/raid1/www/Hosts/bankrupt/TCR_Public/120420.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, April 20, 2012, Vol. 16, No. 109
Headlines
AES RED: S&P Affirms 'BB-' Rating on Senior Secured Debt
AGS HOLDINGS: Moody's Assigns 'Caa1' CFR/PDR; Outlook Negative
AMERICAN AIRLINES: Unions Mull Support of USAir Merger
AMERICAN CAPITAL: Moody's Issues Summary Credit Opinion
AMERICAN REALTY: S&P Puts 'B+' Corp. Credit Rating on Watch Pos
AMERICAN RESIDENTIAL: S&P Revises Outlook on 'B' CCR to Stable
AMWINS GROUP: S&P Puts 'B' Counterparty Credit Rating on Watch
APPLETON PAPERS: Board OKs Disposal of Papermaking Assets
ASSOCIATED ASPHALT: S&P Rates $190-Mil. Debt 'B+', Outlook Stable
BALQON CORPORATION: Weinberg & Company Raises Going Concern Doubt
BIOVEST INTERNATIONAL: Board OKs Increase in Executives' Salaries
BLACKBOARD INC: S&P Rates New $60-Mil. Term Loan 'B+'
BLAST ENERGY: GBH CPAs Raises Going Concern Doubt
BUILDERS FIRSTSOURCE: WP IX Can Buy Additional Common Shares
CANO PETROLEUM: Submits Disclosure Schedules on NBI SPA
CASCADES INC: S&P Revises Outlook on 'BB-' CCR to Stable
CDC CORP: China.com Wants Chapter 11 Case Dismissed
CENTRAL CONCRETE: Filed for Chapter 11 After Default
CHALEDEEANNKA DEBORAH: Chapter 15 Case Summary
CHAPARRAL ENERGY: Moody's Rates $350MM Sr. Unsecured Notes 'B3'
CHAPARRAL ENERGY: S&P Rates New $350MM Sr. Unsecured Notes 'B-'
CHARLES STREET: Competing Plan for Charles Street AME Church
CHINA 3C: Goldman Kurland Raises Going Concern Doubt
CHURCH STREET: Auction Postponed Until May 11
COLEMAN CABLE: Moody's Affirms 'B2' CFR; Outlook Positive
COMPETITIVE TECHNOLOGIES: Joel Evans Resigns from Board
CONGRESSIONAL HOTEL: Files Sale Based Liquidating Plan
CONGRESSIONAL HOTEL: Bid to Employ Real Estate Broker Denied
CONVERTED ORGANICS: Has 44.4-Mil. Outstanding Shares at April 2
CYBERDEFENDER CORP: Scheduled for Auction on May 1
CYCLE COUNTRY: Has $422,400 Restated Loss in June 30 Quarter
CYCLE COUNTRY: Restates Fiscal 2010 10-K to Correct Errors
DACOSTA RESTAURANTS: Case Summary & 20 Largest Unsecured Creditors
DECOR PRODUCTS: Posts $2.6 Million Net Income in 2011
DELTA PETROLEUM: Robbins Geller Launches Class Suit vs. D&Os
DENNY'S CORP: S&P Withdraws 'B+' Corp. Credit Rating at Request
DEWEY & LEBOEUF: Said to Have Hired Bankruptcy Lawyer
DIRECT REALTY: East 46th Apartment Buildings File for Ch. 11
DRAGON MARTIAL: Case Summary & 17 Largest Unsecured Creditors
EAST COAST DIVERSIFIED: Drake & Klein Raises Going Concern Doubt
EDGEN MURRAY: Files Amendment No.4 to Form S-1 Prospectus
ELPIDA MEMORY: U.S. Court Grants Protection From Creditors
EMPIRE RESORTS: Monticello Amends Option Agreement with EPT
EPICEPT CORP: To Raise $1.1 Million in Registered Direct Offering
FASTECH SERVICES: Metal Workers Allowed $42K for Fringe Benefits
FEDERAL BAKERS: Case Summary & 20 Largest Unsecured Creditors
FIRST DATA: Barry Cooper Named SVP and Chief Accounting Officer
FIRST SECURITY: Larry Mauldin Named Chairman and Director
GAME TRADING: Best Buy Given More Time to Respond to Exit Plan
GATEWAY METRO: Exits From Bankruptcy Protection
GENCORP INC: Board Approves Grants Under 2012 LTIP
GENMAR HOLDINGS: Court Dismisses Claims in Seafarer's Suit
GETTY PETROLEUM: Bankruptcy Judge Punts Bank Row to Delaware
GREEN ENERGY: MaloneBailey LLP Raises Going Concern Doubt
HALLWOOD GROUP: Incurs $6.3 Million Net Loss in 2011
HARDAGE HOTELS: Taps Cappello & Noel as Litigation Counsel
HARDAGE HOTELS: Wants to Hire Kemp Smith as Special Counsel
HAWKER BEECHCRAFT: Has Forbearance Until June, Gets $120MM Loan
HAWKER BEECHCRAFT: Worth Boisture to Serve as HBC Chairman
HAWKER BEECHCRAFT: Delays Form 10-K for 2011 for Negotiations
HCSB FINANCIAL: Incurs $256,000 Net Loss in First Quarter
HOSTESS BRANDS: Wins Extension of Exclusivity Periods
HOSTESS BRANDS: Pushes Back Deadline for Deal With Other Unions
HOTI ENTERPRISES: Taps Carl Person as Litigation Counsel
HOTI ENTERPRISES: Can Hire Pic & Zabicki as Bankruptcy Counsel
HOVNANIAN ENTERPRISES: Seven Directors Elected at Annual Meeting
HOVNANIAN ENTERPRISES: To Offer 25 Million Class A Common Shares
HUB INTERNATIONAL: S&P Affirms 'B' Counterparty Credit Ratings
INFOR ENTERPRISE: S&P Rates Corporate Credit 'B'; Outlook Stable
INTELLICELL BIOSCIENCES: To Address FDA Warning Letter
INTERNAL FIXATION: Incurs $3.4 Million Net Loss in 2011
IOWORLDMEDIA INC: Patrick Rodgers Raises Going Concern Doubt
IRVINE SENSORS: Issues 3.5 Million Common Shares to Investors
JEFFERSON COUNTY: Bond Fight Begins a New Round
JUST RIGHT: Case Summary & 20 Largest Unsecured Creditors
KEYSTONE PRINTING: Voluntary Chapter 11 Case Summary
LEHMAN BROTHERS: Dist. Court Remands NY Atty General Suit vs. E&Y
LEHMAN BROTHERS: Bermuda Reinsurance Unit to Sell CLICO for $14MM
LEHMAN BROTHERS: Turns Down Minibond Investors' Appeal
LEHMAN BROTHERS: JPMorgan to Pay $20MM to Settle CFTC Charges
LIGHTSQUARED INC: Falcone Said to Have Met With Icahn
LITTLE MOUNTAIN: Taps Holland & Hart as Bankruptcy Counsel
LITTLE MOUNTAIN: Rockwall & Advanced Fluid Want Case Dismissed
LITTLE MOUNTAIN: Files Schedules of Assets and Liabilities
LUMBER PRODUCTS: Agrees with Wells Fargo on Trustee
MAJESTIC CAPITAL: WEST-FAIR Files Suit vs. Comp. Risk Managers
MANISTIQUE PAPERS: Court Approves Sale to Watermill Group
MARCO POLO: Debtors Have Plan Exclusivity Until April 24
MBI ENERGY: S&P Assigns 'B' Corp. Credit Rating; Outlook Stable
MEAD PRODUCTS: S&P Assigns 'B+' Rating to New $500MM Senior Notes
MONEY TREE: Proposes Sale for Payday Lending Chain
MOORE SORRENTO: Wants Control of Case Until June; Has Sale Deal
MOORE SORRENTO: Wants to Deem Amended Plan Accepted by Creditors
MOORE SORRENTO: May Use Wells Fargo Cash Collateral Thru June 3
MQVP INC: 6th Circ. Affirms Approval of $1.2 Million Settlement
MSCI: Moody's Affirms 'Ba1' Corporate Family Rating
NATTEL LLC: May 23 Hearing Set Over Bahamian Business Rules
NATIONAL CINEMEDIA: Moody's Affirms Ba3 CFR, Rates Sr. Notes Ba2
NATIONAL CINEMEDIA: S&P Rates $315M Senior Unsecured Notes 'BB-'
NATIONAL ENVELOPE: April 26 Hearing on Abandonment of Plant
NAVARRE INDUSTRIES: Files for Chapter 11 in Ohio
NEW LEAF: Delays 2011 Annual Report
NCO GROUP: Completes Merger with APAC, Has 1-Bil. Credit Facility
NEXT 1 INTERACTIVE: Issues $250,000 Convertible Promissory Note
NORTHCLIFF COLONY: Case Summary & 19 Largest Unsecured Creditors
NORTHCORE TECHNOLOGIES: Incurs C$3.9 Million Loss in 2011
NORTHCORE TECHNOLOGIES: Gets Continued Listing Approval from TSX
NORTHERN CALIFORNIA: Monterey Bank Owner Has $13.6-Mil. Net Loss
NUTRA PHARMA: Delays 2011 Annual Report for Lack of Funds
ONCURE MEDICAL: S&P Lowers Corporate Credit Rating to 'B-'
PACIFIC GOLD: Incurs $1.4 Million Net Loss in 2011
OVERLAND STORAGE: Files Amendment No. 2 to Form S-3 Prospectus
PAYMENT DATA: Reports $351,800 Net Income in 2011
PINNACLE AIRLINES: Spanjers Replaces Menke as CEO & President
PINNACLE AIRLINES: United Steelworkers Reviewing NMB Ruling
PINNACLE AIRLINES: AFA Welcomes NMB's Single Carrier Ruling
PINNACLE ENTERTAINMENT: S&P Rates $325 Million Term Loan 'BB+'
PLANT INSULATION: Asbestos Plan Confirmed; Appeals in Dist. Court
PRINCETON REVIEW: PwC Raises Going Concern Doubt
POWER EFFICIENCY: Suspending Filing of Reports with SEC
PRESIDENTIAL REALTY: Incurs $6.2 Million Net Loss in 2011
PROTEONOMIX INC: Amends 6.9 Million Common Shares Offering
RAEBACK CORP: 3rd Cir. to Hear Immigration Case Against Founder
REGIONS FINANCIAL: Moody's Issues Summary Credit Opinion
RESIDENTIAL CAPITAL: Didn't Pay Interest in $473MM Notes
RESIDENTIAL CAPITAL: Moody's Cuts Sr. Unsec. Debt Rating to 'C'
ROBERTS HOTELS: Voluntary Chapter 11 Case Summary
ROTHSTEIN ROSENFELDT: Dan Marino Foundation Sued by Trustee
SAINT CATHERINE: Liquidating under Chapter 7
SCHIFF NUTRITION: Moody's Assigns 'B1' CFR; Outlook Stable
SCHIFF NUTRITION: S&P Rates Corporate Credit 'B'; Outlook Stable
SEQUENOM INC: Extends Supply Agreement with Illumina to 2016
SHOREBANK CORP: June 13 Hearing on Chapter 11 Plan
ST. VINCENT HOSPITAL: Moody's Cuts Rating to 'Ba2'; Outlook Neg.
SK FOODS: District Court Cancels April 23 Hearing in Appeal
STEP PLAN: Case Summary & 10 Largest Unsecured Creditors
SUGARHOUSE HSP: Moody's Upgrades CFR/PDR to 'B2'; Outlook Stable
TELKONET INC: Delays Annual Report Due to Financial Restatements
THERMODYNETICS INC: John Hughes Retires as Director
THERMOENERGY CORP: Incurs $1.7 Million Net Loss in Fourth Quarter
TITAN PHARMACEUTICALS: Finding Strategic Partner for Probuphine
TRANS-LUX CORP: Reports $4 Million Net Income in Fourth Quarter
TRANS-LUX CORP: Corrects Report on Annual Meeting Results
TRANSTEXAS GAS: Tex. App. Ct. Affirms $260K Fees for Forcenergy
TRIBUNE CO: Court Sets June 7 Plan Confirmation Hearing
UNIGENE LABORATORIES: Appoints Jack Wyszomierski to Board
UNITED SALVAGE: Metal Recycler Files for Chapter 11
US POSTAL: CCAGW Denounces Senate for "Mailing in" Bailout
USG CORP: Lowers Net Loss to $27 Million in 1st Quarter of 2012
VIASYSTEMS INC: S&P Rates Proposed $550-Mil. Senior Notes 'BB-'
VISUALANT INC: Ascendiant, Et Al., to Sell 7.6MM Common Shares
WABASH NATIONAL: S&P Rates Corporate Credit 'B+'; Outlook Stable
WIDEOPENWEST FINANCE: Moody's Expects CFR to Remain 'B2'
WIDEOPENWEST FINANCE: S&P Puts 'B-' Corp. Credit Rating on Watch
WIN GLOBAL: Ziv Haft Raises Going Concern Doubt
WPCS INTERNATIONAL: William Whitehead Resigns as Director
ZOGENIX INC: Has Office Sublease Agreement with Relational
* Retainer from Third Party No Automatic Disqualification
* Submitted Order Must Comport With Relief Judge Grants
* Conversion From Chapter 13 to 7 Is Absolute Right
* Law Firm Sanctioned for Being 'Completely Unprepared'
* Bank Protected for Not Turning Over Exempt Account
* Paper Tackles Dodd-Frank's Orderly Liquidation Authority
* Douglas Mannal Among Law360's Five Bankruptcy Stars Under 40
* BOOK REVIEW: Performance Evaluation of Hedge Funds
*********
AES RED: S&P Affirms 'BB-' Rating on Senior Secured Debt
--------------------------------------------------------
Standard & Poor's Rating Services affirmed its 'BB-' rating on AES
Red Oak LLC's senior secured debt based on the change in ownership
to a fund of Energy Capital Partners (ECP) from a subsidiary of
AES Corp. The senior secured debt consists of $384 million senior
secured bonds ($224 million 8.54% bonds due 2019 and $160 million
9.2% bonds due 2029). As of March 31, 2012, the outstanding amount
on the bonds was $302.6 million (i.e., about $364 per kilowatt
[kW]). The outlook is stable. "We left unchanged our '2' recovery
rating on the debt. The project's name changed to Red Oak Power
LLC," S&P said.
"The change in ownership of AES Red Oak does not affect the
project's debt rating. The project is a combined-cycle, natural
gas-fired generation station in Middlesex County, N.J., with a
capacity of 830 megawatts. The project sells its capacity and
energy to TAQA Gen X LLC under a tolling agreement through 2020
and is thereafter without off-take contracts. We affirmed the
project debt rating in January 2012 following a full review," S&P
said.
"The project company, now Red Oak Power LLC, and its holding
company, Red Oak Intermediate Holdings LLC, which owns all equity
interest in the project that are pledged to lenders, are both
structured to meet Standard & Poor's bankruptcy-remote, single-
purpose entity criteria," S&P said.
"The outlook is stable. We favorably view Red Oak's improved
dispatch levels and improving debt service coverage ratio," said
Standard & Poor's credit analyst Terry Pratt.
"A positive outlook and higher ratings would require sustainable
DSCR levels in excess of 1.35x, which we view as increasingly
possible, given the project's track record over the past year.
However, operational challenges in early 2010 hindered the
project's financial performance. Negative energy margins, high
operating costs, and increasing scheduled principal payments had
led to low DSCR levels. Similar operational challenges in the
future could hurt ratings if the project's DSCR levels go below
1.0x," S&P said.
AGS HOLDINGS: Moody's Assigns 'Caa1' CFR/PDR; Outlook Negative
--------------------------------------------------------------
Moody's Investors Service assigned a Caa1 Corporate Family Rating
and Caa1 Probability of Default rating to AGS Holdings, LLC.
Moody's also assigned a Caa1 rating to the company's proposed five
year $150 million second lien senior secured note offering. The
rating outlook is negative. The ratings and outlook are subject to
Moody's review of final terms and conditions.
The proceeds from the notes offering, combined with an approximate
$30 million cash equity infusion by the financial sponsor, will be
used to fully repay approximately $131 million of bank debt and
refinance $14 million Holdco debt at AGS's subsidiary, AGS LLC,
fund a buyout of a key game development agreement, and pay
transactions costs. The notes will be guaranteed by domestic
subsidiaries and secured by all assets but will be structurally
subordinated to a $20 million first lien revolving credit facility
that is expected to be put in place at a later date.
AGS LLC's existing ratings, including its Caa2 Corporate Family
Rating, and negative rating outlook were not affected by the
action. Assuming the AGS Holdings notes offering closes, AGS LLC
will have no debt outstanding and its ratings will be withdrawn.
Conversely, if the bond transaction does not close, AGS, LLC's
existing ratings, could be downgraded given the company's likely
payment default on its existing revolver that matures in May 2012.
Ratings assigned:
AGS Holdings, LLC
Corporate Family rating at Caa1
Probability of Default rating at Caa1
$150 million Secured second lien notes at Caa1 LGD 4, 50%
Rating outlook: negative
Ratings remain unchanged and to be withdrawn upon closing of the
proposed transaction:
AGS, LLC
Corporate Family rating at Caa2
Probability of Default rating at Caa3
Senior secured Delayed Draw Term loan at Caa2, LGD 3, 32%
Senior secured revolving credit facility at Caa2, LGD 3, 32%
Senior secured term loan at Caa2, LGD 3, 32%
Ratings Rationale
AGS' Caa1 Corporate Family Rating reflects its very small scale,
significant geographic and customer revenue concentration and
heavy reliance on a few key managers for game development. Its
limited financial resources and weaker product pipeline and game
titles relative to larger better capitalized peers, to some
extent, contributed to the sustained decline in operating profits
and could constrain the company's ability to execute its future
growth strategy. The ratings also acknowledge the company's very
weak interest coverage in part due to the higher interest cost on
the proposed notes relative to existing bank debt, and Moody's
expectation AGS will generate negative free cash flow over the
next 12-18 months. Moody's expects AGS's run-rate cash flow from
operation will be insufficient to cover higher development capital
spending needed to support the company's growth plan. The ratings
are supported by the relatively stable gaming revenue trends in
Oklahoma -- AGS's primary market, the recurring nature of the
majority of its revenue base, and Moody's forward view that gaming
demand in the locals market has shown signs of stability which
should enable AGS to modestly grow its installed base of machines,
thereby increasing, revenue, and EBITDA modestly.
The negative rating outlook reflects the challenges the company
may face in executing its growth strategy into new markets,
including the absence of a new revolving facility that AGS will
need to support the significant upfront capital expenditure and
the company's limited track record of successfully introducing new
and competitive gaming products. The outlook also incorporates
Moody's view that the company needs to continue to improve its
internal controls over financial reporting since significant
deficiency in internal control was identified by its external
auditors for its fiscal year 2011.
A rating upgrade is unlikely in the near term. The stable rating
outlook would require a timely execution of a new $20 million
revolver, renewal of important contract expiring in the near-term,
an increase in the installed base of gaming machines, and
maintenance of an adequate liquidity.
The ratings could be downgraded if AGS is unable to grow its
installed base and increase EBITDA or if the company's fails to
maintain adequate liquidity profile commensurate with its growth
objections.
The principal methodology used in rating AGS Holdings, LLC was the
Global Business & Consumer Service Industry Rating Methodology
published in October 2010. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
AGS Holdings, LLC designs, manufactures, and operates Class II and
Class III gaming machines principally for the Native American
casino market. The company has an installed base of about 7,700
machines in approximately 127 gaming facilities (principally
Native American casinos across Oklahoma), 10 other US states and
Mexico. AGS is owned by affiliates of Alpine Investors II, LP.
AMERICAN AIRLINES: Unions Mull Support of USAir Merger
------------------------------------------------------
Mike Spector and Susan Carey, writing for The Wall Street Journal,
report that people familiar with the matter said representatives
of American Airlines' three main unions currently believe they
would be treated better in a merger with US Airways Group Inc.
than if American remained independent, and are weighing whether to
publicly air their support for a deal.
The sources told the Journal the unions -- represent pilots,
flight attendants and mechanics and ground workers of American
parent AMR Corp. -- were in discussions Thursday about announcing
their support for how US Airways intends to treat them in the
potential merger.
The sources noted, however, that the decision on whether to go
public with their support remained in flux.
The unions sit on AMR's nine-member creditors committee.
According to WSJ, people familiar with the matter said, the unions
and other creditors, looking for the best possible deal on labor
terms and debt repayment, want AMR to explore possible merger
opportunities, including with US Airways. In discussions with
creditors, US Airways has asserted a merger with AMR could reap
more than $1.5 billion in additional revenue and cost savings,
creating additional money to ease unions' pain, according to
people familiar with the matter.
TheStreet and Bloomberg also reported on the unions' support for a
merger.
WSJ relates that in a letter to employees, Mr. Horton said: "There
continues to be much takeover speculation in the press, fueled by
those who seek to serve their own agendas, including the
circulation of misleading information. I expect this to continue
and to escalate. Naturally, there are many who do not want
American to succeed."
The sources also told WSJ that US Airways is holding active
internal discussions on making a formal AMR merger proposal, but
US Airways hasn't decided when to make such a proposal, or how to
go about it. The sources said US Airways representatives are
debating whether to approach American's CEO, the creditors or both
when making the proposal.
WSJ relates the Allied Pilots Association and Transport Workers
Union declined to comment. The Association of Professional Flight
Attendants didn't respond to requests for comment.
AMR is seeking $1.25 billion in annual labor cost savings, but
hasn't reached a consensual agreement with unions during
negotiations, which have stalled with two of the three unions.
AMERICAN CAPITAL: Moody's Issues Summary Credit Opinion
-------------------------------------------------------
Moody's Investors Service issued a summary credit opinion on
American Capital Ltd. and includes certain regulatory disclosures
regarding its ratings. The release does not constitute any change
in Moody's ratings or rating rationale for American Capital, Ltd.
Moody's current ratings on American Capital, Ltd. are:
Long Term Corporate Family ratings of B2
Senior Unsecured (domestic currency) ratings of B2
Senior Unsecured Shelf (domestic currency) ratings of (P)B2
Preferred Shelf (domestic currency) ratings of (P)Caa1
Ratings Rationale
American Capital, Ltd.'s (ACAS) issuer and senior unsecured
ratings are B2. The rating outlook is stable.
ACAS is a private equity fund and alternative asset manager. The
company's ratings are supported by its expertise and scale
investing in private middle market companies. Additionally,
ratings are supported by the company's diversified (both by
geography and business sector) and granular investment portfolio.
Also important is the company's substantial equity base as
mandated by business development company (BDC) regulations.
Offsetting these positives is ACAS' business model which carries
significant event risk in times of economic stress. ACAS' business
model includes the following characteristics: portfolio
investments that are highly levered and illiquid, as well as fair
value accounting for investments that can result in volatile
investment values and capital levels (portfolio investments are
revalued each quarter). Prior to 3Q2011, ACAS was unable to fully
retain earnings capital due to the registered investment company
(RIC) requirement that the company distribute 90% of ordinary
taxable income and net realized gains. As of 3Q2011, the company
failed the asset diversification requirements to maintain its RIC
tax status and thus, will be subject to federal and state taxes.
Moody's views ACAS' current non-RIC tax status (no longer required
to distribute 90% of ordinary income and net realized gains) as
credit neutral for debt holders since ACAS may decide to use any
capital from earnings to repurchase stock or pay dividends.
ACAS' investment portfolio has performed poorly during the ongoing
period of economic stress. The fair value of the company's
investment portfolio was 74% of cost as of September 30, 2011,
reflecting significant mark downs in the portfolio's aggregate
value. In addition, ACAS' investment portfolio, compared to other
Moody's rated BDC peers, is more heavily skewed toward
subordinated debt and equity investments (82% at 3Q2011);
subordinated debt and equity securities valuations are more
volatile than senior debt securities within a portfolio company's
capital structure, due to the lower priority of payment. Debt
investment non-accruals were approximately 19% of debt investment
costs at 3Q2011, which is significantly higher than other Moody's
BDC rated peers. During fiscal 2010, ACAS recorded significant
write-downs in investment fair values that led to substantial
declines in the company's capital levels. As a result of breaching
a minimum asset coverage covenant, ACAS restructured approximately
$2.4 billion in debt. The debt restructure provided to debt
exchange participants a first lien claim on substantially all of
ACAS' previously unencumbered assets. ACAS' senior unsecured
rating is the same as its B2 corporate family rating, despite the
company's high level of secured debt on a pro-forma basis, in
recognition of substantial asset coverage for all classes of debt.
Rating Outlook
The rating outlook is stable. This reflects ACAS' strong asset
coverage post debt restructuring and its moderate medium term debt
maturity profile.
What Could Change the Rating - Up
There is currently no upward pressure on the rating due to the
high level of subordinate and equity portfolio investments that
have significant impairment risk.
What Could Change the Rating - Down
ACAS's rating would come under negative pressure if the company
experiences investment portfolio write-downs that substantially
reduce the company's capital base or if the company violates debt
covenants in the future.
The principal methodology used in this rating was Finance Company
Global Rating Methodology published in March 2012.
AMERICAN REALTY: S&P Puts 'B+' Corp. Credit Rating on Watch Pos
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B+' corporate
credit rating on American Realty Capital Trust (ARCT) on
CreditWatch with positive implications following the REIT's recent
internalization of its management functions and listing of its
common stock on the NASDAQ.
"We expect these actions to reduce overhead, improve financial
flexibility, and strengthen coverage of the common dividend," said
credit analyst Eugene Nusinzon.
"We expect to resolve the CreditWatch placement over the next 90
days. The outcome could result in a one- or two-notch upgrade and
is contingent on our assessment of information that we recently
requested from ARCT's management. Among other factors, our
assessment will focus on the company's overall liquidity, coverage
of the common dividend, and expectations for growth and credit
metrics going forward," S&P said.
AMERICAN RESIDENTIAL: S&P Revises Outlook on 'B' CCR to Stable
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on Memphis-based American Residential Services LLC,
and revised the outlook to stable from negative.
"At the same time, we affirmed our issue-level rating on the
company's $165 million senior secured second-lien notes due 2015
at 'B'. The recovery rating is '4', indicating our expectation of
average (30% to 50%) recovery for noteholders in the event of a
payment default," S&P said.
"The company should be able to modestly increase profitability and
improve credit measures over the next year," said Standard &
Poor's credit analyst Linda Phelps.
"Standard & Poor's ratings on American Residential Services LLC
reflect our view that the company's financial risk profile will
remain 'highly leveraged,' including a very aggressive financial
policy that overshadows the company's generally consistent
operating performance," S&P said.
"Although we believe the company has the capacity to reduce
leverage over time, we see the potential for another significant
debt-financed shareholder distribution or other leveraging event
in the future based on majority ownership by a financial sponsor,
which we believe may influence financial governance toward
shareholder-friendly decision-making," said Ms. Phelps.
"We characterize ARS' business risk profile as 'weak' due to its
narrow product focus, seasonality, and vulnerability to economic
cycles and weather conditions. We believe the company should
continue to benefit from its good positions in the competitive,
highly fragmented, heating, venting, air conditioning (HVAC) and
plumbing markets," S&P said.
"The outlook is stable. We believe the company's credit metrics
will strengthen modestly in 2012, largely as a result of EBITDA
growth, particularly with normalized weather patterns. However, we
could lower our ratings if the company pursues additional debt-
financed dividend activity or operating performance is weaker than
we anticipate, possibly due to an unseasonably cool summer in its
major markets, resulting in leverage exceeding 7x. With stable
debt levels, we estimate pro forma EBITDA would have to decline
about 6%-7% for this to occur. Though unlikely in the next one to
two years, we could raise the ratings if EBITDA growth continues
and if ARS' financial policy remains less aggressive, allowing us
to believe leverage can be sustained below 5x. EBITDA would need
to rise over 35% from current levels for this to occur," S&P said.
AMWINS GROUP: S&P Puts 'B' Counterparty Credit Rating on Watch
--------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B' counterparty
credit rating and all issue-level ratings on AmWINS Group Inc. on
CreditWatch with developing implications.
"The CreditWatch placement follows AmWINS' announcement that it
has reached a definitive agreement with New Mountain Capital LLC
in conjunction with a recapitalization of the company," said
Standard & Poor's credit analyst Julie Herman. "The $1.3 billion
transaction will give the private equity firm a majority stake in
AmWINS; other terms of the transaction were not disclosed. The
CreditWatch placement reflects our limited information on details
of the transaction at this time and our resultant uncertainty
regarding the recapitalization's effect on AmWINS' capital
structure, cash flows, and credit protection measures."
"New Mountain Capital has approximately $9 billion in assets under
management. AmWINS current majority owner is private equity firm
Parthenon Capital Partners, an investor in the company since 2005.
AmWINS also announced that there will be no changes to its senior
management, local management, or operational teams as a result of
the transaction," S&P said.
"Over the next few weeks, we expect to meet with AmWINS management
team to discuss details of the recapitalization under New Mountain
Capital," Ms. Herman continued. "We expect to resolve the
CreditWatch listing over the next 30 days following these
discussions. Potential outcomes of the CreditWatch could be an
affirmation, and upgrade by one notch or more, or a downgrade by
one notch or more. The outcome will primarily depend on our
analysis of the effect of the transaction on the company's capital
structure, cash flows, and credit protection measures."
APPLETON PAPERS: Board OKs Disposal of Papermaking Assets
---------------------------------------------------------
In connection with its approval of the Supply Agreement dated
Feb. 22, 2012, between the Appleton Papers Inc. and Domtar Paper
Company, LLC, and Domtar A.W. LLC, the Board of Directors
authorized a plan for Appleton to dispose of papermaking assets at
its facility in West Carrollton, Ohio, and move more carbonless
coating to Appleton's converting plant in Appleton, Wisconsin.
The Company plans to continue its thermal coating operations at
the facility in West Carrollton. The plan is expected to result
in pre-tax charges associated with the manufacturing capacity
rationalization. The plan is expected to result in a reduction of
approximately 330 jobs at the West Carrollton mill. The Board
delegated authority to the Company's management to determine the
final plan with respect to these initiatives, which are expected
to include employee termination costs, accelerated depreciation on
certain equipment and other associated costs. At that time, as
management had not yet finalized the specific actions to be taken,
the Company was not able to make a good faith estimate of (i) the
amount or range of amounts of each major type of cost that will be
incurred, or (ii) the amount or range of amounts of costs that
will result in future cash expenditures.
The Company anticipates that, in connection with implementing the
plan, it will record pre-tax charges of approximately $105 to $121
million, of which approximately $23 to $28 million relate to
employee termination costs and approximately $80 to $90 million
relate to impairment and accelerated depreciation on certain
equipment. The remaining charges relate to other exit costs.
The Company expects that the vast majority of the charges will be
incurred in the first three quarters of 2012 with the timing of
the charges to be determined primarily by the provisions and
structure of the severance arrangements.
The Company expects the plan will result in aggregate cash
expenditures in the range of $39 to $45 million anticipated to be
paid over the next five years.
As previously announced, the Company expects to realize pretax
benefits ranging from $25 to $30 million annually as a result of
the Supply Agreement and cessation of paper manufacturing at West
Carrollton.
About Appleton Papers
Appleton, Wisconsin-based Appleton Papers Inc. --
http://www.appletonideas.com/-- produces carbonless, thermal,
security and performance packaging products. Appleton has
manufacturing operations in Wisconsin, Ohio, Pennsylvania, and
Massachusetts, employs approximately 2,200 people and is 100%
employee-owned. Appleton Papers is a 100%-owned subsidiary of
Paperweight Development Corp.
The Company reported a net loss of $2.11 million on $857.33
million of net sales for the year ended Dec. 31, 2011, compared
with a net loss of $31.66 million on $849.88 million of net sales
for the year ended Jan. 1, 2011.
The Company's balance sheet at Dec. 31, 2011, showed $641.90
million in total assets, $831.85 million in total liabilities and
a $189.95 million total deficit.
* * *
Appleton Papers carries a 'B' corporate credit rating, with stable
outlook, from Standard & Poor's. IT has a 'B2/LD' probability of
default rating from Moody's.
ASSOCIATED ASPHALT: S&P Rates $190-Mil. Debt 'B+', Outlook Stable
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' issue-level
rating and '4' recovery rating to U.S. liquid asphalt reseller
Associated Asphalt Partners LLC's $170 million senior secured term
loan B and $20 million delayed-draw term loan. The '4' recovery
rating indicates that lenders can expect average (30% to 50%)
recovery if a payment default occurs. The partnership used net
proceeds to partly fund Goldman Sachs Capital Partners' purchase
of the company and a small acquisition.
"Our corporate credit rating on Roanoke, Va.-based Associated
Asphalt is 'B+', and the outlook is stable," S&P said.
RATINGS LIST
Associated Asphalt Partners LLC
Corporate credit rating B+/Stable/--
New Ratings
$170 mil senior secured term loan B+
Recovery rating 4
$20 mil delayed draw term loan B+
Recovery rating 4
BALQON CORPORATION: Weinberg & Company Raises Going Concern Doubt
-----------------------------------------------------------------
Balqon Corporation filed on April 16, 2012, its annual report on
Form 10-K for the fiscal year ended Dec. 31, 2011.
Weinberg & Company, P.A., in Los Angeles, California, expressed
substantial doubt about Balqon's ability to continue as a going
concern. The independent auditors noted that the Company has a
shareholders' deficiency and has experienced recurring operating
losses and negative operating cash flows since inception.
The Company reported a net loss of $7.05 million on $2.13 million
of revenues for 2011, compared with a net loss of $4.30 million on
$677,745 of revenues for 2010.
The Company's balance sheet at Dec. 31, 2011, showed $2.94 million
in total assets, $7.02 million in total liabilities, and a
stockholders' deficit of $4.08 million.
A copy of the Form 10-K is available for free at:
http://is.gd/kUys6I
Harbor City, California-based Balqon Corporation is a developer
and manufacturer of electric drive systems, charging systems and
battery systems for trucks, tractors, buses, industrial equipment
and renewable energy storage devices. The Company also designs
and assembles electric powered yard tractors, short haul drayage
tractors and inner city trucks utilizing our proprietary drive
systems, battery systems and charging systems.
BIOVEST INTERNATIONAL: Board OKs Increase in Executives' Salaries
-----------------------------------------------------------------
The Board of Directors of Biovest International, Inc., on
March 30, 2012, approved the following compensation arrangements
for the below-named officers as a result of an annual compensation
review by the Board of Directors and its Compensation Committee.
However, those arrangements will be contingent on, and not
commence until, the Company has raised an aggregate total of $4.0
million in additional new financing:
* Francis E. O'Donnell, Jr. M.D., the Company's Executive
Chairman, will receive a base salary of $82,413 and a cash
of bonus of $38,150 for the fiscal year ending Sept. 30,
2012.
* Samuel S. Duffey, Esq., the Company's President and Chief
Executive Officer, will receive an increase to his base
salary from $228,606 to $235,464 and a cash bonus of
$109,000 for fiscal year ending Sept. 30, 2012.
* Brian D. Bottjer, CPA, the Company's Acting Chief Financial
Officer and Controller, will receive an increase to his
base salary from $132,923 to $147,923 for the fiscal year
ending Sept. 30, 2012. He will receive an additional
increase in his base salary if he becomes the Company's
Chief Financial Officer when the Board of Director
considers that matter later in the year.
In addition, on March 30, 2012, the Company granted stock options
to purchase the following number of shares of the Company's common
stock: Dr. O'Donnell (459,550 shares), Mr. Duffey (919,100
shares), and Mr. Bottjer (282,800 shares). Those options were
granted under the Company's 2010 Equity Incentive Plan at an
exercise price of $0.57 per share and immediately vested upon the
grant date.
About Biovest International
Biovest International, Inc. -- http://www.biovest.com/-- is an
emerging leader in the field of active personalized
immunotherapies. In collaboration with the National Cancer
Institute, Biovest has developed a patient-specific, cancer
vaccine, BiovaxID(R), with three clinical trials completed,
including a Phase III study, demonstrating evidence of safety and
efficacy for the treatment of indolent follicular non-Hodgkin's
lymphoma.
Headquartered in Tampa, Florida, with its bio-manufacturing
facility based in Minneapolis, Minnesota, Biovest is publicly-
traded on the OTCQB(TM) Market with the stock-ticker symbol
"BVTI", and is a majority-owned subsidiary of Accentia
Biopharmaceuticals, Inc. (OTCQB: "ABPI").
Biovest, along with its subsidiaries, Biovax, Inc., AutovaxID,
Inc., Biolender, LLC, and Biolender II, LLC, filed for Chapter 11
bankruptcy protection (Bankr. M.D. Fla. Case No. 08-17796) on
Nov. 10, 2008. Biovest emerged from Chapter 11 protection, and
its reorganization plan became effective, on Nov. 17, 2010.
CHERRY, BEKAERT, & HOLLAND L.L.P., in Tampa, Fla., expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
incurred cumulative net losses since inception of approximately
$161 million and cash used in operating activities of
approximately $4.6 million during the two years ended Sept. 30,
2011, and had a working capital deficiency of approximately
$2.2 million at Sept. 30, 2011.
The Company reported a net loss of $15.28 million on $3.88 million
of total revenue for the year ended Sept. 30, 2011, compared with
a net loss of $8.58 million on $5.35 million of total revenue
during the prior year.
The Company's balance sheet at Dec. 31, 2011, showed $5.27 million
in total assets, $38.90 million in total liabilities, and a
$33.63 million total stockholders' deficit.
BLACKBOARD INC: S&P Rates New $60-Mil. Term Loan 'B+'
-----------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' issue level
rating (one notch higher than the corporate credit rating) to
Washington, D.C.-based Blackboard Inc.'s proposed $60 million
incremental term loan with a recovery rating of '2',indicating
substantial (70%-90%) recovery of principal in the event of a
payment default.
"At the same time, we also assigned 'B+' issue-level ratings to
the company's $100 million revolver due 2016 and $780 million
first-lien term loan due 2018. Both have recovery ratings of '2',
indicating substantial (70%-90%) recovery in the event of a
payment default," S&P said.
"In addition, we assigned our 'CCC+' rating to Blackboard's $350
million second-lien term loan due 2019. The recovery rating is
'6', indicating negligible (0%-10%) recovery in the event of a
payment default," S&P said.
"We also affirmed our 'B' corporate credit rating on Blackboard.
The outlook is stable," S&P said.
"We believe Blackboard's 'highly leveraged' financial risk profile
more than offsets the company's 'fair' business risk profile,"
said Standard & Poor's credit analyst Jacob Schlanger. "We
estimate pro forma adjusted debt leverage over 9x following its
recently announced acquisitions of Moodlerooms and NetSpot and
that it will decline over the coming year, given our expectation
for continued revenue and EBITDA growth and the benefit from cost
savings already implemented."
"The outlook is stable. While leverage is high at the outset, we
expect it to decline somewhat over the coming year due to growth
in both EBITDA and revenues. This would reflect the growing
product offering, and cash generation for debt reduction," S&P
said.
"An upgrade over the near term is unlikely, as the company's
highly leveraged debt structure is a limiting factor. We could
lower the rating if increased competitive factors lead to a
deteriorating business profile or further debt-financed
acquisitions prevent leverage from dropping to the high-7x level
over the next year," S&P said.
BLAST ENERGY: GBH CPAs Raises Going Concern Doubt
-------------------------------------------------
Blast Energy Services, Inc., filed on April 16, 2012, its annual
report on Form 10-K for the fiscal year ended Dec. 31, 2011.
GBH CPAs, PC, in Houston, Texas, expressed substantial doubt about
Blast Energy Services' ability to continue as a going concern.
The independent auditors noted that Blast incurred a loss from
continuing operations for the year ended Dec. 31, 2011, and has an
accumulated deficit at Dec. 31, 2011.
The Company reported a net loss of $4.14 million on $446,526 of
revenues for 2011, compared with a net loss of $1.51 million on
$109,443 of revenues for 2010.
The Company's balance sheet at Dec. 31, 2011, showed $1.88 million
in total assets, $3.62 million in total liabilities, and a
stockholders' deficit of $1.74 million.
A copy of the Form 10-K is available for free at:
http://is.gd/T1bgwc
Houston, Texas-based Blast Energy Services, Inc., is seeking to
become an independent oil and gas producer with additional revenue
potential from its applied fluid jetting technology. The Company
plans to grow operations initially through the acquisition of oil
producing properties and then eventually, to acquire oil and gas
properties where its applied fluid jetting process could be used
to increase the field production volumes and value of the
properties in which it owns an interest.
BUILDERS FIRSTSOURCE: WP IX Can Buy Additional Common Shares
------------------------------------------------------------
Warburg Pincus Private Equity IX, L.P., and its affiliates filed
with the U.S. Securities and Exchange Commission amendment No. 1
to Schedule 13 by adding the following:
In order to retain its flexibility to increase its holdings
of shares of Common Stock, WP IX filed a Notification and
Report Form for Certain Mergers and Acquisitions with the
Federal Trade Commission under the Hart Scott Rodino
Antitrust Improvements Act of 1976, as amended, and requested
early termination of the waiting period pursuant to the HSR
Act. On April 16, 2012, early termination of the waiting
period was granted. As a result, WP IX is permitted under
the HSR Act to purchase additional shares of Common Stock
such that it could hold in excess of $136.4 million of shares
of Common Stock at the time of any such purchase. Subject to
market conditions and other factors, WP IX may make
acquisitions of additional shares of Common Stock from time
to time.
As of April 16, 2012, WP IX beneficially owns 24,613,907 shares of
common stock of Builders Firstsource, Inc., representing 25.5% of
the shares outstanding.
A copy of the amended filing is available for free at:
http://is.gd/3J6csD
About Builders FirstSource
Headquartered in Dallas, Texas, Builders FirstSource Inc. --
http://www.bldr.com/-- supplies and manufactures building
products for residential new construction. The Company operates
in 9 states, principally in the southern and eastern United
States, and has 55 distribution centers and 51 manufacturing
facilities, many of which are located on the same premises as its
distribution facilities.
Builders FirstSource reported a net loss of $95.51 million on
$700.34 million of sales for the year ended Dec. 31, 2010,
compared with a net loss of $61.85 million on $677.88 million of
sales during the prior year.
The Company also reported a net loss of $48.29 million on
$586.41 million of sales for the nine months ended Sept. 30, 2011,
compared with a net loss of $70.89 million on $553.25 million of
sales for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed
$391.03 million in total assets, $274.02 million in total
liabilities, and $117.01 million in total stockholders' equity.
* * *
Builders FirstSource Inc. carries 'CCC+' issuer credit ratings,
with negative outlook, from Standard & Poor's. S&P affirmed the
ratings in April 2011. "The ratings affirmation reflects our
belief that Builders FirstSource will likely continue to generate
negative free cash flow over the upcoming year, given the ongoing
weakness in new residential housing markets. While the company's
liquidity position, which we currently view as adequate, is likely
to somewhat improve due to the increased cash balances following
the planned refinancing and the extended maturity of its revolving
credit facility, it will likely continue to rely primarily on its
cash balances to meet its interest and operating obligations until
total housing starts improve at least 35% from 2010's level. If
housing starts were to remain at its recent historically low
levels, we believe the proposed refinancing would allow Builders
FirstSource to fund its anticipated cash shortfall for
approximately two years. The ratings also reflect what Standard &
Poor's Ratings Services considers to be the company's vulnerable
business profile given its significant exposure to highly cyclical
new residential construction markets and its narrow end-market
focus and geographic scope," S&P elaborated.
In April 2011, Moody's Investors Service assigned 'Caa2' corporate
family rating and probability of default ratings to Builders
FirstSource. Moody's said the 'Caa2' Corporate Family Rating
results from very weak operating performance due to ongoing
pressures in the residential new construction end market, the
primary driver of BLDR's revenues. Although some areas within
BLDR's primary geographic markets of North Carolina and South
Carolina may have some pockets of strength, overall, Moody's does
not expect substantial improvement in new housing starts in 2011
relative to 2010. The company's products are highly price
sensitive to competition and ongoing market conditions, making it
difficult for it to pass on substantial price increases. It is
also exposed to fluctuating costs associated with lumber, its
major raw material, adding to earnings volatility. For 2010,
adjusted operating margins are inadequate at negative 7.6% and
free cash flow-to-debt is insufficient at negative 15.3% (adjusted
per Moody's methodology). The company's inability to generate
positive earnings will result in very weak credit metrics for the
foreseeable future and will require cash to fund operating
shortfalls.
CANO PETROLEUM: Submits Disclosure Schedules on NBI SPA
-------------------------------------------------------
Cano Petroleum, Inc., entered into a Stock Purchase Agreement
dated March 7, 2012 with NBI Services, Inc. In connection with
the marketing process contemplated by the Company's Chapter 11
bankruptcy case, the Company is filing with the United States
Bankruptcy Court for the Northern District of Texas, Dallas
Division, the disclosure schedules to the Stock Purchase
Agreement. A copy of the Disclosure Schedules is available for
free at http://is.gd/kxkEnh
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.
CASCADES INC: S&P Revises Outlook on 'BB-' CCR to Stable
--------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Cascades
Inc. to stable from positive. At the same time, Standard & Poor's
affirmed its 'BB-' long-term corporate credit rating on the
company.
"We also affirmed our 'BB+' issue-level rating on Cascades'
secured debt; the '1' recovery rating on the debt is unchanged,
indicating our expectations of very high (90%-100%) recovery in
the event of default. In addition, we affirmed our ' B+' issue-
level rating on the company's senior unsecured debt. The '5'
recovery rating, reflecting our expectation of modest (10%-30%)
recovery in default, is unchanged," S&P said.
"The outlook revision reflects our view that the company's
leverage will not decline to 3.5x in 2012 as we expected
previously," said Standard & Poor's credit analyst Jatinder Mall.
"Although leverage increased in 2011 in response to higher
recycled fiber inputs prices, company acquisitions, and capital
expenditure, we are likely to see leverage decline to below 5.0x
in 2012 (but not as low as 3.5x) because input prices have
dropped."
"The ratings on Cascades reflect what Standard & Poor's views as
the company's good market position in consolidated markets, a
diverse revenue stream, and vertical integration. These strengths
are partially offset, in our opinion, by what we see as the
company's exposure to cyclical boxboard and containerboard
markets, volatile recycled fiber prices, and high debt levels,"
S&P said.
"Cascades is an integrated packaging and tissue company that
manufactures, converts, collects, and processes recycled paper. It
is the No. 1 containerboard producer in Canada, the second-largest
producer of coated recycled boxboard in Europe, and fourth-largest
tissue producer in North America. The company operates facilities
in Canada, the U.S., and Europe," S&P said.
"The stable outlook reflects our view that the company's leverage
will not decline to 3.5x in 2012 as expected previously. Based on
our expectation of recycled input prices, we believe EBITDA
generation will improve markedly in 2012 to 2010 levels and
leverage will be about 5x, gradually declining in subsequent
years. Standard & Poor's would likely lower the ratings on
Cascades if volumes and margins do not recover as expected in the
first half of 2012, leading to lower-than-expected EBITDA and a
sustainable leverage greater than 5x, and should headroom under
the fixed charge covenant not improve. Given our expectations, an
upgrade in the near term is unlikely but would require the company
to demonstrate its ability to sustain a leverage of 3.5x," S&P
said.
CDC CORP: China.com Wants Chapter 11 Case Dismissed
---------------------------------------------------
BankruptcyData.com reports that China.com, owner of approximately
250,517 shares of CDC common stock, filed with the U.S. Bankruptcy
Court a motion seeking to dismiss the CDC Chapter 11 case. They
also filed a motion seeking to continue the Disclosure Statement
hearing scheduled for April 26, 2012, until the Court considers
the dismissal motion.
According to BankruptcyData.com, China.com explains, "As set forth
in greater detail in the Motion to Dismiss, which is incorporated
herein by reference, China.com asserts that the Court lacks
subject matter jurisdiction in this case to hear and finally
determine the Remaining Shareholder Disputes. Furthermore,
China.com submits that "cause" exists under 11 U.S.C. ? 1112(b) to
dismiss the Debtor's bankruptcy case because no bankruptcy purpose
will be served by continuing the case and out of deference to
Cayman Islands law."
The Court scheduled May 8, 2012 hearing on the matter.
About CDC Corp.
Based in Atlanta, CDC Corp. (Nasdaq: CHINA) --
http://www.cdccorporation.net/-- is the parent company of CDC
Software (Nasdaq: CDCS). CDC Software is based dually in
Shanghai, China, and Atlanta and produces enterprise software
applications, IT consulting services, outsourced applications
development and IT staffing. The company's owners include Asia
Pacific Online Ltd., Xinhua News Agency and Evolution Capital
Management.
CDC Corporation, doing business as Chinadotcom, filed a Chapter
11 petition (Bankr. N.D. Ga. Case No. 11-79079) on Oct. 4, 2011.
James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout, PA,
in Atlanta, Georgia, serves as counsel. Moelis & Company LLC
serves as its financial advisor and investment banker. Marcus A.
Watson at Finley Colmer and Company serves as chief restructuring
officer. The Debtor estimated assets and debts at US$100 million
to US$500 million as of the Chapter 11 filing.
The Official Committee of Equity Security Holders of CDC
Corporation is represented by Troutman Sanders. The Committee
tapped Morgan Joseph TriArtisan LLC as its financial advisor.
CENTRAL CONCRETE: Filed for Chapter 11 After Default
----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Central Concrete Pumping Inc., a Englewood, Colorado-
based concrete pumping contractor, filed for Chapter 11 protection
after defaulting on secured debt. The Debtor owes $15.5 million
to secured lenders General Electric Capital Corp., Wells Fargo
Equipment Finance Inc., and Caterpillar Financial Services Corp.
Central Concrete, has a fleet of 50 concrete pumping trucks, filed
a Chapter 11 petition (Bankr. D. Colo. Case No. 12-17031) in
Denver on April 10, 2012.
During the height of the real estate boom in 2006, revenue was
$17.7 million. Sales declined to $7.1 million in 2010, rising last
year to $8.6 million.
CHALEDEEANNKA DEBORAH: Chapter 15 Case Summary
----------------------------------------------
Chapter 15 Debtor: Chaledeeannka Deborah Ann Williams Goyens Bell
3131 Gran Concourse, Apt. 4E
New York, NY
Chapter 15 Case No.: 12-11578
Chapter 15 Petition Date: April 17, 2012
Court: Southern District of New York (Manhattan)
Judge: Sean H. Lane
Chapter 15 Petitioner's Counsel: Pro Se
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $1,000,001 to $10,000,000
CHAPARRAL ENERGY: Moody's Rates $350MM Sr. Unsecured Notes 'B3'
---------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Chaparral
Energy, Inc.'s offering of $350 million senior unsecured notes due
2022. The proceeds of the notes will be used for debt repayment.
The notes are rated one notch below Chaparral's B2 Corporate
Family Rating (CFR). The rating outlook is stable.
"With approximately 50% of its average daily production comprised
of crude oil, Chaparral is well-positioned to enjoy robust cash
flow generation for at least the next several years based on our
expectations of a sustained high oil price environment," commented
Andrew Brooks, Moody's Vice President. "Reflecting the extent of
its liquids production, Chaparral's unleveraged cash margin
increased in 2011 to over $35 per Boe."
Rating Rationale
Chaparral's B2 CFR reflects its scale in terms of production and
proved reserves and high debt leverage, but also its strong cash
margins and improved liquidity. Chaparral's core operating
production is located in the Mid-Continent, where it is Oklahoma's
third largest oil producer, and in the Permian Basin, together
representing 90% of the company's proved reserves. At December 31,
2011, Chaparral's proved reserves totaled 156.3 million Boe (64%
proved developed, 64% liquids), and production averaged 23,712 Boe
per day.
In the Mid-Continent, Chaparral's conventional drilling techniques
are increasingly being supplemented by the horizontal drilling of
unconventional resource plays and by its investment in CO2
enhanced oil recovery (EOR). While production growth could
decelerate somewhat in 2012 as Chaparral redirects its spending to
more costly CO2 EOR development, its overall operating profile
continues to benefit from a long-lived reserve base, which has the
potential capacity to generate sizable ongoing production growth
longer term as the front-loaded EOR investment commences
operations.
The B3 senior unsecured note rating reflects both the overall
probability of default of Chaparral, to which Moody's assigns a
PDR of B2, and a loss given default of LGD4-62%. The size of its
senior secured revolving credit facility's priority claim relative
to the senior unsecured notes results in the notes being rated one
notch beneath the B2 Corporate Family Rating (CFR) under Moody's
Loss Given Default Methodology.
Chaparral's SGL-3 rating reflects adequate liquidity; as of April
2012 the company had approximately $305 million available under
its $375 million secured borrowing base revolving credit, which
has an April 2016 scheduled maturity date.
With the proceeds of this offering, Chaparral intends to fund the
tender offer for its $325 million 8.875% senior notes due 2017,
replacing existing debt and extending its average debt maturity
profile. Chaparral expects 2012 capital spending to approximate
$330 million, with any cash flow shortfalls to be funded with the
proceeds of certain asset sales.
The stable outlook is based upon the expectation that Chaparral
will continue to generate growth in liquids production, reserve
bookings and profitability while maintaining its recently improved
F&D cost profile, and further assumes a limited use of incremental
debt. A material improvement in leverage reflecting debt on
production below $35,000 per Boe could prompt consideration of an
upgrade, presuming improved F&D cost levels remain intact.
Deterioration in its already elevated debt levels, or a material
deterioration in capital productivity as it relates in particular
to Chaparral's growing EOR investment, could warrant a downgrade.
The principal methodology used in rating Chaparral was the Global
Independent Exploration and Production Industry Methodology
published in December 2011. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
Chaparral Energy, Inc. is a privately owned independent E&P
company headquartered in Oklahoma City, Oklahoma.
CHAPARRAL ENERGY: S&P Rates New $350MM Sr. Unsecured Notes 'B-'
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' senior
unsecured issue rating to Oklahoma City-based Chaparral Energy
Inc.'s proposed $350 million senior unsecured notes due 2022. "The
recovery rating on the notes is '5', indicating our expectation of
modest (10% to 30%) recovery in the event of a payment default.
The 'B' corporate credit rating and stable outlook on Chaparral
are unaffected. The exploration and production company intends to
use proceeds to repurchase its existing $325 million notes due
2017 and for general purposes. As of Dec. 31, 2011, Chaparral had
about $1 billion in balance sheet debt," S&P said.
"The ratings on Chaparral reflect its high debt levels, elevated
cost structure, and limited scale of operations. Standard & Poor's
also incorporates Chaparral's mix of crude oil and natural gas
reserves, solid reserve life, and improving financial performance
in the ratings," S&P said.
RATINGS LIST
Chaparral Energy Inc.
Corporate Credit Rating B/Stable/--
New Rating
Chaparral Energy Inc.
$350 mil senior unsecured notes due 2022 B-
Recovery Rating 5
CHARLES STREET: Competing Plan for Charles Street AME Church
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that although Charles Street African Methodist Episcopal
Church of Boston filed for Chapter 11 protection on March 20 to
stop foreclosure, secured lender OneUnited Bank already filed a
motion for permission to file a competing Chapter 11 plan.
The report relates that OneUnited, describing itself as the only
African American-owned bank in Massachusetts, wants to file a plan
of its own to fend off the reorganization plan the church filed
along with the Chapter 11 petition. The bank says the church's
plan can never be approved because the church would retain
ownership even though the secured lender objects and won't be paid
in full. The bank says that the so-called new-value contribution
of $1.5 million by the First Episcopal District of the African
Methodist Episcopal Church is illusory in substance.
According to the report, the disclosure statement describing the
church's plan is scheduled for an approval hearing on May 1. The
bank wants its motion for permission to file a competing plan to
be on the same day's calendar. The bank's plan would pay unsecured
creditors in full.
Charles Street African Methodist Episcopal Church --
http://www.csrrc.org/-- is located in Roxbury, Massachusetts.
The Church is to advocate for the needs of community residents and
to strengthen individuals, families, and the community by
providing social, educational, economic, and cultural services.
The Church filed for Chapter 11 protection (Bankr. D. Mass. Case
No. 12-12292) on March 20, 2012, to prevent its lenders, OneUnited
Bank, from foreclosing on a $1.1 million loan and auctioning off
the church. Judge Frank J. Bailey presides over the case.
Jonathan Lackow, Esq., at Ropes & Gray LLP, represents the Debtor.
The Debtor estimated both assets and debts of between $1 million
and $10 million.
CHINA 3C: Goldman Kurland Raises Going Concern Doubt
----------------------------------------------------
China 3C Group filed on April 16, 2012, its annual report on Form
10-K for the fiscal year ended Dec. 31, 2011.
Goldman Kurland and Mohidin LLP, in Encino, California, expressed
substantial doubt about China 3C Group's ability to continue as a
going concern. The independent auditors noted that the Company
has incurred significant losses from operations for the past three
years. "In addition, the Company's cash position substantially
deteriorated from 2010."
The Company reported a net loss of $52.84 million on sales of
$61.02 million for 2011, compared with a net loss of
$24.92 million on sales of $74.74 million for 2010.
The Company's balance sheet at Dec. 31, 2011, showed
$21.01 million in total assets, $7.65 million in total
liabilities, and stockholders' equity of $13.36 million.
A copy of the Form 10-K is available for free at:
http://is.gd/UuqUjk
Located in HangZhou City, Zhejiang Province, China, China 3C Group
operated in five reportable segments. Yiwu Yong Xin
Telecommunication Company, Limited, or "Yiwu," focuses on the
selling, circulation and modern logistics of fax machines and cord
phone products.
Hangzhou Wang Da Electronics Company, Limited, or "Wang Da,"
focuses on the selling, circulation and modern logistics of cell
phones, cell phones products, and digital products, including
digital cameras, digital camcorders, PDAs, flash disks, and
removable hard disks.
Hangzhou Sanhe Electronic Technology Limited, or "Sanhe," focused
on the selling, circulation and modern logistics of home
electronics, including DVD players, audio systems, speakers,
televisions and air conditioners. This entity ceased operation as
of Dec. 31, 2011.
Shanghai Joy & Harmony Electronics Company Limited, or "Joy &
Harmony," focused on the selling, circulation and modern logistics
of consumer electronics, including MP3 players, MP4 players,
iPods, electronic dictionaries and radios. This entity ceased
operation as of Dec. 31, 2011.
Jinhua Baofa Logistic Company Limited, or "Jinhua," provides
transportation logistics services to businesses. Jinhua operates
primarily in Eastern China and covers many of the most developed
cities in the Eastern China such as Shanghai, Hangzhou and
Nanjing.
CHURCH STREET: Auction Postponed Until May 11
---------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Church Street Health Management LLC will auction the
business on May 11, rather than April 20. The provider of
management services for 67 dental practices in 22 states reported
a $2.1 million net loss in March on total revenue of $11.6
million. Unless outbid, existing first-lien lenders are to buy
the business in exchange for $25 million in debt. Other bids are
now due May 4, rather than April 16. The hearing to approve the
sale will take place May 22.
The report notes that the official creditors' committee was given
the right by the bankruptcy judge to require the company to turn
over copies of insurance policies. The committee says that the
largest unsecured claims are held by patients who say they were
given services unnecessarily. Seeing the policies will help, the
committee says, in deciding if the insurance company was
entitled to deny coverage of the claims.
About Church Street
Church Street Health Management, LLC, a provider of management
services for 67 dental practices in 22 states, filed a Chapter 11
petition (Bankr. M.D. Tenn. Case No. 12-01573) in Nashville,
Tennessee on Feb. 20, 2012.
The following day, four affiliates, Small Smiles Holding Company,
LLC, Forba NY, LLC, EEHC, Inc., and Forba Services, LLC, filed
their Chapter 11 petitions (Case Nos. 12-01574 to 12-01577).
As of the Petition Date, the Debtors' assets have book value of
$895 million, with debt totaling $303 million. There is about
$131.5 million owing on first-lien obligations, plus $25.6 million
on a second-lien obligation. There is an additional $152 million
on three subordinated debts. The company's finances are
structured to comply with Islamic Shariah financing regulations.
In the Chapter 11 cases, the Debtors have engaged Waller Lansden
Dortch & Davis, LLP as bankruptcy counsel, and Alvarez & Marsal
Healthcare Industry Group, LLC, as financial and restructuring
advisor. Martin McGahan, a managing director at A&M, will serve
as chief restructuring officer of Church Street. Morgan Joseph
TriArtisan, LLC, is the investment banker. Garden City Group is
the claims and notice agent.
Garrison Investment Group is providing funding for the Chapter 11
case. The credit agreement will provide the Debtor with up to an
aggregate principal amount of $12 million in a revolving credit
facility.
COLEMAN CABLE: Moody's Affirms 'B2' CFR; Outlook Positive
---------------------------------------------------------
Moody's Investors Service changed Coleman Cable, Inc.'s ratings
outlook to positive from stable. Concurrently, Moody's affirmed
the company's B2 corporate family and probability of default
ratings, and the B3 rating on the $275 million senior unsecured
notes due 2018. Moody's also upgraded the speculative grade
liquidity rating to SGL-2 from SGL-3.
The outlook revision reflects Coleman's improving volume trends,
owing to strength across the bulk of its end-markets. The revision
also reflects generally higher profitability levels that have
translated into stronger credit metrics in recent periods, and
Moody's expectation that these trends will continue.
Ratings affirmed:
Corporate family rating at B2
Probability of default rating at B2
$275 million 9% senior unsecured notes due 2018 at B3 (LGD5, 70%).
Point estimate revised from (LGD4, 64%)
Rating upgraded:
Speculative grade liquidity rating to SGL-2 from SGL-3
Ratings Rationale
Coleman's sales volumes increased 5.5% in 2011, on top of a 16.7%
increase in 2010 when it recovered from the downturn. Leverage, as
represented by debt to EBITDA, declined to 4.2 times in 2011 from
4.5 times in 2010 (incorporates Moody's standard adjustments).
Moody's expects continued strength in the company's end-markets
will translate into further improvements in operating performance
such that leverage will decline below 4.0 times over the next 12
to 18 months.
The upgrade of the speculative grade liquidity rating to SGL-2
reflects Moody's view that Coleman will maintain a good liquidity
profile over the near-term given availability under its $250
million asset-backed revolving credit facility due 2016 and
flexibility under financial covenants. Weighing on these positive
factors is Moody's expectation that working capital growth will
pressure free cash flow generation.
Moody's could upgrade Coleman's ratings with growth in organic
volume trends that leads to sustained leverage below 4.0 times and
EBIT coverage of interest expense of about 2.0 times.
Moody's could revise Coleman's ratings outlook to stable if
negative volume trends, volatility in coppers prices, and/or
pressure on other input costs have a negative impact on
profitability such that leverage increases above 4.5 times and
EBIT to interest falls below 1.5 times. Moody's could lower
Coleman's ratings if leverage increases above 6.0 times, EBIT
coverage of interest expense falls below 1.0 times, and/or there
is a material weakening in its liquidity profile.
Headquartered in Waukegan, Illinois, Coleman Cable, Inc. is a
leading designer, developer, manufacturer and supplier of
electrical wire and cable products for consumer, commercial and
industrial applications, with operations primarily in the United
States. The company reported sales of $867 million for the fiscal-
year ended December 31, 2011.
The principal methodology used in this rating was Global
Manufacturing Industry published in December 2010.
COMPETITIVE TECHNOLOGIES: Joel Evans Resigns from Board
-------------------------------------------------------
Joel M. Evans, M.D. resigned as a director of Competitive
Technologies, Inc., effective March 31, 2012. The Board of
Directors of CTTC accepted Dr. Evans' resignation and commended
him for his exemplary service to CTTC.
About Competitive Technologies
Fairfield, Conn.-based Competitive Technologies, Inc. (OTC QX:
CTTC) -- http://www.competitivetech.net/-- was established in
1968. The Company provides distribution, patent and technology
transfer, sales and licensing services focused on the needs of its
customers and matching those requirements with commercially viable
product or technology solutions. Sales of the Company's
Calmare(R) pain therapy medical device continue to be the major
source of revenue for the Company.
As reported in the Troubled Company Reporter on Nov. 2, 2010,
Mayer Hoffman McCann CPAs, in New York, expressed substantial
doubt about Competitive Technologies' ability to continue as a
going concern, following the Company's results for the fiscal year
ended July 31, 2010. The independent auditors noted that at
July 31, 2010, the Company has incurred operating losses since
fiscal year 2006.
The Company reported a net loss of $1.84 million for the nine
months ended Sept. 30, 2011, compared with a net loss of $2.30
million for the nine months ended Oct. 31, 2010.
The Company's balance sheet at Sept. 30, 2011, showed
$5.95 million in total assets, $6.36 million in total liabilities,
all current, and a $409,428 total shareholders' deficit.
CONGRESSIONAL HOTEL: Files Sale Based Liquidating Plan
------------------------------------------------------
Congressional Hotel Corp. and Casco Hotel Group, LLC, filed a
joint disclosure statement in support of its plan of liquidation
dated Feb. 7, 2012.
Rockville Hospitality, LLC, has agreed to purchase the Debtors'
assets for $19,500,000, less a Mold Remediation Credit of
$475,000. For purposes of allocating the Purchase Price
between the Debtors' estates, each Debtor is deemed to retain
title to its property as the property was titled prior to the
termination of the Ground Lease. Accordingly, Casco is selling
its right, title and interest in the Land, while CHC is selling
its right, title and interest in the remaining Assets. Casco has
engaged an appraiser who has valued the Land encumbered by the
Ground Lease to be $3,450,000, and the Land unencumbered by the
Ground Lease to be $5,700,000. Further Court Order will
conclusively determine the value of the Land owned by Casco and
therefore the allocation of the proceeds of the sale of the
Debtors' Assets. Prior to disbursement of funds pursuant to the
Plan, the Court will determine the allocation of the proceeds from
the sale of the Debtors' Assets to the Debtors' respective
estates.
The Plan contemplates, among other things, the payment in full in
cash of all Administrative Claims and Priority Tax Claims.
The classification and treatment of claims against Congressional
Hotel are:
A. Class 1 (Allowed Citizens Secured Claim) will be paid in
full at Closing from the proceeds of the sale of the
Assets. Estimated recovery is 100%.
B. Class 2 (Allowed Secured Claim of Montgomery County,
Maryland) will be paid in full at Closing from the
proceeds of the sale of the Assets. Estimated recovery
is 100%.
C. Class 3 (Priority Tax Claims) will be paid in full on or
before the Effective Date. Estimated recovery is 100%.
D. Class 4 (General Unsecured Claims) will receive a pro rata
share of any remaining monies after the payment of all
secured, administrative and priority claims. Estimated
recovery is yet to be determined, once valuation of the
Debtors' respective estates is determined by further Court
order.
E. Class 5 (Equity Interest Holders) will be cancelled and
each holder will not be legally entitled to receive or
retain distributions on account of Equity Interests.
Estimated recovery is 0%.
The classification and treatment of claims against Casco Hotel
are:
A. Class 1 (Allowed Secured Claim of Montgomery County,
Maryland) will be paid in full at Closing from the
proceeds of the sale of the Assets. Estimated recovery
is 100%.
B. Class 2 (Equity Interest Holders) will be cancelled and
each Holder will receive or retain distributions after all
Claims of CASCO creditors are paid in full. Estimated
recovery is Unknown.
The hearing to consider the approval of the Disclosure Statement
will be held on April 25, 2012, at 10:00 a.m.
A copy of the disclosure statement is available for free at:
http://bankrupt.com/misc/CONGRESSIONALHOTEL_ds.pdf
About Congressional Hotel and CASCO Hotel Group
Casco Hotel Group, LLC, owns the Legacy Hotel in Rockville,
Maryland. Congressional Hotel Corporation is a holdover tenant on
the Property and manages the Property on behalf of CASCO. The
hotel was previously known as Ramada Inn.
Congressional Hotel filed for Chapter 11 relief (Bankr. D. Md.
Case No. 11-26732) on Aug. 15, 2011. CASCO filed for Chapter 11
relief (Bankr. D. Md. Case No. 11-26880) two days later.
CASCO is a single-asset real estate company. It declared assets
and liabilities each in the range of $10 million to $50 million.
Congressional Hotel scheduled $709,121 in assets and $19,883,667
in debts. James Greenan, Esq., at McNamee Hosea, represents
Congressional Hotel.
Congressional Hotel previously filed for Chapter 11 bankruptcy
(Bankr. D. Md. Case No. 09-17901) on May 3, 2009. James Greenan,
Esq., at McNamee Hosea represented the Debtor in its restructuring
efforts. The 2009 petition estimated the Debtor's assets and
debts from $10 million to $50 million. The case was dismissed on
May 18, 2011, at the request of creditor Mervis Diamond Corp. But
a resolution couldn't be confirmed with Mervis Diamond and other
creditors, prompting Congressional Hotel to seek Chapter 11
protection again.
The U.S. Trustee said an official committee has not been appointed
in the bankruptcy case of Congressional Hotel because an
insufficient number of persons holding unsecured claims against
the Debtor expressed interest in serving on a committee. The U.S.
Trustee reserves the right to appoint such a committee should
interest developed among the creditors.
CONGRESSIONAL HOTEL: Bid to Employ Real Estate Broker Denied
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Maryland has denied
the request of Congressional Hotel Corporation and CASCO Hotel
Group, LLC, to employ Molinaro Koger as exclusive real estate
broker.
As reported in the Troubled Company Reporter on Nov. 17, 2011,
the Debtors requested for an order establishing, inter alia,
bidding procedures in connection with the sale of substantially
all of the Debtors' assets free and clear of liens, claims,
encumbrances and other interests.
The Debtors propose to pay the broker for its services a
commission, if earned in accordance with the conditions of the
agreement, equal to $300,000 (reduced by a service fee of $35,000
that was paid by the principals of CHC to Mr. Koger in the 2009
CHC Bankruptcy Case. For the avoidance of doubt, the commission
due Mr. Koger is $265,000.
The Debtors had said the broker is a "disinterested person" as
that term is defined in Section 101(14) of the Bankruptcy Code.
About Congressional Hotel and CASCO Hotel Group
Casco Hotel Group, LLC, owns the Legacy Hotel in Rockville,
Maryland. Congressional Hotel Corporation is a holdover tenant on
the Property and manages the Property on behalf of CASCO. The
hotel was previously known as Ramada Inn.
Congressional Hotel filed for Chapter 11 relief (Bankr. D. Md.
Case No. 11-26732) on Aug. 15, 2011. CASCO filed for Chapter 11
relief (Bankr. D. Md. Case No. 11-26880) two days later.
CASCO is a single-asset real estate company. It declared assets
and liabilities each in the range of $10 million to $50 million.
Congressional Hotel scheduled $709,121 in assets and $19,883,667
in debts. James Greenan, Esq., at McNamee Hosea, represents
Congressional Hotel.
Congressional Hotel previously filed for Chapter 11 bankruptcy
(Bankr. D. Md. Case No. 09-17901) on May 3, 2009. James Greenan,
Esq., at McNamee Hosea represented the Debtor in its restructuring
efforts. The 2009 petition estimated the Debtor's assets and
debts from $10 million to $50 million. The case was dismissed on
May 18, 2011, at the request of creditor Mervis Diamond Corp. But
a resolution couldn't be confirmed with Mervis Diamond and other
creditors, prompting Congressional Hotel to seek Chapter 11
protection again.
The U.S. Trustee said an official committee has not been appointed
in the bankruptcy case of Congressional Hotel because an
insufficient number of persons holding unsecured claims against
the Debtor expressed interest in serving on a committee. The U.S.
Trustee reserves the right to appoint such a committee should
interest developed among the creditors.
CONVERTED ORGANICS: Has 44.4-Mil. Outstanding Shares at April 2
---------------------------------------------------------------
Converted Organics Inc., on Jan. 12, 2012, issued a senior secured
convertible note, in exchange for the senior secured convertible
note issued on Nov. 2, 2011, in the aggregate original principal
amount of $3,474,797, which had $2,456,595 of principal
outstanding on Jan. 12, 2012, immediately prior to the exchange,
for a senior secured convertible note in the aggregate original
principal amount of $2,456,595, as well as additional
consideration.
As of April 2, 2012, the principal amount of the Note has declined
to $1,134,223. From March 23, 2012 until April,2 2012, a total of
$234,447 in principal had been converted into 27,034,102 shares of
common stock. Since the issuance of the Original Note, a total of
$2,715,777 in principal had been converted into 44,364,128 shares
of common stock. The Note holders are accredited investors and
the shares of common stock were issued in reliance on Section 4(2)
under the Securities Act of 1933, as amended.
As of April 2,2012, the Company had 44,401,292 shares of common
stock outstanding.
About Converted Organics
Boston, Mass.-based Converted Organics Inc. utilizes innovative
clean technologies to establish and operate environmentally
friendly businesses. Converted Organics currently operates in
three business areas, namely organic fertilizer, industrial
wastewater treatment and vertical farming.
The Company reported a net loss of $8.9 million on $2.8 million of
revenues for the nine months ended Sept. 30, 2011, compared with a
net loss of $31.6 million on $2.8 million of revenues for the same
period last year.
The Company's balance sheet at Sept. 30, 2011, showed
$17.2 million in total assets, $11.9 million in total liabilities,
and stockholders' equity of $5.3 million.
As reported in the TCR on April 7, 2011, CCR LLP, in Glastonbury,
Connecticut, expressed substantial doubt about Converted Organics'
ability to continue as a going concern, following the Company's
results for the fiscal year ended Dec. 31, 2010. The independent
auditors noted that the Company has an accumulated deficit at
Dec. 31, 2010, and has suffered significant net losses and
negative cash flows from operations.
CYBERDEFENDER CORP: Scheduled for Auction on May 1
--------------------------------------------------
Bloomberg News reports that CyberDefender Corp., the Los Angeles-
based owner of Double My Speed, will hold an auction for the
business on May 1 under court-approved sale procedures. Unless
there is a better offer, the buyer will be Guthy- Renker LLC, who
intends to purchase the business in exchange for $12 million in
debt and $250,000 cash. Competing bids are due by April 26.
Direct marketer Guthy-Renker holds $11.6 million in secured debt
and is owed another $3.3 million under a services agreement. In
addition, the buyer agreed to provide $4.6 million in secured
financing for the Chapter 11 effort. The hearing to approve the
sale will take place May 2.
About CyberDefender
Los Angeles, Calif.-based CyberDefender Corporation is a provider
of remote LiveTech services and security and computer optimization
software and to the consumer and small business market. The
Company's mission is to bring to market advanced solutions to
protect computer users against Internet viruses, spyware, identity
theft and related security threats.
The Company reported a net loss of $17.58 million on $39.88
million of total net revenue for the nine months ended Sept. 30,
2011, compared with a net loss of $31.21 million on $31.93 million
of total net revenue for the same period a year ago.
In regulatory filings, the Company disclosed $7.96 million in
total assets, $42.54 million in total liabilities, and a $34.58
million total stockholders' deficit, as of Sept. 30, 2011.
CyberDefender Corporation filed for Chapter 11 protection (Bankr.
D. Del. Case No. 12-10633) on Feb. 23, 2012.
The Company, which estimated up to $10 million in assets and up to
$50 million in liabilities as of the Chapter 11 filing,
concurrently announced that it has entered into an asset purchase
agreement with GR Match, an affiliate of Guthy-Renker, to sell
substantially all of its assets to GR Match.
GR Match has committed to provide up to $4.6 million in debtor-in-
possession financing.
XRoads Solutions Group, LLC serves as financial advisor to the
Company and Pachulski Stang Ziehl & Jones LLP (James E. O'Neill)
serves as bankruptcy counsel.
CYCLE COUNTRY: Has $422,400 Restated Loss in June 30 Quarter
------------------------------------------------------------
Cycled Country Accessories Corp. filed on April 16, 2012,
Amendment No. 2 to its quarterly report on Form 10-Q for the
fiscal quarter ended June 30, 2011, to correct errors relating to
the number of shares outstanding, the valuation and timing of the
expense recognition of those employee equity awards, and the
amount and timing of sales discounts and allowances and selling
expenses related to a customer incentive program that was put into
place by former management and the error regarding the number of
shares outstanding related to equity compensation awards with
multiple vesting dates that covered multi-year service periods.
"These errors, in total, caused us to understate total revenue and
selling expenses related to our customer incentive program, while
understating our stock-based compensation. Additionally, the
error regarding the number of shares that were to have been issued
and outstanding had the effect of further misstating the basic and
fully-diluted earnings per share for the three and nine months
ended June 30, 2011."
The Company reported a net loss (restated) of $422,453 on $990,780
of revenues for the three months ended June 30, 2011, compared
with a net loss of $583,541 on $1.80 million of revenues for the
three months ended June 30, 2010.
The Company reported a net loss (restated) of $2.08 million on
$7.98 million of revenues for the nine months ended June 30, 2011,
compared with a net loss of $644,734 on $8.04 million of revenues
for the nine months ended June 30, 2010.
The Company's balance sheet (restated) at June 30, 2011, showed
$13.86 million in total assets, $8.84 million in total
liabilities, and stockholders' equity of $5.02 million.
A copy of the Form 10-Q/A is available for free at:
http://is.gd/5YjhMk
The Company also filed amended quarterly reports for the three
months ended March 31, 2011, and the three months ended Dec. 31,
2010.
A copy of the amended quarterly report for the three months ended
March 31, 2011, is available for free at http://is.gd/WuWksK
A copy of the amended quarterly report for the three months ended
Dec. 31, 2010, is available for free at http://is.gd/5U06LQ
About Cycle Country
Spencer, Iowa-based Cycle Country Accessories Corp. has two
distinct segments engaged in the design, manufacture, sale and
distribution of products. One of the segments has branded,
proprietary products, and the other is a contract manufacturing
division. The largest segment, Cycle Country ATV Accessories,
designs, manufactures and sells a popular selection of branded
accessories for vehicles in the Powersports industry which are
sold to various wholesale distributors throughout the United
States of America, Canada, Mexico, South America, Europe, and
Asia. Imdyne is engaged in the design, manufacture and assembly
of an array of parts for original equipment manufacturers (OEMs)
and other customers.
* * *
As reported in the TCR on Jan. 20, 2011, Boulay, Heutmaker, Zibell
& Co. P.L.L.P., in Minneapolis, Minnesota, expressed substantial
doubt about Cycle Country Accessories' ability to continue as a
going concern, following the Company's results for the fiscal year
ended Sept. 30, 2010. The independent auditors noted that the
Company sustained several consecutive periods of operating losses.
CYCLE COUNTRY: Restates Fiscal 2010 10-K to Correct Errors
----------------------------------------------------------
Cycle Country Accessories Corp. filed on April 16, 2011, Amendment
No. 1 to its annual report on Form 10-K for the fiscal year ended
Sept. 30, 2010, to correct errors relating to the number of shares
outstanding, the valuation and timing of the expense recognition
of those employee and director equity awards, and the amount and
timing of sales discounts and allowances and selling expenses
related to a customer incentive program that was put into place by
management. The error regarding the number of shares outstanding
related to equity compensation awards with multiple vesting dates
that covered multi-year service periods. "These errors, in total,
caused us to overstate total revenue and understate our stock-
based compensation and customer incentive program-related selling
expenses. Additionally, the error regarding the number of shares
that were to have been issued and outstanding had the effect of
further misstating the basic and fully-diluted earnings per share
for the year ended Sept. 30, 2010."
The Company reported a net loss (restated) of $2.02 million on
$11.94 million of revenues for fiscal 2010, compared with a net
loss of $6.79 million on $10.28 million of revenues for fiscal
2009.
The Company's balance sheet (restated) at Sept. 30, 2010, showed
$16.73 million in total assets, $9.63 million in total
liabilities, and stockholders' equity of $7.10 million.
A copy of the Form 10-K/A is available for free at:
http://is.gd/KrX55i
About Cycle Country
Spencer, Iowa-based Cycle Country Accessories Corp. has two
distinct segments engaged in the design, manufacture, sale and
distribution of products. One of the segments has branded,
proprietary products, and the other is a contract manufacturing
division. The largest segment, Cycle Country ATV Accessories,
designs, manufactures and sells a popular selection of branded
accessories for vehicles in the Powersports industry which are
sold to various wholesale distributors throughout the United
States of America, Canada, Mexico, South America, Europe, and
Asia. Imdyne is engaged in the design, manufacture and assembly
of an array of parts for original equipment manufacturers (OEMs)
and other customers.
* * *
As reported in the TCR on Jan. 20, 2011, Boulay, Heutmaker, Zibell
& Co. P.L.L.P., in Minneapolis, Minnesota, expressed substantial
doubt about Cycle Country Accessories' ability to continue as a
going concern, following the Company's results for the fiscal year
ended Sept. 30, 2010. The independent auditors noted that the
Company sustained several consecutive periods of operating losses.
DACOSTA RESTAURANTS: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: DaCosta Restaurants, LLC
dba Dunkin Donuts
423 Kennedy Memorial Drive
Waterville, ME 04901-4520
Bankruptcy Case No.: 12-10413
Chapter 11 Petition Date: April 16, 2012
Court: United States Bankruptcy Court
Maine (Bangor)
Debtor's Counsel: Michael J. Pearce, Esq.
PEARCE & DOW, LLC
Two Monument Square
P.O. Box 108
Portland, ME 04112-0108
Tel: (207) 822-9900
E-mail: mpearce@pearcedow.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 20 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/meb12-10413.pdf
The petition was signed by Antonio M. DaCosta, sole member.
DECOR PRODUCTS: Posts $2.6 Million Net Income in 2011
-----------------------------------------------------
Decor Products International, Inc., filed with the U.S. Securities
and Exchange Commission its annual report on Form 10-K disclosing
net income of US$2.67 million on US$19 million of net revenues in
2011, compared with net income of US$4.50 million on US$26.82
million of net revenues in 2010.
The Company's balance sheet at Dec. 31, 2011, showed US$42.64
million in total assets, US$9.08 million in total liabilities and
US$33.55 million in total stockholders' equity.
For the year ended Dec. 31, 2011, HKCMCPA Company Limited, in Hong
Kong, China, noted that the Company has made default in repayment
of convertible notes and promissory notes that raise substantial
doubt about its ability to continue as a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/OlgnyQ
About Decor Products
Decor Products International, Inc., through its subsidiaries,
mainly engages in the manufacture and sale of furniture decorative
paper and related products in the People's Republic of China. The
Company is headquartered in Chang'an Town, Dongguan, Guangdong
Province, between Shenzhen and Guangzhou in southern China.
DELTA PETROLEUM: Robbins Geller Launches Class Suit vs. D&Os
------------------------------------------------------------
Robbins Geller Rudman & Dowd LLP disclosed that a class action has
been commenced in the U.S. District Court for the District of
Colorado on behalf of purchasers of Delta Petroleum, Inc. publicly
traded securities during the period between Nov. 9, 2010 and Nov.
9, 2011.
The firm said in its press release, "If you wish to serve as lead
plaintiff, you must move the Court no later than 60 days from date
of filing. If you wish to discuss this action or have any
questions concerning this notice or your rights or interests,
please contact plaintiff's counsel, Darren Robbins of Robbins
Geller at 800-449-4900 or 619-231-1058, or via e-mail at
djr@rgrdlaw.com. If you are a member of this class, you can view
a copy of the complaint as filed or join this class action online
at http://www.rgrdlaw.com/cases/delta/ Any member of the putative
class may move the Court to serve as lead plaintiff through
counsel of their choice, or may choose to do nothing and remain an
absent class member."
The complaint charges certain of Delta's officers and directors
with violations of the Securities Exchange Act of 1934. Delta is
not named as a defendant in the action due to its filing for
bankruptcy protection on Dec. 16, 2011.
The complaint alleges that during the Class Period, defendants
issued materially false and misleading statements regarding the
Company's business and financial results. As a result of
defendants' false statements, Delta stock traded at artificially
inflated prices during the Class Period, reaching a high of $11.70
per share on Feb. 28, 2011.
On Nov. 9, 2011, Delta announced is third quarter 2011 financial
results. The Company reported a net loss of ($429.4) million, or
($15.40) diluted earnings per share, for the quarter ended
Sept. 30, 2011. The significant loss was due mostly to costs
associated with drilling dry holes. The Company additionally
provided an update on its strategic alternatives process, advising
that the Company had not received any offers to purchase the
Company or its assets, and as a result, Delta would be forced to
restructure its indebtedness. Delta further warned investors that
should it be unsuccessful in achieving a transaction or
transactions addressing the Company's liquidity, it would be
forced to seek protection under Chapter 11 of the U.S. Bankruptcy
Code. On this news, Delta stock collapsed $1.34 per share to close
at $0.71 per share on Nov. 10, 2011, a one-day decline of 65% on
volume of nearly 4.5 million shares.
On Dec. 16, 2011, Delta announced that it, along with its
affiliates, had filed a voluntary petition for reorganization
under Chapter 11 in the U.S. Bankruptcy Court.
According to the complaint, the true facts, which were known by
defendants but concealed from the investing public during the
Class Period, were as follows: (a) the Company was not adequately
reserving for its dry hole costs and impairments in violation of
Generally Accepted Accounting Principles, causing its financial
results to be materially misstated; (b) Delta's unproductive
assets would hinder its ability to find a buyer for itself or its
assets as the value of the Company's assets was less than the
value of its aggregate debt; and (c) the Company had far greater
exposure to liquidity concerns than it had previously disclosed.
Plaintiff seeks to recover damages on behalf of all purchasers of
Delta publicly traded securities during the Class Period (the
"Class"). The plaintiff is represented by Robbins Geller, which
has expertise in prosecuting investor class actions and extensive
experience in actions involving financial fraud.
Robbins Geller, a 180-lawyer firm with offices in San Diego, San
Francisco, New York, Boca Raton, Washington, D.C., Philadelphia
and Atlanta, is active in major litigations pending in federal and
state courts throughout the United States and has taken a leading
role in many important actions on behalf of defrauded investors,
consumers, and companies, as well as victims of human rights
violations.
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.
DENNY'S CORP: S&P Withdraws 'B+' Corp. Credit Rating at Request
---------------------------------------------------------------
Standard & Poor's Ratings Services withdrew all of its ratings,
including the 'B+' corporate credit rating on Spartanburg, S.C.-
based Denny's Corp. at the company's request. There is no rated
debt outstanding.
DEWEY & LEBOEUF: Said to Have Hired Bankruptcy Lawyer
-----------------------------------------------------
Noeleen Walder and Leigh Jones, writing for Reuters, report that
Dewey & LeBoeuf has hired Albert Togut, Esq., at Togut, Segal &
Segal LLP, according to two attorneys at other law firms who have
knowledge of the matter.
According to Reuters, one of the sources said Mr. Togut is working
with at least one member of the firm's new management team.
One source told Reuters Mr. Togut was tapped by fellow bankruptcy
lawyer Martin Bienenstock, Esq., who last month was appointed to
Dewey's new five-person office of the chairman.
Reuters says Mr. Togut did not respond to several messages seeking
comment. The report notes a spokesman for Dewey, Angelo
Kakolyris, declined to comment, saying, "The firm does not comment
on speculation."
Reuters adds it is unclear when Mr. Togut was hired. Reuters says
neither Mr. Bienenstock nor Richard Shutran, Esq., members of
Dewey's office of the chairman, responded to requests seeking
comment.
New York-based Dewey is a 950-lawyer firm, one of the biggest in
the United States. It has lost some 70 partners, or 23% of them,
since the start of the year as it negotiates with creditors.
Dewey was formed by the 2007 merger of 250-attorney Dewey
Ballantine and 700-attorney LeBoeuf, Lamb, Greene & McRae. At its
height in 2008, it had 1,450 attorneys, according to The National
Law Journal.
Reuters notes the hiring of Togut does not necessarily mean Dewey
is planning a bankruptcy filing. For example, the firm could be
looking for legal help to renegotiate its debt.
Reuters relates one partner who recently left Dewey said the firm
could be preparing for a so-called prepackaged bankruptcy,
possibly involving a merger with another law firm.
The report notes Dewey is in the process of negotiating with its
lenders, including JPMorgan Chase and Citigroup. According to the
report, a spokeswoman for Citi Private Bank referred all inquiries
to JPMorgan, which Citi identified as Dewey's primary lender.
JPMorgan declined comment.
Reuters also reports the firm's leaders said earlier this week
that the vast majority of the recent departures were part of its
plan to reduce its partner ranks to improve profitability.
DIRECT REALTY: East 46th Apartment Buildings File for Ch. 11
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the owner of two adjacent apartment buildings at 334-
336 East 46th Street in Manhattan filed a Chapter 11 petition to
stop foreclosure of a $1.8 million second mortgage held by Prompt
Mortgage Providers.
Direct Realty LLC, owner of a property that has 10 apartments and
a tavern on the ground floor, filed a Chapter 11 petition (Banrk.
S.D.N.Y. Case No. 12-11483) in Manhattan on April 10. There is a
$4 million first mortgage and a $4 million third mortgage. The
owner says the property is worth $9 million. The petition shows
assets of $9 million with debt totaling $12.5 million. Unsecured
claims total $2.7 million. The owner said it bought the property
"at the height of the market and fell behind on mortgage
payments."
The Debtor is represented by Mark A. Frankel, Esq., at Backenroth
Frankel & Krinsky, LLP, in New York.
DRAGON MARTIAL: Case Summary & 17 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Dragon Martial Arts, Inc.
dba DMA, Inc.
3015 E. Randol Mill Road
Arlington, TX 76011
Bankruptcy Case No.: 12-42245
Chapter 11 Petition Date: April 16, 2012
Court: United States Bankruptcy Court
Northern District of Texas (Ft. Worth)
Judge: D. Michael Lynn
Debtor's Counsel: Eric A. Liepins, Esq.
ERIC A. LIEPINS, P.C.
12770 Coit Rd., Suite 1100
Dallas, TX 75251
Tel: (972) 991-5591
E-mail: eric@ealpc.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 17 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/txnb12-42245.pdf
The petition was signed by Rohit Oberoi, president.
EAST COAST DIVERSIFIED: Drake & Klein Raises Going Concern Doubt
----------------------------------------------------------------
East Coast Diversified Corporation filed on April 16, 2012, its
annual report on Form 10-K for the fiscal year ended Dec. 31,
2011.
Drake & Klein CPAs, in Clearwater, Fla., expressed substantial
doubt about East Coast Diversified's ability to continue as a
going concern. The independent auditors noted that the Company
has not generated revenue and has not established operations.
The Company reported a net loss of $2.31 million on $612,482 of
revenues for 2011, compared with a net loss of $2.49 million on
$129,248 of revenues for 2010.
The Company's balance sheet at Dec. 31, 2011, showed $2.03 million
in total assets, $4.90 million in total liabilities, and a
stockholders' deficit of $2.87 million.
A copy of the Form 10-K is available for free at:
http://is.gd/SYknwW
East Coast Diversified Corporation, headquartered in Marietta,
Georgia, through its majority owned subsidiary, EarthSearch
Communications International, Inc., offers a portfolio of GPS
devices, RFID interrogators, integrated GPS/RFID technologies and
Tag designs.
EDGEN MURRAY: Files Amendment No.4 to Form S-1 Prospectus
---------------------------------------------------------
Edgen Group Inc. filed amendment No. 4 to its registration
statement on Form S-1 relating to an initial public offering of
shares of its Class A common stock. Edgen Group Inc. is a newly
formed company that would serve as the holding company for the
business of Edgen Murray II, L.P., and its subsidiaries if the
offering is completed.
This registration statement disclosed certain preliminary
information related to the expected results of operations of Edgen
Murray II, L.P. and other financial data relating to Edgen Murray
II, L.P., and its equity method investment, Bourland & Leverich
Holdings LLC.
Edgen Murray estimates a net loss of between $3.25 million and
$4.25 million for the three months ended March 31, 2012. The
Company estimates sales in the range of $270 million to $287
million for the first quarter.
A copy of the disclosure is available for free at:
http://is.gd/uEYyLj
About Edgen Murray
Edgen Murray II L.P., headquartered in Baton Rouge, Louisiana, is
a distributor of carbon steel and alloy products for use primarily
in specialized applications in the energy and niche industrial
segments. The company operates on a global basis, with
approximately one-third of its sales generated outside of the
Americas, and has distribution centers in five countries to
facilitate timely deliveries to companies and contractors engaged
in the development of new energy infrastructure projects and the
maintenance of existing facilities. In 2010, Edgen Murray had
sales of $628 million. The company is primarily owned by
Jefferies Capital Partners, certain co-investors and members of
senior management.
The Company reported a net loss of $24.52 million in 2011, a net
loss of $98.28 million in 2010, and a net loss of $20.88 million
in 2009.
The Company's balance sheet as of Dec. 31, 2011, showed
$551.05 million in total assets, $706.11 million in total
liabilities and a $155.05 million total deficit.
* * *
As reported by the TCR on April 11, 2011, Moody's Investors
Service lowered Edgen Murray II, L.P.'s probability of default
rating (PDR) to Caa2 from Caa1, its corporate family rating (CFR)
to Caa3 from Caa1 and the company's 12.25% senior secured notes to
Caa3 from Caa2. The downgrade was prompted by Edgen Murray's
continuing weak performance even as many of its peers began to
benefit in 2010 from higher oil prices, a higher rig count for oil
drilling, and increased drilling in and production from
alternative shale plays.
In September 2010, Standard & Poor's Ratings Services said that it
lowered its corporate credit rating on Edgen Murray II L.P. to 'B-
' from 'B'. The rating outlook is stable.
"The downgrade reflects S&P's expectation that 2010 EBITDA will
likely be around $30 million, materially lower than its previous
expectation of about $55 million, due to ongoing weakness in the
company's Western Hemisphere segment as a result of lower capital
spending on projects in the region," said Standard & Poor's credit
analyst Sherwin Brandford.
ELPIDA MEMORY: U.S. Court Grants Protection From Creditors
----------------------------------------------------------
Peg Brickley at Dow Jones' Daily Bankruptcy Review reports that
Elpida Memory Inc. won U.S. bankruptcy court protection while it
is being courted by potential buyers in a Japanese restructuring
effort.
As reported in the March 21, 2012 edition of the TCR, Elpida
Memory Inc. sought the U.S. bankruptcy court's recognition of its
reorganization proceedings currently pending in Tokyo District
Court, Eight Civil Division.
Yuko Sakamoto, as foreign representative, says that ongoing
litigation in the U.S. will force Elpida to incur substantial
costs and divert significant monetary and personnel resources from
the Japan reorganization effort. Elpida has been named as a
defendant or counter-claim defendant in a number of matters in
which it is alleged that Elpida products infringe certain patents.
The suits alleged that certain Elpida DRAM products infringe on
patents held by the complaining parties. Elpida has also been
paying the cost of defense for non-debtor subsidiary Elpida USA
and certain of its customers.
Elpida is a party to numerous contracts with U.S. counterparties
and/or non-U.S. counterparties, including license agreements,
sublicense agreements and other agreements involving U.S. patents,
patent applications or intellectual property, some of which
contain provisions granting the counterparty a right to terminate
for various reasons, including Elpida's filing bankruptcy,
becoming a debtor under the Bankruptcy Code or becoming insolvent.
To ensure that the reorganization in Japan continues in a smooth
and stable manner, Elpida seeks provisional relief on
an emergency basis, pursuant to Sections 105 and 1519, to, among
other things, stay litigation pending against (i) Elpida and (ii)
its non-debtor subsidiary, Elpida USA, as well the down-stream
customers, to whom Elpida owes indemnification obligations.
About Elpida Memory
Elpida Memory Inc. (TYO:6665) -- http://www.elpida.com/ja/-- is
a Japan-based company principally engaged in the development,
design, manufacture and sale of semiconductor products, with a
focus on dynamic random access memory (DRAM) silicon chips. The
main products are DDR3 SDRAM, DDR2 SDRAM, DDR SDRAM, SDRAM,
Mobile RAM and XDR DRAM, among others. The Company distributes
its products to both domestic and overseas markets, including the
United States, Europe, Singapore, Taiwan, Hong Kong and others.
The company has eight subsidiaries and two associated companies.
Tokyo, Japan-based Elpida Memory Inc. sought the U.S.
bankruptcy court's recognition of its reorganization proceedings
currently pending in Tokyo District Court, Eight Civil Division.
Yuko Sakamoto, as foreign representative, filed a Chapter 15
petition (Bankr. D. Del. Case No. 12-10947) for Elpida on
March 19, 2012.
Elpida Memory and its subsidiary, Akita Elpida Memory, Inc., filed
for corporate reorganization proceedings in Tokyo District Court
on Feb. 27, 2012.
The Tokyo District Court immediately rendered a temporary
restraining order to restrain creditors from demanding repayment
of debt or exercising their rights with respect to the company's
assets absent prior court order.
Atsushi Toki, Attorney-at-Law, has been appointed by the Tokyo
Court as Supervisor and Examiner in the case.
EMPIRE RESORTS: Monticello Amends Option Agreement with EPT
-----------------------------------------------------------
Monticello Raceway Management, Inc., a wholly-owned subsidiary of
Empire Resorts, Inc., on Dec. 21, 2011, entered into an option
agreement with EPT Concord II, LLC. Pursuant to the Option
Agreement, EPT granted MRMI a sole and exclusive option to lease
certain EPT property located in Sullivan County, New York,
pursuant to the terms of a lease negotiated between the parties.
On March 30, 2012, MRMI and EPT entered into a letter agreement
amending certain terms of the Option Agreement. More
specifically, MRMI and EPT agreed to extend the option exercise
period from June 21, 2012, to July 21, 2012. In addition, the
parties agreed to extend the date by which they would enter into a
master development agreement with respect to the EPT Property from
March 31, 2012, to April 30, 2012. Except for these amendments,
the Option Agreement remains unchanged and in full force and
effect.
About Empire Resorts
Based in Monticello, New York, Empire Resorts, Inc. (NASDAQ: NYNY)
-- http://www.empireresorts.com/-- owns and operates Monticello
Casino & Raceway, a video gaming machine and harness racing track
and casino located in Monticello, New York, 90 miles northwest of
New York City.
Friedman LLP, after auditing the Company's financial statements
for the year ended Dec. 31, 2010, expressed substantial doubt
about the Company's ability to continue as a going concern.
Friedman noted that the Company's ability to continue as a going
concern depends on its ability to satisfy its indebtedness when
due. In addition, the Company has continuing net losses and
negative cash flows from operating activities.
Empire Resorts reported a net loss of $17.57 million on
$68.54 million of net revenues for the year ended Dec. 31, 2010,
compared with a net loss of $10.57 million on $67.63 million of
net revenues during the prior year. The Company reported net
income of $958,000 on $53.53 million of net revenues for the nine
months ended Sept. 30, 2011.
The Company's balance sheet at Sept. 30, 2011, showed
$50.53 million in total assets, $24.86 million in total
liabilities, and $25.66 million in total stockholders' equity.
EPICEPT CORP: To Raise $1.1 Million in Registered Direct Offering
-----------------------------------------------------------------
EpiCept Corporation has entered into a definitive agreement with a
single life science focused institutional investor for the
purchase of 1,065 shares of its new Series B 0% Convertible
Preferred Stock at $1,000 per share, which are convertible into an
aggregate of approximately 6.3 million shares of its common stock,
and five-year warrants to purchase up to approximately 3.1 million
shares of its common stock at an exercise price of $0.17 per share
that are immediately exercisable. EpiCept will receive
approximately $0.97 million in net proceeds from the offering.
The offering is expected to close on or about April 2, 2012,
subject to customary closing conditions. Net proceeds from the
offering will be used to meet working capital needs and for
general corporate purposes.
Rodman & Renshaw, LLC, a subsidiary of Rodman & Renshaw Capital
Group, Inc. (Nasdaq: RODM), acted as the exclusive placement agent
for the offering.
The proposed public offering is being made pursuant to an
effective registration statement, and may be made only by means of
a prospectus and prospectus supplement. A copy of the prospectus
supplement relating to the common stock and warrants can be
obtained from Rodman & Renshaw LLC, 1251 Avenue of the Americas,
20th Floor, New York, NY 10020, or by calling 212-356-0549 or e-
mailing placements@rodm.com. An electronic copy of the prospectus
supplement will also be available on the Web site of the
Securities and Exchange Commission at http://www.sec.gov.
About EpiCept Corporation
Tarrytown, N.Y.-based EpiCept Corporation (Nasdaq and Nasdaq OMX
Stockholm Exchange: EPCT) -- http://www.epicept.com/-- is focused
on the development and commercialization of pharmaceutical
products for the treatment of cancer and pain. The Company's lead
product is Ceplene(R), approved in the European Union for the
remission maintenance and prevention of relapse in adult patients
with Acute Myeloid Leukemia (AML) in first remission. In the
United States, a pivotal trial is scheduled to commence in 2011.
The Company has two other oncology drug candidates currently in
clinical development that were discovered using in-house
technology and have been shown to act as vascular disruption
agents in a variety of solid tumors. The Company's pain portfolio
includes EpiCept(TM) NP-1, a prescription topical analgesic cream
in late-stage clinical development designed to provide effective
long-term relief of pain associated with peripheral neuropathies.
The Company's recurring losses from operations and the Company's
stockholders' deficit raise substantial doubt about its ability to
continue as a going concern and, as a result, the Company's
independent registered public accounting firm, Deloitte & Touche
LLP, in Parsippany, New Jersey, included an explanatory paragraph
in its report on the Company's consolidated financial statements
for the year ended Dec. 31, 2010, which was included in our Annual
Report on Form 10-K, with respect to this uncertainty.
The Company reported a net loss of $15.65 million on $944,000 of
total net revenues for the year ended Dec. 31, 2011, compared with
a net loss of $15.53 million on $994,000 of total net revenues
during the prior year.
The Company's balance sheet at Dec. 31, 2011, showed $7.52 million
in total assets, $24.30 million in total liabilities and a $17.14
million total stockholders' deficit.
FASTECH SERVICES: Metal Workers Allowed $42K for Fringe Benefits
----------------------------------------------------------------
Chief Bankruptcy Judge Thomas L. Perkins granted the request filed
by the Sheet Metal Workers Local 218 for $42,342 in fringe
benefits as a chapter 11 administrative priority expense in the
Chapter 11 cases of FasTech Services, Inc.
Judge Perkins also ruled that the contributions due the employee
funds, plus interest that accrued before FasTech's case was
converted to Chapter 7 bankruptcy on June 10, 2011, are allowable
as chapter 11 administrative priority expenses, as follows:
Fund Contributions Interest
---- ------------- --------
Sheet Metal Workers' National
Pension Fund $4,496.64 $200.27
International Training Institute
for the Sheet Metal and Air
Conditioning Industry 281.04 12.52
National Energy Management
Institute Committee 70.24 3.14
Sheet Metal Occupational
Health Institute Trust 46.84 2.08
Sheet Metal Workers International
Association Scholarship Fund 23.40 1.05
National Stabilization Agreement
of the Sheet Metal Industry 3,570.60 159.03
Judge Perkins denied the request by the funds for administrative
priority status for the liquidated damages due under the
collective bargaining agreements on account of the Debtor's
failure to pay the contributions.
Through R.J. Power Plumbing & Heating Company, one of its
subsidiaries, the Debtor employed union sheet metal workers
pursuant to certain collective bargaining agreements with Sheet
Metal Workers Local 218. The Debtor took no action in the
bankruptcy case to reject or modify the CBAs, under section 1113
or otherwise.
A copy of the Court's April 12, 2012 Opinion is available at
http://is.gd/kCDjjWfrom Leagle.com.
FasTech Services, Inc., a company formed from the merger of
several companies, providing construction and related services as
an HVAC contractor in the construction industry, filed a chapter
11 petition (Bankr. C.D. Ill. Case No. 10-81323) on April 22,
2010, listing under $50,000 in assets and under $10 million in
debts. Judge Thomas L. Perkins oversees the case. Ross
Bartolotta, Esq., at Swanson Martin & Bell LLP, served as the
Debtor's counsel. The petition was signed by Frank Bonadio,
CEO and president. The case case was converted to chapter 7 on
June 10, 2011. A. Clay Cox was named as Chapter 7 Trustee.
FEDERAL BAKERS: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Federal Bakers, Inc.
P.O. Box 2577
Leesburg, VA 20177
Bankruptcy Case No.: 12-12425
Chapter 11 Petition Date: April 16, 2012
Court: United States Bankruptcy Court
Eastern District of Virginia (Alexandria)
Judge: Brian F. Kenney
Debtor's Counsel: Christopher L. Rogan, Esq.
ROGANLAWFIRM, PLLC
30-D Catoctin Circle, S.E.
Leesburg, VA 20175
Tel: (703) 771-9191
Fax: (703) 771-9797
E-mail: crogan@roganfirm.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 20 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/vaeb12-12425.pdf
The petition was signed by Mansour Yazdani, president.
Affiliate that filed separate Chapter 11 petition:
Petition
Debtor Case No. Date
------ -------- ----
Sterling WH Co, LLC 09-18914 10/29/09
FIRST DATA: Barry Cooper Named SVP and Chief Accounting Officer
---------------------------------------------------------------
The Board of Directors of First Data Corporation appointed Barry
Cooper, 45, as Senior Vice President and Chief Accounting Officer
of FDC.
Mr. Cooper has served as Vice President-Global Accounting and
Shared Services at FDC since June 2010. Prior to that Mr. Cooper
was Vice President of Accounting Shared Services from June, 2008
to June 2010. From February 2002 to June 2008 Mr. Cooper held
various positions in the finance group of FDC which included
having responsibility over external reporting, Sarbanes-Oxley
compliance and various finance and accounting functions. Before
joining FDC, Mr. Cooper served as Assistant Controller for VICORP
Restaurants Ltd, from August 1999 to January 2002. From 1992 to
1999, Mr. Cooper was employed by the public accounting firm
Deloitte LLP.
Mr. Cooper will receive an annual salary of $250,000 and is
eligible for a target annual bonus of $150,000 payable at the
discretion of the FDC Governance, Compensation and Nominations
Committee of the Board of Directors. Mr. Cooper also was awarded
a long term cash award in 2011 with an initial value of $43,333
that is governed by the FDC Long Term Cash Award Plan. Mr. Cooper
also received an award under the Cash Award Plan in 2010, $30,450
of which will be adjusted based on the Adjustment Percentage as
defined in the Cash Award Plan and paid on March 1, 2013.
In addition, Mr. Cooper participates in equity compensation
programs under the 2007 Stock Incentive Plan for Key Employees of
First Data Corporation. Under the 2007 Equity Plan, Mr. Cooper
purchased and currently holds 60,000 shares of common stock of
First Data Holdings Inc., the parent company of FDC. He also was
granted options to purchase shares of common stock of Holdings
under the 2007 Plan.
Mr. Cooper also was awarded options to purchase 90,000 shares of
common stock of Holdings under the 2007 Plan that are subject to
EBITDA-based performance vesting. The performance options will
vest in the following percentages upon achievement of the
corresponding EBITDA target in any fiscal year between Jan. 1,
2010, and Dec. 31, 2013, and expire on May 12, 2020.
Mr. Cooper replaced Ray Winborne as the principal accounting offer
of FDC, effective April 12, 2012. Mr. Winborne will continue in
his role as FDC's Chief Financial Officer.
A copy of the Form 8-K is available for free at:
http://is.gd/qcRiIt
About First Data
Based in Atlanta, Georgia, First Data Corporation, with over
$10 billion of revenue for the 12 months ended June 30, 2010,
provides commerce and payment solutions for financial
institutions, merchants, and other organizations worldwide.
The Company reported a net loss of $336.10 million in 2011, a net
loss of $846.90 million in 2010, and a net loss of $1.01 billion
on $9.31 million in 2009.
The Company's balance sheet as of Dec. 31, 2011, showed
$40.27 billion in total assets, $36.80 billion in total
liabilities, and $3.40 billion in total equity.
* * *
The Company's carries a 'B3' corporate family rating, with a
stable outlook, from Moody's Investors Service, a 'B' corporate
credit rating, with stable outlook, from Standard & Poor's, and
a 'B' long-term issuer default rating from Fitch Ratings.
Standard & Poor's Ratings Services in December 2010 assigned its
'B-' issue rating with a '5' recovery rating to First Data Corp.'s
(B/Stable/--) $2 billion of 8.25% second-lien cash-pay notes due
2021, $1 billion $8.75% second-lien pay-in-kind-toggle notes due
2022, and $3 billion 12.625% unsecured cash-pay notes due 2021.
The '5' recovery rating indicates lenders can expect modest (10%-
30%) recovery in the event of payment default. Under S&P's
default analysis, there is insufficient collateral to fully cover
First Data's first-lien debt. As a result, the remaining value of
the company (generated by non-U.S. assets and not pledged) would
be shared pari passu among the uncovered portion of first-lien
debt, new second-lien debt, and new and existing unsecured debt.
FIRST SECURITY: Larry Mauldin Named Chairman and Director
---------------------------------------------------------
Larry D. Mauldin was appointed as Director and Chairman to the
Board of Directors of First Security Group, Inc., effective
April 16, 2012. In addition, Mr. Mauldin is expected to be
appointed to serve on the Board of Directors of FSGBank and as
Chairman of FSGBank's Board, subject to the completion of the
regulatory application process.
Mr. Mauldin completed a 40-year banking career by retiring in
March 2007 as Chairman, President and CEO of SunTrust Bank of East
Tennessee, N.A., a subsidiary of SunTrust Banks, Inc., in
Knoxville, Tennessee. Mr. Mauldin is currently the Chairman of
the Board of Covenant Health in Knoxville, TN, a nonprofit
corporation that is the parent company for an eight hospital
health care system, and Project GRAD, also in Knoxville, TN, a
nonprofit corporation that works closely with the Knox County
public school district to help improve academic success for over
7,500 children in 14 schools located in the heart of Knoxville.
"Larry has deep roots in East Tennessee along with a storied
career with SunTrust that will assist us as we continue to develop
FSGBank," said First Security CEO and President Michael Kramer.
"The addition of Larry supports a cornerstone belief of our new
corporate culture: accountability. For the first time, the CEO
and Chairman roles have been separated, which we believe to be the
most effective leadership structure at this time to continue the
transformation of our culture."
"It is my honor and privilege to welcome Larry to the Board," said
Carol Jackson, Director of First Security. "Over the past year,
steady but significant progress has been achieved in securing the
right talent at all levels of the organization. The impact of a
chairman with Larry's experience and in-market presence cannot be
understated. Instituting a non-executive Chairman will also
provide a direct line of accountability for Mike and our
management team, allowing them to focus on the Company's strategic
direction and day-to-day operations, while allowing the Chairman
to lead the Board in its fundamental role of providing advice to,
and independent oversight of, management."
Mr. Mauldin began his career in 1967 with the Trust Company of
Georgia and served as Chairman, President and CEO of two different
banking subsidiaries of the Trust Company of Georgia between 1980
and 1991 before becoming Chairman, President and CEO of Third
National Bank/SunTrust Bank of East Tennessee and serving in that
role for 13 years. During his tenure as CEO of SunTrust Bank of
East Tennessee, its assets increased from $400 million to $2.4
billion and became a deposit market share leader in the Knoxville
MSA.
"The vision and strategic objectives of FSG lead to a compelling
and attractive story," Mr. Mauldin said. "I believe FSG
represents the best of both worlds in banking, having the size and
diversity to provide a wide-range of products and services, while
nimble enough to make decisions and changes in an effective and
efficient manner. Additionally, the strong demographics of
Knoxville and Chattanooga make East Tennessee a natural region for
innovative and entrepreneurial small businesses that need a
community banking partner. I consider it a privilege to join the
FSG team."
Mr. Mauldin will receive an annual retainer of $10,000 for his
services as Chairman of the Board and otherwise will receive
compensation for his services as director consistent with that of
the Company's other non-employee directors, including retainers,
board and committee fees, chairperson fees, and the eligibility to
receive stock-based awards and other compensation as may be paid
to the Company's directors from time to time.
About First Security Group
First Security Group, Inc., is a bank holding company
headquartered in Chattanooga, Tennessee, with $1.2 billion in
assets as of Sept. 30, 2010. Founded in 1999, First
Security's community bank subsidiary, FSGBank, N.A., has 37 full-
service banking offices, including the headquarters, along the
interstate corridors of eastern and middle Tennessee and northern
Georgia and 325 full-time equivalent employees. In Dalton,
Georgia, FSGBank operates under the name of Dalton Whitfield Bank;
along the Interstate 40 corridor in Tennessee, FSGBank operates
under the name of Jackson Bank & Trust.
The Company reported a net loss of $23.06 million in 2011, a net
loss of $44.34 million in 2010, and a net loss of $33.45 million
in 2009.
The Company's balance sheet at Dec. 31, 2011, showed $1.11 billion
in total assets, $1.04 billion in total liabilities and $68.32
million in total stockholders' equity.
For 2011, Joseph Decosimo and Company, PLLC, in Chattanooga,
Tennessee, expressed substantial doubt about the Company's ability
to continue as a going concern. The independent auditors noted
that the Company has recently incurred substantial losses. The
Company is also operating under formal supervisory agreements
with the Federal Reserve Bank of Atlanta and the Office of the
Comptroller of the Currency and is not in compliance with all
provisions of the Agreements. Failure to achieve all of the
Agreements' requirements may lead to additional regulatory
actions.
GAME TRADING: Best Buy Given More Time to Respond to Exit Plan
--------------------------------------------------------------
Bankruptcy Judge Nancy V. Alquist signed off on a stipulation
among Game Trading Technologies Inc., Gamers Factory Inc., the
Official Committee of Unsecured Creditors appointed in the
Debtors' cases and Best Buy Stores, L.P., extending the time for
Best Buy to respond to the first amended joint plan of
reorganization for the Debtors. The Bankruptcy Court approved the
Disclosure Statement explaining the First Amended Joint Plan on
March 16, 2012. The deadline to respond was April 13, 2012. The
stipulation extends that through and including April 16. A copy
of the stipulation dated April 13, 2012, is available at
http://is.gd/OdVDkVfrom Leagle.com.
When the Debtors filed for bankruptcy, they listed Best Buy Stores
as the largest unsecured creditor, owed $1,317,069.
About Game Trading Technologies
Game Trading Technologies Inc. fka City Language Exchange, Inc.
(OTC BB: GMTD) filed for Chapter 11 protection (Bankr. D. Md. Lead
Case No. 12-11519) on Jan. 30, 2012. James Edward Van Horn, Jr.,
Esq., at McGuirewoods LLP, represents the Debtor.
WeinsweigAdvisors LLC is providing temporary employees, including
Marc Weinsweig -- marc@weinsweigadvisors.com -- as chief
restructuring officer.
When it filed for bankruptcy, Game Trading estimated $0 to $50,000
in assets and $1 million to $10 million in debts. Affiliate
Gamers Factory, Inc., filed a separate petition for Chapter 11
relief (Bankr. D. Md. Case No. 12-11522) on the same day, listing
$1 million to $10 million in both assets and debts.
An Official Committee of Unsecured Creditors has been appointed in
the case. The panel is represented by Gary H. Leibowitz, Esq.,
and G. David Dean, Esq., at Cole, Schotz, Meisel, Forman &
Leonard, P.A.
On Feb. 8, 2012, the Debtors filed their proposed plan of
reorganization and motion to establish bidding procedures for and
sale of substantially all of the companies' assets. Pursuant to
the sale and bid procedures motion, the companies seek to sell,
subject to higher and better offers and bankruptcy Court approval,
substantially all of their assets to two stalking horse bidders,
DK Trading Partners, LLC, and Mantomi Sales, LLC, respectively.
Mantomi Sales, LLC, is 100% owned by Todd Hayes, the Debtors'
president and CEO. Pursuant to the Mantomi Sales LLC asset
purchase agreement, (i) Mr. Hays was required to resign as
President and CEO of the companies on or before the execution of
the Mantomi APA; (ii) the companies' Chief Restructuring Officer
may employ Mr. Hays as an independent consultant to the companies
in matters unrelated to the sale; and (iii) nothing in the Mantomi
APA constitutes or will be deemed a breach of the employment
agreement between Mr. Hays and the companies.
GATEWAY METRO: Exits From Bankruptcy Protection
-----------------------------------------------
American Bankruptcy Institute reports that Gateway Metro Center
LLC has exited from bankruptcy protection with a reorganization
plan that will pay all of its creditors in full over time.
About Gateway Metro Center
Gateway Metro Center LLC, is a California limited liability
company whose primary assets include (1) an approximately 121,462
square foot - 11 story office building and land located in the
City of Pasadena, California ("Gateway Metro Center" formerly
known as Gateway Tower) including rights to further develop the
land on which the Gateway Metro Center is located, and (2) an
approximately 8,000 square feet parcel of land immediately
abutting the office building.
The Company filed a Chapter 11 petition (Bankr. C.D. Calif. Case
No. 11-47919) on Sept. 6, 2011. Judge Barry Russell presides over
the case. Howard J. Weg, Esq., and Lorie A. Ball, Esq., at
Peitzman, Weg & Kempinsky LLP, in Los Angeles, California,
represent the Debtors. Skeehan & Company serves as accountant to
the Debtor. FTI Consulting, Inc., is the financial advisor to the
Debtor. Colliers International, Inc. acts as leasing broker.
In its schedules, the Debtor disclosed $32,570,485 in assets and
$22,338,135 in debts. The petition was signed by John F. Pipia,
its president.
GENCORP INC: Board Approves Grants Under 2012 LTIP
--------------------------------------------------
The Organization & Compensation Committee of the Board of
Directors of GenCorp Inc. approved grants to eligible employees of
the Company including the named executive officers under the
Company's 2012 Long-Term Incentive Program and pursuant to the
Company's Amended and Restated 2009 Equity and Performance
Incentive Plan.
2012 LTIP 2012 LTIP
Performance Restricted
Executive Officer Shares Shares
----------------- ----------- ----------
Scott J. Seymour 113,407 30,242
Kathleen E. Redd 41,026 10,940
Chris W. Conley 14,364 3,830
Christopher C. Cambria 25,568 6,818
The vesting of the performance shares granted under the 2012 LTIP
is based on the Company's achieving the economic value added
performance targets for fiscal 2014. The number of the
performance shares granted under the 2012 LTIP represents the
maximum number of shares that may vest. The vesting of
performance shares depends on the level of EVA target achieved,
within a minimum threshold level and a maximum level, and ranges
from 50% to 125% of the target award. No performance shares will
vest if the threshold EVA target is not achieved. The vesting of
the restricted stock granted under the 2012 LTIP is time-based and
has a three year vesting period.
On March 28, 2012, the Company appointed Christopher C. Cambria as
the Secretary of the Company and Kathleen E. Redd as the Assistant
Secretary of the Company.
On March 28, 2012, the Company held its annual meeting of
Shareholders. Eight directors were elected at the meeting,
namely:
(1) Thomas A. Corcoran;
(2) James R. Henderson;
(3) Warren G. Lichtenstein;
(4) David A. Lorber;
(5) James H. Perry;
(6) Scott J. Seymour;
(7) Martin Turchin; and
(8) Robert C. Woods.
Stockholders approved an amendment to the GenCorp Amended and
Restated 2009 Equity and Performance Incentive Plan to increase
the number of shares authorized and reserved for issuance
thereunder by 3,000,000 shares and approved an advisory resolution
regarding the compensation of GenCorp's Named Executive Officers.
Stockholders also ratified the appointment of
PricewaterhouseCoopers LLP, an independent registered public
accounting firm, as independent auditors of the Company for the
fiscal year ending Nov. 30, 2012.
About GenCorp Inc.
Rancho Cordova, Calif.-based GenCorp Inc. (NYSE: GY)
-- http://www.GenCorp.com/-- is a manufacturer of aerospace and
defense products and systems with a real estate segment that
includes activities related to the re-zoning, entitlement, sale,
and leasing of the Company's excess real estate assets.
The Company's balance sheet at Nov. 30, 2011, showed $939.50
million in total assets, $1.14 billion in total liabilities, $4.4
million in redeemable common stock and a $211.60 million total
shareholders' deficit.
* * *
Standard & Poor's in February 2011 has raised its corporate credit
rating on GenCorp Inc. to 'B' from 'B-'. S&P also raised its
rating on the company's first-lien secured debt to 'BB-' from 'B+'
and on the subordinated debt to 'CCC+' from 'CCC'. The recovery
rating on the first-lien secured debt remains unchanged at '1',
and the recovery rating on the subordinated debt remains unchanged
at '6'. The outlook is stable.
"We are raising its ratings on GenCorp by one notch to reflect the
company's improved liquidity position," said Standard & Poor's
credit analyst Lisa Jenkins. "The ratings on GenCorp reflect its
highly leveraged capital structure, weak financial performance,
limited diversity, and modest scale of operations compared with
competitors. Offsetting these challenges to some extent is the
company's good niche positions in aerospace propulsion and solid
backlog. S&P characterize GenCorp Inc.'s business profile as weak
and its financial profile as highly leveraged."
As reported by the TCR on May 24, 2011, Moody's Investors Service
upgraded the corporate family and probability of default ratings
of GenCorp Inc. to B1 from B2. The upgrade reflects the Company's
steady improvement to operating results, as a leading niche
supplier of solid and liquid rocket propulsion systems to prime
defense contractors. Operating margins have grown to above 11%
(inclusive of Moody's standard adjustments) in the most recent
twelve-month period, resulting from growth in defense programs
that GenCorp supplies (THAAD, Aegis, PAC-3) and good cost
controls. GenCorp's funded backlog has grown steadily over
several years, and is now about 90% of sales. The level of
backlog provides good forward revenue visibility and compares
favorably with other defense suppliers.
GENMAR HOLDINGS: Court Dismisses Claims in Seafarer's Suit
----------------------------------------------------------
Senior District Judge Jack B. Weinstein dismissed claims filed
against Genmar Yacht Group LLC, f/d/b/a Carver Boat Corporation
LLC, which was named as third party defendant in the personal
injury lawsuit, Kelly M. Lyons, Plaintiff, v. Rienzi & Sons, Inc.,
Defendant; and Rienzi & Sons, Inc., Third-Party Plaintiff, v.
Staten Island Yacht Sales, Inc., Genmar Yacht Group LLC, f/d/b/a
Carver Boat Corporation LLC, Marquis Yachts, LLC, Carver Boat
Corporation LLC, Donald L. Blount & Associates, Nuvolari-Lenard
Naval Design, and Does 1 through 5, Third-Party Defendants, No.
09-CV-4253 (E.D.N.Y.), pursuant to an April 12, 2012. Memorandum
and Order available at http://is.gd/0bZiqofrom Leagle.com.
Mr. Lyons, a seafarer, alleged he was injured when he slipped and
fell on the deck of the yacht on which he was working. He
contends that the cause was a design defect -- a slippery surface.
He sued the vessel's owner, who claimed against other defendants;
Mr. Lyons later added his own claims against the same third-party
defendants. They include the manufacturer and the intermediate
seller of the yacht.
Jury trial will proceed against Rienzi, the original defendant,
and Genmar, the manufacturer of the Brianna, to the limited extent
that it is protected by insurance. Jury selection will commence
on May 21, 2012 at 9:30 a.m. Trial will begin the following day.
About Genmar Holdings
Pulaski, Wisconsin-based Carver Italia, LLC, and its affiliates,
including Genmar Holdings, Inc. -- http://www.genmar.com/-- were
the world's second-largest manufacturer of fiberglass powerboats.
The company generated $460 million in annual revenue making boats
using brand names including Carver, Four Winns, Glastron, Larson,
and Wellcraft.
Genmar and an affiliate filed for Chapter 11 bankruptcy protection
on June 1, 2009 (Bankr. D. Minn. Case No. 09-33773, and 09-43537).
James L. Baillie, Esq., and Ryan Murphy, Esq., at Fredrikson &
Byron, PA, assisted the Debtors in their restructuring efforts.
Carver Italia estimated $10 million to $50 million in assets and
$100 million to $500 million in debts.
Manchester Companies, Inc., was named Chief Restructuring Officer
of Genmar and has been managing the company's restructuring
process since then.
In early 2010, Genmar obtained approval to sell its assets in an
auction. Platinum Equity acquired essentially all of the assets
for $70 million. J&D Acquisitions bought the Carver/Marquis
brands for $6.05 million. MCBC Hydra Boats purchased the Hydra-
Sport business for $1 million.
The case was subsequently converted to Chapter 7 liquidation and
the Office of the U.S. Trustee for Region 12 appointed Charles W.
Ries as Chapter 7 case trustee.
GETTY PETROLEUM: Bankruptcy Judge Punts Bank Row to Delaware
------------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that a New York
bankruptcy judge on Tuesday relinquished the reins to an adversary
proceeding against several banks that is tangentially related to
the Getty Petroleum Marketing Inc. case she's in charge of,
sending it to a Delaware judge to decide what to do with it.
About Getty Petroleum
A remnant of J. Paul Getty's oil empire, Getty Petroleum Marketing
markets gasolines, hydraulic fluids, and lubricating oils through
a network of gas stations owned and operated by franchise holders.
A former subsidiary of Russian oil giant LUKOIL, the company
operates in the Mid-Atlantic and Northeastern US states. Getty
Petroleum Marketing's primary asset is the more than 800 gas
stations in the Mid-Atlantic states which are located on
properties owned by Getty Realty. After scaling back the
company's operations to cut debt, in 2011 LUKOIL sold Getty
Petroleum Marketing to investment firm Cambridge Petroleum Holding
for an undisclosed price.
Getty Petroleum and three affiliates filed for Chapter 11
bankruptcy (Bankr. S.D.N.Y. Case Nos. 11-15606 to 11-15609) on
Dec. 5, 2011. Judge Shelley C. Chapman presides over the case.
Loring I. Fenton, Esq., John H. Bae, Esq., Kaitlin R. Walsh, Esq.,
and Michael J. Schrader, Esq., at Greenberg Traurig, LLP, in New
York, N.Y., serve as Debtors' counsel. Ross, Rosenthal & Company,
LLP, serves as accountants for the Debtors. Getty Petroleum
Marketing, Inc., disclosed $46,592,263 in assets and $316,829,444
in liabilities as of the Petition Date. The petition was signed
by Bjorn Q. Aaserod, chief executive officer and chairman of the
board.
The Official Committee of Unsecured Creditors is represented by
Wilmer Cutler Pickering Hale and Dorr LLP. Alvarez & Marsal North
America, LLC, serves as the Committee's financial advisors.
GREEN ENERGY: MaloneBailey LLP Raises Going Concern Doubt
---------------------------------------------------------
Green Energy Management Services Holdings, Inc., filed on
April 16, 2012, its annual report on Form 10-K for the fiscal year
ended Dec. 31, 2011.
MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt
about Green Energy Management Services Holdings' 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 $19.25 million on $116,550 of
revenue for 2011, compared with a net loss of $1.91 million on
$291,311 of revenue for 2010.
"Selling, general and administrative expenses for the years ended
Dec. 31, 2011, and 2010, were $19,250,020 and $1,931,861,
respectively. The increase of $17,318,159 for 2011, or 896%, as
compared to the same period in 2010 is primarily attributable to
non-cash expenses in issuing stock warrants for potential working
capital of $11,719,170, consulting expenses of $1,305,841, legal
and accounting fees of $667,671, research and development expenses
related to our water valve product of $248,087 and travel expenses
of $188,784."
"There also were increases in salaries and benefits of
approximately $248,087, increase in insurance expense of
approximately $49,787, increase in non-cash expense amortizing
intangibles of $52,800, an increase of $58,412 in rent expense due
to having space both in Teaneck, N.J., and Miami, Fla., and an
increase of $40,262 in expenses relating to preparing reports and
other matters relating to requirements under the federal
securities laws."
The Company's balance sheet at Dec. 31, 2011, showed $1.48 million
in total assets, $3.67 in total liabilities, and a stockholders'
deficit of $2.19 million.
A copy of the Form 10-K is available for free at:
http://is.gd/Z6jHWT
Baton Rouge, Louisiana-based Green Energy Management Services
Holdings, Inc., is a full service energy management company. GEM
provides its clients all forms of energy efficiency solutions
mainly based in two functional areas: energy efficient lighting
upgrades and efficient water utilization. GEM is currently
primarily involved in the distribution of energy efficient light
emitting diode ("LED") units (the "Units") to end users who
utilize substantial quantities of electricity. [GEM is also
currently involved in the initial stages of customer installation
of its Water Management System.] GEM structures its contracts
with no upfront or maintenance costs to its customers and shares
in the achieved energy[, water utilization] and maintenance
savings.
HALLWOOD GROUP: Incurs $6.3 Million Net Loss in 2011
----------------------------------------------------
The Hallwood Group Incorporated filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing a
net loss of $6.33 million on $139.50 million of textile products
sales in 2011, compared with net income of $9.88 million on
$168.35 million of textile products sales in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $88.90
million in total assets, $29.76 million in total liabilities and
$59.14 million in total stockholders' equity.
Deloitte & Touche LLP, in Dallas, Texas, noted that the award
proposed by the court against the Company and the uncertainty
related to the ongoing litigation raises substantial doubt about
the Company's ability to continue as a going concern.
In one adversarial proceeding, a court issued a proposed findings
proposing that damages be awarded against the Company totaling
approximately $18,700,000 plus prejudgment and postjudgment
interest and attorney's fees as may be requested and awarded
pursuant to a subsequent motion. As a result of the Proposed
Findings, the Company recorded a charge of $7,500,000 in its
statement of operations and its balance sheet as a noncash accrual
under Hallwood Energy matters - Litigation Reserve in the
Adversary Proceeding, in addition to the $3,201,000 that was
previously recorded in connection with the Equity Support
Agreement for a total reserve of $10,701,000 at Dec. 31, 2011, for
the Adversary Proceeding.
A copy of the Form 10-K is available for free at:
http://is.gd/eaVMbs
About Hallwood Group
Headquartered in Dallas, Texas, The Hallwood Group Incorporated
(Amex: HWG) -- http://www.hallwood.com/-- is a holding company
that operates in the textile products and energy business
segments. The company's former real estate and hotel business
segments are reported as discontinued operations.
The company's textile products subsidiary, Brookwood Companies
Incorporated, is an integrated textile company focused on woven
nylon products. Effective Dec. 31, 2005, the company's private
energy affiliates were consolidated into one entity, Hallwood
Energy L.P. The company disposed of its minority investment in
two energy affiliates, Hallwood Energy Corporation in December
2004 and Hallwood Energy III L.P. in July 2005.
HARDAGE HOTELS: Taps Cappello & Noel as Litigation Counsel
----------------------------------------------------------
Hardage Hotels I, LLC, asks for permission from the U.S.
Bankruptcy Court for the Western District of Texas to employ
Cappello & Noel as litigation counsel nunc pro tunc to the
Petition Date.
Cappello will represent the Debtor in its lawsuit against OneWest
Bank FSB, filed on March 5, 2012, and pending in the Superior
Court of the State of California for the County of Los Angeles,
Central District. Cappello will be compensated in these hourly
rates:
A. Barry Cappello Partner $950
Leila J. Noel Partner $725
Troy A. Thielemann Associate $550
Wendy W. Welkom $475
Matthew Da Vega $475
Lawrence J. Conlan $425
Matthew H. Fisher $425
Of Counsel (Contract) $300-$450
Paralegals $225
Document Control Clerks $150
To the best of the Debtor's knowledge, Cappello does not represent
or hold any interest adverse to Debtor, its estate, creditors,
equity security holders, or affiliates in the matters upon which
Cappello is to be engaged, and is a "disinterested person" within
the meaning of section 101(14) of the Bankruptcy Code, as modified
by Section 1107(b) of the Bankruptcy Code, and as required by
Section 327(a) of the Bankruptcy Code.
About Hardage Hotels
Hardage Hotels I, LLC, filed for Chapter 11 bankruptcy (Bankr.
W.D. Tex. Case No. 12-30443) on March 6, 2012. Hardage is a hotel
and real estate development company headquartered in San Diego,
California. Hardage operates seven hotels in seven states under
the brand of "Chase Suites". The hotels are located in El Paso,
Texas; Overland Park, Kansas; Newark, California; Kansas City,
Missouri; Des Moines, Iowa; Lincoln, Nebraska; and Dublin, Ohio.
Hardage operates the hotels under the "Chase Suites" name pursuant
to franchise agreements with Hardage Hospitality, LLC. The Debtor
has no employees -- all employees at the hotels are employed by
non-debtor Hardage Hospitality, which provides hotel management
services.
The Debtor has outstanding secured debt of $34.2 million plus
interest. The lenders are OneWest Bank, FSB; California First
National Bank, N.A., and Security Bank of Kansas City. OneWest
is the lender under a $5.74 million Dublin loan agreement, a
$5.3 million Lincoln loan agreement, and an $11.5 million El Paso
loan agreement.
Hardage was forced to file for bankruptcy when Hardage reached an
out-of-court restructuring of its debts with OneWest and then
OneWest reneged on its commitment. In September 2010, OneWest
filed a collection against Hardage and sought the appointment of a
receiver over the El Paso property. A receivership order was
entered but was vacated, although Hardage was ordered to make
payments to OneWest. The parties then entered into a series of
tolling agreements, under which Hardage paid OneWest $700,000 so
that OneWest would not pursue any further action. Following
negotiations, the parties signed a "final term sheet" on a
restructuring on Dec. 2, 2011.
But, according to the Debtor, OneWest reneged on the agreement.
In November, OneWest sought foreclosure of, and a receiver for,
the Dublin and El Paso properties.
The Debtor on March 5, 2012, initiated a lawsuit against OneWest
in the Superior Court of the State of California for the County of
Los Angeles, Central District. The suit alleges several causes of
action, including fraud and breach of contract.
Judge H. Christopher Mott presides over the Chapter 11 case. The
Debtor has tapped Haynes and Boone LLP as attorneys, and
Transitional Finance Partners LLC as financial advisor.
In its petition, the Debtor estimated $10 million to $50 million
in assets and $50 million to $100 million in debts. The petition
was signed by Samuel A. Hardage, president.
No trustee or examiner has been requested or appointed in this
Chapter 11 case.
HARDAGE HOTELS: Wants to Hire Kemp Smith as Special Counsel
-----------------------------------------------------------
Hardage Hotels I, LLC, seeks permission from the U.S. Bankruptcy
Court for the Western District of Texas to employ Kemp Smith LLP
as special counsel.
The Debtor seeks to retain Kemp Smith, a law firm based in Texas,
to represent it in litigation with OneWest Bank, FSB, in El Paso,
Texas. Kemp Smith will be compensated in these hourly rates:
Ken Slavin Partner $260
James W. Brewer Partner $260
Jason Hungerford Associate $180
To the best of the Debtor's knowledge, Kemp Smith does not
represent or hold any interest adverse to Debtor, its estate,
creditors, equity security holders, or affiliates in the matters
upon which Kemp Smith is to be engaged, and is a "disinterested
person" within the meaning of section 101(14) of the Bankruptcy
Code, as modified by section 1107(b) of the Bankruptcy Code, and
as required by section 327(a) of the Bankruptcy Code.
About Hardage Hotels
Hardage Hotels I, LLC, filed for Chapter 11 bankruptcy (Bankr.
W.D. Tex. Case No. 12-30443) on March 6, 2012. Hardage is a hotel
and real estate development company headquartered in San Diego,
California. Hardage operates seven hotels in seven states under
the brand of "Chase Suites". The hotels are located in El Paso,
Texas; Overland Park, Kansas; Newark, California; Kansas City,
Missouri; Des Moines, Iowa; Lincoln, Nebraska; and Dublin, Ohio.
Hardage operates the hotels under the "Chase Suites" name pursuant
to franchise agreements with Hardage Hospitality, LLC. The Debtor
has no employees -- all employees at the hotels are employed by
non-debtor Hardage Hospitality, which provides hotel management
services.
The Debtor has outstanding secured debt of $34.2 million plus
interest. The lenders are OneWest Bank, FSB; California First
National Bank, N.A., and Security Bank of Kansas City. OneWest
is the lender under a $5.74 million Dublin loan agreement, a
$5.3 million Lincoln loan agreement, and an $11.5 million El Paso
loan agreement.
Hardage was forced to file for bankruptcy when Hardage reached an
out-of-court restructuring of its debts with OneWest and then
OneWest reneged on its commitment. In September 2010, OneWest
filed a collection against Hardage and sought the appointment of a
receiver over the El Paso property. A receivership order was
entered but was vacated, although Hardage was ordered to make
payments to OneWest. The parties then entered into a series of
tolling agreements, under which Hardage paid OneWest $700,000 so
that OneWest would not pursue any further action. Following
negotiations, the parties signed a "final term sheet" on a
restructuring on Dec. 2, 2011.
But, according to the Debtor, OneWest reneged on the agreement.
In November, OneWest sought foreclosure of, and a receiver for,
the Dublin and El Paso properties.
The Debtor on March 5, 2012, initiated a lawsuit against OneWest
in the Superior Court of the State of California for the County of
Los Angeles, Central District. The suit alleges several causes of
action, including fraud and breach of contract.
Judge H. Christopher Mott presides over the Chapter 11 case. The
Debtor has tapped Haynes and Boone LLP as attorneys, and
Transitional Finance Partners LLC as financial advisor.
In its petition, the Debtor estimated $10 million to $50 million
in assets and $50 million to $100 million in debts. The petition
was signed by Samuel A. Hardage, president.
No trustee or examiner has been requested or appointed in this
Chapter 11 case.
HAWKER BEECHCRAFT: Has Forbearance Until June, Gets $120MM Loan
---------------------------------------------------------------
Hawker Beechcraft, Inc., on March 27, 2012, entered into a
forbearance agreement with Credit Suisse AG, Cayman Islands
Branch, as administrative agent and collateral agent, and certain
lenders. The agreement will provide the company with
approximately $120 million of additional liquidity through an
incremental term loan facility under its existing credit facility.
The company intends to use the proceeds of this loan to fund its
ongoing operations as Hawker Beechcraft continues working with its
lenders toward a comprehensive recapitalization. As part of the
agreement, lenders currently holding approximately 70 percent of
Hawker Beechcraft bank debt have agreed to defer the company's
obligation to make certain interest payments on the company's
senior secured revolving and term loans when due, and have granted
the company relief from certain existing loan covenants. This
forbearance agreement is scheduled to expire on June 29, 2012.
Robert S. (Steve) Miller, CEO of Hawker Beechcraft, Inc., said,
"Like others in the industry, Hawker Beechcraft has been impacted
by the prolonged weakness in our markets. In the last three years
the company has made aggressive transformational changes in all
operational functions. While these steps have been effective, the
company is operating with a debt load that is restricting its
ability to succeed and fully execute on its strategy. We believe
this agreement will stabilize the company's current financial
position and ensure Hawker Beechcraft continues manufacturing the
best airplanes for our customers and providing first-class service
and support. At the same time, the agreement provides Hawker
Beechcraft and its lenders with additional time and flexibility to
work together to recapitalize the company and better position
Hawker Beechcraft for the future. We believe this loan
demonstrates confidence in the long-term value of the company."
A copy of the Forbearance Agreement is available for free at:
http://is.gd/Vptn7T
About Hawker Beechcraft
Hawker Beechcraft Acquisition Company, LLC, headquartered in
Wichita, Kan., is a manufacturer of business jets, turboprops and
piston aircraft for corporations, governments and individuals
worldwide.
The Company's balance sheet at June 30, 2011, showed $3.01 billion
in total assets, $3.33 billion in total liabilities and a $317.30
million in total deficit.
Hawker Beechcraft reported a net loss of $304.3 million on $2.80
billion of total sales for 12 months ended Dec. 31, 2010. Net
loss in 2009 and 2008 was $451.3 million and $157.2 million,
respectively.
To reduce the cost of operations, in October 2010, the Company
announced it would implement a cost reduction and productivity
program. The first part of the program consisted of the immediate
termination of approximately 8% of salaried employees while the
second part involves reducing the Company's factory and shop work
forces by approximately 800 employees by end of August 2011.
* * *
Hawker Beechcraft carries 'Caa2' corporate family and probability
of default ratings from Moody's Investors Service.
HAWKER BEECHCRAFT: Worth Boisture to Serve as HBC Chairman
----------------------------------------------------------
Hawker Beechcraft Corporation, Hawker Beechcraft, Inc.'s operating
subsidiary, amended that certain Employment Agreement dated as of
March 23, 2009, with Worth W. Boisture. This amendment to the
Original Employment Agreement provides that Mr. Boisture will
serve as Chairman of HBC and President of Hawker Beechcraft
Defense Company, LLC. The Employment Agreement Amendment also
provides that any Severance Payment to Mr. Boisture will be paid
as a lump sum on the 60th day following the termination date,
rather than over a period of 12 months as had been provided for in
the Original Employment Agreement.
Pursuant to the Employment Agreement Amendment Mr. Boisture waives
any right to make any claim that he has any right to terminate his
employment for Good Reason and he waives any right to receive any
Severance Payments for any events, actions or circumstances that
have occurred at any time prior to March 28, 2012. In addition,
the definition of "Good Reason" and the extent of Mr. Boisture's
non-competition obligations were amended to reflect Mr. Boisture's
new titles and responsibilities.
About Hawker Beechcraft
Hawker Beechcraft Acquisition Company, LLC, headquartered in
Wichita, Kan., is a manufacturer of business jets, turboprops and
piston aircraft for corporations, governments and individuals
worldwide.
The Company's balance sheet at June 30, 2011, showed $3.01 billion
in total assets, $3.33 billion in total liabilities and a $317.30
million in total deficit.
Hawker Beechcraft reported a net loss of $304.3 million on $2.80
billion of total sales for 12 months ended Dec. 31, 2010. Net
loss in 2009 and 2008 was $451.3 million and $157.2 million,
respectively.
To reduce the cost of operations, in October 2010, the Company
announced it would implement a cost reduction and productivity
program. The first part of the program consisted of the immediate
termination of approximately 8% of salaried employees while the
second part involves reducing the Company's factory and shop work
forces by approximately 800 employees by end of August 2011.
* * *
Hawker Beechcraft carries 'Caa2' corporate family and probability
of default ratings from Moody's Investors Service.
HAWKER BEECHCRAFT: Delays Form 10-K for 2011 for Negotiations
-------------------------------------------------------------
Hawker Beechcraft Acquisition Company, LLC, and Hawker Beechcraft
Notes Company were unable to file the annual report on Form 10-K
for the year ended Dec. 31, 2011, by the prescribed filing
deadline (March 30, 2012) without unreasonable effort and expense
because they have devoted and continue to devote substantial
resources to negotiations with their senior lenders and other
creditors in light of ongoing adverse economic and industry
conditions and because of difficulties and delays in producing
financial information resulting from the Company's recent
implementation of an upgraded enterprise resource planning system.
The Company expects to complete and file the Form 10-K on or
before April 16, 2012.
The Company has entered into a forbearance agreement and third
amendment to its credit agreement with its secured lenders to,
among other things, provide for an incremental term loan facility
and an agreement by lenders holding approximately 70% of the
borrowings under the credit agreement to forbear from exercising
certain rights as a result of the Company's failure to meet
certain financial covenants and to defer certain interest payments
under the credit agreement until June 29, 2012.
The Company's senior management, finance, and legal teams have
spent and are continuing to spend a significant amount of time
negotiating with the Company's secured lenders and other key
constituents regarding a comprehensive recapitalization of the
Company. The Company can provide no assurances that it will be
able to reach agreement regarding any comprehensive
recapitalization or that the Company will be able to effect such a
recapitalization.
About Hawker Beechcraft
Hawker Beechcraft Acquisition Company, LLC, headquartered in
Wichita, Kan., is a manufacturer of business jets, turboprops and
piston aircraft for corporations, governments and individuals
worldwide.
The Company's balance sheet at June 30, 2011, showed $3.01 billion
in total assets, $3.33 billion in total liabilities and a $317.30
million in total deficit.
Hawker Beechcraft reported a net loss of $304.3 million on $2.80
billion of total sales for 12 months ended Dec. 31, 2010. Net
loss in 2009 and 2008 was $451.3 million and $157.2 million,
respectively.
To reduce the cost of operations, in October 2010, the Company
announced it would implement a cost reduction and productivity
program. The first part of the program consisted of the immediate
termination of approximately 8% of salaried employees while the
second part involves reducing the Company's factory and shop work
forces by approximately 800 employees by end of August 2011.
* * *
Hawker Beechcraft carries 'Caa2' corporate family and probability
of default ratings from Moody's Investors Service.
HCSB FINANCIAL: Incurs $256,000 Net Loss in First Quarter
---------------------------------------------------------
HCSB Financial Corporation posted a net loss of $256,000 for the
quarter ended March 31, 2012, compared to losses of $4.10 million
in the fourth quarter of 2011 and $7.68 million in the first
quarter of 2011.
Excluding expenses related to outstanding debt held by the holding
company, Horry County State Bank reported operating income of
$63,000 in the first quarter of 2012, reflecting its first
quarterly profit since early 2010 as core fundamentals drove gains
in net interest margin and a reduction in interest expense.
Credit trends in net charge-offs and loans 30-to-89 days past due
also showed improvement. Provisions for loan losses were $1.31
million for the quarter ended March 31, 2012, significantly less
than past quarters.
"We still have a ways to go, but it's gratifying to know that we
are beginning to see positive trends in core performance and
credit quality, particularly at the bank level," said President
and CEO Jimmy Clarkson. "Our bank has worked extremely hard the
past several quarters at improving our balance sheet and dealing
with problem loans."
"A bank must show core earnings if it is going to thrive,"
Clarkson said. "We still have our challenges, but as long as our
fundamentals continue to drive solid operating results, we'll
continue to improve our overall balance sheet. We believe that we
acknowledged our problems early, took prompt, aggressive action to
address them, and have maintained regular communications with our
regulators which has allowed us to develop a good relationship
with our regulators."
Horry County State Bank, currently under a written agreement with
federal and state regulators to improve its capital strength and
credit quality, reported Tier 1 capital of 2.92% of total risk-
based assets at March 31, 2012, fractionally better than the
previous quarter's Tier 1 ratio of 2.90% in the fourth quarter of
2011. HCSB's capital ratio is currently classified as
"significantly undercapitalized," the third of four categories in
which capital levels are rated by regulators. Below 2% is
"critically undercapitalized." A capital ratio of 4% or better is
"adequately capitalized," 5% or better "well-capitalized."
Over the next several months, HCSB will seek to raise additional
capital. In a recent Form 10-K filing with the SEC, management
noted the challenges it faces in raising additional capital in the
current economic environment. Even if the bank struggles to find
capital, Clarkson believes the bank has gained enough traction to
work through its problems.
"I honestly believe, based on our current trends, that if we do
not raise any capital at all, the bank will survive and will not
fall below the critical 2% level," Clarkson said. "We believe
that we are past the vast majority of our problems and that the
substantial reduction in our 30-to-89 day past due loans to more
normal levels during the past four months indicates that loan
defaults have begun to decline considerably."
In 2011, HCSB set aside $25.27 million in loan loss provisions
after adding $23.08 million the previous year for a combined
$48.35 million in provisions for loan losses over the past two
years. The bank, which budgeted only $5.2 million in loan loss
provisions for 2012, is ahead of budget for the year. One of the
key factors that the bank uses to determine its loan loss
provision is its 30-to-89 day past due numbers, generally the
first sign of problem loans on the horizon. HCSB's 30-to-89
delinquency ratio to total loans averaged 1.73% in the first
quarter of 2012 compared to an average 3.60% in the fourth quarter
of 2011. Net loan charge-offs decreased to $1.8 million for the
quarter ended March 31, 2012, compared to $3.60 million for the
fourth quarter of 2011 and $6.97 million for the first quarter of
March 31, 2011.
A copy of the press release is available for free at:
http://is.gd/ZAkI4j
About HCSB Financial
Loris, South Carolina-based HCSB Financial Corporation was
incorporated on June 10, 1999, to become a holding company for
Horry County State Bank. The Bank is a state chartered bank which
commenced operations on Jan. 4, 1988. From its 13 branch
locations, the Bank offers a full range of deposit services,
including checking accounts, savings accounts, certificates of
deposit, money market accounts, and IRAs, as well as a broad range
of non-deposit investment services. During the third quarter of
2011, the Bank closed its Covenant Towers branch located at Myrtle
Beach. All deposits were transferred to the Bank's Myrtle Beach
branch and the Bank does not expect any disruption of service in
that market for its customers.
HCSB reported a net loss of $29.01 million in 2011, compared with
a net loss of $17.27 million in 2010.
The Company's balance sheet at Dec. 31, 2011, showed
$535.69 million in total assets, $540.91 million in total
liabilities and a $5.21 million total shareholders' deficit.
For 2011, Elliott Davis, LLC, in Columbia, South Carolina,
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 that have eroded
regulatory capital ratios and the Company's wholly owned
subsidiary, Horry County State Bank, is under a regulatory Consent
Order with the Federal Deposit Insurance Corporation (FDIC) that
requires, among other provisions, capital ratios to be maintained
at certain levels. As of Dec. 31, 2011, the Company is considered
significantly undercapitalized based on their regulatory capital
levels.
Consent Order
On Feb. 10, 2011, the Bank entered into the Consent Order with the
FDIC and the State Board. The Consent Order conveys specific
actions needed to address the Bank's current financial condition,
primarily related to capital planning, liquidity/funds management,
policy and planning issues, management oversight, loan
concentrations and classifications, and non-performing loans.
The Company believes it is currently in substantial compliance
with the Consent Order except for the requirement to achieve and
maintain, within 150 days from the effective date of the Consent
Order, Total Risk Based capital at least equal to 10% of risk-
weighted assets and Tier 1 capital at least equal to 8% of total
assets.
At Sept. 30, 2011, the Bank was categorized as "significantly
undercapitalized."
Pursuant to the requirements under the Consent Order, the Company
submitted its capital plan to the FDIC for review. The FDIC has
directed the Company to revise the capital plan and, in addition,
to develop a capital restoration plan, which the Company has
resubmitted.
HOSTESS BRANDS: Wins Extension of Exclusivity Periods
-----------------------------------------------------
Jamie Mason, writing for The Deal Pipeline, reports that
a Hostess Brands spokesman said Judge Robert D. Drain of the U.S.
Bankruptcy Court for the Southern District of New York in White
Plains approved a 90-day extension of Hostess Brands' exclusive
right to file a plan and solicit acceptances to it, to Aug. 8 and
Oct. 7, respectively.
According to the Deal Pipeline, the company spokesman also said a
trial began Tuesday on the Company's union issues and extended
into Thursday, with the unions calling witnesses to testify
Thursday. Before the exclusivity extension was granted, Hostess
had until May 10 to file a plan and until July 9 to solicit votes.
Hostess doesn't expect a decision on its request to terminate the
current collective bargaining agreement before its exclusivity was
set to run out.
As reported by the Troubled Company Reporter on April 9, Hostess
Brands seek an order (a) extending the period during which the
Debtors have the exclusive right to file a chapter 11 plan or
plans by 90 days, through and including Aug. 8, 2012; and (b)
extending the period during which the Debtors have the exclusive
right to solicit acceptances of the Plan through and including
Oct. 7, 2012, or approximately 60 days after the expiration of the
Exclusive Filing Period, as extended.
The Debtors said they are focused on implementing a restructuring
that maximizes value for stakeholders and ensures a viable company
post-emergence. Since the Petition Date, the Debtors have taken a
number of critical steps to promote their reorganization.
The Debtors said they have developed a comprehensive turnaround
plan, which requires the Debtors, among other things, to modify
certain aspects of their collective bargaining agreements,
including the Debtors' obligations with respect to health and
welfare plans, work rules and multi-employer pension plans. Other
features of the Turnaround Plan are not labor related, such as
modernizing the Debtors' vehicle fleet, restructuring the Debtors'
retail outlet stores, reducing selling, general and administrative
costs and increasing the efficiency of various operational
activities.
The official committee of unsecured creditors has objected to the
extension request, saying Hostess is facing a nationwide strike
because there isn't agreement with the Teamsters union on a
concessionary contract. The Teamsters vowed to strike if an
agreement isn't consensual.
The Committee also wants the bankruptcy judge to bar Hostess from
enforcing a lockup agreement where potential investors received
confidential information in return for pledging not to
negotiate with anyone else. The committee contends that Hostess
agreed to have no lockup agreement in return for the unions'
agreement not to support only one prospective investor. The
committee contends that a lockup agreement is not in the ordinary
course of business and isn't enforceable without court approval.
Hostess previously said that 14 potential investors signed
confidentiality agreements prior to the Feb. 27 deadline for
submitting initial offers. The second round of bids is due by
May 7.
The Committee also objects to so-called "babysitting" provision in
the confidentiality agreements that the Debtor required potential
investors to sign to gain access to company information to
formulate expressions of interest. That provision bars potential
investors from discussing their bids directly with the Debtors'
unions without the involvement of the Debtors. The
Committee and its advisors believed that this would limit the
ability of potential investors to properly formulate expressions
of interest.
Christopher J. Brown -- browne@blackstone.com -- Managing Director
in Blackstone's Restructuring and Reorganization Advisory Group,
the Committee's advisor, disclosed in court papers that early
February 2012, the Debtors agreed that, after first round bids had
been received, the unions could have meetings with potential
investors without Perella Weinberg, the Debtors' advisors, being
present. The precise timing of the elimination of the
"babysitting" restriction was left to be negotiated.
After the first round bids had been submitted, negotiations began
again. These negotiations took place over several weeks. During
this time, Mr. Brown said he spoke and e-mailed numerous times
with Joshua Scherer at Perella -- jscherer@pwpartners.com --
concerning the confidentiality agreement. In early March, the
Debtors proposed to release potential investors that had already
signed confidentiality agreements from the "babysitting"
provision, provided that both the investors and the unions commit
in writing not to "lock up" with any bidder.
The Committee subsequently agreed to these terms. After the
panel's counsel had reviewed the revised confidentiality
agreement, Mr. Brown said he thought the form of the agreement
was settled. He added that at no time did Mr. Scherer or any
other representative of the Debtors inform him that the Debtors
intended to or had in fact further modified the form of
confidentiality agreement to provide that in addition to agreeing
not to lock up with any union, the potential investor would also
be bound not to "propose a potential investment or other
transaction, including a chapter 11 plan, that is not fully
supported by the Company."
"I would have thought it inappropriate to include such a provision
because it limits the ability of parties in interest other than
the Debtor to negotiate with potential financing sources in
connection with the formulation of a chapter 11 plan(s) including
after exclusivity has terminated," Mr. Brown said. "I was
surprised to learn that the Debtors had a potential investor sign
a confidentiality agreement containing such a provision."
Mr. Brown also added that although the case Milestones contained
in the Final DIP Order require the Debtors to file a proposed plan
by June 1, 2012 and despite requesting them from the Debtors, he
has not received a draft plan, a term sheet for such a plan, or
even a proposed post-reorganization capital structure from the
Debtors.
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.
The IBT and BCT collectively employ roughly 92% of the Debtors'
union workforce. The remaining 8% of the Debtors' union workforce
is represented by 10 other unions.
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: Pushes Back Deadline for Deal With Other Unions
---------------------------------------------------------------
Judge Robert Drain signed off on an agreed pre-trial scheduling
order in connection with Hostess Brands' motions to reject its
collective bargaining agreements and modify retiree benefits
relating to other unions.
The Prior Scheduling Orders governed the Section 1113/1114 Process
with regard to (i) the International Brotherhood of Teamsters and
the Bakery, Confectionery, Tobacco Workers and Grain Millers
International Union as well as (ii) the International Association
of Machinists and Aerospace Workers; Retail, Wholesale and
Department Store Union; United Food and Commercial Workers Union;
International Union of Operating Engineers & Service Employees;
Glass, Molders, Pottery, Plastics & Allied Workers International
Union; Office & Professional Employees International Union; United
Automobile, Aerospace and Agricultural Implement Workers of
America; United Brotherhood of Carpenters and Joiners of America;
United Steelworkers; and the International Brotherhood of Firemen
& Oilers.
The Prior Order provides that the other unions will have through
late March to strike a deal with the Debtors. Otherwise, the
Debtors will commence the 1113/1114 Process for the other unions
on March 28 with the filing of Motions to Reject the other unions'
CBAs.
On March 28, 2012, representatives of certain of the Other Unions
requested a meet and confer with the Debtors to discuss, among
other things, the scheduling of any section 1113 or 1114 motion
filed by the Debtors with respect to their CBAs with the Other
Unions.
On April 10, 2012, representatives of the Debtors and the GMP,
USW, IOUE, UAW, RWDSU, UFCW and IAM participated in a meet and
confer. The parties in attendance agreed to modify the Prior
Scheduling Orders with respect to the 1113/1114 Process Relating
to the Other Unions.
The Debtors now have until April 23 to file and serve their
motions under sections 1113 and 1114 with respect to the Other
Unions. Responses or objections to the Other Unions 1113/1114
Motions are due May 11.
The parties will confer at mutually convenient times to consider
the issues raised by the 1113/1114 Process, and the basis of their
proposed positions regarding the Other Unions 1113/1114 Proposals,
and the possibilities for a prompt settlement or resolution of
these issues.
The last day for the Debtors to submit a proposal is May 18. The
Other Unions may submit a proposal no later than May 20. Those
deadlines may be extended upon the parties' agreement.
Otherwise, trial will take place on May 21.
Depositions of fact witnesses will take place from May 7 to 10.
Depositions of all expert witnesses take place May 11, 14 and 15.
The Court will hold a telephonic or in-Court hearing to resolve
any discovery disputes between any of the parties.
Written discovery requests must be served by the Debtors upon any
other party on or before April 23. Written discovery requests
must be served by all other parties upon any other party on or
before April 30. Responses to written discovery requests must be
made by May 4.
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.
The IBT and BCT collectively employ roughly 92% of the Debtors'
union workforce. The remaining 8% of the Debtors' union workforce
is represented by 10 other unions.
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.
HOTI ENTERPRISES: Taps Carl Person as Litigation Counsel
--------------------------------------------------------
Hoti Enterprises, L.P., and Hoti Realty seek permission from the
U.S. Bankruptcy Court for the Southern District of New York to
employ Carl Person, Esq., as special state court litigation
counsel, nunc pro tunc to June 2, 2011, in concerning a pending
foreclosure proceeding.
GECMC 2007-C1 Burnett Street, LLC, has asserted a first mortgage
interest against the Debtors' two-story residential building, and
the land upon which the building is situated in New York, securing
an indebtedness purportedly owed to it by the Debtors totaling
$40,733,874.79 plus accruing fees, expenses and interest. In
February 2009, GECMC commenced a foreclosure proceeding concerning
its alleged interest in the property in the Supreme Court of the
State of New York, County of Kings. In March 2009 Barbara Odwak,
Esq., was appointed as receiver of the property. In June 2011,
Mr. Person was retained by Hoti Enterprises to represent it in the
foreclosure proceeding and had received $5,000 retainer from
Dedvukaj Construction, Inc. Since then Mr. Person has been paid
$6,500 from Dedvukaj. In January 2011, the automatic stay was
modified to permit the foreclosure proceeding to proceed to a
determination.
The Debtors' general bankruptcy counsel, Pick & Zabicki LLP,
doesn't regularly handle real property foreclosure proceedings
and, thus, doesn't believe that it can adequately represent the
Debtors' interests with regard to specialized legal and procedural
issues presented in the foreclosure proceeding. Thus, the
Debtors' require the assistance of special litigation counsel.
Mr. Person will be compensated $275 per hour for his services. He
has an associate lawyer on staff who currently bills at $175 per
hour.
To the best of the Debtors' knowledge, Mr. Person does not
represent or hold any interest adverse to Debtor, its estate,
creditors, equity security holders, or affiliates in the matters
upon which Mr. Person is to be engaged, and is a "disinterested
person" within the meaning of section 101(14) of the Bankruptcy
Code, as modified by section 1107(b) of the Bankruptcy Code, and
as required by section 327(a) of the Bankruptcy Code.
About Hoti Enterprises
Harrison, New York-based Hoti Enterprises, LP, is a single asset
real estate holding company that owns an apartment complex located
at 2801 Fillmore Avenue, 3001 Avenue R and 2719 Fillmore Avenue --
collectively, known as 1865 Burnett Street -- in Brooklyn, New
York. Hoti Realty Management Co., Inc., was in the business of
owning and operating a management company that managed the
apartment complex.
Hoti filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y.
Case No. 10-24129) on Oct. 12, 2010. Hoti Enterprises estimated
its assets and debts at $10 million to $50 million. Pick &
Zabicki LLP serves as the Debtor's bankruptcy counsel.
A receiver of rents was appointed against Hoti Enterprises pre-
bankruptcy pursuant to a foreclosure proceeding commenced by GECMC
2007-C-1 Burnett Street, Hoti's mortgagee and largest secured
creditor.
No Official Committee of Unsecured Creditors has been appointed in
the case.
HOTI ENTERPRISES: Can Hire Pic & Zabicki as Bankruptcy Counsel
--------------------------------------------------------------
Hoti Enterprises, L.P., and Hoti Realty sought and obtained
permission from the U.S. Bankruptcy Court for the Southern
District of New York to employ Pick & Zabicki LLP as their counsel
in substitution for Dwyer & Associates, LLC, nunc pro tunc to
Jan. 26, 2012.
In December 2010, the Debtors were authorized to retain Rattet,
Pasternak & Gordon-Oliver as general bankruptcy counsel in
connection with their Chapter 11 case. On April 14, 2011, the
Court granted RP&G-O's motion to withdraw as counsel. On Feb. 12,
2011, D&A filed an application to be employed as substitute
counsel to the Debtors. No order was signed by the Court
authorizing their retention.
The Debtors contacted P&Z and had requested P&Z's assistance with
regard to the case and requested that P&Z agree to serve as
substitute general bankruptcy counsel for D&A.
P&Z received an initial retainer in the sum of $12,500 in
connection with P&Z's fees and expenses associated with P&Z's
representation of the Debtors in their Chapter 11 proceeding. The
retainer amount was paid by Dedvukaj Construction, an entity owned
and controlled by Mr. Dedvukaj, the operating member of Hoti
Enterprises and President of Management. Dedvukaj Construction
will pay an additional $7,500 by Feb. 15, 2012, for a total
retainer of $20,000.
P&Z will be retained by the Debtors as their counsel and will be
paid these hourly rates:
Partners $425
Associates $250
Paraprofessionals $125
Douglas J. Pick, a member at P&Z, assured the Court that the firm
does not represent or hold any interest adverse to Debtor, its
estate, creditors, equity security holders, or affiliates in the
matters upon which the firm is to be engaged, and is a
"disinterested person" within the meaning of section 101(14) of
the Bankruptcy Code, as modified by Section 1107(b) of the
Bankruptcy Code, and as required by Section 327(a) of the
Bankruptcy Code.
About Hoti Enterprises
Harrison, New York-based Hoti Enterprises, LP, is a single asset
real estate holding company that owns an apartment complex located
at 2801 Fillmore Avenue, 3001 Avenue R and 2719 Fillmore Avenue --
collectively, known as 1865 Burnett Street -- in Brooklyn, New
York. Hoti Realty Management Co., Inc., was in the business of
owning and operating a management company that managed the
apartment complex.
Hoti filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y.
Case No. 10-24129) on Oct. 12, 2010. Hoti Enterprises estimated
its assets and debts at $10 million to $50 million.
A receiver of rents was appointed against Hoti Enterprises pre-
bankruptcy pursuant to a foreclosure proceeding commenced by GECMC
2007-C-1 Burnett Street, Hoti's mortgagee and largest secured
creditor.
No Official Committee of Unsecured Creditors has been appointed in
the case.
HOVNANIAN ENTERPRISES: Seven Directors Elected at Annual Meeting
----------------------------------------------------------------
Hovnanian Enterprises held its 2012 annual meeting on March 27,
2012. Stockholders elected seven directors, namely:
(1) Ara Hovnanian;
(2) Robert Coutts;
(3) Edward Kangas;
(4) Joseph Marengi;
(5) John Robbins;
(6) Larry Sorsby; and
(7) Stephen Weinroth.
Stockholders ratified the selection of Deloitte & Touche LLP as
the Company's independent registered public accountants for the
fiscal year ending Oct. 31, 2012, and approved the 2012 Hovnanian
Enterprises, Inc. Stock Incentive Plan. The 2012 Stock Incentive
Plan, which is similar to the Company's existing Amended and
Restated 2008 Stock Incentive Plan, provides for the granting of
stock options, stock appreciation rights and other stock-based
awards to employees, directors and consultants as may determined
by the Compensation Committee, as administrator of the 2012 Stock
Incentive Plan. As previously determined by the Company's Board
of Directors, no new awards will be granted under the 2008 Plan
after the date on which the 2012 Stock Incentive Plan was approved
by stockholders; however, awards previously granted under the 2008
Plan will remain outstanding in accordance with their existing
terms.
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.
HOVNANIAN ENTERPRISES: To Offer 25 Million Class A Common Shares
----------------------------------------------------------------
Hovnanian Enterprises, Inc., has commenced a registered
underwritten public offering of Class A Common Stock. The
offering is anticipated to consist of the issuance of 25,000,000
shares of the Company's Class A Common Stock. In addition, the
Company intends to grant the underwriters a 30-day option to
purchase up to an additional 15% of the shares of Class A Common
Stock sold to cover over-allotments.
Citigroup, Credit Suisse and J.P. Morgan are serving as the joint
book-running managers for the Class A Common Stock offering.
The Company intends to use the net proceeds of the offering to
purchase certain of the Company's senior unsecured notes in a
private transaction and for general corporate purposes, including
the refinancing, repurchase or repayment of indebtedness, working
capital needs, capital expenditures and expansion of the business.
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.
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.
HUB INTERNATIONAL: S&P Affirms 'B' Counterparty Credit Ratings
--------------------------------------------------------------
Standard & Poor's Ratings Services has affirmed its 'B'
counterparty credit rating on HUB International Ltd. (HUB). The
outlook is stable.
"At the same time, we assigned our 'B+' issue-level rating (one
notch higher than our 'B' counterparty credit rating on HUB) to
the company's planned senior secured term loans, consisting of a
$731 million term loan B at LIBOR plus 450 basis points (bps) due
June 2017, a $196 million incremental term loan B at LIBOR plus
475 bps due December 2017, and $100 million U.S. revolver at LIBOR
plus 450 bps due June 2016 (the company is also amending its
unrated Canadian revolver to be due in 2016 at the same pricing).
We have assigned the debt a recovery rating of '2', indicating our
expectation for a substantial (70%-90%) recovery for lenders in
the event of a payment default," S&P said.
"We also revised our recovery rating on HUB's existing senior
secured credit facilities to '2', indicating our expectation for a
substantial (70%-90%) recovery for lenders in the event of a
payment default, from '3' and raised our issue ratings on this
debt to 'B+' from 'B' in accordance with our notching criteria for
recovery ratings. HUB's existing senior secured facilities consist
of a $731 million term loan B at LIBOR plus 250 basis points (bps)
due June 2014, a $196 million incremental term loan B at LIBOR
plus 475 bps due June 2014, and $100 million U.S. revolver at
LIBOR plus 250 bps due June 2013 (the company also has an unrated
senior secured Canadian revolver at LIBOR plus 475 due June
2014)," S&P said.
"Lastly, we affirmed our 'CCC+' senior unsecured debt rating to
the company's unsecured facilities. The unsecured recovery rating
is '6', indicating our expectation for a negligible (0%-10%)
recovery for lenders in the event of a payment default," S&P said.
"The counterparty credit rating affirmation on HUB reflects the
fact that the company's total debt levels will remain unchanged
following the proposed debt offerings, because the planned senior
secured term loan and revolving credit facilities are extensions
and repricings of HUB's existing senior secured facilities of the
same dollar amount," said Standard & Poor's credit analyst Julie
Herman. "Of note, the company is proposing to amend the entire
amounts of its senior secured facilities -- however, the amounts
that are unextended by lenders under the proposed transaction will
remain outstanding under the existing respective facilities -- the
extended term loans will rank pari passu with the existing senior
secured credit facilities and be subject to the same financial
covenant maintenance performance tests."
"While total debt levels will remain unchanged, the proposed
transaction does qualitatively improve HUB's financial leverage by
extending part of its 2013 and 2014 maturities by another two to
three years. Offsetting this benefit, the company's debt servicing
costs will increase moderately as a result of the transaction (by
about 12% annually if the entire proposed loan amounts are
extended, and excluding the effect of the company's interest rate
swaps)," S&P said.
"The affirmation also reflects our view that HUB has continued to
meet our performance expectations over this past year. Standard &
Poor's adjusted EBITDA grew considerably to $254 million in 2011
from $226 million in 2010, stemming from positive commission and
fee organic revenue growth of 2.1%, profitable acquisition-related
earnings, and sustained margins. Accordingly, despite slightly
higher debt levels in 2011 (the company tapped into about $97
million of its U.S. and Canadian revolvers in 2011), the company
was able to demonstrate slight improvement in its credit
fundamentals in 2011 with financial leverage and EBITDA fixed-
charge coverage of 6.9x and 1.8x compared with 7.4x and 1.5x in
2010. Moreover, we expect HUB's credit metrics to continue to
improve modestly in 2012, since we believe the company will be
able to offset its moderately higher debt servicing costs by
maintaining favorable organic and inorganic growth trends during
the year," S&P said.
"Our revised senior secured recovery rating of '2' and resultant
rating upgrade on HUB's senior secured credit facilities to 'B+'
reflects our reevaluation of the company's enterprise value in our
simulated default scenario. We have increased our EBITDA multiple
to value the company due to our belief that improving insurance
pricing and economic fundamentals will benefit HUB's market
valuation if the company were to reorganize," S&P said.
"The counterparty credit rating on HUB reflects the company's weak
credit protection measures, low-quality balance sheet, and the
execution risk related to its debt-funded acquisition strategy.
Somewhat offsetting these weaknesses are HUB's success in
enhancing its competitive position through its acquisition
strategy, its good earnings diversification within the brokerage
arena, and a consistent history of favorable operating results and
margins relative to its peers," S&P said.
"We expect that HUB's organic revenue growth trend will continue
to improve modestly in 2012--in the positive low-single-digit
area--stemming from continued stabilizing pricing and exposure
trends in the company's markets and its implementation of
successful sales strategies. We believe EBITDA margins will likely
remain favorable relative to rated peers, at near 30%, as it
continues to pursue strategic initiatives to enhance operational
efficiencies. Further, we expect HUB to make acquisitions that
will add at least $80 million in revenue in 2012 (on an annualized
revenue basis), targeting U.S., Canadian, and possibly other
international opportunities," S&P said.
"We also expect credit metrics to continue to improve modestly in
2012, because we believe HUB will be able to offset moderately
higher debt servicing costs (arising from the proposed
transaction) through earnings growth (both organic and inorganic).
Specifically, we expect debt to last-12-month EBITDA of less than
7x and EBITDA fixed-charge coverage of 1.8x-2.2x for full-year
2012. We believe HUB should also generate healthy positive cash
flows from operations, maintain a cushion of unrestricted cash of
at least $50 million, and remain comfortably in compliance with
its restrictive covenants," S&P said.
"We could lower the ratings over the next 12 months if HUB doesn't
meet our performance expectations, is not disciplined or
successful in its acquisition strategy, or displays more-
aggressive financial management," Ms. Herman continued. "On the
other hand, if the company's performance significantly exceeds our
expectations, we would consider raising the rating. The company
could demonstrate this if it exhibits leverage of 5x or below and
EBITDA interest coverage of 3x or above."
INFOR ENTERPRISE: S&P Rates Corporate Credit 'B'; Outlook Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Infor Enterprise Applications Ltd. (Infor)
following the merger of GGC Software Holdings LLC (a/k/a Lawson
Software Inc.) and Infor Global Holdings Solutions Ltd. The rating
outlook is stable.
"We are also assigning our 'B+' issue-level rating and '2'
recovery rating to Lawson's (a subsidiary of Infor Enterprise
Applications) $3.5 billion senior secured term loans, consisting
of a $3.1 billion six-year term loan and a $400 million four-and-
a-half-year term loan," S&P said.
"In addition, we assigned our 'B-' rating and '5' recovery rating
to Lawson's $1.15 billion seven-year senior unsecured notes.
Lawson's existing $560 million senior unsecured notes (currently
rated 'B-' with a '5' recovery rating) will remain outstanding,"
S&P said.
"The new entity used the newly issued debt, along with
approximately $550 million of new sponsor equity, $213 million
cash on hand, $375 million of amended & extended Infor HoldCo
payment-in-kind (PIK) notes, and rolled equity from Infor and
Lawson shareholders, to merge the two companies and to refinance
existing debt," S&P said.
"Our corporate credit rating on Infor reflects the company's
highly leveraged capital structure, with pro forma debt to EBITDA
in the high-6x area," said Standard & Poor's credit analyst Philip
Schrank. "We view the combination of enterprise software and
services providers Infor and Lawson as possessing a 'fair'
business risk profile, characterized by a significant recurring
revenue base, stable margins, and recognized product strength, but
also a second-tier position in the overall enterprise resource
planning (ERP) market."
"The outlook is stable, reflecting the company's recurring revenue
base and expectation of modest revenue growth with stable margins.
Given Infor's highly leveraged financial profile and our
expectations for modest de-leveraging over the next 12 months, we
are unlikely to raise the rating over this timeframe," S&P said.
"If EBITDA margins compress due to competitive pressures or if
operational integration missteps cause its financial covenant
cushion to drop below the 15% area, we could lower the rating,"
S&P said.
INTELLICELL BIOSCIENCES: To Address FDA Warning Letter
------------------------------------------------------
IntelliCell BioSciences, Inc., had received a warning letter,
dated March 13, 2012, from the Food and Drug Administration
related to an inspection of the Company conducted between November
8 and Dec. 12, 2011. The letter outlines observations of those
visits.
Dr. Steven Victor, Chairman of IntelliCell Biosciences stated,
"The FDA Warning Letter is an opportunity for the Company to
discuss the observations of the Company's facilities relating to
current good manufacturing practices (cGMP's) with the FDA. The
FDA also raised questions regarding the regulatory category that
the cells produced by the Company's technology fall into, which
the Company also intends to discuss with the FDA. The Company is
moving to a new, commercial facility in late April 2012, and
believes that the new facility will address the cGMP issues. The
Company has also hired consultants and counsel who have extensive
experience with applicable FDA regulations, as well as with the
requirements of bringing the new facilities on line and in
compliance with the FDA's requirements. The Company will be
providing comprehensive response to FDA on April 3 that will
thoroughly address all of the FDA's observations."
About Intellicell Biosciences
Intellicell BioSciences, Inc., headquartered in New York, N.Y.,
was formed on Aug. 13, 2010, under the name "Regen Biosciences,
Inc." as a pioneering regenerative medicine company to develop and
commercialize regenerative medical technologies in large markets
with unmet clinical needs. On Feb. 17, 2011, the company changed
its name from "Regen Biosciences, Inc." to "IntelliCell
BioSciences Inc". To date, IntelliCell has developed proprietary
technologies that allow for the efficient and reproducible
separation of stromal vascular fraction (branded
"IntelliCell(TM)") containing adipose stem cells that can be
performed in tissue processing centers and in doctors' offices.
The Company's balance sheet at Sept. 30, 2011, showed $1.0 million
in total assets, $21.2 million in total current liabilities, and a
stockholders' deficit of $20.2 million.
"The Company has incurred losses since inception resulting in an
accumulated deficit of $20.1 million and a working capital deficit
of $21.0 million as of Sept. 30, 2011, respectively, however, if
the non-cash expense related to the Company's derivative liability
is excluded the accumulated deficit amounted to $3.1 million and
working capital deficit amounted to $3.7 million, respectively,?
the Company said in the filing.
"Further losses are anticipated in the continued development of
its business, raising substantial doubt about the Company's
ability to continue as a going concern."
INTERNAL FIXATION: Incurs $3.4 Million Net Loss in 2011
-------------------------------------------------------
Internal Fixation Systems, Inc., filed with the U.S. Securities
and Exchange Commission its annual report on Form 10-K disclosing
a net loss of $3.45 million on $310,614 of net sales in 2011,
compared with a net loss of $781,440 on $148,122 of net sales in
2010.
The Company's balance sheet at Dec. 31, 2011, showed $1.78 million
in total assets, $1.66 million in total liabilities and $117,298
in total stockholders' equity.
For 2011, Goldstein Schechter Koch P.A., in Hollywood, Florida,
expressed substantial doubt about the Company's ability to
continue as a going concern. The independent auditors noted that
the Company had a net loss in 2011 and 2010. Additionally, the
Company has an accumulated deficit of approximately $4,208,000 and
a working capital deficit of approximately $683,500 at Dec. 31,
2011, and is unable to generate sufficient cash flow to fund
current operations.
A copy of the Form 10-K is available for free at:
http://is.gd/m873JY
About Internal Fixation
South Miami, Fla.-based Internal Fixation Systems, Inc., is a
manufacturer and marketer of generically priced orthopedic and
podiatric implants. Customers include ambulatory surgery centers,
hospitals and orthopedic surgeons. IFS's strategy is to focus on
commonly used implants that no longer have patent protection. The
Company enhances the implants and sells them at prices below the
market leaders.
IOWORLDMEDIA INC: Patrick Rodgers Raises Going Concern Doubt
------------------------------------------------------------
ioWorldMedia, Incorporated, filed on April 16, 2012, its annual
report on Form 10-K for the fiscal year ended Dec. 31, 2011.
Patrick Rodgers, CPA, PA, in Altamonte Springs, Fla., expressed
substantial doubt about ioWorldMedia's ability to continue as a
going concern. The independent auditor noted that the Company has
suffered recurring losses from operations and negative cash flows
from operations the past two years.
The Company reported a net loss of $954,652 on sales of
$1.6 million for 2011, compared with a net loss of $920,831 on
sales of $841,120 for 2010.
The Company's balance sheet at Dec. 31, 2011, showed $1.67 million
in total assets, $1.69 million in total liabilities, total
preferred stock of $5.77 million, and a stockholders' deficit of
$5.79 million.
A copy of the Form 10-K is available for free at:
http://is.gd/5mY6Fv
Tampa, Fla.-based ipWorldMedia, Incorporated, operates three
primary internet media subsidiaries: Radioio, ioBusinessMusic, and
RadioioLive.
IRVINE SENSORS: Issues 3.5 Million Common Shares to Investors
-------------------------------------------------------------
ISC8, Inc., formerly known as Irvine Sensors Corporation, on
March 23, 2012, issued an aggregate of 357,140 shares of the
Company's common stock to five accredited investors upon those
investors' conversion of an aggregate of $178,571 of the stated
value of the Company's Series B Convertible Preferred Stock.
On April 13, 2012, the Company issued an aggregate of 3,198,400
shares of common stock to 26 accredited investors pursuant to the
Company's election, according to the terms and conditions of those
certain 12% Subordinated Secured Convertible Notes issued by the
Company to those investors on various dates between Dec. 23, 2010,
and July 19, 2011. These shares were issued in lieu of cash in
order to pay the interest accrued on the Notes for the fiscal
quarter ended April 1, 2012.
About Irvine Sensors
Headquartered in Costa Mesa, Calif., Irvine Sensors Corporation
(OTC BB: IRSN) -- http://www.irvine-sensors.com/-- is a vision
systems company engaged in the development and sale of
miniaturized infrared and electro-optical cameras, image
processors and stacked chip assemblies and sale of higher level
systems incorporating said products. Irvine Sensors also conducts
research and development related to high density electronics,
miniaturized sensors, optical interconnection technology, high
speed network security, image processing and low-power analog and
mixed-signal integrated circuits for diverse systems applications.
The Company reported a net loss of $15.76 million on $14.09
million of total revenues for the fiscal year ended Oct. 2, 2011,
compared with a net loss of $11.15 million on $11.71 million of
total revenues for the fiscal year ended Oct. 3, 2010.
The Company's balance sheet at Oct. 2, 2011, showed $10.58 million
in total assets, $29.29 million in total liabilities, and
a $18.71 million total stockholders' deficit.
JEFFERSON COUNTY: Bond Fight Begins a New Round
-----------------------------------------------
American Bankruptcy Institute reports that while Wall Street has
sparred with Jefferson County, Ala., for years over the local
government's crippling debt, the two sides are now arguing over
the condition of 3,200 miles of sewage pipes below Alabama's
largest metropolitan area.
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.
JUST RIGHT: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Just Right Enterprises, Inc.
dba Sonny's Real Pit Bar-B-Q of Fernandina Beach
2742 South 8th Street
Fernandina Beach, FL 32034
Bankruptcy Case No.: 12-02545
Chapter 11 Petition Date: April 16, 2012
Court: United States Bankruptcy Court
Middle District of Florida (Jacksonville)
Debtor's Counsel: Robert D. Wilcox, Esq.
BRENNAN, MANNA & DIAMOND, PL
800 W. Monroe Street
Jacksonville, FL 32202
Tel: (904) 366-1500
Fax: (904) 366-1501
E-mail: rdwilcox@bmdpl.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 20 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/flmb12-02545.pdf
The petition was signed by Mickey Ulmer, president.
KEYSTONE PRINTING: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Keystone Printing Ink., Co.
2700 Roberts Avenue
Philadelphia, PA 19129
Bankruptcy Case No.: 12-13707
Chapter 11 Petition Date: April 16, 2012
Court: United States Bankruptcy Court
Eastern District of Pennsylvania (Philadelphia)
Judge: Jean K. FitzSimon
Debtor's Counsel: Allen B. Dubroff, Esq.
ALLEN B. DUBROFF ESQ & ASSOC LLC
1500 JFK Blvd, Suite 1030
Philadelphia, PA 19102
Tel: (215) 635-7200
Fax: (215) 689-3777
E-mail: allen@dubrofflawllc.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by Robert Chamness, president.
LEHMAN BROTHERS: Dist. Court Remands NY Atty General Suit vs. E&Y
-----------------------------------------------------------------
Judge Lewis Kaplan of the U.S. District Court for the Southern
District of New York remanded the lawsuit filed by the People of
the State of New York by its Attorney General against Lehman
Brothers Holdings Inc.'s former auditors, Ernst & Young LLP, to
the state court where it was first filed despite agreement by the
parties that jurisdiction of the case lies with the federal
district court.
Judge Kaplan, in a March 22, 2012 memorandum opinion, said
jurisdiction could not be conferred upon the District Court by
agreement of the parties and that it remains obliged to examine
its jurisdiction despite the State's concession.
The District Court added that remand of the action is the only
course open to it in the present posture of the case. Judge
Kaplan pointed out that the State purports to base each of its
four causes of action on state law. Judge Kaplan, citing a case
decided by the Supreme Court, said the presence or possible
presence of a federal issue is not "a password opening federal
courts to any state action embracing a point of federal law."
The case is In re: LEHMAN BROTHERS SECURITIES AND ERISA
LITIGATION. The People of the State of New York by Eric T.
Schneiderman, Attorney General of the State of New York v. Ernst
& Young LLP, 11 Civ. 384 (LAK), No. 09 MD 2017 (LAK)(S.D.N.Y.).
A full-text copy of the Judge Kaplan's Decision is available at
http://is.gd/EIhHVzfrom Leagle.com.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset
LLC sought for bankruptcy protection in December 2009.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history. Lehman is set to make its first payment to creditors
under its $65 billion payout plan on April 17, 2012.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers
International (Europe) on Sept. 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan
Inc. filed for bankruptcy in the Tokyo District Court on
Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4
trillion (US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates. (http://bankrupt.com/newsstand/or 215/945-700)
LEHMAN BROTHERS: Bermuda Reinsurance Unit to Sell CLICO for $14MM
-----------------------------------------------------------------
Lehman Brothers Holdings Inc.'s Bermuda reinsurance unit is
seeking bankruptcy court approval to close on the sale of Congress
Life Insurance Co. for about $14 million, Royal Gazette reported.
Court filings show Tennessee Farmers Life Insurance Co., the
buyer in the deal, wants the U.S. Bankruptcy Court in Manhattan
to approve the deal to ensure none of Lehman's liabilities haunt
them.
The Lehman reinsurance unit bought Congress Life from an
affiliate of JPMorgan Chase & Co. in 2007 for about $9.1 million.
It provided $50 million in capital to Congress Life, which was
supposed to strengthen Lehman's reinsurance business.
Congress Life is one of the assets caught up in Lehman's court
fight with Magnetar Capital's Pulsar Re Ltd. The proceeds of the
sale and an additional $45 million used to capitalize Congress
Life will be held in a segregated account until there is a ruling
or settlement in the dispute, Royal Gazette reported.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset
LLC sought for bankruptcy protection in December 2009.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history. Lehman is set to make its first payment to creditors
under its $65 billion payout plan on April 17, 2012.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers
International (Europe) on Sept. 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan
Inc. filed for bankruptcy in the Tokyo District Court on
Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4
trillion (US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates. (http://bankrupt.com/newsstand/or 215/945-700)
LEHMAN BROTHERS: Turns Down Minibond Investors' Appeal
------------------------------------------------------
A federal judge turned down an appeal by investors that suffered
losses after buying so-called minibonds linked to Lehman Brothers
Holdings Inc., quashing the investors' bid for greater recovery,
Fox Business reported.
The investors previously objected to the way Judge James Peck of
the U.S. Bankruptcy Court in Manhattan said that Lehman could
unwind its derivatives claims. They argued that as owners of the
"minibonds," they could step into the shoes of an affiliate of
HSBC Holdings PLC and that HSBC, which issued the structured
financing products, had a fiduciary duty to protect them.
Judge Richard Sullivan of U.S. District Court in New York agreed,
however, with Judge Peck that the investors lack standing to
object to the procedures of how Lehman can unwind its derivatives
claims "because appellants are merely investors" in an entity
that managed the products, Fox Business reported.
Since just after Lehman's bankruptcy filing, investors have
fought over the minibonds -- some $2 billion worth of structured
finance products issued by HSBC. The products were marketed to
retail investors in Hong Kong as safe investments but were in
fact tied to an interest-rate default swap to which Lehman served
as the counterparty, according to the report.
Lehman's bankruptcy caused the value of the bonds to collapse,
which sparked protests outside of HSBC offices and other banks in
Hong Kong and prompted regulators there to intervene, Fox
Business reported.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset
LLC sought for bankruptcy protection in December 2009.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history. Lehman is set to make its first payment to creditors
under its $65 billion payout plan on April 17, 2012.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers
International (Europe) on Sept. 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan
Inc. filed for bankruptcy in the Tokyo District Court on
Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4
trillion (US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates. (http://bankrupt.com/newsstand/or 215/945-700)
LEHMAN BROTHERS: JPMorgan to Pay $20MM to Settle CFTC Charges
-------------------------------------------------------------
The U.S. Commodity Futures Trading Commission filed and
simultaneously settled charges against JPMorgan Chase Bank, N.A.
for its unlawful handling of Lehman Brothers, Inc.'s customer
segregated funds. The CFTC order imposes a $20 million civil
monetary penalty against JPMorgan. The order also requires
JPMorgan to implement undertakings to ensure the proper handling
of customer segregated funds in the future and to release
customer funds upon notice and instruction from the CFTC.
The CFTC order finds that from at least November 2006 to September
2008, JPMorgan was a depository institution serving LBI, a futures
commission merchant (FCM) registered with the CFTC. During this
time, LBI deposited its customers' segregated funds with JPMorgan
in large amounts that varied in size, but almost always more than
$250 million at any one time.
According to the order, during the same time period, JPMorgan
extended intra-day credit to LBI on a daily basis to facilitate
LBI's proprietary transactions, including repurchase agreements,
or "repos." JPMorgan would extend intra-day credit to LBI to the
extent that LBI's "net free equity" at JPMorgan was positive. As
of November 17, 2006, JPMorgan included LBI's customer segregated
funds in its calculation of LBI's net free equity, even though
these funds belonged to LBI's customers, not to LBI, the order
also finds.
The Commodity Exchange Act and CFTC regulations prohibit
depository institutions, like JPMorgan, from using or holding
segregated funds that belong to an FCM's customer as though they
belong to anyone other than that customer, and also prohibit the
extension of credit based on such funds to anyone other than that
customer.
According to the order, JPMorgan violated these prohibitions in
two ways. First, as stated in the order, JPMorgan extended intra-
day credit to LBI for approximately 22 months based in part on LBI
customers' segregated funds because those funds were included in
JPMorgan's determination of LBI's net free equity. Second, on
September 15, 2008, Lehman Brothers Holding, Inc. filed for
bankruptcy. Two days later, LBI requested that JPMorgan release
LBI's customers' segregated funds. JPMorgan improperly declined
the request based on JPMorgan's determination that LBI no longer
had positive net free equity held at JPMorgan. JPMorgan continued
to refuse to release these funds for approximately two weeks
thereafter, only to release the funds after being instructed by
CFTC officials. The CFTC order does not find that there were any
customer losses.
"The laws applying to customer segregated accounts impose critical
restrictions on how financial institutions can treat customer
funds, and prohibit these institutions from standing in the way of
immediate withdrawal," said David Meister, the Director of the
CFTC's Division of Enforcement. "As should be crystal clear, these
laws must be strictly observed at all times, whether the markets
are calm or in crisis."
CFTC Division of Enforcement staff members responsible for this
matter are Joan M. Manley, A. Daniel Ullman II, and Alison B.
Wilson. Ananda K. Radhakrishnan and Robert B. Wasserman, of the
CFTC's Division of Clearing and Risk, also contributed to this
matter.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset
LLC sought for bankruptcy protection in December 2009.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history. Lehman is set to make its first payment to creditors
under its $65 billion payout plan on April 17, 2012.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers
International (Europe) on Sept. 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan
Inc. filed for bankruptcy in the Tokyo District Court on
Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4
trillion (US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates. (http://bankrupt.com/newsstand/or 215/945-700)
LIGHTSQUARED INC: Falcone Said to Have Met With Icahn
-----------------------------------------------------
Bloomberg's Katherine Burton, Max Abelson and Saijel Kishan,
citing unnamed sources, report that Phil Falcone, senior managing
director of hedge fund Harbinger Capital Partners, together with
two colleagues met with Carl Icahn, billionaire investor and
chairman of Icahn Enterprises Holdings LP, at a New York
restaurant one night in March. Bloomberg relates that, according
to a person at the restaurant, Mr. Falcone said he hoped Mr. Icahn
might become a partner in LightSquared Inc.
Messrs. Falcone and Icahn wouldn't comment on their discussions,
Bloomberg relates.
Bloomberg notes Mr. Falcone is fighting to maintain control of
LightSquared and reverse the biggest drop in assets in Harbinger's
history -- $23 billion from withdrawals and losses.
According to Bloomberg, LightSquared's creditors, including Mr.
Icahn, 76, have agreed to wait until the end of the month before
deciding whether to put the company in technical default as a
result of the Federal Communications Commissions' announcement.
If Mr. Falcone, who heads the firm's executive committee, can't
persuade them to extend the deadline, LightSquared could file for
bankruptcy and wage war against debt holders who want a rapid sale
of his spectrum, he said.
The report notes Mr. Icahn along with investors including David
Tepper, head of hedge fund Appaloosa Management LP, have bought
about $300 million of LightSquared debt.
Bloomberg also notes Harbinger in January borrowed $190 million
from investment bank Jefferies Group Inc. at an effective rate of
24% to refinance the remaining portion of a $400 million loan from
UBS AG.
According to Bloomberg, Mr. Falcone has said he's spending a day a
week in Washington and is trying to negotiate a spectrum swap with
the military or others that would eliminate LightSquared's GPS
problem. The report notes Walt Piecyk, an analyst at BTIG LLC in
New York, said the Pentagon won't go along, adding that a "swap of
spectrum isn't a realistic option," and that "First, there's
nothing readily available and second, if there was, that's
spectrum that could be auctioned off for billions in proceeds."
Bloomberg says Mr. Falcone said if the swap doesn't work he'll try
to negotiate with GPS manufacturers to put filters on their
devices or to use the lower end of his spectrum. Or there's the
court.
"If I have to, I'll put it into bankruptcy, I don't care." Mr.
Falcone said. " I will maintain control."
About LightSquared Inc.
LightSquared Inc. -- http://www.lightsquared.com/-- is a company
that plans to develop a wholesale 4G LTE wireless broadband
communications network integrated with satellite coverage across
the United States. But the plan hit a roadblock when the U.S.
military and others complained that the planned service would
disrupt global positioning system equipment.
LITTLE MOUNTAIN: Taps Holland & Hart as Bankruptcy Counsel
----------------------------------------------------------
Little Mountain Rabbit Patch LLC asks for authorization from the
US. Bankruptcy Court for the District of Utah to employ the law
firm of Holland & Hart, LLP, as bankruptcy counsel.
Holland & Hart will be compensated in these hourly rates:
Doyle S. Byers $345
Mona L. Burton $420
Other Attorneys, $190-$715
Paralegals $135-$195
Doyle S. Byers, Esq., a partner at Holland and & Hart, assures the
Court that the firm does not represent or hold any interest
adverse to Debtor, its estate, creditors, equity security holders,
or affiliates in the matters upon which the firm is to be engaged,
and is a "disinterested person" within the meaning of section
101(14) of the Bankruptcy Code, as modified by section 1107(b) of
the Bankruptcy Code, and as required by section 327(a) of the
Bankruptcy Code.
North Salt Lake, Utah-based Little Mountain Rabbit Patch, LLC,
filed for Chapter 11 bankruptcy protection (Bankr. D. Utah Case
No. 12-22554) on March 5, 2012. In its schedules, the Debtor
disclosed $6,862,259 in total assets and $9,189,577 in total
liabilities. Judge Joel T. Marker presides over the case.
LITTLE MOUNTAIN: Rockwall & Advanced Fluid Want Case Dismissed
--------------------------------------------------------------
Rockwall, LLC, and Advanced Fluid Containment, LLC, have asked the
U.S. Bankruptcy Court for the District of Utah to convert to
Chapter 7 or dismiss the Chapter 11 bankruptcy case of Little
Mountain Rabbit Patch, LLC.
The movants say that the appointment of a trustee or examiner is
necessary if this case remains in Chapter 11, but the Debtor can't
afford that expense, and it can't confirm a plan.
Rockwall and Advanced are represented by:
J. Thomas Beckett, Esq.
Erik A. Christiansen, Esq.
Sanna Rae Taylor, Esq.
PARSONS BEHLE & LATIMER
201 South Main Street, Suite 1800
Salt Lake City, UT 84111
Tel: (801) 532-1234
Fax: (801) 536-6111
E-mail: tbeckett@parsonsbehle.com
echristiansen@parsonsbehle.com
staylor@parsonsbehle.com
North Salt Lake, Utah-based Little Mountain Rabbit Patch, LLC,
filed for Chapter 11 bankruptcy protection (Bankr. D. Utah Case
No. 12-22554) on March 5, 2012. In its schedules, the Debtor
disclosed $6,862,259 in total assets and $9,189,577 in total
liabilities. Holland & Hart, LLP, serves as the Debtor's
bankruptcy counsel. Judge Joel T. Marker presides over the case.
LITTLE MOUNTAIN: Files Schedules of Assets and Liabilities
----------------------------------------------------------
Little Mountain Rabbit Patch, LLC, filed with the U.S. Bankruptcy
Court for the District of Utah its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $4,320,000
B. Personal Property $2,542,259
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $3,077,126
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $0
----------- -----------
TOTAL $6,862,259 $9,189,577
A full-text copy of the schedules is available for free at:
http://bankrupt.com/misc/LITTLE_MOUNTAIN_sal.pdf
North Salt Lake, Utah-based Little Mountain Rabbit Patch, LLC,
filed for Chapter 11 bankruptcy protection (Bankr. D. Utah Case
No. 12-22554) on March 5, 2012. Holland & Hart, LLP, serves as
the Debtor's bankruptcy counsel. Judge Joel T. Marker presides
over the case.
LUMBER PRODUCTS: Agrees with Wells Fargo on Trustee
---------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Lumber Products and Wells Fargo Bank NA jointly
requested appointment of a Chapter 11 trustee. The bank, owed
$22.8 million, is the largest secured creditor.
About Lumber Products
Lumber Products -- http://www.lumberproducts.com/-- is a
wholesale distributor of some of the finest hardwood lumber,
hardwood plywood, and door and millwork products to the Northwest,
Intermountain, and Southwest states since 1938. It has
headquarters in Tualatin, Oregon, and operations in Oregon,
Washington, Idaho, Montana, Utah, Arizona, and New Mexico. Lumber
Products is the sole owner of Lumber Products Holding and
Management Company. Holdco is the sole owner of: Lumber Products
Holding and Management Company; Sunrise Wood Products, Inc.;
Lumber Products Washington, Inc.; Components & Millwork, Inc.;
Wood Window Distributors, Inc.; D&J Wood Resources, Inc.; and
Brady International Hardwoods Company.
For the past four years, the Debtor has experienced financial
difficulties and significant liquidity problems which have
increased over the past 18 months. Despite the Debtor's efforts
to reorganize with the assistance of competent turnaround
professionals they have been unable to address these issues with
Wells Fargo Bank's consent outside of a formal court process and
have suffered continuing significant losses. The Debtor owes
Wells Fargo in excess of $22.8 million.
Lumber Products filed for Chapter 11 bankruptcy (Bankr. D. Ore.
Case No. 12-32729) on April 11, 2012, listing under $50 million in
assets and debts. Judge Elizabeth L. Perris presides over the
case. The petition was signed by Craig Hall, president and chief
operating officer.
Wells Fargo is represented by Lane Powell PC.
MAJESTIC CAPITAL: WEST-FAIR Files Suit vs. Comp. Risk Managers
--------------------------------------------------------------
BankruptcyData.com reports that Majestic Capital Debtors WEST-FAIR
filed with the U.S. Bankruptcy Court a lawsuit against
Compensation Risk Managers. WEST-FAIR alleges that Compensation
Risk Managers failed to carry out their respective contractual,
common law and statutory obligations to WEST-FAIR, to provide
third-party administration, insurance and other services to the
self-funded workers' compensation trust of which WESTFAIR was a
member.
According to WEST-FAIR, The New York Workers' Compensation Board,
which regulates self-insured trusts, has determined that the Trust
is underfunded by $82.2 million, and the fund's administrative
costs associated with all defaulting self-insurers, are
approximately $925 million, for which WEST-FAIR, along with the
other member employers of the Trust, are liable. And according to
WEST-FAR, the WC Board has indicated to WEST-FAIR its intent to
commence an action against them to collect the deficit and
administrative costs. WEST-FAIR seeks to hold the Defendants
accountable for the breach of their respective duties and for
their fraudulent and unlawful acts with respect to the operation
and management of the Trust.
About Majestic Capital
Headquartered in Poughkeepsie, New York City, Majestic Capital,
Ltd., formerly known as CRM Holdings Ltd., has two wholly owned
subsidiaries, Majestic USA and Twin Bridges, a Bermuda-based
reinsurance company. Twin Bridges and Majestic Insurance, a
downstream subsidiary of Majestic USA are the two principal
insurance companies.
The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Case
No. 11-36225) on April 29, 2011.
Affiliates also sought Chapter 11 protection (Bankr. S.D.N.Y. Case
Nos. 11-36221 thru 11-36234) on April 29, 2011. The Debtors have
tapped Murphy & King, P.C. as their general bankruptcy counsel and
Genova & Malin as their local counsel. The Debtors tapped
Michelman & Robinson, LLP, as special counsel, and Day Seckler,
LLP, as accountants and financial advisors. The Debtor disclosed
$436,191,000 in assets and $421,757,000 in liabilities as of
Dec. 31, 2010.
Bruce F. Smith, Esq., and Steven C. Reingold, Esq., at Jager Smith
P.C., serve as counsel to the Official Committee of Unsecured
Creditors. J.H. Cohn LLP is the financial advisor.
MANISTIQUE PAPERS: Court Approves Sale to Watermill Group
---------------------------------------------------------
A bankruptcy judge has cleared Watermill Group to buy Manistique
Papers Inc.'s uncoated printing and writing paper manufacturing
business out of Chapter 11 protection.
Manistique Papers' specialty paper manufacturing business was sold
for $12.3 million to MPI Acquisition LLC, an affiliate of private-
equity investor Watermill Group from Lexington, Massachusetts.
Watermill already owns paper maker FutureMark Paper Co., according
to the buyer's website.
Bill Rochelle, the bankruptcy columnist for Bloomberg News, notes
that the order signed by the bankruptcy judge on April 17
approving the sale precludes anyone from suing suppliers for
preferential payments received in three months before bankruptcy.
The sale, originally scheduled for February, was postponed when
there was no buyer at the time.
About Manistique Papers
Manistique Papers Inc. operates a landfill in Manistique,
Michigan, whereby residuals resulting from paper production are
deposited. It owns a 125,000 ton-a-year plant making specialty
papers from recycled fiber.
Manistique Papers filed for Chapter 11 bankruptcy protection
(Bankr. D. Del. Case No. 11-12562) on Aug. 12, 2011. Godfrey &
Kahn, S.C. represents the Debtor in its restructuring effort.
Morris, Nichols, Arsht & Tunnell LLP serves as its Delaware
bankruptcy co-counsel. Vector Consulting, L.L.C., serves as its
financial advisor. Baker Tilly Virchow Krause, LLC, serves as its
accountant.
The Official Committee of Unsecured Creditors appointed in the
case is represented by Lowenstein Sandler PC as lead counsel and
Ashby & Geddes, P.A., as Delaware counsel. J.H. Cohn LLC serves
as the panel's financial advisor.
Manistique Papers disclosed $19,688,471 in assets and $24,633,664
in liabilities as of the Chapter 11 filing.
MARCO POLO: Debtors Have Plan Exclusivity Until April 24
--------------------------------------------------------
Seaarland Shipping Management and its affiliates still have sole
rights to propose a Chapter 11 plan, according to a bridge order
entered by Bankruptcy Judge James M. Peck on April 12.
A hearing was scheduled April 12 on the Debtor's request to extend
its exclusive period to propose a Chapter 11 plan until May 31,
2012 and the exclusive period to solicit acceptances of such plan
until July 31, 2012. Lenders have opposed an extension, asking
the judge instead to terminate exclusivity so that they could file
their own plan. The lenders say that the Dutch shipping company
is using a delay in filing its own plan.
An April 11 court filing by the Debtors said that on April 12,
prior to the hearing, the Debtors will file a plan of liquidation
that will provide for the disposition of all of the Debtors?
assets in a manner that will maximize value for the benefit of all
creditors in accordance with the Bankruptcy Code. The Liquidating
Plan will further provide for the distribution of the proceeds in
accordance with the absolute priority rule. The Debtors said that
the filing of the Liquidating Plan will dispatch with the need for
the Court to consider the exclusivity motion and the lenders'
cross motions to terminate exclusivity.
The case docket, however, shows that as of April 18, 2012, the
Debtors have not filed the Liquidating Plan.
Hearings on the plan exclusivity extension has previously been
postponed (and bridge orders have been entered) in order to give
both sides more time to discuss the Chapter 11 plan.
The lenders asking to file their own plan are Royal Bank of
Scotland, Norddeutsche Landesbank Girozentrale, and Credit
Agricole Corporate & Investment Bank.
About Marco Polo
Marco Polo Seatrade B.V. operates an international commercial
vessel management company that specializes in providing commercial
and technical vessel management services to third parties.
Founded in 2005, the Company mainly operates under the name of
Seaarland Shipping Management and maintains corporate headquarters
in Amsterdam, the Netherlands. The primary assets consist of six
tankers that are regularly employed in international trade, and
call upon ports worldwide.
Marco Polo and three affiliated entities filed for Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 11-13634) on July 29,
2011. The other affiliates are Seaarland Shipping Management
B.V.; Magellano Marine C.V.; and Cargoship Maritime B.V.
Marco Polo is the sole owner of Seaarland, which in turn is the
sole owner of Cargoship, and also holds a 5% stake in Magellano.
The remaining 95% stake in Magellano is owned by Amsterdam-based
Poule B.V., while another Amsterdam company, Falm International
Holding B.V. is the sole owner of Marco Polo. Falm and Poule
didn't file bankruptcy petitions.
The filings were prompted after lender Credit Agricole Corporate
& Investment Bank seized one ship on July 21, 2011, and was on
the cusp of seizing two more on July 29. The arrest of the
vessel was authorized by the U.K. Admiralty Court. Credit
Agricole also attached a bank account with almost US$1.8 million
on July 29. The Chapter 11 filing precluded the seizure of the
two other vessels. The company started a lawsuit against the two
creditors in January 2012.
The cases are before Judge James M. Peck. Evan D. Flaschen, Esq.,
Robert G. Burns, Esq., and Andrew J. Schoulder, Esq., at Bracewell
& Giuliani LLP, in New York, serve as the Debtors' bankruptcy
counsel. Kurtzman Carson Consultants LLC serves as notice and
claims agent.
The petition noted that the Debtors' assets and debts are both
more than US$100 million and less than US$500 million.
Tracy Hope Davis, the United States Trustee for Region 2,
appointed three members to serve on the Official Committee of
Unsecured Creditors. The Committee has retained Blank Rome LLP as
its attorney.
Creditor Credit Agricole Corporate and Investment Bank is
represented by Alfred E. Yudes, Jr., Esq., and Jane Freeberg
Sarma, Esq., at Watson, Farley & Williams (New York) LLP.
Gregory M. Petrick, Esq., Ingrid Bagby, Esq., and Sharon J.
Richardson, Esq., at Cadwalader, Wickersham & Taft LLP, in New
York, represents secured creditor and post-petition lender The
Royal bank of Scotland plc.
MBI ENERGY: S&P Assigns 'B' Corp. Credit Rating; Outlook Stable
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Belfield, North Dakota-based MBI Energy Services
Inc. The outlook is stable.
"We also assigned our 'B' issue-level rating (the same as the
corporate rating) to MBI's planned $250 million senior unsecured
notes due 2020. We assigned the notes a '4' recovery rating,
indicating our expectation of average (30% to 50%) recovery of
principal in the event of a payment default," S&P said.
"The ratings on MBI Energy Services Inc. (MBI) reflect our
assessment of the company's 'vulnerable' business risk and
'aggressive' financial risk," said Standard & Poor's credit
analyst Lawrence Wilkinson. "The ratings incorporate the company's
relatively small scale, limited product and geographic diversity,
and its position in a highly cyclical, capital-intensive and
competitive industry. The ratings also reflect the company's
meaningful exposure to oil-directed development activities, high
proportion of production-related revenues, adequate liquidity, and
moderate debt leverage."
"MBI is an oilfield service company that focuses on providing
fluid management, logistics, and well intervention services to
exploration and production companies. The company's business lines
include fresh water procurement and fluid delivery, frac tank and
fluid storage, fluid removal and disposal, crude oil hauling,
proppant and other logistics services, cased hole wireline,
workover, and swabbing. In addition to the company's fleet of 178
water and 118 crude hauling trucks, the company has brokering
arrangements with over 655 owner-operated trucks. While the
company is primarily focused on the Bakken Shale in North Dakota,
it also has operations in the Marcellus Shale in Pennsylvania,
Niobrara in Wyoming, and the Eagle ford Shale in South Texas," S&P
said.
"The stable outlook reflects our view that MBI's performance will
continue to benefit from continued activity growth in the Bakken
over the intermediate term. Near-term positive rating actions are
unlikely given our assessment of the company's business risk
profile. We could lower the rating if MBI's debt/EBITDAX ratio
exceeds 6.0x for a sustained period, which would most likely occur
as a result of a large debt-financed acquisition or a major
pullback in the development of the Bakken due to lower oil prices.
For this threshold to be breached in 2012, EBITDA would need to
decline by more than 50% from currently anticipated levels," S&P
said.
MEAD PRODUCTS: S&P Assigns 'B+' Rating to New $500MM Senior Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'B+'
rating to U.S.-based Mead Products LLC's proposed $500 million
senior unsecured notes due 2020. "We are also assigning our
preliminary '5' recovery rating to the proposed issue, indicating
our expectation that lenders would receive modest (10% to 30%)
recovery in the event of a payment default. The notes will be
initially issued by Monaco SpinCo Inc., to complete the merger of
ACCO Brands Corp. (B+/Watch Pos/--) and the Consumer & Office
Products division of MeadWestvaco through a Reverse Morris Trust
transaction. Immediately following completion of the merger (which
will simultaneously occur with the notes issuance), Monaco SpinCo
Inc. will be merged with and into Mead Products LLC, of which ACCO
Brands Corp. will be the sole member. The ratings are based on
preliminary terms and conditions, and that ACCO shareholder
approval of the proposed merger will be received at its
shareholder meeting scheduled to take place on April 23, 2012. If
ACCO's shareholders vote to approve the merger, the transaction
should close before May 1, 2012. If the shareholders do not
approve the merger, the proposed notes will not be issued and the
preliminary ratings would be withdrawn. ACCO has already received
regulatory approval for the transaction," S&P said.
"ACCO has indicated that it plans to use proceeds from this debt
issuance along with proceeds from its recently issued term loans
to repay outstanding debt obligations, including the company's
remaining 7.625% subordinated notes (about $246 million
outstanding) due 2015, existing 10.625% senior secured notes
(about $425 million outstanding) and to fund the cash portion of
the special distribution, and to pay fees and expenses incurred in
connection with the merger. As such, we expect ACCO's adjusted
debt levels pro forma for the merger as of Dec. 31, 2011, to
increase slightly to about $1.4 billion. The ratings on ACCO's
existing 10.625% senior secured notes due 2015, and the existing
7.625% subordinated notes due 2015, will be withdrawn after they
are redeemed upon closing of the transaction. ACCO will also
distribute shares of its common stock to MeadWestvaco shareholders
as part of the consideration for the acquisition," S&P said.
"The ratings on ACCO, including the 'B+' corporate credit rating,
remain on CreditWatch with positive implications, pending the
close of the transaction and corresponding financing. Following
the close of the transaction, we expect to raise our corporate
credit rating on ACCO to 'BB-' and assign a stable outlook. Along
with the '5' recovery rating assigned to the proposed notes, the
issue-level rating is correlated to the expected upgrade of ACCO.
Our ratings incorporate our view of the ACCO's 'weak' business
risk profile and 'aggressive' financial risk profile. In the
unlikely event that ACCO does not receive shareholder approval to
complete the proposed transaction, we would affirm the existing
'B+' corporate credit rating and remove it from CreditWatch.
Recovery ratings for all existing debt would then be reassessed,
as well as the corresponding issue-level ratings," S&P said.
RATINGS LIST
ACCO Brands Corp.
Corporate credit rating B+/Watch Pos/--
New Ratings
Mead Products LLC
Senior unsecured
$500 mil. notes due 2020 B+(prelim)
Recovery rating 5(prelim)
MONEY TREE: Proposes Sale for Payday Lending Chain
--------------------------------------------------
Katy Stech at Dow Jones' DBR Small Cap reports that Money Tree
Inc. revealed a bankruptcy-exit plan that hands over the chain's
nearly 100 outlets to an unidentified buyer while paying off a
fraction of the $93 million debt owed to bondholders who have
accused the company's leaders of running a multimillion-dollar
Ponzi scheme.
About Money Tree
Bainbridge, Georgia-based The Money Tree Inc. --
http://www.moneytreeinc.com/-- operates a network of lending
branches across the Southeast, concentrated in Georgia, Florida
and Alabama. The Company and four affiliates filed for Chapter 11
bankruptcy (Bankr. M.D. Ala. Case Nos. 11-12254 thru 11-12258) on
Dec. 16, 2011. The other debtor-affiliates are Small Loans, Inc.,
The Money Tree of Louisiana, Inc., The Money Tree of Florida Inc.,
and The Money Tree of Georgia of Georgia Inc. Judge William R.
Sawyer oversees the case, replacing Judge Dwight H. Williams, Jr.
Max A. Moseley, Esq., at Baker Donelson Bearman Caldwell & Berkow,
P.C., serves as the Debtors' counsel. The Debtors hired Warren,
Averett, Kimbrough & Marino, LLC, as restructuring advisors.
Money Tree's consolidated balance sheet reported $34,859,189 in
assets, $92,655,010 in liabilities, and $57,795,821 in total
stockholders' deficit. The Money Tree Inc. disclosed $73,413,612
in assets and $73,050,785 in liabilities as of the Chapter 11
filing. The petitions were signed by Biladley D. Bellville,
president.
The Company's subsidiary, Best Buy Autos of Bainbridge Inc., is
not a party to the bankruptcy filing and intends to operate its
business in the ordinary course.
Greenberg Traurig, LLP represents the official committee of
unsecured creditors for the Debtors. The Committee tapped HGH
Associates LLC as its accountants and financial advisors.
MOORE SORRENTO: Wants Control of Case Until June; Has Sale Deal
---------------------------------------------------------------
Moore Sorrento, LLC, asks the Bankruptcy Court to extend the
exclusive period to file a chapter 11 plan and the exclusive
period to solicit plan votes to June 15, 2012.
As reported by the Troubled Company Reporter on Oct. 20, 2011,
Moore Sorrento delivered a plan of reorganization and disclosure
statement dated Oct. 3, 2011. All classes of claims and interests
are estimated to have 100% recovery under the Plan.
J. Robert Forshey, Esq., at Forshey & Prostok LLP, tells the Court
the Debtor is continuing to work towards finalizing an asset
purchase agreement with Inland Real Estate Acquisitions, LLC,
which will allow the Debtor to move forward with an alternative
reorganization structure based on a sale of a majority of the
Shopping Center to Inland. This alternative reorganization
structure will require the filing of an amendment to the current
Plan. The hearing for confirmation of the Plan, as amended, will
also have to be scheduled to allow the due diligence period under
an APA with Inland to run. Therefore, the Debtor anticipates that
confirmation of an amended Plan would occur in May 2012. The need
for additional time to allow the potential sale to Inland to move
forward and to file the necessary documents related to the same,
favor the extension of the Exclusive Periods.
Mr. Forshey submits that the Debtor has made significant progress
toward ultimate resolution of this case by proposing and filing
the Plan. The Plan has been accepted by all creditors who have
voted on the Plan and the Debtor will seek confirmation of the
Plan in its current form if a property sale to Inland does not
materialize or if Wells Fargo will not consent to further
extension of the Agreement to allow the Inland transaction to move
forward.
The progress made by the Debtor towards reorganization is also
evidenced by the Agreement reached with Wells Fargo and the
progress made towards finalizing an APA with Inland. If Wells
Fargo agrees to extend the Agreement and an APA is promptly signed
with Inland, the Debtor will be able to move forward with an
amended version of the Plan that will have the support of Wells
Fargo. Therefore, the Debtor's significant progress towards
reorganization strongly favors granting a further extension of the
Exclusive Periods.
The Plan, in its current state, provides for, inter alia,
completion of construction of the Shopping Center, with such
construction costs to be partially funded by a capital
contribution of $1 million by two of the Debtor's owners, and full
payment of all creditor claims. The Debtor believes that the Plan
is feasible and satisfies the requirements of the Bankruptcy Code.
Votes on the Plan have been solicited, with only Wells Fargo's
deadline for voting having been extended pursuant to the Agreement
and Amendment. All other creditors who have submitted ballots
have voted to accept the Plan. The Debtor has unquestionably
demonstrated the ability to file a viable plan of reorganization
and this factor favors granting the Motion.
Confirmation Hearing Rescheduled to May 3
The Bankruptcy Court has reset the hearing to May 15, 2012, at
9:30 a.m., to consider confirmation of Moore Sorrento's proposed
First Amended Plan, which was filed Oct. 3, 2011.
Under the October Plan, Class 1 Convenience Claims will receive a
single cash payment equal to 100% of the Allowed Claim without
interest. Any holder of a General Unsecured Claim may make an
election under the Plan to be treated as a Convenience Claims.
Class 2 Wells Fargo Secured Claim is estimated to be
$39.8 million. Wells Fargo's Allowed Claim based on the First
Note will be paid in 60 installments and will bear a 5% interest
per annum as of the Effective Date. Wells Fargo's Allowed Claim
based on the Second Note will be paid in 60 installments and will
bear a 7% interest per annum as of the Effective Date.
Class 3 General Unsecured Claims will receive the allowed claim
amount in 60 installments without interest.
Class 4 Secured Tax Claim will also be paid in 60 equal
installments, and will bear interest at a rate yet to be fixed.
Class 5 Interests in the Debtor will be retained. Collins and
Lippman will make a capital contribution to the Debtor as of the
Effective Date in the amount of $1 million.
A full-text copy of the Disclosure Statement dated Oct. 3, 2011,
is available for free at:
http://bankrupt.com/misc/MOORESORRENTO_DSOct3.PDF
About Moore Sorrento
Hurst, Texas-based Moore Sorrento, LLC, owns real property located
in Moore, Oklahoma, commonly known as the Shops at Moore, which
the Company operates as a retail shopping center. The center's
current 23 tenants offer various goods and services to retail
customers.
Moore Sorrento filed Chapter 11 bankruptcy protection (Bankr. N.D.
Tex. Case No. 11-44651) on Aug. 17, 2011. J. Robert Forshey,
Esq., and Matthew G. Maben, Esq., at Forshey & Prostok, LLP, in
Fort Worth, Tex., serve as the Debtor's counsel. In its
schedules, Moore Sorrento disclosed assets of $43,259,900 and
liabilities of $42,262,158 as of the Petition Date.
MOORE SORRENTO: Wants to Deem Amended Plan Accepted by Creditors
----------------------------------------------------------------
Moore Sorrento, LLC, asks the Bankruptcy Court for entry of an
order deeming the First Amended Plan of Reorganization, accepted
by all creditors who accepted First Amended Plan prior to
modification.
In accordance with the Settlement Agreement among the Debtor,
William Lippman and Burk Collins, the Debtor filed its First
Amendment and Modification to the First Amended Chapter 11 Plan of
Reorganization for Moore Sorrento, LLC, on March 29, 2012. In
addition to modifying the treatment of Wells Fargo's claims to
conform to the Agreement, the Modification modifies the Plan in
the following respects:
a. Additional defined terms have been added to the Plan which
relate to the Inland Sale;
b. Various defined terms and other provisions of the Plan
which are no longer applicable or part of the Debtor's
proposed restructuring, in light of the Inland Sale, have
been deleted;
c. The definition of the effective date of the Plan has been
modified to be triggered by the closing and funding of the
Inland Sale and such closing and funding has been included
as a condition to effectiveness of the Plan;
d. The provisions of the Plan detailing the means by which
the Debtor shall implement the Plan and make payments to
creditors, other than Wells Fargo, have been modified to
describe the sources of income from which the Debtor shall
make Plan payments after closing of the Inland Sale and
satisfaction of Wells Fargo's claims; and
e. Minor modifications have been made to the treatment of
certain claims held by creditors other than Wells Fargo.
The hearing on the motion is scheduled on May 2, 2012, at
10:30 a.m.
About Moore Sorrento
Hurst, Texas-based Moore Sorrento, LLC, owns real property located
in Moore, Oklahoma, commonly known as the Shops at Moore, which
the Company operates as a retail shopping center. The center's
current 23 tenants offer various goods and services to retail
customers.
Moore Sorrento filed Chapter 11 bankruptcy protection (Bankr. N.D.
Tex. Case No. 11-44651) on Aug. 17, 2011. J. Robert Forshey,
Esq., and Matthew G. Maben, Esq., at Forshey & Prostok, LLP, in
Fort Worth, Tex., serve as the Debtor's counsel. In its
schedules, Moore Sorrento disclosed assets of $43,259,900 and
liabilities of $42,262,158 as of the Petition Date.
MOORE SORRENTO: May Use Wells Fargo Cash Collateral Thru June 3
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
authorized, in a seventh interim order, Moore Sorrento, LLC, to
use the cash collateral in which Wells Fargo Bank, N.A., asserts
an interest.
The Debtor's authority to use cash collateral will terminate on
June 3, 2012, at 12:00 a.m., Prevailing Central Time.
As of the Petition Date, Wells Fargo asserts a perfected and
senior priority lien on the Wells Fargo Collateral to secure
payment of the First Note, as reflected by, among other things,
that certain Mortgage (with Power of Sale), Security Agreement,
Assignment of Rents and Financing Statement dated Nov. 7, 2007,
and that certain Assignment of Rents dated Nov. 7, 2007.
The Debtor will use the cash collateral to fund its business
operations. The Debtor must not exceed the expenditures by 10% on
any line item basis or 10% of the total monthly expenditures,
provided that the Debtor will not make any payments to or for the
benefit of any "insider".
The adequate protection payments in the amount of $176,562
will required to be made by the Debtor to Wells Fargo on or before
April 10, 2012, and on or before May 10, 2012, which will
constitute payments of interest on the Loans at the non-default
contract rates of interest.
As additional adequate protection, on or before the 10th day of
each month, the Debtor will deposit $23,100 as escrow for real
estate taxes, which amounts will be held by Wells Fargo in a
reserve account pending further order of the Court.
As adequate protection for any diminution in value of the lender's
collateral, the Debtors will grant Wells Fargo replacement liens
on the prepetition Wells Fargo collateral, and property acquired
by the Debtor after the Petition Date; and superpriority
administrative expense claim.
About Moore Sorrento
Hurst, Texas-based Moore Sorrento, LLC, owns real property located
in Moore, Oklahoma, commonly known as the Shops at Moore, which
the Company operates as a retail shopping center. The center's
current 23 tenants offer various goods and services to retail
customers.
Moore Sorrento filed Chapter 11 bankruptcy protection (Bankr. N.D.
Tex. Case No. 11-44651) on Aug. 17, 2011. J. Robert Forshey,
Esq., and Matthew G. Maben, Esq., at Forshey & Prostok, LLP, in
Fort Worth, Tex., serve as the Debtor's counsel. In its
schedules, Moore Sorrento disclosed assets of $43,259,900 and
liabilities of $42,262,158 as of the Petition Date.
MQVP INC: 6th Circ. Affirms Approval of $1.2 Million Settlement
---------------------------------------------------------------
Circuit Judge Julia Smith Gibbons affirmed lower court rulings
approving a settlement in the Chapter 7 bankruptcy case of MQVP
Inc. Before conversion to Chapter 7, MQVP had been litigating two
separate lawsuits alleging trademark infringement. The trustee of
the MQVP estate sought approval from the bankruptcy court of a
settlement to resolve these suits, which involved a payment of
$1.2 million to the estate. MQVP creditors William Hindelang and
Global Online Certifications, Inc. objected to the proposed
settlement on grounds that the trustee had not met his burden of
showing that the settlement was reasonable. After a hearing, the
bankruptcy court approved the settlement, and the district court
subsequently affirmed. The Sixth Circuit held that the bankruptcy
judge did not abuse her discretion in approving the settlement.
MQVP was involved in two lawsuits. In the first, filed in the
Eastern District of Arkansas, Mid-State Aftermarket Body Parts
sued MQVP seeking a declaratory judgment that it had not infringed
MQVP's trademark. MQVP counterclaimed, alleging violations of the
Lanham Act, unfair business practices, tortious interference,
unfair competition, and conversion. The district court granted
summary judgment in favor of Mid-State, but the Eighth Circuit
reversed and remanded, finding that there were material, disputed
issues of fact for trial. In the second proceeding, first filed
in bankruptcy court in the Eastern District of Michigan, MQVP sued
Keystone Automotive Industries, claiming violations of the Lanham
Act, unfair business practices, tortious interference, unfair
competition, and conversion. Keystone filed various
counterclaims. The case was later transferred to the district
court. Keystone and Mid-State are associated with the LKQ
Corporation.
The settlement provided for (1) the dismissal with prejudice of
both the Arkansas and Michigan litigations; (2) the payment of
$1.2 million by LKQ to the trustee; (3) the assignment of certain
intellectual property of MQVP to LKQ; and (4) the withdrawal of
all claims filed by LKQ against the estate.
Global Online Certifications and William Hindelang, the former
sole shareholder of the Debtor, objected, saying the dollar amount
of the settlement was too low and that the trustee had failed to
meet his burden of showing that the settlement was reasonable.
Under the settlement, Global Online would receive around $130,000.
No other creditors had any objections; in fact, MQVP's largest
creditor supported the settlement.
The appellate case is William Hindelang and Global Online
Certifications, Inc., Appellants, v. Mid-State Aftermarket Body
Parts Inc., Keystone Automotive Industries, Inc., LKQ Corporation,
and Chapter 7 Trustee Charles J. Taunt, Appellees, No. 10-2225
(6th Cir.).
A copy of the Sixth Circuit's April 13, 2012 decision is available
at http://is.gd/FtZ98Bfrom Leagle.com. The panel consists of
Circuit Judges Gibbons, Richard Allen Griffin, and Bernice B.
Donald.
MQVP Inc. -- the Manufacturers' Qualification and Validation
Program Inc. -- maintained the registered service mark MQVP, which
represented a supply chain quality and assurance program in the
aftermarket auto crash parts industry. The MQVP program, in which
aftermarket car part manufacturers, distributors, and insurance
companies participated, was to certify the quality and
traceability of aftermarket parts that were manufactured and sold.
MQVP filed a voluntary Chapter 11 petition (Bankr. E.D. Mich. Case
No. 06-_____) on Aug. 17, 2006. On July 18, 2007, Judge Marci
McIvor converted the case to a Chapter 7 proceeding, and Charles
J. Taunt was appointed trustee.
MSCI: Moody's Affirms 'Ba1' Corporate Family Rating
---------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to MSCI's proposed
new senior secured Term Loan A and affirmed all existing ratings
including the Ba1 Corporate Family Rating, Ba2 Probability of
Default Rating and the SGL-1 Speculative Grade Liquidity Rating.
Ratings Rationale
"MSCI's announced debt refinancing will result in lower financial
leverage and interest expense, but at the cost of less cash on
hand and somewhat higher near term amortization," said Edmond
DeForest, Vice President, Senior Analyst at Moody's Investors
Service.
Pro-forma for the transaction, debt to EBITDA is about 2.5x, and
should approach 2.0x by the end of fiscal year 2012 due to
expected revenue and profit growth. MSCI plans to use proceeds
from a new first-lien $600 million senior secured Term Loan A and
$200 million of cash from the balance sheet to pay down existing
borrowings under their Term Loan B. The transaction increases
annual debt amortization by approximately $30 million a year, but
reduces annual interest expense substantially. The faster
scheduled amortization should be manageable for MSCI, as Moody's
expects the company to generate about $250 million of free cash
flow in 2012. MSCI is extending the revolver maturity to 2017,
which somewhat mitigates the liquidity-negative effect of less
cash on the balance sheet.
The following ratings are affirmed:
Corporate Family Rating: Ba1
Probability of Default Rating: Ba2
Speculative Grade Liquidity Rating: SGL-1
Senior Secured 1st Lien Revolving Credit Facility: Ba1
(LGD3 -- 34%)
Senior Secured Term Loan B: Ba1 (LGD3 -- 34%)
The following new rating is assigned:
Senior Secured Term Loan A: Ba1 (LGD3 -- 34%)
Rating Outlook
The stable outlook reflects Moody's expectation of a moderate
improvement in Financial Strength metrics in fiscal 2012,
including debt to EBITDA approaching 2.0 times and free cash flow
to debt of greater than 20%, driven by EBITDA growth and the use
of free cash flow to reduce term debt. Performance should continue
to benefit from trends supporting the growth of equity exchange
traded funds (ETFs), international (especially emerging market)
equity indices and risk management products.
The ratings could be raised following a material expansion of the
income and overall business scale to be consistent with other
companies at a higher rating level, including revenue of over $1.2
billion, sustained debt to EBITDA of under 3 times, and a
demonstrated commitment to conservative financial policies. The
ratings could be lowered if there is a meaningful increase in
competition, client retention rates deteriorate or a more
difficult pricing environment evolves causing us to anticipate an
erosion in profitability and for debt to EBITDA and free cash flow
to debt to be sustained at over 4 times or under 10%, respectively
A change to more aggressive financial policies could also trigger
a downgrade.
MSCI is a leading global provider of investment decision support
tools, including indices, portfolio risk and performance analytics
and corporate governance products and services. Fiscal 2012
revenue should approach $1.0 billion.
The principal methodology used in rating MSCI, Inc. was Moody's
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.
NATTEL LLC: May 23 Hearing Set Over Bahamian Business Rules
-----------------------------------------------------------
In the lawsuit, NatTel LLC, v. Oceanic Digital Communications,
Inc., ODC St. Lucia Limited, PCI Holdings Ltd., Oceanic Digital
Jamaica Limited, S.A.C. Capital Advisors, LLC, S.A.C. Capital
Management, LLC, S.A.C. Capital Associates, LLC, America Movil
S.A.B. de C.V., and The Bank of New York Mellon Corporation, Adv.
Proc. No. 07-5037 (Bankr. D. Conn.), Bankruptcy Judge Alan H. W.
Shiff ruled that NatTel's first amended complaint -- not the
second amended complaint -- is the operative complaint, and denied
ODC's and SAC's motions to dismiss the original complaint as moot.
Judge Shiff directed the parties to comply with the Bahamian
International Business Companies Act regarding the rights of
dissenters to the sale of a company, and scheduled a hearing on
May 23, 2012, at 10:00 a.m., to hear arguments on whether to
compel arbitration regarding the application of the IBCA in the
case. The defendants have until May 2 to file memoranda in
support of arbitration, if any. NatTel has until May 16 to file
its response, if any. The Court deferred ruling on SAC's request
to abstain or, in the alternative, to dismiss.
NatTel LLC claims that its only property is its 667 shares in
Oceanic Digital Communications, Inc. Upon learning of the
contemplated sale of all of ODC's assets, NatTel commenced the
adversary proceeding seeking, inter alia, a declaratory judgment
regarding the value of its shares. The ODC and the SAC defendants
object and have moved for its dismissal, relying on the res
judicata and collateral estoppel effects of prior litigation and
arbitration.
On Oct. 29, 2010, and Feb. 9, 2011, NatTel filed motions for
permission to file a first and a second amended complaint. On
Feb. 7, 2011, NatTel filed a "Notice of Partial Dismissal"
pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(i) and
Federal Rule of Bankruptcy Procedure 7041 to dismiss the Action as
it related to ODC. ODC and SAC both object to the motions to
amend. ODC also moves to vacate the Notice of Partial Dismissal
and moves to compel arbitration; SAC joins in both those motions.
SAC also requests the court to abstain from ruling on the Action.
NatTel is a wireless telecommunications holding company organized
under the laws of Delaware as a limited liability company. Its
principals are Jack Robinson and Daniel Carpenter. NatTel created
ODC, which was originally organized under the laws of Delaware,
but, sometime between 1998 and 2000, it became and remains
incorporated as an international business company under the laws
of the Commonwealth of the Bahamas. NatTel's principals were
board members and officers of ODC. ODC was created for the
purpose of acquiring cellular telecommunications licenses and
operations in the Caribbean and Latin America. In 1998, when it
was ODC's majority shareholder, NatTel began negotiations with
SAC, a multi-billion dollar hedge fund, to acquire capital for
those acquisitions. SAC subsequently invested $100 million and
became ODC's majority and controlling shareholder. In early 2000,
having a different vision for ODC, SAC caused NatTel's principals
to be removed as officers and from the board of ODC. That event
was the impetus for the subsequent 10 years of litigation.
A copy of Judge Shiff's April 16, 2012 Memorandum of Decision &
Order is available at http://is.gd/AUB82zfrom Leagle.com.
NatTel LLC filed for Chapter 11 bankruptcy (Bankr. D. Conn. Case
No. 06-50421) in 2006.
NatTel is represented in the lawsuit by Seth L. Marcus, Esq. --
info@lmmlawfirm.com -- at Leffler Marcu & McCaffrey LLC, in New
York; and Jeffrey M. Sklarz, Esq. -- jsklarz@zeislaw.com -- at
Zeisler & Zeisler, P.C., in Bridgeport, Conn.
Julie A. Manning, Esq., and Robin G. Frederick, Esq. --
jmanning@goodwin.com and rfrederick@goodwin.com -- at Shipman &
Goodwin LLP represent S.A.C. Capital Advisors, LLC S.A.C. Capital
Management, LLC S.A.C. Capital Associates, LLC.
Patrick M. Birney, Esq. -- pbirney@rc.com -- at Robinson & Cole
LLP, in Hartford, Conn., argues for Oceanic Digital Commn's, Inc.
ODC St. Lucia Limited Oceanic Digital Jamaica Limited PCI Holdings
Ltd.
NATIONAL CINEMEDIA: Moody's Affirms Ba3 CFR, Rates Sr. Notes Ba2
----------------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to National
CineMedia's (NCM) $315 million 10-year senior secured notes, which
is the same rating as that assigned to the company's senior
secured credit facilities. NCM's Ba3 corporate family rating (CFR)
and probability of default (PDR) remain unchanged and were
affirmed as was the B2 rating assigned to the company's senior
unsecured notes due in 2021. NCM's SGL-2 speculative grade
liquidity rating (indicating good liquidity) was also affirmed.
The ratings outlook remains stable.
The CFR and PDR affirmation stems from the fact that the
transaction is approximately leverage neutral since $275 million
of the new notes issue will be applied to repay a portion of NCM's
term bank credit facility and a further $34 million will be used
to eliminate related swap amounts. Further, since there is no
change in available liquidity (albeit, as part of the transaction,
the maturity of the company's revolving bank credit facility is
being conditionally extended, which is positive), the SGL rating
remains unchanged and since the proportions of senior secured and
senior unsecured debt remain relatively unchanged, there is no
change for the ratings of either class of debt. It is noted
however, that with a substantial 77% of its debt being secured,
NCM has somewhat limited capacity to increase that proportion
without causing the entire senior secured tranche to be downgraded
to the level of its CFR, Ba3.
The following summarizes the rating actions and National
CineMedia's ratings:
Issuer: National CineMedia, LLC
Rating Actions:
Senior Secured Regular Bond/Debenture, assigned Ba2 (LGD3, 38%)
Senior Secured Bank Credit Facility, Affirmed at Ba2, with the
LGD assessment revised to (LGD3, 38% from (LGD3, 37%)
Senior Unsecured Regular Bond/Debenture, affirmed at B2 with
the LGD assessment revised to (LGD6, 90%) from (LGD5, 89%)
Corporate Family Rating, Affirmed at Ba3
Probability of Default Rating, Affirmed at Ba3
Speculative Grade Liquidity Rating, affirmed at SGL-2
Outlook Actions:
Outlook, affirmed at Stable
Ratings Rationale
National CineMedia LLC (NCM) has a Ba3 corporate family (CFR) and
probability of default rating (PDR), a stable ratings outlook, and
an SGL-2 speculative grade liquidity rating. The foundations of
the company's CFR and PDR are its stable and sustainable cash flow
stream and its stable leverage. NCM's leverage is 3.8x (December
2011) and is expected to be in the 3.5x-to-4.0x range over the
rating horizon. These positive attributes are offset by the
company's mandate to distribute all free cash flow to its members
and by the potential of results declining over time should ongoing
secular pressures stress the financial profiles of its cinema
exhibition partners.
Rating Outlook
The stable ratings outlook reflects expectations of relatively
stable revenue and EBITDA growth and leverage that is between 3.5x
to 4.0x.
What Could Change the Rating - Up
Given the combination of NCM's mandate to distribute all of its
free cash flow and the potential of a re-levering event, a ratings
upgrade is not anticipated. However, should NCM maintain TD/EBITDA
at less than 3.5x while committing to operate in such a range,
there is the potential of positive ratings pressure.
What Could Change the Rating - Down
Downward pressure on the rating may occur if NCM increased
borrowing to fund a special dividend, or were the company to
experience an operational set-back such that leverage rose to over
4.0x. Adverse liquidity developments or debt-financed acquisition
activity would also provide adverse ratings pressure.
National CineMedia's ratings were assigned by evaluating factors
that Moody's considers relevant to the credit profile of the
issuer, such as the company's (i) business risk and competitive
position compared with others within the industry; (ii) capital
structure and financial risk; (iii) projected performance over the
near to intermediate term; and (iv) management's track record and
tolerance for risk. Moody's compared these attributes against
other issuers both within and outside National CineMedia's core
industry and believes National CineMedia's ratings are comparable
to those of other issuers with similar credit risk. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009 (and/or) the Government-Related Issuers
methodology published in July 2010.
Corporate Profile
National CineMedia LLC (NCM) is headquartered in Centennial,
Colorado, and is a privately held joint venture operator of the
largest digital in-theatre network in North America. National
CineMedia, Inc. is NCM's publicly traded managing member (48.6%
interest). NCM distributes advertisements and other content
through its digital network, primarily through agreements with
founding members, Regal Entertainment Group (holds a 19.7%
ownership position in NCM), AMC Entertainment Inc. (holds an 15.5%
ownership position), and Cinemark, Inc. (holds a 16.2% ownership
position). NCM's mandate requires that it distribute all cash flow
that is not required for operational purposes to its owners.
NATIONAL CINEMEDIA: S&P Rates $315M Senior Unsecured Notes 'BB-'
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned NCM LLC's proposed
$315 million senior secured notes due 2022 its 'BB-' issue-level
rating (at the same level as S&P's 'BB-' corporate credit rating
on the company). "We also assigned the notes a recovery rating of
'3', indicating our expectation of meaningful (50% to 70%)
recovery for noteholders in the event of a payment default. The
company plans to use the proceeds from the transaction to
refinance a portion of its existing credit facilities and for swap
breakage fees and expenses. The proposed senior secured notes will
be secured by first-priority liens that will be pari passu with
the liens securing the existing senior secured credit facility,"
S&P said.
"All other ratings on the company, including our 'BB-' corporate
credit rating, remain unchanged. The rating outlook is stable. (We
rate NCM Inc. and operating subsidiary NCM LLC on a consolidated
basis)," S&P said
"The 'BB-' rating reflects our expectation that NCM should be able
to maintain leverage in the mid-3x area over the intermediate
term, despite its aggressive dividend policy. We consider the
company's business risk profile as 'fair', based on its
historically strong EBITDA margin and good market position. A high
dividend payout and minimal cash retention by operating subsidiary
NCM LLC underpin our view that the company's financial risk
profile is 'aggressive.' Although the company's credit metrics
deteriorated slightly in the fourth quarter of 2011 because of
weak advertising demand, we expect revenue and EBITDA to grow at a
low- to mid-single-digit percentage rate in 2012," S&P said.
"Operating subsidiary NCM LLC is the leading in-theater
advertising network in North America. Our assessment of NCM's
business risk as 'fair' stems from the company's high EBITDA
margin and long-term contracts with the three largest national
movie exhibitors in the U.S.: American Multi-Cinema Inc., a wholly
owned subsidiary of AMC Entertainment Inc.; Regal Cinemas Corp., a
wholly owned subsidiary of Regal Entertainment Group; and Cinemark
USA Inc., a wholly owned subsidiary of Cinemark Holdings Inc.
These contracts provide significant barriers to entry to new
entrants in addition to revenue visibility. A key risk is that
once NCM is able to sell all or nearly all of its inventory,
declining theater attendance could hurt performance, because
national advertisers pay NCM based on a cost per thousand viewers
(CPM) ad pricing metric. Unlike most other advertising media, NCM
has minimal ability to expand its ad inventory and, therefore,
relies on inventory utilization, ad rate increases, and winning
theater chain clients from its key competitor to generate revenue
growth," S&P said.
"Under our base-case scenario, we expect revenue and EBITDA to
grow at a low- to mid-single-digit percentage rate in 2012,
reflecting continued expansion of the company's screen count,
resulting in a higher number of advertising impressions and an
increase in access fees that NCM pays to theaters. We expect NCM's
attendance base to increase at a mid-single-digit rate, and that
national advertising rates will increase in the mid- to high-
single-digit range for the year. Most of the advertising rate
growth will likely take place in the second half of the year
because of easier comparisons and potentially higher demand if
political advertising on TV displaces core advertising in that
medium. We also expect that the company will continue to grow
local advertising rates by expanding into more profitable regional
advertising. We estimate that the company's EBITDA margin will
decline about 200 basis points in 2012 (but will still remain very
high) because of growth in lower-margin new network affiliates and
a contractual increase in theater access fees," S&P said.
"Debt to EBITDA for the year ended Dec. 31, 2011 (pro forma for
the proposed transaction) increased slightly to 3.7x, from 3.5x in
the prior-year period. Although this is slightly lower than the 4x
to 5x range of debt leverage that we regard as indicative of an
'aggressive' financial risk profile, the company distributes
nearly all of its free cash flow to shareholders and its founding
members as long as leverage remains below 6.5x. Pro forma EBITDA
coverage of interest declined to 4.2x from 5.1x in the prior-year
period as a result of higher interest expense on the proposed
notes and the notes that the company issued in the third quarter
of 2011. We expect debt leverage to remain in the mid-3x area,
based on our outlook for 2012 revenue and EBITDA growth," S&P
said.
NATIONAL ENVELOPE: April 26 Hearing on Abandonment of Plant
-----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the Chapter 7 trustee liquidating the remnants of
National Envelope Corp. lost the first skirmish in a battle with
state and federal environmental regulators regarding a
contaminated plant in New Jersey the company was unable to sell.
U.S. Bankruptcy Judge Peter J. Walsh ruled late last month that
whatever remains from the $2 million from the wind-down budget of
the Debtor must be spent on remediation.
The report recounts that when NEC sold the bulk of its assets, $9
million was set aside to pay expenses in winding down the
remainder of the business and the Chapter 11 case. In the wind-
down budget, $2 million was earmarked for environmental
remediation. No one would purchase the New Jersey plant on
account of contamination.
The judge will hold another hearing on April 26 to decide if the
trustee can abandon the plant.
The report also relates that the ruling was in response to the
trustee's motion for permission to abandon the plant and a
declaration that the remaining money in the wind-down account was
free for use in paying creditors and other claims against the
bankrupt estate. State and federal regulators objected,
contending that a case decided in 1986 by the U.S. Supreme Court
doesn't allow a bankrupt company to walk away from environmental
pollution by abandoning an asset. In the NEC case, the dispute
involves about $5 million that the trustee still holds after the
sale of the business where a buyer took everything aside from the
one contaminated plant. Federal regulators said $1.5 million
remains from the portion earmarked for environmental pollution.
About NEC Holdings
Uniondale, New York-based National Envelope Corporation was
the largest manufacturer of envelopes in the world with
14 manufacturing facilities and 2 distribution centers and
approximately 3,500 employees in the U.S. and Canada.
NEC Holdings Corp., together with affiliates, including National
Envelope Inc., filed for Chapter 11 (Bankr. D. Del. Lead Case No.
10-11890) on June 10, 2010. Kara Hammond Coyle, Esq., at Young
Conaway Stargatt & Taylor LLP, served as bankruptcy counsel to the
Debtors. David S. Heller, Esq., at Josef S. Athanas, Esq., and
Stephen R. Tetro II, Esq., at Latham & Watkins LLP, served as
co-counsel. The Garden City Group is the claims and notice agent.
Bradford J. Sandler, Esq., and Robert J. Feinstein, Esq., at
Pachuiski Stang Ziehl & Jones LLP, represented the Official
Committee of Unsecured Creditors. Morgan Joseph & Co., Inc.,
served as the financial advisor to the Committee. NEC Holdings
estimated assets and debts of $100 million to $500 million in its
Chapter 11 petition.
In September 2010, National Envelope's key assets were bought in
a roughly $208 million deal by The Gores Group LLC, a West Coast
private equity firm that manages about $2.9 billion of capital.
Judge Peter J. Walsh on Dec. 12, 2011, approved NEC Holdings'
request to convert its Chapter 11 case into a full liquidation.
Judge Walsh approved NEC's October request to liquidate the
remainder of its assets, which the company said was necessary
because it was quickly running out of cash to cover the remaining
claims against it, including the cleanup of a New Jersey
manufacturing site.
NAVARRE INDUSTRIES: Files for Chapter 11 in Ohio
------------------------------------------------
Navarre, Ohio-based Navarre Industries Inc. filed a Chapter 11
petition (Bankr. N.D. Ohio Case No. 12-61113) on April 18, 2012
According to http://www.navarreindustries.com/ the Debtor is a
manufacturer of aluminum extrusions for the petroleum, lighting,
medical and sign industries. The Debtor estimated under
$1 million in assets and up to $10 million in liabilities as of
the Chapter 11 filing.
The Debtor on the Petition Date filed applications to employ
Anthony J. DeGirolamo as counsel and The Phillips Organization as
accountant and financial advisor.
The Debtor also filed a variety of first day motions, including
requests to pay prepetition claims of employees, pay prepetition
trust fund taxes, and obtain confirmation that postpetition goods
are given administrative expense priority status.
A hearing is schedule April 20, 2012.
Judge Russ Kendig presides over the Chapter 11 case.
Paul Miller, as president and owner of 100% of the stock --
pmiller@navarreindustries.com -- signed the Chapter 11 petition.
The Debtor's schedules of assets and liabilities, statement of
financial affairs and other incomplete filings are due May 2,
2012. The Debtor has filed a motion to extend the deadline to
file the schedules and other required information.
NEW LEAF: Delays 2011 Annual Report
-----------------------------------
New Leaf Brands, Inc., requires additional time to complete the
review of its financial statements and disclosures in order to
complete the Form 10-K for the period ended Dec. 31, 2011. The
Company expects to file its Form 10-K within fifteen calendar days
of the prescribed due date.
About New Leaf Brands
Old Tappan, New Jersey-based New Leaf Brands, Inc., develops,
markets and distributes healthy and functional ready-to-drink
("RTD") beverages. The Company distributes its products through
independent distributors both internationally and domestically.
For the nine months ended Sept. 30, 2011, the Company reported a
net loss of $4.82 million on $1.47 million of net sales, compared
with a net loss of $7.18 million on $3.67 million of net sales for
the same period during the prior year.
The Company's balance sheet at Sept. 30, 2011, showed $3.03
million in total assets, $5.83 million in total liabilities and a
$2.80 million total stockholders' deficit.
As reported by the TCR on June 2, 2011, Eisner Amper LLP, in New
York, N.Y., expressed substantial doubt about the Company's
ability to continue as a going concern, following the Company's
results for the fiscal year ended Dec. 31, 2010. The independent
auditors noted that the Company has suffered recurring losses from
operations, has a working capital deficiency, was not in
compliance with certain financial covenants related to debt
agreements, and has a significant amount of debt maturing in 2011.
NCO GROUP: Completes Merger with APAC, Has 1-Bil. Credit Facility
-----------------------------------------------------------------
NCO Group, Inc., has completed the merger with APAC Customer
Services, Inc. In connection with the Merger, the Company entered
into a new credit facility of approximately $1 billion, including
a $120 million revolving credit facility.
APAC and NCO will both continue as leading brands in the global
BPO market, operating under the holding company Expert Global
Solutions, Inc. With combined revenues of approximately
$2 billion, APAC and NCO will be a fully scaled BPO provider in
both the CRM and ARM segments, serving 40% of the Fortune 500.
In addition to the merger, the Company has created a long term
capital structure that will provide further expanded credit
availability and debt maturities extending to 2017 and beyond.
Based on previous announcements by Moody's Investors Service and
Standard & Poor's, the Company expects that its current corporate
ratings will be upgraded two levels to new ratings of "B2" and
"B", respectively.
Commenting on the merger and new financing structure of the
company, Ron Rittenmeyer, CEO, Expert Global Solutions, stated,
"As a result of this merger, we now have one of the most
comprehensive, unique, and compelling BPO offerings in the
marketplace. Our clients have the benefit of a fully scaled and
global partner serving all aspects of the CRM and ARM industry.
The EGS worldwide team of associates is highly trained and focused
on our customer's quality, compliance and experience."
A summary of some of the key attributes of the combined company
are:
* Combined revenues of approximately $2 billion
* Over 40,000 employees
* 14 countries
* Over 120 contact centers
* On-shore, nearshore, offshore, work @ home solutions
* Clients include over 40% of Fortune 500
* Vertical expertise and BPO domain experience in many
markets, including: Financial Services, Insurance,
Healthcare, Pharmaceuticals, Transportation, Logistics,
Government, Telecommunications, Cable, Technology, Retail,
Education, Utilities, among others
About NCO Group Inc.
Based in Horsham, Pennsylvania, NCO is a global provider of
business process outsourcing services, primarily focused on
accounts receivable management and customer relationship
management. NCO has over 25,000 full and part-time employees who
provide services through a global network of over 100 offices.
The company is a portfolio company of One Equity Partners and
reported revenues of about $1.2 billion for the twelve month
period ended Sept. 30, 2007.
The Company also reported a net loss of $104.49 million on
$1.15 billion of total revenues for the nine months ended
Sept. 30, 2011, compared with a net loss of $73.45 million on
$1.18 billion of total revenues for the same period during the
prior year. The Company reported a net loss of $155.71 million in
2010, compared with a net loss of $88.14 million in 2009.
The Company's balance sheet at Sept. 30, 2011, showed
$1.12 billion in total assets, $1.14 billion in total liabilities,
and a $17.89 million total stockholders' deficit.
* * *
In December 2011, Standard & Poor's Ratings Services affirmed its
'CCC+' issuer credit rating on NCO Group Inc. and removed the
rating from CreditWatch with positive implications.
"The rating action follows NCO's recent announcement that it is
not proceeding with the previously proposed $300 million notes
offering that it planned to use, in conjunction with a proposed
$870 million new senior secured credit facility, to repay its
existing debt and to help finance its merger with APAC Customer
Services Inc.," said Standard & Poor's credit analyst Kevin Cole.
Concurrent with the closing of the debt offerings, it was planning
to change its name to Expert Global Solutions Inc.
NEXT 1 INTERACTIVE: Issues $250,000 Convertible Promissory Note
---------------------------------------------------------------
Next 1 Interactive, Inc., on March 28, 2012, issued a secured
convertible promissory note in the principal amount of $250,000 to
an accredited investor. This note:
* matures on Sept. 30, 2012;
* bears interest at the rate of 12% per year, payable
quarterly;
* is secured by all of the assets of the Company;
* may be exchanged for shares of the Company's Series B
Preferred Stock;
* is convertible into shares of the Company's common stock at
a conversion price of $0.012.
On April 3, 2012, the Company entered into a share exchange
agreement with Webdigs, Inc., and Mark A. Wilton. Pursuant to the
Exchange Agreement, the Company agreed to exchange 100,000,000
shares of common stock of its wholly-owned subsidiary Next One
Realty, Inc. (representing 100% of the issued and outstanding
capital stock thereof), for newly issued shares of Series A
Convertible Preferred Stock of Webdigs representing, on an as-
converted and fully diluted basis, approximately 93% of the issued
and outstanding shares of common stock of Webdigs. Effective upon
the closing of the Share Exchange:
(i) the Company will grant a security interest in the Preferred
Shares to Mark A. Wilton to secure performance of the
Company's obligations under three promissory notes, issued
by the Company to Mr. Wilton, on April 15, 2011, in the
original principal amounts of $4,388,526, $1,500,000 and
$211,000, respectively; and
(ii) Mr. Wilton will release any claim of lien under Article 9
of the Uniform Commercial Code with regard to the
Subsidiary Shares.
The closing of the Share Exchange is subject to certain conditions
including Webdigs' bringing its Securities and Exchange Commission
filings current and satisfactory completion of due diligence by
the Company and Webdigs.
In connection with the Exchange Agreement, the Company entered
into a letter agreement with Mr. Wilton, pursuant to which:
* $91,000 of the initial $200,000 invested in the Company
pursuant to the financing plan set forth in Exhibit B to
the Exchange Agreement will be paid to Mr. Wilton as the
April 15, 2012, interest payment on the Wilton Notes.
* Until Oct. 15, 2012, Mr. Wilton may exchange the Notes for
newly created Series D Convertible Preferred Stock of the
Company, which will be convertible into common stock of the
Company at a conversion price of $0.01 per share, or common
stock of Next One Realty, Inc., at a conversion price of
$0.10 per share.
* The maturity date of each of the Notes was extended to
Oct. 15, 2012.
About Next 1 Interactive
Weston, Fla.-based Next 1 Interactive, Inc., is an interactive
media company that focuses on video and media advertising over
Internet, Mobile and Television platforms. Historically, the
Company operated through two divisions, media and travel. A third
(real estate) division is anticipated to be launching during the
fourth quarter of fiscal 2012.
For the nine months ended Nov. 30, 2011, the Company has reported
a net loss of $8.0 million on $1.1 million of revenues, compared
with a net loss of $10.2 million on $1.9 million of revenues for
the nine months ended Nov. 30, 2010.
The Company's balance sheet at Nov. 30, 2011, showed $3.0 million
in total assets, $13.0 million in current liabilities, and a
stockholders' deficit of $10.0 million.
As reported in the TCR on June 22, 2011, Sherb & Co., LLP, in Boca
Raton, Fla., expressed substantial doubt about Next 1
Interactive's ability to continue as a going concern, following
the Company's results for the fiscal year ended Feb. 28, 2011.
The independent auditors noted that the Company had an accumulated
deficit of $53.2 million and a working capital deficit of
$13.4 million at Feb. 28, 2011, net losses for the year ended
Feb. 28, 2011, of $23.2 million and cash used in operations during
the year ended Feb. 28, 2011, of $9.6 million.
NORTHCLIFF COLONY: Case Summary & 19 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Northcliff Colony Associates, Ltd.
WL Norton Agency, Inc., General Partner
434 Green Street
Gainesville, GA 30501
Bankruptcy Case No.: 12-21435
Chapter 11 Petition Date: April 16, 2012
Court: United States Bankruptcy Court
Northern District of Georgia (Gainesville)
Debtor's Counsel: Bradley J. Patten, Esq.
SMITH, GILLIAM, WILLIAMS AND MILES, P.A.
P.O. Box 1098
Gainesville, GA 30503
Tel: (770) 536-3381
E-mail: bpatten@sgwmfirm.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 19 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/ganb12-21435.pdf
The petition was signed by John Pace, CFO.
NORTHCORE TECHNOLOGIES: Incurs C$3.9 Million Loss in 2011
---------------------------------------------------------
Northcore Technologies Inc. filed with the U.S. Securities and
Exchange Commission its annual report on Form 20-F disclosing a
loss and comprehensive loss of C$3.93 million on C$785,000 of
revenue in 2011, compared with a loss and comprehensive loss of
C$3.03 million on C$582,000 of revenue in 2010.
The Company's balance sheet at Dec. 31, 2011, showed c$2.90
million in total assets, C$415,000 in total liabilities and C$2.49
million in shareholders' equity.
The Company has not yet realized profitable operations and has
relied on non-operational sources of financing to fund operations.
The Company's ability to continue as a going concern will be
dependent on management's ability to successfully execute its
business plan including a substantial increase in revenue as well
as maintaining operating expenses at or near the same level as
2011. The Company cannot provide assurance that it will be able
to execute on its business plan or assure that efforts to raise
additional financings will be successful.
A copy of the Form 20-F is available for free at:
http://is.gd/Y23cIk
About Northcore
Toronto, Ontario-based Northcore Technologies Inc. (TSX: NTI; OTC
BB: NTLNF) -- http://www.northcore.com/-- provides a Working
Capital Engine(TM) that helps organizations source, manage,
appraise and sell their capital equipment. Northcore offers its
software solutions and support services to a growing number of
customers in a variety of sectors including financial services,
manufacturing, oil and gas and government.
Northcore owns 50% of GE Asset Manager, LLC, a joint business
venture with GE. Together, the companies work with leading
organizations around the world to help them liberate more capital
value from their assets.
NORTHCORE TECHNOLOGIES: Gets Continued Listing Approval from TSX
----------------------------------------------------------------
Northcore Technologies Inc. announced that the Toronto Stock
Exchange has concluded its review with respect to continued
listing of its securities on the TSX. The outcome of the process
was the confirmation that Northcore has met the listing
requirements and is confirmed as a member in good standing of the
TSX group of companies.
"We are pleased that the TSX has confirmed our compliance with the
continued listing requirements," said Amit Monga, CEO of Northcore
Technologies. "We thank our shareholders for their faith in the
company during this process. The revenue growth achieved in
previous quarters validates our new business strategy and forms a
solid foundation for creating long term shareholder value."
About Northcore
Toronto, Ontario-based Northcore Technologies Inc. (TSX: NTI; OTC
BB: NTLNF) -- http://www.northcore.com/-- provides a Working
Capital Engine(TM) that helps organizations source, manage,
appraise and sell their capital equipment. Northcore offers its
software solutions and support services to a growing number of
customers in a variety of sectors including financial services,
manufacturing, oil and gas and government.
Northcore owns 50% of GE Asset Manager, LLC, a joint business
venture with GE. Together, the companies work with leading
organizations around the world to help them liberate more capital
value from their assets.
The Company reported a loss and comprehensive loss of C$3.93
million on C$785,000 of revenue in 2011, compared with a loss and
comprehensive loss of C$3.03 million on C$582,000 of revenue in
2010.
The Company's balance sheet at Dec. 31, 2011, showed c$2.90
million in total assets, C$415,000 in total liabilities and C$2.49
million in shareholders' equity.
The Company has not yet realized profitable operations and has
relied on non-operational sources of financing to fund operations.
The Company's ability to continue as a going concern will be
dependent on management's ability to successfully execute its
business plan including a substantial increase in revenue as well
as maintaining operating expenses at or near the same level as
2011. The Company cannot provide assurance that it will be able
to execute on its business plan or assure that efforts to raise
additional financings will be successful.
NORTHERN CALIFORNIA: Monterey Bank Owner Has $13.6-Mil. Net Loss
----------------------------------------------------------------
Northern California Bancorp, Inc., filed its annual report on Form
10-K, reporting a net loss of $13.65 million on net interest
income of $7.15 million for 2011, compared with a net loss of
$706,000 on net interest income of $6.68 million for 2010.
The Company's balance sheet at Dec. 31, 2011, showed
$245.68 million in total assets, $242.08 million in total
liabilities, and stockholders' equity of $3.60 million.
Monterey, Calif.-based Northern California Bancorp owns 100% of
the stock of Monterey County Bank, Monterey, California, The
Corporation, as a bank holding company, engages in commercial
banking through the Bank.
The Bank is subject to a Consent Order that, among other things,
establishes higher minimum capital requirements than those
established under the prompt corrective action framework. As of
Dec. 31, 2011, the most recent notification from the Federal
Deposit Insurance Corporation (FDIC) categorized the Bank as
adequately capitalized under the regulatory framework for prompt
corrective action. Although the Bank's capital ratios meet the
definition of "well capitalized", the FDIC is permitted, by
regulation, to lower an institution's capital adequacy rating by
one level, if it determines the institution has a higher risk
profile. The Bank received such notification from the FDIC during
2010.
A copy of the Form 10-K is available for free at:
http://is.gd/5Rh5Hf
NUTRA PHARMA: Delays 2011 Annual Report for Lack of Funds
---------------------------------------------------------
Nutra Pharma Corp was unable to file its Form 10-K for the period
ended Dec. 31, 2011, within the prescribed period due to lack of
funds.
The Company anticipates a significant change in the results of
operations for the year ended Dec. 31, 2011, as a result of
returns on sales previously reported during fiscal year 2011 and
in the Company's Form 10-Q for the 3 month period ending
Sept. 30, 2011. For the period ended Sept. 30, 2011, the Company
reported total sales of $651,279. As a result of product returns
during the current quarter ending March 31, 2012, sales for the
year ended Dec. 31,2011, are estimated at approximately $139,744.
The Company also anticipates reporting a significant decrease in
sales from the year ended Dec. 31, 2011, as compared to sales for
the year ended Dec. 31, 2010. The Company estimates sales for
the year ended Dec. 31, 2011, at approximately $139,744
while reported sales for the year ended Dec. 31, 2010, were
reported in the Company's Form 10-K filing as $1,432,056, thereby
representing a 90% decrease in sales.
About Nutra Pharma
Coral Springs, Florida-based Nutra Pharma Corp. is a holding
company that owns intellectual property and operations in the
biotechnology industry. Nutra Pharma incorporated under the laws
of the state of California on Feb. 1, 2000, under the original
name of Exotic-Bird.com.
Through its wholly-owned subsidiaries, ReceptoPharm, Inc., and
Designer Diagnostics, Inc., the Company conducts drug discovery
research and development activities. In October 2009, the Company
launched its first consumer product called Cobroxin, an over-the-
counter pain reliever designed to treat moderate to severe chronic
pain. In May 2010, the Company launched its second consumer
product called Nyloxin, an over-the-counter pain reliever that is
a stronger version of Cobroxin and is designed to treat severe
chronic pain.
The Company reported a net loss of $1.9 million for the nine
months ended Sept. 30, 2011, compared with a net loss of $2.3
million for the same period of 2010.
The Company's balance sheet at Sept. 30, 2011, showed $1.5 million
in total assets, $3.9 million in total liabilities, and a
stockholders' deficit of $2.4 million.
Kingery & Crouse, P.A., in Tampa, Florida, expressed substantial
doubt about Nutra Pharma's ability to continue as a going concern,
following the Company's 2010 results. The independent auditors
noted that the Company has no cash as of Dec. 31, 2010, has
suffered recurring losses from operations and has ongoing
requirements for additional capital investment.
ONCURE MEDICAL: S&P Lowers Corporate Credit Rating to 'B-'
----------------------------------------------------------
Standard & Poor's Ratings Services lowered its 'B' corporate
credit rating on OnCure Medical Corp. to 'B-'. "The outlook
remains stable. We also lowered the issue-level rating on the
company's second-lien notes to a 'B-' from a 'B', in accordance
with our notching criteria. The '4' recovery rating on the notes
remains unchanged," S&P said.
"These actions reflect financial performance below our
expectations for 2011, and minimal forecasted improvements in
leverage levels and cash flow over the next year," said Standard &
Poor's credit analyst John Bluemke.
"The rating on Englewood, Colo.-based OnCure Medical Corp. reflect
Standard & Poor's Ratings Services' assessment of the company's
business risk profile as 'vulnerable' and the financial risk
profile as 'highly leveraged.' We expect OnCure to remain subject
to significant reimbursement risk such as the recent Medicare
payment cut to radiation treatment providers for 2012. We expect
OnCure's total revenue to decrease by 2.5% for 2012, primarily
from the impact of the Medicare rate cut. EBITDA margins are
projected to decrease by 200-250 basis points, because we consider
the majority of OnCure's expenses as fixed in nature and difficult
to rationalize to lower revenue levels. We do not expect OnCure to
generate positive discretionary cash flow, with low-single-digit
operating cash flow used to fund approximately $5 million of
annual maintenance capital expenditures. These projections assume
OnCure can maintain its relationship with ICON. Our expectations
incorporate the risk of tightened liquidity, if OnCure experiences
a drop in EBITDA requiring a draw on its revolving credit
facility. A fixed-charge covenant will be in effect upon drawing
on the facility, which would be pressured if OnCure sees a 20%
drop in EBITDA," S&P said.
"We view OnCure's financial risk profile as highly leveraged,
reflected in our forecast of adjusted debt to EBITDA of about 8.2x
at the end of 2012, up from 7.6 at 2011, and materially higher
than our original expectation of leverage around 5x. We have not
forecast any acquisition activity; however, it remains a
possibility as OnCure tries to expand its footprint. Our forecast
is for negative free operating cash flow for 2012, compared to our
prior-year estimate of approximately $6 million. We do not expect
any shareholder dividends," S&P said.
"We view the company's business risk as vulnerable; OnCure
operates in the highly fragmented and competitive radiation
therapy (oncology) market, has a modest revenue base of only $100
million with geographic, contract, and technology concentration,
and faces ongoing reimbursement concerns," S&P said.
"OnCure provides outpatient radiation oncology services in its 38
treatment centers in three states (16 in California, 18 in
Florida, and four in Indiana). Some group concentration exists
with the top two group practices representing 25% and 13% of
revenues, respectively. ICON, the second-largest physician group
notified OnCure last July that it intended to terminate its MSA
with OnCure in fall 2011. The two sides are still performing under
the terms of the contract as they work toward a resolution. Our
base-case scenario contemplates an eventual renegotiation with
ICON, with a modest negative impact in 2012. No other material
MSAs are up for renewal until 2016," S&P said.
PACIFIC GOLD: Incurs $1.4 Million Net Loss in 2011
--------------------------------------------------
Pacific Gold Corp. filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss of
$1.38 million on $121,401 of total revenue in 2011, compared with
a net loss of $985,278 on $5,836 of total revenue in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $1.82 million
in total assets, $4.70 million in total liabilities and a $2.88
million total stockholders' deficit.
For 2011, Silberstein Ungar, PLLC, in Bingham Farms, Michigan,
expressed substantial doubt about the Company's ability to
continue as a going concern. The independent auditors noted that
the Company has incurred losses from operations, has negative
working capital and is in need of additional capital to grow its
operations so that it can become profitable.
A copy of the Form 10-K is available for free at:
http://is.gd/PXuZuk
About Pacific Gold
Las Vegas, Nev.-based Pacific Gold Corp. is engaged in the
identification, acquisition, and development of prospects believed
to have gold mineralization. Pacific Gold through its
subsidiaries currently owns claims, property and leases in Nevada
and Colorado.
OVERLAND STORAGE: Files Amendment No. 2 to Form S-3 Prospectus
--------------------------------------------------------------
Overland Storage, Inc., filed with the U.S. Securities and
Exchange Commission amendment no. 2 to the Form S-3 relating to
the offer and sale of up to an aggregate of 5,000,000 shares of
the Company's common stock from time to time in one or more
offerings and in amounts, at prices and on terms that we will
determine at the time of the offering.
The Company will provide the specific terms of the shares of its
common stock, including their offering price and the methods by
which the Company will sell the shares of its common stock, in
supplements to this prospectus. The Company may offer and sell
the shares of its common stock on an immediate, continuous or
delayed basis directly to investors or through underwriters,
dealers or agents, or through a combination of these methods.
The Company's common stock is traded on The NASDAQ Capital Market
under the symbol "OVRL". On Feb. 16, 2012, the last reported sale
price for the Company's common stock on The NASDAQ Capital Market
was $2.04 per share. Any shares of the Company's common stock
sold pursuant to a prospectus supplement will be listed on The
NASDAQ Capital Market.
A copy of the amended prospectus is available for free at:
http://is.gd/eGk1vq
About Overland Storage
San Diego, Calif.-based Overland Storage, Inc. (Nasdaq: OVRL) --
http://www.overlandstorage.com/-- is a global provider of unified
data management and data protection solutions designed to enable
small and medium enterprises (SMEs), corporate departments and
small and medium businesses (SMBs) to anticipate and respond to
change.
The Company reported a net loss of $14.50 million on $70.19
million of net revenue for the fiscal year ended June 30, 2011,
compared with a net loss of $12.96 million on $77.66 million of
net revenue during the prior fiscal year.
Moss Adams LLP, in San Diego, California, noted that the Company's
recurring losses and negative operating cash flows raise
substantial doubt about the Company's ability to continue as a
going concern.
PAYMENT DATA: Reports $351,800 Net Income in 2011
-------------------------------------------------
Payment Data Systems, Inc., filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing net
income of $351,848 on $4.81 million of revenue in 2011, compared
with a net loss of $464,168 on $2.61 million of revenue in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $4.90 million
in total assets, $4.29 million in total liabilities, all current,
and $611,307 in total stockholders' equity.
A copy of the Form 10-K is available for free at:
http://is.gd/bsgcZY
About Payment Data Systems
San Antonio, Tex.-based Payment Data Systems, Inc. provides
integrated electronic payment processing services to merchants and
businesses, including credit and debit card-based processing
services and transaction processing via the Automated
Clearinghouse Network. The Company also operates an online
payment processing service for consumers under the domain name
http://www.billx.com/through which consumers can pay anyone.
As reported by the TCR on April 25, 2011, Akin, Doherty, Klein &
Feuge, P.C., San Antonio, Texas, expressed substantial doubt about
the Company's ability to continue as a going concern, following
the 2010 financial results. The independent auditors noted that
the Company has incurred substantial losses since inception, which
has led to a deficit in working capital.
Akin Doherty did not include a "going concern" qualification in
its report on the Company's 2011 financial results.
PINNACLE AIRLINES: Spanjers Replaces Menke as CEO & President
-------------------------------------------------------------
Pinnacle Airlines Corp. on April 19, 2012, said Sean E. Menke was
resigning from his positions as President, Chief Executive Officer
and Director of the Company, effective June 1, 2012.
John Spanjers will take over as the Company's President and Chief
Executive Officer, effective June 1, 2012.
Mr. Spanjers, 57, has served as the Chief Operating Officer of the
Company since October 1, 2011. Prior to that, Mr. Spanjers served
as President of Mesaba Aviation, Inc., a wholly owned subsidiary
of the Company, since 2002. Mr. Spanjers joined Mesaba in 1999 as
Vice President of Flight Operations. Before joining Mesaba, Mr.
Spanjers was the Director of Performance Engineering for Northwest
Airlines, and held various other positions within the System
Operations Control organization at Northwest since June 1998.
Prior to that, Mr. Spanjers held various operational positions
within the regional and charter airline industry. Mr. Spanjers
received a Bachelor of Science degree from the University of
Minnesota.
On April 19, 2012, the Company entered into a Management
Compensation Agreement with Mr. Spanjers, which replaces Mr.
Spanjers' previous agreement with the Company.
The term of the Agreement begins on June 1, 2012, and ends on the
date Mr. Spanjers' employment terminates. The Agreement
establishes the initial annual base salary of Mr. Spanjers at
$525,000, subject to review on an annual basis. Mr. Spanjers is
eligible to participate in the Company's Annual Bonus Program, and
will participate in the Company's Long-Term Incentive Program.
The Agreement provides that Mr. Spanjers is eligible to
participate in the same benefit programs that the Company provides
to its other employees or executive employees.
Upon the termination of Mr. Spanjers' employment due to death or
disability, the Company will pay Mr. Spanjers his accrued and
unpaid base salary and all amounts due under the terms of any
benefit plans. In addition, Mr. Spanjers' rights under any
compensation or benefits programs will become vested and any
restrictions on restricted stock, stock options or contractual
rights will be removed.
The Company may terminate Mr. Spanjers' employment with or without
cause, as defined in the Agreement. If Mr. Spanjers is terminated
for cause or if he voluntarily resigns, the Company will have no
further obligations to Mr. Spanjers, other than accrued
obligations and standard COBRA benefits. If Mr. Spanjers is
terminated without cause or resigns with good reason, as defined
in the Agreement, the Company will pay Mr. Spanjers (i) any
accrued obligations, including salary and bonus, and (ii) an
amount equal to two times the sum of his base salary and target
incentive bonus, in equal installments at regular pay intervals
over 24 months.
In addition, Mr. Spanjers' rights under any compensation or
benefits programs will become vested and any restrictions on
restricted stock, stock options or contractual rights will be
removed. Finally, the Company will compensate Mr. Spanjers for
any transition expenses in the amount of $60,000. If Mr. Spanjers
remains employed by the Company for six months following a change
in control, Mr. Spanjers will be entitled to terminate his
employment without good reason, but receive the payment and
benefit obligations due in the case of his resignation with good
reason.
The Agreement contains confidentiality, non-competition, and non-
disparagement provisions.
According to the Company's news statement, Mr. Menke has chosen to
resign from the company on June 1 and will work closely with Mr.
Spanjers and the other members of Pinnacle's leadership team to
support a seamless transition over the next five weeks. Pinnacle
does not anticipate this transition will impact the timeline of
the company's Chapter 11 proceedings or Pinnacle's ability to
successfully restructure and emerge from Chapter 11.
"John brings a strong and proven track record of airline
leadership," said Donald J. Breeding, Chairman of the Board of
Pinnacle Airlines Corp. "Given his prior Chapter 11 experience,
John is particularly well-suited to lead Pinnacle's ongoing
turnaround efforts and has been actively involved in many of the
key initiatives and negotiations during our restructuring
process."
"Pinnacle has very talented employees and a strong leadership
team, and we remain focused on successfully emerging from Chapter
11," said Spanjers. "Our operating performance has remained
strong since filing for Chapter 11 protection, and we expect that
our operations, supported by a deep bench of talent and committed
employees, will continue moving forward."
As of Mr. Menke's departure on June 1, Pinnacle expects to have
achieved a number of important restructuring objectives during the
initial 60 days of its Chapter 11 proceedings, including having:
-- renegotiated key business agreements with Delta Air
Lines, United Airlines and EDC;
-- obtained final approval of its debtor-in-possession
financing;
-- completed the Section 1110 aircraft process;
-- received final court approval of its "First Day motions"
to help the company continue to operate in the ordinary
course; and
-- initiated a collegial and collaborative relationship with
the Unsecured Creditors Committee and its advisors.
Pinnacle also said the previously-announced search for a new Chief
Financial Officer is progressing.
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.
A seven-member official committee of unsecured creditors has been
appointed in the case.
PINNACLE AIRLINES: United Steelworkers Reviewing NMB Ruling
-----------------------------------------------------------
The United Steelworkers said that the union is reviewing the
National Mediation Board's decision that Pinnacle Airlines, Colgan
Air and now-defunct Mesaba Aviation are a single carrier and
remains focused on protecting the interests of all 2,600
Steelworkers at the bankrupt regional airlines.
The USW has long represented flight attendants at Pinnacle and
Colgan and today represents nearly 1,800 flight attendants at
those two airlines. The USW also represents 878 ground operations
employees of Pinnacle. Mesaba Aviation ceased operations in
January 2012. Pinnacle Airlines Corporation and its affiliates
filed Chapter 11 bankruptcy petitions in April 2012.
"Whether at the bargaining table, in federal bankruptcy court as a
voice for workers or in a representation election with another
union, the USW will continue to provide leadership, stability,
credibility and expertise," said USW International Vice President
Carol Landry, who heads the union's airline division. "The
diversity of our membership and our ability to mobilize on
multiple fronts at the same time sets us apart and makes the USW
stronger."
Landry pointed out that the USW has been engaged in talks with
Pinnacle and Colgan management since late last year when the
companies first announced their financial troubles.
"Throughout our dealings with Pinnacle and Colgan, the USW has had
to push back against the airlines' overreaching attempts to
restructure the businesses on the backs of workers alone," Landry
said.
"With thousands of jobs and the future of the company on the line,
we will not be divided or distracted from our members' needs,"
Landry said. "Our members deserve a fair contract that recognizes
the value they bring to the company every day."
"Unity and solidarity are still our brothers' and sisters' best
opportunity to survive Pinnacle's bankruptcy with their jobs,
wages and benefits intact," she said. "Continuity is the best way
to protect our members' interest in the bankruptcy process."
The USW represents about 850,000 working men and women in the
United States and Canada in a wide variety of industries, ranging
from glass making to mining, paper, steel, tire and rubber and
other manufacturing environments to the public sector, service and
health care industries.
About Pinnacle Airlines
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.
A seven-member official committee of unsecured creditors has been
appointed in the case.
PINNACLE AIRLINES: AFA Welcomes NMB's Single Carrier Ruling
-----------------------------------------------------------
The National Mediation Board declared that the
Pinnacle/Mesaba/Colgan merger has created a single carrier for
representation of over 1,300 Flight Attendants. Over 600 Flight
Attendants at Mesaba are currently represented by the Association
of Flight Attendants-CWA (AFA).
"This is an amazing opportunity for Flight Attendants at these
three carriers to unite and stand together for a better tomorrow.
We are excited to welcome our Pinnacle and Colgan flying partners
to the AFA family and look forward to the opportunity these Flight
Attendants have to stand together for the best protections for
Flight Attendants during bankruptcy and a better future at
Pinnacle," said Veda Shook, AFA International President.
During the next two-week "showing of interest" period, Pinnacle
and Colgan Flight Attendants will have the opportunity to sign
cards that indicate their interest in gaining AFA representation.
"AFA is the leading voice for Flight Attendants with experts on
staff and extraordinary resources focused entirely on the Flight
Attendant career. Our union will push back against corporate
efforts to make Flight Attendants pay for management failures.
AFA has the experience to meet these challenges, even in the most
difficult financial times. With AFA representation, we will work
together, unifying for the best future for all Flight Attendants
at the new Pinnacle Corporation," said Shook.
The Association of Flight Attendants is the world's largest Flight
Attendant union. Focused 100 percent on Flight Attendant issues,
AFA has been the leader in advancing the Flight Attendant
profession for over 65 years. Serving as the voice for Flight
Attendants in the workplace, in the aviation industry, in the
media and on Capitol Hill, AFA has transformed the Flight
Attendant profession by raising wages, benefits and working
conditions. Nearly 60,000 Flight Attendants at 21 airlines come
together to form AFA, part of the 700,000-member strong
Communications Workers of America (CWA), AFL-CIO.
About Pinnacle Airlines
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.
A seven-member official committee of unsecured creditors has been
appointed in the case.
PINNACLE ENTERTAINMENT: S&P Rates $325 Million Term Loan 'BB+'
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned Las Vegas-based
Pinnacle Entertainment Inc.'s $325 million term loan due 2019 its
issue-level rating of 'BB+' and a recovery rating of '1',
indicating its expectation of very high (90%-100%) recovery for
lenders in the event of a payment default. "We also assigned the
company's $325 million subordinated notes due 2022 our issue-level
rating of 'B' and a recovery rating of '6', indicating our
expectation of negligible (0-10%) recovery for lenders in the
event of a payment default. The company used the proceeds to
redeem its 7.5% senior subordinated notes due 2015, repay
borrowings under its revolving credit facility, and for general
corporate purposes," S&P said.
"We recently raised our rating on Pinnacle to 'BB-' from 'B+'
reflecting our belief that Pinnacle has sufficient financial
flexibility to complete its planned development projects while
maintaining credit measures that we view as in line with a higher
rating. The rating outlook is stable. The rating reflects our
assessment of Pinnacle's financial risk profile as 'aggressive'
and its business risk profile as 'fair,' according to our rating
criteria," S&P said.
"Our assessment of Pinnacle's financial risk profile as aggressive
takes into account the company's growth strategy, which we expect
will result in substantial capital spending over the next two
years, as well as sufficient liquidity to complete its planned
development spending. Additionally, while we expect Pinnacle's
leverage to spike to the mid-5x area over the next year, we
believe the company will be able to bring leverage back down to
around 5x by the end of 2013. For full-year 2012, we have factored
in an expectation that Pinnacle's EBITDA will grow in the high-
single-digit percentage area, which incorporates the opening of
L'Auberge Baton Rouge, expected by Labor Day, as well as modest
single digit growth across its existing portfolio," S&P said.
"Our assessment of Pinnacle's business risk profile as fair
reflects the company's geographically diverse portfolio of
properties, notwithstanding locations in competitive markets and a
concentration of cash flows in Louisiana, as well as our
expectation for continued strong performance at Pinnacle's newer
properties," S&P said.
RATINGS LIST
Pinnacle Entertainment Inc.
Corporate Credit Rating BB-/Stable/--
New Ratings
Pinnacle Entertainment Inc.
Senior Secured
$325 mil term loan due 2019 BB+
Recovery Rating 1
Subordinated
$325 mil notes due 2022 B
Recovery Rating 6
PLANT INSULATION: Asbestos Plan Confirmed; Appeals in Dist. Court
-----------------------------------------------------------------
Bankruptcy Judge Thomas E. Carlson on April 4, 2012, entered an
order confirming the Chapter 11 plan of Plant Insulation Co.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reported March 19 on the bankruptcy judge's decision to overrule
objections lodged against the plan by insurance companies that
didn't settle.
Mr. Rochelle recounts that Plant Formerly known as Plant Asbestos
Co. and Asbestos Co. of California, Plant sold the business in
late 2001 and since then was engaged solely in managing asbestos
liability. The reorganization plan creates a trust to handle
asbestos claims. U.S. Bankruptcy Judge Thomas E. Carlson said the
plan was unanimously accepted by asbestos claimants while opposed
by insurance companies that didn't settle. Carlson held a nine-
day trial and took evidence from 30 witnesses. He decided the
issues against the objecting insurance companies in an 83-page
opinion on March 16.
According to the Bloomberg report, to uphold the plan, Judge
Carlson said he needed to decide three questions "not fully
resolved under existing law." For starters, he said that the
requirement for an ongoing business in Section 524(g) of the
Bankruptcy Code was satisfied by merging Plant with another
business. Second, Carlson said that the plan could cut off
nonsettling insurance companies' contribution claims against
insurers that settled. Third, he ruled that the best interests
test doesn't require non-settling insurance companies to receive
the full amount of the contribution claims because those rights
would be retained were the case converted to liquidation in
Chapter 7.
Certain insurers, including Fireman's Fund Insurance Company, took
an appeal on the bankruptcy judge's confirmation order.
Plant Insulation and Court-appointed representative for holders of
future asbestos claims have said in a court filing that they
elect, pursuant to 28 U.S.C. Sec. 158(c)(1)(B) and Federal Rule of
Bankruptcy Procedure 8001(e)(1), to have the United Stated
District Court for the Northern District of California hear the
appeal of the Bankruptcy Court's plan confirmation order, which
appeal was filed by certain non-settling insurers on April 10,
2012.
The Bankruptcy Appellate Panel would be unable to resolve the
appeal in question, due to the fact that Bankruptcy Code section
524(g)(3)(A) requires a 524(g) plan confirmation order to be
"issued or affirmed by the district court," according to the plan
proponents.
San Francisco, California-based Plant Insulation Company
manufactured insulation products and services. The Company filed
for Chapter 11 (Bankr. N.D. Calif. Case No. 09-31347) on May 20,
2009. Michaeline H. Correa, Esq., Peter J. Benvenutti, Esq.,
and Tobias S. Keller, Esq., at Jones Day represents the Debtor in
its restructuring effort. The Debtor has assets and debts ranging
from $500 million to $1 billion.
PRINCETON REVIEW: PwC Raises Going Concern Doubt
------------------------------------------------
The Princeton Review, Inc., filed on April 16, 2012, its annual
report on Form 10-K for the fiscal year ended Dec. 31, 2011.
PricewaterhouseCoopers LLP, in Boston, Massachusetts, expressed
substantial doubt about the Princeton Review's 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.
The Company reported a net loss of $136.07 million on
$188.75 million of revenues for 2011, compared with a net loss of
$51.74 million on $213.83 million of revenues for 2010.
The Company's balance sheet at Dec. 31, 2011, showed
$228.35 million in total assets, $213.66 million in total
liabilities, Series D preferred stock of $125.43 million, and a
stockholders' deficit of $110.74 million.
A copy of the Form 10-K is available for free at:
http://is.gd/7bfrEU
Framingham, Massachusetts-based The Princeton Review, Inc.,
entered, on March 26, 2012, into an Asset Purchase Agreement with
an affiliate of Charlesbank Capital Partners pursuant to which,
upon the terms and subject to the conditions set forth in the
Agreement, the Company will sell, and Buyer will buy,
substantially all of the assets of the Company's Higher Education
Readiness ("HER") division, including the name and brand of The
Princeton Review. The consideration for the sale of the HER
division will be $33.0 million in cash, plus the assumption of
$12.0 million in net working capital liabilities. The purchase
price will be adjusted to account for any variance from the target
working capital level. The Company expects to use the net
proceeds from the sale to repay obligations outstanding under its
senior credit facilities with General Electric Capital
Corporation. Upon consummation of the transaction, the Company
will serve as a holding company for the Penn Foster division, will
cease to be known as The Princeton Review and will formally adopt
a new, to be determined, corporate name.
The Company's business as it existed on and prior to Dec. 31,
2011, was to provide in-person, online and print education
products and services targeting the high school and post-secondary
markets.
POWER EFFICIENCY: Suspending Filing of Reports with SEC
-------------------------------------------------------
Power Efficiency Corporation filed a Form 15 notifying of its
suspension of its duty under Section 15(d) to file reports
required by Section 13(a) of the Securities Exchange Act of 1934
with respect to its common stock. Pursuant to Rule 12h-3, the
Company is suspending reporting because there are currently less
than 300 holders of record of the common shares and Senior Notes.
There were only 188 holders of the common shares as of April 17,
2012.
About Power Efficiency
Las Vegas, Nevada-based Power Efficiency Corporation (OTC: PEFF) -
- http://www.powerefficiency.com/-- is a clean technology
company focused on efficiency technologies for electric motors.
The Company reported a net loss of $3.61 million in 2011, compared
with a net loss of $3.27 million in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $2.92 million
in total assets, $2.26 million in total liabilities and $661,090
in total stockholders' equity.
For 2011, BDO USA, LLP, in Las Vegas, Nevada, noted that the
Company has suffered recurring losses and has generated negative
cash flows from operations, among other matters, which raises
substantial doubt about its ability to continue as a going
concern.
Bankruptcy Warning
The Company said in its annual report for the year ended Dec. 31,
2011, that continuation of the Company as a going concern is
dependent upon achieving profitable operations or accessing
sufficient operating capital. Management's plans to achieve
profitability include developing new products such as hybrid motor
starters and single-phase to three-phase converters, developing
business in the Asian market, obtaining new customers and
increasing sales to existing customers. Management is seeking to
raise additional capital through equity issuance, debt financing
or other types of financing. However, there are no assurances
that sufficient capital will be raised. If the Company is unable
to obtain it on reasonable terms, the Company would be forced to
restructure, file for bankruptcy or significantly curtail
operations.
PRESIDENTIAL REALTY: Incurs $6.2 Million Net Loss in 2011
---------------------------------------------------------
Presidential Realty Corporation filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing a
net loss of $6.16 million on $4.69 million of revenue in 2011,
compared with a net loss of $2.57 million on $5.55 million of
revenue in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $16.37
million in total assets, $17.44 million in total liabilities and a
$1.07 million total stockholders' deficiency.
For 2011, Holtz, Rubenstein Reminick LLP, in Melville, New York,
expressed substantial doubt about the Company's ability to
continue as a going concern. The independent auditors noted that
the Company has suffered recurring losses from operations and has
a working capital deficiency.
A copy of the Form 10-K is available for free at:
http://is.gd/aiOzbW
About Presidential Realty
Headquartered in White Plains, New York, Presidential Realty
Corporation, a real estate investment trust, is engaged
principally in the ownership of income-producing real estate and
in the holding of notes and mortgages secured by real estate or
interests in real estate. On Jan. 20, 2011, Presidential
stockholders approved a plan of liquidation, which provides for
the sale of all of the Company's assets over time and the
distribution of the net proceeds of sale to the stockholders after
satisfaction of the Company's liabilities.
PROTEONOMIX INC: Amends 6.9 Million Common Shares Offering
----------------------------------------------------------
Proteonomix, Inc., filed with the U.S. Securities and Exchange
Commission amendment no. 1 to Form S-1 registration statement
relating to the public offering of up to 6,945,226 shares of the
Company's common stock, par value $0.001 per share, for sale by
certain of the Company's stockholders for their own accounts.
These shares include up to: (i) an aggregate of 4,071,340 shares
of common stock issuable upon conversion of the Company's Series E
Convertible Preferred Stock; and (ii) an aggregate of 2,864,886
shares of common stock issuable upon the exercise of certain
warrants. The Company will pay the expenses of registering these
shares.
The Company's common stock is quoted on the Over-the-Counter
Bulletin Board under the symbol "PROT." On April 13, 2012, the
closing sales price for the common stock on the OTCBB was $1.87
per share.
A copy of the amended prospectus is available for free at:
http://is.gd/atGlZN
About Proteonomix
Proteonomix, Inc. (OTC BB: PROT) -- http://www.proteonomix.com/--
is a biotechnology company focused on developing therapeutics
based upon the use of human cells and their derivatives.
The Company reported a net loss applicable to common shares of
$1.38 million in 2011, compared with a net loss applicable to
common shares of $3.47 million in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $3.34 million
in total assets, $7.03 million in total liabilities, and a
$3.69 million total stockholders' deficit.
KBL, LLP, in New York, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has sustained significant
operating losses and is currently in default of its debt
instrument and needs to obtain additional financing or restructure
its current obligations.
RAEBACK CORP: 3rd Cir. to Hear Immigration Case Against Founder
---------------------------------------------------------------
The U.S. Court of Appeals for the Third Circuit granted Nigel
Singh's petition for review of a final order of removal based on
his conviction, under 18 U.S.C Sec. 152(3), for knowingly making a
false statement under penalty of perjury in a bankruptcy
proceeding. The Board of Immigration Appeals determined that Mr.
Singh's conviction was an offense involving fraud or deceit in
which the loss to the victim exceeded $10,000, and hence an
aggravated felony under 8 U.S.C. Sec. 1101(a)(43)(M)(i). In his
petition, Mr. Singh argues that 18 U.S.C Sec. 152(3) is a perjury
offense that must meet the requirements for perjury-based
aggravated felonies under 8 U.S.C Sec. 1101(a)(43)(S). Mr. Singh
further argues that, even if assessed under 8 U.S.C Sec.
1101(a)(43)(M)(i), he is not removable because his offense did not
cause an actual loss exceeding $10,000.
The Third Circuit rejects Mr. Singh's first argument, but agrees
that under the unique facts of this case his offense did not cause
an actual loss. "Because we hold that Sec. 1101(a)(43)(M)(i)
requires an actual, not merely intended, loss, we will grant
Singh's petition and vacate the order of removal," said Circuit
Judge Franklin Stuart Van Antwerpen, who wrote the opinion dated
April 16, 2012, available at http://is.gd/KlqwV9from Leagle.com.
Mr. Singh was born in Jamaica on Aug. 23, 1959, and has been a
lawful permanent resident of the United States since Dec. 7, 1975.
Since that time, he has married a U.S. citizen and raised three
U.S. children.
In 1997, he founded Raeback Corporation, a construction
contracting firm that bid on public works projects as a Minority
Business Enterprise. During his tenure as Raeback's president,
Mr. Singh was asked on several occasions by a business contact at
a non-MBE firm, U.S. Rebar, to help U.S. Rebar secure government
contracts. In exchange for kickbacks, Mr. Singh falsely attested
that Raeback was serving as a subcontractor on government projects
when, in fact, U.S. Rebar did the subcontract work. Under the
scheme, billing was done in Raeback's name and the general
contractor paid Raeback, which then forwarded the payments to U.S.
Rebar, less a 10% kickback. One of the government entities that
funded these projects was the Port Authority of New York and New
Jersey.
In September 2005, during the course of the Port Authority
project, Raeback filed for bankruptcy due to losses on another
project. Since the bankruptcy proceedings automatically froze
Raeback's bank accounts, Mr. Singh and his contact agreed on an
arrangement in which the contact would deposit the general
contractor's checks and hold the funds for Mr. Singh during
Raeback's bankruptcy. Unbeknownst to Mr. Singh, however, his
contact was a confidential informant for the Port Authority, which
had begun investigating U.S. Rebar's arrangement with Raeback.
Rather than holding the funds for Mr. Singh, therefore, the
contact transferred the funds -- roughly $54,000 in total -- to
the Port Authority.
When the Port Authority informed Singh of its investigation in
2007, Mr. Singh participated in two proffer sessions with law
enforcement agents. During these sessions, agents learned of
Raeback's bankruptcy proceeding. Agents also learned that
Raeback's bankruptcy petition failed to disclose its revenue
stream from the Port Authority project. Although the Port
Authority did not take legal action against Mr. Singh, Mr. Singh
was charged by the U.S. Attorney's Office in the Eastern District
of New York for one count of "fail[ing] to disclose all of
Raeback's accounts receivable on Raeback's bankruptcy petition,"
in violation of 18 U.S.C. Sec. 152(3). Under Sec. 152(3), it is a
crime to "knowingly and fraudulently make[] a false declaration,
certificate, verification, or statement under penalty of perjury"
in relation to a bankruptcy proceeding.
On June 24, 2009, Mr. Singh pled guilty. As part of the plea
agreement, Mr. Singh agreed to "restitution in the amount of
$54,418.08," to be paid by transferring the money "held by the
Port Authority" to the bankruptcy trustee.
At the time the plea agreement was entered, the U.S. Attorney
believed Mr. Singh's failure to disclose the Port Authority funds
had caused "substantial interference with the administration of
justice," thus warranting a three-point sentencing enhancement
under U.S.S.G. Sec. 2J1.2(b)(2). Later, however, the U.S.
Attorney informed the sentencing court that, "because the Chapter
11 bankruptcy proceedings are still ongoing and the bankruptcy
trustee will receive the funds which the defendant attempted to
secrete, the defendant's crime will not affect the ultimate
outcome of the bankruptcy proceedings." The U.S. Attorney also
informed the court that the trustee "did not expend any
substantial additional resources as a result of the defendant's
fraud."
Based on these discoveries, the U.S. Attorney's Office dropped its
request for the three-point enhancement. Mr. Singh, meanwhile,
emphasized the restitution agreement as a factor supporting his
request for a non-incarceratory sentence.
On Dec. 14, 2009, the United States District Court for the Eastern
District of New York sentenced Mr. Singh to ten months in prison.
Although the court's initial judgment did not mention restitution,
an amended judgment issued on Jan. 29, 2010, included a
restitution order "pursuant to [the] plea agreement." The terms
of the court's restitution order, identical in all relevant
respects to the terms Singh agreed to in the plea, ordered that
"the $54,418.08 currently held by the Port [A]uthority" be
transferred to the trustee.
On March 22, 2010, the funds were transferred to the trustee, and
on Jan. 19, 2011, the trustee distributed Raeback's assets to its
creditors.
Shortly after Mr. Singh began serving his sentence, the Department
of Homeland Security initiated removal proceedings by issuing him
a Notice to Appear. In the NTA, the DHS charged that Mr. Singh's
Sec. 152(3) conviction involved a "loss or intended loss" to a
victim or victims exceeding $10,000 and thus made him removable as
an aggravated felon under 8 U.S.C. Sec. 1227(a)(2)(A)(iii). Under
Sec. 1101(a)(43)(M)(i), an aggravated felony is defined as an
"offense that involves fraud or deceit in which the loss to the
victim or victims exceeds $10,000." The Immigration Judge
sustained DHS's charge and entered an order of removal, which the
BIA affirmed on April 12, 2011.
In an unpublished opinion, the BIA ruled that a conviction under
Sec. 152(3) "categorically involves fraud," as evident by the
Third Court's determination of the crime's essential elements in
United States v. Mathies, 350 F.2d 963 (3d Cir. 1965). The BIA
also ruled that Mr. Singh's agreement to pay restitution and the
sentencing court's restitution order provided clear and convincing
evidence that Mr. Singh's offense caused a loss to the trustee
exceeding $10,000.
After the BIA issued its order, the Third Circuit granted Mr.
Singh's request for a stay so that the Third Circuit could
consider his petition for review. In granting the stay, the Third
Circuit cited the Second Circuit's decision in Pierre v. Holder,
588 F.3d 767 (2d Cir. 2009), where an intended loss exceeding
$10,000 was held insufficient, as a matter of law, to satisfy the
loss requirement of subparagraph (M)(i).
The Third Circuit panel consists of Judges Van Antwerpen, Anthony
Joseph Scirica and Thomas L. Ambro.
The case is Nigel St. Ivan Singh, Petitioner, v. Attorney General
of the United States, Respondent, No. 11-1988 (3rd Cir.).
REGIONS FINANCIAL: Moody's Issues Summary Credit Opinion
--------------------------------------------------------
Moody's Investors Service issued a summary credit opinion on
Regions Financial Corporation and includes certain regulatory
disclosures regarding its ratings. The release does not
constitute any change in Moody's ratings or rating rationale for
Regions Financial Corporation and its affiliates.
Moody's current ratings on Regions Financial Corporation and its
affiliates are:
Long Term Issuer rating of Ba3
Senior Unsecured (domestic currency) ratings of Ba3
Subordinate (domestic currency) ratings of B1
Senior Unsecured Shelf (domestic currency) ratings of (P)Ba3
Subordinate Shelf (domestic currency) ratings of (P)B1
Junior Subordinate Shelf (domestic currency) ratings of (P)B2
Preferred Shelf (domestic currency) ratings of (P)B2
Preferred Shelf -- PS2 (domestic currency) ratings of (P)B3
Short Term Issuer (domestic currency) rating of NP
Regions Bank
Long Term Issuer rating of Ba2
Senior Unsecured Bank Note Program (domestic currency) ratings
of (P)Ba2
Long Term Bank Deposits (domestic currency) ratings of Ba1
Long Term Other Senior Obligations ratings of Ba2
Bank Financial Strength ratings of D+
Subordinate Bank Note Program (domestic currency) ratings of
(P)Ba3
Subordinate (domestic currency) ratings of Ba3
Short Term Bank Note Program (domestic currency) ratings of
(P)NP
Short Term Bank Deposits (domestic currency) ratings NP
Short Term Other Senior Obligations ratings of NP
Ratings Rationale
Moody's assigns a standalone bank financial strength rating (BFSR)
of D+ and a long-term deposit rating of Ba1 to Regions Bank. The
holding company, Regions Financial Corporation (Regions), is rated
Ba3 for senior debt. On February 14, 2012, Moody's changed the
rating outlook to stable from negative, reflecting a reduction in
Regions' risk concentrations and signs of stabilization in asset
quality. Specifically, commercial real estate (CRE) and home
equity (HE) have come down 31% and 8%, respectively, from the
prior year-end. Signs of stabilization in asset quality are
reflected in the declining amount of criticized and classified
loans as well as the reduced inflows of new nonaccrual assets
which were down 33% in 2011.
Despite the signs of stabilization, Regions' asset quality is
relatively weak and continues to be its primary credit challenge.
Regions' nonperforming assets (NPAs, including 90+ and accruing
TDRs) remain elevated at 7.91% of loans plus OREO at year-end
2011. Regarding earnings, while Regions' pre-provision, pre-tax
income is in line with similarly-rated US banks, its net income is
weaker reflecting its asset quality challenges.
The rating also incorporates Regions' good franchise in the
Southeast US, which drives the bank's healthy liquidity profile as
core deposits exceed total loans. In addition, Moody's views
Regions' liquidity position at the parent company to be good, as
it maintains sufficient cash on hand to meet its maturing
obligations over the next 24 months without access to dividends
from bank subsidiaries. These franchise strengths support the
current ratings.
Rating Outlook
The rating outlook is stable. The stable outlook reflects the
reduction in Regions' risk concentrations, CRE and HE, and signs
of stabilization in asset quality.
What Could Change the Rating - Up
For positive ratings pressure to emerge, Moody's would need to see
a significant reduction in the level of NPAs as well as improved
earnings.
What Could Change the Rating - Down
Downward rating pressure could result from asset quality
deterioration beyond Moody's expectations, notably if the rate of
new inflows of NPAs significantly increase, negatively affecting
profitability and capital. Regions' remaining exposure to CRE and
HE in its core Southeast footprint expose it to further volatility
in asset quality if a more adverse economic climate were to
develop.
The methodologies used in these ratings were Bank Financial
Strength Ratings: Global Methodology published in February 2007,
Incorporation of Joint-Default Analysis into Moody's Bank Ratings:
A Refined Methodology published in March 2007 and Moody's
Guidelines for Rating Hybrid Securities and Subordinated Debt
published in November 2009.
RESIDENTIAL CAPITAL: Didn't Pay Interest in $473MM Notes
--------------------------------------------------------
Residential Capital, LLC, a subsidiary of Ally Financial Inc., did
not make the semi-annual interest payment that was due April 17,
2012 related to its $1,750,000,000 6.50% Notes due 2013, of which
roughly $473 million of principal is currently outstanding, and
pursuant to their terms currently bear interest at the rate of
8.50% per annum, issued pursuant to an Indenture dated June 24,
2005 (as supplemented) among ResCap and Deutsche Bank Trust
Company Americas, as Trustee.
The amount due is $20.1 million.
The Indenture provides that a failure to pay interest on an
interest payment date does not become an Event of Default unless
such failure continues for a period of 30 days.
At Dec. 31, 2011, Ally had funding arrangements with ResCap that
included $1.0 billion of senior secured credit facilities and a
$1.6 billion line of credit consisting of a $1.1 billion secured
facility and a $500 unsecured facility. The Senior Secured
Facilities and Line of Credit had a maturity date of April 13,
2012.
On Friday, Ally said it has extended the maturity date of the
Senior Secured Facilities and the $1.1 billion secured facility
under the Line of Credit to May 14. The unsecured facility under
the Line of Credit was not extended.
Andrew R. Johnson, writing for The Wall Street Journal, notes
Ally, which is 74% owned by the U.S. government, faces mounting
pressure to make a decision on the fate of ResCap, which has been
a drag on the rest of Ally's business and stalled plans for an
initial public offering. Ally is currently considering a pre-
packaged bankruptcy for ResCap, which could result in the sale of
assets to Fortress Investment Group LLC, The Wall Street Journal
has reported.
WSJ notes Ally has continued to give financial support to ResCap,
primarily through the forgiveness of intercompany loans it
provides to the mortgage subsidiary. However, executives have
stressed ResCap is a separate company that doesn?t have guaranteed
financial support from Ally.
The short-term extension of the ResCap credit facilities "could
signal a potential resolution of Ally?s ownership of ResCap in the
near future, possibly including a bankruptcy filing of ResCap,"
Fitch Ratings said Friday.
WSJ notes ResCap already faces more than $300 million in bond-
related payments due between May 15 and June 1, key dates analysts
are watching for a decision on the company.
About Ally Financial
Ally Financial Inc., formerly GMAC Inc. -- http://www.ally.com/--
is one of the world's largest automotive financial services
companies. The company offers a full suite of automotive
financing products and services in key markets around the world.
Ally's other business units include mortgage operations and
commercial finance, and the company's subsidiary, Ally Bank,
offers online retail banking products. Ally operates as a bank
holding company.
GMAC obtained a $17 billion bailout from the U.S. government in
exchange for a 56.3% stake. Private equity firm Cerberus Capital
Management LP keeps 14.9%, while General Motors Co. owns 6.7%.
Ally has tapped Goldman Sachs Group Inc. and Citigroup Inc. to
advise on a range of issues, including strategic alternatives for
the mortgage business and repayment of taxpayer funds.
Ally's balance sheet at Sept. 30, 2011, showed $181.95 billion
in total assets, $162.22 billion in total liabilities and
$19.73 billion in total equity.
ResCap
According to the Form 10-Q for the quarter ended Sept. 30, 2011,
although Ally's continued actions through various funding and
capital initiatives demonstrate support for ResCap, there can be
no assurances for future capital support. Consequently, there
remains substantial doubt about ResCap's ability to continue as a
going concern. Should Ally no longer continue to support the
capital or liquidity needs of ResCap or should ResCap be unable to
successfully execute other initiatives, it would have a material
adverse effect on ResCap's business, results of operations, and
financial position.
Ally said it has extensive financing and hedging arrangements with
ResCap that could be at risk of nonpayment if ResCap were to file
for bankruptcy. At Sept. 30, 2011, Ally had $1.9 billion in
secured financing arrangements with ResCap of which $1.2 billion
in loans was utilized. At Sept. 30, 2011, the hedging
arrangements were fully collateralized. Amounts outstanding under
the secured financing and hedging arrangements fluctuate. If
ResCap were to file for bankruptcy, ResCap's repayments of its
financing facilities, including those with Ally, could be slower.
In addition, Ally could be an unsecured creditor of ResCap to the
extent that the proceeds from the sale of Ally's collateral are
insufficient to repay ResCap's obligations to the Company. It is
possible that other ResCap creditors would seek to recharacterize
Ally's loans to ResCap as equity contributions or to seek
equitable subordination of Ally's claims so that the claims of
other creditors would have priority over Ally's claims.
Ally also said that, should ResCap file for bankruptcy, Ally's
$331 million investment related to ResCap's equity position would
likely be reduced to zero. If a ResCap bankruptcy were to occur
and a substantial amount of Ally's credit exposure is not repaid
to the Company, it could have an adverse impact on Ally's near-
term net income and capital position, but Ally does not believe it
would have a materially adverse impact on Ally's consolidated
financial position over the longer term.
* * *
In mid-April 2012, Standard & Poor's Ratings Services said it is
maintaining its issuer credit and issue-level ratings on ResCap on
CreditWatch with negative implications, where they had been placed
Nov. 10, 2011.
"ResCap announced a one-month extension to the maturity dates of
two senior credit facilities provided by its parent, Ally
Financial. The original maturity date for these facilities was
April 13. 'The CreditWatch on ResCap was based in part on our view
that the company might not have access to sufficient liquidity to
cover obligations under the maturing facilities, along with
uncertainties associated with the potential for ResCap's parent to
extend the facilities or provide some other form of support,' said
Standard & Poor's credit analyst Thomas Connell. The facilities
are now due on May 14. (An unsecured, and undrawn, component of
one of the facilities was not subject to the maturity extension),"
S&P said.
"In February, we lowered our issuer credit rating on ResCap to
'CC' while maintaining the ratings on CreditWatch negative,
reflecting our expectation of limited, if any, future support for
ResCap from Ally. ResCap's failure to meet its obligations under
the maturing facilities could trigger bankruptcy. Under our
criteria, a company rated 'CC' is 'highly vulnerable,'" S&P said.
"While Ally has provided support to ResCap at various times in the
past, recent statements by Ally management have not provided a
basis for expectations of future support," S&P said.
RESIDENTIAL CAPITAL: Moody's Cuts Sr. Unsec. Debt Rating to 'C'
---------------------------------------------------------------
Moody's Investors Service downgraded the senior unsecured debt
rating of Residential Capital LLC (ResCap) to C from Ca, and the
rating of its junior secured notes to C from Caa3. The ratings of
ResCap's parent, Ally Financial Inc. (Ally; B1 stable) are not
affected by the ResCap downgrades.
Ratings Rationale
The downgrades follow ResCap's announcement that it did not make a
required April 17 interest payment on its senior notes due April
2013. Unless paid within 30 days, the missed payment will cause a
default of the notes. In Moody's view, ResCap's decision to miss
the payment indicates a higher risk of default, which is reflected
in the rating downgrades.
ResCap has required support from its parent Ally for some time,
due to portfolio underperformance, mortgage repurchase expenses,
and liquidity issues. As recently as January 2012, Ally provided
capital support to ResCap by forgiving $197 million of
indebtedness after ResCap breached its tangible net worth
covenant. On April 13, 2012, Ally said that it extended the
maturity of $2.1 billion of credit facilities it provides to
ResCap by one month to May 14, 2012. Moody's believes the short-
term nature of the extension increases the uncertainty of further
support from Ally, without which, ResCap would unlikely be able to
continue as a going concern. Although Ally's plans with respect to
ResCap are not yet clear, Moody's believes that creditors' near-
term risk of loss has increased.
Ally's ratings have been constrained by its support of ResCap but
are unaffected by the ResCap downgrades. In Moody's view, actions
by Ally to definitively and substantially reduce its exposures to
ResCap could be positive for Ally's credit profile, if the
associated costs are within reason. Moody's will reassess Ally's
credit profile as ResCap's status and relationship with Ally
continues to evolve.
ResCap's junior secured notes have a junior claim behind the
senior secured credit facilities provided by Ally. With the
downgrade, these secured notes are now rated the same as ResCap's
unsecured debt because Moody's does not believe that these notes
are likely to experience a significantly enhanced recovery in a
default scenario, due to the small amount and low quality of
eligible collateral.
Previously, on February 7, 2011, Moody's upgraded the junior
secured and senior unsecured ratings of ResCap to Caa3 and Ca,
respectively, from C; and upgraded the senior unsecured ratings of
Ally and its supported subsidiaries to B1 from B3.
Residential Capital LLC, an indirect subsidiary of Ally Financial
Inc., is an originator and servicer of residential mortgage loans.
The principal methodology used in this rating was Finance Company
Global Rating Methodology published in March 2012.
ROBERTS HOTELS: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Roberts Hotels Houston, LLC
dba Holiday Inn Houston
dba Holiday Inn Southwest
1408 North Kingshighway, Suite 300
Saint Louis, MO 63113
Bankruptcy Case No.: 12-43590
Chapter 11 Petition Date: April 16, 2012
Court: United States Bankruptcy Court
Eastern District of Missouri (St. Louis)
Judge: Charles E. Rendlen III
Debtor's Counsel: A. Thomas DeWoskin, Esq.
DANNA MCKITRICK, PC
7701 Forsyth, Suite 800
St. Louis, MO 63105
Tel: (314) 726-1000
E-mail: tdewoskin@dmfirm.com
Estimated Assets: $0 to $50,000
Estimated Debts: $10,000,001 to $50,000,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by Michael W. Kirtley, chief operating
officer.
ROTHSTEIN ROSENFELDT: Dan Marino Foundation Sued by Trustee
-----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the Dan Marino Foundation, founded in 1992 to aid
children and young adults with autism, was sued for $258,500 by
the trustee liquidating the law firm once run by Scott Rothstein.
The complaint filed April 15 in U.S. Bankruptcy Court in Fort
Lauderdale, Florida claims that the foundation received payments
from Rothstein in 2007 and 2008, before the discovery of his
fraud. The foundation was created by Dan Marino, a retired
quarterback for the Miami Dolphins who was elected to the
professional football Hall of Fame in 2005.
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 CATHERINE: Liquidating under Chapter 7
--------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Saint Catherine's Medical Center of Fountain Springs,
a non-operating 107-bed hospital in Ashland, Pennsylvania,
survived only nine days in Chapter 11. U.S. Bankruptcy Judge John
J. Thomas on April 18 approved an April 16 motion motion from the
Chapter 11 trustee seeking conversion of the case to a liquidation
in Chapter 7.
According to the report, the Chapter 11 trustee, who was appointed
to take over management immediately after the Chapter 11 filing,
said the hospital has $5.8 million in debt and no possibility of
successful reorganization. He said the employees weren't paid for
five weeks' work. The Chapter 11 trustee said that no hospital in
the
surrounding area was interested in acquiring the facility. It
was shut by state regulators who found violations of health laws.
Saint Catherine Hospital of Pennsylvania, LLC, dba Saint Catherine
Medical Center of Fountain Springs filed a Chapter 11 petition
(Bankr. M.D. Pa. Case No. 12-02073) on April 9, 2012. The Debtor
estimated under $50,000 in assets and liabilities.
The Debtor is represented by John H. Doran, Esq., at Doran &
Doran, P.C., in Wilkes-Barre, Pennsylvania, serves as counsel.
SCHIFF NUTRITION: Moody's Assigns 'B1' CFR; Outlook Stable
----------------------------------------------------------
Moody's Investors Service assigned first time ratings to Schiff
Nutrition International, Inc., including a B1 Corporate Family
Rating and a B2 Probability of Default rating. Moody's also
assigned a B1 rating to $200 million of senior secured credit
facilities, comprised of a $50 million 5-year revolver and a $150
million 7-year term loan. A Speculative Grade Liquidity rating of
SGL-3 was also assigned. The outlook for the ratings is stable.
Proceeds of the issuance were used to facilitate the $150 million
cash purchase of immune support supplement company Airborne(R)from
GF Capital Private Equity Fund.
Moody's assigned the following ratings:
Corporate Family Rating: B1
Probability of Default Rating: B2
$50 million senior secured revolver expiring 2017 rated B1
(LGD 3, 33%)
$150 million senior secured term loan due 2019 rated B1
(LGD 3, 33%)
Speculative Grade Liquidity Rating of SGL-3
The outlook is stable.
All ratings are subject to the conclusion of the syndication as
proposed and Moody's review of final documentation.
Ratings Rationale
Schiff's B1 Corporate Family Rating reflects its relatively small
scale and the inherent business risks of negative publicity and
product liability associated with the vitamin, mineral and
nutrition supplement (VMNS) industry. The rating is also
constrained by significant customer concentration with Costco and
Walmart, as well as a certain amount of event risk of debt-funded
acquisitions as the industry consolidates. Schiff also operates in
an intensely competitive product category with very large
competitors. The rating takes into account the relatively balanced
branded portfolio of VMNS products and favorable demographic
trends supporting continued growth in the industry. Further, the
rating incorporates Schiff's good EBITA margins, modest leverage
and low-capital expenditures. Schiff's proven ability to innovate
and differentiate its branded products, coupled with their
longstanding customer relationships in the mass retail channel are
credit positives that support the B1 Corporate Family Rating.
Moody's believes that the favorable demographic trends for VMNS
products will continue to grow and Schiff's product categories are
well positioned to benefit from those trends.
The stable outlook reflects Moody's view that Schiff will continue
to benefit from demographic trends which support demand for its
products, along with Schiff's demonstrated ability to innovate and
build its brands. This also incorporates Moody's view that
leverage and coverage will remain good over the next 12 to 18
months. It also reflects Moody's view that the company's modest
size and high customer concentration are not likely to materially
improve over the next 12-18 months to levels that would support a
higher rating.
For an upgrade, Schiff would need to increase its scale
significantly beyond its current level and demonstrate strong
organic growth and good liquidity. Financial metrics would also
need to remain strong such that debt-to-EBITDA can be sustained
below 3.5 times and EBITA-to-interest sustained above 3 times.
Schiff's ratings could be downgraded if the company's financial
performance deteriorates as a result of unexpected weakness in its
portfolio, material supply chain disruptions, aggressive debt
funded acquisitions, or any material product recalls or liability
claims. Erosion in interest coverage, leverage sustained above 5
times, or any deterioration in liquidity are all additional
factors that could contribute to a downgrade.
The principal methodology used in rating Schiff Nutrition
International, Inc. was the Global Packaged Goods Industry
Methodology published in July 2009. Other methodologies used
include Loss given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.
Schiff Nutrition International, Inc., headquartered in Salt Lake
City, Utah, develops, manufactures, markets and distributes
branded and private label vitamins, minerals and nutritional
supplements in the U.S. and abroad. Key brands include Schiff Move
Free(R), Schiff(R)Vitamins, Schiff MegaRed(R), Schiff Mega-D3(R),
Tiger's Milk(R), Schiff Sustenex(R), and Schiff Digestive
Advantage(R). For the twelve months ending February 29, 2012 the
company posted pro forma revenues of about $316 million.
SCHIFF NUTRITION: S&P Rates Corporate Credit 'B'; Outlook Stable
----------------------------------------------------------------
Standard & Poor's Rating Services assigned its 'B' corporate
credit rating to Salt Lake City, Utah-based Schiff Nutrition Group
Inc. (Schiff). The outlook is stable.
"At the same time, we assigned 'B' issue ratings to the company's
$150 million seven-year senior secured term loan B (due 2019) and
$50 million revolving credit agreement (due 2017). The recovery
rating on both facilities is '3', indicating our expectation for
meaningful (50%-70%) recovery in the event of payment default. The
facilities are subject to financial covenants commencing on Aug.
31, 2012," S&P said.
"The ratings on vitamin, mineral, and health supplement market
player Schiff Nutrition Group Inc. (Schiff), which recently
acquired Airborne Inc. (Airborne), reflect our assessment that the
company has an 'aggressive' financial profile and 'vulnerable'
business profile," S&P said.
"We believe the company's cash flow generation will continue to be
somewhat modest and its asset protection will be weak," said
Standard & Poor's credit analyst Mark Salierno. "However, we
believe credit measures will improve modestly over the next 15
months."
"Our characterization of Schiff's financial policy as aggressive
is based on controlling voting power--85% in aggregate, shared
with Weider Health and Fitness (WHF)--of a financial sponsor, TPG
Growth, which we believe may influence financial governance toward
shareholder-friendly decision-making; in fiscal 2010, Schiff
engaged in a $29 million special dividend and in fiscal 2011 the
company issued a $20 million special dividend," S&P said.
"While the company has no stated dividend policy, we expect the
company to continue its practice of dividends," said Mr. Salierno.
"We also expect the company to opportunistically pursue tuck-in
acquisitions, funded through a combination of internally generated
cash flow, additional debt, and sponsor support."
"The outlook is stable. We expect Schiff's operating performance
and key credit measures to be relatively steady despite the
integration of the Airborne acquisition over the next year. We
estimate leverage will decline to the low-3x area by the end of
fiscal 2013," S&P said.
SEQUENOM INC: Extends Supply Agreement with Illumina to 2016
------------------------------------------------------------
Sequenom, Inc., on April 12, 2012, entered into a Second Amendment
to Sale and Supply Agreement with Illumina, Inc., amending that
certain Sale and Supply Agreement the Company entered into with
Illumina on July 8, 2011, as amended. The Amendment extends the
term of the Supply Agreement to a five year term, terminating in
July 2016 unless earlier terminated as provided for in the Supply
Agreement. The Amendment also adjusted the quantity and timing of
the consumables, and the price of the instruments, being purchased
by the Company pursuant to the Supply Agreement.
About Sequenom
Sequenom, Inc. (NASDAQ: SQNM) -- http://www.sequenom.com/-- is a
life sciences company committed to improving healthcare through
revolutionary genetic analysis solutions. Sequenom develops
innovative technology, products and diagnostic tests that target
and serve discovery and clinical research, and molecular
diagnostics markets. The company was founded in 1994 and is
headquartered in San Diego, California.
The Company reported a net loss of $74.15 million in 2011, a net
loss of $120.84 million in 2010, and a net loss of $71.01 million
in 2009.
The Company's balance sheet at Dec. 31, 2011, showed $135.54
million in total assets, $44.16 million in total liabilities and
$91.38 million in total stockholders' equity.
SHOREBANK CORP: June 13 Hearing on Chapter 11 Plan
---------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that ShoreBank Corp., the owner of a failed bank, won
approval of the disclosure explaining its reorganization plan.
The Debtor will seek confirmation of the Plan at a hearing June
13. The disclosure statement, approved by the bankruptcy judge
Last week, shows that unsecured creditors should have a 20 percent
recovery on their $3.9 million in claims.
The report relates that ShoreBank sought Chapter 11 protection
after working out a settlement where the Federal Deposit Insurance
Corp. will receive $8.5 million from a $10.7 million tax refund.
The bank holding company expects there will eventually be $11
million for distribution to creditors.
The report notes that because holders of subordinated notes are to
receive nothing for their $37.6 million in claims, senior
creditors with claims totaling $12.3 million are in line for an 83
percent recovery, according to the disclosure statement.
About ShoreBank
Organized in 1973 and incorporated under the state of Illinois,
The ShoreBank Corporation was America's first and leading
community development and environmental bank holding company. SBK
was a registered bank holding company for, among others, its
subsidiary, ShoreBank in Chicago, a state chartered non-member
bank. The Bank was subject to oversight and regulation by its
primary regulator, the Illinois Department of Financial and
Professional Regulation.
On Aug. 20, 2010, the Bank was closed by the IDFPR, and the
Federal Deposit Insurance Corp. was named receiver. The FDIC sold
substantially all of the Bank's assets to Urban Partnership Bank.
SBK's principal asset and source of income was its investment in
the Bank. The Bank Closure has had a significant adverse affect
on SBK's liquidity, capital resources, and financial condition.
On Jan. 9, 2012, SBK and 11 affiliates commenced Chapter 11 cases
(Bankr. N.D. Ill. Lead Case No. 12-00581) to liquidate their
remaining assets and wind down their estates.
The case was initially assigned to Judge Jacqueline P. Cox. On
Jan. 10, she recused herself and the case was sent to Judge A.
Benjamin Goldgar's chambers.
George Panagakis, Esq., leads a team of lawyers at Skadden, Arps,
Slate, Meagher & Flom LLP, who represent the Debtors. Garden City
Group Inc. serves as the Debtors' claims agent. The petition was
signed by George P. Surgeon, president and CEO.
The Debtors filed their Chapter 11 Plan of Liquidation on Jan. 31,
2012.
ST. VINCENT HOSPITAL: Moody's Cuts Rating to 'Ba2'; Outlook Neg.
----------------------------------------------------------------
Moody's Investors Service has downgraded to Ba2 from Baa3 the
rating assigned to St. Vincent Hospital d/b/a St. Vincent Health
Center (SVHC), the primary operating entity of St. Vincent Health
System (SVHS). The ratings are removed from Watchlist where they
were placed on February 29, 2012; the rating outlook is negative.
Ratings Rationale
The downgrade to Ba2 from Baa3 is driven by continued weakening of
SVHS's financial profile through unaudited 9 months fiscal year
(FY) 2012, with interim statements showing a marked decline in
cash and material operating losses driven by declining marketshare
and admissions. The assignment of the negative rating outlook
reflects Moody's belief that the decline in performance and
increased competition continue to place significant pressures on
the credit and that successful execution of turnaround strategies
and projected outcomes leave little room for missteps.
Challenges
* Weak operating performance, following over 5 years of
inconsistent results, with operating income loss through 9 months
FY 2012 of $6.3 million (-2.3% operating margin) following a loss
of $9.5 million (-2.7% operating margin) in FY 2011
* Weak balance sheet measures at the system, with 69 days cash on
hand at 9 months FY 2012 (though 80 days within the Obligated
Group) and 53.7% cash to debt, a marked decline from 90 days cash
on hand and 67.3% cash to debt at June 30, 2011 (Baa3 median is 97
days cash on hand and 83.8%). Management reports the decline in
cash is in part due to technical problems related to
implementation of new Health Insurance Portability and
Accountability Act (HIPAA) requirements.
* Leveraged debt profile with 13.1x debt-to-cash flow based on
annualized 9 months FY 2012 and 13.3x at FY 2011 (Baa3 median is
4.9x)
* SVHS has 52% variable debt exposure; current financial profile
shows limited headroom under letter of credit bank financial
covenants: minimum 80 days cash on hand measured annually, 66%
debt to capitalization measured at fiscal yearend (FYE) and 1.15
debt service coverage measured each fiscal quarter. Should SVHS
breach a covenant, the bank could accelerate the debt
* Competitive market which is intensifying with University of
Pittsburgh Medical Center's acquisition of SVHS's competitor
Hamot; SVHS's admissions declined by 3% in FY 2011 and market
share declined through 1Q calendar 2011 to 46.0% from 48% in
calendar 2010. Admissions through 9 months FY 2012 fell 15% and
patient days fell by 13% compared to the prior year.
* Modest service area demographics, with aging population and
declining population over past 10 years
Strengths
* Significant market presence in a fifteen county primary service
area (wide breadth of clinical services and Medicare Case Mix
Index 1.77).
* SVHC continues to benefit from referrals from the other members
of the Vantage Health Group, a coalition of thirteen healthcare
organizations in Western Pennsylvania and has experienced recent
success in recruiting physician practices. Management also reports
losses from employed physician has been reduced by $1 million
through 9 months annualized for FY 2012.
* Pension plan frozen in FY 2010 and funded as a cash balance
plan.
* Medical assistance modernization reimbursements in PA began in
FY 2011, with net impact for SVHS approximately $5 million
annually expected through FY 2013.
Outlook
The negative rating outlook reflects Moody's belief that SVHS
continued operational struggles and declining balance sheet
liquidity heighten letter of credit (LOC) bank risk, as SVHS has
limited flexibility to repay a material amount of debt if a
tripped debt covenant accelerated amortization of the debt.
What could change the rating - UP
Sustained and material operating improvement resulting in
strengthened liquidity and debt measures; ability to successfully
implement turnaround plans and counteract declining marketshare.
What could change the rating - DOWN
Further downgrade action could occur if a future covenant
violation triggers accelerated repayment on the LOC. Negative
rating pressure would also result from weaker financial trajectory
or further cash decline; additional debt without commensurate
increase in cash flow and liquidity growth; continued market share
and volume loss.
The principal methodology used in this rating was Not-For-Profit
Healthcare Rating Methodology published in March 2012.
SK FOODS: District Court Cancels April 23 Hearing in Appeal
-----------------------------------------------------------
District Judge Lawrence K. Karlton on Tuesday removed from the
court's calendar an April 23, 2012 hearing on an appeal in a
dispute involving Bradley D. Sharp, Chapter 11 Trustee of SK Foods
LP and various entities including Cary Scott Collins, the Bank of
Montreal, as administrative agent to the Debtors' lenders, the and
Internal Revenue Service.
Judge Karlton said that counsel for appellees, Farella Braun +
Martel LLP, has moved in the Bankruptcy Court to withdraw as
counsel and has similarly moved in some, but not all, of the
Bankruptcy Court appeals. A hearing on that motion is scheduled
for April 30, 2012 in the Bankruptcy Court.
Judge Karlton directed Farella to file a letter with the District
Court by April 24 advising the District court whether they seek a
withdrawal from the appeal.
A copy of Judge Karlton's April 17 order is available at
http://is.gd/ClTfhGfrom Leagle.com.
Last week, Judge Karlton vacated an April 18 hearing in one of the
the appellate cases, Bradley D. Sharp, Chapter 11 Trustee,
Appellant, v. SSC Farms 1, LLC, et al., Appellees, Civ. No. S-12-
0775 (E.D. Calif.).
On March 23, 2012, Cary Collins and his accounting firm, Collins
and Associates, filed the appeal from the adversary proceeding,
Sharp v. SSC Farms, I (In re SK Foods, L.P.), Bankr. 9-2692. On
March 28, 2012, Collins sought from the District Court an
emergency stay pending their appeal of what they say is a final
ruling of the Bankruptcy Court. Collins et al. assert that absent
the stay, they will be subject to a $1,000 per day fine imposed by
a separate contempt order issued by the Bankruptcy Court.
Judge Karlton said there are numerous procedural flaws in the
appeal and the emergency motion that render the District Court
unable to decipher what Collins et al. want, or how the relief
they seem to want could afford them any relief. The judge noted
that Collins et al. do not explain how granting them the relief
they seek will purge the separate contempt.
Judge Karlton denied Collins et al.'s emergency motion and gave
them until April 19 to file documents reflecting that they are
appealing a final bankruptcy court order. If they fail to do so,
the Clerk of the Court is directed to dismiss the appeal.
Judge Karlton temporarily stayed the bankruptcy court's order
imposing a $1,000 per day fine on Collins et al. until further
order.
A copy of the District Court's April 12, 2012 order is available
at http://is.gd/Ed6Z6bfrom Leagle.com.
About SK Foods
SK Foods LP ran a tomato processing facility. It filed for
Chapter 11 bankruptcy protection after being dropped by its
lending group. Creditors filed an involuntary Chapter 11 petition
against SK Foods LP and affiliate RHM Supply/ Specialty Foods Inc.
(Bankr. E.D. Calif. Case No. 09-29161) on May 8, 2009. SK Foods
had said it was preparing to file a voluntary Chapter 11 petition
when the creditors initiated the involuntary case. The Company
later put itself into Chapter 11 and Bradley D. Sharp was
appointed as Chapter 11 trustee. The Debtors were authorized on
June 26, 2009, to sell the business for $39 million cash to a U.S.
arm of Singapore food processor Olam International Ltd. The
replacement cost for the assets is $139 million, according to
Olam.
As reported by the Troubled Company Reporter on Feb. 19, 2010, a
federal grand jury returned a seven-count indictment charging
Frederick Scott Salyer, former owner and CEO of SK Foods, with
violations of the Racketeer Influenced and Corrupt Organizations
Act, in connection with his direction of various schemes to
defraud SK Foods' corporate customers through bribery and food
misbranding and adulteration, and with wire fraud and obstruction
of justice.
STEP PLAN: Case Summary & 10 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: STEP Plan Services, Inc.
300 First Stamford Place, Suite 201
Stamford, CT 06902
Bankruptcy Case No.: 12-50695
Chapter 11 Petition Date: April 16, 2012
Court: United States Bankruptcy Court
District of Connecticut (Bridgeport)
Judge: Alan H.W. Shiff
Debtor's Counsel: Jeffrey M. Sklarz, Esq.
ZEISLER & ZEISLER
558 Clinton Avenue
P.O. Box 3186
Bridgeport, CT 06605
Tel: (203) 368-4234
Fax: (203) 367-9678
E-mail: jsklarz@zeislaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $10,000,001 to $50,000,000
A copy of the Company's list of its 10 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/ctb12-50695.pdf
The petition was signed by Wayne H. Bursey, president.
SUGARHOUSE HSP: Moody's Upgrades CFR/PDR to 'B2'; Outlook Stable
----------------------------------------------------------------
Moody's Investor's Service upgraded SugarHouse HSP Gaming Prop.
Mezz, LP's Corporate Family and Probability of Default ratings to
B2 from B3. The company's second lien notes were also raised to B2
from B3. The rating outlook is stable.
The upgrade of HSP considers the successful ramp-up of the
company's SugarHouse Casino located in Philadelphia, PA near the
Delaware River waterfront. Since opening in September 2010,
SugarHouse has achieved substantial market share and win per unit
statistics in Eastern Pennsylvania as well as a relatively high
EBITDA margin demonstrating that its ramp up was not only
successful in terms of revenue, but also in terms of
profitability. Additionally, while a planned expansion is expected
to keep the company's leverage high at over 5 times, Moody's
believes the expansion has favorable risk/reward characteristics
that would ultimately enhance HSP's competitive position in terms
of product quality and quantity, and improve the company's longer-
term earnings potential.
Ratings upgraded:
Corporate Family Rating, to B2 from B3
Probability of Default Rating, to B2 from B3
$235 million second lien notes due 2016, to B2 (LGD 4, 55%) from
B3 (LGD 4, 55%)
Ratings Rationale
HSP's B2 Corporate Family Rating reflects the company's small,
single asset profile along with Moody's opinion that gaming
expansion by competitors in the northeastern U.S. will continue,
some of which could have a negative impact on SugarHouse's
operating results. Also considered is Moody's expectation that HSP
will pursue a partially debt-financed expansion. As a result,
debt/EBITDA (including Moody's standard analytical adjustments as
well as the application of 75% equity credit to the company's
original $159 million preferred equity interest) will likely
remain high at above 5.0 times.
Positive ratings consideration is given to the population density
and favorable demographics of SugarHouse's primary market area.
Moody's believes SugarHouse's favorable location and healthy
growth trends in the Philadelphia market are the primary reasons
for the casinos successful ramp-up in terms of revenue and
profitability.
The stable rating outlook reflects Moody's expectation that
SugarHouse's primary market area will continue to provide enough
customer traffic and demand for the casino to sustain its
operating margins and its ability to generate positive free cash
flow. The stable outlook also considers HSP's relaxed debt
maturity profile. There are no material scheduled debt maturities
until 2016 when the company's $235 million second lien notes
mature (excluding the 8.5 million in vendor financing payable
through September 2014) .
Ratings improvement is limited at this time given Moody's view
that there is a high probability that HSP will issue additional
debt under its permitted debt basket to fund a future expansion.
Longer-term, Moody's would consider an upgrade if HSP continues to
maintain EBITDA margins and win per unit levels at or above
competing casino facilities and the company demonstrates the
ability and willingness to maintain debt/EBITDA at or below 4.0
times.
Ratings could be lowered if SugarHouse's win per unit statistics
for slots and table games, and monthly gaming revenues as reported
by the Pennsylvania Gaming Control Board, exhibit a material
decline for any reason. Ratings could also be lowered if the
company does not demonstrate the ability to generate positive free
cash flow. Independent of any change to HSP's Corporate Family
Rating, and absent any other material changes to Moody's view of
the company's operating performance and capital structure, the
rating on the 2nd lien notes would likely be lowered one-notch if
the company uses its permitted debt basket to issue debt that
ranks ahead of the proposed notes to fund an expansion.
The principal methodology used in rating SugarHouse was the Global
Gaming Industry Methodology published in December 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
TELKONET INC: Delays Annual Report Due to Financial Restatements
----------------------------------------------------------------
Management of Telkonet, Inc., has recommended, and the Company's
Audit Committee has concluded, that the Company's audited
consolidated financial statements for the year ended Dec. 31,
2010, included in its 2010 annual report on Form 10-K, as well as
the interim consolidated financial statements for 2011 and 2010
included in its quarterly reports on Form 10-Q for the quarters
ended March 31, 2011, June 30, 2011 and Sept. 30, 2011, will need
to be restated as a result of certain adjustments.
The restatement will be required in large part due to the
aggregate impact of the Company's under accrual of sales tax,
interest and penalties, which amounted to approximately $815,000
for the periods including and prior to Sept. 30, 2011. In
addition, during the course of the Company's 2011 financial close
process, management has become aware of other potential
adjustments related to previously reported financial information
and is in the process of completing such analysis. The Company
currently anticipates that these other adjustments will include
adjustments to: deferred lease liability; accrued expenses;
accrued warranty and accumulated depreciation. The process of
preparing the audited financial statements to be included in the
Form 10-K for the fiscal year ended Dec. 31, 2011, including the
Company's evaluation of goodwill for impairment, is on-going and
the identification of additional adjustments is possible.
The restatement process has resulted in delays in obtaining and
compiling the financial data necessary to complete the restatement
and prepare the Company's financial statements for the fiscal year
ended Dec. 31, 2011. As a result, the Company has been unable to
complete the preparation and review of its Annual Report on Form
10-K for the period ended Dec. 31, 2011, in time to file it by the
prescribed deadline of March 30, 2012, without unreasonable effort
and expense. The Company is working diligently in order to file
its Form 10-K for the fiscal year ended Dec. 31, 2011, by no later
than the fifteenth calendar day following the prescribed deadline,
or April 16, 2012; however the Company can provide no assurance
that it will be able to file its Form 10-K within such time
period.
About Telkonet
Milwaukee, Wisconsin-based Telkonet, Inc. is a clean technology
company that develops and manufactures proprietary energy
efficiency and smart grid networking technology.
The Company's balance sheet at Sept. 30, 2011, showed $16.46
million in total assets, $3.99 million in total liabilities,
$856,434 in redeemable preferred stock Series A, $1.32 million in
redeemable preferred stock, Series B, and $10.29 million total
stockholders' equity.
RBSM LLP, in New York, expressed substantial doubt about the
Company's ability to continue as a going concern, following the
2010 financial results. RBSM noted that the Company has incurred
significant operating losses in current year and also in the past.
THERMODYNETICS INC: John Hughes Retires as Director
---------------------------------------------------
John J. Hughes, a director of Thermodynetics, Inc., since 2003,
retired from his position as a director. The directors and
officers of the Company expressed their sincere appreciation for
the valuable service and assistance Mr. Hughes provided to the
Company during his tenure on the board. The Company is not aware
of any disagreement between Mr. Hughes and the Company.
About Thermodynetics
Thermodynetics, Inc., is engaged in managing its real estate and
business holdings, and investing in other companies. In June 2011
the Company acquired the rights to a software program that is to
be marketed in the wagering industry. The software is designed to
assist individuals in selecting winning wagers in horse racing
events.
The Company is currently in default on their line of credit and
its long-term mortgages. During June, 2010, the Company's bank
commenced two legal proceedings. Certain of the Company's assets
are being offered for sale which, upon consummation of a
successful sale, would be expected to cure the defaults.
The Company's balance sheet at Dec. 31, 2011, showed $3.91 million
in total assets, $3.48 million in total liabilities and $431,000
stockholders' equity.
THERMOENERGY CORP: Incurs $1.7 Million Net Loss in Fourth Quarter
-----------------------------------------------------------------
ThermoEnergy Corporation reported a net loss of $1.73 million on
$2 million of revenue for the three months ended Dec. 31, 2011,
compared with a net loss of $1.35 million on $820,000 of revenue
for the same period a year ago.
The Company reported a net loss of $12.87 million on $5.58 million
of revenue in 2011, compared with a net loss of $9.85 million on
$2.87 million of revenue in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $8.78 million
in total assets, $13.27 million in total liabilities and a $4.49
million total stockholders' deficiency.
Mr. Cary Bullock, President and Chief Executive Officer of
ThermoEnergy said, "We are pleased with our strong financial
results in 2011 and expect that we will continue to increase
revenue on an annualized basis in 2012. The fourth quarter of
2011 was our strongest revenue quarter to date, and during 2011 we
successfully improved our balance sheet while eliminating our
secured debt. During the year we achieved numerous milestones
that we believe have positioned us for significant growth in
2012."
A copy of the press release is available for free at:
http://is.gd/vC6DrD
About ThermoEnergy Corporation
Little Rock, Ark.-based ThermoEnergy Corporation is a clean
technologies company engaged in the worldwide development of
advanced municipal and industrial wastewater treatment systems and
carbon reducing clean energy technologies.
As reported by the TCR on April 7, 2011, Kemp & Company, a
Professional Association, in Little Rock, Arkansas, expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
has incurred net losses since inception and will require
substantial capital to continue commercialization of the
Company's technologies and to fund the Companies liabilities.
TITAN PHARMACEUTICALS: Finding Strategic Partner for Probuphine
---------------------------------------------------------------
Marc Rubin, Titan Pharmaceuticals, Inc.'s Executive Chairman,
issued a letter to the Company's stockholders discussing among
other things, the Company's recent registered direct offering.
According to Mr. Rubin the Company determined to close this
financing to enable it to continue its progress in all areas and
fund its operations through the Company's submission of a New Drug
Application for Probuphine in opioid dependence, which is expected
to occur in September 2012.
As reported by the TCR on April 12, 2012, the Company has entered
into definitive agreements to sell 6,517,648 shares of common
stock for $5.5 million.
"We remain optimistic that we will conclude a strategic
partnership for Probuphine, which could provide Titan with an
additional source of funding. We are in ongoing discussions with
three to five interested companies," Mr. Rubin said.
A copy of the letter is available for free at:
http://is.gd/ooQNyr
About Titan Pharmaceuticals
South San Francisco, California-based Titan Pharmaceuticals, Inc.,
is a biopharmaceutical company developing proprietary therapeutics
primarily for the treatment of central nervous system (?CNS?)
disorders.
For 2011, OUM & Co. LLP, in San Francisco, California, expressed
substantial doubt about Titan Pharmaceuticals' ability to continue
as a going concern. The independent auditors noted that the
Company's cash resources will not be sufficient to sustain its
operations through 2012 without additional financing, and that the
Company also has suffered recurring operating losses and negative
cash flows from operations.
The Company reported a net loss of $15.2 million for 2011,
compared with a net loss of $5.6 million for 2010.
The Company's balance sheet at Dec. 31, 2011, showed $10.2 million
in total assets, $30.3 million in total liabilities, and a
stockholders' deficit of $20.1 million.
TRANS-LUX CORP: Reports $4 Million Net Income in Fourth Quarter
---------------------------------------------------------------
Trans-Lux Corporation reported net income of $4.03 million on
$6.72 million of revenue for the three months ended Dec. 31, 2011,
compared with a net loss of $1.78 million on $5.57 million of
revenue for the same period a year ago.
The Company reported a net loss of $1.42 million on $23.85 million
of revenue in 2011, compared with a net loss of $7.03 million on
$24.30 million of revenue in 2010.
"We continue to focus on executing our new business plan and
initiatives aimed at accelerating our long-term sales and
marketing objectives in the LED digital video and lighting
markets. With our restructuring efforts in full motion,
significant improvement in our cash flow position for year end
2011 versus 2010, and substantial new business development
opportunities ahead of us in the first quarter of 2012, Trans-Lux
continues to fortify its reputation as a leading manufacturer of
innovative LED technology system solutions," said the Company's
Chief Executive Officer J.M. Allain.
A copy of the press release is available for free at:
http://is.gd/Hl4UzO
About Trans-Lux Corporation
Norwalk, Conn.-based Trans-Lux Corporation (NYSE Amex: TLX) is a
designer and manufacturer of digital signage display solutions for
the financial, sports and entertainment, gaming and leasing
markets.
TRANS-LUX CORP: Corrects Report on Annual Meeting Results
---------------------------------------------------------
Trans-Lux Corporation amended its report on Form 8-K in which the
Company disclosed voting results for its annual meeting of
Stockholders held on March 6, 2012.
At the annual meeting of stockholders of the Company held on
March 6, 2012, the Company sought stockholder approval of, among
other things, (1) amendments and restatements to the Company's
Restated Certificate of Incorporation that would provide for (a)
an increase in the authorized number of shares of the Company's
Common Stock from 5,500,000 to 60,000,000 and the change in the
par value of the Company's Common Stock from $1.00 per share to
$0.001 per share, (b) the removal of Class A Stock from the
Company's authorized capital stock, (c) the removal of Class B
Stock from the Company's authorized capital stock and (d) the
removal of Article TWELFTH from the Certificate of Incorporation
and (2) the approval of the adoption of the Company's 2012 Long-
Term Incentive Plan.
On March 9, 2012, the Company disclosed that the above-referenced
actions were approved by the requisite vote of the Company's
stockholders. It has since come to the Company's attention that
the Amended and Restated Certificate of Incorporation attached to
the proxy statement distributed to stockholders prior to the
Annual Meeting that effected the changes to the Certificate of
Incorporation was not approved by the required votes. In
addition, because the 2012 Restated Certificate of Incorporation
was not validly approved, the 2012 LTIP was not validly approved.
The Company has filed with the office of the Delaware Secretary of
State a Certificate of Correction so that the 2012 Restated
Certificate of Incorporation, which was filed with that office on
March 7, 2012, will be deemed null and void. As a result, the
Series A Convertible Preferred Stock, par value $1.00 per share,
of the Company, which would have been converted into shares of
Company Common Stock upon the filing of the 2012 Restated
Certificate of Incorporation with the office of the Delaware
Secretary of State, remain outstanding.
About Trans-Lux Corporation
Norwalk, Conn.-based Trans-Lux Corporation (NYSE Amex: TLX) is a
designer and manufacturer of digital signage display solutions for
the financial, sports and entertainment, gaming and leasing
markets.
Trans-Lux reported a net loss of $7.03 million on $24.30 million
of total revenues for the year ended Dec. 31, 2010, compared with
a net loss of $8.79 million on $28.54 million of total revenues
during the prior year.
The Company also reported a net loss of $5.45 million on
$17.12 million of total revenues for the nine months ended Sept.
30, 2011, compared with a net loss of $5.25 million on
$18.73 million of total revenues for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed
$29.73 million in total assets, $35.31 million in total
liabilities, and a $5.58 million total stockholders' deficit.
As reported by the TCR on April 8, 2011, UHY LLP, in Hartford,
Connecticut, expressed substantial doubt about the Company's
ability to continue as a going concern. The independent auditors
noted that the Company has incurred significant recurring losses
from continuing operations and has a significant working capital
deficiency. In 2009, the Company had a loss from continuing
operations of $8.8 million and has a working capital deficiency of
$16.0 million as of Dec. 31, 2009. Furthermore, the Company is in
default of the indenture agreements governing its outstanding 9
1/2% Subordinated debentures and its 8 1/4% Limited convertible
senior subordinated notes so that the trustees or holders of 25%
of the outstanding Debentures and Notes have the right to demand
payment immediately.
TRANSTEXAS GAS: Tex. App. Ct. Affirms $260K Fees for Forcenergy
---------------------------------------------------------------
The Court of Appeals of Texas, Thirteenth District, in Corpus
Christi, affirmed a state court ruling granting declaratory relief
and $260,000 in attorney's fees in favor of Forcenergy Onshore,
Inc., and against TransTexas Gas Corp. The two oil and gas
companies sparred in a lawsuit involving contract claims. The
case is TransTexas Gas Corp., n/k/a SandRidge Onshore, LLC,
Appellant, v. Forcenergy Onshore, Inc., Appellee, No. 13-10-00446-
CV (Tex. App. Ct.). A copy of the Court's April 12, 2012
Memorandum Opinion is available at http://is.gd/ay6NCDfrom
Leagle.com.
About TransTexas Gas
TransTexas Gas Corporation, an oil and gas exploration company,
was incorporated in Delaware and maintained its principal place of
business in Harris County, Texas. In 1999, TransTexas was
suffering significant liquidity problems, found itself deeply in
debt. It filed for Chapter 11 bankruptcy protection (Bankr. D.
Del. Case No. 99-889). The company was reorganized in the
bankruptcy and emerged under a court-approved bankruptcy plan that
became effective in March 2000.
Under the 2000 plan, certain creditors of TransTexas -- the Senior
Noteholders -- received both Senior Secured Notes and Senior
Preferred Stock. The notes were to be redeemed in 2005 for
$200 million. The Senior Noteholders also elected four of the
five members of the company's board of directors, and those
directors hired John R. Stanley as TransTexas' CEO.
After the 2000 reorganization, TransTexas continued to have
financial problems, and by the end of 2002, had it again filed for
bankruptcy (Bankr. S.D. Tex. Case No. 02-21926). U.S. Bank was
named the liquidating trustee under the terms of a Senior
Noteholders Liquidating Trust Agreement established in connection
with the second Chapter 11 plan confirmed in August 2003.
TRIBUNE CO: Court Sets June 7 Plan Confirmation Hearing
-------------------------------------------------------
Judge Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware signed on April 17, 2012, an order approving
the supplemental disclosure statement relating to the Fourth
Amended Joint Plan of Reorganization for Tribune Company and its
debtor affiliates.
Judge Carey determined that the Supplemental Disclosure Document
contains adequate information with the meaning of Section 1125 of
the Bankruptcy Code.
The Court will convene a hearing on June 7, 2012, at 3:00 p.m.,
to consider confirmation of the Debtors' Plan. Objections to
confirmation of the Plan are due on or before May 21.
At the April 16, 2012 hearing, the bankruptcy judge said he will
approve the supplemental disclosure statement subject to certain
minor changes. Following the Court's ruling at the hearing, the
parties conferred, and consistent with the Court's ruling, agreed
upon certain modifications that were made to the Fourth Amended
DCL Plan and accompanying supplemental disclosure document.
Subsequently, Tribune; the Official Committee of Unsecured
Creditors; Oaktree Capital Management, L.P.; Angelo, Gordon &
Co., L.P.; and JPMorgan Chase Bank, N.A., submitted to Judge
Carey on April 17, 2012, a modified Fourth Amended Plan and
accompanying supplemental disclosure document to reflect those
modifications.
Specifically, the Plan provided that there will be no more than
three members of the Litigation Trust Advisory Board, consisting
of (i) Wilmington Trust Company, (ii) Deutsche Bank Trust Company
Americas, and (iii) a member of the Creditors' Committee that
will be a beneficiary of Litigation Trust Interests but excluding
the Senior Loan Agent. Wilmington Trust and Deutsche Bank will
each have the right to name a party to serve as its designee on
the Litigation Trust Advisory Board; provided that if such
designee ceases for any reason to be a member of the Litigation
Trust Advisory Board, then, so long as WTC or Deutsche Bank, as
applicable, continue to serve as Indenture Trustee, it will have
the right to appoint a successor member of the Litigation Trust
Advisory Board to replace its previous designee. Each member of
the Litigation Trust Advisory Board, including any designee, will
be identified in the Plan Supplement.
Clean and blacklined copies of the Plan dated April 17, 2012, are
available for free at:
http://bankrupt.com/misc/Tribune_Apr17Plan.pdf
http://bankrupt.com/misc/Tribune_Apr17Plan_blacklined.pdf
Clean and blacklined copies of the Supplemental Disclosure
Document dated April 17, 2012, are available for free at:
http://bankrupt.com/misc/Tribune_Apr17SDD.pdf
http://bankrupt.com/misc/Tribune_Apr17SDD_blacklined.pdf
A full-text copy of the Supplemental Disclosure Document Order
dated April 17, 2012 is available for free at:
http://bankrupt.com/misc/Tribune_Apr17SDDOrder.pdf
Solicitation Schedule
In light of the approval of the Supplemental Disclosure Document,
Judge Carey established procedures and schedule governing the
resolicitation of votes with respect to the Fourth Amended DCL
Plan.
The Court fixed April 13, 2012 as the Supplemental Voting Record
Date for purposes of determining (i) the Holders of Claims in the
Revoting Classes that are entitled to vote on the Fourth Amended
DCL Plan, and (ii) the Holders of Claims in the non-Revoting
Classes that, together with parties filing a notice of appearance
in these cases, governmental units having an interest in these
Chapter 11 cases, indenture trustees, and equity interest
holders, will be provided the notice regarding confirmation
hearing on the Fourth Amended DCL Plan and a copy of this order.
The DCL Plan Proponents are authorized to distribute, through the
Voting Agent, to Holders of Claims in the Revoting Classes:
(i) a copy of the Fourth Amended DCL Plan,
(ii) a copy of the Supplemental Disclosure Document,
(iii) an appropriate number of Supplemental Ballots,
Supplemental Beneficial Ballots, Supplemental Master
Ballots, Supplemental Election Forms, and/or Foreign
Ownership Certification Forms, as applicable, together
with corresponding Instructions and one or more pre-paid
return envelopes,
(iv) a copy of the Confirmation Hearing Notice, and
(v) a copy of the Resolicitation Order.
The Supplemental Ballots, Supplemental Beneficial Ballots,
Supplemental Master Ballots, and Supplemental Election Forms,
together with their accompanying Instructions for each of the
Revoting Classes are hereby approved.
The DCL Plan Proponents are authorized to resolicit votes to
accept or reject the Fourth Amended DCL Plan from the
Revoting Classes, in accordance with the procedures set forth in
the Resolicitation Motion. Judge Carey ruled that the procedures
previously established by the Bankruptcy Court to tabulate votes
and elections with respect to the DCL Plan will also apply to the
tabulation of votes and elections on any Supplemental Ballots,
Supplemental Beneficial Ballots, Supplemental Master Ballots, and
Supplemental Election Forms, as applicable, for the resolicitation
of votes on and elections under the Fourth Amended DCL Plan.
The Voting Agent will complete mailing of the solicitation
materials on or before April 23, 2012.
Supplemental Ballots, Supplemental Master Ballots, and
Supplemental Election Forms must be properly executed and
completed, and the originals thereof will be delivered to the
Voting Agent so as to be actually received on or before
May 21, 2012.
The Voting Agent is required to file the results of its tabulation
of votes to accept or reject the Fourth Amended DCL Plan and
accompanying election results no later than May 29, 2012.
In addition to the deadlines established in this order, Judge
Carey affirmed the deadlines previously established by the Second
Supplemental Scheduling Order Relating to Plan Confirmation. The
applicable deadlines are:
* May 21, 2012 -- Deadline to complete all discovery
relating to confirmation of the
Fourth Amended DCL Plan.
* May 21, 2012 -- Supplemental Voting Deadline
* May 21, 2012 -- Deadline to object to confirmation
of the Fourth Amended DCL Plan.
* June 1, 2012 -- Deadline to file briefs in support
of confirmation of the Fourth
Amended DCL Plan and replies to
confirmation objections
* June 7, 2012 -- Confirmation Hearings
If any Holder of a Claim wishes to have its Claim allowed for
purposes of voting under the Fourth Amended DCL Plan in a manner
that is inconsistent with the amount or c1assifications set forth
on the Supplemental Ballots it received, or if any party wishes
to have their claims temporarily allowed for voting purposes
only, such Holder must file with the Court, on or before May 11,
2012, a motion for an order pursuant to Rule 3018(a) of the
Federal Rules of Bankruptcy Procedure. With respect to any
timely filed 3018 Motion, the Supplemental Ballots in question
will be counted for voting purposes on the Fourth Amended DCL
Plan in the amount as agreed by the DCL Plan Proponents and the
applicable Holder or, in the absence of agreement, in the amount
established by the Court. The Court will consider any and all
3018 Motions on May 29, 2012.
The modified form of Credit/Refund Notice is approved and the
Debtors are hereby authorized to send such Credit/Refund Notice
to potential Holders of Customer Program Claims that that Debtors
have identified as not having previously received the
Credit/Refund Notice. The Debtors are not required to distribute
Resolicitation Packages to Holders of Customer Program Claims.
To the extent any potential Holders of Customer Program Claims
contact the Debtors seeking solicitation materials in response to
such Credit/Refund Notice, the Debtors will have the right, but
not the obligation, to satisfy any Customer Program Claim
pursuant to the authority granted to the Debtors under the
Customer Programs Order, in which case the Holder of any such
Claim will not be entitled to vote on the Fourth Amended DCL
Plan.
The deadline previously established by the Court regarding the
submission of Media Ownership Certifications is not modified by
this order. All applicable provisions of the Court's Prior
Solicitation Orders will continue in full force and effect for
the purposes ofresolicitation of votes on and elections under the
Fourth Amended DCL Plan, except as otherwise expressly modified
in this Order, Judge Care ruled.
Confirmation Hearing
Objections to confirmation of the Fourth Amended DCL Plan must:
be made in writing; specify the legal and factual basis of any
objection to the Fourth Amended DCL Plan; and be filed with the
Court so that they are received on or before May 21, 2012 at
11:59 p.m. (prevailing Eastern time) by counsel to the DCL Plan
Proponents.
The DCL Plan Proponents will file responses, if any, to any
objections to confirmation of the Fourth Amended DCL Plan on or
before June 1, 2012. The DCL Plan Proponents will also file with
the Court their proposed findings of fact and conclusions of law
and their memorandum of law in support of confirmation of the
Fourth Amended DCL Plan on or before such date.
To the extent that any amendments to the Plan Supplement are
required in order to conform the terms of any Exhibits to the
terms of the Fourth Amended DCL Plan, the Debtors will file an
amended Plan Supplement on or before May 4, 2012.
The Confirmation Hearing Notice and the Publication Notice are
approved. The Debtors will cause the Publication Notice to be
published once each in the national editions of The Wall Street
Journal, The New York Times, the Los Angeles Times, and the
Chicago Tribune not less than 28 days before the Objection
Deadline.
About Tribune Co.
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8,
2008. The Debtors proposed Sidley Austin LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North America LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets
and $12,972,541,148 in total debts. Chadbourne & Parke LLP and
Landis Rath LLP serve as co-counsel to the Official Committee of
Unsecured Creditors. AlixPartners LLP is the Committee's
financial advisor. Landis Rath Moelis & Company serves as the
Committee's investment banker. Thomas G. Macauley, Esq., at
Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the
Committee in connection with the lawsuit filed against former
officers and shareholders for the 2007 LBO of Tribune.
Protracted negotiations and mediation efforts and numerous
proposed plans of reorganization filed by Tribune Co. and
competing creditor groups have delayed Tribune's emergence from
bankruptcy. Many of the disputes among creditors center on the
2007 leveraged buyout fraudulence conveyance claims, the
resolution of which is a key issue in the bankruptcy case. The
bankruptcy court has scheduled a May 16 hearing on Tribune's plan.
Tribune CRO Don Liebentritt said it is possible the media company
could emerge late in the third quarter of 2012.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
UNIGENE LABORATORIES: Appoints Jack Wyszomierski to Board
---------------------------------------------------------
Unigene Laboratories, Inc., appointed Jack Wyszomierski to its
Board of Directors.
Mr. Wyszomierski received an option to purchase 30,000 shares of
the Company's common stock, which option will vest in equal
installments of 1/3 over a period of three years, and such other
compensation in accordance with the Company's director
compensation policies.
From 2004 until his retirement in 2009, Mr. Wyszomierski was the
Executive Vice President and Chief Financial Officer of VWR
International, LLC, a supplier of laboratory supplies, equipment
and supply chain solutions to the global research laboratory
industry. From 1982 to 2003, Mr. Wyszomierski held positions of
increasing responsibility within the finance group at Schering-
Plough Corporation culminating with his appointment as Executive
Vice President and Chief Financial Officer in 1996.
Joel Tune, Unigene's Lead Independent Director, stated, "As the
head of the Nominating and Governance Committee, it has been a
high priority for me to ensure Unigene's Board is well represented
in all functional disciplines by best-in-class industry
executives. We are thrilled we were able to attract a high-
caliber finance and pharmaceutical executive such as Jack to our
Board and welcome him to Unigene. Jack brings over 30 years of
financial expertise and in-depth knowledge of the healthcare
industry. We look forward to Jack's many contributions as we work
closely with Ashleigh Palmer and the management team to address
the substantial debt and capital structure, Unigene's priority
challenge this year."
Jack Wyszomierski, commented, "I am excited to join the Unigene
team at this important time for the Company and look forward to
working closely with the Board and management team moving
forward."
Mr. Wyszomierski has been a member of the Board of Directors and
Chairman of the Audit Committee of Exelixis, Inc., a publicly
traded biotechnology company, since 2004, a member of the Board of
Directors and Audit, Compensation, and Nomination and Governance
Committees of Athersys, Inc., a publicly traded biopharmaceutical
company, since 2010, a member of the Board of Directors and
Compensation and Audit Committees of Xoma, Ltd., a publicly traded
biopharmaceutical company since 2010 and Chairman of the Audit
Committee since 2011, and a member of the Board of Directors and
Chairman of the Audit Committee of HGI Global Holdings, Inc., a
privately held home healthcare distribution company since 2011.
Mr. Wyszomierski holds a M.S. in Industrial Administration and a
B.S. in Administration and Management Science and Economics from
Carnegie Mellon University.
About Unigene
Unigene Laboratories, Inc. OTCBB: UGNE) -- http://www.unigene.com/
-- is a biopharmaceutical company focusing on the oral and nasal
delivery of large-market peptide drugs.
Unigene reported a net loss of $17.92 million in 2011, a net loss
of $27.86 million in 2010, and a net loss of $13.38 million in
2009.
The Company's balance sheet at Dec. 31, 2011, showed $17.67
million in total assets, $72.81 million in total liabilities and a
$55.13 million total stockholders' deficit.
Grant Thornton LLP, in New York, expressed substantial doubt about
Unigene Laboratories' ability to continue as a going concern
following the Company's 2009 results. The firm noted that the
Company has incurred a net loss of $13,400,000 during the year
ended Dec. 31, 2009 and has an accumulated deficit of
approximately $143,000,000 as of Dec. 31, 2009. As of that
date, the Company's current liabilities exceeded its current
assets by $1,251,000 and its total liabilities exceeded total
assets by $30,442,000.
UNITED SALVAGE: Metal Recycler Files for Chapter 11
---------------------------------------------------
Halifax, North Carolina-based United Salvage & Auto USA, Inc.,
filed a Chapter 11 petition (Banrk. E.D.N.C. Case No. 12-02910) on
April 16, 2012.
The Debtor is represented by Trawick H Stubbs, Jr., Esq., at
Stubbs & Perdue, P.A., in New Bern.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that United Salvage is a scrap-metal processor. The
company operates in the eastern part of North Carolina and
Virginia. Revenue of $25.2 million in 2010 grew to $33.3 million
in 2011. Through April 10 this year, revenue was $3.8 million.
The Debtor disclosed in its schedules assets of $3.3 million and
debt totaling $13 million, including $7.6 million in secured
claims. The secured creditor with the largest claim, Branch
Banking & Trust Co. from Wilson, North Carolina, is owed about
$4.5 million.
A copy of the bankruptcy petition is available at
http://bankrupt.com/misc/nceb12-02910.pdf
US POSTAL: CCAGW Denounces Senate for "Mailing in" Bailout
----------------------------------------------------------
The Council for Citizens Against Government Waste slammed S. 1789,
the 21st Century Postal Service Act, for delaying crucial United
States Postal Service (USPS) reforms, including the closure of
3,700 post offices and 250 mail processing facilities, as well as
ending six-day mail delivery.
The bill, which was altered before it reached the Senate floor,
would reduce the number of possible processing facility closures
from 252 to 125, add several complex requirements to the process
for post office closings, and require USPS to wait two years
before stopping Saturday mail delivery. In addition, the Postal
Service would receive an $11 billion cash infusion drawn from
"overpayments" made in previous years to a retirement fund.
These band-aids will not stop the massive flow of red ink at USPS,
which lost $8.5 billion in fiscal year (FY) 2010 and $5.1 billion
in FY 2011. The 2011 loss would have been dramatically larger if
Congress had not postponed $5.5 billion in scheduled payments to
prefund USPS's retiree health benefits. An April 12, 2010
Government Accountability Office report stated that the USPS
business model "is not viable due to USPS's inability to reduce
costs sufficiently in response to continuing mail volume and
revenue declines." Decreased demand has resulted in dwindling
incomes; first class mail, which makes up more than half of USPS
revenue, peaked in 2006, and fell 20 percent over the next four
years. On April 22, 2010, former Postmaster General (PmG) John
Potter announced that the USPS will lose $238 billion over the
next 10 years. In today's Portland Daily Sun, S. 1789 co-sponsor
Sen. Susan Collins (R-Maine) acknowledged that the Postal Service
"is in danger of dying."
"The legislation that the Senate will consider today flies in the
face of the massive fiscal crisis at the USPS," said CAGW
President Tom Schatz. "As people increasingly communicate and pay
bills electronically, the agency's role has diminished. As a
result, the size and scope of USPS must shrink. Postponing the
termination of Saturday delivery and the shutdown of extraneous
postal facilities, both of which would save the Postal Service
billions, will doom the agency to bankruptcy."
In a Nov. 21, 2011 speech before the National Press Club, PmG
Patrick Donahoe pointed out that "roughly 25,000 out of our 32,000
Post Offices operate at a loss." He added that thousands of post
offices have less than $20,000 in annual revenue yet cost more
than $60,000 to operate, and many of these unprofitable locations
are a few miles away from another post office. He bemoaned
negative congressional response to even the slightest effort to
close any post office, as well as interference in other proposals
to address the USPS deficit.
"When the boat is sinking, no one stands around debating how to
get rid of the water," added Schatz. "Everyone grabs the biggest
bucket on board and starts bailing. Instead, lawmakers are kicking
the problem down the road, which will eventually deliver the bill
to taxpayers to finance this rescue."
The Council for Citizens Against Government Waste (CCAGW) is the
lobbying arm of Citizens Against Government Waste, the nation's
largest nonpartisan, nonprofit organization dedicated to
eliminating waste, fraud, abuse, and mismanagement in government.
About U.S. Postal Service
A self-supporting government enterprise, the U.S. Postal Service
is the only delivery service that reaches every address in the
nation, 151 million residences, businesses and Post Office Boxes.
The Postal Service receives no tax dollars for operating expenses,
and relies on the sale of postage, products and services to fund
its operations. With 32,000 retail locations and the most
frequently visited website in the federal government, usps.com,
the Postal Service has annual revenue of more than $65 billion and
delivers nearly 40 % of the world's mail. If it were a private
sector company, the U.S. Postal Service would rank 35th in the
2011 Fortune 500. In 2011, the U.S. Postal Service was ranked
number one in overall service performance, out of the top 20
wealthiest nations in the world, Oxford Strategic Consulting.
Black Enterprise and Hispanic Business magazines ranked the Postal
Service as a leader in workforce diversity. The Postal Service
has been named the Most Trusted Government Agency for six years
and the sixth Most Trusted Business in the nation by the Ponemon
Institute.
The Postal Service receives no tax dollars for operating expenses
and relies on the sale of postage, products and services to fund
its operations.
The U.S. Postal Service ended the first three months of its 2012
fiscal year (Oct. 1 - Dec. 31, 2011) with a net loss of $3.3
billion. Management expects large losses to continue until the
Postal Service has implemented its network re-design and down-
sizing and has restructured its healthcare program. Additionally,
the return to financial stability requires legislation which gives
the Postal Service typical commercial freedoms, including delivery
flexibility, returns over $10 billion of amounts overpaid to the
Federal Government and resolves the need to prefund retiree
healthcare at rates not assessed any other entity in the United
States.
To return to profitability, CEO Patrick Donahoe has advanced a
plan to reduce annual costs by $20 billion by 2015. The plan
includes continued aggressive actions to generate additional
revenue and reduce operating expenses. To reach the goal, the
Postal Service also needs changes in the law. "Passage of
legislation is urgently needed that provides the Postal Service
with the speed and flexibility needed to cut costs that are not
under our control, including employee health care costs," Donahoe
said in February 2012 "The changes will give the Postal Service a
bright future and provide the nation with affordable and reliable
delivery for generations to come."
USG CORP: Lowers Net Loss to $27 Million in 1st Quarter of 2012
---------------------------------------------------------------
USG Corporation reported a net loss of $27 million on $812 million
of net sales for the three months ended March 31, 2012, compared
with a net loss of $105 million on $721 million of net sales for
the same period a year ago.
The Company's balance sheet as of March 31, 2012, showed $3.73
billion in total assets, $3.57 billion in total liabilities and
$154 million in total stockholders' equity.
"Despite continuing low demand, our emphasis on achieving
operating profit is succeeding, and continues to be a top
priority," said James S. Metcalf, Chairman, President and CEO.
"Although demand in our core markets still remains near historical
lows," Metcalf said, "we are confident our strategy will continue
to move us toward positive net earnings."
A copy of the press release is available for free at:
http://is.gd/FuTlTS
About USG Corporation
Based in Chicago, Ill., USG Corporation -- http://www.usg.com/--
through its subsidiaries, manufactures and distributes building
materials producing a wide range of products for use in new
residential, new nonresidential and repair and remodel
construction, as well as products used in certain industrial
processes.
The company filed for Chapter 11 protection on June 25, 2001
(Bankr. Del. Case No. 01-02094). When the Debtors filed for
protection from their creditors, they disclosed $3,252,000,000 in
assets and $2,739,000,000 in debts. The Debtors emerged from
bankruptcy protection on June 20, 2006.
The Company reported a net loss of $390 million in 2011 and a net
loss of $405 million in 2010.
* * *
As reported by the TCR on Aug. 15, 2011, Standard & Poor's Ratings
Services lowered its corporate credit rating on USG Corp. to 'B'
from 'B+'.
"The downgrade reflects our expectation that USG's operating
results and cash flow are likely to be strained over the next year
due to the ongoing depressed level of housing starts and still-
weak commercial construction activity," said Standard & Poor's
credit analyst Thomas Nadramia. "It is now more likely, in
our view, that any meaningful recovery in housing starts may be
deferred until late 2012 or into 2013. As a result, the risk that
USG's liquidity in the next 12 to 24 months will continue to erode
(and be less than we incorporated into our prior ratings) has
increased. The ratings previously incorporated a greater
improvement in housing starts, which would have enabled USG to
reduce its negative operating cash flow in 2012 and achieve
breakeven cash flow or better by 2013."
In the Sept. 14, 2011, edition of the TCR, Fitch Ratings has
downgraded USG Corporation's Issuer Default Rating (IDR) to 'B-'
from 'B'. The Rating Outlook remains Negative.
The ratings downgrade and the Negative Outlook reflect Fitch's
belief that underlying demand for the company's products will
remain weak through at least 2012 and the company's liquidity
position is likely to deteriorate in the next 18 months. With the
recent softening in the economy and lowered economic growth
expectations for 2011 and 2012, the environment may at best
support a relatively modest recovery in housing metrics over the
next year and a half. Fitch had previously forecast a slightly
more robust housing environment in 2011 and 2012. Moreover, new
commercial construction is expected to decline further this year
and may only grow moderately next year.
VIASYSTEMS INC: S&P Rates Proposed $550-Mil. Senior Notes 'BB-'
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' issue-level
rating (the same as the corporate credit rating) to Viasystems
Inc.'s proposed $550 million senior secured notes issuance.
Viasystems Inc. is a wholly owned subsidiary of St. Louis-based
printed circuit board (PCB) manufacturer Viasystems Group Inc. "We
also assigned a '4' recovery rating to the notes, indicating an
expectation for average (30%-50%) recovery in the event of a
payment default," S&P said.
"We removed our existing issue-level rating on Viasystems Group's
debt from CreditWatch with negative implications, where it was
placed on April 5, 2012. This rating action is based on our
expectation of higher enterprise value pro forma for the
acquisition of PCB manufacturer DDi Corp.," S&P said.
"Separately, on April 5, 2012, we affirmed our 'BB-' corporate
credit rating on Viasystems Group since it had debt capacity
within the current rating to complete the proposed acquisition of
DDi," S&P said.
"The rating on Viasystems reflects our expectations that the
company will maintain leverage commensurate with a 'significant'
financial risk profile, despite higher debt levels related to the
proposed acquisition of DDi," said Standard & Poor's credit
analyst William Backus. "We expect that EBITDA will remain near
current pro forma levels, which we estimate at $183 million for
the latest 12 months ended Dec. 31, 2011. We also expect that
currently elevated capital expenditures will decline in 2013,
allowing the company to accumulate cash and or pre-amortize debt.
The rating allows for leverage under 4.0x through a cycle and we
expect pro forma leverage to rise to about 3.2x from 1.7x 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," added
Mr. Backus. "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 total
transaction value for the acquisition is $283 million," S&P said.
"Our stable rating outlook on Viasystems reflects our expectation
that leverage will remain within our significant financial risk
profile, despite higher funded debt and integration costs related
to the proposed acquisition of DDi. The company's weak business
profile limits an upgrade in the near term, although if the
company continues to strengthen its market position, we could
revise our business risk profile longer term," S&P said.
"Alternatively, we could lower the rating if competitive pressures
or a weakening of end-market demand significantly reduce
profitability or if the company pursues another sizable debt-
financed acquisition which results in sustained leverage above
4x," S&P said.
VISUALANT INC: Ascendiant, Et Al., to Sell 7.6MM Common Shares
--------------------------------------------------------------
Visualant, Incorporated, filed with the U.S. Securities and
Exchange Commission a Form S-1 registration statement covering the
resale of up to 7,600,000 shares of the Company's common stock,
$.001 par value per share, including:
(i) 1,000,000 shares of common stock issued to Coventry Capital
LLC, on Feb. 7, 2012;
(ii) up to 204,000, 366,000 and 30,000 shares of common stock
issuable upon exercise of the Company's warrants granted to
National Securities Corporation, Steven Freifeld and Vince
Calicchia, respectively, on March 12, 2012; and
(iii) up to 6,000,000 shares of common stock issuable to
Ascendiant Capital Partners LLC under a Securities
Purchase Agreement dated June 17, 2011.
The Company's common stock trades on the OTCBB under the symbol
("VSUL"). On March 30, 2012, the last reported sale price for the
Company's common stock as reported on OTCBB was $0.10 per share.
The proposed maximum aggregate offering price is $760,000.
A copy of the prospectus is available for free at:
http://is.gd/WKFVBc
About Visualant Inc.
Seattle, Wash.-based Visualant, Inc., was incorporated under the
laws of the State of Nevada on October 8, 1998. The Company
develops low-cost, high speed, light-based security and quality
control solutions for use in homeland security, anti-
counterfeiting, forgery/fraud prevention, brand protection and
process control applications.
Visualant reported a net loss of $2.39 million for the year ended
Sept. 30, 2011, compared with a net loss of $1.14 million during
the previous year.
The Company's balance sheet at Dec. 31, 2011, showed $4.23 million
in total assets, $5.96 million in total liabilities, $39,504 in
noncontrolling interest and a $1.76 million in total stockholders'
deficit.
WABASH NATIONAL: S&P Rates Corporate Credit 'B+'; Outlook Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'B+'
corporate credit rating on Lafayette, Ind.-based Wabash National
Corp. The outlook is stable.
"At the same time, we assigned or preliminary 'B+' issue-level and
preliminary '4' recovery ratings on the company's $300 million
term loan B, indicating our expectation of average (30% to 50%)
recovery for debtholders in the event of a payment default," S&P
said.
"The ratings reflect our view of Wabash National Corp.'s business
profile as 'weak' and the financial profile as 'aggressive'," S&P
said..
"We believe the acquisition of Walker has the potential to
transform Wabash into a more profitable company with steady cash
flow and the opportunity to expand into new end markets and into
other regions and countries," said Standard & Poor's credit
analyst Lawrence Orlowski. "We expect positive sales growth in
2012, boosted by solid North American trailer and aftermarket
demand. Moreover, Wabash continues to take actions to improve its
commodity cost recovery mechanisms in the Wabash segment. We
believe some cost synergies with Walker are possible in the next
12 months and that free cash flow should enable some voluntary
debt reduction over the next few years."
"We expect commercial-vehicle production in North America to rise
over 10% in 2012. For example, FTR Associates is projecting
trailer production in North America to increase by 18% in 2012.
Still, the strength of recovery in commercial-vehicle demand
remains subject to the sustainability of economic recovery in many
markets and we believe sluggish economic news could slow the
growth in trailer orders. Although the average age of the
equipment has reached record highs of almost 9 years, we believe
trucking companies could allow their fleets to age further in this
economic cycle if the recovery in freight tonnage falters," S&P
said.
WIDEOPENWEST FINANCE: Moody's Expects CFR to Remain 'B2'
--------------------------------------------------------
Moody's Investors Service expects the corporate family rating
(CFR) of WideOpenWest Finance, LLC (WOW) to remain B2 should it
execute on its proposed acquisition of Knology, Inc. (Knology, B1
CFR).
Ratings Rationale
Moody's believes the transaction will incorporate both incremental
debt and an equity contribution from Avista Capital Partners,
which currently owns WOW. Based on WOW's historic tolerance for
raising leverage related to acquisitions and dividends as well as
Knology's currently stronger credit profile, Moody's anticipates
leverage of the combined entity will be in the high 6 times debt-
to-EBITDA range, in line with WOW's existing leverage. Knology's
leverage for the full year ended 2011 was approximately 4.2 times
debt-to-EBITDA, and WOW's was approximately 6.6 times.
Moody's believes the transaction will involve a refinancing of the
majority of the companies' existing capital structures and all
rated debt. Given change of control provisions within Knology's
all bank capital structure, Moody's considers repayment of
Knology's existing rated debt likely. Given the relatively near
term maturities of WOW's existing rated debt (June 2013 for the
first lien revolver, June 2014 for the first lien term loan, and
June 2015 for the second lien term loan), Moody's expects the
company will address its debt capital structure as part of this
transaction. Should the transaction proceed as expected, Moody's
would likely withdraw all existing Knology ratings.
The transaction would create execution risk, and costs related to
achieving synergies and integration would likely consume cash,
making a good liquidity profile pro forma for the deal essential
to maintaining WOW's B2 corporate family rating. However, benefits
of the proposed transaction include advantages of greater scale,
which would likely yield cost savings on purchases of programming
and equipment. Furthermore, Moody's believes the combination would
advance WOW's still nascent commercial business (estimated at less
than 5% of total revenue), given Knology's experience in this
segment (commercial represents slightly over 20% of Knology's
total revenue).
The principal methodology used in rating WideOpenWest Finance LLC
was the Global Cable Television Industry Methodology published in
July 2009. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Headquartered in Englewood, Colorado, WideOpenWest Finance, LLC
(WOW) is a competitive broadband provider offering cable TV
(approximately 436,000 subscribers), high speed Internet services
(413,000) and telephony (253,000) to residential and commercial
customers in Illinois, Michigan, Ohio and Indiana. Its revenue for
2011 was approximately $615 million. Avista Capital Partners owns
the company.
Knology, Inc. provides video, voice, data, and communications
services to residential and business customers in the southeastern
and midwestern United States. As of December 31, 2011, it served
approximately 257,000 video, 262,000 high speed data, and 277,000
telephone subscribers. As an "overbuilder," the company
historically built or acquired networks in regions overlapping
that of larger incumbent cable operators, such as Mediacom (B1)
and Comcast (Baa1). Knology attempts to differentiate itself with
high quality product offerings and efficient but localized
customer service. Knology generated revenue of approximately $520
million for the year ended
December 31, 2011.
WIDEOPENWEST FINANCE: S&P Puts 'B-' Corp. Credit Rating on Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on
Englewood, Colo.-based cable service provider WideOpenWest Finance
LLC (WOW), including the 'B-' corporate credit rating, on
CreditWatch with positive implications following its announcement
of a definitive agreement to acquire West Point, Ga.-based cable
service provider Knology Inc. (B+/Stable/--) for about $1.5
billion. The acquisition is subject to approval by regulators and
Knology shareholders and the company expects it to close in the
second half of 2012.
"The CreditWatch placement reflects the possibility that we may
raise the ratings on WOW given the increased scale of the combined
company and greater geographic diversity," said Standard & Poor's
credit analyst Allyn Arden. "These factors could support an
improved business risk profile assessment, which we currently view
as 'weak' for each company individually. The weak business risk
profiles also reflect maturing industry conditions and aggressive
competition from better capitalized incumbent cable and telephone
companies."
"We view the proposed transaction as complementary," added Mr.
Arden, "given the two companies' positions as cable overbuilders
(competitors to the incumbent cable provider) in most of their
markets, where they have relied on localized marketing strategies
and superior customer service to capture market share from the
incumbents. The acquisition would increase WOW's basic video
subscriber base by around 60% to about 692,000 customers, making
it the eighth-largest cable provider in the U.S. Video penetration
for the combined company is about 25%, which is typical of an
overbuilder and we do not expect any material growth from video
customers over the next few years except from market expansion
activity."
"The transaction improves WOW's geographic diversity given that
Knology has operations primarily in the Southeast and Midwest
U.S., whereas WOW's footprint is predominantly in Ohio, Michigan,
Indiana, and Illinois. Knology operates in lower density service
areas, where competition from the incumbent cable operators is not
as aggressive. Moreover, AT&T and Verizon have deployed their
respective U-Verse and FiOS video services in only a few of
Knology's markets. Knology also has a large presence in the
commercial segment, which accounts for about 20% of its revenue,
and has good capabilities to offer business customers Internet
protocol (IP)-based products and services," S&P said.
"Excluding potential operating synergies, we estimate that pro
forma operating lease-adjusted debt to EBITDA will be under 7.0x,
compared with about 6.6x for WOW on a stand-alone basis as of Dec.
31, 2011. However, we note that leverage at transaction close will
depend on the amount of equity contributed by WOW's financial
sponsor owners. We also believe that WOW will have reasonable
prospects to improve credit measures in the near term from EBITDA
growth, but we expect financial policies to remain aggressive,"
S&P said.
"In resolving the CreditWatch listing, we will consider the
operating outlook for the combined company and its business
strategy, and whether the scale and diversity benefits warrant a
revised business risk profile assessment. Another key rating
consideration will be WOW's financial policy, especially given its
history of shareholder-friendly actions. We expect the CreditWatch
to be resolved with an affirmation of the current rating or an
upgrade of no more than one notch. We also will reassess recovery
prospects based on the new capital structure of the combined
entity," S&P said.
WIN GLOBAL: Ziv Haft Raises Going Concern Doubt
-----------------------------------------------
Win Global Markets, Inc., filed on April 16, 2012, its annual
report on Form 10-K for the fiscal year ended Dec. 31, 2011.
Ziv Haft Certified Public Accountants (Isr.) expressed substantial
doubt about Win Global Markets' ability to continue as a going
concern. The independent auditors noted that the Company has
suffered losses from operations and has negative cash flows.
The Company reported a net loss of $2.23 million on $1.31 million
of revenues for 2011, compared with a net loss of $1.88 million on
$191,278 of revenues for 2010.
The Company's balance sheet at Dec. 31, 2011, showed $1.73 million
in total assets, $1.89 million in total liabilities, and a
stockholders' deficit of $157,605.
A copy of the Form 10-K is available for free at:
http://is.gd/2G1nkY
Located in Tel-Aviv, Israel, Win Global Markets, Inc., is engaged
in the business of offering worldwide online trading of binary
options. The Company's shares of common stock are currently
traded on the Over-the-Counter ("OTC") Bulletin Board under the
symbol WGMI.OB.
WPCS INTERNATIONAL: William Whitehead Resigns as Director
---------------------------------------------------------
William Whitehead resigned for personal reasons, effective
April 3, 2012, as a director of WPCS International Incorporated.
In submitting his resignation, Mr. Whitehead did not express any
disagreement with the Company on any matter relating to the
registrant's operations, policies or practices.
About WPCS International
Exton, Pennsylvania-based WPCS International Incorporated provides
design-build engineering services that focus on the implementation
requirements of communications infrastructure. The Company
provides its engineering capabilities including wireless
communication, specialty construction and electrical power to the
public services, healthcare, energy and corporate enterprise
markets worldwide.
As reported by the TCR on Dec. 8, 2011, WPCS International and its
United Stated based subsidiaries, previously entered into a loan
agreement, dated April 10, 2007, as extended, modified and amended
several times, with Bank of America, N.A. The Company is seeking
alternative debt financing and has conducted discussions with
other senior lenders to replace the Loan Agreement. The Company
may not be successful in obtaining alternative debt financing or
additional financing sources may not be available on acceptable
terms. If the Company is required to repay the Loan Agreement,
the Company has sufficient working capital to repay the
outstanding borrowings.
The Company reported a net loss attributable to WPCS of $12.02
million for the nine months ended Jan. 31, 2012, compared with a
net loss attributable to WPCS of $9.80 million for the same period
during the prior year.
The Company's balance sheet at Jan. 31, 2012, showed
$37.69 million in total assets, $23.21 million in total
liabilities, and $14.48 million in total equity.
ZOGENIX INC: Has Office Sublease Agreement with Relational
----------------------------------------------------------
Zogenix, Inc., on April 12, 2012, entered into an Office Sublease
with Relational Investors, LLC, to lease approximately 13,124
rentable square feet of office space from Relational Investors on
the 6th floor of the building located at 12400 High Bluff Drive,
Suite 650, San Diego, California 92130. The Company intends to
use the subleased premises as its new corporate headquarters, and
the new space will replace the Company's former San Diego office
lease of approximately 12,929 rentable square feet expiring in
April 2012. The space is leased to Relational Investors by Kilroy
Realty, L.P., under an office lease dated as of June 1, 2004, as
amended. On April 13, 2012, Kilroy consented to the entry into
the Sublease by the Company and Relational Investors, which date
is the effective date of the Sublease.
The term of the Sublease is expected to commence on April 23,
2012, and will expire on Nov. 27, 2014. The initial base rent
will be $34,122 per month, with rent being abated for the second,
third and fourth months of the Sublease term. The base rent will
increase approximately 3% on a yearly basis throughout the term.
The Sublease also requires the Company to pay, following the first
12 lease months, additional rent consisting of a portion of common
area and pass-through expenses in excess of base year amounts.
The Sublease also contains customary provisions allowing
Relational Investors to terminate the Sublease if the Company is
rendered insolvent or has failed to remedy a breach of any of its
obligations under the Sublease within time periods specified in
the Sublease. Kilroy may also terminate the Sublease if
Relational Investors is in default of the Master Lease or if the
Master Lease is terminated.
About Zogenix Inc.
Zogenix, Inc. (NASDAQ: ZGNX), with offices in San Diego and
Emeryville, California, is a pharmaceutical company
commercializing and developing products for the treatment of
central nervous system disorders and pain.
As reported in the TCR on March 8, 2011, Ernst & Young LLP, in San
Diego, Calif., expressed substantial doubt about Zogenix's ability
to continue as a going concern, following the Company's 2010
results. The independent auditors noted that of the Company's
recurring losses from operations and lack of sufficient working
capital.
The Company reported a net loss of $83.90 million in 2011,
compared with a net loss of $73.56 million in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $100.64
million in total assets, $91.32 million in total liabilities and
$9.31 million in total stockholders' equity.
* Retainer from Third Party No Automatic Disqualification
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Court of Appeals in New Orleans issued an
opinion late last month taking sides with courts that don't find
an automatic disqualification when a bankrupt company's lawyer
receives a retainer provided by a third party. The opinion by
Circuit Judge Fortunato P. Benavides said that whether a
bankrupt's lawyer is disqualified for receiving a retainer
provided by a third party is to be decided by a "totality of the
circumstances" test. The case is Waldron v. Adams & Reese LLP (In
re American International Refinery Inc.), 11-30462, U.S. 5th
Circuit Court of Appeals (New Orleans).
* Submitted Order Must Comport With Relief Judge Grants
------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the Bankruptcy Appellate Panel for the 6th Circuit
said April 18 in a partial reversal of the bankruptcy court that
the responsibility is on the winning lawyer to submit an order
that comports with the judge's oral ruling in court. The case is
In re Lee, 11-8053, U.S. Bankruptcy Appellate Panel for the 6th
Circuit (Cincinnati).
* Conversion From Chapter 13 to 7 Is Absolute Right
---------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that U.S. District Judge George H. King in Los Angeles
ruled April 13 that a debtor in Chapter 13 has an absolute right
to convert the case to liquidation in Chapter 7. The case is
Taylor v. Danielson (In re Taylor), 11-1879, U.S. District Court,
Central District California (Los Angeles). The judge agreed with
a 2011 opinion from the Bankruptcy Appellate Panel for the Ninth
Circuit in a case called DeFrantz.
* Law Firm Sanctioned for Being 'Completely Unprepared'
-------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that for what the bankruptcy judge said was "an almost
complete lack of preparation" and sending a lawyer to court who
"showed no familiarity with the matter," U.S. Bankruptcy Judge
Bruce A. Markell is requiring the firm to repay the entire $5,000
fee for representing a couple in Chapter 13 bankruptcy. Markell
sanctioned the firm Barry Levinson & Associates in Las Vegas by
writing a 19-page opinion he referred to as public reprimand.
The case is In re Spickelmier, 11-10034, U.S. Bankruptcy Court,
District of Nevada (Las Vegas).
* Bank Protected for Not Turning Over Exempt Account
----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that U.S. District Judge Philip M. Pro ruled on April 9 in
upholding a ruling by U.S. Bankruptcy Judge Bruce A. Markell ruled
that an individual bankrupt who claims that part of a bank
account is exempt property isn't automatically entitled to a
turnover of that portion of the account when the time for
objecting to exemptions has run out. The case is Mwangi v. Wells
Fargo Bank NA (In re Mwangi), 11-01753, U.S. District Court,
District of Nevada (Las Vegas).
* Paper Tackles Dodd-Frank's Orderly Liquidation Authority
----------------------------------------------------------
Patrick Fitzgerald, writing for Dow Jones' Daily Bankruptcy
Review, reported that Seton Hall University Professor Stephen J.
Lubben in a new paper, looks at how the Dodd-Frank Wall Street
Reform and Consumer Protection Act's Orderly Liquidation
Authority, a new insolvency regime created to address the
limitations of bankruptcy law, would resolve hypothetically --
that is take over, sell off and wind down -- Bank of America.
According to DBR, Prof. Lubben's paper raises some serious
questions about whether the new regime will be up to the task of
resolving an institution like BofA, whose $2.3 trillion in assets
dwarfs Lehman's $713 billion.
The OLA gives the Federal Deposit Insurance Corp. the type of
receivership powers for "systemically important financial
institutions" it has long exercised to manage failed depository
banks, but Prof. Lubben says a financial colossus like BofA, with
more than 600 subsidiaries around the globe, looks far different
than a domestic bank. The lack of a "global focus" is one of the
key drawbacks of the old bankruptcy law and isn't adequately
addressed by the new authority, according to the paper.
DBR relates BofA has declined to comment, and Michael Krimminger,
general counsel of the FDIC, says Prof. Lubben is missing the
point.
"He has something of a misconception of what the Orderly
Liquidation Authority is designed to do," said Mr. Krimminger in
an interview April 12, according to DBR. The report notes Mr.
Krimminger said the OLA isn't designed to create an immediate
liquidation but to maintain the systemically important operations
of the company in order to prevent the financial contagion from
spreading.
DBR notes Prof. Lubben, a well-respected academic who also writes
a column for the New York Time's DealBook blog, and Mr. Krimminger
have a bit of a history. Their tussle was part of a broader split
between those reformers with experience in banking versus
bankruptcy practitioners.
DBR also says Prof. Lubben's paper makes clear that he isn't a
proponent of "tweaking" the Bankruptcy Code to resolve a
systemically important financial institution. That position,
dubbed Chapter 14 and proposed by the free-market-oriented
Resolution Project at Stanford University's Hoover Institution, is
unworkable, he said.
"Part of the problem is I'm the skunk at the garden party, no one
likes what I'm saying on either side," said Prof. Lubben in an
interview, according to DBR. "You have to acknowledge the pure
bankruptcy, free-market solution doesn't work with respect to a
large financial institution."
* Douglas Mannal Among Law360's Five Bankruptcy Stars Under 40
--------------------------------------------------------------
Richard Vanderford at Bankruptcy Law360 reports that Kramer Levin
Naftalis & Frankel LLP's Douglas Mannal has made a name for
himself as a tenacious, aggressive bankruptcy practitioner whose
work on large reorganizations, like representing investors in the
$1 billion restructuring of catalog retailer Appleseed's, has
earned him a place on Law360's list of top bankruptcy attorneys
under 40.
Mr. Mannal, a 38-year-old partner in Kramer Levin's New York
office, has emerged as a go-to attorney for investors, creditors
and debtors, particularly in distressed situations, where he
excels, says Law360.
* BOOK REVIEW: Performance Evaluation of Hedge Funds
----------------------------------------------------
Edited by Greg N. Gregoriou, Fabrice Rouah, and Komlan Sedzro
Publisher: Beard Books
Hardcover: 203 pages
Listprice: $59.95
Review by Henry Berry
Hedge funds can be traced back to 1949 when Alfred Winslow Jones
formed the first one to "hedge" his investments in the stock
market by betting that some stocks would go up and others down.
However, it has only been within the past decade that hedge funds
have exploded in growth. The rise of global markets and the
uncertainties that have arisen from the valuation of different
currencies have given a boost to hedge funds. In 1998, there were
approximately 3,500 hedge funds, managing capital of about $150
billion. By mid-2006, 9,000 hedge funds were managing $1.2
trillion in assets.
Despite their growing prominence in the investment community,
hedge funds are only vaguely understood by most people.
Performance Evaluation of Hedge Funds addresses this shortcoming.
The book describes the structure, workings, purpose, and goals of
hedge funds. While hedge funds are loosely defined as "funds with
no rules," the editors define these funds more usefully as
"privately pooled investments, usually structured as a partnership
between the fund managers and the investors." The authors then
expand upon this definition by explaining what sorts of
investments hedge funds are, the work of the managers, and the
reasons investors join a hedge fund and what they are looking for
in doing so.
For example, hedge funds are characterized as an "important avenue
for investors opting to diversify their traditional portfolios and
better control risk" -- an apt characterization considering their
tremendous growth over the last decade. The qualifications to
join a hedge fund generally include a net worth in excess of $1
million; thus, funds are for high net-worth individuals and
institutional investors such as foundations, life insurance
companies, endowments, and investment banks. However, there are
many individuals with net worths below $1 million that take part
in hedge funds by pooling funds in financial entities that are
then eligible for a hedge fund.
This book discusses why hedge funds have become "notorious as
speculating vehicles," in part because of highly publicized
incidents, both pro and con. For example, George Soros made $1
billion in 1992 by betting against the British pound. Conversely,
the hedge fund Long-Term Capital Management (LTCP) imploded in
1998, with losses totalling $4.6 billion. Nonetheless, these are
the exceptions rather than the rule, and the editors offer
statistics, studies, and other research showing that the
"volatility of hedge funds is closer to that of bonds than mutual
funds or equities."
After clarifying what hedge funds are and are not, the book
explains how to analyze hedge fund performance and select a
successful hedge fund. It is here that the book has its greatest
utility, and the text is supplemented with graphs, tables, and
formulas.
The analysis makes one thing clear: for some investors, hedge
funds are an investment worth considering. Most have a
demonstrable record of investment performance and the risk is low,
contrary to common perception. Investors who have the necessary
capital to invest in a hedge fund or readers who aspire to join
that select club will want to absorb the research, information,
analyses, commentary, and guidance of this unique book.
Greg N. Gregoriou teaches at U. S. and Canadian universities and
does research for large corporations. Fabrice Rouah also teaches
at the university level and does financial research. Komlan
Sedzro is a professor of finance at the University of Quebec and
an advisor to the Montreal Derivatives Exchange.
*********
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
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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-
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firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
*** End of Transmission ***