/raid1/www/Hosts/bankrupt/TCR_Public/120312.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, March 12, 2012, Vol. 16, No. 71
Headlines
17315 COLLINS: Wants to Retain RiesbergLaw for Vacca Suit
4KIDS ENTERTAINMENT: Nantahala Ceases to Hold 5% Equity Stake
AES EASTERN: Court OKs Barclays Capital as Financial Advisor
AES EASTERN: Court OKs Freed Maxick as Independent Auditor
ALLISON TRANSMISSION: Moody's Raises Corp. Family Rating to 'B1'
AMERICAN TOWER: S&P Rates $500MM New Notes, $1BB Credit at 'BB+'
APPLETON PAPERS: Supply Agreement with Domtar Takes Effect
AS SEEN ON TV: Jeffrey Schwartz Resigns as Director
ACCENTIA BIOPHARMA: Board OKs Compensation Arrangement for Execs.
ACCENTIA BIOPHARMA: Five Directors Elected at Annual Meeting
ALLIED IRISH: In Talks Regarding Voluntary Severance Program
AVENTINE RENEWABLE: Widens Net Loss to $43.4-Mil. in 2011
AXION INTERNATIONAL: Files Amendment No. 2 to Form S-1 Prospectus
BE AEROSPACE: Moody's Rates $500MM Sr. Unsecured Notes at 'Ba2'
BEACON POWER: Plan Filing Exclusivity Expires May 27
BEYOND OBLIVION: Judge Agrees to Expedite $2.4MM Sale Bid Hearing
BIOVEST INTERNATIONAL: Eight Directors Elected at Annual Meeting
BLOCKBUSTER INC: PwC Providing Accounting Advice
BROBECK PHLEGER: Paul Hastings Wants Suit Out of Bankruptcy Court
CAESARS ENTERTAINMENT: Bank Debt Trades at 10% Off
CANO PETROLEUM: Files for Chapter 11 to Sell to NBI for $47.5MM
CAPITAL ONE: Moody's Keeps '(P)Ba1' Preferred Shelf Rating
CARDINAL REAL ESTATE: Files for Chapter 11 Bankruptcy Protection
CARIBBEAN RESTAURANTS: Moody's Raises CFR to 'B3' from 'Caa2'
CATALENT PHARMA: Moody's Rates New $400MM Term Loan at 'Ba3'
CELL THERAPEUTICS: Incurs $62.4 Million Net Loss in 2011
CHARLESTON ASSOCIATES: Can Access Bank of America Cash Collateral
CHRIST HOSPITAL: Group Meets to Discuss Hospital's Case
CIRCLE STAR: To Acquire Lands for Oil Exploration in Kansas
CITIZENS CORP: Gary Murphey Selected as Chapter 11 Trustee
CITRUS MEMORIAL: Moody's Cuts Rating on $39.4MM Bonds to 'Ba3'
CLEAR CHANNEL: Bank Debt Trades at 20% Off in Secondary Market
CMS ENERGY: Fitch Rates $300-Mil. Sr. Unsecured Notes at 'BB+'
COMMERCIAL VEHICLE: Board Approves 2012 Bonus Plan
COMMUNITY HEALTH: Moody's Rates $750MM Notes B3, Keeps B1 CFR
COMMUNITY HEALTH: S&P Retains 'B' Rating on $2-Bil. Senior Notes
COMMUNITY MEMORIAL: Cash Collateral Hearing Today
COMMUNITY MEMORIAL: Has $5-Mil. Buyout Offer From McLaren
COMPREHENSIVE CARE: Gets 11% Rate Increase on At-Risk Program
CONCHO RESOURCES: Moody's Rates New Senior Notes Due 2022 at 'B1'
CONCHO RESOURCES: S&P Rates $500MM Senior Unsecured Notes at 'BB+'
CONTINENTAL AIRLINES: Moody's Rates Class B Certificates at 'Ba2'
CONVERSION SERVICES: Friedman LLP Resigns as Accountant
COVANTA HOLDINGS: Fitch Assigns 'BB' Issuer Default Rating
COVANTA HOLDINGS: Moody's Affirms 'Ba2' CFR, Rates Sr Notes 'Ba3'
CRESTWOOD HOLDINGS: Moody's Rates New $400MM Term Loan at 'Caa1'
CULLIGAN INT'L: Weighs Chapter 11 Filing; Hires Professionals
CUMULUS MEDIA: Canyon Capital Raises Ownership to 15.7%
CYTOCORE INC: Palex CEO, 2 Others Named to Board
DCP MIDSTREAM: Moody's Says Profile Consistent of 'Ba1' Rating
DEE ALLEN: Case Trustee Amends Terms of Ray Quinney Employment
DEE ALLEN: Case Trustee Hires Reid Collins as Litigation Counsel
DEEP DOWN: Buys Back 800,000 Shares at $0.06 Apiece
DIPPIN' DOTS: Will Have Chief Restructuring Officer
DJO FINANCE: Moody's Rates $230-Mil. 2nd Lien Notes at 'B2'
DOMTAR CORPORATION: DBRS Assigns New Debt Issuance at 'BB'
DOWNEY REGIONAL: Emerges From Chapter 11 Protection
DYNEGY INC: Examiner Finds Prepetition Transfers Fraudulent
DYNEGY HOLDINGS: Plan Outline Hearing Today
DYNEGY HOLDINGS: Seek Dismissal of U.S. Bank Suit
DYNEGY HOLDINGS: Rejects 2 Patriot Coal Supply Contracts
EASTBRIDGE INVESTMENT: To Offer $30MM Shares Under Incentive Plan
EASTMAN KODAK: Wins OK to Tap FTI for Transitional Services
EASTMAN KODAK: Proposes E&Y as Tax Services Provider
EASTMAN KODAK: Proposes PwC as Auditor, Tax Adviser
EASTMAN KODAK: Court OKs Sullivan & Cromwell as Lead Counsel
EASTMAN KODAK: Court OKs Young Conaway as Counsel
ECOSPHERE TECHNOLOGIES: Incurs $323,700 Net Loss in 4th Quarter
EDIETS.COM INC: Thomas Hoyer's Resignation Takes Effect Early
EGPI FIRECREEK: Inks Linear Form Pact with Success Oil and CUBO
EMMIS COMMUNICATIONS: To Hold Special Meeting on April 2
ENER1 INC: Chapter 11 Plan to Be Declared Effective Wednesday
EOS PREFERRED: To Sell $178.4 Million Bank and Company Loans
EV ENERGY: Moody's Rates $200-Mil. Sr. Unsecured Notes at 'B3'
EVERGREEN SOLAR: Calare Group Wants to Buy Empty Building
FIFTH THIRD: Moody's Gives '(P)Ba1' Preferred Shelf Rating
FIRST DATA: Plans to Offer $850 Million Senior Secured Notes
FREDDIE MAC: Faulted With FHFA on Loan Servicers Oversight
FIRST NIAGARA: Moody's Issues Summary Credit Opinion
FOXCO ACQUISITION: Moody's Ups CFR to B2, Sr Notes Rating to Caa1
FREEZE LLC: Exclusive Plan Filing Period Extended to April 11
FUEL DOCTOR: Enters Into Agency Agreement with Gulf Caravan
GATEHOUSE MEDIA: Bank Debt Trades at 71% Off in Secondary Market
GATEHOUSE MEDIA: Incurs $22.2 Million Net Loss in 2011
GENERAL AUTO: Hires Tonkon Torp as Bankruptcy Counsel
GENERAL AUTO: Homestreet, Portland Dispute Cash Use
GENERAL AUTO: Sec. 341 Creditors' Meeting Set for April 3
GETTY PETROLEUM: Has Stipulation on Transition of Properties
GMX RESOURCES: Incurs $206.4 Million Net Loss in 2011
GMX RESOURCES: To Exchange 1.6MM Shares with $4.3MM Conv. Notes
GORDIAN MEDICAL: Medicare Agrees to Pay Majority of Claims
GRUBB & ELLIS: Judge Glenn Approves Request to Auction Assets
GRUBB & ELLIS: Brokers Move to Rival Firm After Bankruptcy Filing
HERTZ CORPORATION: Fitch to Rate $250MM Sr. Unsec. Notes at 'BB-'
HAWKER BEECHCRAFT: Bank Debt Trades at 27% Off
HAWKER BEECHCRAFT: Bank Debt Trades at 26% Off
HOSTESS BRAND: Names Gregory Rayburn as Chief Executive Officer
HOTEL INDIGO: Files for Chapter 11 Bankruptcy Protection
HOVNANIAN ENTERPRISES: Incurs $18.3MM Net Loss in Jan. 31 Qtr.
IMEDICOR INC: Incurs $553,600 Net Loss in Sept. 30 Quarter
IMPLANT SCIENCES: Bruce Bower Resigns as SVP, Sales & Marketing
IMUA BLUEHENS: Chapter 11 Case Dismissed Due to Lack of Funds
INTERTAPE POLYMER: Reports $8.9 Million Net Earnings in 2011
J.C. PENNEY: S&P Cuts Corp. Credit Rating to 'BB'; Outlook Stable
JEFFERSON COUNTY: 3-Day Hearing in April on Creditor Payments
JER/JAMESON: Has Until May 22 to Decide on Unexpired Leases
JER/JAMESON: Professional Claims Bar Date Set for March 20
JER/JAMESON: Ashby & Geddes Approved as Bankruptcy Counsel
JER/JAMESON: Has Until June 22 to Propose Chapter 11 Plan
JER/JAMESON: Files Schedules of Assets and Liabilities
JOHN D. OIL: Files Schedules of Assets and Liabilities
K2 PURE SOLUTIONS: Moody's Cuts Rating on $121.5MM Loan to 'Caa1'
KINDER MORGAN: Fitch Places 'BB+' IDR on Rating Watch Negative
KM ASSOCIATES: Authorized to Retain Gianola Barnum as Counsel
KM ASSOCIATES: Can Employ Deborah Herbert as Accountant
KM ASSOCIATES: Can Employ Brian Riffle as Accountant
KOLORFUSION INT'L: Suspending Filing of Reports with SEC
LINWOOD FURNITURE: Files for Chapter 11 Bankruptcy Protection
LPATH INC: Raises $9.3 Million in Equity Financing
M/I HOMES: Fitch Affirms Issuer Default Rating at 'B'
MAQ MANAGEMENT: Wants Authority to Access $241,000 DIP Financing
MEDIA GENERAL: In Talks with Lenders, Delays 2011 Form 10-K
MF GLOBAL: SIPA Trustee Opposes Bar Date Extension for Sangani
MF GLOBAL: Singapore Liquidators Update on Interim Distribution
MIT HOLDING: To Restate 2011 Financial Reports
MILLERS FIRST: A.M. Best Downgrades FSR to 'C++'
MIRION TECHNOLOGIES: Moody's Rates CFR, $225MM New Debt at 'B1'
MOHEGAN TRIBAL: S&P Lowers Issuer Credit Rating From 'SD' to 'D'
MOHEGAN TRIBAL: Closes Exchange Offers and Consent Solicitations
MOHEGAN TRIBAL: Completes Debt Refinancing Transactions
MOMENTIVE SPECIALTY: Has $29MM Loans Maturing Next Year
MONEY TREE: Creditors Committee Taps Greenberg Traurig as Counsel
MONEY TREE: Committee Taps HGH Associates as Financial Advisors
MONEY TREE: Files Schedules of Assets and Liabilities
MONEY TREE: Parties-in-Interest Withdraw Plea to Transfer Venue
MONEYGRAM INT'L: Reports $59.4 Million Net Income in 2011
MONMOUTH EXCAVATORS: Meeting to Form Creditors' Panel on March 23
MONTANA ELECTRIC: Regulator Can't Intervene in Bankruptcy Case
MORGANS HOTEL: Incurs $87.9 Million Net Loss in 2011
MUSCLEPHARM CORP: Issues $587,500 Notes, 39.2 Million Warrants
NATIONAL AUTOMOTIVE: A.M Best Cuts Issuer Credit Rating to "bb"
NEBRASKA BOOK: Submits 2nd Amended Plan of Reorganization
NEXSTAR BROADCASTING: Incurs $11.9 Million Net Loss in 2011
NAVISTAR INTERNATIONAL: Incurs $140MM Net Loss in Jan. 31 Qtr.
NEW CITY BANK: Closed; FDIC Pays Out Insured Deposits
NORTHAMPTON GENERATING: Taps Dilworth Paxson as Bond Counsel
NORTHCORE TECHNOLOGIES: Executes New Contract Commerce Client
OILSANDS QUEEST: Receives Court OK of C$7MM Sale of Eagles Assets
OILSANDS QUEST: Incurs $4.2 Million Net Loss in Jan. 31 Quarter
OPPENHEIMER PARTNERS: Court OKs CBIZ MHM as Financial Advisor
OPPENHEIMER PARTNERS: Final Hearing on Cash Use Set for April 18
PARK-OHIO INDUSTRIES: Moody's 'B2' CFR Not Impacted by FRS Deal
PINNACLE AIRLINES: Ted Christie Resigns as Chief Financial Officer
PFF BANCORP: Creditors Get Judge Go Signal to Vote on Plan
PIONEER NATURAL: Fitch Rates $1.25-Bil. Sr. Facility at 'BB+'
POPULAR INC: Moody's Issues Summary Credit Opinion
PRETIUM PACKAGING: Moody's Lowers Corp. Family Rating to 'Caa1'
PROTECTION ONE: S&P Lowers Corporate Credit Rating to 'B'
PRECISION OPTICS: Grants 200,200 Stock Options to D&Os
PRESSURE BIOSCIENCES: Nasdaq Panel OKs Continued Listing Request
QIMONDA AG: Judge Dismisses IP Suit Against LSI
QUALITY DISTRIBUTION: Equity Offering No Effect on Moody's B3 CFR
RACE POINT: Moody's Affirms 'Ba2' Rating; Outlook Stable
RENEGADE HOLDINGS: Attorneys General Object to Exit Plan
SAND SPRING: Hearing for Equity Committee Appointment on March 22
SAHARA TOWNE: Files for Chapter 11 in Las Vegas
SCI REAL ESTATE: Liquidating Plan Outline Hearing Set for March 14
SELECT TREE FARMS: Files for Chapter 11 in Buffalo, New York
STANADYNE CORP: S&P Affirms 'CCC+' Corporate Credit Rating
SEQUENOM INC: Incurs $22.2 Million Net Loss in 2011
SFVA INC: To Liquidate All Assets Under Chapter 7
SWIFT TRANSPORTATION: Moody's Rates $1.27-Bil. Facilities at 'B1'
SOUTHERN PRODUCTS: Board OKs Entry Into Account Receivables Pact
SKINNY NUTRITIONAL: To Issue Add'l $305,000 Convertible Notes
SPRING POINTE: Sets 5-Yr. Period Under Plan to Sell Utah Property
STRATEGIC AMERICAN: Successfully Drills Well in Trinity Bay
TEMPLE BAPTIST: Files for Chapter 11 Bankruptcy Protection
THE RUINS: Voluntary Chapter 11 Case Summary
THERMOENERGY CORP: Enters Into Agreement to Dissolve BTCC
THOMPSON CREEK: Moody's Cuts Corporate Family Rating to 'B3'
TRAILER BRIDGE: Scott Fernandez No Longer CCO
TRAVELPORT INC: Bank Debt Trades at 14% Off in Secondary Market
TRIBUNE CO: Bank Debt Trades at 34% Off in Secondary Market
TRIDENT MICROSYSTEMS: Incurs $44.2-Mil. Net Loss in 4th Quarter
VAIL RESORTS: Lowered Earnings Guidance No Impact on Ratings
VERSO PAPER: Moody's Assigns B2 Rating to $345MM Sr Secured Notes
WATERLOO RESTAURANT: Files for Chapter 11 in Dallas
WOONSOCKET, RI: Fitch Cuts Rating on $117MM Bonds to 'BB-'
XEROX CORP: Moody's Gives '(P)Ba1' Preferred Shelf Rating
* Moody's Says Outlook for US Mortgage Insurers Changed to Neg
* Moody's Says Canadian Provinces Consolidating Finances in 2012
* Moody's Says Not-Profit Hospital Consolidation Trend Positive
* 2nd Cir. Appoints Nancy Lord as E.D.N.Y. Bankruptcy Judge
* BOND PRICING -- For Week From Feb. 27 to March 2, 2012
*********
17315 COLLINS: Wants to Retain RiesbergLaw for Vacca Suit
---------------------------------------------------------
17315 Collins Avenue, LLC, asks the U.S. Bankruptcy Court for
authorization to employ Barbara J. Riesberg and the law firm of
RiesbergLaw as special litigation counsel, nunc pro tunc to the
Petition Date.
Prior to the Petition Date, the Debtor was party to a litigation
with Davide Vacca, a former unit owner, before the Circuit Court
of the 11th Judicial Circuit in and for Miami-Dade County,
Florida, Case No. 08-56988. On May 27, 2011, final judgment was
entered in the State Court Action in favor of Vacca in the total
amount of $120,112. On July 15, 2011, the Debtor filed a
notice of appeal with respect to the State Court Action, which is
currently pending before the Third District Court of Appeals.
The Debtor has selected RiesbergLaw as special litigation counsel
in connection with the Appeal and any litigation that may ensue.
The firm has represented the Debtor throughout the State Court
Action and the Appeal, and is therefore intimately familiar with
the relating facts and issues. In addition, the Firm has
extensive experience and knowledge in the area of commercial
litigation and appellate practice and is well qualified to advise
the Debtor with regard to these matters.
The Debtor anticipates that RiesbergLaw will:
a) prepare and file certain supplements to the record on
appeal;
b) prepare and file an initial brief and a reply brief, as
well as review and analyze the responsive brief filed by
Vacca, including research relating thereto;
c) prepare for and attend oral argument; and
d) advise the Debtor concerning the foregoing as well as any
strategic matters to be considered throughout the appeal and
following disposition thereof.
RiesbergLaw's current customary hourly rates, subject to change
from time to time, are:
Partners $350 per hour
Associates $200 per hour
Paraprofessionals $125 per hour
Barbara J. Riesberg, Esq., submits that RiesbergLaw is a
"disinterested person" as such term is defined in Section 101 (14)
of the Bankruptcy Code, as modified by Section 1107(b).
About 17315 Collins Avenue
17315 Collins Avenue LLC owns and operates Sole on the Ocean, a
luxury, beach-front condominium-hotel located in Sunny Isles
Beach, Florida. 17315 Collins filed for Chapter 11 bankruptcy
protection (Bankr. S.D. Fla. Case No. 12-10631) on Jan. 10, 2012.
WaveStone Properties LLC owns 100% of the membership interests in
the Debtor and has no other businesses or assets. Thomas Feeley
is the managing member of WaveStone.
The Debtor disclosed $41,313,070 in assets and $40,169,567 in
liabilities in its schedules.
4KIDS ENTERTAINMENT: Nantahala Ceases to Hold 5% Equity Stake
-------------------------------------------------------------
In an amended Schedule 13D filed with the U.S. Securities and
Exchange Commission, Nantahala Capital Management, LLC, disclosed
that, as of March 2, 2012, it beneficially owns 614,476 shares of
common stock of 4Kids Entertainment Inc. representing 4.5% of the
shares outstanding. Nantahala previously reported beneficial
ownership of 719,315 common shares. A full-text copy of the latest
filing is available for free at http://is.gd/u2M4VH
About 4Kids Entertainment
New York-based 4Kids Entertainment, Inc., dba 4Kids, is an
entertainment and media company specializing in the youth oriented
market, with operations in these business segments: (i) licensing,
(ii) advertising and media broadcast, and (iii) television and
film production/distribution. The parent entity, 4Kids
Entertainment, was organized as a New York corporation in 1970.
4Kids filed for bankruptcy protection under Chapter 11 of the
Bankruptcy Code to protect its most valuable asset -- its rights
under an exclusive license relating to the popular Yu-Gi-Oh!
series of animated television programs -- from efforts by the
licensor, a consortium of Japanese companies, to terminate
the license and force 4Kids out of business.
4Kids and affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y.
Lead Case No. 11-11607) on April 6, 2011. Kaye Scholer LLP is the
Debtors' restructuring counsel. Epiq Bankruptcy Solutions, LLC,
is the Debtors' claims and notice agent. BDO Capital Advisors,
LLC, is the financial advisor and investment banker. EisnerAmper
LLP fka Eisner LLP serves as auditor and tax advisor. 4Kids
Entertainment disclosed $78,397,971 in assets and $86,515,395 in
liabilities as of the Chapter 11 filing.
Hahn & Hessen LLP serves as counsel to the Official Committee of
Unsecured Creditors. Epiq Bankruptcy Solutions LLC as its
information agent for the Committee.
The Consortium consists of TV Tokyo Corporation, which owns and
operates a television station in Japan; ASATSU-DK Inc., a Japanese
advertising company; and Nihon Ad Systems, ADK's wholly owned
subsidiary. The Consortium is represented by Kyle C. Bisceglie,
Esq., Michael S. Fox, Esq., Ellen V. Holloman, Esq., and Mason
Barney, Esq., at Olshan Grundman Frome Rosenzweig & Wolosky LLP,
in New York.
In January 2012, the bankruptcy judge ruled in favor of 4Kids,
deciding that the Yu-Gi-Oh! property license agreement between the
Debtor and the licensor was not effectively terminated prior to
the bankruptcy filing. Following the ruling, 4Kids entered into a
settlement where it would receive $8 million to end the dispute
over its valuable Yu-Gi-Oh! property.
AES EASTERN: Court OKs Barclays Capital as Financial Advisor
------------------------------------------------------------
AES Eastern Energy, L.P., et al., won bankruptcy court approval to
employ Barclays Capital Inc. as their financial advisors nunc pro
tunc to the Petition Date.
As reported in the Jan. 27, 2212 edition of the Troubled Company
Reporter, Barclays previously assisted in evaluating the Debtors'
liquidity situation, capital structure alternatives, and
recapitalization opportunities. Postpetition, Barclays will,
among other things, (1) provide general business and financial
analyses of the Debtors; (2) evaluate the current capitalization
of the Debtors and its requirements for liquidity based on the
Debtors' business plan; (3) evaluate the Debtors' debt capacity
and alternative capital structures; (4) jointly with the Debtors,
develop and maintain a long term financial model customized for
the Debtors' needs to accurately reflect the Debtors' business
conditions; and (5) assist the Debtors in identifying, developing,
and evaluating potential candidates for a "transfer transaction"
and soliciting those which Barclays and the Debtors have agreed
may be appropriate for a potential Transaction.
Judge Kevin Carey's order clarifies that:
-- Barclays will be paid, for its services, a monthly fee
consisting of $250,000 per month for January 2012 through
April 2012 and $125,000 for May 2012 through December 2012.
-- Barclays will only earn a transaction fee equal to $2,000,000
if during the term of its employment, a transfer of the
Somerset Generating Station located in Barker, New York, and
the Cayuga Generating Section located in Lansing, New York,
occurs to a new owner.
-- 50% of the Monthly Fees incurred from the Petition Date
through the date of the closing of the Qualifying Transfer
will be credited against the Transaction Fee, unless Barclays
succeeds in procuring at least one additional "qualified bid"
for the Somerset Plant or the Cayuga Plan, in which case there
will be no Monthly Fee Credit.
-- In the event the two plants are not transferred together, the
Transaction Fee will be prorated, with 80% of the Transaction
Fee payable upon the closing of a Qualifying Transfer of the
Somerset Plant and 20% of the Transaction Fee payable upon the
closing of a Qualifying Transfer of the Cayuga Plant, with the
Monthly Fee Credit calculated in accordance with the
proration.
Barclays is also entitled to reimbursement by the Debtors for
reasonable expenses in connection with its services.
The Debtors, after consultation with the Official Committee of
Unsecured Creditors, are permitted, in their discretion, to
terminate the Barclays Engagement Letter at any time after
Aug. 31, 2012.
About AES Eastern
Ithaca, New York-based AES Eastern Energy, L.P., either directly
or indirectly, control six coal-fired electric generating plants
located in New York State. Currently, the Debtors actively
operate two of the six power plants and sell the electricity
generated by those plants into the New York wholesale power market
to utilities and other intermediaries under short-term agreements
or directly in the spot market.
AES Eastern Energy and 13 affiliates filed for Chapter 11
bankruptcy (Bankr. D. Del. Case Nos. 11-14138 through 11-14151) on
Dec. 30, 2011. Lawyers at Weil, Gotshal & Manges LLP and
Richards, Layton & Finger, P.A., are legal counsel to AES Eastern
Energy and affiliates. Barclays Capital is serving as investment
banker and financial advisor. Kurtzman Carson Consultants is the
claims and noticing agent. AES Eastern Energy estimated
$100 million to $500 million in assets and $500 million to
$1 billion in debts. The petition was signed by Peter Norgeot,
general manager.
Gregory A. Horowith, Esq., and Robert T. Schmidt, Esq., at Kramer,
Levin, Naftalis & Frankel LLP; and William T. Bowden, Esq.,
Benjamin W. Keenan, Esq., and Karen B. Skomorucha, Esq., at Ashby
& Geddes, P.A., serve as counsel to the Creditors Committee. FTI
Consulting Inc. is the financial advisor.
AES Eastern Energy prevailed over opposition and obtained
authorization to hold a March 26 auction for the two operating
power plants. Under a deal reached prepetition, the Debtor would
turn the two operating facilities over to debt holders in exchange
for debt, absent higher and better offers.
AES EASTERN: Court OKs Freed Maxick as Independent Auditor
----------------------------------------------------------
Judge Kevin Carey authorized AES Eastern Energy, L.P., et al., to
employ Freed Maxick CPA, P.C., as their independent auditor nunc
pro tunc to Jan. 31, 2012.
The firm is tasked to perform an audit of the Debtors'
consolidated financial statements for the year ended Dec. 31,
2011. To the extent necessary, and upon written request by AES
Eastern, Freed Maxick will also audit the consolidated financial
statements of AES NY, LLC, the general partner of the Company.
Freed Maxick will also conduct an audit of the financial
statements of the Retirement Benefit Plan for AES NY Employees for
the year ended Dec. 31, 2011.
J. Michael Ervin, a director of the firm, attests that Freed
Maxick is a "disinterested person" as that term is defined in
Section 101(14) of the Bankruptcy Code, as modified by Section
1107(b) of the Bankruptcy Code.
As reported in the Feb. 7, 2012 edition of the Troubled Company
Reporter, Freed Maxick charges for services on these hourly rates:
Industry Specialist $425
Director $395
Senior Manager $190-$305
Manager $150-$170
Senior Accountant $100-$149
Staff Accountant $90-$100
Administrative $75
The firm will also be reimbursed by the Debtors for necessary and
reasonable expenses related to its services.
About AES Eastern
Ithaca, New York-based AES Eastern Energy, L.P., either directly
or indirectly, control six coal-fired electric generating plants
located in New York State. Currently, the Debtors actively
operate two of the six power plants and sell the electricity
generated by those plants into the New York wholesale power market
to utilities and other intermediaries under short-term agreements
or directly in the spot market.
AES Eastern Energy and 13 affiliates filed for Chapter 11
bankruptcy (Bankr. D. Del. Case Nos. 11-14138 through 11-14151) on
Dec. 30, 2011. Lawyers at Weil, Gotshal & Manges LLP and
Richards, Layton & Finger, P.A., are legal counsel to AES Eastern
Energy and affiliates. Barclays Capital is serving as investment
banker and financial advisor. Kurtzman Carson Consultants is the
claims and noticing agent. AES Eastern Energy estimated
$100 million to $500 million in assets and $500 million to
$1 billion in debts. The petition was signed by Peter Norgeot,
general manager.
Gregory A. Horowith, Esq., and Robert T. Schmidt, Esq., at Kramer,
Levin, Naftalis & Frankel LLP; and William T. Bowden, Esq.,
Benjamin W. Keenan, Esq., and Karen B. Skomorucha, Esq., at Ashby
& Geddes, P.A., serve as counsel to the Creditors Committee. FTI
Consulting Inc. is the financial advisor.
AES Eastern Energy prevailed over opposition and obtained
authorization to hold a March 26 auction for the two operating
power plants. Under a deal reached prepetition, the Debtor would
turn the two operating facilities over to debt holders in exchange
for debt, absent higher and better offers.
ALLISON TRANSMISSION: Moody's Raises Corp. Family Rating to 'B1'
----------------------------------------------------------------
Moody's Investors Service raised Allison Transmission, Inc.'s
Corporate Family and Probability of Default ratings to B1 from B2.
In a related action, Moody's also raised the ratings of Allison's
existing secured bank credit facilities to Ba3 from B1, and
existing senior unsecured notes to B3 from Caa1, and assigned a
Ba3 rating to the senior secured extended term loan facility. The
Speculative Grade Liquidity Rating was affirmed at SGL-2. The
rating outlook is stable.
The following rating were raised:
Corporate Family Rating, to B1 from B2;
Probability of Default, to B1 from B2;
Senior secured revolving credit facility, to Ba3 (LGD3, 40%) from
B1 ( LGD3, 37%);
Existing senior secured term loan, to Ba3 (LGD3, 40%) from B1 (
LGD3, 37%);
Senior unsecured 11% notes due 2015, to B3 (LGD6, 91%) from Caa1
(LGD-5, 89%);
Senior unsecured 7.125% notes due 2019, to B3 (LGD6, 91%) from
Caa1 (LGD-5, 89%);
Speculative Grade Liquidity rating of SGL-2
The following rating was assigned:
Senior secured extended term loan, Ba3 (LGD-3, 40%), pari passu
with existing senior secured term loan;
Ratings Rationale
The raising of Allison's Corporate Family Rating to B1 recognizes
the company's stronger than expected operating performance in 2011
combined with the recent redemption of $200 million in senior
unsecured notes. These achievements have resulted in credit
metrics which exceed previously established thresholds for the
assigned rating. Allison's competitive position as the leader in
manufacturing commercial vehicle automatic transmissions along
with gradually improving commercial vehicle production in North
America are expected to support the assigned rating over the
intermediate term.
Following the redemption of the senior unsecured notes in February
2012, Moody's estimates Allison's pro forma debt/EBITDA (inclusive
of Moody's standard adjustments) for 2011 approximates 4.7x.
Allison recently announced an initial public offering of
approximately $500 million of common stock. However, the net
proceeds of the offering will go to selling shareholders, which
include affiliates of The Carlyle Group and Onex Corporation, the
company's equity sponsors.
Allison's core market is in providing automatic transmissions for
Class 4 through 8 commercial vehicles in North America. Growth in
the company's markets is predicated on growth in largely non long-
haul highway markets, buses, motor homes, off-highway markets, and
military vehicles. While offering some diversity, these markets
are cyclical and are driven by other factors such as municipal
budgets and military spending. Moody's expects the gradually
recovering economy in the U.S., and passenger and operator safety
requirements to support modest revenue growth over the near-term.
The SGL-2 Speculative Grade liquidity rating reflects Moody's
anticipation that Allison will maintain a good liquidity profile
supported by strong cash balances and free cash flow generation
over the next twelve months. Cash balances as of December 31, 2011
were $314 million. About $200 million of the cash balance was used
for redemption and transaction expenses related to the company's
senior unsecured notes. Moody's expects Allison to be free cash
flow positive over the near-term as commercial vehicle demand
gradually recovers. There is modest required amortization under
the outstanding term loans over the coming twelve months.
Liquidity support also is provided by Allison's secured revolving
credit facility which had approximately $369 million of undrawn
availability, less outstanding letters of credit of $30.8 million,
as of December 31, 2011. With the recent term loan amendment the
maturity date of approximately $800 million of commitments was
extended to August 2017, the remaining amount of the term loan
facility (approximately $1.8 billion) matures in August 2014. The
principal financial covenant is a total senior secured leverage
ratio test. While covenant cushions will likely reduce over the
coming months, the company is expected to have sufficient cushion
to maintain operating flexibility.
The stable outlook anticipates that Allison's credit metrics will
continue to be supported by the company's strong competitive
position as a supplier of automatic transmissions. The pace of
recovery in commercial vehicle unit volumes in North America is
expected to continue at a gradual pace. Yet, Allison's strong EBIT
margin of about 20% is expected to be largely maintained over the
intermediate term.
The rating or outlook would be favorably affected if Debt/EBITDA
approaches 3.5x or if further improvement in margins results in
EBITA/Interest being consistently above 3.5x.
The rating or rating outlook would be adversely impacted if
renewed economic pressures, or an inability to contain costs were
to result in a deterioration in EBIT margins below 17%, if for any
reason EBITA/Interests were to fall back below 2.0x or if
Debt/EBITDA were to increase above 5.0x, or if the company's
liquidity profile were to weaken.
The principal methodology used in rating Allison Transmission,
Inc. was the Global Automotive Supplier Industry Methodology
published in January 2009. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
Allison Transmission, Inc., headquartered in Indianapolis, IN,
designs and manufactures automatic transmissions for commercial
and military vehicles. Revenues in 2011 were roughly $2.2 billion.
AMERICAN TOWER: S&P Rates $500MM New Notes, $1BB Credit at 'BB+'
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' issue-level
rating and '3' recovery rating to Boston-based American Tower
Corp.'s proposed $500 million senior notes and its existing
$1 billion revolving credit due 2017. The company intends to use
the proceeds from the new notes to repay borrowings under the
revolving credit facilities, which currently have $1.325 billion
outstanding.
The 'BB+' corporate credit rating and stable outlook on American
Tower remain unchanged.
"The ratings on American Tower reflect the strong profitability
and promising prospects of its wireless tower leasing business,
which Standard & Poor's expects will generate higher net free cash
flow after modest capital expenditure needs. Despite these
favorable business risk characteristics, which we consider
supportive of American Tower's investment-grade business risk
profile, the company's aggressive financial policy limits the
ratings. While management targets a leverage ratio in the 3x-5x
range (or about the 4x-6x area, including our adjustments), we
believe the company is not likely to consistently operate at the
low end of this guidance, in light of its continued commitment to
return capital to shareholders through stock repurchases, coupled
with required REIT distributions," S&P said.
ratings list
American Tower Corp.
Corporate Credit Rating BB+/Stable/--
New Ratings
American Tower Corp.
Senior Unsecured
$500 mil notes BB+
Recovery Rating 3
$1 bil revolving cred fac due 2017 BB+
Recovery Rating 3
APPLETON PAPERS: Supply Agreement with Domtar Takes Effect
----------------------------------------------------------
Appleton Papers Inc. previously announced that it had entered into
a Supply Agreement with Domtar Paper Company LLC and Domtar A.W.
LLC. The effectiveness of the Supply Agreement was subject to
decision making bargaining with representatives of Local 266 of
the United Steelworkers Union.
Appleton and the Union have completed that decision making
bargaining, and the Supply Agreement became effective on March 8,
2012.
The historic 15-year supply deal is valued at more than $3 billion
over the life of the agreement.
About Appleton Papers
Appleton, Wisconsin-based Appleton Papers Inc. --
http://www.appletonideas.com/-- produces carbonless, thermal,
security and performance packaging products. Appleton has
manufacturing operations in Wisconsin, Ohio, Pennsylvania, and
Massachusetts, employs approximately 2,200 people and is 100%
employee-owned. Appleton Papers is a 100%-owned subsidiary of
Paperweight Development Corp.
The Company's balance sheet at Oct. 2, 2011, showed
$638.30 million in total assets, $764.66 million in total
liabilities, $101.06 million in redeemable common stock, $139.94
million in accumulated deficit and a $87.47 million accumulated
other comprehensive loss.
* * *
Appleton Papers carries a 'B' corporate credit rating, with stable
outlook, from Standard & Poor's. IT has a 'B2/LD' probability of
default rating from Moody's.
AS SEEN ON TV: Jeffrey Schwartz Resigns as Director
---------------------------------------------------
Jeffrey Schwartz, a member of As Seen On TV, Inc.'s Board of
Directors, advised the company that he was resigning from the
board of directors, effectively immediately.
About As Seen on TV
Clearwater, Fla.-based As Seen On TV, Inc., is a direct response
marketing company. It identifies, develops, and markets consumer
products.
The Company reported a net loss of $10.20 million on $3.35 million
of revenue for the nine months ended Dec. 31, 2011, compared with
a net loss of $1.22 million on $848,941 of revenue for the same
period during the prior year.
The Company's balance sheet at Dec. 31, 2011, showed
$13.27 million in total assets, $32.73 million in total
liabilities, all current, and a $19.46 million total stockholders'
deficiency.
EisnerAmper LLP, in Edison, New Jersey, expressed substantial
doubt about the Company's ability to continue as a going concern,
following the Company's results for the fiscal year ended
March 31, 2011. The independent auditors noted of the Company's
recurring losses from operations and negative cash flows from
operations.
ACCENTIA BIOPHARMA: Board OKs Compensation Arrangement for Execs.
-----------------------------------------------------------------
The Board of Directors of Accentia Biopharmaceuticals, Inc.,
approved the compensation arrangements for the named officers of
the Company as a result of an annual compensation review by the
Board and its Compensation Committee. However, those arrangements
will be contingent on, and not commence until, the Company and its
majority-owned subsidiary, Biovest International, Inc., has raised
at least an aggregate cumulative total of $4.0 million in new
financing:
* Francis E. O'Donnell, Jr. M.D., the Company's Executive
Chairman will receive an increase to his base salary from
$1.00 to $74,379 per year and a cash bonus of $38,150 for
fiscal year ending Sept. 30, 2012.
* Garrison J. Hasara, CPA, the Company's Acting Chief Financial
Officer and Controller will receive an increase to his base
salary from $181,342 to $196,342 per year. He will receive
an additional $15,000 base salary increase if he becomes the
Company's Chief Financial Officer when the Board of Director
considers such matter later in the year.
* Samuel S. Duffey, Esq., the Company's President and Chief
Executive Officer, will receive an increase to his base
salary from $206,321 to $212,511 per year and a cash bonus of
$109,000 for fiscal year ending Sept. 30, 2012.
In addition, on Feb. 29, 2012, the Company granted stock options
to purchase the following number of shares of the Company's common
stock: Dr. O'Donnell (300,000 shares), Mr. Duffey (600,000
shares), and Mr. Hasara (100,000 shares). Those options were
granted under the Company's 2010 Equity Incentive Plan at an
exercise price of $0.44 per share and immediately vested upon the
grant date.
About Accentia Biopharmaceuticals
Headquartered in Tampa, Florida, Accentia Biopharmaceuticals, Inc.
(PINK: "ABPI") -- http://www.Accentia.net/-- is a biotechnology
company that is developing Revimmune as a system of care for the
treatment of autoimmune diseases. Through subsidiary, Biovest
International, Inc., it is developing BiovaxID as a therapeutic
cancer vaccine for treatment of follicular non-Hodgkin?s lymphoma
(FL) and mantle cell lymphoma (MCL). Through subsidiary,
Analytica International, Inc., it conducts a health economics
research and consulting business, which it market to the
pharmaceutical and biotechnology industries, using its operating
cash flow to support its corporate administration and product
development activities.
Accentia BioPharmaceuticals and nine affiliates filed for
Chapter 11 protection (Bankr. M.D. Fla. Lead Case No. 08-17795) on
Nov. 10, 2008. Accentia emerged from bankruptcy on Nov. 17, 2012,
after receiving confirmation of a reorganization plan on Nov. 2,
2010.
The Company's balance sheet at Dec. 31, 2011, showed $5.6 million
in total assets, $90.0 million in total liabilities, and a
stockholders' deficit of $84.4 million.
As reported in the TCR on Dec 22, 2011, Cherry, Bekaert & Holland,
L.L.P., in Tampa, Fla., expressed substantial doubt about Accentia
Biopharmaceuticals' ability to continue as a going concern,
following the Company's results for the fiscal year ended
Sept. 30, 2011. The independent auditors noted that the Company
incurred cumulative net losses of approximately $63.9 million
during the two years ended Sept. 30, 2011, and had a working
capital deficiency of approximately $29.0 million at Sept. 30,
2011.
ACCENTIA BIOPHARMA: Five Directors Elected at Annual Meeting
------------------------------------------------------------
At the annual meeting of Accentia Biopharmaceuticals, Inc.'s
shareholders on March 7, 2012, shareholders elected five persons
to serve as directors of the Company to hold office until the
annual meeting in 2013 or until their successors are duly elected
and qualified. The directors are:
(1) Francis E. O'Donnell, Jr.;
(2) Edmund C. King;
(3) David M. Schubert;
(4) Christopher C. Chapman; and
(5) William S. Poole.
In addition, the shareholders ratified the Company's appointment
of Cherry, Bekaert & Holland, L.L.P., as the Company's independent
registered public accounting firm for the fiscal year ending
Sept. 30, 2012.
About Accentia Biopharmaceuticals
Headquartered in Tampa, Florida, Accentia Biopharmaceuticals, Inc.
(PINK: "ABPI") -- http://www.Accentia.net/-- is a biotechnology
company that is developing Revimmune as a system of care for the
treatment of autoimmune diseases. Through subsidiary, Biovest
International, Inc., it is developing BiovaxID as a therapeutic
cancer vaccine for treatment of follicular non-Hodgkin?s lymphoma
(FL) and mantle cell lymphoma (MCL). Through subsidiary,
Analytica International, Inc., it conducts a health economics
research and consulting business, which it market to the
pharmaceutical and biotechnology industries, using its operating
cash flow to support its corporate administration and product
development activities.
Accentia BioPharmaceuticals and nine affiliates filed for
Chapter 11 protection (Bankr. M.D. Fla. Lead Case No. 08-17795) on
Nov. 10, 2008. Accentia emerged from bankruptcy on Nov. 17, 2012,
after receiving confirmation of a reorganization plan on Nov. 2,
2010.
The Company's balance sheet at Dec. 31, 2011, showed $5.6 million
in total assets, $90.0 million in total liabilities, and a
stockholders' deficit of $84.4 million.
As reported in the TCR on Dec 22, 2011, Cherry, Bekaert & Holland,
L.L.P., in Tampa, Fla., expressed substantial doubt about Accentia
Biopharmaceuticals' ability to continue as a going concern,
following the Company's results for the fiscal year ended
Sept. 30, 2011. The independent auditors noted that the Company
incurred cumulative net losses of approximately $63.9 million
during the two years ended Sept. 30, 2011, and had a working
capital deficiency of approximately $29.0 million at Sept. 30,
2011.
ALLIED IRISH: In Talks Regarding Voluntary Severance Program
------------------------------------------------------------
Allied Irish Banks, p.l.c.'s talks with the Department of Finance
on a voluntary severance programme have determined that, as
required under the bank's partnership principles with IBOA, a
consultation process will begin immediately with trade union
representatives. Full details on the launch of the programme, its
terms and how it will operate will be announced in early April on
conclusion of this consultation process. The programme will
incorporate provisions for actuarially reduced early retirement
and voluntary redundancy. In relation to redundancy, the terms
being discussed are consistent with Government parameters.
The Company met with the union executive and the Company looks
forward to a speedy conclusion to this process.
The programme forms an important part of AIB's return to
sustainable profitability, allowing the bank to focus on its
customers and support Ireland's economic recovery.
The objective of this voluntary programme is to reduce the
Company's staff cost base by c. EUR170m in a full year. This
equates to a reduction of c. 2,500 in the Company's overall staff
numbers. It is expected that around half of those departures will
be finalized in 2012.
AIB's objective is that redundancies will be achieved on a
voluntary basis. The bank is committed to reduce staff costs by
c. EUR170m and therefore, if the Company does not achieve its
objectives with this programme, the Company will need to consider
other options in due course.
David Duffy, AIB CEO said: "We will work hard to ensure that the
reduction in staff numbers is achieved on a voluntary basis and
there will be as much consultation and dialogue with staff and
their representatives as is needed. I would like to thank staff
for their commitment and professionalism, in these challenging and
difficult times.
"We aim to implement a severance package that is fair to people at
all levels in the bank, while reflecting the very difficult
financial position that AIB is in and the huge taxpayer support on
which we continue to rely. I am confident that AIB will achieve
sustainable profitability with a reduced cost base essential to
delivering this recovery."
AIB will not be making any further public comment until the
consultation process with staff representatives is concluded.
About Allied Irish Banks
Allied Irish Banks, p.l.c. -- http://www.aibgroup.com/-- is a
major commercial bank based in Ireland. It has an extensive
branch network across the country, a head office in Dublin and a
capital markets operation based in the International Financial
Services Centre in Dublin. AIB also has retail and corporate
businesses in the UK, offices in Europe and a subsidiary company
in the Isle of Man and Jersey (Channel Islands).
Since the onset of the global and Irish financial crisis, AIB's
relationship with the Irish Government has changed significantly.
As at Dec. 31, 2010, the Government, through the National Pension
Reserve Fund Commission ("NPRFC"), held 49.9% of the ordinary
shares of the Company (the share of the voting rights at
shareholders' general meetings), 10,489,899,564 convertible non-
voting ("CNV") shares and 3.5 billion 2009 Preference Shares. On
April 8, 2011, the NPRFC converted the total outstanding amount of
CNV shares into 10,489,899,564 ordinary shares of AIB, thereby
increasing its holding to 92.8% of the ordinary share capital.
In addition to its shareholders' interests, the Government's
relationship with AIB is reflected through formal and informal
oversight by the Minister and the Department of Finance and the
Central Bank of Ireland, representation on the Board of Directors
(three non-executive directors are Government nominees),
participation in NAMA, and otherwise.
As reported by the TCR on May 31, 2011, KPMG, in Dublin, Ireland,
noted that there are a number of material economic, political and
market risks and uncertainties that impact the Irish banking
system, including the Company's continued ability to access
funding from the Eurosystem and the Irish Central Bank to meet its
liquidity requirements, that raise substantial doubt about the
Company's ability to continue as a going concern.
The Company reported a net loss of EUR10.16 billion on
EUR1.84 billion of interest income for 2010, compared with a net
loss of EUR2.33 billion on $2.87 billion of interest income for
2009.
The Company's balance sheet at June 30, 2011, showed
EUR126.87 billion in total assets, EUR120.01 billion in total
liabilities, and EUR6.86 billion in total shareholders' equity
including non-controlling interests.
AVENTINE RENEWABLE: Widens Net Loss to $43.4-Mil. in 2011
---------------------------------------------------------
Aventine Renewable Energy Holdings, Inc., filed with the U.S.
Securities and Exchange Commission its annual report on Form 10-K
disclosing a net loss of $43.39 million on $887.58 million of net
sales for the year ended Dec. 31, 2011, compared with a net loss
of $25.46 million on $370.56 million of net sales for the ten
months ended Dec. 31, 2010.
The Company's balance sheet at Dec. 31, 2011, showed
$414.24 million in total assets, $255.55 million in total
liabilities and $158.68 million in total stockholders' equity.
"In the fourth quarter the Company capitalized on the expanding
margins the industry provided by focusing on the performance and
cost of operation at each plant. We demonstrated this focus can
make a difference. I would like to thank everyone in the Aventine
organization for the effort they have and continue to put forward
as we build a strong and stable Company," said John Castle, Chief
Executive Officer.
A copy of the Form 10-K is available for free at:
http://is.gd/DtVt0k
About Aventine Renewable
Pekin, Illinois-based Aventine Renewable Energy Holdings, Inc.
(OTC BB: AVRW) -- http://www.aventinerei.com/-- markets and
distributes ethanol to many of the leading energy companies in the
U.S. In addition to producing ethanol, its facilities also
produce several by-products, such as distillers grain, corn gluten
meal and feed, corn germ and grain distillers dried yeast, which
generate revenue and allow the Company to help offset a
significant portion of its corn costs.
The Company and all of its direct and indirect subsidiaries
filed for Chapter 11 on April 7, 2009 (Bankr. D. Del. Lead Case
No. 09-11214). The Debtors filed their First Amended Joint Plan
of Reorganization under Chapter 11 of the Bankruptcy Code on
Jan. 13, 201. The Plan was confirmed by order entered by the
Bankruptcy Court on Feb. 24, 2010, and became effective on
March 15, 2010.
* * *
Aventine carries 'CCC+' issuer credit ratings, with negative
outlook, from Standard & Poor's. Aventine carries a 'Caa1'
probability of default rating, with stable outlook, from Moody's.
In December 2011, when S&P issued the downgrade, it said, "The
downgrade reflects problems the company has encountered in
attempting to start its new facilities, and the risk of additional
delays and cost overruns. It also reflects the commodity basis
differentials its operating plants have experienced in 2011 that
have compressed margins, especially in the second quarter of 2011
when index-based crush spreads were weak. Although performance
has improved slightly since then, we believe liquidity may come
under stress and that covenant violations are possible in 2012
unless operations and realized margins improve."
AXION INTERNATIONAL: Files Amendment No. 2 to Form S-1 Prospectus
-----------------------------------------------------------------
Axion International Holdings, Inc., filed with the U.S. Securities
and Exchange Commission Amendment No. 2 to Form S-1 registration
statement relating to the offering of up to 10,000 6% Series A
convertible preferred shares, or the Series A preferred shares,
and warrants to purchase up to and indeterminate amount of
common shares to purchasers in this offering.
The Company is also offering up to [ ] of the Company's common
shares issuable upon conversion of the Series A preferred shares
and [ ] of the Company's common shares issuable upon exercise of
the warrants. The Series A preferred shares and warrants will be
sold in units for a purchase price equal to $1,000 per unit.
A full-text copy of the prospectus is available for free at:
http://is.gd/GnwIMU
About Axion International
New Providence, N.J.-based Axion International Holdings, Inc. (OTC
BB: AXIH) - http://www.axionintl.com/-- is the exclusive licensee
of patented and patent-pending technologies developed for the
production of structural plastic products such as railroad
crossties, pilings, I-beams, T-Beams, and various size boards
including a tongue and groove design that are utilized in multiple
engineered design solutions such as rail track, rail and tank
bridges (heavy load), pedestrian/park and recreation bridges,
marinas, boardwalks and bulk heading to name a few.
As reported by the TCR on May 6, 2011, RBSM LLP, in New York,
expressed substantial doubt about Axion International's ability to
continue as a going concern, following its audit of the Company's
balance sheet as of Dec. 31, 2010, and the related consolidated
statements of operations, stockholders' equity (deficit), and cash
flows for the three month period ended Dec. 31, 2010. The
independent auditors noted that the Company has incurred
significant operating losses in the current year and also in the
past.
The Company also reported a net loss of $6.57 million on
$2.18 million of revenue for the nine months ended Sept. 30, 2011,
compared with a net loss of $4.46 million on $1.25 million of
revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed
$5.96 million in total assets, $2.37 million in total liabilities,
$6.59 million in 10% convertible preferred stock, and a $3 million
total stockholders' deficit.
BE AEROSPACE: Moody's Rates $500MM Sr. Unsecured Notes at 'Ba2'
---------------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to BE Aerospace,
Inc.'s $500 million, 10 year senior unsecured notes issuance,
which is equal to the company's existing senior unsecured ratings.
The company intends to utilize the proceeds for general corporate
purposes, including the repayment of about $215 million in
revolving credit facility drawings used in the February 2012
acquisition of UFC Aerospace Corp. Separately, Moody's affirmed
BE Aerospace's Ba1 corporate family rating and stable outlook. The
company's Speculative Grade Liquidity rating of SGL-1 is
unchanged.
Rating Assignments:
-- $500 Million Senior Unsecured Notes due in 2022, Rated Ba2
(LGD4, 64%)
Rating Affirmations:
Issuer: B/E Aerospace, Inc.
-- Corporate Family Rating/Probability of Default Rating,
Affirmed at Ba1
-- Senior Secured Revolving Credit Facility, Affirmed at Baa2
(LGD2, 12%)
-- Senior Unsecured Notes, Affirmed at Ba2 (LGD4, 64%)
-- Senior Unsecured Shelf, Affirmed at (P)Ba2
Rating Rationale
The rating affirmation reflects Moody's view that BE Aerospace
will restore key credit metrics in line with the rating category
in fairly short order, notwithstanding the net increase to funded
debt resulting from the new issuance. The new unsecured notes will
term out the drawing on the bank credit facility used to fund a
portion of the UFC Aerospace acquisition, increase cash on hand by
approximately $276 million and free up capacity under the
revolving credit facility -- thereby improving the overall
liquidity profile. Moody's views the acquisition of UFC Aerospace
as beneficial, as it enhances BE Aerospace's position as a leading
distributor of aerospace fasteners and consumables - BE
Aerospace's highest-margin business unit. With the favorable near-
term earnings prospects, Debt-to-EBITDA using Moody's standard
accounting adjustments should be restored to below 3.0 times over
the next 12 months (is approximately 3.6 times on a trailing
basis, including the new debt). Free Cash Flow-to-Net Debt should
approach 19% over the next twelve months, which is on the high end
of the Ba1 rating category.
The SGL-1 Speculative Grade Liquidity Rating reflects Moody's
expectation of BE Aerospace maintaining a very good liquidity
profile over the near term, supported by steady free cash flow
generation that Moody's estimates to be at least $250 million. The
expectation of steady free cash flows is supported by BE
Aerospace's large installed product base, strong profit margins as
well as relatively modest prospective cash uses from working
capital and capital spending. As well, the liquidity profile is
supported by the company's full access to its $750 million secured
revolving credit facility.
The stable outlook reflects Moody's expectation of further
operating performance improvements, with sustained growth in
global airline revenue passenger miles and continued high level of
MRO activity, leading to a relatively quick restoration of credit
metrics. A higher rating, while unlikely at this time, would
likely require maintaining operating performance improvements such
that Debt/EBITDA is sustained below 2.5 times and EBIT-to-Interest
is sustained above 4.0 times. Sustained above-average operating
margins, conservative financial policies and very good liquidity
would be required for a rating upgrade or positive outlook. The
rating and/or outlook could come under downward pressure if
operating margins become pressured, leading to Debt/EBITDA
approaching 3.5 times and EBIT-to-Interest below 3.0 times. Any
outsized shareholder-friendly initiatives (especially if funded
with debt), or inability to execute on the backlog with the
accelerated OEM production rates, could also warrant consideration
for potential negative rating action(s).
The principal methodology used in rating BE Aerospace, Inc. was
the Global Aerospace and Defense Industry Methodology published in
June 2010. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
BE Aerospace, Inc is the world's largest manufacturer of
commercial and general aviation cabin interior products and a
major independent distributor of aerospace fasteners. BE
Aerospace's products include aircraft seats, equipment for food
and beverage preparation and storage, oxygen delivery systems, a
broad line of aerospace fasteners and certain engineering and
design services. Revenue for the last twelve months through
December 31, 2011 was approximately $2.5 billion.
BEACON POWER: Plan Filing Exclusivity Expires May 27
----------------------------------------------------
The Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware approved an extension of Beacon Power
Corporation, et al.'s exclusive period to file a Chapter 11 plan
through and including May 27, 2012.
The Court also extended through and including July 26, 2012, the
exclusive solicitation period for the Debtors to solicit
acceptances to a Chapter 11 plan.
The Debtors said that the size and complexity of their cases,
together with the good progress made to date towards an orderly
reorganization, provide sufficient cause for a 90-day extension.
As reported in the Troubled Company Reporter on Feb. 16, 2012,
Beacon Power received authorization from the Court to sell the
business to Rockland Capital LLC for $30.5 million, including a
note for $25 million and $5.5 million in cash. In addition,
Rockland is giving the U.S. Energy Department $6.6 million in
guarantees and undertakings to provide funding. The Debtors will
be prepared to move forward and focus their efforts on preparing a
plan of reorganization that will afford creditors favorable
treatment and an appropriate recovery on account of their claims.
The Debtors say they are paying their bills as they become due in
the ordinary course of business. They have sufficient resources
to meet their required postpetition payment obligations, and are
managing their businesses effectively and preserving the value of
their assets for the benefit of creditors.
About Beacon Power
Beacon Power Corporation, along with affiliates, filed for Chapter
11 protection (Bankr. D. Del. Case No. 11-13450) on Oct. 30, 2011,
in Delaware. Brown Rudnick and Potter Anderson & Corroon serve as
the Debtors' counsel. Beacon disclosed assets of $72 million and
debt totaling $47 million, including a $39.1 million loan
guaranteed by the U.S. Energy Department. Beacon built a $69
million facility with 20 megawatts of balancing capacity in
Stephentown, New York, funded mostly by the DoE loan.
The Debtors tapped Miller Wachman, LLP as auditors, Pluritas, LLC
as intellectual property advisors, CRG Partners Group LLC as
financial advisors.
Beacon Power is the second cleantech company which has been backed
by the U.S. Department of Energy via loan guarantees to fail this
year. The first was Solyndra, which declared Chapter 11
bankruptcy on Sept. 6, 2011.
Roberta A. DeAngelis, the United States Trustee for Region 3,
appointed four unsecured creditors to serve on the Official
Committee of Unsecured Creditors of Beacon Power.
Affiliates that simultaneously sought Chapter 11 protection are
Stephentown Holding LLC (Bankr. D. Del. Case No. 11-13451) and
Stephentown Regulation Services LLC (Bankr. D. Del. Case No.
11-13452).
BEYOND OBLIVION: Judge Agrees to Expedite $2.4MM Sale Bid Hearing
----------------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that U.S. Bankruptcy
Judge Allan L. Gropper agreed Thursday to expedite the notice
period required to clear the potential $2.4 million sale of Beyond
Oblivion Inc. to Nassau Music LLC, saying he'd hear a motion on
the bid Monday.
Law360 relates that Judge Gropper granted Beyond Oblivion's
Wednesday motion seeking to shorten the notice period with respect
to its bid for approval of Nassau's newly minted stalking horse
bid for its assets.
About Beyond Oblivion
Beyond Oblivion Inc. is a digital music startup that raised $87
million from investors like Rupert Murdoch's News Corp and
investment bank Alle & Co. director Snaley Shuman. Beyond
Oblivion aimed to compete with Apple Inc.'s iTunes but its music
service never saw the light of day.
Beyond Oblivion Inc. filed for Chapter 11 bankruptcy protection
(Bankr. S.D.N.Y. Case No. 12-10282) on Jan. 24, 2012, estimating
assets of between $1 million and $10 million, and debts of between
$100 million to $500 million.
The Company owes $50 million each to Sony Music Entertainment and
Warner Music Group in unsecured 'trade debt.'
Gerard Sylvester Catalanello, Esq., at Duane Morris LLP, in New
York, serves as counsel.
Beyond Oblivion will conduct an auction for the assets in March
2012. Initial bids are due March 15. A hearing to approve the
sale is set for March 26. Bids must be at least $1.5 million.
BIOVEST INTERNATIONAL: Eight Directors Elected at Annual Meeting
----------------------------------------------------------------
Biovest International, Inc., on March 7, 2012, held its annual
meeting of shareholders. Shareholders elected eight persons to
serve as directors to hold office until the next annual meeting or
until their successors are duly elected and qualified:
(1) Francis E. O'Donnell, Jr.;
(2) Ronald E. Osman;
(3) John Sitilides;
(4) Jeffrey A. Scott;
(5) Christopher C. Chapman;
(6) Peter J. Pappas, Sr.;
(7) Raphael J. Mannino; and
(8) Edmund C. King.
The shareholders also approved an amendment to the Company's
Amended and Restated Certificate of Incorporation to increase the
number of shares of common stock, $0.01 par value per share, that
the Company is authorized to issue from 300,000,000 shares to
500,000,000 shares and to correspondingly increase the overall
number of shares of capital stock that the Company is authorized
to issue from 350,000,000 shares to 550,000,000 shares, and
ratified the Company's appointment of Cherry, Bekaert & Holland,
L.L.P., as the Company's independent registered public accounting
firm for the fiscal year ending Sept. 30, 2012.
Following the 2012 annual meeting, Biovest filed with the
Secretary of State of the State of Delaware a Certificate of
Amendment of the Amended and Restated Certificate of Incorporation
of the Company. The Certificate of Amendment, which was effective
as of March 7, 2012, (a) increased the number of shares of common
stock that the Company is authorized to issue from 300,000,000
shares to 500,000,000 shares and (b) correspondingly increased the
overall number of shares of capital stock that the Company is
authorized to issue from 350,000,000 shares to 550,000,000 shares.
About Biovest International
Biovest International, Inc. -- http://www.biovest.com/-- is an
emerging leader in the field of active personalized
immunotherapies. In collaboration with the National Cancer
Institute, Biovest has developed a patient-specific, cancer
vaccine, BiovaxID(R), with three clinical trials completed,
including a Phase III study, demonstrating evidence of safety and
efficacy for the treatment of indolent follicular non-Hodgkin's
lymphoma.
Headquartered in Tampa, Florida, with its bio-manufacturing
facility based in Minneapolis, Minnesota, Biovest is publicly-
traded on the OTCQB(TM) Market with the stock-ticker symbol
"BVTI", and is a majority-owned subsidiary of Accentia
Biopharmaceuticals, Inc. (OTCQB: "ABPI").
Biovest, along with its subsidiaries, Biovax, Inc., AutovaxID,
Inc., Biolender, LLC, and Biolender II, LLC, filed for Chapter 11
bankruptcy protection (Bankr. M.D. Fla. Case No. 08-17796) on
Nov. 10, 2008. Biovest emerged from Chapter 11 protection, and
its reorganization plan became effective, on Nov. 17, 2010.
CHERRY, BEKAERT, & HOLLAND L.L.P., in Tampa, Fla., expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
incurred cumulative net losses since inception of approximately
$161 million and cash used in operating activities of
approximately $4.6 million during the two years ended Sept. 30,
2011, and had a working capital deficiency of approximately
$2.2 million at Sept. 30, 2011.
The Company reported a net loss of $15.28 million on $3.88 million
of total revenue for the year ended Sept. 30, 2011, compared with
a net loss of $8.58 million on $5.35 million of total revenue
during the prior year.
The Company's balance sheet at Dec. 31, 2011, showed $5.27 million
in total assets, $38.90 million in total liabilities, and a
$33.63 million total stockholders' deficit.
BLOCKBUSTER INC: PwC Providing Accounting Advice
------------------------------------------------
U.S. Bankruptcy Judge Burton Lifland authorized Blockbuster Inc.,
now known as BB Liquidating Inc., to expand the services rendered
by PricewaterhouseCoopers LLP as accounting advisor nunc pro tunc
to Feb. 2, 2012, in addition to its role as internal auditor.
As reported in the Troubled Company Reporter on Feb. 14, 2011,
the Bankruptcy Court previously the Debtors to employ
PricewaterhouseCoopers LLP as their independent auditors and
accounting advisors, nunc pro tunc to the Petition Date.
About Blockbuster Inc.
Blockbuster Inc., the movie rental chain with a library of
more than 125,000 titles, along with 12 U.S. affiliates,
initiated Chapter 11 bankruptcy proceedings with a pre-arranged
reorganization plan in Manhattan (Bankr. S.D.N.Y. Case No.
10-14997) on Sept. 23, 2010. It disclosed assets of $1 billion
and debts of $1.4 billion at the time of the filing.
Martin A. Sosland, Esq., and Stephen Karotkin, Esq., at Weil,
Gotshal & Manges, serve as counsel to the U.S. Debtors.
Rothschild Inc. is the financial advisor. Alvarez & Marsal is the
restructuring advisor with A&M managing director Jeffery J.
Stegenga as chief restructuring officer. Kurtzman Carson
Consultants LLC is the claims and notice agent. The Official
Committee of Unsecured Creditors retained Cooley LLP as its
counsel.
In April 2011, Blockbuster conducted a bankruptcy court-sanctioned
auction for all the assets. Dish Network Corp. won with an offer
having a gross value of $320 million.
BROBECK PHLEGER: Paul Hastings Wants Suit Out of Bankruptcy Court
-----------------------------------------------------------------
Steven Melendez at Bankruptcy Law360 reports that Paul Hastings
LLP has asked a California federal court to withdraw from
bankruptcy court a fraudulent-transfer adversary proceeding
springing from the 2003 bankruptcy of Brobeck Phleger & Harrison
LLP.
According to Law360, Paul Hastings said claims the Chapter 7
trustee overseeing the Brobeck estate has raised over profits made
by former Brobeck partners now at Paul Hastings should be heard in
the Northern District of California, since the case involves
constitutional issues outside the purview of a bankruptcy court.
About Brobeck Phleger
Brobeck, Phleger & Harrison LLP started business in 1926. It was
a prominent national law firm with over 900 attorneys and offices
in California, New York, Colorado, Virginia, Texas, Washington
D.C., and, through a joint-venture, in London, England. In the
late 1990's and early 2000s, Brobeck enjoyed rapid growth, almost
doubling its number of attorneys in just over three years in its
booming technology-sector practice. In the course of its
expansion, Brobeck incurred substantial debt as well as lease
obligations for several new offices. On Sept. 17, 2003, certain
of Brobeck's creditors filed an involuntary chapter 7 bankruptcy
petition (Bankr. N.D. Calif. Case No. 03-32715). Thereafter,
Ronald F. Greenspan was elected as the Chapter 7 trustee.
CAESARS ENTERTAINMENT: Bank Debt Trades at 10% Off
--------------------------------------------------
Participations in a syndicated loan under which Caesars
Entertainment Corp. is a borrower traded in the secondary market
at 89.77 cents-on-the-dollar during the week ended Friday, March
9, 2012, a drop of 1.05 percentage points from the previous week,
according to data compiled by Loan Pricing Corp. and reported in
The Wall Street Journal. The Company pays 525 basis points above
LIBOR to borrow under the facility. The bank loan matures on
Jan. 1, 2018. The loan is one of the biggest gainers and losers
among 179 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Friday.
About Caesars Entertainment
Caesars Entertainment Corp., formerly Harrah's Entertainment Inc.
-- http://www.caesars.com/-- is one of the world's largest casino
companies, with annual revenue of $4.2 billion, 20 properties on
three continents, more than 25,000 hotel rooms, two million square
feet of casino space and 50,000 employees. Caesars casino resorts
operate under the Caesars, Bally's, Flamingo, Grand Casinos,
Hilton and Paris brand names. The Company has its corporate
headquarters in Las Vegas.
Harrah's announced its re-branding to Caesar's on mid-November
2010.
The Company reported a net loss of $666.70 million on $8.83
billion of net revenues for the year ended Dec. 31, 2011, compared
with a net loss of $823.30 million on $8.81 billion of net
revenues during the prior year. The Company had net income of
$846.40 million in 2009.
The Company's balance sheet at Dec. 31, 2011, showed $28.51
billion in total assets, $27.46 billion in total liabilities and
$1.05 billion in total stockholders' equity.
* * *
Caesars Entertainment carries a 'Caa2' corporate family rating and
probability of default rating from Moody's Investors Service, and
a 'CCC" issuer default rating from Fitch Ratings.
In February 2012, Fitch said the affirmation of Caesars' IDR at
'CCC' reflects the company's high leverage and negative free cash
flow (FCF) profile.
CANO PETROLEUM: Files for Chapter 11 to Sell to NBI for $47.5MM
---------------------------------------------------------------
Cano Petroleum Inc. and an affiliate filed Chapter 11 petitions
(Banrk. N.D. Tex. Lead Case No. 12-31549) in Dallas on March 7,
2012.
Affiliates Ladder Companies Inc. and six others filed for
Chapter 11 protection (Bankr. N.D. Tex. Lead Case No. 131551) the
following day.
Cano Petroleum (NYSE Amex: CFW) is an independent oil and natural
gas company with assets located onshore in the U.S. in Texas, New
Mexico, and Oklahoma.
According to a document attached to the petition, the Debtors have
entered into a stock purchase agreement dated March 7, 2012, with
NBI Services Inc. NBI Services, as stalking horse, will purchase
all of the issued and outstanding capital stock of reorganized
Cano, absent higher and better offers.
Cano disclosed $63.37 million in asset and $116.26 million in
liabilities as of Sept. 30, 2011. The Debtors owe $60.6 million
to senior lenders Union Bank, N.A. and Natixis. It also owes
$16.6 million to junior lender UnionBanCal Equities, Inc.
Cano has been in business for eight years. After Huron Ventures,
Inc., merged with Davenport Field Unit Inc. in May 2004, Huron
changed its name to Cano. Cano at present has 27 part-time and
full-time employees and 14 contract workers.
Cano will file a Chapter 11 plan of reorganization that
contemplates, among other things, an auction may be conducted by
the bankruptcy court to select a purchaser for the assets.
Cano said it will continue to manage its properties and operate
its businesses while Cano seeks confirmation of its joint plan of
reorganization under the jurisdiction of the Bankruptcy Court.
Entities holding at least 5% of the shares include D.E. Shaw
Laminar Portfolios, L.L.C., Investcorp Interlachen Multi-Strategy
Master Fund Limited, Kellogg Capital Group LLC, Fidelity Clearing
Canada ULC, William Herbert Hunt Trust Estate, Radcliffe Capital
Management LP, and O'Connor Global Multi-Strategy Alpha Master
Limited.
According to the docket, a meeting of creditors under 11 U.S.C.
Sec. 341 is scheduled for April 15, 2012, at 1:15 p.m.
Ladder Companies estimated $50 million to $100 million in assets
and debts in the Chapter 11 petition filed March 8, 2011.
Schedules filed the next day say the Debtor has $1.53 million in
real and personal property certain wells and leases that have
unknown value. The Debtor says liabilities total $81.31 million.
The schedules, which include a 30-page list of wells and leases,
is available for free at http://bankrupt.com/misc/Ladder_SAL.pdf
Sale of Assets
Cano's current financial condition, including a history of
continued losses, defaults under its loan agreements and its
Series D Preferred Stock, no available borrowing capacity,
constrained cash flow and negative working capital, and limited to
no access to additional capital, prompted the Chapter 11 filing.
After a lengthy marketing process and substantial discussions with
lenders, the Debtors entered into the Stalking Horse SPA with NBI
Services. NBI has agreed to purchase all newly-issued stock in
Cano under a plan of reorganization for $47.5 million in cash.
The Prepetition Lenders and NBI have also signed a Plan Support
and Lock-Up Agreement dated March 7, 2012.
The Company is seeking approval of several "first day" motions on
an expedited basis seeking to facilitate Cano's operations pending
Bankruptcy Court approval of, among other things, its proposed
marketing process, the Stock Purchase Agreement and the Plan.
The Company has tapped Thompson & Knight LLP as legal counsel. NBI
Services, Inc. is represented by McDonald, McCann & Metcalf, LLP,
located in Tulsa, Oklahoma.
CAPITAL ONE: Moody's Keeps '(P)Ba1' Preferred Shelf Rating
----------------------------------------------------------
Moody's Investors Service issued a summary credit opinion on
Capital One Financial Corporation and includes certain regulatory
disclosures regarding its ratings. The release does not constitute
any change in Moody's ratings or rating rationale for Capital One
Financial Corporation and its affiliates.
Moody's current ratings on Capital One Financial Corporation and
its affiliates are:
Senior Unsecured (domestic currency) ratings of Baa1
Subordinate (domestic currency) ratings of Baa2
Senior Unsecured Shelf (domestic currency) ratings of (P)Baa1
Subordinate Shelf (domestic currency) ratings of (P)Baa2
Junior Subordinate Shelf (domestic currency) ratings of (P)Baa3
Preferred Shelf (domestic currency) ratings of (P)Baa3
Preferred shelf -- PS2 (domestic currency) ratings of (P)Ba1
Capital One, NA
Long Term Issuer Rating of A3
Long Term Bank Deposits (domestic currency) ratings of A3
Long Term Deposit Note/CD Program (domestic currency) ratings of
(P)A3
Long Term Other Senior Obligations ratings of A3
Bank Financial Strength ratings of C; BCA A3 | Adj. BCA A3 |
Short Term Bank Deposits (domestic currency) ratings of P-2
Short Term Other Senior Obligations ratings of P-2
Capital One Bank (USA), N.A.
Long Term Issuer Rating of A3
Senior Unsecured Bank Note Program (domestic currency) ratings
of (P)A3
Long Term Bank Deposits (domestic currency) ratings of A3
Long Term Deposit Note/CD Program (domestic currency) ratings of
A3
Long Term Other Senior Obligations ratings of A3
Bank Financial Strength ratings of C; BCA A3/Adj. BCA A3
Subordinate Bank Note Program (domestic currency) ratings of
(P)Baa1
Subordinate (domestic currency) ratings of Baa1
Short Term Bank Note Program (domestic currency) ratings of
(P)P-2
Short Term Bank Deposits (domestic currency) ratings of P-2
Short Term Other Senior Obligations ratings of P-2
Ratings Rationale
The rating action reflects COF's fundamental strengths. These
include solid franchise positioning, particularly within the
company's domestic credit card and banking segments, continued
strong core profitability, and a solid liquidity and funding
position. The ratings also incorporate the fact that COF's
business profile is heavily leveraged to the US consumer economy,
with attendant vulnerabilities to economic shocks and
political/regulatory risks.
The approximate $9 billion ING Direct acquisition significantly
advances COF's strategy to expand its direct banking platform - to
complement the company's traditional retail branch platform -
through the addition of ING Direct's deposit base of approximately
$80 billion. With the ING Direct acquisition, COF's direct-to-
consumer deposits will increase substantially. These deposits have
shown some resilience, though they remain more prone to outflows
than traditional branch-based accounts in Moody's opinion.
Some of the additional deposits will fund the assets set to be
acquired in COF's next acquisition, the pending purchase of HSBC's
approximate $30 billion US credit card operations for a 9% premium
(which is subject to regulatory approval and is currently expected
to close in Q2 2012). That acquisition will further bolster the
market position of COF's US general purpose credit card franchise;
it will also more than quadruple the size of COF's private label
retail cards portfolio, historically a riskier business than
general purpose cards and a business in which COF has a relatively
limited history.
However, even with the HSBC card transaction, COF's deposits will
exceed its loans. Although it is not yet clear how COF intends to
deploy the balance of its enlarged deposit base, Moody's does not
anticipate any significant changes in the bank's strategic
direction.
While the acquisitions of ING Direct and HSBC card should augment
COF's franchise positioning in banking and credit cards, they will
try COF's integration capabilities, particularly given their size
and the fact that they are essentially coming one right after the
other. In the case of ING Direct, COF will need to be mindful of
the strong affinity of ING Direct's accountholders in order to
minimize the degree of account attrition. Moreover, by taking on
the HSBC card acquisition at roughly the same time as ING Direct,
COF would be exposing itself to a greater risk of integration-
related difficulties, particularly given the size and complex
nature of the HSBC acquisition. Nevertheless, Moody's believes
such challenges are mitigated by the prudent structure of the
acquisitions, including equity issuance to fund a portion of the
consideration and appropriate credit marks, and are captured by
COF's current ratings. Moreover, if executed properly, the
acquisitions ultimately should benefit COF's credit profile by
providing additional sources of growth for the company in an
intensely asset and revenue-challenged environment for the US
banking industry.
CONA and COBNA are currently rated C for bank financial strength
and A3/Prime-2 for senior debt and deposits. COF's senior debt is
rated Baa1.
Rating Outlook
The rating outlook is stable.
What Could Change the Rating - Up
Successful integration of the ING Direct and HSBC card platforms
and continued progress in enhancing key capital ratios could
result in a positive adjustment to the rating and/or outlook.
What Could Change the Rating - Down
A downgrade could result from Moody's expectation that COF's
capital position may erode beyond expected tolerances - for
example due to credit and/or integration-related challenges - and
weaken its overall credit profile.
The methodologies used in these ratings were Bank Financial
Strength Ratings: Global Methodology published in February 2007,
Incorporation of Joint-Default Analysis into Moody's Bank Ratings:
A Refined Methodology published in March 2007, and Moody's
Guidelines for Rating Bank Hybrid Securities and Subordinated Debt
published in November 2009.
The methodologies used in these ratings were Bank Financial
Strength Ratings: Global Methodology published in February 2007,
Incorporation of Joint-Default Analysis into Moody's Bank Ratings:
A Refined Methodology published in March 2007, and Moody's
Guidelines for Rating Bank Hybrid Securities and Subordinated Debt
published in November 2009.
CARDINAL REAL ESTATE: Files for Chapter 11 Bankruptcy Protection
----------------------------------------------------------------
Anna Lee at GreenvilleOnline.com reports that Cardinal Real
Estate Group Inc., owner of the former Allen Bennett Hospital
campus, has filed for Chapter 11 protection.
According to the report, the filing puts a halt on all foreclosure
proceedings, including a court-ordered public auction that was
scheduled for March 5, and it revealed the extent of Cardinal Real
Estate's debt and its increasingly strained relationship with the
city of Greer, South Carolina.
"We weren't able to close the deal by Monday so this buys us the
time to still continue on the same path that we're working on to
get it done," the report quotes Garrick Good, CEO of Cardinal Real
Estate, as stating.
The report relates Mr. Good said he's in negotiations with private
investors to come up with the more than $1.6 million owed to Greer
and that the company's original plans to redevelop the hospital
campus into an assisted living facility remains unchanged.
The report notes court records show that Cardinal Real Estate had
defaulted on nearly $1.4 million in mortgage payments and owed
Greer another $150,000 in interest and fees since purchasing the
property from the city in December 2010. The city was identified
in bankruptcy court records as the lead creditor, while a list of
those holding the largest unsecured claims include Langley &
Associates, a local architectural firm that says it is owned
$100,000, Garden & Grounds, Greer CPW, Unique Builders, LEL
International Inc. and 10 others.
The report adds Greer's attorney, John Duggan, Esq., said the
bankruptcy filing will only delay the inevitable sale of the
hospital and transfer of title back to the city. For now, all
pending legal suits against Cardinal Real Estate will be frozen
until the bankruptcy court takes action. Any assets the company
owns will be divvied up, with Greer having priority as a first
mortgage holder.
CARIBBEAN RESTAURANTS: Moody's Raises CFR to 'B3' from 'Caa2'
-------------------------------------------------------------
Moody's Investors Service upgraded the ratings of Caribbean
Restaurants LLC -- the borrowing entity of the company's pre-
existing debt obligations, including its Corporate Family Rating
(CFR) to B3 from Caa2 and Probability of Default Rating to Caa1
from Caa2, due to the completion of the refinancing as expected
per Moody's press release on January 27, 2012. In addition, the
upgraded CFR and PDR have been moved and assigned to Restaurant
Holding Company, LLC ("Caribbean" or "NewCo")-- the borrower
under the new credit facilities. Moody's also affirmed the B3
rating of new $217.5 million senior secured credit facilities
after the company completed the execution of the credit agreement
under the credit facilities. The rating outlook is stable.
The action concludes the review for possible upgrade that was
initiated on January 27, 2012. All the ratings at the OldCo will
be withdrawn subsequently.
The rating action is as follows:
Restaurant Holding Company, LLC
- Corporate Family Rating -- assigned B3
- Probability of Default Rating -- assigned Caa1
- US$22.5 million senior secured revolving credit facility due
2016 -- B3 (LGD3, 31%), affirmed
- US$195 million senior secured term loan due 2017 -- B3 (LGD3,
31%), affirmed
Caribbean Restaurants, LLC
- Corporate Family Rating -- upgraded to B3 from Caa2 and will
be withdrawn
- Probability of Default Rating -- upgraded to Caa1 from Caa2
and will be withdrawn
- $147 million senior secured second lien notes due June 2012 --
Caa1 (LGD3, 39%) will be withdrawn
Ratings Rationale
The assignment of B3 CFR and affirmation of B3 rating on the bank
credit facilities reflect the timely execution of the refinancing
which provides the company with a more manageable debt maturity
schedule and improved liquidity. The refinancing eliminated the
2012 maturities related to Caribbean's previous bank facility and
senior secured notes. The rating action also reflects a modest
improvement in financial leverage and cash flow generation due to
reduced debt level and anticipated interest savings as a result
of the transaction. Positive rating consideration was also given
to the strong name recognition and leading position of the Burger
King brand in the Puerto Rico QSR segment, the seasoned
management team and the company's exclusive development agreement
within Puerto Rico.
"However, we continue to recognize Caribbean's earnings
vulnerability to consumer spending, its small scale, geographic
concentration in Puerto Rico and the still weak local economy,"
explained Moody's lead analyst John Zhao.
The stable rating outlook incorporates Moody's view that the near
term negative pressure on revenue and earnings will persist so
that Caribbean's earnings could likely decline. However, Moody's
anticipates any decline in earnings will likely be modest and
free cash flow slightly negative at worst, given management's
track record in maintaining steady profitability in a
recessionary yet inflationary environment. Moody's anticipates
the debt/EBITDA (excluding preferred equity adjustment) will not
rise materially above 6.5x in the coming year.
Caribbean's rating and stable outlook could face downward
pressure if its operating metrics such as same store sales and
operating profit declined, resulting in sustained debt/EBITDA
(excluding preferred equity adjustment) approaching 7.0x or
negative free cash flow.
Positive ratings momentum is not expected in the near term, but
could occur if the company is able to increase its scale and
diversification, as well as demonstrate an ability to sustain
debt-to-EBITDA below 5.0x.
The refinancing has shifted the company's debt structure to a
primarily all first-lien bank loan construct from previous
bond/bank structure, resulting in an improved family recovery
assumption to 65% from 50% according to the loss given default
methodology. This in turn has resulted in a Caa1 PDR, one notch
below the CFR.
Caribbean, through an exclusive territorial development agreement
with Burger King Corporation, is the sole franchisee of Burger
King restaurants in Puerto Rico with approximately 177 units as
of July 2011. The company also owns four Firehouse Subs
franchisee restaurants through a recent acquisition. Caribbean is
a wholly-owned subsidiary of BKH Acquisition Corp., which in turn
is majority-owned by Castle Harlan Partners, a private equity
firm that purchased the company in 2004.
CATALENT PHARMA: Moody's Rates New $400MM Term Loan at 'Ba3'
------------------------------------------------------------
Moody's Investors Service affirmed all ratings of Catalent Pharma
Solutions, Inc. following its recent Credit Amendments to amend
and extend its existing term loans. Moody's also assigned a Ba3 to
the incremental $400 million term loan that was issued to finance
the acquisition of the Clinical Trial Supplies business of Aptuit.
The outlook remains stable.
Ratings Assigned:
$400 million incremental senior secured term loan due 2017, Ba3
(LGD 3, 32%)
$807.8 million extended dollar term-1 loan due 2016, (Ba3,
LGD 3 32%)
207.7 EURO extended EURO term loan due 2016 (Ba3, LGD 3, 32%)
Ratings affirmed/ LGD estimates revised:
Corporate Family Rating, B2
Probability of Default Rating, B2
$200 million senior secured revolving credit facility due 2016,
Ba3 (LGD 3, 32%)
$261 million senior secured term loans (US and Euro denominated
tranches) due 2014, Ba3 (LGD3, 32%)
Senior PIK notes due 2015, Caa1 (LGD5, 81%)
Senior subordinated notes due 2017, Caa1 (LGD6, 94%)
The Speculative Grade Liquidity Rating remains SGL-2.
The outlook is stable.
Ratings Rationale
The B2 rating continues to be constrained by the company's very
high financial leverage of approximately 7.0 times, modest
interest coverage and free cash flow relative to debt. While
leverage has improved over the past year, the ratings and stable
outlook incorporate our expectation for further deleveraging
through EBITDA expansion. The credit profile is supported by the
company's large scale and position as one of the leading global
providers of drug delivery and outsourced services to the
healthcare industry. In particular, the company is a leader in
development and manufacturing of softgels and other oral drug
delivery technologies ("Oral Technologies"). Performance in this
business has continued to be strong, offsetting weak or uneven
performance in the Sterile Technologies and Packaging businesses.
Given the very high leverage and limited free cash flow
expectations, Moody's does not foresee an upgrade in the near-
term. Longer-term, if the reduces adjusted debt to EBITDA to 5.0
times the rating agency could upgrade the ratings. An upgrade
would also require free cash flow to debt to be sustained above
5%.
Moody's could downgrade the ratings if the Oral Technologies
business faces increased competition or product losses such that
the business fails to continue to show at least low-mid single
digit growth in EBITDA. Any weakness in liquidity or increase in
leverage would lead to pressure on the ratings.
The principal methodology used in rating Catalent was the Global
Business & Consumer Service Industry Rating Methodology published
in October 2010. Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the U.S.,
Canada and EMEA published in June 2009.
Catalent Pharma Solutions, Inc., based in Somerset, New Jersey,
is a leading provider of advanced dose form and packaging
technologies, and development, manufacturing and packaging
services for pharmaceutical, biotechnology, and consumer
healthcare companies. The company reported revenue of
approximately $1.69 billion for the 12 months ended December 31,
2011. Catalent is a privately held company, owned by affiliates of
The Blackstone Group.
CELL THERAPEUTICS: Incurs $62.4 Million Net Loss in 2011
--------------------------------------------------------
Cell Therapeutics, Inc., reported a net loss attributable to CTI
of $8.96 million on $0 of revenue for the three months ended
Dec. 31, 2011, compared with a net loss attributable to CTI of
$19.71 million on $0 of revenue for the same period a year ago.
The Company reported a net loss attributable to CTI of $62.36
million on $0 of revenue for the year ended Dec. 31, 2011,
compared with a net loss attributable to CTI of $82.64 million on
$319,000 of revenue during the prior year.
CTI had approximately $47.1 million in cash and cash equivalents
as of Dec. 31, 2011.
In February 2012, the European Medicines Agency's Committee for
Human Medicinal Products granted a positive opinion for
conditional approval of CTI's marketing authorization application
for Pixuvri to treat adult patients with multiple relapsed or
refractory aggressive non-Hodgkin B-cell lymphomas.
"We expect that in the next few months the European Commission
should adopt the CHMP's opinion for this unmet medical need and
for the first time patients with multiple relapsed or refractory
aggressive NHL in the E.U. will have an approved therapy to treat
their disease," stated James A. Bianco, M.D., CEO of Cell
Therapeutics, Inc. "We are working with consultants on developing
a staffing, resource and product launch plan for Europe so upon
marketing authorization and national reimbursement approvals, we
can be in a position to bring Pixuvri to these patients. With
approximately 12,000 potential patients each year in the EU[1]
this represents an attractive initial commercial opportunity for
CTI."
A full-text copy of the press release announcing the fourth
quarter and full year 2011 results is available for free at:
http://is.gd/HEwTcD
A copy of the Form 10-K filed with the Securities and Exchange
Commission is available for free at:
http://is.gd/cDK2Us
About Cell Therapeutics
Headquartered in Seattle, Washington, Cell Therapeutics, Inc.
(NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a
biopharmaceutical company committed to developing an integrated
portfolio of oncology products aimed at making cancer more
treatable.
Going Concern Doubt Raised
The report of Marcum LLP, in San Francisco, Calif., dated March 8,
2012, expressed an unqualified opinion, with an explanatory
paragraph as to the uncertainty regarding the Company's ability to
continue as a going concern.
The Company's available cash and cash equivalents are $47.1
million as of Dec. 31, 2011. The Company's total current
liabilities were $17.8 million as of Dec. 31, 2011. The Company
does not expect that it will have sufficient cash to fund its
planned operations beyond the second quarter of 2012, which raises
substantial doubt about the Company's ability to continue as a
going concern.
Bankruptcy Warning
The Form 10-K for the year ended Dec. 31, 2011, also noted that if
the Company receives approval of Pixuvri by the EMA or the FDA, it
would anticipate significant additional commercial expenses
associated with Pixuvri operations. Accordingly, the Company will
need to raise additional funds and are currently exploring
alternative sources of equity or debt financing. The Company may
seek to raise that capital through public or private equity
financings, partnerships, joint ventures, disposition of assets,
debt financings or restructurings, bank borrowings or other
sources of financing. However, the Company has a limited number
of authorized shares of common stock available for issuance and
additional funding may not be available on favorable terms or at
all. If additional funds are raised by issuing equity securities,
substantial dilution to existing shareholders may result. If the
Company fails to obtain additional capital when needed, it may be
required to delay, scale back, or eliminate some or all of its
research and development programs and may be forced to cease
operations, liquidate its assets and possibly seek bankruptcy
protection.
CHARLESTON ASSOCIATES: Can Access Bank of America Cash Collateral
-----------------------------------------------------------------
Judge Kevin Carey of the U.S. Bankruptcy Court for the District of
Delaware has approved a new stipulation between Charleston
Associates LLC and C-III Asset Management LLC, as special services
of Bank of America, National Association, on the use of cash
collateral.
The Debtor negotiated a 12th stipulation with C-III Asset
Management LLC, in its capacity as special servicer on behalf of
BofA, for the continued cash collateral use. The stipulation
provides that the Debtor can use rental income and other income
generated from its shopping center solely for the purpose of
funding (i) ordinary and necessary costs of operating and
maintaining the Shopping Center, and (ii) certain professional
fees and expenses.
With respect to budgeted fees and expenses for the law firm of
Neal Wolf & Associates, the allowed costs are those incurred in
the adversary proceeding against City National Bank and RA
Southeast Land Company, Adversary Proceeding No. 10-01452-lbr,
pending in the U.S. Bankruptcy Court for the District of Nevada.
The Debtor is indebted to BofA, its secured lender, in the amount
of $64 million. All income generated from the Shopping Center,
including all rent, is deemed to constitute cash collateral in
which BofA has an interest.
As adequate protection of its interest in the cash collateral,
BofA is granted liens in the assets of the Debtor's estates.
Moreover, in interim settlement of disputes between the parties
with respect to the valuation of the Shopping Center, the Debtor
agrees to make monthly payments of $225,000 to BofA.
About Charleston Associates
Based in Las Vegas, Nevada, Charleston Associates, LLC, is the
successor by merger to Boca Fashion Village Syndications Group,
LLC. The Debtor initially owned a 96-acre parcel of real estate
in Las Vegas, Nevada and began developing a large community
shopping center thereon. Situated at the northeast corner of
the intersection of Charleston Boulevard and Rampart Boulevard,
the entire shopping center was to be known as "The Shops at Boca
Park."
The Debtor developed Phases I and II (approximately 54 acres) into
an operating shopping center whose tenants currently include
Target, Petland, Vons, Famous Footwear, Ross, OfficeMax, and a
number of other major national retailers and local retailers. The
Debtor transferred developed portions of Phases I and II to
affiliates, but retained and continues to own nearly nine acres of
land in Phases I and II.
Phase III encompassed approximately 41.72 acres. The Debtor
divided Phase III into two parcels consisting of the approximately
18.28-acre parcel that is the Boca Fashion Village property, and
an approximately 23.44-acre parcel of undeveloped land adjacent
thereto. The Undeveloped Land, which remains largely unimproved,
was subsequently the subject of a "friendly foreclosure" by City
National Bank.
The Debtor developed Boca Fashion Village into an operating
shopping center whose tenants currently include The Cheesecake
Factory, Gordon Biersch, Total Wine and More, Grimaldi's Pizzeria,
Kona Grill, REI, Pink the Boutique, and many other national and
local retailers. Boca Fashion Village consists of three in-line
buildings containing 138,869 square feet of rentable area and an
additional 3.74 acre site. The 3.74 acre site was formerly
subject to a ground lease, but is currently owned by Quality Real
Estate Management ("QREM"), and is being renovated to accommodate
the opening of a Fry's Electronics, Inc. store, a "big-box" retail
electronics store. Approximately 118,258 square feet, or 85.2% of
the rentable area in Boca Fashion Village, is currently leased.
In addition, there is a cellular tower located on the property
that is currently leased to Nextel.
Charleston Associates filed for Chapter 11 protection (Bankr. D.
Del. Case No. 10-11970) on June 17, 2010. Judge Kevin J. Carey
presides over the case. Neal L. Wolf, Esq., Dean Gramlich, Esq.,
and Jordan M. Litwin, Esq., at Neal Wolf & Associates, LLC,
in Chicago, Ill., represent the Debtor as counsel. Bradford J.
Sandler, Esq., and Kathleen P. Makowski, Esq., at Pachulski Stang
Ziehl & Jones, LLP, in Wilmington, Del., represent the Debtor as
Delaware counsel. In its schedules, the Debtor disclosed
$92,348,446 in assets and $65,064,894 in liabilities.
Attorneys at Brinkman Portillo Ronk, PC, represent the Official
Committee of Unsecured Creditors as counsel. Thomas M. Horan,
Esq., Steven K. Kortanek, Esq., and Ryan Cicoski, Esq., at Womble
Carlyle Sandridge & Rice, LLP, in Wilmington, Del., represent the
Committee as Delaware counsel.
CHRIST HOSPITAL: Group Meets to Discuss Hospital's Case
-------------------------------------------------------
The Jersey Journal reports that a group formed to oppose the sale
of Christ Hospital to a for-profit healthcare chain was scheduled
to meet March 8, 2012, to share information about the hospital's
bankruptcy proceedings.
The report notes Prime Healthcare Services, which withdrew its bid
to buy the Palisade Avenue medical facility, is still listed as an
interested bidder as is the Jersey City Medical Center.
About Christ Hospital
Christ Hospital filed for Chapter 11 bankruptcy (Bankr. D. N.J.
Case No. 12-12906) on Feb. 6, 2012. Christ Hospital, founded in
1872 by an Episcopalian priest, is a 367-bed acute care hospital
located in Jersey City, New Jersey at 176 Palisade Avenue, serving
the community of Hudson County. The Debtor is well-known for its
broad range of services from primary angioplasty for cardiac
patients to intensity modulated radiation therapy for those
battling cancer. Christ Hospital is the only facility in Hudson
County to offer IMRT therapy, which is the most significant
breakthrough in cancer treatment in recent years.
Christ Hospital filed for Chapter 11 after an attempt to sell the
assets fell through. Pre-bankruptcy suitors included Hudson
Hospital Holdco LLC, Prime Healthcare Services, Inc., and
Community Healthcare Associates. Melanie Evans at
ModernHealthcare.com reported that Prime offered $35 million while
Beth Fitzgerald at NJSpotlight reported that CHA made a tentative
proposal to buy Christ Hospital for $104 million.
The Bankruptcy Court has approved bidding procedures for the sale
of Christ Hospital. Bids are due March 15. The Debtor will hold
an auction March 19 if multiple bids are received. The Court will
conduct a sale hearing March 20.
As of Dec. 31, 2011, the Debtor has total assets of at least
$38,000,000 and total liabilities of $115,000,000, at book values.
Judge Morris Stern presides over the case. Lawyers at Porzio,
Bromberg & Newman, P.C., serve as the Debtor's counsel. Alvarez &
Marsal North America LLC serves as financial advisor. Logan &
Company Inc. serves as the Debtor's claim and noticing agent.
The Health Professional and Allied Employees AFT/AFI-CIO is
represented in the case by Mitchell Malzberg, Esq., at Mitnick &
Malzberg P.C.
DIP lender HFG is represented in the Debtor's case by Benjamin
Mintz, Esq., at Kaye Scholer LLP and Paul R. De Filippo, Esq., at
Wollmuth Maher & Deutsch LLP.
Andrew H. Sherman, Esq., at Sills, Cummis & Gross, serves as
counsel to the Official Committee of Unsecured Creditors. J.H.
Cohn LLP serves as financial advisor to the committee.
Suzanne Koenig of SAK Management Services, LLC, has been appointed
as patient care ombudsman. She is represented by Greenberg
Traurig as counsel.
Hudson Hospital Holdco is represented in the case by McElroy,
Deutsch, Mulvaney & Carpenter, LLP. Community Healthcare
Associates is represented in the case by Lowenstein Sandler PC.
Liberty Healthcare System, Inc., d/b/a Jersey City Medical Center,
which joined in CHA's bid, is represented by Duane Morris LLP.
CIRCLE STAR: To Acquire Lands for Oil Exploration in Kansas
-----------------------------------------------------------
Circle Star Energy Corp. entered into an agreement to acquire
certain lands prospective for oil exploration in Southern Kansas.
The transaction is structured to deliver effective Net Revenue
Interests of approximately 93% to the Company and encompasses
approximately 7,600 acres located in southern Kansas. The area
offers significant drilling potential in the oil-rich
Mississippian Limestone formation as well as a number of other
related drill targets both above and below this exciting play.
Circle Star's announcement is most notable in that this is an
acquisition of land rights as opposed to a common oil & gas lease
arrangement. This differentiates the Company's acquisition from
many of its contemporaries who typically enter into limited term
leasehold agreements.
Company CEO Jeff Johnson comments, "We are very pleased to have
been able to get this acreage position under contract given the
highly competitive nature of the oil sector. It is truly an
extraordinary opportunity for the Circle Star shareholders. With
modern exploration, drilling and completion techniques, Circle
Star will be able to participate in a major industry renewal in
the area."
Mr. Johnson continues, "Although we are pursuing pure lease
acreage positions throughout Kansas, a unique factor of this
transaction is that upon closing, Circle Star will actually own
the land and water rights in addition to owning a substantial
portion of the minerals. As such, there will be no fixed time
limits on our drilling and development program. The ownership
position also provides Circle Star the ability to look at
alternative sources of revenue including farm-outs for other forms
of energy development such as solar and/or wind."
The agreement contains customary representation and warranties,
covenants and indemnification provisions and conditions. The
transaction is anticipated to close by the end of April, 2012.
Further details regarding the Company, its appointments, finances
and agreements are filed as part of the Company's continuous
public disclosure as a reporting issuer under the Securities
Exchange Act of 1934, as amended, filed with the Securities and
Exchange Commission's EDGAR database. For more information visit
http://www.circlestarenergy.com/
About Circle Star
Houston, Tex.-based Circle Star Energy Corp. owns royalty,
leasehold, operating, net revenue, net profit, reversionary and
other mineral rights and interests in certain oil and gas
properties in Texas. The Company's properties are in Crane,
Scurry, Victoria, Dimmit, Zavala, Grimes, Madison, Robertson,
Fayette, and Lee Counties.
The Company has sustained losses in all previous reporting periods
with an inception to date loss of $3.8 million as of July 31,
2011. "There is substantial doubt about the Company's ability to
continue as a going concern," the Company said in the filing.
The Company reported a net loss of $6.46 million on $509,971 of
total revenues for the six months ended Oct. 31, 2011, compared
with a net loss of $11,172 on $0 of total revenues for the same
period a year ago.
The Company's balance sheet as of Oct. 31, 2011, showed
$3.47 million in total assets, $5.84 million in total liabilities,
and a $2.37 million total stockholders' deficit.
CITIZENS CORP: Gary Murphey Selected as Chapter 11 Trustee
----------------------------------------------------------
Brian Reisinger, staff reporter at Nashville Business Journal,
reports that Gary Murphey of Atlanta-based Resurgence Financial
Services has been named trustee in the Chapter 11 case of Citizens
Corp.
The report says Mr. Murphey will be responsible for guiding the
company through Chapter 11 in lieu of chairman Ed Lowery, whom
Judge Marian Harrison expressed deep doubts about in a recent
opinion calling for a trustee.
Mr. Murphey said his initial concern will be tending to Financial
Data Technology Corp. The core processing provider is Citizens'
chief asset and has been at the heart of a fight Lowery waged
against various creditors.
The report notes Mr. Murphey said he'll also begin to evaluate
other causes of action by parties in the case, though it's early
to say what specific steps are next. Observers are waiting to see
what he decides about Lowery's reorganization plan, control over
FiData and various other issues.
The Chapter 11 Trustee is represented by:
Gary M. Murphey, CTP
Managing Director & CFO
RESURGENCE FINANCIAL SERVICES LLC
3330 Cumberland Blvd SE Ste 500
Atlanta, GA 30339-5997 USA
Tel: (770) 933-6855
Fax: (404) 252-1859
E-mail: murphey@rfslimited.com
About Citizens Corp.
Franklin, Tennessee-based Citizens Corp. operates a mortgage
brokerage business. Citizens Corp. filed for Chapter 11
bankruptcy (Bankr. M.D. Tenn. Case No. 11-11792) on Nov. 28, 2011.
Judge George C. Paine, II, presides over the case. Robert J.
Mendes, Esq., at MGLAW, PLLC, serves as the Debtor's counsel.
Marion Ed Lowery, a former owner of Peoples State Bank of Commerce
of Nolensville and various other entities, serves as chairman of
the company. He signed the Chapter 11 petition.
Lenders Tennessee Commerce Bank is represented by David W.
Houston, IV, Esq., at Burr & Forman LLP.
Citizens listed assets and liabilities showing property worth
$40.1 million and debt of $17.8 million.
Citizens has filed a reorganization plan offering to pay all
creditors in full over time, including Tennessee Commerce Bank and
other secured lenders owed $17.3 million. Unsecured creditors,
owed a combined $81,000, would be paid off in equal installments
over five years.
CITRUS MEMORIAL: Moody's Cuts Rating on $39.4MM Bonds to 'Ba3'
--------------------------------------------------------------
Moody's Investors Service has downgraded to Ba3 from Ba2 the long-
term bond rating assigned to Citrus Memorial Hospital's (d.b.a.
Citrus Memorial Health System) $39.4 million of outstanding bonds
issued by the Citrus County Hospital Board, FL. The outlook
remains negative.
Rating Rationale
The downgrade to Ba3 from Ba2 and the maintenance of the negative
outlook is driven by poor operating performance through the first
four months of FY 2012 ending January 31, 2012 compared to the
prior year comparable period; a material decline in liquidity
following some practice acquisitions and unexpected challenges
with a conversion of the patient billing system as well as the
ongoing legal dispute regarding hospital governance. The downgrade
and negative outlook also reflect the upcoming test date for the
liquidity covenants on the bank notes and the current level of
days cash on hand which is below the covenant.
Challenges
* Upcoming liquidity covenant measurement date on March 31, 2012
with 65 days required under the two non-rated bank qualified
loans; Citrus currently reports 55 days as of January 31, 2012 and
is endeavoring to meet the covenant
* Weakening balance sheet measures as of January 31, 2012 with
$27.1 million or 58 days cash on hand, down from $38.3 million or
80 days at the end of FY 2011; the decline is due to practice
acquisitions problems implementing new computer system for
managing accounts receivables
* Weak operating performance through the first four months of FY
2012 with a negative 3.5% operating margin, compared to a negative
operating margin of 2.1% through the end of FY 2011
* Decreasing inpatient admissions and surgical procedures,
particularly cardiac surgeries, in FY 2011. Through the first
quarter of FY 2012 admissions and cardiac surgeries have
decreased. Market share has decreased from 44% in FY 2006 to 33%
in FY 2011.
* High exposure to Medicare (69% of revenues at first quarter of
FY 2012; Ba medians is 46.8%) continues to constrain the ability
of the organization to enhance profitability
* Ongoing legal dispute between the Citrus County Hospital Board
(CCHB) and the Citrus Memorial Health Foundation (CMHF) boards
regarding control over day-to-day operations is a credit concern
and continues to require CMHF's attention
Strengths
* Financial improvement, though still at an operating loss, during
FY 2011 through revenue growth and expense management resulting in
a lower operating loss of $3.8 million in FY 2011 from a loss of
$7.5 million in FY 2010 while operating cash flow (OCF) improved
to $6.3 million in FY 2011 over $3.2 million in FY 2010; the
improvement in FY 2011 is also noteworthy given the 47% decrease
in tax revenues from FY 2010 to FY 2011
* Management maintains a very liquid position for unrestricted
cash
* Frozen defined benefit pension plan for all new entrants since
October 1, 2004 and subsequently closed the defined benefit plan
at December 31, 2010 with no additional accruals being incurred;
although underfunded by $12.7 million in FY 2010; defined
contribution plan for employees who joined afterward
* Swift management actions to improve operational performance in
the short-term and implement longer-term strategies to improve
payor mix and grow strategic service lines; management will
commence a review of all service lines, including open heart
surgery, with a goal to improve long-term financial performance
and lower reliance on tax revenues for cash flow
What Could Make The Rating Go Up
Favorable resolution of the governance issues with CCHB; improved
volumes and financial performance , increase in liquidity and
greater cushion against debt coverage ratios
What Could Make The Rating Go Down
Continued downturn in financial performance due to costs and
disruptions caused by the governance dispute and the inability to
contract expenses or grow revenues; further decline in liquidity
or increased leverage
The principal methodology used in this rating was Not-for-Profit
Hospitals and Health Systems published in January 2008.
CLEAR CHANNEL: Bank Debt Trades at 20% Off in Secondary Market
--------------------------------------------------------------
Participations in a syndicated loan under which Clear Channel
Communications, Inc., is a borrower traded in the secondary market
at 80.31 cents-on-the-dollar during the week ended Friday, March
9, 2012, a drop of 1.71 percentage points from the previous week,
according to data compiled by Loan Pricing Corp. and reported in
The Wall Street Journal. The Company pays 3656 basis points above
LIBOR to borrow under the facility. The bank loan matures on
Jan. 30, 2016, and carries Moody's Caa1 rating and Standard &
Poor's CCC+ rating. The loan is one of the biggest gainers and
losers among 179 widely quoted syndicated loans with five or more
bids in secondary trading for the week ended Friday.
About Clear Channel
San Antonio, Texas-based CC Media Holdings, Inc. (OTC BB: CCMO) --
http://www.ccmediaholdings.com/-- is the parent company of Clear
Channel Communications, Inc. CC Media Holdings is a global media
and entertainment company specializing in mobile and on-demand
entertainment and information services for local communities and
premier opportunities for advertisers. The Company's businesses
include radio and outdoor displays.
Clear Channel reported a net loss of $302.09 million on $6.16
billion of revenue in 2011, compared with a net loss of $479.08
million on $5.86 billion of revenue in 2010. The Company had a
net loss of $4.03 billion on $5.55 billion of revenue in 2009.
The Company's balance sheet at Dec. 31, 2011, showed $16.54
billion in total assets, $24.01 billion in total liabilities and a
$7.47 billion total member's deficit.
* * *
The Troubled Company Reporter said on Feb. 10, 2012, Fitch Ratings
has affirmed the 'CCC' Issuer Default Rating of Clear Channel
Communications, Inc., and the 'B' IDR of Clear Channel Worldwide
Holdings, Inc., an indirect wholly owned subsidiary of Clear
Channel Outdoor Holdings, Inc., Clear Channel's 89% owned outdoor
advertising subsidiary. The Rating Outlook is Stable.
Fitch's ratings concerns center on the company's highly leveraged
capital structure, with significant maturities in 2014 and 2016;
the considerable and growing interest burden that pressures free
cash flow; technological threats and secular pressures in radio
broadcasting; and the company's exposure to cyclical advertising
revenue. The ratings are supported by the company's leading
position in both the outdoor and radio industries, as well as the
positive fundamentals and digital opportunities in the outdoor
advertising space.
CMS ENERGY: Fitch Rates $300-Mil. Sr. Unsecured Notes at 'BB+'
--------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating to CMS Energy Corp.'s
$300 million issuance of 5.05% senior unsecured notes, due
March 15, 2022. Proceeds from the sale will be used primarily to
redeem the $153 million outstanding in 2 7/8% convertible senior
notes, due 2024. The new notes rank equally in right of payment
with existing senior unsecured obligations of CMS. The Rating
Outlook is Stable.
CMS' rating and Stable Outlook are supported by its ownership of
Consumers Energy (IDR 'BBB'/Stable Outlook), an integrated
regulated utility located in Michigan which consistently delivers
strong earnings. Management remains committed to an investment
strategy focused on investments in Consumers Energy. The five-
year $6.6 billion capital plan will deliver system upgrades and
rate base growth.
Fitch continues to monitor the company's financing activity as the
substantial level of stand-alone parent debt is a legacy credit
concern. Given a large capex program at the utility, Fitch sees
only limited opportunity for parent company de-leveraging over the
next three to five year period. Fitch considers the company's
consolidated liquidity position and Consumers Energy's debt
capital market access as sufficient relative to funding needs.
A substantial reduction in parent level debt would improve the
parent company credit profile, and coupled with continued strong
financial metrics at Consumers Energy, could lead to a ratings
upgrade. Fitch does not believe a material level of de-leveraging
will occur over the next two years.
Negative Rating Action Trigger
An adverse regulatory order that negatively impacts the financial
position of Consumers Energy could place pressure on both the
parent and subsidiary credit ratings.
Stable Financial Metrics
Fitch forecasts consolidated credit ratios to remain consistent
with guidelines for the 'BB+' rating category, with the ratios of
EBITDA-to-interest and funds from operations (FFO)-to-debt at
approximately 3.8 times (x) and 16%, respectively through 2014.
Fitch anticipates a slight downward trend to FFO metrics starting
in 2015 following the full utilization of CMS' net operating loss
(NOLs). Fitch views managing costs as a key determinant to
maintaining cash flow metrics consistent with expectations; and,
would look toward a substantial reduction in stand-alone debt as a
key driver to an improved credit profile.
Solid Liquidity Profile
The consolidated liquidity position at CMS Energy remains
sufficient relative to funding needs with approximately $1.2
billion in consolidated borrowing capacity available at Dec. 31,
2011. CMS Energy has a five-year $550 million credit facility
expiring in March 2016. Consumers Energy has a separate five-year
$500 million credit facility, also expiring in March 2016; and, a
$150 million credit facility, expiring in August 2013. The
execution in 2011 of two new multi-year credit facilities for a
combined $1.05 billion in borrowing capacity mitigates concern
related to liquidity position and bank credit market access.
Moderate Funding Needs
CMS Energy consolidated maturities are manageable with $339
million due in 2012; $566 million due in 2013; $493 million in
2014; $699 million due in 2015; and, $530 million due in 2016.
Fitch anticipates CMS Energy and Consumers Energy will continue to
have the access to debt capital markets required to manage
financing needs, including re-financing maturities in a timely and
cost effective manner.
COMMERCIAL VEHICLE: Board Approves 2012 Bonus Plan
--------------------------------------------------
The Compensation Committee of the Board of Directors of Commercial
Vehicle Group, Inc., approved the Commercial Vehicle Group, Inc.,
2012 Bonus Plan. Each executive officer is eligible to
participate in the 2012 Bonus Plan. All other terms of the 2012
Bonus Plan are substantially similar to those of the Company's
2011 Bonus Plan.
Under the 2012 Bonus Plan, the target incentive bonus opportunity
for Mr. Boyd was increased from 40% under the Company's 2011 Bonus
Plan to 50% of his base salary.
A copy of the 2012 Bonus Plan is available for free at:
http://is.gd/QS5MmC
About Commercial Vehicle Group
New Albany, Ohio-based Commercial Vehicle Group, Inc., (Nasdaq:
CVGI) supplies fully integrated system solutions for the global
commercial vehicle market, including the heavy-duty truck market,
the construction and agricultural markets, and the specialty and
military transportation markets. The Company has facilities
located in the United States in Arizona, Indiana, Illinois, Iowa,
North Carolina, Ohio, Oregon, Tennessee, Virginia and Washington
and outside of the United States in Australia, Belgium, China,
Czech Republic, Mexico, Ukraine and the United Kingdom.
The Company's balance sheet at Sept. 30, 2011, showed
$400.79 million in total assets, $391.26 million in total
liabilities and $9.52 million total stockholders' investment.
* * *
In the Oct. 4, 2011, edition of the TCR, Moody's Investors Service
upgraded Commercial Vehicle Group, Inc.'s Corporate Family Rating
to B2 from B3, and Probability of Default Rating to B2 from B3.
The B2 CFR reflects modest size, relatively high debt leverage,
and exposure to highly cyclical commercial vehicle end markets.
Demand for commercial vehicle components is primarily sensitive to
economic cycles, fleet age, and regulatory implementation
schedules. The CFR considers the substantial cash balance and
absence of funded debt maturities until 2019. Moody's recognizes
CVGI's demonstrated ability to manage its cost structure and
working capital position to minimize cash burn in a challenging
economic environment. Moody's believes the company is positioned
to benefit from additional modest improvement in commercial
vehicle build rates at least through mid 2012 and has sufficient
liquidity to support associated working capital needs.
As reported by the TCR on April 12, 2011, Standard & Poor's
Ratings Services said it raised its corporate credit rating on New
Albany, Ohio-based Commercial Vehicle Group Inc. (CVG) to 'B-'
from 'CCC+'. "The upgrade reflects our assumption that CVG can
improve EBITDA and cash flow in the next two years, because we
believe commercial truck production volumes will continue to rise
year-over-year in 2011 and 2012," said Standard & Poor's credit
analyst Nancy Messer. Heavy-duty truck production increased by a
meaningful 30% in 2010, leading to a 30% year-over-year sales
increase.
COMMUNITY HEALTH: Moody's Rates $750MM Notes B3, Keeps B1 CFR
-------------------------------------------------------------
Moody's Investors Service commented that CHS/Community Health
Systems, Inc's. proposed offering of $750 million of senior
unsecured notes due 2019 are rated B3 (LGD 5, 85%). Moody's
understands that the proceeds of the offering, which is an add-on
to notes issued in November 2011, will be used to refinance a
portion of the remaining 8.875% senior unsecured notes due 2015.
Moody's existing ratings of the company, including the B1
Corporate Family and Probability of Default Ratings, are
unchanged. The proposed issuance will continue to extend the
company's maturity profile and is not expected to meaningfully
affect leverage. The rating outlook remains negative.
Ratings unchanged:
Senior secured revolving credit facility expiring 2016, Ba3
(LGD 3, 32%)
Senior secured term loan A due 2016, Ba3 (LGD 3, 32%)
Senior secured term loan B due 2014, Ba3 (LGD 3, 32%)
Senior secured term loan B due 2017, Ba3 (LGD 3, 32%)
8.875% senior notes due 2015, B3 (LGD 5, 85%)
8.0% senior notes due 2019, B3 (LGD 5, 85%)
Corporate Family Rating, B1
Probability of Default Rating, B1
Speculative Grade Liquidity Rating, SGL-1
Ratings Rationale
The B1 Corporate Family Rating reflects Moody's expectation that
leverage will remain high and interest expense coverage will
continue to be modest. Furthermore, Moody's anticipates that the
opportunity to reduce leverage with free cash flow will be
constrained in the near term given the company's expected
investment in capital spending related to replacement hospitals
and information technology. Moody's also expects the company to
continue to actively pursue acquisitions. However, supporting the
rating is Moody's acknowledgement of Community Health's scale and
market strength, which have helped the company weather unfavorable
trends in bad debt expense and weak volumes that have been
plaguing the industry as a whole. Moody's anticipates that the
company will continue to see stable margin performance and
maintain very good liquidity.
The company's inability to continue to manage headwinds in the
industry and reach and maintain debt to EBITDA below 5.0 times
could result in a downgrade of the ratings. This could result from
declining adjusted admission trends and unfavorable reimbursement
or pricing trends impacting net revenue growth, greater than
expected increases in bad debt expense, or aggressive acquisition
activity. Additionally, a significant debt financed acquisition or
adverse developments related to ongoing investigations or
litigation could result in a downgrade of the ratings.
Given Moody's view of the continued risks facing the company, an
upgrade of the rating in the near term is not likely. However,
Moody's could upgrade the ratings if financial leverage is
materially reduced and cash flow coverage of debt metrics improve.
Specifically, if Community Health is able to achieve and sustain
adjusted debt to EBITDA below 4.0 times, Moody's could upgrade the
ratings. However, absent further clarity around the outcome of
ongoing litigation and investigations, Moody's would need to see
additional cushion in these metrics to absorb potential negative
developments.
The principal methodology used in rating CHS/Community Health
Systems, Inc. was the Global Healthcare Service Provider 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.
Community Health, headquartered in Franklin, TN, is an operator of
general acute care hospitals in non-urban and mid-sized markets
throughout the US. Through its subsidiaries, Community Health
owned, leased or operated 131 hospitals in 29 states at December
31, 2011. In addition, through its subsidiary, Quorum Health
Resources, LLC, Community Health provides management and
consulting services to approximately 150 independent, non-
affiliated general acute care hospitals throughout the country.
Community Health recognized approximately $13.6 billion in
revenues before the provision for doubtful accounts for the year
ended December 31, 2011.
COMMUNITY HEALTH: S&P Retains 'B' Rating on $2-Bil. Senior Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services' issue-level rating on
Franklin, Tenn.-based Community Health Systems Inc.'s 8% senior
notes due 2019 is unchanged. Community is proposing to tack $1
billion onto the existing $1.0 billion senior notes due 2019, for
an aggregate total of $2 billion. "The issue-level rating on these
notes is 'B' (one notch lower than the 'B+' corporate credit
rating on the company), with a recovery rating of '5', indicating
our expectation of modest (10% to 30%) recovery for lenders in the
event of a payment default. The issuer of the notes is wholly
owned subsidiary CHS/Community Health Systems Inc. The company
plans to use note proceeds to refinance existing debt," S&P said.
"The corporate credit rating on Community Health is 'B+' and the
rating outlook is stable. The rating reflects our assessment of
the company's business risk profile as 'fair' and the financial
risk profile as 'highly leveraged,' according to our criteria. The
ratings reflect our expectation of high-single-digit revenue
growth, supported by a mid-single-digit organic growth rate after
recent results that partly were reimbursement-driven, and modest
acquisition activity. The company remains acquisitive, but we
believe acquisitions will stay moderate, and expect management to
extend its success in improving acquired underperforming
hospitals. We expect a significant improvement in the EBITDA
margin in 2012; however, this is entirely on the upcoming adoption
of an accounting change regarding the provision for bad debt. On a
comparable basis, we expect reimbursement pressure and weak
patient volume to be factors driving a small decline in EBITDA
margin," S&P said.
Ratings List
Community Health Systems Inc.
Corporate credit rating B+/Stable/--
CHS/Community Health Systems Inc.
$2B sr nts due 2019 B
Recovery rating 5
COMMUNITY MEMORIAL: Cash Collateral Hearing Today
-------------------------------------------------
The Bankruptcy Court will hold a further hearing at 1:30 p.m.
today, March 12, 2012, on the request of Community Memorial
Hospital d/b/a Cheboygan Memorial Hospital to use cash collateral.
On March 6, Community Memorial Hospital obtained limited authority
to use lenders' cash collateral of up to $900,000 pursuant to a
stipulation among the Debtor, Citizens National Bank of Cheboygan,
the U.S. Department of Agriculture, and AmerisourceBergen Drug
Corporation.
The Debtor, on the one hand, and Citizens and the USDA, on the
other hand, disagree as to the scope of Citizens Bank's and the
USDA's security interests, particularly as to whether or not they
apply to accounts receivable.
The Debtor has roughly $12.8 million of secured debt resulting
from four different credit facilities:
-- Citizens National Bank of Cheboygan loaned the
principal sum of $713,000, pursuant to a Note, dated
Jan. 26, 2001. The Citizens Note is secured by
mortgages on three parcels of real property owned by
the Debtor, located at 702-736 S. Main Street,
Cheboygan, Michigan, known as Lincoln Bridge Plaza.
-- The Economic Development Corporation of the County of
Cheboygan, with Citizens as the bondholder, loaned to
the principal sum of $1,600,000 pursuant to a Note,
dated Feb. 1, 2001. The Debtor also granted Citizens
mortgages on the Lincoln Bridge Plaza.
-- The EDCCC, with Citizens again as the bondholder,
loaned the additional principal sum of $4,300,000,
pursuant to a Note, dated April 1, 2008. The Debtor
granted Citizens additional mortgages on three parcels
of real property owned by the Debtor, located at
748-810 S. Main Street, Cheboygan, Michigan, referred
to as the hospital main campus.
-- The USDA loaned the principal sum of $8,724,251,
pursuant to a Note, Dec. December 3, 2003. The Debtor
granted to the USDA mortgages on the Lincoln Bridge
Plaza, the Hospital and a medical office building that
was to be constructed with the proceeds of the USDA
loan. The USDA agreed, at the time of the Second Bond
Note, to subordinate its mortgage and liens on the
Lincoln Bridge Plaza and the Hospital but not its
mortgage and lien on the New Clinic.
The Debtor has argued that Citizens Bank and the USDA have no
interest in the Debtor's cash, while Citizens Bank and the USDA
assert that all of the Debtor's cash constitutes their cash
collateral.
The Debtors noted in court papers that, in addition to the
Prepetition Lenders, certain entities may assert liens or purchase
money security interests in specific equipment or supplies sold to
the Debtor, including AmerisourceBergen, Eplus Technology, Inc.,
Stryker Sales Corporation, Med One Capital Funding, LLC, Republic
Bank, Leasing Associates of Barrington, Inc., Siemens Financial
Services, Inc., Fleetwood Financial, General Electric Capital
Corporation, Siemens Medical Solutions USA, Inc., and Winthrop
Resources Corporation.
AmerisourceBergen claims a security interest in, among other
things, the Debtor's accounts receivable and their proceeds,
including the cash that the Debtor proposes to use.
As of the Petition Date, the Debtor said total assets were
$20,159,891.
In its interim order, the Court made no finding on the issue, but
held that use of cash by the Debtor is necessary and that the
proposed protection for the cash use is adequate.
As adequate protection of ABDC's interests and the Prepetition
Lenders' interests in their prepetition collateral, ABDC and the
Prepetition Lenders will have, pursuant to sections 361, 363 and
552(b) of the Bankruptcy Code, valid, binding, enforceable and
perfected replacement liens in the same property of the Debtor's
estate as held by ABDC and the Prepetition Lenders prior to the
Petition Date. The Replacement Liens will enjoy the same validity
and extent as the liens ABDC and the Prepetition Lenders held on
the Petition Date, subject only to existing liens and encumbrances
that are valid, binding and enforceable and perfected liens
existing in the Prepetition Collateral on the Petition Date.
Counsel for Citizens National Bank of Cheboygan is:
Sandra S. Hamilton, Esq.
CLARK HILL PLC
200 Ottawa Ave NW Ste 500
Grand Rapids, MI 49503
Tel: (616) 608-1141
Fax: (616) 608-1194
E-mail: shamilton@clarkhill.com
AmerisourceBergen is represented by:
Dennis M. Haley, Esq.
WINEGARDEN HALEY LINDHOLM & ROBERTSON PLC
G-9460 S Saginaw Rd Ste A
Grand Blanc, MI 48439
Tel: (810) 579-3600
Fax: (810) 579-1748
E-mail: dhaley@winegarden-law.com
Counsel for USDA is:
Julia A. Caroff, Esq.
Assistant U.S. Attorney
211 W. Fort Street, Suite 2001
Detroit, MI 48226
Tel: (313) 226-9772
E-mail: Julia.Caroff@usdoj.gov
About Community Memorial Hospital
Community Memorial Hospital, operator of the Cheboygan Memorial
Hospital, filed for Chapter 11 bankruptcy (Bankr. E.D. Mich. Case
No. 12-20666) on March 1, 2012. Judge Daniel S. Opperman oversees
the case. Paul W. Linehan, Esq., at McDonald Hopkins LLC,
represents the Debtor as counsel. The Debtor's financial advisor
is Conway Mackenzie Inc. The Debtor estimated assets and debts of
$10 million to $50 million.
Opened in 1942, the Debtor is an independent, not-for-profit
entity, organized exclusively for charitable, scientific and
educational purposes, and holds tax exempt status in accordance
with Section 501(c)(3) of the Internal Revenue Code. The
Cheboygan Memorial Hospital is a 25-bed critical access hospital
located in Cheboygan, Cheboygan County, a community on the Lake
Huron coast. The Debtor has 395 employees.
COMMUNITY MEMORIAL: Has $5-Mil. Buyout Offer From McLaren
---------------------------------------------------------
The United States of America, on behalf of its agencies, the U.S.
Department of Agriculture's Rural Development agency and the
Department of Health and Human Services' Centers for Medicare and
Medicaid Services, is objecting to the request of Community
Memorial Hospital to:
-- use the government's cash collateral; and
-- grant McLaren Health Care Corporation a super-priority
Secured interest in the Debtor's assets in exchange for
post-petition financing that represents an advance of
the purchase price.
Community Memorial Hospital is seeking Court approval of up to
$2,000,000 on a postpetition, first lien and superpriority basis,
under a financing arrangement with McLaren.
The key terms of the Postpetition Loan Agreement include:
a. Upon entry of an interim order, McLaren will make funds
available to the Debtor up to $700,000;
b. Upon the Order becoming a final order, McLaren will
make funds available to the Debtor up to $2,000,000
(inclusive of the $700,000 Interim Facility);
c. All funds will be made available upon requests made by
the Debtor (no more frequently than twice weekly) but
only up to and in accordance with a budget;
d. The Postpetition Financing will bear interest at 7%;
e. The Debtor will pay McLaren a closing fee equal to
50 basis points (0.5%) of the principal amount loaned,
which will be automatically deducted by McLaren from
the principal amounts loaned but in no way will result
in a deducting credit or offset to the principal amount
outstanding. In addition, there will be an exit fee
equal to 50 basis points (0.5%) of the principal amount
repaid, unless McLaren is the successful purchaser of
the Debtor's assets, in which case no such exit fee
would be due; and
f. The Debtor is required to pay McLaren certain fees,
expenses and other costs for out-of-pocket expenses
incurred by McLaren.
Court filings by the U.S. government indicate that the Debtor and
McLaren has an Asset Purchase Agreement with the Debtor to buy
most of its assets for $5 million. The APA requires that any
outstanding balances on the postpetition financing will be
credited toward the purchase price.
The government asserts a first lien on the building, equipment and
accounts receivable generated from a medical office building, the
Debtor's new clinic, constructed on the debtor's campus with Rural
Development funding.
The government said Rural Development is owed roughly $8.2
million. The government also has a claim for Medicare Part A
overpayments owed to CMS totaling roughly $3.1 million as of the
petition date. The overpayments have arisen from the debtor's
acute and long term care hospital services. The overpayments are
subject to the United States' rights of recoupment.
The government noted that repayment of the $2 million DIP loan is
unlikely, meaning that creditors of the Debtor, including secured
creditors, will receive not more than $3 million for the assets
being sold. At least $750,000 of the $1.8 million that would
actually be advanced under the DIP loan is earmarked for
professional fees, on top of the $250,000 in retainers received by
the Debtor's counsel and financial advisors.
About Community Memorial Hospital
Community Memorial Hospital, operator of the Cheboygan Memorial
Hospital, filed for Chapter 11 bankruptcy (Bankr. E.D. Mich. Case
No. 12-20666) on March 1, 2012. Judge Daniel S. Opperman oversees
the case. Paul W. Linehan, Esq., at McDonald Hopkins LLC,
represents the Debtor as counsel. The Debtor's financial advisor
is Conway Mackenzie Inc. The Debtor estimated assets and debts of
$10 million to $50 million.
Opened in 1942, the Debtor is an independent, not-for-profit
entity, organized exclusively for charitable, scientific and
educational purposes, and holds tax exempt status in accordance
with Section 501(c)(3) of the Internal Revenue Code. The
Cheboygan Memorial Hospital is a 25-bed critical access hospital
located in Cheboygan, Cheboygan County, a community on the Lake
Huron coast. The Debtor has 395 employees.
COMPREHENSIVE CARE: Gets 11% Rate Increase on At-Risk Program
-------------------------------------------------------------
Comprehensive Care Corporation has signed an amendment to its
existing at-risk pharmacy management agreement with a major client
serving Medicare members.
CompCare received an 11% rate increase which equates to an annual
increase of no less than $3.7 million based on the Company's
client's current membership. The rate increase has an effective
date of Jan. 1, 2012. "The rate increase, along with other
initiatives being taken by the Company, results in our Puerto Rico
subsidiary achieving immediate profitability starting January 1,
2012," said Clark A. Marcus, CompCare's Chairman and CEO.
Additionally, the client extended the initial two-year term of the
contract by an additional three months to Dec. 31, 2012.
About Comprehensive Care
Tampa, Fla.-based Comprehensive Care Corporation provides managed
care services in the behavioral health, substance abuse, and
psychotropic pharmacy management fields.
The Company reported a net loss of $10.4 million on $35.2 million
of revenues for 2010, compared with a net loss of $18.9 million on
$14.2 million of revenues for 2009.
The Company also reported a net loss of $6.47 million on
$54.04 million of total revenues for the nine months ended
Sept. 30, 2011, compared with a net loss of $8.63 million on
$17.34 million of total revenues for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed
$14.67 million in total assets, $26.41 million in total
liabilities and a $11.73 million total stockholders' deficiency.
Mayer Hoffman McCann P.C., in Clearwater, Fla., expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
has suffered recurring losses from operations and has not
generated sufficient cash flows from operations to fund its
working capital requirements.
CONCHO RESOURCES: Moody's Rates New Senior Notes Due 2022 at 'B1'
-----------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Concho Resources
Inc.'s proposed senior notes due 2022. The Ba3 Corporate Family
Rating (CFR), SGL-2 Speculative Grade Liquidity (SGL) rating, and
the B1 rating on the existing senior notes are unchanged and the
outlook remains positive. Concho will use the proceeds to repay a
portion of the outstanding borrowings under its credit facility.
Ratings Rationale
"The notes issuance enhances Concho's liquidity," commented
Jonathan Kalmanoff, Moody's Analyst.
The Ba3 CFR reflects Concho's scale which is comparable to Ba3
rated E&P peers, strong returns relative to peers driven by a high
proportion of oil and NGL production, a high degree of geological
diversification, a position as one of the largest producers in the
Permian Basin, and low leverage. The rating also considers the
company's history of leveraging acquisitions, followed by
subsequent leverage reduction, and geographic concentration in the
Permian Basin.
The SGL-2 reflects good liquidity through 2012. At December 31,
2011 pro forma Concho had $1.9 billion of availability under its
credit facility and less than $1 million of cash. The company
plans to fund its 2012 drilling program with internal cash flow,
and any acquisitions with its credit facility. Financial covenants
under the facility are debt / EBITDAX of not more than 4.0x and a
current ratio of at least 1.0x. We expect Concho to remain well
within compliance with these covenants during 2012. There are no
debt maturities until 2016 when the credit facility matures.
Substantially all of Concho's oil and gas assets are pledged as
security under the facility which limits the extent to which asset
sales could provide a source of additional liquidity if needed.
The B1 senior unsecured note rating reflects both the overall
probability of default of Concho, to which Moody's assigns a PDR
of Ba3, and a loss given default of LGD5-71%. 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.
The positive outlook reflects Moody's expectation of continued
growth in production and reserves with strong full cycle metrics.
We could upgrade the ratings if Concho continues to grow
production and reserves, maintains strong full cycle metrics, and
reduces leverage on production and reserves. We could downgrade
the ratings if RCF / debt is expected to be sustained at or below
30% due to a leveraging acquisition, or if profitability
deteriorates materially due to sustained operational issues.
The principal methodology used in rating Concho Resources Inc 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.
Concho Resources Inc. is an independent exploration and production
company headquartered in Midland, Texas.
CONCHO RESOURCES: S&P Rates $500MM Senior Unsecured Notes at 'BB+'
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned issue-level and
recovery ratings to Concho Resources Inc.'s $500 million senior
unsecured notes due 2022. The assigned issue rating on the notes
is 'BB+' (the same as the corporate credit rating). "The recovery
rating on this debt is '3', indicating our expectation of a
meaningful (50% to 70%) recovery in the event of default. The
company will use the proceeds to repay debt under its revolving
credit facility," S&P said.
"The ratings on oil and gas exploration and production company
Concho Resources Inc. reflects its strong reserve replacement
performance, solid production growth, and the expectation that
Concho will continue to grow its midsize reserve base which
totaled 386.5 million barrels of oil equivalent reserves as of
December 31, 2011. In addition, we view it as highly favorable
that the company's reserves are focused on oil and its gas assets
tend to be liquids rich. The ratings on the company also reflect
the company's participation in the competitive and highly cyclical
oil and gas industry and its geographically concentrated reserve
base," S&P said.
Ratings List
Concho Resources Inc.
Corporate credit rating BB+/Stable/--
New Rating
$500 mil sr unsecd nts due 2022 BB+
Recovery rating 3
CONTINENTAL AIRLINES: Moody's Rates Class B Certificates at 'Ba2'
-----------------------------------------------------------------
Moody's Investors Service assigned Baa2 and Ba2 ratings,
respectively, to the Class A and Class B Pass Through
Certificates, Series 2012-1 (the "Certificates") of the 2012-1
Pass Through Trusts that Continental Airlines, Inc.
("Continental") will establish. Moody's also affirmed the separate
B2 Corporate Family ratings assigned to Continental and to its
parent, United Continental Holdings, Inc. and all but one of its
other debt ratings assigned to obligations of these two issuers.
Moody's downgraded its ratings assigned to United Air Lines,
Inc.'s 2007-1 EETC: A-tranche to Baa3 from Baa2, B-tranche to Ba3
from Ba2 and C-tranche to B1 from Ba3. The outlook is stable.
Assignments:
Issuer: Continental Airlines, Inc.
-- Senior Secured Enhanced Equipment Trust, Assigned Baa2 and
Ba2
Downgrades:
Issuer: United Air Lines, Inc.
-- Senior Secured Pass-Through, to Baa3, Ba3 and B1 from Baa2,
Ba2 and Ba3
LGD Assessments:
Issuer: Continental Airlines, Inc.
-- Senior Unsecured Revenue Bonds, Changed to LGD5, 72% from a
range of LGD5, 71% to LGD5, 74%
RATINGS RATIONALE
The Certificates proceeds, initially to be held in escrow, will
fund the purchase of equipment notes to be issued by Continental
for 21 aircraft in total: three Boeing B737-900ERs originally
delivered to Continental in 2009 and 14 new Boeing B737-900ER
aircraft and four new Boeing B787-8 aircraft scheduled for
delivery in 2012. Existing financing on the three 2009 aircraft
will be refinanced by this transaction. The payment obligations of
Continental will not be guaranteed by its parent, United
Continental Holdings, Inc. The transaction documentation provides
for the possible issuance of a subordinated C tranche of
certificates at any time after the conclusion of the Deposit
Period. The subordination provisions of the inter-creditor
agreement provide for the payment of interest on the Eligible B
Pool Balance, if any, of the Class B certificates before payments
of scheduled principal on the Class A Certificates. Amounts due
under the Certificates will be subordinated to any amounts due on
the separate Class A and Class B Liquidity Facilities ("Liquidity
Facility"). Credit Suisse AG, New York Branch will be the initial
provider of the liquidity facilities. Natixis, S.A., acting
through its New York Branch will be the Depositary.
The ratings of the Certificates consider the credit quality of
Continental as obligor of the underlying equipment notes, Moody's
opinion of the collateral protection of the Notes, the credit
support provided by the liquidity facilities and certain
structural characteristics of the Notes such as the applicability
of Section 1110 of Title 11 of the United States Code (the "Code")
and the cross-collateralization and cross-default features. The
assigned ratings reflect Moody's opinion of the ability of the
Pass-Through Trustees to make timely payment of interest and the
ultimate payment of principal on the final scheduled regular
distribution date of April 11, 2024.
Although Moody's estimated loan-to-value of Series 2012-1 is
higher than that for other of Continental's more recent EETCs, the
loan-to value remains within the range detailed in Moody's EETC
Rating Methodology for the assigned rating. The ratings consider
that the aircraft comprising the collateral of the 2012-1 EETC
will form the foundation of United Continental Holdings' mainline
fleet for many years to come. The attractiveness of the aircraft
including their relative fuel efficiency versus older aircraft
supports the A-tranche rating that is six notches above the B2
Corporate Family rating. Moody's estimate of the initial loan-to-
value approaches 65% on the A-Tranche based on its estimates of
market values and before applying its LTV benefit for cross-
collateralization. This compares to the mid-50% range for
Continental's more recent EETCs and to about 55% based on the
maintenance-adjusted base values reflected in the Series 2012-1
offering memorandum. The line number of the first of the B787-8
aircraft that Continental will receive approaches Number 50.
According to Boeing, line numbers above 20 will deliver the full
performance benefits that are expected of the B787-8. The superior
fuel-burn and expected maintenance savings relative to that of
aircraft of traditional design and materials should allow the
B787-8 to better retain its value versus traditional aircraft over
time. The recent increase in the order book for the B737-900ER
should help temper downwards pressure on the value of current
technology narrow-body aircraft that Moody's believes will develop
later this decade after the Airbus' NEO and Boeing MAX models
begin to deliver.
Any combination of future changes in the underlying credit quality
or ratings of Continental, unexpected material changes in the
value of the aircraft pledged as collateral, and/or changes in the
status or terms of the liquidity facilities or the credit quality
of the liquidity provider could cause Moody's' to change its
ratings of the Certificates.
The affirmation of the B2 Corporate Family ratings considers
United Continental Holdings' good liquidity, leading market
position and supportive credit metrics heading into 2012. The
ratings reflect Moody's belief that the company is well positioned
to sustain its credit profile in 2012 notwithstanding potential
pressure on operating earnings because of higher fuel prices and a
negative inflection in free cash flow as deliveries of aircraft
and other capital investment increase verses 2011 levels.
The downgrade of the ratings on the United Air Lines' Series 2007-
1 EETC reflects the meaningful decline in the market values of the
aircraft that comprise the collateral of this financing. Of the 13
aircraft that serve as collateral, seven are either 1998 vintage
Boeing B747-400s or 2000 vintage B777-200s. Each of these aircraft
types has, since 2007, experienced larger declines in value than
most other aircraft models and types, exerting greater pressure on
the loan-to-value of this transaction when compared to the other
EETCs.
The principal methodology used in rating United Continental
Holdings, Inc. was the Global Passenger Airlines Industry
Methodology published in March 2009 and Enhanced Equipment Trust
And Equipment Trust Certificates 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.
United Continental Holdings, Inc. (NYSE: UAL) is the holding
company for both United Airlines and Continental Airlines.
Together with United Express, Continental Express and Continental
Connection, these airlines operate an average of 5,656 flights a
day to 376 airports on six continents from their hubs in Chicago,
Cleveland, Denver, Guam, Houston, Los Angeles, New York/Newark
Liberty, San Francisco, Tokyo and Washington, D.C.
CONVERSION SERVICES: Friedman LLP Resigns as Accountant
-------------------------------------------------------
Conversion Services International, Inc., received the resignation
of Friedman LLP, its independent registered public accounting
firm, effective on Feb. 27, 2012.
Other than raising substantial doubt regarding the Company's
ability to continue as a going concern, the report of independent
registered public accounting firm of Friedman regarding the
Company's financial statements for the fiscal years ended Dec. 31,
2010, and 2009 did not contain any adverse opinion or disclaimer
of opinion and were not qualified or modified as to uncertainty,
audit scope or accounting principles.
During the years ended Dec. 31, 2011, and 2010, and during the
interim period from the end of the most recently completed fiscal
year through Feb. 27, 2012, the date of resignation, there were no
disagreements with Friedman on any matter of accounting principles
or practices, financial statement disclosure or auditing scope or
procedures, which disagreements, if not resolved to the
satisfaction of Friedman, would have caused it to make reference
to that disagreement in its reports.
About Conversion Services Int'l
Conversion Services International, Inc., and its wholly owned
subsidiaries are principally engaged in the information technology
services industry in these areas: strategic consulting, business
intelligence/data warehousing and data management to its customers
principally located in the northeastern United States.
CSI was formerly known as LCS Group, Inc. In January 2004, CSI
merged with and into a wholly owned subsidiary of LCS. In
connection with this transaction, among other things, LCS changed
its name to "Conversion Services International, Inc."
Friedman LLP expressed substantial doubt about the Company's
ability to continue as a going concern after auditing the
Company's financial reports for 2009 and 2010. The accounting
firm noted that the Company has incurred recurring operating
losses, negative cash flows, is not in compliance with a covenant
associated with its Line of Credit, maturing on March 31, 2011 and
has significant future cash flow commitments.
The Company reported a net loss of $733,505 on $11.31 million
of revenue for the nine months ended Sept. 30, 2011, compared with
a net loss of $796,124 on $13.41 million of revenue for the same
period during the prior year.
The Company's balance sheet at Sept. 30, 2011, showed
$3.15 million in total assets, $6.96 million in total liabilities,
and a $3.81 million total stockholders' deficit.
COVANTA HOLDINGS: Fitch Assigns 'BB' Issuer Default Rating
----------------------------------------------------------
Fitch Ratings has assigned an initial Issuer Default Rating (IDR)
of 'BB' to Covanta Holdings Corporation as well as to its wholly
owned subsidiary, Covanta Energy Corporation (CEC). Fitch has
linked the IDRs of Covanta and CEC due to a high degree of
business, legal and financial linkages. The Rating Outlook is
Stable.
In addition, Fitch has assigned its 'BB+' rating to the proposed
$1.2 billion senior secured facilities at CEC that include a $900
million revolving credit facility due 2017 and a $300 million term
loan due 2019. The new senior secured facilities at CEC will
replace the existing $300 million revolver due 2013, $320 million
funded letter of credit facility due 2014 and $619 million term
loan due 2014. The new senior secured credit facilities are
moderately less restrictive than the existing facilities, in
particular, with respect to financial covenants, debt incurrence,
restricted payments, asset sales and investments.
Fitch has assigned its 'BB' rating to the proposed issuance of
Covanta's $400 senior unsecured notes due 2022. Fitch has also
assigned its 'BB' rating to Covanta's existing 7.25% $400 million
senior unsecured notes due 2020 and 3.25% $460 million cash
convertible senior notes due 2014. The indenture for the new
senior unsecured notes is substantially identical to the existing
7.25% senior unsecured notes.
In Fitch's opinion, the proposed transactions are modestly
negative for consolidated leverage and will result in higher
interest costs, but positive for liquidity given the expanded
revolver capacity and will further improve the company's debt
maturity profile.
The 'BB' IDR reflects Covanta's reliance on distributions from its
wholly owned subsidiary, CEC, which in turn, derives cash flow
from upstream distributions by its numerous project subsidiaries.
Covanta's ratings reflect its visible and sustainable cash flow
generation from highly contracted waste disposal and energy
revenue with credit-worthy counterparties and a small but
increasing proportion of recycled metal sales. Covanta enjoys a
strong liquidity position including a stable free cash flow
profile, manageable debt maturities and consistently demonstrated
capital markets access. The ratings also reflect a highly
leveraged capital structure and structural subordination of
corporate debt to the debt at various project subsidiaries.
Covanta has established a long and successful track record in
developing, constructing and operating energy-from-waste
facilities. The operational performance remains strong and boiler
availability has been consistently improving, reaching a high of
91.7% for 2011. The company's presence in the Northeast U.S.
benefits from lack of availability of landfills and proximity to
waste generation as well as electricity demand.
Despite challenges due to lower than expected economic activity,
Covanta's waste volumes processed have remained stable in 2011 and
should benefit as a sustained economic recovery takes hold. Fitch
expects Covanta's waste and service fee revenue to benefit from
contractual escalations in tip and service fees, which are usually
indexed to inflation, sustained improvement in market pricing, and
an increase in higher priced, special waste volume in the overall
mix. Fitch expects these factors to drive a 3% cumulative average
growth rate in waste and service revenue over the next five years.
Covanta's service and waste disposal agreements expire at various
times and the company has been successful in extending a majority
of its existing contracts. A highly contracted stream of waste
and service revenues is a credit positive for Covanta, in Fitch's
opinion. However, it is important to note that as the initial
waste and energy contracts come up for renewal, these are likely
to be renewed for much shorter tenors as opposed to the long-dated
agreements (20-25 years) signed initially. As a result, Fitch
expects that the average contract length for waste and energy
revenues is going to become shorter as historical contracts roll-
off. Fitch notes that the composition of EBITDA from service-fee
operated contracts that are coming up for renewal over the next
five years is modest and the loss of any one contract will not
impact consolidated EBITDA significantly. There are several
service-fee owned contracts that face contract expiration over
2014-16 and will likely get extended or transition to tip-fee
structure.
Approximately 65% of Covanta's retained electricity production is
under long-term contract and/or hedged for 2012. However, with
the roll-off of historical contracts, a greater proportion of
energy revenues will get exposed to market-driven rates. Continued
weakness in natural gas prices has led to depressed power prices
in most of the deregulated power markets in the U.S. Fitch
recently lowered its natural gas price outlook to
$3.25/$3.75/$4.00 per MMBtu for 2012/2013/2014, respectively. As a
result, Fitch expects Covanta's energy revenues to modestly
decline till 2014 and then improve from rebounding power prices
and a higher retained share of energy revenues as certain service
fee contracts likely transition into a tip-fee structure.
Fitch expects strong growth in recycled metal revenues over the
next five years driven by higher metal recoveries and continued
strength in metal pricing. Covanta has been channeling a portion
of its surplus cash toward smaller projects that can drive organic
growth. These include modest capital investments to enhance metal
recovery during waste-to-energy conversion. Fitch also expects a
shift in mix to non-ferrous metals, which would further boost the
metal revenue.
The company has been keen to expand its presence globally and has
invested sizeable capital and time to develop opportunities in
Europe, specifically U.K. and Ireland. The development process
is, however, quite long and the ultimate success remains
uncertain. Fitch has not incorporated any new projects in its
forecasts aside from those already announced and under
construction.
Fitch expects consolidated EBITDA to be under pressure over 2012-
14 driven by weaker energy revenues, partially offset by an
increase in metal revenue and a shift in mix toward higher priced
special waste. Toward the latter part of the forecast period,
Fitch expects EBITDA growth to rebound from improved power prices,
higher retained share of electricity production and sustained
growth in metal revenues. Fitch expects the free cash flow (FCF)
generation to remain more or less stable over 2012-14 and then be
negatively affected by higher cash tax payout due to the
expiration of Net Operating Losses, partially offset by EBITDA
growth.
In the absence of any significant development capex and utilizing
a part of asset sales proceeds from the sale of power operations
in Asia, Covanta has pursued an aggressive capital allocation
policy over the last two years. Since July 2010, Covanta has
bought back $324 million of equity capital and paid out $265
million in dividends. On March 5, 2012, Covanta announced
doubling of the annual dividend to $0.60/share and a further $100
million in share authorization. Fitch's forecasts indicate that
the enhanced level of dividends can be supported by discretionary
FCF at the consolidated level. However, Covanta is unlikely to
sustain the level of share repurchases that it has done over 2010-
12 without increasing leverage and diluting the credit metrics.
Covanta's financial flexibility is quite robust given a healthy
cash flow generation profile, adequate liquidity and sufficient
flexibility to allocate surplus capital within the limitations of
the existing and proposed debt instruments. As of Dec. 31, 2011,
Covanta had unrestricted cash and cash equivalents of $232
million, out of which approximately $174 million and $9 million
was held by international and insurance subsidiaries,
respectively, and not available for near-term liquidity in the
domestic operations. Covanta's additional source of short-term
liquidity consists of a $300 million revolver and a $320 million
funded letter of credit facility. As of Dec. 31, 2011, Covanta
had full availability under its revolver and $43 million available
under its funded letter of credit facility.
Fitch expects the company to generate surplus cash flow of $100
million annually over the next five years after netting dividend,
maintenance and growth capex. In absence of significant
development projects and after meeting the declining scheduled
project debt payments, Fitch considers it likely that management
will return the surplus cash to shareholders. Covanta will be de-
leveraging its capital structure due to the scheduled pay down of
project debt, which will minimize structural subordination of cash
flows and is positive for the credit profile. It is quite likely
that management may raise debt at the corporate level in order to
utilize the freed-up capacity and use the proceeds to further
return capital to shareholders. Any significant re-levering of
the balance sheet would be negative for Covanta's credit profile
and could warrant a downward revision in ratings.
Fitch estimates Covanta's consolidated gross leverage to be
approximately 4.0-4.5 times (x) and funds flow from operations
(FFO) to total debt to be in the 15%-16.5% range over 2012-15,
which is in line with Fitch's guideline ratios for a 'BB' rated
issuer. Fitch expects the consolidated coverage metrics to be
stronger than the rating category till 2014. However, FFO-to-
interest coverage ratio is expected to modestly decline after 2014
with the increase in cash taxes.
The Stable Outlook for Covanta incorporates Fitch's expectation
that its cash flow generation remains solid and credit metrics
remain stable over the forecast period supported by a strong
liquidity profile that should enable the company to withstand any
worsening of the commodity downturn. Positive or negative rating
actions in the near term will likely be driven by any material
change in the company's capital allocation decisions.
Fitch's rating concerns include increasing business risk as
historical, long-tenured waste, service and energy contracts
expire and the proportion of commodity driven organic initiatives,
which include recycled metal sales and special waste, rises.
Covanta has pursued an aggressive capital allocation policy that
has returned a significant amount of capital to shareholders over
the last two years. Fitch would be concerned if Covanta was to
seek additional leverage in order to return capital to
shareholders at a similar pace.
Fitch has assigned the following ratings with a Stable Outlook:
Covanta Holding Corporation
-- Long-term IDR 'BB';
-- $$400 million 7.25% senior unsecured notes due 2020 'BB';
-- $$400 million new senior unsecured notes due 2022 'BB';
-- $460 million 3.25% cash convertible senior notes due 2014
'BB'.
Covanta Energy Corporation
-- Long-term IDR 'BB';
-- $900 million senior secured revolver due 2017 'BB+';
-- $300 million senior secured term loan due 2019 'BB+'.
COVANTA HOLDINGS: Moody's Affirms 'Ba2' CFR, Rates Sr Notes 'Ba3'
-----------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Covanta Holdings
Corporation, including its Corporate Family Rating (CFR) and
Probability of Default Rating at Ba2, and assigned a Ba3 rating to
CVA's planned issuance of senior unsecured notes. Concurrent with
this rating action, Moody's affirmed Covanta's senior unsecured
notes at Ba3, its speculative grade liquidity rating at SGL-1, and
assigned a Ba1 rating to the planned $900 million secured revolver
and $300 million secured term loan to be issued by Covanta Energy
Company (CEC), a Covanta subsidiary. The rating outlook for
Covanta and CEC remains stable.
Ratings Rationale
The rating action recognizes the continuation of relatively
consistent credit metrics supported by a diversified, largely
contracted portfolio of energy-from-waste (EfW) projects
principally located throughout the US. The rating incorporates the
strong operating performance of the portfolio and the relatively
high barriers to entry for most competing technologies. These
strengths are mitigated by the highly leveraged capital structure
that remains in place as well as the degree of structural
subordination that exists at the Covanta level. About $672 million
of secured project level debt is senior to holding company debt at
CEC and at Covanta. In most cases, documentation in the project
level debt agreements includes a restricted payments test which
must be satisfied in order for upstream dividends to be paid to
CEC and Covanta.
The rating recognizes that a large portion of Covanta's project
level debt has amortized over the past five years and such debt
repayment will continue based upon the terms and conditions in the
project documents. Moody's calculates that since 2007, about $564
million of project level debt has been repaid and through FYE
2013, 41% of the remaining project level debt or $275 million will
amortize. While such amortization represents a sizeable required
call on cash flow over that period, the debt repayment profile
reduces the degree of structural subordination and strengthens
overall credit quality. Covanta's current Ba2 CFR incorporates our
view that such debt amortization will likely be replaced by
additional project or corporate level debt to finance new
development projects and/or acquisitions. To that end, Moody's
observes with the completion of refinancing contemplated in the
announcement, corporate level funded debt at the Covanta and CEC
level will amount to $1.56 billion or nearly 70% of the
consolidated company. Moody's further observes that even with the
substantial project debt amortization, the majority of the
company's cash flow continues to be sourced by subsidiaries that
still have project level debt.
The rating action further acknowledges the announcement of a 100%
increase in the Covanta common dividend to 0.60 cents / share or
approximately $80 million annually along with board authorization
of an additional $100 million in share repurchases to be added to
the existing share repurchase program. Moody's calculates that in
the last two years, Covanta has utilized free cash flow and a
portion of asset sales proceeds to repurchase $324 million of
Covanta common stock and pay dividends of $265 million, including
the one-time $233 million dividend in 2010. Moody's also observes
that the new dividend level will, on an annualized basis,
represent a very high payout ratio relative to the company's
historical GAAP net income and management's 2012 earnings guidance
of 0.55-0.65/share. While the implementation of high dividend
payout ratio plus the authorization to increases share repurchases
are not positive factors to credit quality and will weaken the
balance sheet, Moody's calculate that the new dividend level will
represent about 50% of expected free cash flow in most years, when
one factors in the mandatory repayment of project level debt as a
use of cash. Moreover, Moody's believes that the pace at which
common shares will be repurchased will depend in large part on the
success that the company may have in securing future development
projects. In light of the highly contracted nature of Covanta's
business, which Moody's believes will not change appreciably in
the future, Moody's believes that this level of dividend can be
sustained while maintaining the current "Ba" rating category.
Covanta's financial metrics remain fairly stable and well-
positioned in the "Ba" rating category for unregulated power
companies. For example, for the three period 2009-2011, cash flow
(CFO-preW/C) to debt averaged 15.2%, retained cash flow to debt
12.3%, and free cash flow to debt 8.0% while cash flow interest
coverage ratio remained consistent at around 4.0x. Prospectively,
Moody's believes that Covanta should be able to generate similar
credit metrics over the next several years due to the high degree
of contractual revenue coupled with the firm's unique competitive
position, which has very high barriers for entry.
Covanta's speculative grade liquidity rating of SGL-1 is driven by
the ratinge agency's expectation that the company will maintain a
very good liquidity profile over the next 4 quarters as a result
of its generation of strong internal cash flows, continuance of
cash balances and access to committed credit availability. At
December 31, 2011, Covanta had approximately $232 million of
unrestricted cash, although Moody's understands that more than
half of this cash remains invested in non-US accounts to be used
for investment in future international development projects. In
addition to the cash on hand, at year-end 2011, Covanta had access
to availability of around $343 million under two credit facilities
that expire in 2013 and 2014. Moody's understands that Covanta is
in the process of replacing these two facilities with a new $900
million revolving credit facility (rated Ba1) due 2016. Moody's
intends to withdraw the existing Ba1 ratings on the two existing
credit facilities upon execution of the larger revolver. As of
December 31, 2011, Covanta was comfortably in compliance with the
financial covenants under its credit facilities.
For the next twelve months, Covanta has $144 million in required
project debt maturities. Moody's understands that at 12/31/2011
Covanta had $125 million in restricted cash available for debt
service. The next large debt maturity at Covanta is the $460
million of senior notes due in June 2014.
Net proceeds from the note offering will be primarily used to
partially refinance a $619 million secured term loan at CEC due
2014. The secured CEC term loan will be fully retired with the
planned completion of a new $300 million CEC term loan due 2019.
Moody's intends to withdraw the rating on the existing $619
million CEC term loan when the refinancing is completed. The new
Covanta unsecured notes will rank pari-passu with all present
($860 million) and future senior unsecured indebtedness of Covanta
and will be structurally subordinate to indebtedness of CEC and to
the approximate $672 million of project level debt.
The stable outlook on Covanta's rating reflects Moody's
expectation that: (i) the EfW projects' contracts with the
respective municipalities and utilities will remain in place
through their current maturities and that the company will
continue to have success extending the terms on expiring EfW
contracts; (ii) Covanta's management will continue to operate the
plants at high availability levels and maintain stability with
regard to administrative, operating, and maintenance expenses; and
(iii) Covanta will finance its development projects, acquisitions,
and future shareholder return strategies in a manner neutral to
credit quality.
Upward rating pressure could surface if Covanta successfully
extends its contracts on favorable terms, and finances new
development in a reasonably conservatively fashion leading to some
de-levering and resulting in a financial improvement such that
cash flow to debt exceeds 18% and cash flow coverage of interest
expense exceeds 4.5x on a sustainable basis.
The ratings could be lowered if the company significantly
increases leverage to finance an acquisition or return capital to
shareholders; if several projects are subject to unforeseen
capital expenditure requirements, particularly with regard to
environmental regulatory compliance; if several key projects have
extended outages; resulting in a decline in key financial metrics
including the ratio of cash flow to debt falling below 12% and
cash interest coverage declining to below 3.0x for an extended
period.
Ratings Affected Include:
Ratings Affirmed :
Issuer: Covanta Holding Corporation
-- Corporate Family Rating at Ba2
-- Probability of Default Rating at Ba2
-- Speculative Grade Liquidity Rating at SGL-1
Rating Assigned
Issuer: Covanta Holding Corporation
-- Senior Unsecured Conv./Exch. Bond/Debenture, Assigned Ba3
(75 - LGD5)
Issuer: Covanta Energy Corporation
-- Senior Secured Term Loan and Revolving Credit Facility,
Assigned Ba1 (23 --LGD2)
Ratings Affirmed / LGD assessments revised:
Issuer: Covanta Holding Corporation
-- Senior Unsecured Conv./Exch. Bond/Debenture to Ba3 (75 -
LGD5) from Ba3 (81 - LGD5)
Guarantor: Covanta ARC LLC
-- Niagara County Industrial Devel. Agency, NY, Series 2001
IRBs at Baa2 (LGD1, 1% from LGD2, 10%)
-- Delaware County Industrial Dev. Auth., PA, Series 1997-A
IRBs at Ba1 (LGD3, 32% from LGD2, 29%)
-- Connecticut Resources Recovery Authority, Ser. A and Ser.
1992 A IRBs at Ba1 (LGD3, 32% from LGD2, 29%)
The methodologies used in these ratings were Unregulated Utilities
and Power Companies published published in August 2009, and Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
Headquartered in Morristown, NJ, Covanta is primarily an owner and
operator of Energy-from-Waste (EfW) and renewable energy projects.
During 2011, operating revenues was approximately $1.6 billion.
CRESTWOOD HOLDINGS: Moody's Rates New $400MM Term Loan at 'Caa1'
----------------------------------------------------------------
Moody's assigned a Caa1 rating to Crestwood Holdings LLC's
proposed $400 million senior secured term loan. Crestwood's B2
Corporate Family Rating (CFR), the Caa1 rating on the existing
term loan, and the stable outlook remain unchanged. The B3 rating
on Crestwood Midstream Partners LP's (CMLP) senior notes, and
CMLP's stable outlook, also remain unchanged.
A portion of the proceeds from the proposed term loan will be used
to repay the existing term loan, at which time the ratings on the
existing term loan will be withdrawn. The remainder of the
proceeds from the proposed term loan will be used to fund a
portion of the acquisition of Marcellus Shale gathering assets
from Antero Resources Appalachian Corporation, as subsidiary of
Antero Resources LLC (B2 positive) through a newly formed joint
venture between Crestwood and CMLP called Crestwood Marcellus
Midstream (the JV).
Ratings Rationale
"The acquisition enhances Crestwood's basin and customer
diversification as well as overall scale," commented Jonathan
Kalmanoff, Moody's Analyst. "The increase in leverage as a result
of the acquisition is balanced by the improvement in business risk
profile."
Moody's stimates pro forma fourth quarter debt/EBITDA
(consolidating the debt and EBITDA of Crestwood, CMLP, and the JV)
to be approximately 6.7x on a quarterly run rate basis, and
expects that it will remain below 7.0x going forward which the
rating agency view sas consistent with the B2 CFR.
The Caa1 rating of Crestwood's term loan reflects both the overall
probability of default of Crestwood, to which Moody's assigns a
PDR of B2, and a loss given default of LGD5-86. The size of the
priority claim of CMLP's debt relative to the term loan results in
the term loan being rated two notches beneath the B2 CFR under
Moody's Loss Given Default Methodology. The B3 senior unsecured
note rating of CMLP reflects both the overall probability of
default of Crestwood, to which Moody's assigns a PDR of B2, and a
loss given default of LGD4-63%. The size of the priority claim of
CMLP's secured credit facility debt relative to its senior
unsecured notes results in the notes being rated one notch beneath
the B2 CFR under Moody's Loss Given Default Methodology.
Crestwood's B2 CFR is supported by fixed fee contracts that avoid
direct commodity price exposure, a moderate degree of basin and
customer diversification, exposure to producing basins with
liquids production, minimum volume commitments for a portion of
throughput, a management team with extensive experience in the
midstream sector, and a private equity sponsor with the industry
knowledge and financial capacity to support the company's growth
ambitions. The rating is restrained by business line concentration
relative to rated midstream peers, volumes driven by E&P drilling
activity which is indirectly tied to commodity prices, and high
consolidated leverage.
Crestwood and CMLP have adequate liquidity through the end of
2012. At December 31, 2011 (pro forma for the January equity
issuance, the pending acquisition, and the proposed JV credit
facility) total liquidity consisted of $162 million of
availability under the CMLP credit facility, subject to covenant
headroom, as well as $195 million of availability under the
proposed JV credit facility which can be used to provide liquidity
at the JV level. CMLP's capital budget for 2012 (after the
anticipated closing of the acquisition in the first quarter) does
not result in negative free cash flow and would not require use of
the credit facility for liquidity. Negative free cash flow at the
JV will be funded using the JV credit facility.
Financial covenants under the CMLP credit facility are EBITDA /
interest of at least 2.5x and Debt / EBITDA of not more than 5.0x.
While Moody's anticipates covenant tightness in the first quarter
of 2012 following the acquisition, the rating agency expects
covenant headroom to increase in the subsequent quarters of 2012
as EBITDA increases with planned drilling activity and minimal
capital expenditures avoid negative free cash flow. Covenants
under the proposed term loan at Crestwood and the proposed JV
credit facility have yet to be determined. There are no debt
maturities until 2015 when the CMLP credit facility matures.
Substantially all of the assets of Crestwood, CMLP, and the JV are
pledged as security under the credit facilities and term loan
which limits the extent to which asset sales could provide a
source of additional liquidity if needed.
Moody's could upgrade the ratings if it expects consolidated debt
/ EBITDA to be sustained below 5.0x while maintaining the current
business risk profile. Moody's could downgrade the ratings if the
ratinge agency expects consolidated debt / EBITDA to be sustained
at or above 7.0x.
The principal methodology used in rating Crestwood Holdings LLC
was the Global Midstream Energy 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.
Crestwood Holdings LLC is a private holding company owned
primarily by First Reserve Corporation. The company controls and
owns a majority ownership interest in Crestwood Midstream Partners
LP, a publicly traded midstream master limited partnership that
provides natural gas gathering and processing services.
CULLIGAN INT'L: Weighs Chapter 11 Filing; Hires Professionals
-------------------------------------------------------------
Thomson Reuters News & Insight reports that Culligan International
Co. has hired the law firm Debevoise & Plimpton and financial
adviser Evercore Partners as restructuring advisers and is
considering options including a possible bankruptcy.
According to the report, one option is a possible Chapter 11
bankruptcy filing, as the company struggles under roughly $900
million in loan debt that it has not refinanced. The debt matures
starting in May.
The report says shareholder Clayton Dubilier is also considering a
sale of Culligan, a move that could take place in or out of
bankruptcy.
The report notes Culligan's key debt holders include private
equity firms Centerbridge Partners and Angelo Gordon & Co. Both
firms did not return calls requesting comment.
Culligan's loans include a $110 million revolving credit line that
matures in May, a $565 million bank loan maturing in November and
a 175 million euro loan maturing in May 2013, according to
ThomsonReuters data. The agent on the loans is JPMorgan,
according to Reuters. Culligan's debt dates to 2007, when it
did a $900 million leveraged recapitalization, including a $375
million dividend payment to its equity holders, which included
Clayton Dubilier, Reuters reports, citing a Moody's Investor
Service 2007 press release.
The report says, in November, Standard & Poor's Financial Services
said in a report that the company had a significant refinancing
risk in the next 6 to 12 months and that it had insufficient
liquidity and negative free cash flow. S&P in May downgraded the
company's credit rating on the heels of Culligan's announcement
that it planned to start seeking buyers for about 100 company-
owned dealerships, the report adds.
About Culligan International
Culligan International Co. is a water services provider based in
Rosemont, Illinois. The company distributes its products
primarily through an extensive dealer network.
As reported by the Troubled Company Reporter on May 25, 2011,
Standard & Poor's lowered its ratings on Culligan, including its
corporate credit rating to 'CCC+' from 'B-'. S&P also revised its
recovery ratings on the company's first-lien credit facilities to
'4' from '3'. The negative outlook reflects the company'
continued very weak operating performance, as well as uncertainty
about Culligan's ability to meet future liquidity needs given its
significant refinancing risk within the next 11-19 months, S&P
stated.
The ratings on Culligan reflect the company's very highly
leveraged financial profile, which includes significant
refinancing risk. The rating outlook is negative, reflecting
Culligan's significant refinancing risk, as well as Standard &
Poor's belief that the company's financial performance will
continue to be hurt by the lingering weak macroeconomic
environment.
On May 16, 2011, the TCR reported that Moody's has lowered the
corporate family rating (CFR) and probability of default rating of
Culligan International Company to Caa3 from Caa1. At the same
time, the ratings on the first lien facilities were lowered to
Caa2 from B3 and the rating on the second lien term loan was
lowered to Ca from Caa3. The ratings outlook is negative.
The downgrade of the CFR to Caa3 reflects Moody's expectation that
Culligan's default risk will continue to increase over the next
twelve to eighteen months as the maturities of its revolver and
term loan approach in May 2012 and November 2012, respectively.
The Caa3 rating reflects this heightened risk of default as well
as the company's high leverage, roughly 15.0x, weakness in its
operating performance and ongoing cash consumption. Moody's
anticipates that existing cash balances, revolver availability
(through March 2012) and expected proceeds from the sale of its
company owned dealerships in North America should fund operations
through the maturity of the term loan. However, given the
approaching debt maturities and an over-leveraged capital
structure, Moody's anticipates that a distressed exchange,
bankruptcy or a payment default over the next eighteen months is
possible.
CUMULUS MEDIA: Canyon Capital Raises Ownership to 15.7%
-------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Canyon Capital Advisors LLC and its
affiliates disclosed that, as of Feb. 29, 2012, they beneficially
own 22,161,404 shares of common stock of Cumulus Media Inc.
representing 15.69% of the shares outstanding. The TCR reported
Feb. 17, 2012, on Canyon Capital's disclosure of ownership of
8,894,635 common shares or 6.92% equity stake. A copy of the
latest filing is available for free at:
http://is.gd/GTQxGG
About Cumulus Media
Based in Atlanta, Georgia, Cumulus Media Inc. (NASDAQ: CMLS) --
http://www.cumulus.com/-- is the second largest radio broadcaster
in the United States based on station count, controlling 350 radio
stations in 68 U.S. media markets. In combination with its
affiliate, Cumulus Media Partners, LLC, the Company believes it is
the fourth largest radio broadcast company in the United States
when based on net revenues.
The Company's balance sheet at Sept. 30, 2011, showed
$4.07 billion in total assets, $3.65 billion in total liabilities,
$110.93 million in total redeemable preferred stock, and
$306.39 million in total stockholders' equity.
Cumulus Media put AR Broadcasting Holdings Inc. and three other
units to Chapter 11 protection (Bankr. D. Del. Lead Case No.
11-13674) after struggling to pay off debts that topped
$97 million as of June 30, 2011. Holdings estimated debts between
$50 million and $100 million but said assets are worth less than
$50 million. AR Broadcasting are Missouri and Texas radio
stations.
* * *
Standard & Poor's Ratings Services in October 2011 affirmed is 'B'
corporate credit rating on Cumulus Media.
"The ratings reflect continued economic weakness and higher post-
acquisition leverage than we initially expected," said Standard &
Poor's credit analyst Jeanne Shoesmith. "They also reflect the
combined company's sizable presence in both large and midsize
markets throughout the U.S."
CYTOCORE INC: Palex CEO, 2 Others Named to Board
------------------------------------------------
Cytocore, Inc., appointed Dr. Mauro Scimia, Dr. Xavier Carbonell,
and Dr. Augusto Ocana to serve as directors of the Company until
the Company's next annual meeting of stockholders and until their
respective successors are duly appointed and qualified.
Dr. Scimia has served as a consultant to the Company since 2011.
Prior to this, from 2009 to 2011, he served as a consultant to
Greiner BioOne, a life sciences company, where he assisted with
establishing distribution networks and developing a private
laboratory network. During 2007 and 2008, he served as a
consultant to Third Wave Technologies (Madison), a developer of
cervical cancer screening tests, where he assisted with
establishing distribution channels in Italy, France and Spain.
From 2000 to 2006, Mr. Scimia served as the Country Manager for
Cytyc Italy, a subsidiary of Cytyc Corporation. Prior to this, he
served in several sales and management positions for several
pharmaceutical and life sciences companies.
Dr. Carbonell has served as the Chief Executive Officer of Palex
Medical, SA, a medical device distribution company located in
Spain, since 2008. Prior to this, from 2004 to 2008, he served as
the Oncology Business Unit Director for Amgen, a publicly traded
biotechnology company. Prior to this, from 2002 to 2004, he was
the Medical Director for the Oncology Business Unit at Novartis.
Before Novartis, he held several positions in the medical oncology
field, including serving as a Medical Oncologist at several public
and private institutions.
Mr. Ocana has served as the President of Worldwide Business of the
Company since 2006. Prior to this, from 1999 to 2006, he was a
Senior Vice President, General Manager and Director of C.H.
Werfen, S.A., where he focused on sales and market development.
Prior to this, he served in sales and management roles for several
corporations, including Abbott Laboratories.
About Cytocore Inc.
Headquartered in Chicago, Illinois, CytoCore Inc. (OTC BB: CYOE)
-- http://www.cytocoreinc.com/-- is a biomolecular diagnostics
company engaged in the design, development, and commercialization
of cost-effective screening systems to assist in the early
detection of cancer. CytoCore(R) is currently focused on the
design, development, and marketing of its CytoCore Solutions(TM)
System and related image analysis platform. The CytoCore
Solutions(TM) System and associated products are intended to
detect cancer and cancer-related diseases, and may be used in a
laboratory, clinic, or doctor's office.
The Company reported a net loss of $2.09 million in 2010 and a net
loss of $3.55 million in 2009. The Company also reported a net
loss of $1.55 million for the nine months ended Sept. 30, 2011.
The Company's balance sheet at Sept. 30, 2011, showed
$1.67 million in total assets, $6.58 million in total liabilities,
all current, and a $4.90 million total stockholders' deficit.
As reported by the TCR on April 18, 2011, L J Soldinger Associates
LLC, in Deer Park, Illinois, said in its audit report on the
financial statements for the year ended Dec. 31, 2010, that the
Company's recurring losses from operations and resulting
dependence upon access to additional external financing, raise
substantial doubt concerning its ability to continue as a going
concern.
DCP MIDSTREAM: Moody's Says Profile Consistent of 'Ba1' Rating
--------------------------------------------------------------
Moody's Investors Service assigned a first time Baa3 rating to DCP
Midstream Operating, LP's offering of $350 million senior
unsecured notes due 2022. At the same time, Moody's also assigned
a Baa3 rating to its $250 million senior unsecured notes due 2015.
The proceeds of the offering will be used for debt repayment,
acquisition financing and for general corporate purposes. The
rating outlook is stable. DCP Midstream Operating, LP is the
principal operating subsidiary of DCP Midstream Partners, LP (DPM)
who will fully and unconditionally guarantee the notes.
Ratings Rationale
"This notes offering together with its just concluded $250 million
issuance of common units will further solidify DPM's capital
position ," commented Andrew Brooks, Moody's Vice President." DPM
continues to conservatively build out its midstream energy asset
base under the auspices of its general partner, DCP Midstream,
LLC, an ownership stake which figures prominently in DPM's
rating."
DPM, a publicly traded master limited partnership (MLP), was
established in 2005 by DCP Midstream, LLC (DCP, Baa2 stable) that
holds a 0.7% general partnership (GP) interest and a 24.6% limited
partnership (LP) interest in DPM. DCP is a 50/50 partnership
between Spectra Energy Corp and ConocoPhillips (COP, A1 on review
for downgrade). DCP is the largest producer of natural gas liquids
(NGLs) in the US. DPM operates in three business segments: natural
gas gathering, processing, transport and marketing (68% of 2011
EBITDA) NGL pipelines and marketing (16%); and wholesale propane
(16%).
On a stand-alone basis, Moody's views DPM's credit profile as more
consistent with that of a Ba1 rating, reflecting the extent to
which fee-based and hedged margins generate cash flow stability,
its readily identifiable and scalable growth prospects, the
increased leverage incurred to finance that growth, as well as its
exposure to potential volumetric risk, and the typical narrow
distribution coverage characteristic of MLP structures. The Baa3
rating, however, reflects uplift from its coordinated relationship
with DCP with which it shares a co-investment growth strategy.
Through a series of announced and targeted asset drop-downs from
DCP aggregating over $2.2 billion through 2014, DPM should grow
scale solidly into its Baa3 rating. The anticipated asset drop-
downs, largely in its NGL segment, will add to the diversity and
balance of DPM's midstream portfolio, and increase fee-based
margin contribution from 2011's 60% to as much as 80% by 2015.
While an increase in debt leverage will accompany this growth, DPM
has historically evidenced a balanced mix of debt and equity
funding.
DPM's stable outlook reflects the relative consistency of its cash
flow, sourced from its diverse portfolio of predominantly fee-
based midstream assets. While a rating upgrade in the near term is
unlikely in the present mode of growing to achieve scale, an
upgrade could be considered should net PP&E exceed $2.5 billion,
presuming limited deviation from DPM's focus on fee-generating
midstream investments, and presuming that DPM achieves debt/EBITDA
remaining consistently below 3.5x. A rating downgrade would be
considered should DPM lever up to finance its growth and remain
over 4.5x debt/EBITDA, should scale not materialize as
anticipated, or should it materially deviate from its stated
policy of minimizing cash flow volatility through the nature of
the assets it owns and operates. Furthermore, should a leveraging
event or changed financial policy at DCP weaken its credit
standing, this could pressure ratings at DPM. Moody's notes that
the pending transfer of COP's 50% stake in DCP to the new Phillips
66 (Baa1 stable) is not considered a credit negative in the
context of DPM's or DCP's rating.
The principal methodology used in rating DCP Midstream was the
Global Midstream Energy 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.
DPM is headquartered in Denver, Colorado.
DEE ALLEN: Case Trustee Amends Terms of Ray Quinney Employment
--------------------------------------------------------------
Gil A. Miller, the Chapter 11 Trustee for the consolidated estate
of Dee Allen Randall, asks the U.S. Bankruptcy Court to approve
amendments to the terms of the of employment of Ray, Quinney &
Nebeker, which is being retained with respect to litigation
matters.
The Chapter 11 Trustee seeks approval of the terms of a
contingency agreement, wherein the Trustee proposes to pay RQN on
a contingency fee basis instead of on an hourly basis.
The Chapter 11 Trustee has hired Reid Collins and Tsai to serve as
lead litigation counsel. RQN will act as local litigation
counsel.
In consideration for the risk that the firms are undertaking by
accepting the engagement on a purely contingent basis, they will
be paid pay a 25% Gross Contingent Fee for any recoveries obtained
before a lawsuit is filed. In the event lawsuits are filed, the
firms will be paid 40% Gross Contingent Fee for any recoveries
obtained.
RCT and RQN agree to divide the fees in this manner:
-- RCT will receive 17.5% of all Pre-Suit Recoveries and
RQN will receive 7.5% of all Pre-Suit Recoveries; and
-- RCT will receive 30% of all Post-Suit Recoveries and
RQN will receive 10% of all Post-Suit Recoveries.
About Dee Allen Randall et al.
Dee Allen Randall in Kaysville, Utah, filed for Chapter 11
bankruptcy (Bankr. D. Utah Case No. 10-37546) on Dec. 20, 2010, to
forestall creditors while he reorganized his finances. His
companies include Horizon Mortgage & Investment, Horizon Financial
& Insurance Group and Horizon Auto Funding. Judge Joel T. Marker
presides over the bankruptcy case. Mr. Randall hired
1 On 1 Legal Services, P.L.L.C. as counsel. In his petition,
Mr. Randall estimated $10 million to $50 million in assets and
$1 million to $10 million in debts.
Mr. Randall claims he was conducting a "legal Ponzi scheme," but
authorities are investigating him for possible violations of the
law in an operation that took in $65 million from 700 or so
investors.
Gil A. Miller was appointed as Chapter 11 trustee for Mr.
Randall's bankruptcy estate.
On Oct. 12, 2011, Mr. Miller placed Mr. Randall's corporate
entities -- Horizon Auto Funding, LLC, Independent Commercial
Lending LLC, Horizon Financial Center I LLC, Horizon Mortgage and
Investment Inc. and Horizon Financial & Insurance Group Inc. -- in
bankruptcy by filing separate Chapter 11 petitions (Bankr. D. Utah
Case Nos. 11-34826, 11-34830, 11-34831, 11-34833 and 11-34834).
Judge Joel T. Marker presides over the 2010 and 2011 cases.
Michael R. Johnson, Esq., Brent D. Wride, Esq., and David H.
Leigh, Esq., at Ray Quinney & Nebeker P.C., serve as counsel to
the Chapter 11 Trustee. Mr. Miller requested for the joint
administration of Mr. Randall's and the corporate Debtors' cases
for procedural purposes. The trustee hired Fabian & Clendenin as
special counsel.
DEE ALLEN: Case Trustee Hires Reid Collins as Litigation Counsel
----------------------------------------------------------------
Gil A. Miller, the Chapter 11 Trustee for the consolidated estate
of Dee Allen Randall, asks permission from the U.S. Bankruptcy
Court to employ Reid Collins & Tsai LLP as special litigation
counsel. RCT will be paid a contingency fee on recoveries
obtained for the Trustee, on behalf of the consolidated estate.
Dee Allen Randall in Kaysville, Utah, filed for Chapter 11
bankruptcy (Bankr. D. Utah Case No. 10-37546) on Dec. 20, 2010, to
forestall creditors while he reorganized his finances. His
companies include Horizon Mortgage & Investment, Horizon Financial
& Insurance Group and Horizon Auto Funding. Judge Joel T. Marker
presides over the bankruptcy case. Mr. Randall hired
1 On 1 Legal Services, P.L.L.C. as counsel. In his petition,
Mr. Randall estimated $10 million to $50 million in assets and
$1 million to $10 million in debts.
Mr. Randall claims he was conducting a "legal Ponzi scheme," but
authorities are investigating him for possible violations of the
law in an operation that took in $65 million from 700 or so
investors.
Gil A. Miller was appointed as Chapter 11 trustee for Mr.
Randall's bankruptcy estate.
On Oct. 12, 2011, Mr. Miller placed Mr. Randall's corporate
entities -- Horizon Auto Funding, LLC, Independent Commercial
Lending LLC, Horizon Financial Center I LLC, Horizon Mortgage and
Investment Inc. and Horizon Financial & Insurance Group Inc. -- in
bankruptcy by filing separate Chapter 11 petitions (Bankr. D. Utah
Case Nos. 11-34826, 11-34830, 11-34831, 11-34833 and 11-34834).
Judge Joel T. Marker presides over the 2010 and 2011 cases.
Michael R. Johnson, Esq., Brent D. Wride, Esq., and David H.
Leigh, Esq., at Ray Quinney & Nebeker P.C., serve as counsel to
the Chapter 11 Trustee. Mr. Miller requested for the joint
administration of Mr. Randall's and the corporate Debtors' cases
for procedural purposes. The trustee hired Fabian & Clendenin as
special counsel.
DEEP DOWN: Buys Back 800,000 Shares at $0.06 Apiece
---------------------------------------------------
Deep Down, Inc., completed the acquisition of 800,000 shares of
its common stock in a private purchase transaction. Deep Down
paid $48,000 to the seller in consideration for all of those
seller's shares of stock in Deep Down. The per share purchase
price of $0.06 represented a per share amount 14% below the $0.07
current market price of the Company's common stock in the over-
the-counter market on March 2, 2012. Deep Down paid the entire
purchase price from cash on hand.
About Deep Down
Houston, Tex.-based Deep Down, Inc. --
http://www.deepdowncorp.com/-- is an oilfield services company
specializing in complex deepwater and ultra-deepwater oil
production distribution system support services, serving the
worldwide offshore exploration and production industry.
The Company reported a net loss of $17.41 million on
$42.47 million of revenue for the year ended Dec. 31, 2010,
compared with a net loss of $16.78 million on $28.81 million of
revenue during the prior year.
The Company reported a net loss of $1.19 million on $21.94 million
of revenue for the nine months ended Sept. 30, 2011, compared with
a net loss of $7.38 million on $26.23 million of revenue for the
same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed
$32.45 million in total assets, $11.02 million in total
liabilities, and $21.43 million in total stockholders' equity.
During the Company's fiscal years ended Dec. 31, 2010 and 2009,
the Company has supplemented the financing of its capital needs
through a combination of debt and equity financings. Most
significant in this regard has been the Company's debt facility
the Company has maintained with Whitney National Bank. The
Company's loans outstanding under the Amended and Restated Credit
Agreement with Whitney become due on April 15, 2012. The Company
will need to raise additional debt or equity capital or
renegotiate the existing debt prior to such date. The Company is
currently in discussions with several lenders who have expressed
interest in refinancing its debt. The Company's plan is to
refinance the outstanding indebtedness under the Restated Credit
Agreement or seek terms with Whitney that will provide an
extension of such Restated Credit Agreement along with additional
liquidity. However, the Company cannot provide any assurance that
any financing will be available to it on acceptable terms or at
all. If the Company is unable to raise additional capital or
renegotiate its existing debt, this would have a material adverse
impact on the Company's business or would raise substantial doubt
about its ability to continue as a going concern. In addition, as
of Dec. 31, 2010, the Company was not in compliance with the
financial covenants under the Restated Credit Agreement. On
March 25, 2011 the Company obtained a waiver for these covenants
as of Dec. 31, 2010.
DIPPIN' DOTS: Will Have Chief Restructuring Officer
---------------------------------------------------
The Deal Pipeline reports that Judge Thomas H. Fulton of the U.S.
Bankruptcy Court for the Western District of Kentucky approved on
March 6 a motion resolving issues surrounding Dippin' Dots Inc.,
its creator and president, Curt Jones; and secured creditor
Regions Bank involving a Chapter 11 trustee and postpetition
financing.
According to the report, the parties filed a motion for an order
approving an agreed-upon stipulation that would resolve Regions'
motion for a Chapter 11 trustee by appointing a chief
restructuring officer. The stipulation also resolves Dippin'
Dots' motion seeking a debtor-in-possession loan from Fischer
Ventures.
The report notes Dippin' Dots has withdrawn its borrowing motion
and Regions has withdrawn its trustee motion, with the option of
filing a second trustee motion if the CRO is incapacitated or
displaced, court documents show.
Judge Fulton approved the stipulation.
The report relates, under the terms of the agreement, Dippin' will
have the continued right to use its cash collateral as long as it
isn't in default. Dippin' Dots can borrow an additional
$1.25 million in new money from Regions for working capital. It
can do so under the same terms as its first DIP, which was for
$201,842. The loan will have an 11.5% interest rate and will
mature on the closing of a sale or if Dippin' Dots defaults,
whichever comes first.
The report notes Mr. Jones will resign as a member of the board of
directors and employee of the company. The CRO will assume Mr.
Jones' authority and responsibilities. Mr. Jones will also be
enjoined from using his shares in the company to take action or
interfere with the CRO.
The report says Greg Charleston of Conway MacKenzie Inc. will be
the CRO.
According to the report, Regions Bank filed an emergency motion to
appoint a Chapter 11 trustee on Feb. 24, alleging Dippin' Dots
hadn't complied with a cash collateral budget and that Mr. Jones
was not acting in the best interests of the company or its
creditors. Dippin' Dots has submitted a revised budget.
The report notes Regions Bank said the Dippin' Dots cash
collateral order contains a provision that gives the lender the
right to move for a Chapter 11 trustee if the debtor does not
comply with its budget. Specifically, under the terms of the cash
collateral agreement, Dippin' Dots must not deviate by more than
10% from its proposed budget. The debtor deviated by as much as
71.3%, Regions said.
The report notes Regions, owed about $10.8 million from
prepetition loans and $201,842 from the original Dippin' DIP, also
said it was unwilling to advance the company any more money unless
Mr. Jones was replaced by a Chapter 11 trustee.
Regions Bank asserted Mr. Jones isn't allowing court-retained
broker Harpeth Capital LLC to entertain offers for an asset sale
and instead has directed the broker to focus on transactions that
would allow Mr. Jones to maintain his equity and executive
position at the company, the report notes.
According to the report, the lender said it learned at a Feb. 23
deposition, where Mr. Jones was supposed to produce his shares of
nondebtor affiliate Dippin' Dots Franchising Inc., that he had
sold 51% of those shares to Fischer Ventures LLC, which had also
proposed giving the debtor a $2 million DIP loan. Regions alleged
the sale happened after Mr. Jones was served with the subpoena to
show up with the shares.
According to the report, DDF owed Dippin' Dots about $286,431 in
intercompany accounts receivable, which Regions alleged Mr. Jones
has not tried to collect. DDF paid Dippin' Dots $240,411. Mr.
Jones also owes Dippin' Dots $900,000 from an "officers loan,"
which also hasn't been collected, according to court papers. In
addition, Mr. Jones has equity in nondebtor affiliates that owe
Dippin' Dots about $847,862.
The report relates, in a response filed Feb. 28, Dippin' Dots
argued for denial of the trustee motion. Dippin' Dots attributed
the budget deviation to $175,639 in unexpected freezer repairs
after its main freezer stopped working in December. Dippin' Dots
also asserted Mr. Jones sold the DDF shares to raise working
capital for the debtor and that Regions didn't cite a statute
under which Mr. Jones wouldn't have been allowed to transfer the
shares.
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.
DJO FINANCE: Moody's Rates $230-Mil. 2nd Lien Notes at 'B2'
-----------------------------------------------------------
Moody's Investors Service rated DJO Finance LLC's $943 million
senior secured credit facilities at Ba2 and $230 million senior
secured second lien notes at B2. Moody's also affirmed the
Corporate Family and Probability of Default Rating at B2 and
Speculative Grade Liquidity Rating at SGL-3. The senior secured
credit facilities consist of a new $100 million revolving credit
facility expiring in 2017, and Moody's estimates approximately
$400 million of the existing term loan will be extended to 2016
from 2014, a new $300 million term loan will be issued and due in
2017, approximately $143 million of existing term loans will not
be extended and hence will mature in 2014. Moody's notes that the
$400 million extended term loan and new $300 million term loan
contains a springing maturity if 91 days prior to November 15,
2014, $150 million or more of the senior notes due in 2014 remain
outstanding. All proceeds will be used to refinance the company's
existing credit facilities and retire about $210 million of the
10.875% senior notes due 2014. Upon completion of the transaction,
the company's $100 million revolver expiring in 2013 will be
withdrawn. The outlook was changed to negative.
The change in the outlook to negative from stable reflects the
weakening of DJO's financial performance coupled with worsening
financial metrics. "DJO has faced recent challenges in the form of
weak volumes in its recovery science division and lost sales
associated with the challenges meeting customer orders following
the launch of a new ERP system," stated Ron Neysmith, Senior
Analyst at Moody's. "This has delayed the company's improvement in
key credit metrics by about four quarters from where we previously
expected," added Neysmith. Leverage for fiscal 2012 is anticipated
to be around 7.5 times. Moody's had previous expected leverage to
be below 7 times by December 31, 2012.
The following instrument ratings and LGD assessments have been
affected:
DJO Finance LLC
Ratings assigned:
$100 million senior secured revolver expiring 2017 at Ba2
(LGD 2, 17%)
$300 million senior secured term loan due 2017 at Ba2
(LGD 2, 17%)
$400 million senior secured term loan due 2016 at Ba2
(LGD 2, 17%)
$230 million second lien notes due 2018 at B2 (LGD 3, 47%)
Ratings affirmed:
Corporate Family Ratings at B2
Probability of Default Rating at B2
$143 million senior secured term loan due 2014 at Ba2 (LGD 2,
17%)
$468 million senior unsecured notes due 2014 at B3 (LGD 5, 73%)
from (LGD 4, 68%)
$300 million senior unsecured notes due 2018 at B3 (LGD 5, 73%)
from (LGD 4, 68%)
$300 million subordinated notes due 2017 at Caa1(LGD 6, 93%)
Speculative Grade Liquidity Rating at SGL-3
Ratings to be withdrawn:
$100 million senior secured revolver expiring 2013 at Ba2
(LGD 2, 17%)
Ratings Rationale
DJO's B2 Corporate Family Rating reflects the company's high
financial leverage, limited coverage of interest expense and
modest free cash flow generation. Moody's expects the company's
financial metrics to remain weak through 2012, although, gradually
improving with higher EBITDA contributions from four acquisitions
made in 2011. Furthermore, during 2011, the company experienced
deteriorating operating margins, primarily due to a change in its
sales mix. Going forward, Moody's expects near-term margin
improvement resulting from the realization of merger-related
synergies and other cost savings initiatives. The ratings are
supported by DJO's solid scale and market position across many of
the company's product lines, good customer and geographic
diversification, and favorable industry trends.
The ratings could be downgraded if the company is unable to
improve its financial performance, should its liquidity profile
deteriorate further and if the company experienced any delay in
refinancing 2014 maturities. In addition, the ratings could be
downgraded if Moody's comes to believe that the company will be
unable to reduce financial leverage to around 7.0 times by the end
of 2012, with continued progression towards 6.0 times.
The outlook could be changed back to stable if the company is able
to reduce debt to EBITDA to below 6.5 times. In addition, Moody's
could consider a rating upgrade if it expects adjusted debt to
EBITDA to decline below 5.5 times and free cash flow to debt to
increase above 8% on a sustained basis.
Principal Methodology
The principal methodologies used in this rating were Global
Medical Products & Device Industry published in October 2009, and
Loss Given Default for Speculative-Grade Non-Financial Companies
in the U.S., Canada and EMEA published in June 2009.
Based in Vista, California, DJO Finance LLC, is a developer,
manufacturer and distributor of medical devices that provide
solutions for musculoskeletal health, vascular health and pain
management. The company also develops, manufactures and
distributes a broad range of reconstructive joint implant
products. The company's products are used to treat patients with
musculoskeletal conditions resulting from degenerative diseases,
deformities, traumatic events and sports related injuries. Many of
the company's non-surgical devices are also used by athletes and
individuals for injury prevention and at home physical therapy
treatment. DJO has been owned by private equity sponsors
Blackstone Management Partners V L.L.C. since 2006. For the year
ended December 31, 2011, DJO generated net sales of approximately
$1.1 billion.
DOMTAR CORPORATION: DBRS Assigns New Debt Issuance at 'BB'
----------------------------------------------------------
DBRS has assigned a rating of BB (high) and a recovery rating of
RR1, with a Stable trend, to Domtar Corporation's (Domtar or the
Company) new debt issuance of $300 million 4.4% senior notes due
April 1, 2022. The transaction is expected to close on or about
March 16, 2012.
The Notes will be unsecured obligations ranking equally with
Domtar's other senior unsecured indebtedness. Proceeds are
expected to be used to fund the purchase price of the 10.750%
notes due in 2017, 9.500% notes due in 2016, 7.125% notes due in
2015 and 5.375% notes due in 2013, tendered and accepted by the
Company for purchase pursuant to its previously announced tender
offer with maximum aggregate consideration not exceeding $250
million. The remaining proceeds are expected to be used for
general corporate purposes.
DOWNEY REGIONAL: Emerges From Chapter 11 Protection
---------------------------------------------------
Deborah Crowe at Los Angeles Business Journal reports that Downey
Regional Medical Center said it has emerged from Chapter 11
reorganization and received $52 million in debt financing.
The report relates Downey Regional has issued $32 million in new
taxable bonds through the Independent Cities Finance Authority,
a joint powers authority based in Palmdale, and entered into a
$20 million credit facility with Midcap Financial LLC, a private
health care financing firm with offices in Los Angeles.
"Downey Regional Medical Center's recovery is a success story
almost without parallel," the report quotes hospital Chief
Executive Kenneth Strople as stating. "Hospitals don't usually
survive bankruptcy intact, let alone unaffiliated, let alone
during a severe national recession and an economy that did not
support viable capital markets."
About Downey Regional
Downey Regional Medical Center is a 90-year-old, 199-bed, not-for-
profit regional hospital and medical center in Southeast Los
Angeles County, California. Downey Regional Medical sought
Chapter 11 protection (Bankr. C.D. Calif. Case No. 09-34714) on
Sept. 14, 2009. Lisa Hill Fenning, Esq., at Arnold & Porter LLP
in Los Angeles, represents the Debtor in its restructuring effort.
In its petition, the Debtor estimated assets and debts between
$10 million and $50 million.
According to the Troubled Company Reporter on Feb. 7, 2012,
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reported that Downey Regional Medical Center-Hospital Inc. won
approval of the reorganization plan on Jan. 30. The hospital will
continue operating as a not-for-profit institution. About
$16.5 million in taxable bonds will be repurchased as part of the
plan. The hospital received a favorable vote from all creditor
classes except one.
TCR related that the stand-alone plan received a favorable vote
from all creditor classes except one. The hospital will remain as
a nonprofit institution. About $16.5 million in taxable bonds
will be repurchased as part of the plan.
DYNEGY INC: Examiner Finds Prepetition Transfers Fraudulent
-----------------------------------------------------------
Susheel Kirpalani, the bankruptcy court-appointed Chapter 11
Examiner, found that although the first phase of the prepetition
restructuring of Dynegy Holdings, LLC, and its debtor affiliates
was permissible, the second phrase, which consisted of the
transfer of CoalCo, was fraudulent.
In a report submitted to the U.S. Bankruptcy Court for the
Southern District of New York on March 9, 2012, the Chapter 11
Examiner detailed his findings as a result of his investigation
into certain issues relating to the conduct of the Debtors in the
months leading up to their Nov. 7, 2011 bankruptcy filing.
The Chapter 11 Examiner related that Dynegy Inc., in carrying out
its restructuring strategy, believed that even if Dynegy Holdings
was insolvent, as long as it transferred assets in exchange for
what the law considers "reasonably equivalent value," then
creditors would have no legitimate cause to complain.
The Chapter 11 Examiner said that the first phase of the
prepetition restructuring -- transfers incident to the creation of
two distinct silos of assets, CoalCo and GasCo -- was permissible
because those transfers did not injure creditors and were not, in
and of themselves, intended to do so. While it is true that as a
result of the ring-fencing and attendant refinancing of pre-
existing secured bank debt, unsecured creditors of Dynegy Holdings
could look only to the residual equity value of CoalCo and GasCo,
this was, as a practical matter, always the case for unsecured
creditors of Dynegy Holdings, regardless of whether the silos were
created, the Chapter 11 Examiner added.
With respect to the second phase of the restructuring, the Chapter
11 Examiner said that strategy was ill-conceived. The second
phase involved the transfer or purported ?sale? of CoalCo by
Dynegy Holdings to Dynegy Inc. in exchange for an illiquid,
unsecured, highly unusual financial instrument called an
"undertaking." The Examiner said the undertaking had no covenants
to protect the holder?s value against other actions that might be
taken by Dynegy Inc. The Examiner believes that the undertaking
had a midpoint value at the time of approximately $860 million.
The Chapter 11 Examiner pointed out that immediately after Dynegy
Inc. provided the undertaking, Dynegy Inc. and Dynegy Holdings
agreed to amend it so Dynegy Inc. could reduce its payment
obligations by $1.678 over the course of the payment stream -- an
amount apparently designed to mimic a dollar-for-dollar present
value reduction -- for each dollar face amount of Dynegy Holdings
bonds that was acquired or otherwise retired by Dynegy Inc., even
if that debt was acquired or retired at a discount to the face
amount. Dynegy took the position that Dynegy Inc.?s future
satisfaction of Dynegy Holdings?s debt would constitute value, as
a matter of law, measured by the face amount of that debt -- no
matter what Dynegy Inc. paid for that debt, and regardless of
whether Dynegy Inc. paid for that debt by pledging the stock of
its newly acquired direct subsidiary, CoalCo.
In this way, Dynegy Holdings transferred to Dynegy Inc. not only
CoalCo, but also the corporate opportunity to use CoalCo as a
vehicle for exchanging its outstanding bonds for structurally
senior bonds at a discount, or otherwise to control its own
restructuring of indebtedness with its own assets, the Chapter 11
Examiner related in court papers.
The Chapter 11 Examiner further said that the addition of the
payment reduction mechanism into the amended undertaking rendered
the undertaking unsalable to third-parties, and thereby further
eroded the value of the undertaking to Dynegy Holdings.
The transaction transferred hundreds of millions of dollars away
from Dynegy Inc.?s creditors in favor of its stockholders, the
Chapter 11 Examiner opined.
The Examiner concluded that the conveyance of CoalCo to Dynegy
Inc. was an actual fraudulent transfer and, assuming that Dynegy
Holdings was insolvent on the date of the transfer, a constructive
fraudulent transfer, and a breach of fiduciary duty by the board
of directors of Dynegy Holdings.
Dynegy Inc., through its board of directors, used its power to
control the affairs of Dynegy Holdings -- an insolvent subsidiary
whose property should have been maximized, or at least
safeguarded, for the benefit of Dynegy Holding?s creditors -- to
disadvantage Dynegy Holdings for the benefit of Dynegy Inc., the
Examiner pointed out.
The Examiner said Dynegy Inc.?s conduct provides a basis for
disregarding the corporate separateness among Dynegy Inc., Dynegy
Holdings, and Dynegy Holdings?s newly formed shell subsidiary,
DGI. Because of that DGI should be considered the alter ego of
Dynegy Holdings, and DGI?s transfer of CoalCo should be deemed a
transfer to Dynegy Inc. of an interest in property of Dynegy
Holdings, the Examiner said. In that event, Dynegy Holdings would
have a claim against Dynegy Inc. for the fraudulent transfer of
CoalCo, the Examiner told the Court. Alternatively, to remedy the
injustice occasioned upon Dynegy Holdings and, derivatively, its
creditors, CoalCo should be deemed property of Dynegy Holdings?s
bankruptcy estate, the Examiner held. Finally, the breach of
fiduciary duty by the board of directors of Dynegy Holdings should
be equally attributed to the board of directors of Dynegy Inc.,
the Examiner added.
The Examiner further concluded that the Bankruptcy Court could
confirm a Chapter 11 plan for Dynegy Holdings, but, in light of
the conduct of all but one of the members of the board of Dynegy
Inc. as of September 1, 2011, four of whom now constitute the
majority of the board of Dynegy Holdings, any plan that provides
for these individuals to continue as directors would not be
consistent with the interests of creditors and with public policy.
The Examiner does not believe the continued service by senior
management of Dynegy Inc., even in director or officer capacities,
would be contrary to creditor interests or public policy.
A redacted copy of the Examiner's Report dated March 9, 2012, is
available for free at:
http://bankrupt.com/misc/dynegyexamrpt0309.pdf
* * *
Dynegy Inc. (DYN) closed at a record low on March 9 after the
Chapter 11 Examiner reported that the prepetition restructuring of
its units was fraudulent and harmed creditors, David McLaughlin
and Jim Polson of Bloomberg News reported on March 10.
Dynegy plunged 36 percent to 76 cents in New York Stock Exchange
composite trading, bringing the past year?s decline to 86%, the
March 10 Bloomberg report related.
Dynegy Holdings? $1 billion of 8.375% debt due 2016 rose 4.25
cents to 69 cents on the dollar at 2:20 p.m. New York time, on
March 9, according to Trace, the bond-price reporting system of
the Financial Industry Regulatory Authority, Bloomberg related.
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 HOLDINGS: Plan Outline Hearing Today
-------------------------------------------
Dynegy Holdings LLC will ask Judge Cecelia Morris of the U.S.
Bankruptcy Court for the Southern District of New York at today's
hearing to approve the adequacy of the disclosure statement which
outlines its Chapter 11 restructuring plan. The Debtor will also
ask the Court to overrule objections to the disclosure statement.
In a court filing, Dynegy Holdings said it has already addressed
the supposed inadequacies of the outline through additional
disclosure.
Creditors, as well as the U.S. Trustee, a Justice Department
agency that oversees bankruptcy cases, previously criticized the
outline, saying it does not contain enough information to help
creditors decide whether to vote for or against the company's
restructuring plan.
The Official Committee of Unsecured Creditors complained, among
other things, that the disclosure statement lacks information
about the trust to be created under the plan as well as its
beneficiaries, and the value to be retained by holders of equity
interests.
The U.S. Trustee, meanwhile, said the hearing on the disclosure
statement should be held after the examiner issues a report about
the results of his investigation into Dynegy Holdings' bankruptcy,
pointing out that the findings will have bearing on the proposed
plan. The same issue was also raised by U.S. Bank National
Association in its objection.
To resolve the committee's objection, Dynegy Holdings added
language to the provision governing the trust, identifying general
unsecured claimants as the beneficiaries and disclosing the form
of payment they would receive from the trust.
Dynegy Holdings also provided a total enterprise valuation of the
reorganized company in the valuation analysis prepared by its
adviser Lazard Freres & Co., which contains an estimated range of
value for the equity interests that will be retained.
As regards the U.S. Trustee's and U.S. Bank's objection, the
company said the hearing has already been moved to March 12, which
the concerned parties determined as the appropriate date.
The company also said it revised the disclosure statement to seek
a prolonged balloting period to give voting creditors ample time
to review the examiner's report.
Dynegy Holdings said some of the issues raised by the U.S. Trustee
and other creditors are objections to the proposed restructuring
plan that should be addressed at another court hearing on the
confirmation of the plan.
Copies of the revised plan, disclosure statement, and a summary
chart of the objections are available without charge at:
http://bankrupt.com/misc/Dynegy_2ndAmendedPlan.pdf
http://bankrupt.com/misc/Dynegy_2ndAmendedDS.pdf
http://bankrupt.com/misc/Dynegy_ChartObjections.pdf
Separately, a bondholder asked Judge Morris to support the
objection of the U.S. Trustee to the approval of the disclosure
statement.
In a letter to the bankruptcy judge, Gerald Rogan said the outline
of the proposed plan must include a full report of the
investigation to help bondholders understand the "purported
justification for any request to release the liabilities of Dynegy
affiliates not in bankruptcy."
Mr. Rogan criticized in the letter a major shareholder group that
attempted to buy the entire company for about $700 million, saying
the group is attempting to steal some of the assets that guarantee
his bonds.
"The investigator's full disclosure will reveal their despicable
attempt to steal the money loaned to Dynegy in good faith so that
the bondholders will have the information necessary to reject a
proposed liability release that attempts to exempt Dynegy assets
bondholders' claims," Mr. Rogan wrote in the letter.
Susheel Kirpalani, Esq., the court-appointed Chapter 11 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.
The most recent version of the Plan, dated Jan. 19, 2012, will
implement a modified agreement worked out with holders of $1.8
billion of the $3.5 billion in unsecured senior notes and the
$215 billion in subordinated notes. Under the Plan, noteholders
and other unsecured creditors would share $400 million in cash,
$1.015 billion in seven-year 11% secured notes, and $2.1 billion
in convertible pay-in-kind notes mandatorily convertible at
maturity in December 2015 into 97% of the equity. Claims on the
notes and other general unsecured claims together will total from
$3.67 billion to $3.89 billion.
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 HOLDINGS: Seek Dismissal of U.S. Bank Suit
-------------------------------------------------
Dynegy Holdings, LLC, Dynegy Roseton, L.L.C., and Dynegy
Danskammer, L.L.C., ask Judge Morris to dismiss the complaint
filed by U.S. Bank National Association, arguing that the
Danskammer and Roseton power plants are real property leases and
not personal property leases as alleged by U.S. Bank.
U.S. Bank is indenture trustee on behalf of Pass-Through
Certificate Holders. Proceeds of the pass-through certificates
were used to purchase notes currently outstanding in the amount of
$550.4 million, plus prepetition interest.
As reported by the Troubled Company Reporter on Jan. 27, 2012,
U.S. Bank filed an adversary proceeding against debtors Dynegy
Holdings LLC, Dynegy Roseton LLC, and Dynegy Danskammer LLC. U.S.
Bank sued after the Debtors filed a motion to reject certain
agreements, including certain personal property leases. U.S. Bank
said leases of personal property. U.S. Bank says its relationship
with the Debtors plainly is one of lender-borrower, and therefore
11 U.S.C. Section 502(b)(6). U.S. Bank says the Debtors should
not be permitted to avoid their obligations to repay the hundreds
of millions of dollars certificate holders loaned to them based on
a re-characterization that is completely divorced from the
economic realities of the Personal Property Leases.
On behalf of the Debtors, Steven M. Bierman, Esq., at Sidley
Austin LLP, in New York, asserts that the integrated assets
subject to the leases readily meet the three-part test used by New
York courts to determine whether property is permanently affixed
to, and therefore considered, real property: "actual annexation to
the realty, application to the use to which that portion of the
associated realty is dedicated and the intention of the annexing
party to make a permanent accession to the freehold." Thus, Mr.
Bierman argues, U.S. Bank's First Claim of Relief, seeking
declaration that the leases are personal property leases, should
be dismissed.
U.S. Bank's Second Claim for Relief seeks a declaration that the
real property leases are not true leases but rather financing
agreements. The Debtors complain that U.S. Bank lacks any right
under the documents governing the facilities to recharacterize the
Facility Leases. Mr. Bierman tells the Court recharacterization
would operate to divest the Owner Lessors, which are creditors of
the Debtors with respect to the $110 million allowed claim they
have been provided pursuant to a Court-approved stipulation, of
ownership of and title to the Facilities.
The Debtors also ask the Court to dismiss U.S. Bank's Third and
Fourth Claims for Relief, which seek a declaration that claims
against Dynegy Holdings as Guarantor of the Facility Leases are
not subject to Section 502(b)(6) of the Bankruptcy Code, because
claims against Dynegy Holdings as Guarantor are claims "resulting
from the termination of a lease of real property" within the
meaning of Section 502(b)(6).
In its Fifth Claim for Relief, U.S. Bank seeks to recover any
unpaid pre-termination rent under the Facility Leases, the
Termination Value provided in the Facility Leases, and any other
amounts due under the Facility Leases, less the value of the
Facilities. The Debtors contend that the Indentures clearly grant
U.S. Bank only a security interest in the Facility Lease rent
payments, and its total claim therefore cannot exceed the amount
-- approximately $550.4 million, plus prepetition interest -- due
on the Notes that those rent payments secure. Because the
Indentures are unambiguous on this point, this issue is
appropriate for resolution on the pleadings, Mr. Bierman asserts.
The Debtors ask the Court to dismiss U.S. Bank's Fifth Claim for
Relief to the extent that it seeks to recover from the Debtors
more than the amounts actually outstanding under the Notes.
U.S. Bank previously argued that the power plants are personal
property, not real property. Bill Rochelle of Bloomberg News
noted that whether the plants, as opposed to the land on which
they sit, are real property or personal property determines
whether bankruptcy law puts a cap on damages from terminating the
leases through bankruptcy. If the leases of the plants are real
property leases, bankruptcy law says the Dynegy subsidiaries are
liable for damages limited to three years rent, at most, Mr.
Rochelle noted. If the leases are for personal property, there is
no limit on resulting damages and the Dynegy companies currently
proposed Chapter 11 plan may not work.
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 HOLDINGS: Rejects 2 Patriot Coal Supply Contracts
--------------------------------------------------------
Dynegy Holdings, LLC, and its debtor affiliates asked the U.S.
Bankruptcy Court in Manhattan to authorize Dynegy Danskammer LLC
to end its coal supply contracts with Patriot Coal Sales LLC.
The move comes after talks between the companies for the revision
of the contracts failed. Dynegy Holdings proposed changes to the
deal, saying it no longer caters to the needs of the company.
The two supply contracts require Dynegy Danskammer to purchase a
fixed amount of coal. Since entering into the contracts, the
price of coal has significantly dropped resulting in the company
being "out-of-the money" with respect to those contracts,
according to its lawyer, Sophia Mullen, Esq., at Sidley Austin
LLP, in New York.
"Dynegy Danskammer's demand for coal has decreased and, as a
result, [it] no longer believes that it requires the full amount
of the coal shipments contemplated under the contracts," Ms.
Mullen said in court papers.
A court hearing on the request is scheduled for March 21, 2012.
Objections are due by March 14, 2012.
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)
EASTBRIDGE INVESTMENT: To Offer $30MM Shares Under Incentive Plan
-----------------------------------------------------------------
Eastbridge Investment Group Corporation filed with the U.S.
Securities and Exchange Commission a Form S-8 relating to the
resale of up to 30,000,000 shares of Common Stock that have been
or may be issued under the Company's 2011 Incentive Stock Option
Plan.
It is anticipated that holders of the shares will offer shares for
sale at prevailing prices on the Over the Counter Bulletin Board
on the date of sale, in negotiated transactions or otherwise, at
market prices prevailing at the time of the sale or at prices
otherwise negotiated. The Company will not receive any proceeds
from sales made under this reoffer prospectus. The Selling
Stockholders will bear all sales commissions and similar expenses.
Any other expenses in connection with the registration and
offering and not borne by the Selling Stockholders will be borne
by the Company.
As of March 7, 2012, there was no Selling Shareholder, since no
options, restricted stock awards or other awards have been issued
under the 2011 Incentive Plan.
The Company's common stock is quoted on the OTCBB under the symbol
"EBIG.OB". On March 6, 2012, the closing sales price for the
common stock on the OTCBB was $0.06 per share.
A full-text copy of the prospectus is available at:
http://is.gd/3c8h4j
About EastBridge Investment
Scottsdale, Arizona-based EastBridge Investment Group Corporation
is one of a small group of United States companies solely
concentrated in marketing business consulting services to closely
held, small to mid-size Asian companies that require these
services for expansion. EastBridge had fourteen clients as of the
date of this filing, that it is assisting in becoming public
companies, reporting pursuant to the Securities Exchange Act of
1934, as amended, in the United States and obtaining listings for
their stock on a U.S. stock exchange or over-the-counter market.
All clients are located in Asia-Pacifica.
The Company reported a net loss of $744,483 on $31,000 of revenues
for the nine months ended Sept. 30, 2011, compared with a net loss
of $1.5 million on $nil revenue for the same period of 2010.
The Company's balance sheet at Sept. 30, 2011, showed $1.2 million
in total assets, $1.7 million in total liabilities, and a
stockholders' deficit of $521,390.
As reported in the TCR on April 26, 2011, Tarvaran Askelson &
Company, LLP, in Laguna Niguel, California, expressed substantial
doubt about EastBridge Investment Group's ability to continue as a
going concern, following the Company's 2010 results. The
independent auditors noted that the Company has incurred
significant losses.
EASTMAN KODAK: Wins OK to Tap FTI for Transitional Services
-----------------------------------------------------------
The U.S. Bankruptcy Court in Manhattan authorized Eastman Kodak
Company to employ FTI Consulting Inc. to provide a chief
restructuring officer, and additional FTI personnel to provide
transitional services, nunc pro tunc from the Petition through and
including January 22, 2012.
On Oct. 2, 2011, FTI was engaged to provide financial advisory and
consulting services to the Debtors. On January 17, 2012, and
effective as of the Petition Date, the Debtors executed a second
engagement letter retaining FTI to, specifically, appoint Dominic
Di Napoli as the Debtors' chief restructuring officer and provide
for additional personnel to provide to the Debtors the services
necessary for their transition to Chapter 11.
On January 23, 2012, James A. Mesterharm of Alix Partners LLP was
appointed to the position of CRO. Additional personnel from Alix
were also hired to provide restructuring support services to the
Debtors.
The FTI Personnel have provided services to the Debtors in a
transition capacity until the time all the projects and tasks they
managed and provided are assumed by the Alix Personnel or the
Debtors, Randall S. Eisenberg, a senior managing director of FTI
Consulting, Inc., tells the Court. Mr. Eisenberg says the
Transition Services are necessary to the orderly transition of
workstreams to the Alix Personnel and are expected to be required
for a period of no longer than approximately two weeks from
January 23.
The FTI Personnel provides these Restructuring Services to the
Debtors:
(a) Assist the Debtors with information and analyses required
pursuant to the Debtors' postpetition financing;
(b) Assist with the identification and implementation of
short-term cash management procedures;
(c) Assist the Debtors with respect to identification of core
business assets and the disposition of assets or
liquidation of unprofitable operations;
(d) Assist in the preparation of financial information for
distribution to creditors and others, including, but not
limited to, cash receipts and disbursement analysis,
analysis of various asset and liability accounts, and
analysis of proposed transactions for which the Court's
approval is sought;
(e) Assist with implementing procedures and strategies to
maintain continuity of supply, maintain an effective
vendor management process, including responding to and
tracking calls received from suppliers, determine and
negotiate essential vendor and foreign supplier
strategies, and produce various management reports to
implement and monitor those strategies;
(f) Advise and provide guidance with global corporate
communications function and coordinating the day to day
business communications to internal and external
stakeholders;
(g) Assist the Debtors in the identification of executory
contracts and unexpired leases and perform cost/benefit
evaluations with respect to the assumption or rejection of
each during a Chapter 11 proceeding;
(h) Assist the Debtors in the preparation of financial related
disclosures required by the Court during a Chapter 11
proceeding, including the Schedules of Assets and
Liabilities, the Statement of Financial Affairs, and
Monthly Operating Reports;
(i) Assist the Debtors in claims processing, analysis, and
reporting, including plan classification modeling and
claim estimation;
(j) Assist the Debtors in responding to and tracking
reclamation claims;
(k) Provide assistance with implementation of court orders;
(l) Assist in the evaluation and analysis of avoidance
actions, including fraudulent conveyances and preferential
transfers;
(m) Participate in meetings and provide support to the Debtors
and their other professional advisors in negotiations with
potential investors, banks and other secured lenders, any
creditors' committee, the U.S. Trustee, other
parties-in-interest, and professionals hired by the same,
as requested;
(n) Assist in the preparation of information and analysis
necessary for the confirmation of a plan of reorganization
in these Chapter 11 cases, including information contained
in the disclosure statement;
(o) Assist the Debtors with plan distribution activities;
(p) Provide assistance with tax planning and compliance issues
with respect to any proposed plans of reorganization, as
well as any and all other tax assistance as may be
requested from time to time;
(q) Provide financial support and analyses involving various
litigation matters involving the Debtors; and
(r) Render other restructuring and general business consulting
or other assistance for the Debtors or the Debtors'
subsidiaries and affiliates as the Debtors' management or
counsel may request, that are not duplicative of services
provided by other professionals retained in these cases.
The FTI Personnel also provides Transition Services, which include
the transfer of various worksteams and assigned tasks primarily
pertaining to vendor management and related communications,
treasury functions, retiree and pension analyses, cash management
and general corporate communications related to the Debtors'
Chapter 11 bankruptcy cases.
FTI's personnel in the United States are paid these customary
hourly rates:
CRO/ Senior Managing Directors $780 to $895
Directors / Managing Directors $560 to $745
Consultants / Senior Consultant $280 to $530
Administrative / Paraprofessionals $115 to $230
FTI's personnel in the United Kingdom are paid these customary
hourly rates:
Senior Managing Directors GBP675
Directors / Managing Directors GBP500 to GBP560
Consultants / Senior Consultant GBP360 to GBP415
Associates / Administrative GBP115 to GBP220
FTI will also be reimbursed for any reasonable out-of-pocket
expenses incurred. The Debtors and FTI have also agreed to
certain indemnification provisions contained in the Engagement
Letter.
Mr. Eisenberg tells the Court that FTI is not aware of any
conflicts of interest or additional relationships that would
preclude it from performing the services to the Debtors. He,
however, says FTI may represent parties-in-interest in matters
unrelated to the Debtors' bankruptcy cases.
Mr. Eisenberg discloses that FTI has received "on account" cash
and fees in connection with preparing for the filing of the
Chapter 11 cases during the Initial Engagement totaling
$5,769,250. FTI also received payments totaling $500,000 in "on
account" cash. As of the Petition Date, the unapplied "on
account" cash will constitute a general retainer for the
Transition Services, will not be segregated by FTI in a separate
account, and will be held until the end of the Transition Services
period and applied to FTI's final fees in the Chapter 11 cases.
FTI will apply the "on account" cash to any fees, charges and
disbursements incurred before the Petition Date that remain
unpaid.
EASTMAN KODAK: Proposes E&Y as Tax Services Provider
----------------------------------------------------
Eastman Kodak Co. asked the U.S. Bankruptcy Court in Manhattan to
approve the hiring of Ernst & Young LLP.
Eastman Kodak tapped the firm to assist the company in preparing
carve-out financial statement, and provide valuation and tax
services.
Specifically, Ernst & Young will provide tax services related to
the company's bankruptcy case, and valuation of its real and
personal property and other assets. The firm will also assist in
the operational carve-out and financial statement preparation of
certain businesses, among other services.
Ernst & Young will be paid for those services on an hourly basis
at these rates:
Personnel Classification Hourly Billing Rate
------------------------ -------------------
Partners, Principals, Directors $645 - $795
Executive Director $570 - $675
Senior Managers $485 - $550
Managers $425 - $475
Seniors $325 - $390
Staff $200 - $280
Ernst & Young will also provide property tax compliance and
advisory services for the 2012-2014 tax years, which include
preparing and filing annual renditions, tracking real estate
notices, and reviewing property tax bills. For these services,
the firm will get a fixed fee, which is based on a "per property"
fee of $300.
Eastman Kodak agreed to reimburse the firm for any expenses
incurred related to its employment.
In court papers, Eugene Gramza Jr., a partner at Ernst & Young,
disclosed that the firm does not hold or represent interest
adverse to Eastman Kodak.
A court hearing on the request is scheduled for March 20, 2012.
Objections are due by March 13, 2012.
About Eastman Kodak
Rochester, New York-based Eastman Kodak Company and its U.S.
subsidiaries on Jan. 19, 2012, voluntarily filed for Chapter 11
reorganization (Bankr. S.D.N.Y. Lead Case No. 12-10202) in
Manhattan. Subsidiaries outside of the U.S. are not included in
the filing and will continue to operate as usual.
The Company, founded in 1880 by George Eastman, was once the
world's leading producer of film and cameras. In recent years,
Kodak has been working to transform itself from a business
primarily based on film and consumer photography to a smaller
business with a digital growth strategy focused on the
commercialization of proprietary digital imaging and printing
technologies.
Having invested significantly in research and development for over
a century, Kodak has a vast portfolio of patents. In 1975, Kodak
scientists invented the first digital camera. Kodak then went on
to develop a vast collection of patented technologies to enhance
digital image capture and processing, technologies that are used
in virtually every modern digital camera, smartphone and tablet,
as well as numerous other devices. Kodak has 8,900 patent and
trademark registrations and applications in the United States, as
well as 13,100 foreign patents and trademark registrations or
pending registration in roughly 160 countries.
Kodak disclosed $5.10 billion in assets and $6.75 billion in
liabilities as of Sept. 30, 2011. The net book value of all
assets located outside the United States as of Dec. 31, 2011 is
$13.5 million.
Kodak says it has "significant" legacy liabilities, which include
$1.2 billion in non-U.S. pension liabilities, $1.3 billion of
Other Post-Employment Benefit ("OPEB") liabilities and roughly
$100 million in environmental liabilities.
Kodak has outstanding funded debt in an aggregate amount of
roughly $1.6 billion, consisting primarily of roughly: (a) $100
million outstanding under the first lien revolving credit facility
plus an additional $96 million in face amount of outstanding
letters of credit; (b) $750 million in principal amount of second
lien secured notes; (c) $400 million in principal amount of
convertible notes; and (d) $283 million in principal amount of
other senior unsecured debt. Kodak also has roughly $425 million
in outstanding trade debt.
Kodak sought bankruptcy protection amid near-term liquidity issues
brought about by steeper-than-expected declines in Kodak's
historically profitable traditional businesses, and cash flow from
the licensing and sale of intellectual property being delayed due
to litigation tactics employed by a small number of infringing
technology companies with strong balance sheets and an awareness
of Kodak's liquidity challenges.
Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtors. FTI Consulting,
Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is
the investment banker. Kurtzman Carson Consultants LLC is the
claims agent. A group of second lien lenders are represented by
Akin Gump Strauss Hauer & Feld LLP.
The Official Committee of Unsecured Creditors has tapped
Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel.
Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Eastman Kodak and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000).
EASTMAN KODAK: Proposes PwC as Auditor, Tax Adviser
---------------------------------------------------
Eastman Kodak Co. sought approval to hire PricewaterhouseCoopers
LLP and PricewaterhouseCoopers Aarata to provide independent
audit, accounting and tax advisory services.
PwC LLP will serve as auditor and accounting adviser of the
company and its affiliated debtors in accordance with their 2011
letter agreements.
Under the 2011 letter agreements, PwC LLP agreed to audit the
financial statements of Eastman Kodak, provide accounting
consultation and other services requested by the company. The
firm will get a $4.129 million fixed fee in return for its
services.
PwC LLP also agreed to audit the financial statements of Kodak
Polychronie Graphics Finance Barbados SRL, Kodak Polychrome
Graphics Company Ltd., and Creo SRL, and will get $70,000 fixed
fee for those services.
Meanwhile, PwC Aarata's services include translating the English
version of Eastman Kodak's financial statements and other
documents into Japanese. The firm will get a JPY4 million fixed
fee.
PwC LLP will also provide independent audit services as well as
tax advisory services pursuant to the terms of the letter
agreements it executed with Eastman Kodak on January 19, 2012.
For its audit services, the firm will be paid on an hourly basis
at these rates:
Personnel Classification Hourly Billing Rate
------------------------ -------------------
Partners $775 - $995
Managing Directors/Directors $573 - $708
Senior Managers/Managers $297 - $575
Senior Associates/Associates $134 - $302
Paraprofessional Staff $129 - $148
Meanwhile, the hourly rates for PwC LLP's tax advisory services
range from $650 to $850 for partners; $550 to $650 for managing
directors and directors; $450 to $550 for senior managers and
managers; $200 to $300 for senior associates and associates; and
$100 to $175 for the paraprofessional staff.
Jeff Sorensen, a partner at New York-based PwC LLP, disclosed in
court papers that the firms do not hold or represent interest
adverse to Eastman Kodak, and that they are disinterested under
Section 101(14) of the Bankruptcy Code.
The U.S. Bankruptcy Court in Manhattan will hold a hearing on
March 20, 2012, to consider approval of the employment
application. Objections are due by March 13, 2012.
About Eastman Kodak
Rochester, New York-based Eastman Kodak Company and its U.S.
subsidiaries on Jan. 19, 2012, voluntarily filed for Chapter 11
reorganization (Bankr. S.D.N.Y. Lead Case No. 12-10202) in
Manhattan. Subsidiaries outside of the U.S. are not included in
the filing and will continue to operate as usual.
The Company, founded in 1880 by George Eastman, was once the
world's leading producer of film and cameras. In recent years,
Kodak has been working to transform itself from a business
primarily based on film and consumer photography to a smaller
business with a digital growth strategy focused on the
commercialization of proprietary digital imaging and printing
technologies.
Having invested significantly in research and development for over
a century, Kodak has a vast portfolio of patents. In 1975, Kodak
scientists invented the first digital camera. Kodak then went on
to develop a vast collection of patented technologies to enhance
digital image capture and processing, technologies that are used
in virtually every modern digital camera, smartphone and tablet,
as well as numerous other devices. Kodak has 8,900 patent and
trademark registrations and applications in the United States, as
well as 13,100 foreign patents and trademark registrations or
pending registration in roughly 160 countries.
Kodak disclosed $5.10 billion in assets and $6.75 billion in
liabilities as of Sept. 30, 2011. The net book value of all
assets located outside the United States as of Dec. 31, 2011 is
$13.5 million.
Kodak says it has "significant" legacy liabilities, which include
$1.2 billion in non-U.S. pension liabilities, $1.3 billion of
Other Post-Employment Benefit ("OPEB") liabilities and roughly
$100 million in environmental liabilities.
Kodak has outstanding funded debt in an aggregate amount of
roughly $1.6 billion, consisting primarily of roughly: (a) $100
million outstanding under the first lien revolving credit facility
plus an additional $96 million in face amount of outstanding
letters of credit; (b) $750 million in principal amount of second
lien secured notes; (c) $400 million in principal amount of
convertible notes; and (d) $283 million in principal amount of
other senior unsecured debt. Kodak also has roughly $425 million
in outstanding trade debt.
Kodak sought bankruptcy protection amid near-term liquidity issues
brought about by steeper-than-expected declines in Kodak's
historically profitable traditional businesses, and cash flow from
the licensing and sale of intellectual property being delayed due
to litigation tactics employed by a small number of infringing
technology companies with strong balance sheets and an awareness
of Kodak's liquidity challenges.
Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtors. FTI Consulting,
Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is
the investment banker. Kurtzman Carson Consultants LLC is the
claims agent. A group of second lien lenders are represented by
Akin Gump Strauss Hauer & Feld LLP.
The Official Committee of Unsecured Creditors has tapped
Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel.
Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Eastman Kodak and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000).
EASTMAN KODAK: Court OKs Sullivan & Cromwell as Lead Counsel
------------------------------------------------------------
The U.S. Bankruptcy Court in Manhattan approved the hiring of
Sullivan & Cromwell LLP as the lead bankruptcy counsel of Eastman
Kodak Co. and its affiliated debtors.
Andrew G. Dietderich, Esq., a partner at Sullivan & Cromwell LLP,
in New York, disclosed in a supplemental declaration that
Citigroup is a current client of the firm. Revenue from Citigroup
and its known affiliates did not represent 1% or more of S&C's
revenues for the fiscal year ending December 31, 2011, Mr.
Dietderich said. Mr. Dietderich assured the Court that despite
S&C's representation of Citigroup, the firm remains disinterested
within the meaning of Section 101(14) of the Bankruptcy Code.
As lead counsel, S&C will:
(a) advise the Debtors with respect to their powers and duties
and debtors-in-possession in the continued management and
operation of the Debtors' business and properties;
(b) advise the Debtors on the conduct of the Chapter 11 cases,
including all of the legal and administrative requirements
of operating in Chapter 11;
(c) attend meetings and negotiate with the representatives of
creditors, equity security holders and other parties-in
interest, including governmental agencies and authorities;
(d) prosecute actions on the Debtors' behalf, defend actions
commenced against the Debtors and represent the Debtors'
interests in negotiations concerning litigation in which
the Debtors are involved, including objections to claims
filed against the Debtors' estates and coordinate and
effectively divide responsibility with Young Conaway
Stargatt & Taylor LLP;
(e) prepare pleadings in connection with the Chapter 11 cases,
including motions, applications, answers, orders, reports
and papers necessary or otherwise beneficial to the
administration of the Debtors' estates and coordinate and
effectively divide responsibility for the foregoing with
Young Conaway;
(f) represent the Debtors in connection with obtaining
postpetition financing;
(g) advise the Debtors in connection with any potential sale
of assets;
(h) appear before the Court and any appellate courts to
represent the interests of the Debtors' estates before
those courts;
(i) advise the Debtors regarding tax matters;
(j) advise the Debtors regarding environmental matters;
(k) advise the Debtors regarding intellectual property
matters;
(l) assist the Debtors in obtaining approval of a disclosure
statement and confirmation of a Chapter 11 plan and all
related documents; and
(m) perform all other necessary legal services for the Debtors
in connection with the prosecution of the Chapter 11
cases, including (i) analyzing the Debtors' leases and
contracts and the assumptions, rejections, or their
assignments, (ii) analyzing the validity of liens against
the Debtors, and (iii) advising the Debtors on corporate
and litigation matters.
The Debtors will pay for S&C' services according to the firm's
hourly rates. For matters that involve work in the areas of tax,
mergers and acquisitions, finance, intellectual property and
securities, the Debtors agreed to pay these hourly rates:
Partners $990 to $1,150
Of Counsel and Special Counsel $990 to $1,050
Associates $395 to $875
Legal Assistants $210 to $290
Other Timekeepers $110 to $290
For all other work related to the Chapter 11 cases, S&C has agreed
to reduce the hourly rates to be charged by its professionals to a
flat rate of $990 regardless of seniority.
The Debtors will also reimburse S&C for all of its necessary
out-of-pocket expenses.
Andrew G. Dietderich, Esq., a partner at Sullivan & Cromwell LLP,
in New York, assures the Court that S&C 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
Debtors' estates.
Mr. Dietderich discloses that on Nov. 29, 2011, the Debtors paid
$500,000 to S&C as a classic "evergreen" retainer. On Dec. 19,
the Debtors paid S&C an additional $500,000 retainer. As of the
Petition Date, as agreed with the Debtors, the retainer has been
reduced to zero as payment in full of all of S&C's prepetition
fees.
Mr. Dietderich also discloses that as of the Petition Date, the
Debtors owed S&C fees and expenses totaling $221,076 for legal
services related to intellectual property licensing rendered prior
to the Petition Date. At the request of the Debtors, S&C has
agreed to waive its outstanding Non-Restructuring Legal Fees.
About Eastman Kodak
Rochester, New York-based Eastman Kodak Company and its U.S.
subsidiaries on Jan. 19, 2012, voluntarily filed for Chapter 11
reorganization (Bankr. S.D.N.Y. Lead Case No. 12-10202) in
Manhattan. Subsidiaries outside of the U.S. are not included in
the filing and will continue to operate as usual.
The Company, founded in 1880 by George Eastman, was once the
world's leading producer of film and cameras. In recent years,
Kodak has been working to transform itself from a business
primarily based on film and consumer photography to a smaller
business with a digital growth strategy focused on the
commercialization of proprietary digital imaging and printing
technologies.
Having invested significantly in research and development for over
a century, Kodak has a vast portfolio of patents. In 1975, Kodak
scientists invented the first digital camera. Kodak then went on
to develop a vast collection of patented technologies to enhance
digital image capture and processing, technologies that are used
in virtually every modern digital camera, smartphone and tablet,
as well as numerous other devices. Kodak has 8,900 patent and
trademark registrations and applications in the United States, as
well as 13,100 foreign patents and trademark registrations or
pending registration in roughly 160 countries.
Kodak disclosed $5.10 billion in assets and $6.75 billion in
liabilities as of Sept. 30, 2011. The net book value of all
assets located outside the United States as of Dec. 31, 2011 is
$13.5 million.
Kodak says it has "significant" legacy liabilities, which include
$1.2 billion in non-U.S. pension liabilities, $1.3 billion of
Other Post-Employment Benefit ("OPEB") liabilities and roughly
$100 million in environmental liabilities.
Kodak has outstanding funded debt in an aggregate amount of
roughly $1.6 billion, consisting primarily of roughly: (a) $100
million outstanding under the first lien revolving credit facility
plus an additional $96 million in face amount of outstanding
letters of credit; (b) $750 million in principal amount of second
lien secured notes; (c) $400 million in principal amount of
convertible notes; and (d) $283 million in principal amount of
other senior unsecured debt. Kodak also has roughly $425 million
in outstanding trade debt.
Kodak sought bankruptcy protection amid near-term liquidity issues
brought about by steeper-than-expected declines in Kodak's
historically profitable traditional businesses, and cash flow from
the licensing and sale of intellectual property being delayed due
to litigation tactics employed by a small number of infringing
technology companies with strong balance sheets and an awareness
of Kodak's liquidity challenges.
Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtors. FTI Consulting,
Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is
the investment banker. Kurtzman Carson Consultants LLC is the
claims agent. A group of second lien lenders are represented by
Akin Gump Strauss Hauer & Feld LLP.
The Official Committee of Unsecured Creditors has tapped
Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel.
Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Eastman Kodak and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000).
EASTMAN KODAK: Court OKs Young Conaway as Counsel
-------------------------------------------------
Judge Allan Gropper issued an order authorizing Eastman Kodak Co.
to employ Young Conaway Stargatt & Taylor LLP as its counsel.
Young Conaway will be responsible for rendering to the Debtors
professional services delegated to the firm by the Debtors and
Sullivan & Cromwell LLP with respect to:
(a) support in case management duties, like monitoring the
docket, maintaining appropriate service lists, maintaining
critical date calendars, and preparing agendas for court
hearings;
(b) utility issues, including negotiating with utility
providers in connection with requests for adequate
assurance pursuant to Section 366 of the Bankruptcy Code;
(c) claims reconciliation for reclamation claims and claims
entitled to priority pursuant to Section 503(b)(9) of the
Bankruptcy Code, as well as other claims designated by the
Debtors and S&C to be handled by Young Conaway, including
negotiating resolutions of, or conducting litigation with
respect to, those claims;
(d) vendor issues, including assisting the debtors and
managing and responding to vendor inquiries and
negotiating critical vendor trade agreements;
(e) assistance to the Debtors in connection with the
preparation of schedules and statements of financial
affairs and any amendments;
(f) preparation and prosecution of retention applications for
various professionals;
(g) analysis and evaluation of certain executor contracts,
including prosecuting motions to assume, assume and
assign, or reject those contracts and responding to
motions to compel assumption or rejection filed by
contract counterparties;
(h) other services as may be specifically designated; and
(i) performance of all necessary legal services relating to
the responsibilities listed, including (i) preparing
motions, applications, answers, orders, appeals, reports
and paper; (ii) attending meetings and negotiating with
representatives of creditors and other
parties-in-interest; (iii) advising the Debtors; and (iv)
appearing before the Court, any appellate courts and the
U.S. Trustee, and protecting the interests of the Debtors'
estates before those courts and the U.S. Trustee.
Young Conaway will also represent the Debtors in cases involving
clients of S&C.
The principal attorneys and paralegals designated to represent the
Debtors will be paid according to their hourly rates:
Professional Position Hourly Rate
------------ -------- -----------
Pauline K. Morgan, Esq. Partner $700
Joseph M. Barry, Esq. Partner $535
Sean T. Greecher, Esq. Associate $410
Kenneth J. Enos, Esq. Associate $390
Robert F. Poppiti, Esq. Associate $330
Morgan L. Seward, Esq. Associate $295
Ashley Markow, Esq. Associate $270
Debbie Laskin Paralegal $230
The Debtors will also pay Young Conaway's necessary out-of-pocket
expenses.
Pauline K. Morgan, Esq., assures the Court that her 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 Debtors and their estates.
Ms. Morgan disclosed that Young Conaway received a $150,000
retainer on December 16, 2011, in connection with the planning and
preparation of initial document and its proposed representation of
the Debtors.
About Eastman Kodak
Rochester, New York-based Eastman Kodak Company and its U.S.
subsidiaries on Jan. 19, 2012, voluntarily filed for Chapter 11
reorganization (Bankr. S.D.N.Y. Lead Case No. 12-10202) in
Manhattan. Subsidiaries outside of the U.S. are not included in
the filing and will continue to operate as usual.
The Company, founded in 1880 by George Eastman, was once the
world's leading producer of film and cameras. In recent years,
Kodak has been working to transform itself from a business
primarily based on film and consumer photography to a smaller
business with a digital growth strategy focused on the
commercialization of proprietary digital imaging and printing
technologies.
Having invested significantly in research and development for over
a century, Kodak has a vast portfolio of patents. In 1975, Kodak
scientists invented the first digital camera. Kodak then went on
to develop a vast collection of patented technologies to enhance
digital image capture and processing, technologies that are used
in virtually every modern digital camera, smartphone and tablet,
as well as numerous other devices. Kodak has 8,900 patent and
trademark registrations and applications in the United States, as
well as 13,100 foreign patents and trademark registrations or
pending registration in roughly 160 countries.
Kodak disclosed $5.10 billion in assets and $6.75 billion in
liabilities as of Sept. 30, 2011. The net book value of all
assets located outside the United States as of Dec. 31, 2011 is
$13.5 million.
Kodak says it has "significant" legacy liabilities, which include
$1.2 billion in non-U.S. pension liabilities, $1.3 billion of
Other Post-Employment Benefit ("OPEB") liabilities and roughly
$100 million in environmental liabilities.
Kodak has outstanding funded debt in an aggregate amount of
roughly $1.6 billion, consisting primarily of roughly: (a) $100
million outstanding under the first lien revolving credit facility
plus an additional $96 million in face amount of outstanding
letters of credit; (b) $750 million in principal amount of second
lien secured notes; (c) $400 million in principal amount of
convertible notes; and (d) $283 million in principal amount of
other senior unsecured debt. Kodak also has roughly $425 million
in outstanding trade debt.
Kodak sought bankruptcy protection amid near-term liquidity issues
brought about by steeper-than-expected declines in Kodak's
historically profitable traditional businesses, and cash flow from
the licensing and sale of intellectual property being delayed due
to litigation tactics employed by a small number of infringing
technology companies with strong balance sheets and an awareness
of Kodak's liquidity challenges.
Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtors. FTI Consulting,
Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is
the investment banker. Kurtzman Carson Consultants LLC is the
claims agent. A group of second lien lenders are represented by
Akin Gump Strauss Hauer & Feld LLP.
The Official Committee of Unsecured Creditors has tapped
Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel.
Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Eastman Kodak and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000).
ECOSPHERE TECHNOLOGIES: Incurs $323,700 Net Loss in 4th Quarter
---------------------------------------------------------------
Ecosphere Technologies, Inc., reported a net loss of $323,719 on
$8.28 million of total revenues for the three months ended
Dec. 31, 2011, compared with a net loss of $3.85 million on
$2.53 million of total revenues for the same period a year ago.
The Company reported a net loss of $5.86 million on $21.08 million
of total revenues for the year ended Dec. 31, 2011, compared with
a net loss of $22.66 million on $8.96 million of total revenues
during the prior year.
The Company's balance sheet at Dec. 31, 2011, showed $9.61 million
in total assets, $5.17 million in total liabilities, $3.98 million
in total redeemable convertible cumulative preferred stock, and
$458,986 in total equity.
Ecosphere Chairman and Chief Executive Officer Charles Vinick
stated, "The pivotal event in 2011 was our licensing agreement
with Hydrozonix. The agreement commits them to purchase a minimum
of sixteen EF80s over the initial two years to maintain their
exclusivity, which should yield at least $44 million in revenue to
Ecosphere. We executed on this deal by delivering the first four
units in 2011. For the first time in our history, this license
agreement gives us sales visibility through 2012 and into 2013.
In addition to our licensing revenue, we have seen continued
growth of our water treatment service business in onshore oil and
gas fracturing and we see numerous other industrial wastewater
treatment opportunities that we can exploit with our patented
Ozonix technologies."
A copy of the press release is available for free at:
http://is.gd/nwrWXi
About Ecosphere Technologies
Stuart, Fla.-based Ecosphere Technologies, Inc. (OTC BB: ESPH)
-- http://www.ecospheretech.com/-- is a diversified water
engineering, technology licensing and environmental services
company that designs, develops and manufactures wastewater
treatment solutions for industrial markets. Ecosphere, through
its majority-owned subsidiary Ecosphere Energy Services, LLC
("EES"), provides energy exploration companies with an onsite,
chemical free method to kill bacteria and reduce scaling during
fracturing and flowback operations.
As reported in the TCR on Mar 22, 2011, Salberg & Company, P.A.,
in Boca Raton, Fla., expressed substantial doubt about Ecosphere
Technologies' ability to continue as a going concern, following
the Company's 2010 results. The independent auditors noted that
the Company has a net loss applicable to Ecosphere Technologies,
Inc. common stock of $22,237,207, and net cash used in
operations of $1,267,206 for the year ended Dec. 31, 2010, and a
working capital deficit, a stockholders' deficit and an
accumulated deficit of $5,459,051, $1,780,735 and $110,025,222,
respectively, at Dec. 31, 2010. In addition, the Company has
redeemable convertible cumulative preferred stock that is eligible
for redemption at a redemption amount of $3,877,796 including
accrued dividends as of Dec. 31, 2010.
EDIETS.COM INC: Thomas Hoyer's Resignation Takes Effect Early
-------------------------------------------------------------
On Dec. 19, 2011, Thomas Hoyer notified eDiets.com, Inc., of his
resignation as the Company's Chief Financial Officer and corporate
secretary. Under the terms of the Employment Agreement,
Mr. Hoyer's resignation is effective 90 days following
notification, which is March 19, 2012. The Company has agreed to
waive its right to the 90-day notice period. Accordingly, the
effective date of Mr. Hoyer's resignation is March 6, 2012.
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.
EGPI FIRECREEK: Inks Linear Form Pact with Success Oil and CUBO
---------------------------------------------------------------
EGPI Firecreek, Inc., through its wholly owned subsidiary Energy
Producers, Inc., entered into a Linear Short Form Agreement with
Success Oil Co., Inc., and CUBO Energy, PLC, and or its assignee.
The linear short form Agreement is agreed to be developed into the
final long form agreement to be completed and signed off by the
parties by no later than March 15, 2012.
The purchase price is $1.15 million in Cubo Stock reduced by
$450,000 liabilities to be assumed by CUBO and secured by its
interests in the North 40 Interests.
The Agreement became effective on March 1, 2012.
A copy of the Agreement is available for free at:
http://is.gd/gyXAzJ
About EGPI Firecreek
Scottsdale, Ariz.-based EGPI Firecreek, Inc. (OTC BB: EFIR) was
formerly known as Energy Producers, Inc., an oil and gas
production company focusing on the recovery and development of oil
and natural gas.
The Company has been focused on oil and gas activities for
development of interests held that were acquired in Texas and
Wyoming for the production of oil and natural gas through Dec. 2,
2008. Historically in its 2005 fiscal year, the Company initiated
a program to review domestic oil and gas prospects and targets.
As a result, EGPI acquired non-operating oil and gas interests in
a project titled Ten Mile Draw located in Sweetwater County,
Wyoming for the development and production of natural gas. In
July 2007, the Company acquired and began production of oil at the
2,000 plus acre Fant Ranch Unit in Knox County, Texas. This was
followed by the acquisition and commencement in March 2008 of oil
and gas production at the J.B. Tubb Leasehold Estate located in
the Amoco Crawar Field in Ward County, Texas.
The Company's balance sheet at June 30, 2011, showed $5.14 million
in total assets, $5.00 million in total liabilities, all current,
$3.73 million in Series D preferred stock, and a $3.59 million
total shareholders' deficit.
M&K CPAS, PLLC, in Houston, expressed substantial doubt about EGPI
Firecreek's ability to continue as a going concern, following the
Company's 2010 results. The independent auditors noted that the
Company has suffered recurring losses and negative cash flows from
operations.
EMMIS COMMUNICATIONS: To Hold Special Meeting on April 2
--------------------------------------------------------
The Board of Directors of Emmis Communications Corporation adopted
an amendment to the Company's Second Amended and Restated Code of
By-Laws, effective March 8, 2012. The amendment revised Section
2.11 of the By-Laws to deal more clearly with advance notice
requirements with respect to a special meeting of shareholders.
The amendment clarifies that, if an election of one or more
directors will take place at a special meeting, nominations for
the director position must be submitted to the Company's Secretary
prior to the close of business on the tenth day following the
public announcement of the special meeting.
The Company will hold a special meeting of shareholders on
April 2, 2012, at which, among other things, holders of record of
its 6.25% Series A Cumulative Convertible Preferred Stock will
have the right to nominate and elect a director to fill the
vacancy created by the resignation of Joseph R. Siegelbaum, who
had previously been elected to the Board by the Preferred
Stockholders.
Under the terms of the Preferred Stock, if the Company fails to
pay the Preferred Stock dividend for six consecutive quarterly
periods, the Preferred Stockholders are entitled to elect two
directors until the dividends are paid in full. As of March 8,
2012, the Company had not paid the Preferred Stock dividend for
more than six consecutive quarterly periods. The Preferred
Stockholders previously elected David Gale to serve as one of the
two directors the Preferred Stockholders are entitled to elect.
Mr. Gale continues to serve as a director of the Company.
Pursuant to the By-Laws, any nominations for the vacant director
position must be received by the Company's Secretary prior to the
close of business on the tenth day following this announcement of
the special meeting, which is March 19, 2012. Section 2.11 of the
By-Laws requires that nominations must be in writing and must
include all information required by Regulation 14A promulgated
pursuant to the Securities Exchange Act of 1934, as amended. In
addition, any nomination must include the nominee's written
consent to be named in the Company's proxy statement as a nominee
and his or her agreement to serve as a director if elected.
Failure to follow the procedures set forth in the By-Laws will
result in a nomination being declared defective.
About Emmis Communications
Headquartered in Indianapolis, Indiana, Emmis Communications
Corporation -- http://www.emmis.com/-- owns and operates 22 radio
stations serving New York, Los Angeles, Chicago, St. Louis,
Austin, Indianapolis, and Terre Haute, as well as national radio
networks in Slovakia and Bulgaria. The company also publishes six
regional and two specialty magazines.
The Company reported a consolidated net loss of $11.54 million on
$251.31 million of net revenues for the year ended Feb. 28, 2011,
compared with a consolidated net loss of $118.49 million on
$242.56 million of net revenues during the prior year.
For the nine months ended Nov. 30, 2011, the Company reported net
income attributable to common shareholders of $97.72 million on
$185.08 million of net revenues, compared with a net loss
attributable to common shareholders of $7.92 million on
$193.24 million of net revenues for the same period during the
prior year.
The Company's balance sheet at Nov. 30, 2011, showed
$365.70 million in total assets, $344.92 million in total
liabilities, $56.38 million in series A cumulative convertible
preferred stock and a $35.60 million total deficit.
* * *
Emmis carries as 'Caa2' corporate family rating and 'Caa3'
probability of default rating from Moody's.
ENER1 INC: Chapter 11 Plan to Be Declared Effective Wednesday
-------------------------------------------------------------
Boris Zingarevich, Ener1 Group, Inc., and Bzinfin S.A. filed with
the U.S. Securities and Exchange Commission Amendment No. 16 to
their Schedule 13D. Item 4 of the Statement was amended to add
the following information:
On Feb. 27, 2012, the Company, Bzinfin and the other Participating
Lenders entered into an Agreement and Consent to amend certain
provisions of the Plan and the form of New Notes Loan Agreement.
On Feb. 28, 2012, the Bankruptcy Court entered an order confirming
the Plan, as amended, in accordance with the Agreement and
Consent, the Plan is expected to become effective, subject to
certain conditions that must be satisfied, on or about March 14,
2012.
The Plan provides for a restructuring of the Company's long-term
debt and the infusion of up to $86 million of new capital pursuant
to the terms and subject to the conditions of the equity
commitment agreement that will provide both exit financing and
working capital to conduct the continued operation of the
Company's consolidated subsidiaries. The first $55 million under
the Exit Financing will be provided by Bzinfin, and will be
comprised of cash plus the principal amount outstanding under the
DIP Facility, which amount will be converted into New Preferred
Stock. The balance of $31 million will be provided by Bzinfin
together with the other Participating Lenders.
Pursuant to the Plan, the Company's $57.3 million in outstanding
principal amount of Tranche A and Tranche B 8.25% senior unsecured
notes, $10.0 million in outstanding principal amount of 6% senior
convertible notes and the Company's Line of Credit Facility, under
which $11.2 million principal is outstanding will be terminated in
exchange for (i) a combination of shares of new common stock, par
value $0.01 per share, issued by the reorganized Company.
Aside from the restructured long-term debt, the claims of general
unsecured creditors are unimpaired and will be paid by the Company
in full in the ordinary course of business pursuant to the Plan.
Pursuant to the Plan, all of the Company's currently outstanding
Common Stock will be cancelled on the Effective Date without
receiving any distribution.
Mr. Zingarevich and his affiliates disclosed that, as of Feb. 27,
2012, they beneficially own 104,376,280 shares of common stock of
Ener1, Inc., representing 47.3% of the shares outstanding.
A copy of the amended Schedule is available for free at:
http://is.gd/xq2wy6
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.
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.
EOS PREFERRED: To Sell $178.4 Million Bank and Company Loans
------------------------------------------------------------
EOS Preferred Corporation and Aurora Bank FSB finalized a
Commercial Loan and REO Purchase Agreement with Dawn LLC pursuant
to which the Company contracted to sell certain small balance
commercial loans and the Bank contracted to sell various
commercial loans to the Purchaser. The total purchase price for
all Bank and Company loans is $178,423,127. The Agreement was
executed following approval by the Company's Board of Directors by
special meeting held on Feb. 28, 2012.
About EOS Preferred
Based in New York, EOS Preferred Corporation (formerly Capital
Crossing Preferred Corporation) is a Massachusetts corporation
with the principal business objective to hold mortgage assets that
will generate net income for distribution to stockholders. The
Company was organized on March 20, 1998, to acquire and hold real
estate assets and Aurora Bank FSB, an indirect wholly-owned
subsidiary of Lehman Brothers Holdings Inc., owns all of the
Company's common stock. Effective June 21, 2010, the Company
changed its corporate name to EOS Preferred Corporation.
The Company operates in a manner intended to allow its to be taxed
as a real estate investment trust, or a "REIT," under the Internal
Revenue Code of 1986, as amended. As a REIT, EOS will not be
required to pay federal or state income tax if it distributes its
earnings to its shareholders and continues to meet a number of
other requirements.
As reported by the TCR on April 6, 2011, Ernst & Young LLP, in New
York, expressed substantial doubt about the Company's ability to
continue as a going concern. On Sept. 15, 2008, Lehman Brothers
Holdings Inc., indirect parent company to Aurora Bank FSB, and
ultimate parent company of EOS Preferred Corporation, filed a
voluntary petition under Chapter 11 of the U.S. Bankruptcy Code.
Aurora Bank, the sole owner of the common stock of EOS Preferred
Corporation, is subject to a Cease and Desist Order, dated Jan.
26, 2009, and a Prompt Corrective Action Directive, dated Feb. 4,
2009, issued by the Office of Thrift Supervision, requiring Aurora
Bank, among other matters, to submit a capital restoration plan
and a liquidity management plan, and imposing restrictions on
certain activities of Aurora Bank and EOS Preferred Corporation.
According to the independent auditors, the bankruptcy of Lehman
Brothers and the ability of the OTS to regulate and restrict the
business and operations of EOS Preferred Corporation, in light of
the Cease and Desist Order and the Prompt Corrective Action
Directive, raise substantial doubt about EOS Preferred
Corporation's ability to continue as a going concern.
The Company's balance sheet at Sept. 30, 2011, showed $87.07
million in total assets, $357,000 in total liabilities and $86.71
million in total stockholders' equity.
EV ENERGY: Moody's Rates $200-Mil. Sr. Unsecured Notes at 'B3'
--------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to EV Energy
Partners, L.P.'s (EVEP) proposed $200 million of senior unsecured
notes. EVEP's other ratings remain unaffected. The outlook is
stable.
Net proceeds from the offering will be used to reduce borrowings
under the partnership's $800 million revolving credit facility,
which was drawn to fund several acquisitions in late 2011.
Ratings Rationale
"The amount of debt issuance is consistent with our expectations
that EVEP would ultimately finance last November's acquisitions
with roughly 40% debt and 60% equity," noted Sajjad Alam, Moody's
analyst. "The partnership raised $268 million of equity in
February 2012 and applied those proceeds to reduce revolver
borrowings. These combined debt and equity issuances should
provide solid near term liquidity support."
EVEP's B1 Corporate Family Rating reflects its small production
base relative to similarly rated E&P peers, a natural gas-weighted
production profile in an oversupplied North American gas market,
and its master limited partnership organizational structure which
imposes a high distribution burden and necessitates periodic
acquisitions. The rating is supported by EVEP's durable asset base
with predictable geology, modestly diversified operations, and low
leverage on proved reserves. The rating also considers the value
in the partnership's significant acreage holdings in the Utica
shale. EVEP has historically issued equity to finance a
significant portion of its acquisition growth, which Moody's
expects to continue.
The new senior notes are unsecured, guaranteed by EVEP's
restricted subsidiaries and were issued under the same indenture
governing the existing $300 million notes. EVEP's $800 million
borrowing base revolving credit facility has a first-lien secured
claim to substantially all of the partnership's assets. Given the
substantial size and priority claim of the credit facility, the
notes are rated two notches below EV Energy's B1 CFR, in
accordance with Moody's Loss Given Default Methodology.
The stable outlook reflects the rating agency's expectation that
EV Energy will grow production and reserves to support its cash
flow distributions and capital development program without any
material increase in leverage.
Given its high payout model and gas-weighted production profile,
Moody's would look for higher sustainable production and lower
leverage to consider a positive rating action. An upgrade is
possible if EVEP can sustain production above 40,000 barrels of
oil equivalent (boe) per day and hold its debt to average daily
production below $20,000 per boe.
A negative rating action could result if leverage, production or
operating costs materially deteriorate from today's levels. More
specifically, if it appears that debt to average daily production
will remain elevated over $30,000 per boe over an extended period,
the CFR will be downgraded.
The principal methodologies used in rating EV Energy Partners L.P.
were the Independent Exploration and Production Industry
methodology published in December 2011, and the Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA, published in June 2009.
EV Energy Energy Partners L.P. is a publicly traded oil and gas
exploration and production master limited partnership
headquartered in Houston, Texas.
EVERGREEN SOLAR: Calare Group Wants to Buy Empty Building
---------------------------------------------------------
Lisa Eckelbecker of the Telegram reports that Peter C. Lowitt,
director of the Devens Enterprise Commission, the permitting
authority for Devens in Massachusetts, said Calare Properties of
Hudson and Hackman Capital of Los Angeles are working to buy
Evergreen Solar's empty building.
"The Calare group is working with the bankruptcy court to secure
the property," the report quotes Mr. Lowitt said. "We're hoping
it will be imminent, but we don't really know."
According to the report, the group reportedly is negotiating with
potential tenants for the space. Calare and Hackman jointly
manage several industrial properties in Central Massachusetts,
including in Devens, Clinton, Gardner and Westminster.
The report notes that Evergreen received $58 million in state
grants, tax incentives and loans to help it build the Devens
facility. After Evergreen filed for bankruptcy in August, state
officials said they would work to recoup some of those incentives.
The report, citing court documents, says Evergreen's remaining
assets include its property in Devens and certain contracts. The
company "no longer possesses an operating business and has begun
the process of winding down its estates."
About Evergreen Solar
Evergreen Solar, Inc. -- http://www.evergreensolar.com/--
developed, manufactured and marketed String Ribbon solar power
products using its proprietary, low-cost silicon wafer technology.
The Marlboro, Mass.-based Company filed for Chapter 11 bankruptcy
(Bankr. D. Del. Case No. 11-12590) on Aug. 15, 2011, before Judge
Mary F. Walrath. The Company's balance sheet at April 2, 2011,
showed $373,972,000 in assets, $455,506,000 in total liabilities,
and a stockholders' deficit of $81,534,000.
Ronald J. Silverman, Esq., and Scott K. Seamon, Esq., at Bingham
McCutchen LLP, serve as general bankruptcy counsel to the Debtor.
Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski
Stang Ziehl & Jones LLP, serve as co-counsel. Hilco Industrial
LLC serves as exclusive marketing and sales agent. Klehr Harrison
Harvey Branzburg serves as special conflicts counsel. Zolfo
Cooper LLC is the financial advisor. UBS Securities, LLC, serves
as investment banker. Epiq Bankruptcy Solutions has been tapped
as claims agent.
In conjunction with the Chapter 11 filing, the Company entered
into a restructuring support agreement with certain holders of
more than 70% of the outstanding principal amount of the Company's
13% convertible senior secured notes. As part of the bankruptcy
process the Company will undertake a marketing process and will
permit all parties to bid on its assets, as a whole or in groups
pursuant to 11 U.S.C. Sec. 363. An entity formed by the
supporting noteholders, ES Purchaser, LLC, entered into an asset
purchase agreement with the Company to serve as a 'stalking-horse"
and provide a "credit-bid" pursuant to the Bankruptcy Code for
assets being sold.
The supporting noteholders are represented by Michael S. Stainer,
Esq., and Natalie E. Levine, Esq., at Akin Gump Strauss Hauer &
Feld LLP, in New York.
An official committee of unsecured creditors has retained Pepper
Hamilton and Kramer Levin Naftalis & Frankel as counsel. The
Committee tapped Garden City Group as communications services
agent.
Evergreen Solar is at least the fourth solar company to seek court
protection from creditors since August 2011. Other solar firms
are start-up Spectrawatt Inc., which also filed in August,
Solyndra Inc., which filed early in September, and Stirling Energy
Systems Inc., which filed for Chapter 7 bankruptcy late in
September.
Evergreen sold the assets piecemeal in three auctions. Max Era
Properties Ltd. from Hong Kong paid $6 million cash and $3.2
million in stock of China Private Equity Investment Holdings
Ltd. for the company name, intellectual property, and wafermaking
assets. Kimball Holdings LLC paid $3.8 million for solar panel
inventory while the secured lenders exchanged $21.5 million of
their $165 million claim for a $171 million claim against Lehman
Brothers Holdings Inc. Max Era and Sovello AG bought equipment
and machinery located at the Debtor's Devens, Massachusetts
facility for $8.9 million.
FIFTH THIRD: Moody's Gives '(P)Ba1' Preferred Shelf Rating
----------------------------------------------------------
Moody's Investors Service issued a summary credit opinion on Fifth
Third Bancorp and includes certain regulatory disclosures
regarding its ratings. The release does not constitute any change
in Moody's ratings or rating rationale for Fifth Third Bancorp and
its affiliates.
Moody's current ratings on Fifth Third Bancorp and its affiliates
are:
Long Term Issuer rating of Baa1
Senior Unsecured (domestic currency) ratings of Baa1
Subordinate (domestic currency) ratings of Baa2
Preferred Stock Non-cumulative (domestic currency) ratings of
Ba1; (hyb)
Senior Unsecured Shelf (domestic currency) ratings of (P)Baa1
Subordinate Shelf (domestic currency) ratings of (P)Baa2
Junior Subordinate Shelf (domestic currency) ratings of (P)Baa3
Preferred Shelf (domestic currency) ratings of (P)Baa3
Preferred shelf -- PS2 (domestic currency) ratings of (P)Ba1
Fifth Third Bank, Ohio
Long Term Issuer rating of A3
Senior Unsecured (domestic currency) ratings of A3
Senior Unsecured Bank Note Program (domestic currency) ratings
of (P)A3
Long Term Bank Deposits (domestic currency) ratings of A3
Long Term Deposit Note/CD Program (domestic currency) ratings of
(P)A3
Long Term Other Senior Obligations ratings of A3
Bank Financial Strength ratings of C
Subordinate Bank Note Program (domestic currency) ratings of
(P)Baa1
Subordinate (domestic currency) ratings of Baa1
Short Term Bank Note Program (domestic currency) ratings of
P-2/(P)P-2
Short Term Bank Deposits (domestic currency) ratings of P-2
Short Term Other Senior Obligations ratings of P-2
Fifth Third Capital Trust II
BACKED Preferred Shelf (domestic currency) ratings of (P)Baa3
Fifth Third Capital Trust IV
BACKED Preferred Stock (domestic currency) ratings of Baa3;
(hyb)
BACKED Preferred Shelf (domestic currency) ratings of (P)Baa3
Fifth Third Capital Trust V
BACKED Preferred Stock (domestic currency) ratings of Baa3;
(hyb)
BACKED Preferred Shelf (domestic currency) ratings of (P)Baa3
Fifth Third Capital Trust VI
BACKED Preferred Stock (domestic currency) ratings of Baa3;
(hyb)
BACKED Preferred Shelf (domestic currency) ratings of (P)Baa3
Fifth Third Capital Trust VIII
BACKED Preferred Shelf (domestic currency) ratings of (P)Baa3
Fifth Third Capital Trust IX
BACKED Preferred Shelf (domestic currency) ratings of (P)Baa3
Fifth Third Capital Trust X
BACKED Preferred Shelf (domestic currency) ratings of (P)Baa3
Fifth Third Capital XI
BACKED Preferred Shelf (domestic currency) ratings of (P)Baa3
Fifth Third Capital XII
BACKED Preferred Shelf (domestic currency) ratings of (P)Baa3
Ratings Rationale
Moody's assigns a bank financial strength rating (BFSR) of C to
Fifth Third Bancorp's lead bank, Fifth Third Bank. The bank is
also rated A3/Prime-2 for deposits. Fifth Third's ratings are
supported by its solid direct banking franchise in the US Midwest
and, to a lesser extent, in the Southeast, where its market shares
are more modest. Fifth Third's good capital position, improved
asset quality and healthy liquidity profile also provide rating
support.
Nonetheless, Fifth Third, like much of the industry, faces
earnings challenges from the protracted low interest rate
environment, slow economic recovery and regulatory pressure on
fees and expenses. We note that net income in 2010 and 2011 was
supported by the release of loan loss reserves, a benefit that
will erode over time. The bank's profitability challenges are
incorporated in its ratings.
Rating Outlook
The rating outlook is stable.
What Could Change the Rating - Up
Meaningful pre-provision income growth that proves to be
sustainable, without adding incremental risk, could lead to
positive rating pressure.
What Could Change the Rating - Down
Given the favorable trend in Fifth Third's credit metrics, as well
as its good capital and liquidity profiles, we see limited
downward rating pressure absent a significant strategic shift.
The methodologies used in these ratings were Bank Financial
Strength Ratings: Global Methodology published in February 2007,
Incorporation of Joint-Default Analysis into Moody's Bank Ratings:
A Refined Methodology published in March 2007, and Moody's
Guidelines for Rating Bank Hybrid Securities and Subordinated Debt
published in November 2009.
FIRST DATA: Plans to Offer $850 Million Senior Secured Notes
------------------------------------------------------------
First Data Corporation intends to offer $850 million aggregate
principal amount of senior secured notes due 2019. In accordance
with the terms of its senior secured credit facilities, First Data
will use the proceeds from the offering to repay a portion of its
outstanding senior secured term loans.
The Notes have not been registered under the Securities Act of
1933, as amended, and, unless so registered, may not be offered or
sold in the United States absent registration or an applicable
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and other
applicable securities laws.
About First Data
Based in Atlanta, Georgia, First Data Corporation, with over
$10 billion of revenue for the 12 months ended June 30, 2010,
provides commerce and payment solutions for financial
institutions, merchants, and other organizations worldwide.
The Company reported a net loss of $336.10 million in 2011, a net
loss of $846.90 million in 2010, and a net loss of $1.01 billion
on $9.31 million in 2009.
The Company's balance sheet as of Dec. 31, 2011, showed
$40.27 billion in total assets, $36.80 billion in total
liabilities, and $3.40 billion in total equity.
* * *
The Company's carries a 'B3' corporate family rating, with a
stable outlook, from Moody's Investors Service, a 'B' corporate
credit rating, with stable outlook, from Standard & Poor's, and
a 'B' long-term issuer default rating from Fitch Ratings.
Standard & Poor's Ratings Services in December 2010 assigned its
'B-' issue rating with a '5' recovery rating to First Data Corp.'s
(B/Stable/--) $2 billion of 8.25% second-lien cash-pay notes due
2021, $1 billion $8.75% second-lien pay-in-kind-toggle notes due
2022, and $3 billion 12.625% unsecured cash-pay notes due 2021.
The '5' recovery rating indicates lenders can expect modest (10%-
30%) recovery in the event of payment default. Under S&P's
default analysis, there is insufficient collateral to fully cover
First Data's first-lien debt. As a result, the remaining value of
the company (generated by non-U.S. assets and not pledged) would
be shared pari passu among the uncovered portion of first-lien
debt, new second-lien debt, and new and existing unsecured debt.
FREDDIE MAC: Faulted With FHFA on Loan Servicers Oversight
----------------------------------------------------------
American Bankruptcy Institute reports that Freddie Mac and its
regulator, the Federal Housing Finance Agency, need to do a better
job supervising financial institutions servicing the company's
loans, according to the FHFA Office of Inspector General.
About Freddie Mac
Based in McLean, Virginia, the Federal Home Loan Mortgage
Corporation, known as Freddie Mac (OTCBB: FMCC) --
http://www.FreddieMac.com/-- was established by Congress in
1970 to provide liquidity, stability and affordability to the
nation's residential mortgage markets. Freddie Mac supports
communities across the nation by providing mortgage capital to
lenders. Over the years, Freddie Mac has made home possible for
one in six homebuyers and more than five million renters.
Freddie Mac is under conservatorship and is dependent upon the
continued support of Treasury and the Federal Housing Finance
Agency acting as conservator to continue operating its
business.
FIRST NIAGARA: Moody's Issues Summary Credit Opinion
----------------------------------------------------
Moody's Investors Service's issued a summary credit opinion on
First Niagara Financial Group, Inc. and includes certain
regulatory disclosures regarding its ratings. The release does not
constitute any change in Moody's ratings or rating rationale for
First Niagara Financial Group, Inc.
Moody's current ratings on First Niagara Financial Group, Inc.
are:
Long Term Issuer (domestic currency) rating of Baa2
Senior Unsecured (domestic currency) ratings of Baa2
Subordinate (domestic currency) ratings of Baa3
Preferred Stock Non-cumulative (domestic currency) ratings of Ba2;
(hyb)
Senior Unsecured Shelf (domestic currency) ratings of (P)Baa2
Subordinate Shelf (domestic currency) ratings of (P)Baa3
Preferred Shelf (domestic currency) ratings of (P)Ba1
Preferred shelf -- PS2 (domestic currency) ratings of (P)Ba2
RATINGS RATIONALE
Moody's assigns a standalone bank financial strength rating (BFSR)
of C- to First Niagara Bank, N.A., which translates into a
baseline credit assessment (BCA) of Baa1. The BCA is the
standalone rating mapped to the long-term scale. Moody's assumes
no probability of systemic support, so the bank's long-term
deposit rating is identical to its BCA of Baa1. The Baa1 rating
maps to a short-term rating of Prime-2. First Niagara Bank, N.A.
is the bank subsidiary of Buffalo, New York-based First Niagara
Financial Group, Inc. The holding company's senior debt rating is
Baa2.
The ratings reflect First Niagara's good core franchise in Upstate
New York, where it holds solid market shares in its primary
operating markets, and its healthy and consistent financial
fundamentals. The fundamentals are underpinned by strong asset
quality, sound pre-provision income from a stable net interest
margin and good underlying operating efficiency, and a solid
capital position.
The ratings also incorporate the inherent risks associated with
First Niagara's rapid transition to a much larger regional bank
through acquisitions in new markets in the Northeast. In April
2011, First Niagara completed the acquisition of Connecticut-based
NewAlliance Bancshares, Inc. (NewAlliance), its largest
acquisition to date at approximately $9 billion in assets or 43%
of First Niagara's balance sheet. This acquisition followed recent
sizable acquisitions in Western and Southeastern Pennsylvania. As
a result, First Niagara's asset size has more than tripled since
2008. This rapid growth increases First Niagara's risk profile,
and resulted in a one-notch downgrade of First Niagara's long-term
ratings on April 18, 2011. The ratings also incorporate the risk
posed by First Niagara's pending acquisition of HSBC's Upstate New
York branches, which is expected to close in the second quarter of
2012.
Rating Outlook
The rating outlook on First Niagara is stable. The stable outlook
is supported by: 1) First Niagara's good track record of acquiring
and integrating banks, which lessens the integration risk and 2)
its solid capital position, which will allow it to absorb credit
costs should economic conditions deteriorate beyond current
expectations.
What Could Change the Rating - Up
Moody's does not expect positive rating pressure to emerge over
the next 12-18 months given First Niagara's rapid growth in recent
years. However, positive pressure could develop over time if First
Niagara realizes the expected benefits of its expanded franchise -
strengthened deposit and customer base, improved profitability -
after successfully integrating the acquisitions.
What Could Change the Rating - Down
First Niagara's ratings could be downgraded if its financial
fundamentals, asset quality and capital in particular, weaken
significantly from their current levels.
The methodologies used in this rating were Bank Financial Strength
Ratings: Global Methodology published in February 2007,
Incorporation of Joint-Default Analysis into Moody's Bank Ratings:
A Refined Methodology published in March 2007, and Moody's
Guidelines for Rating Bank Hybrid Securities and Subordinated Debt
published in November 2009.
FOXCO ACQUISITION: Moody's Ups CFR to B2, Sr Notes Rating to Caa1
-----------------------------------------------------------------
Moody's Investors Service upgraded FoxCo Acquisition Sub, LLC.'s
Corporate Family Rating (CFR) and Probability of Default Rating
(PDR) each to B2 from B3. Moody's also upgraded the company's
13.375% Senior Notes to Caa1, LGD5 -- 86% from Caa2, LGD5 -- 86%.
The upgrades reflect the company's improved credit metrics and
Moody's expectations for continued good performance over the
rating horizon. The $50 Million 1st Lien Senior Secured Revolver
and $515 Million 1st Lien Senior Secured Term Loan B were each
affirmed at B1. Moody's also changed the rating outlook to stable
from positive.
Upgrades:
Issuer: FoxCo Acquisition Sub, LLC
Corporate Family Rating: Upgraded to B2 from B3
Probability of Default Rating: Upgraded to B2 from B3
13.375% Senior Notes due July 15, 2016 ($200 million
outstanding): Upgraded to Caa1, LGD5 -- 86% from Caa2, LGD5 --
86%
Unchanged:
Issuer: FoxCo Acquisition Sub, LLC
$50 Million 1st Lien Senior Secured Revolver due July 2014:
Affirmed B1 (LGD point estimates updated to LGD3 -- 33% from
LGD3 -- 32%)
$515 Million 1st Lien Senior Secured Term Loan B due July 2015
($409 million outstanding): Affirmed B1, LGD (point estimates
updated to LGD3 -- 33% from LGD3 -- 32%)
Outlook Actions:
Issuer: FoxCo Acquisition Sub, LLC
Outlook, Changed to Stable from Positive
Ratings Rationale
FoxCo's B2 corporate family rating reflects moderately high
leverage with a two-year average debt-to-EBITDA ratio of 5.7x for
December 31, 2011 (including Moody's standard adjustments).
Meaningful leverage reduction compared to the 7.3x two year
average debt-to-EBITDA ratio reported for 2010 was achieved
through improved operating performance over the last two years in
addition to debt prepayments. As expected, FoxCo grew EBITDA for
FYE 2011 to more than $110 million (including Moody's standard
adjustments) meaningfully higher than EBITDA of $72 million
reported in FY2009, reflecting an improving economy and a recovery
in advertising demand, especially for auto and retail sectors.
"The company prepaid $25 million of term loan balances in 2011,
and we note that revenues of $333 million for FY2011 matched
revenues for FY2010 despite the absence of significant political
ad sales. With a focus on local markets, management was able to
offset the expected loss of political revenues in FY2011 by
growing core ad revenues and negotiating higher retransmission
fees," stated Carl Salas, Moody's Vice President and Senior
Analyst.
Looking forward, Moody's expects the company to generate at least
high single digit revenue growth in 2012 given strong demand for
political advertising. Beyond 2012, FoxCo will benefit from
expected increases in retransmission revenues and related cash
flow helping to offset the absence of political revenues in 2013.
Moody's believes the company needs to continue reducing debt
balances given expected revenue declines in non-election years and
vulnerability to economic cycles. Lack of national scale and a
station portfolio with mostly Fox affiliates constrain ratings. As
a television broadcaster, FoxCo faces increased competition for
advertising dollars due to ongoing media fragmentation. Ratings
are supported by good EBITDA margins enhanced by cost savings from
its operating agreement with Local TV and its management contract
with Tribune Company. Cash balances of a minimum $10 million over
the rating horizon plus $50 million of availability under its
revolver facility provide good liquidity.
The stable outlook reflects Moody's view that FoxCo will grow core
advertising revenues and apply excess cash to reduce debt balances
resulting in two year debt-to-EBITDA ratios remaining below
current levels (including Moody's standard adjustments). The
outlook also incorporates Moody's expectations that the company
will maintain good liquidity and generate mid to high single-digit
free cash flow-to-debt ratios.
Ownership by a financial sponsor constrains ratings; however,
ratings could be upgraded if revenue growth and debt repayments
result in trailing two-year debt-to-EBITDA ratios remaining below
4.75x and management provides assurances that they would operate
the company consistent with the higher rating. FoxCo would also
need to maintain good liquidity including expectations for high
single-digit free cash flow-to-debt ratios. Ratings could be
downgraded if the company is not able to grow core revenues due to
weak ad demand in key markets, reflecting economic weakness or
lack of competitive Fox programming, and resulting in two-year
debt-to-EBITDA ratios (including Moody's standard adjustments)
increasing above 6.0x. Weakened liquidity, including low single-
digit free cash flow, or reduced EBITDA cushion to the covenants,
could also lead to a downgrade.
Formed in July 2008 through the acquisition of eight stations from
Fox Television Stations, Inc., FoxCo Acquisition Sub, LLC owns or
operates 10 stations in DMAs that rank from 17 to 57, including
seven owned Fox affiliates and one owned CBS affiliate, plus two
stations operated under Local Marketing Agreements with Tribune
Broadcasting. Local TV Holdings, LLC, which is 95% owned by
affiliates of Oak Hill Capital Partners, serves as FoxCo's parent
company. The Company maintains headquarters in Fort Wright,
Kentucky and revenue for the twelve months ended December 31,
2011, totaled $333 million.
The principal methodology used in rating FoxCo was the Global
Broadcast Industry Methodology published in September 2008. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
FREEZE LLC: Exclusive Plan Filing Period Extended to April 11
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
extended the period during which only Freeze, LLC, and its
affiliates may file a chapter 11 plan through and including April
11, 2012, and the period during which only they may solicit votes
to accept a proposed chapter 11 plan through and including June
11, 2012.
As reported in the Troubled Company Reporter on Feb. 6, 2012,
counsel to the Debtors, Kathleen Makowski, Esq., at Pachulski
Stang Ziehl & Jones LLP, informed the Court that the Debtors, as
equity holder of Friendly Ice Cream Corporation (FICC), needed to
wait until FICC completed the sale of substantially all of their
assets before they could formulate their Chapter 11 exit strategy.
Ms. Makowski explains that the Debtors will likely receive no
recovery on account of their equity interests in FICC and,
therefore, anticipate that the timely wind-down of the Debtors'
estates will be addressed in the Chapter 11 plan filed in the
Debtors' chapter 11 cases, which the Debtors hope to file prior to
the expiration of the initial exclusive periods. Therefore, the
Debtors seek an extension of the initial exclusive periods out of
an abundance of caution, to maintain a stable wind-down process.
About Freeze LLC
Freeze, LLC dba Sun Freeze, LLC and its affiliates -- Freeze
Holdings, LP, Freeze Group Holding Corp., Freeze Operations
Holding Corp. -- filed for Chapter 11 bankruptcy (Bankr. D.
Del. Case Nos. 11-13304 to 11-13306) on Oct. 14, 2011. Laura
Davis Jones, Esq. at Pachulski Stang Ziehl & Jones LLP, in
Wilmington, Delaware serves as counsel to the Debtors.
Freeze, LLC, scheduled $51.95 million in assets and $0 in
liabilities. Freeze Group Holdings Corp. scheduled $0 in assets
and $51.94 million in liabilities.
FUEL DOCTOR: Enters Into Agency Agreement with Gulf Caravan
-----------------------------------------------------------
Fuel Doctor Holdings, Inc., on Feb. 19, 2012, entered into an
agency agreement, effective as of Feb. 1, 2012, with Gulf Caravan
Trading., an unaffiliated company located in Saudi Arabia pursuant
to which the Agent will have the exclusive right and license to
sell, market and distribute the Company's fuel saving component
which reduces the utilization of fuel known as "Fuel Doctor" to
potential clients in Saudi Arabia, Bahrain, Qatar, Kuwait, United
Arab or Emirates, Oman, Jordan, Lebanon, Egypt, Sudan and Kenya.
The exclusivity of the Agreement is subject to the Agent meeting
certain minimum purchase orders requirements during the Term of
the Agreement.
The Agreement will have an initial term commencing on the
Effective Date and ending on Aug. 1, 2017. Notwithstanding the
foregoing, the Agreement may be terminated (i) by either party
upon a material breach of the Agreement (ii) by the Company upon a
change of ownership of the Agent or (iii) by mutual written
agreement of the parties. The Agent will have the option to
extend the Term for an additional five-year term upon delivery of
written notice to Company no earlier than 180 days or later than
90 days prior to the expiration of the Term and the option will be
based on satisfying certain requirements.
In consideration for the grant of the exclusive license, the Agent
agreed to provide the Company with certain fees for each Product
purchased by Agent. The fees payable to the Company will be for a
period of 12 months after the Effective Date of the Agreement and
thereafter the Company and Agent may mutually agree upon any price
modification. In the event that the parties fail to agree upon
such price modifications, the Agreement will be terminated
immediately.
A copy of the Agency Agreement is available for free at:
http://is.gd/7qDRns
About Fuel Doctor
Calabasas, Calif.-based Fuel Doctor Holdings, Inc., is the
exclusive distributor for the United States and Canada of a fuel
efficiency booster (the FD-47), which plugs into the lighter
socket/power port of a vehicle and increases the vehicle's miles
per gallon through the power conditioning of the vehicle's
electrical systems. The Company has also developed, and plans on
continuing to develop, certain related products.
For the nine months ended Sept. 30, 2011, the Company has reported
a net loss of $1.9 million on $811,576 of revenues, compared with
a net loss of $1.7 million on $603,329 of revenues for the
corresponding period last year.
The Company had an accumulated deficit at Sept. 30, 2011, had a
net loss and net cash used in operating activities for the interim
period then ended. "While the Company is attempting to generate
sufficient revenues, the Company's cash position may not be
sufficient to support the Company's daily operations," the Company
said in the filing.
GATEHOUSE MEDIA: Bank Debt Trades at 71% Off in Secondary Market
----------------------------------------------------------------
Participations in a syndicated loan under which GateHouse Media,
Inc., is a borrower traded in the secondary market at 29.13 cents-
on-the-dollar during the week ended Friday, March 9, 2012, a drop
of 0.31 percentage points from the previous week according to data
compiled by Loan Pricing Corp. and reported in The Wall Street
Journal. The Company pays 200 basis points above LIBOR to borrow
under the facility. The bank loan matures on Feb. 27, 2014, and
carries Moody's Ca rating and Standard & Poor's CCC- rating. The
loan is one of the biggest gainers and losers among 179 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
About GateHouse Media
GateHouse Media, Inc. -- http://www.gatehousemedia.com/--
headquartered in Fairport, New York, is one of the largest
publishers of locally based print and online media in the United
States as measured by its 97 daily publications. GateHouse Media
currently serves local audiences of more than 10 million per week
across 21 states through hundreds of community publications and
local Web sites.
The Company reported a net loss of $28.42 million on $381.35
million of total revenues for the nine months ended Sept. 25,
2011, compared with a net loss of $27.74 million on $415.22
million of total revenues for the nine months ended Sept. 30,
2010.
The Company reported a net loss of $26.64 million on $558.58
million of total revenue for the year ended Dec. 31, 2010,
compared with a net loss of $530.61 million on $584.79 million of
total revenue for the year ended Dec. 31, 2009.
The Company's balance sheet at Sept. 25, 2011, showed $511.80
million in total assets, $1.32 billion in total liabilities, and a
$811.28 million total stockholders' deficit.
GATEHOUSE MEDIA: Incurs $22.2 Million Net Loss in 2011
------------------------------------------------------
GateHouse Media, Inc., filed with the U.S. Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$22.22 million on $525.79 million of total revenues for the year
ended Jan. 1, 2012, a net loss of $26.64 million on $558.58
million of total revenues for the year ended Dec. 31, 2010, and a
net loss of $530.61 million on $584.79 million of total revenues
for the year ended Dec. 31, 2009.
The Company's balance sheet at Jan. 1, 2012, showed $510.80
million in total assets, $1.31 billion in total liabilities and a
$805.63 million total stockholders' deficit.
Bankruptcy Warning
According to the Form 10-K for the year ended Dec. 31, 2011, the
Company's ability to make payments on its indebtedness as required
depends on its ability to generate cash flow from operations in
the future. This ability, to a certain extent, is subject to
general economic, financial, competitive, legislative, regulatory
and other factors that are beyond the Company's control.
There can be no assurance that the Company's business will
generate cash flow from operations or that future borrowings will
be available to the Company in amounts sufficient to enable it to
pay its indebtedness or to fund our other liquidity needs.
Currently the Company does not have the ability to draw upon its
revolving credit facility which limits its immediate and short-
term access to funds. If the Company is unable to repay its
indebtedness at maturity the Company may be forced to liquidate or
reorganize its operations and business under the federal
bankruptcy laws.
A full-text copy of the Form 10-K is available for free at:
http://is.gd/AiqhHY
About GateHouse Media
GateHouse Media, Inc. -- http://www.gatehousemedia.com/--
headquartered in Fairport, New York, is one of the largest
publishers of locally based print and online media in the United
States as measured by its 97 daily publications. GateHouse Media
currently serves local audiences of more than 10 million per week
across 21 states through hundreds of community publications and
local Web sites.
GENERAL AUTO: Hires Tonkon Torp as Bankruptcy Counsel
-----------------------------------------------------
General Auto Building, LLC, seeks Bankruptcy Court authority to
employ Tonkon Torp LLP as Chapter 11 counsel.
The Debtor has asked Tonkon Torp to advise it on its debt
restructuring and to render general legal services to Debtor as
needed throughout the course of the Chapter 11 case, including
bankruptcy and restructuring, corporate, environmental, finance,
litigation, real estate, regulatory, securities, labor, and tax
assistance and advice. Albert N. Kennedy and Ava L. Schoen are
the attorneys at Tonkon Torp who will be primarily involve in the
Chapter 11 case.
Within the nine-week period preceding the Petition Date, Tonkon
Torp provided legal services to the Debtor related to pre-
bankruptcy planning.
The Debtor has agreed to compensate Tonkon Torp on an hourly basis
in accordance with Tonkon Torp's ordinary and customary hourly
rates in effect on the date services are rendered. The Tonkon Torp
professionals who will be primarily responsible for providing
these services, their status and their current billing rates are:
Attorney Name Status Hourly Rate
------------- ------ -----------
Albert N. Kennedy Partner $475
Ava L. Schoen Associate $275
Spencer Fisher Paralegal $150
From time to time, other Tonkon Torp attorneys and paralegals may
also render services to Debtor in order to take advantage of
specialized skills or expertise, to meet the demands of the case
schedule or for other appropriate reasons. Debtor has agreed that
Tonkon Torp will also be compensated for the services of these
professionals at their usual and customary hourly rates.
Tonkon Torp has received a $30,000 retainer for services rendered
prepetition.
The total cost of pre-bankruptcy legal services and related
disbursements through March 2, 2012 was $7,578.50; all of which
was paid in full prior to the petition filing.
To the best of the Debtor's knowledge, the partners and associates
of Tonkon Torp do not have any connection with Debtor, its
creditors, any other party in interest, or their respective
attorneys or accountants.
About General Auto Building
General Auto Building, LLC, filed for Chapter 11 bankruptcy
(Bankr. D. Ore. Case No. 12-31450) on March 2, 2012. The Debtor
is an Oregon limited liability company formed in 2007 with its
principal place of business in Spokane, Washington. It was formed
to renovate and lease its namesake commercial property located at
411 NW Park Avenue, Portland, Oregon. As of the Petition date,
the Debtor has developed virtually all of the General Automotive
Building and has leased approximately 98% of the building's space
to retail and commercial tenants. The Debtor continues to seek
tenants for the remaining spaces.
Judge Elizabeth L. Perris presides over the case. Albert N.
Kennedy, Esq., and Ava L. Schoen, Esq., at Tonkon Torp LLP, serve
as the Debtor's counsel. The Debtor estimated
$10 million to $50 million in assets and debts.
GENERAL AUTO: Homestreet, Portland Dispute Cash Use
---------------------------------------------------
Homestreet Bank and The City of Portland, Oregon, acting by and
through Portland Development Commission, are challenging the
request of General Auto Building, LLC, to use cash collateral in
which the bank and the PDC have an interest.
The Debtor said it requires the use of cash generated from its
property for the payment of utilities, tenant improvements,
commissions, and other operating expenses. The Debtor said it
will suffer immediate and irreparable harm if it is not permitted
to use cash collateral in which Homestreet and PDC have an
interest.
The Debtor's budget projects that it will use roughly $25,000 per
month during March, April, May and June for normal and usual
operating expenses. In addition, the Debtor will need funds for
deposits to utilities.
As of the Petition Date, the Debtor owed Homestreet $10 million.
The obligations to Homestreet are secured by a perfected security
interest in substantially all of the Debtor's assets, including
rents.
As of the Petition Date, the Debtor owed PDC $1.4 million. The
obligations are secured by perfected second security interests in
substantially all of the Debtor's assets, including rents.
To provide adequate protection for the use by the Debtor of cash
in which Homestreet and PDC have or claim an interest, the Debtor
proposes that Homestreet and PDC each be granted a replacement
security interest and lien upon the Debtor's real property and
rents whenever generated or acquired.
The adequate protection liens and security interests on the
Debtor's assets will be of the same category, kind, character and
description as were subject to perfected and valid liens and
security interests as of the Petition Date. The adequate
protection liens and security interests shall not improve the
position of Homestreet or PDC.
In its objection, HomeStreet wants the Debtor to make monthly
payments of interest to HomeStreet at the non-default rate, as
additional adequate protection. HomeStreet said the Debtor's case
is a "single asset real estate" case and the payments are required
to prevent relief from stay as set forth in 11 U.S.C. Sec.
362(d)(3). HomeStreet also objects to certain payments proposed
on the budget, including payment to an Asset/BK Manager of $3,500
per month; travel expense of $1,000 per month; payment to a
property manager of $2,373 for the first month and then increasing
as such amounts are proposed to be paid to an investor/ insider;
and certain tenant improvements totaling $50,000. The bank said
the Debtor cannot establish that any of the expenses must be paid
under an interim order to avoid irreparable harm pending a final
hearing, or that the expenses are necessary.
Attorney for HomeStreet Bank is:
David W. Criswell, Esq.
BALL JANIK LLP
101 SW Main Street, Suite 1100
Portland, OR 97204-3219
Tel: 503-228-2525
Fax: 503-295-1058
E-mail: dcriswell@balljanik.com
The City of Portland filed a Joinder to the Objection of
Homestreet Bank, also to seek interest payments to PDC. Portland
said the existing loan agreements provide for interest-only
payments to PDC of $1,166.67 per month until Aug. 1, 2014. After
that date, the payment amount increases to cover principal and
interest.
Portland, Acting by and Through Portland Development Commission,
is represented by:
Kathryn P. Salyer, Esq.
FARLEIGH WADA WITT
121 SW Morrison Street, Suite 600
Portland, OR 97204-3136
Telephone: (503) 228-6044
E-mail: ksalyer@fwwlaw.com
About General Auto Building
General Auto Building, LLC, filed for Chapter 11 bankruptcy
(Bankr. D. Ore. Case No. 12-31450) on March 2, 2012. The Debtor
is an Oregon limited liability company formed in 2007 with its
principal place of business in Spokane, Washington. It was formed
to renovate and lease its namesake commercial property located at
411 NW Park Avenue, Portland, Oregon. As of the Petition date,
the Debtor has developed virtually all of the General Automotive
Building and has leased approximately 98% of the building's space
to retail and commercial tenants. The Debtor continues to seek
tenants for the remaining spaces.
Judge Elizabeth L. Perris presides over the case. Albert N.
Kennedy, Esq., and Ava L. Schoen, Esq., at Tonkon Torp LLP, serve
as the Debtor's counsel. The Debtor estimated
$10 million to $50 million in assets and debts.
GENERAL AUTO: Sec. 341 Creditors' Meeting Set for April 3
---------------------------------------------------------
The United States Trustee in Portland, Oregon, will hold a meeting
of creditors pursuant to 11 U.S.C. Sec. 341(a) in the Chapter 11
case of General Auto Building, LLC. The meeting will be held on
April 3, 2012, at 9:30 a.m. at UST1, US Trustee's Office, in
Portland.
Proofs of claim are due by July 2, 2012.
About General Auto Building
General Auto Building, LLC, filed for Chapter 11 bankruptcy
(Bankr. D. Ore. Case No. 12-31450) on March 2, 2012. The Debtor
is an Oregon limited liability company formed in 2007 with its
principal place of business in Spokane, Washington. It was formed
to renovate and lease its namesake commercial property located at
411 NW Park Avenue, Portland, Oregon. As of the Petition date,
the Debtor has developed virtually all of the General Automotive
Building and has leased approximately 98% of the building's space
to retail and commercial tenants. The Debtor continues to seek
tenants for the remaining spaces.
Judge Elizabeth L. Perris presides over the case. Albert N.
Kennedy, Esq., and Ava L. Schoen, Esq., at Tonkon Torp LLP, serve
as the Debtor's counsel. The Debtor estimated
$10 million to $50 million in assets and debts.
GETTY PETROLEUM: Has Stipulation on Transition of Properties
------------------------------------------------------------
Getty Realty Corp. entered into a Stipulation relating to the
Chapter 11 bankruptcy proceeding initiated by Getty Petroleum
Marketing. The Stipulation is between Getty Realty, the Debtor,
and the Official Committee of Unsecured Creditors. The
Stipulation is subject to the approval of the Bankruptcy Court at
a hearing that will be held on April 2, 2012.
Getty Realty wants an orderly transition of control of the
properties that were previously leased to Marketing and to
reposition the portfolio as quickly and efficiently as possible to
maximize cash flow from these assets. It expects that the
Stipulation, if approved by the Court, will help achieve these
objectives while limiting the costs associated with potential
litigation.
Marketing has paid the Company $10.3 million of $19.0 million in
fixed rent due to the Company for the period Dec. 5, 2012 through
March 31, 2012 and Marketing is expected to make payment to the
Company of another approximately $1.5 million on or before April
1, 2012. All unpaid amounts due from Marketing under the Master
Lease for periods after filing of the bankruptcy (including real
estate taxes, which are not being paid by Marketing but are being
advanced by the Company) become due and payable on April 30, 2012.
Getty Realty will release its financial results for the quarter
and year ended Dec. 31, 2011 after the market closes on Thursday,
March 15, 2012.
Getty Realty will conduct an earnings conference call on Friday,
March 16, 2012 at 9:00 a.m. Eastern time.
To participate in the call, please dial (719) 457-2645 five to ten
minutes before the scheduled start time and reference pass code
2962840. If you cannot participate in the live event, a replay
will be available on March 16, 2012 beginning at 12 Noon Eastern
Time through March 19, 2012 at 12:00 Noon Eastern Time. To access
the replay, please dial (719) 457-0820 and reference pass code
2962840.
About Getty Realty
Getty Realty Corp. is the largest publicly-traded real estate
investment trust in the United States specializing in ownership,
leasing and financing of retail motor fuel and convenience store
properties and petroleum distribution terminals. The Company owns
and leases approximately 1,170 properties nationwide.
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.
GMX RESOURCES: Incurs $206.4 Million Net Loss in 2011
-----------------------------------------------------
GMX Resources, Inc., filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss of
$206.44 million on $116.74 million of oil and gas sales for the
year ended Dec. 31, 2011, a net loss of $138.29 million on
$96.52 million of oil and gas sales in 2010, and a net loss of
$181.08 million on $94.29 million of oil and gas sales in 2009.
The Company's balance sheet at Dec. 31, 2011, showed $542.20
million in total assets, $474.92 million in total liabilities and
$67.27 million in total equity.
A copy of the Form 10-K is available for free at:
http://is.gd/YmUXQY
About GMX Resources
GMX Resources Inc. -- http://www.gmxresources.com/-- is an
independent natural gas production company headquartered in
Oklahoma City, Oklahoma. GMXR has 53 producing wells in Texas &
Louisiana, 24 proved developed non-producing reservoirs, 48 proved
undeveloped locations and several hundred other development
locations. GMXR has 9,000 net acres on the Sabine Uplift of East
Texas. GMXR has 7 producing wells in New Mexico. The Company's
strategy is to significantly increase production, revenues and
reinvest in increasing production. GMXR's goal is to grow and
build shareholder value every day.
* * *
In November 2011, Moody's downgraded the rating of GMX Resources'
corporate family rating (CFR) to 'Caa3' from 'Caa1', the
Probability of Default (PDR) rating to 'Ca' from 'Caa1', and the
Speculative Grade Liquidity (SGL) rating to SGL-4 from SGL-3. The
outlook is negative.
The downgrade of GMX's PDR and note ratings reflect the company's
announcement that greater than 50% of the holders of the notes due
2019 have accepted a proposed exchange offer, which Moody's views
as a distressed exchange. The lowering of the CFR and SGL ratings
reflects Moody's expectation of potential liquidity issues through
the first quarter of 2013, as well as elevated leverage following
the issuance of at least $100 million of proposed secured notes
under the exchange offer and a proposed $55 million volumetric
production payment (VPP), both of which the company expects to be
executed before the end of 2011. Moody's treats VPPs as debt in
Moody's leverage calculations. The negative outlook reflects the
potential for the CFR and note ratings to be lowered if liquidity
deteriorates further.
As reported by the TCR on Dec. 21, 2011, Standard & Poor's Ratings
Services lowered its corporate credit rating on GMX Resources Inc.
to 'SD' (selective default) from 'CC'. "We also lowered the
company's issue-level ratings to 'D' from 'CC', reflecting its
completion of an exchange offer for a portion of its $200 million
11.375% senior notes due 2019," S&P said.
"The rating actions follow the company's announcement that it has
completed the exchange offer for its 11.375% senior notes due
2019," said Standard & Poor's credit analyst Paul B. Harvey. "The
exchange offer included $53 million principle of 11.375% senior
notes that accepted an exchange of $1,000 principle for $750
principle of new 11% senior secured notes due 2017. We consider
the completion of such an exchange, at a material discount to par,
to be a distressed exchange and, as such, tantamount to a default
under our criteria."
GMX RESOURCES: To Exchange 1.6MM Shares with $4.3MM Conv. Notes
---------------------------------------------------------------
GMX Resources Inc. entered into an exchange agreement with four
holders of its 5.00% Convertible Senior Notes due 2013. Pursuant
to this agreement, as consideration for the surrender by the
holders of $4,258,000 aggregate principal amount of the 2013
Convertible Notes, GMXR will issue to the holders an aggregate of
1,655,890 shares of GMXR common stock, par value $0.001 per share,
along with cash consideration relating to accrued and unpaid
interest.
This issuance of the common stock is being effected pursuant to
Section 3(a)(9) of the Securities Act of 1933, and accordingly
such Common Stock is exempt from registration as securities
exchanged by the issuer with its existing security holders
exclusively where no commission or other remuneration is paid or
given directly or indirectly for soliciting that exchange.
About GMX Resources
GMX Resources Inc. -- http://www.gmxresources.com/-- is an
independent natural gas production company headquartered in
Oklahoma City, Oklahoma. GMXR has 53 producing wells in Texas &
Louisiana, 24 proved developed non-producing reservoirs, 48 proved
undeveloped locations and several hundred other development
locations. GMXR has 9,000 net acres on the Sabine Uplift of East
Texas. GMXR has 7 producing wells in New Mexico. The Company's
strategy is to significantly increase production, revenues and
reinvest in increasing production. GMXR's goal is to grow and
build shareholder value every day.
The Company reported a net loss of $206.44 million in 2011 and a
net loss of $138.29 million in 2010.
The Company's balance sheet at Dec. 31, 2011, showed
$542.20 million in total assets, $474.92 million in total
liabilities and $67.27 million in total equity.
* * *
In November 2011, Moody's downgraded the rating of GMX Resources'
corporate family rating (CFR) to 'Caa3' from 'Caa1', the
Probability of Default (PDR) rating to 'Ca' from 'Caa1', and the
Speculative Grade Liquidity (SGL) rating to SGL-4 from SGL-3. The
outlook is negative.
The downgrade of GMX's PDR and note ratings reflect the company's
announcement that greater than 50% of the holders of the notes due
2019 have accepted a proposed exchange offer, which Moody's views
as a distressed exchange. The lowering of the CFR and SGL ratings
reflects Moody's expectation of potential liquidity issues through
the first quarter of 2013, as well as elevated leverage following
the issuance of at least $100 million of proposed secured notes
under the exchange offer and a proposed $55 million volumetric
production payment (VPP), both of which the company expects to be
executed before the end of 2011. Moody's treats VPPs as debt in
Moody's leverage calculations. The negative outlook reflects the
potential for the CFR and note ratings to be lowered if liquidity
deteriorates further.
As reported by the TCR on Dec. 21, 2011, Standard & Poor's Ratings
Services lowered its corporate credit rating on GMX Resources Inc.
to 'SD' (selective default) from 'CC'. "We also lowered the
company's issue-level ratings to 'D' from 'CC', reflecting its
completion of an exchange offer for a portion of its $200 million
11.375% senior notes due 2019," S&P said.
"The rating actions follow the company's announcement that it has
completed the exchange offer for its 11.375% senior notes due
2019," said Standard & Poor's credit analyst Paul B. Harvey. "The
exchange offer included $53 million principle of 11.375% senior
notes that accepted an exchange of $1,000 principle for $750
principle of new 11% senior secured notes due 2017. We consider
the completion of such an exchange, at a material discount to par,
to be a distressed exchange and, as such, tantamount to a default
under our criteria."
GORDIAN MEDICAL: Medicare Agrees to Pay Majority of Claims
----------------------------------------------------------
Gordian Medical, Inc. dba American Medical Technologies (AMT) on
March 9 disclosed that Medicare has agreed to pay the majority of
AMT's claims while the two entities pursue final resolution of
their billing dispute. In addition, Medicare has agreed to
release a significant portion of the funds it has withheld from
the company since late November. This development is a major
breakthrough in the dispute between the parties, and it confirms
AMT's right to continue to bill CMS as a Medicare supplier in good
standing.
"This interim agreement with Medicare is significant because it
provides us cash to run our company in the ordinary course, and it
provides time to work actively toward resolving the billing issues
that we are vigorously disputing," affirmed Gerald Del Signore,
president of AMT. "Further, we believe it supports our contention
that Medicare has no right to withhold 100% of our funds over a
dispute affecting only 40% of our business.
"With the continuing Court protections and Medicare's agreement to
pay the majority of our claims going forward, we are confident we
can continue to service our facilities without interruption for
the foreseeable future. We remain optimistic that we can reach a
final resolution on our dispute with Medicare in a timely fashion.
We are very grateful to our longtime business associates,
facilities, patients, employees, and vendors who are standing by
us steadfastly during this process. We will not disappoint them,
and we'll continue to provide the best possible wound care."
AMT's dispute with Medicare is based on conflicting
interpretations of the agency's own guidelines. AMT has not been
accused of fraud, is not in legal trouble, and is not on any list
of "excluded entities".
In its first Court hearing since filing its voluntary petition on
Feb. 24, 2012, AMT received approval on all of its motions to
continue its operations in the ordinary course.
CMS is represented by attorneys for the U.S. Department of Justice
and the U.S. Department of Health and Human Services.
For additional information about the filing, please visit
http://www.gordianmedical.com
About Gordian Medical
Gordian Medical, Inc., dba American Medical Technologies, filed a
Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-12339) in
Santa Ana, California, on Feb. 24, 2012, after Medicare refunds
were halted. The Debtor estimated assets and debts of up to
$50 million. It has $4.3 million in cash and $31.1 million in
receivables due from Medicare.
Irvine, California-based Gordian Medical provides supplies and
services to treat serious wounds. The company has active
relationships with and serves patients in more than 4,000 nursing
facilities in 49 states with the heaviest concentration of the
nursing homes being in the south and southeast sections of the
United States.
Judge Mark S. Wallace oversees the case. Pachulski Stang Ziehl &
Jones LLP serves as the Debtor's counsel. GlassRatner Advisory &
Capital Group LLC serves as the Debtor's financial advisor.
GRUBB & ELLIS: Judge Glenn Approves Request to Auction Assets
-------------------------------------------------------------
Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern
District of New York has ruled that the sale of Grubb & Ellis
Co.'s assets would go forward under an amended schedule.
Judge Glenn has set a March 21 auction, following objections from
several of its largest creditors seeking to block or postpone the
proposed sale to BGC Partners Inc. for $30 million.
Bidders from Grubb & Ellis will have until March 19 to submit
preliminary bid documents. Qualified bids must be submitted by 4
p.m. the next day, and an auction will be held on March 21.
Judge Glenn sided with Grubb & Ellis that time is of the essence
in the case because the firm has been losing brokers to other
firms and that its value will continue to plummet if the
bankruptcy proceedings are dragged out through the courts.
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 bankruptcy
(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 Official Committee of Unsecured Creditors has selected Alston
& Bird LLP to serve as legal counsel.
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., at Goodwin
Procter LLP.
GRUBB & ELLIS: Brokers Move to Rival Firm After Bankruptcy Filing
-----------------------------------------------------------------
Bob Shallit at The Modesto Bee reports that a top local brokerage
team has departed Grubb & Ellis Co., landing at rival Colliers
International following the bankruptcy filing of Grubb & Ellis Co.
According to the report, the team -- specializing in office
leasing and investment sales -- is headed by Tom Walcott and also
includes brokers Jason Rutherford, Scott Bennett, Kenneth Johnson
and Kris Reilly.
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., at Goodwin
Procter LLP.
HERTZ CORPORATION: Fitch to Rate $250MM Sr. Unsec. Notes at 'BB-'
-----------------------------------------------------------------
Fitch Ratings expects to rate Hertz Corporation's $250 million
issuance of senior unsecured notes 'BB-'. Hertz's 'BB-' Issuer
Default Rating (IDR) and Stable Rating Outlook are unaffected by
the assignment of this rating. Fitch affirmed Hertz's IDR and
assigned the Stable Outlook in January 2012.
The notes will constitute a further issuance of and will be
consolidated with Hertz's existing 6.75% senior unsecured notes
due April 2019 issued in February and March 2011 in the aggregate
principal amount of $1 billion. The notes will rank equally with
all of Hertz's senior unsecured indebtedness. Hertz expects to
use the proceeds from the issuance along with balance sheet cash
to redeem in full its 8.875% senior unsecured notes and 7.875%
senior unsecured Euro notes due 2014 totaling $438.6 million of
aggregate principal amount outstanding as of Dec. 31, 2011.
HAWKER BEECHCRAFT: Bank Debt Trades at 27% Off
----------------------------------------------
Participations in a syndicated loan under which Hawker Beechcraft
is a borrower traded in the secondary market at 73.08 cents-on-
the-dollar during the week ended Friday, March 9, 2012, a drop of
1.18 percentage points from the previous week according to data
compiled by Loan Pricing Corp. and reported in The Wall Street
Journal. The Company pays 200 basis points above LIBOR to borrow
under the facility. The bank loan matures on March 26, 2014, and
carries Moody's 'Caa2' rating and Standard & Poor's CCC rating.
The loan is one of the biggest gainers and losers among 179 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
About Hawker Beechcraft
Hawker Beechcraft Acquisition Company, LLC, headquartered in
Wichita, Kansas, manufactures business jets, turboprops and piston
aircraft for corporations, governments and individuals worldwide.
The Company reported a net loss of $214 million on $1.65 billion
of total sales for the nine months ended Sept. 30, 2011, compared
with a net loss of $238.60 million on $1.80 billion of total sales
for the same period the year before. Hawker Beechcraft reported a
net loss of $304.3 million in 2010, a net loss of $451.3 million
in 2009, and a net loss of $157.2 million in 2008.
The Company's balance sheet at Sept. 30, 2011, showed
$3.10 billion in total assets, $3.49 billion in total liabilities
and a $383.20 million total deficit.
* * *
As reported by the Troubled Company Reporter on Sept. 16, 2011,
Moody's Investors Service has lowered all the credit ratings,
including the corporate family rating to Caa3 from Caa2, of Hawker
Beechcraft Acquisition Company LLC. The rating outlook is
negative.
The downgrades reflect Hawker Beechcraft's mounting retained
deficit and Moody's view that the soft economy dims chances for
profitability anytime soon. Although limited near-term debt
maturities exist, with the prospect of further losses Moody's
views the capital structure to be unsustainable. Pronounced risk
that some form of restructuring of the company's debt obligations
may occur underscores the negative rating outlook. Softness in
most developed economies should constrain demand for the smaller
and mid-sized cabin aircraft that comprise the company's Business
and General Aviation product portfolio. While management has
aggressively lowered overhead and cut production costs, the
revenue outlook seems weak. As of June 30, 2011, the debt to book
capital ratio was 114% and the trailing 12-month EBITDA to
interest ratio was 0.2x (Moody's adjusted basis).
In the Dec. 5, 2011 edition of the TCR, Standard & Poor's Ratings
Services lowered its ratings on Hawker Beechcraft, including the
corporate credit rating to 'CCC' from 'CCC+'. "The downgrade
reflects Hawker's continued poor credit protection measures and
tighter liquidity resulting from declining revenues, significant
(albeit improving) losses, and weak cash generation," said
Standard & Poor's credit analyst Christopher DeNicolo. "We have
concerns about the company's ability to maintain covenant
compliance."
HAWKER BEECHCRAFT: Bank Debt Trades at 26% Off
----------------------------------------------
Participations in a syndicated loan under which Hawker Beechcraft
is a borrower traded in the secondary market at 74.10 cents-on-
the-dollar during the week ended Friday, March 9, 2012, a drop of
1.57 percentage points from the previous week, according to data
compiled by Loan Pricing Corp. and reported in The Wall Street
Journal. The Company pays 850 basis points above LIBOR to borrow
under the facility. The bank loan matures on March 26, 2014, and
carries Standard & Poor's 'CCC' rating. The loan is one of the
biggest gainers and losers among 179 widely quoted syndicated
loans with five or more bids in secondary trading for the week
ended Friday.
About Hawker Beechcraft
Hawker Beechcraft Acquisition Company, LLC, headquartered in
Wichita, Kansas, manufactures business jets, turboprops and piston
aircraft for corporations, governments and individuals worldwide.
The Company reported a net loss of $214 million on $1.65 billion
of total sales for the nine months ended Sept. 30, 2011, compared
with a net loss of $238.60 million on $1.80 billion of total sales
for the same period the year before. Hawker Beechcraft reported a
net loss of $304.3 million in 2010, a net loss of $451.3 million
in 2009, and a net loss of $157.2 million in 2008.
The Company's balance sheet at Sept. 30, 2011, showed
$3.10 billion in total assets, $3.49 billion in total liabilities
and a $383.20 million total deficit.
* * *
As reported by the Troubled Company Reporter on Sept. 16, 2011,
Moody's Investors Service has lowered all the credit ratings,
including the corporate family rating to Caa3 from Caa2, of Hawker
Beechcraft Acquisition Company LLC. The rating outlook is
negative.
The downgrades reflect Hawker Beechcraft's mounting retained
deficit and Moody's view that the soft economy dims chances for
profitability anytime soon. Although limited near-term debt
maturities exist, with the prospect of further losses Moody's
views the capital structure to be unsustainable. Pronounced risk
that some form of restructuring of the company's debt obligations
may occur underscores the negative rating outlook. Softness in
most developed economies should constrain demand for the smaller
and mid-sized cabin aircraft that comprise the company's Business
and General Aviation product portfolio. While management has
aggressively lowered overhead and cut production costs, the
revenue outlook seems weak. As of June 30, 2011, the debt to book
capital ratio was 114% and the trailing 12-month EBITDA to
interest ratio was 0.2x (Moody's adjusted basis).
In the Dec. 5, 2011 edition of the TCR, Standard & Poor's Ratings
Services lowered its ratings on Hawker Beechcraft, including the
corporate credit rating to 'CCC' from 'CCC+'. "The downgrade
reflects Hawker's continued poor credit protection measures and
tighter liquidity resulting from declining revenues, significant
(albeit improving) losses, and weak cash generation," said
Standard & Poor's credit analyst Christopher DeNicolo. "We have
concerns about the company's ability to maintain covenant
compliance."
HOSTESS BRAND: Names Gregory Rayburn as Chief Executive Officer
---------------------------------------------------------------
Hostess Brands, Inc. has appointed Gregory F. Rayburn, a seasoned
turnaround executive, as President and Chief Executive Officer.
He also was named to the Company's Board of Directors. Mr.
Rayburn replaces Brian Driscoll, whose resignation was effective.
As CEO, Mr. Rayburn will oversee the Company's reorganization
under Chapter 11 as well as overall corporate strategy and ongoing
negotiations with the Company's unions. He joined Hostess last
month as the Company's Chief Restructuring Officer.
"Hostess has been in business for more than 80 years and has
established a powerful and valuable brand," Mr. Rayburn said. "I
look forward to working closely with the management team and all
of Hostess's key constituents so that we can emerge from Chapter
11 as a company with a strong future that leverages its many
strengths."
The Company's Board of Directors issued the following joint
statement: "We want to express our thanks to Brian for his efforts
during a very difficult period for Hostess. We also want to
express our thanks to Greg for stepping in as CEO. His experience
and proven track record in leading companies through critical
transitions is precisely what Hostess needs at this point, and he
has the full support of the board, our lenders and investors."
Mr. Rayburn has more than 29 years of experience working with
troubled businesses in their efforts to create and maximize value
for all stakeholders. He has served as CEO, COO or CRO of several
high-profile companies, including Indianapolis Downs, LLC; New
York City Off Track Betting Assn.; Magna Entertainment Corp.;
AAIPharma Services and Sunterra Corp. He served as CRO for
WorldCom during what was then the largest U.S. bankruptcy filing
in history.
Mr. Rayburn is a former director of The Great Atlantic & Pacific
Tea Co. and holds an M.A. in accounting and a B.S. in business and
marketing from the University of Alabama. He is a member of the
American Institute of Certified Public Accountants and serves as
an expert witness in federal and state courts on issues including
business viability, valuation, strategic plan assessment, fraud,
damages and bankruptcy reorganizations.
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 INDIGO: Files for Chapter 11 Bankruptcy Protection
--------------------------------------------------------
Foxsanantonio.com reports that Hotel Indigo filed for Chapter 11
bankruptcy protection (Bankr. W.D. Tex. Case No. 12-50727) on
March 5, 2012. The hotel was scheduled to be auctioned off on
March 6, but the filing stopped the sale. Hotel Indigo owes
between $10 million and $50 million to 20 different creditors.
The corporate entity is 1909 Ltd., dba Hotel Indigo at the Alamo.
Judge Leif M. Clark presides over the case. J. Todd Malaise,
Esq., serves as the Debtor's counsel. In its petition, the Debtor
estimated $1 million to $10 million in assets. The petition was
signed by Ashish Patel of 1909 Management LLC, general partner.
Affiliates that simultaneously filed Chapter 11 petitions are
Virpur, LLC (Case No. 12-50728); Lord Krishna Management LTD (Case
No. 12-50729); and Visa Hotel, LLC (Case No. 12-50736).
HOVNANIAN ENTERPRISES: Incurs $18.3MM Net Loss in Jan. 31 Qtr.
--------------------------------------------------------------
Hovnanian Enterprises, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $18.26 million on $269.60 million of total revenues
for the three months ended Jan. 31, 2012, compared with a net loss
of $64.14 million on $252.56 million of total revenues for the
same period a year ago.
The Company reported a net loss of $286.08 million on
$1.13 billion of total revenue for the fiscal year ended Oct. 31,
2011, compared with net income of $2.58 million on $1.37 billion
of total revenues during the prior year.
The Company's balance sheet at Jan. 31, 2012, showed $1.50 billion
in total assets, $2.01 billion in total liabilities, and a
$513.78 million total deficit.
"We were very pleased with the 27% year-over-year growth in net
contracts, the 28% year-over-year increase in backlog and the 100
basis point sequential improvement in gross margin during our
first quarter," commented Ara K. Hovnanian, Chairman of the Board,
President and Chief Executive Officer. "Additionally, the spring
selling season is off to a good start in February 2012, with 38%
year-over-year growth in net contracts and home prices remained
relatively stable throughout the first quarter. We are hopeful
that these positive trends continue throughout the spring selling
season," concluded Mr. Hovnanian.
A full-text copy of the press release is available for free at:
http://is.gd/4hTsVR
A copy of the Form 10-Q is available for free at:
http://is.gd/I81U5P
About Hovnanian Enterprises
Red Bank, New Jersey-based Hovnanian Enterprises, Inc. (NYSE: HOV)
-- http://www.khov.com/-- founded in 1959 by Kevork S. Hovnanian,
is one of the nation's largest homebuilders with operations in
Arizona, California, Delaware, Florida, Georgia, Illinois,
Kentucky, Maryland, Minnesota, New Jersey, New York, North
Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and
West Virginia. The Company's homes are marketed and sold under
the trade names K. Hovnanian Homes, Matzel & Mumford, Brighton
Homes, Parkwood Builders, Town & Country Homes, Oster Homes and
CraftBuilt Homes. As the developer of K. Hovnanian's Four Seasons
communities, the Company is also one of the nation's largest
builders of active adult homes.
* * *
As reported by the TCR on Nov. 4, 2011, Fitch Ratings has lowered
the Issuer Default Rating (IDR) of Hovnanian Enterprises, Inc.,
(NYSE: HOV) to Restricted Default (RD) from 'CCC'. The downgrade
reflects Fitch's view that the debt exchange of certain of
Hovnanian's existing senior unsecured notes for new senior secured
notes is a distressed debt exchange under Fitch's 'Distressed Debt
Exchange Criteria', published Aug. 12, 2011. Fitch anticipates
adjusting the company's IDR to the appropriate level to reflect
the new capital structure within the next 14 days.
In the Nov. 7, 2011, edition of the TCR, Standard & Poor's Ratings
Services raised its corporate credit rating on Hovnanian
Enterprises Inc. (Hovnanian) to 'CCC-' from 'SD' (selective
default). "We also raised our ratings on the company's 10.625%
senior secured notes due 2016 to 'CCC-' from 'CC' and senior
unsecured notes to 'CC' from 'D'. The '3' recovery rating on the
senior secured notes and the '6' recovery rating on the senior
unsecured notes remain unchanged," S&P stated.
"These rating actions follow our reassessment of Hovnanian's
business and financial risk profile following the completion of
the company's debt exchange offer, in which the company exchanged
$195 million of its seven series of senior unsecured notes for
$141.8 million 5% senior secured notes due 2021 and $53.2 million
2% senior secured notes due 2021," said credit analyst George
Skoufis. "Our rating on Hovnanian reflects the company's highly
leveraged financial risk profile, a less-than-adequate liquidity
position, and very weak credit metrics."
As reported by the TCR on Sept. 13, 2011, Moody's Investors
Service downgraded the corporate family and probability of default
ratings of Hovnanian Enterprises, Inc. to Caa2 from Caa1. The
downgrade reflects Hovnanian's continued operating losses,
weak gross margins, very high homebuilding debt leverage, and
Moody's expectation that the weakness in year-over-year revenues,
deliveries, and net new contracts experienced by the company will
continue for the next one to two years. In addition, the
downgrades acknowledge that Hovnanian's cash balance is weakening
and cash flow generation is negative as it pursues new land
opportunities, which represented about $300 million of investment
over the first nine months of fiscal 2011.
IMEDICOR INC: Incurs $553,600 Net Loss in Sept. 30 Quarter
----------------------------------------------------------
iMedicor, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
attributable to common shareholders of $553,565 on $189,222 of
total revenue for the three months ended Sept. 30, 2011, compared
with a net loss attributable to common shareholders of $1.63
million on $48,597 of total revenue for the same period a year
ago.
The Company's balance sheet at Dec. 31, 2011, showed $2.44 million
in total assets, $5.50 million in total liabilities and a $3.06
million total stockholders' deficit.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/38Ew63
About iMedicor Inc.
Nanuet, N.Y.-based iMedicor, Inc., formerly Vemics, Inc., builds
portal-based, virtual work and learning environments in healthcare
and related industries. The Company's focus is twofold: iMedicor,
the Company's web-based portal which allows Physicians and other
healthcare providers to exchange patient specific healthcare
information via the internet while maintaining compliance with all
Health Insurance Portability and Accountability Act of 1996
("HIPAA") regulations, and; recently acquired ClearLobby
technology, the Company's web-based portal adjunct which provides
for direct communications between pharmaceutical companies and
physicians for the dissemination of information on new drugs
without the costs related to direct sales forces. The Company's
solutions allow physicians to use the internet in ways previously
unavailable to them due to HIPAA restrictions to quickly and cost-
effectively exchange and share patient medical information and to
interact with pharmaceutical companies and review information on
new drugs offered by these companies at a time of their choosing.
The Company reported a net loss attributable to common
shareholders of $5.20 million for the year ended June 30, 2011,
compared with a net loss attributable to common shareholders of
$11.40 million during the prior year.
Demetrius & Company, L.L.C., expressed substantial doubt about the
Company's ability to continue as a going concern following the
2011 financial results. The independent auditors noted that the
Company has experienced significant losses resulting in a working
capital deficiency and shareholders' deficit.
IMPLANT SCIENCES: Bruce Bower Resigns as SVP, Sales & Marketing
---------------------------------------------------------------
Implant Sciences Corporation announced the resignation of Bruce R.
Bower, on March 2, 2012. Mr. Bower had served as the Company's
Senior Vice President, Sales and Marketing since August 2010.
Prior to that, from February 2009 through the date of his
appointment as Senior Vice President, Mr. Bower was a strategic
advisor to the Company.
Glenn D. Bolduc, Implant Sciences, President and CEO commented "As
difficult as it is to accept Bruce's resignation, we completely
understand and respect his decision to step away from Implant
Sciences at this time. We will be forever thankful for the many
contributions Bruce made to the Company, including the hiring of
our professional sales force, the development of our worldwide
distribution channel, and the many disciplines he instilled in the
Company's sales and marketing process."
"I have known Bruce for 30 years. The depth of his experience has
been a tremendous help to Implant Sciences. He is the consummate
professional, and we wish him and his family the best of luck in
all their future endeavors."
About Implant Sciences
Implant Sciences Corporation (OBB: IMSC.OB) --
http://www.implantsciences.com/-- develops, manufactures and
sells sensors and systems for the security, safety and defense
(SS&D) industries.
The Company reported a net loss of $15.55 million for the year
ended June 30, 2011, compared with a net loss of $15.52 million
during the prior year.
The Company reported a net loss of $6.36 million on $2.16 million
of revenue for the six months ended Dec. 31, 2011, compared with a
net loss of $10.03 million on $4.15 million of revenue for the
same period during the prior year.
The Company's balance sheet at Dec. 31, 2011, showed $7 million in
total assets, $33.03 million in total liabilities and a $26.03
million in total stockholders' deficit.
Marcum LLP, in Boston, Massachusetts, expressed substantial doubt
about the Company's ability to continue as a going concern. The
independent auditors noted that the Company has had recurring net
losses and continues to experience negative cash flows from
operations. As of Sept. 30, 2011, the Company's principal
obligation to its primary lender was approximately $23,115,000
with accrued interest of approximately $1,705,000.
Bankruptcy Warning
The Company's ability to comply with its debt covenants in the
future depends on its ability to generate sufficient sales and to
control expenses, and will require the Company to seek additional
capital through private financing sources. In addition, the
Company will require substantial funds for further research and
development, regulatory approvals, and the marketing of its
explosives detection products. The Company's capital requirements
depend on numerous factors, including but not limited to the
progress of the Company's research and development programs; the
cost of filing, prosecuting, defending and enforcing any
intellectual property rights; competing technological and market
developments; changes in the Company's development of
commercialization activities and arrangements; and the hiring of
additional personnel, and acquiring capital equipment. There can
be no assurances that the Company will achieve its forecasted
financial results or that the Company will be able to raise
additional capital to operate its business.
Any failure to comply with the Company's debt covenants, to
achieve its projections or obtain sufficient capital on acceptable
terms would have a material adverse impact on the Company's
liquidity, financial condition and operations and could force the
Company to curtail or discontinue operations entirely or file for
protection under bankruptcy laws.
IMUA BLUEHENS: Chapter 11 Case Dismissed Due to Lack of Funds
-------------------------------------------------------------
Judge Robert J. Faris has ordered the dismissal of the Chapter 11
case of Imua Bluehens, LLC, effective on Feb. 27, 2012.
As reported in the Troubled Company Reported on Feb. 20, 2012,
Jerrold K. Guben, Esq., at O'Connor Playdon & Guben, submits that
the Debtor, a single asset real estate debtor, has no other
property to reorganize and without any additional property or
funds. The Debtor has entered into a stipulation with secured
creditor LNR Partners, LLC, modifying the stay to allow the state
foreclosure court to proceed to foreclose on the property. In the
seventh interim cash collateral order, all cash from the operation
of the Debtor will be used to satisfy ongoing post-petition
obligations, to be turned over to the state court receiver or
state court foreclosure commissioner or returned to LNR. As a
result, no funds will be available to distribute to pre-petition
unsecured trade creditors.
About Imua Bluehens
Honolulu, Hawaii-based Imua Bluehens, LLC, owns the Laniakea
Plaza, a commercial retail operation. Imua Bluehens filed for
Chapter 11 bankruptcy (Bankr. D. Hawaii Case No 0. 11-01721) on
June 17, 2011. Judge Robert J. Faris presides over the case. The
petition was signed by James K. Kai, manager. Jerrold K. Guben,
Esq., and Jeffery S. Flores, Esq., at O'Connor Playdon & Guben
LLP, in Honolulu, Hawaii, represent the Debtor as counsel. In its
amended schedules, the Debtor disclosed $12,169,600 in assets and
$16,864,405 in liabilities. No official committee of unsecured
creditors or other statutory committee has been formed.
INTERTAPE POLYMER: Reports $8.9 Million Net Earnings in 2011
--------------------------------------------------------------
Intertape Polymer Group Inc. filed with the U.S. Securities and
Exchange Commission an annual report on Form 20-F disclosing net
earnings of US$8.95 million on US$786.73 million of revenue for
the year ended Dec. 31, 2011, compared with a net loss of US$48.55
million on US$720.51 million of revenue during the prior year.
The Company reported net earnings of US$2.33 million on US$183.01
million of revenue for the three months ended Dec. 31, 2011,
compared with a net loss of US$38.53 million on US$180.06 million
of revenue for the same period a year ago.
The Company's balance sheet at Dec. 31, 2011, showed US$446.72
million in total assets, US$309.54 million in total liabilities
and $137.17 million in shareholders' equity.
"Intertape generated improved results in 2011 despite continued
sluggishness in the economy. Our progress was attributable to a
better pricing environment, and also to several internal
initiatives, including a greater contribution from higher-margin
products in the sales mix, a significant reduction in
manufacturing costs, and a continued focus on the pricing
optimization process primarily with low-margin products," stated
Intertape President and Chief Executive Officer, Greg Yull.
Intertape Polymer and certain of its subsidiaries are incorporated
under the laws of Canada and a substantial amount of its assets
are located outside of the United States. Under bankruptcy laws
in the United States, courts typically assert jurisdiction over a
debtor's property, wherever located, including property situated
in other countries. However, courts outside of the United States
may not recognize the United States bankruptcy court's
jurisdiction over property located outside of the territorial
limits of the United States. Accordingly, difficulties may arise
in administering a United States bankruptcy case involving a
Canadian debtor with property located outside of the United
States, and any orders or judgments of a bankruptcy court in the
United States may not be enforceable outside the territorial
limits of the United States.
A full-text copy of the Form 20-F is available for free at:
http://is.gd/mOCFOj
About Intertape Polymer Group
Intertape Polymer Group Inc. (TSX:ITP) (NYSE:ITP) develops and
manufactures specialized polyolefin plastic and paper based
packaging products and complementary packaging systems for
industrial and retail use. Headquartered in Montreal, Quebec and
Sarasota/Bradenton, Florida, the Company employs approximately
2,100 employees with operations in 17 locations, including 13
manufacturing facilities in North America and one in Europe.
* * *
Intertape Polymer carries a 'B2' corporate family rating, with
negative outlook, from Moody's, and 'B-' issuer credit ratings,
with stable outlook, from Standard & Poor's.
J.C. PENNEY: S&P Cuts Corp. Credit Rating to 'BB'; Outlook Stable
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Plano, Texas-based J.C. Penney Corp. Inc. to 'BB' from
'BB+'. The outlook is stable.
"At the same time, we lowered the issue-level rating on the
company's unsecured debt to 'BB' from 'BB+' and maintained our '3'
recovery rating on the debt, indicating our expectation for
meaningful (50% to 70%) recovery in the event of payment default,"
S&P said.
"The downgrade reflects performance that was weaker than we
expected over the past year and the erosion of the company's
credit protection metrics," said Standard & Poor' credit analyst
David Kuntz. "It also incorporates our belief that the company is
likely to experience some further operational disruptions over the
near term as it implements its new pricing and merchandising
strategy."
"The ratings on Penney reflect our expectation that the company's
performance may demonstrate further erosion as the company
implements its new strategy," added Mr. Kuntz, "but should at
least stabilize, even if it does not demonstrate some upward
momentum toward the end of the year. We believe that weak economic
conditions, particularly for moderate department store
consumers, are also likely to weigh on operations. The rating
incorporates our belief that credit protection measures are likely
to weaken in the first half of the year, but that they may
demonstrate modest improvement in the second half of 2012."
"The stable rating outlook reflects our view that the
implementation of the new pricing and merchandise strategy is
likely to cause some near-term disruptions to operations, but that
performance is likely to at least stabilize toward the end of the
year. Although we expect that credit protection measures may erode
modestly over the next couple of quarters, they should be slightly
stronger at the beginning of 2013. The outlook also incorporates
our view that the company will not make any meaningful share
repurchases over the near term," S&P said.
"Although we consider an upgrade very unlikely at this point, key
positive factors for such a rating would include implementation of
the strategy without moderate disruptions and performance benefits
much earlier than we expect," S&P said.
"We could consider lowering our rating if there are greater-than-
expected issues with implementing the company's new strategy or a
meaningful erosion of consumer spending due to a worsening
economy. Under this scenario, sales per square foot would have
declined in the mid-single-digit area and margins would have
fallen by over 100 basis points over the next year. Leverage would
be in the low-4x area and interest coverage would be in the mid-3x
range at the end of the fiscal year. Additionally, any meaningful
share repurchases over the near term could hurt the rating or
outlook," S&P said.
JEFFERSON COUNTY: 3-Day Hearing in April on Creditor Payments
-------------------------------------------------------------
Michael Connor at Reuters reports that lawyers for Jefferson
County, Alabama, and its creditors will face off at court hearings
scheduled for April 11-13 in Birmingham over the size of payments
due creditors from the county's sewer system.
U.S. Bankruptcy Judge Thomas Bennett has allowed Jefferson County
to proceed with its $4.23 billion bankruptcy case. According to
Reuters, the ruling opens the road for the county to restructure
more than $3 billion in debt incurred as a result of an expensive
sewer-system overhaul, as well as other liabilities.
"This is good news for the county," Reuters quotes David
Carrington, president of the Jefferson County Commission that last
year authorized the landmark bankruptcy filing, as saying.
Creditors had argued that the county, home to Alabama's biggest
city of Birmingham, was ineligible for bankruptcy because it had
the wrong type of debt. The ruling differs from a case in another
Alabama town that was thrown out for the same reason.
According to Reuters, lawyers for each side said the ruling was
unlikely to spur negotiations toward a resolution of the dispute
being tracked by America's $3.7 trillion municipal bond market.
Judge Bennett's ruling strengthens Jefferson County, since the
county will now be able to draft a workout plan, the report quotes
Melissa Woodley, finance professor at the Brock School of Business
at Samford University in Birmingham, as saying.
"The creditors cannot propose a plan. The judge can force the
creditors to take the plan, if he finds it fair and equitable. The
judge has a reputation for taking a hard look at the numbers and,
at the end of the day, it is a numbers problem," Reuters quotes
Ms. Woodley as stating.
Reuters says Judge Bennett's ruling differs from a 2010 case
involving the Alabama city of Prichard, in which another federal
bankruptcy judge voided the city's Chapter 9 case because it had
no bonded debt.
About Jefferson County
Jefferson County has its seat in Birmingham, Alabama. It has a
population of 660,000.
Jefferson County filed a bankruptcy petition under Chapter 9
(Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an
agreement among elected officials and investors to refinance
$3.1 billion in sewer bonds fell apart.
John S. Young Jr. LLC was appointed as receiver by Alabama Circuit
Court Judge Albert Johnson in September 2010.
Jefferson County's bankruptcy represents the largest municipal
debt adjustment of all time. The county said that long-term debt
is $4.23 billion, including about $3.1 billion in defaulted sewer
bonds where the debt holders can look only to the sewer system for
payment.
The county said it would use the bankruptcy court to put a value
on the sewer system, in the process fixing the amount bondholders
should be paid through Chapter 9.
Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers
at Bradley Arant Boult Cummings LLP and Klee, Tuchin, Bogdanoff &
Stern LLP, led by Kenneth Klee, represent the Debtor as counsel.
Kurtzman Carson Consultants LLC serves as claims and noticing
agent. Jefferson estimated more than $1 billion in assets. The
petition was signed by David Carrington, president.
The bankruptcy judge in January 2012 ruled that the state court-
appointed receiver for the sewer system largely lost control as a
result of the bankruptcy. Before deciding whether Jefferson County
is eligible for Chapter 9, the bankruptcy judge will allow the
Alabama Supreme Court to decide whether sewer warrants are the
equivalent of "funding or refunding bonds" required under state
law before a municipality can be in bankruptcy.
A report by Bloomberg News in January said, citing Jefferson's
attorney, that the default on sewer bonds has already cost
Jefferson County $22 million in attorneys' fees.
JER/JAMESON: Has Until May 22 to Decide on Unexpired Leases
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware extended
until May 22, 2012, JER/Jameson Mezz Borrower I, LLC, et al.'s
time to assume or reject unexpired leases of nonresidential real
property.
About JER/Jameson
Founded in 1987, Jameson is a chain of 103 small, budget hotels
operating under the Jameson brand in the Southeast and Midwest.
The Jameson properties are operated under the names Jameson Inn
and Signature Inn. The hotels are based in Smyrna, Georgia.
The chain was taken private in a 2006 buyout by JER Partners, a
unit of real-estate investor J.E. Robert Cos. JER then put
$330 million of debt on the chain to finance the buyout. At the
top of the list is a $175 million mortgage loan with Wells Fargo
Bank NA serving as special servicer. There are four tranches of
mezzanine loans, each for $40 million. The collateral for each of
the Mezz Loans is the equity interest in the entity or entities
immediately below the borrower of each Mezz Loan. All of the
mezzanine loans matured in August.
JER/Jameson NC Properties LP and JER/Jameson Properties LLC are
borrowers under the loan with Wells Fargo. The mortgage loan is
secured by mortgages on hotel properties. The first set of
foreclosure sales were set for Nov. 1, 2011. The Mortgage
Borrowers have not sought bankruptcy protection.
Colony Capital affiliates, CDCF JIH Funding LLC and ColFin JIH
Funding LLC, hold the first and second mezzanine loans. The First
Mezz Loan is secured by a pledge of JER/Jameson Mezz Borrower I
LLC's 100% interest in the Mortgage Borrowers.
Prior to the maturity default, the Colony JIH Lenders purchased
the Second Mezz Loan from a previous holder. The Second Mezz Loan
is secured by a pledge of JER/Jameson Mezz Borrower II's 100%
membership interest in the First Mezz Borrower.
Gramercy Warehouse Funding I LLC and Gramercy Loan Services LLC
hold a controlling participation interest in the Third Mezz and
Fourth Mezz Loans. JER Investors Trust Inc. holds the remaining
participation interests in the Third Mezz and Fourth Mezz Loans.
JER/Jameson Holdco LLC, an affiliate of the Mortgage Borrowers,
owns the 100% equity interest in the Fourth Mezz Borrower.
Gramercy took over its mezzanine borrower in August.
JER/Jameson Mezz Borrower II LLC filed for Chapter 11 bankruptcy
(Bankr. D. Del. Case No. 11-13338) on Oct. 18, 2011, to prevent
foreclosure by Colony. The Chapter 11 filing had the effect of
preventing Colony from wiping out Gramercy's interest.
Seven days later, JER/Jameson Mezz Borrower I LLC filed for
bankruptcy (Bankr. D. Del. Case No. 11-13392) on Oct. 25, 2011.
Judge Mary F. Walrath presides over the case. The Debtors tapped
Ashby & Geddes, P.A. to represent their restructuring efforts.
Epiq Bankruptcy Solutions, LLC, serves as its noticing, claims and
balloting agent.
Each of the Debtors estimated $100 million to $500 million in
assets and $10 million to $50 million in debts. JER/Jameson
Properties LLC disclosed $294,662,815 in assets and $163,424,762
in liabilities as of the Chapter 11 filing. The petitions were
signed by James L. Gregory, vice president.
Colony specializes in real estate and has roughly $34 billion of
assets under management. Colony is represented in the case by
Pauline K. Morgan, Esq., John T. Dorsey, Esq., Margaret Whiteman
Greecher, Esq., and Patrick A. Jackson, Esq., at Young Conaway
Stargatt & Taylor LLP; and Lindsee P. Granfield, Esq., Sean A.
O'Neil, Esq., and Jane VanLare, Esq., at Cleary Gottlieb Steen &
Hamilton LLP.
As of the date hereof, the U.S. Trustee has not appointed an
official Committee of unsecured creditors in any of the Debtors'
cases.
JER/JAMESON: Professional Claims Bar Date Set for March 20
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
established March 30, 2012, at 4:00 p.m. (EDT) as deadline for:
i) all professionals of the Debtors, whether or not retained
pursuant to another order of the Court;
ii) all individuals or entities who purport or purported to be
officers, directors or managers of one or more of the
Debtors or Mezz II (collectively, the D&O);
iii) any professionals engaged by any D&Os;
iv) JER/Jameson Mezz Borrower II, LLC;
v) JER/Jameson Mezz Borrower IV, LLC;
vi) Corporation Service Company to file proofs of claim against
JER/Jameson Mezz Borrower II, LLC, et al.
Proofs of claim must be filed at:
JER/Jameson Mezz Borrower II, LLC, et al. Claims
Processing Center
c/o Epiq Bankruptcy Solutions, LLC
FDR Station
P.O. Box 5075
New York, NY 10150-5075
If by hand delivery or overnight mail:
JER/Jameson Mezz Borrower I, LLC, et al., Claims
Processing Center
c/o Epiq Bankruptcy Solutions, LLC
757 Third Avenue, 3rd Floor
New York, NY 10017
About JER/Jameson Mezz Borrower II LLC
Founded in 1987, Jameson is a chain of 103 small, budget hotels
operating under the Jameson brand in the Southeast and Midwest.
The Jameson properties are operated under the names Jameson Inn
and Signature Inn. The hotels are based in Smyrna, Georgia.
The chain was taken private in a 2006 buyout by JER Partners, a
unit of real-estate investor J.E. Robert Cos. JER then put
$330 million of debt on the chain to finance the buyout. At the
top of the list is a $175 million mortgage loan with Wells Fargo
Bank NA serving as special servicer. There are four tranches of
mezzanine loans, each for $40 million. The collateral for each of
the Mezz Loans is the equity interest in the entity or entities
immediately below the borrower of each Mezz Loan. All of the
mezzanine loans matured in August.
JER/Jameson NC Properties LP and JER/Jameson Properties LLC are
borrowers under the loan with Wells Fargo. The mortgage loan is
secured by mortgages on hotel properties. The first set of
foreclosure sales were set for Nov. 1, 2011. The Mortgage
Borrowers have not sought bankruptcy protection.
Colony Capital affiliates, CDCF JIH Funding LLC and ColFin JIH
Funding LLC, hold the first and second mezzanine loans. The First
Mezz Loan is secured by a pledge of JER/Jameson Mezz Borrower I
LLC's 100% interest in the Mortgage Borrowers.
Prior to the maturity default, the Colony JIH Lenders purchased
the Second Mezz Loan from a previous holder. The Second Mezz Loan
is secured by a pledge of JER/Jameson Mezz Borrower II's 100%
membership interest in the First Mezz Borrower.
Gramercy Warehouse Funding I LLC and Gramercy Loan Services LLC
hold a controlling participation interest in the Third Mezz and
Fourth Mezz Loans. JER Investors Trust Inc. holds the remaining
participation interests in the Third Mezz and Fourth Mezz Loans.
JER/Jameson Holdco LLC, an affiliate of the Mortgage Borrowers,
owns the 100% equity interest in the Fourth Mezz Borrower.
Gramercy took over its mezzanine borrower in August.
JER/Jameson Mezz Borrower II LLC filed for Chapter 11 bankruptcy
(Bankr. D. Del. Case No. 11-13338) on Oct. 18, 2011, to prevent
foreclosure by Colony. The Chapter 11 filing had the effect of
preventing Colony from wiping out Gramercy's interest.
Seven days later, JER/Jameson Mezz Borrower I LLC filed for
bankruptcy (Bankr. D. Del. Case No. 11-13392) on Oct. 25, 2011.
Judge Mary F. Walrath presides over the case. The Debtors tapped
Ashby & Geddes, P.A. to represent their restructuring efforts.
Epiq Bankruptcy Solutions, LLC, serves as its noticing, claims and
balloting agent.
Each of the Debtors estimated $100 million to $500 million in
assets and $10 million to $50 million in debts. JER/Jameson
Properties LLC disclosed $294,662,815 in assets and $163,424,762
in liabilities as of the Chapter 11 filing. The petitions were
signed by James L. Gregory, vice president.
Colony specializes in real estate and has roughly $34 billion of
assets under management. Colony is represented in the case by
Pauline K. Morgan, Esq., John T. Dorsey, Esq., Margaret Whiteman
Greecher, Esq., and Patrick A. Jackson, Esq., at Young Conaway
Stargatt & Taylor LLP; and Lindsee P. Granfield, Esq., Sean A.
O'Neil, Esq., and Jane VanLare, Esq., at Cleary Gottlieb Steen &
Hamilton LLP.
As of the date hereof, the U.S. Trustee has not appointed an
official Committee of unsecured creditors in any of the Debtors'
cases.
JER/JAMESON: Ashby & Geddes Approved as Bankruptcy Counsel
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
JER/Jameson Mezz Borrower II, LLC, et al., to employ Ashby &
Geddes, P.A. as counsel.
As reported in the Troubled Company Reporter on Feb. 15, 2012,
Ashby & Geddes is expected to, among other things;
-- perform all necessary services as the Debtors' counsel,
including without limitation, preparing, or assisting in
preparation of, all necessary documents on behalf of the
Debtors;
-- prepare in behalf of the Debtors, as debtors-in-possession,
all necessary motions, applications, answers, orders,
reports and papers in connection with the administration of
the Chapter 11 cases; and
-- perform other legal services that are desirable and
necessary for the efficient and economic administration of
the Chapter 11 cases.
The hourly rates of Ashby & Geddes' personnel are:
William P. Bowden, member $640
Ricardo Palacio, member $525
Karen B. Skomorucha, associate $385
Leigh-Anne M. Raport, associate $315
Christopher Warnick, paralegal $185
To the best of the Debtors' knowledge, Ashby & Geddes is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
As reported in the TCR on Jan. 30, 2012, the Debtors notified the
Court that they have withdrawn their request to employ Pachulski
Stang Ziehl & Jones LLP as counsel.
About JER/Jameson Mezz Borrower II LLC
Founded in 1987, Jameson is a chain of 103 small, budget hotels
operating under the Jameson brand in the Southeast and Midwest.
The Jameson properties are operated under the names Jameson Inn
and Signature Inn. The hotels are based in Smyrna, Georgia.
The chain was taken private in a 2006 buyout by JER Partners, a
unit of real-estate investor J.E. Robert Cos. JER then put
$330 million of debt on the chain to finance the buyout. At the
top of the list is a $175 million mortgage loan with Wells Fargo
Bank NA serving as special servicer. There are four tranches of
mezzanine loans, each for $40 million. The collateral for each of
the Mezz Loans is the equity interest in the entity or entities
immediately below the borrower of each Mezz Loan. All of the
mezzanine loans matured in August.
JER/Jameson NC Properties LP and JER/Jameson Properties LLC are
borrowers under the loan with Wells Fargo. The mortgage loan is
secured by mortgages on hotel properties. The first set of
foreclosure sales were set for Nov. 1, 2011. The Mortgage
Borrowers have not sought bankruptcy protection.
Colony Capital affiliates, CDCF JIH Funding LLC and ColFin JIH
Funding LLC, hold the first and second mezzanine loans. The First
Mezz Loan is secured by a pledge of JER/Jameson Mezz Borrower I
LLC's 100% interest in the Mortgage Borrowers.
Prior to the maturity default, the Colony JIH Lenders purchased
the Second Mezz Loan from a previous holder. The Second Mezz Loan
is secured by a pledge of JER/Jameson Mezz Borrower II's 100%
membership interest in the First Mezz Borrower.
Gramercy Warehouse Funding I LLC and Gramercy Loan Services LLC
hold a controlling participation interest in the Third Mezz and
Fourth Mezz Loans. JER Investors Trust Inc. holds the remaining
participation interests in the Third Mezz and Fourth Mezz Loans.
JER/Jameson Holdco LLC, an affiliate of the Mortgage Borrowers,
owns the 100% equity interest in the Fourth Mezz Borrower.
Gramercy took over its mezzanine borrower in August.
JER/Jameson Mezz Borrower II LLC filed for Chapter 11 bankruptcy
(Bankr. D. Del. Case No. 11-13338) on Oct. 18, 2011, to prevent
foreclosure by Colony. The Chapter 11 filing had the effect of
preventing Colony from wiping out Gramercy's interest.
Seven days later, JER/Jameson Mezz Borrower I LLC filed for
bankruptcy (Bankr. D. Del. Case No. 11-13392) on Oct. 25, 2011.
Judge Mary F. Walrath presides over the case. The Debtors tapped
Ashby & Geddes, P.A. to represent their restructuring efforts.
Epiq Bankruptcy Solutions, LLC, serves as its noticing, claims and
balloting agent.
Each of the Debtors estimated $100 million to $500 million in
assets and $10 million to $50 million in debts. JER/Jameson
Properties LLC disclosed $294,662,815 in assets and $163,424,762
in liabilities as of the Chapter 11 filing. The petitions were
signed by James L. Gregory, vice president.
Colony specializes in real estate and has roughly $34 billion of
assets under management. Colony is represented in the case by
Pauline K. Morgan, Esq., John T. Dorsey, Esq., Margaret Whiteman
Greecher, Esq., and Patrick A. Jackson, Esq., at Young Conaway
Stargatt & Taylor LLP; and Lindsee P. Granfield, Esq., Sean A.
O'Neil, Esq., and Jane VanLare, Esq., at Cleary Gottlieb Steen &
Hamilton LLP.
As of the date hereof, the U.S. Trustee has not appointed an
official Committee of unsecured creditors in any of the Debtors'
cases.
JER/JAMESON: Has Until June 22 to Propose Chapter 11 Plan
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware extended
JER/Jameson Mezz Borrower II, LLC, et al.'s time to file and
solicit acceptances for the proposed Chapter 11 plan until
June 22, 2012, and Aug. 21, respectively.
As reported in the Troubled Company Reporter on Feb. 20, 2012, the
Debtors explained that their ability to timely file a plan and
prepare the disclosure statement has been affected by, among other
things, prior delays associated with the litigation concerning the
dismissal motion, and the need for new management to not only
familiarize themselves with the Debtors and their operations, but
to address and satisfy various administrative obligations not
previously undertaken.
About JER/Jameson Mezz Borrower II LLC
Founded in 1987, Jameson is a chain of 103 small, budget hotels
operating under the Jameson brand in the Southeast and Midwest.
The Jameson properties are operated under the names Jameson Inn
and Signature Inn. The hotels are based in Smyrna, Georgia.
The chain was taken private in a 2006 buyout by JER Partners, a
unit of real-estate investor J.E. Robert Cos. JER then put
$330 million of debt on the chain to finance the buyout. At the
top of the list is a $175 million mortgage loan with Wells Fargo
Bank NA serving as special servicer. There are four tranches of
mezzanine loans, each for $40 million. The collateral for each of
the Mezz Loans is the equity interest in the entity or entities
immediately below the borrower of each Mezz Loan. All of the
mezzanine loans matured in August.
JER/Jameson NC Properties LP and JER/Jameson Properties LLC are
borrowers under the loan with Wells Fargo. The mortgage loan is
secured by mortgages on hotel properties. The first set of
foreclosure sales were set for Nov. 1, 2011. The Mortgage
Borrowers have not sought bankruptcy protection.
Colony Capital affiliates, CDCF JIH Funding LLC and ColFin JIH
Funding LLC, hold the first and second mezzanine loans. The First
Mezz Loan is secured by a pledge of JER/Jameson Mezz Borrower I
LLC's 100% interest in the Mortgage Borrowers.
Prior to the maturity default, the Colony JIH Lenders purchased
the Second Mezz Loan from a previous holder. The Second Mezz Loan
is secured by a pledge of JER/Jameson Mezz Borrower II's 100%
membership interest in the First Mezz Borrower.
Gramercy Warehouse Funding I LLC and Gramercy Loan Services LLC
hold a controlling participation interest in the Third Mezz and
Fourth Mezz Loans. JER Investors Trust Inc. holds the remaining
participation interests in the Third Mezz and Fourth Mezz Loans.
JER/Jameson Holdco LLC, an affiliate of the Mortgage Borrowers,
owns the 100% equity interest in the Fourth Mezz Borrower.
Gramercy took over its mezzanine borrower in August.
JER/Jameson Mezz Borrower II LLC filed for Chapter 11 bankruptcy
(Bankr. D. Del. Case No. 11-13338) on Oct. 18, 2011, to prevent
foreclosure by Colony. The Chapter 11 filing had the effect of
preventing Colony from wiping out Gramercy's interest.
Seven days later, JER/Jameson Mezz Borrower I LLC filed for
bankruptcy (Bankr. D. Del. Case No. 11-13392) on Oct. 25, 2011.
Judge Mary F. Walrath presides over the case. The Debtors tapped
Ashby & Geddes, P.A. to represent their restructuring efforts.
Epiq Bankruptcy Solutions, LLC, serves as its noticing, claims and
balloting agent.
Each of the Debtors estimated $100 million to $500 million in
assets and $10 million to $50 million in debts. JER/Jameson
Properties LLC disclosed $294,662,815 in assets and $163,424,762
in liabilities as of the Chapter 11 filing. The petitions were
signed by James L. Gregory, vice president.
Colony specializes in real estate and has roughly $34 billion of
assets under management. Colony is represented in the case by
Pauline K. Morgan, Esq., John T. Dorsey, Esq., Margaret Whiteman
Greecher, Esq., and Patrick A. Jackson, Esq., at Young Conaway
Stargatt & Taylor LLP; and Lindsee P. Granfield, Esq., Sean A.
O'Neil, Esq., and Jane VanLare, Esq., at Cleary Gottlieb Steen &
Hamilton LLP.
As of the date hereof, the U.S. Trustee has not appointed an
official Committee of unsecured creditors in any of the Debtors'
cases.
JER/JAMESON: Files Schedules of Assets and Liabilities
------------------------------------------------------
JER/Jameson Properties LLC, filed with the U.S. Bankruptcy Court
for the District of Delaware its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $250,319,221
B. Personal Property $44,343,594
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $160,567,882
E. Creditors Holding
Unsecured Priority
Claims $1,074,869
F. Creditors Holding
Unsecured Non-priority
Claims $1,782,011
----------- -----------
TOTAL $294,662,815 $163,424,762
Debtor-affiliates also filed their respective schedules,
disclosing:
Company Assets Liabilities
------- ------ -----------
JER/Jameson GP LLC $0 $0
JER/Jameson NC Properties LP $45,523,966 $160,822,709
Full-text copies of the schedules are available for free at:
http://bankrupt.com/misc/JER_JAMESON_properties_sal.pdf
http://bankrupt.com/misc/JER_JAMESON_GP_sal.pdf
http://bankrupt.com/misc/JER_JAMESON_NC_sal.pdf
About Jameson Inn
Founded in 1987, Jameson is a chain of 103 small, budget hotels
operating under the Jameson brand in the Southeast and Midwest.
The Jameson properties are operated under the names Jameson Inn
and Signature Inn. The hotels are based in Smyrna, Georgia.
The chain was taken private in a 2006 buyout by JER Partners, a
unit of real-estate investor J.E. Robert Cos. JER then put
$330 million of debt on the chain to finance the buyout. At the
top of the list is a $175 million mortgage loan with Wells Fargo
Bank NA serving as special servicer. There are four tranches of
mezzanine loans, each for $40 million. The collateral for each of
the Mezz Loans is the equity interest in the entity or entities
immediately below the borrower of each Mezz Loan. All of the
mezzanine loans matured in August.
JER/Jameson NC Properties LP and JER/Jameson Properties LLC are
borrowers under the loan with Wells Fargo. The mortgage loan is
secured by mortgages on hotel properties. The first set of
foreclosure sales were set for Nov. 1, 2011. The Mortgage
Borrowers have not sought bankruptcy protection.
Colony Capital affiliates, CDCF JIH Funding LLC and ColFin JIH
Funding LLC, hold the first and second mezzanine loans. The First
Mezz Loan is secured by a pledge of JER/Jameson Mezz Borrower I
LLC's 100% interest in the Mortgage Borrowers.
Prior to the maturity default, the Colony JIH Lenders purchased
the Second Mezz Loan from a previous holder. The Second Mezz Loan
is secured by a pledge of JER/Jameson Mezz Borrower II's 100%
membership interest in the First Mezz Borrower.
Gramercy Warehouse Funding I LLC and Gramercy Loan Services LLC
hold a controlling participation interest in the Third Mezz and
Fourth Mezz Loans. JER Investors Trust Inc. holds the remaining
participation interests in the Third Mezz and Fourth Mezz Loans.
JER/Jameson Holdco LLC, an affiliate of the Mortgage Borrowers,
owns the 100% equity interest in the Fourth Mezz Borrower.
Gramercy took over its mezzanine borrower in August.
JER/Jameson Mezz Borrower II LLC filed for Chapter 11 bankruptcy
(Bankr. D. Del. Case No. 11-13338) on Oct. 18, 2011, to prevent
foreclosure by Colony. The Chapter 11 filing had the effect of
preventing Colony from wiping out Gramercy's interest.
Seven days later, JER/Jameson Mezz Borrower I LLC filed for
bankruptcy (Bankr. D. Del. Case No. 11-13392) on Oct. 25, 2011.
Judge Mary F. Walrath presides over the case. The Debtors tapped
Ashby & Geddes, P.A. to represent their restructuring efforts.
Epiq Bankruptcy Solutions, LLC, serves as its noticing, claims and
balloting agent.
Each of the Debtors estimated $100 million to $500 million in
assets and $10 million to $50 million in debts. The petitions
were signed by James L. Gregory, vice president.
Colony specializes in real estate and has roughly $34 billion of
assets under management. Colony is represented in the case by
Pauline K. Morgan, Esq., John T. Dorsey, Esq., Margaret Whiteman
Greecher, Esq., and Patrick A. Jackson, Esq., at Young Conaway
Stargatt & Taylor LLP; and Lindsee P. Granfield, Esq., Sean A.
O'Neil, Esq., and Jane VanLare, Esq., at Cleary Gottlieb Steen &
Hamilton LLP.
As of the date hereof, the U.S. Trustee has not appointed an
official Committee of unsecured creditors in any of the Debtors'
cases.
JOHN D. OIL: Files Schedules of Assets and Liabilities
------------------------------------------------------
Stan Bullard at Crain's Cleveland Business reports that John D.
Oil and Gas Company said it has debts of $11 million and assets of
$8.2 million.
John D. Oil and two of it affiliates, Oz Group and Great Lakes
Exploration owe two loans totaling $30 million to RBS Citizens
N.A., better known locally as Charter One Bank. The bank
maintains the loans are in default, though Richard M. Osborne's
lawyers dispute the claim. Mr. Osborne owns the three companies.
The report relates Donald Whiteman, the controller for Oz and
Great Lakes Exploration, said the debtors' financial difficulties
"are the direct result of the drop in the price of natural gas."
In January, Mr. Osborne sued Home Savings and Loan Co. of
Youngstown over a foreclosure proceeding initiated by the bank.
The foreclosure was related to a $4 million loan secured by Great
Lakes Shopping Center, a small strip center in Mentor owned by one
of Mr. Osborne's companies, says the report.
The report notes, $5 million in judgments against several of Mr.
Osborne's real estate partnerships, Mr. Osborne himself and the
Richard M. Osborne Trust have been recorded in both Lake County
and Cuyahoga County courts by Citizens Bank and First Federal of
Lakewood as they have sought to recoup loans owed them.
Based in Mentor, Ohio, John D. Oil and Gas Company fka Liberty
Self-Stor, Inc., filed for Chapter 11 protection on Jan. 13, 2012
(Bankr. W.D. Penn. Case No. 12-10063). Judge Thomas P. Agresti
presides over the case. Robert S. Bernstein, Esq., at Bernstein
Law Firm, P.C., represents the Debtor.
K2 PURE SOLUTIONS: Moody's Cuts Rating on $121.5MM Loan to 'Caa1'
-----------------------------------------------------------------
Moody's Investors Service downgrades K2 Pure Solutions NoCal,
L.P.'s (K2 Pittsburg or Project) $121.5 million term loan to Caa1
from B3 and revised the outlook to negative from stable.
Ratings Rationale
The rating action reflects the effective depletion of the debt
service reserve due to Phase I completion delays and cost overruns
even after the Project achieved mechanical completion in September
2011. Moody's previously understood only punch list items remained
after mechanical completion, which typically do not result in
material construction delays or cost overruns. While the Project
still expects sufficient cash to reach Phase I completion, the
Project's financial position net of undisputed construction
payments is very narrow and leaves little room for error.
Currently, the Project expects to achieve Phase I completion by
the deadline in debt financing agreement. However, given the
Project's history of delays and cost overruns, Moody's views
significant uncertainty regarding the timing and ultimate cost of
reaching any of the construction completion deadlines in the debt
financing agreement. Moody's notes that the original mechanical
completion date was in April 2011.
The rating action also considers the continuing legal disputes
between the project and its construction contractor/sub
contractors. The parties are in binding arbitration and the
contractor/sub contractors have filed for mechanic liens on the
Project. Resolution of the arbitration could happen in mid to late
2012. The disputed amount is substantially more than the Project's
current limited liquidity. If the contractor/subcontractor were to
succeed in arbitration, Moody's does not expect the Project to
have the necessary funds without significant sponsor support.
Moody's recognizes that the project's liquidity also has been
supported by sponsor contributions that has funded some of the
Project's operating costs and funded payments for equipment to
support the production of HCL. The HCL equipment has taken on
greater importance in supporting the project's operating period
merchant cash flows as HCL prices have increased significantly
over the past year. Moody's understands the incremental equity
contributions are not legally committed to the Project.
The negative outlook considers the possibility of further
completion delays, uncertainties surrounding the arbitration with
its contractors and narrow financial position.
The rating could be stabilized if the Project achieves final
completion per the debt financing agreement, replenishes the debt
service reserve and successfully resolves its construction
dispute.
The rating could be negatively affected if the Project incurs
further construction costs overruns or delays, if there is an
unfavorable outcome regarding the construction dispute, sponsor
support diminishes or if the Project's liquidity does not improve
over time.
The last rating action took place on August 13, 2010, final rating
of B3 with a stable outlook was assigned.
K2 Pittsburg owns and operates a chlor-alkali project located in
Pittsburg, CA and is designed to produce up to 296.5 tons per day
of ECU's and up to 200 tons per day of bleach. The Project sells
approximately half its output to Dow Chemical Company under a 20-
year agreement and the remaining half of the output will be sold
into the wholesale market as bleach, hydrochloric acid and
caustic. The project is indirectly owned by K2 Pure Solutions (K2
Solutions). K2 Solutions is indirectly owned by K2 Solution's
management and Centre Capital Investors IV LP and related parties.
KINDER MORGAN: Fitch Places 'BB+' IDR on Rating Watch Negative
--------------------------------------------------------------
Fitch Ratings has assigned a 'BBB' rating to Kinder Morgan Energy
Partners, L.P.'s (KMP) $1 billion 3.95% senior notes due 2022.
The Rating Outlook is Stable. Note proceeds will be used to
retire $450 million principal amount of 7.125% senior notes due
March 15, 2012, repay outstanding commercial paper, and for
general corporate purposes.
Kinder Morgan, Inc. (KMI) is the parent company for Kinder Morgan
Kansas, Inc. (KMK, Fitch IDR of 'BB+'; on Rating Watch Negative)
and the indirect owner of the 2% general partner and approximately
11% limited partner interests in KMP. KMI has agreed to acquire
El Paso Corporation (EP) in a $38 billion transaction expected to
close in second quarter 2012.
KMP Unaffected by the Acquisition: Over the near term, KMP will be
unaffected by KMI's purchase of EP. However, post closing, KMP
will have an opportunity to purchase pipeline assets now residing
at EP. The EP-owned interstate pipelines generate stable cash
flows and are a good fit in KMP's master limited partnership
structure. KMP would be expected to finance pipeline purchases
with an appropriate mix of debt and equity.
Rating Rationale: KMP's rating and Stable Outlook reflect the
significant and growing scale and scope of operations; geographic
and functional diversity of assets; successful track record in
acquiring, expanding, financing and operating energy operations;
predictable earnings and cash flow generated from natural gas and
refined products pipelines; and expectations for modestly
improving credit metrics in 2012 with adjusted debt-to-EBITDA to
approximate 4.0 times (x) or below for the year.
Other considerations and credit concerns include KMP's
relationship with KMI, exposure to interest rates on approximately
$6 billion of variable-rate debt, modestly negative effects in
weak economies on asset utilization, aggressive expansion
spending, and exposure to changes in commodity prices and volumes
for its CO2 business segment.
Liquidity is adequate: KMP has a $2.2 billion unsecured revolving
credit facility that matures in July 2016. KMP issues 'F2' rated
commercial paper (CP) under a $2.2 billion CP program backstopped
by the revolver. The revolver has a maximum debt-to-EBITDA ratio
of 5.0 to 1.0; no greater than 5.5 to 1.0 during an acquisition
period. At Dec. 31, 2011, KMP had $409 million of cash and $1.3
billion of borrowing capacity. KMP is also party to a reserve-
based hedging facility for purposes of hedging crude oil that does
not require the posting of margin.
Catalysts for Future Rating Actions: Possible catalysts for
negative rating actions at KMP include increasing leverage to
support organic growth expenditures and acquisitions, and
weakening operating performance. Possible catalysts for positive
rating actions include lessening consolidated business risk and a
sustainable improvement in credit metrics.
KM ASSOCIATES: Authorized to Retain Gianola Barnum as Counsel
-------------------------------------------------------------
The Bankruptcy Court for the Southern District of West Virginia
has authorized KM Associates, LLC, to retain David M. Jecklin,
Esq., of Gianola, Barnum, Wigal & London, L.C. as counsel.
The firm will charge fees based upon its prevailing hourly
guideline rates which are set at $250 for the Firm's attorneys.
David M. Jecklin, Esq., a member at Gianola, attests that the Firm
is not connected with the Debtor, its other attorneys,
accountants, or creditors; and represents no other party in
interest and that it neither represents nor holds any interest
adverse to the Debtor or the estate and that the employment of the
Firm would be in the best interest of the estate.
About KM Associates
KM Associates, LLC, filed a Chapter 11 bankruptcy petition (Bankr.
S.D. W.Va. Case No. 12-bk-20041) on Jan. 30, 2012. The petition
was signed by Donald S. Simpson, managing member. The Debtor, a
Single Asset Real Estate under 11 U.S.C. Sec. 101 (51B), disclosed
assets of $17.3 million and liabilities of $26.5 million.
Bank lenders The CNB Bank, Standard Bank PaSB First United Bank &
Trust, Progressive Bank, N.A., Citizens Bank of West Virginia,
Inc. and Farmers and Merchants Bank of Western Pennsylvania,
National Association, are represented by Arthur M. Standish, Esq.,
and Kristian J. Jamieson, Esq. -- art.standish@steptoe-johnson.com
and kristian.jamieson@steptoe-johnson.com -- at Steptoe & Johnson
PLLC.
KM ASSOCIATES: Can Employ Deborah Herbert as Accountant
-------------------------------------------------------
The Bankruptcy Court has authorized KM Associates, LLC, to employ
Deborah L. Herbert, CPA of Herbert CPA & Associates, PC, as
accountant.
The Debtor requires the service of accountants to ensure its
compliance with applicable provisions of the Bankruptcy Code, the
Bankruptcy Rules, with regard to financial reporting and
accounting, and to maximize the likelihood of a successful
reorganization.
The firm will charge fees based upon its prevailing hourly
guideline rates which are set at $125.
About KM Associates
KM Associates, LLC, filed a Chapter 11 bankruptcy petition (Bankr.
S.D. W.Va. Case No. 12-bk-20041) on Jan. 30, 2012. The petition
was signed by Donald S. Simpson, managing member. The Debtor, a
Single Asset Real Estate under 11 U.S.C. Sec. 101 (51B), disclosed
assets of $17.3 million and liabilities of $26.5 million.
Bank lenders The CNB Bank, Standard Bank PaSB First United Bank &
Trust, Progressive Bank, N.A., Citizens Bank of West Virginia,
Inc. and Farmers and Merchants Bank of Western Pennsylvania,
National Association, are represented by Arthur M. Standish, Esq.,
and Kristian J. Jamieson, Esq., at Steptoe & Johnson PLLC.
KM ASSOCIATES: Can Employ Brian Riffle as Accountant
----------------------------------------------------
The Bankruptcy Court has approved the application of KM
Associates, LLC, to employ Brian Riffle as its accountants.
The Debtor said it requires the service of accountants to ensure
its compliance with applicable provisions of the Bankruptcy Code,
the Bankruptcy Rules, with regard to financial reporting and
accounting, and to maximize the likelihood of a successful
reorganization.
The Firm will charge fees based upon its prevailing hourly
guideline rates which are set at $125 for the Accountant.
Mr. Riffle attests that the Firm is not connected with the Debtor,
its other attorneys, accountants, or creditors; and neither
represents nor holds any interest adverse to the Debtor or the
estate.
The Troubled Company Reporter on Feb. 20, 2012, reported that the
Debtor also has sought Court authorization to employ Deborah L.
Herbert, CPA of Herbert CPA & Associates, PC, as accountant.
About KM Associates
KM Associates, LLC, filed a Chapter 11 bankruptcy petition (Bankr.
S.D. W.Va. Case No. 12-bk-20041) on Jan. 30, 2012. The petition
was signed by Donald S. Simpson, managing member. The Debtor, a
Single Asset Real Estate under 11 U.S.C. Sec. 101 (51B), disclosed
assets of $17.3 million and liabilities of $26.5 million.
Bank lenders The CNB Bank, Standard Bank PaSB First United Bank &
Trust, Progressive Bank, N.A., Citizens Bank of West Virginia,
Inc. and Farmers and Merchants Bank of Western Pennsylvania,
National Association, are represented by Arthur M. Standish, Esq.,
and Kristian J. Jamieson, Esq., at Steptoe & Johnson PLLC.
KOLORFUSION INT'L: Suspending Filing of Reports with SEC
--------------------------------------------------------
Kolorfusion International, 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 78 holders of common shares as
of March 8, 2012.
About Kolorfusion International
Kolorfusion International, Inc., (pinksheets:KOLR) owns, develops
and markets a system for transferring color patterns to metal,
wood, glass and plastic products. "Kolorfusion" is a process that
allows the transfer of colors and patterns into coated metal, wood
and glass and directly into plastic surfaces of virtually any
shape or size. The creation of a pattern to be part of a product's
surface is designed to enhance consumer appeal, create demand for
mature products, achieve product differentiation and customization
and as a promotional vehicle.
Kolorfusion filed for voluntary Chapter 11 bankruptcy (Bankr. D.
Colo. Case No. 10-28857) on July 27, 2010. The Law Office of
Bonnie Bell Bond, LLC, in Greenwood Village, Colorado, serves as
the Debtor's counsel.
The company disclosed assets of $445,000 against debt totaling
$2.3 million.
As reported by the TCR on Oct. 11, 2011, Kolorfusion International
Inc. won confirmation of an old-fashioned bootstrap Chapter 11
plan. Kolorfusion's plan promises to give unsecured creditors
with $2.3 million in claims a pro rata share of half of net
profits over the next five years. The disclosure statement didn't
venture a guess about the percentage recovery. Other creditors,
like equipment lessors and lenders, agreed to restructure their
obligations. Shareholders retain their stock.
LINWOOD FURNITURE: Files for Chapter 11 Bankruptcy Protection
-------------------------------------------------------------
Linwood Furniture filed March 5 (Bankr. M.D. N.C. Case No.
12-50319) for Chapter 11 bankruptcy protection, listing $3.65
million in assets, including $2.5 million in inventory and
$719,855 in accounts receivable and $6.89 million in debts --
$4.05 million in secured creditor claims and $2.84 million in
unsecured non-priority creditor claims.
Winston-Salem Journal reports that Mike Mebane, Linwood's chief
executive, said Wednesday the bankruptcy will not affect
production of the Timberlake line or other residential and
hospitality lines. He does not expect it to affect orders with
existing customers. Mr. Mebane said the company chose to enter
bankruptcy protection after discussing its financial and
production dilemma with creditors.
According to the report, D&S Legacy Vision LLC of Chapel Hill was
listed as the top secured creditor at $2.57 million, along with
Linwood Capital LLC of Greensboro at $1 million and Linwood
Capital Investors LLC of Lexington at $400,000. Linwood Capital
owns 60% of the company, while Linwood Inc. owns 40%.
The report adds that, among the largest unsecured non-priority
creditors are Kepley-Frank Hardwood Co. of Lexington at
$774,718; Columbia Panel of Lexington at $524,570; Chesterfield
Wood Products of Roanoke, Va., at $358,818; Woodcraft Inc. of
Louisville, Ky., at $201,582; and Multi-Wall Packaging Co. of
Rural Hall at $126,131.
Linwood Furniture is one of two producers of the top-selling Bob
Timberlake line.
Judge Catharine R. Aron presides over the case. John Paul H.
Cournoyer, Esq., and John A. Northen, Esq., at Northen Blue, LLP,
serve as the Debtor's counsel. The petition was signed by W.
Michael Mebane, CEO.
LPATH INC: Raises $9.3 Million in Equity Financing
--------------------------------------------------
Lpath, Inc., has entered into subscription agreements with various
investors to raise approximately $9.3 million through the sale of
12,392,667 shares of Class A common stock.
The shares were issued at a price of $0.75 per share, with each
investor also receiving warrants to purchase the number of shares
of Class A common stock equal to 50% of the number of common
shares purchased in this financing. The warrants have a five-year
term and are immediately exercisable at a price of $1.10 per share
into shares of Class A common stock.
The shares of Class A common stock and warrants are being offered
pursuant to a prospectus, which is included as part of the
Company's effective registration statement filed with the
Securities and Exchange Commission, a copy of which may be
obtained at the SEC's Web site: www.sec.gov.
Lpath intends to use the net proceeds from the funding for general
corporate purposes. Lpath intends to prioritize future
expenditures on the continued development of Lpath's current lead
product candidates, iSONEP and ASONEP, and the pre-clinical
development of Lpath's Lpathomab product candidate. This
financing is expected to close on March 9, 2012, subject to
satisfaction of customary closing conditions.
Summer Street Research Partners and Morgan Joseph TriArtisan LLC
acted as placement agents for the financing.
About Lpath, Inc.
San Diego, Calif.-based Lpath, Inc. is a biotechnology company
focused on the discovery and development of lipidomic-based
therapeutics, an emerging field of medical science whereby
bioactive lipids are targeted to treat human diseases.
The Company reported a net loss of $4.60 million on $7.83 million
of total revenues for the year ended Dec. 31, 2010, compared with
net income of $3.98 million on $11.91 million of total revenues
during the prior year.
As reported by the TCR on March 28, 2011, Moss Adams LLP, in San
Diego, Calif., expressed substantial doubt about the Company's
ability to continue as a going concern after auditing the
Company's financial statements at the end of 2009. The
independent auditors noted that the Company had incurred
significant cash losses from operations since inception and
expects to continue to incur cash losses from operations in 2010
and beyond. In its audit report for 2010, the auditor did not
issue a going concern qualification.
The Company's balance sheet at Sept. 30, 2011, showed
$20.04 million in total assets, $15.61 million in total
liabilities, and $4.42 million in total stockholders' equity.
M/I HOMES: Fitch Affirms Issuer Default Rating at 'B'
-----------------------------------------------------
Fitch Ratings has affirmed M/I Homes, Inc.'s (NYSE: MHO) ratings,
including the company's Issuer Default Rating (IDR) at 'B'. The
Rating Outlook is Stable.
MHO's ratings and Outlook reflect the company's execution of its
business model in the current housing environment, management's
demonstrated ability to manage land and development spending,
healthy liquidity position and better prospects for the housing
sector this year.
MHO successfully managed its balance sheet during the severe
housing downturn, allowing the company to accumulate cash and pay
down its debt as it pared down its inventory. After significantly
reducing its lot inventory during the 2006 to 2009 periods, MHO
began to focus on growing its business in late 2009 by investing
in new communities and entering new markets. In 2010, the company
increased its total lot position by 9.2% and expanded into the
Houston, Texas market. During 2011, the company entered the San
Antonio, Texas market and also grew its total lot position by
1.8%, although the increase was due to lots under option as its
owned lot position actually declined 6% year-over-year.
MHO maintains an approximately 4.5-year supply of total lots
controlled, based on trailing 12 months deliveries, and 3.1 years
of owned land. Total lots controlled were 10,353 lots at Dec. 31,
2011, 69.1% of which are owned, and the balance is controlled
through options. Historically, MHO developed about 80% of its
communities from which it sells product, resulting in inventory
turns that were moderately below average as compared to its public
peers. During the downturn, MHO had been less focused on land
development and a majority of its newer land purchases were and
continue to be finished lots.
During 2011, the company spent $117 million on land and
development, which is roughly 20%-25% below what the company had
initially expected to spend as of early 2011 as market conditions
remained weak, particularly during the first half of the year.
Based on the current environment, MHO expects land and development
spending in 2012 will be higher than 2011 levels. As a result,
Fitch expects MHO to be cash flow negative again this year largely
due to this greater level of real estate spending. Fitch is
comfortable with this strategy given management's demonstrated
ability to manage its inventory and adjust land and development
spending to maintain a healthy liquidity position, as it did
during 2011.
MHO ended 2011 with $59.8 million of unrestricted cash and $51.6
million of availability under its $140 million revolving credit
facility that matures in December 2014. The company has $41.4
million of senior notes coming due in April 2012, which will be
repaid from cash on hand and borrowings under the revolver. Cash
is expected to diminish in the next 12 months as the company pays
down some debt and continues to build its land position.
Nevertheless, Fitch expects the company to maintain a suitable
liquidity position with adequate borrowing availability under its
revolving credit facility.
The company reported higher year-over-year home deliveries during
the second half of 2011, and homebuilding revenues grew 5.7%
compared to the second half of 2010. MHO also reported improvement
in net orders in each of the last three quarters of 2011, leading
to a 27% increase in homes in backlog at year-end 2011 compared
with year-end 2010. The significant increase in backlog, combined
with the company's strategy to grow subdivision count by 5%-10%
this year, should result in moderately higher deliveries in 2012
compared with 2011.
Certain recent economic/construction related statistics, such as
job growth, consumer confidence, mortgage rates, household
formations, multifamily starts, existing home sales, pending home
sales, housing inventories, and foreclosures were improving and/or
above consensus. A few key statistics such as single-family
housing starts, new home sales, home prices (CoreLogic, Case
Shiller) were declining/short of expectations. Overall, the
current setting is much like at the beginning of 2011.
Fitch's housing forecasts for 2012 assume a modest rise off a very
low bottom. New home inventories are at historically low levels
and affordability is at near record highs. In a slowly growing
economy with distressed home sales competition similar to 2011,
less competitive rental cost alternatives, and, probably, even
lower mortgage rates on average, single-family housing starts
should improve about 5% to 450,000, while new home sales increase
approximately 5.6% to 319,000 and existing home sales grow 3% to
4.388 million.
Future ratings and Outlooks will be influenced by broad housing
market trends as well as company specific activity, such as trends
in land and development spending, general inventory levels,
speculative inventory activity (including the impact of high
cancellation rates on such activity), gross and net new order
activity, debt levels and especially free cash flow trends and
uses, and the company's cash and liquidity position. Negative
rating actions could occur if the anticipated recovery in housing
does not materialize and the company prematurely steps up its
land/development spending, leading to consistent and significant
negative quarterly cash flow from operations and diminished
liquidity position. MHO's rating is constrained in the
intermediate term due to weak credit metrics, but a Positive
Outlook may be considered if the recovery in housing is
significantly better than Fitch's outlook and the company shows
further improvement in credit metrics and its liquidity position.
Fitch has affirmed the following ratings for MHO with a Stable
Outlook:
-- Long-term IDR at 'B';
-- Senior unsecured notes at 'B+/RR3';
-- Series A non-cumulative perpetual preferred stock at
'CCC/RR6'.
The Recovery Rating (RR) of 'RR3' on MHO's senior unsecured notes
indicates good recovery prospects for holders of this debt issue.
MHO's exposure to claims made pursuant to performance bonds and
the possibility that part of these contingent liabilities would
have a claim against the company's assets were considered in
determining the recovery for the unsecured debt holders. The
'RR6' on MHO's preferred stock indicates poor recovery prospects
in a default scenario. Fitch applied a liquidation value analysis
for these RRs.
MAQ MANAGEMENT: Wants Authority to Access $241,000 DIP Financing
----------------------------------------------------------------
Super Stop Petroleum, Inc., asks the Bankruptcy Court for
authority to obtain financing pursuant to the terms and provisions
of a Post-Petition Promissory Note and Security Agreement between
the Debtor and Investment Group Four, LLC. As adequate
protection, the Debtor will grant a security interest in and lien
on four of the Debtors' real properties, which serve as collateral
for secured creditor, First National Bank of South Florida.
The principal terms and conditions of the DIP Financing are:
A. Lender: Investment Group Four, LLC, a third-party entity.
B. Amount of DIP Financing: In accordance with the terms of
the Interim Order, pending the Final Hearing, the Debtor
may obtain advances under the DIP Financing Loan Documents
only to the extent necessary to avoid immediate and
irreparable harm to the Debtor, which will be used to pay
1st National pursuant to the terms of a global settlement,
which must be paid before the Final Hearing. The Debtor
anticipates that it will need to borrow approximately
$241,698.71 during to pay this critical business expense.
C. Interest Rate, Fees and Expenses of Lender: Interest will
accrue on the outstanding principal balance of the DIP
Financing at the fixed rate of 12%. The professional fees
and costs incurred by the Lender, if any, in connection
with the negotiation, documentation, Bankruptcy Court
approval, administration and the collection of the amounts
due under the DIP Financing, will be added to the amount
of the loan to be paid when the loan matures.
E. Term of the Loan and Amount Available: The DIP Financing
will be repaid monthly, with 12 months interest-only
payments, with the entire principal balance to be paid in
full 13 months from the date of the first issuance of
funds to the Debtor. However, Borrower will have the
option to renew the Loan for one additional 12-month
period upon the payment of $25,000 principal reduction
payment. The maximum principal amount that is available to
the Debtor will be $241,698.71, including Lender's
attorney's fees, interest or the commitment fee.
F. Priority and Liens: The Debtor's postpetition obligations
under the DIP Financing Agreement will at all times, be
secured by a perfected lien on the Debtor's real property
which serves as 1st National's Collateral.
The Debtor submit that it does not have sufficient available
sources of working capital and financing to complete the Chapter
11 reorganization process, to consummate its settlement agreement
with 1st National, and begin business operations to preserve and
enhance the value of the bankruptcy estate pending confirmation.
In the absence of the DIP Financing and the use of the 1st
National Cash Collateral to pay to 1st National, the global
settlement with 1st National would be demolished immediately and
serious and irreparable harm to the Debtor and the bankruptcy
estate would occur. The terms of the post-petition financing and
the use of cash collateral are fair and reasonable, and will
preserve the value of the Collateral and provide the Debtors with
a reasonable opportunity to reorganize.
About MAQ Management
Based in Boca Raton, Florida, MAQ Management, Inc., and three
other affiliates serve as commercial landlords to convenience
stores and gas stations in primarily in South Florida. They filed
for Chapter 11 bankruptcy (Bankr. S.D. Fla. Cases No. 11-26571 to
11-26574) on June 15, 2011. Affiliates that sought Chapter 11
protection are Super Stop Petroleum, Inc., Super Stop Petroleum I,
Inc., and Super Stop Petroleum IV, Inc. Judge Erik P. Kimball
presides over the case. MAQ Management estimated assets and
debts of $1 million to $10 million. Super Stop estimated assets
and debts of $10 million to $50 million. The petitions were
signed by Mahammad A. Qureshi, CEO.
Richard J. McIntyre, Esq., and Chirstopher C. Todd, Esq., at
McIntyre, Panzarella, Thanasides, Hoffman, Bringgold & Todd, P.L.,
in Tampa, Florida, serve the Debtors as substitute counsel.
The U.S. Trustee announced that until further notice, it will not
appoint a committee of creditors for the Debtors' cases.
As reported in the TCR on Oct. 21, 2011, MAQ Management, Inc., et
al., filed their Consolidated Chapter 11 Plan of Reorganization,
with the U.S. Bankruptcy Court for the Southern District of
Florida, in compliance with the Court's Order.
MEDIA GENERAL: In Talks with Lenders, Delays 2011 Form 10-K
-----------------------------------------------------------
Media General, Inc., is in discussions with its lenders with
respect to amending and extending its $363 million of bank debt
due March 29, 2013. As disclosed in the Current Report on Form 8-
K filed by the Company with the Securities and Exchange Commission
on Feb. 10, 2012, the Company entered into the First Amendment to
Second Amended and Restated Credit Agreement, which provides near-
term flexibility as it pursues discussions with its lender group
concerning debt covenant amendments and an extension of the
existing maturity date.
The Company has determined that it is unable to file its Annual
Report on Form 10-K for its fiscal year ended Dec. 25, 2011,
within the prescribed time period without unreasonable effort and
expense due to the considerable amount of time directed towards
meeting with its lender group and engaging in discussions with
respect to debt covenant modifications and an extension of the
existing maturity date. The Company will file its Annual Report
on Form 10-K no later than the fifteenth calendar day following
the prescribed due date, as permitted by Rule 12b-25 of the SEC.
About Media General
Richmond, Virginia-based Media General Inc. (NYSE: MEG) --
http://www.mediageneral.com/-- is an independent communications
company with interests in newspapers, television stations and
interactive media in the United States. The Company operates in
three business segments: Publishing, Broadcast and Interactive
Media. The Company owns 25 daily newspapers and more than 150
other publications, as well as 23 television stations. The
Company also operates more than 75 online enterprises. In March
2008, the Company completed the purchase of DealTaker.com, an
online social shopping portal.
The Company reported a net loss of $71.01 million on $448.47
million of total revenues for the nine months ended Sept. 25,
2011, compared with a net loss of $31.68 million on $488.23
million of total revenues for the nine months ended Sept. 26,
2010.
The Company reported a net loss of $74.32 million on $616.20
million of total revenues for the 52 weeks ending Dec. 25, 2011,
compared with a net loss of $22.63 million on $678.11 million of
total revenues for the 52 weeks ended Dec. 26, 2010.
The Company's balance sheet at Dec. 25, 2011, showed $1.08 billion
in total assets, $1.05 billion in total liabilities and $33.95
million in stockholders' equity.
* * *
As reported by the Troubled Company Reporter on October 5, 2011,
Moody's Investors Service downgraded Media General, Inc.'s (Media
General) Corporate Family Rating (CFR) and senior secured bond
rating to B3 from B2, and lowered the company's speculative-grade
liquidity rating to SGL-4 from SGL-3. The rating actions reflect
the liquidity pressure from the approaching March 2013 credit
facility maturity and heightened risk of a covenant violation, as
well as the operating pressure from a weaker advertising market.
The rating outlook is negative.
The TCR also reported on Oct. 28, 2011, that Standard & Poor's
Ratings Services lowered its corporate credit on Richmond, Va.-
headquartered Media General Inc. to 'CCC+' from 'B-'. "The
downgrade reflects our expectation that Media General could face
difficulties in maintaining covenant compliance in 2012," S&P
said.
MF GLOBAL: SIPA Trustee Opposes Bar Date Extension for Sangani
--------------------------------------------------------------
Sangani Family LP asked the Bankruptcy Court to extend the
Jan. 31, 2012 bar date for all commodities futures customers and
securities customers to file their claims until the date on which
the claims register and underlying documentation is made public as
required by Section 107(a) of the Bankruptcy Code.
Counsel to the SIPA Trustee, James B. Kobak, Jr., Esq. at Hughes
Hubbard & Reed LLP, in New York, argues that Sangani Family LP
does not and can not set forth a sustainable argument of an
extension of the January 31, 2012 Claims Bar Date where it has
already mooted the relief sought by timely asserting claims.
Indeed, Sangani's argument that access to others claims might
help it complete its own claims is a strained rationale at best,
and is further belied by the fact that Sangani has already filed
and amended its claims, and thus has no need for the requested
relief, he points out.
The SIPA Trustee accepts Sangani's claims as timely filed and
will work with Sangani not to deny claims for purely technical
deficiencies, Mr. Kobak adds.
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 was the largest bankruptcy filing in 2011.
MFGH's subsidiaries MF Global Capital LLC, MF Global FX
Clear LLC and MF Global Market Services, LLC filed for bankruptcy
protection on Dec. 19, 2011.
MF Global Holdings USA Inc., doing business as Farr Whitlock Dixon
& Co. Inc., and Man Group USA Inc., filed a Chapter 11 petition on
March 2, 2012. Holdings USA provided administrative services to
MF Ltd. and its domestic subsidiaries.
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.
Louis J. Freeh has been named the Chapter 11 Trustee for the
bankruptcy cases of MF Global Holdings Ltd. and its affiliates.
The Trustee ha tapped (i) Freeh Sporkin & Sullivan LLP, as
investigative counsel; (ii) FTI Consulting Inc., as restructuring
advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel;
and (iv) Pepper Hamilton as special counsel; and (h) authorizing
the Committee to retain and employ (i) Dewey & LeBoeuf LLP, as the
Committee's counsel; and (ii) Capstone Advisory Group LLC as
financial advisor.
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: Singapore Liquidators Update on Interim Distribution
---------------------------------------------------------------
The Provisional Liquidators of MF Global Singapore announced on
February 27, 2012 that they have commenced payment to "Cash Only"
customers of the Company who have been identified as being
entitled to such interim distribution, i.e. customers with no
open positions as at October 31, 2011. The payment to other
entitled customers of the Company will commence from mid March
2012.
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 was the largest bankruptcy filing in 2011.
MFGH's subsidiaries MF Global Capital LLC, MF Global FX
Clear LLC and MF Global Market Services, LLC filed for bankruptcy
protection on Dec. 19, 2011.
MF Global Holdings USA Inc., doing business as Farr Whitlock Dixon
& Co. Inc., and Man Group USA Inc., filed a Chapter 11 petition on
March 2, 2012. Holdings USA provided administrative services to
MF Ltd. and its domestic subsidiaries.
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.
Louis J. Freeh has been named the Chapter 11 Trustee for the
bankruptcy cases of MF Global Holdings Ltd. and its affiliates.
The Trustee ha tapped (i) Freeh Sporkin & Sullivan LLP, as
investigative counsel; (ii) FTI Consulting Inc., as restructuring
advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel;
and (iv) Pepper Hamilton as special counsel; and (h) authorizing
the Committee to retain and employ (i) Dewey & LeBoeuf LLP, as the
Committee's counsel; and (ii) Capstone Advisory Group LLC as
financial advisor.
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)
MIT HOLDING: To Restate 2011 Financial Reports
----------------------------------------------
The board of directors of MIT Holding, Inc., determined that the
Company's previously issued interim consolidated financial
statements for the three months ended March 31, 2011, and the
three and six months ended June 30, 2011, and for the three and
nine months ended Sept. 30, 2011, should no longer be relied upon
due to the inability to complete an independent financial audit of
the acquired companies; Palmetto Long Term Care Pharmacy, Inc.,
and National Direct Home Pharmacy, Inc. The Purchases closed on
Feb. 4, 2011, and the sale of Palmetto Long Term Pharmacy, Inc.,
and National Direct Home Pharmacy, Inc., occurred Sept. 20, 2011.
The Company intends to restate its previously issued consolidated
financial statements in connection with the Company's previously
disclosed merger transaction that closed on Feb. 4, 2011.
The Company's senior management has discussed the matters with
Michael T. Studer, CPA, PC, the Company's independent registered
public accounting firm, which Firm has not as yet completed its
financial statement reviews for the quarterly periods ended
March 31, 2011, June 30, 2011, and Sept. 30, 2011.
About MIT Holding
Savannah, Ga.-based MIT Holding, Inc. (OTC BB: MITD)
-- http://www.mitholdinginc.com/-- distributes wholesale
pharmaceuticals, administers intravenous infusions, operates an
ambulatory center where therapies are administered and sells and
rents home medical equipment.
The Company's balance sheet at Sept. 30, 2011, showed
$5.10 million in total assets, $3.69 million in total liabilities,
and $1.40 million in total stockholders' equity.
As reported by the TCR on April 27, 2011, Michael T. Studer CPA
P.C., in Freeport, New York, expressed substantial doubt about MIT
Holding's ability to continue as a going concern. The independent
auditors noted that the Company negative working capital of
$1.2 million and a stockholders' deficiency of $2.2 million.
"From inception the Company has incurred an accumulated deficit of
$8.5 million."
MILLERS FIRST: A.M. Best Downgrades FSR to 'C++'
------------------------------------------------
A.M. Best Co. has downgraded the financial strength rating to C++
(Marginal) from B (Fair) and issuer credit ratings to "b" from
"bb+" of Millers First Insurance Company (Millers) (Alton, IL) and
its wholly owned subsidiary, Millers Classified Insurance Company
(Classified) (Madison, WI). The outlook for all ratings has been
revised to negative from stable.
The rating downgrades are due to significant declines in Millers'
overall risk-adjusted capitalization and the companies' continued
poor underwriting and operating performance. In recent years,
Millers and Classified have both been impacted by frequent and
severe weather-related events. As a result, pre-tax operating
losses and negative net income have been reported for three out of
the past five years with this trend continuing in 2011.
Significant surplus declines were reported in 2008, 2010 and
especially in 2011, when both Millers and Classified posted
combined ratios in excess of 140%. These results were primarily
due to significant underwriting losses caused by frequent
tornado/hail storms mainly in Missouri and Wisconsin, two of the
four Midwestern states where the companies write business.
Surplus also was significantly impacted in the fourth quarter of
2011 from a higher than anticipated adjustment for the employees'
pension plan liability at Millers. The fund was frozen as of
July 1, 2009.
These losses combined with Millers' recent pension adjustment have
resulted in a significant erosion of its risk-adjusted capital
position, and consequently, a sharp increase in its underwriting
leverage ratios.
Millers and Classified have continued initiatives to improve
profitability, which include rate adjustments and increases;
expanded use of credit characteristics; tightening underwriting
standards, increasing policy deductibles; restricting policy
growth in more catastrophe prone areas; expansion of its
catastrophe reinsurance coverage and expense reductions. Millers
also has begun exploring more long-term arrangements that may
result in reducing its underwriting exposure and potentially
improving its risk-adjusted capitalization.
However, if negative trends in declining overall risk-adjusted
capitalization and adverse operating performance were to continue,
it could result in further deterioration of the companies' current
ratings as reflected by the negative outlook.
MIRION TECHNOLOGIES: Moody's Rates CFR, $225MM New Debt at 'B1'
---------------------------------------------------------------
Moody's Investors Service assigned a B1 Corporate Family Rating
(CFR) and a B2 Probability of Default Rating (PDR) to Mirion
Technologies, Inc. The company's new $25 million revolver and $200
million first lien term loan were rated B1. The rating outlook is
stable.
Assignments:
Issuer: Mirion Technologies, Inc.
Corporate Family Rating, Assigned B1
Probability of Default Rating, Assigned B2
$25 million Senior Secured Revolving Credit Facility, rated B1,
LGD3-32%
$200 Million Senior Secured Credit Facility, rated B1, LGD3-32%
Ratings Rationale
The B1 CFR rating reflects the company's small revenue base and
niche market focus. The rating is also constrained by a large
level of goodwill and intangibles on its balance sheet relative to
its low levels of equity and tangible property, plant and
equipment. The rating however, benefits from relatively modest
leverage for its rating category, high recurring revenues from a
large installed base and strong product position in radiation
monitoring systems market. The company's products help measure
radiological activity from nuclear plants and other radiological
applications. The rating also considers the high regulatory
requirements in this field, significant barriers to entry, and the
view that the addressable market will continue to grow globally.
Moreover, the company is anticipated to generate strong free cash
flow for the rating category. Despite its relatively small size,
the company's revenue base is geographically well diversified.
The B1 rating on the company's revolver and term loan are ranked
pari passu and reflects their priority of claim in its capital
structure. The facilities are guaranteed by the company's wholly
owned domestic subsidiaries. Proceeds from the transaction will
primarily go towards refinancing debt held by its sponsor,
American Capital. The company's debt to EBITDA is initially
anticipated to be about 3.4 times at the close of the transaction
but is anticipated to improve to below 3 times in the next 12 -18
months.
The stable ratings outlook reflects the company's high recurring
revenue base and the belief that it is well positioned in the
current rating category. The company's ratings or outlook could
come under pressure if the company's leverage increases to over 5
times or if it's EBITA to interest coverage was below 2 times. A
decline in the company's revenues, in particular, if its recurring
revenues were to fall under 70% of total revenues, could cause a
change in the outlook or in the rating. Free cash flow to debt
below 7% could also cause negative ratings pressure.
The principal methodology used in rating Mirion was the Global
Manufacturing Industry Methodology published in December 2010.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Mirion Technologies, Inc., headquartered in San Ramon, CA, is a
global provider of radiation detection, measurement, analysis and
monitoring products and services to the nuclear, defense, and
medical end markets. The company's products and services include:
dosimeters; contamination & clearance monitors; detection &
identification instruments; radiation monitoring systems;
electrical penetrations; instrumentation & control equipment and
systems; dosimetry services; imaging systems; and related
accessories, software and services. Moody's anticipates total
revenues for fiscal year ending June 30, 2012 to be approximately
$275 million. Mirion was formed through a combination of three
companies in December 2005 and is majority owned by American
Capital.
MOHEGAN TRIBAL: S&P Lowers Issuer Credit Rating From 'SD' to 'D'
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its issuer credit
rating on Uncasville, Conn.-based Mohegan Tribal Gaming Authority
(MTGA) to 'SD' (selective default) from 'CC'.
"In addition, we lowered our issue-level ratings on MTGA's
existing credit facility, senior notes, and senior subordinated
notes to 'D' from 'CC'," S&P said.
"Our rating actions follow the company's announcement of the final
results and settlement of the exchange offers and the amendment
and restatement of the credit facility. Approximately $962 million
in aggregate principal out of $1.075 billion in outstanding
principal of existing notes were validly tendered and not
withdrawn," S&P said.
"As outlined in our Jan. 25, 2012 research update, it is our view
that the exchange offers and the extension of MTGA's bank facility
are a de facto restructuring and, thus, are tantamount to a
default according to our criteria. The offers to debtholders
required a maturity extension, averaging three to four years.
Although MTGA offered an increase in the interest rates on the new
debt, we believe the increase in pricing did not adequately
compensate lenders for the extension of maturities, which, under
our criteria, resulted in lenders receiving less value than the
promise of the original securities. We believe that lenders
accepted MTGA's offers largely because of the perceived risk that
the issuer may not otherwise fulfill its original obligations,"
S&P said.
"Additionally, we viewed these offers as distressed rather than
opportunistic. Apart from these offers, there was a realistic
possibility of a conventional default over the near term given
MTGA's near-term maturities ($675 million bank credit facility due
March 9, 2012 and $250 million 8% senior subordinated notes due
April 1, 2012), as well as its medium-term maturity profile," S&P
said.
"We plan to reassess MTGA's capital structure over the near term.
We will raise our issuer credit rating, assign new ratings to the
exchanged notes, and finalize preliminary ratings on the new
credit facility and new first-lien second-out term loan based on
the revised capital structure. It is our preliminary expectation
that the issuer credit rating would likely be 'B-'," S&P said.
"Although the completed exchanges were not a deleveraging event,
the post-exchange capital structure substantially reduces MTGA's
debt maturities over the next few years. However, MTGA will still
be highly leveraged, and our measure of its post-exchange interest
coverage ratio will be weak, likely at around 1.5x. In addition,
MTGA faces meaningful changes in its competitive landscape over
the intermediate term. The addition of resort casinos in
Massachusetts were approved in late 2011 (although we do not
expect any to open before 2015), and New York's governor recently
proposed the possibility of full-scale casinos in that state,
which would pressure MTGA's cash flow," S&P said.
MOHEGAN TRIBAL: Closes Exchange Offers and Consent Solicitations
----------------------------------------------------------------
The Mohegan Tribal Gaming Authority closed its previously
announced private exchange offers and consent solicitations.
The New Notes were issued in a private placement exempt from
registration under the Securities Act of 1933, as amended. The
New Notes have not been registered under the Securities Act or the
securities laws of any jurisdiction and may not be offered or sold
in the United States absent registration or an applicable
exemption from registration requirements.
* New Second Lien Notes and the New Second Lien Indenture
The New Second Lien Notes were issued pursuant to an indenture
dated March 6, 2012, by and among the Authority, the Tribe, U.S.
Bank National Association, as trustee, and, as guarantors, Downs
Racing, L.P., Backside, L.P., Mill Creek Land, L.P., Northeast
Concessions, L.P., Mohegan Commercial Ventures PA, LLC, Mohegan
Ventures-Northwest, LLC, Mohegan Golf LLC, Mohegan Ventures
Wisconsin, LLC, Wisconsin Tribal Gaming, LLC, MTGA Gaming, LLC and
Mohegan Basketball Club LLC.
Interest on the New Second Lien Notes is payable semiannually in
arrears on May 1 and November 1 of each year, commencing Nov. 1,
2012. The New Second Lien Notes are fully and unconditionally
guaranteed, jointly and severally, by each of the Guarantors.
* New Third Lien Notes and the New Third Lien Indenture
The New Third Lien Notes were issued pursuant to an indenture
dated March 6, 2012, by and among the Authority, the Tribe, U.S.
Bank National Association, as trustee, and the Guarantors.
Interest on the New Third Lien Notes is payable semiannually in
arrears on June 15 and December 15 of each year, commencing
Dec. 15, 2012. The New Third Lien Notes are fully and
unconditionally guaranteed, jointly and severally, by each of the
Guarantors.
The Authority may redeem the New Third Lien Notes, in whole or in
part, at any time at a price equal to 100% of the principal amount
plus accrued and unpaid interest, if any. If a change of control
of the Authority occurs, the Authority must offer to repurchase
the New Third Lien Notes at 101% of the principal amount, plus
accrued and unpaid interest. Additionally, if the Authority
undertakes specific kinds of asset sales or suffers events of
loss, and the Authority does not use the related sale or insurance
proceeds for specified purposes, the Authority may be required to
offer to repurchase the New Third Lien Notes at a price equal to
100% of the principal amount, plus accrued and unpaid interest.
* New Senior Subordinated Notes and the New Senior Subordinated
Indenture
The New Senior Subordinated Notes were issued pursuant to an
indenture dated March 6, 2012, by and among the Authority, the
Tribe, U.S. Bank National Association, as trustee, and the
Guarantors.
Interest on the New Senior Subordinated Notes is payable
semiannually in arrears on March 15 and September 15 of each year,
commencing Sept. 15, 2012. The initial interest payment on the
New Senior Subordinated Notes will be payable entirely in cash.
For any subsequent interest payment period through March 15, 2018,
the Authority may, at its option, elect to pay interest on the New
Senior Subordinated Notes either entirely in cash or by paying up
to 2% interest in New Senior Subordinated Notes. If the Authority
elects to pay any PIK Interest, it will increase the principal
amount of the New Senior Subordinated Notes in an amount equal to
the amount of PIK Interest for the applicable interest payment
period to holders of New Senior Subordinated Notes on the relevant
record date. The New Senior Subordinated Notes are fully and
unconditionally guaranteed, jointly and severally, by each of the
Guarantors.
* Consent Solicitations
As part of the Exchange Offers, the Authority solicited consents
from tendering holders of Old Notes to certain amendments to the
indentures governing the respective series of Old Notes. On
March 5, 2012, the Authority consummated the consent solicitations
by entering into:
(i) Supplemental Indenture No. 8 to the Indenture, dated as of
Feb. 20, 2002, among the Authority, the Tribe, the
Guarantors, and U.S. Bank as trustee, with respect to the
Old 2012 Notes;
(ii) Supplemental Indenture No. 5 to the Indenture, dated as of
Feb. 8, 2005, among the Authority, the Tribe, the
Guarantors, and U.S. Bank as trustee, with respect to the
Old 2013 Notes;
(iii) Supplemental Indenture No. 6 to the Indenture, dated as of
Aug. 3, 2004, among the Authority, the Tribe, the
Guarantors, and U.S. Bank as trustee, with respect to the
Old 2014 Notes;
(iv) Supplemental Indenture No. 5 to the Indenture, dated as of
Feb. 8, 2005, among the Authority, the Tribe, the
Guarantors, and U.S. Bank as trustee, with respect to the
Old 2015 Notes; and
(v) Supplemental Indenture No. 1 to the Indenture, dated as of
Oct. 26, 2009, among the Authority, the Tribe, the
Guarantors, and U.S. Bank as trustee, with respect to the
Old Second Lien Notes.
Each of the Supplemental Indentures is dated as of March 5, 2012,
and is by and among the Authority, the Tribe, the Guarantors, and
U.S. Bank as trustee.
Approximately $10.8 million in cash consent fees were paid to
holders of the Old Notes in connection with the consent
solicitations conducted with respect to the Old Notes.
* Bank Transactions
On March 6, 2012, the Authority entered into a Fourth Amended and
Restated Loan Agreement among the Tribe, the lenders party thereto
from time to time and Bank of America, N.A., as Administrative
Agent. The Amended Bank Credit Facility consists of a $400
million term loan facility and a $75 million revolving loan
facility. The Amended Bank Credit Facility matures on March 31,
2015. On March 6, 2012, there were $400 million in term loans and
no revolving loans outstanding under the Amended Bank Credit
Facility.
Quarterly amortization payments on the term loans under the
Amended Bank Credit Facility are $1 million. The revolving
portion of the Amended Bank Credit Facility may be used for
working capital and, subject to certain limitations, to repay the
Old 2012 Notes, Old 2013 Notes, Old 2014 Notes and Old 2015 Notes
upon the maturities thereof.
On March 6, 2012, the Authority entered into a Loan Agreement by
and among the Authority, the Tribe, the lenders party thereto from
time to time and Wells Fargo Gaming Capital, LLC, as
Administrative Agent. At closing, the Authority received $225
million, prior to payment of fees and expenses.
There are no required amortization payments due prior to maturity
in respect of the loans under the New Term Loan Facility. The New
Term Loan Facility matures on March 31, 2016.
The proceeds of the New Term Loan Facility were used to refinance
existing indebtedness of the Authority, permanently reduce
commitments under the Amended Bank Credit Facility and pay fees,
commissions, accrued interest and expenses in connection therewith
and with the transactions consummated on March 6, 2012.
On March 6, 2012, Bank of America, N.A., as collateral agent and
authorized representative under the Amended Bank Credit Facility
and Wells Fargo Gaming Capital, LLC, as collateral agent and
authorized representative under the New Term Loan Agreement,
entered into a First Lien Intercreditor Agreement, which was
acknowledged by the Grantors. The First Lien Intercreditor
Agreement establishes the relative priority of claims and rights
of the lenders and agents under the Amended Bank Credit Facility
and the New Term Loan Facility to the shared collateral, and
certain other matters relating to the administration and
enforcement of their respective security interests. Among other
things, the First Lien Intercreditor Agreement provides, subject
to certain exceptions, that, in the case of an exercise of
remedies against the shared collateral, the obligations under the
Amended Bank Credit Facility must be paid in full and discharged
prior to the payment of the obligations under the New Term Loan
Facility.
On March 6, 2012, Bank of America, N.A., as administrative agent
and collateral agent under the Amended Bank Credit Facility, Wells
Fargo Gaming Capital, LLC, as administrative agent and collateral
agent under the New Term Loan Agreement, U.S. Bank National
Association, as trustee under the indenture for the Old Second
Lien Notes and New Second Lien Notes and authorized collateral
agent for the second lien secured parties, and U.S. Bank National
Association, as trustee under the New Third Lien Indenture and
authorized collateral agent for the third lien secured parties,
entered into an Amended and Restated Collateral Agency and
Intercreditor Agreement, which was acknowledged by the Grantors.
The General Intercreditor Agreement establishes the relative lien
priorities and rights of the lenders under the Authority's various
secured obligations to the shared collateral, and certain other
matters relating to the administration and enforcement of their
respective security interests. The General Intercreditor
Agreement provides, subject to certain exceptions, that, in the
case of an exercise of remedies against the shared collateral, the
obligations under (i) the Amended Bank Credit Facility and the New
Term Loan Facility must be
A copy of the Form 8-K is available for free at:
http://is.gd/SJ8WoB
About Mohegan Tribal Gaming Authority
Mohegan Tribal Gaming Authority -- http://www.mtga.com/-- is an
instrumentality of the Mohegan Tribe of Indians of Connecticut, or
the Tribe, a federally-recognized Indian tribe with an
approximately 507-acre reservation situated in Southeastern
Connecticut, adjacent to Uncasville, Connecticut. The Authority
has been granted the exclusive authority to conduct and regulate
gaming activities on the existing reservation of the Tribe,
including the operation of Mohegan Sun, a gaming and entertainment
complex located on a 185-acre site on the Tribe's reservation.
Through its subsidiary, Downs Racing, L.P., the Authority also
owns and operates Mohegan Sun at Pocono Downs, a gaming and
entertainment facility located on a 400-acre site in Plains
Township, Pennsylvania, and several off-track wagering facilities
located elsewhere in Pennsylvania.
The Authority's balance sheet at Sept. 30, 2011, showed
$2.2 billion in total assets, $2.0 billion in total liabilities
and $198.7 million total capital.
PricewaterhouseCoopers LLP, in Hartford, Connecticut, expressed
substantial doubt about the Authority's ability to continue as a
going concern. The independent auditors noted that of the
Authority's total debt of $1.6 billion as of Sept. 30, 2011,
$811.1 million matures within the next twelve months, including
$535.0 million outstanding under the Authority's Bank Credit
Facility which matures on March 9, 2012, and the Authority's
$250.0 million 2002 8% Senior Subordinated Notes which mature on
April 1, 2012. In addition, a substantial amount of the
Authority's other outstanding indebtedness matures over the
following three fiscal years.
MOHEGAN TRIBAL: Completes Debt Refinancing Transactions
-------------------------------------------------------
The Mohegan Tribal Gaming Authority has completed its
comprehensive debt refinancing transactions, including the
consummation of its private exchange offers and consent
solicitations with respect to its outstanding notes, the amendment
and restatement of its bank credit facility and the execution and
funding of a new $225 million term loan facility.
"We are very pleased to announce the successful completion of our
refinancing," said Bruce "Two Dogs" Bozsum, Chairman of the
Authority's Management Board and Mohegan Tribal Council. "This
accomplishment reflects a tremendous team effort, and we would
like to extend our thanks to everyone involved at both the
Authority and the Tribal government. We believe that this
transaction demonstrates and confirms to the financial community
that market-based solutions to comprehensive debt refinancings in
the Native American gaming space are achievable."
"There is no question that it is great to have this behind us,"
said Mitchell Grossinger Etess, Chief Executive Officer of the
Authority. "We are appreciative of the willingness and
cooperation of our lenders and bondholders to extend our existing
debt and of the support we received on our new facility. We
believe that, with this long-term debt capital solution in place,
we are now well positioned to continue the development and
expansion of the Mohegan Sun brand."
Consummation of the exchange offers resulted in the issuance of
approximately $961.8 million in aggregate principal amount of new
notes in exchange for an equivalent principal amount of tendered
and accepted old notes.
Approximately $10.8 million in cash consent fees were paid to
holders of old notes in connection with the consent solicitations
conducted with respect to the old notes.
Credit Suisse Securities (USA) LLC, Merrill Lynch, Pierce, Fenner
& Smith Incorporated, Wells Fargo Securities, LLC and Blackstone
Advisory Partners, L.P., acted as dealer managers for the exchange
offers and consent solicitations.
Also in connection with the refinancing, the Authority amended its
bank credit facility and extended the maturity date thereof to
March 31, 2015. The bank credit facility, which was previously
comprised of a single $675 million revolving loan, now includes a
$400 million term loan and a $75 million revolving loan. Bank of
America, N.A., serves as administrative agent for the amended bank
credit facility. Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Wells Fargo Securities, LLC, Credit Suisse
Securities (USA) LLC and Blackstone Advisory Partners, L.P.,
served as joint lead arrangers and joint book managers for the
amended bank credit facility.
In addition, the Authority's new term loan facility, which matures
on March 31, 2016, is comprised of a "first lien, second out" term
loan in the amount of $225 million. Wells Fargo Gaming Capital,
LLC, serves as administrative agent for the new term loan
facility. Wells Fargo Securities, LLC, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Credit Suisse Securities (USA) LLC
and Blackstone Advisory Partners, L.P., served as joint lead
arrangers and joint bookrunners for the new term loan facility.
About Mohegan Tribal Gaming Authority
Mohegan Tribal Gaming Authority -- http://www.mtga.com/-- is an
instrumentality of the Mohegan Tribe of Indians of Connecticut, or
the Tribe, a federally-recognized Indian tribe with an
approximately 507-acre reservation situated in Southeastern
Connecticut, adjacent to Uncasville, Connecticut. The Authority
has been granted the exclusive authority to conduct and regulate
gaming activities on the existing reservation of the Tribe,
including the operation of Mohegan Sun, a gaming and entertainment
complex located on a 185-acre site on the Tribe's reservation.
Through its subsidiary, Downs Racing, L.P., the Authority also
owns and operates Mohegan Sun at Pocono Downs, a gaming and
entertainment facility located on a 400-acre site in Plains
Township, Pennsylvania, and several off-track wagering facilities
located elsewhere in Pennsylvania.
The Authority's balance sheet at Sept. 30, 2011, showed
$2.2 billion in total assets, $2.0 billion in total liabilities
and $198.7 million total capital.
PricewaterhouseCoopers LLP, in Hartford, Connecticut, expressed
substantial doubt about the Authority's ability to continue as a
going concern. The independent auditors noted that of the
Authority's total debt of $1.6 billion as of Sept. 30, 2011,
$811.1 million matures within the next twelve months, including
$535.0 million outstanding under the Authority's Bank Credit
Facility which matures on March 9, 2012, and the Authority's
$250.0 million 2002 8% Senior Subordinated Notes which mature on
April 1, 2012. In addition, a substantial amount of the
Authority's other outstanding indebtedness matures over the
following three fiscal years.
MOMENTIVE SPECIALTY: Has $29MM Loans Maturing Next Year
------------------------------------------------------
Momentive Specialty Chemicals Inc., on March 7, 2012, reported
that in connection with the previously announced extension of its
senior secured credit facilities, lenders under the senior secured
credit facilities:
(i) elected to extend the maturity of approximately
$171 million of existing third incremental revolving
facility commitments from Feb. 3, 2013, to Dec. 3, 2014;
(ii) elected to extend the maturity of approximately $19 million
of existing term loans maturing May 5, 2013, to March 4,
2015; and
(iii) elected to extend the maturity of approximately $18 million
of existing term loans maturing May 5, 2015, to March 3,
2017.
Under the senior secured credit facilities, the third incremental
revolving facility commitments are eligible for extension and,
subject to the conditions of the extension, the Company has agreed
to extend the maturity of the third incremental revolving facility
commitments of the consenting lenders.
After giving effect to the extension, the Company will have
approximately $29 million of revolving facility commitments
maturing Feb. 3, 2013, and approximately $171 million of revolving
facility commitments maturing Dec. 3, 2014. The term loans that
were elected to be extended, however, are not eligible for
extension, because no tranche of existing term loans reached the
minimum principal amount of $25 million required by the senior
secured credit facilities. As a result, the net proceeds of the
previously announced $450 million senior secured notes offering of
the Company, together with cash on hand, will be used to repay the
approximately $454 million of existing term loans maturing May 5,
2013. The approximately $925 million of existing term loans
maturing May 5, 2015, will remain outstanding. The closing of the
extension is subject to customary closing conditions, including
the reaffirmation of the security under the senior secured credit
facilities.
About Momentive Specialty
Momentive Specialty Chemicals, Inc., headquartered in Columbus,
Ohio, is a leading producer of thermoset resins (epoxy,
formaldehyde and acrylic). The company is also a supplier of
specialty resins for inks and specialty coatings sold to a diverse
customer base as well as a producer of commodities such as
formaldehyde, bisphenol A, epichlorohydrin, versatic acid and
related derivatives.
The Company also reported net income of $165 million on $4.05
billion of net sales for the nine months ended Sept. 30, 2011,
compared with net income of $161 million on $3.42 billion of net
sales for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed $3.12
billion in total assets, $5 billion in total liabilities and a
$1.87 billion total deficit.
* * *
Momentive Specialty carries a 'B-' issuer credit rating from
Standard & Poor's Ratings Services. It has 'B3' corporate family
and probability of default ratings from Moody's Investors Service.
corporate credit rating from Standard & Poor's.
As reported in the Oct. 27, 2010 edition of TCR, Moody's Investors
Service assigned a 'Caa1' rating to the guaranteed senior secured
second lien notes due 2020 of Momentive Specialty (formerly known
as Hexion Specialty Chemicals Inc.). Proceeds from the notes were
allocated for the repayment of $533 million of guaranteed senior
secured second lien notes due 2014. "With this refinancing Hexion
will have refinanced or extended the maturities on the vast
majority of the debt that was originally slated to mature prior to
2015. There is less than $600 million of this debt remaining,
which should be much easier to for the company to refinance as its
credit metrics improve further," stated John Rogers, Senior Vice
President at Moody's.
MONEY TREE: Creditors Committee Taps Greenberg Traurig as Counsel
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
cases of The Money Tree Inc., et al., asks the U.S. Bankruptcy
Court for the Middle District of Alabama for permission to retain
Greenberg Traurig, LLP as its counsel nunc pro tunc Jan. 27, 2012.
Greenberg Traurig has agreed to represent the Committee at a
discount of 10% from its standard hourly rates. The discounted
hourly rates for attorneys who will be primarily responsible for
representing the Committee in the case will range from $430 - $675
for certain shareholders and of counsel, $305 - $425 for certain
associates, and $225 for paralegals.
To the best of the Committee's knowledge, Greenberg Traurig is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Money Tree
Bainbridge, Georgia-based The Money Tree Inc. --
http://www.moneytreeinc.com/-- operates a network of lending
branches across the Southeast, concentrated in Georgia, Florida
and Alabama. The Company and four affiliates filed for Chapter 11
bankruptcy (Bankr. M.D. Ala. Case Nos. 11-12254 thru 11-12258) on
Dec. 16, 2011. The other debtor-affiliates are Small Loans, Inc.,
The Money Tree of Louisiana, Inc., The Money Tree of Florida Inc.,
and The Money Tree of Georgia of Georgia Inc. Judge William R.
Sawyer oversees the case, replacing Judge Dwight H. Williams, Jr.
Max A. Moseley, Esq., at Baker Donelson Bearman Caldwell & Berkow,
P.C., serves as the Debtors' counsel. The Debtors hired Warren,
Averett, Kimbrough & Marino, LLC, as restructuring advisors.
Money Tree's consolidated balance sheet reported $34,859,189 in
assets, $92,655,010 in liabilities, and $57,795,821 in total
stockholders' deficit. The petitions were signed by Biladley D.
Bellville, president.
The Company's subsidiary, Best Buy Autos of Bainbridge Inc., is
not a party to the bankruptcy filing and intends to operate its
business in the ordinary course.
The Official Committee of Unsecured Creditors tapped HGH
Associates LLC as accountants and financial advisors.
MONEY TREE: Committee Taps HGH Associates as Financial Advisors
---------------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
cases of The Money Tree Inc., et al., asks the U.S. Bankruptcy
Court for the Middle District of Alabama for permission to retain
HGH Associates LLC as accountants and financial advisors.
HGH will, among other things:
-- assist and advise the Committee in its analysis of the books
and records of the Debtors and the control and disposition
of its assets;
-- assist 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 continuation of the business, and any
other matters relevant to the case or to the formulation of
a Plan; and
-- assist and advise the Committee in its analysis of the
Debtors' statements and schedules.
The hourly rates of HGH's personnel are:
Peter A. Hoffmann $300
David N. Vannort $300
Joseph W. Koletar $250
Gary J. Gerhards $225
Lewis A. Weinfeld $225
Other Staff $180
If HGH is requested to testify, the expert witness fee for the
professionals for the time spent will be $50 per hour above these
rates.
To the best of the Committee's knowledge, the firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Money Tree
Bainbridge, Georgia-based The Money Tree Inc. --
http://www.moneytreeinc.com/-- operates a network of lending
branches across the Southeast, concentrated in Georgia, Florida
and Alabama. The Company and four affiliates filed for Chapter 11
bankruptcy (Bankr. M.D. Ala. Case Nos. 11-12254 thru 11-12258) on
Dec. 16, 2011. The other debtor-affiliates are Small Loans, Inc.,
The Money Tree of Louisiana, Inc., The Money Tree of Florida Inc.,
and The Money Tree of Georgia of Georgia Inc. Judge William R.
Sawyer oversees the case, replacing Judge Dwight H. Williams, Jr.
Max A. Moseley, Esq., at Baker Donelson Bearman Caldwell & Berkow,
P.C., serves as the Debtors' counsel. The Debtors hired Warren,
Averett, Kimbrough & Marino, LLC, as restructuring advisors.
Money Tree's consolidated balance sheet reported $34,859,189 in
assets, $92,655,010 in liabilities, and $57,795,821 in total
stockholders' deficit. The petitions were signed by Biladley D.
Bellville, president.
The Company's subsidiary, Best Buy Autos of Bainbridge Inc., is
not a party to the bankruptcy filing and intends to operate its
business in the ordinary course.
The Official Committee of Unsecured Creditors tapped Greenberg
Traurig, LLP as its counsel.
MONEY TREE: Files Schedules of Assets and Liabilities
-----------------------------------------------------
The Money Tree Inc., filed with the U.S. Bankruptcy Court for the
Middle District of Alabama its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $0
B. Personal Property $73,413,612
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $0
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $73,050,785
----------- -----------
TOTAL $73,413,612 $73,050,785
A full-text copy of the schedules is available for free at:
http://bankrupt.com/misc/MoneyTRee_SAL.pdf
Small Loans, Inc., a debtor-affiliate, disclosed $2,672,602 in
assets and $15,999,452 in liabilities in its own schedules.
About Money Tree
Bainbridge, Georgia-based The Money Tree Inc. --
http://www.moneytreeinc.com/-- operates a network of lending
branches across the Southeast, concentrated in Georgia, Florida
and Alabama. The Company and four affiliates filed for Chapter 11
bankruptcy (Bankr. M.D. Ala. Case Nos. 11-12254 thru 11-12258) on
Dec. 16, 2011. The other debtor-affiliates are Small Loans, Inc.,
The Money Tree of Louisiana, Inc., The Money Tree of Florida Inc.,
and The Money Tree of Georgia of Georgia Inc. Judge William R.
Sawyer oversees the case, replacing Judge Dwight H. Williams, Jr.
Max A. Moseley, Esq., at Baker Donelson Bearman Caldwell & Berkow,
P.C., serves as the Debtors' counsel. The Debtors hired Warren,
Averett, Kimbrough & Marino, LLC, as restructuring advisors.
Money Tree's consolidated balance sheet reported $34,859,189 in
assets, $92,655,010 in liabilities, and $57,795,821 in total
stockholders' deficit. The petitions were signed by Biladley D.
Bellville, president.
The Company's subsidiary, Best Buy Autos of Bainbridge Inc., is
not a party to the bankruptcy filing and intends to operate its
business in the ordinary course.
MONEY TREE: Parties-in-Interest Withdraw Plea to Transfer Venue
---------------------------------------------------------------
Parties-in-interest Ruby E. Aultman and the United States of
America notified the U.S. Bankruptcy Court for the Middle District
of Alabama that they have withdrawn their requests to transfer the
Chapter 11 cases of The Money Tree Inc., et al. to the Middle
District of Georgia.
Ms. Aultman, one of the 20 largest unsecured creditors in the
Debtors' cases, has withdrawn her motion in support of the U.S.
Attorney's motion in light of the Committee's decision not to
pursue the transfer of venue on behalf of all creditors.
In a separate filing, the United States of America, by and through
George L. Beck, Jr., United States Attorney for the Middle
District of Alabama, on behalf of the United States Department of
the Treasury, Internal Revenue Service has withdrawn its motion
to transfer venue.
Ruby E. Aultman is represented by:
Christopher W. Terry, Esq.
STONE & BAXTER, LLP
Fickling & Company Building
577 Mulberry Street, Suite 800
Macon, Georgia 31201
Tel: (478) 750-9898
Fax: (478) 750-9899
E-mail: cterry@stoneandbaxter.com
The U.S.A.'s counsel can be reached at:
George L. Beck, Jr., Esq., U.S. attorney
R. Randolph Neeley, assistant U.S. attorney
P.O. Box 197
Montgomery, AL 36101-0197
Tel: (334) 223-7280
Fax: (334) 223-7201
E-mail: Rand.Neeley@usdoj.gov
About Money Tree
Bainbridge, Georgia-based The Money Tree Inc. --
http://www.moneytreeinc.com/-- operates a network of lending
branches across the Southeast, concentrated in Georgia, Florida
and Alabama. The Company and four affiliates filed for Chapter 11
bankruptcy (Bankr. M.D. Ala. Case Nos. 11-12254 thru 11-12258) on
Dec. 16, 2011. The other debtor-affiliates are Small Loans, Inc.,
The Money Tree of Louisiana, Inc., The Money Tree of Florida Inc.,
and The Money Tree of Georgia of Georgia Inc. Judge William R.
Sawyer oversees the case, replacing Judge Dwight H. Williams, Jr.
Max A. Moseley, Esq., at Baker Donelson Bearman Caldwell & Berkow,
P.C., serves as the Debtors' counsel. The Debtors hired Warren,
Averett, Kimbrough & Marino, LLC, as restructuring advisors.
Money Tree's consolidated balance sheet reported $34,859,189 in
assets, $92,655,010 in liabilities, and $57,795,821 in total
stockholders' deficit. The petitions were signed by Biladley D.
Bellville, president.
The Company's subsidiary, Best Buy Autos of Bainbridge Inc., is
not a party to the bankruptcy filing and intends to operate its
business in the ordinary course.
The Official Committee of Unsecured Creditors tapped Greenberg
Traurig, LLP as its counsel, and HGH Associates LLC as accountants
and financial advisors.
MONEYGRAM INT'L: Reports $59.4 Million Net Income in 2011
---------------------------------------------------------
MoneyGram International, Inc., filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing net
income of $59.40 million on $1.24 billion of total revenue for the
year ended Dec. 31, 2011, compared with net income of $43.80
million on $1.16 billion of total revenue during the prior year.
The Company's balance sheet at Dec. 31, 2011, showed $5.17 billion
in total assets, $5.28 billion in total liabilities, and a
$110.19 million total stockholders' deficit.
A copy of the Form 10-K is available for free at:
http://is.gd/eLjsYW
About MoneyGram International
MoneyGram International, Inc. (NYSE: MGI) --
http://www.moneygram.com/-- is a leading global payment services
company. The Company's major products and services include global
money transfers, money orders and payment processing solutions for
financial institutions and retail customers. MoneyGram is a New
York Stock Exchange listed company with 203,000 global money
transfer agent locations in 191 countries and territories.
MONMOUTH EXCAVATORS: Meeting to Form Creditors' Panel on March 23
-----------------------------------------------------------------
Roberta A. DeAngelis, United States Trustee for Region 3, will
hold an organizational meeting on March 23, 2012, at 10:00 a.m. in
the bankruptcy case of Monmouth Excavators, Inc. The meeting will
be held at:
United States Trustee's Office
One Newark Center
1085 Raymond Blvd.
21st Floor, Room 2106
Newark, NJ 07102
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' cases.
The organizational meeting is not the meeting of creditors
pursuant to Section 341 of the Bankruptcy Code. A representative
of the Debtor, however, may attend the meeting, and provide
background information regarding the bankruptcy cases.
To increase participation in the Chapter 11 proceeding, Section
1102 of the Bankruptcy Code requires that the United States
Trustee appoint a committee of unsecured creditors as soon as
practicable. The Committee ordinarily consists of the persons,
willing to serve, that hold the seven largest unsecured claims
against the debtor of the kinds represented on the committee.
Section 1103 of the Bankruptcy Code provides that the Committee
may consult with the debtor, investigate the debtor and its
business operations and participate in the formulation of a plan
of reorganization. The Committee may also perform other services
as are in the interests of the unsecured creditors whom it
represents.
Monmouth Excavators, Inc., filed a Chapter 11 petition (Bankr. D.
N.J. Case No. 12-15338) on March 1, 2012, in Trenton, New Jersey.
Barry W. Frost, Esq., at Teich Groh, in Trenton, serves as counsel
to the Debtor. The Debtor disclosed $818,000 in assets and
$1,051,145 in liabilities.
MONTANA ELECTRIC: Regulator Can't Intervene in Bankruptcy Case
--------------------------------------------------------------
Max Stendahl at Bankruptcy Law360 reports that a federal judge on
Thursday nixed claims by Montana's state utilities regulator that
it has a right to intervene in the bankruptcy case of Southern
Montana Electric Generation and Transmission Cooperative Inc.
because it regulates utilities that are creditors of the co-op.
U.S. Bankruptcy Judge Ralph B. Kirscher denied a motion to
intervene by The Montana Public Service Commission, Law360
relates.
About Southern Montana Electric
Based in Billings, Montana, Southern Montana Electric Generation
and Transmission Cooperative, Inc., was formed to serve five
other electric cooperatives. The city of Great Falls later joined
as the sixth member. Including the city, the co-op serves a
population of 122,000. In addition to Great Falls, the service
area includes suburbs of Billings, Montana.
Southern Montana filed for Chapter 11 bankruptcy (Bankr. D.
Mont. Case No. 11-62031) on Oct. 21, 2011. Southern Montana
estimated assets of $100 million to $500 million and estimated
debts of $100 million to $500 million. Timothy Gregori signed the
petition as general manager.
Jon E. Doak, Esq., at Doak & Associates, P.C., in Billings,
Montana, serves as the Debtor's counsel. In December 2011,
Southern Montana also sought permission to employ the Goodrich Law
Firm, P.C., as general co-counsel.
Also in December, Lee A. Freeman was appointed as Chapter 11
trustee. Mr. Freeman retained Horowitz & Burnett, P.C., as his
counsel and Waller & Womack, P.C., as local counsel.
The United States Trustee for Region 18 has appointed an Official
Committee of Unsecured Creditors in the case.
After filing for reorganization in October, the co-op agreed to a
request for appointment of a Chapter 11 trustee.
MORGANS HOTEL: Incurs $87.9 Million Net Loss in 2011
----------------------------------------------------
Morgans Hotel Group Co. filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing a
net loss of $87.95 million on $207.33 million of total revenues in
2011, a net loss of $83.64 million on $236.37 million of total
revenues in 2010, and a net loss of $101.60 million on
$225.05 million of total revenues in 2009.
The Company's balance sheet at Dec. 31, 2011, showed
$557.65 million in total assets, $642.12 million in total
liabilities, $5.17 million in redeemable noncontrolling interest,
and a $89.64 million total deficit.
A copy of the Form 10-K is available for free at:
http://is.gd/KEJlZL
About Morgans Hotel Group
Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) --
http://www.morganshotelgroup.com/-- is widely credited as the
creator of the first "boutique" hotel and a continuing leader of
the hotel industry's boutique sector. Morgans Hotel Group
operates and owns, or has an ownership interest in, Morgans,
Royalton and Hudson in New York, Delano and Shore Club in South
Beach, Mondrian in Los Angeles and South Beach, Clift in San
Francisco, Ames in Boston, and Sanderson and St Martins Lane in
London. Morgans Hotel Group and an equity partner also own the
Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans
Hotel Group also manages hotels in Isla Verde, Puerto Rico and
Playa del Carmen, Mexico. Morgans Hotel Group has other property
transactions in various stages of completion, including projects
in SoHo, New York and Palm Springs, California.
MUSCLEPHARM CORP: Issues $587,500 Notes, 39.2 Million Warrants
--------------------------------------------------------------
MusclePharm Corporation closed on an offering by which it entered
into a series of subscription agreements, pursuant to which the
Company issued promissory notes and warrants to four accredited
investors.
The Notes, in the aggregate, are in the principal amount of
$587,500 and mature 18 months following issuance thereof. The
interest rate is 15% per annum. The Company agrees that it will
establish a segregated account from the Company's omnibus account
in which will be deposited 10% of cash from payments on accounts
receivable and advances from manufacturers and end-user clients,
and a portion of which will be used for payment of interest and
repayment of principal. The Notes contain customary default and
covenant provisions.
Simultaneous with the issuance of the Notes, the Company issued an
aggregate of 39,166,667 Warrants in connection with the offering.
The Warrants are exercisable at a price equal to $0.015 for a two
year period commencing six months after the issuance of the
Warrant. The Warrants also feature a cashless exercise provision.
The warrants and the shares underlying the warrants were issued
pursuant to exemptions from registration provided by Section 4(2)
of the Securities Act of 1933, as amended, or Regulation D
promulgated thereunder.
About MusclePharm
Headquartered in Denver, Colorado, MusclePharm Corporation
(OTC BB: MSLP) -- http://www.muslepharm.com/-- is a healthy life-
style company that develops and manufactures a full line of
National Science Foundation approved nutritional supplements that
are 100% free of banned substances. MusclePharm is sold in over
120 countries and available in over 5,000 U.S. retail outlets,
including GNC and Vitamin Shoppe. MusclePharm products are also
sold in over 100 online stores, including bodybuilding.com,
Amazon.com and Vitacost.com.
Berman & Company, P.A., in Boca Raton, Florida, expressed
substantial doubt about MusclePharm's ability to continue as a
going concern, following the Company's 2010 results. The
independent auditors noted that the Company had a net loss of
$19.6 million and net cash used in operations of $3.8 million for
the the year ended Dec. 31, 2010; and a working capital deficit
and stockholders' deficit of $2.8 million and $1.7 million,
respectively, at Dec. 31, 2010.
The Company also reported a net loss of $12.33 million on
$13.07 million of sales for the nine months ended Sept. 30, 2011,
compared with a net loss of $8.67 million on $3.13 million of
sales for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed
$5.71 million in total assets, $10.86 million in total
liabilities, and a $5.14 million total stockholders' deficit.
NATIONAL AUTOMOTIVE: A.M Best Cuts Issuer Credit Rating to "bb"
---------------------------------------------------------------
A.M. Best Co. has downgraded the issuer credit rating (ICR) to
"bb" from "bb+" and affirmed the financial strength rating of B
(Fair) of National Automotive Insurance Company (Metairie,
LA). The outlook for both ratings has been revised to negative
from stable.
The downgrading of the ICR reflects National Automotive's poor
underwriting performance over several years and its recent adverse
reserve development that resulted in surplus declines. National
Automotive's poor underwriting performance was driven by increased
auto liability losses, competitive market conditions and an
increase in the required minimum statutory automobile limits in
Louisiana. The state's requirement to provide increased minimum
limits contributed to the company adverse reserve development in
2010 and 2011.
The negative outlook reflects National Automotive's reduced
surplus and decline in its risk-adjusted capitalization. The
outlook further considers the company's ongoing challenges to
improve underwriting results over the near term and avoid
additional surplus losses.
However, National Automotive has implemented corrective actions
and enhanced its information technology for greater operating
efficiency. In addition, policy fee income has somewhat offset
the underwriting shortfalls in most years, and National Automotive
maintains good local market knowledge.
Factors that could result in future negative rating actions
include a continued deterioration in National Automotive's
underwriting performance, continued adverse reserve development or
erosion of its capital base.
NEBRASKA BOOK: Submits 2nd Amended Plan of Reorganization
---------------------------------------------------------
Lincoln Star Journal reports that NBC Acquisition Corp. and
subsidiaries, including Nebraska Book Co., filed a second amended
plan of reorganization and disclosure statement with the U.S.
Bankruptcy Court for the District of Delaware. A hearing to
approve the disclosure statement has been scheduled for April 13.
According to the report, NBC Acquisitions has been reorganizing in
a prepared Chapter 11 bankruptcy it filed last year to restructure
$450 million in debt. This is the latest extension of a
prepackaged bankruptcy that normally would have been executed
in less time. The confirmation hearing for approval of the
reorganization plan, previously postponed until Dec. 19, was
pushed back to March 22 and now, until April.
The report relates Nebraska Book also said it filed a motion to
reject contracts and unexpired real-property leases of about 40
off-campus bookstores. In January, the company announced the
closing of seven off-campus stores and received an extension to
continue evaluating the performance of 45 off-campus stores.
Nebraska Book said most of these stores will be closing on or
before March 31.
About Nebraska Book
Lincoln, Nebraska-based Nebraska Book Company, Inc., is one of the
leading providers of new and used textbooks for college students
in the United States. Nebraska Book and seven affiliates filed
separate Chapter 11 petitions (Bankr. D. Del. Case Nos. 11-12002
to 11-12009) on June 27, 2011. Hon. Peter J. Walsh presides over
the case. Lawyers at Kirkland & Ellis LLP and Pachulski Stang
Ziehl & Jones LLP, serve as the Debtors' bankruptcy counsel. The
Debtors; restructuring advisors are AlixPartners LLC; the
investment bankers are Rothschild, Inc.; the auditors are Deloitte
& Touche LLP; and the claims agent is Kurtzman Carson Consultants
LLC. As of the Petition Date, the Debtors had consolidated assets
of $657,215,757 and debts of $563,973,688.
JPMorgan Chase Bank N.A., as administrative agent for the DIP
lenders, is represented by lawyers at Richards, Layton & Finger,
P.A., and Simpson Thacher & Bartlett LLP. J.P. Morgan Investment
Management Inc., the DIP arranger, is represented by lawyers at
Bayard, P.A., and Willkie Farr & Gallagher LLP.
An ad hoc committee of holders of more than 50% of the Debtors'
Second Lien Notes is represented by lawyers at Brown Rudnick. An
ad hoc committee of holders of the Debtors' 8.625% unsecured
notes are represented by Milbank, Tweed, Hadley & McCloy LLP.
The Official Committee of Unsecured Creditors selected Lowenstein
Sandler LLP and Stevens & Lee, P.C., as lawyers and Mesirow
Financial Inc. as financial advisers.
Nebraska Book has been unable to confirm a pre-packaged Chapter 11
plan that would have swapped some of the existing debt for new
debt, cash and the new stock, due to an inability to secure $250
million in exit financing.
NEXSTAR BROADCASTING: Incurs $11.9 Million Net Loss in 2011
-----------------------------------------------------------
Nexstar Broadcasting Group, Inc., reported net income of $3.26
million on $86.20 million of net revenue for the three months
ended Dec. 31, 2011, compared with net income of $14.27 million on
$97.05 million of net revenue for the same period a year ago.
The Company reported a net loss of $11.89 million on
$306.49 million of net revenue for the 12 months ended Dec. 31,
2011, compared with a net loss of $1.81 million on $313.35 million
of net revenue a year ago.
The Company's balance sheet at Sept. 30, 2011, showed
$582.67 million in total assets, $769.64 million in total
liabilities and a $186.96 million total stockholders' deficit.
Perry A. Sook, Chairman, President and Chief Executive Officer of
Nexstar Broadcasting Group, Inc., commented, "Nexstar ended 2011
on a strong note with fourth quarter core revenue growth of 6.4%,
marking the highest level of quarterly core revenue growth during
the year and our ninth consecutive quarter of core television
advertising revenue growth. Nexstar's full year 2011 core local
and national revenue rose 4.8%, which was in line with our
expectations, while net revenue declined just 2.2% despite the
cyclical impact of an approximately $33 million variance in
political advertising in 2011. Overall, Nexstar's fourth quarter
and full year results again highlight the value of our focus on
generating new local direct advertising and revenue
diversification as well as completing select accretive station
acquisitions."
A copy of the press release is available for free at:
http://is.gd/4LwQM0
About Nexstar Broadcasting Group
Irving, Texas-based Nexstar Broadcasting Group Inc. currently
owns, operates, programs or provides sales and other services to
62 television stations in 34 markets in the states of Illinois,
Indiana, Maryland, Missouri, Montana, Texas, Pennsylvania,
Louisiana, Arkansas, Alabama, New York, Rhode Island, Utah and
Florida. Nexstar's television station group includes affiliates
of NBC, CBS, ABC, FOX, MyNetworkTV and The CW and reaches
approximately 13 million viewers or approximately 11.5% of all
U.S. television households.
* * *
As reported by the Troubled Company Reporter on Aug. 30, 2010,
Standard & Poor's Ratings Services raised its corporate credit
rating on Nexstar Broadcasting Group to 'B' from 'B-'. The rating
outlook is stable.
"The 'B' corporate credit rating reflects S&P's expectation that
Nexstar's core ad revenue will continue growing modestly in 2010
and 2011," said Standard & Poor's credit analyst Deborah Kinzer.
The EBITDA growth resulting from the rebound in core advertising,
combined with political ad revenue from the 2010 midterm
elections, should, in S&P's view, enable Nexstar to reduce its
leverage significantly by the end of the year.
NAVISTAR INTERNATIONAL: Incurs $140MM Net Loss in Jan. 31 Qtr.
--------------------------------------------------------------
Navistar International Corporation filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss of $140 million on $3.05 billion of net
sales and revenues for the three months ended Jan. 31, 2012,
compared with net income of $6 million on $2.74 billion of net
sales and revenues for the same period a year ago.
The Company's balance sheet at Jan. 31, 2012, showed
$11.50 billion in total assets, $11.69 billion in total
liabilities, and a $195 million total stockholders' deficit.
"We proactively addressed these product issues in a low usage
period during the first quarter, which we believe will improve
long-term customer satisfaction and reduce warranty costs," said
Daniel C. Ustian, Navistar chairman, president and chief executive
officer. "Strategically, we achieved a number of key milestones
in the first quarter, including our submission of a 0.2 NOx engine
for EPA certification and the announcement of our development of a
full range of natural gas truck offerings."
A copy of the Form 10-Q is available for free at:
http://is.gd/wfCJWq
About Navistar International
Navistar International Corporation (NYSE: NAV) --
http://www.Navistar.com/-- is a holding company whose
subsidiaries and affiliates subsidiaries produce International(R)
brand commercial and military trucks, MaxxForce(R) brand diesel
engines, IC Bus(TM) brand school and commercial buses, Monaco RV
brands of recreational vehicles, and Workhorse(R) brand chassis
for motor homes and step vans. It also is a private-label
designer and manufacturer of diesel engines for the pickup truck,
van and SUV markets. The company also provides truck and diesel
engine parts and service. Another affiliate offers financing
services.
* * *
Navistar has a 'BB-/Stable/--' corporate credit rating from
Standard & Poor's and a 'B1' Corporate Family Rating and
Probability of Default Rating from Moody's Investors Service.
Moody's said in October 2010 that Navistar's B1 rating could
improve if the North American truck market remains on track for a
sustained recovery into 2011, and Navistar's operational
initiatives to moderate its vulnerability to the truck cycle show
evidence of taking hold.
NEW CITY BANK: Closed; FDIC Pays Out Insured Deposits
-----------------------------------------------------
The Federal Deposit Insurance Corporation approved the payout of
the insured deposits of New City Bank of Chicago, Ill. The bank
was closed on Friday, March 9, 2012, by the Illinois Department of
Financial and Professional Regulation -- Division of Banking,
which appointed the FDIC as receiver.
The FDIC was unable to find another financial institution to take
over the banking operations of New City Bank. The FDIC will mail
checks directly to depositors of New City Bank for the amount of
their insured money.
Customers with questions about the transaction, including those
with accounts in excess of $250,000, should call the FDIC toll-
free at 1-800-523-8173. Interested parties also can visit the
FDIC's Web site at
http://www.fdic.gov/bank/individual/failed/newcity.html
Beginning Monday, March 12, 2012, depositors of New City Bank with
more than $250,000 at the bank may visit the FDIC's Web page "Is
My Account Fully Insured?" at http://www2.fdic.gov/dip/Index.asp
to determine their insurance coverage.
As of Dec. 31, 2011, New City Bank had $71.2 million in total
assets and $72.4 million in total deposits. The amount of
uninsured deposits will be determined once the FDIC obtains
additional information from those customers.
The FDIC as receiver will retain all the assets from New City Bank
for later disposition. Loan customers should continue to make
their payments as usual.
The FDIC estimates that the cost to the Deposit Insurance Fund
will be $17.4 million. New City Bank is the thirteenth FDIC-
insured institution to fail in the nation this year, and the
second in Illinois. The last FDIC-insured institution closed in
the state was Charter National Bank and Trust, Hoffman Estates, on
Feb. 10, 2012.
NORTHAMPTON GENERATING: Taps Dilworth Paxson as Bond Counsel
------------------------------------------------------------
Northamption Generating Company, L.P., asks permission from the
U.S. Bankruptcy Court for the Western District of North Carolina
to hire Dilworth Paxson LLP as special bond counsel effective as
of Feb. 9, 2012.
The Debtor seeks to employ Dilworth Paxson to represent and advise
it in matters related to the reissuance or, restructure of the
Debtor's Senior Tax-Exempt Series 1994 A Bonds and Subordinated
Tax-Exempt Series 1994 C Bonds.
The hourly rates applicable to the principal attorneys and staff
at Dilworth proposed to represent the Debtor are:
Marc A. Feller $510
Mary T. Tomich $445
Peter Hughes $500
Kristi Poling $300
Generally, Dilworth's hourly rates range from $205 to $775 for
attorneys and from $100 to $155 for paralegals.
Marc A. Feller, a partner at Dilworth Paxson, assures the Court
that his firm holds no interest adverse to the Debtor or the
Debtor's estates.
About Northampton Generating
Northampton Generating Co. LP is the owner of a 112 megawatt
electric generating plant in Northampton, Pennsylvania. The plant
is fueled with waste products, including waste coal, fiber waste,
and tires. The power is sold under a long-term agreement to an
affiliate of FirstEnergy Corp.
Northampton Generating filed for Chapter 11 bankruptcy (Bankr.
W.D.N.C. Case No. 11-33095) on Dec. 5, 2011. Hillary B. Crabtree,
Esq., and Luis Manuel Lluberas, Esq., at Moore & Van Allen PLLC,
in Charlotte, N.C., serve as counsel to the Debtors. Houlihan
Lokey Capital, Inc., is the financial advisor.
The Debtor estimated assets and debts of up to $500 million. Debt
includes $73.4 million owing on senior bonds issued through the
Pennsylvania Economic Development Financing Authority.
The U.S. Trustee was unable to appoint a committee.
NORTHCORE TECHNOLOGIES: Executes New Contract Commerce Client
-------------------------------------------------------------
Northcore Technologies Inc. announced the execution of a new
contract with a social commerce client.
The customer is an innovator in the utilization of social commerce
within the wireless connectivity space.
Northcore develops solutions to support the evolving needs of
industry and provides comprehensive platforms for the management
of capital equipment and the implementation of Social Commerce
business models. These products are proven, effective and in use
by some of the world's most successful corporations.
"This customer acquisition represents a vindication of the
strength of our offering within the social commerce space," said
Amit Monga, CEO of Northcore Technologies. "We continue to pursue
opportunities in this segment with a growing, relevant
Intellectual Property portfolio and look forward to expanding our
complement of partner companies throughout 2012 and beyond."
Companies interested in effective Social Commerce solutions should
contact Northcore at 416-640-0400 or 1-888-287-7467, extension 395
or via email at Sales@northcore.com.
About Northcore
Toronto, Ontario-based Northcore Technologies Inc. (TSX: NTI; OTC
BB: NTLNF) -- http://www.northcore.com/-- provides a Working
Capital Engine(TM) that helps organizations source, manage,
appraise and sell their capital equipment. Northcore offers its
software solutions and support services to a growing number of
customers in a variety of sectors including financial services,
manufacturing, oil and gas and government.
Northcore owns 50% of GE Asset Manager, LLC, a joint business
venture with GE. Together, the companies work with leading
organizations around the world to help them liberate more capital
value from their assets.
The Company reported a net loss and comprehensive loss of
C$3.27 million for the nine months ended Sept. 30, 2011, compared
with a net loss and comprehensive loss of C$2.35 million for the
same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed
C$1.91 million in total assets, C$1.16 million in total
liabilities, and C$747,000 in total shareholders' equity.
Certain adverse conditions and events cast substantial doubt upon
the ability of the Company to continue as a going concern, the
Company said in the filing. "The Company has not yet realized
profitable operations and has relied on non-operational sources of
financing to fund operations."
OILSANDS QUEEST: Receives Court OK of C$7MM Sale of Eagles Assets
-----------------------------------------------------------------
Oilsands Quest Inc. has received approval from the Alberta Court
of Queen's Bench for the sale of the Company's non-core Eagles
Nest asset to FAMA Capital Ltd., an unrelated third party, for
C$7.0 million.
This approval follows a short Court-directed limited bidding
process, resulting in a higher sale price than previously
disclosed. The Company has signed a Purchase and Sale Agreement
with FAMA and the transaction, subject to normal closing
conditions. FAMA has also agreed to pay a deposit of C$400,000 by
Feb. 24, 2012.
Oilsands Quest continues to operate under the protection of the
Companies' Creditors Arrangement Act (Canada) with the assistance
of a Court-appointed monitor. The Company's common shares remain
suspended from trading until either a delisting occurs or until
the NYSE permits the resumption of trading.
A copy of the PSA is available for free at http://is.gd/SaH2Qb
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.
Under the Initial Order, Ernst & Young, Inc., was appointed by the
Court to monitor the business and affairs of the Oilsands
Entities. Neither of Oilsands' other subsidiaries, 1259882
Alberta, Ltd., and Western Petrochemical Corp., have filed for
creditor protection.
Oilsands Quest obtained a May 18, 2012 extension of the order
providing creditor protection under the Companies' Creditors
Arrangement Act (Canada).
OILSANDS QUEST: Incurs $4.2 Million Net Loss in Jan. 31 Quarter
---------------------------------------------------------------
Oilsands Quest Inc. filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $4.23 million for the three months ended Jan. 31, 2012,
compared with a net loss of $10.66 million for the same period a
year ago.
The Company reported a net loss of $14.54 million for the nine
months ended Jan. 31, 2012, compared with a net loss of $35.77
million for the same period during the prior year.
To date the Company has not received any revenue from any of its
natural resource properties, none of its estimated bitumen
resources have been classified as proved reserves, and the
Company's exploration and development work is capital intensive.
The Company expects that significant additional exploration and
development activities will be necessary to establish proved
bitumen reserves, and to develop the infrastructure necessary to
facilitate production from those reserves. As at Jan. 31, 2012,
the Company had working capital (excluding restricted cash) of
$1.1 million including cash and cash equivalents of $1.8 million
and a deficit accumulated during the development phase of $726.0
million.
The Company's balance sheet at Jan. 31, 2012, showed $151.41
million in total assets, $33.80 million in total liabilities and
$117.61 million in total stockholders' equity.
During the nine months ended Jan. 31, 2012, the Company expended
$11.4 million on operating activities, $2.0 million on property
and equipment and $0.5 million on funding restricted cash.
Management anticipates that the Company will be able to fund its
activities at a reduced level through June 2012 with its working
capital as at Jan. 31, 2012, and the interim DIP facility of $3.75
million available for draw-down by mid-March 2012. Accordingly,
there is substantial doubt about the Company's ability to continue
as a going concern and, without additional working capital, the
Company may not be able to maintain operations beyond June 2012.
A copy of the Form 10-Q is available for free at:
http://is.gd/bmV5CM
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.
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.
Under the Initial Order, Ernst & Young, Inc., was appointed by the
Court to monitor the business and affairs of the Oilsands
Entities. Neither of Oilsands' other subsidiaries, 1259882
Alberta, Ltd., and Western Petrochemical Corp., have filed for
creditor protection.
Oilsands Quest obtained a May 18, 2012, extension of the order
providing creditor protection under the Companies' Creditors
Arrangement Act (Canada).
OPPENHEIMER PARTNERS: Court OKs CBIZ MHM as Financial Advisor
-------------------------------------------------------------
Oppenheimer Partners Properties LLP sought and obtained permission
from the U.S. Bankruptcy Court to employ consulting firm CBIZ MHM
LLC as financial advisor.
The firm's services include:
-- assistance to the Debtor in 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; and
-- assistance to the Debtor with information and analysis
required pursuant to the Debtor's debtor in possession financing
including, but not limited to preparation for hearing regarding
the use of cash collateral and DIP financing; and
-- at the request of the Debtor, may provide additional
financial advisory services deemed appropriate and necessary to
the benefit of the Debtor's estate.
The firm's rates are:
Personnel Rates
--------- -----
Associates $150/hour
Managers $245/hour
Directors/Managing Directors $395/hour
The company attests that the firm is a "disinterested person" as
the term is defined in Section 101(14) of the Bankruptcy Code.
About Oppenheimer Partners Properties
Oppenheimer Partners Properties LLP owns and operates a 184-unit
residential apartment complex in Phoenix, Arizona. Oppenheimer
purchased the property in June 2007 for $12 million through a
combination of cash and a construction loan totaling $12.4
million. Oppenheimer filed for Chapter 11 bankruptcy (Bankr. D.
Ariz. Case No. 11-33139) on Dec. 2, 2011. Judge Sarah Sharer
Curley presides over the case. Gordon Silver's Robert C.
Warnicke, Esq., serves as the Debtor's counsel. In its petition,
the Debtor estimated $10 million to $50 million in assets and
debts. The petition was signed by Eric Hamburger, managing
partner.
Oppenheimer said it anticipates filing a plan of reorganization
that will pay creditors the full amount of their allowed claims.
OPPENHEIMER PARTNERS: Final Hearing on Cash Use Set for April 18
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona has
continued the hearing on Oppenheimer Partners Properties LLP's
motion for entry of order authoring use of cash collateral. The
Final Hearing is continued to April 18, 2012, at 11:00 a.m.
The Court on Dec. 19, 2011, entered an interim order authorizing
the Debtor to use cash collateral. The Interim Order will
continue in full force and effect and will terminate on the date
of the Final Hearing.
About Oppenheimer Partners Properties
Oppenheimer Partners Properties LLP owns and operates a 184-unit
residential apartment complex in Phoenix, Arizona. Oppenheimer
purchased the property in June 2007 for $12 million through a
combination of cash and a construction loan totaling $12.4
million. Oppenheimer filed for Chapter 11 bankruptcy (Bankr. D.
Ariz. Case No. 11-33139) on Dec. 2, 2011. Judge Sarah Sharer
Curley presides over the case. Gordon Silver's Robert C.
Warnicke, Esq., serves as the Debtor's counsel. In its petition,
the Debtor estimated $10 million to $50 million in assets and
debts. The petition was signed by Eric Hamburger, managing
partner.
Oppenheimer said it anticipates filing a plan of reorganization
that will pay creditors the full amount of their allowed claims.
PARK-OHIO INDUSTRIES: Moody's 'B2' CFR Not Impacted by FRS Deal
---------------------------------------------------------------
Moody's Investors Service said that Park-Ohio Industries Inc.'s
proposed acquisition of Fluid Routing Solutions Inc. ("FRS") is
credit neutral and will not immediately impact the company's B2
Corporate Family Rating ("CFR") or stable rating outlook. The
transaction is expected to close by the end of March 2012, and
would modestly reduce the company's liquidity position on a net
basis and increase total reported debt by roughly $60 million from
its current level. However, Moody's anticipates the company to be
able to maintain pro forma leverage (including Moody's standard
adjustments and excluding one-time charges) of close to 5x or
better over the next twelve months, including at the close of the
transaction.
Park-Ohio Industries, Inc., headquartered in Cleveland, Ohio, is
an industrial supply chain logistics and diversified manufacturing
business operating in three segments: Supply Technologies,
Aluminum Products, and Manufactured Products. Park-Ohio's revenue
for the last twelve month period ended December 31, 2011 was
approximately $967 million.
PINNACLE AIRLINES: Ted Christie Resigns as Chief Financial Officer
------------------------------------------------------------------
The Daily News reports that Ted Christie, chief financial officer
of Memphis-based Pinnacle Airlines Corp., is resigning effective
at the end of March.
According to the report, Mr. Christie is leaving the regional air
carrier as the company undergoes a critical restructuring that
could include filing for chapter 11 bankruptcy reorganization,
seeking permanent wage cuts from employees and other measures.
The report relates Mr. Christie said he is confident the
restructuring work currently under way will continue after his
departure.
The report notes that Pinnacle has short-term interim agreements
with United and Export Development Canada on the financing for
Q400 aircraft Pinnacle flies for United. Those agreements are
scheduled to expire April 2.
About Pinnacle Airlines Corp.
Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/--
a $1 billion airline holding company with 7,800 employees, is the
parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.;
and Colgan Air, Inc. Flying as Delta Connection, United Express
and US Airways Express, Pinnacle Airlines Corp. operating
subsidiaries operate 199 regional jets and 80 turboprops on more
than 1,540 daily flights to 188 cities and towns in the United
States, Canada, Mexico and Belize. Corporate offices are located
in Memphis, Tenn., and hub operations are located at 11 major U.S.
airports.
The Company reported $8.81 million on $938.05 million of total
operating revenue for the nine months ended Sept. 30, 2011,
compared with net income of $17.02 million on $729.13 million of
total operating revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed $1.53
billion in total assets, $1.42 billion in total liabilities and
$112.31 million in total stockholders' equity.
PFF BANCORP: Creditors Get Judge Go Signal to Vote on Plan
----------------------------------------------------------
Lance Duroni at Bankruptcy Law360 reports that U.S. Bankruptcy
Judge Kevin J. Carey gave creditors the go-ahead Thursday to vote
on PFF Bancorp Inc.'s liquidation plan, overruling an unsecured
creditor that complained disclosures on the plan were inadequate.
Judge Carey signed off on PFF's disclosure statement at a court
hearing, more than three years after federal regulators seized the
holding company's savings bank in the wake of the 2008 financial
crisis.
As reported in the Troubled Company Reporter on Feb. 16, 2012, PFF
Bancorp Inc. filed a proposed Chapter 11 plan of liquidation
on Feb. 8. The plan is based in part on a settlement with the
Federal Deposit Insurance Corp. where PFF will retain $18.6
million in tax refunds. Pension Benefit Guaranty Corp. will
recover 45 percent on its claims while general unsecured creditors
might see 11 percent, according to the disclosure statement
explaining the plan. Holders of trust-preferred securities are in
for a payday worth less than 1 percent.
About PFF Bancorp
PFF Bancorp Inc. -- http://www.pffbank.com/-- was a non-
diversified unitary savings and loan holding company within the
meaning of the Home Owners' Loan Act with headquarters formerly
located in Rancho Cucamonga, California. Bancorp is the direct
parent of each of the remaining Debtors.
Prior to filing for bankruptcy, Bancorp was also the direct parent
of PFF Bank & Trust, a federally chartered savings institution,
and said bank's subsidiaries. PFF Bank & Trust was taken over by
regulators in November 2008, with the deposits transferred by the
Federal Deposit Insurance Corp. to U.S. Bank NA.
PFF Bancorp Inc. and its affiliates sought Chapter 11 protection
on Dec. 5, 2008 (Bankr. D. Del. Case No. 08-13127 to
08-13131). Chun I. Jang, Esq., and Paul N. Heath, Esq., at
Richards, Layton & Finger, P.A., serve as the Debtors' bankruptcy
counsel. Kurtzman Carson Consultants LLC serves as the Debtors'
claims agent. Jason W. Salib, Esq., at Blank Rome LLP, represents
the official committee of unsecured creditors as counsel.
PIONEER NATURAL: Fitch Rates $1.25-Bil. Sr. Facility at 'BB+'
-------------------------------------------------------------
Fitch Ratings has assigned an initial 'BB+' Issuer Default Rating
(IDR) to Pioneer Natural Resources Co. (PXD) and has also assigned
'BB+' ratings to the company's publicly issued senior unsecured
notes and its $1.25 billion senior unsecured revolving credit
facility. The Rating Outlook is Positive.
Pioneer's ratings are supported by the company's long-lived
onshore reserve base, strong recent operating performance, and
expiration of volumetric production payments (VPPs). Concerns
include a rapidly increasing capital spending program and
uncertainty about how it would be funded or whether it would be
reduced in a lower oil price scenario.
The Positive Outlook reflects the positive production outlook,
continued cash flow and liquidity support stemming from the
company's very sizable hedging program, and the company's
demonstrated willingness to protect its balance sheet by issuing
equity.
While nearly all credit metrics have improved due to improved
operational performance at the company and as a result of high
liquids prices, continued execution on management's 2012 guidance
would need to be seen for positive future rating action.
Continued improvements in debt metrics (especially debt/flowing
barrel of production) could be catalysts for future positive
rating action.
Credit metrics continue to improve as of Dec. 31, 2011 reflecting
reduced debt levels, strong cash flow generation and improving
levels of EBITDAX (earnings before interest, taxes, depreciation,
amortization and exploration expense) stemming from higher
commodity price realizations and the company's vertical
integration efforts which are helping to reduce well costs.
Looking forward, Fitch expects Pioneer to benefit from existing
hedges, increasing production levels and VPP amortizations. While
FCF is expected to be negative in 2012 (including the recent $297
million acquisition of Carmeuse Industrial Sands), debt levels
should remain stable as the company is working to reinvest the
proceeds from the company's fourth quarter $500 million equity
issuance.
Capital expenditures are increasing rapidly based on recent
drilling success, acceleration in the Horizontal Wolfcamp Shale
and management's expectation of $100 West Texas Intermediate (WTI)
oil prices in 2012. Also, the capital expenditure carry provided
by Reliance in the Eagle Ford Shale joint venture is expected to
run out at the end of 2012.
While production growth and hedges should support cash flows to
fund this program in a lower oil price scenario, it is important
to note that most of the company's oil hedges are three way
collars that will not provide support until WTI prices fall below
approximately $85 per barrel. Fitch would expect beyond 2012 that
Pioneer would be at least FCF neutral, or if negative that funding
deficits would be covered by asset sales or equity issuances.
For the latest 12 months (LTM) ending Dec. 31, 2011, Pioneer's
EBITDAX was $1.67 billion which resulted in interest coverage of
8.5 times (x) and leverage, as measured by debt-to-EBITDAX, of
1.5x. While debt/boe (barrels of oil equivalent) of proven
reserves and proven developed reserves (PDP) remain very strong
for the rating category, Debt/flowing barrel of production is a
more important metric for Pioneer given its extended reserve life,
which is in line with the current rating category.
Pioneer maintains liquidity from cash and equivalents ($537.5
million at Dec. 31, 2011); its $1.25 billion credit facility due
March 2016 (no outstanding borrowings and $65.1 million of un-
drawn letters of credit); and operating cash flows of $1.5 billion
during the LTM period which are supported by significant hedge
positions.
Current maturities are minimal; however, the company may be
required to purchase the $479.9 million of 2.875% convertible
senior notes on Jan. 15, 2013. Alternatively note holders may
convert the notes during any calendar quarter if the closing price
of the Common Stock for at least 20 of the last 30 trading days
during the immediately previous quarter is more than 130% of the
Base Conversion Price (initially $72.60 per share). This
conversion option is not available in the first quarter of 2012,
but it did trigger in the second quarter of 2011.
In addition, since Fitch includes 100% of VPP balances in the
debt calculations, debt levels will fall associated with VPP
amortizations going forward. Total VPP obligations at Dec. 31,
2011 were $42.1 million.
Additional liquidity is available to the company as a result of
Pioneer Southwest. The presence of the master limited partnership
(MLP) benefits the parent company because of its ability to 'drop
down' or sell assets to the MLP and the existence of a $300
million revolving credit facility at the MLP to finance these
purchases. Note that the MLP currently has $32 million of
outstanding borrowings on the facility. Additionally, Pioneer has
the ability to sell additional units in the MLP to the public to
raise additional capital without diluting Pioneer shareholders.
Pioneer reduced its stake in the LP units from 61.9% to 52.4% in
2011 for net proceeds of $123.0 million, while retaining the 0.1%
GP units.
Liquidity remains strong at Pioneer, and the company remains in
compliance with all debt covenants. All of Pioneer's borrowings
have covenants, with the most restrictive covenants being
associated with the company's senior unsecured credit facility.
Pioneer's new $1.25 billion senior unsecured credit facility
contains a total debt-to-book capitalization maximum of 60%.
POPULAR INC: Moody's Issues Summary Credit Opinion
--------------------------------------------------
Moody's Investors Service issued a summary credit opinion on
Popular Inc. and includes certain regulatory disclosures regarding
its ratings. This release does not constitute any change in
Moody's ratings or rating rationale for Popular Inc. and its
affiliates.
Moody's current ratings on Popular Inc. and its affiliates are:
Senior Unsecured MTN Program (domestic currency) ratings of
(P)Ba1
Subordinate MTN Program (domestic currency) (P) ratings of Ba2
Preferred Stock Non-cumulative (domestic currency) ratings of
B2; (hyb)
Senior Unsecured Shelf (domestic currency) ratings of (P)Ba1
Subordinate Shelf (domestic currency) ratings of (P)Ba2
Junior Subordinate Shelf (domestic currency) ratings of (P)B1
Preferred Shelf (domestic currency) ratings of (P)B2
Popular International Bank, Inc.
BACKED Senior Unsecured Shelf (domestic currency) ratings of
(P)Ba1
BACKED Subordinate Shelf (domestic currency) ratings of (P)Ba2
Popular North America, Inc.
BACKED Senior Unsecured (domestic currency) ratings of Ba1
BACKED Senior Unsecured MTN Program (domestic currency) ratings
of (P)Ba1
BACKED Subordinate MTN Program (domestic currency) ratings of
(P)Ba2
BACKED Senior Unsecured Shelf (domestic currency) ratings of
(P)Ba1
BACKED Subordinate Shelf (domestic currency) ratings of (P)Ba2
Popular North America Capital Trust II
BACKED Preferred Shelf (domestic currency) ratings of (P)B1
Popular North America Capital Trust III
BACKED Preferred Shelf (domestic currency) ratings of (P)B1
Popular Capital Trust I
BACKED Preferred Stock (domestic currency) ratings of B1; (hyb)
BACKED Preferred Shelf (domestic currency) ratings of (P)B1
Popular Capital Trust II
BACKED Preferred Stock (domestic currency) ratings of B1; (hyb)
BACKED Preferred Shelf (domestic currency) ratings of (P)B1
Popular Capital Trust III
BACKED Preferred Shelf (domestic currency) ratings of (P)B1
Popular Capital Trust IV
BACKED Preferred Shelf (domestic currency) ratings of (P)B1
RATINGS RATIONALE
Moody's assigns a standalone bank financial strength rating (BFSR)
of D+ to Banco Popular de Puerto Rico, the lead bank subsidiary of
Puerto Rico-based Popular, Inc. (Popular, Inc. and its
subsidiaries are referred to collectively hereafter as "Popular".)
The D+ standalone BFSR corresponds to a baseline credit assessment
(BCA) of Baa3. Given Popular's dominant market position in Puerto
Rico, together with the island's physical isolation and political
importance, Moody's believes that the lead bank benefits from some
probability of systemic support in the event it is needed.
However, at Popular's current standalone rating level, the low
probability of support that Moody's ascribes to the bank does not
result in any ratings lift. Therefore, Popular's long-term deposit
rating is equal to its BCA of Baa3. No systemic support is
factored into the ratings of the holding company, which is rated
Ba1 for senior debt.
Popular's D+ standalone BFSR reflects the continued asset quality
challenges it faces in Puerto Rico. Like most of the other banks
on the island, Popular's financial fundamentals have been severely
affected by the ongoing local recession, which began in 2006.
Although Moody's expects a modest improvement in the Puerto Rico
economy in 2012, Popular's credit costs, arising principally from
its island-based and mainland commercial portfolios and its
mainland residential mortgage portfolio, will likely remain
elevated. The standalone rating also incorporates the strength of
Popular's leading Puerto Rican direct banking franchise and its
healthy capital position. Popular is the largest commercial bank
in Puerto Rico by a significant margin, and it commands a leading
market position in many deposit and loan products that serve both
retail and commercial customers.
Rating Outlook
The outlook on Popular and its subsidiaries is negative,
reflecting the risk that a longer, deeper recession in Puerto Rico
would put additional pressure on the company's financial
fundamentals.
What Could Change the Rating - Up
Moody's sees little possibility of an upgrade in the near- to
medium-term given the negative outlook. Over time, Popular would
have to show sustained improvement in its asset quality and
profitability metrics while maintaining strong capital ratios for
positive rating pressure to emerge.
What Could Change the Rating - Down
A lack of sustainable improvement in Popular's asset quality could
result in negative rating pressure. This is reflected in the
negative outlook.
The methodologies used in these ratings were Bank Financial
Strength Ratings: Global Methodology published in February 2007,
Incorporation of Joint-Default Analysis into Moody's Bank Ratings:
A Refined Methodology published in March 2007, and Moody's
Guidelines for Rating Hybrid Securities and Subordinated Debt
published on November 2009.
PRETIUM PACKAGING: Moody's Lowers Corp. Family Rating to 'Caa1'
---------------------------------------------------------------
Moody's Investors Service downgraded the corporate family and
probability of default ratings of Pretium Packaging LLC to Caa1
from B3. Moody's also downgraded the $150 million senior secured
notes due 2016 to Caa1 from B3. The ratings outlook is stable. The
downgrade reflects Pretium's weak credit metrics, negative free
cash flow and deterioration in operating margin due to weaker than
expected volume growth and delays in passing through raw material
cost increases.
Moody's took the following rating actions:
-- Downgraded CFR to Caa1 from B3
-- Downgraded PDR to Caa1 from B3
-- Downgraded $150 million senior secured notes due 2016 to
Caa1 (LGD 4 -57%) from B3 (LGD 4-56%).
-- Assigned SGL-3 speculative grade liquidity rating.
The ratings outlook is stable.
Ratings Rationale
The Caa1 corporate family rating reflects Pretium's weak adjusted
credit metrics, relatively small size and scale, a largely
commoditized product line and adequate liquidity. Pretium's pro
forma adjusted leverage (including Moody's standard adjustments
which includes the addition of preferred stock to debt) is above
8.5 times and EBIT/Interest coverage is below 0.5 times for the
twelve months ended December 31, 2011. With most restructuring
activity related to the 2010 acquisition of Novapak completed, the
company is focusing on new product development and new customer
wins. Nevertheless, ramp up of new business has been slower than
expected and Moody's does not expect a significant improvement in
demand over the intermediate term, while resin volatility is
likely to continue to negatively impact Pretium's operating
results. In addition, Moody's does not expect significant
improvement in leverage and interest coverage due to the company's
Class A preferred equity with cumulative dividends (non-cash).
The rating is supported by Pretium's long-term relationships with
customers, large percentage of business under contracts with raw
material cost pass-throughs and high percentage of sales from more
stable end markets. Despite its small size, Pretium occupies a
niche business in the rigid plastic packaging industry, primarily
servicing clients with small to medium annual volume requirements.
Pretium has a high exposure to the less cyclical food and beverage
(39% of year-to-date sales) and pharmaceuticals (14% of sales) end
markets.
The stable rating outlook reflects Moody's expectations that
Pretium will maintain adequate liquidity and its credit metrics
are likely to remain weak but are unlikely to meaningfully
deteriorate over the next 12 to 18 months.
The rating could be downgraded if liquidity deteriorates and free
cash flow to debt remains negative and there is significant
deterioration in the operating and competitive environment.
The rating could be upgraded if the EBIT margin improves to mid-
single digits, free cash flow to debt improves above low single
digits, adjusted debt-to-EBITDA declines below 6.8 times, and
EBIT/Interest improves above 1.0x times.
The principal methodology used in rating Pretium was the Global
Packaging Manufacturers: Metal, Glass, and Plastic Containers
Industry Methodology published in June 2009. Other methodologies
used include Loss Given Default for Speculative-Grade Non-
Financial Companies in the U.S., Canada and EMEA published in June
2009.
Headquartered in Chesterfield, Missouri, Pretium Packaging LLC is
a manufacturer of rigid plastic containers for food,
pharmaceuticals, personal care and household products. Pretium's
sales totaled approximately $238 million in the twelve months
ended December 31, 2011.
PROTECTION ONE: S&P Lowers Corporate Credit Rating to 'B'
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Romeoville, Ill.-based Protection One Alarm Monitoring
Inc. to 'B' from 'B+'. The outlook is stable. "We subsequently
withdrew the rating on Protection One Alarm Monitoring Inc. At the
same time, we assigned our 'B' corporate credit rating to parent
Protection One Inc. The outlook is stable," S&P said.
"The company is paying a debt-financed dividend to shareholders
that will increase leverage from about 5.0x to about 6.5x. Upon
closing of this transaction, the existing debt will be refinanced
and we will withdraw the rating," S&P said.
"At the same time, we assigned a preliminary 'B+' issue rating
with a preliminary recovery rating of '2' to the company's $25
million senior secured revolving credit facility and $520 million
first-lien term loan. The '2' recovery rating indicates our
expectation for meaningful (70%-90%) recovery for lenders in the
event of payment default," S&P said.
"The rating on Protection One reflects our view that the company's
'highly leveraged' financial risk profile and modest cash flows
are likely to preclude sustained de-leveraging," said Standard &
Poor's credit analyst Katarzyna Nolan. "We consider the company's
business risk profile 'weak', reflecting its limited scale
compared with its largest competitor, and the fact that its
revenue has only recently stabilized."
"The stable rating outlook incorporates our expectations that the
company's diversified customer base and revenue visibility will
support consistent operating profitability. An upgrade in the near
term is unlikely given our modest growth assumptions and
expectations that the company's cash flows will preclude
significant de-leveraging over this period," S&P said.
"We may lower the rating if increased attrition rates lead to a
deterioration in cash flows or if customer creation costs
increase, such that leverage remains above 7x on a sustained
basis," S&P said.
PRECISION OPTICS: Grants 200,200 Stock Options to D&Os
------------------------------------------------------
The Board of Directors of Precision Optics Corporation, Inc.,
granted options to purchase common stock of the Company to its
Directors and Officers. Following the longstanding policy of the
Company and consistent with the terms of the Company's qualified
stock option plans, the options were granted with an exercise
price set at the price of the Company's stock at the close of
business on the grant date.
After the Board approved these grants, but before the market
closed on Feb. 9, 2012, a trade occurred in the Company's stock
resulting in a closing stock price of $0.55, which was
significantly lower than recent historical and subsequent market
prices, and lower than originally anticipated by the Board of
Directors in regards to the stock option grants.
In order to recover the original intent of the Board of Directors,
each of the Directors and Officers to whom options were granted on
Feb. 9, 2012, agreed to cancel the options granted on that day and
to accept an equal number of replacement options granted on
March 2, 2012, with an exercise price of $1.20, which was the
closing stock price on the replacement grant date.
As a result, on March 2, 2012, the Board granted these options:
-- 7,600 options to Joel Pitlor, for his service on the Board
of Directors
-- 7,600 options to Richard Miles, for his service on the Board
of Directors
-- 20,000 options as compensation for services provided to the
Company, and 7,600 for his prior service on the Board of
Directors, to Donald Major.
-- 150,000 to Dr. Joseph Forkey, as compensation for services
provided to the Company.
-- 15,000 to Jack Dreimiller, as compensation for services
provided to the Company.
About Precision Optics
Headquartered in Gardner, Massachusetts, Precision Optics
Corporation, Inc., has been a developer and manufacturer of
advanced optical instruments since 1982. The Company designs and
produces high-quality micro-optics, medical instruments and other
advanced optical systems. The Company's medical instrumentation
line includes laparoscopes, arthroscopes and endocouplers and a
world-class product line of 3-D endoscopes for use in minimally
invasive surgical procedures.
The Company reported a net loss of $1.05 million for the fiscal
year ended June 30, 2011, compared with a net loss of $660,882 in
the preceding year.
Precision Optics' balance sheet at Dec. 31, 2011, showed $1.67
million in total assets, $501,023 in total liabilities, all
current, and $1.17 million in total stockholders' equity.
As reported in the TCR on Sept. 27, 2010, Stowe & Degon LLC, in
Westborough, Mass., expressed substantial doubt about Precision
Optics' ability to continue as a going concern, following the
Company's results for the fiscal year ended June 30, 2010. The
independent auditors noted that the Company has suffered recurring
net losses and negative cash flows from operations.
PRESSURE BIOSCIENCES: Nasdaq Panel OKs Continued Listing Request
----------------------------------------------------------------
Pressure BioSciences, Inc., received notice that the NASDAQ
Listing Qualifications Panel has granted the Company's request for
continued listing on The NASDAQ Capital Market pursuant to a
further extension and subject to, among other things, the
Company's demonstration of compliance with the applicable minimum
stockholders' equity requirement of $2.5 million by March 23,
2012, and the Company's compliance with the minimum bid price
requirement of $1.00 per share for a minimum of ten consecutive
business days by April 9, 2012.
While the Company is working toward regaining compliance with all
applicable requirements for continued listing on The NASDAQ
Capital Market, including both the minimum stockholders' equity
and bid price requirements, there can be no assurance that the
Company will be able to demonstrate compliance by the deadlines
set forth above or that the Panel will grant the Company another
extension in the event compliance is not timely achieved.
About Pressure BioSciences
Pressure BioSciences, Inc., is focused on the development,
marketing, and sale of proprietary laboratory instrumentation and
associated consumables based on Pressure Cycling Technology. PCT
is a patented, enabling technology platform with multiple
applications in the estimated $6 billion life sciences sample
preparation market. PCT uses cycles of hydrostatic pressure
between ambient and ultra-high levels to control bio-molecular
interactions. PBI currently focuses its efforts on the
development and sale of PCT-enhanced sample preparation systems
(instruments and consumables) for forensics, biomarker discovery,
bio-therapeutics characterization, vaccine development, soil and
plant biology, histology, and counter-bioterror applications.
QIMONDA AG: Judge Dismisses IP Suit Against LSI
-----------------------------------------------
Django Gold at Bankruptcy Law360 reports that U.S. District Judge
James R. Spencer on Wednesday tossed Qimonda AG's suit accusing
LSI Corp. of infringing a series of semiconductor patents, saying
the Company lost its standing to sue when it transferred its
interests to an insolvency administrator.
Judge Spencer dismissed Qimonda's case after finding that the
Munich-based technology company, which entered insolvency
proceedings after filing its infringement suit against LSI, no
longer was able to pursue its action now that its intellectual
property assets are controlled by the administrator, according to
Law360.
About Qimonda AG
Qimonda AG (NYSE: QI) -- http://www.qimonda.com/-- was a global
memory supplier with a diversified DRAM product portfolio. The
Company generated net sales of EUR1.79 billion in financial year
2008 and had -- prior to its announcement of a repositioning of
its business -- roughly 12,200 employees worldwide, of which
1,400 were in Munich, 3,200 in Dresden and 2,800 in Richmond, Va.
Qimonda AG commenced insolvency proceedings in a local court in
Munich, Germany, on Jan. 23, 2009. On June 15, 2009, QAG filed
a petition (Bankr. E.D. Va. Case No. 09-14766) for relief under
Chapter 15 of the U.S. Bankruptcy Code.
Qimonda North America Corp., an indirect and wholly owned
subsidiary of QAG, is the North American sales and marketing
subsidiary of QAG. QNA is also the parent company of Qimonda
Richmond LLC. QNA and QR sought Chapter 11 protection (Bankr.
D. Del. Case No. 09-10589) on Feb. 20, 2009. Mark D. Collins,
Esq., Michael J. Merchant, Esq., and Lee E. Kaufman, Esq., at
Richards Layton & Finger PA, in Wilmington Delaware; and Mark
Thompson, Esq., Morris J. Massel, Esq., and Terry Sanders, Esq.,
at Simpson Thacher & Bartlett LLP, in New York City, represented
the Debtors as counsel. Roberta A. DeAngelis, the United States
Trustee for Region 3, appointed seven creditors to serve on an
official committee of unsecured creditors. Jones Day and Ashby &
Geddes represented the Committee. In its bankruptcy petition,
Qimonda Richmond, LLC, estimated more than US$1 billion in assets
and debts. The information, the Chapter 11 Debtors said, was
based on QR's financial records which are maintained on a
consolidated basis with QNA.
In September 2011, the Chapter 11 Debtors won confirmation of
their Chapter 11 liquidation plan which projects that unsecured
creditors with claims between US$33 million and US$35 million
would have a recovery between 6.1% and 11.1%. No secured claims
of significance remained.
QUALITY DISTRIBUTION: Equity Offering No Effect on Moody's B3 CFR
-----------------------------------------------------------------
Moody's Investors Service said Quality Distribution, Inc.'s
announced public offering of approximately 5 million shares of its
common stock on March 5, 2011 is a credit positive but does not
affect Quality's ratings including its B3 corporate family rating
("CFR") or the stable outlook. The SGL-3 liquidity rating remains
unchanged. The company will receive proceeds from 2.5 million of
the 5 million shares as the other 2.5 million shares is being
offered for resale by Apollo Management, L.P. Although the longer
term use of proceeds appears to be primarily for acquisitions and
possibly some permanent debt pay-down, Moody's notes that the
near-term reduction of borrowings under the company's ABL facility
is a credit positive.
Quality Distribution, LLC and its parent holding company, Quality
Distribution, Inc., are headquartered in Tampa, Florida. The
company is a transporter of bulk liquid and dry bulk chemicals. In
2011, Quality entered the gas and oil frac shale energy markets,
providing logistics services to these markets. The company's
fiscal year ended December 31, 2011 revenues totaled $746 million.
Apollo Management, L.P. owns roughly 33% of the common stock of
Quality Distribution, Inc. prior to the March 2012 public equity
offering.
RACE POINT: Moody's Affirms 'Ba2' Rating; Outlook Stable
--------------------------------------------------------
Moody's Investors Service has affirmed the Ba2 rating for Race
Point Power. The rating outlook is stable. The Borrower actually
consists of four individual holding company Borrowers that are the
indirect owners of equity interests in a portfolio of power
projects in the US and Spain. The Borrowers are Race Point Power
II LLC, Race Point Power III LLC and Race Point Power IV LLC and
NeoElectra Lux S.ar.l.
Ratings Rationale
The rating affirmation follows the recent sale of the Hobbs (Lea
Power) and Waterside assets to FREIF North American Power I LLC
(FREIF North American; senior secured rated Ba3, stable outlook),
Race Point Power (RPP) holding company debt is anticipated to fall
by approximately 51% while total consolidated debt will fall by
approximately 65%, since the project-level debt associated with
Hobbs and Waterside will move with the assets to the FREIF North
American portfolio.
The significant de-leveraging of the portfolio on a consolidated
basis after the asset sale results in improved financial metrics
and moderate overall leverage going forward. However, in Moody's
view this deleveraging and improved financial metrics are offset
by reduced diversify of cash flow sources. The additional cash
flow concentration from NeoElectra exposes RPP to event risk in
light of the current economic and fiscal environment in Spain. The
Ba2 rating category incorporates the view that RPP can withstand a
possible moderate adjustment in the tariff. Moody's will continue
to monitor developments in the Spanish regulated tariff regime and
its potential impact on the NeoElectra assets.
The cash flows from Hobbs provided the RPP portfolio with
diversification benefits, particularly since NeoElectra, which
consists of a portfolio of 11 Spanish natural gas-fired
cogeneration facilities and 1 biomass facility, was the single
largest contributor of cash flows to the holding company. With the
sale of Hobbs from the portfolio, distributions to RPP are now
more reliant upon NeoElectra cash flows, which will now make up
approximately 69% of total distributions versus approximately 52%
prior to the sale.
The NeoElectra assets benefit from the special tariff regime,
which provides the plants with a regulated tariff rate set by the
Spanish government. Under the special tariff regime, the Spanish
government sets specific installed generation targets and subsidy
mechanisms for different categories of cogeneration and renewable
power production facilities. Since its implementation, the
installed capacity for cogeneration and biomass have failed to
meet those targets, while solar and wind have exceeded their
targets. In the context of Spain's current economic condition and
government austerity programs, the regulatory environment
continues to develop and presents an event risk to the NeoElectra
assets, particularly if the regulated tariff is cut, as was done
for solar and wind generation plants at the end of 2010.
The stable outlook reflects the expectation that the portfolio of
projects will generate relatively stable and predictable cash
flows, since the cash flows are derived from long term contracts
with largely investment grade counterparties. The outlook also
assumes the near term stability in the credit quality of the
project off-takers and anticipates that the projects will continue
to be operated in a manner that allows them to perform as
expected.
The last rating action on RPP was taken on December 16, 2010, when
Moody's affirmed the Ba2 rating.
The principal methodology used in this rating was Power Generation
Projects published in December 2008.
Race Point Power is a portfolio that consists of 6 power
generation investments with a total of 17 power plants located in
the US and Spain. The portfolio is composed of approximately 735
MWs of total combined generation capacity, with net ownership of
458 MWs of generation capacity. The assets are located in Maine,
Michigan, Nevada, Pennsylvania, Texas, and various regions across
Spain.
RENEGADE HOLDINGS: Attorneys General Object to Exit Plan
--------------------------------------------------------
Richard Craver at Winston-Salem Journal reports that a group of
state attorneys general have filed an objection to the proposed
bankruptcy exit plan by Renegade Holdings Inc., Renegade Tobacco
Co. and Alternative Brands Inc.
The report notes the objection will be heard at a hearing at 9:30
a.m. March 13 at the U.S. Bankruptcy Court in Greensboro. The
bankruptcy exit plan also could be heard at that time.
According to the report, bankruptcy trustee Peter Tourtellot filed
a reorganization plan on Jan. 30 that could enable the three
companies emerge from Chapter 11 protection as early as late this
month. The plan would remove Calvin Phelps, who is involved in a
criminal investigation, as their owner and from any investor and
operational role.
The report says an escrow dispute involving the National
Association of Attorneys General has become a big legal hurdle.
The report relates that the plan calls for the companies'
financial obligations to be paid within four years of their exit
from bankruptcy. The attorneys general of 16 states claim
Renegade Holdings owes them a delinquent escrow amount of
$16.7 million. Mr. Tourtellot said in the plan that the amount
is $7.93 million.
The report says the states are listed as the first priority of the
creditors' fund once federal and state excise taxes of about
$870,000 are paid. In the objection, North Carolina is listed as
claiming $344,034 in escrow payments due. Mr. Tourtellot is
objecting to $150,035 of that amount.
About Renegade Holdings
Renegade Holdings and two subsidiaries -- Alternative Brands, Inc.
and Renegade Tobacco Company -- filed for Chapter 11 protection
(Bankr. M.D.N.C. Lead Case No. 09-50140) on Jan. 28, 2009, and
exited bankruptcy on June 1, 2010. They were put back into
bankruptcy July 19, 2010, when Judge William L. Stocks vacated the
reorganization plan, in part because of a criminal investigation
of owner Calvin Phelps and the companies regarding what
authorities called "unlawful trafficking of cigarettes."
Alternative Brands is a federally licensed manufacturer of tobacco
products consisting primarily of cigarettes and cigars. Renegade
Tobacco distributes the tobacco products produced by ABI through
wholesalers and retailers in 19 states and for export. ABI also
is a contract fabricator for private label brands of cigarettes
and cigars which are produced for other licensed tobacco
manufacturers.
The stock of RHI is owned indirectly by Calvin A. Phelps through
his ownership of the stock of Compliant Tobacco, LLC which, in
turn, owns all of the stock of RHI which in turn owns all of the
stock of RTC and ABI. Mr. Phelps was the chief executive officer
of all three companies. All three of the Debtors' have their
offices and production facilities in Mocksville, North Carolina.
In August 2010, the Bankruptcy Court approved the appointment of
Peter Tourtellot, managing director of turnaround-management
company Anderson Bauman Tourtellot Vos & Co., as Chapter 11
trustee.
Gene Tarr also has been appointed as bankruptcy examiner.
SAND SPRING: Hearing for Equity Committee Appointment on March 22
-----------------------------------------------------------------
The U.S. Bankruptcy Court will consider the motion of Sand Spring
Capital III, LLC's Ad Hoc Committee of Equity Security Holders for
the appointment of an official committee of security holders on
March 22, 2012.
As reported in the Troubled Company Reporter on March 7, 2012, the
Ad Hoc Committee wants to have an official committee of security
holders to ensure that all equity holders' interest are adequately
represented in the Chapter 11 cases.
The Ad Hoc Committee is represented by Stuart M. Brown, Esq., and
R. Craig Martin, Esq., of DLA Piper LLP.
Sand Spring Capital III, LLC, filed a Chapter 11 petition
(Bankr. D. Del. Case No. 11-13393) on Oct. 25, 2011 in Delaware.
Affiliates, Sand Spring Capital III, LLC, CA Core Fixed Income
Fund, LLC, CA Core Fixed Income Offshore Fund, Ltd., CA High Yield
Fund, LLC, CA High Yield Offshore Fund, Ltd., CA Strategic Equity
Fund, LLC, CA Strategic Equity Offshore Fund, Ltd., Sand Spring
Capital III, Ltd., Sand Spring Capital III Master Fund, LLC,
sought Chapter 11 protection on the same day.
Sand Spring Capital III LLC disclosed $4,882,373 in assets and
$4,140 in liabilities. CA Core Fixed Income Fund LLC disclosed
$36,176,682 in assets and $48,244 in liabilities. CA Core Fixed
Income Offshore Fund Ltd. disclosed $6,900,726 in assets and
$10,393 in liabilities. CA High Yield Fund LLC disclosed
$5,626,644 in assets and $11,568 in liabilities. CA High Yield
Offshore Fund, Ltd. disclosed $10,840,032 in assets and $22,785 in
liabilities. CA Strategic Equity Fund LLC scheduled $2,013,461 in
assets and $0 debt. CA Strategic Equity Offshore Fund Ltd.
disclosed $2,285,492 in assets and $0 debts. Sand Spring Capital
III Ltd. disclosed $2,214,099 in assets and $1,820 in debts. Sand
Spring Capital III Master Fund LLC disclosed $7,096,473 in assets
and $0 in debts.
SAHARA TOWNE: Files for Chapter 11 in Las Vegas
-----------------------------------------------
Sahara Towne Square, LLC, filed a Chapter 11 petition (Bankr. D.
Nev. Case No. 12-12537) in its hometown in Las Vegas on March 7.
A meeting of creditors under 11 U.S.C Sec. 341(a) will be held on
April 19, 2012 at 1:00 p.m.
Sahara Towne, which claims to be a Single Asset Real Estate under
11 U.S.C. Sec. 101(51B), disclosed $13.79 million in total assets
and $9.59 million in total liabilities in its schedules.
The Debtor says it owns a property located at 2520 & 2650 S.
Maryland Parkway, in Las Vegas, worth $13.27 million in assets.
The property serves as collateral for a $9.58 million debt to U.S.
Bank National Association.
A copy of the schedules attached to the Chapter 11 petition is
available for free at:
http://bankrupt.com/misc/Sahara_Towne_SAL.pdf
SCI REAL ESTATE: Liquidating Plan Outline Hearing Set for March 14
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
will convene a hearing on March 14, 2012, at 9:30 a.m. to consider
the adequacy of the disclosure statement explaining the Joint
Chapter 11 Plan of Liquidation filed by SCI Real Estate
Investments, LLC, Secured California Investments, Inc., and the
Official Committee of Unsecured Creditors.
The Plan, dated Feb. 3, 2012, contemplates the liquidation of all
of the Debtors' assets and the distribution of the proceeds of the
liquidation to holders of allowed claims. It also provides for
the substantive consolidation of the two Debtors into a single
entity.
A liquidating trust will be established under the Plan. William
Hoffman will be the initial liquidating trustee.
The designated claims and interests under the Plan are:
* Class 1 Secured Claims of Collateralized Parties pursuant to
2009 Pledge and Security Agreements re Loan and Placement
Agreements entered from 2003 to 2009, scheduled for
approximately $7.44 million.
* Class 2 Secured Claims of Collateralized Parties re SCIGG
Mezzanine Fund I, LLC, scheduled for approximately $10.8
million.
* Class 3 Claims for wages under Section 507(a)(4) of the
Bankruptcy Code, estimated to total $23,500.
Estimated recovery for Classes 1 and 2 is 100% for the allowed
secured amounts and for Class 3, is also 100%.
* Class 4 General Unsecured Claims, which will be paid on a pro
rata basis depending on the availability of funds. Estimated
recovery for Class 4 Claims is currently unknown.
* Class 5 Membership Interests in the Debtors, which will all be
cancelled on the Effective Date.
All allowed administrative claims and priority tax claims will
also be paid in full on the Plan Effective Date unless other
treatment is agreed to by the parties-in-interest.
A full-text copy of the Feb. 3 Plan of Liquidation is available
for free at:
http://bankrupt.com/misc/SCIREALESTATE_DSFeb3.PDF
R. Norwood Responds
Robert S. Norwood complains that the language in the Disclosure
Statement and Plan as it relates to the Debtors' belief that the
Liens held by Holders of Class 2 Claims are subject to avoidance
under Chapter 5 of the Bankruptcy Code, (1) is vague and (2) does
not impart sufficient information as to the factual basis for the
said avoidance, and under what specific section of Chapter 5 the
Debtors/Liquidating Trustee would proceed.
Mr. Norwood emphasizes that disclosure of this information is
vital for him, and those similarly situated, in order to cast an
"informed vote" on confirmation of the Plan.
Mr. Norwood says he is an interested party by virtue of an
investment made with SCIGG Mezzanine Fund I, LLC in July 2008.
Norwood's claim is scheduled by the Debtors for $54,958 and is
classified as Class 2 claim under the Plan.
About SCI Real Estate Investments
Los Angeles, California-based SCI Real Estate Investments,
LLC, filed for Chapter 11 bankruptcy protection (Bankr. C.D.
Calif. Case No. 11-15975) on Feb. 11, 2011. Jeffrey W. Dulberg,
Esq., at Pachulski Stang Ziehl & Jones LLP, serves as the Debtor's
bankruptcy counsel. Haskell & White LLP as accountant. Kennerly,
Lamishaw & Rossi LLP as special real estate counsel. The Debtor
disclosed $55,431,222 in assets and $69,514,028 in liabilities as
of the Chapter 11 filing.
Peter C. Anderson, the U.S. Trustee for Region 16, appointed three
members to the official committee of unsecured creditors in the
Chapter 11 cases of SCI Real Estate Investments. Levene, Neale,
Bender, Yoo & Brill L.L.P., represents the Committee as its
general bankruptcy counsel.
SELECT TREE FARMS: Files for Chapter 11 in Buffalo, New York
------------------------------------------------------------
Select Tree Farms, Inc., filed a Chapter 11 petition (Bankr.
W.D.N.Y. Case No. 12-10669) on March 7, 2012.
Select Tree Farm on the Petition Date filed a motion to use cash
collateral. Exhibits to the motion include a forbearance
agreement, an 8-week cash projection and an asset loan schedule.
The Debtor estimated assets of $10 million to $50 million and
debts of up to $10 million.
The Debtor's owner, George A. Schichtel, filed for Chapter 11
bankruptcy on the same day (Bankr. W.D.N.Y. Case No. 12-10670).
The resolution authorizing the bankruptcy filing says the Debtor
is authorized to open DIP bank accounts with Bank of America or
Wells Fargo Bank.
The list of unsecured creditors says Evans Bank, N.A., has a
$2.08 million claim, of which $218,500 is secured. Disputed
claims include a $1.50 million claim by KCK Farms, LLC, and $1.12
claimed by J. Frank Schmidt & Son Co.
STANADYNE CORP: S&P Affirms 'CCC+' Corporate Credit Rating
----------------------------------------------------------
Standard & Poor's Ratings Services revised its long-term outlook
to negative from stable on Windsor, Conn.-based Stanadyne Corp. At
the same time, Standard & Poor's affirmed its ratings, including
the 'CCC+' corporate credit rating, on Stanadyne.
"The outlook revision reflects the risk that Stanadyne may not be
able to service debt obligations of its parent, Stanadyne Holdings
Inc. as early as August 2012," said Standard & Poor's credit
analyst Dan Picciotto.
"Pay-in-kind notes that Stanadyne Holdings issued in 2004 turned
cash-pay in February 2010, resulting in an additional $12 million
of annual cash interest expense--a meaningful amount. To make
these payments, the company will need a dividend from its
operating company, Stanadyne Corp," S&P said.
"Stanadyne's ability to upstream dividends to its parent is
governed by a restricted payment basket that depends on Stanadyne
Corp.'s net income generation, and we are uncertain whether the
company will generate sufficient profit to service the parent's
notes," S&P said.
"Thus, we believe sources of funds would be insufficient to cover
uses of funds by the end of 2012 (at the Stanadyne Holdings level)
if Stanadyne cannot grow its restricted payment basket, amend the
terms of this basket, or refinance Stanadyne Holdings' notes," Mr.
Picciotto said.
"The off-road engine component manufacturer has a 'highly
leveraged' financial risk profile and 'weak' business risk
profile, as Standard & Poor's criteria define the terms.
Stanadyne's adjusted total debt remains more than 10x
EBITDA, by our calculation, as of the end of third-quarter 2011.
Trailing-12-month funds from operations (FFO) was only modestly
positive as of the same date," S&P said.
SEQUENOM INC: Incurs $22.2 Million Net Loss in 2011
---------------------------------------------------
Sequenom, Inc., reported a net loss of $22.17 million on
$15.48 million of total revenues for the three months ended Dec.
31, 2011, compared with a net loss of $22.02 million on $13.75
million of total revenues for the same period a year ago.
The Company reported a net loss of $74.15 million on $55.90
million of total revenues for the year ended Dec. 31, 2011,
compared with a net loss of $120.84 million on $47.46 million of
total revenues during the prior year.
The Company's balance sheet at Dec. 31, 2011, showed $135.54
million in total assets, $44.16 million in total liabilities and
$91.38 million in stockholders' equity.
"2011 was a pivotal year for Sequenom as the Sequenom Center for
Molecular Medicine launched its cornerstone MaterniT21TM prenatal
laboratory-developed test and advanced a number of other important
programs," said Harry F. Hixson, Chairman and CEO of Sequenom,
Inc. "The positive uptake from the launch of the MaterniT21 LDT
and increasing early volumes for testing services since has set
the tone for our expected growth and expansion during 2012.
A copy of the press release is available for free at:
http://is.gd/9zRJwO
About Sequenom
Sequenom, Inc. (NASDAQ: SQNM) -- http://www.sequenom.com/-- is a
life sciences company committed to improving healthcare through
revolutionary genetic analysis solutions. Sequenom develops
innovative technology, products and diagnostic tests that target
and serve discovery and clinical research, and molecular
diagnostics markets. The company was founded in 1994 and is
headquartered in San Diego, California.
Ernst & Young LLP of San Diego, California, in its audit report
attached to the 2010 financial statements, did not include a going
concern qualification for Sequenom. E&Y, in its report on the
2009 results, expressed substantial doubt against Sequenom's
ability as a going concern, noting that the Company "has incurred
recurring operating losses and does not have sufficient working
capital to fund operations through 2010."
SFVA INC: To Liquidate All Assets Under Chapter 7
-------------------------------------------------
Louis Llovio at Times-Dispatch reports that the State Fair of
Virginia said it will convert its Chapter 11 case into a Chapter 7
liquidation. A hearing to convert the case to a Chapter 7
liquidation is scheduled for March 14, 2012.
According to the report, State Fair said it is liquidating its
assets and nixing all planned events after failing to reach a deal
with a group of lenders.
The report relates G. William Beale, chairman of SFVA Inc., the
non-profit organization that puts on the annual state fair, said
in an interview that a group of lenders rebuffed a commercial real
estate developer's $5.5 million offer to buy The Meadow Event Park
in Caroline County and lease it back to SFVA.
The lenders "refused the offer and made no counter offer," the
report quotes Mr. Beale, who is chairman and CEO of Richmond-based
First Market Bankshares Inc., as saying.
About SFVA Inc.
State Fair of Virginia Inc. -- http://www.statefair.com/-- owns
and operates a state fairgrounds facility known as the "The Meadow
Event Park" located in Doswell, Caroline County, Virginia. SFVA
filed for Chapter 11 bankruptcy (Bank. E.D. Va. Case No. 11-37588)
on Dec. 1, 2011. The Debtor estimated assets of $10 million to
$50 million and estimated debts of $50 million to $100 million.
Curry A. Roberts signed the Petition as president. State Fair
officials said they hope to emerge on a better financial footing
and to do so within 60 days to 90 days.
The Debtor is represented by Jonathan L. Hauser, Esq., at Troutman
Sanders LLP.
The U.S. Trustee for Region 4 appointed five unsecured creditors
to serve on the Official Committee of Unsecured Creditors of State
Fair of Virginia Inc.
SWIFT TRANSPORTATION: Moody's Rates $1.27-Bil. Facilities at 'B1'
-----------------------------------------------------------------
Moody's Investors Service has assigned a B1 rating to Swift
Transportation Co., LLC's senior secured credit facility,
consisting of a $200 million term loan B-1 due 2016, a $674
million term loan B-2 due 2017, and a $400 million revolving
credit facility due 2015. Moody's has affirmed Swift's Corporate
Family Rating of B2 with a positive outlook, and Speculative Grade
Liquidity Rating of SGL-3.
Assignments:
Issuer: Swift Transportation Co., LLC
Senior Secured Bank Credit Facility, Assigned B1, LGD3 -- 32%
Ratings Rationale
Swift's B2 corporate family rating reflects the company's
strengthening financial performance, which can be attributed to
improvements in its trucking operations as well as to a continuing
trend in improving industry freight volumes and yields. The rating
also takes into account the company's commitment to reducing debt
while maintaining fleet investments. Anticipating relatively
stable industry conditions, Swift should be able to sustain
operating margins, while generating cash to support fleet
investments and debt service. However, despite the modest but
steady level of debt reduction since the December 2010 IPO, Swift
continues to operate with sizeable debt in its capital structure.
This could lead to elevated leverage during periods of weakness in
the highly cyclical trucking sector.
Swift's ratings were assigned by evaluating factors that Moody's
considers relevant to the credit profile of the issuer, such as
the company's (i) business risk and competitive position compared
with others within the industry; (ii) capital structure and
financial risk; (iii) projected performance over the near to
intermediate term; and (iv) management's track record and
tolerance for risk. Moody's compared these attributes against
other issuers both within and outside Swift's core industry and
believes Swift's ratings are comparable to those of other issuers
with similar credit risk. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
Swift Transportation Co, LLC is a subsidiary of Swift
Transportation Company, headquartered in Phoenix, Arizona, and is
one of the largest providers of truckload transportation services
in the United States, with line-haul, dedicated and inter-modal
freight services.
SOUTHERN PRODUCTS: Board OKs Entry Into Account Receivables Pact
----------------------------------------------------------------
Southern Products, Inc.'s board of directors approved the
Company's entry into an Accounts Receivable Purchase and Security
Agreement with Pacific Business Capital Corporation. The
Agreement is a credit facility for the purpose of factoring the
Company's accounts receivable. The cost of this funding is a
discount of .813% of the gross amount of each receivable factored
through PBCC, with an additional discount of .054 percent per day
for accounts receivable that remain unpaid 15 days after they are
purchased by PBCC under the Agreement. Under the Agreement, PBCC
will advance a portion of the invoice upon factoring, and reserve
the remainder of the invoice amount. The reserve will be applied
to amounts due from us to PBCC, with the remainder of the reserve
funds to be rebated to the Company on an invoice-by-invoice basis.
The Company's obligations to PBCC under the Agreement are secured
by all of the Company's assets, and are guaranteed by the
Company's officers, Edward Meadows and Edward Wang.
A copy of the Agreement is available for free at:
http://is.gd/7OjbLn
About Southern Products
City of Industry, Calif.-based Southern Products, Inc., is in the
business of designing, assembling and marketing consumer
electronics products, primarily flat screen high-definition
televisions using LCD and LED technologies. Through Nov. 30,
2011, the Company has six LCD and LED widescreen televisions on
the market.
For the nine months ended Nov. 30, 2011, the Company has reported
a net loss of $870,559 on $3.6 million of revenues, compared with
a net loss of $8,162 on $nil revenue for the nine months ended
Nov. 30, 2010.
The Company's balance sheet at Nov. 30, 2011, showed $2.4 million
in total assets, $3.3 million in total liabilities, and a
stockholders' deficit of $900,025.
"We have negative working capital and have incurred losses since
inception," the Company said in the filing. "These factors create
substantial doubt about our ability to continue as a going
concern."
SKINNY NUTRITIONAL: To Issue Add'l $305,000 Convertible Notes
-------------------------------------------------------------
As previously reported, in November 2011, Skinny Nutritional Corp.
commenced a private offering pursuant to which it is offering an
aggregate amount of $2,500,000 of units of the Company's
securities on a "best efforts" basis. Each Unit consists of one
Convertible Senior Subordinated Secured Note in the principal
amount of $25,000 and one Series A Common Stock Purchase Warrant.
On Feb. 29, 2012, and March 1, 2012, the Company accepted
subscriptions under the Subscription Agreement from additional
accredited investors, pursuant to which the Company will sell and
issue to the investors additional Convertible Notes in the
aggregate principal amount of $305,000 and Series A Warrants to
purchase an aggregate of 10,166,666 shares of Common Stock in the
final closings of the Unit Offering. The aggregate principal
amount of the Convertible Notes issued in the final closings is
initially convertible into 10,166,666 shares of common stock.
The Convertible Notes are convertible into either (i) shares of
the Company's common stock at the initial conversion rate of $0.03
or (ii) the securities sold by the Company in the next financing
conducted by the Company at a conversion rate equal to a 20%
discount to the price at which the securities in the Next
Financing are sold. In the event that the gross proceeds realized
by the Company in the Next Financing are at least $5,000,000, then
each holder of a Convertible Note will be required to convert that
Convertible Note into the Conversion Securities issued in the Next
Financing. The conversion rate is subject to adjustment as
described in the Convertible Notes, including adjustment on a
"weighted-average" basis in the event that the Company issued
additional shares of Common Stock or other equity securities at a
purchase price below the initial conversion rate. The principal
amount of the Convertible Notes will bear interest at the rate of
10% per annum and will have an initial maturity date of 12 months.
The Company will have the right to extend the maturity date for an
additional 12 month period provided it issues the purchasers
additional Series A Warrants. The Convertible Notes are secured
obligations of the Company and will be secured by a lien on the
Company's assets, which lien will be subordinated to the senior
indebtedness of the Company, in accordance with the terms of a
security agreement entered into between the Company and the
investors.
The Series A Warrants will permit the holders to purchase shares
of the Company's Common Stock at an initial per share exercise
price of $0.05 for a period of five years. The exercise price
will be subject to adjustment in the event that the Company issues
additional common stock purchase warrants in the Next Financing
and those warrants have an exercise price less than the exercise
price of the Series A Warrants. Each purchaser will be issued a
Series A Warrant to purchase such number of Warrant Shares as is
equal to 100% of the number of Conversion Shares which may be
issued upon conversion of the Convertible Note purchased by such
purchaser, at the initial conversion rate of such Convertible
Note.
In consideration for services rendered as selling agents in the
Unit Offering, the Company agreed to pay to the selling agents
cash commissions of up to $24,400, or 8.0% of the gross proceeds
received in the final closings of the Unit Offering, and agreed to
issue five-year warrants to purchase an aggregate of 1,016,666
shares of the Company's common stock at an exercise price of $0.05
per share.
Net proceeds from the sale of the securities in the final
closings, after payment of offering expenses and commissions, are
approximately $280,000 and total net proceeds from the entire Unit
Offering are approximately $648,000. The Company intends to use
the proceeds from the Offering for working capital and general
corporate purposes. The securities being offered have not been
registered under the Securities Act or any state securities laws
and will be offered in reliance upon the exemption from
registration set forth in Section 4(2) of the Securities Act or
any state Regulation D, promulgated thereunder. Those shares may
not be offered or sold in the United States absent registration or
an applicable exemption from registration requirements.
About Skinny Nutritional
Bala Cynwyd, Pa.-based Skinny Nutritional Corp. (OTC BB: SKNY.OB)
-- http://www.SkinnyWater.com/-- has developed and is marketing a
line of enhanced waters, all branded with the name "Skinny Water"
that are marketed and distributed primarily to calorie and weight
conscious consumers.
The Company reported a net loss of $6.91 million in 2010, compared
with a net loss of $7.30 million in 2009. The Company also
reported a net loss of $5.86 million for the nine months ended
Sept. 30, 2011.
The Company's balance sheet at Sept. 30, 2011, showed $3.22
million in total assets, $3.58 million in total liabilities, all
current, and a $366,271 stockholders' deficit.
As reported by the TCR on April 25, 2011, Marcum, LLP, in Bala
Cynwyd, Pennsylvania, expressed substantial doubt about the
Company's ability to continue as a going concern, following the
2010 financial results. The independent auditors noted that the
Company had a working capital deficiency of $3,517,280, an
accumulated deficit of $37,827,090, stockholders' deficit of
$2,658,043 and no cash on hand. The Company had net losses of
$6,914,269 and $7,305,831 for the years ended Dec. 31, 2010 and
2009, respectively. Additionally, the Company is currently in
arrears under its obligation for the purchase of trademarks.
Under the agreement, the seller of the trademarks may choose to
exercise their legal rights against the Company's assets, which
includes the trademarks.
SPRING POINTE: Sets 5-Yr. Period Under Plan to Sell Utah Property
-----------------------------------------------------------------
Spring Pointe Development, LLC, filed with the U.S. Bankruptcy
Court for the District of Utah a plan of reorganization and
disclosure statement dated Feb. 15, 2012.
The Debtor owns a certain undeveloped real property located in
Utah County, Utah, consisting of approximately 84.971 acres, with
an appraised value of $10,000,000. The Plan proposes a time
period not to exceed 5 years for the Debtor to sell all of the
Real Property and pay allowed claims against it.
The Plan also authorizes the Debtor to obtain capital
contributions or loans in order to fund distributions under the
Plan, to the extent required.
The Plan designates 8 classes of claims and interests in the
Debtor:
Class 1 Allowed Priority Claims
Class 2 Claim of Springville City for $2,971,188
Class 3 Norman Van Wagenen's Secured Claim for $5,000,000
Class 4 PRM Investment Company's Claim for $242,485
Class 5 Milton Christensen Claim
Class 6 D&M Excavation & Grading, Inc's Claim for $90,696.
Class 7 Shake & Single Sales, Inc.'s Claim for $182,548
Class 8 Allowed Equity Interests
Class 1 claims, if any, will be paid in full.
Class 2 claim will be allowed for $2,806,997. It will be paid in
eight yearly installments. Springville City will retain its lien
on the Real Property until its Allowed Claim is paid in full. In
the event the Debtor defaults in its payment obligations under the
Plan and fails to cure its defaults, the Debtor may transfer
certain portions of its Real Property to Springville City in full
satisfaction of Springville City's claims.
Class 3, 6 and 7 claims are disputed by the Debtor and is allowed
at zero under the Plan. To the extent the Bankruptcy Court Class
3, 6 and 7 claims are allowed, the amount will be paid pro rata
with all other claims in Classes 3, 6, and 7.
Class 4 claim is believed to have been oversecured and will be
allowed for $242,585 as of the Petition Date.
Class 5 claim will be allowed at zero. Mr. Christensen holds the
entire membership interest of the Debtor. Mr. Christensen's Lien
will be extinguished by the confirmation of the Plan.
Class 8 equity interest holders will retain their interests in the
Debtor.
A copy of the Feb. 15 Plan and Disclosure Statement is available
for free at http://bankrupt.com/misc/SPRINGPOINTE_PlanDSFeb15.PDF
The Court is set to convene a hearing on March 29, 2012 to
consider adequacy of the Disclosure Statement.
About Spring Pointe
Spring Pointe Development LLC, based in Springville, Utah, filed
for Chapter 11 bankruptcy (Bankr. D. Utah Case No. 11-32972) on
Sept. 2, 2011. Judge Joel T. Marker presides over the case.
In its petition, the Debtor estimated $10 million to $50 million
in assets and $1 million to $10 million in debts. The petition
was signed by Milton Christensen, managing member.
STRATEGIC AMERICAN: Successfully Drills Well in Trinity Bay
-----------------------------------------------------------
Strategic American Oil Corporation has successfully drilled the ST
9-12A #4, its first well in the Fishers Reef Field in Trinity
Bay, TX, to the target depth of 9,720 feet. Based upon analysis
of open hole and field data, the Company has decided to complete
the well and ready it for production.
The target geological interval is referred to as the Tex II Sand
and is in the lower part of the overall Frio trend which has been
one of the most prolific productive intervals along the Texas Gulf
Coast. According to open-hole log evaluation and core analysis,
the ST9-12A #4 encountered approximately 50 feet of gross pay
resulting in 44 feet of net pay capable of producing hydrocarbons.
The well encountered the productive horizon in a favorable
structural position as originally predicted.
"The successful drilling of this well represents a major milestone
in our operational plans for the fields in Trinity Bay and
Galveston Bay. We are strongly encouraged by what we see and look
forward to releasing the production results once obtained," noted
Jeremy G. Driver, President and Chief Executive Officer of
Strategic American Oil Corporation.
Strategic American Oil Corporation operates the Fishers Reef Field
in Trinity Bay, Texas, including the ST 9-12A #4 well through its
wholly-owned subsidiary Galveston Bay Energy LLC. GBE retained
25% of the working interest in the well after conveying 75% to
financial and industry partners.
The Company will release production data and other updates
regarding this new well in future press releases.
About Strategic American
Corpus Christi, Tex.-based Strategic American Oil Corporation (OTC
BB: SGCA) -- http://www.strategicamericanoil.com/-- is a growth
stage oil and natural gas exploration and production company with
operations in Texas, Louisiana, and Illinois. The Company's team
of geologists, engineers, and executives leverage 3D seismic data
and other proven exploration and production technologies to locate
and produce oil and natural gas in new and underexplored areas.
Strategic American a net loss of $10.28 million on $3.41 million
of revenue for the year ended July 31, 2011, compared with a net
loss of $3.49 million on $531,736 of revenue for the same period
during the prior year.
The Company's balance sheet at Oct. 31, 2011, showed
$24.79 million in total assets, $12.03 million in total
liabilities, and $12.75 million in total stockholders' equity.
MaloneBailey, LLP, in Houston, Texas, the Company's auditors, did
not include a "going concern" qualification in its report on the
Company's financial statements.
As reported by the TCR on March 25, 2011, MaloneBailey expressed
substantial doubt about Strategic American Oil's ability to
continue as a going concern following the Company's results for
the fiscal year ended July 31, 2010. The independent auditors
noted that the Company has suffered losses from operations and has
a working capital deficit.
TEMPLE BAPTIST: Files for Chapter 11 Bankruptcy Protection
----------------------------------------------------------
Michael Gordon and Maria David at The Charlotte Observer report
that Temple Baptist Church has filed for Chapter 11 bankruptcy
protection, with records indicating outstanding bank loans and a
large tax debt.
The report says Temple Baptist listed assets of slightly more than
$1 million and liabilities totaling more than $2.5 million. That
includes more than $2 million in outstanding loans to Fifth Third
Bank and almost $400,000 in overdue payments to the IRS.
The report notes Church Elder Bertha Colbert signed the documents.
Temple Baptist Church, located at 2916 Tuckaseegee Road, is part
of Temple Church International Inc.
THE RUINS: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: The Ruins, LP
817 W. Daggett Avenue
Fort Worth, TX 76104
Bankruptcy Case No.: 12-41400
Chapter 11 Petition Date: March 5, 2012
Court: United States Bankruptcy Court
Northern District of Texas (Ft. Worth)
Judge: D. Michael Lynn
Debtor's Counsel: Pro Se
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by Michael Ken Schaumburg, general
partner.
THERMOENERGY CORP: Enters Into Agreement to Dissolve BTCC
---------------------------------------------------------
ThermoEnergy Corporation, ThermoEnergy Power Systems, LLC,
Babcock Power, Inc., and Babcock Power Development, LLC, a
subsidiary of Babcock, entered into a Dissolution Agreement for
the purpose of terminating the Limited Liability Company Agreement
dated as of Feb. 25, 2009, as amended, of Babcock-Thermo Clean
Combustion LLC and dissolving BTCC, the joint venture which the
Company and Babcock had organized for the purpose of developing
and commercializing the Company's proprietary pressurized oxy-fuel
combustion technology. The dissolution of BTCC and the
liquidation and distribution of BTCC's assets will be effected by
BTCC's Board of Managers, which will remain in place until the
dissolution is complete.
Pursuant to the LLC Agreement, and as confirmed by the Dissolution
Agreement, the exclusive license of the Company's pressurized oxy-
fuel combustion technology to BTCC has been terminated and the
Company is now free to exploit the technology independent of
Babcock. The Company's pressurized oxy-fuel combustion technology
converts fossil fuels and biomass into electricity with near zero
air emissions while removing and capturing carbon dioxide in
liquid form for sequestration or beneficial reuse.
The parties remain bound by the Master Non-Disclosure Agreement
entered into in connection with the organization of BTCC, which
imposes on all parties continuing confidentiality obligations.
Babcock and BPD have agreed to return to the Company, upon
request, all TEPS Confidential Information and the Company and
TEPS have agreed to return to Babcock, upon request, all Babcock
Confidential Information.
The Dissolution Agreement includes mutual releases of claims and
provides that each party will bear its own fees and expenses
incurred in connection with the transactions contemplated by the
Dissolution Agreement.
A copy of the Dissolution Agreement is available for free at:
http://is.gd/VPEIx6
About ThermoEnergy Corporation
Little Rock, Ark.-based ThermoEnergy Corporation is a clean
technologies company engaged in the worldwide development of
advanced municipal and industrial wastewater treatment systems and
carbon reducing clean energy technologies.
As reported by the TCR on April 7, 2011, Kemp & Company, a
Professional Association, in Little Rock, Arkansas, expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
has incurred net losses since inception and will require
substantial capital to continue commercialization of the
Company's technologies and to fund the Companies liabilities.
The Company reported a net loss of $9.85 million on $2.87 million
of revenue for the year ended Dec. 31, 2010, compared with a net
loss of $12.98 million on $4.01 million of revenue during the
prior year.
The Company also reported a net loss of $11.87 million on $3.57
million of revenue for the nine months ended Sept. 30, 2011,
compared with a net loss of $8.49 million on $2.05 million of
revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed $4.27
million in total assets, $11.09 million in total liabilities and a
$6.81 million total stockholders' deficiency.
THOMPSON CREEK: Moody's Cuts Corporate Family Rating to 'B3'
------------------------------------------------------------
Moody's Investors Service downgraded the ratings of Thompson Creek
Metals, including the company's Corporate Family Rating (CFR) and
Probability of Default Rating (PDR) to B3 from B1 and the rating
on its senior unsecured notes to Caa2 from B3. At the same time,
Moody's downgraded the Speculative Grade Liquidity rating to SGL-4
from SGL-3. The outlook is negative. The rating action was
prompted by the further increase in anticipated capital
expenditures related to the Mt. Milligan development project,
which elevated the risks surrounding Thompson Creek's ability to
remain in compliance with restrictive covenants, and the company's
liquidity position.
Downgrades:
Issuer: Thompson Creek Metals Company Inc.
-- Corporate Family Rating, Downgraded to B3 from B1
-- Probability of Default Rating, Downgraded to B3 from B1
-- Speculative Grade Liquidity Rating, Downgraded to SGL-4
from SGL-3
-- Senior Unsecured Regular Bond/Debenture, Downgraded to
Caa2, LGD5, 79% from B3, LGD5, 75%
Ratings Rationale
In conjunction with the release of its fourth quarter earnings,
the company has announced that projected expenditures to complete
Mt. Milligan project may be 10% to 20% higher than the company's
previous estimates, bringing remaining costs to the range of $940
million to $1.1 billion to be incurred in 2012 and 2013. In light
of limited headroom under the company's revolving facility's
covenants, as well as liquidity restrictions on revolver draws,
Moody's believes that there is a high likelihood that the company
will need to find additional funding sources to support Mt.
Milligan development and to make new arrangements to improve its
liquidity position.
The ratings also reflect the anticipated decrease in production
volumes at the Thompson Creek mine in 2012, as compared to 2011
levels, due to waste removal activities there, although this will
be somewhat offset by the increased production at Endako following
the completion of its mine expansion. While Moody's expects the
Mt. Milligan mine, once on line, to bring in additional cash flows
and diversify the company's operations, the rating agency notes
that the mine is not expected to be in full production until late
2013/ early 2014. In addition, the level of cash flows available
to Thompson Creek from the mine production will be limited by the
fact that 40% of life of mine gold production at Mt. Milligan has
been committed and sold to Royal Gold, Inc at a price of $435 per
ounce.
The negative outlook reflects the rating agency's expectation that
the company will have limited headroom under its revolver's
covenants, with even a relatively small drop-off in molybdenum
prices potentially triggering a covenant breach. It also reflects
uncertainties over any potential additional arrangements that the
company may enter into to help finance the development of Mt.
Milligan. Any additional borrowings would further drive up
leverage, while additional gold stream sale would limit cash flows
available to the company once Mt. Milligan is in production.
The downgrade of the company's liquidity rating to SGL-4 reflects
the rating agency's expectation of negative free cash generation
and potential covenant compliance issues over the next 12 to 18
months. The company's current liquidity position includes almost
$300 million in cash and almost full availability under $300
million revolver; however, negative free cash flows due to high
development costs will erode the liquidity position going forward,
while the revolver's restrictive covenants may limit availability
in the next twelve to eighteen months.
Thompson Creek's B3 CFR reflects its concentration in molybdenum,
relatively small size, heavy reliance currently on two mines, and
the need for favorable volume and price trends in order to meet
its increasingly aggressive capital expenditure requirements over
the next several years. The rating anticipates meaningful negative
free cash flow (operating cash flow minus dividends and capital
expenditures), the need for additional debt over the next 18
months, and limited headroom under revolver's covenants. At the
same time, the rating considers the long operating history of
Thompson Creek's mines and its Langeloth metallurgical facility,
as well as the company's low political risk profile given the
location of its operations in the U.S. and Canada. Further
favorable factors in the rating include the fact that a
significant portion of the company's production is on a contract
basis, thus ensuring minimum offtakes although price risk remains,
and the company has a good relationship with its customer base.
The Caa2 rating on the senior unsecured notes reflects their lower
rank in the capital structure behind the $300 million secured
revolver and up to $132 million in secured equipment financing to
fund the mobile fleet needed at the Mt. Milligan project.
The principal methodology used in rating Thompson Creek was the
Global Mining Industry Methodology published in May 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
Thompson Creek Metals Company Inc., one of the world's largest
producers of molybdenum, operates through two open pit mines and
two processing centers. The company owns 100% of the Thompson
Creek open-pit mine in Idaho, 100% of the Langeloth processing
facility in Pennsylvania, and 75% of the Endako mine,
concentrator, and roaster in British Columbia. It is currently in
the process of constructing the Mount Milligan copper-gold mine in
northern British Columbia, whose operations are expected to
commence in 2013. In 2011, Thompson Creek produced 28.3 million
pounds of molybdenum and generated approximately $669 million of
revenues.
TRAILER BRIDGE: Scott Fernandez No Longer CCO
---------------------------------------------
Trailer Bridge, Inc.'s Chief Commercial Officer, Scott W.
Fernandez, is no longer employed by the Company effective March 2,
2012.
About Trailer Bridge
Headquartered in Jacksonville, Florida, Trailer Bridge, Inc. --
http://www.trailerbridge.com/-- provides integrated trucking and
marine freight service to and from all points in the lower 48
states and Puerto Rico and Dominican Republic. This total
transportation system utilizes its own trucks, drivers, trailers,
containers and U.S. flag vessels to link the mainland with Puerto
Rico via marine facilities in Jacksonville, San Juan and Puerto
Plata.
Trailer Bridge filed a voluntary Chapter 11 petition (Bankr. M.D.
Fla. Case No. 11-08348) on Nov. 16, 2011, one day after its
$82.5 million 9.25% Senior Secured Notes became due.
Judge Jerry A. Funk presides over the case. Gardner F. Davis,
Esq., at Foley & Lardner LLP, and DLA Piper LLP (US) serve as the
Debtor's counsel. Global Hunter Securities LLC serves as the
Debtor's investment banker. RAS Management Advisors LLC serves as
the Debtor's financial advisor. Kurtzman Carson Consultants LLC
serves as claims, noticing, and balloting agent. The Debtor
disclosed $97,345,981 in assets, and $112,538,934 in liabilities.
The petition was signed by Mark A. Tanner, co-chief executive
officer.
The Court will hold a combined hearing on the Plan and Disclosure
Statement on March 16, 2012. The Plan, which was filed in
January, proposes to give noteholders control of the company and
provide some recovery for shareholders.
On Dec. 6, 2011, the U.S. Trustee appointed the Official Committee
of Unsecured Creditors in the Debtor's case.
TRAVELPORT INC: Bank Debt Trades at 14% Off in Secondary Market
---------------------------------------------------------------
Participations in a syndicated loan under which Travelport Inc. is
a borrower traded in the secondary market at 86.38 cents-on-the-
dollar during the week ended Friday, March 9, 2012, an increase of
1.55 percentage points from the previous week according to data
compiled by Loan Pricing Corp. and reported in The Wall Street
Journal. The Company pays 450 basis points above LIBOR to borrow
under the facility. The bank loan matures on Aug. 23, 2015, and
carries Moody's B1 rating and Standard & Poor's B rating. The
loan is one of the biggest gainers and losers among 179 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
About Travelport Holdings
Travelport Holdings is the direct parent of Travelport Limited, is
a broad-based business services company and a leading provider of
critical transaction processing solutions to companies operating
in the global travel industry. With a presence in 160 countries
and approximately 3,500 employees, Travelport is comprised of the
global distribution system (GDS) business, which includes the
Galileo and Worldspan brands and its Airline IT Solutions
business, which hosts mission critical applications and provides
business and data analysis solutions for major airlines.
Travelport also owns approximately 48% of Orbitz Worldwide (NYSE:
OWW), a leading global online travel company. Travelport is a
private company owned by The Blackstone Group, One Equity
Partners, Technology Crossover Ventures, and Travelport
management.
Travelport Holdings Limited is a holding company with no direct
operations. Its principal assets are the direct and indirect
equity interests it holds in its subsidiaries, including
Travelport Limited.
Travelport Limited, a direct subsidiary of Travelport Holdings
Limited, reported net income of $283 million on $1.061 billion of
net revenue for the six months ended June 30, 2011, compared with
net income of $1 million on $1.056 billion of net revenue for the
same period of 2010. Results for the six months ended June 30,
2011, includes gain of $312 million, net of tax, from the sale of
sale of the Gullivers Travel Associates ("GTA") business to Kuoni
Travel Holdings Limited ("Kuoni"). The sale was completed on May
5, 2011.
Loss from continuing operations was $4 million during the six
months ended June 30, 2011, compared with a loss of $2 million for
the same period of 2010.
The Company's balance sheet at Sept. 30, 2011, showed $3.43
billion in total assets, $4.21 billion in total liabilities, and a
$780 million total deficit.
* * *
As reported by the TCR on Oct. 10, 2011, Standard & Poor's Ratings
Services lowered its long-term corporate credit ratings on travel
services provider Travelport Holdings Limited (Travelport
Holdings) and indirect subsidiary Travelport LLC (Travelport) to
'SD' (selective default) from 'CC'.
The downgrades follow the implementation of a capital
restructuring, which was necessary because of the Travelport
group's high leverage, weak liquidity, and the upcoming maturity
of its $693 million (as of end-June 2011) PIK loan in March 2012.
"According to our criteria, we view this restructuring as a
distressed exchange and tantamount to a default (see 'Rating
Implications Of Exchange Offers And Similar Restructurings,
Update,' published May 12, 2009, on RatingsDirect on the Global
Credit Portal)," S&P related.
TRIBUNE CO: Bank Debt Trades at 34% Off in Secondary Market
-----------------------------------------------------------
Participations in a syndicated loan under which Tribune Co. is a
borrower traded in the secondary market at 66.03 cents-on-the-
dollar during the week ended Friday, March 9, 2012, an increase of
0.97 percentage points from the previous week according to data
compiled by Loan Pricing Corp. and reported in The Wall Street
Journal. The Company pays 300 basis points above LIBOR to borrow
under the facility. The bank loan matures on May 17, 2014. The
loan is one of the biggest gainers and losers among 179 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
About Tribune Co.
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8,
2008. The Debtors proposed Sidley Austin LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North America LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets
and $12,972,541,148 in total debts. Chadbourne & Parke LLP and
Landis Rath LLP serve as co-counsel to the Official Committee of
Unsecured Creditors. AlixPartners LLP is the Committee's
financial advisor. Landis Rath Moelis & Company serves as the
Committee's investment banker. Thomas G. Macauley, Esq., at
Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the
Committee in connection with the lawsuit filed against former
officers and shareholders for the 2007 LBO of Tribune.
Protracted negotiations and mediation efforts and numerous
proposed plans of reorganization filed by Tribune Co. and
competing creditor groups have delayed Tribune's emergence from
bankruptcy. Many of the disputes among creditors center on the
2007 leveraged buyout fraudulence conveyance claims, the
resolution of which is a key issue in the bankruptcy case. The
bankruptcy court has scheduled a May 16 hearing on Tribune's plan.
Tribune CRO Don Liebentritt said it is possible the media company
could emerge late in the third quarter of 2012.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRIDENT MICROSYSTEMS: Incurs $44.2-Mil. Net Loss in 4th Quarter
---------------------------------------------------------------
Trident Microsystems, Inc., reported a net loss of $44.20 million
on $60.36 million of net revenues for the three months ended
Dec. 31, 2011, compared with a net loss of $53.78 million on
$118.57 million of net revenues for the same period a year ago.
The Company reported a net loss of $150.35 million on $298.35
million of net revenues for the 12 months ended Dec. 31, 2011,
compared with a net loss of $128.89 million on $557.19 million of
net revenues during the prior year.
The Company's balance sheet at Dec. 31, 2011, showed $201.88
million in total assets, $121.14 million in total liabilities and
$80.75 million in total stockholders' equity.
A copy of the report is available for free at http://is.gd/56fEd6
About Trident Microsystems
Sunnyvale, California-based Trident Microsystems, Inc., currently
designs, develops, and markets integrated circuits and related
software for processing, displaying, and transmitting high quality
audio, graphics, and images in home consumer electronics
applications such as digital TVs, PC-TV, and analog TVs, and set-
top boxes. The Company has research and development facilities in
Beijing and Shanghai, China; Freiburg, Germany; Eindhoven and
Nijmegen, The Netherlands; Belfast, United Kingdom; Bangalore and
Hyderabad, India; Austin, Texas; and Sunnyvale, California. The
Company has sales offices in Seoul, South Korea; Tokyo, Japan;
Hong Kong and Shenzhen, China; Taipei, Taiwan; San Diego,
California; Mumbai, India; and Suresnes, France. The Company also
has operations facilities in Taipei and Kaoshiung, Taiwan; and
Hong Kong, China.
Trident Microsystems and its Cayman subsidiary, Trident
Microsystems (Far East) Ltd. filed for Chapter 11 bankruptcy
protection (Bankr. D. Del. Lead Case No. 12-10069) on Jan. 4,
2011. Trident said it expects to shortly file for protection in
the Cayman Islands.
Judge Christopher S. Sontchi presides over the case. Lawyers at
DLA Piper LLP (US) serve as the Debtors' counsel. FTI Consulting,
Inc., is the financial advisor. Union Square Advisors LLC serves
as the Debtors' investment banker. PricewaterhouseCoopers LLP
serves as the Debtors' tax advisor and independent auditor.
Kurtzman Carson Consultants is the claims and notice agent.
Trident had $309,992,980 in assets and $39,607,591 in liabilities
as of Oct. 31, 2011. The petition was signed by David L.
Teichmann, executive VP, general counsel & corporate secretary.
The Official Committee of Unsecured Creditors of Trident
Microsystems, Inc., et al., tapped Pachulski Stang Ziehl & Jones
LLP as its counsel, and Imperial Capital, LLC, as its investment
banker and financial advisor.
Roberta A. DeAngelis, the U.S. Trustee for Region 3 appointed
three members to the Committee of Trident Microsystems, Inc.
Equity Security Holders.
VAIL RESORTS: Lowered Earnings Guidance No Impact on Ratings
------------------------------------------------------------
Moody's Investors Service said that Vail Resorts, Inc.'s (Ba2,
stable) announcement that it had lowered its earnings guidance and
increased its cash dividend is credit negative, but because Vail's
current credit metrics have some cushion to absorb the lower
earnings and increased dividend payout, its ratings and stable
rating outlook remain unchanged at this juncture. However,
according to Moody's analyst John Zhao, "the headroom within the
company's metrics before triggering a negative rating action is
thinning." Moody's will continue to monitor the Vail's operating
trends into the quarter, as well as its financial policy to assess
the potential rating impact.
Vail Resorts Inc. is a publicly-traded holding company (NYSE:MTN)
that owns and operates through its subsidiaries six world-class
ski resort properties as well as ancillary businesses, primarily
including ski school, dining and retail/rental operations. The ski
resorts are located in the Colorado Rocky Mountains (four of them)
and in the Lake Tahoe area of California/Nevada.
VERSO PAPER: Moody's Assigns B2 Rating to $345MM Sr Secured Notes
-----------------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to Verso Paper
Holdings LLC's and Verso Paper Inc's proposed $345 million senior
secured notes due 2019 and $50 million senior secured revolving
facility. The net proceeds from the notes offering will be used to
pay for the cash tender offer for Verso's outstanding 11«% first-
lien notes due 2014. The proposed refinancing is leverage-neutral
and improves the company's debt maturity profile. The rating
outlook remains stable.
Moody's took the following rating actions:
-- Assigned Ba2 (LGD2 20%) to proposed senior secured notes due
2019
-- Assigned Ba2 (LGD2 20%) to proposed $50 million first-lien
revolving facility
Ratings Rationale
Verso's B2 corporate family rating (CFR) primarily reflects the
company's vertically integrated, relatively low cost asset base
and its scale as the second largest producer of coated papers in
North America. The rating also considers the company's significant
debt load, its narrow product focus and the expectation that the
company will continue to face secular demand declines for its
primary products.
The outlook on Verso's ratings is stable, reflecting expectations
that the company will be able to refinance its debt obligations on
a timely basis and that industry fundamentals will allow the
company to maintain credit protection measures appropriate for its
current rating. Moody's will consider an upgrade if RCF/TD were to
approach 10%, with (RCF-CapEx)/TD approaching 5%, both metrics on
a normalized and sustainable basis. Downward rating pressure is
likely to develop if Moody's believes that Verso will not be able
to refinance its remaining near-term debt obligations on a timely
basis or if Verso's normalized RCF/TD and (RCF-CapEx)/TD drop
below 5% and 2%, respectively, for a sustained period of time.
The proposed notes and new credit facility are senior secured
obligations of Verso and are rated Ba2, in line with the existing
senior secured notes and credit facility. These instruments are
rated 3 notches higher than the CFR, reflecting their priority
ranking in the overall waterfall of debts. Verso's subsidiaries
that intend to issue and guarantee the proposed notes and credit
facility are the same entities that issued and guaranteed Verso's
existing senior secured debt. The proposed notes and credit
facility and related guarantees will be secured on a first
priority basis by most of the fixed assets of the issuers and the
guarantors and will have a second priority lien on the current
assets that will secure the company's proposed $150 million asset-
based revolving credit facility (not rated). The net proceeds from
the proposed note offering will be used to pay the company's
outstanding 11«% senior secured notes due 2014. The proposed $50
million credit facility and $150 million asset-based revolving
credit facility will replace Verso's existing $200 million
revolving credit facility which matures on August 1, 2012. The
rating is subject to Moody's review of final documentation.
The principal methodology used in rating Verso was the Global
Paper and Forest Products Industry Methodology published in
September 2009. Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the U.S.,
Canada and EMEA published in June 2009.
Headquartered in Memphis, Tennessee, Verso is the second largest
coated paper producer in North America with a 20% coated
groundwood market share and about 12% coated freesheet market
share. The company operates 9 paper machines at four mills with
total paper production capacity of approximately 1.7 million tons.
WATERLOO RESTAURANT: Files for Chapter 11 in Dallas
---------------------------------------------------
Waterloo Restaurant Ventures, Inc., filed a Chapter 11 petition
(Bankr. N.D. Tex. Case No. 12-31573) in Dallas on March 8, 2012.
On the Petition Date, the Debtor filed an expedited motion to use
cash collateral and obtain postpetition financing on a super-
priority priming liens basis.
Waterloo, a restaurant in Dallas County, Texas, estimated assets
and debts of $10 million to $50 million.
WOONSOCKET, RI: Fitch Cuts Rating on $117MM Bonds to 'BB-'
----------------------------------------------------------
Fitch Ratings takes the following rating action on the City of
Woonsocket, RI's (the city) outstanding general obligation (GO)
bonds:
-- $117.8 million GO bonds downgraded to 'BB-' from 'BBB-';
maintains Rating Watch Negative.
The bonds are general obligations of the city and backed by its
full faith and credit.
CONTINUED DEFICIT OPERATIONS: The downgrade to 'BB-' from 'BBB-'
reflects financial stress due to ongoing deficit operations. The
city is projecting a cumulative negative school fund balance at
the end of fiscal 2012 of about 7.6% of general fund and school
fund spending. It is Fitch's opinion that the city has very
limited expenditure reduction options available to address the
imbalance, and the tax base is stressed.
RATING WATCH NEGATIVE: The Rating Watch Negative reflects Fitch's
concerns over Woonsocket's ability to successfully, and in a
timely manner, address the school's cash flow issues and longer-
term financial operations.
INTERNAL CONTROL DEFICIENCIES: Deficiencies in internal fiscal
controls of the school department, an autonomous division of the
city, led to a fiscal year 2011 school fund deficit of $2.7
million, contrary to prior reported estimates of a positive ending
balance. The significant projected deficit for fiscal 2012 has
surfaced precipitously and well into the fiscal year, further
indicating deficiencies in financial management.
POTENTIAL FOR STATE OVERSIGHT: While Fitch views the potential
implementation of state oversight positively, the level of the
state's concern is an indication of the severity of the city's
fiscal problems.
LIMITED REVENUE GENERATING FLEXIBILITY: Revenue generation is
reliant primarily on property taxes, currently at high levels.
The city council has shown willingness to tax at the maximum level
in the past, and may need to consider a supplemental increase in
the tax levy for the current fiscal year.
WEAK EMPLOYMENT AND DEMOGRAPHICS: City demographics are weak with
high unemployment levels, low income levels, and declining
population.
HIGH DEBT RATIOS: Debt levels are high with below-average
amortization rates.
IMMEDIATE LIQUIDITY CONCERNS: Inability to adequately address
impending cash flow issues on the school side could trigger a
downgrade in the rating.
FURTHER FINANCIAL DETERIORATION: An inability to take effective
action to balance revenues and spending needs that leads to
ongoing deficits may negatively affect the rating.
CONTINUED INTERNAL CONTROL PROBLEMS: Continued lack of solid
fiscal controls and lack of meaningful change in financial
management could also have a negative impact on the rating.
INADEQUATE RESPONSE TO DEFICIT: Failure to address accumulated and
ongoing operating deficits adequately and in a timely manner may
lead to a rating downgrade.
FINANCIAL OPERATIONS PLAGUED BY SCHOOL FUND DEFICITS
For the last three years, Woonsocket has been hurt by significant
cuts in state aid, a weak economy, and overspending by school
department officials. It appeared that the city was on track
towards financial stability when it issued $11.5 million in
deficit financing bonds in March of last year. The city was
projecting a small surplus in its general fund and school fund
officials were projecting balanced operations for fiscal year
2011.
While the general fund ended fiscal year 2011 positively with an
unrestricted fund balance (the sum of the unassigned, assigned,
and committed fund balances under GASB 54) of $2.4 million or
about 3.1% of general fund spending, the unrestricted school fund
balance was a negative $3 million (4.6% of school fund spending).
The deficit was related largely to personnel spending without
corresponding resources to cover the expenditures, according to
city management.
SCHOOL FUND FACES $7.3MM DEFICIT & ONGOING LIQUIDITY CONCERNS
In December 2011, city officials reported that revenues were not
going to be sufficient to meet the school fund's fiscal 2012
budget. An accurate estimate was not available at the time due to
poor internal reporting practices. The city and school officials
have been working to compile accurate current year cash flow and
expenditure information for the school fund. Budget data presented
this week by city officials indicates an estimated $7.3 million
school fund deficit for the current fiscal year. The deficit is
sizable, representing about 11% of school fund spending and 5% of
total general fund and school fund spending. In addition to the
projected deficit, the city faces ongoing liquidity concerns. The
city estimates monthly school fund cash deficits of about $1 to
$1.5 million for the rest of the fiscal year.
For the current month, the city will be forced to prioritize
payments to manage school fund cash flow, as general fund cash
balances, the source of past loans supporting the school fund, are
at a yearly low. To address cash flow needs, one of the city's
alternatives is to seek a supplemental tax levy expected to yield
about $4 million for the current fiscal year. To expedite the
receipt of funds, officials could issue approximately $3.2 million
in tax anticipation notes payable from the levy. Both require
city council and state auditor general approval. In addition, the
city is looking to impose expenditure cuts, including an estimated
$1.8 million in unilaterally-imposed wage reductions, and expects
more savings from allowing currently vacant positions to remain
unfilled. Fitch believes the wage reductions may be subject to
challenge from unions, as they are not included in existing
contracts.
While these proposals attempt to address the near term, the city
faces a significant structural budget imbalance and will need to
pursue additional means of bringing spending in line with
revenues. Fitch has concerns about the city's and school
department's ability to implement changes that will meaningfully
improve financial stability given that previous efforts have not
always yielded intended results.
The city is looking to implement further program cuts,
departmental consolidations, and may seek waivers on state
mandated expenditures. In addition, currently pending state
legislation related to pensions could reduce city pension costs by
about an estimated $3 million, according to city officials.
The city's revenue raising flexibility is limited due to statewide
annual limits on property tax levies. The city was able to exceed
the statewide property tax levy cap limit in fiscal year 2011 with
approval by 4/5ths of city council to make up for cuts in state
aid revenues. To offset declines in city revenues in recent
years, the city has been cutting expenses in all areas, including
reduced payroll costs through attrition, furlough days, reduced
salaries, and unpaid vacation days. In addition, the city has
been working with its unions to reduce labor costs. Despite these
efforts the city is again in a position of needing a financing
solution to its operating problems after having issued the
aforementioned deficit financing in 2011.
Woonsocket, located 15 miles outside of Providence, has a
population of 41,186 and a tax base of about $1.8 billion. The
city benefits from the presence of CVS Caremark Corporation, which
maintains its headquarters in the city and is the city's largest
employer, employing about 5,780. Median household income of
$41,001 and per capita income of $20,846 are below average at 74%
and 73% of state averages, respectively. Unemployment rates
continue to be elevated at 12.3% for 2011 but have declined from
13.1% a year prior. Between 2000 and 2010, the city's population
declined by about 5%, while the state's increased by less than 1%
and the nation's grew by about 10%.
Overall debt levels are high at $3,265 per capita and 7.6% of
market value. These levels are net of state debt service
reimbursements on the city's public school revenue bonds issued by
the Rhode Island Health and Education Building Corporation and
include the city's 2002 GO pension bonds.
The city administered pension plan is funded at a low 60.7%, with
an unfunded liability of $42 million at July 1, 2011. The city's
OPEB liability as of July 1, 2011 was equal to a high $127 million
and the school department's OPEB liability was $47 million; both
amounts include assumptions of a 4% investment rate of return.
XEROX CORP: Moody's Gives '(P)Ba1' Preferred Shelf Rating
---------------------------------------------------------
Moody's Investors Service issued a summary credit opinion on Xerox
Corporation and includes certain regulatory disclosures regarding
its ratings. The release does not constitute any change in Moody's
ratings or rating rationale for Xerox.
Moody's current ratings for Xerox are as follows:
Xerox Corporation
Senior Unsecured Rating -- Baa2
Senior Unsecured MTN Rating -- (P)Baa2
Senior Unsecured Bank Credit Facility Rating -- Baa2
Senior Unsecured Shelf Rating -- (P)Baa2
Subordinate Shelf Rating -- (P)Baa3
Preferred Shelf Rating -- (P)Ba1
Commercial Paper Rating -- P-2
Ratings Rationale
Xerox's long-term senior unsecured rating of Baa2 reflects its
solid market position in the mature, highly competitive, and low
growth office equipment sector. While Xerox's equipment sales
business is cyclical, its aftermarket supplies and services
business adds stability to the company's earnings and cash flow
even in a weak macro-economic environment. Xerox's scale of
operations and extensive client base help it to sustain the
consistent product development and marketing efforts that are
critical to maintaining a compelling product and service offering
across its very broad customer base. We expect the expanded
business process outsourcing (BPO) strategy will improve Xerox's
competitive position by strengthening the value proposition that
it can offer to clients. With good diversification across
geographies, end markets and customers, Xerox's business also has
annuity-like characteristics accounting for roughly 85% of its
revenue base. An important challenge as Xerox grows its BPO
business, will be to effectively manage operating costs given
gross margins will initially exhibit some compression as a result
of the upfront investments that will be made by Xerox to
facilitate new customer programs. We expect adjusted leverage to
decline modestly to about 2x total debt to EBITDA over the next
year principally from EBITDA expansion given that the majority of
free cash flow is likely to be allocated to acquisitions and share
purchases. We anticipate that annual debt maturities will be
manageable through any combination of refinancing in the capital
markets or repayment of maturities with cash balances, commercial
paper and/or revolver borrowings.
The positive rating outlook incorporates our expectation that
Xerox will generate solid and consistent free cash flow and that
adjusted total debt to EBITDA will decline modestly to 2x over the
near-term.
Ratings could be upgraded if Xerox: (i) demonstrates consistent
business execution including modest revenue growth in the low-
single digits, continued operating margin stability, and
consistent cash flow generation; (ii) maintains good financial
discipline and operating cost controls as it grows its revenue
base; (iii) sustains consolidated operating margins above 9%
(Moody's adjusted); (iv) sustains adjusted total debt to EBITDA at
or below 2x; (v) continues to generate adjusted free cash flow of
$2 billion annually; and (vi) maintains a strong liquidity profile
with cash balances of at least $750 million and access to its $2
billion revolving credit facility.
Ratings could be downgraded or the outlook stabilized if Xerox's
financial performance erodes resulting in operating margins
falling below 7% (Moody's adjusted) for a sustained period; or
(ii) deterioration in its finance operations as a result of a
material weakening of asset quality. A downward rating action
could also occur if Xerox incurs leverage to undertake any
combination of share buybacks, dividends or significant debt-
financed acquisitions that result in adjusted total debt to EBITDA
above 3x for a sustained period.
The principal methodology used in rating Xerox was the Global
Technology Hardware Rating Methodology published in October 2010.
* Moody's Says Outlook for US Mortgage Insurers Changed to Neg
--------------------------------------------------------------
Moody's Investors Service has changed its outlook for the US
mortgage insurance industry to negative from developing. The
outlook represents Moody's view of the fundamental credit
conditions for US mortgage insurers over the next 12-18 months.
"The outlook change reflects mortgage insurers' continued weak
performance, including their stressed capital positions and
continued material uncertainty about the ultimate magnitude of
losses related to the financial crisis," says Associate Managing
Director Stanislas Rouyer.
Mortgage insurers' performance in 2011 was characterized by
continued erosion of their economic and regulatory capital bases,
and continued mortgage losses. The ratings of four of the six
companies Moody's rated at the beginning of 2011 were lowered, and
two of those firms are now under regulatory supervision.
"Although new delinquencies appear to have stabilized in the past
two years, their elevated number remains a drain on earnings,"
added Vice President-Senior Credit Officer Ilya Serov, the author
of the report. Home values are expected to remain flat, he says,
with some potential for further decline. As a consequence,
underwater mortgages and the risk of elevated defaults are likely
to remain features of the market for some time to come.
Mortgage insurers have been unable to mitigate losses from legacy
vintages through new production, with volumes remaining
substantially lower than before the crisis. Investors remain
reluctant to provide new capital in the absence of greater clarity
on ultimate losses and the long-term demand for private mortgage
insurance, with companies' capital positions weakening as a
result.
Whether mortgage insurers' business models are sustainable in the
long-run also remains unclear, says Serov. Uncertain dynamics of
the mortgage finance market, including the outcome of the
government's evaluation of changes to the GSEs (Fannie Mae and
Freddie Mac) and the role of mortgage insurers in the mortgage
finance market are material long-term concerns.
Nevertheless, those firms that are able to successfully navigate
current challenges may in the future benefit from limited
competition, while new business may be both more profitable due to
higher premiums and carry less risk due to tighter underwriting
standards.
The report is titled "US Mortgage Insurers: Negative Outlook" and
is available on moodys.com.
* Moody's Says Canadian Provinces Consolidating Finances in 2012
----------------------------------------------------------------
Canadian provinces have switched their focus to eliminating
deficits and consolidating finances, but subdued economic growth
in 2012 and 2013 will test the provinces' abilities to meet their
medium-term fiscal plans, says Moody's Investors Service in a new
report.
"Although provincial revenues improved in 2010-11 with the
economic recovery, growth in Canada's economy has moderated and
will remain subdued over the near term," said Associate Vice
President -- Analyst Jennifer Wong, author of the report. While
revenues continue to grow at a moderate pace, provinces are facing
expense pressures, particularly from priority programs in health
and education.
"The provinces have the fiscal flexibility to reverse the recent
financial deterioration, but the task will be more challenging for
some, and provinces still need to clearly elaborate how they will
achieve their medium-term targets," said Ms. Wong. "A failure to
communicate and implement clear, realistic and effective fiscal
consolidation plans could lead to downward rating pressure for
some of the provinces."
Overall, the rating agency does not anticipate widespread rating
adjustments in 2012 because core factors underpinning provincial
ratings will not be adversely affected. Those factors include the
provinces' strong shock-absorption capacity and solid
institutional framework.
The report, "Canadian Provinces Consolidating Finances in 2012,"
is available at moodys.com.
* Moody's Says Not-Profit Hospital Consolidation Trend Positive
---------------------------------------------------------------
A new trend in favor of not-for-profit hospital consolidation that
promises greater operating efficiencies and an ability to spread
risk across larger organizations will likely lead to stronger and
more stable bond ratings, says Moody's Investors Service in a new
report.
"Consolidation can also provide an exit strategy for bondholders
if the debt is fully redeemed or guaranteed by the consolidator,"
said Moody's Associate Managing Director Lisa Goldstein, author of
the report. "However, consolidation participants vary greatly and
consolidation models are different, each with unique credit
risks."
Moody's reports the latest wave of hospital consolidation is
taking place in response to emerging issues like reimbursement
challenges, spiraling health care costs, and a slow economic
recovery. Deep and impactful payment changes that are undoubtedly
coming with federal healthcare reform is another.
"Management teams, especially those leading smaller stand-alone
hospitals without the financial or management resources of larger
multi-hospital systems are seeking long-term partnerships," said
Goldstein.
Moody's reports that the last pronounced wave of hospital
consolidation took place in the late 1990s to mid 2000s when
hospital mergers and acquisitions were affected with a singular
goal to increase market share and negotiating leverage with
commercial payers.
"Size and scale remain important drivers to today's consolidation
strategies, but the opportunities to gain leverage and higher
rates from commercial payers are quickly dissipating," said
Goldstein. "Size and scale are now an important means to gaining
greater efficiencies and driving waste and costs out of the
delivery system."
She said the ability to demonstrate lower costs while providing
high-quality care will be the key driver in governmental and
commercial reimbursement. Physician alignment, another form of
consolidation that many are pursuing, is also designed to control
costs and drive improved quality by adopting evidence-based
medicine.
The report, "New Forces Driving Rise in Not-for-Profit Hospital
Consolidation," is available at moodys.com.
* 2nd Cir. Appoints Nancy Lord as E.D.N.Y. Bankruptcy Judge
-----------------------------------------------------------
The Second Circuit Court of Appeals appointed Bankruptcy Judge
Nancy Hershey Lord to a fourteen-year term of office in the
Eastern District of New York, Brooklyn, effective February 29,
2012. (vice, Milton).
Judge Hershey can be reached at:
Honorable Nancy Hershey Lord
United States Bankruptcy Court
Conrad B. Duberstein
United States Courthouse
271 Cadman Plaza, East
Brooklyn, NY 11201
Telephone: (347) 394-1850
Fax: (347) 394-1855
Law Clerks:
Matthew G. LeVien
Telephone: (347) 394-1851
Nicole D. Mignone
Telephone: (347) 394-1853
Term expiration: February 28, 2026
* BOND PRICING -- For Week From Feb. 27 to March 2, 2012
--------------------------------------------------------
Company Coupon Maturity Bid Price
------- ------ -------- ---------
AMBAC INC 9.375 8/1/2011 11.125
AMBAC INC 9.500 2/15/2021 12.125
AMBAC INC 7.500 5/1/2023 13.000
AMBAC INC 5.950 12/5/2035 13.500
AMBAC INC 6.150 2/7/2087 0.500
AES EASTERN ENER 9.000 1/2/2017 32.000
AGY HOLDING COR 11.000 11/15/2014 37.125
AHERN RENTALS 9.250 8/15/2013 40.000
ALION SCIENCE 10.250 2/1/2015 62.250
AMER GENL FIN 4.625 3/15/2012 98.184
AMR CORP 9.200 1/30/2012 25.000
AM AIRLN PT TRST 10.180 1/2/2013 67.875
AM AIRLN PT TRST 9.730 9/29/2014 30.000
AMR CORP 6.250 10/15/2014 32.500
AMR CORP 10.200 3/15/2020 24.922
AMR CORP 9.880 6/15/2020 27.000
AMR CORP 10.290 3/8/2021 19.100
AMR CORP 10.550 3/12/2021 27.136
AMR CORP 10.000 4/15/2021 29.450
AMR CORP 10.125 6/1/2021 15.500
AMR CORP 9.750 8/15/2021 29.000
AMR CORP 9.800 10/1/2021 24.274
AMERICAN ORIENT 5.000 7/15/2015 44.118
AQUILEX HOLDINGS 11.125 12/15/2016 40.000
BROADVIEW NETWRK 11.375 9/1/2012 92.250
CDWC-CALL03/12 11.000 10/12/2015 106.000
CIT-CALL03/12 7.000 5/1/2016 100.000
CIT-CALL03/12 7.000 5/1/2017 100.000
DELTA AIR 1992B1 9.375 9/11/2017 27.000
DELTA AIR 1993A1 9.875 4/30/2049 20.500
DIRECTBUY HLDG 12.000 2/1/2017 23.000
DELTA PETROLEUM 3.750 5/1/2037 65.000
DUNE ENERGY INC 10.500 6/1/2012 93.000
EASTMAN KODAK CO 7.250 11/15/2013 26.857
EASTMAN KODAK CO 7.000 4/1/2017 26.220
EASTMAN KODAK CO 9.950 7/1/2018 28.200
ENERGY CONVERS 3.000 6/15/2013 50.750
EVERGREEN SOLAR 13.000 4/15/2015 50.000
FIBERTOWER CORP 9.000 11/15/2012 15.250
GREAT ATLANTIC 9.125 12/15/2011 2.000
GLB AVTN HLDG IN 14.000 8/15/2013 33.200
GMX RESOURCES 5.000 2/1/2013 56.689
GMX RESOURCES 5.000 2/1/2013 66.750
GMX RESOURCES 4.500 5/1/2015 40.000
GLOBALSTAR INC 5.750 4/1/2028 55.375
HAWKER BEECHCRAF 8.500 4/1/2015 18.000
HAWKER BEECHCRAF 9.750 4/1/2017 6.000
ELEC DATA SYSTEM 3.875 7/15/2023 93.060
HORIZON LINES 6.000 4/15/2017 20.000
KELLWOOD CO 7.625 10/15/2017 29.000
LEHMAN BROS HLDG 6.000 7/19/2012 27.563
LEHMAN BROS HLDG 5.000 1/22/2013 25.470
LEHMAN BROS HLDG 5.625 1/24/2013 28.125
LEHMAN BROS HLDG 5.100 1/28/2013 25.630
LEHMAN BROS HLDG 5.000 2/11/2013 26.000
LEHMAN BROS HLDG 4.800 2/27/2013 26.000
LEHMAN BROS HLDG 4.700 3/6/2013 26.500
LEHMAN BROS HLDG 5.000 3/27/2013 26.010
LEHMAN BROS HLDG 5.750 5/17/2013 27.500
LEHMAN BROS HLDG 5.250 1/30/2014 26.000
LEHMAN BROS HLDG 4.800 3/13/2014 27.750
LEHMAN BROS HLDG 5.000 8/3/2014 25.500
LEHMAN BROS HLDG 6.200 9/26/2014 28.375
LEHMAN BROS HLDG 5.150 2/4/2015 25.500
LEHMAN BROS HLDG 5.250 2/11/2015 25.760
LEHMAN BROS HLDG 8.800 3/1/2015 26.028
LEHMAN BROS HLDG 7.000 6/26/2015 24.000
LEHMAN BROS HLDG 8.500 8/1/2015 25.002
LEHMAN BROS HLDG 5.000 8/5/2015 25.630
LEHMAN BROS HLDG 7.000 12/18/2015 26.000
LEHMAN BROS HLDG 5.500 4/4/2016 26.392
LEHMAN BROS HLDG 8.920 2/16/2017 26.000
LEHMAN BROS HLDG 11.000 6/22/2022 25.750
LEHMAN BROS HLDG 11.000 7/18/2022 26.500
LEHMAN BROS HLDG 11.500 9/26/2022 25.750
LEHMAN BROS HLDG 9.500 12/28/2022 25.869
LEHMAN BROS HLDG 10.375 5/24/2024 26.125
LEHMAN BROS INC 7.500 8/1/2026 3.000
LEHMAN BROS HLDG 11.000 3/17/2028 26.510
ELI LILLY & CO 3.550 3/6/2012 100.119
LIFECARE HOLDING 9.250 8/15/2013 74.324
MASHANTUCKET PEQ 8.500 11/15/2015 5.025
MF GLOBAL HLDGS 6.250 8/8/2016 32.000
MF GLOBAL LTD 9.000 6/20/2038 33.125
MANNKIND CORP 3.750 12/15/2013 56.750
PMI GROUP INC 6.000 9/15/2016 22.625
PENSON WORLDWIDE 8.000 6/1/2014 41.536
POWERWAVE TECH 3.875 10/1/2027 40.076
POWERWAVE TECH 3.875 10/1/2027 38.310
RAD-CALL03/12 8.625 3/1/2015 101.492
REDDY ICE CORP 13.250 11/1/2015 49.000
REAL MEX RESTAUR 14.000 1/1/2013 45.900
RESIDENTIAL CAP 6.500 6/1/2012 90.500
RESIDENTIAL CAP 8.500 4/17/2013 58.000
COMPLETE PR-CALL 8.000 12/15/2016 104.080
THORNBURG MTG 8.000 5/15/2013 7.958
THQ INC 5.000 8/15/2014 50.000
TOUSA INC 9.000 7/1/2010 12.967
TOUSA INC 9.000 7/1/2010 13.000
TRAVELPORT LLC 11.875 9/1/2016 35.000
TRAVELPORT LLC 11.875 9/1/2016 32.000
TIMES MIRROR CO 7.250 3/1/2013 35.000
MOHEGAN TRIBAL 8.000 4/1/2012 98.549
MOHEGAN TRIBAL 7.125 8/15/2014 66.125
TEXAS COMP/TCEH 7.000 3/15/2013 45.000
TEXAS COMP/TCEH 10.250 11/1/2015 26.000
TEXAS COMP/TCEH 10.250 11/1/2015 26.181
TEXAS COMP/TCEH 10.250 11/1/2015 27.600
VERSO PAPER 11.375 8/1/2016 50.250
WILLIAM LYONS 7.625 12/15/2012 30.000
WILLIAM LYON INC 10.750 4/1/2013 28.000
WILLIAM LYON INC 7.500 2/15/2014 29.000
WASH MUT BANK FA 5.650 8/15/2014 0.500
*********
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, Ivy B. Magdadaro, 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
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re-mailing and photocopying) is strictly prohibited without prior
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herein is obtained from sources believed to be reliable, but is
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*** End of Transmission ***