/raid1/www/Hosts/bankrupt/TCR_Public/120502.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, May 2, 2012, Vol. 16, No. 121
Headlines
4KIDS ENTERTAINMENT: To Assume Agreement with CW Network
ACE AVIATION: Announces Results of the Annual and Special Meeting
ADAMS PRODUCE: Unable to Work Out Chapter 11 Financing
ADAMS PRODUCE: Case Summary & 20 Largest Unsecured Creditors
AEP INDUSTRIES: S&P Affirms 'B' Corporate Credit Rating
ALLEN PARK, MI: S&P Affirms 'B' Rating on General Obligation Bonds
ALLEN SYSTEMS: S&P Affirms 'B' Corp. Credit Rating; Outlook Neg
ALLSCRIPTS HEALTHCARE: S&P Alters Outlook on BB- Rating to Neg
ALLY FINANCIAL: Sees Up to $1.25BB in Losses in Rescap Bankruptcy
ALLY FINANCIAL: S&P Raises Rating on Preferred Stock to 'CCC+'
AMERICAN AIRLINES: Files FRBP 2015.3 Report as of Dec. 31
AMERICAN ROCK: S&P Lowers Corp. Credit Rating to 'B-'; Outlook Neg
AMG PATTERSON: Voluntary and Involuntary Cases Dismissed
BARRINGTON BROADCASTING: S&P Raises Corp. Credit Rating to 'B+'
BERNARD L. MADOFF: Clients Must Return 2Yrs Worth of Phony Profits
BERNARD L. MADOFF: Judge Drops Claims in 4 Clawback Suits
BERNARD L. MADOFF: UBS Unit, Others Want $2BB Clawback Suit Nixed
BPP TEXAS: Protests WisDOT's Attempt to Seize Property
BROUGHTON LP: Lawyers Entitled to Fees Even If Transactions Fail
BUFFETS INC: New Plan Has Creditor Support, Confirmation June 13
CANO PETROLEUM: Reports Oil and Gas Reserves as of July 2011
CDC CORP: Hedge Fund Sues CDC Software Over Alleged Smear Campaign
CHOCTAW GENERATION: S&P Lowers Rating on $321-Mil. Certs. to 'CC'
CITY SITE ESTATES: PwC Appointed as Receiver for Developer
CLIFFS CLUB: Carlile Joined by Two Others in Buying Clubs
COFFEYVILLE RESOURCES: S&P Affirms 'B+' Corporate Credit Rating
CONTAINER STORE: S&P Assigns 'B-' Corporate Credit Rating
CONTRACT RESEARCH: Epiq Bankruptcy OK'd as Administrative Agent
CONTRACT RESEARCH: Has Until May 11 to File Schedules, Statements
CONTRACT RESEARCH: Jefferies & Company OK'd as Financial Advisors
COREL CORP: S&P Affirms 'B-' Corp. Credit Rating; Outlook Stable
COXWELL & BLEVINS: Case Summary & 20 Largest Unsecured Creditors
DEWEY & LEBOEUF: Bienenstock Denies Plans to File for Bankruptcy
DHC GROUP: A.M. Best Affirms 'bb-' Issuer Credit Rating
DILL'S STAR: Case Summary & 20 Largest Unsecured Creditors
DISCOVERY INSURANCE: A.M Best Affirms 'bb' Issuer Credit Rating
DOLLAR GENERAL: S&P Lifts Corp. Credit Rating From 'BB+' on Growth
DRUG ROYALTY: S&P Withdraws 'BB+' Corp. Credit Rating on Request
DYNEGY HOLDINGS: Public Access to Examiner Report Sought
DYNEGY HOLDINGS: Amends Deal for Houston Office Space
DYNEGY HOLDINGS: Young Conaway to Represent Independent Manager
EASTMAN KODAK: Wilmer Okayed for Suits vs. Kyocera, et al.
EASTMAN KODAK: Jones Day Okayed as Counsel in Fujifilm Suit
EASTMAN KODAK: Creditors Panel Has OK for Milbank as Counsel
EASTMAN KODAK: Togut Okayed as Creditors Panel's Co-Counsel
EASTMAN KODAK: Panel Can Hire Alvarez & Marsal as Fin'l Advisor
EMDEON INC: Moody's Says Upsized Term Loan No Impact on 'B2' CFR
FALCON GAS: Files for Chapter 11 in Manhattan
FLAVORFUL EVENTS: Case Summary & 5 Largest Unsecured Creditors
FORD MOTOR: Moody's Issues Summary Credit Opinion
FREDDIE MAC: Stuart D. Meissner Probing Claims vs. Citi and Others
GALLOWAY MEDICAL: Voluntary Chapter 11 Case Summary
GEORGES MARCIANO: Involuntary Bankruptcy May be Annulled
GRAY TELEVISION: Moody's Affirms 'Caa1' CFR; Outlook Positive
H&M OIL & GAS: Files for Chapter 11 in Dallas
HALE MOKU: Sec. 341 Creditors' Meeting Set for June 4
HAYDEL PROPERTIES: Taps Schwartz Orgler to Handle Assets Sale
HOLDEN TRADING: Case Summary & 4 Largest Unsecured Creditors
HOLOGIC INC: S&P Lowers Corp. Credit Rating to 'BB'; on Watch Neg
HOSPITAL AUTHORITY OF CHARLTON: Files for Chapter 9 in Georgia
HOUSTON DIXIE: Voluntary Chapter 11 Case Summary
INFOGROUP INC: S&P Lowers Corp. Credit Rating to 'B'; Outlook Neg
INNER CITY MEDIA: Entercom Okayed to Buy KBLX-FM in Berkeley
INTERSTATE AUTO: A.M. Best Lowers Issuer Credit Rating to 'b-'
J. TEIG PORT: Voluntary Chapter 11 Case Summary
JCK HOTELS: May 10 Hearing on Amended Plan Outline
KAD INCORPORATED: Case Summary & 20 Largest Unsecured Creditors
KINGSTONE COMPANIES: A.M. Best Affirms 'bb-' Issuer Credit Rating
LANGUAGE LINE: S&P Cuts Corp. Credit Rating to 'B' on Finc'l. Risk
LEHMAN BROTHERS: SunCal Units Bankruptcy Plans Declared Effective
LEUCADIA NATIONAL: Moody's Confirms 'Ba3' CFR; Outlook Negative
MID AMERICA: Case Summary & 6 Largest Unsecured Creditors
LIBERTY HARBOR: Sec. 341 Creditors' Meeting Set for May 16
MD PIZZERIA: Case Summary & 20 Largest Unsecured Creditors
MIDWEST FAMILY: Moody's Reviews Low-B Note Ratings for Downgrade
MILBANK 521: Case Summary & 20 Largest Unsecured Creditors
MORGAN INDUSTRIES: Luhrs Marine Enters Chapter 11
MOUNTAIN CHINA: Has C$6.66-Mil. Net Loss for 2011
MOUNTAIN PROPERTY DEVT: Sec. 341 Creditors' Meeting Set for May 30
NAKNEK ELECTRIC: Can Use $300,000 Cash Collateral Until Dec. 31
NAVIOS MARITIME: Moody's Changes Outlook on 'B1' CFR to Negative
NAVISTAR INTERNATIONAL: Moody's Issues Summary Credit Opinion
NEW DAY ADULT DAY CARE: Consejo de Latinos Elated by Bankruptcy
ODYSSEY (IX) DP I: Combined Plan Hearing on May 31
OILSANDS QUEST: R. Blakely Elected as Director
ON ASSIGNMENT: S&P Assigns 'BB-' Prelim Rating on $100MM Term Loan
OSMOSE HOLDINGS: Moody's Says Upsized Loans No Impact on Ratings
PALMDALE HILLS: Plan Effective; Lehman Takes SunCal Properties
PHI INC: S&P Affirms 'B+' Corp. Credit Rating; Outlook Stable
PHOENIX DEVELOPMENT: Case Summary & 20 Largest Unsecured Creditors
PINNACLE AIRLINES: Taps Barclays Capital as Investment Banker
PIONEER DRILLING: S&P Raises Corporate Credit Rating to 'B+'
PITTSBURGH CORNING: Parent Records Add'l $150MM for PCI Claims
PORT MANAGEMENT: Voluntary Chapter 11 Case Summary
PRESIDENTIAL LIFE: A.M. Best Raises Issuer Credit Rating to 'bb+'
PRINCE SPORTS: Authentic to Take Ownership via Chapter 11
RAVENWOOD HEALTHCARE: Case Summary & Creditors List
RCS CAPITAL: Court Okays Daryl Williams as Special Counsel
RECREATIONAL ACREAGE: Case Summary & Creditors List
REDDY ICE: Taps DLA Piper as Bankruptcy Counsel
REDDY ICE: U.S. Trustee Adds 2 Members to Creditors Committee
REOSTAR ENERGY: Inglish Family Wants Due Process, Opposes Plan
REOSTAR ENERGY: Court Revokes Order Lifting Automatic Stay
RIVER CREE: Defaults $111-Million Loan, Faces Bankruptcy
SAN ANTONIO INDEMNITY: A.M. Best Lowers FSR to 'B'
SAVANNAH OUTLET: Hires Colliers as Leasing Broker
SAVANNAH OUTLET: Case Dismissed; To Sell Shopping Center
SAVTIRA CORPORATION: Voluntary Chapter 11 Case Summary
SBMC HEALTHCARE: Files for Chapter 11 in Houston
SELECT MEDICAL: S&P Raises Corporate Credit Rating to 'B+'
SELKIRK TRADING: Voluntary Chapter 11 Case Summary
SINO-FOREST: Files Change of Auditor Notice
SMF ENERGY: Sun Coast Agrees to Pay $9 Million for Texas Business
SNEAKERS SOFTWARE: Case Summary & 17 Largest Unsecured Creditors
SNOKIST GROWERS: To Sell Assets on Piecemeal Basis
SUNOCO INC: Moody's Retains Ba1 Corp Family Rating on $5.3BB Deal
SUNOCO INC: Fitch Affirms 'BB+' IDR Over $5.3BB Acquisition Deal
SUNOCO INC: S&P Puts 'BB+' CCR on Watch Positive over $5.3BB Deal
TELESAT CANADA: Moody's Rates $700MM Notes 'B3'; Outlook Stable
TELLICO LANDING: Wants Stookbury's Motion to Dismiss Denied
TENET HEALTHCARE: S&P Retains 'BB-' Rating on $1.04-Bil Notes
TENNESSEE GAS: S&P Puts 'BB' Corp. Credit Rating on Watch Positive
THELEN LLP: Trustee No Right for Fee Claim, Robinson & Cole Says
TIMMINCO LTD: CCAA Stay Period Extended to June 20
TIMMINCO LTD: QSI Partners, FerroAtlantica Win in Auction
TRIDENT MICROSYSTEMS: Shareholders Target Semiconducter Firm NXP
US AIRWAYS: Moody's Assigns 'B3' Rating to Class C Certificates
US AIRWAYS: S&P Assigns 'B+' Rating on $124.9-Mil. Class B Certs.
VERMILLION INC: Resolves Non-Contingent Claims with Bio-Rad
VILLA ADVENTURES: Case Summary & 10 Largest Unsecured Creditors
W.R. GRACE: To Disclose "Adjusted Free Cash Flow" Measure
W.R. GRACE: Lawsuits Arising From Zonolite Products Pending
W.R. GRACE: Wins Approval of High Point Site Settlement
WAGSTAFF MINNESOTA: Court Approves M. Green as Accountant
WESCO INTERNATIONAL: S&P Affirms 'BB-' Corporate Credit Rating
WHITE OAK: Case Summary & 20 Largest Unsecured Creditors
XINERGY CORP: S&P Cuts Corp. Credit Rating to 'CCC+'; Outlook Neg
* Moody's Sees Low 2011 Not-for-Profit Hospital Revenue Growth
* HHS Has Final Say on Medicare Device Coverage, 4th Circ. Says
* Upcoming Meetings, Conferences and Seminars
*********
4KIDS ENTERTAINMENT: To Assume Agreement with CW Network
--------------------------------------------------------
4Kids Entertainment, Inc., and its subsidiaries entered into an
Asset Purchase Agreement, which contemplates the sale of
substantially all of its assets to Kidsco Media Ventures LLC, and
an affiliate of Saban Capital Group for a purchase price of
$10,000,000, subject to certain adjustments. The assets to be
sold include, among other things, all of the Debtor's right, title
and interest relating to the commercial use of Yu-Gi-Oh!, the
Japanese manga (also known as cartoon or comic) created by Kazuki
Takahashi and the related brand and franchise.
As reported by the TCR on May 1, 2012, the Bankruptcy Court
approved the bidding procedures and the stalking horse agreement
relating to the sale Debtor's assets.
In connection with entry into the Asset Purchase Agreement, 4Kids
entered into a letter agreement with the CW Network LLC pursuant
to which 4Kids agreed that if the sale to Kidsco pursuant to the
Asset Purchase Agreement is consummated, 4Kids will assume the CW
Agreement, pay the CW cure costs of $3,051,904 in connection with
that assumption, and assign the CW Agreement to Kidsco at the
closing of the Kidsco Sale.
Under the letter agreement, 4Kids and the CW agreed that except
for the CW Cure Costs, 4Kids will have no further obligations to
the CW with respect to claims for settle up payments for calendar
quarters occurring prior to 4Kids bankruptcy filing or for post-
petition settle up payments for calendar quarters from the second
quarter of 2011 through the calendar quarter in which the closing
of the Kidsco Sale under the Asset Purchase Agreement occurs. The
CW further agreed to not assert any settle up claims against 4Kids
or any of its affiliates and, upon the closing of the Kidsco Sale
under the Asset Purchase Agreement, to deliver a release of 4Kids
for settleup claims. 4Kids agreed, upon the closing of the Kidsco
Sale under the Asset Purchase Agreement, to deliver a release of
claims against the CW. The release by the CW will not release
4Kids for claims under the letter agreement or its contingent
claim for indemnity filed under 4Kids' bankruptcy case. 4Kids
release will not release claims against the CW under the letter
agreement.
A copy of the Form 8-K is available for free at:
http://is.gd/qnVnXS
About 4Kids Entertainment
New York-based 4Kids Entertainment, Inc., dba 4Kids, is an
entertainment and media company specializing in the youth oriented
market, with operations in these business segments: (i) licensing,
(ii) advertising and media broadcast, and (iii) television and
film production/distribution. The parent entity, 4Kids
Entertainment, was organized as a New York corporation in 1970.
4Kids filed for bankruptcy protection under Chapter 11 of the
Bankruptcy Code to protect its most valuable asset -- its rights
under an exclusive license relating to the popular Yu-Gi-Oh!
series of animated television programs -- from efforts by the
licensor, a consortium of Japanese companies, to terminate
the license and force 4Kids out of business.
4Kids and affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y.
Lead Case No. 11-11607) on April 6, 2011. Kaye Scholer LLP is the
Debtors' restructuring counsel. Epiq Bankruptcy Solutions, LLC,
is the Debtors' claims and notice agent. BDO Capital Advisors,
LLC, is the financial advisor and investment banker. EisnerAmper
LLP fka Eisner LLP serves as auditor and tax advisor. 4Kids
Entertainment disclosed $78,397,971 in assets and $86,515,395 in
liabilities as of the Chapter 11 filing.
Hahn & Hessen LLP serves as counsel to the Official Committee of
Unsecured Creditors. Epiq Bankruptcy Solutions LLC as its
information agent for the Committee.
The Consortium consists of TV Tokyo Corporation, which owns and
operates a television station in Japan; ASATSU-DK Inc., a Japanese
advertising company; and Nihon Ad Systems, ADK's wholly owned
subsidiary. The Consortium is represented by Kyle C. Bisceglie,
Esq., Michael S. Fox, Esq., Ellen V. Holloman, Esq., and Mason
Barney, Esq., at Olshan Grundman Frome Rosenzweig & Wolosky LLP,
in New York.
In January 2012, the bankruptcy judge ruled in favor of 4Kids,
deciding that the Yu-Gi-Oh! property license agreement between the
Debtor and the licensor was not effectively terminated prior to
the bankruptcy filing. Following the ruling, 4Kids entered into a
settlement where it would receive $8 million to end the dispute
over its valuable Yu-Gi-Oh! Property.
ACE AVIATION: Announces Results of the Annual and Special Meeting
-----------------------------------------------------------------
ACE Aviation Holdings Inc. announced that at its annual and
special meeting of shareholders held earlier on April 25, 2012, in
Montreal, the shareholders have approved a special resolution
providing for an amendment to the articles of ACE pursuant to
which all ClassA variable voting shares and ClassB voting shares
of ACE were converted into a new class of common shares of ACE on
a one-for-one basis.
The shareholders of ACE also approved a special resolution
providing for the voluntary liquidation of ACE pursuant to Section
211 of the Canada Business Corporations Act, through distribution
of its remaining assets to shareholders, after providing for
outstanding liabilities, contingencies and costs of the
liquidation, the appointment of a liquidator at a time to be
determined by the board of directors of ACE and the ultimate
dissolution of ACE in the future, once all the liquidation steps
have been completed.
ACE intends to make an initial distribution to its shareholders of
an aggregate amount between $250 million and $300 million, within
the coming weeks, at a date to be determined by the board of
directors of ACE. The final distribution to shareholders will not
occur earlier than mid-year 2013 in order to allow that any
remaining contingent liabilities be settled or otherwise provided
for. The distributions will generally be treated as deemed
dividends from a Canadian tax standpoint. The aforementioned
deemed dividends will be designated as eligible dividends for the
purposes of the Income Tax Act (Canada).
About ACE Aviation
Headquartered in Montreal, Canada, ACE Aviation Holdings Inc.
(Toronto: ACE-A.TO) -- http://www.aceaviation.com/-- is
the parent holding company of Air Canada, Aeroplan, Jazz, Air
Canada Technical Services, Air Canada Vacations, Air Canada Cargo,
and Air Canada Ground Handling Services.
ADAMS PRODUCE: Unable to Work Out Chapter 11 Financing
------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Adams Produce Co. LLC, facing objection from
suppliers of perishable goods, was unable to obtain approval of
$500,000 in financing offered by secured lender PNC Bank NA. PNC
is owed about $5.5 million on three loans. Unable to pay workers,
Adams was given approval by the bankruptcy judge on April 28 to
sell the perishable goods inventory to some of the company's
managers.
The report relates that even though perishable agricultural
commodities may have been supplied before bankruptcy, federal law
requires paying the suppliers in full. Some of Adams' suppliers
objected to allowing the new loan because the bank would have been
given a security interest in cash or other property the suppliers
claim should be held in trust for them.
About Adams Produce
Adams Produce Company, LLC, filed a Chapter 11 petition (Bankr.
N.D. Ala. Case No. 12-02036) on April 27, 2012, in its home-town
in Birmingham, Alabama.
Privately held Adams Produce is a distributor of fresh fruits and
vegetables to restaurants, government and hospitality
establishments across the Southeastern United States. With over
400 employees, Adams Produce services the states of Alabama,
Arkansas, Florida, Georgia, Mississippi, and Tennessee. The
company was founded by Edwin Calvin Adams in 1903.
Adams Produce estimated assets and debts of $10 million to
$50 million in its Chapter 11 filing. A debtor-affiliate, Adams
Clinton Business Park, LLC, estimated up to $10 million in assets
and liabilities.
The Debtors owe PNC Bank, National Association, $750,000 under a
term loan, $1.35 million under a real estate loan, and $3.4
million under a revolver. The Debtors are also indebted $2
million under promissory notes. Adams owes $4.4 million in
accounts payable to trade and other creditors, and $10.2 million
to agricultural commodity suppliers.
The Debtors have tapped Burr & Forman as attorneys; CRG Partners
Group LLC as financial advisor; and CRG's Thomas S. O'Donoghue,
Jr. as chief restructuring officer; and Donlin Recano & Company
Inc. as the claims and notice agent.
ADAMS PRODUCE: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Adams Produce Company, LLC
300 Union Hill Drive, Suite 300
Birmingham, AL 35209
Tel: (205) 397-9300
Bankruptcy Case No.: 12-02036
Affiliate that simultaneously filed separate Chapter 11 petition:
Entity Case No.
------ --------
Adams Clinton Business Park, LLC 12-02037
Chapter 11 Petition Date: April 27, 2012
Court: U.S. Bankruptcy Court
Northern District of Alabama (Birmingham)
Judge: Tamara O. Mitchell
About the Debtors: Privately-held Adams Produce is a distributor
of fresh fruits and vegetables to restaurants,
government and hospitality establishments
across the Southeastern United States. With
over 400 employees, Adams Produce services the
states of Alabama, Arkansas, Florida, Georgia,
Mississippi, and Tennessee. The company was
founded by Edwin Calvin Adams in 1903.
Debtors' Counsel: Brent W. Dorner, Esq.
BURR & FORMAN LLP
420 North 20th Street, Suite 3400
Birmingham, AL 35203
Tel: (205) 458-5335
Fax: (205) 14-6892
E-mail: bdorner@burr.com
- and -
Marc P. Solomon, Esq.
BURR & FORMAN, LLP
420 North 20th Street, Suite 3400
Birmingham, AL 35203
Tel: (205) 458-5281
Fax: (205) 458-5100
E-mail: msolomon@burr.com
Debtors'
Financial
Advisor: CRG PARTNERS GROUP LLC
Debtors'
Chief
Restructuring
Officer: CRG's Thomas S. O'Donoghue, Jr.
Debtors'
Notice and
Claims Agent: DONLIN, RECANO & COMPANY, INC.
Adams Produce's
Estimated Assets: $10,000,001 to $50,000,000
Adams Produce's
Estimated Debts: $10,000,001 to $50,000,000
Adams Clinton's
Estimated Assets: $1,000,001 to $10,000,000
Adams Clinton's
Estimated Debts: $1,000,001 to $10,000,000
The petitions were signed by Thomas S. O'Donoghue, Jr., chief
restructuring officer.
Consolidated List of Creditors Holding 20 Largest Unsecured
Claims:
Entity Nature of Claim Claim Amount
------ --------------- ------------
ProAct, LLC -- $4,989,326
24560 Silver Cloud Court
Monterey, CA 93940
Fulbright & Jaworski, LLP -- $1,030,306
Fulbright Tower
1301 McKinney, Suite 5100
Houston, TX 7010-3095
Alex Kontos Fruit Co., Inc. -- $835,325
P.O. Box 10003
Birmingham, AL 35202-0003
Tom Lange Co., Inc. -- $766,674
45 South Avenue, Suite 200
Marietta, GA 30060
T&T Produce -- $474,389
P.O. Box 5756
Fort Oglethorpe, GA 30742
Turner Holdings LLC -- $309,501
P.O. Box 1000
Department 23
Memphis, TN 38148-0023
Tropicana Chilled DSD -- $262,235
P.O. Box 643106
Pittsburgh, PA 15264-3106
Ryder Transportation Services -- $253,995
P.O. Box 402366
Atlanta, GA 30384-2366
Cooseman's Tampa, Inc. -- $242,178
On-Site Fuel Services, Inc. -- $241,856
Angelo M. Formosa Foods, Inc. -- $222,178
Harvest Sensations, LLC -- $199,990
Capitol City Produce -- $142,375
First Cut Produce -- $113,587
FTI Consulting Inc. -- $186,839
Grover Bailey Tomato House, Inc. -- $176,309
Produce Distribution Center -- $111,152
Pleasant Valley Potato -- $109,557
L&M Transportation Services, Inc. -- $108,959
Kingsburg Orchards -- $108,381
AEP INDUSTRIES: S&P Affirms 'B' Corporate Credit Rating
-------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on AEP Industries Inc. "At the same time, we revised
the outlook to stable from positive," S&P said.
"We are also affirming our issue-level rating on the company's
$200 million senior unsecured notes due 2019 at 'B-' (one notch
below the corporate credit rating). The recovery rating is '5',
indicating our expectation for a modest (10% to 30%) recovery in
the event of a payment default," S&P said.
"The outlook revision reflects our expectation that AEP will not
be able to materially improve its financial profile in the near
term to warrant a modestly higher rating," said Standard & Poor's
credit analyst Henry Fukuchi. "Despite initiatives to improve
profitability, we expect operating margins will continue to remain
at or close to historical levels. We expect this will be largely a
result of ongoing raw material cost volatility, competitive
markets, potential integration challenges related to Webster
Industries and the commoditized nature of its key products.
Nevertheless, we continue to expect stable to modestly improving
operating trends partially supported by increased volumes from its
recent acquisition of Webster Industries, ongoing rationalization
of facilities and various cost reduction efforts, and synergies
related to Webster Industries," S&P said.
"The ratings on AEP reflect the company's aggressive financial
risk profile, vulnerability to raw material price volatility, the
commodity nature of its products, and low adjusted operating
margins (before depreciation and amortization) of about 5% as of
Jan. 31, 2012. The company has leading market positions in several
flexible packaging niches, but the industry's competitiveness
limits its ability to pass on input cost increases to customers,
particularly during cyclical periods of weaker demand. This
introduces volatility into operating earnings that can
significantly constrain free cash flow and reduce liquidity," S&P
said.
"AEP, which manufactures various flexible packaging films,
reported about $1 billion in revenue in the 12 months ended Jan.
31, 2012. The company is a major producer of polyvinyl chloride
food wrap, industrial films, and polyethylene pallet-wrap stretch
films. The flexible packaging industry is competitive, marked by
excess capacity, exposure to fluctuations in raw material
commodity costs, and, at times, a high degree of price
competition. Industry participants are consolidating, and we
believe that AEP will continue to seek bolt-on acquisitions, such
as its recent acquisition of Webster Industries, a manufacturer of
food and trash bags. We expect potential acquisitions that
diversify its portfolio will continue to be part of AEP's growth
strategy. Although the level of acquisitions could be more active,
we expect AEP will prudently manage its financial profile and
maintain liquidity sufficient to support the current ratings," S&P
said.
"AEP's operations are highly dependent on the price of its
polymer-based raw materials, which it acquires at market prices
and does not hedge. For example, sharply higher resin prices and
weakened demand in fiscal 2008 reduced the company's annual EBITDA
to $25 million from $81 million in fiscal 2007, which caused
deterioration in credit metrics and strained liquidity. In fiscal
2009, its credit metrics experienced the opposite effect. Adjusted
EBITDA rose to $85 million and total adjusted debt to EBITDA
declined to 2.2x from 10.7x by the end of the fiscal year. The
funds from operations (FFO) to total adjusted debt has been about
15% in the past few years and as of Jan. 31, 2012, FFO to total
adjusted debt was about 14.2%," S&P said.
"Although AEP raises product prices in an attempt to recoup
increases in resin costs, competitive industry conditions could
limit the company's ability to fully pass through these expenses.
This should somewhat limit earnings improvement in the near term
so that operating margins remain within their historical range and
FFO to total adjusted debt averages about 15%. Based on our
scenario forecast for the next few quarters, we expect FFO to
total adjusted debt and total adjusted debt to EBITDA will be
about 15% and 4.5x. Although we expect some volatility in raw
material prices in the next few quarters, we expect AEP to
maintain operating margins (before depreciation and amortization)
at about 5%, supporting these credit metrics," S&P said.
"The outlook is stable. We expect operating trends to be stable
with modest improvement in the next few years, reflecting the
materialization of various synergies related to the Webster
Industries acquisition and our expectation of gradually improving
economic conditions. Although we expect that management will face
some challenges in integrating Webster Industries this year, we
expect AEP will continue to maintain key credit metrics, adequate
liquidity, and a financial policy consistent with the ratings. For
the current ratings, we expect FFO to total adjusted debt to
remain about 15%," S&P said.
"We could raise the ratings if operating margins improve
materially and demand continues to increase so that free cash flow
generation improves over time. This would entail a strengthened
ratio of FFO to total adjusted debt near 20% consistently through
a business cycle," S&P said.
"On the other hand, we could lower ratings if operating margins
deteriorate, resulting in lower-than-expected profitability and
credit metrics. Based on our scenario forecast, we could lower the
ratings if operating margins decrease by 200 basis points or more
from current levels. At this level, we expect the FFO to total
adjusted debt ratio to drop below 10% and total adjusted debt to
EBITDA to increase to more than 7x. We could also lower the
ratings if unexpected business challenges or financial policy
decisions have significantly hurt liquidity or stretch the
financial profile beyond acceptable levels for the ratings," S&P
said.
ALLEN PARK, MI: S&P Affirms 'B' Rating on General Obligation Bonds
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' long-term
rating on Allen Park City, Mich.'s unlimited-tax general
obligation (GO) bonds and limited-tax GO bonds, issued for the
city by itself, the Allen Park Building Authority, and the Allen
Park Brownfield Redevelopment Authority. The rating remains on
CreditWatch with negative implications.
"We anticipate resolving the CreditWatch negative listing upon
determining the success of the city's efforts to balance its
fiscal 2013 budget," said Standard & Poor's credit analyst
Caroline West. "The city has represented to us that it currently
has the funds available to fully meet its debt service payments
due on May 1, 2012. However, we understand that without additional
liquidity, the city may not be able to meet its non-debt service
obligations through the end of the current fiscal year," Ms. West
added.
ALLEN SYSTEMS: S&P Affirms 'B' Corp. Credit Rating; Outlook Neg
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on Naples, Fla.-based systems management and cloud
computing software provider Allen Systems Group Inc. "We also
revised the outlook to negative from stable, reflecting the
deterioration in the company's financial profile and limited
covenant cushion," S&P said.
"The rating on Allen Systems reflects its 'highly leveraged'
financial risk profile, aggressive financial policies, and lack of
EBITDA growth in 2011 (excluding expected acquisition synergies),"
said Standard & Poor's credit analyst Katarzyna Nolan. "In
addition, we view the company's business risk profile as 'weak,'
reflecting its modest scale and market position. We expect the
company's investments in acquisitions and sales force coverage
during 2011 to support near-term revenue and EBITDA growth," S&P
said.
"The rating outlook on Allen Systems is negative, reflecting a
highly leveraged financial profile, limited covenant headroom, and
less than adequate liquidity. We could lower the rating in the
near term if Allen does not generate quarterly revenue and EBITDA
growth through fiscal 2012. We could revise the outlook to stable
if the company demonstrates revenue and EBITDA growth, and
restores adequate liquidity and covenant headroom," S&P said.
ALLSCRIPTS HEALTHCARE: S&P Alters Outlook on BB- Rating to Neg
--------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Chicago-
based Allscripts Healthcare Solutions Inc. to negative from
stable. "In addition, we affirmed our 'BB+' corporate credit
rating on the company," S&P said.
"The outlook revision reflects the recent Board of Director and
senior management turnover, which we believe will elevate the
level of operational and execution risk in the near term," said
Standard & Poor's credit analyst Andrew Chang. "In addition, we
believe that this announcement and weak 2012 guidance could
portent a shift in financial policy via a more aggressive and
accelerated share repurchase program."
"The ratings on Allscripts reflects Standard & Poor's expectation
that the company will maintain its 'fair' business risk profile
and 'intermediate' financial risk profile despite significant
management and board turnover, highly competitive market
conditions, and unclear growth strategies. We believe that the
company will continue to generate positive cash flow and that
liquidity will not be compromised by an increased emphasis on
shareholder returns," S&P said.
Allscripts is a provider of clinical software, connectivity, and
information solutions to health care providers, including
physicians and hospitals. The company's products include
electronic health records (EHR), e-Prescribing, integrated
clinical, revenue cycle and performance management software, and
patient care management software. Allscripts maintains one of the
largest ambulatory footprints in the U.S., with over 180,000
physicians using its solutions. Its acquisition of Eclipsys,
completed in mid-2010, expanded Allscripts' reach to hospitals and
established a platform to potentially compete more effectively
against larger, integrated solution providers.
"The negative outlook reflects potential downside volatility in
near-term operating results given senior management and board
turnover. We could lower the rating if 2012 operating performance
is significantly worse than the current guidance, or if management
pursues more aggressive financial policies, including shareholder
returns, such that adjusted leverage is on a trajectory to
approach 3x," S&P said.
"We could revise the outlook to stable if Allscripts can maintain
leverage at or below the mid-2x level and performs in line with
the revised guidance, while maintaining financial policies that
preserve credit quality in line with the current rating," S&P
said.
ALLY FINANCIAL: Sees Up to $1.25BB in Losses in Rescap Bankruptcy
-----------------------------------------------------------------
Ally Financial Inc. said its losses from a bankruptcy by mortgage-
lending subsidiary Residential Capital LLC would range from
$400 million to $1.25 billion.
In financial statements filed with regulators on April 27, Ally
said ResCap, one of its mortgage subsidiaries, continues to be
negatively impacted by the events and conditions in the mortgage
banking industry and the broader economy that began in 2007.
Market deterioration has led to fewer sources of, and
significantly reduced levels of, liquidity available to finance
ResCap's operations. ResCap is highly leveraged relative to its
cash flow and has recognized credit and valuation losses and other
charges resulting in a significant deterioration in capital. In
the future, ResCap may also continue to be negatively impacted by
exposure to representation and warranty obligations, adverse
outcomes with respect to current or future litigation, fines,
penalties, or settlements related to our mortgage-related
activities, and additional expenses to address regulatory
requirements.
Tangible Net Worth
ResCap is required to maintain consolidated tangible net worth, as
defined, of $250 million at the end of each month, under the terms
of certain of its credit facilities. For this purpose,
consolidated tangible net worth is defined as ResCap's
consolidated equity excluding intangible assets. ResCap's
consolidated tangible net worth was $399 million at March 31,
2012, and ResCap remained in compliance with all of its
consolidated tangible net worth covenants. During the fourth
quarter of 2011, ResCap's consolidated tangible net worth was
temporarily reduced to below $250 million. This was, however,
immediately remediated by Ally through a capital contribution,
which was provided through forgiveness of intercompany debt during
January 2012. Notwithstanding the immediate cure, the temporary
reduction in tangible net worth resulted in a covenant breach in
certain of ResCap's credit facilities as of Dec. 31, 2011. ResCap
obtained waivers from all applicable lenders with respect to this
covenant breach and an acknowledgment letter from a Government-
sponsored Enterprise indicating they would take no immediate
action as a result of the breach. In the future, Ally may choose
not to remediate any further breaches of covenants.
Missed Interest Payment
ResCap did not make a semi-annual interest payment that was due on
April 17 related to $473 million of unsecured debt principal,
which matures in 2013. The interest due was $20 million. The
indenture provides that a failure to pay interest on an interest
payment date does not become an event of default unless such
failure continues for a period of 30 days. ResCap has significant
additional near-term interest and principal payments on its
outstanding debt securities and credit facilities.
Ally or ResCap may take additional actions with respect to ResCap
as each party deems appropriate. These actions may include, among
others, Ally providing or declining to provide additional
liquidity and capital support for ResCap; Ally purchasing assets
from ResCap; asset sales by ResCap to third parties, or other
business reorganization or similar action by ResCap with respect
to all or part of ResCap and/or its affiliates. This may include
a reorganization under bankruptcy laws, which ResCap is actively
considering.
Potential Bankruptcy
ResCap remains heavily dependent on Ally and its affiliates for
funding and capital support, and there can be no assurance that
Ally or its affiliates will continue such actions or that Ally
will choose to execute any further strategic transactions with
respect to ResCap or that any transactions undertaken will be
successful. Consequently, there remains substantial doubt about
ResCap's ability to continue as a going concern. Should Ally no
longer continue to support the capital or liquidity needs of
ResCap or should ResCap be unable to successfully execute other
initiatives, it would have a material adverse effect on ResCap's
business, results of operations, and financial position.
Ally has extensive financing and hedging arrangements with ResCap
that could be at risk of nonpayment if ResCap were to file for
bankruptcy. At Dec. 31, 2011, Ally had funding arrangements with
ResCap that included $1.0 billion of senior secured credit
facilities (the Senior Secured Facilities) and a $1.6 billion line
of credit (Line of Credit) consisting of a $1.1 billion secured
facility and a $500 million unsecured facility. The Senior
Secured Facilities and Line of Credit had a maturity date of April
13, 2012. Ally extended the maturity date of the Senior Secured
Facilities and the $1.1 billion secured facility under the Line of
Credit to May 14, 2012. The $500 million unsecured facility under
the Line of Credit was not extended. At March 31, 2012, the $1.0
billion in Senior Secured Facilities were fully drawn, and $410
million of the remaining $1.1 billion Line of Credit was drawn.
At March 31, 2012, the hedging arrangements were fully
collateralized.
Amounts outstanding under the secured financing and hedging
arrangements fluctuate.
Ally also said in the Securities and Exchange Commission filing,
"If ResCap were to file for bankruptcy, ResCap's repayments of its
secured financing facilities to us could be slower. In addition,
we could be an unsecured creditor of ResCap to the extent that the
proceeds from the sale of our collateral are insufficient to repay
ResCap's obligations to us. It is possible that other ResCap
creditors would seek to recharacterize our loans to ResCap as
equity contributions or to seek equitable subordination of our
claims so that the claims of other creditors would have priority
over our claims. In addition, should ResCap file for bankruptcy,
our $399 million investment related to ResCap's equity position as
of March 31, 2012, would likely be reduced to zero. If a ResCap
bankruptcy were to occur, we could incur significant charges,
substantial litigation could result, and repayment of our credit
exposure to ResCap could be at risk. We currently estimate a
range of reasonably possible losses arising at the time of a
ResCap bankruptcy filing, including our investment in ResCap, to
be between $400 million and $1.25 billion. This estimated range is
based on significant judgment and numerous assumptions that are
subject to change, and which could be material."
A copy of the Form 10-Q filed with the SEC is available for free
at http://is.gd/InbzXe
About Ally Financial
Ally Financial Inc., formerly GMAC Inc. -- http://www.ally.com/--
is one of the world's largest automotive financial services
companies. The company offers a full suite of automotive
financing products and services in key markets around the world.
Ally's other business units include mortgage operations and
commercial finance, and the company's subsidiary, Ally Bank,
offers online retail banking products. Ally operates as a bank
holding company.
GMAC obtained a $17 billion bailout from the U.S. government in
exchange for a 56.3% stake. Private equity firm Cerberus Capital
Management LP keeps 14.9%, while General Motors Co. owns 6.7%.
Ally reported a net loss of $157 million in 2011, compared with
net income of $1.07 billion in 2010. Net income was $310 million
for the three months ended March 31, 2012.
The Company's balance sheet at March 31, 2012, showed $186.35
billion in total assets, $166.68 billion in total liabilities and
$19.66 billion in total equity.
* * *
In February 2012, Fitch Ratings downgraded the long-term Issuer
Default Rating (IDR) and the senior unsecured debt rating of Ally
Financial and its subsidiaries to 'BB-' from 'BB'. The Rating
Outlook is Negative.
The downgrade primarily reflects deteriorating operating trends in
ResCap, which has continued to be a drag on Ally's consolidated
credit profile, as well as exposure to contingent mortgage-related
rep and warranty and litigation issues tied to ResCap, which could
potentially impact Ally's capital and liquidity levels.
ALLY FINANCIAL: S&P Raises Rating on Preferred Stock to 'CCC+'
--------------------------------------------------------------
Standard & Poor's Ratings Services applied its bank hybrid capital
criteria to its rated finance companies. "Under our hybrid
criteria, the term 'banks' includes finance companies," S&P said.
"We raised our preferred stock ratings on Ally Financial Inc.,
American Express Co., and SLM Corp. We also raised our
subordinated (deferrable) ratings on National Rural Utilities
Cooperative Finance Corp. and our junior subordinated ratings on
Nelnet Inc.," S&P said.
RATINGS LIST
Upgraded
To From
Ally Financial Inc.
Preferred Stock CCC+ CCC
American Express Co.
Preferred Stock BBB- BB
National Rural Utilities
Cooperative Finance Corp.
Subordinated BBB+ BBB
Nelnet Inc.
Junior Subordinated BB BB-
SLM Corp.
Preferred Stock BB BB-
AMERICAN AIRLINES: Files FRBP 2015.3 Report as of Dec. 31
---------------------------------------------------------
AMR Corp. and its affiliates filed with the Court a periodic
report regarding value, operations and profitability of entities
on which they hold a substantial or controlling interest under
Rule 2015.3 of the Federal Rules of Bankruptcy Procedure.
AMR Chief Financial Officer Isabella D. Goren noted that the
valuation estimate for non-Debtor entities as of December 31,
2011 is calculated as total liabilities of each entity subtracted
from its total assets as of December 31, 2011. The non-Debtor
entities and their corresponding net book value are:
Interest
of the Net Book
Entity Estate Value
------ -------- -----------
Avion Assurance, Ltd. 100% $9,223,122
Aerodespachos Colombia, S.A.
AERCOL S.A. (Columbia) 100% $2,678,340
Caribbean Dispatch Services
Limited (St. Lucia) 100% $4,390,151
American Airlines Division
de Servicios Aeroportuarios
(R.D.), S.A. (Dominican Republic) 100% $1,978,565
International Ground Services,
S.A. de C.V. (Mexico) 100% $1,415,276
AA 2002 Class C Certificate
Corporation 100% $108,605,000
AA 2003-1 Class C Certificate
Corporation 100% $100
AA 2004-1 Class B Note
Corporation 100% $42,031,000
AA 2002 Class D Certificate
Corporation I 100% $0
AA 2003-1 Class D Certificate
Corporation 100% $100
AA 2005-1 Class C Certificate
Corporation 100% $103,464,203
American Airlines de Mexico, S.A. 100% ($647,159)
American Airlines de Venezuela, S.A. 100% $0
Aerosan Airport Services S.A./
Aerosan S.A. 50% $4,517,374
The Periodic Report also contains separate reports on the
profitability and operations of each Non-Debtor entity.
Ms. Goren stated that the Periodic Report does not include
information for five Non-Debtors in which a Debtor maintains a
joint venture or minority interest and is bound by
confidentiality obligations from publicly disclosing their
financial statements. These entities include:
Interest
of the
Entity Estate
------ --------
Texas Aero Engine Services, LLC 50%
oMC Venture, LLC 50%
oneworld Alliance, LLC 25.6%
oneworld Management Company, Inc. 25.6%
Aerolineas Pacifico Atlantico, S.A. 25%
A full-text copy of the Rule 2015.3 report dated March 5, 2012 is
available for free at:
http://bankrupt.com/misc/AmAir_PeriodicRpt_0305.pdf
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on
$18.02 billion of total operating revenues for the nine months
ended Sept. 30, 2011. AMR recorded a net loss of $471 million in
the year 2010, a net loss of $1.5 billion in 2009, and a net loss
of $2.1 billion in 2008.
The Company's balance sheet at Sept. 30, 2011, showed
$24.72 billion in total assets, $29.55 billion in total
liabilities, and a $4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, 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 ROCK: S&P Lowers Corp. Credit Rating to 'B-'; Outlook Neg
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Mount Morris, N.Y.-based American Rock Salt Co. LLC
(ARS) to 'B-' from 'B'. "The rating outlook is negative. We have
removed the ratings from CreditWatch, where we placed them on
March, 28, 2012, with negative implications," S&P said.
"At the same time, we lowered the issue-level rating on the
company's senior secured term loan to 'B' (one notch above the
corporate credit rating) from 'B+' and lowered the issue-level
rating on the company's second-lien notes to 'CCC' (two notches
below the corporate credit rating) from 'CCC+'. The recovery
ratings remain a '2' for the senior secured term loan and a '6'
for the second-lien notes," S&P said.
"The downgrade reflects the impact of an unseasonably warm winter
on ARS' operating performance, which has led to significantly
lower demand for deicing salt products," said Standard & Poor's
Ratings Services' credit analyst Gayle Bowerman. "As a result of
the weaker demand, the company's liquidity position has tightened
such that we have revised our assessment of the company's
liquidity profile to 'weak' from 'adequate' because of the
potential that the company may breach the availability threshold
on its asset-based revolving credit facility. In addition, our
projected leverage of 12.9x for March 31, 2012, has almost doubled
from 6.5x as of the company's fiscal year end on Sept. 30, 2011,
leading us to revise our assessment of the company's financial
risk profile to 'highly leveraged' from 'aggressive.'"
"Under our base case scenario, we expect that ARS' 2012 volumes
and revenues will decline approximately 50% from 2011, with
expected EBITDA of $35 million to $40 million. These figures are
significantly below our previous expectations of about $225
million in revenues and about $75 million in EBITDA, which assumed
normal winter weather. Our base case scenario assumes the company
sells only the minimum levels of contracted salt for the remainder
of the current fiscal year. We expect credit metrics at the end of
the fiscal year to weaken meaningfully, with fiscal year 2012
leverage of about 14.4x, negligible funds from operations (FFO) to
debt, and interest coverage of about 1x, all of which we would
consider to be more in line with the 'B-' rating. In 2013, we
assume normal winter weather patterns but expect a slight decline
in sales prices and about a 20% decline in volumes versus a
typical winter because of higher-than-normal salt inventories held
by customers at the beginning of the season. We expect credit
metrics to improve but remain within our range for a highly
leveraged financial risk profile for the next several years," S&P
said.
"ARS is the leading supplier of road deicing salt in western and
central New York and Pennsylvania, regions consistently affected
by heavy lake-effect snow. The business is highly seasonal, with
more than 80% of sales occurring between October and March. Sales
are based on annual purchase contracts with set pricing and
reserved volumes, including minimum and maximum levels subject to
weather-based demand. We view the business as recession resistant
because local governments view deicing salt as a nondiscretionary
expense because of the overriding concern for public safety.
Customers typically have minimal storage capability to hold salt
between seasons, and competition is regional because of the high
cost of transporting salt. However, ARS is dependent on a single
mine, which heightens the risk of operating disruptions, and its
earnings are highly correlated to winter weather. These factors
lead to our assessment of the company's 'vulnerable' business risk
profile," S&P said.
"The negative rating outlook reflects our view that the company
may trigger financial covenants if it is unable to amend its
credit facilities or secure additional sources of liquidity.
Should the company bolster its liquidity position such that the
covenant uncertainty is resolved, we would reconsider our outlook
and liquidity assessment," S&P said.
"We could lower the ratings if the company failed to improve its
liquidity in a timely manner such that we deemed it likely to
violate its covenants and if operating performance fails to
rebound as expected. Specifically, we could lower the ratings if
the company fails to address its covenant issues over the next
several months or if the company's 2013 interest coverage ratio
falls below 1x. This could occur if the coming winter is also
unusually mild," S&P said.
"A positive rating action is unlikely in the near term, given our
view of the company's highly leveraged financial risk profile and
vulnerable business risk profile arising from its limited
diversity, seasonal demand, and narrow financial flexibility.
However, we could take a positive action if the company were to
improve its operating performance or reduce its debt position such
that it could maintain leverage below 5x and FFO to total debt
above 12%," S&P said.
AMG PATTERSON: Voluntary and Involuntary Cases Dismissed
--------------------------------------------------------
The voluntary Chapter 11 bankruptcy case filed by AMG Patterson
LLC in December and the involuntary Chapter 11 case initiated by a
creditor against the Company late April are dismissed.
AMG Patterson filed a voluntary Chapter 11 petition (Bankr. C.D.
Calif. Case No. 11-61454) in Santa Barbara on Dec. 19, 2011,
scheduling $5.20 million in assets and $3.53 million in
liabilities. Judge Sandra R. Klein presides over the voluntary
case. Thomas C. Corcovelos, Esq., at the Corcovelos Law Group,
serves as the Debtor's counsel. The voluntary petition was signed
by Michael Minder, manager of AMG Atlantic LLC, the managing
member.
Petitioning creditor, F. Michael Brovsky, filed the involuntary
chapter 11 petition (Bankr. C.D. Calif. Case No. 12-11617) in Los
Angeles on April 24, 2012, alleging he is owed $25,000 in
consulting fees. Judge Robin Riblet presides over the involuntary
case.
On April 19, 2012, Judge Klein held a status conference in the
case. AMG Patterson made no appearance at the status conference,
and did not file a status report regarding the case. Accordingly,
Judge Klein entered an order on April 20 dismissing the voluntary
chapter 11 case with a 180-day bar. The dismissal order stated,
in part, that "the Debtor is prohibited from becoming a debtor
under Title 11 for a period of one hundred and eighty (180) days
from the entry of this order."
In a separate order dated April 25, Judge Riblet also dismissed
the involuntary case. Judge Riblet said if the petitioning
creditor or Debtor wishes to seek relief from Judge Klein's
dismissal order, that relief should be sought from Judge Klein.
A status conference was previously set in the involuntary case for
June 26, 2012, at 11:00 a.m. at Crtrm 201, 1415 State St., Santa
Barbara.
"It is inappropriate to attempt to circumvent Judge Klein's
dismissal order by filing a new bankruptcy case in another
division of the court," Judge Riblet said.
BARRINGTON BROADCASTING: S&P Raises Corp. Credit Rating to 'B+'
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate rating on
Hoffman Estates, Ill.-based TV broadcaster Barrington Broadcasting
LLC to 'B+' from 'B'. The rating outlook is stable.
All related issue-level ratings on the company's debt were also
raised by one notch in conjunction with the upgrade, while all
recovery ratings on the debt issues remain unchanged.
"The 'B+' corporate credit rating reflects Standard & Poor's
expectation that Barrington will be able to maintain adequate
liquidity and an appropriate cushion of compliance with its
leverage covenant. Additionally, we expect continuing leverage
reduction in 2012 due to debt repayment and EBITDA growth. We view
Barrington's business risk profile as 'weak' because of its narrow
cash flow base concentrated in 15 small-to-midsize TV markets and
competition from other major-network-affiliated TV stations that
have parent companies with greater financial resources. We view
Barrington's financial risk profile as 'aggressive,' based on its
ratio of debt to average trailing-eight-quarter EBITDA of 5.0x as
of Dec. 31, 2011, and its aggressive financial policy," S&P said.
"Barrington's 24 TV stations operate in 15 small-to-midsize
markets in the U.S. Such markets offer smaller total ad revenue
and cash flow opportunities compared with top-100 markets, and
typically attract considerably less national advertising, a source
of revenue diversification. Barrington's advertising revenue is
highly vulnerable to economic downturns and also varies with
election cycles. EBITDA can decline by as much as 30% in
nonelection years," S&P said.
"The company's station affiliations are diversified across the
four major networks, which limits exposure to individual network
performance. Nevertheless, in our view, the company has limited
growth potential because of its focus on small TV markets, the
mature prospects of the local TV broadcasting business, and
intensifying competition for audiences and advertisers from
traditional and nontraditional media. Additionally, while no
single market comprises more than 17% of net revenue, the company
has a number of stations located in the Midwest, as well as other
regions that have experienced greater economic pressure than the
economy as a whole," S&P said.
"Under our base-case scenario for 2012, a presidential election
year, we expect revenue to grow at a mid-teens percentage rate and
EBITDA to grow 25% or more due the return of significant political
ad revenue, and low-single-digit growth of core ad revenue. We
expect growth in high-margin political ad revenue to more than
offset modest growth in operating expenses, resulting in an EBITDA
margin in the mid-30% area," S&P said.
"For the three months ended Dec. 31, 2011, revenue and EBITDA fell
20% and 33%, primarily because of lower political revenue. The
EBITDA margin contracted to 32.7% for the 12 months ended Dec. 31,
2011, from 35.3% a year ago. The EBITDA margin decline was due to
the absence of political revenue, partially offset by a workforce
reduction and productivity gains from reengineering operations,"
S&P said.
"For the 12 months ended Dec. 31, 2011, lease-adjusted debt to
EBITDA increased to 5.4x, from 4.7x the year before, as a result
of the lower EBITDA base in 2011, a nonelection year. Debt to
average trailing-eight-quarter EBITDA, which smoothes the effects
of election advertising and Olympics cycles, was 5.0x on Dec. 31,
2011. Leverage is at the high end of the 4x to 5x range that
Standard & Poor's associates with an 'aggressive' financial risk
profile. However, we expect lease-adjusted leverage to fall to
around 4x by the end of 2012 because of EBITDA growth and lower
debt levels. On a trailing-eight-quarter basis, we expect leverage
to fall to 4.5x or less. For the 12 months ended Dec. 31, 2011,
EBITDA coverage of interest (adjusted for leases) was healthy, at
2.5x. We expect this metric to improve in 2012," S&P said.
BERNARD L. MADOFF: Clients Must Return 2Yrs Worth of Phony Profits
------------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that a ruling by U.S. District Judge Jed Rakoff made
public April 30 said customers of Bernard L. Madoff Investment
Securities Inc. who took more cash out of the Ponzi scheme than
they invested are liable to give back fictitious profits paid
within two years of bankruptcy.
Mr. Rochelle says the ruling is a disappointment for customers who
were hoping Rakoff would give them immunity from all suits because
they didn't know Madoff was engaged in fraud. Judge Rakoff
previously ruled that Madoff trustee Irving Picard can't bring
suits for fictitious profits going back six years on the theory
the money was actually stolen from other customers.
Mr. Rochelle recounts that dozens of customers filed papers asking
Rakoff to dismiss even the two-year claims. They argued,
unsuccessfully, that the Madoff firm's status as a broker gives
them the right to rely on account statements even though purchases
and sales never actually took place. The reasons underlying
Rakoff's two-page ruling will be filed later in a separate
opinion.
Mr. Rochelle notes that the customers who lost with the recent
ruling aren't required to pay money back immediately. On April
30, Rakoff only set down general ground rules about customers'
liability for receipt of fictitious profits. A judge still must
enter a judgment requiring repayment of two-year fictitious
profits, and then customers can appeal to the U.S. Court of
Appeals. Some customers raised other defenses that Judge Rakoff
may need to rule on later before judgment can be entered against
them.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970. The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims
agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
US$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.)
The SIPA Trustee has said that as of March 31, 2012, through
prepetition litigation and other settlements, he has successfully
recovered, or reached agreements to recover, more than $9 billion
-- over 50% of the principal lost in the Ponzi scheme by those who
filed claims -- for the benefit of all customers of BLMIS.
The liquidation has so far has cost the Securities Investor
Protection Corp. $1.3 billion, including $791 million to pay a
portion of customers' claims.
Mr. Picard has so far made only one distribution in October of
$325 million for 1,232 customer accounts. Uncertainty created by
the appeals has limited Mr. Picard's ability to distribute
recovered funds. Outstanding appeals include the $5 billion
Picower settlement and the $1.025 billion settlement.
BERNARD L. MADOFF: Judge Drops Claims in 4 Clawback Suits
---------------------------------------------------------
Amanda Bransford at Bankruptcy Law360 reports that U.S. District
Judge Jed S. Rakoff on Monday nixed all of Bernard L. Madoff
Investment Securities LLC bankruptcy trustee Irving Picard's
claims except those for those based on fraudulent intent in four
clawback suits, including a $2.8 million suit against investor
James Greiff.
Law360 relates that Judge Rakoff dismissed claims against
Mr. Greiff, Gerald Blumenthal, Harold J. Hein, and Kara Fishbein
Goldman and Steven Goldman, all investors in Bernard L. Madoff
Investment Securities whose fictitious profits Picard sought to
recover.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970. The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims
agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
US$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.)
The SIPA Trustee has said that as of March 31, 2012, through
prepetition litigation and other settlements, he has successfully
recovered, or reached agreements to recover, more than $9 billion
-- over 50% of the principal lost in the Ponzi scheme by those who
filed claims -- for the benefit of all customers of BLMIS.
The liquidation has so far has cost the Securities Investor
Protection Corp. $1.3 billion, including $791 million to pay a
portion of customers' claims.
Mr. Picard has so far made only one distribution -- in October
2011 -- of $325 million for 1,232 customer accounts. Uncertainty
created by the appeals has limited Mr. Picard's ability to
distribute recovered funds. Outstanding appeals include the $5
billion Picower settlement and the $1.025 billion settlement.
BERNARD L. MADOFF: UBS Unit, Others Want $2BB Clawback Suit Nixed
-----------------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that UBS (Luxembourg) SA
and other defendants moved Monday to dismiss Bernard L. Madoff
Investment Securities LLC liquidating trustee Irving Picard's $2
billion clawback suit against them, saying the trustee has gone
too far in suing the overseas defendants.
Mr. Picard is seeking to "stretch this court's territorial
jurisdiction beyond its constitutional limits" in filing suit
against UBSL, UBS Fund Services (Luxembourg) SA, UBS Third Party
Management Co. SA and four director defendants, they argue in a
memorandum in support of their motion to dismiss the suit,
according to Law360.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970. The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims
agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
US$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.)
The SIPA Trustee has said that as of March 31, 2012, through
prepetition litigation and other settlements, he has successfully
recovered, or reached agreements to recover, more than $9 billion
-- over 50% of the principal lost in the Ponzi scheme by those who
filed claims -- for the benefit of all customers of BLMIS.
The liquidation has so far has cost the Securities Investor
Protection Corp. $1.3 billion, including $791 million to pay a
portion of customers' claims.
Mr. Picard has so far made only one distribution -- in October
2011 -- of $325 million for 1,232 customer accounts. Uncertainty
created by the appeals has limited Mr. Picard's ability to
distribute recovered funds. Outstanding appeals include the $5
billion Picower settlement and the $1.025 billion settlement.
BPP TEXAS: Protests WisDOT's Attempt to Seize Property
------------------------------------------------------
Amanda Bransford at Bankruptcy Law360 reports that BPP LLC
challenged in Texas bankruptcy court on Wednesday the Wisconsin
Department of Transportation's right to seize a piece of land
where a BPP hotel sits, saying the Chapter 11 plan gave the
property to BPP and discharged WisDOT's eminent domain rights.
BPP's Chapter 11 plan became effective Oct. 19, 2011, and
transferred the property in Wauwatosa, Wis. -- where the company
operates a profitable Super 8 Hotel -- to BPP free and clear of
any claims or liens, including any eminent domain, according to
Law360.
About BPP Texas
Pittsburgh, Pennsylvania-based BPP Texas, LLC, along with BPP
Illinois, LLC, BPP Iowa, LLC, BPP Michigan, LLC, BPP Minnesota,
LLC, and BPP Wisconsin, LLC, own and operate 22 hotels located in
Texas, Illinois, Iowa, Michigan, Minnesota, and Wisconsin.
BPP Texas and several affiliates filed for Chapter 11 bankruptcy
protection (Bankr. E.D. Tex. Lead Case No. 10-44378) on Dec. 21,
2010. Davor Rukavina, Esq., and Jonathan Lindley Howell, Esq., at
Munsch Hardt Kopf & Harr, P.C., serve as the Debtors' bankruptcy
counsel. In its schedules, BPP Texas disclosed $3.73 million in
assets and $65.9 million in liabilities as of the petition date.
Affiliates BPP Illinois, BPP Iowa, BPP Michigan, BPP Minnesota,
and BPP Wisconsin filed separate Chapter 11 bankruptcy petitions.
BPP Wisconsin estimated its assets at $10 million to $50 million
and debts at $50 million to $100 million.
BROUGHTON LP: Lawyers Entitled to Fees Even If Transactions Fail
----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that U.S. Bankruptcy Judge D. Michael Lynn said in an
April 25 opinion that if a transaction fails, the lawyer
representing the bankruptcy company is still entitled to
compensation even in the wake of the Pro-Snax opinion from the
U.S. Court of Appeals in New Orleans,
The case involved a company then in Chapter 11 reorganization that
was attempting to sell real estate. The transaction was necessary
for a successful reorganization. Through no fault of the lawyer,
the transaction collapsed and the company ended up being
liquidated in Chapter 7. When the lawyer applied for approval of
compensation, the U.S. Trustee objected, saying no fees were
earned in view of the Fifth Circuit's 1998 decision in Pro-Snax,
which requires an "identifiable, tangible, and material benefit to
the estate."
According to the report, Judge Lynn disagreed with the U.S.
Trustee and awarded compensation. Judge Lynn noted that some
courts have been interpreting Pro-Snax to mean that the required
benefit to the estate must be analyzed with the benefit of
hindsight. "Most courts" have rejected the idea there should be an
"after-the-fact evaluation of benefit," Judge Lynn said. He
pointed to the U.S. Court of Appeals in Manhattan, which "employs
a prospective analysis."
The case is In re Broughton LP, 10-42327, U.S. Bankruptcy
Court, Northern District of Texas (Dallas).
BUFFETS INC: New Plan Has Creditor Support, Confirmation June 13
----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that creditors of Buffets Inc. are voting on an amended
version of the reorganization plan for the operator of family
restaurants in bankruptcy reorganization a section time. The
official creditors' committee is supporting the plan now that it
was revised so unsecured creditors will receive a recovery of 6%
to 9% on $44.6 million in claims. Before the change, unsecured
creditors were to receive nothing. To remove an obstacle to
approval of the plan at a June 13 confirmation hearing, the plan
was modified to create a trust for unsecured creditors that will
pursue lawsuits and be funded with at least $4 million. First-
lien lenders are to receive the new stock in return for $251.8
million owing on the existing first-lien facility.
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.
In March 2012, Buffets Inc. received court approval for an
incentive bonus program that may pay as much as $2.3 million to
executives if cash flow targets are met. There was an April 30
hearing schedule on another program to pay bonuses for a
successful sale of the business that could cost $2.7 million.
In April 2012, Buffets Inc. filed an amended bankruptcy exit plan
that proposes to pay $4 million to a pool of unsecured creditors
who are owed more than $44 million. Unsecured creditors are
expected to recover about 9% of their claims.
CANO PETROLEUM: Reports Oil and Gas Reserves as of July 2011
------------------------------------------------------------
Cano Petroleum, Inc., disclosed with the U.S. Securities and
Exchange Commission information with respect to its oil and gas
reserves as of July 1, 2011.
As of July 1, 2011, the SEC pre-tax PDP PV-10 was $6.73 million.
As of July 1, 2011, Cano's NYMEX-priced reserve report included
non-producing and undeveloped proved reserves in addition to the
producing reserves. PDP reserves of 4.54 MMBOE accounted for 15%
of total proved reserves of 31.16 MMBOE.
As of July 1, 2011, the NYMEX-priced pre-tax PDP PV-9 was $88.3
million, and total proved PV-9 was $49.87 million.
A copy of the Report is available for free at http://is.gd/u27YB9
About Cano Petroleum
Cano Petroleum, Inc. (NYSE Amex: CFW), an independent Texas-
based energy producer with properties in the mid-continent region
of the United States, filed for Chapter 11 bankruptcy (Bank. N.D.
Tex. Lead Case No. 12-31549) on March 7, 2012. Other affiliates
also sought bankruptcy protection: Cano Petro of New Mexico,
Ladder Companies, Inc., Square One Energy, Inc., Tri-Flow, Inc.,
W.O. Energy of Nevada, Inc., W.O. Operating Company, Ltd., W.O.
Production Company, Ltd., and WO Energy, Inc. The cases are
jointly administered.
The Debtors filed for bankruptcy to pursue a sale under a joint
plan of reorganization filed on the petition date. Cano Petroleum
have entered into a Stalking Horse Stock Purchase Agreement with
NBI Services Inc., pursuant to which NBI would purchase all of the
shares of common stock that would be issued by Reorganized Cano
under the Plan for $47.5 million. The deal is subject to higher
and better offers and a possible auction.
The petitions were filed by James R. Latimer, III, chief executive
officer. Judge Barbara J. Houser oversees the case. The Debtors
are represented by lawyers at Thompson & Knight LLP, in Dallas
Texas.
Cano Petroleum's consolidated balance sheet at Sept. 30, 2011,
showed $63.37 million in total assets, $116.25 million in total
liabilities, and a $52.88 million total stockholders' deficit. In
schedules filed with the Court, Cano Petroleum disclosed
$1.16 million in assets and $82.5 million in liabilities.
Union Bank of California, the administrative agent and issuing
lender under the Debtors' prepetition senior credit facility; and
UnionBanCal Equities, Inc., the administrative agent and issuing
lender, under the junior credit facility, are represented by:
William A. "Trey" Wood III, Esq., at Bracewell & Giuliani LLP.
CDC CORP: Hedge Fund Sues CDC Software Over Alleged Smear Campaign
------------------------------------------------------------------
Jamie Santo at Bankruptcy Law360 reports that Evolution Capital
Management LLC on Friday launched a $15 million suit against CDC
Software Corp. and its executives, claiming they masterminded a
malicious plan code-named "Star Wars" to cripple the hedge fund as
it sought to settle a $65 million breach of contract suit with the
software firm's bankrupt former parent.
About CDC Corp.
Based in Atlanta, CDC Corp. (Nasdaq: CHINA) --
http://www.cdccorporation.net/-- is the parent company of CDC
Software (Nasdaq: CDCS). CDC Software is based dually in
Shanghai, China, and Atlanta and produces enterprise software
applications, IT consulting services, outsourced applications
development and IT staffing. The company's owners include Asia
Pacific Online Ltd., Xinhua News Agency and Evolution Capital
Management.
CDC Corporation, doing business as Chinadotcom, filed a Chapter
11 petition (Bankr. N.D. Ga. Case No. 11-79079) on Oct. 4, 2011.
James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout, PA,
in Atlanta, Georgia, serves as counsel. Moelis & Company LLC
serves as its financial advisor and investment banker. Marcus A.
Watson at Finley Colmer and Company serves as chief restructuring
officer. The Debtor estimated assets and debts at US$100 million
to US$500 million as of the Chapter 11 filing.
The Official Committee of Equity Security Holders of CDC
Corporation is represented by Troutman Sanders. The Committee
tapped Morgan Joseph TriArtisan LLC as its financial advisor.
CHOCTAW GENERATION: S&P Lowers Rating on $321-Mil. Certs. to 'CC'
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on U.S.
power generator Choctaw Generation L.P.'s $321 million series A
and series B pass-through trust certificates due in 2023 and 2030
(about $282 million outstanding as of Dec. 31, 2011) to 'CC' from
'CCC-'. The outlook remains negative. "The recovery rating is '4',
indicating our expectation for average recovery (30% to 50%) if
a default occurs," S&P said.
"The rating reflects the project's low liquidity following its
draw of about $11.1 million of its $16 million to $19 million rent
reserve to pay its $13.2 million debt service payment on Dec. 15,
2011, and the possibility that project cash flow and the
approximately $6 million remaining in the reserve will not be
sufficient to pay its $19 million debt service payment on June 15,
2012," S&P said.
"If the project makes its full debt service payment in June, there
will likely be no reserve to cushion the $13 million interest
payment on Dec. 15, 2012," said Standard & Poor's credit analyst
Matthew Hobby.
"Absent a significant cash infusion from an outside source, we
project that the project will likely deplete its liquidity
reserves and default in 2012-2013. Management forecasts assume the
plant will have about 87% availability, except during scheduled
outages in March and October. Our forecast is similar to that of
the company's management, but assumes availability of about 80% in
2012," S&P said.
"The project's short-term distress stems in large part from a
recent sharp decrease in availability to 79% in 2011 from 98% in
2010 and 95% in 2009. The plant's heat rate averaged about 11,700
Btu per kilowatt-hour (kWh) in 2011, an increase of 3% to 4% over
2010's 11,297 Btu per kWh and 2009's 11,369 Btu per kWh. The
reduced availability resulted from a series of equipment failures,
including significant outages during May and June (22 days)
following boiler leaks, and during July and August when an air-fan
motor failed and forced the plant to run on one boiler instead of
two through much of the late summer and early fall. We expect that
outages may continue at the plant in the first half of 2012," S&P
said.
"The outlook on the rating remains negative. We expect that the
project will face a cash shortfall of about $1 million to $2
million in paying its $19 million June 15, 2012 debt service
payment, even after fully drawing its remaining debt service
reserve letter of credit of about $6 million. If the project
succeeds in paying the June debt service, we expect that the
project would again face a shortfall of about $1 million to $3
million dollars in paying the $13 million Dec. 15, 2012 debt
service payment. These forecasts assume availability of about 80%
for the rest of 2012. Higher availability could reduce these
shortfalls, while significant unscheduled outages that reduce
availability below 80% would likely increase them. Any major
capital improvements will likely require external funding," S&P
said.
CITY SITE ESTATES: PwC Appointed as Receiver for Developer
----------------------------------------------------------
Jonathan Randles at Bankruptcy Law360 reports that Scottish-based
real estate development firm City Site Estates, which values its
property portfolio at more than $568 million, has been placed into
receivership, PricewaterhouseCoopers said Monday.
Law360 relates that David Chubb and Alan Brown of PwC were
appointed as joint receivers of City Site Estates, which owns
several commercial properties in Glasgow and London, on April 25.
According to the report, Mr. Chubb said in a statement that PwC's
immediate priority would be to review City Site Estates' portfolio
to extract the best value for creditors.
CLIFFS CLUB: Carlile Joined by Two Others in Buying Clubs
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Cliffs Club & Hospitality Group Inc., the owner of
eight high-end golf and tennis clubs in North and South Carolina,
reported to the bankruptcy court last week that the auction was
canceled when there was only one bid for the business.
According to the report, Carlile Development Group was under
contract to buy the projects through confirmation of a Chapter 11
reorganization plan. Cliffs said the plan should be filed by
May 13. There is to be a May 8 hearing in the U.S. Bankruptcy
Court in Spartanburg, South Carolina, where Cliffs will report on
the auction and judge will hear any objections to the process.
The report notes the company also told the bankruptcy court that
Carlile will be joined in buying the projects by SunTx Urbana GP I
LLP and Arendale Holdings Corp. Cliffs said it doesn't believe
that SunTx or Arendale were guilty of any improper combination to
inhibit bidding. The contract with Carlile called for the
assumption of secured notes on revised terms. Mechanics' liens
would be paid over time along with 75 percent of unsecured claims
other than members' claims. Members would be invited to join the
newly reorganized club. Carlile is providing $7.5 million in
financing for the Chapter 11 process.
About Cliffs Club
Units of The Cliffs Communities, led by The Cliffs Club &
Hospitality Group, Inc., doing business as The Cliffs Golf &
Country Club, along with 10 affiliates, sought Chapter 11
protection (Bankr. D. S.C. Lead Case No. 12-01220) on Feb. 28,
2012.
The Cliffs has eight premier, private master-planned residential
communities, each to have its own world-class golf course.
Approximately 3,734 lots have been sold. There are currently
1,385 finished homes, with 63 under construction. The properties
for sale are owned by non-debtor DevCo entities.
The Feb. 28 Debtors operate the exclusive membership clubs for
golf, tennis, wellness and social activities at The Cliffs'
communities in North and South Carolina. The clubs have 2,280
members, and there are 766 resigned members with refundable
deposits totaling $37 million. The Debtors do not own the golf
courses -- they only own or lease all the "core amenities" for the
operation of the golf courses.
Another affiliate, Keowee Falls Investment Group, LLC, filed a
Chapter 11 petition (Bankr. D. S.C. Case No. 12-01399) in
Spartanburg, South Carolina, on March 2, 2012. Travelers Rest-
based Keowee Falls estimated at least $100 million in assets and
liabilities of up to $50 million.
Judge John E. Waites presides over the Debtors' cases. Lawyers
at McKenna Long & Aldridge LLP serve as the Debtors' lead counsel.
Dana Elizabeth Wilkinson, Esq., serves as local counsel. Grisanti
Galef & Goldress serves as restructuring advisors and Katie S.
Goodman of GGG serves as CRO. BMC Group Inc. serves as the
Debtors' claims and noticing agent.
According to papers filed in Court, the Debtors' total assets had
a $175 million book value at Dec. 31, 2011. The Debtors' total
liabilities had a $333 million book value at Dec. 31, 2011. The
petition was signed by Timothy P. Cherry, authorized officer.
Wells Fargo, as Indenture Trustee, is represented in the case by
Daniel S. Bleck, Esq., at Mintz Levin Cohn Ferris Glovsky and
Popeo P.C.; and Elizabeth J. Philp, Esq., and Michael Beal, Esq.,
at McNair Law Firm P.A.
The Official Committee of Unsecured Creditors is represented in
the case by John B. Butler, III, P.A., and Jonathan B. Alter,
Esq., at Bingham McCutchen LLP.
COFFEYVILLE RESOURCES: S&P Affirms 'B+' Corporate Credit Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on Coffeyville Resources LLC and revised the outlook
on the rating to developing from stable. "We also affirmed our
'BB' rating on the first-lien senior secured notes and the 'B+'
rating on the second-lien senior secured notes," S&P said.
"Coffeyville Resources' indirect parent CVR Energy Inc. received
an unsolicited takeover offer from Icahn Partners L.P. The offer,
for $30 per share plus a contingent cash payment right for any
premium if a sale goes through at a higher price within 15 months,
equates to about a $2.6 billion valuation. Any rating action
depends on the outcome of Icahn's efforts to realize value--either
negatively by leveraging CVR or selling it to a weaker company,
or positively by selling it to a larger, higher rated company. In
addition, we could raise the ratings if we believe management
(either current management if a takeover does not occur, or new
management if one does) will maintain current financial policy,"
S&P said.
"If the hostile takeover does not go through, we could raise the
ratings if we believe management is committed to maintain the
company's current financial policy and maintain debt to EBITDA
ratio below 2x on a sustained basis," S&P said.
"We believe such metrics are achievable given our expectation for
strong margins and cash flows until 2013 due to the company's
exposure to favorable refining and fertilizer dynamics," said
Standard & Poor's credit analyst Mark Habib.
"A downgrade may become likely if the hostile takeover spurs an
increase in leverage or if refining and fertilizer margins
contract such that we expect sustained debt to EBITDA above 3.5x,"
S&P said.
CONTAINER STORE: S&P Assigns 'B-' Corporate Credit Rating
---------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' corporate
credit rating to Coppell, Texas-based The Container Store Inc. The
outlook is stable.
"At the same time, we assigned our 'B-' issue-level rating (the
same as the corporate credit rating) with the '4' recovery rating
to the company's $275 million term loan facility, reflecting our
expectation for 30% to 50% recovery in the event of default. The
company used proceeds from the facility to refinance its domestic
bank loan and mezzanine notes," S&P said.
"The ratings reflect Standard & Poor's view that The Container
Store Inc. has a 'highly leveraged' financial risk profile, as
defined in our criteria, resulting from the 2007 leveraged buyout
(LBO) of the company by Leonard Green & Partners L.P.," said
Standard & Poor's credit analyst Mariola Borysiak. "This
acquisition added a substantial amount of debt to the company's
balance sheet and led to a significant weakening of cash flow
protection measures."
"Moreover, The Container Store's postbuyout capital structure
includes preferred equity, which accrues dividends. We see this
security as a means for extracting cash, if the credit facility is
amended in the future to provide for this, and we would anticipate
the replacement of the preferred stock with debt upon a future
change in control. As such, we treat this preferred stock
and the accrued dividend as debt in our ratio calculation,
according to our criteria," S&P said.
"Our ratings outlook is stable. Although we anticipate modest
operational gains and adequate liquidity over the near term, we
believe that credit metrics will remain deep within levels
indicative of a highly leveraged financial risk profile, with
leverage above 10x and EBITDA interest coverage below 1.0x," S&P
said.
"We could consider a downgrade if operating performance
significantly deteriorates, likely the result of increased
competitive pressure or weaker retail conditions. Specifically,
this would result in covenant cushion declining to below 15%,
stressing the company's liquidity position. An upgrade is unlikely
in the near term, given our expectations for consistently weak
credit measures resulting from increasing preferred stock," S&P
said.
CONTRACT RESEARCH: Epiq Bankruptcy OK'd as Administrative Agent
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Contract Research Solutions Inc., et al. to employ Epiq Bankruptcy
Solutions LLC as administrative advisor.
As reported in the Troubled Company Reporter on April 5, 2012, the
Debtors earlier obtained Bankruptcy Court authority to employ Epiq
as notice and claims agent.
Prior to the Petition Date, CRS paid Epiq a $25,000 retainer.
Jason D. Horwitz attests that Epiq does not hold any interest
adverse to the Debtors' estate.
About Cetero
Contract Research Solutions Inc., doing business as Cetero, a
provider of early-phase clinical research services for
pharmaceutical and biotechnology firms, filed a Chapter 11
petition (Bankr. D. Del. Case No. 12-11004) on March 26, 2012.
Cetero's 19 affiliates also sought bankruptcy protection (Bankr.
D. Del. Case Nos. 12-11005 to 12-11023).
Cetero plans to sell the business, including their rights to
pursue avoidance actions, to first-lien secured lenders in
exchange for $50 million in debt, absent higher and better offers.
Cetero has filed a motion seeking approval of procedures that will
govern the bidding and auction. The first-lien lenders have
formed entities that will acquire the business -- CSRI Holdings
LLC, as U.S. Purchaser, and 0935867 B.C. Ltd and 0935870 B.C. Ltd,
as Canadian Purchasers. Together, they will serve as stalking
horse bidders and have offered to exchange $50 million in secured
debt and assume $30 million in liabilities to buy the assets.
First lien lenders are also providing a $15 million loan to
finance the Chapter 11 effort. The procedures require that the
bidding protocol be approved by April 12 and an auction be held
between April 30 and May 5. Competing bids are due three days
prior to the auction date. The hearing for approval of the sale
must take place prior to May 10.
Assets are $205 million, with debt total $248 million. There is
$185 million in debt for borrowed money, including $116 million on
a first-lien term loan and revolving credit. The second-lien loan
is $25 million. Second-lien lenders have agreed to the sale.
Freeport Financial LLC serves as the sole lead arranger and
bookrunner, and as U.S. administrative agent and collateral agent
under the first lien facility. Bank of Montreal serves as the
Canadian agent. Freeport is also the agent under the second lien
facility.
Judge Kevin Gross oversees the case. Lawyers at Young Conaway
Stargatt & Taylor, LLP, and Paul Hastings LLP serve as the
Debtors' counsel. Stikeman Elliott LLP serves as Canadian
counsel. Carl Marks Advisory Group LLC serves as restructuring
advisor. Epiq Bankruptcy Solutions serves as claims and notice
agent. The petitions were signed by Michael T. Murren, CFO.
The first lien lenders and the stalking horse buyers are
represented by Peter Knight, Esq., at Latham & Watkings, LLP; and
Wael Rostom, Esq., at McMillan LLP.
Roberta A. Deangelis, U.S. Trustee for Region 3 appointed three
persons to the Official Committee of Unsecured Creditors in the
Chapter 11 cases of Contract Research Solutions, Inc., et al.
CONTRACT RESEARCH: Has Until May 11 to File Schedules, Statements
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware extended
until May 11, 2012, Contract Research Solutions, Inc., and its
debtor-affiliates' time to file their schedules of assets and
liabilities, executory contracts and unexpired leases, current
income and expenditures, and statements of financial affairs.
Cetero said that due to the complexity and diversity of its
operations, and the burdens occasioned by preparing for the
Chapter 11 filing, it anticipates it will be unable to complete
the Schedules with the initial 30-day period.
About Cetero
Contract Research Solutions Inc., doing business as Cetero, a
provider of early-phase clinical research services for
pharmaceutical and biotechnology firms, filed a Chapter 11
petition (Bankr. D. Del. Case No. 12-11004) on March 26, 2012.
Cetero's 19 affiliates also sought bankruptcy protection (Bankr.
D. Del. Case Nos. 12-11005 to 12-11023).
Cetero plans to sell the business, including their rights to
pursue avoidance actions, to first-lien secured lenders in
exchange for $50 million in debt, absent higher and better offers.
Cetero has filed a motion seeking approval of procedures that will
govern the bidding and auction. The first-lien lenders have
formed entities that will acquire the business -- CSRI Holdings
LLC, as U.S. Purchaser, and 0935867 B.C. Ltd and 0935870 B.C. Ltd,
as Canadian Purchasers. Together, they will serve as stalking
horse bidders and have offered to exchange $50 million in secured
debt and assume $30 million in liabilities to buy the assets.
First lien lenders are also providing a $15 million loan to
finance the Chapter 11 effort. The procedures require that the
bidding protocol be approved by April 12 and an auction be held
between April 30 and May 5. Competing bids are due three days
prior to the auction date. The hearing for approval of the sale
must take place prior to May 10.
Assets are $205 million, with debt total $248 million. There is
$185 million in debt for borrowed money, including $116 million on
a first-lien term loan and revolving credit. The second-lien loan
is $25 million. Second-lien lenders have agreed to the sale.
Freeport Financial LLC serves as the sole lead arranger and
bookrunner, and as U.S. administrative agent and collateral agent
under the first lien facility. Bank of Montreal serves as the
Canadian agent. Freeport is also the agent under the second lien
facility.
Judge Kevin Gross oversees the case. Lawyers at Young Conaway
Stargatt & Taylor, LLP, and Paul Hastings LLP serve as the
Debtors' counsel. Stikeman Elliott LLP serves as Canadian
counsel. Carl Marks Advisory Group LLC serves as restructuring
advisor. Epiq Bankruptcy Solutions serves as claims and notice
agent. The petitions were signed by Michael T. Murren, CFO.
The first lien lenders and the stalking horse buyers are
represented by Peter Knight, Esq., at Latham & Watkings, LLP; and
Wael Rostom, Esq., at McMillan LLP.
Roberta A. Deangelis, U.S. Trustee for Region 3 appointed three
persons to the Official Committee of Unsecured Creditors in the
Chapter 11 cases of Contract Research Solutions, Inc., et al.
CONTRACT RESEARCH: Jefferies & Company OK'd as Financial Advisors
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Contract Research Solutions, Inc., and its debtor-affiliates to
employ Jefferies & Company Inc. as financial advisors.
As reported in the Troubled Company Reporter on April 10, 2012,
Cetero hired Jefferies in September 2011 to serve as financial
advisor in connection with a restructuring of the Company or a
possible sale, disposition or other business transaction involving
Cetero's equity or assets.
Cetero will pay the firm a $125,000 monthly fee. Upon
consummation of a DIP financing, Jefferies will also receive a fee
equal to 2.0% of the greater of the total committed amount of, or
the aggregate gross proceeds from, the DIP facility.
The prepetition first lien lenders led by Freeport Financial LLC,
as agent, have committed to provide up to $15 million in
postpetition funding. Under an Interim DIP Order, the Debtors
were given authority to use up to $2.4 million of the DIP funds.
In the event of a merger or acquisition transaction, Jefferies
will be entitled to a fee equal to the greater of $1.25 million
and 1.0% of the transaction value. In the event of more than one
such qualifying transaction, the firm will be paid no less than
$1.50 million in the aggregate for all transactions.
In the event of a restructuring, the firm will be paid a
restructuring fee equal to the greater of $2.25 million and 1.0%
of the aggregate principal amount of all restructured liabilities.
The total aggregate fee will not exceed $4 billion, inclusive of
any fees from the M&A Transaction.
The Debtors also propose that 50% of the Monthly Fee actually paid
to Jefferies in excess of $375,000 and up to $1.125 million and
75% of the Monthly Fees actually paid to Jefferies in excess of
$1.125 million will be credited against any M&A Fee or
Restructuring Fee.
The Debtors also proposed that 100% of the first net Transaction
Fee -- net of the Monthly Fees -- actually received by Jefferies
will be credited once against any subsequent Transaction Fee due
to Jefferies but in no event will the crediting result in a
Transaction Fee that is less than $0 and in no event will one M&A
Fee be credited against another M&A Fee or one Restructuring Fee
be credited against another Restructuring Fee.
The Debtors said that Jefferies is not owed any amounts with
respect to the prepetition fees and expenses. During the 90-day
period prior to the Petition Date, Jefferies received in the
ordinary course the payment of four Monthly Fees totaling $500,000
and expense reimbursement of $32,422.
The Debtors also propose to indemnify Jefferies.
About Cetero
Contract Research Solutions Inc., doing business as Cetero, a
provider of early-phase clinical research services for
pharmaceutical and biotechnology firms, filed a Chapter 11
petition (Bankr. D. Del. Case No. 12-11004) on March 26, 2012.
Cetero's 19 affiliates also sought bankruptcy protection (Bankr.
D. Del. Case Nos. 12-11005 to 12-11023).
Cetero plans to sell the business, including their rights to
pursue avoidance actions, to first-lien secured lenders in
exchange for $50 million in debt, absent higher and better offers.
Cetero has filed a motion seeking approval of procedures that will
govern the bidding and auction. The first-lien lenders have
formed entities that will acquire the business -- CSRI Holdings
LLC, as U.S. Purchaser, and 0935867 B.C. Ltd and 0935870 B.C. Ltd,
as Canadian Purchasers. Together, they will serve as stalking
horse bidders and have offered to exchange $50 million in secured
debt and assume $30 million in liabilities to buy the assets.
First lien lenders are also providing a $15 million loan to
finance the Chapter 11 effort. The procedures require that the
bidding protocol be approved by April 12 and an auction be held
between April 30 and May 5. Competing bids are due three days
prior to the auction date. The hearing for approval of the sale
must take place prior to May 10.
Assets are $205 million, with debt total $248 million. There is
$185 million in debt for borrowed money, including $116 million on
a first-lien term loan and revolving credit. The second-lien loan
is $25 million. Second-lien lenders have agreed to the sale.
Freeport Financial LLC serves as the sole lead arranger and
bookrunner, and as U.S. administrative agent and collateral agent
under the first lien facility. Bank of Montreal serves as the
Canadian agent. Freeport is also the agent under the second lien
facility.
Judge Kevin Gross oversees the case. Lawyers at Young Conaway
Stargatt & Taylor, LLP, and Paul Hastings LLP serve as the
Debtors' counsel. Stikeman Elliott LLP serves as Canadian
counsel. Carl Marks Advisory Group LLC serves as restructuring
advisor. Epiq Bankruptcy Solutions serves as claims and notice
agent. The petitions were signed by Michael T. Murren, CFO.
The first lien lenders and the stalking horse buyers are
represented by Peter Knight, Esq., at Latham & Watkings, LLP; and
Wael Rostom, Esq., at McMillan LLP.
Roberta A. Deangelis, U.S. Trustee for Region 3 appointed three
persons to the Official Committee of Unsecured Creditors in the
Chapter 11 cases of Contract Research Solutions, Inc., et al.
COREL CORP: S&P Affirms 'B-' Corp. Credit Rating; Outlook Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Ottawa-
based packaged software provider Corel Corp. to stable from
developing. At the same time, Standard & Poor's affirmed its 'B-'
long-term corporate credit ratings on the company.
"The outlook revision reflects the close of the previously
announced amend and extend transaction, pursuant to which the
maturity of Corel's term loan has been extended to 2014 from
2012," said Standard & Poor's credit analyst David Fisher.
"Completion of this transaction alleviates near-term refinancing
risk in our opinion," Mr. Fisher added.
"We also affirmed our 'B-' issue-level rating on Corel's US$73.4
million amended and extended first-lien senior secured term loan.
The '3' recovery rating on the debt is unchanged and reflects our
opinion as to an expectation of meaningful (50%-70%) recovery in
the event of default," S&P said.
"The ratings on Corel reflect the company's 'vulnerable' business
risk profile based on what we view as its lack of product
diversity; weak market position within the highly competitive
packaged software industry; limited pricing power; and the short
life span of such products in general. Notably, Corel's dependence
on a few mature products for the vast majority of its cash flow
presents significant credit risk, in our opinion. The ratings also
reflect what we consider an 'aggressive' financial risk profile
due to what we see as the company's aggressive financial policy
given its tight covenant headroom, private equity ownership, and
intentions to pursue an acquisitive debt-financed growth
strategy," S&P said.
Corel is a graphics, productivity, and digital media packaged
software developer with more than 28 million active users
worldwide. The company's products enjoy a favorable mindshare
among value-conscious consumers and small business customers.
Products include established software brands such as WinZip,
CorelDRAW Graphics Suite, Corel WordPerfect Office Suite, Corel
Paint Shop Pro, Corel Painter, and iGrafx.
"The stable outlook reflects our expectation that Corel's
operating results will stabilize in the near term due to recent
restructuring actions and corporate initiatives, and that the
company will comply with its financial covenants, despite minimal
headroom. We could downgrade the company should normalized EBITDA
in the next few quarters fail to stabilize on a year-over-year
basis as this would demonstrate, in our opinion, that Corel's
products and business model are failing to gain traction in the
marketplace. Given our current concerns about the long-term
prospects for the company's relatively mature software offerings,
we are unlikely to raise the rating," S&P said.
COXWELL & BLEVINS: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Coxwell & Blevins Marina Corporation
dba Carrabelle Marina
P.O. Drawer BB
Carrabelle, FL 32322
Bankruptcy Case No.: 12-40274
Chapter 11 Petition Date: April 27, 2012
Court: United States Bankruptcy Court
Northern District of Florida (Tallahassee)
Debtor's Counsel: Robert C. Bruner, Esq.
215 Delta Court
Tallahassee, FL 32303
Tel: (850) 385-0342
Fax: (850) 270-2441
E-mail: RobertCBruner@hotmail.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 20 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/flnb12-40274.pdf
The petition was signed by Bruce S. Schaffer, president.
DEWEY & LEBOEUF: Bienenstock Denies Plans to File for Bankruptcy
----------------------------------------------------------------
Peter Lattman, writing for The New York Times' DealBook, reports
that Martin Bienenstock, Esq., the head of Dewey & LeBoeuf's
restructuring practice and a member of the office of the chairman,
said late Monday, "There are no plans to file bankruptcy."
According to Mr. Bienenstock, "And anyone who says differently
doesn't know what they're talking about."
NY Times also reports Dewey, according to an internal memo,
encouraged its partners on Monday evening to look for another job.
"All partners," said the memo, which was reviewed by The New York
Times, "are encouraged to seek out alternative opportunities."
NY Times relates the firm's leadership has been scrambling in
recent days to stave off failure by merging with another law firm
and persuading its lenders not to push it into liquidation.
According to NY Times, industry experts say if Dewey were to file
for bankruptcy, it would most likely lead to the firm's
dissolution. Unlike an operating company with physical assets
that can reorganize in a bankruptcy, Dewey -- a private
partnership whose only real assets are lawyers -- will be left
with nothing to restructure once its lawyers walk out the door.
NY Times notes more than 85 of the firm's 300 partners have left
since January this year, including at least 11 on Monday.
As reported by the Troubled Company Reporter on April 30, 2012,
unnamed sources familiar with the situation told The Wall Street
Journal that Greenberg Traurig LLP has called off discussions on a
possible deal with Dewey and that Dewey is in talks with
Washington D.C.-based Patton Boggs LLP. Sources also told WSJ
that, while official talks are over, Greenberg leaders are
continuing informal efforts to cherry-pick certain Dewey lawyers
and practice groups.
An internal memorandum WSJ reviewed indicated Dewey told its
global partnership Sunday that while discussions with Greenberg
had ended, it was in talks "with other firms about a possible
transaction."
Sources also told WSJ that Dewey at one point Sunday had discussed
a 90 to 120-day extension of the loan with a syndicate of bank
lenders, but the situation was fluid. The WSJ report said Dewey
has been considering options including a merger that could involve
a prearranged bankruptcy filing. Dewey has recently been in talks
with the bank lenders to renegotiate a $100 million credit line.
WSJ also reported that Dewey owes at least $145 million to at
least seven insurer companies that purchased a private bond the
firm floated in 2010, according to 2011 filings with U.S. state
insurance departments analyzed by the research firm SNL Financial
and some of the insurers. WSJ, citing figures from SNL and people
familiar with the matter, said the insurers with the biggest
exposure are:
Hartford Financial Services Group Inc. $40 million
British insurer Aviva $35 million
Dutch company Aegon NV $25 million
Dewey & LeBoeuf was formed by the 2007 merger of Dewey Ballantine
LLP and LeBoeuf, Lamb, Greene & MacRae LLP. The New York Times
reports that before the recent departures, Dewey employed about
2,000 people -- roughly 1,000 lawyers in 25 offices across the
globe and the other half support staff including legal
secretaries, mailroom clerks and paralegals.
DHC GROUP: A.M. Best Affirms 'bb-' Issuer Credit Rating
-------------------------------------------------------
A.M. Best Co. has affirmed the financial strength rating of B-
(Fair) and issuer credit ratings of "bb-" of DHC Group (DHC) and
its members, National American Insurance Company of California and
Danielson National Insurance Company. The outlook for all ratings
is stable. All the above companies are domiciled in Long Beach,
CA.
Ultimate financial control of DHC and its members rests with
Covanta Holding Corporation, a publicly held company that is
primarily involved in the waste disposal and energy services
industry.
The ratings reflect DHC's continued unfavorable operating
performance and adverse loss reserve development trends.
Offsetting these rating factors are management's initiatives to
improve operating income through a focus on its bail surety and
specialty automobile books of business.
DHC's significant underwriting losses over several years are
primarily the result of adverse loss reserve development from its
run-off lines of business and an elevated underwriting expense
ratio. As a result of substantial operating losses, surplus has
deteriorated considerably over this time period. To address the
group's adverse loss reserve deficiencies and loss of capital,
Covanta has contributed $16.0 million to DHC since 2008. This
continued financial support is contemplated in DHC's current
ratings.
In response to DHC's adverse results, management has undertaken
several initiatives including withdrawal from non-core lines of
business and various states, with rate revisions and agency
management for its continued lines of business.
While the outlook is stable, positive rating actions may result
from DHC's improved operating performance and capital
preservation. The ratings/outlook of the group could be
downgraded if operating performance falls materially short of A.M.
Best's expectations or if there is a significant deterioration in
capital strength as measured by Best's Capital Adequacy Ratio
(BCAR).
DILL'S STAR: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Dill's Star Route, Inc.
P.O. Box 55577
Portland, OR 97238
Bankruptcy Case No.: 12-42943
Chapter 11 Petition Date: April 27, 2012
Court: U.S. Bankruptcy Court
Western District of Washington (Tacoma)
Judge: Paul B. Snyder
Debtor's Counsel: Thomas W. Stilley, Esq.
SUSSMAN SHANK LLP
1000 SW Broadway, Suite 1400
Portland, OR 97205-3066
Tel: (503) 227-1111
E-mail: tom@sussmanshank.com
Estimated Assets: $100,001 to $500,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 20 largest unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/wawb12-42943.pdf
The petition was signed by Opal A. Dill, president.
Affiliate that filed separate Chapter 11 petition:
Entity Case No. Petition Date
------ -------- -------------
LAPO, Inc. 12-42942 4/27/2012
DISCOVERY INSURANCE: A.M Best Affirms 'bb' Issuer Credit Rating
---------------------------------------------------------------
A.M. Best Co. has revised the outlook to negative from stable and
affirmed the financial strength rating of B (Fair) and issuer
credit rating of "bb" of Discovery Insurance Company (DIC)
(Kinston, NC).
DIC's revised outlook reflects significant operating losses from
the impact of adverse loss reserve development in its affiliated
workers' compensation business and losses from three weather-
related events, which were exacerbated by the termination of quota
share reinsurance, on its non-standard automobile physical damage
coverage. As a result of the losses incurred on the affiliated
workers' compensation business effective January 1, 2012, DIC's
management discontinued writing this business and placed the
outstanding loss reserves into run off.
Somewhat offsetting these negative rating factors are DIC's
adequate risk-adjusted capitalization, long-standing agency
relationships and local market knowledge in North Carolina.
Potential future negative rating actions may occur if there is
adverse loss and loss adjustment reserve development on the
workers' compensation run-off reserves and greater than projected
losses from weather-related events that result in underwriting and
operating losses that further erode surplus.
DOLLAR GENERAL: S&P Lifts Corp. Credit Rating From 'BB+' on Growth
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its rating on discount
retailer Dollar General Corp., including the corporate credit
rating to 'BBB-' from 'BB+'. "At the same time, we removed the
ratings from CreditWatch with positive implications, where they
were placed on March 22, 2012. The outlook is stable," S&P said.
"We also assigned a 'BBB' issue rating to the company's new $880
million term loan C due 2017," S&P said.
"At the same time, we raised the debt issue rating on Dollar
General's term loan first-loss B-2 to 'BBB-' from 'BB+' and the
rating on the subordinated debt to 'BB' from 'BB-'. In addition,
we affirmed our 'BBB' rating on the company's existing term loan
first-out B-1 term loan," S&P said.
"The upgrade reflects our expectations for continued healthy sales
and EBITDA growth while debt levels remain relatively stable in
2012 and 2013," said Standard & Poor's credit analyst Ana Lai,
"and that Dollar General will maintain credit protection measures
in line with an 'intermediate' financial risk profile."
"The ratings on Dollar General reflect our expectation that the
company will maintain credit protection measures in line with its
intermediate financial risk profile, supported by healthy sales
growth while managing a rapid store growth strategy," S&P said.
"The stable outlook on Dollar General reflects our view that
positive operating momentum will drive healthy sales and cash flow
growth in 2012, resulting in total debt to EBITDA in the mid 2x
area. We expect revenue growth in the high-single-digit range and
margins will expand modestly because of positive sales leverage
while gross margin remains relatively stable. Despite strong sales
growth, margin gains will be tempered by costs increases to
support a rapid store expansion program," S&P said.
"While we believe Dollar General's credit protection measures will
improve further in 2012, this improvement will be limited compared
with prior years given our expectations for debt levels to remain
relatively flat. Despite, higher capital expenditures, we believe
that the company will continue to generate solid levels of free
operating cash flow in the $600 million range in 2012. Still, we
expect share repurchases activity to consume most of the free
cash flow. In our view, the company will manage its share
repurchase activity consistently with the credit ratio targets it
recently issued," S&P said.
"Although unlikely in the near-to-intermediate term, we would
consider lowering the rating if performance falls significantly
below our expectations due to competitive pressure, poor
execution, or an over-expansion of its stores. Under this
scenario, sales would have declined in the low-single digits and
gross margins would have fallen by over 50 basis points (bps). At
that time, leverage would approach the mid-3x area. Moreover,
debt-financed share repurchases that cause debt leverage to weaken
to above 3x could have a negative effect on the rating," S&P said.
"We would consider an upgrade if performance remains above
expectations, with the company sustaining leverage below 2x and
funds from operations to total debt in above 40% over the
intermediate term. Under this scenario, revenues would be in the
low-teen range and gross margin would expand by 150 bps," S&P
said.
DRUG ROYALTY: S&P Withdraws 'BB+' Corp. Credit Rating on Request
----------------------------------------------------------------
Standard & Poor's Ratings Services withdrew all of its ratings on
Delaware-based Drug Royalty II LP1, including its 'BB+' corporate
credit rating, at the company's request. The outlook on the
company had been stable.
Drug Royalty II LP 1 is a company that acquires rights to royalty
payments on drugs marketed by others, using the royalties earned
on drug sales to repay debt, generate returns for its investors,
and to fund acquisitions of additional pharmaceutical royalty
streams.
DYNEGY HOLDINGS: Public Access to Examiner Report Sought
--------------------------------------------------------
Claren Road Asset Management LLC is asking the U.S. Bankruptcy
Court in Manhattan to authorize public access to the report
released by the examiner who investigated Dynegy Inc.'s
acquisition of coal-powered plant assets from Dynegy Holdings
LLC's subsidiary.
Susheel Kirpalani, the court-appointed examiner, released the
report barely two months ago, which found that the sale of the
assets was a fraudulent transfer that harmed creditors.
Some portions of the 159-page report, however, were not disclosed
to the public because they reportedly contain information, which
is subject to "attorney-client privilege" or is protected as
"attorney-work-product."
Claren's lawyer, Matthew Williams, Esq., at Gibson Dunn & Crutcher
LLP, in New York, said public access to the redacted information
about the sale is critical in light of Dynegy Holdings' proposed
restructuring plan, which calls for "extensive third-party
releases" and enjoins legal actions against certain parties.
Mr. Williams also pointed out that based from the examiner's
report, the sale was made with "actual intent to hinder and delay
creditors and gives rise to claims for intentional fraudulent
transfer."
"Any analysis of information and communications related thereto is
not entitled to benefit from these privileges and protections as
there is sufficient probable cause to find that it falls squarely
within the crime-fraud exception," he said in court papers.
A court hearing to consider approval of the request is scheduled
for May 2, 2012.
CQS DO S1 Limited, which holds about $49 million worth of
subordinated notes, also called for public access to the report,
saying the redacted information is subject to the "crime-fraud"
exception.
Dynegy Says Crime-Fraud Exception Inapplicable
In a court filing, Dynegy Holdings said Claren cannot use the
"crime-fraud exception" argument because the examiner's report did
not indicate that the company or its lawyers intended to defraud
or deceive creditors.
Dynegy Holdings also argued that Claren ignored the terms of the
bankruptcy court's previous order, which authorized the
appointment of the examiner. The order, the company said,
protects privileged and confidential information shared with the
examiner from disclosure.
"The examiner's report, even in redacted form, is lengthy and
contains a substantial number of findings and recommendations that
creditors and the court can take into account in deciding whether
to support confirmation of a plan," Dynegy Holdings further said.
Dynegy Inc. also opposed public disclosure of the report, saying
the crime-fraud exception does not apply to any privileged
information, and that the company has not waived its privileges.
About Dynegy Inc.
Through its subsidiaries, Houston, Texas-based Dynegy Inc.
(NYSE: DYN) -- http://www.dynegy.com/-- produces and sells
electric energy, capacity and ancillary services in key U.S.
markets. The power generation portfolio consists of approximately
12,200 megawatts of baseload, intermediate and peaking power
plants fueled by a mix of natural gas, coal and fuel oil.
In August, Dynegy implemented an internal restructuring that
created two units, one owning eight primarily natural gas-fired
power generation facilities and another owning six coal-fired
plants.
Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and
said it was discussing options for managing its debt load with
certain bondholders.
Dynegy Holdings LLC and four other affiliates of Dynegy Inc.
sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case
No. 11-38111) Nov. 7 to implement an agreement with a
group of investors holding more than $1.4 billion of senior notes
issued by Dynegy's direct wholly-owned subsidiary, Dynegy
Holdings, regarding a framework for the consensual restructuring
of more than $4.0 billion of obligations owed by DH. If this
restructuring support agreement is successfully implemented, it
will significantly reduce the amount of debt on the Company's
consolidated balance sheet.
Dynegy Holdings disclosed assets of $13.77 billion and debt of
$6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each
estimated $100 million to $500 million in assets and debt.
Dynegy Holdings and its affiliated debtor-entities are represented
in the Chapter 11 proceedings by Sidley Austin LLP as their
reorganization counsel. Dynegy and its other subsidiaries are
represented by White & Case LLP, who is also special counsel to
the Debtor Entities with respect to the Roseton and Danskammer
lease rejection issues.
Dynegy was advised by Lazard Freres & Co. LLC and the Debtor
Entities' financial advisor is FTI Consulting.
The Official Committee of Unsecured Creditors has tapped Akin Gump
Strauss Hauer & Feld LLP as counsel nunc pro tunc to November 16,
2011.
Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceeding undertaken
by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or
215/945-7000).
DYNEGY HOLDINGS: Amends Deal for Houston Office Space
-----------------------------------------------------
Dynegy Holdings LLC asked the U.S. Bankruptcy Court in Manhattan
for permission to amend a contract with 1000 Louisiana LP, saying
it would help the company save as much as $2 million for this
year.
The contract allows Dynegy Holdings to lease an office space at
Wells Fargo Plaza in Houston, Texas. The company occupies the
60th to the 66th floor of the office building, with a total area
of 181,311 square feet.
Under an amended contract, the 62nd to the 66th floor of the
building will be vacated by Dynegy Holdings by May 31, 2012. The
company will also surrender two parking spaces to 1000 Louisiana.
Dynegy Holdings will realize $2 million in savings for this year
and $22.9 million in total savings over the next six years if the
bankruptcy court approves the proposed amendment, according to the
company's lawyer, Brian Lohan, Esq., at Sidley Austin LLP, in New
York.
A court hearing to consider approval of the proposed amendment is
scheduled for May 2, 2012.
About Dynegy Inc.
Through its subsidiaries, Houston, Texas-based Dynegy Inc.
(NYSE: DYN) -- http://www.dynegy.com/-- produces and sells
electric energy, capacity and ancillary services in key U.S.
markets. The power generation portfolio consists of approximately
12,200 megawatts of baseload, intermediate and peaking power
plants fueled by a mix of natural gas, coal and fuel oil.
In August, Dynegy implemented an internal restructuring that
created two units, one owning eight primarily natural gas-fired
power generation facilities and another owning six coal-fired
plants.
Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and
said it was discussing options for managing its debt load with
certain bondholders.
Dynegy Holdings LLC and four other affiliates of Dynegy Inc.
sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case
No. 11-38111) Nov. 7 to implement an agreement with a
group of investors holding more than $1.4 billion of senior notes
issued by Dynegy's direct wholly-owned subsidiary, Dynegy
Holdings, regarding a framework for the consensual restructuring
of more than $4.0 billion of obligations owed by DH. If this
restructuring support agreement is successfully implemented, it
will significantly reduce the amount of debt on the Company's
consolidated balance sheet.
Dynegy Holdings disclosed assets of $13.77 billion and debt of
$6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each
estimated $100 million to $500 million in assets and debt.
Dynegy Holdings and its affiliated debtor-entities are represented
in the Chapter 11 proceedings by Sidley Austin LLP as their
reorganization counsel. Dynegy and its other subsidiaries are
represented by White & Case LLP, who is also special counsel to
the Debtor Entities with respect to the Roseton and Danskammer
lease rejection issues.
Dynegy was advised by Lazard Freres & Co. LLC and the Debtor
Entities' financial advisor is FTI Consulting.
The Official Committee of Unsecured Creditors has tapped Akin Gump
Strauss Hauer & Feld LLP as counsel nunc pro tunc to November 16,
2011.
Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceeding undertaken
by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or
215/945-7000).
DYNEGY HOLDINGS: Young Conaway to Represent Independent Manager
---------------------------------------------------------------
Dynegy Holdings LLC and its affiliates seek the Court's authority
to employ Young Conaway Stargatt & Taylor LLP as counsel to David
Hershberg who was reportedly appointed as the company's
"independent" manager last month.
The services to be provided by Young Conaway include giving legal
advice to Mr. Hershberg related to the consideration and approval
of a plan of liquidation or reorganization, according to the court
filing.
The firm will be paid on an hourly basis and will be reimbursed
for its expenses. Its hourly rates range from $270 to $950 for
attorneys, and $140 to $245 for paralegals.
Young Conaway does not hold or represent interest adverse to Mr.
Hershberg or Dynegy Holdings' estates, and is "disinterested
within the meaning of 101(14) of the Bankruptcy Code," according
to a declaration by Edmon Morton, Esq., a partner at Young
Conaway, in New York.
The application will be considered at a court hearing scheduled
for May 2, 2012.
DO S1 Asks Court to Deny Application
DO S1 Limited is blocking efforts by Dynegy Holdings to get the
bankruptcy court's approval to hire Young Conaway.
In a court filing, DO S1 Limited, which holds $49 million worth of
notes, said the application is improper, pointing out that Dynegy
Holdings did not ask for and receive court approval to appoint Mr.
Hershberg.
DO S1 Limited also questioned Mr. Hershberg's integrity as Dynegy
Holdings' manager. "The so-called independent manager is not even
independent. The person chosen to serve as independent manager
was recommended by counsel to Dynegy Inc., Dynegy Holdings' sole
equity holder and alter ego," DO S1 said in the court filing.
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: Wilmer Okayed for Suits vs. Kyocera, et al.
----------------------------------------------------------
Eastman Kodak Co. and its affiliates obtained approval from the
U.S. Bankruptcy Court in Manhattan of its employment of Wilmer
Cutler Pickering Hale and Dorr LLP.
Wilmer Cutler will serve as Eastman Kodak's special counsel in
connection with four cases filed by the company against Kyocera
Corp., Asia Optical Co. Inc., Altek Corp. and Ricoh Company Ltd.
The lawsuits involve royalties due under Eastman Kodak's digital
camera patent license agreements.
The firm will also provide legal services in connection with the
potential sale and licensing transactions related to Eastman
Kodak's patents.
Eastman Kodak proposed to pay Wilmer Cutler on an hourly basis
and reimburse the firm of its expenses. The hourly rates range
from $675 to $1,250 for partners; $675 to $835 for counsel; $395
to $695 for associates; and $195 to $395 for paralegals.
Michael Summersgill, Esq., a partner at Wilmer Cutler, disclosed
that none of the professionals employed by the firm hold or
represent interest adverse to Eastman Kodak or its estates.
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).
EASTMAN KODAK: Jones Day Okayed as Counsel in Fujifilm Suit
-----------------------------------------------------------
The U.S. Bankruptcy Court in Manhattan approved Eastman Kodak
Co.'s application to employ Jones Day as its special litigation
counsel.
Jones Day is representing Eastman Kodak in patent-infringement
lawsuits including one filed by Fujifilm Corp. against the
company in the U.S. District Court in Manhattan.
Fujifilm filed the lawsuit last year to prohibit Eastman the
company from further manufacturing, selling, or importing
products that infringe on patents, which Fujifilm claims it owns.
Jones Day will be paid on an hourly basis and will receive
reimbursement of its expenses. The firm's hourly rates range
from $446 to $775 for partners; $270 to $600 for associates and
counsel; and $135 to $225 for paralegals and others who provide
professional support services.
James Wamsley III, Esq., a partner at Dow Jones, disclosed in a
declaration that the firm does not represent or hold interest
adverse to Eastman Kodak or its estate.
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).
EASTMAN KODAK: Creditors Panel Has OK for Milbank as Counsel
------------------------------------------------------------
The U.S. Bankruptcy Court in Manhattan approved the hiring of
Milbank, Tweed, Hadley & McCloy LLP as legal counsel of the
Official Committee of Unsecured Creditors of Eastman Kodak Co.
The services to be provided by the firm include the preparation
and filing of court papers and assisting the committee in
reviewing Eastman Kodak Co.'s financial reports. It will also
assist the committee in the formulation and implementation of the
company's Chapter 11 plan.
Milbank will be compensated at its standard hourly rates, which
are based on each professional's level of experience and will get
reimbursed expenses. The firm's hourly rates range from $825 to
$1,140 for partners; $795 to $995 for counsel; $295 to $795 for
associates and senior attorneys; and $130 to $290 for legal
assistants.
Robert Jay Moore, Esq., a partner at Milbank, Tweed, Hadley &
McCloy LLP, said his firm does not represent any other entity
having an adverse interest in connection with Eastman Kodak's
bankruptcy case.
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).
EASTMAN KODAK: Togut Okayed as Creditors Panel's Co-Counsel
-----------------------------------------------------------
The Official Committee of Unsecured Creditors in Eastman Kodak
Co.'s cases won court approval to hire Togut, Segal & Segal LLP to
provide services on bankruptcy-related matters with which its lead
counsel has conflict of interest.
Togut Segal is tasked to provide these services:
(1) represent the committee in connection with contested
matters seeking allowance or settlement of priority or
secured claims in an amount less than $500,000, and
general unsecured claims in an amount less than $1
million excluding claims related to intellectual property,
environmental issues, employee benefits or pensions;
(2) review and analyze motions for relief from the automatic
stay seeking liquidation of general unsecured claims in an
amount less than $500,000;
(3) represent the committee in connection with contested
matters concerning utilities;
(4) represent the committee in connection with matters
concerning 503(b)(9) claims or reclamation demands in an
amount less than $500,000;
(5) represent the committee in the review and analysis of
proposed de minimis asset sales or dispositions by Eastman
Kodak in an amount less than $500,000 that do not directly
alter or impact the company's restructuring or significant
operations; and
(6) represent the committee in connection with the review of
lien perfection issues.
Togut Segal will be paid on an hourly basis and will get
reimbursed expenses. Its hourly rates range from $800 to $810
for partners; $715 for counsel; $215 to $675 for associates; and
$145 to $285 for paralegals and law clerks.
In a declaration, Albert Togut, Esq., a senior member of Togut
Segal & Segal LLP, disclosed that the firm does not have an
interest adverse to Eastman Kodak's estates, creditors or equity
security holders.
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).
EASTMAN KODAK: Panel Can Hire Alvarez & Marsal as Fin'l Advisor
---------------------------------------------------------------
The Official Committee of Unsecured Creditors in Eastman Kodak's
cases obtained permission from the U.S. Bankruptcy Court in
Manhattan to hire Alvarez & Marsal North America LLC as its
financial adviser.
A&M will monitor and evaluate Eastman Kodak's operations, cash
flows and business plans as well as the company's restructuring.
The firm will also assist the committee in the evaluation and sale
of Eastman Kodak's intellectual property portfolio.
A&M will be paid by Eastman Kodak for the services of its
professionals at their customary hourly billing rates. The
hourly rates range from $625 to $850 for managing directors; $450
to $625 for directors; and $225 to $450 for analysts and
associates. The firm will also get reimbursed expenses.
As part of A&M's overall compensation, the committee proposed
that Eastman Kodak indemnify the firm for any claims arising from
or related to its employment.
Kelly Stapleton, A&M managing director, disclosed in court papers
that the firm does not represent any other entity having an
adverse interest in connection with Eastman Kodak's bankruptcy
case.
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).
EMDEON INC: Moody's Says Upsized Term Loan No Impact on 'B2' CFR
----------------------------------------------------------------
Moody's Investors Service said that Emdeon Inc.'s B2 corporate
family rating and Ba3 ratings on its senior secured credit
facilities are unaffected by the re-pricing of its credit
facilities and upsizing of its term loan by $80 million to
$1,301 million.
Emdeon Inc. provides healthcare transaction processing services to
health benefits payers, healthcare providers (hospitals,
physicians, physician practices), and pharmacies. The company
generated approximately $1.12 billion of revenues for 2011. Emdeon
is owned by Blackstone and Hellman and Friedman.
FALCON GAS: Files for Chapter 11 in Manhattan
---------------------------------------------
Falcon Gas Storage Company, Inc., filed a Chapter 11 petition
(Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012, estimating
assets and debts of up to $100 million.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Falcon Gas is an affiliate of Arcapita Bank
BSC.
Atlanta-based Falcon is an operator of natural-gas storage
facilities. The list of Falcon's larger creditors includes
Commerzbank AG and National Bank of Bahrain BSC, two members of
the Arcapita unsecured creditors' committee. The two were listed
as having claims of $164.7 million and $132.3 million,
respectively.
About Arcapita Bank
Arcapita Bank B.S.C., also known as First Islamic Investment Bank
B.S.C., along with affiliates, filed for Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19,
2012. The Debtors said they do not have the liquidity
necessary to repay a US$1.1 billion syndicated unsecured facility
when it comes due on March 28, 2012.
The Debtors have tapped Gibson, Dunn & Crutcher LLP as bankruptcy
counsel, Linklaters LLP as corporate counsel, Towers & Hamlins
LLP as international counsel on Bahrain matters, Hatim S Zu'bi &
Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild
Inc. and financial advisor, and GCG, Inc., as notice and claims
agent.
Milbank, Tweed, Hadley & McCloy LLP, in New York, N.Y., and
Washington, D.C., is the proposed counsel to the Official
Committee of Unsecured Creditors.
Founded in 1996, Arcapita is a global manager of Shari'ah-
compliant alternative investments and operates as an investment
bank. Arcapita is not a domestic bank licensed in the United
States. Arcapita is headquartered in Bahrain and is regulated
under an Islamic wholesale banking license issued by the Central
Bank of Bahrain. The Arcapita Group employs 268 people and has
offices in Atlanta, London, Hong Kong and Singapore in addition
to its Bahrain headquarters. The Arcapita Group's principal
activities include investing on its own account and providing
investment opportunities to third-party investors in conformity
with Islamic Shari'ah rules and principles.
The Arcapita Group currently has roughly US$7 billion in assets
under management. On a consolidated basis, the Arcapita Group
owns assets valued at roughly US$3.06 billion and has liabilities
of roughly US$2.55 billion. The Debtors owe US$96.7 million
under two secured facilities made available by Standard Chartered
Bank.
Arcapita explored out-of-court restructuring scenarios. The
Debtors, however, have been unable to achieve 100% lender consent
required to effectuate the terms of an out-of-court
restructuring.
Subsequent to the Chapter 11 filing, Arcapita Investment Holdings
Limited, a wholly owned Debtor subsidiary of Arcapita in the
Cayman Islands, issued a summons seeking ancillary relief from
the Grand Court of the Cayman Islands with a view to facilitating
the Chapter 11 cases. AIHL sought the appointment of Zolfo
Cooper as provisional liquidator.
FLAVORFUL EVENTS: Case Summary & 5 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Flavorful Events, Inc.
104 Stonewall Street
Cartersville, GA 30120
Bankruptcy Case No.: 12-41269
Chapter 11 Petition Date: April 27, 2012
Court: United States Bankruptcy Court
Northern District of Georgia (Rome)
Judge: Paul W. Bonapfel
Debtor's Counsel: Harry W. Krumenauer, Esq.
147 Waterman Street
Marietta, GA 30060
Tel: (770) 427-4746
E-mail: harrywkrumenauer@bellsouth.net
Scheduled Assets: $1,500
Scheduled Liabilities: $1,117,500
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/ganb12-41269.pdf
The petition was signed by Daniel H. Gurley, president/owner.
FORD MOTOR: Moody's Issues Summary Credit Opinion
-------------------------------------------------
Moody's Investors Service issued a summary credit opinion on Ford
Motor Company and includes certain regulatory disclosures
regarding its ratings. This release does not constitute any change
in Moody's ratings or rating rationale for Ford Motor Company and
its affiliates.
Moody's current ratings on Ford Motor Company and its affiliates
are:
Long Term Corporate Family Ratings (domestic currency) ratings of
Ba1
Probability of Default ratings of Ba1
Senior Secured Bank Credit Facility (domestic currency) ratings of
Baa2, 12 - LGD2
Senior Unsecured (domestic currency) ratings of Ba2, 64 - LGD4
Senior Unsecured Shelf (domestic currency) ratings of (P)Ba2, 64 -
LGD4
Speculative Grade Liquidity Rating ratings of SGL-1
BACKED LT IRB/PC (domestic currency) ratings of Ba2, 64 - LGD4
Ford Holdings Inc.
BACKED Senior Unsecured (domestic currency) ratings of Ba2, 64 -
LGD4
BACKED Senior Unsecured Shelf (domestic currency) ratings of
(P)Ba2, 64 - LGD4
Ford Capital B.V.
BACKED Senior Unsecured Shelf (foreign currency) ratings of
(P)Ba2, 64 - LGD4
RATINGS RATIONALE
The Ba1 Corporate Family Rating (CFR) of Ford Motor Company
reflects the company's strong position in North America, its
ability to maintain a competitive and flexible cost structure as a
result of the new four-year UAW labor agreement, and credit
metrics that should remain strong for the current rating level.
Additional support for the rating is provided by the company's $33
billion gross liquidity position. The combination of these
operating strengths and a robust liquidity position provide Ford
with considerable capacity to contend with stress.
The rating also considers the ongoing challenges Ford will face as
it pursues its global operating strategy. Key elements of this
strategy include: maintaining world-class product-quality
standards, accelerating its new-product roll-out strategy
globally, increasing the migration to global platforms, and
significantly streamlining its relationship with suppliers..
The positive rating outlook reflects Moody's expectation that Ford
will continue to generate credit metrics that are supportive of a
low investment grade rating, and that the company will maintain
ample operating and financial flexibility to contend with
potential downturns in key markets.
Upward movement in Ford's rating could be supported if the company
continues to demonstrate its commitment to prudent operating and
financial practices. This would include maintaining a competitive
product portfolio and breakeven level in North America,
successfully expanding its position in Asia, broadening the use of
global platforms, and preserving a strong liquidity position.
These conditions, combined with credit metrics of the following
level, could support a higher rating - EBITA/interest
approximating 4.5x, debt/EBITDA below 2.5x, and EBITA margin
approximating 6.5%.
With its relatively low North American breakeven level and strong
liquidity position Ford has considerable capacity to contend with
cyclical downturns and other sources of operating stress. Pressure
on the rating would most likely result from a weakening of the
operating or financial disciplines that Ford has embraced. Moody's
thinks this is unlikely. Nevertheless, rating pressure could
result from: an aggressive dividend policy relative to free cash
generation or a material narrowing in the company's liquidity
cushion. Credit metric levels that could stress the Ba1 rating
level include: EBITA/interest below 2.5x or debt/EBITDA above 4x.
The principal methodology used in rating Ford Motor Company was
the Global Automotive Manufacturer Industry Methodology published
in June 2011.
FREDDIE MAC: Stuart D. Meissner Probing Claims vs. Citi and Others
------------------------------------------------------------------
The Securities Arbitration Law Firm of Stuart D. Meissner LLC, is
investigating and/or pursuing securities arbitration claims
against Brokerage Firm Merrill Lynch, Citigroup, Morgan Stanley
Smith Barney and other firms with the Financial Industry
Regulatory Authority's office of Dispute Resolution, on behalf of
investors who sustained losses in Freddie Mac and Fannie Mae
Preferred Securities.
Claims allege that conservative investors were solicited to invest
in such products through fraudulent misrepresentations and
omissions of material facts, while actual risks were not
accurately and fully disclosed to investors. Victims of such
include retired firefighters, school teachers and many others.
A common theme among all investors was brokers often stating that
such investments were as safe and secure as a de-facto government
backed bond, when, in reality, such was not the case. Preferred
stocks of Fannie Mae and Freddie Mac carried significant risks
which were simply never disclosed to investors. Preferred stocks
are much more volatile than bonds and have characteristics that
make them unique and much riskier than the guaranteed status of
Corporate Bonds, as they were often pitched to be. Preferred
stockholders stand behind bond holders in line for the company's
assets if, and when it should run into a financial problem. This
added extreme default risk to the holders of Fannie and Freddie
preferred stock, a risk which was often not disclosed to
investors. Further, Fannie Mae and Freddie Mac could have (and
indeed did) eliminated preferred dividend payments, a material
disclosure fact related to the investment in a product for income
purposes.
In March of 2008, Fitch Ratings downgraded Fannie Mae's preferred
stock rating; eventually the securities rating would be downgraded
by Moody's to the lowest investment grade credit rating in August
of 2008. Further, on, or around, Sept. 8, 2008, United States
Treasury Secretary Henry Paulson announced that Fannie Mae and
Freddie Mac would be placed under conservatorship, eliminating all
future dividend payments, resulting in the preferred stocks
becoming essentially worthless. Fannie Mae and Freddie Mac
preferred stock was promoted by investment firms even in the face
of the companies' plummeting financial condition. Firms,
including Merrill Lynch, earned more than one-third of a billion
dollars in fees between November 2007 and June 2008 in relation to
such securities. Investors saw their investments become
essentially worthless with the deepening of the U.S. housing
crisis.
About Freddie Mac
Based in McLean, Virginia, the Federal Home Loan Mortgage
Corporation, known as Freddie Mac (OTCBB: FMCC) --
http://www.FreddieMac.com/-- was established by Congress in
1970 to provide liquidity, stability and affordability to the
nation's residential mortgage markets. Freddie Mac supports
communities across the nation by providing mortgage capital to
lenders. Over the years, Freddie Mac has made home possible for
one in six homebuyers and more than five million renters.
Freddie Mac is under conservatorship and is dependent upon the
continued support of Treasury and the Federal Housing Finance
Agency acting as conservator to continue operating its
business.
GALLOWAY MEDICAL: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Galloway Medical Center, Ltd.
1106 N. Galloway Avenue
Mesquite, TX 75149
Bankruptcy Case No.: 12-32646
Chapter 11 Petition Date: April 27, 2012
Court: U.S. Bankruptcy Court
Northern District of Texas (Dallas)
Judge: Harlin DeWayne Hale
Debtor's Counsel: Howard Marc Spector, Esq.
SPECTOR & JOHNSON, PLLC
12770 Coit Road
Banner Place, Suite 1100
Dallas, TX 75251
Tel: (214) 365-5377
Fax: (214) 237-3380
E-mail: hspector@spectorjohnson.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by J. Teig Port, president.
GEORGES MARCIANO: Involuntary Bankruptcy May be Annulled
--------------------------------------------------------
"If we can rely on comments by three judges in the California
Court of Appeal, the involuntary bankruptcy of Guess Jeans founder
Georges Marciano, declared on Dec. 28, 2010, may be annulled," a
press release by Enigma Communications Inc. said.
The press release stated that at a hearing in the Court of Appeal
last March concerning the Gary Iskowitz case, the three judges
made several comments, one of which suggests that the trial judge,
Victoria Kaufman, may have erred when she based her decision to
declare Mr. Marciano bankrupt in his absence on unproven factors.
According to the hearing transcripts, "The court awarded
$24 million in emotional distress damages and allocated them $10
million to Gary for emotional distress, $10 million for shame,
mortification and hurt feeling; to Theresa, $1 million for
emotional distress and $1 million for shame, mortification and
hurt feelings; and, to Carolyn, $1 million for emotional distress
and $1 million for shame, mortification and hurt feelings. In
spite of all that, there was no evidence from any therapist,
psychologist, psychiatrist, or any professional person that they
suffered any type of emotional distress (...), it just seems like
there should be some."
The involuntary bankruptcy declared in California led to the
seizure, in fall 2011, of all Mr. Marciano's assets in Canada, a
decision that was annulled in December 2011 by the Honourable Mark
Schrager, Quebec Superior Court. In that case, American trustee
David Gottlieb, facing contempt, has been summoned to appear in
Quebec Superior Court on June 11 to answer for his actions.
About Georges Marciano
Georges Marciano is the co-founder of the apparel company Guess?,
Inc. and an investor in various companies and real estate
ventures. Three of the five former employees of Mr. Marciano,
who won a $370 million libel judgment against him in July 2009,
filed an involuntary chapter 11 bankruptcy petition (Bankr. C.D.
Calif. Case No. 09-39630) against the Guess? Inc. co-founder on
Oct. 27 2009. Mr. Marciano challenged the involuntary petition
for 14 months, and Judge Victoria S. Kaufman entered an order for
relief against Mr. Marciano on Dec. 29, 2010.
GRAY TELEVISION: Moody's Affirms 'Caa1' CFR; Outlook Positive
-------------------------------------------------------------
Moody's Investors Service changed Gray Television, Inc.'s rating
outlook to positive from stable and affirmed the company's
existing ratings including its Caa1 Corporate Family Rating (CFR),
Caa1 Probability-of-Default Rating (PDR), debt instrument ratings,
and SGL-2 Speculative Grade Liquidity (SGL) rating. The outlook
change reflects improved operating performance and credit metrics
as well as expectations for the company to grow revenue and EBITDA
meaningfully during the current election and Summer Olympics year
resulting in further improvement of 2-year average credit metrics.
Loss given default point estimates were updated to reflect the
current debt mix.
LGD Updates:
Issuer: Gray Television, Inc.
$40 Million 1st Lien Sr Sec Revolver due December 2014:
Affirmed B2, (point estimates updated to LGD2 -- 26% from
LGD2 -- 28%)
$925 Million 1st Lien Sr Sec Revolver due December 2014
($472 million outstanding): Affirmed B2, (point estimates
updated to LGD2 -- 26% from LGD2 -- 28%)
$365 Million 10.5% 2nd Lien Sr Sec Notes due June 2015 ($365
million outstanding): Affirmed Caa2, (point estimates
updated to LGD5 -- 80% from LGD5 -- 82%)
Outlook Actions:
Issuer: Gray Television, Inc.
Outlook, Changed to Positive from Stable
Ratings Rationale
Gray's Caa1 corporate family rating reflects very high leverage
with a 2-year average debt-to-EBITDA ratio of 7.6x as of December
31, 2011 (including Moody's standard adjustments) and modest free
cash flow-to-debt ratios of less than 1% as a result of consistent
preferred share repurchases. Debt balances increased $18 million
in 2011 (including Moody's standard adjustments) reflecting a $15
million increase in unfunded pension obligations plus revolver
advances to partially fund preferred share repurchases. Looking
forward, Moody's expects Gray will continue to benefit from strong
demand for political advertising during election years resulting
in markedly higher EBITDA growth in 2012 and resulting in 2-year
average debt-to-EBITDA ratios estimated at 6.8x -- 7.0x by the end
of 2012. Ratings are supported by Gray's consistent track record
for #1 and #2 ranked positions in 29 of 30 markets and good EBITDA
margins (including Moody's standard adjustments) reflecting its
top ranked local news programming that captures a significant
share of in-market revenue, its relatively low syndicated program
costs, and expected cash flow benefits from growing retransmission
revenues (net of reverse compensation). Gray's television stations
and associated digital properties also benefit from its strategy
of operating stations in university markets (17 collegiate
markets) and/or state capitals (8 state capitals) which generally
have more stable economies; however, Moody's believes the volatile
nature of the company's earnings due to its relatively high level
of political revenues increases risks related to unexpected
changes in regulations governing political campaign spending. The
positive outlook reflects Moody's expectation that the company
will generate more than a 40% increase in EBITDA in 2012 given
expected demand for political advertising and the Summer Olympics
and that core revenues will continue to grow in the low single
digits beyond 2012 allowing Gray to continue to improve its 2-year
average debt-to-EBITDA ratios. Assuming free cash flow is applied
to reduce debt balances, there would be upward pressure on debt
ratings.
Moody's believes it is critical that Gray continue to focus on
reducing debt balances and improving liquidity, especially during
even numbered years, to achieve operating and financial
flexibility as well as to absorb risks related to media
fragmentation, reliance on political advertising, and eventual
need to refinance 2014-2015 maturities. Ratings incorporate
Moody's expectations for good liquidity, notwithstanding Moody's
expectations that Gray will continue to repurchase up to $20
million of preferred shares (17% accruing dividend) in 2012 and
again 2013.
The positive outlook incorporates Moody's expectation that Gray
will generate strong political revenue, especially in the second
half of 2012, and that EBITDA for 2012 will increase at least 40%
above 2011 levels resulting in meaningfully reduced debt-to-EBITDA
leverage and more than $40 million of excess cash flow after $20
million of preferred share redemptions. The outlook also
incorporates Moody's view that the company will maintain good
liquidity and that demand for core, non-political advertising will
continue to improve. Notwithstanding management's plan to fund $20
million of preferred share repurchases for each of the next two
years, the outlook also incorporates Moody's expectation that free
cash flow will continue to be applied to reduce debt balances
resulting in lower debt-to-EBITDA ratios.
A downgrade is not likely given the positive outlook; however,
ratings could be downgraded if Moody's believes Gray would be
unable to refinance its maturities due 2014-2015.
Ratings could be upgraded if Gray's core revenue and EBITDA
continue to grow reflecting an improving economic environment and
free cash flow is applied to debt repayment resulting in 2-year
average debt-to-EBITDA ratios approaching management's plan for
FYE 2012 (less than 7.0x, including Moody's standard adjustments)
with expectations for further improvement. Gray would also need to
maintain good liquidity, including at least 2% - 3% positive free
cash flow on a 2-year average basis.
The principal methodology used in rating Gray Television 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.
Gray Television, Inc., headquartered in Atlanta, Georgia, is a
television broadcaster that owns 36 primary television stations
serving 30 mid-sized markets plus 40 digital second channels.
Network affiliations for primary stations include 17 CBS, 10 NBC,
8 ABC and 1 FOX station. The company operates stations ranked #1
or #2 in 29 of 30 markets. Gray is publicly traded and the shares
are widely held with J. Mack Robinson or affiliates owning
approximately 3.1% of common shares. The dual class equity
structure provides J. Mack Robinson or affiliates with 39.4% of
voting control. The company recorded total revenues of
approximately $307 million during the year ended 12/31/2011.
H&M OIL & GAS: Files for Chapter 11 in Dallas
---------------------------------------------
H & M Oil & Gas, LLC, filed a bare-bones Chapter 11 petition
(Bankr. N.D. Tex. Case No. 12-32785) in its hometown Dallas on
April 30, 2012.
Another entity, Anglo-American Petroleum Corp. (Case No. 12-32786)
simultaneously filed for Chapter 11.
Each of the Debtors estimated assets and debts of $50 million to
$100 million.
Prospect Capital Corp., a creditor, has filed a notice of
appearance in each Chapter 11 case.
The Debtors are represented by Keith William Harvey, Esq., at
Anderson Tobin PLLC, in Dallas.
Dallas, Texas-based Anglo-American Petroleum Corporation --
http://www.angloamericanpetroleum.com/-- is the holding
corporation for H&M Oil & Gas LLC, an oil and gas production and
development company headquartered in Dallas, TX. H&M, through its
operating company, H&M Resources, LLC is currently focused on
developing its leases in the permian basin and Texas panhandle.
HALE MOKU: Sec. 341 Creditors' Meeting Set for June 4
-----------------------------------------------------
The U.S. Trustee for the Central District of California will
convene a Meeting of Creditors under 11 U.S.C. Sec. 341(a) in the
Chapter 11 case of Hale Moku, LLC, on June 4, 2012, at 10:00 a.m.
at RM 2610, 725 S Figueroa St., in Los Angeles. The last day to
oppose discharge or dischargeability is Aug. 3, 2012.
Hale Moku, LLC, filed a Chapter 11 petition (Bankr. C.D. Calif.
Case No. 12-24357) on April 24, 2012. 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. Judge Vincent P.
Zurzolo presides over the case. Thomas C. Corcovelos, Esq., at
Corcovelos & Forry LLP, in Manhattan Beach, California, serves as
counsel.
According to reporting by the Troubled Company Reporter, Hale Moku
LLC first filed a bankruptcy petition, pro se (Bankr. C.D. Calif.
Case No. 12-18574) on March 9, 2012.
HAYDEL PROPERTIES: Taps Schwartz Orgler to Handle Assets Sale
-------------------------------------------------------------
Haydel Properties, LP, asks the U.S. Bankruptcy Court for the
Southern District of Mississippi for permission to employ
Schwartz, Orgler & Jordan, PLLC, as special counsel.
The Debtor expects to sell different parcels of real property
during the course of the Chapter 11 Proceeding. Pursuant to the
local rules in the Southern District of Mississippi, the Debtor is
required to retain special counsel to handle sales of real
property.
SOJ will represent the Debtor in the sale of 9424 Three Rivers
Road, Gulfport, Mississippi and the sale of any other parcels of
real property during the pendency of the Chapter 11 proceeding.
Specifically, SOJ will:
a. review any contracts on which the Debtor will sell any
parcels of real property;
b. complete any required title examinations;
c. issue any title insurance required by the contracts; and
d. handle and complete the closing of any sales as requested by
the Debtor.
The fees on each closing will be determined by the estimated
amount of work to be completed and will be submitted for approval
along with an application for approval of the sale of each parcel.
To the best of the Debtor's knowledge, SOJ is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
About Haydel Properties
Haydel Properties LP, in Biloxi, Mississippi, filed for Chapter 11
bankruptcy (Bankr. S.D. Miss. Case No. 12-50048) on Jan. 11, 2012.
Judge Katharine M. Samson presides over the case. Patrick A.
Sheehan, Esq., at Sheehan & Johnson, PLLC; and Robert Gambrell,
Esq., at Gambrell & Associates, PLLC, serve as the Debtor's
counsel. Christy Pickering serves as accountant. The Debtor
disclosed $11.7 million in assets and $7.24 million in liabilities
as of the Chapter 11 filing. The petition was signed by Michael
D. Haydel, manager of general partner.
HOLDEN TRADING: Case Summary & 4 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: The Holden Trading Company
128 Ocean Boulevard West
Supply, NC 28462
Bankruptcy Case No.: 12-03219
Chapter 11 Petition Date: April 27, 2012
Court: United States Bankruptcy Court
Eastern District of North Carolina (Wilson)
Judge: Randy D. Doub
Debtor's Counsel: George M. Oliver, Esq.
OLIVER FRIESEN CHEEK, PLLC
P.O. Box 1548
New Bern, NC 28563
Tel: (252) 633-1930
Fax: (252) 633-1950
E-mail: efile@ofc-law.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 four largest unsecured
creditors filed together with the petition is available for free
at http://bankrupt.com/misc/nceb12-03219.pdf
The petition was signed by John Wayne Alan Holden,
president/owner.
Affiliate that filed separate Chapter 11 petition:
Petition
Debtor Case No. Date
------ -------- ----
John Wayne Alan Holden 11-05177 07/05/11
HOLOGIC INC: S&P Lowers Corp. Credit Rating to 'BB'; on Watch Neg
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior unsecured debt ratings on Hologic Inc. to 'BB' from
'BB+' and placed the ratings on CreditWatch with negative
implications. The ratings are unsolicited.
"The downgrade reflects our expectation that pro forma debt
leverage will increase to about 6.7x as a result of the
transaction," said Standard & Poor's credit analyst Cheryl Richer,
"and that ratings will, at best, be 'BB'. The CreditWatch with
negative implications reflects the potential for ratings to fall
another one to two notches."
"Hologic's 'BB' rating reflects its 'fair' business risk profile
and pro forma for the Gen-Probe acquisition, a 'highly aggressive'
financial risk profile; we expect the company to fund the majority
of the $3.7 billion acquisition with debt," S&P said.
"The current fair business risk profile reflects ongoing
technology risk, competitive threats, limited geographic diversity
(75% of sales are in the U.S.), and some exposure to
reimbursement, despite the company's well-established positions in
women's health markets and moderate product diversity. Hologic
manufactures and supplies diagnostic, surgical, and medical
imaging equipment and products for women's health care. We believe
that the Gen-Probe acquisition has the potential to strengthen the
company's business risk profile to 'satisfactory,' given expanded
product diversity, the combined entity's complementary sales force
and product lines (which could provide operational synergies),
increased opportunities for international distribution of Gen-
Probe's products, and a higher proportion of revenues derived from
consumable products to total revenues," S&P said.
Resolution of the CreditWatch, and subsequent ratings downgrades
will be contingent upon determining:
If the additional Gen-Probe assets bolster Hologic's scale and
product diversity sufficiently to raise its business risk
profile to satisfactory from fair; and
"To what degree we believe Hologic can de-leverage its balance
sheet within the next 12-18 months, to be commensurate with an
'aggressive' or 'significant' financial risk profile; we do
not expect the company's financial risk profile return to
'intermediate' within this timeframe," S&P said.
"Hologic has a successful track record of de-leveraging subsequent
to sizable transactions. Given solid free operating cash flow, and
mid-single-digit revenue growth prospects, we believe that
potential exists for Hologic to de-leverage rapidly post
transaction. We will update our CreditWatch listing after
completing a more thorough assessment of the transaction," S&P
said.
HOSPITAL AUTHORITY OF CHARLTON: Files for Chapter 9 in Georgia
---------------------------------------------------------------
Hospital Authority of Charlton County filed a Chapter 9 petition
(Bankr. S.D. Ga. Case No. 12-50305) in Waycross, Georgia, on April
30, 2012.
According to the case docket, the schedules of assets and
liabilities, the statement of financial affairs, and other
The Debtor, which owns a Charlton County, Georgia-based health
care business, estimated assets of $10 million to $50 million and
debts of up to $10 million.
The Debtor and the Charlton County are defendants to a contract
suit filed by St. Vincent's Health System, Inc., in district court
(M.D. Fla. Case No. 3:2012cv00285) on March 14, 2012, according to
Justia.com.
St. Vincent's is listed among the Debtor's 20 largest unsecured
creditors, with scheduled claims of $480,000 on account of
interest on loans, management fees, and a promissory note.
The Charlton Memorial Hospital is a 25-bed critical access
hospital in Folkston, Georgia. Charlton treats 67,000 patients in
its emergency department each year. The hospital is/was managed
by St. Vincent's.
HOUSTON DIXIE: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Houston Dixie Farm Road Business Park, Ltd.
16865 Diana Lane, #200
Houston, TX 77058
Bankruptcy Case No.: 12-33106
Chapter 11 Petition Date: April 27, 2012
Court: U.S. Bankruptcy Court
Southern District of Texas (Houston)
Judge: Karen K. Brown
Debtor's Counsel: Peter Johnson, Esq.
LAW OFFICES OF PETER JOHNSON
Eleven Greenway Plaza, Suite 2820
Houston, TX 77046
Tel: (713) 961-1200
Fax: (713) 961-0941
E-mail: pjlawecf@pjlaw.com
Scheduled Assets: $6,302,533
Scheduled Liabilities: $4,123,938
The Company did not file a list of creditors together with its
petition.
The petition was signed by William M. Friedrichs, Jr., president
of WMF Development, Inc., general partner.
Affiliate that filed separate Chapter 11 petition:
Entity Case No. Petition Date
------ -------- -------------
WMF Airport Hotel, Ltd 11-34676 6/30/11
INFOGROUP INC: S&P Lowers Corp. Credit Rating to 'B'; Outlook Neg
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
Papillion, Neb.-based infoGROUP Inc., including the corporate
credit rating to 'B' from 'B+'. The rating outlook is negative.
"The rating action reflects weaker-than-expected performance,
rising debt leverage, and our expectation that profitability may
remain under pressure," said Standard & Poor's credit analyst Hal
Diamond, "which would result in a thin margin of compliance with
the net debt leverage covenant level given the stepdown schedule."
"The corporate credit rating on infoGROUP reflects Standard &
Poor's expectation that leverage will remain high over the
intermediate term and the risk that the margin of compliance with
financial covenants will narrow. We consider the company's
business risk profile 'weak' under our criteria because of its
narrow product line, competitive conditions in the markets in
which it operates, and exposure to highly cyclical direct
marketing spending. Relatively high leverage resulting from the
2010 leveraged buyout, the May 2011 special dividend, and likely
tightening covenants, underpin our view that infoGROUP's financial
risk profile is 'highly leveraged.' We expect infoGROUP to
continue to underperform some of its larger U.S. peers. InfoGROUP
operates in the direct marketing industry, which we consider
mature, cyclical, and highly competitive," S&P said.
"InfoGROUP provides business and consumer information, database
marketing services, data processing services, and sales and
marketing solutions to a diverse customer base of business
subscribers. Although nearly 60% of the company's business comes
from clients in growing digital direct marketing channels, the
traditional direct-mail business faces long-term gradual secular
decline, in our opinion. Many of its competitors have longer
operating histories, better name recognition, and greater
financial resources, which may put the company at a competitive
disadvantage. Also, infoGROUP may face increased competition from
new entrants, especially online start-ups with low initial capital
requirements. The company has increased product development and
marketing efforts and in December 2011, hired a new CEO with
significant industry experience in an effort to restore growth.
However, we are uncertain as to how soon the company will realize
meaningful benefits from these measures," S&P said.
"The negative outlook reflects our expectation that operating
performance could continue to deteriorate in 2012, resulting in a
further rise in debt leverage and a narrowing margin of compliance
with covenant levels. We could lower the rating if we become
convinced that the company's margin of compliance with financial
covenants could drop below 10% and discretionary cash flow could
decline to a level where increased fees associated with an
amendment to its credit agreement would meaningfully reduce its
liquidity. This could occur because of increased customer
attrition and reduced demand from remaining customers," S&P said.
"We regard a revision of the outlook to stable as a less likely
scenario, involving consistent improvement in overall
profitability, positive discretionary cash flow, and financial
policies that support progress in reducing leverage and restoring
a healthy margin of compliance with financial covenants," S&P
said.
INNER CITY MEDIA: Entercom Okayed to Buy KBLX-FM in Berkeley
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that secured lenders for Inner City Media Corp., the
largest closely owned African-American radio broadcaster in the
U.S., secured formal approval last week to sell KBLX-FM in
Berkeley, California, for $25 million to Entercom Communications
Corp. The lenders decided to sell the station rather than take
title themselves.
According to the report, there being no other bids for Inner
City's stations, the bankruptcy judge in February authorized
selling them all to secured lenders Yucaipa Cos. and Fortress
Investment Group LLC in exchange for debt. The sale to the
lenders hadn't been completed, permitting the lenders in effect to
sell individual stations when a buyer appears with an acceptable
offer. The sale called for the lenders to pay an additional
$2.75 million for trademarks and other intellectual property.
Inner City filed papers last week seeking to sell station WZMJ-FM
in Batesburg, South Carolina, to Lake Murray Broadcasting Inc. for
$450,000.
About Inner City Media
On Aug. 23, 2011, affiliates of Yucaipa and CF ICBC LLC, Fortress
Credit Funding I L.P., and Drawbridge Special Opportunities Fund
Ltd., signed involuntary Chapter 11 petitions for Inner City Media
Corp. and its affiliates (Bankr. S.D.N.Y. Case Nos. 11-13967 to
11-13979) to collect on a $254 million debt.
The Petitioning Creditors are party to the senior secured credit
Facility pursuant to which they (or their predecessors in
interest) extended $197 million in loans to the Alleged Debtors to
be used for general corporate purposes. More than two years ago,
the Alleged Debtors defaulted under the Senior Secured Credit
Facility, and in any event the entire amount of principal and
accrued and unpaid interest and fees became immediately due and
payable on Feb. 13, 2010.
Inner City Media's affiliates subject to the involuntary Chapter
11 are ICBC Broadcast Holdings, Inc., Inner-City Broadcasting
Corporation of Berkeley, ICBC Broadcast Holdings-CA, Inc., ICBC-
NY, L.L.C., ICBC Broadcast Holdings-NY, Inc., Urban Radio, L.L.C.,
Urban Radio I, L.L.C., Urban Radio II, L.L.C., Urban Radio III,
L.L.C., Urban Radio IV, L.L.C., Urban Radio of Mississippi,
L.L.C., and Urban Radio of South Carolina, L.L.C.
Judge Shelley C. Chapman granted each of Inner City and its debtor
affiliates relief under Chapter 11 of the United States Code. The
decision came after considering the involuntary petitions, and the
Debtors' answer to involuntary petitions and consent to entry of
order for relief and reservation of rights.
Attorneys for Yucaipa Corporate Initiatives Fund II, L.P. and
Yucaipa Corporate Initiatives (Parallel) Fund II, L.P. are John J.
Rapisardi, Esq., and Scott J. Greenberg, Esq., at Cadwalader,
Wickersham & Taft LLP. Attorneys for CF ICBC LLC, Fortress Credit
Funding I L.P., and Drawbridge Special Opportunities Fund Ltd. are
Adam C. Harris, Esq., and Meghan Breen, Esq., at Schulte Roth &
Zabel LLP.
Akin Gump Strauss Hauer & Feld LLP serves as the Debtors' counsel.
Rothschild Inc. serves as the Debtors' financial advisors and
investment bankers. GCG Inc. serves as the Debtors' claims agent.
The United States Trustee said that an official committee under
11 U.S.C. Sec. 1102 has not been appointed in the bankruptcy case
of Inner City Media because an insufficient number of persons
holding unsecured claims against the Debtor has expressed interest
in serving on a committee.
INTERSTATE AUTO: A.M. Best Lowers Issuer Credit Rating to 'b-'
--------------------------------------------------------------
A.M. Best Co. has downgraded the financial strength rating to C+
(Marginal) from C++ (Marginal) and issuer credit rating to "b-"
from "b" of Interstate Auto Insurance Company, Inc. (Baltimore,
MD). The outlook for both ratings is negative.
The rating actions reflect Interstate Auto's continued negative
underwriting performance, which could not be offset by its
generally declining investment income. This has led to pre-tax
operating losses in each of the past five years, and consequently,
has hindered the company's surplus base. As of year end 2011,
Interstate Auto's surplus base was only slightly above Maryland's
minimum surplus requirements for companies writing private
passenger non-standard auto business.
Weak economic conditions, including high unemployment, also have
led to cancellations of coverage, and therefore, a declining trend
in Interstate Auto's premium writings since 2009, resulting in
high expense ratios and weakening underwriting results. Despite
the declining premium trend, the company's premium and
underwriting leverage ratios, while decreasing over the past three
years, still remain relatively high compared to its peers. While
Interstate Auto is taking steps such as exploring additional
sources of capital and instituting rate increases to improve
profitability in order to restore its surplus base, the current
soft underwriting cycle in its line of business represents a
challenging operating environment for the insurer.
Further downward movement in the ratings as indicated by the
negative outlook could occur should there be continued
deterioration in Interstate Auto's risk-adjusted capitalization
and/or a continuation of the negative operating performance trend.
While upward movement in the ratings is unlikely in the near term,
any eventual improvement in the ratings and/or outlook will
require significant improvement in the company's capitalization
along with a turnaround in its underwriting performance and
operating results.
J. TEIG PORT: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: J. Teig Port, M.D., P.A.
dba Orthopaedic Center of Mesquite
1106 N. Galloway Avenue
Mesquite, TX 75149
Bankruptcy Case No.: 12-32650
Chapter 11 Petition Date: April 27, 2012
Court: U.S. Bankruptcy Court
Northern District of Texas (Dallas)
Judge: Barbara J. Houser
Debtor's Counsel: Howard Marc Spector, Esq.
SPECTOR & JOHNSON, PLLC
12770 Coit Road
Banner Place, Suite 1100
Dallas, TX 75251
Tel: (214) 365-5377
Fax: (214) 237-3380
E-mail: hspector@spectorjohnson.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by J. Teig Port, M.D., P.A., president.
Affiliates that filed separate Chapter 11 petitions:
Entity Case No. Petition Date
------ -------- -------------
Galaxy MRI and Diagnostic Center, Ltd. 12-32648 4/27/12
Galloway Medical Center, Ltd. 12-32646 4/27/12
JCK HOTELS: May 10 Hearing on Amended Plan Outline
---------------------------------------------------
Bankruptcy Judge Louise D. Adler will convene a hearing on May 10,
2012, at 10:30 a.m. to consider approval of the disclosure
statement explaining the proposed Chapter 11 plan of JCK Hotels,
LLC, formerly known as Mira Mesa Hotels, LLC.
According to the Amended Disclosure Statement filed on April 16,
2012, the Plan contemplates an infusion of cash from JCK Holdings
of $400,000 and $2,200,000 from investors.
The cash infusion will be used by the Debtor to make distributions
to allowed claims as provided in the Plan, reinstate unpaid
interest and allowable costs of approximately $1.2 million of the
first trust deed holder on the Debtor's properties. Approximately
$950,000 of the cash infusion will be used to complete the
renovations remaining on one of Debtor's two hotels Choice Hotel
Suites, and another $150,000 will be reserved for fees and costs
incurred by professionals in pursuit of confirming the Plan. The
balance of approximately $450,000 will be used to pay 25% of the
claims of Pacific Western Bank and 25% of the unsecured creditors.
The Plan proposes this treatment of claims:
* Reinstatement of First Lien Lender's Claim. The Debtor's
note with its first priority secured creditor, LBUBS 2005-C2 Mira
Mesa Limited Partnership ("LBUBS") will be reinstated. On the
Effective Date, the Debtor will transfer approximately $1.2
million of the cash infusion to LBUBS. The Debtor believes the
payment will fully cure and reinstate the LBUBS Loan. In
contrast, LBUBS, which filed a $15.97 million claim, contends that
Debtor owes more in default-interest and possibly other charges.
JCK Holdings will contribute additional cash in the even that it
is determined that the amount necessary to reinstate the Loan
exceeds $1.2 million.
* 25% Recovery for Second Lien Lender. On the Effective Date,
Debtor will transfer from the remaining Cash Infusion to
Debtor's second priority secured creditor, Pacific Western Bank
("PWB") an amount equal to 25% of its claim. Based on the
liquidation value of the Debtor's assets, which are less than
LBUBS' first priority interest, the Debtor contends that PWB is
unsecured. The Plan proposes to pay PWB 25% of the value the PWB
Loan in full satisfaction of its Unsecured Claim.
* 25% Recovery for Unsecured Creditors. All holders of
unsecured claims estimated to total $694,000 will be paid 25% of
their Allowed Claim amounts on the Effective Date. The Debtor
claims that unsecured creditors would receive a return of 0% if
the case was converted to Chapter 7.
* Investors to Obtain Control. The Plan contemplates an
infusion of cash from JCK Holdings of $400,000 and $2,200,000 from
investors LLJ Ventures, LLC and Chhatrala Group, LLC; in exchange
for retention by JCK Holdings of a 25% membership interest in the
Debtor and a purchase of a 75% membership interest in Reorganized
Debtor by the investors, respectively. JCK Holdings has, as
members Charles and Sarah Jung, who will contribute $400,000 to
JCK Holdings, who will in turn contribute $400,000 to the Debtor
and Dochun and Nam Kim, and disputed members Richard and Grace
Choe who will contribute nothing to JCK Holdings.
A copy of the First Amended Disclosure Statement dated April 16,
2012, is available for free at:
http://bankrupt.com/misc/JCK_HOTELS_ds_amended.pdf
About JCK Hotels, LLC
JCK Hotels, LLC, fka Mira Mesa Hotels, LLC, operates the Holiday
Inn Express Mira Mesa Hotel and the Comfort Suites Mira Mesa Hotel
in San Diego, California. The Hotels are operated under licensing
and franchise agreements with Holiday Inn Express and Comfort
Suites.
JCK Hotels filed for Chapter 11 bankruptcy (Bankr. S.D. Calif.
Case No. 11-09428) on June 3, 2011. Judge Louise DeCarl Adler
presides over the case. William M. Rathbone, Esq., and Daniel C.
Silva, Esq., at Gordon & Rees LLP, in San Diego, Calif., serve as
bankruptcy counsel. The Debtor tapped Dae Hyun Kim, CPA &
Associates as financial advisor. While no formal appraisal has
been done recently, the Debtor believes the fair market value of
both Hotels exceeds $18 million. The Debtor disclosed
$19,611,552 in assets and $14,974,079 in liabilities as of the
Chapter 11 filing. The petition was signed by Charles Jung,
managing member.
Tiffany L. Carroll, Acting United States Trustee for Region 16,
under 11 U.S.C. Sec. 1102(a) and (b), appointed three unsecured
creditors to serve on the Official Committee of Unsecured
Creditors of JCK Hotels, LLC.
KAD INCORPORATED: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: KAD, Incorporated
1025 Ridge Drive
Clayton, NC 27520
Bankruptcy Case No.: 12-03196
Chapter 11 Petition Date: April 27, 2012
Court: United States Bankruptcy Court
Eastern District of North Carolina (Wilson)
Judge: Randy D. Doub
Debtor's Counsel: Danny Bradford, Esq.
PAUL D. BRADFORD, PLLC
dba Bradford Law Offices
455 Swiftside Drive, Suite 106
Cary, NC 27518-7198
Tel: (919) 758-8879
Fax: (919) 803-0683
E-mail: dbradford@bradford-law.com
Scheduled Assets: $645,237
Scheduled Liabilities: $1,981,254
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/nceb12-03196.pdf
The petition was signed by Kevin L. Bunn, president.
KINGSTONE COMPANIES: A.M. Best Affirms 'bb-' Issuer Credit Rating
----------------------------------------------------------------
A.M. Best Co. has affirmed the financial strength rating of B+
(Good) and issuer credit rating (ICR) of "bbb-" of Kingstone
Insurance Company (Kingston, NY). Concurrently, A.M. Best has
affirmed the ICR of "bb-" of Kingstone Companies, Inc. [NASDAQ:
KINS], the publicly traded holding company for Kingstone. The
outlook for all ratings is stable.
The ratings and outlook reflect Kingstone's adequate
capitalization, favorable operating performance, moderate
investment leverage ratios and local market knowledge in New York.
The company's favorable operating performance is reflected in its
five-year average double-digit pre-tax returns on revenue and
surplus, generated by positive net underwriting income
supplemented by net investment and other income. Surplus growth
has been consistently solid over the last five years, increasing
at a double-digit average annual rate.
The ICR for Kingstone Companies, Inc. reflects standard notching
off the ICR of Kingstone, which reduced its debt leverage ratios
in 2010 and 2011.
Partially offsetting Kingstone's positive rating factors are its
elevated net underwriting and ceded leverage ratios and its
single-state concentration of risk, which exposes it to weather-
related events as well as to market, regulatory and judicial
issues. Although Kingstone's ceded leverage ratio exceeds the
ratio of the commercial automobile composite, it has been reduced
in each of the last five years.
While Kingstone's single-state concentration exposes it to
weather-related events, catastrophe exposure is partially
mitigated through catastrophe reinsurance, for which the company
has purchased increased limits in recent years, the use of
hurricane deductibles, visual risk inspections, distance-from-
shore restrictions and surcharges. In addition, to address its
geographic concentration of risk the company now includes upstate
and western New York as well as Pennsylvania in its operating
territory.
There could be pressure on Kingstone's ratings going forward if
its favorable operating performance were to deteriorate or if
risk-adjusted capital weakens. The potential for an upgrade
exists if the company maintains the favorable operating
performance that it has demonstrated in recent years while
reducing its underwriting leverage ratios.
LANGUAGE LINE: S&P Cuts Corp. Credit Rating to 'B' on Finc'l. Risk
------------------------------------------------------------------
Standard & Poor's Rating Services lowered its corporate credit
rating on Language Line Holdings LLC to 'B' from 'B+.'
"We also lowered our ratings on Language Line's first-lien credit
facilities to 'B' from 'B+.' The recovery rating remains at '3',
indicating our expectation of meaningful (50% to 70%) recovery for
lenders in the event of a payment default," S&P said.
"In addition, we lowered our ratings on the company's second-lien
credit facilities to 'CCC+' from 'B-'. The recovery rating remains
at '6', indicating our expectation of negligible (0% to 10%)
recovery for lenders in the event of a payment default," S&P said.
"We lowered Language Line's corporate credit rating because of the
company's underperformance and very aggressive financial policy,
which we believe increases financial risk in light of covenant
step-downs later this year," explained Standard & Poor's credit
analyst Tulip Lim. "We believe that the company's headroom against
financial covenants could narrow this year below 15%," S&P said.
"The corporate credit rating reflects Standard & Poor's
expectation that Language Line's financial policy will remain very
aggressive and leverage will remain high, which underpins our
assessment of the financial risk profile as 'highly leveraged.'
The rating also reflects the company's vulnerability to clients
moving their translation services in-house, and continued pricing
pressure in the over-the-phone interpretation (OPI) market. The
company is also vulnerable to economic cyclicality. We believe the
company's revenue will continue to decline at a low-single-digit
percent rate over the near term. These factors contribute to our
view of Language Line's business profile as 'weak,'" S&P said.
"The rating outlook is stable. Although we expect Language Line's
operating performance to remain weak and its financial policy to
remain aggressive, we believe the company will maintain adequate
liquidity over the near term," S&P said.
"We could review the rating for a downgrade if we become convinced
that the company's margin of compliance with financial covenants
could drop below 10%, with the potential for further narrowing.
Such a scenario would also include declines in discretionary cash
flow to a level where increased fees associated with a potential
amendment to its credit agreement could meaningfully reduce
liquidity. In addition to dividend payments, factors that could
contribute to such a scenario include declines or slower growth in
OPI minutes and/or faster-than-expected deterioration of ARPM.
Other such factors include client negotiating pressure, customers
moving translation services in-house or to competitors, and
customer consolidation," S&P said.
"Although less likely, we could raise the rating if the company
resumes revenue and EBITDA growth (without any benefit from equity
compensation credits), reduces leverage, maintains an adequate
cushion of compliances with covenants, and convincingly
establishes a less aggressive financial policy," S&P said.
LEHMAN BROTHERS: SunCal Units Bankruptcy Plans Declared Effective
-----------------------------------------------------------------
Lehman Brothers Holdings Inc. disclosed that its bankruptcy plans
in the SunCal bankruptcy cases have gone effective and as a result
Lehman has taken title to a portfolio of California properties
formerly owned by affiliates of the SunCal Companies. The plans
were confirmed by the SunCal bankruptcy court in California in
October 2011 and approved by the Lehman bankruptcy court in New
York in July 2011.
The effectiveness of the plans will result in Lehman, which had
provided financing for these development sites, obtaining
ownership of 14 different projects throughout the State of
California.
Jeff Fitts, Lehman's head of real estate, said, "Our strategy for
the SunCal portfolio has been to gain control over the assets so
that we could position them in a way that would provide the best
result possible for Lehman creditors. It has been a long and
complex process, and this is a major milestone."
About SunCal Companies
SunCal Companies -- http://www.suncal.com/-- had more than
250,000 residential lots and 10 million square feet of commercial
space in various stages of development throughout California,
Arizona, Nevada and New Mexico.
Gramercy Warehouse Funding LLC and several creditors filed
involuntary petitions each against LBREP/L-SunCal Master I
LLC, LBREP/L-SunCal McAllister Ranch LLC, LBREP/L-SunCal McSweeny
Farms LLC, and LBREP/L-SunCal Summerwind Ranch LLC on Sept. 11,
2008 (Bankr. C.D. Calif Case No. 08-15588, 08-15637, 08-15639, and
08-15640). Daniel H. Reiss, Esq., at Levene, Neale, Bender,
Rankin & Brill represents the petitioners.
SunCal affiliates led by Palmdale Hills Property, LLC, filed
voluntary Chapter 11 petitions (Bankr. C. D. Calif. Case No.
08-17206) on Nov. 6, 2008. Affiliates that also filed separate
Chapter 11 petitions include: SunCal Beaumont Heights, LLC; SunCal
Johannson Ranch, LLC; SunCal Summit Valley, LLC; SunCal Emerald
Meadows LLC; SunCal Bickford Ranch, LLC; SunCal Communities I,
LLC; SunCal Communities III, LLC; and SJD Development Corp.
SunCal Companies is not in bankruptcy.
Paul J. Couchot, Esq., at Winthrop Couchot P.C., represents
Palmdale Hills in its restructuring effort. The Company estimated
assets and debts of $100 million to $500 million in its Chapter 11
petition.
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)
LEUCADIA NATIONAL: Moody's Confirms 'Ba3' CFR; Outlook Negative
---------------------------------------------------------------
Moody's Investors Service has confirmed the ratings of Leucadia
National Corporation, including its CFR and PDR at Ba3 and has
changed the rating outlook to negative. This concludes the review
initiated December 6, 2011 when the ratings were put on review for
possible downgrade. Concurrently, a speculative grade liquidity
rating of SGL-3 was assigned to the issuer.
Moody's has taken the following ratings actions:
Issuer: Leucadia National Corporation
Probability of Default Rating, confirmed at Ba3
Corporate Family Rating, confirmed at Ba3
Senior Unsecured Regular Bond/Debenture, confirmed at B1; LGD
changed to LGD5-73% from LGD4-63%.
Convertible Senior Subordinated Notes, confirmed at B2; LGD
changed to LGD6-95% from LGD6-94%
A Speculative Grade Liquidity Rating of SGL-3 has been
assigned.
Withdrawals:
Senior Global Notes due 2017 withdrawn; previously B1, LGD4-63%.
Junior Subordinated Deferrable Interest Debentures due 2027
withdrawn; previously B2, LGD6-96%.
Outlook Actions:
Issuer: Leucadia National Corporation
Outlook, Changed to negative.
Ratings Rationale
The ratings confirmations reflect Leucadia's adequate liquidity
profile and its low debt to capitalization which helps balance the
business risk of a portfolio largely influenced by the company's
opportunistic acquisition-based strategy and its current portfolio
composition. Historically, Leucadia has tended to seek assets and
companies that are out of favor or troubled and, as a result,
selling below the values Leucadia believes can be achieved.
Leucadia then strives to uncover and maximize long-term
shareholder value. Notwithstanding the risks to creditors related
to such a strategy, Leucadia has over time been largely successful
in its acquisition/divestiture-based strategy, as reflected in its
substantial book value and its ability to grow without
dramatically leveraging the operations.
The company's acquisition of 78.95% of National Beef Packing
Company, LLC ("National Beef") for $868 million is an outlier from
its traditional strategy of buying deemed undervalued assets and
may become the norm in its ongoing acquisition program. The
acquisition reduced Leucadia's liquidity by almost $900 million
but resulted in an asset that is a more mature business than most
in its portfolio. Moody's believes that a strategy that acquires
established companies, as opposed to turnarounds, should result in
a lower portfolio credit risk profile and thus require less
liquidity as a backstop.
Commenting on its decision to revise the outlook on Leucadia's
ratings to negative, Moody's noted that the company's ongoing
portfolio rebalancing creates uncertainty as to the company's long
term portfolio and its balance sheet composition. Moreover, just
as the acquisition of National Beef weakens the company's near-
term liquidity to levels below that previously considered in the
company's credit rating, future acquisitions may result in a
downgrade if they further reduce the company's liquidity without a
significant improvement in cash flow or portfolio stability.
The ratings may be downgraded if Leucadia's liquidity was to
decline meaningfully or if it was to experience sufficient
weakness in its operations reducing its ability to meet financial
commitments. Additionally, a material weakening of the underlying
earnings or cash flow strength at the subsidiary level and/or
further acquisitions or dividends to shareholders that
significantly reduce the holding company's liquidity position
could lead to a rating downgrade. The outlook may revert to stable
if the company's liquidity was to improve meaningfully from
current levels or if the composition of its portfolio companies
was of sufficient quality and generated sufficient free cash flow
so as to reduce the need for a large liquidity position.
The assignment of an SGL-3 speculative grade liquidity rating
reflects the company's adequate current liquidity with low
internal cash flow from operations and the lack of a revolving
credit facility weighed against approximately $1.8 billion in cash
and investments that could typically be monetized within 30 days.
The SGL rating also considers the company's ability to sell from
its investment portfolio.
The principal methodology used in rating Leucadia was the Global
Investment Holding Companies Methodology published in October
2007. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the US, Canada, and
EMEA, published in June 2009.
Leucadia, headquartered in New York, New York, is a diversified
holding company engaged in a variety of businesses, including
manufacturing, beef processing, land-based contract oil and gas
drilling, gaming entertainment, real estate activities, medical
product development and winery operations. The company also has
significant investments in public companies and owns equity
interests in operating businesses and investment partnerships
which are not publicly traded. At the end of 2011, total revenues
were over $1.5 billion, total assets were over $9 billion, and
book equity was approximately $6.2 billion.
MID AMERICA: Case Summary & 6 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Mid America Petroleum Equipment Inc.
fdba Mid America Energy Solutions, Inc.
dba Stoddard Equipment Company
1441 W. Lloyd
Ozark, MO 65721
Bankruptcy Case No.: 12-60777
Chapter 11 Petition Date: April 27, 2012
Court: United States Bankruptcy Court
Western District of Missouri (Springfield)
Judge: Arthur B. Federman
Debtor's Counsel: Angela D. Acree, Esq.
BANKRUPTCY CLINIC
1736 E. Sunshine St., Suite 401
Springfield, MO 65804
Tel: (417) 886-5940
Fax: (417) 886-4281
E-mail: adacree@8nodebt.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 six largest unsecured
creditors filed together with the petition is available for free
at http://bankrupt.com/misc/mowb12-60777.pdf
The petition was signed by Glenn A. Conner, president.
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 case of Liberty
Harbor Holding, LLC, on May 16, 2012, at 10:00 a.m. at Suite 1401,
One Newark Center.
Proofs of claim are due 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. The petition
was signed by Peter Mocco, managing member.
MD PIZZERIA: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: MD Pizzeria, LLC
dba Fratelli Trattoria
The Arches Circle, Suite 996
Deer Park, NY 11729
Bankruptcy Case No.: 12-72666
Chapter 11 Petition Date: April 27, 2012
Court: U.S. Bankruptcy Court
Eastern District of New York (Central Islip)
Judge: Alan S. Trust
Debtor's Counsel: Joseph S. Maniscalco, Esq.
LAMONICA HERBST MANISCALCO, LLP
3305 Jerusalem Avenue
Wantagh, NY 11793
Tel: (516) 826-6500
Fax: (516) 826-0222
E-mail: jsm@lhmlawfirm.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 20 largest unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/nyeb12-72666.pdf
The petition was signed by Vito DeFeo, member.
MIDWEST FAMILY: Moody's Reviews Low-B Note Ratings for Downgrade
----------------------------------------------------------------
Moody's Investors Service has placed the Baa3 Class I; Ba3 Class
II; B3 Class III; & B3 Class IV ratings on Midwest Family Housing
LLC Military Housing Taxable Revenue Bonds (Navy Midwest Housing
Privatization Project) 2006 Series A on watch under review for
possible upgrade based on the 2011 audited financial information
for the project which shows improving financial position for the
project.
Ratings Rationale
The rating action is warranted based on the 2011 financial audited
financial information for the project which shows an increased
asset to debt ratio for all classes of debt as well good occupancy
rates for the project.
STRENGTHS:
- Strong financial performance, demonstrated by audited financial
for fiscal year 2011, provides sufficient margins of protection
against adverse economic conditions.
- Funds in the Construction Fund are available to pay debt
service through the end of IDP.
- Experienced ownership and management team.
CHALLENGES:
- The deterioration of the credit quality of the debt service
reserve fund.
- Construction completion is highly dependent on the sale of
several parcels of land.
WHAT COULD CHANGE THE RATING UP
- Continued improvement of the debt service coverage ratio
WHAT COULD CHANGE THE RATING DOWN
- Significant decline in BAH or occupancy levels that results in
a decline in debt service coverage
Principal Methodology Used
The principal methodology used in this rating was Global Housing
Projects published in July 2010.
MILBANK 521: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Milbank 521 Sam Houston I, LLC
660 South Figueroa Street, Suite 1750
Los Angeles, CA 90017
Bankruptcy Case No.: 12-25297
Chapter 11 Petition Date: April 30, 2012
Court: U.S. Bankruptcy Court
Central District of California (Los Angeles)
Judge: Sheri Bluebond
Debtor's Counsel: David L. Neale, Esq.
LEVENE, NEALE, BENDER, YOO & BRILL LLP
10250 Constellation Boulevard, Suite 1700
Los Angeles, CA 90067
Tel: (310) 229-1234
Fax: (310) 229-1244
E-mail: dln@lnbrb.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 20 largest unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/cacb12-25297.pdf
The petition was signed by M. Aaron Yashouafar, president.
Affiliates that simultaneously filed Chapter 11 petitions:
Debtor Case No.
------ --------
521 Sam Houston II, LLC 12-25299
Milbank 521 Sam Houston III, LLC 12-25301
Milbank 521 Sam Houston IV, LLC 12-25302
Milbank 521 Sam Houston V, LLC 12-25304
Affiliates that previously filed separate Chapter 11 petitions:
Entity Case No. Petition Date
------ -------- -------------
505 Sam Houston II, LLC 11-47742 09/05/11
525 Sam Houston II, LLC 11-47748 09/05/11
Milbank 505 Sam Houston I, LLC 11-47740 09/05/11
Milbank 505 Sam Houston III, LLC 11-47743 09/05/11
Milbank 505 Sam Houston IV, LLC 11-47745 09/05/11
Milbank 505 Sam Houston V, LLC 11-47746 09/05/11
Milbank 525 Sam Houston I, LLC 11-47747 09/05/11
Milbank 525 Sam Houston III, LLC 11-47749 09/05/11
Milbank 525 Sam Houston IV, LLC 11-47750 09/05/11
Milbank 525 Sam Houston V, LLC 11-47751 09/05/11
MORGAN INDUSTRIES: Luhrs Marine Enters Chapter 11
-------------------------------------------------
Morgan Industries Corporation, along with affiliates, sought
Chapter 11 protection (Bankr. D. N.J. Lead Case No. 12-21156) in
Trenton, New Jersey, on April 30, 2012.
During the initial stages of the chapter 11 proceedings, and as
the recreational boat market and business segment continues to
improve, the Company will consider its strategic and transactional
alternatives. The Company will evaluate options ranging from a
standalone plan of reorganization, or a capital infusion through a
plan of reorganization or funding sponsor or acquirer.
The Debtors, through their trade name the Luhrs Marine Group,
produce and sell recreational powerboats and sailboats under the
iconic brand names of Silverton, Ovation, Luhrs, Mainship, and
Hunter Marine. In 2010, Silverton, Mainship and Luhrs,
collectively, held approximately 5.3% of the United States market
for fiberglass, in-board engine powerboats greater than 27 feet in
length. Additionally, Hunter Marine was the largest manufacturer
of sailboats in the United States, accounting for an estimated 32%
of new sailboat registrations in 2010, making it the sixth
consecutive year Hunter Marine represented approximately 30% of
all new sailboat registrations in the United States. The Debtors
have a network of 90 dealers in the U.S. and 80 dealers in 40
other countries.
The Debtors have filed with the Bankruptcy Court motions to, among
other things, extend to the deadline to file the schedules,
maintain their existing bank accounts, pay prepetition wages, and
maintain postpetition financing of insurance premiums, and bar
utilities from discontinuing service. The Debtors have also filed
a motion to use cash collateral and access DIP financing. The
Debtors have requested expedited consideration of first day
matters.
The Debtors say that the first day motions will allow them to
continue to manage operations in the ordinary course.
The Company has obtained a fully-committed, post-petition debtor-
in-possession credit facility from Bank of America to enhance
liquidity and working capital.
BofA is providing DIP financing in the form a senior a senior
secured priming and superpriority debtor-in-possession revolving
credit facility with a commitment amount equal to $1.4 million,
with an interim facility of $750,000. The DIP facility contains a
carve-out for the payment of professional fees with the Debtors'
professional fees capped at $575,000 and the statutory committee
of unsecured creditors' professional fees capped at $50,000.
According to the case docket, the schedules of assets and
liabilities, the statement of financial affairs, and the list of
all creditors are currently due May 14, 2012. The Debtor's
exclusive period to file a plan expires on Aug. 28, 2012.
The Company is being advised by Robert Hirsh and George Angelich
of Arent Fox LLP as bankruptcy general counsel; Capstone Advisory
Group, LLC as financial advisors; Katz, Kane & Co. as investment
bankers; and Donlin Recano & Company, Inc. as claims agent.
Over $80 million in Debt
As of the Petition Date, the Debtors have total assets of at least
$53 million and total liabilities of at least $80 million, and
more than 800 creditors.
The Debtors' businesses possess significant and valuable tangible
and intangible assets, dealer relationships and proprietary
manufacturing processes. In addition to raw materials, work in
progress and inventory, the Debtors have invested approximately
$14.8 million in fixtures and other equipment related to the
products they manufacture.
The Debtors also own three manufacturing facilities located in
Millville, New Jersey; Alachua, Florida; and St. Augustine,
Florida, as well as properties in Salisbury, Maryland and Palatka,
Florida. The real estate has been valued at $19.09 million.
As of the Petition Date, the Debtors' operations are conducted out
of their facility in Alachua, Florida where they manufacture
Hunter Marine sailboats. Due to liquidity constraints, the Debtors
were forced to suspend production of their powerboat brands --
Silverton, Luhrs, Mainship and Ovation in February 2012
As of the Petition Date, the Debtors have 34 employees, of whom 18
are salaried.
BofA is owed $6.33 million on a prepetiton Loan A term facility,
$6.43 million on a Loan B term facility, $830,000 on funded
letters of credit, and about $2 million on unfunded letters of
credit. The amounts outstanding are secured by a first priority
security interest in substantially all of Morgan's receivables and
tangible and intangible personal property and fixtures. The value
of the collateral is believed to be greater than the amount
outstanding under the loans.
Luhrs Brothers and related entities over the course of the last 11
years made numerous secured loans to the Debtors and are currently
owed $24.7 million. The loans are secured by a mortgage on the
Milville Facility and second priority security interests in the
debtors' personal property.
The Debtors also have a floor plan financing arrangements with
Textron Financial Corporation. TFC is owed $1.02 million pursuant
to a settlement.
Road to Bankruptcy
For the fiscal year ending July 31, 2011, the Debtors recorded net
sales of $32.08 million and incurred net losses of $11.7 million.
John T. Peterson, president of Hunter Marine Corporation, explains
in a court filing, "The Luhrs Marine Group experienced declining
sales and profitability over the last several years as the marine
industry began to be negatively impacted by a number of
macro-economic factors and other factors unique to the industry in
the Fall of 2008. Among those external factors were declines in
the housing market and the tightening of the credit markets, which
led to a decline in consumer discretionary spending and the
tightening of credit terms by the Debtors' "floor plan financing
companies", such as General Electric Credit Corporation and TFC.
As a result, financing sources previously available to the Debtors
and their dealers became more restrictive and, in some cases,
unavailable. Where credit was still available, the terms became
more restrictive requiring repurchase obligations of the Debtors
that put significant pressure on liquidity and profitability.
Moreover, the decline in consumer discretionary spending, coupled
with increasing gasoline prices and increasing unemployment rates,
has negatively impacted the Debtors' core market. Excess aged
inventories at existing dealerships, and dealership failures have
led to the liquidation of new and used boat inventories and the
shifting of consumer purchasing trends."
Mr. Peterson explains that the Debtors elected to pursue various
strategic alternatives, including the sale of one or both of its
business lines.
The Debtors reviewed available options relative to the timing of
any potential asset sale, their liquidity situation, and inability
to obtain further relief from BofA. The Debtors concluded it was
in the best interests of their shareholders, creditors and other
parties in interest to seek relief under chapter 11 of the
Bankruptcy Code.
During the initial stages of this proceeding and as the
recreational boating market and business segment continues to
improve, the Debtors will consider strategic and transactional
alternatives, including a standalone plan of reorganization, or
attempt to obtain a firm commitment from a plan or funding sponsor
or acquirer.
DIP Term Sheet
The DIP Term sheet signed by the Debtors and BofA, as DIP Lender,
provides that the DIP loan will terminate Aug. 30, 2012, or
earlier if certain covenants are not achieved.
The parties agree that the Debtors will market their assets and
property while in Chapter 11 to the same extent as they have been
prepetition. But the Debtors will not enter into a sale agreement
without the consent of the DIP Lender.
The Debtors have agreed to these terms:
* The Debtors on or before May 21, 2012, will file a motion
seeking approval of a sale of substantially all of the
assets and seeking approval of related bidding procedures.
* On June 28, 2012, the bankruptcy court will have entered an
order granting the sale motion.
MOUNTAIN CHINA: Has C$6.66-Mil. Net Loss for 2011
-------------------------------------------------
Mountain China Resorts (Holding) Limited reported its financial
results for the fiscal year ended Dec. 31, 2011.
For the year ended Dec. 31, 2011, the Company generated revenues
from resort operations of C$6.66 million and a net loss of C$23.13
million or C$0.11 per share compared to $4.37 million and a net
loss of C$21.30 million or C$0.12 per share. Resort Operations
EBITDA from continuing operations for the 2011 year were negative
C$0.79 million compared to negative C$5.69 million in the 2010
year.
As of Dec. 31, 2011, the Debtor had total assets of C$187.7
million and total debt of C$118.2 million.
The Company has an accumulated deficit, a working capital
deficiency and has defaulted on a bank loan, which casts
substantial doubt on the Company's ability to continue as a going
concern. The Company's ability to meet its obligations as they
fall due and to continue to operate as a going concern is
dependent on further financing and ultimately, the attainment of
profitable operations.
Management of the Company plans to fund its future operation by
obtaining additional financing through loans and private
placements and through the sale of the properties held for sale.
However, there is no assurance that the Company will be able to
obtain additional financing or sell the properties held for sale.
A full text copy of the company's press release is available free
at http://is.gd/exnY1Q
MCR is the premier developer of four season destination ski
resorts in China. MCR is transforming existing China ski
properties into world-class, four seasons luxury mountain resorts
with excellent real estate investment opportunities for discerning
buyers. In February 2009, the Company's Sun Mountain Yabuli
Resort was awarded Best Resort Makeover in Asia by TIME Magazine.
Yabuli is also the permanent home of the China Entrepreneur's
Forum the leading and most influential community of China's most
distinguished and successful entrepreneurs and business leaders
with over 5,000 members from across a variety of key industries.
MOUNTAIN PROPERTY DEVT: Sec. 341 Creditors' Meeting Set for May 30
------------------------------------------------------------------
The U.S. Trustee for the Northern District of California will
convene a First Meeting of Creditors under 11 U.S.C. Sec. 341(a)
in the Chapter 11 case of Mountain Property Development, Inc., on
May 30, 2012, at 10:30 a.m. at San Jose Room 268.
Proofs of claim are due Aug. 28, 2012.
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. The Debtor is represented by Terrell S. Root, Esq., at
the Law Offices of James M. Sullivan, in Los Gatos. Judge Charles
Novack presides over the case.
NAKNEK ELECTRIC: Can Use $300,000 Cash Collateral Until Dec. 31
---------------------------------------------------------------
Judge Donald MacDonald IV of the U.S. Bankruptcy Court for the
District of Alaska approved an amended sixth stipulated order
permitting Naknek Electric Association, Inc.'s interim use of cash
collateral of the United States Department of Agriculture, Rural
Utilities Service and National Rural Utilities Cooperative Finance
Corporation through Dec. 31, 2012. The Court authorized the
Debtor to use up to $300,155 of Cash Collateral and any other cash
in its possession, solely for the purpose of paying Debtor's
Chapter 11 operating expenses.
The aggregate amount of cash in Debtor's possession as of
March 15, 2012, was approximately $25,000. The Debtor told the
Court that without funds, it will not be able to pay its
employees' wages and salaries, related payroll taxes, essential
suppliers, lessors, and other necessary operating expenses.
To afford RUS adequate protection of its interest in the
Collateral, the Debtor will continue to make adequate protection
payments of $18,000 by the last date of each month except
that every third month that payment will be $60,100.
To afford CFC adequate protection of its interest in the
Collateral, the Debtor will continue to make adequate protection
payments under the terms of the DIP loan agreement to CFC.
A copy of the Stipulated Order is available for free at:
http://bankrupt.com/misc/NAKNEKC_6thordcashcoll.pdf
At the Debtor's behest, the Court approved the June 29, 2012,
deadline within which the Debtor may file an amended disclosure
statement and plan. A hearing on approval of the amended
disclosure statement is tentatively set for Aug. 10, 2012.
About Naknek Electric Association
Naknek, Alaska-based Naknek Electric Association, Inc., operates a
diesel power generation plant, storage and distribution system
on approximately 9.34 acres of land it owns in Naknek, Alaska.
It provides electricity to 591 members of the cooperative. It
also is developing a geothermal well.
Naknek Electric filed for Chapter 11 bankruptcy protection (Bankr.
D. Alaska Case No. 10-00824) on Sept. 29, 2010. Erik LeRoy, Esq.,
at Erik Leroy P.C., assists the Debtor in its restructuring
effort. The Debtor estimated its assets and debts at $10 million
to $50 million as of the Petition Date.
The Debtor filed with the Bankruptcy Court a plan of
reorganization and an accompanying disclosure statement on
Sept. 15, 2011.
A committee of unsecured creditors has been appointed by the
United States Trustee.
NAVIOS MARITIME: Moody's Changes Outlook on 'B1' CFR to Negative
----------------------------------------------------------------
Moody's Investors Service has changed to negative from stable the
outlook on the B1 corporate family rating (CFR) and probability-
of-default rating (PDR) of Navios Maritime Holdings (Navios
Holdings). Concurrently, Moody's has also changed to negative from
stable the outlook on the company's B3 (LDG 5/85%) senior
unsecured and Ba3 (LGD3/31%) senior secured ratings. In addition,
Moody's has affirmed the above ratings.
Ratings Rationale
"The change of outlook to negative from stable reflects our
concerns that Navios Holdings' credit profile may be vulnerable to
the current weak conditions in the dry-bulk market," says Marco
Vetulli, a Moody's Vice President -- Senior Credit Officer and
lead analyst for Navios Holdings. "This is principally because
Navios Holdings' exposure to the currently weak market will
increase, as around 40% of its long-term charters contracts, under
which almost all of its core fleet is operated, are due to expire
during the course of this year"
The change of outlook also reflects Moody's expectation that the
dry-bulk market will remain under considerable pressure over the
next 12-15 months, when oversupply is set to peak. Therefore,
Moody's considers it unlikely that Navios Holdings will be able to
charter out its core fleet during 2012 at the previous year's
operating margin. As a result, the rating agency anticipates that
Navios Holdings' credit metrics will deteriorate in the current
year, which could increase the negative pressure on its ratings.
The B1 rating primarily reflects Navios Holdings' relatively weak
credit metrics due to its highly leveraged capital structure, with
debt/EBITDA, on an adjusted basis, of approximately 6.0x at year-
end 2011. Navios Holdings' high level of debt is due to the
intense capital expenditure (capex) programme initiated by the
company in 2009 and completed during 2011. Moody's notes that this
capex programme has constrained Navios Holdings' free cash flow
(FCF) generation, which has been almost permanently negative in
recent years, as reflected by the increase in the company's
leverage.
However, more positively, the rating also takes also into account
(i) the good visibility of Navios Holdings' revenues given the
high level of revenues already contracted out in the next three
years; (ii) the protection afforded to all its long-term revenues
by credit insurance granted by an Aa3-rated insurance company of a
European Union member state; (iii) its low breakeven point as a
result of operating costs that are among the lowest in the
industry; and (iv) its adequate liquidity position.
Nonetheless, Moody's cautions that, if freight rates, which fell
in 2011, were to further decrease in 2012, it would adversely
affect not only Navios Holdings' credit metrics, but also possibly
its liquidity profile. This is because decreasing freight rates
could also exert further negative pressure on the market value of
Navios Holdings' vessels, leading to a reduction in the headroom
under the company's bank covenants.
WHAT COULD CHANGE THE RATING UP/DOWN
The ratings presently incorporate weak credit metrics for the
rating category. Hence, Moody's considers Navios Holdings'
capability not only to improve its credit metrics, but also to
generate material FCF as essential for maintaining the current
rating.
In this context, Moody's could downgrade the CFR if Navios
Holdings were unable to achieve, by the end of 2012, the following
credit metrics: (i) a debt/EBITDA ratio of less than 6.0x; and/or
(ii) EBIT/interest coverage above 1.5x; and/or (iii) FCF
generation that approaches 3% of the company's total debt.
Furthermore, immediate downward pressure on the ratings could
result if Moody's were to have concerns regarding Navios Holdings'
liquidity profile and/or from a deterioration in market conditions
below the levels experienced in the first quarter of 2012.
Given that the outlook on the ratings is negative, there is
limited potential for an upgrade in the short term. However,
Moody's could stabilise the outlook if Navios Holdings' credit
metrics were to improve in the event of a significant market
recovery with a path of improving metrics from the low points of
2011 FYE. Material free cash flow generation would also be
supportive to the rating. Upward pressure could be exerted on the
ratings if the company were to demonstrate that it is capable of
achieving, on a sustainable basis, the following credit metrics:
(i) adjusted EBIT/interest coverage approaching 3.0x; (ii) a
debt/EBITDA ratio falling below 5.0x; and (iii) a retained cash
flow (RCF)/net adjusted debt ratio rising above the mid-teens in
percentage terms.
Principal Methodologies
The principal methodology used in rating Navios Holdings was the
Global Shipping 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.
Navios Maritime Holdings, Inc. is a vertically integrated global
seaborne shipping company, specialising in the worldwide carriage,
trade, storage and other related logistics of international dry-
bulk cargo transportation. As of December 2011, Navios Holdings
controlled a fleet of 57 active vessels (the group's core fleet),
with an aggregate carrying capacity of 5.8 million deadweight
tonnes (dwt) and an average age of 5.4 years. The group's revenues
totalled US$689 million as of the end of December 2011.
NAVISTAR INTERNATIONAL: Moody's Issues Summary Credit Opinion
-------------------------------------------------------------
Moody's Investors Service issued a summary credit opinion on
Navistar International Corp. and includes certain regulatory
disclosures regarding its ratings. The release does not
constitute any change in Moody's ratings or rating rationale for
Navistar International Corp.
Moody's current ratings on Navistar International Corp. are:
Long Term Corporate Family Ratings (domestic currency) ratings of
B1
Probability of Default ratings of B1
Senior Unsecured Shelf (domestic currency) ratings of (P)B1
Speculative Grade Liquidity Rating ratings of SGL-2
BACKED Senior Unsecured (domestic currency) ratings of B1, 49 -
LGD3
Ratings Rationale
The B1 Corporate Family Rating (CFR) of Navistar International
Corp. (Navistar)reflects the company's highly competitive position
in the North American medium and heavy duty truck markets, and the
continuing recovery in demand. It also reflects the progress
Navistar continues to make in implementing a strategy that should
reduce its vulnerability to cyclical downturns and strengthen
returns. The key elements of this strategy include: expanding its
scale and operating efficiencies by offering a full line of medium
and heavy-duty trucks equipped with Navistar engines; building its
position in international truck and engine markets through
alliance and joint ventures; and, strengthening its domestic
dealer network.
Navistar has made considerable progress implementing several
elements of this strategy, and Moody's believes that it has the
potential to support stronger and more sustainable performance.
However, the company faces several challenges that are also
reflected in the current B1 rating. Chief among these challenges
are: margins and return measure that remain below those of peers;
the need to establish customer and EPA acceptance of its EGR
emissions technology; and, a decline in military truck revenues
and earnings during 2012 due to US DOD spending cuts.
Notwithstanding the stronger demand in the US truck market,
Navistar's overall performance and resulting credit metrics for
2012 should remain on par with those of 2011 due to the weaker
performance of its military operations, higher health care costs,
and expenses associated with restructuring actions. The company's
2011 key metrics, which reflect Moody's standard adjustments,
were: EBITA margin - 4.4%; EBITA/interest - 2.1x; and debt/EBITDA
- 4.4x; and retained cash flow/debt - 16.4%.
The positive rating outlook reflects the solid progress that
Navistar has achieved in implementing its operating plan and
establishing a business profile that should be less vulnerable to
cyclical downturns. This progress also has the potential to
strengthen the company's key credit metrics over the long term.
Factors that could support a higher rating include a strengthening
of Navistar's liquidity profile, EPA approval of its EGR
technology, and solid progress in implementing its strategic plan.
An upgrade would also be supported by evidence indicating that the
company is on track to sustain the following metric levels:
EBITA/interest above 2.5x, (2.1x for 2011) debt/EBITDA below 4x
(4.4x for 2011), and EBITA margin exceeding 5% (4.4% for 2011).
Factors which could result in pressure on the company's rating or
outlook include difficulties in achieving EPA approval and greater
market acceptance of its EGR technology, or significant setbacks
in achieving the various operating components of its strategic
plan. The credit profile could also be stressed by any material
diminution in its current liquidity profile. Metric levels that
could reflect potential pressure on the rating include:
EBITA/interest approximating 1.5x and debt/EBITDA above 4.5x.
The principal methodology used in rating Navistar International
Corp. was the Global Heavy Manufacturing Rating Methodology
published in November 2009.
NEW DAY ADULT DAY CARE: Consejo de Latinos Elated by Bankruptcy
---------------------------------------------------------------
After a year of protests and letter writing, Consejo de Latinos
Unidos, a national not-for-profit organization and public charity
which educates and assists Latinos, claimed victory as New Day
Adult Day Care in El Monte filed for bankruptcy and appears to be
closing its doors. New Day (formerly known as Healthy Start) has
been at the center of physical and sexual abuse allegations since
an employee was arrested for raping a client in May of 2010.
"We are elated that after a year of public pressure, New Day is
finally shutting down," said K.B. Forbes, Executive Director of
the Consejo de Latinos Unidos. "The most vulnerable in our
society, the mentally disabled, were victims of negligence, lack
of concern, and at times, utter disregard for their well-being or
safety. Healthy Start's management scoffed at the original
allegations."
In February of 2011, Juan Fernando Flores, who worked at the New
Day facility when it was named Healthy Start, was sentenced to
eight years in prison for the rape and molestation of three
mentally disabled women. Since 2009, families had complained
repeatedly about Flores to the facility and the supervising
Regional Centers, and they allegedly did nothing. Flores was
arrested 11 months after the first incident was reported for
raping a woman in the bathroom.
Forbes disputed the notion that State budget cuts forced the
bankruptcy. "New Day was a victim of their own arrogance and
negligence. Instead of addressing the abuse allegations, they
mocked the families and simply rebranded their center from Healthy
Start to New Day thinking that would save them from community
outrage."
Parents and families of the mentally disabled have wanted the New
Day facility shut down, and corporate owners held accountable.
"Our work is not done," Forbes declared. "Obviously by filing for
bankruptcy, financial probes by the State of California, criminal
investigators, and regulatory authorities should commence."
In March of 2011, attorneys for the victims of the abuse filed a
lawsuit against New Day and two Regional Centers that supervise
New Day for alleged negligence, violations of the Dependent Adult
Civil Protection Act, and deceptive business practices.
Since 2001, the Consejo has helped spur three U.S. Congressional
hearings and over a dozen local and state probes, including two
Civil Rights inquiries.
ODYSSEY (IX) DP I: Combined Plan Hearing on May 31
--------------------------------------------------
Odyssey (IX) DP I, LLC scheduled a hearing on May 31, 2012, at
4:00 p.m. for confirmation of the Chapter 11 plan and approval of
the disclosure statement after obtaining conditional approval of
the plan disclosures. Objections to confirmation of the Plan and
the adequacy of the information in the Disclosure Statement are
due seven days prior to the hearing.
The Court will also hear applications for allowance of
administrative claims at the May 31 hearing.
Conditional approval of the Disclosure Statement was granted
April 13, 2012.
According to the Amended Disclosure Statement filed April 11,
2012, VS Jensen Beach Holdings, LLC, as successor in interest to
US Bank, N.A., will have its $15.8 million claim paid in full and
will retain its liens on the project pending full payment. VS
Jensen will receive on the first 12 months interest only payments
of 4.75%; beginning in the 13th month through the 24th month,
principal and interest payments, amortized over 30 years; and
beginning in the 25th month principal and interest payments,
amortized over 25 years, with a balloon payment due in the 60th
month after the effective date.
Unsecured claims will be paid in full from excess cash flow.
Payments will be paid annually beginning on the 30 days after the
first anniversary of the Effective Date and thereafter on an
annual basis until paid in full.
VS Jensen, holders of secured tax claims of governmental units,
and the unsecured creditors are entitled to vote to accept or
reject the Plan.
Holders of equity interests will retain their interests.
A copy of the Amended Disclosure Statement is available for free
at http://bankrupt.com/misc/ODYSSEY_IX_Amended_DS.pdf
Secured Creditor Has Sought Dismissal
VS Jensen on April 10, 2012, filed a motion seeking relief from
the automatic stay or dismissal of the Chapter 11 case.
"The Debtor is an underwater entity with virtually no unsecured
debt. The Debtor has filed this two party dispute to create
pressure and leverage upon its secured creditor in an effort to
extract value for equity that is far removed from even a
possibility of a recovery. In the meantime, VS is not adequately
protected and Debtor does not have a prospect of filing a
confirmable plan within a reasonable timeframe," VS said in the
motion.
VS Jensen is represented by:
Scott A. Underwood, Esq.
FOWLER WHITE BOGGS P.A.
P.O. Box 1438
Tampa, FL 33601
Tel: (813) 228-7411
Fax: (813) 229-8313
E-mail: scott.underwood@fowlerwhite.com
About Odyssey (IX) DP I LLC
Lakeland, Florida-based Odyssey (IX) DP I LLC, owns the Ocean
Breeze Plaza, a shopping center in Jensen Beach Florida. Odyssey
(IX) DP I filed for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case
No. 11-22952) on Dec. 16, 2011, after its lender, U.S. Bank N.A.
declared a default on a $16 million construction loan. Judge
Catherine Peek McEwen presides over the case. Edward J. Peterson,
III, Esq., at Stichter, Riedel, Blain & Prosser PA, in Tampa,
Florida, serves as the Debtor's counsel. William Maloney and Bill
Maloney Consulting serves as chief restructuring officer. The
Debtor disclosed $20,318,253 in assets and $15,911,155 in
liabilities as of the Chapter 11 filing. The petition was signed
by Robert Madden, president of OC DIP LLC, the Debtor's manager.
Affiliates that previously filed separate Chapter 11 petitions are
Century/AG - Avondale LLC, Odyssey Properties III LLC, Century
(III) DP III LLC, Odyssey (III) DP III LLC, Odyssey (VI)
Commercial DP I LLC, Odyssey (III) DP IX LLC, Odyssey (III) DP III
LLC, and Odyssey DP III LLC.
OILSANDS QUEST: R. Blakely Elected as Director
----------------------------------------------
Oilsands Quest Inc. held its Annual Meeting of Shareholders on
Tuesday, April 24, 2012, in Calgary.
Mr. Ronald Blakely was elected to serve as a Director of the
Company for a one year term until the next annual meeting. The
Shareholders also approved an amendment to the Company's Articles
of Incorporation to declassify the Board of Directors and remove
the Class A, B and C member designations. Previously, these
classes had terms of three years and were staggered, so that one
class stood for re-election at every annual meeting. Going
forward, Directors will be subject to re-election at each annual
meeting.
KPMG LLP was ratified and approved as the Company's independent
registered accounting firm for the fiscal year ended April 30,
2012.
In addition, a proposal was approved to provide shareholders with
an advisory (non-binding) vote on executive compensation.
Shareholders approved a related proposal determining that such a
vote will be held annually.
About Oilsands Quest
Oilsands Quest Inc. -- http://www.oilsandsquest.com/-- is
exploring and developing oil sands permits and licenses, located
in Saskatchewan and Alberta, and developing Saskatchewan's first
commercial oil sands discovery.
The Company reported a net loss of US$10.3 million for the six
months ended Oct. 31, 2011, compared with a net loss of
US$25.1 million for the six months ended Oct. 31, 2010.
The Company's balance sheet at Oct. 31, 2011, showed
US$156.6 million in total assets, US$33.3 million in total
liabilities, and stockholders' equity of US$123.3 million. As at
Oct. 31, 2011, the Company had a deficit accumulated during the
development phase of US$721.7 million.
On Nov. 29, 2011, the Company and certain of its subsidiaries
voluntarily commenced proceedings under the CCAA obtaining an
Initial Order from the Court of Queen's Bench of Alberta (the
"Court"), in In re Oilsands Quest, Inc., et al., Case No. 1101-
16110.
The CCAA Proceedings were initiated by: Oilsands Quest, Oilsands
Quest Sask Inc., Township Petroleum Corporation, Stripper Energy
Services, Inc., 1291329 Alberta, Ltd., and Oilsands Quest
Technology, Inc.
Under the Initial Order, Ernst & Young, Inc., was appointed by the
Court to monitor the business and affairs of the Oilsands
Entities. Neither of Oilsands' other subsidiaries, 1259882
Alberta, Ltd., and Western Petrochemical Corp., have filed for
creditor protection.
Oilsands Quest obtained a May 18, 2012 extension of the order
providing creditor protection under the Companies' Creditors
Arrangement Act (Canada).
The Company's common shares remain halted from trading until
either a delisting occurs or until the NYSE Amex permits the
resumption of trading.
ON ASSIGNMENT: S&P Assigns 'BB-' Prelim Rating on $100MM Term Loan
------------------------------------------------------------------
Standard & Poor's Ratings Services said its existing preliminary
ratings for Calabasas, Calif.-based On Assignment Inc. are
unaffected by the addition of a $100 million term loan A, an
increase in the size of its revolving credit to $75 million ($25
million funded) from $50 million, and a reduction in the amount
of its term loan B to $365 million from $490 million. "We are
assigning our preliminary 'BB-' rating to the company's $100
million term loan A due 2017 with a preliminary recovery rating of
'3'. The '3' recovery rating indicates our expectation of
meaningful (50% to 70%) recovery for lenders in the event of a
payment default," S&P said.
"We expect On Assignment to use the net proceeds and newly issued
common stock to pay for its $600 million acquisition of Apex
Systems Inc., and to refinance its existing debt. Including our
operating lease adjustment and potential earn-outs, pro forma for
the acquisition and financing transactions, debt to EBITDA was
roughly 4x for the 12 months ended March 31, 2012. We now expect
pro forma lease-adjusted EBITDA coverage of interest expense to be
around 5.5x versus 5.0x in 2012, because of the lower average cost
of debt," S&P said.
"The corporate credit rating for On Assignment is preliminary 'BB-
' and the rating outlook is stable. The preliminary 'BB-' rating
reflects our expectation that On Assignment will be able to reduce
leverage, generate positive discretionary cash flow, and maintain
an adequate cushion of covenant compliance over the intermediate
term. Following the acquisition, which essentially doubles the
size of the company, On Assignment primarily will be an IT
staffing firm, but will also operate in life sciences staffing,
physician staffing, travel nursing, and allied health care. We
expect lease-adjusted pro forma leverage to decline to the mid-to-
high-3x area by the second half of 2012," S&P said.
RATINGS LIST
On Assignment Inc.
Corporate credit rating BB-(prelim)/Stable/--
$75M revolv credit fac BB-(prelim)
Recovery Rating 3(prelim)
$365M term loan B BB-(prelim)
Recovery Rating 3(prelim)
New Rating
On Assignment Inc.
$100M term loan A due 2017 BB-(prelim)
Recovery Rating 3(prelim)
OSMOSE HOLDINGS: Moody's Says Upsized Loans No Impact on Ratings
----------------------------------------------------------------
Moody's Investors Service commented that Osmose Holdings, Inc.'s
ratings are unchanged by the company's plans to upsize its
proposed senior secured credit facilities.
As reported by the Troubled Company Reporter on April 24, 2012,
Moody's assigned B1 ratings to Osmose Holdings' proposed $265
million senior secured credit facilities. Proceeds from the
transaction will help finance the leveraged buyout of Osmose by
investment funds managed by Oaktree Capital Management, L.P.
Moody's also assigned a B1 Corporate Family Rating ("CFR") and a
B2 Probability of Default Rating ("PDR") to Osmose. The assigned
first-time ratings are subject to Moody's review of final terms
and conditions of the transaction expected to close in the second
quarter of 2012. The rating outlook is stable.
Assignments:
Issuer: Osmose Holdings, Inc.
Corporate Family Rating, Assigned B1
Probability of Default Rating, Assigned B2
$25 million Senior Secured Revolving Credit Facility due
2017, Assigned B1 LGD3 38%
$240 million Senior Secured Term Loan due 2018, Assigned B1
LGD3 38%
Outlook, Stable
Osmose Holdings, Inc. is a provider of utilities and railroad
infrastructure services, and a manufacturer and marketer of wood
preservation chemicals. Following the anticipated completion of a
proposed sale transaction in the second quarter of 2012, Osmose
will be owned by investment funds managed by private equity
sponsor Oaktree Capital Management, L.P.
PALMDALE HILLS: Plan Effective; Lehman Takes SunCal Properties
--------------------------------------------------------------
Lehman Brothers Holdings Inc. disclosed that its bankruptcy plans
in the SunCal bankruptcy cases have gone effective and as a result
Lehman has taken title to a portfolio of California properties
formerly owned by affiliates of the SunCal Companies. The plans
were confirmed by the SunCal bankruptcy court in California in
October 2011 and approved by the Lehman bankruptcy court in New
York in July 2011.
The effectiveness of the plans will result in Lehman, which had
provided financing for these development sites, obtaining
ownership of 14 different projects throughout the State of
California.
Jeff Fitts, Lehman's head of real estate, said, "Our strategy for
the SunCal portfolio has been to gain control over the assets so
that we could position them in a way that would provide the best
result possible for Lehman creditors. It has been a long and
complex process, and this is a major milestone."
About SunCal Companies
SunCal Companies -- http://www.suncal.com/-- had more than
250,000 residential lots and 10 million square feet of commercial
space in various stages of development throughout California,
Arizona, Nevada and New Mexico.
Gramercy Warehouse Funding LLC and several creditors filed
involuntary petitions each against LBREP/L-SunCal Master I
LLC, LBREP/L-SunCal McAllister Ranch LLC, LBREP/L-SunCal McSweeny
Farms LLC, and LBREP/L-SunCal Summerwind Ranch LLC on Sept. 11,
2008 (Bankr. C.D. Calif Case No. 08-15588, 08-15637, 08-15639, and
08-15640). Daniel H. Reiss, Esq., at Levene, Neale, Bender,
Rankin & Brill represents the petitioners.
SunCal affiliates led by Palmdale Hills Property, LLC, filed
voluntary Chapter 11 petitions (Bankr. C. D. Calif. Case No.
08-17206) on Nov. 6, 2008. Affiliates that also filed separate
Chapter 11 petitions include: SunCal Beaumont Heights, LLC; SunCal
Johannson Ranch, LLC; SunCal Summit Valley, LLC; SunCal Emerald
Meadows LLC; SunCal Bickford Ranch, LLC; SunCal Communities I,
LLC; SunCal Communities III, LLC; and SJD Development Corp.
SunCal Companies is not in bankruptcy.
Paul J. Couchot, Esq., at Winthrop Couchot P.C., represents
Palmdale Hills in its restructuring effort. The Company estimated
assets and debts of $100 million to $500 million in its Chapter 11
petition.
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)
PHI INC: S&P Affirms 'B+' Corp. Credit Rating; Outlook Stable
-------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Lafayette, La.-based PHI Inc. (PHI) to stable from negative and
affirmed its 'B+' corporate credit rating on the company.
"We revised our outlook on PHI to stable to reflect the company's
improved prospects stemming from increased activity in the Gulf of
Mexico and healthier margins in the company's Air Medical
segment," said Standard & Poor's credit analyst Stephen Scovotti.
"These factors have resulted in stronger credit protection
measures and liquidity. We currently expect PHI's leverage to
improve to the mid-4x area by the end of 2012."
"The ratings on PHI Inc. reflect our assessment of the company's
'weak' business risk and 'aggressive' financial risk. The ratings
also incorporate the company's participation in the highly
cyclical and volatile oil and gas industry, exposure to weather
and seasonal fluctuations that may limit flight hours, and a
levered capital structure. Offsetting these negatives, the ratings
also reflect PHI's good market share in the Gulf of Mexico, the
industry's oligopolistic structure, and the improvement in
deepwater permitting in the Gulf of Mexico, which is having a
positive effect on oil and gas flight hours," S&P said.
"The outlook is stable. The company is benefiting from the
increased activity in the deepwater Gulf of Mexico. In addition,
PHI's Air Medical segment is seeing improved profitability. We
expect year-end 2012 leverage to be approximately 4.5x. A negative
rating action could occur if we believe that PHI will maintain
leverage above 4.75x. Conversely, should debt leverage improve to
less than 3.75x on a sustained basis, we would consider a positive
rating action," S&P said.
PHOENIX DEVELOPMENT: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Phoenix Development and Construction Inc
180 Genesee
Corfu, NY 14036
Bankruptcy Case No.: 12-11335
Chapter 11 Petition Date: April 30, 2012
Court: U.S. Bankruptcy Court
Western District of New York (Buffalo)
Judge: Michael J. Kaplan
Debtor's Counsel: Matthew Allen Lazroe, Esq.
410 Main Street, Second Floor
Buffalo, NY 14202
Tel: (716) 856-8811
Fax: (716) 852-7599
E-mail: lazroebankruptcy@gmail.com
Scheduled Assets: $51,500
Scheduled Liabilities: $2,505,051
A copy of the Company's list of its 20 largest unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/nywb12-11335.pdf
The petition was signed by Steven Moutsatsos, vice president.
PINNACLE AIRLINES: Taps Barclays Capital as Investment Banker
-------------------------------------------------------------
BankruptcyData.com reports that Pinnacle Airlines filed with the
U.S. Bankruptcy Court a motion to retain Barclays Capital
(Contact: Mark Shapiro) as investment banker for a monthly fee of
$150,000 and a $3.7 million transaction fee.
About Pinnacle Airlines
Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/--
a $1 billion airline holding company with 7,800 employees, is the
parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.;
and Colgan Air, Inc. Flying as Delta Connection, United Express
and US Airways Express, Pinnacle Airlines Corp. operating
subsidiaries operate 199 regional jets and 80 turboprops on more
than 1,540 daily flights to 188 cities and towns in the United
States, Canada, Mexico and Belize. Corporate offices are located
in Memphis, Tenn., and hub operations are located at 11 major U.S.
airports.
Pinnacle Airlines Inc. and its affiliates, including Colgan Air,
Mesaba Aviation Inc., Pinnacle Airlines Corp., and Pinnacle East
Coast Operations Inc. filed for Chapter 11 bankruptcy (Bankr.
S.D.N.Y. Lead Case No. 12-11343) on April 1, 2012.
Judge Robert E. Gerber presides over the case. Lawyers at Davis
Polk & Wardwell LLP, and Akin Gump Strauss Hauer & Feld LLP serve
as the Debtors' counsel. Barclays Capital and Seabury Group LLC
serve as the Debtors' financial advisors. Epiq Systems -
Bankruptcy Solutions serves as the claims and noticing agent. The
petition was signed by John Spanjers, executive vice president and
chief operating officer.
Pinnacle Airlines' balance sheet at Sept. 30, 2011, showed $1.53
billion in total assets, $1.42 billion in total liabilities and
$112.31 million in total stockholders' equity.
Delta Air Lines, Inc., the Debtors' major customer and post-
petition lender, is represented by David R. Seligman, Esq., at
Kirkland & Ellis LLP.
A seven-member official committee of unsecured creditors has been
appointed in the case.
PIONEER DRILLING: S&P Raises Corporate Credit Rating to 'B+'
------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Pioneer Drilling Co. 'B+' from 'B'. The outlook is
stable.
"At the same time we revise the rating on the company's senior
unsecured debt to 'B+'. The recovery rating on the company's
senior unsecured debt remains '4', indicating our expectation of
average (30% to 50%) recovery in the event of a payment default,"
S&P said.
"We upgraded Pioneer Drilling Co. to reflect the company's
improved operating performance and enhanced asset base," said
Standard & Poor's credit analyst Lawrence Wilkinson. "The
company's revenues and EBITDA in the fourth quarter of 2011 were
roughly 40% higher than levels seen in the same period in the
prior year. Given currently anticipated increases in exploration
and production (E&P) company capital spending, we view these
performance levels as sustainable over the intermediate term.
Further, the company has made material improvements to its asset
base through the addition of new rigs, upgrading of its existing
fleet and divesting of less competitive assets. In addition, the
company broadened its service offering through its $116 million
acquisition of Go-Coil, a provider of coiled tubing services."
"The ratings on Pioneer reflect our assessment of 'vulnerable'
business risk and 'aggressive' financial risk. The ratings
incorporate the company's participation in a highly competitive,
cyclical industry, its small scale and scope of operations, and
meaningful levels of capital investment necessary to upgrade its
drilling rig fleet. Standard & Poor's also bases its ratings on
the company's historically conservative financial profile and
efforts to diversify its revenue base," S&P said.
"Pioneer provides contract drilling and oilfield services to
exploration and production (E&P) companies primarily in the U.S.,
with some exposure to the Republic of Colombia. Through its
drilling services division, the company is the ninth-largest
contract driller in the U.S., operating 64 onshore drilling rigs.
This segment accounted for roughly two-thirds of consolidated
revenues and a little more than half of gross margin over the past
three years. The company's production services division provides
wireline units and fishing and rental tool services. We view these
businesses as slightly less volatile," S&P said.
"The outlook is stable. Over the intermediate term, we expect
Pioneer's key credit measures and liquidity to be well within
levels consistent with the rating. We would consider a downgrade
if the company's operating performance deteriorated such that
leverage exceeds 4.5x. Such a scenario would entail a decline in
earnings of greater than 50% from current levels. We consider an
upgrade unlikely over the intermediate term, given our assessment
of Pioneer's business risk profile," S&P said.
PITTSBURGH CORNING: Parent Records Add'l $150MM for PCI Claims
--------------------------------------------------------------
Corning Incorporated said in the Form 10-Q for the three months
ended March 31, 2012, that asbestos litigation expense was $1
million during the period.
Corning had net income of $462 million on $1.92 billion of net
sales for the three months ended March 31, 2012, compared with net
income attributable to the Company of $748 million on
$1.92 billion of net sales for the same period a year ago.
Corning's balance sheet at March 31, 2012, showed $28.48 billion
in total assets, $7.12 billion in total liabilities, and $21.36
million in total equity.
Corning and PPG Industries, Inc. (PPG) each own 50% of the capital
stock of Pittsburgh Corning Corporation (PCC). Over a period of
more than two decades, PCC and several other defendants have been
named in numerous lawsuits involving claims alleging personal
injury from exposure to asbestos. On April 16, 2000, PCC filed
for Chapter 11 reorganization in the U.S. Bankruptcy Court for the
Western District of Pennsylvania. Corning, with other relevant
parties, has been involved in ongoing efforts to develop a Plan of
Reorganization that would resolve the concerns and objections of
the relevant parties. A proposed PCC plan of reorganization
(Amended PCC Plan) is currently filed in the U.S. Bankruptcy Court
for the Western District of Pennsylvania but has not been
confirmed by the Court.
The Amended PCC Plan does not include certain non-PCC asbestos
claims that may be or have been raised against Corning. Corning
has recorded an additional $150 million for such claims in its
estimated asbestos litigation liability. The liability for the
Amended PCC Plan and the non-PCC asbestos claims was estimated to
be $658 million at March 31, 2012, compared with an estimate of
the liability of $657 million at Dec. 31, 2011. In the three
months ended March 31, 2012 and 2011, Corning recorded asbestos
litigation expense of $1 million and $5 million, respectively.
Corning also has an equity interest in Pittsburgh Corning Europe
N.V. (PCE), a Belgian Corporation that is a component of the
Company's proposed resolution of the PCC asbestos litigation. At
March 31, 2012 and December 31, 2011, the fair value of PCE
significantly exceeded its carrying value of $141 million and $138
million, respectively. The entire obligation is classified as a
non-current liability as installment payments for the cash portion
of the obligation are not planned to commence until more than 12
months after the Amended PCC Plan becomes effective and the PCE
portion of the obligation will be fulfilled through the direct
contribution of Corning's investment in PCE (currently recorded as
a non-current other equity method investment).
A copy of the Form 10-Q is available for free at:
http://is.gd/82zRlX
About Pittsburgh Corning
Pittsburgh Corning Corporation filed for Chapter 11 bankruptcy
protection (Bankr. W.D. Pa. Case No. 00-22876) on April 16, 2000,
to address numerous claims alleging personal injury from exposure
to asbestos. At the time of the bankruptcy filing, there were
about 11,800 claims pending against the Company in state court
lawsuits alleging various theories of liability based on exposure
to Pittsburgh Corning's asbestos products and typically requesting
monetary damages in excess of $1 million per claim.
The Hon. Judith K. Fitzgerald presides over the case. Reed Smith
LLP serves as counsel and Deloitte & Touche LLP as accountants to
the Debtor.
The United States Trustee appointed a Committee of Unsecured Trade
Creditors on April 28, 2000. The Bankruptcy Court authorized the
retention of Leech, Tishman, Fuscaldo & Lampl, LLC, as counsel to
the Committee of Unsecured Trade Creditors, and Pascarella &
Wiker, LLP, as financial advisor.
The U.S. Trustee also appointed a Committee of Asbestos Creditors
on April 28, 2000. The Bankruptcy Court authorized the retention
of these professionals by the Committee of Asbestos Creditors: (i)
Caplin & Drysdale, Chartered as Committee Counsel; (ii) Campbell &
Levine as local counsel; (iii) Anderson Kill & Olick, P.C. as
special insurance counsel; (iv) Legal Analysis Systems, Inc., as
Asbestos-Related Bodily Injury Consultant; (v) defunct firm, L.
Tersigni Consulting, P.C. as financial advisor, and (vi) Professor
Elizabeth Warren, as a consultant to Caplin & Drysdale, Chartered.
On Feb. 16, 2001, the Court approved the appointment of Lawrence
Fitzpatrick as the Future Claimants' Representative. The
Bankruptcy Court authorized the retention of Meyer, Unkovic &
Scott LLP as his counsel, Young Conaway Stargatt & Taylor, LLP as
his special counsel, and Analysis, Research and Planning
Corporation as his claims consultant.
In 2003, a plan of reorganization was agreed to by various
parties-in-interest, but, on Dec. 21, 2006, the Bankruptcy Court
issued an order denying the confirmation of that plan, citing that
the plan was too broad in addressing independent asbestos claims
that were not associated with Pittsburgh Corning.
On Jan. 29, 2009, an amended plan of reorganization (the Amended
PCC Plan) -- which addressed the issues raised by the Court when
it denied confirmation of the 2003 Plan -- was filed with the
Bankruptcy Court.
As reported by the TCR on April 25, 2012, Pittsburgh Corning
Corp., a joint venture between Corning Inc. and PPG Industries
Inc., filed another amendment to its reorganization plan designed
to wrap up a Chapter 11 begun 12 years ago. According to the
report, a hearing to consider the new plan is scheduled for
June 21.
PORT MANAGEMENT: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Port Management, L.L.C.
1106 N. Galloway Avenue
Mesquite, TX 75149
Bankruptcy Case No.: 12-32652
Chapter 11 Petition Date: April 27, 2012
Court: U.S. Bankruptcy Court
Northern District of Texas (Dallas)
Judge: Harlin DeWayne Hale
Debtor's Counsel: Howard Marc Spector, Esq.
SPECTOR & JOHNSON, PLLC
12770 Coit Road
Banner Place, Suite 1100
Dallas, TX 75251
Tel: (214) 365-5377
Fax: (214) 237-3380
E-mail: hspector@spectorjohnson.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by J. Teig Port, manager.
Affiliates that filed separate Chapter 11 petitions:
Entity Case No. Petition Date
------ -------- -------------
Galaxy MRI and Diagnostic Center, Ltd. 12-32648 4/27/12
Galloway Medical Center, Ltd. 12-32646 4/27/12
J. Teig Port, M.D., P.A. 12-32650 4/27/12
PRESIDENTIAL LIFE: A.M. Best Raises Issuer Credit Rating to 'bb+'
-----------------------------------------------------------------
A.M. Best Co. has upgraded the issuer credit rating (ICR) to
"bbb+" from "bbb" and affirmed the financial strength rating of
B++ (Good) of Presidential Life Insurance Company (Presidential
Life) (Nyack, NY). In addition, A.M. Best has upgraded the ICR to
"bb+" from "bb" of the parent company, Presidential Life
Corporation [NASDAQ: PLFE]. The outlook for all ratings is
stable.
The rating upgrades reflect Presidential Life's strong
capitalization, profitable earnings achieved through solid and
improved investment results, along with the early stage execution
of the company's business strategy to move from a regional
distributor of annuity products to a national platform.
Partially offsetting these positive ratings factors is
Presidential Life's current concentrated market profile operating
as a predominantly fixed annuity business in a limited geographic
area with a narrow product offering, income volatility due to
exposure to the limited partnership investment asset class and
high minimum crediting rates on the company's in-force block of
business.
Despite these concerns, Presidential Life's outlook is reflective
of management's ability to manage the company's investment risk
profile, improving capitalization and A.M. Best's expectation that
solid operating performance will be sustained over the near to
medium term and will contribute to organic surplus growth as the
company starts the execution of growth objectives.
The company is well positioned at the current ratings. Positive
rating actions may occur if the company can develop a more
diversified liability structure and continue to produce positive
operating earnings without extraordinary items. Downward rating
actions could occur if negative results in Presidential Life's
operations put into question the viability of its expansion to a
national platform while creating a materially negative change in
capitalization or operating performance.
PRINCE SPORTS: Authentic to Take Ownership via Chapter 11
---------------------------------------------------------
Prince Sports, Inc. and its U.S. affiliates filed voluntary
petitions for Chapter 11 reorganization (Bankr. D. Del. Lead Case
NO. 12-11439) on May 1, 2012, with a Chapter 11 plan that
contemplates the transfer of ownership to Authentic Brands Group
(ABG)-Prince LLC.
Founded in 1970, Prince Sports has a 42-year track record of
developing premium quality products for the racquet sports
industry. The Company pioneered many innovative designs,
including the "oversized" racquet, the "longbody" racquet, and
technology for racquet applications such as Triple Threat, 03 and
EX03. Prince sells its products through brands like "Ektelon,"
which sells racquetball racquets, footwear and gloves and "Viking
Athletics," through which it sells platform tennis paddles, balls
and gloves. Prince is distributed in over 100 countries.
Lincolnshire Management Inc. acquired Prince from Benneton Group,
the parent company of United Colors of Benneton, in 2003.
Lincolnshire Management sold Prince to Nautic Partners in August
2007.
"Declines in the global racquet sports market and demand for the
industry's products, combined with increased competition over the
past five years, have resulted in lower sales of the Debtors'
product lines. The downturn in the economy commencing around 2008
has particularly negatively impacted consumer discretionary
spending and thus sales industry-wide," Gordon Boggis, CEO of
Prince explains in a court filing.
Prince engaged UBS in November 2010 to commence a process to sell
rights to its brands and operations in China, but aborted the
process in February 2011 when it did not receive any acceptable
bids.
The Company then decided to start another sale process in October
2011. The Company decided to broaden the focus of the marketing
of the assets and hired Robert W. Baird, which found nine
potential investors for a going-concern transaction.
The company was in negotiations with the final three parties who
would have paid substantially lesser than the existing secured
debt. But the sale was again aborted when Authentic Brands Group
(ABG)-Prince LLC acquired the secured debt from GE Capital and
Madison Cpaital in March 2011 and Authentic indicated its interest
in acquiring ownership of the Company.
"Given Authentic's proven track record in successfully acquiring
and managing companies with extensive intellectual property
holdings and the fact that Authentic is now the single holder of
the secured debt, the Company believes that its acquisition by
Authentic pursuant to the terms set forth in the Chapter 11 Plan
are in the best interests of the Company's economic constituents
and provide the best prospects for the Company's successful
reorganization," Mr. Boggis said.
ABG is a brand development and licensing company which has managed
prominent consumer brands like Marilyn Monroe, Bob Marley and
Polaroid among others.
Competitive Business Model
"After considering several business options, the Board of
Directors and the senior management team firmly believe that the
Chapter 11 filing is not only a necessary step but also the right
thing to do to ensure a secure future for Prince," said Gordon
Boggis, President and CEO of Prince Sports, Inc.
Prince will utilize the Chapter 11 process to develop a more
competitive business model. Prince has secured a commitment of
debtor-in-possession financing that will give its vendors and
suppliers confidence in its position to operate in Chapter 11.
This proposed restructuring would relieve the Company from a debt
burden in excess of $60 million of secured indebtedness.
Despite economic constraints, consumer demand for Prince products
and interest in the brand remains strong worldwide. Prince
continues to be globally recognized as a leader in its category.
"We anticipate to emerge from this period as a more efficient,
performance racquet sports brand with a more competitive model in
the market, while eliminating the economic constraints that have
prohibited the brand from achieving its potential," continued
Boggis. "The Board of Directors, the senior management team and I
would like to underscore our appreciation for the hard work and
loyalty of our employees. Prince continues to be a world leader
in bringing to market meaningful, visible and proven product
innovation within the racquet sports market and our employees have
contributed greatly to that." Prince plans to continue to pay
employee wages and benefits and service customers during the
Chapter 11 process. Subsidiaries outside of the U.S. (such as
Prince Europe, Prince Italy, Prince France, Prince Benelux, Prince
Taiwan and Prince China) are not subject to the proceedings and
are expected to operate in ordinary course.
"Prince is, and will continue to be, a great, global brand in the
racquet sports business. This filing does not change that,"
concluded Boggis. "We have a long history, and are planning for
an exciting future, focused on game-changing, product innovation,
engineered to take players' games to the next level. Securing this
protection will help us to continue to focus on that vision."
The Company has an exciting new product pipeline and is developing
plans on how to best bring these innovations to market.
For the 2011 fiscal year, the Company generated approximately
$72,000,000 in total sales, comprised of approximately $37,000,000
in sales in the North American division, and approximately
$35,000,000 sales in the EMEA and International divisions,
representing approximately 52% and 48%, respectively, of the
Company's total sales.
For the fiscal year ending Dec. 31, 2012, on an unaudited
consolidated basis, the Debtors reported total book value assets
of approximately $54.2 million including $9.7 million in accounts
receivable.
The Debtors currently owe a total of approximately $65,000,000 in
secured indebtedness to Authentic. In addition, the Company owes
$10.2 million in trade debt to its vendors and $1.8 million in
other payables.
The Chapter 11 Case
Aside from a proposed Chapter 11 plan, the Debtors have filed
first day motions, including proposals to obtain DIP financing,
prohibit utilities from discontinuing services, honor obligations
to customers, and pay prepetition wages and benefits.
A hearing on the first day matters is scheduled for May 2, 2012 at
1:30 p.m.
Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the
Debtors. The Debtors have also tapped FTI Consultin, Inc., to
provide David J. Woodward as Chief Restructuring Officer, and
provide additional personnel. Epiq Bankruptcy Solutions LLC is the
claims and notice agent.
A copy of the consolidated list of unsecured creditors is
available for free at
http://bankrupt.com/misc/Prince_Creditors_List.pdf
Reorganization Plan
The proposed Plan provides for the deleveraging of the Debtors'
debt structure so that it may reorganize and continue to operate
as a going concern.
The Plan provides for the discharge and cancellation of the
secured debt in exchange for 100% of the new equity interests in
reorganized Prince Sports Acquisition Holdings Corporation.
The disclosure statement explaining the Plan has blanks with
respect to the estimated recovery of general unsecured creditors.
The unsecured creditors, each of whom will receive a pro rata
share of the "general unsecured claim plan distribution" and the
"cash distribution", are impaired under the Plan. The General
Unsecured Claim Plan distribution is defined as the net proceeds
form the settlement or prosecution of avoidance actions. Cash
Distribution is defined as "cash in the amount of $[__]."
Existing equity interests in Prince Sports Acquisition Holdings
Corporation will be cancelled and the holders thereof will not
receive any distributions on account of such interests. Prince
Sports Holdings, LLC and Prince Sports Management Holdings, LLC
will be deemed dissolved upon the effectiveness of the Plan, and
all equity interests in those two entities will be deemed
cancelled.
Authentic is providing $2.5 million of debtor-in-possession
financing.
Counsel to Authentic may be reached at:
Richard A. Chesley, Esq.
Matthew M. Murphy, Esq.
DLA PIPER LLP (US)
203 North LaSalle Street, Suite 1900
Chicago, Illinois 60601-1293
Tel: (312) 368-4000
Fax: (630) 630-5330
- and -
Stuart Brown, Esq.
DLA PIPER LLP (US)
919 N. Market Street, 15th Floor
Wilmington, Delaware 19801
Tel: (302) 468-5700
Fax: (302) 778-7913
A copy of the Disclosure Statement is available for free at:
http://bankrupt.com/misc/Prince_Sports_Plan_Outline.pdf
RAVENWOOD HEALTHCARE: Case Summary & Creditors List
---------------------------------------------------
Debtor: Ravenwood Healthcare, Inc.
dba Harborside Nursing and Rehabilitation Center
P.O. Box 40018
Baton Rouge, LA 70835
Bankruptcy Case No.: 12-10612
Chapter 11 Petition Date: April 27, 2012
Court: U.S. Bankruptcy Court
Middle District of Louisiana (Baton Rouge)
About the Debtor: The Debtor is a not-for-profit corporation
which owns and operates the Harborside Nursing
and Rehabilitation Center, a 165-bed skilled
care facility in Baltimore, Maryland. It has
134 hourly rate based and 11 salaried rate
based employees.
Debtor's Counsel: Noel Steffes Melancon, Esq.
STEFFES, VINGIELLO & MCKENZIE, LLC
13702 Coursey Boulevard, Building 3
Baton Rouge, LA 70817
Tel: (225) 751-1751
Fax: (225) 751-1998
E-mail: nsteffes@steffeslaw.com
- and -
William E. Steffes, Esq.
STEFFES, VINGIELLO & MCKENZIE, LLC
13702 Coursey Boulevard, Building 3
Baton Rouge, LA 70817
Tel: (225) 751-1751
Fax: (225) 751-1998
E-mail: bsteffes@steffeslaw.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Richard T. Daspit, Sr., president.
Debtor's List of Its 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Millennium Pharmacy Solutions -- $60,504
P.O. Box 823441
Philadelphia, PA 19182
Shapiro Sher & Guinot -- $42,000
36 S. Charles Street, Suite 2000
Baltimore, MD 21201
Director of Finance -- $26,461
Revenue Collections
P.O. Box 17535
Baltimore, MD 21297-1535
Gulf South Medical -- $25,326
Proactive Therapy -- $22,882
Brocato Price & Janofsky -- $21,204
Law Office of Timothy Dixon -- $13,000
Sysco ? Baltimore -- $10,207
Wells Fargo Bank -- $9,112
BGE -- $8,976
Maun-Lemke Speaking -- $6,930
Fireline -- $4,410
DHMH -- $3,859
Alpha Clinical Lab -- $2,814
Dr. Daniel R. Howard -- $2,500
Staples Advantage -- $1,707
Briggs Corporation -- $1,690
Ricoh Americas Corp. -- $1,661
Plotkins of Franklin St., Inc. -- $1,614
Thyssen Elevator Co. -- $1,573
RCS CAPITAL: Court Okays Daryl Williams as Special Counsel
----------------------------------------------------------
RCS Capital Development, LLC, obtained authorization from the U.S.
Hon. Randolph J. Haines of the U.S. Bankruptcy Court for the
District of Arizona to employ Daryl M. Williams of the law firm
Baird, Williams & Greer, LLP, as special counsel in matters
related to certain proceedings in which Baird, Williams & Greer,
LLP, represented the Debtor prior to the Petition Date.
As reported by the Troubled Company Reporter on Jan. 30, 2012,
BWG, along with a local firm, Bifferato Gentilotti, LLC,
represented debtor and Debtor's interest as a creditor and party-
in-interest in the chapter 15 case of ABC Learning Centres Limited
n/k/a ZYX Learning Centres Limited, et al., Case No. 10-11711.
BWG also represents the Debtor in an appeal related to the Chapter
15 Case now pending before the Delaware District Court, Case No.
11-cv-245.
About RCS Capital
RCS Capital Development, LLC, et al., filed a Chapter 11 petition
(Bankr. D. Ariz. Case No. 11-28746) on Oct. 12, 2011. Michael W.
Carmel, Esq., at Michael W. Carmel, Ltd., in Phoenix, Ariz.,
represents the Debtor as counsel.
RCS's bankruptcy schedules reflect assets of US$57,038,210, of
which the largest is a judgment in the approximate amount of
US$57,000,000 against ABC Learning Centres Ltd., an Australia-
based operator of childcare centers. RCS's bankruptcy schedules
reflect liabilities of approximately of US$47,169,203, the most
significant of which is the disputed US$41,000,000 claim of ABC.
Judge Randolph J. Haines presides over RCS's case.
RCS had various contractual relationships with ABC that resulted
in litigation in Maricopa County. That litigation resulted in a
US$50 million jury verdict against ABC and judgment (worth
US$56,456,732 as of Nov. 15, 2011). Liquidators for ABC filed for
recognition under Chapter 15 of the Bankruptcy Code in the U.S.
Bankruptcy Court for the District of Delaware about two weeks
after RCS obtained its verdict. Judge Kevin Gross entered an
order on Nov. 16, 2010, that recognized the Chapter 15 proceeding.
ABC liquidators contended in papers filed in Delaware that RCS
violated the Chapter 15 order by continuing actions in Nevada to
seize property in which the liquidators claimed an interest. At a
hearing in U.S. Bankruptcy Court in Delaware on Oct. 4, 2011, the
liquidators asked Judge Gross to rule that RCS violated the
automatic stay. The liquidators also wanted RCS to be held in
contempt, directed to return property and assessed with punitive
damages. Judge Gross concluded the Oct. 4, 2011 hearing and said
he would rule later.
As reported by the Troubled Company Reporter on Oct. 17, 2011,
Bill Rochelle, the bankruptcy columnist for Bloomberg News, noted
that perhaps hoping to preclude Judge Gross from handing down an
unfavorable ruling, RCS filed its own Chapter 11 petition on
Oct. 12, 2011, in Phoenix.
RECREATIONAL ACREAGE: Case Summary & Creditors List
---------------------------------------------------
Debtor: Recreational Acreage Exchange, Ltd.
297 State Route 10
Stamford, NY 12167
Bankruptcy Case No.: 12-11179
Chapter 11 Petition Date: April 30, 2012
Court: U.S. Bankruptcy Court
Northern District of New York (Albany)
Debtor's Counsel: Robert S. Lewis, Esq.
LAW OFFICES OF ROBERT S. LEWIS, PC
53 Burd Street
Nyack, NY 10960
Tel: (845) 358-7100
E-mail: robert.lewlaw1@gmail.com
Scheduled Assets: $3,021,290
Scheduled Liabilities: $1,291,016
A copy of the Company's list of its 10 largest unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/nynb12-11179.pdf
The petition was signed by Kevin Misevis, president.
REDDY ICE: Taps DLA Piper as Bankruptcy Counsel
-----------------------------------------------
Reddy Ice Holdings, Inc., and Reddy Ice Corporation seek
permission from the U.S. Bankruptcy Court for the Northern
District of Texas to employ DLA Piper LLP (US) as bankruptcy
counsel, effective as of the Petition Date.
DLA Piper will, among other things, prepare and negotiate on the
Debtors' behalf plan(s) of reorganization, disclosure
statement(s), and all related agreements and documents, and take
any necessary action on behalf of the Debtors to obtain
confirmation of the plan(s), for these hourly rates:
Partners $555-$1,075
Counsel $285-$740
Associates $330-$665
Paraprofessionals $105-$280
The restructuring attorney leading the DLA Piper engagement in the
Chapter 11 cases is Gregg M. Galardi, Esq., whose present hourly
rate is $945.
Mr. Galardi attests to the Court that DLA Piper is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
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
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 Adds 2 Members to Creditors Committee
-------------------------------------------------------------
William T. Neary, U.S. Trustee for Region 6, added Lawrence Acker
and Piedmont National Corp. as members to the Official Unsecured
Creditors' Committee in the Chapter 11 cases of Reddy Ice
Holdings, Inc., and Reddy Ice Corporation.
The U.S. Trustee previously appointed three members to the
Committee.
The Committee now comprises:
1. Sharp Packaging
Attn: Micah McDowell
Vice President of Sales and Marketing
N. W. 22632 Village Drive
Sussex, WI 53089
Tel: (800) 634-6359
E-mail: Micahm@sharppackaging.com
2. Thomas Beverage Co., Inc.
James F. Thomas, President
1941 Grand Avenue
St. Paul, MN 55105
Tel: (651) 699-1860
3. TSI&C, Inc.
Attn: Joan Wagstaff
C.O.O
7309 Springfield Drive
Plano, TX 75025
Tel: (214) 455-0483
E-mail: joan@tsic.us
4. Lawrence Acker
44 East Long Lake Road
Bloomfield Hills, MI 48324
Tel: (248) 594-7277
E-mail: ljapc@aol.com
5. Piedmont National Corp.
Attention: Philip Shaw
Controller
1561 Southland Circle N.W.
Atlanta, GA 30318
Tel: (404) 367-4227
E-mail: Philips@pncorp.com
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.
Entities entitled to vote on the Plan have until May 9, 2012, 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.
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.
REOSTAR ENERGY: Inglish Family Wants Due Process, Opposes Plan
--------------------------------------------------------------
Elizabeth Kay Inglish Aldridge individually and as the Independent
Co-Executrix of the Estate of William Bailey (W. B.) Inglish,
deceased, and Ann Inglish Knight, individually and as the
Independent Co-Executrix of the Estate of William Bailey (W. B.)
Inglish, deceased, filed supplemental objections to the Debtors'
Amended Disclosure Statement.
The Inglish Family is an administrative claimant with unliquidated
administrative claims related to post-petition amounts owed by
ReoStar Energy Corporation to the Inglish Family in connection
with certain oil and gas leases in which the Debtor is the
purported lessee by assignment. The Inglish Family is also a
party-in-interest by virtue of those same leases. The Inglish
Family has a dispute with the Debtor regarding the proper
construction of their leases, and whether those leases continue to
be property of the estate. The Inglish Family contends that
significant acreage under the leases has expired, and is no longer
property of the estate.
According to the Inglish Family, the Amended Plan is unconfirmable
because the discharge provided exceeds the discharge allowed under
the Bankruptcy Code. It adds that the Amended Disclosure
Statement fails to provide adequate disclosure regarding treatment
of unliquidated administrative claims.
"Facially, it appears that the ADS and the Amended Plan fail to
provide due process to the Inglish Family because ... the Amended
Plan ... provides that any and all lawsuits in connection with the
assertion of a Claim or Lien are discharged and enjoined," says
Carol Lynn Wolfram, Esq., in Denton, Texas, attorney for the
Inglish Family.
About ReoStar Energy
Fort Worth, Texas-based ReoStar Energy Corporation is engaged in
the exploration, development and acquisition of oil and gas
properties, primarily located in the state of Texas. The Company
owns roughly 9,000 acres of leasehold, which include 5,000 acres
of exploratory and developmental prospects as well as 4,000 acres
of enhanced oil recovery prospects. ReoStar filed for Chapter 11
bankruptcy protection (Bankr. N.D. Tex. Case No. 10-47176) on
Nov. 1, 2010.
Bankruptcy Judge D. Michael Lynn presides over the case. Bruce W.
Akerly, Esq., and Arthur A. Stewart, Esq., at Cantey Hanger LLP,
in Dallas, represent the Debtors in their restructuring efforts.
Greenberg Taurig, LLP, serves as special corporate/securities
counsel. Reostar Energy disclosed $15,335,337 in assets and
$16,391,412 in liabilities.
ReoStar Energy's bankruptcy case is jointly administered with
ReoStar Gathering, Inc., ReoStar Leasing, Inc., and ReoStar
Operating, Inc. ReoStar Energy is the lead case.
No trustee was appointed in the Debtors' cases. On Jan. 10, 2011,
Michael McConnell was appointed as Chapter 11 examiner.
ReoStar filed for bankruptcy a few weeks after BT and MK Energy
and Commodities LLC, a Delaware Limited Liability Corporation
comprised of two members, BancTrust International, Inc., and MK
Oil Ventures LLC, accelerated a Union Bank note and issued a
foreclosure notice. BTMK acquired full interest in ReoStar's $25
million line of credit from Union Bank. Earlier in 2010, BT and
MK Capital expressed interested in investing in ReoStar and in
acquiring the line of credit for that purpose. Roughly
$10.8 million of the Union Bank loan were then outstanding, and
Union Bank assigned the loan to BTMK for roughly $5.4 million.
REOSTAR ENERGY: Court Revokes Order Lifting Automatic Stay
----------------------------------------------------------
The Bankruptcy Court vacated its order granting in part amended
motion for relief from automatic stay with joinder of receiver for
Michael Kenwood Group, filed by BT and MK Energy and Commodities,
LLC.
In an order dated Jan. 18, 2012, the Court modified the automatic
stay to allow BTMK to foreclose all of its liens on the property
of the Debtors. The Court also directed the Debtors to retain
$300,000 of their cash on hand.
On Feb. 15, 2012, a hearing was held on the motion for new trial
and reconsideration on the Court's order filed by ReoStar Energy
Corporation, ReoStar Gathering, Inc., ReoStar Leasing, Inc.,
ReoStar Operating, Inc., and Russco Energy LLC. The Court found
at the hearing that if the Debtors, Russco or any other third
party posted a bond, including a cash bond or any form of cash
equivalents, in an amount of $2.16 million on or before Feb. 29,
2012, then the Court would revoke the lift stay order. Because
Russco posted a cash bond on the Bond Deadline, the Court vacated
the lift stay order effective as of the Bond Deadline.
About ReoStar Energy
Fort Worth, Texas-based ReoStar Energy Corporation is engaged in
the exploration, development and acquisition of oil and gas
properties, primarily located in the state of Texas. The Company
owns roughly 9,000 acres of leasehold, which include 5,000 acres
of exploratory and developmental prospects as well as 4,000 acres
of enhanced oil recovery prospects. ReoStar filed for Chapter 11
bankruptcy protection (Bankr. N.D. Tex. Case No. 10-47176) on
Nov. 1, 2010.
Bankruptcy Judge D. Michael Lynn presides over the case. Bruce W.
Akerly, Esq., and Arthur A. Stewart, Esq., at Cantey Hanger LLP,
in Dallas, represent the Debtors in their restructuring efforts.
Greenberg Taurig, LLP, serves as special corporate/securities
counsel. Reostar Energy disclosed $15,335,337 in assets and
$16,391,412 in liabilities.
ReoStar Energy's bankruptcy case is jointly administered with
ReoStar Gathering, Inc., ReoStar Leasing, Inc., and ReoStar
Operating, Inc. ReoStar Energy is the lead case.
No trustee was appointed in the Debtors' cases. On Jan. 10, 2011,
Michael McConnell was appointed as Chapter 11 examiner.
ReoStar filed for bankruptcy a few weeks after BT and MK Energy
and Commodities LLC, a Delaware Limited Liability Corporation
comprised of two members, BancTrust International, Inc., and MK
Oil Ventures LLC, accelerated a Union Bank note and issued a
foreclosure notice. BTMK acquired full interest in ReoStar's $25
million line of credit from Union Bank. Earlier in 2010, BT and
MK Capital expressed interested in investing in ReoStar and in
acquiring the line of credit for that purpose. Roughly
$10.8 million of the Union Bank loan were then outstanding, and
Union Bank assigned the loan to BTMK for roughly $5.4 million.
RIVER CREE: Defaults $111-Million Loan, Faces Bankruptcy
--------------------------------------------------------
CBC News reports that the River Cree Casino in Edmonton, Alberta,
is on the verge of bankruptcy and is scrambling to find alternate
financing to keep operating because of a funding dispute with the
province.
CBC News relates that court documents showed the casino, owned in
part by the Enoch Cree band, has defaulted on a $111-million loan.
The casino does not have enough money to continue operating, the
report relays.
"As the loans were not repaid, (the casino) is faced with a
potential filing under one or more of the Bankruptcy and
Insolvency Act or the Companies' Creditors Arrangement Act and
finds itself in the current situation due to Alberta's refusal to
date" to approve the release of funds, according to CBC News.
The casino is operated by Paragon Gaming on behalf of the Enoch
Cree First Nation, the report discloses.
CBC News notes that in an affidavit filed in court Thursday,
Paragon president Scott Menke blames the casino's financial
problems on the as yet unexplained refusal by the provincial
department of Intergovernmental, International and Aboriginal
Relations (IIAR) to approve a new funding agreement between the
province, the band and Paragon through what's known as the First
Nations Development Fund (FNDF).
"It came as a complete surprise," Paragon president Scott Menke
told CBC News in a phone interview from Las Vegas. "With little
or no consultation, the government could seemingly put Western
Canada's most successful casino operation in a position where they
are actually defaulting on a loan.
"We defaulted not because of any financial situations but because
in the last year of working with the government they would not
accept our current loan application again for the next five years
but have continued to screw us around so we had no choice but to
miss our deadline loan payment of April 16th and are now in
default," CBC News quotes Mr. Menke as saying.
SAN ANTONIO INDEMNITY: A.M. Best Lowers FSR to 'B'
--------------------------------------------------
A.M. Best Co. has downgraded the financial strength rating to B
(Fair) from B+ (Good) and issuer credit rating to "bb" from
"bbb-" of San Antonio Indemnity Company (San Antonio, TX). Both
ratings have been placed under review with negative implications.
The rating downgrades are the result of San Antonio's deteriorated
and unfavorable risk-adjusted capitalization, following volatility
in its underwriting performance in recent years. The company
suffered another year of large weather-related underwriting losses
in 2011, following similar losses in recent years due to frequent
and severe weather events in Texas. San Antonio also strengthened
its loss and loss adjustment expense reserves at year-end 2011.
These factors contributed to sharp decline in policyholder surplus
in 2011, both in relation to year-end 2010 and to projections
previously provided by San Antonio. The company also aggressively
grew its premium base in 2011, which along with the surplus
decline, resulted in elevated underwriting leverage measures and
risk-adjusted capitalization that is no longer supportive of a
secure rating level.
In response, San Antonio is streamlining its product offerings and
adjusting rates. In addition, the company is currently pursuing
capital raising initiatives, with the expectation of capital
infusion in the near term. The under review with negative
implications status reflects A.M. Best's concerns with San
Antonio's ability to stabilize its risk-adjusted capitalization in
the near term. It is expected that A.M. Best will resolve the
under review status upon the final determination of the company's
capital raising initiatives. If a capital infusion is not
completed in the near term, further downward rating pressure would
be imminent.
SAVANNAH OUTLET: Hires Colliers as Leasing Broker
-------------------------------------------------
Savannah Outlet Shoppes, LLC, sought and obtained permission from
the Bankruptcy Court to employ Colliers International-Savannah,
LLC, as a leasing broker to market its commercial shopping center
located in Savannah, Georgia, to prospective tenants including,
but not limited to, Krishna Groceries.
The Debtor has reached an agreement with Colliers whereby the
sales commission for Colliers for the leasing of space in the
Shopping Center for tenants, without the assistance of another
broker representing the tenant other than Ashley Smith of
Colliers, will be 5% of the total value of the initial term of the
lease. If there is a cooperating broker, other than Ashley Smith
of Colliers representing the tenant, the leasing commission will
be 6% of the total value of the lease.
To the best of the Debtor's knowledge, Colliers does not hold any
disqualifying interest adverse to the Debtor or its estate in the
matters upon which Colliers is to be engaged.
About Savannah Outlet Shoppes
Claremont, California-based Savannah Outlet Shoppes, LLC, owns and
operates a business related to the management and leasing of a
commercial shopping center located in Savannah, Georgia.
Savannah Outlet filed for Chapter 11 bankruptcy protection (Bankr.
S.D. Ga. Case No. 10-42135) on Oct. 4, 2010. Karen F. White,
Esq., at Cohen Pollock Merlin & Small PC, represents the Debtor.
The Debtors' professionals include Bulovic Law Firm, LLC, as local
co-counsel, and Steven H. Spears as accountant. The Debtor
estimated assets and debts at $10 million to $50 million.
SAVANNAH OUTLET: Case Dismissed; To Sell Shopping Center
--------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Georgia
dismissed the Chapter 11 case of Savannah Outlet Shoppes, LLC,
effective as of the first business day following the sale under
power to be conducted by Comm 2006-C8 Gateway Limited Partnership
pursuant to the Deed to Secure Debt and Security Agreement, dated
Sept. 29, 2006. The property subject to the Security Deed is
generally known as the Savannah Festival Outlet Center.
Comm 2006-C8 sought dismissal of the Debtor's case asserting that
it is a two party case and that the Debtor has taken too long to
file a chapter 11 plan and disclosure statement. Comm 2006-C8
claims to hold a first priority debt deed on the Debtor's real
estate securing a claim of approximately $9.5 million.
The Debtor initially opposed the Motion to Dismiss. At the
hearing held on April 17, 2012, the Debtor and Comm 2006-C8
resolved their dispute which resulted in the Debtor consenting the
dismissal of its bankruptcy case.
Pursuant to the parties' agreement, the Debtor will cease, as of
Oct. 31, 2011, accumulating the five percent reserve provided for
in the Cash Collateral Order. The accumulated amount of that
reserve, $75,471 as of October 31, plus the remaining proceeds of
the preference settlement with Robert Knudsen previously approved
by the Court, will be applied by the Debtor to pay all unpaid
professional fees and all timely filed proofs of claim. Upon
dismissal, the net balance remaining from the original $75,471
reserve and the Knudsen preference recovery may be retained by the
Debtor, free and clear of any claims by Lender.
Within five days after dismissal of this case, the civil action
filed in the State Court of Chatham County, No. STCV1 1-00338FO,
by Lender against Guiseppe Fusco will be dismissed without
prejudice.
The Court authorized the use of cash collateral through the
effective date of the dismissal.
The confirmation hearing on the Debtor's First Amended Chapter 11
Plan was dismissed as moot.
About Savannah Outlet Shoppes
Claremont, California-based Savannah Outlet Shoppes, LLC, owns and
operates a business related to the management and leasing of a
commercial shopping center located in Savannah, Georgia.
Savannah Outlet filed for Chapter 11 bankruptcy protection (Bankr.
S.D. Ga. Case No. 10-42135) on Oct. 4, 2010. Karen F. White,
Esq., at Cohen Pollock Merlin & Small PC, represents the Debtor.
The Debtors' professionals include Bulovic Law Firm, LLC, as local
co-counsel, and Steven H. Spears as accountant. The Debtor
estimated assets and debts at $10 million to $50 million.
SAVTIRA CORPORATION: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: Savtira Corporation
aka Savtira Corporation of Delaware
2101 E. Palm Avenue
Tampa, FL 33605
Bankruptcy Case No.: 12-06471
Chapter 11 Petition Date: April 27, 2012
Court: United States Bankruptcy Court
Middle District of Florida (Tampa)
Judge: Catherine Peek McEwen
Debtor's Counsel: Vincent B. Lynch, Esq.
VINCENT LYNCH, PA
201 E Kennedy Blvd, Suite 950
Tampa, FL 33602
Tel: (813) 992-7717
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $10,000,001 to $50,000,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by Terrance F. Taylor, vice president and
treasurer.
SBMC HEALTHCARE: Files for Chapter 11 in Houston
------------------------------------------------
SBMC Healthcare, LLC, filed a bare-bones Chapter 11 petition
(Bankr. S.D. Tex. Case No. 12-33299) in its hometown in Houston,
Texas, on April 30, 2012.
SBMC Healthcare estimated assets of up to $50 million and debts of
up to $10 million. The Debtor said in the petition that it owns
property which can function as a hospital.
The Debtor says that the location of the principal assets is in
8850 Longpoint Road, in Houston. This is the address of Quest
Diagnostics Spring Branch Patient Services Center, according to
Google Maps.
The Debtor is 100% owned by McVey & Co. Investments LLC.
According to Chron.com, the Spring Branch Medical Center closed in
2010 after more than 50 years in operation. The property was
later purchased by McVey & Co. and was scheduled to reopen as an
acute care facility in spring of 2011.
SELECT MEDICAL: S&P Raises Corporate Credit Rating to 'B+'
----------------------------------------------------------
Standard & Poor's Ratings Services raised its 'B' corporate credit
rating on Mechanicsburg, Penn.-based Select Medical Corp. to 'B+'.
"At the same time, we raised our issue-level rating on Select's
senior secured term loan and revolving credit facility to 'BB'
from 'BB-'. The '1' recovery rating on these notes is unchanged,
in accordance with our notching criteria for a '1' recovery
rating, indicating our expectation for very high (90%-100%)
recovery in the event of a payment default," S&P said.
"We are raising our issue-level debt rating on the senior floating
rate notes due 2015 issued by Select Medical Holdings Corp to 'B-'
from 'CCC+'. The recovery rating of '6' on these notes remains
unchanged as per our notching criteria for a '6' recovery rating
which indicates our expectation for negligible (0%-10%) recovery
in the event of a payment default. This action primarily is based
on a modest revision to our base case scenario, which includes an
increase in our EBITDA margin estimate of 40 basis points and a
firmer conviction that the leverage will be sustained at or below
4.5x," S&P said.
"The ratings upgrade on Select Medical reflects the reduction in
the company's debt leverage to 4.5x as Dec. 31, 2011; our view
that it will remain at or below that level in 2012 on better
reimbursement prospects; and our confidence that the company is
committed to this level," said Standard & Poor's credit analyst
David Peknay. "The ratings reflect our assessment of the company's
business risk profile as 'weak' and the financial risk profile as
'highly leveraged'. We expect Select will remain subject to
significant reimbursement risk, particularly from the government
as Medicare generates about half of the company's total revenues.
However, the April 24, 2012, proposal by the Centers for Medicare
& Medicaid Services (CMS) stating it projects long-term, acute-
care (LTAC) payments increasing by about 1.9% in fiscal 2013
somewhat eases near-term reimbursement risk. We expect Select's
total revenue to increase by about 5.5% in 2012, a much smaller
increase than the 17% growth in 2011 as the Regency acquisition is
now fully incorporated into the revenue base. We expect low
single-digit increases in both admissions and rates to drive a 6%
growth in specialty hospital division revenue, and growth in its
contract service business to contribute to an estimated 4% revenue
growth in outpatient rehabilitation revenue. We expect Select's
lease-adjusted EBITDA margin to decrease about 50 basis points to
14.8% in 2012 to reflect increased infrastructure investments and
the difficulty of managing operating costs to meet relatively low
rate increases."
"We view Select's financial risk profile as 'aggressive' reflected
in our calculation of debt to EBITDA of about 4.5x in 2011 with
our expectation that it remains near that level in 2012. We expect
our revenue growth estimates coupled with our anticipated margin
decline to drive a small 3% increase in EBITDA. We expect Select
to generate about $120 million of discretionary cash flow in 2012,
but believe it will be used mostly to fund share repurchases. We
believe Select's relatively shareholder-friendly policy will take
priority over repaying debt," S&P said.
SELKIRK TRADING: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Selkirk Trading LLC
P.O. Box 1502
Spokane, WA 99210
Bankruptcy Case No.: 12-01972
Chapter 11 Petition Date: April 27, 2012
Court: U.S. Bankruptcy Court
Eastern District of Washington (Spokane/Yakima)
Debtor's Counsel: Brett T. Sullivan, Esq.
SULLIVAN STROMBERG, PLLC
827 W. 1st Avenue, Suite 425
Spokane, WA 99201-3914
Tel: (509) 413-1004
Fax: (509) 413-1078
E-mail: bretts@sullivanstromberg.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Robert C. Brewster, Jr.,
manager/member.
SINO-FOREST: Files Change of Auditor Notice
-------------------------------------------
Sino-Forest Corporation it has filed the attached Change of
Auditor Notice on Sedar in accordance with National Instrument 51-
102 together with a letter from its former auditor, Ernst & Young
LLP, confirming that it is in agreement with the statements
contained in the notice that relate to Ernst & Young LLP.
On April 4, Ernst & Young said it is resigning, effective
immediately, partly because Sino still couldn't resolve
outstanding issues in relation to its 2011 annual financial
statements.
The auditor's announcement came just a few hours before the
Toronto Stock Exchange announced that it will delist shares of
Sino-Forest, as of May 9.
About Sino-Forest Corp.
Sino-Forest Corporation -- http://www.sinoforest.com/-- is a
commercial forest plantation operator in China. Its principal
businesses include the ownership and management of tree
plantations, the sale of standing timber and wood logs, and the
complementary manufacturing of downstream engineered-wood
products. Sino-Forest also holds a majority interest in
Greenheart Group Limited, a Hong-Kong listed investment holding
company with assets in Suriname (South America) and New Zealand
and involved in sustainable harvesting, processing and sales of
its logs and lumber to China and other markets around the world.
Sino-Forest's common shares have been listed on the Toronto Stock
Exchange under the symbol TRE since 1995.
Sino-Forest Corporation on March 30, 2012, obtained an initial
order from the Ontario Superior Court of Justice for creditor
protection pursuant to the provisions of the Companies' Creditors
Arrangement Act.
Under the terms of the Order, FTI Consulting Canada Inc. will
serve as the Court-appointed Monitor under the CCAA process and
will assist the Company in implementing its restructuring plan.
Gowling Lafleur Henderson LLP is acting as legal counsel to the
Monitor.
During the CCAA process, Sino-Forest expects its normal day-to-
day operations to continue without interruption. The Company has
not planned any layoffs and all trade payables are expected to
remain unaffected by the CCAA proceedings.
SMF ENERGY: Sun Coast Agrees to Pay $9 Million for Texas Business
-----------------------------------------------------------------
SMF Energy Corp. has a deal for Sun Coast Resources Inc. to buy
the business in Texas for $9 million plus the value of inventory,
absent higher and better offers. SMF is asking the bankruptcy
judge to arrange a hearing on May 2 for approval of auction and
sale procedures. Sun Coast will be the stalking horse bidder at
the auction. The company wants the sale completed by the end of
May.
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 filed for bankruptcy reorganization when the lender Wells
Fargo Bank. The bank is owed $11.2 million, including $8 million
on a revolving credit secured by all assets.
SNEAKERS SOFTWARE: Case Summary & 17 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Sneakers Software Inc.
519 8th Avenue, Suite 812
New York, NY 10018
Bankruptcy Case No.: 12-11784
Chapter 11 Petition Date: April 30, 2012
Court: U.S. Bankruptcy Court
Southern District of New York (Manhattan)
Judge: James M. Peck
Debtor's Counsel: Jonathan S. Pasternak, Esq.
RATTET PASTERNAK, LLP
550 Mamaroneck Avenue, Suite 510
Harrison, NY 10528
Tel: (914) 381-7400
Fax: (914) 381-7406
E-mail: jsp@rattetlaw.com
- and ?
Julie A. Cvek, Esq.
RATTET PASTERNAK, LLP
550 Mamaroneck Avenue, Suite 510
Harrison, NY 10528
Tel: (914) 381-7400
Fax: (914) 381-7406
E-mail: jcvek@rattetlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 17 largest unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/nysb12-11784.pdf
The petition was signed by Paul Greenman, CEO.
SNOKIST GROWERS: To Sell Assets on Piecemeal Basis
--------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Snokist Growers will sell the assets on a piecemeal
basis after efforts failed at finding a buyer to continue
operating the business. The business will be sold in several
lots, enabling purchasers to bid on the cannery and its equipment
separate from the warehouse. Trucks, packaging material and
finished goods will be sold separately. Potential buyers are
invited to inspect the property by May 3. A hearing is set for
May 7 where the bankruptcy judge will consider approving the sale.
Previously, potential going-concern buyers were Truitt Brothers
Inc. and Del Monte Corp.
About Snokist Growers
Headquartered in Yakima, Washington Snokist Growers --
http://www.snokist.com/-- is a century-old cooperative of fruit
growers. Snokist provides fresh and processed pears, apples,
cherries, plums, and nectarines.
Snokist Growers filed for Chapter 11 bankruptcy (Bankr. E.D. Wash.
Case No. 11-05868) on Dec. 7, 2011, with plans to liquidate after
sales couldn't recover from allegations that it violated food-
safety rules. Judge Frank L. Kurtz presides over the case.
Lawyers at Bailey & Busey LLC serve as the Debtor's counsel. In
its petition, the Debtor scheduled $69,567,846 in assets and
$73,392,906 in liabilities. The petition was signed by Jim Davis,
president.
Counsel for lender Rabo AgriFinance, as agent for itself and
KeyBank, is James Ray Streinz, Esq., at McEwen Gisvold, LLP.
Counsel for KeyBank National Association is Bruce W. Leaverton,
Esq., at Lane Powell, P.C., in Seattle.
Robert D. Miller Jr., the United States Trustee for Region 14,
appointed three unsecured creditors to serve on the Official
Committee of Unsecured Creditors of Snokist Growers. The
Committee is represented by Metiner G. Kimel, Esq., at Kimel Law
Offices.
Keybank is represented by Bruce W. Leaverton, Esq., and Tereza
Simonyan, Esq., at Lane Powell PC.
SUNOCO INC: Moody's Retains Ba1 Corp Family Rating on $5.3BB Deal
-----------------------------------------------------------------
Moody's Investors Service affirmed Energy Transfer Partners,
L.P.'s (ETP) ratings and placed Sunoco Logistics Partners L.P.
(SXL) ratings under review for downgrade. These actions were in
response to ETP's announcement that it will acquire SXL's parent,
Sunoco, Inc. (SUN), in a transaction valued at $5.3 billion.
Moody's maintained ETP's negative outlook on its Baa3 senior
unsecured note rating. Moody's affirmed SUN's Ba1 Corporate Family
Rating (CFR) and Ba2 senior unsecured note rating but changed
SUN's outlook to developing from stable. The Ba1 CFR on ETP's
general partner (GP), Energy Transfer Equity, L.P. (ETE),
currently under review for possible downgrade, was unaffected by
the rating action.
Ratings Rationale
Continuation of ETP's negative outlook reflects its ongoing
elevated debt leverage in excess of 4.5x EBITDA, and uncertainty
over the leverage and operating risk implications of further
potential asset reconfigurations emanating from the March 26, 2012
closing of ETE's acquisition of Southern Union Company (SUG, Baa3
negative). Concerns related to leverage and structural complexity
have been exacerbated by ETP's announcement that it will acquire
SUN.
Following the anticipated closing of the SUN acquisition later
this year, ETP's largely natural gas-oriented infrastructure asset
base will be supplemented by the inclusion of SXL's liquids-
dominated logistics assets, increasing 2012's estimated cash flow
derived by ETP from liquids-oriented infrastructure to
approximately 30% on a pro forma basis. However, notwithstanding
the positive attributes afforded by the diversification and
incremental cash flow attained through this acquisition, the
already highly complex ETE structural organization will become
that much more complex as a result of this acquisition, and
pressure on cash distributions and ongoing financing requirements
within the ETE family will continue.
SXL's review for downgrade reflects Moody's expectation that under
the management of ETP, SXL's current 2.8x debt leverage will
increase as its organic growth prospects are likely to be financed
with a higher debt component, and its conservative cash
distribution policy could become more aggressive. Moreover, the
review reflects the impact of the pending change from SUN as its
GP with roughly $2 billion in cash to potentially support SXL's
growth initiatives, to ETP as GP, a more highly levered,
aggressively managed owner with its own very substantial cash
needs. However, it is likely that any downgrade in SXL's senior
unsecured rating would be limited to one notch to Baa3, since its
credit is well supported by a high quality portfolio of largely
fee-based energy infrastructure assets.
ETP intends to acquire 100% of the outstanding shares of SUN whose
retail refined product marketing assets will remain owned and
operating by SUN as a wholly owned subsidiary of ETP. SUN also
owns the 2% GP interest in SXL, 100% of its incentive distribution
rights (IDRs) and a 32.4% limited partnership (LP) interest in
SXL, which will remain a separate, publically traded master
limited partnership (MLP).
The $5.3 billion transaction consideration will consist of 50% ETP
common units and 50% cash, with approximately $2 billion of that
cash sourced from SUN's projected cash balances, the remainder to
be funded through ETP's $2.5 billion revolving credit facility.
SUN's existing $965 million of senior notes will remain
outstandinhg. With the expiration in November 2012, or possible
earlier termination, of SUN's $800 million secured revolving
credit facility, SUN's Ba2 senior unsecured notes rating could be
upgraded. However, SUN's developing outlook reflects a current
absence of specificity and timing regarding the ultimate
disposition of its unsecured notes as well as the use of its
substantial cash balance to fund much of the cash portion of the
acquisition. This size of this cash balance, resulting in negative
net debt at SUN, further supported its rating.
The evolving nature of asset reconfigurations and financing
requirements among the inter-related entities comprising the
overall ETE family will determine when ETP's outlook can be
stabilized. ETP's Baa3 rating continues to be supported by its
sizable asset footprint and record of equity issuance to support
growth projects and acquisitions. However, its rating could be
lowered if it fails to achieve debt leverage at or below 4.5x
EBITDA on a sustained basis, the prospects for which in 2012 are
now less clear because of this latest acquisition. Additionally,
should ETP embark on another sizable acquisition in the near
future, its Baa3 rating would be placed in greater jeopardy.
The principal methodology used in rating Energy Transfer Partners
was the Global Midstream Energy Industry Methodology published in
December 2010. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
Energy Transfer Partners, L.P. is a publicly traded midstream
energy master limited partnership headquartered in Dallas, Texas.
Sunoco, Inc. is petroleum products marketing and distribution
company headquartered in Philadelphia, Pennsylvania. Sunoco
Logistics Partners, L.P. is a publicly traded midstream energy
master limited partnership also headquartered in Philadelphia,
Pennsylvania whose general partner is Sunoco, Inc.
SUNOCO INC: Fitch Affirms 'BB+' IDR Over $5.3BB Acquisition Deal
----------------------------------------------------------------
Following the announced acquisition of Sunoco, Inc (SUN) by Energy
Transfer Partners, L.P. (ETP), Fitch Ratings has taken the
following rating actions: affirmed the Issuer Default Rating (IDR)
for Energy Transfer Partners, L.P. (ETP) at 'BBB-' with a Negative
Outlook; affirmed the IDR for Sunoco Logistics Partners L.P. (SXL)
and, its operating partnership, Sunoco Logistics Partners
Operations L.P. (both entities together referred to as Sunoco
Logistics) at 'BBB' with a Stable Outlook; and affirmed Sunoco,
Inc. (SUN; IDR 'BB+) with a Stable Outlook.
Transaction Overview: Approximately $7.9 billion of outstanding
ETP long-term debt, $965 million of outstanding SUN long-term
debt, and $1.5 billion of Sunoco Logistics long-term debt is
affected by Fitch's rating action.
In the contemplated transaction, ETP will acquire 100% of SUN's
outstanding shares for approximately $50 per share in a
transaction valued at $5.3 billion. The transaction and associated
fees are to be funded with $2.7 billion of ETP common units,
approximately $2 billion of SUN cash, and the remainder drawn
under ETP's existing $2.5 billion credit facility. The acquisition
will be subject to SUN shareholder vote, HSR, and other regulatory
approvals and is expected to close by the fourth quarter of 2012.
Post-closing, SUN will be a 100% owned subsidiary of ETP. SUN owns
the 2% general partnership interest, 100% of the incentive
distribution rights and a 32.4% limited partner interest in SXL.
Rating Rationale for ETP: ETP's rating affirmation considers the
benefits of scale and diversity provided by the SUN acquisition.
It also recognizes the limited amount of new debt required to
complete the transaction and modestly favorable impact on its
leverage metrics. The SUN acquisition will change ETP's cash flow
mix by adding crude oil, refined products and retail operations.
It will expand and enhance the services it can provide to
customers. Approximately 29% of estimated 2012 pro forma
consolidated cash flow will now come from NGLs, crude oil, and
refined products. An additional 10% will come from retail
marketing.
ETP's Outlook remains Negative, which reflects its aggressive
acquisition and organic growth activities, the associated
transactional risk, and the impact these activities have on credit
metrics. ETP will continue to have significant future financing
obligations beyond the SUN purchase including capital
contributions to joint ventures. As a result Fitch expects that
ETP's debt to EBITDA to remain over 4.0 times (x) through 2013.
Fitch affirms the following ratings with a Negative Outlook:
Energy Transfer Partners, L.P.
-- IDR at 'BBB-';
-- Senior unsecured debt at 'BBB-'.
Rating Rationale for Sunoco Logistics: The affirmed ratings are
supported by the fact that Sunoco Logistics will not be impacted
from a credit perspective in the near term. It will remain self-
funding standalone MLP. Fitch expects that the company will have
additional opportunities for growth with ETP as its sponsor given
its significant size and scope. Furthermore, Sunoco Logistics will
be able to increase its asset diversity and as well as its
geographic diversity.
Concerns include possible changes such as a more aggressive
business strategy or financial practices with the new ownership.
Catalysts which could prompt negative rating action include a
change in Sunoco Logistics' financial policies such as funding
growth with debt which could result in significantly higher
leverage. Fitch believes that Sunoco Logistics will maintain
conservative financial policies but that they may evolve.
Leverage at Sunoco Logistics has been decreasing and adjusting for
$250 million of debt maturities in February 2012; it was 2.8x at
the end of 2011. This is well below leverage of 3.3x at yearend
2010. Fitch believes leverage will be return to over 3.0x at the
end of 2013.
Distribution coverage was strong at 1.8x at the end of 2011 and
well above 1.3x at the end of the prior year. Fitch believes the
current coverage ratio is high and allows for growth in
distributions.
Rating Rationale for SUN:
Sunoco's ratings affirmation is driven by the company's currently
high liquidity; solid adjusted leverage metrics; and ongoing
transition from a manufacturing to a more ratable, distribution
driven business. These factors are balanced by the reduced
business diversification following the SunCoke spin-off, chemicals
asset sales and pending exit from refining; and the increased
structural subordination of debt at the Sunoco parent level to
debt at Sunoco Logistics.
In February, Sunoco laid out a plan for the strategic use of its
cash which included a sizable share repurchase (up to 19.9% of
shares outstanding, approximately $800 million); retirement of
parent level debt (up to $400 million); the setup of a fund to
eliminate environmental remediation liabilities ($200 million-$250
million); prefunding of future retiree medical expenses ($200
million), pension liabilities ($80 million); and an increased
dividend ($17 million). While a number of these initiatives have
been completed, incremental share buybacks and debt repurchases by
Sunoco are expected to be suspended following the acquisition
announcement as Sunoco's cash will be a key funding source for
this transaction. Sunoco's cash and equivalents at Dec. 31, 2011
totaled $2.06 billion.
Potential catalysts for positive ratings actions include
additional debt reductions at the Sunoco level; evidence of
support for Sunoco's credit profile by ETP; or increases in EBITDA
at remaining businesses to support current debt levels. Potential
catalysts for future negative ratings actions include a major
leveraging transaction.
Fitch notes that key covenants in Sunoco's debt restrict the
ability of an acquirer to convey all or substantially all of SUN's
property to an acquirer. These covenants limit ETP's flexibility
to transfer all of SUN's assets within ETP's corporate structure
and may provide incentives for ETP to support SUN's credit profile
in the future.
Fitch affirms the following ratings with a Stable Outlook:
Sunoco Logistics Partners L.P.
-- Long-term IDR at 'BBB'.
Sunoco Logistics Partners Operations L.P.
-- Long-term IDR at 'BBB;
-- Senior unsecured debt at 'BBB';
-- Senior unsecured bank facilities at 'BBB';
-- Short-term IDR at 'F2'.
Sunoco, Inc.
-- IDR at 'BB+';
-- Senior unsecured debt at 'BB+';
-- Senior secured revolver at 'BBB-'.
SUNOCO INC: S&P Puts 'BB+' CCR on Watch Positive over $5.3BB Deal
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed Energy Transfer
Partners L.P.'s (ETP) 'BBB-' corporate credit rating and revised
its outlook to stable from negative. "We also placed the 'BB+'
corporate credit rating on Sunoco Inc. on CreditWatch with
positive implications. In addition, we placed the 'BBB' corporate
credit rating on Sunoco Logistics Partners L.P. on CreditWatch
with negative implications. We affirmed the 'BB' corporate credit
rating on Energy Transfer Equity L.P. (ETE) and maintained the
stable outlook," S&P said.
"We have reviewed the $5.3 billion transaction and believe it will
be slightly positive for ETP's credit risk profile because it is
broadly neutral to the company's debt leverage measures. At the
same time it would extend ETP's scale and enhance its competitive
position across the natural gas, oil, and natural gas liquids
(NGL) value chain. The contribution from ETP's challenged
intrastate natural gas business will also notably decrease and be
replaced by unoco's more stable crude oil and refined products
transportation assets. ETP's EBITDA base will grow materially to
about $3 billion with its overall cash flow diversity notably
improving, too. The transaction does, however, lend further
credence to ETP's highly aggressive growth strategy and that of
the ETE family of companies as a whole. ETP will fund the purchase
with 50% common units and 50% cash. Sunoco's $965 million of debt
will remain outstanding," S&P said.
"The CreditWatch listings on Sunoco and Sunoco Logistics reflect
our expectation that their corporate credit ratings will be in
line with that of ETP. Sunoco will be a wholly owned subsidiary,
with ETP's management controlling Sunoco and exerting significant
control over Sunoco Logistics, given its role as general partner.
ETP will in essence control Sunoco Logistics as its general
partner and its role on the company's board of directors. ETE also
ultimately controls Sunoco Logistics, through ETP, so we feel its
rating is limited to 'BBB-'," S&P said.
"There is no effect on our rating and outlook on ETE. ETE's debt
leverage measures will improve slightly given the Sunoco addition.
However, the improvement is not sufficient to warrant a higher
rating or positive outlook at this time. We expect ETE's credit
measures to remain appropriate for the rating. We expect ETE's
stand-alone debt/EBITDA to be about 3.5x in 2013 versus previous
expectations of 3.75x. We also expect ETE's consolidated
debt/EBITDA to be just over 5x in 2013 versus previous
expectations of about 5.5x," S&P said.
TELESAT CANADA: Moody's Rates $700MM Notes 'B3'; Outlook Stable
---------------------------------------------------------------
Moody's Investors Service rated Telesat Canada's proposed US$700
million senior unsecured notes issue B3. The company's corporate
family rating (CFR) and probability of default rating (PDR) are
B1, its senior secured bank credit facility is rated Ba3, its
senior subordinated notes are rated B3 and its speculative grade
liquidity rating is SGL-3 (adequate). Telesat's ratings outlook is
stable.
Telesat has launched a new notes issue to fund a concurrently
announced tender offer. The proposed transaction is ratings
neutral as there no change to total debt (the transaction
contemplates issuing $700 million of new notes to replace $692.8
million of existing notes). Accordingly, since the new notes are
the same seniority/class as the notes they replace, they are rated
at the same B3 level as the notes they replace. All of the
company's other ratings remain unchanged.
The following outlines the rating action and summarizes Telesat's
current ratings:
Issuer: Telesat Canada
Rating Assignments:
Senior Unsecured Regular Bond/Debenture: Assigned B3 (LGD5, 83%)
Rating and Outlook Listing:
Corporate Family Rating: Unchanged at B1
Probability of Default Rating: Unchanged at B1
Speculative Grade Liquidity Rating: Unchanged at SGL-3
Outlook: Unchanged at Stable
Senior Unsecured Regular Bond/Debenture: Unchanged at B3 (LGD5,
83%) and to be withdrawn in the normal course upon completion of a
pending tender offer
Senior Subordinated Bond/Debenture: Unchanged at B3 (LGD6, 93%)
Ratings Rationale
Telesat's B1 ratings stem from a moderately aggressive debt load,
a solid business profile, and uncertainties stemming from mid-term
refinance activities as wells as future investment return
considerations of the company's owners. Financial leverage is
somewhat elevated as a consequence of a debt-financed ownership
change, significant capital expenditures, and a $700 million
special dividend (pro form Debt-to-EBITDA will be 6.4x,
incorporating Moody's standard adjustments). However, the
company's strong business profile, featuring a stable contract-
based revenue stream with a seven-year equivalent revenue backlog
of $5.5 billion that is booked with well-regarded customers,
provides a solid positive consideration. The special dividend
(most of which was paid during the first quarter of 2012) is part
of a refinancing transaction that, in turn, resulted from a
prolonged strategic reassessment initiated by Telesat's owners.
While no additional dividends (or share repurchases, etc.) are
currently planned, Moody's thinks that there is the potential of
subsequent periodic strategic reassessments as ownership looks for
investment returns in advance of a permanent ownership structure
developing. In addition, since the company's new credit facilities
contain springing maturity dates in the event that junior ranking
capital is not refinanced prior to its stated maturities, the
structure amplifies the impact of mid-term refinance risks.
Rating Outlook
Given expectations of leverage declining over the next two years
back into the mid 5x range (from a pro forma starting point of
6.4x), the outlook is stable.
What Could Change the Rating - Up
Presuming solid industry fundamentals, good execution and solid
liquidity, Telesat's rating could be considered for upgrade if
Moody's expected Debt/EBITDA to be less than 5.0x with Free Cash
Flow to Debt in excess of 7.5% (in both cases, on a sustained
basis and incorporating Moody's standard adjustments). Since the
existing private equity ownership constrains the rating, a
prerequisite to an upgrade would also likely involve a stable
ownership structure.
What Could Change the Rating - Down
Telesat's rating could be considered for downgrade if Moody's
expected Debt/EBITDA to be greater than 6.0x with Free Cash Flow
to Debt less than 2.5% (in both cases, on a sustained basis and
incorporating Moody's standard adjustments). Poor industry
fundamentals, execution or deteriorating liquidity could also
cause adverse ratings actions.
The principal methodology used in rating Telesat Canada was the
Global Communications Infrastructure Industry Methodology
published in June 2011. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
TELLICO LANDING: Wants Stookbury's Motion to Dismiss Denied
-----------------------------------------------------------
Tellico Landing, LLC, asks the Court to deny the motion of Robert
T. Stooksbury, Jr., to dismiss the Chapter 11 bankruptcy case and
disallow the Debtor from obtaining additional financing.
Mr. Stooksbury, a creditor and member of Tellico Landing, asserts
in its motion that the Managing Member or the Chief Manager lacked
the authority to file bankruptcy petition on behalf of the Debtor
because the Operating Agreement contained a language explicitly
prohibiting the manager from taking those actions.
Contrary to Mr. Stooksbury's assertion, the Debtor contends that
the Managing Member or the Chief Manager had the authority to file
a bankruptcy petition on behalf of the Debtor under the Operating
Agreement.
Concerning the authority to enter into DIP financing, the Debtor
maintains that the Operating Agreement allows the managing member
or the chief manager to to enter into the proposed DIP financing.
According to the Debtor the Managing Member has broad authority
under Section 8.1 "to conduct and manage the business and affairs
of the Company and authorize it to take all actions, and enter
into all transactions which it deems reasonably necessary,
advisable or convenient to the development of the Project and
fulfillment of the business interests of the Company."
About Tellico Landing
Tellico Landing, LLC, based in Maryville, Tennessee, is engaged in
the development and sale of an upscale residential community along
and near Tellico Lake known as "Rarity Pointe". The Company filed
for Chapter 11 bankruptcy (Bankr. E.D. Tenn. Case No. 11-33018) on
June 27, 2011. The case has been assigned to Judge Marcia
Phillips Parsons. Thomas Lynn Tarpy, Esq., of Hagood Tarpy & Cox
PLLC, represents the Debtor. The Debtor scheduled $40,444,352 in
assets and $8,532,455 in liabilities. The petition was signed by
Michael L. Ross, its chief manager.
TENET HEALTHCARE: S&P Retains 'BB-' Rating on $1.04-Bil Notes
-------------------------------------------------------------
Standard & Poor's Ratings Services said its ratings on Tenet
Healthcare Corp.'s senior secured and senior unsecured debt remain
unchanged following a $141 million add-on to the company's 6.25%
senior secured notes due 2018, and a $150 million add-on to its 8%
senior notes due 2020. "The issue-level rating on the senior
secured notes is 'BB-' (two notches above our 'B' corporate credit
rating on the company) with a recovery rating of '1', indicating
our expectation of very high (90% to 100%) recovery for
noteholders in the event of a payment default. The issue-level
rating on the senior notes is 'CCC+' (two notches lower than the
corporate credit rating) with a recovery rating of '6', indicating
our expectation of negligible (0% to 10%) recovery for noteholders
in the event of a payment default. These add-ons would bring the
total size of this senior secured issue to $1.04 billion and the
size of this senior note to $750 million. The company plans to use
proceeds from the notes to repay about $299 million of its
outstanding 7% mandatory convertible preferred stock. Since we
already consider the preferred stock as debt according to our
criteria, these add-ons do not change the amount of debt we
consider in our analysis," S&P said.
"The corporate credit rating on Tenet is 'B' and the rating
outlook is stable. The rating reflects our assessment of Tenet's
financial risk profile as 'aggressive' and its business risk
profile as 'weak,'" S&P said.
"Our assessment of Tenet's financial risk profile as aggressive
reflects debt to EBITDA of about 4.6x and our view that Tenet's
limited upside earnings potential and weak cash flow may limit
debt reduction. Further contributing to this expectation is the
company's share repurchase activity in the absence of any
appreciable cash flow which suggests it may not be committed to
further improvement its financial risk profile," S&P said.
"Our assessment of Tenet's business risk profile as weak reflects
its relatively sizable portfolio of 50 hospitals but also
considers the risks of uncertain reimbursement, significant
uncompensated care, relatively weak patient volume trends, and
concentration in certain markets, many of which are competitive.
At the same time, we believe weak economic conditions will
continue to exert pressure on Tenet's payor mix, limiting its
ability to improve its EBITDA margins much beyond the current mid-
12% area," S&P said.
RATINGS LIST
Tenet Healthcare Corp.
Corporate Credit Rating B/Stable/--
Senior Secured
$1.04 bil 6.25% nts due 2018 BB-
Recovery Rating 1
Senior Unsecured
$750 mil 8% senior notes due 2020 CCC+
Recovery Rating 6
TENNESSEE GAS: S&P Puts 'BB' Corp. Credit Rating on Watch Positive
------------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB' corporate
credit and issue-level ratings on natural gas transport company
Tennessee Gas Pipeline Co. (TGP) on CreditWatch with positive
implications.
"The rating action follows Kinder Morgan Inc.'s announcement that
it intends to drop down 100% of TGP and a portion of pipeline
company El Paso Natural Gas Co. to master limited partnership
Kinder Morgan Energy Partners L.P. (KMP) so KMP can replace cash
flow-producing assets it is required to divest--Kinder Morgan
Interstate Gas Transmission, the Trailblazer pipeline, its 50%
interest in Rockies Express Pipeline Co., and certain processing
and treating facilities in Wyoming--as part of a regulatory
condition for the approved merger with El Paso Corp.," S&P said
"We expect to equalize TGP's ratings with those of KMP because TGP
will become a wholly owned subsidiary of KMP when the sale is
complete," said Standard & Poor's credit analyst Michael Grande.
"We expect to resolve the positive CreditWatch listing when KMI
completes the transaction, which we expect to occur in the third
quarter of 2012," S&P said.
THELEN LLP: Trustee No Right for Fee Claim, Robinson & Cole Says
----------------------------------------------------------------
Max Stendahl at Bankruptcy Law360 reports that Robinson & Cole LLP
told a New York federal judge Friday that Thelen LLP's bankruptcy
trustee had no right to recover legal fees earned by nine former
Thelen partners who decamped for Robinson & Cole and took their
unfinished work with them.
Law360 says the firm moved to dismiss a suit by Thelen trustee
Yann Geron challenging a waiver adopted by Thelen partners when
the firm dissolved in October 2008.
About Thelen LLP
Thelen LLP, formerly known as Thelen Reid Brown Raysman & Steiner
-- http://thelen.com/-- is a bicoastal American law firm in
process of dissolution. It was formed as a product between two
mergers between California and New York-based law firms, mostly
recently in 2006. Its headcount peaked at roughly 600 attorneys
in 2006, and had 500 early in 2008, with offices in eight cities
in the United States, England and China.
As reported by the Troubled Company Reporter on Sept. 22, 2009,
Thelen LLP filed for Chapter 7 protection, after its partnership
agreed to dissolve the Company. The filing was expected due to
the timing of a writ of attachment filed by one of Thelen's
landlords, entitling the landlord to $25 million of the Company's
assets. The landlord won approval for that writ in June 2009, but
Thelen could void the writ by filing for bankruptcy within 90 days
of that court ruling. Thelen, according to AM Law Daily, has
repaid most of its debt to its lending banks.
TIMMINCO LTD: CCAA Stay Period Extended to June 20
--------------------------------------------------
Timminco Limited and its wholly-owned subsidiary Becancour Silicon
Inc. disclosed that in connection with the proceedings commenced
by the Company under the Companies' Creditors Arrangement Act on
Jan. 3, 2012, the Ontario Superior Court of Justice has granted an
order extending the CCAA stay of proceedings from April 30, 2012
to June 20, 2012.
The extension, of approximately eight weeks, provides additional
time for the Company and the successful bidders of the Company's
assets and business, including the transactions announced by the
Company on April 26, 2012, to address the applicable closing
conditions, including Court approval of such transactions.
About Timminco
Timminco produces silicon metal for the chemical (silicones),
aluminum and electronics/solar industries, through its 51%-owned
production partnership with Dow Corning, known as Quebec Silicon.
Timminco is also a producer of solar grade silicon, using its
proprietary technology for purifying silicon metal, for the solar
photovoltaic energy industry, through Timminco Solar, a division
of its wholly owned subsidiary Becancour Silicon.
Timminco Limited and its wholly-owned subsidiary, Becancour
Silicon Inc. on Jan. 2, 2012, commenced proceedings under the
Companies' Creditors Arrangement Act. Pursuant to the initial
order, FTI Consulting Canada Inc. has been appointed as monitor in
the CCAA proceedings.
TIMMINCO LTD: QSI Partners, FerroAtlantica Win in Auction
---------------------------------------------------------
Timminco Limited and its wholly-owned subsidiary Becancour Silicon
Inc. disclosed the results of the Auction held in respect of the
sale of its business and assets, in connection with the
proceedings commenced by the Company under the Companies'
Creditors Arrangement Act on Jan. 3, 2012 in the Ontario Superior
Court of Justice.
The Company has selected a combination of the following two bids
as the Successful Bid:
-- the Portion Bid submitted by QSI Partners Ltd., a
subsidiary of Globe Specialty Metals, Inc., in respect
of substantially all of the silicon metal business and
assets of Becancour Silicon, including its
51% ownership interest in Quebec Silicon Limited
Partnership, for a cash purchase price of
approximately $31.9 million; and
-- the Portion Bid submitted by Grupo FerroAtlantica
S.A., in respect of substantially all of the solar
grade silicon business and assets of
Timminco Solar, a division of Becancour Silicon, for a
cash purchase price of approximately $2.7 million (the
"FerroAtlantica Bid").
The aggregate cash purchase price of the GSM Bid and the
FerroAtlantica Bid combined is approximately $34.5 million,
subject to working capital adjustments. Both bids are subject to
customary conditions, including Court approval, and will terminate
on July 1, 2012 unless closing has occurred prior to such date.
In addition, the Company has selected as the Back-Up Bid a
combination of the Portion Bid submitted by Wacker Chemie AG as
purchaser, in respect of substantially the same assets as the GSM
Bid, and the FerroAtlantica Bid. The Company will proceed with
the Back-Up Bid if it is unable to close the Successful Bid.
The GSM Bid also provides for an additional $2.5 million of
debtor-in-possession financing for the Company, in the event the
closing has not occurred by June 8, 2012. QSI Partners Ltd. is
the lender of the Company's existing US$4.25 million DIP facility.
The Successful Bid and the Back-Up Bid were selected, in
consultation with the Monitor, following completion of the Auction
held in accordance with the Bidding Procedures. Court approval of
the Successful Bid and the Back-Up Bid is required before any of
such bids are deemed to be accepted by the Company.
"We are very pleased with the results of the auction," said Mr.
Douglas A. Fastuca, Chief Executive Officer of the Company.
"Globe, FerroAtlantica and Wacker are all high quality companies,
and leaders in the silicon metal industry. We look forward to
working closely with Globe and FerroAtlantica, and all key
stakeholders in the Company, as we prepare for the closing of the
transaction and transition of the business over the next couple of
months. Finally, I would like to thank all other bidders that
participated in the marketing process."
The Bidding Procedures, as well as details of the marketing
process and other information about the CCAA Proceedings are
available on the Monitor's website, at:
http://cfcanada.fticonsulting.com/timminco. Capitalized terms
used herein not otherwise defined are as defined in the Bidding
Procedures approved by the Court on March 9, 2012.
About Timminco
Timminco produces silicon metal for the chemical (silicones),
aluminum and electronics/solar industries, through its 51%-owned
production partnership with Dow Corning, known as Quebec Silicon.
Timminco is also a producer of solar grade silicon, using its
proprietary technology for purifying silicon metal, for the solar
photovoltaic energy industry, through Timminco Solar, a division
of its wholly owned subsidiary Becancour Silicon.
Timminco Limited and its wholly-owned subsidiary, Becancour
Silicon Inc. on Jan. 2, 2012, commenced proceedings under the
Companies' Creditors Arrangement Act. Pursuant to the initial
order, FTI Consulting Canada Inc. has been appointed as monitor in
the CCAA proceedings.
TRIDENT MICROSYSTEMS: Shareholders Target Semiconducter Firm NXP
----------------------------------------------------------------
Katy Stech at Dow Jones' DBR Small Cap reports that minority
shareholders of Trident Microsystems Inc. -- a California
electronics supplier that sold its operations in bankruptcy --
want to question top executives at Netherlands semiconductor giant
NXP B.V. to determine whether the manufacturer drained Trident's
finances of more than $400 million.
About Trident Microsystems
Sunnyvale, California-based Trident Microsystems, Inc., currently
designs, develops, and markets integrated circuits and related
software for processing, displaying, and transmitting high quality
audio, graphics, and images in home consumer electronics
applications such as digital TVs, PC-TV, and analog TVs, and set-
top boxes. The Company has research and development facilities in
Beijing and Shanghai, China; Freiburg, Germany; Eindhoven and
Nijmegen, The Netherlands; Belfast, United Kingdom; Bangalore and
Hyderabad, India; Austin, Texas; and Sunnyvale, California. The
Company has sales offices in Seoul, South Korea; Tokyo, Japan;
Hong Kong and Shenzhen, China; Taipei, Taiwan; San Diego,
California; Mumbai, India; and Suresnes, France. The Company also
has operations facilities in Taipei and Kaoshiung, Taiwan; and
Hong Kong, China.
Trident Microsystems and its Cayman subsidiary, Trident
Microsystems (Far East) Ltd. filed for Chapter 11 bankruptcy
protection (Bankr. D. Del. Lead Case No. 12-10069) on Jan. 4,
2011. Trident said it expects to shortly file for protection in
the Cayman Islands.
Judge Christopher S. Sontchi presides over the case. Lawyers at
DLA Piper LLP (US) serve as the Debtors' counsel. FTI Consulting,
Inc., is the financial advisor. Union Square Advisors LLC serves
as the Debtors' investment banker. PricewaterhouseCoopers LLP
serves as the Debtors' tax advisor and independent auditor.
Kurtzman Carson Consultants is the claims and notice agent.
Trident had $310 million in assets and $39.6 million in
liabilities as of Oct. 31, 2011. The petition was signed by David
L. Teichmann, executive VP, general counsel & corporate secretary.
US AIRWAYS: Moody's Assigns 'B3' Rating to Class C Certificates
---------------------------------------------------------------
Moody's Investors Service assigned Ba2, B2 and B3 ratings,
respectively, to the Class A, Class B and Class C Pass Through
Certificates, Series 2012-1 (the "Certificates") of the 2012-1
Pass Through Trusts that US Airways, Inc. ("US Airways") will
establish. Moody's affirmed the Caa1 Corporate Family and
Probability of Default ratings assigned to US Airways Group, Inc.
and other of its ratings assigned to the company's debt or
equipment trust certificates. Moody's also downgraded its ratings
assigned to certain of US Airways or America West Airlines, Inc.'s
Enhanced Equipment Trust Certificates ("EETCs") due to its
estimates of weakening loan to values. The downgrades are
reflected in the accompanying debt list. Issuer: US Airways, Inc.
Assignments:
Series 2012-1 Enhanced Equipment Trust
Class A Certificates Assigned Ba2
Class B Certificates Assigned B2
Class C Certificates Assigned B3
Downgrades:
Series 2001-1 Enhanced Equipment Trust
Class G Certificates to B1 from Ba3
LGD Assessments:
Senior Secured Term Loan B, Changed to LGD3, 36% from
LGD3, 38%
Senior Unsecured Revenue Bonds, Changed to LGD5, 87% from
LGD5, 89%
Issuer: America West Airlines, Inc.
Downgrades:
Series 1998-1 Enhanced Equipment Trust
Class A Certificates to Ba3 from Ba1
Class B Certificates to B3 from B1
Series 1999-1 Enhanced Equipment Trust
Class G Certificates to B1 from Ba3
Series 2000-1 Enhanced Equipment Trust
Class G Certificates to B1 from Ba3
Ratings Rationale
The proceeds of the Series 2012-1 Certificates will fund the
purchase of equipment notes to be issued by US Airways for 14
aircraft: two Airbus A321-200s originally delivered to US Airways
in 2009 and twelve new Airbus A321-200 aircraft to be delivered in
2012 or 2013. Existing financing on the two 2009 aircraft will be
refinanced by this transaction. The payment obligations of US
Airways will be guaranteed by its parent, US Airways Group, Inc.
Amounts due under the respective Certificates will be subordinated
to any amounts due on the separate Class A and Class B Liquidity
Facilities ("Liquidity Facility"). Natixis, S.A., acting through
its New York Branch ("Natixis") will provide each of the liquidity
facilities for the Class A and Class B Certificates. There will
not be a liquidity facility for the C-Tranche. Natixis will also
serve as the Depositary.
The ratings of the Certificates consider the credit quality of US
Airways as obligor of the underlying equipment notes, Moody's
opinion of the collateral protection of the Notes, the credit
support provided by the liquidity facilities, the applicability of
Section 1110 of Title 11 of the United States Code (the "Code") to
the equipment notes, and certain structural characteristics of the
Certificates such as the cross-collateralization and cross-default
features. The assigned ratings reflect Moody's opinion of the
ability of the Pass-Through Trustees to make timely payment of
interest and the ultimate payment of principal on the final
scheduled regular distribution date of October 1, 2024.
Moody's estimate of the loan-to-value of the Certificates is in
line with those of US Airways' Series 2010-1 and Series 2011-1
EETCs. Moody's estimates the initial loan-to-value of the tranches
at above 60%, 80% and 95%, respectively based on its estimates of
market values and before applying its LTV benefit for cross-
collateralization. Notably, unlike the recent US Airways'
predecessor transactions, Series 2012-1 will not finance any wide-
body aircraft. Moody's believes that the inclusion of wide-body
aircraft, particularly new deliveries, strengthens the probability
of a Section 1110(a) election under a reorganization scenario.
Nevertheless, the ratings assignment for 2012-1 reflects the
relatively high probability of affirmation under a reorganization
scenario. The aircraft in the 2012-1 EETC will be the youngest in
the airline's fleet. Additionally, this aircraft model is likely
to be a stalwart in US Airways' fleet for years to come, with its
higher gauge and ability to replace the B757-200s the company
operates. Moody's applied a one percentage point LTV benefit for
cross-collateralization because of the relatively few aircraft of
only one type.
Any combination of future changes in the underlying credit quality
or ratings of US Airways, unexpected material changes in the
market value of the A321-200 aircraft and/or changes in the status
or terms of the liquidity facilities or the credit quality of the
liquidity provider could cause Moody's to change its ratings of
the Certificates.
The affirmation of the Caa1 Corporate Family and Probability of
Default ratings considers the company's adequate liquidity, weak
credit metrics and ongoing headwinds from elevated fuel prices.
The ratings also reflect potential event risk with US Airways'
recent announcement that it has reached agreements with certain of
the labor unions that presently represent certain of the
workgroups at American Airlines, Inc. ("American", rating
withdrawn). This was done as part of US Airways attempt to have
the Committee of Unsecured Creditors of American Airlines (in
bankruptcy) put forth a competing plan of reorganization that
would contemplate a merger with US Airways.
The downgrade of the ratings on the previously issued US Airways
and AWA EETC's reflects Moody's belief that the market values of
older A320 family aircraft that comprise the collateral of these
financings have meaningfully declined. In particular, the market
values of the A319 (the smaller variant of Airbus' A320 family)
have faced pressure over the past year, reflecting weakened demand
and lease rates for these airplanes relative to the competing
Boeing model, the B737-700. Moody's notes that the impending
introduction of competing-gauge airplanes (COMAC's C919, Irkut's
MS-21) as well as the re-engined Airbus NEO and Boeing MAX models
later this decade will likely continue to cause downward pressure
on the values of the older-technology Airbus airplanes flying with
less fuel efficient engines.
The principal methodology used in rating US Airways was the Global
Passenger Airlines Industry Methodology published in March 2009
and Enhanced Equipment Trust And Equipment Trust Certificates
published in December 2010. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
US Airways Group, Inc., based in Tempe, Arizona, through its
subsidiaries, operates one of the largest airlines in the U.S.
with service throughout the U.S. as well as Canada, Mexico,
Europe, the Middle East, the Caribbean, Central and South America.
US AIRWAYS: S&P Assigns 'B+' Rating on $124.9-Mil. Class B Certs.
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'BBB'
(sf) rating to Tempe, Ariz.-based US Airways Inc.'s $379.785
million series 2012-1 Class A pass-through certificates, with an
expected maturity of Oct. 1, 2024. "At the same time, we assigned
our preliminary 'B+' (sf) rating to the $124.958 million Class B
pass-through certificates, with an expected maturity of Oct. 1,
2019. We assigned our preliminary 'B' (sf) rating to the $118.636
million Class C pass-through certificates, with an expected
maturity of Oct. 1, 2015. The final legal maturities on the A and
B classes will be 18 months after the expected maturity. The
issues are drawdowns under a Rule 415 shelf registration. We will
assign final ratings once we complete our legal and structural
review," S&P said.
"We base the preliminary 'BBB'(sf), 'B+'(sf), and 'B' (sf) ratings
on US Airways' credit quality, substantial collateral coverage by
good quality aircraft, and on legal and structural protections
available to the pass-through certificates," said Standard &
Poor's credit analyst Betsy Snyder.
"The company will use the proceeds of the offering to refinance
two A321-200 aircraft that were delivered in 2009, and 12 A321-200
aircraft to be delivered in September-December 2012. Each
aircraft's secured notes are cross-collateralized and cross-
defaulted, a provision that we believe increases the likelihood
that US Airways would affirm the notes (and thus continue to pay
on the certificates) in bankruptcy," S&P said.
"The pass-through certificates are a form of enhanced equipment
trust certificates (EETC) and benefit from legal protections
afforded under Section 1110 of the federal bankruptcy code.
Natixis S.A. (A/Stable/A-1) provides a liquidity facility intended
to cover up to three semiannual interest payments on the A and B
classes, a period during which certificateholders could repossess
and remarket collateral following any default by the airline, or
to maintain continuity of interest payments as certificateholders
negotiate with US Airways in a bankruptcy," S&P said.
"The ratings apply to a unit consisting of certificates
representing the trust property and escrow receipts, initially
representing interests in deposits (the proceeds of the
offerings). Natixis S.A. holds the escrow deposits until
US Airways pays off existing debt on the planes (which the company
should accomplish by December 2012). Amounts deposited under the
escrow agreements are not property of US Airways and are not
entitled to the benefits of Section 1110 of the U.S. Bankruptcy
Code. Any default arising solely because of a cross-default
provision may not be of a type required to be cured under Section
1110. Any cash collateral held as a result of the cross-
collateralization of the equipment notes also would not be
entitled to the benefits of Section 1110. Neither the certificates
nor the escrow receipts may be separately assigned or
transferred," S&P said.
"We believe that US Airways views these planes as important and
would, given the cross-collateralization and cross-default
provisions, likely affirm the aircraft notes in a bankruptcy
scenario. In contrast to most EETCs issued before 2009, the cross-
default would take effect immediately in a bankruptcy if US
Airways rejected any of the aircraft notes. This should prevent US
Airways from selectively affirming some aircraft notes and
rejecting others (cherry-picking), which often harms the interests
of certificateholders in a bankruptcy," S&P said.
"We consider the collateral pool of A321-200s to be of good
quality, although with no diversity. The A321-200 is the largest
version of Airbus' popular A320 narrowbody family of planes. The
A321-200 has not been as successful as the A320 or smaller A319
but nonetheless is operated by 65 airlines worldwide, many more
than Boeing's competing B737-900ER (although the latter is a newer
model and thus has had less time to attract orders). Airbus has
announced that it will offer a more fuel-efficient new engine
option (NEO) on its narrowbody planes starting in 2016. It is too
early to tell how popular this option will be, which we believe
will depend largely on how much more expensive the NEO is. If
widely adopted, NEO plane sales could depress residual values of
existing-technology Airbus narrowbody planes. However, this effect
is most likely for older planes in the A320 family (e.g., those
delivered in the 1990s), rather than the recently delivered A321-
200s in the 2012-1 collateral pool," S&P said.
"The initial loan-to-value ratio of the Class A certificates is
52.2%; the Class B certificates, 69.4%; and the Class C
certificates, 85.7%, using the appraised base values and
depreciation assumptions in the offering memorandum. However, we
focused on more conservative maintenance-adjusted appraised values
(not disclosed in the offering memorandum). We also use more
conservative depreciation assumptions for all of the planes than
those in the prospectus. We assumed that, absent cyclical
fluctuations, values of the A321-200s would decline by 6.5% of the
preceding year's value per year. Using these values and
assumptions, the Class A initial loan-to-value is higher, 53.9%,
and rises to about 58% at its highest point before declining
gradually. Using our assumptions, the Class B initial loan-to-
value is about 71.6% and peaks at close to 77% before declining.
Using our assumptions, the Class C initial loan-to-value is close
to 89% and peaks at about 94% before declining," S&P said.
"Our analysis also considered that a full draw of the liquidity
facility, plus interest on those draws, represents a claim senior
to the certificates. This amount is somewhat higher (as a percent
of asset value) than for EETCs that other U.S. airlines issued
recently, and comparable with US Airways' 2011-1 EETC, which
amounted to 8.5%. Initially, a full draw, with interest, is
equivalent to about 8.1% of asset value, using our assumptions,"
S&P said.
"Our corporate credit and other ratings on US Airways Group Inc.
reflect its substantial debt and lease burden, limited (although
improving) liquidity, and participation in the high-risk U.S.
airline industry. The ratings also incorporate the company's
somewhat lower unit operating costs than other legacy airlines. US
Airways is the fifth-largest U.S. airline, carrying about 9% of
industry traffic. We characterize the company's business profile
as vulnerable, its financial profile as highly leveraged, and its
liquidity as adequate," S&P said.
"We expect US Airways' financial profile to remain fairly
consistent through 2012, with EBITDA interest coverage in the mid-
1x area and funds from operations (FFO) to debt in the low-teens
percent area. We believe that an upgrade is not likely over the
next year, but we could raise ratings if FFO to debt increases to
and remains in the high-teens percent area and unrestricted cash
and short-term investments increase to more than $2.5 billion. We
also believe a downgrade is unlikely over the near term. However,
we could lower ratings if a stalled U.S. economic recovery or
serious oil price spike caused losses, eroding liquidity to less
than $1 billion," S&P said.
RATINGS LIST
US Airways Inc.
US Airways Group Inc.
Corporate credit rating B-/Stable/--
Ratings Assigned
US Airways Inc.
Series 2012-1 Class A pass-through certificates BBB(sf)(prelim)
Series 2012-1 Class B pass-through certificates B+(sf) (prelim)
Series 2012-1 Class C pass-through certificates B(sf) (prelim)
VERMILLION INC: Resolves Non-Contingent Claims with Bio-Rad
-----------------------------------------------------------
Vermillion, Inc., said it has resolved all four of the non-
contingent contract claims with Bio-Rad Laboratories, Inc. arising
from the sale to Bio-Rad of Vermillion's protein research tools
and collaborative services business in November 2006.
In exchange for a final settlement of the non-contingent claims,
Bio-Rad will receive $700,000 from an escrow account established
by Vermillion for the sale transaction. Vermillion will be
returned approximately $1,080,000 from the escrow account, with
$50,000 remaining in escrow as security for Bio-Rad's contingent
indemnity claim in respect to the parties' litigation with
Molecular Analytical Systems.
"Given that it returns to us the majority of the $1.8 million
remaining in the escrow account, we view this resolution with Bio-
Rad as very successful," said Gail S. Page, Vermillion's president
and chief executive officer. "Going forward, we can now apply
more resources toward accelerating the commercialization of OVA1?
and the advancement of our product pipeline."
Vermillion sold the assets and liabilities of its protein research
tools and collaborative services business to Bio-Rad in order to
concentrate on developing clinical protein biomarker diagnostic
products and services. In October 2009, Bio-Rad filed a proof of
claim in Vermillion's bankruptcy case for approximately $1
million, based upon four non-contingent contract claims which have
now been resolved. Vermillion had accrued for this contingency in
its financial statements within general and administrative
expense.
About Vermillion
Vermillion, Inc. is dedicated to the discovery, development and
commercialization of novel high-value diagnostic tests that help
physicians diagnose, treat and improve outcomes for patients.
Vermillion, along with its prestigious scientific collaborators,
has diagnostic programs in oncology, hematology, cardiology and
women's health.
The Company filed for Chapter 11 on March 30, 2009 (Bankr. D. Del.
Case No. 09-11091). Vermillion's legal advisor in connection with
its successful reorganization efforts wass Paul, Hastings,
Janofsky & Walker LLP. Vermillion emerged from bankruptcy in
January 2010. The Plan called for the Company to pay all claims
in full and equity holders to retain control of the Company.
After auditing the Company's results for 2011,
PricewaterhouseCoopers LLP, in Austin, Texas, expressed
substantial doubt about Vermillion, Inc.'s ability to continue as
a going concern. The independent auditors noted that the Company
has incurred recurring losses and negative cash flows from
operations and has debt outstanding due and payable in October
2012.
The Company reported a net loss of $17.8 million on $1.9 million
of revenue for 2011, compared with a net loss of $19.0 million on
$1.2 million of revenue for 2010.
The Company's balance sheet at Dec. 31, 2011, showed $23.1 million
in total assets, $12.7 million in total liabilities, and
stockholders' equity of $10.4 million.
VILLA ADVENTURES: Case Summary & 10 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Villa Adventures, L.P.
1926 S. Main St.
Santa Ana, CA 92702
Bankruptcy Case No.: 12-15350
Chapter 11 Petition Date: April 28, 2012
Court: United States Bankruptcy Court
Central District of California (Santa Ana)
Judge: Catherine E. Bauer
Debtor's Counsel: Michael R. Totaro, Esq.
TOTARO & SHANAHAN
P.O. Box 789
Pacific Palisades, CA 90272
Tel: (310) 573-0276
Fax: (310) 496-1260
E-mail: tsecfpacer@aol.com
Scheduled Assets: $2,900,000
Scheduled Liabilities: $6,831,202
A copy of the Company's list of its 10 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/cacb12-15350.pdf
The petition was signed by Charles Rosenbleet, president of
general partner.
W.R. GRACE: To Disclose "Adjusted Free Cash Flow" Measure
---------------------------------------------------------
W. R. Grace & Co. intends to disclose a new non-GAAP cash flow
measure, Adjusted Free Cash Flow, which replaces Grace's
previously disclosed Adjusted Operating Cash Flow, according to
the Company's Form 8-K filing with the Securities and Exchange
Commission on April 2, 2012.
Grace believes that Adjusted Free Cash Flow is now more meaningful
to investors and others than Adjusted Operating Cash Flow.
Grace adopted Adjusted Operating Cash Flow as a performance
measure and incentive compensation measure beginning in 2009
following major developments in its Chapter 11 case during 2008,
including the filing of Grace's Joint Plan of Reorganization in
September 2008. Adjusted Operating Cash Flow was designed to
measure the effectiveness of Grace's businesses in generating cash
to finance current and future growth investments and to finance
Grace's significant asbestos-related liabilities and underfunded
pension liabilities. As of December 31, 2008, Grace estimated its
exit financing requirements to be approximately $1.150 billion and
its U.S. defined benefit pension plans were underfunded by a total
of approximately $486 million. Since then, Grace has generated
significant cash flow and has reduced its estimated exit financing
requirements to less than $600 million and its estimated
underfunded U.S. defined benefit pension plans to less than $250
million, as of the date of this report. Grace has achieved the
objectives Adjusted Operating Cash Flow was designed to measure,
and stopped using Adjusted Operating Cash Flow as a performance
measure and incentive compensation measure in the 2012 first
quarter. Beginning in the 2012 first quarter, Grace intends to
use Adjusted Free Cash Flow together with Net Cash Provided by
Operating Activities to evaluate its cash flow performance.
Adjusted Free Cash Flow is calculated as:
-- Net cash provided by operating activities; minus
-- Capital expenditures; plus
-- Net cash flow from:
* Chapter 11 expenses paid;
* Cash paid to resolve contingencies subject to Chapter 11;
* Accelerated payments under defined benefit pension
arrangements; and
* Expenditures for asbestos-related environmental
remediation.
Chapter 11 expenses paid means cash payments for Grace's Chapter
11 expenses, primarily legal and financial advisory fees.
Cash paid to resolve contingencies subject to Chapter 11 means
cash payments made in settlement of liabilities pursuant to
Bankruptcy Court orders.
Accelerated payments under defined benefit pension arrangements
means cash payments to Grace's defined benefit pension plans in
excess of legally required minimum payments. In March 2011, Grace
made an accelerated contribution to its U.S. defined benefit
pension plans of approximately $180 million. In February 2012,
Grace made an additional accelerated contribution to its U.S.
defined benefit pension plans of approximately $83 million.
Expenditures for asbestos-related environmental remediation means
cash payments made for asbestos-related environmental remediation.
Hudson La Force III, the Company's senior vice president and chief
financial officer, said that these adjustments are made to reflect
the cash flow effects of Grace's Chapter 11 process and asbestos-
related environmental remediation requirements, which are separate
from Grace's business operations. The accelerated pension
contributions are discretionary in the year made and not a fixed
or required cost of Grace's business operations. None of these
items is included by Grace in evaluating its cash flow
performance.
Adjusted Free Cash Flow is a non-GAAP measure. Grace uses
Adjusted Free Cash Flow as a liquidity measure to evaluate its
ability to generate cash to support its ongoing business
operations, to invest in its businesses, and to provide a return
of cash to shareholders. Adjusted Free Cash Flow does not purport
to represent an income or cash flow measure as defined under U.S.
GAAP, and should not be used as an alternative to the measures as
an indicator of Grace's performance. This measure is provided to
investors and others to improve the period-to-period comparability
and peer-to-peer comparability of Grace's financial results and to
ensure that investors understand the information Grace uses to
evaluate the performance of its businesses.
Adjusted Free Cash Flow has material limitations as a liquidity
measure because it excludes the cash flow effects of Chapter 11-
and asbestos-related costs, and any accelerated defined benefit
pension plan contributions, which historically have been material
components of Grace's cash flow. Grace compensates for the
limitations of this measurement by using this indicator together
with Net Cash Flow Provided by Operating Activities as measured
under U.S. GAAP when analyzing its liquidity. Adjusted Free Cash
Flow should be evaluated together with Net Cash Provided by
Operating Activities as measured under U.S. GAAP when evaluating
Grace's financial performance.
Grace will begin reporting Adjusted Free Cash Flow with the
release of earnings information for the 2012 first quarter.
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.
On April 20, 2012, the company filed a motion with the
Bankruptcy Court to approve the definitive agreements among
itself, co-proponents of the Plan, BNSF railroad, several
insurance companies and the representatives of Libby asbestos
personal injury claimants, to settle objections to the Plan.
Pursuant to the agreements, the Libby claimants and BNSF would
forego any further appeals to the Plan.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
W.R. GRACE: Lawsuits Arising From Zonolite Products Pending
-----------------------------------------------------------
Lawsuits arising from Zonolite(R) Attic Insulation, W.R. Grace &
Co.'s former attic insulation product, remains stayed because of
the Company's bankruptcy filing, according to its February 24,
2012, Form 10-K filing with the U.S. Securities and Exchange
Commission for the year ended December 31, 2011.
On April 2, 2001, Grace, along with 61 of its United States
subsidiaries and affiliates, filed voluntary petitions for
reorganization under Chapter 11 of the United States Bankruptcy
Code in the United States Bankruptcy Court for the District of
Delaware. The cases are being jointly administered under case
number 01-01139. The Company's non-U.S. subsidiaries and certain
of its U.S. subsidiaries were not included in the bankruptcy
filing.
The plaintiffs in asbestos property damage lawsuits generally seek
to have the defendants pay for the cost of removing, containing or
repairing the asbestos-containing materials in the affected
buildings. Various factors can affect the merit and value of PD
Claims, including legal defenses, product identification, the
amount and type of product involved, the age, type, size and use
of the building, the legal status of the claimant, the
jurisdictional history of prior cases, the court in which the case
is pending, and the difficulty of asbestos abatement, if
necessary.
Out of 380 asbestos property damage cases (which involved
thousands of buildings) filed prior to the Filing Date, 16 remain
unresolved. Eight cases relate to ZAI and eight relate to a
number of former asbestos-containing products (two of which also
are alleged to involve ZAI).
Approximately 4,300 additional PD claims were filed prior to the
March 31, 2003 claims bar date established by the Bankruptcy
Court. (The March 31, 2003 claims bar date did not apply to ZAI
claims.) Grace objected to virtually all PD claims on a number of
legal and factual bases. As of December 31, 2011, approximately
430 PD Claims subject to the March 31, 2003 claims bar date remain
outstanding. The Bankruptcy Court has approved settlement
agreements covering approximately 410 of such claims for an
aggregate allowed amount of $151.6 million.
Eight of the ZAI cases were filed as purported class action
lawsuits in 2000 and 2001. In addition, 10 lawsuits were filed as
purported class actions in 2004 and 2005 with respect to persons
and homes in Canada. These cases seek damages and equitable
relief, including the removal, replacement and/or disposal of all
such insulation. The plaintiffs assert that this product is in
millions of homes and that the cost of removal could be several
thousand dollars per home. As a result of the bankruptcy filing,
all these cases have been stayed.
Based on Grace's investigation of the claims described in these
lawsuits, and testing and analysis of this product by Grace and
others, Grace believes that ZAI was and continues to be safe for
its intended purpose and poses little or no threat to human
health. The plaintiffs in the ZAI lawsuits dispute Grace's
position on the safety of ZAI. In December 2006, the Bankruptcy
Court issued an opinion and order holding that, although ZAI is
contaminated with asbestos and can release asbestos fibers when
disturbed, there is no unreasonable risk of harm from ZAI. In the
event that Grace's Joint Plan of Reorganization does not become
effective, the ZAI claimants have reserved their right to appeal
such opinion and order if and when it becomes a final order.
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.
On April 20, 2012, the company filed a motion with the
Bankruptcy Court to approve the definitive agreements among
itself, co-proponents of the Plan, BNSF railroad, several
insurance companies and the representatives of Libby asbestos
personal injury claimants, to settle objections to the Plan.
Pursuant to the agreements, the Libby claimants and BNSF would
forego any further appeals to the Plan.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
W.R. GRACE: Wins Approval of High Point Site Settlement
-------------------------------------------------------
W.R. Grace & Co. and its debtor-affiliates obtained authority from
Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the
District of Delaware to enter into a settlement resolving the U.S.
Government's claim related to the High Point, North Carolina site.
Zonolite operated a vermiculite exfoliation plant at the 2.65-acre
High Point Site as early as 1955. The Debtors operated the
facility from 1963 until 1989. On November 30 and December 1,
2009, the U.S. Environmental Protection Agency and its Superfund
Technical Assistance and Response Team contractor conducted
aggressive air sampling, activity-based air sampling, and bulk
material sampling at the High Point Site. Additional bulk soil
sampling was conducted on March 21, 2011.
On November 29, 2011, the EPA notified the Debtors that it
considered the Debtors to be potentially responsible parties with
respect to removal activities and response costs at the High Point
Site, as well as potentially responsible parties for any and all
other claims, liabilities or obligations of the Debtors to the
Claimant under Section 107(a) of the Comprehensive Environmental
Response, Compensation, and Liability Act and Section 7003 of the
Resource Conservation and Recovery Act. The EPA also notified the
Debtors that it considered the High Point Site to be an
"Additional Site," as that term is defined in EPA's multi-site
agreement resolving the United States Claims regarding certain
environmental matters, dated May 14, 2008.
Since receiving the November 29 notice, the Debtors and the EPA
have cooperated in preparing the Administrative Settlement
Agreement and Order on Consent, which anticipates that the Debtors
will perform removal actions on the Site. Laura Davis Jones,
Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington,
Delaware, relates that the Parties now desire, without any
admission of fact, law or liability, to proceed with a remedy for
environmental remediation of the High Point Site and resolve the
EPA's claims and demands relating to the High Point Site.
The AOC specifically resolves (a) the EPA's claims for the High
Point Site as an Additional Site under the Multi-Site Agreement,
and (b) the demands for performance of or, alternatively payment
of costs associated with, the proposed Work as set forth in the
AOC.
The EPA estimates its cost to perform the remedial actions at the
High Point Site to be approximately $1.7 million. The Debtors'
cost estimate for the same work is estimated to be less than
$1 million. The Debtors have also agreed under the AOC to pay
$131,825 to the EPA for its past response costs incurred through
January 13, 2012. The AOC further provides that the Debtors will
pay EPA's future response costs as they become due, within 30 days
of their having received a bill for the Future Response Costs.
In return for the obligations to be assumed by the Debtors under
the AOC, the Government will provide the Debtors with a covenant
not to sue for matters addressed under the AOC. Additionally, and
also pursuant to the terms of the AOC and the EPA Multi-Site
Agreement, once the EPA issues a Notice of Completion of Work and
the Debtors pay all Response Costs and other amounts required to
be paid under the AOC, the High Point Site removal action will be
considered a general unsecured claim that has been liquidated in
the amount of $0, and to which the Section 1141 discharge of the
Bankruptcy Code will apply.
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.
On April 20, 2012, the company filed a motion with the
Bankruptcy Court to approve the definitive agreements among
itself, co-proponents of the Plan, BNSF railroad, several
insurance companies and the representatives of Libby asbestos
personal injury claimants, to settle objections to the Plan.
Pursuant to the agreements, the Libby claimants and BNSF would
forego any further appeals to the Plan.
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)
WAGSTAFF MINNESOTA: Court Approves M. Green as Accountant
---------------------------------------------------------
The Bankruptcy Court authorized Wagstaff Minnesota, Inc., et al,
to employ M. Green and Company LLP as their independent certified
public accountant.
MG & Co. will:
(a) review of the Debtors' balance sheets and related
statements of operations, changes in equity, cash flows,
and supplementary information for the year ending Dec. 31,
2011; and
(b) issue accountants' reports in accordance with Statements on
Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants.
The Debtors will pay the firm in accordance with its hourly rates:
Professional Hourly Rate
------------ -----------
Marla D. Borges, CPA $190
Nicole Centofanti, CPA $116
Mary Quillin $104
Brenda Daddino, CPA $86
Cliff Ingram $69
Sherie Schaff $74
Carol Greeson $70
Kendra Nunes $57
In addition to hourly fees, the Debtors will reimburse MG & Co.
for any reasonable and necessary expenses for report reproduction,
word processing, postage, travel, copies, and telephone charges.
About Wagstaff Properties
Hanford, California-based Wagstaff Properties LLC and its debtor-
affiliates filed for Chapter 11 protection (Bankr. D. Minn. Case
No. 11-43074) on April 30, 2011. The cases are jointly
administered with Wagstaff Minnesota, Inc. (Case No. 11-43073).
Bankruptcy Judge Nancy C. Dreher presides over the cases.
Fredrikson & Byron, PA, and Peitzman Weg & Kempinsky LLP,
represent the Debtors in their restructuring efforts. Alvarez &
Marsal North America LLC serves as the Debtors' financial advisor.
Trinity Capital, LLC and its affiliated broker-dealer, BWK Trinity
Capital Securities LLC, serve as the Debtors' investment banker
with respect to a sale of their assets. Epiq Bankruptcy Solutions
LLC provides administrative, noticing and balloting services.
Wagstaff Properties estimated assets and liabilities at
$10 million to $50 million.
On June 8, 2011, the U.S. Trustee appointed three member to the
Official Committee of Unsecured Creditors in the Debtors' cases.
Freeborn & Peters LLP and Lommen, Abdo, Cole, King & Stageberg
P.A. serve as the Committee's counsel.
WESCO INTERNATIONAL: S&P Affirms 'BB-' Corporate Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Pittsburgh, Pa.-based WESCO International Inc. to positive from
stable. "At the same time, we affirmed our ratings, including the
'BB-' corporate credit rating and 'B' issue ratings, on the
company and its operating subsidiary," S&P said.
WESCO's credit measures continued to strengthen in the first
quarter of 2012.
"WESCO currently operates at the low end of its leverage target,
and the company's debt capacity has become significant," said
Standard & Poor's credit analyst Gregoire Buet. "We expect that
the company will use its debt capacity to fund growth, but its
reliable cash flow generation allows for debt reduction after an
acquisition."
"WESCO is one of the top five electrical distributors in the U.S.
and serves customers across the construction, industrial,
governmental, and utility infrastructure markets. Electrical
distribution is a highly fragmented market, which can lead to
intense pricing pressures, particularly during periods of weak
demand. Currently, the expanding overall economy and the
increasing use of electrical parts are boosting demand," S&P said.
Improving demand in WESCO's industrial markets have contributed to
revenue and profit growth in the past two years. WESCO also
continues to experience growth in its nonresidential construction
segment despite continued relative weakness in this end market.
WHITE OAK: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: White Oak Development Partners, LLC
aka White Oak Partners
2659 Sandy Plains Road
Tryon, NC 28782
Bankruptcy Case No.: 12-40276
Chapter 11 Petition Date: April 27, 2012
Court: U.S. Bankruptcy Court
Western District of North Carolina (Shelby)
Judge: J. Craig Whitley
Debtor's Counsel: David G. Gray, Esq.
81 Central Avenue
Asheville, NC 28801
Tel: (828) 254-6315
E-mail: judyhj@wgcdlaw.com
Scheduled Assets: $1,017,939
Scheduled Liabilities: $51,625,902
A copy of the Company's list of its 20 largest unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/ncwb12-40276.pdf
The petition was signed by Eugene Kinsella, member/manager.
XINERGY CORP: S&P Cuts Corp. Credit Rating to 'CCC+'; Outlook Neg
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Knoxville, Tn.-based Xinergy Corp. to 'CCC+' from 'B-'.
The rating outlook is negative.
"At the same time, we lowered the issue-level rating on the
company's senior secured notes to 'CCC' from 'B-'. We also revised
our recovery rating on the notes to '5', indicating our
expectation lenders can expect modest (10% to 30%) recovery in the
event of a payment default, from '4'," S&P said.
"We are removing all ratings from CreditWatch, where they were
placed with negative implications on Feb. 24, 2012," S&P said.
"The downgrade reflects our assessment that market demand has
deteriorated such that we expect Xinergy's performance will likely
be materially lower than we previously anticipated," said Standard
& Poor's credit analyst Gayle Bowerman. "We believe that a warmer-
than-normal winter and natural gas substitution have accelerated
what we view as a sustained decline in the economic viability of
thermal coal produced in the Central Appalachian (CAPP) basin. In
addition, fewer production disruptions in Australia and slowing
demand in China and the eurozone have caused metallurgical (met)
coal prices to decline, further pressuring Xinergy's performance.
Based on our expectation that coal markets will be weaker through
2013, we believe that the company's liquidity is likely to
tighten. As a result, we have revised our liquidity assessment to
'less than adequate' from 'adequate' given minimal cash levels
provided from operations and the need to rely on internally
generated cash since the company does not have access to a
revolving credit facility," S&P said.
"Our base-case scenario assumes that Xinergy will sell
approximately 1.5 million tons in 2012, about 25% less than we had
previously estimated. The company has cut its thermal coal
operations and is focusing on met coal production. We expect the
company's revenues will decline about 25% from 2011, with expected
EBITDA of $10 million to $15 million. In March, Xinergy announced
that it negotiated contract buyouts with two major thermal coal
customers, netting it approximately $30 million in cash but
resulting in spot market exposure for its now uncommitted volumes.
In addition, the company's contracted position for its met coal is
minimal and short term in nature," S&P said.
"We expect credit metrics at the end of the year to weaken
meaningfully, with 2012 leverage of more than 15x, funds from
operations (FFO) to total debt of about 5%, and interest coverage
less than 1x. In 2013, we expect similar metrics unless the
company is able to successfully increase met coal production and
sell that production profitably. However, we expect operating
results will likely continue to be under pressure. In our view,
competition from low-cost natural gas, the failure of the company
to produce and sell all of its volumes, an uncertain and volatile
pricing environment, difficult operating conditions, and
escalating costs make significant improvements in Xinergy's
financial condition difficult to attain," S&P said.
"The company is a small producer and currently operates at five
mining complexes (in eastern Kentucky, West Virginia, and
Virginia). It has about 114 million tons of proven and probable
reserves, three-quarters of which are thermal coal and the
remainder is met coal. All of Xinergy's reserves and production
are concentrated in one basin, exposing the company to unfavorable
regional regulation, local transportation disruptions, and
volatile market demand. It expects the majority of its thermal
production in 2012 to come from surface mines, which generally
have lower operating costs. The company also operates a high
volatility met coal mine in Virginia and recently commenced
production at a midvolatility met coal mine in West Virginia.
These mines provide added customer diversity and exposure to the
met coal markets, which are relatively good based on domestic
demand and slower, but still strong, demand from China. Inability
to complete the ramp-up of production at its West Virginia met
mine, higher-than-expected operating or construction costs, or
lower productivity at its existing mines could stress the
company's liquidity and potentially delay its construction plans.
Xinergy is currently relying on balance sheet cash and internally
generated cash flow to finance its growth projects," S&P said.
"The rating on Xinergy reflects our view of the company's
'vulnerable' business risk profile and 'highly leveraged'
financial risk profile. This assessment is driven by its small
size and marginally contracted position, and the regulatory and
operating challenges inherent to operations in CAPP," S&P said.
"The negative rating outlook reflects our view that although the
company's liquidity is sufficient to support it for the next
several months, it will be unable to generate enough cash over the
medium term to cover its financial obligations. It also takes into
account the extremely difficult operating environment for Xinergy
as a small operator in the CAPP basin," S&P said.
"We could lower our rating if the company's liquidity position
deteriorates. This could occur if it unable to bring new
production on line and sell that production profitably or if it is
unable to sell its met coal at attractive margins," S&P said.
"A positive rating action seems unlikely in the near term, given
the challenging operating conditions and weak demand for coal.
However, one could occur if market demand and pricing gained
significant positive momentum such that Xinergy was able to
significantly increase its production, secure long-term contracts
at economic prices for its coal, and improve its liquidity
position. Specifically, we could raise the rating if the company
is able to achieve leverage metrics below 6x and generate positive
free operating cash flow on a sustained basis," S&P said.
* Moody's Sees Low 2011 Not-for-Profit Hospital Revenue Growth
--------------------------------------------------------------
Preliminary financial medians for US not-for-profit hospitals and
health systems for fiscal year 2011 indicate the likelihood of low
revenue growth for the year and tend to confirm the negative
outlook for the sector held by Moody's Investors Service.
"Low revenue growth is due primarily to flat volume trends and
payer pressures," said AVP-Analyst Sarah Vennekotter, author of a
Moody's report on the medians, which are presented by year for
three years, 2009-2011, and by rating category.
Although revenue growth based on the preliminary medians data
shows some improvement to 5.3% from 4.5% the prior year,
Vennekotter explained that this median remains much lower than the
over 7% that was historically typical for the sector.
"Inpatient admissions were again flat in 2011, repeating trends
seen in 2009 and 2010, and will continue to be a factor in our
expectations for lower-than-average revenue growth," said
Vennekotter.
Despite the low growth in top-line revenue, operating performance
showed stability and hospital management teams extracted expense
reductions that resulted in improvement to bottom line
profitability, says Moody's. Also, liquidity measures strengthened
as the capital markets remained relatively strong in 2011 and
hospitals delayed capital spending.
Payer pressure continues to be felt as Medicare and Medicaid now
represent 43.7% and 12.8% of gross patient revenues, respectively,
based on the preliminary median data, and represents an increase
from 42.3% and 11.6% in FY 2009 and 42.5% and 12.2% in FY 2010,
according to Moody's.
The report, "Medians Drive Expectation of Low Revenue Growth Given
Flat Volume Trends, Payer Pressures," voices concern over the rise
in Medicaid as a percentage of gross hospital revenues as numerous
states are making cuts to the program to help balance their
budgets.
"As for Medicare, it is the single largest payer for most
hospitals, and the program continues to grow as the population
ages," said Ms. Vennekotter. "Medicare cuts are part of the 2010
federal healthcare reform, and the federal government will likely
implement more cuts to the program in order to reduce federal
budget deficits."
The report is entitled "Medians Drive Expectation of Low Revenue
Growth Given Flat Volume Trends, Payer Pressures".
* HHS Has Final Say on Medicare Device Coverage, 4th Circ. Says
---------------------------------------------------------------
Maria Chutchian at Bankruptcy Law360 reports that the Fourth
Circuit on Thursday affirmed the U.S. secretary of health and
human services' authority to determine what medical devices
receive coverage from Medicare, ruling a device company's
bankruptcy trustee couldn't challenge the department's refusal to
cover a device that treats osteoarthritis of the knee.
In a published opinion, Law360 relates, the three-judge panel
affirmed a Maryland federal court's decision that the Medicare
Appeals Council could deny coverage for the BioniCare Stimulator
System Model 1000, the osteoarthritis device that delivers
electrical pulses to the joint, to the Chapter 7 trustee.
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
Oct. 14, 2011
AMERICAN BANKRUPTCY INSTITUTE
NCBJ/ABI Educational Program
Tampa Convention Center, Tampa, Fla.
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
Oct. __, 2011
AMERICAN BANKRUPTCY INSTITUTE
International Insolvency Symposium
Dublin, Ireland
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
Oct. 25-27, 2011
TURNAROUND MANAGEMENT ASSOCIATION
Hilton San Diego Bayfront, San Diego, CA
Contact: http://www.turnaround.org/
Nov. 28, 2011
BEARD GROUP, INC.
18th Annual Distressed Investing Conference
The Helmsley Park Lane Hotel, New York City
Contact: 1-240-629-3300
Dec. 1-3, 2011
AMERICAN BANKRUPTCY INSTITUTE
23rd Annual Winter Leadership Conference
La Quinta Resort & Spa, La Quinta, Calif.
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
April 3-5, 2012
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
Grand Hyatt Atlanta, Atlanta, Ga.
Contact: http://www.turnaround.org/
Apr. 19-22, 2012
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center,
National Harbor, Md.
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
July 14-17, 2012
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
The Ritz-Carlton Amelia Island, Amelia Island, Fla.
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
Aug. 2-4, 2012
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hyatt Regency Chesapeake Bay, Cambridge, Md.
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
November 1-3, 2012
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Westin Copley Place, Boston, Mass.
Contact: http://www.turnaround.org/
Nov. 29 - Dec. 2, 2012
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
JW Marriott Starr Pass Resort & Spa, Tucson, Ariz.
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
April 10-12, 2013
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
JW Marriott Chicago, Chicago, Ill.
Contact: http://www.turnaround.org/
October 3-5, 2013
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Wardman Park, Washington, D.C.
Contact: http://www.turnaround.org/
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via
e-mail to conferences@bankrupt.com are encouraged.
Last Updated: Sept. 17, 2011
*********
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
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Each Tuesday edition of the TCR contains a list of companies with
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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
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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
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Marie Varquez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R.
Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo
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Editors.
Copyright 2012. All rights reserved. ISSN: 1520-9474.
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*** End of Transmission ***