/raid1/www/Hosts/bankrupt/TCR_Public/120426.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, April 26, 2012, Vol. 16, No. 115
Headlines
2655 BUSH: Creditors Dispute Disclosure Statement
ABLE INDUSTRIES: Files for Chapter 11 Bankruptcy Protection
AEOLUS PHARMACEUTICALS: Efficacy's Equity Stake Down to 6.1%
AIR CANADA: S&P Affirms 'B-' Corp. Credit Rating; Off Watch Neg
ALEXANDER SRP: LSREF2 Says Deal Default Cues Relief of Stay
ALLEGHENY ENERGY: Moody's Withdraws '(p)Ba1' Shelf Rating
AMERICAN AIRLINES: USAir to Proceed With Merger; BA in Sidelines
AMERICAN AIRLINES: Yetter Coleman Okayed as GDS Case Trial Atty.
AMERICAN AIRLINES: Winstead Approved as Corporate Counsel
AMERICAN AIRLINES: $245K in Claims Changed Hands in Jan.-Feb.
AMERICAN AIRLINES: Reports March 2012 Traffic Results
AMERISTAR CASINOS: Moody's Affirms 'B1' CFR, Rates Sr. Notes 'B3'
APRIA HEALTHCARE: Moody's Cuts CFR to 'B2'; Outlook Stable
ASG CONSOLIDATED: S&P Lowers Corporate Credit Rating to 'B-'
AURASOUND INC: Director Danny Tsui Resigns for Personal Reasons
AURASOUND INC: To Restate September & December Quarterly Reports
BARCLAY SQUARE: Voluntary Chapter 11 Case Summary
BEAN'S REALTY: Case Summary & 12 Largest Unsecured Creditors
BELO CORP: Fitch Affirms Issuer Default Rating at 'BB'
BIOFUEL ENERGY: Unable to Comply with NASDAQ's $1 Bid Price Rule
BLITZ USA: Court Extends Plan Exclusivity Period to June 6
BLITZ USA: Court Extends Lease Decision Deadline to June 6
BRIER CREEK CORP: Can Use BofA's Cash Collateral Through May 31
BRIER CREEK CORP: Taps Northen Blue as Chapter 11 Counsel
BRIER CREEK CORP: Hires Rayburn as Counsel in BofA Litigation
BRIER CREEK CORP: Can Hire Property Manager & Leasing Agent
BRUNO'S ISLAND: Case Summary & 20 Largest Unsecured Creditors
BUFFETS INC: Unsecureds to Recoup 9% Under Modified Plan
BUILDERS FIRSTSOURCE: S&P Affirms 'CCC' Corporate Credit Rating
CARPENTER CONTRACTORS: Plan Outline Hearing Continued Until May 16
CATASYS INC: Incurs $8.1 Million Net Loss in 2011
CENTRAL FEDERAL: Incurs $5.4 Million Net Loss in 2011
CITY NATIONAL: Preston Pinkett Discloses 9.3% Equity Stake
COLTS RUN: Post-Confirmation Status Hearing Today
CLEARWIRE CORP: Chesapeake Has 5.8% of Shares as of March 22
CORMEDIX INC: Receives NYSE Amex Notice for Non-Compliance
CORNERSTONE BANCSHARES: Obtains Waivers of 2012 Loan Thresholds
DOE MOUNTAIN INVESTMENTS: Joint Plan of Liquidation Confirmed
DOE MOUNTAIN INVESTMENTS: Wants to Hire Stern as Special Counsel
DOE MOUNTAIN INVESTMENTS: Taps Elliott Davis for Tax Work
DRESSER-RAND GROUP: Moody's Raises CFR to 'Ba2'; Outlook Stable
DS WATERS: Moody's Affirms 'B2' CFR Following Recapitalization
DYNEGY INC: Faruqi & Faruqi Files Stockholders' Class Suit
EASTMAN KODAK: Shutterfly $23.8-Mil. Is Lone Bid for Kodak Gallery
EATON MOERY: Plan Confirmation Hearing Continued Until May 18
EDISON MISSION: Fitch Downgrades LT Issuer Default Rating to 'CC'
EPICEPT CORP: Incurs $15.6 Million Net Loss in 2011
FEDERAL HOME: Moody's Issues Summary Credit Opinion
FEDERAL NATIONAL: Moody's Issues Summary Credit Opinion
FIRST BANCORP: Fitch Upgrades LT Issuer Default Rating to 'B-'
FNB UNITED: Incurs $137.3 Million Net Loss in 2011
FORD MOTOR: Fitch Raises LT Issuer Default Rating From 'BB+'
FUSION TELECOMMUNICATIONS: Incurs $4.4 Million Net Loss in 2011
GAMETECH INT'L: Defaults on Loan After Consultant Resigns
GENCORP INC: To Redeem $74.9MM Its 9-1/2% Sr. Subordinated Notes
GENCORP INC: S&P Affirms 'B' Corp. Credit Rating; Outlook Positive
GRACEWAY PHARMACEUTICALS: Wins Confirmation of Liquidating Plan
GRANITE BROADCASTING: Moody's Assigns 'B3' Corp. Family Rating
GRANITE BROADCASTING: S&P Rates Corp. Credit 'B'; Outlook Stable
GREY OAKS: Case Summary & 5 Largest Unsecured Creditors
HALE MOKU LLC: Files for Chapter 11 in Los Angeles
HOSTESS BRANDS: Court OKs Amendment to Final DIP Financing Order
HOSTESS BRANDS: Seeks to Reject Labor Deals With 10 More Unions
HOVNANIAN ENTERPRISES: Swaps 981,302 Shares with $4.1-Mil. Notes
LAREDO PETROLEUM: Moody's Assigns 'B3' Rating to New Senior Notes
LAREDO PETROLEUM: S&P Rates $400-Mil. Senior Notes 'B-'
LARSON LAND: Court Appoints Chapter 11 Trustee
LAUSELL INC: Sec. 341 Creditors Meeting Set for May 24
LEHMAN BROTHERS: Makes Up 94% of All Claims Trading in March
LEHR CONSTRUCTION: Seeks Approval of Bloomingdale Settlement
LEHR CONSTRUCTION: Wants to Hire Vaughn Woodwork as Expert
LEHR CONSTRUCTION: Can Hire Moshie Solomon for N.J. Litigation
LEVI STRAUSS: Moody's Affirms 'B1' CFR, Rates Sr. Notes 'B2'
LEVI STRAUSS: Fitch Rates $350-Mil. Ten-Year Notes 'B+/RR4'
LEVI STRAUSS: S&P Gives 'B+' Rating on $350-Mil. Senior Notes
LIBERTY HARBOR: Ch. 11 Filings a Blow to City's Rebuilding Effort
LIBERTY HARBOR: Updated Case Summary & 20 Largest Unsec. Creditors
LIBERTY HARBOR: Asks Court to Approve Wasserman Engagement
LIBERTY HARBOR: Sec. 341 Creditors' Meeting Set for May 16
LIGHTSQUARED INC: Creditors Unite, Hire White & Case Lawyer
MACLAREN USA: Chapter 7 Trustee Seeks Documents
MARIANA RETIREMENT FUND: Governor to Pass Fund Withdrawal Bill
MARIANA RETIREMENT FUND: U.S. Trustee Disputes Immunity Bid
MARSH & MCLENNAN: Moody's Issues Summary Credit Opinion
MC2 CAPITAL: Chapter 11 Plan Contemplates Asset Sale
MERCANTIL COMMERCEBANK: Fitch Holds Issuer Default Rating at 'BB'
MERITOR INC: Moody's Rates New Senior Secured Facilities 'Ba2'
MERITOR INC: S&P Assigns 'BB-' Rating on $429-Mil. Credit Facility
MF GLOBAL: CIEBA Lauds Senate Banking Committee for Probe
MICHAELS STORES: To Offer $500 Million of Common Shares
TENET HEALTHCARE: Robert Kerrey Resigns, to Run for U.S. Senate
MMRGLOBAL INC: Robert Lorsch Discloses 17.3% Equity Stake
MONTANA ELECTRIC: Beartooth Wants Wholesale Power Deal Voided
MOUNTAIN PROPERTY DEVT: Files for Chapter 11 in San Jose
MPG OFFICE: Caspian Capital Owns 9.2% of Preferred Shares
NEBRASKA BOOK: Wants Exclusivity If Plan Doesn't Work
NET TALK.COM: Executes $500,000 of 10% Senior Secured Debenture
NETFLIX INC: Moody's Says Low Subscriber Growth No Rating Impact
NORTEL NETWORKS: CAW Calls on Amendments to Bankruptcy Laws
ONEBEACON U.S.: Moody's Issues Summary Credit Opinion
PARAGON PAPER: Voluntary Chapter 11 Case Summary
PLAINS EXPLORATION: Moody's Rates $500MM Sr. Unsec. Notes 'B1'
PLAINS EXPLORATION: S&P Affirms 'BB' Corporate Credit Rating
RADIATION THERAPY: S&P Affirms 'B' Corporate Credit Rating
RADIOSHACK: Weak Operating Results Cue Fitch to Downgrade Ratings
RADIOSHACK CORP: Moody's Lowers CFR to 'B1'; Outlook Negative
REDDY ICE: OK'd to Pay $3.5 Million Critical Vendor Claims
REDDY ICE: Combined Plan Hearing Scheduled for May 18
REDDY ICE: U.S. Trustee Forms Three-Member Creditors Committee
RENA LLC: Files for Chapter 11 Bankruptcy Protection
ROOFING SUPPLY: Moody's Reviews 'B2' CFR for Possible Downgrade
ROOFING SUPPLY: S&P Puts 'B+' Corp. Credit Rating on Watch Neg
ROOMSTORE INC: Has Until June 7 to Propose Chapter 11 Plan
SAAB CARS: Slowed on Parts Sale to Affiliate
SAAB CARS: Has Deal With Cat Logistics on Cash Collateral
SAAB CARS: Polsinelli Approved as Committee's Delaware Counsel
SAAB CARS: Committee OK'd to Retain Wilk Auslander as Counsel
SAAB CARS: Committee Withdraws Bid to Retain Bellavia Gentile
SELECT TREE: Section 341(a) Meeting Scheduled for June 27
SELECT TREE: Court Approves Nextpoint as Financial Adviser
SELECT TREE: Court Approves Damon Morey as General Counsel
SKINNY NUTRITIONAL: Expands Chain Authorizations
SMF ENERGY: Hiring Genovese Joblove & Battista as Counsel
SMF ENERGY: Asks Court to Approve Soneet Kapila as CRO
SS&C TECHNOLOGIES: S&P Lowers Corporate Credit Rating to 'BB-'
TDM RED: Case Summary & 13 Largest Unsecured Creditors
TELEPRO CARIBE: Case Summary & 16 Largest Unsecured Creditors
TOUCH AMERICA: Shareholders May See Chapter 11 Payout
UNITED MARITIME: Moody's Says Barge Operations Sale Credit Neg.
U.S. COAL: S&P Withdraws 'CCC' Corp. Credit Rating at Request
VALDIVIA PRODUCE: Bankruptcy Case Dismissal Sought
VELO HOLDINGS: Paymentech Says DIP Pact Gives Lenders Leverage
VITAMINSPICE INC: Notes of Forgeries by Petitioners
W.R. GRACE: First Qtr. Net Sales Up 8.4% to $754.4 Million
WEST FRASER: S&P Affirms 'BB+' Corp. Credit Rating; Outlook Stable
WINCHESTER'S HIGHLAND: Tissa Wants Case Dismissed for "Bad Faith"
* Creditor's Suit Dismissed for Non-Disclosure of Payments
* Moody's Says Healthcare Reform to Hit Not-for-Profit Hospitals
* Recent Small-Dollar & Individual Chapter 11 Filings
*********
2655 BUSH: Creditors Dispute Disclosure Statement
-------------------------------------------------
Sum M. Seto Properties LLC and Jenny P. Seto Properties, secured
creditors of 2655 Bush LLC, submitted objections to the Debtor's
proposed Combined Chapter 11 Plan of Reorganization and Disclosure
Statement. The creditors said the disclosure statement should be
disapproved for:
a. its failure to provide "adequate information" regarding the
assets and value of the assets;
b. its failure to provide "adequate information" on the
anticipated future of the Debtor and adequate summary
of the plan;
c. it contains insufficient disclosure of the source of
information, accounting and valuation methods used to
produce the financial information, valuation or pro for
projections; and
d. its failure to provide "adequate information" regarding a
liquidation analysis.
The creditors also said the plan is unconformable on its face.
The Debtor's sole material asset is a building and associated
parking garage located at 2655 Bush Street, at the intersection of
Divisadero Street, in San Francisco, California.
The Property has received entitlements for development into
approximately 4,180 square feet of retail space and 81 residential
condominium or apartment units. The Debtor intends to develop the
Property or to sell or joint venture the Property with another
developer, thereby providing funds to satisfy all of its debts;
until that occurs, the Debtor's sole member will continue to
provide the Debtor with financial support.
Under the Plan, the Debtor proposes to pay secured and unsecured
creditors in full, over time. Specifically, the debt secured by a
first deed of trust encumbering the Property will receive monthly
payments of interest and principal, and a balloon payment of the
balance of the debt within five years. All other secured and
unsecured debts will be paid in full, half when the Plan becomes
effective, half on the first anniversary of the Effective Date.
If the Plan is confirmed, the payments promised in the Plan
constitute new contractual obligations that replace the Debtor's
pre-confirmation debts. Creditors may not seize their collateral
or enforce their pre-confirmation debts so long as Debtor performs
all obligations under the Plan. If the Debtor defaults in
performing Plan obligations, any creditor can file a motion to
have the case dismissed or converted to a Chapter 7 liquidation,
or enforce their non-bankruptcy rights.
2655 Bush LLC filed for Chapter 11 (Bankr. N.D. Calif. Case No.
12-30388) on Feb. 8, 2012. Judge Thomas E. Carlson presides over
the case. The company disclosed assets of $15.04 million and
liabilities of $12.4 million.
ABLE INDUSTRIES: Files for Chapter 11 Bankruptcy Protection
-----------------------------------------------------------
Mindy Aguon at Kuam News reports that Able Industries of the
Pacific has filed for bankruptcy.
According to the report, the Company wasn't able to pay employees,
even prompting a Department of Labor investigation. "The program
is in jeopardy and Able Industries is a NISH affiliate and the
NISH people in the U.S. are deeply concerned about what is going
on," said Johann Sobredo, a former Able board member.
The report notes Mr. Sobredo alleged significant mismanagement at
Able Industries that resulted in employees not being paid and
debts to vendors piling up.
The report relates CEO Joaquin Leon Guerrero vehemently denied the
claims, saying, "We've posted profits both '09 and '10, so the
company is strong and the company is growing."
The report notes personal property of the company includes
checking accounts with less than $3,500, $2,500 worth of furniture
and household goods, $1,500 worth of clothing and another grand
worth of jewelry. Other creditors that are listed as holding
unsecured non-priority claims include $82 dollars to a Utah
Software Company, $189 to ComPacific, $1,100 to Cost-U-Less,
$8,000 to Dallas Lighthouse for the Blind, $8,400 to DOCOMO
Pacific, $151 to Express Signs and Graphics, $7,300 to IT&E, and
$8,600 to National Office Supply, just to name a few. In total,
Able owes more than $1.3 million to various creditors -- that's
in addition to what's owed to its employees.
The report relates the U.S. Department of Labor has been
investigating the company and an audit of the company's 2010
payroll records showed that Able failed to pay close to $600,000
in health and welfare benefits to its employees. As a result the
feds garnished much of the money, through federal contracts, and
the USDOL is expected to start distributing those checks in the
coming weeks.
Able Industries of the Pacific -- http://www.ableind.org/-- is a
Nonprofit Community Rehabilitation Program. It is Guam's largest
employer of people with disabilities and top ranking provider for
outsourcing solutions.
AEOLUS PHARMACEUTICALS: Efficacy's Equity Stake Down to 6.1%
------------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Efficacy Biotech Fund L.P. and its affiliates
disclosed that, as of March 19, 2012, they beneficially own
3,724,125 shares of common stock of Aeolus Pharmaceuticals, Inc.,
representing 6.1% of the shares outstanding.
Efficacy previously disclosed beneficial ownership of 7,516,219
common shares or a 12.57% as of March 23, 2011.
A copy of the amended filing is available for free at:
http://is.gd/v8mMLN
About Aeolus Pharmaceuticals
Based in Mission Viejo, California, Aeolus Pharmaceuticals Inc.
(OTC BB: AOLS) -- http://www.aeoluspharma.com/-- is developing a
variety of therapeutic agents based on its proprietary small
molecule catalytic antioxidants, with AEOL 10150 being the first
to enter human clinical evaluation. AEOL 10150 is a patented,
small molecule catalytic antioxidant that mimics and thereby
amplifies the body's natural enzymatic systems for eliminating
reactive oxygen species, or free radicals. Studies funded by the
National Institutes for Health are currently underway evaluating
AEOL 10150 as a treatment for exposure to radiation, sulfur
mustard gas and chlorine gas. A second compound, AEOL 11207, has
demonstrated efficacy in animal models of Parkinson's disease and
is currently being evaluated as a potential treatment for
epilepsy.
The Company's balance sheet at Dec. 31, 2011, showed $2.77 million
in total assets, $22.85 million in total liabilities, and a
$20.08 million total stockholders' deficit.
Haskell & White LLP, in Irvine, Calif., expressed substantial
doubt about the Company's ability to continue as a going concern
following the fiscal 2011 financial results. The independent
auditors noted that the Company has suffered recurring losses,
negative cash flows from operations and management believes the
Company does not currently possess sufficient working capital to
fund its operations past the second quarter of fiscal 2012.
AIR CANADA: S&P Affirms 'B-' Corp. Credit Rating; Off Watch Neg
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings, including
the 'B-' long-term corporate credit rating, on Air Canada. "At the
same time, we removed all ratings from CreditWatch with negative
implications, where they had been placed March 23, 2012. The
outlook is negative and reflects our expectations of weaker cash
flow generation in 2012 due to operational disruptions caused by
labor disputes, which we expect could lead to lower bookings and
lower EBITDA generation in 2012," S&P said.
"The ratings reflect what we view as the company's highly
leveraged capital structure, weak cash flow protection measures,
participation in the high-risk airline industry, and modest (and
volatile) cash flow to cover relatively high fixed costs,' said
Standard & Poor's credit analyst Jatinder Mall. Mitigating these
weaknesses are the company's strong market position in Canada as
the largest provider of commercial airline services; broad route
network (providing some ability to offset domestic weakness); and
good brand recognition," S&P said.
"Air Canada is Canada's largest domestic and international full-
service airline. The company is also the 15th-largest commercial
airline in the world, serving more than 30 million customers
annually. As of Dec. 31, 2011, Air Canada operated a mainline
fleet of 205 aircraft. In addition, the company has capacity
purchase agreements with Jazz Aviation LP, Sky Regional Airlines
Inc., and others," S&P said.
"We consider Air Canada's financial risk profile as 'highly
leveraged'. As of Dec. 31, 2011, Air Canada's reported and
adjusted debt stood at C$4.3 billion and C$8.5 billion,
respectively. Standard & Poor's adjustments to reported debt
include about C$1.5 billion for operating leases (primarily for
leased aircraft) and C$2.6 billion for after-tax pension deficit,"
S&P said.
"Standard & Poor's considers Air Canada's business risk profile as
'weak'. The company operates in the North American airline sector,
which we consider high risk due to cyclical demand, high
competition, and capital intensity," S&P said.
"We consider Air Canada's ongoing dispute with its unions to be
counterproductive and to have a negative impact on the company's
public image. This could lead to some loss of market share to its
key competitors. The company has a strong position in Canada with
55% of the domestic market share and 35% of the transborder
market. Collective agreements representing the majority of Air
Canada's unionized workforce expired in 2011. Although the
company has successfully concluded four collective agreements, it
continues to negotiate with pilots (Air Canada Pilots Association)
and mechanics and baggage handlers (International Association of
Machinists and Aerospace Workers)," S&P said.
"The negative outlook reflects our expectations of Air Canada's
weaker cash flow generation in 2012, due to operational
disruptions caused by labor disputes, which we expect could lead
to lower bookings and lower EBITDA generation in 2012. We expect
the leverage ratio to increase to around 9.0x in 2012. We also
expect that this, combined with high fixed charges, could lead
to a deterioration in liquidity to below C$2 billion. We could
lower the ratings if ongoing labor disruptions, a stalled Canadian
and U.S. economic recovery, or serious oil price spike were to
cause losses, eroding liquidity to below C$1.5 billion. We believe
that an upgrade is not likely in the near term, given high debt
levels and expected increased cash outflow starting in 2014 due to
expiry of the Air Canada 2009 Pension Regulations," S&P said.
ALEXANDER SRP: LSREF2 Says Deal Default Cues Relief of Stay
-----------------------------------------------------------
LSREF2 Baron, LLC, a secured creditor and party-in-interest, asks
the U.S. Bankruptcy Court for the Southern District of Georgia for
relief from the automatic stay against Alexander SRP Apartments,
LLC.
According to LSREF2, cause exists to lift the automatic stay
because (i) pursuant to a prepetition forbearance agreement, the
Debtor agreed to waive the automatic stay, (ii) the bankruptcy
case was filed in bad faith.
About Alexander SRP Apartments
Alexander SRP Apartments, the owner and operator of a 232-unit
apartment complex known as Odyssey Lake Apartments, located in
Brunswick, Georgia, filed for Chapter 11 bankruptcy (Bankr. S.D.
Ga. Case No. 12-20272) on March 5, 2012. The apartment is
currently roughly 84% occupied. The Debtor said it is a Single
Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B).
Judge Susan D. Barrett oversees the case, taking over from Judge
John S. Dalis. Robert M. Cunningham, Esq., at Hunter MacLean
Exley & Dunn, PC; and Laura E. Woodson, Esq., and Robert
Williamson, Esq., at Scroggins & Williamson, P.C., serve as
counsel for the Debtor. In its schedules, the Debtor disclosed
$23.2 million in total assets and $17.7 million in total
liabilities. No committee of unsecured creditors has been
appointed in the case.
ALLEGHENY ENERGY: Moody's Withdraws '(p)Ba1' Shelf Rating
---------------------------------------------------------
Moody's Investors Service has withdrawn the (p)Baa3/(p)Ba1 rating
on Allegheny Energy, Inc.'s existing multiple seniority shelf
registration due August 2012.
Ratings Rationale
Moody's has withdrawn the rating for its own business reasons.
Allegheny Energy, Inc., is a utility holding company that merged
with a subsidiary of FirstEnergy on February 25, 2011
AMERICAN AIRLINES: USAir to Proceed With Merger; BA in Sidelines
----------------------------------------------------------------
The Wall Street Journal's Susan Carey reports that Scott Kirby, US
Airways' president, and Doug Parker, its chief executive,
confirmed at an earnings conference call Wednesday they are
proceeding with a potential combination with American Airlines
despite American's pursuit of a plan to exit bankruptcy-court
proceedings as an independent carrier.
"While we would prefer to be working in concert with the AMR
management team and its board -- and hope to be doing so before
too long -- we understand what their focus is and, instead, we
have been working the creditors and the employees of AMR," Mr.
Parker said, according to WSJ.
WSJ also reports that Willie Walsh, CEO of British Airways parent
International Consolidated Airlines Group SA, said on Wednesday
IAG and British Airways intended to remain on the sidelines of the
merger battle brewing with American. British Airways and IAG's
other carrier, Spain's Iberia, have deep ties with American
through their Oneworld global airline alliance.
"We intend to be passive but ready to act if, and when, something
happens," Mr. Walsh said in an interview in Barcelona, according
to WSJ. "The process could play out in many different ways, and we
want to be ready to participate."
IAG recently hired New York-based Centerview Partners as an
adviser on the U.S. bankruptcy-court process.
WSJ notes US Airways believes a merger with American would yield
at least $1.2 billion in annual savings and added revenue, even
with shallower labor-cost cuts than AMR envisions in its
restructuring plan, and with improved pay and benefits for US
Airways' own employees.
WSJ also notes AMR has insisted that its job is to build a robust
stand-alone restructuring plan, and lawyers for its nine-member
creditors committee said this week that the committee backs that
goal, in part to provide a yardstick for evaluating other
potential strategic alternatives.
According to WSJ, a spokesman said AMR had no comment Wednesday,
but reiterated remarks its CEO, Tom Horton, made in a letter to
employees Monday. In it, he said "nonbinding arrangements with
our unions" in no way alter AMR's course, which is to find the
best path for employees and investors in a disciplined process and
in collaboration with creditors. "And this includes whether
American will choose to pursue any combination down the road," he
added.
WSJ says the idea of merging AMR and US Airways, which would
create the world's largest airline, has gained some traction in
recent days. Last week, the three major unions at American,
representing more than 50,000 employees, said they had thrown
their support behind such a merger and reached a deal with US
Airways on the outlines of a labor pact that would take effect if
the two carriers united.
WSJ also relates US Airways' Mr. Parker said that now that the AMR
employees are on his side, "we are focused on the full unsecured
creditors committee. We are eager to demonstrate to the creditors
of AMR that our plan would result in higher returns than the AMR
stand-alone strategy would."
According to WSJ, Mr. Kirby said the combination of Delta Air
Lines Inc. and Northwest Airlines created $2 billion in annual
synergies, while the marriage of United Airlines and Continental
Airlines is throwing off $1.1 billion of synergies.
"Since the new American will have revenue-generating capabilities
like United and Delta, it should also have labor costs like United
and Delta," Mr. Kirby said.
* * *
Meanwhile, Joseph Checkler, writing for Dow Jones' Daily
Bankruptcy Review, reports that AMR's chief restructuring officer
Beverly K. Goulet told the Bankruptcy Court on Tuesday the Company
won't be able to successfully restructure without drastically
cutting its labor costs. Trial over AMR's bid to terminate its
contracts began Monday and could last several weeks.
DBR relates Ms. Goulet said American was the only major airline to
lose money in 2011 and that while she believes the company can
return to profitability in the next few years, labor costs must be
addressed.
Asked if American can successfully reorganize without the cuts it
seeks, Ms. Goulet said, "It's our best business judgment that
that's what's necessary."
Ms. Goulet has worked at AMR since 1993 and has served as the
company's treasurer since 2002.
DBR also reports that in cross examination Tuesday, Robert S.
Clayman, a lawyer for the Association of Professional Flight
Attendants, seemed to be centering his questions around the
unions' contention that AMR should explore the US Airways merger.
He grilled Ms. Goulet about whether the mergers of competing
airlines -- between the parent companies of Continental and United
and also Delta and Northwest -- affected American.
"I think it's likely that the mergers of those four carriers did
in fact have an impact," Ms. Goulet told Mr. Clayman, Esq., at
Guerreri, Clayman, Bartos & Parcelli P.C.
DBR notes that in a declaration filed earlier this month with the
court, Ms. Goulet said the two big airline mergers combined "cost
advantages with materially enhanced network strength."
AMERICAN AIRLINES: Yetter Coleman Okayed as GDS Case Trial Atty.
----------------------------------------------------------------
Judge Sean Lane authorized AMR Corp. and its affiliates to employ
Yetter Coleman LLP as their special litigation counsel, nunc pro
tunc to the Petition Date.
In January 2011, American Airlines, Inc., filed a lawsuit against
Sabre Inc., Sabre Holdings Corp., and Sabre Travel International,
Ltd. d/b/a Sabre Travel Network in the District Court of the 67th
Judicial District in Tarrant County, Texas. In April 2011,
American Airlines also filed an antitrust lawsuit against
Travelport Limited and Travelport, L.P., Orbitz Worldwide LLC and
Sabre in the U.S. District Court for the Northern District of
Texas. The Federal Action and State Action are collectively
referred to as the GDS Litigation.
Yetter Coleman has served as lead trial counsel for American
Airlines on the GDS Litigation since the commencement of the State
and Federal Actions and, has been involved in all aspects of the
litigation. Yetter Coleman also serves as co-counsel to American
Airlines in American Airlines vs. Frequent Flyer Depot, Inc., et
al., a lawsuit against several companies and individuals who
defrauded American Airlines regarding its AAdvantage frequent
flier program.
Yetter Coleman was authorized to continue representing American
Airlines on the American Matters under the OCP Order. In addition
to representing American Airlines in the Frequent Flyer
Litigation, Yetter Coleman attorneys have been actively involved
in trial preparation for the State Action and the Federal Action,
which has involved the production of several million pages of
documents in discovery and potentially taking and defending over
90 depositions. As a result, Yetter Coleman's postpetition fees
and expenses in connection with the American Matters have exceeded
the $50,000 monthly cap under the OCP Order. Thus, the Debtors
must retain Yetter Coleman as special counsel under Section 327(e)
of the Bankruptcy Code.
Randall J. White, associate general counsel of AMR Corp., states
that at this stage of the GDS Litigation, if the Debtors were
required to retain counsel other than Yetter Coleman in connection
with the GDS Litigation, the Debtors, their estates, and all
parties -in-interest would be severely prejudiced, as the Debtors
would lose their lead trial counsel in the GDS Litigation, as well
as Yetter Coleman's invaluable experience and expertise less than
six months from an extremely complex trial in the State Action.
Yetter Coleman's professionals will charge for their services on
an hourly basis. The firm's current customary hourly rates are
$435 to $710 for partners and counsel, $195 to $370 for
associates, and $100 to $140 for paraprofessionals. Yetter
Coleman also intends to seek reimbursement for reasonable expenses
incurred.
R. Paul Yetter, Esq., a partner at Yetter Coleman LLP, in Austin,
Texas -- pyetter@yettercoleman.com -- discloses that his firm does
not have any connection to the potential parties-in-interest in
the Debtors' Chapter 11 cases except for certain connections,
which are unrelated to the matters upon which the firm is to be
retained. A copy of the disclosures is available for free at:
http://bankrupt.com/misc/AmAir_YetterDisclosures.pdf
Mr. Yetter also discloses that Yetter Coleman did not hold a
retainer as of the Petition Date. Upon review, Yetter Coleman is
owed $52,881 for services provided and expenses incurred between
November 1, 2011 and the Petition Date, Mr. Yetter notes. He
believes that holding such a de minimis claim is not disqualifying
or problematic under Section 327(e) of the Bankruptcy Code.
Accordingly, Mr. Yetter insists that Yetter Coleman is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code.
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on
$18.02 billion of total operating revenues for the nine months
ended Sept. 30, 2011. AMR recorded a net loss of $471 million in
the year 2010, a net loss of $1.5 billion in 2009, and a net loss
of $2.1 billion in 2008.
The Company's balance sheet at Sept. 30, 2011, showed
$24.72 billion in total assets, $29.55 billion in total
liabilities, and a $4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN AIRLINES: Winstead Approved as Corporate Counsel
---------------------------------------------------------
Judge Sean Lane authorized AMR Corp. and its affiliates to employ
Winstead P.C. as their corporate counsel, nunc pro tunc to the
Petition Date.
AMR Corp. and its affiliates sought and obtained permission from
the Bankruptcy Court to employ Winstead P.C. as their corporate
counsel, nunc pro tunc to the Petition Date.
As reported in the April 10, 2012 edition of the Troubled Company
Reporter, Winstead has served as counsel for the Debtors on a
variety of matters since 2001. Winstead's duties have included
assisting the Debtors with (i) negotiating and drafting contracts
and leases, including contracts and leases relating to (a)
procurement and purchasing, (b) executive compensation, and (c)
aircraft, business process and technology outsourcing and cargo
transactions, (ii) advising the Debtors on intellectual property
and liquor law matters, and (iii) assisting the Debtors with
review, collection, and analysis of contracts so that the Debtors
could prepare a schedule of contracts and to facilitate the
Debtors' decisions with respect to their executory contracts and
leases.
Winstead was authorized to continue representing the Debtors
under the OCP Order. Winstead has continued to provide the
Debtors with those legal services since the Petition Date, and
Winstead's postpetition fees and expenses have exceeded the
$50,000 monthly cap under the OCP Order. Accordingly, the
Debtors are seeking permission to employ Winstead as special
counsel under Section 327(e) of the Bankruptcy Code.
The Debtors will pay Winstead's professionals according to their
customary hourly rates. Winstead's current customary hourly
rates are $700 to $375 for shareholders, $425 to $215 for
associates, and $230 to $110 for paraprofessionals. Winstead also
intends to seek reimbursement for reasonable expenses incurred.
Phillip Lamberson, Esq., a shareholder at Winstead P.C., in
Dallas, Texas -- plamberson@winstead.com -- discloses that his
firm represents certain parties in matters unrelated to the
Debtors. A list of the clients is available for free at:
http://bankrupt.com/misc/AmAir_WinsteadClients.pdf
Mr. Lamberson adds that as of the Petition Date, Winstead holds a
prepetition claim for approximately $210,000 for services
rendered to the Debtors.
Notwithstanding those disclosures, Winstead is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code, Mr. Lamberson maintains.
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on
$18.02 billion of total operating revenues for the nine months
ended Sept. 30, 2011. AMR recorded a net loss of $471 million in
the year 2010, a net loss of $1.5 billion in 2009, and a net loss
of $2.1 billion in 2008.
The Company's balance sheet at Sept. 30, 2011, showed
$24.72 billion in total assets, $29.55 billion in total
liabilities, and a $4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN AIRLINES: $245K in Claims Changed Hands in Jan.-Feb.
-------------------------------------------------------------
For January and February 2012, ten claims totaling $245,461
against the Debtors changed hands:
Claim Claim
Transferor Transferee No. Amt.
---------- ---------- ----- ---------
Aeroflite Enterprises Inc. ASM Capital IV 479 $9,100
Esterline Sensors Services
Americas Inc. ASM Capital IV 480 78,157
Gables Engineering Inc. ASM Capital 734 120,631
Gables Engineering Inc. ASM Capital 734 4,591
Soundair Inc. Fair Harbor
Capital, LLC 112 28,270
Esternline Sensors Claims Recovery
Services Americas, Inc. Group LLC 823 12,852
Norwich Aero Products Inc. Claims Recovery
Group LLC 822 5,460
Hoky Marketing Tannor Partners
Credit Fund, LP 114 7,271
Hoky Marketing Tannor Partners
Credit Fund, LP 815 7,271
Only one claim transfer was recorded in January 2012. West
Sanitation Services, Inc. transferred its Claim No. 124 amounting
to $128 to Claims Recovery Group LLC.
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on
$18.02 billion of total operating revenues for the nine months
ended Sept. 30, 2011. AMR recorded a net loss of $471 million in
the year 2010, a net loss of $1.5 billion in 2009, and a net loss
of $2.1 billion in 2008.
The Company's balance sheet at Sept. 30, 2011, showed
$24.72 billion in total assets, $29.55 billion in total
liabilities, and a $4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN AIRLINES: Reports March 2012 Traffic Results
-----------------------------------------------------
American Airlines reported a March load factor of 82.5%, an
increase of 2.2 points versus the same period last year. Traffic
increased by 1.3%, while capacity was lower by 1.4% year-over-
year.
International traffic increased by 3.5% relative to last year as
capacity increased by 0.3%, resulting in an increase in
international load factor of 2.5 points versus March 2011.
Domestic load factor was 84.3%, an increase of 2.1 points year-
over-year. Domestic capacity and traffic were 2.6% and 0.1% lower
year-over-year respectively.
American boarded 7.6 million passengers in March.
A full-text copy of the March 2012 traffic results is available
for free at: http://is.gd/hFNDnl
American Eagle's Traffic Results
American Eagle reported a March traffic increase of 6.0% year-
over-year as capacity decreased 0.9%. March load factor was 75.9%,
an increase of 5.0 points (rounded to the nearest tenth of a
percent) compared to the same period last year.
American Eagle boarded almost 1.7 million passengers in March.
A full-text copy of the March 2012 traffic results is accessible
for free at: http://is.gd/l25xdp
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on
$18.02 billion of total operating revenues for the nine months
ended Sept. 30, 2011. AMR recorded a net loss of $471 million in
the year 2010, a net loss of $1.5 billion in 2009, and a net loss
of $2.1 billion in 2008.
The Company's balance sheet at Sept. 30, 2011, showed
$24.72 billion in total assets, $29.55 billion in total
liabilities, and a $4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
AMERISTAR CASINOS: Moody's Affirms 'B1' CFR, Rates Sr. Notes 'B3'
---------------------------------------------------------------
Moody Investors Service assigned a B3 rating to Ameristar Casinos,
Inc.'s proposed private placement offering of $240 million
principal amount of 7.50% senior unsecured notes due 2021. The
proposed notes are being offered under the indenture to which
Ameristar previously issued $800 million of its 7.50% senior notes
due 2021. Moody's also placed Ameristar's Ba3 senior secured bank
loan rating on review for possible upgrade. The company's
Corporate Family and Probability of Default ratings were affirmed
at B1. Ameristar has an SGL-2 Speculative Grade Liquidity rating.
The affirmation of Ameristar's B1 Corporate Family Rating
considers that the proposed transaction will be neutral with
respect to leverage. The company intends to use the net proceeds
from the offering to repay amounts outstanding under the revolving
loan tranche of its $500 million senior secured credit facility.
Approximately $239 million was drawn under the revolver at
December 31, 2011. The affirmation also reflects Moody's
expectation that availability under Ameristar's revolver, along
with free cash flow over the next few years, will likely go
towards development activity as opposed to the reduction of debt.
As a result, Moody's expects that Ameristar's debt/EBITDA will
remain near 6.0 times in the foreseeable future, a level Moody's
typically considers high for a B1 rated gaming issuer.
The B3 rating assigned to Ameristar's proposed unsecured notes
reflects the considerable amount of senior secured debt ahead of
it in the capital structure, both on a fiscal year 2011 -- the
company's latest public reporting period -- and on a pro forma
basis.
The review for possible upgrade assigned to Ameristar's Ba3 senior
secured bank loan rating considers the expected repayment of the
$239 million balance on the senior secured revolver along with the
increase in senior unsecured debt that will rank below it as a
result of the proposed $240 million senior unsecured add-on. On a
combined basis, this would provide enough incremental credit
support to Ameristar's senior secured debt, according to Moody's
Loss Given Default model, to warrant a one-notch upgrade to
Ameristar's senior secured bank debt.
Moody's expects to raise Ameristar's senior secured bank loan
ratings one-notch to Ba2 if/when the proposed transaction closes
and assuming no other material credit events occur prior to
closing. If, for any reason, the transaction does not close,
Moody's expects to confirm Ameristar's senior secured bank loan
ratings at Ba3.
Ratings affirmed:
Corporate Family Rating at B1
Probability of Default Rating at B1
$800 million senior unsecured notes due 2012 at B3 (LGD 5, 81%)
Ratings placed on review for possible upgrade and LGD assessments
subject to change:
$500 million senior secured revolver expiring 2016 at Ba3 (LGD 3,
31%)
$200 million senior secured term loan A 2016 at Ba3 (LGD 3, 31%)
$700 million senior secured term B due 2019 at Ba3 (LGD 3, 31%)
Rating assigned to proposed note offering:
$240 million senior unsecured notes due 2012 at B3 (LGD 5, 81%)
Ratings Rationale
Ameristar's B1 Corporate Family Rating reflects Moody's
expectation that the company's free cash flow over the next few
years will more than likely go towards development activity as
opposed to the reduction of debt. Also considered is that over 40%
of the company's property-level EBITDA still comes from two
properties located in Missouri. This exposes the company to sudden
short and/or long-term changes to market conditions in both St.
Louis and Kansas City. Positive ratings consideration is given to
Ameristar's very profitable operations relative to its peers. This
reflects the company's efficient and effective operations, leading
market share position in several markets, and the implementation
of an aggressive expense reduction program.
Ameristar's SGL-2 Speculative Grade Liquidity rating indicates
good liquidity. The SGL-2 incorporates Moody's view that Ameristar
will generate approximately $150 million of free cash flow during
the next 12-month period, and that all or a portion of it will be
used for casino development. The SGL-2 also recognizes that
Ameristar has no material scheduled debt maturities until 2016 and
acknowledges Moody's view that the company will not have
difficulty maintaining compliance with its financial covenants.
Ratings could be lowered if it appears that monthly gaming revenue
trends in the major markets in which Ameristar currently operates
experiences a material decline and that the company will not be
able to maintain debt/EBITDA at or below 6.0 times over the next
several years. A higher rating requires that Ameristar achieve and
sustain debt/EBITDA at or below 5.0 times in addition to
maintaining a Speculative Grade Liquidity rating of at least SGL-
2. A higher rating would also likely require that Moody's believes
monthly gaming revenue trends in the major markets in which
Ameristar currently operates will show long-term sustainable
improvement.
Although the proposed senior unsecured note offering did not have
an impact on Ameristar's Corporate Family and Probability of
Default ratings and Speculative Grade Liquidity rating, Moody's
expects to raise Ameristar's senior secured bank loan ratings to
Ba2 from Ba3 if and when the proposed transaction closes, and
assuming no other material credit events occur prior to closing.
The principal methodology used in rating Ameristar 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.
Ameristar owns and operates eight hotels/casinos in seven
jurisdictions. The company generates approximately $1.2 billion of
consolidated net revenues.
APRIA HEALTHCARE: Moody's Cuts CFR to 'B2'; Outlook Stable
----------------------------------------------------------
Moody's Investors Service lowered Apria Healthcare Group, Inc.'s
Corporate Family and Probability of Default Ratings to B2 from B1.
Moody's also lowered the company's $700 million Senior Secured A-1
notes to B1 from Ba3 and the $318 million Senior Secured A-2 notes
to Caa1 from B3. Additionally, Moody's affirmed Apria's
Speculative Grade liquidity Rating at SGL-2 reflecting the
company's good liquidity. The outlook is stable
The downgrade of the Corporate Family Rating reflects Moody's
expectations that Apria will continue to have difficulty growing
EBITDA and generating positive free cash flow in 2012 to a level
consistent with the B1 rating category. Apria's financial
performance remains impacted by higher than normal levels of
uncollectible receivables that stem from the company's attempt in
2010 to outsource its billing process. Furthermore, Moody's
expects continued pressure on the company free cash flow in 2012,
due to high capital expenditure commitments and interest expense.
Additionally, Moody's anticipates the company's home respiratory
therapy/home-medical equipment unit, which represents about 50% of
revenues may continue to experience pricing pressures. The company
also took a non-cash charge of about $658 million in the fourth
quarter of 2011, primarily against its home respiratory
therapy/home-medical equipment unit.
The following ratings have been lowered and LGD assessments have
been changed:
Apria Healthcare Group Inc.
Corporate Family Rating to B2 from B1;
Probability of Default Rating to B2 from B1;
$700 million Series A-1 notes due 2014 to B1 (LGD3, 32%) from Ba3
(LGD3, 39%);
$318 million Series A-2 notes due 2014 to Caa1 (LGD5, 81%) from B3
(LGD5, 84%);
Rating affirmed:
Speculative Grade Liquidity Rating, SGL-2:
Ratings Rationale
Apria's B2 Corporate Family Rating reflects the company's high
leverage and weak cash flow, ongoing exposure to reimbursement
risk, lower EBITDA margin relative to industry peers, and a
shareholder-oriented focus. The company had negative free cash
flow in 2011 largely associated with its outsourcing initiative
(the onshoring process is almost complete with the rehiring of
staff in 2011), which failed to meet expectations, and the higher
levels of capital expenditures required in its home respiratory
therapy/home-medical equipment unit. Moody's expects continued
pressure on free cash flow in 2012, as the company continues to
work on improving receivable collections. Therefore, Moody's
expects leverage to remain in the 4.5 times range.
Supporting the B2 rating is Apria's scale as the leading provider
of home healthcare products and services in the US with
significant market share in home respiratory and home infusion
therapy, which has been experiencing strong growth. Further, Apria
benefits from good diversity by geography and payor. Notably,
Medicare constitutes only roughly one-quarter of revenues, lower
than the other large competitors. Moody's believes revenue
prospects for home healthcare will be stable in 2012; however,
going forward there are a number of pressures facing the industry,
including competitive bidding and health care reform. Like other
large scale operators, Apria should experience volume increases
within its Medicare home respiratory segments, following clarity
on rates and the exit by smaller competitors in areas subject to
large reimbursement cuts.
The stable outlook reflects Moody's view that Apria will benefit
from near term stability in the current rate environment,
alongside volume expansion as the population continues to utilize
home health care services. Moody's, however, could downgrade the
rating should the company fail to return to positive free cash
flow, or if adjusted leverage were expected to be sustained above
5.5 times. Additionally, shareholder dividends or debt-financed
acquisitions absent any material EBITDA expansion could also
result in a downgrade.
Although not likely over the near term, should the company's
EBITDA expand materially such that adjusted leverage were expected
to be sustained below 4.0 times and free cash flow to debt were
expected to be sustained above 8% the ratings could be upgraded.
The principal methodology used in rating Apria Healthcare Group,
Inc.'s was the Loss Given Default for Speculative-Grade Non-
Financial Companies in the U.S., Canada and EMEA published in June
2009.
ASG CONSOLIDATED: S&P Lowers Corporate Credit Rating to 'B-'
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Seattle, Wash.-based ASG Consolidated LLC and its wholly
owned subsidiary, American Seafoods Group LLC (ASG), to 'B-' from
'B'.
"In addition, we lowered our issue-level rating on ASG's senior
secured debt, consisting of its revolving credit and term loan
facilities, to 'B+' (two notches higher than the corporate credit
rating) from 'BB-'. The recovery rating remains '1', indicating
our expectation for very high (90% to 100%) recovery in the event
of a payment default. At the same time, we lowered our issue-level
rating on ASG's senior subordinated notes to 'B-' (the same as the
corporate credit rating) from 'B'. The recovery rating remains
'4', indicating our expectation for average (30% to 50%) recovery
in the event of a payment default," S&P said.
"We removed all ratings from CreditWatch, where we had placed them
with negative implications on Dec. 5, 2011, because of our
financial covenant cushion concerns," S&P said.
"The outlook is stable. At Dec. 31, 2011, ASG Consolidated had
approximately $828 million of total debt outstanding," S&P said.
"The downgrade reflects our concerns regarding ASG Consolidated's
recent weakened operating results, its very aggressive financial
policies, continued tight covenant cushion in 2011, and the
potential for covenants to tighten again in 2012 if operating
performance does not improve," said Standard & Poor's credit
analyst Jeffrey Burian. "We had expected ASG's covenant cushion
to improve in 2011 as a result of higher total allowable catch
levels for fiscal 2011, which we anticipated would contribute to
higher EBITDA. However, leverage remains very high. The company's
working capital borrowings on its revolver were high, and its
fiscal 2011 operating results were weaker than our expectations."
"ASG Consolidated is a vertically integrated seafood harvesting,
processing, and marketing company that operates catcher-processor
vessels that participate in the largest commercial fishery in U.S.
waters."
"The stable outlook reflects Standard & Poor's expectation that
operating performance will gradually improve as TAC levels
continue to return to historical averages and as prices rebound
over the next few years. Although we believe leverage will remain
high, we expect ASG Consolidated to improve and sustain covenant
cushion levels at more than 10% over the next year," S&P said.
AURASOUND INC: Director Danny Tsui Resigns for Personal Reasons
---------------------------------------------------------------
Danny Tsui resigned from his position as a director of AuraSound,
Inc. Mr. Tsui resigned for personal reasons. Mr. Tsui did not
have any disagreement with the Company with regard to any of the
Company's policies, operations or practices.
About AuraSound, Inc.
Santa Ana, Calif-based AuraSound, Inc. (OTC BB: ARUZE) --
http://www.aurasound.com/-- develops, manufactures, and markets
audio products. AuraSound's products include TV soundbars, high-
drivers for TVs and laptops, subwoofers, and tactile transducers.
Hein & Associates LLP, in Irvine, Calif., expressed substantial
doubt about the Company's ability to continue as a going concern.
During the year ended June 30, 2011, the Company had negative cash
flow from operating activities amounting to $1.91 million and an
accumulated deficit of $36.9 million.
The Company's balance sheet at Dec. 31, 2011, showed
$40.76 million in total assets, $34.61 million in total
liabilities, all current, and $6.14 million in total stockholders'
equity.
AURASOUND INC: To Restate September & December Quarterly Reports
----------------------------------------------------------------
The executive management team of Aurasound, Inc., determined that
the Company's previously filed unaudited condensed consolidated
financial statements as of and for the fiscal quarter ended
Sept. 30, 2011, as reported in its Quarterly Report on Form 10-Q
filed with the Securities and Exchange Commission on Nov. 14,
2011, and as of and for the fiscal quarter ended Dec. 31, 2011, as
reported in its Quarterly Report on Form 10-Q filed with the
Commission on Feb. 14, 2012, can no longer be relied upon due to a
determination that:
(a) the Company misstated its revenue for the fiscal quarter
ended Sept. 30, 2011, due to an understated accrual, and
the appropriate adjustment will result in a to be
determined reduction in revenue, increase in cost of sales
and increase in net loss for that period; and
(b) the Company misstated its ending inventory for the fiscal
quarter ended Dec. 31, 2011, and the appropriate adjustment
will result in a to be determined increase in cost of sales
and increase in net loss for such period.
The errors resulted from the Company's lack of appropriate
controls around inventory management. As a result, the Company
intends to amend its Form 10-Q for the fiscal quarter ended
Sept. 30, 2011, and its Form 10-Q for the fiscal quarter ended
Dec. 31, 2011, to correct the errors to the financial statements
contained therein, as soon as reasonably practicable.
About AuraSound, Inc.
Santa Ana, Calif-based AuraSound, Inc. (OTC BB: ARUZE) --
http://www.aurasound.com/-- develops, manufactures, and markets
audio products. AuraSound's products include TV soundbars, high-
drivers for TVs and laptops, subwoofers, and tactile transducers.
Hein & Associates LLP, in Irvine, Calif., expressed substantial
doubt about the Company's ability to continue as a going concern.
During the year ended June 30, 2011, the Company had negative cash
flow from operating activities amounting to $1,909,846, and an
accumulated deficit of $36,884,905.
The Company's balance sheet at Dec. 31, 2011, showed
$40.76 million in total assets, $34.61 million in total
liabilities, all current, and $6.14 million in total stockholders'
equity.
BARCLAY SQUARE: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Barclay Square Condominium, LLC
P.O. Box 699
Ashland, OR 97520
Bankruptcy Case No.: 12-61554
Chapter 11 Petition Date: April 17, 2012
Court: United States Bankruptcy Court
District of Oregon
Judge: Frank R. Alley III
Debtor's Counsel: Keith Y. Boyd, Esq.
724 S Central Ave #106
Medford, OR 97501
Tel: (541) 973-2422
E-mail: ecf@boydlegal.net
Scheduled Assets: $5,248,977
Scheduled Liabilities: $4,758,043
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by Evan Archerd, sole member of Archerd &
Dresner, LLC.
BEAN'S REALTY: Case Summary & 12 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Bean's Realty, LLC
1351 Dixwell Avenue
Hamden, CT 06514
Bankruptcy Case No.: 12-30907
Chapter 11 Petition Date: April 17, 2012
Court: United States Bankruptcy Court
District of Connecticut (New Haven)
Judge: Lorraine Murphy Weil
Debtor's Counsel: Peter L. Ressler, Esq.
GROOB RESSLER & MULQUEEN
123 York Street, Ste 1B
New Haven, CT 06511-0001
Tel: (203) 777-5741
Fax: (203) 777-4206
E-mail: ressmul@yahoo.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 12 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/ctb12-30907.pdf
The petition was signed by Joseph Natale, member.
BELO CORP: Fitch Affirms Issuer Default Rating at 'BB'
------------------------------------------------------
Fitch Ratings has affirmed the 'BB' Issuer Default Rating (IDR)
and all outstanding ratings for Belo Corporation (Belo). The
Rating Outlook is Stable.
The ratings reflect the ongoing improvement in Belo's credit
profile, driven by the company's debt reduction efforts as well as
improvement in operating profits. Fitch estimates total leverage
of 4.3 times (x) at Dec. 31, 2011, versus a peak of 6.0x in the
downturn. Metrics are well within Fitch's previously stated
leverage threshold of 4.0x, in a political year (5.0x in a non-
political year), and place the company at the higher end of the
'BB' ratings category.
Fitch expects a stable operating environment in 2012, with core
advertising revenue growth in the low single digits, bolstered by
strength in auto advertising (the company's largest vertical).
Further, although Belo has smaller exposure to political
advertising than many of its local affiliate peers, Fitch expects
political advertising to make a meaningful contribution that at
least equals the $56 million seen in 2010 (approximately 8% of
total revenue). As a result, Fitch expects total revenue growth
of approximately 10% in 2012. Although the ratings do not give a
material amount of credit to political revenue, given its
temporary and volatile nature, it does provide a strong free cash
flow (FCF) boost in even years.
Fitch expects Belo to continue to benefit from growth of high
margin retransmission revenue, which provides incremental
stability and visibility in the operating profile. Retransmission
revenue reduces the overall risk in the operating profile as it
moves the local affiliate model more towards the dual-revenue
stream model of cable networks. However, given the leverage that
Fitch expects the broadcast networks to retain over the local
affiliates (particularly in an over the top [OTT] world), Fitch
expects This revenue will be partially offset by increasing
reverse compensation fees to the networks, although Fitch expects
the overall impact to remain a moderate net positive to Belo.
Fitch expects Belo will continue to deploy its FCF for the benefit
of both equity- and bond-holders. After the 60% dividend
increase, Fitch expects Belo to generate nearly $100 million of
FCF in 2012 (including a $30 million tax refund in first quarter
2012), and $30 million in 2013. Fitch expects a portion of this
cash could be used for acquisitions or share repurchases. Fitch
also expects the company to repay at least a portion of its $176
million May 2013 maturity with cash.
Belo maintains significant financial flexibility at current
ratings for FCF funded share repurchases and M&A. Given expected
stability in the ad revenue base and growth in retransmission
revenues over the medium term, debt reduction is not necessary to
maintain current ratings. Further, given metrics below Fitch's
target, in a stable macroeconomic environment there is room for
some debt-funded buybacks, though this would likely remove any
potential ratings upside.
The ratings continue to be supported by Belo's strong local
presence in the top-50 U.S. markets, with either the No.1 or No.2
station in most of its markets, driven by a track record of making
investments in its news infrastructure. Additionally, the company
benefits from a diverse array of top network affiliations
(excluding Arizona). These dynamics are expected to offer more
protection from secular pressures than lower rated stations or
weaker affiliations, and as such, Fitch would expect Belo to
compete effectively with print products, radio and other
broadcasters, for local ad dollars over the intermediate term.
Long-term secular risks continue to be present related to
declining audiences amid increasing entertainment alternatives,
with further pressures from the proliferation of OTT Internet-
based television services. However, it is Fitch's expectation
that local broadcasters, particularly the higher-rated stations,
will continue to remain relevant and capture material audiences
that local, regional and national spot advertisers will demand.
Retransmission revenue reduces the overall risk to the operating
profile.
Fitch does not anticipate a negative impact to Belo from the
recent legislation authorizing the FCC to conduct a voluntary
incentive auction of broadcasters' spectrum, for purposes of
reallocation for wireless broadband use. It is unknown whether
and to what degree Belo or other local broadcasters would
participate in the auction, as well as auction timing. Belo plans
to deploy the spectrum not currently used for traditional
television broadcasting for multicast stations and mobile
applications, and Fitch does not expect the company to sell
spectrum that would impede these plans.
Further sustainable deleveraging below 3.25x in a political year
and 4.25x in a nonpolitical year (assuming a similar business risk
profile), as well as clarity around the repayment/refinancing of
the 2013 maturity could result in positive rating actions. Fitch
would be unlikely to take positive rating actions in a volatile
macroeconomic environment given the cyclicality of the business.
A more aggressive use of cash than anticipated for M&A or share
buybacks could also have rating pressure. Negative actions could
occur if cyclical or secular pressure results in leverage outside
of Fitch's current threshold, with no ability to get back in a
reasonable amount of time.
Fitch views Belo's current liquidity as adequate, with more than
$100 million of cash on hand (pro forma for a $30 million tax
refund in January 2012) and $194 million available under the
undrawn $200 million revolving credit facility (RCF; net of
letters of credit). The company has grown its cash balance since
the repayment of its RCF in early 2011. As stated Fitch expects
some of this cash to be used for potential M&A and share
repurchases, with a portion likely used to repay some of the May
2013 maturity.
As of Dec. 31, 2011, there was $891 million face value of debt
outstanding, consisting of:
-- $176 million of senior unsecured notes maturity May 2013;
-- $275 million of guaranteed senior unsecured notes maturing
November 2016;
-- $440 million of senior unsecured notes maturing 2027.
Fitch affirms Belo's ratings as follows:
-- Issuer Default Rating (IDR) at 'BB';
-- Guaranteed RCF at 'BB+';
-- Guaranteed senior unsecured notes at 'BB+';
-- Non-guaranteed senior unsecured notes/bonds at 'BB'.
The 'BB+' rating on the RCF reflects the senior guarantee from
substantially all of Belo's domestic subsidiaries, as well as the
absence of secured debt in the capital structure. Although the
guarantee on the senior unsecured 2016 notes is contractually
subordinated to the guarantee on the bank debt, Fitch equalizes
the ratings on the two obligations, given Belo's enterprise value
and the portion of total debt and leverage comprised by both
tranches of debt. The legacy notes are not guaranteed and are
therefore notched down one from the guaranteed debt.
BIOFUEL ENERGY: Unable to Comply with NASDAQ's $1 Bid Price Rule
----------------------------------------------------------------
BioFuel Energy Corp. received a letter from the Listing
Qualifications Staff of The NASDAQ Stock Market indicating that
the Company had not regained compliance with the $1.00 bid price
requirement for continued listing on NASDAQ, as set forth in
Listing Rule 5550(a)(2), and as a result, the Company's securities
would be subject to delisting unless the Company timely requests a
hearing before the NASDAQ Listing Qualifications Panel.
The Company intends to timely request a hearing before the Panel
at which the Company will present its plan to regain compliance
with the minimum bid price requirement, including via the
implementation of a reverse stock split if necessary. Toward that
end, the Company has filed with the SEC a Proxy Statement on Form
14A in connection with its upcoming Annual Meeting of Stockholders
seeking among other things stockholder approval of an amendment to
its Certificate of Incorporation to effect a reverse stock split
at a ratio of between 1-for-10 and 1-for-20 shares, inclusive,
which ratio is to be selected at the discretion of the Company's
Board of Directors.
The Staff's letter follows the Staff's prior notice to the Company
dated Oct. 18, 2011, that the Company had been granted a second
180-day cure period to regain compliance with the $1.00 bid price
requirement, which expired on April 16, 2012.
About Biofuel Energy
Denver, Colo.-based BioFuel Energy Corp. (Nasdaq: BIOF) --
http://www.bfenergy.com/-- aims to become a leading ethanol
producer in the United States by acquiring, developing, owning and
operating ethanol production facilities. It currently has two
115 million gallons per year ethanol plants in the Midwestern corn
belt.
The Company reported a net loss of $10.36 million in 2011,
compared with a net loss of $25.22 million during the prior year.
The Company's balance sheet at Dec. 31, 2011, $299.58 million in
total assets, $199.64 million in total liabilities and
$99.94 million in total equity.
Bankruptcy Warning
According to the Form 10-K for the year ended Dec. 31 2011,
commodity margins have narrowed since the end of 2011 and, should
current commodity margins continue for an extended period of time,
the Company may not generate sufficient cash flow from operations
to both service its debt and operate the Company's plants. The
Company is required to make, under the terms of its Senior Debt
Facility, quarterly principal payments in a minimum amount of
$3,150,000, plus accrued interest. The Company cannot predict
when or if crush spreads will fluctuate again or if the current
commodity margins will improve or worsen. If crush spreads were
to remain at current levels for an extended period of time, the
Company may expend all of its sources of liquidity, in which event
the Company would not be able to pay principal and interest on its
debt. Any inability to pay principal and interest on the
Company's debt would lead to an event of default under its Senior
Debt Facility, which, in the absence of forbearance, debt service
abeyance or other accommodations from the Company's lenders, could
require the Company to seek relief through a filing under the U.S.
Bankruptcy Code.
BLITZ USA: Court Extends Plan Exclusivity Period to June 6
----------------------------------------------------------
At the behest of Blitz U.S.A. Inc., the U.S. Bankruptcy Court
extended the period within which the Debtors have the exclusive
right to file a plan of reorganization for 90 days through and
including June 6, 2012, and the period within which they have the
exclusive right to solicit acceptances of that plan through and
including Aug. 6, 2012.
According to the Debtors, the first 120 days of the Chapter 11
Cases has been extremely busy and productive periods for the
Debtors during which they have devoted considerable attention to:
-- selling certain assets, including the assets relating to
the F3 Brands business line;
-- addressing the disruptions upon the Debtors' business caused
by the commencement of the Chapter 11 Cases, including issue
relating to customer concerns and employee attrition;
-- addressing the effect that the filing of the Chapter 11
Cases has upon a PCGC lawsuit pending against the Debtors
and certain of their resellers in various state and federal
courts; and
-- devising a long-term business strategy and meeting with key
constituencies to begin the process of formulating a
consensual chapter 11 plan of reorganization.
About Blitz USA
Blitz U.S.A. Inc., is a Miami, Oklahoma-based manufacturer of
plastic gasoline cans. The company, controlled by Kinderhook
Capital Fund II LP, filed for bankruptcy protection to stanch a
hemorrhage resulting from 36 product-liability lawsuits.
Parent Blitz Acquisition Holdings, Inc., and its affiliates filed
for Chapter 11 protection (Bankr. D. Del. Case Nos. 11-13602 thru
11-13607) on Nov. 9, 2011. The Hon. Peter J. Walsh presides over
the case.
Blitz USA disclosed $36,194,434 in assets and $41,428,577 in
liabilities in its schedules.
Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger,
represents the Debtors in their restructuring efforts. The
Debtors tapped Zolfo Cooper, LLC, as restructuring advisor; and
Kurtzman Carson Consultants LLC serves as notice and claims agent.
Lowenstein Sandler PC from Roseland, New Jersey, represents the
Official Committee of Unsecured Creditors.
The Chapter 11 case is financed with a $5 million secured loan
from Bank of Oklahoma. Bank of Oklahoma, as DIP agent, is
represented by Samuel S. Ory, Esq., at Frederic Dorwart Lawyers in
Tulsa.
BLITZ USA: Court Extends Lease Decision Deadline to June 6
----------------------------------------------------------
The U.S. Bankruptcy Court has extend the initial 120-day period
for Blitz U.S.A. Inc. to assume or reject unexpired non-
residential real property leases for another 90 days, through and
including June 6, 2012. The Debtors' initial period to decide on
the Leases was scheduled to expire March 8.
While the Debtors do not lease any real property from third-party
landlords, there are a number of non-residential real property
leases between the Debtors themselves. The Debtors said they are
in the process of selling their assets relating to the business
line of F3 Brands LLC. Accordingly, the Debtors must wait until
the conclusion of this sale process to identify the ultimate
purchaser of the F3 Assets and to determine what the purchaser's
intentions will be with respect to any Leases relating to the F3
Brands' business line.
With respect to any Leases relating to the Blitz U.S.A. business,
the Debtors are still in the early stages of formulating a chapter
11 plan and therefore are unable to determine which leases would
be assumed or rejected in connection with any reorganization of
the Blitz USA business.
About Blitz USA
Blitz U.S.A. Inc., is a Miami, Oklahoma-based manufacturer of
plastic gasoline cans. The company, controlled by Kinderhook
Capital Fund II LP, filed for bankruptcy protection to stanch a
hemorrhage resulting from 36 product-liability lawsuits.
Parent Blitz Acquisition Holdings, Inc., and its affiliates filed
for Chapter 11 protection (Bankr. D. Del. Case Nos. 11-13602 thru
11-13607) on Nov. 9, 2011. The Hon. Peter J. Walsh presides over
the case.
Blitz USA disclosed $36,194,434 in assets and $41,428,577 in
liabilities in its schedules.
Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger,
represents the Debtors in their restructuring efforts. The
Debtors tapped Zolfo Cooper, LLC, as restructuring advisor; and
Kurtzman Carson Consultants LLC serves as notice and claims agent.
Lowenstein Sandler PC from Roseland, New Jersey, represents the
Official Committee of Unsecured Creditors.
The Chapter 11 case is financed with a $5 million secured loan
from Bank of Oklahoma. Bank of Oklahoma, as DIP agent, is
represented by Samuel S. Ory, Esq., at Frederic Dorwart Lawyers in
Tulsa.
BRIER CREEK CORP: Can Use BofA's Cash Collateral Through May 31
---------------------------------------------------------------
Brier Creek Corporate Center Associates Limited Partnership and
its debtor-affiliates can use cash collateral of Bank of America
N.A., for an additional six weeks, through May 31, 2012, according
to a bankruptcy order on April 24.
Bankruptcy Judge Stephani W. Humrickhouse earlier this month gave
the Debtors the authority to use cash collateral through April 21,
but barred them from borrowing additional funds postpetition. The
Debtors, according to that order, may use, on an interim basis,
postpetition rents from their properties to operate, maintain,
preserve and protect all the assets of the Debtors which are
subject to the security interests asserted by BofA in the
Properties.
On Tuesday, the judge said a second interim order allowing the
Debtors continued use of cash collateral followed by a final
hearing at some future date selected by the Court would not
prejudice the rights of BofA, as (i) the bank would continue to
maintain the existing liens on the Properties, and (ii) the use of
cash collateral would preserve during the duration of the interim
order the value of the estates for BofA and all other creditors.
On April 3, the Court issued an order denying the Debtors' request
to borrow postpetition financing from AAC Retail Property
Development and Acquisition Fund, LLC, and AAC Property Investment
Fund, LLC.
The Court noted that the Debtors' filings and the 13-week budget
indicate the Debtors project sufficient rental income, when
combined with the Debtors' cash reserves as of the Petition Date,
to pay all of the costs or expenditures likely to arise through
June 30, 2012.
The Debtors had argued they need DIP financing to supplement
revenues and timely pay the on-going costs of operating,
preserving, and protecting their Properties after June 30. In
addition, prior to June 30, the Debtors said they may need
postpetition financing to pay any costs of administration which
may not be paid from BofA's cash collateral.
The Court will hold a future hearing, if necessary, to determine
the extent, if any, to which the Debtors' are entitled to and will
need postpetition financing.
Meanwhile, the Court scheduled another hearing on May 30 on the
Debtors' cash collateral use. This could be the final hearing on
the matter. BofA's rights to object to the use of cash collateral
are reserved until the final hearing, the Court said.
Three of the bankrupt companies at Brier Creek disclosed a total
of $32.5 million owing to BofA, while five bankrupt companies at
the Whitehall development listed a total of $61.6 million owing to
the bank.
The Debtors have noted in court papers that each BofA loan is the
separate obligation of the respective borrowers, and while BofA is
the largest but not the only secured creditor in each of the
bankruptcy proceedings, the BofA loans are not cross-
collateralized.
The Debtors also have noted that while they are presently involved
in litigation with BofA regarding the loans and other obligations,
the Debtors do not presently dispute the extent, validity or
priority of the liens and security interests held by BofA with
respect to each separate secured claim held by BofA. The Debtors
reserve for themselves, any Committee of Unsecured Creditors
subsequently created, and any trustee subsequently appointed in
any of the Chapter 11 proceedings or in any subsequent Chapter 7
proceeding, any and all rights to challenge, avoid, object to, set
aside or subordinate any claims, liens, security interests or
rights of setoff against the Debtors' property, or the rents,
profits and income generated.
According to the case docket, a Chapter 11 Plan and an explanatory
Disclosure Statement are due by June 7, 2012.
About Brier Creek Corporate Center Associates
Brier Creek Corporate Center Associates Limited, Whitehall
Corporate Center #4, LLC, and seven other related entities
affiliates filed for Chapter 11 protection (Bankr. E.D.N.C. Lead
Case No. 12-01855) on March 9, 2012. The Debtors own real
property located in Wake County, North Carolina and Mecklenburg
County, North Carolina. In most instances, the real property
owned by the Debtors consists of land upon which is constructed
commercial or industrial buildings consisting of office, service
or retail space.
The affiliates that also sought bankruptcy protection are: Brier
Creek Office #4, LLC; Brier Creek Office #6, LLC; Service Retail
at Brier Creek, LLC; Service Retail at Whitehall II L.P.; Shopton
Ridge 30-C, LLC; Whitehall Corporate Center #4, LLC; Whitehall
Corporate Center #5, LLC; and Whitehall Corporate Center #6, LLC.
Brier Creek is a 106-acre development that is to have 2.8 million
square feet of commercial space. Whitehall has 146 acres and will
have 4 million square feet on completion. Brier Creek Corporate
scheduled assets of $19,713,147 and liabilities of $18,086,183.
Judge Stephani W. Humrickhouse oversees the case. Northen Blue,
LLP, serves as counsel to the Debtors. C. Richard Rayburn, Jr.
and the firm Rayburn Cooper & Durham, P.A., serve as special
counsel. Grant Thornton LLP is the accountant. Bidencope &
Associates is the appraiser. The petitions were signed by Terry
Bradshaw, vice president.
BRIER CREEK CORP: Taps Northen Blue as Chapter 11 Counsel
---------------------------------------------------------
Brier Creek Corporate Center Associates LP and its debtor-
affiliates seek Bankruptcy Court authority to employ Northen Blue,
LLP as Chapter 11 counsel.
John A. Northen, Esq., a partner at the firm who will lead the
engagement, attests that the firm represents no other entity in
connection with the Debtors' cases, represents or holds no
interest adverse to the interest of the estates with respect to
the matters on which they are to be employed, and are
disinterested as that term is defined in 11 U.S.C. Sec. 101(14).
Mr. Northen disclosed, however, that his firm is currently
representing John R. McAdams Company, Inc., a secured creditor of
BCCC and an unsecured creditor of SRBC, in a matter unrelated to
the Debtors and the Chapter 11 proceedings. McAdams is aware of
the firm's representation of the Debtors in the proceedings and
has waived any conflict of interest that might arise as a result
of such representation. To the extent necessary, McAdams will
retain separate counsel to represent it in the Debtors'
proceedings.
Mr. Northen's hourly rate is $450 per hour and Vicki Parrott's
rate is $350 per hour. Mr. Northen also disclosed that the firm
received initial retainers and payments from the Debtors in the
aggregate amount of $154,365, of which $73,854 has been expended
in payment of prepetition services and expenses.
About Brier Creek Corporate Center Associates
Brier Creek Corporate Center Associates Limited, Whitehall
Corporate Center #4, LLC, and seven other related entities
affiliates filed for Chapter 11 protection (Bankr. E.D.N.C. Lead
Case No. 12-01855) on March 9, 2012. The Debtors own real
property located in Wake County, North Carolina and Mecklenburg
County, North Carolina. In most instances, the real property
owned by the Debtors consists of land upon which is constructed
commercial or industrial buildings consisting of office, service
or retail space.
The affiliates that also sought bankruptcy protection are: Brier
Creek Office #4, LLC; Brier Creek Office #6, LLC; Service Retail
at Brier Creek, LLC; Service Retail at Whitehall II L.P.; Shopton
Ridge 30-C, LLC; Whitehall Corporate Center #4, LLC; Whitehall
Corporate Center #5, LLC; and Whitehall Corporate Center #6, LLC.
Brier Creek is a 106-acre development that is to have 2.8 million
square feet of commercial space. Whitehall has 146 acres and will
have 4 million square feet on completion. Brier Creek Corporate
scheduled assets of $19,713,147 and liabilities of $18,086,183.
Judge Stephani W. Humrickhouse oversees the case. Northen Blue,
LLP, serves as counsel to the Debtors. C. Richard Rayburn, Jr.
and the firm Rayburn Cooper & Durham, P.A., serve as special
counsel. Grant Thornton LLP is the accountant. Bidencope &
Associates is the appraiser. The petitions were signed by Terry
Bradshaw, vice president.
BRIER CREEK CORP: Hires Rayburn as Counsel in BofA Litigation
-------------------------------------------------------------
Brier Creek Corporate Center Associates LP and its debtor-
affiliates ask the Bankruptcy Court for permission to employ
Rayburn Cooper & Durham, P.A., as special counsel to represent the
Debtors in their lawsuit against Bank of America, N.A.
The firm has advised the Debtors and their affiliates, including
American Asset Corporation Companies, Ltd., Riprand Count Arco,
and other non-debtor affiliates and equity holders of the Debtors,
in connection with a number of legal matters since 2009. The
Debtors now want the firm to continue providing those services.
On Oct. 13, 2011, the Debtors, Cary Creek Limited Partnership, and
other plaintiffs (separately represented) filed a complaint in
Mecklenburg County Superior Court against BofA, Case No. 11-CVS-
19225. Rayburn Cooper is acting as counsel for the Debtors and
their co-plaintiff Cary Creek in the litigation and related
foreclosure proceedings. The Complaint seeks to enjoin BofA from
foreclosing on the Debtors' and Cary Creek's real property, and
seeks damages and other relief pursuant to causes of action for
breach of contract, misrepresentation, slander of title, breach of
the implied duty of good faith and fair dealing, tortious
interference with business relations, fraudulent inducement,
breach of fiduciary duties, frustration of commercial purpose,
unfair and deceptive trade practices, and constructive fraud. In
connection with the Litigation, the Debtors and Cary Creek have
opposed BofA's motion for the appointment of a receiver.
Rayburn Cooper would also act as counsel for the Debtors in the
event the Litigation is arbitrated.
C. Richard Rayburn, Jr., Esq., a partner at Rayburn Cooper,
disclosed that:
-- In the one year prior to the Petition Date, the firm
provided legal services either directly or indirectly to the
Debtors. The firm has been paid $355,789 for professional
services rendered and expenses incurred for the Debtors and non-
debtor affiliates. Of this amount, the Debtors and non-debtor
Cary Creek supplied $270,000 of the retainer funds from which
these fees were paid, and remaining retainers were provided by
non-debtor entities. All of the payments made to the firm prior
to the petition date were from the prepetition retainers received
by the firm. These fees and expenses include, without limitation,
providing legal services to the Debtors in connection with the
BofA Litigation.
-- The balance of the firm's prepetition retainer, which
funds were received from the Debtors and Cary Creek, is $7,788 as
of the Petition Date. This prepetition retainer is held by the
Firm as security for such postpetition fees and expenses as may be
allowed by the Court.
The firm's hourly rates are:
Attorneys
Shelley K. Abel $280
Ramyn Atri $180
Paul R. Baynard $380
W. Scott Cooper $375
Albert F. Durham $475
Michelle E. Earp $180
Daniel J. Finegan $230
Ross R. Fulton $275
James B. Gatehouse $310
G. Kirkland Hardymon $310
David S. Melin $280
John R. Miller, Jr. $310
Ashley K. Neal $210
C. Richard Rayburn, Jr. $650
William S. Smoak, Jr. $260
Paralegals
Kristy D. Godin $150
Lisa S. Kelly $125
Tiffany N. Lindsay $125
Julia L. Robinson $125
Wendy M. Schoolcraft $125
Elizabeth A. Vincent $125
About Brier Creek Corporate Center Associates
Brier Creek Corporate Center Associates Limited, Whitehall
Corporate Center #4, LLC, and seven other related entities
affiliates filed for Chapter 11 protection (Bankr. E.D.N.C. Lead
Case No. 12-01855) on March 9, 2012. The Debtors own real
property located in Wake County, North Carolina and Mecklenburg
County, North Carolina. In most instances, the real property
owned by the Debtors consists of land upon which is constructed
commercial or industrial buildings consisting of office, service
or retail space.
The affiliates that also sought bankruptcy protection are: Brier
Creek Office #4, LLC; Brier Creek Office #6, LLC; Service Retail
at Brier Creek, LLC; Service Retail at Whitehall II L.P.; Shopton
Ridge 30-C, LLC; Whitehall Corporate Center #4, LLC; Whitehall
Corporate Center #5, LLC; and Whitehall Corporate Center #6, LLC.
Brier Creek is a 106-acre development that is to have 2.8 million
square feet of commercial space. Whitehall has 146 acres and will
have 4 million square feet on completion. Brier Creek Corporate
scheduled assets of $19,713,147 and liabilities of $18,086,183.
Judge Stephani W. Humrickhouse oversees the case. Northen Blue,
LLP, serves as counsel to the Debtors. C. Richard Rayburn, Jr.
and the firm Rayburn Cooper & Durham, P.A., serve as special
counsel. Grant Thornton LLP is the accountant. Bidencope &
Associates is the appraiser. The petitions were signed by Terry
Bradshaw, vice president.
BRIER CREEK CORP: Can Hire Property Manager & Leasing Agent
-----------------------------------------------------------
Brier Creek Corporate Center Associates LP and its debtor-
affiliates obtained authority from the Bankruptcy Court to
continue to employ American Asset Corporation as property manager
and leasing agent.
The Debtors are authorized to pay the commission and other
compensation owed to American Asset Corporation for property
management, leasing and consulting services in the ordinary course
of business.
Pursuant to the Property Management Agreement between each Debtor
and AAC, AAC would, as applicable:
a. manage the day-to-day maintenance and operation of the
Debtor's project;
b. coordinate and oversee repairs, alterations and tenant
improvements;
c. arrange for utilities, cleaning services or other similar
services, as may be required to be furnished by the Debtor
under certain leases;
d. market and lease available space, and take such other
steps as shall be reasonably required to keep the Project
fully rented;
e. make regular physical inspections of the Project regarding
maintenance or conservation work that may be necessary or
appropriate;
f. prepare and provide monthly operating profit and loss
statements, aging reports on delinquencies, a rent roll,
an executive summary, as well as other reports;
g. prepare and submit a proposed annual budget for the
Project; and
h. provide other services involved in the management and
leasing of the Project.
The Property Management Agreements may also contain provisions for
(i) Long Term Financing Services and a Financing Fee, (ii)
Supervision of Improvements and a Supervision Fee, (iii) Sale of
Parcels and a Sales Fee, and/or (iv) a Credit Enhancement Fee.
AAC will not be providing these services to the Debtors after the
Petition Date and no such fees shall be paid to AAC unless
otherwise approved by the Court.
In its capacity as property manager and leasing agent for the
Projects, AAC is not a "professional person" within the meaning of
Sec. 327(a) of the Bankruptcy Code.
About Brier Creek Corporate Center Associates
Brier Creek Corporate Center Associates Limited, Whitehall
Corporate Center #4, LLC, and seven other related entities
affiliates filed for Chapter 11 protection (Bankr. E.D.N.C. Lead
Case No. 12-01855) on March 9, 2012. The Debtors own real
property located in Wake County, North Carolina and Mecklenburg
County, North Carolina. In most instances, the real property
owned by the Debtors consists of land upon which is constructed
commercial or industrial buildings consisting of office, service
or retail space.
The affiliates that also sought bankruptcy protection are: Brier
Creek Office #4, LLC; Brier Creek Office #6, LLC; Service Retail
at Brier Creek, LLC; Service Retail at Whitehall II L.P.; Shopton
Ridge 30-C, LLC; Whitehall Corporate Center #4, LLC; Whitehall
Corporate Center #5, LLC; and Whitehall Corporate Center #6, LLC.
Brier Creek is a 106-acre development that is to have 2.8 million
square feet of commercial space. Whitehall has 146 acres and will
have 4 million square feet on completion. Brier Creek Corporate
scheduled assets of $19,713,147 and liabilities of $18,086,183.
Judge Stephani W. Humrickhouse oversees the case. Northen Blue,
LLP, serves as counsel to the Debtors. C. Richard Rayburn, Jr.
and the firm Rayburn Cooper & Durham, P.A., serve as special
counsel. Grant Thornton LLP is the accountant. Bidencope &
Associates is the appraiser. The petitions were signed by Terry
Bradshaw, vice president.
BRUNO'S ISLAND: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Bruno's Island Yacht Harbor Inc.
dba Bruno's Island
2715 West Kettleman Way Suite 203-355
Lodi, CA 95242
Bankruptcy Case No.: 12-27284
Chapter 11 Petition Date: April 15, 2012
Court: United States Bankruptcy Court
Eastern District of California (Sacramento)
Judge: Michael S. McManus
Debtor's Counsel: C. Anthony Hughes, Esq.
1395 Garden Highway, Suite 150
Sacramento, CA 95833
Tel: (916) 440-6666
E-mail: Attorney@4406666.com
Estimated Assets: $500,001 to $1,000,000
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/caeb12-27284.pdf
The petition was signed by David Snodderly, president.
BUFFETS INC: Unsecureds to Recoup 9% Under Modified Plan
--------------------------------------------------------
Dow Jones Newswires reports that Buffets Restaurants Holdings
Inc., plans to pay $4 million to a pool of creditors who are owed
more than $44 million at the end of its Chapter 11 bankruptcy
case, which will cut the restaurant chain's debt with the hope of
keeping its roughly 400 remaining restaurants alive.
According to the report, under a tweaked reorganization plan filed
with the bankruptcy court last week, Buffets Restaurants said
unsecured creditors -- a group that includes landlords and
suppliers like Coca-Cola Co. -- were supposed to receive nothing
once the company reorganizes its finances. The latest move would
strengthen the company's finances after an earlier bankruptcy
reorganization in 2008, which shook some $600 million worth of
debt from the company's balance sheet.
"Although the [company] reduced a significant amount of their
longterm debt under their prior Chapter 11 plan and closed certain
unprofitable locations, [the company and its affiliates] have
continued to be adversely affected by the sluggish U.S. economy,"
the report quotes the company as saying.
The report relates unsecured creditors, who would recover about
9% of their claims under the latest proposal, still have the
ability to reject that plan with a vote. The company has asked
a bankruptcy judge for permission to send out a summary of the
Chapter 11 plan at an April 30 hearing.
The report, citing court documents, notes the proposal would allow
the company to emerge from bankruptcy protection and begin making
smaller debt payments by the end of June.
About Buffets Inc.
Buffets Inc., the nation's largest steak-buffet restaurant
company, operates 494 restaurants in 38 states, comprised of 483
steak-buffet restaurants and 11 Tahoe Joe's Famous Steakhouse(R)
restaurants, and franchises 3 steak-buffet restaurants in two
states. The restaurants are principally operated under the Old
Country Buffet(R), HomeTown(R) Buffet, Ryan's(R) and Fire
Mountain(R) brands. Buffets employs 28,000 team members and
serves 140 million customers annually.
Buffets Inc. and all of its subsidiaries filed Chapter 11
petitions (Bankr. D. Del. Lead Case No. 12-10237) on Jan. 18,
2012, after it reached a restructuring support agreement with 83%
of its lenders to eliminate virtually all of the Company's roughly
$245 million of outstanding debt. In its schedules Buffets Inc.
disclosed $384,810,974 in assets and $353,498,404 in liabilities.
The Debtors are seeking to reject leases for 83 underperforming
restaurants.
Buffets had 626 restaurants when it began its prior bankruptcy
case (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). It emerged
from bankruptcy in April 2009.
Higher gasoline and energy costs, along with a decline in guest
count, have hampered the Debtors' ability to service their long-
term debt and caused a liquidity strain, forcing the Company to
return to Chapter 11 bankruptcy.
In the new Chapter 11 case, Buffets Inc.'s legal advisors are
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Young, Conaway,
Stargatt & Taylor, LLP. The Company's financial advisor is
Moelis, Inc. Epiq Bankruptcy Solutions LLC serves as claims,
noticing and balloting agent.
An ad hoc committee of secured lenders is represented by Willkie
Far & Gallagher LLP and Blank Rome LLP as counsel and Conway, Del
Genio, Gries & Co. as financial advisors. Credit Suisse, as DIP
Agent and Prepetition First Lien Agent, is represented by Skadden
Arps Slate Meagher & Flom as counsel.
The U.S. Trustee has appointed a 5-member Official Committee of
Unsecured Creditors in the Debtors' cases.
BUILDERS FIRSTSOURCE: S&P Affirms 'CCC' Corporate Credit Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Dallas-
based Builders FirstSource Inc. to positive from negative.
"At the same time, we affirmed our 'CCC' corporate credit rating
on the company and affirmed the 'CC' issue rating on its $140
million of second-lien notes due 2016," S&P said.
"The outlook revision reflects our assessment that Builders
FirstSource's operating conditions are improving such that we now
expect the building products manufacturer and distributor to post
positive annual EBITDA for the first time since 2007, albeit at
very low levels," said Standard & Poor's credit analyst James
Fielding. "In our view, improved profitability will better
position the company to refinance some of its expensive floating
rate debt and possibly close its interest coverage shortfall over
the next 12 months."
"Our rating continues to reflect our assessment of the company's
business risk as 'vulnerable' and its financial risk as 'highly
leveraged'. Our vulnerable business risk opinion acknowledges that
demand for the company's products is highly cyclical and is only
beginning to recover from very weak levels. Our highly leveraged
financial risk assessment reflects a very heavy debt burden with
high interest costs," S&P said.
"The positive rating outlook reflects our expectation that
operating improvements will accelerate in line with our forecast
for higher housing starts and that Builders FirstSource will
likely be in a better position next year to refinance some of its
expensive floating rate debt and possibly close its interest
coverage shortfall," S&P said.
"We would upgrade our corporate credit rating if operating
improvements closely track our baseline assumptions over the next
year and we viewed it likely that Builders FirstSource would soon
generate sufficient EBITDA to fully cover its interest costs on a
sustainable basis. An upgrade would be further supported if
improved operations and accommodative credit markets enable the
company to refinance some of its expensive variable rate debt at a
lower cost," S&P said.
"While less likely over the next 12 months given the company has
no near-term maturities and our growth assumptions, we would lower
our rating if the housing market recovery stalls and Builders
FirstSource posts larger than expected operating cash flow
deficits such that cash holdings dropped close to the $35 million
level required under its first-lien term loan agreement," S&P
said.
CARPENTER CONTRACTORS: Plan Outline Hearing Continued Until May 16
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida has
continued until May 16, 2012, at 9:30 a.m., the hearing to
consider adequacy of the Disclosure Statement explaining Carpenter
Contractors of America, Inc., and CCA Midwest, Inc.'s Plan of
Reorganization.
As reported in the Troubled Company Reporter on Sept. 23, 2011,
the Plan contemplates the continuation of the Debtors' operations
after plan confirmation plan. Donald L. Thiel will continue to
sit as chairman and president of the post-confirmation management
of Carpenter Contractors of America, Inc. Kenneth B. Thiel will
retain his position as President of the post-confirmation
management of CCA Midwest, Inc.
The Plan of Reorganization and Disclosure Statement filed on
Aug. 31, 2011, provides that payments and distributions under the
Plan will be funded by the Debtors' current and ongoing business
operations. In addition to the revenues generated by the business
operations of the Debtors, Donald L. Thiel has agreed to the
deferral of his unsecured claims in Class 3.6 which will result in
additional cash availability.
First American has agreed to provide the Debtors with a one year
$5,120,000 exit financing line of credit renewable annually for
3 years, and a $2,500,000 term note, repayable in 36 monthly
installments.
Donald and Judith Thiel have also agreed to provide the Debtors
with exit financing in the form of a $1,000,000 revolving line of
credit, repayable when the Debtors have available cash flow.
A copy of the Disclosure Statement is available for free at:
http://bankrupt.com/misc/carpentercontractors.DS.pdf
About Carpenter Contractors
Pompano Beach, Florida-based Carpenter Contractors of America,
Inc., dba R&D Thiel, provides carpentry services to builders of
new homes primarily in Illinois and Florida. It also manufactures
building components and distributes construction materials in
Illinois, Florida, and North Carolina.
CCA Midwest Inc. provides carpentry services to builders of new
homes in Illinois. It is a wholly-owned subsidiary of Carpenter
Contractors.
Carpenter Contractors and CCA Midwest filed for Chapter 11
bankruptcy protection (Bankr. S.D. Fla. Lead Case No. 10-42604) on
Oct. 25, 2010. Chad P. Pugatch, Esq., and Christian Savio, Esq.,
at Rice Pugatch Robinson & Schiller, P.A., in Ft. Lauderdale, Fl.,
serve as the Debtors' bankruptcy counsel. Attorneys at Shaw
Gussis Fishman Glantz Wolfson & Towbin LLC, serve as special
counsel. GlassRatner Advisory & Capital Group, LLC, led by Thomas
Santoro, is the Debtors' financial advisor, and Scott L. Spencer,
CPA and Crowe Horwath, LLP. is the Debtors' accountant for audit
work. Carpenter Contractors disclosed $42,900,573 in assets and
$25,861,652 in liabilities as of the Chapter 11 filing.
The U.S. Trustee for Region 21 notified the Court that until
further notice, he will not appoint a committee of creditors.
CATASYS INC: Incurs $8.1 Million Net Loss in 2011
-------------------------------------------------
Catasys, Inc., filed with the U.S. Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$8.12 million on $267,000 of total revenues in 2011, compared with
a net loss of $19.99 million on $448,000 of total revenues in
2010.
The Company's balance sheet at Dec. 31, 2011, showed $3.58 million
in total assets, $8.07 million in total liabilities and a $4.49
million total stockholders' deficit.
For 2011, Rose, Snyder & Jacobs LLP, in Encino, California,
expressed substantial doubt about the Company's ability to
continue as a going concern. The independent auditors noted that
the Company has incurred significant operating losses and negative
cash flows from operations during the year ended Dec. 31, 2011.
Bankruptcy Warning
As of March 28, 2012, the Company had a balance of approximately
$95,000 cash on hand. The Company had working capital deficit of
approximately $2.2 million at Dec. 31, 2011, and has continued to
deplete its cash position subsequent to Dec. 31, 2011. The
Company has incurred significant net losses and negative operating
cash flows since its inception. The Company could continue to
incur negative cash flows and net losses for the next twelve
months.
The Company's current cash burn rate is approximately $450,000 per
month, excluding non-current accrued liability payments. The
Company expects its current cash resources to cover expenses into
April 2012, however delays in cash collections, revenue, or
unforeseen expenditures could impact this estimate. The Company
will need to immediately obtain additional capital and there is no
assurance that additional capital can be raised in an amount which
is sufficient for the Company or on terms favorable to its
stockholders, if at all. If the Company does not immediately
obtain additional capital, there is a significant doubt as to
whether it can continue to operate as a going concern and the
Company will need to curtail or cease operations or seek
bankruptcy relief.
A copy of the Form 10-K is available for free at:
http://is.gd/Xw559O
About Hythiam, Inc.
Based in Los Angeles, California, Hythiam, Inc., n/k/a Catasys,
Inc., is a healthcare services management company, providing
through its Catasys(R) subsidiary specialized behavioral health
management services for substance abuse to health plans.
CENTRAL FEDERAL: Incurs $5.4 Million Net Loss in 2011
-----------------------------------------------------
Central Federal Corporation filed with the U.S. Securities and
Exchange Commission its Annual Report on Form 10-K disclosing a
net loss of $5.42 million on $9.65 million of interest and
dividend income in 2011, a net loss of $6.87 million on $12.61
million of interest and dividend income in 2010, and a net loss of
$9.89 million on $14.44 million of interest and dividend income in
2009.
The Company reported a net loss of $1.36 million on $2.14 million
of total interest income for the three months ended Dec. 31, 2011,
compared with a net loss of $990,000 on $2.90 million of total
interest income for the same period a year ago.
The Company's balance sheet at Dec. 31, 2011, showed $250.92
million in total assets, $240.97 million in total liabilities and
$9.94 million in total stockholders' equity.
Eloise L. Mackus, CEO, commented, "We are pleased that the levels
of nonperforming loans, criticized and classified loans and past
due loans have all improved. These balances decreased by 18%, 16%
and 33%, respectively, during 2011. Since we began our workout
efforts in June of 2010, nonperforming loans and criticized and
classified loans decreased 22% and 26%, respectively. This
strengthening of our loan portfolio is a direct result of the hard
work and determination of the CFBank team, and we remain committed
to the continued improvement of our asset quality."
For 2011, Crowe Horwath LLP, in Cleveland, Ohio, expressed
substantial doubt about the Company's ability to continue as a
going concern. The Company's auditors noted that the Holding
Company and its wholly owned subsidiary (CFBank) are operating
under regulatory orders that require among other items, higher
levels of regulatory capital at CFBank. The Company has suffered
significant recurring net losses, primarily from higher provisions
for loan losses and expenses associated with the administration
and disposition of nonperforming assets at CFBank. These losses
have adversely impacted capital at CFBank and liquidity at the
Holding Company. At Dec. 31, 2011, regulatory capital at CFBank
was below the amount specified in the regulatory order. Failure
to raise capital to the amount specified in the regulatory order
and otherwise comply with the regulatory orders may result in
additional enforcement actions or receivership of CFBank.
A copy of the Form 10-K is available for free at:
http://is.gd/c324nw
About Central Federal
Fairlawn, Ohio-based Central Federal Corporation (Nasdaq: CFBK) is
the holding company for CFBank, a federally chartered savings
association formed in Ohio in 1892. CFBank has four full-service
banking offices in Fairlawn, Calcutta, Wellsville and Worthington,
Ohio.
Regulatory Matters
On May 25, 2011, Central Federal Corporation and CFBank each
consented to the issuance of an Order to Cease and Desist (the
Holding Company Order and the CFBank Order, respectively, and
collectively, the Orders) by the Office of Thrift Supervision
(OTS), the primary regulator of the Holding Company and CFBank at
the time the Orders were issued.
The Holding Company Order required it, among other things, to: (i)
submit by June 30, 2011, a capital plan to regulators that
establishes a minimum tangible capital ratio commensurate with the
Holding Company's consolidated risk profile, reduces the risk from
current debt levels and addresses the Holding Company's cash flow
needs; (ii) not pay cash dividends, redeem stock or make any other
capital distributions without prior regulatory approval; (iii) not
pay interest or principal on any debt or increase any Holding
Company debt or guarantee the debt of any entity without prior
regulatory approval; (iv) obtain prior regulatory approval for
changes in directors and senior executive officers; and (v) not
enter into any new contractual arrangement related to compensation
or benefits with any director or senior executive officer without
prior notification to regulators.
The CFBank Order required CFBank to have by Sept. 30, 2011, and
maintain thereafter, 8% Tier 1 (Core) Capital to adjusted total
assets and 12% Total Capital to risk weighted assets. CFBank will
not be considered well-capitalized as long as it is subject to
individual minimum capital requirements.
CFBank did not comply with the higher capital ratio requirements
by the Sept. 30, 2011 required date.
CITY NATIONAL: Preston Pinkett Discloses 9.3% Equity Stake
----------------------------------------------------------
In a Schedule 13D filing with the U.S. Securities and Exchange
Commission, Preston D. Pinkett, III, disclosed that, as of
Dec. 22, 2011, he beneficially owns 13,409 shares of common stock
of City National Bancshares Corporation representing 9.3% of the
shares outstanding.
Pursuant to an employment agreement between Mr. Pinkett and the
Company, made effective as of Nov. 1, 2011, Mr. Pinkett receives
as non-cash compensation 20,000 shares of the Company's common
stock over the 12-month term of the agreement. For purposes of
the Employment Agreement, the shares are valued at $3.00 per
share.
Mr. Pinkett is the President and Chief Executive Officer of City
National Bancshares and its subsidiary City National Bank of New
Jersey. He is also a director of the Company.
A copy of the filing is available for free at:
http://is.gd/8LDtEE
About City National Bancshares
Newark, New Jersey-based City National Bancshares Corporation is a
New Jersey corporation incorporated on Jan. 10, 1983. City
National Bank, a wholly-owned subsidiary of CNBC, is a national
banking association chartered in 1973 under the laws of the United
States of America and has one subsidiary, City National
Investments, Inc., an investment company which holds, maintains
and manages investment assets for CNB. CNB provides a wide range
of retail and commercial banking services through its retail
branch network, although the primary focus is on establishing
commercial and municipal relationships.
For the nine months ended Sept. 30, 2011, the Company has reported
a net loss of $4.0 million on $8.0 of net interest income,
compared with a net loss of $3.2 million on $9.9 million of net
interest income for the same period last year.
The Company's balance sheet at Sept. 30, 2011, showed
$349.2 million in total assets, $328.2 million in total
liabilities, and stockholders' equity of $20.9 million.
As reported in the Troubled Company Reporter on June 1, 2011, KPMG
LLP, in Short Hills, New Jersey, expressed substantial doubt about
City National Bancshares' 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 and has entered into a
consent order with the Office of the Comptroller of the Currency.
COLTS RUN: Post-Confirmation Status Hearing Today
-------------------------------------------------
The Hon. Pamela S. Hollis of the U.S. Bankruptcy Court for the
Northern District of Illinois will convene today, April 26, 2012,
at 10:30 a.m., a post-confirmation status hearing for Colts Run,
LLC.
On March 30,, 2012, the Court ordered that, among other things:
-- the Plan objections are withdrawn;
-- the PNC Bank, National Association's votes to reject the
Plan are amended to votes to accept the Plan;
-- the Plan is modified, among other things, as:
1. Article VI, Section 6.1 of the Plan is deleted from
the Plan;
2. the Post-confirmation loan documents attached will
constitute the treatment of any and all claims of the
Bank under the Plan and the post-confirmation
documents are incorporated into the Plan; and
3. the Debtor is authorized to execute the post-
confirmation documents and perform all of the Debtor's
obligations thereunder.
A full-text copy of the confirmation order is available for free
at http://bankrupt.com/misc/COLTSRUN_plan_order.pdf
As reported in the Troubled Company Reporter on Aug. 24, 2010,
according to the Disclosure Statement, the Plan provides that
distributions will be made from cash deposits existing at the
confirmation and from proceeds realized from the continued
operation of the Debtor's business. The Debtor does not intend to
liquidate any if its assets in order to make the payments. If
necessary, at the point of the balloon payment coming due to PNC,
the Debtor may borrow the funds sufficient to make the balloon
payment.
Under the Plan, the Debtor is treating claims as follows:
1. PNC Bank, National Association -- under Class 1 -- will
receive or retain:
a) its lien on the real and personal property owned by the
Debtor, to the same extent and with the same validity as
it had on the petition date, until the allowed Class 1
claims are paid in full;
b) interest on its allowed claim until fully paid at the
prepetition, non-defaulted contract rate, payable in 59
monthly installments; and
c) payment of the unpaid balance of the allowed Class 1
claim.
2. GMAC Claim -- under Class 4 -- will be paid in full in cash.
3. Unsecured creditors -- under Class 5 -- will receive 100% of
the allowed amount of their claims plus an interest of 5%
per annum.
4. The Debtor's members (i) Ivan Djurin and (ii) The Teresa M.
Baldwin Trust will retain their respective equity interest
in the Debtor after confirmation of the Plan.
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/ColtsRunDS.pdf
About Colts Run, LLC
Lake Forest, Illinois-based Colts Run, LLC, owns and operates a
residential apartment project located in Lexington, Kentucky,
known as the Colts Run Apartments. The Company filed for Chapter
11 bankruptcy protection (Bankr. N.D. Ill. Case No. 10-18071) on
April 23, 2010. David K. Welch, Esq., at Crane Heyman Simon Welch
& Clar, serves as counsel to the Debtor. The Company estimated
assets and debts at $10 million to $50 million as of the Chapter
11 filing.
CLEARWIRE CORP: Chesapeake Has 5.8% of Shares as of March 22
------------------------------------------------------------
In a Schedule 13G filed with the U.S. Securities and Exchange
Commission, Chesapeake Partners Management Co., Inc., and its
affiliates disclosed that, as of March 22, 2012, they beneficially
own 28,268,059 shares of Class A Common Stock, par value $0.0001
per share, of Clearwire Corporation, which represents 5.8% of the
shares outstanding. A copy of the filing is available at no
charge at http://is.gd/scH7Y1
About Clearwire Corporation
Kirkland, Wash.-based Clearwire Corporation (NASDAQ: CLWR)
-- http://www.clearwire.com/-- through its operating
subsidiaries, is a provider of 4G mobile broadband network
services in 68 markets, including New York City, Los Angeles,
Chicago, Dallas, Philadelphia, Houston, Miami, Washington, D.C.,
Atlanta and Boston.
The Company reported a net loss of $2.30 billion in 2010 and a
net loss of $1.25 billion in 2009. The Company also reported a
net loss attributable to Clearwire Corporation of $480.48 million
for the nine months ended Sept. 30, 2011.
The Company's balance sheet at Sept. 30, 2011, showed $8.76
billion in total assets, $5.15 billion in total liabilities and
$3.61 billion in total stockholders' equity.
* * *
As reported by the TCR on Nov. 25, 2011, Standard & Poor's Ratings
Services lowered its corporate credit and senior secured first-
lien issue-level ratings on Bellevue, Wash.-based wireless
provider Clearwire Corp. to 'CCC' from 'CCC+'.
"The downgrade reflects our concerns that the company may choose
to skip its $237 million of interest payments due on Dec. 1,
2011," explained Standard & Poor's credit analyst Allyn Arden.
"With about $698 million of cash on the balance sheet, Clearwire
has sufficient funds to pay the remaining interest expense due in
2011, although Standard & Poor's believes that it would still have
to raise significant capital to maintain operations in 2012
despite the cost-reduction measures it has already achieved. If
Clearwire elected to make the interest payment, we believe that it
would exit 2011 with around $350 million to $400 million in cash,
which assumes less than $100 million of capital expenditures and
EBITDA losses. We do not believe that this cash balance will be
sufficient to cover free operating cash flow (FOCF) losses and
a Long-Term Evolution (LTE) wireless network overlay in 2012 and
that the company will require additional funding during the year."
CORMEDIX INC: Receives NYSE Amex Notice for Non-Compliance
----------------------------------------------------------
CorMedix Inc. received notice from the NYSE Amex LLC indicating
that the Company is not in compliance with certain of the NYSE
Amex continued listing standards.
On April 20, 2012, the Company received a notice from the NYSE
Amex indicating that the Company is below certain continued
listing standards due to losses in two of its most recent fiscal
years with equity below $2 million, as set forth in Section
1003(a)(iv) of the NYSE Amex company guide. The Company was
afforded the opportunity to submit a plan of compliance to the
NYSE Amex on or before May 21, 2012. The Company has informed the
NYSE Amex that it intends to submit such a plan. If the Company
fails to submit such a plan or if the plan is not accepted, the
NYSE Amex may initiate delisting proceedings. If the NYSE Amex
accepts the Company's plan, the Company may be able to continue
its listing for the period ending Aug. 22, 2012 during which time
the Company will be subject to periodic reviews to determine if it
is making progress consistent with the plan. If the Company does
not regain compliance with Section 1003(a)(iv) by August 22, 2012,
then the NYSE Amex may initiate delisting procedures.
About CorMedix
CorMedix Inc. -- http://www.cormedix.com/-- is a development-
stage pharmaceutical and medical device company that seeks to in-
license, develop and commercialize therapeutic products for the
treatment of cardiac and renal dysfunction, specifically in the
dialysis and non-dialysis areas. CorMedix is currently pursuing
the CE marking approval process in Europe, for CRMD003
(Neutrolin(R)) for the prevention of catheter related bloodstream
infections and maintenance of catheter patency in tunneled,
cuffed, central venous catheters used for vascular access in
hemodialysis patients.
CORNERSTONE BANCSHARES: Obtains Waivers of 2012 Loan Thresholds
---------------------------------------------------------------
Cornerstone Bancshares, Inc., and Midland Loan Services, a
division of PNC Bank, N.A., servicer for the FDIC as receiver for
Silverton Bank, N.A., (as lender), entered into a waiver agreement
with respect to a term loan with the Lender. Pursuant to the
Waiver, the Lender will provide a waiver of covenant compliance
thresholds for 2012, conditioned upon the following:
(1) Cornerstone will continue to provide covenant compliance
certificates to the Lender;
(2) Cornerstone Community Bank, the wholly owned subsidiary of
Cornerstone, will limit its dividend payments to amounts
necessary to service the term loan and line of credit and
to pay income taxes; and
(3) Cornerstone will pay a processing fee of $25,000.
About Cornerstone Bancshares
Chattanooga, Tenn.-based Cornerstone Bancshares, Inc. is a bank
holding company. Its wholly-owned subsidiary, Cornerstone
Community Bank, is a Tennessee-chartered commercial bank with five
full-service banking offices located in Hamilton County,
Tennessee.
The Company also reported net income of $917,230 on $15.49 million
of total interest income for the nine months ended Sept. 30, 2011,
compared with net income of $575,607 on $19.76 million of total
interest income for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed
$426.36 million in total assets, $393.91 million in total
liabilities, and $32.44 million in total stockholders' equity.
Consent Order
The Company disclosed in 10-Q for the quarter ended June 30, 2010,
that following the issuance of a written report by the Federal
Deposit Insurance Corporation and the Tennessee Department of
Financial Institutions concerning their joint examination of
Cornerstone Community Bank in October 2009, the Bank entered a
consent order with the FDIC on April 2, 2010, and a written
agreement with the TDFI on April 8, 2010, each concerning areas of
the Bank's operations identified in the report as warranting
improvement and presenting substantially similar plans for making
those improvements.
The consent order and written agreement, which the Company
collectively refers to as the "Action Plans", convey specific
actions needed to address certain findings from the joint
examination and to address the Company's current financial
condition. The Action Plans contain a list of strict requirements
ranging from a capital directive, which requires the Company to
achieve and maintain minimum regulatory capital levels in excess
of the statutory minimums to be well-capitalized, to developing a
liquidity risk management and contingency funding plan, in
connection with which the Company will be subject to limitations
on the maximum interest rates it can pay on deposit accounts.
The Action Plans also contain restrictions on future extensions of
credit and requires the development of various programs and
procedures to improve the Company's asset quality as well as
routine reporting on its progress toward compliance with the
Action Plans to the Board of Directors, the FDIC and the TDFI.
As of April 2, 2010, the date of the Action Plans, the Bank was
deemed to be "adequately capitalized."
DOE MOUNTAIN INVESTMENTS: Joint Plan of Liquidation Confirmed
-------------------------------------------------------------
Chief Bankruptcy Judge John E. Waites of the U.S. Bankruptcy Court
for the District of South Carolina has confirmed the joint plan of
liquidation filed by C5-MFB Properties LLC and Billy L. Amick for
Doe Mountain Investments, LLC, and Doe Mountain Development Group,
Inc., dated Jan. 20, 2012.
The plan provides for the sale of the Debtors' property located in
Johnson County, Tennessee, to The Nature Conservancy.
As reported in the Troubled Company Reporter on Feb. 9, 2012,
under the plan of liquidation proposed by C5-MFB Properties LLC
and Billy L. Amick, administrative claims, priority tax claims and
priority non-tax claims are unimpaired and will be paid on the
effective date or when the claims become allowed.
The classes and treatment of claims against Doe Mountain
Investments are:
A. Class 1 (Claims of C5-MFB) will be paid in full on the
latter of the closing date or the effective date. C5-MFB
will retain its lien securing the allowed secured claims
until all distributions have been made. The deficiency
claim of C5-MFB is waived.
B. Class 4 (Unsecured claims) will receive cash on the later
of the closing date, or the effective date, or the claim
becomes allowed.
C. Class 5 (Claims of Equity Interests) will receive their
pro rata share of the proceeds of the purchase price
allocated to Doe Investments after payment of unclassified
claims, C5-MFB claims and unsecured claims.
Classes 2 and 3 and intentionally omitted under the plan for Doe
Investments.
The classes and treatment of claims against Doe Mountain
Development are:
A. Class 1 (Claims of C5-MFB) will be paid in full on the
latter of the closing date or the effective date. C5-MFB
will retain its lien securing the allowed secured claims
until all distributions have been made. The deficiency
claim of C5-MFB is waived.
B. Class 2 (Claims of Amick) will be paid the settlement
payment in full on the later of the closing date and the
effective date. Amick will retain its lien securing the
allowed secured claims until all distributions have been
made. The deficiency claim of Amick is waived.
C. Class 3 (Secured Claim of Clear Creek Construction) will
receive $96,395.45 in full satisfaction of the claim on
the later of the closing date and the effective date.
Clear Creek will retain its lien securing the allowed
secured claims until all distributions have been made.
The deficiency claim of Clear Creek is waived.
D. Class 4 (Unsecured claims) will receive cash will on the
later of the closing date, or the effective date, or the
claim becomes allowed.
E. Class 5 (Claims of Equity Interests) will receive their
pro rata share of the proceeds of the purchase price
allocated to Doe Investments after payment of unclassified
claims, C5-MFB claims and unsecured claims.
A copy of the Plan of Liquidation is represented by:
http://bankrupt.com/misc/DOE_MOUNTAIN_ds.pdf
About Doe Mountain Investments
Doe Mountain Investments LLC of Greenville, South Carolina, filed
for Chapter 11 bankruptcy (Bankr. D.S.C. Lead Case No. 11-05275)
on Aug. 24, 2011. Randy A. Skinner, Esq., at Skinner Law Firm,
LLC, serves as the Debtors' counsel. Doe Mountain Investments
estimated assets at $10 million to $50 million and debts at
$1 million to $10 million.
Doe Mountain Investments' affiliate, Doe Mountain Development
Group, Inc., filed separate Chapter 11 petitions on the same day.
Doe Mountain Development posted assets of $22,001,249
and debts of $6,595,473.
DOE MOUNTAIN INVESTMENTS: Wants to Hire Stern as Special Counsel
----------------------------------------------------------------
Doe Mountain Investments LLC asks the Bankruptcy Court for
authority to employ T.S. Stern, Jr., Esq., and the law firm of
Covington Patrick Hagins Stern & Lewis, PA., to serve as special
counsel.
The Debtor wants to hire Mr. Stern as an independent contractor
postpetition to represent the Debtor in regards to a possible
adversary proceeding against C5-MFB Properties, LLC and Mountain
1st Bank and Trust Company for alleged destruction of an ongoing
business.
Mr. Stern will be compensated at his regular professional fee of
$300 per hour. In addition, other professionals may be employed
in connection with the engagement. The regular hourly rate of the
firm's professionals are:
Attorneys $300 per hour
Associates $150 per hour
Paralegal $85 per hour
The principal of the Debtor has a $35,000 credit balance toward
the payment of fees and expenses for handling of this matter.
Once this credit is exhausted, the Firm will make an application
to the court for payment of fees from the bankruptcy estate.
To the best of the Debtors' knowledge,the firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
About Doe Mountain Investments
Doe Mountain Investments LLC of Greenville, South Carolina, filed
for Chapter 11 bankruptcy (Bankr. D. S.C. Lead Case No. 11-05275)
on Aug. 24, 2011. Randy A. Skinner, Esq., at Skinner Law Firm,
LLC, serves as the Debtors' counsel. Doe Mountain Investments
estimated assets at $10 million to $50 million and debts at
$1 million to $10 million.
Doe Mountain Investments' affiliate, Doe Mountain Development
Group, Inc., filed a separate Chapter 11 petition on the same day.
Doe Mountain Development posted assets of $22,001,249 and debts of
$6,595,473.
DOE MOUNTAIN INVESTMENTS: Taps Elliott Davis for Tax Work
---------------------------------------------------------
Doe Mountain Investments LLC asks the Bankruptcy Court for
authority to employ the accounting firm Elliott Davis, LLC, to
serve as accountants to prepare their 2011 tax returns.
The firm will bill a flat fee of $1,000 which are equal to those
charged for similar services in the accounting business. In
addition, the pre-petition compensation owed to the firm will be
waived.
To the best of the Debtors' knowledge, Elliott Davis is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Doe Mountain Investments
Doe Mountain Investments LLC of Greenville, South Carolina, filed
for Chapter 11 bankruptcy (Bankr. D.S.C. Lead Case No. 11-05275)
on Aug. 24, 2011. Randy A. Skinner, Esq., at Skinner Law Firm,
LLC, serves as the Debtors' counsel. Doe Mountain Investments
estimated assets at $10 million to $50 million and debts at
$1 million to $10 million.
Doe Mountain Investments' affiliate, Doe Mountain Development
Group, Inc., filed separate Chapter 11 petitions on the same day.
Doe Mountain Development posted assets of $22,001,249
and debts of $6,595,473.
DRESSER-RAND GROUP: Moody's Raises CFR to 'Ba2'; Outlook Stable
---------------------------------------------------------------
Moody's Investors Service upgraded Dresser-Rand Group Inc.'s (DRC)
Corporate Family Rating (CFR) to Ba2 from Ba3 and its unsecured
senior subordinated notes to Ba3 from B1. Moody's revised the
outlook to stable from positive.
Rating Rationale
"Upgrading DRC's CFR to Ba2 recognizes the prevailing strength in
the oil and gas capital equipment market, in which DRC maintains a
strong market share and technical expertise. The impact of robust
market conditions as reflected in DRC's 2011 double-digit revenue
and backlog gains, and its strong liquidity, are expected to
continue into 2012," commented Andrew Brooks, Moody's Vice
President. "However, 2011's acquisitions and debt-financed share
repurchases materially added to the amount of secured debt in
DRC's capital structure, an elevated level of debt we expect to
see progressively reduced through the application of DRC's free
cash flow generation to debt repayment."
DRC is a leading supplier of custom engineered compressors,
engines, turbines and other highly engineered rotating equipment
to the global energy infrastructure industry, from which it
derived approximately 96% of its 2011 revenues. Its business is
well-balanced between new unit sales and aftermarket parts and
services, the later affording revenue stream stability and higher
cash margins, which complements the periodic cyclicality of new
unit order rates. Reflecting the strength in global energy
infrastructure, DRC's 2011 revenues increased 18% to $2.3 billion,
while the combined new unit and aftermarket backlog at December
31, 2011 grew 30% to $2.55 billion compared to 2010.
With modest capital needs, DRC is a consistent free cash flow
generator, and remains in a good liquidity position. In 2011,
accumulated levels of balance sheet cash were augmented by a near
tripling in outstanding debt to fund a major acquisition,
approximately $730 million (including assumed debt) paid for
Spanish engine-maker Grupo Guascor, and $505 million in share
repurchases. This resulted in an increase in the company's debt-
to-book capital to 58.4% from 2010's 33.7%. Moody's stable outlook
assumes that DRC will rapidly de-lever its balance sheet in 2012,
utilizing its free cash flow as the source of funds to do so.
Restoring debt-to-capital to a level below 35% could prompt an
upgrade. Conversely, should DRC continue large, debt-financed
share repurchases whose net effect would cause debt-to-capital to
further increase above its current level, Moody's could downgrade
the rating.
The senior subordinated notes are single notched below the CFR to
Ba3, reflecting the presence of secured debt, which at year-end
2011 approximated $1,150 million, in the company's capital
structure. DRC's unsecured senior subordinated notes are
subordinated to the senior secured debt's potential priority claim
to the company's assets. The size of the potential senior secured
claims relative to the company's outstanding unsecured senior
subordinated notes results in the subordinated notes being rated
one notch beneath the Ba2 CFR under Moody's Loss Given Default
Methodology.
The principal methodology used in rating Dresser-Rand was the
Global Oilfield Services 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.
Dresser-Rand Group Inc. has headquarters in Houston, Texas and
Paris, France.
DS WATERS: Moody's Affirms 'B2' CFR Following Recapitalization
--------------------------------------------------------------
Moody's Investors Service has affirmed the B2 corporate family
rating and all other ratings of DS Waters of America, Inc. (DSWA)
following completion of its recapitalization. The outlook remains
stable.
The recapitalization included the exchange of Group PIK notes
(unrated) for new parent preferred membership interests and common
equity. Moody's has appended an /LD to the Ca probability of
default rating of DS Waters of America, Inc. (Old) to designate a
limited default. Moody's views the exchange of debt-for-equity as
default avoidance given the imminent maturity of the Group PIK
notes. All ratings of DS Waters of America (Old) will be withdrawn
in the near term since all of the pre-recapitalization rated debt
has been repaid.
The follow ratings have been affirmed at DS Waters of America,
Inc.:
Corporate Family Rating (CFR) at B2;
Probability of Default Rating (PDR) at B2;
$305 million first lien term loan due 2017 at B2 (LGD3, 45%);
$60 million first lien delayed draw term loan due 2017 at B2
(LGD3, 45%);
$85 million second lien term loan due 2018 at Caa1 (LGD5, 89%);
and
$15 million second lien delayed draw term loan due 2018 at Caa1
(LGD5, 89%).
The principal methodology used in rating DSWA was the Global Soft
Beverage 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.
DSWA, headquartered in Atlanta, Georgia, is a provider of bottled
water and related services delivered directly to residential and
commercial customers in the U.S. (operates in 43 states). Its core
business is the bottling and direct delivery of drinking water in
3 and 5 gallon bottles to homes and offices and the rental of
water dispensers. The company also sells water in smaller bottles,
cups, coffee, flavored beverages and powdered sticks, and sells
water filtration devices. DSWA is owned by Kelso & Co (33%), Group
Lenders (55%), consisting primarily of Glenview Capital
Management, GoldenTree Asset Management and Solar Capital, and
management (12%). Revenues for 2011 were roughly $765 million.
DYNEGY INC: Faruqi & Faruqi Files Stockholders' Class Suit
----------------------------------------------------------
Faruqi & Faruqi, LLP has filed a class action lawsuit in the
United States District Court for the Southern District of New
York, case no. 12 Civ. 2307, on behalf of all persons who
purchased Dynegy Inc. stock between Sept. 2, 2011 and March 9,
2012 inclusive.
The complaint alleges that defendants knew or recklessly failed to
inform investors that Dynegy's wholly-owned subsidiary
fraudulently transferred direct ownership in one of Dynegy's
indirectly owned subsidiaries directly to Dynegy.
On March 9, 2012, a bankruptcy examiner disclosed that Dynegy
improperly acquired direct ownership of the indirectly owned
subsidiary through a fraudulent transfer. This news caused Dynegy
stock to drop approximately 35% by the close of the business day.
Then, on April 4, 2012, Dynegy announced that it had resolved the
Company's disputes with major creditors. On this news, Company
stock plummeted by over 25%, closing at $0.39 per share.
On April 5, 2012, Dynegy received a notice from the New York Stock
Exchange that the Company failed to comply with the NYSE's
continued listing standard. Unless Dynegy's stock regains values
above $1 per share for any consecutive 30-day trading period, it
will be delisted in six months from the notification date. Dynegy
closed at $0.33 on April 24, 2012.
If you purchased Dynegy stock between Sept. 2, 2011 and March 9,
2012, you may, not later than May 29, 2012, move the court to
serve as lead plaintiff of the class.
About Dynegy Inc.
Through its subsidiaries, Houston, Texas-based Dynegy Inc.
(NYSE: DYN) -- http://www.dynegy.com/-- produces and sells
electric energy, capacity and ancillary services in key U.S.
markets. The power generation portfolio consists of approximately
12,200 megawatts of baseload, intermediate and peaking power
plants fueled by a mix of natural gas, coal and fuel oil.
In August, Dynegy implemented an internal restructuring that
created two units, one owning eight primarily natural gas-fired
power generation facilities and another owning six coal-fired
plants.
Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and
said it was discussing options for managing its debt load with
certain bondholders.
Dynegy Holdings LLC and four other affiliates of Dynegy Inc.
sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case
No. 11-38111) Nov. 7 to implement an agreement with a
group of investors holding more than $1.4 billion of senior notes
issued by Dynegy's direct wholly-owned subsidiary, Dynegy
Holdings, regarding a framework for the consensual restructuring
of more than $4.0 billion of obligations owed by DH. If this
restructuring support agreement is successfully implemented, it
will significantly reduce the amount of debt on the Company's
consolidated balance sheet.
Dynegy Holdings disclosed assets of $13.77 billion and debt of
$6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each
estimated $100 million to $500 million in assets and debt.
Dynegy Holdings and its affiliated debtor-entities are represented
in the Chapter 11 proceedings by Sidley Austin LLP as their
reorganization counsel. Dynegy and its other subsidiaries are
represented by White & Case LLP, who is also special counsel to
the Debtor Entities with respect to the Roseton and Danskammer
lease rejection issues.
Dynegy was advised by Lazard Freres & Co. LLC and the Debtor
Entities' financial advisor is FTI Consulting.
The Official Committee of Unsecured Creditors has tapped Akin Gump
Strauss Hauer & Feld LLP as counsel nunc pro tunc to November 16,
2011.
Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceeding undertaken
by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or
215/945-7000).
EASTMAN KODAK: Shutterfly $23.8-Mil. Is Lone Bid for Kodak Gallery
------------------------------------------------------------------
Eastman Kodak Company and Shutterfly, Inc. sid that there were no
competing bidders to Shutterfly's $23.8 million stalking horse bid
to purchase certain assets of Kodak's Kodak Gallery online photo
services business. Following final approval by the bankruptcy
court, the parties will contemplate promptly closing the
acquisition. Following the closing, Shutterfly will work with
Kodak to transfer Kodak Gallery's U.S. and Canadian customers and
images onto the Shutterfly platform.
"I'm excited to welcome Kodak Gallery's customers to Shutterfly
and look forward to working with the Kodak team to provide a
smooth transition for their customers and offering them industry-
leading products and customer service that will enhance the way
they share and preserve everyday memories," said Jeffrey
Housenbold, Shutterfly's president and chief executive officer. In
commenting on what the acquisition means for Shutterfly's
business, Housenbold added, "Our acquisition of Kodak Gallery is a
perfect example of the consolidation that we believe will play an
important role in helping Shutterfly solidify our leadership
position in the social expression and personal publishing
category. Moving forward, we will continue to expand our market
position through organic growth and disciplined acquisitions that
leverage our scale and scope economies, vertical integration,
solid balance sheet and profitable business model."
About Eastman Kodak
Rochester, New York-based Eastman Kodak Company and its U.S.
subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11
petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan.
Subsidiaries outside of the U.S. were not included in the filing
and are expected to continue to operate as usual.
Kodak, founded in 1880 by George Eastman, was once the world's
leading producer of film and cameras. Kodak sought bankruptcy
protection amid near-term liquidity issues brought about by
steeper-than-expected declines in Kodak's historically profitable
traditional businesses, and cash flow from the licensing and sale
of intellectual property being delayed due to litigation tactics
employed by a small number of infringing technology companies with
strong balance sheets and an awareness of Kodak's liquidity
challenges.
In recent years, Kodak has been working to transform itself from a
business primarily based on film and consumer photography to a
smaller business with a digital growth strategy focused on the
commercialization of proprietary digital imaging and printing
technologies. Kodak has 8,900 patent and trademark registrations
and applications in the United States, as well as 13,100 foreign
patents and trademark registrations or pending registration in
roughly 160 countries.
Kodak disclosed $5.10 billion in assets and $6.75 billion in
liabilities as of Sept. 30, 2011. The net book value of all
assets located outside the United States as of Dec. 31, 2011 is
$13.5 million.
Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtors. FTI Consulting,
Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is
the investment banker. Kurtzman Carson Consultants LLC is the
claims agent. A group of second lien lenders are represented by
Akin Gump Strauss Hauer & Feld LLP.
The Official Committee of Unsecured Creditors has tapped
Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel.
Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Eastman Kodak and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000).
EATON MOERY: Plan Confirmation Hearing Continued Until May 18
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Arkansas has
continued until May 18, 2012, at 9:00 a.m., the hearing to
consider the confirmation of Eaton Moery Environmental Services,
Inc.'s Second Chapter 11 Plan Amended Plan.
As reported in the Troubled Company Reporter on Sept. 6, 2011, the
Debtor filed a First Amended Plan of Reorganization, dated Aug.
23, 2011, which provides that:
Claim Treatment
----- ---------
I Paid from cash on hand on the Effective
Administrative Expenses Date.
II Monthly payments will be paid on these
Priority Tax Claims Claims, according to the payment
III schedule, until each deficiency is
Non-Tax Claims cured. The proposals remove the
Penalties from the claims of both
State and federal taxing authorities.
IV
Bank of the Ozarks Monthly payments will continue as
scheduled in the original note and
mortgage, except that the remaining
amortization will be 15 years instead
of eight years, thereby lowering the
monthly payment from $57,000 to
$38,000.
V This class consists of the Allowed
Landfill Priority Priority Unsecured Claim of Landfills
Vendors in the approximate amount of $654,920.
VI The Debtor asserts these claims are
Delta Environmental entitled to no distribution.
Investments, LLC
VII To be paid in full by monthly payments
Landfill Vendors of $14,589 until the $654,920 claim is
Priority Unsecured paid in full. The monthly payment
amortizes the Landfill vendors claim at
6% interest over five years. The
monthly payment will be prorated to
each vendor based on their pro rata
share of the total outstanding debt.
VIII Debtor disputes these insider claims in
DEI, LLC, Insider Notes full.
IX Glen Eaton and Bryan Moery waive their
Glen Eaton and Bryan claims.
Moery
X All allowed Unsecured Claims will be
Unsecured Claims paid 50% of face value from the
operating profits of the Debtor at the
end of each calendar year. The
Unsecured Claims are reduced to
$232,000. The Debtor proposes to
dedicate $20,000 on December 31st each
year for this purpose, which amount
will be prorated based on the amount of
each outstanding claim -- this claim
will be paid in 10 years. The
remaining $32,000 will be paid as a
single payment.
XI Claimants' existing stock will be
Equity Security Holders voided and 20,000 share of new common
Stock will be issued.
A full-text copy of the Amended Plan and its related exhibits are
available at no charge at:
http://bankrupt.com/misc/EatonMoeryTCR_1stAmPlan082311.pdf
About Eaton Moery Environmental Services
Wynne, Arkansas-based Eaton Moery Environmental Services, Inc.,
dba Delta Environmental Services, Inc., filed for Chapter 11
bankruptcy protection (Bankr. E.D. Ark. Case No. 10-14713) on
June 30, 2010. James F. Dowden, P.A., serves as the Debtor's
bankruptcy counsel. The Company estimated assets at $10 million
to $50 million and liabilities at $1 million to $10 million.
EDISON MISSION: Fitch Downgrades LT Issuer Default Rating to 'CC'
-----------------------------------------------------------------
Fitch Ratings has lowered Edison Mission Energy (EME) and Midwest
Generation LLC's (MWG) long-term Issuer Default Ratings (IDRs) to
'CC' from 'B-'.
At the same time, Fitch has lowered EME and MWG's individual
securities ratings. While EME's recovery rating remains unchanged
at 'RR5', MWG's recovery rating for its secured working capital
facility has been revised to 'RR3' from 'RR1'.
Edison Mission Energy
-- Senior unsecured debt to 'C/RR5' from 'CCC/RR5'.
Midwest Generation
-- Secured Working Capital Facility to 'CCC/RR3' from 'BB-/RR1'.
Fitch has also affirmed EME and MWG's short-term IDR at 'B' and
withdrawn the ratings.
Fitch considers 'CC' category credits to possess 'very high levels
of credit risk. Default of some kind appears probable.'
More than $4 billion of long-term debt is affected by the rating
actions.
Fitch has also issued a press release detailing rating actions
taken today regarding EME's ultimate parent, Edison International
(EIX; IDR 'BBB'; Rating Outlook Stable by Fitch) and Southern
California Edison Company (SCE; IDR 'A-'; Rating Outlook Stable by
Fitch).
The lower IDRs for EME and MWG reflect the challenges to the
companies' future solvency and liquidity caused primarily by a
prolonged decline in historic and forward power price curves,
rising operating and capital costs due to environmental
regulations and an unsustainably high debt burden.
Fitch believes recent developments including EME's termination of
its bank facility, the lack of interest in third party funding for
the Homer City generating station and announced plans not to
retrofit two of its Illinois generating stations and cease
operations underscore the challenging economics facing the
company.
The ratings downgrade reflects EME's high debt levels, scheduled
maturities totaling $2.2 billion during 2013-2017 and expectations
for a modest recovery in power prices off a low base in 2014-2015.
The ratings also consider environmental rules regarding sulfur
dioxide, nitrogen oxide and mercury, which pose significant long-
term challenges for EME, in Fitch's opinion.
Credit metrics at EME have deteriorated, along with forward
natural gas and power prices. EME is expected to book losses and
negative free cash flow in 2012 and 2013. Interest coverage and
debt metrics remain very weak in 2014 and 2015, as well. Fitch
projects EBITDA to interest expense will approximate -0.3 times
(x) in both 2012 and 2013 and 0.2x in 2014. Debt to EBITDA is
estimated by Fitch to be negative in 2012 and 2013 and 71x in
2014.
In its recovery analysis, Fitch values the power generation assets
using a net present value (NPV) approach and plant valuation data
provided by its third-party power market consultant, Wood
Mackenzie and other assumptions. Fitch's recovery ratings bridge
the gap from issuer default to individual security ratings.
Fitch's estimated recovery ratings for EME's senior unsecured debt
is unchanged at 'RR5' and the resulting instrument rating has been
lowered two notches to 'C' from 'CCC'.
However, the recovery rating for MWG's secured credit facility has
been revised to 'RR3' from 'RR1', reflecting lower dark spreads
due to depressed market prices for power and higher operating
costs. As a result, the uplift in notching from Fitch's recovery
analysis has narrowed two notches, to +1 from +3. The incremental
two notch reduction in MWG's IDR, explains the total four notch
reduction to MWG's secured working capital facility instrument
rating to 'CCC' from 'BB-' .
As of Dec. 31, 2011, EME had $1.3 billion of consolidated cash and
cash equivalents on its balance sheet and asset sales and project
financings are likely to provide additional sources of cash.
Nonetheless, operating losses in 2012 and 2013, combined with
capital expenditures to complete non-discretionary projects will,
in Fitch's estimation, cause EME's cash position to erode
significantly during 2012-2015.
While EME's liquidity position appears adequate in the near term,
the merchant generation company's prospects for continued solvency
in the intermediate-to-longer term based on Fitch's outlook for
market pricing for energy and capacity and operating cost
projections appear poor.
The next scheduled EME senior unsecured debt maturity is $500
million in 2013, $500 million matures in 2016 and $1.2 billion in
2017. As of Dec. 31, 2011, EME had total debt outstanding of
approximately $4.9 billion (excluding off-balance sheet debt).
In February, EME announced that it terminated its $564 million
credit facility. MWG's $500 million working capital facility
remains in place. The MWG revolver is scheduled to terminate June
29, 2012.
Restrictive covenants in EME's credit agreement that required the
company to maintain a minimum funds flow-to-interest coverage
ratio of 1.20x or higher no longer apply now that the credit
facility has been terminated.
The ratings and outlook for MWG reflect its position within the
EME corporate family. MWG has little debt outstanding and
nominally strong stand-alone coverage and debt leverage ratios.
However, MWG's debt ratings are linked to EME through an inter-
company loan of proceeds from the Powerton and Joliet
sale/leaseback agreement by MWG to EME.
In addition, EME provides a guarantee (which is pari passu with
its senior unsecured notes) to MWG rent payments under the
Powerton and Joliet lease agreement. The lease debt is secured by
a perfected first lien on the Powerton and Joliet 7 and 8
generating facilities.
Environmental challenges loom large on the horizon. EME and MWG
continue to evaluate whether to install emission control
technologies to comply with existing state and federal regulations
in the near-to-intermediate term or close non-compliant
facilities. EME announced recently that it will close the Fisk
and Crawford generating stations by the end of 2012 and 2014,
respectively. In addition, the company identified Waukegan and
Joliet 6 as plants that it is 'less likely to be retrofit' for
environmental equipment and thus are likely candidates for future
closings.
In the fourth quarter, EME booked a $1.032 billion pretax charge
to reduce the carrying value of the Homer City generating station
to zero. EME is in negotiations to transfer its beneficial
interest in the 1,884 megawatt coal-fired plant to the owner-
lessor. EME also booked a $640 million pretax charge to reflect
the write down of three Illinois coal fired generating stations
(Fisk, Crawford and Waukegan) to zero.
EPICEPT CORP: Incurs $15.6 Million Net Loss in 2011
---------------------------------------------------
EpiCept Corporation filed with the U.S. Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$15.65 million on $944,000 of total revenue in 2011, a net loss of
$15.53 million on $994,000 of total revenue in 2010, and a net
loss of $38.81 million on $414,000 of total revenue in 2009.
The Company's balance sheet at Dec. 31, 2011, showed $7.52 million
in total assets, $24.66 million in total liabilities and a $17.14
million total stockholders' deficit.
Deloitte & Touche LLP, in Parsippany, New Jersey, noted that the
Company's recurring losses from operations and stockholders'
deficit 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/uMXNp4
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.
FEDERAL HOME: Moody's Issues Summary Credit Opinion
---------------------------------------------------
Moody's Investors Service issued a summary credit opinion on
Federal Home Loan Mortgage Corp. and includes certain regulatory
disclosures regarding its ratings. The release does not
constitute any change in Moody's ratings or rating rationale for
Federal Home Loan Mortgage Corp.
Moody's current ratings on Federal Home Loan Mortgage Corp. are:
Senior Unsecured (domestic currency) ratings of Aaa/(P)Aaa
Senior Unsecured (foreign currency) ratings of Aaa
Senior Unsecured MTN Program (domestic currency) ratings of (P)Aaa
Bank Financial Strength ratings of E+
Subordinate (domestic currency) ratings of Aa2
Preferred Stock (domestic currency) ratings of Ca
Preferred Stock Non-cumulative (domestic currency) ratings of Ca
Senior Unsecured Shelf (domestic currency) ratings of (P)Aaa
Subordinate Shelf (domestic currency) ratings of (P)Aa2
Other Short Term ratings of P-1
Rating Rationale
On August 2, 2011, as a result of confirming the U.S. government's
Aaa debt rating with a negative outlook, Moody's confirmed the Aaa
long-term and Aa2 subordinated debt ratings of Freddie Mac with a
negative outlook.
Freddie Mac's E+ stand-alone Bank Financial Strength Rating (BFSR)
and the Baseline Credit Assessment (BCA) of 15 (on a scale of 1 to
21, with 1 being the highest) reflect the firm's intrinsic
financial strength and do not incorporate any form of external
support it may receive. A BCA of 15 is the equivalent of a B2 on
Moody's long-term debt rating scale.
The GSE's high dependence and support are based on its central
role in serving the U.S. housing finance system and the importance
of housing finance in the U.S. economy and as a public policy
priority.
Freddie Mac's Ca preferred stock rating reflects its suspension of
dividends announced in September 2008 when the company was placed
into conservatorship.
While the BFSR and BCA do not incorporate any form of external
support that a firm may receive, the ratings do incorporate
external support already provided to the company. Freddie Mac's
BFSR of E+ and its BCA of 15 benefit from the extraordinary
support provided by the U.S. Treasury through the Senior Preferred
Stock Purchase Program. Without this extraordinary support,
Freddie Mac's capital resources would be severely constrained.
Freddie Mac enjoys unlimited capital support from the U.S.
Treasury today through the end of 2012 under the amended Purchase
Agreement. After 2012, the Treasury's funding commitment to
Freddie Mac under the Purchase Agreement will be limited to $149.3
billion ($200 billion maximum amount of the commitment from
Treasury reduced by cumulative draws of $50.7 billion through
December 31, 2009), less any positive net worth as of December 31,
2012. In Moody's view, the funding commitment provides the firm
with sufficient capital and funding to absorb any loss content
currently in Freddie Mac's portfolio.
Rating Outlook
Moody's negative outlook for Freddie Mac's long-term debt rating
reflects the negative outlook of the US government's Aaa debt
rating. In Moody's view, Freddie Mac benefits from very strong
systemic support because of its central role in mortgage finance
in the United States, as well as the importance of housing within
the U.S. economy. Moody's believes the firm's subordinated debt
rating benefits from governmental support as well.
Freddie Mac's Ca preferred stock rating reflects the suspension of
dividends.
What Could Change the Rating - Up
It is unlikely that the Aa2 subordinated debt would be upgraded
without an explicit guarantee from the U.S. government for the
term in which the debt is outstanding. The Ca preferred stock
could be upgraded should Freddie Mac resume dividend payments.
What Could Change the Rating - DOWN
The key factor that could lead to a downgrade of the Aaa long-term
debt rating is a downgrade in the U.S. sovereign credit rating.
These ratings would also be downgraded by a change in Moody's
support assumption.
The methodologies used in this rating were Bank Financial Strength
Ratings: Global Methodology published in February 2007,
Government-Related Issuers: Methodology Update published in July
2010, and Revised Methodology for Government Related Non-Bank
Financial Institutions published in August 2006.
FEDERAL NATIONAL: Moody's Issues Summary Credit Opinion
-------------------------------------------------------
Moody's Investors Service issued a summary credit opinion on
Federal National Mortgage Association and includes certain
regulatory disclosures regarding its ratings. This release does
not constitute any change in Moody's ratings or rating rationale
for Federal National Mortgage Association.
Moody's current ratings on Federal National Mortgage Association
are:
Long Term Issuer rating of Aaa
Senior Unsecured (domestic and foreign currency) ratings of Aaa
Senior Unsecured MTN Program (domestic currency) ratings of (P)Aaa
Bank Financial Strength ratings of E+
Subordinate (domestic currency) ratings of Aa2
Preferred Stock (domestic currency) ratings of Ca
Preferred Stock Non-cumulative (domestic currency) ratings of Ca
Senior Unsecured Shelf (domestic currency) ratings of (P)Aaa
Subordinate Shelf (domestic currency) ratings of (P)Aa2
Other Short Term ratings of P-1
Rating Rationale
On August 2, 2011, as a result of confirming the U.S. government's
Aaa debt rating with a negative outlook, Moody's confirmed the Aaa
long-term and Aa2 subordinated debt ratings of Fannie Mae with a
negative outlook.
Fannie Mae's E+ stand-alone Bank Financial Strength Rating (BFSR)
and the Baseline Credit Assessment (BCA) of 15 (on a scale of 1 to
21, with 1 being the highest) reflect the firm's intrinsic
financial strength and do not incorporate any form of external
support it may receive. A BCA of 15 is the equivalent of a B2 on
Moody's long-term debt rating scale.
Fannie Mae's Aaa senior debt on review for possible downgrade and
Aa2 subordinated debt ratings on review for possible downgrade are
based on the firm's very weak financial strength as indicated by
the BCA of 15, combined with a very high level of support, a high
dependence level, and the Aaa rating on review for possible
downgrade of the U.S. Government. The GSE's very high dependence
and support are based on its central role in serving the U.S.
housing finance system and the importance of housing finance in
the U.S. economy and as a public policy priority.
Fannie Mae's Ca preferred stock rating reflects its suspension of
dividends announced in September 2008 when the company was placed
into conservatorship.
While the BFSR and BCA do not incorporate any form of external
support that a firm may receive, the ratings do incorporate
external supports already provided to the company. Fannie Mae's
BFSR of E+ and its BCA of 15 benefit from the extraordinary
support provided by the U.S. Treasury through the Senior Preferred
Stock Purchase Program. Without this extraordinary support, Fannie
Mae's capital resources would be severely constrained.
Fannie Mae enjoys unlimited capital support from the U.S. Treasury
today through the end of 2012 under the amended Purchase
Agreement. After 2012, the Treasury's funding commitment to Fannie
Mae under the Purchase Agreement will be limited to $124.8 billion
($200 billion maximum amount of the commitment from Treasury
reduced by cumulative draws of $75.2 billion through December 31,
2009), less any positive net worth as of December 31, 2012. In
Moody's view, the funding commitment provides the firm with
sufficient capital and funding to absorb any loss content
currently in Fannie Mae's portfolio.
On July 13, 2011, as a result of placing the U.S. government's
long-term debt rating on review for possible downgrade , Moody's
placed the Aaa senior debt of Fannie Mae on review for possible
downgrade as well as its Aa2 subordinated debt rating on review
for possible downgrade. At the same time, Moody's affirmed the
Prime-1 short-term debt rating of Fannie Mae based on Moody's
expectation that the respective long-term ratings are unlikely to
fall below the Aa level and that the company has sufficient access
to liquidity in the form of cash and U.S. Treasury securities to
allow them to manage through any short-term disruptions in the
discount note and bond markets.
Any rating actions on the U.S. Government would likely result in
Fannie Mae's long-term debt rating and its subordinated debt
rating to moving in lock step with any U.S. sovereign rating
action.
Rating Outlook
Moody's negative outlook for Fannie Mae's long-term and
subordinated debt ratings reflects the negative outlook of the US
government's Aaa debt rating.
Moody's views that Fannie Mae benefits from very strong systemic
support because of its central role in mortgage finance in the
United States, as well as the importance of housing within the
U.S. economy. Moody's believes the firm's subordinated debt rating
benefits from governmental support as well. Senior government
officials have made clear statements about their intention to
support the GSEs to ensure the GSEs have the sufficient capital
and liquidity to meet all their guarantees and debt obligations.
Fannie Mae's Ca preferred stock rating reflects the suspension of
dividends.
What Could Change the Rating - Up
It is unlikely that the Aa2 subordinated debt would be upgraded
without an explicit guarantee from the US government for the term
in which the debt is outstanding. The Ca preferred stock could be
upgraded should Fannie Mae resume dividend payments.
What Could Change the Rating - DOWN
The key factor that could lead to a downgrade of the Aaa long-term
debt rating is a downgrade in the U.S. sovereign credit rating.
These ratings would also be downgraded by a change in Moody's
support assumption.
The methodologies used in this rating were Bank Financial Strength
Ratings: Global Methodology published in February 2007,
Government-Related Issuers: Methodology Update published in July
2010, and Revised Methodology for Government Related Non-Bank
Financial Institutions published in August 2006.
FIRST BANCORP: Fitch Upgrades LT Issuer Default Rating to 'B-'
--------------------------------------------------------------
Fitch Ratings has upgraded the long-term Issuer Default Ratings
(IDRs) and Viability rating of First BanCorp (FBP) and its main
subsidiary, Firstbank Puerto Rico, to 'B-' and 'b-' from 'CC' and
'f', respectively. Fitch has also assigned a Stable Rating
Outlook to both companies.
The upgrade follows an improvement in FBP's capital position,
which provides a buffer for potential losses in its loan portfolio
and improves its financial flexibility. The company's tangible
common equity (TCE) and Tier 1 Common equity ratios improved to
10.25% and 12.96% during 4Q'11 compared to 3.80% and 5.01% for
3Q'11. Additionally, FBP's enhanced capital position exceeds by a
wide margin the minimum capital ratios outlined by regulators in
the consent order of Tier 1 capital of 10%, Total RBC of 12% and
Leverage of 8%. As of Dec. 31, 2011, FBP's Tier 1 Capital, Total
RBC and Leverage were 15.79%, 17.12% and 11.91%. The rating
upgrade incorporates the view that FBP will remain in compliance
with its regulatory order.
FBP's current ratings reflect Fitch's view that credit quality
trends should continue to modestly improve with some volatility
expected given the loss content in the CRE and construction loan
portfolios. However, Fitch does not expect net charge-offs (NCO)
to return to peak level experienced in 2010. Fitch's ratings also
reflect FBP's geographic concentration in Puerto Rico, which makes
the company performance correlated to the local economic and real
estate sector conditions.
During 2011, FBP's reduced the level of non-performing loans
through charge-offs, pay downs, and loan sales. The company's
sizeable NCOs during 2009 and 2010 reduced its construction
exposure, which is the main source of problematic loans. The
construction book totaled $428 million at Dec. 31, 2011 compared
to a peak of $1.49 billion in 2009. Although asset quality
measures remain weak, the level of non-performing assets (which
includes restructured loans and 90+ past dues) on an absolute
basis has declined to $1.84 billion for 4Q'11 compared to $1.91
billion the same period a year-ago. Offsetting the modest
improvements in credit quality, non-performing loan levels still
remain elevated (16.3% of total gross loans for 4Q'11) and much
higher than FBP's Fitch-rated peers.
In 3Q'11, FBP sold $510 million ($269 million book value) of
adversely classified and non-performing loans (NPL) through a
seller financed loan sale. Although Fitch recognizes the sale
improves credit quality measures, FBP still remains exposed to
potential credit losses through its subordinated and equity
interest. Fitch deducts the subordinated interest from its Fitch
Core Capital calculation as it does not view it as loss absorbing.
As such, Fitch Core Capital would be 9.72% at Dec. 31, 2011.
The enhanced capital follows FBP's completion of its previously
announced equity raise in 4Q'11. The $525 million equity raise
which was mainly from private equity investors, Thomas H. Lee
Partners, L.P. (THL) and Oaktree Capital Management, L.P.
(Oaktree) contributing $174 million each and now owning 24.59%
each of FBP's total common stock outstanding. The two investors
also hold one board seat each.
Ratings could be positively impacted should the absolute level of
FBP's nonperforming assets materially decline coupled with a
sustainable improvement in earnings and prudent capital measures.
However, if credit problems persist trending toward peak levels
while eroding capital, FBP's ratings would face downward pressure.
FBP is the second largest locally owned bank in Puerto Rico with
total assets of $13.1 billion at Dec. 31, 2011. FBP has the third
largest branch network on the island with 48 branches throughout
Puerto Rico. The company also has 10 branches in Florida and 14
in the U.S. and British Virgin Islands.
In performing its analysis of Recovery Ratings, Fitch employed
some assumptions that were more conservative than those outlined
in its criteria 'Recovery Ratings for Financial Institutions'
dated Aug. 16, 2011. Some of the recovery rates for certain loan
categories were assumed to be lower to reflect the current
distressed credit environment.
Fitch has upgraded the following ratings with a Stable Outlook:
First BanCorp
-- Long-term IDR to 'B-' from 'CC';
-- Short-term IDR to 'B' from 'C';
-- Viability to 'b-' from 'f'.
FirstBank Puerto Rico
-- Long-term IDR to 'B-' from 'CC';
-- Long-term deposit obligations to 'B-/RR3' from 'CCC/RR3';
-- Short-term IDR to 'B' from 'C';
-- Short-term Deposits to 'B' from 'C'.
-- Market Linked deposit securities to 'B-emr/RR3' from 'CCCemr/
RR3';
-- Viability to 'b-' from 'f'.
Fitch has affirmed the following ratings:
First BanCorp
-- Support at '5'.
-- Support floor at 'NF'.
FirstBank Puerto Rico
-- Support at '5'.
-- Support floor at 'NF'.
FNB UNITED: Incurs $137.3 Million Net Loss in 2011
--------------------------------------------------
FNB United Corp. filed with the U.S. Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$137.31 million on $63.13 million of total interest income in
2011, a net loss of $131.82 million on $82.28 million of total
interest income in 2010, and a net loss of $101.69 million on
$101.51 million of total interest income in 2009.
The Company's balance sheet at Dec. 31, 2011, showed $2.40 billion
in total assets, $2.28 billion in total liabilities and $129.01
million in total shareholders' equity.
The Company has addressed the issues that required it in 2010 to
consider whether it could continue as a going concern. Therefore,
as of Dec. 31, 2011, the Company does not have 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/IiaRgE
About FNB United
Asheboro, N.C.-based FNB United Corp. (Nasdaq:FNBN) is the bank
holding company for CommunityOne Bank, N.A., and the bank's
subsidiary, Dover Mortgage Company. Opened in 1907, CommunityOne
Bank -- http://www.MyYesBank.com/-- operates 45 offices in 38
communities throughout central, southern and western North
Carolina. Through these subsidiaries, FNB United offers a
complete line of consumer, mortgage and business banking services,
including loan, deposit, cash management, wealth management and
internet banking services.
FORD MOTOR: Fitch Raises LT Issuer Default Rating From 'BB+'
------------------------------------------------------------
Fitch Ratings has upgraded the Issuer Default Ratings (IDRs) for
Ford Motor Company (Ford) and its Ford Motor Credit Company LLC
(Ford Credit) captive finance subsidiary to 'BBB-' from 'BB+'.
The Rating Outlook for both Ford and Ford Credit is Stable.
The upgrade of Ford's ratings reflects the automaker's
significantly improved financial performance, balance sheet
repair, and product portfolio improvement that have taken place
over the past several years. Since the last recession, Ford's
management has been heavily focused on increasing profitability,
growing liquidity, lowering debt and reducing the company's
pension obligations. Fitch believes that the work that has been
accomplished has put the company in a solid position to withstand
the significant cyclical and secular pressures faced by the global
auto industry. Importantly, the ratings are based on Fitch's
projections of the company's performance through the economic
cycle, and are predicated on Fitch's expectation that Ford's
liquidity position, cost structure and free cash flow generating
potential will provide the company with sufficient financial
flexibility to maintain an investment-grade credit profile in a
period of economic stress.
Despite Ford's stronger financial position, the company continues
to face a number of risks. Chief among these is the ongoing
uncertainty regarding the strength and pace of the global economic
recovery, and the durability of global auto demand. Although the
global auto market is expected to continue growing, Fitch expects
the rate of growth is likely to be slower than earlier
projections, as much of Western Europe experiences recessionary
conditions and demand growth slows in key emerging markets like
China and India. In the U.S., high unemployment, ongoing housing
weakness and high energy prices will put some pressure on growth,
as well. Additional risks reflected in the low-investment grade
profile include high debt levels, a large pension deficit,
industry competitive dynamics, and a relatively weak market
position in Asia.
Fitch's analysis included a focus on the impact a severe
automotive market downturn would have on Ford's credit profile.
Given the company's operating leverage, working capital profile,
and capital expenditure needs, Fitch expects that Ford would burn
a substantial amount of cash in a downturn. However, Fitch
believes the company's net cash position of nearly $10 billion at
year-end 2011 and other sources of liquidity give Ford the ability
to withstand this likely cash burn without creating liquidity
pressures. In addition, the company has some discretion in
various cash deployment actions that could relieve liquidity
pressures in a downturn. The changes in Ford's business profile
also put it in a better position to face a downturn. The company
has a lower break-even volume as a result of its restructuring
actions over the past several years, and Ford's more balanced
product portfolio has put it in a better position to weather the
likely mix shifts to smaller vehicles typically seen in economic
downturns.
Fitch could consider a future revision of the Rating Outlook to
Positive or an upgrade of the ratings if Ford's margins and free
cash flow continue to grow, resulting in further financial
flexibility. This would most likely result from additional
increases in both vehicle net pricing and market share in Ford's
largest markets, while operating costs remain contained. Further
declines in debt and pension obligations could also contribute to
a positive rating action.
On the other hand, Fitch could consider a revision in the Rating
Outlook to Negative or a downgrade in the ratings if a very severe
downturn in the global auto market leads to a significant
weakening of Ford's liquidity position. As noted, however, the
effect of a downturn on Ford's credit profile has been
incorporated into the ratings, and Fitch believes the company is
in a significantly better position to withstand a future downturn
than it was prior to the last recession. Fitch could also
consider a negative rating action if management turns away from
its focus on strengthening the balance sheet. In particular, an
increase in debt to finance an acquisition or to fund shareholder-
friendly activities would be viewed negatively. Fitch does not
anticipate that the company will increase debt to engage in these
sorts of activities in the intermediate term. Problems with
operational execution or declining market share trends could also
drive negative credit actions, particularly if combined with a
market downturn.
Ford's liquidity position strengthened in 2011 as the company paid
down the remaining $838 million outstanding on its secured
revolving credit facility while also increasing its automotive
cash and marketable securities holdings by $2.4 billion. Total
cash and marketable securities at year end 2011 was $23 billion,
and, including nearly $9 billion credit facility availability,
total liquidity exceeded debt by over $18 billion. In March 2012,
Ford amended and extended its secured revolving credit facility,
increasing the limit and extending most commitments to November
2015 from November 2013. As a result of the amendment and
extension, Ford now has $9 billion in commitments that mature in
2015 and $300 million that mature in 2013.
Free cash flow (automotive cash from operations less capital
expenditures) was $5.1 billion in 2011, up from $2.3 billion in
2010 and the strongest that Ford has produced in many years. This
was driven by a combination of increased funds flow from
operations and lower working capital usage, while capital
expenditures rose a relatively modest $206 million to $4.3
billion. Free cash flow is likely to be much more pressured in
2012 by several factors, however, including dividend payments
(estimated at $800 million) that have been restarted in 2012, a
significant increase in capital spending to $5.5 billion - $6.0
billion, and large planned discretionary contributions to the
company's pension plans. In 2012, Ford expects to make $2 billion
in voluntary contributions to its funded pension plans, which will
result in total cash contributions of about $3.8 billion to the
company's global pension plans, about $2.3 billion more than it
contributed in 2011.
In total, dividends, capital spending and pension contributions
could result in a free cash flow headwind of up to $4.8 billion in
2012, which is likely to drive free cash flow below $1 billion
when the discretionary pension contributions are included. Longer
term, Ford projects that steady-state capital spending will be in
the $6 billion range. Fitch expects that dividend spending could
rise over the longer term, as well, although Ford is likely to be
cautious when evaluating dividend increases.
Ford's automotive EBITDA margin (as calculated by Fitch) declined
to 7.4% in 2011 versus 8.7% in 2010 as higher material costs and
losses in certain markets, particularly Europe, put downward
pressure on the company's profitability. Even with the margin
decline, overall profitability remained relatively strong,
however, driven by higher net pricing and sales growth in North
America. Although automotive revenue grew 7.5% in 2011 to $128
billion, the lower margin led to a decline in Fitch-calculated
EBITDA to $9.5 billion versus over $10 billion in 2010.
Ford's leverage is relatively low for the 'BBB-' rating category.
Although EBITDA was lower in 2011, leverage declined to 1.4 times
(x) at year-end 2011 from 1.9x at year-end 2010 as Ford reduced
its automotive debt outstanding by $6 billion. Lease adjusted
leverage fell to 1.7x from 2.2x. Fitch expects debt will continue
to decline over the next several years as Ford continues to work
toward its mid-decade goal of reducing automotive debt to $10
billion. Fitch notes that Ford's debt amortization profile could
allow the company to hit its debt target by year-end 2015 without
prepayments. In particular, Ford's loans from the U.S. Department
of Energy will begin to amortize in 2012, leading to $240 million
in amortization payments this year and $480 million in annual
amortization payments in 2013 and beyond. Fitch expects leverage
to decline further over the next several years as debt declines
and EBITDA grows on higher global sales volumes.
As of year-end 2011, Ford's global pension plans (including
certain unfunded non-U.S. plans) were underfunded by a total of
$15 billion, of which $9.4 billion was in the U.S. Ford is not
expected to have any required contributions to its U.S. pension
plans in 2012, but, as noted above, the company plans to
contribute a total of $3.8 billion to its global plans in 2012, $2
billion of which will be voluntary contributions in the U.S. Also
included in the $3.8 billion figure is $350 million in direct
payments that Ford expects to make to unfunded plans. Although
the discretionary contributions will reduce the level of free cash
flow that Ford produces in 2012, they demonstrate the company's
intent to use available cash to reduce the liabilities on its
balance sheet, while maintaining a high level of liquidity. In
addition to increasing the level of cash contributed to its
pensions, Ford also has been rebalancing the assets in the plans'
portfolios, reducing their risk by weighting assets more heavily
toward fixed income investments with cash flows that more closely
match the plans' expected payment streams.
From a product perspective, Ford's vehicle lineup has performed
relatively well in the post-recession period, particularly in the
U.S. Ford's light vehicle market share in the U.S. rose each year
between 2008 and 2011, although it is likely to decline somewhat
this year as key competitors, including Chrysler, Volkswagen and
several Asian manufacturers experience growth rates above the
industry average. In the first quarter, Ford's light vehicle
market share fell to 15.3% from 16% in the first quarter of 2011,
despite a nearly 9% increase in light vehicle sales. Fitch
expects net pricing to remain strong for Ford's products, however,
particularly in the compact car segment, where the new Focus
compares favorably with its key Asian competitors. The
introductions later this year of completely new Fusion and Escape
models are likely to further support both increased sales and net
pricing. Ford's pickup sales have also held up so far in 2012
despite rising gasoline prices, due, in part to the increased fuel
efficiency of the company's EcoBoost V6 engine, which has outsold
the more traditional V8 engines for several months.
Ford's senior secured credit facility is rated at 'BBB-', the same
as both the IDR and the senior unsecured rating. According to the
facility's terms, the collateral securing the facility will be
automatically released when Ford's long-term unsecured debt is
rated at 'BBB-' (or its equivalent) or higher by two of the three
major credit rating firms, including Fitch. Following the upgrade
in Fitch's rating of Ford's senior unsecured debt to 'BBB-', only
one of the other two major rating agencies must assign an
investment-grade rating to Ford's long-term unsecured debt for the
collateral to be released. Given the potential for this to occur
in the near term, Fitch has rated the credit facility on par with
the senior unsecured rating.
Fitch is monitoring the potential for temporary supply disruptions
caused by the recent explosion at an Evonik Industries AG plant in
Germany. The plant is a leading supplier of Nylon-12 resin to the
global auto industry, and the explosion could result in a
temporary loss of up to 50% of the global Nylon-12 supply for
several months. Although the magnitude of the effect on Ford and
its competitors is not yet known, Fitch expects any temporary lost
sales would likely be made up once full production resumed. Also,
a supply-forced decline in production could lead to positive net
pricing during the period when vehicle inventories were limited,
helping to support revenue during a period of lower unit sales.
The ratings of Ford Credit are tied to Ford, reflecting the strong
operational and financial linkages between the two companies and
the strategic importance of Ford Credit to its parent, as
demonstrated by the high percentage of Ford sales financed by the
captive. The upgrade further reflects Ford Credit's improved
credit profile, consistent operating performance, solid credit
quality, strong liquidity and adequate risk adjusted
capitalization.
Asset quality metrics are expected to normalize in 2012, after net
loss rates and delinquencies hit historical lows in 2011. Still,
Fitch believes credit performance will outperform historical
levels based on the solid underwriting quality of recent vintages.
Similarly, operating performance has started to stabilize as
positive factors such as loan loss reserve releases and higher
residual gains on operating leases have slowed. However,
profitability is expected to be sound given increase in volume,
economical access to funding, and strong credit performance.
Funding access and costs have continued to improve post-crisis,
driven by solid credit performance of the auto asset class
throughout the downturn, increased liquidity in debt capital
markets, and higher investor demand. Furthermore, funding
flexibility is improving with the company's efforts to shift its
funding mix towards long-term unsecured debt. Fitch expects
unsecured debt to gradually increase as a percentage of total
debt, which should result in larger pool of unencumbered assets,
benefiting unsecured debt holders.
Fitch expects Ford Credit's ratings to move in tandem with its
parent. However, a material increase in leverage, an inability to
access funding for an extended period of time, and significant
deterioration in the credit quality of the underlying loan and
lease portfolio, could become restraining factors on the parent's
ratings.
Fitch has taken the following rating actions:
Ford Motor Company
-- Long-term IDR upgraded to 'BBB-' from 'BB+';
-- Senior secured credit facility affirmed at 'BBB-';
-- Senior unsecured upgraded to 'BBB-' from 'BB+'.
Ford Motor Co. of Australia
-- Long-term IDR upgraded to 'BBB-' from 'BB+'.
Ford Motor Credit Company LLC
-- Long-term IDR upgraded to 'BBB-' from 'BB+';
-- Short-term IDR upgraded to 'F3' from 'B';
-- Senior shelf upgraded to 'BBB-' from 'BB+';
-- Senior unsecured upgraded to 'BBB-' from 'BB+';
-- Commercial paper (CP) upgraded to 'F3' from 'B'.
Ford Credit Europe Bank Plc
-- Long-term IDR upgraded to 'BBB-' from 'BB+';
-- Short-term IDR upgraded to 'F3' from 'B';
-- Senior unsecured upgraded to 'BBB-' from 'BB+';
-- CP upgraded to 'F3' from 'B';
-- Short-term deposits upgraded to 'F3' from 'B'.
Ford Capital B.V.
-- Long-term IDR upgraded to 'BBB-' from 'BB+';
-- Senior unsecured upgraded to 'BBB-' from 'BB+'.
Ford Credit Canada Ltd.
-- Long-term IDR upgraded to 'BBB-' from 'BB+';
-- Short-term IDR upgraded to 'F3' from 'B';
-- Senior unsecured upgraded to 'BBB-' from 'BB+';
-- CP upgraded to 'F3' from 'B'.
Ford Credit Australia Ltd.
-- Long-term IDR upgraded to 'BBB-' from 'BB+';
-- Short-term IDR upgraded to 'F3' from 'B';
-- CP upgraded to 'F3' from 'B'.
Ford Credit de Mexico, S.A. de C.V.
-- Long-term IDR upgraded to 'BBB-' from 'BB+'.
Ford Credit Co. S.A. de C.V.
-- Long-term IDR upgraded to 'BBB-' from 'BB+';
-- Senior unsecured upgraded to 'BBB-' from 'BB+'.
Ford Motor Credit Co. of New Zealand Ltd.
-- Long-term IDR upgraded to 'BBB-' from 'BB+';
-- Short-term IDR upgraded to 'F3' from 'B';
-- Senior unsecured upgraded to 'BBB-' from 'BB+';
-- CP upgraded to 'F3' from 'B'.
Ford Motor Credit Co. of Puerto Rico, Inc.
-- Short-term IDR upgraded to 'F3' from 'B'.
Ford Holdings, Inc.
-- Long-term IDR upgraded to 'BBB-' from 'BB+';
-- Senior unsecured upgraded to 'BBB-' from 'BB+'.
FUSION TELECOMMUNICATIONS: Incurs $4.4 Million Net Loss in 2011
---------------------------------------------------------------
Fusion Telecommunications International, Inc., filed with the U.S.
Securities and Exchange Commission its Annual Report on Form 10-K
disclosing a net loss of $4.45 million on $42.35 million of
revenue in 2011, compared with a net loss of $5.79 million on
$41.76 million of revenue in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $4.55 million
in total assets, $15.14 million in total liabilities and a $10.58
million total stockholders' deficit.
For 2011, Rothstein, Kass & Company, P.C., in Roseland, New
Jersey, noted that the Company has had negative working capital
balances, incurred negative cash flows from operations and net
losses since inception, and has limited capital to fund future
operations that raises a substantial doubt about their ability to
continue as a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/1UpfA0
About Fusion Telecommunications
New York City-based Fusion Telecommunications International, Inc.
(OTC BB: FSNN) is a provider of Internet Protocol ("IP") based
digital voice and data communications services to corporations and
carriers worldwide.
GAMETECH INT'L: Defaults on Loan After Consultant Resigns
---------------------------------------------------------
Electronic gaming equipment manufacturer GameTech International
said in a regulatory filing on Monday it defaulted on a loan after
a financial consultant that it was required by lenders to hire
quit.
GameTech International owes $15.8 million under an Amended and
Restated Loan Agreement dated June 15, 2011, with lenders U. S.
Bank N.A. and Bank of West.
Under the terms of the Loan Agreement, the Company is, among other
things, required to: (i) retain Morris-Anderson & Associates, Ltd.
as a consultant to the Company, or such other consultant as may be
acceptable to both the Lenders and the Company, and (ii) deliver
certain bi-weekly reports to the Lenders, regarding: (a) any
meetings and discussions held by the Company regarding any
acquisitions, divestitures, financings or related transactions,
and (b) the Company's status and projections with respect to a
strategic operating plan previously provided to the Lenders,
pursuant to Section 6.5(b) of the Loan Agreement.
On March 23, 2012, Morris-Anderson resigned as a consultant to the
Company. On April 17, 2012, the Company received written notice
from U.S. Bank, as agent for the Lenders stating that: (1) the
resignation of Morris-Anderson constitutes an event of default
under Section 7.17 of the Loan Agreement, and (2) the Company's
failure to deliver certain Bi-weekly Reports to the Lenders, as
required under Section 6.5(b) of the Loan Agreement, constitutes
an event of default under Section 7.3 of the Loan Agreement.
The notice states that the outstanding balance under the Loan
Agreement will bear interest at the default rate from March 23,
2012. The default rate is equal to a base rate plus three
percentage points. The base rate is equal to an applicable margin
plus the daily Eurocurrency rate or an alternative base rate (as
provided for in the Loan Agreement). The current applicable
margin is 7.50% (February 2012 through April 2012), and increases
to 8.50% (May 2012 through October 2012) and 9.50% (November 2012
through June 30, 2013). As of April 20, 2012, the default rate
was 10.5%. The notice further provides that the Lenders have the
immediate right, as a result of the events of default, to
accelerate payment of the outstanding loan balance, commence
action against the Company, enforce the payment of the notes under
the Loan Agreement, commence foreclosure proceedings and otherwise
enforce their rights and remedies against the Company.
Since its receipt of the notice, the Company has engaged in
discussions with the Lenders, who have expressed a willingness to
consider entering into a forbearance agreement, which may impose
additional obligations and restrictions on the Company to those
currently contained in the Loan Agreement.
"While the Company continues to actively engage in discussions
with the Lenders and is optimistic a resolution can be reached,
there can be no assurance that the Company will be able to obtain
a forbearance, waivers and/or reach a satisfactory agreement with
the Lenders," Gametech said in a Form 8-K filed with the
Securities and Exchange Commission.
About Gametech International
Based in Reno, Nevada, GameTech develops and manufactures gaming
entertainment products and systems. GameTech holds a significant
position in the North American bingo market with its interactive
electronic bingo systems, portable and fixed-based gaming units,
and complete hall management modules. It also holds a significant
position in select North American VLT markets, primarily Montana,
Louisiana, and South Dakota, where it offers video lottery
terminals and related gaming equipment and software. It also
offers Class III slot machines and server-based gaming systems.
GameTech International disclosed net income of $858,000 on
$8.25 million of net revenues for the 13-week period ended Jan.
29, 2012, compared with a net loss of $288,000 on $10.10 million
of net revenues for the 13-week period ended Jan. 30, 2011.
The Company reported a net loss of $20.4 million on $35.2 million
of revenue for the 52 weeks ended Oct. 31, 2010, compared with a
net loss of $10.5 million on $47.8 million of revenue for the
52 weeks ended Nov. 1, 2009.
The Company's balance sheet at Jan. 29, 2012, showed
$27.22 million in total assets, $22.88 million in total
liabilities, all current, and $4.34 million in stockholders'
equity.
Piercy Bowler Taylor & Kern expressed substantial doubt about the
Company's ability to continue as a going concern following the
fiscal 2011 financial results. All of the Company's debt
(approximately $23.4 million at Oct. 30, 2011) is classified as
current. The independent auditors noted that there is significant
uncertainty as to whether the Company will be able to satisfy all
conditions necessary to extend the maturity of those obligations.
GENCORP INC: To Redeem $74.9MM Its 9-1/2% Sr. Subordinated Notes
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GenCorp Inc. has given an irrevocable notice for the redemption of
all of its outstanding 9 1/2% Senior Subordinated Notes due 2013.
The Notes, which have an outstanding principal balance of
$74,963,000, will be redeemed on May 23, 2012, at 100% of the
principal amount plus accrued and unpaid interest to the
redemption date. The Company intends to fund the redemption
through the use of its cash on hand.
The Bank of New York Mellon Trust Company, N.A., is the trustee
for the Notes and is serving as the paying agent for this
transaction. The Bank of New York Mellon Trust Company, N.A.,
mailing address is P.O. Box 396, East Syracuse, NY 13057 Attn:
Debt Processing Group. Holders of the Notes with questions
regarding the details of the redemption may call The Bank of New
York Mellon Trust Company, N.A. at 800-254-2826.
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.
* * *
This concludes the Troubled Company Reporter's coverage of Gencorp
until facts and circumstances, if any, emerge that demonstrate
financial or operational strain or difficulty at a level
sufficient to warrant renewed coverage.
GENCORP INC: S&P Affirms 'B' Corp. Credit Rating; Outlook Positive
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on California-based GenCorp Inc. and revised the
outlook to positive from stable.
"At the same time, Standard & Poor's affirmed its 'CCC+' issue
ratings on the company's convertible and senior subordinated
notes. We also maintained the '6' recovery rating, indicating
likely negligible (0-10%) recovery in a payment default. We will
withdraw the ratings on the 9.5% notes due 2013 once the company
repays the $75 million outstanding, which it plans to do using
cash on hand," S&P said.
"The outlook revision reflects our expectation that lower debt and
continued credit metric improvement could warrant an upgrade in
the next year," said Standard & Poor's credit analyst Chris
Mooney.
"GenCorp has generated healthy free cash flow over the past
several years and used proceeds to significantly reduce debt.
Modest earnings growth could improve credit metrics somewhat over
the next year," S&P said.
"However, near-term defense and space spending remains uncertain,
and greater-than-expected declines could disrupt demand for
GenCorp's products, resulting in weaker earnings and cash flow
than we are forecasting," Mr. Mooney said.
"GenCorp is a major provider of solid and liquid propulsion for
missiles and space launch vehicles. Standard & Poor's assesses
GenCorp's business risk profile as 'weak' because of its limited
diversity and modest scale of operations compared with
competitors. Offsetting these challenges to some extent is the
company's good niche positions in manufacturing systems for rocket
and space propulsion and solid backlog. Standard & Poor's
characterizes GenCorp's financial risk profile as 'aggressive'
because of sizeable postretirement obligations and weak, albeit
improving, financial performance," S&P said.
GRACEWAY PHARMACEUTICALS: Wins Confirmation of Liquidating Plan
---------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Graceway Pharmaceuticals LLC won the signature of the
bankruptcy judge on a confirmation order approving a liquidating
Chapter 11 plan.
The disclosure statement explaining the plan said that:
* For the remainder of their claims not paid when the business
was sold, first-lien creditors with claims of as much as
$433 million are to receive remaining proceeds from their
collateral plus most proceeds from lawsuits to be prosecuted
by a trust.
* The first-lien debt will be paid from 96.7% to 100%.
* Second-lien lenders with as much as $364 million in claims
should see a recovery of 2.7% to 4.6%, from whatever is
left of the collateral after the first lien is paid. The
second-lien creditors will also collect some lawsuit
proceeds.
* Unsecured creditors are expected to have a payday between
0.9% and 3.3% from a slice of lawsuit proceeds.
In March, Graceway obtained approval of a settlement that brought
an additional $6 million for distribution to unsecured creditors.
The settlement arose from a $9.13 million payment Graceway made in
2010 to its owners, including GTCR Golder Rauner LLC. The company
contended the payment could be recovered in bankruptcy. The
settlement calls for GTCR to pay $4.5 million to the first-lien
lenders and $1.5 million to Graceway for distribution under the
Chapter 11 plan.
About Graceway Pharmaceuticals
Based in Bristol, Tennessee, Graceway Pharmaceuticals LLC offered
dermatology, respiratory, and women's health products. Its
Zyclara Cream is used for the treatment of external genital and
perianal warts (EGW) in patients 12 years of age and older. The
company offers products for the treatment of dermatology
conditions, such as actinic keratosis, superficial basal cell
carcinoma, external genital warts, atopic dermatitis, and acne;
and respiratory conditions, such as asthma.
Graceway Pharmaceuticals and its affiliates filed Chapter 11
bankruptcy petitions (Bankr. D. Del. Lead Case No. 11-13036) on
Sept. 29, 2011.
The company's debt includes $430.7 million owing on a first-lien
revolving credit and term loan. Second-lien debt is $330 million,
with mezzanine debt totaling another $81.4 million.
Attorneys at Young Conaway Stargatt & Taylor LLP serve as counsel
to the Debtors. Latham & Watkins LLP is the co-counsel. Alvarez
and Marsal North America, LLC, is the financial advisor. Lazard
Freres & Co. LLC is the investment banker. PricewaterhouseCoopers
LLP is the tax consultant. BMC Group serves as claims and notice
agent.
Lowenstein Sandler PC serves as the committee counsel.
Graceway completed the sale of the business in December 2011 to
Medicis Pharmaceutical Corp. for $455 million.
GRANITE BROADCASTING: Moody's Assigns 'B3' Corp. Family Rating
--------------------------------------------------------------
Moody's Investors Service assigned a B3 Corporate Family Rating
("CFR") and a B3 Probability of Default Rating ("PDR") to Granite
Broadcasting Corporation. Moody's also assigned B2, LGD3 - 39%
ratings each to the company's proposed $5 million 1st Lien Senior
Secured Revolver and $215 million 1st Lien Senior Secured Term
Loan. Proceeds from the new term loan along with a proposed $45.6
million 2nd Lien term loan (unrated) will be used primarily to
refinance existing unrated debt. The rating outlook is stable.
Assignments:
Issuer: Granite Broadcasting Corporation
Corporate Family Rating: Assigned B3
Probability of Default Rating: Assigned B3
New $5 million 1st Lien Senior Secured Revolver: Assigned
B2, LGD3 -- 39%
New $215 million 1st Lien Senior Secured Term Loan:
Assigned B2, LGD3 -- 39%
Outlook Actions:
Issuer: Granite Broadcasting Corporation
Outlook is Stable.
Ratings Rationale
The B3 corporate family rating reflects Granite's very high pro
forma, 2-year average debt-to-EBITDA leverage of approximately
6.9x at the end of 12 months from closing (including Moody's
standard adjustments, or 6.5x net of cash), increasing
fragmentation of media outlets, the cyclical and mature nature of
television advertising demand, as well as the company's lack of
national scale and regional concentration in the Midwest (more
than 50% of revenues). Since emerging from bankruptcy as a result
of too much debt, new management drove significant cost reductions
to bring EBITDA margins above 35% in 2010 and 2011 compared to
EBITDA margins of less than 29% in prior years. The B3 rating
reflects free cash flow-to-total debt ratios of more than 7% and
incorporates the accrual of PIK interest (LIBOR + 15%) on $45.6
million of unrated 2nd lien debt. The $7.5 million and $8.8
million of accrued interest in each of the first two years offset
expected term loan repayments resulting in only a modest decrease
in debt balances over the rating horizon. Absent the ability to
PIK interest payments, free cash flow-to-total debt would be
reduced to 4%-5%. Ratings are supported by #1 and #2 revenue
rankings in five of nine markets, good EBITDA margins, a
meaningful increase in non-cyclical cash flow benefits from
retransmission agreements (net of reverse compensation payments),
as well as an expected increase in political revenues in the
second half of 2012. Although core revenue and EBITDA are expected
to grow in the low to mid-single digit range over the rating
horizon, Moody's believes credit metrics including debt-to-EBITDA
leverage and interest coverage ratios should improve as free cash
flow is applied to reduce term loan balances, consistent with
management's target leverage of 5.0x. Liquidity is expected to be
adequate.
The stable outlook assumes successful refinancing of current
credit facilities and reflects Moody's view that revenue and
EBITDA will remain in line with expectations particularly for
stations in its Midwest and New York clusters. The outlook also
incorporates Moody's expectation that 2-year average debt-to-
EBITDA ratios will improve from current levels with free cash
flow-to-debt ratios greater than 7%.
Ratings could be downgraded if 2-year average debt-to-EBITDA
ratios are sustained above 7.0x after 2012 due to performance
deterioration in one of Granite's geographic clusters or due to
PIK accretion on the 2nd lien notes, debt financed acquisitions,
or shareholder distributions. Deterioration in liquidity could
also result in a downgrade. Ratings could be upgraded if 2-year
average debt-to-EBITDA ratios are sustained comfortably below 6.0x
with free cash flow-to-debt ratios remaining above 7%; liquidity
would also need to remain adequate.
The principal methodology used in rating Granite Broadcasting was
the Global Broadcast Industry Methodology published in June 2008.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Granite Broadcasting Corporation is a television broadcaster
owning or operating television stations (13 primary signals, plus
11 digital multi-cast signals), online and mobile properties,
primarily in small and medium-sized markets in three geographic
clusters including the Midwest, New York state, and California.
Nine of the 13 primary stations are in seven markets ranked 55# to
157# with one station in San Francisco (market #6) and another
station in Detroit (market #11). Stations are generally affiliated
with Big Four networks and have #1 or #2 rankings in four out of
nine markets. Granite Broadcasting filed chapter 11 in December
2006 resulting in the restructuring of roughly $520 million in
debt. Former debt holders became shareholders including Silver
Point Capital which owns the majority (67%) of the company with
the remaining shares being held among various parties including
financial firms, existing management, and individual shareholders
of the formerly publicly traded common stock. Headquartered in New
York, NY, Granite reported revenues of approximately $103 million
for the 12 months ended December 2011.
GRANITE BROADCASTING: S&P Rates Corp. Credit 'B'; Outlook Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned New York City-based TV
broadcaster Granite Broadcasting Corp. its preliminary 'B'
corporate credit rating. The outlook is stable.
"At the same time, we assigned preliminary issue-level ratings to
the company's proposed first-lien credit facilities, which are
expected to consist of a $5 million revolving credit facility due
2017 and a $215 million senior secured term loan B due 2019. The
company is also planning to issue $45.6 million of second-lien
debt (unrated) and $22 million of equity, both of which will be
held by its sponsor, Silver Point Capital. The company plans to
use the proceeds of these issues to repay its existing debt,
accrued interest, and transaction fees and expenses," S&P said.
"The revolving credit facility and term loan B are rated
preliminary 'B' (at the same level as our preliminary 'B'
corporate credit rating on the company), with a preliminary
recovery rating of '4', indicating our expectation of average (30%
to 50%) recovery for first-lien lenders in the event of a payment
default," S&P said.
"The stable rating outlook reflects our expectation that the
company will maintain well in excess of a 10% EBITDA cushion of
covenant compliance and adequate liquidity over at least the next
12 to 18 months as a result of EBITDA growth and modest debt
repayment," S&P said.
"Our preliminary 'B' corporate credit rating reflects our view
that the company has a 'weak' business risk profile and a 'highly
leveraged' financial risk profile, based on our criteria. The
company's portfolio of low-ranked TV stations in its large markets
and major network affiliated stations in several small TV markets,
along with its relatively low EBITDA margin compared with peers',
support our assessment of the business risk profile as weak. We
regard Granite's financial risk profile as highly leveraged
because of its very high debt leverage, at 9.0x as of Dec. 31,
2011. The proposed transaction is essentially leverage-neutral,"
S&P said.
"Granite operates 13 TV stations in two large and seven small and
midsize TV markets. Neither of the large-market stations is
affiliated with a major broadcast network, which puts Granite at a
competitive disadvantage in garnering political ad revenue and
retransmission fees for those stations. Although the company's
stations reach 6% of U.S. TV households, its audience reach
declines to 2% when the two large-market stations are excluded.
The company has been making progress in improving its EBITDA since
emerging from bankruptcy in 2007, largely through cost cuts. More
recently, management has turned its attention to revenue
enhancement by increasing its sales force. Recent signal
retransmission contract renewals with cable and satellite
operators are also contributing a sharp increase in retransmission
fees for carriage of major network affiliates. Nevertheless, we
expect that some of these gains will erode over the next few years
as the company will be obliged to share its retransmission fees
with the networks upon the renewal of their affiliation
contracts," S&P said.
"Under our base-case scenario for 2012, we expect that Granite's
revenue will increase at a mid-teens percentage rate and EBITDA
will jump by more than 40%, benefiting from an influx of political
ad revenue in the second half and sharply higher retransmission
fees. However, these improvements will partly reverse in 2013, in
our view, in the absence of political ad revenue and with the
gradual phase-in of retransmission fee-sharing as network
affiliations renew. The EBITDA margin jumps to the mid-30% area in
2012 under our base-case scenario, then drops to about 30% in
2013," S&P said.
GREY OAKS: Case Summary & 5 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: Grey Oaks, Inc.
15550 Linnet St Nw
Andover, MN 55304
Bankruptcy Case No.: 12-42242
Chapter 11 Petition Date: April 17, 2012
Court: United States Bankruptcy Court
District of Minnesota (Minneapolis)
Judge: Dennis D O'Brien
Debtor's Counsel: Ralph Mitchell, Esq.
LAPP LIBRA THOMSON STOEBNER & PUSCH
One Financial Plaza, Suite 2500
120 S 6th St.
Minneapolis, MN 55402
Tel: (612) 338-5815
E-mail: rmitchell@lapplibra.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 five largest unsecured
creditors filed together with the petition is available for free
at http://bankrupt.com/misc/mnb12-42242.pdf
The petition was signed by Gerald G. Windschitl, president.
HALE MOKU LLC: Files for Chapter 11 in Los Angeles
--------------------------------------------------
Hale Moku, LLC, filed a Chapter 11 petition (Bankr. C.D. Calif.
Case No. 12-24357) on April 24, 2012, in Los Angeles.
Hale Moku, a Los Angeles-based property developer, disclosed
$20.1 million in assets and $14.9 million in liabilities in its
schedules. The Debtor owns seven single family residences in
Venice and Los Angeles, valued at an aggregate of $20.1 million.
The properties serve as collateral to $14.83 million in secured
debt. A copy of the schedules attached to the petition is
available for free at http://bankrupt.com/misc/cacb12-24357.pdf
Thomas C. Corcovelos, Esq., at Corcovelos & Forry LLP, in
Manhattan Beach, California, serves as counsel.
HOSTESS BRANDS: Court OKs Amendment to Final DIP Financing Order
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York,
at the behest of Hostess Brands, Inc., et al., amended, for the
second time, the final order, dated Feb. 3, 2012, authorizing the
Debtors to (a) obtain postpetition financing; and (b) utilize cash
collateral.
The Debtors, the Official Committee of Unsecured Creditors and the
Prepetition Secured Parties had engaged in discussions and agreed
to amend the Final DIP order.
The Court ordered that the first sentence of paragraph 21 of the
Final DIP order will be amended to read as:
The stipulation provides that the Final Order will be binding
on all parties-in-interest, including, without limitation,
the Debtors and the Creditors' Committee, unless, and solely
to the extent that an adversary proceeding or other contested
matter has been commenced by the Debtors (or the Creditors'
Committee, if they have been granted standing to do so) on
behalf of the Debtors' estates against the Prepetition
Secured Parties in connection with any matter related to the
Existing Agreements, the Indenture or the Prepetition
Collateral, in each case by no later May 31, 2012, provided,
however, that the stipulations and admissions contained in
paragraph 6(b) with respect to the Revolving Priority
Collateral will be binding on all parties-in-interest upon
entry of the Second Amendment Order.
In all other respects, the Final DIP order remains the same.
About Hostess Brands
Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known
for iconic brands such as Butternut, Ding Dongs, Dolly Madison,
Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride,
Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution
centers and 570 outlets in 49 states.
Hostess filed for Chapter 11 bankruptcy protection early morning
on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through
12-22056) in White Plains, New York. Debtor-affiliates that filed
separate Chapter 11 petition are IBC Sales Corporation, IBC
Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and
MCF Legacy Inc. Hostess Brands disclosed assets of $982 million
and liabilities of $1.43 billion as of Dec. 10, 2011. Debt
includes $860 million on four loan agreements. Trade suppliers
are owed as much as $60 million.
The bankruptcy filing was made two years after predecessors
Interstate Bakeries Corp. and its affiliates emerged from
bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood
Holding LLC, after providing $130 million to finance the plan,
obtained control of IBC's business following the prior
reorganization. Hostess Brands is privately held. The new owners
pursued new Chapter 11 cases to escape from what they called
"uncompetitive and unsustainable" union contracts, pension plans,
and health benefit programs.
In 2011, Hostess retained Houlihan Lokey to explore sales of its
smaller assets and individual brands. Houlihan Lokey oversaw the
sale of Mrs. Cubbison's to Sugar Foods Corporation for
$12 million, but was unable to sell any of Hostess' core assets.
Judge Robert D. Drain oversees the case. Hostess has hired Jones
Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general
corporate counsel and conflicts counsel; Perella Weinberg Partners
LP as investment bankers, FTI Consulting, Inc. to provide an
interim treasurer and additional personnel for the Debtors, and
Kurtzman Carson Consultants LLC as administrative agent.
Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry
Wilson, the head of turnaround and restructuring firm MAEVA
Advisors, are representing the Teamsters union.
Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain
Millers International Union and Bakery & Confectionery Union &
Industry International Pension Fund are Jeffrey R. Freund, Esq.,
at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David
A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright &
Jaworski L.L.P.
An official committee of unsecured creditors has been appointed in
the case. The committee selected New York law firm Kramer Levin
Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein
head the legal team for the committee.
HOSTESS BRANDS: Seeks to Reject Labor Deals With 10 More Unions
---------------------------------------------------------------
Rachel Feintzeig at Dow Jones' Daily Bankruptcy Review reports
that Hostess Brands Inc. is launching the second wave of the labor
battle that has taken center stage in its bankruptcy case, seeking
to shed 67 labor deals with 10 unions.
About Hostess Brands
Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known
for iconic brands such as Butternut, Ding Dongs, Dolly Madison,
Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride,
Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution
centers and 570 outlets in 49 states.
Hostess filed for Chapter 11 bankruptcy protection early morning
on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through
12-22056) in White Plains, New York. Debtor-affiliates that filed
separate Chapter 11 petition are IBC Sales Corporation, IBC
Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and
MCF Legacy Inc. Hostess Brands disclosed assets of $982 million
and liabilities of $1.43 billion as of Dec. 10, 2011. Debt
includes $860 million on four loan agreements. Trade suppliers
are owed as much as $60 million.
The bankruptcy filing was made two years after predecessors
Interstate Bakeries Corp. and its affiliates emerged from
bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood
Holding LLC, after providing $130 million to finance the plan,
obtained control of IBC's business following the prior
reorganization. Hostess Brands is privately held. The new owners
pursued new Chapter 11 cases to escape from what they called
"uncompetitive and unsustainable" union contracts, pension plans,
and health benefit programs.
In 2011, Hostess retained Houlihan Lokey to explore sales of its
smaller assets and individual brands. Houlihan Lokey oversaw the
sale of Mrs. Cubbison's to Sugar Foods Corporation for
$12 million, but was unable to sell any of Hostess' core assets.
Judge Robert D. Drain oversees the case. Hostess has hired Jones
Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general
corporate counsel and conflicts counsel; Perella Weinberg Partners
LP as investment bankers, FTI Consulting, Inc. to provide an
interim treasurer and additional personnel for the Debtors, and
Kurtzman Carson Consultants LLC as administrative agent.
Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry
Wilson, the head of turnaround and restructuring firm MAEVA
Advisors, are representing the Teamsters union.
Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain
Millers International Union and Bakery & Confectionery Union &
Industry International Pension Fund are Jeffrey R. Freund, Esq.,
at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David
A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright &
Jaworski L.L.P.
An official committee of unsecured creditors has been appointed in
the case. The committee selected New York law firm Kramer Levin
Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein
head the legal team for the committee.
HOVNANIAN ENTERPRISES: Swaps 981,302 Shares with $4.1-Mil. Notes
----------------------------------------------------------------
Pursuant to agreements with bondholders, each dated March 26,
2012, Hovnanian Enterprises, Inc., issued an aggregate of 981,302
shares of the Company's Class A common stock, par value $0.01 per
share, in exchange for an aggregate of approximately $4.1 million
aggregate principal amount of the Company's outstanding 8.625%
Senior Notes due 2017.
The exchanges were effected with existing bondholders and no
commission or other remuneration was paid or given directly or
indirectly for soliciting such exchanges. Accordingly, the
exchanges were effected pursuant to Section 3(a)(9) of the
Securities Act of 1933, as amended.
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.
LAREDO PETROLEUM: Moody's Assigns 'B3' Rating to New Senior Notes
-----------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Laredo
Petroleum, Inc.'s proposed senior notes due 2022. A portion of the
proceeds from the notes will be used to repay credit facility
borrowings, with the remainder used to pre-fund capital
expenditures for 2012. The rating outlook is stable.
Ratings Rationale
The notes issuance enhances liquidity by increasing availability
under the company's credit facility.
The B1 Corporate Family Rating (CFR) considers Laredo's high
proportion of liquids production in the current strong oil price
environment, a large and geologically diversified drilling
inventory in the Permian and Anadarko basins, the company's strong
operational track record, and the management team's long history
in the mid-continent region. The rating also considers Moody's
expectation of continued rapid growth with a large amount of debt
funded negative free cash flow.
The SGL-3 Speculative Grade Liquidity rating reflects adequate
liquidity through 2012. At April 24, 2012, pro forma for the notes
offering, the company's credit facility (to be amended concurrent
with the notes offering) will have an undrawn $810 million
borrowing base and at least $140 million of cash. There are no
debt maturities until 2016 when the credit facility matures.
Financial covenants under the credit facility are EBITDAX /
interest of at least 2.5x and a current ratio of at least 1.0x.
The company had significant headroom under these covenants as of
December 31, 2012 with EBITDA / interest of 6.8x and a current
ratio of 3.5x. Substantially all of Laredo's assets are pledged as
security under the credit facility which limits the extent to
which asset sales could provide a source of additional liquidity
if needed.
The B3 senior unsecured note rating reflects both the overall
probability of default of Laredo, to which Moody's assigns a PDR
of B1, and a loss given default of LGD5-76%. Although Moody's Loss
Given Default Methodology indicates a single notch between the CFR
and note ratings at the current credit facility borrowing base
size, the notes are rated two notches beneath the B1 CFR due to
the potential for growth in the borrowing base relative to the
unsecured debt given the company's rapid growth.
Moody's could upgrade the ratings if production grows to 55 mboe/d
and RCF / debt appears likely to remain above 20%. Moody's could
downgrade the ratings if RCF / debt appears likely to be sustained
below 20% or LFCR appears likely to be sustained below 1.0x.
The principal methodology used in rating Laredo 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.
Laredo Petroleum, Inc. is an independent exploration and
production company headquartered in Tulsa, OK.
LAREDO PETROLEUM: S&P Rates $400-Mil. Senior Notes 'B-'
-------------------------------------------------------
Standard & Poor's Ratings Services assigned issue-level and
recovery ratings to Laredo Petroleum Inc.'s proposed $400 million
senior unsecured notes due 2022. "The issue rating on the notes is
'B-' (two notches below the corporate credit rating). The recovery
rating on this debt is '6', indicating our expectation of
negligible (0% to 10%) recovery in the event of a payment default.
The company expects to use proceeds to repay outstandings under
its revolving credit facility and for general corporate purposes,"
S&P said.
"The ratings on Laredo Petroleum reflect its weak business risk,
characterized by a growing, albeit geographically concentrated,
reserve base, its high percentage of proved undeveloped reserves
(PUDs), its 'aggressive' financial risk, and negative cash flow
generation. The company's success in growing its reserve base
through its drilling program and acquisitions financed principally
with equity offset these risks somewhat," S&P said.
"Laredo's reserve base has grown significantly because of the
acquisition of Broad Oak Energy in 2011, to about 822 billion
cubic foot equivalent (bcfe). However, we note the reserve base
contains a relatively high percentage of PUDs, and has limited
geographic diversity," S&P said.
RATINGS LIST
Laredo Petroleum Inc.
Corporate credit rating B+/Stable/--
New rating
Proposed $400 mil sr unsecd nts due 2022 B-
Recovery rating 6
LARSON LAND: Court Appoints Chapter 11 Trustee
----------------------------------------------
Katy Stech, writing for Dow Jones' Daily Bankruptcy Review,
reports that the U.S. Bankruptcy Judge in Boise, Idaho, has
appointed a chapter 11 trustee in the bankruptcy case of Select
Onion Co., removing Farell Larson, as president.
Last week, the Court denied the Company's request to use cash
collateral of its bank lender.
DBR relates the U.S. Trustee, which sought appointment of the case
trustee, wrote in a court filing after discussing the situation
with one of the Company's lenders, that Mr. Larson has said "would
not voluntarily convert to Chapter 7 and that he was not willing
to do a 'f-ing' thing to help."
"He also advised that he's ready to hand over the keys and leave
the operation regardless of the debtor's fiduciary duty," the U.S.
Trustee said, according to DBR.
The Company owes Zions First National Bank $11.9 million on a
secured loan. The Company also owed about $45 million to ConAgra
Foods.
About Larson Land Company
Ontario, Oregon-based Larson Land Company LLC, fka Select Onion
Co. LLC -- http://www.selectonion.com/-- a privately held
agribusiness company that grows, stores, processes and ships
bagged onions, fresh processed onions, whole peel onions, IQF
onions, and delicious raw breaded hand packed onion rings, filed a
Chapter 11 petition (Bankr. D. Idaho Case No. 12-00820) in Boise,
Idaho, on April 12, 2012, estimating assets of up to $100 million
and debts of up to $500 million. Judge Terry L. Myers presides
over the case. Brent T. Robinson, Esq., at Robinson, Anthon &
Tribe, serves as the Debtor's counsel. The petition was signed by
Farrell Larson, president.
LAUSELL INC: Sec. 341 Creditors Meeting Set for May 24
------------------------------------------------------
The U.S. Trustee in San Juan, Puerto Rico, will convene a meeting
of creditors under 11 U.S.C. Sec. 341(a) in the Chapter 11 case of
Lausell, Inc., on May 24, 2012, at 2:30 p.m. at 341 Meeting Room,
Ochoa Building, 500 Tanca Street, First Floor, San Juan.
Proofs of claim are due by Aug. 22, 2012. Government Proofs of
Claim are due by Oct. 15, 2012.
About Lausell Inc.
Lausell, Inc., filed a bare-bones Chapter 11 petition (Banrk.
D.P.R. Case No. 12-02918) on April 17, 2012 in Old San Juan,
Puerto Rico. The Bayamon, Puerto Rico-based company disclosed
$37.7 million in assets and debts of US$24.5 million. Lausell,
also known as Aluminio Del Caribe, is a manufacturer of windows
and doors.
Bankruptcy Judge Mildred Caban Flores oversees the case. Charles
Alfred Cuprill, Esq., at Charles A. Curpill, PSC, serves as
counsel to the Debtor.
LEHMAN BROTHERS: Makes Up 94% of All Claims Trading in March
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the trading of claims against Lehman Brothers
Holdings Inc. surged in March in anticipation of the first
distribution made this month under the former investment bank's
Chapter 11 plan. Last month saw $5.8 billion of Lehman claims
change hands, compared with $3.2 billion in February, according to
data compiled from court records by SecondMarket Inc. In dollar
amount, Lehman was responsible for 94% of all claims where trades
were reported to the country's bankruptcy courts last month. In
February, Lehman accounted for 91% of all bankruptcy claim trades.
According to the report, MF Global Inc., the bankrupt commodities
broker, came in second place in March with $325.8 million in
reported trades. The MF Global trades represented 5.6% of
Lehman's in amount.
In number of trades, second place was occupied by AMR Corp., the
parent of American Airlines Inc. AMR's 135 trades were 14% of
Lehman's in number.
In the past year, more than $35.7 billion in face amount of Lehman
claims changed hands. MF Global supplanted Mesa Air Group Inc. in
second place with $337.1 million in traded claims during the
period, compared with Mesa's total of $329.4 million in traded
claims, SecondMarket 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)
LEHR CONSTRUCTION: Seeks Approval of Bloomingdale Settlement
------------------------------------------------------------
Jonathan L. Flaxer, the chapter 11 trustee for the estate of Lehr
Construction Corp., asks the Bankruptcy Court for an order
authorizing and approving the Settlement Agreement and General
Release with Bloomingdale Properties, Inc.
On Nov. 7, 2011, the Trustee, on behalf of the Debtor, commenced
an action entitled Flaxer v. Bloomingdale Properties, Inc., Adv.
Pro. No. 11-ap-02803, against Bloomingdale Properties for
construction services rendered to Bloomingdale Properties by the
Debtor in the amount of $39,417.
Bloomingdale Properties has raised several possible defenses to
the Action, including (a) a right to setoff, in the amount of
$19,734, due to credits owed by the Debtor to Bloomingdale
Properties related to the Debtor's construction work, and (b) an
offset for Bloomingdale Properties' costs, in the approximate
amount of $20,000, to purportedly fix construction work originally
completed by the Debtor.
As a result of settlement discussions, the parties have agreed to
settle the Action. The key terms of the Agreement include:
A. Bloomingdale Properties will issue payment in the amount
of $15,000 to settle the Action;
B. Payment of the Settlement Amount is contingent upon and
subject to the entry of an order approving the Agreement
by the Bankruptcy Court;
C. The Trustee will terminate the Action by filing a
Stipulation of Dismissal with Prejudice; and
D. The Trustee, on behalf of the Debtor, and Bloomingdale
Properties, on the other hand, agree to mutual releases.
Although the Trustee asserted a claim in the amount of $39,417.02
after further consultation of the Debtor's books and records, the
Trustee believes that Bloomingdale Properties may have a right to
setoff, which would reduce the unpaid amount to $19,683. The
Trustee believes that the Debtor's claim for this remaining amount
is meritorious, and, further, that Bloomingdale Properties'
asserted offset is not a meritorious defense. Nevertheless,
litigation inherently involves at least some measure of risk.
That said, the Debtor is settling for approximately 76% of the
possible recovery from Bloomingdale Properties. Accordingly, in
the Trustee's view, the Settlement Amount represents a reasonable
and fair recovery for the Estate, particularly in light of the
fact that such amount would be recovered prior to the incursion of
continued litigation expenses on the part of the Estate.
Additionally, the Trustee submits that the parties negotiated the
Agreement in good faith. Further, the releases contained within
the Agreement are reasonable and limited to claims solely relating
to services provided by the Debtor to Bloomingdale Properties.
About Lehr Construction
New York-based Lehr Construction Corp. was founded in 1979. It
specializes in interior construction and serves clients mainly
throughout the New York metropolitan area. It serves as
construction manager and general contractor for its clients
Lehr filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y.
Case No. 11-10723) on Feb. 21, 2011. James A. Beldner, Esq., at
Cooley LLP, serves as the Debtor's bankruptcy counsel. The Debtor
estimated its assets and debts at $10 million to $50 million.
Jonathan Flaxer is the Chapter 11 Trustee for Lehr Construction.
He is represented by Douglas L. Furth, Esq., at Goldenbock Eiseman
Assor Bell & Peskoe LLP, in New York. Wolf Haldenstein Adler
Freeman & Hertz serves as conflicts counsel to the trustee.
Tracy Hope Davis, the U.S. Trustee for Region 2, appointed five
creditors to serve on the Official Committee of Unsecured
Creditors in the Debtor's case.
LEHR CONSTRUCTION: Wants to Hire Vaughn Woodwork as Expert
----------------------------------------------------------
Jonathan L. Flaxer, the chapter 11 trustee for the estate of Lehr
Construction Corp. asks the Bankruptcy Court for an order
authorizing the retention of Vaughn Woodwork Consultants as a
testimonial expert in connection with an adversary proceeding
regarding the adequacy of the work performed by Metropolitan/NJS
Architectural Woodwork. The Trustee seeks to retain VWS to
inspect the wood veneer paneling, provide an expert report and
expert testimony, if necessary regarding the work.
The Debtor was previously hired as general contractor on a
construction project at the offices of the National Basketball
Association located at 645 Fifth Avenue in New York City.
Metropolitan was sub-contracted to provide and install wood veneer
paneling on each of several floors in the Building.
Although the Adversary Proceeding is in its preliminary stages,
the Trustee needs to retain VWS immediately because the NBA may
seek to replace the wood veneer paneling in the near future. The
Trustee needs to retain VWS now to complete the inspection prior
to the NBA removing the wood paneling.
VWS has the necessary background and experience to provide an
expert opinion on the work. VWS is a member of the Architectural
Woodwork Institute, which is a professional group comprised of the
top woodworking industry professionals as well as the governing
body for credentialing the woodworking industry's best practices.
VWS is recommended specifically for consulting and inspections of
woodwork. VWS has been retained as an expert in connection with
other woodwork-related litigations. The Trustee believes that VWS
is well qualified to provide an expert opinion concerning the
Work.
VWS will inspect the work (i.e., the wood veneer paneling) and
will then prepare an expert report discussing whether the Work
complied with industry standards. VWS will also provide testimony
concerning his report, if necessary during the course of these
proceedings. If VWS needs to provide additional reports or
additional services, the Trustee will supplement this Application.
The Trustee intends to pay VWS $1,260 per day plus expenses for
the inspection of the Work, and $120 per hour for all other
activities, including preparation of the Report. VWS estimates
that the total cost for the inspection and the Report is
approximately $2,500. If expert testimony is needed in connection
with the Adversary Proceeding, VWS will be paid the lesser of a
daily rate of $1,560 or an hourly rate of $150 for its testimony,
including time preparing for its testimony. In light of the
recovery sought from Metropolitan, the Trustee believes that the
compensation to be paid to VWS is reasonable. Further, the
Trustee has been informed that the compensation sought is
reasonable within the industry for the services to be provided.
To the best of the Trustee's knowledge, the Firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Lehr Construction
New York-based Lehr Construction Corp. was founded in 1979. It
specializes in interior construction and serves clients mainly
throughout the New York metropolitan area. It serves as
construction manager and general contractor for its clients
Lehr filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y.
Case No. 11-10723) on Feb. 21, 2011. James A. Beldner, Esq., at
Cooley LLP, serves as the Debtor's bankruptcy counsel. The Debtor
estimated its assets and debts at $10 million to $50 million.
Jonathan Flaxer is the Chapter 11 Trustee for Lehr Construction.
He is represented by Douglas L. Furth, Esq., at Goldenbock Eiseman
Assor Bell & Peskoe LLP, in New York. Wolf Haldenstein Adler
Freeman & Hertz serves as conflicts counsel to the trustee.
Tracy Hope Davis, the U.S. Trustee for Region 2, appointed five
creditors to serve on the Official Committee of Unsecured
Creditors in the Debtor's case.
LEHR CONSTRUCTION: Can Hire Moshie Solomon for N.J. Litigation
--------------------------------------------------------------
The Bankruptcy Court has authorized Jonathan L. Flaxer, as Chapter
11 trustee for the estate of Lehr Construction Corp., to retain
the Law Offices of Moshie Solomon, P.C., as his special counsel.
As reported in the Troubled Company Reporter on Feb. 23, 2012,
the Solomon Firm will represent the Trustee as New Jersey
counsel. The Solomon Firm will coordinate with the Trustee's
general counsel, Galenbock Eiseman Assox Bell & Peskoe LLP, to
avoid duplication of effort.
The Trustee has selected the Solomon Firm to represent him as New
Jersey counsel in litigation captioned Lehr Construction Corp. v.
Kathy S. Chatterton, et al., Case Adv. No. 08-02502 (NLW), which
the Debtor commenced in the United States Bankruptcy Court for the
District of New Jersey prior to the Petition Date. The Chatterton
Litigation is an asset of the Estate that the Trustee intends to
prosecute for the benefit of the Estate and its creditors. The
New Jersey Litigation is bankruptcy-related litigation that is
related to a Chapter 7 case captioned In re T2, Inc. Case No. 06-
20572 (NLW) that is also pending in the New Jersey Bankruptcy
Court.
Douglas L. Furth, Esq., of Galenbock Eiseman Assox Bell & Peskoe
LLP, tells the Court that it is necessary for the Trustee to
retain New Jersey counsel.
The Trustee said Moshie Solomon, Esq., has the necessary
background and experience to provide effective local counsel
representation in the New Jersey Litigation. He is admitted as an
attorney-at-law of the State of New Jersey and is admitted to
practice before the United States District Court far the District
of New Jersey.
Mr. Solomon is an experienced bankruptcy practitioner who
concentrates his practice in bankruptcy, civil litigation, and
general corporate matters. He has experience representing
trustees in Chapter 7 and Chapter 11 cases.
To the best of the Trustee's knowledge, the Solomon Firm does not
have any connection with, or any interest adverse to, the Debtor,
its creditors, any other party in interest or their respective
attorneys and accountants.
About Lehr Construction
New York-based Lehr Construction Corp. was founded in 1979. It
specializes in interior construction and serves clients mainly
throughout the New York metropolitan area. It serves as
construction manager and general contractor for its clients
Lehr filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y.
Case No. 11-10723) on Feb. 21, 2011. James A. Beldner, Esq., at
Cooley LLP, serves as the Debtor's bankruptcy counsel. The Debtor
estimated its assets and debts at $10 million to $50 million.
Jonathan Flaxer is the Chapter 11 Trustee for Lehr Construction.
He is represented by Douglas L. Furth, Esq., at Goldenbock Eiseman
Assor Bell & Peskoe LLP, in New York. Wolf Haldenstein Adler
Freeman & Hertz serves as conflicts counsel to the trustee.
Tracy Hope Davis, the U.S. Trustee for Region 2, appointed five
creditors to serve on the Official Committee of Unsecured
Creditors in the Debtor's case.
LEVI STRAUSS: Moody's Affirms 'B1' CFR, Rates Sr. Notes 'B2'
------------------------------------------------------------
Moody's Investors Service affirmed Levi Strauss & Co ("LS&Co) B1
Corporate Family and Probability of Default Ratings. Moody's also
assigned a B2 rating to the company's proposed $350 million senior
unsecured notes due 2022 and affirmed the B2 ratings of the
company's other series of unsecured debt. Proceeds from the new
notes will be used to tender for the company's $350 million senior
unsecured notes due 2016 and for general corporate purposes. The
rating assigned to the proposed notes is subject to receipt and
review of final documentation.
The following ratings were affirmed:
Corporate Family and Probability of Default Ratings at B1
$325 million senior unsecured term loan due 2014 at B2
$350 million senior unsecured notes due 2016 at B2 (*)
EUR 300 million senior unsecured notes due 2018 at B2
$525 million senior unsecured notes due 2020 at B2
(*) The company has launched a tender for these notes, and Moody's
expects to withdraw the rating on this issue when redeemed
The following ratings were assigned:
$350 million senior unsecured notes due 2022 at B2 (LGD 4 69%)
Ratings Rationale
Levi Strauss & Co.'s (LS&Co) B1 Corporate Family Rating reflects
the company's negative trends in operating margins reflecting
inconsistent execution as well as input cost pressures. The
ratings also reflect the company's still significant debt burden,
which has been increasing due to the company's continued
investment in its own retail stores and its sizable underfunded
pension. Debt/EBITDA (incorporating Moody's standard analytical
adjustments) was 5.1 times for the LTM period ending 2/26/2012.
The rating take into consideration the company's significant
global scale, with revenues near $5 billion, its operations in
over 110 countries and the ownership of the iconic Levi's
trademark.
The rating outlook is stable. Moody's believes Levi's earnings are
likely to remain under pressure in early 2012, primarily as cost
of goods sold (related to high cotton prices) remain elevated.
Moody's expects the company will benefit beginning in the latter
part of 2012 from lower cost of goods, mostly related to cotton,
and from more conservative inventory purchases. Further as cotton
costs fall, Moody's expects the company will be able to reverse a
meaningful portion of its investment in working capital made over
the past year. This should enable the company to generate more
meaningful cash flows, and Moody's expects free cash flow will be
used to reduce debt.
Ratings could be upgraded if the company is able to maintain
modestly positive growth in revenues, indicating the company is
maintaining market share, and if operating margins begin to
recover toward double-digit levels of recent years. The company
would also need to deleverage from current levels, while
maintaining balanced financial policies. Quantitatively if
operating margins approach the low double digit range, with
debt/EBITDA sustained below 4.5 times and EBITA/interest expense
exceeded 2.0 times, ratings could be upgraded.
Ratings could be downgraded if operating margins remain sustained
in the mid single digit range, indicating corrective actions taken
have not been sufficient to reverse recent negative trends. In
view of weak performance and still high debt burden there is no
material capacity for more aggressive financial policies (though
the current rating contemplates dividends around recent levels).
Quantitatively, ratings could be downgraded if debt/EBITDA
exceeded 5.5 times or EBITA/interest fell below 1.5 times.
Additionally, ratings could be downgraded if the company's
currently solid liquidity profile were to materially erode.
The B2 (LGD 4, 69%) rating for the company's senior unsecured
notes and term loan is one notch lower than the company's B1
Corporate Family Rating reflecting these notes' subordination to
the company's secured $850 million revolving credit facility. In
addition, the notes are legally obligations of Levi Strauss & Co.,
the ultimate parent company, and do not benefit from upstream
guarantees from the company's operating subsidiaries. As a result
the notes effectively rank junior to a significant level of
operating company liabilities in a default scenario.
The principal methodology used in rating Levi Strauss & Co. was
the Global Apparel Industry Methodology published in May 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.
Levi Strauss & Co. designs and markets jeans, casual wear and
related accessories under the "Levi's", "Dockers", "Signature by
Levi Strauss & Co." and "Denizen" brands. The company sells
product in more than 110 countries through chain retailers,
department stores, online sites and franchised and company-owned
stores. As of February 26, 2012, the company operated 492 stores.
Reported LTM net revenues were $4.8 billion.
LEVI STRAUSS: Fitch Rates $350-Mil. Ten-Year Notes 'B+/RR4'
-----------------------------------------------------------
Fitch Ratings has assigned a rating of 'B+/RR4' to Levi Strauss &
Co. $350 million issue of 10-year notes. The proceeds will be
used to repurchase the company's $350 million of 8.875% notes due
April 2016. The Rating Outlook is Negative.
The rating reflects Levi's well-known brands, strong market
shares, and wide geographic diversity, balanced against soft
operating trends and continued high financial leverage. The
Negative Outlook reflects the difficulty in reversing the long-
term decline in Levi's operating margins and Fitch's expectation
for only gradual operating improvement beginning in the second
half of 2012 (2H'12).
Levi generated 6.2% constant currency top-line growth in fiscal
2011 (ending November), and 5% growth in the first quarter of
fiscal 2012, driven by expansion of the retail network and growth
of the Levi brand. Continued investment in the company's store
network and other brand-building initiatives should enable the
company to sustain low single-digit revenue growth going forward.
Levi's EBIT margins have been in decline for the past five years,
narrowing from 14.3% in 2006 to 7.4% in the 12 months ended Feb.
26, 2012, due to the global recession together with Levi's
investments in its products, advertising, and retail stores. The
surge in cotton costs also affected margins in 2011, as price
increases were not sufficient to offset these higher costs.
Cotton costs moderated in mid-2011, although the benefit of lower
costs will not flow through to the bottom line until 2H'12. Fitch
expects Levi's operating margins will stabilize and begin a
gradual recovery in the second half, with the potential for
further improvement beyond 2012 as the company manages its cost
structure more aggressively. Margin improvement will also require
improved productivity from the company's retail stores, which
could be more challenging.
Free cash flow (FCF) after dividends was negative $149 million in
2011, due primarily to growth in inventories and receivables, in
part reflecting higher cotton prices. FCF is expected to turn
positive in 2012 as working capital becomes a source of funds as
cotton prices moderate, and as margins begin to recover.
Levi has adequate liquidity, with $555 million in availability
under its revolver that expires in 2016, and $238 million in cash
on hand as of the first quarter. The maturity schedule is
manageable, with the nearest debt maturity (excluding bank
borrowings) being the $324 million term loan due 2014.
The revolver matures in September 2016, although the maturity
accelerates to December 2013 if the term loan has not been
refinanced by that date. Levi is expected to use FCF over the
next two years to partly pay down the term loan, and has the
option and capacity to roll the balance into the revolver,
minimizing refinancing risk.
Leverage (adjusted debt/EBITDAR) increased to 5.1 times (x) at the
end of the first quarter from 4.8x at year-end 2010, due to lower
EBITDA and an increase in debt levels. This is considered high
for the rating level given Levi's weak margin trends, though Fitch
expects leverage of around 5x at end-2012 as EBITDA starts to
recover and there is some debt repayment from FCF.
Fitch will consider revising the Rating Outlook from Negative to
Stable as there is evidence that Levi's operating margins are in a
sustained recovery, supported not only by lower cotton prices but
also tighter management of SG&A, leading to an improvement in
EBITDA to at least $500 million. Fitch would also expect to see
FCF turn positive, approaching $100 million annually, permitting a
reduction in debt levels, and driving financial leverage to below
5x.
Recovery Analysis
The 'B+/RR4' rating of the unsecured notes reflects an expected
recovery in a distressed scenario of 30%-50%.
The 'BB+/RR1' rating of the $850 million secured revolving credit
facility reflects its superior position in the capital structure,
secured by domestic inventories and receivables, as well as the
Levi trademark. The facility also benefits from upstream
guarantees from the domestic operating companies. These factors
lead to an expected recovery in a distressed scenario of 91%-100%.
Fitch currently rates Levi as follows:
Levi Strauss & Co.
-- IDR at 'B+';
-- $850 million secured revolving credit facility at 'BB+/RR1';
-- Senior unsecured term loan and notes at 'B+/RR4'.
The Rating Outlook is Negative.
LEVI STRAUSS: S&P Gives 'B+' Rating on $350-Mil. Senior Notes
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' rating (same
as the corporate credit rating) to San Francisco-based Levi
Strauss & Co.'s proposed $350 million senior unsecured notes due
2022. "We are also assigning our '4' recovery rating to the
proposed issue, indicating our expectation that lenders would
receive average (30% to 50%) in the event of a payment default.
The ratings are based on preliminary terms and conditions," S&P
said.
"The company has indicated that it plans to use proceeds from this
debt issuance to repay outstanding debt obligations, including the
company's $350 million senior notes due 2016. As such, we expect
debt levels to remain relatively unchanged at about $1.9 billion
following this offering," S&P said.
"The ratings on Levi Strauss reflect our view that the company's
financial profile continues to be 'aggressive,' particularly since
the company's balance sheet remains highly leveraged and we expect
cash flow protections measures to continue to be weak. In
addition, we continue to consider Levi Strauss' business risk
profile to be 'weak,' given its continuing participation in the
highly competitive denim and casual pants market, which is subject
to fashion risk and still-weak consumer spending, and our
expectation that the company's business focus will remain narrow.
We believe the company benefits from its strong, well-recognized
Levi's brand, long operating history, and distribution channel
diversity (both by retail customer and geography)," S&P said.
RATINGS LIST
Levi Strauss & Co.
Corporate credit rating B+/Stable/--
Ratings Assigned
Levi Strauss & Co.
Senior unsecured
$350 mil. notes due 2022 B+
Recovery rating 4
LIBERTY HARBOR: Ch. 11 Filings a Blow to City's Rebuilding Effort
-----------------------------------------------------------------
Antoinette Martin, writing for GlobeSt.com, reports that Peter
Mocco, the developer of the Liberty Harbor complex in Jersey City,
has filed for Chapter 11 bankruptcy protection in what he tells
GlobeSt.com as a strategic move to break up a court logjam over
claims against the property so he can settle and move ahead with
construction.
The report relates Jersey City Redevelopment Agency chief Robert
Antonicello responded to the bankruptcy filing with fire and fury,
insisting that Mr. Mocco's move is an unconscionable blow to the
city's rebuilding effort and will have "tragic consequences" for
unpaid contractors.
According to the report, Mr. Antonicello said numerous small
construction businesses, architects and other operators listed as
debtors in the bankruptcy filing will be "crushed" and some will
never recover.
The report also notes Mr. Mocco said: "We are in this pickle for
only one reason: The JCRA handled the Kerrigan eminent domain case
from soup to nuts."
The report recounts the Kerrigan family of Jersey City, whose
Jersey Avenue property was seized by the city under its 'eminent
domain' authority in 2004 to add to the sprawling, 28-block,
80-acre Liberty Harbor site, is owed the largest debt --
$21 million -- listed in the bankruptcy filing.
The Kerrigans sued the JCRA and won $18.1 million in a jury trial
in compensation last year, with interest of $287 per day. The
report recounts the JCRA argues that its redevelopment agreement
with Mr. Mocco explicitly makes him liable for the debt, and it
has sued him in turn. Mr. Mocco says his attorneys are already
trying to work out a settlement with the Kerrigans. But the
parties were blocked from settling by a prior claim against
Liberty Harbor filed back in 1999 by lawyer/broker James Licata,
and still pending in Essex County Superior Court.
GlobeSt.com relates that, according to published reports, four
contractors had sued Mr. Mocco's companies for various amounts
several years ago, and others said at the time they were
continuing to work although paychecks had stopped coming. Those
contractor debts were evidently folded into the Chapter 11 filing.
About Liberty Harbor
Jersey City, New Jersey-based Liberty Harbor Holding, LLC, along
with two affiliates, sought Chapter 11 protection (Banrk. D. N.J.
Lead Case No. 12-19958) in Newark on April 17, 2012. Liberty, as
of April 16, 2012, had total assets of $350.08 million, comprising
of $350 million of land, $75,000 in accounts receivable and $458
cash. The Debtor says that it has $3.62 million of debt,
consisting of accounts payable of $73,500 and unsecured non-
priority claims of $3,540,000. The Debtor's real property
consists of Block 60, Jersey City, NJ 100% ownership Lots 60, 70,
69.26, 61, 62, 63, 64, 65, 25H, 26A, 26B, 27B, 27D.
Affiliates that filed separate petitions are: Liberty Harbor II
Urban Renewal Co., LLC (Case No. 12-19961) and Liberty Harbor
North, Inc. (Case No. 12-19964).
Judge Novalyn L. Winfield presides over the case. Wasserman
Jurista & Stolz P.C. serves as the Debtors' counsel. The petition
was signed by Peter Mocco, managing member.
LIBERTY HARBOR: Updated Case Summary & 20 Largest Unsec. Creditors
------------------------------------------------------------------
Debtor: Liberty Harbor Holding, LLC
345 Tenth Street
Jersey City, NJ 07302
Bankruptcy Case No.: 12-19958
Chapter 11 Petition Date: April 17, 2012
Court: U.S. Bankruptcy Court
District of New Jersey (Newark)
Judge: Novalyn L. Winfield
Debtor's Counsel: Daniel Stolz, Esq.
WASSERMAN, JURISTA & STOLZ
225 Millburn Avenue, Suite 207
P.O. Box 1029
Millburn, NJ 07041-1712
Tel: (973) 467-2700
E-mail: dstolz@wjslaw.com
Scheduled Assets: $350,075,458
Scheduled Liabilities: $2,109,540
Affiliates that simultaneously filed Chapter 11 petitions:
Debtor Case No.
------ --------
Liberty Harbor II Urban Renewal Co., LLC 12-19961
Liberty Harbor North, Inc. 12-19964
Scheduled Assets $440
Scheduled Liabilities: $44,109,539
The petitions were signed by Peter Mocco, managing member.
A. A copy of Liberty Harbor North's list of its 20 largest
unsecured creditors filed together with the petition is available
for free at http://bankrupt.com/misc/njb12-19964.pdf
B. Liberty Harbor's List of Its 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Ken Parks Architects Trade Debt $933,053
360 Lexington Avenue
New York, NY 10017
Persistent Construction Trade Debt $349,740
58 Industrial Avenue
Fairview, NJ 07022
Brinkerhoff Environmental Services Trade Debt $185,183
1805 Atlantic Avenue
Manasquan, NJ 08736
Wall Stucco System, LLC. Trade Debt $173,850
Scannavino & Sons Plumbing Trade Debt $127,410
Inglese Architects Trade Debt $95,000
Flemington Department Store Trade Debt $93,467
Perkins Eastman Architects Trade Debt $69,086
Jomitti Iron Works Trade Debt $27,677
WJ DiCindio Trade Debt $15,000
Hoagland, Longo, Moran, Durst Trade Debt $15,000
& Solkas
Duany, Plater, Zyberk & Co. Trade Debt $11,274
Tim Haas Trade Debt $7,240
Summerville, Reading and Campbell Trade Debt $3,854
Smolin Lupin & Co. Trade Debt $1,650
Sokol, Behot & Fiorenzo Trade Debt $1,056
Experience Drywall, Inc. Trade Debt Unknown
Greater Construction Trade Debt Unknown
Hudson Natural Resources Trade Debt Unknown
Lomurro, Davison, Eastman & Munoz Trade Debt Unknown
LIBERTY HARBOR: Asks Court to Approve Wasserman Engagement
----------------------------------------------------------
Liberty Harbor Holding, LLC, seeks authority from the Bankruptcy
Court to employ Wasserman Jurista & Stolz P.C. in Millburn, New
Jersey, as its Chapter 11 counsel.
The Debtor has agreed to pay the firm $9,954 as retainer.
The firm's hourly rates are:
Robert B. Wasserman, Partner $525 per hour
Steven Z. Jurista, Partner $500 per hour
Daniel M. Stolz, Partner $500 per hour
Stuart M. Brown, Of counsel $450 per hour
Kenneth L. Moskowitz, Of counsel $450 per hour
Norman D. Kallen, Of counsel $450 per hour
Keith Marlowe, Of counsel $450 per hour
Leonard C. Walczyk, Partner $400 per hour
Michael McLaughlin, Partner $400 per hour
Scott S. Rever, Associate $375 per hour
Donald W. Clarke, Associate $250 per hour
Pamela Bellina, Paralegal $150 per hour
Lorrie L. Denson, Paraprofessional $150 per hour
Legal assistants $100 per hour
Daniel M. Stolz, Esq., a member at the firm, attests that the
members, shareholders, associates, officers and employees of the
firm do not hold an adverse interest to the Debtor's estate, do
not represent an adverse interest to the estate, and are
"disinterested persons," as that term is defined in Section
101(14) of the Bankruptcy Code.
About Liberty Harbor
Jersey City, New Jersey-based Liberty Harbor Holding, LLC, along
with two affiliates, sought Chapter 11 protection (Banrk. D. N.J.
Lead Case No. 12-19958) in Newark on April 17, 2012. Liberty, as
of April 16, 2012, had total assets of $350.08 million, comprising
of $350 million of land, $75,000 in accounts receivable and $458
cash. The Debtor says that it has $3.62 million of debt,
consisting of accounts payable of $73,500 and unsecured non-
priority claims of $3,540,000. The Debtor's real property
consists of Block 60, Jersey City, NJ 100% ownership Lots 60, 70,
69.26, 61, 62, 63, 64, 65, 25H, 26A, 26B, 27B, 27D.
Affiliates that filed separate petitions are: Liberty Harbor II
Urban Renewal Co., LLC (Case No. 12-19961) and Liberty Harbor
North, Inc. (Case No. 12-19964).
Judge Novalyn L. Winfield presides over the case. The petition
was signed by Peter Mocco, managing member.
LIBERTY HARBOR: Sec. 341 Creditors' Meeting Set for May 16
----------------------------------------------------------
The U.S. Trustee for Region 3 will convene a Meeting of Creditors
under 11 U.S.C. Sec. 341(a) in the Chapter 11 cases of Liberty
Harbor Holding, LLC, and its two affiliates, on May 16, 2012, at
10:00 a.m. at Suite 1401, One Newark Center.
Proofs of claim are due by Aug. 14, 2012.
About Liberty Harbor
Jersey City, New Jersey-based Liberty Harbor Holding, LLC, along
with two affiliates, sought Chapter 11 protection (Banrk. D. N.J.
Lead Case No. 12-19958) in Newark on April 17, 2012. Liberty, as
of April 16, 2012, had total assets of $350.08 million, comprising
of $350 million of land, $75,000 in accounts receivable and $458
cash. The Debtor says that it has $3.62 million of debt,
consisting of accounts payable of $73,500 and unsecured non-
priority claims of $3,540,000. The Debtor's real property
consists of Block 60, Jersey City, NJ 100% ownership Lots 60, 70,
69.26, 61, 62, 63, 64, 65, 25H, 26A, 26B, 27B, 27D.
Affiliates that filed separate petitions are: Liberty Harbor II
Urban Renewal Co., LLC (Case No. 12-19961) and Liberty Harbor
North, Inc. (Case No. 12-19964).
Judge Novalyn L. Winfield presides over the case. Wasserman
Jurista & Stolz P.C. serves as the Debtors' counsel. The petition
was signed by Peter Mocco, managing member.
LIGHTSQUARED INC: Creditors Unite, Hire White & Case Lawyer
-----------------------------------------------------------
Matthew Goldstein, writing for Reuters, reports that two people
familiar with the situation said a number of LightSquared debt
holders have joined together to retain bankruptcy attorney Thomas
Lauria, Esq., who heads White & Case's global restructuring group.
According to Reuters, the sources, who did not want to be
identified, said the creditors' group includes billionaire
activist investor Carl Icahn, hedge fund manager David Tepper and
investment firms Fortress Investment Group and Capital Research
and Management Company.
Reuters notes institutional investors own some of the $1.6 billion
in bank debt that LightSquared sold to raise money for its planned
wireless telecommunications network.
LightSquared is facing an April 30 deadline to renegotiate the
terms of the loan in order to head off a potential default that
would spur a bankruptcy filing.
Reuters says Mr. Lauria and his clients could not be reached for
comment. Reuters also relates the the two sources familiar with
Mr. Lauria's hiring said it was unclear whether the investors and
Falcone would be able to reach a deal to avert a default. The debt
holders are believed to own roughly half of the $1.6 billion of
LightSquared bank debt. Sources told Reuters the creditors are
interested in reducing Mr. Falcone's and Harbinger's equity stake
in the company.
The report says Phillip Falcone, whose Harbinger Capital Partners
owns roughly a 96% equity stake in LightSquared, declined to
comment.
Reuters notes LightSquared's recently filed financial statements
indicate the balance sheet has about $282 million in cash and
short-term investments against $1.85 billion in liabilities. The
financial statement lists about $453 million in debt payments due
by the end of 2012.
LightSquared has said there is "substantial doubt about our
ability to continue as a going concern."
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.
MACLAREN USA: Chapter 7 Trustee Seeks Documents
-----------------------------------------------
Stephanie Gleason, writing for Dow Jones' Daily Bankruptcy Review,
reports that Roberta Napolitano, the Chapter 7 Trustee of Maclaren
USA, is asking the Bankruptcy Court to compel the Company to
provide a slew of information from articles of incorporation to
Maclaren USA's check register. Ms. Napolitano didn't mention a
specific deadline for her request, but she did ask the court to
schedule a hearing on the matter.
The Trustee noted that Maclaren USA has given her access to a
storage unit that has "boxes of various paper books and records
arranged in no discernible order," but none of the boxes contain
records from after 2009.
Based on her initial review of records provided to her, according
to DBR, the Chapter 7 Trustee learned that Maclaren (HK) Ltd., the
organization that Maclaren USA had its distribution agreement
with, didn't renew a licensing agreement at the end of December
2010, after a 2009 recall. The Trustee noted that sales dropped
drastically in 2011 to $34,251 from over $20 million in 2010.
Despite this, the Company still paid its directors $126,755 in
2011. The Trustee also noted Maclaren (HK) Ltd. has begun
distributing its strollers through a company called Maclaren NA
Inc., "which shares at least one officer with the debtor."
The report also relates Ms. Napolitano questioned the creditors
mentioned in Maclaren USA's petition. Aside from the claim of
Netto Collections LLC and claims stemming from product liability
litigation, the other claims are from entities which may be
affiliates of the Debtor. The Trustee finds it necessary to
investigate the relationship between the Debtor and its potential
affiliates.
As for product-liability litigation, the report relates Ms.
Napolitano didn't directly address any of the issues in those
cases. However, if her investigation uncovers any improper
financial transfers, the money could be clawed back and made
available to creditors in the case, DBR says.
American Baby Products, Inc., doing business as Maclaren USA,
filed for Chapter 7 bankruptcy (Bankr. D. Conn. Case No. 11-52541)
on Dec. 29, 2011, listing under $50,000 in assets and between
$10 million to $50 million in debts. American Baby Products is
the U.S. unit of the high-end stroller manufacturer Maclaren. The
bankruptcy filing halted seven pending lawsuits against it.
The Debtor listed the parents of nine children as top unsecured
creditors with unknown claim amounts. The Debtor listed its
largest unsecured creditor, owed $13.1 million of the company's
total $15.9 million in liabilities, as Maclaren (HK) Limited,
Maclaren's Chinese subsidiary.
MARIANA RETIREMENT FUND: Governor to Pass Fund Withdrawal Bill
--------------------------------------------------------------
Haidee V. Eugenio at Saipan Tribune reports that Gov. Benigno R.
Fitial said last week that he will sign into law a bill allowing
non-retired members of the Northern Mariana Islands Retirement
Fund's defined benefit plan to withdraw up to 50% of their
contributions regardless of years of service and without penalty
or the need for them to quit their job.
According to the report, Gov. Fitial received the compromise
version of Speaker Eli Cabrera's (R-Saipan) House Bill 17-226 on
Tuesday, shortly before the Fund filed for Chapter 11 bankruptcy.
But some lawmakers and retirees said Thursday that even if the
governor signs the bill today or in the next few days, active
members may not withdraw their contributions because of the
restructuring.
The report relates the bill said the non-retired members can
apply for and make the withdrawals within 180 days of signing into
law. That 180 days is just about the time Fund officials expect
the pension agency to be under restructuring and giving out
contributions to active members won't be allowed during this
time.
Under the bill, the rest of the employee contributions to the Fund
will be rolled over to the defined contribution plan, the report
notes.
About Northern Mariana
The Northern Mariana Islands Retirement Fund --
http://www.nmiretirement.com/-- is a public corporation of the
Commonwealth of the Northern Mariana Islands that receives and
invests retirement contributions and pays certain benefits to or
on account of certain retirees of the Commonwealth government,
their survivors, and certain disabled persons.
The Fund, through its administrator Richard Villagomez, filed a
Chapter 11 bankruptcy petition in the U.S. District Court for the
Northern District of Mariana Islands in Saipan (Case No. 12-00003)
on April 17, 2012.
The Fund is represented by Brown Rudnick LLP and the Law Office of
Braddock J. Huesman, LLC.
The Fund said in court papers that the Chapter 11 filing was
precipitated by the discrepancy between the Debtor's current
ability to pay benefits to beneficiaries and the Debtor's current
obligations to those same beneficiaries. The Fund said it would
exhaust its cash by July 2014. It has been unable to collect a
$325 million judgment against the islands' government, and the
commonwealth decided to reduce contributions toward workers'
pensions.
As a result of continuous underfunding, which necessitated
withdrawing from its portfolio to cover funding shortfalls, the
value of the Fund's assets has fallen from $353,475,412 in 2009 to
its current level of $268,448,997, the Debtor's counsel has said.
The counsel also said the Fund is subject to liabilities (both
current and actuarial) totaling about $911 million.
MARIANA RETIREMENT FUND: U.S. Trustee Disputes Immunity Bid
-----------------------------------------------------------
Ferdie de la Torre at Saipan Tribune reports that the United
States Trustee asserts that the Northern Mariana Islands
Retirement Fund's request for a broad injunction essentially
granting the Fund and its employees immunity during the course of
its Chapter 11 bankruptcy petition is "problematic."
According to the report, assistant U.S. Trustee Curtis Ching told
the U.S. District Court for the Northern Mariana Islands during a
hearing that they don't believe it appropriate for the Fund to ask
for an order prohibiting unauthorized actions against the Fund's
employees and its board during bankruptcy proceedings. Taking
this position, however, does not mean the U.S. Trustee is
encouraging frivolous lawsuits that will distract from the
important work at hand, hamper the reorganization effort, and
further deplete the Fund's limited resources, the report quotes
the trustee as saying.
The Fund had asked the court to issue an injunctive relief against
all persons from taking any legal action against the Fund's board
and its employees during bankruptcy proceedings.
The report relates Curtis Ching said that rather than an order
that emphasizes certain portions of the automatic stay provisions,
the Fund should resort to more common methods of notifying parties
of the automatic stay in bankruptcy, such as notices of
bankruptcy, suggestions of bankruptcy, and informal letters.
Curtis Ching said the Fund retains its remedies for violations
of the stay. This bankruptcy court, Ching pointed out, can make
itself available on short notice if a violation of the stay
requires prompt remedial action, the report says.
U.S. Bankruptcy Court for the District of Hawaii Chief Bankruptcy
Judge Robert J. Faris agreed with the U.S. Trustee's position and
denied the Fund's motion.
About Northern Mariana
The Northern Mariana Islands Retirement Fund --
http://www.nmiretirement.com/-- is a public corporation of the
Commonwealth of the Northern Mariana Islands that receives and
invests retirement contributions and pays certain benefits to or
on account of certain retirees of the Commonwealth government,
their survivors, and certain disabled persons.
The Fund, through its administrator Richard Villagomez, filed a
Chapter 11 bankruptcy petition in the U.S. District Court for the
Northern District of Mariana Islands in Saipan (Case No. 12-00003)
on April 17, 2012.
The Fund is represented by Brown Rudnick LLP and the Law Office of
Braddock J. Huesman, LLC.
The Fund said in court papers that the Chapter 11 filing was
precipitated by the discrepancy between the Debtor's current
ability to pay benefits to beneficiaries and the Debtor's current
obligations to those same beneficiaries. The Fund said it would
exhaust its cash by July 2014. It has been unable to collect a
$325 million judgment against the islands' government, and the
commonwealth decided to reduce contributions toward workers'
pensions.
As a result of continuous underfunding, which necessitated
withdrawing from its portfolio to cover funding shortfalls, the
value of the Fund's assets has fallen from $353,475,412 in 2009 to
its current level of $268,448,997, the Debtor's counsel has said.
The counsel also said the Fund is subject to liabilities (both
current and actuarial) totaling about $911 million.
MARSH & MCLENNAN: Moody's Issues Summary Credit Opinion
-------------------------------------------------------
Moody's Investors Service issued a summary credit opinion on Marsh
& McLennan Companies, Inc. and includes certain regulatory
disclosures regarding its ratings. This release does not
constitute any change in Moody's ratings or rating rationale for
Marsh & McLennan Companies, Inc.
Moody's current ratings on Marsh & McLennan Companies, Inc. are:
Senior Unsecured (domestic currency) ratings of Baa2
Senior Unsecured Shelf (domestic currency) ratings of (P)Baa2
Subordinate Shelf (domestic currency) ratings of (P)Baa3
Preferred Shelf (domestic currency) ratings of (P)Ba1
Commercial Paper (domestic currency) ratings of P-2
Rating Rationale
Marsh & McLennan Companies, Inc. (NYSE: MMC - senior unsecured
debt Baa2, commercial paper Prime-2, stable outlook) is a global
professional service firm providing advice and solutions in the
areas of risk, strategy and human capital. The business is
organized into two segments: Risk and Insurance Services (Marsh
and Guy Carpenter) and Consulting (Mercer and Oliver Wyman Group).
MMC has approximately 52,000 employees serving a diverse range of
clients in more than 100 countries. The worldwide client base
includes corporations in numerous industries, small and mid-sized
businesses, governments and other public entities, not-for-profit
organizations and individuals.
MMC's ratings reflect its strong market presence in global
insurance brokerage, its broad product and geographic
diversification, and its expertise in providing complex risk
management solutions. These strengths are tempered by the
company's relatively weak, but improving, operating margins,
potential liabilities arising from errors and omissions, and the
slow pace of economic growth, particularly in the US and Europe.
MMC issued $250 million of five-year senior unsecured notes in
March 2012, using net proceeds to repay a like amount of maturing
debt.
Rating Outlook
The stable rating outlook reflects Moody's view that MMC will
remain a global leader in insurance brokerage and consulting.
What to watch for:
- Gradual improvement in organic growth as the economy slowly
recovers
- Improvement in leverage and coverage metrics through growth in
EBITDA
What Could Change the Rating - Up
Factors that could lead to an upgrade include:
- Net profit margin approaching 10%
- Adjusted (EBITDA - capex) coverage of interest above 7x
- Adjusted debt-to-EBITDA ratio below 2.5x
What Could Change the Rating - Down
Factors that could lead to a downgrade include:
- Net profit margin below 6%
- Adjusted (EBITDA - capex) coverage of interest below 4x
- Adjusted debt-to-EBITDA ratio above 3.5x
The principal methodology used in this rating was Moody's Global
Rating Methodology for Insurance Brokers and Service Companies
published in February 2012.
MC2 CAPITAL: Chapter 11 Plan Contemplates Asset Sale
----------------------------------------------------
MC2 Capital Partners LLC has filed a plan of reorganization and
accompanying disclosure statement.
The Plan has two components. The first is to turn its illiquid,
clouded real property into money. The Debtor will sell its real
property for $36,300,000, all cash, or overbid, pursuant to its
rights under Bankruptcy Code Sections 363(f) and/or 1123(a)(5)(D).
The second is to divide the sale proceeds among the various
creditor classes and constituencies in a manner which is fair,
avoids further wasteful, costly, and destructive litigation in
State Court, and is reflective of the likely outcome in State
Court, years hence, after the expenditure of hundreds of thousands
of dollars in attorney's fees by all concerned.
The Debtor's owners will receive none of this money and their
rights as LLC members will be cancelled.
Determination of the amounts due to Creditors will be after
reconciliation of the amount claimed by the Creditor in question
with the Debtor' business records. In the event of a dispute, the
Debtor will file objections to the allowance of the claim in
question.
Meanwhile, the Bankrupcy Court has approved MC2 Capital's Motion
for Authority to Incur Priority Unsecured Debt.
About MC2 Capital Partners
MC2 Capital Partners, LLC, based in San Rafael, California, filed
for Chapter 11 bankruptcy (Bankr. N.D. Calif. Case No. 11-14366)
on Dec. 1, 2011. Judge Alan Jaroslovsky presides over the case.
In its petition, the Debtor estimated $10 million to $50 million
in assets and $50 million to $100 million in debts.
The Debtor's Manager is Monahan Pacific Corporation. Thomas
Monahan -- an officer and director of Monahan Pacific Corporation
and the holder of 95% of the LLC equity interests in the Debtor --
signed the petition. He has been appointed as responsible
individual for the Debtor.
MERCANTIL COMMERCEBANK: Fitch Holds Issuer Default Rating at 'BB'
-----------------------------------------------------------------
Fitch Ratings has affirmed Mercantil Commercebank Florida
Bancorp's (MCFB) and Mercantil Commercebank, N.A.'s (MCB) long-
and short-term Issuer Default Ratings at 'BB' and 'B',
respectively. The Rating Outlook is revised to Stable from
Negative, reflecting improvements in asset quality, earnings and
solid capital levels and good liquidity profile. Through its
domestic parent, Mercantil Commercebank Holding Corp. (MCH), the
bank is beneficially owned by Mercantil Servicios Financerios
(MSF), one of the largest financial institutions based in
Venezuela.
During 2011, the company returned to profitability after reporting
three years of net losses. Results benefited from reduced
provisioning needs, gain on sales of securities and a rise in fee
revenue from private wealth management business. MCFB's earnings
measures remain modest with ROA at 0.38% for the fourth quarter of
2011 (4Q'11). Fitch also analyzes the company's earning measures
on a risk-adjusted basis given the company's large investment
securities book. RORWA improved to 0.67% for 4Q'11, while
PPNR/RWA and PPNR/NCOs were solid at 1.72% and 1.71% and in-line
with current ratings.
Although non-performing loans remain elevated, credit trends have
improved year-over-year as NCOs, NPAs, and the inflows of
criticized/classified assets all continue to decline. Fitch
expects future credit costs to be manageable given the continued
reduction in overall balances in the riskier segments of CRE and
construction portfolios. Since 2008, MCFB has been reducing its
real estate exposure and shifting it to commercial lending. At
Dec. 31, 2011, real estate lending accounted for 35% of loans
compared to 60% in 2008 while commercial and industrial loans
(C&I) now represents 40% compared to 30% in 2008. Total CRE
(including construction)/total risk-based capital was reduced to
169% in 2011 compared to 260% in 2008.
Fitch believes performance in 2012 will likely be modestly higher
than the previous year. MCFB should see some benefits from new
loans originated at higher yields with the growing C&I lending
segment. Additionally, the company expects to increase its
purchase of syndicated loans, which should also offset the impact
to margin pressures from the investment securities portfolio.
Although problem loans are expected to remain elevated, Fitch does
not expect a significant rise in provisioning expense given
overall asset quality trends. However, adverse trends in the
local real estate sector could clearly put upward pressure on
MCH's non-performing assets, which may dictate increased
provisions.
Fitch considers capital at the bank level as providing some
cushion to the risks inherent in the bank's business mix. The
company's Fitch Core Capital/RWA ratio stood at 14.43% and Tier 1
Common stood at 9.64%, which is deemed appropriate given the high
level of NPLs that may lead to continued net charge-offs. Over
the years, capital ratios have been augmented by capital
contributions from MSF (about $250 million for 2008-2010).
Although MSF has demonstrated its willingness to provide capital
support to MCFB and ultimately to MCB, Fitch assumes that
additional contributions from MSF are unlikely over the near term
and cannot be relied upon. Given the expectation of modest
operating performance at the bank level, capital is expected to
remain solid to support the bank's risk profile.
MCFB's balance sheet is highly liquid as the combination of cash,
cash equivalents and investment securities represented about 32%
of total assets on Dec. 31, 2011 and the loan-to-deposit ratio was
84%. The investment portfolio is highly-rated, short in duration
and, to date, has had minimal negative market valuation issues.
In most recent periods, MCFB's C&I portfolio grew by 11% compared
to the previous year. Although Fitch view's the diversification
in the loan mix as a positive, the industry in general has also
been growing C&I loans and competition is fierce. In general,
Fitch is concerned with the potential for credit quality
deterioration since performance for these loans is better than
historical averages. Offsetting, MCFB's targeted client base is
more niche, which gives the company an opportunity to leverage its
expertise in Latin America as well as in oil-related industries.
Additionally, the bank also engages in syndicated lending through
participations in large lending arrangements to domestic corporate
borrowers. Participations are generally entered into with the
initial lending group (not purchased in the secondary market) and
are for clients in the bank's targeted markets.
On a stand-alone basis at the holding company, MCFB's liquidity is
considered ample. The holding company maintained its own source
of liquidity with cash and investment securities totaling $29
million at Dec. 31, 2011. Annual MCFB (parent company only)
interest expense totals approximately $7.8 million providing about
3.7 times (x) coverage. The only debt outstanding at MCFB
consists of $118.1 million of trust preferred securities
(unrated), issued privately and through pools, as of Dec. 31,
2011.
Ratings are considered to be at the high-end of its potential
range given current performance is in-line with similarly rated-
peers. Should MCFB produce metrics that outperform peers, Fitch
would review current ratings. In Fitch's analysis for the rating
of MCFB, the U.S. bank subsidiary of MSF, the criteria noted in
'Rating Foreign Banking Subsidiaries Higher than Parent Banks' was
applied.
Factors that could trigger negative rating action would be a
declining trend in earnings and a reversal of recent improvements
to credit performance. Although not anticipated, reputational
risk events is also a concern given MCH's ultimate parent is
domiciled in Venezuela. To date, MCH's has actually benefited
from its Mercantil brand, despite volatility in Venezuela,
demonstrated by its stable deposit base.
Mercantil Commercebank Florida Bancorp reported $6.7 billion of
total assets and $601 million in total equity on Dec. 31, 2011.
The bank has 14 branches in the Miami-Dade County and two in
Broward County, one in New York and one in Houston.
Fitch has affirmed the following ratings. The Outlook has been
revised to Stable:
Mercantil Commercebank Florida BanCorp.
-- Long-term IDR at 'BB';
-- Short-term IDR at 'B';
-- Viability rating at 'bb';
-- Support at '5';
-- Support floor at 'NF.;
Mercantil Commercebank, N.A.
-- Long-term IDR at 'BB';
-- Long-term deposits t 'BB+';
-- Short-term IDR at 'B';
-- Short-term deposits at 'B';
-- Viability at 'bb';
-- Support at '5';
-- Support Floor at 'NF'.
MERITOR INC: Moody's Rates New Senior Secured Facilities 'Ba2'
--------------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to Meritor, Inc.'s
new $529 million senior secured bank credit facilities. The
amended senior secured $429 million revolving credit facility will
replace the company's existing revolving credit facility and push
out approximately $415 million of maturities to 2017 from 2014,
subject to certain conditions. The new senior secured term loan
will provide additional liquidity to the company's balance sheet.
In a related action Moody's affirmed Meritor's Corporate Family
Rating at B2 and other ratings as detailed below. The rating
outlook remains stable.
Ratings assigned:
$429 million amended senior secured revolving credit facility
maturing 2017, Ba2 (LGD1, 6%);
$100 million senior secured term loan maturing 2017, Ba2 (LGD1,
6%);
Ratings affirmed:
Corporate Family Rating, B2;
Probability of Default Rating, B2;
Senior unsecured notes, B3 (LGD4, 60%);
Shelf unsecured notes, to (P)B3 (LGD4, 60%)
SGL-3, Speculative Grade Liquidity Rating;
Ratings Rationale
Meritor's B2 Corporate Family Rating (CFR) reflects the company's
high leverage and modest free cash flow generation during a period
of recovering commercial vehicle demand. For the LTM period ending
December 31, 2011, Debt/EBITDA was approximately 6.2x and free
cash flow/Debt was approximately negative 3.7% (as adjusted by
Moody's). Meritor has increased its usage of factoring lines in
order to support higher levels of working capital and capital
reinvestment to support growth, resulting in continued high levels
of debt. North American commercial vehicle demand is expected to
continue to improve through 2012. As such, Meritor is positioned
to benefit from this growth with about 48% total revenues derived
from the region. Expected margin improvement should help provide
cash flow for increasing working capital needs.
The amended revolving credit facility replaces Meritor's existing
revolving credit facility and the new term loan provides
additional liquidity to the company's balance sheet. The amended
agreement, among other items, extends maturity of the agreement
from January 2014 to April 2017; provided, however, that (i) if
the aggregate outstanding principal amount of Meritor's 8.125%
senior notes due 2015 is greater than $100 million on June 1,
2015, then the credit facility will instead mature on June 10,
2015, and (ii) if (x) the aggregate outstanding principal amount
of Meritor's 4.625% convertible notes due 2026 is greater than
$100 million on November 1, 2015 and (y) the conversion price for
such convertible notes is greater than Meritor's then current
common equity price, then the credit facility will instead mature
on November 15, 2015.
The stable rating outlook incorporates the expectation that
Meritor's profitability and credit profile should continue to
demonstrate gradual improvement over the near-term with improving
commercial vehicle demand, largely in its North American
operations. Meritor's ability to improve its profitability
sufficiently to demonstrate that it is on a path to reduce debt
levels, inclusive of factoring lines, could positively affect the
company's outlook.
Future events that have the potential to improve Meritor's ratings
include improving profit margins and resulting credit metrics as
production levels in the company's global commercial vehicle end-
markets recover, resulting in prospects for positive free cash
flow generation, EBIT/interest improving to above 2.0x, and
Debt/EBITDA approaching 4.5x.
Future events that have the potential to drive Meritor's outlook
or ratings lower include a deterioration in global commercial
vehicle production without offsetting restructuring actions, or
deteriorating liquidity. Lower ratings could arise from the above
considerations, or if EBIT/Interest coverage is sustained at or
below 1.5x times.
The principal methodology used in rating Meritor, Inc. was the
Global Automotive Supplier Industry Methodology published in
January 2009. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
Meritor, Inc., headquartered in Troy, MI, is a global supplier of
a broad range of integrated systems, modules and components
serving light vehicles, commercial trucks, trailers, and specialty
original equipment manufacturers, as well as certain aftermarkets.
Revenues for fiscal year-end September 2011 were $4.6 billion.
MERITOR INC: S&P Assigns 'BB-' Rating on $429-Mil. Credit Facility
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' issue-level
rating to Meritsor Inc.'s amended and restated $429 million
revolving credit facility and a new $100 million term loan A due
2017. "At the same time, we assigned our recovery rating of '1' to
both the revolving credit facility and term loan, indicating our
expectation that lenders would receive very high (90% to 100%)
recovery in the event of a payment default," S&P said.
"On April 23, 2012, Meritor amended and restated its credit
agreements. The revised credit agreement reduces the commitment
under the revolving credit facility to $429 million through
January 2014 and then to $415 million through April 2017. If the
total outstanding principal of the company's 8.125% senior notes
due 2015 is more than $100 million on June 1, 2015, then the
credit facility will expire on June 10, 2015. Additionally, if the
total principal outstanding of the company's 4.625% convertible
notes due 2026 is more than $100 million on Nov. 1, 2015, and if
the conversion prices are more than the common equity price, then
the credit facility will expire on Nov. 15, 2015. The agreement
also establishes a $100 million term loan, modifies various
covenants, and resets specific investment and debt baskets, among
other things. Meritor will use the proceeds from this refinancing
for general corporate purposes," S&P said.
"The credit facilities are secured by a perfected first-priority
security interest in substantially all of the assets of the
domestic loan parties, including all of the outstanding shares of
the capital stock of the domestic loan parties' subsidiaries,
first-tier foreign subsidiaries (subject to the 65% limitation),
and joint ventures," S&P said.
"The 'B' corporate credit rating and positive outlook on Troy,
Mich.-based commercial truck part supplier Meritor reflects its
significant leverage and substantial exposure to the highly
cyclical commercial-vehicle markets," S&P said.
RATINGS LIST
Meritor Inc.
Corporate Credit Rating B/Positive/--
New Ratings
Meritor Inc.
$429 mil revolver BB-
Recovery Rating 1
$100 mil term loan A due 2017 BB-
Recovery Rating 1
MF GLOBAL: CIEBA Lauds Senate Banking Committee for Probe
---------------------------------------------------------
The organization representing over 100 of America's largest
corporate pension funds praised the U.S. Senate Committee on
Banking, Housing & Urban Affairs for taking up the matter of the
collapse of MF Global.
"We commend Chairman Tim Johnson and Ranking Member Richard Shelby
for holding a hearing on the 'Lessons Learned and Policy
Implications' following the collapse of MF Global," said Deborah
Forbes, Executive Director of Committee on Investment of Employee
Benefit Assets, or CIEBA.
To protect pension plans from another MF Global-type crisis, CIEBA
believes that the U.S. Commodity Futures Trading Commission (CFTC)
needs to quickly propose regulations which permit full segregation
of pension plan futures, and cleared swaps margin in third-party
safekeeping accounts which cannot be accessed by a futures
commission merchant (FCM).
"The hearing shows the critical need for greater protection of
customers' futures and cleared swaps margin," said Forbes. In
January, the CFTC stated that the agency would move "with
dispatch" to propose additional recommendations for safeguarding
customer collateral. In light of MF Global, CIEBA is again urging
the CFTC to quickly propose regulations which require FCMs to give
customers the right to elect full physical segregation of their
margin on futures and cleared swaps. "CIEBA welcomes additional
auditing and reporting requirements like those suggested at
today's hearing," Forbes noted. "However, MF Global was audited,
even close to its bankruptcy and yet these audits did not protect
customers.
"We believe any solution should provide for structural protections
against customer margin being tied up in a FCM bankruptcy such as
MF Global and against FCMs gaining improper access to client
funds, and should also provide transparent recordkeeping of
customer assets by an independent, third party custodian. These
types of protections were not available for MF Global's customers,
many of whom have been tied up in MF Global's bankruptcy since
last October."
Forbes noted that "pension plans and mutual funds currently can
have their uncleared swap margin held with an independent third
party custodian in an account not accessible by a dealer unless
the customer defaults but will lose these protections unless the
CFTC quickly acts to provide similar protections for cleared swap
margin."
"Swaps customers, particularly pension plans, need to be assured
that their cleared swap collateral is protected," said Forbes.
"The new CFTC clearing rules should increase protections for
pension assets--not put them at greater risk."
About Cieba(R)
The Association for Financial Professionals (AFP) Committee on
Investment of Employee Benefit Assets (CIEBA) is a nationally
recognized voice for those corporate executives who are
responsible for the investment funds of employee benefit plans
regulated under the Employee Retirement Income Security Act of
1974 (ERISA).
CIEBA is composed of more than 100 of the largest corporate
pension funds in the U.S. with more than $1.5 trillion in
retirement plan assets under management on behalf of more than 17
million plan participants and beneficiaries.
About MF Global
New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/
-- was one of the world's leading brokers of commodities and
listed derivatives. MF Global provided access to more than 70
exchanges around the world. The firm also was one of 22 primary
dealers authorized to trade U.S. government securities with the
Federal Reserve Bank of New York. MF Global's roots go back
nearly 230 years to a sugar brokerage on the banks of the Thames
River in London.
MF Global Holdings Ltd. and MF Global Finance USA Inc. filed
voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos.
11-15059 and 11-5058) on Oct. 31, 2011, after a planned sale to
Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF
Global had $41,046,594,000 in total assets and $39,683,915,000 in
total liabilities. It was the largest bankruptcy filing in 2011.
MFGH's subsidiaries MF Global Capital LLC, MF Global FX
Clear LLC and MF Global Market Services, LLC filed for bankruptcy
protection on Dec. 19, 2011.
MF Global Holdings USA Inc., doing business as Farr Whitlock Dixon
& Co. Inc., and Man Group USA Inc., filed a Chapter 11 petition on
March 2, 2012. Holdings USA provided administrative services to
MF Ltd. and its domestic subsidiaries.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of
MF Global Finance USA Inc.
Louis J. Freeh was named the Chapter 11 Trustee for the bankruptcy
cases of MF Global Holdings Ltd. and its affiliates. The Trustee
tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel;
(ii) FTI Consulting Inc., as restructuring advisors; (iii)
Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper
Hamilton as special counsel; and (h) authorizing the Committee to
retain and employ (i) Dewey & LeBoeuf LLP, as the Committee's
counsel; and (ii) Capstone Advisory Group LLC as financial
advisor.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at Hughes
Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing. Seven directors of MF Global Holdings resigned from their
posts on Nov. 28, 2011.
U.S. regulators are investigating about $633 million missing from
MF Global customer accounts, a person briefed on the matter said
Nov. 3, according to Bloomberg News.
The New York Stock Exchange has removed MFGI securities from
listing.
Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by MF Global Holdings and other insolvency and
bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
MICHAELS STORES: To Offer $500 Million of Common Shares
-------------------------------------------------------
Michaels Stores, Inc., filed with the U.S. Securities and Exchange
Commission a Form S-1 registration statement relating to an
initial offering of an indeterminate shares of common stock.
The proposed maximum aggregate offering price is $500 million.
J.P. Morgan Securities LLC; Goldman, Sachs & Co.; Barclays Capital
Inc.; Deutsche Bank Securities Inc.; Merrill Lynch, Pierce, Fenner
& Smith Incorporated; Credit Suisse Securities (USA) LLC; Morgan
Stanley & Co. LLC; and Wells Fargo Securities, LLC are acting as
joint book-running managers of the offering and J.P. Morgan
Securities LLC and Goldman, Sachs & Co. are acting as
representatives of the underwriters.
The Company intends to list its Common Stock on the New York Stock
Exchange, subject to notice of issuance, under the symbol "MIK".
A copy of the prospectus is available for free at:
http://is.gd/3PoU82
About Michaels Stores
Headquartered in Irving, Texas, Michaels Stores, Inc., is the
largest arts and crafts specialty retailer in North America. As
of March 9, 2009, the Company operated 1,105 "Michaels" retail
stores in the United States and Canada and 161 Aaron Brothers
Stores.
The Company's balance sheet at Jan. 28, 2012, showed $1.82 billion
in total assets, $4.29 billion in total liabilities, and a $2.47
billion total stockholders' deficit.
* * *
Michaels Stores carries a 'B3' corporate family rating from
Moody's Investors Service.
As reported by the Troubled Company Reporter on Oct. 8, 2010,
Moody's assigned Caa1 rating to Michaels Stores's proposed
$750 million senior unsecured bonds due 2018. Proceeds from the
note offering will be used to tender for an existing $750 million
series of unsecured notes. The refinancing, while improving the
maturity profile of the company, has no impact on Michaels'
current capital structure or ratings.
Moody's said Michaels' CFR reflects its significant financial
leverage and weak credit metrics. It also recognizes Michaels'
leadership position in the highly fragmented arts and crafts
segment, and its high operating margins. The rating takes into
consideration the company's participation in some segments that
have greater sensitivity to economic conditions, such as its
custom framing business. Michaels' ratings also reflect its good
liquidity with limited near term debt maturities.
TENET HEALTHCARE: Robert Kerrey Resigns, to Run for U.S. Senate
---------------------------------------------------------------
Robert J. Kerrey notified the Board of Directors of Tenet
Healthcare Corporation of his decision to resign from the Board in
order to devote full attention to his campaign for election to the
U.S. Senate. Following Mr. Kerrey's resignation, the Board of
Directors reduced its size from ten directors to nine.
About Tenet Healthcare
Dallas, Texas-based Tenet Healthcare Corporation (NYSE: THC) --
http://www.tenethealth.com/-- is a health care services company
whose subsidiaries and affiliates own and operate acute care
hospitals, ambulatory surgery centers and diagnostic imaging
centers.
The Company reported net income of $94 million on $8.85 billion of
net operating revenues for the year ended Dec. 31, 2011, compared
with net income of $1.15 billion on $8.46 billion of net operating
revenues during the prior year.
The Company's balance sheet at Dec. 31, 2011, showed $8.46 billion
in total assets, $6.95 billion in total liabilities, $16 million
in redeemable non-controlling interests in equity of consolidated
subsidiaries, and $1.49 billion in total equity.
* * *
Standard & Poor's Ratings Services said November 2011 the
corporate credit rating on Tenet is 'B' and the outlook is
stable. "The rating reflects our view of the company's weak
business risk as the benefits of a fairly sizable portfolio of 49
hospitals are undercut by uncertain reimbursement, significant
uncompensated care, weak patient volume trends and concentration
in certain markets, many of which are competitive. We view Tenet's
financial risk profile as aggressive, even though there has been a
recent reduction in debt to EBITDA to 4.5x. This has contributed
to the generation of free cash flow since last year. (For the
latest complete corporate credit rating rationale, see Standard &
Poor's research report on Tenet published July 20, 2011 on Ratings
Direct)," S&P related.
Moody's Investors Service said in November 2011 that Tenet's 'B2'
Corporate Family Rating remains constrained by Moody's expectation
of modest free cash flow generation and continued high geographic
concentration. Furthermore, industry challenges like high bad debt
expense, weak volume trends and changes in mix as commercial
volumes decline, will likely challenge organic growth. However,
the rating also incorporates Moody's expectation that the company
will continue to see improvements in operating performance, driven
by cost savings initiatives and benefits from capital investment.
MMRGLOBAL INC: Robert Lorsch Discloses 17.3% Equity Stake
---------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Robert H. Lorsch disclosed that, as of
April 19, 2012, he beneficially owns 69,579,274 shares of common
stock of MMRGlobal, Inc., representing 17.3% of the shares
outstanding. The amount consists of (i) 6,068,754 shares of
common stock held directly by Mr. Lorsch and 36,454,892 shares of
common stock held directly by The RHL Group, Inc., (ii) warrants
held by The RHL Group, Inc., to purchase 12,875,628 shares of
common stock, and (iii) stock options held by Mr. Lorsch to
purchase 14,180,000 shares of common stock. A copy of the filing
is available for free at http://is.gd/Ir9XKL
About MMRGlobal
Los Angeles, Calif.-based MMR Global, Inc. (OTC BB: MMRF)
-- http://www.mmrglobal.com/-- through its wholly-owned operating
subsidiary, MyMedicalRecords, Inc., provides secure and easy-to-
use online Personal Health Records (PHRs) and electronic safe
deposit box storage solutions, serving consumers, healthcare
professionals, employers, insurance companies, financial
institutions, and professional organizations and affinity groups.
The Company reported a net loss of $8.88 million in 2011, compared
with a net loss of $17.90 million in 2010. The Company reported a
net loss of $10.3 million in 2009.
The Company's balance sheet at Dec. 31, 2011, showed $2.22 million
in total assets, $7.51 million in total liabilities, and a
$5.28 million total stockholders' deficit.
For 2011, Rose, Snyder & Jacobs LLP, in Encino, California,
expressed substantial doubt about the Company's ability to
continue as a going concern. The auditor issued going concern
qualification in the 2010 and 2011 financial statements. The
independent auditors noted that the Company has incurred
significant operating losses and negative cash flows from
operations during the years ended Dec. 31, 2011, and 2010.
MONTANA ELECTRIC: Beartooth Wants Wholesale Power Deal Voided
-------------------------------------------------------------
Richard Ecke at greatfallstribune.com reports that Beartooth
Electric Cooperative asked a federal bankruptcy judge last week to
declare its wholesale power contract with Southern Montana
Electric Generation & Transmission Cooperative null and void.
According to the report, Beartooth attorney Laurence R. Martin,
Esq., asked Bankruptcy Judge Ralph B. Kirscher to declare
Beartooth's amended wholesale power contract with Southern Montana
void for several reasons. One example cited was Southern
Montana's failure to obtain approval from the Wyoming Public
Service Commission before it pledged Beartooth's contract as
collateral against $85 million in loans the co-op secured to build
a power plant east of Great Falls. Another reason was Southern
Montana's failure to obtain Beartooth's consent for the power
contract to be assumed or assigned.
The report relates Judge Kirscher postponed a hearing in the case
from April 17 to April 24 to consider a variety of issues.
Meanwhile, the report says Southern Montana's appointed trustee,
Lee Freeman, has requested pay of $500 per hour for 228.6 hours
spent working on the case from Nov. 28 through Feb. 29. The total
request for compensation was for $114,300. Mr. Freeman's
attorney, Joseph Womack of Billings, noted a statutory federal cap
on compensation limited the trustee's pay to a much higher figure
of $487,481 for the period.
The report notes Southern Montana borrowed $85 million to build a
40-megawatt natural gas-fired power plant near Great Falls. It
also agreed to an unfavorable power agreement with PPL EnergyPlus
that helped prompt its bankruptcy filing. Mr. Freeman has
rejected the PPL contract and Southern Montana recently has
purchased power for less than $20 per megawatt hour, officials
said.
The report adds the city of Great Falls has lost $7 million on its
energy venture so far, and city commissioners say they want out of
the power business.
The report says Mr. Freeman has said he wants to reorganize
Southern Montana, although some co-op members would prefer to see
the umbrella co-op dissolved or shrunk.
About Southern Montana Electric
Based in Billings, Montana, Southern Montana Electric Generation
and Transmission Cooperative, Inc., was formed to serve five
other electric cooperatives. The city of Great Falls later joined
as the sixth member. Including the city, the co-op serves a
population of 122,000. In addition to Great Falls, the service
area includes suburbs of Billings, Montana.
Southern Montana filed for Chapter 11 bankruptcy (Bankr. D.
Mont. Case No. 11-62031) on Oct. 21, 2011. Southern Montana
estimated assets of $100 million to $500 million and estimated
debts of $100 million to $500 million. Timothy Gregori signed the
petition as general manager.
Jon E. Doak, Esq., at Doak & Associates, P.C., in Billings,
Montana, serves as the Debtor's counsel. In December 2011,
Southern Montana also sought permission to employ the Goodrich Law
Firm, P.C., as general co-counsel.
Also in December, Lee A. Freeman was appointed as Chapter 11
trustee. Mr. Freeman retained Horowitz & Burnett, P.C., as his
counsel and Waller & Womack, P.C., as local counsel.
The United States Trustee for Region 18 has appointed an Official
Committee of Unsecured Creditors in the case.
After filing for reorganization in October, the co-op agreed to a
request for appointment of a Chapter 11 trustee. Lee A. Freeman
was appointed as the Chapter 11 trustee and he is represented by
Joseph V. Womack, Esq., at Waller & Womack; and John Cardinal
Parks, Esq., Bart B. Burnett, Esq., Robert M. Horowitz, Esq., and
Kevin S. Neiman, Esq., at Horowitz & Burnett, P.C.
MOUNTAIN PROPERTY DEVT: Files for Chapter 11 in San Jose
--------------------------------------------------------
Mountain Property Development, Inc., filed a bare-bones Chapter 11
petition (Bankr. N.D. Calif. Case No. 12-53090) in San Jose,
California, on April 24, 2012.
Los Gatos, California-based Mountain Property estimated assets and
debts of $10 million to $50 million. Principal assets are located
in Steamboat Springs, Colorado.
According to the case docket, the meeting of creditors under
11 U.S.C. Sec. 341(a) is scheduled for May 1, 2012.
The Debtor is represented by Terrell S. Root, Esq., at the Law
Offices of James M. Sullivan, in Los Gatos.
MPG OFFICE: Caspian Capital Owns 9.2% of Preferred Shares
---------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Caspian Capital LP and its affiliates
disclosed that, as of April 23, 2012, they beneficially own
898,047 shares of 7.625% series A cumulative redeemable preferred
stock, representing 9.2% of the shares outstanding.
Caspian Capital previously disclosed beneficial ownership of
863,047 shares of 7.625% series A cumulative redeemable preferred
stock representing 8.6% of the shares outstanding.
A copy of the amended filing is available for free at:
http://is.gd/URJsg0
About MPG Office Trust
MPG Office Trust, Inc., fka Maguire Properties Inc. --
http://www.mpgoffice.com/-- is the largest owner and operator of
Class A office properties in the Los Angeles central business
district and is primarily focused on owning and operating high-
quality office properties in the Southern California market. MPG
Office Trust is a full-service real estate company with
substantial in-house expertise and resources in property
management, marketing, leasing, acquisitions, development and
financing.
The Company has been focused on reducing debt, eliminating
repayment and debt service guarantees, extending debt maturities
and disposing of properties with negative cash flow. The first
phase of the Company's restructuring efforts is substantially
complete and resulted in the resolution of 18 assets, relieving
the Company of approximately $2.0 billion of debt obligations and
potential guaranties of approximately $150 million.
The Company reported net income of $98.22 million in 2011,
compared with a net loss of $197.93 million in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $2.28 billion
in total assets, $3.21 billion in total liabilities, and a
$927.92 million total deficit.
NEBRASKA BOOK: Wants Exclusivity If Plan Doesn't Work
-----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Nebraska Book Co. is angling for a three-month
extension of the exclusive right to propose a Chapter 11 plan in
case its reorganization proposal isn't approved at the
confirmation hearing scheduled for May 30. If the so-called
exclusivity motion is granted at a May 15 hearing in U.S.
Bankruptcy Court in Wilmington, Delaware, the exclusive right to
propose a reorganization will be pushed out to July 23.
The plan gives the new stock plus a new $100 million second-lien
note to holders of the existing $200 million in second-lien debt.
The plan won support from holders of subordinated debt after
second-lien noteholders agreed to improve the junior creditors'
treatment. Assuming the plan goes through, holders of
subordinated debt and general unsecured creditors will receive an
improved package of warrants or cash of equivalent value.
Existing shareholders and holders of $77 million in notes issued
by the holding company are to receive nothing.
The Third Amended Plan outline projects this recovery for the
impaired classes:
Recovery Recovery
Under Under
3rd Amended Previous
Claims Est. Amount Plan Plan
------ ----------- -------- --------
Senior Secured $200 Mil. 81% 23%
Notes
8.625% Notes $79 Mil. 3% 1.5%
Claims
General Unsec. $11-$14 Mil. 4% 1.5%
Claim
A full-text copy of the Third Amended Disclosure Statement is
available for free at:
http://bankrupt.com/misc/NEBRASKA_BOOK_ds.pdf
About Nebraska Book
Lincoln, Nebraska-based Nebraska Book Company, Inc., is one of the
leading providers of new and used textbooks for college students
in the United States. Nebraska Book and seven affiliates filed
separate Chapter 11 petitions (Bankr. D. Del. Case Nos. 11-12002
to 11-12009) on June 27, 2011. Hon. Peter J. Walsh presides over
the case. Lawyers at Kirkland & Ellis LLP and Pachulski Stang
Ziehl & Jones LLP, serve as the Debtors' bankruptcy counsel. The
Debtors; restructuring advisors are AlixPartners LLC; the
investment bankers are Rothschild, Inc.; the auditors are Deloitte
& Touche LLP; and the claims agent is Kurtzman Carson Consultants
LLC. As of the Petition Date, the Debtors had consolidated assets
of $657,215,757 and debts of $563,973,688.
JPMorgan Chase Bank N.A., as administrative agent for the DIP
lenders, is represented by lawyers at Richards, Layton & Finger,
P.A., and Simpson Thacher & Bartlett LLP. J.P. Morgan Investment
Management Inc., the DIP arranger, is represented by lawyers at
Bayard, P.A., and Willkie Farr & Gallagher LLP.
An ad hoc committee of holders of more than 50% of the Debtors'
Second Lien Notes is represented by lawyers at Brown Rudnick. An
ad hoc committee of holders of the Debtors' 8.625% unsecured
notes are represented by Milbank, Tweed, Hadley & McCloy LLP.
The Official Committee of Unsecured Creditors selected Lowenstein
Sandler LLP and Stevens & Lee, P.C., as lawyers and Mesirow
Financial Inc. as financial advisers.
Nebraska Book has been unable to confirm a pre-packaged Chapter 11
plan that would have swapped some of the existing debt for new
debt, cash and the new stock, due to an inability to secure
$250 million in exit financing.
NET TALK.COM: Executes $500,000 of 10% Senior Secured Debenture
---------------------------------------------------------------
Nettalk.com, Inc., on April 20, 2012, has executed a $500,000, 10%
Senior Secured Debenture due June 30, 2012, from an accredited
institutional investor. Proceeds from the debenture will be used
for marketing, general operations and defending patent
infringements.
The Senior Secured Debenture, among other matters, accrues
interest at 10% per annum, is payable in full on June 30, 2012, is
secured by all of the assets of the Registrant, and provides for a
default rate of interest of no less than 18% upon an event of
default.
About Net Talk.com
Based in Miami, Fla., Net Talk.com, Inc., is a telephone company,
who provides, sells and supplies commercial and residential
telecommunication services, including services utilizing voice
over internet protocol technology, session initiation protocol
technology, wireless fidelity technology, wireless maximum
technology, marine satellite services technology and other similar
type technologies.
The Company reported a net loss of $26.17 million $2.72 million of
revenue for the year ended Sept. 30, 2011, compared with a net
loss of $6.30 million on $737,498 of revenue during the prior
year.
The Company's balance sheet at Dec. 31, 2011, showed $7.64 million
in total assets, $9.80 million in total liabilities, $10.38
million in redeemable preferred stock, and a $12.54 million total
stockholders' deficit.
NETFLIX INC: Moody's Says Low Subscriber Growth No Rating Impact
----------------------------------------------------------------
Moody's Investors Service said that Netflix, Inc.'s Ba2 rating and
stable outlook are not impacted by management's expectation for
slower subscriber growth in the upcoming quarter. The company's
recent performance including resumption of subscriber growth after
a temporary decline in the latter half of 2011, which was driven
by its ill fated strategic pricing changes, is consistent with
Moody's expectations published early in Q4 2011. The company grew
unique domestic subscribers by almost 1.7 million in the first
quarter of 2012, and it expects significantly lower net additions
in the second quarter. "While expectations of slower growth in the
near term drove a sharp drop in the company's equity (about 14%),
the company's credit rating remains unaffected," stated Neil
Begley, a Moody's analyst. Moody's does not anticipate subscriber
growth to stall in the near term and the stable rating outlook
(changed from positive in October, 2011) already reflects Moody's
expectation that Netflix will not be able to sustain its past
growth levels and will be more vulnerable to new competition as a
result of the price increase on its hybrid (physical DVD rental
and streaming) offering which Moody's viewed as a competitive
advantage.
The primary factors underlying the company's credit profile
continue to be as follows: managing the risk associated with fixed
streaming content cost obligations in the face of potentially
volatile subscriber levels; managing competition and customer
retention; and pacing its rollout in international markets to
manage the impact on free cash flow and financial flexibility. "As
competitors strengthen their product offerings with deeper
libraries, with competitive pricing and competitively elegant
online interfaces, and more companies enter the playing field,
Moody's believes Netflix will find it more challenging to maintain
its lead over competitors as it does today for the streaming and
physical DVD rental market, and will likely see pressure on churn
and pricing," added Mr. Begley. In addition, its growing content
liabilities as it faces content renewals in the near future and
increases its investments in exclusive and original programming,
make it imperative that the company continue to grow to be able to
sustain if not increase its content costs, and maintain a
conservative balance sheet to endure losses from expanding into
international markets.
In the face of these challenges, the company has prudently managed
liquidity by raising incremental capital ($400 million in debt and
equity in November 2011), maintaining a significant cash balance
relative to debt (over $800 million in cash and cash equivalents
at 3/31/2012), and discontinuing share repurchases. While the
company was slightly better than break-even on free cash flow at
the end of the first quarter, Moody's notes that free cash flow is
negatively impacted by an organic growth strategy as opposed to
growth through acquisitions; considering the almost $200 million
in losses contributed by its international streaming segment in
the last twelve months, the company still generates healthy free
cash flow on a normalized basis. Moody's expects the company to
manage its international expansion so as to limit the extent of
negative cash flow, and to continue maintaining solid liquidity in
the near-to-intermediate term.
Netflix Inc., with its headquarters in Los Gatos, California, is
the largest DVD and online movie rental subscription service in
the United States with annual revenues of approximately $3.4
billion.
NORTEL NETWORKS: CAW Calls on Amendments to Bankruptcy Laws
-----------------------------------------------------------
The Canadian Auto Workers Union said in a press release that since
Nortel entered bankruptcy protection in January 2009, its pension
plans have been devastated; incomes for disabled and terminated
employees have been lost, and the health benefits paid for with
years of service have vanished. In the meantime, "vulture"
investors have been arguing that not only are they entitled to
enormous profits on their investment, but interest amounting to
almost a billion dollars.
The CAW is calling on the federal government to review and amend
the legislation that allows one creditor group to reap an enormous
reward on a speculative investment while those who worked to build
the company are treated as second class creditors.
"Amendments to the bankruptcy laws must ensure that all Nortel's
creditors are treated equally and equitably," said CAW President
Ken Lewenza. "Our bankruptcy laws fall far short and there is not
a greater example of this injustice than that of Nortel."
Three years after first entering bankruptcy protection, almost all
of Nortel's assets have been sold to international bidders and the
proceeds, almost $7 billion, are sitting in a trust account
awaiting some sort of plan to distribute them to the company's
global creditors. The claims of those creditors are far greater
than the amount available to pay them.
The bulk of Nortel's creditors are pensioners and former employees
in Canada, the United States and the United Kingdom. Pensioners in
Canada have seen their pensions reduced by up to 50 per cent and
others will suffer a similar fate, given the massively underfunded
status of Nortel's pension plans.
Financial speculators dealing in Nortel bonds, many of which were
purchased for as little as 12 cents on the dollar after January
2009, are seeking not only the full value of those bonds, but
interest as well. Some bond holders could receive 10 times the
speculative investment because Canadian bankruptcy laws allow the
recovery of interest for bond holders while pensioners and the
disabled suffer personal and financial ruin.
On Monday Ontario's Chief Justice Warren Winkler began a court
ordered mediation which could overcome the impasse that has kept
billions of dollars locked away in a New York bank. However,
unless the government acts now, the bond holders will persist with
their demands for outrageous profits and the likelihood of success
in the mediation will be dramatically reduced.
About Nortel Networks
Nortel Networks (OTC BB: NRTLQ) -- http://www.nortel.com/-- was
once North America's largest communications equipment provider.
It has sold most of the businesses while in bankruptcy.
Nortel Networks Corp., Nortel Networks Inc., and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List). Ernst & Young was appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group.
The Monitor sought recognition of the CCAA Proceedings in the
U.S. by filing a bankruptcy petition under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary
Caloway,Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll &
Rooney PC, in Wilmington, Delaware, serves as the Chapter 15
petitioner's counsel.
Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions (Bankr. D. Del. Case No. 09-10138) on Jan. 14, 2009.
Judge Kevin Gross presides over the case. James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.
The Office of the United States Trustee for the District of
Delaware has appointed an Official Committee of Unsecured
Creditors in respect of the Debtors, and an ad hoc group of
bondholders has been organized.
Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in
New York, and Christopher M. Samis, Esq., at Richards, Layton &
Finger, P.A., in Wilmington, Delaware, represent the Official
Committee of Unsecured Creditors.
The Official Committee of Retired Employees and the Official
Committee of Long-Term Disability Participants tapped Alvarez &
Marsal Healthcare Industry Group as financial advisor. The
Retiree Committee is represented by McCarter & English LLP as
Delaware counsel, and Togut Segal & Segal serves as the Retiree
Committee. The Committee retained Alvarez & Marsal Healthcare
Industry Group as financial advisor, and Kurtzman Carson
Consultants LLC as its communications agent.
Certain of Nortel's European subsidiaries also made consequential
filings for creditor protection. On May 28, 2009, at the request
of the Administrators, the Commercial Court of Versailles, France
ordered the commencement of secondary proceedings in respect of
Nortel Networks S.A. On June 8, 2009, Nortel Networks UK Limited
filed petitions in this Court for recognition of the English
Proceedings as foreign main proceedings under chapter 15 of the
Bankruptcy Code.
Nortel has collected almost $9 billion for distribution to
creditors. Of the total, US$4.5 billion came from the sale of
Nortel's patent portfolio to Rockstar Bidco, a consortium
consisting of Apple Inc., EMC Corporation, Telefonaktiebolaget LM
Ericsson, Microsoft Corp., Research In Motion Limited, and Sony
Corporation. The consortium defeated a $900 million stalking
horse bid by Google Inc. at an auction. The deal closed in July
2011.
Nortel Networks has filed a proposed plan of liquidation in the
U.S. Bankruptcy Court. The Plan generally provides for full
payment on secured claims with other distributions going in
accordance with the priorities in bankruptcy law.
ONEBEACON U.S.: Moody's Issues Summary Credit Opinion
-----------------------------------------------------
Moody's Investors Service issued a summary credit opinion on
OneBeacon U.S. Holdings, Inc. and includes certain regulatory
disclosures regarding its ratings. The release does not constitute
any change in Moody's ratings or rating rationale for OneBeacon
U.S. Holdings, Inc.
Moody's current ratings on OneBeacon U.S. Holdings, Inc. and its
affiliates are:
BACKED Senior Unsecured (domestic currency) ratings of Baa2
BACKED Senior Unsecured Shelf (domestic currency) ratings of
(P)Baa2
BACKED Subordinate Shelf (domestic currency) ratings of (P)Baa3
BACKED Junior Subordinate Shelf (domestic currency) ratings of
(P)Baa3
BACKED Preferred Shelf (domestic currency) ratings of (P)Ba1
OneBeacon U.S. Holdings Trust I
BACKED Preferred Shelf (domestic currency) ratings of (P)Baa3
OneBeacon U.S. Holdings Trust II
BACKED Preferred Shelf (domestic currency) ratings of (P)Baa3
OneBeacon U.S. Holdings Trust III
BACKED Preferred Shelf (domestic currency) ratings of (P)Baa3
RATING RATIONALE
The A2 insurance financial strength (IFS) rating of OneBeacon
Insurance Group, Ltd.'s inter-company pool members reflects the
company's strong underwriting capabilities and good profitability
in several low-to-moderate hazard, niche specialty P&C segments,
strong producer relationships, and good capitalization. Factors
offsetting these strengths include meaningful, though reducing,
financial leverage, potential adverse development on run-off
casualty business including A&E, and an ongoing soft pricing
environment which is pressuring accident year combined ratios.
OneBeacon is a specialty insurer operating primarily through
independent agents. OneBeacon's operating subsidiaries are wholly-
owned by OneBeacon U.S. Holdings, Inc. (OneBeacon U.S. - senior
unsecured Baa2; stable outlook) which, in turn, is wholly-owned by
OneBeacon. OneBeacon is an indirect 75%-owned subsidiary of White
Mountains Insurance Group, Ltd. (White Mountains; NYSE: WTM), with
the remaining 25% publicly owned. Principal and interest on
OneBeacon U.S.'s senior notes are guaranteed by White Mountains.
Both OneBeacon and White Mountains are Bermuda-domiciled insurance
holding companies.
In July 2010, the company completed the sale of its standard
personal lines business to Tower Group, Inc. for approximately
$167 million. In December 2009, the company completed a renewal
rights sale of its non-specialty commercial lines portfolio
(totaling $490 million of direct premiums) to The Hanover Group
(NYSE: THG), beginning with January 1, 2010 effective dates. These
dispositions have significantly reduced the company's catastrophe
risk profile and have improved geographic diversification. The
company has also reduced financial leverage, and has increased
focus on its more profitable specialty lines of business.
Rating Outlook
On June 13, 2011, Moody's affirmed the A2 insurance financial
strength ratings of the OneBeacon's inter-company pool members and
the Baa2 senior debt rating of OneBeacon U.S. and changed the
ratings outlooks to stable from negative, reflecting the group's
narrowed strategic focus and expertise, an improved risk profile
from a profitability perspective as well as a significantly
reduced financial leverage.
What to Watch for:
- Management of risk adjusted capital including share repurchases
and special dividends;
- Potential adverse reserve development from discontinued
businesses.
- Outsized growth of specialty portfolio relative to market
conditions
What Could Change the Rating - Up
- Sustained financial leverage below 20%;
- Maintenance of appropriate level of risk capitalization with
gross underwriting leverage less than 3.0x;
- Earnings coverage consistently above 6x.
What Could Change the Rating - Down
Factors that could lead to a downgrade include:
- Deterioration in reserve position;
- Exhaustion of reinsurance cover provided by National Indemnity
Insurance Company (NICO) on asbestos and environmental
liabilities;
- Annual after tax catastrophe losses exceeding 10% of GAAP
shareholders' equity;
- Financial leverage consistently above 30%;
- Earnings coverage consistently below 4x.
The principal methodology used in these ratings was Moody's Global
Rating Methodology for Property and Casualty Insurers published in
May 2010.
PARAGON PAPER: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Paragon Paper, Inc.
500 Independence Blvd.
Sicklerville, NJ 08081
Bankruptcy Case No.: 12-19955
Chapter 11 Petition Date: April 14, 2012
Court: United States Bankruptcy Court
District of New Jersey (Camden)
Judge: Judith H. Wizmur
Debtor's Counsel: Jason C. Manfrey, Esq.
Michael G. Menkowitz, Esq.
FOX ROTHSCHILD LLP
20000 Market Street
20th Floor
Philadelphia, PA 19103
Tel: (215) 299-2000
Fax: (215) 299-2150
E-mail: jmanfrey@foxrothschild.com
mmenkowitz@foxrothschild.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 Mark J. Guarnere, president.
PLAINS EXPLORATION: Moody's Rates $500MM Sr. Unsec. Notes 'B1'
--------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Plains
Exploration & Production Company's (PXP) offering of $500 million
senior unsecured notes due 2019. The proceeds of the offering will
be used for debt repayment and general corporate purposes.
Ratings Rationale
"This notes offering will be used to repay borrowings under PXP's
secured revolving credit facility and to clean up assorted
residual near term debt maturities," commented Andrew Brooks,
Moody's Vice President, "and represents part of a larger program
designed to extend the company's average debt maturity profile,
reduce interest costs and to ensure that ample liquidity remains
in place sufficient to fund PXP's longer term capital program."
PXP's Ba3 Corporate Family Rating (CFR) reflects its high
leverage, which at year-end 2011 represented $38,790 per Boe of
average daily production, its focused asset portfolio increasingly
weighted to oil (49% of 2011's production), its scale (2011's
proved reserves totaled 410.9 million Boe) and attractive organic
growth prospects. The company's high debt leverage reflects the
residual effect of acreage acquisitions in 2008 and 2010,
exacerbated by an ongoing capital spend in excess of cash flow. As
it transitions its portfolio to one more weighted to oil, property
divestitures have played a role including its 2010 sale of shallow
water Gulf of Mexico properties to McMoRan Exploration Co (B3
stable), largely in exchange for 51 million shares of stock (whose
market value currently approximates $400 million), which PXP
continues to hold, and its year-end 2011 sale of South Texas and
Texas Panhandle gas assets for a combined $785 million. Anchored
by its long-lived, free cash-flowing California heavy oil
production, Moody's views PXP's anticipated 10-15% average annual
production growth across its portfolio as reasonable.
PXP is a mid-sized exploration and production company with
operations focused onshore and offshore California (approximately
60% of proved reserves, adjusted for recent divestitures), South
Texas (including the Eagle Ford Shale), the Haynesville Shale in a
JV with Chesapeake Energy (Ba2 stable) and the deepwater Gulf of
Mexico (GOM). Production averaged 99,912 Boe per day in 2011
(before divestitures). The company is guiding 2012 capital
spending at $1.6 billion, with the $234 million allocated to the
deepwater GOM portion funded through proceeds raised in 2011's
monetization of 20% of this asset. PXP expects to be self-funded
through internally generated cash flow by 2013, at which point PXP
intends to use free cash flow and any subsequent asset
monetizations to fund a $1 billion share repurchase program
authorized by its Board through January 2016.
Moody's stable outlook reflects the series of measures PXP has
undertaken to stabilize the level of debt in its capital
structure, as well as the company's increasingly attractive oil-
weighted cash margin. PXP's ratings could be upgraded as it gains
scale, and reduces leverage to a level below $25,000 per Boe of
production and $8 per Boe proved developed, while maintaining its
F&D costs at recently attained, more competitive levels. The
ratings could be downgraded if leverage based on units of
production does not begin to trend lower, or if the company debt-
finances a large acquisition or share repurchases. While the
company anticipates production growth of 10-15% a year, Moody's
does not believe production growth alone will sufficiently reduce
leverage metrics and prompt improved ratings, but will require
absolute debt reduction as well.
The B1 rating on the proposed $500 million of senior notes
reflects both the overall probability of default of PXP, to which
Moody's assigns a PDR of Ba3, and a loss given default of LGD4
(65%). The company has a $1.4 billion ($2.3 billion borrowing
base) secured revolving credit facility. Its senior unsecured
notes are subordinate to the senior secured credit facility's
potential priority claim to the company's assets. The size of the
potential senior secured claims relative to PXP's outstanding
senior unsecured notes results in the senior notes being rated one
notch beneath the Ba3 CFR under Moody's Loss Given Default
Methodology.
The principal methodology used in rating Laredo 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.
PXP is headquartered in Houston, Texas.
PLAINS EXPLORATION: S&P Affirms 'BB' Corporate Credit Rating
------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Houston-
based Plains Exploration & Production Co. (PXP) to stable from
positive. "At the same time, we affirmed the 'BB' corporate credit
rating on the company," S&P said.
"In addition, we lowered our rating on the company's senior
unsecured debt to 'BB-' from 'BB' and revised the recovery rating
to '5' from '4', indicating our expectation of modest (10% to 30%)
recovery for lenders in the event of a default. At the same time,
we assigned a 'BB-' rating to the company's proposed $500 million
senior unsecured notes offering. We assigned a '5' recovery rating
to these notes," S&P said.
"We revised the outlook on PXP to stable from positive to reflect
a weaker outlook for improvement in the company's credit
protection measures," said Standard & Poor's credit analyst
Lawrence Wilkinson. "Share repurchases undertaken over the last
two quarters coupled with weaker natural gas prices are likely to
result in more limited improvement in credit protection measures
over the near term. We anticipate that credit protection measures
in 2012 will likely remain at levels appropriate for the current
'BB' rating."
"Our ratings on PXP reflect our assessment of the company's 'fair'
business profile and 'significant' financial risk. The ratings
incorporate the company's participation in the highly cyclical
exploration and production (E&P) segment of the oil and gas
industry and its historically aggressive capital and acquisition
spending. Our assessment also incorporates PXP's midsize and
geographically diversified oil and gas reserve base and its
significant exposure to oil production volumes."
"The stable outlook reflects our view that the company's credit
protection measures are likely to remain in line with the current
rating category over the intermediate term. We would consider an
upgrade if the company reduced outstanding debt balances such that
it could sustain debt to EBITDA in the mid-2x area. Alternatively,
we would consider a downgrade if the company pursued a more
aggressive growth strategy such that leverage approaches 3.5x."
RADIATION THERAPY: S&P Affirms 'B' Corporate Credit Rating
----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on Radiation Therapy Services Inc. and raised the
rating outlook to stable from negative. "In addition, we assigned
our 'BB-' debt rating and '1' recovery rating to the company's
proposed revolver, and our 'B+' debt rating and '2' recovery
rating to the proposed second-lien notes," S&P said.
"The rating on Fort Myers, Fla.-based Radiation Therapy Services
Inc. reflects our assessment of the company's business risk
profile as 'weak' and the financial risk profile as 'highly
leveraged,'" S&P said.
"We expect Radiation Therapy to continue to be subject to
significant reimbursement risk such as the recent Medicare payment
cut (8% for IMRT and 22% for IGRT treatments) to radiation
treatment providers for 2012," said Standard & Poor's credit
analyst John Bluemke. "We expect Radiation Therapy's total revenue
to increase by approximately 10% for 2012, primarily on the
impact of acquisition activities and continued growth of the
company's Latin American business, Medical Developers LLC. Our
expectations are for EBITDA margins to remain relatively flat in
2012 over 2011, as cost mitigation strategies are offset by
increases in lower margin multi-specialty practice businesses. We
expect any free operating cash flow to be used to fund
acquisitions rather than to repay debt."
RADIOSHACK: Weak Operating Results Cue Fitch to Downgrade Ratings
-----------------------------------------------------------------
Fitch Ratings has downgraded its long-term Issuer Default Rating
(IDR) for RadioShack to 'B-' from 'B+.' The Rating Outlook is
Negative. As of March 31, 2012, RadioShack had $675 million of
debt outstanding.
The downgrade reflects weaker than anticipated operating results,
due in particular to pressure on the company's mobility segment,
and the resulting increase in financial leverage. The Negative
Outlook reflects the lack of stability in the business as
exhibited by recent sharp declines in EBITDA.
Fitch believes that the pressures on RadioShack's business profile
will make it difficult for it to return to historical EBITDA and
FCF levels or even sustain current LTM trends. A positive
catalyst to improve leverage is not apparent given the recent
trends, and Fitch expects that the company will need to continue
to be promotional given the challenging economy, price-sensitive
consumer and largely commoditized consumer electronics space. As a
result, depressed EBITDA and higher levels of financial leverage
may not be a short term event.
RadioShack's comparable store sales declined 2.2% in 2011 and 4.2%
in the first quarter of 2012, while EBITDA fell to $221 million in
the 12 months ended March 31, 2012 from $473 million in 2010.
Total lease adjusted leverage stood at approximately 5.7 times (x)
at March 31, 2012, compared with 3.9x at end-2010, and Fitch now
expects leverage could trend above 6x over the intermediate term
as EBITDA remains under significant pressure.
Two of RadioShack's three key segments are in decline: signature
(29% of 2011 sales) and consumer electronics (19%). The signature
business includes sales of accessories, power and technical
products sales. It generates healthy margins and experienced
modest 1% growth in the first quarter following a 4% sales decline
in 2011. The consumer electronics segment experienced a 19% sales
decline in 2011 and was off 24% in the first quarter, reflecting
the competitive nature of that business as sales shift to the
online channel.
The third platform, mobility, has generated healthy growth and
accounts for around 50% of sales. However, margins from this
business have declined sharply due to weakness in Sprint wireless
sales due to changes by Sprint in its early upgrade program and
its credit model. In addition, growth in the Verizon Wireless
business has been slower than expected since it was introduced in
September 2011. The overall growth of smart phones (iPhones in
particular) has also been dampening margins.
The mobility segment is a lower-margin business operating in a
competitive space, and consumer awareness of RadioShack's mobile
phone offerings appears low, as the bulk of industry-wide wireless
transactions are completed at the carrier's stores. Thus,
RadioShack's longer-term prospects for earnings growth remain a
concern.
The 'other' segment includes the Target mobile centers, which are
contributing to top line growth, though Fitch believes that it
will be some time before they are making a positive contribution
to operating profit.
RadioShack has adequate liquidity, with $566 million in cash and
cash equivalents and an unused $450 million credit facility as of
March 31, 2012. The credit facility expires on Jan. 4, 2016.
Availability on the facility would be reduced by 12.5% ($56.3
million) if the fixed charge coverage ratio drops below 1x, though
this would not have a material impact on RadioShack's liquidity.
Fitch notes that the calculation of fixed charge coverage has been
amended to exclude the $49.6 million dividend payment made on Dec.
15, 2011, providing some near-term relief to this covenant.
RadioShack's annual free cash flow after dividends has remained
positive, though it dropped to below $100 million in 2010 and
2011. FCF is expected to turn negative, particularly given that
the company increased the annual dividend to $50 million from $25
million during October 2011. The company also approved a new $200
million share repurchase program in October, but share repurchases
were suspended later in fourth quarter due to weak operating
trends.
The company has sufficient cash on hand to repay its nearest debt
maturity, the $375 million of 2.5% convertible notes due August
2013, though Fitch believes the company would consider refinancing
at least part of this maturity if its financial condition
stabilizes and it can access the debt markets. In addition,
the notes could be rolled into the revolver if necessary.
The revolver, which is unused except for LCs, is subject to a
borrowing base, which currently exceeds the $450 million facility
size. There are no maintenance covenants in the revolver or the
notes, though a 1x FCC debt incurrence covenant kicks in if
availability on the revolver falls below 12.5% of the facility
size. There are no meaningful restrictions on dividends or share
repurchases in the revolver or notes.
The ratings on the various securities reflect Fitch's recovery
analysis which is based on a liquidation value of RadioShack in a
distressed scenario of around $850 million. Applying this value
across the capital structure results in an outstanding recovery
prospect (91%-100%) for the asset-based revolver. This revolver
is collateralized by a first lien on inventory and receivables.
The unsecured senior notes and convertible debt have average
recovery prospects (31%-50%).
Fitch has downgraded the following ratings as indicated:
RadioShack Corporation
-- IDR to 'B-' from 'B+';
-- $450 million secured revolving credit facility to 'BB-/RR1'
from 'BB+/RR1';
-- Senior unsecured notes to 'B-/RR4' from 'B+/RR4'
The Rating Outlook is Negative.
RADIOSHACK CORP: Moody's Lowers CFR to 'B1'; Outlook Negative
-------------------------------------------------------------
Moody's Investors Service downgraded RadioShack Corporation's
corporate family and probability of default ratings to B1 from
Ba2. In addition, the ratings for RadioShack's senior unsecured
convertible notes and senior unsecured notes were downgraded to B2
from Ba3. The ratings outlook remains negative. RadioShack's SGL-1
Speculative Grade Liquidity rating is affirmed.
Mickey Chadha, Senior Analyst at Moody's said: "The negative trend
in RadioShack's margins due to its top line being increasingly
skewed towards low margin and highly competitive mobility business
and the proliferation of low margin smart phones cannibalizing
sales from its consumer electronics product line continues to
cause deterioration in credit metrics."
Mr. Chadha went on to say: "Due to the shift in its business mix
the company needs to conform its cost structure and its capital
structure to support a comparatively lower gross margin business
model going forward."
Ratings Rationale
RadioShack's B1 Corporate Family Rating reflects the company's
increasing reliance on its low margin mobility business which has
resulted in margin erosion and deteriorating credit metrics, its
vulnerability to product renewal cycles, product volatility driven
by price competition from a variety of retail formats, small store
size with the constant need to re-balance product mix and
obsolescence risk inherent in consumer technology.
The Rating is supported by RadioShack's very good liquidity
profile, positive free cash flow, balanced financial policy, and
its selection of price-competitive national and private label
products. The company's breadth of peripherals for digital and
audio-visual products, which often require high-touch sales
efforts, helps differentiate it from big-box stores.
The following ratings are downgraded and point estimates updated:
Corporate Family Rating to B1 from Ba2
Probability of Default Rating to B1 from Ba2
$375 million 2.5% senior unsecured convertible notes due 2013 to
B2 (LGD 4, 67%) from Ba3 (LGD 4, 64%)
$325 million senior unsecured notes due 2019 to B2 (LGD4, 67 %)
from Ba3 (LGD 4, 64%)
Senior unsecured shelf rating to (P) B2 from (P) Ba3
The negative outlook reflects Moody's opinion that the overall
business strategy of the company to reverse the sequential
quarterly declines in profitability has not gained any traction
and Moody's expectation that the 2012 retail operating environment
will remain challenging and the increasing price competition
within the wireless mobility sector including wireless carriers
will continue to pressure margins. Therefore Moody's believes that
RadioShack's ongoing lackluster operating performance and margin
erosion will likely continue in the near to medium term. Pending
maturity concerns are mitigated by Moody's expectation that the
company's cash balance will be maintained at approximately current
levels.
Given the negative outlook and the steep decline in the company's
operating performance and profitability, upward movement in
RadioShack's ratings is unlikely in the near to medium term.
Stabilization of the outlook will require sustained improvement in
operating margins and absence of any further operating missteps.
Stabilization of the outlook will also require very good
liquidity, and EBITDA demonstrating tangible incremental progress
toward a level that would result in debt/EBITDA being sustained
below 5.0 times and EBITA to interest being sustained above 1.75
times.
In the longer term a higher rating will require no deterioration
in liquidity, sustained positive comparable store sales growth and
improvements in operating margins and profitability such that debt
/ EBITDA is sustained below 4.25 times and EBITA to interest is
sustained above 2.25 times.
The failure of the company to abate the sequential quarterly
decline in EBITDA and earnings will lead to a downgrade. Given
that debt/EBITDA and EBITA/interest for the LTM period ended March
31, 2012 is estimated to be approximately 6.0 times and
approximately 1.5 times respectively, ratings could be downgraded
if there is no improvement in credit metrics in the near to medium
term. Ratings could also be downgraded due to further increases in
dividends or share buyback's and any deterioration in liquidity.
The principal methodology used in rating RadioShack was the Global
Retail Industry Methodology published in June 2011. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
RadioShack is a retailer of consumer electronics and peripherals,
as well as a retailer of cellular phones. It operates roughly
4,476 stores in the U.S. and 227 stores in Mexico. It also
operates 1,496 wireless phone kiosks in Target stores. The company
also generates sales through a network of 1,091 dealer outlets
worldwide. Revenues for the fiscal year 2011 were approximately
$4.4 billion.
REDDY ICE: OK'd to Pay $3.5 Million Critical Vendor Claims
----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
authorized Reddy Ice Holdings, Inc., and Reddy Ice Corporation to
pay, in the ordinary course of business, the critical vendor
claims up to the aggregate amount of $3.5 million, as the same
become due and payable and in accordance with any approved budget
under the Debtors' postpetition financing facility, on the these
terms and conditions:
a) the Debtors, in their sole discretion, subject to the
limitations, will determine which critical vendor claims, if any,
will be paid; provided, however that the Debtors will not make any
individual payment in excess of $50,000 under the order to a
critical vendor without (i) giving Centerbridge Capital Partners
II, L.P. at least one business day's notice prior to making the
payment and (ii) the prior consent of Centerbridge;
b) if a creditor accepts payment, the creditor is deemed to
have agreed to continue to provide goods or services to the
Debtors, on terms that are as good as or better than the terms and
conditions (including credit terms) that existed 120 days prior to
the Petition Date, during the pendency of the chapter 11 cases;
c) in the event that the relationship between a creditor
accepting payment under the order and the Debtors does not extend
to 120 days before the Petition Date, the customary terms will
mean the terms that the creditor generally extends to its
customers or the terms as are acceptable to the Debtors in the
reasonable exercise of their business judgment;
d) if a creditor accepts payment under the order and thereafter
does not continue to provide goods or services on at least the
customary terms during the pendency of these chapter 11 cases,
then (i) any payment on a prepetition claim received by the
creditor will be deemed to be an unauthorized voidable
postpetition transfer under Bankruptcy Code section 549 and,
therefore, recoverable by the Debtors in cash upon written request
and (ii) upon recovery by the Debtors, any prepetition claim shall
be reinstated as if the payment had not been made;
e) if the Debtors seek to recover a payment from a creditor
because the creditor does not continue to provide goods or
services to the Debtors on at least the customary terms during the
pendency of the chapter 11 cases, the creditor may contest the
action by making a written request to the Debtors to schedule a
hearing before the Court; and
f) prior to making a payment to a creditor, the Debtors may, in
their absolute discretion, settle all or some of the prepetition
claims of the creditor for less than their face amount without
further notice or hearing.
All banks and other financial institutions hereby are authorized
and directed to receive, process, honor, and pay any and all
checks, drafts, wires or automated clearing house transfers,
whether issued or presented prior to or after the Petition Date.
Furthermore, the Debtors are authorized to issue postpetition
Disbursements in respect of unpaid prepetition indebtedness.
About Reddy Ice
Reddy Ice Holdings Inc. and wholly owned subsidiary Reddy Ice
Corp. manufacture and distribute packaged ice in the United
States. As of Dec. 31, 2011, the Company had assets totaling $434
million and total liabilities of $531 million. The bulk of the
liabilities were total debt outstanding of $471.5 million.
Reddy Holdings and Reddy Corp. on April 12, 2012, filed voluntary
Chapter 11 bankruptcy petitions (Bankr. N.D. Tex. Case Nos. 12-
32349 and 12-32350) together with a plan of reorganization and
accompanying disclosure statement to complete a previously
announced plan to strengthen its balance sheet and ensure strong
financial footing for the future. As part of the restructuring,
Reddy Ice seeks to pursue a strategic acquisition of all or
substantially all of the businesses and assets of Arctic Glacier
Income Fund and its subsidiaries, including Arctic Glacier Inc., a
major producer, marketer and distributor of packaged ice in North
America.
Arctic Glacier on Feb. 22, 2012, filed for protection under the
Companies' Creditors Arrangement Act in Canada and Chapter 15 of
the Bankruptcy Code in the United States. Arctic is seeking sale
or investment proposals from qualified bidders.
Reddy Ice's Plan provides for the restructuring of the Company's
obligations with respect to $300 million of First Lien Notes;
$139.4 million of Second Lien Notes; and $11.7 million of Discount
Notes. If the Plan is approved, all Second Lien Notes will be
exchanged and will be retired and cancelled and all Discount Notes
will be cancelled. Reddy Ice said the Plan has the support of a
majority of its lenders and major creditors, led by Centerbridge
Capital Partners II, L.P. A hearing to approve the Disclosure
Statement and confirm the Plan has been set for May 18, 2012.
Judge Stacey G. Jernigan presides over the case. Reddy Ice's
legal advisor on the restructuring is DLA Piper LLP (US) and its
financial advisors are Jefferies & Company, Inc. and FTI
Consulting, Inc. Kurtzman Carson Consultants serves as claims and
notice agent.
Centerbridge Partners is represented by Jonathan S. Zinman, Esq.,
Joshua A. Sussberg, Esq., James H.M. Sprayregen, Esq., and Anup
Sathy, Esq., at Kirkland & Ellis.
Macquarie Bank Limited is represented by Sarah Hiltz Seewer, Esq.,
and David R. Seligman, Esq., also at Kirkland & Ellis.
The ad hoc group of First Lien and Second Lien Noteholders is
represented by Joshua Andrew Feltman, Esq., at Wachtell Lipton
Rosen & Katz. Wells Fargo Bank, National Association, serves as
First Lien and Second Lien Agent.
REDDY ICE: Combined Plan Hearing Scheduled for May 18
-----------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas will
convene a hearing on May 18, 2012, at 9:30 a.m., to consider
adequacy of the Disclosure Statement and confirmation of Reddy Ice
Holdings, Inc. and Reddy Ice Corporation's Chapter 11 Plan.
As reported in the Troubled Company Reporter on April 16, 2012,
the Debtors prepetition negotiated the terms of a restructuring
with the largest holders of the Company's 11.25% Senior Secured
Notes due 2015 (First Lien Notes) and 13.25% Senior Secured Notes
due 2015 (Second Lien Notes). Centerbridge is one of the members
of the informal committee.
Plan support agreements have been executed by holders of roughly
60% of the principal amount of the First Lien Notes, 58% of the
principal amount of the Second Lien Notes, and 92% of the
principal amount of 10-1/2% Senior Discount Notes due 2012.
The Plan provides for the restructuring of the Company's
obligations with respect to the $300 million of First Lien Notes;
$139.4 million of Second Lien Notes; and $11.7 million of Discount
Notes. If the Plan is approved, all Second Lien Notes will be
exchanged and will be retired and canceled and all Discount Notes
will be canceled.
Jeffries & Company Inc., the Debtors' financial advisor, has
determined the estimated range of enterprise value of the
Reorganized Debtors, excluding cash on hand, to be roughly
$382 million to $434 million (with a mid-point estimate of roughly
$408 million) as of an assumed Effective Date of March 31, 2012.
(A) First Lien Notes
Under the Plan, Claims on account of the Company's 11.25% Senior
Secured Notes due 2015 will be allowed for $300 million, plus
interest, fees and expenses. Each holder of an Allowed First Lien
Notes Claim is entitled to vote on the Plan. Holders of 59.97% of
the aggregate amount of First Lien Notes are parties to the
Restructuring and Plan Support Agreement and have agreed to vote
in favor of the Plan. Holders of First Lien Notes are expected to
recover 100%.
The Plan seeks to amend the indenture governing the First Lien
Notes to, among other things, permit:
(i) the incurrence of incremental pari passu first lien
financing for the planned acquisition of Arctic Glacier;
(ii) an amendment to the change of control provisions to
prevent the occurrence of a change of control as a result
of the Chapter 11 restructuring; and
(iii) an amendment to the reporting requirements to eliminate
the need to continue as a reporting company under the
Securities Exchange Act of 1934.
The First Lien Notes will continue to be guaranteed by Reddy
Holdings and will otherwise maintain the same obligations.
In the event that the Company fails to consummate the Strategic
Acquisition, Centerbridge has agreed to convert roughly $68.2
million in aggregate principal amount and accrued and unpaid
interest of its First Lien Notes into preferred stock of Reddy
Holdings with a liquidation preference of $75 million.
(B) Second Lien Notes
Claims on account of the Company's 13.25% Senior Secured Notes due
2015 will be allowed in the aggregate amount of $147.5 million,
plus fees and expenses as of the Petition Date. Each holder of an
Allowed Second Lien Notes Claim is entitled to vote on the Plan.
Holders of 57.97% of the aggregate amount of Second Lien Notes are
parties to the Restructuring and Plan Support Agreement and hence
have agreed to vote in favor of the Plan.
Each holder's Second Lien Notes will be exchanged for each
holder's Pro Rata share of:
(i) 6,094,327 shares of Reorganized Reddy Holdco Common
Stock, subject to dilution in accordance with the other
provisions of the Plan and a further distribution of
Reorganized Reddy Holdco Common Stock in the event the
Arctic Acquisition is consummated pursuant to the terms
of the Plan; and
(ii) the right to purchase shares of Reorganized Reddy Holdco
Preferred Stock pursuant to a rights offering.
Claimants under this group are expected to recoup between 11% and
44%. The recovery will increase in the event the Arctic
Acquisition is consummated.
(C) Discount Notes
Under the Plan, Claims on account of the Company's 10-1/2% Senior
Discount Notes due 2012, estimated to be $11.7 million, will be
cancelled. However, subject to Bankruptcy Court approval and
other conditions, the holders of the Discount Notes will receive
the holder's ratable share of:
(i) $4.68 million in cash on the consummation of the
Restructuring; and
(ii) promissory notes in an initial amount of $1.17 million
payable on the three month anniversary of the
consummation of the Restructuring.
The Discount Notes payment due under the promissory notes will
accrue interest at a rate of 7% per annum from the consummation of
the Restructuring to the three month anniversary of the
consummation of the Restructuring. In the event that the
Strategic Acquisition is consummated prior to the three month
anniversary of the consummation of the Restructuring, the
principal amount of the promissory notes will be increased and the
holders of the Discount Notes will receive their ratable share of
an additional $2.34 million, which additional amount will accrue
interest at a rate of 7% per annum from the consummation of the
Restructuring until the three month anniversary of the
consummation of the Restructuring.
In the event that the Arctic Acquisition is consummated after the
three month anniversary of the consummation of the Restructuring,
the additional payment will be made within 10 business days
following the Strategic Acquisition and will accrue interest at a
rate of 7% per annum from the consummation of the Restructuring
until the payment date. The payments to the existing holders of
the Discount Notes will be made from the distributions under the
Plan to the holders of the Second Lien Notes.
Holders of Discount Notes may see a recovery of up to 50% in the
event the Arctic Acquisition is consummated.
(D) Common Stock
Under the Plan, the common stock of Reddy Holdings will be
cancelled. Existing common stockholders will be entitled to
receive a cash payment of roughly $0.12 per share for their
shares, with an additional payment of roughly $0.05 per share made
in the event the Strategic Acquisition is consummated. Holders of
common stock who hold at least 25,000 shares will be entitled to
elect to receive common shares of reorganized Reddy Holdings in
lieu of the cash payment. Assuming all existing shares converted
into stock of reorganized Reddy Holdings, following the
consummation of the Restructuring, holders of the existing common
stock of Reddy Holdings would initially hold roughly 2.0% of the
equity of reorganized Reddy Holdings (inclusive of the New
Preferred Stock on an as converted basis).
In the event that the Debtors consummate the Strategic
Acquisition, holders of the existing common stock of Reddy
Holdings who elected to receive shares of common stock of
reorganized Reddy Holdings will be entitled to an additional
distribution of shares of common stock of reorganized Reddy
Holdings.
The payments and the issuance of shares of reorganized Reddy
Holdings to the existing holders of common stock will be made from
the distributions made under the Plan to the holders of the Second
Lien Notes.
(E) Class A Common Stock
Under the Plan, Centerbridge will receive one share of class A
common stock of the reorganized Reddy Holdings. The holder of the
share of the class A common stock will be entitled to vote with
all voting securities of reorganized Reddy Holdings on all matters
submitted to the holders of voting securities for vote. The share
of class A common stock of reorganized Reddy Holdings will be
entitled to 10,000,000 votes. Class A common stock of reorganized
Reddy Holdings will not be entitled to the payment of any
dividends or distributions and is redeemable by Reddy Holdings for
$0.01 upon (x) the liquidation, dissolution or winding up of the
affairs of Reddy Holdings or (y) the consummation or termination
of the Strategic Acquisition.
(F) Other Claims
Holders of Reddy Holdings General Unsecured Claims, estimated
between $73.5 million and $130.5 million, may see 0% to 5%
recovery depending on their vote. According to the Plan
documents, if holders of Reddy Holdings General Unsecured Claims
vote as a class to accept the Plan, the holders of Allowed Second
Lien Notes Guarantee Deficiency Claims will waive their right to
participate in any distribution of the Reddy Holdings General
Unsecured Claim Settlement Payments, and the remaining holders of
Allowed Reddy Holdings General Unsecured Claims will receive their
Pro Rata share of the Reddy Holdings General Unsecured Claim
Settlement Payments. If the holders of Reddy Holdings General
Unsecured Claims vote as a class to reject the Plan, then on the
Effective Date the holders of Reddy Holdings General Unsecured
Claims will not receive anything.
The Debtors have provided all persons entitled to vote on the Plan
until May 9, 2012 at 5:00 p.m. (prevailing Eastern Time), to cast
their ballot.
The Debtors have asked the Court to hold a combined hearing to
approve the Disclosure Statement and confirm the Plan no later
than May 18, 2012.
A full-text copy of the Disclosure Statement explaining the
Debtors' Plan is available at http://is.gd/XcxONX
About Reddy Ice
Reddy Ice Holdings Inc. and wholly owned subsidiary Reddy Ice
Corp. manufacture and distribute packaged ice in the United
States. As of Dec. 31, 2011, the Company had assets totaling $434
million and total liabilities of $531 million. The bulk of the
liabilities were total debt outstanding of $471.5 million.
Reddy Holdings and Reddy Corp. on April 12, 2012, filed voluntary
Chapter 11 bankruptcy petitions (Bankr. N.D. Tex. Case Nos. 12-
32349 and 12-32350) together with a plan of reorganization and
accompanying disclosure statement to complete a previously
announced plan to strengthen its balance sheet and ensure strong
financial footing for the future. As part of the restructuring,
Reddy Ice seeks to pursue a strategic acquisition of all or
substantially all of the businesses and assets of Arctic Glacier
Income Fund and its subsidiaries, including Arctic Glacier Inc., a
major producer, marketer and distributor of packaged ice in North
America.
Arctic Glacier on Feb. 22, 2012, filed for protection under the
Companies' Creditors Arrangement Act in Canada and Chapter 15 of
the Bankruptcy Code in the United States. Arctic is seeking sale
or investment proposals from qualified bidders.
Judge Stacey G. Jernigan presides over the case. Reddy Ice's
legal advisor on the restructuring is DLA Piper LLP (US) and its
financial advisors are Jefferies & Company, Inc. and FTI
Consulting, Inc. Kurtzman Carson Consultants serves as claims and
notice agent.
Centerbridge Partners is represented by Jonathan S. Zinman, Esq.,
Joshua A. Sussberg, Esq., James H.M. Sprayregen, Esq., and Anup
Sathy, Esq., at Kirkland & Ellis.
Macquarie Bank Limited is represented by Sarah Hiltz Seewer, Esq.,
and David R. Seligman, Esq., also at Kirkland & Ellis.
The ad hoc group of First Lien and Second Lien Noteholders is
represented by Joshua Andrew Feltman, Esq., at Wachtell Lipton
Rosen & Katz. Wells Fargo Bank, National Association, serves as
First Lien and Second Lien Agent.
REDDY ICE: U.S. Trustee Forms Three-Member Creditors Committee
--------------------------------------------------------------
William T. Neary, U.S. Trustee for Region 6, appointed three
members to the Official Unsecured Creditors' Committee in the
Chapter 11 cases of Reddy Ice Holdings, Inc. and Reddy Ice
Corporation.
The Committee consists of:
1. Sharp Packaging
Attn: Micah McDowell , vice president of sales and
marketing
N. W. 22632 Village Dr.
Sussex, WI 53089
Tel: (800) 634-6359
E-mail: Micahm@sharppackaging.com
2. Thomas Beverage Co., Inc.
James F. Thomas, President
1941 Grand Ave
St Paul, MN 55105
Tel: (651) 699-1860
3. TSI&C, INC.
Attn: Joan Wagstaff, C.O.O
7309 Springfield Dr.
Plano, TX 75025
Tel: (214) 455-0483
E-mail: joan@tsic.us
About Reddy Ice
Reddy Ice Holdings Inc. and wholly owned subsidiary Reddy Ice
Corp. manufacture and distribute packaged ice in the United
States. As of Dec. 31, 2011, the Company had assets totaling $434
million and total liabilities of $531 million. The bulk of the
liabilities were total debt outstanding of $471.5 million.
Reddy Holdings and Reddy Corp. on April 12, 2012, filed voluntary
Chapter 11 bankruptcy petitions (Bankr. N.D. Tex. Case Nos. 12-
32349 and 12-32350) together with a plan of reorganization and
accompanying disclosure statement to complete a previously
announced plan to strengthen its balance sheet and ensure strong
financial footing for the future. As part of the restructuring,
Reddy Ice seeks to pursue a strategic acquisition of all or
substantially all of the businesses and assets of Arctic Glacier
Income Fund and its subsidiaries, including Arctic Glacier Inc., a
major producer, marketer and distributor of packaged ice in North
America.
Arctic Glacier on Feb. 22, 2012, filed for protection under the
Companies' Creditors Arrangement Act in Canada and Chapter 15 of
the Bankruptcy Code in the United States. Arctic is seeking sale
or investment proposals from qualified bidders.
Reddy Ice's Plan provides for the restructuring of the Company's
obligations with respect to $300 million of First Lien Notes;
$139.4 million of Second Lien Notes; and $11.7 million of Discount
Notes. If the Plan is approved, all Second Lien Notes will be
exchanged and will be retired and cancelled and all Discount Notes
will be cancelled. Reddy Ice said the Plan has the support of a
majority of its lenders and major creditors, led by Centerbridge
Capital Partners II, L.P. A hearing to approve the Disclosure
Statement and confirm the Plan has been set for May 18, 2012.
Judge Stacey G. Jernigan presides over the case. Reddy Ice's
legal advisor on the restructuring is DLA Piper LLP (US) and its
financial advisors are Jefferies & Company, Inc. and FTI
Consulting, Inc. Kurtzman Carson Consultants serves as claims and
notice agent.
Centerbridge Partners is represented by Jonathan S. Zinman, Esq.,
Joshua A. Sussberg, Esq., James H.M. Sprayregen, Esq., and Anup
Sathy, Esq., at Kirkland & Ellis.
Macquarie Bank Limited is represented by Sarah Hiltz Seewer, Esq.,
and David R. Seligman, Esq., also at Kirkland & Ellis.
The ad hoc group of First Lien and Second Lien Noteholders is
represented by Joshua Andrew Feltman, Esq., at Wachtell Lipton
Rosen & Katz. Wells Fargo Bank, National Association, serves as
First Lien and Second Lien Agent.
RENA LLC: Files for Chapter 11 Bankruptcy Protection
----------------------------------------------------
Thomas Grillo, real estate editor at Boston Business Journal,
reports that Rena LLC, a division of Hera Development Corp., filed
on April 22, 2012, for bankruptcy protection under Chapter 11 in
the U.S. Bankruptcy Court in Massachusetts.
According to the report, Rena LLC estimated under $50,000 in
assets and from $1 million to $10 million in debts. Rena owes
lender East West Bank $4.6 million and the city of Boston
$185,000.
The report says the bankruptcy filing came one day before a
foreclosure auction was scheduled on the property at 212 St. in
Boston where offices were planned. Hera bought the vacant
three-story property in 2007 for $6.5 million. A planned 2009
groundbreaking for the $30 million office building at the
shuttered Jae's restaurant and an adjacent parking lot never
took place.
The report notes an auction has been scheduled by Paul E.
Saperstein Co. on the property has been rescheduled for July 30.
The 3,317-square-foot parcel contains a 10,000-square-foot brick
building that has been gutted and requires a total rehab.
Rena LLC is a developer of a proposed 10-story office building in
Boston's Theatre District.
ROOFING SUPPLY: Moody's Reviews 'B2' CFR for Possible Downgrade
---------------------------------------------------------------
Moody's Investors Service has placed the ratings of Roofing Supply
Group, LLC's under review for possible downgrade. The review
follows the recent announcement by RSG that it has agreed to be
acquired by affiliates of Clayton, Dubilier & Rice, LLC.
Ratings Rationale
Moody's review will focus on the impact that the proposed
transaction will have on RSG's future capital structure, financial
strategy and credit metrics. Moody's will also assess the degree
to which the company's operating strategy will be able to sustain
the current level of earnings, cash flow generation and liquidity
under a new, potentially more levered capital structure. Certain
debt obligations including the credit facility and senior notes
contain change of control provisions. To the extent that any
existing debt is redeemed in its entirety under change of control
provisions Moody's will withdraw the respective debt instrument
ratings.
Ratings on review for potential downgrade:
B2 Corporate Family Rating;
B2 Probability of Default affirmed; and,
B3 (LGD4, 66%) $225 million Senior Secured Notes due 2017.
The principal methodology used in rating RSG was the Global
Distribution and Supply Chain Services Industry Methodology,
published in November 2011. Other methodologies used include Loss
Given Default for Speculative Grade Issuers in the US, Canada, and
EMEA, published June 2009.
Roofing Supply Group, LLC, headquartered in Dallas, TX, is one of
the largest wholesale distributors by revenues of roofing supplies
and related building materials in the United States. RSG provides
products directly from the manufacturer to roofing contractors,
home builders, retailers and other end users. Sterling Group, LP
through its respective affiliates, is the primary owner of RSG.
Revenues for the fiscal year ending December 31, 2011 totaled
about $0.9 billion.
ROOFING SUPPLY: S&P Puts 'B+' Corp. Credit Rating on Watch Neg
--------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Dallas-
based Roofing Supply Group LLC (RSG), including the 'B+' corporate
credit rating, on CreditWatch with negative implications. "The
CreditWatch listing indicates the rating could be either affirmed
or lowered following the completion of our analysis," S&P said.
'The CreditWatch follows RSG's announcement that its current
owner, The Sterling Group, had signed a definitive agreement to
sell its ownership interest in RSG to private equity firm Clayton,
Dubilier & Rice," said Standard & Poor's credit analyst Thomas
Nadramia. (Clayton, Dubilier & Rice is not rated.) While terms
were not yet disclosed, we think the transaction is likely to be
financed with a higher level of debt than currently exists,
resulting in an increase in the current debt leverage of 3.2x, and
possibly in an overall weaker financial risk profile for RSG," S&P
said.
"Roofing Supply Group is the fourth-largest wholesale distributor
of roofing supplies and related materials in the U.S. with a
network of 59 branches in 24 states," S&P said.
"We will monitor developments relating to this transaction and
will resolve the CreditWatch listing following a review of the pro
forma capital structure and financial risk profile of RSG. We
expect to meet with management and new ownership to assess any
change in business and financial strategies, as well as gaining an
additional understanding of the company's future financial policy
objectives. In addition, we will update our operating assumptions
based on current economic conditions and the outlook for new
housing starts and repair and remodeling activity," S&P said.
ROOMSTORE INC: Has Until June 7 to Propose Chapter 11 Plan
----------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Virginia
extended Roomstore, Inc.'s exclusive periods to file and solicit
acceptances for the proposed Chapter 11 Plan until June 7, 2012,
and Aug. 6, 2012, respectively. The Debtor has requested for
exclusivity extensions until Aug. 8, and Oct. 8, respectively.
About RoomStore Inc.
Richmond, Virginia-based RoomStore, Inc., operates retail
furniture stores and offers home furnishings through
Furniture.com, a provider of Internet-based sales opportunities
for regional furniture retailers. RoomStore was founded in 1992
in Dallas, Texas, with four retail furniture stores. With more
than $300 million in net sales for its fiscal year ending 2010,
RoomStore was one of the 30 largest furniture retailers in the
United States.
RoomStore filed for Chapter 11 bankruptcy (Bankr. E.D. Va. Case
No. 11-37790) on Dec. 12, 2011, following store-closing sales at
four of its retail stores, located in Hoover, Alabama;
Fayetteville, North Carolina; Tallahassee, Florida; and Baltimore,
Maryland. When it filed for bankruptcy, the Company operated a
chain of 64 retail furniture stores, including both large-format
stores and clearance centers in eight states: Pennsylvania,
Maryland, Virginia, North Carolina, South Carolina, Florida,
Alabama, and Texas. It also had five warehouses and distribution
centers located in Maryland, North Carolina, and Texas that
service the Retail Stores.
RoomStore also owns 65% of Mattress Discounters Group LLC, which
operates 83 mattress stores (as of Aug. 31, 2011) in the states of
Delaware, Maryland and Virginia and in the District of Columbia.
RoomStore acquired the Mattress Discounters stake after it filed
its second bankruptcy in 2008. Mattress Discounters sought
Chapter 11 relief on Sept. 10, 2008 (Bankr. D. Md. Case Nos.
08-21642 and 08-21644). It filed the first Chapter 11 bankruptcy
on Oct. 23, 2002 (Bankr. D. Md. Case No. 02-22330), and emerged on
March 14, 2003.
Judge Douglas O. Tice, Jr., presides over RoomStore's case.
Lawyers at Lowenstein Sandler PC and Kaplan & Frank, PLC serve as
the Debtor's bankruptcy counsel. FTI Consulting, Inc., serves as
the Debtor's financial advisors and consultants.
RoomStore's balance sheet at Aug. 31, 2011, showed $70.4 million
in total assets, $60.3 million in total liabilities, and
stockholders' equity of $10.1 million. The petition was signed by
Stephen Girodano, president and chief executive officer.
Liquidator Hilco Merchant Resources, Inc., is represented in the
case by Gregg M. Galardi, Esq., at DLA Piper LLP (US); and Robert
S. Westermann, Esq., and Sheila de la Cruz, Esq., at Hirschler
Fleischer, P.C.
The U.S. Trustee for Region 4 named seven members to the official
committee of unsecured creditors in the case.
SAAB CARS: Slowed on Parts Sale to Affiliate
--------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Saab Cars North America Inc., the U.S. unit of
bankrupt Swedish automaker Saab Automobile AB, sought U.S.
bankruptcy court approval to quickly sell its parts inventory to
an affiliate of the parent. Saab said in a court filing that
affiliate Saab Parts AB is setting up a subsidiary to take over
the task of distributing parts in the U.S. The affiliate offered
to buy the inventory of parts for about $2.5 million.
According to the report, the bankruptcy judge declined the request
for a May 16 auction where the affiliate would open the bidding
and would buy the assets absent higher and better offers.
Instead, a hearing is scheduled for May 16 in U.S. Bankruptcy
Court in Delaware to set up auction and sale procedures to test
whether anyone will make an offer more attractive than the
parent's.
About Saab Cars N.A.
More than 40 U.S.-based Saab dealerships have signed an
involuntary Chapter 11 bankruptcy petition for Saab Cars North
America, Inc., (Bankr. D. Del. Case No. 12-10344) on Jan. 30,
2012. The petitioners, represented by Wilk Auslander LLP, assert
claims totaling $1.2 million on account of "unpaid warranty and
incentive reimbursement and related obligations" and/or "parts and
warranty reimbursement." Leonard A. Bellavia, Esq., at Bellavia
Gentile & Associates, in New York, signed the Chapter 11 petition
on behalf of the dealers.
The dealers want the vehicle inventory and the parts business to
be sold, free of liens from Ally Financial Inc. and Caterpillar
Inc., and "to have an appropriate forum to address the claims of
the dealers," Leonard A. Bellavia said in an e-mail to Bloomberg
News.
Saab Cars N.A. is the U.S. sales and distribution unit of Swedish
car maker Saab Automobile AB. Saab Cars N.A. named in December an
outside administrator, McTevia & Associates, to run the company as
part of a plan to avoid immediate liquidation following its parent
company's bankruptcy filing.
Saab Automobile AB is a Swedish car manufacturer owned by Dutch
automobile manufacturer Swedish Automobile NV, formerly Spyker
Cars NV. Saab Automobile AB, Saab Automobile Tools AB and Saab
Powertain AB filed for bankruptcy on Dec. 19, 2011, after running
out of cash.
In its schedules, Saab Cars disclosed $48,194,482 in total assets
and $124,013,118 in total liabilities.
SAAB CARS: Has Deal With Cat Logistics on Cash Collateral
---------------------------------------------------------
Saab Cars North America, Inc., asks the U.S. Bankruptcy Court for
the District of Delaware to:
-- authorize the continuation of the parts sale business; and
-- approve its agreement with its parts administrator/lender
for use of cash collateral.
Pursuant to a certain Amended and Restated Logistics Services
Agreement, dated Aug. 1, 2000, as amended, between Caterpillar
Logistics Services LLC and the Debtor, Cat Logistics has provided
integrated logistics services in connection with the warehousing
and sale of the Parts Inventory.
To secure the obligations owed by the Debtor to Cat Logistics
under the LSA, the Debtor and Cat Logistics entered into a
Security Agreement dated June 28, 2011, through which the Debtor
granted Cat Logistics a first-priority security interest in
all of the Debtor's equipment, goods and inventory located
in a warehouse at 7055 Ambassador Drive, Allentown, Pennsylvania,
and all accounts, chattel paper, instruments and documents
pertaining thereto and all proceeds thereof.
Pursuant to an Amendment to Security Agreement and Interim
Inventory Services Agreement, effective Jan. 17, 2012, as further
amended effective Jan. 30, 2012, and March 21, 2012, the Debtor,
McTevia and Cat Logistics agreed to certain terms and conditions
for the continued sale of Parts Inventory under the LSA. The
terms and conditions included, among other things:
a) the creation of a parts escrow account by McTevia that would
serve as a depository for dealer prepayments for parts, which
prepayments would remain the property of the dealer until its
parts order was shipped and completed by Cat Logistics;
b) from the Parts Escrow Account, (i) payment of outstanding
and monthly fees and expenses under the LSA to Cat Logistics, and
(ii) a weekly payment to the Debtor for services and expenses in
managing the parts business that began at $18,320 and was
increased to $100,000 a week to enable the Debtor to cover
expenses of administration incurred in the chapter 11 case;
c) the grant of a security interest by the Debtor to Cat
Logistics in the Debtor's intransit Parts Inventory and the
proceeds thereof as additional collateral for the Debtor's
obligations to Cat Logistics under the LSA and the Interim Parts
Agreement, and as an inducement to Cat Logistics to pay the costs
of transporting the inventory from the US port to the Cat
Logistics Warehouse, costs which were otherwise the obligations of
the Debtor; and
d) the retention of surplus proceeds of parts sales in the
Parts Escrow Account as security for the Cat Logistics Debt, if
any (which included an asserted termination claim of approximately
$3.5 million) as determined and allowed in the chapter 11 case.
The term of the Interim Parts Agreement is set to expire on
April 27, 2012.
As of April 5, 2012, (i) the Parts Escrow Account held $4,342,554
in surplus funds for the benefit of Cat Logistics and $1,623,287
in Dealer funds for unshipped parts; and (ii) Cat Logistics held
$115,736 in unapplied funds received through the Parts Escrow
Account.
The Debtor and Cat Logistics have agreed on these terms of
adequate protection in exchange for the Debtor's use of the Debtor
cash collateral share:
a) The Debtor will be entitled to receive and use the Debtor
cash collateral share of $100,000 a week out of the Parts Escrow
Account commencing March 2, 2012;
b) The Debtor cash collateral share may be used to pay the
expenses reasonably necessary to administer the Chapter 11 case
and the Parts Business;
c) The right to use the Debtor Cash Collateral Share will
terminate upon, among other things: (i) the failure of the Debtor
to properly make a payment when due under the Interim Parts
Agreement, (ii) any failure by the Debtor to comply with any of
the terms of the order or the Interim Parts Agreement and failure
is not cured within three business days following receipt of
written notice of default; and (iii) if the Debtor has submitted
any materially inaccurate information to Cat Logistics.
The Debtor's ability to use the Debtor cash collateral share is
necessary to its continued operations and the administration of
the case. Without the use of the Debtor cash collateral share,
the Debtor would have insufficient funds to pay the expenses
necessary for the continued operation of its business, the
management and preservation of its assets and properties
and the administration of this chapter 11 case.
The Debtor set a May 2, 2012, hearing at 2:00 p.m. (ET) on its
request to use the cash collateral share. Objections, if any, are
due April 25, at 4:00 p.m.
In a separate filing, the Debtor opposed to Ally Financial Inc.'s
motion to prohibit use of cash collateral. The Debtor explained
that while the case is in its infancy, the Debtor is not selling
vehicles and therefore is not generating cash collateral allegedly
subject to the security interest of Ally.
Further, while Debtor disputes Ally's claim to the Heritage Sale
Proceeds, those funds are not needed by Debtor to operate its
business and Debtor is prepared to continue to hold the Heritage
Sale Proceeds in the special bank account pending the further
order of the Court. General Motors, Inc., disputes the GM
Receivable and the Debtor does not contemplate the payment of the
GM Receivable absent resort to litigation. Consequently, the GM
Receivable is not an issue.
About Saab Cars N.A.
More than 40 U.S.-based Saab dealerships have signed an
involuntary chapter 11 bankruptcy petition for Saab Cars North
America, Inc., (Bankr. D. Del. Case No. 12-10344) on Jan. 30,
2012. The petitioners, represented by Wilk Auslander LLP, assert
claims totaling $1.2 million on account of "unpaid warranty and
incentive reimbursement and related obligations" and/or "parts and
warranty reimbursement." Leonard A. Bellavia, Esq., at Bellavia
Gentile & Associates, in New York, signed the Chapter 11 petition
on behalf of the dealers.
Donlin, Recano & Company, Inc. (DRC), has been retained to provide
claims and noticing agent services to Saab Cars North America,
Inc. in its Chapter 11 case.
The dealers want the vehicle inventory and the parts business to
be sold, free of liens from Ally Financial Inc. and Caterpillar
Inc., and "to have an appropriate forum to address the claims of
the dealers," Leonard A. Bellavia said in an e-mail to Bloomberg
News.
Saab Cars N.A. is the U.S. sales and distribution unit of Swedish
car maker Saab Automobile AB. Saab Cars N.A. named in December an
outside administrator, McTevia & Associates, to run the company as
part of a plan to avoid immediate liquidation following its parent
company's bankruptcy filing.
Saab Automobile AB is a Swedish car manufacturer owned by Dutch
automobile manufacturer Swedish Automobile NV, formerly Spyker
Cars NV. Saab Automobile AB, Saab Automobile Tools AB and Saab
Powertain AB filed for bankruptcy on Dec. 19, 2011, after running
out of cash.
On Feb. 24, 2012, the Court, inconsideration of the petition filed
on Jan. 30, 2012, granted Saab Cars North America, Inc., relief
under Chapter 11 of the Bankruptcy Code.
On March 9, 2012, the U.S. Trustee formed an official Committee of
Unsecured Creditors and appointed these members: Peter Mueller
Inc., IFS Vehicle Distributors, Countryside Volkwagen, Saab of
North Olmstead, Saab of Bedford, Whitcomb Motors Inc., and
Delaware Motor Sales, Inc. The Committee tapped Wilk Auslander
LLP as general bankruptcy counsel, and Polsinelli Shughart as its
Delaware counsel.
SAAB CARS: Polsinelli Approved as Committee's Delaware Counsel
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
the Official Committee of Unsecured Creditors in the Chapter 11
case of Saab Cars North America, Inc., to retain Polsinelli
Shughart as its Delaware counsel.
Polsinelli has advised the Committee that the primary attorneys
and paralegals expected to represent the Committee and their
hourly rates are:
Christopher A. Ward, shareholder $440
Shanti M. Katona, associate $285
Lindsey M. Suprum, paralegal $190
The firm's personnel hourly rates are:
Shareholders $250 - $475
Associates and Senior Counsel $175 - $295
Paraprofessionals $75 - $200
Polsinelli has not received any retainer from the Debtor, the
Committee, or any other entity in the case.
About Saab Cars N.A.
More than 40 U.S.-based Saab dealerships have signed an
involuntary chapter 11 bankruptcy petition for Saab Cars North
America, Inc., (Bankr. D. Del. Case No. 12-10344) on Jan. 30,
2012. The petitioners, represented by Wilk Auslander LLP, assert
claims totaling $1.2 million on account of "unpaid warranty and
incentive reimbursement and related obligations" and/or "parts and
warranty reimbursement." Leonard A. Bellavia, Esq., at Bellavia
Gentile & Associates, in New York, signed the Chapter 11 petition
on behalf of the dealers.
Donlin, Recano & Company, Inc. (DRC), has been retained to provide
claims and noticing agent services to Saab Cars North America,
Inc. in its Chapter 11 case.
The dealers want the vehicle inventory and the parts business to
be sold, free of liens from Ally Financial Inc. and Caterpillar
Inc., and "to have an appropriate forum to address the claims of
the dealers," Leonard A. Bellavia said in an e-mail to Bloomberg
News.
Saab Cars N.A. is the U.S. sales and distribution unit of Swedish
car maker Saab Automobile AB. Saab Cars N.A. named in December an
outside administrator, McTevia & Associates, to run the company as
part of a plan to avoid immediate liquidation following its parent
company's bankruptcy filing.
Saab Automobile AB is a Swedish car manufacturer owned by Dutch
automobile manufacturer Swedish Automobile NV, formerly Spyker
Cars NV. Saab Automobile AB, Saab Automobile Tools AB and Saab
Powertain AB filed for bankruptcy on Dec. 19, 2011, after running
out of cash.
On Feb. 24, 2012, the Court, inconsideration of the petition filed
on Jan. 30, 2012, granted Saab Cars North America, Inc., relief
under Chapter 11 of the Bankruptcy Code.
On March 9, 2012, the U.S. Trustee formed an official Committee of
Unsecured Creditors and appointed these members: Peter Mueller
Inc., IFS Vehicle Distributors, Countryside Volkwagen, Saab of
North Olmstead, Saab of Bedford, Whitcomb Motors Inc., and
Delaware Motor Sales, Inc. The Committee tapped Wilk Auslander
LLP as general bankruptcy counsel, and Polsinelli Shughart as its
Delaware counsel.
SAAB CARS: Committee OK'd to Retain Wilk Auslander as Counsel
-------------------------------------------------------------
The U.S. Bankruptcy for the District of Delaware authorized the
Official Committee of Unsecured Creditors in the Chapter 11 case
of Saab Cars North America, Inc., to retain Wilk Auslander LLP as
its bankruptcy counsel.
Eric J. Snyder, Esq., a partner at WA, tells the Court that the
hourly rates of WA's personnel are:
Partners $485 - $650
Associates/ Senior Counsel $345 - $445
Paraprofessionals $190
The primary attorneys and paralegals expected to represent the
Committee and their respective hourly rates are:
Mr. Snyder $525
Zack Gross, associate $345
John Stauder, paralegal $190
About Saab Cars N.A.
More than 40 U.S.-based Saab dealerships have signed an
involuntary chapter 11 bankruptcy petition for Saab Cars North
America, Inc., (Bankr. D. Del. Case No. 12-10344) on Jan. 30,
2012. The petitioners, represented by Wilk Auslander LLP, assert
claims totaling $1.2 million on account of "unpaid warranty and
incentive reimbursement and related obligations" and/or "parts and
warranty reimbursement." Leonard A. Bellavia, Esq., at Bellavia
Gentile & Associates, in New York, signed the Chapter 11 petition
on behalf of the dealers.
Donlin, Recano & Company, Inc. (DRC), has been retained to provide
claims and noticing agent services to Saab Cars North America,
Inc. in its Chapter 11 case.
The dealers want the vehicle inventory and the parts business to
be sold, free of liens from Ally Financial Inc. and Caterpillar
Inc., and "to have an appropriate forum to address the claims of
the dealers," Leonard A. Bellavia said in an e-mail to Bloomberg
News.
Saab Cars N.A. is the U.S. sales and distribution unit of Swedish
car maker Saab Automobile AB. Saab Cars N.A. named in December an
outside administrator, McTevia & Associates, to run the company as
part of a plan to avoid immediate liquidation following its parent
company's bankruptcy filing.
Saab Automobile AB is a Swedish car manufacturer owned by Dutch
automobile manufacturer Swedish Automobile NV, formerly Spyker
Cars NV. Saab Automobile AB, Saab Automobile Tools AB and Saab
Powertain AB filed for bankruptcy on Dec. 19, 2011, after running
out of cash.
On Feb. 24, 2012, the Court, inconsideration of the petition filed
on Jan. 30, 2012, granted Saab Cars North America, Inc., relief
under Chapter 11 of the Bankruptcy Code.
On March 9, 2012, the U.S. Trustee formed an official Committee of
Unsecured Creditors and appointed these members: Peter Mueller
Inc., IFS Vehicle Distributors, Countryside Volkwagen, Saab of
North Olmstead, Saab of Bedford, Whitcomb Motors Inc., and
Delaware Motor Sales, Inc. The Committee tapped Wilk Auslander
LLP as general bankruptcy counsel, and Polsinelli Shughart as its
Delaware counsel.
SAAB CARS: Committee Withdraws Bid to Retain Bellavia Gentile
-------------------------------------------------------------
Christopher A. Ward, Esq. at Polsinelli Shughart, counsel for the
Official Committee of Unsecured Creditors in the Chapter 11 case
of Saab Cars North America, Inc., notified the U.S. Bankruptcy
Court for the District of Delaware that it has withdrawn its
application to retain Bellavia Gentile & Associates, LLP as
franchise and litigation counsel for the Committee.
About Saab Cars N.A.
More than 40 U.S.-based Saab dealerships have signed an
involuntary chapter 11 bankruptcy petition for Saab Cars North
America, Inc., (Bankr. D. Del. Case No. 12-10344) on Jan. 30,
2012. The petitioners, represented by Wilk Auslander LLP, assert
claims totaling $1.2 million on account of "unpaid warranty and
incentive reimbursement and related obligations" and/or "parts and
warranty reimbursement." Leonard A. Bellavia, Esq., at Bellavia
Gentile & Associates, in New York, signed the Chapter 11 petition
on behalf of the dealers.
Donlin, Recano & Company, Inc. (DRC), has been retained to provide
claims and noticing agent services to Saab Cars North America,
Inc. in its Chapter 11 case.
The dealers want the vehicle inventory and the parts business to
be sold, free of liens from Ally Financial Inc. and Caterpillar
Inc., and "to have an appropriate forum to address the claims of
the dealers," Leonard A. Bellavia said in an e-mail to Bloomberg
News.
Saab Cars N.A. is the U.S. sales and distribution unit of Swedish
car maker Saab Automobile AB. Saab Cars N.A. named in December an
outside administrator, McTevia & Associates, to run the company as
part of a plan to avoid immediate liquidation following its parent
company's bankruptcy filing.
Saab Automobile AB is a Swedish car manufacturer owned by Dutch
automobile manufacturer Swedish Automobile NV, formerly Spyker
Cars NV. Saab Automobile AB, Saab Automobile Tools AB and Saab
Powertain AB filed for bankruptcy on Dec. 19, 2011, after running
out of cash.
On Feb. 24, 2012, the Court, inconsideration of the petition filed
on Jan. 30, 2012, granted Saab Cars North America, Inc., relief
under Chapter 11 of the Bankruptcy Code.
On March 9, 2012, the U.S. Trustee formed an official Committee of
Unsecured Creditors and appointed these members: Peter Mueller
Inc., IFS Vehicle Distributors, Countryside Volkwagen, Saab of
North Olmstead, Saab of Bedford, Whitcomb Motors Inc., and
Delaware Motor Sales, Inc. The Committee tapped Wilk Auslander
LLP as general bankruptcy counsel, and Polsinelli Shughart as its
Delaware counsel.
SELECT TREE: Section 341(a) Meeting Scheduled for June 27
---------------------------------------------------------
The U.S. Trustee for Region 2 will convene a meeting of creditors
of Select Tree Farms, Inc. on June 27, 2012, 2:00 p.m. at Buffalo
UST - Olympic Towers.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
The Debtor had won permission from the Bankruptcy Court to use
cash collateral in which Evans Bank N.A. and Farm Credit East
A.C.A. assert a lien or security interest until March 26.
About Select Tree Farms
Select Tree Farms, Inc., filed a Chapter 11 petition (Bankr.
W.D.N.Y. Case No. 12-10669) on March 7, 2012. Select Tree Farms
scheduled $11,450,989 in assets and $5,959,983 in liabilities.
The petition was signed by George A. Schichtel, president.
The Debtor's owner, George A. Schichtel and Debra G. Schichtel,
filed for Chapter 11 bankruptcy on the same day (Bankr. W.D.N.Y.
Case No. 12-10670).
Judge Carl L. Bucki presides over the case. Beth Ann Bivona,
Esq., at Damon Morey LLP, serves as the Debtors' counsel.
SELECT TREE: Court Approves Nextpoint as Financial Adviser
----------------------------------------------------------
Select Tree Farms, Inc., sought and obtained approval from the
U.S. Bankruptcy Court to employ NextPoint LLC as financial
advisors.
The firm will, among others, provide these services:
a. provide recommendations regarding financial controls,
monitoring and oversight of the future operations of Select
Tree in connection with Select Tree's anticipated joint Plan
of Reorganization;
b. review and analyze financial information prepared by the
Debtors; and
c. provide such other services as Select Tree and NextPoint
may, from time-to-time, deem necessary or appropriate.
The firm's rates are:
Personnel Rates
--------- -----
Charles E. Maclay/ Partner $200
Dennis Donovan/Partner $200
Alan Pawlowski/Consultant $200
Various/Financial Analysis Support $125
According to papers filed by the Debtor in court, NextPoint has
fully exhausted a $2,500 retainer on account of services provided
before the bankruptcy filing.
Select Tree was obligated to NextPoint for prior invoices for pre-
petition services -- above those amounts satisfied by the $2,500
pre-petition retainer -- and is owed a total of $2,250. NextPoint
has agreed to waive this claim.
NextPoint is requesting a total post-petition retainer of $25,000,
which is proposed to be paid $5,000 per month.
The firm attests that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
About Select Tree Farms
Select Tree Farms, Inc., filed a Chapter 11 petition (Bankr.
W.D.N.Y. Case No. 12-10669) on March 7, 2012. Select Tree Farms
scheduled $11,450,989 in assets and $5,959,983 in liabilities.
The petition was signed by George A. Schichtel, president.
The Debtor's owner, George A. Schichtel and Debra G. Schichtel,
filed for Chapter 11 bankruptcy on the same day (Bankr. W.D.N.Y.
Case No. 12-10670).
Judge Carl L. Bucki presides over the case. Beth Ann Bivona,
Esq., at Damon Morey LLP, serves as the Debtors' counsel.
SELECT TREE: Court Approves Damon Morey as General Counsel
----------------------------------------------------------
Select Tree Farms, Inc., sought and obtained approval from the
U.S. Bankruptcy Court to employ Damon Morey LLP as general
counsel.
The firm will, among others, provide these services:
a. advise the Debtors of their rights, powers and duties as
debtors and debtors-in-possession continuing to operate
their businesses and properties under Chapter 11 of the
Bankruptcy Code;
b. prepare, on behalf of the Debtors, any necessary and
appropriate applications, motions, draft orders, other
pleadings, notices, schedules and other documents, and
reviewing financial and other reports to be filed in these
Chapter 11 cases; and
c. advise the Debtors concerning, and preparing responses to,
applications, motions, other pleadings, notices and other
papers that may be filed and served in the Chapter 11
cases.
The hourly rates being charged by Damon Morey for the attorneys
who will be primarily responsible for providing services to the
Debtors in connection with these proceedings are:
Personnel Rates
--------- -----
William F. Savino/General Partner $295
Beth Ann Bivona/ Special Partner $265
Robert C. Carbone/Associate $155
About Select Tree Farms
Select Tree Farms, Inc., filed a Chapter 11 petition (Bankr.
W.D.N.Y. Case No. 12-10669) on March 7, 2012. Select Tree Farms
scheduled $11,450,989 in assets and $5,959,983 in liabilities.
The petition was signed by George A. Schichtel, president.
The Debtor's owner, George A. Schichtel and Debra G. Schichtel,
filed for Chapter 11 bankruptcy on the same day (Bankr. W.D.N.Y.
Case No. 12-10670).
Judge Carl L. Bucki presides over the case. Beth Ann Bivona,
Esq., at Damon Morey LLP, serves as the Debtors' counsel.
SKINNY NUTRITIONAL: Expands Chain Authorizations
------------------------------------------------
Skinny Nutritional Corp. announced net revenues of $5,660,930 for
the year ended Dec. 31, 2011. This represents a decrease of
$1,266,178, or 18%, as compared to revenues of $6,927,108 for the
year ended Dec. 31, 2010. The Company sold 786,000 cases of
Skinny Water for the year ended Dec. 31, 2011, compared to 990,000
cases for the same period in 2010, a decrease of 21%.
These decreases are due primarily to the capital constraints
resulting in inventory gaps and a decrease in in-store activity,
as well as lowering the wholesale price to more adequately include
the effects of bill backs on a continuing basis. Direct sales to
retailers were $1,577,289 as compared to $847,177 for the prior
year period up 86%. Sales to the Company's "DSD" network were
$4,083,641 in 2011 compared to $6,079,931 during 2010.
Overall cash loss was reduced by approximately $1,259,000 during
2011. Net loss for the year ended Dec. 31, 2011, was $7,665,855
inclusive of non-cash expenses of $4,390,130, mostly attributable
to stock based compensation expense for employee options and
warrants, amortization of deferred financing costs and stock
issued for services, as compared to $6,914,269, inclusive of non-
cash expenses of $2,379,425, for the same period last year.
During 2011, the Company obtained significant chain authorizations
with retailers, and Skinny products have been authorized for sale
with retail accounts which our management believes aggregate
approximately 14,000 stores, including mass merchandisers,
supermarkets, drug stores and club stores. This is an increase of
97% from the 7,100 chain stores reported at the end of 2010.
Skinny Water is currently sold through 50 distributors across the
United States.
Michael Salaman, Chairman and CEO, stated "Now that we have the
national footprint through our expanded chains and our regional
DSD network, we expect that the recently signed manufacturing and
license agreement with Cott's Cliffstar subsidiary will allow
Skinny to capitalize on Cott's inventory management and purchasing
capabilities, which should even out the gaps that have limited our
sales growth during 2011. Our 2012 marketing and sales plan is to
focus our marketing and sales spending in core markets that
include Boston, New York City, Philadelphia, Washington-Baltimore,
Los Angeles, Miami, Chicago and San Francisco, while adding
national accounts in grocery, mass, drug throughout the country."
Mr. Salaman continued, "We are continuing our efforts to build
value around our Skinny Water brand, and today have numerous
trademarks in the healthy beverage and snack food categories. We
will continue to seek the acquisition of other Skinny trademarks
and slogans in beverage, snack and spirits categories in order to
further add to our trademark portfolio and enhance the "Skinny"
brand. According to recent Gallup polls, over 50% of all adult
consumers in the U.S. may be dieting at any given time. The
Company believes that consumers today are transitioning away from
sugar based beverages and empty calories and that Skinny
Nutritional Corp's, Skinny Water line of water products are well
positioned to benefit from this growing market trend and deliver
the best tasting zero calorie products. Further, we intend to
continue our efforts to control our selling, marketing and
administrative expenses as part of our overall cost containment
measures, as we strive to build shareholder value."
About Skinny Nutritional
Bala Cynwyd, Pa.-based Skinny Nutritional Corp. (OTC BB: SKNY.OB)
-- http://www.SkinnyWater.com/-- has developed and is marketing a
line of enhanced waters, all branded with the name "Skinny Water"
that are marketed and distributed primarily to calorie and weight
conscious consumers.
The Company reported a net loss of $7.66 million in 2011, compared
with a net loss of $6.91 million in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $2.27 million
in total assets, $4.01 million in total liabilities, all current,
and a $1.73 million stockholders' deficit.
For 2011, Marcum LLP, in Bala Cynwyd, Pennsylvania, expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
had a working capital deficiency of $3,165,596, an accumulated
deficit of $45,492,945, stockholders' deficit of $1,736,400 and no
cash on hand. The Company had net losses of $7,665,855 and
$6,914,269 for the years ended Dec. 31, 2011, and 2010,
respectively. Additionally, the Company is currently in arrears
under its obligation for the purchase of trademarks. Under the
agreement, the seller of the trademarks may choose to exercise
their legal rights against the Company's assets, which includes
the trademarks.
SMF ENERGY: Hiring Genovese Joblove & Battista as Counsel
---------------------------------------------------------
SMF Energy Corporation and its debtor-affiliates seek Court
authority to employ the law firm of Genovese Joblove & Battista,
P.A., as general bankruptcy counsel. The Debtors said GJB will
play an integral role in the first 21 days of the Chapter 11 case.
Among other things, the Debtors will need GJB's assistance in
stabilizing business operations, negotiating with key creditor
constituencies and addressing issues related to the "first day"
hearing and related orders.
"Without general bankruptcy counsel, the Debtors are technically
unable to proceed with this case," the Debtors' court filings
said.
Paul J. Battista, Esq., will lead GJB's legal team.
Among others, the Debtors will look to GJB to advise the Debtors
in connection with any contemplated sales of assets or business
combinations, including the negotiation of sales promotion,
liquidation, stock purchase, merger or joint venture agreements,
formulate and implement bidding procedures, evaluate competing
offers, draft appropriate corporate documents with respect to the
proposed sales.
Prior to the commencement of the Chapter 11 cases, the Debtors
sought the services of GJB principally with respect to advice
regarding restructuring matters in general, and the preparation
for and potential commencement and prosecution of a Chapter 11
cases for the Debtors. The firm was engaged on March 23, 2012,
and was provided an initial retainer of $75,000. On April 13,
2012, GJB received an additional retainer of $225,000. On April
13, 2012, GJB applied $125,000 of the retainer to its prepetition
fees and expenses, including an estimate of those fees and
expenses expected to be incurred from April 13 through the
Petition Date. As a result, GJB will have a retainer for the
Chapter 11 cases of $175,000, subject to adjustment depending on
the final reconciliation of prepetition fees and expenses against
the Prepetition Payment.
Mr. Battista attests that the shareholders, counsel and associates
of GJB (a) do not have any connection with any of the Debtors,
their affiliates, their creditors, the U.S. Trustee, any person
employed in the office of the U.S. Trustee, or any other party in
interest, or their attorneys and accountants; (b) are
"disinterested persons," as that term is defined in Section
101(14) of the Bankruptcy Code; and (c) do not hold or represent
any interest adverse to the Debtors' estate.
The hourly rates for the attorneys at GJB range from $195 to $595
per hour. The hourly rates of Mr. Battista, Mariaelena Gayo-
Guitian, Esq., Heather L. Harmon, Esq., and Alexandra D. Blye,
Esq., the attorneys who will be principally working on these
cases, are $595, $435, $410 and $225, respectively. The hourly
rates for the legal assistants at GJB range from $75 to $195.
About SMF Energy
SMF Energy Corporation, a provider of fuel and lubricants for the
trucking, manufacturing and construction industries, and three of
its subsidiaries filed for Chapter 11 bankruptcy (Bankr. S.D. Fla.
Lead Case No. 12-19084) on April 15, 2012. The affiliates are SMF
Services, Inc., H&W Petroleum Company, Inc., and Streicher Realty,
Inc. Fort Lauderdale, Florida-based SMF Energy -- dba Streicher
Mobile Fueling and SMF Generator Fueling Services -- disclosed
$37.0 million in assets and $25.17 million in liabilities as of
Dec. 31, 2011.
On March 22, 2012, the Company appointed Soneet Kapila of Kapila &
Company, Ft. Lauderdale, Florida, as its Chief Restructuring
Officer to direct the Company's efforts to increase revenues and
reduce expenses required by the decision to change the Company's
pricing structure.
Judge Raymond B. Ray oversees the case. Lawyers at Genovese
Joblove & Battista, P.A., serve as the Debtors' counsel. The
petition was signed by Soneet R. Kapila, the CRO.
SMF ENERGY: Asks Court to Approve Soneet Kapila as CRO
------------------------------------------------------
SMF Energy Corporation and its debtor-affiliates seek the entry of
a Court order, on an interim and final basis, approving the terms
of an engagement letter, effective as of March 20, 2012, between
SMF and Kapila & Company, and authorizing the engagement of Kapila
to provide restructuring management and advisory services,
including providing the services of Soneet R. Kapila to serve as
Chief Restructuring Officer of the Debtors.
The Debtors appointed Mr. Kapila as their CRO effective as of
March 20, 2012, and he has functioned in such capacity since that
time. Similarly, Kapila & Company has been providing
restructuring and advisory services to the Debtors since March 20
pursuant to the Engagement Letter.
Working collaboratively with the senior management team, the Board
of Directors and the Debtors' other professionals, Mr. Kapila and
his firm will assist the Debtors in evaluating and implementing
strategic and tactical options through the restructuring process.
The firm may substitute or add additional professionals as needed.
The Debtors noted that the progress made in the first 20 days of
the Chapter 11 cases will be a determinative factor in the
ultimate outcome of the cases. Mr. Kapila, as the Debtors' CRO,
will play an integral role in all of the key work streams during
this critical period. Among other things, the Debtors will need
Mr. Kapila's assistance, along with the assistance of the
professionals at Kapila & Company, in stabilizing business
operations, and defining the Debtors' path at the initial stages
of these cases.
The Engagement Letter provides that Kapila & Company will be
compensated for the services of Mr. Kapila and for providing
Additional Staff at these hourly rates:
Soneet R. Kapila $500
Melissa Davis $350
Joseph Gillis $270
Adam Jackson $230
The standard hourly rate for other Kapila & Company accounting and
consulting personnel to support the CRO in carrying out the
services needed to manage the cases range are between $100 and
$400 per hour.
On March 16, Kapila & Company received a $100,000 retainer from
SMF, which retainer was to be used to pay the final invoice for
the professional services performed and expenses incurred in
connection with services rendered by the CRO and Kapila & Company.
In anticipation of the bankruptcy filing, the firm submitted a
final invoice for professional services to the Debtors on April 13
for fees and expenses incurred through and including the time of
filing this bankruptcy proceeding of $165,885. Kapila & Company
applied the $100,000 pre-petition retainer to reduce the
outstanding balance due under the Final Invoice and received
payment of the balance of the Final Invoice of $65,885 on April
13. As a result, Kapila & Company was not owed any fees or
expenses as of the filing of the Chapter 11 cases.
On April 13, Kapila & Company also received a $225,000 retainer
for post-bankruptcy professional services to be performed on
behalf of the Debtors.
The firm will also seek reimbursement for reasonable and necessary
expenses.
The Debtors also have agreed to indemnify the firm.
Mr. Kapila attests that his firm is a "disinterested person" as
that term is defined in Section 101(14) of the Bankruptcy Code, as
modified by Section 1107(b).
About SMF Energy
SMF Energy Corporation, a provider of fuel and lubricants for the
trucking, manufacturing and construction industries, and three of
its subsidiaries filed for Chapter 11 bankruptcy (Bankr. S.D. Fla.
Lead Case No. 12-19084) on April 15, 2012. The affiliates are SMF
Services, Inc., H&W Petroleum Company, Inc., and Streicher Realty,
Inc. Fort Lauderdale, Florida-based SMF Energy -- dba Streicher
Mobile Fueling and SMF Generator Fueling Services -- disclosed
$37.0 million in assets and $25.17 million in liabilities as of
Dec. 31, 2011.
On March 22, 2012, the Company appointed Soneet Kapila of Kapila &
Company, Ft. Lauderdale, Florida, as its Chief Restructuring
Officer to direct the Company's efforts to increase revenues and
reduce expenses required by the decision to change the Company's
pricing structure.
Judge Raymond B. Ray oversees the case. Lawyers at Genovese
Joblove & Battista, P.A., serve as the Debtors' counsel. The
petition was signed by Soneet R. Kapila, the CRO.
SS&C TECHNOLOGIES: S&P Lowers Corporate Credit Rating to 'BB-'
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Windsor, Conn.-based financial software provider SS&C
Technologies Inc. to 'BB-' from 'BB'. The outlook is stable.
"At the same time, we assigned an issue rating of 'BB-' to the
company's proposed senior secured credit facilities, which include
a term loan A of $300 million, a term loan B-1 of $725 million, a
term loan B-2 of $100 million, and a $100 million revolving credit
facility. We assigned a recovery rating of '3' to the debt,
indicating our expectation of meaningful (50%-70%) recovery in
the event of default," S&P said.
"The downgrade reflects increased leverage -- partially offset by
an improved business profile -- associated with SS&C's announced
all-cash offer for U.K.-based hedge fund administrator GlobeOp
Financial Services S.A. for $949 million, along with its agreement
to acquire PORTIA, a financial software provider, from Thompson
Reuters for $170 million," S&P said.
"The ratings on SS&C reflect our expectation that after the
completion of the recently announced GlobeOp and PORTIA
acquisitions," said Standard & Poor's credit analyst Christian
Frank, "the company will have a 'fair' business risk profile,
resulting from a good position in the hedge fund administration
(HFA) industry, high recurring revenue, and EBITDA margin in the
high-30% area." S&P said, "We viewed the company as having a
'weak' business risk profile on a stand-alone basis. Offsets to
these strengths are its narrow market focus, exposure to the
cyclical financial services industry, and an 'aggressive'
financial profile. Prior to the acquisitions, we viewed its less
levered financial profile as 'significant.'"
"The stable outlook reflects our expectation that SS&C will
continue to generate consistent growth and FOCF, and that the
company will de-lever modestly over the coming year, largely
through EBITDA expansion. An upgrade is unlikely in the near term
given SS&C's current pro forma financial profile and its
acquisitive growth strategy," S&P said.
"We could lower the rating if the company does not reduce leverage
to the mid-4x area over the next 12 months, either due to
integration challenges or additional acquisitions," S&P said.
TDM RED: Case Summary & 13 Largest Unsecured Creditors
------------------------------------------------------
Debtor: TDM Red Road, LLC
5801 N.W. 151st Street, #201
Miami Lakes, FL 33014
Bankruptcy Case No.: 12-19293
Chapter 11 Petition Date: April 17, 2012
Court: United States Bankruptcy Court
Southern District of Florida (Miami)
Judge: Laurel M. Isicoff
Debtor's Counsel: Lawrence M. Schantz, Esq.
AARONSON SCHANTZ P.A.
100 SE 2 St. # 2700
Miami, FL 33131
Tel: (786) 594-3000
Fax: (305) 374-5428
E-mail: lschantz@aspalaw.com
Scheduled Assets: $3,411,387
Scheduled Liabilities: $5,382,358
A copy of the Company's list of its 13 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/flsb12-19293.pdf
The petition was signed by Todd Ruderman, managing member of Tarco
Red Road, LLC.
TELEPRO CARIBE: Case Summary & 16 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Telepro Caribe, Inc.
P.O. Box 1393
Saint Just, PR 00978
Bankruptcy Case No.: 12-02933
Chapter 11 Petition Date: April 17, 2012
Court: United States Bankruptcy Court
District of Puerto Rico (Old San Juan)
Debtor's Counsel: Wigberto Lugo Mender, Esq.
LUGO MENDER & CO
Centro Internacional De Mercadeo
Carr 165 Torre 1 Suite 501
Guaynabo, PR 00968
Tel: (787) 707-0404
E-mail: wlugo@lugomender.com
Scheduled Assets: $2,669,372
Scheduled Liabilities: $4,337,400
A copy of the Company's list of its 16 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/prb12-02933.pdf
The petition was signed by Jose R. Mora Nazario, president.
TOUCH AMERICA: Shareholders May See Chapter 11 Payout
-----------------------------------------------------
Peg Brickley at Dow Jones' DBR Small Cap reports that seven years
after being pronounced dead in a Delaware bankruptcy court, the
stock of Touch America may be worth something after all.
About Touch America
Headquartered in Butte, Montana, Touch America Holdings, Inc.,
through its principal operating subsidiary, Touch America, Inc.,
develops, owns, and operates data transport and Internet services
to commercial customers. The Company filed for chapter 11
protection (Bankr. D. Del. Case No. 03-11915) on June 19, 2003.
Maureen D. Luke, Esq., and Robert S. Brady, Esq., at Young Conaway
Stargatt & Taylor, LLP represent the Debtor. When the Company
filed for bankruptcy protection, it disclosed $631.4 million in
total assets and $554.2 million in total debts.
The Court confirmed the Debtors' Chapter 11 Plan on Oct. 6,
2004, and the Plan took effect on Oct. 19, 2004. According to
a regulatory filing with the Securities and Exchange Commission,
the plan returned about 65% to unsecured creditors. The Debtors
ceased operations on Feb. 29, 2004.
Brent C. Williams is the Plan Trustee pursuant to the confirmed
Plan. C. MacNeil Mitchell, Esq., at Winston & Strawn LLP and
Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor LLP
represents the Plan Trustee.
UNITED MARITIME: Moody's Says Barge Operations Sale Credit Neg.
---------------------------------------------------------------
Moody's Investors Service said that the planned sale of United
Maritime Group, LLC's ("UMG", B2 stable) inland river barge
operation, United Barge Line, LLC to Ingram Barge Company (not
rated) for $222 million is negative for the company's credit
profile. UMG's business profile will change and cash flow
generating capacity will meaningfully reduce with the divestiture
of its inland river barging operations. However, net proceeds
likely in excess of $200 million could fund the repayment of a
significant portion of UMG's indebtedness.
United Maritime Group, LLC, headquartered in Tampa, Florida,
through its wholly-owned operating companies, provides blue water
and brown water, Jones Act dry-bulk shipping services. UMG became
an independent company upon its buyout from TECO Energy, Inc. by a
group of private investors and its management. TECO remains the
largest customer of UMG.
U.S. COAL: S&P Withdraws 'CCC' Corp. Credit Rating at Request
-------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'CCC' corporate
credit rating on Lexington, Ky.-based U.S. Coal Corp. at the
company's request. "We do not rate any of U.S. Coal's debt," S&P
said.
VALDIVIA PRODUCE: Bankruptcy Case Dismissal Sought
--------------------------------------------------
The Packer reports that more than 40 companies have filed claims
against Hunts Point Tropicals Inc. totaling more than $1.2 million
under the Perishable Agriulture Commodities Act.
The U.S. Department of Agriculture also has filed an
administrative action under the PACA against Hunts Point
Tropicals. The USDA said the company failed to make full payment
promptly to 43 sellers in the total amount of $1,216,739.97 under
the PACA. The company, operating from Bronx, N.Y., purchased the
produce during the period July 2010 through June 2011.
According to the report, the federal bankruptcy judge on the case
ordered the sale of the units at New York City's famed Hunts Point
terminal market, designating the proceeds to be used to pay
creditors of Hunts Point Tropicals produce company, which filed
for Chapter 11 bankruptcy in May 2011.
The report notes the sale hit a snag when the market board
rejected a $1 million bid from C and J Bros. Inc. three times.
The board finally opted for a $750,000 bid from A&J Produce Corp.,
which is a major player on the terminal and holds a seat on the
market board. When the sale was challenged during the bankruptcy
proceeding, the judge said the issue wasn't under her jurisdiction
and would have to be decided by a state court.
The report says a state judge set a hearing on the matter for
April 16, but instead of filing a brief in the case the attorneys
for the terminal filed a motion for dismissal, effectively
stalling the proceeding.
The report adds Paul Gentile, an attorney representing some of the
creditors who filed PACA claims against Hunts Point Tropicals, is
representing C and J Bros. Mr. Gentile said he had 30 days to
file a response to the motion for dismissal, but he only took
three days because he wants to get the case rolling. Mr. Gentile
said the judge set oral arguments on the dismissal motion for
April 23.
The bankruptcy judge has said she will move forward regardless of
the status of the case in state court.
Based in Bronx, New York, Valdivia Produce Corp., dba Hunts Point
Tropical, filed for Chapter 11 protection (Bankr. S.D.N.Y. Case
No. 11-12265) on May 11, 2011. Jonathan S. Bodner, Esq., at
Neiger LLP, represents the Debtor. The Debtor estimated both
assets and debts of between $1 million and $10 million.
VELO HOLDINGS: Paymentech Says DIP Pact Gives Lenders Leverage
--------------------------------------------------------------
Paymentech, LLC, filed with the U.S. Bankruptcy Court for the
Southern District of New York a limited objection to Velo Holdings
Inc., et al.'s motion for interim and final orders (i) authorizing
the Debtors to obtain postpetition secured financing and to use
cash collateral, (ii) granting adequate protection to prepetition
secured lenders, (iii) modifying the automatic stay.
Paymentech related that the DIP Agreement cannot be approved on a
final basis because, among other things, the Debtors have made
representations and warranties in the DIP Agreement that are
false. Paymentech said that if the DIP Agreement were approved as
is, it would unfairly grant the DIP lenders excessive control and
leverage over the Debtors and the Chapter 11 cases, and unduly
prejudice the rights of other parties in interest, including
Paymentech. Thus, approving the DIP Agreement in its current form
is not in the best interests of the Debtors' estates.
Paymentech processes credit card and related online financial
transactions for the Debtors' Credit & Identity Theft Protection
Business and Lifestyle & Shopping Business. The ACU Business,
a/k/a Vertrue, is a direct marketing business that has been
investigated, sued and fined in connection with its aggressive
sales tactics against online shoppers.
The DIP Financing
As reported in the Troubled Company Reporter on April 9, 2012, the
Debtors have proposed to obtain postpetition financing from
Barclays Bank PLC, as administrative agent and collateral agent
for itself and a syndicate of financial institutions.
The Debtors have obtained interim approval of the DIP financing
and authority to use cash collateral securing their obligations to
their prepetition first lien lenders.
The right to use the cash collateral expires, among other things,
upon:
(a) the Debtors' failure to file by April 30, 2012, motions
with the Court seeking authorization to pursue the sales
of the Coverdell & Company, Inc. business and Neverblue
Communications, Inc. business and approving the bid
protections, auction process and sale procedures for such
sales;
(b) the Debtors' failure to file by April 16, 2012, an
application with the Court to employ a Chief
Restructuring Officer to supervise and direct a so-called
Harvest Transaction as defined in the DIP Agreement;
(c) the Debtors' failure to file with the Court by Aug. 20,
2012, a plan of reorganization in form and substance
reasonably satisfactory to the First Lien Prepetition
Agent;
(d) failure of the Debtors to obtain approval of the
disclosure statement respecting the Debtors' plan of
reorganization by Oct. 1, 2012;
(e) failure of the Debtors to obtain an order confirming the
Debtors' plan of reorganization by Nov. 16, 2012; and
(f) failure of the Debtors to have the plan of reorganization
declared effective by Nov. 30, 2012.
The DIP Facility consists of a superpriority senior secured
multiple-draw term loan facility made available to the Borrowers
in an aggregate principal amount of $40,000,000, and is comprised
of (i) an amount not to exceed $12,000,000 in the aggregate of
multiple draw new money term loans, or so-called Tranche A-1
Loans; (ii) an amount not to exceed $8,000,000 in the aggregate of
multiple draw new money term loans, or so-called Tranche A-2
Loans; and (iii) a dollar-for-dollar roll up of $20,000,000 in
respect of outstanding first lien prepetition debt.
The Interim Order permits the Debtors to borrow from the DIP
Lenders up to $5,000,000 in New Money DIP Loans and $5,000,000 in
Roll Up DIP Loans.
The Debtors also obtained interim authority to grant adequate
protection to the First Lien Lenders with respect to, inter alia,
all use and diminution in value of their collateral.
Barclays is also the administrative agent and collateral agent
under a First Lien Credit Agreement, dated as of Aug. 16, 2007.
Wilmington Trust, National Association, serves as administrative
agent and collateral agent under the Debtors' Second Lien Credit
Agreement, dated as of Aug. 16, 2007.
As of the bankruptcy filing date, the Debtors owe the First Lien
Lenders $373,350,703 in respect of loans made and $100,000 in
respect of letters of credit issued.
The DIP Credit Agreement provides that each of the Debtor forever
waives and releases any and all "claims", counterclaims, causes of
action, defenses and setoff rights against the First Lien
Prepetition Agent and each of the other First Lien Prepetition
Secured Parties, whether arising at law or in equity, including,
without limitation, any recharacterization, subordination,
avoidance or other claim arising under or pursuant to section 105
or chapter 5 of the Bankruptcy Code or under any other similar
provisions of applicable state or federal law.
The Debtors and Barclays have agreed upon (i) a form of budget for
the Debtors' ACU business and (ii) a form of budget for the
Debtors' Coverdell and Neverblue businesses, each projecting cash
flow for 13 weeks. On a monthly basis, the Debtors will provide
to the DIP Agent updated Budgets for the Budget Period in
substantially the same format as the previous Budgets.
The DIP liens are subject to a "Carve-Out" for (i) all fees
required to be paid to the Clerk of the Bankruptcy Court and to
the United States Trustee pursuant to 28 U.S.C. Sec. 1930(a), (ii)
fees and disbursements incurred by a chapter 7 trustee (if any)
under section 726(b) of the Bankruptcy Code in an amount not to
exceed $75,000, (iii) accrued but unpaid fees and expenses of
professionals retained by the Debtors or by an official committee
of unsecured creditors appointed in the case, incurred prior to an
Event of Default or Cash Collateral Termination Event and allowed
by the Bankruptcy Court, and (iv) after the occurrence and during
the continuance of an Event of Default or Cash Collateral
Termination Event, allowed and unpaid professional fees and
expenses incurred by (x) the Debtors, in an amount not to exceed
$600,000 or (y) the Creditors' Committee, subject to the
restrictions set forth in the Interim Order, in an amount not to
exceed $150,000.
The DIP Facility also provides that, as of the last day of each
month, Pro Forma EBITDA for the Debtors' CDNB Business on a
cumulative basis, measured from Jan. 1, 2012, through such date,
shall not be less than:
Period ending Minimum Pro Forma EBITDA
------------- ------------------------
April 30, 2012 $6,900,000
May 31, 2012 $8,500,000
June 30, 2012 $10,200,000
July 31, 2012 $12,300,000
August 31, 2012 $14,300,000
September 30, 2012 $16,500,000
October 31, 2012 $18,900,000
November 30, 2012 $21,200,000
The Debtors also agree not permit the sum of the amount of cash
and cash equivalents on hand plus the unused Tranche A-1 Loans
available for borrowing at such time to be less than $2,000,000 at
any time.
The members of the DIP lending consortium include:
* General Electric Capital Corporation,
* GoldenTree Capital Solutions Fund Financing,
* GoldenTree Capital Solutions Offshore Fund Financing,
* GoldenTree Credit Opportunities Financing I, Ltd.,
* GoldenTree 2004 Trust,
* GN3 SIP Limited,
* GoldenTree High Yield Value Fund Offshore 110 Limited,
* GoldenTree Credit Opportunities Second Financing, LTD.,
* Absalon II Limited,
* Unipension Invest F.M.B.A. High Yield Obligationer, and
* GoldenTree High Yield Value Fund Offshore (Strategic),
Ltd.
About Velo Holdings, V2V et al.
V2V Corp. is a premier direct marketing services company,
providing individuals and businesses with access to a wide-variety
of consumer benefits in the United States, Canada, and the United
Kingdom. V2V was founded in 1989 as a membership services company
that marketed its membership programs exclusively via
telemarketing and, after having nearly a decade of continued
growth, went public in 1996. In 2007, V2V was acquired by a
consortium of private equity firms led primarily by investing
affiliates of One Equity Partners.
Norwalk, Connecticut-based Velo Holdings Inc. and various
affiliates, including V2V, filed for Chapter 11 bankruptcy (Bankr.
S.D.N.Y. Case Nos. 12-11384 to 12-11386 and 12-11388 to 12-11398)
on April 2, 2012. The debtor-affiliates are V2V Holdings LLC,
Coverdell & Company, Inc., V2V Corp., LN Inc., FYI Direct Inc.,
Vertrue LLC, Idaptive Marketing LLC, My Choice Medical Holdings
Inc., Adaptive Marketing LLC, Interactive Media Group (USA) Ltd.,
Brand Magnet Inc., Neverblue Communications Inc., and Interactive
Media Consolidated Inc.
Judge Martin Glenn presides over the case. Lawyers at Dechert LLP
serve as the Debtors' counsel. The Debtors' financial advisors
are Alvarez & Marsal Securities LLC. The Debtors' investment
banker is Alvarez & Marsal North America, LLC.
Quinn Emanuel Urquhart & Sullivan, LLP, serves as the Debtors'
special counsel. Epiq Bankruptcy Solutions serves as the
Debtors' claims agent. Velo Holdings estimated $100 million to
$500 million in assets and $500 million to $1 billion in debts.
The petitions were signed by George Thomas, general counsel.
Lawyers at Willkie Farr & Gallagher LLP represent Barclays, the
First Lien Prepetition Agent and the DIP Agent. The First Lien
Prepetition Agent and DIP Agent also has hired FTI Consulting,
Inc. Sidley Austin LLP represents the Second Lien Prepetition
Agent.
Tracy Hope Davis, U.S. Trustee for Region 2, appointed three
unsecured creditors to serve on the Official Committee of
Unsecured Creditors of Velo Holdings Inc., et al
VITAMINSPICE INC: Notes of Forgeries by Petitioners
---------------------------------------------------
VitaminSpice, Inc. disclosed that the U.S. Bankruptcy Court for
the Eastern District of Pennsylvania has dismissed the involuntary
bankruptcy petition that was filed against the company by its
former attorney Jehu Hand, Ray Suprenard, Jeremiah Hand, John
Robison, and Esthetics World.
The Honorable Court further ordered that a hearing be held
regarding attorneys' fees and damages. Furthermore, the Court
Ordered that a hearing be scheduled to hear VitaminSpice's "Bad
Faith" Motion regarding the filing of the petition. According to
VitaminSpice, the Motions filed before the court included explicit
documents provided to the court that demonstrated forgeries by
petitioners, specifically Jehu Hand. One of the most outrageous
documents that VitaminSpice provided is a back dated and notarized
(by Jehu Hand's assistant, Kimberly Peterson) that was submitted
to the offices of The United States Federal Court for the Eastern
District of Pennsylvania's District Court Judge, Michael Baylson.
During the proceedings, petitioner John Robison admitted to
providing investment funds via Kevin Lee Woodbridge, a convicted
felon on securities violations. According to the SEC website,
Woodbridge was banned for life from working with any public
company in addition to Woodbridge's incarceration.
The Court will schedule a separate hearing to allow the parties to
augment the present record with regard to the issue of whether
VitaminSpice is entitled to fees and costs pursuant to 11 U.S.C.
section 303(i). At that time, the Court will consider the issue
of bad faith as it relates to VitaminSpice's Section 303(i)
requests, stated the Judge Madeline D. Coleman in documents issued
by the court. VitaminSpice, by and through its attorneys will be
submitting actual, compensatory, and punitive damage claims
against all parties that filed the involuntary petition.
About VitaminSpice
VitaminSpice Inc. is uniquely positioned between the $150 billion
health food/vitamin supplement industry and the multi-trillion-
dollar traditional food industry. A pioneer in the emerging
FoodCeutical Industry, VitaminSpice sells vitamin-, mineral- and
antioxidant-infused spices and food products. Their offerings
include Crushed Red Pepper, Ground Black Pepper, Italian
Seasoning, Ground Cinnamon and Granulated Garlic. A proprietary
micro-encapsulation process keeps vitamin properties locked
inside, even when heated, allowing the seasonings, condiments, and
food products to retain their full flavor.
Five creditors filed an involuntary Chapter 11 petition (Bankr.
E.D. Pa. Case No. 16200) against Wayne, Pennsylvania-based
VitaminSpice aka Qualsec on Aug. 5, 2011. The creditors, owed
roughly $414,000 in the aggregate, are: John Robison in
Philadelphia, Pennsylvania; IBT South Florida, LLC, in Fort
Lauderdale, Florida; Learned J. Hand in Chapel Hill, North
Carolina; and Jehu Hand in Dana Point, California; and Esthetics
World in Cheyenne, Wyoming. Judge Magdeline D. Coleman presides
over the case. Peter Edward Sheridan, Esq., in Philadelphia,
Pennsylvania, represents the petitioning creditors.
W.R. GRACE: First Qtr. Net Sales Up 8.4% to $754.4 Million
----------------------------------------------------------
W. R. Grace & Co. announced earnings of $60.9 million, or $0.80
per diluted share, for first quarter ended March 31, 2012.
Comparable earnings for the prior-year quarter were $54.2 million,
or $0.72 per diluted share. Adjusted EPS of $0.88 per diluted
share increased 12.8 percent from $0.78 per diluted share in the
prior-year quarter.
First quarter net sales of $754.4 million increased 8.4 percent
compared with the prior-year quarter. The increase was due to
improved pricing (+8.4 percent) and higher sales volumes (+1.5
percent), partially offset by currency translation (-1.5 percent).
Sales in the emerging regions represented 33 percent of sales and
grew 14 percent compared with the prior-year quarter.
"We are off to a good start in 2012. We are performing in line
with our plan, led by strong results in our catalysts and
construction products businesses." said Fred Festa, Grace's
Chairman and Chief Executive Officer. "We are well positioned to
take advantage of new opportunities to move our business forward
and deliver another year of solid earnings growth."
Gross profit of $277.1 million increased 9.8 percent compared with
the prior-year quarter primarily due to improved pricing and
productivity, offset by higher raw materials costs. Gross margin
of 36.7 percent increased 40 basis points compared with the prior-
year quarter and increased 180 basis points sequentially.
A full text copy of the company press release is available free at
http://is.gd/mQxPmt
About W.R. Grace
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -
- http://www.grace.com/-- supplies catalysts and silica products,
especially construction chemicals and building materials, and
container products globally.
The company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace obtained confirmation of a plan co-proposed with the
Official Committee of Asbestos Personal Injury Claimants, the
Official Committee of Equity Security Holders, and the Asbestos
Future Claimants Representative. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. Implementation of the Plan has
been held up by appeals in District Court from various parties,
including a group of prepetition bank lenders and the Official
Committee of Unsecured Creditors.
District Judge Ronald Buckwalter on Jan. 31, 2012, entered an
order affirming the bankruptcy court's confirmation of W.R. Grace
& Co. and its debtor affiliates' Plan of Reorganization.
Bankruptcy Judge Judith Fitzgerald had approved the Plan on
Jan. 31, 2011.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
WEST FRASER: S&P Affirms 'BB+' Corp. Credit Rating; Outlook Stable
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on West
Fraser Timber Co. Ltd. (WFT) to stable from positive. At the same
time, Standard & Poor's affirmed its 'BB+' long-term corporate
credit and senior secured debt ratings on the company. The '3'
recovery rating on the senior secured debt is unchanged,
reflecting S&P's expectation of meaningful (50%-70%) recovery in
the event of default.
"The outlook revision reflects our expectations of the company's
credit metrics temporarily weakening in the near term, followed by
a more robust recover in 2013 stemming from favorable long-term
fundamentals," said Standard & Poor's credit analyst Jatinder
Mall.
"The ratings on WFT reflect Standard & Poor's view of the
company's position as a leading North American lumber producer,
its low-cost lumber operations, high degree of fiber integration,
good product diversity, and low leverage. These strengths are
somewhat offset, in our opinion, by the company's participation
in the north American cyclical housing construction market,
shrinking annual allowable cuts in British Columbia subsequent to
the mountain pine beetle infestation, and volatile pulp markets,"
S&P said.
"WFT is an integrated wood products company with operations in
western Canada and the southern U.S. Although its core business is
lumber production, it also produces panels, pulp, and newsprint.
The company has an annual production capacity of 5.7 billion board
feet of lumber and 1.15 million metric tons of pulp capacity," S&P
said.
"The stable outlook reflects our expectations that while WFT's
credit metrics will deteriorate slightly in the near term due to
industrywide factors, its debt levels should remain stable.
Furthermore, we believe the company's debt levels will remain flat
despite expected high capital expenditure in the next two years.
An upgrade would require improvement in the company's business
risk profile, either as a result of improved U.S. housing starts
leading to a sustained leverage ratio of about 1.5x, or a change
in the company's asset mix resulting in more stable EBITDA
generation. We could lower the ratings on WFT if lumber and pulp
prices decline sharply, or if log costs relative to product
prices do not return to historical norms, resulting in lower
EBITDA generation and a leverage ratio of about 3x on a sustained
basis," S&P said.
WINCHESTER'S HIGHLAND: Tissa Wants Case Dismissed for "Bad Faith"
-----------------------------------------------------------------
The Bankruptcy Court will convene a hearing May 2, 2012, to
consider the request of Tissa CT Corp. to dismiss the Chapter 11
case of Winchester's Highland Ridge Estates L.L.C.
Tissa CT Corp., a secured creditor, has asked the Court (i) for
relief from the automatic stay and to require the Debtor to comply
with the requirements of 11 U.S.C. Sec. 362(d)(3) within 90 days
of the petition date; or (ii) to dismiss the bankruptcy case as
"nothing more than a litigation tactic intended to frustrate the
legitimate process of a non-bankruptcy forum."
Tissa CT Corp. is represented by Harry Schochat, Esq., in
Woodbridge, Connecticut.
A Meeting of Creditors under 11 U.S.C. Sec. 341(a) was scheduled
in the case for April 16. Proofs of claim are due July 16.
About Winchester's Highland
Oxford, Connecticut-based Winchester's Highland Ridge Estates
L.L.C. filed a bare-bones Chapter 11 petition (Bankr. D. Conn.
Case No. 12-30612) in New Haven on March 16, 2012. The Debtor, a
Single Asset Real Estate as defined in 11 U.S.C. Sec. 101 (51B),
disclosed $14.8 million in assets and liabilities of $9.07
million. The Highlands Ridge Estates and St. Anne's Country
Club., a residential land development and golf course, is valued
at $14.8 million and serves as collateral to a $6.7 million first
lien debt to TISSA Funding Corp.
Winchester Estates, L.L.C. filed a separate Chapter 11 petition
(Case No. 12-30611).
Chief Judge Lorraine Murphy Weil oversees the case. The Debtor is
represented by Kenneth E. Lenz, Esq., at The Lenz Law Firm. The
petitions were signed by Aurora Rosa, managing member. Ms. Rosa
is also listed in the petition as one of two unsecured creditors
holding the largest claims. She is owed $2 million. The other is
TD Bank, N.A., owed $175,000.
* Creditor's Suit Dismissed for Non-Disclosure of Payments
----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that a lawsuit brought in bankruptcy court by a creditor
named Cadle Co. was dismissed because the company never disclosed
it had paid the bankruptcy trustee's lawyer for 28 months. U.S.
Bankruptcy Judge Stacey G. Jernigan in Dallas also said that Cadle
and the lawyer didn't disclose that for more than a year the
company was paying "both sides' lawyers' fees in litigation in
which it was a party."
Because of the failure to disclose payments and the adverse
interests, Judge Jernigan dismissed a suit where Cadle was the
plaintiff. The case involved an individual who filed bankruptcy
in 2006.
Cadle's business involves purchasing claims and judgments against
bankrupts. In this case, Cadle had purchased a judgment against
the bankrupt individual and later won a victory when the
bankruptcy court denied discharge of the bankrupt's debt. Cadle's
Dallas law firm, Bell Nunnally & Martin LLP, was hired as special
counsel for the bankruptcy trustee with the understanding that it
would be paid only from lawsuit recoveries. The judge learned
later that Cadle had been paying the Bell firm for more than two
years without disclosure to the bankruptcy court, the trustee or
creditors. In addition, Cadle was paying both the trustee's
lawyers and its own for a period of time when Cadle was opposing
the trustee.
Andrew Emerson, an attorney for Cadle from Palmer & Manuel LLP in
Dallas, said his client "vigorously disagrees with the opinion."
Given that the appeals court reversed Jernigan on a different
issue earlier in the case, "Cadle is confident that this decision
will be reversed on appeal," Mr. Emerson said.
The case is Cadle Co. v. Brunswick Homes LLC (In re Moore),
06-3417, U.S. Bankruptcy Court, Northern District of Texas
(Dallas).
* Moody's Says Healthcare Reform to Hit Not-for-Profit Hospitals
----------------------------------------------------------------
If the US Supreme Court strikes down healthcare reform's
individual mandate, it would remove the law's most positive
feature for not-for-profit hospitals, says Moody's Investors
Service in a new report.
"A ruling that the individual mandate to purchase health insurance
is unconstitutional would heighten credit risk for not-for-profit
hospitals, which are the vast majority of community hospitals in
the US," said Moody's Vice President-Senior Analyst Mark Pascaris,
author of the report. "This uncertainty -- in an already pressured
operating environment --continues to drive our negative outlook on
the sector."
This would be the case even if the remaining provisions of the
Patient Protection and Affordable Care Act are upheld, according
to Moody's.
The report, issued by Moody's Public Finance Group, focuses on the
survival or fall of the mandate, including the extent to which its
elimination -- even if the law's other positive features are
allowed to stand -- would be a clear credit negative for the not-
for-profit healthcare sector. It would also be a credit negative
for the for-profit hospital sector, stated Moody's Corporate
Finance Group in an earlier report.
In its entirety, the healthcare reform law is considered by
Moody's a long-term credit negative for the not-for-profit
healthcare sector as it reduces Medicare payments to hospitals and
comes with new forms of payment models such as bundled payments
that also lower reimbursement to hospitals.
"Removing the mandate would make the negative features of reform
loom much larger compared to the remaining positive elements,"
said Mr. Pascaris. "Requiring individuals to obtain insurance
would reduce significantly the uncompensated care delivered by
hospitals, and reduce expensive emergency room visits."
The report does not preclude that some credit positives for
hospital providers could be realized if only the mandate is found
unconstitutional and other sections of the law pass constitutional
muster. It is not certain, however, that the law can achieve its
central goal without the mandate, its chief funding mechanism.
"If the court overturns the individual mandate, the private health
insurance market likely would weaken under the weight of the law's
strict provisions to cover all those who seek insurance," said Mr.
Pascaris. "It would lose the counterbalancing benefit of the
mandate, which provides contributors from a new, largely healthy,
population segment."
New and further reforms and changes in funding and regulation
would then have to be considered by policymakers and industry
professionals, according to Moody's.
The report is entitled "Supreme Decision: Prohibition of
Individual Mandate Would Remove Healthcare Reform's Best Feature
for Hospitals".
* Recent Small-Dollar & Individual Chapter 11 Filings
-----------------------------------------------------
In re Caroline Yaghmourian
Bankr. C.D. Calif. Case No. 12-13152
Chapter 11 petition filed April 4, 2012
In re Patricia West
Bankr. C.D. Calif. Case No. 12-21996
Chapter 11 petition filed April 4, 2012
In re Paul Giuntini
Bankr. C.D. Calif. Case No. 12-22116
Chapter 11 petition filed April 4, 2012
In re Gursharn Sidhu
Bankr. N.D. Calif. Case No. 12-52568
Chapter 11 petition filed April 4, 2012
In re John Whigham
Bankr. S.D. Ga. Case No. 12-30123
Chapter 11 petition filed April 4, 2012
In re General Investments, Inc.
Bankr. D. Hawaii Case No. 12-00745
Chapter 11 petition filed April 4, 2012
See http://bankrupt.com/misc/hib12-00745.pdf
represented by: Harrison P. Chung, Esq.
Law Office of Harrison P. Chung
E-mail: hpchawaii@msn.com
In re Vernon Cantwell
Luz M. Cantwell
Bankr. E.D. La. Case No. 12-11040
Chapter 11 petition filed April 4, 2012
In re Karlton Sollers
Danielle Sollers
Bankr. D. Md. Case No. 12-16375
Chapter 11 petition filed April 4, 2012
In re Wendy Lee
Bankr. D. Nev. Case No. 12-14019
Chapter 11 petition filed April 4, 2012
In re Allegro Enterprises of Old Bridge, Inc.
dba Allegro Refreshments
Bankr. D.N.J. Case No. 12-18934
Chapter 11 petition filed April 4, 2012
See http://bankrupt.com/misc/njb12-18934.pdf
represented by: Allen I. Gorski, Esq.
E-mail: agorski@teichgroh.com
In re Big Bear Foods Corp.
Bankr. D.N.J. Case No. 12-18986
Chapter 11 petition filed April 4, 2012
See http://bankrupt.com/misc/njb12-18986.pdf
represented by: William L. Boyd, Esq.
Boyd & Boyd
E-mail: boyd-boyd1369@msn.com
In re Fama's Nursery & Landscaping, Inc.
Bankr. D.N.J. Case No. 12-18995
Chapter 11 petition filed April 4, 2012
See http://bankrupt.com/misc/njb12-18995.pdf
represented by: Robert C. Nisenson, Esq.
Robert C. Nisenson, LLC
E-mail: rnisenson@aol.com
In re Block 12892 Realty Corp.
Bankr. E.D.N.Y. Case No. 12-42493
Chapter 11 petition filed April 4, 2012
See http://bankrupt.com/misc/nyeb12-42493.pdf
represented by: Adam L. Rosen, Esq.
Silverman Acampora LLP
In re America's Management Co., LLC
Bankr. W.D.N.C. Case No. 12-10287
Chapter 11 petition filed April 4, 2012
See http://bankrupt.com/misc/ncwb12-10287.pdf
represented by: David G. Gray, Esq.
E-mail: judyhj@wgcdlaw.com
In re Memphis New Life Holiness, Church of the Nazarene
Bankr. W.D. Tenn. Case No. 12-23589
Chapter 11 petition filed April 4, 2012
See http://bankrupt.com/misc/tnwb12-23589.pdf
represented by: Eugene G. Douglass, Esq.
E-mail: egdouglass@bellsouth.net
In re Bowden Insurance Agency, Inc.
Bankr. N.D. Tex. Case No. 12-42095
Chapter 11 petition filed April 4, 2012
See http://bankrupt.com/misc/txnb12-42095.pdf
represented by: Areya Holder, Esq.
Law Office of Areya Holder, P.C.
E-mail: areya@holderlawpc.com
In re Anthony Griffin, Inc.
Bankr. S.D. Texas Case No. 12-80185
Chapter 11 petition filed April 4, 2012
See http://bankrupt.com/misc/txsb12-80185.pdf
represented by: Anthony P. Griffin, Esq.
E-mail: agriffin@agriffinlawyers.com
In re Joseph Oladokun
Bankr. D. Ariz. Case No. 12-07178
Chapter 11 petition filed April 5, 2012
In re Robert Palmer
Bankr. C.D. Calif. Case No. 12-18503
Chapter 11 petition filed April 5, 2012
In re Trimco Finish, Inc.
Bankr. C.D. Calif. Case No. 12-14331
Chapter 11 petition filed April 5, 2012
See http://bankrupt.com/misc/cacb12-14331.pdf
represented by: Stephen R. Wade, Esq.
The Law Offices of Stephen R. Wade
E-mail: dlr@srwadelaw.com
In re Bennie Gonsalves
Bankr. E.D. Calif. Case No. 12-13090
Chapter 11 petition filed April 5, 2012
In re John Caldwell
Bankr. N.D. Calif. Case No. 12-43042
Chapter 11 petition filed April 5, 2012
In re Gary Slagle
Mary Slagle
Bankr. D. Md. Case No. 12-16500
Chapter 11 petition filed April 5, 2012
In re Bharadwag Harry
Bankr. D. Mont. Case No. 12-60529
Chapter 11 petition filed April 5, 2012
In re Santiago Paredez
Bankr. D. Nev. Case No. 12-14069
Chapter 11 petition filed April 5, 2012
In re Louis Wilson
Bankr. E.D.N.C. Case No. 12-02666
Chapter 11 petition filed April 5, 2012
In re Scott Lockamy
Bankr. E.D.N.C. Case No. 12-02693
Chapter 11 petition filed April 5, 2012
In re Go Way Pineville, LLC
Bankr. W.D.N.C. Case No. 12-30821
Chapter 11 petition filed April 5, 2012
See http://bankrupt.com/misc/ncwb12-30821p.pdf
See http://bankrupt.com/misc/ncwb12-30821c.pdf
represented by: James H. Henderson, Esq.
James H. Henderson, P.C.
E-mail: henderson@title11.com
In re Jose Mendez Torres
Bankr. D. P.R. Case No. 12-02693
Chapter 11 petition filed April 5, 2012
In re Adam Nash
Bankr. M.D. Tenn. Case No. 12-03305
Chapter 11 petition filed April 5, 2012
In re Stephen Hearrell
Bankr. E.D. Tex. Case No. 12-40910
Chapter 11 petition filed April 5, 2012
In re Maximum Home Health, LLC
Bankr. S.D. Texas Case No. 12-70214
Chapter 11 petition filed April 5, 2012
See http://bankrupt.com/misc/txsb12-70214.pdf
represented by: J. Francisco Tinoco, Esq.
Law Office of J.F. Tinoco
E-mail: tinoco@sotxlaw.com
In re W.F.R., Inc.
Bankr. W.D. Tex. Case No. 12-51128
Chapter 11 petition filed April 5, 2012
See http://bankrupt.com/misc/txwb12-51128.pdf
represented by: James Samuel Wilkins, Esq.
Willis & Wilkins, LLP
E-mail: jwilkins@stic.net
In re Ragibommanahali Sundaresh
Bankr. E.D. Va. Case No. 12-12217
Chapter 11 petition filed April 5, 2012
In re Wilbur McDonald
Bankr. E.D. Va. Case No. 12-71492
Chapter 11 petition filed April 5, 2012
In re Jason Wisniewski
Bankr. D. Ariz. Case No. 12-07266
Chapter 11 petition filed April 6, 2012
In re Manoochehr Namdar
Bankr. C.D. Calif. Case No. 12-13299
Chapter 11 petition filed April 6, 2012
In re Azucena Zipagan
Bankr. N.D. Calif. Case No. 12-52647
Chapter 11 petition filed April 6, 2012
In re Howard Albritton
Bankr. M.D. Fla. Case No. 12-05269
Chapter 11 petition filed April 6, 2012
In re Kimball Wetherington
Bankr. M.D. Fla. Case No. 12-05312
Chapter 11 petition filed April 6, 2012
In re S&Z LLC
Bankr. M.D. Fla. Case No. 12-04645
Chapter 11 petition filed April 6, 2012
See http://bankrupt.com/misc/flmb12-04645.pdf
represented by: Monica Robertson-Udokwu, Esq.
Anderson and Associates PA
E-mail: monica@andersonandassocpa.com
In re William Adkins
Bankr. M.D. Fla. Case No. 12-05303
Chapter 11 petition filed April 6, 2012
In re Joseph Fehsenfeld
Bankr. N.D. Ill. Case No. 12-14158
Chapter 11 petition filed April 6, 2012
In re Lance Johnson
Bankr. D. Kan. Case No. 12-20912
Chapter 11 petition filed April 6, 2012
In re Hunter Construction, LLC
Bankr. D. Md. Case No. 12-16564
Chapter 11 petition filed April 6, 2012
See http://bankrupt.com/misc/mdb12-16564.pdf
represented by: William F. Hickey, III, Esq.
Law Office of William F. Hickey, LLC
E-mail: wfhickey@hickey-law.com
In re Sabah & Randy, Inc.
Bankr. E.D. Mich. Case No. 12-48770
Chapter 11 petition filed April 6, 2012
See http://bankrupt.com/misc/mieb12-48770.pdf
represented by: Robert N. Bassel, Esq.
E-mail: bbassel@gmail.com
In re Mohsen Aref
Bankr. D. Nev. Case No. 12-14097
Chapter 11 petition filed April 6, 2012
In re Ameet Rana
Bankr. E.D.N.C. Case No. 12-02720
Chapter 11 petition filed April 6, 2012
In re Erin Enterprises, Ltd.
Bankr. E.D.N.C. Case No. 12-02718
Chapter 11 petition filed April 6, 2012
See http://bankrupt.com/misc/nceb12-02718.pdf
represented by: Danny Bradford, Esq.
Paul D. Bradford, PLLC
E-mail: dbradford@bradford-law.com
In re Susan Beaty
Bankr. E.D. Tenn. Case No. 12-11793
Chapter 11 petition filed April 6, 2012
In re DPM Davis
Bankr. W.D. Tex. Case No. 12-51138
Chapter 11 petition filed April 6, 2012
In re John von App
Bankr. D. Utah Case No. 12-24377
Chapter 11 petition filed April 6, 2012
In re Aaron's Family Limited Partnership
Bankr. D. Ariz. Case No. 12-07371
Chapter 11 petition filed April 9, 2012
See http://bankrupt.com/misc/azb12-07371.pdf
represented by: J. Kent Mackinlay, Esq.
Warnock, Mackinlay & Carman, PLLC
E-mail: kent@mackinlaylawoffice.com
In re Joanne Summa
Bankr. D. Ariz. Case No. 12-07367
Chapter 11 petition filed April 9, 2012
In re Michele LaBlonde
Bankr. D. Ariz. Case No. 12-07315
Chapter 11 petition filed April 9, 2012
In re C & T Trucking, LLC
Bankr. W.D. Ark. Case No. 12-71434
Chapter 11 petition filed April 9, 2012
See http://bankrupt.com/misc/arwb12-71434.pdf
represented by: John M. Blair, Esq.
Association Of Attorneys For Debt Relief
E-mail: melisechilders@hotmail.com
In re Victor Gomez
Bankr. C.D. Calif. Case No. 12-22516
Chapter 11 petition filed April 9, 2012
In re Augustine Pena
Bankr. E.D. Calif. Case No. 12-13170
Chapter 11 petition filed April 9, 2012
In re MDC 5, LLC
Bankr. M.D. Fla. Case No. 12-04678
Chapter 11 petition filed April 9, 2012
See http://bankrupt.com/misc/flmb12-04678.pdf
represented by: David R. McFarlin, Esq.
Wolff, Hill, McFarlin & Herron, P.A
E-mail: dmcfarlin@whmh.com
In re Samuel Acosta
Bankr. S.D. Fla. Case No. 12-18581
Chapter 11 petition filed April 9, 2012
In re Mary Jane Fait
Bankr. N.D. Ill. Case No. 12-14330
Chapter 11 petition filed April 9, 2012
In re Salon Bliss, Inc.
dba Salon Bliss & Day Spa
Bankr. D. Kan. Case No. 12-20928
Chapter 11 petition filed April 9, 2012
See http://bankrupt.com/misc/ksb12-20928.pdf
represented by: Richard C. Wallace, Esq.
Evans & Mullinix, P.A.
E-mail: richard@evans-mullinix.com
In re Olguine Claude
Bankr. D. Mass. Case No. 12-13003
Chapter 11 petition filed April 9, 2012
In re Avita Artesian Water, LLC
dba Avita Water, LLC
dba Avita Water
dba Avita
Bankr. E.D. Mich. Case No. 12-21190
Chapter 11 petition filed April 9, 2012
See http://bankrupt.com/misc/mieb12-21190.pdf
represented by: Donald C. Darnell, Esq.
E-mail: dondarnell@darnell-law.com
In re Adeyemi Williams
Bankr. E.D.N.Y. Case No. 12-42572
Chapter 11 petition filed April 9, 2012
In re Sackett St. Holding Corp.
aka Sackett St. Garage Corp.
Bankr. S.D. N.Y. Case No. 12-11467
Chapter 11 petition filed April 9, 2012
filed pro se
See http://bankrupt.com/misc/nysb12-11467.pdf
In re Saint Catherine Hospital of Pennsylvania, LLC
dba Saint Catherine Medical Center of Fountain Springs
Bankr. M.D. Pa. Case No. 12-02073
Chapter 11 petition filed April 9, 2012
See http://bankrupt.com/misc/pamb12-02073.pdf
represented by: John H. Doran, Esq.
Doran & Doran, P.C.
E-mail: jdoran@doran-law.net
In re Karen Russo
Bankr. W.D. Pa. Case No. 12-21832
Chapter 11 petition filed April 9, 2012
In re Eddie Yeh
Bankr. W.D. Tenn. Case No. 12-10997
Chapter 11 petition filed April 9, 2012
In re Chung Dai
Bankr. D. Utah Case No. 12-24412
Chapter 11 petition filed April 9, 2012
In re Phyllis Cook-Gregory
Bankr. N.D. W.Va. Case No. 12-00504
Chapter 11 petition filed April 9, 2012
In re GRO Industries, Inc.
Bankr. D. Ariz. Case No. 12-07365
Chapter 11 petition filed April 9, 2012
represented by: Bernard M. Strass, Esq.
Strass Law Office, Ltd.
E-mail: strasslawoffice@yahoo.com
In re Desperado's Steakhouse, Inc.
Bankr. N.D. Ala. Case No. 12-70731
Chapter 11 petition filed April 10, 2012
See http://bankrupt.com/misc/alnb12-70731p.pdf
See http://bankrupt.com/misc/alnb12-70731c.pdf
represented by: Herbert M. Newell, III, Esq.
Newell & Associates LLC
E-mail: hnewell@newell-law.com
In re Claire Levine
Bankr. C.D. Calif. Case No. 12-22639
Chapter 11 petition filed April 10, 2012
In re Joel Hynek
Bankr. C.D. Calif. Case No. 12-13382
Chapter 11 petition filed April 10, 2012
In re LGA Home Health Care Inc.
Bankr. C.D. Calif. Case No. 12-22721
Chapter 11 petition filed April 10, 2012
See http://bankrupt.com/misc/cacb12-22721.pdf
represented by: Robert G. Schwartz, Esq.
E-mail: saidtbc@yahoo.com
In re Tami Monica
Bankr. C.D. Calif. Case No. 12-18926
Chapter 11 petition filed April 10, 2012
In re San Diego Ambulatory Surgical Center, LLC
Bankr. S.D. Calif. Case No. 12-05130
Chapter 11 petition filed April 10, 2012
See http://bankrupt.com/misc/casb12-05130.pdf
represented by: Donald Merkin, Esq.
Merkin & Associates
In re Westwood SD, Inc.
Bankr. S.D. Calif. Case No. 12-05129
Chapter 11 petition filed April 10, 2012
See http://bankrupt.com/misc/casb12-05129.pdf
represented by: Julian McMillan, Esq.
McMillan Law Group
E-mail: julian@mcmillanlawgroup.com
In re Norman Graham
Bankr. M.D. Fla. Case No. 12-02403
Chapter 11 petition filed April 10, 2012
In re The Paper Element, Inc.
Bankr. C.D. Ill. Case No. 12-90569
Chapter 11 petition filed April 10, 2012
See http://bankrupt.com/misc/ilcb12-90569.pdf
represented by: Jason S. Bartell, Esq.
Bartell, Barickman & Powell, LLP
E-mail: jbartell@jbar2.com
In re Brian Bacardi
Bankr. N.D. Ill. Case No. 12-14517
Chapter 11 petition filed April 10, 2012
In re Rodrigo Mosquera
Bankr. D.N.J. Case No. 12-19366
Chapter 11 petition filed April 10, 2012
In re Steven Winters
Bankr. D.N.J. Case No. 12-19395
Chapter 11 petition filed April 10, 2012
In re Vincent Gialanella
Bankr. D.N.J. Case No. 12-19371
Chapter 11 petition filed April 10, 2012
In re Michelle Bennett
Bankr. E.D.N.C. Case No. 12-02770
Chapter 11 petition filed April 10, 2012
In re KDT Grading, Inc.
Bankr. M.D.N.C. Case No. 12-50530
Chapter 11 petition filed April 10, 2012
See http://bankrupt.com/misc/ncmb12-50530.pdf
represented by: Phillip E. Bolton, Esq.
E-mail: phillipbolton@bellsouth.net
In re Construction Services of Erie, Inc.
dba Floor Decor of Erie
dba C.S.C., Inc.
Bankr. W.D. Pa. Case No. 12-10518
Chapter 11 petition filed April 10, 2012
See http://bankrupt.com/misc/pawb12-10518.pdf
represented by: Jeffrey G. Herman, Esq.
E-mail: JeffreyHerman@Live.com
In re Westbourne Associates LLC
Bankr. D. R.I. Case No. 12-11219
Chapter 11 petition filed April 10, 2012
filed pro se
See http://bankrupt.com/misc/rib12-11219.pdf
In re Leonard Pluemer
Bankr. W.D. Wis. Case No. 12-12041
Chapter 11 petition filed April 10, 2012
In re Curtis Ench
Bankr. D. Ariz. Case No. 12-07736
Chapter 11 petition filed April 12, 2012
In re Dean Barnella
Bankr. D. Ariz. Case No. 12-07820
Chapter 11 petition filed April 12, 2012
In re Enrique Wismann
Bankr. D. Ariz. Case No. 12-07672
Chapter 11 petition filed April 12, 2012
In re BWTL Enterprises, LLC
Bankr. C.D. Calif. Case No. 12-23067
Chapter 11 petition filed April 12, 2012
See http://bankrupt.com/misc/cacb12-23067.pdf
represented by: Giovanni Orantes, Esq.
Orantes Law Firm, P.C.
E-mail: go@gobklaw.com
In re Free in Christ Community Christian Center
dba Free in Christ Community Christian Center
California Religious Corporation
Bankr. C.D. Calif. Case No. 12-19033
Chapter 11 petition filed April 12, 2012
filed pro se
See http://bankrupt.com/misc/cacb12-19033.pdf
In re Ramon Garcia
Bankr. C.D. Calif. Case No. 12-11499
Chapter 11 petition filed April 12, 2012
In re Alfonso Pulido
Bankr. E.D. Calif. Case No. 12-27154
Chapter 11 petition filed April 12, 2012
In re Linda Ciampoli
Bankr. D. Nev. Case No. 12-50839
Chapter 11 petition filed April 12, 2012
In re Mott Creek, LLC
Bankr. E.D.N.Y. Case No. 12-42687
Chapter 11 petition filed April 12, 2012
filed pro se
See http://bankrupt.com/misc/nyeb12-42687.pdf
In re English Bakery & Sweet Inc.
dba Bukhara Restaurant & Sweets
Bankr. S.D. N.Y. Case No. 12-11517
Chapter 11 petition filed April 12, 2012
See http://bankrupt.com/misc/nysb12-11517.pdf
represented by: Khagendra Gharti Chhetry, Esq.
Chhetry & Associates, P.C.
E-mail: khunu@aol.com
In re David Wilson
Bankr. M.D. Tenn. Case No. 12-03529
Chapter 11 petition filed April 12, 2012
In re Elizabeth Maxwell
Bankr. M.D. Tenn. Case No. 12-03525
Chapter 11 petition filed April 12, 2012
In re Elizabeth Maxwell
Bankr. M.D. Tenn. Case No. 12-03528
Chapter 11 petition filed April 12, 2012
In re Equilibrium Medspa, LLC
Bankr. M.D. Tenn. Case No. 12-03526
Chapter 11 petition filed April 12, 2012
See http://bankrupt.com/misc/tnmb12-03526.pdf
represented by: Steven L. Lefkovitz, Esq.
Law Offices Lefkovitz & Lefkovitz
E-mail: slefkovitz@lefkovitz.com
In re Gale Markham
Bankr. M.D. Tenn. Case No. 12-03530
Chapter 11 petition filed April 12, 2012
In re James Corporation
Bankr. W.D. Wash. Case No. 12-13775
Chapter 11 petition filed April 12, 2012
See http://bankrupt.com/misc/wawb12-13775.pdf
represented by: Robert A. Garrison, Esq.
GSJones Law Group PS
E-mail: bob@gsjoneslaw.com
In re Alvin Souza
Bankr. E.D. Calif. Case No. 12-13341
Chapter 11 petition filed April 13, 2012
In re Willowbrook Holdings, LLC
Bankr. D. Conn. Case No. 12-50688
Chapter 11 petition filed April 13, 2012
See http://bankrupt.com/misc/ctb12-50688.pdf
represented by: Stephen P. Wright, Esq.
Harlow, Adams, and Friedman
E-mail: spw@quidproquo.com
In re Sun Aviation Services, LLC
Bankr. D. Dela. Case No. 12-11242
Chapter 11 petition filed April 13, 2012
See http://bankrupt.com/misc/deb12-11242.pdf
represented by: Christopher Page Simon, Esq.
Cross & Simon, LLC
E-mail: csimon@crosslaw.com
In re Harold Brandner
Bankr. M.D. Fla. Case No. 12-02501
Chapter 11 petition filed April 13, 2012
In re Dom & Dom Pizza, Inc.
dba Gino's Pizza
Bankr. S.D. Fla. Case No. 12-19075
Chapter 11 petition filed April 14, 2012
See http://bankrupt.com/misc/flsb12-19075.pdf
represented by: Peter D. Spindel, Esq.
E-mail: peterspindel@gmail.com
In re Majorca Isles Master Association, Inc.
Bankr. S.D. Fla. Case No. 12-19056
Chapter 11 petition filed April 13, 2012
See http://bankrupt.com/misc/flsb12-19056p.pdf
See http://bankrupt.com/misc/flsb12-19056c.pdf
represented by: Bradley S. Shraiberg, Esq.
E-mail: bshraiberg@sfl-pa.com
In re Ming-Ching Tseng
Bankr. S.D. Fla. Case No. 12-18973
Chapter 11 petition filed April 13, 2012
In re Andrew Kim
Bankr. D. Md. Case No. 12-16945
Chapter 11 petition filed April 13, 2012
In re Carlos Garcia
Bankr. D. Mass. Case No. 12-41403
Chapter 11 petition filed April 13, 2012
In re L & M Machine, Inc.
Bankr. D. Mass. Case No. 12-13170
Chapter 11 petition filed April 13, 2012
See http://bankrupt.com/misc/mab12-13170.pdf
represented by: Nina M. Parker, Esq.
Parker & Associates
E-mail: nparker@ninaparker.com
In re LTI Electronics, Inc.
Bankr. D.N.J. Case No. 12-19775
Chapter 11 petition filed April 13, 2012
See http://bankrupt.com/misc/njb12-19775.pdf
represented by: David S. Catuogno, Esq.
Forman Holt Eliades Ravin & Youngman LLC
E-mail: dcatuogno@formanlaw.com
In re Kolath Hotels and Casinos, Inc.
Bankr. N.D. N.Y. Case No. 12-10986
Chapter 11 petition filed April 13, 2012
See http://bankrupt.com/misc/nynb12-10986.pdf
represented by: Francis J. Brennan, Esq.
Nolan & Heller, LLP
E-mail: fbrennan@nolanandheller.com
In re Billy Baty
Bankr. E.D.N.C. Case No. 12-02870
Chapter 11 petition filed April 13, 2012
In re AC Industrial Services Corp.
Bankr. D.P.R. Case No. 12-02858
Chapter 11 petition filed April 13, 2012
See http://bankrupt.com/misc/prb12-02858.pdf
represented by: Wanda I. Luna Martinez, Esq.
E-mail: quiebra@gmail.com
In re Gregory Salyer
Bankr. E.D. Tenn. Case No. 12-50716
Chapter 11 petition filed April 13, 2012
In re Benjamin Chamu
Bankr. D. Utah Case No. 12-24668
Chapter 11 petition filed April 13, 2012
In re Caroline Yaghmourian
Bankr. C.D. Calif. Case No. 12-13152
Chapter 11 petition filed April 4, 2012
In re Patricia West
Bankr. C.D. Calif. Case No. 12-21996
Chapter 11 petition filed April 4, 2012
In re Paul Giuntini
Bankr. C.D. Calif. Case No. 12-22116
Chapter 11 petition filed April 4, 2012
In re Gursharn Sidhu
Bankr. N.D. Calif. Case No. 12-52568
Chapter 11 petition filed April 4, 2012
In re John Whigham
Bankr. S.D. Ga. Case No. 12-30123
Chapter 11 petition filed April 4, 2012
In re General Investments, Inc.
Bankr. D. Hawaii Case No. 12-00745
Chapter 11 petition filed April 4, 2012
See http://bankrupt.com/misc/hib12-00745.pdf
represented by: Harrison P. Chung, Esq.
Law Office of Harrison P. Chung
E-mail: hpchawaii@msn.com
In re Vernon Cantwell
Luz M. Cantwell
Bankr. E.D. La. Case No. 12-11040
Chapter 11 petition filed April 4, 2012
In re Karlton Sollers
Danielle Sollers
Bankr. D. Md. Case No. 12-16375
Chapter 11 petition filed April 4, 2012
In re Wendy Lee
Bankr. D. Nev. Case No. 12-14019
Chapter 11 petition filed April 4, 2012
In re Allegro Enterprises of Old Bridge, Inc.
dba Allegro Refreshments
Bankr. D.N.J. Case No. 12-18934
Chapter 11 petition filed April 4, 2012
See http://bankrupt.com/misc/njb12-18934.pdf
represented by: Allen I. Gorski, Esq.
E-mail: agorski@teichgroh.com
In re Big Bear Foods Corp.
Bankr. D.N.J. Case No. 12-18986
Chapter 11 petition filed April 4, 2012
See http://bankrupt.com/misc/njb12-18986.pdf
represented by: William L. Boyd, Esq.
Boyd & Boyd
E-mail: boyd-boyd1369@msn.com
In re Fama's Nursery & Landscaping, Inc.
Bankr. D.N.J. Case No. 12-18995
Chapter 11 petition filed April 4, 2012
See http://bankrupt.com/misc/njb12-18995.pdf
represented by: Robert C. Nisenson, Esq.
Robert C. Nisenson, LLC
E-mail: rnisenson@aol.com
In re Block 12892 Realty Corp.
Bankr. E.D.N.Y. Case No. 12-42493
Chapter 11 petition filed April 4, 2012
See http://bankrupt.com/misc/nyeb12-42493.pdf
represented by: Adam L. Rosen, Esq.
Silverman Acampora LLP
In re America's Management Co., LLC
Bankr. W.D.N.C. Case No. 12-10287
Chapter 11 petition filed April 4, 2012
See http://bankrupt.com/misc/ncwb12-10287.pdf
represented by: David G. Gray, Esq.
E-mail: judyhj@wgcdlaw.com
In re Memphis New Life Holiness, Church of the Nazarene
Bankr. W.D. Tenn. Case No. 12-23589
Chapter 11 petition filed April 4, 2012
See http://bankrupt.com/misc/tnwb12-23589.pdf
represented by: Eugene G. Douglass, Esq.
E-mail: egdouglass@bellsouth.net
In re Bowden Insurance Agency, Inc.
Bankr. N.D. Tex. Case No. 12-42095
Chapter 11 petition filed April 4, 2012
See http://bankrupt.com/misc/txnb12-42095.pdf
represented by: Areya Holder, Esq.
Law Office of Areya Holder, P.C.
E-mail: areya@holderlawpc.com
In re Anthony Griffin, Inc.
Bankr. S.D. Texas Case No. 12-80185
Chapter 11 petition filed April 4, 2012
See http://bankrupt.com/misc/txsb12-80185.pdf
represented by: Anthony P. Griffin, Esq.
E-mail: agriffin@agriffinlawyers.com
In re Maplewood Manor LLC
Bankr. N.D. Ill. Case No. 12-15472
Chapter 11 petition filed April 17, 2012
Filed pro se
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers"
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors" Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise
Marie Varquez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R.
Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman,
Editors.
Copyright 2012. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
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