/raid1/www/Hosts/bankrupt/TCR_Public/120524.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, May 24, 2012, Vol. 16, No. 143
Headlines
205 EAST: Case Summary & Largest Unsecured Creditors
94TH AND SHEA: Rosso Trustee Objects to Plan-Related Loan
94TH AND SHEA: U.S. Trustee Wants Case Converted to Chapter 7
AFFINITY GAMING: S&P Rates $35MM Revolver & $200MM Term Loan 'BB'
AIDA'S PARADISE: Court OKs Consulting CFO as Financial Advisor
AIDA'S PARADISE: Taps Roy Law Firm as Special Counsel
AMC ENTERTAINMENT: Fitch Affirms Issuer Default Rating at 'B'
AMC ENTERTAINMENT: S&P Puts 'B' Rating on Debt on Watch Developing
AMERICAN AMEX: Wants Sable Palm's Case Dismissal Plea Denied
AMERICAN WEST: FCR James Moore Taps Field Law as Counsel
APEX DIGITAL: U.S. Trustee Wants Case Converted to Chapter 7
ARCH HOSPITALITY: Case Summary & 20 Largest Unsecured Creditors
ASMAR INC.: Case Summary & 6 Largest Unsecured Creditors
AUTOBACS STRAUSS: Court Trims Lawsuit Against Japanese Buyer
BABCOCK & WILCOX: Moody's Retains 'Ba1' CFR, 'Ba2' PDR
BY INVITATION: Case Summary & 2 Largest Unsecured Creditors
CAGLE'S INC: Wants Control of Case Pending Completion of Sale
CHEMICAL COMPOUNDS: Case Summary & 11 Largest Unsecured Creditors
COASTAL REALTY: Case Summary & Largest Unsecured Creditor
COMMANDER PREMIER: Must Reach Deal With Unnamed Buyer by June 19
COMMUNITY MEMORIAL: Med One, Winthrop Resources Want Stay Lifted
CONTRACT RESEARCH: Files Schedules of Assets and Liabilities
CONTRACT RESEARCH: Morris Anderson OK'd as Financial Advisors
DALPHIS HOLDING: Shuts Down Plant, Leaves 75 Workers Jobless
DAVITA INC: Fitch Affirms Issuer Default Ratings at 'BB-'
DECATUR HOTELS: Case Summary & 10 Largest Unsecured Creditors
DESERT HOT SPRINGS: S&P Affirms 'B' Tax Allocation Bond Ratings
DIPPIN' DOTS: Former Office Sold to Fischer for $1.1 Million
DVS SHOE: Seeks Quick $4 Million Sale of Assets
EL PASO: Fitch Keeps Senior Unsecured Notes on Watch Negative
EXOPACK HOLDING: Moody's Lowers CFR to 'B3'; Outlook Negative
FILENE'S BASEMENT: Syms Shareholders Claim Agreement on Plan
FREEMON SHAPARD: Voluntary Chapter 11 Case Summary
FUNERARIA Y CAPILLA: Case Summary & 3 Largest Unsecured Creditors
GEM REFRIGERATOR: Case Summary & 20 Largest Unsecured Creditors
GENERAC POWER: Moody's Affirms 'B2' CFR; Outlook Positive
GENERAL MOTORS: Moody's Affirms 'Ba1' Coro. Family Rating
GIRA POLLI: Case Summary & 15 Largest Unsecured Creditors
GLAZIER GROUP: Court Enters Final Decree Closing the Ch. 11 Case
GREEN ISLAND: Moody's Lowers Rating on Revenue Bonds to 'Ba1'
HARBOUR EAST DEV'T: Court Approves Global Accord With Lender
HARDAGE HOTELS: Amends Schedules of Assets and Liabilities
HARDAGE HOTELS I: Can Hire Haynes and Boone as Chapter 11 Counsel
HARDAGE HOTELS I: Court OKs Cappello & Noel as Litigation Counsel
HARDAGE HOTELS I: Creditors' Panel Wants Brinkman as Counsel
HARDAGE HOTELS I: Gets Nod to Hire Transitional Finance as Advisor
HARDAGE HOTELS I: Has OK to Hire Kemp Smith as Special Counsel
HERCULES PUBLIC: S&P Affirms 'BB' Ratings on Revenue Bonds
HOLDINGS GAMING: Moody's Upgrades Corp Family Rating to 'Caa1'
HOLDINGS GAMING: S&P Puts 'CCC+' Corp. Credit Rating on Watch Pos
HOPE MEDICAL: Has $1.26 Million Loan From IASIS/Wadley
INDIANA FINANCE: S&P Cuts Rating on Revenue Bonds to 'BB+'
INTELLIGRATED INC: Moody's Upgrades CFR to 'B1'; Outlook Stable
JARVIS ADVENTURE: Lawyer Faces Sanctions Over Bankruptcy Filings
JAZZ PHARMACEUTICALS: S&P Assigns 'BB' Corporate Credit Rating
JENNE HILL: Plan Payments to be Funded by Townhome Complex Rentals
KINDER MORGAN: Fitch Puts Rating on $11.8-Mil. Facilities at 'BB+'
KMC REAL ESTATE: iWellness Int'l., et al., Withdraw Plan
KMC REAL ESTATE: Wants Injunction Against RL BB Financial
LA DODGERS: Dewey & LeBoeuf Has Extra Time to File Fee Application
LAS VEGAS MONORAIL: Has Formal Approval to Exit Chapter 11
MASTER SILICON: Incurs $981,000 Net Loss in First Quarter
MASTRO'S RESTAURANTS: S&P Gives 'B-' Rating on $102-Mil. Sr. Notes
MICROVISION INC: Gets Nasdaq Listing Deficiency Notice
MERCHANTS MORTGAGE: Chapter 11 Reorganization Case Closed
MORGAN'S FOODS: Board Amends Articles of Incorporation
MONTANA ELECTRIC: Ch. 11 Trustee Has Access to Cash Until Oct. 31
MORRIER RANCH: US Trustee Fails to Appoint Creditors' Committee
MOUNTAINEER GAS: Fitch Affirms Senior Unsecured Rating at 'BB+'
MSR RESORT: Has Until June 24 to File Reorganization Plan
NEBRASKA BOOK: Has $116 Million Year's Operating Loss
NEWPAGE CORP: 2nd Lien Bondholders Want Lawsuit Unsealed
NEXT 1 INTERACTIVE: Effects a 1-for-500 Reverse Stock Split
OPEN RANGE: Liquidating Trustee Sues One Equity Over Funding
OVERLAND STORAGE: Columbus Capital Ceases to Own 5% Equity Stake
PATIENT SAFETY: Kinderhook Discloses 20.1% Equity Stake
PATRIOT COAL: Hires Blackstone on Debt Refinancing Talks
PHILADELPHIA ORCHESTRA: Inks Amended Lease Deal to Reduce Rent
PINNACLE AIRLINES: Settling with Victims of Buffalo Air Crash
PJ FINANCE: Settlement Agreement with Lexington Insurance Approved
REAL ESTATE ASSOCIATES: No Remaining Investment in Bellair
REDDY ICE: Committee Taps Cox Smith as Local Bankruptcy Counsel
REDDY ICE: Wants KCC to Maintain Bank Account for Rights Offering
RITCHIE RISK-LINKED: U.S. Bank Wins Injunction Over Sold Policy
RIVERGLEN HOMES: Voluntary Chapter 11 Case Summary
ROTHSTEIN ROSENFELDT: 2 Feeder Funds Charged for Ponzi Schemes
RQB RESORT: Plan of Reorganization Declared Effective
SAGAMORE PARTNERS: Exclusive Solicitation Extended to June 30
SAGAMORE PARTNERS: Right to Use Cash Collateral to Expire May 24
SAINT VINCENTS: Wants Deal on Allocation of Sale Proceeds OK'd
SAPPHIRE VP: Taps Johnston Tobey to Handle Winstead Litigation
SAPPHIRE VP: Taps Richard Daly, et al., for ZCA Litigation
SAPPHIRE VP: Wants Cash Collateral to Maintain Sapphire Condos
SAPPHIRE VP: Wants to Hire Hoover Slovacek as Bankruptcy Counsel
SEQUOIA PARTNERS: Wants 90-Day Extension for Disc. Statement
SEVEN SEAS: Moody's Upgrades Ratings on Second Lien Debt to 'B2'
SHEGA INC: Bank Foreclosure Notice Timely Under D.C. Law
SHOPPES OF LAKESIDE: Authorized to Use Ameris Cash Collateral
SHOPPES OF LAKESIDE: Court OKs Jerry Dicht as Public Accountant
SHOPPES OF LAKESIDE: J Properties Withdraws Case Dismissal Plea
SMF ENERGY: Hires Bayshore Partners as Investment Banker
SMF ENERGY: Gets Interim Approval to Employ Kapila & Company
SMF ENERGY: Court OKs Trustee Services Inc. as Claims Agent
SOUTH HARBOUR: Case Summary & 3 Largest Unsecured Creditors
SOUTHERN OAKS: Employs CB Richard Ellis as Real Estate Broker
SP NEWSPRINT: Seeks to Hold Former Supplier in Contempt of Stay
SP NEWSPRINT: Panel Wants to Increase Fixed Fee of BDO Consulting
SPECIALTY PRODUCTS: Panel Taps Motley Rice as Conflicts Counsel
SPECIALTY PRODUCTS: Supports FCR's Plea to Retain Resolutions, LLC
STATE FAIR OF VIRGINIA: Sells Asset to Universal Fair for $5.67MM
STERLING SHOES: Closes Sale of 69 Retail Locations to Town Shoes
SUNRISE REAL ESTATE: Incurs $1.05MM Net Loss in First Quarter
TELKONET INC: Incurs $729,000 Net Loss in First Quarter
THERMOENERGY CORP: Incurs $1.5 Million Net Loss in Q1
THERMOENERGY CORP: Joseph Bartlett Named to Board of Directors
THOR INDUSTRIES: Taps Gregory Shanks as Real Estate Counsel
THOR INDUSTRIES: Can Use TSB Cash Collateral Through May 31
TMP CORPORATION: Case Summary & 20 Largest Unsecured Creditors
TRAINOR GLASS: To Sell Assets in 5 States to Harmon
VILLAGE RESORTS: Can Obtain Postpetition Credit from North Capital
VILLAGE RESORTS: Wants Until June 1 to Propose Chapter 11 Plan
VILLAGE SQUARE: Involuntary Chapter 11 Case Summary
WALLA WALLA: Bankruptcy Filing Stays Foreclosure Action
WAVE2WAVE COMMS: Deals on Adequate Assurance Payment Approved
WAVE2WAVE COMMS: Files Schedules of Assets and Liabilities
WAVE2WAVE COMMS: Gets Final Order to Incur $3.5MM DIP Financing
WAVE2WAVE COMMS: Needs Additional Capital to Consummate Plan
WAVE2WAVE COMMS: Can Hire Cole Schotz as Bankruptcy Counsel
WEST PENN: S&P Cuts Rating on $737-Mil. Series 2007A Bonds to 'B-'
* Lehman Claims Trading Plunges 80% in April
* Moody's Says Growth in Debt of US States Slowed in 2011
* Geoffrey Frankel Joins Huron Consulting as Managing Director
* Recent Small-Dollar & Individual Chapter 11 Filings
*********
205 EAST: Case Summary & Largest Unsecured Creditors
----------------------------------------------------
Debtor: 205 East 45 LLC
aka Alex Hotel
c/o Alexico Group LLC
150 East 58th Street, 33rd Floor
New York, NY 10155
Bankruptcy Case No.: 12-12208
Affiliate that simultaneously filed Chapter 11 petition:
Entity Case No.
------ --------
EALC LLC 12-12209
Chapter 11 Petition Date: May 21, 2012
Court: U.S. Bankruptcy Court
Southern District of New York (Manhattan)
About the Debtors: 205 East 45 LLC and EALC LLC own the Alex Hotel
and the Flatotel in Manhattan. The Alex, at
205 East 45th Street in Manhattan, has 203
luxury hotel rooms and suites and $123 million
in mortgage debt. The Flatotel, at 135 West
52nd Street in mid-town Manhattan, is a 46-
story boutique luxury hotel. The Flatotel has
290 rooms and $245.2 million in mortgages. The
hotels defaulted on mortgage debt in January
2009.
Debtors' Counsel: Brendan M. Scott, Esq.
KLESTADT & WINTERS, LLP
570 Seventh Avenue, 17th Floor
New York, NY 10018
Tel: (212) 972-3000
Fax: (212) 972-2245
E-mail: bscott@klestadt.com
205 East's
Estimated Assets: $50,000,001 to $100,000,000
205 East's
Estimated Debts: $100,000,001 to $500,000,000
EALC LLC's
Estimated Assets: $50,000,001 to $100,000,000
EALC LLC's
Estimated Debts: $100,000,001 to $500,000,000
The petitions were signed by Steven A. Carlson, chief
restructuring officer.
A. 205 East 45's List of Its Two Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
904 Tower Apartment LLC Litigation Undetermined
666 5th Avenue
New York, NY 10103
Madison Apartment 905 LLC Litigation Undetermined
666 5th Avenue
New York, NY 10103
B. EALC LLC's List of Its Five Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Tetra Tech Engineers Trade Debt $276,529
2 Penn Plaza, 3rd Floor
New York, NY 10121
Shelton Mindell & Associates Trade Debt $217,613
56 West 22nd Street, 12th Floor
New York, NY 10010
Constantine Kondylis & Partners Trade Debt $193,675
44 West 28th Street, 16th Floor
New York, NY 10001
Transel Elevator Inc. Trade Debt $91,495
Forensis Law Firm Trade Debt $45,974
94TH AND SHEA: Rosso Trustee Objects to Plan-Related Loan
---------------------------------------------------------
Andrew S. Nemeth, the Chapter 7 Trustee of John W. Rosso, the
principal of 94th and Shea L.L.C., filed a limited objection to a
loan between JAC Arizona Partners LLC, and 94 Hundred Corporate
Centre, LLC, Steven J. Goodhue, and John W. Rosso.
On behalf of the Chapter 7 Trustee, Adam B. Nach, Esq., at Lane &
Nach P.C., contends the members of 94 Hundred are Messrs. Goodhue
and Rosso. Mr. Rosso has assigned all his interest in 94 Hundred
to the Rosso Family Partnership, LLLP, in October 2009. Mr. Rosso
also has assigned all but 18% of his interest in Rosso Partnership
to his sister and two children.
On April 5, 2012, the counsel for the Chapter 7 Trustee informed
the Debtor's counsel, JAC's counsel, and counsel to JPMCC 2007-
CIBC19 Shea Boulevard LLC that Mr. Rosso's ownership interest in
94 Hundred is property of his Chapter 7 Estate, and cannot be
assigned or pledged as part of the loan Messrs. Goodhue and Rosso
are attempting to use as "new value" in the Debtor's Chapter 11
case.
The Chapter 7 Trustee does not take a position or object to JAC
advancing money to the Debtor, or Messrs. Goodhue or Rosso.
Mr. Nach also contends that Mr. Rosso has failed to seek Trustee
or Court authority to act on behalf of 94 Hundred; moreover, Mr.
Rosso has no actual authority to act on behalf of 94 Hundred. Mr.
Rosso's ownership interest in 94 Hundred and Rosso Partnership is
an asset Mr. Rosso owned prior to seeking bankruptcy relief.
About 94th and Shea
Scottsdale, Arizona-based 94th and Shea, L.L.C., owns and operates
real property known as The Shops and Office at 9400 Shea, located
at 9325, 9343, 9375, and 9397 East Shea Boulevard in Scottsdale,
Arizona. The Property consists of 37,037 square feet of retail
space and 35,238 square feet of office space.
94th and Shea filed for Chapter 11 bankruptcy protection (Bankr.
D. Ariz. Case No. 10-37387) on Nov. 19, 2010. John J. Hebert,
Esq., Mark W. Roth, Esq., and Wesley D. Ray, Esq., at Polsinelli
Shughart, P.C., in Phoenix, Ariz., serve as counsel to the Debtor.
The Debtor disclosed $123,588 plus unknown amount in assets and
$22,870,408 in liabilities as of the Chapter 11 filing.
Secured creditor JPMCC 2007-CIBC19 Shea Boulevard, LLC, is
represented by Robert R. Kinas, Esq., Jonathan M. Saffer, Esq.,
and Nathan G. Kanute, Esq., at Snell & Wilmer L.L.P., in Tucson,
Arizona.
94TH AND SHEA: U.S. Trustee Wants Case Converted to Chapter 7
-------------------------------------------------------------
The United States Trustee for the District of Arizona asks the
Bankruptcy Court to convert 94th and Shea, L.L.C.'s Chapter 11
case to a Chapter 7 proceeding.
The U.S. Trustee contends that over the two-year and 5-month
period that the Debtor has remained in bankruptcy, it has failed
to confirm a plan of reorganization. In addition, the Debtor has
failed to properly file the requisite employment applications and
disclosure statements required for its confirmation professionals.
Finally, the Debtor's principal, John Rosso, has entered into a
contract with JAC Arizona Partners LLC, the proposed exit
financing lender, to provide collateral that, at least in part,
does not belong to him.
Larry L. Watson, Esq., representing the U.S. Trustee, notes the
Debtor has been pursuing confirmation of a plan for two years and
five months. On March 22, 2012, the Court entered an Order
granting relief from stay, thereby rejecting the Debtor's plan of
reorganization.
Mr. Watson points out that the lending agreement between the
Debtor's principal John Rosso, Steven J. Goodhue, and the exit
financing lender is defective on its face. First, the lending
agreement requests that Mr. Rosso and Mr. Goodhue certify that the
only members holding equity interests in the entity, 94 Hundred
Corporate Center LLC, are the Rosso Family Partnership and the
Goodhue Family Partnership. In fact, the only members listed in
the Articles of Organization with the Arizona Corporation
Commission for 94 Hundred Corporate Center is Mr. Rosso and Mr.
Goodhue in their personal capacities.
Mr. Watson adds the lending agreement requires Mr. Rosso to attest
as a Borrower that he is not in default on any note, contract,
agreement, lease or other instrument to which he is a party. Mr.
Rosso is in fact currently a chapter 7 debtor who has defaulted on
numerous contracts and agreements, and of which parties have
entered into settlements with him during his chapter 7 proceeding
without having a true understanding of his financial condition.
In the event the Court once again denies confirmation of the
Debtor's plan, Mr. Watson states the primary property of the
Debtor will be foreclosed upon and its ability to reorganize its
financial affairs will be gone. No purpose will remain for the
Debtor to remain in a chapter 11 proceeding.
The hearing on the U.S. Trustee's request is set for May 29, 2012,
at 1:30 p.m.
About 94th and Shea
Scottsdale, Arizona-based 94th and Shea, L.L.C., owns and operates
real property known as The Shops and Office at 9400 Shea, located
at 9325, 9343, 9375, and 9397 East Shea Boulevard in Scottsdale,
Arizona. The Property consists of 37,037 square feet of retail
space and 35,238 square feet of office space.
94th and Shea filed for Chapter 11 bankruptcy protection (Bankr.
D. Ariz. Case No. 10-37387) on Nov. 19, 2010. John J. Hebert,
Esq., Mark W. Roth, Esq., and Wesley D. Ray, Esq., at Polsinelli
Shughart, P.C., in Phoenix, Ariz., serve as counsel to the Debtor.
The Debtor disclosed $123,588 plus unknown amount in assets and
$22,870,408 in liabilities as of the Chapter 11 filing.
Secured creditor JPMCC 2007-CIBC19 Shea Boulevard, LLC, is
represented by Robert R. Kinas, Esq., Jonathan M. Saffer, Esq.,
and Nathan G. Kanute, Esq., at Snell & Wilmer L.L.P., in Tucson,
Arizona.
AFFINITY GAMING: S&P Rates $35MM Revolver & $200MM Term Loan 'BB'
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' issue-level
and '1' recovery ratings to Las Vegas-based Affinity Gaming LLC's
$35 million super priority revolving credit facility and $200
million senior secured term loan, due 2017 and 2019. "The '1'
recovery rating reflects our expectation for very high (90% to
100%) recovery for lenders in the event of a payment default. We
also assigned our 'B' issue-level and '5' recovery ratings to
Affinity's $200 million senior notes due 2020. The '5' recovery
rating reflects our expectation of modest (10% to 30%) recovery
for lenders in the event of a payment default. The company used
proceeds from the debt issuance to repay its previous $350 million
first-lien senior secured term loan and to add cash to the balance
sheet for potential future expansion or acquisition
opportunities," S&P said.
"We recently raised our corporate credit rating on Affinity to
'B+' from 'B'. The upgrade reflected our assessment of Affinity's
improved business profile following the recent asset sale and
purchase transactions. Affinity completed the sale of its
Terrible's Town Casino and Lakeside Casino & RV Park, both located
in Pahrump, Nev., and sold a portion of its route operations to
Golden Gaming Inc. Affinity also purchased three of Golden
Gaming's casinos: Golden Mardi Gras Casino, Golden Gates Casino,
and Golden Gulch Casino, all in Black Hawk, Colo., and is
currently awaiting licensing in Colorado. Additionally, Affinity
sold Terrible's Searchlight Casino and the remainder of its route
business to JETT Gaming LLC. We believe these transactions improve
Affinity's business risk profile by reducing its reliance on
Nevada and providing diversification through exposure to a new
market. Furthermore, the sale of the route business eliminated the
operating lease obligation associated with the route business,
which more than offsets the incremental debt the company will
incur under the refinancing," S&P said.
"Our rating on Affinity reflects our assessment of its financial
risk profile as 'aggressive' and its business risk profile as
'weak,' according to our criteria. Our assessment of Affinity's
financial risk profile as aggressive incorporates our expectation
that leverage will remain in the 4.5x to 5.5x area, pro forma for
the refinancing and recent asset sale and purchase transactions.
Our assessment of the company's business risk profile as weak
reflects its vulnerable Nevada businesses, with limited
competitive advantages and minimal barriers to entry in the
markets they operate. These factors are somewhat tempered by
Affinity's more stable Midwest casino business, which benefits
from more protected market positions that have enabled the
properties to experience limited revenue volatility during the
recent economic downturn, our expectation for the acquired
properties in Colorado to provide greater EBITDA stability
compared with the assets sold in Nevada, and an excess cash
balance that provides a cushion in the intermediate term should
operations decline. Affinity acquired the land and buildings of
three casinos in Black Hawk, Colorado and simultaneously leased
the casinos back to Golden Gaming. This arrangement will remain in
place until Affinity gains approval for gaming licenses in
Colorado. Affinity expects the license approvals in the second
half of 2012," S&P said.
RATINGS LIST
Affinity Gaming LLC
Corporate Credit Rating B+/Stable/--
New Ratings
Affinity Gaming LLC
$35 mil super priority revolver due 2017 BB
Recovery Rating 1
$200 mil senior secured term loan due 2019 BB
Recovery Rating 1
$200 mil senior notes due 2020 B
Recovery Rating 5
Ratings Withdrawn
To From
Affinity Gaming LLC
Senior secured term loan NR BB-
Recovery Rating NR 2
AIDA'S PARADISE: Court OKs Consulting CFO as Financial Advisor
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
granted Aida's Paradise LLC permission to employ Terry J. Soifer
and Consulting CFO, Inc., as its financial advisor, nunc pro tunc
to Jan. 6, 2012.
As reported by the Troubled Company Reporter on Feb. 15, 2012, as
financial advisor, CFO will, among other things, review and
analyze the Debtor's historical books and records and financial
report.
About Aida's Paradise
Based in Maitland, Florida, Aida's Paradise LLC owns roughly three
acres of developed real property on International Drive in
Orlando, Florida. It leases various parcels of the I-Drive
Property to three tenants: Volcano Island Mini Golf, Dunkin Donuts
(aka Jennifer's Donuts), and CBS Outdoor (which operates an
electronic billboard on site).
Aida's Paradise filed for Chapter 11 bankruptcy (Bankr. M.D. Fla.
Case No. 12-00189) on Jan. 6, 2012. Chief Karen S. Jennemann
presides over the case. R. Scott Shuker, Esq., at Latham Shuker
Eden & Beaudine LLP, serves as the Debtor's counsel. The petition
was signed by Dr. Adil R. Elias, manager.
In its schedules, the Debtor disclosed $15.0 million in total
assets and $9.32 million in total liabilities.
AIDA'S PARADISE: Taps Roy Law Firm as Special Counsel
-----------------------------------------------------
Aida's Paradise LLC seeks permission from the U.S. Bankruptcy
Court for the Middle District of Florida to employ William Glenn
Roy, III, and the law firm of The Roy Law Firm, PL, as special
counsel, nunc pro tunc to April 16, 2012.
The Debtor seeks authority to employ RLF as special counsel for
the purpose of continuing representation of Debtor with respect to
collection efforts due under a lease with S.I. Restaurant, Inc.,
and associated guarantor. RLF had been representing the Debtor
since on or about Nov. 16, 2010, with respect to this collection
effort. The Debtor did not pay RLF an advance fee. For the 12
months prior to the commencement the instant case, RLF was paid
approximately $23,000, on a current basis, for work previously
performed for the Debtor.
The terms of employment that are the subject of a contingent fee
agreement between Debtor and RLF, subject to the approval of the
Court, are that services of RLF will be paid up to 35% of the
total gross recovery from any judgment entered. If no recovery is
made, Debtor will not be obligated to pay fees to RLF.
About Aida's Paradise
Based in Maitland, Florida, Aida's Paradise LLC owns roughly three
acres of developed real property on International Drive in
Orlando, Florida. It leases various parcels of the I-Drive
Property to three tenants: Volcano Island Mini Golf, Dunkin Donuts
(aka Jennifer's Donuts), and CBS Outdoor (which operates an
electronic billboard on site).
Aida's Paradise filed for Chapter 11 bankruptcy (Bankr. M.D. Fla.
Case No. 12-00189) on Jan. 6, 2012. Chief Karen S. Jennemann
presides over the case. R. Scott Shuker, Esq., at Latham Shuker
Eden & Beaudine LLP, serves as the Debtor's counsel. The petition
was signed by Dr. Adil R. Elias, manager.
In its schedules, the Debtor disclosed $15.0 million in total
assets and $9.32 million in total liabilities.
AMC ENTERTAINMENT: Fitch Affirms Issuer Default Rating at 'B'
-------------------------------------------------------------
Fitch Ratings has affirmed the Issuer Default Rating (IDR) of AMC
Entertainment, Inc. (AMC) at 'B'. The Outlook remains Negative.
Fitch has affirmed the following ratings
AMC
-- IDR at 'B';
-- Senior secured credit facilities at 'BB/RR1';
-- Senior unsecured notes at 'B-/RR5';
-- Senior subordinated notes at 'CCC/RR6'.
The Outlook is Negative.
On May 20, AMC Entertainment Holdings, Inc. (AMC Parent) announced
it had signed an agreement to be acquired by Dalian Wanda Group
Co. Ltd (Wanda). The transaction is valued at approximately $2.6
billion.
The proposed acquisition will constitute a change of control under
all of AMC's debt agreements. Under the credit agreement, the
acquisition would trigger an event of default. Under the note
indentures (senior unsecured and subordinated), the acquisition
would require the company to make a 101% change of control offer.
Wanda has provided AMC financing commitments to fund any potential
change of control related debt redemptions, if needed. AMC may
seek to fund any debt redemption with its own liquidity or market
issuance.
While change of control payments may be satisfied by financing
provided by Wanda, Fitch believes, depending on the level of debt
redemption, AMC would look to the credit markets to repay a
portion or all of the Wanda loans. Fitch believes any permanent
debt reduction would come from Wanda's intention to invest $500
million into AMC.
Assuming the entire $500 million investment is dedicated towards
debt reduction, Fitch would expect to maintain the current ratings
and outlook. While the debt reduction would be a positive, Fitch
believes leverage and interest coverage would remain weak for the
ratings. The Outlook reflects the weak credit metrics (interest
coverage, EBITDA margins and gross leverage), and the limited
headroom within the current ratings. Improved operating
performance that leads to stronger credit metrics over the next 18
to 24 months may lead to a Stable Outlook. If the upcoming movie
slate and the recent theater portfolio actions are unable to
stabilize and drive improved credit metrics, Fitch may downgrade
the ratings one notch.
Prior to close of the transaction Fitch will seek to understand
more about Wanda's operating and financial strategy for AMC.
Fitch will also seek more information regarding Wanda's financial
condition, sources of funding and its operating and investing
track record. Fitch may withdraw AMC's rating if we deem the
level of disclosure related to Wanda to be insufficient to
maintain a rating on AMC.
Fitch views the transaction as a positive for the credit. Wanda
is a strategic buyer and removes the private equity ownership exit
overhang.
Rating Rationale:
-- Fitch believes movie exhibition will continue to be a key
promotion window for the movie studios' biggest/most
profitable releases.
-- Fitch expects that attendance and box office revenues should
be supported by the 2012 healthy film slate.
-- Fitch notes that concession revenues have grown in the low-
to-mid single digits over the last few years. While Fitch
does not anticipate a significant decline in concession per
patron, Fitch remains cautious that high-margin concessions
(which represent 28% of AMC's total revenues and carry 86%
gross margins), may be vulnerable to reduced per-guest
concession spending due to economic cyclical factors or a re-
acceleration of commodity prices.
-- The ratings factor in the intermediate/long-term risks
associated with increased competition from at-home
entertainment media, limited control over revenue trends, the
pressure on film distribution windows, increasing indirect
competition from other distribution channels (such as VOD,
the Internet and DVD), and high operating leverage (which
could make theater operators free cash flow negative during
periods of reduced attendance).
-- For the long term, Fitch continues to expect that the movie
exhibitor industry will be challenged in growing attendance
and any potential attendance declines will offset some of the
growth in average ticket prices.
-- In addition, AMC and its peers rely on the quality, quantity,
and timing of movie product, all factors out of management's
control.
Liquidity
As of May 20, 2012, liquidity included $272.3 million in cash at
AMC. As of Dec. 29, 2011, AMC had full availability under its
$192.5 million secured credit facility due 2015. The secured
credit agreement contains a secured leverage covenant of 3.25x,
which is calculated on a net basis. Fitch does not believe the
company is at risk of breaching this covenant. Current
amortization on the AMC term loan is $8 million annually.
AMC's next significant maturities include $140 million in
subordinated notes due 2014, approximately $470 million in term
loans due 2016, $300 million term loans due 2018, $600 million in
senior unsecured notes due 2019 and $600 million in subordinated
notes due 2020.
Fitch calculated free cash flow (FCF) for the latest 12 months
(LTM) was a negative $1.2 million. Fitch expects FCF to be
approximately $0 to $25 million for the fiscal years ended 2012
and 2013.
As of Dec. 29, 2011, Fitch calculated interest coverage is 1.5x.
Including the NCM distribution in LTM EBITDA, interest coverage is
1.7x.
Leverage
As of Dec. 29, 2011, Fitch calculates lease adjusted gross
leverage at 6.7x, unadjusted gross leverage at 9.3x and, if the
NCM dividend is included in EBITDA, unadjusted gross leverage is
at 8.4x. Fitch expects unadjusted gross leverage to remain above
7.5x over the next two fiscal year-end periods.
Recovery Ratings
AMC's Recovery Ratings reflect Fitch's expectation that the
enterprise value of the company and, hence, recovery rates for its
creditors, will be maximized in a restructuring scenario (as a
going concern) rather than a liquidation. Fitch estimates an
adjusted, distressed enterprise valuation of $1.2 billion using a
5 times (x) multiple and including an estimate for AMC's 16% stake
in National CineMedia LLC (NCM) of approximately $190 million.
Based on this enterprise valuation, overall recovery for total
debt is approximately 50% (this is before any administrative
claims).
The 'RR1' Recovery Rating for the company's secured bank
facilities reflects Fitch's belief that 91% - 100% expected
recovery is reasonable. While Fitch does not assign Recovery
Ratings for the company's operating lease obligations, it is
assumed the company rejects only 30% of its remaining $2.6 billion
in operating lease commitments due to their significance to the
operations in a going-concern scenario and is liable for 15% of
those rejected values (at a net present value). The 'RR5'
Recovery Ratings for AMC's senior unsecured notes (equal in
ranking to the rejected operating leases) reflect an expectation
of 11%-30% recovery.
Fitch assumes a nominal concession payment is made to the
subordinate debt holders in order to secure their support of a
reorganization plan. The 'CCC/RR6' rating for AMC's senior
subordinated notes reflects Fitch's expectation for nominal
recovery.
AMC ENTERTAINMENT: S&P Puts 'B' Rating on Debt on Watch Developing
------------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B' rating on Kansas
City, Mo.-based movie exhibitor AMC Entertainment Holdings Inc.,
along with all issue-level ratings on its debt, on CreditWatch
with developing implications. "We rate the company on a
consolidated basis with subsidiary AMC Entertainment Inc.," S&P
said.
"The CreditWatch placement is based on the announcement that
Dalian, China-based Dalian Wanda Group Co. Ltd. (unrated), which
is engaged in commercial properties, luxury hotels, tourism
investment, department stores, and cultural businesses has agreed
to purchase AMC to expand its entertainment operations into the
U.S. The acquisition is subject to customary closing conditions
and regulatory approval in China and the U.S. We would expect to
rate AMC on a consolidated basis with Dalian Wanda following the
acquisition. Lacking sufficient information, we will withdraw the
rating," S&P said.
"For the third quarter ended Dec. 29, 2011, revenue and EBITDA
declined 8% and 34%, year over year. We expect the company's
results improved in the fiscal fourth quarter as a result of
strong box-office results. Under our base-case scenario, we expect
revenue to decline at a low-single-digit rate and EBITDA at a mid-
single-digit rate in the fiscal year ending March 2013. Dalian
Wanda is a privately held company. As a result, data were
insufficient to form a view of consolidated pro forma
profitability," S&P said.
"Pro forma for recent refinancing transactions, AMC's stand-alone
leverage was high, at 8.9x on Dec. 29, 2011. We expect leverage
has improved in the company's fiscal fourth quarter as a result of
debt repayment and strong box-office performance. Liquidity is
strong, with $213 million in cash balances and a $192.5 million
undrawn revolving credit facility as of Dec. 29, 2011, which are
key supporting factors for the 'B' rating given the company's
very high leverage. Key elements of the consolidated pro forma
capital structure have not been disclosed; however, we expect
AMC's leverage will likely remain high," S&P said.
"Assuming sufficient information, we will resolve the CreditWatch
listing upon completion of the acquisition," said Standard &
Poor's credit analyst Jeanne Shoesmith, "based on discussions with
management on its financial policy, liquidity and capital
structure for the consolidated entity following the acquisition."
AMERICAN AMEX: Wants Sable Palm's Case Dismissal Plea Denied
------------------------------------------------------------
American Amex, Inc., asks the U.S. Bankruptcy Court for the
District of Oregon to deny Sable Palm Development's motion to
dismiss the Debtor's Chapter 11 case and be granted relief from
stay.
According to the Debtor, among other things:
1. On Sable Palm's assertion that it is the true owner of the
Debtor.
The Debtor asserts that contrary to the position of Sable
Palm, both parties are not bound by the settlement agreement
and judgment, because the same is illegal and void. The
settlement agreement in effect constituted an attempted
illegal forfeiture of the property and a circumvention of
the mandated foreclosure procedure. This was contrary to
law. The Sable Palm obligations were secured by a mortgage,
not a deed of trust or other instrument.
2. On Sable Palm's claims that the case was filed in bad faith.
The Debtor says it filed the bankruptcy in an effort to
repay its creditors in an organized and proper fashion. The
Debtor opted for a chapter 11 instead of a chapter 7 as it
permits the Debtor to control of its own liquidation to
maximize its value.
American Amex, Inc., filed for Chapter 11 protection petition
(Bankr. D. Ore. Case No. 12-30656) on Feb. 1, 2012. The Law
Offices of D. Blair Clark PLLC has been tapped as counsel.
The Debtor disclosed $30 million in assets and $10.5 million in
liabilities.
AMERICAN WEST: FCR James Moore Taps Field Law as Counsel
--------------------------------------------------------
James L. Moore, as future claims representative in the Chapter 11
case of American West Development, Inc., asks the U.S. Bankruptcy
Court for the District of Nevada for permission to employ the law
firm of Field Law Ltd. as his counsel.
Field Law will, among other things:
a. investigate and evaluate the number and extent of potential
claims that could be asserted against Debtor by the class of
individuals that comprises the Future Construction Defect
Claimants;
b. employ experts or other professional persons as may be
required; and
c. negotiate on behalf of Future Construction Defect Claimants
the terms of any pending or proposed plan of reorganization.
Field Law's billing rates for attorneys from $375 per hour to $450
per hour. However, it is not anticipated that any professionals
having day-to-day responsibility for the matter will charge over
the rate of $375 per hour. The paralegals' hourly rates range
from approximately $150 to $175 per hour. The Field Law
professional expected to be responsible for providing services to
the Future Claims Representative is Mitchell Stipp, of
counsel($375/hour).
To the best of the Future Claims Representative's knowledge, the
firm is a "disinterested person" as that term is defined Section
101(14) of the Bankruptcy Code.
About American West
American West Development, Inc. -- fdba Castlebay 1, Inc., et al.
-- is a homebuilder in Las Vegas, Nevada, founded on July 31,
1984. Initially, AWDI was known as CKC Corporation, but later
changed its name.
AWDI filed for Chapter 11 bankruptcy protection (Bankr. D. Nev.
Case No. 12-12349) on March 1, 2012. Judge Mike K. Nakagawa
presides over the case. Brett A. Axelrod, Esq., and Micaela
Rustia Moore, Esq., at Fox Rothschild LLP, serve as AWDI's
bankruptcy counsel. Nathan A. Schultz, P.C., is AWDI's conflicts
counsel. AWDI hired Garden City Group as its claims and notice
agent. American West disclosed $55,392,951 in assets and
$208,495,200 in liabilities as of the Chapter 11 filing.
APEX DIGITAL: U.S. Trustee Wants Case Converted to Chapter 7
------------------------------------------------------------
Peter C. Anderson, the United States Trustee for the Central
District of California, asks the Bankruptcy Court to convert the
Chapter 11 case of Apex Digital, Inc. to one under Chapter 7 or
dismiss the Chapter 11 case.
Kenneth G. Lau, Esq., representing the U.S. Trustee, argues that:
-- no disclosure statement and reorganization plan has been
filed to date in the Debtor's case;
-- the Debtor has failed to file monthly operating reports
since Jan. 31, 2012;
-- the Debtor has failed to pay the quarterly fees for the
quarter ended Mar. 31, 2012, amounting to $4,875. In
addition, quarterly fees continue to accrue and will be
due on July 31, 2012.
About Apex Digital
Walnut, California-based Apex Digital, Inc., was a leading
producer and seller of consumer electronic products, including
high-definition LCD televisions, home entertainment media devices,
digital set top boxes and lighting products (e.g., solar powered
lights), which are carried and sold in hundreds of retail outlets
nationwide.
Apex Digital filed for Chapter 11 protection (Bankr. C.D. Calif.
Case No. 10-44406) on Aug. 17, 2010. Juliet Y. Oh, Esq., Lindley
L. Smith, Esq., Philip A. Gasteier, Esq., at Levene, Neale,
Bender, Rankin & Brill LLP, in Los Angeles, California, represent
the Debtor. In its schedules, the Debtor disclosed $12.8 million
in assets and $27.1 million in liabilities, as of the Petition
Date.
Rosendo Gonzalez has been named Chapter 11 examiner in the
bankruptcy case. Mr. Gonzalez has tapped C. John M. Melissinos,
Esq., at Davidoff Gold LLP, as counsel.
ARCH HOSPITALITY: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Arch Hospitality, Inc.
dba Econo Lodge
fdba Rodeway Inn
Ramada Ltd.
35 The Village Green
Williamsville, NY 14221
Bankruptcy Case No.: 12-11606
Chapter 11 Petition Date: May 21, 2012
Court: U.S. Bankruptcy Court
Western District of New York (Buffalo)
Judge: Carl L. Bucki
Debtor's Counsel: Daniel F. Brown, Esq.
ANDREOZZI, BLUESTEIN, FICKESS,
MUHLBAUER WEBER, BROWN, LLP
333 International Drive, Suite B-4
Williamsville, NY 14221
Tel: (716) 633-3200
Fax: (716) 633-0301
E-mail: dfb@abfmwb.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/nywb12-11606.pdf
The petition was signed by Rashmikant S. Patel, president.
Affiliate that filed separate Chapter 11 petition:
Entity Case No. Petition Date
------ -------- -------------
Rashmikant S. Patel 12-11607 05/21/12
ASMAR INC.: Case Summary & 6 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Asmar Inc.
32825 Northwestern Highway
Farmington Hills, MI 48334
Bankruptcy Case No.: 12-52639
Chapter 11 Petition Date: May 21, 2012
Court: U.S. Bankruptcy Court
Eastern District of Michigan (Detroit)
Judge: Phillip J. Shefferly
Debtor's Counsel: Robert N. Bassel, Esq.
P.O. Box T
Clinton, MI 49236
Tel: (248) 677-1234
Fax: (248) 369-4749
E-mail: bbassel@gmail.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 is available for free at:
http://bankrupt.com/misc/mieb12-52639.pdf
The petition was signed by Raad Asmar, principal.
Affiliate that filed separate Chapter 11 petition:
Entity Case No. Petition Date
------ -------- -------------
In re Northwestern Commercial
Investments, LLC 12-40026 01/03/12
AUTOBACS STRAUSS: Court Trims Lawsuit Against Japanese Buyer
------------------------------------------------------------
Bankruptcy Judge Christopher Sontchi dismissed portions of
lawsuit, AUTOBACS STRAUSS, INC., and 1945 Route 23 ASSOCIATES,
INC. and R&S PARTS and SERVICE, INC., by their Chief Liquidating
Officer EXECTUIVE SOUNDING BOARD ASSOCIATES, INC., Plaintiffs, v.
AUTOBACS SEVEN CO., LTD. KENICHI TAKEDA, AKIHIRO YAMADA, HIROYOSHI
KOJIMA, AND YOKUO TAKENAKA, Defendants, Adv. Pro. No. 09-52849
(Bankr. D. Del.).
The adversary proceeding arises in the third Chapter 11 bankruptcy
of a chain of stores providing automotive parts and services doing
business as "Strauss Discount Auto." In 2007, through the plan of
reorganization in the second Chapter 11 case, Japanese company
Autobacs Seven -- AB7 -- through two of its newly formed
subsidiaries, purchased the Strauss business for roughly $45
million. AB7 funded its subsidiaries' purchase of the assets.
The dispute is over whether -- as the plaintiffs' argue -- AB7's
funding of Autobacs Strauss -- ABST -- (both purchase and after)
was or should have been solely a capital contribution/equity
infusion by AB7 to its subsidiaries, or -- as AB7 argues -- its
funding was allowed to be and, in fact, was a combination of debt
and capital contribution/equity to its subsidiaries.
The R&S Plaintiffs are creditors in the second Chapter 11 case.
Under the plan of reorganization in the second Chapter 11 case,
the R&S Plaintiffs were to receive roughly $45 million from the
purchaser. At the time of the filing of the third Chapter 11
case, however, they were still owed roughly $8 million. Under
ABST's confirmed plan in the third Chapter 11 case, unsecured
creditors, including the R&S Plaintiffs, will share pro rata in
the proceeds, if any, of the lawsuit against AB7.
The facts surrounding AB7's purchase of the assets and the
provisions of the plan in the second Chapter 11 case have given
rise to a number of claims asserted by the plaintiffs against AB7
and certain AB7-related officers and directors of the debtor.
In its ruling, the Court granted, in part, and denied, in part,
the defendants' request to dismiss ABST's claim that the loan
transactions were "constructively fraudulent" as it was insolvent
from its inception and it did not receive reasonably equivalent
value for incurring debt owed to AB7. The Court limits the amount
of the claim to $10,952,035.
The Court dismissed the R&S Plaintiffs' claim that individual
defendants fraudulently induced (i) the R&S Plaintiffs to vote in
favor of the plan in the second Chapter 11 case; and (ii) the
bankruptcy court to approve confirmation of that plan.
The Plaintiffs' claims for Alter Ego/Piercing the Veil; Breach of
Fiduciary Duties; Avoidance of Fraudulent Transfers; Avoidance of
Preferential Transfers; Recharacterization of Debt to Equity;
Equitable Subordination; Breach of Plan of Reorganization; and
Breach of Asset Purchase Agreement will stand.
A copy of the Court's May 21 Opinion is available at
http://is.gd/TXavQ6from Leagle.com.
About Autobacs Strauss
Headquartered in South River, New Jersey, Autobacs Strauss Inc. --
http://www.straussauto.com/-- sells after-market automotive parts
and accessories, and operate automotive service centers located in
New York, New Jersey, Philadelphia, Bethlehem and Pennsylvania.
The Company operates 86 retail store locations and has about 1,450
employees. The Company filed for Chapter 11 protection (Bankr. D.
Del. Case No. 09-10358) on Feb. 4, 2009. Edward J. Kosmowski,
Esq., at Young Conaway Stargatt & Taylor, LLP, represents the
Debtor in its restructuring efforts. As of Jan. 3, 2009, the
Debtor had total assets of $75,000,000 and total debts of
$72,000,000.
The Chapter 11 case is Strauss's third. The preceding Chapter 11
case ended with the confirmation of a Chapter 11 plan in April
2007. The Company was then named R&S Parts & Service Inc.
On Sept. 15, 2010, the Bankruptcy Court confirmed the Fourth
Amended Joint Plan of Reorganization proposed by Autobacs Strauss
and the Official Committee of Unsecured Creditors. On Oct. 6,
2010, the Fourth Amended Joint Plan became effective.
BABCOCK & WILCOX: Moody's Retains 'Ba1' CFR, 'Ba2' PDR
------------------------------------------------------
Moody's Investors Service assigned a Baa2 rating to The Babcock &
Wilcox Company's ("B&W") new $700 million senior secured bank
facility (due 2017) and said it will withdraw the Baa2 rating on
B&W's existing $700 million senior secured facility (due 2014)
once the new facility closes. The company's Ba1 corporate family
rating (CFR), Ba2 probability of default rating and stable outlook
remain unchanged.
Ratings Rationale
B&W's Ba1 corporate family rating reflects the leading market
position and steady replacement revenue of its power business,
favorable outlook for its environmental control business and high
barriers to entry for its US government-related businesses. These
favorable attributes are currently matched with conservative
financial leverage (Debt/ EBITDA of 2x) and consistently positive
free cash flow generation, however the rating reflects Moody's
view that the company's growth aspirations may eventually cause
its strong financial measures to weaken. Meaningful cyclical and
regulatory exposures within the Power segment, the potential for
cost overruns related to the company's fixed-price contracts,
significant dependence on US Government spending that could be
pressured in the medium term and its relatively small scale also
weigh on the rating.
B&W's bank rating is two notches higher than its CFR because this
facility is guaranteed by substantially all of its subsidiaries
and secured by the assets of its power business (B&W's government
businesses guarantee the facility but do not provide security).
The bank facility is also senior to an estimated $700 million in
underfunded pension obligations. B&W's existing bank facility was
undrawn at March 31, 2012, although $216 million in letters of
credit were outstanding.
The stable outlook considers that B&W is well positioned in its
rating but that its credit protection measures may eventually
weaken as the company pursues its growth objectives. A ratings
upgrade could occur should B&W maintain a conservative capital
structure and preserve ample liquidity. Key credit metrics
associated with an upgrade would include Moody's expectations that
Debt/ EBITDA would be sustained below 2x. Downwards rating
movement could occur should cost overruns or greater than expected
revenue pressures lead to sustained Debt/ EBITDA towards 3x.
The principal methodology used in rating B&W was the Global
Construction Industry Methodology, published November 2010. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA,
published June 2009.
Headquartered in Charlotte, North Carolina, The Babcock & Wilcox
Company ("B&W") is an energy-focused engineering and construction
company, providing products and services to utilities, industrial
customers and the United States Government. B&W also has a
sizeable government technical services business. Annual revenues
total roughly $3 billion.
BY INVITATION: Case Summary & 2 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: By Invitation Only LP
215 W. College Street
Grapevine, TX 76051
Bankruptcy Case No.: 12-42881
Chapter 11 Petition Date: May 19, 2012
Court: U.S. Bankruptcy Court
Northern District of Texas (Ft. Worth)
Judge: Russell F. Nelms
Debtor's Counsel: John J. Gitlin, Esq.
LAW OFFICES OF JOHN GITLIN
5323 Spring Valley Road, Suite 150
Dallas, TX 75254
Tel: (972) 385-8450
Fax: (972) 385-8460
E-mail: johngitlin@gmail.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 two largest unsecured
creditors filed with the petition is available for free at:
http://bankrupt.com/misc/txnb12-42881.pdf
The petition was signed by Tom Crown, managing member of general
partner.
CAGLE'S INC: Wants Control of Case Pending Completion of Sale
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports Cagle's Inc. was authorized this month to sell its assets
for no less than $69.5 million to an affiliate of Koch Foods Inc.
With the sale not scheduled for completion until June 15, Cagle's
for the second time is requesting an enlargement of the exclusive
right to propose a liquidating Chapter 11 plan. At a June 12
hearing, the bankruptcy judge will decide whether to grant an
exclusivity extension to Aug. 14. Koch is a chicken processor
based in Park Ridge, Illinois. The price rose at auction about
$12 million, court records show.
About Cagle's
Cagle's Farms (NYSE: CGL.A) -- http://www.cagles.net/-- engages
in the production, marketing, and distribution of fresh and frozen
poultry products in the United States.
Cagle's Inc. and its wholly owned subsidiary Cagle's Farms filed
on Oct. 19, 2011, voluntary petitions for relief under Chapter 11
of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 11-80202 and
11-80203). Paul K. Ferdinands, Esq., at King & Spalding, in
Atlanta, Georgia, serves as counsel. FTI Consulting, Inc., serves
as the Debtors' financial advisors. Kurtzman Carson LLC serves as
their claims, noticing, and balloting agent.
In its schedules, Cagle's Inc. disclosed $82.0 million in assets
and $55.3 million in liabilities as of the Petition Date.
The Official Committee of Unsecured Creditors is represented by
McKenna Long & Aldridge LLP and Lowenstein Sandler as counsel.
J.H. Cohn LLP serves as its financial advisors.
No trustee or examiner has been appointed in the Debtors'
bankruptcy cases.
CHEMICAL COMPOUNDS: Case Summary & 11 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Chemical Compounds, Inc.
aka CCI
29-75 Riverside Avenue, Building 17
Newark, NJ 07104
Bankruptcy Case No.: 12-23058
Chapter 11 Petition Date: May 21, 2012
Court: U.S. Bankruptcy Court
District of New Jersey (Newark)
Judge: Novalyn L. Winfield
Debtor's Counsel: Rosemarie E. Matera, Esq.
KURTZMAN MATERA, P.C.
210C Summit Avenue
Montvale, NJ 07645
Tel: (201) 368-0807
E-mail: law@klmgs.com
Scheduled Assets: $1,167,456
Scheduled Liabilities: $1,684,000
A copy of the Company's list of its 11 largest unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/njb12-23058.pdfb7
The petition was signed by Alberto Celleri, president.
COASTAL REALTY: Case Summary & Largest Unsecured Creditor
---------------------------------------------------------
Debtor: Coastal Realty Investments, Inc.
430 Picric Street
Brunswick, GA 31520
Bankruptcy Case No.: 12-20564
Chapter 11 Petition Date: May 21, 2012
Court: U.S. Bankruptcy Court
Southern District of Georgia (Brunswick)
Debtor's Counsel: Amanda Fordham Williams, Esq.
P.O. Box 1792
Brunswick, GA 31521
Tel: (912) 264-3120
Fax: (912) 265-8337
E-mail: robertbaer@bellsouth.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The petition was signed by Daniel R. Coty, Sr., CFO.
The Company's list of its largest unsecured creditors contains
only one entry:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Bank of the Ozarks -- $1,133,167
1809 Frederica Road
St. Simons Island, GA 31522
COMMANDER PREMIER: Must Reach Deal With Unnamed Buyer by June 19
----------------------------------------------------------------
Scott Moyers at Southeast Missourian reports that Judge Bill
Parker of the U.S. Bankruptcy Court in Tyler has given Commander
Premier Aircraft Corp. until June 19 to come to terms with a newly
interested party who is interested in reorganizing the company.
The report notes the Company owes the Cape Girardeau Regional
Airport hangar more than $800,000 in unpaid lease obligations on a
city-owned hangar at the regional airport. "They had a late entry
in making a proposal to reorganize so the judge decided to
continue," the report quotes city manager Scott Meyer as saying.
According to the report, Mr. Meyer said an unnamed firm has
announced its intention to buy Commander Premier, which means the
city has a better shot of recouping more of its losses.
The report notes city officials had asked Judge Parker to convert
the Company's bankruptcy status from Chapter 11 to Chapter 7.
The report says one of the terms of the reorganization is that the
city would collect about $250,000 up front from the new investor,
Meyer said. A Texas attorney hired by the city is also working
with Commander lawyers to put together a timeline. Mr. Meyer also
noted that the new investor is not Ronald Strauss, the Canadian
financier who had shown interest in buying the company, but could
never pull a deal together, the report adds.
Based in Tyler, Texas, Commander Premier Aircraft Corporation
filed for Chapter 11 bankruptcy protection (Bankr. E.D. Tex. Case
No. 11-60548) on June 16, 2011. Jason R. Searcy, Esq., at Searcy
& Searcy P.C., represents the Debtor. The Debtor estimated assets
of less than $50,000, and debts between $1 million and
$10 million.
COMMUNITY MEMORIAL: Med One, Winthrop Resources Want Stay Lifted
----------------------------------------------------------------
Med One Capital Funding, LLC and Winthrop Resources Corporation
ask the U.S. Bankruptcy Court for the Eastern District of Michigan
for the immediate termination of the automatic stay in the Chapter
11 case of Community Memorial Hospital so that they may take
possession of the machinery and equipment that are the subject of
their leases with the Debtor, or alternatively, for the entry of
an order, that requires the Debtor to immediately reject the
leases, and turn possession of the related leased equipment over
to them.
Med One relates that in 2009, Omnicell, Inc., entered into a
Master Lease Agreement with Debtor. Thereafter, Omnicell assigned
to Med One two equipment lease contracts entered into under the
Master Lease with Debtor. Pursuant to the leases, the Debtors is
required to pay Med One (a) $6,304 per month for the Med One
equipment referenced in Lease 1; and (b) $7,398 per month for the
Med One equipment referenced in Lease 2. The Debtor has not made
any postpetition payments under the leases.
Med One also says that as a result of the failure of the sale to
McLaren Health Care Corporation to close, and the cessation of the
Debtor's operations, the equipment is not being used. Med One
asserts that there is no reason whatsoever for the equipment to
remain in the possession and control of the Debtor.
Winthrop relates that the Debtor is party to that certain lease
agreements, in which the Debtor leases various pieces of equipment
from Winthrop.
According to Winthrop, the Debtor failed to make payment due under
the lease for the months of September, October, November, and
December of 2011. Each of these failures constituted separate
events of default under the lease and entitled Winthrop to
exercise its remedies under the lease.
About Community Memorial Hospital
Community Memorial Hospital, operator of the Cheboygan Memorial
Hospital, filed for Chapter 11 bankruptcy (Bankr. E.D. Mich. Case
No. 12-20666) on March 1, 2012. Judge Daniel S. Opperman oversees
the case. Paul W. Linehan, Esq., at McDonald Hopkins LLC,
represents the Debtor as counsel. The Debtor's financial advisor
is Conway Mackenzie Inc. The Debtor disclosed $23,085,273 in
assets and $26,329,103 in liabilities.
Opened in 1942, the Debtor is an independent, not-for-profit
entity, organized exclusively for charitable, scientific and
educational purposes, and holds tax exempt status in accordance
with Section 501(c)(3) of the Internal Revenue Code. The
Cheboygan Memorial Hospital is a 25-bed critical access hospital
located in Cheboygan, Cheboygan County, a community on the Lake
Huron coast. The Debtor has 395 employees.
McLaren Health Care Corporation proposed to acquire substantially
all of the Debtor's operating assets at its primary hospital
campus, for $5,000,000, plus (2) all amounts required for the
Debtor to cure and assume the assigned Assumed Contracts and
Leases.
Daniel M. McDermott, the U.S. Trustee for Region 9, appointed a
five-member official committee of unsecured creditors in the
Chapter 11 case of Community Memorial Hospital. Varnum LLP
represents the Committee.
CONTRACT RESEARCH: Files Schedules of Assets and Liabilities
------------------------------------------------------------
A debtor-affiliate of Contract Research Solutions Inc., Pracs
Institute, Ltd., filed with the U.S. Bankruptcy Court for the
District of Delaware its schedules of assets and liabilities,
disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $36,684,643
B. Personal Property $12,810,717
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $140,880,575
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $469,017
----------- -----------
TOTAL $49,495,360 $141,349,592
Debtor-affiliates also filed their respective schedules
disclosing:
Company Assets Liabilities
------- ------ -----------
Allied Research Holdings, Inc. $4,990 $140,880,575
Allied Research International
Inc. (Ontario) $9,195,101 $141,463,636
Allied Research International
U.S., LLC $0 $140,880,575
Allied Research International,
Inc. (Florida) $4,698,959 $141,090,997
Allied Research International
India, LLC $0 $140,880,575
Bari Merger Sub, LLC $0 $140,880,575
Bari Management, LLC $0 $140,880,575
BA Research International
Holdings, LLC $0 $140,880,575
BA Research International, LP $4,736,815 $141,031,052
Bari Partners, G.P. $0 $140,880,575
Bioassay Research Co. $0 $140,880,575
BA Research Co. $5,622,205 $141,036,521
Pracs Dermatology, LLC $0 $140,880,575
Diabetes & Glandular Disease
Research Associates, Inc. $24,612,193 $141,157,156
Gateway Medical Research, Inc. $19,661,155 $141,172,947
CRS Real Estate Holdings LLC $0 $140,880,575
Specialty Research, Inc. $0 $140,880,575
CRS Management, Inc. $3,696,628 $141,121,954
Contract Research Solutions, Inc. $0 $140,880,575
Full-text copies of the schedules are available for free at:
http://bankrupt.com/misc/CONTRACT_RESEARCH_alliedresearchintlinc_b_sal.pdf
http://bankrupt.com/misc/CONTRACT_RESEARCH_alliedresearchintlinc_sal.pdf
http://bankrupt.com/misc/CONTRACT_RESEARCH_alliedresearchintlinc_sal_b.pdf
http://bankrupt.com/misc/CONTRACT_RESEARCH_alliedresearchintl_sal.pdf
http://bankrupt.com/misc/CONTRACT_RESEARCH_alliedresearch_sal.pdf
http://bankrupt.com/misc/CONTRACT_RESEARCH_baresearchco_sal.pdf
http://bankrupt.com/misc/CONTRACT_RESEARCH_baresearch_sal.pdf
http://bankrupt.com/misc/CONTRACT_RESEARCH_barimerger_sal.pdf
http://bankrupt.com/misc/CONTRACT_RESEARCH_barimanagement_sal.pdf
http://bankrupt.com/misc/CONTRACT_RESEARCH_bari_sal.pdf
http://bankrupt.com/misc/CONTRACT_RESEARCH_bioassay_sal.pdf
http://bankrupt.com/misc/CONTRACT_RESEARCH_crsmanagement_sal.pdf
http://bankrupt.com/misc/CONTRACT_RESEARCH_crs_sal.pdf
http://bankrupt.com/misc/CONTRACT_RESEARCH_diabetes_sal.pdf
http://bankrupt.com/misc/CONTRACT_RESEARCH_gatewaymedical_sal.pdf
http://bankrupt.com/misc/CONTRACT_RESEARCH_pracsdermatology_sal.pdf
http://bankrupt.com/misc/CONTRACT_RESEARCH_pracs_sal.pdf
http://bankrupt.com/misc/CONTRACT_RESEARCH_sal.pdf
http://bankrupt.com/misc/CONTRACT_RESEARCH_specialtyresearch_sal.pdf
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.
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: Morris Anderson OK'd as Financial Advisors
-------------------------------------------------------------
The Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware authorized the Official Committee of
Unsecured Creditors in the Chapter 11 cases of Contract
Research Solutions, Inc., et al., to retain Morris Anderson &
Associates, Ltd., as financial advisors.
As reported in the Troubled Company Reporter on May 7, 2012,
Morris Anderson is expected to, among other things:
a. analyze the financial operations of the Debtors pre- and
post-petition, as necessary;
b. analyze the financial ramifications of any proposed
transactions for which the Debtors seek court approval
including, but not limited to, postpetition financing, sale
of all or a portion of the Debtors' assets, retention of
management and employee incentive and severance plans; and
c. assist and advise the Committee and its counsel in the
development, evaluation and documentation of any plan(s),
financing or strategic transaction(s) and strategic
alternatives for recovery, and the consideration that is to
be provided to unsecured creditors thereunder.
The customary hourly rates, subject to periodic adjustments,
charged by Morris Anderson professionals anticipated to be
assigned to the Chapter 11 cases are:
Principals $475-$550
Managing Directors $350-$425
Directors $275-$325
In addition, MA is seeking approval of a one-time success fee of
up to $150,000, payable at the sole and reasonable discretion of
the Committee in cash by wire upon court approval.
To the best of the Committee's knowledge, Morris Anderson is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
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.
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.
DALPHIS HOLDING: Shuts Down Plant, Leaves 75 Workers Jobless
------------------------------------------------------------
The Associated Press reports Dalphis has closed its plant in
Memphis, Tennessee, putting about 75 people out of work.
According to the report, company president Charles Duffley said an
investment group that bought Dalphis decided to liquidate the
business because it wasn't meeting expectations.
The report says Mr. Duffley and CEO Benjamin D. Morris were among
those being laid off. Employees were being paid through last
Friday. A spokesman for the Tennessee Department of Labor and
Workforce Development said the department would meet with affected
workers.
Dalphis Holding, LLC, a Memphis, Tenn.-based manufacturer of
window treatments, filed a Chapter 11 petition (Bankr. W.D. Tenn.
Case No. 11-24849) in its hometown on May 12, 2011. Melanie T.
Vardaman, Esq., at Harris Jernigan & Geno, PLLC, in Ridgeland,
Missouri, serves as counsel to the Debtor. The Company estimated
$1 million to $10 million in assets as of the Chapter 11 filing.
DAVITA INC: Fitch Affirms Issuer Default Ratings at 'BB-'
---------------------------------------------------------
Fitch Ratings has affirmed the ratings of DaVita Inc. (NYSE: DVA),
including the Issuer Default Ratings at 'BB-'. The Rating Outlook
is Stable. The ratings apply to approximately $4.5 billion of
debt outstanding as of March 31, 2012.
Rationale:
DaVita's ratings and Stable Outlook reflect the following:
-- Fitch believes the roughly $4.4 billion ($3.66 billion cash/
$758 million stock) acquisition of HealthCare Partners is
manageable operationally and financially for Davita. However,
it will limit Davita's flexibility within the 'BB-' rating
category.
-- Davita generates strong free cash flow (FCF), has adequate
internal liquidity and access to credit markets.
-- Margins are sensitive to government payor reimbursement
pressures and patient mix.
-- The company's strong cash generation provides it with
financial flexibility to pay down debt following leveraging
transactions.
-- Total debt/EBITDA sustained above 4.0x could lead to a
downgrade of the ratings.
-- Pro forma for the debt funding of the acquisition, Fitch
estimates reported gross debt-to-EBITDA of 4.8x and 3.8x when
annualizing the contribution of Healthcare Partners EBITDA.
Key Rating Drivers:
The key rating drivers for this credit are leverage measured as
total gross debt-to-EBITDA, relative margin stability and FCF.
The 'BB-' leverage range for this credit is approximately 3.5x-
4.0x. Margin erosion of less than 250 basis points and material
FCF generation are expected for this rating.
Acquisition to Expand Presence in Integrated Care
The Healthcare Partners acquisition will broaden Davita's services
beyond that of kidney disease. Both firms intend to share best
practices in healthcare delivery, while remaining somewhat
independent on an operating basis. Given Davita's historical
focus on kidney patients, a less decentralized approach to
managing Healthcare Partners which serves a broader patient
population, will likely mitigate integration risk.
Post-Transaction Leverage to Limit Financial Flexibility:
After the transaction closes, likely in the early part of the
fourth quarter of 2012, Fitch expects pro forma gross leverage to
increase to 3.6x-3.9x from 2.9x at March 31, 2012. This will
limit Davita's financial flexibility within its 'BB-' rating
category. Nevertheless, Fitch anticipates the company will reduce
leverage in the 12-18 months following the transaction through a
combination of debt paydown from solid FCF generation and growth
in EBITDA. Fitch expects DaVita to operate with gross leverage of
below 3.5x within 12 months following close of the acquisition.
Acquisitive Posture:
Acquisitions remain a core component of the company's growth
strategy, and it has completed two large ones (Gambro and DSI
Renal Inc.) prior to its recently announced acquisition of
Healthcare Partners. While the number of larger domestic targets
has declined, Fitch believes the company will continue to pursue
acquisitions in the healthcare service provider space,
particularly in the kidney disease market, assuming the
geographies and valuations are favorable. In addition, the
Healthcare Partners transaction indicates that Davita will also
consider providers that offer a broader array integrated
healthcare services.
Cash-Generating Business Model:
DaVita's business model offers long-term, profitable growth, with
demand that is fairly resistant to economic downturns. Relatively
low fixed costs, manageable capital spending requirements and
somewhat stable margins drive consistently strong cash flow. As
such, Fitch expects DaVita to generate $550 million to $650
million in FCF during 2012. Fitch expects Healthcare Partners
will also support the company's cash flow, which should be
sufficient to fund targeted acquisitions and share repurchases
while still reducing debt post-acquisition.
Margins Susceptible to Government Reimbursement:
The company has managed to maintain stable margins over time,
despite ongoing reimbursement pressure from governmental payers,
which account for roughly 60% of DaVita's dialysis-related
revenues. Continued focus on efficiency, increasing scale, and
positive trends in commercial reimbursement rates have supported
profitability.
Nevertheless, Medicare's bundled rate for dialysis services,
instituted in 2011, has the potential to pressure margins longer
term. So far, however, the bundled reimbursement system has not
been a major issue for DaVita's credit profile, with good cost
control and lower Epogen utilization helping in this regard.
Nevertheless, it is possible that Medicare could decrease the
bundled rate if EPO utilization continues to decline.
Medicare is scheduled to incorporate specialty oral drugs into the
bundled rate in 2014, which could affect margins depending on
utilization and the new bundled rate. In addition, should
Congress not achieve its deficit reduction goals this November, a
2% automatic reduction in scheduled reimbursement rates could
follow in 2013.
Adequate Liquidity and Manageable Debt Maturities:
At March 31, 2012, DaVita had adequate liquidity of approximately
$458 million in cash and short-term securities and $297 million of
availability under its $350 million (net of $53 million in letters
of credit) secured bank facilities that expire in 2015. The
facility's leverage covenant is currently at 4.25x. It drops to
4.00x in 2013 and 3.75x thereafter.
At March 31, 2012, DaVita had approximately $4.5 billion in
outstanding debt, consisting of approximately $2.88 billion in
term loans under its senior secured credit facility and $1.55
billion of senior unsecured notes. Debt maturities are as follows:
Senior secured credit facility:
-- $950 million Term Loan A due in 2015;
-- $200 million Term Loan A2 due in 2016;
-- $1,733 million Term Loan B due in 2016.
Senior unsecured notes:
-- $775 million due 2018.
Senior unsecured notes:
-- $775 million due 2020.
Fitch has affirmed the following ratings:
-- Issuer Default Rating (IDR) affirmed at 'BB-';
-- Senior secured bank credit facility affirmed at 'BB';
-- Senior unsecured notes affirmed at 'BB-'.
DECATUR HOTELS: Case Summary & 10 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Decatur Hotels, Inc.
3141 North Water Street
Decatur, IL 62526
Bankruptcy Case No.: 12-21693
Chapter 11 Petition Date: May 21, 2012
Court: U.S. Bankruptcy Court
Eastern District of Michigan (Bay City)
Judge: Daniel S. Opperman
Debtor's Counsel: Kenneth W. Kable, Esq.
BRAUN KENDRICK FINKBEINER P.L.C.
4301 Fashion Square Boulevard
Saginaw, MI 48603
Tel: (989) 498-2100
E-mail: kenkab@braunkendrick.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 10 largest unsecured creditors
is available for free at http://bankrupt.com/misc/mieb12-21693.pdf
The petition was signed by Shailesh "Sonny" Shah.
Affiliates that previously filed separate Chapter 11 petitions:
Entity Case No. Petition Date
------ -------- -------------
Houghton Lake Hospitality, LLC 12-21587 05/11/12
Houghton Lake Hotels, LLC 12-21590 05/11/21
Kakalia Hospitality, LLC 12-21588 05/11/12
Kakalia Hotel, LLC 12-21589 05/11/12
DESERT HOT SPRINGS: S&P Affirms 'B' Tax Allocation Bond Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services removed from CreditWatch and
affirmed its 'B' ratings on Desert Hot Springs Redevelopment
Agency, Calif.'s merged project area (MPA) series 2006 and 2008
tax allocation bonds. "The outlook is stable reflecting the
presence of a cash-funded debt service reserve and escrowed bonds,
which we estimate can cover annual shortfalls for several years
before depletion assuming project area assessed valuation (AV)
remains stable. The rating incorporates the successor agency's
reliance on some of the debt service reserve to meet projected
shortfalls," S&P said.
"We estimate that, if needed, the a cash-funded debt service
reserve and escrowed bonds, can cover annual shortfalls for
several years before depletion assuming project area assessed
valuation (AV) remains stable," said Standard & Poor's credit
analyst Sussan Corson. "Although we don't expect to change the
rating in the next year, should AV continue to decline or should
the successor agency draw significantly on cash-funded debt
service reserves in the next year, we could lower the rating.
Should AV stabilize and recover to improve annual coverage, we
could raise the rating," added Ms. Corson.
The MPA is located in Desert Hot Springs, in California's
Coachella Valley. The city attracts tourists for its natural hot
mineral water spas and is a historically lower-income community,
neighboring Palm Springs and other more affluent resort
communities.
DIPPIN' DOTS: Former Office Sold to Fischer for $1.1 Million
------------------------------------------------------------
Bobby Allyn, writing for The Tennessean, reports a mid-century
plantation-style home on Music Row, formerly the office of Dippin'
Dots, was sold to private equity firm Fischer Enterprises LLC for
$1.1 million. The two-story blue home with white columns and a
balcony was built in 1954 and last appraised at $749,700,
according to county property records.
A Fischer unit, Dippin' Dots LLC, closed on a $12.7 million deal
to acquire the flash-frozen ice cream company on May 18, 2012,
after the Bankruptcy Court approved the sale earlier this month.
About Dippin' Dots
Founded in 1988 by microbiologist Curt Jones, Dippin' Dots Inc.
manufactures quirky and colorful ice cream beads, which are flash
frozen using liquid nitrogen. It owns a 120,000-square-foot plant
in Kentucky that can produce more than 25,000 gallons of frozen
dots a day. It has about 140 Dippin' Dots retail locations, which
are mostly controlled by franchisees, and agreements with 9,952
small vendors who sell the ice cream at fairs, festivals and
sports games. Dippin' Dots isn't sold in grocery stores because
of its extreme cooling requirements.
Dippin' Dots filed a Chapter 11 petition (Bankr. W. D. Ky Case No.
11-51077) on Nov. 3, 2011 in Paducah, Kentucky. Judge Thomas H.
Fulton presides over the case. Farmer & Wright, PLLC, represents
the Debtor as Chapter 11 counsel. The Debtor disclosed
$20,233,130 in assets and up to $20,233,130 in debts. The
petition was signed by Curt Jones, president.
Regions Bank, the Debtor's secured lender, is represented by Brian
H. Meldrum, Esq., at Stites & Harbison PLLC.
In February 2012, Regions Bank filed a motion seeking appointment
of a Chapter 11 trustee. After talks with the Debtor, Regions
consented to having a chief restructuring officer. Regions wanted
a trustee in part based on allegations that the company's chief
executive fraudulently transferred his ownership of a franchising
affiliate to prevent the bank from attaching the affiliate in
satisfaction of debt on a guarantee.
DVS SHOE: Seeks Quick $4 Million Sale of Assets
-----------------------------------------------
DVS Shoe Co. intends to complete a sale before the end of June.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that a buyer is already under contract to purchase the
business for $4 million. The secured lender Bank of America NA is
owed $6.5 million on a claim secured by all assets. There was a
hearing set May 23 in bankruptcy court to discuss auction and sale
procedures. DVS wants to have the auction by June 13, with a
hearing to approve the sale on June 15.
Kari Hamanaka at Orange County Business Journal reports that the
minimum bid would be set at $4.3 million. The starting price
includes a stalking horse bid of $4 million in addition to fees.
DVS President Brian Dunlap declined to provide additional details
on the bidder.
Declining Revenue
According to the Business Journal, DVS Shoe cited declining
revenue related to the lingering effects of the economic downturn
and credit crunch when it filed for Chapter 11 bankruptcy
protection.
DVS says it had sales of $53.8 million in 2011. Revenue is
projected to decline this year to $45 million.
The Business Journal report relates DVS's revenue began to fall in
2008 as the recession set it in. It began selling off inventory
in closeout sales starting in 2009. The company also attempted to
cut annual operating expenses by $17 million between 2008 and
2011, according to the filing. DVS had sales of $53.8 million in
2011 and projects sales of $45 million this year.
About DVS Shoe
Westminster, California-based DVS Shoe Co., Inc., a designer,
manufacturer and marketer of athletic shoes, filed a bare-
bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-16209)
on May 17, 2012, in Santa Ana.
According to Shop-Eat-Surf, the Company is opting for an 11 U.S.C.
Sec. 363 auction process for the assets. The Debtor is reportedly
in talks with interested parties but a final document has not been
signed so executives did not want to disclose the names of
potential new investors yet.
The Debtor estimated assets and debts of $10 million to
$50 million.
EL PASO: Fitch Keeps Senior Unsecured Notes on Watch Negative
-------------------------------------------------------------
Fitch Ratings has maintained its Rating Watch Negative on El Paso
Corp. (EP) ahead of the final close of its acquisition by Kinder
Morgan Inc. (KMI) as follows:
El Paso Corporation
-- IDR 'BB+';
-- $1.25 billion senior secured revolving credit facility (2016)
'BBB-';
-- Senior unsecured notes and debentures 'BB+'.
El Paso Energy Capital Trust I
-- Trust convertible preferred securities 'BB-'.
Concurrently, Fitch has taken various rating actions on El Paso's
subsidiaries and related entities as follows:
Fitch has placed the following ratings on Rating Watch Positive:
El Paso Natural Gas Company (EPNG)
-- IDR 'BBB-';
-- Senior unsecured debt 'BBB-'.
Tennessee Gas Pipeline Company (TGP)
-- IDR 'BBB-';
-- Senior unsecured debt 'BBB-'.
Fitch has affirmed the following ratings with a Stable Outlook:
El Paso Pipeline Partners Operating Company (EPBO)
-- IDR at 'BBB-';
-- Senior unsecured debt at 'BBB-'.
Fitch has upgraded the following ratings with a Stable Outlook:
Colorado Interstate Gas Company (CIG)
-- IDR to 'BBB' from 'BBB-';
-- Senior unsecured debt to 'BBB' from 'BBB-'.
Southern Natural Gas Company (SNG)
-- IDR to 'BBB' from 'BBB-';
-- Senior unsecured debt to 'BBB' from 'BBB-'.
Fitch has affirmed the following ratings with an Evolving Outlook
and withdrawn the ratings:
El Paso Exploration & Production Company (EPEP) (now named EP
Energy)
-- IDR at 'BB+';
-- Senior secured revolving credit facility (2012) at 'BBB-';
-- Senior unsecured debt at 'BB+'.
Roughly $13 billion in debt is affected by ratings actions.
The Rating Watch Negative on El Paso Corp. reflects the
uncertainty surrounding EP's final capital structure, as well as
EP's linkage with its new owner KMI. KMI is the parent company to
Fitch rated entity Kinder Morgan Kansas, Inc. (KMK; Issuer Default
Rating 'BB+' on Rating Watch Negative).
The acquisition of EP and the sale of its E&P business and the
planned drop down of its remaining fully owned pipeline operating
subsidiaries (TGP, EPNG, Cheyenne Plains) to KMP and EPB will
leave EP as an intermediate holding company of Kinder Morgan Inc.
Under the terms of the new KMI acquisition credit facilities, EP
will at KMI/EP acquisition close become a restricted subsidiary
and guarantor of KMI indebtedness.
At acquisition close Fitch expects KMI to repay the borrowings
under and retire EP's secured revolver using the proceeds from
asset sales. Fitch expects that EP's ratings will ultimately be
linked to the ratings of KMI following the proposed drop down
transactions and asset divestures. Given the acquisition by KMI,
and uncertainty surrounding future dropdowns and the final EP
capital structure, the Rating Watch Negative remains appropriate.
The Rating Watch Positive on TGP and EPNG is due to the expected
future retirement of the EP credit facility and the planned drop
down of 100% of TGP and 50% of EPNG into KMP ('BBB'; Stable
Outlook). The drop down of these assets is expected to occur
contemporaneously with KMP's FTC driven asset divesture slated for
the third quarter of 2012. The credit linkage (one notch
separation) that TGP and EPNG currently share with their parent
company EP will be significantly diminished with the retirement of
EP's secured revolver combined with the drop down of TGP and EPNG
into KMP, as TGP and EPNG will be released as collateral.
Fitch expects that at the close of the drop down into KMP, TGP's
and EPNG's credit profiles will likely warrant higher ratings or
affirmations at current levels. TGP and EPNG are both relatively
low risk FERC regulated interstate natural gas pipelines. Both
pipelines have moderate leverage, solid debt service coverage
metrics and operate with a majority of capacity contracted for
under long term reservation contracts which are largely volume and
commodity price insensitive. It is likely that following the
dropdown to KMP, TGP's and EPNG's ratings will be more closely
linked to their new direct owner, KMP and be more reflective of
their stand-alone credit profiles.
The affirmation of EPBO reflects Fitch's belief that over the near
term EPBO will be unaffected by KMI's acquisition of EP. The drop
downs of the remaining 14% interest in CIG and 100% Cheyenne
Plains is being done at a reasonable 8x-to-9x 2012 EBITDA multiple
and further increases EPBO's portfolio of low risk FERC regulated
pipeline assets. The ratings and Stable Outlook on EPBO reflect
EPBO's consistent earnings and cash flows from its generally low
business risk pipeline assets. Fitch believes that EPBO will
continue to possess investment grade credit metrics and business
risk profile following the merger close. Fitch expects any future
dropdowns to EPBO be financed with a balance of debt and equity
consistent with past practices and investment grade credit
metrics.
Fitch's upgrades of CIG and SNG are reflective of the low risk
nature of these FERC regulated pipelines coupled with solid credit
and financial operating metrics. The recommendation also
considers that both CIG and SNG are now or will be fully owned by
EPBO ('BBB-'; Stable Outlook). Prior to the full acquisition of
100% of SNG (last year) and the now 100% acquisition of CIG, Fitch
had constrained the ratings to a one notch separation from EP
despite stand-alone operating and financial characteristics that
might indicate a higher rating. This was due to the legal,
financial and operating ties that CIG and SNG had with EP, EPB's
general partner and previously a partial direct owner in the
pipelines. The upgrades reflect CIG and SNG's subsidiary
relationship to their now 100% owner parent company EPBO. As
subsidiaries of EPBO, EPBO has substantial control over the
pipelines operations and finances, including distributions, which
are needed to support debt at EPBO and distributions to EPBO's
unit holders. Given this linkage the Fitch rates CIG and SNG one
notch higher than EPBO to reflect the structural superiority the
CIG and SNG have as operating asset issuers to EPBO.
EPEP's ratings are being affirmed and withdrawn for business
reasons.
Catalysts for Future Rating Actions: Catalysts for rating actions
at EP include any future rating action taken at KMI, as well as,
an inability to reduce consolidated KMI/EP debt with asset
dropdown proceeds on a timely basis. Catalysts for positive
rating actions at TGP and EPNG will be driven by execution of
their dropdown into higher rated parent KMP and their eventual
release as collateral from EP and KMI obligations. Catalysts for
a negative rating action at EPBO include increased leverage, an
acquisition or transaction that significantly increases leverage
or operating risk and a significant increase in partnership
distributions that results in a deterioration in distribution
coverage, which Fitch expects to be over 1.0x. Catalysts for
negative ratings actions at CIG and SNG would include an
aggressive growth strategy that results in increased leverage.
EXOPACK HOLDING: Moody's Lowers CFR to 'B3'; Outlook Negative
-------------------------------------------------------------
Moody's Investors Service downgraded the corporate family rating
for Exopack Holding Corporation to B3 from B2 and affirmed the
SGL-3 speculative grade liquidity rating. Moody's also downgraded
the senior secured rating to B2 from B1 and its senior unsecured
notes rating to Caa2 from Caa1. The outlook remains negative.
Moody's took the following rating actions:
Downgraded CFR to B3 from B2
Downgraded PDR to B3 from B2
Downgraded $350 million senior credit facility due 2017 to B2 (LGD
3-34%) from B1 (LGD 3-36%)
Downgraded $235 million senior unsecured notes due 2018 to Caa2
(LGD 5-82%) from Caa1 (LGD 5-84%)
Affirmed SGL-3 Speculative Grade Liquidity Rating
Ratings Rationale
The downgrade of the corporate family rating to B3 from B2
reflects that the company's operating performance has not met
expectations over the last 12 months and credit metrics have
breeched the rating triggers. Although the company has completed
productivity and cost cutting initiatives, Exopack may be
challenged to improve credit metrics to a level commensurate with
the rating category within the horizon. Volumes may continue to be
negatively impacted by continued economic sluggishness and market
share shifts in certain end markets as well as continued warm
weather. Additionally, free cash flow may be negatively impacted
by increases in term loan amortization, pension payments,
management fees, and cash restructuring charges despite a
projected decrease in capital spending (post completion of
projects relating to the acquisition of Bemis' cheese and meat
business).
The B3 Corporate Family Rating reflects Exopack's historically
weak free cash flow, competitive industry environment and
concentration of sales. The rating is also reflects the company's
exposure to cyclical end markets, lengthy lags in certain
contractual cost pass-through provisions and aggressive financial
profile. Exopack 's aggressive financial profile is demonstrated
by its recent debt finance dividend recapitalization and several
debt financed acquisitions.
The rating is supported by the concentration of sales to food end
markets, long-standing relationships with customers and the large
percentage of business under long-term contracts with cost pass-
through provisions. The rating is also supported by the company's
manufacturing of some custom products and adequate liquidity.
The negative outlook reflects the company's weak credit metrics
and an expectation that Exopack may be challenged to improve them
to a level commensurate with the rating category over the horizon.
What Could Change the Rating - Down
The rating could be downgraded if the company fails to sustainably
improve credit metrics, there is deterioration in the operating
and competitive environment, there is another significant
acquisition or dividend, and/or Exopack fails to maintain adequate
liquidity. Specifically, the rating could be downgraded if free
cash flow fails to improve above 1.0%, leverage fails to improve
to below 6.7 times, EBIT interest coverage fails to improve to 1.0
time or better, and/or the EBIT margin declines below 5%.
What Could Change the Rating - Up
The rating could be upgraded if Exopack sustainably improved
credit metrics, maintained good liquidity and followed a less
aggressive financial policy. Any upgrade would be contingent upon
stability in the operating and competitive environment.
Specifically, Exopack could be upgraded if debt to EBITDA declined
to below 6.0 times, free cash flow to debt improved to above 4.0%,
EBIT to interest expense improved to above 1.3 times, and/or the
EBIT margin improved to above 6.5%.
The principal methodology used in rating Exopack was the Global
Packaging Manufacturers: Metal, Glass, and Plastic Containers
Industry Methodology published in June 2009. Other methodologies
used include Loss Given Default for Speculative-Grade Non-
Financial Companies in the U.S., Canada and EMEA published in June
2009 and Speculative Grade Liquidity Ratings published in
September 2002.
FILENE'S BASEMENT: Syms Shareholders Claim Agreement on Plan
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that according to the official equity committee in the
Chapter 11 cases of retailers Syms Corp. and Filene's Basement
LLC, the Debtors reached an agreement with shareholders on a
Chapter 11 plan. The equity committee says it "hopes" the
official creditors' committee joins in support of the plan by the
next hearing May 25. The equity committee didn't lay out terms of
the plan other than to say it will "maximize the long-term value
of Syms' real estate."
Mr. Rochelle says a sticking point could be the treatment of
creditors of Filene's who aren't as clearly entitled as Syms's
creditors to payment in full with interest.
About Syms Corp.
Massachusetts-based Filene's Basement, also called The Basement,
is the oldest off-price retailer in the United States. The
Basement focuses on high-end goods and is known for its
distinctive, low-technology automatic markdown system.
Filene's Basement first filed for Chapter 11 bankruptcy protection
in August 1999. Filene's Basement was bought by a predecessor of
Retail Ventures, Inc., the following year. Retail Ventures in
April 2009 transferred the unit to Buxbaum.
Filene's Basement, Inc. and its affiliates filed for Chapter 22
(Bankr. D. Del. Case No. 09-11525) on May 4, 2009, represented by
lawyers at Pachulski Stang Ziehl & Jones LLP. Epiq Bankruptcy
Solutions serves as claims and notice agent. The Debtors
estimated $50 million to $100 million in assets and $100 million
to $500 million in debts.
The 2009 Debtor was formally renamed FB Liquidating Estate,
following the sale of all of its assets to Syms Corp. in June
2009.
Pursuant to the Liquidating Plan confirmed in January 2010,
secured creditors in the Chapter 11 case have been paid in full,
and holders of priority, administrative and convenience class
claims have received 100% of their allowed claims. As reported by
the Troubled Company Reporter on Dec. 20, 2010, Alan Cohen,
Chairman of Abacus Advisors LLC and Chief Restructuring Officer
for FB Liquidating Estate disclosed that a second distribution of
dividend checks to Filene's unsecured creditors amounting to 12.5%
of approved claims has been made, bringing the cumulative
distributions on unsecured claims to 62.5%.
On Nov. 2, 2011, Syms Corp. placed itself, Filene's Basement and
two other units in Chapter 11 bankruptcy (Bankr. D. Del. Case Nos.
11-13511 to 11-13514) after a failed bid to sell the business.
The two units are Syms Clothing Inc. and Syms Advertising Inc.
Judge Kevin J. Carey presides over the case. Lawyers at Skadden
Arps Slate Meagher & Flom LLP serve as the Debtors' counsel. The
Debtors tapped Rothschild Inc. as investment banker and Cushman
and Wakefield Securities, Inc., as real estate financial advisors.
Syms shuttered its namesake and Filene's Basement outlets upon the
bankruptcy filing and tapped a joint venture of Gordon Brothers
Retail Partners LLC and Hilco Merchant Resources LLC to run the
going-out-of-business sales. The sale may continue until Jan. 31,
2012.
Filene's Basement estimated $1 million to $10 million in assets
and $50 million to $100 million in debts. The petitions were
signed by Gary Binkoski, authorized representative of Filene's
Basement.
The official committee of unsecured creditors appointed in the
2011 case has retained Hahn & Hessen LLP as legal counsel.
Holders of equity in Syms Corp. pushed for an official
shareholders' committee and separation of the Syms and Filene's
Basement bankruptcy estates.
FREEMON SHAPARD: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Freemon, Shapard & Story
807 8th Street, Suite 200
Wichita Falls, TX 76301
Bankruptcy Case No.: 12-42889
Chapter 11 Petition Date: May 21, 2012
Court: U.S. Bankruptcy Court
Northern District of Texas (Ft. Worth)
Judge: Russell F. Nelms
Debtor's Counsel: J. Robert Forshey, Esq.
FORSHEY & PROSTOK, LLP
777 Main Street, Suite 1290
Ft. Worth, TX 76102
Tel: (817) 877-8855
E-mail: jrf@forsheyprostok.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 Mac and Dennis Cannedy, partners.
FUNERARIA Y CAPILLA: Case Summary & 3 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Funeraria Y Capilla Naranjito Memorial I
P.O. Box 274
Naranjito, PR 00719-0274
Bankruptcy Case No.: 12-03934
Chapter 11 Petition Date: May 21, 2012
Court: U.S. Bankruptcy Court
District of Puerto Rico (Old San Juan)
Judge: Edward A. Godoy
Debtor's Counsel: Roberto Roman Valentin, Esq.
P.O. Box 8221
Bayamon, PR 00960-8221
Tel: (787) 740-6011
E-mail: romanlaw@prtc.net
Scheduled Assets: $1,760,523
Scheduled Liabilities: $793,326
A copy of the Company's list of its three largest unsecured
creditors filed with the petition is available for free at:
http://bankrupt.com/misc/prb12-03934.pdf
The petition was signed by Luis Matos, president.
GEM REFRIGERATOR: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: GEM Refrigerator Co.
7340 Milnor Street
Philadelphia, PA 19136
Bankruptcy Case No.: 12-14902
Chapter 11 Petition Date: May 21, 2012
Court: U.S. Bankruptcy Court
Eastern District of Pennsylvania (Philadelphia)
Judge: Eric L. Frank
Debtor's Counsel: Douglas R. Lally, Esq.
P.O. Box 105
303 Old York Road
Jenkintown, PA 19046-0105
Tel: (215) 886-6350
Fax: (215) 754-4959
E-mail: drlally@hotmail.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
is available for free at http://bankrupt.com/misc/paeb12-14902.pdf
The petition was signed by Jeffrey Steinberg, president/CEO.
GENERAC POWER: Moody's Affirms 'B2' CFR; Outlook Positive
---------------------------------------------------------
Moody's Investors Service affirmed Generac Power Systems, Inc.'s
corporate family rating (CFR) at B2 and probability of default
(PDR) rating at B2 but downgraded the proposed Term Loan B to B2
from B1. The rating on the company's proposed $425 million senior
unsecured note issue is being withdrawn as the company changed its
recapitalization plan and will no longer issue the notes. This
follows the decision to downsize the special dividend from
approximately $685 million to approximately $408 million. The
rating outlook was changed to positive to reflect the improved
credit metrics from a smaller dividend. The proposed Term Loan B
was upsized to $900 million with the proposed $150 million ABL,
unrated, unchanged. The proposed transaction will refinance the
company's existing debt with ratings on that debt being withdrawn
upon completion of the transaction. Moody's also affirmed the
speculative grade liquidity rating of SGL-2 to reflect the
company's good liquidity. The ratings are subject to change if the
terms of the refinancing or legal structure are inconsistent with
those relied on by Moody's.
Ratings Rationale
Generac's B2 Corporate Family and Probability of Default Ratings
incorporate the company's resulting high leverage and aggressive
shareholder friendly policy, geographic concentration and limited
product offering. The ratings however also recognize the company's
well established niche market position with impressive brand
recognition and strong anticipated cash flow generation for the
rating category. The ratings and positive outlook are also
supported by Generac's good liquidity profile and the expectation
that positive free cash flow will result in deleveraging.
The following rating actions have been taken:
Generac Power Systems, Inc.:
The following ratings have been assigned, subject to Moody's
review of final documentation:
Proposed $900 million senior secured first lien term loan B,
downgraded to B2 ( LGD4, 55% from B1 (LGD3, 37%);
Corporate Family Rating, affirmed at B2;
Probability of Default, affirmed at B2.
Term Loan A affirmed at B2, LGD3, 49% and will be withdrawn at the
close of the transaction.
Term Loan B (old) affirmed at B2, LGD3, 49% and will be withdrawn
at the close of the transaction.
The following have been withdrawn:
Proposed $425 million senior unsecured notes, previously Caa1
(LGD5, 85%).
The ratings outlook has been revised to positive from stable.
The B2 rating on the proposed $900 million senior secured first
lien term loan B reflects their first priority lien on fixed
assets and intangibles and through cross-collateralization with
the ABL, a second priority lien on all ABL collateral. The
downgrade on the Term Loan B to B2 from B1 reflects the decision
not to issue unsecured notes that would have been subordinated to
the Term Loan. The facilities are guaranteed on a senior basis by
Generac Acquisitions Corp. and material wholly-owned domestic
restricted subsidiaries. The proposed $150 million ABL revolving
credit facility (undrawn at close) is not rated by Moody's and has
a first lien on trade accounts receivable, inventory, and has a
second lien on fixed assets and intangibles. Ratings on the
existing debt will be withdrawn upon repayment.
Generac's SGL-2 reflects that the company is anticipated to have a
good liquidity profile over the near-term. The company's liquidity
is supported by free cash flow to debt that is anticipated to be
over 10% annually and full availability on its proposed $150
million revolving credit facility.
The positive outlook reflects Moody's expectation that the company
will generate positive free cash flow, good overall operating
performance, and healthy margins. The company's cash flow
generation benefits from low capital expenditure requirements. The
outlook could revert to stable if margins were to weaken from
current levels or if there were a meaningful change in its cash
flow generation or in the competitive climate.
The rating could benefit if the company's leverage was to improve
to below 4.0 times on a sustainable basis. EBITDA to interest
coverage over 3.5 times would also be supportive of positive
ratings traction.
The rating could be downgraded if free cash flow to debt falls
below 5% or if debt to EBITDA increases to 5.5 times or higher. A
debt-financed acquisition or additional large dividend payments
that further weaken the company's balance sheet could also result
in negative rating action.
Ratings Rationale
The principal methodology used in rating Generac was the Global
Manufacturing Industry Methodology published in December 2010.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Generac Power Systems, Inc. is a leading designer and manufacturer
of a wide range of generators and other engine powered products in
U.S. and Canada. The company has approximately 2,223 employees and
had $1.0 billion in revenues for the LTM period ended March 31,
2012.
GENERAL MOTORS: Moody's Affirms 'Ba1' Coro. Family Rating
---------------------------------------------------------
Moody's Investors Service affirmed the Ba1 Corporate Family Rating
of General Motors Company (GM), and is maintaining a positive
rating outlook. "GM's credit quality continues to improve and the
company remains on track to regain an investment grade credit
rating over the course of the next 12 months," said Bruce Clark,
Senior Vice President and Moody's lead analyst for the North
American auto industry.
GM's Ba1 Corporate Family Rating (CFR) and positive outlook
reflect the highly competitive North American business model that
the company is expected to maintain as it leverages its improved
cost structure with a steady cadence of new product introductions.
GM's credit profile is also supported by its strong position in
high-growth Asian markets -- particularly China. These strengths
should enable GM to generate credit metrics that could be
supportive of an investment grade rating in the near term. Key
operating challenges incorporated in the current Ba1 rating
include the execution risks associated with maintaining a globally
competitive product portfolio, increasing the use of global
platforms, and improving the competitive position of its European
operations. Important considerations relating to GM's financial
strategy include: the eventual disposition of the US Government's
27% fully-diluted ownership in the company and any possible
shareholder initiatives that GM might undertake in relation to a
sale of the Government's shares, the long-term growth strategy of
GM Financial and the degree of formal and informal support that GM
might provide to the finance operation, and the potential
implications of GM's stated objective to de-risk its pension
exposure. Finally, the rating considers the potential for
volatility in GM's performance in the event of economic pressure
in the US and the possible fallout from the European financial
crisis.
Upward movement in GM's rating could be supported if the company
continues to execute its operating and financial plan, and if
there is moderation in the economic and financial uncertainty in
Europe. These factors, combined with an ability to sustain credit
metrics of the following levels, could contribute to upward
movement in the rating: EBITA/interest exceeding 4.0x, debt/EBITDA
below 3.0x, and EBITA margin approximating 6.0%.
Downward pressure on the rating is not expected in the
intermediate term, but could result from any significant erosion
in the company's ability to execute its operating plan. This
includes maintaining vehicle quality standards, sustaining a
competitive new product roll out cadence, and continuing to
capitalize on growth opportunities in Asia and Latin America. The
company is highly committed to these initiatives and is allocating
considerable resources to support them. An alternative source of
pressure would result from GM retreating from its focus on de-
leveraging its balance sheet and maintaining a healthy liquidity
position. Moody's thinks that an erosion in strategy
implementation or financial policies are unlikely. Nevertheless,
credit metric levels that could reflect stress on the Ba1 rating
level include: EBITA/interest below 2.5x or debt/EBITDA above 4x.
Ratings Rationale
GMF's ratings incorporate one notch of lift from GM ownership and
support, reflecting lack of an explicit guarantee or credit
support agreement but tangible financial support in the form of a
committed unsecured line of credit and a tax deferral agreement.
They also reflect GMF's improved liquidity and funding profile,
improving trend in asset quality and profitability, and increasing
level of integration with GM. On the other hand the ratings also
take into account credit challenges including GMF's monoline and
substantially sub-prime focus, reliance on confidence sensitive
wholesale funding, and high encumbered asset levels, as well as
execution risks associated with its expanding leasing programs in
the US and Canada and entry into commercial lending services for
GM dealers.
An upgrade in GMF's ratings could result from: more robust
explicit support from GM, e.g. via the execution of a strong
support agreement and/or enhancement of financial support through
contributions, advances, or other meaningful actions; and/or an
increasing level of integration with GM - evidenced by continued
growth in captive volumes -- leading to a more diversified base of
business (e.g. through the buildup of prime leasing and commercial
lending), a significantly higher level of prime quality
receivables in the business mix, and reduced asset quality and
earnings volatility for GMF.
Evidence of removal of GM support and/or material deterioration of
GMF's asset quality, capital or liquidity measures could result in
a downward movement in the ratings.
The principal methodology used in rating General Motors Company
was the Global Automobile Manufacture 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 (and/or) the
Government-Related Issuers methodology published in July 2010.
GMF provides auto finance solutions through auto dealers across
the United States and Canada. GMF has approximately 3,600
employees, 770,000 customers and $11 billion in auto receivables
and leased vehicles. The Company is a wholly owned subsidiary of
GM and is headquartered in Fort Worth, Texas.
GIRA POLLI: Case Summary & 15 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Gira Polli of Mill Valley, LP
590 E. Blithedale Avenue
Mill Valley, CA 94941
Tel: (415) 383-6040
Bankruptcy Case No.: 12-31524
Chapter 11 Petition Date: May 21, 2012
Court: U.S. Bankruptcy Court
Northern District of California (San Francisco)
Judge: Dennis Montali
Debtor's Counsel: Cory A. Birnberg, Esq.
LAW OFFICES OF BIRNBERG AND ASSOCIATES
1083 Mission Street, 3rd Floor
San Francisco, CA 94103
Tel: (415) 398-1040
Fax: (415) 398-2001
E-mail: birnberg@birnberg.com
Scheduled Assets: $2,888,200
Scheduled Liabilities: $2,330,890
A copy of the Company's list of its 15 largest unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/canb12-31524.pdf
The petition was signed by Norine Ferrante, partner.
GLAZIER GROUP: Court Enters Final Decree Closing the Ch. 11 Case
----------------------------------------------------------------
The Hon. Allan L. Gropper of the U.S. Bankruptcy Court for the
Southern District of New York entered a final decree closing The
Glazier Group, Inc.'s Chapter 11 case.
As reported in the Troubled Company Reporter on Feb. 29, 2012, an
order confirming GGI's plan of reorganization was entered on
Dec. 13, 2011. The Plan became effective on Jan. 13, 2012.
Paragraph 30 of the Confirmation Order provides that "On the
Effective Date, and upon completion of the Distributions to be
made and transactions to be effected on such date, the Plan shall
have been deemed to be substantially consummated under Sections
1101 and 1127 of the Bankruptcy Code."
The Reorganized Debtor informed the Court that substantial
consummation of the Plan has occurred.
About The Glazier Group
New York-based The Glazier Group, Inc., filed for Chapter 11
bankruptcy protection (Bankr. S.D.N.Y. Case No. 10-16099) on
Nov. 15, 2010. The Company disclosed assets of $15.2 million and
liabilities of $26.8 million as of the Petition Date.
Frederick E. Schmidt, Esq., Joshua Joseph Angel, Esq., and Seth F.
Kornbluth, Esq., at Herrick, Feinstein LLP, represent the Debtor
in its restructuring effort. John Dunne of Renewal Ventures, LLC,
is the Debtor's Chief Restructuring Officer.
Ronald J. Friedman, Esq., Katina Brountzas, Esq., and Sheryl P.
Busell, Esq., at SilvermanAcampora LLP, in Jericho, New York,
represent the Official Committee of Unsecured Creditors. FTI
Consulting, Inc., serves as the Official Committee of Unsecured
Creditors' financial advisor.
Glazier Group provides restaurant management and support services
to non-debtor affiliates including but not limited to accounting,
human resources, purchasing, public relations, maintenance,
culinary and executive management.
GREEN ISLAND: Moody's Lowers Rating on Revenue Bonds to 'Ba1'
-------------------------------------------------------------
Moody's Investors Service has downgraded Green Island Power
Authority's (GIPA) Power System Revenue Bonds to Ba1 from Baa3.
The negative outlook remains in place.
Ratings Rationale
The downgrade reflects the authority's continued depletion of cash
reserves amid weaker hydrogenation revenues that the authority
earns through sales of hydrogenation in the wholesale power
market. The downgrade also reflects GIPA's difficulties in
improving its overall liquidity profile from the prior year period
notwithstanding a New York Public Service Commission-approved rate
order that was designed to increase revenues and ultimately
stabilize the authority's liquidity position.
Strengths
* Monopoly provider of essential electric service, albeit in a
limited service territory with unknown credit quality
* Competitive retail rates facilitated by a long-term contract
for electricity supplied by the New York State Power Authority
(NYPA rated Aa2) through 2025
* Favorable operating history over the years at the hydro
facility
* Strong historical water flow data and large water basin limit
low-water flow risks typical of run-of-the-river hydro facilities
Challenges
* Debt service coverage on a net revenue recurring basis below
1.0 times for three consecutive years
* Authority is captive to volatile wholesale market prices for
hydro generated sales
* Steady decline in capitol region wholesale power prices for the
past several years
* Rate regulation constrains the authority's ability to timely
and sufficiently increase rates to boost liquidity
* Extremely limited history of successful rate hearings
* Supplemental power supply contract with the New York Municipal
Power Authority (NYMPA) prevents GIPA from using its own hydro
electricity until contract expiration in December 2013, which will
now extend until 2014 given two-year notice period
* Potential costly replacement for turbine blades and equipment
as rotor and blades have not been replaced since operations began
in 1923
Outlook
The maintenance of the negative outlook reflects near- to mid-term
uncertainty on GIPA's ability to improve its liquidity profile
given time for cost-saving measures to take full effect as well as
uncertainty as to how much these cost-cutting efforts can offset
contractual weaknesses. The negative outlook also reflects
uncertain extent of and timing FEMA funding to cover damage to the
hydro facility from Hurricane Irene.
What Could Make the Rating Go Up
The rating is unlikely to experience upward pressure given the
fundamental pressures facing GIPA and the negative outlook. The
rating could be stabilized should GIPA demonstrate noticeably
improved liquidity and achieve debt service coverage above 1.0
times on a recurring revenue basis.
What Could Make the Rating Go Down
The rating could face downward pressure if the authority's
liquidity profile declines below existing levels; if GIPA does not
meet rate covenant compliance; or if GIPA rapidly expands the
hydro facility and undertakes extensive capital expenditures
without beneficial long-term off-take contracts with reputable
counterparties.
The principal methodology used in this rating was U.S. Public
Power Electric Utilities published in April 2008.
HARBOUR EAST DEV'T: Court Approves Global Accord With Lender
------------------------------------------------------------
Bankruptcy Judge A. Jay Cristol approved a global settlement of
all of the remaining adversary proceedings and contested matters
between the Chapter 7 estate of Harbour East Development, Ltd.,
and its secured creditor and mortgage holder 7935 NBV, LLC, in
exchange for a cash payment of $50,000 from NBV. NBV has agreed
not to participate in any distribution of the Settlement Amount.
Joel Tabas, the Chapter 7 trustee, sought approval of the accord.
The Debtor and certain of the Debtor's estate professionals that
are the holders of chapter 11 administrative claims against the
Estate objected, arguing that the "likely net recovery to the
[E]state" if the Chapter 7 Trustee were to pursue (a) avoidance of
NBV's lien on the Debtor's remaining personal property, (b) the
avoidance of NBV's lien on purchaser deposits, (c) a surcharge
claim pursuant to 11 U.S.C. Sec. 506(c), and (d) appeal of a state
court foreclosure judgment would "be much greater than $50,000".
The Objecting Parties assert the settlement falls below the lowest
point in the range of reasonableness and should be denied.
The objecting professionals are Bauch & Michaels, LLC, Genovese
Joblove & Battista, P.A., Meland Russin & Budwick, and Analytic
Consulting Group.
In approving the accord, Judge Cristol said, "although the Court
is sensitive to the concerns raised by the Objecting Parties, it
is not the role of this Court to substitute its own business
judgment for that of the [Chapter 7] Trustee."
A copy of the Court's May 21, 2012 Memorandum Opinion and Order is
available at http://is.gd/K2W0IUfrom Leagle.com.
About Harbour East Development
Harbour East Development, Ltd., was the developer and owner of the
luxury residential condominium development known as CIELO on the
Bay located at 7935 East Drive, North Bay Village. CIELO contains
35 residential condominium units.
Harbour East filed for Chapter 11 bankruptcy (Bankr. S.D. Fla.
Case No. 10-20733) on April 22, 2010. Michael L. Schuster, Esq.,
who has an office in Miami, Florida, represents the Debtor. The
Company estimated assets and debts at $10 million to $50 million,
as of the Chapter 11 filing.
On Dec. 29, 2011, the bankruptcy judge entered an order denying
confirmation of the Debtor's Third Amended Plan of Reorganization,
filed Nov. 4, 2011, and converting the Debtor's Chapter 11 case to
a case under Chapter 7. Joel L. Tabas was appointed Chapter 7
Trustee. He may be reached at:
Joel L. Tabas, Esq.
TABAS, FREEDMAN, SOLOFF, MILLER & BROWN, P.A.
14 Northeast First Avenue-Penthouse
Miami, FL 33132
Tel: (305) 375-8171
Fax: (305) 381-7708
E-mail: JTabas@tabasfreedman.com
HARDAGE HOTELS: Amends Schedules of Assets and Liabilities
----------------------------------------------------------
Hardage Hotels I, LLC, filed with the U.S. Bankruptcy Court for
the Western District of Texas an amendment to its schedules of
assets and liabilities. It changed its total assets to
$39,203,540 and its total liabilities to $31,119,611. As reported
in the Troubled Company Reporter on April 19, 2012, the Debtor
previously disclosed $39,354,056 in total assets and $31,088,835
in total liabilities.
In its amended schedules, the Debtor disclosed:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $36,000,000
B. Personal Property $3,203,540
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $13,938,328
E. Creditors Holding
Unsecured Priority
Claims $955,962
F. Creditors Holding
Unsecured Non-priority
Claims $16,225,321
----------- -----------
TOTAL $39,203,540 $31,119,611
A full-text copy of the amended schedules is available for free
at http://bankrupt.com/misc/HARDAGE_HOTELS_sal_amended.pdf
About Hardage Hotels
Hardage Hotels I, LLC, filed for Chapter 11 bankruptcy (Bankr.
W.D. Tex. Case No. 12-30443) on March 6, 2012. The petition was
signed by Samuel A. Hardage, president. Hardage is a hotel and
real estate development company headquartered in San Diego,
California.
Hardage operates seven hotels in seven states under the brand of
"Chase Suites". The hotels are located in El Paso, Texas;
Overland Park, Kansas; Newark, California; Kansas City, Missouri;
Des Moines, Iowa; Lincoln, Nebraska; and Dublin, Ohio. Hardage
operates the hotels under the "Chase Suites" name pursuant to
franchise agreements with Hardage Hospitality, LLC. The Debtor
has no employees -- all employees at the hotels are employed by
non-debtor Hardage Hospitality, which provides hotel management
services.
The Debtor has outstanding secured debt of $34.2 million plus
interest. The lenders are OneWest Bank, FSB; California First
National Bank, N.A., and Security Bank of Kansas City. OneWest
is the lender under a $5.74 million Dublin loan agreement, a
$5.3 million Lincoln loan agreement, and an $11.5 million El Paso
loan agreement.
Hardage was forced to file for bankruptcy when Hardage reached an
out-of-court restructuring of its debts with OneWest and then
OneWest reneged on its commitment. In September 2010, OneWest
filed a collection against Hardage and sought the appointment of a
receiver over the El Paso property. A receivership order was
entered but was vacated, although Hardage was ordered to make
payments to OneWest. The parties then entered into a series of
tolling agreements, under which Hardage paid OneWest $700,000 so
that OneWest would not pursue any further action. Following
negotiations, the parties signed a "final term sheet" on a
restructuring on Dec. 2, 2011.
But, according to the Debtor, OneWest reneged on the agreement.
In November, OneWest sought foreclosure of, and a receiver for,
the Dublin and El Paso properties.
The Debtor on March 5, 2012, initiated a lawsuit against OneWest
in the Superior Court of the State of California for the County of
Los Angeles, Central District. The suit alleges several causes of
action, including fraud and breach of contract.
Judge H. Christopher Mott presides over the Chapter 11 case. The
Debtor has tapped Haynes and Boone LLP as attorneys, and
Transitional Finance Partners LLC as financial advisor.
Brinkman Portillo Ronk, PC, serves as counsel to the Official
Committee of Unsecured Creditors.
No trustee or examiner has been requested or appointed in this
Chapter 11 case.
HARDAGE HOTELS I: Can Hire Haynes and Boone as Chapter 11 Counsel
-----------------------------------------------------------------
Hardage Hotels I, LLC, obtained permission from the Hon. H.
Christopher Mott of the U.S. Bankruptcy Court for the Western
District of Texas to employ Haynes and Boone, LLP, as bankruptcy
counsel.
As reported by the Troubled Company Reporter on March 20, 2012,
Haynes and Boone was initially engaged on a pre-petition basis to
provide advice concerning financial restructuring to the Debtor.
Haynes and Boone has expended significant resources over the past
few weeks working with the Debtor to prepare for the possibility
that the bankruptcy case might be filed. In the process, Haynes
and Boone has become very familiar with the Debtor's business
operations and financial affairs and many of the legal issues that
will likely arise in the context of the Chapter 11 case. Haynes
and Boone was retained to represent the Debtor on Feb. 14,
2012.
About Hardage Hotels I
Hardage Hotels I, LLC, filed for Chapter 11 bankruptcy (Bankr.
W.D. Tex. Case No. 12-30443) on March 6, 2012. The petition was
signed by Samuel A. Hardage, president. Hardage is a hotel and
real estate development company headquartered in San Diego,
California.
Hardage operates seven hotels in seven states under the brand of
"Chase Suites". The hotels are located in El Paso, Texas;
Overland Park, Kansas; Newark, California; Kansas City, Missouri;
Des Moines, Iowa; Lincoln, Nebraska; and Dublin, Ohio. Hardage
operates the hotels under the "Chase Suites" name pursuant to
franchise agreements with Hardage Hospitality, LLC. The Debtor
has no employees -- all employees at the hotels are employed by
non-debtor Hardage Hospitality, which provides hotel management
services.
The Debtor has outstanding secured debt of $34.2 million plus
interest. The lenders are OneWest Bank, FSB; California First
National Bank, N.A., and Security Bank of Kansas City. OneWest is
the lender under a $5.74 million Dublin loan agreement, a $5.3
million Lincoln loan agreement, and an $11.5 million El Paso loan
agreement.
Hardage was forced to file for bankruptcy when Hardage reached an
out-of-court restructuring of its debts with OneWest and then
OneWest reneged on its commitment. In September 2010, OneWest
filed a collection against Hardage and sought the appointment of a
receiver over the El Paso property. A receivership order was
entered but was vacated, although Hardage was ordered to make
payments to OneWest. The parties then entered into a series of
tolling agreements, under which Hardage paid OneWest $700,000 so
that OneWest would not pursue any further action. Following
negotiations, the parties signed a "final term sheet" on a
restructuring on Dec. 2, 2011.
But, according to the Debtor, OneWest reneged on the agreement.
In November, OneWest sought foreclosure of, and a receiver for,
the Dublin and El Paso properties.
The Debtor on March 5, 2012, initiated a lawsuit against OneWest
in the Superior Court of the State of California for the County of
Los Angeles, Central District. The suit alleges several causes of
action, including fraud and breach of contract.
Judge H. Christopher Mott presides over the Chapter 11 case. The
Debtor has tapped Haynes and Boone LLP as attorneys, and
Transitional Finance Partners LLC as financial advisor.
In its schedules, the Debtor disclosed $39,203,540 in total assets
and $31,119,611 in total liabilities.
Brinkman Portillo Ronk, PC, serves as counsel to the Official
Committee of Unsecured Creditors.
No trustee or examiner has been requested or appointed in this
Chapter 11 case.
HARDAGE HOTELS I: Court OKs Cappello & Noel as Litigation Counsel
-----------------------------------------------------------------
The Hon. H. Christopher Mott of the U.S. Bankruptcy Court for the
Western District of Texas granted Hardage Hotels I, LLC,
permission to employ Cappello & Noel as litigation counsel nunc
pro tunc to the Petition Date.
As reported by the Troubled Company Reporter on April 20, 2012,
Cappello will represent the Debtor in its lawsuit against OneWest
Bank FSB, filed on March 5, 2012, and pending in the Superior
Court of the State of California for the County of Los Angeles,
Central District.
About Hardage Hotels
Hardage Hotels I, LLC, filed for Chapter 11 bankruptcy (Bankr.
W.D. Tex. Case No. 12-30443) on March 6, 2012. The petition was
signed by Samuel A. Hardage, president. Hardage is a hotel and
real estate development company headquartered in San Diego,
California.
Hardage operates seven hotels in seven states under the brand of
"Chase Suites". The hotels are located in El Paso, Texas;
Overland Park, Kansas; Newark, California; Kansas City, Missouri;
Des Moines, Iowa; Lincoln, Nebraska; and Dublin, Ohio. Hardage
operates the hotels under the "Chase Suites" name pursuant to
franchise agreements with Hardage Hospitality, LLC. The Debtor
has no employees -- all employees at the hotels are employed by
non-debtor Hardage Hospitality, which provides hotel management
services.
The Debtor has outstanding secured debt of $34.2 million plus
interest. The lenders are OneWest Bank, FSB; California First
National Bank, N.A., and Security Bank of Kansas City. OneWest
is the lender under a $5.74 million Dublin loan agreement, a
$5.3 million Lincoln loan agreement, and an $11.5 million El Paso
loan agreement.
Hardage was forced to file for bankruptcy when Hardage reached an
out-of-court restructuring of its debts with OneWest and then
OneWest reneged on its commitment. In September 2010, OneWest
filed a collection against Hardage and sought the appointment of a
receiver over the El Paso property. A receivership order was
entered but was vacated, although Hardage was ordered to make
payments to OneWest. The parties then entered into a series of
tolling agreements, under which Hardage paid OneWest $700,000 so
that OneWest would not pursue any further action. Following
negotiations, the parties signed a "final term sheet" on a
restructuring on Dec. 2, 2011.
But, according to the Debtor, OneWest reneged on the agreement.
In November, OneWest sought foreclosure of, and a receiver for,
the Dublin and El Paso properties.
The Debtor on March 5, 2012, initiated a lawsuit against OneWest
in the Superior Court of the State of California for the County of
Los Angeles, Central District. The suit alleges several causes of
action, including fraud and breach of contract.
Judge H. Christopher Mott presides over the Chapter 11 case. The
Debtor has tapped Haynes and Boone LLP as attorneys, and
Transitional Finance Partners LLC as financial advisor.
In its schedules, the Debtor disclosed $39,203,540 in total assets
and $31,119,611 in total liabilities.
Brinkman Portillo Ronk, PC, serves as counsel to the Official
Committee of Unsecured Creditors.
No trustee or examiner has been requested or appointed in this
Chapter 11 case.
HARDAGE HOTELS I: Creditors' Panel Wants Brinkman as Counsel
------------------------------------------------------------
The Official Committee of Unsecured Creditors of Hardage Hotels I,
LLC, asks for authorization from the U.S. Bankruptcy Court for the
Western District of Texas to employ and retain Brinkman Portillo
Ronk, PC, as counsel, effective as of April 10, 2012.
BPR will, among other things, assist the Committee in
investigating the acts, conduct, assets, liabilities, and
financial condition of the Debtor, the operation of the Debtor's
business, potential claims, and any other matters relevant to the
case, to the sale of assets or to the formulation of a plan of
reorganization for these hourly rates:
Daren R. Brinkman, Partner $575
Laura J. Portillo, Partner $495
Kevin C. Ronk, Partner $390
Associate Attorneys $330
Paralegals and Law Clerks $175
To the best of the Committee's knowledge, BPR is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
BPR can be reached at:
Daren R. Brinkman
Brinkman Portillo Ronk, PC
4333 Park Terrace Drive, Suite 205
Westlake Village, CA 91361
Tel: (818) 597-2992
Fax: (818) 597-2998
E-mail: firm@brinkmanlaw.com
About Hardage Hotels I
Hardage Hotels I, LLC, filed for Chapter 11 bankruptcy (Bankr.
W.D. Tex. Case No. 12-30443) on March 6, 2012. The petition was
signed by Samuel A. Hardage, president. Hardage is a hotel and
real estate development company headquartered in San Diego,
California.
Hardage operates seven hotels in seven states under the brand of
"Chase Suites". The hotels are located in El Paso, Texas;
Overland Park, Kansas; Newark, California; Kansas City, Missouri;
Des Moines, Iowa; Lincoln, Nebraska; and Dublin, Ohio. Hardage
operates the hotels under the "Chase Suites" name pursuant to
franchise agreements with Hardage Hospitality, LLC. The Debtor
has no employees -- all employees at the hotels are employed by
non-debtor Hardage Hospitality, which provides hotel management
services.
The Debtor has outstanding secured debt of $34.2 million plus
interest. The lenders are OneWest Bank, FSB; California First
National Bank, N.A., and Security Bank of Kansas City. OneWest is
the lender under a $5.74 million Dublin loan agreement, a $5.3
million Lincoln loan agreement, and an $11.5 million El Paso loan
agreement.
Hardage was forced to file for bankruptcy when Hardage reached an
out-of-court restructuring of its debts with OneWest and then
OneWest reneged on its commitment. In September 2010, OneWest
filed a collection against Hardage and sought the appointment of a
receiver over the El Paso property. A receivership order was
entered but was vacated, although Hardage was ordered to make
payments to OneWest. The parties then entered into a series of
tolling agreements, under which Hardage paid OneWest $700,000 so
that OneWest would not pursue any further action. Following
negotiations, the parties signed a "final term sheet" on a
restructuring on Dec. 2, 2011.
But, according to the Debtor, OneWest reneged on the agreement.
In November, OneWest sought foreclosure of, and a receiver for,
the Dublin and El Paso properties.
The Debtor on March 5, 2012, initiated a lawsuit against OneWest
in the Superior Court of the State of California for the County of
Los Angeles, Central District. The suit alleges several causes of
action, including fraud and breach of contract.
Judge H. Christopher Mott presides over the Chapter 11 case. The
Debtor has tapped Haynes and Boone LLP as attorneys, and
Transitional Finance Partners LLC as financial advisor.
In its schedules, the Debtor disclosed $39,203,540 in total assets
and $31,119,611 in total liabilities.
No trustee or examiner has been requested or appointed in this
Chapter 11 case.
HARDAGE HOTELS I: Gets Nod to Hire Transitional Finance as Advisor
------------------------------------------------------------------
The Hon. H. Christopher Mott of the U.S. Bankruptcy Court for the
Western District of Texas granted Hardage Hotels I, LLC,
authorization to employ Transitional Finance Partners, LLC, as
financial advisor pursuant to the terms of an engagement letter
dated March 6, 2012.
As reported by the Troubled Company Reporter on March 20, 2012,
Hardage needs TFP to assist it in the evaluation of strategic
alternatives and to render financial advisory and consulting
services to Hardage in connection with its restructuring efforts.
About Hardage Hotels
Hardage Hotels I, LLC, filed for Chapter 11 bankruptcy (Bankr.
W.D. Tex. Case No. 12-30443) on March 6, 2012. The petition was
signed by Samuel A. Hardage, president. Hardage is a hotel and
real estate development company headquartered in San Diego,
California.
Hardage operates seven hotels in seven states under the brand of
"Chase Suites". The hotels are located in El Paso, Texas;
Overland Park, Kansas; Newark, California; Kansas City, Missouri;
Des Moines, Iowa; Lincoln, Nebraska; and Dublin, Ohio. Hardage
operates the hotels under the "Chase Suites" name pursuant to
franchise agreements with Hardage Hospitality, LLC. The Debtor
has no employees -- all employees at the hotels are employed by
non-debtor Hardage Hospitality, which provides hotel management
services.
The Debtor has outstanding secured debt of $34.2 million plus
interest. The lenders are OneWest Bank, FSB; California First
National Bank, N.A., and Security Bank of Kansas City. OneWest
is the lender under a $5.74 million Dublin loan agreement, a
$5.3 million Lincoln loan agreement, and an $11.5 million El Paso
loan agreement.
Hardage was forced to file for bankruptcy when Hardage reached an
out-of-court restructuring of its debts with OneWest and then
OneWest reneged on its commitment. In September 2010, OneWest
filed a collection against Hardage and sought the appointment of a
receiver over the El Paso property. A receivership order was
entered but was vacated, although Hardage was ordered to make
payments to OneWest. The parties then entered into a series of
tolling agreements, under which Hardage paid OneWest $700,000 so
that OneWest would not pursue any further action. Following
negotiations, the parties signed a "final term sheet" on a
restructuring on Dec. 2, 2011.
But, according to the Debtor, OneWest reneged on the agreement.
In November, OneWest sought foreclosure of, and a receiver for,
the Dublin and El Paso properties.
The Debtor on March 5, 2012, initiated a lawsuit against OneWest
in the Superior Court of the State of California for the County of
Los Angeles, Central District. The suit alleges several causes of
action, including fraud and breach of contract.
Judge H. Christopher Mott presides over the Chapter 11 case. The
Debtor has tapped Haynes and Boone LLP as attorneys, and
Transitional Finance Partners LLC as financial advisor.
In its schedules, the Debtor disclosed $39,203,540 in total assets
and $31,119,611 in total liabilities.
Brinkman Portillo Ronk, PC, serves as counsel to the Official
Committee of Unsecured Creditors.
No trustee or examiner has been requested or appointed in this
Chapter 11 case.
HARDAGE HOTELS I: Has OK to Hire Kemp Smith as Special Counsel
--------------------------------------------------------------
Hardage Hotels I, LLC, obtained permission from the Hon. H.
Christopher Mott of the U.S. Bankruptcy Court for the Western
District of Texas to employ Kemp Smith LLP as special counsel.
As reported by the Troubled Company Reporter on April 20, 2012,
the Debtor sought to retain Kemp Smith, a law firm based in Texas,
to represent it in litigation with OneWest Bank, FSB, in El Paso,
Texas.
About Hardage Hotels
Hardage Hotels I, LLC, filed for Chapter 11 bankruptcy (Bankr.
W.D. Tex. Case No. 12-30443) on March 6, 2012. The petition was
signed by Samuel A. Hardage, president. Hardage is a hotel and
real estate development company headquartered in San Diego,
California.
Hardage operates seven hotels in seven states under the brand of
"Chase Suites". The hotels are located in El Paso, Texas;
Overland Park, Kansas; Newark, California; Kansas City, Missouri;
Des Moines, Iowa; Lincoln, Nebraska; and Dublin, Ohio. Hardage
operates the hotels under the "Chase Suites" name pursuant to
franchise agreements with Hardage Hospitality, LLC. The Debtor
has no employees -- all employees at the hotels are employed by
non-debtor Hardage Hospitality, which provides hotel management
services.
The Debtor has outstanding secured debt of $34.2 million plus
interest. The lenders are OneWest Bank, FSB; California First
National Bank, N.A., and Security Bank of Kansas City. OneWest
is the lender under a $5.74 million Dublin loan agreement, a
$5.3 million Lincoln loan agreement, and an $11.5 million El Paso
loan agreement.
Hardage was forced to file for bankruptcy when Hardage reached an
out-of-court restructuring of its debts with OneWest and then
OneWest reneged on its commitment. In September 2010, OneWest
filed a collection against Hardage and sought the appointment of a
receiver over the El Paso property. A receivership order was
entered but was vacated, although Hardage was ordered to make
payments to OneWest. The parties then entered into a series of
tolling agreements, under which Hardage paid OneWest $700,000 so
that OneWest would not pursue any further action. Following
negotiations, the parties signed a "final term sheet" on a
restructuring on Dec. 2, 2011.
But, according to the Debtor, OneWest reneged on the agreement.
In November, OneWest sought foreclosure of, and a receiver for,
the Dublin and El Paso properties.
The Debtor on March 5, 2012, initiated a lawsuit against OneWest
in the Superior Court of the State of California for the County of
Los Angeles, Central District. The suit alleges several causes of
action, including fraud and breach of contract.
Judge H. Christopher Mott presides over the Chapter 11 case. The
Debtor has tapped Haynes and Boone LLP as attorneys, and
Transitional Finance Partners LLC as financial advisor.
In its schedules, the Debtor disclosed $39,203,540 in total assets
and $31,119,611 in total liabilities.
Brinkman Portillo Ronk, PC, serves as counsel to the Official
Committee of Unsecured Creditors.
No trustee or examiner has been requested or appointed in this
Chapter 11 case.
HERCULES PUBLIC: S&P Affirms 'BB' Ratings on Revenue Bonds
----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB' ratings on
the Hercules Public Financing Authority, Calif.'s series 2010
(electric system project) revenue bonds, series 2003B lease
revenue bonds, and series 2009 taxable lease revenue bonds (Bio-
Rad Project) issued for the city of Hercules. The ratings are
removed from CreditWatch, where they had been placed with negative
implications Feb. 6, 2012. The outlook is stable.
"The removal from CreditWatch reflects our understanding from city
officials that Hercules is no longer contemplating bankruptcy
after it and Ambac Assurance Corp. reached a settlement on a
dispute over redevelopment agency tax increment revenue," said
Standard & Poor's credit analyst Sussan Corson. "The settlement
involves the attachment of certain redevelopment agency (RDA)
properties that the city intends to sell to satisfy Ambac's claim
on $4 million of tax increment revenue."
The ratings also reflect S&P's assessment of the city's:
- Recent and projected declines in reserves and liquidity
because of overspending in the redevelopment fund and lower
general fund and property tax increment revenue;
- Practice of pooling cash across all of its funds, which S&P
believes has exposed the city's general fund financial and
liquidity position to overspending of its former RDA;
- Additional potential fiscal pressure related to audit findings
by the state controller that could require the repayment of $2
million of state and federal funds in the future;
- High overlapping debt burden after including RDA debt; and
- "Failure to apply pledged property tax revenue to RDA debt
service due Feb. 1, 2012, as the successor agency to the RDA,
which raises questions about the city's willingness to pay its
general fund debt, although we understand the city has
continued to pay its own debt service to date," S&P said.
"Partly offsetting the weaknesses, in our view, are the city's
proactive reduction of general fund expenditures by 30% in one
year, its strong income, and its access to employment
opportunities in the greater San Francisco Bay Area," S&P said.
HOLDINGS GAMING: Moody's Upgrades Corp Family Rating to 'Caa1'
--------------------------------------------------------------
Moody's Investors Service on May 22 upgraded Holdings Gaming
Borrower, L.P.'s ("HGB", to be named "Rivers Pittsburgh Borrower,
L.P.") ratings, including its Corporate Family Rating (CFR) and
Probability of Default rating (PDR) to Caa1 from Caa2, reflecting
continued improvement in its operating performance and credit
metrics. At the same time, Moody's assigned a B1 rating to the
company's proposed $15.0 million first lien 5-year senior secured
revolver, a B1 rating to the $160 million first lien 5-year senior
secured term loan and a Caa1 rating to the $300 million second
lien 7-year senior secured notes. Proceeds from the new facilities
combined with cash on hand will be used to refinance the existing
first lien term loan, redeem senior preferred equity interests,
pay accrued management and incentive fees, and pay for transaction
costs incurred.
All ratings, including HGB's CFR and ratings on the refinancing
facilities are under review for possible upgrade. If the proposed
transaction is completed as planned, Moody's would raise HGB's
ratings by one notch, including its CFR (to B3 from Caa1) and
ratings on the newly assigned refinancing debt instruments (to Ba3
for the bank facilities and to B3 for the secured notes), subject
to Moody's review of final terms and conditions. Conversely, if
the transaction does not close or the final closing conditions
deviate materially from Moody's expectation, the CFR will likely
be confirmed at Caa1.
The review for possible further upgrade incorporates Moody's view
that the proposed refinancing would result in an improved capital
structure by significantly lowering the company's overall cost of
capital due to the elimination of the high coupon (27.5%) Senior
Preferred Interests. In addition, as contemplated in the new
credit agreement and proposed indenture, the refinancing would
allow the company to de-lever over the next several years by using
excess free cash flow to prepay up to 10% of the Second Lien Notes
per year over the next 3 years in addition to the mandatory
principal amortization on the bank loan.
Ratings upgraded and kept on review for possible upgrade:
Corporate Family Rating - to Caa1 from Caa2
Probability of Default Rating - to Caa1 from Caa2
Rating upgraded and will be withdrawn upon closing:
$303.5 million first lien term loan due 2013 -- to B1(LGD2, 14%)
from B3 (LGD2, 24%)
Ratings assigned and kept on review for possible upgrade:
$15.0 million first lien senior secured revolver due 2017 at B1
(LGD1, 9%)
$160 million first lien senior secured term loan due 2017 at B1
(LGD1, 9%)
$300 million second lien senior secured notes due 2019 at Caa1
(LGD4, 52%)
Ratings Rationale
HGB's CFR of Caa1 reflects Moody's favorable view of HGB's recent
operating results and expectation that the performance will likely
remain resilient despite the increasing future competition. HGB's
sole gaming property -- Rivers Casino in Pittsburgh, witnessed
strong revenue and EBITDA growth in the past year, fueled by
continued growth in both slots and table games revenues. Moody's
believes the key catalysts to Rivers' earnings growth, such as
favorable economic trends in its primary Pittsburgh market,
continued growth of customer database and market share gain due to
its premier location and products will likely continue to drive
steady revenue growth over the long run, albeit in the near term,
revenue could be pressured by increased competition including the
May 2012 scheduled opening of Horseshoe Casino in Cleveland, OH.
The post-transaction upgrade will be limited to one notch. Despite
the improved operating performance and the new ability to de-lever
through optional prepayments of its second lien obligations, HGB's
ratings are constrained by its significant financial leverage --
Moody's adjusted debt/EBITDA is around 8.5x pro-forma for the
transaction (incorporating Moody's 100% debt treatment for holding
company unsecured notes and 25% debt treatment for holding company
preferred interests, or 8.0x excluding preferred adjustment).
Moody's expects it will take the company time to reduce
debt/EBITDA at/below 7.0 times -- a level Moody's considers high
given HGB's small, undiversified operations. Assuming HGB's
current level of EBITDA in fiscal 2012 and fiscal 2013, Moody's
expects HGB to generate between $20 million and $30 million of
free cash flow.
Moody's review will focus on the final terms and conditions of the
refinancing, including the interest rates on the refinancing debt
instruments that would affect the free cash flow generation, hence
HGB's ability to delever in the medium term.
Holdings Gaming Borrower, L.P., headquartered in Pittsburgh,
Pennsylvania, owns and operates the Rivers Casino, which opened on
August 9, 2009 in Pittsburgh, Pennsylvania.
The principal rating methodology used in rating Rivers Pittsburgh
Borrower, L.P. was the Global Gaming Industry Methodology,
published December 2009. Other methodologies used include Loss
Given Default for Speculative Grade Issuers in the US, Canada, and
EMEA, published June 2009.
HOLDINGS GAMING: S&P Puts 'CCC+' Corp. Credit Rating on Watch Pos
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'CCC+' corporate
credit rating on Pittsburgh-based Holdings Gaming Borrower L.P.
(a/k/a Rivers Pittsburgh Borrower L.P.), the operator of the
Rivers Casino in Pittsburgh, on CreditWatch with positive
implications.
"In addition, we assigned our preliminary 'BB-' issue-level and
preliminary '1' recovery ratings to the company's proposed new
first-lien senior secured credit facilities, which will consist of
a $15 million revolving credit facility due 2017 and a $160
million term loan A due 2017. We also assigned our preliminary 'B'
issue-level and preliminary '4' recovery ratings to the company's
proposed $300 million second-lien senior secured notes due 2019,"
S&P said.
"The company intends to use the proceeds, along with about $65
million of cash on hand, to repay its existing $302 million of
first-lien debt and approximately $184 million of senior preferred
paid-in-kind (PIK) interests," S&P said.
"The CreditWatch listing reflects our view that the proposed
refinancing would create a more sustainable capital structure and
significantly reduce the company's total interest burden," noted
Standard & Poor's credit analyst Jennifer Pepper.
"We expect that pricing will be more favorable on the new term
loan than the current 12% interest rate on the company's existing
term loan. Additionally, the repayment of the senior preferred
capital, which accrues interest PIK at 27.5%, substantially
reduces future claims on cash," S&P said.
"Gaming revenue at Rivers Casino was up about 28% in 2011 compared
with 2010, primarily because of the benefits of a full year of
table games, added in July 2010. EBITDA also increased
substantially in 2011 over a modest base in the prior-year period,
as the property continued to ramp up. Performance in the first
quarter of 2012 was also strong, with gaming revenue and EBITDA up
11% and 24%," S&P said.
"Given solid operating performance and the high quality of the
asset, we believe the Rivers casino has a defensible competitive
position in the Pittsburgh market. Still, our 2012 forecast for
roughly flat gaming revenues and $75 million to $80 million of
EBITDA takes into consideration new competition entering the
region. Specifically, we believe the Horseshoe Cleveland, which
recently opened and is only about 115 miles from Pittsburgh, will
have an impact on the second half of 2012. Based on our
performance expectations for 2012 and pro forma for the proposed
refinancing, we expect adjusted leverage (including approximately
$150 million of 5% PIK unsecured notes due 2030 held by third
parties) to be in the low-8x area. Excluding the unsecured debt,
we expect leverage in the low-6x area. We expect EBITDA coverage
of cash interest to remain above 2x in the intermediate term, and
EBITDA coverage of total interest to remain above 1.5x, pro forma
for the proposed refinancing," S&P said.
"For 2013, we expect relatively flat revenue and EBITDA compared
with 2012, as competitive pressures should normalize by the middle
of the year, and we believe performance thereafter will be more
aligned with our economists' current expectations for modest
growth in key measures like real GDP and consumer spending. We
also expect the company will take advantage of a 10% annual
prepayment provision in the new notes beginning in 2013, which
would more than offset the accretion on the unsecured notes,
resulting in leverage improving to below 8x in 2013 (below 6x
excluding the unsecured notes)," S&P said.
"It is our preliminary expectation that we would raise our
corporate credit rating to 'B' if the proposed transaction is
executed, pending our review of final documentation. At that time,
we would also finalize our preliminary ratings on the new credit
facility and new notes," S&P said.
HOPE MEDICAL: Has $1.26 Million Loan From IASIS/Wadley
------------------------------------------------------
Ken McLemore at Hope Star reports U.S. Bankruptcy Judge James G.
Mixon will convene a hearing May 25 to consider approval of
postpetition financing for Hope Medical Park Hospital, LLC. IASIS
Finance, Inc., an affiliate of Wadley Regional Medical Center,
committed to provide up to $1.26 million. IASIS/Wadley also eyes
buying the Medical Park Hospital.
According to the report, court approval of the financing will
provide the hospital's receiver, Jack Spencer, the ability to use
cash collateral in financing operations at the hospital; will
subordinate all liens and claims in bankruptcy to the first claim
of IASIS/Wadley; and, will protect the hospital assets from
garnishment or sale, including a pending state tax sale of the
hospital's real estate set for May 24.
The report notes papers filed in Court indicate IASIS/Wadley owns
secured mortgage obligations of the hospital, which are in excess
of $4 million, and that some $415,000 in real estate taxes remain
delinquent. The court documents state IASIS has entered into a
letter of intent to purchase the Medical Park Hospital from the
Debtors, subject to due diligence review and a sale pursuant to
section 363 of the Bankruptcy Code.
According to the report, citing court documents, a wrinkle in the
process appears to be two liens which the hospital owners
allegedly filed against it through other business entities which
they also owned in connection with their operations of the
hospital:
-- On Aug. 24, 2011, Carraway Medical Systems LLC and
Healthstaff Inc. filed financing statements against
Signature Medical Park Hospital, in the state of Wyoming,
on the 'healthcare receivables' of SMPH, "up to a total
of $5.5."
-- On Dec. 23, 2011, Healthstaff filed another financing
statement against SMPH, in Wyoming, on 'healthcare
receivables' up to $1.5 million.
According to papers filed in court, the Debtors' books and records
indicate that the amount of A/R outstanding as of the Petition
Date was roughly $17 million.
The report notes Carraway Medical Systems, which was owned by
James R. Cheek, Herschel Breig, Teddy R. Cheek, and William D.
Bell, Jr., all of Springfield, Mo., formerly managed Medical Park
Hospital, under the ownership of Shiloh Health Services Inc., of
Nevada, SMPH and HMPH, which were owned by James R. Cheek.
Healthstaff was organized in Arkansas in December 2009, according
to state filings in Arkansas, and was doing business as
Healthstaff of Arkansas, Inc., with principal offices in
Springfield, Mo. Mr. Bell is listed as president and secretary of
the company, and James R. Cheek, Teddy R. Cheek, and Messrs. Breig
and Bell are all listed as company directors.
The report also recounts on Aug. 10, 2011, Messrs. Cheek and Breig
were indicted in federal court in Texas on tax charges, in
connection with their ownership of a hospital in Lubbock, Texas.
Both will be sentenced under a pleading agreement there June 15.
The report relates IASIS/Wadley said in court filings that it
intends to challenge the validity of the Carraway and Healthstaff
liens, but will protect them, in the interim, to the extent that
they may be resolved in place of the original mortgage debt owed
by SMPH and HMPH to IASIS after it bought the assets of HMPH from
Signature's successor.
Based in Hope Arkansas Hope Medical Park Hospital LLC fka
Signature Medical Park Hospital LLC and its affiliates filed for
Chapter 11 protection on May 17, 2012 (Bankr. W.D. Ark. Case No.
12-71952). James Akins, Esq., at Smith Akins P.A., represents the
Debtors. The Debtors listed assets of less than $50,000, and
debts of between $1 million and $10 million.
INDIANA FINANCE: S&P Cuts Rating on Revenue Bonds to 'BB+'
----------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term rating to
'BB+' from 'BBB-' on the Indiana Finance Authority's educational
facilities revenue bonds issued on behalf of the Drexel Foundation
for Educational Excellence (Drexel) for the benefit of the Thea
Bowman Charter School (TBLA). The outlook is stable.
"The lowered rating reflects our view of TBLA's weaker operating
performance through the first nine months of fiscal 2012," said
Standard & Poor's credit analyst Shari Sikes. "We believe the
strength and stability of the academy's operation is materially
diminished, as we anticipate that TBLA will not be able to cover
its maximum annual debt service due to significant cuts to state
operating appropriations and systemic administrative issues that
have made the school vulnerable to potential federal funding
losses and state sanctions," Ms. Sikes added.
The Drexel Foundation is a nonprofit corporation founded to
enhance the educational opportunities of inner-city youth. It
currently operates one school, TBLA.
INTELLIGRATED INC: Moody's Upgrades CFR to 'B1'; Outlook Stable
---------------------------------------------------------------
Moody's Investors Service upgraded Intelligrated, Inc.'s Corporate
Family and Probability of Default ratings ("CFR" and "PDR"
respectively) to B1 from B2 as well as ratings on the company's
secured credit facilities which were both raised to B1 (LGD-3,
49%) from B2 (LGD-3, 48%). The actions recognize stronger
revenues, earnings and cash flows achieved over the last year,
resultant lower leverage and improved coverage metrics that have
developed, as well as prospects for those trends to continue over
the intermediate period. The outlook is stable.
Ratings Rationale
Intelligrated achieved significantly higher revenues, earnings and
cash flows over the last twelve months. Combined with a minor
reduction in the company's debt burden as well as prospects that
favorable trends in its market for high speed automated material
handling systems will continue, key credit metrics strengthened
and should continue to do so over coming periods. Those are now
seen as representative of the higher B1 rating category.
The B1 Corporate Family and Probability of Default ratings
recognize the company's modest revenue size but strong position
within a relatively narrow niche. They also consider regional and
customer concentration issues as well as ongoing cyclicality.
Furthermore, they incorporate moderate leverage deployed in the
capital structure, strong coverage metrics for the rating level
and anticipation of sustainable free cash flow. The latter should
benefit from relatively low re-investment requirements for
property, plant and equipment and net operating loss carry-
forwards minimizing future tax outlays.
The company's volumes are driven by capital expenditure plans of
major North American retailers, consumer product manufacturers and
shipping/logistics providers. While a large portion of
Intelligrated's revenues are tied to the level of investment in
new and expanded warehouse and distribution facilities, an
increasing portion of the company's business is tied to projects
that can considerably improve the efficiency of existing
facilities. The bulk of Intelligrated's revenues come from new
equipment and systems sales. However, its business profile
includes an installed base of equipment, establishing a stream of
higher margin customer service, aftermarket revenues and license
fees. Its backlog of orders strengthened over the last twelve
months and provides a degree of revenue visibility. Still, while
overall EBITDA margins have increased, they are fairly modest but
have capacity to expand further as savings from cost reduction
actions are realized.
Over the last year, Intelligrated largely completed expenditures
associated with a major restructuring program initiated following
its earlier acquisition of FKI Logistex Holdings, Inc. At the time
of the acquisition, FKI Logistex was larger than Intelligrated and
incurring operating losses. Expenditures for that initiative
affected 2011's performance and cash flows but set the stage for
further improvement.
The rating also reflects concern over past aggressive financial
policies. Despite a limited track record of material profitability
and free cash flow generation, equity owners received substantial
distributions over the years, much of it funded with debt. The
resulting level of fixed charges could limit future flexibility
should a cyclical downturn occur.
The stable outlook considers prospects for single digit organic
revenue growth over the intermediate period along with steady-to-
increasing profitability as cost savings from the integration and
rationalization program approach their full run-rate. In addition,
the stable outlook is supported by expectations of ongoing free
cash flow.
The ratings or outlook could experience upward pressure should the
company's scale increase, margins appreciably strengthen and
resultant cash flows be used to de-lever the capital structure.
Lower customer concentration in the business model would also be
viewed favorably. Quantitatively this could include EBITA margins
consistently above 8% through the cycle, debt/EBITDA under 3
times, EBITA/interest consistently above 3 times, and FCF/debt
sustained above 7%. Negative pressure on the rating or outlook
could develop should prospects for new orders or Intelligrated's
market share or margins appreciably decline, leading to lower
profitability and slimmer coverage metrics. Debt/EBITDA above 4.5
times, EBITA/interest less than 2 times or several quarters of
negative free cash flow could adversely impact the ratings.
Ratings upgraded:
Corporate Family to B1 from B2
Probability of Default to B1 from B2
$30 million secured revolving credit to B1 (LGD-3, 49%) from B2
(LGD-3, 48%)
$125 million secured term loan to B1 (LGD-3, 49%) from B2 (LGD-3,
48%)
The principal methodology used in rating Intelligrated, Inc. was
the Global Heavy Manufacturing Industry Methodology published in
November 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.
Intelligrated, Inc., headquartered in Mason, OH, manufactures high
speed automated material handling equipment and is owned by
affiliates of Gryphon Investors, Tudor Ventures, and members of
executive management. Annual revenues in 2011 were approximately
$435 million.
JARVIS ADVENTURE: Lawyer Faces Sanctions Over Bankruptcy Filings
----------------------------------------------------------------
Texas lawyer Andrew Haut, Esq., is in hot water after Bankruptcy
Judge Marvin Isgur held Mr. Haut engaged in professional
misconduct in filing bankruptcy petitions in violation of a prior
Bankruptcy Court order.
"His misconduct is not excused and the Court recommends
disciplinary action by the United States District Court for the
Southern District of Texas. The misconduct will also be reported
to the State Bar of Texas," Judge Isgur declared.
Jarvis Adventure Building LLC and Jarvis Adventure Inc. filed
Chapter 11 bankruptcy petitions (Bankr. S.D. Tex. Case Nos. 11-
40231 and 11-40236) on Dec. 5, 2011. John D. Jarvis, the Debtors'
principal, was a joint debtor in both cases. On Jan. 5, 2012,
both cases were dismissed by The Honorable Karen K. Brown with
prejudice to refiling for 60 days. The 2011 cases were filed
without an attorney, one reason among many for their dismissal.
After dismissal of the 2011 cases, Mr. Jarvis hired Mr. Haut as
counsel. On Feb. 6, 2012, Mr. Haut knowingly filed new bankruptcy
petitions (Case Nos. 12-31005 and 12-31011) in direct violation of
Judge Brown's order. The 2012 petitions were made to halt
impending foreclosure.
The day after filing the petitions, the Debtors moved to dismiss
the cases. The motions were denied for failure to set forth cause
for dismissal. In addition, the Court set a status conference for
Feb. 13, 2012 and required the Debtors' principal and counsel to
show cause why they should not be sanctioned for a bad faith
filing in direct violation of Judge Brown's order.
Mr. Haut filed a "Certificate of Good Cause" to demonstrate good
faith. He stated he believed the filings were in "good faith"
because (i) Mr. Haut considered Judge Brown's order "invalid";
(ii) the creditors would not suffer irrevocable harm because the
Debtors could be required to pay damages; and (iii) Mr. Haut
"balanced the risk and rewards as [he] saw them" and decided it
was in his client's economic interest to violate the court order.
Judge Isgur explained the gravity of the situation. "That Haut's
transgressions involved bankruptcy filings is an aggravating
factor," Judge Isgur said. "This is due to the unique nature of a
bankruptcy petition. The filing of a bankruptcy petition is a
self-invoking injunction. The protections of the automatic stay
are instantly procured merely upon filing a petition. The self-
invoking nature of the remedy is why there is no 21-day safe
harbor for inappropriate bankruptcy petitions. . . . Before the
creditors could argue their position to the Court, Haut had
already procured for his client the desired benefits of a
bankruptcy filing -- here, the automatic stay that prevented
foreclosure in February 2012."
At a disciplinary proceeding in March, Mr. Haut was represented by
counsel. University of Houston Law School Professor Robert
Schuwerk testified as an expert on ethical issues.
A copy of Judge Isgur's May 22, 2012 Memorandum Opinion is
available at http://is.gd/mZbYJOfrom Leagle.com.
JAZZ PHARMACEUTICALS: S&P Assigns 'BB' Corporate Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' corporate
credit rating to Ireland-based Jazz Pharmaceuticals plc. The
rating outlook is stable.
"At the same time, we assigned a 'BBB-' issue-level rating to
Jazz's $600 million senior secured credit facility. The facility
consists of a $100 million revolver due 2017 and a $500 million
term loan B due 2018. The senior secured recovery rating is '1',
indicating our expectation of very high (90%-100%) recovery in the
event of payment default," S&P said.
"The rating on Jazz reflects the company's 'weak' business risk
profile, as evidenced by its reliance on a single product (Xyrem)
for 60% of combined company revenues and dependence on
acquisitions to meaningfully expand its product offerings. These
risk factors are only partially offset by the rapid growth and
exceptional profitability of this business," S&P said.
"The need to acquire additional products, likely through
additional debt-financed acquisitions underpins our view of the
financial risk profiles as 'intermediate'," said Standard & Poor's
credit analyst David Lugg, "despite pro forma leverage that peaks
at 2x at transaction close."
"The stable outlook reflects our expectation that the current very
strong operating trends will continue through 2012 and that
leverage will remain quite low, ending 2012 at about 1x. Upgrade
prospects are limited by the large dependence on Xyrem. Conditions
for an upgrade include a sharp reduction in this dependence, to
about 30% of revenues. The conditions also include maintenance of
credit measures consistent with an intermediate financial risk
profile with debt to EBITDA of 3x or less," S&P said.
"The most likely cause of a downgrade would be a sharp increase in
the pace of debt-financed acquisitions such that debt to EBITDA
was sustained above 3x. Less likely causes include a significant
production/regulatory issue with Xyrem, such that it was removed
from the market for a period of time. The emergence of a viable
competitor to Xyrem could also be cause for a downgrade," S&P
said.
JENNE HILL: Plan Payments to be Funded by Townhome Complex Rentals
------------------------------------------------------------------
Jenne Hill Townhomes, L.L.C., submitted to the U.S. Bankruptcy
Court for the Western District of Missouri a Disclosure Statement
explaining the proposed Chapter 11 plan dated as of April 19,
2012.
The Debtor will begin soliciting votes on the Plan following
approval of the adequacy of the information in the Disclosure
Statement.
According to the Disclosure Statement, payments and distributions
under the Plan will be funded by the Debtor's rental income from
the Townhome Complex.
Under the Plan, Wells Fargo, N.A. is entitled to interest of
$3.27% per annum on the 2008 note and 5.25% on the 2009 note.
Wells Fargo's secured claim of $9,607,243 will be amortized over
25 years with interest at 5.5% per annum, which yields a monthly
payment of $58,996.
General unsecured claims in the aggregate amount of approximately
$23,203 will be paid in full in cash within 30 days of the
Effective Date of the confirmed Plan.
Freedy Spencer, David Atkins, and Russ Anderson, as members of the
Debtor, will receive their membership interest in the Debtor upon
the confirmation of the Plan.
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/JENNE_HILL_ds.pdf
About Jenne Hill
Columbia, Missouri-based Jenne Hill Townhomes, L.L.C., is a
Missouri limited liability company that owns and operates a
complex of high end townhomes in Columbia, Missouri. The Debtor
filed for Chapter 11 bankruptcy (Bank. W.D. Mo. Case No.11-22129)
on Dec. 22, 2011. In its schedules, the Debtor disclosed
$14,131,453 in assets and $9,743,209 in liabilities.
The petition was signed by Fredd Spencer, manager. Judge Dennis
R. Dow presides over the case. Bryan C. Bacon, Esq., at Van
Matre, Harrison, Hollis, and Taylor, P.C., in Columbia, Missouri,
serves as the Debtor's counsel.
KINDER MORGAN: Fitch Puts Rating on $11.8-Mil. Facilities at 'BB+'
------------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating to Kinder Morgan, Inc.'s
(KMI) $11.8 billion secured credit facilities (acquisition
facility). The acquisition facility will be used to fund the cash
portion of KMI's purchase of El Paso Corporation (EP) in a
$38 billion transaction expected to close on May 24, 2012. KMI's
ratings remain on Rating Watch Negative where they were placed on
Oct. 17, 2011, following the announcement of the acquisition. In
addition, Fitch has affirmed Kinder Morgan Energy Partners, L.P.'s
(KMP) Issuer Default Rating (IDR) at 'BBB'. KMP has a Stable
Rating Outlook.
In addition to the acquisition facilities, approximately $15
billion of long-term debt is affected by today's rating action.
Acquisition Financing: The acquisition facility is comprised of a
$6.8 billion 364-day bridge loan facility and a $5 billion 3-year
term loan facility. It is anticipated that approximately $5.4
billion will be drawn from these facilities at the closing to
support acquisition financing and fees. Concurrent with the
acquisition closing, EP's oil and gas operations will be sold for
$7.15 billion with net proceeds applied to acquisition funding and
debt reduction at KMI and EP. Additionally, KMI's revolving
credit facility maturing May 2013 (revolver) is being amended and
increased in size from $1 billion to $1.75 billion. The revolver
is also available to support the acquisition funding and for
working capital and other corporate purposes.
KMI's existing notes and debentures and its revolver will be
secured on a pari passu basis with the acquisition facility and
benefit from the same guarantees as the revolver. The debt will
be secured by a lien on all assets and pledge on all equity
interests that secure KMI's existing revolver, pledge of 100% of
the capital stock of EP, and a lien on the assets and pledge of
equity interests that secure EP's existing revolver. EP will
guarantee the debt.
Rating Rationale: KMI's ratings and Rating Watch Negative status
reflect the high levels of leverage at the company pro forma for
its acquisition of EP and the transactional risk associated with
the assets sales and dropdowns that are essential to the
subsequent pay down of acquisition debt. Also considered is the
lower consolidated company business risk given the cash flow
stability associated with EP's interstate pipelines. On a pro
forma basis following the transaction, 69% of consolidated EBITDA
will come from its lower risk natural gas and petroleum products
pipelines. The company's CO2 oil production operations which are
exposed to commodity price and volume exposure will decline to 12%
of EBITDA.
Fitch believes that an appropriate parent company leverage metric
for a 'BB+' rating as measured by KMI's standalone debt to the
cash distributions it receives from its operating affiliates
should be in the 2.5x to 3.5x range. KMI should be able to attain
this metric on a pro forma basis as early as the third quarter of
2012 with the benefit of the targeted dropdowns.
KMP's rating and Stable Outlook reflect its significant and
growing scale and scope of operations; geographic and functional
diversity of assets; successful track record in acquiring,
expanding, financing and operating energy operations; predictable
earnings and cash flow generated from natural gas and refined
product pipelines; and expectations for modestly improving credit
metrics. In its analysis Fitch considered the expected
divestiture in the third quarter of 2012 of certain Rocky Mountain
located assets as mandated by the Federal Trade Commission and the
concurrent purchase from EP of Tennessee Gas Pipeline Co. and a
portion of El Paso Natural Gas Co.
Liquidity: KMI will have access to its amended $1.75 revolver that
matures May 30, 2013. KMI had $395 million outstanding under the
revolver at March 31, 2012. KMI has $840 million of senior notes
maturing on Sept. 1, 2012.
KMP has a $2.2 billion revolving credit facility that matures July
1, 2016. As of March 31, 2012, the amount available under the
facility was reduced by $584 million consisting of $358 million in
commercial paper (CP) borrowings and $226 million of letters of
credit. KMP had $491 million of cash on March 31, 2012.
Catalysts for Future Rating Actions: Catalysts for negative rating
actions at KMI include inability to complete the sale of EP's oil
and gas operations on a timely basis to help fund the transaction
or to reduce debt with asset dropdown proceeds on a timely basis.
Catalysts for removal from Rating Watch Negative include debt
deleveraging consistent with the company's dropdown strategy.
Catalysts for negative rating actions at KMP include an
acquisition and organic growth strategy that does not involve a
balance of equity and debt funding. An additional potential
catalyst would be a change in business risk with a higher
allocation of operations involved in commodity sensitive business.
Catalysts for positive rating actions include improved credit
metrics and lower business risk.
KMI has ownership interests in two companies: the 2% of GP and
approximately 11% of the limited partner interests in KMP and 20%
of NGPL PipeCo LLC (NGPL, rated 'BB-', Negative Outlook by Fitch).
Distributions from KMP and NGPL contributed approximately 99% and
1% of KMI's 2011 cash flow, respectively.
Fitch assigns the following ratings and places them on Rating
Watch Negative:
Kinder Morgan, Inc.
-- 364-day bridge loan facility 'BB+';
-- 3-year term loan facility 'BB+'.
The following ratings remain on Rating Watch Negative:
Kinder Morgan, Inc.
-- IDR 'BB+';
-- Secured notes and debentures 'BB+';
-- Secured revolving credit facility 'BB+'.
Kinder Morgan Finance Company, LLC
-- Secured notes 'BB+'.
KN Capital Trust I
-- Trust preferred 'BB-'.
KN Capital Trust III
-- Trust preferred 'BB-'.
Fitch affirms the following ratings with a Stable Outlook:
Kinder Morgan Energy Partners, L.P.
-- Issuer Default Rating (IDR) at 'BBB';
-- Senior unsecured debt at 'BBB';
-- Short term IDR at 'F2'
-- Short term debt CP) at 'F2'.
KMC REAL ESTATE: iWellness Int'l., et al., Withdraw Plan
--------------------------------------------------------
iWellness International, Inc. and Argenta Financial, LLC, notified
the U.S. Bankruptcy Court for the Southern District of Indiana
that iWellness International, Inc., Argenta Financial, LLC, and
Dr. Shawn Glisson's Disclosure Statement and Plan of
Reorganization dated as of March 14, 2012, are withdrawn from
consideration.
According to parties, after significant time and effort, they have
determined that they will be unable to reach a necessary agreement
with RL BB Financial, LLC and obtain plan acceptance from the
physician-owners of KMC Real Estate Investors, LLC, and have
elected to withdraw their plan.
Previously, KMC Real Estate Investors, LLC submitted its
immaterial modification to (A) First Amended Disclosure Statement
to reflect that a competing plan of reorganization was proposed
and filed by Argenta Financial, LLC doing business as Argenta
Group, iWellness International, Inc., and Dr. Shawn Glisson.
About KMC Real Estate Investors
Clarksville, Indiana-based KMC Real Estate Investors LLC owns
certain real property located in Clark County, Indiana, commonly
known as 4601 Medical Plaza Way, Clarksville, Indiana. The
Company filed for Chapter 11 bankruptcy protection (Bankr. S.D.
Ind. Case No. 11-90930) on April 1, 2011. Gary Lynn Hostetler,
Esq., and Courtney Elaine Chilcote, Esq., at Hostetler & Kowalik,
P.C., in Indianapolis, Indiana, serve as the Debtor's bankruptcy
counsel. The Debtor disclosed it has undetermined assets and
$24.8 million in liabilities as of the Chapter 11 filing.
Affiliate Kentuckiana Medical Center, LLC, previously sought
Chapter 11 protection (Bankr. S.D. Ind. Case No. 10-93039) on
Sept. 9, 2010.
The Bankruptcy Court granted RL BB Financial relief from stay on
the Debtor's assets. The relief from stay is effective on July 25,
2011, at the close of business.
KMC REAL ESTATE: Wants Injunction Against RL BB Financial
---------------------------------------------------------
KMC Real Estate Investors, LLC and Kentuckiana Medical Center, LLC
ask the Bankruptcy Court for the Southern District of Indiana to
enjoin RL BB Financial, LLC, from all acts with respect to the
Debtors and all property in which they have an interest
notwithstanding the Court's prior order granting RL BB's motion
for relief from automatic stay.
According to the Debtors, without an injunction from the Court,
the Debtors' ability to reorganize their respective bankruptcy
estates could be irreparably harmed, thereby jeopardizing their
respective creditors' prospects of a meaningful recovery through
the Chapter 11 Bankruptcy process. Furthermore, an injunction is
necessary to preserve the health and well-being of KMC's patients.
Each of the Plans sets forth terms by which the Debtors'
respective secured creditors will have their claims paid in full
or otherwise satisfied through capital invested in the Debtors by
Granger and the Debtors' continued operations as going concerns.
The Debtors' continued operation of its hospital as a going
concern on the KMCREI Real Property is integral to Granger's
commitment to fund the KMC Plan.
About KMC Real Estate Investors
Clarksville, Indiana-based KMC Real Estate Investors LLC owns
certain real property located in Clark County, Indiana, commonly
known as 4601 Medical Plaza Way, Clarksville, Indiana. The
Company filed for Chapter 11 bankruptcy protection (Bankr. S.D.
Ind. Case No. 11-90930) on April 1, 2011. Gary Lynn Hostetler,
Esq., and Courtney Elaine Chilcote, Esq., at Hostetler & Kowalik,
P.C., in Indianapolis, Indiana, serve as the Debtor's bankruptcy
counsel. The Debtor disclosed it has undetermined assets and
$24,810,090 in liabilities as of the Chapter 11 filing.
Affiliate Kentuckiana Medical Center, LLC, previously sought
Chapter 11 protection (Bankr. S.D. Ind. Case No. 10-93039) on
Sept. 9, 2010.
As reported in the TCR on July 19, 2011, the Bankruptcy Court
granted RL BB Financial relief from stay on the Debtor's assets.
The relief from stay is effective on July 25, 2011, at the close
of business.
LA DODGERS: Dewey & LeBoeuf Has Extra Time to File Fee Application
------------------------------------------------------------------
Peg Brickley, writing for Dow Jones' Daily Bankruptcy Review,
reports Judge Kevin Gross on Tuesday granted Dewey & LeBoeuf more
time to file its final application for fees in the Los Angeles
Dodgers case by a month, due to "recent business developments."
Nobody involved in the case objected to the extension for the
troubled law firm.
Dewey & LeBoeuf was dissolved earlier this month. The report
notes the partners that worked on the Dodgers case are now working
at seven different firms. According to the report, Bruce Bennett
and Sid Levinson, formerly of Dewey & LeBoeuf and now of Jones
Day, led the team that steered erstwhile Dodgers owner Frank
McCourt through the Chapter 11 case and sale of the club.
The report also relates court records show that as of the end of
March, Dewey & LeBoeuf had collected only about $9 million in fees
and expenses for work on the Dodgers bankruptcy from June 2011
through January 2012.
About Los Angeles Dodgers
Los Angeles Dodgers LLC operates the Los Angeles Dodgers, a
professional Major League Baseball club in the Los Angeles
metropolitan area. Frank McCourt, a Boston real-estate developer
who unsuccessfully bid for the Boston Red Sox, bought the Dodgers
from Rupert Murdoch's Fox Entertainment Group Inc. in 2004 for
$330 million. Mr. McCourt also bought the Dodgers Stadium from
Fox for $100 million.
Los Angeles Dodgers LLC filed for bankruptcy protection (Bankr.
D. Del. Lead Case No. 11-12010) on June 27, 2011, after MLB
Commissioner Bud Selig rejected a television deal with News
Corp.'s Fox Sports, leaving Mr. McCourt unable to make payroll for
June 30 and July 1. Fox Sports has exclusive cable television
rights for Dodgers games until the end of 2013 baseball season.
Chapter 11 filings were also made for LA Real Estate LLC, an
affiliated entity which owns Dodger Stadium, and three other
related holding companies.
The petition estimated assets of up to $500 million and debts of
up to $1 billion. In its schedules, the LA Dodgers baseball club
disclosed $77,963,734 in assets and $4,695,702 in liabilities. LA
Real Estate LLC disclosed $161,761,883 in assets and $0 in
liabilities.
Judge Kevin Gross presides over the case. Lawyers at Young,
Conaway, Stargatt & Taylor and Dewey & LeBoeuf LLP serve as the
Debtors' bankruptcy counsel. Epiq Bankruptcy Solutions LLC is the
claims and notice agent. Public relations specialist Kekst and
Company has been hired for crisis support. Covington & Burling
LLP serves as special counsel.
An official committee of unsecured creditors is represented in the
case by Lazard Freres & Co. as financial adviser and investment
banker, and Morrison & Foerster LLP and Pinckney, Harris &
Weidinger, LLC as counsel.
The LA Dodgers is the 12th sports team in North America to have
sought bankruptcy protection. According to Forbes, the Dodgers is
worth about $800 million, making it the third most valuable
baseball team after the New York Yankees and the Boston Red Sox.
The bankruptcy judge signed an order confirming the Dodgers'
Chapter 11 Plan on April 13, 2012. The plan is based on a $2.15
billion sale of the baseball club and Dodger Stadium to Guggenheim
Baseball Management. The Dodgers, on schedule, emerged from
bankruptcy reorganization on April 30.
Members of the new ownership group include Mark Walter, chief
executive of Guggenheim Partners; Peter Guber, a Hollywood
producer and co-owner of the National Basketball Association's
Golden State Warriors; and Magic Johnson, a Hall of Fame
basketball player.
LAS VEGAS MONORAIL: Has Formal Approval to Exit Chapter 11
----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Las Vegas Monorail Co. has formal permission from the
bankruptcy court to emerge from Chapter 11 bankruptcy. The judge
signed a confirmation order on May 21 approving a plan that
reduces debt by 98 percent. After refusing to approve a plan last
year because the monorail likely couldn't pay the debt, the judge
wrote an opinion on May 9 explaining how the more drastically
reduced debt made the plan feasible. At one time, the monorail had
$650 million in debt.
About Las Vegas Monorail
Las Vegas, Nevada-based Las Vegas Monorail Company, organized by
the State of Nevada in 2000 as a nonprofit corporation, owns and
manages the Las Vegas Monorail. The Monorail is a seven-stop,
elevated train system that travels along a 3.9-mile route near the
Las Vegas Strip. LVMC has contracted with Bombardier Transit
Corporation to operate the Monorail. Though it benefits from its
tax-exempt status due to being a nonprofit entity, LVMC claims to
be the first privately-owned public transportation system in the
nation to be funded solely by fares and advertising. LVMC says it
receives no governmental financial support or subsidies.
The Company filed for Chapter 11 bankruptcy protection (Bankr. D.
Nev. Case No. 10-10464) on Jan. 13, 2010. Gerald M. Gordon, Esq.,
William M. Noall, Esq., and Gabriel A. Hamm, Esq., at Gordon
Silver, assist the Company in its restructuring effort. Alvarez &
Marsal North America, LLC, is the Debtor's financial advisor.
Stradling Yocca Carlson & Rauth is the Debtor's special bond
counsel. Jones Vargas is the Debtor's special corporate counsel.
The Company disclosed $395,959,764 in assets and $769,515,450 in
liabilities as of the Petition Date.
In April 2010, bondholder Ambac Assurance Corp. lost in its bid to
halt the bankruptcy after U.S. Bankruptcy Judge Bruce A. Markell
ruled that Monorail isn't a municipality and is therefore entitled
to reorganize in Chapter 11. U.S. District Judge James Mahan in
Reno upheld the ruling in October 2010.
MASTER SILICON: Incurs $981,000 Net Loss in First Quarter
---------------------------------------------------------
Master Silicon Carbide Industries, Inc., filed with the U.S.
Securities and Exchange Commission its quarterly report on Form
10-Q disclosing a net loss of US$981,399 on US$1.71 million of
revenue for the three months ended March 31, 2012, compared with a
net loss of US$177,621 on US$4.32 million of revenue for the same
period a year ago.
The Company reported a net loss of $3.14 million of $15.94 million
of revenues for 2011, compared with net income of $232,979 on
$12.95 million of revenues for 2010.
The Company's balance sheet at March 31, 2012, showed US$26.91
million in total assets, US$11.07 million in total liabilities,
USUS$10 million in redeemable preferres stock-A, US$10 million in
redeemable preferred stock-B, and a US$4.16 million total
stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/k9gXrn
About Master Silicon
Located in Lakeville, Connecticut, Master Silicon Carbide
Industries, Inc., through its indirectly wholly-owned operating
subsidiary Yili Master Carborundum Production Co., Ltd. ("Yili
China"), manufactures and sells in China mostly high quality
"green" silicon carbide and some lower-quality "black" silicon
carbide, a non-metallic compound that is widely used in industries
such as semiconductors, solar energy, ceramics, abrasives and
optoelectronics.
Child, Van Wagoner & Bradshaw, PLLC, in Salt Lake City, Utah,
issued a "going concern" qualification on the consolidated
financial statements for the year ended Dec. 31, 2011, citing
cash flow constraints, accumulated deficit, and recurring losses
from operations, which raised substantial doubt about the
Company's ability to continue as a going concern.
MASTRO'S RESTAURANTS: S&P Gives 'B-' Rating on $102-Mil. Sr. Notes
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned a 'B-' issue-level-
rating with a '4' recovery rating to the proposed $102 million
senior secured notes co-issued by Mastro's Restaurants LLC and RRG
Finance Corp. "The '4' recovery rating indicates our expectation
for an average (30%-50%) recovery of principal in the event of a
default," S&P said.
"At the same time, we affirmed our 'B-' corporate credit rating on
the company. The outlook is stable," S&P said.
"Our ratings on Mastro's reflect our view of the company's
financial risk profile as 'highly leveraged' and its business risk
profile as 'vulnerable.' The ratings also reflect our recent re-
assessment of the liquidity profile for the company to 'adequate'
from 'less than adequate.' This improved liquidity resulted
partially from better profitability, but also from about an $8
million equity contribution from the company's sponsor. The equity
infusion allowed Mastro's to repay outstanding balances under the
revolver and provides greater flexibility for future expansion
plans," S&P said.
"The proposed refinancing is essentially leverage neutral and we
anticipate that credit measures will remain characteristic of the
highly leveraged financial risk profile in the near term," said
Standard & Poor's credit analyst Mariola Borysiak. "Despite recent
profitability gains, pro forma total debt to EBITDA remains
elevated, at slightly over 10x at March 28, 2012, and pro forma
EBITDA coverage of interest is only about 0.9x. We anticipate only
modest improvement of these measures during 2012, mainly from
EBITDA growth, because debt levels will continue to increase as a
result of accruing interest on the company's seller notes,
accruing dividends on the preferred equity, and higher lease
commitments related to new restaurant openings."
"The stable outlook reflects the company's improving profitability
and our expectations for modest revenue and EBITDA growth over the
next 12 months. It also reflects our expectations that Mastro's
will maintain adequate liquidity and modestly improve its credit
measures," S&P said.
"We could lower our ratings if increasing competition, a weak
economic recovery, and decreasing customer spending lead to
restrained profitability, resulting in deterioration of liquidity
such that its sources would not be sufficient to cover its uses
for the next 12 months," S&P said.
"Although unlikely in the next 12 months, we could upgrade
Mastro's if leverage declines to less than 6x, which would result
from significant EBITDA growth, as we do not expect any debt
reduction in the near future," S&P said.
MICROVISION INC: Gets Nasdaq Listing Deficiency Notice
------------------------------------------------------
MicroVision, Inc. received a notice on May 16, 2012 from The
Nasdaq Stock Market advising the company that for 30 consecutive
trading days preceding the date of the notice the company was not
in compliance with the $50,000,000 minimum market value of listed
securities required for continued listing on The Nasdaq Global
Market pursuant to Nasdaq's listing requirements. In accordance
with Nasdaq's listing rules, the company has 180 calendar days, or
until November 12, 2012, to regain compliance with this
requirement. This notification is simply a notice of deficiency,
not of imminent delisting, and has no current effect on the
listing or trading of MicroVision's common stock on The Nasdaq
Global Market.
During the 180-day compliance period, MicroVision can regain
compliance if the market value of its listed securities closes at
$50,000,000 or more for a minimum of 10 consecutive business days.
The company could also regain compliance with Nasdaq's continued
listing requirements by reporting stockholders' equity of $10
million or more. If the company does not regain compliance by
Nov. 12, 2012, Nasdaq will notify the company that its securities
are subject to delisting.
The company intends to continue to aggressively execute its
business plan to significantly reduce expenses and secure
customers for its next generation HD PicoP(R) display technology
based on direct green lasers (PicoP Gen2). MicroVision recently
demonstrated progress in commercializing its PicoP Gen2 display
technology. The announcement by Pioneer Corporation of July
availability of its Cyber Navi AR Head Up Display that uses
embedded PicoP Gen2 display technology validates the readiness of
MicroVision's display technology and the commercial availability
of direct green lasers. The company expects revenue from sales of
components to Pioneer and royalties from sales of the product.
The company has taken steps to secure financing and reduce
operating expenses to strengthen its financial position. On
May 10, 2012, the company announced a $5M equity investment from
private investors. In its Q1 earnings press release MicroVision
reiterated its transition to a B2B, ingredient brand business
model whereby it would license its patented PicoP display
technology to OEMs and ODMs securing licensing and royalty revenue
as well as revenue from component sales of MEMs and ASICS, the
proprietary elements of PicoP Gen2. Pioneer is MicroVision's
first customer under this ingredient brand business model. Under
this model the company plans to reduce its cash used in operations
by as much as 50% from Q1 2012 levels. The savings from these
actions should start to take effect starting in Q3 2012.
About MicroVision
MicroVision provides the PicoP(R) display technology platform
designed to enable next-generation display and imaging products
for consumer devices, vehicle displays and wearable displays. The
company's PicoP projection display technology uses highly
efficient laser light sources which can create vivid images with
high contrast and brightness.
MERCHANTS MORTGAGE: Chapter 11 Reorganization Case Closed
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Colorado closed the
Chapter 11 case of Merchants Mortgage & Trust Corporation LLC.
The Court retains jurisdiction to consider professional fee
applications filed.
As reported in the Troubled Company Reporter on Feb. 27, 2012,
Judge Michael R. Romero confirmed the Debtor's Chapter 11 plan to
restructure its business and continue working with a private
equity partner, after no creditors objected to the plan. After a
confirmation hearing on Feb. 22, Judge Romero confirmed the plan
and affirmed the company's disclosure statement, which it had
submitted after struggling with its debt following the
deterioration of the real estate sector, Law360 said.
About Merchants Mortgage
Merchants Mortgage & Trust Corporation LLC --
http://www.merchantsmtg.com/-- is a real estate finance company
based in Denver, Colorado, with a branch office in Phoenix,
Arizona (d/b/a/ Merchants Funding, LLC). The Company's specialty
is making fix-and-flip loans to real estate investors. It also
offers a 2, 3, or 5 year "mini-permanent" loan on non-owner
occupied residential (1 to 4 unit) investment properties that have
already been rehabilitated and rented. As the market dictates, it
does some construction and small commercial real estate lending as
well. Merchants has closed over 5,300 fix-and-flip loans totaling
over $1.2 billion to investors since 1997.
Merchants Mortgage filed for Chapter 11 bankruptcy (Bank. D. Colo.
Case No. 11-39455) on Dec. 22, 2011. The Debtor estimated assets
of $50 million to $100 million and estimated debts of $50 million
to $100 million. Gary D. Levine signed the petition as president.
The Debtor filed with the Bankruptcy Court its Prepackaged
Chapter 11 Plan of Reorganization and an accompanying Disclosure
Statement on Dec. 23, 2011.
MORGAN'S FOODS: Board Amends Articles of Incorporation
------------------------------------------------------
The Board of Directors of Morgan's Foods, Inc., approved an
amendment to the Company's Amended and Restated Articles of
Incorporation that became effective on May 17, 2012, upon filing
of a Certificate of Amendment with the Ohio Secretary of State.
The Amendment adds Section 5 to Article Fourth, which sets forth
the terms of the Series A Preferred Shares of the Company, as
required by the Amended and Restated Shareholder Rights Agreement
dated as of Oct. 2, 2007, between the Company and Computershare
Trust Company, N.A, previously disclosed in the Company's Form 8-A
filed on Oct. 11, 2007. These terms of the Series A Preferred
Shares were previously included in the Company's articles of
incorporation in an amendment filed with the Ohio Secretary of
State on May 6, 1999, following adoption of the original
Shareholder Rights Plan on April 8, 1999, but were inadvertently
omitted in the Amended and Restated Articles of Incorporation
filed with the Ohio Secretary of State on Jan. 16, 2003. The
Amendment fixes that omission. A copy of the amendment is
available for free at http://is.gd/xaYCYC
About Morgan's Foods
Cleveland, Ohio-based Morgan's Foods, Inc., which was formed in
1925, operates through wholly-owned subsidiaries KFC restaurants
under franchises from KFC Corporation, Taco Bell restaurants under
franchises from Taco Bell Corporation, Pizza Hut Express
restaurants under licenses from Pizza Hut Corporation and an A&W
restaurant under a license from A&W Restaurants, Inc.
As of May 20, 2011, the Company operates 56 KFC restaurants,
5 Taco Bell restaurants, 10 KFC/Taco Bell "2n1's" under franchises
from KFC Corporation and franchises from Taco Bell Corporation,
3 Taco Bell/Pizza Hut Express "2n1's" under franchises from Taco
Bell Corporation and licenses from Pizza Hut Corporation,
1 KFC/Pizza Hut Express "2n1" under a franchise from KFC
Corporation and a license from Pizza Hut Corporation and 1 KFC/A&W
"2n1" operated under a franchise from KFC Corporation and a
license from A&W Restaurants, Inc.
The Company reported a net loss of $988,000 for the fiscal year
ended Feb. 27, 2011, compared with net income of $396,000 for the
fiscal year ended Feb. 28, 2010. The Company reported a net loss
of $567,000 for the 36 weeks ended Nov. 6, 2011.
The Company's balance sheet at Nov. 6, 2011, showed $41.41 million
in total assets, $41.34 million in total liabilities and $68,000
in total shareholders' equity.
Grant Thornton LLP, in Cleveland, Ohio, expressed substantial
doubt about Morgan's Foods' ability to continue as a going
concern. The independent auditors noted that as of Feb. 27, 2011,
the Company was in default and cross default of certain provisions
of its most significant credit agreements and in default of the
image enhancement requirements under franchise agreements for
certain of its restaurants.
MONTANA ELECTRIC: Ch. 11 Trustee Has Access to Cash Until Oct. 31
-----------------------------------------------------------------
The Hon. Ralph B. Kirscher of the U.S. Bankruptcy Court for the
District of Montana authorized, on a final basis, Lee A. Freeman,
the Chapter 11 trustee for Southern Montana Electric Generation
and Transmission Cooperative Inc., to use cash collateral subject
to prepetition secured parties' interests.
As of the Petition Date, the Debtor was liable to the Prepetition
Secured Parties in respect of obligations under the Indenture for
(i) the aggregate principal amount of not less than $85 million on
account of the Notes issued under the Indenture (plus accrued and
unpaid interest thereon); and (ii) unpaid fees, expenses,
disbursements, indemnifications, obligations, and charges or
claims of whatever nature, whether or not contingent, whenever
arising, due or owing under the Prepetition Loan Documents or
applicable law.
As reported in the Troubled Company Reporter on Apr 27, 2012, the
prepetition secured parties are the U.S. Bank National Association
as indenture trustee, and certain holders consisting of Prudential
Insurance Company of America, Universal Prudential Arizona
Reinsurance Company, Forethought Life Insurance Company and Modern
Woodman of America.
The trustee will use the cash collateral to operate the Debtor's
business and meet the trustee's responsibilities under the
Bankruptcy Code until Oct. 31, 2012, or until the occurrence of a
termination event.
As adequate protection from any diminution in value of the
lender's collateral, the Debtor will grant the prepetition secured
parties valid first priority liens upon and in substantially all
of the Debtor's assets, and all proceeds and products of the
assets in accordance with the terms of the Prepetition Loan
Documents.
About Southern Montana Electric
Based in Billings, Montana, Southern Montana Electric Generation
and Transmission Cooperative, Inc., was formed to serve five
other electric cooperatives. The city of Great Falls later joined
as the sixth member. Including the city, the co-op serves a
population of 122,000. In addition to Great Falls, the service
area includes suburbs of Billings, Montana.
Southern Montana filed for Chapter 11 bankruptcy (Bankr. D.
Mont. Case No. 11-62031) on Oct. 21, 2011. Southern Montana
estimated assets of $100 million to $500 million and estimated
debts of $100 million to $500 million. Timothy Gregori signed the
petition as general manager.
Jon E. Doak, Esq., at Doak & Associates, P.C., in Billings,
Montana, serves as the Debtor's counsel. In December 2011,
Southern Montana also sought permission to employ the Goodrich Law
Firm, P.C., as general co-counsel.
Also in December, Lee A. Freeman was appointed as Chapter 11
trustee. Mr. Freeman retained Horowitz & Burnett, P.C., as his
counsel and Waller & Womack, P.C., as local counsel.
The United States Trustee for Region 18 has appointed an Official
Committee of Unsecured Creditors in the case.
After filing for reorganization in October, the co-op agreed to a
request for appointment of a Chapter 11 trustee. Lee A. Freeman
was appointed as the Chapter 11 trustee and he is represented by
Waller & Womack and Horowitz & Burnett, P.C.
MORRIER RANCH: US Trustee Fails to Appoint Creditors' Committee
---------------------------------------------------------------
Robert D. Miller Jr., U.S. Trustee for Region 18, has informed the
U.S. Bankruptcy Court for the Eastern District of Washington that
he is not appointing an unsecured creditors' committee in this
case at the present time, due to lack of response to the request
for notice of willingness to serve on the unsecured creditors'
committee.
Yakima, Washington-based Morrier Ranch, Inc., aka Morrier Hop
Storage, filed for Chapter 11 bankruptcy (Bankr. E.D. Wash. Case
No. 12-00179) on Jan. 17, 2012. Judge Patricia C. Williams
presides over the case, taking the assignment from Judge Frank L.
Kurtz. James P. Hurley, Esq., at Hurley & Lara, serves as the
Debtor's counsel. The petition was signed by Joseph R. Morrier,
president.
In its schedules, the Debtor disclosed $19.7 million in total
assets and $6.02 million in total liabilities.
MOUNTAINEER GAS: Fitch Affirms Senior Unsecured Rating at 'BB+'
---------------------------------------------------------------
Fitch Ratings has affirmed the long-term Issuer Default Rating
(IDR) of Mountaineer Gas Company (MGC) at 'BB' and the senior
unsecured rating at 'BB+'. Fitch has also revised the Rating
Outlook to Stable from Positive.
The Outlook revision to Stable reflects Fitch's expectations that
any improvement in MGC's credit metrics will be delayed until 2013
at the earliest and subject to the outcome of a pending rate case.
With the 2011/2012 winter heating season being one of the warmest
on record, MGC's 1Q'12 results were well below those reported in
the comparable year earlier. MGC typically earns 70% or more of
annual EBITDA in the first quarter.
Key Credit Factors
-- Strong liquidity with relatively modest working capital needs
and positive free cash flow;
-- Low risk regulated utility business model;
-- Generally constructive regulatory environment;
-- Highly dependent on winter heating season
1Q 2012 Results Under Pressure
The first quarter for 2012 was one of the warmest first quarters
in 100 years in West Virginia; this reduced revenues and EBITDA
year over year for MGC by $15 million and $6.6 million,
respectively. FFO credit metrics were reduced significantly due
to the warm winter season as well.
Despite the poor 1Q 2012 results, Fitch expects coverage measure
to be only slightly pressured in 2012 as MGC is experiencing lower
interest costs. Fitch expects EBITDA to Interest to ease slightly
to 3.37x in 2012 from 3.43x in 2011. Fitch expects Debt to EBITDA
of 4.2x Dec. 31, 2012 as compared with 3.8x in 2011. Fitch would
look to Debt to EBITDA of approximately 3.5x as consistent with an
investment grade metrics.
Decline in Heating Degree Days: Heating degree days for the 2011
year were 9% below average. From July 1, 2011 - May 12, 2012, the
heating degree days have been 18% below average. EBITDA was down
$6.6 million and the Net Income was down 36% in comparison to the
first quarter of 2011.
Earnings Retention
MGC's capitalization weakened slightly as MGC paid out more
dividends than they earned in net income in 2011. Profitability
will be pressured in 2012 following the poor performance in the
all-important 1Q'12 period.
Strong Liquidity
MGC amended and restated their current credit facility on Dec. 15,
2011. The new amended facility is an unsecured revolving credit
facility with a maximum borrowing capacity of $70 million. There
is a company option to increase the maximum principal amount to
$125 million assuming certain conditions are met. The scheduled
maturity for this facility is Dec. 14, 2014. There is a company
option beginning on Dec. 15, 2012 to request a one year extension.
The amended facility has similar covenants to the previous credit
facility, including a 65% Debt to Capital level.
Debt Refinancing
Fitch expects MGC to refinance a $20 million note that matures
December 2012.
Enhanced Financial Flexibility
MGC has minimized its heating season financing requirements
through an asset management agreement (AMA) with Sequent, a
subsidiary of AGL Resources (IDR 'A-'). Gas inventories are owned
and managed by Sequent, and MGC draws on these inventories as
needed. Debt levels, borrowing capacity requirements, and related
interest expenses are consequently reduced.
Base Rating Filing
MGC applied for a rate increase on Nov. 4, 2011 with the WVPSC for
a $12.2 million rate increase. MGC requested an 11.25% ROE.
MGC's last rate case was filed in 2009 and decided on March 2010
when the WVPSC authorized a $19 million rate increase (requested
$26.4 million/ received 72%). The new request covers a monthly
customer charge increase, including a residential increase to
$11.40 from $8.00. A decision is expected in the third quarter of
2012.
MSR RESORT: Has Until June 24 to File Reorganization Plan
---------------------------------------------------------
Stephanie Gleason at Dow Jones Daily Bankruptcy Review reports
that Judge Sean Lane of the U.S. Bankruptcy Court in Manhattan
extended MSR Resort Golf Course LLC's exclusive period to file a
reorganization plan to June 24, 2012, and solicit acceptances of
that plan to Aug. 24, 2012.
The current plan filing deadline will expire on May 28, 2012.
According to the report, the group of five resorts, owned by hedge
fund Paulson & Co., received court approval in March to sell one
resort, the Doral Golf Resort & Spa in Miami, to Donald Trump's
Trump Organization for $150 million. Although that sale was
intended to help the company's balance sheet, the four other
resorts continue to languish in Chapter 11, complicating the
confirmation of a reorganization plan.
The report relates Judge Lane said the extension was in the best
interest of the estate and its creditors and the court had
received no objections other than an informal response by the
creditors' committee.
About MSR Resort
MSR Hotels & Resorts, formerly known as CNL Hotels & Resorts Inc.,
owns a portfolio of eight luxury hotels with over 5,500 guest
rooms, including the Arizona Biltmore Resort & Spa in Phoenix, the
Ritz-Carlton in Orlando, Fla., and Hawaii's Grand Wailea Resort
Hotel & Spa in Maui.
On Jan. 28, 2011, CNL-AB LLC acquired the equity interests in the
portfolio through a foreclosure proceeding. CNL-AB LLC is a joint
venture consisting of affiliates of Paulson & Co. Inc., a joint
venture affiliated with Winthrop Realty Trust, and affiliates of
Capital Trust, Inc.
Morgan Stanley's CNL Hotels & Resorts Inc. owned the resorts
before the Jan. 28 foreclosure.
Following the acquisition, five of the resorts with mortgage debt
scheduled to mature on Feb. 1, 2011, were sent to Chapter 11
bankruptcy by the Paulson and Winthrop joint venture affiliates.
MSR Resort Golf Course LLC and its affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan
on Feb. 1, 2011. The resorts subject to the filings are Grand
Wailea Resort and Spa, Arizona Biltmore Resort and Spa, La Quinta
Resort and Club and PGA West, Doral Golf Resort and Spa, and
Claremont Resort and Spa.
James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O.
Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis,
LLP, serve as the Debtors' bankruptcy counsel. Houlihan Lokey
Capital, Inc., is the Debtors' financial advisor. Kurtzman Carson
Consultants LLC is the Debtors' claims agent.
The five resorts had $2.2 billion in assets and $1.9 billion in
debt as of Nov. 30, 2010, according to court filings. In its
schedules, debtor MSR Resort disclosed $59,399,666 in total assets
and $1,013,213,968 in total liabilities.
The resorts have agreement with lenders allowing the companies to
remain in Chapter 11 at least until September 2012. Donald Trump
has a contract to buy the Doral Golf Resort and Spa in Miami for
$170 million. There will be an auction to learn if there is a
better bid. The resorts have said that Trump's offer price implies
a value for all the properties "significantly" exceeding the
$1.5 billion in debt.
The Official Committee of Unsecured Creditors is represented by
Martin G. Bunin, Esq., and Craig E. Freeman, Esq., at Alston &
Bird LLP, in New York.
NEBRASKA BOOK: Has $116 Million Year's Operating Loss
-----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Nebraska Book Co. reported a $158.4 million net loss
for the year ended March 31. Sales were $525 million. The
operating report filed with the bankruptcy court in Delaware shows
a $116.1 million loss from operations. Gross profit was $190.7
million. Reorganization costs in the year were $30.3 million.
About Nebraska Book
Lincoln, Nebraska-based Nebraska Book Company, Inc., is one of the
leading providers of new and used textbooks for college students
in the United States. Nebraska Book and seven affiliates filed
separate Chapter 11 petitions (Bankr. D. Del. Case Nos. 11-12002
to 11-12009) on June 27, 2011. Hon. Peter J. Walsh presides over
the case. Lawyers at Kirkland & Ellis LLP and Pachulski Stang
Ziehl & Jones LLP, serve as the Debtors' bankruptcy counsel. The
Debtors; restructuring advisors are AlixPartners LLC; the
investment bankers are Rothschild, Inc.; the auditors are Deloitte
& Touche LLP; and the claims agent is Kurtzman Carson Consultants
LLC. As of the Petition Date, the Debtors had consolidated assets
of $657,215,757 and debts of $563,973,688.
JPMorgan Chase Bank N.A., as administrative agent for the DIP
lenders, is represented by lawyers at Richards, Layton & Finger,
P.A., and Simpson Thacher & Bartlett LLP. J.P. Morgan Investment
Management Inc., the DIP arranger, is represented by lawyers at
Bayard, P.A., and Willkie Farr & Gallagher LLP.
An ad hoc committee of holders of more than 50% of the Debtors'
Second Lien Notes is represented by lawyers at Brown Rudnick. An
ad hoc committee of holders of the Debtors' 8.625% unsecured
notes are represented by Milbank, Tweed, Hadley & McCloy LLP.
The Official Committee of Unsecured Creditors selected Lowenstein
Sandler LLP and Stevens & Lee, P.C., as lawyers and Mesirow
Financial Inc. as financial advisers.
Nebraska Book has been unable to confirm a pre-packaged Chapter 11
plan that would have swapped some of the existing debt for new
debt, cash and the new stock, due to an inability to secure
$250 million in exit financing.
The company has a confirmation hearing scheduled on May 30 for
approval of a revised reorganization plan. The plan gives the new
stock plus a new $100 million second-lien note to holders of the
existing $200 million in second-lien debt, for a projected 81
percent recovery.
NEWPAGE CORP: 2nd Lien Bondholders Want Lawsuit Unsealed
--------------------------------------------------------
Jacqueline Palank, writing for Dow Jones' Daily Bankruptcy Review,
reports that a group of NewPage Corp. second-lien bondholders is
asking the U.S. Bankruptcy Court to unseal a potential lawsuit
that NewPage's unsecured creditors want to file against them.
According to Ms. Palank, the bondholders said public interest is
best served by unsealing the lawsuit.
The unsecured creditors committee is seeking standing from the
Court to bring the lawsuit, which would challenge the debt NewPage
took on in its 2007 leveraged buyout of another paper company and
its 2009 refinancing. DBR notes at stake is the ability of the
potential defendants, including the second-lien bondholders, to be
paid ahead of other creditors.
Ms. Palank observes it is a notable request for the bondholders to
make because the group doesn't appear to have disclosed its
members nor the amount of debt they hold in publicly available
court papers. The group only identifies itself as "certain
unaffiliated investors" who hold 10% senior secured notes and
floating rate senior secured notes due 2012.
"Perhaps one more thing about the group's members is clear: They
have the money to hire attorneys at two of the nation's 100
biggest law firms, Akin Gump Strauss Hauer & Feld and Blank Rome,"
Ms. Palank relates.
DBR also reports Ben Finestone, Esq., at Quinn Emanuel Urquhart &
Sullivan LLP, representing the unsecured creditors committee, said
Tuesday it's not up to his client to unseal the suit. Instead,
it's up to the entities that provided the confidential documents
the committee built its suit around.
"The committee is just complying with the protective orders to
which it was subject," Mr. Finestone said, according to DBR. "If
the producing parties have no objection to the complaint being
filed publicly, the committee doesn't either."
About NewPage Group
Headquartered in Miamisburg, Ohio, NewPage Corporation was the
leading producer of printing and specialty papers in North
America, based on production capacity, with $3.6 billion in net
sales for the year ended Dec. 31, 2010. NewPage owns paper mills
in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and
Nova Scotia, Canada.
NewPage Group, NewPage Holding, NewPage, and certain of their U.S.
subsidiaries commenced Chapter 11 voluntary cases (Bankr. D. Del.
Case Nos. 11-12804 through 11-12817) on Sept. 7, 2011. Its
subsidiary, Consolidated Water Power Company, is not a part of the
Chapter 11 proceedings.
Separately, on Sept. 6, 2011, its Canadian subsidiary, NewPage
Port Hawkesbury Corp., brought a motion before the Supreme Court
of Nova Scotia to commence proceedings to seek creditor protection
under the Companies' Creditors Arrangement Act of Canada. NPPH is
under the jurisdiction of the Canadian court and the court-
appointed Monitor, Ernst & Young in the CCAA Proceedings.
Initial orders were issued by the Supreme Court of Nova Scotia on
Sept. 9, 2011 commencing the CCAA Proceedings and approving a
settlement and transition agreement transferring certain current
assets to NewPage against a settlement payment of $25 million and
in exchange for being relieved of all liability associated with
NPPH. On Sept. 16, 2011, production ceased at NPPH.
The Debtors hired Martin J. Bienenstock, Esq., Judy G.Z. Liu,
Esq., and Philip M. Abelson, Esq., at Dewey & LeBoeuf LLP, in New
York, as counsel. As a result of Dewey's dissolution in May 2012,
Mr. Bienenstock's team moved to Proskauer Rose LLP and the firm
replaced Dewey in the case.
Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in
Wilmington, Delaware, serves as co-counsel. Lazard Freres & Co.
LLC is the investment banker, and FTI Consulting Inc. is the
financial advisor. Kurtzman Carson Consultants LLC is the claims
and notice agent. In its balance sheet, the Debtors disclosed
$3.4 billion in assets and $4.2 billion in total liabilities as of
June 30, 2011.
The Official Committee of Unsecured Creditors selected Paul
Hastings LLP as its bankruptcy counsel and Young Conaway Stargatt
& Taylor, LLP to act as its Delaware and conflicts counsel.
NewPage prevailed over most objections from the official
creditors' committee and won agreement from the bankruptcy judge
on final approval of $600 million in secured financing.
Moody's Investors Service assigned a Ba2 rating to the
$350 million first-out revolving debtor-in-possession credit
facility and a B2 rating to the $250 million second-out debtor-in-
possession term loan for NewPage.
NEXT 1 INTERACTIVE: Effects a 1-for-500 Reverse Stock Split
-----------------------------------------------------------
Next 1 Interactive, Inc., filed a Certificate of Change with the
Secretary of State of Nevada, pursuant to which the Company (i)
reduced its authorized shares of common stock from 2,500,000,000
to 5,000,000, and (ii) will effect a 1-for-500 reverse split of
its common stock. The Company has completed the process of
notifying FINRA of the reverse split and the reverse split was
announced by FINRA on May 21, 2012, with an effective date of
May 22, 2012.
About Next 1 Interactive
Weston, Fla.-based Next 1 Interactive, Inc., is an interactive
media company that focuses on video and media advertising over
Internet, Mobile and Television platforms. Historically, the
Company operated through two divisions, media and travel. A third
(real estate) division is anticipated to be launching during the
fourth quarter of fiscal 2012.
For the nine months ended Nov. 30, 2011, the Company has reported
a net loss of $8.0 million on $1.1 million of revenues, compared
with a net loss of $10.2 million on $1.9 million of revenues for
the nine months ended Nov. 30, 2010.
The Company's balance sheet at Nov. 30, 2011, showed $3.0 million
in total assets, $13.0 million in current liabilities, and a
stockholders' deficit of $10.0 million.
As reported in the TCR on June 22, 2011, Sherb & Co., LLP, in Boca
Raton, Fla., expressed substantial doubt about Next 1
Interactive's ability to continue as a going concern, following
the Company's results for the fiscal year ended Feb. 28, 2011.
The independent auditors noted that the Company had an accumulated
deficit of $53.2 million and a working capital deficit of
$13.4 million at Feb. 28, 2011, net losses for the year ended
Feb. 28, 2011, of $23.2 million and cash used in operations during
the year ended Feb. 28, 2011, of $9.6 million.
OPEN RANGE: Liquidating Trustee Sues One Equity Over Funding
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the trustee liquidating Open Range Communications
Inc. sued One Equity Partners LLC in bankruptcy court, contending
that the private-equity investor failed to make $17 million out of
an equity commitment of $40 million.
About Open Range
Greenwood Village, Colo.-based Open Range Communications Inc., a
provider of wireless broadband services to 26,000 rural customers
in 12 states, filed a Chapter 11 petition (Bankr. D. Del. Case No.
11-13188) on Oct. 6, 2011, to either sell the business or shut
down and liquidate. Open Range disclosed about $115.1 million in
assets and $102.8 million in debts. Open Range started its WiMax
broadband and voice service in late 2009, backed by a $267 million
loan from the U.S. Department of Agriculture's Rural Utility
Service and $100 million invested by One Equity Partners, a
financing arm of JPMorgan Chase & Co.
Judge Kevin J. Carey presides over the case. Marion M. Quirk,
Esq., at Cole, Schotz, Meisel, Forman & Leonard, serves as
bankruptcy counsel. Logan & Co. serves as claims agent. FTI
Consulting, Inc., provided a chief restructuring officer, Michael
E. Katzenstein; an associate chief restructuring officer, Chris
Lewand; and hourly temporary staff. The petition was signed by
Chris Edwards, chief financial officer.
In December 2011, Open Range shut down operations after failing to
get the broadcast spectrum it needed, problems with network
quality and vendors, and the "sporadic" flow of money from a
$267 million federal loan, of which Open Range owes a balance of
$73.5 million.
Open Range hired RB Capital LLC and Heritage Global Partners Inc.
as auctioneers and sales agents to conduct an auction of the
assets.
In February 2012, the Debtor obtained an order converting the case
to Chapter 7 liquidation. The Debtor said it was unlikely to have
a reorganization plan resolving the Internet provider's potential
claims against the U.S. Department of Agriculture over a $267
million loan. Charles Forman was appointed Chapter 7 trustee.
OVERLAND STORAGE: Columbus Capital Ceases to Own 5% Equity Stake
----------------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Columbus Capital Management, LLC, and Matthew
D. Ockner disclosed that, as of May 10, 2012, they beneficially
own 853,100 shares of common stock of Overland Storage, Inc.,
representing 3.1% of the shares outstanding.
Columbus Capital previously reported beneficial ownership of
1,241,100 common shares or a 5.2% equity stake as of Dec. 31,
2011.
A copy of the amended filing is available for free at:
http://is.gd/hQi8xP
About Overland Storage
San Diego, Calif.-based Overland Storage, Inc. (Nasdaq: OVRL) --
http://www.overlandstorage.com/-- is a global provider of unified
data management and data protection solutions designed to enable
small and medium enterprises (SMEs), corporate departments and
small and medium businesses (SMBs) to anticipate and respond to
change.
The Company reported a net loss of $14.50 million on $70.19
million of net revenue for the fiscal year ended June 30, 2011,
compared with a net loss of $12.96 million on $77.66 million of
net revenue during the prior fiscal year.
The Company's balance sheet at March 31, 2012, showed $41.32
million in total assets, $37.30 million in total liabilities and
$4.01 million in total shareholders' equity.
Moss Adams LLP, in San Diego, California, noted that the Company's
recurring losses and negative operating cash flows raise
substantial doubt about the Company's ability to continue as a
going concern.
PATIENT SAFETY: Kinderhook Discloses 20.1% Equity Stake
-------------------------------------------------------
In a Schedule 13D filing with the U.S. Securities and Exchange
Commission, Kinderhook Partners, LP, and its affiliates disclosed
that, as of May 15, 2012, they beneficially own 7,359,435 shares
of common stock of Patient Safety Technologies, Inc., representing
20.1% of the shares outstanding. A copy of the filing is
available for free at http://is.gd/DUvO5U
About Patient Safety Technologies
Patient Safety Technologies, Inc. (OTC: PSTX) --
http://www.surgicountmedical.com/-- through its wholly owned
operating subsidiary SurgiCount Medical, Inc., provides the
Safety-Sponge(TM) System, a system designed to improve the
standard of patient care and reduce health care costs by
preventing the occurrence of surgical sponges and other retained
foreign objects from being left inside patients after surgery.
RFOs are among one of the most common surgical errors.
The Company's balance sheet at March 31, 2012, showed $13.99
million in total assets, $5.09 million in total liabilities, all
current, and $8.90 million in total stockholders' equity.
PATRIOT COAL: Hires Blackstone on Debt Refinancing Talks
--------------------------------------------------------
Patriot Coal Corporation said Tuesday it is continuing to work
with lenders to strengthen its finances, including the replacement
of its current credit facilities well before certain of its debt
obligations become due in March 2013. Patriot has engaged The
Blackstone Group and continues to work with Davis Polk & Wardwell
LLP, its long-standing counsel, to achieve an optimal financing
package.
Earlier this month, Patriot entered into a commitment letter for a
new revolving credit facility and new term loan facility for a
total of $625 million from Citigroup Global Markets, Inc.,
Barclays Bank PLC and Natixis, New York Branch.
Dow Jones Newswires' Matt Day and Ben Fox Rubin report that
Patriot issued the statement after a selloff of the Company's
shares following a Debtwire report on the Company's alleged plans
to restructure. Debtwire late Monday said Patriot was fielding
pitches from restructuring advisers in the event the company can't
satisfy its near-term financing needs. Debtwire said Blackstone
and Centerview Partners LLC were involved and Davis Polk was
organizing the talks on Patriot's behalf.
Dow Jones also reports that on Tuesday risk premiums on Patriot's
8.25% bonds due April 2018 were around 4 percentage points wider
on the day to trade at a spread of 23.4 percentage points over
Treasurys of a comparable maturity, according to MarketAxess data.
The bonds now yield 23.8%, up from 20.165% earlier in the session,
and their price was last quoted by MarketAxess at 51.75 cents on
the dollar, down from 60 cents earlier Tuesday and 60-63 cents
Monday.
About Patriot Coal
St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer
and marketer of coal in the eastern United States, with 13 active
mining complexes in Appalachia and the Illinois Basin. The
Company ships to domestic and international electricity
generators, industrial users and metallurgical coal customers, and
controls roughly 1.9 billion tons of proven and probable coal
reserves.
PHILADELPHIA ORCHESTRA: Inks Amended Lease Deal to Reduce Rent
--------------------------------------------------------------
Peter Dobrin at the Philadelphia Inquirer's Classical Music Critic
section reports leaders of the Philadelphia Orchestra Association
and Kimmel Center Inc. have signed an amendment to their existing
lease that reduces the base rent.
The report relates the new terms were not entirely clear; a copy
of the amendment was not filed in U.S. Bankruptcy Court as of
Monday evening. Details are expected in the orchestra's
forthcoming reorganization plan.
According to the report, the deal calls for a reduction in the
rent the orchestra pays to the Kimmel, from about $2.5 million to
$1.5 million annually. The rent will increase each year through
2017, to $1.74 million. Starting in 2018, the Kimmel will have
the option of collecting an increased base rent or 16% of ticket
revenues from orchestra concerts in Verizon Hall.
The report notes the new agreement requires Bankruptcy Court
approval. Judge Eric L. Frank has extended the association's
exclusive period in which it has the sole right to submit a
reorganization plan -- to Aug. 9.
About Philadelphia Orchestra
The Philadelphia Orchestra -- http://www.philorch.org/-- claims
to be among the world's leading orchestras. Bloomberg News says
the orchestra became the first major U.S. symphony to file for
bankruptcy protection, surprising the music world.
Previous conductors include Fritz Scheel (1900-07), Carl Pohlig
(1907-12), Leopold Stokowski (1912-41), Eugene Ormandy (1936-80),
Riccardo Muti (1980-92), Wolfgang Sawallisch (1993-2003), and
Christoph Eschenbach (2003-08). Charles Dutoit is currently chief
conductor, and Yannick Nezet-Seguin has assumed the title of music
director designate until he takes up the baton as The Philadelphia
Orchestra's next music director in 2012.
The Philadelphia Orchestra Association, Academy of Music of
Philadelphia, Inc., and Encore Series, Inc., filed separate
Chapter 11 petitions (Bankr. E.D. Pa. Case Nos. 11-13098 to
11-13100) on April 16, 2011. Judge Eric L. Frank presides over
the case. The Philadelphia Orchestra Association is being advised
by Dilworth Paxson LLP, its legal counsel, and Alvarez & Marsal,
its financial advisor. Curley, Hessinger & Johnsrud serves as its
special counsel. Philadelphia Orchestra disclosed $15,950,020 in
assets and $704,033 in liabilities as of the Chapter 11 filing.
Encore Series, Inc., tapped EisnerAmper LLP as accountants and
financial advisors.
Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed
seven members to the official committee of unsecured creditors in
the Debtors' case. Reed Smith LLP serves as the Committee's
counsel.
The orchestra postpetition signed a new contract with musicians
and authority to terminate the existing musicians' pension plan.
PINNACLE AIRLINES: Settling with Victims of Buffalo Air Crash
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Pinnacle Airlines Corp. cleared the way for families
of three victims of the crash near Buffalo, New York, in 2009 to
complete settlements. The agreements call for the survivors to
collect only from insurance companies that agreed to the
settlements. The automatic stay was modified to clarify the
ability of the families and the insurance companies to complete
the settlements, while giving releases to Pinnacle. Financial
terms of the settlements weren't disclosed.
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. The Committee selected Goodrich
Corporation as its chairperson. The Committee tapped Morrison &
Foerster LLP as its counsel.
PJ FINANCE: Settlement Agreement with Lexington Insurance Approved
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved a
stipulation and settlement among PJ Finance Company, LLC, et al.,
the Official Committee of Unsecured Creditors and Lexington
Insurance Company.
As reported in the Troubled Company Reporter on April 24, 2012,
Lexington issued, prior to the Petition Date, insurance policies
to a non-debtor, Alliance Residential Management, LLC. Certain of
the Debtors and their properties were covered under the policies.
The Debtors noted that they sought coverage under the policies
with respect to two of the six claims at issue in the Declaratory
Action; as:
a) Chase Peysen v. Alliance PJRT Limited Partnership formerly
known as Alliance RT Limited Partnership, doing business as Cranes
Landing Apartments, Alliance PJRT GP, Inc. formerly known as
Alliance RT GP, Inc. and Alliance Residential Management, LLC, in
the Circuit Court of the 9th Judicial Circuit in and for Orange
County, Florida; and
b) Mykisha McLane, as next of friend of Da-veon Guy v. Alliance
Residential Management, in the District Court of the 342nd
Judicial District in and for Tarrant County, Texas. The Debtors
have not sought and are not entitled to coverage with respect to
the remaining claims at issue in the Declaratory Action as those
claims were not filed against the Debtors, and do not implicate
the Debtors' properties.
Chase Peysen filed for relief from the automatic stay on Aug. 15,
2011. The Peysen Stay Relief Motion was originally scheduled for
Sept. 1, 2011. On Oct. 26, 2011, the Debtors filed an objection
to the Peysen Stay Relief Motion. The Committee filed an
objection to the Peysen Stay Relief Motion on Oct. 27, 2011. The
Debtors, the Committee and Peysen have been working to resolve the
Peysen Stay Relief Motion consensually and have been adjourning
the Peysen Stay Relief Motion while they continue their
discussions. It is scheduled for hearing at 1:00 p.m. on May 8,
2012.
To ensure that there is coverage for the Peysen Lawsuit and the
McLane Lawsuit, the Debtors sought to reach a settlement with the
Committee and Lexington regarding coverage for these claims. The
parties agreed that:
i) the Debtors will pay $300,000 to Lexington in full
satisfaction of the remaining self-insured retention
obligations relating to the Peysen Lawsuit and the McLane
Lawsuit;
ii) Lexington will not seek any relief against the Debtors in
the Declaratory Action, and will be forever barred from
asserting claims against the Debtors that relate to the
Peysen Lawsuit, the McLane Lawsuit, or the subject matter of
the Declaratory Action, generally. However, the bar of
claims against the Debtors will not prejudice Lexington's
coverage position or right to pursue the Declaratory Action
with respect to any defendant or potential defendant other
than the Debtors.
Aside from the satisfaction of the SIR Provisions as they relate
to the Peysen Lawsuit and the McLane Lawsuit, nothing in the
Stipulation and Settlement modifies or amends any of the terms of
the policies, which shall remain in full force and effect.
Lexington will provide coverage to the Debtors under the
applicable Policies with regard to the Peysen Lawsuit and McLane
Lawsuit subject to the applicable terms and conditions of the
policies and the terms of the Stipulation and Settlement.
About PJ Finance
Chicago, Illinois-based PJ Finance Company, LLC, owns apartment
communities in the states of Arizona, Florida, Georgia, Tennessee
and Texas. PJ Finance owns or holds ownership interests in 32
apartment communities that collectively have more than 9,500
rentable units. It has 20 apartment locations in Texas, and the
remaining 12 in Arizona, Florida, Georgia and Tennessee. The day-
to-day operations of the portfolio are managed by a third party,
WestCorp Management Group One, Inc.
PJ Finance and various affiliates filed for Chapter 11 bankruptcy
protection (Bankr. D. Del. Lead Case No. 11-10688) on March 7,
2011. Matthew L. Hinker, Esq., at Greenberg Traurig, LLP, in
Wilmington, Delaware; and Michelle E. Marino, Esq., and Stuart M.
Brown, Esq., at DLA Piper LLP (US), in Wilmington, Delaware, serve
as bankruptcy counsel. Ernst & Young LLP serves as the Debtors'
independent auditors. Kurtzman Carson Consultants, LLC, is the
Debtors' claims and notice agent. An official committee of
unsecured creditors has been named in the case. Christopher A.
Jarvinen, Esq., Janine M. Cerbone, Esq., Joseph Orbach, Esq., and
Mark T. Power, Esq., at Hahn & Hessen LLP, in New York, N.Y.
represent the committee as lead counsel. Kimberly A. Brown, Esq.,
Matthew B. McGuire, Esq., and Richard Scott Cobb, Esq., at Landis
Rath & Cobb, in Wilmington, Del., serve as the Committee's
local counsel.
The Debtors estimated total assets of at least $275 million
(estimated value of portfolio securing loan to Bank of America)
and total debts of at least $479 million ($475 million owed to
BofA, $4.4 million trade debt).
As of May 11, 2012, all conditions to the occurrence of the
Effective Date set forth in Plan of Reorganization dated Jan. 25,
2012, and confirmation order were satisfied or waived in
accordance therewith.
REAL ESTATE ASSOCIATES: No Remaining Investment in Bellair
----------------------------------------------------------
Real Estate Associates Limited VII holds a 99.9% general partner
interest in Real Estate Associates IV which, in turn, holds a
98.99% limited partnership interest in Bellair Manor Ltd.
On May 17, 2012, Bellair Manor sold its investment property to The
Orlean Company in exchange for (i) full satisfaction of the non-
recourse note payable due to an affiliate of the Purchaser, (ii)
the assumption of the outstanding mortgage loan encumbering the
property, and (iii) the sum of one dollar. Real Estate did not
receive any proceeds from the sale. Real Estate had no investment
balance remaining in Bellair Manor at March 31, 2012.
About Real Estate Associates
Real Estate Associates Limited VII is a limited partnership which
was formed under the laws of the State of California on May 24,
1983. On February 1, 1984, the Partnership offered 2,600 units
consisting of 5,200 limited partnership interests and warrants to
purchase a maximum of 10,400 additional limited partnership
interests through a public offering managed by E.F. Hutton Inc.
The Partnership received $39,000,000 in subscriptions for units of
limited partnership interests (at $5,000 per unit) during the
period from March 7, 1984 to June 11, 1985.
The Partnership will be dissolved only upon the expiration of 50
complete calendar years -- December 31, 2033 -- from the date of
the formation of the Partnership or the occurrence of various
other events as specified in the Partnership agreement. The
principal business of the Partnership is to invest, directly or
indirectly, in other limited partnerships which own or lease and
operate Federal, state and local government-assisted housing
projects.
The general partners of the Partnership are National Partnership
Investments Corp., a California Corporation, and National
Partnership Investments Associates II. The business of the
Partnership is conducted primarily by NAPICO, a subsidiary of
Apartment Investment and Management Company, a publicly traded
real estate investment trust.
The Partnership holds limited partnership interests in 11 local
limited partnerships as of both March 31, 2010, and December 31,
2009. The Partnership also holds a general partner interest in
Real Estate Associates IV, which, in turn, holds limited
partnership interests in nine additional Local Limited
Partnerships; therefore, the Partnership holds interests, either
directly or indirectly through REA IV, in twenty (20) Local
Limited Partnerships. The general partner of REA IV is NAPICO.
The Local Limited Partnerships own residential low income rental
projects consisting of 1,387 apartment units at both March 31,
2010, and December 31, 2009. The mortgage loans of these projects
are payable to or insured by various governmental agencies.
The Partnership reported a net loss of $861,000 on $0 of revenue
in 2011, compared with net income of $171,000 on $0 of revenue in
2010.
The Partnership's balance sheet at March 31, 2012, showed $1.16
million in total assets, $21.51 million in total liabilities and a
$20.35 million total partners' deficit.
For 2011, Ernst & Young LLP, in Greenville, South Carolina,
expressed substantial doubt about the Partnership's ability to
continue as a going concern. The independent auditors noted that
the Partnership continues to generate recurring operating losses.
In addition, notes payable and related accrued interest totaling
approximately $16,164,000 are in default due to non-payment.
REDDY ICE: Committee Taps Cox Smith as Local Bankruptcy Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
cases of Reddy Ice Holdings, Inc., and Reddy Ice Corporation asks
the U.S. Bankruptcy Court for the Northern District of Texas for
permission to retain Cox Smith Matthews Incorporated as its local
counsel.
Cox Smith will use its best efforts to avoid duplication of
efforts undertaken by lead counsel Pachulski Stang Ziehl & Jones,
so that the Committee can benefit from coordinated representation.
The primary attorneys for Cox Smith who will represent the
Committee and their hourly rates are:
George H. Tarpley, shareholder $565
Aaron M. Kaufman, associate $330
Deborah Andreacchi, paralegal $180
To the best of the Committee's knowledge, the shareholders,
counsel, and associates of Cox Smith do not have any connection
with any interest adverse to the Committee or the Debtors'
estates.
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 canceled. 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.
The Official Committee of Unsecured Creditors tapped Pachulski
Stang Ziehl & Jones as lead counsel, and Cox Smith Matthews
Incorporated as its local counsel.
REDDY ICE: Wants KCC to Maintain Bank Account for Rights Offering
-----------------------------------------------------------------
Reddy Ice Holdings, Inc., and Reddy Ice Corporation ask the U.S.
Bankruptcy Court for the Northern District of Texas to authorize
Kurtzman Carson Consultants LLC, as subscription agent under the
rights offering and rights offering procedures approved by this
Court, to establish and maintain a bank account for the benefit of
the Debtors in furtherance of the rights offering.
On April 21, 2012, Court entered an order (a) authorizing the
Debtors to conduct the rights offering pursuant to the rights
offering procedures; (b) approving rights exercise forms and
related documents, and (c) approving the indemnity provisions
under the investment agreement, which, among other things,
authorized the Debtors to commence the rights offering described
in their Disclosure Statement pursuant to the rights offering
procedures.
The Rights Offering, among other things:
-- is a critical aspect of the Debtors' restructuring under the
Plan, it involves raising capital through a $17.5 million
rights offering for preferred stock of Reddy Holdings in
connection with the Debtors' emergence from these Chapter 11
cases;
-- was launched on April 19, and the deadline to participate in
the rights offering is on May 17, -- the day before the
Debtors' hearing on confirmation of the Plan; and
-- requires that the funds collected pursuant to the rights
offering be maintained in a segregated account maintained by
the subscription agent.
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 canceled and all Discount Notes
will be canceled. 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.
The Official Committee of Unsecured Creditors tapped Pachulski
Stang Ziehl & Jones as lead counsel, and Cox Smith Matthews
Incorporated as its local counsel.
RITCHIE RISK-LINKED: U.S. Bank Wins Injunction Over Sold Policy
---------------------------------------------------------------
Bankruptcy Judge Burton R. Lifland granted the request of U.S.
Bank National Association, in its capacity as securities
intermediary, to enforce the Court's Jan. 17, 2008 order
authorizing the sale of substantially all the assets of Ritchie
Risk-Linked Strategies Trading (Ireland) II, Ltd., to Nutmeg Life
Settlement Trust. U.S. Bank wants the injunctive provisions of
the sale order enforced against The Bancorp Bank to prevent
Bancorp from pursuing, in any fashion or forum whatsoever, its
purported death benefit claim against a life insurance policy that
was included in the sale to Nutmeg.
Bancorp had argued that (i) U.S. Bank's request should have been
brought as an adversary proceeding, not a motion; (ii) the Court
should permissively abstain from determining this matter; and,
(iii) if the Court does not abstain, it should deny the Motion
because Bancorp was not provided with adequate notice.
The Court, however, said U.S. Bank's request need not have been
brought as an adversary proceeding, permissive abstention is
inappropriate, and that Bancorp was afforded adequate notice.
A copy of the Court's May 22, 2012 Memorandum Decision and Order
is available at http://is.gd/qi8oYTfrom Leagle.com.
Sidley Austin LLP's John G. Hutchinson, Esq., and Lee S.
Attanasio, Esq., argue for U.S. Bank National Association, as
Securities Intermediary.
David L. Braverman, Esq., and Richard S. Julie, Esq., at Braverman
Kaskey, P.C., in Philadelphia, represent The Bancorp Bank.
About Ritchie Risk-Linked
Based in Dublin, Ireland, Ritchie Risk-Linked Strategies Trading
(Ireland) Ltd. and Ritchie Risk-Linked Strategies Trading
(Ireland) II Ltd. were Dublin-based funds of hedge fund group
Ritchie Capital Management. The Debtors were formed as special
purpose vehicles to invest in life insurance policies in the life
settlement market.
Headquartered in Lisle, Illinois, Ritchie Capital Management
Ltd. -- http://www.ritchiecapital.com/-- is a private asset
management firm founded in 1997 by former college football
linebacker Thane Ritchie. The company has offices in New York
and Menlo Park, California.
The hedge funds filed for Chapter 11 protection (Bankr. S.D.N.Y.
Case Nos. 07-11906 and 07-11907) on June 20, 2007. The firm
LeBoeuf, Lamb, Greene & MacRae, LLP, represented the Debtors in
their restructuring efforts. The LeBoeuf firm later merged with
Dewey Ballantine to form Dewey & LeBoeuf. Dewey & LeBoeuf
dissolved in May 2012. When the Debtors filed for bankruptcy,
they listed estimated assets and debts of more than $100 million.
In January 2008, the Bankruptcy Court approved the sale of the
assets of Ritchie Ireland I and II. Nutmeg Life Settlement Trust,
an affiliate of defunct Bear Stearns Co., acquired 182 polices
from the Debtors for $56.5 million while ABN Amro NV bought 891
policies for $396 million, a total of $452.5 million.
In September 2008, the Bankruptcy Court approved the Chapter 11
Liquidation Plan for Ritchie Ireland I and II.
RIVERGLEN HOMES: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Riverglen Homes, LLC
dba Value Investment Properties, LLC
6633 Cassie Lane
Hixson, TN 37343
Bankruptcy Case No.: 12-12558
Chapter 11 Petition Date: May 21, 2012
Court: U.S. Bankruptcy Court
Eastern District of Tennessee (Chattanooga)
Judge: John C. Cook
Debtor's Counsel: Kyle R. Weems, Esq.
WEEMS & RONAN
744 McCallie Avenue, Suite 520
Chattanooga, TN 37403
Tel: (423) 624-1000
E-mail: weemslaw@earthlink.net
Scheduled Assets: $0
Scheduled Liabilities: $2,235,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Michael Krumm by Sherry Presley, owner.
Affiliate that filed separate Chapter 11 petition:
Entity Case No. Petition Date
------ -------- -------------
Value Investment Properties, LLC 11-16395 11/17/11
ROTHSTEIN ROSENFELDT: 2 Feeder Funds Charged for Ponzi Schemes
--------------------------------------------------------------
The Securities and Exchange Commission on Tuesday charged two
individuals who provided the biggest influx of investor funds into
one of the largest-ever Ponzi schemes in South Florida.
The SEC alleges that George Levin and Frank Preve, who live in the
Fort Lauderdale area, raised more than $157 million from 173
investors in less than two years by issuing promissory notes from
Levin's company and interests in a private investment fund they
operated. They used investor funds to purchase discounted legal
settlements from former Florida attorney Scott Rothstein through
his prominent law firm Rothstein Rosenfeldt and Adler PA.
However, the settlements Rothstein sold were not real and the
supposed plaintiffs and defendants did not exist. Rothstein
simply used the funds in classic Ponzi scheme fashion to make
payments due other investors and support his lavish lifestyle.
Rothstein's Ponzi scheme collapsed in October 2009, and he is
currently serving a 50-year prison sentence.
The SEC alleges that Levin and Preve misrepresented to investors
that they had procedural safeguards in place to protect investor
money when in fact they often purchased settlements without first
seeing any legal documents or doing anything to verify that the
settlement proceeds were actually in Rothstein's bank accounts.
Moreover, as the Ponzi scheme was collapsing and Rothstein stopped
making payments on prior investments, Levin and Preve sought new
investor money while falsely touting the continued success of
their investment strategy. With their fate tied to Rothstein,
Levin and Preve's settlement purchasing business collapsed along
with the Ponzi scheme.
"Levin and Preve fueled Rothstein's Ponzi scheme with the false
sense of security they gave investors," said Eric I. Bustillo,
Director of the SEC's Miami Regional Office. "They promised to
safeguard investors' assets, but gave Rothstein money with nothing
to show for it."
According to the SEC's complaint filed in federal court in Miami,
Levin and Preve began raising money to purchase Rothstein
settlements in 2007 by offering investors short-term promissory
notes issued by Levin's company -- Banyon 1030-32 LLC. In 2009,
seeking additional funds from investors, they formed a private
investment fund called Banyon Income Fund LP that invested
exclusively in Rothstein's settlements. Banyon 1030-32 served as
the general partner of the fund, and its profit was generated from
the amount by which the settlement discounts obtained from
Rothstein exceeded the rate of return promised to investors.
The SEC alleges that the offering materials for the promissory
notes and the private fund contained material misrepresentations
and omissions. They misrepresented to investors that prior to any
settlement purchase, Banyon 1030-32 would obtain certain
documentation about the settlements to ensure the safety of the
investments. Levin and Preve, however, knew or were reckless in
not knowing that Banyon 1030-32 often purchased settlements from
Rothstein without obtaining any documentation whatsoever.
Furthermore, the SEC alleges that Banyon Income Fund's private
placement memorandum misrepresented that the fund would be a
continuation of a successful business strategy pursued by Banyon
1030-32 during the prior two-and-a-half years. Levin and Preve
failed to disclose that by the time the Banyon Income Fund
offering began in May 2009, Rothstein had already ceased making
payments on a majority of the prior settlements Levin and his
entities had purchased. They also failed to inform investors that
Levin's ability to recover his prior investments from Rothstein
was contingent on his ability to raise at least $100 million of
additional funding to purchase more settlements from Rothstein.
The SEC's complaint seeks disgorgement of ill gotten gains,
financial penalties, and permanent injunctive relief against Levin
and Preve to enjoin them from future violations of the federal
securities laws.
The SEC's investigation, which is continuing, has been conducted
by senior counsels D. Corey Lawson and Steven J. Meiner and staff
accountant Tonya T. Tullis under the supervision of Assistant
Regional Director Chad Alan Earnst. Senior trial counsels James M.
Carlson and C. Ian Anderson are leading the litigation.
The SEC acknowledges the assistance of the U.S. Attorney's Office
for the Southern District of Florida, the Federal Bureau of
Investigation, and the Internal Revenue Service.
About Rothstein Rosenfeldt
Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler
PA -- http://www.rra-law.com/-- has been suspected of running a
$1.2 billion Ponzi scheme. U.S. authorities claimed in a civil
forfeiture lawsuit filed November 9, 2009, that Mr. Rothstein, the
firm's former chief executive officer, sold investments in non-
existent legal settlements. Mr. Rothstein pleaded guilty to five
counts of conspiracy and wire fraud on January 27, 2010.
Creditors of Rothstein Rosenfeldt Adler signed a petition sending
the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No.
09-34791). The petitioners include Bonnie Barnett, who says she
lost $500,000 in legal settlement investments; Aran Development,
Inc., which said it lost $345,000 in investments; and trade
creditor Universal Legal, identified as a recruitment firm, which
said it is owed $7,800. The creditors alleged being owed money
invested in lawsuit settlements.
Herbert M. Stettin, the state-court appointed receiver for
Rothstein Rosenfeldt, was officially carried over as the
Chapter 11 trustee in the involuntary bankruptcy case.
On June 10, 2010, Mr. Rothstein was sentenced to 50 years in
prison.
RQB RESORT: Plan of Reorganization Declared Effective
-----------------------------------------------------
RQB Resort LP and RQB Development LP notified the U.S. Bankruptcy
Court for the Middle District of Florida that the Effective Date
of their Second Amended Plan of Reorganization occurred on
March 31, 2012.
As reported in the Troubled Company Reporter on Oct. 25, 2011,
Chief Judge Paul M. Glenn has confirmed the Second Amended Plan of
RQB Resort, LP, and RQB Development, LP, dated Sept. 20, 2011.
Judge Glenn ruled that the order will have no effect on Dr. Ellen
Pan's ability to seek recovery from the Debtors' insurance
providers in a personal injury action against the Debtors and
other defendants.
The distributions, proposed treatment and expected recoveries
under the Plan for the Debtors' creditors and equity interest
holders are:
A. Administrative Claims, estimated to be approximately $1.85
million, will be payable in full on the Effective Date
unless creditor agrees to different treatment. The
estimated recovery rate of administrative claims is
expected to be 100%.
B. Class 1 (Secured Tax Claims) is estimated to be between
$1.8 Million and $2.2 Million. These claims is payable in
full on the Effective Date with 4% interest paid on pre-
petition taxes. The estimated recovery rate of Class 1
claims is expected to be 100%.
C. Class 2 (Goldman's Secured Claim) is estimated to be $132
million. In full satisfaction of the claim, the Debtors
will transfer its encumbered assets to Goldman. The
estimated recovery rate of Class 2 claims is expected to
be 100%.
D. Class 3 (Unsecured Claims against RQB Resort) is estimated
to be approximately $190,000. These claims are payable on
the later of the Effective Date or the date claim is
allowed. The estimated recovery rate of Class 3 claims is
expected to be 50%.
E. Class 4 (General Unsecured Claims) is estimated to be
approximately $73.71 Million. These claims will be
payable on the later of the Effective Date or the date the
claim is allowed. The estimated recovery rate of Class 4
claims is expected to be 2.8%.
F. Class 5 (Equity Interests General and limited partnership
interests) will be cancelled with no distribution under
the Plan. The estimated recovery rate of Class 4 claims is
expected to be 0%.
RQB Resort, LP, and RQB Development, LP, amended its Chapter 11
Plan of Reorganization to accommodate revisions requested by
Goldman Sachs Mortgage Company, the Debtors' largest creditor
holding a claim secured by substantially all of the Debtors'
assets and a large unsecured claim.
In connection with their proposed reorganization, the Debtors
filed a joint plan on August 18, 2011. The Initial Plan proposed
to satisfy Goldman's secured claim by transferring all of the
equity interests in the Post-Confirmation Debtors to Goldman. The
Initial Plan also proposed to reject the Debtors' franchise
agreement with Marriott International, Inc., to assume, on
modified terms, the Debtors' hotel management agreement with
Interstate Hotels and Resorts, LLC, and to assume the Debtor's
agreement with SGR Asset Management LLC.
Immediately upon filing the Initial Plan, the Debtors informed
Goldman that the Debtors would cooperate with Goldman regarding
the manner in which the Debtors' encumbered property would be
transferred to Goldman and the assumption or rejection of the
Debtors' agreements.
Goldman has requested that the Debtors revise their Initial Plan
as follows: (i) transfer the Debtors' assets (rather than equity
interests in the Post-Confirmation Debtors) to Goldman, (ii)
appointment of a distribution agent to administer the
Post-Confirmation Debtors, (iii) assume and assign the Debtors'
franchise agreement with Marriott (rather than reject it), (iv)
reject the Debtors' hotel management agreement with Interstate,
effective after confirmation of a plan (rather than to assume it
on modified terms) and (v) reject the Debtors' asset and
development management agreements with SGR Asset Management, LLC.
The Debtors accepted Goldman's proposed revisions to the Initial
Plan in exchange for Goldman's agreement (i) to support the
Debtors' revised plan and (ii) to enter into a mutual release
agreement among the Debtors (including without limitation their
general partners, David O'Halloran, Patrick Murphy, Niall McFadden
and Patrick Kelly as limited guarantors of the Debtors'
indebtedness to Goldman and SGR Asset Management, LLC) and Goldman
(including Archon and Sandelman Partners) as well as all the
parties' successors, assigns, subsidiaries and present and former
affiliates, officers, directors, employees, agents, consultants,
professionals, and attorneys.
A full-text copy of the Second Amended Disclosure Statement dated
Sept. 20, is available for free at:
http://bankrupt.com/misc/RQB_secondamendeddisclosure.pdf
About RQB Resort
RQB Resort LP and RQB Development LP own Florida's Sawgrass
Marriott Resort, the site of the U.S. PGA Tour's Tournament
Players Championship.
Ponte Vedra Beach, Florida-based RQB Resort, LP, aka Sawgrass
Marriott Resort & Cabana Club, filed for Chapter 11 bankruptcy
protection (Bankr. M.D. Fla. Case No. 10-01596) on March 1, 2010.
The Company's affiliate -- RQB Development, LP, aka Sawgrass
Marriott Golf Villas & Spa -- filed a separate Chapter 11
petition. The Company estimated its assets and debts at
$100 million to $500 million in its Chapter 11 petition.
SAGAMORE PARTNERS: Exclusive Solicitation Extended to June 30
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida
extended Sagamore Partners, Ltd.'s exclusive period to solicit
acceptances of the plan up to and June 30, 2012.
Bay Harbor, Florida-based Sagamore Partners, Ltd., owns and
operates the prestigious oceanfront Sagamore Hotel, also known as
The Art Hotel due to its captivating art collection from
recognized artists and its contemporary design. The all-suite
boutique hotel is situated within Miami's Art Deco Historic
District on South Beach. Sagamore Partners is owned by Martin
Taplin.
Sagamore Partners filed for Chapter 11 bankruptcy (Bankr. S.D.
Fla. Case No. 11-37867) on Oct. 6, 2011. Judge A. Jay Cristol
presides over the case. Joshua W. Dobin, Esq., and Peter D.
Russin, Esq., at Meland Russin & Budwick, P.A., in Miami, Fla.,
serve as the Debtor's counsel. The Debtor disclosed $71,099,556
in assets and $52,132,849 in liabilities as of the Chapter 11
filing. The petition was signed by Martin W. Taplin, Pres of
Miami Beach Vacation Resorts, Inc., manager of Sagamore GP, LLC,
general partner.
SAGAMORE PARTNERS: Right to Use Cash Collateral to Expire May 24
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida
entered an order authorizing Sagamore Partners, Ltd., to continue
to use cash collateral of secured lender JPMCC 2006-LDP7 Miami
Beach Lodging LLC on an interim basis to pay for the operating
expenses and costs of administration incurred by the Debtor
strictly in accordance with a revised budget, with a permitted
variance of 5% on a per line item basis.
The Debtor's authority to use the Cash Collateral is slated to
expire May 24, 2012.
As of the Petition Date, the Debtor owed $31.5 million to the
Secured Lender.
As adequate protection, the Secured Lender is granted Replacement
Liens in all of the Debtor's Prepetition and Postpetition
Collateral.
As additional protection, the Debtor will make an interest payment
to the Secured Lender, calculated at the contract rate of 6.54%,
based on the outstanding principal amount of the Prepetition
Obligations, as provided in a budget prepared by the Debtor.
The Secured Lender is also granted an allowed superpriority
administrative expense claim under Section 507(b) of the
Bankruptcy Code.
About Sagamore Partners
Bay Harbor, Florida-based Sagamore Partners, Ltd., owns and
operates the prestigious oceanfront Sagamore Hotel, also known as
The Art Hotel due to its captivating art collection from
recognized artists and its contemporary design. The all-suite
boutique hotel is situated within Miami's Art Deco Historic
District on South Beach. Sagamore Partners is owned by Martin
Taplin.
Sagamore Partners filed for Chapter 11 bankruptcy (Bankr. S.D.
Fla. Case No. 11-37867) on Oct. 6, 2011. Judge A. Jay Cristol
presides over the case. Joshua W. Dobin, Esq., and Peter D.
Russin, Esq., at Meland Russin & Budwick, P.A., in Miami, Fla.,
serve as the Debtor's counsel. The Debtor disclosed $71,099,556
in assets and $52,132,849 in liabilities as of the Chapter 11
filing. The petition was signed by Martin W. Taplin, Pres of
Miami Beach Vacation Resorts, Inc., manager of Sagamore GP, LLC,
general partner.
SAINT VINCENTS: Wants Deal on Allocation of Sale Proceeds OK'd
--------------------------------------------------------------
Saint Vincents Catholic Medical Centers of New York, et al., ask
the U.S. Bankruptcy Court for the Southern District of New York
approve a settlement stipulation and agreement relating to the
allocation of the net proceeds of the sale of the Debtors'
Westchester behavioral health hospital and certain other related
behavioral health assets.
The stipulation was entered among the Debtors, the Official
Committee of Unsecured Creditors, Sun Life Assurance Company of
Canada, and The Med Mal Trust Monitor, as monitor for certain
medical malpractice trusts.
The Debtors relate that in the fall of 2010, the Debtors sold
their Behavioral Health Assets, including St. Vincents
Westchester, to St. Joseph's Medical Center. Since the closing,
the Debtors have held the proceeds of the sale -- consisting of
approximately $18 million in cash and a $6 million note -- in
escrow, subject to the competing claims of the estates and several
secured creditors. After months of negotiation and a Court-
ordered mediation, the Debtors, the Committee and the remaining
secured creditors, Sun Life and the Med Mal Monitor, have agreed
to an allocation of the sale proceeds and treatment of the
competing claims to the sale proceeds.
In this relation, the Debtors now seek approval of the terms of
the parties' Settlement Agreement. The salient terms of the
Settlement Agreement are:
-- The Sun Life Westchester Secured Claim will be compromised
and allowed in the amount of $11.37 million, payable in cash
from the Escrow within 10 days of the effective date of the
Settlement Agreement (without interest);
-- Sun Life will waive and release all other claims it may hold
against the Debtors' estates, including any unsecured
deficiency and adequate protection claims;
-- The Med Mal Trusts will receive no distribution on account
of their secured interest in the Westchester Real Property;
and
-- The Debtors' estates will retain the balance of the Net Sale
Proceeds, i.e., the Note and the cash remaining in the
Escrow after payment of the $11.37 million to Sun Life.
A full-text copy of the settlement is available for free at
http://bankrupt.com/misc/SAINTVINCENTS_settlement.pdf
About Saint Vincents
Saint Vincents Catholic Medical Centers of New York, doing
business as St. Vincent Catholic Medical Centers --
http://www.svcmc.org/-- was anchored by St. Vincent's Hospital
Manhattan, an academic medical center located in Greenwich Village
and the only emergency room on the Westside of Manhattan from
Midtown to Tribeca, St. Vincent's Westchester, a behavioral health
hospital in Westchester County, and continuing care services that
include two skilled nursing facilities in Brooklyn, another on
Staten Island, a hospice, and a home health agency serving the
Metropolitan New York area.
Saint Vincent Catholic Medical Centers of New York and six of its
affiliates first filed for Chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case Nos. 05-14945 through 05-14951).
St. Vincents Catholic Medical Centers returned to bankruptcy court
by filing another Chapter 11 petition (Bankr. S.D.N.Y. Case No.
10-11963) on April 14, 2010. The Debtor estimated assets of
$348 million against debts totaling $1.09 billion in the new
petition.
Although the hospitals emerged from the prior reorganization in
July 2007 with a Chapter 11 plan said to have "a realistic chance"
of paying all creditors in full, the bankruptcy left the medical
center with more than $1 billion in debt. The new filing occurred
after a $64 million operating loss in 2009 and the last potential
buyer terminated discussions for taking over the flagship
hospital.
Adam C. Rogoff, Esq., and Kenneth H. Eckstein, Esq., at Kramer
Levin Naftalis & Frankel LLP, represent the Debtor in its
Chapter 11 effort.
SAPPHIRE VP: Taps Johnston Tobey to Handle Winstead Litigation
--------------------------------------------------------------
Sapphire VP, LP, asks the U.S. Bankruptcy Court for the Southern
District of Texas for permission to employ Robert L. Tobey, Coyt
Randal Johnston and Johnston Tobey, P.C., as special litigation
counsel.
Johnston Tobey will represent the Debtor in prosecuting the case
Sapphire VP, LP, v. Winstead PC and Edward A. Peterson,
Individually, Allan S. Katz and Lorin W. Combs, Individually
pending in the District Court of Dallas County, Texas. The
Winstead Litigation involves a suit for legal malpractice.
Johnston Tobey will be assisting, advising, investigating, filing
and prosecuting claims of the Debtor related to the Winstead
Litigation, including but not limited to any and all affirmative
claims and defenses for any and all damages.
Prepetition, Johnston Tobey represented the Debtor in the Winstead
Litigation on a contingency fee basis.
Postpetition, the Debtor agreed to pay the firm (a) an engagement
fee of $50,000 which will be earned upon receipt; and (b) a
contingent fee of 30% of the total recovery on the claims.
To the best of the Debtor's knowledge, Johnston Tobey does not
represent any interest adverse to the Debtor or its estate with
respect to the matter on which counsel will be employed as special
counsel.
About Sapphire VP
Houston, Texas-based Sapphire VP, LP, filed a Chapter 11 petition
(Bankr. S.D. Tex. Case No. 12-10173) in Brownsville on April 2,
2012. Sapphire, a Single Asset Real Estate as defined in 11
U.S.C. Sec. 101 (51B), disclosed $64 million in assets and $42.3
million in liabilities in its schedules.
The Debtor owns the Sapphire Condominiums located at South Padre
Island, Texas. The property is worth $35 million and secures a
$32.3 million debt.
Judge Richard S. Schmidt oversees the case. Melissa Anne
Haselden, Esq., at Hoover Slovacek LLP, in Houston, serves as
counsel to the Debtor. The petition was signed by Randall J.
Davis, as manager of the Debtor's general partner.
No trustee or examiner has been appointed in the Debtor's
bankruptcy case and no official committee of unsecured creditors
has yet been established.
SAPPHIRE VP: Taps Richard Daly, et al., for ZCA Litigation
----------------------------------------------------------
Sapphire VP, LP, asks the U.S. Bankruptcy Court for the Southern
District of Texas for permission to employ The Richard Daly Law
Firm, The Law Offices of Frank Costilla, LP and The Law Offices of
Jonathan Simon as special litigation attorneys.
The firms will represent the Debtor in prosecuting the case
Sapphire VP, LP, v. Arthur J. Gallegher Risk Management Services,
Inc. et. al., in the District Court of Cameron County, Texas,
404th Judicial District Court, and Sapphire VP, LP v. ZCA
Residential, LLC, et. al., in the District Court of Harris County,
Texas. The ZCA Litigation involves many of the same parties and
issues related to damages incurred by Debtor from Hurricane Dolly,
among other things.
The firms will be assisting, advising, investigating, filing and
prosecuting claims of the Debtor related to the ZCA Litigation,
including but not limited to any and all affirmative claims and
defenses for any and all damages related to the Debtor's property.
Prepetition, the firms represented the Debtor in the ZCA
Litigation.
The Debtor agreed to pay the firms 35% of gross proceeds recovered
in litigation, 40% of gross proceeds in the event of an appeal, or
35% of the gross proceeds recovered outside of litigation or by
means other than litigation.
To the best of the Debtor's knowledge, the firms do not hold or
represent an interest adverse to the Debtor or to the estate.
About Sapphire VP, LP
Houston, Texas-based Sapphire VP, LP, filed a Chapter 11 petition
(Bankr. S.D. Tex. Case No. 12-10173) in Brownsville on April 2,
2012. Sapphire, a Single Asset Real Estate as defined in 11
U.S.C. Sec. 101 (51B), disclosed $64 million in assets and $42.3
million in liabilities in its schedules.
The Debtor owns the Sapphire Condominiums located at South Padre
Island, Texas. The property is worth $35 million and secures a
$32.3 million debt.
Judge Richard S. Schmidt oversees the case. Melissa Anne
Haselden, Esq., at Hoover Slovacek LLP, in Houston, serves as
counsel to the Debtor. The petition was signed by Randall J.
Davis, as manager of the Debtor's general partner.
No trustee or examiner has been appointed in the Debtor's
bankruptcy case and no official committee of unsecured creditors
has yet been established.
SAPPHIRE VP: Wants Cash Collateral to Maintain Sapphire Condos
--------------------------------------------------------------
Sapphire VP, LP, asks the U.S. Bankruptcy Court for the Southern
District of Texas for authorization to use cash collateral in
order to fund operations while it reorganizes.
The Debtor own Sapphire Condominiums located at 310-320 Padre
Blvd., South Padre Island, Texas. The only revenue generated by
Sapphire is from the sale of condominium units.
On July 9, 2007, Sapphire entered into a loan agreement with Amegy
Bank National Association, International Bank of Commerce as co-
agents, which provided, among other things, that Amegy, IBC,
Capital One National Association, and Regions Bank loan the Debtor
up to $106,875,000,000 for the construction of the Sapphire
Property. As of the Petition Date, the outstanding indebtedness
owed on the Sapphire Loan Agreement is $23.2 million. Prior to
bankruptcy, IBC purchased the notes held by Amegy and Regions at a
significant discount. Thus, IBC is the current holder of the Note
A, B, and D. Capital One remains the holder of Note C.
Additionally, on July 9, 2006, IBC and Sapphire entered into a
Mezzanine Loan Agreement to loan Sapphire funds to finance certain
development costs. As of the Petition Date, the outstanding
indebtedness owed to IBC with respect to the Mezzanine Loan is
approximately $8.3 million.
Sapphire held, as of the Petition Date, approximately $230,000
cash in its bank account. IBC asserts that the money in the
account constitutes cash collateral and has not consented to the
use of the funds for maintenance of the Sapphire Property.
Sapphire asserts that IBC is adequately protected because the
value of the Sapphire Property exceeds the debt by several million
dollars.
Further Sapphire proposes to pay 90% of the net sale proceeds of
any condominium units sold during the bankruptcy case to IBC after
satisfaction of all closing costs, commissions and taxes. The
remaining 10% will be deposited into the DIP bank account to cover
future costs.
Objection
Secured lenders IBC and Premier Tierra Holdings, Inc., objects to
the use of their cash collateral. According to the lenders,
absent consent, the Debtor must obtain an order from the Court
authorizing the use of cash collateral by proving adequate
protection. The Debtor, the lenders complain, has failed to meet
its burden to establish that the Secured Lenders are adequately
protected. The only adequate protection offered in the Debtor's
cash collateral motion is the alleged equity cushion over and
above the secured lenders' debt. However, the Debtor understated
the amount of the secured lenders' debt and any alleged equity
cushion is not sufficient to provide adequate protection.
Valuation
Sapphire VP, LP and Diamond Beach VP, LP requested that the Court
determine the value of the real property collateral securing the
debt owed to IBC.
The Diamond Beach Case involves a mid-rise condominium development
in Galveston, Texas that was developed and constructed by the same
developer and general contractor. Both properties have similar
debt and equity structures, a common secured lender and Randall J.
Davis is the manager of each general partner. Sapphire and
Diamond are seeking joint administration of the two cases.
The Debtors believe the value of the Sapphire Property to be
between $34 and $37 million. Diamond Beach obtained an appraisal
indicating that its real property is valued at $29,410,000. This
appraisal was shared with IBC.
IBC has not provided the Debtors with any appraisals of the
respective properties.
According to the Debtors, the value of the collateral is key to
the terms of a feasible plan of reorganization. The valuation is
also key to a determination of whether to reorganize or liquidate
either or both properties in an orderly fashion under the terms of
a Chapter 11 plan.
About Sapphire VP, LP
Houston, Texas-based Sapphire VP, LP, filed a Chapter 11 petition
(Bankr. S.D. Tex. Case No. 12-10173) in Brownsville on April 2,
2012. Sapphire, a Single Asset Real Estate as defined in 11
U.S.C. Sec. 101 (51B), disclosed $64 million in assets and $42.3
million in liabilities in its schedules.
The Debtor owns the Sapphire Condominiums located at South Padre
Island, Texas. The property is worth $35 million and secures a
$32.3 million debt.
Judge Richard S. Schmidt oversees the case. Melissa Anne
Haselden, Esq., at Hoover Slovacek LLP, in Houston, serves as
counsel to the Debtor. The petition was signed by Randall J.
Davis, as manager of the Debtor's general partner.
No trustee or examiner has been appointed in the Debtor's
bankruptcy case and no official committee of unsecured creditors
has yet been established.
SAPPHIRE VP: Wants to Hire Hoover Slovacek as Bankruptcy Counsel
----------------------------------------------------------------
Sapphire VP, LP, asks the U.S. Bankruptcy Court for the Southern
District of Texas for permission to employ Edward L. Rothberg and
Hoover Slovacek LLP as bankruptcy counsel.
The hourly rates for HSLLP are:
Edward L. Rothberg $395
Annie Catmull $310
Melissa Haselden $275
T. Josh Judd $250
Mazelle S. Krasoff $175
Legal Assistants/Paralegals $85 - $125
Prior to the bankruptcy filing, the firm received a retainer from
the Debtor to be applied to fees, charged at regularly hourly
rates, and costs in the aggregate amount of $29,801 for
postpetition representation in the case.
To the best of the Debtor's knowledge, the firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Sapphire VP, LP
Houston, Texas-based Sapphire VP, LP, filed a Chapter 11 petition
(Bankr. S.D. Tex. Case No. 12-10173) in Brownsville on April 2,
2012. Sapphire, a Single Asset Real Estate as defined in 11
U.S.C. Sec. 101 (51B), disclosed $64 million in assets and
$42.3 million in liabilities in its schedules.
The Debtor owns the Sapphire Condominiums located at South Padre
Island, Texas. The property is worth $35 million and secures a
$32.3 million debt.
Judge Richard S. Schmidt oversees the case. Melissa Anne
Haselden, Esq., at Hoover Slovacek LLP, in Houston, serves as
counsel to the Debtor. The petition was signed by Randall J.
Davis, as manager of the Debtor's general partner.
No trustee or examiner has been appointed in the Debtor's
bankruptcy case and no official committee of unsecured creditors
has yet been established.
SEQUOIA PARTNERS: Wants 90-Day Extension for Disc. Statement
------------------------------------------------------------
Sequoia Partners, LLC and Sequoia Village, LLC, ask the U.S.
Bankruptcy Court for the Middle District of Florida for a 90-day
extension from the April 23, 2012, deadline to file an amended
disclosure statement.
The Debtors relate that the extension will allow SP to obtain a
loan from the proposed purchaser of SP's real property, U.S.
Capital Corporation.
The parties need additional time to finalize the terms of a
$30,000 loan in order to allow SP to obtain an appraisal of its
property in furtherance of an anticipated offer by USCC to
purchase SP's real property. The Debtors note that an appraisal
is required for the offer from USCC and for valuation of the
secured claims in the case.
Additionally, under the development alternative set forth in the
Plan, SP must obtain a loan of approximately $5 million (the
Development Loan). The Debtor may obtain the Development Loan
from an entity to be established by Chris Williams through Kennedy
Funding Financial, LLC located in New Jersey.
The Chapter 11 Plan
As reported in the Troubled Company Reporter on Feb. 6, 2012, the
Debors filed a joint disclosure statement in support of their
reorganization plan dated Jan. 9, 2012.
This Plan provides for the Sale of the Property to the Purchaser
free and clear of liens and encumbrances for an estimated price of
$9.4 million, which will pay all of the Creditors' Allowed Claims.
The Sale of the Property must close on the date on or before 180
days after the Effective Date. The Allowed Claims will be paid
within 30 days after the close of the Sale. A portion of the Sale
Proceeds will go to the Allowed Claims of the Sequoia Village Case
Creditors from payments to be made to South Valley Bank to
compensate Village for the South Valley Bank Lawsuit claims
asserted by Sequoia Partners and Village against South Valley.
The portion of the Sequoia Village Property securing the South
Valley Village Claim will be reconveyed to South Valley Bank in
complete satisfaction of the claim. The balance of the Sequoia
Village Property will be reconveyed to Southern Oregon Development
in complete satisfaction of its Secured Claim. The personal
property securing the Commercial Equipment Claim (Class 18) will
be reconveyed to Commercial Equipment in complete satisfaction of
its Secured Claim.
If the Sale does not close on or before the Sale Deadline, then
the Plan provides that the Debtor will obtain a Development Loan
of $5 million from Pebble Beach to develop the Golf Course to
begin Golf Course operations and create an environment to sell
Lots in the Project and to then refinance the Golf Course. The
sale proceeds from the First Lots will provide funds to implement
the Plan's repayment structure and further develop the Project,
including the Villa Lots. The Plan provides for payment in full
of Allowed Administrative Expenses within 30 days after the
funding of the Development Loan. The Plan provides for payment of
Josephine County's Allowed Secured Claim against Sequoia Partners
for real property taxes (Class 2) at an estimated amount of
$750,000, with a significant payment within 30 days after the
funding of the Development Loan, but in any event, no later than
five years from the Petition Date.
The Development Loan will be secured by a trust deed on the Golf
Course Lots, which will require that RRM release the RRM Blanket
Trust Deed and the RRM Original Trust Deeds. From the sale of
each lot out of the First Quad, which are anticipated to sell for
$110,000 to $175,000 each, the proceeds will be distributed in the
following order:
(a) the Allowed Secured Claim estimated to be $30,000 to
Rogue River Mortgage (RRM) if an RRM Lot is sold; the
Allowed Secured Claim estimated to be $40,000 to South
Valley Bank if an Estate lot is sold; and the Allowed
Secured Claim estimated to be $30,000 to Hillebrand PRR
if a Hillebrand PRR lot is sold;
(b) $50,000 to the Lender;
(c) the balance to the Debtor for further development of the
Project to generate additional lot sales.
A copy of the Disclosure Statement is available for free at:
http://bankrupt.com/misc/SEQUOIA_PARTNERS_ds.pdf
About Sequoia Partners, LLC
Grants Pass, Oregon-based Sequoia Partners, LLC, filed for Chapter
11 bankruptcy protection (Bankr. D. Ore. Case No. 10-67547) on
Dec. 29, 2010. Tara J. Schleicher, Esq., at Farleigh Wada Witt
Attorneys, serves as the Debtor's bankruptcy counsel. Beowulf
Consulting, LLC, serves as accountant. CPM Real Estate Services,
Inc., serves as loan broker. The Debtor estimated assets at $50
million to $100 million and debts at $10 million to
$50 million.
Robert D. Miller, Jr., U.S. Trustee for Region 18, appointed five
members to the official committee of unsecured creditors. The
Committee tapped Douglas R. Schultz and Cassie K. Jones and the
law firm of Gleaves Swearingen Potter & Scott LLP as its counsel.
SEVEN SEAS: Moody's Upgrades Ratings on Second Lien Debt to 'B2'
----------------------------------------------------------------
Moody's Investors Service upgraded Seven Seas' $225 million 9.125%
second lien notes due 2019 to B2 from B3. Seven Seas' Corporate
Family and Probability of Default ratings remain unchanged at B2.
The outlook remains stable.
The upgrade to Seven Seas' second lien notes reflects the
reduction in first lien debt (not rated) of approximately $70
million during the past 18 months along with the accretion of
payment in kind ("PIK") subordinated debt. Combined, these two
factors resulted in a decrease in debt that ranks ahead of the
second lien notes, and an increase in debt that ranks junior to
the second lien debt. This change in Seven Seas' debt capital
structure provided enough of an increase in protection to the
second lien notes in terms of loss absorption to warrant a one-
notch upgrade to the second lien notes, according to Moody's Loss
Given Default Methodology.
Seven Seas' first lien debt has been reduced through absolute debt
repayment -- the first lien term loan requires annual amortization
of $25 million -- and from a portion of the proceeds from the
company's May 2011 second lien note issuance. The increase in
subordinated debt reflects Seven Seas' share of PIK subordinated
debt that accretes approximately $14 million per year. Affiliates
of Apollo Management L.P. own a large ownership interest in Seven
Seas' ultimate parent, Prestige Cruise Holdings, Inc. ("PCH")
through Prestige Cruise International, Inc. PCH also owns Oceania
Cruises (which in turn owns Insignia Vessel Acquisition, LLC (B3,
negative)), so 50% of PCH's PIK subordinated debt is attributed to
Seven Seas and Oceania.
Ratings upgraded and LGD assessments revised:
$225 million 9.125% second lien notes due 2019 to B2 (LGD 3, 45%)
from B3 (LGD 4, 60%)
Ratings affirmed:
Corporate Family Rating at B2
Probability of Default Rating at B2
Rating Rationale:
Seven Seas' B2 Corporate Family Rating reflects the company's high
leverage, small scale in terms of capacity, and narrow business
focus on the luxury cruise market. The ratings also reflect a
stable demand environment that is expected to result in higher
revenue and EBITDA over the next 12 to 18 months, low
intermediate-term capital expenditure requirements, and Moody's
expectation that Seven Seas will apply the majority of its free
cash flow over the next several years towards debt reduction. Also
considered is Seven Seas' very good liquidity profile.
Seven Seas' earnings outlook for 2012 is stable given good forward
bookings at modestly higher cruise prices. Thus, Moody's expects
Seven Seas' revenues and earnings to rise modestly over the next
12 to 18 months as travel demand continues to recover from
disruption in the Mediterranean in 2011 caused by political
turmoil. However, demand in Europe is expected to remain sluggish
due to ongoing economic turmoil. Despite fuel hedging, higher oil
prices are likely to dampen some of the flow-through of higher
revenues to earnings.
The stable rating outlook reflects Moody's view that Seven Seas
will be able to reduce debt to EBITDA by year-end 2013 to about
9.5 times including the PIK sub debt -- 5.5 times excluding the
PIK sub debt -- and improve its EBITDA minus capital expenditures
to interest coverage to nearly 2.0 times. The stable outlook also
reflects Moody's expectations that the company will maintain its
very good liquidity profile.
Moody's does not expect upward rating momentum in the absence of
material debt reduction and Seven Seas' ability to achieve and
sustain EBITDA minus capital expenditures to interest above 2.0
times. A higher rating would also require the company maintain its
very good liquidity profile.
Ratings could be lowered if EBITDA minus capital expenditures to
interest drops below 1.25 times or if the company's liquidity
deteriorates for any reason. Separate from a change to the
Corporate Family Rating, the instrument rating on the second lien
notes could be downgraded if Seven Seas was to incur additional
first lien debt to purchase a new vessel.
The principal methodology used in rating Seven Seas Cruises S. DE
R. was the Global Lodging & Cruise Industry Rating 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.
Seven Seas Cruises S. DE R.L. is a cruise ship operator that
targets the luxury segment of the cruise industry with
destination-oriented cruises. Seven Seas was acquired by Prestige
Cruise Holdings, Inc. in January 2008. Seven Seas owns three
luxury cruise ships with aggregate berth capacity of 1,890. Seven
Seas generates about $480 million of gross annual revenue.
Affiliates of Apollo Management L.P. own a large ownership
interest in Seven Seas' ultimate parent, Prestige Cruise Holdings,
Inc. through Prestige Cruise International, Inc. Prestige Cruise
Holdings also owns Oceania Cruises (which in turn owns Insignia
Vessel Acquisition, LLC (B3, negative)).
SHEGA INC: Bank Foreclosure Notice Timely Under D.C. Law
--------------------------------------------------------
In the case, SHEGA INC., Chapter 11, Plaintiff, v. AMERICAN TRUST,
LLC, et al., Defendants, Adv. Proc. No. 12-10009 (Bankr. D. D.C.),
Shega Inc. contends that the scheduled foreclosure sale of its
real property is invalid because Shega was not given adequate
notice of the foreclosure sale. Section 42-815 of the D.C. Code
(2001) requires notice to be given "at least 30 days in advance of
the sale." On May 2, 2012, notice under D.C. Code Sec. 42-
815(c)(1)(A) (2001) of the foreclosure sale was filed with the
Recorder of Deeds for the District of Columbia (as agent for the
Mayor) and was sent to Shega scheduling the auction for June 1,
2012. Shega contends that this was insufficient notice to comply
with the statute.
On its face, the provision indicates that the 30-day notice must
precede the sale, and thus the day of the sale must necessarily be
excluded from the computation period.
Bankruptcy Judge S. Martin Teel, Jr. said that, in Shega's case,
it is appropriate to include the day of the Mayor's receipt of
notice, as is required by D.C. Code Sec. 42-815(c)(1)(4), and to
exclude the day of the event from the computation period.
Including May 2 in the computation period, there are 30 days (May
2-May 31) prior to the scheduled sale of June 1. Accordingly,
notice of the sale complied with D.C. Code Sec. 42-815, Judge Teel
ruled, rejecting Shega's argument.
A copy of Judge Teel's May 21, 2012 Memorandum Decision is
available at http://is.gd/banJGRfrom Leagle.com.
Shega Inc. filed for Chapter 11 bankruptcy (Bankr. D. D.C. Case
No. 11-00888) on Nov. 23, 2011, listing under $1 million in assets
and debts. A copy of the petition is available at no charge at
http://bankrupt.com/misc/dcb11-00888.pdf Jeffrey C. Tuckfelt,
Esq., at Obergh and Berlin, serves as the Debtor's counsel.
SHOPPES OF LAKESIDE: Authorized to Use Ameris Cash Collateral
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
authorized Shoppes of Lakeside, Inc., to use the cash collateral
which Ameris Bank, a Georgia banking corporation, formerly known
as American Banking Company.
Ameris Bank is successor by merger to First National Bank, a
national association, its successors and assigns made a series of
mortgage loans loans to borrowers.
The Debtor is authorized to use the cash collateral until the
expiration date which includes, among other things:
1. order of the Court;
2. the conversion of the case to a Chapter 7; and
3. the entry of an order that alters the validity or priority
of the replacement lien granted to Ameris Bank.
The Debtor would use the cash collateral to pay actual, necessary,
and ordinary expenses to operate its business as a debtor-in-
possession.
As adequate protection from any diminution in value of the
lender's collateral, the Debtor will grant Ameris Bank a
replacement lien, a superpriority administrative claim status, and
adequate protection payments.
A full-text copy of the terms of the cash collateral is available
for free at:
http://bankrupt.com/misc/SHOPPESOFLAKESIDE_cashcoll_order.pdf
About Shoppes of Lakeside
Neptune Beach, Florida-based Shoppes of Lakeside, Inc., holds
title to and generates income from residential and commercial
buildings and unimproved land in Duval County. The Debtor owns 45
commercial properties and 10 residential properties. The Debtor
filed for Chapter 11 bankruptcy protection on June 15, 2010
(Bankr. M.D. Fla. Case No. 10-05199). Taylor J. King, Esq., at
the Law Offices of Mickler & Mickler, in Jacksonville, Fla.,
represents the Debtor as counsel. The Debtor disclosed
$39.9 million in assets and $37.7 million in liabilities.
SHOPPES OF LAKESIDE: Court OKs Jerry Dicht as Public Accountant
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
authorized Shoppes of Lakeside, Inc. to employ Jerry Dicht as
public accountant.
About Shoppes of Lakeside
Neptune Beach, Florida-based Shoppes of Lakeside, Inc., holds
title to and generates income from residential and commercial
buildings and unimproved land in Duval County. The Debtor owns 45
commercial properties and 10 residential properties. The Debtor
filed for Chapter 11 bankruptcy protection on June 15, 2010
(Bankr. M.D. Fla. Case No. 10-05199). Taylor J. King, Esq., at
the Law Offices of Mickler & Mickler, in Jacksonville, Fla.,
represents the Debtor as counsel. The Debtor disclosed
$39.9 million in assets and $37.7 million in liabilities.
SHOPPES OF LAKESIDE: J Properties Withdraws Case Dismissal Plea
---------------------------------------------------------------
Secured Creditor J Properties IV, LLC, notified the U.S.
Bankruptcy Court for the Middle District of Florida that it has
withdrawn its motion to dismiss the Chapter 11 case of Shoppes of
Lakeside, Inc.
As reported in the Troubled Company Reporter on Dec. 22, 2011, J
Properties told the Bankruptcy Court that the Debtor's case was a
bad faith filing.
The Debtor is indebted to J Properties under a promissory note
executed and delivered on Oct. 18, 2006, by The Silver Pearl, LLC,
to VyStar Credit Union, J Properties' predecessor in interest.
J Properties stated in support of its motion to dismiss:
(i) The Debtor's only asset, until a matter of days before the
Petition Date, was a single piece of real property.
Similarly, the majority of the Hionides Entities held a
single piece of real property as their only asset until the
mergers occurred, shortly before the Petition Date.
(ii) The Debtor has few unsecured creditors, whose claims are
small in relation to the claims of secured creditors.
(iii) The Debtor has no employees.
(iv) At the time of the merger and the Petition Date, several of
the Hionides Entities were in default on loans secured by
real estate which, as a result, was at the time or was
anticipated to be, the subject of foreclosure actions.
(v) The Debtor's financial problems involve essentially disputes
between the Hionides Entities and their respective lenders,
which can be resolved in pending or future state court
actions.
(vi) The timing of the Debtor's filing evidences an intent to
delay and frustrate lenders' legitimate efforts to enforce
their rights through state court actions. Several
foreclosure actions were pending or imminent as of the
Petition Date. In fact, the petition was filed on the day
before the hearing on the Summary Judgment Motion in the
foreclosure action filed by Royal Bank.
In addition, according to J Properties, the two Chapter 11 plans
(Dec. 31, 2010, and April 20, 2011) proposed by the Debtor both
allow the Debtor to stave off secured creditors for seven years
with only minimal payments. Both plans also provide for an
improper release of the owner and managing member of Silver Pearl,
Chris Hionides' guarantee liabilities as to those same creditors.
"Rather than a legitimate effort to reorganize an existing
business, this case is an effort by [Mr.] Hionides to hang onto
all of his troubled real estate holdings to await a hoped-for
change in the market, while simultaneously discharging almost
$37,000,000 in guaranty liabilities -- all without submitting his
personal assets to the bankruptcy process."
J Properties adds: "Finally, having twice continued the disclosure
statement hearing in the face of objections by creditors, the
Debtor was given until Oct. 19, 2011, to file a second amended
plan and disclosure statement. The Debtor's failure to comply
with this deadline further evidences the lack of a sincere
intention to reorganize and the abuse of the bankruptcy process."
About Shoppes of Lakeside
Neptune Beach, Florida-based Shoppes of Lakeside, Inc., holds
title to and generates income from residential and commercial
buildings and unimproved land in Duval County. The Debtor owns 45
commercial properties and 10 residential properties. The Debtor
filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case
No. 10-05199) on June 15, 2010. Taylor J. King, Esq., at the Law
Offices of Mickler & Mickler, in Jacksonville, Fla., represents
the Debtor as counsel. The Debtor disclosed $39.9 million in
assets and $37.7 million in liabilities.
SMF ENERGY: Hires Bayshore Partners as Investment Banker
--------------------------------------------------------
SMF Energy Corporation and three of its subsidiaries and
affiliates ask permission from the U.S. Bankruptcy Court to employ
Bayshore Partners, LLC, as investment banker.
The Debtors also ask the Court to approve Bayshore's proposed fee
structure:
(a) Initial Fee: The Debtors will pay Bayshore an initial fee
of $50,000; plus
(b) Transaction Fee: A nonrefundable cash fee deemed earned
upon the closing of a Transaction, and payable
immediately and directly from the proceeds of such
Transaction or from the Debtors, as a necessary and
reasonable cost of such Transaction, equal to 17.5% of
the Consideration in excess of the Stalking Horse Bid.
The firm attests it is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
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.
SMF sought bankruptcy protection after Wells Fargo Bank, N.A. shut
off access to a revolving credit loan and declared a default. The
bank is owed $11.2 million, including $8 million on a revolving
credit secured by all assets.
On March 22, 2012, the Company appointed Soneet Kapila of Kapila &
Company, Ft. Lauderdale, Florida, as its Chief Restructuring
Officer.
Judge Raymond B. Ray oversees the case. Lawyers at Genovese
Joblove & Battista, P.A., serves as the Debtors' counsel. Trustee
Services Inc. serves as claims agent. The petition was signed by
Soneet R. Kapila, the CRO.
Steven R. Turner, the Assistant U.S. Trustee 21, appointed three
members to the Official Committee of Unsecured Creditors.
SMF ENERGY: Gets Interim Approval to Employ Kapila & Company
------------------------------------------------------------
SMF Energy Corporation and three of its subsidiaries and
affiliates sought and obtained approval to employ Kapila & Company
as restructuring advisors on an interim basis on the terms set
forth in the Engagement Letter entered into March 20, 2012; and
designate Soneet R. Kapila as Chief Restructuring Officer.
Kapila & Company professionals working on the case will be paid at
these hourly rates:
Soneet R. Kapila $500
Melissa Davis $350
Joseph Gillis $270
Adam Jackson $230
In addition, the standard hourly rate for other Kapila & Company
accounting and consulting personnel to support the CRO in carrying
out the services needed to manage the Debtors' cases range are
between $100 and $400 per hour.
Kapila & Company attests that the firm is a "disinterested person"
as the term is defined in Section 101(14) of the Bankruptcy Code.
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.
SMF sought bankruptcy protection after Wells Fargo Bank, N.A. shut
off access to a revolving credit loan and declared a default. The
bank is owed $11.2 million, including $8 million on a revolving
credit secured by all assets.
On March 22, 2012, the Company appointed Soneet Kapila of Kapila &
Company, Ft. Lauderdale, Florida, as its Chief Restructuring
Officer.
Judge Raymond B. Ray oversees the case. Lawyers at Genovese
Joblove & Battista, P.A., serves as the Debtors' counsel. Trustee
Services Inc. serves as claims agent. The petition was signed by
Soneet R. Kapila, the CRO.
Steven R. Turner, the Assistant U.S. Trustee 21, appointed three
members to the Official Committee of Unsecured Creditors.
SMF ENERGY: Court OKs Trustee Services Inc. as Claims Agent
-----------------------------------------------------------
SMF Energy Corporation and its debtor-affiliates expect that there
will be well over 7,000 parties who will require notice of various
deadlines and key events in their bankruptcy case. Moreover, it
is expected that there will be a multitude of proofs of claim
filed that will require management. The sheer number of creditors
makes it impracticable for the Clerk's Office to undertake such
tasks.
In this regard, the Debtors sought and obtained permission from
the Bankruptcy Court to employ Trustee Services, Inc., as notice,
claims and balloting agent. The Debtors believe that the
engagement of TSI will expedite the service of papers, streamline
the claims administration process, and permit the Debtors to focus
on its reorganization efforts.
Prior to the case, the Debtors paid a $25,000 retainer to TSI.
Kenneth A. Welt, President of Trustee Services, Inc., attests that
TSI (a) neither holds nor represents any interest materially
adverse to the Debtors or the Debtors' estates on matters for
which it is to be retained; (b) has no prior material connection
with the Debtors, its creditors or any other party in interest;
and (c) is a "disinterested person" as such term is defined in
section 101(14), as modified in section 1107(b), of the Bankruptcy
Code.
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.
SMF sought bankruptcy protection after Wells Fargo Bank, N.A. shut
off access to a revolving credit loan and declared a default. The
bank is owed $11.2 million, including $8 million on a revolving
credit secured by all assets.
On March 22, 2012, the Company appointed Soneet Kapila of Kapila &
Company, Ft. Lauderdale, Florida, as its Chief Restructuring
Officer.
Judge Raymond B. Ray oversees the case. Lawyers at Genovese
Joblove & Battista, P.A., serves as the Debtors' counsel. Trustee
Services Inc. serves as claims agent. The petition was signed by
Soneet R. Kapila, the CRO.
Steven R. Turner, the Assistant U.S. Trustee 21, appointed three
members to the Official Committee of Unsecured Creditors.
SOUTH HARBOUR: Case Summary & 3 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: South Harbour Station, LLC
5001 O. Quinn Boulevard, Unit H
Southport, NC 28461
Bankruptcy Case No.: 12-03832
Chapter 11 Petition Date: May 21, 2012
Court: U.S. 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 three largest unsecured
creditors filed with the petition is available for free at:
http://bankrupt.com/misc/nceb12-03832.pdf
The petition was signed by Edwin Burnett, member/manager.
SOUTHERN OAKS: Employs CB Richard Ellis as Real Estate Broker
-------------------------------------------------------------
The Bankruptcy Court authorized Southern Oaks of Oklahoma, LLC, to
employ William T. Forrest of CB Richard Ellis Oklahoma as an
exclusive real estate broker.
The Debtor owns a 100-unit apartment complex in Pryor, Okla.,
which is managed by principals of the Debtor and on-site
employees. The Debtor needs real estate brokerage assistance and
determined that it would be beneficial to the Debtor, the estate,
secured and unsecured creditors to engage a real estate broker to
advertise, market and sell Prairie Village Apartments.
The Debtor has agreed to pay Mr. William T. Forrest and CB Richard
Ellis Oklahoma on a percentage fee based equal to 5% on the sales
price the property sold and closed pursuant to his listing and
efforts, to be split with a cooperating broker.
To the best of the Debtor's knowledge, CB Richard Ellis Oklahoma
is a "disinterested person," as that term is defined in Section
101(14) of the Bankruptcy Code.
About Southern Oaks
Southern Oaks of Oklahoma, LLC, filed for Chapter 11 bankruptcy
(Bankr. W.D. Okla. Case No. 12-10356) on Jan. 31, 2012. Judge
Niles L. Jackson presides over the case. Ruston C. Welch, Esq.,
at Welch Law Firm P.C., serves as the Debtor's counsel. It
scheduled $14,788,414 in assets and $15,352,022 in liabilities.
The petition was signed by Stacy Murry, manager of MBR.
Affiliates that filed separate Chapter 11 petitions are
Charlemagne of Oklahoma, LLC (Bankr. W.D. Okla. Case No. 10-13382)
on July 2, 2010; and Brookshire Place, LLC (Bankr. W.D. Okla. Case
No. 11-10717) on Feb. 23, 2011.
Southern Oaks owns a 126-unit apartment complex in south Oklahoma
City, 115 single family residences, 10 residential duplexes and 4
commercial properties in the Oklahoma City Metro area and a 100
unit apartment complex in Pryor, Oklahoma. Southern Oaks operates
the non-apartment Properties by and through an affiliate property
management company, Houses For Rent of OKC LLC, who advertises,
leases, collects rents, pays expenses, provides equipment, labor
and materials for maintenance, repairs and make ready services.
On Jan. 12 and 27, 2012, the Debtor's ownership and operation of
the Properties was consolidated by the merger of various affiliate
entities with the Debtor being the surviving entity. Those
entities are Southern Oaks Of Oklahoma, LLC; Quail 12, LLC; Quail
13, LLC; 1609 N.W. 47th, LLC; 2233 S.W. 29th, LLC; 400 S.W. 28th,
LLC; South Robinson, LLC; 9 on S.E. 27th, LLC; Southside 10, LLC;
QCB 08, LLC; and Prairie Village of Oklahoma, LLC.
SP NEWSPRINT: Seeks to Hold Former Supplier in Contempt of Stay
---------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that SP Newsprint Holdings LLC began proceedings to hold a
former supplier, Pulper Mining LLC, in contempt of court for
violation of the automatic stay. Pulper was a contractor helping
SP remove contaminants from recycled pulp used in making new
newsprint. The contract with Pulper was terminated by the
bankruptcy court in Delaware when SP found another supplier to
provide the services more economically.
According to the report, in papers filed this week, SP contends
Pulper violated the automatic stay, a prohibition against suing a
bankrupt company except in bankruptcy court. Pulper's suit, in a
state court in Georgia, seeks $5 million in damages from three SP
officers and the replacement contractor. SP argues that the suit
is an evasion of the automatic stay for which Pulper should be
held in contempt and required to reimburse the reorganizing
company for its costs and professional fees.
A hearing in bankruptcy court was set May 23 for a temporary
injunction to halt Pulper's lawsuit immediately.
About SP Newsprint
Greenwich, Conn.-based SP Newsprint Holdings LLC -- aka Bulldog
Acquisition I LLC, Bulldog Acquisition II LLC, Publishers Papers,
Southeastern Paper Recycling and SP Newsprint Merger LLC -- and
three affiliates, SP Newsprint Co. LLC, SP Recycling Corporation
and SEP Technologies L.L.C, filed for Chapter 11 bankruptcy
(Bankr. D. Del. Lead Case No. 11-13649) on Nov. 15, 2011.
SP Newsprint Holdings LLC is a newsprint company controlled by
polo-playing mogul Peter Brant. It is one of the largest
producers of newsprint in North America. SP Recycling
Corporation, a Georgia corporation and the Debtors' other
operating company, was established in 1980 as a means for SP to
secure a ready supply of recycled fiber, a key raw material for
its newsprint.
SP Newsprint is the second Brant-owned newsprint company to tumble
into bankruptcy proceedings in recent years. Current and former
affiliated entities are Bear Island Paper Company, L.L.C., Brant
Industries, Inc., F.F. Soucy, Inc., Soucy Partners Newsprint,
Inc., White Birch Paper Company.
Judge Christopher S. Sontchi presides over the case. Joel H.
Levitin, Esq., Maya Peleg, Esq., and Richard A. Stieglitz Jr.,
Esq., at Cahill Gordon & Reindel LLP serve as the Debtors' lead
counsel. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at
Richards, Layton & Finger, P.A., serve as the Debtors' Delaware
counsel. AlixPartners LLP serves as the Debtors' financial
advisors and The Garden City Group Inc. serves as the Debtors'
claims and noticing agent. SP Newsprint Co., LLC, disclosed
$318 million in assets and $323 million in liabilities as of the
Chapter 11 filing. The petitions were signed by Edward D.
Sherrick, executive vice president and chief financial officer.
The Official Committee of Unsecured Creditors is represented by
Lowenstein Sandler PC. Ashby & Geddes, P.A., serves as its
Delaware counsel, and BDO Consulting serves as its financial
advisor.
SP NEWSPRINT: Panel Wants to Increase Fixed Fee of BDO Consulting
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
cases of SP Newsprint Holdings LLC, et al., asks the U.S.
Bankruptcy Court for the District of Delaware for permission to
modify the terms of retention of BDO Consulting, a division of BDO
USA, LLP.
The modification will reflect the increased amount allocated to
BDO, the Committee's financial advisor, in the Debtors DIP budget
so that it equals the amount allocated in the prior DIP budgets.
BDO's prior monthly fixed fee included (i) a $75,000 per month
fixed fee for the first three month of engagement; (ii) a $50,000
per month fixed fee for each month thereafter, plus (iii) the
reimbursement of actual and necessary expenses.
Subject to Court's approval, the Committee requests that the
monthly fixed fee be modified as:
-- BDO's flat fee for March 2012 through the conclusion of the
Chapter 11 cases is increased from $50,000 to $83,000, which
until the recent modification, did not exceed the monthly
amount budgeted by the Debtors for the Committee's financial
advisor; and
-- BDO's monthly flat fee for December 2011, January 2012, and
February 2012, is increased retroactively by $88,000 per
month, once again, consistent with the Debtors' budgeted
amount prior to the recent modification.
About SP Newsprint
Greenwich, Conn.-based SP Newsprint Holdings LLC -- aka Bulldog
Acquisition I LLC, Bulldog Acquisition II LLC, Publishers Papers,
Southeastern Paper Recycling and SP Newsprint Merger LLC -- and
three affiliates, SP Newsprint Co. LLC, SP Recycling Corporation
and SEP Technologies L.L.C, filed for Chapter 11 bankruptcy
(Bankr. D. Del. Lead Case No. 11-13649) on Nov. 15, 2011.
SP Newsprint Holdings LLC is a newsprint company controlled by
polo-playing mogul Peter Brant. It is one of the largest
producers of newsprint in North America. SP Recycling
Corporation, a Georgia corporation and the Debtors' other
operating company, was established in 1980 as a means for SP to
secure a ready supply of recycled fiber, a key raw material for
its newsprint.
SP Newsprint is the second Brant-owned newsprint company to tumble
into bankruptcy proceedings in recent years. Current and former
affiliated entities are Bear Island Paper Company, L.L.C., Brant
Industries, Inc., F.F. Soucy, Inc., Soucy Partners Newsprint,
Inc., White Birch Paper Company.
SP Newsprint Co., LLC, disclosed $318 million in assets and $323
million in liabilities as of the Chapter 11 filing.
Judge Christopher S. Sontchi presides over the case.
Joel H. Levitin, Esq., Maya Peleg, Esq., and Richard A. Stieglitz
Jr., Esq. at Cahill Gordon & Reindel LLP serve as the Debtors'
lead counsel. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at
Richards, Layton & Finger, P.A., serve as the Debtors' Delaware
counsel. AlixPartners LLP serves as the Debtors' financial
advisors and The Garden City Group Inc. serves as the Debtors'
claims and noticing agent.
The Official Committee of Unsecured Creditors is represented by
Lowenstein Sandler PC. Ashby & Geddes, P.A., serves as its
Delaware counsel, and BDO Consulting serves as its financial
advisor.
SPECIALTY PRODUCTS: Panel Taps Motley Rice as Conflicts Counsel
---------------------------------------------------------------
The Hon. Judith K. Fitzgerald of the U.S. Bankruptcy Court for the
District of Delaware authorized the Official Committee of
Unsecured Creditors in the Chapter 11 cases of Specialty Products
Holding Corp., et al., to retain Motley Rice, LLC as conflicts
counsel regarding the investigation of the role of
PricewaterhouseCoopers LLP in certain prepetition transactions
involving the Debtors and other parties.
Motley Rice will be compensated in accordance with the procedures
set forth in the application, however, any such compensation will
be capped at $100,000.
To the best of the Committee's knowledge, Motley Rice is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Specialty Products
Cleveland, Ohio-based Specialty Products Holdings Corp., aka RPM,
Inc., is a wholly owned subsidiary of RPM International Inc. The
Company is the holding company parent of Bondex International,
Inc., and the direct or indirect parent of certain additional
domestic and foreign subsidiaries. The Company claims to be a
leading manufacturer, distributor and seller of various specialty
chemical product lines, including exterior insulating finishing
systems, powder coatings, fluorescent colorants and pigments,
cleaning and protection products, fuel additives, wood treatments
and coatings and sealants, in both the industrial and consumer
markets.
The Company filed for Chapter 11 bankruptcy protection on May 31,
2010 (Bankr. D. Del. Case No. 10-11780). Gregory M. Gordon, Esq.,
Dan B. Prieto, Esq., and Robert J. Jud, Esq., at Jones Day, serve
as bankruptcy counsel. Daniel J. DeFranceschi, Esq., and Zachary
I. Shapiro, Esq., at Richards Layton & Finger, serve as
co-counsel. Logan and Company is the Company's claims and notice
agent.
The Company estimated its assets and debts at $100,000,001 to
$500,000,000.
The Company's affiliate, Bondex International, Inc., filed a
separate Chapter 11 petition on May 31, 2010 (Case No. 10-11779),
estimating its assets and debts at $100,000,001 to $500,000,000.
SPECIALTY PRODUCTS: Supports FCR's Plea to Retain Resolutions, LLC
------------------------------------------------------------------
Specialty Products Holding Corp., et al., stated that it has no
objection to Eric D. Green, the court-appointed Legal
Representative for Future Asbestos-Related Claimants' application
for order authorizing the FCR to retain Resolutions, LLC as
consultants.
According to the Debtors, it contacted counsel for the FCR to
discuss the application because (i) little detail was provided
regarding the types or scope of services to be provided by
Resolutions, LLC and (ii) the introduction of an additional
service provider could result in duplication of effort.
The FCR counsel indicated that the FCR expected the services to be
relatively limited and that no duplication would occur because it
is anticipated that Resolutions, LLC would take over certain tasks
that FCR counsel is providing. Moreover, FCR counsel stated that
the retention of Resolutions, LLC would, in fact, conserve costs
and benefit the estate because Resolutions, LLC's rates are lower
than the hourly rates of FCR counsel.
As reported in the Troubled Company Reporter on May 8, 2012, the
firm will assist the FCR with the execution of its statutory
duties.
The analyst who will assist the FCR is Michael Robertson.
Mr. Robertson's standard hourly rate is $175. The executive
assistant who will assist the FCR is Cathy Kern. Ms. Kern's
hourly rate is $60.
Mr. Robertson will provide assistance to the FCR with alternative
dispute resolution matters and with analyzing and synthesizing the
due diligence and other information provided in the Chapter 11
cases.
To the best of the FCR's knowledge, the firm does not hold or
represent any interest adverse to the Debtors in the matters for
which the firm is to be employed.
The FCR set a hearing on June 18, 2012, at 9:00 a.m. (ET).
Objections, if any, are due May 7, at 4:00 p.m. (ET).
About Specialty Products
Cleveland, Ohio-based Specialty Products Holdings Corp., aka RPM,
Inc., is a wholly owned subsidiary of RPM International Inc. The
Company is the holding company parent of Bondex International,
Inc., and the direct or indirect parent of certain additional
domestic and foreign subsidiaries. The Company claims to be a
leading manufacturer, distributor and seller of various specialty
chemical product lines, including exterior insulating finishing
systems, powder coatings, fluorescent colorants and pigments,
cleaning and protection products, fuel additives, wood treatments
and coatings and sealants, in both the industrial and consumer
markets.
The Company filed for Chapter 11 bankruptcy protection on May 31,
2010 (Bankr. D. Del. Case No. 10-11780). Gregory M. Gordon, Esq.,
Dan B. Prieto, Esq., and Robert J. Jud, Esq., at Jones Day, serve
as bankruptcy counsel. Daniel J. DeFranceschi, Esq., and Zachary
I. Shapiro, Esq., at Richards Layton & Finger, serve as
co-counsel. Logan and Company is the Company's claims and notice
agent.
The Company estimated its assets and debts at $100,000,001 to
$500,000,000.
The Company's affiliate, Bondex International, Inc., filed a
separate Chapter 11 petition on May 31, 2010 (Case No. 10-11779),
estimating its assets and debts at $100,000,001 to $500,000,000.
STATE FAIR OF VIRGINIA: Sells Asset to Universal Fair for $5.67MM
-----------------------------------------------------------------
Louis Llovio at Richmond Times-Dispatch reports the State Fair of
Virginia will be held in September now that the property was sold
at auction on May 22, 2012, for $5.67 million to Universal Fairs
LLC.
According to the report, Universal Fairs said it plans to operate
the state fair at the Meadow Event Park in Caroline County in a
10-day run starting Sept. 28. The company paid $5.35 million for
the 331 acres of the Meadow Event Park as well as the State Fair
of Virginia's trademark, name and web presence. With assorted fees
and commissions, the price topped $5.67 million.
The report notes Motley's Auction & Realty Group conducted the
auction, which was held at the Meadow Event Park. The Meadow
Event Park in Caroline County was sold after SFVA Inc., the
nonprofit that put on the annual fair, defaulted last year on
about $75 million in loans. SFVA filed for Chapter 11 bankruptcy
reorganization in December, but converted the case to a Chapter 7
liquidation in March.
The report relates lawyers for the bankruptcy trustee and the
group of lenders reached an agreement that allows for the entire
fair's assets to be sold together rather than piecemeal. The
agreement still must be approved by the bankruptcy court. A
hearing is scheduled for May 23, 2012.
About State Fair of Virginia
State Fair of Virginia Inc. -- http://www.statefair.com/-- owns
and operates a state fairgrounds facility known as the "The Meadow
Event Park" located in Doswell, Caroline County, Virginia. SFVA
filed for Chapter 11 bankruptcy (Bank. E.D. Va. Case No. 11-37588)
on Dec. 1, 2011. Jonathan L. Hauser, Esq., at Troutman Sanders
LLP, served as the Debtor's counsel.
The Debtor estimated assets of $10 million to $50 million and
estimated debts of $50 million to $100 million. Curry A. Roberts,
as president, signed the petition.
The U.S. Trustee for Region 4 appointed five unsecured creditors
to serve on the Official Committee of Unsecured Creditors of State
Fair of Virginia Inc.
At the onset of the case, SFVA officials said they hope to emerge
on a better financial footing and to do so within 60 days to 90
days.
In April 2012, the U.S. Bankruptcy Court converted the Chapter 11
case to one under Chapter 7 of the Bankruptcy Code.
STERLING SHOES: Closes Sale of 69 Retail Locations to Town Shoes
----------------------------------------------------------------
Sterling Shoes Inc. disclosed that its wholly-owned subsidiary,
Sterling Shoes GP Inc., the general partner of Sterling Shoes
Limited Partnership, and Sterling LP have successfully completed
the sale of the majority of the assets of Sterling LP including 69
of Sterling's retail locations operating under the Sterling Shoes,
Shoe Warehouse and Freedman banners to Town Shoes Limited for a
purchase price of approximately $17.5 million, subject to certain
post-closing adjustments. The Transaction was completed pursuant
to a purchase agreement dated as of April 16, 2012 among Sterling
GP, Sterling LP, Town and Alvarez Marsal Canada Inc., in its
capacity as the court appointed monitor pursuant to Sterling's
proceedings under the Companies' Creditors Arrangement Act.
Pursuant to the Transaction, Sterling sold to Town its assets in
respect of the businesses carried out by Sterling at certain
premises leased by Sterling including: the related goodwill and
intangible assets, inventory, contracts, intellectual property
rights, pre-paid amounts and receivables.
"We are pleased to have completed this transaction with Town
Shoes. This transaction presents the best possible outcome for the
business," said Dave Alves, President and CEO of Sterling Shoes
LP. "By leveraging the core strengths of the unified organizations
we create significant opportunities for the business, employees
and ultimately the customer. As a collective portfolio of
Freedman Shoes, Shoe Warehouse, Sterling Shoes, The Shoe Company,
and Town Shoes, we are excited to be a part of the largest branded
footwear retailer in Canada."
Alan Simpson, CEO of Town Shoes said, "We are very excited to
welcome Sterling to the Town Shoes family. Combining the
operations of Town Shoes and Sterling will increase our position
as the #1 branded footwear retailer in Canada. Together we will
be able to deliver more value to our customers, enhance our
relationship with our suppliers, and increase opportunities for
advancement for our staff."
About Sterling Shoes
Sterling Shoes is headquartered in Vancouver, B.C. and is a
leading independent footwear retailer offering a broad selection
of private label and brand name shoes and accessories. Founded in
1987, Sterling Shoes LP operates over 100 stores across Canada.
In October 2011, Sterling Shoes Inc. Sterling Shoes GP Inc.
(general partner of Sterling Shoes Limited Partnership) sought
protection from the Supreme Court of British Columbia under the
Companies' Creditors Arrangement Act (Canada), R.S.C. 1985, c. C-
36, as amended.
Alvarez & Marsal Canada Inc. has been appointed Monitor pursuant
to such orders.
SUNRISE REAL ESTATE: Incurs $1.05MM Net Loss in First Quarter
-------------------------------------------------------------
Sunrise Real Estate Group, Inc., filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss of US$1.05 million on US$1.71 million of net
revenues for the three months ended March 31, 2012, compared with
a net loss of US$492,303 on US$2.60 million of net revenues for
the same period during the prior year.
The Company reported a net loss of US$1.22 million in 2011,
compared with a net loss of US$25,487 in 2010.
The Company's balance sheet at March 31, 2012, showed US$33.19
million in total assets, US$25.87 million in total liabilities and
US$7.32 million in total shareholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/5saKvr
About Sunrise Real
Headquartered in Shanghai, the People's Republic of China, Sunrise
Real Estate Group, Inc. was initially incorporated in Texas on
Oct. 10, 1996, under the name of Parallax Entertainment, Inc.
On Dec. 12, 2003, Parallax changed its name to Sunrise Real
Estate Development Group, Inc. On April 25, 2006, Sunrise Estate
Development Group, Inc. filed Articles of Amendment with the Texas
Secretary of State, changing the name of Sunrise Real Estate
Development Group, Inc. to Sunrise Real Estate Group, Inc.,
effective from May 23, 2006.
The Company and its subsidiaries are engaged in the property
brokerage services, real estate marketing services, property
leasing services and property management services in China.
For 2011, Kenne Ruan, CPA, P.C., in Woodbridge. CT, USA, noted
that the Company has significant accumulated losses from
operations and has a net capital deficiency that raise substantial
doubt about its ability to continue as a going concern.
TELKONET INC: Incurs $729,000 Net Loss in First Quarter
-------------------------------------------------------
Telkonet, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $728,824 on $1.92 million of total net revenues for the three
months ended March 31, 2012, compared with net income of $926,292
on $2.48 million of total net revenues for the same period during
the prior year.
The Company reported a net loss of $1.90 million in 2011,
compared with a net loss of $2.17 million in 2010.
The Company's balance sheet at March 31, 2012, showed $12.68
million in total assets, $4.76 million in total liabilities, $2.55
million in total redeemable preferred stock, and $5.36 million in
total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/FCvjSJ
About Telkonet
Milwaukee, Wisconsin-based Telkonet, Inc., is a clean technology
company that develops and manufactures proprietary energy
efficiency and smart grid networking technology.
Following the 2011 results, Baker Tilly Virchow Krause, LLP, in
Milwaukee, Wisconsin, noted that the Company continues to incur
significant operating losses, has an accumulated deficit of
$118.34 million and has a working capital deficiency of $775,000
that raise substantial doubt about the Company's ability to
continue as a going concern.
THERMOENERGY CORP: Incurs $1.5 Million Net Loss in Q1
-----------------------------------------------------
ThermoEnergy Corporation filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss of $1.54 million on $1.68 million of revenue for the
three months ended March 31, 2012, compared with a net loss of
$7.33 million on $948,000 of revenue for the same period during
the prior year.
The Company reported a net loss of $17.38 million in 2011,
compared with a net loss of $14.85 million during the prior year.
The Company's balance sheet at March 31, 2012, showed $5.26
million in total assets, $10.66 million in total liabilities, and
a $5.39 million total stockholders' deficiency.
A copy of the Form 10-Q is available for free at:
http://is.gd/GZDMtK
About ThermoEnergy Corporation
Little Rock, Ark.-based ThermoEnergy Corporation is a clean
technologies company engaged in the worldwide development of
advanced municipal and industrial wastewater treatment systems and
carbon reducing clean energy technologies.
After auditing the 2011 results, Grant Thornton LLP, in Boston,
Massachusetts, expressed substantial doubt about the Company's
ability to continue as a going concern. The independent auditors
noted that the Company incurred a net loss for the year ended Dec.
31, 2011, and, as of that date, the Company's current liabilities
exceeded its current assets by $3,387,000 and its total
liabilities exceeded its total assets by $4,603,000.
THERMOENERGY CORP: Joseph Bartlett Named to Board of Directors
--------------------------------------------------------------
Joseph P. Bartlett was elected as a director to fill the vacancy
on ThermoEnergy Corporation's Board of Directors created by the
death of David Anthony to complete a term expiring on the date of
the Company's 2012 annual meeting of stockholders. Mr. Bartlett
will serve as a member of the Audit Committee of our Board of
Directors. In connection with his election to our Board of
Directors, Mr. Bartlett was also elected as a director of our
subsidiary, CASTion Corporation.
Mr. Bartlett was designated for election to the Company's Board of
Directors by The Quercus Trust under to a Voting Agreement, dated
as of Nov. 19, 2009, among The Quercus Trust; Focus Fund L.P.;
Empire Capital Partners, LP, and certain of its affiliates; and
Robert S. Trump pursuant to which the Investors agreed to vote all
of their shares of the Company's Series B Convertible Preferred
Stock for the election as directors of three persons designated by
The Quercus Trust and of one person designated by Mr. Trump.
Pursuant to the Company's 2008 Incentive Stock Plan, Mr. Bartlett,
as a non-employee director, was automatically granted an option to
purchase 30,000 shares of the Company's Common Stock at an
exercise price of $0.15 per share (the closing price of our Common
Stock in the over-the-counter market on May 14, 2012, the date
immediately preceding his election). This option vests and
becomes exercisable on the date of the Company's 2012 Annual
Meeting of Stockholders and has a term of ten years.
Mr. Bartlett is counsel to The Quercus Trust and has practiced
corporate and securities law since 1985. From September 2004
until August 2008 he was a partner at Greenberg Glusker LLP in Los
Angeles, California, and from September 2000 until September 2004
he was a partner at Spolin Silverman Cohen and Bartlett LLP. Mr.
Bartlett graduated, magna cum laude, from the University of
California, Hastings College of Law in 1985, and received an AB in
English literature from the University of California at Berkeley
in 1980. Mr. Bartlett is 54 years old. He brings to our Board of
Directors expertise in corporate finance, corporate governance and
the oversight of smaller reporting companies. Mr. Bartlett
previously served as a member of our Board of Directors, from
Oct. 15, 2009, until Dec. 28, 2009.
About ThermoEnergy Corporation
Little Rock, Ark.-based ThermoEnergy Corporation is a clean
technologies company engaged in the worldwide development of
advanced municipal and industrial wastewater treatment systems and
carbon reducing clean energy technologies.
After auditing the 2011 results, Grant Thornton LLP, in Boston,
Massachusetts, expressed substantial doubt about the Company's
ability to continue as a going concern. The independent auditors
noted that the Company incurred a net loss for the year ended Dec.
31, 2011, and, as of that date, the Company's current liabilities
exceeded its current assets by $3,387,000 and its total
liabilities exceeded its total assets by $4,603,000.
The Company reported a net loss of $17.38 million in 2011,
compared with a net loss of $14.85 million during the prior year.
The Company's balance sheet at March 31, 2012, showed $5.26
million in total assets, $10.66 million in total liabilities, and
a $5.39 million total stockholders' deficiency.
THOR INDUSTRIES: Taps Gregory Shanks as Real Estate Counsel
-----------------------------------------------------------
Thor Industries, LLC, asks the Bankruptcy Court for authority to
employ Gregory D. Shanks at Shanks & Blackstock as attorney for
special purposes.
The Debtor requires the assistance of special counsel to:
A. prepare a title update on all liens or encumbrances on
real property of the Debtor; and
B. prepare a title search to provide commitment to purchasers
of planned unit development -- PUD -- lots of the Debtor;
and
C. prepare for closing and draft deeds for PUD Sale.
The Debtor proposes to employ the attorney at the hourly rate of
$200 per hour for attorneys and $75 per hour for paralegals.
Special Counsel's fees, which are estimated to be between $200 and
$500 with the total amount of the compensation to be fixed and
determined by the Court upon proper application.
To the best of the Debtor's knowledge, Shanks & Blackstock is a
"disinterested person," as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Thor Industries
Lake City, Tennessee-based Thor Industries, LLC, filed a Chapter
11 petition (Bankr. E.D. Tenn. Case No. 12-50625) in Greenville on
March 30, 2012. The Debtor disclosed $11.97 million in assets and
$10.0 million in liabilities as of the Chapter 11 filing. The
Debtor owns the property in Mountain Lake Marina & RV Resort in
Campground Road, Lake City, Tennessee, worth $11 million and
securing an $8.52 million debt. The Debtor also owns a property
Hickory Bluff Marina, in Camden County, Georgia, worth $875,000
and securing a $375,000 loan.
Judge Marcia Phillips Parsons oversees the case. The petition was
signed by R. Steven Williams, Sr., chief manager.
THOR INDUSTRIES: Can Use TSB Cash Collateral Through May 31
-----------------------------------------------------------
Judge Marcia Phillips Parsons of the U.S. Bankruptcy Court for the
Eastern District of Tennessee authorized Thor Industries, LLC, to
use cash collateral of Tennessee State Bank to fund general
ongoing business operations in accordance with a budget through
May 31, 2012.
To secure the aggregate amount of all Cash Collateral used by the
Debtor, Tennessee State Bank is granted (i) a replacement lien and
security interest on all of the Prepetition Collateral and (ii) an
additional postpetition lien and security interest, junior only to
any valid and presently existing liens or security interests, in
the property of the estate.
Prior to the petition date, Thor Industries entered into a Loan
Agreement with Tennessee State Bank to continue the development of
Mountain Cove Marina, a related RV park, and a related campground
facility, all located in Campbell County, Tennessee, on Norris
Lake. In addition, certain property known as the Hickory Bluff
Marina was pledged as additional Collateral to secure the loan of
Tennessee State Bank and to insure the United States Department of
Agriculture long-term financing of the development project. As of
March 30, 2012, the total indebtedness owing by Thor Industries to
Tennessee State Bank was $8,471,899 while the appraised value of
the Collateral of the development was $11,875,000.
Thor Industries needs the cash collateral for the payment of its
operating budgets and one additional capital expense. In order to
maintain possession of the property and continue in its business
activity in an effort to achieve successful reorganization, Thor
Industries must be permitted to use cash collateral in the
ordinary business operations. Thor Industries currently has no
present alternative borrowing source from which it could secure
additional funding to operate it business.
Without the authority to use cash collateral, Thor Industries said
it will be unable to continue its business operations and propose
a plan of reorganization as contemplated by the Bankruptcy Code.
Thor Industries said it will be seriously and irreparable harmed,
resulting in significant losses to the Debtor's estate and its
creditors.
About Thor Industries
Lake City, Tennessee-based Thor Industries, LLC, filed a Chapter
11 petition (Bankr. E.D. Tenn. Case No. 12-50625) in Greenville on
March 30, 2012. The Debtor disclosed $11.97 million in assets and
$10.0 million in liabilities as of the Chapter 11 filing. The
Debtor owns the property in Mountain Lake Marina & RV Resort in
Campground Road, Lake City, Tennessee, worth $11 million and
securing an $8.52 million debt. The Debtor also owns a property
Hickory Bluff Marina, in Camden County, Georgia, worth $875,000
and securing a $375,000 loan.
Judge Marcia Phillips Parsons oversees the case. The petition was
signed by R. Steven Williams, Sr., chief manager.
TMP CORPORATION: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: TMP Corporation
dba Valero
fdba Niles Gas & Liquor
dba TMP Gas & Foodmart (Los Angeles)
fdba Niles Chevron
dba TMP Gas & Foodmart (Bakersfield)
fdba Freeway Gas
5800 West Manchester Avenue
Los Angeles, CA 90045
Bankruptcy Case No.: 12-27729
Chapter 11 Petition Date: May 21, 2012
Court: U.S. Bankruptcy Court
Central District of California (Los Angeles)
Debtor's Counsel: Vincent A. Gorski, Esq.
THE GORSKI FIRM, APC
4900 California Avenue Tower B, Suite 210
Bakersfield, CA 93309
Tel: (661) 952-9740
Fax: (661) 952-9741
E-mail: vgorski@thegorskifirm.com
Scheduled Assets: $0
Scheduled Liabilities: $4,833,598
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/cacb12-27729.pdf
The petition was signed by Tejwant Singh Bal, president.
TRAINOR GLASS: To Sell Assets in 5 States to Harmon
---------------------------------------------------
Glass Magazine reports Trainor Glass asked the U.S. Bankruptcy
Court for the Northern District of Illinois to authorize the sale
of substantially all of its assets in Florida, North Carolina,
Virginia and Texas to Harmon Inc. The sale hearing is set for May
29, and the objection deadline is May 24.
The report, citing court documents, says Trainor Glass and Harmon
have entered into an Asset Purchase Agreement for the sale and
purchase of substantially all of Trainor's machinery, equipment,
tools and supplies located and used in connection with its former
operations in Farmers Branch, Texas; Chester, Va.; Riviera Beach,
Fla.; and Pineville, N.C.
The report notes Judge Carol A. Doyle approved the sale of certain
Trainor assets in Round Rock, Texas, to Harmon, in April.
About Trainor Glass
Trainor Glass Company, doing business as Trainor Modular Walls,
Trainor Solar, and Trainor Florida, filed for Chapter 11
bankruptcy (Bankr. N.D. Ill. Case No. 12-09458) on March 9, 2012.
Trainor was founded in 1953 by Robert J. Trainor Sr. to pursue a
residential glass business in Chicago, Illinois. Trainor's
business model was focused on quality fabrication, design,
engineering, and installation of glass products and framing
systems in virtually every architectural application, including
(a) new construction, (b) green-building solutions, (c) building
rehabilitation, (d) storefronts and entrances, (e) tenant
interiors, and (f) custom-specialty work.
The Hon. Carol A. Doyle oversees the Chapter 11 case. David A.
Golin, Esq., Michael L. Gesas, Esq., and Kevin H. Morse, Esq., at
Arnstein & Lehr LLP, serve as the Debtor's counsel. High Ridge
Partners, Inc., serves as its financial consultant.
The Debtor scheduled $14,276,745 in assets and $64,840,672 in
liabilities.
A three-member official committee of unsecured creditors has been
appointed in the case. The committee retained Sugar Felsenthal
Grais & Hammer LLP as counsel.
VILLAGE RESORTS: Can Obtain Postpetition Credit from North Capital
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
entered an order:
-- approving the contracts for security, fencing, board up
services and pest control; and
-- authorizing Village Resorts, Inc., et al., to obtain
postpetition credit from North Capital Group, LLC in order
to make payments pursuant to the contracts.
About Village Resorts
Village Resorts, Inc., aka Purple Hotel, filed for Chapter 11
bankruptcy (Bank. N.D. Ill. Case No. 11-50965) on Dec. 21, 2011.
Paul M. Bauch, Kenneth A. Michaels Jr., Carolina Y. Sales and
Laura J. Tepich of Bauch & Michaels, LLC, represent the Debtor in
its restructuring effort. The Debtor disclosed $10 million in
assets and $30.2 million in liabilities as of the Chapter 11
filing. No creditors committee has been appointed in the cases.
VILLAGE RESORTS: Wants Until June 1 to Propose Chapter 11 Plan
--------------------------------------------------------------
Village Resorts, Inc., et al., asked the U.S. Bankruptcy Court for
the Northern District of Illinois to extend until June 1, 2012,
their time to file chapter 11 plan and disclosure statement.
The Debtors say they need more time to complete the sale process
because the results of the May 11 auction of properties (as the
amount of the winning bid and whether the winning bidder is a
secured creditor) will directly affect the contents of the plan.
The Debtors relate that the deadline to object to the sale is
May 18, and the sale hearing is on May 25.
About Village Resorts, Inc.
Village Resorts, Inc., aka Purple Hotel, filed for Chapter 11
bankruptcy (Bank. N.D. Ill. Case No. 11-50965) on Dec. 21, 2011.
Paul M. Bauch, Kenneth A. Michaels Jr., Carolina Y. Sales and
Laura J. Tepich of Bauch & Michaels, LLC, represent the Debtor in
its restructuring effort. The Debtor disclosed $10 million in
assets and $30.2 million in liabilities as of the Chapter 11
filing. No creditors committee has been appointed in the cases.
VILLAGE SQUARE: Involuntary Chapter 11 Case Summary
---------------------------------------------------
Alleged Debtor: Village Square I, LLC
2801 Alaskan Way, Ste. 200
Seattle, WA 98121
Case Number: 12-25236
Affiliate subject to involuntary petition:
Alleged Debtor Case No.
-------------- --------
Vilage Square II, LLC 12-25238
Involuntary Chapter 11 Petition Date: May 21, 2012
Court: Western District of Tennessee (Memphis)
Petitioners' Counsel: Toni Campbell Parker, Esq.
615 Oakleaf Office Lane
P.O. Box 240666
Memphis, TN 38124-0666
Tel: (901) 683-0099
Fax: (866) 489-7938
E-mail: tparker002@att.net
Village Square I, LLC's petitioners:
Petitioner Nature of Claim Claim Amount
---------- --------------- ------------
Cambridge TN, LLC Loan $1,002,703
1875 Keltner Cir.
Memphis, TN 38114
Platinum Management Services $38,343
Services, LLC
4416 18th ., Ste. 150
Brooklyn, NY 11204
Avi Kaufman Loan $62,000
2502 Bayswater Ave.
Far Rockaway, NY 11691
Vilage Square II, LLC's petitioners:
Petitioner Nature of Claim Claim Amount
---------- --------------- ------------
Cambridge TN, LLC Loan $1,002,703
1875 Keltner Cir.
Memphis, TN 38114
Platinum Management Services $38,343
Services, LLC
4416 18th ., Ste. 150
Brooklyn, NY 11204
Avi Kaufman Loan $62,000
2502 Bayswater Ave.
Far Rockaway, NY 11691
WALLA WALLA: Bankruptcy Filing Stays Foreclosure Action
-------------------------------------------------------
Vicki Hillhouse at Walla Wwalla Union-Bulletin reports Walla Walla
Town Center LLC's chapter 11 bankruptcy filing postponed an
auction proceeding that had been scheduled Friday. Creditor Key
Bank initiated the foreclosure proceedings.
Walla Walla Town Center LLC owns the defunct Blue Mountain Mall
property. Walla Walla Town Center LLC filed a bare-bones Chapter
11 petition (Banrk. W.D. Wash. Case No. 12-15229) on May 17, 2012,
in Seattle, Washington. The Debtor said it owns real property
worth $16.5 million and secures a $17.18 million debt.
WAVE2WAVE COMMS: Deals on Adequate Assurance Payment Approved
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey approved
stipulations authorizing Wave2Wave Communications Inc., et al., to
make adequate assurance payments to certain companies for
postpetition utility services.
The Debtor will make these adequate assurance payments to:
1. IDT Domestic Telecom, Inc. -- $19,000;
2. Fairpoint Communications, Inc. -- $4,200; and
3. IPC Network Services -- $7,500
The stipulations also provides for, among other things:
-- in connection with any termination of service, the Debtors,
and not IDT, will solely be responsible for providing any notice
to the Debtors' end users of the cessation of the service;
-- in the event that the Debtors request additional services
from IDT or the parties' current business relationship is
otherwise materially altered IDT have the right to recalculate the
amount of deposit;
-- Fairpoint will be permitted to alter, refuse or discontinue
services to the Debtors without seeking relief from the automatic
stay upon the Debtors' postpetition default in payment for usage;
and
-- IPC's monthly charge for services rendered for existing
lines provided will be $11,412. Any additional lines or services
provided after the date hereof will cause the monthly charge to
inerease. IPC agrees not to alter, refuse or discontinue service
to the Debtors except in accordance to Master Network Service
Agreement.
About Wave2Wave Communications
Wave2Wave Communications Inc., a provider of voice and data
services to businesses, filed for bankruptcy (Bankr. D. N.J. Case
No. 12-13896) on Feb. 17, 2012. Wave2Wave, which estimated up to
$100 million assets and debts, says it sought Chapter 11
protection, after access provider Verizon Communications Inc.
threatened to cut off its service.
Affiliates RNK Inc. and RNK VA LLC also filed petitions.
Wave2Wave was founded in 1999. Judge Donald H. Steckroth presides
over the case. Michael D. Sirota, Esq., at Cole, Schotz, Meisel,
Forman & Leonard, P.A., serves as the Debtors' counsel.
Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C., serves as their
special counsel. Kurtzman Carson Consultants LLC serves claims,
noticing and balloting agent. J.H. Cohn LLP serves as financial
advisor. The petition was signed by Steven Asman, president and
chairman of the Debtors' board.
The U.S. Trustee appointed five members to the official committee
of unsecured creditors. The Committee is represented by Cooley
LLP.
WAVE2WAVE COMMS: Files Schedules of Assets and Liabilities
----------------------------------------------------------
RNK, Inc., a debtor-affiliate of Wave2Wave Communications Inc.,
filed with the U.S. Bankruptcy Court for the District of New
Jersey its schedules of assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $0
B. Personal Property $35,759,871
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $35,156,297
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $11,879,090
----------- -----------
TOTAL $35,759,871 $47,035,387
Debtor-affiliates also filed their respective schedules
disclosing:
Company Assets Liabilities
------- ------ -----------
RNK VA, LLC $0 $35,126,297
Wave2Wave Communications, Inc. $7,189,120 $71,700,230
Full-text copies of the schedules are available for free at:
http://bankrupt.com/misc/WAVE2WAVE_COMMUNICATIONS_rnk_sal.pdf
http://bankrupt.com/misc/WAVE2WAVE_COMMUNICATIONS_rnk_sal_b.pdf
http://bankrupt.com/misc/WAVE2WAVE_COMMUNICATIONS_sal.pdf
About Wave2Wave Communications
Wave2Wave Communications Inc., a provider of voice and data
services to businesses, filed for bankruptcy (Bankr. D. N.J. Case
No. 12-13896) on Feb. 17, 2012. Wave2Wave, which estimated up to
$100 million assets and debts, says it sought Chapter 11
protection, after access provider Verizon Communications Inc.
threatened to cut off its service.
Affiliates RNK Inc. and RNK VA LLC also filed petitions.
Wave2Wave was founded in 1999. Judge Donald H. Steckroth presides
over the case. Michael D. Sirota, Esq., at Cole, Schotz, Meisel,
Forman & Leonard, P.A., serves as the Debtors' counsel.
Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C., serves as their
special counsel. Kurtzman Carson Consultants LLC serves claims,
noticing and balloting agent. J.H. Cohn LLP serves as financial
advisor. The petition was signed by Steven Asman, president and
chairman of the Debtors' board.
The U.S. Trustee appointed five members to the official committee
of unsecured creditors. The Committee is represented by Cooley
LLP.
WAVE2WAVE COMMS: Gets Final Order to Incur $3.5MM DIP Financing
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey
authorized, on a final basis, Wave2Wave Communications Inc., et
al., to:
-- obtain to $3.5 million of secured postpetition financing
from Robert Depalo Special Opportunity Fund, LLC as lender;
-- enter into a consulting agreement with Robert Depalo; and
-- use the cash collateral of their prepetition senior secured
lenders.
The Debtors would use the credit and use cash collateral to enable
their continued operations, administer and preserve the value of
their estates.
As adequate protection from any diminution in value of lender's
collateral, the Debtors will grant their lenders superpriority
administrative expense claim status, subject to certain carve out
expenses.
A full-text copy of the order and the approved budget is available
for free at:
http://bankrupt.com/misc/WAVE2WAVECOMMS_dip_finalorder.pdf
About Wave2Wave Communications
Wave2Wave Communications Inc., a provider of voice and data
services to businesses, filed for bankruptcy (Bankr. D. N.J. Case
No. 12-13896) on Feb. 17, 2012. Wave2Wave, which estimated up to
$100 million assets and debts, says it sought Chapter 11
protection, after access provider Verizon Communications Inc.
threatened to cut off its service.
Affiliates RNK Inc. and RNK VA LLC also filed petitions.
Wave2Wave was founded in 1999. Judge Donald H. Steckroth presides
over the case. Michael D. Sirota, Esq., at Cole, Schotz, Meisel,
Forman & Leonard, P.A., serves as the Debtors' counsel.
Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C., serves as their
special counsel. Kurtzman Carson Consultants LLC serves claims,
noticing and balloting agent. J.H. Cohn LLP serves as financial
advisor. The petition was signed by Steven Asman, president and
chairman of the Debtors' board.
The U.S. Trustee appointed five members to the official committee
of unsecured creditors. The Committee is represented by Cooley
LLP.
WAVE2WAVE COMMS: Needs Additional Capital to Consummate Plan
------------------------------------------------------------
Wave2Wave Communications Inc., et al., submitted to the U.S.
Bankruptcy Court for the District of New Jersey a Disclosure
Statement explaining the proposed Plan of Reorganization.
The Debtors will begin soliciting votes on the Plan following
approval of the adequacy of the information in the Disclosure
Statement.
According to the Disclosure Statement, the Plan was developed
after extensive investigation and analysis of the Debtors' current
cash flow, overhead, expenses, and projected cash flow. The
Debtors believe that the Plan will result in the greatest possible
recovery to creditors.
The Debtors are entering into two viable alternative transactions
under the Plan. Under the first transaction (the Reverse Merger
Transaction or RMT) the Debtors will consummate the Reverse Merger
if the Reverse Merger Conditions are satisfied by the Proposed
Merger Date. If the Reverse Merger Conditions are not satisfied
by the Proposed Merger Date, the Debtors will enter into an
alternative transaction pursuant to which, among other items, the
DIP Loan will be converted into a term loan in exchange for 70% of
the outstanding equity of Reorganized Wave2Wave.
Both the Reverse Merger Transaction and DIP Loan Conversion
require the Debtors to raise additional capital/indebtedness to
consummate either of those transactions for which the Debtors
currently have no commitment to raise additional capital/
indebtedness.
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/WAVE2WAVE_COMMUNICATIONS_ds.pdf
About Wave2Wave Communications
Wave2Wave Communications Inc., a provider of voice and data
services to businesses, filed for bankruptcy (Bankr. D. N.J. Case
No. 12-13896) on Feb. 17, 2012. Wave2Wave, which estimated up to
$100 million assets and debts, says it sought Chapter 11
protection, after access provider Verizon Communications Inc.
threatened to cut off its service.
Affiliates RNK Inc. and RNK VA LLC also filed petitions.
Wave2Wave was founded in 1999. Judge Donald H. Steckroth presides
over the case. Michael D. Sirota, Esq., at Cole, Schotz, Meisel,
Forman & Leonard, P.A., serves as the Debtors' counsel.
Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C., serves as their
special counsel. Kurtzman Carson Consultants LLC serves claims,
noticing and balloting agent. J.H. Cohn LLP serves as financial
advisor. The petition was signed by Steven Asman, president and
chairman of the Debtors' board.
The U.S. Trustee appointed five members to the official committee
of unsecured creditors. The Committee is represented by Cooley
LLP.
WAVE2WAVE COMMS: Can Hire Cole Schotz as Bankruptcy Counsel
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey
authorized Wave2Wave Communications Inc., et al., to employ Cole,
Schotz, Meisel, Forman & Leonard, P.A., as their bankruptcy
counsel.
As reported in the Troubled Company Reporter on March 28, 2012,
Cole Schotz is expected to, among other things:
(a) advise the Debtors of their rights, powers and duties as
debtors-in-possession in continuing to operate and manage
their businesses and assets;
(b) review and object to claims;
(c) advise the Debtors concerning, and assist in the
negotiation and documentation of, debtor-in-possession
financing, debt restructuring and related transactions;
(d) review the nature and validity of agreements relating to
the Debtors' businesses and advise the Debtors in
connection therewith; and
(e) advise the Debtors concerning the actions they might take
to collect and recover property for the benefit of their
estates.
The hourly rates of Cole Schotz's professionals are:
Members $325 - $775
Special Counsel $340 - $500
Associates $210 - $425
Paralegals $160 - $245
Litigation and Support Specialist $100 - $185
In connection with the Chapter 11 filings, Cole Schotz has a
retainer from the Debtors of $238,000 for postpetition
representation.
Prior to the Petition Date, Cole Schotz received $17,862 for
services rendered and disbursements and other charges incurred
during the 90-day period before the Petition Date.
Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman &
Leonard, P.A., attests to the Court that his firm does not hold or
represent any interest adverse to the Debtors, their creditors or
estates and is a disinterested person.
About Wave2Wave Communications
Wave2Wave Communications Inc., a provider of voice and data
services to businesses, filed for bankruptcy (Bankr. D. N.J. Case
No. 12-13896) on Feb. 17, 2012. Wave2Wave, which estimated up to
$100 million assets and debts, says it sought Chapter 11
protection, after access provider Verizon Communications Inc.
threatened to cut off its service.
Affiliates RNK Inc. and RNK VA LLC also filed petitions.
Wave2Wave was founded in 1999. Judge Donald H. Steckroth presides
over the case. Michael D. Sirota, Esq., at Cole, Schotz, Meisel,
Forman & Leonard, P.A., serves as the Debtors' counsel. Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C., serves as their
special counsel. Kurtzman Carson Consultants LLC serves claims,
noticing and balloting agent. J.H. Cohn LLP serves as financial
advisor. The petition was signed by Steven Asman, president and
chairman of the Debtors' board.
The U.S. Trustee appointed five members to the official committee
of unsecured creditors. The Committee is represented by Cooley
LLP.
WEST PENN: S&P Cuts Rating on $737-Mil. Series 2007A Bonds to 'B-'
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term rating to
'B-' from 'B+' on Allegheny County Hospital Development Authority,
Pa.'s $737 million series 2007A bonds, issued for West Penn
Allegheny Health System (WPAHS). The outlook remains developing.
"The downgrade to 'B-' reflects deterioration in WPAHS's overall
2012 finances. Although WPAHS's financial profile suggests that an
even lower rating could be justified, the rating remaining in the
'B' category reflects the increased likelihood, since Standard &
Poor's last review, that the affiliation with Highmark Inc. will
proceed because approval from the Department of Justice and the
Internal Revenue Service has been obtained," said Standard &
Poor's credit analyst Cynthia Keller. "However, ample regulatory
risk remains until approval from the Pennsylvania Department of
Insurance is received. Highmark's financial support of WPAHS, as
outlined under the affiliation agreement, with $200 million of
support expected or already received during fiscals 2011 and 2012,
continues to be a positive rating factor. Maintenance of the
developing outlook reflects the possibility of continued financial
deterioration if the affiliation with Highmark is not approved and
the potential for credit quality improvement if the affiliation
with Highmark is approved," said Ms. Keller.
The downgrade to 'B-' reflects Standard & Poor's assessment of
WPAHS's:
- Significantly escalated operating losses in fiscal 2012
following poor performance in 2011;
- Volume decreases and general turmoil in the Pittsburgh market;
- Relatively weak area demographics; and
- Strained balance sheet with high debt levels, ample capital
needs, substantial pension funding requirements, and weakened
unrestricted cash and investments.
Rating factors that prevent a lower rating at the current time
include:
- All aspects of the potential affiliation with Highmark
including previously received and projected financial support,
potential post-affiliation strategic initiatives, and receipt
of approval for the transaction from two agencies to date; and
- Critical mass of inpatient admissions at the system, despite
volume decreases, with potential growth opportunities from
physician recruitment and Highmark's outpatient development
initiatives in the service area.
"The developing outlook reflects Standard & Poor's opinion that
the rating and outlook could either improve or deteriorate over
the next 12 months. The future direction of this rating depends
largely on whether the affiliation agreement with Highmark is
approved and how quickly the assumed benefits of the arrangement
are realized," S&P said.
"A lower rating is likely if the affiliation is not approved
quickly or if WPAHS's financial results do not improve
substantially as WPAHS's limited cash flow and low unrestricted
cash and investment balances are insufficient to support its
capital needs; however, the system has always funded pension and
debt service at necessary levels," S&P said.
A higher rating could be possible after the final affiliation
agreement is signed, at which time further transfers from Highmark
are secured and the two organizations will be free to implement a
more integrated strategy in the Pittsburgh market.
WPAHS operates five acute-care hospitals at five locations in and
around Pittsburgh.
* Lehman Claims Trading Plunges 80% in April
--------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that fewer claims traded in April than any month since
February 2010, as Lehman Brothers Holdings Inc. made the first
distribution under the Chapter 11 plan approved by the bankruptcy
court in December.
Claims against Lehman surged in March to $5.8 billion in
anticipation of Lehman's distribution. In April, Lehman trades
plunged about 80% to $1.23 billion, according to data compiled
from court records by SecondMarket Inc.
In total, about $1.5 billion in claims against bankrupt companies
changed hands in April, SecondMarket said. In second place was the
liquidating commodity broker MF Global Inc., whose $157.3 million
in traded claims were 13 percent of Lehman's. Claims against AMR
Corp., the parent of American Airlines Inc., and Eastman Kodak Co.
have begun to trade actively, though in numbers amounting to a
fraction of Lehman's. April had 67 AMR trades for $3.2 million in
face amount. The Kodak trades numbered 66 for $6.3 million in
face amount, SecondMarket reported.
In the past year, $36.5 billion of Lehman claims were traded,
followed by the MF Global broker with $495 million in traded
claims.
* Moody's Says Growth in Debt of US States Slowed in 2011
---------------------------------------------------------
Growth in the outstanding debt of US states slowed dramatically in
calendar year 2011 compared to the rapid growth of the prior two
years even as debt service costs rose, says Moody's Investors
Service in a new report.
After 10% and 8% growth in outstanding net tax-supported debt
(NTSD) in 2009 and 2010, NTSD was relatively flat in 2011 with
only 2.5% growth. The combined 2011 NTSD for all 50 states
increased to $510 billion from $497 billion in 2010.
In this year's annual report, "2012 State Debt Medians Report,"
the rating agency presents both the 2011 data and ratios measuring
state NTSD as well as the associated debt service costs and ratios
for the fiscal year.
"States slowed their borrowing in 2011, despite the low interest
rate environment," said Moody's Vice President-Senior Analyst Baye
Larsen, author of the report. "New money issuance was constrained
both by legal debt limitations and anti-debt sentiment that arose
during the recession and the U.S. debt ceiling debate."
Additionally, Larsen explained, many states accelerated their
borrowing calendars in 2010 to participate in the federal Build
America Bonds program, reducing their capital borrowing needs in
2011.
Although overall borrowing in 2011 was lower, measures of state
leverage were mixed. Median NTSD per capita increased by 7% amid
the weakest population growth in the US in more than 70 years,
while NTSD as a percentage of personal income was flat at 2.8%.
NTSD as a percentage of gross state product also remained flat at
2.4%.
"State's total debt service costs increased by 8.6% in 2011 as
repayments began on the substantial amount of debt issued during
the downturn," said Mr. Larsen. "In a favorable trend, total
revenue available for debt service also grew a healthy 8.9% in
fiscal 2011, and the median debt service ratio remained flat at
4.9%."
Growth in state NTSD is expected to remain subdued in 2012, amid
policy and legal constrains to new issuance, and a move in some
high-debt states toward more pay-as-you-go capital funding,
according to Moody's.
"The 2012 growth in NTSD will be comparable or slightly higher
than 2011 levels, but well below the large increases of 2009 and
2010," said Mr. Larsen.
* Geoffrey Frankel Joins Huron Consulting as Managing Director
--------------------------------------------------------------
Huron Consulting Group on May 23 announced that Geoffrey Frankel
has joined the Company as a managing director in the Financial
Consulting segment to provide transactional services to
restructuring and bankruptcy clients.
"Due to the current state of credit markets and ongoing economic
uncertainty, businesses are facing unprecedented financial and
operational challenges," said John DiDonato, managing director and
Financial Consulting segment leader, Huron Consulting Group.
"Geoff's investment banking expertise will provide clients
additional financial and transactional resources to address their
business challenges. We're pleased to welcome him to Huron."
At Huron, Mr. Frankel will concentrate on building an investment
banking/capital markets practice focused on distressed companies
to complement the Company's existing restructuring advisory
services. He has more than 20 years of experience advising
troubled and healthy companies and their creditor and equity-
holder constituencies in mergers and acquisitions, financings,
corporate/bankruptcy reorganizations, debt and equity
restructurings, complex valuations, and litigation support
services. His expertise spans a wide range of industries
including industrial, manufacturing, metals, consumer and building
products, and retail.
Prior to joining Huron, Mr. Frankel served as a managing director
at Harris Williams & Co. where he was the founder and group leader
for the firm's Restructuring Advisory and Distressed M&A practice.
About Huron Consulting Group
Huron Consulting Group -- http://www.huronconsultinggroup.com--
provides services to a wide variety of both financially sound and
distressed organizations, including healthcare organizations,
Fortune 500 companies, leading academic institutions, medium-sized
businesses, and the law firms that represent these various
organizations.
* Recent Small-Dollar & Individual Chapter 11 Filings
-----------------------------------------------------
In re Argent Enterprises, LLC
Bankr. D. Ariz. Case No. 12-10973
Chapter 11 Petition filed May 17, 2012
See http://bankrupt.com/misc/azb12-10973.pdf
represented by: Blake D. Gunn, Esq.
LAW OFFICE OF BLAKE D. GUNN
E-mail: blake.gunn@gunnbankruptcyfirm.com
In re Patrick Rassier
Bankr. D. Ariz. Case No. 12-11037
Chapter 11 Petition filed May 17, 2012
In re Harish Bharadwaj
Bankr. D. Mt. Case No. 12-60785
Chapter 11 Petition filed May 17, 2012
In re Kuzina Hospitality, Inc.
Bankr. D. N.J. Case No. 12-22909
Chapter 11 Petition filed May 17, 2012
See http://bankrupt.com/misc/njb12-22909.pdf
represented by: Dino S. Mantzas, Esq.
LAW OFFICE OF DINO S. MANTZAS
E-mail: dmantzas@aol.com
In re Morang-Kelly Investment, Inc.
dba Farmer's Best Market
Bankr. E.D. Mich. Case No. 12-52379
Chapter 11 Petition filed May 17, 2012
See http://bankrupt.com/misc/mieb12-52379p.pdf
See http://bankrupt.com/misc/mieb12-52379c.pdf
represented by: Scott Kwiatkowski, Esq.
GOLDSTEIN BERSHAD & FRIED PC
E-mail: scott@bk-lawyer.net
In re Anne Arnold
Bankr. E.D.N.C. Case No. 12-03753
Chapter 11 Petition filed May 17, 2012
In re Robert Wade
Bankr. M.D. Fla. Case No. 12-06804
Chapter 11 Petition filed May 17, 2012
In re Arthur Rosenheck
Bankr. M.D. Fla. Case No. 12-07685
Chapter 11 Petition filed May 17, 2012
In re Reaching Your Dream, Inc.
Bankr. N.D. Fla. Case No. 12-30729
Chapter 11 Petition filed May 17, 2012
See http://bankrupt.com/misc/flnb12-30729p.pdf
See http://bankrupt.com/misc/flnb12-30729c.pdf
represented by: Jason Royce Mosley, Esq.
GALLOWAY, JOHNSON, TOMPKINS, ET AL
E-mail: jmosley@gjtbs.com
In re Ristorante Al Teatro, Inc.
Bankr. N.D. Ill. Case No. 12-20204
Chapter 11 Petition filed May 17, 2012
See http://bankrupt.com/misc/ilnb12-20204.pdf
represented by: Joel A. Schechter, Esq.
LAW OFFICES OF JOEL SCHECHTER
E-mail: joelschechter@covad.net
In re Anderson-Shaw Chiropractic, Inc.
Bankr. S.D. Ind. Case No. 12-80578
Chapter 11 Petition filed May 17, 2012
See http://bankrupt.com/misc/insb12-80578.pdf
represented by: Robert D. McMahan, Esq.
MCMAHAN LAW FIRM
E-mail: tiffany@mcmahanlaw.net
In re Al-Flamingo Realty, LLC
Bankr. S.D.N.Y. Case No. 12-12143
Chapter 11 Petition filed May 17, 2012
See http://bankrupt.com/misc/nysb12-12143.pdf
represented by: Joseph A. Altman, Esq.
JOSEPH A. ALTMAN, P.C.
E-mail: altmanesq@aol.com
In re Donald Leonard
Bankr. C.D. Calif. Case No. 12-14670
Chapter 11 Petition filed May 18, 2012
In re Alem Auto Sales, Inc.
Bankr. D. Col. Case No. 12-00376
Chapter 11 Petition filed May 18, 2012
represented by: Clarissa Thomas, Esq.
LAW OFFICE OF C. THOMAS, CH
E-mail: edwardsclarissa@yahoo.com
In re Judy Lee
Bankr. D. Md. Case No. 12-19494
Chapter 11 Petition filed May 18, 2012
In re Bryan Lee
Bankr. D. Md. Case No. 12-19494
Chapter 11 Petition filed May 18, 2012
In re Joseph Italiano
Bankr. D. N.J. Case No. 12-22961
Chapter 11 Petition filed May 18, 2012
In re Gloria Gonzalez
Bankr. D. Nev. Case No. 12-15994
Chapter 11 Petition filed May 18, 2012
In re Linnette Maldonado Nieves
Bankr. D.P.R. Case No. 12-03896
Chapter 11 Petition filed May 18, 2012
In re SIDDHI Hospitality, LLC
Bankr. D. Utah Case No. 12-26502
Chapter 11 Petition filed May 18, 2012
represented by: Tyler T. Todd, Esq.
1LAW
E-mail: tyler@1law.com
In re Alexandrino Vasconcelos
Bankr. E.D. Calif. Case No. 12-91442
Chapter 11 Petition filed May 18, 2012
In re BHCO LLC
Bankr. E.D.N.C. Case No. 12-03797
Chapter 11 Petition filed May 18, 2012
See http://bankrupt.com/misc/nceb12-03797.pdf
Filed as Pro Se
In re Destiny Auto Collision
Bankr. E.D.N.Y. Case No. 12-73246
Chapter 11 Petition filed May 18, 2012
See http://bankrupt.com/misc/nyeb12-73246.pdf
Filed pro se
In re Paul Bogen
Bankr. E.D. Tenn. Case No. 12-32131
Chapter 11 Petition filed May 18, 2012
In re Fanny Haefeli
Bankr. M.D. Fla. Case No. 12-03374
Chapter 11 Petition filed May 18, 2012
In re Encasa Real Estate Sales & Development, LLC
Bankr. N.D. Ala. Case No. 12-40953
Chapter 11 Petition filed May 18, 2012
See http://bankrupt.com/misc/alnb12-40953.pdf
represented by: Harry P. Long, Esq.
THE LAW OFFICE OF HARRY P. LONG, LLC
E-mail: hlonglegal@aol.com
In re Vincent Tang
Bankr. N.D. Calif. Case No. 12-53800
Chapter 11 Petition filed May 18, 2012
In re Fred Farahani
Bankr. N.D. Calif. Case No. 12-53818
Chapter 11 Petition filed May 18, 2012
In re Kel-Jo Enterprises, Inc.
Bankr. S.D. Fla. Case No. 12-22289
Chapter 11 Petition filed May 18, 2012
represented by: Steven H Friedman, Esq.
E-mail: steven@stevenfriedmanlaw.com
In re Martin Spires
Bankr. S.D. Ga. Case No. 12-50360
Chapter 11 Petition filed May 18, 2012
In re Lutan, Inc.
dba Getaway Cafe
Bankr. W.D. Pa. Case No. 12-22669
Chapter 11 Petition filed May 18, 2012
See http://bankrupt.com/misc/pawb12-22669.pdf
represented by: Joan Shinavski, Esq.
MCKAY & ASSOCIATES, P.C.
E-mail: joan@mckaylaw.com
In re Margaret Gurkin
Bankr. W.D. Tenn. Case No. 12-25185
Chapter 11 Petition filed May 18, 2012
In re Portentosa LLC
Bankr. W.D. Wash. Case No. 12-15242
Chapter 11 Petition filed May 17, 2012
Filed pro se
In re Marilyn Ellis
Bankr. D. Nev. Case No. 12-16008
Chapter 11 Petition filed May 20, 2012
In re Bel Aire Land Company, LLC
Bankr. D. Ariz. Case No. 12-11162
Chapter 11 Petition filed May 21, 2012
Filed pro se
In re Santiago Ramos-Coria
aka Santiago Ramos
Maria Magdalena Ramos
aka Maria M. Ramos
aka Maria Figueroa
Bankr. C.D. Calif. Case No. 12-14727
Chapter 11 Petition filed May 21, 2012
In re Bern 2000 LLC
Bankr. C.D. Calif. Case No. 12-27785
Chapter 11 Petition filed May 21, 2012
See http://bankrupt.com/misc/cacb12-27785.pdf
represented by: Robert S. Altagen, Esq.
Law Offices of Robert S. Altagen
E-mail: rsaink@earthlink.net
In re Dino Martin
Bankr. N.D. Calif. Case No. 12-31513
Chapter 11 Petition filed May 21, 2012
In re Michael Ohayon
Bankr. N.D. Calif. Case No. 12-31516
Chapter 11 Petition filed May 21, 2012
In re Ronald Poole
Bankr. N.D. Calif. Case No. 12-44399
Chapter 11 Petition filed May 21, 2012
In re Constance Laub
Bankr. N.D. Calif. Case No. 12-53835
Chapter 11 Petition filed May 21, 2012
In re Gary Ferguson
Bankr. S.D. Fla. Case No. 12-22368
Chapter 11 Petition filed May 21, 2012
In re Randy Conaway
Bankr. N.D.I.L. Case No. 12-20719
Chapter 11 Petition filed May 21, 2012
In re Decisive Media, Inc.
Bankr. D.M.D. Case No. 12-19579
Chapter 11 Petition filed May 21, 2012
See http://bankrupt.com/misc/mdb12-19579.pdf
represented by: Ira C. Wolpert, Esq.
E-mail: icw1937@aol.com
In re Rashmikant Patel
Bankr. W.D.N.Y. Case No. 12-11607
Chapter 11 Petition filed May 21, 2012
In re James Snider
Bankr. W.D. Tenn. Case No. 12-11415
Chapter 11 Petition filed May 21, 2012
In re Michael Orr
Bankr. N.D. Tex. Case No. 12-33231
Chapter 11 Petition filed May 21, 2012
In re PetDiva, LLC
Bankr. E.D.V.A Case No. 12-13253
Chapter 11 Petition filed May 21, 2012
See http://bankrupt.com/misc/vaeb12-13253.pdf
Represented by: Nathan A. Fisher
E-mail: Fbarsad@cs.com
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers"
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors" Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise
Marie Varquez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R.
Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman,
Editors.
Copyright 2012. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $775 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
*** End of Transmission ***