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T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, April 10, 2012, Vol. 16, No. 99
Headlines
AEOLUS PHARMACEUTICALS: Has Agreement to Sell $660,049 Units
AFA FOODS: Yucaipa Can Credit Bid in Asset Sale
AFA FOODS: Has Go-Signal to Hire KCC as Claims Agent
AHERN RENTALS: Noteholders Oppose 4-Month Exclusivity Extension
ALTER COMMUNICATIONS: Judge Approves $1.26MM Sale to Route 95
AMBER RESOURCES: Filing of Form 10-K for 2011 Will Be Delayed
AMERICAN AIRLINES: Taps Dewey & LeBoeuf for GDS Litigation
AMERICAN AIRLINES: Has HFB as Local Counsel for GDS Case
AMERICAN AIRLINES: Has Yetter Coleman as GDS Case Trial Attorney
AMERICAN AIRLINES: Winstead PC Evaluating Contracts
AMERICAN APPAREL: Has $49 Million Net Sales in March
AMERICAN MARINE: Receiver Wants Judge to Confirm Authority
AMERICAN REALTY: Moody's Raises Corp. Family Rating to 'Ba2'
ANDERSON NEWS: Antitrust Case vs. Media Firms to Move Forward
ARCADIA RESOURCES: In Forbearance Talks; Fails to Pay 30MM Notes
AS SEEN ON TV: Randolph Pohlman Named to Board of Directors
ATLANTIC & PACIFIC: Files Supplement on Composition of New Board
ATLANTIC & PACIFIC: FELRA Fund Appeals Confirmation of Plan
AUGUST CAYMAN: Moody's Assigns 'B2' CFR; Outlook Stable
AUTOTRADER.COM INC: Moody's Rates New $200MM Secured Loan 'Ba3'
AVAYA INC: Moody's Says PE Support Bolsters Radvision Buyout
AVIS BUDGET: Fitch Puts Rating on Two Senior Notes at Low-B
BERNARD L. MADOFF: Wives of Madoff Sons to Face Suit
BIO-RAD LABS: Moody's Revises Outlook on 'Ba1' CFR to Positive
BLITZ USA: Creditors' Panel Objects Exclusivity Extension
BLUEGREEN CORP: Extends Maturity of Club 36 Loan to June 2013
BERNARD L. MADOFF: UBS, Others Ask 2nd Circ. to Bury $30BB Claims
BERNARD L. MADOFF: Liquidator Seeks $2.6MM in 7 Latest Suits
BNC FRANCES: Lender Disputes Bid to Use Cash Collateral
BNC FRANCES: Taps Eric Liepins as Chapter 11 Counsel
BNC FRANCES: Lender Objects to Hiring of Insider
BNC FRANCES: Sec. 341 Creditors' Meeting Set for May 1
BURGER KING: Fitch Affirms Junk Rating on $672-Mil. Discount Notes
CAGLE'S INC: Koch-Led Auction Set for May 10
CAMBRIDGE HEART: McGladrey & Pullen Raises Going Concern Doubt
CANO PETROLEUM: Hires Canaccord Genuity as Investment Banker
CANO PETROLEUM: Court OKs Supplemental Agreement With BMC Group
CANO PETROLEUM: Hires Blackhill's Latimer as CRO
CAPROCK WINE: No Backup Bidder Costs Ch. 11 Trustee $4 Million
CAPSTONE INFRASTRUCTURE: S&P Lowers Corp. Credit Rating to 'BB+'
CELANESE CORP: Moody's Revises Outlook on 'Ba2' CFR to Positive
CELANESE US: S&P Keeps 'BB' Corp. Credit Rating; Outlook Positive
CENGAGE LEARNING: S&P Revises Outlook on 'B-' Rating to Negative
CITIZENS CORP: Trustee Pursues Sale of Financial Data Technology
CLARE AT WATER: Deadline for Submitting Initial Bids Today
CLARE AT WATER: Files Amended Schedules of Assets and Liabilities
CLARE AT WATER: Again Amends Plan Ahead of April 24 Hearing
CONTRACT RESEARCH: Wants to Hire Jefferies as Financial Advisors
CONTRACT RESEARCH: Hires Carl Marks as Restructuring Advisors
CONTRACT RESEARCH: Wants Schedules Filing Deadline Extended
CONTRACT RESeARCH: April 24 Hearing on Proposed Bonuses
COOPER COS: S&P Ups Corp. Credit Rating From 'BB+'; Outlook Stable
COUGAR OIL: President G. Watt Resigned Effective March 31
CROWN CASTLE: Fitch Withdraws Proposed 'BB' Rating on $1BB Notes
CROWN CASTLE: Moody's Withdraws 'Ba1' Ratings on US$1-Bil. Notes
CROWN CASTLE: S&P Withdraws 'B-' Rating on $1-Bil. Senior Notes
DELOS AIRCRAFT: Moody's Rates $550MM Secured Credit Facility Ba3
DELTA PETROLEUM: Conway MacKenzie Provides Add'l Personnel
DELTA PETROLEUM: Tracinda Terminates Credit Agreement with BOA
DIALOGIC INC: Form 10-K Filing Delayed Amid Restructuring
DIAMOND BEACH VP: Sec. 341 Creditors' Meeting Set for May 15
DRI CORP: Levine Leichtman to Buy Business for $22.1 Million
DRI CORP: Taps Northen Blue as Bankruptcy Counsel
DRI CORP: Hires Finley Group's Rudisill as CRO
DRI CORP: Morgan Keegan to Assist in Marketing, Sale of Business
DRI CORP: Hiring Wyrick Robbins as Special Corporate Counsel
DUBAI INTERNATIONAL: Reaches Deal on $2.5-Bil. Restructuring
DUKE REALTY: Fitch Affirms Rating on Preferred Stock at 'BB'
DYNEGY INC: Has Agreement in Principle With Creditors
EIG INVESTORS: Moody's Affirms 'B1' CFR; Outlook Stable
ENERGY CONVERSION: Auction for Solar Business This Month
ENERGY CONVERSION: Can Use Cash Collateral Through April 24
ENERGY CONVERSION: Bonus Plan Approved for Employees
ENERGY CONVERSION: Shareholders Seek Committee Appointment
ESSAR STEEL: S&P Lowers Corporate Credit Rating to 'CCC+'
FAIRFIELD SENTRY: Liquidator Files Nine New Suits
FEDERATED SPORTS: Files Schedules of Assets and Liabilities
GENMED HOLDING: Shareholders Approve New Bylaws
GINGRICH GROUP: Files for Chapter 7 Bankruptcy
GRACEWAY PHARMA: US Trustee Blasts Release Provisions in Plan
GRAND SOLEIL: RJB to Buy Hotel for $5.6 Million
GREENMAN TECHNOLOGIES: Iowa Line of Credit Expires April 30
HALLWOOD GROUP: Deloitte & Touche Raises Going Concern Doubt
HAMPTON ROADS: Names Geri Warren as Senior Vice President
HARRISBURG, PA: Maryland Sewer Chief Proposed for Incinerator
HASSAYAMPA GOLF: Files for Chapter 11 Bankruptcy Protection
HAWKER BEECHCRAFT: Moody's Cuts CFR/PDR to 'Ca'; Outlook Negative
HEALTH NET: Fitch Affirms 'BB+' Issuer Default Rating
HEARTLAND MEMORIAL: McGuireWoods Wants Malpractice Suit Tossed
HOFMEISTER PERSONAL: Judge Approves Bid to Hire Consultant
HOMEGOLD FINANCIAL: SC High Court Affirms Exec.'s Fraud Sentence
HOSTESS BRANDS: Execs Agree to Pay Cut Pending Bankruptcy Exit
HOSTESS BRANDS: Teamsters Outraged by Allegations of Looting
HOUGHTON MIFFLIN: Fitch's Junk Ratings Affect $3.1 Million Debt
HOVNANIAN ENTERPRISES: Offering 25 Million Class A Common Shares
HUDSON TREE: Has Bank 7 Loan to Refinance AgriLand Debt
INNOVARO INC: Expects 2011 Audit Report to Contain "Going Concern"
INTELSAT SA: Holdings Enters Into Reorganization Transactions
JABIL CIRCUIT: S&P Rates $1.3-Bil. Sr. Secured Revolver Loan 'BB+'
JEFFERSON COUNTY: Hearing Today on Sewer Revenue
JEFFERSON COUNTY: Bond Insurer Wants County to Raise Sewer Rates
JER/JAMESON: Hires PwC as Independent Accountants
KINETIC CONCEPTS: Moody's Says Surgical Mesh Offering Credit Neg.
KOLORFUSION INT'L: SEC Wants Common Stock Registration Revoked
KRONOS INT'L: Moody's Upgrades CFR to 'Ba3'; Outlook Stable
LAS VEGAS SANDS: S&P Raises Corp Credit Rating to BB+; Outlook Pos
LATTICE INC: Acquavella Chiarelli Raises Going Concern Doubt
LE-NATURE'S INC: BDO Seidman Settles $668 Million Investor Suit
LITHIUM TECHNOLOGY: Inks Second Amendment to Cicco SPA
LOS ANGELES DODGERS: Look to Exit Bankruptcy By End of Month
M WAIKIKI: Competing Plans to be Heard June 1
MAGELLAN HEALTH: S&P Raises Counterparty Credit Rating From 'BB+'
MENASHA, WI: Moody's Upgrades GOULT Rating to 'Ba2'
METHOD ART: Cash Collateral Hearing Set for April 13
MF GLOBAL: Bankruptcy Cues Fitch to Withdraw Ratings
MGM RESORTS: Tracinda Terminates Credit Agreement With BofA
MOMENTIVE PERFORMANCE: Moody's Corrects March 15 Ratings Release
NATIONAL QUALITY: Reports $2.74-Mil. Net Income in 2010
NCI BUILDING: Moody's Revises Outlook on 'B3' CFR to Stable
NET TALK.COM: Enters Into $500,000 Senior Secured Debenture
NEWPAGE CORP: Committee Seeks Lien-Related Extension
NEXICORE SERVICES: Paragon Advised in Sale to Avnet
NOBILITY HOMES: Receives NASDAQ Notice of Non-Compliance
NORCRAFT COS: S&P Keeps 'B' Corp. Credit Rating; Outlook Negative
ORAGENICS INC: Koski Family Discloses 81.5% Equity Stake
ORCKIT COMMUNICATIONS: NASDAQ Grants Request for Continued Listing
ORION ENERGY: Receives Approval from NYSE Amex on Compliance Plan
PARKERVISION INC: Recurring Losses Prompt Going Concern Doubt
PEMCO WORLD: Schedules May 23 Auction for Assets
PETTUS PROPERTIES: Files New Application to Employ Mitchell & Culp
PHOENIX COS: S&P Raises Counterparty Credit Rating to 'B-'
PINNACLE AIRLINES: Has Interim OK to Reject UAL Agreements
PL PROPYLENE: S&P Assigns B- Corp. Credit Rating; Outlook Positive
PLATO LEARNING: S&P Assigns 'B' Corp Credit Rating; Outlook Stable
PLC SYSTEMS: McGladrey & Pullen Raises Going Concern Doubt
PREMIER PAVING: Seeks to Use Wells Fargo's Cash Collateral
PREMIER PAVING: Hiring Kutner Miller as Bankruptcy Counsel
PREMIER PAVING: Sec. 341 Creditors' Meeting Set for April 30
PURADYN FILTER: Incurs $1.6 Million Net Loss in 2011
REDDY ICE: Bankruptcy Filing Seen This Week
ROOMSTORE INC: Gets Clearance to Move Forward With Store-Closings
ROSETTA GENOMICS: Kost Forer Raises Going Concern Doubt
ROTHSTEIN ROSENFELDT: Trustee, Insurers Want Hand in Deposition
SAINT VINCENTS: GE Capital DIP Loan Extended to June 28
SAPPHIRE VP: Sec. 341 Creditors' Meeting Set for May 15
SEDGWICK HOLDINGS: Moody's Affirms 'B2' CFR; Outlook Stable
SHERIDAN GROUP: Moody's Revises Outlook on 'B3' CFR to Negative
SIAG AERISYN: Hiring Samples Jennings as Chapter 11 Counsel
SIAG AERISYN: Sec. 341 Creditors' Meeting Set for May 1
SNOKIST GROWERS: Heads for Piecemeal Sale in Early May
SOLYNDRA LLC: Treasury Audit Finds Review of Loan Was 'Rushed'
STANADYNE HOLDINGS: James Borzi Named Chief Operating Officer
STAR BUFFET: Files Chapter 11 Plan of Reorganization
STOCKRIDGE/SBE HOLDINGS: S&P Assigns 'B-' Corporate Credit Rating
SUPERCONDUCTOR TECHNOLOGIES: Marcum LLP Raises Going Concern Doubt
SUPERMEDIA INC: Georgia Scaife Retires as EVP for Human Resources
SWIFT SERVICES: S&P Raises $500M Sr. Secured Note Rating to 'B+'
TASEKO MINES: Moody's Issues Summary Credit Opinion
TRAILER BRIDGE: Emerged From Chapter 11 on April 2
TRIDENT MICROSYSTEMS: Sigma Designs Okayed to Buy TV Business
TRIDENT USA: S&P Assigns Preliminary 'B' Corp. Credit Rating
US FIDELIS: Ex-Owner Pleads Guilty of Customer Refunds Theft
VALDIVIA PRODUCE: Owes $1.2MM to 40 PACA Claimants
VIASYSTEMS GROUP: S&P Places 'BB-' Notes Rating on CreditWatch
VITRO SAB: U.S. Trial in June on Enforcement of Plan
WASHINGTON MUTUAL: Trustee to Issue Summary Statements April 16
WCA WASTE: Moody's Cuts Rating on Sr. Unsecured Notes to 'Caa2'
WEYERHAEUSER COMPANY: Moody's Issues Summary Credit Opinion
WHITE TIGER: Delays Filing Annual Finc'l Statements, MD&A AND AIF
ZOO ENTERTAINMENT: Jeffrey Schrock Appointed to Board
* Not Disclosing Lawsuit Proves Fatal for Bankrupt
* Friendship No Basis for Hiring a Lawyer, Judge Says
* Rooker-Feldman Not Applicable If Judgment Not Entered
* 5th Circ. Says Debtor Lost Right to Sue Tyson For Bias
* Moody's Says Low Prices Erode Margins of Unreg. Power Companies
* Moody's Says New Accounting Rules to Affect Insurers' Equity
* Moody's Says Rising Interest Rates to Hit US P&C Insurers
* U.S. High Yield Bond Market Completes Best Quarter
* Dewey Continues to Lose Another Round of Partners
* Large Companies With Insolvent Balance Sheets
*********
AEOLUS PHARMACEUTICALS: Has Agreement to Sell $660,049 Units
------------------------------------------------------------
Aeolus Pharmaceuticals, Inc., entered into a Securities Purchase
Agreement with certain accredited investors to sell and issue an
aggregate of approximately 2,200,166 units at a purchase price of
$0.30 per unit, resulting in aggregate gross proceeds to the
Company of approximately $660,049. Each Unit consists of (i) one
share of common stock and (ii) a five year warrant to purchase
0.75 shares of the Company's Common Stock. The Warrants have an
initial exercise price of $0.40 per share.
One of the Purchasers in the April 4, 2012, closing was Joseph
Krivulka, a member of the Company's Board of Directors, who
purchased 333,333 Units, resulting in aggregate proceeds of
$99,999 to the Company.
In connection with the Purchase Agreement, the Company entered
into a Registration Rights Agreement with the Purchasers.
Pursuant to the Registration Rights Agreement, the Company agreed
to file a registration statement with the Securities and Exchange
Commission within 45 days from closing to register the resale of
the Common Shares and shares of common stock issuable upon
exercise of the Warrants. The Company also agreed to use its best
efforts to have the registration statement declared effective as
promptly as possible after the filing thereof, but in any event
within 120 days from the filing date. The Company agreed to keep
the Registration Statement continuously effective until the
earlier to occur of (i) the date after which all of the
Registrable Securities registered thereunder have been sold and
(ii) the date on which all of the Registrable Securities covered
by the registration statement may be sold without volume
restrictions pursuant to Rule 144 under the Securities Act.
The Company has granted the Purchasers customary indemnification
rights in connection with the registration statement. The
Purchasers have also granted the Company customary indemnification
rights in connection with the registration statement.
About Aeolus Pharmaceuticals
Based in Mission Viejo, California, Aeolus Pharmaceuticals Inc.
(OTC BB: AOLS) -- http://www.aeoluspharma.com/-- is developing a
variety of therapeutic agents based on its proprietary small
molecule catalytic antioxidants, with AEOL 10150 being the first
to enter human clinical evaluation. AEOL 10150 is a patented,
small molecule catalytic antioxidant that mimics and thereby
amplifies the body's natural enzymatic systems for eliminating
reactive oxygen species, or free radicals. Studies funded by the
National Institutes for Health are currently underway evaluating
AEOL 10150 as a treatment for exposure to radiation, sulfur
mustard gas and chlorine gas. A second compound, AEOL 11207, has
demonstrated efficacy in animal models of Parkinson's disease and
is currently being evaluated as a potential treatment for
epilepsy.
The Company's balance sheet at Dec. 31, 2011, showed $2.77 million
in total assets, $22.85 million in total liabilities, and a
$20.08 million total stockholders' deficit.
Haskell & White LLP, in Irvine, Calif., expressed substantial
doubt about the Company's ability to continue as a going concern
following the fiscal 2011 financial results. The independent
auditors noted that the Company has suffered recurring losses,
negative cash flows from operations and management believes the
Company does not currently possess sufficient working capital to
fund its operations past the second quarter of fiscal 2012.
AFA FOODS: Yucaipa Can Credit Bid in Asset Sale
-----------------------------------------------
Yucaipa Corporate Initiatives Fund II LLC has the right to credit
bid in a sale of AFA Foods Inc.'s assets, according to a court
order issued in the case last week.
AFA Foods and its debtor-affiliates are borrowers under a second
lien agreement with Yucaipa as agent. The second lien facility
provided the Debtors with $75.6 million in term loans.
Last week, the Debtors received interim authority from the Court
to dip their hands into a portion of the $60.9 million DIP credit
facility from General Electric Capital Corporation as DIP agent
and Bank of America N.A. as DIP letter of credit issuer.
Specifically, the Debtors may immediately use $56 million of the
DIP loan. The Interim DIP Order provides that up to $4.9 million
of the interim DIP funds will be deemed advanced and applied to a
1:1 conversion with respect to over-advances under the Debtors'
prepetition first lien credit agreement with GECC and BofA.
The Debtors owe $11.5 million in term loans and $47.9 million in
revolving loans under the prepetition first lien credit facility
with lenders led by BofA, as letter of credit issuer, and GECC as
administrative and collateral agent.
Debtor American Fresh Foods LP is also the obligor under
industrial development bonds relating to the construction of a
facility in Thomasville, Georgia: the $1 million Thomasville
Payroll Development Authority Tax-Exempt Variable Rate
Demand/Fixed Rate Revenue Bonds (American Fresh Foods, L.P.
Project) Series 2005A, and the $7.425 million Thomasville Payroll
Development Authority.
The Interim DIP Order also authorizes the Debtors to use cash
collateral securing their obligations to the prepetition lenders.
The Debtors will grant the First and Second Lien Lenders adequate
protection liens on account of the cash collateral use.
The DIP facility and the Debtors' right to use cash collateral
will expire 120 after the petition date, unless terminated earlier
by the lenders due to an event of default.
The DIP loan requires a quick-sale of the assets. Under the terms
of the DIP financing, the Debtors are required to:
(i) no later than 14 days after the Petition Date, file a
motion under 11 U.S.C. Sec. 363 to sell substantially all
assets where the prepetition lenders would be the stalking
horse bidder;
(ii) no later than 28 days after the filing of the Bid
Procedures Motion, obtain approval of the Bid Procedures;
(iii) obtain one or more executed letters of intent to purchase
the Debtors' assets no later than 45 days after the
petition date;
(iv) conduct an auction no later than 76 days after the
Petition Date;
(v) obtain approval of the sale no later than 5 business days
after the auction; and
(vi) consummate the sale no later than 87 days after the
Petition Date.
According to Peg Brickley, writing for Dow Jones' Daily Bankruptcy
Review, Tobias Keller, Esq., an attorney with Jones Day,
representing AFA, told the Bankruptcy Judge at the April 3 hearing
that AFA hopes to find a buyer willing to save some of the beef
processing operation but won't try to survive the consumer
disaster that has hit the industry of ground-beef producers. Mr.
Keller said AFA plans to walk into a bankruptcy auction, probably
without an opening bidder, and close a deal within three months.
Mr. Keller also told the Court chances are the bankruptcy sale
won't raise enough to cover secured debt.
The Debtors will return to the Court on April 24 for a final
hearing on the DIP facility. Objections are due April 17.
About AFA Foods
King of Prussia, Pennsylvania-based AFA Foods Inc. is one of the
largest processors of ground beef products in the United States.
The Company has five processing facilities and two ancillary
facilities across the country with annual processing capacity of
800 million pounds. AFA has seven facilities capable of producing
800 million pound of ground beef annually. Revenue in 2011 was
$958 million.
Yucaipa Cos. acquired the business in 2008 and currently owns 92%
percent of the common stock and all of the preferred stock.
AFA Foods, AFA Investment Inc. and other affiliates filed for
Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11127) on
April 2, 2012, after recent changes in the market for its ground
beef products and the impact of negative media coverage related to
boneless lean beef trimmings -- BLBT -- affected sales.
Judge Mary Walrath presides over the case. Lawyers at Jones Day
and Pachulski Stang Ziehl & Jones LLP serve as the Debtors'
counsel. FTI Consulting Inc. serves as financial advisors and
Imperial Capital LLC serves as marketing consultants. Kurtzman
Carson Consultants LLC serves as claims and notice agent.
AFA FOODS: Has Go-Signal to Hire KCC as Claims Agent
----------------------------------------------------
AFA Foods Inc. and its debtor-affiliates sought and obtained
Bankruptcy Court permission to employ Kurtzman Carson Consultants
LLC as noticing and claims agent.
To the extent permitted by applicable law, KCC will receive a
$10,000 retainer that may be held by KCC as security for the
Company's payment obligations.
Drake D. Foster, General Counsel for KCC, attests that his firm
(a) is a "disinterested person" within the meaning of Section
101(14) of the Bankruptcy Code, and (b) does not hold or represent
an interest materially adverse to the Debtors' estates.
About AFA Foods
King of Prussia, Pennsylvania-based AFA Foods Inc. is one of the
largest processors of ground beef products in the United States.
The Company has five processing facilities and two ancillary
facilities across the country with annual processing capacity of
800 million pounds. AFA has seven facilities capable of producing
800 million pound of ground beef annually. Revenue in 2011 was
$958 million.
Yucaipa Cos. acquired the business in 2008 and currently owns 92%
percent of the common stock and all of the preferred stock.
AFA Foods, AFA Investment Inc. and other affiliates filed for
Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11127) on
April 2, 2012, after recent changes in the market for its ground
beef products and the impact of negative media coverage related to
boneless lean beef trimmings -- BLBT -- affected sales.
Judge Mary Walrath presides over the case. Lawyers at Jones Day
and Pachulski Stang Ziehl & Jones LLP serve as the Debtors'
counsel. FTI Consulting Inc. serves as financial advisors and
Imperial Capital LLC serves as marketing consultants.
AHERN RENTALS: Noteholders Oppose 4-Month Exclusivity Extension
---------------------------------------------------------------
BankruptcyData.com reports that certain holders of Ahern Rentals'
9.25% Second Priority Senior Secured Notes due Aug. 15, 2013 filed
with the U.S. Bankruptcy Court a response to the Company's motion
for an exclusivity extension.
The response asserts, "The Noteholder Group is surprised, under
the facts and circumstances of a year-long restructuring
initiative leading up to the chapter 11 filing, that the Debtor
asserts that it needs four more months to begin to develop a plan
of reorganization. While the Debtor's description of its business
as being 'large and complex' from an operational standpoint may
have some merit . . ., the Debtor's assertion that this is a
'complex' restructuring is unfounded. This chapter 11 case is not
a complex 'operational restructuring' but rather a simple 'balance
sheet restructuring' that can be accomplished more quickly (and at
substantially less administrative cost) than the Debtor claims."
As reported in the March 28, 2012 edition of the TCR, Ahern
Rentals is asking the Bankruptcy Court for an order extending the
120-day period for filing a plan of reorganization and the 180-day
period for securing acceptance of the plan by an additional 120
days, permitting the Debtor to file a plan up to and including
Aug. 20, 2012, and allowing the Debtor up to and including Oct.
19, 2012, to obtain plan votes.
A hearing on the request is set for April 13, 2012, at 3:00 p.m.
The Debtor said in the Exclusivity Extension Motion that it has
commenced discussions with creditor constituencies and has begun
formulating a plan of reorganization, but requires additional time
so that it may adequately review and analyze its cash flow and
operational projections and develop long-term projections for 2014
and 2015; perform a valuation analysis of its business; analyze
its executory contracts and leases; and analyze claims against the
Debtor, including personal injury claims.
About Ahern Rentals
Founded in 1953 with one location in Las Vegas, Nevada, Ahern
Rentals Inc. -- http://www.ahern.com/-- now offers rental
equipment to customers through its 74 locations in Arizona,
Arkansas, California, Colorado, Georgia, Kansas, Maryland,
Nebraska, Nevada, New Jersey, New Mexico, North Carolina, North
Dakota, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee,
Texas, Utah, Virginia and Washington.
Ahern Rentals filed a voluntary Chapter 11 petition (Bankr. D.
Nev. Case No. 11-53860) on Dec. 22, 2011, after failing to obtain
an extension of the Aug. 21, 2011 maturity of its revolving credit
facility. Judge Bruce T. Beesley presides over the case. Lawyers
at Gordon Silver serve as the Debtor's counsel. The Debtor's
financial advisors are Oppenheimer & Co. and The Seaport Group.
Kurtzman Carson Consultants LLC serves as claims and notice agent.
Counsel to Bank of America, as the DIP Agent and First Lien Agent,
are Albert M. Fenster, Esq., and Marc D. Rosenberg, Esq., at Kaye
Scholer LLP, and Robert R. Kinas, Esq., at Snell & Wilmer.
Attorneys for the Majority Term Lenders are Paul Aronzon, Esq.,
and Robert Jay Moore, Esq., at Milbank, Tweed, Hadley & McCloy
LLP. Counsel for the Majority Second Lienholder are Paul V.
Shalhoub, Esq., Joseph G. Minias, Esq., and Ana M. Alfonso, Esq.,
at Willkie Farr & Gallagher LLP. Attorney for GE Capital is James
E. Van Horn, Esq., at McGuirewoods LLP. Wells Fargo Bank is
represented by Andrew M. Kramer, Esq., at Otterbourg, Steindler,
Houston & Rosen, P.C. Allan S. Brilliant, Esq., and Glenn E.
Siegel, Esq., at Dechert LLP argue for certain revolving lenders.
Attorneys for U.S. Bank National Association, as successor to
Wells Fargo Bank, as collateral agent and trustee for the benefit
of holders of the 9-1/4% Senior Secured Notes Due 2013 under the
Indenture dated Aug. 18, 2005, is Kyle Mathews, Esq., at Sheppard,
Mullin, Richter & Hampton LLP and Timothy Lukas, Esq., at Holland
& Hart.
In its schedules, the Debtor disclosed $485,807,117 in assets and
$649,919,474 in liabilities.
The Official Committee of Unsecured Creditors has tapped Covington
& Burling LLP as counsel, Downey Brand LLP as local counsel, and
FTI Consulting as financial advisor.
ALTER COMMUNICATIONS: Judge Approves $1.26MM Sale to Route 95
-------------------------------------------------------------
Judge Nancy V. Alquist approved on April 5, 2012, the
$1.26 million sale of Alter Communications to Route 95
Publications, owner of Washington Jewish Week.
Jack Lambert at the Baltimore Business Journal reports that Louis
Mayberg, a partner with Route 95, said the Jewish Times will
maintain its Baltimore connections. "The Jewish Times is a
Baltimore-based paper, and it will remain a Baltimore-based
paper," the reports quotes Mr. Mayberg as saying.
The report notes Route 95 outbid Baltimore Community Publishing
LLC by $10,000 to acquire the Jewish Times. Baltimore Community
Publishing is a local group headed by Dr. Scott Rifkin, an
executive with Mid-Atlantic Health Care. Mr. Rifkin proposed in
January to pay $600,000 for a majority stake in the Jewish Times.
The Baltimore Sun reported that Route 95 is publisher of
Washington Jewish Week.
About Alter Communications
Based in Baltimore, Maryland, Alter Communications publishes the
Baltimore Jewish Times. Other publications include the magazine
Style, with 90,000 circulation, and Chesapeake Life, with a
circulation of 57,000.
Alter Communications filed for Chapter 11 bankruptcy (Bankr. D.
Md. Case No. 10-18241) on April 14, 2010, after losing a $362,000
judgment to the printer, H.G. Roebuck & Son Inc. Alan M. Grochal,
Esq., and Maria Ellena Chavez-Ruark, Esq., at Tydings and
Rosenberg, in Baltimore, serve as the Debtor's bankruptcy counsel.
The Debtor estimated assets and debts between $1 million and
$10 million in its Chapter 11 petition.
In December 2010, the Bankruptcy Court approved Alter's Chapter 11
exit plan. Roebuck appealed, saying the plan wasn't filed in good
faith and that it "discriminates unfairly."
In June 2011, the U.S. District Judge Court in Maryland set aside
the confirmation order. Because Roebuck said it would pay more
for the new stock, the District Court reversed and sent the case
back to the bankruptcy court with instructions to allow the filing
of competing plans. After the plan was set aside, the bankruptcy
judge ordered the appointment of a Chapter 11 trustee.
AMBER RESOURCES: Filing of Form 10-K for 2011 Will Be Delayed
-------------------------------------------------------------
Amber Resources Company of Colorado is unable to file its Annual
Report on Form 10-K for the year ended Dec. 31, 2011, due to the
fact that March 23, 2012, was the last date on which most claims
could be filed in connection with the Company's pending bankruptcy
proceeding. The Company is currently analyzing the claims that
were submitted and making a determination as to how such claims
will have an impact on the financial statements and other
disclosures in the Company's Form 10-K; however, the Company will
not be able to complete that process prior to the current due date
for the Form 10-K.
About Amber Resources
Amber Resources Company of Colorado does not have significant
operations. Previously, it was engaged in acquiring, exploring,
developing, and producing offshore oil and gas properties. The
Company, formerly known as Amber Resources Company, was founded in
1978 and is based in Denver, Colorado. Amber Resources Company of
Colorado is a subsidiary of Delta Petroleum Corporation.
On Dec. 16, 2011, Amber Resources Company of Colorado filed a
voluntary petition in the United States Bankruptcy Court for the
District of Delaware seeking relief under the provisions of
Chapter 11 of the United States Bankruptcy Code. The filing, Case
No. 11-11-14013 (KJC), was filed in connection with other filings
made by Delta Petroleum Corporation and its subsidiaries.
About Delta Petroleum
Delta Petroleum Corporation (NASDAQ: DPTR) is an independent oil
and gas company engaged primarily in the exploration for, and the
acquisition, development, production, and sale of, natural gas and
crude oil. Natural gas comprises over 90% of Delta's production
services. The core area of its operations is the Rocky Mountain
Region of the United States, where the majority of the proved
reserves, production and long-term growth prospects are located.
Delta and seven of its subsidiaries sought Chapter 11 bankruptcy
protection (Bankr. D. Del. Case Nos. 11-14006 to 11-14013,
inclusive) on Dec. 16, 2011, roughly six weeks before the Jan. 31,
2012 scheduled maturity of its $38.5 million secured credit
facility with Macquarie Bank Limited and after several months of
unsuccessful attempts to sell the business. Delta disclosed
$375,498,248 in assets and $310,679,157 in liabilities, which also
include $152,187,500 in outstanding obligations on account of the
7% senior unsecured notes issued in March 2005 with US Bank
National Association indenture trustee; and $115,527,083 in
outstanding obligations on account of 3-3/4% Senior Convertible
Notes due 2037 issued in April 2007. In its amended schedules,
the Delta Petroleum disclosed $373,836,358 in assets and
$312,864,788 in liabilities.
W. Peter Beardsley, Esq., Christopher Gartman, Esq., Kathryn A.
Coleman, Esq., and Ashley J. Laurie, Esq., at Hughes Hubbard &
Reed LLP, in New York, N.Y., represent the Debtors as counsel.
Derek C. Abbott, Esq., Ann C. Cordo, Esq., and Chad A. Fights,
Esq., at Morris, Nichols, Arsht & Tunnel LLP, in Wilmington, Del.,
represent the Debtors as co-counsel. Conway Mackenzie is the
Debtors' restructuring advisor. Evercore Group L.L.C. is the
financial advisor and investment banker. The Debtors selected
Epiq Bankruptcy Solutions, LLC as claims and noticing agent. The
petition was signed by Carl E. Lakey, chief executive officer and
president.
Delta will hold an auction for the business on March 26, 2012. No
buyer is under contract. There is $57.5 million in financing for
the Chapter 11 effort.
The U.S. Trustee told the bankruptcy judge that there was
insufficient interest from creditors to form an official committee
of unsecured creditors.
AMERICAN AIRLINES: Taps Dewey & LeBoeuf for GDS Litigation
----------------------------------------------------------
AMR Corp. and its affiliates seek permission from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Dewey & LeBoeuf LLP as their special litigation counsel, nunc pro
tunc to the Petition Date.
In January 2011, American Airlines, Inc., filed a lawsuit against
Sabre Inc., Sabre Holdings Corp., and Sabre Travel International,
Ltd. d/b/a Sabre Travel Network in the District Court of the 67th
Judicial District in Tarrant County, Texas. In April 2011,
American Airlines also filed an antitrust lawsuit against
Travelport Limited and Travelport, L.P., Orbitz Worldwide LLC and
Sabre in the U.S. District Court for the Northern District of
Texas. The Federal Action and State Action are collectively
referred to as the GDS Litigation.
Dewey & LeBoeuf has served as counsel for American Airlines on
the GDS Litigation since the commencement of the State and
Federal Actions. Dewey and LeBoeuf also represents the Debtors
in various prepetition litigation matters unrelated to these
chapter 11 cases and regularly provides antitrust counseling on
matters unrelated to these chapter 11 cases.
Dewey & LeBoeuf was authorized to continue representing the
Debtors on American Matters under the OCP Order. In addition to
rendering services on Litigation Matters and Antitrust Matters,
Dewey & LeBoeuf attorneys have been actively involved in trial
preparation for the State Action and representation in the
Federal Action, which involves several million pages of discovery
and potentially taking and defending more than 90 depositions.
As a result, Dewey & LeBoeuf's postpetition fees and expenses
relating to American Matters have exceeded the $50,000 monthly
cap under the OCP Order. Thus, the Debtors seek to employ Dewey
& LeBoeuf as special counsel under Section 327(e) of the
Bankruptcy Code.
Randall J. White, Esq., associate general counsel of AMR Corp.,
states that if the Debtors were required to retain counsel other
than Dewey & LeBoeuf, the Debtors, their estates, and all parties-
in-interest would be severely prejudiced, as the Debtors would
lose Dewey & LeBoeuf's invaluable experience and expertise on
Antitrust Matters, the State Action, the Federal Action, and
Litigation Matters.
In connection with the GDS Litigation, the Debtors have submitted
separate applications to retain Yetter Coleman LLP and Harris,
Finley & Bogle, P.C. To avoid duplication of services, Weil,
Gotshal & Manges LLP and Yetter Coleman serve as trial counsel
and Harris Finley serves as local counsel, Mr. White says.
The Debtors will pay Dewey & LeBoeuf's professionals according to
their customary hourly rates. The firm's customary hourly rates
are $995 to $800 for partners and counsel, $760 to $395 for
associates, and $275 to $210 for paraprofessionals. Dewey &
LeBoeuf also intends to seek reimbursement for expenses incurred.
Mary Jean Moltenbrey, Esq., at Dewey & LeBoeuf LLP, in
Washington, D.C. -- mmoltenbrey@dl.com -- discloses that her firm
currently represents and represented certain parties in matters
unrelated to the Debtors' Chapter 11 cases. A list of the
clients is available for free at:
http://bankrupt.com/misc/AmAir_DeweyClients.pdf
Mr. Molternbrey also discloses that Dewey & LeBoeuf also currently
represents Law Debenture Trust Company of New York, Infosys, and
U.S. Bank National Association, in matters unrelated to the firm's
engagement.
Dewey & LeBoeuf is owed by the Debtors $564,341 for services
provided and expenses incurred between Aug. 1, 2011, and the
Petition Date, Ms. Moltenbrey discloses.
Notwithstanding those disclosures, Ms. Moltenbrey maintains that
Dewey & LeBoeuf is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on
$18.02 billion of total operating revenues for the nine months
ended Sept. 30, 2011. AMR recorded a net loss of $471 million in
the year 2010, a net loss of $1.5 billion in 2009, and a net loss
of $2.1 billion in 2008.
The Company's balance sheet at Sept. 30, 2011, showed
$24.72 billion in total assets, $29.55 billion in total
liabilities, and a $4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000 ).
AMERICAN AIRLINES: Has HFB as Local Counsel for GDS Case
--------------------------------------------------------
AMR Corp. and its affiliates seek permission from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Harris, Finley & Bogle, P.C., as their special litigation counsel
in connection with the so-called GDS Litigation, nunc pro tunc to
the Petition Date.
In January 2011, American Airlines, Inc., filed a lawsuit against
Sabre Inc., Sabre Holdings Corp., and Sabre Travel International,
Ltd. d/b/a Sabre Travel Network in the District Court of the 67th
Judicial District in Tarrant County, Texas. In April 2011,
American Airlines also filed an antitrust lawsuit against
Travelport Limited and Travelport, L.P., Orbitz Worldwide LLC and
Sabre in the U.S. District Court for the Northern District of
Texas. The Federal Action and State Action are collectively
referred to as the GDS Litigation.
Harris Finley has served as local counsel for American Airlines
on the GDS Litigation since the commencement of the State and
Federal Actions and, as such, has been involved in all aspects of
the litigation. Harris Finley was authorized to continue
representing American Airlines in the GDS Litigation under the
OCP Order.
Harris Finley has been actively involved in trial preparation for
the State Action and representation in the Federal Action. As a
result, Harris Finley's postpetition fees and expenses in
connection with the GDS Litigation have exceeded the $50,000
monthly cap under the OCP Order. The Debtors also anticipate
that Harris Finley's fees will continue to exceed the cap under
the OCP Order as the trial in the State Action approaches. Thus,
the Debtors seek to retain Harris Finley as special counsel in
connection with the GDS Litigation under Section 327(e) of the
Bankruptcy Code.
The Debtors will pay Harris Finley according to its
professionals' customary hourly rates. The specific customary
hourly rates of the firm's professionals are $265 to $400 for
shareholders, $225 to $265 for associates, and $120 to $125 for
paraprofessionals. Harris Finley will also seek reimbursement
for reasonable expenses incurred.
Bill F. Bogle, Esq., a shareholder at Harris, Finley & Bogle,
P.C., in Fort Worth, Texas -- bbogle@HarrisFinleylaw.com --
discloses that his firm performed legal services for various
parties-in-interest in matters wholly unrelated to the GDS
Litigation and the Debtors' Chapter 11 cases. A copy of the
disclosure is available for free at:
http://bankrupt.com/misc/AmAir_HarrisClients.pdf
Mr. Bogle assures the Court that Harris Finley is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code.
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on
$18.02 billion of total operating revenues for the nine months
ended Sept. 30, 2011. AMR recorded a net loss of $471 million in
the year 2010, a net loss of $1.5 billion in 2009, and a net loss
of $2.1 billion in 2008.
The Company's balance sheet at Sept. 30, 2011, showed
$24.72 billion in total assets, $29.55 billion in total
liabilities, and a $4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000 ).
AMERICAN AIRLINES: Has Yetter Coleman as GDS Case Trial Attorney
----------------------------------------------------------------
AMR Corp. and its affiliates seek authority from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Yetter Coleman LLP as their special litigation counsel, nunc pro
tunc to the Petition Date, in connection with the so-called GDS
Litigation.
In January 2011, American Airlines, Inc., filed a lawsuit against
Sabre Inc., Sabre Holdings Corp., and Sabre Travel International,
Ltd. d/b/a Sabre Travel Network in the District Court of the 67th
Judicial District in Tarrant County, Texas. In April 2011,
American Airlines also filed an antitrust lawsuit against
Travelport Limited and Travelport, L.P., Orbitz Worldwide LLC and
Sabre in the U.S. District Court for the Northern District of
Texas. The Federal Action and State Action are collectively
referred to as the GDS Litigation.
Yetter Coleman has served as lead trial counsel for American
Airlines on the GDS Litigation since the commencement of the
State and Federal Actions and, has been involved in all aspects
of the litigation. Yetter Coleman also serves as co-counsel to
American Airlines in American Airlines vs. Frequent Flyer Depot,
Inc., et al., a lawsuit against several companies and individuals
who defrauded American Airlines regarding its AAdvantage frequent
flier program.
Yetter Coleman was authorized to continue representing American
Airlines on the American Matters under the OCP Order. In
addition to representing American Airlines in the Frequent Flyer
Litigation, Yetter Coleman attorneys have been actively involved
in trial preparation for the State Action and the Federal Action,
which has involved the production of several million pages of
documents in discovery and potentially taking and defending over
90 depositions. As a result, Yetter Coleman's postpetition fees
and expenses in connection with the American Matters have
exceeded the $50,000 monthly cap under the OCP Order. Thus, the
Debtors must retain Yetter Coleman as special counsel under
Section 327(e) of the Bankruptcy Code.
Randall J. White, associate general counsel of AMR Corp., states
that at this stage of the GDS Litigation, if the Debtors were
required to retain counsel other than Yetter Coleman in
connection with the GDS Litigation, the Debtors, their estates,
and all parties -in-interest would be severely prejudiced, as the
Debtors would lose their lead trial counsel in the GDS
Litigation, as well as Yetter Coleman's invaluable experience and
expertise less than six months from an extremely complex trial in
the State Action.
Yetter Coleman's professionals will charge for their services on
an hourly basis. The firm's current customary hourly rates are
$435 to $710 for partners and counsel, $195 to $370 for
associates, and $100 to $140 for paraprofessionals. Yetter
Coleman also intends to seek reimbursement for reasonable
expenses incurred.
R. Paul Yetter, Esq., a partner at Yetter Coleman LLP, in Austin,
Texas -- pyetter@yettercoleman.com -- discloses that his firm
does not have any connection to the potential parties-in-interest
in the Debtors' Chapter 11 cases except for certain connections,
which are unrelated to the matters upon which the firm is to be
retained. A copy of the disclosures is available for free at:
http://bankrupt.com/misc/AmAir_YetterDisclosures.pdf
Mr. Yetter also discloses that Yetter Coleman did not hold a
retainer as of the Petition Date. Upon review, Yetter Coleman is
owed $52,881 for services provided and expenses incurred between
November 1, 2011 and the Petition Date, he notes. He believes
that holding such a de minimis claim is not disqualifying or
problematic under Section 327(e) of the Bankruptcy Code.
Accordingly, Mr. Yetter insists that Yetter Coleman is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code.
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on
$18.02 billion of total operating revenues for the nine months
ended Sept. 30, 2011. AMR recorded a net loss of $471 million in
the year 2010, a net loss of $1.5 billion in 2009, and a net loss
of $2.1 billion in 2008.
The Company's balance sheet at Sept. 30, 2011, showed
$24.72 billion in total assets, $29.55 billion in total
liabilities, and a $4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000 ).
AMERICAN AIRLINES: Winstead PC Evaluating Contracts
---------------------------------------------------
AMR Corp. and its affiliates seek permission from the Bankruptcy
Court to employ Winstead P.C. as their corporate counsel, nunc pro
tunc to the Petition Date.
Winstead has served as counsel for the Debtors on a variety of
matters since 2001. Winstead's duties have included assisting
the Debtors with (i) negotiating and drafting contracts and
leases, including contracts and leases relating to (a)
procurement and purchasing, (b) executive compensation, and (c)
aircraft, business process and technology outsourcing and
cargo transactions, (ii) advising the Debtors on intellectual
property and liquor law matters, and (iii) assisting the Debtors
with review, collection, and analysis of contracts so that the
Debtors could prepare a schedule of contracts and to facilitate
the Debtors' decisions with respect to their executory contracts
and leases.
Winstead was authorized to continue representing the Debtors
under the OCP Order. Winstead has continued to provide the
Debtors with those legal services since the Petition Date, and
Winstead's postpetition fees and expenses have exceeded the
$50,000 monthly cap under the OCP Order. Accordingly, the
Debtors are seeking permission to employ Winstead as special
counsel under Section 327(e) of the Bankruptcy Code.
The Debtors will pay Winstead's professionals according to their
customary hourly rates. Winstead's current customary hourly
rates are $700 to $375 for shareholders, $425 to $215 for
associates, and $230 to $110 for paraprofessionals. Winstead also
intends to seek reimbursement for reasonable expenses incurred.
Phillip Lamberson, Esq., a shareholder at Winstead P.C., in
Dallas, Texas -- plamberson@winstead.com -- discloses that his
firm represents certain parties in matters unrelated to the
Debtors. A list of the clients is available for free at:
http://bankrupt.com/misc/AmAir_WinsteadClients.pdf
Mr. Lamberson adds that as of the Petition Date, Winstead holds a
prepetition claim for approximately $210,000 for services
rendered to the Debtors.
Notwithstanding those disclosures, Winstead is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code, Mr. Lamberson maintains.
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on
$18.02 billion of total operating revenues for the nine months
ended Sept. 30, 2011. AMR recorded a net loss of $471 million in
the year 2010, a net loss of $1.5 billion in 2009, and a net loss
of $2.1 billion in 2008.
The Company's balance sheet at Sept. 30, 2011, showed
$24.72 billion in total assets, $29.55 billion in total
liabilities, and a $4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000 ).
AMERICAN APPAREL: Has $49 Million Net Sales in March
----------------------------------------------------
American Apparel, Inc., announced preliminary sales for the month
and quarter ended March 31, 2012. The Company reported that for
the month ended March 31, 2012, total net sales increased 15% to
$49.0 million when compared to the month ended March 31, 2011.
Between the same periods, comparable store sales on a preliminary
basis increased an estimated 21% and wholesale net sales increased
an estimated 10%. For the quarter ended March 31, 2012, total net
sales increased an estimated 14% to $132.7 million, comparable
store sales increased an estimated 15% and wholesale net sales
increased an estimated 17%.
"We are very pleased to report strong sales performance in March
across all three distribution channels and these results
substantially exceeded our expectations," stated Dov Charney,
Chairman and CEO. "Careful planning to our inventory commitments,
merchandising strategy, and product assortment helped to drive our
continued momentum. I would like to take this opportunity to
reaffirm our guidance for EBITDA of $32 million to $40 million for
2012. As such, we believe we will be in a position to refinance
elements of our higher cost capital structure and significantly
reduce our interest expense by late 2012 or early 2013."
About American Apparel
Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP)
-- http://www.americanapparel.com/-- is a vertically integrated
manufacturer, distributor, and retailer of branded fashion basic
apparel. As of September 2010, American Apparel employed over
10,000 people and operated 278 retail stores in 20 countries,
including the United States, Canada, Mexico, Brazil, United
Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the
Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan,
South Korea and China.
Amid liquidity problems and declining sales, American Apparel in
early 2011 reportedly tapped law firm Skadden, Arps, Slate,
Meagher & Flom and investment bank Rothschild Inc. for advice on a
restructuring.
In April 2011, American Apparel said it raised $14.9 million in
rescue financing from a group of investors led by Canadian
financier Michael Serruya and private equity firm Delavaco Capital
Corp., allowing the casual clothing retailer to meet obligations
to its lenders for the time being. Under the deal, the investors
were buying 15.8 million shares of common stock at 90 cents
apiece. The deal allows the investors to purchase additional
27.4 million shares at the same price.
The Company reported a net loss of $39.31 million in 2011 and a
net loss of $86.31 million in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $324.72
million in total assets, $276.59 million in total liabilities and
$48.13 million in total stockholders' equity.
AMERICAN MARINE: Receiver Wants Judge to Confirm Authority
----------------------------------------------------------
Tradeonlytoday.com reports that, following the dismissal of
American Marine Holdings LLC's Chapter 11 bankruptcy petitions in
Florida, the receiver for Fountain and related entities filed a
motion in North Carolina state court asking a judge to confirm its
authority to file such petitions on behalf of the Company.
Ronald Glass, and the firm of GlassRatner Advisory & Capital
Group, were appointed the corporate receiver in First Capital's
case against Fountain on Oct. 20. The report notes the receiver's
latest filing recounts what led up to the Chapter 11 bankruptcy
petition, which was filed in January. First Capital is seeking
$61.04 million in damages from Fountain and other entities for the
"borrower defendants' " breach of loan agreements, according to
documents filed in the North Carolina court.
The report notes the "borrower defendants" include: American
Marine Holdings LLC; Donzi Marine LLC; AMH Government Services
LLC; Pro-Line Boats LLC; Fountain Powerboats LLC; Fountain
Powerboat Industries LLC; Fountain Powerboats Inc.; Fountain
Dealers' Factory Super Store Inc.; Baja Marine Inc.; Palmetto Park
Financial LLC; 50509 Marine LLC; Liberty Acquisition FPB LLC; and
Joseph G. Wortley.
The report says, in the latest filing, Mr. Glass noted that before
filing for Chapter 11 in Florida he asked the North Carolina court
for authority to sell 11 boats in the Palmetto Park inventory for
$429,000, and the funds of the sale would generate capital to
assist with continuing operations. Palmetto Park, according to
court documents, is an entity created and funded by FCC to provide
dealers with floorplan financing.
The report notes the Florida bankruptcy judge dismissed the
Chapter 11 petitions without prejudice, meaning petitions can be
refilled. Following the dismissal, an attorney for Fountain
Powerboats and Baja Marine filed a motion in North Carolina to
dissolve the temporary receivership. To date, no order has been
filed on that motion.
About American Marine
American Marine Holdings LLC's primary business consists, inter
alia, manufacturing, marketing, distributing, servicing and
selling boats and related products in North Carolina. Brand names
include Donzi, Fountain, Pro-Line and Baja.
American Marine and its affiliates filed a Chapter 11 bankruptcy
petition (Bankr. S.D. Fla. Case No. 12-11354) on Jan. 18, 2012,
after being sued for defaulting on its loans. Ronald Glass of
GlassRatner Advisory & Capital Group, LLC, the receiver of
American Marine, signed the bankruptcy petitions. FCC LLC d/b/a
First Capital, which provided $51 million in loans prepetition,
pushed for the appointment of a receiver after filing a complaint
in state court.
The receiver disclosed that American Marine had no assets and had
liabilities of $60,007,617 in the schedules attached to petition.
The receiver said that debt to First Capital is $54 million.
John E. Page, Esq., at Shraiberg, Ferrara, & Landau P.A., in Boca
Raton, Florida, serves as counsel. GlassRatner Advisory & Capital
Group Inc. serves as financial advisor.
On Jan. 16, 2012, Joseph Wortley, a former owner and officer of
American Marine, filed a Chapter 11 voluntary petition for
Palmetto Park Financial, LLC (Case No. 12-11055-EPK). Mr. Glass
contends that the voluntary petitions for Palmetto Park and
related cases were null and void as Mr. Wortley no longer had the
authority to file the cases. Mr. Glass sought dismissal of the
Palmetto case.
AMERICAN REALTY: Moody's Raises Corp. Family Rating to 'Ba2'
------------------------------------------------------------
Moody's Investors Service upgraded the ratings of American Realty
Capital Trust (ARCT) to Ba2. The outlook is stable.
The upgrade reflects American Realty Capital Trust's growth in its
asset base, while reducing effective leverage and secured debt
levels, as well as maintaining a solid fixed charge coverage. ARCT
has listed on the NASDAQ (Ticker: ARCT), internalized its
management structure, and secured a $200 million unsecured term
loan. The stable outlook reflects Moody's expectation that ARCT
will continue to grow in a disciplined manner while improving its
credit metrics and maintaining adequate liquidity.
Ratings Rationale
American Realty Capital Trust invests in high quality, single-
tenant, free-standing, triple-net leased properties located in 43
states and Puerto Rico, with a strong roster of investment grade
(71% of total rental revenue at YE11) and credit-worthy tenants.
ARCT has grown significantly over the past few years with total
assets reaching $2.2 billion at YE11 from $164.9 million at YE08.
ARCT owns 485 properties as of January 31, 2012 that are
geographically diverse with New York, Ohio and Texas representing
the largest percentage of annualized rent. The largest industries
are pharmacy (with Walgreens and CVS comprising 17% of annualized
rent) and freight (FedEx 17%). ARCT's portfolio is fully-occupied
(100% leased at YE11) with a weighted average remaining lease term
of 13.5 years owing to long-term net leases, high tenant retention
rates and a well-laddered lease expiration schedule.
Offsetting ARCT's positive drivers are the Company's historically
high use of secured debt, albeit decreasing, and limited public
sector track record, which should be remedied over time as the
Company proceeds as a publicly listed company, issuing equity and
unsecured debt.
Moody's views American Realty Capital Trust's liquidity and
funding as moderate. Most recently, ARCT upsized its unsecured
credit facility to $220 million (maximum of $500 million with the
accordion feature). The Company currently has $220 million
outstanding on the revolver. The drawdown on the facility was used
to fund ARCT's $220 million self tender offer, which closed on
March 28, 2012. Additionally, ARCT secured a $200 million term
loan with Wells Fargo Bank, National Association, which proceeds
will be used to prepay approximately $161 million in mortgage
debt. Following this transaction, the Company's unencumbered
portfolio will represent 56% of gross assets. This is a
significant change compared to a year ago when ARCT's portfolio
was essentially encumbered, a credit plus. Moody's also notes that
ARCT has a well-laddered debt maturity schedule with manageable
debt obligations through 2014.
American Realty Capital Trust has also made substantial
improvements in reducing leverage over the past year. Effective
leverage (debt plus preferred stock/gross assets) at YE11 was 31%,
down from 41% at YE10. Net debt/EBITDA was high at 7.9x at 4Q11 as
a result of new acquisitions made without the benefit of a full
year of EBITDA generation from these assets. Secured debt as a
percentage of gross assets has declined to 30% at YE11, from 40%
at YE10. Moody's expects secured debt to decline over time,
particularly as the Company migrates to an unsecured from a
secured financing model. ARCT's access to diverse public market
capital has been limited in the past. Moody's will continue to
monitor the success with which ARCT is able to access various
sources of debt and equity as a publicly traded REIT. Fixed charge
coverage (currently 2.2x at YE11) should increase reflecting
decreased borrowing costs, reduced acquisitions expenses and
increased revenue due to the new acquisitions coming online.
Moody's indicated that upward rating movement would be driven by
increased size (gross assets closer to $3 billion), while reducing
leverage metrics (Net debt/EBITDA below 7x); secured debt closer
to 20% of gross assets; and fixed charge coverage at least 3.0x on
a consistent basis. A downgrade would occur if fixed charge
coverage falls below 2x; secured debt/gross assets exceeds 40%;
or, upon a significant change in core investment strategy.
The following rating has been upgraded to Ba2 with a stable
outlook:
American Realty Capital Trust, Inc. -- issuer rating at Ba2
The principal methodology used in this rating was Global Rating
Methodology for REITs and Other Commercial Property Firms
published in July 2010.
American Realty Capital Trust, Inc. (NASDAQ: ARCT), located in New
York, NY, is a publicly traded REIT that acquires single-tenant,
freestanding properties net-leased long term to investment grade
and creditworthy tenants. At December 31, 2011, ARCT had $2.1
billion in assets and $1.4 billion in equity.
ANDERSON NEWS: Antitrust Case vs. Media Firms to Move Forward
-------------------------------------------------------------
A lawsuit with significant ramifications for antitrust cases
appears headed for trial, according to a press release sent by
Cohen Communications Group.
The US Court of Appeals for the Second Circuit has reinstated
Anderson News's antitrust case against major media companies. A
federal district court had dismissed the case, and Anderson News
appealed that ruling. On April 3, 2012, the Second Circuit
vacated the dismissal and remanded the case to the district court
for further proceedings.
"This is a major victory for Anderson News that has significant
ramifications for antitrust disputes," said Marc Kasowitz, a
partner at Kasowitz, Benson, Torres & Friedman, the law firm
representing Anderson News. "The case will now move forward in
federal district court, where we expect to prevail."
"We're obviously thrilled that the appeals court found in our
favor on virtually every contested point," said CEO Charlie
Anderson. "We look forward to moving ahead with discovery and
trial. A lot of people were impacted by this, and we want everyone
to know what really happened."
Anderson News, which is headquartered in Knoxville, Tennessee, and
is now in bankruptcy proceedings, was the nation's second-largest
magazine distributor. Its shutdown displaced thousands of jobs.
Its lawsuit in the US District Court for the Southern District of
New York alleges an antitrust conspiracy to drive the company out
of business and names as defendants magazine publishers and
distributors that include American Media Inc., Bauer Publishing,
Curtis Circulation Company, Distribution Services, Hachette
Filipacchi, Hudson News Distributors, Kable News Distributors,
Rodale Publishing, Time Inc., and Time Warner Retail.
The legal team expects discovery proceedings in the case to begin
very soon.
"We very much look forward to beginning discovery and proceeding
quickly to trial," said Kasowitz.
For a copy of the ruling, contact:
COHEN COMMUNICATIONS GROUP
Mike Cohen
Tel: 865-659-4750
E-mail: Mike@Cohencommunicationsgroup.com
About Anderson News
Anderson News LLC is a sales and marketing company for books and
magazines. Anderson News ceased doing business in February 2009,
and was the subject of an involuntary bankruptcy filing (Bankr. D.
Del. 09-_____) on March 2, 2009, on which an order for relief was
entered on Dec. 30, 2009. The publishing companies claimed that
Anderson News owes them a combined $37.5 million. Anderson News
converted the case to a voluntary chapter 11 case on the same day.
ARCADIA RESOURCES: In Forbearance Talks; Fails to Pay 30MM Notes
----------------------------------------------------------------
Arcadia Services, Inc., and three of its wholly-owned subsidiaries
are parties to an Amended and Restated Credit Agreement dated
July 13, 2009, as subsequently amended on June 9, 2010, and
Oct. 31, 2010. The repayment of the debt is guaranteed by RKDA,
Inc., ASI's parent company. RKDA is a wholly-owned subsidiary of
Arcadia Resources, Inc. Comerica Bank has a security interest in
all of the assets of the Services Borrowers and RKDA has pledged
the outstanding capital stock of ASI as further security under the
Comerica Credit Agreement.
The obligations under the Comerica Credit Agreement matured on
April 1, 2012. The Services Borrowers are in discussions with
Comerica with respect to a forbearance agreement pursuant to which
the maturity date of the Comerica Credit Agreement would be
extended beyond April 1, 2012. Pending completion and execution
of that forbearance agreement, Comerica Bank is continuing to
provide funding for the Services Borrowers' business. However,
there can be no assurances that a forbearance agreement will be
successfully completed or that Comerica will not exercise its
right to declare all principal and accrued interest under the
Comerica Credit Agreement to be immediately due and payable and
initiate action to foreclose on the Collateral.
On April 1, 2012, the principal and unpaid accrued interest became
due and payable under three separate promissory notes issued by
Arcadia Resources, Inc., to JANA Master Fund, Ltd., Vicis Capital
Master Fund and LSP Partners, LP. The amounts owed to JANA, Vicis
and LSP under the Notes is $30.0 million. The Notes are unsecured
obligations of the Company.
On April 4, 2012, the principal and unpaid accrued interest became
due and payable under the Company's promissory note to BestCare
Travel Staffing, LLC. The amount that became due and payable
under the BestCare Note is $594,000.
The Company is unable to pay the amounts due under the Notes or
the BestCare Note at maturity. While the Company continues to
pursue the sale of its Home Care and Medical Staffing segment, it
is not anticipated that the proceeds of any sale, after repayment
or assumption by the purchaser of the obligations under the
Comerica Credit Agreement, will be sufficient to make any payments
on the Notes or the BestCare Note. To the knowledge of the
Company, the holders of the Notes and the BestCare Note have not
taken any legal action to collect amounts due and payable at
maturity. The Company does not anticipate being in a position to
make significant payments, if any, towards satisfaction of these
obligations in the future. In the event the Services segment is
sold, the Company will have no other operating businesses or
sources of revenue.
In light of the foregoing, the Company does not believe that its
common shares outstanding have any value, and the Company strongly
discourages investors from trading in the Company's common stock.
Sale of Certain Services Locations
On March 21, 2012, Arcadia Services, Inc., and Arcadia Health
Services, Inc., wholly-owned subsidiaries of the Company, entered
into an agreement to sell five of their operating locations in
North Carolina to Premier Home Health Services, Inc. Total
proceeds will include $250,000 of cash and a note payable for
$500,000 to be paid in 12 monthly installments, and AHSI will
retain all accounts receivable generated prior to the effective
date of the sale. The transaction will close when the purchaser
obtains the licenses and authorizations required to conduct the
business. ASI and AHSI decided to divest these locations after
management determined that these locations no longer fit their
business and financial objectives. Revenue generated by the sold
locations for the nine-month period ended Dec. 31, 2011, was $3.7
million.
About Arcadia HealthCare
Arcadia HealthCare is a service mark of Arcadia Resources, Inc.
(nyse amex:KAD), and is a leading provider of home care, medical
staffing and pharmacy services under its proprietary DailyMed
program. The Company, headquartered in Indianapolis, Indiana, has
65 locations in 18 states. Arcadia HealthCare's comprehensive
solutions and business strategies support the Company's vision of
"Keeping People at Home and Healthier Longer."
The Company reported a net loss of $15.76 million for the nine
months ended Dec. 31, 2011. The Company had a net loss of $14.35
million for the fiscal year ended March 31, 2011, following a net
loss of $31.09 million in the preceding year.
The Company's balance sheet at Dec. 31, 2011, showed
$15.93 million in total assets, $51.50 million in total
liabilities, and a $35.57 million total stockholders' deficit.
BDO USA, LLP, in Troy, Michigan, expressed substantial doubt about
Arcadia Resources' ability to continue as a going concern. The
independent auditors noted that the Company has suffered recurring
losses from operations and has a net capital deficiency.
Bankruptcy Warning
The Form 10-Q for the quarter ended Dec. 31, 2011, noted that on
Sept. 13, 2011, the Company and three of Arcadia Services,
Inc.'s wholly-owned subsidiaries, as borrowers, received a letter
from Comerica stating that they failed to comply with certain
covenants under the credit agreement because as of July 31, 2011.
Comerica informed the Borrowers that Comerica has no obligation to
make further advances under the credit facility and that future
advances will be subject to the sole discretion of Comerica.
Comerica has not sought to accelerate the repayment of the
indebtedness or to foreclose on any of the security interests.
While Comerica continues to make advances under the credit
facility and the Company expects that advances will continue to be
made, there can be no assurances that Comerica will exercise its
discretion to make further advances or that Comerica will not
accelerate the repayment of the indebtedness. Should Comerica not
continue to provide advances under the credit facility, the
Company and the Borrowers would not have access to the funds
needed to operate the business. In that event, the Company would
be forced to consider alternative sources of liquidity to operate
the business, which may require them to commence a proceeding
under the federal bankruptcy laws to cause Comerica to provide
access funds under the Credit Agreement.
AS SEEN ON TV: Randolph Pohlman Named to Board of Directors
-----------------------------------------------------------
Randolph Pohlman, PhD, was appointed by a unanimous written
consent of the members of As Seen on TV, Inc.'s board of
directors, to serve on the Company's Board. Dr. Pohlman will
serve on the board of directors and will hold office until the
next election of directors by stockholders and until his successor
is elected and qualified or until his earlier resignation or
removal. Dr. Pohlman will also serve on the Company's audit and
compensation committees.
Randolph Pohlman, PhD, age 68, is Professor and the Dean Emeritus
of the H. Wayne Huizenga School of Business and Entrepreneurship
at Nova Southeastern University, the largest independent
institution of higher education in the state of Florida and among
the top 20 largest independent institutions nationally. He served
as the Dean of the H. Wayne Huizenga School of Business and
Entrepreneurship at Nova Southeastern University from 1995 through
2009. Prior to his arrival at Nova Southeastern University, Dr.
Pohlman was a senior executive at Koch Industries, the second
largest privately held company in the United States. He was
recruited to Koch via Kansas State University (KSU), where for
more than ten years, he served KSU in a variety of administrative
and faculty positions, including holding the L.L. McAninch Chair
of Entrepreneurship and Dean of the College of Business. Dr.
Pohlman also served as a Visiting Research Scholar at the
University of California, Los Angeles, and was a member of the
Executive Education Advisory Board of the Wharton School of the
University of Pennsylvania. From 2003 through 2007 he served on
the board of directors of Viragen, Inc., a public company
specializing in the research and development of biotechnology
products. Viragen filed for an assignment for the benefit of
creditors in October 2007. He has served on a variety of
corporate and not for profit boards.
Pursuant to an independent director agreement, the Company has
agreed to pay Dr. Pohlman an annual fee of $18,000 for serving on
the board of directors. In addition, the Company has issued Dr.
Pohlman options to purchase up to 25,000 shares of the Company's
common stock, exercisable at $ 0.82 per share and exercisable for
a term of five years. Options to purchase 12,500 shares of common
stock vest on March 31, 2013, and options to purchase 12,500
shares vest on March 31, 2014. The options are issued pursuant
and subject to the Company's equity incentive plan.
In addition, effective March 31, 2012, the board of directors
appointed Adrian Swaim to serve as the Company's controller.
Adrian Swaim, age 30, has served in various capacities with TV
Goods, Inc., the Company's operating subsidiary, since January
2010. From 2005 through 2009 Mr. Swaim served as a loan officer
and branch manager in the mortgage financing field. Mr. Swaim
filed for bankruptcy protection in 2008.
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.
ATLANTIC & PACIFIC: Files Supplement on Composition of New Board
----------------------------------------------------------------
The Great Atlantic & Pacific Tea Company, Inc., has filed an
amended exhibit to the plan supplement in support of its first
Amended Joint Plan Of Reorganization. The plan supplement lists
the composition of the new board immediately after the effective
date.
The members of the new board after the effective date are:
1. Andrew Axelrod
Managing Director
Mount Kellett Capital Management LP
New York, New York
2. Ronald W. Burkle
Managing Partner
The Yucaipa Companies, LLC
Los Angeles, California
3. Lou Giraurdo
Co-Founder, Senior Managing Partner
GESD Capital Partners
San Francisco, California
4. Samuel Martin
Chief Executive Officer
The Great Atlantic & Pacific Tea Company, Inc.
Montvale, New Jersey
5. Jonathan Fiorello
Chief Operating Officer
Mount Kellett Capital Management LP
New York, New York
6. Ken Murphy
Head of Asset Management
Mount Kellett Capital Management LP
New York, New York
7. Thomas Secor
Vice President
Liberty Harbor
Greenwich, Connecticut
About Great Atlantic & Pacific
Founded in 1859, Montvale, New Jersey-based Great Atlantic &
Pacific is a supermarket retailer, operating under a variety of
well-known trade names, or "banners" across the mid-Atlantic and
Northeastern United States. Before filing for bankruptcy in 2010,
A&P operated 429 stores in 8 states and the District of Columbia
under the following trade names: A&P, Waldbaum's, Pathmark,
Pathmark Sav-a-Center, Best Cellars, The Food Emporium, Super
Foodmart, Super Fresh and Food Basics. A&P had 41,000 employees
prior to the bankruptcy filing.
A&P and its affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y.
Case No. 10-24549) on Dec. 12, 2010, in White Plains, New York.
In its petition, A&P reported total assets of $2.5 billion and
liabilities of $3.2 billion as of Sept. 11, 2010.
Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C.
Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J.
Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois,
serve as counsel to the Debtors. Kurtzman Carson Consultants LLC
is the claims and notice agent. Lazard Freres & Co. LLC is the
financial advisor. Huron Consulting Group is the management
consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and
Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represent the Official Committee of Unsecured Creditors.
A&P sold 12 Super-Fresh stores in the Baltimore-Washington area
for $37.83 million, plus the value of inventory. Thirteen other
locations didn't attract buyers at auction and were closed mid-
July 2011.
The Bankruptcy Court entered an order Feb. 27, 2012, confirming
the First Amended Joint Plan of Reorganization filed Feb. 17,
2012. The Plan provides for, among other things, a $490 million
in financing from Yucaipa Cos., cancellation of existing equity
interests and zero recovery for shareholders.
The Company has successfully consummated its financial
restructuring and emerged from Chapter 11 bankruptcy protection as
a privately-held company.
The United States Bankruptcy Court of the Southern District of New
York confirmed the Company's Plan of Reorganization on Feb. 28,
2012.
ATLANTIC & PACIFIC: FELRA Fund Appeals Confirmation of Plan
-----------------------------------------------------------
The Food Employers Labor Relations Association and United Food and
Commercial Workers Pension Fund (FELRA Fund) has filed a notice of
appeal the order confirming the Debtors' joint plan of
reorganization entered on February 28, 2012.
The FELRA Fund is represented by:
Alan D. Halperin, Esq.
Robert D. Raicht, Esq.
Donna H. Lieberman, Esq.
HALPERIN BATTAGLIA RAICHT, LLP
555 Madison Ave., 9th Fl.
New York, NY 10022
Tel: (212) 765-9100
Fax: (212) 765-0964
E-mail: ahalperin@halperinlaw.net
rraicht@halperinlaw.net
Barry S. Slevin, Esq.
Sharon M. Goodman, Esq.
Laura Offenbacher Aradi, Esq.
SLEVIN & HART, P.C.
1625 Massachusetts Ave., NW, Suite 450
Washington, DC 20036
Tel: (202) 797-8700
About Great Atlantic & Pacific
Founded in 1859, Montvale, New Jersey-based Great Atlantic &
Pacific is a supermarket retailer, operating under a variety of
well-known trade names, or "banners" across the mid-Atlantic and
Northeastern United States. Before filing for bankruptcy in 2010,
A&P operated 429 stores in 8 states and the District of Columbia
under the following trade names: A&P, Waldbaum's, Pathmark,
Pathmark Sav-a-Center, Best Cellars, The Food Emporium, Super
Foodmart, Super Fresh and Food Basics. A&P had 41,000 employees
prior to the bankruptcy filing.
A&P and its affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y.
Case No. 10-24549) on Dec. 12, 2010, in White Plains, New York.
In its petition, A&P reported total assets of $2.5 billion and
liabilities of $3.2 billion as of Sept. 11, 2010.
Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C.
Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J.
Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois,
serve as counsel to the Debtors. Kurtzman Carson Consultants LLC
is the claims and notice agent. Lazard Freres & Co. LLC is the
financial advisor. Huron Consulting Group is the management
consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and
Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represent the Official Committee of Unsecured Creditors.
A&P sold 12 Super-Fresh stores in the Baltimore-Washington area
for $37.83 million, plus the value of inventory. Thirteen other
locations didn't attract buyers at auction and were closed mid-
July 2011.
The Bankruptcy Court entered an order Feb. 27, 2012, confirming
the First Amended Joint Plan of Reorganization filed Feb. 17,
2012. The Plan provides for, among other things, a $490 million
in financing from Yucaipa Cos., cancellation of existing equity
interests and zero recovery for shareholders.
The Company has successfully consummated its financial
restructuring and emerged from Chapter 11 bankruptcy protection as
a privately-held company.
The United States Bankruptcy Court of the Southern District of New
York confirmed the Company's Plan of Reorganization on Feb. 28,
2012.
AUGUST CAYMAN: Moody's Assigns 'B2' CFR; Outlook Stable
-------------------------------------------------------
Moody's Investors Service assigned first time ratings to August
Cayman Intermediate Holdco, Inc., -- Corporate Family and
Probability of Default Ratings at B2. In a related action, Moody's
assigned a B1 rating to the new $265 million senior secured first
lien revolver and term loan facilities, and Caa1 rating to the new
$100 million senior secured second lien term loan. The proceeds
from the senior secured term loans along with $205 million of cash
will be used to fund the purchase of Schrader International from
Tomkins PLC for approximately $505 million and pay fees and
expenses related to the transaction. The rating outlook is stable.
The ratings of August Cayman Intermediate Holdco, Inc. reflect the
consolidated ongoing acquired operations of Schrader
International.
The following ratings were assigned:
August Cayman Intermediate Holdco, Inc.
Corporate Family Rating, B2;
Probability of Default, B2
August U.S. Holding Company, Inc.:
B1 (LGD3, 36%) to the $35 million senior secured first lien
revolving credit facility (also available to August LuxUK
Holding Company);
B1 (LGD3, 36%) to the $100 million senior secured first lien
term loan facility;
Caa1 (LGD5, 89%) to the $43.5 million senior secured second lien
term loan facility
August LuxUK Holding Company:
B1 (LGD3, 36%) to the $130 million senior secured first lien
term loan facility;
Caa1 (LGD5, 89%) to the $56.5 million senior secured second lien
term loan facility
Rating Rationale
August Cayman Intermediate Holdco, Inc.'s B2 Corporate Family
Rating reflects the operating performance and competitive position
of Schrader International (Schrader). The ratings incorporate
Schrader's modest size, high customer concentrations, and high pro
forma leverage following the company's acquisition. One of the key
risks facing Schrader is high customer concentration within its
sensors and components business which makes up about 70% of the
company's revenues. Most of the company's revenues for this
segment are concentrated among ten automotive OEM customers, with
approximately 70% of sales going to the Detroit-3. Consequently,
Schrader's operating performance, and credit metrics will remain
highly vulnerable the cyclicality in the automotive sector and to
potential customer losses. The combination of these risks along
with the company's relatively high pro forma leverage of
approximately 4.3x (inclusive of Moody's adjustment) supports the
assigned rating.
Through its sensors and components segment, Schrader is the
leading producer of tire pressure monitoring systems (TPMS) in the
US auto market, with the majority of its sales going to automotive
OEMs. This strong OEM position and the outlook for continued
growth in US vehicle sales should be the principal drivers of the
company's operating performance over the intermediate-term.
The complete regulatory phase-in of TPMS on US passenger cars
began in 2007. Beginning in 2013, the battery replacement cycle of
the initially-installed units should begin to take hold. Over the
long-term, this replacement cycle should afford Schrader with
additional aftermarket opportunities. The company is also expected
to benefit from the regulatory phase-in of TPMS in Europe
beginning in 2012. Yet, these regulatory requirements may drive an
increasing number of industry participants or pricing pressure
among existing competitors in the TPMS market resulting in
downward pressure on profit margins. Approximately 80% of the
company's revenues are currently driven by North American
passenger car original equipment manufacturers. As the battery
replacement cycle begins and regulations in Europe drive higher
TPMS usage, the company is expected to experience greater
OEM/aftermarket, and geographic diversity over intermediate-term.
The stable outlook incorporates Moody's expectation that
Schrader's operating performance and adequate liquidity profile
over the near-term will support the assigned rating. Demand for
TPMS is expected to strongly grow in 2013 and 2014 driven by
battery replacement cycles in North America and European
regulatory requirements. Yet, Moody's anticipates that the
competitive threat of a number of new market participants
supplying TPMS products may constrain margins in both the original
equipment and aftermarket.
Schrader is anticipated to maintain an adequate liquidity profile
over the next twelve months supported by free cash flow generation
and availability under the $35 million revolving credit facility.
The company is expected to generate positive free cash over the
near term driven by strong EBIT margins which should support
incremental working capital and capital expenditure needs as
revenues grow. The proposed revolving credit facility is expected
to be unfunded as of the closing of the transaction and remain
largely unused over the next twelve months. Financial covenants
for the first lien credit facilities are anticipated to include a
maximum net total leverage test and a minimum cash interest test.
Financial covenant levels have not been determined as of this
writing. Alternate liquidity is limited as substantially all of
the company's assets are expected to secure the credit facilities.
The outlook or rating could be raised if demand for TPMS in 2013
and beyond drives stronger revenues and profit margin growth
resulting in EBIT/Interest sustained above 2.3x and Debt/EBITDA
sustained below 3.5x. In addition, these results also will need to
coincide with a financial policy that is focused on debt reduction
rather than shareholder returns.
The outlook or rating could be lowered if demand for TPMS does not
achieve expectations or if the company's profit margins come under
competitive pressure. A lower outlook or rating could result if
debt/EBITDA exceeds 5.0x, if EBIT/Interest approaches 1.2x, or if
liquidity deteriorates. Shareholder distributions at the expense
of debt reduction could also lower the company's rating or
outlook.
The principal methodology used in rating Schrader International
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.
Schrader International is an industry leading manufacturer of Tire
Pressure Monitoring Systems, Fluid Control Components and Tire
Hardware & Accessories for the automotive and industrial original
equipment market and aftermarket. The company generated 2011
revenues of $452.3 million and will be owned by affiliates of
Madison Dearborn Partners.
AUTOTRADER.COM INC: Moody's Rates New $200MM Secured Loan 'Ba3'
---------------------------------------------------------------
Moody's Investors Service affirmed AutoTrader.com, Inc.'s (ATC)
Ba3 Corporate Family Rating (CFR) and B1 Probability of Default
Rating (PDR), and assigned a Ba3 rating to its proposed $200
million senior secured term loan due 2017. The company also plans
to upsize its Ba3 rated revolver (due 2015) and draw an
incremental $200 million, and use the total proceeds to fund a
$400 million dividend to shareholders. The transaction will
increase ATC's adjusted leverage (pro-forma for the transaction as
well as past acquisitions, and including Moody's standard
adjustments) of 3.0x at 12/31/2011 to over 4.0x. However, Moody's
anticipates that the company will continue generating double digit
EBITDA growth and expect it to apply its strong free cash flow
generation of well over $100 million per year to pay down debt and
sustain leverage within metrics consistent with its Ba3 CFR.
Consequently, Moody's believes it will de-lever back to under 4.0x
and achieve leverage closer to around 3.0x within in year. Moody's
expects free cash flow to be its primary source of liquidity,
supported by revolver availability which is expected to be a $100
million at minimum over the next twelve months.
ATC made several acquisitions over the past two years, to expand
beyond but remain complimentary to its core online auto
classifieds business. Moody's expects the company's growth
prospects to be supported by not only the independent performance
of the acquired businesses but also its ability to integrate them
to offer a unified suite of dealer solutions. Although the
majority of its revenue comes from used cars, ATC will also
benefit from strong growth in new auto sales expected over the
next two years, which will lead to increased revenues from
national advertising by OEMs and impact demand for its
subscription services for auto dealers.
While the company has made several debt-financed acquisitions in
the past two years and is now paying out a significant dividend, a
level of event risk was already accounted for within the Ba3
rating. Since Moody's anticipates the company will experience
strong growth and use free cash flow to de-lever back to around
3.0x, the transaction will not impact its debt ratings.
The new term loan will be pari passu with ATC's existing bank
facility, which is secured by a first priority interest in and
lien on substantially all of ATC's assets and is guaranteed by all
existing and future domestic subsidiaries. The company plans to
modify certain financial and negative covenants in the current
agreement, and Moody's believes that it will continue to maintain
adequate cushion on its financial covenants. The rating outlook
remains stable.
Assignment:
$200 Million Senior Secured Term Loan A due 2017, Assigned
Ba3, LGD3-32%
Ratings Rationale
ATC's Ba3 Corporate Family Rating (CFR) is largely driven by the
strong cash flows the company generates from its position as a
leading seller of digital automotive advertising, its significant
level of subscription based revenues largely derived from
automotive listings and supported by a large and growing number of
car dealership clients. Ownership and control by fiscally
conservative CEI (rated Baa2) also impacts the ratings, though
ATC's debt has no recourse to CEI or its other private equity
owners. The rating also incorporates Moody's expectation that ATC
will grow both organically and through debt and equity financed
acquisitions and that ATC will sustain debt-to-EBITDA leverage
(incorporating Moody's standard adjustments) between 2.5x and
3.5x. These strengths, however, only partially offset ATC's key
business risks including the company's relatively short operating
history, small scale, narrow business focus and vulnerability to
the health of automobile sales driven by consumer spending,
particularly in the future as eventually organic growth moderates.
In addition, there is a significant level of competition in the
sale of digital automotive advertising and listings and Moody's
believes there are only moderate entry barriers.
The stable rating outlook reflects Moody's expectation that ATC
will expand its dealership footprint, continue to garner market
share, and grow both revenues and cash flow. The outlook also
factors in the potential for modest acquisitions, but anticipates
that leverage will be sustained on average in the 2.5x-3.5x range.
ATC's CFR could be upgraded to Ba2 if Cox Enterprises maintains
control and the company were to commit to lower sustained leverage
bringing its debt-to-EBITDA leverage to around or under 2.0.
Further upward rating momentum beyond Ba2 would be constrained by
ATC's short operating history, the level of business risk
associated with its advertising reliant business model and lack of
advertising niche diversity, and pressure from the minority
private equity shareholders to maintain higher leverage to
continue returning cash to investors.
A downgrade could occur if debt-to-EBITDA leverage were to be
sustained above 3.0x and CEI did not remain in control the
company. The rating could also be downgraded if leverage is
sustained above 4.0x while remaining under CEI's control.
AutoTrader.com's ratings were assigned by evaluating factors
Moody's believes are relevant to the credit profile of the issuer,
such as i) the business risk and competitive position of the
company versus others within its industry, ii) the capital
structure and financial risk of the company, iii) the projected
performance of the company over the near to intermediate term, and
iv) management's track record and tolerance for risk. These
attributes were compared against other issuers both within and
outside of AutoTrader.com's core industry and AutoTrader.com's
ratings are believed to be comparable to those of other issuers of
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.
AutoTrader.com, Inc. with its headquarters in Atlanta, GA, is the
Internet's leading automotive classifieds marketplace and consumer
information website. ATC is controlled by Cox Enterprises, Inc.
(Baa2 senior unsecured) which has a 68% equity interest. The
remaining owners include Providence Equity Partners (25%), Kleiner
Perkins (5%) and ATC's management and other stockholders (less
than 2%).
AVAYA INC: Moody's Says PE Support Bolsters Radvision Buyout
------------------------------------------------------------
Moody's Investors Service says Avaya Inc.'s proposed $227 million
acquisition of Radvision furthers their video conferencing
strategy. In addition, the private equity (PE) owners, TPG Capital
and Silver Lake Partners, have indicated their intent to fund a
majority of the purchase price thus minimizing a potential drain
on Avaya's liquidity. Sponsor equity along with cash on hand at
Radvision ($90.7 million as of December 2011) should be sufficient
to fund nearly the entire purchase price.
As reported in the June 14, 2011 edition of the Troubled Company
Reporter, Moody's gave Avaya a 'B3' rating with stable outlook.
Avaya is a global leader in enterprise telephony systems with $5.6
billion of revenues for the LTM period ended December 31, 2011.
The principal methodology used in rating Avaya was the Global
Communications Equipment Methodology pubished in June 2008. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
AVIS BUDGET: Fitch Puts Rating on Two Senior Notes at Low-B
-----------------------------------------------------------
Fitch Ratings has assigned Long-term credit ratings and Recovery
Ratings to Avis Budget Car Rental LLC's (ABC) recent incremental
term loan and senior unsecured debt issuances on March 19 and
March 30, respectively. In addition, ABC completed a $750 million
asset-backed (ABS) bond offering on March 23, which has not been
rated by Fitch.
The proceeds of the recent debt issuances will be primarily used
to refinance ABC's existing corporate and ABS debt. The issuances
are expected to extend ABC's upcoming debt maturities and lower
overall interest expenses. Fitch views positively ABC's continued
access to the capital markets and its ability to secure cheaper
funding.
The Issuer Default Rating (IDR) of ABC and its parent, Avis Budget
Group, Inc. (ABG) are unaffected by the issuance of these debt
securities, as ABG's overall capitalization and leverage metrics
were not materially impacted. Fitch affirmed the IDR and revised
the Outlook to 'Positive' in its recent review of ABG in October
2011. Fitch assigns the following Long-term credit and Recovery
ratings:
Avis Budget Car Rental, LLC:
-- Senior secured: 'BB+/RR1';
-- Senior unsecured: 'B+/RR4'.
BERNARD L. MADOFF: Wives of Madoff Sons to Face Suit
----------------------------------------------------
Amanda Bransford at Bankruptcy Law360 reports that New York
Bankruptcy Judge Burton R. Lifland on Wednesday said the trustee
recovering for victims of convicted Ponzi schemer Bernard L.
Madoff could proceed with unjust enrichment claims against the
wives of Madoff's sons, who allegedly received $115 million from
Madoff's investment firm.
Law360 relates that Judge Lifland said trustee Irving Picard could
add Stephanie Mack, the widow of Mark Madoff -- who committed
suicide in 2010 -- and Deborah Madoff, the soon-to-be-ex-wife of
Andrew Madoff, as defendants in his suit against other Madoff
family members.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970. The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims
agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
US$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.)
As of Feb. 17, 2012 and in the 38 months since his appointment,
the SIPA Trustee has recovered or entered into agreements to
recover more than $9 billion, representing roughly 52% of the
roughly $17.3 billion in principal estimated to have been lost in
the Ponzi scheme by BLMIS customers who filed claims. The
recoveries exceed prior restitution efforts related to Ponzi
schemes both in terms of dollar value and percentage of stolen
funds recovered. Pro rata distributions from the Customer Fund to
BLMIS customers whose claims have been allowed by the SIPA Trustee
totaled $325.7 million.
Mr. Picard has filed 1,000 lawsuits seeking $100 billion from
banks such as HSBC Holdings Plc and JPMorgan Chase & Co. The
trustee has seen more than $28 billion of his claims tossed by
district judges.
BIO-RAD LABS: Moody's Revises Outlook on 'Ba1' CFR to Positive
--------------------------------------------------------------
Moody's Investors Service affirmed the Ba1 Corporate Family Rating
and Probability of Default Rating of Bio-Rad Laboratories, Inc.
and changed the outlook to positive from stable. Concurrently,
Moody's assigned a Speculative Grade Liquidity rating of SGL-1,
reflecting Moody's expectation for very good liquidity over the
next 12 months.
The positive outlook reflects the potential for an upgrade if Bio-
Rad continues to achieve stable operating performance and maintain
conservative financial policies. The company's significant cash
balance gives it financial flexibility to make investments in the
business and make acquisitions which over time will expand the
company's scale and diversity and add to EBITDA and cash flow.
While 2012 operating performance will be constrained by a number
of headwinds --including costs associated with the launch of its
new quantitative PCR product as well as a new ERP system-- the
positive outlook reflects Moody's view that longer-term the
company will benefit from these investments. The change in outlook
is unrelated to the recent passing of Bio-Rad's co-founder and
Chairman, which Moody's does not believe will result in any
immediate changes to financial policies.
Ratings affirmed/LGD point estimates revised:
Corporate Family Rating, Ba1
Probability of Default Rating, Ba1
$300 million Senior Unsecured Subordinated Notes, due 2016, Ba2
(LGD5, 87%)
$425 million Senior Unsecured Notes, due 2020, to Ba1 (LGD4, 50%)
from Ba1 (LGD3, 48%)
Ratings assigned:
Speculative Liquidity Rating of SGL-1
The outlook is positive.
The Ba1 Corporate Family Rating reflects Bio-Rad's leading
competitive position within its core, niche markets. The ratings
are further supported by the recurring nature of roughly 70% of
revenues and Bio-Rad's diversified geographic, and customer base
within its niche markets. The ratings are also supported by the
company's creditor-friendly financial policies (i.e., no share
repurchases or dividends) and strong financial metrics. The
ratings are constrained by the company's significant concentration
of operating profit in a single market (clinical diagnostics) and
its modest size, both on an absolute basis and relative to
competitors. Moody's believes Bio-Rad could face a more
challenging operating environment over the next year or so given
its significant exposure to government funding, both in Europe in
the diagnostics business and in the US in the life science
business.
Moody's could upgrade the ratings if the company continues to
demonstrate steady organic revenue growth and makes continued
progress in remediating its reporting and control deficiencies. If
Moody's believes Bio-Rad will maintain its conservative financial
policies such that adjusted debt to EBITDA will be sustained below
2.5 times and retained cash flow to debt will be sustained above
30%, the ratings could be upgraded.
If increased competition, adverse economic conditions or
government funding trends negatively impact Bio-Rad's revenue and
cash flow generation in a meaningful way, Moody's could downgrade
the ratings. Specifically, if Moody's believes leverage will be
sustained above 3.5 times and free cash flow to debt will be
sustained below 10%, the rating agency could downgrade the
ratings.
The principal methodology used in rating Bio-Rad was Moody's
Global Medical Products & Device Industry methodology, published
in October 2009. Other methodologies and factors that may have
been considered in the process of rating this issuer can also be
found in the Rating Methodologies sub-directory on Moody's
website.
Bio-Rad Laboratories, Inc., based in Hercules, California,
operates in two industry segments, Life Science and Clinical
Diagnostics. The Life Science segment includes products for
research, drug discovery and food pathogen testing, primarily in
the laboratory setting. The Clinical Diagnostic segment includes
tests used to detect, identify and quantify substances in blood or
other body fluids and tissues, primarily used in hospital and
reference laboratories. Bio-Rad reported revenues of $2.1 billion
for the twelve months ended December 31, 2011.
BLITZ USA: Creditors' Panel Objects Exclusivity Extension
---------------------------------------------------------
Blitz U.S.A. Inc.'s Official Committee of Unsecured Creditors
filed an objection with the U.S. Bankruptcy Court in connection
with the Debtors' request to extend their exclusive periods in
which to file a Chapter 11 Plan and solicit votes.
The panel contends the extension of the exclusive period will mean
the continued exclusion of the Committee from meaningful
discussions concerning matters that are crucial to the Debtors'
Chapter 11 cases and the reorganization of their businesses.
Although representatives of the Debtors and the Committee had one
productive meeting shortly after the Committee was formed during
which the general parameters of a plan of reorganization were
discussed, the panel said no progress has been made towards
implementing that plan since that date.
What is particularly troubling to the Committee is that the
Debtors acknowledge that they have "begun to meet with their key
constituencies to discuss the outline of a chapter 11 plan,"
including Wal-Mart and certain of their insurance carriers, yet
have purposefully excluded the Committee from these and likely
other discussions in which the Committee is entitled to
participate.
Likewise, although Kinderhook Capital Funds II, L.P., the ultimate
parent of the Debtors, and Crestwood Holdings, Inc., the prior
owner of Blitz, are alleged to share in any liability imposed
against Blitz in connection with certain of the pending product
liability actions which precipitated the commencement of the
Debtors' Chapter 11 Cases, there has been virtually no exchange of
information with respect to the Debtors' discussions with or
otherwise concerning either Kinderhook or Crestwood.
In addition, the Debtors have taken no steps to market or sell the
business of nondebtor affiliate Reliance Products Holdings, Inc.
as is required by the terms of its DIP financing and cash
collateral order entered in the cases. Indeed, as an investment
banker has not yet been retained and marketing has not yet
commenced, the Debtors are virtually certain to miss the
May 31, 2012 deadline for closing on the sale of Reliance as is
required by the DIP Order.
The panel said the Debtors' refusal to involve the Committee in
their reorganization efforts and failure to comply with the DIP
Order is business as usual for these Debtors. The Debtors have a
long history of employing bad faith litigation tactics and
ignoring orders of various courts in order to attempt to gain
litigation advantage. In short, the lack of ongoing substantive
discussions between the Debtors and the Committee concerning
matters that are crucial to formulating a plan undermines the
Debtors' claim that significant progress has been made, and that
the maintenance of the status quo is appropriate.
The panel also said the Debtors' lack of cooperation with the
Committee hardly qualifies as "good faith progress" under any
definition.
The panel said the Debtors' Motion should be denied so that the
process of reorganizing the Debtors' businesses will include the
significant and substantial input of the Committee.
About Blitz USA
Blitz U.S.A. Inc., is a Miami, Oklahoma-based manufacturer of
plastic gasoline cans. The company, controlled by Kinderhook
Capital Fund II LP, filed for bankruptcy protection to stanch a
hemorrhage resulting from 36 product-liability lawsuits.
Parent Blitz Acquisition Holdings, Inc., and its affiliates filed
for Chapter 11 protection (Bankr. D. Del. Case Nos. 11-13602 thru
11-13607) on Nov. 9, 2011. The Hon. Peter J. Walsh presides over
the case.
Blitz USA disclosed $36,194,434 in assets and $41,428,577 in
liabilities in its schedules.
Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger,
represents the Debtors in their restructuring efforts. The
Debtors tapped Zolfo Cooper, LLC, as restructuring advisor; and
Kurtzman Carson Consultants LLC serves as notice and claims agent.
Lowenstein Sandler PC from Roseland, New Jersey, represents the
Official Committee of Unsecured Creditors.
The Chapter 11 case is financed with a $5 million secured loan
from Bank of Oklahoma. Bank of Oklahoma, as DIP agent, is
represented by Samuel S. Ory, Esq., at Frederic Dorwart Lawyers in
Tulsa.
BLUEGREEN CORP: Extends Maturity of Club 36 Loan to June 2013
-------------------------------------------------------------
Bluegreen Corporation, on March 30, 2012, extended the maturity
and modified the terms of its existing loan primarily
collateralized by its Bluegreen Club 36 resort in Las Vegas,
Nevada, with Resort Finance America. The Club 36 Loan had a
balance of $18.1 million on March 30, 2012. The maturity date for
the Club 36 Loan was June 30, 2013. The Club 36 Loan bears
interest at 10%. Principal payments are effected through agreed-
upon release prices as timeshare interests in the Club 36 resort
or as other real estate that serves as collateral under for the
Club 36 Loan are sold.
About Bluegreen Corp.
Bluegreen Corporation -- http://www.bluegreencorp.com/-- provides
places to live and play through its resorts and residential
community businesses.
In December 2010, Standard & Poor's Rating Services raised its
corporate credit rating on Bluegreen Corp to 'B-' from 'CCC'.
S&P's rating outlook on the Company is stable. S&P believes that
Bluegreen will grow its fee-based sales commission revenue from
$20 million in 2009 to an estimated $50 million in 2010. At this
time, S&P expects that Bluegreen may be able to generate at least
the same amount of commission based revenue in 2011. While the
increase in fee- based revenue allowed Bluegreen to expand the
level of sales that do not require financing, S&P believes that
the company will likely remain heavily reliant on its lines of
credit, receivable- backed warehousing facilities, and access to
the timeshare securitization markets to fund timeshare sales. In
S&P's view, Bluegreen currently has adequate sources of liquidity
to cover its needs over the next 12-18 months mainly due to the
successful closing of a timeshare securitization transaction.
The Company reported a net loss of $35.87 million in 2010 and net
income of $3.90 million in 2009. The Company also reported a net
loss of $11.85 million for the nine months ended Sept. 30, 2011.
The Company's balance sheet at Sept. 30, 2011, showed $1.12
billion in total assets, $820.20 million in total liabilities and
$306.23 million in total shareholders' equity.
* * *
In December 2010, Standard & Poor's Rating Services raised its
corporate credit rating on Bluegreen Corp to 'B-' from 'CCC'.
S&P's rating outlook on the Company is stable. S&P believes that
Bluegreen will grow its fee-based sales commission revenue from
$20 million in 2009 to an estimated $50 million in 2010. At this
time, S&P expects that Bluegreen may be able to generate at least
the same amount of commission based revenue in 2011. While the
increase in fee- based revenue allowed Bluegreen to expand the
level of sales that do not require financing, S&P believes that
the company will likely remain heavily reliant on its lines of
credit, receivable- backed warehousing facilities, and access to
the timeshare securitization markets to fund timeshare sales. In
S&P's view, Bluegreen currently has adequate sources of liquidity
to cover its needs over the next 12-18 months mainly due to the
successful closing of a timeshare securitization transaction.
BERNARD L. MADOFF: UBS, Others Ask 2nd Circ. to Bury $30BB Claims
-----------------------------------------------------------------
Eric Hornbeck at Bankruptcy Law360 reports that JPMorgan Chase &
Co., UBS AG and HSBC Holdings PLC fired back Thursday at the
bankruptcy trustee of the Madoff investment firm, urging the
Second Circuit to uphold two rulings that tossed $30 billion in
claims against the banks.
In separate appeals, the banks all said that that Irving H. Picard
-- the trustee overseeing the liquidation of the imprisoned Ponzi
schemer's namesake Bernard L. Madoff Investment Securities LLC --
couldn't collect the claims from the banks for allegedly aiding
Madoff in his massive Ponzi scheme, according to Law360.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970. The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims
agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
US$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.)
As of Feb. 17, 2012 and in the 38 months since his appointment,
the SIPA Trustee has recovered or entered into agreements to
recover more than $9 billion, representing roughly 52% of the
roughly $17.3 billion in principal estimated to have been lost in
the Ponzi scheme by BLMIS customers who filed claims. The
recoveries exceed prior restitution efforts related to Ponzi
schemes both in terms of dollar value and percentage of stolen
funds recovered. Pro rata distributions from the Customer Fund to
BLMIS customers whose claims have been allowed by the SIPA Trustee
totaled $325.7 million.
Mr. Picard has filed 1,000 lawsuits seeking $100 billion from
banks such as HSBC Holdings Plc and JPMorgan Chase & Co. The
trustee has seen more than $28 billion of his claims tossed by
district judges.
BERNARD L. MADOFF: Liquidator Seeks $2.6MM in 7 Latest Suits
------------------------------------------------------------
Maria Chutchian at Bankruptcy Law360 reports that the man in
charge of liquidating Bernard Madoff feeder fund Fairfield Sentry
Ltd. on Friday launched seven more adversary suits in New York
bankruptcy court, looking to claw back more than $2.6 million.
Law360 relates that Banco Patagonia (Uruguay) SAIFE, Triumph
Offshore Fund, Cais Bank, Dreadnought Finance OY, Banco General
SA, HSBC International Trustee Ltd. and Irish Life International
were all targeted in the complaints. Banco General was hit with
the highest amount. It's being sued for about $655,000.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970. The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims
agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
US$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.)
As of Feb. 17, 2012 and in the 38 months since his appointment,
the SIPA Trustee has recovered or entered into agreements to
recover more than $9 billion, representing roughly 52% of the
roughly $17.3 billion in principal estimated to have been lost in
the Ponzi scheme by BLMIS customers who filed claims. The
recoveries exceed prior restitution efforts related to Ponzi
schemes both in terms of dollar value and percentage of stolen
funds recovered. Pro rata distributions from the Customer Fund to
BLMIS customers whose claims have been allowed by the SIPA Trustee
totaled $325.7 million.
Mr. Picard has filed 1,000 lawsuits seeking $100 billion from
banks such as HSBC Holdings Plc and JPMorgan Chase & Co. The
trustee has seen more than $28 billion of his claims tossed by
district judges.
BNC FRANCES: Lender Disputes Bid to Use Cash Collateral
-------------------------------------------------------
JPMCC 2007-CIBC19 Frances Way LLC is objecting to the request of
BNC FRANCES WAY, LP, to use cash which constitutes the lender's
collateral.
Through the Cash Collateral Motion, the Debtor requests approval
to spend nearly $78,000 of cash collateral through April 20, 2012,
and roughly $115,000 on a monthly basis.
The Lender, however, contends that the Debtor has provided no
financial projections showing that the Debtor can generate
sufficient revenue to fund its accruing liabilities, including
utilities, maintenance and property tax obligations. The Debtor
has also failed to provide information regarding its current cash
on hand. In the absence of evidence that the Debtor's projected
revenue during the pendency of the case will be sufficient to
adequately protect the Lender for the Debtor's requested use of
cash collateral, the Debtor's request should be denied.
The Lender also argues it is not adequately protected for the
Debtor's proposed cash collateral use.
Although the Debtor has proposed to provide the Lender replacement
liens in postpetition rents, the Debtor has failed to provide any
projections regarding postpetition rent collections. Furthermore,
since the Debtor has provided no evidence that the Lender is
otherwise adequately protected, there is a question as to whether
Lender can be adequately protected by a pledge of replacement
liens in postpetition rents.
The Debtor is the borrower under a Promissory Note, dated May 15,
2007, in the original principal amount of $7,500,000 payable to
CIBC Inc. The Note was issued to finance the Debtor's purchase of
its property. Pursuant to a Deed of Trust, the Debtor granted
CIBC a first priority lien on substantially all of the Debtor's
assets. JPMCC later acquired the interest under the Note.
Prior to the Petition Date, the Debtor defaulted on its
obligations under the Indebtedness Documents by failing to make
certain payments of principal and interest due under the Note. As
a result of Debtor's continuing defaults, all amounts owed by
Debtor under the Note were accelerated and the Property was posted
for an April 2012 foreclosure sale.
JPMCC said that as of the Petition Date, the outstanding principal
balance of the Note was not less than $7,447,760, plus interest
and other fees.
The Debtor's filing said it "was alleged[sic] indebted to [the
lender] in the approximate amount of $8,600,000"
JPMCC 2007-CIBC19 Frances Way LLC is represented in the case by:
Matthew T. Ferris, Esq.
Eli O. Columbus, Esq.
WINSTEAD PC
5400 Renaissance Tower
1201 Elm Street
Dallas, TX 75270-2199
Tel: (214) 745-5400
Fax: (214) 745-5390
BNC Frances Villas, L.P., filed a bare-bones Chapter 11 petition
(Barnk. N.D. Tex. Case No. 12-32154) in its home-town in Dallas on
April 2, 2012, to halt a foreclosure sale of its property. BNC
owns and operates the Frances Way Villas Apartments in Richardson,
Texas. BNC, a Single Asset Real Estate as defined in 11 U.S.C.
Sec. 101 (51B), estimated assets of up to $50 million and debts of
up to $10 million.
Judge Barbara J. Houser presides over the case. Eric A. Liepins,
P.C., serves as the Debtor's counsel.
BNC FRANCES: Taps Eric Liepins as Chapter 11 Counsel
----------------------------------------------------
BNC Francis Way, LP, seeks the Court's go-signal to hire Eric A.
Liepins, P.C. as its Chapter 11 counsel.
Mr. Liepins charges $250 per hour. The firm's paralegals and
legal assistants charge $30 to $50 per hour. The Firm has been
paid a retainer of $10,000, plus the filing fee.
Eric A. Liepins, Esq., sole shareholder of the firm, attests that
his firm does not presently or hold or represent any interest
adverse to the interest of the Debtor or the estate, and is
disinterested within the meaning of 11 U.S.C. Sec. 101(14).
BNC Frances Villas, L.P., filed a bare-bones Chapter 11 petition
(Barnk. N.D. Tex. Case No. 12-32154) in its home-town in Dallas on
April 2, 2012, to halt a foreclosure sale of its property. BNC
owns and operates the Frances Way Villas Apartments in Richardson,
Texas. BNC, a Single Asset Real Estate as defined in 11 U.S.C.
Sec. 101 (51B), estimated assets of up to $50 million and debts of
up to $10 million.
Judge Barbara J. Houser presides over the case.
BNC FRANCES: Lender Objects to Hiring of Insider
------------------------------------------------
JPMCC 2007-CIBC19 Frances Way, LLC, objects to the request of BNC
Frances Way, LP, to employ Barry S. Nussbaum Company, Inc. dba BNC
Real Estate as manager for the Debtor's apartment property and to
pay Nussbaum a management fee equal to 4% of net collections
attributable to the Property.
The Lender contends the firm is owned by Barry S. Nussbaum, who is
an insider of the Debtor. The Lender also points out that papers
filed by the Debtor and the firm fail to disclose that the firm is
also a creditor of the Debtor, asserting an unsecured claim of
almost $500,000 against the estate.
The Lender objects to the payment of any fees or other amounts to
the firm unless and until the Lender is repaid in full.
According to the Debtor, it chose to hire the firm because it is
familiar with the Debtor's property and is experienced in
operating "this type of property and successfully managed the
asset since October 2000." The Debtor said the firm is being paid
a total of 4% of collections for its services.
BNC Frances Villas, L.P., filed a bare-bones Chapter 11 petition
(Barnk. N.D. Tex. Case No. 12-32154) in its home-town in Dallas on
April 2, 2012, to halt a foreclosure sale of its property. BNC
owns and operates the Frances Way Villas Apartments in Richardson,
Texas. BNC, a Single Asset Real Estate as defined in 11 U.S.C.
Sec. 101 (51B), estimated assets of up to $50 million and debts of
up to $10 million.
Judge Barbara J. Houser presides over the case. Eric A. Liepins,
P.C., serves as the Debtor's counsel.
BNC FRANCES: Sec. 341 Creditors' Meeting Set for May 1
------------------------------------------------------
The U.S. Trustee in Dallas, Texas, will convene a meeting of
creditors under 11 U.S.C. Sec. 341(a) in the Chapter 11 case of
BNC Frances Villas, L.P., on May 1, 2012, at 1:00 p.m. at Dallas,
Room 976.
Proofs of claim are due in the case by July 30, 2012.
BNC Frances Villas, L.P., filed a bare-bones Chapter 11 petition
(Barnk. N.D. Tex. Case No. 12-32154) in its home-town in Dallas on
April 2, 2012, to halt a foreclosure sale of its property. BNC
owns and operates the Frances Way Villas Apartments in Richardson,
Texas. BNC, a Single Asset Real Estate as defined in 11 U.S.C.
Sec. 101 (51B), estimated assets of up to $50 million and debts of
up to $10 million.
Judge Barbara J. Houser presides over the case. Eric A. Liepins,
P.C., serves as the Debtor's counsel.
BURGER KING: Fitch Affirms Junk Rating on $672-Mil. Discount Notes
------------------------------------------------------------------
Fitch Ratings has affirmed the ratings of Burger King Holdings,
Inc. and its related entities as follows:
Burger King Capital Holdings, LLC (BKCH/Parent of Burger King
Holdings, Inc.) and Burger King Capital Finance, Inc.
(BKCF/Financing Subsidiary) as Co-Issuers
-- Long-term Issuer Default Rating (IDR) at 'B-';
-- $672 million face value of 11% senior discount notes due 2019
at 'CC/RR6'.
Burger King Holdings, Inc. (Direct Parent of Burger King
Corporation)
-- Long-term IDR at 'B-'.
Burger King Corporation (Operating Company)
-- Long-term IDR at 'B-';
-- $150 million secured revolver due 2015 at 'BB-/RR1';
-- $1,532 million secured term loan due 2016 at 'BB-/RR1';
-- $248 million secured Euro tranche term loan due 2016 at 'BB-/
RR1';
-- $798 million face value of 9.875% senior unsecured notes due
2018 at 'CCC/RR5'.
At Dec. 31, 2011, the carrying value of BKCH's and BKCF's discount
notes rated by Fitch was $393.4 million. At Dec. 31, 2011, the
carrying value of Burger King Corporation's debt, including
capital leases, was approximately $2.7 billion.
The Rating Outlook has been revised to Positive from Negative.
Fitch expects to assign the following rating to the successor
company after the closing of the recently announced merger and
going public transaction:
Burger King Worldwide, Inc. (Parent Holding Co.)
-- Long-term IDR 'B-'.
Rating Rationale and Triggers:
The Positive Outlook is due to improvement in Burger King's credit
metrics during 2011 and Fitch's view that the firm is making
meaningful progress executing its business strategy. In addition
to achieving its general and administrative (G&A) cost reduction
goals, Burger King is successfully refranchising lower-margin
company stores, expanding outside of North America, and refining
its brand image.
For the year ended Dec. 31, 2011, rent-adjusted leverage (defined
as total debt inclusive of the $393.4 million aggregate carrying
value of 11% discount notes at BKCH and BKCF plus 8 times gross
rents-to-operating EBITDA plus gross rent) was 5.9 times (x).
Operating EBITDAR-to-interest expense plus gross rent was 2.1x and
FFO (funds from operations) fixed charge coverage was 2.0x.
Credit metrics have improved since the firm was acquired by 3G
Capital Partners, Ltd. (3G) in October 2010 mainly due to the
previously mentioned $107 million reduction in G&A expenses over
the past year. Rent-adjusted leverage following the buy-out was
nearly 7.0x.
Fitch believes Burger King's credit statistics could experience
additional improvement in the near term due to better operating
performance and modest debt reduction. According to the terms of
Burger King's credit agreement the firm is required to use 25% of
its annual Excess Cash Flow (as defined by the agreement) for debt
repayment. Fitch estimates this mandatory debt pay down to be
about $80 million. Rent-adjusted leverage consistently below
6.0x, as Fitch expects, along with meaningful free cash flow (FCF)
and stable operating performance could result in an upgrade to
ratings.
The pace of deleveraging could be impacted by the reduction in
EBITDA caused by accelerated refranchising if there is not a
corresponding reduction in debt and rent expense. However, at
Dec. 31, 2011, Burger King had $459 million of cash which could be
used for voluntary additional debt reduction. Should debt
reduction exceed the mandatory prepayment requirement, leverage
could decline faster than currently anticipated by Fitch.
Burger King's current ratings reflect its high financial leverage
and private equity ownership structure, which Fitch believes adds
a level of uncertainty to the firm's on-going financial strategy.
Partially offsetting these negatives are Burger King's free cash
flow generation and relatively stable royalty-based franchise
revenue.
Merger Transaction and Public Listing:
On April 3, 2012, Burger King Worldwide Holdings, Inc. announced
that it will become a publicly traded entity via a business
combination with Justice Holdings Limited (Justice). Under terms
of the definitive agreement, 3G will receive $1.4 billion of cash
in exchange for 29% of its ownership in Burger King. Following
the merger with Justice, which is expected to close in about 60
days, the combined entity will be incorporated in Delaware and
renamed Burger King Worldwide, Inc.
Fitch views the transaction as neutral to mildly positive from a
credit perspective. Burger King will have access to public equity
capital which could help accelerate the firm's growth strategy.
However, the corporation is not expected to receive any cash
proceeds as a result of the merger and will remain closely held
with 3G retaining 71%. Based on Fitch's interpretation of Burger
King's credit agreement and the indenture for the 2018 and 2019
notes, modification of the firm's ownership structure as described
above should not cause a change of control triggering event or
require mandatory debt repayment.
Recovery Ratings:
The 'RR1' Recovery Rating on Burger King's secured debt reflects
Fitch's belief that recovery prospects on these obligations would
remain outstanding at 91%-100% if the firm were to file for
bankruptcy protection or restructure its balance sheet.
Conversely, the 'CCC/RR5' rating on Burger King's 9.875% 2018
notes is due to Fitch view that recovery would be below average or
in the 11% - 30% range in a distressed situation.
The 'CC/RR6' rating on BKCH's and BKCF's 11% discount notes due
2019 implies recovery prospects of 10% or less in a distressed
situation because the notes are structurally subordinated to
Burger King's debt. Unlike the discount notes, Burger King's debt
is guaranteed and was issued by the operating company which holds
the vast majority of the firm's $5.6 billion of assets. An
upgrade in the IDR of Burger King or related entities or greater
than expected debt reduction could result in one or more upgrades
to issue level and Recovery Ratings assigned to all of the
aforementioned obligations.
Same-Store Sales and Operational Update:
Burger King's global system-wide same-store sales (SSS)
performance improved during 2011 but trends in North America,
which represents 67% of revenue and 66% of operating profit
excluding corporate expenses, have remained weak. System-wide SSS
declined 0.5% during 2011 after declining 2.4% during the
comparable period in 2010. SSS performance in the U.S. and
Canada, however, remained especially weak at negative 3.4% in 2011
and negative 4.4% in 2010.
Efforts to turn around sales in North America involve changes to
Burger King's menu and marketing strategy. The firm has improved
the quality of its French fries and has introduced menu items with
broader appeal such as its Chef's Choice burgers, premium salads,
specialty drinks, and soft serve ice cream. Burger King has also
increased spending on advertising which has become more food-
centric and focused on core assets such as its signature flame-
grilled cooking process. If the firm is successful with its
execution and changes in the menu and marketing resonate with
consumers, SSS trends in North America should improve.
As previously mentioned, Burger King successfully achieved its
target of $85 million - $110 million of annual G&A cost savings
during 2011. The firm's operating EBITDA margin improved to 25%,
up from about 20% for the comparable 12-month period due to lower
G&A and the refranchising of 45 units. Significant additional G&A
cost reductions are not anticipated. However, the firm's EBITDA
margin is expected to increase meaningfully following its recently
announced agreement with Carrols Restaurant Group, Inc. (Carrols;
NASDAQ: TAST). Commodity costs are also expected to become less
of a headwind for the Burger King system in 2012.
Transaction with Carrols:
On March 26, 2012, Burger King entered into an asset purchase
agreement with Carrols - the firm's largest franchisee in North
America with 297 units at the end of 2011. The arrangement
entails the refranchising of 278 company-operated stores and a
commitment to remodel approximately 450 units in the brand's 20/20
image over the next three and a half years. The transaction will
be margin accretive because franchised units are more profitable
than company-operated stores due to lower overall operating cost
at the corporate level. However, the decline in company
restaurant revenue and EBITDA give up associated with this
transaction has been factored into Fitch's expectations regarding
rent-adjusted leverage.
The total consideration to Burger King will include a 28.9% equity
interest in Carrols and cash of approximately $15.8 million.
Concentration of franchisees is viewed negatively by Fitch, but
Burger King's ownership interest and representation on Carrols'
board partially mitigates this concern. While Carrols is an
experienced operator, Burger King will be able to exercise greater
influence over the management of a large block of its restaurants
in the U.S.
The Carrols transaction, which is expected to close later this
year, is viewed as consistent with Burger King's strategy of
actively refranchising company-operated restaurants. Once
completed, Fitch estimates that the Burger King system will be
more than 92% franchised, up from 90% at Dec. 31, 2011.
Furthermore, the agreement reflects continued progress the firm is
making to help broaden its appeal to a more diverse demographic of
consumers via the re-imaging of its restaurants.
Liquidity and Maturities:
As mentioned previously, Burger King had $459 million of cash at
Dec. 31, 2011. Excluding about $15 million of letters of credit,
the firm also had $136 million of availability on its revolver.
Burger King's liquidity is adequate and is further supported by
its consistent generation of meaningful FCF. Fitch believes
Burger King has the capacity to generate over $200 million of FCF
annually but does not expect the firm's cash balance to remain at
elevated levels.
Aggregate maturities of long-term debt are manageable with $28
million due annually through 2015. Burger King's term loans
amortize at a rate of 0.25% quarterly with the balance payable at
maturity on Oct. 19, 2016. Burger King's 9.875% senior unsecured
notes become due Oct. 15, 2018, and BKCH's and BKCF's 11% discount
notes mature April 15, 2019.
The discount notes are currently not guaranteed by Burger King, as
mentioned previously, but cash required to service the notes will
be funded with distributions from Burger King. This is because
BKCH and BKCF have no operations or assets other than their
interest in Burger King. The discount notes are also cross-
defaulted to Burger King's debt resulting in a greater incentive
for the operating company to service them.
Financial Covenants:
Burger King's credit agreement subjects the company to maximum
total leverage, not adjusted for leases, and minimum interest
coverage financial covenants. Maximum leverage was 7.50x in 2011
but declines by 0.25x annually to 6.0x in 2016. Minimum interest
coverage was 1.70x at Dec. 31, 2011 but increases to 2.0x by Sept.
30, 2014. Fitch estimates that Burger King's leverage, as
calculated by its agreement, was 4.4x at Dec. 31, 2011 providing
the company with approximately 40% EBITDA cushion. EBITDA
headroom under the minimum interest coverage test is also believed
to be considerable at over 40%.
Both the 9.875% notes and the 11% discount notes contain change of
control and equity clawback provisions should the company engage
in equity offerings prior to Oct. 15, 2013. Given the voluntary
nature of any equity clawback and the structure of the merger with
Justice, Fitch has not incorporated any debt reduction associated
with these notes into its expectations.
CAGLE'S INC: Koch-Led Auction Set for May 10
--------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Cagle's Inc. will sell the assets at auction on
May 10 under procedures approved by the U.S. Bankruptcy Judge in
Atlanta. Unless there is a better offer, an affiliate of Koch
Foods Inc. will buy the business for $37 million plus the value of
inventory and accounts receivable, less accounts payable that
will be assumed. The net addition to the purchase price is about
$35.3 million, Cagle's said. Competing bids are due May 4. A
hearing to approve the sale is scheduled to take place May 11.
According to the report, unless competing bids require a change in
the payment formula, Koch must pay $55 million in cash when the
sale is completed, with the remainder in a two-year note at 8
percent interest. There will be no payments on the note until
February 2013.
About Cagle's
Cagle's Farms (NYSE: CGL.A) -- http://www.cagles.net/-- engages
in the production, marketing, and distribution of fresh and frozen
poultry products in the United States.
Cagle's Inc. and its wholly owned subsidiary Cagle's Farms filed
on Oct. 19, 2011, voluntary petitions for relief under Chapter 11
of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 11-80202 and
11-80203). Paul K. Ferdinands, Esq., at King & Spalding, in
Atlanta, Georgia, serves as counsel. FTI Consulting, Inc., serves
as the Debtors' financial advisors. Kurtzman Carson LLC serves as
their claims, noticing, and balloting agent.
In its schedules, Cagle's Inc. disclosed $81,998,077 in assets and
$55,304,599 in liabilities as of the Petition Date.
The Official Committee of Unsecured Creditors is represented by
McKenna Long & Aldridge LLP and Lowenstein Sandler as counsel.
J.H. Cohn LLP serves as its financial advisors.
No trustee or examiner has been appointed in the Debtors'
bankruptcy cases.
CAMBRIDGE HEART: McGladrey & Pullen Raises Going Concern Doubt
--------------------------------------------------------------
Cambridge Heart, Inc., filed on March 30, 2011, its annual report
on Form 10-K for the fiscal year ended Dec. 31, 2011.
McGladrey & Pullen, LLP, in Boston, Massachusetts, expressed
substantial doubt about Cambridge Heart's ability to continue as a
going concern. The independent auditors noted that of the
Company's recurring losses, inability to generate positive cash
flows from operations, and liquidity uncertainties from
operations.
The Company reported a net loss of $5.40 million on $2.21 million
of revenues for 2011, compared with a net loss of $5.17 million on
$2.82 million of revenues for 2010.
The Company's balance sheet at Dec. 31, 2011, showed
$1.73 million in total assets, $2.10 million in total liabilities,
$12.75 million of convertible preferred stock, and a stockholders'
deficit of $13.12 million.
A copy of the Form 10-K is available for free at:
http://is.gd/T6HMR2
Tewksbury, Mass.-based Cambridge Heart, Inc., is engaged in the
research, development and commercialization of products for the
non-invasive diagnosis of cardiac disease.
CANO PETROLEUM: Hires Canaccord Genuity as Investment Banker
------------------------------------------------------------
Cano Petroleum Inc. asks permission from the U.S. Bankruptcy Court
to employ Canaccord Genuity as financial advisor.
The firm will, among others, provide these services:
a. assist in analyzing and evaluating the business, operations
and financial position of the Debtor and its strategic
alternatives;
b. assist in preparing descriptive materials regarding the
Debtors for distribution and presentation to potential
Strategic Partners; and
c. assist in the preparation and implementation of a plan to
have discussions with prospective Strategic Partners.
Canaccord's Christian Gibson attests that the firm is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code.
The Debtors also seek approval to pay Canaccord:
a. Retainer: Upon execution of Original Engagement Letter
dated July 21, 2010, the Debtors paid Canaccord $32,500.
b. Success Fee: Upon closing of a Transaction, a fee equal to
(i) 1.50% of the Aggregate Consideration if such
consideration is less than or equal to $140,000,000 and (ii)
2.00% of the Aggregate Consideration if such consideration is
greater than $140,000,000, provided than under no
circumstances will the Success Fee be less than $1,000,000
and that the Retainer Fee paid will be credited against such
Success Fee.
In addition to any fees that may be payable to Canaccord under the
Fee Structure, and regardless of whether any Transaction is
proposed or closed, the Debtors propose to reimburse Canaccord for
all of its reasonable expenses arising out of the engagement
contemplated by the Engagement Agreement.
About Cano Petroleum
Cano Petroleum, Inc. (NYSE Amex: CFW), an independent Texas-
based energy producer with properties in the mid-continent region
of the United States, filed for Chapter 11 bankruptcy (Bank. N.D.
Tex. Lead Case No. 12-31549) on March 7, 2012. Other affiliates
also sought bankruptcy protection: Cano Petro of New Mexico,
Ladder Companies, Inc., Square One Energy, Inc., Tri-Flow, Inc.,
W.O. Energy of Nevada, Inc., W.O. Operating Company, Ltd., W.O.
Production Company, Ltd., and WO Energy, Inc. The cases are
jointly administered.
The Debtors filed for bankruptcy to pursue a sale under a joint
plan of reorganization filed on the petition date. Cano Petroleum
have entered into a Stalking Horse Stock Purchase Agreement with
NBI Services Inc., pursuant to which NBI would purchase all of the
shares of common stock that would be issued by Reorganized Cano
under the Plan for $47.5 million. The deal is subject to higher
and better offers and a possible auction.
The petitions were filed by James R. Latimer, III, chief executive
officer. Judge Barbara J. Houser oversees the case. The Debtors
are represented by lawyers at Thompson & Knight LLP, in Dallas
Texas.
Cano Petroleum's consolidated balance sheet at Sept. 30, 2011,
showed $63.37 million in total assets, $116.25 million in total
liabilities, and a $52.88 million total stockholders' deficit. In
schedules filed with the Court, Cano Petroleum listed $1.16
million in assets and $82.5 million in liabilities.
Union Bank of California, the administrative agent and issuing
lender under the Debtors' prepetition senior credit facility; and
UnionBanCal Equities, Inc., the administrative agent and issuing
lender, under the junior credit facility, are represented by:
William A. "Trey" Wood III, Esq., at Bracewell & Giuliani LLP.
CANO PETROLEUM: Court OKs Supplemental Agreement With BMC Group
---------------------------------------------------------------
The U.S. Bankruptcy Court authorized Cano Petroleum, Inc.,
effective as of March 7, 2012, to expand the employment and
retention of BMC Group Inc. to include services as claims agent on
the terms and conditions set forth in a Supplemental Agreement.
BMC, as the Claims Agent, will, at the request of the Debtors or
the Clerk's Office:
1. assist the Debtors, Thompson & Knight LLP as (proposed)
Debtors' counsel, and/or the Clerk's Office with noticing
and claims docketing;
2. assist the Debtors and Counsel with the administrative
management, reconciliation and resolution of claims; and
3. perform all related tasks to process the proofs of claims
and maintain a claims register.
About Cano Petroleum
Cano Petroleum, Inc. (NYSE Amex: CFW), an independent Texas-
based energy producer with properties in the mid-continent region
of the United States, filed for Chapter 11 bankruptcy (Bank. N.D.
Tex. Lead Case No. 12-31549) on March 7, 2012. Other affiliates
also sought bankruptcy protection: Cano Petro of New Mexico,
Ladder Companies, Inc., Square One Energy, Inc., Tri-Flow, Inc.,
W.O. Energy of Nevada, Inc., W.O. Operating Company, Ltd., W.O.
Production Company, Ltd., and WO Energy, Inc. The cases are
jointly administered.
The Debtors filed for bankruptcy to pursue a sale under a joint
plan of reorganization filed on the petition date. Cano Petroleum
have entered into a Stalking Horse Stock Purchase Agreement with
NBI Services Inc., pursuant to which NBI would purchase all of the
shares of common stock that would be issued by Reorganized Cano
under the Plan for $47.5 million. The deal is subject to higher
and better offers and a possible auction.
The petitions were filed by James R. Latimer, III, chief executive
officer. Judge Barbara J. Houser oversees the case. The Debtors
are represented by lawyers at Thompson & Knight LLP, in Dallas
Texas.
Cano Petroleum's consolidated balance sheet at Sept. 30, 2011,
showed $63.37 million in total assets, $116.25 million in total
liabilities, and a $52.88 million total stockholders' deficit. In
schedules filed with the Court, Cano Petroleum listed $1.16
million in assets and $82.5 million in liabilities.
Union Bank of California, the administrative agent and issuing
lender under the Debtors' prepetition senior credit facility; and
UnionBanCal Equities, Inc., the administrative agent and issuing
lender, under the junior credit facility, are represented by:
William A. "Trey" Wood III, Esq., at Bracewell & Giuliani LLP.
CANO PETROLEUM: Hires Blackhill's Latimer as CRO
------------------------------------------------
Cano Petroleum, Inc., asks permission from the U.S. Bankruptcy
Court to employ James R. Latimer III of Blackhill Partners LLC as
Chief Restructuring Officer.
James R. Latimer III attests that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code.
The firm will, among others, provide these services:
(a) evaluating the Company's strategic alternatives,
(b) selling the Company's assets, and/or raising additional
debt/equity capital for the Company;
(c) providing turnaround crisis management services, and
(d) any other tasks that may be requested by the Company.
The Company proposes to pay the firm these fees and expenses:
a. Fee Retainer: $75,000
b. Expense Retainer: $10,000
c. Monthly Fee: $50,000 per month
d. Termination Fee: $250,000
About Cano Petroleum
Cano Petroleum, Inc. (NYSE Amex: CFW), an independent Texas-
based energy producer with properties in the mid-continent region
of the United States, filed for Chapter 11 bankruptcy (Bank. N.D.
Tex. Lead Case No. 12-31549) on March 7, 2012. Other affiliates
also sought bankruptcy protection: Cano Petro of New Mexico,
Ladder Companies, Inc., Square One Energy, Inc., Tri-Flow, Inc.,
W.O. Energy of Nevada, Inc., W.O. Operating Company, Ltd., W.O.
Production Company, Ltd., and WO Energy, Inc. The cases are
jointly administered.
The Debtors filed for bankruptcy to pursue a sale under a joint
plan of reorganization filed on the petition date. Cano Petroleum
have entered into a Stalking Horse Stock Purchase Agreement with
NBI Services Inc., pursuant to which NBI would purchase all of the
shares of common stock that would be issued by Reorganized Cano
under the Plan for $47.5 million. The deal is subject to higher
and better offers and a possible auction.
The petitions were filed by James R. Latimer, III, chief executive
officer. Judge Barbara J. Houser oversees the case. The Debtors
are represented by lawyers at Thompson & Knight LLP, in Dallas
Texas.
Cano Petroleum's consolidated balance sheet at Sept. 30, 2011,
showed $63.37 million in total assets, $116.25 million in total
liabilities, and a $52.88 million total stockholders' deficit. In
schedules filed with the Court, Cano Petroleum listed $1.16
million in assets and $82.5 million in liabilities.
Union Bank of California, the administrative agent and issuing
lender under the Debtors' prepetition senior credit facility; and
UnionBanCal Equities, Inc., the administrative agent and issuing
lender, under the junior credit facility, are represented by:
William A. "Trey" Wood III, Esq., at Bracewell & Giuliani LLP.
CAPROCK WINE: No Backup Bidder Costs Ch. 11 Trustee $4 Million
--------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the outcome of a lawsuit in Lubbock, Texas, shows the
value of having a backup bidder obligated to purchase the
bankrupt's property if the winner of the auction never completes
the sale.
The report recounts that the lawsuit involved the sale of the
Caprock Wine Co. LLC by a Chapter 11 trustee. A French-born
winemaker named Laurent L. Gruet won the auction with a bid of
$6.5 million. The second-highest bid was $6.25 million. Gruet
never made the required 10 percent deposit after winning the
auction and later admitted he couldn't raise funds to complete the
sale.
According to the report, after trial in bankruptcy court, the
judge assessed damages of $4 million in an April 3 opinion,
because the trustee was later able to mitigate the loss by
reselling the winery at a second auction for $2.5 million. The
bankruptcy judge ruled that Gruet didn't commit fraud even though
he lacked funds sufficient even to pay the $650,000 deposit.
Mr. Rochelle notes that the terms of bankruptcy auctions sometimes
require the second-place bidder to remain bound to purchase the
property if the winner doesn't close. Had that happened in this
case, the trustee would have realized $6.25 million cash rather
than $2.5 million plus a $4 million judgment that may be difficult
to collect.
The opinion is Tarbox v. Devalmont Vineyards-Gruet Winery
(In re Caprock Wine Co. LLC), 10-05021, U.S. Bankruptcy Court,
Northern District of Texas (Lubbock).
Lubbock, Texas-based Caprock Wine Company, LLC, doing business as
Cap*Rock Winery and Cap Rock Winery, filed for Chapter 11
protection (Bankr. N.D. Tex. Case No. 09-50576) on Dec. 23, 2009.
Caprock Real Estate Holdings, L.L.C, filed a separate Chapter 11
petition (Bankr. N.D. Tex. Case No. 09-50577) on the same day.
Both petitions estimated assets and debts of $1 million to $10
million. Harold H. Pigg, Esq., in Lubbock, served as the Debtors'
counsel. The Court, at the behest of the United States Trustee,
ordered the appointment of a Chapter 11 trustee on February 5,
2010.
CAPSTONE INFRASTRUCTURE: S&P Lowers Corp. Credit Rating to 'BB+'
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on Toronto-based Capstone Infrastructure Corp. to
'BB+' from 'BBB-'. At the same time, Standard & Poor's lowered its
global scale preferred stock rating on the company to 'B+' from
'BB', and its Canada scale preferred stock rating to 'P-4(High)'
from 'P-3'. "Standard & Poor's also placed the ratings on
CreditWatch with developing implications, meaning we could raise,
lower, or affirm the ratings upon our review," S&P said.
"We view Capstone's liquidity as 'less-than-adequate', given a
material bank facility maturity within three months," said
Standard & Poor's credit analyst Nicole Martin. "Given the
company's strong ongoing relationships with its banks, we expect
that it should be able to address the upcoming maturity. The
downgrade reflects Standard & Poor's criteria, which stipulate
that a company with 'less-than-adequate' liquidity cannot have a
corporate credit rating higher than 'BB+'."
"Standard & Poor's views the company's revenues and cash flow from
long-term power purchase agreements with provincial government
agencies and investment-grade off-takers as stable. In addition,
we believe there is a track record of sustained high availability
and operating performance of Capstone's generation assets. We
believe that offsetting these strengths are modest asset and
geographic diversity, recontracting risks for two of its material
generating facilities, and our expectation that the company would
increase debt in executing its growth strategy. Evidence of this
includes the acquisition of Bristol Water Holdings UK Ltd. While
we believe that this acquisition will help to stabilize revenue in
the long term, its financing has challenged liquidity," S&P said.
"Based on the maturity date of the CPC Cardinal credit facility in
June 2012 and the senior credit facility in October 2012,
Capstone's liquidity sources did not exceed its uses by 1.2x (as
per our liquidity criteria) as of Dec. 31, 2011. However, under
our criteria, if we believe the company has a credible plan to
address the lack of liquidity that causes sources divided by uses
to be less than 1.2x within three months, then we can still deem
liquidity to be adequate," S&P said.
"The company has outlined several initiatives to address its
liquidity position. These include refinancing some of the hydro
projects under MPT Hydro L.P. and using the net proceeds to reduce
debt outstanding under the CPC facility; recapitalizing
Varmevarden AB (a company, which Capstone purchased in March 2011,
that owns and operates a portfolio of 11 district heating
businesses in Sweden) and using proceeds to reduce the amount
outstanding on the senior credit facility; and other options,
including a new corporate credit facility. To date, the company
has completed the Varmevarden refinancing and realized proceeds of
approximately C$50 million, which it used to pay down a portion of
the senior credit facility," S&P said.
"As we outlined in our Feb. 8 publication, given the importance of
these efforts in rectifying Capstone's near-term liquidity needs,
failure to finalize these plans (including funding) by March 31,
2012, might result in a negative rating action. While the company
has made progress with respect to these various efforts, they were
not finalized by March 31, as per our criteria," S&P said.
"We believe the CreditWatch resolution, which we expect to come
within the next 90 days, could result in a return to investment-
grade status for Capstone. Although we consider it unlikely, if
the company is unable to either pay down or extend its C$119
million bank revolver maturing in June, a multinotch downgrade
could occur," S&P said.
CELANESE CORP: Moody's Revises Outlook on 'Ba2' CFR to Positive
---------------------------------------------------------------
Moody's Investors Service has moved Celanese Corporation's outlook
to positive from stable due to the expectation that the
combination of improved operating performance and ongoing modest
debt reduction will cause credit metrics to improve to levels that
would support a higher rating over the next year.
The firm's Ba2 Corporate Family Rating (CFR), existing debt
ratings and Speculative Grade liquidity (SGL) rating of SGL-1 were
also affirmed.
"Despite weaker year-over-year profits in the fourth quarter of
2011, Celanese performed better than many of its peers and its
financial performance is expected to meaningfully improve in
2012," stated John Rogers, Senior Vice President at Moody's.
"Additionally, Mark Rohr, the new CEO, has stated that debt
reduction is also a higher priority for the company."
RATINGS RATIONALE
Celanese's Ba2 CFR takes into account the company's size and
leading global positions in the acetyl chain, with strong
operational, geographical, and product diversity. In addition, the
company's elevated exposure to developing countries, along with
on-going capital spending in Asia, bodes well for continuing
growth over the next several years. The rating is tempered by
significant exposure to volatile petrochemical feedstocks and
sizable debt-like liabilities (pensions and capitalized operating
leases). Although management has stated its desires to achieve an
investment grade rating, the lack of publicly stated financial
targets has slowed the upward progression of the ratings. A recent
statement by the new CEO indicates that debt reduction will become
a higher priority for the company. To the extent that the company
provides guidance to the market on its targeted capital structure
and financial metrics, there could be upside to the rating.
However, Moody's would not move to an investment grade rating
until the company has refinanced its secured debt and initiated
the process to establish an unsecured credit facility.
The positive outlook reflects the expectation for further
improvements in operating performance along with modest debt
reduction. Moody's currently expects that Celanese's credit
metrics will rise to levels that would support a higher rating
over the next year. Moody's noted that the company has reduced
balance sheet debt by almost $500 million over the past two years
but increases in pension liabilities and capitalized operating
leases have forestalled a more significant improvement in its
adjusted financial metrics.
As of December 31, 2011, the company had Debt/EBITDA of 3.5x and
Retained Cash Flow/Debt of 21%. To the extent that Celanese's
Debt/EBITDA falls to below 3.3 times and Retained Cash Flow/Debt
remains near 20%, a rating upgrade would occur. Additionally, if
management provides guidance on its targeted financial structure
along with a timeframe for achieving their targets, Moody's could
assess the appropriateness of a higher rating. However, if
operating performance is weaker than anticipated and Debt/EBITDA
remains over 3.5x, Moody's would likely return the outlook to
stable. To the extent that Debt/EBITDA rises to over 4.0 times and
Retained Cash Flow/Debt declined to below 15%, on a sustainable
basis, Moody's would likely lower the company's rating.
Celanese's SGL-1 Speculative Grade Liquidity rating is supported
by a large cash balance of over $650 million, expected free cash
flow generation of at least $200 million over the next year and
full availability under its $600 million revolving credit
facility.
The following summarizes the existing ratings:
Celanese Corporation
Ratings affirmed:
Corporate Family Rating -- Ba2
Probability of Default Rating -- Ba2
Celanese U.S. Holdings LLC
Guaranteed senior secured revolver due 2015 and letter of credit
facility due 2014 at Ba1 (LGD3, 34%)
Guaranteed senior secured term loan due 2016 at Ba1 (LGD3, 34%)
$400 million guaranteed senior unsecured notes due 2021 at Ba3
(LGD4, 61%)
$600 million guaranteed senior unsecured notes due 2018 at Ba3
(LGD4, 61%)
Senior unsecured shelf at (P)Ba3
Outlook -- Positive
The principal methodology used in rating Celanese Corporation was
the Global Chemical Industry Methodology published in December
2009. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Celanese Corporation, headquartered in Dallas, Texas, is a leading
global producer of acetyls, vinyl acetate monomer, emulsions,
acetate tow and engineered thermoplastics. Celanese reported sales
of $6.8 billion for the year ended December 31, 2011. Celanese US
Holdings LLC and Celanese Americas LLC are wholly owned
subsidiaries and co-borrowers under the credit facilities.
CELANESE US: S&P Keeps 'BB' Corp. Credit Rating; Outlook Positive
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Dallas-
based Celanese US Holdings LLC to positive from stable. "We also
affirmed all of our ratings, including the 'BB' corporate credit
rating, on the company. We are maintaining our '1' recovery rating
for the senior secured debt obligations, indicating our
expectation of a very high (90% to 100%) recovery in the event of
payment default. Also, we are maintaining our '5' recovery rating
for both tranches of the unsecured notes, indicating our
expectation of a modest (10% to 30%) recovery in the event of
payment default," S&P said.
"The outlook revision reflects the good operating performance at
Celanese and the possibility that, if it continues to maintain
moderate financial policies, we could raise our ratings on the
company by the end of 2012," said Standard & Poor's credit analyst
Liley Mehta. "Earnings growth and debt reduction have
supported improved credit measures with funds from operations to
total debt at 27% as of Dec. 31, 2011. Accordingly, we have
revised our financial risk profile assessment of the firm to
'significant' from 'aggressive'".
"The ratings on Celanese, a subsidiary of Celanese Corp., reflect
our assessment of the company's business risk profile as
'satisfactory' partially offset by a financial risk profile we
view as 'significant'. The company is a leading global producer of
diverse commodity and manufacturing chemicals in a cyclical and
highly competitive industry. However, the relative stability of
operating profits reflects the strength of Celanese's competitive
positions. Solid internal funds generation enhances the company's
flexibility to make bolt-on acquisitions and capital investments
to achieve growth," S&P said.
"Operating performance improved in 2011 over the corresponding
period in 2010, supported by price increases to recover higher raw
material costs--particularly in the acetyl intermediates, consumer
specialties, and industrial specialties segments. Overall sales
volumes declined 1% in 2011 from 2010, with volume growth in the
advanced engineered materials and industrial specialties segments
offset by volume declines in other segments. Consolidated EBITDA
margins are currently about 16%, and the company has taken
restructuring actions including closing certain production
facilities and reducing its overall fixed-cost structure," S&P
said.
"Improved earnings and debt reduction have supported better credit
measures, with FFO to total debt at about 27% as of Dec. 31, 2011,
versus 18.5% a year earlier. Our debt calculations capitalize
operating leases and include unfunded pension and postretirement
benefit obligations. We view an FFO to total debt ratio of 20% on
average as appropriate for the ratings. The excess cash on
Celanese's balance sheet should provide cushion for acquisitions
and growth-related investments," S&P said.
"The positive outlook reflects the company's above-par credit
metrics, and our expectation of continued earnings growth over the
next couple of years," Ms. Mehta continued. "Given its ongoing
product innovation, geographic diversity, and efforts to boost
productivity, we believe that Celanese can maintain its strong
internal cash generation. We do not expect the company to make
significant share repurchases or large acquisitions. We could
raise the long-term ratings by one notch during the next several
quarters if earnings and cash flow continue to increase, so that
Celanese can preserve an FFO to total debt of 25% to 30% on a
sustained basis. This could happen if the firm maintains debt near
current levels while achieving annual top-line growth of 5% to 10%
and operating profit margins at their current 16%."
"On the other hand, we could revise the outlook to stable if FFO
to total debt declines to less than 20% as a result of weaker end-
market demand, greater-than-expected shareholder-friendly
activity, or any large debt-financed acquisitions," S&P said.
CENGAGE LEARNING: S&P Revises Outlook on 'B-' Rating to Negative
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
Stamford, Conn.-based Cengage Learning Holdings II L.P. to
negative from stable. The 'B-' corporate credit rating on the
company was affirmed.
"In addition, Cengage Learning Acquisition Inc. has increased the
size of its 11.5% senior secured notes issuance to $725 million
from $575 million. We affirmed our 'B' issue-level rating on this
debt. The recovery rating remains at '2', indicating our
expectation of substantial (70% to 90%) recovery for noteholders
in the event of a payment default," S&P said.
All other existing issue-level ratings on the company's debt were
also affirmed, with all existing recovery rating remaining
unchanged.
"The outlook revision is based on the higher-than-expected
interest costs of Cengage's financing," said Standard & Poor's
credit analyst Hal Diamond. "We view the revised transaction terms
as increasing the company's already high financial risk. Cengage
will need to refinance its remaining near-term maturities over the
next two years. Any weakening of recently positive revenue trends,
or further refinancing that pressures interest coverage, could
prompt us to lower the rating."
"The 'B-' corporate credit rating on Cengage reflects our
expectation that debt to EBITDA (after amortization of
prepublication costs) will remain high, at more than 8x over the
near term. In addition, prospects for meaningful revenue and
EBIITDA growth are somewhat uncertain. We consider the company's
business risk profile as 'fair', based on its strong business
position in U.S. higher education and professional training
publishing. We assess Cengage's financial risk profile as 'highly
leveraged,' reflecting high debt to EBITDA, thin pro forma
interest coverage, and low discretionary cash flow compared to its
debt burden," S&P said.
"Cengage is the second-largest U.S. college textbook publisher and
is slightly smaller than the higher-education division of Pearson
PLC, the market leader. Cengage has a good market position in the
new textbook market. It has long-term contracts with leading
textbook authors, and a heavy weighting of the sales mix toward
higher-margin backlist sales. Like its competitors, the company
has been affected by the growth of the rental textbook market,
which has increased the availability of discounted used books.
Cengage is also exhibiting declining sales to for-profit
educational institutions, which are experiencing enrollment
pressures as a result of regulation that significantly tightens
their marketing practices. In addition, lower funding from state
and local governments continues to hurt the company's library
reference business, though this is a small contributor to
revenue," S&P said.
"Under our base case scenario, we expect minimal revenue and
EBITDA growth in the fiscal years ending June 30, 2012 and 2013,
as the growing volume of used textbook rentals largely offsets a
slight increase in overall college enrollment. Based on the
midpoint of the company's preliminary earnings guidance, we
estimate that EBITDA will decline roughly 23% in the seasonally
weak fiscal third quarter ended March 31, 2011. This decline was
largely caused by unfavorable comparisons with the same quarter
last year, which benefited from an incentive compensation
reversal. On a comparable basis, sales and EBITDA would have
increased roughly 2% and 10%. The EBITDA margin declined to 34%
for the 12 months ended Dec. 31, 2011, from 35% over the prior 12
months, and we anticipate that it will decline to roughly 33% in
fiscal 2012 and fiscal 2013," S&P said.
"Cengage's debt leverage is considerably higher than that of its
peers, which we view as a disadvantage in light of the potential
for increased competitive pressure. Lease-adjusted debt to EBITDA
(after amortization of prepublication costs) increased to 8.4x in
the 12 months ended Dec. 31, 2011, from 8.1x over the same period
last year, as debt reduction was more than offset by weaker
operating performance. This ratio is consistent with our
indicative financial risk threshold of more than 5x that we
associate with a 'highly leveraged' financial profile. We expect
that if the company continues to direct discretionary cash flow to
debt repayment, debt leverage will decline minimally, to the low-
8x area, in fiscal 2012 and fiscal 2013," S&P said.
"We expect that interest coverage will remain extremely thin, and
that discretionary cash flow and EBITDA conversion to
discretionary cash flow will decline in the next two years.
Subject to the above EBITDA growth assumptions, we expect pro
forma total interest coverage will remain flat, at about 1.25x in
fiscal 2012 and fiscal 2013 because of the higher average cost of
debt. Pro forma EBITDA coverage of interest expense declined to
1.25x over the 12 months ended Dec. 31, 2011, from an actual level
of 1.5x, because of higher interest expense resulting from the
recent refinancings. The company generated discretionary cash flow
of roughly $175 million in the 12 months ended Dec. 31, 2011, and
converted 25% of EBITDA to discretionary cash flow, which was
stable from the same period in the preceding year. We expect that
the transaction will reduce pro forma discretionary cash flow to
roughly $75 million and conversion to about 10%. We believe that
the benefit of unfavorable interest rate swaps expiring in July
2013 could be more than offset by higher interest costs from
additional refinancing," S&P said.
CITIZENS CORP: Trustee Pursues Sale of Financial Data Technology
----------------------------------------------------------------
Brian Reisinger, staff reporter at the Nashville Business Journal,
notes that Gary Murphey, the trustee in the Citizens Corp. case,
is pursuing the sale of a data processing company that has been at
a dispute over financier Ed Lowery's affairs. The report says Mr.
Murphey said he is weighing interest from about a half dozen
suitors who are interested in Financial Data Technology Corp.
FiData is a subsidiary of Citizens in the business of providing
information technology and other back-office services to a large
number of banks in middle Tennessee. As part of a $22.5 million
loan agreement between Citizens and Tennessee Commerce Bank,
Citizens pledged its shares in FiData as collateral to secure the
obligation. After alleging a default by Citizens, TCB asserted
its purported right under a Pledge and Security Agreement between
the parties to exercise voting rights over the FiData stock. TCB
used the voting rights to remove the existing board and instead
appoint and install its own hand-picked director of FiData. Since
that appointment, the Debtor has said, TCB has improperly directed
the operations of FiData for the sole benefit of TCB and to the
detriment of FiData, FiData's customers, Citizens, and other
related entities.
Legends Bank asserts that it is the lead lender with respect to
certain secured indebtedness owed to TCB and participated in by
TCB, Citizens Bank, CedarStone Bank, Community First Bank & Trust,
and Legends. TCB was closed by the Tennessee Department of
Financial Institutions on Jan. 27, 2012, and the Federal Deposit
Insurance Corporation was named Receiver.
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 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.
On Feb. 27, 2012, the Court granted the request of lender Legends
Bank for appointment of a Chapter 11 trustee. The Court held that
an independent person must review many of the transactions
involving CEO Ed Lowery, and its wholly owned subsidiary,
Financial Data Technology Corporation.
CLARE AT WATER: Deadline for Submitting Initial Bids Today
----------------------------------------------------------
Procedures approved by the U.S. Bankruptcy Court for the Northern
District of Illinois require that to participate in an auction for
substantially all of the Debtors' assets of Clare at Water Tower,
initial bids must be submitted by April 10, 2012. If qualified
bids are received, an auction will be held April 12, 2012. The
Debtor will identify the successful bidder by April 23, 2012.
The Debtor has reached a deal with Chicago Senior Care LLC to
become the stalking horse bidder. Chicago Senior Care will buy
the assets for $29.5 million, absent higher and better offers.
The auction will be cancelled and Chicago will be named
"successful bidder" if qualified bids are not received by April
10.
The purchase price includes $29.5 million in cash and the
assumption of certain liabilities. If Chicago is outbid at the
auction, it will receive a break-up fee of $1.35 million and
expense reimbursement of up to $600,000.
The Debtor, with the assistance of Houlihan Lokey, said it will
continue to market the assets up to the bid deadline.
About The Clare at Water Tower
The Clare at Water Tower is an upscale 334-unit high-rise
continuing-care retirement community in Chicago, Illinois. The
project is only 42% occupied because the target population either
hasn't been able to sell homes or lacks sufficient cash to make
required deposits as the result declining investments following
the recession. The facility is a 53-story building on land rented
from Loyola University of Chicago. The facility is managed and
developed by a unit of the Franciscan Sisters of Chicago, who
invested more than $14 million. The project opened in December
2008. Residents must make partially refundable deposits ranging
from $263,000 to $1.2 million. Monthly fees are an additional
$2,700 to $5,500.
The Clare filed for Chapter 11 protection (Bankr. N.D. Ill. Case
No. 11-46151) on Nov. 14, 2011, after defaulting on $229 million
in tax-exempt bond financing used to build the project.
Judge Susan Pierson Sonderby presides over the case. Matthew M.
Murphy, Esq., at DLA Piper LLP, serves as the Debtor's counsel.
Houlihan Lokey Capital, Inc., as its investment banker and
financial advisor. Deloitte Financial Advisory Services LLP
serves as restructuring advisor. Epiq Bankruptcy Solutions serves
as claims and noticing agent. The Debtor, in its amended
schedules, disclosed $56,778,671 in assets and $321,747,63 in
liabilities. The petition was signed by Judy Amiano, president.
The Official Committee of Unsecured Creditors proposed to retain
SNR Denton US LLP as counsel. The Committee also tapped FTI
Consulting, Inc., as its financial advisor.
CLARE AT WATER: Files Amended Schedules of Assets and Liabilities
-----------------------------------------------------------------
The Clare at Water Tower filed with the U.S. Bankruptcy Court for
the Northern District of Illinois on Mar. 30, 2012, its amended
schedules of assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $47,537,779
B. Personal Property $9,240,892
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $232,804,159
E. Creditors Holding
Unsecured Priority
Claims $268,354
F. Creditors Holding
Unsecured Non-priority
Claims $88,052,972
----------- -----------
TOTAL $56,778,671 $321,125,486
A copy of the Amended Schedules is available at no charge
at http://bankrupt.com/misc/THE_CLARE_AT_WATER_sal_amended.pdf
On June 12, 2012, the Debtor filed amended schedules disclosing
$56,778,671 in assets and $321,747,632 in liabilities.
The original schedules filed Dec. 16, 2011, disclosed $56,631,385
in assets and $314,167,822 in liabilities.
About The Clare at Water Tower
The Clare at Water Tower is an upscale 334-unit high-rise
continuing-care retirement community in Chicago, Illinois. The
project is only 42% occupied because the target population either
hasn't been able to sell homes or lacks sufficient cash to make
required deposits as the result declining investments following
the recession. The facility is a 53-story building on land rented
from Loyola University of Chicago. The facility is managed and
developed by a unit of the Franciscan Sisters of Chicago, who
invested more than $14 million. The project opened in December
2008. Residents must make partially refundable deposits ranging
from $263,000 to $1.2 million. Monthly fees are an additional
$2,700 to $5,500.
The Clare filed for Chapter 11 protection (Bankr. N.D. Ill. Case
No. 11-46151) on Nov. 14, 2011, after defaulting on $229 million
in tax-exempt bond financing used to build the project.
Judge Susan Pierson Sonderby presides over the case. Matthew M.
Murphy, Esq., at DLA Piper LLP, serves as the Debtor's counsel.
Houlihan Lokey Capital, Inc., as its investment banker and
financial advisor. Deloitte Financial Advisory Services LLP
serves as restructuring advisor. Epiq Bankruptcy Solutions serves
as claims and noticing agent. The Debtor, in its amended
schedules, disclosed $56,778,671 in assets and $321,747,63 in
liabilities. The petition was signed by Judy Amiano, president.
The Official Committee of Unsecured Creditors proposed to retain
SNR Denton US LLP as counsel. The Committee also tapped FTI
Consulting, Inc., as its financial advisor.
CLARE AT WATER: Again Amends Plan Ahead of April 24 Hearing
-----------------------------------------------------------
The Clare at Water Tower has filed a fourth amended plan of
reorganization dated Apr. 2, 2012.
The fourth amended plan adds these sections:
1.24 Bondholder Contribution means twenty-five thousand
dollars ($25,000) of Sale Proceeds that would otherwise be
payable to the Holders of Allowed Variable Rate Bondholder
Claims and Allowed Fixed Rate Bondholder Claims under this
Plan for distribution to Holders of Third-Party Trade Claims
pursuant to this Plan solely in the event that the Third-
Party Releases are approved pursuant to a Final Order.
1.67 FSCSC Contribution means the aggregate amount of fifty
thousand dollars ($50,000) to be contributed by FSC and/or
FSCSC on or prior to the Effective Date for distribution to
Holders of Third-Party Trade Claims pursuant to this Plan
solely in the event that the Third-Party Releases are
approved pursuant to a Final Order.
1.90 Plan Contribution Amount means collectively the FSCSC
Contribution and the Bondholder Contribution, the aggregate
of which will be distributed to the Holders of Third-Party
Trade Claims pursuant to Section 3.2.7 of this Plan solely in
the event that the Third-Party Releases are approved pursuant
to a Final Order.
1.129 Third-Party Trade Claims means General Unsecured Claims
other than Unsecured Deficiency Claims of Holders of Class 3
and Class 4 Claims or Claims of FSC and FSCSC.
1.130 Third-Party Releases means the releases and
exculpations being given to the non-Debtor Released Parties
under and pursuant to this Plan.
The amended plan also revises the treatment of general unsecured
claims as follows:
"Unless otherwise agreed by the Holder of any Allowed Claim
in this Class, (a) each Holder of an Allowed General
Unsecured Claim shall be entitled to receive: (i) such
Holder's Pro Rata Share of any Sale Proceeds, if any,
available after the full payment and satisfaction of Allowed
Claims in Classes 1 through 5 (other than any Claim
constituting an Unsecured Deficiency Claim) and Compensation
and Reimbursement Claims Allowed as of the Effective Date,
Priority Tax Claims Allowed as of the Effective Date, Trustee
Fee Claims Allowed as of the Effective Date, DIP Claims
Allowed as of the Effective Date, the Administrative and
Priority Claims Reserve Amount, the Plan Expense Reserve
Amount and all expenses in amounts provided in the Wind-Down
Budget; and (ii) such Holder's Pro Rata Share of any net
recoveries from Avoidance and Other Actions; and (b) solely
in the event that the Third-Party Releases are approved
pursuant to a Final Order, each Holder of an Allowed Third-
Party Trade Claim will receive their Pro Rata Share of the
Plan Contribution Amount. The Holders of Allowed Class 3
and Class 4 Claims shall retain their Unsecured Deficiency
Claims but shall waive any Distribution thereon to the extent
that such Distribution consists of the proceeds of the Plan
Contribution Amount. FSC and FSCSC shall retain their
Allowed Class 7 Claims but shall waive any Distribution
thereon to the extent that such Distribution consists of the
proceeds of the Plan Contribution Amount."
A full-text copy of the Fourth Amended Plan Of Reorganization is
available for free at:
http://bankrupt.com/misc/THE_CLARE_AT_WATER_plan_4thamended.pdf
April 24 Hearing
As reported in the Troubled Company Reporter on Apr. 2, 2012,
the U.S. Bankruptcy Court for the Northern District of Illinois
will convene a hearing on April 24, 2012, at 2:00 p.m. (prevailing
central time), to consider the confirmation of The Clare at Water
Tower's Third Amended Plan of Reorganization. Objections, if any,
are due April 20, at 5:00 p.m.
Ballots accepting or rejecting the Plan are due April 18.
According to the Disclosure Statement, amended as of March 21,
2012, the Plan provides for (i) the sale of substantially all of
the Debtor's assets pursuant to Chicago Senior Care LLC or the
winning bidder at an auction, and (ii) the Plan Administrator's
subsequent liquidation of the Debtor's remaining Assets,
administration of the Plan and the wind-down of the Debtor and its
Estate post-Effective Date.
On March 9, 2012, the Debtor and Chicago Senior Care, as stalking
horse bidder, executed the Stalking Horse Agreement for the sale
of substantially all of the Debtor's operations to the Stalking
Horse Bidder for a cash purchase price of $29,500,000 and the
assumption of certain specific liabilities (including
approximately $57,000,000 of current and former resident entrance
deposit refund obligations and approximately $121,500 of Parking
Deposits).
The Plan will be funded from the proceeds of the Asset Sale,
including, but not limited to, Sale Proceeds, and all other
remaining assets of the Debtor.
Under the Plan, Administrative Expense Claims, Compensation and
Reimbursement Claims, Priority Tax Claims, Trustee Fees, DIP
Claims, Other Priority Claims, Secured Tax Claims, and Other
Secured Claims will be paid 100% of their claims.
Creditors Variable Rate Bondholder and Fixed Rate Bondholder will
recover 15% of their claims.
General Unsecured Creditors will not receive any distribution on
account of their claims, unless the purchase price for the assets
exceed Chicago Senior Care's stalking-horse offer. There will be
an auction April 12 if qualified-bids are received by the
deadline.
About The Clare at Water Tower
The Clare at Water Tower is an upscale 334-unit high-rise
continuing-care retirement community in Chicago, Illinois. The
project is only 42% occupied because the target population either
hasn't been able to sell homes or lacks sufficient cash to make
required deposits as the result declining investments following
the recession. The facility is a 53-story building on land rented
from Loyola University of Chicago. The facility is managed and
developed by a unit of the Franciscan Sisters of Chicago, who
invested more than $14 million. The project opened in December
2008. Residents must make partially refundable deposits ranging
from $263,000 to $1.2 million. Monthly fees are an additional
$2,700 to $5,500.
The Clare filed for Chapter 11 protection (Bankr. N.D. Ill. Case
No. 11-46151) on Nov. 14, 2011, after defaulting on $229 million
in tax-exempt bond financing used to build the project.
Judge Susan Pierson Sonderby presides over the case. Matthew M.
Murphy, Esq., at DLA Piper LLP, serves as the Debtor's counsel.
Houlihan Lokey Capital, Inc., as its investment banker and
financial advisor. Deloitte Financial Advisory Services LLP
serves as restructuring advisor. Epiq Bankruptcy Solutions serves
as claims and noticing agent. The Debtor, in its amended
schedules, disclosed $56,778,671 in assets and $321,747,63 in
liabilities. The petition was signed by Judy Amiano, president.
The Official Committee of Unsecured Creditors proposed to retain
SNR Denton US LLP as counsel. The Committee also tapped FTI
Consulting, Inc., as its financial advisor.
CONTRACT RESEARCH: Wants to Hire Jefferies as Financial Advisors
----------------------------------------------------------------
Contract Research Solutions, Inc., and its debtor-affiliates will
appear before the Court on April 24 to seek permission to employ
Jefferies & Company Inc. as financial advisors.
Cetero hired Jefferies in September 2011 to serve as financial
advisor in connection with a restructuring of the Company or a
possible sale, disposition or other business transaction involving
Cetero's equity or assets.
Cetero proposes to pay the firm a $125,000 monthly fee. Upon
consummation of a DIP financing, Jefferies will also receive a fee
equal to 2.0% of the greater of the total committed amount of, or
the aggregate gross proceeds from, the DIP facility.
The prepetition first lien lenders led by Freeport Financial LLC,
as agent, have committed to provide up to $15 million in
postpetition funding. Under an Interim DIP Order, the Debtors
were given authority to use up to $2.4 million of the DIP funds.
In the event of a merger or acquisition transaction, Jefferies
will be entitled to a fee equal to the greater of $1.25 million
and 1.0% of the transaction value. In the event of more than one
such qualifying transaction, the firm will be paid no less than
$1.50 million in the aggregate for all transactions.
In the event of a restructuring, the firm will be paid a
restructuring fee equal to the greater of $2.25 million and 1.0%
of the aggregate principal amount of all restructured liabilities.
The total aggregate fee will not exceed $4 billion, inclusive of
any fees from the M&A Transaction.
The Debtors also propose that 50% of the Monthly Fee actually paid
to Jefferies in excess of $375,000 and up to $1.125 million and
75% of the Monthly Fees actually paid to Jefferies in excess of
$1.125 million will be credited against any M&A Fee or
Restructuring Fee.
The Debtors also propose that 100% of the first net Transaction
Fee -- net of the Monthly Fees -- actually received by Jefferies
will be credited once against any subsequent Transaction Fee due
to Jefferies but in no event will the crediting result in a
Transaction Fee that is less than $0 and in no event will one M&A
Fee be credited against another M&A Fee or one Restructuring Fee
be credited against another Restructuring Fee.
The Debtors said that Jefferies is not owed any amounts with
respect to the prepetition fees and expenses. During the 90-day
period prior to the Petition Date, Jefferies received in the
ordinary course the payment of four Monthly Fees totaling $500,000
and expense reimbursement of $32,422.
The Debtors also propose to indemnify Jefferies.
About Cetero
Contract Research Solutions Inc., doing business as Cetero, a
provider of early-phase clinical research services for
pharmaceutical and biotechnology firms, filed a Chapter 11
petition (Bankr. D. Del. Case No. 12-11004) March 26, 2012.
Cetero's 19 affiliates sought bankruptcy protection (Bankr. D.
Del. Case Nos. 12-11005 to 12-11023).
Cetero plans to sell the business, including their rights to
pursue avoidance actions, to first-lien secured lenders in
exchange for $50 million in debt, absent higher and better offers.
Cetero has filed a motion seeking approval of procedures that will
govern the bidding and auction. The first-lien lenders have
formed entities that will acquire the business -- CSRI Holdings
LLC, as U.S. Purchaser, and 0935867 B.C. Ltd and 0935870 B.C. Ltd,
as Canadian Purchasers. Together, they will serve as stalking
horse bidders and have offered to exchange $50 million in secured
debt and assume $30 million in liabilities to buy the assets.
First lien lenders are also providing a $15 million loan to
finance the Chapter 11 effort. The procedures require that the
bidding protocol be approved by April 12 and an auction be held
between April 30 and May 5. Competing bids are due three days
prior to the auction date. The hearing for approval of the sale
must take place prior to May 10.
Assets are $205 million, with debt total $248 million. There is
$185 million in debt for borrowed money, including $116 million on
a first-lien term loan and revolving credit. The second-lien loan
is $25 million. Second-lien lenders have agreed to the sale.
Freeport Financial LLC serves as the sole lead arranger and
bookrunner, and as U.S. administrative agent and collateral agent
under the first lien facility. Bank of Montreal serves as the
Canadian agent. Freeport is also the agent under the second lien
facility.
Judge Kevin Gross oversees the case. Lawyers at Young Conaway
Stargatt & Taylor, LLP, and Paul Hastings LLP serve as the
Debtors' counsel. Stikeman Elliott LLP serves as Canadian
counsel. Carl Marks Advisory Group LLC serves as restructuring
advisor. Epiq Bankruptcy Solutions serves as claims and notice
agent. The petitions were signed by Michael T. Murren, CFO.
The first lien lenders and the stalking horse buyers are
represented by Peter Knight, Esq., at Latham & Watkings, LLP; and
Wael Rostom, Esq., at McMillan LLP.
CONTRACT RESEARCH: Hires Carl Marks as Restructuring Advisors
-------------------------------------------------------------
Contract Research Solutions, Inc., and its debtor-affiliates seek
to employ Carl Marks Advisory Group LLC as restructuring advisors.
The Debtors propose to pay CMAG a fixed fee of $145,000 per full
month. CMAG will also be paid $600 per hour for services to be
provided by certain additional personnel, up to a maximum of 40
hours over the entire engagement, but only as requested by Cetero
in a separate writing.
Before the petition date, CMAG received $50,000 as retainer.
Cetero also has agreed to indemnify the firm.
A hearing on the Debtors' request is set for April 24.
About Cetero
Contract Research Solutions Inc., doing business as Cetero, a
provider of early-phase clinical research services for
pharmaceutical and biotechnology firms, filed a Chapter 11
petition (Bankr. D. Del. Case No. 12-11004) March 26, 2012.
Cetero's 19 affiliates sought bankruptcy protection (Bankr. D.
Del. Case Nos. 12-11005 to 12-11023).
Cetero plans to sell the business, including their rights to
pursue avoidance actions, to first-lien secured lenders in
exchange for $50 million in debt, absent higher and better offers.
Cetero has filed a motion seeking approval of procedures that will
govern the bidding and auction. The first-lien lenders have
formed entities that will acquire the business -- CSRI Holdings
LLC, as U.S. Purchaser, and 0935867 B.C. Ltd and 0935870 B.C. Ltd,
as Canadian Purchasers. Together, they will serve as stalking
horse bidders and have offered to exchange $50 million in secured
debt and assume $30 million in liabilities to buy the assets.
First lien lenders are also providing a $15 million loan to
finance the Chapter 11 effort. The procedures require that the
bidding protocol be approved by April 12 and an auction be held
between April 30 and May 5. Competing bids are due three days
prior to the auction date. The hearing for approval of the sale
must take place prior to May 10.
Assets are $205 million, with debt total $248 million. There is
$185 million in debt for borrowed money, including $116 million on
a first-lien term loan and revolving credit. The second-lien loan
is $25 million. Second-lien lenders have agreed to the sale.
Freeport Financial LLC serves as the sole lead arranger and
bookrunner, and as U.S. administrative agent and collateral agent
under the first lien facility. Bank of Montreal serves as the
Canadian agent. Freeport is also the agent under the second lien
facility.
Judge Kevin Gross oversees the case. Lawyers at Young Conaway
Stargatt & Taylor, LLP, and Paul Hastings LLP serve as the
Debtors' counsel. Stikeman Elliott LLP serves as Canadian
counsel. Jefferies & Co. serves as financial advisor. Epiq
Bankruptcy Solutions serves as claims and notice agent. The
petitions were signed by Michael T. Murren, CFO.
The first lien lenders and the stalking horse buyers are
represented by Peter Knight, Esq., at Latham & Watkings, LLP; and
Wael Rostom, Esq., at McMillan LLP.
CONTRACT RESEARCH: Wants Schedules Filing Deadline Extended
-----------------------------------------------------------
Contract Research Solutions, Inc., and its debtor-affiliates ask
the Bankruptcy Court to extend their time to file schedules of
assets and liabilities, executory contracts and unexpired leases,
current income and expenditures, and statements of financial
affairs for an additional 30 days beyond the 30-day deadline
established by local bankruptcy rules in Delaware.
Pursuant to Sec. 521 of the Bankruptcy Code and Fed. R. Bankr. P.
1007, Cetero is required to file its Schedules within 14 days
after the bankruptcy filing. Rule 1007-1(b) of the Local Rules of
Bankruptcy Practice and Procedure for the United States Bankruptcy
Court for the District of Delaware provides that if the bankruptcy
petition is accompanied by a list of all the debtor's creditors
and their addresses and if the total number of creditors in the
case exceeds 200, the filing deadline is automatically extended to
30 days after the Petition Date. Cetero said it meets the local
rule's requirements.
Cetero also said that due to the complexity and diversity of its
operations, and the burdens occasioned by preparing for the
Chapter 11 filing, it anticipates it will be unable to complete
the Schedules with the initial 30-day period.
About Cetero
Contract Research Solutions Inc., doing business as Cetero, a
provider of early-phase clinical research services for
pharmaceutical and biotechnology firms, filed a Chapter 11
petition (Bankr. D. Del. Case No. 12-11004) March 26, 2012.
Cetero's 19 affiliates sought bankruptcy protection (Bankr. D.
Del. Case Nos. 12-11005 to 12-11023).
Cetero plans to sell the business, including their rights to
pursue avoidance actions, to first-lien secured lenders in
exchange for $50 million in debt, absent higher and better offers.
Cetero has filed a motion seeking approval of procedures that will
govern the bidding and auction. The first-lien lenders have
formed entities that will acquire the business -- CSRI Holdings
LLC, as U.S. Purchaser, and 0935867 B.C. Ltd and 0935870 B.C. Ltd,
as Canadian Purchasers. Together, they will serve as stalking
horse bidders and have offered to exchange $50 million in secured
debt and assume $30 million in liabilities to buy the assets.
First lien lenders are also providing a $15 million loan to
finance the Chapter 11 effort. The procedures require that the
bidding protocol be approved by April 12 and an auction be held
between April 30 and May 5. Competing bids are due three days
prior to the auction date. The hearing for approval of the sale
must take place prior to May 10.
Assets are $205 million, with debt total $248 million. There is
$185 million in debt for borrowed money, including $116 million on
a first-lien term loan and revolving credit. The second-lien loan
is $25 million. Second-lien lenders have agreed to the sale.
Freeport Financial LLC serves as the sole lead arranger and
bookrunner, and as U.S. administrative agent and collateral agent
under the first lien facility. Bank of Montreal serves as the
Canadian agent. Freeport is also the agent under the second lien
facility.
Judge Kevin Gross oversees the case. Lawyers at Young Conaway
Stargatt & Taylor, LLP, and Paul Hastings LLP serve as the
Debtors' counsel. Stikeman Elliott LLP serves as Canadian
counsel. Jefferies & Co. serves as financial advisor and Carl
Marks Advisory Group LLC serves as restructuring advisor. Epiq
Bankruptcy Solutions serves as claims and notice agent. The
petitions were signed by Michael T. Murren, CFO.
The first lien lenders and the stalking horse buyers are
represented by Peter Knight, Esq., at Latham & Watkings, LLP; and
Wael Rostom, Esq., at McMillan LLP.
CONTRACT RESeARCH: April 24 Hearing on Proposed Bonuses
-------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Contract Research Solutions Inc. filed a motion for
approval of a bonus program that would pay executives $1.3
million if the business is sold to first-lien lenders under an
agreement worked about before bankruptcy. There will be a hearing
on April 24 in U.S. Bankruptcy Court in Delaware.
According to the report, in the motion, Cetero, as the company is
known, admitted that the proposed bonuses have "some retentive
effect." The company was referring to a provision added to
bankruptcy law in 2005 where Congress banned retention bonuses to
senior executives of bankrupt companies.
Cetero, the report relates, says the primary purpose of the
program is to motivate executives to maximize the sale price.
Before bankruptcy, all prospective buyers dropped out aside from
the existing lenders.
About Cetero
Contract Research Solutions Inc., doing business as Cetero, a
provider of early-phase clinical research services for
pharmaceutical and biotechnology firms, filed a Chapter 11
petition (Bankr. D. Del. Case No. 12-11004) March 26, 2012.
Cetero's 19 affiliates sought bankruptcy protection (Bankr. D.
Del. Case Nos. 12-11005 to 12-11023).
Cetero plans to sell the business, including their rights to
pursue avoidance actions, to first-lien secured lenders in
exchange for $50 million in debt, absent higher and better offers.
Cetero has filed a motion seeking approval of procedures that will
govern the bidding and auction. The first-lien lenders have
formed entities that will acquire the business -- CSRI Holdings
LLC, as U.S. Purchaser, and 0935867 B.C. Ltd and 0935870 B.C. Ltd,
as Canadian Purchasers. Together, they will serve as stalking
horse bidders and have offered to exchange $50 million in secured
debt and assume $30 million in liabilities to buy the assets.
First lien lenders are also providing a $15 million loan to
finance the Chapter 11 effort. The procedures require that the
bidding protocol be approved by April 12 and an auction be held
between April 30 and May 5. Competing bids are due three days
prior to the auction date. The hearing for approval of the sale
must take place prior to May 10.
Assets are $205 million, with debt total $248 million. There is
$185 million in debt for borrowed money, including $116 million on
a first-lien term loan and revolving credit. The second-lien loan
is $25 million. Second-lien lenders have agreed to the sale.
Freeport Financial LLC serves as the sole lead arranger and
bookrunner, and as U.S. administrative agent and collateral agent
under the first lien facility. Bank of Montreal serves as the
Canadian agent. Freeport is also the agent under the second lien
facility.
Judge Kevin Gross oversees the case. Lawyers at Young Conaway
Stargatt & Taylor, LLP, and Paul Hastings LLP serve as the
Debtors' counsel. Stikeman Elliott LLP serves as Canadian
counsel. Jefferies & Co. serves as financial advisor and Carl
Marks Advisory Group LLC serves as restructuring advisor. Epiq
Bankruptcy Solutions serves as claims and notice agent. The
petitions were signed by Michael T. Murren, CFO.
The first lien lenders and the stalking horse buyers are
represented by Peter Knight, Esq., at Latham & Watkings, LLP; and
Wael Rostom, Esq., at McMillan LLP.
COOPER COS: S&P Ups Corp. Credit Rating From 'BB+'; Outlook Stable
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Pleasanton, Calif.-based Cooper Cos. Inc. to 'BBB-' from
'BB+'. The rating outlook is stable.
"The upgrade reflects operational and financial strengthening over
the past year, which has led us to revise our view of Cooper's
financial risk to 'modest' from 'intermediate,'" S&P said.
"We expect that management will maintain financial parameters
consistent with 'modest' financial risk as per our criteria,"
noted Standard & Poor's credit analyst Cheryl Richer.
"Debt protection metrics have already stabilized at the stronger
end of this range for the past four quarters. Adjusted debt to
EBITDA and funds from operations (FFO) to adjusted debt were 1.4x
and 68%, respectively, for the 12 months ended Jan. 30, 2012, and
we expect little change in fiscal 2012," S&P said.
"We believe that EBITDA and cash flow will continue to improve.
Cooper should be able to grow soft contact lens sales a few
hundred basis points above the industry growth rate (estimated at
4% to 5%) as it introduces new silicone hydrogel (SiH) lens
categories, such as Avaira toric, and expands in new geographies,
such as Japan. The EBITDA margin could be negatively affected in
fiscal 2012 by the Avaira recall; however, we generally expect the
EBITDA margin to strengthen by 50 to 100 basis points annually,
reflecting manufacturing improvements and trade-up of customers
from hydrogel to higher-margin SiH lenses. This margin improvement
will be slightly offset as the single wear lenses, which have
lower margins but higher profit per customer, grow relative to
two-week and monthly modalities," S&P said.
"We expect free operating cash flow to exceed $200 million in
2012, and increase at a greater rate of growth than revenues
thereafter, reflecting margin improvement. We believe that Cooper
will deploy the majority of cash flow to acquisitions, and a
lesser amount to fund share repurchases. Under our base case, we
believe the company could execute a debt-financed acquisition of
up to $600 million and maintain the 'BBB-' rating," S&P said.
"Our view of Cooper's business risk profile as 'fair' reflects a
lack of product diversity, given that CooperVision (CVI)
represents 83% of total sales, only partially offset by some
diversity within the category. The company manufactures and
markets a variety of soft contact lenses, including value-added
specialty products such as toric lenses (to correct astigmatism),
multifocal, and more commodity-like spherical contact lenses. CVI
has distinguished itself as a leader in toric lenses, which
represent 30% of sales. Offering a variety of technologies, SiH
lenses and Proclear lenses reflect 26% and 32%, of soft contact
lens sales. The company's global footprint provides some diversity
for the otherwise narrowly focused business, with the Americas,
Europe/Middle East, and Asia/Pacific representing 39%, 36%, and
25% of sales," S&P said.
"Cooper's 'fair' business profile also reflects competition from
much larger players in the $7 billion contact lens industry, such
as the Vision Care division of Johnson & Johnson (over 40% market
share) and CIBA Vision (owned by Novartis AG). With a market share
of about 17%, CVI has overtaken Bausch & Lomb for the No. 3 spot
in global sales, and holds a No. 2 market share in the U.S.
Despite its lack of dominance in the industry, customer switching
between contact lens brands is typically low. Cooper recently
announced that it will introduce a daily SiH in the second half of
2012. Japan, which is the second-largest contact lens market
(after the U.S.), is the fastest growing single-use lens market,"
S&P said.
"CooperSurgical (CSI) produces women's health care products.
Although it contributes only 17% of total revenues, CSI has grown
organically and through a series of acquisitions over the past
several years. Margins have steadily strengthened and, given
minimal capital expenditure needs, this business has been a strong
cash flow generator. Expanding its customer base, products for
surgical procedures now comprise 23% of sales. This served to
modestly insulate CSI from the recession, given that GYN office
visits declined. Office products comprise 31% of sales. We expect
CSI to remain acquisitive and that tuck-in acquisitions will be
financed with internally generated cash," S&P said.
COUGAR OIL: President G. Watt Resigned Effective March 31
---------------------------------------------------------
Cougar Oil and Gas Canada, Inc. (COUGF) said Glenn Watt has
resigned as President of the Company effective March 31, 2012 to
pursue other interests internationally. Mr. Watt will continue on
the Board of Directors of the Company and provide a limited amount
of consulting for operations while the Company is in CCAA. Mr. Wm
Tighe has assumed the role of president in for the interim while
the Company continues in CCAA.
While under CCAA protection, the Company will continue with its
day to day operations with the assistance of Ernst & Young Inc. in
its capacity as the Court-appointed Monitor of the Company. The
Company anticipates presenting a restructuring Plan to its
creditors in these CCAA proceedings and will issue a further press
release on or before May 23, 2012 to provide an update regarding
the status of the Plan and the CCAA proceedings generally.
While under the CCAA, the Company will not be filing audited
financials on SEDAR or EDGAR.
About Cougar Oil
Headquartered in Calgary, Canada, Cougar Oil and Gas Canada, Inc.,
formerly Ore-More Resources, Inc., was incorporated under the laws
of the Province of Alberta, Canada on June 20, 2007. The
Company's principal activity is in the exploration, development,
production and sale of oil and natural gas. The Company's main
operations are currently in the Alberta and British Columbia
provinces of Canada.
The Company reported a net loss of C$5.1 million on C$1.9 million
of oil & gas sales for the nine months ended Sept. 30, 2011,
compared with a net loss of C$1.2 million on C$2.5 million of
oil & gas sales for the same period in 2010.
The Company's balance sheet at Sept. 30, 2011, showed
C$14.2 million in total assets, C$14.3 million in total
liabilities, and a stockholders' deficit of C$120,184.
In February 2012, Cougar Oil requested and obtained an Order
from the Alberta Court of Queen's Bench providing creditor
protection under the Companies' Creditors Arrangement Act
(Canada). The CCAA filing was made after a purchaser defaulted on
a November 2011 agreement to acquire some of the Company's non-
core assets. Proceeds would have been used for deposit
requirements by the Energy Resources Conversation Board. The ERCB
ordered closing of wells and facilities of Cougar Oil due to te
failure to pay the deposit.
CROWN CASTLE: Fitch Withdraws Proposed 'BB' Rating on $1BB Notes
----------------------------------------------------------------
Fitch Ratings has withdrawn its proposed 'BB-' rating of Crown
Castle International Corp.'s (CCIC) $1 billion unsecured senior
notes offering due 2022.
Crown Castle announced that in light of current capital market
conditions, the company has decided not to proceed with the
previously announced senior notes public offering.
CROWN CASTLE: Moody's Withdraws 'Ba1' Ratings on US$1-Bil. Notes
----------------------------------------------------------------
Moody's Investors Service has withdrawn the B1 (LGD6-93%) ratings
assigned to the proposed new $1 billion senior unsecured notes due
2022 of Crown Castle International Corp., following the company's
announcement that it withdrew its note offering due to market
conditions. The proposed notes were offered as part of a cash
tender for its outstanding 9% senior notes due 2015. CCIC also
canceled the tender offer. All other ratings remain unaffected, as
the new offering was effectively replacing existing debt on a
dollar for dollar basis.
Issuer: Crown Castle International Corp.
Withdrawals:
US$1,000M Senior Unsecured Regular Bond/Debenture, Withdrawn,
previously rated B1 LGD6, 93%
Ratings Rationale
The principal methodology used in rating Crown Castle was the
Global Communications Infrastructure Industry Methodology
published in June 2011. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
CROWN CASTLE: S&P Withdraws 'B-' Rating on $1-Bil. Senior Notes
---------------------------------------------------------------
Standard & Poor's Ratings Services is withdrawing its 'B-' issue-
level rating and '6' recovery rating on Crown Castle International
Corp.'s (B+/Stable/--) $1 billion senior notes due 2022, following
the company's announced withdrawal of the proposed offering and
termination of the tender offer for its outstanding 9% senior
notes due 2015. "Given the size of the issuance and tender, we
viewed the transaction as leverage neutral," S&P said.
"Our 'B+' corporate credit rating on Crown Castle remains
unchanged. Our ratings on Crown reflect its 'strong' business risk
position and 'highly leveraged' financial risk profile. Given debt
incurred for the WCP acquisition in January 2012 and the pending
acquisition of NextG, we expect that Crown Castle's leverage will
be approximately 7x for 2012, consistent with the current rating
and outlook," S&P said.
RATINGS LIST
Crown Castle International Corp.
Corporate Credit Rating B+/Stable/--
Ratings Withdrawn
To From
Crown Castle International Corp.
Senior Unsecured NR B-
Recovery Rating NR 6
DELOS AIRCRAFT: Moody's Rates $550MM Secured Credit Facility Ba3
----------------------------------------------------------------
On April 2, 2012, Moody's Investors Service assigned a Ba3 rating
to Delos Aircraft Inc.'s $550 million secured credit facility
maturing April 2016. Delos is an indirect subsidiary of aircraft
leasing company International Lease Finance Corporation (ILFC).
ILFC's other ratings, including its B1 corporate family and senior
unsecured ratings, are not affected by the transaction. The
outlook for the new Delos transaction and for ILFC's ratings is
positive.
Ratings Rationale
Proceeds of the new credit facility will be used to repay an
existing Delos $550 million loan maturing March 2016, for
transaction expenses and for general corporate purposes. Terms and
provisions of the new facility are the same as the loan it
replaces in all material respects except for pricing, which is
lower.
The new facility will be guaranteed on a senior unsecured basis by
ILFC and on a senior secured basis by Delos' immediate parent
(also an ILFC subsidiary) and by two subsidiary holding companies
in the U.S. and Ireland. The subsidiary holding companies will own
a number of special purpose entities (Owner SPEs) that will each
own aircraft and associated equipment and leases that meet certain
eligibility requirements under the credit facility documents. Key
terms of the facility pertaining to the pool of aircraft include a
maximum loan-to-value covenant, concentration limits (aircraft
type, country and lessee), and an aircraft age restriction.
Security for the new facility will be comprised of: 1) a perfected
first priority lien in the stock or equity interest of Delos and
its subsidiaries, including the Owner SPEs and 2) a collateral
account established for holding facility proceeds until certain
conditions relating to the aircraft in the transaction are
satisfied.
The Ba3 rating assigned to the new facility is one notch above
ILFC's B1 corporate family rating, based upon loan terms that
meaningfully lower secured creditors' risk of loss compared to
holders of ILFC's unsecured obligations.
ILFC's B1 rating reflects its strong global franchise positioning,
its relatively balanced geographic, aircraft, and customer risk
exposures as well as its resilient operating cash flow. ILFC has
made strides restructuring its liabilities, building liquidity and
reducing leverage since the beginning of 2010, which also supports
its rating and positive rating outlook. ILFC faces challenges
relating to sustaining lease margin improvements and generating
attractive returns on equity. Other credit challenges include the
monoline and cyclical nature of ILFC's business, its exposure to
aircraft residual value risks, and its reliance on confidence-
sensitive wholesale funding. ILFC's rating is based on its
intrinsic characteristics and does not incorporate an assumption
of support from parent American International Group, Inc. (AIG).
The principal methodology used in these ratings was Finance
Company Global Rating Methodology published in March 2012.
International Lease Finance Corporation, headquartered in Los
Angeles, California, is a major owner-lessor of commercial
aircraft.
DELTA PETROLEUM: Conway MacKenzie Provides Add'l Personnel
----------------------------------------------------------
Delta Petroleum Corporation asks the Bankruptcy Court to authorize
the modification of the employment of Conway MacKenzie Management
Services, LLC, to provide restructuring management and advisory
services nunc pro tunc to the Petition Date, and the employment of
additional professional personnel.
The Debtors note that if they are not permitted to modify the
retention of CMS, the Debtors' bankruptcy efforts, including the
formulation of a strategy to move their cases forward in
accordance with the requirements and provisions of the Bankruptcy
Code, may be delayed as CMS will not have sufficient resources
available to efficiently and effectively operate the Debtors'
cases.
The Debtors request an order approving the modification, nunc pro
tunc to the Petition Date, to include these parties:
Hourly
Title Rate
----- ------
John T. Young, Jr. Chief Restructuring Officer $550
Ken Malek Senior Managing Director $545
Robert F. Remian Managing Director $525
Jeff N. Huddleston Director $475
R. Seth Bullock Director $475
Jamie L. Chronister Director $475
Seth Barron Director $410
Maggie Conner Director $390
Carl Seidman Senior Associate $375
Kayla J. Hughes Administrative $185
Glorria J. Smith Administrative $120
As reported in the Troubled Company Reporter on Dec. 27, 2011,
Delta Petroleum sought authority to employ:
-- Conway MacKenzie Management Services, LLC, to provide
restructuring management and advisory services; and
-- John T. Young, Jr., Conway MacKenzie's senior managing
director, as the Debtors' Chief Restructuring Officer.
About Delta Petroleum
Delta Petroleum Corporation (NASDAQ: DPTR) is an independent oil
and gas company engaged primarily in the exploration for, and the
acquisition, development, production, and sale of, natural gas and
crude oil. Natural gas comprises over 90% of Delta's production
services. The core area of its operations is the Rocky Mountain
Region of the United States, where the majority of the proved
reserves, production and long-term growth prospects are located.
Delta and seven of its subsidiaries sought Chapter 11 bankruptcy
protection (Bankr. D. Del. Case Nos. 11-14006 to 11-14013,
inclusive) on Dec. 16, 2011, roughly six weeks before the Jan. 31,
2012 scheduled maturity of its $38.5 million secured credit
facility with Macquarie Bank Limited and after several months of
unsuccessful attempts to sell the business. Delta disclosed
$375,498,248 in assets and $310,679,157 in liabilities, which also
include $152,187,500 in outstanding obligations on account of the
7% senior unsecured notes issued in March 2005 with US Bank
National Association indenture trustee; and $115,527,083 in
outstanding obligations on account of 3-3/4% Senior Convertible
Notes due 2037 issued in April 2007. In its amended schedules,
the Delta Petroleum disclosed $373,836,358 in assets and
$312,864,788 in liabilities.
W. Peter Beardsley, Esq., Christopher Gartman, Esq., Kathryn A.
Coleman, Esq., and Ashley J. Laurie, Esq., at Hughes Hubbard &
Reed LLP, in New York, N.Y., represent the Debtors as counsel.
Derek C. Abbott, Esq., Ann C. Cordo, Esq., and Chad A. Fights,
Esq., at Morris, Nichols, Arsht & Tunnel LLP, in Wilmington, Del.,
represent the Debtors as co-counsel. Conway Mackenzie is the
Debtors's restructuring advisor. Evercore Group L.L.C. is the
financial advisor and investment banker. The Debtors selected
Epiq Bankruptcy Solutions, LLC as claims and noticing agent. The
petition was signed by Carl E. Lakey, chief executive officer and
president.
Delta will hold an auction for the business on March 26, 2012. No
buyer is under contract. There is $57.5 million in financing for
the Chapter 11 effort.
The U.S. Trustee told the bankruptcy judge that there was
insufficient interest from creditors to form an official committee
of unsecured creditors.
DELTA PETROLEUM: Tracinda Terminates Credit Agreement with BOA
--------------------------------------------------------------
Tracinda Corporation and Kirk Kerkorian filed with the U.S.
Securities and Exchange Commission amendment no. 23 to their
Schedule 13D. Item 6 of the Schedule 13D was amended to disclose
that Tracinda has terminated its credit facility with Bank of
America, N.A., and, accordingly, all pledged collateral has been
released.
Tracinda entered into the credit agreement, dated April 15, 2008,
and amended, for a $600 million revolving credit facility with
Bank of America, as agent, and Bank of America Securities LLC, as
the sole lead arranger and sole and exclusive book manager.
On April 15, 2008, in connection with the Credit Agreement,
Tracinda entered into a pledge agreement with BOA for the pledge
of collateral to secure borrowings under the Credit Agreement.
On June 10, 2008, Tracinda pledged 36,128,000 shares of common
stock of Delta Petroleum as collateral under the Pledge Agreement.
Pursuant to the Pledge Agreement, all dividends paid on the
collateral pledged under the Pledge Agreement in the form of
capital stock will be pledged as additional collateral and, in the
event of a default under the Credit Agreement, all voting rights
and rights to receive dividends with respect to the Pledged
Collateral will become vested in BOA. In connection with the
Pledge Agreement, BOA was appointed as the proxyholder for all
Pledged Collateral, with the right to exercise all voting rights
with respect to that Pledged Collateral only upon an event of
default under the Credit Agreement. Upon an event of default
under the Credit Agreement, BOA has the right, among others, to
transfer all Pledged Collateral into its name or to sell or
dispose of such Pledged Collateral.
Tracinda has entered into an amended and restated credit
agreement, dated April 15, 2011, for a $25 million revolving
credit facility with Bank of America, N.A. Merrill Lynch, Pierce,
Fenner and Smith Incorporated is designated as the sole lead
arranger and sole and exclusive book manager for the Loan
Agreement. The Loan Agreement amends and restates the letter loan
agreement dated April 15, 2008, as amended, retaining the
principal terms of that agreement and extending the maturity date
to April 15, 2014. Tracinda also entered into an amended and
restated pledge agreement with Bank of America, N.A., under which
Tracinda's shares of the Common Stock, as well as its shares of
the common stock of MGM Resorts International, continue to be
pledged as collateral for borrowings under the Loan Agreement.
As of April 3, 2012, Tracinda beneficially owns 9,379,770 shares
of common stock of Delta Petroleum representing 32.5% of the
shares outstanding, based on 28,870,167 shares of common stock
issued and outstanding as of Nov. 1, 2011.
A copy of the amended filing is available for free at:
http://is.gd/x29V90
About Delta Petroleum
Delta Petroleum Corporation (NASDAQ: DPTR) is an independent oil
and gas company engaged primarily in the exploration for, and the
acquisition, development, production, and sale of, natural gas and
crude oil. Natural gas comprises over 90% of Delta's production
services. The core area of its operations is the Rocky Mountain
Region of the United States, where the majority of the proved
reserves, production and long-term growth prospects are located.
Delta and seven of its subsidiaries sought Chapter 11 bankruptcy
protection (Bankr. D. Del. Case Nos. 11-14006 to 11-14013,
inclusive) on Dec. 16, 2011, roughly six weeks before the Jan. 31,
2012 scheduled maturity of its $38.5 million secured credit
facility with Macquarie Bank Limited and after several months of
unsuccessful attempts to sell the business. Delta disclosed
$375,498,248 in assets and $310,679,157 in liabilities, which also
include $152,187,500 in outstanding obligations on account of the
7% senior unsecured notes issued in March 2005 with US Bank
National Association indenture trustee; and $115,527,083 in
outstanding obligations on account of 3-3/4% Senior Convertible
Notes due 2037 issued in April 2007. In its amended schedules,
the Delta Petroleum disclosed $373,836,358 in assets and
$312,864,788 in liabilities.
W. Peter Beardsley, Esq., Christopher Gartman, Esq., Kathryn A.
Coleman, Esq., and Ashley J. Laurie, Esq., at Hughes Hubbard &
Reed LLP, in New York, N.Y., represent the Debtors as counsel.
Derek C. Abbott, Esq., Ann C. Cordo, Esq., and Chad A. Fights,
Esq., at Morris, Nichols, Arsht & Tunnel LLP, in Wilmington, Del.,
represent the Debtors as co-counsel. Conway Mackenzie is the
Debtors' restructuring advisor. Evercore Group L.L.C. is the
financial advisor and investment banker. The Debtors selected
Epiq Bankruptcy Solutions, LLC as claims and noticing agent. The
petition was signed by Carl E. Lakey, chief executive officer and
president.
Delta will hold an auction for the business on March 26, 2012. No
buyer is under contract. There is $57.5 million in financing for
the Chapter 11 effort.
The U.S. Trustee told the bankruptcy judge that there was
insufficient interest from creditors to form an official committee
of unsecured creditors.
DIALOGIC INC: Form 10-K Filing Delayed Amid Restructuring
---------------------------------------------------------
Dialogic Inc. discloses that its annual report on Form 10-K for
the fiscal year ended Dec. 31, 2011, could not be filed within the
prescribed time period.
The Company says that on March 22, 2012, Dialogic Corporation, a
wholly owned subsidiary of Dialogic Inc., entered into a Third
Amended and Restated Credit Agreement with term lenders Obsidian,
LLC, Special Value Expansion Fund, LLC, Special Value
Opportunities Fund, LLC, and Tennenbaum Opportunities Partners V,
LP, as lenders, and a Seventeenth Amendment to its Credit
Agreement with Wells Fargo Foothill Canada ULC, as administrative
agent, and certain lenders, to restructure its outstanding debt.
In connection with the Restructuring, the Company agreed to issue
to the Term Lenders warrants to purchase an aggregate of 18
million shares of the Company's common stock.
In light of the timing of the execution of the Term Loan
Agreement, Seventeenth Amendment and related agreements, the
Company has not had sufficient time or resources to analyze and
provide adequate financial statement disclosures in its Annual
Report on Form 10-K for the year ended Dec. 31, 2011, by the
required deadline without unreasonable effort and expense. In
addition, due to the timing of the Restructuring and other
potential financing transactions being considered, the Company has
not yet completed its evaluation of the going concern assumption.
Given these circumstances, KPMG LLP, the Company's independent
registered public accounting firm, has not completed its
evaluation as to whether substantial doubt exists relative to the
Company's ability to continue as a going concern, as required by
the relevant professional auditing standards.
A copy of the Form 12b-25 is available for free at:
http://is.gd/wGgxdQ
Milpitas, Calif.-based Dialogic Inc. provides communications
platforms and technology that enable developers and service
providers to build and deploy innovative applications without
concern for the complexities of the communication medium or
network.
For the nine months ended Sept. 30, 2011, the Company incurred a
net loss of $45.6 million and used cash in operating activities
of $11.1 million. For the nine months ended Sept. 30, 2010, the
Company incurred a net loss of $25.4 million. Operating
activities provided cash of $2.7 million in the nine months
ended Sept. 30, 2010.
The Company's balance sheet at Sept. 30, 2011, showed $164.57
million in total assets, $171.68 million in total liabilities, and
stockholders' deficit of $7.11 million.
DIAMOND BEACH VP: Sec. 341 Creditors' Meeting Set for May 15
------------------------------------------------------------
The U.S. Trustee will convene a Meeting of Creditors pursuant to
11 U.S.C. Sec. 341(a) in the Chapter 11 case of Diamond Beach VP,
LP, on May 15, 2012, at 12:00 p.m. at Harlingen, 222 E Van Buren.
Proofs of claim are due in the case by Aug. 13, 2012.
Houston, Texas-based Diamond Beach VP, LP, filed a Chapter 11
petition (Bankr. S.D. Tex. Case No. 12-10175) in Brownsville on
April 2, 2012. The Debtor, a Single Asset Real Estate as defined
in 11 U.S.C. Sec. 101 (51B), disclosed $30.05 million in assets
and $28.24 million in liabilities in its schedules.
The Debtor owns the Diamond Beach Condominiums located at
Galveston, Texas. The property is worth $29.4 million and secures
a $27.3 million debt to the International Bank of Commerce.
Judge Richard S. Schmidt oversees the case. Edward L. Rothberg,
Esq., at Hoover Slovacek, LLP, serves as the Debtor's counsel.
The petition was signed by Randall J. Davis, as manager of the
Debtor's general partner.
DRI CORP: Levine Leichtman to Buy Business for $22.1 Million
------------------------------------------------------------
DRI Corporation has entered into a definitive agreement with an
affiliate of Levine Leichtman Capital Partners in which LLCP will
act as the stalking horse bidder in a sale of substantially all of
DRI's businesses and assets under Section 363 of the Bankruptcy
Code.
DRI's acquisition agreement with LLCP provides that in the event
additional qualified prospective bidders desire to bid for DRI's
business, DRI will cooperate with the Bankruptcy Court to conduct
an auction in accordance with procedures established by the
Bankruptcy Court.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that DRI signed up an affiliate of Levine Leichtman
Capital Partners Inc. to buy the business for $22.1 million, with
an adjustment for working capital.
According to the Bloomberg report, the Debtor proposes a June 5
deadline for competing bids, an auction on June 8 and a sale
hearing on June 14. A hearing to consider approval of the auction
and sale procedures is scheduled for April 25.
DRI, Bloomberg relates, said it believes the price will be
sufficient to pay secured creditors in full and cover expenses of
the bankruptcy, with money left over for unsecured creditors.
DRI cautioned that secured lender BHC Interim Funding III LP isn't
consenting to the sale unless its debt is paid in full at closing.
BHC has the right to bid its debt rather than cash at auction. DRI
says it won't go along with a sale that leaves expenses of the
bankruptcy unpaid.
BHC, which has liens on all assets, is owed $9.6 million on pre-
bankruptcy debt. BHC is providing $5 million in financing for the
bankruptcy.
About DRI Corp.
DRI Corp. (OTCQB:TBUS), a provider of digital signs for
transportation systems, filed a Chapter 11 petition in Wilson,
North Carolina (Bankr. E.D.N.C. Case No. 12-02298) on March 25,
2012. Three affiliates also sought bankruptcy protection.
Dallas-based DRI disclosed assets of $42.8 million and liabilities
totaling $31.4 million. Debt includes $9.6 million owing to
Interim Funding III LP, a secured lender with liens on all assets.
Northen Blue, LLP, serves as counsel to the Debtors. The Finley
Group, Inc., is the financial consultant. Morgan Keegan &
Company, Inc., is the investment banker.
DRI CORP: Taps Northen Blue as Bankruptcy Counsel
-------------------------------------------------
DRI Corporation, Digital Recorders, Inc., TwinVision of North
America, Inc., and Robinson Turney International, Inc., seek
Bankruptcy Court authority to employ Northen Blue, LLP, as their
Chapter 11 counsel.
The firm's professionals expected to work on the Debtors' cases
are:
John A. Northen, Esq.
Vicki L. Parrott, Esq.
John Paul H. Cournoyer, Esq.
NORTHEN BLUE, LLP
Post Office Box 2208
Chapel Hill, NC 27515-2208
Telephone: 919-968-4441
E-mail: jan@nbfirm.com
vlp@nbfirm.com
jpc@nbfirm.com
John A. Northen, Esq., attests that neither the firm nor any
member of the firm hold an interest adverse to the Debtors'
estates, and are disinterested persons as defined in 11 U.S.C.
Section 101(14).
Mr. Northen discloses that the firm received an initial retainer
from the Debtors in the aggregate amount of $150,000, of which
$92,046 has been expended in payment of prepetition services and
expenses. The unexpended balance of the retainer in the amount of
$57,953 is held by the firm as security for such post-petition
fees and expenses as may be allowed by the Court.
About DRI Corp.
DRI Corp. (OTCQB:TBUS) -- http://www.digrec.com/-- a provider of
digital signs for transportation systems, filed a Chapter 11
petition in Wilson, North Carolina (Bankr. E.D.N.C. Case No.
12-02298) on March 25, 2012. DRI intends to sell its assets and
operations under Section 363 of Chapter 11 of the U.S. Bankruptcy
Code.
Dallas, Texas-based DRI disclosed assets of $42.8 million and
liabilities totaling $31.4 million. Debt includes $9.6 million
owing to Interim Funding III LP, a secured lender with liens on
all assets.
Affiliates Digital Recorders, Inc., TwinVision of North America,
Inc., and Robinson Turney International, Inc., also sought
bankruptcy protection (Case Nos. 12-02299, 12-02300 and 12-02302).
The cases are jointly administered.
Judge Randy D. Doub presides over the case. The petition was
signed by David L. Turney, chairman and CEO.
DRI CORP: Hires Finley Group's Rudisill as CRO
----------------------------------------------
DRI Corporation, Digital Recorders, Inc., TwinVision of North
America, Inc., and Robinson Turney International, Inc., ask the
Bankruptcy Court to approve their engagement of Elaine T. Rudisill
and The Finley Group, Inc., as chief restructuring officer and
financial consultants. Ms. Rudisill is a Managing Director of The
Finley Group.
Prior to the Petition Date, the Debtors retained Ms. Rudisill and
The Finley Group to provide such services in accordance with an
engagement agreement between the parties.
Ms. Rudisill attests that The Finley Group represents no other
entity in connection with the Debtors' cases, represents or holds
no interest adverse to the interest of the estates with respect to
the matters on which the firm is to be employed, and is
disinterested as that term is defined in 11 U.S.C. Sec. 101(14).
In addition to the CRO, The Finley Group will continue to provide
the services of Jay Kilkenny to DRI as needed. His billing rate
will continue to be $350 per hour.
The Finley Group received an initial retainer from the Debtors in
the amount of $140,000, of which $115,893 has been expended in
payment of prepetition services and expenses.
About DRI Corp.
DRI Corp. (OTCQB:TBUS) -- http://www.digrec.com/-- a provider of
digital signs for transportation systems, filed a Chapter 11
petition in Wilson, North Carolina (Bankr. E.D.N.C. Case No.
12-02298) on March 25, 2012. DRI intends to sell its assets and
operations under Section 363 of Chapter 11 of the U.S. Bankruptcy
Code.
Dallas, Texas-based DRI disclosed assets of $42.8 million and
liabilities totaling $31.4 million. Debt includes $9.6 million
owing to Interim Funding III LP, a secured lender with liens on
all assets.
Affiliates Digital Recorders, Inc., TwinVision of North America,
Inc., and Robinson Turney International, Inc., also sought
bankruptcy protection (Case Nos. 12-02299, 12-02300 and 12-02302).
The cases are jointly administered.
Judge Randy D. Doub presides over the case. The petition was
signed by David L. Turney, chairman and CEO.
DRI CORP: Morgan Keegan to Assist in Marketing, Sale of Business
----------------------------------------------------------------
Morgan Keegan & Company, Inc., is being retained as investment
banker for DRI Corporation, Digital Recorders, Inc., TwinVision of
North America, Inc., and Robinson Turney International, Inc., to,
among other things:
a. give the Debtors financial advice with respect to the
value of the businesses, and with respect to the ability
and means by which some or all of the assets could be
refinanced or liquidated; and
b. assist the Debtors in the marketing and sale of the
businesses and assets as a going concern.
Michael G. Lederman, a managing director of Morgan Keegan, said it
represents no other entity in connection with the Debtors' cases,
represents or holds no interest adverse to the interest of the
estates or with respect to the matters on which it is to be
employed, and is disinterested as that term is defined in 11
U.S.C. Sec. 101(14).
As set forth in the Engagement Agreement, the firm is to receive
this compensation:
a. A Monthly Fee of $50,000 per month;
b. Contingent Financing Fees;
c. Transaction Fees;
d. A Chapter 11 Success Fee;
e. An Opinion Fee; and
f. Reimbursement of out-of-pocket expenses.
Prior to the Petition Date, the firm received monthly retainer
fees in the aggregate amount of $153,871 and reimbursement for
actual expenses in the aggregate amount of approximately $78,729,
and the firm has waived any other amounts due or owed by the
Debtors for services or costs accrued prepetition.
About DRI Corp.
DRI Corp. (OTCQB:TBUS) -- http://www.digrec.com/-- a provider of
digital signs for transportation systems, filed a Chapter 11
petition in Wilson, North Carolina (Bankr. E.D.N.C. Case No.
12-02298) on March 25, 2012. DRI intends to sell its assets and
operations under Section 363 of Chapter 11 of the U.S. Bankruptcy
Code.
Dallas, Texas-based DRI disclosed assets of $42.8 million and
liabilities totaling $31.4 million. Debt includes $9.6 million
owing to Interim Funding III LP, a secured lender with liens on
all assets.
Affiliates Digital Recorders, Inc., TwinVision of North America,
Inc., and Robinson Turney International, Inc., also sought
bankruptcy protection (Case Nos. 12-02299, 12-02300 and 12-02302).
The cases are jointly administered.
Judge Randy D. Doub presides over the case. The petition was
signed by David L. Turney, chairman and CEO.
DRI CORP: Hiring Wyrick Robbins as Special Corporate Counsel
------------------------------------------------------------
DRI Corporation, Digital Recorders, Inc., TwinVision of North
America, Inc., and Robinson Turney International, Inc., seek
Bankruptcy Court permission to employ Wyrick Robbins Yates &
Ponton, LLP, to represent the Debtors as special counsel with
respect to corporate law matters and to assist the Debtors' lead
counsel with respect to transactional aspects of any sale of all
or substantially all assets of the estate.
Larry E. Robbins, Esq., a partner at Wyrick Robbins, disclosed
that the firm served as transactional counsel to the Debtors prior
to the Petition Date, and have represented and assisted the
Debtors with respect to the negotiation and preparation of
documents in connection with proposed acquisitions and related
matters. Within six months prior to the Petition Date, the firm
has been paid in the aggregate the sum of $141,711.
Mr. Robbins attests that the firm does not hold or represent any
interest adverse to the matters on which it is to be employed.
Mr. Robbins' hourly rate is $390. Mr. Rob Futrell's current
hourly rate is $270 and Josh Otto's hourly rate is $195. No
retainer has been provided.
About DRI Corp.
DRI Corp. (OTCQB:TBUS) -- http://www.digrec.com/-- a provider of
digital signs for transportation systems, filed a Chapter 11
petition in Wilson, North Carolina (Bankr. E.D.N.C. Case No.
12-02298) on March 25, 2012. DRI intends to sell its assets and
operations under Section 363 of Chapter 11 of the U.S. Bankruptcy
Code.
Dallas, Texas-based DRI disclosed assets of $42.8 million and
liabilities totaling $31.4 million. Debt includes $9.6 million
owing to Interim Funding III LP, a secured lender with liens on
all assets.
Affiliates Digital Recorders, Inc., TwinVision of North America,
Inc., and Robinson Turney International, Inc., also sought
bankruptcy protection (Case Nos. 12-02299, 12-02300 and 12-02302).
The cases are jointly administered.
Judge Randy D. Doub presides over the case. The petition was
signed by David L. Turney, chairman and CEO.
DUBAI INTERNATIONAL: Reaches Deal on $2.5-Bil. Restructuring
-------------------------------------------------------------
Dubai Holding announced April 5 that Dubai International Capital
('DIC'), its private equity investment arm, has reached a final
agreement with its lenders regarding the restructuring of
approximately US$2.5 billion of liabilities.
Under the terms relating to approximately $2.15 billion of
liabilities, creditors will extend their debt for five years and
receive a two per cent cash interest coupon on the restructured
facilities. An agreement has also been reached in relation to a
facility of approximately $350 million of liabilities, where
creditors will extend their debt for three years at the unchanged
contractual rate of interest.
Ahmed Bin Byat, Chief Executive Officer, Dubai Holding, said:
"This agreement is an important landmark for Dubai Holding. The
successful restructuring is a result of the significant commitment
demonstrated by all stakeholders and Dubai Holding acknowledges
their role in achieving this agreement. The restructuring puts DIC
on a sound financial footing."
David Smoot, Chief Executive Officer, DIC, said, "This successful
refinancing will allow for the implementation of the management
team's long-term business plan to maximise the value of the
Company's portfolio of assets for the benefit of all stakeholders.
Although we are under no pressure to sell assets, we have been
able to make a number of profitable exits in recent months
demonstrating the quality of our investments and our ability to
find buyers in current market conditions. Despite the challenging
macroeconomic environment the portfolio is well-positioned to
navigate current markets with less leverage, better liquidity and
long-term financing, reflecting significant future value
potential."
Dubai Holding also announced that it intends to appoint a new
Board of Directors for DIC. Fadel Al Ali, Executive Chairman of
Dubai Holding Commercial Operations Group, has been named as the
Chairman. Other nominated board members include: David Smoot, CEO;
and three independent directors; Aidan Birkett, Christopher
Rowlands and Abdullah Sharafi.
Rick Pudner, CEO, Emirates NBD said, "This debt restructuring
represents another step in Dubai's continued march in the right
direction. The fact this restructuring was agreed with full lender
consent reflected the continued support provided by Dubai Holding
throughout the process and, also the unwavering commitment of the
lenders towards achieving a consensual solution in the interest of
all stakeholders.
"Strong fundamental economic growth story coupled with willingness
and ability to address debt refinancing requirements in a timely
and viable manner are strong differentiating factors for Dubai in
the current global economic scenario driving investor confidence
and positive sentiment around the Dubai story. This is clearly
reflected in the recent tightening of Dubai CDS and we believe
that it will give further traction to the growing positive
momentum."
Mr. Bin Byat concluded, "Dubai Holding will continue to focus on
reaching a consensual agreement with Dubai Group lenders and
remains confident that the Dubai Group restructuring will also
reach a successful agreement."
Dubai International Capital LLC -- http://wwwdubaiic.com/-- is a
Dubai-based international investment company that primarily
focuses on private equity.
DUKE REALTY: Fitch Affirms Rating on Preferred Stock at 'BB'
------------------------------------------------------------
Fitch Ratings has affirmed the following credit ratings for Duke
Realty Corp. (NYSE: DRE) and its operating partnership, Duke
Realty Limited Partnership, (collectively, DRE or the company):
Duke Realty Corp.
-- Issuer Default Rating (IDR) at 'BBB-';
-- Preferred stock at 'BB'.
Duke Realty Limited Partnership
-- IDR at 'BBB-';
-- Senior unsecured notes at 'BBB-';
-- Senior unsecured exchangeable notes at 'BBB-';
-- Unsecured revolving credit facility at 'BBB-'.
The Rating Outlook is Stable.
The affirmations reflect Fitch's view that the company's credit
profile will remain consistent with a 'BBB-' rating in the near-
to-medium term. Leverage is appropriate for the rating category.
The rating also takes into account the company's large pool of
diversified industrial, office, and medical office building (MOB)
properties, solid unencumbered asset coverage of unsecured debt,
and adequate liquidity position. The ratings are balanced by a
fixed-charge coverage ratio that is low for the rating category
and continued challenging suburban office fundamentals, even as
DRE continues to shift its portfolio away from suburban office to
a higher percentage of industrial properties and MOBs.
The company has a diversified portfolio of 748 bulk distribution,
suburban office, MOB, and retail properties located across 18
markets, which Fitch views favorably from a property segment and
geographical diversification standpoint.
The company's portfolio also benefits from a highly diversified
tenant base and well-staggered lease expiration schedule, limiting
tenant credit risk and lease rollover risk. DRE's largest 20
tenants represented just 17.4% of annual base rents at Dec. 31,
2011. Lease expirations are less than 12% of the total annual
base rent in any given year, with just 7.4% expiring in 2012,
indicating long-term recurring cash flow across the portfolio.
DRE continues to execute on its strategic plan, which entails
increasing the exposure to industrial and MOB assets while
reducing the exposure to suburban office. Fitch has a negative
outlook on suburban office fundamentals, and a stable outlook on
industrial and healthcare fundamentals, and as such, views the
company's repositioning strategy favorably. However, there is
potential for near-term EBITDA dilution from asset purchases and
sales as the company shifts the composition of the portfolio.
The company's leverage, defined as net debt to recurring operating
EBITDA, was approximately 7.0 times (x) at Dec. 31, 2011 (after
adjusting for the timing of the asset sale to Blackstone in
December 2011), compared with 7.2x at Dec. 31, 2010 and 6.7x at
Dec. 31, 2009. Fitch expects leverage to trend toward the mid
6.0x range, which is solid for the 'BBB-' rating. In a stress
case not anticipated by Fitch in which same store net operating
income (NOI) declines 7.5% in 2012 and 9.0% in 2013, leverage
would be 9.6x in 2013, which would be more consistent with a lower
rating.
The company has moderately increased its wholly owned development
pipeline recently. However, development represented just 2.6% of
undepreciated book assets as of Dec. 31, 2011, compared with 1.3%
and 1.4% as of Dec. 31, 2010 and Dec. 31, 2009, respectively.
Remaining cost to be spent was just 2.1% of total undepreciated
assets as of Dec. 31, 2011. The company's new development starts
will focus on build-to-suit projects and MOBs, thus minimizing
lease-up risk, which Fitch views positively.
DRE has adequate liquidity and financial flexibility. As of Dec.
31, 2011, the company had 432 unencumbered properties with a gross
book value of $4.8 billion. Unencumbered asset coverage of
unsecured debt based on applying an 8.5% cap rate to unencumbered
NOI was adequate for the 'BBB-' IDR at 1.9x as of Dec. 31, 2011.
The average cap rate for asset purchases and sales over the past
two years has been approximately 8.0%.
Sources of liquidity (unrestricted cash, availability under the
unsecured revolving credit facility, and projected retained cash
flow from operating activities after dividends) divided by uses of
liquidity (pro rata debt maturities, expected recurring capital
expenditures, and remaining nondiscretionary development costs)
was 1.0x for the Jan. 1, 2012 - Dec. 31, 2013 period, or 1.3x,
assuming DRE is able to refinance mortgage debt at 80% of the
maturing amount during this period.
DRE's fixed-charge coverage ratio is low for the rating. Coverage
(defined as recurring operating EBITDA, less recurring capital
expenditures and straight-line rent adjustments, divided by total
interest incurred and preferred dividends) was 1.4x in 2011,
unchanged from 2010. Coverage has remained in the 1.4x to 1.6x
range since 2008, and Fitch anticipates that fixed-charge coverage
will improve moderately through 2014 to 1.8x, driven by moderate
NOI growth and reduced preferred dividends due to recent preferred
redemptions. In addition, the company has $178 million of 8.375%
series O preferreds that become redeemable in 2013, which DRE may
redeem to further improve coverage.
In a stress case not anticipated by Fitch, in which same store NOI
declines 7.5% in 2012 and 9.0% in 2013, coverage would be 1.0x in
2013, which would be more consistent with a lower rating.
Suburban office fundamentals remain weak, as evidenced by an
occupancy decline to 85.4% at Dec. 31, 2011 from 86.4% at Dec. 31,
2010 for DRE's stabilized office portfolio. In addition, net
effective rental rates on new leases continue to decline and were
$12.05 per square foot (psf) in 2011, down from $12.56 psf in 2010
and $13.03 in 2009. Fitch anticipates that DRE's suburban office
portfolio will continue to face headwinds in the near term, driven
by continued weak rental rate growth and high leasing costs.
The Stable Rating Outlook is based on Fitch's expectation that
leverage will stabilize in the 7.0x range in the near term and
then trend lower to the mid 6.0x range in 2014, that coverage will
improve moderately to 1.7x in 2013 and 1.8x in 2014, and that the
company will maintain adequate liquidity.
The two-notch differential between DRE's IDR and preferred stock
rating is consistent with Fitch's criteria for corporate entities
with a 'BBB-' IDR. Based on 'Treatment and Notching of Hybrids in
Nonfinancial Corporate and REIT Credit Analysis,' dated Dec. 15,
2011 and available on Fitch's Web site at www.fitchratings.com,
these preferred securities are deeply subordinated and have loss
absorption elements that would likely result in poor recoveries in
the event of a corporate default.
The following factors may have a positive impact on the ratings
and Rating Outlook:
-- Net debt to recurring operating EBITDA sustaining below 6.0x
(as of Dec. 31, 2011, leverage was approximately 7.0x after
adjusting for the timing of the Blackstone transaction);
-- Fixed-charge coverage sustaining above 2.0x (latest 12-month
coverage was 1.4x as of Dec. 31, 2011).
The following factors may have a negative impact on the ratings
and/or Rating Outlook:
-- Fixed-charge coverage sustaining below 1.3x;
-- Net debt to recurring operating EBITDA sustaining above 8.0x;
-- AFFO (adjusted funds from operations) payout ratio sustaining
above 100%.
DYNEGY INC: Has Agreement in Principle With Creditors
-----------------------------------------------------
Dynegy Inc. said April 4 it has reached an agreement in principle
with creditors holding over $2.5 billion of claims against
Dynegy's subsidiary, Dynegy Holdings, LLC (DH).
The agreement in principle contemplates the resolution of all
disputes, claims and causes of action between DH and Dynegy.
The terms of the agreement in principle will be implemented
through a settlement agreement to be filed in DH's Chapter 11
case, and in amendments to DH's Chapter 11 plan, which would be
subject to a formal creditor vote and confirmation by the
bankruptcy court.
Under the agreement in principle, (A) DH's unsecured creditors
would receive common equity in the reorganized company in lieu of
the new senior secured notes and preferred stock contemplated by
the current plan; (B) the cash to be distributed to creditors
under the revised plan would be reduced to $200 million; and (C)
all disputes relating to the Roseton and Danskammer leases would
be resolved by awarding US Bank, as trustee for the trust
certificates issued in connection with the leases (the Lease
Notes), a fixed allowed unsecured claim. Parties to the proposed
agreement include an ad hoc group of holders of DH's senior notes,
PSEG, US Bank and certain holders of the Lease Notes. The
agreement in principle does not include any holders of DH's $200
million of subordinated capital income securities due 2027 (the
Subordinated Notes).
"This agreement in principle recognizes the continuing decline in
natural gas prices and the associated impact this has on our
business while also addressing all of the complex issues raised by
the Examiner's report regarding potential claims between the DH
estate and Dynegy, which may otherwise have taken years to
resolve. We are pleased that the parties have taken a pragmatic
approach and have the Company back on track to put the DH Chapter
11 case behind it during the third quarter of 2012," said Robert
C. Flexon, President and Chief Executive Officer of both Dynegy
and DH.
The agreement in principle, which remains subject to documentation
that the parties intend to prepare and file during the month of
April and to bankruptcy court approval, includes the following key
elements:
-- All potential claims and causes of action between DH and
Dynegy, including those arising with respect to the September 1,
2011 CoalCo transaction, would be settled and released. The
recovery of DH's creditors would be fully supported by the value
of both CoalCo and GasCo.
-- DH's unsecured creditors would receive common equity
representing a 99% stake in the reorganized company at emergence.
DH claims participating in this recovery would include those
arising under DH's senior notes, which currently total
approximately $3.4 billion, PSEG's $110 million tax indemnity
claim and the Lease Notes' guaranty claim against DH, which would
be allowed in the amount of $540 million. All distributions to
holders of claims arising under DH's subordinated notes would be
subject to turnover pursuant to the contractual subordination
provisions in the subordinated note indenture.
-- Dynegy would receive a claim for the benefit of its
stockholders, which under the amended plan would be entitled to
receive 1.0% of the fully-diluted common stock of the reorganized
company, and 5-year warrants to purchase 13.5% of the common stock
of the reorganized company (on a fully-diluted basis) to be
exercisable at an equity value for the reorganized company of $4
billion. Dynegy's stockholders will not receive or retain any
other property or shares in Dynegy or DH under the contemplated
settlement.
-- The Lease Notes' claims will also be allowed against the
Roseton and Danskammer debtors and will be entitled to 50% of the
proceeds from the sale of their assets; provided that their full
recovery from all sources may not exceed $571 million. The other
DH unsecured creditors will be entitled to the remaining 50% of
proceeds.
-- The cash distributed to DH unsecured creditors would be
reduced to $200 million, with the remaining cash balances being
retained by the reorganized company for general corporate
purposes; and
-- All claims and causes of action against the directors,
officers, employees, attorneys and advisors of Dynegy and DH would
be released to the fullest extent permitted. Dynegy, DH, and the
settling creditors will also exchange mutual releases.
The parties are currently working on definitive documentation that
will implement the proposed terms in the most efficient and
expedient fashion possible. In that regard, the parties are
continuing to engage in discussions with other creditors,
including the holders of the subordinated notes, in the hopes of
obtaining as much consensus as possible with respect to the
amended DH plan.
About Dynegy Inc.
Through its subsidiaries, Houston, Texas-based Dynegy Inc.
(NYSE: DYN) -- http://www.dynegy.com/-- produces and sells
electric energy, capacity and ancillary services in key U.S.
markets. The power generation portfolio consists of approximately
12,200 megawatts of baseload, intermediate and peaking power
plants fueled by a mix of natural gas, coal and fuel oil.
In August, Dynegy implemented an internal restructuring that
created two units, one owning eight primarily natural gas-fired
power generation facilities and another owning six coal-fired
plants.
Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and
said it was discussing options for managing its debt load with
certain bondholders.
Dynegy Holdings LLC and four other affiliates of Dynegy Inc.
sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case
No. 11-38111) Nov. 7 to implement an agreement with a
group of investors holding more than $1.4 billion of senior notes
issued by Dynegy's direct wholly-owned subsidiary, Dynegy
Holdings, regarding a framework for the consensual restructuring
of more than $4.0 billion of obligations owed by DH. If this
restructuring support agreement is successfully implemented, it
will significantly reduce the amount of debt on the Company's
consolidated balance sheet.
Dynegy Holdings disclosed assets of $13.77 billion and debt of
$6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each
estimated $100 million to $500 million in assets and debt.
Dynegy Holdings and its affiliated debtor-entities are represented
in the Chapter 11 proceedings by Sidley Austin LLP as their
reorganization counsel. Dynegy and its other subsidiaries are
represented by White & Case LLP, who is also special counsel to
the Debtor Entities with respect to the Roseton and Danskammer
lease rejection issues.
Dynegy was advised by Lazard Freres & Co. LLC and the Debtor
Entities' financial advisor is FTI Consulting.
The Official Committee of Unsecured Creditors has tapped Akin Gump
Strauss Hauer & Feld LLP as counsel nunc pro tunc to November 16,
2011.
Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceeding undertaken
by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or
215/945-7000).
EIG INVESTORS: Moody's Affirms 'B1' CFR; Outlook Stable
-------------------------------------------------------
Moody's Investors Service affirmed EIG Investors Corp.'s existing
ratings, including its B1 Corporate Family Rating (CFR) and the B1
rating for the upsized senior secured revolving credit facilities,
and assigned a B1 rating to its $535 million of new senior secured
term loan facilities. The outlook for ratings is stable. EIG plans
to use the net proceeds from the new term loans to refinance
approximately $350 million of existing term loans, about $155
million to finance the purchase of the remaining preferred equity
interest in the Company held by its former majority shareholder,
Accel-KKR, and for general corporate purposes. Moody's expects the
Company to use its excess cash for acquisitions. Moody's will
withdraw the ratings for the existing $350 million term loan
facility upon full repayment of the term loans at the close of the
transaction.
The affirmation of EIG's CFR mainly reflects the anticipated debt-
funded purchase of the preferred equity interest in the Company by
Accel-KKR.
Moody's has taken the following rating actions:
Assignments:
Issuer: EIG Investors Corp.
$535 million senior secured term loan facilities due 2018 --
Assigned, B1, LGD3 (35%)
The following ratings were affirmed:
Issuer: EIG Investors Corp.
Corporate Family Rating -- B1
Probability of Default Rating -- B2
$55 million senior secured revolving credit facility due
2016 -- B1, LGD3 (35%)
$350 million senior secured term loan facility due 2017 --
B1, LGD3 (35%), to be withdrawn
Outlook: Stable
Ratings Rationale
Although the proposed transaction increases EIG's debt leverage
(total debt-to-cash flow from operation plus interest expense)
beyond the tolerance range for the B1 CFR, the affirmation of the
CFR reflects Moody's expectations that EIG's leverage should
decline from about 5.8x (pro forma for the increase in debt and
estimated 2011 cash flow) to less than 5.0x by the end of 2012
through organic growth in cash flow from operations and debt
repayments required under the credit agreement.
EIG's CFR is weakly positioned in the B1 category, which reflects
the Company's aggressive shareholder-oriented financial policies
and its tolerance for high financial risk, especially in the
context of its intensely competitive domain name and web hosting
services industry. The industry is characterized by the
commoditized nature of services, relatively few barriers to entry,
modest pricing power, and a fragmented and evolving market.
The B1 CFR is supported by EIG's good prospective free cash flow
of about 10% of its total debt in 2012 driven by the Company's
organic growth, economies of scale, and high cash EBITDA margins.
The rating benefits from EIG's leading position in the web hosting
market through its multiple brands, the growing market for web
services to small and medium size businesses, and the Company's
stable operating cash flow derived from a highly diversified
customer base with low subscriber churn rates.
Notwithstanding EIG's good prospective cash flow generation, the
rating considers the potential for increases in debt to finance
acquisitions given the Company's history of numerous acquisitions
and the fragmented nature of its industry. Moody's believes that a
combination of an acquisitive growth strategy and the potential
for debt-financed returns to shareholders could cause the
Company's leverage to remain in the 4.0x to 5.0x range over the
next 12 to 24 months.
The stable outlook is based on Moody's expectations that EIG will
produce cash flow from operations of approximately 10% of its
total debt over the next 12 to 18 months, its gross organic
subscriber addition rates will remain strong, and that it will
maintain stable EBITDA margins.
Given EIG's limited operating scale, high business risk and the
likelihood of high leverage persisting in the in the next 12 to 18
months, a ratings upgrade is unlikely over this period.
However, Moody's could downgrade EIG's ratings if EBITDA margins
deteriorate or cash flow from operations falls short of
expectations as a result of increasing competition, weak organic
subscriber growth, or challenges in business execution.
Additionally, a weaker credit profile resulting from aggressive
financial policies could trigger a downgrade. Specifically, EIG's
ratings could be downgraded if leverage (Total Debt/CFFO plus
interest expense, Moody's adjusted) remains above 5.5x or free
cash flow-to-total debt ratio declines below 10% of total debt.
The principal methodology used in rating EIG was the Global
Business & Consumer Service Industry Methodology published in
October 2010. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
Headquartered in Burlington, MA, EIG provides Internet services
primarily to small and medium-sized businesses. EIG is a successor
entity to The Endurance International Group which was acquired by
private equity firms Warburg Pincus and Goldman Sachs Capital
Partners in December 2011.
ENERGY CONVERSION: Auction for Solar Business This Month
--------------------------------------------------------
Energy Conversion Devices obtained approval to conduct an auction
this month for its solar business.
The Official Committee of Unsecured Creditors objected to the
expedited sale process, noting that the Debtor has not yet
identified a stalking horse bidder or a potential buyer for the
business.
The parties later reached agreement on a revised bidding procedure
that was later approved by the bankruptcy court.
The Court-approved rules provide that an auction will be held
April 24, 2012. Deadline for initial bids is on April 17. The
sale hearing is scheduled for May 2. Closing for the sale must
occur by May 24, 2012.
The terms agreed by the parties say that the Debtors will apprise
the Creditors Committee every week until closing with material
developments relating to the sale process.
The Committee is represented by:
Judy A. O'Neill, Esq.
John A. Simon, Esq.
FOLEY & LARDNER LLP
500 Woodward Ave., Ste. 2700
Detroit, Mich. 48226
Tel: (313) 234-7100
E-mail: joneill@foley.com
jsimon@foley.com
About Energy Conversion Devices
Energy Conversion Devices -- http://energyconversiondevices.com/
-- has a renowned 51 year history since its formation in Detroit,
Michigan and has been a pioneer in materials science and renewable
energy technology development. The company has been awarded over
500 U.S. patents and international counterparts for its
achievements. ECD's United Solar wholly owned subsidiary has been
a global leader in building-integrated and rooftop photovoltaics
for over 25 years. The company manufactures, sells and installs
thin-film solar laminates that convert sunlight to clean,
renewable energy using proprietary technology.
Energy Conversion Devices filed for Chapter 11 relief (Bankr. E.D.
Mich. Case No. 12-43166) on Feb. 14, 2012. Judge Thomas J. Tucker
presides over the case. Aaron M. Silver, Esq., Judy B. Calton,
Esq., and Robert B. Weiss, Esq., at Honigman Miller Schwartz &
Cohn LLP, in Detroit, Michigan, represent the Debtor as counsel.
The Debtor estimated assets and debts of between $100 million and
$500 million as of the petition date.
Judy A. O'Neill, Esq., and John A. Simon, Esq., at Foley & Lardner
LLP, represent the counsel to the Committee of Unsecured
Creditors.
The petition was signed by William Christopher Andrews, chief
financial officer and executive vice president.
Affiliate United Solar Ovonic LLC filed a separate Chapter 11
petition on the same day (Bankr. E.D. Mich. Case No. 12-43167).
Affiliate Solar Integrated Technologies, Inc., filed a petition
for relief under Chapter 7 of the Bankruptcy Code (Bankr. E.D.
Mich. Case No. 12-43169.
ENERGY CONVERSION: Can Use Cash Collateral Through April 24
-----------------------------------------------------------
Judge Thomas J. Tucker of the Bankruptcy Court for the Eastern
District of Michigan has approved Energy Conversion Devices' cash
management system, including approval of use of cash collateral
and intercompany transfers on an administrative expense basis.
Under the cash collateral order, debtor-affiliate United Solar
Ovonic LLC (USO) is authorized to use the cash collateral of
Energy Conversion Devices (ECD), through and including
April 24, 2012.
Judge Tucker grants ECD a replacement lien on the same categories
of collateral which are subject to ECD's pre-petition liens to the
extent arising after the petition date, and the proceeds,
products, replacements and substitutions. The replacement lien on
Post-Petition Collateral will have the same validity, amount and
priority as ECD's liens had prior to the petition date, and will
be limited to the extent of the use of cash collateral by USO
post-petition.
The post-petition advances from ECD to USO through and including
April 24, 2012, inclusive of advances made pursuant to the Interim
Order, are granted an administrative expense priority under 11
U.S.C. Section 503(b)(1).
Judge Tucker authorizes USO to make advances to its Foreign
Subsidiaries, inclusive of funds advanced pursuant to the Interim
Order. The Debtors shall exercise reasonable efforts to cause
such advances to be secured by the assets of the respective
Foreign Subsidiaries.
The Company will comply in all material respects with the budget
on an aggregate basis, measured on a cash basis as of Mar. 31,
2012, and as of Apr. 24, 2012, subject to an aggregate expense
variance from the Budget of 5% during each measurement period.
About Energy Conversion Devices
Energy Conversion Devices -- http://energyconversiondevices.com/
-- has a renowned 51 year history since its formation in Detroit,
Michigan and has been a pioneer in materials science and renewable
energy technology development. The company has been awarded over
500 U.S. patents and international counterparts for its
achievements. ECD's United Solar wholly owned subsidiary has been
a global leader in building-integrated and rooftop photovoltaics
for over 25 years. The company manufactures, sells and installs
thin-film solar laminates that convert sunlight to clean,
renewable energy using proprietary technology.
Energy Conversion Devices filed for Chapter 11 relief (Bankr. E.D.
Mich. Case No. 12-43166) on Feb. 14, 2012. Judge Thomas J. Tucker
presides over the case. Aaron M. Silver, Esq., Judy B. Calton,
Esq., and Robert B. Weiss, Esq., at Honigman Miller Schwartz &
Cohn LLP, in Detroit, Michigan, represent the Debtor as counsel.
The Debtor estimated assets and debts of between $100 million and
$500 million as of the petition date.
The petition was signed by William Christopher Andrews, chief
financial officer and executive vice president.
Affiliate United Solar Ovonic LLC filed a separate Chapter 11
petition on the same day (Bankr. E.D. Mich. Case No. 12-43167).
Affiliate Solar Integrated Technologies, Inc., filed a petition
for relief under Chapter 7 of the Bankruptcy Code (Bankr. E.D.
Mich. Case No. 12-43169.
ENERGY CONVERSION: Bonus Plan Approved for Employees
----------------------------------------------------
Dow Jones' DBR Small Cap reports that Energy Conversion Devices
Inc. got a federal judge's approval to spend a few million dollars
on employee bonuses, money that's meant to encourage good work
while the company looks for a buyer that would revive its stalled
Michigan plant.
As reported in the Marc 26, 2012 edition of the TCR, the
Creditors Committee opposed the proposal of the Debtors for a key
employee retention plan, a management incentive plan and a
severance compromise program. The Committee said that the Debtors
failed to justify spending millions of dollars pursuant to the
Employee Incentive Motion beyond the $1,000,000 per week burn rate
already contemplated by their cash collateral motion.
About Energy Conversion
Energy Conversion Devices -- http://energyconversiondevices.com/
-- has a renowned 51 year history since its formation in Detroit,
Michigan and has been a pioneer in materials science and renewable
energy technology development. The company has been awarded over
500 U.S. patents and international counterparts for its
achievements. ECD's United Solar wholly owned subsidiary has been
a global leader in building-integrated and rooftop photovoltaics
for over 25 years. The company manufactures, sells and installs
thin-film solar laminates that convert sunlight to clean,
renewable energy using proprietary technology.
Energy Conversion Devices filed for Chapter 11 relief (Bankr. E.D.
Mich. Case No. 12-43166) on Feb. 14, 2012. Judge Thomas J. Tucker
presides over the case. Aaron M. Silver, Esq., Judy B. Calton,
Esq., and Robert B. Weiss, Esq., at Honigman Miller Schwartz &
Cohn LLP, in Detroit, Michigan, represent the Debtor as counsel.
The Debtor estimated assets and debts of between $100 million and
$500 million as of the petition date.
The petition was signed by William Christopher Andrews, chief
financial officer and executive vice president.
Affiliate United Solar Ovonic LLC filed a separate Chapter 11
petition on the same day (Bankr. E.D. Mich. Case No. 12-43167).
Affiliate Solar Integrated Technologies, Inc., filed a petition
for relief under Chapter 7 of the Bankruptcy Code (Bankr. E.D.
Mich. Case No. 12-43169.
ENERGY CONVERSION: Shareholders Seek Committee Appointment
----------------------------------------------------------
BankruptcyData.com reports that Energy Conversion Devices' ad hoc
shareholders' committee filed with the U.S. Bankruptcy Court a
motion seeking appointment of an official equity committee.
BankruptcyData.com relates the shareholders assert, "Currently
there is no one to who has been willing or capable to protect the
Equity Holders' investment. The creditors and creditors committee
have no incentive or fiduciary duty to do so. Similarly,
management has already negotiated agreements that align their
interests with the unsecured creditors."
The Court scheduled and April 18, 2012 hearing on the matter.
About Energy Conversion Devices
Energy Conversion Devices -- http://energyconversiondevices.com/
-- has a renowned 51 year history since its formation in Detroit,
Michigan and has been a pioneer in materials science and renewable
energy technology development. The company has been awarded over
500 U.S. patents and international counterparts for its
achievements. ECD's United Solar wholly owned subsidiary has been
a global leader in building-integrated and rooftop photovoltaics
for over 25 years. The company manufactures, sells and installs
thin-film solar laminates that convert sunlight to clean,
renewable energy using proprietary technology.
Energy Conversion Devices filed for Chapter 11 relief (Bankr. E.D.
Mich. Case No. 12-43166) on Feb. 14, 2012. Judge Thomas J. Tucker
presides over the case. Aaron M. Silver, Esq., Judy B. Calton,
Esq., and Robert B. Weiss, Esq., at Honigman Miller Schwartz &
Cohn LLP, in Detroit, Michigan, represent the Debtor as counsel.
The Debtor estimated assets and debts of between $100 million and
$500 million as of the petition date.
The petition was signed by William Christopher Andrews, chief
financial officer and executive vice president.
Affiliate United Solar Ovonic LLC filed a separate Chapter 11
petition on the same day (Bankr. E.D. Mich. Case No. 12-43167).
Affiliate Solar Integrated Technologies, Inc., filed a petition
for relief under Chapter 7 of the Bankruptcy Code (Bankr. E.D.
Mich. Case No. 12-43169.
ESSAR STEEL: S&P Lowers Corporate Credit Rating to 'CCC+'
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on Sault Ste. Marie, Ont.-based Essar Steel Algoma
Inc. (ESA) to 'CCC+' from 'B-'.
"Standard & Poor's also lowered its issue-level rating on the
company's senior secured notes to 'B' from 'B+'. The '1' recovery
rating on the debt is unchanged. In addition, Standard & Poor's
lowered its issue-level rating on the company's senior unsecured
notes to 'CCC' from 'CCC+'. The '5' recovery rating on this debt
is unchanged," S&P said.
"At the same time, we placed all our ratings on ESA on CreditWatch
with developing implications. CreditWatch with developing
implications means we could raise, lower, or affirm the ratings,"
S&P said.
"The downgrade and CreditWatch placement reflect what we view as
the risk that ESA faces as it refinances its $350 million
revolving credit facility due June 20, 2012, which could cause
liquidity pressures to escalate rapidly over the next several
months," said Standard & Poor's credit analyst Donald Marleau. "If
ESA does not refinance in a timely manner, we believe that the
company's thin cash position and volatile operating cash flows
would be insufficient to maintain liquidity above $100 million,
which we believe is the amount necessary to cover its major uses
of cash this year," Mr. Marleau added.
"We believe that ESA's operating performance is improving, with
stronger earnings likely in fiscal 2013 amid stable steel prices
and input costs, as well as increasing volumes. That said, we
believe the credit facility is critical in supporting the
company's day-to-day operations, the absence of which could strain
its ability to purchase raw materials. We assume that ESA will
generate debt to EBITDA of about 6x in fiscal 2012, which we
believe will translate into positive free operating cash flow and
EBITDA interest coverage above 2x," S&P said.
"We will resolve the CreditWatch once we have reviewed the
company's progress in refinancing its revolver," S&P said.
"We could lower the ratings further if ESA does not address its
weak liquidity position within the 90-day horizon of this
CreditWatch," S&P said.
"Alternatively, we could raise the ratings if the company
addresses the maturity of its revolving credit facility in a
manner that preserves $100 million liquidity on a sustainable
basis, which we would view as consistent with a 'B' category
rating," S&P said.
FAIRFIELD SENTRY: Liquidator Files Nine New Suits
-------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that the foreign
representative charged with recovering allegedly fraudulent
transfers for Fairfield Sentry Ltd. filed nine new adversary
proceedings in the Bernard Madoff feeder fund's bankruptcy
proceedings, seeking to claw back more than $65.5 million.
Kenneth Krys, who is in charge of winding down Fairfield Sentry,
Fairfield Sigma Ltd. and Fairfield Lambda Ltd. in a British Virgin
Islands proceeding, filed the complaints in New York against
Albemar Participation Ltd., Barclays Bank SA Madrid, Jared Trading
Ltd./BVI and six others.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970. The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims
agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
US$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.)
As of Feb. 17, 2012 and in the 38 months since his appointment,
the SIPA Trustee has recovered or entered into agreements to
recover more than $9 billion, representing roughly 52% of the
roughly $17.3 billion in principal estimated to have been lost in
the Ponzi scheme by BLMIS customers who filed claims. The
recoveries exceed prior restitution efforts related to Ponzi
schemes both in terms of dollar value and percentage of stolen
funds recovered. Pro rata distributions from the Customer Fund to
BLMIS customers whose claims have been allowed by the SIPA Trustee
totaled $325.7 million.
Mr. Picard has filed 1,000 lawsuits seeking $100 billion from
banks such as HSBC Holdings Plc and JPMorgan Chase & Co. The
trustee has seen more than $28 billion of his claims tossed by
district judges.
About Fairfield Sentry
Fairfield Sentry is being liquidated under the supervision of the
Commercial Division of the High Court of Justice in the British
Virgin Islands. It is one of the funds owned by the Fairfield
Greenwich Group, an investment firm founded in 1983 in New York
City. Fairfield Sentry and other Greenwich funds had among the
largest exposures to the Bernard L. Madoff fraud.
Fairfield Sentry Limited filed for Chapter 15 protection (Bankr.
S.D.N.Y. Case No. 10-13164) on June 14, 2010.
Greenwich Sentry, L.P., and an affiliate filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. 10-16229) on Nov. 19, 2010,
hoping to settle lawsuits filed against it in connection with its
investments with Bernard L. Madoff.
On May 18, 2009, Irving H. Picard, the trustee liquidating the
estate of Mr. Madoff and his firm, Bernard L. Madoff Investment
Securities, LLC, filed a lawsuit against Fairfield Sentry and
Greenwich, seeking the return of US$3.55 billion that Fairfield
withdrew from Madoff during the period from 2002 to Mr. Madoff's
arrest in December 2008. Since 1995, the Fairfield funds
invested about US$4.5 billion with BLMIS.
Mr. Picard claims that Fairfield knew or should have known about
the fraud give that it received from BLMIS unrealistically high
and consistent annual returns of between 10% and 21% in contrast
to the vastly larger fluctuations in the S&P 100 Index.
FEDERATED SPORTS: Files Schedules of Assets and Liabilities
-----------------------------------------------------------
Federated Sports & Gaming Inc. filed its summary of schedules
assets and liabilities, and statement of financial affairs with
the U.S. Bankruptcy Court for the District of Maryland, disclosing
assets of $11,378,631, and liabilities of $7,892,242.
According to cardplayer.com, Federated Sports' statement of
financial affairs shows that from Nov. 29, 2011 to Feb. 29, 2012,
the company paid vendors more than $2.4 million. Five Federated
Sports officers were paid more than $1.1 million. Those officers
include Annie Duke ($299,784), Jeffery Pollack ($226,652), Daniel
Goldberg ($181,062), Jeffrey Grosman ($216,666) and Michael
Brodsky ($166,666).
The report adds the statement also shows $662,801 in additional
unpaid wages and business development expenses requested by these
officers, including $71,669 for Duke, $169,322 for Pollack,
$167,962 for Goldberg, $67,796 for Grosman and $149,050 for
Brodsky. These unpaid wages and expenses are from 2010, 2011 and
2012.
Based in Chevy Chase, Maryland, Federated Sports & Gaming, Inc.,
filed for Chapter 11 protection on Feb. 28, 2012 (Bankr. D. Md.
Case No. 12-13521). Judge Wendelin I. Lipp presides over the
case. Stephen A. Metz, Esq., at Shulman, Rogers, Gandal, Prody &
Ecker, P.A., represents the Debtor. The Debtor estimated both
assets and debts of between $1 million and $10 million.
GENMED HOLDING: Shareholders Approve New Bylaws
-----------------------------------------------
A special meeting of the shareholders of Genmed Holding Corp. was
held at their office located in Zoetemeer, The Netherlands, on the
April 4, 2012. At said meeting, the shareholders approved the new
Bylaws of the Company. A copy of the Bylaws is available for free
at http://is.gd/pNKVTG
About Genmed Holding
Based in The Netherlands, Genmed Holding Corp. through its wholly
owned Dutch subsidiary Genmed B.V. is focusing on the delivery of
low cost generic medicines directly to distribution chains
throughout Europe. Generic medicines, which become available when
the originator medicines patents has expired, are, due to
continuing governmental pressure and new insurance policies,
increasingly used as equally effective alternatives to higher-
priced originator pharmaceuticals by general practitioners,
specialists and hospitals.
For the nine months ended Sept. 30, 2011, the Company has reported
a net loss of $2.37 million on $nil revenue, compared with a net
loss of $1.71 million on $nil revenue for the corresponding period
last year.
At Sept. 30, 2011, the Company's balance sheet showed
$1.29 million in total assets, $2.94 million in total liabilities,
and a stockholders' deficit of $1.65 million.
As reported in the TCR on April 27, 2011, Meyler & Company, LLC,
in Middletown, N.J., expressed substantial doubt about Genmed
Holding's ability to continue as a going concern, following the
Company's 2010 results. The independent auditors noted that the
Company has incurred cumulative net losses of $69.99 million since
inception, and had net losses of $7.73 million and $8.59 million
for the years ended Dec. 31, 2010, and 2009.
GINGRICH GROUP: Files for Chapter 7 Bankruptcy
----------------------------------------------
Center for Health Transformation, also called The Gingrich Group
LLC, filed for Chapter 7 bankruptcy Wednesday in Georgia,
Max Stendahl at Bankruptcy Law360 reports that the filing provides
a legal and political headache for the former House speaker and
Republican presidential candidate Newt Gingrich.
Bloomberg News notes that the bare-bones filing had only the
printed-form, three-page petition and a list of creditors.
Center for Health Transformation, a health care think tank founded
by Mr. Gingrich, estimated assets between $50,000 and $100,000 and
liabilities of between $1 million and $10 million. The voluntary
petition named 100 parties who appeared to be creditors of the
for-profit center, including Gingrich and his wife, Callista.
GRACEWAY PHARMA: US Trustee Blasts Release Provisions in Plan
-------------------------------------------------------------
Lance Duroni at Bankruptcy Law360 reports that the U.S. trustee on
April 3 blasted the release provisions in Graceway Pharmaceuticals
Inc.'s Chapter 11 liquidation plan, saying the liability
protections are overly broad and impermissibly bind creditors
without their consent.
In an objection to the plan lodged in Delaware bankruptcy court,
U.S. Trustee Roberta DeAngelis took aim at releases shielding a
host of non-debtor parties from creditor claims ? including
Graceway's officers and directors, members of the unsecured
creditors committee, the trustee overseeing the company's
liquidation and certain lenders, among others, according to
Law360.
About Graceway Pharmaceuticals
Based in Bristol, Tennessee, Graceway Pharmaceuticals LLC offered
dermatology, respiratory, and women's health products. Its
Zyclara Cream is used for the treatment of external genital and
perianal warts (EGW) in patients 12 years of age and older. The
company offers products for the treatment of dermatology
conditions, such as actinic keratosis, superficial basal cell
carcinoma, external genital warts, atopic dermatitis, and acne;
and respiratory conditions, such as asthma.
Graceway Pharmaceuticals and its affiliates filed Chapter 11
bankruptcy petitions (Bankr. D. Del. Lead Case No. 11-13036) on
Sept. 29, 2011.
The company's debt includes $430.7 million owing on a first-lien
revolving credit and term loan. Second-lien debt is $330 million,
with mezzanine debt totaling another $81.4 million.
Attorneys at Young Conaway Stargatt & Taylor LLP serve as counsel
to the Debtors. Latham & Watkins LLP is the co-counsel. Alvarez
and Marsal North America, LLC, is the financial advisor. Lazard
Freres & Co. LLC is the investment banker. PricewaterhouseCoopers
LLP is the tax consultant. BMC Group serves as claims and notice
agent.
Lowenstein Sandler PC serves as the committee counsel.
Graceway Pharmaceuticals LLC completed the sale of the business in
December 2011 to Medicis Pharmaceutical Corp. for $455 million.
GRAND SOLEIL: RJB to Buy Hotel for $5.6 Million
-----------------------------------------------
The Associated Press, citing court documents, says creditor RJB
Financing LLC is buying the Grand Soleil Hotel and proposed casino
property for about $5.6 million comprised of $4.1 million cash and
a $1.5 million letter of credit.
The report notes, in May 2011, businesses reportedly owed a total
of $1.6 million petitioned to force Grand Soleil into involuntary
Chapter 7 bankruptcy. The resort began voluntary Chapter 11
reorganization in bankruptcy court in August. Grand Soleil's
bankruptcy proceedings followed recent years of financial woes and
a failed attempt to develop a casino.
The report relates Rick Lindsley, chief financial officer of Grand
Soleil LLC, said that for now, the hotel will operate as usual and
will soon be renamed Vue Hotel and Restaurant.
GREENMAN TECHNOLOGIES: Iowa Line of Credit Expires April 30
-----------------------------------------------------------
American Power Group, Inc., a wholly owned subsidiary of GreenMan
Technologies, Inc., agreed to extend the maturity of its
$2,000,000 working capital line of credit with Iowa State Bank
from April 1, 2012, to April 30, 2012. The other terms and
conditions of the Credit Facility remain unchanged. The Bank also
agreed to extend the maturity of a separate promissory note dated
June 14, 2011, in the principal amount of $250,000, from April 1,
2012 to April 30, 2012.
About Greenman Technologies
Lynnfield, Mass.-based GreenMan Technologies, Inc. (OTC QB: GMTI)
through its two alternative energy subsidiaries, American Power
Group, Inc. ("APG") and APG International, Inc. ("APGI"), provides
a cost-effective patented dual fuel conversion technology for
diesel engines and diesel generators.
The Company reported a net loss of $6.81 million for the year
ended Sept. 30, 2011, compared with a net loss of $5.64 million
the year before.
The Company's balance sheet at Dec. 31, 2011, showed $3.68 million
in total assets, $7.03 million in total liabilities, and a
$3.34 million total stockholders' deficit.
For fiscal 2010, the Company's independent auditors expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
has continued to incur substantial losses from operations, has not
generated positive cash flows and has insufficient liquidity to
fund its ongoing operations.
HALLWOOD GROUP: Deloitte & Touche Raises Going Concern Doubt
------------------------------------------------------------
The Hallwood Group Incorporated April 2, 2012, its annual report
on Form 10-K for the fiscal year ended Dec. 31, 2011.
Deloitte & Touche LLP, in Dallas, expressed substantial doubt
about The Hallwood Group's ability to continue as a going concern.
The independent auditors noted that the award proposed by the
court against the Company and the uncertainty related to the
ongoing litigation raises substantial doubt about its ability to
continue as a going concern.
The Company reported a net loss of $6.33 million on
$139.50 million of revenues for 2011, compared with net income of
$9.88 million on $168.35 million of revenues for 2010.
The Company's balance sheet at Dec. 31, 2011, showed
$88.90 million in total assets, $29.76 million in total
liabilities, and stockholders' equity of $59.14 million.
A copy of the Form 10-K is available for free at:
http://is.gd/1qs646
Dallas, Texas-based The Hallwood Group Incorporated was
incorporated in Delaware in 1981 and operates as a holding
company. The Company operates its principal business in the
textile products industry through its wholly owned subsidiary,
Brookwood Companies Incorporated.
HAMPTON ROADS: Names Geri Warren as Senior Vice President
---------------------------------------------------------
Hampton Roads Bankshares, Inc., the holding company for The Bank
of Hampton Roads and Shore Bank, today announced that Geri H.
Warren has joined Shore Bank as Senior Vice President. Warren
will lead Shore Bank's entry into the Delaware market as head of a
new Loan Production Office in Sussex County, which is expected to
open in June. In the interim, she will be based in Shore Bank's
Loan Production Office in Ocean City, Maryland.
Warren joins Shore Bank with over four decades of lending and
branch management experience on the Delmarva Peninsula and
specialized expertise in community bank real estate lending. From
1995 to March, 2012, Warren was a Vice President and Relationship
Manager/Lender with PNC Bank and Mercantile Peninsula Bank, which
was acquired by PNC Bank in 2007. Previously, she served in a
number of positions with Baltimore Trust Company in Selbyville and
Fenwick Island, Delaware from 1970 to 1994, including serving as
Assistant Vice President and Branch Manager of the Fenwick Island
branch from 1980 to 1994.
Douglas J. Glenn, President and Chief Executive Officer of the
Company and BHR, said, "We are excited about expanding our
presence and lending capabilities in the core Delmarva Peninsula
market by opening our first office in Delaware. We continue our
efforts to position the Company to drive high-quality loan growth
in the coming years by attracting bankers like Geri, who are among
the most talented and experienced in these markets."
W. Thomas Mears, President and CEO of Shore Bank, said, "Geri is
ideally suited to lead our entry into Delaware as head of our new
Loan Production Office in Sussex County. She brings over four
decades of banking experience and a deep understanding of the
communities and businesses in the region and their banking needs."
Over the course of her career, Warren has been involved in
numerous business, civic and community organizations in Sussex
County, including holding a variety of positions on the
Bethany/Fenwick Chamber of Commerce and serving on the American
Institute of Banking Board Sussex Chapter, the State Committee of
the Delaware Bankers Association and the Board of BFACC Economic
Development Committee.
About Hampton Roads Bankshares
Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) --
http://www.hamptonroadsbanksharesinc.com/-- is a bank holding
company that was formed in 2001 and is headquartered in Norfolk,
Virginia. The Company's primary subsidiaries are Bank of Hampton
Roads, which opened for business in 1987, and Shore Bank, which
opened in 1961. Currently, Bank of Hampton Roads operates twenty-
eight banking offices in the Hampton Roads region of southeastern
Virginia and twenty-four offices in Virginia and North Carolina
doing business as Gateway Bank & Trust Co. Shore Bank serves the
Eastern Shore of Maryland and Virginia through eight banking
offices and fifteen ATMs.
Effective June 17, 2010, the Company and its banking subsidiary,
Bank of Hampton Roads ("BOHR"), entered into a written agreement
with the Federal Reserve Bank of Richmond and the Bureau of
Financial Institutions of the Virginia State Corporation
Commission. The Company's other banking subsidiary, Shore Bank,
is not a party to the Written Agreement.
Under the terms of the Written Agreement, among other things, BOHR
agreed to develop and submit for approval plans to (a) strengthen
board oversight of management and BOHR's operations, (b)
strengthen credit risk management policies, (c) improve BOHR's
position with respect to loans, relationships, or other assets in
excess of $2.5 million which are now, or may in the future become,
past due more than 90 days, are on BOHR's problem loan list, or
adversely classified in any report of examination of BOHR, (d)
review and revise, as appropriate, current policy and maintain
sound processes for determining, documenting, and recording an
adequate allowance for loan and lease losses, (e) improve
management of BOHR's liquidity position and funds management
policies, (f) provide contingency planning that accounts for
adverse scenarios and identifies and quantifies available sources
of liquidity for each scenario, (g) reduce the Bank's reliance on
brokered deposits, and (h) improve BOHR's earnings and overall
condition.
The Company said in its Form 10-Q for the Sept. 30, 2010 quarter
that due to its financial results, the substantial uncertainty
throughout the U.S. banking industry, and the Written Agreement
the Company and BOHR have entered into, doubts existed regarding
the Company's ability to continue as a going concern through the
second quarter of 2010. However, management believes this concern
has been mitigated by the initial closing of the Private Placement
that occurred on Sept. 30, 2010.
The 2010 results did not include a going concern qualification
from Yount Hyde.
The Company's balance sheet at Sept. 30, 2011, showed
$2.43 billion in total assets, $2.30 billion in total liabilities,
and $135.67 million in total shareholders' equity.
The Company reported a net loss of $98 million on $100.79 million
in interest income for the year ended Dec. 31, 2011, compared with
a net loss of $210.35 million on $122.19 million in interest
income during the prior year.
HARRISBURG, PA: Maryland Sewer Chief Proposed for Incinerator
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that creditors of the waste incinerator in Harrisburg,
Pennsylvania, proposed having the state court name the retired
head of a Maryland sewer authority to serve as receiver for the
city's waste-to-energy project. Robin Davidov headed the
authority in Maryland that operates four electric generating
projects that use waste as fuel. The state court's decision to
appoint a receiver for the incinerator prompted the city's
receiver to resign and call for state and federal investigations
into "possible illegal activities" in connection with financing
for the incinerator at the core of the state capital's financial
problems.
About Harrisburg, Pennsylvania
The city of Harrisburg, in Pennsylvania, is coping with debt
related to a failed revamp of an incinerator. The city is
$65 million in default on $242 million owing on bonds sold to
finance an incinerator that converts trash to energy.
The Harrisburg city council voted 4-3 on Oct. 11, 2011, to
authorize the filing of a Chapter 9 municipal bankruptcy (Bankr.
M.D. Pa. Case No. 11-06938). The city claims to be insolvent,
unable to pay its debt and in imminent danger of having
tax revenue seized by holders of defaulted bonds.
Judge Mary D. France presided over the Chapter 9 case. Mark D.
Schwartz, Esq. and David A. Gradwohl, Esq., served as Harrisburg's
counsel. The petition estimated $100 million to $500 million in
assets and debts. Susan Wilson, the city's chairperson on Budget
and Finance, signed the petition.
Harrisburg said in court papers it is in imminent jeopardy through
six pending legal actions by creditors with respect to a number of
outstanding bond issues relating to the Harrisburg Materials,
Energy, Recycling and Recovery Facilities, which processes waste
into steam and electrical energy. The owner and operator of the
incinerator is The Harrisburg Authority, which is unable to pay
the bond issues. The city is the primary guarantor under each
bond issue. The lawsuits were filed by Dauphin County, where
Harrisburg is located, Joseph and Jacalyn Lahr, TD Bank N.A., and
Covanta Harrisburg Inc.
The Commonwealth of Pennsylvania, the County of Dauphin, and
Harrisburg city mayor Linda D. Thompson and other creditors and
interested parties objected to the Chapter 9 petition. The state
later adopted a new law allowing the governor to appoint a
receiver.
Kenneth W. Lee, Esq., Christopher E. Fisher, Esq., Beverly Weiss
Manne, Esq., and Michael A. Shiner, Esq., at Tucker Arensberg,
P.C., represented Mayor Thompson in the Chapter 9 case. Counsel to
the Commonwealth of Pennsylvania was Neal D. Colton, Esq., Jeffrey
G. Weil, Esq., Eric L. Scherling, Esq., at Cozen O'Connor.
In November 2011, the Bankruptcy Judge dismissed the Chapter 9
case because (1) the City Council did not have the authority under
the Optional Third Class City Charter Law and the Third Class City
Code to commence a bankruptcy case on behalf of Harrisburg and (2)
the City was not specifically authorized under state law to be a
debtor under Chapter 9 as required by 11 U.S.C. Sec. 109(c)(2).
Dismissal of the Chapter 9 petition was upheld in a U.S. District
Court.
That same month, the state governor appointed David Unkovic as
receiver for Harrisburg. Mr. Unkovic is represented by the
Municipal Recovery & Restructuring group of McKenna Long &
Aldridge LLP, led by Keith Mason, Esq., co-chair of the group.
HASSAYAMPA GOLF: Files for Chapter 11 Bankruptcy Protection
-----------------------------------------------------------
Lynne LaMaster at Prescott eNews reports that Hassayampa Golf Club
filed for Chapter 11 voluntary bankruptcy (Bankr. D. Ariz. Case
No. 12-06605) on March 30, 2012. Creditors include the City of
Prescott and the Yavapai County Treasurer.
The report relates that, according to the Arizona Department of
Revenue, the City of Prescott has two Community Facility Districts
set up. Hassayampa Community Facilities for public
infrastructure, was issued on 11/7/96 for public infrastructure.
The original amount was for $7,315,000, and the current balance is
at $3,305,000. The Hassayampa Community Facilities District #2,
issued on 2/1/00, also for public infrastructure, was for
$1,240,000. The current balance on the second CFD is $475,000.
The money is repaid to the City via a taxing authority collected
with the property taxes.
The report also relates that, according to the County Assessor's
Web site, the Golf Club at Hassayampa owes the Yavapai County
Treasurer $162,724.72 in taxes on 13 parcels, totalling 145.59
acres. According to the report, over half of the owed taxes are
delinquent liens.
The Hassayampa Golf Club is a member-owned, private golf club
located north of Copper Basin Road. The Club is managed by Arnold
Palmer Golf Management.
Judge Redfield T. Baum PCT Sr. presides over the case. Shelton L.
Freeman, Esq., at Deconcini McDonald Yetwin & Lacy PC, represents
the Debtor. The Debtor estimated both assets and debts of between
$1 million and $10 million.
HAWKER BEECHCRAFT: Moody's Cuts CFR/PDR to 'Ca'; Outlook Negative
-----------------------------------------------------------------
Moody's Investors Service has downgraded ratings of Hawker
Beechcraft Acquisition Company LLC, including the probability of
default rating to Ca from Caa3. Concurrently, a limited default
("LD") designation has been assigned because Moody's believes that
the company deferred bank debt interest that was due
March 30. Credit facility forbearance until June 29, 2012 has been
arranged for the interest deferral, financial covenant and other
breaches. The LD designation will remain in place until resolution
of the deferred interest payment emerges.
Ratings are:
Corporate family, to Ca from Caa3
Probability of default, to Ca/LD from Caa3
$240.3 million first-lien revolver due 2013, to Caa3 LGD3, 33%
from Caa2 LGD3, 30%
$1,471 million first-lien term loan due 2014, to Caa3 LGD3, 33%
from Caa2 LGD3, 30%
$198.5 million first-lien incremental term loan due 2014, to Caa3
LGD3, 33% from Caa2 LGD3, 30%
$75.0 million synthetic letter of credit facility due 2014, to
Caa3 LGD3, 33% from Caa2 LGD3, 30%
$182.9 million senior unsecured notes due 2015, to C LGD5, 81%
from Ca LGD5, 80%
$302.6 million senior unsecured PIK-election notes due 2015, to C
LGD5, 81% from Ca LGD5, 80%
$145.1 million senior subordinated notes due 2017, to C LGD6, 95%
from Ca LGD6, 95%
Speculative grade liquidity, unchanged at SGL-4
Rating outlook, Negative
RATINGS RATIONALE
A new $124.5 million loan (unrated, due June 2012) has been
arranged to help fund operations while the company pursues a
financial restructuring. The liquidity profile is weak due to very
high financial leverage and the large size of near-term debt
obligations. Although the company disclosed that coupon payments
due April 1, 2012 on its senior and subordinated notes went
unpaid, those indentures provide for a 30-day grace period.
The negative outlook continues, reflecting Hawker Beechcraft's
ongoing pursuit of a financial restructuring that would likely
result in significant loss for creditors. The probability of
default rating could be lowered further if the company were to
seek protection under the U.S. Bankruptcy Code or if, in Moody's
view, the company were to come into default on most of its debt.
The principal methodology used in rating Hawker Beechcraft
Acquisition Company LLC 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.
Hawker Beechcraft Acquisition Company, LLC manufactures business
jets, turboprops and piston aircraft for corporations, governments
and individuals. The company operates in three business segments:
Business and General Aviation, Trainer/Attack Aircraft, and
Customer Support. The operations were acquired from Raytheon by
affiliates of Onex Corporation and Goldman Sachs Capital Partners
in March 2007 for roughly $3.4 billion. For the last twelve months
ended September 30, 2011 revenues were $2.7 billion.
HEALTH NET: Fitch Affirms 'BB+' Issuer Default Rating
-----------------------------------------------------
Fitch Ratings has affirmed the 'BB+' Issuer Default rating of
Health Net, Inc. and the 'BBB' Insurer Financial Strength ratings
on Health Net's operating subsidiaries. The Rating Outlook is
Stable.
Health Net maintains a comparatively small market position and
size/scale characteristics consistent with Insurer Financial
Strength (IFS) ratings in the 'BBB' category.
The ratings also consider financial metrics such as NAIC risk-
based capital ratios and volatility in earnings that Fitch views
as supportive of 'BBB' IFS ratings. Other metrics such as
financial leverage and interest coverage are generally consistent
with the higher 'A' IFS rating category.
Health Net's market position is considered small given the fact
that the company primarily operates in California with only modest
diversification from three other Western states. Size and scale
of Health Net's operations relative to Fitch's rated universe are
considered modest when measured by membership of six million
individuals and total revenue of less than $12 billion.
Health Net's NAIC risk-based capital (RBC) ratio remains adequate,
but well below higher rated peers. Management targets an NAIC RBC
ratio of 200% of the Company Action Level (CAL) for its
underwriting subsidiaries, which is consistent with Fitch's median
guidelines for the current rating category.
Fitch believes that Health Net has been plagued by a series of
operational issues in recent years that in some cases have led to
litigation, regulatory inquiries, and material earnings
disruptions. The agency believes that Health Net's current
ratings incorporate the potential for such issues of similar
financial and capital impact. However, Fitch also believes that
any new concerns around Health Net's risk management capabilities
could adversely affect the company's ratings.
Fitch believes that Health Net uses a reasonable amount of
financial leverage. The company's debt-to-total capital ratio was
27% at year-end 2011, excluding unrealized investment gains from
stockholders' equity. Health Net's ratio of debt-to-EBITDA was
2.1 times (x) at year-end 2011 and the total financing and
commitment (TFC) ratio was 0.4x at year-end 2011, both ratios are
comparable with health sector norms and viewed by Fitch as
consistent with the 'A' rating category.
Health Net's operating EBITDA, excluding net realized investment
gains, covered interest expense by 6.5x in 2011, which is also
consistent with the 'A' rating category. Interest coverage would
have been significantly better in 2011 excluding the impact of a
$180 million litigation-related charge.
Key ratings triggers that could lead to an upgrade for Health Net
include:
-- Solid earnings with less volatility;
-- Significant capital strengthening with Risk-Based Capital
(RBC) sustained above 250% Company Action Level (CAL);
-- Improved run-rate profitability measured by EBITDA margin;
-- Profitable geographic diversification and expansion of the
company's premium and membership base.
Key ratings triggers that could lead to a downgrade for Health Net
include:
-- Unforeseen operational issues that cause Fitch to question
the company's risk management practices;
-- Material loss of commercial membership;
-- A substantial regulatory fine or litigation charge;
-- A significant decline in stockholders' equity or increase in
financial leverage above 30%.
Fitch has affirmed the following ratings with a Stable Rating
Outlook:
Health Net Inc.
-- Long-term IDR at 'BB+';
-- 6.375% senior notes due June 2017 at 'BB';
Health Net Of California, Inc.
Health Net of Arizona, Inc.
Health Net Plan of Oregon, Inc.
-- IFS at 'BBB'.
HEARTLAND MEMORIAL: McGuireWoods Wants Malpractice Suit Tossed
--------------------------------------------------------------
Maria Chutchian at Bankruptcy Law360 reports that McGuireWoods LLP
on Thursday asked an Indiana federal court to throw out a
malpractice suit brought by Heartland Memorial Hospital LLC
surrounding its parent company's merger with an investment banking
firm, saying the hospital never even alleged that it had been
McGuireWoods' client.
According to Law360, the hospital alleges that McGuireWoods,
alongside DLA Piper and other attorneys, failed to provide
adequate business advice in the March 2006 sale of its parent,
iHealthcare Inc., to Wright Capital Partners LLC, and that
Heartland suffered significant damages as a result.
Heartland Memorial Hospital filed for Chapter 11 bankruptcy in the
U.S. Bankruptcy Court for the Northern District of Indiana. On
Nov. 19, 2008, the Bankruptcy Court confirmed a plan of
liquidation for Heartland. David Abrams was appointed as Plan
Trustee.
HOFMEISTER PERSONAL: Judge Approves Bid to Hire Consultant
----------------------------------------------------------
Scott Olson at Indianapolis Business Journal reports that Judge
Basil H. Lorch III granted Hofmeister Personal Jewelers Inc.'s
request to hire consultant Charles & Associates despite objections
from the jeweler's unsecured creditors.
According to the report, Hofmeister is seeking a lender to
refinance existing debt and provide more working capital. It said
it will pay Charles & Associates a $10,000 retainer fee and 3% of
the new loan amount. The jeweler did not list in court documents
the amount of financing it's seeking. But an attorney for the
unsecured creditors said the consulting fee could range between
$45,000 and $55,000 based on the outstanding balance of a PNC Bank
loan, says the report.
"[Hofmeister] has not demonstrated how, if at all, this will
benefit the estate of any of its creditors other than PNC and the
insider guarantors, but will only serve to diminish estate
assets," the report quotes Marc Alexander Beatty, attorney for the
unsecured creditors, as stating. Mr. Beatty, of local law firm
Katz & Korin PC, further argued that Hofmeister has yet to file a
reorganization plan and has not indicated what other efforts, if
any, it has taken to locate financing on its own.
The report relates Hofmeister's attorney, Eric Redman, Esq., said
in court documents that the agreement with the consultant will
result in a quicker bankruptcy resolution and a stronger chance
unsecured creditors will get paid. This is not the first time
during bankruptcy proceedings that Hofmeister has sought help from
an outside consultant.
The report notes, in October, it received approval to hire
Pittsburgh-based LFS Consultants to help it move merchandise
during the Christmas shopping season and through Valentine's
Day. LFS, which specializes in helping jewelry retailers move or
liquidate stores, was hired to bring additional inventory into the
store and generate more short-term cash to benefit Hofmeister and
its creditors, a court filing said.
Hofmeister Personal Jewelers Inc. owns and operates jewelry
stores. The Company filed for Chapter 11 reorganization in April
2011, listing assets of nearly $3.8 million and liabilities of
$5.4 million.
HOMEGOLD FINANCIAL: SC High Court Affirms Exec.'s Fraud Sentence
----------------------------------------------------------------
Steven Melendez at Bankruptcy Law360 reports that the South
Carolina Supreme Court has upheld a securities fraud conviction
and five-year prison sentence for a former HomeGold Financial Inc.
executive involved in one of the biggest bankruptcies in state
history, according to news reports Friday.
HomeGold Financial Inc. Chairman John "Jack" Sterling Jr. had
argued prosecutors didn't prove their case and contended the trial
judge in the case allowed irrelevant and prejudicial testimony
from investors who lost millions of dollars in HomeGold subsidiary
Carolina Investors' 2003 collapse, Law360 relates.
About HomeGold Financial
HomeGold Financial Inc. originated and sold residential mortgages
to homebuyers with credit problems. HomeGold later filed for
Chapter 11 bankruptcy after failing to make repayments of its
inter-company loan to subsidiary Carolina Investors, Inc. More
than 8,000 investors lost $275 million with HomeGold's collapse.
HomeGold Financial and HomeGold Inc. filed for Chapter 11
bankruptcy protection (Bankr. D. S.C. Case No. 03-03865) on
March 31, 2003. William E. Calloway, Esq., at Robinson, Barton,
McCarthy, Calloway & Johnson, P.A., represented the Debtors.
HomeGold Financial estimated assets and debts of more than
$100 million as of the Petition Date.
HOSTESS BRANDS: Execs Agree to Pay Cut Pending Bankruptcy Exit
--------------------------------------------------------------
Rachel Feintzeig, writing for Dow Jones Newswires, reports that
Gregory F. Rayburn, a restructuring expert who took the helm at
Hostess Brands Inc. last month, said in an interview that the top
four executives working under him had agreed to cut their annual
salaries to $1 until the company emerges from bankruptcy or Dec.
31, whichever comes first.
Dow Jones relates that, according to the official committee of
unsecured creditors, the executives -- Gary Wandschneider, John
Stewart, David Loeser and Richard Seban
-- had seen their salaries increase by 75% to 80% last July, at a
time when Hostess had already hired restructuring lawyers.
Dow Jones also notes four additional executives agreed to return
to the salaries they were receiving before the July increase.
"I just think that it's the right thing to do," Mr. Rayburn said
Sunday, according to Dow Jones. The report said Mr. Rayburn noted
that word of the salary bumps, disclosed in redacted papers filed
by the creditors committee last week Tuesday, had caused "a high
level of internal strife in the organization and certainly
external strife."
Dow Jones also reports Mr. Rayburn said all of the executives were
supportive of the decision to roll back the salaries and that the
management team had the "full support" of the company's board and
its lenders. Mr. Rayburn also said Sunday that no bonus plan is
in the works for the executives who agreed to take the pay cuts.
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
head the legal team for the committee.
HOSTESS BRANDS: Teamsters Outraged by Allegations of Looting
------------------------------------------------------------
The International Brotherhood of Teamsters --
http://www.teamster.org-- expressed outrage over revelations
uncovered by Dow Jones Newswires that Hostess Brands Inc.
executives cheated the company and lined their own pockets while
at the same time demanding drastic wage and benefit cuts by
workers and failing to pay pension obligations during the run-up
to bankruptcy.
"The Dow Jones article suggests that management broke the law,
looted the company and then told workers to suck it up and
sacrifice," said Ken Hall, General Secretary-Treasurer of the
Teamsters Union, which represents more than 7,500 route sales
representatives, drivers and other employees at Hostess.
"If this is true, Hostess executives have violated their agreement
with the Teamsters that all parties, including management, would
share equally in concessions that would help keep this company
alive," Hall said.
"It would be outrageous for the board of directors, which included
secured lenders, to approve executive salary increases of up to
300 percent for a company that has filed for bankruptcy twice in
four years," he said.
The committee representing the company's unsecured creditors,
which includes the Teamsters Union, is calling for a formal
investigation into Hostess management's potential violation of
bankruptcy law.
Manipulation of Exec. Pay
Unsecured creditors suspect that Hostess Brands Inc. may have
"manipulated" its executives' pay -- sending its former chief
executive's salary, in particular, skyrocketing -- in the months
leading up to its Chapter 11 filing, in an effort to dodge the
Bankruptcy Code's compensation requirements, according to a
redacted court filing reviewed by Dow Jones.
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
head the legal team for the committee.
HOUGHTON MIFFLIN: Fitch's Junk Ratings Affect $3.1 Million Debt
---------------------------------------------------------------
Fitch Ratings has downgraded the Issuer Default Rating (IDR) of
Houghton Mifflin Harcourt Publishers Inc (HMH) and its
subsidiaries from 'CCC' to 'CC'. There is no assigned Rating
Outlook. The downgrade impacts $3.1 billion in debt.
The downgrade reflects Fitch's belief that HMH will look to reduce
absolute levels of debt and interest cost burdens through a
balance sheet restructuring (in or out of court). This heightened
risk is driven by Fitch's analysis based on the recent posting of
the company's annual report. Fitch calculates adjusted gross
leverage and cash interest coverage at approximately 15 times (x)
and 1.2x, respectively. Based on the current capital structure
and Fitch's expectations for 2012 and 2013, these metrics will
continue to decline with adjusted interest coverage falling below
1x. Fitch also notes that the company has hired restructuring
advisors and HMH has made comments regarding strengthening their
balance sheet.
Fitch believes any restructuring transaction would impact both the
bank and bond holders. The bank debt and notes benefit from the
same security package and guarantees and are pari pasu with each
other.
Any out of court restructuring which imposed a material reduction
in terms (less principal, reduced coupon interest and tenor
extension) and was necessary to avoid a default or bankruptcy
would be classified as a distressed debt exchange (DDE). In the
event of a DDE, Fitch would downgrade the IDR to Restricted
Default (RD). The IDR rating would subsequently be raised to a
rating reflective of the resulting capital structure.
The top 7 equity holders own approximately 75% of the company and
these equity holders hold more than 51% of the credit agreement's
outstanding balance. Fitch recognizes that there is a remote
possibility that the bank debt holders could agree to amend and
extend the revolver (2013) and term loan (2014) maturities,
preventing any equity dilution. However, Fitch believes a
restructuring of the balance sheet is more likely as a
restructuring would reduce the interest burden, improving
liquidity and the company's financial flexibility to fund capital
and operating investments.
HMH continues to be a leader in the K-12 educational material and
services sector, capturing 41% of 2011 market share (adoption and
open territory market [excluding Advanced Placement Sales] - based
on Association of American Publishers (AAP) and company data).
Fitch believes investments made into digital products and services
will position HMH to take a meaningful share of the rebound in the
K-12 educational market. Fitch's expects HMH will be able to, at
a minimum, defend its market share.
Fitch expects revenues to continue to decline in the low to mid
single digits in 2012. The education business is in a cyclical
trough, and Fitch believes the HMH and its peers will benefit from
the adoption of common core standards in 2014/2015 which will fuel
revenue growth.
What Could Trigger a Rating Action
-- Ratings would be downgraded upon the announcement of a DDE or
bankruptcy filing.
-- A one notch upgrade to 'CCC' could occur if the bank
maturities are extended.
Recovery Ratings
HMH Publishers' Recovery Ratings reflect Fitch's expectation that
the enterprise value of the company, and hence recovery rates for
its creditors, will be maximized in a restructuring scenario
(going-concern) rather than liquidation. Fitch estimates an
adjusted, distressed enterprise valuation of $1.4 billion using a
6x multiple. The 'RR4' Recovery Ratings for the secured debt
issues represent an expected recovery in the range of Fitch's 31%
to 50% range.
Liquidity and Leverage
As of the end of December 2011, liquidity included $414 million in
available cash and $111 million in availability under the
company's $250 million A/R Facility, maturing in 2013/2014. Fitch
believes that the company has sufficient liquidity to fund
operations, interest payments and amortization of the term loan
into 2014. Near-term maturities are HMH's secured termed
revolver, $236 million due 2013, and secured term loans, $2.6
billion due in 2014. HMH's $300 million secured bonds mature in
2019.
As of December 2011, Fitch calculates gross leverage and cash
interest coverage at approximately 15x and 1.2x, respectively
(adjusting for deferred revenue, other one time items and
deducting for plate expenditures).
Fitch has downgraded the following ratings:
HMH Publishers
-- IDR 'CCC' to 'CC';
-- Secured first lien credit facility 'CCC'/RR4 to 'CC'/RR4;
-- Senior secured first lien notes 'CCC/RR4' to 'CC'/RR4.
Houghton Mifflin Harcourt Publishing Company
-- IDR 'CCC' to 'CC'.
HMH Publishers LLC
-- IDR 'CCC' to 'CC'.
HOVNANIAN ENTERPRISES: Offering 25 Million Class A Common Shares
----------------------------------------------------------------
Hovnanian Enterprises, Inc., priced its previously announced
offering of 25,000,000 shares of its Class A Common Stock at $2.00
per share, resulting in net proceeds of approximately $47 million.
The Company has granted the underwriters of the offering a 30-day
option to purchase up to an additional 3,750,000 shares of Class A
Common Stock to cover over-allotments.
The Company's Class A Common Stock is listed on the New York Stock
Exchange under the symbol "HOV".
The Company intends to use the net proceeds from the offering,
along with cash on hand, to purchase certain of the Company's
senior unsecured notes in a private transaction.
Citigroup, Credit Suisse and J.P. Morgan are serving as the joint
book-running managers for the Class A Common Stock offering.
The shares of Class A Common Stock will be issued pursuant to an
effective registration statement previously filed with the
Securities and Exchange Commission on Form S-3 and available for
review on the Securities and Exchange Commission's Web site at
www.sec.gov.
A copy of the free writing prospectus is available for free at:
http://is.gd/tXJNYT
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.
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.
* * *
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.
HUDSON TREE: Has Bank 7 Loan to Refinance AgriLand Debt
-------------------------------------------------------
Hudson Tree Farm, Inc., asks the Bankruptcy Court for
authorization to incur secured debt from Bank 7.
Prior to the Petition Date, Debtor issued notes amounting to
$2.5 million to AgriLand, PCA. The loan is secured by valid,
perfected and enforceable liens, security interests and
assignments of substantially all assets of Debtor, which include
Debtor's real property, bank account, accounts receivables,
equipment and inventory.
The Debtor has obtained a commitment letter for funds in the
amount of $2.525 million to refinance Agriland debt from Bank 7 of
Woodward, Oklahoma.
The Debtor believes that the transaction is ultimately in the best
interest of Debtor and its creditors, which will result in an
income stream to use in funding its Chapter 11 Plan of
Reorganization.
AgriLand, PCA, and AgriLand, FLCA, have filed a response to the
Debtor's motion to incur secured debt from Bank 7, saying that
they do not object to the new financing as long as the take-out
terms adequately protect their interests. Those terms should
include the immediate payment of loan proceeds to Creditors and
the entry of other orders as are consistent with the previous
orders of the Court.
About Hudson Tree Farm
Bonham, Texas-based Hudson Tree Farm, Inc., dba Kennedy Arbor, has
been engaged in the business of growing and selling trees. The
company is formerly known as Hudson & Williams Investments, Inc.
Hudson Tree Farm filed for Chapter 11 bankruptcy (Bankr. E.D. Tex.
Case No. 11-43633) on Dec. 5, 2011. Chief Judge Brenda T. Rhoades
oversees the case. Bill F. Payne, Esq., at The Moore Law Firm,
LLP, serves as the Debtor's counsel. In its schedules, the Debtor
disclosed assets of $11.7 million and liabilities of $2.6 million.
The petition was signed by Mark Hudson, president.
INNOVARO INC: Expects 2011 Audit Report to Contain "Going Concern"
------------------------------------------------------------------
Innovaro, Inc., discloses that its annual report on Form 10-K for
the fiscal year ended Dec. 31, 2011, could not be filed within the
prescribed time period because the compilation, dissemination
and review of the information required to be presented in the Form
10-K for the period ending Dec. 31, 2011, cannot be completed by
March 30, 2012, without undue hardship and expense. The Company
anticipates that it will file its Form 10-K within the "grace"
period provided by Securities Exchange Act Rule 12b-25.
"Although (i) it is not anticipated that any significant change in
the results of operations will be reflected in the income
statements to be included in the Company's Form 10-K for the year
ended Dec. 31, 2011, from the income statements included in the
Company's Form 10-K for the year ended Dec. 31, 2010, and (ii) it
is unrelated to the filing of this notification of late filing,
the Company has determined that it should not have recorded a
derivative liability related to certain warrants issued by it
during the third quarter of 2010," the Company said. "The
derivative liability was first recorded in the Company's financial
statements for the quarter ended Sept. 30, 2010, and continued to
be recorded through the third quarter of 2011. The Company has
determined that this error is not material with respect to its
financial statements for the quarter ended Sept. 30, 2010, and the
year ended Dec. 31, 2010, but has determined that the error is
material with respect to the first three quarters of 2011. As a
result, the Company will amend its Form 10-Qs for the quarters
ended March 31, 2011, June 30, 2011, and Sept. 30, 2011, to
reverse the recording of this derivative liability in the
financial statements included therein.
"In addition, the Company expects the report of its registered
independent accounting firm on the consolidated financial
statements to be included in its Form 10-K for the year ended
Dec. 31, 2011, to contain an explanatory paragraph indicating that
current conditions raise substantial doubt with respect to the
Company's ability to continue as a going concern.
A copy of the Form 12b-25 is available for free at:
http://is.gd/Kr5i2Z
Tampa, Fla.-based Innovaro, Inc., provides a comprehensive
portfolio of end-to-end innovation solutions primarily in the
United States and the United Kingdom. In 2011, the Company
reorganized into two new lines of business: Strategic Services and
Technology Services. The strategic services segment enables the
Company's clients to become more efficient by finding new avenues
to grow, fighting commoditization, improving return on investment,
transforming the organization, and removing barriers to
innovation. The technology services business provides information
to assist clients in gaining insights and making decisions.
The Company's total assets were $24.1 million as of Sept. 30,
2011, and $24.7 million as of Dec. 31, 2010.
INTELSAT SA: Holdings Enters Into Reorganization Transactions
-------------------------------------------------------------
Intelsat Global S.A. and certain of its subsidiaries engaged in a
series of transactions that resulted in Intelsat Global Holdings,
a new holding company, acquiring all of the outstanding shares of
Intelsat Global. As a result, Intelsat Global, which was
previously owned by BC Partners, Silver Lake, certain other equity
sponsors and members of management and certain designated
employees, became a wholly-owned subsidiary of Intelsat Global
Holdings, and all of Intelsat Global Holdings' equity is now
beneficially owned by BC Partners and its affiliates, Silver Lake
and its affiliates, certain other equity sponsors and members of
management and certain designated employees in the same
proportions as those entities' and individuals' former ownership
in Intelsat Global.
In connection with the reorganization transactions, all of the
shareholder and equity agreements, as well as the employment
letter agreements of two named executive officers, of Intelsat
Global S.A., the ultimate parent company of Intelsat S.A., were
amended to provide that all obligations, liabilities, rights,
title and interest thereunder were assigned by Intelsat Global to
Intelsat Global Holdings, and that Intelsat Global Holdings
assumed that assignment. These agreements are:
* Management Shareholders Agreement (entered into on May 6,
2009, and effective as of Feb. 4, 2008) and the letter
agreements related thereto. In particular, Intelsat Global
and Intelsat Global Holdings entered into Amendment No. 2 to
the Management Shareholders Agreement with the other parties
thereto;
* Amended and Restated Intelsat Global 2008 Share Incentive
Plan, and all Grant Agreements thereunder;
* Intelsat Global Unallocated Bonus Plan; and
* Employment letter agreements, dated as of May 8, 2009, by and
between Intelsat Global and each of Stephen Spengler and
Thierry Guillemin.
In addition, the employment agreements with David McGlade, Michael
McDonnell and Phillip Spector were modified as of March 30, 2012,
so that their positions would be at Intelsat Global Holdings.
About Intelsat
Intelsat S.A., formerly Intelsat, Ltd., provides fixed-satellite
communications services worldwide through a global communications
network of 54 satellites in orbit as of Dec. 31, 2009, and ground
facilities related to the satellite operations and control, and
teleport services. It had US$2.5 billion in revenue in 2009.
Washington D.C.-based Intelsat Corporation, formerly known as
PanAmSat Corporation, is a fully integrated subsidiary of Intelsat
S.A., its indirect parent. Intelsat Corp. had US$7.70 billion in
assets against US$4.86 billion in debts as of Dec. 31, 2010.
The Company reported a net loss of $433.99 million in 2011, a net
loss of $507.77 million in 2010, and a net loss of $782.06 million
in 2009.
The Company's balance sheet at Dec. 31, 2011, showed $17.36
billion in total assets, $18.45 billion in total liabilities,
$1.14 billion total Intelsat S.A. shareholder's deficit, and
$50.92 million noncontrolling interest.
* * *
Luxembourg-based Intelsat S.A. carries 'B' issuer credit ratings
from Standard & Poor's. It has 'Caa1' corporate family and
probability of default ratings from Moody's Investors Service.
JABIL CIRCUIT: S&P Rates $1.3-Bil. Sr. Secured Revolver Loan 'BB+'
------------------------------------------------------------------
Standard & Poor's Rating Services assigned its 'BB+' issue-level
credit rating to St. Petersburg, Fla.-based electronic
manufacturing services (EMS) provider Jabil Circuit Inc.'s new
$1.3 billion senior unsecured revolving credit facility. "At the
same time, we assigned the senior unsecured debt a '3' recovery
rating, indicating a meaningful (50% to 70%) recovery expectation
in the event of a payment default," S&P said.
"We also affirmed our existing ratings on the company, including
the 'BB+' corporate credit rating," S&P said.
"The rating on Jabil reflects the company's diversified end
markets, consistent profitability despite difficult market
conditions, increasing market share, and improved financial
profile," said Standard & Poor's credit analyst William Backus.
"We expect the company to continue to pursue its moderate
financial policies, by maintaining leverage that is low for the
rating, modest dividends, and annual share repurchases at or below
discretionary cash flows."
"With annual revenues in excess of $16 billion, Jabil provides EMS
to a wide range of industries, including networking and telecom,
computing and storage, mobile phone and digital consumer products,
and industrial and medical equipment. The company's 'fair'
business risk profile reflects its position as the third-largest
global EMS provider and its improving product portfolio, partly
offset by highly competitive and potentially volatile industry
conditions and frequent restructurings to address competitive
conditions," S&P said.
"Following a revenue trough in the May 2009 quarter, business
activity and revenues rebounded strongly in subsequent quarters.
Revenues were $4.2 billion for the February 2012 quarter, up 8%
year over year but down 2% sequentially. Sequential sales declines
were due to lower mobile handset volumes in the High Velocity
Segment (HVS), partly tempered by strength in the Diversified
Manufacturing Services' (DMS) Material Technology Group and modest
sequential improvement in the Enterprise and Infrastructure
segment (E&I)," S&P said.
"We believe Jabil's revenue growth will remain higher than many of
its peers in the near-to-medium term because of the company's
pursuit of secular outsourcing trends in industrial, clean tech,
and health care and life science end markets," added Mr. Backus.
"Weaker growth in mobility products is likely to partly offset
total revenue growth. Adjusted EBITDA margins were 6.2% for
the February 2012 quarter, flat year over year. We expect the
company to sustain current margin levels over the near term due to
near-term revenue growth and an ongoing revenue mix shift to
higher margin products. However, we forecast the company's
operating margin improvement will remain tempered by its low-
margin, high-volume, consumer-related business, which still
composes about one-quarter of the company's revenue base."
"The positive rating outlook reflects the potential for an upgrade
if Jabil can sustain leverage at current levels, while maintaining
its moderate financial policies and adequate liquidity in an
industry known for revenue and earnings volatility, and relatively
low average returns on capital. Standard & Poor's would consider
raising the rating if the company sustains financial performance
at current levels through fiscal year 2012, while limiting
dividends to modest levels and share repurchases at or below
discretionary cash flows. Alternatively, if the company pursues a
more aggressive financial policy, either via acquisitions or share
buybacks that increased leverage to the low-2x area, we could
revise the outlook to stable," S&P said.
"A downgrade is currently unlikely, given the company's revenue
growth trend and improved leverage; however, if leverage rose to
above 3x on a sustained basis we would consider lower the rating,"
S&P said.
JEFFERSON COUNTY: Hearing Today on Sewer Revenue
------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Jefferson County, Alabama, and holders of
$3.1 billion in defaulted sewer bonds drew the battle lines for an
April 11 hearing where the U.S. Bankruptcy Judge in Birmingham
will decide how much sewer revenue may be used to pay operating
expenses before the surplus is turned over to bondholders.
The report relates that the dispute revolves around Section 928(b)
of the Bankruptcy Code which says that holders of revenue bonds
are entitled to receive income after payment of "necessary
operating expenses."
According to the report, Bank of New York Mellon, as indenture
trustee, along with other plaintiffs in the lawsuit, believes the
bankruptcy judge is required to pay bondholders all sewer revenue
aside from expense items specifically authorized in the bond
documents. The county is arguing that deducting so little for
expenses will "choke and degrade the system by cutting off the
resources required to maintain, renew, and rehabilitate the
infrastructure."
The lawsuit over control of the sewers and revenue is Bank
of New York Mellon v. Jefferson County, Alabama (In re Jefferson
County, Alabama), 12-00016, U.S. Bankruptcy Court, Northern
District Alabama (Birmingham).
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.
U.S. District Judge Thomas B. Bennett ruled in March 2012 that
Jefferson County is eligible under state law to pursue a debt
restructuring under Chapter 9. Holders of more than $3 billion in
defaulted sewer debt had challenged the county's right to be in
Chapter 9.
JEFFERSON COUNTY: Bond Insurer Wants County to Raise Sewer Rates
----------------------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that a bond insurer on
the hook to pay what Jefferson County doesn't on some of its $3
billion sewer system debt wants the bankruptcy court to force the
struggling Alabama county to collect more money from its residents
on their monthly sewer bills.
Meanwhile, American Bankruptcy Institute reports Jefferson County
is fighting to halt a bond-holder suit. According to the report,
Jefferson County, scarred by a corruption scandal and financially
drained by a sewer system that it cannot afford, is now worried
that it could be exposed to another multimillion-dollar debt on a
lawsuit with bond insurers.
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.
U.S. District Judge Thomas B. Bennett ruled in March 2012 that
Jefferson County is eligible under state law to pursue a debt
restructuring under Chapter 9. Holders of more than $3 billion in
defaulted sewer debt had challenged the county's right to be in
Chapter 9.
JER/JAMESON: Hires PwC as Independent Accountants
-------------------------------------------------
JER/Jameson Mezz Borrower I LLC, et al., seek permission from the
U.S. Bankruptcy Court to employ PrincewaterhouseCoopers LLP as
independent accountants.
The Debtor and PwC have agreed to a fixed fee of $110,000 to be
paid in three installments.
Chris Dietrick attests that the firm is a "disinterested person"
as the term is defined in Section 101(14) of the Bankruptcy Code.
About JER/Jameson Mezz Borrower II
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.
The U.S. Trustee has not appointed an official Committee of
unsecured creditors in any of the Debtors' cases.
KINETIC CONCEPTS: Moody's Says Surgical Mesh Offering Credit Neg.
----------------------------------------------------------------
Moody's Investors Service commented that a new competitive
surgical mesh offering is credit negative for Kinetic Concepts,
Inc. However, there are no changes to Kinetic Concepts' B2 rating
or stable outlook.
KOLORFUSION INT'L: SEC Wants Common Stock Registration Revoked
--------------------------------------------------------------
Kolorfusion International, Inc., received notice from the
Securities and Exchange Commission that it was named as a
respondent to an Order Instituting Administrative Proceedings and
Notice of Hearing Pursuant to Section 12(j) of the Securities
Exchange Act of 1934 as a result of its on-going inability to file
certain periodic reports required under Section 13(a) of the 1934
Act.
In the Proceeding the SEC seeks an order to revoke the
registration of the Company's common stock under Section 12(g) of
the 1934 Act. After discussions with representatives of the SEC,
on March 8, 2012, the Company filed with the SEC an answer in the
Proceeding and a Form 15 Certification and Notice of Termination
of Registration Under Section 12(g) of the Securities Exchange Act
of 1934 or Suspension of Duty to File Reports under Sections 13
and 15(d) of the Securities Exchange Act of 1934. The effect of
filing the Form 15 was to immediately suspend the Company's
reporting obligations under Section 15(d) of the 1934 Act and,
after a 90-day period, terminate the Company's reporting
obligations under Section 12(g) of the 1934 Act. In part, because
the Company currently lacks the resources to regain compliance
with all of its reporting obligations under the 1934 Act, the
Company believed that filing the Form 15 was in the Company's and
its shareholders' best interests as opposed to defaulting in the
Proceeding by taking no action or entering into a settlement of
the Proceeding. The Company has been informed that the Proceeding
has been stayed during the Waiting Period pending the
effectiveness of the Form 15, which is expected to become
effective on June 6, 2012. After the Form 15 becomes effective,
the Company expects that the registration of the Company's common
stock under Section 12(g) of the 1934 Act will be terminated and
that the SEC will dismiss the Company as a party to the
Proceeding.
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.
KRONOS INT'L: Moody's Upgrades CFR to 'Ba3'; Outlook Stable
-----------------------------------------------------------
Moody's Investors Service raised Kronos International, Inc.'s
(KII) Corporate Family Rating (CFR) to Ba3 from B1 and upgraded
the rating on the company's senior secured notes due 2013 one
notch to B1. The upgrade reflects the ongoing delevering at KII as
well as the improved market conditions for TiO2 which should allow
the company to maintain extremely strong financial metrics over
the next two to three years. The outlook is stable.
The following summarizes the ratings changes:
Kronos International Inc.
Ratings upgraded:
Corporate family rating -- Ba3 from B1
Probability of default rating -- Ba3 from B1
6.5% Sr Sec Notes due 2013 -- B1 (LGD5, 76%) from B2 (LGD5, 75%)
Ratings assigned:
Speculative Grade Liquidity Rating at SGL-1
Outlook: Stable
Ratings Rationale
KII's Ba3 CFR reflects improved operating performance and credit
metrics, and Moody's expectation that the current favorable TiO2
industry conditions will continue to support strong free cash flow
generation. The TiO2 industry has experienced dramatic
improvements in profitability over the past two years and could
continue to enjoy elevated margins, even with the large increases
in titanium feedstock prices being implemented in 2012. Kronos'
EBITDA margin expanded from 17% (include Moody's analytical
adjustments) for 2010 to 33% for 2011. The company also achieved
record production levels in 2011 and actual sales volumes have
recovered to pre-2008 levels. The company also paid down EUR120.8
million of its EUR400 million notes due 2014, during 2011, helping
to reduce leverage to 1.1x at December 31, 2011.
Moody's assigned a speculative grade liquidity rating of SGL-1 to
KII. Its liquidity is supported by its positive cash flow from
operations, cash balances, and availability under its EUR80
million revolving credit due October 2013. The firm generated $168
million of free cash flow in 2011, a record during the past ten
years.
The outlook is stable. In 2012, Moody's expects the company to
continue to generate credit metrics supportive of a higher rating,
but upside to Kronos' CFR is tempered by recognition that the TiO2
industry is experiencing peak cyclical conditions and by its
business profile. Moody's anticipates that the maturity of the
notes in 2013 will trigger a refinancing of the debt and that
management may increase leverage from a level that Moody's
currently views as unsustainable. However, an upgrade could be
considered after KII addresses the upcoming 2013 maturities of its
revolving credit facility and notes if KII were to maintain a
ratio of Free Cash Flow/Total Debt greater than 10% and reduce
debt below $300 million on a sustained basis.
The principal methodology used in rating Kronos International, Inc
was the Global Chemical Industry Methodology published in December
2009. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Kronos International, Inc. produces and markets TiO2 pigments in
Europe, and is a wholly owned subsidiary of Kronos Worldwide,
Inc., headquartered in Dallas, Texas. The company reported sales
of $1.4 billion for the twelve months ended December 31, 2011.
LAS VEGAS SANDS: S&P Raises Corp Credit Rating to BB+; Outlook Pos
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on the Las Vegas Sands Corp. (LVSC) family of companies to
'BB+' from 'BB'. "Aside from Las Vegas Sands Corp., the LVSC
family of rated companies includes Las Vegas Sands LLC, its
Venetian Casino Resort LLC subsidiary, and affiliate VML U.S.
Finance LLC (VML). At the same time, we removed all ratings on the
company from CreditWatch, where they were placed with positive
implications on Feb. 7, 2012. The rating outlook is positive," S&P
said.
"In addition, we revised our recovery rating on LVSC's U.S. senior
secured credit facilities to '2' from '3'. The '2' recovery rating
indicates our expectation for substantial (70% to 90%) recovery
for lenders in the event of a payment default. Our revised
recovery rating follows the recent redemption of the company's
6.375% senior notes, which shared in the security package pari
passu with obligations under the credit facilities. With the lower
amount of secured debt outstanding, this results in improved
recovery prospects for the U.S. credit facilities under our
simulated default scenario," S&P said.
"We also raised our issue-level rating on VML's $3.7 billion
senior secured credit facility to 'BB+' from 'BB', reflecting the
one-notch rise in our corporate credit rating," S&P said.
"The upgrade reflects our belief that, under our updated
intermediate-term performance expectations, LVSC will maintain
credit measures comfortably within our threshold for a 'BB+'
corporate credit rating," said Standard & Poor's credit analyst
Ben Bubeck, "even incorporating aggressive development spending
over time. Given our assessment of LVSC's business risk profile,
we would be comfortable with leverage temporarily spiking as high
as 4.5x to fund development projects, but generally consider
leverage closer to 4.0x to be in line with a 'BB+' corporate
credit rating. As of Dec. 31, 2011, our measure of LVSC's leverage
was 3x, which provided a 1x cushion relative to this threshold,
while unrestricted cash balances were nearly $4 billion."
"While additional development opportunities, whether in the U.S.
or abroad, will likely take at least a few years to come to
fruition," added Mr. Bubeck, 'we expect that LVSC will
aggressively pursue them and potentially seek multiple
opportunities at once.' Therefore, we view a leverage cushion and
large cash balances as necessary to preserve flexibility in the
event opportunities arise and/or to protect against unexpected
performance volatility."
"The positive rating outlook reflects our view that a higher
rating is possible over the next several quarters, based on our
current performance expectations. To raise the rating further
(into investment-grade status), we would be comfortable with
leverage temporarily spiking to the high-3x area to fund
development projects, but generally consider leverage closer to 3x
to be in line with a 'BBB-' corporate credit rating. In the event
of a strong ramp-up of Sands Cotai Central, we believe an upgrade
to 'BBB-' is possible, as we would expect leverage to improve to
below 2.5x by early 2013. An investment-grade rating on Las Vegas
Sands, however, would also require management to publicly
articulate a financial policy around its tolerance for leverage
that is aligned with our leverage threshold at a 'BBB-' rating. In
addition, while the timeframe within which the aforementioned
lawsuits and investigations will be resolved is unclear, as is the
extent to which any potential judgment against LVSC would impact
credit quality, these issues may weigh on ratings upside until we
have further clarity around potential judgments or they are
resolved," S&P said.
"A revision of the rating outlook to stable or a downgrade could
result from performance meaningfully below our expectations, or
from the company taking a more aggressive posture toward
additional development opportunities, resulting in a sustained
spike in leverage to above 4x," S&P said.
LATTICE INC: Acquavella Chiarelli Raises Going Concern Doubt
------------------------------------------------------------
Lattice Incorporated filed on April 2, 2012, its annual report on
Form 10-K for the fiscal year ended Dec. 31, 2011.
Acquavella, Chiarelli, Shuster, Berkower & Co., LLP, in Iselin,
N.J., expressed substantial doubt about Lattice's ability to
continue as a going concern. The independent auditors noted that
the Company requires additional working capital to meet its
current liabilities.
The Company reported a net loss of $6.06 million on $11.45 million
of revenue for 2011, compared with a net loss of $1.42 million on
$13.54 million of revenue for 2010.
The Company's balance sheet at Dec. 31, 2011, showed $5.94 million
in total assets, $7.11 million in total liabilities, and a
stockholders' deficit of $1.17 million.
A copy of the Form 10-K is available for free at:
http://is.gd/dMvlCc
Pennsauken, New Jersey-based Lattice Incorporated was formed under
the name Science Dynamics Corporation, incorporated in the State
of Delaware in May 1973 and began operations in July 1977. The
Company has been developing and delivering secure
telecommunication solutions for over 30 years. The Company
changed its name to Lattice Incorporated in February 2007.
The Company derives revenue from three primary sources:
1. Providing telecommunications services to correctional
facilities and specialized service providers who provide
telecommunication services within the industry.
2. Selling or licensing its proprietary technology.
3. Providing highly specialized engineering services to other
technology companies and government agencies.
LE-NATURE'S INC: BDO Seidman Settles $668 Million Investor Suit
---------------------------------------------------------------
Steven Melendez at Bankruptcy Law360 reports that BDO Seidman LLP
has settled an investor lawsuit claiming its audits didn't reveal
a $668 million accounting fraud at Le-Nature's Inc. that sent
multiple executives to prison, according to filings in New York
state court on April 2.
Law360 relates that Wachovia Capital Markets LLC separately paid
an undisclosed sum to Normandy Hill Master Fund LP in January to
settle its role in the suit, according to court documents cited by
Law360.
About Le-Nature's Inc.
Headquartered in Latrobe, Pennsylvania, Le-Nature's Inc. --
http://www.le-natures.com/-- made bottled waters, teas, juices
and nutritional drinks. Its brands included Kettle Brewed Ice
Teas, Dazzler fruit juice drinks and lemonade, and AquaAde
vitamin-enriched water.
Four unsecured creditors of Le-Nature's filed an involuntary
Chapter 7 petition against the Company (Bankr. W.D. Pa. Case No.
06-25454) on Nov. 1, 2006. On Nov. 6, 2006, two of Le-Nature's
subsidiaries, Le-Nature's Holdings Inc., and Tea Systems
International Inc., filed voluntary petitions for relief under
Chapter 11 of the Bankruptcy Code. Judge McCullough converted Le
Nature's Inc.'s case to a Chapter 11 proceeding. The Debtors'
cases are jointly administered. The Debtors' schedules filed with
the Court showed $40 million in total assets and $450 million in
total liabilities.
Douglas Anthony Campbell, Esq., Ronald B. Roteman, Esq., and
Stanley Edward Levine, Esq., at Campbell & Levine, LLC, represent
the Debtors in their restructuring efforts. The Court appointed
R. Todd Neilson as Chapter 11 Trustee. Dean Z. Ziehl, Esq.,
Richard M. Pachulski, Esq., Stan Goldich, Esq., Ilan D. Scharf,
Esq., and Debra Grassgreen, Esq., at Pachulski, Stang, Ziehl,
Young, Jones & Weintraub LLP, represent the Chapter 11 Trustee.
David K. Rudov, Esq., at Rudov & Stein, and S. Jason Teele, Esq.,
and Thomas A. Pitta, Esq., at Lowenstein Sandler PC, represent the
Official Committee of Unsecured Creditors. Edward S. Weisfelner,
Esq., Robert J. Stark, Esq., and Andrew Dash, Esq., at Brown
Rudnick Berlack Israels LLP, and James G. McLean, Esq., at Manion
McDonough & Lucas represent the Ad Hoc Committee of Secured
Lenders. Thomas Moers Mayer, Esq., and Matthew J. Williams, Esq.
at Kramer Levin Naftalis & Frankel LLP, represent the Ad Hoc
Committee of Senior Subordinated Noteholders.
In July 2008, the Chapter 11 plan of liquidation for Le-Nature's
took effect.
LITHIUM TECHNOLOGY: Inks Second Amendment to Cicco SPA
------------------------------------------------------
Lithium Technology Corporation, on March 31, 2012, entered into a
Second Amendment to the Securities Purchase Agreement with Cicco
Holding AG dated March 30, 2011. The Second Amendment extends the
period during which Cicco may fund the Commitment Amount under the
Notes by four weeks, until April 27, 2012. A copy of the
Amendment is available for free at http://is.gd/GwgrzI
About Lithium Technology
Plymouth Meeting, Pa.-based Lithium Technology Corporation is a
mid-volume production stage company that develops large format
lithium-ion rechargeable batteries to be used as a new power
source for emerging applications in the automotive, stationary
power, and national security markets.
The Company reported a net loss of $12.26 million on $6.06 million
of total revenue for the nine months ended Sept. 30, 2011. The
Company reported a net loss of $7.25 million on $6.35 million
of products and services sales for the year ended Dec. 31, 2010,
compared with a net loss of $10.51 million on $7.37 million of
product and services sales during the prior year.
The Company's balance sheet at Sept. 30, 2011, showed $8.83
million in total assets, $35.09 million in total liabilities and a
$26.26 million total stockholders' deficit.
Going Concern
As reported by the TCR on April 8, 2011, Amper, Politziner &
Mattia, LLP, Edison, New Jersey, after auditing the Company's
financial statements for the year ended Dec. 31, 2010, noted that
the Company has recurring losses from operations since inception
and has a working capital deficiency that raise substantial doubt
about its ability to continue as a going concern.
Bankruptcy Warning
The Form 10-Q for the quarter ended Sept. 30, 2011, noted that the
Company's operating plan seeks to minimize its capital
requirements, but the expansion of its production capacity to meet
increasing sales and refinement of its manufacturing process and
equipment will require additional capital.
The Company raised capital through the sale of securities closing
in the second quarter of 2011 and realized proceeds from the
licensing of its technology pursuant to the terms of a licensing
agreement and the sale of inventory used in manufacturing its
batteries as part of the establishment of a joint venture in the
fourth quarter of 2011, but is continuing to seek other financing
initiatives and needs to raise additional capital to meet its
working capital needs, for the repayment of debt and for capital
expenditures. Such capital is expected to come from the sale of
securities. The Company believes that if it raises approximately
$4 million in additional debt and equity financings it would have
sufficient funds to meet its needs for working capital, capital
expenditures and expansion plans through the year ending Dec. 31,
2012.
No assurance can be given that the Company will be successful in
completing any financings at the minimum level necessary to fund
its capital equipment, debt repayment or working capital
requirements, or at all. If the Company is unsuccessful in
completing these financings, it will not be able to meet its
working capital, debt repayment or capital equipment needs or
execute its business plan. In that case the Company will assess
all available alternatives including a sale of its assets or
merger, the suspension of operations and possibly liquidation,
auction, bankruptcy, or other measures. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
LOS ANGELES DODGERS: Look to Exit Bankruptcy By End of Month
------------------------------------------------------------
Maria Chutchian at Bankruptcy Law360 reports that the Los Angeles
Dodgers LLC announced Friday that they expect to emerge from their
Chapter 11 bankruptcy by the end of the month after filing an
amended reorganization plan that includes their sale to Guggenheim
Baseball Management LP for $2 billion.
Law360 relates that the sale to Magic Johnson's investment firm
was announced last week and is scheduled for a confirmation
hearing in Delaware bankruptcy court April 13. The Dodgers expect
to be out of bankruptcy by April 30.
April 13 Hearing
Los Angeles Times reported Friday that according to papers filed
in bankruptcy court, Frank McCourt gets to take home $1.588
billion from the Los Angeles Dodgers while leaving the new buyers
to inherit $412 million in team debt.
The sale agreement, according to the L.A. Times, formalized the
sale of the Dodgers to Guggenheim Baseball Management, a deal
announced last week. However, the documents revealed neither the
structure of the Guggenheim financing nor the arrangement by which
the Dodger Stadium parking lots would be owned and operated,
frustrating officials at Major League Baseball.
On March 28, 2012, the Los Angeles Dodgers and Frank McCourt
unveiled an agreement under which Guggenheim Baseball Management
LLC will acquire the Los Angeles Dodgers for $2 billion upon
completion of the closing process. Mr. McCourt and certain
affiliates of the purchasers will also be forming a joint venture,
which will acquire parking lots for an additional $150 million.
The agreement is expected to be approved by U.S. Bankruptcy Judge
Kevin Gross at an April 13 hearing.
The L.A. Times notes that after payment of the divorce settlement
and repayment of a $150 million bankruptcy financing loan to MLB,
McCourt would have about $1.3 billion. After taxes, legal fees
and other obligations, McCourt is expected to clear close to
$1 billion on the sale of a team he bought for $421 million in
2004.
The sale is scheduled to close April 30, the same day McCourt must
pay his ex-wife Jamie $131 million in a divorce settlement.
Bloomberg News reported a week before the sale was announced that
the Los Angeles Dodgers filed papers to knock out the four
identical $131 million claims filed by Jamie McCourt, ex-wife of
the team's owner Frank McCourt. The former wife's claim is based
on an agreement reached in the couple's matrimonial action in
October where Mr. McCourt agreed to pay her $131 million by April
30. The team wants the judge to toss out her claim entirely at
the April 13 hearing for approval of the Chapter 11 plan. The
plan will pay secured and unsecured creditors in full.
L.A. Times said Friday that Jamie McCourt had asked the court to
consider whether she could stake a claim to the sale proceeds
rather than wait for her ex-husband to pay her directly. In
Friday's filing, the Dodgers said they since had proposed letting
Guggenheim wire her the money directly at closing, sparing Frank
McCourt from what his attorneys called "unnecessary controversy."
About Los Angeles Dodgers
Los Angeles Dodgers LLC operates the Los Angeles Dodgers, a
professional Major League Baseball club in the Los Angeles
metropolitan area. Frank McCourt, a Boston real-estate developer
who unsuccessfully bid for the Boston Red Sox, bought the Dodgers
from Rupert Murdoch's Fox Entertainment Group, Inc. in 2004 for
$330 million. Mr. McCourt also bought the Dodgers Stadium from
Fox for $100 million.
Los Angeles Dodgers LLC filed for bankruptcy protection (Bankr.
D. Del. Lead Case No. 11-12010) on June 27, 2011, after MLB
Commissioner Bud Selig rejected a television deal with News
Corp.'s Fox Sports, leaving Mr. McCourt unable to make payroll for
June 30 and July 1. Fox Sports has exclusive cable television
rights for Dodgers games until the end of 2013 baseball season.
Chapter 11 filings were also made for LA Real Estate LLC, an
affiliated entity which owns Dodger Stadium, and three other
related holding companies.
The petition estimates assets of up to $500 million and debts of
up to $1 billion. In its schedules, the LA Dodgers baseball club
disclosed $77,963,734 in assets and $4,695,702 in liabilities. LA
Real Estate LLC disclosed $161,761,883 in assets and $0 in
liabilities.
According to Forbes, the team is worth about $800 million, making
it the third most valuable baseball team after the New York
Yankees and the Boston Red Sox.
Judge Kevin Gross presides over the case. Lawyers at Young,
Conaway, Stargatt & Taylor and Dewey & LeBoeuf LLP serve as the
Debtors' bankruptcy counsel. Epiq Bankruptcy Solutions LLC is the
claims and notice agent. Public relations specialist Kekst and
Company has been hired for crisis support. Covington & Burling
LLP serves as special counsel.
An official committee of unsecured creditors has been appointed in
the case. The panel has tapped Lazard Freres & Co. as financial
adviser and investment banker, and Morrison & Foerster LLP and
Pinckney, Harris & Weidinger, LLC as counsel.
The LA Dodgers is the 12th sports team in North America to have
sought bankruptcy protection.
The reorganization is being financed with a $150 million unsecured
loan from the Commissioner of Major League Baseball. The loan
gives the Commissioner few of the controls lenders often demanded
from bankrupt companies.
M WAIKIKI: Competing Plans to be Heard June 1
---------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that whether the 353-room Modern Honolulu hotel will
remain in the same ownership or be taken over by creditor Marriott
International Inc. will be decided in combined confirmation
hearings to begin on June 1, continue June 4-8, and pick up again
July 9-13.
Protracted hearings are required because Marriott is proposing a
reorganization plan to compete with the hotel's.
The Chapter 11 Plan of Debtor
As reported in the Troubled Company Reporter on Feb. 6, 2012, the
Debtor has filed a Chapter 11 Plan that that contemplates that
sources of cash necessary for the Debtor to pay allowed claims
will be cash on hand, cash arising from the operation or sale of
the Debtor's hotel, an exit funding of $39,195,285 from the
Davidson Trust on the Effective Date and recovery from the
prosecution of all causes of action.
The Exit Funding has two components: an exit capital contribution
in the amount of $4,500,000 in cash and the secured exit loan in
the amount of $34,695,285. In exchange for the exit capital
contribution, the Davidson Trust will receive 19% of the New
Senior Equity in the reorganized Debtor.
A copy of the Disclosure Statement is available for free at:
http://bankrupt.com/misc/mwailiki.doc516.pdf
The Chapter 11 Plan of Marriott
Marriott has filed its own Chapter 11 plan for the Debtor.
According to the Disclosure Statement dated Feb. 27, 2012, the
Plan provides for full payment in cash of allowed claims for all
classes, except for equity interests.
The Plan is financed by the Proponents' proposed purchase of the
estate assets. Specifically, on the Effective Date, the
Proponents will transfer to the estate:
i) cash in an amount to be determined by the Proponents, in
their sole discretion, by or before the Effective Date that
is sufficient to fund the Plan; and
ii) the release of the Marriott Secured and Unsecured Claims;
the transfer will be in contemporaneous exchange for the
estate's transfer to Marriott all estate assets, including
claims that have been or may be brought by the estate before
the Bankruptcy Court or otherwise.
In the event that Marriott is not the successful purchaser, the
Marriott secured and unsecured claims will not be waived or
released.
A full-text copy of the Marriott Disclosure Statement is available
for free
at http://bankrupt.com/misc/M_WAIKIKI_ds.pdf
About M Waikiki
M Waikiki owns the Modern Honolulu, a world-class, luxury hotel
property located close to Waikiki Beach in Hawaii. The hotel is
being managed by Modern Management Services LLC, an affiliate of
Aqua Hotels and Resorts.
M Waikiki is a Hawaii limited liability company with its principal
place of business located in San Diego, California. It is a
special purpose entity, having roughly 75 indirect investors,
which was formed to acquire the Hotel.
The Company filed for Chapter 11 protection (Bankr. D. Hawaii Case
No. 11-02371) on Aug. 31, 2011. Judge Robert J. Faris presides
over the case. Patrick J. Neligan, Esq., and James P. Muenker,
Esq., at Neligan Foley LLP, in Dallas, Tex.; Simon Klevansky,
Esq., Alika L. Piper, Esq., and Nicole D. Stucki, Esq., at
Klevansky Piper, LLP, in Honolulu, Hawaii, are the attorneys to
the Debtor. The Debtor tapped XRoads Solutions Group, LLC, and
Xroads Case Management Services, LLC, as its financial and
restructuring advisor. The Debtor disclosed $216,116,142 in
assets and $135,085,843 in liabilities as of the Chapter 11
filing.
Modern Management is represented by Christopher J. Muzzi, Esq.,
at Moseley Biehl Tsugawa Lau & Muzzi LLC.
Marriott Hotel Services, which used to provide management
services, is represented by Susan Tius, Esq., at Rush Moore LLP
LLP, and Carren B. Shulman, Esq., at Sheppard Mullin Richter &
Hampton LLP.
MAGELLAN HEALTH: S&P Raises Counterparty Credit Rating From 'BB+'
-----------------------------------------------------------------
Standard & Poor's Rating Services raised its long-term
counterparty credit rating on Magellan Health Services Inc. to
'BBB-' from 'BB+'. The outlook is stable.
"The upgrade reflects our recognition of Magellan's growing
revenue base, diversifying business profile, consistent operating
performance, and a capital structure that is very conservative for
the rating level. In addition, the company has strong liquidity
and financial flexibility. Offsetting these positive factors are
Magellan's client concentration and an acquisition-oriented growth
strategy," S&P said.
"We expect Magellan's revenue to grow significantly as evidenced
by an expected increase in revenue to $3.3 billion in 2012 from
$2.8 billion in 2011 (about 17%). The company's business profile
is also more diversified compared with recent years," S&P said.
"The outlook is stable. We expect the company to maintain a stable
earnings profile on an expanded revenue base and to maintain a
very conservative structure with a modest amount of debt. We would
consider raising the rating on Magellan only if we were to see a
decline in client concentration, defined as the top-10 customers
constituting less than 50% of total revenues, coupled with stable
segments profits in excess of $300 million and a modest debt
level," S&P said.
"Conversely, we could lower the rating if contract terminations or
margin pressures result in EBITDA of less than $150 million. In
addition, we could lower the rating if a combination of debt
issuance and declining operating performance resulted in a debt-
to-EBITDA ratio of more than 2.0x," S&P said.
MENASHA, WI: Moody's Upgrades GOULT Rating to 'Ba2'
---------------------------------------------------
Moody's Investors Service has upgraded to Ba2 from B1 the rating
on the City of Menasha's (WI) outstanding rated general obligation
unlimited tax debt. Concurrently, Moody's has assigned an stable
outlook. The city has $43.8 million of outstanding general
obligation debt, of which $20.6 million is rated by Moody's.
Summary Rating Rationale
The outstanding bonds are secured by the city's general obligation
unlimited tax pledge. The upgrade to Ba2 reflects the finalization
of the sale of the city's electric utility to Wisconsin Public
Power Inc. (WPPI, rated A1/stable outlook) and the completed
settlement with note holders regarding the city's appropriation-
backed Steam Utility Revenue Bond Anticipation Notes (BANs),
Series 2005 and 2006, on which the city defaulted in September
2009. The Ba2 rating reflects the resolution of the default per
the terms of the settlement but also takes into consideration the
fact that the recovery rate for investors was 75% and the city
does not plan to make any additional payments to note holders. The
upgrade also takes into consideration the city's elevated debt
burden with sizeable debt service payments required in each of the
next three years. The stable outlook reflects Moody's expectation
that the city's tax base and financial position will not
materially change over the medium term.
STRENGTHS
- Settlement with bondholders and sale of electric utility
provides some stability to the city's current and future financial
position
- History of special assistance from the State of Wisconsin
(general obligation rated Aa2/stable outlook) for borrowing
mitigates the city's need to access the capital markets to fund
capital projects
- Despite recent declines, General Fund reserve levels are
adequate relative to the size of the city's operating budget
CHALLENGES
- Elevated debt burden and high debt service expenditures as a
percent of budget
- Regional economy characterized by manufacturing concentration
and relatively weak socio-economic indices
- City's decision to not repay in full a debt obligation secured
by its appropriation pledge, which is somewhat offset by its
demonstrated commitment to honoring general obligation bondholders
WHAT COULD CHANGE THE RATING UP:
- Expansion of the city's tax base coupled with improved resident
income levels
- Material increases to the city's available reserves and
liquidity
- Significant reduction in the city's debt levels relative to tax
base and budget size
WHAT COULD CHANGE THE RATING DOWN:
- Failure to honor appropriation pledge for future debt
- Involvement in costly enterprises, particularly those that are
non-essential to municipal operations
PRINCIPAL METHODOLOGY USED
The principal methodology used in this rating was General
Obligation Bonds Issued by U.S. Local Governments published in
October 2009.
METHOD ART: Cash Collateral Hearing Set for April 13
----------------------------------------------------
Method Art Corporation will return to the Bankruptcy Court on
April 13 at 10:00 a.m. to seek authority to use cash collateral
of:
* Stancorp, which holds a first priority security interest
in the Debtor's real property located at 1700 E. Dyer
Road, Santa Ana, California, on account of $894,572 in
secured debt. The Debtor said the Dyer Property is worth
$1,800,000;
* Stancorp, which holds a first priority security interest in
the Debtor's real property located at 2405 Pyramid Way,
Sparks, Nevada, on account of $937,713 in secured debt.
The Debtor said the Pyramid Property is worth $900,000;
* Stancorp, which holds a first priority security interest
in the Debtor's real property located at 6151 Lakeside
Drive, Reno, Nevada, on account of $923,485 in secured
debt. The Debtor said the Lakeside Property is worth
$2,400,000;
* Stancorp, which holds a first priority security interest
in the Debtor's real property located at 2598 Windmill
Parkway, Henderson, Nevada, on account of $1,548,367.
The Debtor said the Windmill Property is worth $1,500,000.
* Clarica Life Insurance Company, which holds a first
priority security interest in the Debtor's real property
located at 9480 & 9490 Gateway Drive, Reno, Nevada, on
account of $1,823,445 in secured debt. The Debtor said
the Gateway Property is worth $1,800,000; and
* The Life Insurance Company of the Southwest, which holds
a first priority security interest in the Debtor's real
property located at 940 Columbia Avenue, Riverside,
California, on account of $1,448,771 on a first priority
deed of trust, and $1,440,516 on a second priority deed
of trust, both against the Columbia Property. The Debtor
said the Property is worth $5,400,000.
As adequate protection for the use of:
* the Dyer Property, Method Art offers Stancorp adequate
protection in the form of an equity cushion of over 100%;
and continued monthly payments of principal, interest and
impounds in accord with the current contractual terms,
which is currently $7,379 per month. The Debtor will also
continue to maintain insurance on the Dyer Property; and
Stancorp's cash collateral is being used to maintain and
operate the Dyer Property by paying taxes, insurance and
other operating expenses, plus pay Stancorp its regular
contractual payment, which all together averages roughly
$7,770 per month;
* the Pyramid Property, Method Art offers STANCORP adequate
protection in the form of continued monthly payments of
principal, interest and impounds in accord with the
current contractual terms, which is currently $8,725 per
month. The Debtor also will continue to maintain insurance
on the Pyramid Property. STANCORP's cash collateral is
being used to maintain and operate the Pyramid Property
by paying taxes, insurance and other operating expenses,
plus pay STANCORP its regular contractual payment, which
all together averages approximately $11,240 per month;
* the Lakeside Property, Method Art offers STANCORP adequate
protection in the form of an equity cushion of over 100%;
and monthly net rents generated from the Lakeside Property,
after paying all taxes, insurance and other operating
expenses, estimated to average $7,455 per month. The
Debtor also will continue to maintain insurance on the
Lakeside Property. STANCORP's cash collateral is being
used to maintain and operate the Lakeside Property and
projects monthly expenses of $9,045;
* the Windmill Property, Method Art offers STANCORP adequate
protection in the form of continued monthly payments of
principal, interest and impounds in accord with the current
contractual terms, which is currently $14,814 per month.
Method Art also will continue to maintain insurance on the
Windmill Property. STANCORP's cash collateral is being
used to maintain and operate the Windmill Property by
paying taxes, insurance and other operating expenses, plus
pay STANCORP its regular contractual payment, which all
together averages approximately $15,564 per month.
* the Gateway Property, Method Art offers CLARICA adequate
protection in the form of monthly payments of the net
rents generated after paying necessary operating expenses,
including taxes and insurance, estimated to be $6,015 per
month. Method Art will also continue to maintain
insurance on the Gateway Property. CLARICA's cash
collateral is being used to maintain and operate the
Gateway Property by paying taxes, insurance and other
operating expenses averaging $6,380 per month; and
* the Columbia Property, Method Art offers LICOTS adequate
protection in the form an equity cushion of over 100%;
continued monthly payments of principal, interest and
impounds in accord with the current contractual terms,
which is currently $18,430.34 per month on the first
mortgage, and $11,646.43 per month on the second mortgage,
for a total of $30,079.77 per month. Method Art will also
continue to maintain insurance on the Columbia Property.
LICOTS's cash collateral is being used to maintain and
operate the Columbia Property by paying taxes, insurance
and other operating expenses, plus pay LICOTS its regular
contractual payment, which all together averages
approximately $32,010 per month.
Method Art Corporation filed a bare-bones Chapter 11 petition
(Bankr. D. Nev. Case No. 12-50745) in its home-town in Reno,
Nevada, on April 1, 2012. The Debtor disclosed $14.5 million in
assets and $11.7 million in debts in its schedules. The Debtor
owns six properties in Nevada and California. The properties are
valued $13.8 million and secure debt totaling $10.9 million.
Judge Bruce T. Beesley presides over the case. Kevin A. Darby,
Esq., at Darby Law Practice, Ltd., serves as the Debtor's counsel.
The petition was signed by Brynn Miner, who has the role of
director, president, secretary and treasurer.
MF GLOBAL: Bankruptcy Cues Fitch to Withdraw Ratings
----------------------------------------------------
Fitch Ratings has withdrawn the following ratings assigned to MF
Global Holdings Ltd.
-- Long-term Issuer Default Rating (IDR) of 'D'
-- Short-term IDR of 'D'
-- Senior debt rating of 'C/RR5'
-- Preferred stock rating of 'C/RR6'
The ratings withdrawals are a result of the bankruptcy of the
rated entity.
MGM RESORTS: Tracinda Terminates Credit Agreement With BofA
-----------------------------------------------------------
Tracinda Corporation and Kirk Kerkorian filed with the U.S.
Securities and Exchange Commission amendment no. 40 to their
Schedule 13D to disclose that Tracinda has terminated its credit
facility with Bank of America, N.A.
Tracinda entered into a credit agreement, dated April 15, 2008,
and amended, for a $600 million revolving credit facility with
Bank of America, as agent, and Bank of America Securities LLC, as
the sole lead arranger and sole and exclusive book manager.
On April 15, 2008, in connection with the Credit Agreement,
Tracinda entered into a pledge agreement, which was amended and
restated on June 25, 2008, with BOA for the pledge of collateral
to secure borrowings under the Credit Agreement. On July 3, 2008,
Tracinda pledged 50,000,000 shares of Common Stock of the Company
as collateral under the Pledge Agreement. Pursuant to the Pledge
Agreement, all dividends paid on the collateral pledged under the
Pledge Agreement in the form of capital stock will be pledged as
additional collateral and, in the event of a default under the
Credit Agreement, all voting rights and rights to receive
dividends with respect to the Pledged Collateral will become
vested in BOA.
In connection with the Pledge Agreement, BOA was appointed as the
proxyholder for all Pledged Collateral, with the right to exercise
all voting rights with respect to such Pledged Collateral only
upon an event of default under the Credit Agreement. Upon an
event of default under the Credit Agreement, BOA has the right,
among others, to transfer all Pledged Collateral into its name or
to sell or dispose of such Pledged Collateral.
As of April 3, 2012, Tracinda beneficially owns 91,173,744 shares
of common stock of MGM Resorts representing 18.7% of the shares
outstanding, based on 488,852,817 shares of common stock issued
and outstanding as of Feb. 20, 2012.
A copy of the amended filing is available for free at:
http://is.gd/uNpG8a
About MGM Resorts
MGM Resorts International (NYSE: MGM) --
http://www.mgmresorts.com/-- has significant holdings in gaming,
hospitality and entertainment, owns and operates 15 properties
located in Nevada, Mississippi and Michigan, and has 50%
investments in four other properties in Nevada, Illinois and
Macau.
The Company reported net income of $3.23 billion in 2011 and a net
loss of $1.43 billion in 2010.
The Company's balance sheet at Dec. 31, 2011, showed
$27.76 billion in total assets, $17.88 billion in total
liabilities, and $9.88 billion in total stockholders' equity.
Bankruptcy Warning
In the Form 10-K for the year ended Dec. 31, 2011, the Company
said that it any default under the senior credit facility or the
indentures governing the Company's other debt could adversely
affect its growth, its financial condition, its results of
operations and its ability to make payments on its debt, and could
force the Company to seek protection under the bankruptcy laws.
* * *
As reported by the TCR on Nov. 14, 2011, Standard & Poor's Ratings
Services raised its corporate credit rating on MGM Resorts
International to 'B-' from 'CCC+'. In March 2012, S&P revised
the outlook to positive from stable.
"The revision of our rating outlook to positive reflects strong
performance in 2011 and our expectation that MGM will continue to
benefit from the improving performance trends on the Las Vegas
Strip," S&P said.
In March 2012, Moody's Investors Servie affirmed its B2 corporate
family rating and probability of default rating. The affirmation
of MGM's B2 Corporate Family Rating reflects Moody's view that
positive lodging trends in Las Vegas will continue through 2012
which will help improve MGM's leverage and coverage metrics,
albeit modestly. Additionally, the company's declaration of a $400
million dividend ($204 million to MGM) from its 51% owned Macau
joint venture due to be paid shortly will also improve the
company's liquidity profile. The ratings also consider MGM's
recent bank amendment that resulted in about 50% of its
$3.5 billion senior credit facility being extended one year from
2014 to 2015.
MOMENTIVE PERFORMANCE: Moody's Corrects March 15 Ratings Release
----------------------------------------------------------------
Moody's Investors Service issued a correction on April 6, 2012, to
a March 15, 2012 press release on Momentive Performance Materials,
Inc (MPM). Specifically, the fifth through ninth lines under
Rating List have been corrected to read as follows:
Guaranteed senior secured term loan due 2013 at Ba3 (LGD2, 12%)*
Guaranteed senior secured revolver due 2014 at Ba3 (LGD2, 12%)
Guaranteed senior secured term loan due 2015 at Ba3 (LGD2, 12%)
Guaranteed senior secured 2nd lien notes due 2014 at B2 (LGD3,
35%)
Guaranteed senior unsecured notes due 2021 at Caa1 (LGD4, 58%)
The March 15 release was reported by The Troubled Company Reporter
on March 19, 2012, which related that Moody's reiterated its Ba3
rating on the guaranteed senior secured first lien term loan due
May 5, 2015 of Momentive Performance Materials Inc. (MPM).
Proceeds from the $175 million expansion to the term loan will be
used to fund the repayment of the remaining guaranteed senior
secured first lien term loans due December 4, 2013. The new debt
will be issued pursuant to the accordion provisions of the
existing senior secured credit facilities which will mature on May
5, 2015. Moody's also adjusted the LGD assessments on the
outstanding debt as a result of modest changes to the company's
debt balances over the past year. The company's outlook is stable.
NATIONAL QUALITY: Reports $2.74-Mil. Net Income in 2010
-------------------------------------------------------
National Quality Care, Inc., filed on April 3, 2012, its annual
report for the fiscal year ended Dec. 31, 2010.
Gumbiner Savett Inc., in Santa Monica, California, expressed
substantial doubt about National Quality's ability to continue as
a going concern. The independent auditors noted that the Company
has suffered recurring losses and negative cash flows from
operations.
The Company reported net income of $2.74 million for 2010,
compared with net income of $155,849 for 2009.
The Company had no revenues from operations for the years ended
Dec. 31, 2010, and 2009; however, the Company generated revenue
from the sale of the Company's technology rights during 2010.
Income from continuing operations was $764,637 for the year ended
Dec. 31, 2010, as compared to income from continuing operations of
$265,058 for the year ended Dec. 31, 2009, due primarily to the
gain from legal settlement, net of income taxes, in 2010.
Income from discontinued operations was $1.98 million for the year
ended Dec. 31, 2010, as compared to a loss from discontinued
operations of $109,209 for the year ended Dec. 31, 2009, due
primarily to the gain from the sale of assets, net of income
taxes, in 2010.
The Company's balance sheet at Dec. 31, 2010, showed $3.27 million
in total assets, $3.19 million in total liabilities, and
stockholders' equity of $79,180.
A copy of the Form 10-K is available for free at:
http://is.gd/oMvnmy
The Company reported a net loss of $54,744 for the three months
ended Sept. 30, 2010, a net loss of $70,619 for the three months
ended June 30, 2010, and net income of $2,996,313 for the three
months ended March 31, 2010.
A copy of the Form 10-Q for the three months ended Sept. 30, 2010,
is available for free at http://is.gd/GudVhg
A copy of the Form 10-Q for the three months ended June 30, 2010,
is available for free at http://is.gd/RdGnG1
A copy of the Form 10-Q for the three months ended March 31, 2010,
is available for free at http://is.gd/RHK0fB
About National Quality Care
Los Angeles, Calif.-based National Quality Care, Inc., was, prior
to the sale of substantially all its assets on March 19, 2010, a
research and development company. Its platform technology was a
wearable artificial kidney for dialysis and other medical
applications (the "Wearable Kidney"). This device treats the
blood of patients through a pulsating, dual-chambered pump.
Continuous dialysis has always been possible for patients who are
able to make several weekly visits to a dialysis clinic to be
attached to a large machine for three to four hours at a time.
With a wearable artificial kidney, patients would be able to have
24-hour dialysis, seven days a week, without having to spend long
hours attached to a large machine at a clinic, allowing them to
maintain a reasonable life style.
NCI BUILDING: Moody's Revises Outlook on 'B3' CFR to Stable
-----------------------------------------------------------
Moody's Investors Service revised the rating outlook for NCI
Building Systems, Inc. to stable from negative and affirmed all of
the company's existing ratings, including the B3 corporate family
and probability of default ratings and the Caa1 rating for the
company's senior secured notes due in 2014.
The following rating actions were taken:
- Corporate Family Rating affirmed at B3
- Probability of Default Rating affirmed at B3
- $130.2 million Senior Secured Notes due April 2014 affirmed at
Caa1 (LGD4, 64%)
Rating Rationale
The change in rating outlook to stable from negative reflects
NCI's ability to return to profitability on an operating income
basis, which Moody's expects to continue as demand in its primary
end markets slowly strengthens. The outlook change is supported by
recent industry data pointing to increased billings in the non-
residential construction sector, which should translate into
continued year-over-year revenue growth and an adjusted EBITA run
rate of close to $40 million over the next 12 to 18 months..
NCI's B3 corporate family rating reflects the company's weak,
albeit improved, operating profitability and cash flow generation,
high adjusted debt leverage, and Moody's expectations for only a
modest recovery in non-residential construction over the next 12
to 18 months. The rating also considers the company's low level of
absolute operating profits, which remains significantly below pre-
recession levels. In addition, NCI remains exposed to steel price
volatility and the potentially negative impact of the rising cost
of steel (which comprises about 70% of NCI's cost of sales) on the
company's operating margins. However, the rating also considers
NCI's adequate liquidity, supported by a reasonably strong
unrestricted cash balance and an undrawn revolving credit
facility. The lack of near-term debt maturities is also a credit
positive and provides financial flexibility while the company
awaits a significant recovery in its end markets. Finally, the
rating reflects NCI's strong market position, nationwide presence
and vertically-integrated business model.
The ratings and/or outlook could improve if NCI is able to
generate adjusted EBITA margins greater than 3.5% and adjusted
EBITA-to-interest expense approaching 1.5x on a sustained basis.
Also, if NCI is able to reduce adjusted debt-to-EBITDA below 5.5x,
the ratings may be considered for an upgrade.
The ratings may come under pressure if NCI reports operating
losses on a trailing 12-month basis, generates adjusted EBITA-to-
interest expense below 0.5x or maintains an adjusted debt-to-
EBITDA above 6.0x. Also, if the company begins generating negative
adjusted free cash flow, engages in material debt-financed
acquisitions, or if conditions in the non-residential construction
sector again deteriorate, the rating could be lowered.
The principal methodology used in rating NCI 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.
NCI Building Systems, Inc. is one of North America's largest
integrated manufacturers of metal products for the nonresidential
building industry. During the trailing 12 months ended January 29,
2012, the company generated revenues and Moody's-adjusted EBITDA
of $1.0 billion and $60 million, respectively. Clayton, Dubilier &
Rice, through its investment funds, owns approximately 70% of NCI
as of January 29, 2012.
NET TALK.COM: Enters Into $500,000 Senior Secured Debenture
-----------------------------------------------------------
Net talk.com, Inc., has executed a $500,000, 10% Senior Secured
Debenture due June 30, 2012, from an accredited institutional
investor. Proceeds from the debenture will be used for marketing,
general operations and defending patent infringements. A copy of
the Debenture is available for free at http://is.gd/nh9JiR
About Net Talk.com
Based in Miami, Fla., Net Talk.com, Inc., is a telephone company,
who provides, sells and supplies commercial and residential
telecommunication services, including services utilizing voice
over internet protocol technology, session initiation protocol
technology, wireless fidelity technology, wireless maximum
technology, marine satellite services technology and other similar
type technologies.
The Company reported a net loss of $26.17 million $2.72 million of
revenue for the year ended Sept. 30, 2011, compared with a net
loss of $6.30 million on $737,498 of revenue during the prior
year.
The Company's balance sheet at Dec. 31, 2011, showed $7.64 million
in total assets, $9.80 million in total liabilities, $10.38
million in redeemable preferred stock, and a $12.54 million total
stockholders' deficit.
NEWPAGE CORP: Committee Seeks Lien-Related Extension
----------------------------------------------------
BankruptcyData.com reports that NewPage's official committee of
unsecured creditors filed with the U.S. Bankruptcy Court a motion
to extend the period to:
(A) challenge the validity, enforceability, perfection and
extent of first lien notes, obligations and liens; and
(B) assert claims and causes of action against first lien
notes parties and granting related relief, pursuant to
Bankruptcy Code Section 105(a), Bankruptcy Rule 9006(b),
Local Rule 9006-2 and Paragraph 26 of the final D.I.P.
order.
The committee asserts, "It is important for the Court to consider
what this motion is, and what this motion is not about. This is a
simple routine motion to extend the challenge period for 45 days,
an extension which has already been consented to by two out of the
three secured lender groups. This is not a motion seeking standing
to assert claims against the First Lien Group."
About NewPage Corp.
Headquartered in Miamisburg, Ohio, NewPage Corporation was the
leading producer of printing and specialty papers in North
America, based on production capacity, with $3.6 billion in net
sales for the year ended Dec. 31, 2010. The company's product
portfolio is the broadest in North America and includes coated
freesheet, coated groundwood, supercalendered, newsprint and
specialty papers. These papers are used for corporate collateral,
commercial printing, magazines, catalogs, books, coupons, inserts,
newspapers, packaging applications and direct mail advertising.
NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan,
Minnesota, Wisconsin and Nova Scotia, Canada. These mills have a
total annual production capacity of roughly 4.1 million tons of
paper, including roughly 2.9 million tons of coated paper, roughly
1.0 million tons of uncoated paper and roughly 200,000 tons of
specialty paper.
NewPage, along with affiliates, filed Chapter 11 bankruptcy
protection (Bankr. D. Del. Lead Case No. 11-12804) on Sept. 7,
2011. Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and
Philip M. Abelson, Esq., Dewey & Leboeuf LLP, in New York, serve
as counsel. Laura Davis Jones, Esq., at Pachulski Stang Ziehl &
Jones LLP, in Wilmington, Delaware, serves as co-counsel. Lazard
Freres & Co. LLC is the investment banker, and FTI Consulting Inc.
is the financial advisor. Kurtzman Carson Consultants LLC is the
claims and notice agent. In its balance sheet, the Debtors
disclosed $3.4 billion in assets and $4.2 billion in total
liabilities as of June 30, 2011.
At an organizational meeting of creditors held on Sept. 21, 2011,
the Committee selected Paul Hastings LLP as its bankruptcy
counsel and Young Conaway Stargatt & Taylor, LLP to act as its
Delaware and conflicts counsel.
NewPage prevailed over most objections from the official
creditors' committee and won agreement from the bankruptcy judge
on final approval of $600 million in secured financing.
Moody's Investors Service assigned a Ba2 rating to the
$350 million first-out revolving debtor-in-possession credit
facility and a B2 rating to the $250 million second-out debtor-in-
possession term loan for NewPage.
NEXICORE SERVICES: Paragon Advised in Sale to Avnet
---------------------------------------------------
Paragon Capital Partners, LLC announced that it advised in the
sale of substantially all of the operating assets of Hartford
Computer Group, Inc. and its subsidiary Nexicore Services LLC to
Avnet, Inc. through a Section 363 sale process in the U.S.
Bankruptcy Court in Chicago. Nexicore was one of the leading
providers of repair and installation services in North America for
consumer electronics and computers, operating in three
complementary business lines including depot repair, onsite repair
and installation, and spare parts management.
"This transaction represents a great outcome for Nexicore and its
key constituencies, while further strengthening Avnet's
capabilities in aftermarket services," said Michael Levy, Partner,
Paragon Capital Partners.
Paragon Capital Partners, LLC served as Nexicore's investment
banker, and Katten Muchin Rosenman LLP served as Nexicore's legal
advisor in connection with this transaction.
About Paragon Capital Partners
Paragon Capital Partners is a merchant banking firm that provides
top-tier strategic and financial advice in connection with mergers
and acquisitions, exclusive sales, private placements, financings,
restructurings and bankruptcy-related transactions. Paragon is
committed to combining dedicated senior-level attention with
execution excellence, industry knowledge and an intense focus on
achieving each client's objectives. Additional information can be
found at http://www.paragoncp.com/
About Nexicore Services
Schaumburg, Illinois-based Hartford Computer Hardware Inc. and its
affiliated entities are one of the leading providers of repair and
installation services in North America for consumer electronics
and computers. Hartford Computer Hardware operates in three
complementary business lines: parts distribution and repair, depot
repair, and onsite repair and installation. Products serviced
include laptop and desktop computers, commercial computer systems,
flat-screen television, consumer gaming units, printers,
interactive whiteboards, peripherals, servers, POS devices, and
other electronic devices. Hartford Computer Hardware, though all
U.S. companies, operates a significant portion of their business
in Markham, Ontario, Canada.
Hartford Computer Hardware and three units filed for Chapter 11
bankruptcy (Bankr. N.D. Ill. Lead Case No. 11-49744) on Dec. 12,
2011. The affiliates are Hartford Computer Group Inc. (Case No.
11-49750); Hartford Computer Government Inc. (Case No. 11-49752)
and Nexicore Services LLC (Case No. 11-49754). Judge Pamela S.
Hollis oversees the case. John P. Sieger, Esq., Paige E. Barr,
Esq., and Peter A. Siddiqui, Esq., at Katten Muchin Rosenman LLP,
serve as the Debtors' counsel. The Debtors' investment banker is
Paragon Capital Partners, LLC; the special counsel is Thornton
Grout Finnigan LLP; and the notice and claims agent is Kurtzman
Carson Consultants LLC. In its petition, Hartford Computer
Hardware estimated $50 million to $100 million in assets and
debts. The petitions were signed by Brian Mittman, chief
executive officer.
Hartford Computer Hardware Inc. obtained Court permission to act
as the foreign representative of the Debtors in Canada in order to
seek recognition of the Chapter 11 case on the Debtors' behalf,
and request the Ontario Superior Court of Justice (Commercial
List) to lend assistance to the Bankruptcy Court in protecting the
Debtors' property.
Avnet Inc., proposed buyer for Nexicore and HCG, is represented by
Frank M. Placenti, Esq., at Squire, Sanders & Dempsey L.L.P.
Delaware Street, the DIP lender, is represented in the case by
Landon S. Raiford, Esq., and Michael S. Terrien, Esq., at Jenner &
Block. Matthew J. Botica, Esq., and Nancy G. Everett, Esq., at
Winston & Strawn LLP, argue for lenders ARG Investments, Enable
Systems, Inc., MRR Venture LLC, SKM Equity Fund II, L.P. and SKM
Investment Fund II.
NOBILITY HOMES: Receives NASDAQ Notice of Non-Compliance
--------------------------------------------------------
Nobility Homes, Inc. received letters from the staff of the
Listing Qualifications Department of The NASDAQ Stock Market LLC
stating that the Company is not in compliance with NASDAQ Listing
Rule 5250(c)(1) because the Company did not timely file its Form
10-Q reports for the periods ended Aug. 6, 2011 and Feb. 4, 2012
(the "Form 10-Qs") and Form 10-K for the year ended November 5,
2011 (the "Form 10-K) with the Securities and Exchange Commission
(the "SEC"). As a result of these filing delays, the Staff's
letter indicated that trading in the Company's securities would be
suspended unless the Company timely requests a hearing before a
NASDAQ Listing Qualifications Panel and requests that the Panel
stay any suspension action pending the conclusion of the hearing
process.
Accordingly, the Company intends to timely request a hearing
before the Panel. In connection with that request, the Company
will ask that the Panel extend the stay of the suspension action
until the conclusion of the hearing process. Pursuant to the
NASDAQ Listing Rules, the Panel has the discretion to extend the
stay of the suspension action and to grant the Company continued
listing pending its return to compliance for a period of time not
to exceed Sept. 19, 2012.
The Company is reviewing its accounting treatment regarding
valuation of its inventory of pre-owned manufactured homes for
prior reporting periods with the staff of the SEC. Until the SEC
staff has completed its review of the Company's accounting
treatment, the Company is unable to file the Form 10-Qs and Form
10-K.
NORCRAFT COS: S&P Keeps 'B' Corp. Credit Rating; Outlook Negative
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
Eagan, Minn.-based Norcraft Cos. to negative from stable. "At the
same time, we affirmed our ratings on the company, including the
'B' corporate credit rating," S&P said.
"The rating outlook revision reflects our view that operating
difficulties could stem from Norcraft's exposure to DirectBuy, its
largest customer," said Standard & Poor's credit analyst Megan
Johnston.
"DirectBuy, a U.S. consumer buying club, has faced declining
membership levels as well as legal issues regarding its sales
practices. Standard & Poor's recently withdrew DirectBuy's rating
after lowering it to 'D' in February because of a missed interest
payment as the company continues to seek a restructuring. Although
Norcraft's sales to DirectBuy declined to 13% of sales in 2011, or
approximately $35 million, from 16% of sales in 2010, or
approximately $42 million, and continued to decline to 10% of
sales in the fourth quarter of 2011, Standard & Poor's is
concerned that Norcraft's profitability and liquidity could suffer
if DirectBuy's financial condition continues to deteriorate," S&P
said.
"The rating outlook is negative. Because of the still-weak
operating environment, Standard & Poor's believes operating
conditions for Norcraft will remain challenging over the next
several quarters. We project that the ratio of debt to EBITDA
could be about 7x over the next year and interest coverage may be
below 1.5x. This is because of our expectation that sales and
EBITDA will not materially improve over 2011 levels. Operating
difficulties stemming from the company's exposure to DirectBuy
could potentially strain profitability and liquidity further," S&P
said.
"We could lower the ratings on Norcraft if DirectBuy's financial
condition continues to deteriorate, leading the company to use
cash and revolver borrowings to fund operating losses, resulting
in a drop in liquidity to materially less than the $36 million of
current cash on hand and revolver availability," S&P said.
"We could revise the outlook to stable if construction end markets
and repair and remodeling spending recover more quickly than we
currently expect, such that credit measures improve to be more in
line with the 'B' rating. We could revise the outlook to stable if
adjusted leverage improves to about 5x and interest coverage
increases to more than 2x. Additionally, we could revise the
outlook to stable if Norcraft is able to increase its market share
with other dealers or cut costs to replace potential future lost
sales and profits from DirectBuy," S&P said.
ORAGENICS INC: Koski Family Discloses 81.5% Equity Stake
--------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Koski Family Limited Partnership and its
affiliates disclosed that, as of March 23, 2012, they beneficially
own 11,686,342 shares of common stock of Oragenics, Inc.,
representing 81.5% of the shares outstanding. A copy of the
amended filing is available for free at http://is.gd/nsvxUV
About Oragenics Inc.
Tampa, Fla.-based Oragenics, Inc. -- http://www.oragenics.com/--
is a biopharmaceutical company focused primarily on oral health
products and novel antibiotics. Within oral health, Oragenics is
developing its pharmaceutical product candidate, SMaRT Replacement
Therapy, and also commercializing its oral probiotic product,
ProBiora3. Within antibiotics, Oragenics is developing a
pharmaceutical candidate, MU1140-S and intends to use its
patented, novel organic chemistry platform to create additional
antibiotics for therapeutic use.
The Company reported a net loss of $5.73 million on $1.04 million
of net revenues for the nine months ended Sept. 30, 2011, compared
with a net loss of $5.63 million on $1.01 million of net revenues
for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed $1.22
million in total assets, $7.80 million in total liabilities,
and a $6.58 million total shareholders' deficit.
As reported in the TCR on April 5, 2011, Kirkland, Russ, Murphy &
Tapp, P.A., in Clearwater, Fla., expressed substantial doubt about
Oragenics' ability to continue as a going concern, following the
Company 2010 results. The independent auditors noted that the
Company has incurred recurring operating losses, negative
operating cash flows and has an accumulated deficit.
ORCKIT COMMUNICATIONS: NASDAQ Grants Request for Continued Listing
------------------------------------------------------------------
Orckit Communications Ltd. disclosed that a NASDAQ Listing
Qualifications Panel has granted the Company's request for
continued listing and for a transfer of its listing to The NASDAQ
Capital Market. Accordingly, the Company's ordinary shares will
begin trading on The NASDAQ Capital Market effective with the open
of business on Friday, March 30, 2012. The transfer of the
Company's listing from The NASDAQ Global Market to The NASDAQ
Capital Market should have no impact on trading in the Company's
ordinary shares, and the Company's ordinary shares will continue
to trade under the symbol ORCT. In addition, the transfer will
not impact the Company's listing on the Tel Aviv Stock Exchange.
The Company's continued listing on The NASDAQ Capital Market is
subject to certain conditions, including the Company's filing of a
Form 6-K with the Securities and Exchange Commission by June 27,
2012 indicating that the Company satisfies the applicable $2.5
million stockholders' equity requirement for continued listing on
the Capital Market, and the submission of financial projections
for the Panel's review evidencing the Company's ability to sustain
compliance with that requirement through the end of 2012. The
Company also remains subject to a grace period through Aug. 13,
2012, by which date the Company must evidence compliance with
NASDAQ's minimum bid price requirement of $1.00 per share. In the
event the Company does not regain compliance with the bid price
requirement by that date, it may be eligible for an additional
180-day compliance period, provided it meets all initial listing
criteria for the Capital Market, with the exception of the bid
price and market value of publicly held shares requirements.
The Panel's decision follows the Company's receipt of notice from
the NASDAQ Listing Qualifications Staff on December 30, 2011
indicating that the Company's securities were subject to delisting
based upon the Company's non-compliance with the $10 million
stockholders' equity requirement for continued listing on The
NASDAQ Global Market. In response, the Company requested a
hearing before the Panel, which was held in February 2012. While
the Company is diligently working toward achieving compliance with
all applicable listing requirements, there can be no assurance
that it will be able to do so by the Panel's June 27, 2012
deadline.
ORION ENERGY: Receives Approval from NYSE Amex on Compliance Plan
-----------------------------------------------------------------
Orion Energy Systems, Inc. has received a notice from NYSE Amex
LLC, indicating that the Company's plan of compliance was
accepted. As the Company previously announced in a press release
on Feb. 14, 2012, the Company had received a notice from NYSE Amex
LLC, indicating that the Company was not in compliance with the
Exchange's continued listing criteria set forth in Sections 134
and 1101 of the NYSE Amex LLC Company Guide because it did not
timely file its Quarterly Report on Form 10-Q for its fiscal 2012
third quarter ended Dec. 31, 2011.
In order to maintain its Exchange listing, the Company was
afforded the opportunity to submit a plan of compliance to the
Exchange and on Feb. 15, 2012 presented its plan to the Exchange.
On March 26, 2012, the Exchange notified the Company that it
accepted the Company's plan of compliance and granted the Company
an extension until June 15, 2012 to regain compliance with the
continued listing standards. The Company will be subject to
periodic review by Exchange Staff during the extension period.
Failure to make progress consistent with the plan or to regain
compliance with the continued listing standards by the end of the
extension period could result in the Company being delisted from
the NYSE Amex LLC.
Orion Energy Systems, Inc. -- http://www.oesx.com/-- is a leading
power technology enterprise that designs, manufactures and deploys
energy management systems -- consisting primarily of high-
performance, energy efficient lighting platforms, intelligent
wireless control systems and direct renewable solar technology for
commercial and industrial customers -- without compromising their
quantity or quality of light.
PARKERVISION INC: Recurring Losses Prompt Going Concern Doubt
-------------------------------------------------------------
ParkerVision, Inc., filed on March 30, 2011, its annual report on
Form 10-K for the fiscal year ended Dec. 31, 2011.
PricewaterhouseCoopers LLP, in Jacksonville, Florida, expressed
substantial doubt about ParkerVision's ability to continue as a
going concern. The independent auditors noted that the Company
has suffered recurring losses from operations.
The Company reported a net loss of $14.57 million on $nil revenue
for 2011, compared with a net loss of $15.03 million on $63,735 of
revenue for 2010.
The Company's balance sheet at Dec. 31, 2011, showed
$15.84 million in total assets, $1.50 million in total
liabilities, and stockholders' equity of $14.34 million.
A copy of the Form 10-K is available for free at:
http://is.gd/o0nFE3
Jacksonville, Florida-based ParkerVision, Inc., was incorporated
under the laws of the state of Florida on Aug. 22, 1989. The
Company is in the business of innovating fundamental wireless
technologies. It designs, develops and markets its proprietary
radio frequency ("RF") technologies and products for use in
semiconductor circuits for wireless communication products.
PEMCO WORLD: Schedules May 23 Auction for Assets
------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Pemco World Air Services Inc. will conduct an auction
on May 23 to determine whether anyone will outbid venture-capital
investor Sun Capital Partners Inc. and buy the provider of
maintenance and repair services for commercial jet aircraft.
According to the report, under sale procedures approved last week
by the bankruptcy court in Delaware, the sale is on a schedule
about two weeks slower than the company wanted when it filed to
reorganize on March 5. Competing bids are due May 23. The
hearing to approve the sale is scheduled to take place June 1.
Sun is under contract to buy the business in exchange for pre-
bankruptcy debt and financing it's providing for the Chapter 11
case. On top of the debt-for-ownership swap, Sun will pay
ordinary-course-of-business trade payables incurred during
bankruptcy that aren't already paid.
A Sun affiliate acquired the $31.8 million senior secured debt
from Merrill Lynch Credit Products LLC and is also the holder of a
$5.6 million subordinated secured loan. Sun offered to finance
the Chapter 11 effort with a $6 million revolving credit and a
$31.8 million term loan to pay off a pre-bankruptcy secured debt
in the same amount.
About Pemco World Air Services
Headquartered in Tampa, Florida Pemco World Air Services --
http://www.pemcoair.com/-- performs large jet MRO services, and
has operations in Dothan, AL (military MRO and commercial
modification), Cincinnati/Northern Kentucky (regional aircraft
MRO), and partner operations in Asia.
Pemco filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Case
No. 12-10799) on 5, 2012, with a $37.8 million DIP financing and a
"stalking horse" bid from an affiliate of its current owner, Sun
Aviation Services, LLC.
Young Conaway Stargatt & Taylor, LLP has been tapped as general
bankruptcy counsel; Kirkland & Ellis LLP as special counsel for
tax and employee benefits issues; AlixPartners, LLP as financial
advisor; Bayshore Partners, LLC as investment banker; and Epiq
Bankruptcy Solutions LLC as notice and claims agent.
PETTUS PROPERTIES: Files New Application to Employ Mitchell & Culp
------------------------------------------------------------------
Pettus Properties Inc. asks permission from the U.S. Bankruptcy
Court to re-employ Mitchell & Culp PLLC as attorney.
As reported by the Troubled Company Reporter on June 18, 2010, the
Debtor obtained Court permission to hire Mitchell as counsel.
Early in March 2012, Mitchell sought and obtained approval from
the U.S. Bankruptcy Court to withdraw as attorneys of Pettus
Properties. According to reporting by the TCR, discussions about
the arrangement of the firm's services to the Debtor have been
contentious and have irreparably harmed the relationship. The
firm is unable to provide further services to the Debtor under
these circumstances.
On March 26, the Debtor filed the new application to employ the
firm. The Debtor proposes to pay the firm at these rates:
Personnel Rates
--------- -----
Richard M. Mitchell/attorney $450
Heather W. Culp/attorney $325
Christopher J. Culp/ of counsel $275
Cynthia A. Baker/paralegal $150
Jennifer N. Short/paralegal $140
Kelly Spruill/staff $50
Richard M. Mitchell, Esq., attests that the firm is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code.
Charlotte, North Carolina-based Pettus Properties, Inc., filed
for Chapter 11 bankruptcy protection (Bankr. W.D.N.C. Case No.
10-31632) on June 8, 2010. The Company estimated its assets and
debts at $10 million to $50 million.
In 2011, the Debtor filed a Chapter 11 plan of reorganization,
which was challenged by VFC Partners 8 LLC. Terms of the Plan and
VFC's objections were reported by the Troubled Company Reporter on
June 24 and July 15, 2011. Robert A. Cox, Jr., Esq., at
McGuireWoods LLP, represents VFC. A full-text copy of the
disclosure statement is available for free at
http://bankrupt.com/misc/PETTUS_DS.pdf
PHOENIX COS: S&P Raises Counterparty Credit Rating to 'B-'
----------------------------------------------------------
Standard & Poor's Ratings Services raised its counterparty credit
rating (CCR) on The Phoenix Cos. Inc. (NYSE: PNX) to 'B-' from
'CCC+'. At the same time, Standard & Poor's has affirmed its
financial strength ratings (FSR) on subsidiaries Phoenix Life
Insurance Co. (PLIC) and PHL Variable Insurance Co. (collectively
known as Phoenix) at 'BB-'. The outlook on the ratings is stable.
"The upgrade reflects our belief that Phoenix has more than
adequate resources at the holding company to service its near-term
obligations, including interest expenses on debt outstanding and
other operating expenses," said Standard & Poor's credit analyst
Patrick Wong. "The holding company's interest expense for 2011 was
$20.4 million and the holding company has approximately $92.6
million of liquid resources, including $52.5 million of cash. The
combination of cash and liquid assets at the holding company
should provide more than adequate resources to service debt in the
near term."
"The stable outlook reflects our view that Phoenix's financial
profile is stabilizing and incrementally improving, mainly because
of improving operating performance and the continuous
strengthening of its capital base, as measured by a regulatory RBC
ratio of 363%. However, its business profile remains marginal. In
the short term, we expect Phoenix to be able to make all timely
payments on its obligations. In the longer term, we expect
Phoenix's repositioning strategy to be successful and to add new
distribution relationships that increase sales," S&P said.
"We expect Phoenix's generally accepted accounting principles
(GAAP) operating performance to stay positive in 2012 through
further expense reduction and increases in premiums and fees. With
a relatively small life insurance sales volume, but growing fixed
annuities volume in the short term and a large in-force block of
business, we expect the operating companies to continue to produce
positive statutory income. This is crucial because positive
statutory earnings allow the operating companies to dividend funds
to the parent company without prior regulatory approvals. We
expect investment portfolio quality to continue improving and
impairments to continue declining," S&P sad.
"We could upgrade Phoenix if its operating performance and
competitive position continue to improve with adequate revenue
generation to offset the decline in premiums from the regulatory
closed block, coupled with improved capital adequacy based on
Standard & Poor's capital model. Profitable growth, particularly
from open-block businesses with mid-single-digit returns on
capital, would support higher ratings, while sustainable sales
growth and increased distribution relationships would indicate an
improved competitive position," S&P said.
"We could lower the ratings if, in our view, Phoenix Cos. Inc.
faces significant challenges in meeting its obligations on time.
This could result from a reduction in liquidity stemming from
disintermediation risk or a lack of contributions from the
operating companies because of regulatory restrictions. We would
also consider lowering the rating if the company consistently
incurs a statutory loss," S&P said.
PINNACLE AIRLINES: Has Interim OK to Reject UAL Agreements
----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York,
on April 1, 2012, granted interim approval to reject a 2007
capacity purchase agreement and related agreements with United Air
Lines, Inc., and Continental Airlines, Inc., and terminate a
related guarantee.
Since 2007, Colgan Air, Inc., has performed regional air services
for Continental Airlines, Inc., with respect to Q400 and Q400NG
aircraft predominantly out of Continental's hub at Newark Liberty
International Airport pursuant to a capacity purchase agreement
and related Ancillary Agreements related to fuel and ground
handling, each dated as of Feb. 2, 2007. Pinnacle Airlines Corp.
guaranteed Colgan's obligations under the Prior Agreements
pursuant to the Guarantee Agreement, dated as of Feb. 2, 2007.
The Interim Order authorized the Companies, on an interim basis,
to perform their obligations under a term sheet among the
Companies, Continental, United Air Lines, Inc., and Export
Development Canada. The material terms of the United Agreement
include:
-- The term of the United Agreement commenced upon entry of the
Interim Order and will end on Nov. 30, 2012, unless
otherwise agreed by the Companies and United.
-- During the term of the United Agreement, United will pay
increased rates for Colgan's provision of regional air
services related to Colgan's Q400 and Saab aircraft on terms
otherwise substantially similar to those contained in the
Prior Agreements, which have been rejected by the Companies
in connection with their bankruptcy proceedings.
-- The regional air services provided to United will be wound
down gradually over the term of the United Agreement, with
the first three Q400 aircraft and the first five Saab
aircraft being wound down in May 2012. It is anticipated
that the regional air services provided by the Saab aircraft
and the Q400 aircraft will be fully wound down by July 31,
2012 and November 30, 2012, respectively.
-- United will pay EDC directly for Colgan's continued use of
each Q400 aircraft and related aircraft equipment financed
by EDC until such aircraft are wound down in accordance with
the United Agreement, pursuant to terms separately agreed by
United and EDC. Colgan will remain responsible for insuring
the Q400 Covered Equipment during its period of continued
use.
-- The Company guarantees Colgan's obligations under the United
Agreement.
The Interim Order also authorized the Companies, on an interim
basis, to perform their obligations under a term sheet among the
Companies, EDC and United. The material terms of the EDC
Agreement include:
-- As of the Petition Date, Colgan will be deemed to have
returned to EDC all Q400 Covered Equipment used to perform
the regional air services under the United Agreement.
-- EDC waived its right to seek administrative expense claims
against the Companies in connection with such return but
reserved its right to seek administrative expense claims
against the Companies in connection with any breach of the
EDC Agreement itself.
-- Colgan will be entitled to use such Q400 Covered Equipment
in connection with its provision of regional air services
under the United Agreement.
-- Upon the wind down of any such Q400 Covered Equipment under
the United Agreement, Colgan is required to physically
return such Q400 Covered Equipment to EDC. Upon such
return, EDC is authorized to dispose of such Q400 Covered
Equipment without the consent of the Companies.
A full-text copy of the Form 8-K as filed with the SEC is
available for free at http://is.gd/3Hsc4n
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.
Pinnacle Airlines Inc. and its affiliates, including Colgan Air,
Mesaba Aviation Inc., Pinnacle Airlines Corp., and Pinnacle East
Coast Operations Inc. filed for Chapter 11 bankruptcy (Bankr.
S.D.N.Y. Lead Case No. 12-11343) on April 1, 2012.
Judge Robert E. Gerber presides over the case. Lawyers at Davis
Polk & Wardwell LLP, and Akin Gump Strauss Hauer & Feld LLP serve
as the Debtors' counsel. Barclays Capital and Seabury Group LLC
serve as the Debtors' financial advisors. Epiq Systems -
Bankruptcy Solutions serves as the claims and noticing agent. The
petition was signed by John Spanjers, executive vice president and
chief operating officer.
Pinnacle Airlines' 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.
Delta Air Lines, Inc., the Debtors' major customer and post-
petition lender, is represented by David R. Seligman, Esq., at
Kirkland & Ellis LLP.
PL PROPYLENE: S&P Assigns B- Corp. Credit Rating; Outlook Positive
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' corporate
credit rating to PL Propylene LLC. The outlook is positive. "At
the same time, we assigned our 'B' issue-level and '2' recovery
ratings to the company's $120 million senior secured 4.5-year
revolving credit facility and $350 million senior secured five-
year term loan B. The '2' recovery rating reflects our expectation
for a substantial (70% to 90%) recovery in the event of a payment
default," S&P said.
"The company is currently owned by equity sponsors Lindsay
Goldberg (80%) and York Capital (20%). It used the proceeds from
the debt issuance to repay existing debt, pay approximately $250
million of dividends to the equity sponsors, and to pay related
transaction costs. The financing provides for, but is not
contingent on, an IPO and conversion of the company into a master
limited partnership (MLP). We are assuming that, if this secondary
offering occurs, it would not materially alter the amount of debt
and equity in the capital structure since we believe it will
likely distribute the proceeds to the current equity sponsors,"
S&P said.
"The ratings on PL Propylene reflect its 'vulnerable' business
risk profile and 'aggressive' financial risk profile," said
Standard & Poor's credit analyst Daniel Krauss. "PL Propylene
manufactures propylene at a propane dehydrogenation facility in
Houston. The company has invested approximately $630 million in
plant capital since inception in 2008. Propylene is a commodity
chemical used to make a wide variety of products, including
plastics, paints and coatings, and fibers. Demand for propylene
tends to grow in tandem with the industrial and consumer economy."
"Despite operating in a cyclical industry, PL Propylene benefits
from what we expect will be favorable business and economic
conditions for at least the next few years. Its primary feedstock-
-propane--is a natural gas derivative, whose costs we expect to
remain low based on extensive shale gas discovery in recent years
and ongoing development of shale gas reserves. In addition,
through an alternative production process, propylene is produced
as a coproduct to ethylene from the steam cracking of liquid
feedstocks, with heavier, oil-based feedstocks producing
significantly more propylene than lighter, natural-gas based
feedstocks. Due to the current wide differential between the cost
of oil and natural gas, petrochemical plants are increasingly
cracking lighter feedstocks, resulting in less propylene
production. Although competitors have announced some potential
capacity expansions, which could become operational during the
middle to latter part of this decade, we do not currently expect
their size to result in oversupply conditions. This is because we
expect demand for propylene to grow in the mid-single-digit
percentage area annually and to benefit from eventual demand
recovery in the housing market, which remains near historically
weak levels," S&P said.
"In addition to cyclicality, key business risks include: a short
operating track record, risks associated with operating at a
single manufacturing site, and considerable supplier and customer
concentration," S&P said.
"PL Propylene started operations in October 2010 and reached full
production levels in April 2011. However, in June 2011, one of the
compressors in the facility experienced a mechanical failure,
causing an unplanned four-week outage. This outage highlights a
key risk associated with running a startup manufacturing facility,
since the company has not yet shown that it is able to operate
reliably for an extended period of time. Its single manufacturing
site also makes it vulnerable to operating disruptions. The
facility's location on the U.S. Gulf Coast exposes it to the risk
of hurricane disruption or damage. PL Propylene sources propane
from a single supplier, and sales under contracts to three
customers account for the vast majority of revenues. The company
has contracts in place with these three customers, which expire
between 2013 and 2018. Although we do not foresee any problems
with these counterparties, and there is some potential to
diversify both suppliers and customers, pipeline connections limit
the number of potential trading partners," S&P said.
"Regardless of whether or not the IPO takes place, the most
significant financial risk we perceive is a capital structure that
permits PL Propylene to pay out all of its free cash flow in
dividends to its owners, and the lack of required debt
amortization. As a result, while we believe that robust market
conditions should result in comfortable leverage and fixed-charge
coverage during the next few years, we don't expect the company to
build any significant cushion for operating challenges or cyclical
downturns. This also heightens longer-term refinancing risk as the
company begins to face debt maturities in 2016. However, during
the next one to two years, we expect credit metrics to remain
healthy relative to the aggressive financial profile, with debt to
EBITDA below 2x and funds from operations (FFO) to debt at well
above 20%. We expect any investment in capacity expansions to be
financed with a combination of incremental debt and discretionary
cash flow in a way that maintains these credit metrics," S&P said.
"The positive outlook reflects our expectation that favorable
industry dynamics will support solid profitability and free cash
flow generation over the next few years. Our base case assumes
that, over the next two years, PL Propylene will be able to
maintain an operating rate of around 85%, while the propane-to-
propylene spread remains high by historical standards--in the 32
cents to 38 cents per pound range (this spread is calculated as
the difference in propylene price and propane price per pound,
considering that it takes about 1.2 pounds of propane make one
pound of propylene)," S&P said.
"We could raise the ratings modestly within the next 12 months if
the company establishes a track record of reliable operating
performance for an extended period and business prospects remain
robust," Mr. Krauss continued. "To consider a higher rating, we
would also expect PL Propylene to maintain adequate liquidity
levels, despite significant working capital swings within a given
month."
"We could revise the outlook to stable or lower the ratings if the
downside risks to our forecast were to materialize, such as
significant operating problems or disruptions, a substantial
reduction in demand from a key customer, or an unexpected decrease
in the propane-to-propylene spread. Based on our scenario
forecasts, we could take a negative rating action if the
company's operating rate were to decline to below 80% and the
propane-to-propylene spread drops against our expectations to
around 20 cents per pound. If this were to happen, FFO to total
adjusted debt would likely fall to less than 12%. An increase in
debt to fund a distribution to shareholders would constitute an
additional risk," S&P said.
PLATO LEARNING: S&P Assigns 'B' Corp Credit Rating; Outlook Stable
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'B'
corporate credit rating to Bloomington, Minn.-based Plato Learning
Inc. The outlook is stable.
"Standard & Poor's also assigned preliminary issue and recovery
ratings to the company's proposed first- and second-lien credit
facilities, for which Plato Inc. and Project Cayman Merger Corp.
will be the co-issuers. Plato plans to use proceeds from the
borrowings to help finance its proposed acquisition of Archipelago
Learning Inc., which it likely will complete in April or May this
Year," S&P said.
"The preliminary ratings on Plato reflect the company's 'weak'
business risk profile, representing its modest position in the
overall education market and its heavy dependence on governmental
education spending, which is under pressure," said Standard &
Poor's credit analyst Jacob Schlanger. "A diversified and
comprehensive product portfolio with a highly recurring and stable
customer base and positive cash flow generation capabilities are
partly offsetting factors."
Plato will have a highly leveraged financial profile following the
acquisition. Leverage could drop modestly, as the loan agreement
calls for the company to reduce debt with excess cash flow.
"Combined, the Plato and Archipelago companies will be the largest
provider of online curriculum and assessments to the U.S.
kindergarten-through-adult education market. Both these companies'
products help educators improve public education effectiveness and
help schools meet various mandated standards for educational
achievement," S&P said.
PLC SYSTEMS: McGladrey & Pullen Raises Going Concern Doubt
----------------------------------------------------------
PLC Systems Inc. filed on March 30, 2011, its annual report on
Form 10-K for the fiscal year ended Dec. 31, 2011.
McGladrey & Pullen, LLP, in Boston, Massachusetts, expressed
substantial doubt about PLC Systems' ability to continue as a
going concern. The independent auditors noted that the Company
has sustained recurring net losses and negative cash flows from
continuing operations.
The Company reported a net loss of $5.76 million on $671,000 of
revenues for 2011, compared with a net loss of $505,000 on
$587,000 of revenues for 2010.
The Company's balance sheet at Dec. 31, 2011, showed $3.55 million
in total assets, $7.64 million in total liabilities, and a
stockholders' deficit of $4.09 million.
A copy of the Form 10-K is available for free at:
http://is.gd/APiUYa
Milford, Massachusetts-based PLC Systems Inc. is a medical device
company specializing in innovative technologies for the cardiac
and vascular markets. The Company's key strategic growth
initiative is its newest marketable product, RenalGuard(R).
RenalGuard is designed to reduce the potentially toxic effects
that contrast media can have on the kidneys when it is
administered to patients during certain medical imaging
procedures.
PREMIER PAVING: Seeks to Use Wells Fargo's Cash Collateral
----------------------------------------------------------
Premier Paving Inc. seeks authority from the Bankruptcy Court to
use cash collateral to fund operations while in bankruptcy.
Premier maintains three secured loan obligations with Wells Fargo
Bank, NA. As of the petition date, the Debtor owed Wells Fargo
$5.019 million, $544,684 and $812,501 under three promissory
notes. The Debtor said Wells Fargo may have a secured lien
position on the Debtor's funds and revenues that constitute cash
collateral.
Wells Fargo also has a lien on two of three parcels of real
property held by Premier's affiliate, TKO LLC, which has a value
of $2.2 million.
The Debtor said its total asset value as of the petition date is
$11.668 million. The accounts receivables total $6.424 million
and cash on hand total $6,400.
The Debtor's filing indicates the proposed adequate protection for
the use of Wells Fargo's cash collateral.
A hearing on the Debtor's request is set for April 16, 2012, at
11:00 a.m.
About Premier Paving
Denver, Colorado-based Premier Paving Inc. --
http://www.premierpavinginc.com/-- operates a full-service
highway construction company, which services include paving,
grading and milling, geo-textiles, trucking, traffic control and
quality control. Premier Paving also owns and operates an asphalt
plant.
Premier Paving filed for Chapter 11 bankruptcy (Bankr. D. Colo.
Case No. 12-16445) on April 2, 2012. Judge Michael E. Romero
presides over the case. Lee M. Kutner, Esq., at Kutner Miller
Brinen, P.C., serves as the Debtor's counsel. In its petition,
the Debtor estimated up to $50 million in assets and debts. The
petition was signed by David Goold, treasurer.
PREMIER PAVING: Hiring Kutner Miller as Bankruptcy Counsel
----------------------------------------------------------
Premier Paving Inc. seeks authority from the Bankruptcy Court to
employ Kutner Miller Brinen P.C.
The Debtor's counsel was paid a $40,742 retainer by the Debtor.
The Debtor has filed a separate application seeking approval of
the retainer. The Debtor also paid the firm prepetition fees and
costs, including the filing fee, in the amount of $9,872.
The firm's hourly rates are:
Lee M. Kutner, Esq. $440
Jeffrey S. Brinen, Esq. $380
David M. Miller, Esq. $340
Aaron A. Garber, Esq. $340
Jenny M.F. Fujii, Esq. $290
Benjamin H. Shloss, Esq. $240
Paralegal $75
To the best of the Debtor's knowledge, the firm has no connection
or relationship with creditors and is disinterested as defined in
11 U.S.C. Sec. 101(14) and represents no interest adverse to the
estate.
About Premier Paving
Denver, Colorado-based Premier Paving Inc. --
http://www.premierpavinginc.com/-- operates a full-service
highway construction company, which services include paving,
grading and milling, geo-textiles, trucking, traffic control and
quality control. Premier Paving also owns and operates an asphalt
plant.
Premier Paving filed for Chapter 11 bankruptcy (Bankr. D. Colo.
Case No. 12-16445) on April 2, 2012. Judge Michael E. Romero
presides over the case. In its petition, the Debtor estimated up
to $50 million in assets and debts. The petition was signed by
David Goold, treasurer.
PREMIER PAVING: Sec. 341 Creditors' Meeting Set for April 30
------------------------------------------------------------
The U.S. Trustee in Denver, Colorado, will convene a Meeting of
Creditors pursuant to 11 U.S.C. 341(a) in the Chapter 11 case of
Premier Paving Inc. on April 30, 2012, at 9:00 a.m. at U.S.
Trustee Room C.
Denver, Colorado-based Premier Paving Inc. --
http://www.premierpavinginc.com/-- operates a full-service
highway construction company, which services include paving,
grading and milling, geo-textiles, trucking, traffic control and
quality control. Premier Paving also owns and operates an asphalt
plant.
Premier Paving filed for Chapter 11 bankruptcy (Bankr. D. Colo.
Case No. 12-16445) on April 2, 2012. Judge Michael E. Romero
presides over the case. Lee M. Kutner, Esq., at Kutner Miller
Brinen, P.C., serves as the Debtor's counsel. In its petition,
the Debtor estimated up to $50 million in assets and debts. The
petition was signed by David Goold, treasurer.
PURADYN FILTER: Incurs $1.6 Million Net Loss in 2011
----------------------------------------------------
Puradyn Filter Technologies Incorporated filed with the U.S.
Securities and Exchange Commission its annual report on Form 10-K
disclosing a net loss of $1.61 million on $2.67 million of net
sales in 2011, compared with a net loss of $1.57 million on $3.10
million of net sales in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $1.29 million
in total assets, $9.16 million in total liabilities and a $7.86
million total stockholders' deficit.
Webb and Company, P.A., in Boynton Beach, Florida, 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, its total
liabilities exceed its total assets, and it has relied on cash
inflows from an institutional investor and current stockholder.
A copy of the Form 10-K is available for free at:
http://is.gd/AYnr8a
About Puradyn Filter
Boynton Beach, Fla.-based Puradyn Filter Technologies Incorporated
(OTC BB: PFTI) -- http://www.puradyn.com/-- designs, manufactures
and markets the puraDYN(R) Oil Filtration System.
REDDY ICE: Bankruptcy Filing Seen This Week
-------------------------------------------
Mike Spector, writing for The Wall Street Journal, reports that
people familiar with the matter said Reddy Ice Holdings Inc. is in
the final stages of preparing to file for Chapter 11 bankruptcy
protection with a plan to hand ownership to Centerbridge Partners,
a hedge fund holding the company's debt.
Dallas-based Reddy Ice could seek bankruptcy protection this
coming week, perhaps within the next two days or so, the people
told the Journal. The sources said Reddy Ice would file a
prearranged bankruptcy with a restructuring plan that has support
ahead of time from creditors, including Centerbridge, to limit the
company's time in court.
One of the sources told the Journal that Reddy Ice could then at
some later point attempt to merge with Arctic Glacier Inc., a
troubled rival in Canada that has filed for bankruptcy.
The sources told the Journal that Reddy Ice retained law firm DLA
Piper to prepare the bankruptcy filing, and it has been putting
the finishing touches on the plan in recent days. A Reddy Ice
representative didn't respond to requests for comment, the Journal
reports.
Law firm Kirkland & Ellis is representing Centerbridge, the
creditor expected to take over Reddy Ice after its bankruptcy
filing, said people familiar with the situation.
About Reddy Ice
Reddy Ice Holdings, Inc. is a manufacturer and distributor of
packaged ice in the United States. With approximately 1,500 year-
round employees, the Company sells its products primarily under
the widely known Reddy Ice(R) brand to a variety of customers in
34 states and the District of Columbia. The Company provides a
broad array of product offerings in the marketplace through
traditional direct store delivery, warehouse programs and its
proprietary technology, The Ice Factory(R). Reddy Ice serves most
significant consumer packaged goods channels of distribution, as
well as restaurants, special entertainment events, commercial
users and the agricultural sector.
The Company also reported a net loss of $36.15 million on
$273.57 million of revenue for the nine months ended Sept. 30,
2011, compared with a net loss of $11.47 million on
$260.20 million of revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed $460.94
million in total assets, $525.26 million in total liabilities and
a $64.32 million total stockholders' deficit.
* * *
Reddy Ice carries 'B-' issuer credit ratings, with "negative"
outlook, from Standard & Poor's.
As reported by the TCR on Nov. 8, 2011, Moody's Investors Service
lowered Reddy Ice Holdings, Inc.'s corporate family and
probability-of-default ratings to Caa1 from B3, and its $12
million senior discount notes due 2012 to Caa3 from Caa2. Moody's
also lowered the rating on Reddy Ice Corporation's $300 million
first lien senior secured notes due 2015 to B3 from B2 and the
$139 million second lien notes due 2015 to Caa3 from Caa2. The
ratings outlook remains negative. The speculative grade liquidity
rating was affirmed at SGL-3.
The ratings downgrade reflects Moody's expectation that Reddy
Ice's operating performance is unlikely to materially improve over
the foreseeable future given the uncertain macro environment and
the competitive nature of the U.S. packaged ice industry.
ROOMSTORE INC: Gets Clearance to Move Forward With Store-Closings
-----------------------------------------------------------------
Dow Jones' DBR Small Cap reports that a bankruptcy judge has
cleared RoomStore Inc. to launch a second round of store-closing
sales, this time at its Dallas-area locations.
As reported in the April 4, 2012 edition of the TCR, the company
asked for an auction to be held on April 9. It wants to sell all
furniture inventory as well as fixtures and equipment. If the
Texas exit is approved, the RoomStore would be left with 27
stores: 10 each in Maryland and Virginia , five in North Carolina
and two in South Carolina.
The Company has already closed 15 stores in Texas as part of its
reorganization.
About RoomStore Inc.
Richmond, Virginia-based RoomStore, Inc., operates retail
furniture stores and offers home furnishings through
Furniture.com, a provider of Internet-based sales opportunities
for regional furniture retailers. The Company owns 65% of
Mattress Discounters Group LLC, which operates 83 mattress stores
(as of Aug. 31, 2011) in the states of Delaware, Maryland and
Virginia and in the District of Columbia.
RoomStore was founded in 1992 in Dallas, Texas, with four retail
furniture stores. With more than $300 million in net sales for
its fiscal year ending 2010, RoomStore is one of the 30 largest
furniture retailers in the United States.
RoomStore filed for Chapter 11 bankruptcy (Bankr. E.D. Va. Case
No. 11-37790) on Dec. 12, 2011, following store-closing sales at
four of its retail stores, located in Hoover, Alabama;
Fayetteville, North Carolina; Tallahassee, Florida; and Baltimore,
Maryland. When it filed for bankruptcy, the Company operated a
chain of 64 retail furniture stores, including both large-format
stores and clearance centers in eight states: Pennsylvania,
Maryland, Virginia, North Carolina, South Carolina, Florida,
Alabama, and Texas. It also had five warehouses and distribution
centers located in Maryland, North Carolina, and Texas that
service the Retail Stores.
Judge Douglas O. Tice, Jr., presides over the case. Lawyers at
Lowenstein Sandler PC and Kaplan & Frank, PLC serve as the
Debtor's bankruptcy counsel. FTI Consulting, Inc., serves as the
Debtor's financial advisors and consultants.
The Company's balance sheet at Aug. 31, 2011, showed $70.4 million
in total assets, $60.3 million in total liabilities, and
stockholders' equity of $10.1 million. The petition was signed by
Stephen Girodano, president and chief executive officer.
Liquidator Hilco Merchant Resources, Inc., is represented in the
case by Gregg M. Galardi, Esq., at DLA Piper LLP (US); and Robert
S. Westermann, Esq., and Sheila de la Cruz, Esq., at Hirschler
Fleischer, P.C.
The U.S. Trustee for Region 4 named seven members to the official
committee of unsecured creditors in the case.
ROSETTA GENOMICS: Kost Forer Raises Going Concern Doubt
-------------------------------------------------------
Rosetta Genomics Ltd. filed on April 2, 2012, its annual report on
Form 20-F for the fiscal year ended Dec. 31, 2011.
Kost Forer Gabbay & Kasierer, in Tel-Aviv, Israel, expressed
substantial doubt about Rosetta Genomics' ability to continue as a
going concern. The independent auditors noted that the Company
has incurred recurring operating losses and generated negative
cash flows from operating activities in each of the three years in
the period ended Dec. 31, 2011.
The Company reported a net loss after discontinued operations of
$8.83 million on $103,000 of revenues for 2011, compared with a
net loss after discontinued operations of $14.76 million on
$279,000 of revenues for 2010.
The Company's balance sheet at Dec. 31, 2011, showed $2.04 million
in total assets, $2.40 million in total liabilities, and a
stockholders' deficit of $356,000.
May File for Bankruptcy in Israel or the U.S.
"We have used substantial funds to discover, develop and protect
our microRNA tests and technologies and will require substantial
additional funds to continue our operations. Based on our current
operations, our existing funds, including the proceeds from the
January 2012 debt financing, will only be sufficient to fund
operations until late May, 2012. We intend to seek funding
through collaborative arrangements and public or private equity
offerings and debt financings. Additional funds may not be
available to us when needed on acceptable terms, or at all. In
addition, the terms of any financing may adversely affect the
holdings or the rights of our existing shareholders. For example,
if we raise additional funds by issuing equity securities, further
dilution to our then-existing shareholders may result. Debt
financing, if available, may involve restrictive covenants that
could limit our flexibility in conducting future business
activities. If we are unable to obtain funding on a timely basis,
we may be required to significantly curtail one or more of our
research or development programs. We also could be required to
seek funds through arrangements with collaborators or others that
may require us to relinquish rights to some of our technologies,
tests or products in development or approved tests or products
that we would otherwise pursue on our own. Our failure to raise
capital when needed will materially harm our business, financial
condition and results of operations, and may require us to seek
protection under the bankruptcy laws of Israel and the United
States.
A copy of the Form 20-F is available for free at:
http://is.gd/BrKnJm
Located in Rehovot, Israel, Rosetta Genomics Ltd. is seeking to
develop and commercialize new diagnostic tests based on a recently
discovered group of genes known as microRNAs. MicroRNAs are
naturally expressed, or produced, using instructions encoded in
DNA and are believed to play an important role in normal function
and in various pathologies. The Company has established a CLIA-
certified laboratory in Philadelphia, which enables the Company to
develop, validate and commercialize its own diagnostic tests
applying its microRNA technology.
ROTHSTEIN ROSENFELDT: Trustee, Insurers Want Hand in Deposition
---------------------------------------------------------------
Lance Duroni at Bankruptcy Law360 reports that the trustee of a
bankrupt feeder fund involved in Scott Rothstein's $1.2 billion
Ponzi scheme and several insurance companies asked for court
clearance Thursday to take part in an upcoming deposition of the
jailed former attorney.
Hoping to glean information to help settle an $80 million
insurance dispute stemming from the fraud, the Chapter 7 trustee
for Banyon 1030-32 LLC and six insurers jointly moved for relief
from the automatic stay in the fund's bankruptcy to question
Rothstein, according to papers filed in Florida bankruptcy court
obtained by Law360.
About Rothstein Rosenfeldt
Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler
PA -- http://www.rra-law.com/-- has been suspected of running a
$1.2 billion Ponzi scheme. U.S. authorities claimed in a civil
forfeiture lawsuit filed November 9, 2009, that Mr. Rothstein, the
firm's former chief executive officer, sold investments in non-
existent legal settlements. Mr. Rothstein pleaded guilty to five
counts of conspiracy and wire fraud on January 27, 2010.
Creditors of Rothstein Rosenfeldt Adler signed a petition sending
the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No.
09-34791). The petitioners include Bonnie Barnett, who says she
lost $500,000 in legal settlement investments; Aran Development,
Inc., which said it lost $345,000 in investments; and trade
creditor Universal Legal, identified as a recruitment firm, which
said it is owed $7,800. The creditors alleged being owed money
invested in lawsuit settlements.
Herbert M. Stettin, the state-court appointed receiver for
Rothstein Rosenfeldt, was officially carried over as the
Chapter 11 trustee in the involuntary bankruptcy case.
On June 10, 2010, Mr. Rothstein was sentenced to 50 years in
prison.
SAINT VINCENTS: GE Capital DIP Loan Extended to June 28
-------------------------------------------------------
Saint Vincents Catholic Medical Centers of New York (SVCMC) and
its affiliates ask the Bankruptcy Court to approve a fifth
amendment to the DIP Credit Agreement with General Electric
Capital Corporation, as agent, and GE Capital and TD Bank, N.A.,
as lenders.
Since the commencement of the Chapter 11 Cases, the Debtors'
postpetition revolving credit facility has ensured that the
estates have sufficient liquidity to administer these large and
complex Chapter 11 Cases. The DIP Facility has been amended and
extended from time to time to continue to meet these needs as the
Debtors work towards formulating and confirming a chapter 11 plan.
The Fifth Amendment contains the following salient provisions,
which are consistent with the initial DIP Facility and/or the
various amendments thereto:
A. Approved Budget: The parties have negotiated a new
Approved Budget, covering the period between April 7 and
June 29, 2012.
B. Scheduled Maturity Date: The Scheduled Maturity Date of
the DIP Credit Agreement is extended through June 28,
2012.
C. Aggregate Commitments: As of January 1, 2012, the maximum
aggregate commitment under the DIP Credit Agreement is
reduced from $20,000,000 to $10,000,000.
D. Fifth Amendment Fee: In consideration for entering into
the DIP Amendment and extending the Scheduled Maturity
Date for nearly three additional months, the Debtors will
pay the DIP Agent, for the benefit of the DIP Lenders, an
amendment fee of $25,000.
To date, the Debtors have transferred substantial patient care
operations in an orderly and safe manner to new sponsors and have
monetized other material assets. Despite this tremendous
progress, there are still steps necessary to confirm these Chapter
11 Cases. Although the Debtors are in the process of reconciling
many of the asserted claims of their major secured, priority
and/or administrative creditors, there are still a number of large
claims outstanding that the Debtors have not yet resolved. The
Debtors are continuing to negotiate agreements with their key
constituents to settle the asserted claims, thereby permitting a
process to resolve numerous issues that could otherwise complicate
and prolong these Chapter 11 cases. At the same time, the Debtors
continue to operate and provide valuable services under their
managed care program.
Given the need to ensure sufficient liquidity to fund the Debtors'
ongoing operations pending the confirmation of a chapter 11 plan,
the continuation of the DIP Facility for the next few months is
reasonable and justified.
To manage expenses of the estates, the Debtors have agreed to
reduce both the commitment under the DIP Credit Agreement and the
amendment fee. Under the Fifth Amendment, the $25,000 Amendment
Fee that the Debtors will pay the DIP Agent as an inducement to
extend the maturity of the DIP Credit Agreement by three
additional months is both market and reasonable, representing 25
basis points of the annual $10,000,000 commitment under the DIP
Credit Agreement. Moreover, the Amendment Fee represents a minor
cost to assure the continued liquidity provided by the DIP
Facility.
About Saint Vincents
Saint Vincents Catholic Medical Centers of New York, doing
business as St. Vincent Catholic Medical Centers --
http://www.svcmc.org/-- was anchored by St. Vincent's Hospital
Manhattan, an academic medical center located in Greenwich Village
and the only emergency room on the Westside of Manhattan from
Midtown to Tribeca, St. Vincent's Westchester, a behavioral health
hospital in Westchester County, and continuing care services that
include two skilled nursing facilities in Brooklyn, another on
Staten Island, a hospice, and a home health agency serving the
Metropolitan New York area.
Saint Vincent Catholic Medical Centers of New York and six of its
affiliates first filed for Chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case Nos. 05-14945 through 05-14951).
St. Vincents Catholic Medical Centers returned to bankruptcy court
by filing another Chapter 11 petition (Bankr. S.D.N.Y. Case No.
10-11963) on April 14, 2010. The Debtor estimated assets of
$348 million against debts totaling $1.09 billion in the new
petition.
Although the hospitals emerged from the prior reorganization in
July 2007 with a Chapter 11 plan said to have "a realistic chance"
of paying all creditors in full, the bankruptcy left the medical
center with more than $1 billion in debt. The new filing occurred
after a $64 million operating loss in 2009 and the last potential
buyer terminated discussions for taking over the flagship
hospital.
Adam C. Rogoff, Esq., and Kenneth H. Eckstein, Esq., at Kramer
Levin Naftalis & Frankel LLP, represent the Debtor in its
Chapter 11 effort.
SAPPHIRE VP: Sec. 341 Creditors' Meeting Set for May 15
-------------------------------------------------------
The U.S. Trustee in Corpus Christi, Texas, will convene a Meeting
of Creditors under 11 U.S.C. Sec. 341(a) in the Chapter 11 case of
Sapphire VP LP on May 15, 2012, at 12:00 p.m. at Harlingen, 222 E
Van Buren.
Proofs of claim are due Aug. 13, 2012.
According to the case docket, Sapphire VP is ordered to propose
and file a plan of reorganization and disclosure statement within
120 days. The Debtor is directed to appear for further orders to
effectuate a plan of Reorganization. The Court scheduled a
hearing for Aug. 8, 2012 at 9:00 a.m.
Houston, Texas-based Sapphire VP, LP, filed a Chapter 11 petition
(Bankr. S.D. Tex. Case No. 12-10173) in Brownsville on April 2,
2012. Sapphire, a Single Asset Real Estate as defined in 11
U.S.C. Sec. 101 (51B), disclosed $64 million in assets and $42.3
million in liabilities in its schedules.
The Debtor owns the Sapphire Condominiums located at South Padre
Island, Texas. The property is worth $35 million and secures a
$32.3 million debt.
Judge Richard S. Schmidt oversees the case. Melissa Anne
Haselden, Esq., at Hoover Slovacek LLP, in Houston, serves as
counsel to the Debtor. The petition was signed by Randall J.
Davis, as manager of the Debtor's general partner.
SEDGWICK HOLDINGS: Moody's Affirms 'B2' CFR; Outlook Stable
-----------------------------------------------------------
Moody's Investors Service has affirmed the B2 corporate family
rating of Sedgwick Holdings, Inc., a holding company for Sedgwick
Claims Management Services, Inc. The rating agency also affirmed
Sedgwick's B1 (LGD3, 33%) first-lien revolving credit facility and
term loan ratings and Caa1 (LGD5, 83%) second-lien term loan
rating. The rating outlook for Sedgwick is stable.
Ratings Rationale
"Sedgwick's credit metrics have marginally improved since the SRS
acquisition and are expected to further improve based on the
realization of acquired EBITDA and cost synergies from SRS, as
well as amortization of its term loan," said Enrico Leo, Moody's
lead analyst for Sedgwick. Moody's expects adjusted debt-to-EBITDA
to remain between 5.0 and 6.0x, and interest coverage to be
greater than 2x over the next 12-18 months. Sedgwick's adjusted
debt-to-EBITDA ratio and EBITDA coverage of interest, as measured
by Moody's, was 6.2x and 1.7x, respectively, as of December 31,
2011.
Sedgwick's ratings reflect the company's substantial financial
leverage, leading to a low level of financial flexibility and
somewhat weak interest and fixed charge coverage, and weak net
profitability given the company's high interest expense burden. In
addition, some uncertainty exists regarding Sedgwick's long term
capital targets given the company's ownership by private equity
firms who tend to favor high levels of debt in the capital
structure. An additional challenge for the company is sustaining
organic growth levels that will be hampered by generally benign
claim frequency trends in the US. The company also faces execution
and integration risks associated with acquisitions.
Helping to offset these risks is Sedgwick's status as a market
leader in the claims management sector, its diverse customer base,
product line and geographic spread and its strong historic organic
revenue growth. As a service provider to insurance companies and
self-insured entities, Sedgwick also benefits from a fairly stable
earnings profile, due to the relatively high switching costs faced
by customers, a stable cost structure, and the lack of exposure to
insurance underwriting risk.
Moody's cited the following factors that could lead to a rating
upgrade for Sedgwick: (i) a long term commitment to lower
financial leverage (i.e. adjusted debt-to-EBITDA below 4.5x), (ii)
adjusted free cash flow-to-debt of 6% or better, and (iii)
adjusted (EBITDA minus capex) interest coverage of 3x or better.
Conversely, the following factors that could lead to a downgrade:
(i) adjusted debt-to-EBITDA ratio over 6.5x for a sustained
period, (ii) adjusted free cash flow-to-debt of 3% or less, or
(iii) adjusted (EBITDA minus capex) interest coverage below 1.5x.
Sedgwick is one of the largest claims service providers in the
United States. The company processes claims for a wide range of
insurance product lines including workers' compensation, general
liability, and disability insurance. For 2011, the company
generated revenues of $1 billion.
The principal methodology used in rating Sedgwick was Moody's
Global Rating Methodology for Insurance Brokers & Service
Companies, published in February 2012.
SHERIDAN GROUP: Moody's Revises Outlook on 'B3' CFR to Negative
---------------------------------------------------------------
Moody's Investors Service changed the outlook for The Sheridan
Group, Inc. to negative from stable and affirmed the company's B3
Corporate Family Rating (CFR), Caa1 Probability of Default Rating,
and B3 Senior Secured Notes rating. The change in the outlook
reflects the secular challenges facing the industry, the maturity
of its working capital facility and notes in April 2013 and 2014,
expectations for modest free cash flow generation, and limited
cushion of compliance with its financial maintenance test,
although Moody's expects some improvement in the degree of cushion
in the short term.
A summary of the actions follows.
Sheridan Group, Inc. (The)
Corporate Family Rating, unchanged B3
Probability of Default Rating, unchanged Caa1
Senior Secured Notes, unchanged B3, LGD3, 39%
Outlook, Negative from Stable
Ratings Rationale
Sheridan's B3 CFR reflect the print industry's negative secular
pressures and intense competition, as well as the company's high
leverage of approximately 4.3x debt-to-EBITDA (as per Moody's
standard adjustments and based on 2011 results). The company's
lack of scale, which amplifies competitive pressure, also
constrains the rating. Relatively flat revenue levels in 2011
offer a degree of support to the ratings as does a recent plant
consolidation and cost saving initiatives that should benefit
EBITDA levels to a degree. Moody's expects leverage to decline
modestly as the company anniversaries relatively weak Q1 and Q2
2011 quarterly performance.
The negative outlook reflects the ongoing secular pressures,
limited free cash flow, upcoming debt maturities in 2013 and 2014
which could prove challenging to address, and the modest degree of
cushion of compliance with its financial covenants even after
expected near term improvements in the metrics.
Liquidity is limited to cash generated from operations and a
partially drawn working capital facility as the company holds less
than $1million in cash as of year end 2011. Its revolver has been
partially drawn to fund the buyback of its notes at a discount.
The buybacks at a discount provide interest expense savings and
slight deleveraging, but limit revolver availability to meet
unanticipated liquidity needs. Moody's does expect availability to
increase during the course of the year, however.
The company's scale and capital structure, along with industry
fundamentals, constrain upward ratings momentum. Given the
magnitude of credit profile improvement required to sustain a
higher rating, based on the Sheridan's current size and the weak
industry fundamentals, an upgrade is unlikely absent a
transformative event that materially improves the capital
structure and / or scale of the company.
A decline in EBITDA triggered by a customer loss, operational
issues, or accelerated pricing pressure that led to leverage above
4.5x would likely lead to a downgrade. A violation of its
financial covenants could also lead to a downgrade as well as a
liquidity issue from a lack of availability of its working capital
facility, or an inability to refinance its notes at least a year
prior to maturity.
The principal methodology used in rating Sheridan Group was the
Global Publishing 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.
Headquartered in Hunt Valley, Maryland, Sheridan provides printing
solutions to niche markets within the specialty journal, catalog,
magazine and book segments. Sheridan operates through three
business segments -- Publications (54% of revenues), Catalogs (25%
of revenues), and Books (21% of revenues). Its annual revenue is
approximately $265 million.
SIAG AERISYN: Hiring Samples Jennings as Chapter 11 Counsel
-----------------------------------------------------------
SIAG Aerisyn, LLC, seeks Bankruptcy Court permission to employ
Samples, Jennings, Ray & Clem, PLLC, to represent it in the
Chapter 11 proceeding.
The services will be primarily performed by Thomas E. Ray, Esq.,
who has over 35 years of experience in bankruptcy matters
including complex chapter 11 matters. His present hourly rate is
$325. Also Brooke Oxner, paralegal, will perform service at $125
per hour, and Jacquie Fernandez and Charles Flynn, associates, may
perform services at $175 per hour.
Samples Jennings is holding in its trust account a $30,000
retainer to be applied on fees as approved by the Court. Other
members in the firm may also work on the case.
The firm did not represent the Debtor prior to the bankruptcy
filing.
According to the case docket, SIAG Aerisyn is required to file a
Chapter 11 Plan and accompanying disclosure statement by July 31,
2012. Schedules of assets and liabilities, statement of financial
affairs and other documents are due to be filed April 17.
About SIAG Aerisyn
SIAG Aerisyn LLC, aka Aerisyn LLC, filed a Chapter 11 petition
(Bankr. E.D. Tenn. Case No. 12-11705) on April 2, 2012 in its
hometown in Chattanooga, Tennessee. The Debtor manufactures wind
towers essential for wind turbines as alternative energy sources.
The plant is located in Chattanooga, employing roughly 84 persons.
Judge Shelley D. Rucker presides over the case. The Debtor
estimated up to $50 million in assets and debts.
SIAG AERISYN: Sec. 341 Creditors' Meeting Set for May 1
-------------------------------------------------------
The United States Trustee for the Eastern District of Tennessee in
Chattanooga will convene a meeting of creditors under 11 U.S.C.
Sec. 341(a) in the Chapter 11 case of SIAG Aerisyn LLC on May 1,
2012, at 10:00 a.m. at Basement Room 18, in Chattanooga.
Creditors are required to file proofs of claim by July 30, 2012.
Government proofs of claim are due Oct. 1, 2012.
Meanwhile, at a hearing on April 4, the Court approved the
Debtor's request to establish procedures for (A) payment of
prepetition utility bills, (b) utilities to request additional
assurance of payment, and (c)resolving disputes with utilities
relating to adequate assurance requests. The Debtor also won
authority to pay prepetition wages, payroll taxes, certain
employee benefits, and related expenses.
About SIAG Aerisyn
SIAG Aerisyn LLC, aka Aerisyn LLC, filed a Chapter 11 petition
(Bankr. E.D. Tenn. Case No. 12-11705) on April 2, 2012 in its
hometown in Chattanooga, Tennessee. The Debtor manufactures wind
towers essential for wind turbines as alternative energy sources.
The plant is located in Chattanooga, employing roughly 84 persons.
Judge Shelley D. Rucker presides over the case. Samples,
Jennings, Ray & Clem, PLLC, represents the Debtor as counsel. The
Debtor estimated up to $50 million in assets and debts.
SNOKIST GROWERS: Heads for Piecemeal Sale in Early May
------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Snokist Growers is tentatively scheduled for sale at
a May 7 hearing after a prior attempt at selling to Truitt
Brothers Inc. fell through and Del Monte Corp. declined to be a
stalking-horse at auction. A schedule tentatively arranged at an
April 6 hearing calls for buyers to submit bids by April 30, in
advance of the hearing in May to select the winning bidder and
approve the sale.
According to the report, the lawyer for Snokist said at the April
6 hearing that a sale to Truitt is "still a viable option."
Although Truitt originally was to submit a first bid of $42.5
million at auction, the auction didn't go ahead when Truitt didn't
waive conditions in the contract making its offer binding.
Although Del Monte Corp. indicated earlier that it would make an
offer to constitute the first bid at auction, Del Monte declined
to go ahead, leading to the April 6 hearing for approval of
alternate sale procedures.
This time, Snokist, the report notes, has tentative plans to sell
the assets piecemeal, with minimum prices. The lawyer for Snokist
said that Del Monte isn't completely out of the picture.
An order will be signed by the judge this week setting up sale
procedures formally.
About Snokist Growers
Headquartered in Yakima, Washington Snokist Growers --
http://www.snokist.com/-- is a century-old cooperative of fruit
growers. Snokist provides fresh and processed pears, apples,
cherries, plums, and nectarines.
Snokist Growers filed for Chapter 11 bankruptcy (Bankr. E.D. Wash.
Case No. 11-05868) on Dec. 7, 2011, with plans to liquidate after
sales couldn't recover from allegations that it violated food-
safety rules. Judge Frank L. Kurtz presides over the case.
Lawyers at Bailey & Busey LLC serve as the Debtor's counsel. In
its petition, the Debtor scheduled $69,567,846 in assets and
$73,392,906 in liabilities. The petition was signed by Jim Davis,
president.
Counsel for lender Rabo AgriFinance, as agent for itself and
KeyBank, is James Ray Streinz, Esq. -- rays@mcewengisvold.com --
at McEwen Gisvold, LLP. Counsel for KeyBank National Association
is Bruce W. Leaverton, Esq., at Lane Powell, P.C., in Seattle.
Robert D. Miller Jr., the United States Trustee for Region 14,
appointed three unsecured creditors to serve on the Official
Committee of Unsecured Creditors of Snokist Growers. The
Committee is represented by Metiner G. Kimel, Esq., at Kimel Law
Offices.
Keybank is represented by Bruce W. Leaverton, Esq., and Tereza
Simonyan, Esq., at Lane Powell PC
SOLYNDRA LLC: Treasury Audit Finds Review of Loan Was 'Rushed'
--------------------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that two government
agencies rushed a required review of the $535 million loan
guarantee to failed solar-power firm Solyndra LLC., the Treasury
Department's Inspector General said in an audit of the deal.
Derek Hawkins at Bankruptcy Law360 reports that according to the
federal audit, the Obama administration rushed the U.S. Treasury
Department's review of a $535 million loan guarantee issued to
bankrupt solar panel maker Solyndra LLC, and may have ignored some
of the department's concerns.
According to Law360, the Treasury's inspector general said that
the U.S. Department of Energy and the White House pressured
Treasury officials to finish the review quickly so the DOE could
send out a press release announcing the loan to Solyndra.
About Solyndra LLC
Founded in 2005, Solyndra LLC was a U.S. manufacturer of solar
photovoltaic solar power systems specifically designed for large
commercial and industrial rooftops and for certain shaded
agriculture applications. The Company had 968 full time employees
and 211 temporary employees. Solyndra has sold more than 500,000
of its panels since 2008 and generated cumulative sales of over
$250 million.
Fremont, California-based Solyndra and affiliate 360 Degree Solar
Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D.
Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at
least the third solar company to seek court protection from
creditors since August 2011.
Judge Mary F. Walrath presides over the Debtors' cases. The
Debtors are represented by Pachulski Stang Ziehl & Jones LLP as
legal adviser. AlixPartners LLP serves as noticing claims and
balloting agent. Imperial Capital LLC serves as the company's
investment banker and financial adviser. The Debtors also tapped
former Massachusetts Governor William F. Weld, now with the law
firm McDermott Will & Emery, to represent the company in
government investigations and related litigation. BDO Consulting,
a division of BDO USA, LLP, as financial advisor and BDO Capital
Advisors, LLC, serves as investment banker for the creditors'
panel.
Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven
unsecured creditors to serve on the Official Committee of
Unsecured Creditors of Solyndra LLC. The Committee has tapped
Blank Rome LLP as counsel.
In October 2011, the Debtors hired Berkeley Research Group, LLC,
and designated R. Todd Neilson as Chief Restructuring Officer.
Solyndra is at least the fourth solar company to seek court
protection from creditors since August 2011. Other solar firms
are Evergreen Solar and start-up Spectrawatt Inc., both of which
filed in August, and Stirling Energy Systems Inc., which filed for
Chapter 7 bankruptcy late in September.
Solyndra owed secured lenders $783.8 million, including
$527.8 million to the U.S. government pursuant to a federal loan
guarantee, and held assets valued at $859 million as of the
Petition date. The U.S. Federal Financing Bank, owned by the U.S.
Treasury Department, is the Company's biggest lender.
When they filed for Chapter 11, the Debtors pursued a two-pronged
strategy to effectuate either a sale of their business to a
"turnkey" buyer who may acquire substantially all of Solyndra's
assets or, if the Debtors were unable to identify any potential
buyers, an orderly liquidation of the assets for the benefit of
their creditors.
Solyndra did not receive acceptable offers to buy the business as
a going concern. Solyndra began piecemeal auctions of the assets
on Feb. 22, 2012. It has auctioned non-core assets and obtained
$6.2 million. Solyndra also took in $1.86 million from the sale
of miscellaneous equipment.
Solyndra LLC retained the exclusive right for filing a Chapter 11
plan until April 3.
STANADYNE HOLDINGS: James Borzi Named Chief Operating Officer
-------------------------------------------------------------
James W. Borzi, age 49, was appointed Chief Operating Officer of
Stanadyne Corporation effective April 1, 2012. Mr. Borzi will be
responsible for the manufacturing and supply chain operations for
the Company's global operations in the U.S., China, India and
Italy.
Since 2010, Mr. Borzi served as Vice President, Worldwide
Operations for Lennox International Inc., a global leader in the
heating, ventilation, air conditioning, and refrigeration markets.
Previously, he served as Senior Vice President, Global Operations
for AEES Platinum Equity Company from 2009 to 2010 as well as
Senior Vice President Operations, Americas for Alcoa Electrical
Electronic Solutions from 2006 to 2009. Prior to joining Alcoa,
Mr. Borzi was employed by Delphi Corporation and General Motors
Corporation where he held positions of increasing responsibility
over a span of 21 years. Mr. Borzi has a M.S. in Manufacturing
Management from Kettering University and a B.S in Mechanical
Engineering from Pennsylvania State University.
Mr. Borzi is an at-will employee and does not have an employment
agreement with Stanadyne Corporation. The written and unwritten
arrangements under which Mr. Borzi is compensated include:
* a base salary, reviewed each year by the Compensation
Committee of the Board of Directors and the Chief Executive
Officer;
* a monthly allowance for transportation costs;
* an annual allowance for financial planning, health and
wellness activities;
* eligibility for annual cash bonuses under the Company's
Employee Incentive Plan based on the achievement of pre-
determined financial performance measures established annually
by the Committee;
* eligibility for Company paid term life insurance in an amount
up to twice his annual salary;
* eligibility for Company paid long term disability insurance
coverage;
* a broad-based benefits package offered to all employees,
including participation in health and welfare programs for
medical, pharmacy, dental, life insurance and accidental death
and disability.
In connection with Mr. Borzi's appointment as COO, the Company
will seek approval from the Compensation Committee of Stanadyne
Holdings, Inc. for a grant of stock options. The Company
anticipates that any stock options granted to Mr. Borzi will be
under the terms of the Stanadyne Holdings, Inc. 2004 Equity
Incentive Plan.
Mr. Borzi does not have any relationships requiring disclosure
under Item 401(d) of Regulation S-K. Mr. Borzi does not have any
interests requiring disclosure under Item 404(a) of Regulation S-
K.
About Stanadyne Holdings
Stanadyne Corporation, headquartered in Windsor, Connecticut,
is a designer and manufacturer of highly-engineered precision-
manufactured engine components, including fuel injection equipment
for diesel engines. Stanadyne sells engine components to original
equipment manufacturers and the aftermarket in a variety of
applications, including agricultural and construction vehicles and
equipment, industrial products, automobiles, light duty trucks and
marine equipment. Revenues for LTM ended Sept. 30, 2010 were
$240 million.
The Company reported a net loss of $32.50 million in 2011. The
Company previously reported a net loss of $9.98 million in 2010,
following a net loss of $23.70 million in 2009.
The Company's balance sheet at Dec. 31, 2011, showed $367.46
million in total assets, $414.10 million in total liabilities,
$686,000 in redeemable non-controlling interest, and a $47.32
million total stockholders' deficit.
* * *
In January 2011, Moody's Investors Service confirmed Stanadyne
Holdings, Inc.'s Caa1 Corporate Family Rating and revised the
rating outlook to stable. The CFR confirmation reflects the
remediation of the Stanadyne's previous inability to file
financial statements in accordance with financial reporting
requirements contained in its debt agreements and expectations for
modest continued improvement in operating performance. Improved
operations, largely the result of positive momentum in key end
markets and restructuring activities, have allowed Stanadyne to
maintain positive funds from operations despite increased cash
interest expense. The company's $100 million 12% senior discount
notes began paying cash interest in February 2010.
In March 2012, 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.
STAR BUFFET: Files Chapter 11 Plan of Reorganization
----------------------------------------------------
Lynn Ducey, reporter at Phoenix Business Journal, notes that Star
Buffet Inc. has filed a plan for reorganization as part of its
Chapter 11 bankruptcy filing. If approved by the bankruptcy
court, the plan could result in the firm emerging from Chapter 11.
Based in Arizona, Star Buffet, Inc. filed for Chapter 11
protection (Bankr. D. Ariz. Case No. 11-27518) on Sept. 28, 2011.
Judge George B. Nielsen Jr. presides over the case. S. Cary
Forrester, Esq., at Forrester & Worth, PLLC, represents the
Debtor. The Debtor estimated both assets and debts of between
$1 million and $10 million.
STOCKRIDGE/SBE HOLDINGS: S&P Assigns 'B-' Corporate Credit Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned Las Vegas-based
Stockbridge/SBE Holdings LLC (SLS) its preliminary corporate
credit rating of 'B-'. The rating outlook is negative.
"At the same time, we assigned SLS' proposed $300 million first-
lien term loan due 2017 our preliminary issue-level rating of 'B-'
(at the same level as our preliminary corporate credit rating on
the company). We also assigned this debt a preliminary recovery
rating of '3', indicating our expectation of meaningful (50% to
70%) recovery for lenders in the event of a payment default. Our
preliminary ratings are subject to our review of final
documentation," S&P said.
The company plans to use proceeds from the proposed credit
facility, in conjunction with $115 in junior priority financing to
be raised within the next six months and approximately $29 million
in sponsor equity, to:
- fund the development, construction, and preopening costs for
SLS Las Vegas;
- establish an interest reserve to fund debt service during the
construction period and the first seven months following the
opening;
- repay approximately $35 million of existing debt; and
- fund transaction fees and expenses.
"Our preliminary 'B-' corporate credit rating on SLS reflects our
assessment of the company's business risk profile as 'vulnerable'
and our assessment of the company's financial risk profile as
'highly leveraged,' according to our criteria. Our business risk
profile assessment reflects the property's disadvantaged northern
Las Vegas Strip location, a highly competitive market with many
well-established operators, and the company's reliance on a single
property for cash flow generation," S&P said.
"We have also incorporated the vulnerability of new gaming
projects to uncertain demand and difficulties managing initial
costs," said Standard & Poor's credit analyst Michael Halchak,
"which can lead to poor profitability during the first several
months of operations." The project is a redevelopment of the
former Sahara Hotel & Casino and faces the associated construction
and execution risks that come with a renovation project, which are
lower than those of a new build, in our view.
"Our expectation for a muted supply of new properties coming onto
the Las Vegas Strip over the next several years should somewhat
offset these business risks somewhat," S&P said.
"In addition, we believe that continued positive visitation trends
will allow the market to absorb SLS' additional capacity," added
Mr. Halchak. "Furthermore, the rating incorporates our expectation
that management will successfully leverage the existing platform
of hotels, food and beverage (F&B) outlets, and nightlife venues
of sbe Entertainment Group (sbe), the manager of SLS Las Vegas, to
drive customer traffic."
"The negative rating outlook reflects our belief that the company
will be challenged to ramp up cash flow generation at the property
to a level sufficient to service the proposed capital structure.
While the rating incorporates a scenario in which the property
ramps up to the point that EBITDA generation in 2015 meets total
fixed charges under the proposed capital structure, this scenario
relies not just on strong execution by the management team, but
continued modest growth in gaming revenues and RevPAR on the Las
Vegas Strip. Given SLS' disadvantaged northern Strip location, a
highly competitive market with many well-established competitors,
and the vulnerability of new gaming projects to uncertain demand
and difficulties managing initial costs, the negative outlook
reflects the risks in achieving a sufficient ramp up in EBITDA to
meet fixed charges," S&P said.
"We would downgrade the rating to the 'CCC' category if the
company needs to raise any meaningful amount of junior debt at
current market interest rates, as we believe that, based on our
performance expectations, the capital structure would be
unsustainable. Additional downward rating pressure could result if
the property opens up materially worse than our expectations, or
if construction delays and cost overruns signal a potential
liquidity shortfall. A revision of the rating outlook to stable
would require a strong opening in 2014 and demonstration of an
ability to generate EBITDA sufficient to achieve EBITDA coverage
of total interest in excess of 1x," S&P said.
SUPERCONDUCTOR TECHNOLOGIES: Marcum LLP Raises Going Concern Doubt
------------------------------------------------------------------
Superconductor Technologies Inc. filed on March 30, 2011, its
annual report on Form 10-K for the fiscal year ended Dec. 31,
2011.
Marcum LLP, in Los Angeles, California, expressed substantial
doubt about Superconductor Technologies' ability to continue as a
going concern. The independent auditors noted that the Company
incurred significant net losses since its inception and has an
accumulated deficit of $251,016,000 and expects to incur
substantial additional losses and costs.
The Company reported a net loss of $13.38 million on $3.50 million
of revenues for 2011, compared with a net loss of $11.97 million
on $8.55 million of revenues for 2010.
The Company's balance sheet at Dec. 31, 2011, showed
$12.95 million in total assets, $1.77 million in total
liabilities, and stockholders' equity of $11.18 million.
A copy of the Form 10-K is available for free at:
http://is.gd/VGI2Ee
Santa Barbara, California-based Superconductor Technologies Inc.
develops and commercializes high temperature superconductor
("HTS") materials and related technologies.
SUPERMEDIA INC: Georgia Scaife Retires as EVP for Human Resources
-----------------------------------------------------------------
Georgia Scaife, former Executive Vice President - Human Resources
and Employee Administration of SuperMedia Inc., retired from the
Company effective March 31, 2012.
During her employment with the Company, Ms. Scaife participated in
the former GTE Corporation Executive Retiree Life Insurance Plan,
an unfunded non-qualified plan that was designed to provide
additional retirement income to certain management employees. In
order to be eligible to receive benefits under the ERLIP, a
participant (i) must have been within certain salary bands as of
Dec. 31, 2001, and (ii) must retire with a pension from a plan
that is sponsored by Verizon Communications Inc. or participating
affiliate. The exclusion of a participant who was eligible for a
deferred vested pension is waived if the employee has attained age
60 as of his or her termination date and has at least 10 years of
net credited service. Benefits under the ERLIP are payable in
lump sum, approximately six months following retirement.
In connection with Ms. Scaife's retirement, she is entitled to
$745,212 under the ERLIP, which will be paid in lump sum
approximately six months following her retirement.
The ERLIP was frozen by Verizon Communications Inc. in January
2002, and except for employees whose benefits are grandfathered
under the ERLIP, no other employees are eligible to participate in
the ERLIP.
About SuperMedia Inc.
DFW Airport, Texas-based SuperMedia Inc. and its subsidiaries
sells advertising solutions to its clients and places their
advertising into its various advertising media. The Company's
advertising media include Superpages yellow page directories,
Superpages.com, its online local search resource, the
Superpages.com network, an online advertising network, Superpages
direct mailers, and Superpages mobile, its local search
application for wireless subscribers.
The Company is the official publisher of Verizon Communications
Inc. print directories in the markets in which Verizon is
currently the incumbent local telephone exchange carrier. The
Company also has agreements with FairPoint Communications, Inc.,
and Frontier Communications Corporation in various Northeast and
Midwest markets in which FairPoint and Frontier are the local
exchange carriers.
On March 31, 2009, SuperMedia Inc., formerly known as Idearc Inc.,
and all of its domestic subsidiaries filed voluntary petitions for
Chapter 11 relief (Bankr. N.D. Tex. Lead Case No. 09-31828).
On Sept. 8, 2009, the Company filed its First Amended Joint Plan
of Reorganization with the Bankruptcy Court, which was later
modified on Nov. 19, 2009, and on Dec. 22, 2009, the Bankruptcy
Court entered an order approving and confirming the Amended Plan.
On Dec. 31, 2009 (the "Effective Date"), the Debtors consummated
the reorganization and emerged from the Chapter 11 bankruptcy
proceedings. On Dec. 29, 2011, the Bankruptcy Court entered final
decrees closing the bankruptcy cases for the Debtors.
The Company reported a net loss of $771 million in 2011 and a net
loss of $196 million in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $1.63 billion
in total assets, $2.42 billion in total liabilities and a $788
million total stockholders' deficit.
* * *
As reported in the TCR on Dec. 27, 2011, Standard & Poor's Ratings
Services raised its corporate credit rating on Dallas-based
SuperMedia Inc. to 'CCC+' from 'SD' (selective default). The
rating outlook is negative.
In the April 2, 2012, edition of the TCR, Moody's Investors
Service has changed the corporate family rating (CFR) for
SuperMedia Inc. to Caa3 from Caa1 based on Moody's view
that a debt restructuring is likely. Moody's expects ultimate
recoveries will be about 50%.
SuperMedia is attempting to reinvent its business by reducing its
reliance on print advertising through the development of online
and mobile directory service applications but Moody's has doubts
that the company will be able to transition its business away from
a reliance on print directories quickly enough to stabilize its
revenues and earnings and prevent a debt restructuring.
SWIFT SERVICES: S&P Raises $500M Sr. Secured Note Rating to 'B+'
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its issue rating on the
senior secured second-lien notes of Swift Services Holdings Inc.
to 'B+' from 'B'. "We simultaneously revised our recovery rating
on the notes to '4' from '5' to reflect our greater recovery
expectations in a simulated payment default. The '4' recovery
rating indicates that we now expect noteholders would receive
average (30%-50%) recovery. Swift Services Holdings Inc. is a
subsidiary of Phoenix, Ariz.-based trucking company Swift
Transportation Co.," S&P said.
"We revised our second-lien recovery expectations following the
projected reduction of first-lien claims that will result from
scheduled amortization of Swift Transportation Co. LLC's recently
closed $200 million B-1 term loan. Our simulated default scenario
involves the loss of a major customer (or two) in 2015 amid higher
fuel prices, rising interest rates, and lower economic activity.
This would result in lower revenue in 2014 and 2015 and pressure
on margins from rising costs leading to bankruptcy in 2015. We
believe that lenders would achieve greatest recovery value through
reorganization of the company rather than liquidation," S&P said.
RATINGS LIST
Swift Transportation Co.
Corporate credit rating B+/Stable/--
Issue Rating Raised; Recovery Rating Revised
To From
Swift Services Holdings Inc.
Senior secured (second lien)
$500 mil. 10% notes due 2018 B+ B
Recovery rating 4 5
TASEKO MINES: Moody's Issues Summary Credit Opinion
---------------------------------------------------
Moody's Investors Service's summary credit opinion on Taseko Mines
Limited and includes certain regulatory disclosures regarding its
ratings. The release does not constitute any change in Moody's
ratings or rating rationale for Taseko.
Moody's current ratings for Taseko Mines Limited are:
Long-Term Corporate Family Domestic Currency Ratings of B3
Senior Unsecured Foreign Currency Ratings of B3
Senior Unsecured Shelf Domestic Currency Ratings of (P)B3
Speculative Grade Liquidity Ratings of SGL-3
LGD Senior Unsecured Foreign Currency Ratings of 52 - LGD4
Probability of Default Ratings of B3
RATINGS RATIONALE
Moody's ratings for Taseko are constrained by its lack of
operational diversity and the risks associated with the growth
plans of the company. Taseko is heavily reliant on a single
operation, the Gibraltar mine. The company is in the process of
expanding production at Gibraltar for the third time, which would
nearly double the mine's annual production capacity. That said, a
single mine company like Taseko could have its business severely
curtailed with only a single negative operational event.
Inherent volatility of copper prices and substantial expansion
costs are key drivers of the B3 rating. Risks include completion
and cost overruns associated with the development and expansion of
their mines. Any adverse impact to their operations at this stage
of development will magnify the risks posed by the narrow
operating base.
Taseko's strengths include its reserves, the low cost of the
Gibraltar mine which supports strong EBIT margin and interest
coverage and adequate liquidity over the near term.
Rating Outlook
The stable outlook is supported by the company's sales strategy,
which includes long-term contracts, and Moody's positive view on
copper fundamentals going forward.
What Could Change the Rating - Up
The ratings could be revised upward if Taseko successfully
completes its expansion plans and demonstrates that it can
consistently generate positive free cash flow to service its debt.
As more mines make positive contributions to the company's cash
flow, the greater the operational diversity and positive momentum
for the rating.
What Could Change the Rating - Down
The ratings could come under pressure if the company experiences a
significant production shortfall from targeted levels. The ratings
also could be lowered from higher than expected capital
expenditures, aggressive debt-financed acquisitions, impairment of
liquidity arrangements, or unanticipated shareholder-friendly
activities.
The principal methodology used in rating Taseko Mines Limited 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.
TRAILER BRIDGE: Emerged From Chapter 11 on April 2
--------------------------------------------------
Trailer Bridge announced that April 2 its Second Amended Plan of
Reorganization became effective, and the Company emerged from
Chapter 11 protection. Under the restructuring, the Company's
largest public noteholders, including SEACOR Holdings and
Whippoorwill Associates, which collectively represented a majority
of the $82.5 million in 9.25% Senior Secured Notes, will receive
at least 91% of new stock in Trailer Bridge and retain a $65
million debt instrument.
As a result, SEACOR Holdings is now the Company's largest
stakeholder, will have three seats on the board and intends to
assist the Company in implementing its strategy to return to
profitable operations. Holders of Trailer Bridge equity will
receive a cash payment of $0.15 per share. Those shareholders with
more than 2,500 shares will have the option to elect to receive
their share of 9% of the reorganized Company's common equity.
Certain of the majority noteholders provided $31.5 million in exit
financing as part of the Company's Plan.
The Company also said:
* Certain of the Majority Note Holders provided $31.5 million
in exit financing as part of the Company?s plan.
* As a result of Trailer Bridge securing $31.5 million in exit
financing from its Majority Note Holders, the Company will pay
unsecured creditors and contract parties 95%-100% payment on their
pre-filing claims.
* Holders of Trailer Bridge Equity will receive a cash payment
of $0.15 per share. Those shareholders that hold more than 2,500
shares will have the option to elect to receive their share of 9%
of the reorganized Company?s common equity.
* Trailer Bridge expects its new stock to continue trading on
the Pink Sheets under the ticker symbol "TRBR", and will no longer
be filing reports with the Securities and Exchange Commission
William G. Gotimer, Jr. and Mark A. Tanner, the Company's co-Chief
Executive Officers, jointly stated, in the April 2 press release,
"Today marks the beginning of a new era for Trailer Bridge. While
we are pleased to announce today's developments, we are most proud
of the fact that throughout the bankruptcy period we have
successfully and consistently met the needs of our customers and
vendors. Trailer Bridge has a young fleet of vessels and a cost-
friendly model that provides significant benefits to our
customers. With this new capital structure and ownership we
believe we can improve our service in a number of ways to the
benefit of all concerned."
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 bankruptcy 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.
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.
On Dec. 6, 2011, the U.S. Trustee appointed an Official Committee
of Unsecured Creditors in the Debtor's case.
As reported in the TCR on March 30, 2012, Trailer Bridge Inc. has
emerged from Chapter 11 with Seacor Holdings as its new majority
owner.
Judge Jerry Funk in the U.S. Bankruptcy Court for the Middle
District of Florida in Jacksonville confirmed the company's
reorganization plan last week. Under the terms of the plan,
Seacor and fellow bondholders Whippoorwill Associates and Edge
Asset Management get a $65 million debt instrument and 91% of a
reorganized Trailer Bridge. Seacor, Whippoorwill and Edge
provided $31 million in exit financing, court papers said.
The reorganization plan also allows secured creditors to be paid
95% to 100% of their claims in cash while holders of common stock
get 9% of new stock.
TRIDENT MICROSYSTEMS: Sigma Designs Okayed to Buy TV Business
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Trident Microsystems Inc. was authorized by the
bankruptcy court on April 5 to sell the television business for
about $22.5 million in cash to Sigma Designs Inc. The sale price
is subject to adjustments under the agreement approved by the
bankruptcy court in Delaware. Patents aren't among the assets
being sold.
About Trident Microsystems
Sunnyvale, California-based Trident Microsystems, Inc., 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 then promptly sought 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 disclosed $310 million in assets and $39.6 million in
liabilities as of Oct. 31, 2011.
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 Equity Security Holders.
The Debtors won approval in March 2012 to sell its set-top box
business to Entropic Communications Inc. for $65 million.
TRIDENT USA: S&P Assigns Preliminary 'B' Corp. Credit Rating
------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
'B' corporate credit rating to Sparks, Md.-based Trident USA
Health Services LLC. Rating outlook is stable.
"We assigned our preliminary 'B+' issue rating, one notch above
the corporate credit rating, and preliminary '2' recovery rating
to Trident's proposed $225 million first-lien credit facility,
indicating our expectation for substantial (70% to 90%) recovery
of principal for first-lien lenders in the event of payment
default. The facility consists of a $50 million revolving credit
facility due 2016 and a $175 million term loan due 2017," S&P
says.
"Additionally, we assigned a preliminary 'CCC+' issue rating, two
notches below the corporate credit rating, and our preliminary '6'
recovery rating, to the proposed $100 million second-lien term
loan due 2017, indicating our expectation for negligible (0% to
10%) recovery of principal in the event of payment default. The
debt is being co-issued by Trident subsidiaries MX USA Inc. and
Kan-Di-Ki LLC," the ratings agency adds.
Rationale
"Our preliminary rating on Trident reflects our assessment of the
company's business risk profile as "weak" and the financial risk
profile as "highly leveraged." We expect revenue to increase by
approximately 10% per year, primarily reflecting continued
acquisitions and the expansion of service offerings to existing
and acquired customers, along with steady reimbursement
rates on both the federal and state levels. We expect overall
EBITDA margins to increase by approximately 250 basis points (over
actual 2011 margins), primarily driven by higher margin X-ray and
ultrasound businesses," S&P relays.
Trident's highly leveraged financial risk profile is reflected in
S&P's calculation of debt to EBITDA (pro forma for the new debt of
6.0x as of Dec. 31. 2011) declining to about 5.3x at the end of
2012. Discretionary cash flow was below $15 million for the past
two years; while S&P expects approximately $20 million to $25
million of discretionary cash flow on an annual basis, S&P
believes the company will use the majority to fund its acquisition
strategy, rather than lowering debt. S&P does not expect any
shareholder dividends.
The weak business risk profile reflects S&P's view of Trident's
aggressive roll-up strategy, competition, and reimbursement risk,
despite offsetting strong growth prospects. Trident provides
mobile health care services to acute health care facilities.
Skilled nursing homes (SNF), assisted living facilities,
correctional facilities, and home health/hospice are 78%, 8%, 8%,
and 2% of customer revenues, respectively. Primary services
include x-rays, laboratory testing, and sonograms (70%, 19%, and
11% of revenues, respectively). Despite its geographic and
customer diversity, Medicare reimbursement is an ongoing risk
factor. Medicare payments to Trident are roughly 85% of revenues,
one-half of which are billed directly to Medicare, and one-half
reimbursed indirectly from health care facilities. In S&P's
opinion, commercial payors, at only 11% of revenues, do not
provide an offset. The risk of sweeping reductions in
reimbursement is somewhat mitigated by dispersion, because its
services are billed under various Medicare schedules, codes, and
components. One of these key components--transportation--varies by
state, as well; Trident operates in 42 states. Reimbursement
trends have been slightly positive over the past three years, but
any reduction in reimbursement of per diem patient payments by
Medicare to health care facilities (particularly nursing homes)
could hurt Trident because Medicare Part A is approximately 40% of
revenues. S&P do note, however, that Trident has not seen any
effect of the 2011 Medicare nursing home rate cut in any of its
contract renewals since the cut was announced. Trident serves over
12,000 providers: Its top 500 customers account for only 39% of
revenues, obviating any customer concentration risk. Contractual
relationships give Trident the right to provide operations (at
established pricing), with nor obligation or exclusivity on the
part of the customer.
The low barriers to entry characteristic to the industry
contribute to S&P's weak business assessment. The mobile health
care services industry is highly fragmented, and while Trident is
the only national player with materially greater scale than its
next-largest competitor, it has a low market share.
Competition is primarily from regional participants and hospitals.
Acute health care facilities typically outsource services because
there is insufficient demand per facility to economically justify
maintaining X-ray equipment and a technician on-site. Trident's
teleradiology network provides X-ray reads from board-certified
radiologists with rapid turnaround time. Mobile services (e.g.,
bedside testing) are superior to patient transport in
terms of lowering cost, reducing injury risk, and helping SNFs
manage more medically complex patients.
Trident has pursued an aggressive growth strategy in this
fragmented industry, acquiring 34 companies since 2003; it now has
a national infrastructure with eight regional offices. While
Trident can reap benefits from economies of scale in dispatching
equipment and technicians, customer billing and collection, and
regulatory compliance, S&P has not seen unadjusted margin
improvements over the past two years. Still, this infrastructure
gives Trident a competitive advantage over smaller, less
sophisticated competitors, and S&P expects some modest improvement
in 2012. Health care facility relationships (typically with one
point of contact responsible for the relationship) are
cross-selling opportunities. Much of Trident's organic growth is
from cross-selling sonogram and laboratory services to existing X-
ray customers, which resulted in a majority of customers
contracting for multiple services. Over the medium term, Trident
wants to leverage this relationship to provide additional clinical
mobile services such as optometry, audiology, podiatry, and
dentistry. S&P believes it will acquire small regional
participants that offer these services as an additional growth
initiative. It also expects Trident to continue growing by
expanding in existing markets and entering new markets via de novo
efforts and acquisitions.
Liquidity
Trident's liquidity is "adequate" for its needs. Sources of cash
likely will exceed uses over the next 12 months. Relevant aspects
of Trident's liquidity are:
- With estimated sources exceeding uses by approximately $50
million, S&P expects coverage of uses to be over 2x for the
next 12 months.
- Sources of liquidity include about $5 million of balance sheet
cash, $40 million of discretionary cash flow, and access to a
$50 million revolving credit facility;
- Uses include capital expenditures of between $12 million to $15
million and acquisitions assumed at approximately $25 million
per year, although Trident could make larger acquisitions;
- A 20% to 25% cushion on financial maintenance covenants; and
- No significant debt maturities until 2017.
Outlook
"Our stable rating outlook on Trident reflects our expectation
that growth strategies will absorb available cash flow for debt
reduction. We have not forecast meaningful operating efficiencies
for the next year, limiting EBITDA growth. We expect credit
protection measures to remain at or near current levels through
2012. Given minimal reimbursement pressures (evidenced by
recent contract renewals at consistent pricing levels), we do not
expect to downgrade Trident over the coming year because of
meaningfully lower-than-expected revenues. However, an aggressive
acquisition strategy resulting in revolver drawdowns that reduce
Trident's covenant cushion to below 10% and impairs liquidity
could lead to a downgrade," S&P says.
An upgrade would be predicated on lower debt leverage of
approximately 4.5x, achieved through strong EBITDA growth, and our
confidence that the lower debt level is sustainable.
Ratings List
New Ratings
Trident USA Health Services, LLC
Corporate Credit Rating B(prelim)/Stable/--
MX USA Inc.
Kan-Di-Ki LLC
$50M first-lien revolver due 2016 B+(prelim)
Recovery Rating 2(prelim)
$175M term loan due 2017 B+(prelim)
Recovery Rating 2(prelim)
$100M second-lien term loan due 2017 CCC+(prelim)
Recovery Rating 6(prelim)
US FIDELIS: Ex-Owner Pleads Guilty of Customer Refunds Theft
------------------------------------------------------------
Sindhu Sundar at Bankruptcy Law360 reports that a former owner of
U.S. Fidelis Inc. pled guilty Thursday in Missouri state court to
charges that he had improperly withheld customer refunds, shortly
before a Missouri federal court reportedly unsealed charges that
the company's owners had taken $71 million from the firm.
About US Fidelis
Wentzville, Missouri-based US Fidelis, Inc., was a marketer of
vehicle service contracts developed by independent and unrelated
companies. It stopped writing new business in December 2009.
The Company filed for Chapter 11 bankruptcy protection (Bankr.
E.D. Mo. Case No. 10-41902) on March 1, 2010. Brian T. Fenimore,
Esq., Crystanna V. Cox, Esq., James Moloney, Esq, at Lathrop &
Gage L.C., in Kansas City, Mo.; and Laura Toledo, Esq., at Lathrop
& Gage, in Clayton, Mo., assist the Debtor in its restructuring
effort. According to the schedules, the Company had assets of
$74,386,836, and total debts of $25,770,655 as of the petition
date.
Allison E. Graves, Esq., Brian Wade Hockett, Esq., and David A.
Warfield, Esq., at Thompson Coburn LLP, in St. Louis, Mo.,
represent the Official Unsecured Creditors Committee.
VALDIVIA PRODUCE: Owes $1.2MM to 40 PACA Claimants
--------------------------------------------------
The Packer reports that more than 40 companies say Valdivia
Produce Corp., dba Hunts Point Tropicals Inc., owes them
$1.2 million under the Perishable Agricultural Commodities Act,
but how much they recover depends on the sale of three units on
the Hunts Point Terminal Market.
According to the report, a federal bankruptcy judge ordered the
company to sell its three units at the Hunt's Point terminal
market to pay creditors. However, a dispute about who will be
allowed to buy those units -- and their value -- could be bad news
for PACA claimants, according to an attorney involved in the case.
"This is of enormous interest to the PACA creditors because it
could mean a 25% difference in what they recover," the report
quotes attorney Paul Gentile, Esq., who represents some of the
creditors as well as C and J Bros. Inc., as saying.
The report notes C and J Bros. is a member of the terminal
market, but it does not have a seat on the terminal board. It bid
$1 million for the three Hunts Point Tropicals terminal units in
August 2011.
The report, citing court documents, relates that the terminal
board rejected the bid, citing concerns about C and J Bros.'
finances. The company resubmitted the bid, along with bank
statements and other documents showing working capital of
$2.63 million and cash on hand of $2.6 million. The board again
rejected C and J Bros., refusing to provide a reason, Mr. Gentile
said.
According to the report, the judge ordered a second auction, which
took place Dec. 16. Two bidders participated: C and J Bros. bid
$1 million and A&J Produce Corp., bid $750,000. A&J has a seat on
the terminal board. The judge ruled Dec. 20 that C and J's bid
was the winner. However, the board rejected it again in January,
even though C and J offered to pay for a year's worth of
maintenance fees upfront. Instead, the board accepted the lower
bid from A&J. The bankruptcy judge asked the board's attorney
why, but he declined to answer.
The report notes, in the meantime, three other units on the
same block in the terminal sold for $900,000. When Mr. Gentile
asked the bankruptcy judge to intervene, she told him to take the
matter to New York state court. He did, and a hearing is set for
April 16. The terminal board has allowed A&J to take "interim
possession" of the units, Mr. Gentile said.
The report says, if the bankruptcy case concludes before the state
court resolves the sale issue, Mr. Gentile said the bankruptcy
judge has told him payments will be made to creditors based on the
$750,000 sale price.
USDA Administrative Action
According to the report, the U.S. Department of Agriculture filed
an administrative action against Hunts Point Tropicals over
allegedly incurring $1.2 million in Perishable Agricultural
Commodities Act claims from July 2010 through June 2011.
The report adds the company and its president, Nessim Martinez,
have 30 days to respond to the April 2 notice, according to Travis
Hubbs, a PACA investigator and mediator. The company and Martinez
could face sanctions and be barred from working in the produce
industry, depending on the outcome of the PACA case.
According to the report, some of the companies with the largest
PACA claims against Hunts Point Tropicals are:
-- Nico-Mexi Food Inc., Chicago, for $163,385;
-- 7 Monkeys LLC, Palisades Park, N.J., for $108,577;
-- Amazona Tropical Farms, New York City, for $70,787;
-- Paul Steinberg Associates, New York City, for $68,939;
-- Jerry Shulman Produce, Hicksville, N.Y., for $54,415;
-- Index Fresh Inc., Bloomington, Calif., for $49,245; and
-- Weis-Buy Farm Inc., Ft. Myers, Fla., for $45,532.
Based in Bronx, New York, Valdivia Produce Corp., dba Hunts Point
Tropical, filed for Chapter 11 protection (Bankr. S.D.N.Y. Case
No. 11-12265) on May 11, 2011. Jonathan S. Bodner, Esq., at
Neiger LLP, represents the Debtor. The Debtor listed both assets
and debts of between $1 million and $10 million.
VIASYSTEMS GROUP: S&P Places 'BB-' Notes Rating on CreditWatch
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' corporate
credit rating on St. Louis-based printed circuit board (PCB)
manufacturer Viasystems Group Inc.
"At the same time, we placed our 'BB-' issue level rating on the
company's senior secured notes on CreditWatch with negative
implications," S&P said.
The action follows the company's announcement that it has reached
a definitive agreement to purchase U.S. PCB manufacturer DDi Corp.
in an all-cash transaction value of $283 million.
"We placed our issue-level rating on CreditWatch Negative due to
increased debt and potentially diminished recovery prospects on
the senior secured notes," said Standard & Poor's credit analyst
William Backus. "The senior secured notes currently have a '4'
recovery rating, indicating an expectation for average (30%-50%)
recovery in the event of a payment default."
"We affirmed our 'BB-' corporate credit rating on Viasystems since
it had debt capacity within the current rating to complete the
proposed acquisition of DDi," S&P said.
"The corporate credit rating affirmation reflects our view that
Viasystems has sufficient incremental leverage capacity within the
rating to absorb the proposed acquisition," added Mr. Backus. "The
rating allows for leverage under 4x through a cycle and we expect
pro forma leverage to rise to about 3x from 1.6x in December 2011.
We believe that Viasystems preserves some capacity to absorb
industry cyclicality, albeit on a reduced basis."
"With pro forma revenues of $1.3 billion as of Dec. 31, 2011, we
estimate the combined company will become the second-largest PCB
manufacturer in the fragmented North American PCB market. We
believe that DDi will complement Viasystems' operations by
expanding its product and customer base, particularly within the
military/aerospace end markets. The acquisition requires consent
of DDi shareholders and customary regulatory approval, and is
likely to close late in the second quarter or early in third
quarter of calendar year 2012. The proposed debt funded
transaction received a financing commitment from a group of
lenders; terms and conditions of the debt financing were not made
public. The total transaction value for the acquisition is $283
million," S&P said.
"However, we view the increased debt related to the acquisition of
DDi as a potential negative for the company's senior secured notes
recovery profile. Specifically, we placed our 'BB-' issue level
rating on CreditWatch with negative implications due to increased
debt and potentially diminished recovery prospects on the senior
secured notes in the event that the proposed $300 million debt
issuance is pari passu with existing senior secured notes.
Alternatively, if the company issues $300 million of notes which
are contractually subordinated to the existing secured notes,
there may not be any rating impact on the existing secured notes,"
S&P said.
"Pro forma for the proposed transaction, Viasystems' adjusted
leverage will increase to 3.0x from 1.6x as of Dec. 31, 2011, due
to the increased debt, partly offset by DDi's EBITDA contribution
of about $34 million," S&P said.
"We currently view Viasystems' business risk profile as weak,
reflecting its operation in the highly cyclical PCB industry and
technology risks inherent in the contract manufacturing market.
PCB demand faces considerable volatility through the business
cycle and, when combined with high fixed manufacturing costs, the
industry can experience wide profitability swings. Both
Viasystems' established position in low-cost manufacturing
locations and its leading original equipment manufacturer customer
base across a number of end markets partially offset those
weaknesses," S&P said.
"Standard & Poor's will monitor the progress of the acquisition
and the terms and conditions of the debt financing, specifically,
whether the proposed debt will be secured or unsecured, inter
alia, in determining the issue-level rating outcome," S&P said.
VITRO SAB: U.S. Trial in June on Enforcement of Plan
----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Vitro SAB must convince a U.S. bankruptcy judge at a
trial beginning June 4 that the procedure used by the Mexican
court in approving the company's reorganization "meets the
fundamental standards of fairness in the U.S." Bondholders have
opposed the Mexican reorganization, saying it was improperly based
on $1.9 billion in insider votes to overcome opposition from
holders of some of the $1.2 billion in defaulted bonds.
According to the report, U.S. Bankruptcy Judge Harlin "Cooter"
Hale in Dallas said in a ruling April 4 that he will determine at
the June trial whether enforcing the Mexican reorganization "would
be manifestly contrary to the public policy of the U.S."
Mr. Rochelle notes that Judge Hale may never have a chance to
rule, in view of appeals the bondholders are taking in two other
courts. In an appeal to be argued on May 1, the U.S. Court of
Appeals in New Orleans might reach the question of whether the
Mexican plan violates notions of fairness and thus shouldn't be
enforced in the U.S. The bondholders are also appealing Hale's
ruling from last year that gave Vitro protection in Chapter 15. On
April 5, U.S. District Judge A. Joe Fish in Dallas asked both
sides to submit more papers on the question of whether Vitro's two
foreign representatives meet the statutory standard required to
sustain a Chapter 15 case.
The suit in bankruptcy court to decide if the Mexican
reorganization will be enforced in the U.S. is Vitro SAB de CV
v. ACP Master Ltd. (In re Vitro SAB de CV), 12-03027, U.S.
Bankruptcy Court, Northern District Texas (Dallas). The
bondholders' appeal in the circuit court is Ad Hoc Group of
Vitro Noteholders v. Vitro SAB de CV (In re Vitro SAB de CV),
11-11239, U.S. Court of Appeals for the Fifth Circuit (New
Orleans). The bondholders' appeal of Chapter 15 recognition is
Ad Hoc Group of Vitro Noteholders v. Vitro SAB de CV (In re
Vitro SAB de CV), 11-02888, U.S. District Court, Northern
District of Texas (Dallas).
About Vitro SAB
Headquartered in Monterrey, Mexico, Vitro, S.A.B. de C.V. (BMV:
VITROA; NYSE: VTO), through its two subsidiaries, Vitro Envases
Norteamerica, SA de C.V. and Vimexico, S.A. de C.V., is a global
glass producer, serving the construction and automotive glass
markets and glass containers needs of the food, beverage, wine,
liquor, cosmetics and pharmaceutical industries.
Vitro is the largest manufacturer of glass containers and flat
glass in Mexico, with consolidated net sales in 2009 of MXN23,991
million (US$1.837 billion).
Vitro defaulted on its debt in 2009, and sought to restructure
around US$1.5 billion in debt, including US$1.2 billion in notes.
Vitro launched an offer to buy back or swap US$1.2 billion in debt
from bondholders. The tender offer would be consummated with a
bankruptcy filing in Mexico and Chapter 15 filing in the United
States. Vitro said noteholders would recover as much as 73% by
exchanging existing debt for cash, new debt or convertible bonds.
Concurso Mercantil & Chapter 15 Proceedings
Vitro SAB on Dec. 13, 2010, filed its voluntary petition for a
pre-packaged Concurso Plan in the Federal District Court for
Civil and Labor Matters for the State of Nuevo Leon, commencing
its voluntary concurso mercantil proceedings -- the Mexican
equivalent of a prepackaged Chapter 11 reorganization. Vitro SAB
also commenced parallel proceedings under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-16619) in Manhattan
on Dec. 13, 2010, to seek U.S. recognition and deference to its
bankruptcy proceedings in Mexico.
Early in January 2011, the Mexican Court dismissed the Concurso
Mercantil proceedings. But an appellate court in Mexico
reinstated the reorganization in April 2011. Following the
reinstatement, Vitro SAB on April 14, 2011, re-filed a petition
for recognition of its Mexican reorganization in U.S. Bankruptcy
Court in Manhattan (Bankr. S.D.N.Y. Case No. 11- 11754).
The Vitro parent received sufficient acceptances of its
reorganization by using the US$1.9 billion in debt owing to
subsidiaries to vote down opposition by bondholders. The holders
of US$1.2 billion in defaulted bonds opposed the Mexican
reorganization plan because shareholders could retain ownership
while bondholders aren't being paid in full.
Vitro announced in March 2012 that it has implemented the
reorganization plan approved by a judge in Monterrey, Mexico.
In the present Chapter 15 case, the Debtor seeks to block any
creditor suits in the U.S. pending the reorganization in Mexico.
Chapter 11 Proceedings
A group of noteholders opposed the exchange -- namely Knighthead
Master Fund, L.P., Lord Abbett Bond-Debenture Fund, Inc.,
Davidson Kempner Distressed Opportunities Fund LP, and Brookville
Horizons Fund, L.P. Together, they held US$75 million, or
approximately 6% of the outstanding bond debt. The Noteholder
group commenced involuntary bankruptcy cases under Chapter 11 of
the U.S. Bankruptcy Code against Vitro Asset Corp. (Bankr. N.D.
Tex. Case No. 10-47470) and 15 other affiliates on Nov. 17, 2010.
Vitro engaged Susman Godfrey, L.L.P. as U.S. special litigation
counsel to analyze the potential rights that Vitro may exercise
in the United States against the ad hoc group of dissident
bondholders and its advisors.
A larger group of noteholders, known as the Ad Hoc Group of Vitro
Noteholders -- comprised of holders, or investment advisors to
holders, which represent approximately US$650 million of the
Senior Notes due 2012, 2013 and 2017 issued by Vitro -- was not
among the Chapter 11 petitioners, although the group has
expressed concerns over the exchange offer. The group says the
exchange offer exposes Noteholders who consent to potential
adverse consequences that have not been disclosed by Vitro. The
group is represented by John Cunningham, Esq., and Richard
Kebrdle, Esq. at White & Case LLP.
A bankruptcy judge in Fort Worth, Texas, denied involuntary
Chapter 11 petitions filed against four U.S. subsidiaries. On
April 6, 2011, Vitro SAB agreed to put Vitro units -- Vitro
America LLC and three other U.S. subsidiaries -- that were
subject to the involuntary petitions into voluntary Chapter 11.
The Texas Court on April 21 denied involuntary petitions against
the eight U.S. subsidiaries that didn't consent to being in
Chapter 11.
Kurtzman Carson Consultants is the claims and notice agent to
Vitro America, et al. Alvarez & Marsal North America LLC, is the
Debtors' operations and financial advisor.
The official committee of unsecured creditors appointed in the
Chapter 11 cases of Vitro America, et al., has selected Sarah
Link Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP, in
Dallas, Texas, and Michael S. Stamer, Esq., Abid Qureshi, Esq.,
and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP,
in New York, as counsel. Blackstone Advisory Partners L.P.
serves as financial advisor to the Committee.
The U.S. Vitro companies sold their assets to American Glass
Enterprises LLC, an affiliate of Sun Capital Partners Inc., for
US$55 million.
U.S. subsidiaries of Vitro SAB are having their cases converted
to liquidations in Chapter 7, court records in January 2012 show.
In December, the U.S. Trustee in Dallas filed a motion to convert
the subsidiaries' cases to liquidations in Chapter 7. The
Justice Department's bankruptcy watchdog said US$5.1 million in
bills were run up in bankruptcy and hadn't been paid.
WASHINGTON MUTUAL: Trustee to Issue Summary Statements April 16
---------------------------------------------------------------
The WMI Liquidating Trust, which was formed pursuant to the
recently confirmed Seventh Amended Joint Plan of Affiliated
Debtors under Chapter 11 of the United States Bankruptcy Code of
Washington Mutual, Inc. announced that on or about April 16, 2012,
it will begin issuing summary statements to holders of Liquidating
Trust Interests who returned a Form W-8 or Form W-9 in connection
with the solicitation of acceptances on and elections pursuant to
the Plan. As previously announced, the Plan became effective on
March 19, 2012.
The summary statements to be issued on or about April 16, 2012,
will provide a summary of the value of a particular holder's
Allowed Claim (as defined in the Plan) as of the Effective Date,
distributions made with respect to such claim, and the balance of
Liquidating Trust Interests held by that holder after giving
effect to such distributions made on March 23, 2012. An initial
valuation of the Liquidating Trust Interests also will be included
in these statements, for tax reporting purposes. At the end of
each calendar quarter, subsequent statements reflecting updated
information will be mailed to holders of Liquidating Trust
Interests.
The Liquidating Trust also announced today that on March 23, 2012,
consistent with the Plan, a onetime disbursement of $326.8 million
(or $335 million less a "holdback" in respect of the payment of
certain professional fees as contemplated by the Plan) was made to
members of Class 17A (as described in the Plan) across holders of
approximately $6.1 billion of claims (after giving effect to
adjustments for applicable exchange rates for foreign currency, if
any) and that no additional distributions of cash or Liquidating
Trust Interests will be issued to members of Class 17A. The chart
below summarizes the cash distribution rates for Class 17A by
security and CUSIP.
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- was the holding company for Washington
Mutual Bank as well as numerous non-bank subsidiaries.
Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S.
government regulators. The next day, WaMu and its affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns
100% of the equity in WMI Investment. When WaMu filed for
protection from its creditors, it disclosed assets of
$32,896,605,516 and debts of $8,167,022,695. WMI Investment
estimated assets of $500 million to $1 billion with zero debts.
WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal &
Manges LLP in New York City; Mark D. Collins, Esq., at Richards,
Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari,
Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver &
Hedges, LLP. The Debtor tapped Valuation Research Corporation as
valuation service provider for certain assets.
Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New
York, and David B. Stratton, Esq., at Pepper Hamilton LLP in
Wilmington, Del., represent the Official Committee of Unsecured
Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and
William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the
Equity Committee. The official committee of equity security
holders also tapped BDO USA as its tax advisor. Stacey R.
Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis,
Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent
JPMorgan Chase, which acquired the WaMu bank unit's assets prior
to the Petition Date.
Records filed Jan. 24, 2012, say that Washington Mutual Inc.,
former owner of the biggest U.S. bank to fail, has spent
$232.8 million on bankruptcy professionals since filing its
Chapter 11case in September 2008.
In March 2012, the Debtors' Seventh Amended Joint Plan of
Affiliated, as modified, and as confirmed by order, dated Feb. 23,
2012, became effective, marking the successful completion of the
chapter 11 restructuring process.
The Plan is based on a global settlement that removed opposition
to the reorganization and remedy defects the judge identified in
September. The plan is designed to distribute $7 billion. Under
the reorganization plan, WaMu established a liquidating trust to
make distributions to parties-in-interest on account of their
allowed claims.
WCA WASTE: Moody's Cuts Rating on Sr. Unsecured Notes to 'Caa2'
---------------------------------------------------------------
Moody's Investors Service lowered the rating on WCA Waste
Corporation's untendered senior unsecured notes to Caa2 from B3,
concluding the review for possible rating downgrade that commenced
on December 22, 2011. Approximately $3 million of the originally
$175 million par value of notes remained outstanding after the
tender process, which coincided with the company's buy-out by
Macquarie Infrastructure Partners II.
Ratings Rationale
The two-notch instrument rating downgrade reflects the high risk
of loss for holders in a stress scenario as the stub notes
comprise an effectively junior, covenant-stripped debt class
within the company's, now mostly secured, bank debt structure.
All other ratings of WCA, including the corporate family rating of
B2, remain unaffected. The CFR reflects WCA's small revenue base,
limited interest coverage metrics, a record of no net income since
2008 and no free cash flow since 2009. The rating also
contemplates that the operating environment should gradually
improve as U.S. solid waste volumes, which have declined for
several years, begin growing again in 2012. WCA's geographically
dispersed portfolio of collection and disposal operations should
benefit from the expected positive national volume trend.
While more changes occurred within the executive management team
than Moody's anticipated following conclusion of the buy-out on
March 23, 2012, the stable rating outlook and the B2 CFR are
unaffected. The company's long-standing CFO, who was expected to
take on new responsibilities within the team, has departed and
WCA's President/COO will continue in only a part-time role as WCA
searches for a replacement. Divisional management staff remains
unchanged and Moody's anticipates continuation of the existing
operational plan. A managing director from Macquarie who possesses
a broad level of industry experience has been appointed President
and CEO; Moody's anticipates that WCA will seek a new CEO by 2013.
As was expected, WCA has signaled that its principal accounting
officer and Controller will become CFO.
Ratings are:
WCA Waste Corporation, formerly Cod Merger Company, Inc
Corporate Family, unchanged at B2
Probability of Default, unchanged at B3
$100 million five-year first-lien revolver, unchanged at B1, LGD3,
31%
$275 million six-year first-lien term loan, unchanged at B1, LGD3,
31%
$3 million senior unsecured notes due 2019, to Caa2 LGD5, 84% from
RUR Down [B3]
Outlook, Stable
The principal methodology used in rating WCA Waste Corporation was
the Solid Waste Management Industry Methodology published in
February 2010. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
WCA Waste Corporation, based in Houston, TX, is a provider of non-
hazardous solid waste management services. Revenues for 2011 were
$274 million. The company is majority-owned by Macquarie
Infrastructure Partners II, an infrastructure fund managed by
Macquarie Group Limited.
WEYERHAEUSER COMPANY: Moody's Issues Summary Credit Opinion
-----------------------------------------------------------
Moody's Investors Service issued a summary credit opinion on
Weyerhaeuser Company and includes certain regulatory disclosures
regarding its ratings. The release does not constitute any change
in Moody's ratings or rating rationale for Weyerhaeuser and
affiliates.
Moody's current ratings for Weyerhaeuser and affiliates are:
Weyerhaeuser Company:
Outlook rating of Stable
Long-Term Corporate Family Ratings (domestic currency) ratings
of Ba1
Senior Unsecured (domestic currency) ratings of Ba1
Senior Unsecured MTN (domestic currency) ratings of (P)Ba1
Long-Term Issuer Rating of Ba1
Senior Unsecured Shelf (domestic currency) ratings of (P)Ba1
Speculative Grade Liquidity Rating ratings of SGL-1
Loss Given Default Senior Unsecured (domestic currency) ratings
of 52 - LGD4
Probability of Default rating of Ba1
BACKED Long-Term IRB/PC (domestic currency) ratings of Ba1
BACKED Other Short Term (domestic currency) ratings of NP
MacMillan Bloedel Limited:
Outlook rating of Stable
BACKED Senior Unsecured (foreign currency) ratings of Ba1
Loss Given Ddefault BACKED Senior Unsecured (foreign currency)
ratings of 52 - LGD4
Willamette Industries, Inc:
Outlook rating of Stable
Senior Unsecured (domestic currency) ratings of Ba1
Loss Given Default Senior Unsecured (domestic currency) ratings
of 52 - LGD4
BACKED Senior Unsecured (domestic currency) ratings of Ba1
Loss Given Default BACKED Senior Unsecured (domestic currency)
ratings of 52 - LGD4
Ratings Rationale
Weyerhaeuser's Ba1 corporate family rating is primarily driven by
the company's extensive timberland holdings which provide long
term debt reduction capability and liquidity. The rating also
reflects the company's scale and leading market position in
timberlands, wood products and market pulp. Credit challenges
include the inherent volatility of the company's wood products and
market pulp businesses, and the company's single geographic
concentration. Weyerhaeuser's financial performance is
significantly influenced by the level of US housing starts, which
are expected to remain below trend levels over the next 1 to 2
years.
The stable outlook reflects Moody's expectations that Weyerhaeuser
will maintain adequate liquidity and that the company's financial
performance, combined with the rating benefit from its timberland
ownership, will generate credit protection metrics in line with
its Ba1 rating.
Upward rating pressure would require a sustained improvement in
end market demand, with normalized (Retained Cash Flow-
CAPEX)/Adjusted Debt (adjusted per Moody's standard definitions)
exceeding 9% and Adjusted Debt/EBITDA below 3x. The rating would
likely be downgraded should the company's liquidity deteriorate
materially. As well, Moody's expects Weyerhaeuser to trend towards
normalized (Retained Cash Flow-CAPEX)/Adjusted Debt of 5% in 2013
and to Adjusted Debt/EBITDA to 4X (both adjusted per Moody's
standard definitions), and should Moody's conclude that these and
related metrics are not improving as expected, then the ratings
would be subject to a downgrade.
The principal methodology used in this rating was the Moody's
Global Paper and Forest Products Industry Rating 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 Federal Way, Washington, Weyerhaeuser Company is
one of the world's largest integrated forest products companies
with operations in the growing and harvesting of timber, the
manufacture and distribution of wood products, production of
market pulp and real estate development and construction.
WHITE TIGER: Delays Filing Annual Finc'l Statements, MD&A AND AIF
-----------------------------------------------------------------
White Tiger Gold Ltd. disclosed that there will be a short delay
in filing its annual audited financial statements, Management's
Discussion & Analysis and Annual Information Form for the
Company's financial year ended Dec. 31, 2011, as required by
National Instrument 51-102 - Continuous Disclosure Obligations.
The delay is caused by the extensive additional procedures
required to finalize the consolidation of the Company's accounts
with those of recently acquired Century Mining Corporation. The
Company is working with its auditors to complete the audit of the
Company's financial statements for the year ended Dec. 31, 2011 as
soon as possible and anticipates filing such financial statements
and related MD&A and AIF during the week of April 2, 2012.
Until its annual financial statements and related MD&A and AIF are
filed, the Company intends to satisfy the provisions of the
Alternative Information Guidelines set out in National Policy 12-
203 - Cease Trade Orders for Continuous Disclosure Defaults ("NP
12-203").
There is no other material information concerning the affairs of
the Company that has not been generally disclosed.
About White Tiger
White Tiger is a TSX-listed mining and exploration company,
focused on the development of mineral resources in Canada, the
Russian Federation and Peru.
ZOO ENTERTAINMENT: Jeffrey Schrock Appointed to Board
-----------------------------------------------------
The Board of Directors of Zoo Entertainment, Inc., appointed
Jeffrey Schrock to the Board and to serve as a member of its
Compensation Committee effective April 3, 2012.
Mr. Schrock has over twenty years of operating and investing
experience in technology companies, particularly those operating
in the digital media, gaming, consumer Internet, enterprise
software and mobile application sectors. He is currently a
Managing Director at Union Bay Capital, an institutionally backed
private investment fund he co-founded in 2011. From 2008 to 2011
Mr. Schrock served an Investment Director at Intel Capital
(NASDAQ: INTC), where he made and oversaw investments in digital
video, gaming, mobile and other consumer technology companies.
Prior to 2008 Mr. Schrock served as Vice President of Corporate
Development for RealNetworks (NASDAQ:RNWK). Mr. Schrock serves as
a member of the Board of Directors for Evo Media Group, Inc.,
LearnLive Technologies and as an observer to the board of
directors at Comixology and Lighthouse eDiscovery.
Mr. Schrock, an independent director under applicable standards,
will participate in the Company's standard compensation
arrangements for non-employee directors, as more particularly
described in the Company's proxy statement filed with the
Securities and Exchange Commission.
There is no arrangement or understanding between Mr. Schrock and
any other person pursuant to which Mr. Schrock was elected as a
director of the Company. There are no transactions in which Mr.
Schrock has an interest requiring disclosure under Item 404(a) of
Regulation S-K.
About Zoo Entertainment
Cincinnati, Ohio-based Zoo Entertainment, Inc. (NASDAQ CM: ZOOG)
is a developer, publisher and distributor of interactive
entertainment for Internet-connected consoles, handheld gaming
devices, PCs, and mobile devices.
The Company reported a net loss of $19.74 million on $8.59 million
of revenue for the nine months ended Sept. 30, 2011, compared with
a net loss of $837,000 on $43.71 million of revenue for the same
period during the prior year.
The Company's balance sheet at Sept. 30, 2011, showed $6.19
million in total assets, $13.03 million in total liabilities and a
$6.84 million total stockholders' deficit.
As reported in the TCR on Apr 26, 2011, EisnerAmper LLP, in
Edison, N.J., expressed substantial doubt about Zoo
Entertainment's ability to continue as a going concern, following
the Company's 2010 results. The independent auditors noted that
the Company has both incurred losses and experienced net cash
outflows from operations since inception.
* Not Disclosing Lawsuit Proves Fatal for Bankrupt
--------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Court of Appeals in New Orleans ruled on
April 4 that a bankrupt who fails to disclose existence of a
lawsuit isn't entitled in all cases to have the suit survive by
belatedly disclosing the suit in bankruptcy court after being
called on the carpet by the defendant. The case is Love v. Tyson
Foods Inc., 10-60106, 5th U.S. Circuit Court of Appeals (New
Orleans).
* Friendship No Basis for Hiring a Lawyer, Judge Says
-----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that U.S. Bankruptcy Judge Jeff Bohm in Houston wrote an
opinion last week saying he will no longer routinely sign orders
approving boilerplate requests for authority to hire lawyers
representing bankruptcy trustees. Judge Bohm said he won't allow
a trustee to hire a lawyer "out of friendship and reciprocal
retention." Instead, Bohm is requiring retention applications in
the future to show that the trustee "actively sought out the best
candidate to represent the estate in this particular case." The
case is In re Bechuck, 11-39537, U.S. Bankruptcy Court, Southern
District of Texas (Houston).
* Rooker-Feldman Not Applicable If Judgment Not Entered
-------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Chief U.S. District Judge William M. Skretny
in Buffalo, New York, ruled on March 26 that the Rooker-Feldman
doctrine didn't preclude a bankruptcy judge from deciding an issue
contrary to an opinion from a state-court judge. The case is
Business Funding Group v. Dommer Construction Corp., 11-565, U.S.
District Court, Western District of New York (Buffalo).
* 5th Circ. Says Debtor Lost Right to Sue Tyson For Bias
--------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that the Fifth Circuit
ruled in a 2-1 precedential opinion Thursday that a man who sought
to sue Tyson Foods Inc. for employment discrimination gave up his
right to do so when he failed to disclose the claim in his Chapter
13 bankruptcy petition.
"The Bankruptcy Code and rules impose upon bankruptcy debtors an
express, affirmative duty to disclose all assets, including
contingent and unliquidated claims," the appeals court wrote,
citing its 1999 decision in Browning Manufacturing v. Mims (In re:
Coastal Plains Inc.), according to Law360.
* Moody's Says Low Prices Erode Margins of Unreg. Power Companies
-----------------------------------------------------------------
The US energy sector is undergoing a permanent change as natural
gas prices will remain low for the foreseeable future, with
significant implications over the next decade for the power,
pipeline, coal and rail industries, says a new report by Moody's
Investors Service.
"Moody's believes that low natural gas prices -- currently at a
10-year trough -- will continue well beyond 2013. This is creating
a fundamental shift in North America's energy infrastructure, as
low prices continue to erode margins for unregulated power
companies such as Exelon, First Energy and PPL," said Jim
Hempstead, a Moody's Senior Vice President and author of the
report.
"Coal will find it increasingly difficult to compete with gas as a
power source over the next decade and we expect miners to continue
their shift toward non-domestic revenue opportunities," added Mr.
Hempstead.
Moody's says that coal-fired power plant retirements will cut the
power sector's demand for coal by up to 10% between 2012 and 2020,
and as coal consumption drops by roughly 100 million tons the
industry will become increasingly focused on exports. The report
highlights Peabody Energy, Arch, Consol and Cloud Peak Energy
resources as industry players that are already securing additional
port capacity to reach export markets.
The drop in domestic coal demand, one of the US railroad
industry's most profitable segments, will lead to long-term
changes in that sector too, says Moody's. Higher exports from
western coal producers will increase volumes for Union Pacific and
Burlington Northern Santa Fe. Illinois Basin and met coal
production in the east will increasingly benefit CSX and Norfolk
Southern.
The report also notes that new natural gas pipelines serving the
shale production regions will create new competitive risks for the
existing interstate pipeline network. Companies with assets near
the production basins, such as NiSource and Dominion Resources,
will benefit, but disappearing arbitrage opportunities will hurt
the marketing arms of such utilities as AGL Resources and Vectren.
* Moody's Says New Accounting Rules to Affect Insurers' Equity
--------------------------------------------------------------
New accounting rules intended to align US insurers' varied
approaches to accounting for deferred acquisition costs (DAC) will
negatively affect insurers' reported equity and some of their
financial metrics, Moody's Investors Service says in a new report,
with the magnitude of impact depending on a firm's distribution
model, growth rates and past capitalization policy. But the new
rules, which went into effect this January, will have no direct
impact on either insurers' credit quality or their ratings.
"The new rules will lead to greater consistency in financial
reporting, to the benefit of investors and other users of
financial statements," says Wallace Enman, the Moody's Vice
President -- Senior Credit Officer who authored the report.
"Accounting rules, by themselves, however, do not affect the
underlying economics of the business, or our view of an insurance
company's creditworthiness."
Moody's says adoption of the new rules could have some secondary
effects if, for example, they reveal that a firm's previous DAC
policies were more aggressive than those of its peers, if
companies change their distribution models as a result of the new
rules, or if their impact on equity or earnings negatively affects
an insurer's bank covenants, investor demand or access to capital.
Firms had the option of adopting the new rules prospectively by
applying them only to future acquisition costs, or retrospectively
by restating previously reported numbers. Moody's analysis
indicates that most firms adopted them retrospectively, which
involved recalculating DAC assets as if the new rules had been
applied in prior periods, improving year-to-year comparability.
Applying the rules to past results caused an immediate write-down
of a portion of existing DAC, with a corresponding reduction in
shareholders' equity (net of tax). These changes will in turn
alter the financial ratios and metrics that Moody's uses to
analyze insurers, although the underlying economics of the
business will be unchanged. Moody's notes that among the sample of
insurers looked at, the average increase to financial and total
leverage ratios for life insurers was less than 2 percentage
points, and for P&C insurers it was less than 1 percentage point.
Titled "DAC Accounting Change Will Not Have a Direct Impact on
Insurer Ratings," Moody's special comment analyzes the effect of
the new rules on insurers' financials, as well as the impact on
their metrics.
* Moody's Says Rising Interest Rates to Hit US P&C Insurers
-----------------------------------------------------------
US property and casualty (P&C) insurers face downside market risk
on their large fixed-income holdings from upward movement in
interest rates, Moody's Investors Service says in a new report on
the sector.
"Interest rate increases could result in a capital loss of between
$40 billion and $60 billion on the industry's $874 billion bond
portfolio in 2012, or 7% to 11% of its equity capital base," says
Moody's Vice President and author of the report Paul Bauer. "This
projection is based on our central economic scenario for the
United States, which forecasts a 100 to 150 basis point rise in
rates over the next year."
About two-thirds of the industry's $1.3 trillion in invested
assets is allocated to fixed-income securities, most of which are
positioned in US government securities, high-quality municipal
bonds and investment-grade corporates. This allocation has served
insurers well in recent years, Bauer says, with bond valuations
benefiting from both declining interest rates and a flight to
quality in the wake of the financial crisis. However, to the
extent that this trend reverses and rates move up, as has happened
over the past month, bond valuations will move down.
According to the report, the weighted average bond portfolio
duration for Moody's-rated P&C insurers was 4.5 at year-end 2011
based on publicly disclosed fixed-income duration statistics. This
implies a capital loss of 4.5% of total fixed-income investments
for a 100 basis point rise in rates. Average portfolio durations
have remained relatively steady over the past five years, though
they have drifted down modestly since year-end 2010.
"We believe companies have generally chosen to keep portfolio
duration on the short side as a result of low interest rates and
expected future rate increases, as well as an inability to
generate significant additional returns by extending maturities
out on the yield curve," Bauer says. According to the analyst, the
insurers best positioned to manage through a period of rising
rates, and therefore falling bond values, are those with short-
duration bond portfolios or low allocations to fixed-income
securities. Not only will these firms be less exposed to downside
volatility, but faster bond portfolio turnover will enable them to
take advantage of rising rates by investing in new, higher
yielding instruments.
Bauer notes, however, that although P&C insurers will face capital
volatility if bond prices decline, for most firms this risk will
be moderated by their ability to hold their bond investments to
maturity, allowing them to tolerate short-term price fluctuations.
Furthermore, rising rates will generate higher investment income,
and so boost firms' profitability in the long run.
The report is titled "US P&C Insurers Face Heightened Interest
Rate Risk" and is available on moodys.com.
* U.S. High Yield Bond Market Completes Best Quarter
----------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that less than six
months after the corporate credit markets nearly stalled out, the
U.S. high yield bond market just completed its best quarter ever
with nearly $90 billion of new issuance amid huge money flows into
junk bond funds.
Only $57 billion of such debt was issued in the entire second-half
of 2011, when investors were preoccupied with slowing global
growth and the wider implications of a potential Greek debt
default, according to the report.
Dow Jones' Daily Bankruptcy Review, citing Reuters LPC, says that
more investor money went into high yield bond funds in the first
quarter of 2012 than in all of 2011. Leveraged lending by banks
and institutional investors was also up sharply compared to last
quarter.
Who could have imagined such momentum change in the absence of a
distinct event? Bond bears have been confounded despite the clear
logic that underlies their jaundiced view of fixed income
investments currently, the report adds.
* Dewey Continues to Lose Another Round of Partners
---------------------------------------------------
Amanda Bransford at Bankruptcy Law360 reports that Dewey & LeBoeuf
LLP lost another round of partners in its insurance, bankruptcy
and patent practices on April 4, one day after The American Lawyer
said it was lowering the firm's reported financial results for
2010 and 2011 in its AmLaw 100 rankings.
Dewey -- which said it stands by the original numbers it reported
to The American Lawyer -- has now lost 46 partners this year as it
restructures in an effort to right its finances, Law360 says.
* Large Companies With Insolvent Balance Sheets
-----------------------------------------------
Total
Share- Total
Total Holders' Working
Assets Equity Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------ -------- -------
ABSOLUTE SOFTWRE ABT CN 125.3 (7.2) 10.8
ACCO BRANDS CORP ABD US 1,116.7 (61.9) 316.8
ALASKA COMM SYS ALSK US 605.1 (50.9) (9.7)
AMC NETWORKS-A AMCX US 2,183.9 (1,037.0) 525.8
AMER AXLE & MFG AXL US 2,328.7 (419.6) 187.0
AMER RESTAUR-LP ICTPU US 33.5 (4.0) (6.2)
AMERISTAR CASINO ASCA US 2,012.0 (90.6) (33.0)
AMYLIN PHARM INC AMLN US 1,870.2 (138.7) 125.2
ANOORAQ RESOURCE ARQ SJ 927.7 (148.7) 29.2
ARRAY BIOPHARMA ARRY US 82.2 (127.2) (15.1)
AUTOZONE INC AZO US 6,056.5 (1,295.5) (608.2)
BAZAARVOICE INC BV US 46.8 (15.4) (18.2)
BOSTON PIZZA R-U BPF-U CN 146.9 (105.3) (2.0)
CABLEVISION SY-A CVC US 7,143.3 (5,560.3) (240.5)
CAPMARK FINANCIA CPMK US 20,085.1 (933.1) -
CARMIKE CINEMAS CKEC US 422.9 (5.6) (33.4)
CC MEDIA-A CCMO US 16,542.0 (7,471.9) 1,556.3
CENTENNIAL COMM CYCL US 1,480.9 (925.9) (52.1)
CENVEO INC CVO US 1,385.6 (381.7) 199.9
CERES INC CERE US 33.1 (13.7) 12.0
CHENIERE ENERGY CQP US 1,737.3 (545.0) 57.7
CHENIERE ENERGY LNG US 2,915.3 (173.0) 6.5
CHOICE HOTELS CHH US 447.7 (25.6) 10.2
CIENA CORP CIEN US 1,918.3 (21.1) 918.6
CINCINNATI BELL CBB US 2,714.7 (715.2) (35.4)
CLOROX CO CLX US 4,290.0 (199.0) (289.0)
CROWN HOLDINGS I CCK US 6,868.0 (239.0) 318.0
DEAN FOODS CO DF US 5,754.4 (98.7) 220.8
DELTA AIR LI DAL US 43,499.0 (1,396.0) (4,972.0)
DENNY'S CORP DENN US 350.5 (9.7) (25.9)
DIGITAL DOMAIN M DDMG US 178.9 (85.7) (38.3)
DIRECTV-A DTV US 18,423.0 (2,842.0) (502.0)
DISH NETWORK-A DISH US 11,470.2 (419.0) 527.3
DISH NETWORK-A EOT GR 11,470.2 (419.0) 527.3
DOMINO'S PIZZA DPZ US 480.5 (1,209.7) 129.7
DUN & BRADSTREET DNB US 1,977.1 (740.2) (226.6)
FREESCALE SEMICO FSL US 3,415.0 (4,480.0) 1,432.0
GENCORP INC GY US 939.5 (207.2) 101.1
GLG PARTNERS INC GLG US 400.0 (285.6) 156.9
GLG PARTNERS-UTS GLG/U US 400.0 (285.6) 156.9
GOLD RESERVE INC GRZ US 78.3 (25.8) 56.9
GOLD RESERVE INC GRZ CN 78.3 (25.8) 56.9
GRAHAM PACKAGING GRM US 2,947.5 (520.8) 298.5
HCA HOLDINGS INC HCA US 26,898.0 (7,014.0) 1,679.0
HUGHES TELEMATIC HUTCU US 94.0 (111.8) (39.0)
HUGHES TELEMATIC HUTC US 94.0 (111.8) (39.0)
INCYTE CORP INCY US 329.0 (227.1) 175.2
IPCS INC IPCS US 559.2 (33.0) 72.1
ISTA PHARMACEUTI ISTA US 153.1 (49.1) 2.3
JUST ENERGY GROU JE US 1,644.4 (394.5) (338.4)
JUST ENERGY GROU JE CN 1,644.4 (394.5) (338.4)
LIN TV CORP-CL A TVL US 1,077.7 (80.9) 56.6
LIZ CLAIBORNE LIZ US 950.0 (109.0) 124.8
LORILLARD INC LO US 3,008.0 (1,513.0) 1,079.0
MANNING & NAPIER MN US 66.1 (184.6) -
MARRIOTT INTL-A MAR US 5,910.0 (781.0) (1,234.0)
MEAD JOHNSON MJN US 2,766.8 (168.0) 689.6
MERITOR INC MTOR US 2,553.0 (983.0) 180.0
MONEYGRAM INTERN MGI US 5,175.6 (110.2) (40.4)
MOODY'S CORP MCO US 2,876.1 (158.4) 290.4
MORGANS HOTEL GR MHGC US 557.7 (84.5) 13.0
NATIONAL CINEMED NCMI US 820.2 (346.8) 68.4
NAVISTAR INTL NAV US 11,503.0 (190.0) 2,238.0
NEXSTAR BROADC-A NXST US 595.0 (183.4) 39.6
NPS PHARM INC NPSP US 214.0 (46.1) 156.0
NYMOX PHARMACEUT NYMX US 6.4 (5.2) 2.9
ODYSSEY MARINE OMEX US 23.4 (9.5) (8.8)
OMEROS CORP OMER US 27.0 (5.6) 7.0
OTELCO INC-IDS OTT-U CN 317.7 (12.4) 18.6
OTELCO INC-IDS OTT US 317.7 (12.4) 18.6
PALM INC PALM US 1,007.2 (6.2) 141.7
PDL BIOPHARMA IN PDLI US 269.5 (204.3) 100.5
PETROALGAE INC PALG US 8.3 (76.0) (77.4)
PLAYBOY ENTERP-A PLA/A US 165.8 (54.4) (16.9)
PLAYBOY ENTERP-B PLA US 165.8 (54.4) (16.9)
PRIMEDIA INC PRM US 208.0 (91.7) 3.6
PROTECTION ONE PONE US 562.9 (61.8) (7.6)
QUALITY DISTRIBU QLTY US 302.4 (106.2) 45.8
REGAL ENTERTAI-A RGC US 2,341.3 (572.5) 2.8
RENAISSANCE LEA RLRN US 57.0 (28.2) (31.4)
RENTECH NITROGEN RNF US 152.4 (76.1) (32.3)
REVLON INC-A REV US 1,157.1 (692.9) 183.3
RSC HOLDINGS INC RRR US 3,141.0 (38.4) (1.0)
RURAL/METRO CORP RURL US 303.7 (92.1) 72.4
SALLY BEAUTY HOL SBH US 1,792.7 (168.5) 482.3
SINCLAIR BROAD-A SBGI US 1,571.4 (111.4) 14.1
SINCLAIR BROAD-A SBTA GR 1,571.4 (111.4) 14.1
SMART TECHNOL-A SMA CN 529.8 (7.1) 183.9
SMART TECHNOL-A SMT US 529.8 (7.1) 183.9
SUN COMMUNITIES SUI US 1,368.0 (100.7) -
TAUBMAN CENTERS TCO US 3,336.8 (256.2) -
THERAVANCE THRX US 258.8 (87.1) 199.3
UNISYS CORP UIS US 2,612.2 (1,311.0) 487.3
VECTOR GROUP LTD VGR US 927.8 (89.0) 194.5
VERISIGN INC VRSN US 1,856.2 (88.1) 788.9
VERISK ANALYTI-A VRSK US 1,541.1 (98.5) 104.0
VIRGIN MOBILE-A VM US 307.4 (244.2) (138.3)
WEIGHT WATCHERS WTW US 1,121.6 (409.8) (279.7)
WESTMORELAND COA WLB US 759.2 (249.9) (21.7)
*********
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
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
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