yet
completed his investigation and issued his report, without which,
the Debtors cannot provide adequate disclosure about the proposed
Plan.
The Examiner began his investigation on January 11, 2012 and his
report is due on or about March 12,
2012.
"If the Examiner reaches that conclusion, not only will it impact
the validity of the Prepetition Restructuring Transactions and
the propriety of the proposed third party releases, it may also
cause those creditors that signed the Amended Restructuring
Support Agreement to reconsider their support for the Plan," the
U.S. Trustee pointed out.
Counsel to the Committee, Ira S. Dizengoff, Esq., at Akin Gump
Strauss Hauer & Feld LLP, in New York, said the Debtors are
"seeking the Court's approval of an inadequate Disclosure
Statement, for an unconfirmable Plan, at a hearing scheduled to
take place before the Court-appointed Examiner is due to release
his report on the Prepetition Transactions that are the impetus
for the filing of these Chapter 11 cases and the object of the
settlement under the terms of the Plan.
About Dynegy Inc.
Through its subsidiaries, Houston, Texas-based Dynegy Inc.
(NYSE: DYN) -- http://www.dynegy.com/-- produces and sells
electric energy, capacity and ancillary services in key U.S.
markets. The power generation portfolio consists of approximately
12,200 megawatts of baseload, intermediate and peaking power
plants fueled by a mix of natural gas, coal and fuel oil.
In August, Dynegy implemented an internal restructuring that
created two units, one owning eight primarily natural gas-fired
power generation facilities and another owning six coal-fired
plants.
Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and
said it was discussing options for managing its debt load with
certain bondholders.
Dynegy Holdings LLC and four other affiliates of Dynegy Inc.
sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case
No. 11-38111) Nov. 7 to implement an agreement with a
group of investors holding more than $1.4 billion of senior notes
issued by Dynegy's direct wholly-owned subsidiary, Dynegy
Holdings, regarding a framework for the consensual restructuring
of more than $4.0 billion of obligations owed by DH. If this
restructuring support agreement is successfully implemented, it
will significantly reduce the amount of debt on the Company's
consolidated balance sheet.
Dynegy Holdings disclosed assets of $13.77 billion and debt of
$6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each
estimated $100 million to $500 million in assets and debt.
Dynegy Holdings and its affiliated debtor-entities are represented
in the Chapter 11 proceedings by Sidley Austin LLP as their
reorganization counsel. Dynegy and its other subsidiaries are
represented by White & Case LLP, who is also special counsel to
the Debtor Entities with respect to the Roseton and Danskammer
lease rejection issues.
Dynegy was advised by Lazard Freres & Co. LLC and the Debtor
Entities' financial advisor is FTI Consulting.
The Official Committee of Unsecured Creditors has tapped Akin Gump
Strauss Hauer & Feld LLP as counsel nunc pro tunc to November 16,
2011.
Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceeding undertaken
by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or
215/945-7000)
DYNEGY INC: Debtors Ask for Plan Filing Exclusivity Until July 5
----------------------------------------------------------------
Dynegy Holdings LLC and its Debtor affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York to extend
the exclusive period for them to file a Chapter 11 plan of
reorganization for an additional 120 days through and including
July 5, 2012, and their exclusive period to solicit acceptances
of that plan for an additional 180 days through and including
September 3, 2012.
In light of the substantial strides toward plan confirmation that
have been made to date, it is critical that the Debtors be
permitted to continue this process without disruption, Sophia P.
Mullen, Esq., at Sidley Austin LLP, in New York, contends. She
adds that the Chapter 11 cases are at an important juncture, and
the Debtors believe that the paramount goal of achieving
confirmation of the Plan and a timely exit from bankruptcy will
be best served by maintaining a structure that optimizes the
Debtors' ability to continue leading the plan process.
In the three and a half months since commencing these Chapter 11
Cases, the Debtors have made tremendous progress in their
restructuring efforts, Ms. Mullen relates. She notes that the
Debtors have submitted a confirmable Plan that will resolve more
than $3.5 billion in prepetition liabilities and the Consenting
Noteholders, which hold in the aggregate approximately $1.8
billion of the approximately $3.57 billion principal amount of
Senior Notes and Subordinated Notes, have agreed to vote to
accept the Plan.
Ms. Mullen further contends that the PSEG Entities, who were once
adversaries, is now supporting the Plan.
A hearing on the Disclosure Statement, previously scheduled for
March 9, is moved to March 12. Ms. Mullen relates that the
Debtors anticipate commencing solicitation on the Plan shortly
after the Disclosure Statement Hearing, and will seek a
confirmation hearing in mid-May.
Ms. Mullen argues that in light of the substantial strides toward
plan confirmation that have been made to date, it is critical
that the Debtors be permitted to continue this process without
disruption. She contends that the Chapter 11 cases are at an
important juncture, and the Debtors believe that the paramount
goal of achieving plan confirmation and a timely exit from
bankruptcy will be best served by maintaining a structure that
optimizes the Debtors' ability to continue leading the plan
process.
About Dynegy Inc.
Through its subsidiaries, Houston, Texas-based Dynegy Inc.
(NYSE: DYN) -- http://www.dynegy.com/-- produces and sells
electric energy, capacity and ancillary services in key U.S.
markets. The power generation portfolio consists of approximately
12,200 megawatts of baseload, intermediate and peaking power
plants fueled by a mix of natural gas, coal and fuel oil.
In August, Dynegy implemented an internal restructuring that
created two units, one owning eight primarily natural gas-fired
power generation facilities and another owning six coal-fired
plants.
Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and
said it was discussing options for managing its debt load with
certain bondholders.
Dynegy Holdings LLC and four other affiliates of Dynegy Inc.
sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case
No. 11-38111) Nov. 7 to implement an agreement with a
group of investors holding more than $1.4 billion of senior notes
issued by Dynegy's direct wholly-owned subsidiary, Dynegy
Holdings, regarding a framework for the consensual restructuring
of more than $4.0 billion of obligations owed by DH. If this
restructuring support agreement is successfully implemented, it
will significantly reduce the amount of debt on the Company's
consolidated balance sheet.
Dynegy Holdings disclosed assets of $13.77 billion and debt of
$6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each
estimated $100 million to $500 million in assets and debt.
Dynegy Holdings and its affiliated debtor-entities are represented
in the Chapter 11 proceedings by Sidley Austin LLP as their
reorganization counsel. Dynegy and its other subsidiaries are
represented by White & Case LLP, who is also special counsel to
the Debtor Entities with respect to the Roseton and Danskammer
lease rejection issues.
Dynegy was advised by Lazard Freres & Co. LLC and the Debtor
Entities' financial advisor is FTI Consulting.
The Official Committee of Unsecured Creditors has tapped Akin Gump
Strauss Hauer & Feld LLP as counsel nunc pro tunc to November 16,
2011.
Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceeding undertaken
by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or
215/945-7000)
DYNEGY INC: Debtor Wants Until June 4 to Decide on Leases
---------------------------------------------------------
Dynegy Holdings LLC and its Debtor affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York to grant a
90-day extension of the deadline for them to assume or reject
unexpired leases of nonresidential real property.
Specifically the Debtors seek an extension through and including
June 4, 2012, pursuant to Section 365(d)(4) of the Bankruptcy
Code.
Section 365(d)(4) provides, in part, that an unexpired lease of
non-residential real property under which a debtor is the lessee
will be deemed rejected and the debtor will immediately surrender
that non-residential real property to the lessor, if the debtor
does not assume or reject the unexpired lease by the earlier of:
(a) the date that is 120 days after the Petition Date; or (b) the
date of the entry of an order confirming a Chapter 11 plan.
The Debtors currently have until March 6, 2012 to assume or
reject the Real Property Leases.
Sophia P. Mullen, Esq., at Sidley Austin LLP, in New York,
contends that the Debtors' cases are complex, and the Debtors
have exhibited exemplary diligence in managing these proceedings.
She tells the Court that since the Petition Date, the Debtors
have focused on operating their businesses, formulating a plan of
reorganization and responding to various document requests and
pleadings, including those related to the appointment of an
examiner.
Ms. Mullen notes that the Debtors have filed Schedules of Assets
and Liabilities, Statements of Financial Affairs, a proposed
Chapter 11 Plan with key exhibits and a related Disclosure
Statement.
For these reasons the Debtors have not yet been able to reach a
determination whether to assume or reject each of the Real
Property Leases, Ms. Mullen says.
The Debtors assert that an extension of the Leases Disposition
Period is consistent with the rehabilitative goals of the
Bankruptcy Code and will not unduly prejudice any of the
counterparties to the Real Property Leases.
About Dynegy Inc.
Through its subsidiaries, Houston, Texas-based Dynegy Inc.
(NYSE: DYN) -- http://www.dynegy.com/-- produces and sells
electric energy, capacity and ancillary services in key U.S.
markets. The power generation portfolio consists of approximately
12,200 megawatts of baseload, intermediate and peaking power
plants fueled by a mix of natural gas, coal and fuel oil.
In August, Dynegy implemented an internal restructuring that
created two units, one owning eight primarily natural gas-fired
power generation facilities and another owning six coal-fired
plants.
Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and
said it was discussing options for managing its debt load with
certain bondholders.
Dynegy Holdings LLC and four other affiliates of Dynegy Inc.
sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case
No. 11-38111) Nov. 7 to implement an agreement with a
group of investors holding more than $1.4 billion of senior notes
issued by Dynegy's direct wholly-owned subsidiary, Dynegy
Holdings, regarding a framework for the consensual restructuring
of more than $4.0 billion of obligations owed by DH. If this
restructuring support agreement is successfully implemented, it
will significantly reduce the amount of debt on the Company's
consolidated balance sheet.
Dynegy Holdings disclosed assets of $13.77 billion and debt of
$6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each
estimated $100 million to $500 million in assets and debt.
Dynegy Holdings and its affiliated debtor-entities are represented
in the Chapter 11 proceedings by Sidley Austin LLP as their
reorganization counsel. Dynegy and its other subsidiaries are
represented by White & Case LLP, who is also special counsel to
the Debtor Entities with respect to the Roseton and Danskammer
lease rejection issues.
Dynegy was advised by Lazard Freres & Co. LLC and the Debtor
Entities' financial advisor is FTI Consulting.
The Official Committee of Unsecured Creditors has tapped Akin Gump
Strauss Hauer & Feld LLP as counsel nunc pro tunc to November 16,
2011.
Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceeding undertaken
by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or
215/945-7000)
EAGLE POINT: Files Schedules of Assets and Liabilities
------------------------------------------------------
Eagle Point Developments LLC filed with the Bankruptcy Court its
schedules of assets and liabilities, disclosing:
NAME OF SCHEDULE ASSETS LIABILITIES
---------------- ------ -----------
A - Real Property $8,827,047
B - Personal Property $1,584,871
C - Property Claimed as Exempt
D - Creditors Holding Secured
Claims $9,159,262
E - Creditors Holding Unsecured
Priority Claims $1,675
F - Creditors Holding Unsecured
Nonpriority Claims $35,786
----------- -----------
$10,411,918 $9,196,723
About Eagle Point Developments
Eagle Point, in Medford, Oregon, developed the Eagle Point Golf
Course, which was built in 1996. Eagle Point filed for Chapter 11
bankruptcy (Bankr. D. Ore. Case No. 12-60353) on Feb. 1, 2012.
Judge Thomas M. Renn oversees the case, taking over from Judge
Frank R. Alley III. Sussman Shank LLP serves as bankruptcy
attorneys. The petition was signed by Arthur Critchell Galpin,
managing member.
Eagle Point is seeking joint administration of its case with Mr.
Galpin's personal bankruptcy case.
EAGLE POINT: Sec. 341 Creditors' Meeting Set for March 21
---------------------------------------------------------
The U.S. Trustee for the District of Oregon will hold a meeting of
creditors pursuant to 11 U.S.C. Sec. 341 in the Chapter 11 case of
Eagle Point Developments LLC on March 21, 2012 at 11:00 a.m. in US
District Courtroom, US Courthouse, 310 W 6th St, in Medford,
Oregon.
The debtor's representative, as specified in F.R.B.P. Rule
9001(5), must be present at the meeting to be questioned under
oath by the trustee and by creditors or the case may be dismissed.
Creditors are welcome to attend, but are not required to do so.
The meeting may be continued and concluded at a later date without
further notice.
The deadline to file a proof of claim in the case is June 19 for
all creditors, except for governmental units who must file within
180 days after the bankruptcy filing date.
The deadline to file a complaint to determine dischargeability of
certain debts is May 21.
About Eagle Point Developments
Eagle Point, in Medford, Oregon, developed the Eagle Point Golf
Course, which was built in 1996. Eagle Point filed for Chapter 11
bankruptcy (Bankr. D. Ore. Case No. 12-60353) on Feb. 1, 2012.
Judge Thomas M. Renn oversees the case, taking over from Judge
Frank R. Alley III. Sussman Shank LLP serves as bankruptcy
attorneys. The Debtor scheduled $10,411,918 in assets and
$9,196,723 in liabilities. The petition was signed by Arthur
Critchell Galpin, managing member.
Eagle Point is seeking joint administration of its case with
Mr. Galpin's personal bankruptcy case.
EDIETS.COM INC: Enters Into Employment Pact with Thomas Connerty
----------------------------------------------------------------
The Board of Directors has appointed Thomas Connerty to serve as
President and Chief Executive Officer of eDiets.com, Inc. On Feb.
23, 2012, the Company entered into an employment agreement with
Mr. Connerty in connection with the appointment. The Employment
Agreement provides that Mr. Connerty will receive a base salary of
one dollar per year.
Mr. Connerty will be eligible to participate in an annual
incentive compensation program if the Compensation Committee of
the Board of Directors chooses to establish one. The Company does
not anticipate the establishment of an annual incentive
compensation program for the 2012 fiscal year.
On Feb. 23, 2012, the Compensation Committee granted Mr. Connerty
an option to purchase 400,000 shares of the Company's common stock
at a per share exercise price of $0.52, the closing price of the
Company's common stock on the OTCBB market on the grant date.
Under the terms of the grant, 100,000 shares vest on the grant
date and 100,000 shares vest 90 days following the grant date.
The remaining 200,000 shares vest in four tranches of 50,000
shares each on the first trading day after the closing price of
the Company's common stock has for the previous ten trading days
equaled or exceeded $0.75, $1.00, $1.25 and $1.50, respectively.
Vesting is contingent on Mr. Connerty's continued employment with
the Company and, unless the Company terminates Mr. Connerty's
employment for cause, he will have one year following termination
of employment to exercise the vested portion of his option.
Mr. Connerty's employment with the Company is not for any specific
period of time, but may be terminated at any time by either Mr.
Connerty or the Company.
A copy of the Employment Agreement is available for free at:
http://is.gd/PQNFak
About eDiets
eDiets.com, Inc. is a leading provider of personalized nutrition,
fitness and weight-loss programs. eDiets currently features its
award-winning, fresh-prepared diet meal delivery service as one of
the more than 20 popular diet plans sold directly to members on
its flagship site, http://www.eDiets.com
eDiets.com reported a net loss of $43.3 million in 2010 and a net
loss of $12.1 million in 2009. The Company also reported a net
loss of $2.73 million for the nine months ended Sept. 30, 2011.
The Company's balance sheet at Sept. 30, 2011, showed
$3.96 million in total assets, $4.27 million in total liabilities,
and a $314,000 total stockholders' deficit.
Ernst & Young LLP, in Boca Raton, Florida, expressed substantial
doubt about eDiets.com's ability to continue as a going concern.
The independent auditors noted that the Company has incurred
recurring operating losses and has a working capital deficiency.
The Company said that in light of the results of its operations,
management has and intends to continue to evaluate various
possibilities, including raising additional capital through the
issuance of common or preferred stock, securities convertible into
common stock, or secured or unsecured debt, selling one or more
lines of business, or all or a portion of the Company's assets,
entering into a business combination, reducing or eliminating
operations, liquidating assets, or seeking relief through a filing
under the U.S. Bankruptcy Code.
ENER1 INC: Boris Zingarevich Files 15th Amendment to Schedule 13D
-----------------------------------------------------------------
Boris Zingarevich, Ener1 Group, Inc., and Bzinfin S.A. filed with
the U.S. Securities and Exchange Commission Amendment No. 15 to
their Schedule 13D.
The Schedule was amended to disclose that, on Feb. 16, 2012, in
connection with the Chapter 11 case, the Bankruptcy Court granted
final authorization for the Company's $20 million debtor-in-
possession revolving loan facility governed by the terms and
conditions of the DIP Loan Agreement. As a result of the
Bankruptcy Court's related Order, the entire $20 million of the
DIP Facility is available to the Company, subject to the terms and
conditions of the DIP Loan Agreement and such Order. As of the
Feb. 17, 2012, the Company has borrowed approximately $13 million
under the DIP Facility.
Boris Zingarevich and his affiliates beneficially own 104,376,280
shares of common stock of Ener1, Inc., which represents 47.3% of
the shares outstanding, as of Feb. 16, 2012,
A copy of the amended Schedule is available for free at:
http://is.gd/M41Nru
About Ener1
Ener1 Inc. (OTC: HEVV) -- http://www.ener1.com/-- is a New York-
based developer of compact, lithium-ion-powered energy storage
solutions for applications in the electric utility, transportation
and industrial electronics markets. It has three business lines:
EnerDel, an 80.5% owned subsidiary, which is 19.5% owned by
Delphi, develops Li-ion batteries, battery packs and components
such as Li-ion battery electrodes and lithium electronic
controllers for lithium battery packs; EnerFuel develops fuel cell
products and services; and NanoEner develops technologies,
materials and equipment for nano-manufacturing.
Ener1, which received a $118 million U.S. Energy Department grant
to make electric-car batteries, filed for Chapter 11 bankruptcy
(Bankr. S.D.N.Y. Case No. 12-10299) on Jan. 26, 2012, to implement
a prepackaged plan of reorganization. The Plan has been
unanimously accepted by all of Ener1's impaired creditors.
Under its restructuring, the Debtor will reduce funded debt from
$91 million to $46 million, under a plan where debt holders will
receive newly issued debt and equity. The plan provides for a
restructuring of the Company's long-term debt and the infusion of
up to $81 million of equity funding. Of the $81 million, $50
million will be provided periodically by Bzinfin S.A. over a
period of 24 months following the effective date of the plan.
Bzinfin and other parties will invest their pro rata share of up
to $31 million through the purchase of preferred stock from time
to time through 2013 to 2015.
The claims of Ener1's general unsecured creditors will be
unimpaired and paid by the Company under the restructuring plan.
All of the Company's existing common stock will be cancelled, the
long-term debt holders will be receiving a combination of cash, a
new term loan and new common stock in exchange for their claims,
and new preferred stock will be issued to the provider of the
post-petition and exit funding. Suppliers to the Company will be
paid under normal terms for goods and services provided after the
Chapter 11 filing date.
Ener1 will seek approval of the prepackaged reorganization plan at
Feb. 27 confirmation hearing.
Judge Martin Glenn oversees the case. Reed Smith LLP is Ener1's
legal adviser and its financial adviser is Houlihan Lokey Capital
Inc. The Garden City Group serves as its claims and noticing
agent. In its petition, Ener1 estimated $73,900,000 in assets and
$90,538,529 in liabilities. The petition was signed by Alex
Sorokin, interim chief executive officer.
Bzinfin, S.A., is represented in the case by Andrew E. Balog,
Esq., and John H. Bae, Esq., at Greenberg Traurig, LLP. Counsel
to Goldman Sachs Palmetto State Credit Fund, L.P., and Liberty
Harbor Special Investments, LLC, are Gary Holtzer, Esq., and Ronit
Berkovich, Esq., at Weil, Gotshal & Manges LLP.
ENERGY CONVERSION: Seeks Approval of Employee Incentive Plan
------------------------------------------------------------
BankruptcyData.com reports that Energy Conversion Devices filed
with the U.S. Bankruptcy Court a motion for an order authorizing
and approving (A) a key employee retention plan, a management
incentive plan and (C) a severance compromise program. The
retention plan entitles each of certain key non-insider employees
to a retention bonus ranging from $14,875 to $50,000, provided
that, on April 30, 2012, the participant either remains employed
by the Debtors or is no longer employed by the Debtors due to a
disability or as a result of termination by the Debtors other than
for cause.
According to the motion, "The Retention Plan Participants
represent remaining key employees critical for the operation of
the Debtors' businesses through the Sale Process and
implementation of the technology roadmap. Further, the Retention
Plan Participants are highly skilled and specialized employees of
the Debtors that could be replaced, if at all, only with
significant delay and expense. Without the services of the
Retention Plan Participants, the Debtors' businesses could no
longer operate effectively and the technology roadmap could not be
implemented, thereby substantially impairing the going concern."
About Energy Conversion Devices
Energy Conversion Devices -- http://energyconversiondevices.com/
-- has a renowned 51 year history since its formation in Detroit,
Michigan and has been a pioneer in materials science and renewable
energy technology development. The company has been awarded over
500 U.S. patents and international counterparts for its
achievements. ECD's United Solar wholly owned subsidiary has been
a global leader in building-integrated and rooftop photovoltaics
for over 25 years. The company manufactures, sells and installs
thin-film solar laminates that convert sunlight to clean,
renewable energy using proprietary technology.
Energy Conversion Devices filed for Chapter 11 relief (Bankr. E.D.
Mich. Case No. 12-43166) on Feb. 14, 2012. Judge Thomas J. Tucker
presides over the case. Aaron M. Silver, Esq., Judy B. Calton,
Esq., and Robert B. Weiss, Esq., at Honigman Miller Schwartz &
Cohn LLP, in Detroit, Michigan, represent the Debtor as counsel.
The Debtor Listed assets and debts of between $100 million and
$500 million as of the petition date.
The petition was signed by William Christopher Andrews, chief
financial officer and executive vice president.
Affiliate United Solar Ovonic LLC filed a separate Chapter 11
petition on the same day (Bankr. E.D. Mich. Case No. 12-43167).
Affiliate Solar Integrated Technologies, Inc., filed a petition
for relief under Chapter 7 of the Bankruptcy Code (Bankr. E.D.
Mich. Case No. 12-43169.
ENERGY CONVERSION: To Auction Solar Biz; No Stalking Horse So Far
-----------------------------------------------------------------
Dow Jones' DBR Small Cap reports that Energy Conversion Devices
Inc. is seeking court approval to auction off its solar business
in April, but it hasn't yet chosen a stalking horse to kick off
bidding and set a threshold price for the assets. The Debtors are
proposing an April 17, 2012 bid deadline.
About Energy Conversion
Energy Conversion Devices -- http://energyconversiondevices.com/-
- has a renowned 51 year history since its formation in Detroit,
Michigan and has been a pioneer in materials science and renewable
energy technology development. The company has been awarded over
500 U.S. patents and international counterparts for its
achievements. ECD's United Solar wholly owned subsidiary has been
a global leader in building-integrated and rooftop photovoltaics
for over 25 years. The company manufactures, sells and installs
thin-film solar laminates that convert sunlight to clean,
renewable energy using proprietary technology.
Energy Conversion Devices filed for Chapter 11 relief (Bankr. E.D.
Mich. Case No. 12-43166) on Feb. 14, 2012. Judge Thomas J. Tucker
presides over the case. Aaron M. Silver, Esq., Judy B. Calton,
Esq., and Robert B. Weiss, Esq., at Honigman Miller Schwartz &
Cohn LLP, in Detroit, Michigan, represent the Debtor as counsel.
The Debtor Listed assets and debts of between $100 million and
$500 million as of the petition date.
The petition was signed by William Christopher Andrews, chief
financial officer and executive vice president.
Affiliate United Solar Ovonic LLC filed a separate Chapter 11
petition on the same day (Bankr. E.D. Mich. Case No. 12-43167).
Affiliate Solar Integrated Technologies, Inc., filed a petition
for relief under Chapter 7 of the Bankruptcy Code (Bankr. E.D.
Mich. Case No. 12-43169.
FIRSTGOLD CORP: Escapes Dismissal, Agrees With IRS on Timeline
--------------------------------------------------------------
Firstgold Corp., asks the U.S. Bankruptcy Court for the District
of Nevada to approve a stipulation resolving motion that seeks to
dismiss or convert the Chapter 11 case to one under Chapter 7 of
the Bankruptcy Code.
As reported in the Troubled Company Reporter on Jan. 20, 2012, the
Internal Revenue Service sought the dismissal or conversion.
According to the IRS, 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 stipulation entered with the United States Of America, on
behalf of its Internal Revenue Service provides that:
1. by March 1, the Debtor will file all monthly operating
reports presently due.
2. the Debtor will timely file all monthly operating reports
due in the future.
3. by April 1, the Debtor will file a Chapter 11 plan and
disclosure statement and will have noticed the disclosure
statement for approval at the first available date that can be
obtained from the clerk of the court.
4. by July 1, the Debtor will have obtained an order confirming
a Chapter 11 plan.
5. if the Debtor fails to comply with any of these
requirements, counsel for the United States may, upon 15 days
notice to Debtor's counsel, file a declaration setting forth
the noncompliance and lodge an order converting this case,
whereupon the case will be converted to a case under chapter 7
without further notice and hearing.
The IRS asserts secured tax claims totaling $529,708 and unsecured
priority tax claims totaling $70,500.
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.
FREEDOM COMMUNICATIONS: Newspaper Carriers to Get $30MM Settlement
------------------------------------------------------------------
Steven Melendez at Bankruptcy Law360 reports that a class of
newspaper carriers will receive $30 million from Freedom
Communications Inc. and its officers and directors, resolving
claims over settlement funds the Orange County Register parent
agreed to pay before filing for bankruptcy in 2009, the carriers'
lawyer said Tuesday.
Daniel J. Callahan of Callahan & Blaine said that includes
$15.5 million the officers and directors agreed to pay Tuesday and
$14.5 million the company itself paid the carriers in 2010, Law360
relates.
About Freedom Communications
Freedom Communications, headquartered in Irvine, Calif., is a
national privately owned media company operating print
publications, broadcast television stations and interactive
businesses. The company's print portfolio includes approximately
100 daily and weekly publications, plus ancillary magazines and
other specialty publications. The broadcast company's stations --
five CBS, two ABC network affiliates and one CW affiliate -- reach
more than 3 million households across the country. The Company's
news, information and entertainment websites complement its print
and broadcast properties.
Freedom Communications filed for Chapter 11 protection (Bankr. D.
Del. Case No. 09-13046) on Sept. 1, 2009. Attorneys at Young
Conaway Stargatt & Taylor, and Latham & Watkins LLP served as
Chapter 11 counsel. Houlihan, Lokey, Howard & Zukin, Inc., served
as financial advisors while AlixPartners LLC served as
restructuring consultants. Logan & Co. served as claims and
notice agent.
Freedom Communications had $757 million in assets against debts of
$1.077 billion as of July 31, 2009.
The Bankruptcy Court confirmed Freedom Communications' Plan of
Reorganization on March 9, 2010. The Plan became effective
April 30, 2010. The Plan, which was supported by the Steering
Committee of the Company's secured lenders and the Official
Committee of Unsecured Creditors, eliminated $450 million of debt
from Freedom's balance sheet.
GENERAL MARITIME: Creditors Cleared to Vote on Chapter 11 Plan
--------------------------------------------------------------
A bankruptcy judge conditionally said creditors can vote on
General Maritime Corp.'s plan to come under control of investment
firm Oaktree Capital Management LLC when it exits bankruptcy.
Lisa Uhlman at Bankruptcy Law360 reports that U.S. Bankruptcy
Judge Martin Glenn approved General Maritime's disclosure
statement for its Chapter 11 plan Tuesday after the Debtor agreed
to last-minute concessions to unsecured creditors, setting the oil
tanker operator up for an April 25 confirmation hearing on the
plan.
The Company filed a proposed Chapter 11 plan on Jan. 31 to
implement an agreement reached prepetition with affiliates of
Oaktree Capital Management LP, the leader of a group of lenders on
three credits totaling more than $1 billion. The Oaktree group is
to invest $175 million while converting secured debt to equity.
The Plan contemplates a $61.25 million rights offering where
holders of general unsecured claims will have the opportunity to
purchase up to 17.5% of the new equity of the reorganized Company.
About General Maritime
New York-based General Maritime Corporation, through its
subsidiaries, provides international transportation services of
seaborne crude oil and petroleum products. The Company's fleet is
comprised of VLCC, Suezmax, Aframax, Panamax and product carrier
vessels. The fleet consisted of 30 owned vessels and three
chartered vessels. The company generates substantially all of its
revenues by chartering its fleet to third-party customers. The
largest customers include major international oil companies, oil
producers, and oil traders such as BP, Chevron Corporation, CITGO
Petroleum Corp., ConocoPhillips, Exxon Mobil Corporation, Hess
Corporation, Lukoil Oil Company, Stena AB, and Trafigura.
General Maritime and 56 subsidiaries filed for Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 11-15285) on Nov. 17,
2011. Douglas Mannal, Esq., and Adam C. Rogoff, Esq., at Kramer
Levin Naftalis & Frankel LLP, in New York, serve as counsel to the
Debtors. Moelis & Company is the financial advisor. Garden City
Group Inc. is the claims and notice agent.
Prepetition, General Maritime reached agreements with its key
senior lenders, including its bank group, led by Nordea Bank
Finland plc, New York Branch as administrative agent, as well as
affiliates of Oaktree Capital Management, L.P., on the terms of a
restructuring. Under terms of the agreements, Oaktree will
provide a $175 million new equity investment in General Maritime
and convert its prepetition secured debt to equity.
In conjunction with the filing, General Maritime has received a
commitment for up to $100 million in new DIP financing from a
group of lenders led by Nordea as administrative agent.
Counsel for Nordea, as the DIP Agent and the Senior Agent, are
Thomas E. Lauria, Esq., and Scott Greissman, Esq., at White & Case
LLP. Counsel for Oaktree Capital Management, the Junior Agent,
are Edward Sassower, Esq., and Brian Schartz, Esq., at Kirkland &
Ellis, LLP.
The Official Committee of Unsecured Creditors appointed in the
case has retained lawyers at Jones Day as Chapter 11 counsel.
Jones Day previously represented an ad hoc group of holders of the
12% Senior Notes due 2017 issued by General Maritime Corp. This
representation began Sept. 20, 2011, and concluded Nov. 29, 2011,
with the agreement of all members of the Noteholders Committee.
The Creditors Committee also tapped Lowenstein Sandler PC as
special conflicts counsel.
The Noteholders Committee consisted of Capital Research and
Management Company, J.P. Morgan Investment Management, Inc., J.P.
Morgan Securities LLC, Stone Harbor Investment Partners LP and
Third Avenue Focused Credit Fund.
The Creditors Committee is comprised of Bank of New York Mellon
Corporate Trust, Stone Harbor Investment Partners, Delos
Investment Management, and Ultramar Agencia Maritima Ltda.
GenMar filed a a proposed Chapter 11 plan on Jan. 31 to implement
an agreement worked out before the Nov. 17 bankruptcy filing with
affiliates of Oaktree Capital Management LP. The Oaktree group,
lenders on three credits totaling more than $1 billion, are to
invest $175 million while converting secured debt to equity. In
addition, there is to be a $61.3 million rights offering where
creditors can purchase new stock. The Company intends to seek
confirmation of the Plan by April 2012.
GENERAL NUTRITION: S&P Raises Corporate Credit Rating to 'BB-'
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit and
senior secured debt rating on Pittsburgh-based General Nutrition
Centers Inc. to 'BB-' from 'B+'. "The recovery rating on the
secured debt remains at '3', indicating our expectation for
meaningful (50% to 70%) recovery in the event of a default. The
outlook is stable," S&P said.
"At the same time, we assigned our 'BB-'corporate credit rating to
GNC Holdings Inc. The outlook is stable," S&P said.
"The upgrade reflects our view that General Nutrition Centers and
its parent, GNC Holdings Inc. (GNC), should be able to grow
profits and maintain credit metrics consistent with a
'significant' financial risk profile (based on our criteria),
given the generally favorable environment for nutritional
supplements that we forecast," said Standard & Poor's credit
analyst Jayne Ross.
"Our rating outlook on GNC is stable. We expect the company's
recent improvement in operating performance to continue and
leverage to modestly decline over the near-to-intermediate term.
An upgrade could occur if the company is able to continue to
improve and sustain stronger credit metrics and maintain much less
aggressive financial policies," S&P said.
"We could lower the ratings if weaker credit measures result from
the company's financial policies become more aggressive. For
instance, if the company were to do another leveraged buyout, a
large debt-financed share repurchase program, or a special one-
time dividend such that total debt to EBITDA increases to more
than 4.5x," S&P said.
GENERAL SHOPPING: Fitch Assigns 'B (exp)' Rating to Sub. Notes
--------------------------------------------------------------
Fitch Ratings has assigned an expected 'B/RR6(exp)' rating to
General Shopping Investment Limited's (GSI) proposed perpetual
subordinated notes. Fitch has also assigned an Issuer Default
Rating (IDR) of 'BB-' to GSI, which is a General Shopping Brasil
S.A. (GSB) wholly owned subsidiary incorporated under the laws of
the Cayman Islands. GSI is the issuer of the proposed
transaction.
The notes will be perpetual notes with no fixed final maturity
date and will not be subject to any mandatory redemption
provisions. The notes will be repaid only in the event that the
issuer redeems or repurchases the notes. The expected rating for
the proposed transaction considers a maximum note amount of USD250
million. The final rating is contingent upon the receipt of final
documents conforming to information already received.
Fitch currently rates GSB and its wholly owned subsidiary GSF as
follows:
GSB:
-- Foreign currency IDR 'BB-';
-- Local currency IDR 'BB-';
-- National scale ratings 'A-(bra)'.
GSF:
-- Foreign currency IDR 'BB-';
-- USD250 million perpetual notes 'BB-'.
The Rating Outlook is Stable.
Fitch views the proposed transaction as a subordinated debt hybrid
with coupon deferral features and will treat it as a 50% equity
credit based on the characteristics incorporated in the
transaction structure. The proposed notes will be subordinated to
all the issuer's and the guarantors' senior creditors and have a
remaining maturity that is not less than five years. In addition,
the issuer has the ability to defer interest coupon payments; the
deferred coupon payments are cumulative. The proposed transaction
structure does not include material affirmative or negative
covenants, cross defaults or cross acceleration, and has limited
events of default.
The proposed issuance noted above will be unconditionally and
irrevocably, jointly and severally, guaranteed by GSB and its
subsidiaries. The guarantees constitute direct, unconditional,
unsecured and subordinated obligations of the guarantors.
Proceeds from the issuance would be used primarily to fund the
company's capex plan and improve its liquidity.
The 'B' rating for the proposed hybrid notes is two notches lower
than GSB's 'BB-' long-term IDR based on standard loss absorption
provisions, in accordance with Fitch's 'Treatment and Notching of
Hybrids in Nonfinancial Corporate and REIT Credit Analysis' (dated
Dec. 15, 2011). The 'RR6' recovery rating on the proposed hybrid
transaction reflects its subordination to the company's senior
creditors resulting in poor recovery prospects, below 10%, given
default.
GSB's ratings continue to reflect the company's business position
as one of the largest shopping center operators in Brazil's
southeastern and southern regions, with participation in 14
shopping centers, stable and predictable cash flow generation,
high leverage, and adequate liquidity. GSB's rating incorporates
the risk of completion delays and leasing of new developments, as
well as limited geographical and revenue diversification. The
ratings also consider the company's diversified tenant base,
important pool of unencumbered assets, comfortable debt payment
schedule and low working capital requirements.
GSB is currently implementing an aggressive capex plan with
several greenfield and expansion projects, which are expected to
be funded with the company's liquidity, cash flow generation
(EBITDA), and with proceeds from the proposed transaction. During
2011 the company added approximately 18,000 square meters to its
gross leasable area (GLA), ending the year with a total GLA of
210,868 square meters. The company's capex plan for 2012 and 2013
is expected to reach levels of approximately BRL236 million and
BRL328 million, respectively, increasing the company's total GLA
by 20%, from 210,868 square meters at the end of 2011 to 252,028
square meters by the end of 2013.
The company's implementation of its capex plan is expected to
increase cash flow generation. During 2010 and 2011, the
company's EBITDA was BRL82 million and BRL99 million,
respectively. GSB is expected to reach an EBITDA level of
approximately BRL135 million in 2012.
Leverage is expected to remain high. By the end of December 2011,
the company's total debt was BRL698 million, and was composed of
perpetual bonds (BRL467 million), Real Estate Credit Notes (BRL218
million), liabilities related to property purchase (BRL8 million),
and loans with local banks and others (BRL6 million). The
company's gross and net leverage, as measured by total debt/EBITDA
and total net debt/EBITDA ratios, respectively, were 7.1 times (x)
and 5.8x at the end of December 2011. On a pro forma basis,
considering the proposed transaction with a maximum total amount
of USD250 million and giving it a 50% equity credit, the company's
gross and net leverage ratios are estimated at 9.2x and 3.7x,
respectively. The company's net leverage is expected to remain
around 4x by the end of 2012.
The company's liquidity should improve with the proposed
transaction. On a pro forma basis, post issuance, the company's
liquidity is estimated at BRL548 million. The ratings incorporate
the expectation that GSB will maintain solid liquidity with
expected cash levels around BRL300 million by the end of 2012.
The company's free cash flow (FCF) is expected to be negative
during 2012, driven primarily by its capex levels. Considering
the company's solid liquidity position post issuance, negative FCF
should not result in incremental debt.
Rating Expectations:
The Stable Outlook incorporates the view that the company's
liquidity will remain solid and its net leverage will remain
stable, at levels of BRL300 million and around 4x, respectively,
during 2012.
Fitch would view a combination of the following as negative to
credit quality and possibly leading to a negative rating action:
deterioration in the company's cash position, and delays in the
company's capex resulting in total GLA and EBITDA levels below
expectations incorporated in the ratings. Considering the high
leverage, GSB's ratings are unlikely to be upgraded during the
next 12 months.
GETTY PETROLEUM: Court Approves Ross Rosenthal as Accountants
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Getty Petroleum Marketing, Inc., et al., to employ
Ross, Rosenthal & Company, LLP, as accountants for the Debtors,
nunc pro tunc to Jan. 12, 2012.
As reported in the Troubled Company Reporter on Feb. 14, 2012, as
the Debtors' accountants, RRC is expected to, among others:
(a) assist in the preparation of the monthly operating reports;
(b) assist in the preparation of the schedule of assets and
liabilities and statement of financial affairs;
(c) assist with other bankruptcy accounting issues, as
necessary, including advising the Debtors with respect to
the preparation of a plan of reorganization and related
disclosure statement; and
(d) provide any additional services necessary in connection
with the accounting advice rendered.
RRC's current hourly rates are:
Partner $400
Manager $200
Senior Associate $150
Jack Gutierrez, a principal of RRC, attests that RRC (a) is a
"disinterested person" within the meaning of Section 101(14) of
the Bankruptcy Code, as modified by Section 1107(b), as required
by Section 327(a), and does not hold or represent any interest
adverse to the Debtors' estates, and (b) has no connection to the
Debtors, its creditors or other parties in interest in the
Debtors' Chapter 11 cases.
About Getty Petroleum
A remnant of J. Paul Getty's oil empire, Getty Petroleum Marketing
markets gasolines, hydraulic fluids, and lubricating oils through
a network of gas stations owned and operated by franchise holders.
A former subsidiary of Russian oil giant LUKOIL, the company
operates in the Mid-Atlantic and Northeastern US states. Getty
Petroleum Marketing's primary asset is the more than 800 gas
stations in the Mid-Atlantic states which are located on
properties owned by Getty Realty. After scaling back the
company's operations to cut debt, in 2011 LUKOIL sold Getty
Petroleum Marketing to investment firm Cambridge Petroleum Holding
for an undisclosed price.
Getty Petroleum and three affiliates filed for Chapter 11
bankruptcy (Bankr. S.D.N.Y. Case Nos. 11-15606 to 11-15609) on
Dec. 5, 2011. Judge Shelley C. Chapman presides over the case.
Loring I. Fenton, Esq., John H. Bae, Esq., Kaitlin R. Walsh, Esq.,
and Michael J. Schrader, Esq., at Greenberg Traurig, LLP, in New
York, N.Y., serve as Debtors' counsel. Ross, Rosenthal & Company,
LLP, serves as accountants for the Debtors. Getty Petroleum
Marketing, Inc., disclosed $46,592,263 in assets and $316,829,444
in liabilities as of the Petition Date. The petition was signed
by Bjorn Q. Aaserod, chief executive officer and chairman of the
board.
The Official Committee of Unsecured Creditors is represented by
Wilmer Cutler Pickering Hale and Dorr LLP. Alvarez & Marsal North
America, LLC, serves as the Committee's financial advisors.
GETTY PETROLEUM: Judge Grants Temporary Stay on 3rd-Party Suits
---------------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that U.S. Bankruptcy
Judge Shelley C. Chapman granted Getty Petroleum Marketing Inc. a
temporary restraining order Tuesday, blocking a dispute for now
over a 2009 transfer of gas stations from Getty to then-sister
company Lukoil North America LLC and others.
Law360 relates that Judge Chapman froze the cases pending a
March 8 hearing on the debtor's motion for a preliminary
injunction, saying the automatic stay triggered by Getty's
bankruptcy applied to the cases, which were filed in various state
courts.
About Getty Petroleum
A remnant of J. Paul Getty's oil empire, Getty Petroleum Marketing
markets gasolines, hydraulic fluids, and lubricating oils through
a network of gas stations owned and operated by franchise holders.
A former subsidiary of Russian oil giant LUKOIL, the company
operates in the Mid-Atlantic and Northeastern US states. Getty
Petroleum Marketing's primary asset is the more than 800 gas
stations in the Mid-Atlantic states which are located on
properties owned by Getty Realty. After scaling back the
company's operations to cut debt, in 2011 LUKOIL sold Getty
Petroleum Marketing to investment firm Cambridge Petroleum Holding
for an undisclosed price.
Getty Petroleum and three affiliates filed for Chapter 11
bankruptcy (Bankr. S.D.N.Y. Case Nos. 11-15606 to 11-15609) on
Dec. 5, 2011. Judge Shelley C. Chapman presides over the case.
Loring I. Fenton, Esq., John H. Bae, Esq., Kaitlin R. Walsh, Esq.,
and Michael J. Schrader, Esq., at Greenberg Traurig, LLP, in New
York, N.Y., serve as Debtors' counsel. Ross, Rosenthal & Company,
LLP, serves as accountants for the Debtors. Getty Petroleum
Marketing, Inc., disclosed $46,592,263 in assets and $316,829,444
in liabilities as of the Petition Date. The petition was signed
by Bjorn Q. Aaserod, chief executive officer and chairman of the
board.
The Official Committee of Unsecured Creditors is represented by
Wilmer Cutler Pickering Hale and Dorr LLP. Alvarez & Marsal North
America, LLC, serves as the Committee's financial advisors.
GLOBAL AVIATION: Taps Kurtzman Carson as Administrative Agent
-------------------------------------------------------------
BankruptcyData.com reports that Global Aviation Holdings filed
with the U.S. Bankruptcy Court motions to retain:
-- Kurtzman Carson Consultants (Contact: Albert Kass) as
administrative agent;
-- Ernst & Young (Contact: Malcomb D. Coley) as tax advisor
at these hourly rates: executive director/principal/
partner at $765, senior manager at $615, manager at $545,
senior at $375 and staff at $190;
-- Pachulski Stang Ziehl & Jones (Contact: Debra I.
Grassgreen) as conflicts counsel at these hourly rates:
partner at $525 to $975, of counsel at $450 to $855,
associate at $395 to $495 and paraprofessional at $185
to $295; and
-- Ford & Harrison (Contact: William N. Hiers, Jr.) as
special labor counsel at these hourly rates: William
Hiers at $425, Ellen Ham at $405 and Norman Quandt at
$445.
About Global Aviation
Global Aviation Holdings Inc., based in Peachtree City, Ga., is
the parent company of North American Airlines and World Airways.
Global is the largest commercial provider of charter air
transportation for the U.S. military, and a major provider of
worldwide commercial global passenger and cargo air transportation
services. North American Airlines, founded in 1989 and based in
Jamaica, N.Y., operates passenger charter flights using B757-200ER
and B767-300ER aircraft. World Airways, founded in 1948 and based
in Peachtree City, Ga., operates cargo and passenger charter
flights using B747-400 and MD-11 aircraft.
Global Aviation, along with affiliates, filed Chapter 11 petitions
(Bankr. E.D.N.Y. Case No. 12-40783) on Feb. 5, 2012.
Global's lead counsel in connection with the restructuring is
Kirkland & Ellis LLP and its financial advisor is Rothschild.
Kurtzman Carson Consultants LLC is the claims agent.
The Debtors disclosed $589.8 million in assets and $493.2 million
in liabilities as of Dec. 31, 2011. Liabilities include $146.5
million on 14% first-lien secured notes and $98.1 million on a
second-lien term loan. Wells Fargo Bank NA is agent for both.
Global said it will use Chapter 11 to shed 16 of 30 aircraft.
In addition, Global said it will use Chapter 11 to negotiate new
collective bargaining agreements with its unions and deal with
liabilities on multi-employer pension plans.
GOLDEN STATE: S&P Cuts Rating on $127.1-Mil. Term Notes to 'BB-'
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on Golden
State Petroleum Transport Corp.'s $127.1 million secured term
notes due in 2019 ($99.7 million outstanding as of September 30,
2011) to 'BB-' from 'BB+'. "At the same time, we placed the rating
on CreditWatch with negative implications," S&P said.
"The recovery rating remains unchanged at '4', indicating our
expectation of an average (30% to 50%) recovery of principal if a
payment default occurs," S&P said.
"The downgrade reflects our expectation of poor tanker market
fundamentals coupled with our estimate of secondhand tanker values
being lower than the current net debt outstanding on the Ulriken.
Golden State is earning a negative net margin on the vessel,
drawing on its three-year debt service reserve (assuming
conservative spot rates) and increasing the future break-even
rate," S&P said.
"We believe tanker rates will remain weak through 2013 primarily
due to overcapacity and weak growth in crude oil transportation
demand, coupled with high fuel costs driven by geopolitical risk,"
said Standard & Poor's credit analyst Mark Habib.
"While VLCC average spot earnings firmed to about $22,000 per day
for December 2011, due in part to seasonality, they remain
extremely volatile, with average 2011 rates below $17,000 per day
and several months below vessel operating costs (about $11,000 per
day on an unlevered basis). We conservatively expect the Ulriken
will earn rates closer to $10,000 per day for the bulk of 2012 due
to its older age relative to the existing VLCC fleet (it is in the
oldest quartile). Although Chevron Transport did not exercise its
termination option on the Phoenix in 2010, it has another option
to terminate the charter in March 2013 by providing notice this
June. We expect that weak spot-charter earnings from the Ulriken
to date have likely raised the required time-charter rate that
Golden State must earn to fully amortize its debt to about $27,000
per day per vessel, assuming no residual value at maturity. If we
assume $300 per light displacement ton of residual scrap value,
the break-even rate falls to more than $22,000 per day, which is
still above our current spot rate assumption," S&P said.
"The negative CreditWatch reflects Golden State's exposure to a
poor charter environment for VLCC tankers through the Ulriken,
which went off charter at the end of 2010, and the short-term risk
of the Phoenix charter termination. If Chevron Transport provides
notification in June 2012 that it will exercise its termination
option for the Phoenix in 2013 and our outlook on the tanker
market remains unchanged, we could lower the project ratings
further. In addition, we could lower the rating if continued weak
charter revenues force draws on the reserve fund and increase the
future break-even rate significantly above $27,000/day. An upgrade
is unlikely but could occur if the project can charter the Ulriken
with a creditworthy counterparty and mitigate market risk on the
Phoenix (i.e., by extending the Chevron Transport charter to
2015), or find a sale that improves the liquidity enough to lower
the break-even rate significantly toward current rates," S&P said.
GRUBB & ELLIS: Unsecured Creditors Object to Sale Plan
------------------------------------------------------
Dow Jones' DBR Small Cap reports that the committee of unsecured
creditors in Grubb & Ellis Co.'s Chapter 11 case, joined by the
largest unsecured creditor owed $12.1 million, are objecting to
the real-estate company's proposed sale plan, saying it locks in
BGC Partners Inc.'s bid, which provides them with no recovery.
About Grubb & Ellis
Grubb & Ellis Company -- http://www.grubb-ellis.com/-- is a
commercial real estate services and property management company
with more than 3,000 employees conducting throughout the United
States and the world. It is one of the oldest and most recognized
brands in the industry.
Grubb & Ellis and 16 affiliates filed for Chapter 11 bankrutpcy
(Bankr. S.D.N.Y. Lead Case No. 12-10685) on Feb. 21, 2012, to sell
almost all its assets to BGC Partners Inc. The Santa Ana,
California-based company disclosed $150.16 million in assets and
$167.2 million in liabilities as of Dec. 31, 2011.
Judge Martin Glenn presides over the case. The Debtors have
engaged Togut, Segal & Segal, LLP as general bankruptcy counsel,
Zuckerman Gore Brandeis & Crossman, LLP, as general corporate
counsel, and Alvarez & Marsal Holdings, LLC, as financial advisor
in the Chapter 11 case. Kurtzman Carson Consultants is the claims
and notice agent.
The sale to BGC is subject to higher and better offers at an
auction. The Debtors have proposed a March 9 deadline for
preliminary bids, a March 19 deadline for binding bids, an auction
on March 31, 2012, and a sale hearing on March 23, 2012.
Pursuant to the term sheet signed by the parties, BGC will buy the
assets for $30.02 million, consisting of a credit bid the full
principal amount outstanding under the (i) $30 million credit
agreement dated April 15, 2011, with BGC Note, (ii) the amounts
drawn under the $4.8 million facility, and (iii) the cure amounts
due to counterparties. BGC can terminate the contract if the sale
order has not been entered by the bankruptcy court in 25 days
after the execution of the Asset Purchase Agreement.
BGC Partners, Inc., and its affiliate, BGC Note Acquisition Co.,
L.P., the DIP lender and Prepetition Secured Lender, are
represented in the case by Emanuel C. Grillo, Esq.
GTP CELLULAR: Fitch Assigns 'BB-' Rating to $155-Mil. Notes
-----------------------------------------------------------
Fitch Ratings has assigned the following ratings to GTP Cellular
Sites, LLC's secured cellular sites revenue notes, series 2012-
1/2012-2:
-- $100,000,000 series 2012-1 class A 'Asf'; Outlook Stable;
-- $114,000,000 series 2012-2 class A 'Asf'; Outlook Stable;
-- $41,000,000 series 2012-2 class B 'BBB-sf'; Outlook Stable;
-- $155,000,000 series 2012-2 class C 'BB-sf'; Outlook Stable.
The $282 million Global Tower Partners (GTP) 2012-1 and 2012-2
notes are backed by 1,177 cellular tower properties leased to
1,866 cellular tower tenants. Security for the notes includes
mortgage liens on properties representing at least 98% of the
annualized run rate net cash flow (NCF) and a pledge and first-
priority perfected security interest in 100% of the equity
interest of the issuer and the asset entities and is guaranteed by
the direct parent of GTP Cellular Sites, LLC (GTP, or the issuer).
The ownership interest in the cellular sites consists of perpetual
easements, long-term easements, prepaid leases, and fee interests
in land, rooftops, or other structures on which site space is
allocated for placement of tower and wireless communication
equipment.
GUIDED THERAPEUTICS: Submits CE Mark Application for LuViva
-----------------------------------------------------------
Guided Therapeutics, Inc., has successfully completed an annual
surveillance of its quality system necessary to maintain ISO 13485
certification, a requirement to secure the CE Mark for sale of the
LuViva Advanced Cervical Scan in the European Union (EU).
"Successfully completing these rigorous yearly audits shows that
our processes and quality system are of the highest order," said
Mark L. Faupel, Ph.D., CEO and president of Guided Therapeutics,
Inc. "We are pleased with the results of the audit and proud of
our employees who created and maintain our quality system."
Guided Therapeutics submitted the CE Mark application for LuViva
on Jan. 20, 2012. The CE Mark is required to market LuViva in the
27 nations that comprise the EU. Current expectations call for a
90 day review process.
About Guided Therapeutics
Guided Therapeutics, Inc. (OTC BB and OTC QB: GTHP)
-- http://www.guidedinc.com/-- is developing a rapid and painless
test for the early detection of disease that leads to cervical
cancer. The technology is designed to provide an objective result
at the point of care, thereby improving the management of cervical
disease. Unlike Pap and HPV tests, the device does not require a
painful tissue sample and results are known immediately. GT has
also entered into a partnership with Konica Minolta Opto to
develop a non-invasive test for Barrett's Esophagus using the
LightTouch technology platform.
The Company reported a net loss of $2.84 million in 2010 and a net
loss of $6.21 million in 2009. The Company also reported a net
loss of $3.88 million for the nine months ended Sept. 30, 2011.
The Company's balance sheet at Sept. 30, 2011, showed
$2.84 million in total assets, $5 million in total liabilities,
and a $2.16 million total stockholders' deficit.
As reported by the TCR on April 4, 2011, UHY LLP, in Atlanta,
Georgia, noted that the Company's recurring losses from
operations, accumulated deficit and lack of working capital raise
substantial doubt about its ability to continue as a going
concern.
GULFMARK OFFSHORE: Moody's Assigns 'B1' Rating to Proposed Notes
----------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to GulfMark
Offshore, Inc.'s (GulfMark) proposed notes due 2022. The Ba3
Corporate Family Rating (CFR), B1 rating on the existing notes due
2014, SGL-2 Speculative Grade Liquidity (SGL) rating, and stable
outlook remain unchanged. A portion of the proceeds from the notes
will be used to fund a tender offer and consent solicitation for
the company's existing notes due 2014 and to repay all borrowings
under the company's credit facility. Upon completion of the
tender, the ratings on the notes due 2014 will be withdrawn.
RATINGS RATIONALE
"The transaction enhances liquidity by extending debt maturities
and reducing refinancing risk," commented Jonathan Kalmanoff,
Moody's Analyst.
The Ba3 CFR reflects GulfMark's highly cyclical business, as well
as the company's high quality fleet of offshore support vessels
(OSVs), good market position, strong geographic diversification,
and deepwater focus. Demand for OSVs is sensitive to oil and
natural gas price cycles which drive the levels of offshore E&P
activity. GulfMark's small size relative to most Ba3 oilfield
service peers is balanced by its high EBITDA margins and a track
record of conservative financial policies with low leverage over
time.
The B1 senior unsecured note rating reflects both the overall
probability of default of GulfMark, to which Moody's assigns a PDR
of Ba3, and a loss given default of LGD4-63%. The size of the
senior secured revolver's priority claim relative to the senior
unsecured notes results in the notes being rated one notch beneath
the Ba3 CFR under Moody's Loss Given Default Methodology.
GulfMark's SGL-2 rating reflects good liquidity with a December
31, 2011 pro forma cash balance of $118 million and $154 million
of availability under $175 million of secured revolving credit
facilities due June 2013. The company has relatively low capital
spending requirements for 2012 with the potential to generate free
cash flow. The maximum availability under the credit facilities is
scheduled to decrease by $15 million every six months beginning
December 2011. Covenants under GulfMark's credit facilities
include debt/EBITDA of no more than 2.75x (stepping down to 2.5x
on March 31, 2012), EBITDA/interest of at least 4.0x,
equity/assets of at least 35%, and collateral/borrowings of at
least 165%.
There are no debt maturities prior to June 2013 when the credit
facilities mature. GulfMark has a number of vessels which are not
pledged as collateral under its credit facilities that could be
sold to provide a source of additional backup liquidity if needed.
An increase in scale with assets approaching $3 billion, a larger
worldwide market share, and debt/EBITDA sustained around 2x could
result in an upgrade. An increase in leverage, caused by either a
severe market contraction or heavily debt funded growth in the
fleet, with debt/EBITDA sustained above 3.5x, could result in a
downgrade.
The principal methodology used in rating GulfMark Offshore was the
Global Oilfield Services Industry Methodology published in
December 2009.
GulfMark Offshore, Inc., headquartered in Houston, Texas, is a
provider of offshore marine support services primarily to oil and
gas companies in the North Sea, Southeast Asia and the Americas.
GULFMARK OFFSHORE: S&P Rates $300-Mil. Sr. Unsec. Notes at 'BB-'
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' issue-level
rating (the same as the corporate credit rating) and '3' recovery
rating to Houston-based marine service provider GulfMark Offshore
Inc.'s $300 million senior unsecured notes due 2022. "The '3'
recovery rating indicates our expectation of a meaningful (50% to
70%) recovery in the event of default. The company will use the
proceeds to refinance its existing senior notes due 2014 and term
loan due 2014," S&P said.
"The rating on GulfMark Offshore reflects the company's position
in the volatile and cyclical marine services industry, as well as
improved market conditions over the past year. Our rating also
incorporates its geographically diverse fleet and 'adequate'
liquidity of about $283 million, including $128.8 million in cash,
as of Dec. 31, 2011," S&P said.
Rating List
GulfMark Offshore Inc.
Corporate Credit Rating BB-/Stable/--
New Rating
GulfMark Offshore Inc.
$300 mil sr unsec notes due 2022 BB-
Recovery Rating 3
HARRISBURG, PA: Council Seeks to Reinstate Bankruptcy Appeal
------------------------------------------------------------
The city of Harrisburg, Pennsylvania is appealing a district-court
decision to throw out its Chapter 9 bankruptcy case, as the state
capital continues to advocate for dealing with its debt in the
bankruptcy court rather than through a state-developed recovery
plan.
American Bankruptcy Institute reports that Harrisburg's city
council asked a federal appeals court for permission to challenge
the dismissal of its bankruptcy case.
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).
Dismissal of the Chapter 9 petition was upheld in a U.S. District
Court.
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.
HEALTH INSURANCE: S&P Affirms 'BB+' Financial Strength Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Health
Insurance Plan of Greater New York (HIP) to positive from stable.
At the same time, Standard & Poor's affirmed its 'BB+' financial
strength rating on the company.
"In addition, we are affirming the ratings of HIP's strategically
important entities, Group Health Incorporated (GHI; rated
BB/Stable) and ConnectiCare companies, namely ConnectiCare Inc,
ConnectiCare of Massachusetts Inc, and ConnectiCare of New York
(collectively ConnectiCare; rated BB+/Stable)," S&P said.
"HIP has reported positive operating performance through the first
nine months of 2011, and we expect the company to report stable,
positive earnings for the full-year 2011 and 2012. Historically,
the volatility in its operating earnings had been a key constraint
to the rating. However, in 2010 and 2011 HIP's earnings have
improved compared to the weak operating performance in 2009 and
2008. For the full year 2011, we expect HIP to report pretax
income (excluding net realized investment gains and losses and
other one-time non-operating expenses) of around $175 million and
a return on revenue (ROR) of about 3.5%. In 2012, we expect the
company to continue reporting positive earnings, with a pretax ROR
of around 2%. Although the 2012 earnings expectations (which
assume a higher medical cost trend) are lower than those in 2011,
pretax margins still remain better than similarly-rated peers,"
S&P said.
"Additionally, HIP's capitalization remains a key strength to the
rating, with statutory surplus expected to be around $1.3 billion
at year-end 2011. The company's stand-alone capital is expected to
remain redundant at least at the 'AA' level as per our insurance
risk-based capital model for 2011 and 2012. The excess capital at
HIP is critical for the rating, since HIP provides capital
contribution to weaker group entities such as GHI," S&P said.
"Both these factors ? stable, positive operating performance and
good capitalization level ? indicate an improving trend in HIP's
financial profile. Thus, we are revising our outlook to reflect
the company's positive momentum," S&P said.
"The outlook on HIP is positive. The outlook revision reflects our
expectation that HIP will maintain a good level of capitalization,
while supporting the needs of its subsidiaries. Additionally, we
expect operating performance to remain stable in the near term,"
S&P said.
"We could raise HIP's rating by one notch within the next 12
months, if the company maintains good capitalization (despite any
required capital infusion into GHI), and reports pretax earnings
of $100-$150 million, reflecting an ROR of 1.5%- 2% for the full-
year 2012. However, we may take a negative rating action on the
HIP, if operating performance turns negative or HIP's stand-alone
capitalization declines making it deficient at the 'A' level as
per our capital model," S&P said.
"Our outlooks on ConnectiCare and GHI remain stable. For
ConnectiCare, its stand-alone credit profile remains supportive of
the current rating. However, at this time we do not expect any
positive rating action on ConnectiCare due to its regional
concentration. For GHI, its weak standalone operating performance
and capitalization remain a key ratings weakness," S&P said.
H.J. HEINZ: Fitch Assigns Rating to Senior Unsecured Notes
----------------------------------------------------------
Fitch Ratings has assigned a 'BBB' rating to H.J. Heinz Company's
(Heinz) $300 million 1.5% senior unsecured notes due March 1, 2017
and $300 million 2.85% senior unsecured notes due March 1, 2022.
Fitch currently rates Heinz and its subsidiaries as follows:
H.J. Heinz Co.
-- Long-term Issuer Default Rating (IDR) 'BBB';
-- Bank facilities 'BBB';
-- Senior unsecured debt 'BBB';
-- Short-term IDR 'F2';
-- Commercial paper (CP) 'F2'.
H.J. Heinz Finance Co. (HFC)
-- Long-term IDR 'BBB';
-- Bank facilities 'BBB';
-- Senior unsecured debt 'BBB';
-- Series B Preferred Stock 'BB+';
-- Short-term IDR 'F2';
-- Commercial paper 'F2'.
H.J. Heinz Finance UK Plc.
-- Long-term IDR 'BBB';
-- Senior unsecured debt 'BBB'.
The Rating Outlook is Positive.
Heinz plans to use the net proceeds from this debt issuance for
general corporate purposes, including repayment of commercial
paper. Fitch does not expect this issuance to result in a
material increase in total debt. The new notes contain a Change
of Control Triggering Event. Upon the occurrence of both a Change
of Control and rating downgrades below investment grade, unless
Heinz exercises its right to redeem the notes, the company will be
required to make an offer to purchase the notes at a price equal
to 101% of the aggregate principal amount plus accrued and unpaid
interest. The notes were issued under Heinz's indenture dated
July 15, 2008, which contains restrictions on secured debt but
does not contain financial covenants.
Heinz's ratings continue to reflect the company's solid cash flow
generating ability, its product and geographic diversification and
its leading market positions in major food categories. Heinz is
expected to generate nearly two-thirds of its sales outside the
U.S. in fiscal 2012, so currency fluctuations periodically impact
earnings.
Approximately 21% of Heinz's sales were from emerging markets year
to date in fiscal 2012, up from 16% in fiscal 2011, and emerging
markets continue to be the company's primary growth driver.
However, earnings growth in North America and Europe has been
challenged by cost conscious consumers reacting to difficult
economic environments and higher pricing that food companies have
implemented to partially offset heightened commodity inflation.
Fiscal 2012 constant currency sales growth of 7%-8% is expected to
be driven by emerging markets, as well as from the impact from
recent acquisitions and higher pricing.
The Positive Outlook reflects Heinz's improvement in annual
leverage over the past two fiscal years through earnings growth
and modest debt reduction, although interim leverage is up
slightly due to pre-funding $600 million of notes due March 15,
2012 with a portion of a $700 million debt issuance in September
2011. Fitch is likely to upgrade Heinz's ratings if Heinz returns
to its trajectory of slightly lower leverage via earnings growth
and/or debt reduction.
Heinz's major product categories include its namesake ketchup, as
well as condiments and sauces, frozen food, soup, beans, infant
food and other processed foods. Ketchup, condiments and sauces
comprise slightly more than 40% of sales. EBITDA margins have
remained in the high teens over the past several years, and are
near the top tier for the packaged food industry, despite
commodity inflation which peaked at approximately 12% in fiscal
2009 and remains heightened. Heinz's gross inflation on
commodities was about 5% in fiscal 2011 and is expected to be
approximately 7% in fiscal 2012, as it was in the fiscal third
quarter. Heinz's inflation drivers are sweeteners, metals, meat
and dairy. Gross margin was down 140 basis points to 36.4% in the
latest quarter versus the year ago period, as higher pricing and
productivity only partially offset commodity headwinds.
Heinz's internally generated liquidity is substantial. The company
has generated more than $450 million of average annual free cash
flow (cash flow from operations less dividends and capital
expenditures) during the past four fiscal years, including
significant pension contributions. Fitch expects free cash
flow in fiscal 2012 should be near this range factoring in
approximately $150 million of cash restructuring costs, higher
capital expenditures and dividends. Cash and cash equivalents
were $848.9 million at Jan. 25, 2012. Heinz's cash flow
priorities include growing its dividend, bolt-on acquisitions
funded mainly with overseas cash, and debt reduction.
At Jan. 25, 2012, there were no borrowings on Heinz and HFC's $1.5
billion committed credit facility expiring in June 2016. In
addition, Heinz had approximately $400 million of short-term
foreign credit lines available. Upcoming debt maturities are
manageable and include the $600 million 6% notes due March 15,
2012 mentioned above and $500 million 5.35% notes due July 15,
2013. For the latest 12 months ended Jan. 25, 2012, Heinz's total
debt-to-operating EBITDA was 2.7 times (x), funds from operations
(FFO) adjusted leverage was 3.8x, and operating EBITDA-to-gross
interest expense was 6.9x. Heinz's total debt was $5.3 billion,
factoring in Fitch's adjustment to include the face amount of
HFC's $931 million 7.125% notes due 2039 in total debt.
HOLLY ENERGY: S&P Rates $300-Mil. Sr. Unsecured Notes at 'BB-'
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned a 'BB-' rating to
Holly Energy Partners L.P.'s (HEP; BB/Stable/--) $300 million
senior unsecured notes offering. "The recovery rating on the notes
is '5', indicating expectations of a modest (10%-30%) recovery in
the event of a payment default. The U.S. midstream energy company
intends to use net proceeds to repay $185 million of 6.25% notes
due 2015 through a tender offer launched yesterday. The company
also intends to repay the $72.9 million in principal remaining on
two promissory notes that were issued to wholly owned subsidiaries
of HollyFrontier Corp. in connection with last year's pipeline,
tank, loading rack, and crude receiving asset dropdown. We expect
any residual proceeds will be used to pay down HEP's revolving
credit facility balance, which had $200 million drawn at the end
of 2011," S&P said.
The corporate credit rating is 'BB' and the outlook is stable.
Ratings List
Holly Energy Partners L.P.
Corporate Credit Rating BB/Stable/--
Senior Unsecured BB-
Recovery Rating 5
Ratings Assigned
Holly Energy Partners L.P.
Holly Energy Finance Corp.
$300 Mil. Senior Unsecured Notes BB-
Recovery Rating 5
HOSTESS BRANDS: B&C Union Fund Opposes Rejection of CBAs
--------------------------------------------------------
The Bakery and Confectionery Union and Industry International
Pension Fund filed asks the U.S. Bankruptcy Court for the Southern
District of New York to deny Hostess Brands, Inc., et al.'s
request to reject certain collective bargaining agreements, and
(b) modify certain retiree benefit obligations.
The B&C Fund is a trust fund created by that certain Agreement and
Declaration of Trust dated Sept. 11, 1955 (as amended, restated or
modified from time to time). Pursuant to each of the
approximately one hundred and twenty collective bargaining
agreements between the Debtors and the BCT local unions, the
Debtors are required to make monthly pension payments to the B&C
Fund.
Though the amount of the pension payments which the Debtors made
on behalf of BCT employees varied, on average, the payments
totaled approximately $3,500,000 per month.
As of the Petition Date, the Debtors had failed to make pension
payments totaling approximately $22,295,109.
The B&C Fund explains that:
-- the Debtors failed to demonstrate that termination of their
obligation to make pension payments is necessary to permit
their reorganization; and
-- as the latest in a series of actions to favor their secured
creditors, relieving the Debtors of their obligation to make
pension payments is not fair and equitable.
The B&C Fund is represented by:
Ancela R. Nastasi, Esq.
Berry D. Spears
FULBRIGHT & JAWORSKI L.L.P.
666 Fifth Avenue
New York, NY 10103-3198
Tel: (212) 318-3000
Fax: (212) 318-3400
E-mail: anastasi@fulbright.com
bspears@fulbright.com
About Hostess Brands
Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known
for iconic brands such as Butternut, Ding Dongs, Dolly Madison,
Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride,
Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution
centers and 570 outlets in 49 states.
Hostess filed for Chapter 11 bankruptcy protection early morning
on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through
12-22056) in White Plains, New York. Debtor-affiliates that filed
separate Chapter 11 petition are IBC Sales Corporation, IBC
Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and
MCF Legacy Inc. Hostess Brands disclosed assets of $982 million
and liabilities of $1.43 billion as of Dec. 10, 2011. Debt
includes $860 million on four loan agreements. Trade suppliers
are owed as much as $60 million.
The bankruptcy filing was made two years after predecessors
Interstate Bakeries Corp. and its affiliates emerged from
bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood
Holding LLC, after providing $130 million to finance the plan,
obtained control of IBC's business following the prior
reorganization. Hostess Brands is privately held. The new owners
pursued new Chapter 11 cases to escape from what they called
"uncompetitive and unsustainable" union contracts, pension plans,
and health benefit programs.
In 2011, Hostess retained Houlihan Lokey to explore sales of its
smaller assets and individual brands. Houlihan Lokey oversaw the
sale of Mrs. Cubbison's to Sugar Foods Corporation for
$12 million, but was unable to sell any of Hostess' core assets.
Judge Robert D. Drain oversees the case. Hostess has hired Jones
Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general
corporate counsel and conflicts counsel; Perella Weinberg Partners
LP as investment bankers, FTI Consulting, Inc. to provide an
interim treasurer and additional personnel for the Debtors, and
Kurtzman Carson Consultants LLC as administrative agent.
Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry
Wilson, the head of turnaround and restructuring firm MAEVA
Advisors, are representing the Teamsters union.
Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain
Millers International Union and Bakery & Confectionery Union &
Industry International Pension Fund are Jeffrey R. Freund, Esq.,
at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David
A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright &
Jaworski L.L.P.
An official committee of unsecured creditors has been appointed in
the case. The committee selected New York law firm Kramer Levin
Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein
will head up the legal team for the committee.
The bankruptcy judge on Feb. 3 gave Hostess Brands final authority
for $75 million in secured financing. The day following the Jan.
11 Chapter 11 filing, Hostess had secured interim approval for a
$35 million loan.
HOTEL AIRPORT: Plan Filing Exclusivity Expires July 31
------------------------------------------------------
The Hon. Enrique S. Lamoutte Inclan of the U.S. Bankruptcy Court
for the District of Puerto Rico extended until July 31, 2012,
Hotel Airport Inc.'s exclusive period to propose a Chapter 11
Plan.
The Debtor related that it has filed its Plan and Disclosure
Statement on Dec. 9 2011. The hearing to consider the Disclosure
Statement is presently scheduled for April.
The Debtor's plan provides that holders of administrative expense
claims and priority claims will be paid in full on the Plan's
effective date.
The Plan will be substantially funded by the Debtor's assets and
income from the operation of business. The Plan proposes a merger
between the Debtor/HAI and and its parent, CAF, whereby a single
entity -- CAF -- will emerge.
About Hotel Airport
Hotel Airport Inc., in San Juan, Puerto Rico, filed for Chapter 11
bankruptcy (Bankr. D. P.R. Case No. 11-06620) on Aug. 5, 2011.
Judge Enrique S. Lamoutte Inclan oversees the case. Edgardo
Munoz, PSC, serves as bankruptcy counsel. Francisco J. Garrido
Molina serves as its accountant, and RS& Associates as external
auditors to perform auditing services. The Debtor disclosed
US$8,547,993 in assets and US$171,169,392 in liabilities as of the
Chapter 11 filing. The petition was signed by David Tirri, its
president.
The Debtor's plan provides that holders of administrative expense
claims and priority claims will be paid in full on the Plan's
effective date.
The Plan will be substantially funded by the Debtor's assets and
income from the operation of business. The Plan proposes a merger
between the Debtor/HAI and and its parent, CAF, whereby a single
entity -- CAF -- will emerge.
HOTEL AIRPORT: Wins OK for RS & Associates as External Auditors
---------------------------------------------------------------
The Hon. Enrique S. Lamoutte Inclan of the U.S. Bankruptcy Court
for the District of Puerto Rico authorized Hotel Airport Inc., to
employ the firm of RS & ASSOC.-PSC RS & ASSOC.-PSC as external
auditors.
RS & ASSOC is expected to, among other things:
-- audit the Company's financial statements for the year ending
Dec. 31, 2011;
-- communicate with the board of director on the planning and
the performance of the audit; and
-- assist the Company's personnel, including preparation of
schedules and analyses of accounts.
The hourly rates of RS & ASSOC's personnel are:
Partners $125
Director $110
Managers $90
Staff Members $25 to $75
RS & ASSOC estimates that services will be $16,200 for audit
services, and $3,200, for tax services, plus expenses.
Francisco A. Fernandez, a partner RS & ASSOC, assures the Court
that RS & ASSOC is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code.
Mr. Fernandez can be reached at:
RS & ASSOC.-PSC
301 Condominio El Centro II
500 Munoz Rivera Avenue
San Juan, PR 00917
Tel: (787) 296-0389
Fax:(787) 296-0390
E-mail: msantiago@rsa-cpa.com
About Hotel Airport
Hotel Airport Inc., in San Juan, Puerto Rico, filed for Chapter 11
bankruptcy (Bankr. D. P.R. Case No. 11-06620) on Aug. 5, 2011.
Judge Enrique S. Lamoutte Inclan oversees the case. Edgardo
Munoz, PSC, serves as bankruptcy counsel. Francisco J. Garrido
Molina serves as its accountant, and RS& Associates as external
auditors to perform auditing services. The Debtor disclosed
US$8,547,993 in assets and US$171,169,392 in liabilities as of the
Chapter 11 filing. The petition was signed by David Tirri, its
president.
The Debtor's plan provides that holders of administrative expense
claims and priority claims will be paid in full on the Plan's
effective date.
The Plan will be substantially funded by the Debtor's assets and
income from the operation of business. The Plan proposes a merger
between the Debtor/HAI and and its parent, CAF, whereby a single
entity -- CAF -- will emerge.
IDENTIPHI INC: Jury Slams DLA Piper With $1.3MM Negligence Verdict
------------------------------------------------------------------
Carolina Bolado at Bankruptcy Law360 reports that the former
majority shareholder of IdentiPHI Inc. won a $1.29 million jury
verdict Thursday against DLA Piper, whose allegedly negligent
advice on a bridge loan to the company left him with an unsecured
claim and little hope of recovery in IdentiPHI's subsequent
bankruptcy.
A jury in Austin, Texas, found DLA Piper 90 percent responsible
for plaintiff Chris Linegar's loss of about $1.7 million he had
loaned to IdentiPHI from his personal accounts, Law360 relates.
Austin, Tex.-based IdentiPHI, Inc., a technology company, offers a
range of enterprise security solutions and consulting services.
IdentiPHI, Inc., filed a Chapter 11 petition (Bankr. W.D. Texas
Case No. 09-10349) on Feb. 11, 2009. Judge Craig A. Gargotta
presides over the case. Joseph D. Martinec, Esq., at Martinec,
Winn, Vickers & McElroy, P.C., represents the Debtor. The Debtor
estimated assets and debts between $1 million and $10 million.
INDIANAPOLIS CITY: Moody's Cuts Housing Rev. Bond Rating to 'B1'
----------------------------------------------------------------
Moody's Investors Service has downgraded to B1 from Ba2 the rating
of Indianapolis (City of) IN Multifamily Housing Revenue Bonds
(Marcy Village Apartments Project) Series 2001, affecting
$6,865,000 of outstanding debt.
RATINGS RATIONALE
The B1 rating reflects an asset-to-debt ratio below 100% given the
15 day notice of redemption period, and a low probability that
reinvestment earnings on float funds will be sufficient to
mitigate a cashflow shortfall given historically low interest
rates.
WHAT COULD CHANGE THE RATING: UP
- An increase in the asset-to-debt ratio above 100%
- Higher interest rate environment that reduces the probability of
default or diminishes the expected loss
WHAT COULD CHANGE THE RATING: DOWN
- Prolonged low interest rate environment
- A decline in the asset-to-debt ratio
METHODOLOGY
The principal methodology used in this rating was Fixed Rate
Multifamily Housing Bonds Secured by Fannie Mae's Stand-By Credit
Enhancement Instrument published in November 2006.
INTERPUBLIC GROUP: Fitch Assigns Rating to Senior Unsecured Notes
-----------------------------------------------------------------
Fitch Ratings has assigned a 'BBB' rating to Interpublic Group of
Companies' (IPG) proposed senior unsecured notes issuance due
2022. The proceeds are expected to be used to fund the redemption
of its $400 million 4.25% convertible notes due 2023 and the
purchases of IPG common stock, if conversions of the notes result
in an aggregate redemption price less than the net proceeds of the
issuance. The company will redeem the convertible notes at par.
IPG will issue the senior notes under a new indenture (and
supplemental indentures thereto). The notes will rank pari passu
with the credit agreement, the other senior unsecured notes and
the $200 million 4.75% convertible notes due 2023 (which may be
put or redeemed by the company in March 2013).
Proposed terms are similar to previously issued senior notes.
Terms include:
-- A limitation on liens (excluding standard carve-outs), with
permitted lien basket of up to 15% of consolidated net worth
(Fitch estimates the basket at approximately $425 million);
-- An obligation of IPG to repurchase the notes at 101% upon a
change of control and rating trigger (as defined);
-- Cross acceleration or payment default on debt greater than
$50 million.
Fitch recognizes that the proposed transaction (the new notes and
the redemption of the convertible notes) is expected to be
modestly deleveraging and will benefit equity shareholder (by
reducing the risk of equity dilution). The call of the 4.25%
convertible notes will eliminate the potential conversion of the
notes into approximately 33 million shares.
IPG reported solid results with 2011 full year revenues up 7.8%
(up 6.1% on an organic basis). Fitch calculated EBITDA was up
18.6%, with EBITDA margins at 12.7% compared to 11.5% in 2010.
The growth in EBITDA was driven by revenue growth and operating
leverage within the company, as the company benefited from the
investment in personnel and operational efficiencies made over the
past five years.
Fitch expects IPG to continue to deliver competitive organic
revenue growth; IPG has guided to 3% organic growth, which
incorporates 2% to 3% in organic headwind due to business losses
in 2011. Also, IPG is in a good position to continue to grow its
EBITDA margins and reach competitive levels over the next few
years; IPG has guided to an additional 50 basis point expansion in
operating margins. Fitch believes these targets are achievable.
Fitch calculates free cash flow (FCF) at the end of 2011 of
$22.1 million, which is materially lower than 2010's FCF of
approximately $700 million. The decline in FCF is primarily
related to working capital swings, providing an unusually high
benefit in the 4th quarter of 2010 (benefiting the 2010 FCF
figure) and an unwinding of the benefit in the first quarter of
2011. In addition, the company instituted its common dividend in
2011, $111 million paid out in the year, reducing Fitch's
calculated FCF. Fitch expects FCF (after dividends) to normalize
in 2012 and be in the range of $250 million to $450 million.
Fitch views IPG's liquidity as solid, supported by a cash balance
of $2.3 billion. Fitch believes liquidity would still be
considered sufficient if the cash balance declined to between $500
million and $1 billion. However, Fitch expects IPG to maintain
sufficient liquidity to handle seasonal working-capital swings.
In addition to the $2.3 billion cash balance, IPG's liquidity
is also supported by $984 million of availability under its $1
billion bank credit facility due 2016. As of year end 2011 near-
term maturities (excluding the redemption of the 4.25% convertible
notes) include $200 million in convertible notes that may be put
to or redeemed by IPG in 2013 and $350 million in senior notes due
2014.
In late February, IPG announced an additional $300 million share
repurchase authorization and maintained the current dividend
level. The rating incorporates Fitch's belief that the company
will deploy liquidity, including FCF, towards share repurchases
and acquisitions in a disciplined manner.
The ratings reflect Fitch's expectation that IPG will manage
unadjusted gross leverage at a level below 2.5 times (x). Fitch
calculates 2011 year end unadjusted gross leverage at 2.1x. Total
debt at 2011 was $1.9 billion. This includes $111 million related
to IPG's $221.5 million perpetual preferred stock, which receive
50% equity credit under Fitch's hybrid criteria.
The ratings also reflect IPG's position in the industry as one of
the largest global advertising holding companies, its diverse
client base, and the company's ample liquidity. While advertising
is a cyclical industry, Fitch recognizes IPG and its global
advertising agency holding companies (GHC) peers have reduced
exposure to U.S. advertising cycles, by diversifying into
international markets and marketing services businesses. In
addition, the risk of revenue cyclicality is balanced by the
scalable cost structures of IPG and the other GHCs.
Fitch currently rates IPG as follows:
IPG
-- Issuer Default Rating 'BBB';
-- Senior unsecured notes (including convertibles) 'BBB';
-- Bank credit facility 'BBB';
-- Cumulative convertible perpetual preferred stock 'BB+'.
INTERPUBLIC GROUP: S&P Affirms 'BB+' Corporate Credit Rating
------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Interpublic Group of Cos. Inc. (IPG) to positive from stable.
Ratings on the company, including the 'BB+' corporate credit
rating, were affirmed.
"At the same time, we assigned the company's proposed senior
unsecured notes our 'BB+' issue-level rating with a recovery
rating of '3', indicating our expectation of meaningful (50% to
70%) recovery for noteholders in the event of a payment default,"
S&P said.
"The revised outlook reflects the company's continued progress
towards a peer-level EBITDA margin, which stood at 11.9% for 2011-
-up meaningfully from 10.7% in 2010," said Standard & Poor's
credit analyst Michael Altberg.
"In addition, fully adjusted leverage declined to 3.5x as of Dec.
31, 2011, down from 4.0x in 2010 due to EBITDA growth. Parameters
for an upgrade continue to include an EBITDA margin of more than
12%, fully adjusted leverage in the low-3x area, consistent
organic revenue growth, and a resumption of net new business wins.
Despite uncertainty in the global economy, we believe the company
potentially could achieve these metrics in 2012. However,
visibility remains low, and continued progress will depend on
execution with new business wins and increasing business from
existing clients to compensate for certain client losses in 2011.
Global economic health also will be an important variable," S&P
said.
"IPG's business risk profile is 'satisfactory' (as per our
criteria), in view of the company's broad business mix of
traditional advertising and marketing services, its progress in
margin expansion, and the increased client relationship
opportunities provided by the holding company structure.
Tempering these factors is the company's lower EBITDA margin
compared to industry peers, ongoing industry client compensation,
and competitive pressures, as well as low advertising spending
visibility," S&P said.
IPG is the fourth-largest ad agency holding company by revenue,
with a broad business mix across advertising and marketing
services disciplines and geographies. The advertising industry is
cyclical, and players are subject to clients switching to
competitors or scaling back spending on short notice. Other
industry risks include losing talent to competitors and the
increased involvement of cost-conscious procurement departments in
clients' agency selection decisions and fee negotiations since the
2008-2009 recession," S&P said.
Growth opportunities for the industry include expansion in
emerging markets--which still have relatively low advertising and
marketing spending compared to developed markets, and which
(depending on the market) largely consist of working with
multinational, as opposed to local, clients," S&P said.
"Under our base case scenario, we expect organic revenue to slow
in 2012 to around 3%. The company has indicated that due to client
losses in 2011, organic revenue will be negatively impacted by 2%
to 3% in 2012. However, even under this scenario, assuming
continued progress with cost containment, we believe EBITDA could
grow at a high-single-digit percentage rate," S&P said.
IPC SYSTEMS: S&P Assigns 'B-' Rating to First-Lien Debt Due 2017
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' issue-level
rating and '3' recovery rating to the proposed first-lien debt due
2017 of Jersey City, N.J.-based trading systems and network
services provider IPC Systems Inc. The company's current ratings,
including its 'B-' corporate credit rating, remain unchanged.
"The proposed debt represents an extension of maturities on a
portion of IPC's existing first-lien debt due 2014. Approximately
$617 million of first-lien debt was outstanding as of Dec. 31,
2011, and we assume the majority will be extended. The ratings are
based on preliminary terms and conditions," S&P said.
"The ratings on IPC reflect a 'highly leveraged' financial risk
profile and a 'weak' business risk profile. Our business risk
assessment incorporates the company's concentrated product line
and heavy reliance on the financial services industry, which
represent all of its customers. We expect financial services firms
to be under pressure to reduce spending for the foreseeable future
because of lower profitability and stricter regulations, and we
assume this will lead to a decline in new orders for IPC's
products. However, we believe the mostly recurring revenue
associated with contracts for maintenance and network services
will partly offset the overall effect on revenues on EBITDA," S&P
said.
Ratings List
IPC Systems Inc.
Corporate credit rating B-/Positive/--
Ratings Assigned
Senior secured
First-lien loans due 2017 B-
Recovery rating 3
JETBLUE AIRWAYS: Fitch Affirms 'B-' Issuer Default Rating
---------------------------------------------------------
Fitch Ratings affirms JetBlue Airways Corp.'s (JBLU) Issuer
Default Rating (IDR) at 'B-', and upgrades the senior unsecured
rating, which applies to approximately $285 million of convertible
notes, to 'CCC/RR5' from 'CC/RR6'. The Rating Outlook for JBLU
remains Stable.
The 'B-' IDR reflects JBLU's high lease-adjusted leverage,
earnings vulnerability to higher fuel prices and the inherent
risks of the airline industry, balanced by the carrier's
competitive cost structure, industry leading revenue performance,
improving cash flow profile and healthy liquidity position. JBLU
generated $90 million in free cash flow (FCF) in 2011 despite a
49% year-over-year increase in fuel costs and higher capital
expenditure. Fitch acknowledges that the carrier has generated
positive FCF for three consecutive years reflecting management's
focus on cash flow metrics and ROIC. The carrier has a solid
liquidity position of $1.2 billion of unrestricted cash and short-
term investments which represents 27% of latest 12 months (LTM)
revenues as of year-end 2011. Fitch expects debt levels to remain
stable as the company plans to use cash to purchase several of its
A320 deliveries in 2012.
The rapid spike in oil and jet fuel prices during February remains
the biggest concern for JBLU and underscores the importance of
industry capacity discipline, and the ability and willingness of
carriers to raise fares. To that end, the industry has initiated
three broad-based fare increases year-to-date, with most major
carriers including JBLU participating, but execution and ultimate
success of these initiatives is key. JBLU also maintains a
conservative fuel-hedging program and has locked in 27% of its
2012 fuel consumption, which will provide some protection if spot
prices continue to move higher this year. The carrier also
anticipates higher maintenance costs in 2012 as JBLU's fleet gets
older and several aircraft purchased during the mid 2000s are now
due for engine restoration, and more extensive maintenance checks.
JBLU planned capacity growth of 5.5%-7.5% is significantly higher
than the rest of the industry, where most U.S. carriers are
keeping capacity flat or have announced 2%-3% reductions.
However, JBLU's recent traffic trends and unit revenue performance
support this growth. The airline plans to expand mainly in its
key Boston and Caribbean markets which thus far, have been good
investments for the airline as legacy carriers have retrenched
from these markets. Specifically in Boston, JBLU is looking to
increase its mix of business customers who typically yield $35-$40
more in average fares and are expected to drive ancillary revenue
streams like Even More service offerings. JBLU's growth through
partnerships such as Hawaiian and Japan Airlines announced
recently, is a prudent way to expand and enhance its network
offerings.
JBLU's aggressive growth plans still pose a risk given the surge
in jet fuel and anticipated cost headwinds in the second half of
the year. Fitch's base case which incorporates the current
forward curve for jet fuel projects slightly negative FCF for 2012
and higher aircraft capital expenditure as the carrier resumes
delivery of aircraft deferred during the downturn. Scheduled
deliveries for 2012 include seven Airbus A320s, and four Embraer
E190s. Other cash obligations are modest with $198 million in
scheduled debt maturities. JBLU enhanced its liquidity position
in September 2011 by entering into a three-year $125 million
unsecured revolving credit facility with American Express,
exclusively for the purchase of jet fuel. This facility
introduces financial covenants which include minimum cash and
short-term investment levels and EBITDA margin. Fitch expects
JBLU to be compliant with all its covenants in 2012.
Higher fares, along with healthy liquidity and management's
conservative stance are expected to mitigate the impact of rising
fuel prices. JBLU weathered the 2008-2009 industry downturn well
and is better positioned to cope with potential operating stresses
than many of its peers due to its competitive cost structure and
network focus on niche markets. Fitch expects lease-adjusted
leverage (debt and leases relative to EBITDAR) to approximate 6.0
times (x) this year, absent a fuel price correction and associated
margin expansion.
The current Outlook for JBLU remains Stable in light of surging
fuel prices, but the carrier is positioned well for a Positive
Outlook revision if it continues to generate FCF through the
course of the year, despite fuel and maintenance cost headwinds.
Fitch does not anticipate any negative revision absent an extreme
and sustained fuel price shock accompanied by diminished industry
pricing power.
The Recovery Ratings and notching in the debt structure reflect
Fitch's recovery expectations under a scenario in which distressed
enterprise value is allocated to the various debt classes. The
upgrade of the senior unsecured recovery rating to 'RR5' from
'RR6' reflects revised estimates for liquidation valuations of
JBLU's assets, which modestly increased the potential recovery for
the senior unsecured debt. The 'RR5' reflects expected recoveries
between 11%-30% in a distressed scenario.
LEHMAN BROTHERS: Court OKs $5-Bil. Reserve for RMBS Claims
----------------------------------------------------------
The U.S. Bankruptcy Court in Manhattan has approved a $5 billion
reserve for the claims of indenture trustees for residential
mortgage-backed securities.
Lehman Brothers Holdings Inc. previously proposed to estimate the
claims as part of its effort to expedite the distributions to
creditors under its $65 billion payout plan.
The indenture trustees are U.S. Bank N.A., Citibank N.A.,
Wilmington Trust Company, Deutsche Bank National Trust Company
and Wells Fargo Bank N.A.
The indenture trustees sought to recover $37 billion in claims
from Lehman and Structured Assets Securities Corp. for allegedly
breaching warranties by selling defective mortgages into the
securitizations.
Pursuant to the bankruptcy court's February 22 order, the claims
of the indenture trustees are to be estimated as unsecured claims
in the sum of $5 billion. Ninety-five percent of the claims will
be allocated to Lehman while the rest will be allocated to SASCO.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Additional units, Merit LLC, LB Somerset LLC and LB Preferred
Somerset LLC, sought for bankruptcy protection in December 2009
or more than a year after LBHI and its other affiliates filed
their bankruptcy cases.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers
International (Europe) on Sept. 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan
Inc. filed for bankruptcy in the Tokyo District Court on
Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4
trillion (US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates. (http://bankrupt.com/newsstand/or
215/945-7000)
LEHMAN BROTHERS: LBI Trustee Taps Lexolution to Provide Staffing
----------------------------------------------------------------
The trustee liquidating Lehman Brothers Holdings Inc.'s brokerage
seeks court approval to avail of Lexolution LLC's contract
staffing services.
James Giddens tapped the firm to provide temporary lawyers to
perform document review tasks and other services. Although
employed by Lexolution, the lawyers will work under the
supervision of the trustee's outside counsel.
In return for their services, the lawyers will be paid $45 to
$49.50 per hour and will be reimbursed of their expenses.
Each lawyer will be required to execute an affidavit and
disclosure statement certifying that he is disinterested under
the Securities Investor Protection Act. The trustee will then
file those documents with the U.S. Bankruptcy Court in Manhattan.
The application will be presented to Judge James Peck on March 6,
2012, for approval. Objections are due by March 5, 2012.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Additional units, Merit LLC, LB Somerset LLC and LB Preferred
Somerset LLC, sought for bankruptcy protection in December 2009
or more than a year after LBHI and its other affiliates filed
their bankruptcy cases.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers
International (Europe) on Sept. 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan
Inc. filed for bankruptcy in the Tokyo District Court on
Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4
trillion (US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates. (http://bankrupt.com/newsstand/or
215/945-7000)
LEHMAN BROTHERS: Deal for HSBC to Return $52MM Approved
-------------------------------------------------------
Lehman Brothers Holdings Inc. obtained court approval of an
agreement which requires HSBC Bank Plc to return about $52
million to the company.
HSBC originally held about $450 million of Lehman assets in
Eurodollar accounts, some of which are offset by its claims
against the company.
A copy of the agreement governing the turnover of funds can be
accessed at http://bankrupt.com/misc/LBHI_OrdStipHSBCFunds.pdf
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Additional units, Merit LLC, LB Somerset LLC and LB Preferred
Somerset LLC, sought for bankruptcy protection in December 2009
or more than a year after LBHI and its other affiliates filed
their bankruptcy cases.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers
International (Europe) on Sept. 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan
Inc. filed for bankruptcy in the Tokyo District Court on
Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4
trillion (US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates. (http://bankrupt.com/newsstand/or
215/945-7000)
LIBERTY BANKERS: A.M. Best Affirms B- Financial Strength Rating
---------------------------------------------------------------
A.M. Best Co. has removed from under review with negative
implications and affirmed the financial strength ratings (FSR) of
B- (Fair) and issuer credit ratings (ICR) of "bb-" of Liberty
Bankers Life Insurance Company (Liberty Bankers) and its life
insurance subsidiary, American Benefit Life Insurance Company
(American Benefit). Both companies are domiciled in Oklahoma
City, OK.
Concurrently, A.M. Best has assigned an FSR of B- (Fair) and an
ICR of "bb-" to another Liberty Bankers subsidiary, The Capitol
Life Insurance Company (Capitol Life) (Dallas, TX). The outlook
assigned to all ratings is stable.
The rating actions primarily reflect the recent substantial
increase in both the absolute and risk-adjusted capital of Liberty
Bankers due to a total of approximately $50 million in cash and
income-producing real estate, which was contributed during the
past two calendar quarters by its former parent, Realty Advisors,
Inc. In addition, below investment grade bonds and the dollar
amount of delinquent loans within Liberty Bankers' direct
commercial loan portfolio have declined over the past year. While
management also has been focusing on reducing some of Liberty
Bankers' less liquid alternative investments, A.M. Best remains
concerned with its relatively high level of real estate-related
investments, which currently represent about 30% of invested
assets and over three times capital and surplus.
The ratings also reflect the recent legal separation of Liberty
Bankers from Realty Advisors, Inc., which became effective at
year-end 2011. A.M. Best was concerned over the uncertainty
regarding the financial condition of the real estate operations of
Realty Advisors, Inc. and the impact it could have on Liberty
Bankers given the current economic environment. However, A.M.
Best believes that these concerns have been substantially
mitigated by the structural separation of the companies.
Liberty Bankers is the group's primary marketing arm with almost
$190 million of direct premiums written through September 30,
2011. The group's direct premiums have fluctuated in recent years
due to a spike in annuity sales in 2008 and 2009 as a result of
the flight to more stable fixed-income products during the
financial crisis. While Liberty Bankers has been attempting to
grow its ordinary life business in recent periods, it currently
represents only a modest amount of sales. A.M. Best notes that
the company has reported positive statutory earnings over the past
five years despite investment impairments in its fixed-income and
direct commercial mortgage loan portfolios.
American Benefit has experienced an increase in net premiums
through its reinsurance relationship with Texas Service Life
Insurance Company (Austin, TX) where it assumes pre-need and whole
life insurance policies. Also, as of year-end 2010, the company's
capital position increased considerably due to its merger with
former affiliate Winnfield Life Insurance Company (Winnfield
Life). The merger also added a modest amount of direct premiums
as Winnfield Life was a direct writer of pre-need life insurance
in Louisiana. American Benefit also maintains an adequate risk-
adjusted capital position for its current ratings. While the
company has some exposure to mortgage loans in its investment
portfolio, A.M. Best believes that American Benefit presently has
sufficient capital to cover its current insurance and investment
risks.
The ratings assigned to Capitol Life acknowledge its solid level
of risk-adjusted capitalization, positive operating results and
fairly liquid investment portfolio. Offsetting these positive
rating factors is its short operating history since being acquired
out of regulatory supervision in December 2007 and the real
estate-related investment exposure of its direct parent, Liberty
Bankers.
Positive rating actions could occur if the group's risk-adjusted
capital levels continue to improve, its exposure to real estate-
related investments is substantially reduced and if the
subsidiaries demonstrate controlled growth of their interest-
sensitive business. Key factors that could result in negative
rating actions include deterioration of risk-adjusted capital,
material investment-related losses or a meaningful increase in
commercial mortgage loan delinquencies.
LIMITED BRANDS: S&P Affirms 'BB+' Corporate Credit Rating
---------------------------------------------------------
Standard & Poor's Ratings Services changed the short-term rating
on Limited Brands to 'B' from 'B-1' following the revision of
short-term rating definitions for the 'B' category, and the
removal of the 'B-1', 'B-2', and 'B-3' rating definitions. "At the
same time, we are affirming all other ratings on the company,
including the 'BB+' corporate credit rating. The outlook is
stable," S&P said.
"The ratings on Columbus, Ohio-based apparel retailer Limited
Brands Inc. reflect our expectation for further performance gains
during 2012--though at a lower rate than the previous year--and
for financial policies to remain aggressive," said Standard &
Poor's credit analyst David Kuntz. He added, "Both its Victoria's
Secret (VS) and Bath & Body Works (BBW) divisions are relatively
mature, and historically have provided consistent and solid cash
flows."
"The stable outlook on Limited Brands reflects our view that the
company's financial policies will remain aggressive, but that it
will manage its shareholder activities, with leverage at about 3x
over the near term. The outlook also incorporates our view that
the company will demonstrate modest performance gains over the
next year, but at a lower rate than the prior year," S&P said.
"We could lower the rating if additional shareholder-friendly
activities or erosion in performance results in leverage above
3.5x. An example of this scenario would be if the company issued
more than $750 million of additional debt while performance growth
is in the low-single digits," S&P said.
"An upgrade is unlikely over the near term because we currently
assess the company's financial risk profile below investment-grade
and believe that the financial policies will remain aggressive
over the intermediate term," S&P said.
"However, we could upgrade the company if we received further
clarity into its long-term financial policy with respect to
dividends, share repurchases, and debt issuance. Additionally, the
company would have to demonstrate stronger credit protection
measures, with leverage in the low-2x area and interest coverage
approaching 6x," S&P said.
LINN ENERGY: S&P Affirms 'B+' Corporate Credit Rating
-----------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on E&P company Linn Energy LLC and revised the
outlook to stable from positive.
"At the same time we rated the company's proposed $1.5 billion
senior unsecured notes 'B' (one notch below the corporate credit
rating), and assigned a recovery rating of '5' to the notes,
indicating expectations for modest (10% to 30%) recovery in a
payment default," S&P said.
"The revised outlook on Linn reflects the increased debt leverage
following the note issuance, about 3.9x base on our price
assumptions of $3.00 mmbtu natural gas and $80 per barrel crude
oil in 2012, and that it is unlikely Linn can meet our 3.5x
adjusted debt leverage target for an upgrade," said Standard
& Poor's credit analyst Paul B. Harvey.
"The ratings on Linn Energy LLC reflect the company's growing
midsize reserve base, elevated financial leverage, and substantial
quarterly distributions paid to unitholders. The low geological
risk inherent in the company's reserve base, balanced production
mix between natural gas and liquids, and substantial commodity
price hedges partially offset these weaknesses," S&P said.
"Linn Energy is a limited liability company. However, it resembles
a master limited partnership (MLP) in several ways, and Standard &
Poor's generally refers to the company as an exploration and
production MLP. Most notably, Linn Energy pays out substantially
all available cash flow to unitholders on a quarterly basis, and
equity investors tend to value the company on a yield basis.
Unlike an MLP, there is neither a general partnership interest nor
incentive distribution rights," S&P said.
"To provide stability to production levels (needed to help
maintain distribution levels), Linn Energy operates primarily in
very mature basins. The Hugoton acquisition is one such basin,
where the geology is well known and wells have been operated for
many years. In addition, Linn significantly hedges future
production, up to 100% run-rate levels, to provide further
stability to cash flows," S&P said.
"The outlook is stable. We expect the company to maintain adjusted
distribution coverage of at least 1.1x, per the company's
definition, and to maintain adjusted debt/EBITDA between 3.5x to
4x, although debt leverage may peak above this range due to
acquisitions in the short term. We could consider a positive
rating action if we expect adjusted debt/EBITDA will remain below
3.5x. We could consider a downgrade if debt to EBITDA exceeds
4.75x on a sustained basis," S&P said.
LOS ANGELES DODGERS: Narrow Down Bidders for MLB Screening
----------------------------------------------------------
Steven Melendez at Bankruptcy Law360 reports that Los Angeles
Dodgers LLC said it has determined which bidders in its Chapter 11
bankruptcy sale will move forward for approval by Major League
Baseball, setting the stage for an estimated $800 million auction
of the team by April.
Law360 relates that team representatives declined to comment on
the identity or number of the potential buyers, but the Los
Angeles Times reported that at least six bidders remained,
including basketball legend Magic Johnson and Connecticut hedge
fund billionaire Steven Cohen.
About Los Angeles Dodgers
Los Angeles Dodgers LLC operates the Los Angeles Dodgers, a
professional Major League Baseball club in the Los Angeles
metropolitan area. Frank McCourt, a Boston real-estate developer
who unsuccessfully bid for the Boston Red Sox, bought the Dodgers
from Rupert Murdoch's Fox Entertainment Group, Inc. in 2004 for
$330 million. Mr. McCourt also bought the Dodgers Stadium from
Fox for $100 million.
Los Angeles Dodgers LLC filed for bankruptcy protection (Bankr.
D. Del. Lead Case No. 11-12010) on June 27, 2011, after MLB
Commissioner Bud Selig rejected a television deal with News
Corp.'s Fox Sports, leaving Mr. McCourt unable to make payroll for
June 30 and July 1. Fox Sports has exclusive cable television
rights for Dodgers games until the end of 2013 baseball season.
Chapter 11 filings were also made for LA Real Estate LLC, an
affiliated entity which owns Dodger Stadium, and three other
related holding companies.
The petition estimates assets of up to $500 million and debts of
up to $1 billion. In its schedules, the LA Dodgers baseball club
disclosed $77,963,734 in assets and $4,695,702 in liabilities. LA
Real Estate LLC disclosed $161,761,883 in assets and $0 in
liabilities.
According to Forbes, the team is worth about $800 million, making
it the third most valuable baseball team after the New York
Yankees and the Boston Red Sox.
Judge Kevin Gross presides over the case. Lawyers at Young,
Conaway, Stargatt & Taylor and Dewey & LeBoeuf LLP serve as the
Debtors' bankruptcy counsel. Epiq Bankruptcy Solutions LLC is the
claims and notice agent. Public relations specialist Kekst and
Company has been hired for crisis support. Covington & Burling
LLP serves as special counsel.
An official committee of unsecured creditors has been appointed in
the case. The panel has tapped Lazard Freres & Co. as financial
adviser and investment banker, and Morrison & Foerster LLP and
Pinckney, Harris & Weidinger, LLC as counsel.
The LA Dodgers is the 12th sports team in North America to have
sought bankruptcy protection.
The reorganization is being financed with a $150 million unsecured
loan from the Commissioner of Major League Baseball. The loan
gives the Commissioner few of the controls lenders often demanded
from bankrupt companies.
On Feb. 22, 2012, the Bankruptcy Court approved the disclosure
statement explaining the Dodgers' Chapter 11 bankruptcy plan.
The Plan contemplates that all creditor claims will be satisfied
in full either through their assumption by the reorganized debtors
or by the payment of cash from proceeds from the sale of the team.
Only one creditor -- the parent of the holding company for the
team -- may vote on the plan by March 16.
LOUISIANA LOCAL: Moody's Cuts Housing Revenue Bond Rating to 'B2'
-----------------------------------------------------------------
Moody's Investors Service has downgraded to B2 from Ba3 rating on
Louisiana Local Government Environmental Facility and Community
Development Authority Multifamily Housing Revenue bonds (Park
East/Bellemont Victoria/Bellemont Victoria II Apartments) Senior
Series 2002A and to B2 from Ba3 rating on Subordinate Series 2002C
bonds. The rating outlook for the Senior and Subordinate bonds has
been revised to negative.
RATING RATIONAL
This rating action is based on review of unaudited 2011 operating
statements for the Park East, Bellemont Victoria, and Bellemont
Victoria II Apartments, coupled with Moody's current rating of
MBIA Inc. (currently rated B2/ NEG), which holds the debt service
reserve fund of the projects in a Guaranteed Investment Contract
(GIC). Non-performance of the GIC provider is a risk to
bondholders in transactions where bond payments rely wholly or
partially on a GIC.
STRENGTHS
- Continued adequate operating performance at the project
CHALLENGES
- Debt service reserve fund invested with a low rated provider
Outlook
The rating outlook for the Senior and Subordinate bonds has been
revised to negative, given the negative outlook of MBIA, Inc,
which holds the debt service reserve fund of the project in a GIC.
What Could Change the Rating UP:
- Several reporting periods that show consistent revenue growth
and continued strong occupancy
- Replacement of the debt service reserve fund with a highly rated
provider
What Could Change the Rating DOWN:
- Any erosion of current occupancy levels or increases in expenses
that affect debt service coverage
- Any rating deterioration of the GIC provider
The principal methodology used in this rating was Global Housing
Projects published in July 2010.
MAMMOTH GRADING: Ferguson Dispute Remanded to Bankruptcy Court
--------------------------------------------------------------
Senior District Judge Malcolm J. Howard vacated a bankruptcy court
ruling in a dispute between Ferguson Enterprises, Inc. of Virginia
and Mammoth Grading, Inc., and remanded the case.
Ferguson is an unpaid subcontractor who provided labor and
materials for the improvement of a number of real estate projects
undertaken by Mammoth Grading, Inc., and Harrelson Utilities,
Inc., which are debtors in two separate cases. After Harrelson
filed its bankruptcy petition, Ferguson filed notices of claims of
liens on funds due Harrelson and, by subrogation to Harrelson's
lien rights, claims of liens on the real property. Likewise,
Ferguson filed post-petition notices of claims of liens on funds
due Mammoth and, by way of subrogation to Mammoth's rights, claims
of liens on the real property. In each case, the bankruptcy court
held that the post-petition filing and service of claims of liens
and notices of claims of liens filed by Ferguson and other
subcontractors violated the automatic stay imposed by 11 U.S.C.
Sec. 362. Ferguson appealed the bankruptcy court's orders in both
cases to the District Court. Four other subcontractors affected by
the bankruptcy court's order in In re Mammoth Grading, Inc. also
appealed. On Aug. 26, 2010, the District Court consolidated the
Harrelson and Mammoth appeals. With the exception of Ferguson's
claim in Mammoth, all claims by the subcontractors have since been
settled and the appeals dismissed.
The case before the District Court is, FERGUSON ENTERPRISES, INC.
OF VIRGINIA, Appellant, v. MAMMOTH GRADING, INC., Appellee, No.
5:10-CV-316-H (E.D.N.C.). A copy of the District Court's Feb. 23,
2012 Order is available at http://is.gd/IORJ9Ofrom Leagle.com.
Based in Zebulon, North Carolina, Harrelson Utilities, Inc. filed
for Chapter 11 bankruptcy protection (Bankr. E.D.N.C. Case No.
09-02815) on April 6, 2009. Assets and liabilities are listed as
less than $10 million. A Chapter 11 Plan was confirmed by order
dated April 16, 2010.
Mammoth Grading, Inc., filed a voluntary Chapter 7 petition
(Bankr. E.D.N.C. Case No. 09-01286) in February 2009.
MERCED REDEV'T: S&P Cuts Rating on Series 2009A Bonds to 'BB+'
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating to 'BB+'
from 'A-' on Merced Redevelopment Agency, Calif.'s series 2009A
tax allocation bonds. The outlook is negative.
"The rating action reflects our view of the decline in the
agency's tax increment revenues due to a significant drop in
assessed value in the Merced Gateways Redevelopment Project," said
Standard & Poor's credit analyst Matthew Reining. "As a result,
tax increment revenue coverage of bonds fell to below 1x maximum
annual debt service by our calculations."
"The negative outlook reflects our view of the agency's projected
assessed value (AV) declines as well as a potential draw on the
debt service reserve. We would need to evaluate the use of any
unpledged resources, particularly in light of the abolishment of
redevelopment agencies and the City of Merced's decision to not
serve as the successor agency. If AV were to fall such that the
parity coverage eroded further, we could lower the rating. If AV
and coverage stabilize, we could revise the outlook to stable. If
AV grows, leading to an increase in coverage, particularly if it
meets maximum annual debt service, we could raise the rating," S&P
said.
MF GLOBAL: Freeh Sporkin Okayed as Trustee's Regulatory Counsel
---------------------------------------------------------------
Judge Martin Glenn authorized Louis J. Freeh, the Chapter 11
Trustee for the bankruptcy cases of MF Global Holdings Ltd. and
its affiliates, to employ Freeh Sporkin & Sullivan, LLP, as the
Chapter 11 Trustee's investigative counsel, nunc pro tunc to
November 28, 2011. However, Freeh Sporkin will not withdraw as
the Chapter 11 Trustee's investigative counsel prior to the
effective date of any Chapter 11 Plan confirmed in the Debtors'
bankruptcy cases without prior approval of the Court.
As the Chapter 11 Trustee's investigative counsel, Freeh Sporkin
will:
(a) represent the Chapter 11 Trustee in his dealings with
various regulatory authorities, including but not limited
to the Commodity Futures Trading Commission, the
Securities and Exchange Commission, and the Chicago
Mercantile Exchange;
(b) represent the Chapter 11 Trustee in his dealings with
various prosecutors' offices and law enforcement
authorities;
(c) represent the Chapter 11 Trustee in his dealings with
various U.S. House and Senate Committees and Sub-
Committees;
(d) coordinate, on behalf of the Chapter 11 Trustee,
information requests and responses to all regulators,
Congressional committees, prosecutors' offices, lender
groups, and other parties-in-interest in the bankruptcy
process;
(e) in the execution of the Chapter 11 Trustee's duties under
Section 1106(a)(3) of the Bankruptcy Code, assisting the
Chapter 11 Trustee in his investigation of the acts and
conduct of the Debtors including, but not limited to,
scheduling, preparing for, and conducting witness
interviews in connection with the Chapter 11 Trustee's
investigations, provided that Freeh Sporkin and Kasowitz,
Benson, Torres & Friedman, LLP will make every effort to
reduce or avoid duplication of work as Kasowitz Benson
transitions out of the Debtors' Chapter 11 cases; and
(f) assist the Chapter 11 Trustee in undertaking additional
tasks that the Court may direct.
The Chapter 11 Trustee and Freeh Sporkin have agreed that in
connection with its services the firm will be paid its customary
hourly rates, less a discount of 10%. Freeh Sporkin will also be
reimbursed for expenses incurred.
The principal professionals expected to provide investigative
counsel services to the Chapter 11 Trustee and their hourly rates
are:
Name/Title Rate per Hour
---------- -------------
Louis J. Freeh $850
Partner
Thomas McC. Souther, Esq. $750
Partner
souther@freehgroup.com
Thomas O. Melvin, Esq. $300
Associate
melvin@freehgroup.com
The current hourly rates for other Freeh Sporkin professional
staff members, who may be retained in these Chapter 11 Cases, are
as set forth:
Title Rate per Hour
----- -------------
Partners $600 to $750
Senior Counsel $600 to $750
Associates $275 to $500
Mr. Freeh, in his capacity as founder and senior managing partner
of Freeh Sporkin & Sullivan, LLP, discloses that James Bucknam,
former Assistant United States Attorney for the Southern District
of New York worked for the United States Attorney for the
Southern District of New York at the same time as Serene K.
Nakano, who is now employed by the U.S. Trustee for Region 2.
Mr. Freeh relates that to ensure that as Chapter 11 Trustee he
will remain disinterested, Freeh Sporkin and its affiliate law
firm Freeh Group International Solutions, LLC, to which Mr. Freeh
is the founder and chairman agree that they will not represent
any client other than him as Chapter 11 Trustee in connection
with these Chapter 11 cases.
Mr. Freeh insists that Freeh Sporkin is a "disinterested person"
as the term is defined in Section 101(14) of the Bankruptcy Code.
About MF Global
New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/
-- is one of the world's leading brokers of commodities and
listed derivatives. MF Global provides access to more than 70
exchanges around the world. The firm is also one of 22 primary
dealers authorized to trade U.S. government securities with the
Federal Reserve Bank of New York. MF Global's roots go back
nearly 230 years to a sugar brokerage on the banks of the Thames
River in London.
MF Global Holdings Ltd. and MF Global Finance USA Inc. filed
voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-
15059 and 11-5058) on Oct. 31, 2011, after a planned sale to
Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF
Global had $41,046,594,000 in total assets and $39,683,915,000 in
total liabilities. It is easily the largest bankruptcy filing so
far this year.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of
MF Global Finance USA Inc.
MFGH's subsidiaries MF Global Capital LLC, MF Global FX
Clear LLC and MF Global Market Services, LLC filed for bankruptcy
protection on December 19, 2011.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at
Hughes Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing. Seven directors of MF Global Holdings resigned from their
posts on Nov. 28, 2011.
U.S. regulators are investigating about $633 million missing from
MF Global customer accounts, a person briefed on the matter said
Nov. 3, according to Bloomberg News.
The New York Stock Exchange has removed MFGI securities from
listing.
Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by MF Global Holdings and other insolvency and
bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
MF GLOBAL: Kasowitz Approved as Trustee's Conflicts Counsel
-----------------------------------------------------------
Judge Martin Glenn permitted Louis J. Freeh, the Chapter 11
Trustee for the bankruptcy cases of MF Global Holdings Ltd. and
its affiliates, and the Debtors to jointly employ Kasowitz,
Benson, Torres & Friedman LLP as conflict counsel and special
investigative counsel, nunc pro tunc to November 3, 2011 to March
31, 2012.
Judge Glenn ruled that the aggregate amount of compensation
sought by Kasowitz for professional services rendered on or
before the appointment date will be reduced by 10%.
The Debtors and the Chapter 11 Trustee may extend the retention
of Kasowitz as special counsel to the Chapter 11 Trustee beyond
March 31, 2012 with Court approval.
Louis J. Freeh, the Chapter 11 Trustee for the bankruptcy cases of
MF Global Holdings Ltd. and its affiliates, and the Debtors
jointly seek the Court's permission to employ Kasowitz, Benson,
Torres & Friedman LLP as conflict counsel and special
investigative counsel, nunc pro tunc to November 3, 2011 to March
31, 2012.
Kasowitz Benson will represent and advise the Chapter 11 Trustee
in connection with certain formal and informal investigative
matters and the transition of those matters to the Chapter 11
Trustee and his counsel at Freeh Sporkin & Sullivan. Kasowitz
Benson will assist the Chapter 11 Trustee to analyze,
investigate, defend, cooperate with and respond to certain formal
and informal investigation matters that have been commenced or
may be commenced against the Debtors.
Because of the Debtors' quick and sudden collapse, they have
received numerous subpoenas or information requests from various
governmental agencies like the U.S. Securities and Exchange
Commission and the Commodity Futures Trading Commission requiring
the preservation, collection and review of voluminous data and
documents in the possession, custody or control of the Debtors.
Due to the commencement of a SIPA proceeding relating to the
Debtors' affiliate, MF Global Inc. and the appointment of a SIPA
trustee for that entity, numerous issues have arisen regarding
the obligations and responsibilities between and among the
entities concerning the ownership, control and preservation of
the relevant documents and data as well as the need to respond to
information requests and a subpoena from the SIPA Trustee.
The Debtors sought the advice and assistance of Kasowitz Benson
in connection with the Representative Matters because the
Debtors' primary bankruptcy counsel, Skadden, Arps, Slate,
Meagher & Flom LLP, was unable to represent the Chapter 11
Debtors in such matters because of actual or potential conflicts
of interest.
The principal Kasowitz Benson attorneys designated to represent
the Debtors and their current standard hourly rates are:
Name/Title Rate per Hour
---------- -------------
Marc E. Kasowitz, Esq. $1,100
Partner
mkasowitz@kasowitz.com
David S. Rosner, Esq. $875
Partner
drosner@kasowitz.com
Daniel J. Fetterman, Esq. $850
Partner
dfetterman@kasowitz.com
Aaron H. Marks, Esq. $800
Partner
amarks@kasowitz.com
David J. Mark, Esq. $800
Of Counsel
dmark@kasowitz.com
Jeffrey R. Gleit, Esq. $640
Partner
jgleit@kasowitz.com
Emilie Cooper, Esq. $435
Associate
ecooper@kasowitz.com
The billing rates of Kasowitz Benson professionals are:
Title Rate per Hour
----- -------------
Partners $550 to $1,100
Special Counsel $525 to $800
Associates $250 to $675
Staff Attorneys $235 to $390
Paralegals $135 to $225
The firm will also be reimbursed for expenses incurred.
David S. Rosner, Esq., at Kasowitz, Benson, Torres & Friedman
LLP, in New York, discloses that his firm has represented,
currently represents, and may represent in matters totally
unrelated to the Debtors, a schedule of which is available for
free at:
http://misc/bankrupt.com/misc/MFGlobal_KasowitzClients.pdf
To the extent issues may arise that would cause the Debtors or
the Chapter 11 Trustee to be adverse to the entities or any other
client of Kasowitz Benson so that it would not be appropriate for
the firm to represent the Debtors or Chapter 11 Trustee with
respect to the matters, the firm will inform the Chapter 11
Trustee. Mr. Rosner assures the Court that Kasowitz Benson has
not represented, does not represent, and will not represent any
of such foregoing entities in matters directly related to the
Debtors or the Chapter 11 cases.
For those reasons, Kasowitz Benson is a "disinterested person" as
the term is defined in Section 101(14) of the Bankruptcy
Code, Mr. Rosner maintains.
About MF Global
New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/
-- is one of the world's leading brokers of commodities and
listed derivatives. MF Global provides access to more than 70
exchanges around the world. The firm is also one of 22 primary
dealers authorized to trade U.S. government securities with the
Federal Reserve Bank of New York. MF Global's roots go back
nearly 230 years to a sugar brokerage on the banks of the Thames
River in London.
MF Global Holdings Ltd. and MF Global Finance USA Inc. filed
voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-
15059 and 11-5058) on Oct. 31, 2011, after a planned sale to
Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF
Global had $41,046,594,000 in total assets and $39,683,915,000 in
total liabilities. It is easily the largest bankruptcy filing so
far this year.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of
MF Global Finance USA Inc.
MFGH's subsidiaries MF Global Capital LLC, MF Global FX
Clear LLC and MF Global Market Services, LLC filed for bankruptcy
protection on December 19, 2011.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at
Hughes Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing. Seven directors of MF Global Holdings resigned from their
posts on Nov. 28, 2011.
U.S. regulators are investigating about $633 million missing from
MF Global customer accounts, a person briefed on the matter said
Nov. 3, according to Bloomberg News.
The New York Stock Exchange has removed MFGI securities from
listing.
Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by MF Global Holdings and other insolvency and
bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
MF GLOBAL: Ch. 11 Trustee Wins OK for FTI as Financial Advisor
--------------------------------------------------------------
Louis J. Freeh, the Chapter 11 Trustee for the bankruptcy cases of
MF Global Holdings Ltd. and its affiliates, sought and obtained
approval of is amended request to employ FTI Consulting, Inc., as
his financial advisor, nunc pro tunc to November 1, 2011.
On November 1, 2011, FTI was engaged and began providing
restructuring consulting services to the Debtors. The work
undertaken by FTI since November 1, 2011 has greatly assisted the
Chapter 11 Trustee in gaining an understanding of the facts and
circumstances of the cases and has allowed for a smooth
transition from the Debtors to the Chapter 11 Trustee.
Specifically, FTI will provide these services to the Chapter 11
Trustee:
(a) Assist with the preparation of financial related
disclosures required by the Court, including the Schedules
of Assets and Liabilities, the Statement of Financial
Affairs and Monthly Operating Reports;
(b) Assist with information and analyses required pursuant to
the Debtors' pursuit of debtor-in-possession financing
including, but not limited to, preparation for hearings
regarding the use of cash collateral and DIP financing;
(c) Assist with the identification and implementation of
short-term cash management procedures;
(d) Advise and assist with the development and implementation
of key employee retention and other critical employee
benefit programs;
(e) Assist with and advise the Debtors and the Chapter 11
Trustee with respect to the identification of core
business assets and the disposition of assets or
liquidation of unprofitable operations;
(f) Assist with the identification of executory contracts and
leases and performance of cost/benefit evaluations with
respect to the affirmation or rejection of each;
(g) Assist with the valuation of the present level of
operations and identification of areas of potential cost
savings, including overhead and operating expense
reductions and efficiency improvements;
(h) Assist in the preparation of financial information for
distribution to creditors and others;
(i) Attend meetings and assist in discussions with potential
investors, banks and other secured lenders, any official
committee appointed in these Chapter 11 cases, the U.S.
Trustee for Region 2, other parties-in-interest and
professionals hired by the same, as sought;
(j) Analyze creditor claims by type, entity and individual
claim, including assisting with development of databases,
as necessary, to track those claims;
(k) Assist with monitoring the various other insolvency
proceeding of the Debtors' affiliates (including the SIPA
proceeding, UK insolvency proceedings and various
administration proceeding in Asia and other parts of the
world);
(l) Assist in the preparation of information and analysis
necessary for the confirmation of a plan in these Chapter
11 proceedings;
(m) Assist in the evaluation and analysis of avoidance
actions, including fraudulent conveyances and preferential
transfers;
(n) Litigation advisory services with respect to accounting
and tax matters, along with expert witness testimony on
case-related issues, if those services are necessary;
(o) Render other general business consulting or other
assistance as the Debtors' management or counsel may deem
necessary that are consistent with the role of a financial
advisor and not duplicative of services provided by other
professionals in these Chapter 11 proceedings; and
(p) Assist with forensic accounting, forensic reviews and
investigations, information technology issues, data
retention, data preservation, data collection, and data
analysis.
FTI will seek payment for compensation on a monthly fixed fee of
$1,500,000 for the months of November and December, 2011,
$1,000,000 for the months of January and February, 2012,
$750,000,000 for the months of March and April, 2012, and
$500,000 thereafter, plus reimbursement of actual and necessary
expenses incurred by the firm.
Michael Eisenband, a senior managing director with FTI
Consulting, Inc., relates that during the 90-day period before
the Petition Date, his firm received no payments from the Debtors
for professional services performed and expenses incurred on
behalf of the Debtors. According to FTI's books and records, FTI
has unpaid receivables due from the Debtors of $167,028 in
Aggregate, he says. FTI has agreed to write off the amount and
not seek collection.
Mr. Eisenband also filed with the Court an updated schedule of
entities, which FTI continues to represent, a schedule of which
is available for free at:
http://misc/bankrupt.com/misc/MFGlobal_AmFTIClients.pdf
Mr. Eisenband maintains that FTI remains a "disinterested person"
as the term is defined in Section 101(14) of the Bankruptcy Code.
As a result of conversations with the U.S. Trustee for Region 2,
Mr. Eisenband submitted a supplemental declaration to disclose
that FTI and its affiliates do not own any debt or equity
securities issued by MF Global or its affiliates. Likewise, no
employee of FTI and its affiliates who will render services in
connection with the proposed retention as financial advisor owns
any debt or equity securities issued by MF Global or its
affiliates, he notes. He adds that no professional employed by
FTI or its U.S. or U.K. affiliates, owns any debt or equity
securities issued by MF Global or its affiliates. In the event
it is determined subsequently that any professional employed by
FTI or its U.S. or U.K. affiliates is an owner of debt or equity
securities issued by MF Global or its affiliates, that person
will be directed by the general counsel and chief risk offer to
divest those securities on an expedited basis, he assures the
Court. In light of those disclosures, he believes that FTI does
not represent an interest an interest adverse to the Debtors or
the Chapter 11 Trustee.
MF GLOBAL: Committee Wins OK for Capstone as Financial Advisor
--------------------------------------------------------------
The Official Committee of Unsecured Creditors in MF Global
Holdings Ltd.'s cases received permission from the Bankruptcy
Court to retain Capstone Advisory Group, LLC, together with its
wholly-owned subsidiary Capstone Valuation Services, Inc., as its
financial advisor, nunc pro tunc to Nov. 9, 2011.
As the Creditors Committee's financial advisor, Capstone will:
(a) advise and assist the Creditors' Committee in its analysis
and monitoring of the Debtors' historical and current
financial affairs, including without limitation, schedules
of assets and liabilities, statement of financial affairs,
periodic operating reports, analyses of: cash receipts and
disbursements, cash flow forecasts, intercompany
transactions, trust accounting, various asset and
liability accounts, analyses of ongoing wind down
activities, any unusual or significant transactions
between the Debtors and any other entities, and proposed
restructuring transactions;
(b) advise and assist the Creditors' Committee with respect to
any proposed financing or use of cash collateral that
the Debtors may seek;
(c) develop a periodic monitoring report to enable the
Creditors' Committee to effectively evaluate the Debtors'
performance and cost reductions on an ongoing basis;
(d) advise and assist the Creditors' Committee with respect to
analyzing and monitoring the impact on the Debtors'
affairs from the wind down of the entities under the
control of the SIPA Trustee or other regulators;
(e) advise and assist the Creditors' Committee and counsel in
reviewing and evaluating any court motions, applications
or other forms of relief filed or to be filed by the
Debtors, or any other parties-in-interest;
(f) monitor the Debtors' claims management process, analyze
claims, analyze guarantees, and summarize claims by
entity;
(g) advise and assist the Creditors' Committee in identifying
or reviewing any preference payments, fraudulent
conveyances and other potential causes of action that the
Debtors' estates may hold against insiders or third
parties;
(h) analyze the Debtors' assets and analyze possible recovery
to the various creditor constituencies under various
scenarios;
(i) advise and assist the Creditors' Committee with respect to
the Debtors' identification of core business assets or
liquidation of unprofitable operations, in evaluating and
analyzing restructuring proposals of the Debtors and
assist counsel and the Creditors' Committee in developing
negotiation strategies to support the Creditors'
Committee's position;
(j) advise and assist the Creditors' Committee in its
assessment of the Debtors' employee needs and related
costs;
(k) advise and assist the Creditors' Committee in its review
of intercompany transactions between the Debtors and its
subsidiary companies, including understanding its
historical business and accounting practices, whether or
not the transactions were cash or non-cash, financial
terms of those amounts;
(l) advise and assist the Creditors' Committee in the
evaluation of the operations and any insolvency
proceedings of foreign entities related to the ultimate
parent, MF Global Holdings Ltd.; and
(m) render expert testimony as requested from time to time by
the Creditors' Committee and counsel; and
(n) attend Creditors' Committee meetings and court hearings as
may be required in the role of advisors to the Creditors'
Committee.
Capstone will be paid according to its professionals' customary
hourly rates, which are revised annually effective January 1st:
Rate per Hour
Title 2011 2012
----- ---- ----
Executive Director $600 to $760 $610 to $795
Managing Director $475 to $590 $475 to $600
Directors $360 to $475 $360 to $475
Consultants $160 to $350 $170 to $350
Support staff $120 to $150 $120 to $160
Capstone will also be reimbursed for reasonable and actual out-
of-pocket expenses.
Christopher J. Kearns, executive director of Capstone Advisory
Group, LLC, discloses that has relationships with certain
parties-in-interest in matters unrelated to the Debtors or their
Chapter 11 cases. Capstone has advised the Creditors' Committee
and the U.S. Trustee for Region 2 that, it will not provide
expert witness services adverse to organizations or persons that
are parties-in-interest in which Capstone has relationships and
associations with. However, Capstone is willing to perform all
investigations related to potential causes of actions that the
Creditors' Committee may seek to pursue, he says.
A schedule of the parties-in-interest in which Capstone has
relationships is available for free at:
http://misc/bankrupt.com/misc/MFGlobal_CapstoneClients.pdf
Mr. Kearns further notes that CVS may be asked to value and
manage the liquidation of assets of investment funds. Those
investment funds could take positions in debt or equity of the
Debtors, without Capstone's or CVS's knowledge or consent, he
notes. He clarifies that neither Capstone nor CVS has any
pecuniary interest in those investment funds, or will profit from
the value realized from the sale of their assets. To the extent
any employee of CVS is utilized for valuation expertise on behalf
of the Creditors' Committee that employee will not perform any
valuation work on any debt or equity securities of the Debtors
for any investment fund for the duration of this engagement, he
assures the Court. If CVS is providing valuation work on any debt
or equity securities of the Debtors for any investment fund for
the duration of this engagement, then the CVS employee
undertaking such work will be restricted and have no access to
the confidential information of the Debtors, he adds.
Mr. Kearns insists that Capstone, together with CVS, is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code.
About MF Global
New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/
-- is one of the world's leading brokers of commodities and
listed derivatives. MF Global provides access to more than 70
exchanges around the world. The firm is also one of 22 primary
dealers authorized to trade U.S. government securities with the
Federal Reserve Bank of New York. MF Global's roots go back
nearly 230 years to a sugar brokerage on the banks of the Thames
River in London.
MF Global Holdings Ltd. and MF Global Finance USA Inc. filed
voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-
15059 and 11-5058) on Oct. 31, 2011, after a planned sale to
Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF
Global had $41,046,594,000 in total assets and $39,683,915,000 in
total liabilities. It is easily the largest bankruptcy filing so
far this year.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of
MF Global Finance USA Inc.
MFGH's subsidiaries MF Global Capital LLC, MF Global FX
Clear LLC and MF Global Market Services, LLC filed for bankruptcy
protection on December 19, 2011.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at
Hughes Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing. Seven directors of MF Global Holdings resigned from their
posts on Nov. 28, 2011.
U.S. regulators are investigating about $633 million missing from
MF Global customer accounts, a person briefed on the matter said
Nov. 3, according to Bloomberg News.
The New York Stock Exchange has removed MFGI securities from
listing.
Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by MF Global Holdings and other insolvency and
bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
MF GLOBAL: SIPA Trustee Wins OK for Slaughter as English Counsel
----------------------------------------------------------------
James W. Giddens, the trustee for the liquidation of the business
of MF Global, Inc. under the Securities and Investor Protection
Act, sought and obtained the U.S. Bankruptcy Court for the
Southern District of New York's permission to employ Slaughter and
May as his English counsel, nunc pro tunc to December 21, 2011.
Pursuant to an order of the English High Court of Justice, issued
on October 31, 2011 prior to commencement of the SIPA
liquidation, Michael Robert Pink, Richard Dixon Fleming and
Richard Heis were appointed Joint Special Administrators of MF
Global UK Limited.
The Joint Special Administrators of MF Global UK Limited dispute
the classification under English law of approximately $600 to
$700 million in MFGI's commodities claimant funds that were
purportedly held by MFG UK as segregated assets for US customers
of MFGI dealing in foreign futures. The SIPA Trustee believes
that those funds were segregated for US customers of MFGI who
traded on foreign exchanges and, thus, should be returned to MFGI
for distribution to those MFGI customers. Absent a return, the
SIPA Trustee's ability to satisfy -- even in part -- the claims
of MFGI's US customers who traded on foreign exchanges will be
severely compromised. It is anticipated that there may be other
areas in which disputes could arise between the SIPA Trustee and
the Joint Special Administrators regarding MFGI's claims, on its
own account and on behalf of its US customers, against the estate
of MFG UK.
As the SIPA Trustee's English counsel, Slaughter and May will,
among other things:
* represent the SIPA Trustee at creditor meetings of MFG UK,
meetings with the Joint Special Administrators and/or their
lawyers, and English Court hearings in relation to the
Special Administration;
* review and analyze motions, applications, orders, statements
of operations and schedules filed with the English Court and
advise the SIPA Trustee as to their propriety, and to the
extent deemed appropriate by the SIPA Trustee, support, join
or object thereto; and
* assist the SIPA Trustee by preparing English Court documents
and pleadings including, without limitation, applications,
motions, affidavits, witness statements, records,
memoranda, complaints, adversary complaints, objections or
comments as may be necessary in furtherance of the SIPA
Trustee's interests in the Special Administration.
Slaughter and May will be paid according to its professionals'
customary hourly rates:
Rate per Hour
Title in GBP in US$
----- ------ ------
Partners GBP550 $856
Senior Associates GBP450 $701
Junior Associates GBP325 $506
Trainee Solicitors and
paralegals GBP125 $194
George E.S. Seligman, Esq., a partner at Slaughter and May, in
England -- george.seligman@slaughterandmay.com -- disclosed that
in February 2008, Slaughter and May represented MFG UK with
respect to certain tax and intellectual property matters.
Specifically, Slaughter and May provided advice to MFG UK on
these matters:
(A) advice, from December 2009 to February to July 2010, on the
bank payroll tax which was announced by the UK government
wherein Slaughter and May billed (and was paid) GBP75,000
plus VAT for this matter;
(B) advice, from August 2010 to August 2011, on general tax
matters wherein Slaughter and May has an outstanding bill for
GBP5,500 plus VAT for this work that Slaughter and May will
write-off; and
(c) advice, from February 2008 to May 2009, on the preparation of
a software development agreement. Slaughter and May billed
and was paid GBP24,930 plus VAT for this matter.
Slaughter and May has agreed not to seek to collect from MFG UK,
subject to approval by the Bankruptcy Court of its retention as
English counsel to the SIPA Trustee, any amount owing to
Slaughter and May by MFG UK for accrued and unpaid fees for
services rendered or reimbursement for expenses incurred, Mr.
Seligman says. Moreover, Slaughter and May will not perform any
future services for MFG UK, the Joint Special Administrators of
MFG UK acting in that capacity or any other MFGI affiliate, he
adds.
Slaughter and May is also advising various clients on issues
arising out of the Special Administration, Mr. Seligman relates.
Several of these and future engagements, include advising clients
on potential claims against MFG UK, the actual preparation and
submission of claims on their behalf against the MFG UK estate or
the purchase of assets from the MFG UK estate. Slaughter and May
also performs services for professional firms that may be
employed by MFG UK, and other parties of interest in the SIPA
proceeding, he states. The attorneys that have performed those
services for any other professional firms will each be subject to
an Information Barrier segregating him or her from work performed
for the SIPA Trustee, he assures the Court.
Despite those disclosures, Mr. Seligman insists that Slaughter
and May is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.
About MF Global
New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/
-- is one of the world's leading brokers of commodities and
listed derivatives. MF Global provides access to more than 70
exchanges around the world. The firm is also one of 22 primary
dealers authorized to trade U.S. government securities with the
Federal Reserve Bank of New York. MF Global's roots go back
nearly 230 years to a sugar brokerage on the banks of the Thames
River in London.
MF Global Holdings Ltd. and MF Global Finance USA Inc. filed
voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-
15059 and 11-5058) on Oct. 31, 2011, after a planned sale to
Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF
Global had $41,046,594,000 in total assets and $39,683,915,000 in
total liabilities. It is easily the largest bankruptcy filing so
far this year.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of
MF Global Finance USA Inc.
MFGH's subsidiaries MF Global Capital LLC, MF Global FX
Clear LLC and MF Global Market Services, LLC filed for bankruptcy
protection on December 19, 2011.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at
Hughes Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing. Seven directors of MF Global Holdings resigned from their
posts on Nov. 28, 2011.
U.S. regulators are investigating about $633 million missing from
MF Global customer accounts, a person briefed on the matter said
Nov. 3, according to Bloomberg News.
The New York Stock Exchange has removed MFGI securities from
listing.
Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by MF Global Holdings and other insolvency and
bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
MGM RESORTS: Extends Maturity of $1.8BB Credit Facility to 2015
---------------------------------------------------------------
MGM Resorts International entered into an Amendment No. 1 and
Restatement Agreement among the Company, MGM Grand Detroit, LLC,
as initial co-borrower and Bank of America, N.A., as
administrative agent with reference to the Sixth Amended and
Restated Loan Agreement, dated as of March 16, 2010. Pursuant to
the Amendment, on Feb. 24, 2012, the Company entered into a
Seventh Amended and Restated Loan Agreement among the Company,
Detroit, the Lenders named therein and the administrative Agent.
Pursuant to the Restated Loan Agreement, the Company's credit
facilities under the Existing Loan Agreement were re-tranched and
the Company prepaid approximately $408.9 million of the loans
previously outstanding under the Existing Loan Agreement. Giving
effect to the Required Prepayment, the Company's senior credit
facility under the Restated Loan Agreement consists of
approximately $1.3 billion of revolving credit commitments and
approximately $1.8 billion of term loans.
The Restated Loan Agreement, among other things:
* Extends the maturity date for approximately $1.8 billion of
the loans and lending commitments under the credit facility
though Feb. 23, 2015;
* Retains the original maturity date of Feb. 21, 2014, for the
approximately $1.3 billion owed to lenders not agreeing to
extend their commitments;
* Provides that loans held by extending lenders will be subject
to a pricing grid that decreases the LIBOR spread by as much
as 250 basis points based upon a collateral coverage ratio;
and
* Reduces the LIBOR floor on extended loans from 200 basis
points to 100 basis points.
In addition, the Restated Loan Agreement provides that the Company
will use its commercially reasonable efforts to deliver a mortgage
encumbering the Beau Rivage Hotel in Biloxi, Mississippi within 90
days from the effective date of the Restated Loan Agreement.
About MGM Resorts
MGM Resorts International (NYSE: MGM) --
http://www.mgmresorts.com/-- has significant holdings in gaming,
hospitality and entertainment, owns and operates 15 properties
located in Nevada, Mississippi and Michigan, and has 50%
investments in four other properties in Nevada, Illinois and
Macau.
The Company reported net income of $3.23 billion in 2011 and a net
loss of $1.43 billion in 2009.
The Company's balance sheet at Dec. 31, 2011, showed $27.76
billion in total assets, $17.88 billion in total liabilities and
$9.88 billion in total stockholders' equity.
Bankruptcy Warning
Any default under the senior credit facility or the indentures
governing the Company's other debt could adversely affect its
growth, its financial condition, its results of operations and its
ability to make payments on its debt, and could force the Company
to seek protection under the bankruptcy laws.
* * *
As reported by the TCR on Nov. 14, 2011, Standard & Poor's Ratings
Services raised its corporate credit rating on MGM Resorts
International to 'B-' from 'CCC+'. "The rating upgrade reflects
MGM's solid performance thus far in 2011, and our expectation that
MGM will continue benefitting from improving performance trends on
the Las Vegas Strip, particularly on the lodging side of the
business," said Standard & Poor's credit analyst Ben Bubeck. "MGM
maintains weak credit measures, including operating lease-adjusted
debt to wholly owned EBITDA of over 11x and EBITDA coverage of
interest of just 1.0x. Still, we believe recent strong performance
trends are reducing refinancing risk in the company's
intermediate- term debt maturities, and expect credit measures to
continue to gradually improve modestly in 2012."
In the Nov. 21, 2011, edition of the TCR, Moody's Investors
Service upgraded MGM Resorts International's Corporate Family and
Probability of Default ratings to B2, its senior secured rating to
Ba2, and its senior unsecured notes to B3. MGM has an SGL-3
Speculative Grade. The B2 rating reflects Moody's view that
continued earnings improvement at MGM's 51% owned Macau joint
venture increases the likelihood of a dividend distribution that
would help improve the company's liquidity profile. The B2
Corporate Family Rating also reflects Moody's view that positive
lodging trends in Las Vegas will continue through 2012 and will
help improve MGM's leverage and coverage metrics modestly.
MOUNTAIN PROVINCE: Spin-out of Kennady Diamonds Remains on Track
----------------------------------------------------------------
Mountain Province Diamonds Inc. announced that final analysis of
the Fugro airborne gravity gradiometry survey flown over the
Kennady North diamond project late last year has resulted in the
identification of 106 geophysical targets. Mountain Province is
also pleased to announce that the Company will be commencing a 560
line-kilometre total magnetic field (MAG) ground survey this week
over the geophysical targets identified by the AGG survey.
The MAG survey will be conducted at 20 metre line-spacing and the
results will enable the Company to prioritize the geophysical
targets for drilling as soon as practically possible. The MAG
survey is being managed by Aurora Geosciences Ltd., contractors to
Mountain Province, and is expected to be completed by mid-March
2012.
Commenting, Mountain Province President and CEO Patrick Evans
said: "We are very excited about the large number of geophysical
targets that have been identified at Kennady North. We expect the
results from the MAG survey to provide excellent data to guide our
planned drill program. Besides the excellent micro-diamond counts
and size frequency distribution from the known kimberlites at
Kennady North, a 0.40 carat diamond was recovered from a 65
kilogram sample taken from Faraday and the samples recovered from
Faraday also exhibit an unusually high percentage of desirable
yellow diamonds."
Mountain Province also announced that preparations for the planned
spin-out of the Kennady North project into a newly listed public
company remain on track for mid-April 2012. Shareholders will
receive further details of the proposed transaction and planned
special meeting in March.
Finally, Mountain Province expects to provide an update before the
end of the week on the Tuzo Deep drill program and AGG survey
conducted over the De Beers JV project at Kennady Lake.
Mountain Province Diamonds is a 49% participant with De Beers
Canada in the Gahcho Kue JV located at Kennady Lake in Canada's
Northwest Territories. The Gahcho Kue Project consists of a
cluster of four diamondiferous kimberlites, three of which have a
probable mineral reserve of 31.3 million tonnes grading 1.57
carats per tonne for total diamond content of 49 million carats.
Gahcho Kue is the world's largest and highest grade new diamond
development project. A December, 2010 feasibility study filed by
Mountain Province (available on SEDAR) indicates that the Gahcho
Ku‚ project has an IRR of 33.9%.
Mountain Province also controls 100% of the Kennady North Diamond
Project adjacent to the De Beers JV property. Kennady North hosts
three known diamondiferous kimberlites and a number of unexplained
kimberlite mineral indicators.
Mountain Province Diamonds is included in the S&P/TSX Global
Mining Index.
About Mountain Province
Headquartered in Toronto, Canada, Mountain Province Diamonds Inc.
(TSX: MPV, NYSE AMEX: MDM) -- http://www.mountainprovince.com/--
is a Canadian resource company in the process of permitting and
developing a diamond deposit (the "Gahcho Kue Project" located in
the Northwest Territories of Canada. The Company's primary asset
is its 49% interest in the Gahcho Kue Project.
The Company also reported a net loss of C$6.68 million for the
nine months ended Sept. 30, 2011, compared with a net loss of
C$7.39 million for the same period during the prior year.
The Company's balance sheet at Sept. 30, 2011, showed C$69.93
million in total assets, C$7.51 million in total liabilities and
C$62.42 million in total shareholders' equity.
* * *
In its Management's Discussion and Analysis of the Company's
interim consolidated financial statements for the three months
ended June 30, 2010, the Company said its ability to continue as a
going concern and to realize the carrying value of its assets and
discharge its liabilities is dependent on the discovery of
economically recoverable mineral reserves, the ability of the
Company to obtain necessary financing to fund its operations, and
the future production or proceeds from developed properties.
However, the Company adds that there is no certainty that the
Company will be able to obtain financing to fund its operations.
As a result, the Company says, there is substantial doubt as to
its ability to continue as a going concern.
MSR RESORT: Trump Buys Miami Doral Resort for $150 Million
----------------------------------------------------------
Real estate mogul Donald Trump's Trump Organization will purchase
the Doral Hotel & Country Club in Miami for $150 million from MSR
Resort Golf Course LLC. No other bidders stepped up to challenge
Trump's offer by the court-approved bid deadline.
After a $150 million stalking horse bid by Trump Endeavor 12 LLC
was approved in December, the Trump Organization formally
announced its upcoming acquisition of the resort, which includes
700 hotel rooms across 10 lodges, massive ballrooms and meeting
spaces, and four golf courses spread over nearly 800 acres,
according to Law360.
About MSR Resort
MSR Hotels & Resorts, formerly known as CNL Hotels & Resorts Inc.,
owns a portfolio of eight luxury hotels with over 5,500 guest
rooms, including the Arizona Biltmore Resort & Spa in Phoenix, the
Ritz-Carlton in Orlando, Fla., and Hawaii's Grand Wailea Resort
Hotel & Spa in Maui.
On Jan. 28, 2011, CNL-AB LLC acquired the equity interests in the
portfolio through a foreclosure proceeding. CNL-AB LLC is a joint
venture consisting of affiliates of Paulson & Co. Inc., a joint
venture affiliated with Winthrop Realty Trust, and affiliates of
Capital Trust, Inc.
Morgan Stanley's CNL Hotels & Resorts Inc. owned the resorts
before the Jan. 28 foreclosure.
Following the acquisition, five of the resorts with mortgage debt
scheduled to mature on Feb. 1, 2011, were sent to Chapter 11
bankruptcy by the Paulson and Winthrop joint venture affiliates.
MSR Resort Golf Course LLC and its affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan
on Feb. 1, 2011. The resorts subject to the filings are Grand
Wailea Resort and Spa, Arizona Biltmore Resort and Spa, La Quinta
Resort and Club and PGA West, Doral Golf Resort and Spa, and
Claremont Resort and Spa.
James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O.
Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis,
LLP, serve as the Debtors' bankruptcy counsel. Houlihan Lokey
Capital, Inc., is the Debtors' financial advisor. Kurtzman Carson
Consultants LLC is the Debtors' claims agent.
The five resorts had $2.2 billion in assets and $1.9 billion in
debt as of Nov. 30, 2010, according to court filings. In its
schedules, debtor MSR Resort disclosed $59,399,666 in total assets
and $1,013,213,968 in total liabilities.
The resorts have agreement with lenders allowing the companies to
remain in Chapter 11 at least until September 2012. Donald Trump
has a contract to buy the Doral Golf Resort and Spa in Miami for
$170 million. There will be an auction to learn if there is a
better bid. The resorts have said that Trump's offer price implies
a value for all the properties "significantly" exceeding the $1.5
billion in debt.
The Official Committee of Unsecured Creditors is represented by
Martin G. Bunin, Esq., and Craig E. Freeman, Esq., at Alston &
Bird LLP, in New York.
NIP COMPANY: Files for Chapter 11 in Austin
-------------------------------------------
The NIP Company filed a bare-bones Chapter 11 petition in its
hometown in Austin, Texas (Bankr. W.D. Tex. Case No. 12-10393).
Its affiliate, San Diego, California-based Retirement Capital
Group, Inc., simultaneously filed for Chapter 11 protection
(Bankr. W.D. Tex. Case No. 12-10396).
NIP and Retirement Capital each estimated assets of up to
$50 million and debts of up to $10 million.
According to the resolution authorizing the bankruptcy filing,
Chapter 11 protection from creditors has been sought as "the
company is unable to pay its debts as they become due, will remain
unable to pay its debts for the foreseeable future, and will be
unable to continue as a going concern under its current
indebtedness."
OILSANDS QUEST: Annual Meeting Scheduled for April 24
-----------------------------------------------------
At its meeting on Feb. 19, 2011, the Board of Directors of
Oilsands Quest Inc. approved the date for its fiscal 2011 Annual
Meeting of Stockholders. The Annual Meeting will be held on
April 24, 2012, at 3:00 P.M. MST at the Telus Convention Center,
Meeting Room 103, 120 9th Avenue S.E. Calgary, Alberta, T2G 0P3,
subject to adjournment as provided in the By-laws of the Company,
or at such other location as may be specified in the Proxy
Statement for the Annual Meeting.
Due to this postponement, the due dates for the provision of any
qualified stockholder proposal or qualified stockholder
nominations under the rules of the Securities and Exchange
Commission and the Amended and Restated Bylaws of the Company
described in the Company's 2011 Proxy Statement on Schedule 14A as
filed with the Securities and Exchange Commission on Aug. 27,
2010, are no longer applicable. Those nominations and proposals,
including any notice on Schedule 14N, are now due to the Company
on Feb. 28, 2012, as the Company intends to distribute its proxy
materials on March 15, 2012.
About Oilsands Quest
Oilsands Quest Inc. -- http://www.oilsandsquest.com/-- is
exploring and developing oil sands permits and licenses, located
in Saskatchewan and Alberta, and developing Saskatchewan's first
commercial oil sands discovery.
The Company reported a net loss of US$10.3 million for the six
months ended Oct. 31, 2011, compared with a net loss of
US$25.1 million for the six months ended Oct. 31, 2010.
The Company's balance sheet at Oct. 31, 2011, showed
US$156.6 million in total assets, US$33.3 million in total
liabilities, and stockholders' equity of US$123.3 million. As at
Oct. 31, 2011, the Company had a deficit accumulated during the
development phase of US$721.7 million.
* * *
On Nov. 29, 2011, the Company and certain of its subsidiaries
voluntarily commenced proceedings under the CCAA obtaining an
Initial Order from the Court of Queen's Bench of Alberta (the
"Court"), in In re Oilsands Quest, Inc., et al., Case No. 1101-
16110.
The CCAA Proceedings were initiated by: Oilsands Quest, Oilsands
Quest Sask Inc., Township Petroleum Corporation, Stripper Energy
Services, Inc., 1291329 Alberta, Ltd., and Oilsands Quest
Technology, Inc. (collectively, the "Oilsands Entities").
Under the Initial Order, Ernst & Young, Inc., was appointed by the
Court to monitor the business and affairs of the Oilsands Entities
and creditors are stayed for a period of 30 days while the
Oilsands Entities explore financing and restructuring alternatives
and develop a comprehensive restructuring plan. The Plan must be
approved by any affected shareholders and the Court in order to be
implemented. Neither of Oilsands' other subsidiaries, 1259882
Alberta, Ltd., and Western Petrochemical Corp., have filed for
creditor protection.
Oilsands Quest requested and obtained an extension of the
order providing creditor protection under the Companies' Creditors
Arrangement Act (Canada), which was to expire Feb. 17, 2012.
Creditor protection under the CCAA will now expire May 18, 2012,
unless further extended as required and approved by the Court.
OLD CORKSCREW: Fine-Tunes Chapter 11 Plan Documents
---------------------------------------------------
Old Corkscrew Plantation LLC, et al., submitted to the U.S.
Bankruptcy Court for the Middle District of Florida an Amended
Joint Consolidated Disclosure Statement for Amended Plan of
Reorganization dated Feb. 7, 2012.
According to the Amended Disclosure Statement, the Plan provides
for the reorganization of the OCP Debtors, the emergence of the
OCP Debtors from the Bankruptcy Cases as the Reorganized Debtor
and the treatment of Allowed Claims against the OCP Debtors and
Allowed Equity Interests in the OCP Debtors. As of the Effective
Date, each of the OCP Debtors will be substantively consolidated
with and merged into the Reorganized Debtor pursuant to the terms
of the Plan.
The primary source of the funds necessary to implement the Plan
initially will be the funding under the DIP Loan and the Debtors'
cash from operations. At the present time, the Debtors believe
that the Reorganized Debtor will have sufficient funds as of the
Effective Date through funding of the DIP Loan and the Debtors'
cash from operations to pay in full the expected payments required
under the Plan, including to the Holders of Allowed Administrative
Claims (including Allowed Administrative Claims of Professionals),
Allowed Priority Claims, and DIP Lender Allowed Claims.
Under the Plan, each holder of an Allowed Unsecured Claim in Class
4 will receive cash from the Reorganized Debtor in an amount equal
to 100% of the Allowed Unsecured Claim, plus Postpetition
Interest.
A full-text copy of the Amended Disclosure Statement is available
for free at http://bankrupt.com/misc/OLD_CORKSCREW_ds_amended.pdf
About Old Corkscrew Plantation
Fort Myers, Florida-based Old Corkscrew Plantation LLC, whose
oranges are made into Minute Maid and Tropicana juice, filed
for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case No. 11-14559) on
July 29, 2011, disclosing $25,264,047 in assets and $60,751,633 in
debts. Old Corkscrew sought Chapter 11 protection along with its
affiliates. Donald G. Scott, Esq., -- dscott@mcdowellrice.com --
at McDowell, Rice, Smith & Buchanan, in Kansas City, Missouri,
serves as the Debtors' bankruptcy co-counsel. Berger Singerman,
P.A., serves as their bankruptcy counsel. Arcadia Citrus
Enterprises, Inc., serves as manager of their citrus growing
properties. Kapila & Company serves as chief restructuring
officer. The Debtors' orange groves are valued at $24 million.
Scott Westlake, the Debtors' managing member, signed the petition.
Mr. Westlake is also listed as the Debtors' largest unsecured
creditor, with $4,827,906 owed. Another $338,511 debt is owed to
Scott and Vicki Westlake.
No trustee or examiner has been appointed in this Chapter 11 case.
An official committee of unsecured creditors was appointed and is
represented by counsel.
ONCOR ELECTRIC: Moody's Affirms 'Caa2'; Outlook Negative
--------------------------------------------------------
Moody's Investors Service changed the rating outlook for Oncor
Electric Delivery Company LLC (Oncor) to negative from stable and
affirmed the company's senior secured rating at Baa1. The change
in outlook is primarily driven by Moody's evolving view of the
contagion risk that Oncor is exposed to by its financially
distressed affiliate, Texas Competitive Electric Holdings Company
LLC (TCEH) and its ultimate parent, Energy Future Holdings Corp
(EFH).
In a separate rating action, Moody's affirmed EFH's Caa2 Corporate
Family Rating (CFR), Caa3 Probability of Default Rating (PDR) and
SGL-4 Speculative Grade Liquidity Rating. Moody's also affirmed
the Caa3 (LGD4, 62%) rating for EFIH's 11.75% senior secured
second lien notes due 2022. On February 24, 2012, EFH increased
the principal amount of this security by $350 million.
Oncor's negative outlook reflects Moody's view that EFH will rely
more heavily on Oncor to help fund EFH's sizeable debt service
needs and the indirect leveraging of Oncor's implied equity value.
EFH has issued approximately $5.0 billion of debt through one of
its intermediate, subsidiary holding companies, Energy Future
Intermediate Holdings Company LLC (EFIH), wherein EFIH has pledged
its interests of Oncor Electric Delivery Holdings Company (Oncor
Holdings - unrated), as security collateral.
"EFH will continue to pledge its ownership interests in Oncor
Holdings as security collateral for new EFIH debt" said Jim
Hempstead, Senior Vice President, "and we are now viewing this
debt, which sits outside of the ring fence structure, as a form of
permanent leverage for Oncor. As a result, there is an increasing
probability Oncor's ratings could be downgraded over the next 12
to 18 months."
RATINGS RATIONALE
Oncor's Baa1 senior secured rating reflects a low risk, rate
regulated transmission and distribution utility business, which
tends to produce relatively stable financial metrics. Oncor
benefits materially from the regulatory oversight authority
associated with the Public Utility Commission of Texas (PUCT),
which in Moody's opinion, provides a supportive environment for
the timely recovery of prudently incurred costs and investments.
The rating also relies heavily on Moody's assessment of the ring-
fence type provisions designed to create credit separateness
between Oncor and its more risky parent and affiliates.
The most important structural benefits are those associated with
the special corporate governance rights provided to the
independent board of directors at Oncor. These rights include
approval authority over dividend policy, and Oncor's board can
prevent the payment of dividends; the approval of material
transactions and new transactions with affiliates (such as TCEH);
the transfer of assets to non-ring fenced entities and the
amendment of certain provisions to Oncor's LLC operating
agreement. In addition, Oncor's independent directors must
unanimously approve certain material actions, including: mergers
and acquisitions, if Oncor is not the surviving entity, or if a
transaction involves an EFH entity; the transfer of all or
substantially all of Oncor's assets; the institution of insolvency
proceedings and any liquidation of Oncor without providing for
payment of all Oncor creditors.
"We believe elements of the ring fence are beginning to show signs
of pressure," Hempstead added, "as Oncor is placed into a more
meaningful role in assisting both EFH and TCEH with their interest
and debt service obligations." Aside from the current debt
servicing requirements of EFIH's indebtedness, the continued
leveraging of Oncor's implied equity value through the issuance of
secured EFIH debt could, in Moody's opinion, introduce regulatory
risks over change of control oversight authority and a material
increase of upstream dividends which calls into question the
independence of the independent board.
"To that end," added Hempstead, "securing the equity value at
Oncor with incremental debt at EFIH provides no incremental
benefit to Oncor and only benefits EFH and TCEH".
Oncor's ring fence provisions are fortified by Oncor Holdings, a
Delaware limited liability corporation which is included within
the ring fence structure. In Moody's opinion, Oncor Holdings'
operating LLC agreement represents a key component to the ring
fence structure and is viewed as the principal governing document
from a credit perspective. Oncor Holdings owns approximately 80%
of Oncor. Oncor Holdings is 100% owned by EFIH, which in turn, is
100% owned by EFH. EFH, and its other primary operating
subsidiary, TCEH, are viewed as financially distressed companies
with untenable capital structures.
Importantly, Moody's Baa1 senior secured rating factors in the
collateral package afforded to first lien creditors, which Moody's
views as being quite strong. Typically, Moody's ratings for senior
secured debt issued by regulated electric utility companies tend
to be two notches higher than the underlying rating or senior
unsecured rating assigned to the issuer. In Oncor's case, the
company's rated capital structure only includes senior secured
debt and the company does not have an Issuer Rating, which is a
opinion of its ability to honor long-term senior unsecured
financial obligations and contracts. As such, if Oncor did have a
rating on an unsecured obligation or an Issuer Rating, it would
likely be two notches below the company's Baa1 senior secured debt
rating or the equivalent of a low- Baa rating.
Oncor's ratings could be downgraded if sizeable upstream dividends
occur without addressing the sizeable balance of its short-term
debt outstanding and before the elevated capital expenditure
program subsides; if EFH/EFIH issues additional debt secured by
Oncor Holdings' 80% ownership interest in Oncor, especially if
such debt includes affiliate debt associated with TCEH; or if
Oncor's cash flow to debt financial metrics, adjusted for the debt
secured by Oncor Holdings, falls below 10%.
Moody's also believes that the possibility of Oncor's senior
secured rating falling below the investment grade rating category
cannot be ruled out. Both Oncor and EFH continue to disclose the
possibility that, under certain conditions, the ring fence type
provisions might not work as planned. While the rating for Oncor
continues to acknowledge the benefits of the ring fence, Moody's
believes pressure on the ring fence is rising as EFH continues to
indirectly leverage its equity ownership in Oncor, and will
incrementally rise further as EFH relies more heavily on Oncor for
upstream dividends.
EFH's Caa2 CFR and Caa3 PDR reflect a financially distressed
company with limited flexibility. EFH's capital structure is
complex and, in Moody's opinion, untenable which calls into
question the sustainability of the business model and expected
duration of the current liquidity reserves.
Prospectively, EFH's ratings are unlikely to be upgraded over the
near to intermediate term horizon, largely due to Moody's
expectations regarding cash flow and the complexity of the capital
structure. Should natural gas commodity prices and market heat
rates improve materially, and for a sustained period of time,
there could be upward pressure on EFH's ratings. Over the near-
term horizon, ratings are more likely to fall, and individual
classes of securities have a reasonably high probability of
experiencing a limited default, as Moody's defines it, based on
Moody's limited default/distressed exchange policies.
The ratings for EFH, its subsidiaries and individual debt
instruments are derived from the Caa2 CFR, with the exception of
Oncor due to its ring fence type provisions.
The ratings for EFH, TCEH, EFCH and EFIH's individual securities
were determined using Moody's Loss Given Default (LGD)
methodology. Based on EFH's Caa2 CFR and Caa3 PDR, and based
strictly on the priority of claims within those entities, the LGD
model would suggest a rating of Ca for EFH's and EFIH's senior
secured debt securities. EFIH's Caa3 first and second lien ratings
reflect the fact that the holders of these securities also benefit
from their security interests of Oncor Holdings equity in Oncor.
The principal methodology used for EFH was Unregulated Utilities
and Power Companies published in August 2009. The principal
methodology used for Oncor was Regulated Electric and Gas
Utilities published in August 2009.
PACIFIC MONARCH: Raymond Gaskill OK'd as Special Timeshare Counsel
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
authorized Pacific Monarch Resorts, Inc., et al., to employ
Raymond J. Gaskill, Esq. as special timeshare counsel.
As reported in the Troubled Company Reporter on Jan. 25, 2012,
Mr. Gaskill, Esq., is expected to render services regarding state
registration and regulatory matters, transactional matters
relating to the Monarch Grand Vacations Trust and trust related
agreement and consumer documentation.
Mr. Gaskill has represented the Debtors on a variety of matters as
outside timeshare regulatory and transactional counsel since 1995.
During the one year period prior to the Petition Date, Mr. Gaskill
received $44,214 from the Debtors for prepetition services.
Mr. Gaskill's hourly rate is $250.
To the best of the Debtors' knowledge, Mr. Gaskill does not hold
or represent any interest adverse to the Debtors or the Debtors'
estates with respect to the matters for which he is to be
employed.
About Pacific Monarch
Pacific Monarch Resorts, Inc., and its affiliated debtors operate
a "timeshare business" business. The 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, in Los Angeles,
serve as counsel to the Debtors. The petition was signed by Mark
D. Post, chief executive officer and director.
Houlihan Lokey Capital, Inc., serves as investment baker to the
Debtors. Raymond J. Gaskill, Esq., represents the Debtors as
special timeshare counsel. Greenberg, Whitcombe & Takeuchi, LLP,
serves as the Debtors' special counsel for employment and labor
matters. Lesley, Thomas, Schwarz & Postma, Inc., serves as the
Debtors' tax and vacation ownership points accountants. White &
Case LLP is the Debtors' special tax counsel.
Attorneys at Brinkman Portillo Ronk, PC, serve as counsel to the
Official Committee of Unsecured Creditors.
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.
PITTSBURGH CORNING: Corning Prices $750-Mil. of Unsecured Notes
---------------------------------------------------------------
Corning Incorporated has priced $250 million aggregate principal
amount of senior unsecured notes at a coupon of 4.70%. The notes
will mature on March 15, 2037. Additionally, the company has
priced $500 million aggregate principal amount of senior unsecured
notes at a coupon of 4.75%, which will mature on March 15, 2042.
Subject to customary closing conditions, the transactions are
expected to close on Feb. 21, 2012. Net proceeds of the offering
will be used for general corporate purposes.
J.P. Morgan Securities Inc. and Wells Fargo Securities, LLC,
served as joint book-running managers and underwriters for the
offering. The offering of the notes is being made only by means
of a prospectus and a related prospectus supplement, copies of
which may be obtained by contacting: J.P. Morgan Securities Inc.,
270 Park Avenue, 8th Floor, New York, NY 10017, Attn: Investment
Grade Syndicate Desk, (212) 834-4533 or Wells Fargo Securities,
LLC, 1525 West W.T. Harris Blvd., NC0675, Charlotte, North
Carolina 28262, Attn: Capital Markets Client Support, (800) 326-
5897 or cmclientsupport@wellsfargo.com. An electronic copy of the
prospectus supplement and the accompanying prospectus will also be
available on the website of the Securities and Exchange Commission
at http://www.sec.gov.
The offering is being made pursuant to an effective automatic
shelf registration statement filed with the Securities and
Exchange Commission on Dec. 1, 2011.
Pittsburgh Corning Corp., is a joint venture between Corning Inc.
and PPG Industries Inc.
About Pittsburgh Corning
Pittsburgh Corning Corporation filed for Chapter 11 bankruptcy
protection (Bankr. W.D. Pa. Case No. 00-22876) on April 16, 2000,
to address numerous claims alleging personal injury from exposure
to asbestos. At the time of the bankruptcy filing, there were
about 11,800 claims pending against the Company in state court
lawsuits alleging various theories of liability based on exposure
to Pittsburgh Corning's asbestos products and typically requesting
monetary damages in excess of $1 million per claim.
The Hon. Judith K. Fitzgerald presides over the case. Reed Smith
LLP serves as counsel and Deloitte & Touche LLP as accountants to
the Debtor.
The United States Trustee appointed a Committee of Unsecured Trade
Creditors on April 28, 2000. The Bankruptcy Court authorized the
retention of Leech, Tishman, Fuscaldo & Lampl, LLC, as counsel to
the Committee of Unsecured Trade Creditors, and Pascarella &
Wiker, LLP, as financial advisor.
The U.S. Trustee also appointed a Committee of Asbestos Creditors
on April 28, 2000. The Bankruptcy Court authorized the retention
of these professionals by the Committee of Asbestos Creditors: (i)
Caplin & Drysdale, Chartered as Committee Counsel; (ii) Campbell &
Levine as local counsel; (iii) Anderson Kill & Olick, P.C. as
special insurance counsel; (iv) Legal Analysis Systems, Inc., as
Asbestos-Related Bodily Injury Consultant; (v) defunct firm, L.
Tersigni Consulting, P.C. as financial advisor, and (vi) Professor
Elizabeth Warren, as a consultant to Caplin & Drysdale, Chartered.
On Feb. 16, 2001, the Court approved the appointment of Lawrence
Fitzpatrick as the Future Claimants' Representative. The
Bankruptcy Court authorized the retention of Meyer, Unkovic &
Scott LLP as his counsel, Young Conaway Stargatt & Taylor, LLP as
his special counsel, and Analysis, Research and Planning
Corporation as his claims consultant.
In 2003, a plan of reorganization was agreed to by various
parties-in-interest, but, on Dec. 21, 2006, the Bankruptcy Court
issued an order denying the confirmation of that plan, citing that
the plan was too broad in addressing independent asbestos claims
that were not associated with Pittsburgh Corning.
On Jan. 29, 2009, an amended plan of reorganization (the Amended
PCC Plan) -- which addressed the issues raised by the Court when
it denied confirmation of the 2003 Plan -- was filed with the
Bankruptcy Court.
QEP RESOURCES: Moody's Assigns 'Ba1' Rating to New Senior Notes
---------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to QEP Resources,
Inc.'s (QEP) proposed offering of $500 million senior unsecured
notes due 2022. The proceeds of the notes will be used to repay
revolver borrowings. The rating outlook is stable.
RATINGS RATIONALE
"QEP Resources is well positioned to weather this period of weak
natural gas prices," commented Pete Speer, Moody's Vice President.
"This bond offering will bolster the company's liquidity by
freeing up additional revolving credit facility capacity. QEP's
significant hedging position for 2012 and good liquidity should
enable it to continue to grow its oil and natural gas liquids
production that provide attractive cash margins and investment
returns."
QEP's Ba1 Corporate Family Rating (CFR) is supported by its long-
term track record of production and proved developed (PD) reserves
growth at reasonable costs and moderate leverage metrics. The
rating incorporates the risks of the company's natural gas and
basin concentration in the Pinedale Anticline in western Wyoming
and the Haynesville Shale in northwest Louisiana. QEP derives
significant third party cash flows generated by QEP Field Services
that provide additional debt support. The company has acreage
positions in oil and high natural gas liquids (NGL) plays and is
directing capital to boost its liquids production. But this
process will take time and capital investment to greatly increase
the liquids proportion of its overall production.
The stable outlook is based on Moody's expectation that the
company continues to exercise strong capital discipline and fund
its capital expenditures predominantly with operating cash flows
while maintaining good liquidity. QEP's ratings could be upgraded
if it continues to increase its oil and NGL reserves and
production at competitive F&D costs while maintaining or improving
its current leverage metrics. This will improve its basin and
liquids diversification and strengthen its cash margins and
investment returns to offset the negative effect of weak natural
gas prices. At December 31, 2011, the company's debt/average daily
production and debt/PD reserves were approximately $14,500/boe and
$5.50/boe, respectively. If QEP's capital productivity
deteriorates significantly or if the company makes large debt
funded acquisitions that increase leverage metrics then the
ratings could be downgraded. Leverage on average daily production
or PD reserves greater than $18,000/boe and $8/boe could pressure
the ratings.
The Ba1 rating on the proposed $500 million senior notes reflects
both the overall probability of default of QEP, to which Moody's
assigns a PDR of Ba1, and a loss given default of LGD 4 (60%). The
company has a committed $1.5 billion senior unsecured revolving
credit facility with $607 million drawn and approximately $1.1
billion of senior notes outstanding at December 31, 2011. The
credit facility, the proposed senior notes and existing senior
notes are all issued at the parent level, unsecured and have no
subsidiary guarantees. Therefore the senior notes are rated the
same as the Ba1 CFR under Moody's Loss Given Default Methodology.
Moody's current ratings on QEP Resources are:
QEP Resources
LT Corporate Family (domestic currency) Rating of Ba1
Probability of Default Rating of Ba1
Speculative Grade Liquidity Rating of SGL-2
Senior Unsecured (domestic currency) Rating of Ba1
Senior Unsec. Shelf (domestic currency) Rating of (P)Ba1
LGD Senior Unsecured (domestic currency) Assessment of 60 - LGD4
The principal methodology used in rating QEP was the Global
Independent Exploration and Production Industry Methodology
published in December 2011. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
QEP Resources, Inc. is an independent exploration and production
company based in Denver, Colorado.
QEP RESOURCES: S&P Rates $500-Mil. Sr. Unsecured Notes at 'BB+'
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its issue level and
recovery ratings to Denver, Co.-based exploration and production
(E&P) company QEP Resources Inc.'s proposed $500 million senior
unsecured notes due 2022. "The issue rating is 'BB+' (same as the
corporate credit rating). The recovery rating is '3', which
indicates our expectation of a meaningful (50% to 70%) recovery in
the event of default," S&P said.
"The company expects to use the proceeds to repay borrowings under
its credit facility, fund 2012 capital expenditures, and for
general corporate purposes," S&P said.
"The corporate credit rating on QEP reflects its concentration in
natural gas assets and smaller scale compared with many
investment-grade (E&P) companies. These characteristics are
somewhat limiting factors to the ratings," S&P said.
"Supporting the ratings are the company's favorable cost
structure, good assets in the Rockies and Mid-Continent regions,
and a conservative financial policy," S&P said.
"The majority of QEP's operations are exposed to the cyclical and
capital-intensive pressures of the E&P sector. Operations are
focused primarily in the Rockies (about 42% of current production)
and the Mid-Continent region (58%). As of Dec. 31, 2011, QEP
Resources had approximately $1.68 billion in debt outstanding,"
S&P said.
Ratings List
QEP Resources Inc.
Corporate credit rating BB+/Stable/--
New Ratings
$500 mil sr unsecd notes due 2022 BB+
Recovery rating 3
REALOGY CORP: Incurs $439 Million Net Loss in 2011
--------------------------------------------------
Realogy Corporation reported a net loss of $439 million on $4.09
billion of net revenues in 2011, a net loss of $97 million on
$4.09 billion of net revenues in 2010, and a net loss of $260
million on $3.93 billion of net revenues in 2009.
The Company's balance sheet at Dec. 31, 2011, showed $7.81 billion
in total assets, $9.31 billion in total liabilities and a $1.50
billion total deficit.
"The U.S. economy remained weak in 2011, and our business results
reflected that weakness," said Richard A. Smith, Realogy's
president and chief executive officer. "Despite the difficult
macroeconomic headwinds and another challenging housing market in
2011, our revenues were flat year-over-year. While we experienced
modest softness in our real estate franchising and brokerage
segments, as did the rest of the industry, this was offset by
continued growth in our relocation and title services segments."
A full-text copy of the press release is available for free at:
http://is.gd/7Sz2fD
About Realogy Corp.
Realogy Corp. -- http://www.realogy.com/-- a global provider of
real estate and relocation services with a diversified business
model that includes real estate franchising, brokerage, relocation
and title services. Realogy's world-renowned brands and business
units include Better Homes and Gardens Real Estate, CENTURY 21,
Coldwell Banker, Coldwell Banker Commercial, The Corcoran Group,
ERA, Sotheby's International Realty, NRT LLC, Cartus and Title
Resource Group. Collectively, Realogy's franchise systems have
around 15,000 offices and 270,000 sales associates doing business
in 92 countries around the world.
Headquartered in Parsippany, N.J., Realogy is owned by affiliates
of Apollo Management, L.P., a leading private equity and capital
markets investor. Realogy fully supports the principles of the
Fair Housing Act.
* * *
Realogy has 'Caa2' corporate family rating and 'Caa3' probability
of default rating, with positive outlook, from Moody's. The
rating outlook is positive. Moody's said in January 2011 that the
'Caa2' CFR and 'Caa3' PDR reflects very high leverage, negative
free cash flow and uncertainty regarding the timing and strength
of a recovery of the residential housing market in the U.S.
Moody's expects Debt to EBITDA of about 14 times for the 2010
calendar year. Despite the recently completed and proposed
improvements to the debt maturity profile, the Caa2 CFR continues
to reflect Moody's view that current debt levels are unsustainable
and that a substantial reduction in debt levels will be required
to stabilize the capital structure.
In February, Standard & Poor's Ratings Services raised its
corporate credit rating on Realogy Corp. to 'CCC' from 'CC'. The
rating outlook is positive.
REALOGY CORP: Chairman H. Silverman Resigns; R. Smith Takes Over
----------------------------------------------------------------
Henry R. Silverman resigned from his employment at Apollo Global
Management, LLC, and from all positions held with Apollo and its
subsidiaries, affiliates and portfolio companies, all effective
March 15, 2012. In connection with that resignation, Mr.
Silverman resigned as non-executive Chairman of the Board of
Directors of Domus Holdings Corp., its direct wholly owned
subsidiary, Domus Holdings Intermediate Corp., and its indirect
wholly owned subsidiary, Realogy Corporation, also all effective
March 15, 2012.
On Feb. 27, 2012, Richard A. Smith, the President and Chief
Executive Officer of Domus Holdings Corp., Domus Intermediate
Holdings Corp. and Realogy Corporation, was elected as Chairman of
the Board by the Board of Directors of each company, effective
March 15, 2012, to fill the vacancy created by Mr. Silverman's
resignation.
About Realogy Corp.
Realogy Corp. -- http://www.realogy.com/-- a global provider of
real estate and relocation services with a diversified business
model that includes real estate franchising, brokerage, relocation
and title services. Realogy's world-renowned brands and business
units include Better Homes and Gardens Real Estate, CENTURY 21,
Coldwell Banker, Coldwell Banker Commercial, The Corcoran Group,
ERA, Sotheby's International Realty, NRT LLC, Cartus and Title
Resource Group. Collectively, Realogy's franchise systems have
around 15,000 offices and 270,000 sales associates doing business
in 92 countries around the world.
Headquartered in Parsippany, N.J., Realogy is owned by affiliates
of Apollo Management, L.P., a leading private equity and capital
markets investor. Realogy fully supports the principles of the
Fair Housing Act.
Realogy reported a net loss of $439 million in 2011, a net loss of
$97 million in 2010, and a net loss of $260 million in 2009.
The Company's balance sheet at Dec. 31, 2011, showed $7.81 billion
in total assets, $9.31 billion in total liabilities and a $1.50
billion in total deficit.
* * *
Realogy has 'Caa2' corporate family rating and 'Caa3' probability
of default rating, with positive outlook, from Moody's. The
rating outlook is positive. Moody's said in January 2011 that the
'Caa2' CFR and 'Caa3' PDR reflects very high leverage, negative
free cash flow and uncertainty regarding the timing and strength
of a recovery of the residential housing market in the U.S.
Moody's expects Debt to EBITDA of about 14 times for the 2010
calendar year. Despite the recently completed and proposed
improvements to the debt maturity profile, the Caa2 CFR continues
to reflect Moody's view that current debt levels are unsustainable
and that a substantial reduction in debt levels will be required
to stabilize the capital structure.
In February, Standard & Poor's Ratings Services raised its
corporate credit rating on Realogy Corp. to 'CCC' from 'CC'. The
rating outlook is positive.
REGAL ENTERTAINMENT: Reports $40.1 Million Net Income in 2011
-------------------------------------------------------------
Regal Entertainment Group filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing net
income of $40.10 million on $2.68 billion of total revenues for
the year ended Dec. 29, 2011, compared with net income of $77.30
million on $2.80 billion of total revenues for the year ended
Dec. 30, 2010.
The Company's balance sheet at Dec. 29, 2011, showed $2.34 billion
in total assets, $2.91 billion in total liabilities and a $572.50
million total deficit.
A full-text copy of the Form 10-K is available for free at:
http://is.gd/RiUrME
About Regal Entertainment Group
Based in Knoxville, Tennessee, Regal Entertainment Group (NYSE:
RGC) -- http://www.REGmovies.com/-- is the largest motion picture
exhibitor in the world. Regal's theatre circuit, comprising Regal
Cinemas, United Artists Theatres and Edwards Theatres, operates
6,739 screens in 545 locations in 38 states and the District of
Columbia. Regal operates theatres in 43 of the top 50 U.S.
designated market areas.
* * *
Regal Entertainment carries 'B1' corporate family and probability
of default ratings from Moody's Investors Service, 'B+' issuer
default rating from Fitch Ratings, and 'B+' corporate credit
rating from Standard & Poor's Ratings Services.
Moody's said in February 2011 that Regal's B1 CFR reflects the
trade-offs between the relative stability and the small magnitude
of the company's cash flow stream. With no change expected in
either parameter, and with very good liquidity, the rating outlook
is stable.
S&P said in February that the rating reflects S&P's view that the
company's aggressive financial policies will likely cause leverage
to remain elevated over the intermediate term. Furthermore,
Regal's revenue and EBITDA trends are highly dependent on the
performance of the U.S. box office. Other rating factors include
the company's participation in the mature and highly competitive
U.S. movie exhibition industry, exposure to the fluctuating
popularity of Hollywood films, and the long-term risk of increased
competition from the proliferation of entertainment alternatives.
RITE AID: Completes Offering of $481-Mil. Senior Notes Due 2020
---------------------------------------------------------------
Rite Aid Corporation has closed its previously announced offering
of $481.0 million aggregate principal amount of 9.25% Senior Notes
due 2020. The proceeds of the offering of the New Notes, together
with available cash, are being used to fund Rite Aid's cash tender
offer for any and all of its 8.625% Senior Notes due 2015 (CUSIP
767754BM5) and the related consent solicitation.
As part of the Tender Offer, Rite Aid solicited consents from the
holders of the Old Notes for certain proposed amendments that
would eliminate or modify certain covenants and events of default
and other provisions contained in the indenture governing the Old
Notes. Adoption of the Proposed Amendments required consents from
holders of at least a majority in aggregate principal amount
outstanding of the Old Notes. Rite Aid has received the requisite
consents in the Consent Solicitation to execute a supplemental
indenture to effect the Proposed Amendments pursuant to its Offer
to Purchase and Consent Solicitation Statement, dated Feb. 14,
2012.
As of midnight, Eastern Time, on Feb. 24, 2012, $404.8 million
aggregate principal amount of the outstanding Old Notes
(representing approximately 88.2% of the outstanding Old Notes)
had been tendered. Rite Aid has exercised its option to accept
for payment and settle the Tender Offer with respect to Old Notes
that were validly tendered at or prior to the Consent Payment
Deadline. Such Early Settlement occurred today concurrently with
the closing of the offering of the New Notes.
As a result of receiving the requisite consents, Rite Aid entered
into a supplemental indenture, dated as of Feb. 27, 2012, to the
indenture governing the Old Notes to effect the Proposed
Amendments. The supplemental indenture became effective upon the
Early Settlement of the Tender Offer.
The Tender Offer will expire at midnight, Eastern Time, on
March 13, 2012, unless the Tender Offer is extended or earlier
terminated. Under the terms of the Tender Offer, holders of Old
Notes who validly tender their Old Notes after the Consent Payment
Deadline but on or before the Expiration Date, and whose notes are
accepted for purchase, will receive tender offer consideration of
$996.25 per $1,000.00 in principal amount of Old Notes validly
tendered plus accrued and unpaid interest from and including the
most recent interest payment date, and up to, but excluding, the
final settlement date, which is expected to occur the first
business day following the Expiration Date. Other than in the
limited circumstances set forth in the Offer to Purchase, tenders
of Old Notes may not be withdrawn and consents may not be revoked
following the Consent Payment Deadline.
Rite Aid also delivered notice that it had called for redemption
all of the Old Notes that remain outstanding following
consummation of the Tender Offer at a price equal to 102.156% of
their face amount, plus accrued and unpaid interest to, but not
including, the date of redemption. Redemption of the remaining
Old Notes is expected to occur on March 28, 2012.
Requests for documents relating to the Tender Offer and Consent
Solicitation may be directed to Global Bondholder Services Corp.,
the Information Agent, at (866)-470-4300 or (212) 430-3774 (banks
and brokers). Citigroup is acting as Dealer Manager for the
Tender Offer and Consent Solicitation. Questions regarding the
Tender Offer and Consent Solicitation may be directed to Citigroup
at (800) 558-3745 (toll free) or (212) 723-6106 (collect).
The New Notes are unsecured, unsubordinated obligations of Rite
Aid Corporation and are guaranteed on an unsecured basis by
substantially all of Rite Aid's subsidiaries. The New Notes and
the related subsidiary guarantees were offered in the United
States to qualified institutional buyers pursuant to Rule 144A
under the Securities Act of 1933, as amended, and outside the
United States pursuant to Regulation S under the Securities Act.
The New Notes and the related subsidiary guarantees have not been
registered under the Securities Act and may not be offered or sold
in the United States without registration or an applicable
exemption from the registration requirements.
A full-text copy of the Form 8-K is available for free at:
http://is.gd/qVv2MD
About Rite Aid Corp.
Drugstore chain Rite Aid Corporation (NYSE: RAD) --
http://www.riteaid.com/-- based in Camp Hill, Pennsylvania, has
more than 4,700 stores in 31 states and the District of Columbia
and fiscal 2010 annual revenues of $25.7 billion.
For the 39-week period ended Nov. 26, 2011, the Company reported a
net loss of $207.32 million on $18.97 billion of revenue, compared
with a net loss of $349.73 million on $18.75 billion of revenue
for the 39-week period ended Nov. 27, 2010.
The Company's balance sheet at Nov. 26, 2011, showed $7.55 billion
in total assets, $9.96 billion in total liabilities and a $2.40
billion total stockholders' deficit.
* * *
Rite Aid carries 'Caa2' probability of default and corporate
family ratings from Moody's Investors Service. It has a 'B-'
corporate credit rating from Standard & Poor's Ratings Services.
The TCR reported on Feb. 21, 2011 that Standard & Poor's Ratings
Services said that it assigned its 'B+' issue rating and '1'
recovery rating to Rite Aid Corp.'s proposed $343 million senior
secured term loan tranche 5 due 2018. The '1' recovery rating
indicates S&P's expectation for very high (90%-100%) recovery in
the event of a payment default. According to the company, it will
use the proceeds to repay about $321 million in borrowings under
its tranche 3 term loan due 2014.
"The ratings reflect the difficulties Rite Aid faces in improving
its well-below-average operating performance relative to its
peers, especially amid intense industry competition," said
Standard & Poor's credit analyst Ana Lai. They also reflect the
company's significant debt burden and thin cash flow protection
measures.
As reported by the Troubled Company Reporter on Feb. 22, 2011,
Moody's assigned a B3 rating to Rite Aid Corp.'s proposed $343
million Tranche 5 senior secured first lien term loan due 2018.
All other ratings including its Caa2 Corporate Family Rating, Caa2
Probability of Default Rating, and SGL-3 Speculative Grade
Liquidity rating were affirmed. The rating outlook is stable.
The proceeds will be used to repay the $343 million (including
$21.2 original issue discount) Tranche 3 term loan due 2014.
Following the repayment, the Tranche 3 term loan will be retired
and its B3 rating withdrawn.
R.R. DONNELLEY: Fitch Assigns 'BB+' Rating to Note Offering
-----------------------------------------------------------
Fitch Ratings has assigned R.R. Donnelley & Sons Company's (RRD;
'BB+'/Stable) proposed seven-year $300 million note offering a
'BB+' rating. The proceeds are expected to be used to partially
fund tender offers for up to $350 million of the 4.95% unsecured
notes due April 2014 ($600 million) and 5.50% unsecured notes due
May 2015 ($400 million).
RRD will issue the senior notes under its existing indenture dated
January 3, 2007 (and subsequent supplementals). The notes will
rank pari-passu with the existing unsecured debt. Like the
existing notes, the new notes will not be guaranteed by any of
RRD's subsidiaries.
The proposed terms are similar to that of previously issued notes,
including i) a limitation on liens of up to 15% of net tangible
assets (in addition to standard carveouts; and ii) an obligation
of RRD to repurchase the notes at 101% upon a change of control.
A change of control provision is triggered if a) any person
becomes the beneficial owner of 50% or more of the voting stock,
b) a majority change in the Board of Directors and/or c) if all or
substantially all of RRD's assets are sold. Similar to the
existing bonds, there are no financial covenants.
Fitch views the proposed transaction as a modest credit positive
in that it reduces maturities in the medium term. Fitch estimates
approximately $1.0 billion of maturities through 2015, which
includes revolving credit facility balance of $288 million due in
2013 and the remaining $650 million balance on the 2014 and 2015
unsecured notes. The year-end debt balance of approximately $3.7
billion remains largely unchanged. Fitch assumes the difference
between the amount tendered and the proposed issuance will be
funded with RRD's revolving credit facility.
Fitch views RRD's current liquidity as adequate. At December 31
2011, the company had $450 million in cash and approximately $1.1
billion available under its $1.75 billion credit facility (pro
forma for $159 million borrowing used to pay down January 2012
maturity and $64 million incremental borrowing related to tender
offer). Fitch calculates 2011 FCF (after dividends) at $490
million, however, 2012 FCF will be affected by an additional pre-
tax $200 million ($254 million in total) pension and 401(k)
contribution.
At December 31, 2011, Fitch calculated gross unadjusted leverage
to be 2.8 times (x), within the company's stated leverage target
of 2.5x to 3.0x. In the near term, leverage could average at
least 0.25x more than the company's target without affecting its
'BB+' credit rating.
RRD's ratings reflect the following key considerations:
-- RRD's scale and diverse product offering as the largest
commercial printer in the US and worldwide.
-- The commercial printing market size is approximately $140
billion in the US, and RRD has less than 5% market share.
RRD is one of few well-capitalized competitors in this highly
fragmented and large industry. The significant addressable
market share that RRD could capture from rivals provides some
offset to the secular pressures.
-- In Fitch's view, slightly more than 50% of R.R. Donnelley's
revenues face some degree of secular headwinds (catalogs,
magazines, books, directories, variable, commercial and
financial print). Fitch believes that continued pricing and
volume pressure will challenge RRD's ability to drive GDP-
level organic revenue growth.
-- RRD demonstrated its cyclical nature through the downturn,
with revenues declining 15% and Fitch EBITDA declining 26% in
2009. The company's recovery has been slower than other non-
advertising media-related subsectors.
Fitch considers an upgrade unlikely until secular trends
stabilize.
Negative triggers that would pressure the rating include increased
share buyback activity or secular/cyclical declines in RRD's print
division, which drove leverage sustainably to or above the 3.5x
range.
Fitch currently rates RRD as follows:
-- Long-term IDR 'BB+'; Stable Outlook
-- Senior unsecured revolving credit facility at 'BB+';
-- Senior unsecured notes and debentures at 'BB+';
-- Short-term IDR at 'B';
-- Commercial paper at 'B'.
RR DONNELLEY: S&P Rates $300-Million Unsecured Notes at 'BB+'
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned issue-level and
recovery ratings to R.R. Donnelley & Sons Co.'s proposed $300
million unsecured notes due 2019. "We assigned the debt an issue-
level rating of 'BB+' (the same as the 'BB+' corporate credit
rating on R.R. Donnelley), and a recovery rating of '3',
indicating our expectation of meaningful (50%-70%) recovery in the
event of a payment default," S&P said.
"Proceeds of the new notes will be used to partly fund tender
offers for up to $350 million principal amount of the company's
4.95% notes due 2014 and its 5.5% notes due 2015 notes, and to pay
any premiums associated with the tender offers. If there are any
remaining proceeds, the company will use the proceeds to repay
borrowings outstanding under its revolving credit facility," S&P
said.
"Our corporate credit rating on R.R. Donnelley is 'BB+.' The
rating outlook is negative, reflecting weak economic conditions,
negative trends in print media, the risk of intensifying pricing
pressure, and elevated leverage, in our view," S&P said.
"R.R. Donnelley issued three downward revisions of earnings
guidance related to its 2011 results in the past six months. In
its fourth-quarter earnings call, management said it expects to
achieve and maintain gross leverage in the range of 2.5x to 3x,
according to its calculations, which excludes restructuring
charges and the pension and lease-adjustments that we apply.
Converting management's target leverage range to our lease- and
pension-adjusted leverage computation (including restructuring
charges), we believe adjusted leverage could be in the 3.0x to
3.5x range, once restructuring charges normalize and pension
obligations decline, and assuming ongoing debt repayment.
Restructuring charges have been relatively high because of the
acquisition of Bowne and the pressure of industry-wide excess
capacity. R.R. Donnelley froze its pension plan; despite this,
adjusted leverage could still remain above the mid-3x area because
low discount rates and low asset returns could keep its
underfunded pension status elevated. Further secular pressure on
print media could cause leverage to remain elevated or even
increase," S&P said.
"We could lower our rating if we conclude secular risks facing
R.R. Donnelley have increased and could cause organic revenue to
decline consistently or cause the company's EBITDA margin to
shrink to less than 10%. We would likely view further downward
revisions of guidance as problematic. Even without these elements
of an operating performance scenario, if it becomes apparent that
the company's leverage will remain in the high-3x area or greater,
we could also consider lowering the rating. We could revise the
outlook back to stable if leverage begins falling toward the mid-
3x area and we become convinced that operating performance has
stabilized," S&P said.
Ratings List
R.R. Donnelley & Sons Co.
Corporate credit rating BB+/Negative/--
Rating Assigned
Proposed $300 mil. unsec. notes due 2019 BB+
Recovery rating 3
SAAB AUTOMOBILE: North America Unit Taps McTevia as Consultant
--------------------------------------------------------------
Martin Bricketto at Bankruptcy Law360 reports that Saab Cars North
America Inc., which recently failed to transfer its Chapter 11
case from Delaware to Michigan, asked for court permission Tuesday
to tap as its chief restructuring officer the consultant who was
overseeing the out-of-court winding down of the company's
business.
Royal Oak, Mich.-based SCNA ? the North American operating
subsidiary of bankrupt Swedish carmaker Saab Automobile AB ? said
corporate restructuring veteran James V. McTevia is well qualified
to help sell its assets, wind down its operations and otherwise
manage the Chapter 11, according to Law360.
About Saab Cars North America
More than 40 U.S.-based Saab dealerships have signed an
involuntary chapter 11 bankruptcy petition for Saab Cars North
America, Inc., (Bankr. D. Del. Case No. 12-10344) on Jan. 30,
2012. The petitioners, represented by Wilk Auslander LLP, assert
claims totaling $1.2 million on account of "unpaid warranty and
incentive reimbursement and related obligations" and/or "parts and
warranty reimbursement." Leonard A. Bellavia, Esq., at Bellavia
Gentile & Associates, in New York, signed the Chapter 11 petition
on behalf of the dealers.
The dealers want the vehicle inventory and the parts business to
be sold, free of liens from Ally Financial Inc. and Caterpillar
Inc., and "to have an appropriate forum to address the claims of
the dealers," Leonard A. Bellavia said in an e-mail to Bloomberg
News.
Saab Cars N.A. is the U.S. sales and distribution unit of Swedish
car maker Saab Automobile AB. Saab Cars N.A. named in December an
outside administrator, McTevia & Associates, to run the company as
part of a plan to avoid immediate liquidation following its parent
company's bankruptcy filing.
Saab Automobile AB is a Swedish car manufacturer owned by Dutch
automobile manufacturer Swedish Automobile NV, formerly Spyker
Cars NV. Saab Automobile AB, Saab Automobile Tools AB and Saab
Powertain AB filed for bankruptcy on Dec. 19, 2011, after running
out of cash.
SEALY CORP: Goldman Sachs Ceases to Hold 5% Equity Stake
--------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, The Goldman Sachs Group, Inc., and Global
Securities Services disclosed that, as of Dec. 31, 2011, they
beneficially own 5,266,152 shares of common stock of Sealy
Corporation, which represents 4.9% of the shares outstanding. As
previously reported by the TCR on Feb. 16, 2012, Goldman Sachs
disclosed beneficial ownership of 5,399,063 common shares. A
full-text copy of the amended Schedule is available for free at:
http://is.gd/bFnPH1
About Sealy Corp.
Trinity, North Carolina-based Sealy Corp. (NYSE: ZZ) --
http://www.sealy.com/-- is the largest bedding manufacturer in
the world with sales of $1.5 billion in fiscal 2008. The Company
manufactures and markets a broad range of mattresses and
foundations under the Sealy(R), Sealy Posturepedic(R), including
SpringFree(TM), PurEmbrace(TM) and TrueForm(R); Stearns &
Foster(R), and Bassett(R) brands. Sealy operates 25 plants in
North America, and has the largest market share and highest
consumer awareness of any bedding brand on the continent. In the
United States, Sealy sells its products to approximately 3,000
customers with more than 7,000 retail outlets.
The Company reported a net loss of $9.88 million for the 12 months
ended Nov. 27, 2011, and a net loss of $13.74 million during the
prior year. The Company reported a net loss of $15.20 million
for the three months ended Nov. 27, 2011.
The Company's balance sheet as of Nov. 27, 2011, showed
$919.19 million in total assets, $999.75 million in total
liabilities, and a $80.56 million stockholders' deficit.
* * *
Sealy carries 'B' local and issuer credit ratings from Standard &
Poor's.
SECURITY NATIONAL: U.S. Trustee Unable to Form Committee
--------------------------------------------------------
The United States Trustee for Region 3 said an official committee
under 11 U.S.C. Sec. 1102 has not been appointed in the bankruptcy
case of Security National Properties Funding III LLC because an
insufficient number of persons holding unsecured claims against
the Debtor have expressed interest in serving on a committee. The
U.S. Trustee reserves the right to appoint such a committee should
interest developed among the creditors.
Eureka, California-based Security National Properties Funding III
LLC owns and operates 33 commercial office, retail, industrial and
other properties. Security National and various affiliates filed
for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 11-13277)
on Oct. 13, 2011. Judge Kevin Gross presides over the case.
Andrew R. Remming, Esq., and Robert J. Dehney, Esq., at Morris,
Nichols, Arsht & Tunnell, serve as the Debtors' counsel. GCG Inc.
serves as the Debtors' claims and notice agent. The Debtors'
scheduled assets total $24,758,433 while scheduled liabilities
total $354,657,501.
SEDGWICK CLAIMS: S&P Affirms 'B+' Counterparty Credit Rating
------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its counterparty
credit rating on Sedgwick Claims Management Services Inc.
(Sedgwick) at 'B+' and revised the outlook to stable from
positive. "At the same time, we assigned recovery ratings of '2'
and '6' to Sedgwick's first- and second-lien debt outstanding
resulting in a one-notch upgrade for the first-lien debt to 'BB-'
from 'B+'," S&P said.
"The ratings are based on the company's market position as the
leading third-party administrator (TPA) of claims management
services, its consistent top-line growth, solid earnings metrics,
and it's seasoned, well-regarded management team," said Standard &
Poor's credit analyst Robert Green. "The acquisition of Specialty
Risk Services LLC (SRS) from the Hartford Financial Services Group
Inc., completed on Feb. 28, 2012, has enhanced the combined
operation through cost synergy benefits and revenue growth through
cross-selling opportunities. Following the acquisition, Sedgwick's
business profile benefitted from a somewhat broader and more
diversified customer base, although the narrow TPA product line
somewhat offsets this."
"The SRS acquisition has further augmented Sedgwick's
preacquisition leading market position. Sedgwick was the leading
TPA in 2010 with $741.9 million of revenue, while SRS was ranked
fourth with about $218.8 million in revenue. Through the first
three quarters of 2011, inclusive of the SRS acquisition, Sedgwick
generated revenue of $753.6 million and is on pace to record about
$1.0 billion of revenue in 2011. Sedgwick's management has solid
industry experience and has generally demonstrated strong business
and operating plan execution throughout its history.
Notwithstanding the recent uncertain economy, Sedgwick generally
meets revenue and EBITDA targets," S&P said.
"Offsetting those positives, the company makes use of substantial
debt leverage and has large amounts of goodwill and intangible
assets, which have increased following the acquisition. Intangible
assets to equity as of Sept. 30, 2011, were 258%. Total financial
obligations (including operating leases and pension obligations)
to EBITDA were about 6.3x at year-end 2011. Additionally,
Sedgwick is an acquisitive company. This propensity, in
combination with debt being the preferred form of capital for the
company's private equity owners, raises the strong possibility
that the near-term improvements we expect will not translate into
longstanding improvements in leverage and coverage metrics," S&P
said.
"We have revised the outlook to stable from positive. The outlook
reflects Sedgwick's strong competitive position and greater
revenue and customer diversification following the SRS
acquisition. The company's aggressive acquisition strategy and its
highly leveraged capital structure offset these positives.
Although we expect Sedgwick's leverage and coverage metrics to
improve with the ongoing integration of SRS, because of the
company's strategy these improvements are not necessarily
sustainable," S&P said.
"We may lower the ratings if the full integration of SRS is
unsuccessful, leading to expected synergies remaining unrealized,
or deteriorating business conditions resulting in EBITDA margins
falling and remaining below 15%. Also, acquisitions into
businesses or locales outside of management's core competencies
could lead to a downgrade. We may raise the ratings if EBITDA
debt leverage declines and remains below 5x while the company
maintains a sustained fixed-charge coverage above 2.6x and EBITDA
margins greater than 17%. We do not believe this is likely to
occur over the next 12 months," S&P said.
SKYSHOP LOGISTICS: Suspending Filing of Reports with SEC
--------------------------------------------------------
Skyshop Logistics, Inc., filed a Form 15 notifying of its
suspension of its duty under Section 15(d) to file reports
required by Section 13(a) of the Securities Exchange Act of 1934
with respect to its common stock, par value $0.001 per share.
Pursuant to Rule 12h-3, the Company is suspending reporting
because there are currently less than 300 holders of record of the
common shares. There were only 272 holders of the common shares
as of Feb. 27, 2012.
About Skyshop Logistics
Miami, Fla.-based SkyShop Logistics, Inc., is the largest private
mail network in the Latin American-Caribbean region, handling mail
and parcels from U.S. and European postal administrations, mail
consolidators, major publishers, international mailers, e-tailers
and financial institutions that require time-defined and reliable
delivery of their mail, including magazines, catalogs and parcels.
The Company provides Internet merchants the ability to expand
their markets internationally without the inherent risks of
shipping parcel post to foreign buyers or the use of expensive
express couriers.
As reported in the TCR on March 23, 2011, Morrison, Brown, Argiz
and Farra, LLC, in Miami, Fla., expressed substantial doubt about
SkyShop Logistics' ability to continue as a going concern,
following the Company's 2010 results. The independent auditors
noted that the Company has suffered recurring losses from
operations, has a deficiency in working capital and has a net
capital deficiency.
The Company reported a net loss of $3.79 million for the nine
months ended Sept. 30, 2011, and a net loss of $2.75 million for
the same period during the prior year.
The Company's balance sheet at Sept. 30, 2011, showed
$3.27 million in total assets, $4.74 million in total liabilities
and a $1.46 million total stockholders' deficit.
SPRINT NEXTEL: Moody's Assigns 'B3' Rating to Proposed Offering
---------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Sprint Nextel's
("Sprint") proposed offering of Senior Unsecured Notes and a Ba3
rating to Sprint's proposed offering of Junior Guaranteed
Unsecured Notes. The proceeds will be used for general corporate
purposes, the repayment of existing debt, network expansion and
modernization, and the potential funding of Clearwire. All of
Sprint's ratings remain on review for possible downgrade,
including those assigned and the company's B1 corporate family
rating and B1 probability of default rating.
RATINGS RATIONALE
Moody's will continue its review of Sprint's ratings for possible
downgrade focusing on Sprint's progress towards a fully funded
business plan and the progress and impact of the company's plans
to secure sufficient spectrum for its future operations. Moody's
will also consider the execution of the company's LTE rollout
relative to schedule and budget and Sprint's operational
performance as demonstrated by post-paid subscriber additions and
churn.
Sprint has made substantial progress raising capital and taken
concrete steps towards resolving its relationship with Clearwire
which would address its potential spectrum shortage. In addition
to the debt offering, Sprint has contemplated utilizing vendor
financing to fund its LTE rollout, which, if successfully
implemented, would mostly satisfy Moody's concerns about its
future financing needs. However, while Sprint has made progress
towards a mutually beneficial working partnership with Clearwire,
this still needs to play out.
The Ba3 rating assigned to Sprint's proposed offering of Junior
Guaranteed Unsecured Notes reflects its seniority ahead of
Sprint's Senior Unsecured Notes, and its subordinate ranking to
the Senior Unsecured Guaranteed Bank Credit Facility, which
remains rated Ba1.
Moody's views Sprint's liquidity as good, and anticipates that
internally generated cash and cash on hand will be sufficient to
fund the company's operations for the next 12 months. Sprint has
approximately $1.8 billion of debt maturing in 2013, having
redeemed all major 2012 maturities during 2011. As of December 31,
2011, Sprint had $5.6 billion in cash and $1.1 billion available
on its revolving credit facility.
Given the review for downgrade, a rating upgrade is not expected.
However, the rating could be removed from review for downgrade if
Sprint makes further progress in addressing both its future
funding requirements and its plans to address its future spectrum
requirements.
Sprint's ratings could be lowered if it fails to proactively
address future funding requirements, if adequate liquidity is not
maintained, if the network upgrade falls behind schedule or
doesn't yield the benefits promised or if its competitive position
deteriorates as evidenced by postpaid churn rising. Specifically,
if leverage was likely to exceed 6x on a sustained basis the
ratings could be downgraded.
The principal methodology used in rating Sprint Nextel was the
Global Telecommunications Industry Methodology published in
December 2010. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
Moody's has taken the following rating actions:
Issuer: Sprint Nextel Corporation
Assignments:
-- Senior Unsecured Regular Bond/Debenture, Assigned a range of
LGD5, 82 %
-- Senior Unsecured Regular Bond/Debenture, Assigned B3; Placed
Under Review for further Possible Downgrade
-- Guaranteed Senior Unsecured Regular Bond/Debenture, Assigned
a range of LGD3, 41 %
-- Guaranteed Senior Unsecured Regular Bond/Debenture, Assigned
Ba3; Placed Under Review for further Possible Downgrade
LGD Downgrades:
-- US$2250M Senior Unsecured Bank Credit Facility, Downgraded
to a range of LGD2, 17 % from a range of LGD2, 13 %
-- US$2000M 6% Senior Unsecured Regular Bond/Debenture,
Downgraded to a range of LGD5, 82 % from a range of LGD5,
81%
-- US$1300M 8.375% Senior Unsecured Regular Bond/Debenture,
Downgraded to a range of LGD5, 82 % from a range of LGD5,
81%
-- US$3000M 9% Guaranteed Senior Unsecured Regular
Bond/Debenture, Downgraded to a range of LGD3, 41 % from a
range of LGD3, 35 %
-- US$1000M 11.5% Senior Unsecured Regular Bond/Debenture,
Downgraded to a range of LGD5, 82 % from a range of LGD5,
81%
-- US$200M 9.25% Senior Unsecured Regular Bond/Debenture,
Downgraded to a range of LGD5, 82 % from a range of LGD5,
81%
Issuer: iPCS, Inc.
LGD Downgrades:
-- US$175M Senior Secured Regular Bond/Debenture, Downgraded to
a range of LGD5, 82 % from a range of LGD5, 81 %
Issuer: NEXTEL Communications, Inc.
LGD Downgrades:
-- US$2000M 7.375% Senior Unsecured Regular Bond/Debenture,
Downgraded to a range of LGD4, 56 % from a range of LGD4,
51%
-- US$1500M 6.875% Senior Unsecured Regular Bond/Debenture,
Downgraded to a range of LGD4, 56 % from a range of LGD4,
51%
-- US$1200M 5.95% Senior Unsecured Regular Bond/Debenture,
Downgraded to a range of LGD4, 56 % from a range of LGD4,
51%
Issuer: Sprint Capital Corporation
LGD Downgrades:
-- US$2500M 6.875% Senior Unsecured Regular Bond/Debenture,
Downgraded to a range of LGD5, 82 % from a range of LGD5,
81%
-- US$1750M 6.9% Senior Unsecured Regular Bond/Debenture,
Downgraded to a range of LGD5, 82 % from a range of LGD5,
81%
-- US$2000M 8.75% Senior Unsecured Regular Bond/Debenture,
Downgraded to a range of LGD5, 82 % from a range of LGD5,
81%
SPRINT NEXTEL: S&P Rates $1-Bil. Sr. Guaranteed Notes at 'BB-'
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' issue-level
rating and '2' recovery rating to Overland Park, Kan.-based
wireless carrier Sprint Nextel Corp.'s proposed $1 billion of
senior guaranteed notes due 2020. These notes have subordinated
guarantees from all the subsidiaries that guarantee the existing
$2.25 billion revolving credit facility. The '2' recovery rating
indicates expectations for substantial (70% to 90%) recovery in
the event of payment default.
"We also assigned a 'B+' issue-level rating and '4' recovery
rating to the company's proposed $1 billion of senior notes due
2017, to be issued under rule 144A with registration rights. The
'4' recovery rating indicates our expectation for average (30% to
50%) recovery in the event of payment default. We expect the
company to use net proceeds to fund operating losses, bolster
liquidity, and repay debt coming due in the next 18 months," S&P
said.
"The corporate credit rating on Sprint Nextel is 'B+' and remains
unchanged, as does the negative outlook," S&P said.
S&P's rating incorporates some of these assumptions:
* "We expect modest post-paid net subscriber additions of 200,000
to 250,000 in 2012. In comparison, Sprint Nextel lost about
98,000 post-paid subscribers in 2011. While the iPhone should
have a positive impact on gross subscriber trends, rising churn
on the iDEN network should constrain overall customer growth,"
S&P said.
* "We expect continued margin pressure over the next year related
to iPhone subscriber acquisition costs, as well as expenses
associated with the accelerated network upgrade. We believe
that wireless EBITDA margins will be in the 10% to 11% area in
2012," S&P said.
* "We expect the company to have a free operating cash flow
(FOCF) deficit of at least $3.5 billion in 2012 and $750
million in 2013. FOCF will likely not turn positive until 2014,
at the earliest," S&P said.
* "We expect operating lease-adjusted debt to EBITDA to rise to
around 6.5x in 2012, from about 5.0x as of Dec. 31, 2011,
although leverage could improve to below 5.0x by 2014 because
of potential EBITDA improvements from the network upgrade," S&P
said.
"Our leverage calculation assumes that the company completes its
vendor financing plans during the year and that 2013 maturities
are paid down rather than refinanced. The ratings on Sprint
Nextel continue to reflect a 'highly leveraged' financial risk
profile based on our expectation of FOCF losses through 2013 and
rising leverage. The ratings also reflect our assessment of the
business risk profile which remains 'fair'. This assessment
incorporates the company's weak profitability measures relative to
its peer group; significant competition from other wireless
carriers, which is particularly important as the industry
continues to show signs of maturation; and elevated customer churn
rates. Mitigating factors include Sprint Nextel's position as the
third-largest wireless carrier in the U.S., with a national
footprint; improving subscriber trends; and rising average revenue
per user, which should lead to modest revenue growth," S&P said.
Ratings List
Sprint Nextel Corp.
Corporate Credit Rating B+/Negative/--
New Ratings
Sprint Nextel Corp.
Senior Secured
$1 bil gtd nts due 2020 BB-
Recovery Rating 2
$1 bil nts due 2017 B+
Recovery Rating 4
SWIFT TRANSPORTATION: S&P Rates $200-Mil. Term Loan at 'BB'
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned 'BB' issue ratings to
U.S.-based trucking company Swift Transportation Co. LLC's
proposed $200 million term loan B-1 and $674 million term loan B-
2. "We also assigned a '1' recovery rating to the proposed term
loans to indicate our expectation that lenders would receive very
high (90%-100%) recovery following a payment default. Swift
Transportation Co. LLC is a first-tier subsidiary of Phoenix-based
Swift Transportation Co.," S&P said
"If the financing deal closes as currently planned, which likely
will happen in the coming week, we expect to raise our rating on
the company's existing second-lien notes, due 2018, by one notch
(to 'B+' from 'B'). We would simultaneously revise the recovery
rating on those notes to '4' from '5' to reflect our greater
recovery expectations in a simulated payment default," S&P said.
"The scheduled amortization terms in the proposed financing imply
a reduction of first-lien claims in our simulated default
scenario. In our recovery analysis, we simulate a bankruptcy in
2015, following the loss of major customers amid higher fuel
prices, rising interest rates, and lower economic activity. We
believe that lenders would achieve greatest recovery value
through reorganization of the borrower rather than liquidation,"
S&P said.
"The ratings on Swift Transportation Co. reflect Standard & Poor's
assessment of the company's business risk profile as 'fair' and
its financial risk profile as 'aggressive' according to our
criteria. Swift's participation in the highly fragmented,
cyclical, and capital-intensive truckload (TL) trucking industry
is a key credit consideration. The company's position as the
largest TL carrier in the U.S. somewhat offsets these factors.
Swift operates a fleet of more than 16,000 tractors, 48,000
trailers, and 35 terminals across the U.S. and in Mexico--thus
attracting large corporate customers seeking a variety of trucking
services. Swift's size relative to most other industry players
also provides some competitive advantages, including economies of
scale in purchasing equipment, a greater ability to attract and
retain drivers, and resources to comply with increasing regulatory
requirements. Swift's profitability and cash generation have
improved steadily in recent quarters," S&P said.
Ratings List
Swift Transportation Co.
Corporate credit rating B+/Stable/--
Ratings Assigned
Swift Transportation Co. LLC
Senior secured
$200 mil. term loan B-1 BB
Recovery rating 1
$674 mil. term loan B-2 BB
Recovery rating 1
TELETOUCH COMMUNICATIONS: Thermo Wants Borrowing Base Changed
-------------------------------------------------------------
Thermo Credit, LLC, on Feb. 21, 2012, in connection with its
current $12 million revolving credit facility having a maturity
date in January 2013 by and among Thermo, Teletouch
Communications, Inc., Teletouch Licenses, Inc., and Progressive
Concepts, Inc., and all of TLL, PCI, and TLI, notified the Company
of its intent to significantly modify, revalue, adjust and change
the Company's borrowing base, pursuant to Section 2(e) of the Loan
Agreement, to now exclude certain classes of assets in their
entirety from the borrowing base under the Agreement, even though
these assets had been previously accepted by Thermo and have been
included in the Borrowing Base for several years, and in some
instances, since the loan was originated. The Company has
expressed to Thermo that it disagrees with the proposed
modifications to the current Borrowing Base. Thermo's intent to
modify the Borrowing Base is contractually subject to good faith
negotiations between the parties over the next 60 days regarding
which items to exclude or reevaluate to include in the borrowing
base. As a result, the final determination between the parties as
to which assets will comprise the resulting revised Borrowing Base
has not been made, and the parties will negotiate those
disagreements in good faith over the next 60-days to make the
final determination.
Under the terms of the Agreement, borrowings against the credit
facility are comprised of specific advance rates against the
individual and aggregate fair value of the Company's assets,
including, among others, real estate, equipment, infrastructure
assets, inventory, accounts receivable, intangible assets and
notes receivable, those assets collectively comprising the
Borrowing Base. However, earlier this year, Thermo informed the
Company that it was not in compliance with its own borrowing base
and facility with its own lender. As a result, there can be no
assurance that the discussions and further consultations over the
next 60 days will resolve any disagreements over items to exclude
or include in the revised Borrowing Base, or if they do, whether
they will be concluded on terms favorable to the Company. To the
extent that Thermo and the Company cannot mutually agree on which
items to include or exclude in the revised Borrowing Base, the
assets in question may be excluded at Thermo's sole discretion
from the Borrowing Base calculations, and a portion of the
Company's obligations under the Agreement will be accelerated,
with an additional $3.78 million becoming due and payable on
April 22, 2012.
Additionally, at Jan. 31, 2012, under the current terms of the
Agreement and related Borrowing base calculation, the Company was
over-advanced by approximately $1.38 million, with a corollary
obligation to pay Thermo $90,000 in remaining commitment fees
related to the most recent revisions and amendment to the
Agreement. This over-advance has increased slightly from the
$1.22 million reported in the Company's most recent quarterly
report on Form 10-Q that was filed on Jan. 17, 2012, primarily due
to a continued reduction in the value of the cellular billing
accounts receivable component of the Company's Borrowing Base.
As of Feb. 27, 2012, Thermo has not required that the Company
repay the over-advance or the remaining commitment fee. If the
Company has not repaid the over-advance and commitment fee and the
Borrowing Base calculations are revised as proposed by Thermo in
its Feb. 21, 2012, notice letter, a total amount of approximately
$5.25 million would be due and payable by the Company on April 22,
2012, based on the Borrowing Base calculation as of Jan. 31, 2012.
Pursuant to the above, and as previously reported, during the
fourth quarter of fiscal 2011, Thermo informed the Company that it
could not advance additional funds under the credit facility due
to, among other reasons, declining accounts receivable in the
Borrowing Base, the total outstanding balance of the credit
facility, and as the Company has learned, Thermo's own inability
to borrow additional cash from its lenders due to concentration
issues in its borrowing base, among other matters. Since at least
the beginning of this year, both together and separately, Thermo
and Teletouch have been working to move part or all of the
Company's current loan facility to a new financial providers and
has been actively working with Thermo to re-finance with new
lenders, all or part of its existing indebtedness to Thermo, as a
result of the restrictions placed on Thermo by its own lender. As
of Feb. 27, 2012, TLL has not secured new financing to replace
Thermo, but is in discussions with a number of potential lenders,
and will publicly report any refinancing actions as they occur.
There is no assurance given that such discussions will yield any
results or that even if they do, they will be concluded on the
terms favorable to the Company.
The Company has a total of approximately $10.48 million
outstanding under the credit facility Agreement with Thermo as
Feb. 27, 2012.
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.
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.
TOWN CENTER: Hearing on Value Collateral Plea Set for March 5
-------------------------------------------------------------
The Hon. Robert A. Mark of the U.S. Bankruptcy Court for the
Southern District of Florida will conduct a further hearing on
March 5, 2012, at 10:00 a.m., on Town Center at Doral, LLC, et
al.'s renewed motion to value collateral.
The Court said that to the extent the Debtors seek to have the
Court value the property per the appraisal prepared by Waronker &
Rosen, Inc., or seek to have the Court hear testimony from
Dr. Henry Fishkind or further testimony from Lee Waronker, the
renewed motion to value is denied.
The Court reserves ruling on the renewed motion to value to the
extent the Debtors seek to have the Court appoint a valuation
expert pursuant to Federal Rule of Evidence 706.
The Court also ordered that the Debtors and the Landmark at Doral
Community Development District had until Feb. 27, to file a list
of proposed valuation experts.
About Town Center
Town Center at Doral, LLC, Landmark at Doral East, LLC, Landmark
at Doral South, LLC, Landmark Club at Doral, LLC, and Landmark at
Doral Developers, LLC, companies associated with the aborted
Landmark at Doral development, filed for Chapter 11 bankruptcy
(Bankr. S.D. Fla. Case Nos. 11-35884 to 11-35888) on Sept. 19,
2011, almost three years after AmTrust Bank sought to foreclose on
the project. Town Center at Doral, LLC, posted assets of
$29,297,300 and liabilities of $166,133,171. Isaac Kodsi signed
the petitions as vice president.
The Property consists of 16 individual tracts of land that remain
undeveloped with the exception of an unfinished 4-level parking
garage. Prior to the Petition Date, the Debtors had sought and
obtained approvals for the development of residential units
(townhomes and condominiums), retail/office/mixed use, and flex
office at the Property.
Mindy A. Mora, Esq., and Tara V. Trevorrow, Esq., at Bilzin
Sumberg Baena Price & Axelrod, LLP, in Miami, serve as counsel to
the Debtors.
Glenn D. Moses, Esq., at Genovese, Joblove & Battista, P.A., IN
Miami, represents the official committee of unsecured creditors.
Cleveland, Ohio-based AmTrust filed for foreclosure in
October 2008 based on the $124.4 million in mortgages that were
granted the developer in 2005. Several projects started by EB
Developers fell into foreclosure after owner and CEO Elie Berdugo
died in February 2008.
TR SHADOW: Court Dismisses Chapter 11 Case
------------------------------------------
The U.S. Bankruptcy Court granted TR Shadow View LLC's motion to
dismiss its Chapter 11 case. The Debtor's request was triggered
by the Court's approval of a Motion for Relief from the Automatic
Stay, filed by Armed Forces Bank, N.A., successor by merger to
Bank Midwest, N.A. The effect of the Court's Lift Stay Order was
to allow the Bank to foreclose upon a significant asset of the
Debtor -- 230.51 acres of vacant land in Coachella, Riverside
County, California. Thus, there are currently no assets to
administer.
TR Shadow View, LLC, based in Newport Beach, California, filed for
Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-19227) on
June 29, 2011. Eric J. Fromme, Esq., at Rutan & Tucker LLP,
serves as the Debtor's bankruptcy counsel. The Debtor disclosed
$35,003,189 in assets and $33,352,297 in liabilities in its
schedules.
UNITED AIRLINES: Flight Attendants Ratify Contract
--------------------------------------------------
Flight Attendants at United Airlines, represented by the
Association of Flight Attendants-CWA, ratified a contract covering
the 15,000 pre-merger United Flight Attendants. An overwhelming
majority of Flight Attendants, 88.5 percent, participated in the
vote and 70.4 percent solidly cast their ballots in favor of the
agreement. This agreement was reached on January 7, 2012,
utilizing an innovative process modeled on the National Mediation
Board's Expedited Mediation Program. This is the first post-
bankruptcy contract for United Flight Attendants.
"This agreement is good for Flight Attendants and good for the
company. It addresses many immediate needs identified by United
Flight Attendants and serves as a stepping-stone to single
contract negotiations with our flying partners from Continental
and Continental Micronesia," said Greg Davidowitch, president of
AFA at United Airlines.
Successful conclusion to single contract negotiations is necessary
in order for United to combine Flight Attendant work groups and
complete the merger. The true benefit of a merger is realized
through an operational integration and Flight Attendants are a key
part of that process and the future success of United Airlines.
The ratified contract includes significant quality of work life
enhancements, new job security protections, scheduling and
compensation improvements, including an immediate ten percent wage
increase and distribution of a $5,000 signing bonus. "Our main
goal in Expedited Mediation was to secure significant compensation
and quality of work life improvements that Flight Attendants told
us were must-haves, before moving onto single contract
negotiations. Importantly, this agreement requires United to
return to the negotiating table for single contact negotiations no
later than this summer," added Davidowitch.
The Association of Flight Attendants -- http://www.unitedafa.org/
-- is the world's largest Flight Attendant union. Focused 100
percent on Flight Attendant issues, AFA has been the leader in
advancing the Flight Attendant profession for over 65 years.
Serving as the voice for Flight Attendants in the workplace, in
the aviation industry, in the media and on Capitol Hill, AFA has
transformed the Flight Attendant profession by raising wages,
benefits and working conditions.
About UAL Corp.
Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) --
http://www.united.com/-- is the holding company for United
Airlines, Inc. United Airlines is the world's second largest air
carrier. The airline flies to Brazil, Korea and Germany.
The company filed for Chapter 11 protection on Dec. 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven
R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in
their restructuring efforts. Fruman Jacobson, Esq., at
Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy.
Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan
on Jan. 20, 2006. The company emerged from bankruptcy protection
on Feb. 1, 2006. (United Airlines Bankruptcy News; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
US FIDELIS: Wants to Expand David Lander's Scope of Employment
--------------------------------------------------------------
US Fidelis, Inc., wants to employ and retain David A. Lander and
the Law Firm of Gallop, Johnson & Neuman, L.C., as conflicts
counsel for the purpose of representing the Debtor on issues on
which the Debtor requires counsel and with regard to which Lathrop
& Gage LLP and Thompson Coburn LLP may be prohibited from
representing the estate's interest due to a potential or actual
conflict of interest.
As compensation, fees will be charged at the hourly rates of
Gallop, Johnson & Neuman, L.C. The hourly rates charged are:
David A. Lander $410 per hour
Other attorneys $190-$425 per hour.
The Debtor assured the Court that the firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
As reported in the Troubled Company Reporter on Feb. 10, 2012,
the U.S. Bankruptcy Court for the Eastern District of Montana has
granted US Fidelis, Inc., permission to employ David A.
Lander and the Law Firm of Gallop, Johnson & Neuman, L.C., as
special conflicts counsel.
About US Fidelis
Wentzville, Missouri-based US Fidelis, Inc., was a marketer of
vehicle service contracts developed by independent and unrelated
companies. It stopped writing new business in December 2009.
The Company filed for Chapter 11 bankruptcy protection (Bankr.
E.D. Mo. Case No. 10-41902) on March 1, 2010. Brian T. Fenimore,
Esq., Crystanna V. Cox, Esq., James Moloney, Esq, at Lathrop &
Gage L.C., in Kansas City, Mo.; and Laura Toledo, Esq., at Lathrop
& Gage, in Clayton, Mo., assist the Debtor in its restructuring
effort. According to the schedules, the Company had assets of
$74,386,836, and total debts of $25,770,655 as of the petition
date.
Allison E. Graves, Esq., Brian Wade Hockett, Esq., and David A.
Warfield, Esq., at Thompson Coburn LLP, in St. Louis, Mo.,
represent the Official Unsecured Creditors Committee.
W.R. GRACE: Wins February 2013 Extension of ART Facility
--------------------------------------------------------
W.R. Grace & Co. sought and obtained the Bankruptcy Court's
authority to amend the credit agreement between W. R. Grace & Co.-
Conn. and Advanced Refining Technologies LLC to extend its
termination date to February 28, 2013.
Since 2001, Grace and Chevron Products Company, a division of
Chevron U.S.A. Inc., have held ART as a joint venture. Each of
Grace and Chevron USA currently holds a 50% equity interest in
ART. ART develops, manufactures and sells hydroprocessing
catalysts, which are used in the petroleum refining industry for
the removal of certain impurities from petroleum feedstock.
Grace and Chevron Capital Corporation, an affiliate of Chevron USA
have entered into separate, substantially identical credit
agreements with ART under which they each provide ART with a
separate $15 million revolving line of credit. The Grace ART
Credit Agreement expires on February 28, 2012.
The ART Credit Agreements provide financing to ART for working
capital requirements so that excess cash from ART's business
operations can be used to pay dividends to Grace and Chevron and
to fund ART growth without cash having to be tied up to fund
periodic working capital "spikes."
In 2012 and thereafter, ART expects to continue experiencing those
spikes in working capital requirements, and it, therefore, will
continue to require the existing lines of credit, particularly if
excess cash has been either distributed in dividends or used to
further invest in the ART joint venture, contends Laura Davis
Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington,
Delaware.
In view of the nature of ART's business operations and working
capital requirements, Grace and Chevron Capital have concluded
that it is more cost-effective to continue the existing lines of
credit than it would be for ART to hold excess cash in order to
meet fluctuations in working capital requirements if and when they
occur.
About W.R. Grace & Co.
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -
- http://www.grace.com/-- supplies catalysts and silica products,
especially construction chemicals and building materials, and
container products globally.
The company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace obtained confirmation of a plan co-proposed with the
Official Committee of Asbestos Personal Injury Claimants, the
Official Committee of Equity Security Holders, and the Asbestos
Future Claimants Representative. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. Implementation of the Plan has
been held up by appeals in District Court from various parties,
including a group of prepetition bank lenders and the Official
Committee of Unsecured Creditors.
District Judge Ronald Buckwalter on Jan. 31, 2012, entered an
order affirming the bankruptcy court's confirmation of W.R. Grace
& Co. and its debtor affiliates' Plan of Reorganization.
Bankruptcy Judge Judith Fitzgerald had approved the Plan on
Jan. 31, 2011.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
W.R. GRACE: Wins OK of 2nd Try to Tap PwC as Accountant
-------------------------------------------------------
The Bankruptcy Court approved W.R. Grace's renewed application for
an order amending its previous order authorizing the employment
and retention of PricewaterhouseCoopers LLP by waiving the
requirement that PwC bills activities in tenth of an hour units
and authorizing PwC to record and submit a summary time report
kept in one hour increments in its fee applications.
PwC serves as independent accountants and auditors to the Debtors.
On Nov. 14, 2011, W.R. Grace & Co. and its affiliates filed their
application asking the U.S. Bankruptcy Court for the District of
Delaware for an order amending its previous order authorizing the
employment and retention of PricewaterhouseCoopers LLP as
independent accountants and auditors to the Debtors by waiving the
requirement that PwC bill activities in tenth of an hour units and
authorizing PwC to record and submit a summary time report kept in
one hour increments in its fee applications, thereby, resulting in
substantial savings to the Debtors' bankruptcy estates. No party-
in-interest objected to the Application.
A hearing was held on the Application on December 19, 2011. At
the Hearing, the Bankruptcy Court stated that the Application
could be renewed in its current form in the event the U.S.
District Court for the District of Delaware confirmed the Debtors'
Plan of Reorganization. Thus, the Bankruptcy Court did not rule
on the Application at the Hearing, but continued the Application
to the January 23, 2012 omnibus hearing, and further continued the
Application to the February 27, 2012 omnibus hearing after the
January 23, 2012 omnibus hearing was cancelled.
On January 31, 2012, the District Court issued a memorandum
opinion and entered an order confirming the Debtors' Plan and
affirming and adopting in all respects this Court's findings of
fact and conclusions of law. Thus, at this time the Debtors
renewed the Application.
As previously reported, the Debtors assert that PwC's continued
compliance with the Six Minute Increments Requirement is an
additional expense for them because it is not the general practice
of PwC to keep detailed time records similar to those customarily
kept by restructuring attorneys so as to comply with the Six
Minute Increments Requirement. She says that to comply with the
Six Minute Increments Requirement, PwC has had to institute a
special timekeeping record system for all professionals and
paraprofessionals recording time concerning the Debtors' Chapter
11 Cases.
About W.R. Grace & Co.
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -
- http://www.grace.com/-- supplies catalysts and silica products,
especially construction chemicals and building materials, and
container products globally.
The company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace obtained confirmation of a plan co-proposed with the
Official Committee of Asbestos Personal Injury Claimants, the
Official Committee of Equity Security Holders, and the Asbestos
Future Claimants Representative. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. Implementation of the Plan has
been held up by appeals in District Court from various parties,
including a group of prepetition bank lenders and the Official
Committee of Unsecured Creditors.
District Judge Ronald Buckwalter on Jan. 31, 2012, entered an
order affirming the bankruptcy court's confirmation of W.R. Grace
& Co. and its debtor affiliates' Plan of Reorganization.
Bankruptcy Judge Judith Fitzgerald had approved the Plan on
Jan. 31, 2011.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
W.R. GRACE: Paid $19.4 Million to Executives in 2011
----------------------------------------------------
W.R. Grace & Co. disclosed in its February 24, 2012 Form 10-K
filing with the U.S. Securities and Exchange Commission for the
year ended December 31, 2011, that it paid a total of $19,491,126
to its executive officers:
Name Position Total Payment
---- -------- -------------
A. E. Festa Chairman and
Chief Executive Officer $9,365,995
H. La Force III Senior Vice President and
Chief Financial Officer $2,160,034
G. E. Poling President and
Chief Operating Officer $3,702,002
D. A. Bonham Vice President and
President Grace
Construction Products $2,205,761
M. A. Shelnitz Vice President, Secretary
and General Counsel $2,057,334
About W.R. Grace & Co.
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -
- http://www.grace.com/-- supplies catalysts and silica products,
especially construction chemicals and building materials, and
container products globally.
The company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace obtained confirmation of a plan co-proposed with the
Official Committee of Asbestos Personal Injury Claimants, the
Official Committee of Equity Security Holders, and the Asbestos
Future Claimants Representative. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. Implementation of the Plan has
been held up by appeals in District Court from various parties,
including a group of prepetition bank lenders and the Official
Committee of Unsecured Creditors.
District Judge Ronald Buckwalter on Jan. 31, 2012, entered an
order affirming the bankruptcy court's confirmation of W.R. Grace
& Co. and its debtor affiliates' Plan of Reorganization.
Bankruptcy Judge Judith Fitzgerald had approved the Plan on
Jan. 31, 2011.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
WALTER ENERGY: S&P Affirms 'BB-' Corporate Credit Rating
--------------------------------------------------------
Standard & Poor's Rating Services affirmed its ratings, including
the 'BB-' corporate credit rating, on Birmingham, Ala.-based
Walter Energy Inc. (Walter) and revised the outlook to stable from
positive.
"The rating affirmation and stable outlook reflect our view that
met coal prices will support credit metrics consistent with the
'BB-' rating, with adjusted debt to EBITDA around 3x and adjusted
funds from operations to total debt above 20%,' said Standard &
Poor's credit analyst Marie Shmaruk. "This reflects our
expectation that Walter will generate EBITDA of $800 million to
$900 million in 2012--roughly the same as in 2011. This is based
on our assumption that prices for high-quality met coal will
remain around the current benchmark levels--$200 to $220 per
metric ton--and that the company's costs, which were driven up by
operating issues, will moderate during the course of the year, and
that Walter will reduce debt only modestly as it reinvests its
available cash in the business. Risks to this assessment include
lower met coal demand in Asia, continued high costs, and further
operating disruptions."
"The rating on Walter reflects our assessment of the company's
business risk profile as 'weak' and financial risk profile as
'significant'. Although the company's acquisition of Western Coal
Corp. provides some end-market and operational diversity, the bulk
of earnings and cash flow still rely on met coal sales, which are
highly cyclical and volatile. In our view, relatively strong met
coal prices will support current credit metrics in the coming
quarters, but the company's significant debt levels, lower-than-
expected production, and completion of expansion plans will
delay credit improvements, as will recent disruptions at its
Alabama operations," S&P said.
"With operating disruptions reducing output and raising cash cost
per ton, the company's 2011 adjusted EBITDA was around $850
million compared with our expectations for $1.1 billion to $1.3
billion at the time of the Western Coal transaction. Adjusted debt
to EBITDA was about 3.0x in 2011 and we believe it will likely
remain in that area during the next year or so," S&P said.
"The ratings also take into consideration the difficult coal
mining conditions at Walter's Southern Appalachian operations; the
need to invest to replace and expand reserves; the permitting,
safety, and operational challenges inherent in coal mining; and
high post-acquisition debt levels. Still, the company possesses
high-quality met coal reserves and has benefited during the past
year from favorable met coal prices. Nonetheless, demand and
pricing for met coal has historically been volatile since it's
tied to steel production at integrated steel mills which is highly
cyclical. Adding to the price volatility is the fact that prices
are now contracted quarterly, as opposed to annually in the past,"
S&P said.
"The stable rating outlook reflects our expectation that Walter's
operating results and credit measures in 2012 should be consistent
with, or modestly better than, in 2011, given relatively strong
met coal prices and expected improved operating performance at its
Alabama operations. In light of our expectations for seaborne met
coal prices to be about $200 per ton and for costs, although
moderating somewhat, likely to remain high, we believe 2012
EBITDA will range from $800 million to $900 million. This would
result in adjusted leverage around 3.0x and adjusted FFO to total
debt below 30%, consistent with our expectations for the rating,"
S&P said.
"We could take a positive ratings action if the company reduces
debt and maintains adjusted leverage below 2.5x and adjusted FFO
to total debt above 30% on a sustained basis," Ms. Shmaruk
continued.
"We could lower the ratings if adjusted leverage increases to more
than 3x and remains at this level. This could result from an
unexpected material decline in met coal volumes or pricing, or a
significant operating disruption at one of the company's met coal
mines."
WCA WASTE: S&P Raises Rating to 'B+'; Outlook Stable
----------------------------------------------------
Standard & Poor's Ratings Services removed its ratings on Houston-
based WCA Waste Corp. (WCA) from CreditWatch, where S&P placed
them with developing implications on Dec. 23, 2011, and raising
them to 'B+' from 'B'. The outlook is stable.
"We also raised our rating on WCA's existing senior unsecured
notes to 'B' from 'B-', and assigned our 'B+' issue-level and '3'
recovery ratings to its proposed $375 million credit facilities.
The '3' recovery rating indicates our expectation of a meaningful
(50% to 70%) recovery in the event of a payment default. The
proposed credit facilities are composed of a $100 million
revolving credit facility due 2017 and a $275 million term loan B
due 2018," S&P said.
"The upgrade reflects our view that WCA's financial risk profile
will improve following the completion of the refinancing
transaction and that the company's new equity sponsor and
management will remain committed to financial policies
appropriate for the rating," said Standard & Poor's credit analyst
James Siahaan. "This would entail WCA keeping its total adjusted
debt to EBITDA below 5x and its funds from operations to adjusted
debt above 15%."
"A subsidiary of Macquarie Infrastructure Partners II (MIP II), a
fund managed by Sydney-based financial services company Macquarie
Group Ltd., is acquiring WCA. Macquarie is contributing $300
million of common equity to WCA's capital structure and has also
arranged a sale of WCA's North and South Carolina operations to
solid waste services company Waste Industries USA Inc. (a
portfolio company of Macquarie Infrastructure Partners, the
predecessor to MIP II). WCA is also in the process of tendering
its $175 million 7.50% senior unsecured notes and will fully
redeem its $99 million 5.00% payment-in-kind (PIK) convertible
preferred stock. We intend to withdraw our ratings on the
senior unsecured notes following expiry of the tender offer on
March 8, 2012. We estimate that, following the completion of the
refinancing transactions, WCA's debt leverage will be meaningfully
reduced, but still aggressive, with the pro forma total adjusted
debt to EBITDA ratio at roughly 4.6x, down from approximately 6.5x
as of Sept. 30, 2011. We had previously included the amount
of the preferred stock into our adjusted debt to EBITDA ratio
calculation," S&P said.
"The ratings on WCA reflect the company's narrow scope of
activities and limited geographic diversity, aggressive debt
leverage, exposure to construction and demolition cycles, and a
growth strategy that is dependent on debt-financed acquisitions.
Favorable overall industry characteristics, an experienced senior
management team that has a proven track record in acquisitions and
integration, and attractive operating margins only partially
offset these negative factors," S&P said.
"With pro forma annual revenues of more than $260 million, WCA is
a publicly owned solid waste management company that provides
collection, transfer, and disposal services. Its operations are
located predominantly in the south and southeast U.S., serving
about 393,000 commercial, industrial, and residential collection
customers across 12 states. WCA benefits from a solid
internalization of waste rate of about 68%," S&P said.
"WCA was formed in September 2000 when it acquired 32 separate
waste operations from Waste Management Inc. The company has grown
steadily, primarily through the 44 acquisitions it has completed
since its June 2004 initial public offering. The successful
incorporation of acquired assets into existing operations is an
important ratings factor, and we note that WCA has been effective
in integrating its acquired businesses. Its recent major
acquisitions include the operating subsidiaries of Live Earth LLC
in December 2009 for roughly $38 million and certain assets of
Emerald Waste Services LLC in February 2011 for approximately $46
million. We note that, in both of these cases, WCA funded a
substantial portion of the purchase price with common stock. The
ratings recognize WCA's potential to resume its acquisition-
oriented growth strategy over the next few years, although we
expect this to be pursued without stretching the financial risk
profile," S&P said.
"WCA has managed to maintain a positive pricing contribution to
revenues, at 2.3% of sales in the most recent quarter, despite
price competition on some municipal residential contracts. Volume
contribution to revenues softened sequentially in the fourth
quarter to negative 0.4% (not including the special waste and
commercial volumes which boosted results in the third quarter). We
expect both pricing and volumes to be relatively muted in 2012,
with prices trending higher later in the year," S&P said.
"We believe WCA's earnings prospects will remain steady due to the
essential nature of its services, typically stable volumes, some
pricing flexibility in certain markets, and the benefits it
derives from acquisitions. WCA's adjusted EBITDA margin for the
fiscal year ended Dec. 31, 2011, remained solid at 23%--one
percent lower that it was in 2010 due to higher fuel and disposal
costs along with a shift to more residential collections. The
December 2009 acquisition of Live Earth LLC's assets reduced WCA's
profitability because of pass-through revenues related to
transportation costs, as well as its quarterly internalization
rate, which, at 68%, is lower than the 2010's 73% rate," S&P said.
"We regard WCA's financial risk profile as 'aggressive',
reflecting the private ownership of its equity by new sponsor MIP
II, which is a closed-end 10-year fund. Pro forma for the
refinancing transaction, we expect total adjusted debt (including
capitalized operating leases and asset-retirement obligations on a
tax-adjusted basis) to EBITDA of about 4.6x and FFO to total debt
of about 15%. While WCA is inclined to pursue acquisition-oriented
growth, we believe that the earnings multiples it paid for these
acquisitions could be reasonable, mitigating the potential for
pressure on the financial risk profile. The absolute amount of pro
forma adjusted debt as of Dec. 31, 2011, was $295 million and
included adjustments pertaining to operating leases ($8.5 million)
and accrued closure and postclosure liabilities (tax-adjusted,
$9.3 million). We expect the company to redeem its 5% perpetual
preferred shares in the refinancing," S&P said.
"The outlook is stable," Mr. Siahaan continued, "reflecting our
view that WCA will not experience any unforeseen operating
challenges and that management will remain committed to preserving
sound financial policies by keeping total adjusted debt to EBITDA
below 5x and its FFO to adjusted debt ratio above 15%. Steady
revenue streams from acquired landfills and collection operations,
a decent market presence in the South, and contributions from
acquisitions should help diversify the company's service mix and
support operating results. However, if competitive pressures
contribute to significant deterioration in WCA's earnings or if a
debt-financed acquisition or an imprudent use of cash reduces
covenant cushions or meaningfully affects liquidity, we could
lower the ratings. Although we consider such a scenario to be
unlikely any time soon, this could occur if revenues were to
contract by 5% and EBITDA margins to compress by 2.5% in 2012."
WILCOX EMBARCADERO: Taps Hellenic Pacific to Manage Property
------------------------------------------------------------
Wilcox Embarcadero Associates, LLC, asks the U.S. Bankruptcy Court
for the Northern District of California for permission to employ
certain professionals utilized in the ordinary course of business.
The Debtor operates a commercial building, leasing warehouse,
wholesale, retail and office space located at 1001 22nd Ave.,
Oakland, California. The Debtor operates in the Bay Area and has
been in business for 10 years. The Debtor has no staff and
utilizes the services of Hellenic Pacific Management, Inc., a
property management firm, to manage the Debtor's property.
HPM, in the ordinary course of its business, handle non-bankruptcy
matters. The OCP provide services to the Debtor in matters that
are integral to the Debtor's business but only related to the
Chapter 11 case.
The Debtor seeks permission to continue to employ the OCP,
effective as of the Petition Date, without the necessity of the
OCP filing a formal application for employment and compensation.
Given the limited nature of the engagement, it would be burdensome
to both the Debtor and the Court to request the OCP to apply
separately for approval of its employment and compensation.
Additionally, and more importantly, the Debtor does not believe
that the OCP is a "professional" as that term is defined under
Section 327 of the Bankruptcy Code; however, out of an abundance
of caution, the Debtor requests the relief sought herein.
The Debtor proposes to pay, without formal application to the
Court by any OCP, 100% of the fees and disbursements to each of
the OCPs retained by the Debtor after submission to the Debtor of
an affidavit of disinterestedness, and upon the submission to the
Debtor of an appropriate invoice setting forth in reasonable
detail the nature of the services rendered after the Petition
Date, provided that the fees, excluding costs and disbursements,
do not exceed $3,000 per month or exceed an aggregate of $36,000
per OCP for any of the OCPs employed in the Chapter 11 case.
The Debtor reserves the right to supplement the list of OCPs, in
its sole discretion, from time to time as necessary to add or
remove OCPs without the need for any further hearing and without
the need to file individual retention applications for each.
About Wilcox Embarcadero Associates
Wilcox Embarcadero Associates, LLC, filed a Chapter 11 petition in
Oakland (Bankr. N.D. Calif. Case No. 12-40758) on Jan. 26, 2012.
Wilcox operates a commercial building, leasing warehouse,
wholesale, retail and office space. Wilcox operates in the Bay
Area and has been in business for 10 years. The Debtor says it is
a single asset real estate case.
Steele, George, Schofield & Ramos LLP represents the Debtor in its
restructuring efforts.
In its schedules, the Debtor disclosed $10.2 million in assets and
under $8.6 million in liabilities. The Debtor's property secures
an $8.55 million debt to Wells Fargo and Owens Mortgage Investment
Fund, LP.
The Debtor said it incurred financial difficulty when its primary
lender, the holder of the First Deed of Trust, refused to extend,
modify or refinance the loan. The Debtor is in negotiations with a
new lender to take out the lender, but needs more time to
accomplish this task.
Judge Roger L. Efremsky presides over the case.
WINDSOR PETROLEUM: S&P Cuts Rating on Secured Term Notes to 'B'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on Delaware-
incorporated Windsor Petroleum Transport Corp.'s $239.1 million
secured term notes due Jan. 15, 2021 ($224.1 million outstanding
as of Sept. 30, 2011) to 'B' from 'BB-'. "At the same time, we
placed the rating on CreditWatch with negative implications," S&P
said.
"The recovery rating remains unchanged at '4', indicating our
expectation of an average (30% to 50%) recovery of principal in
the event of a payment default," S&P said.
"The downgrade of the secured term notes reflects our expectation
of poor tanker market fundamentals, coupled with our estimate of
secondhand tanker values being lower than the current net debt
outstanding on the Pioneer," said Standard & Poor's credit analyst
Mark Habib.
"We believe tanker rates will remain weak through 2013 primarily
due to overcapacity and weak growth in crude oil transportation
demand, coupled with high fuel costs that reflect geopolitical
risk," he added.
"Windsor is earning a negative net margin on the vessel, drawing
on its reserves with just less than two years of liquidity
available, assuming conservative spot rates. Because of the low
likelihood of a near-term sale adequate to redeem the debt
allocable to the Pioneer, it likely will continue to trade on
spot. And because of our expectation for weak tanker rates through
2013, we believe the project will draw on the debt service reserve
fund, tightening liquidity and increasing both the future break-
even rate and the project's dependence on the terminal value of
its vessels for repayment of the final $57.1 million bullet on the
notes," S&P said.
"The negative implication of the CreditWatch reflects Windsor's
exposure to volatile spot charter rates with the Pioneer, and the
short-term risk of further charter terminations. If BP Shipping
provides notification in July 2012 that it will exercise its
termination options for the Purpose and the Pride vessels in 2013
and our outlook on the tanker market remains unchanged, we could
lower the project ratings further. In addition, we could lower the
rating if continued weak charter revenues, force draws on the
reserve fund and significantly increase the break-even rate going
forward," S&P said.
WYNDHAM WORLDWIDE: Moody's Rates Pref. Debt Shelf at '(P) Ba2'
--------------------------------------------------------------
Moody's Investors Service assigned a Baa3 rating to Wyndham
Worldwide Corporation's proposed $600 million five and ten year
senior unsecured notes that could be upsized. Wyndham's existing
Baa3 senior unsecured ratings were affirmed. The rating outlook is
stable. The net proceeds of the notes will used to fund the
repurchase of the company's existing $250 million, 9.875% notes
due 2014, and the partial repurchase of its $800 million 6% notes
due 2016 and its $250 million 7.375% notes due 2020, repay
borrowings under its revolving credit facility, and general
corporate purposes.
Ratings assigned:
Proposed $800 million senior unsecured 5 & 10 year notes at Baa3
Senior unsecured and preferred debt shelf at (P) Baa3 and (P) Ba2,
respectively
Ratings affirmed:
Senior unsecured notes at Baa3
RATINGS RATIONALE
Wyndham's Baa3 ratings consider that despite a $150 million
increase in total debt, the proposed transaction will extend debt
maturities and lower the company's overall interest costs.
Additionally, Moody's expects the increase in total debt resulting
from transaction will be absorbed by rising earnings over the next
year, and as a result, retained cash flow to net debt will remain
at about 24%.
The ratings continue to reflect Wyndham's leading market position
in each of its three business segments, the high margins and low
capital intensity of its fee for service hotel franchise and
vacation exchange and rentals segments that comprise around 50% of
adjusted EBITDA. The lower business risk profile of these
segments, help mitigate the higher risk profile of the timeshare
development and finance segment. The ratings consider Moody's view
that travel demand will push revenues (17% of total) and EBITDA
(22% of total) of the lodging segment up over the next twelve
months. The ratings also reflect the company's ability to generate
a high level of free cash flow that can support its shareholder
friendly financial policies, it's very good liquidity profile, and
Moody's expectation the company will manage its balance sheet in a
manner that preserves credit metrics near current levels.
Key credit concerns include an anemic macro-economic environment -
- particularly in Europe that could hurt earnings growth of
vacation rentals (17% of revenues), and sluggish growth in
timeshare development which may continue to limit growth in new
exchange members (16% of revenues). Collectively, Vacation
Exchange and Rentals comprise 36% of adjusted EBITDA. Additional
credit concerns include a financial policy that is moderately
aggressive, timeshare business risks - including high default
rates associated with timeshare consumer receivables, and a
reliance on the securitization market to recycle consumer
receivables so that capital can be made available for other
corporate objectives, including returns to shareholders.
The rating outlook is stable reflecting Moody's view that EBITDA
growth in the lodging segment will offset sluggish EBITDA growth
in Vacation Exchange and Rental and Vacation Ownership segments as
well as Moody's expectations the company will manage its cash flow
and balance sheet to maintain credit metrics near current levels,
will continue to manage the timeshare business for cash, and will
support its share repurchase program largely from free cash flow.
The stable outlook incorporates tolerance for a modest level of
acquisition activity.
Wyndham's ratings could be upgraded if retained cash flow to net
debt exceeds 30% and can be sustained at this higher level, the
company continues to effectively manage its timeshare business for
cash, and support its share repurchases largely from cash flow.
Ratings could be downgraded if Wyndham's stated debt to EBITDA
financial policy target becomes more aggressive, it's retained
cash flow to net debt drops below 15%, or if the company does not
maintain sufficient liquidity to support its corporate spending
objectives.
The principal methodology used in rating Wyndham Worldwide
Corporation was the Global Lodging & Cruise Industry Rating
Methodology published in December 2010.
Wyndham Worldwide Corporation (Wyndham) is one of the largest
hotel franchisors in the world and operates in three segments of
the hospitality industry: lodging, vacation exchange and rentals,
and vacation ownership. The company also develops and sells
vacation ownership (timeshare) intervals to individual consumers
and provides consumer financing in connection with these sales.
Wyndham generates annual revenues of about $4.2 billion.
XAVIER PS: Inexperience Costs Lawyer to Forfeit Fees
----------------------------------------------------
Accountant-turned-lawyer Edward Levy, Esq., and his firm, Edward
Levy, P.C., have been directed to disgorge pre-and post-petition
retainers in the amount of $36,000 received from Xavier PS, Inc.
and High Country Assets, Inc., and will forfeit all fees in the
Debtors' cases because of the firm's failure to disclose a second
retainer obtained post-petition and for applying both retainers to
fees without first filing a fee application and obtaining court
approval.
"Attorneys who venture into the world of chapter 11 without prior
experience or without associating with experienced counsel often
run afoul of [Bankruptcy Code] requirements, causing them to face
harsh consequences," Judge Elizabeth E. Brown said. "Mr. Levy is
one of these unfortunate attorneys.
Xavier PS and High Country Assets operate Servpro franchises.
They initially retained Mr. Levy as a business and financial
consultant to assist them in negotiating a restructured loan with
their primary lender, Wachovia SBA Lending, Inc. When settlement
discussions reached an impasse about one year later, Mr. Levy
filed a chapter 11 petition on behalf of the Debtors (Bankr. D.
Colo. Case Nos. 09-32324 and 09-32325) on Oct. 22, 2009. As
"small business debtors," as defined by 11 U.S.C. Sec. 101(51)(D),
the Debtors were required by Sec. 1121(e) to either file a plan or
obtain an extension of time to do so by Aug. 18, 2010, 300 days
after the petition date. Unfortunately, they did not meet this
deadline. Consequently, the United States trustee moved for and
obtained dismissal of the case.
Pre-bankruptcy, the Debtors had signed a fee agreement with Mr.
Levy's firm that provided for a $40,000 retainer. Following the
bankruptcy filing, Mr. Levy filed his firm's application for
employment and sought approval of his post-petition retainer,
which then had a balance of $30,000. The Court approved both the
employment and the retainer, but stated that the fees and costs
charged by the firm are subject to allowance or review by the
Court. Mr. Levy never requested an interim payment procedure to
allow periodic payments of fees and costs.
On June 28, 2010, Mr. Levy requested an additional $5,000 for his
fees. The Debtors responded by sending him $6,000 on July 1. Mr.
Levy deposited these funds into the firm's operating account. The
payment appeared in the disbursements section of the Debtors' July
2010 monthly report, but Mr. Levy did not file a disclosure, nor
did he request court approval until March 24, 2011.
Mr. Levy testified that he believed the carve-out provision in the
order permitting the Debtors to use Wachovia's Cash Collateral
allowed him to apply his retainers to his fees without the need
for a fee application or a court order allowing fees.
Mr. Levy also testified that this was the first case in which he
had received an additional post-petition retainer from a client in
a chapter 11 case and he was otherwise preoccupied at the time of
its receipt because of his daughter's serious health
complications. Mr. Levy also said it was his practice to only
file a final fee application at the end of a case.
"After changing careers to become a lawyer mid-life, Mr. Levy
testified that he began practicing in the bankruptcy field around
October, 2005. Previously, he had enjoyed a substantial and
sophisticated accounting practice that had exposed him to
workouts, management consulting for distressed companies, and
chapter 11 cases," Judge Brown said. "It was this background that
apparently drew the Debtors to him because they were initially
trying to work something out with their lenders and landlord.
Because of his experience as an accountant in bankruptcy cases,
Mr. Levy believed he had the necessary background to represent a
chapter 11 debtor on his own. He did not, however, have enough
experience as a bankruptcy attorney to appreciate all of the legal
requirements inherent in representing a debtor-in-possession. His
lack of experience is reflected not only in his failure to
disclose the additional retainer and to wait for court
authorization before applying the retainers, but it is also
exhibited in his failure to seek approval for the use of cash
collateral for over five months and his failure to either a file a
plan and disclosure statement or a motion requesting an extension
before the passing of the 300-day deadline applicable to these
small business debtors."
A copy of Judge Brown's Feb. 27, 2012 Order is available at
http://is.gd/PXDNTJfrom Leagle.com.
YELLOWSTONE MOUNTAIN: Sumpter Entitled Only to Return of Deposit
----------------------------------------------------------------
The U.S. Court of Appeals for the Ninth Circuit said Robert
Sumpter, whose membership in the exclusive Yellowstone Mountain
Club was rejected when the club's Chapter 11 plan was confirmed,
is entitled to a claim for $250,000, which is equivalent to the
deposit he paid. Mr. Sumpter believes he is entitled to a greater
sum for rejection damages, but the Ninth Circuit, in affirming
rulings by both the bankruptcy and district court, held that the
Membership Agreement clearly provides that it can be unilaterally
terminated by either party -- Mr. Sumpter can resign or the Club
can recall his membership "at any time for any or no reason
whatsoever." These provisions limit Mr. Sumpter's rejection
damages to the return of his deposit.
The case is ROBERT SUMPTER, Appellant, v. MARC S. KIRSCHNER,
Trustee of the Yellowstone Club Liquidating Trust, Appellee, No.
11-35368 (9th Cir.). The appellate panel consists of Circuit
Judges Mary M. Schroeder, Arthur Lawrence Alarcon, and Ronald M.
Gould. A copy of the Ninth Circuit's Feb. 27, 2012 Memorandum is
available at http://is.gd/1kXnlPfrom Leagle.com.
About Yellowstone Mountain
Located near Big Sky, Montana, Yellowstone Mountain Club LLC --
http://www.theyellowstoneclub.com/-- is a private golf and ski
community with more than 350 members, including Bill Gates and Dan
Quayle. The Company was founded in 1999.
Yellowstone Club and its affiliates filed for Chapter 11
bankruptcy (Bankr. D. Montana, Case No. 08-61570) on Nov. 10,
2008. The Company's owner affiliate, Edra D. Blixseth, filed
a separate Chapter 11 petition on March 27, 2009 (Case No.
09-60452).
Attorneys at Bullivant Houser Bailey PC and Bekkedahl & Green
PLLC represented Yellowstone. The Debtors hired FTI Consulting
Inc. and Ronald Greenspan as CRO. The official committee of
unsecured creditors were represented by Parsons, Behle and
Latimer; and James H. Cossitt, Esq., as counsel. Credit Suisse,
the prepetition first lien lender, was represented by Skadden,
Arps, Slate, Meagher & Flom.
In June 2009, the Bankruptcy Court entered an order confirming
Yellowstone's Chapter 11 Plan. Pursuant to the Plan, CrossHarbor
Capital Partners LLC acquired equity ownership in the reorganized
Club for $115 million.
* President Obama Defends Auto Bailout, Lashes Out at Critics
-------------------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that President Barack
Obama defended his administration's decision to bail out the U.S.
auto industry and lashed out at his critics by saying it is a
"load of you-know-what" to suggest he did so solely to pay back
unions for supporting him.
* Recent Small-Dollar & Individual Chapter 11 Filings
-----------------------------------------------------
In Re Borden Trucking, Inc.
dba Borden Logistics
Bankr. C.D. Calif. Case No. 12-13059
Chapter 11 Petition filed February 7, 2012
See http://bankrupt.com/misc/cacb12-13059.pdf
represented by: Michael Jay Berger, Esq.
E-mail:
michael.berger@bankruptcypower.com
In Re College of Nursing and Technology, Inc.
Bankr. C.D. Calif. Case No. 12-11202
Chapter 11 Petition filed February 7, 2012
See http://bankrupt.com/misc/cacb12-11202.pdf
represented by: Elaine Nguyen, Esq.
Weintraub & Selth APC
E-mail: elaine@wsrlaw.net
In Re Lucarelli's Executive Answering Service
Bankr. D. Conn. Case No. 12-30279
Chapter 11 Petition filed February 7, 2012
See http://bankrupt.com/misc/ctb12-30279.pdf
represented by: Noah J. Schafler, Esq.
Schafler & Camera
E-mail: noah@schaflerandcamera.com
In Re Suntricity Power Corporation
Bankr. D. Dela. Case No. 12-10431
Chapter 11 Petition filed February 7, 2012
See http://bankrupt.com/misc/deb12-10431p.pdf
See http://bankrupt.com/misc/deb12-10431c.pdf
represented by: John D. McLaughlin, Jr, Esq.
Ciardi Ciardi & Astin
E-mail: jmclaughlin@ciardilaw.com
In Re Advocates For Opportunity, Inc.
Bankr. S.D. Fla. Case No. 12-13019
Chapter 11 Petition filed February 7, 2012
See http://bankrupt.com/misc/flsb12-13019p.pdf
See http://bankrupt.com/misc/flsb12-13019c.pdf
represented by: Chad T. Van Horn, Esq.
E-mail: chad@brownvanhorn.com
In Re Joseph Wiley
Bankr. M.D. Ga. Case No. 12-40112
Chapter 11 Petition filed February 7, 2012
In Re Oscar Eason
Bankr. N.D. Ga. Case No. 12-53323
Chapter 11 Petition filed February 7, 2012
In Re Michael Chau
Bankr. D. Hawaii Case No. 12-00267
Chapter 11 Petition filed February 7, 2012
In Re Richard Robertson
Bankr. D. Idaho Case No. 12-00217
Chapter 11 Petition filed February 7, 2012
In Re Gavi International, Inc.
Bankr. N.D. Ill. Case No. 12-04269
Chapter 11 Petition filed February 7, 2012
See http://bankrupt.com/misc/ilnb12-04269.pdf
represented by: O Allan Fridman, Esq.
Law Office of O. Allan Fridman
E-mail: afridman@tds.net
In Re Reckon Plating, Inc.
Bankr. N.D. Ind. Case No. 12-10227
Chapter 11 Petition filed February 7, 2012
See http://bankrupt.com/misc/innb12-10227.pdf
represented by: Wesley N. Steury, Esq.
Burt, Blee, Dixon, Sutton & Bloom LLP
E-mail: wsteury@burtblee.com
In Re Dominic Carlone
Bankr. E.D. La. Case No. 12-10339
Chapter 11 Petition filed February 7, 2012
In Re Romeda, Inc.
dba Pump It Up - Franklin
Bankr. D. Mass. Case No. 12-11011
Chapter 11 Petition filed February 8, 2012
See http://bankrupt.com/misc/mab12-11011.pdf
represented by: John M. McAuliffe, Esq.
McAuliffe & Associates, P.C.
E-mail:
mcauliffeassociates@hotmail.com
In Re Rodney Sewell
Bankr. D. Md. Case No. 12-12027
Chapter 11 Petition filed February 7, 2012
In Re Green Papaya, Inc.
Bankr. D. Md. Case No. 12-12056
Chapter 11 Petition filed February 7, 2012
See http://bankrupt.com/misc/mdb12-12056.pdf
represented by: Christopher R. Wampler, Esq.
Wampler & Souder, LLC
E-mail: cwampler@wssfirm.com
In Re Desert Pines Family Health Centers
fba Valhalla Health Center
fdba Hermansen Chiropractic
Bankr. D. Nev. Case No. 12-11345
Chapter 11 Petition filed February 7, 2012
See http://bankrupt.com/misc/nvb12-11345p.pdf
See http://bankrupt.com/misc/nvb12-11345c.pdf
represented by: Adam P. Bowler, Esq.
Bogatz & Associates
E-mail: abowler@isbnv.com
In Re Majestic Sports Inc.
Bankr. E.D.N.Y. Case No. 12-70640
Chapter 11 Petition filed February 7, 2012
See http://bankrupt.com/misc/nyeb12-70640.pdf
represented by: Lawrence Morrison, Esq.
E-mail: morrlaw@aol.com
In Re Dommel Properties, LLC
Bankr. M.D. Pa. Case No. 12-00691
Chapter 11 Petition filed February 7, 2012
See http://bankrupt.com/misc/pamb12-00691.pdf
represented by: Leon P. Haller, Esq.
Purcell Krug and Haller
E-mail: lhaller@pkh.com
In Re Julio Santos Carrucini
Bankr. D. Puerto Rico Case No. 12-00870
Chapter 11 Petition filed February 7, 2012
In Re Luis Figueroa-Rivera
Bankr. D. Puerto Rico Case No. 12-00893
Chapter 11 Petition filed February 7, 2012
In Re Garry Franks
Bankr. M.D. Tenn. Case No. 12-01129
Chapter 11 Petition filed February 7, 2012
In Re Gary Watters
Bankr. M.D. Tenn. Case No. 12-01107
Chapter 11 Petition filed February 7, 2012
In Re Blueline Real Estate, LP
Bankr. S.D. Texas Case No. 12-31061
Chapter 11 Petition filed February 7, 2012
See http://bankrupt.com/misc/txsb12-31061.pdf
represented by: Joan Kehlhof, Esq.
E-mail: jkehlhof@whkllp.com
In Re Jose Ruiz
Bankr. S.D. Texas Case No. 12-70090
Chapter 11 Petition filed February 7, 2012
In Re Triple 8 Venture Corporation
dba Triple 8 Consulting
Bankr. S.D. Texas Case No. 12-31081
Chapter 11 Petition filed February 7, 2012
filed pro se
See http://bankrupt.com/misc/txsb12-31081.pdf
In Re Billy Abshier
Carol Abshier
Bankr. W.D. Texas Case No. 12-60152
Chapter 11 Petition filed February 7, 2012
In Re Reshma Grocery, Inc.
Bankr. W.D. Texas Case No. 12-50417
Chapter 11 Petition filed February 7, 2012
See http://bankrupt.com/misc/txwb12-50417.pdf
represented by: William R. Davis, Jr., Esq.
Langley & Banack, Inc.
E-mail: wrdavis@langleybanack.com
In Re Roshan Properties, Inc.
Bankr. W.D. Texas Case No. 12-50415
Chapter 11 Petition filed February 7, 2012
See http://bankrupt.com/misc/txwb12-50415.pdf
represented by: William R. Davis, Jr., Esq.
Langley & Banack, Inc.
E-mail: wrdavis@langleybanack.com
In Re Shawn & Minaz, Inc.
Bankr. W.D. Texas Case No. 12-50414
Chapter 11 Petition filed February 7, 2012
See http://bankrupt.com/misc/txwb12-50414.pdf
represented by: William R. Davis, Jr., Esq.
Langley & Banack, Inc.
E-mail: wrdavis@langleybanack.com
In Re PAK American Auto Collision, LLC
dba Maaco Auto Paint & Bodyworks
dba PAK and Sons Auto Collision
dba Maaco Collision Repair & Auto Painting
Bankr. E.D. Va. Case No. 12-10757
Chapter 11 Petition filed February 7, 2012
See http://bankrupt.com/misc/vaeb12-10757.pdf
represented by: Fenlene H. Edrington, Esq.
Law Office of J.D. Ngando, PLLC
E-mail: fedrington@jdnlawoffice.com
In Re Burditt Trucking, Inc.
Bankr. M.D. Ala. Case No. 12-80193
Chapter 11 Petition filed February 8, 2012
See http://bankrupt.com/misc/almb12-80193p.pdf
See http://bankrupt.com/misc/almb12-80193c.pdf
represented by: Eric B. Funderburk, Esq.
Funderburk & Lane
E-mail: ebf@fllaw2.com
In Re Mcmerita Burditt
Bankr. M.D. Ala. Case No. 12-80192
Chapter 11 Petition filed February 8, 2012
In Re 6920 Redfield LLC
Bankr. D. Ariz. Case No. 12-02220
Chapter 11 Petition filed February 8, 2012
See http://bankrupt.com/misc/azb12-02220.pdf
represented by: Chris D. Barski, Esq.
Barski Drake PLC
E-mail: cbarski@barskidrake.com
In Re Brian Hopkins
Bankr. D. Ariz. Case No. 12-02218
Chapter 11 Petition filed February 8, 2012
In Re Sleep Right, LLC
dba Quality Inn
Bankr. W.D. Ark. Case No. 12-70456
Chapter 11 Petition filed February 8, 2012
See http://bankrupt.com/misc/arwb12-70456.pdf
represented by: Stanley V. Bond, Esq.
E-mail: attybond@me.com
In Re Patricia Fittro
Bankr. C.D. Calif. Case No. 12-10522
Chapter 11 Petition filed February 8, 2012
In Re Peter Kleidman
Bankr. C.D. Calif. Case No. 12-11243
Chapter 11 Petition filed February 8, 2012
In Re Vardan Isayan
Bankr. C.D. Calif. Case No. 12-13094
Chapter 11 Petition filed February 8, 2012
In Re Robert Coreas
Bankr. N.D. Calif. Case No. 12-50978
Chapter 11 Petition filed February 8, 2012
In Re Theodore Madzey
Bankr. N.D. Calif. Case No. 12-41172
Chapter 11 Petition filed February 8, 2012
In Re Frank Meram
Bankr. S.D. Calif. Case No. 12-01707
Chapter 11 Petition filed February 8, 2012
In Re Thomas Wilson
Bankr. M.D. Ga. Case No. 12-50313
Chapter 11 Petition filed February 8, 2012
In Re David Kircher
Bankr. E.D. Mich. Case No. 12-42718
Chapter 11 Petition filed February 8, 2012
In Re GLV Products, LLC
Bankr. D. Nev. Case No. 12-11395
Chapter 11 Petition filed February 8, 2012
See http://bankrupt.com/misc/nvb12-11395.pdf
represented by: Joseph A. Scalia, II, Esq.
E-mail: joe@josephscalia.com
In Re William Hopper
Bankr. D. Nev. Case No. 12-11407
Chapter 11 Petition filed February 8, 2012
In Re Christopher Costantino
Bankr. D. N.J. Case No. 12-13093
Chapter 11 Petition filed February 8, 2012
In Re Mobad, Inc.
Bankr. E.D.N.Y. Case No. 12-70675
Chapter 11 Petition filed February 8, 2012
See http://bankrupt.com/misc/nyeb12-70675.pdf
represented by: Kevin Michael Castro, Esq.
E-mail: kclawinc@optonline.net
In Re Lonnie Layne
Bankr. M.D. Tenn. Case No. 12-01157
Chapter 11 Petition filed February 8, 2012
In Re El Paso Lighthouse Industries for the Blind and Handicapped
Bankr. W.D. Texas Case No. 12-30266
Chapter 11 Petition filed February 8, 2012
See http://bankrupt.com/misc/txwb12-30266p.pdf
See http://bankrupt.com/misc/txwb12-30266c.pdf
represented by: E. P. Bud Kirk, Esq.
E-mail: budkirk@aol.com
In Re O'Callahan's Catering Inc.
Bankr. W.D. Wash. Case No. 12-11135
Chapter 11 Petition filed February 8, 2012
See http://bankrupt.com/misc/wawb12-11135.pdf
represented by: John D. Nellor, Esq.
J. D. Nellor, PC
E-mail: jd@nellorlaw.com
In Re O'Callahan's of Idaho, Inc.
Bankr. W.D. Wash. Case No. 12-40724
Chapter 11 Petition filed February 8, 2012
See http://bankrupt.com/misc/wawb12-40724.pdf
represented by: John D. Nellor, Esq.
J. D. Nellor, PC
E-mail: jd@nellorlaw.com
In Re Pier 61 Inc.
dba Randy's Pier 61 Inc.
Bankr. W.D. Wash. Case No. 12-11144
Chapter 11 Petition filed February 8, 2012
See http://bankrupt.com/misc/wawb12-11144.pdf
represented by: Thomas D. Neeleman, Esq.
E-mail: courtmail@expresslaw.com
In Re Daniel Borges
Bankr. D. Ariz. Case No. 12-02317
Chapter 11 Petition filed February 9, 2012
In Re Jamal Elyazal
Bankr. C.D. Calif. Case No. 12-11709
Chapter 11 Petition filed February 9, 2012
In Re North Coast Propery Investment
Bankr. C.D. Calif. Case No. 12-10539
Chapter 11 Petition filed February 9, 2012
filed pro se
See http://bankrupt.com/misc/cacb12-10539.pdf
In Re California Organics, LLC
Bankr. N.D. Calif. Case No. 12-50999
Chapter 11 Petition filed February 9, 2012
filed pro se
See http://bankrupt.com/misc/canb12-50999.pdf
In Re Angelo DAmico
Bankr. M.D. Fla. Case No. 12-00750
Chapter 11 Petition filed February 9, 2012
In Re Mark Gladstein
Bankr. W.D. Ky. Case No. 12-30541
Chapter 11 Petition filed February 9, 2012
In Re Dante Ragasa
Bankr. D. N.J. Case No. 12-13182
Chapter 11 Petition filed February 9, 2012
In Re Pistol Pete's Beef N Beer, LLC
Bankr. D. N.J. Case No. 12-13186
Chapter 11 Petition filed February 9, 2012
See http://bankrupt.com/misc/njb12-13186.pdf
represented by: J. Eric Kishbaugh, Esq.
McCrink Kehler & McCrink
E-mail: ekishbaugh@mkmnjlaw.com
In Re Affordable Rentals, Inc.
Bankr. E.D.N.Y. Case No. 12-40905
Chapter 11 Petition filed February 9, 2012
filed pro se
See http://bankrupt.com/misc/nyeb12-40905.pdf
In Re Michael Mazzeo
Bankr. E.D.N.Y. Case No. 12-70718
Chapter 11 Petition filed February 9, 2012
In Re Marc OBrien
Bankr. E.D. N.C. Case No. 12-01042
Chapter 11 Petition filed February 9, 2012
In Re Ledford Tire & Trucking, Inc.
Bankr. W.D. N.C. Case No. 12-10115
Chapter 11 Petition filed February 9, 2012
See http://bankrupt.com/misc/ncwb12-10115.pdf
represented by: D. Rodney Kight, Jr., Esq.
Kight Law Office PC
E-mail: info@kightlaw.com
In Re WRW Enterprises, LLC
Bankr. W.D. Pa. Case No. 12-70112
Chapter 11 Petition filed February 9, 2012
See http://bankrupt.com/misc/pawb12-70112.pdf
represented by: Elsie R. Lampl, Esq.
E-mail: elampl@lampllawoffice.com
In Re Mario Garcia Castillo
Bankr. D. Puerto Rico Case No. 12-00946
Chapter 11 Petition filed February 9, 2012
In Re Roblex Aviation Inc.
dba Roblex Aviation Company Services Inc.
Bankr. D. Puerto Rico Case No. 12-00951
Chapter 11 Petition filed February 9, 2012
See http://bankrupt.com/misc/prb12-00951.pdf
represented by: Rafael Torres Alicea, Esq.
Plaza Carolina Station
E-mail: ramfis@caribe.net
In Re Chief Equipment Rental, Inc.
Bankr. M.D. Tenn. Case No. 12-01195
Chapter 11 Petition filed February 9, 2012
See http://bankrupt.com/misc/tnmb12-01195.pdf
represented by: Steven L. Lefkovitz, Esq.
Law Offices Lefkovitz & Lefkovitz
E-mail: slefkovitz@lefkovitz.com
In Re Mark Harrington
Bankr. M.D. Tenn. Case No. 12-01199
Chapter 11 Petition filed February 9, 2012
In Re Wenaco Terrace, L.L.C.
dba Withers Real Estate Group
Bankr. E.D. Texas Case No. 12-40345
Chapter 11 Petition filed February 9, 2012
See http://bankrupt.com/misc/txeb12-40345.pdf
represented by: Michael S. Mitchell, Esq.
DeMarco-Mitchell, PLLC
E-mail: mike@demarcomitchell.com
In Re Gary Gray
Bankr. W.D. Ark. Case No. 12-70491
Chapter 11 Petition filed February 10, 2012
In Re Brian Vasey
Bankr. C.D. Calif. Case No. 12-11329
Chapter 11 Petition filed February 10, 2012
In Re Jason Lee
Bankr. N.D. Calif. Case No. 12-51057
Chapter 11 Petition filed February 10, 2012
In Re Manuel Pallib
Bankr. N.D. Calif. Case No. 12-51056
Chapter 11 Petition filed February 10, 2012
In Re Continental Aviation Services Corp.
Bankr. M.D. Fla. Case No. 12-01880
Chapter 11 Petition filed February 10, 2012
See http://bankrupt.com/misc/flmb12-01880.pdf
represented by: David R. Softness, Esq.
David R. Softness, P.A.
E-mail: dsoftness@softnesslaw.com
In Re Carl Leong
Bankr. D. Mass. Case No. 12-40473
Chapter 11 Petition filed February 10, 2012
In Re Joseph Hickman
Bankr. S.D. Miss. Case No. 12-50267
Chapter 11 Petition filed February 10, 2012
In Re Blake Focus Enterprises, Unlimited 1
aka Stanley Blake
Bankr. D. Nev. Case No. 12-11527
Chapter 11 Petition filed February 10, 2012
filed pro se
See http://bankrupt.com/misc/nvb12-11527.pdf
In Re James Lucas
Bankr. D. N.J. Case No. 12-13360
Chapter 11 Petition filed February 10, 2012
In Re Lorna Palmer
Bankr. D. Nev. Case No. 12-11510
Chapter 11 Petition filed February 10, 2012
In Re Tom Ray
Bankr. D. Nev. Case No. 12-11526
Chapter 11 Petition filed February 10, 2012
In Re Elaine Lelekakis
Bankr. E.D.N.Y. Case No. 12-70735
Chapter 11 Petition filed February 10, 2012
In Re Lowell MHP LLC
Bankr. W.D. N.C. Case No. 12-30318
Chapter 11 Petition filed February 10, 2012
See http://bankrupt.com/misc/ncwb12-30318.pdf
represented by: James H. Henderson, Esq.
James H. Henderson PC
E-mail: henderson@title11.com
In Re TLC-Z Investment, L.L.C.
Bankr. D. Ore. Case No. 12-30826
Chapter 11 Petition filed February 10, 2012
See http://bankrupt.com/misc/orb12-30826.pdf
represented by: Leon Simson, Esq.
E-mail: leon.simson@tonkon.com
In Re Norbert Harenski
Bankr. W.D. Pa. Case No. 12-20653
Chapter 11 Petition filed February 10, 2012
In Re ATOM Instrument Corporation
dba Excitron Corporation
Bankr. S.D. Texas Case No. 12-31184
Chapter 11 Petition filed February 10, 2012
See http://bankrupt.com/misc/txsb12-31184.pdf
represented by: Melissa Anne Haselden, Esq.
Hoover Slovacek LLP
E-mail: Haselden@hooverslovacek.com
In Re William Dearing
Bankr. S.D. Texas Case No. 12-31182
Chapter 11 Petition filed February 10, 2012
In Re Karen Ford
Bankr. D. Wyo. Case No. 12-20094
Chapter 11 Petition filed February 10, 2012
In Re Randy Grothaus
Bankr. D. Ariz. Case No. 12-02516
Chapter 11 Petition filed February 13, 2012
In Re Thomas Culpepper
Bankr. D. Ariz. Case No. 12-02530
Chapter 11 Petition filed February 13, 2012
In Re Adina Zaharescu
Bankr. C.D. Calif. Case No. 12-11362
Chapter 11 Petition filed February 13, 2012
In Re An Tai Chinese Noodles Co., Inc.
Bankr. C.D. Calif. Case No. 12-14966
Chapter 11 Petition filed February 13, 2012
See http://bankrupt.com/misc/cacb12-14966.pdf
represented by: Paul M. Brent, Esq.
Steinberg Nutter & Brent
E-mail: snb300@aol.com
In Re Carlos Lopez
Bankr. C.D. Calif. Case No. 12-14995
Chapter 11 Petition filed February 13, 2012
In Re Lisette Carnet
Bankr. C.D. Calif. Case No. 12-11358
Chapter 11 Petition filed February 13, 2012
In Re Robert Dornaus
Bankr. N.D. Calif. Case No. 12-10394
Chapter 11 Petition filed February 13, 2012
In Re Linda Voloshin
Bankr. D. Conn. Case No. 12-30320
Chapter 11 Petition filed February 13, 2012
In Re Rinda Farnham
Bankr. D. Conn. Case No. 12-50257
Chapter 11 Petition filed February 13, 2012
In Re Faith Bible Ministry of Trinity Triune Tabernacle Inc.
Bankr. M.D. Fla. Case No. 12-01772
Chapter 11 Petition filed February 13, 2012
See http://bankrupt.com/misc/flmb12-01772.pdf
represented by: Jaimon H. Perry, Esq.
The Perry Law Group, LLC
E-mail: jaimon@perrylaw-fla.com
In Re Morris Tillman
Bankr. N.D. Ill. Case No. 12-05084
Chapter 11 Petition filed February 13, 2012
In Re Sibyl Titus
Bankr. D. Nev. Case No. 12-50285
Chapter 11 Petition filed February 13, 2012
In Re Tommy Mowrer
Bankr. D. Nev. Case No. 12-11593
Chapter 11 Petition filed February 13, 2012
In Re Stacey Jane's, LLC
Bankr. D. N.H. Case No. 12-10416
Chapter 11 Petition filed February 13, 2012
See http://bankrupt.com/misc/nhb12-10416.pdf
represented by: Marc L. Van De Water, Esq.
Van De Water Law Offices, P.L.L.C.
E-mail: lawyer@vlawusa.com
In Re A Casa Do Pao Queijo, Inc.
Bankr. D. N.J. Case No. 12-13413
Chapter 11 Petition filed February 13, 2012
See http://bankrupt.com/misc/njb12-13413.pdf
represented by: David L. Stevens, Esq.
Scura, Mealey, Wigfield & Heyer LLP
E-mail: dstevens@scuramealey.com
In Re Averitt Logging & Trucking, Inc.
Bankr. S.D. Ala. Case No. 12-00525
Chapter 11 Petition filed February 15, 2012
See http://bankrupt.com/misc/alsb12-00525.pdf
represented by: James L. Day, Esq.
Von G. Memory, P.A.
E-mail: jlday@memorylegal.com
In Re Bill Sakes
Bankr. C.D. Calif. Case No. 12-15338
Chapter 11 Petition filed February 15, 2012
In Re Param Singh
Bankr. C.D. Calif. Case No. 12-15438
Chapter 11 Petition filed February 15, 2012
In Re Patrick Knoell
Bankr. D. Colo. Case No. 12-12474
Chapter 11 Petition filed February 15, 2012
In Re Clarence Wingate
Bankr. M.D. Fla. Case No. 12-00913
Chapter 11 Petition filed February 15, 2012
In Re Michael Picazio
Bankr. S.D. Fla. Case No. 12-13653
Chapter 11 Petition filed February 15, 2012
In Re Moises Morales
Bankr. S.D. Fla. Case No. 12-13701
Chapter 11 Petition filed February 15, 2012
In Re Eagle Lake Outfitters, Inc.
Bankr. D. Maine Case No. 12-10120
Chapter 11 Petition filed February 15, 2012
See http://bankrupt.com/misc/meb12-10120.pdf
represented by: William J. Smith, Esq.
E-mail: wjsmithlo@myfairpoint.net
In Re Innovation Inc.
Bankr. D. Maine Case No. 12-20116
Chapter 11 Petition filed February 15, 2012
See http://bankrupt.com/misc/meb12-20116.pdf
represented by: Richard R. Regan, Esq.
Moncure & Barnicle
E-mail: rregan@mb-law.com
In Re Irie Cafe II, LLC
dba Irie Cafe
Bankr. D. Md. Case No. 12-12579
Chapter 11 Petition filed February 15, 2012
See http://bankrupt.com/misc/mdb12-12579.pdf
represented by: Craig A Butler, Esq.
The Butler Law Group, PLLC
E-mail: cab.esq@gmail.com
In Re Giant of Roxbury, Inc.
dba Giant Liquor Mart
Bankr. D. Mass. Case No. 12-11153
Chapter 11 Petition filed February 15, 2012
See http://bankrupt.com/misc/mab12-11153.pdf
represented by: David B. Madoff, Esq.
Madoff &Khoury LLP
E-mail: madoff@mandkllp.com
In Re LandTrust No. 993
aka F. Kelly Landolphi, Trustee
Bankr. D. Mass. Case No. 12-11155
Chapter 11 Petition filed February 15, 2012
See http://bankrupt.com/misc/mab12-11155.pdf
represented by: Loring B. Lincoln, Esq.
E-mail: fabiuslincoln@aol.com
In Re Mark Augusta
Bankr. D. Mass. Case No. 12-40525
Chapter 11 Petition filed February 15, 2012
In Re Nestor Nebeb
Bankr. D. Nev. Case No. 12-11709
Chapter 11 Petition filed February 15, 2012
In Re Tic Tac Toy, LLC
dba Learning Express Toys
Bankr. D. N.J. Case No. 12-13604
Chapter 11 Petition filed February 15, 2012
See http://bankrupt.com/misc/njb12-13604.pdf
represented by: Leonard S. Singer, Esq.
Zazella & Singer
E-mail: zandsattys@aol.com
In Re OSW26 Corp.
Bankr. E.D.N.Y. Case No. 12-41060
Chapter 11 Petition filed February 15, 2012
See http://bankrupt.com/misc/nyeb12-41060p.pdf
See http://bankrupt.com/misc/nyeb12-41060c.pdf
represented by: Christopher James Baumger, Esq.
Baum & Bailey, P.C.
E-mail: cbaum@baumbaileylaw.com
In Re Bodre Cut And Color Corporationn
Bankr. S.D. N.Y. Case No. 12-10621
Chapter 11 Petition filed February 15, 2012
See http://bankrupt.com/misc/nysb12-10621.pdf
represented by: Nestor Rosado, Esq.
E-mail: neslaw2@msn.com
In Re Paul Quantano
Bankr. S.D. N.Y. Case No. 12-10616
Chapter 11 Petition filed February 15, 2012
In Re Unified Mechanical Inc.
Bankr. W.D.N.Y. Case No. 12-20237
Chapter 11 Petition filed February 15, 2012
See http://bankrupt.com/misc/nyeb12-20237.pdf
represented by: David S. Stern, Esq.
Elliott, Stern, & Calabrese
E-mail: dstern@phetersonstern.com
In Re Granite Mortgage, Inc.
Bankr. W.D. N.C. Case No. 12-50158
Chapter 11 Petition filed February 15, 2012
See http://bankrupt.com/misc/ncwb12-50158.pdf
represented by: Andrew T. Houston, Esq.
Moon Wright & Houston, PLLC
E-mail: ahouston@mwhattorneys.com
In Re Todd Investment Properties, Inc.
Bankr. N.D. Ohio Case No. 12-50460
Chapter 11 Petition filed February 15, 2012
See http://bankrupt.com/misc/ohnb12-50460.pdf
represented by: Kathryn A. Belfance, Esq.
E-mail: kb@rlbllp.com
In Re Alaa Noeman
Bankr. W.D. Tenn. Case No. 12-21670
Chapter 11 Petition filed February 15, 2012
In Re John Osborne
Bankr. S.D. Texas Case No. 12-31233
Chapter 11 Petition filed February 15, 2012
In Re John Hanley
Bankr. W.D. Wash. Case No. 12-11435
Chapter 11 Petition filed February 15, 2012
In Re Willis Perkins
Bankr. D. Wyo. Case No. 12-20103
Chapter 11 Petition filed February 15, 2012
*********
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 ***