/raid1/www/Hosts/bankrupt/TCR_Public/120618.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, June 18, 2012, Vol. 16, No. 168
Headlines
201 WESTMORELAND: Files Schedules of Assets and Liabilities
ALTA MESA: Moody's Confirms 'B2' Corp. Family Rating
AMBAC FIN'L: Circuit Court OKs AAC Settlement With IRS
AMERICAN ARCHITECTURAL: Files for Chapter 11 in Philadelphia
AMERICAN AIRLINES: Theairlinezone Assesses Network Strategy
ARCAPITA BANK: Committee Retains Cayman Islands Counsel
ARCAPITA BANK: Files Schedules of Assets and Liabilities
ARCAPITA BANK: Can Make $30.4 Million Loan to Lusail Venture
ARCAPITA BANK: Court Says Prior Orders Applicable to Falcon Case
ASPECT SOFTWARE: S&P Keeps 'B' Corp Credit Rating on High Leverage
AWAS AVIATION: S&P Keeps 'BB' Corp. Credit Rating; Outlook Stable
BAKERS FOOTWEAR: Has $30 Million Credit Facility with Crystal
BILLMYPARENTS INC: Has $4MM Financing Agreement with Investors
BLAST ENERGY: Termination Date of Merger Pact Extended to Aug. 1
CAI INTERNATIONAL: S&P Rates Corporate Credit 'BB'; Outlook Stable
CAPITOL CITY: Amends 5 Million Shares Offering Prospectus
CATALYST PAPER: Presents Amended Plan, Proposes June 25 Meeting
CENTRAL PARKING: S&P Keeps 'CCC' CCR on Watch Pending Merger
CENTURYLINK INC: S&P Retains 'BB' Corporate Credit Rating
CERAGENIX CORPORATION: Whistleblower's Malpractice Suit Shut Down
CHENIERE INC: S&P Raises Corporate Credit Rating to 'B+'
CHENIERE PARTNERS: S&P Assigns 'B+' Corporate Credit Rating
CHINA SHENGHUO: Liquidity Woes Raise Going Concern Doubt
CINRAM INTERNATIONAL: Units Will be Delisted Effective July 16
CLEAR CHANNEL: Bank Debt Trades at 22% Off in Secondary Market
CLEARWIRE CORP: Sprint Nextel Owns 57% of Class A Shares
CONTESSA PREMIUM: Claim Buyer Loses Bid for Higher Recovery
CORUS BANKSHARES: Trustee Targets Former Executives Over Demise
CPI CORP: Tom Gallahue to Retire as EVP Operations
DETROIT, MI: Moody's Lowers Rating on GOULT Bonds to 'B3'
DEWEY & LEBOEUF: Agrees to Scrap Pension Plans in Deal With PBGC
DIVERSINET CORP: KPMG Canada Raises Going Concern Doubt
DM 668: Failed Buyer Not Entitled to Bargain Damages
DREIER LLP: Trustee Asks Court to Sanction Cochran Firm
DYNEGY HOLDINGS: Proposes to Reject Houston Office Lease
ENERGYSOLUTIONS INC: S&P Cuts Corporate Credit Rating to 'B'
ENGILITY CORP: Moody's Assigns 'B1' CFR; Outlook Stable
ENGILITY CORP: S&P Gives 'BB-' Corp. Credit Rating; Outlook Stable
FARMERS BANK: Closed; Clayton Bank and Trust Assumes All Deposits
FIFTH & PACIFIC: Moody's Affirms B2 CFR, Rates EUR53MM Notes B2
GENOIL INC: Won't Be Profitable in Next 12 Months
GRUBB & ELLIS: Plan Filing Exclusivity Extended to Sept. 30
HANLEY-WOOD: Bank Debt Trades at 46% Off in Secondary Market
HAWKER BEECHCRAFT: Creditors Committee Retains Advisors
HEALTHWAYS INC: S&P Affirms 'BB-' Counterparty Credit Rating
HERTZ CORPORATION: DBRS Affirms 'BB' Issuer Rating
HOLOGIC INC: S&P Affirms 'BB' Corp. Credit Rating; Off Watch Neg
INERGETICS INC: Deficit, Net Losses Raise Going Concern Doubt
INTERLINE BRANDS: S&P Keeps 'BB' Corp. Credit Rating on Watch Neg
JASMINE AT ORLANDO: Files for Chapter 11 in Miami; Seeks Cash Use
JOHN HAMILTON: Bankruptcy Counsel Disqualified
KIMBERLY MITCHELL: Bankruptcy Counsel Disqualified
KIOWA POWER: S&P Affirms 'BB-' Rating on $73.5-Mil. Secured Bonds
KODI KLIP: Financial Woes Cue Chapter 11 Bankruptcy Filing
LDK SOLAR: Deficit, Covenant Violation Raise Going Concern Doubt
LEE BRICK: Files for Chapter 11 in Wilson, North Carolina
LKQ CORP: S&P Affirms 'BB+' CCR on Sustainable Positive Earnings
LUMBER PRODUCTS: Court OKs Sussman Shank as Chapter 11 Attorneys
LUMBER PRODUCTS: Edward Hostmann Named as Chapter 11 Trustee
LUMBER PRODUCTS: Cushman Approved as Ch.11 Trustee's Consultant
LUMBER PRODUCTS: U.S. Trustee Appoints 5-Member Creditors Panel
MEDICAL EDUCATIONAL: Court Won't Revise March 2012 Order
MGM RESORTS: 10 Directors Elected at Annual Meeting
MODUSLINK GLOBAL: Receives NASDAQ Notification Letter
NAVISTAR INTERNATIONAL: M. Rachesky Discloses 13.6% Equity Stake
MOUNTAIN PROVINCE: Shareholders Approve KPMG as Auditors
NEDAK ETHANOL: Temporarily Halts Production in Nebraska
NORTHSTAR AEROSPACE: Files for Chapter 11 to Pursue Asset Sale
ONCURE HOLDINGS: Moody's Cuts CFR to 'Caa3'; Outlook Negative
PEMCO WORLD: Court Approves Sale to VT Aerospace
PHOENIX SERVICES: S&P Affirms 'B+' Corporate Credit Rating
PINNACLE AIRLINES: Swings to $31.5 Million Net Loss in 2011
PRETIUM PACKAGING: S&P Lowers Corporate Credit Rating to 'B-'
PUTNAM STATE BANK: Closed; Harbor Community Assumes All Deposits
QUALITY DISTRIBUTION: Completes Acquisition of RM Resources
REAL AMERICA: Court Rejects Cash Use, Dismisses Case
REDDY ICE: Suspends Filing of Reports with SEC
RESIDENTIAL CAPITAL: DBRS Downgrades Issuer Rating to 'D'
RG STEEL: Massey Unit Wants to Remove $32MM Suit Over Coal Supply
RG STEEL: PBGC Says No Basis to Shield Parent from Liability
RIVERS PITTSBURGH: S&P Ups Corp. Credit Rating to 'B'; Off Watch
ROSETTA GENOMICS: Closes Sale of 570,755 Ordinary Shares
SABINE PASS: S&P Rates $2.575-Bil. Sr. Secured Term Loan 'BB+'
SADLER CLINIC: Files for Chapter 11 With Liquidating Plan
SAVERS INC: S&P Lowers Corp. Credit Rating to 'B'; Outlook Stable
SECURITY EXCHANGE BANK: Closed; Fidelity Bank Assumes All Deposits
SHERIDAN HEALTHCARE: S&P Rates New $670MM First Lien Credit 'B+'
SOLAR TRUST: New Ownership Claim Clouds Planned Solar Plant Sale
SPRINT NEXTEL: Owns 57% of Clearwire Class A Common Shares
STAR BUFFET: Committee Taps Advisors Late in the Case
STEINWAY MUSICAL: S&P Affirms 'B' Corp. Credit Rating; Off Watch
STERLING SHOES: CCAA Stay Order Extended Until Oct. 15
SUN PRODUCTS: S&P Affirms 'B-' Corp. Credit Rating; Outlook Neg
TIMMINCO LIMITED: Closes Assets Sales; CCAA Stay Extended Sept. 30
TRIBUNE CO: Bank Debt Trades at 34% Off in Secondary Market
TRONOX INC: Witness Says Kerr-McGee Misstated Liabilities
TXU CORP: Bank Debt Trades at 41% Off in Secondary Market
TXU CORP: Bank Debt Trades at 38% Off in Secondary Market
UNIFI INC: S&P Withdraws 'B' Corp. Credit Rating on Request
VAIL RESORTS: Moody's Affirms 'Ba2' CFR/PDR; Outlook Stable
VITRO SAB: Disappointed by US Court's Clarification on Plan Order
WABASH NATIONAL: S&P Assigns 'B+' Corporate Credit Rating
WIDEOPENWEST FINANCE: S&P Hikes Corporate Credit Rating to 'B'
WIRECO WORLDGROUP: Moody's Affirms 'B1' CFR; Outlook Negative
WIRECO WORLDGROUP: S&P Affirms 'B+' Corporate Credit Rating
* Healthcare Reform Ruling Not Positive for Non-Profit Hospitals
* Moody's Downgrades Rating on California TABs to 'Ba1'
* BOND PRICING -- For Week From May 28 to June 1, 2012
*********
201 WESTMORELAND: Files Schedules of Assets and Liabilities
-----------------------------------------------------------
201 Westmoreland Associates, Ltd. filed with the Bankruptcy Court
for the Central District of California its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $8,393,710
B. Personal Property $535
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $1,700,000
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $87,175
----------- -----------
TOTAL $8,394,245 $11,787,175
A full text copy of the company's scheduled of assets and
liabilities is available free at:
http://bankrupt.com/misc/201_WESTMORELAND_sal.pdf
About 201 Westmoreland
201 Westmoreland Associates, Ltd., in the business of real estate
investment, filed a bare-bones Chapter 11 bankruptcy petition
(Bankr. C.D. Calif. Case No. 12-22642) in its hometown in Los
Angeles on April 10, 2012. It expects that funds will be
available for distribution to unsecured creditors. Judge Neil W.
Bason oversees the case. The petition was signed by Manuel Meza,
president of the Debtor's general partner.
ALTA MESA: Moody's Confirms 'B2' Corp. Family Rating
----------------------------------------------------
Moody's Investors Service confirmed Alta Mesa Holdings, LP's (Alta
Mesa) B2 Corporate Family Rating (CFR) and B3 senior unsecured
note rating. Moody's also assigned a SGL-3 Speculative Grade
Liquidity rating reflecting adequate liquidity through mid-2013.
The outlook is stable. This action concludes Moody's rating
review, which commenced on April 2, 2012.
Issuer: ALTA MESA HOLDINGS, LP
Confirmations:
Probability of Default Rating, Confirmed at B2
Corporate Family Rating, Confirmed at B2
US$300M 9.625% Senior Unsecured Regular Bond/Debenture,
Confirmed at B3
Assignments:
Speculative Grade Liquidity Rating, Assigned SGL-3
Outlook Actions:
Outlook, Changed To Stable From Rating Under Review
Ratings Rationale
"High oil prices, technological advances to onshore drilling and
completion methods and Alta Mesa's focused development efforts in
the oil and liquids-rich Weeks Island, Eagle Ford and Oklahoma
regions are expected to improve the company's margins and cash
flows through 2014," commented Sajjad Alam, Moody's analyst.
"However, in achieving higher oil and overall production volumes,
Alta Mesa will have to spend significant amounts of capital,
develop new areas and execute a successful drilling campaign
through 2013."
Low natural gas prices will continue to inhibit Alta Mesa's
overall production volume. While the company's relatively low-risk
oil projects may ultimately offset the declines in natural gas
volumes, the transition from gas to oil will be gradual. The
company's progression to a higher rating category would depend on
its ability to substantially reach its oil growth targets and
establishes a more sustainable production base.
The B2 CFR reflects Alta Mesa's small scale, high leverage,
exposure to natural gas prices and execution risks associated with
its liquids growth strategy. The rating is supported by its
modestly diversified portfolio of developed properties with low
geological risks and favorable finding and development (F&D)
costs, its substantially hedged position, as well as by its
significant growth prospects in liquids production in 2012 and
beyond. The rating is negatively impacted by the limited
partnership structure which provides Denham with a liquidity
demand right that became effective in January 2012. A demand for
liquidity would at a minimum distract management's focus, and
could be provided through a recapitalization, an IPO, or
liquidation of the partnership.
Alta Mesa plans to spend between $220 million and $240 million in
2012, mostly on oily assets. The core conventional South Louisiana
assets will attract the most capital (currently produces ~33%
oil), followed by the Eagle Ford, (~91% oil) and Oklahoma (~56%
oil). Total expenditures at the Hilltop (formerly Deep Bossier)
will be much smaller than historical levels and will target
shallower oil zones (Austin Chalk and Woodbine formations)
compared to the more gassy production that has been typical of the
region. Alta Mesa is looking to exit 2012 with oil comprising over
40% of total production, up from roughly 22% in 2010. While
natural gas will remain a substantial component of overall
production, the company's substantial above-market price hedges
should shelter margins through 2013.
Liquidity should be adequate through mid-2013, which is captured
in the assigned SGL-3 rating. Alta Mesa's funds from operations,
cash balance and revolver availability should sufficiently cover
capital expenditures and working capital requirements through mid-
2013. At March 31, 2012, the company had approximately $9 million
of cash and as of May 15, 2012 had $118 million of availability on
its $350 million borrowing base revolving credit facility. The
borrowing base was re-determined in May 2012. The facility expires
on May 23, 2016. The revolving credit facility has three financial
covenants -- a maximum debt to EBITDAX of 4.0x, a minimum EBITDAX
to interest of 3.0x, and a minimum current ratio of 1.0x. There is
ample headroom under the covenants and Moody's expects full
compliance through 2013. Substantially all of the partnership's
assets are pledged as collateral for the revolving credit
facility. As such, Alta Mesa's ability to raise alternate
liquidity is limited.
The stable outlook reflects the repeatability of Alta Mesa's asset
base, its substantially hedged future sales, and Moody's
expectation that the near-term growth in oil and NGL production
will be funded principally with operating cash flow.
An upgrade would be considered if Alta Mesa can raise production
above 20,000 boe per day through drilling success, lower debt to
average daily production below $25,000 per boe and achieve a
leveraged full-cycle ratio approaching 1.5x.
Alta Mesa's ratings could be downgraded if it assumes significant
amount of debt to fund growth, acquisitions or distributions
resulting in a debt to average daily production above $35,000 per
boe.
The principal methodologies used in rating Alta Mesa were the
Independent Exploration and Production Industry methodology
published in December 2011, and the Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA, published in June 2009.
Alta Mesa Holdings, headquartered in Houston, Texas, is an
independent E&P company with primary producing properties located
South Louisiana, East Texas, Oklahoma, and the Eagle Ford Shale in
South Texas.
AMBAC FIN'L: Circuit Court OKs AAC Settlement With IRS
------------------------------------------------------
Ambac Assurance Corporation disclosed that following a hearing
held on June 13, 2012, the Circuit Court for Dane County,
Wisconsin approved a motion submitted by the Wisconsin
Commissioner of Insurance, acting as the Rehabilitator of the
Segregated Account of Ambac Assurance relating to a potential
settlement on terms set forth in an offer made to the United
States on behalf of the Internal Revenue Service with respect to
pending disputes over the tax treatment of credit default swap
contracts and related matters. The Offer was jointly made by the
Rehabilitator, OCI, Ambac Assurance, Ambac Financial Group, Inc.
and the Official Committee of Unsecured Creditors of Ambac on
Feb. 24, 2012. The settlement contemplated by the Offer would
resolve all related litigation with the IRS, eliminating
uncertainty on several tax issues important to the rehabilitation,
and allow Ambac to satisfy one of the conditions required for the
consummation of Ambac's Fifth Amended Plan of Reorganization. The
Offer remains subject to the evaluation and acceptance by the
United States.
About Ambac Financial
Ambac Financial Group, Inc., headquartered in New York City, is a
holding company whose affiliates provided financial guarantees and
financial services to clients in both the public and private
sectors around the world.
Ambac Financial filed a voluntary petition for relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No.
10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will
continue to operate in the ordinary course of business as "debtor-
in-possession" under the jurisdiction of the Bankruptcy Court and
in accordance with the applicable provisions of the Bankruptcy
Code and the orders of the Bankruptcy Court.
Ambac's bond insurance unit, Ambac Assurance Corp., did not file
for bankruptcy. AAC is being restructured by state regulators in
Wisconsin. AAC is domiciled in Wisconsin and regulated by the
Office of the Commissioner of Insurance of the State of Wisconsin.
The parent company is not regulated by the OCI.
Ambac's consolidated balance sheet -- which includes non-debtor
Ambac Assurance Corp -- showed US$30.05 billion in total assets,
US$31.47 billion in total liabilities, and a US$1.42 billion
stockholders' deficit, at June 30, 2010.
On an unconsolidated basis, Ambac said in a court filing that
it has assets of (US$394.5 million) and total liabilities of
US$1.6826 billion as of June 30, 2010.
Bank of New York Mellon Corp., as trustee to seven different types
of notes, is listed as the largest unsecured creditor, with claims
totaling about US$1.62 billion.
Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L.
Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's
bankruptcy counsel. The Blackstone Group LP is the Debtor's
financial advisor. Kurtzman Carson Consultants LLC is the claims
and notice agent. KPMG LLP is tax consultant to the Debtor.
Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller,
Esq., at Morrison & Foerster LLP, in New York, serve as counsel
to the Official Committee of Unsecured Creditors. Lazard Freres
& Co. LLC is the Committee's financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceeding undertaken
by Ambac Financial Group and the restructuring proceedings of
Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945-
7000).
AMERICAN ARCHITECTURAL: Files for Chapter 11 in Philadelphia
------------------------------------------------------------
American Architectural, Inc., and Advanced Acquisitions, LLC,
filed for Chapter 11 protection (Bankr. E.D. Pa. Case Nos.
12-15818 and 12-15819) in Philadelphia on June 15, 2012,
estimating less than $50 million in assets and liabilities.
The Debtors have obtained approval for an expedited hearing on the
first day motions on June 20, 2012 at 12:00 p.m. The case has
been assigned to Judge Magdeline D. Coleman.
The Debtors have filed motions to use cash collateral, make
adequate assurance to utilities, and extend the deadline to file
schedules and statement of financial affairs. The schedules of
assets and liabilities are currently due June 29, 2012.
The Debtors have also filed applications to employ Maschmeyer
Karalis P.C. as bankruptcy counsel and Douglas Ziegler, LLC as
accountants.
American Architectural is a provider of quality building
enclosures. Advanced Acquisitions is the beneficial owner of a
98,000 square feet facility in Bensalem, Pennsylvania, which
houses AAI's offices and manufacturing plant. AAI has 49
employees.
AAI completed work on many high profile projects in New York
including, the AOL/Time Warner facility at Columbus Circle, the
Lincoln Center, the Museum of Arts and Design, the New York
Historical Society, and the JetBlue Terminal 5 at JFK
International Airport, to name just a few of our noteworthy
projects. Recently, AAI completed the east coast's largest canopy
for Goldman Sachs and has recently closed its fourth major World
Trade Center rebuild project.
Slowing Economy
"Our business has not been immune to the slowing economy and we
have experienced a substantial reduction in contract revenues and
been forced to accept contracts with substantially smaller profit
margins. Further, the delays in processing change orders and the
slow payments from owners (private, institutional and governmental
agencies) to the corresponding, general contractors and/or
construction managers, has caused severe cash flow problems," John
C. Melching, CEO of AAI explains in a court filing.
Mr. Melching says that AAI's inability to stay current on its
March and April 2012 payroll tax obligations has resulted in the
Internal Revenue Service advising that they intend to exercise
their enforcement remedies. This has created the imminent threat
that the IRS will garnish our accounts. Any interruption in the
already tight cash flow of the AAI Debtor will result in all of
its projects coming to a screeching halt.
As a result, the Debtors were placed in the untenable position of
potentially seeing their businesses shutdown. The Debtors decided
to file for Chapter 11 protection to preserve their going concern
value and to reorganize their affairs.
13 Pending Contracts
Since 2000, sales at the AAI Debtor grew from $2 million to over
$39 million by 2008. However, as sales increased, profit margins
dropped dramatically. During the period from 2006 to 2008, the
AAI Debtor incurred substantial losses on several jobs causing
cash flow to become tight which resulted in the AAI Debtor being
unable to pay its payroll tax obligations on a timely basis.
The Lincoln Center, Brooklyn College and Jet Blue projects all
experienced significant scheduling delays that were caused by
either the owners and/or the general contractors for these
projects. These delays caused AAI to have to perform all three
jobs at the same time instead of sequentially, which resulted in
expansion and escalation costs that exceeded 20% of the
approximate $24 million total contract values of these three
projects.
Since 2008, the annual contract revenues decreased from $39.08
million to $23.01 million. During this period, profit margins
also decreased as a result of the increase in competitive bidding
required in order to continue to obtain new work. The
combinations of the 2008 loss, smaller margins, the delay in
getting change orders approved, and slow paying owners and
construction managers, have resulted in a drain upon the cash flow
of AAI.
As of the Petition Date, AAI had a backlog of 13 contracts,
aggregating revenues in excess of $29 million. Ongoing bonded
projects are Carnegie 57, the Mt. Sinai School of Medicine of New
York University, the New York Historical Society - Auditorium, the
New York Historical Society - Phase 2, World Trade Center Path
Hall, and the World Trade Center Tower 4. Ongoing non-bonded
projects are as follows: WTC Path Hall - Elevator, Fordham
University, HR Embassy Suites/Ground Floor, Sea Glass Carousel,
Freedom Tower, Cablenet and 4-5 Fulton Street.
AAI's prepetition lender is Univest National Bank and Trust
Company who, as of the Petition Date, is owed, in total,
$5.329 million. AAI has other unliquidated debts of $4.290
million due to numerous trade creditors. Payroll tax obligations
total $2.369 million.
During the Chapter 11 proceedings, the Debtors intend to continue
the operation of their businesses, while at the same time reducing
overhead and related operational costs. The Debtors also intend
to use Chapter 11 to restructure their obligations and to
reorganize their affairs.
AMERICAN AIRLINES: Theairlinezone Assesses Network Strategy
-----------------------------------------------------------
Darryl Jenkins, Founder and President of Theairlinezone.com,
published a report on the American Airlines cornerstone network
strategy. The report assesses the American Airlines cornerstone
network strategy through both domestic and international lenses.
The domestic route structures of oneworld, Star, Skyteam and the
unaligned airlines are reviewed. In addition, connectivity to
international networks is assessed.
In combination with oneworld and immunized joint ventures with IAG
and others, the cornerstone model is well suited to industry
conditions. oneworld is well positioned in the cornerstone markets
for the following reasons:
They are number two overall in the largest markets.
Cornerstone markets have plentiful O&D (origin and destination)
traffic and lucrative corporate traffic. American's key gateway
hubs - including New York JFK, Los Angeles, Dallas/Ft. Worth, and
Miami - have advantages for global traffic relative to Delta's and
United's major hubs.
There are several key reasons why American Airlines finds itself
uncompetitive in cost. These include its late entry into
immunized alliances, its fleet imbalance, and the competitive
impact of industry consolidation.
In order for American's cornerstone network strategy to be fully
realized, however, the breadth of international service from these
cornerstone hubs must be complemented and fed by regional feed
with aircraft better suited to market sizes and yields. The
combination of smaller mainline aircraft and regional scope relief
should further unlock the value in the cornerstone markets.
The cornerstones are an important and necessary part of American's
network.
The report also includes an analysis of the competitive landscape
in each of the cornerstones and other important US markets.
Join us for a webinar to discuss the report on Monday, June 18,
2012 at 2 P.M. EDT. Register now at
https://attendee.gotowebinar.com/17995/register/413950659034973209
6 .
After registering, you will receive a confirmation email
containing information about joining the webinar.
About Darryl Jenkins
Darryl Jenkins is one of the best-known authorities on aviation in
the world. He is a regular commentator in the national press,
including CNN, CNBC, ABC News, NBC News, the Nightly Business
Report and various other cable programs. His expertise in
reservations systems, revenue management, operations, safety
management, air traffic control, and aviation policy is widely
regarded. Jenkins was a member of the Executive Committee of the
White House Conference on Aviation Safety and Security.
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on $18.02 billion
of total operating revenues for the nine months ended Sept. 30,
2011. AMR recorded a net loss of $471 million in the year 2010, a
net loss of $1.5 billion in 2009, and a net loss of $2.1 billion
in 2008.
AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion
in total assets, $29.55 billion in total liabilities, and a
$4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
ARCAPITA BANK: Committee Retains Cayman Islands Counsel
-------------------------------------------------------
Arcapita Bank's Official Committee of Unsecured Creditors seeks to
hire Walkers as its own counsel in the Cayman Islands proceedings
involving Arcapita Investment Holdings Limited.
AIHL acts as a holding company principally with respect to the
investments of its parent company, Arcapita Bank. In addition,
AIHL has entered into a series of guarantees and pledges in
respect of Arcapita's financing liabilities, which include (i) two
secured murabaha facilities with Standard Chartered Bank totaling
$100 million which matured on March 28, 2012; (ii) and unsecured
syndicated murabaha facility of $1.1 billion which matured on
March 28, 2012 and (iii) a murabaha facility of $100 million due
to mature on Sept. 7, 2013. In addition, AIHL has an intercompany
loan, which is repayable on demand, in an amount of $455,914,763.
AIHL was unable to pay, is unable to meet its obligations under
the guarantees and is likely to become unable to pay its debts.
Arcapita, as the sole shareholder of AIHL, passed a written
resolution on March 18, 2012 requiring AIHL to be wound up by the
Grand Court of the Cayman Islands, and seeking a stay of the
winding up petition and the appointment of joint provisional
liquidators pursuant to Section 104(3) of the Companies Law (2011
Revision). On March 19, 2012, AIHL presented a petition to the
Cayman Court seeking its winding up by the Court. In conjunction
with the Petition, AIHL also issued an ex parte summons to the
Cayman Court requesting the appointment of provisional liquidators
and that the provisional liquidators be directed by the Cayman
Court to authorize the directors of AIHL to continue to exercise
all powers of management conferred on them by AIHL and to remain
the representatives of AIHL in its capacity as a debtor in
possession under s.1107 of the Bankruptcy Code (subject to the
supervision of the provisional liquidators).
Pursuant to an order of the Cayman Court dated March 19 and 20,
2012 (and filed with the Cayman Court on March 21) the Cayman
Court ordered, among other matters, that (i) Gordon MacRae and
Simon Appell of Zolfo Cooper LLP, be appointed joint provisional
liquidators of AIHL with the powers to act jointly and severally
under section 104(3) of the Companies Law; and (ii) the
Provisional Liquidators be directed by the Cayman Court to
authorize the directors of AIHL to continue to exercise all powers
of management conferred on them by AIHL and to remain the
representatives of AIHL in its capacity as a debtor in possession
under section 1107 of the Bankruptcy Code (subject to the
supervision of the provisional liquidators).
The Committee said Walkers will, among others:
(a) advise the Committee with respect to all aspects of
Cayman law;
(b) assist and advise the Committee on issues relative to
Cayman law that may arise in the Cayman Insolvency
Proceeding;
(c) attend hearings and monitors other developments in the
Cayman Insolvency Proceeding; and
(d) perform such other legal services as may be in the
interests of the Committee in accordance with the
Committee's powers and duties as set forth in the
Bankruptcy Code.
Walkers has the largest dedicated insolvency group of any of the
offshore firms and has worked on many of the largest insolvency
and restructuring matters over the past decade including Enron,
Parmalat, Fruit of the Loom, Bear Stearns and Lehman Brothers.
Neil Lupton, Esq., a partner in Walkers' Insolvency and Corporate
Recovery Group, attests Walkers does not have any connection with
or represent any other entity having an interest adverse to the
Debtors, their creditors or any other party in interest, or their
attorneys, accountants or other professionals. Mr. Lupton said
Walkers is a ?disinterested person? as that term is defined in
section 101(14) of the Bankruptcy Code.
Standard hourly rates charged by Walkers range from $800 to $900
for partners, $700 to $750 for of counsel, $500 to $700 for
associates and senior attorneys, and $200 to $300 for legal
assistants.
About Arcapita Bank
Arcapita Bank B.S.C., also known as First Islamic Investment Bank
B.S.C., along with affiliates, filed for Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19,
2012. The Debtors said they do not have the liquidity necessary
to repay a US$1.1 billion syndicated unsecured facility when it
comes due on March 28, 2012.
Falcon Gas Storage Company, Inc., later filed a Chapter 11
petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012.
Falcon Gas is an indirect wholly owned subsidiary of Arcapita that
previously owned the natural gas storage business NorTex Gas
Storage Company LLC. In early 2010, Alinda Natural Gas Storage I,
L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas
Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.)
acquired the stock of NorTex from Falcon Gas for $515 million.
Arcapita guaranteed certain of Falcon Gas' obligations under the
NorTex Purchase Agreement.
The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy
counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP
as international counsel on Bahrain matters, Hatim S Zu'bi &
Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild
Inc. and financial advisor, and GCG Inc. as notice and claims
agent.
Milbank, Tweed, Hadley & McCloy LLP represents the Official
Committee of Unsecured Creditors. Houlihan Lokey Capital, Inc.,
serves as its financial advisor and investment banker.
Founded in 1996, Arcapita is a global manager of Shari'ah-
compliant alternative investments and operates as an investment
bank. Arcapita is not a domestic bank licensed in the United
States. Arcapita is headquartered in Bahrain and is regulated
under an Islamic wholesale banking license issued by the Central
Bank of Bahrain. The Arcapita Group employs 268 people and has
offices in Atlanta, London, Hong Kong and Singapore in addition
to its Bahrain headquarters. The Arcapita Group's principal
activities include investing on its own account and providing
investment opportunities to third-party investors in conformity
with Islamic Shari'ah rules and principles.
The Arcapita Group has roughly US$7 billion in assets under
management. On a consolidated basis, the Arcapita Group owns
assets valued at roughly US$3.06 billion and has liabilities of
roughly US$2.55 billion. The Debtors owe US$96.7 million under
two secured facilities made available by Standard Chartered Bank.
Arcapita explored out-of-court restructuring scenarios but was
unable to achieve 100% lender consent required to effectuate the
terms of an out-of-court restructuring.
Subsequent to the Chapter 11 filing, Arcapita Investment Holdings
Limited, a wholly owned Debtor subsidiary of Arcapita in the
Cayman Islands, issued a summons seeking ancillary relief from
the Grand Court of the Cayman Islands with a view to facilitating
the Chapter 11 cases. AIHL sought the appointment of Zolfo
Cooper as provisional liquidator.
ARCAPITA BANK: Files Schedules of Assets and Liabilities
--------------------------------------------------------
Arcapita Bank B.S.C., filed with the Bankruptcy Court its
schedules of assets and liabilities, disclosing:
NAME OF SCHEDULE ASSETS LIABILITIES
---------------- ------ -----------
A - Real Property $0
B - Personal Property $4,228,256,386
+ Undetermined
Amounts
C - Property Claimed
as Exempt
D - Creditors Holding
Secured Claims $96,674,839
+ Undetermined
Amounts
E - Creditors Holding Unsecured
Priority Claims $0
F - Creditors Holding Unsecured
Nonpriority Claims $3,123,268,890
+ Undetermined
Amounts
------ -----------
TOTAL $4,228,256,386 $3,219,943,729
+ Undetermined + Undetermined
Amounts Amounts
Falcon Gas Storage Company Inc., meanwhile, disclosed $92,182,453
plus undetermined amounts in personal property assets and $536.30
in unsecured nonpriority claims.
Arcapita Bank B.S.C., also known as First Islamic Investment Bank
B.S.C., along with affiliates, filed for Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19,
2012. The Debtors said they do not have the liquidity necessary
to repay a US$1.1 billion syndicated unsecured facility when it
comes due on March 28, 2012.
Falcon Gas Storage Company, Inc., later filed a Chapter 11
petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012.
Falcon Gas is an indirect wholly owned subsidiary of Arcapita that
previously owned the natural gas storage business NorTex Gas
Storage Company LLC. In early 2010, Alinda Natural Gas Storage I,
L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas
Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.)
acquired the stock of NorTex from Falcon Gas for $515 million.
Arcapita guaranteed certain of Falcon Gas' obligations under the
NorTex Purchase Agreement.
The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy
counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP
as international counsel on Bahrain matters, Hatim S Zu'bi &
Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild
Inc. and financial advisor, and GCG Inc. as notice and claims
agent.
Milbank, Tweed, Hadley & McCloy LLP represents the Official
Committee of Unsecured Creditors. Houlihan Lokey Capital, Inc.,
serves as its financial advisor and investment banker.
Founded in 1996, Arcapita is a global manager of Shari'ah-
compliant alternative investments and operates as an investment
bank. Arcapita is not a domestic bank licensed in the United
States. Arcapita is headquartered in Bahrain and is regulated
under an Islamic wholesale banking license issued by the Central
Bank of Bahrain. The Arcapita Group employs 268 people and has
offices in Atlanta, London, Hong Kong and Singapore in addition
to its Bahrain headquarters. The Arcapita Group's principal
activities include investing on its own account and providing
investment opportunities to third-party investors in conformity
with Islamic Shari'ah rules and principles.
The Arcapita Group has roughly US$7 billion in assets under
management. On a consolidated basis, the Arcapita Group owns
assets valued at roughly US$3.06 billion and has liabilities of
roughly US$2.55 billion. The Debtors owe US$96.7 million under
two secured facilities made available by Standard Chartered Bank.
Arcapita explored out-of-court restructuring scenarios but was
unable to achieve 100% lender consent required to effectuate the
terms of an out-of-court restructuring.
Subsequent to the Chapter 11 filing, Arcapita Investment Holdings
Limited, a wholly owned Debtor subsidiary of Arcapita in the
Cayman Islands, issued a summons seeking ancillary relief from
the Grand Court of the Cayman Islands with a view to facilitating
the Chapter 11 cases. AIHL sought the appointment of Zolfo
Cooper as provisional liquidator.
ARCAPITA BANK: Can Make $30.4 Million Loan to Lusail Venture
------------------------------------------------------------
Arcapita Bank B.S.C.(c) and its debtor-affiliates obtained
permission from the Bankruptcy Court to fund a $30,400,000 loan to
fund payments due and owing under a lease governing Arcapita's use
of property located within the only master-planned development in
Lusail City, near Doha, Qatar, and maintain Arcapita's indirect
interest in a joint venture, Lusail Golf Development LLC. The
payments are due under a Land Purchase Agreement due June 1, 2012.
The property is currently undeveloped. It is contemplated that
the Lusail Land will be developed into a residential real estate
golf community. Significantly, this use could change in a way
highly beneficial to the Debtors based on ongoing developments in
connection with the selection last year of Qatar as the site of
the 2022 World Cup.
The Debtors said one of the key assets they seek to preserve is an
option to repurchase shares representing a 50% interest in the
Lusail Joint Venture. The Debtors said the Option, which is
already well "in the money," arises out of a series of agreements
pursuant to which Arcapita, in a Shari'ah compliant manner,
implemented a prepetition financing transaction with the QIB Group
which raised roughly $200 million; for Shari'ah reasons, the
transaction was structured as a sale of the Shares, together with
a right to lease back the underlying land held by the Lusail Joint
Venture.
Arcapita received a right to buy back the Shares at any time prior
to March 5, 2015, for a strike price of only $220 million. In
effect, the sale of the Shares provided necessary working capital
for the operation of Arcapita and its affiliates, the combination
of the lease payments and the Option exercise price compensates
QIB for entering into these series of agreements, and the Option
effectively enables Arcapita and its affiliates to maintain their
interest in the Lusail Joint Venture and realize the underlying
value of the Shares for the benefit of stakeholders of the
Arcapita Group. This is a structure that has frequently been used
by Arcapita, including in a prior agreement with QIB with respect
to the very same Shares, to provide financing for Arcapita's
business operations and investments in portfolio companies.
According to the Debtors, numerous direct benefits will inure to
the estates if the financing is authorized, chief among them being
(a) Arcapita's Option to repurchase the valuable Shares will be
preserved; (b) the Arcapita Group's equity interest in the Lusail
Joint Venture will not be diluted by its joint venture partner;
(c) Arcapita will not be compelled to sell its interests to its
joint venture partner at an unreasonably low price; and (d) the
value of the non-Debtor joint venture will be preserved by
avoiding a potential default on the Land Purchase Agreement.
Pursuant to the Court Order, the Debtors will use their good faith
efforts to have their nondebtor affiliates, consult with the
Official Committee of Unsecured Creditors and the Cayman Islands
Joint Provisional Liquidators in Arcapita Investment Holdings
Limited's Cayman Islands proceedings and their advisors with
respect to any disposition of the Arcapita Group's interests in
the Lusail Joint Venture, on such terms and conditions as the
Debtors agree.
About Arcapita Bank
Arcapita Bank B.S.C., also known as First Islamic Investment Bank
B.S.C., along with affiliates, filed for Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19,
2012. The Debtors said they do not have the liquidity necessary
to repay a US$1.1 billion syndicated unsecured facility when it
comes due on March 28, 2012.
Falcon Gas Storage Company, Inc., later filed a Chapter 11
petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012.
Falcon Gas is an indirect wholly owned subsidiary of Arcapita that
previously owned the natural gas storage business NorTex Gas
Storage Company LLC. In early 2010, Alinda Natural Gas Storage I,
L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas
Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.)
acquired the stock of NorTex from Falcon Gas for $515 million.
Arcapita guaranteed certain of Falcon Gas' obligations under the
NorTex Purchase Agreement.
The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy
counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP
as international counsel on Bahrain matters, Hatim S Zu'bi &
Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild
Inc. and financial advisor, and GCG Inc. as notice and claims
agent.
Milbank, Tweed, Hadley & McCloy LLP represents the Official
Committee of Unsecured Creditors. Houlihan Lokey Capital, Inc.,
serves as its financial advisor and investment banker.
Founded in 1996, Arcapita is a global manager of Shari'ah-
compliant alternative investments and operates as an investment
bank. Arcapita is not a domestic bank licensed in the United
States. Arcapita is headquartered in Bahrain and is regulated
under an Islamic wholesale banking license issued by the Central
Bank of Bahrain. The Arcapita Group employs 268 people and has
offices in Atlanta, London, Hong Kong and Singapore in addition
to its Bahrain headquarters. The Arcapita Group's principal
activities include investing on its own account and providing
investment opportunities to third-party investors in conformity
with Islamic Shari'ah rules and principles.
The Arcapita Group has roughly US$7 billion in assets under
management. On a consolidated basis, the Arcapita Group owns
assets valued at roughly US$3.06 billion and has liabilities of
roughly US$2.55 billion. The Debtors owe US$96.7 million under
two secured facilities made available by Standard Chartered Bank.
Arcapita explored out-of-court restructuring scenarios but was
unable to achieve 100% lender consent required to effectuate the
terms of an out-of-court restructuring.
Subsequent to the Chapter 11 filing, Arcapita Investment Holdings
Limited, a wholly owned Debtor subsidiary of Arcapita in the
Cayman Islands, issued a summons seeking ancillary relief from
the Grand Court of the Cayman Islands with a view to facilitating
the Chapter 11 cases. AIHL sought the appointment of Zolfo
Cooper as provisional liquidator.
ARCAPITA BANK: Court Says Prior Orders Applicable to Falcon Case
----------------------------------------------------------------
Tide Natural Gas Storage I LP and Tide Natural Gas Storage II LP
failed to convince the Bankruptcy Judge to let Falcon Gas Storage
Company Inc.'s bankruptcy proceed on its own.
Judge Sean Lane granted the request of Arcapita Bank B.S.C.(c) and
its subsidiaries, including Falcon, for entry of an order
directing that orders entered in the chapter 11 cases of the
Debtors be made applicable to Falcon. The Court, however,
directed the Debtors to give Tide notice of the amount of and the
recipient of any payments made pursuant to the Court's Final Order
(a) Authorizing the Debtors to Continue Insurance Coverage Entered
Into Prepetition and To Pay Obligations Relating Thereto; and (b)
Authorizing Financial Institutions to Honor and Process Related
Checks and Transfers; and Order Authorizing Debtor to Employ and
Retain Certain Professionals Utilized in the Ordinary Course of
the Debtors' Business. The Debtors will also identify any
intercompany transactions made to or by Falcon in accordance with
the Company's budget.
Tide owns a gas storage facility in Texas purchased from Falcon in
April 2010 for $515 million. At the time, $70 million was placed
into escrow with a bank in case Tide later made claims to recover
some of the purchase price. Saying there were misrepresentations,
Tide sued Falcon in August 2010 in U.S. District Court in New York
to recover the $70 million escrow. A motion by Falcon to dismiss
the suit failed, Tide said.
Falcon has no remaining employees or cash flow, Tide says, and
there is no reason for the complicated proceedings in Arcapita's
case to burden the straightforward Falcon reorganization. Tide
alleges that Falcon's Chapter 11 is "an attempt to forum shop for
a more favorable ruling," referring to the district judge's
refusal so far to give Falcon the $70 million.
Arcapita fired back at Tide's opposition, calling it misguided.
Arcapita said Tide's Objection is "nothing more than an attempt to
muddy the waters by raising unrelated substantive issues that are
at the center of the litigation between Falcon and Tide that are
better resolved at later stages in the case into what is otherwise
a straightforward and purely procedural motion. " Arcapita pointed
out its request was simply an effort to save the unnecessary
administrative costs of preparing largely duplicative "first day"
motions and to preserve the value of their estates, a goal that is
mutually beneficial to both Falcon and its creditors. The request
did not attempt to resolve -- nor would it have been appropriate
for it to do so -- any of the substantive issues in the claims
that Tide alleged against both Falcon and Arcapita Bank.
About Arcapita Bank
Arcapita Bank B.S.C., also known as First Islamic Investment Bank
B.S.C., along with affiliates, filed for Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19,
2012. The Debtors said they do not have the liquidity necessary
to repay a US$1.1 billion syndicated unsecured facility when it
comes due on March 28, 2012.
Falcon Gas Storage Company, Inc., later filed a Chapter 11
petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012.
Falcon Gas is an indirect wholly owned subsidiary of Arcapita that
previously owned the natural gas storage business NorTex Gas
Storage Company LLC. In early 2010, Alinda Natural Gas Storage I,
L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas
Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.)
acquired the stock of NorTex from Falcon Gas for $515 million.
Arcapita guaranteed certain of Falcon Gas' obligations under the
NorTex Purchase Agreement.
The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy
counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP
as international counsel on Bahrain matters, Hatim S Zu'bi &
Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild
Inc. and financial advisor, and GCG Inc. as notice and claims
agent.
Milbank, Tweed, Hadley & McCloy LLP represents the Official
Committee of Unsecured Creditors. Houlihan Lokey Capital, Inc.,
serves as its financial advisor and investment banker.
Founded in 1996, Arcapita is a global manager of Shari'ah-
compliant alternative investments and operates as an investment
bank. Arcapita is not a domestic bank licensed in the United
States. Arcapita is headquartered in Bahrain and is regulated
under an Islamic wholesale banking license issued by the Central
Bank of Bahrain. The Arcapita Group employs 268 people and has
offices in Atlanta, London, Hong Kong and Singapore in addition
to its Bahrain headquarters. The Arcapita Group's principal
activities include investing on its own account and providing
investment opportunities to third-party investors in conformity
with Islamic Shari'ah rules and principles.
The Arcapita Group has roughly US$7 billion in assets under
management. On a consolidated basis, the Arcapita Group owns
assets valued at roughly US$3.06 billion and has liabilities of
roughly US$2.55 billion. The Debtors owe US$96.7 million under
two secured facilities made available by Standard Chartered Bank.
Arcapita explored out-of-court restructuring scenarios but was
unable to achieve 100% lender consent required to effectuate the
terms of an out-of-court restructuring.
Subsequent to the Chapter 11 filing, Arcapita Investment Holdings
Limited, a wholly owned Debtor subsidiary of Arcapita in the
Cayman Islands, issued a summons seeking ancillary relief from
the Grand Court of the Cayman Islands with a view to facilitating
the Chapter 11 cases. AIHL sought the appointment of Zolfo
Cooper as provisional liquidator.
ASPECT SOFTWARE: S&P Keeps 'B' Corp Credit Rating on High Leverage
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on Chelmsford, Mass.-based contact center software
provider Aspect Software Inc. "We also revised the outlook to
stable from positive, reflecting weaker near-term earning
prospects and an expected resulting decline in covenant cushion,
absent further debt reduction," S&P said.
"At the same time, we affirmed our 'B+' rating on Aspect's first-
lien credit facility and the 'B-' rating on its senior second-lien
notes. The recovery ratings on the debt remain unchanged," S&P
said.
"The rating on Aspect reflects its 'weak' business profile,
characterized by its modest position in the highly competitive
contact-center industry and 'highly leveraged' financial profile.
The company's highly recurring revenue base and stable cash flow
generation partly offset these factors," S&P said.
"We expect mid- to- high-single-digit revenue decline in fiscal
year 2012, mainly from reduced corporate spending on contact
centers, combined with increased price competition," said Standard
& Poor's credit analyst Katarzyna Nolan. "We also expect that
EBITDA margins are going to decrease to below 30%, reflecting in
part increased spending on development and sales and marketing
efforts related to Aspect's Unified IP and Workforce Optimization
products. As a result, we anticipate that leverage will rise to
the high-5x area by fiscal year-end from 5.5x as of the first
quarter ended March 31, 2012."
"The stable rating outlook incorporates our expectations that the
company's diversified customer base and revenue visibility will
continue to support modest FOCF generation. Although, we expect
reduced covenant headroom, we view the company's cash portfolio
and potential for debt reduction as the near term offsets," S&P
said.
"We could lower the rating if competitive dynamics in the industry
cause a continuing decline in Aspect's revenue and EBITDA,
resulting in leverage increasing to the high-6x area or if
Aspect's liquidity is materially diminished," S&P said.
AWAS AVIATION: S&P Keeps 'BB' Corp. Credit Rating; Outlook Stable
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BBB-' issue
rating to the $360 million senior secured term loan maturing 2018,
obtained by a yet-to-be named special purpose company (that AWAS
Aviation Capital Ltd. will guarantee). "We will update the issuer
name when it is finalized. We also assigned this issue a '1'
recovery rating, indicating our expectation that lenders would
receive very high (90%-100%) recovery of principal in a payment
default. AWAS will use proceeds to repay debt and pre-fund new
aircraft deliveries," S&P said.
"The ratings on Dublin-based AWAS Aviation Capital reflect its
position as a large provider of aircraft operating leases and its
diversified fleet and airline customer base. Limiting credit
considerations include exposure to cyclical demand and lease rates
for aircraft, a weaker financial profile than some of its
competitors, and a substantial percentage of encumbered assets,
constraining options for raising capital. The ratings incorporate
our expectations that these trends will continue over the next
several quarters. Standard & Poor's characterizes AWAS's business
risk profile as 'satisfactory,' its financial risk profile as
'significant,' and its liquidity as 'adequate' under our
criteria," S&P said.
"Our long-term rating outlook is stable. We expect AWAS's
financial profile to remain relatively consistent into 2013, with
higher earnings and cash flow offsetting incremental debt to fund
new aircraft deliveries. We could raise the ratings if demand and
lease rates for aircraft lessors demonstrate sustainable
improvement, resulting in a substantial earnings increase, and
funds from operations to debt increases to and remains more than
10%. We could lower ratings if AWAS completed a large debt-
financed aircraft portfolio acquisition or debt-financed dividend
to its owners, causing FFO to debt to decline to the mid-single-
digit percent area," S&P said.
RATINGS LIST
AWAS Aviation Capital Ltd.
Corporate credit rating BB/Stable/--
Ratings Assigned
$360 mil. sr sec term loan due 2018 BBB-
Recovery rating 1
BAKERS FOOTWEAR: Has $30 Million Credit Facility with Crystal
-------------------------------------------------------------
Bakers Footwear Group, Inc., as borrower, and Crystal Financial
LLC, as lender, administrative agent and collateral agent, entered
into a Credit Agreement and related promissory note on June 13,
2012. The new $30 million revolving credit facility provided for
under the Credit Agreement replaces a $30 million revolving credit
facility entered into on Aug. 31, 2006, as amended from time to
time, by and among the Company and Bank of America, N.A. The
borrowings under the New Facility will be used to repay amounts
outstanding under the Prior Facility, to pay expenses and fees
related to the entry into the Credit Agreement and for general
working capital purposes. As of June 13, 2012, the balance on the
Prior Facility was approximately $9.4 million, not including
outstanding letters of credit in the aggregate outstanding face
amount of approximately $1.6 million.
The Credit Agreement provides for a maturity date of June 13,
2016, provided that if the Company's Convertible Debentures have
not been refinanced by Nov. 16, 2015, to extend their maturity
until a date subsequent to Dec. 12, 2016, the maturity date of the
Credit Agreement will be automatically adjusted to Nov. 16, 2015.
The Prior Facility was scheduled to mature on May 28, 2013.
Amounts borrowed under the New Facility will bear interest at a
rate equal to the Libor rate plus a margin of 7.00% per annum, an
increase over the Prior Facility.
In connection with the Credit Agreement, the Company and the
Lender entered into a security agreement dated June 13, 2012,
creating a security interest in substantially all of the Company's
assets in favor of the Lender.
A copy of the Form 8-K is available for free at:
http://is.gd/W5Wo9N
About Bakers Footwear
St. Louis, Mo.-based Bakers Footwear Group, Inc. (OTC BB: BKRS.OB)
is a national, mall-based, specialty retailer of distinctive
footwear and accessories for young women. The Company's
merchandise includes private label and national brand dress,
casual and sport shoes, boots, sandals and accessories. The
Company currently operates 231 stores nationwide. Bakers' stores
focus on women between the ages of 16 and 35. Wild Pair stores
offer fashion-forward footwear to both women and men between the
ages of 17 and 29.
The Company reported a net loss of $10.95 million for the
year ended Jan. 28, 2012, a net loss of $9.29 million for the year
ended Jan. 29, 2011, and a net loss of $9.08 million for the year
ended Jan. 30, 2010.
After auditing the Company's financial results for fiscal 2012,
Ernst & Young LLP, in St. Louis, Missouri, expressed substantial
doubt about the Company's ability to continue as a going concern.
The independent auditors noted that the Company has incurred
substantial losses from operations in recent years and has a
significant working capital deficiency.
The Company reported a net loss of $10.95 million on
$185.09 million of net sales for the 52 weeks ended Jan. 28, 2012,
compared with a net loss of $9.29 million on $185.62 million of
net sales for the 52 weeks ended Jan. 29, 2011.
The Company's balance sheet at April 28, 2012, showed $41.90
million in total assets, $59.49 million in total liabilities and a
$17.59 million total shareholders' deficit.
Bankruptcy Warning
The Company said in the Form 10-K for the year ended Jan. 28,
2012, that if it does not achieve its updated business plan and
its margin improvement and cost reduction plan, or if the Company
were to incur significant unplanned cash outlays, it would become
necessary for the Company to quickly seek additional sources of
liquidity, or to find additional cost cutting measures. Any
future financing would be subject to the Company's financial
results, market conditions and the consent of the Company's
lenders. The Company may not be able to obtain additional
financing or it may only be able to obtain such financing on terms
that are substantially dilutive to the Company's current
shareholders and that may further restrict the Company's business
activities. If the Company cannot obtain needed financing, its
operations may be materially negatively impacted and the Company
may be forced into bankruptcy or to cease operations.
BILLMYPARENTS INC: Has $4MM Financing Agreement with Investors
--------------------------------------------------------------
BillMyParents, Inc., entered into subscription agreements with 38
accredited investors pursuant to which the Company issued 4,517
shares of Series B Preferred Stock, five year warrants to purchase
up to an additional 6,250,000 shares of common stock at an
exercise price of $0.50 per share and five year warrants to
purchase up to an additional 1,260,895 shares of common stock at
an exercise price of $0.60 per share, in exchange for gross
proceeds totaling $4,517,431.
This financing transaction resulted in net proceeds to the Company
of approximately $4 million after deducting fees and expenses.
The placement agent, a FINRA registered broker-dealer, in
connection with the financing received a cash fee totaling
$451,743 and will receive warrants to purchase up to 1,129,358
shares of common stock at an exercise price of $0.60 per share as
compensation.
From April 9, 2012, through May 14, 2012, the Company entered into
a subscription agreements with five accredited investors pursuant
to which the Company issued 710 shares of Series B Preferred
Stock, five year warrants to purchase up to an additional
1,250,000 shares of common stock at an exercise price of $0.50 per
share and five year warrants to purchase up to an additional
131,250 shares of common stock at an exercise price of $0.60 per
share, in exchange for gross proceeds totaling $710,000.
The total number of outstanding shares of outstanding common stock
as of the date of May 30, 2012, is 98,906,961.
A copy of the Form 8-K is available for free at:
http://is.gd/roUDVV
About BillMyParents
San Diego, Calif.-based BillMyParents, Inc., markets prepaid cards
with special features aimed at young people and their parents.
BMP is designed to enable parents and young people to collaborate
toward the goal of responsible spending.
For Fiscal 2011, the Company's independent auditors expressed
substantial doubt about the Company's ability to continue as a
going concern. BDO USA, LLP, in La Jolla, California, noted that
the Company has incurred net losses since inception and has an
accumulated deficit and stockholders' deficiency at Sept. 30,
2011.
The Company reported a net loss of $14.2 million for the fiscal
year ended Sept. 30, 2011, compared with a net loss of
$6.9 million for the fiscal year ended Sept. 30, 2010.
The Company's balance sheet at March 31, 2012, showed
$1.19 million in total assets, $1.18 million in total liabilities,
all current, and $6,797 in total stockholders' equity.
BLAST ENERGY: Termination Date of Merger Pact Extended to Aug. 1
----------------------------------------------------------------
Blast Energy Services, Inc., entered in a First Amendment to the
Agreement and Plan of Merger, which amended the Agreement and Plan
of Reorganization with Blast Acquisition Corp., a newly formed
wholly-owned Nevada subsidiary of the Company, and Pacific Energy
Development Corp., a privately-held Nevada corporation. Pursuant
to the Merger Agreement, MergerCo will be merged with and into
PEDCO, with PEDCO being the surviving entity and becoming a
wholly-owned subsidiary of the Company. The Merger Agreement was
entered into on January 13, 2012.
The First Amendment to Merger revised and extended the termination
date of the Merger Agreement from June 1, 2012, to Aug. 1, 2012.
In connection with the First Amendment to the Merger, the Company
entered into various other amendments to other agreements entered
into in connection with the Merger Agreement, including (1) an
amendment to two voting agreements with certain security and debt
holders of the Company, whereby those debt and stockholders have
agreed to vote Company capital stock held by them in favor of the
Merger Agreement and the transactions contemplated thereby, (2) an
extension of the Promissory Notes with Centurion described below,
(3) an extension of the debt conversion agreements previously
entered into with the Company's current and former officers and
directors, extending the termination date of such agreements to
Aug. 1, 2012, and (4) Lockup and Standstill Agreements with
various of its option and warrant holders.
On May 29, 2012, the Company also entered into a First Amendment
to the Voting Agreement and the Debt Conversion Agreement with
Berg McAfee Companies, LLC, a California limited liability
company, and Clyde Berg, an individual. The BMC Amendment,
amended the terms of the voting and debt conversion agreements
entered into with BMC and Berg in January 2012 to provide that
either agreement could be terminated by either party in the event
the record date for the shareholder meeting to approve, among
other things, the Merger, had not occurred by Aug. 1, 2012, which
date was previously June 1, 2012.
On May 29, 2012, the Company also entered into the Second
Amendment to First Tranche Promissory Note and the Second
Amendment to the Second Tranche Promissory Note. On Jan. 13,
2012, the Company entered into the first amendment to the First
Tranche Promissory Note, and the Second Tranche Promissory Note
with Centurion Credit Funding, LLC, in connection with the
Company's debt obligations under certain secured notes with the
Lender. The Promissory Notes were previously amended in January
2012, to provide for an extended maturity date of the Promissory
Notes to the earlier of (i) 30 days after the termination of the
Merger Agreement, if the Merger Agreement is terminated before
June 1, 2012, (ii) June 1, 2012, if the effective date of the
Merger had not occurred by such date, (iii) Aug. 2, 2012, or (iv)
the date all obligations and indebtedness under such Promissory
Notes are accelerated in accordance with the terms and conditions
of those Promissory Notes.
Moreover, the Company entered into a First Amendment to the Voting
Agreement with the Lender, dated May 29, 2012, providing for an
extension of the terms of the Voting Agreement with the Lender,
pursuant to which the Lender agreed to vote in favor of the Merger
Agreement, to the earlier of (i) the date on which the Merger
Agreement is terminated in accordance with its terms, or
(ii) Aug. 1, 2012.
In May 2012, the Company entered into Lockup and Standstill
Agreements with certain of its option holders, warrant holders,
holders of convertible debt and preferred stockholders, pursuant
to which such holders agreed not to exercise their convertible
securities prior to the earlier of (i) Aug. 1, 2012; and (ii) the
termination of the Merger Agreement.
A copy of the Form 8-K is available for free at:
http://is.gd/tu9VQ5
About Blast Energy
Houston, Texas-based Blast Energy Services, Inc., is seeking to
become an independent oil and gas producer with additional revenue
potential from its applied fluid jetting technology. The Company
plans to grow operations initially through the acquisition of oil
producing properties and then eventually, to acquire oil and gas
properties where its applied fluid jetting process could be used
to increase the field production volumes and value of the
properties in which it owns an interest.
GBH CPAs, PC, in Houston, Texas, expressed substantial doubt about
Blast Energy Services' ability to continue as a going concern.
The independent auditors noted that Blast incurred a loss from
continuing operations for the year ended Dec. 31, 2011, and has an
accumulated deficit at Dec. 31, 2011.
The Company reported a net loss of $4.14 million on $446,526 of
revenues for 2011, compared with a net loss of $1.51 million on
$109,443 of revenues for 2010.
The Company's balance sheet at March 31, 2012, showed $1.86
million in total assets, $3.98 million in total liabilities and a
$2.11 million total stockholders' deficit.
CAI INTERNATIONAL: S&P Rates Corporate Credit 'BB'; Outlook Stable
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' long-term
corporate credit rating to San Francisco-based CAI International
Inc. (CAI). The outlook is stable.
"At the same time, we assigned a 'BBB-' rating to the proposed
$100 million senior secured notes to be issued by subsidiary
Container Applications Ltd. and guaranteed by CAI. The recovery
rating on the notes is '1', indicating our expectation of a very
high (90%-100%) recovery in a payment default," S&P said.
"The ratings on CAI reflect the company's significant position
within the marine cargo container leasing industry and the
relatively stable earnings and cash flow generated from a
substantial proportion of long-term leases. Ratings also
incorporate the cyclicality of the marine cargo container leasing
industry and CAI's substantial and increasing debt burden," S&P
said.
"Our ratings also reflect our view that the company's financial
profile will improve gradually over the next two years following
an increase in debt to finance the company's aggressive fleet
expansion plans," said Standard & Poor's credit analyst Funmi
Afonja.
"CAI spent about $492 million on new containers during 2011,
compared with about $204 million during 2010 and $31 million
during 2009. CAI funded a substantial portion of its capital
spending through new debt. Still, credit measures deteriorated
only modestly because of significant incremental earnings from new
container leases. CAI, similar to other marine cargo lessors, has
maintained high utilization and strong lease rates over the past
year," S&P said.
"CAI maintains a solid industry position as a midsize marine cargo
container lessor. It generates revenues from marine cargo
containers it owns as well as fees from marine cargo containers it
manages for others," S&P said.
CAPITOL CITY: Amends 5 Million Shares Offering Prospectus
---------------------------------------------------------
Capitol City Bancshares, Inc., filed with the U.S. Securities and
Exchange Commission amendment no. 4 to Form S-1 relating to the
sale of up to 5,000,000 shares of its common stock for $2.50 per
share.
The minimum amount of shares to be purchased for any investor is
200 shares and the maximum amount of shares to be purchased for
any investor is 900,000 shares. The Company has the right, in its
discretion, to accept subscriptions for a lesser or greater number
of shares. This offering will continue on an ongoing basis
pursuant to the applicable rules of the Securities and Exchange
Commission, or until all 5,000,000 shares of common stock are
sold, or the Company, in its sole discretion, decides to end the
offering, whichever occurs first.
There is no underwriter involved in this offering. The Company's
directors and officers will offer and sell the common stock on a
best-efforts basis without compensation. The Company believes it
will not be deemed to be brokers or dealers due to Rule 3a4-1
under the Securities Exchange Act of 1934. There is no minimum
number of shares the Company must sell in this offering. The
proceeds from this offering will be immediately available to the
Company regardless of the number of shares the Company sell.
A copy of the amended filing is available for free at:
http://is.gd/eJGq8t
About Capitol City Bancshares
Atlanta, Georgia-based Capitol City Bancshares, Inc., was
incorporated under the laws of the State of Georgia for the
purposes of serving as a bank holding company for Capitol City
Bank and Trust Company. The Bank operates a full-service banking
business and engages in a broad range of commercial banking
activities, including accepting customary types of demand and
timed deposits, making individual, consumer, commercial, and
installment loans, money transfers, safe deposit services, and
making investments in U.S. government and municipal securities.
In the auditors' report accompanying the financial statements for
year ended Dec. 31, 2011, Nichols, Cauley and Associates, LLC, in
Atlanta, Georgia, expressed substantial doubt about Capital City
Bancshares' ability to continue as a going concern. The
independent auditors noted that the Company is operating under
regulatory orders to, among other items, increase capital and
maintain certain levels of minimum capital. "As of Dec. 31, 2011,
the Company was not in compliance with these capital requirements.
In addition to its deteriorating capital position, the Company has
suffered significant losses related to nonperforming assets, has
experienced declining levels of liquid assets, and has significant
maturities of liabilities within the next twelve months."
The Company's balance sheet at March 31, 2012, showed $299.28
million in total assets, $290.19 million in total liabilities and
$9.08 million in total stockholders' equity.
CATALYST PAPER: Presents Amended Plan, Proposes June 25 Meeting
---------------------------------------------------------------
Catalyst Paper is seeking approval of a further amended Plan of
Arrangement under the Companies' Creditors Arrangement Act and
will file for approval from the Court to set meetings of its
secured and unsecured creditors to consider the Amended Plan (the
Meetings). Subject to Court approval, the Meetings are
tentatively scheduled for June 25, 2012.
"We have received consent from a requisite number of our secured
noteholders to move forward to a vote on the Amended Plan," said
Kevin J. Clarke, President and Chief Executive Officer. "This
reflects the dedication of all parties to work toward a consensual
deal that incorporates the many interests involved and that puts
our company on better financial footing for the future."
Catalyst Paper's Board of Directors is unanimously recommending
that all holders of First Lien Notes, Unsecured Notes and General
Unsecured Claims vote in favour of the Amended Plan at the
Meetings.
The Amendments to the Plan of Arrangement
As described in Catalyst's press release dated June 11, 2012, the
principal change to the plan of arrangement is the compromise of
certain extended health benefits plans for former salaried
employees of Catalyst that were not to be compromised under the
prior plan of arrangement. Other changes to the plan of
arrangement are changes necessary to reflect the new timing for
creditor approval of the Amended Plan.
Pursuant to the Amended Plan, all claims in connection with the
elimination of the extended health benefits will be General
Unsecured Claims and will receive the same treatment (other than
that they will not be considered Convenience Creditors and are not
entitled to file a Cash Election) as and will be entitled to vote
with all other General Unsecured Claims under the Amended Plan.
Catalyst has been advised that there is substantial support for
the Amended Plan by the holders of the extended health benefits
claims that will be compromised under the Amended Plan. In
addition, certain holders of Unsecured Notes who previously voted
against the plan of arrangement or did not vote on the plan of
arrangement have indicated that they will support the Amended
Plan.
Also as described in Catalyst's June 11, 2012 press release,
Catalyst has proposed modifications to its salaried pension plan
to provide for a special portability election option and solvency
funding relief which require provincial government approval. The
Minister of Finance has confirmed that he is prepared to submit
the proposal to Cabinet for its consideration with a
recommendation in favour. The implementation of the Amended Plan
is conditional on obtaining regulatory approval to the above
modification. The company estimates that it would save
approximately $7 million annually if these modifications were
implemented following a successful plan of arrangement.
The Sale Transaction
While the Amended Plan is being considered, Catalyst Paper will
continue to implement the court-approved sale and investor
solicitation procedures (SISP). Catalyst Paper will suspend the
SISP only in the event that the Amended Plan is approved at the
Meetings and approved by the Court at the Sanction Hearing
following the Meetings.
Pursuant to the SISP, potential bidders have now been notified as
to whether they are Qualified Phase 1 Bidders under the SISP and
have been granted access to an electronic data site containing
information regarding Catalyst. Pursuant to the SISP, in order to
move to the next stage of the SISP process, Qualified Phase 1
Bidders must submit a non-binding indication of interest by 5:00
pm (Vancouver time) on July 11, 2012.
Required Approvals
Implementation of the Amended Plan will be subject to the
requisite approval by Catalyst Paper's secured and unsecured
creditors at the Meetings tentatively scheduled (subject to Court
approval) to be held on June 25, 2012, the approval of the Court
and, to the extent applicable, the approval of the United States
Bankruptcy Court for the District of Delaware. In the event the
Amended Plan is not approved at the Meetings, Catalyst Paper will
continue working towards a sale transaction in accordance with the
court-approved sale and investor solicitation procedures.
Conditions
Implementation of the Amended Plan remains subject to a number of
other conditions including a condition that Catalyst Paper shall
have entered into agreements with respect to a new ABL Facility
and, if necessary, Exit Facility, satisfactory to the Majority
Initial Supporting Noteholders, in consultation with the Initial
Supporting Unsecured Noteholders. The conditions are set out in
the Amended Plan and in the Circular. Please see below for
information as to how to obtain a copy of these documents. Under
the Amended Plan, each of these conditions must be satisfied
within 45 days of the date of the Sanction Order unless such
condition is waived or the date for fulfillment is extended in
accordance with the provisions of the Amended Plan.
Voting
Catalyst Paper's Board of Directors is unanimously recommending
that all holders of First Lien Notes, Unsecured Notes and General
Unsecured Claims vote in favour of the Amended Plan at the
Meetings. The Meetings to consider the Amended Plan are
tentatively scheduled (subject to Court approval) to be held on
June 25, 2012 at 10:00 am for Unsecured Creditors (including
holders of Unsecured Notes and General Unsecured Claims) and 11:00
am for First Lien Noteholders at a location to be announced.
Catalyst Paper is applying to the Court for an order that all
votes cast in respect of the previous plan of arrangement at the
meetings of secured and unsecured creditors of Catalyst Paper held
on May 23, 2012 be deemed to be voted in favor or against (as
applicable) the Amended Plan at the Meetings unless revoked.
Please see below for information on how to revoke a proxy.
Catalyst Paper is also applying to the Court for an order that all
cash elections filed in connection with the Prior Meetings be
deemed to be filed in connection with the Meetings unless revoked.
Please see below for information on how to revoke a cash election.
Revoking a Proxy
Individuals who have already submitted a proxy may revoke their
proxy by delivering to the Monitor a document specifying that the
proxy is revoked that is signed by the individual or the
individual's attorney duly authorized in writing.
Creditors who are not individuals who have already submitted a
proxy may revoke their proxy by delivering to the Monitor a
document specifying that the proxy is revoked that is signed by a
duly authorized officer or attorney thereof.
Such documents must be delivered to the Monitor at
PricewaterhouseCoopers Inc., 250 Howe Street, Suite 700,
Vancouver, British Columbia, V6C 3S7 (attention:Patricia
Marshall), phone: 604-806-7070 or email:
catalystclaims@ca.pwc.com prior to the commencement of the
Meetings.
Holders of First Lien Notes and Unsecured Notes who wish to change
voting instructions previously given should contact Globic
Advisors, Inc. (attention:Robert Stevens) at One Liberty Plaza,
23rd Floor, New York, NY 10006, phone: 212-227-9699, facsimile:
212-271-3252 or email: rstevens@globic.com for additional
information.
Revoking a Cash Election
Holders of General Unsecured Claims in excess of $10,000 who
previously filed an election (Cash Election) to receive cash for
their General Unsecured Claim may revoke their Cash Election by
contacting the Monitor as follows:
Individuals who have already submitted a Cash Election may revoke
their Cash Election by delivering to the Monitor a document
specifying that the Cash Election is revoked that is signed by the
individual or the individual's attorney duly authorized in
writing.
Creditors who are not individuals who have already submitted a
Cash Election may revoke their Cash Election by delivering to the
Monitor a document specifying that the Cash Election is revoked
that is signed by a duly authorized officer or attorney thereof.
About Catalyst Paper
Catalyst Paper Corp. -- http://www.catalystpaper.com/--
manufactures diverse specialty mechanical printing papers,
newsprint and pulp. Its customers include retailers, publishers
and commercial printers in North America, Latin America, the
Pacific Rim and Europe. With four mills, located in British
Columbia and Arizona, Catalyst has a combined annual production
capacity of 1.9 million tons. The Company is headquartered in
Richmond, British Columbia, Canada and its common shares trade on
the Toronto Stock Exchange under the symbol CTL.
Catalyst on Dec. 15, 2011, deferred a US$21 million interest
payment on its outstanding 11.00% Senior Secured Notes due 2016
and Class B 11.00% Senior Secured Notes due 2016 due on Dec. 15,
2011. Catalyst said it was reviewing alternatives to address its
capital structures and it is currently in discussions with
noteholders. Perella Weinberg Partners served as the financial
advisor.
In early January 2012, Catalyst entered into a restructuring
agreement, which will see its bondholders taking control of the
company and includes an exchange of debt for equity. The
agreement said it would slash the company's debt by C$315.4
million ($311 million) and reduce its cash interest expenses.
Catalyst also said it will continue to "operate and satisfy" its
obligations to customers, trade creditors, employees and retirees
in the ordinary course of business during the restructuring
process.
On Jan. 17, 2012, Catalyst applied for and received an initial
court order under the Canada Business Corporations Act (CBCA) to
commence a consensual restructuring process with its noteholders.
Affiliate Catalyst Paper Holdings Inc., filed for creditor
protection under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D.
Del. Case No. 12-10219) on the same day and sought recognition of
the Canadian proceedings.
Catalyst joins a line of paper producers that have succumbed to
higher costs, increased competition from Asia and Europe, and
falling demand as more advertisers and readers move online. In
2011, Cerberus Capital-backed NewPage Corp. filed for bankruptcy
protection, followed by SP Newsprint Co., owned by newsprint
magnate and fine art collector Peter Brant. In December, Wausau
Paper said it will close its Brokaw mill in Wisconsin, cut 450
jobs and exit its print and color business.
The Supreme Court of British Columbia granted Catalyst creditor
protection under the CCAA until April 30, 2012.
As of Dec. 31, 2011, the Company had C$737.6 million in total
assets and C$1.35 million in total liabilities.
CENTRAL PARKING: S&P Keeps 'CCC' CCR on Watch Pending Merger
------------------------------------------------------------
Standard & Poor's Ratings Services said its 'CCC' corporate credit
rating and all other related ratings on Nashville, Tenn.-based
Central Parking Corp. remain on CreditWatch, where they were
placed with positive implications on March 1, 2012. "CreditWatch
with positive implications means that we could either raise or
affirm our ratings on the basis of our analysis when we resolve
the CreditWatch listing, particularly with respect to the
company's debt and covenants," S&P said.
"On Feb. 29, 2012, CPC entered into a definitive agreement to
merge with Standard Parking Corp. in a transaction totaling $450
million. The boards of directors of both companies approved the
transaction, as did CPC's stockholders, who will own 28% of the
combined company and receive $27 million in cash in three years.
Completion of the transaction is subject to Standard Parking's
stockholders' approval as well as customary closing conditions,
including antitrust and other regulatory review and consummation
of financing. Management indicated that it expects to complete the
transaction by Sept. 30, 2012," S&P said.
"We had previously believed that CPC would violate its leverage
covenant in the fiscal second quarter of 2012," said Standard &
Poor's credit analyst Nalini Saxena. "While the application of
about $15 million in proceeds from an asset sale averted covenant
violation in that quarter, EBITDA cushions remain thin. However,
we believe the proposed merger will address this risk before a
violation occurs."
"As of March 31, 2012, CPC had about $216 million in total debt
outstanding, approximately $30 million in cash and cash
equivalents, and less than 10% covenant cushions. The proposed
transaction and recapitalization, in our view, creates a combined
company with a pro forma adjusted-leverage ratio (total debt to
EBITDA), including lease adjustments, in the low-8x area," S&P
said.
"Standard & Poor's could raise or affirm its ratings following our
analysis of the combined entity's business and financial profile,
and if the company has sufficient covenant headroom, at the
closing of the transaction. Based on our forecast, in the absence
of a waiver or an amendment to CPC's current credit agreement, we
anticipate a violation of the leverage covenant in the fiscal
fourth quarter 2012 (ending September). However, we expect the
company to address this risk with the concomitant close of the
proposed merger," S&P said.
"We would withdraw our ratings if CPC's existing debt is repaid,
which we currently anticipate," S&P said.
CENTURYLINK INC: S&P Retains 'BB' Corporate Credit Rating
---------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BBB-' issue-level
rating and '1' recovery rating to Qwest Corp.'s proposed senior
notes (undetermined amount) due 2052. "The '1' recovery rating
indicates our expectation for very high (90% to 100%) recovery in
the event of payment default. The company intends to use proceeds
from the notes, along with cash on the balance sheet and
borrowings from the revolving credit facility of parent company
Monroe, La.-based telecommunications carrier CenturyLink Inc., to
redeem $484 million of senior notes due 2023 at Qwest Corp.," S&P
said.
"The ratings on CenturyLink reflect a business risk profile
assessment of 'fair' and a financial risk assessment of
'significant.' Key business risk factors include our expectation
that revenues will continue to decline because of competition in
its core consumer wireline phone business from cable telephony and
wireless substitution, which contributed to access-line losses of
about 6.4% during the first quarter of 2012, year over year, pro
forma for the Qwest acquisition. We also consider the company's
financial policy aggressive, with a substantial shareholder
dividend payout, which limits debt reduction. Debt to EBITDA was
about 3.3x as of March 31, 2012, pro forma for acquisitions and
including our adjustments for operating leases and postretirement
liabilities. We expect leverage to remain in the low- to mid-3x
area over the next few years," S&P said.
"Tempering factors in the business risk assessment include good
scale and a favorable market position as the third-largest
incumbent local exchange carrier in the U.S.; solid operating
margins and free operating cash flow generation; and modest growth
in high-speed data services, which helps mitigate revenue declines
from access-line losses," S&P said.
RATINGS LIST
CenturyLink Inc.
Corporate Credit Rating BB/Stable/B
New Ratings
Qwest Corp.
Senior notes due 2052 BBB-
Recovery Rating 1
CERAGENIX CORPORATION: Whistleblower's Malpractice Suit Shut Down
-----------------------------------------------------------------
Max Stendahl at Bankruptcy Law360 reports that U.S. Bankruptcy
Judge Sidney B. Brooks ruled Thursday that a former Ceragenix
Pharmaceuticals Inc. executive cannot bring malpractice claims
against an attorney who allegedly encouraged the Company to fire
him in retaliation for reporting insider trading.
Bankruptcy Law360 relates that Judge Brooks denied Carl Genberg's
May 11 motion for leave to pursue malpractice claims against
Boston-based attorney Marc Redlich. Ceragenix's Chapter 7 trustee
Jeanne Jagow declined to pursue the claims on her own, prompting
Genberg to file suit June 1 while the motion was pending.
Ceragenix Pharmaceuticals Inc. and its wholly-owned subsidiary
Ceragenix Corporation filed for Chapter 11 protection (Bankr. D.
Col. Lead Case No. 10-23821) on June 2, 2010. Ceragenix
Pharmaceuticals estimated less than $50,000 in assets and between
$1 million and $10 million in liabilities as of the Chapter 11
filing.
Steven T. Mulligan, Esq., at Bieging Shapiro & Burrus, represents
the Debtors in their Chapter 11 effort.
CHENIERE INC: S&P Raises Corporate Credit Rating to 'B+'
--------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Cheniere Energy Inc. (CEI) by two notches to 'B+' from
'B-' and the project rating of its subsidiary Sabine Pass LNG L.P.
(SPLNG) by two notches to 'BB+' from 'BB-'. The outlook is stable
and the recovery rating on SPLNG's senior secured project debt
remains unchanged at '2'.
"The ratings upgrade of CEI reflects its June repayment of $284.5
million in 2008 senior loans due 2018 with proceeds from equity
offerings totaling about $682 million since December 2011. The
remaining equity proceeds and reduced debt service resulting from
repayments of about $580 million in debt this year have
significantly improved CEI's liquidity position and we believe it
will be able to repay its $205 million convertible senior
unsecured notes by the August 2012 maturity. CEI's recent capital
market transactions indicate an improved ability to access capital
markets resulting from significant progress on the company's
liquefaction project at subsidiary Sabine Pass Liquefaction LLC
(SPL)," S&P said.
"The ratings upgrade of SPLNG reflects the CEI upgrade because we
cap SPLNG's rating at three notches above its ultimate parent
under our project finance criteria," said Standard & Poor's credit
analyst Mark Habib.
It also reflects the assumption by SPL of Cheniere Energy
Investments LLC's terminal use agreement with SPLNG, which will
provide SPLNG with cash flows from a stronger counterparty.
"The stable outlook reflects CEI's lower leverage and improved
liquidity. Upon repayment of CEI's convertible notes on or before
Aug. 1, 2012, we may withdraw the rating. If we maintain the
rating we expect to base it on a consolidated approach with CQP,
and do not expect it to rise until SPL nears operation and begins
cash distributions, improving CQP's credit profile. However, given
management's aggressive financial and growth policies in the past,
we do not anticipate raising the rating in the near term. We could
lower our rating if the SPL project has construction problems that
could reduce or delay distributions. We could also lower the
ratings if CQP or CEI significantly increase leverage or
aggressively pursue additional growth opportunities that could
keep our long-term forecast for consolidated debt to EBITDA above
5x," S&P said.
CHENIERE PARTNERS: S&P Assigns 'B+' Corporate Credit Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'B+'
corporate credit rating to Cheniere Energy Partners L.P. (CQP), a
master limited partnership (MLP) in the midstream energy sector.
The outlook on the rating is stable. "At the same time, we
assigned our preliminary 'B+' issue-level rating and a preliminary
'3' recovery rating to the proposed $750 million senior secured
term loan due 2018, indicating our assessment that secured
creditors can expect meaningful (50% to 70%) recovery if a payment
default occurs. The preliminary ratings are subject to our review
of executed documentation that includes terms that Cheniere has
represented and that we have included in our rating conclusion. We
have not reviewed executed documents, and the final ratings could
differ if any terms change materially," S&P said.
"The partnership will use the offering proceeds to partially fund
the purchase of the Creole Trail Pipeline from CQP's general
partner, Cheniere Energy Inc. (CEI; B+/Stable/--), for $300
million, and to fund upgrades to allow it to service SPL's natural
gas requirements with bidirectional flow capability. Pro forma for
the offering, CQP will have $750 million of total debt," S&P said.
"The preliminary ratings on CQP reflect a 'fair' business risk
profile and an 'aggressive' financial risk profile under our
criteria," said Standard & Poor's credit analyst Mark Habib. "The
partnership's fair business risk profile reflects our expectation
of stable cash flows from its Sabine Pass LNG L.P. (SPLNG;
BB+/Stable/--) regasification terminal, SPL's more substantial
future cash flows, and revenues from its Creole Trail Pipeline
acquisition. Both of CQP's subsidiary liquefied natural gas (LNG)
projects rely primarily on long-term, take-or-pay capacity-based
fee contracts with creditworthy counterparties that should provide
predictable distributions to CQP assuming SPL's construction is
completed on time and budget."
"The stable outlook reflects our expectation that CQP's financial
leverage and cash flows will likely remain weak for the next
several years, but its strong liquidity will help it maintain
operations and meet its obligations until the SPL project begins
to distribute cash and financial measures strengthen. We could
raise our ratings on CQP over time if construction at SPL is
completed, and CQP's financial position improves as a result.
However, we think a ratings upgrade is unlikely in the near term,
given the aggressive financial and growth policies that management
has displayed in the past. We could lower our ratings on CQP if
the SPL project encounters construction problems that could reduce
or delay distributions. We could also lower the ratings if CQP or
CEI significantly increase leverage or aggressively pursue growth
opportunities that could keep our long-term forecast for CQP's
debt to EBITDA above 5x," S&P said.
CHINA SHENGHUO: Liquidity Woes Raise Going Concern Doubt
--------------------------------------------------------
China Shenghuo Pharmaceutical Holdings, Inc., said in a regulatory
filing with the U.S. Securities and Exchange Commission its
consolidated current liabilities exceeded its consolidated current
assets by approximate US$23,974,000 as of March 31, 2012 and
US$23,189,000 as of Dec. 31, 2011. These factors and a capital
commitment, the Company said, raise substantial doubt about its
ability to continue as a going concern.
The Company said it will need, among other things, additional
capital resources. Management's plan is to obtain those resources
for the Company by seeking equity or debt financing by using
Shenghuo Plaza and the two new office buildings as mortgage
collateral after the Company has obtained Property Ownership
Certificate by late 2012. However, management cannot provide any
assurances that the Company will be successful in accomplishing
any of its plans.
"In the event we are not able to obtain funding, we will not be
able to implement or may be required to delay all or part of our
business plan, and our ability to attain profitable operations,
generate positive cash flows from operating and investing
activities and materially expand the business will be materially
adversely affected," the Company said.
As of March 31, 2012, the Company has a capital commitment of
US$5,688,051 for the second installment of purchasing land use
right for Xinglin International Health-Preserving Tourist Resort.
The amount is expected to be paid upon the requirement of the
Management Committee of Kunming Shilin Taiwan Farmer Entrepreneur
Centre.
In April 2012, the Company obtained a loan of RMB40 million
(approximately US$6 million) from Agricultural Bank of China for
working capital.
On April 17, the Company received a deficiency letter from NYSE
Amex LLC in the U.S. stating that the Company has resolved the
continued listing deficiency with respect to Section 1003(a)(i) of
the NYSE Amex's Company Guide referenced in NYSE Amex's letter
dated Sept. 22, 2010. However, as a result of the Company
sustaining losses which are so substantial in relation to its
overall operations or its existing financial resources, or its
financial condition has become so impaired that it appears
questionable, in the opinion of NYSE Amex, as to whether the
Company will be able to continue operations or meet its
obligations as they mature, the Company is no longer in compliance
with Section 1003(a)(iv) of the Company Guide. The Deficiency
Letter states that, in order to maintain its NYSE Amex listing,
the Company must submit a plan of compliance by May 1, 2012,
advising NYSE Amex how it intends to regain compliance with
Section 1003(a)(iv) of the Company Guide by July 2, 2012.
The Company notified NYSE Amex on April 20 of its intention to
suspend reporting requirements with the U.S. SEC. After
discussions between the Company's legal counsel and the SEC, the
SEC rejected the Company's move. Accordingly, the Company said it
will continue to be a reporting company until such time as it is
allowed to suspend its reporting obligations, which the Company
expects to be no later than the first quarter of 2013.
At March 31, 2012, the Company's balance sheet showed
US$66,111,873 in total assets, including $37,385,642 in current
assets, and $61,359,481 in total liabilities, all current. The
Company posted a net loss of $446,621 for the quarter ended March
31, 2012, from net income of $85,701 for the same period a year
ago.
A copy of the Company's Form 10-Q quarterly report filed with the
U.S. SEC for the three months ended March 31, 2012, is available
at http://is.gd/8dXxPZ
China Shenghuo Pharmaceutical Holdings, Inc., incorporated in
Delaware, in the U.S., through its subsidiaries, designs,
develops, markets, sells and exports pharmaceutical, nutritional
supplements, cosmetic products, and also engages in the hotel
operating business mainly in the People's Republic of China. The
Company also conducts research and development using the medicinal
herb Panax notoginseng, also known as Sanqi, Sanchi, or Tienchi,
which is grown in two provinces in the PRC. Sales from the
cosmetic products represent less than 10% of total sales of the
Company.
As of March 31, 2012, the CSPH owns a 94.95% equity interest in
Kunming Shenghuo Pharmaceuticals (Group) Co., Ltd. Shenghuo owns
a 100% equity interest in Kunming Shenghuo Medicine Co., Ltd.,
Kunming Pharmaceutical Importation and Exportation Co., Ltd., and
Kunming Shenghuo Cosmetics Co., Ltd.
On April 30, 2009, Shenghuo formed Shi Lin Shenghuo Co., Ltd., as
a wholly owned subsidiary, for the purpose of purchasing or
leasing land suitable for cultivating the medicinal herb Panax
notoginseng for use in the production of the Company's medicinal
products.
On Nov. 15, 2010, Shenghuo formed Kunming Shenghuo Hotel
Management Co., Ltd. According to the investment agreement with
an independent third party, Shenghuo holds 80% equity interest in
Hotel. Hotel was formed to run the hotel business.
Except for CSPH, all other entities are formed in and operate
within the PRC.
CINRAM INTERNATIONAL: Units Will be Delisted Effective July 16
--------------------------------------------------------------
Cinram International Income Fund reported that it has received
notice from the Toronto Stock Exchange that effective close of
business on July 16, 2012, its Trust Units, trading under the
symbol CRW.UN, will be delisted from the Toronto Stock Exchange.
The reason cited for the delisting is that the Fund no longer
meets the listing requirements of the Exchange.
The Fund is reviewing other alternatives in order to provide
holders of its Trust Units a venue for the trading of the Fund's
units,
About Cinram International
With headquarters in Toronto, Ontario, Canada, Cinram
International Inc. is one of the world's largest independent
manufacturers, replicators and distributors of DVDs and audio CDs.
In April 2012 Standard & Poor's Ratings Services lowered its
ratings on Cinram International, including its long-term corporate
credit rating on the company to 'CC' from 'CCC'. "We base the
downgrade on what we view as Cinram's weak liquidity position and
poor operating performance, with reported revenue and EBITDA
dropping 28% and 79% in 2011, compared with 2010, which resulted
in the company's need for waivers to its financial covenants.
Furthermore, Cinram is in discussions with a number of
counterparties concerning strategic alternatives for the business,
which we believe could lead to a debt restructuring given the
ongoing deterioration in its business. A distressed debt
restructuring would constitute an event of default under our
criteria," S&P said.
In May 2012, Cinram International Income Fund said that Cinram
Optical Discs SAS, a French subsidiary engaged in DVD replication,
has filed for insolvency.
CLEAR CHANNEL: Bank Debt Trades at 22% Off in Secondary Market
--------------------------------------------------------------
Participations in a syndicated loan under which Clear Channel
Communications, Inc., is a borrower traded in the secondary market
at 78.48 cents-on-the-dollar during the week ended Friday, June
15, an increase of 1.77 percentage points from the previous week
according to data compiled by Loan Pricing Corp. and reported in
The Wall Street Journal. The Company pays 365 basis points above
LIBOR to borrow under the facility. The bank loan matures on
Jan. 30,___, and carries Moody's Caa1 rating and Standard & Poor's
CCC+ rating. The loan is one of the biggest gainers and losers
among 137 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Friday.
About Clear Channel
San Antonio, Texas-based CC Media Holdings, Inc. (OTC BB: CCMO) --
http://www.ccmediaholdings.com/-- is the parent company of Clear
Channel Communications, Inc. CC Media Holdings is a global media
and entertainment company specializing in mobile and on-demand
entertainment and information services for local communities and
premier opportunities for advertisers. The Company's businesses
include radio and outdoor displays.
Clear Channel had a net loss of $143.63 million on $1.36 billion
of revenue for the three months ended March 31, 2012. It reported
a net loss of $302.09 million on $6.16 billion of revenue in 2011,
compared with a net loss of $479.08 million on $5.86 billion of
revenue in 2010. The Company had a net loss of $4.03 billion on
$5.55 billion of revenue in 2009.
The Company's balance sheet at March 31, 2012, showed $16.48
billion in total assets, $24.29 billion in total liabilities, and
a $7.80 billion total members' deficit.
At March 31, 2012, the Company had $20.7 billion of total
indebtedness outstanding.
Bankruptcy Warning
The Company said in its quarterly report for the period ended
March 31, 2012, that its ability to restructure or refinance the
debt will depend on the condition of the capital markets and the
Company's financial condition at that time. Any refinancing of
the Company's debt could be at higher interest rates and increase
debt service obligations and may require the Company and its
subsidiaries to comply with more onerous covenants, which could
further restrict the Company's business operations. The terms of
existing or future debt instruments may restrict the Company from
adopting some of these alternatives. These alternative measures
may not be successful and may not permit the Company or its
subsidiaries to meet scheduled debt service obligations. If the
Company and its subsidiaries cannot make scheduled payments on
indebtedness, the Company or its subsidiaries, as applicable, will
be in default under one or more of the debt agreements and, as a
result the Company could be forced into bankruptcy or liquidation.
* * *
The Troubled Company Reporter said on Feb. 10, 2012, Fitch Ratings
has affirmed the 'CCC' Issuer Default Rating of Clear Channel
Communications, Inc., and the 'B' IDR of Clear Channel Worldwide
Holdings, Inc., an indirect wholly owned subsidiary of Clear
Channel Outdoor Holdings, Inc., Clear Channel's 89% owned outdoor
advertising subsidiary. The Rating Outlook is Stable.
Fitch's ratings concerns center on the company's highly leveraged
capital structure, with significant maturities in 2014 and 2016;
the considerable and growing interest burden that pressures free
cash flow; technological threats and secular pressures in radio
broadcasting; and the company's exposure to cyclical advertising
revenue. The ratings are supported by the company's leading
position in both the outdoor and radio industries, as well as the
positive fundamentals and digital opportunities in the outdoor
advertising space.
CLEARWIRE CORP: Sprint Nextel Owns 57% of Class A Shares
--------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Sprint Nextel Corporation and its affiliates
disclosed that, as of June 8, 2012, they beneficially own
705,359,348 shares of class A common stock of Clearwire
Corporation representing 57% of the shares outstanding.
Sprint Nextel previously reported beneficial ownership of
627,945,914 Class A common shares or 58.1% of the shares
outstanding as of March 1, 2012.
A copy of the amended filing is available for free at:
http://is.gd/RtStOJ
About Clearwire Corporation
Kirkland, Wash.-based Clearwire Corporation (NASDAQ: CLWR)
-- http://www.clearwire.com/-- through its operating
subsidiaries, is a provider of 4G mobile broadband network
services in 68 markets, including New York City, Los Angeles,
Chicago, Dallas, Philadelphia, Houston, Miami, Washington, D.C.,
Atlanta and Boston.
The Company reported a net loss attributable to the Company of
$717.33 million in 2011, a net loss attributable to the Company of
$487.43 million in 2010, and a net loss attributable to the
Company of $325.58 million in 2009.
The Company's balance sheet at March 31, 2012, showed
$8.89 billion in total assets, $5.71 billion in total liabilities
and $3.17 billion in total stockholders' equity.
* * *
As reported by the TCR on Nov. 25, 2011, Standard & Poor's Ratings
Services lowered its corporate credit and senior secured first-
lien issue-level ratings on Bellevue, Wash.-based wireless
provider Clearwire Corp. to 'CCC' from 'CCC+'.
"The downgrade reflects our concerns that the company may choose
to skip its $237 million of interest payments due on Dec. 1,
2011," explained Standard & Poor's credit analyst Allyn Arden.
"With about $698 million of cash on the balance sheet, Clearwire
has sufficient funds to pay the remaining interest expense due in
2011, although Standard & Poor's believes that it would still have
to raise significant capital to maintain operations in 2012
despite the cost-reduction measures it has already achieved. If
Clearwire elected to make the interest payment, we believe that it
would exit 2011 with around $350 million to $400 million in cash,
which assumes less than $100 million of capital expenditures and
EBITDA losses. We do not believe that this cash balance will be
sufficient to cover free operating cash flow (FOCF) losses and
a Long-Term Evolution (LTE) wireless network overlay in 2012 and
that the company will require additional funding during the year."
CONTESSA PREMIUM: Claim Buyer Loses Bid for Higher Recovery
-----------------------------------------------------------
Bankruptcy Judge Peter Carroll denied the request of Riverside
Claims, LLC, for reconsideration of a prior order reducing
Riverside's allowed unsecured non-priority claim against Contessa
Premium Foods, Inc. Riverside acquired the claim in the amount of
$112,309 from Advantage Sales & Marketing. At the behest of
Contessa, the Court reduced the claim to $52,647. A copy of the
Court's June 13, 2012 Memorandum Decision is available at
http://is.gd/ZMj8CTfrom Leagle.com.
About Contessa Premium
San Pedro, California-based Contessa Premium Foods, Inc., fka ZB
Industries, Inc., and Contessa Food Products, Inc., provided farm-
raised shrimp, convenience meals, stir-fry vegetables, and other
frozen food products that were marketed and sold primarily in the
United States and to a lesser extent in Canada, Europe, Asia, and
Mexico.
Contessa Premium filed for Chapter 11 bankruptcy protection
(Bankr. C.D. Calif. Case No. 11-13454) on Jan. 26, 2011. Craig A.
Wolfe, Esq., and Jason R. Alderson, Esq., at Kelley Drye & Warren
LLP, in New York, represented the Debtor as counsel. Jeffrey N.
Pomerantz, Esq., and Jeffrey W. Dulberg, Esq., at Pachulski Stang
Ziehl & Jones LLP, in Los Angeles, served as conflicts counsel for
the Debtor. Scouler & Company, LLC, served as financial advisors.
Imperial Capital, LLC, acted as investment banker. Holthouse
Carlin & Van Trigt LLP served as auditors and accountants. The
Debtor scheduled $49,370,438 in total assets and $35,305,907 in
total liabilities.
The Official Committee of Unsecured Creditors in the Debtor's
Chapter 11 case was represented by Arent Fox LLP. FTI Consulting
Inc. served as its financial consultants.
Contessa Premium obtained authority from the Bankruptcy Court to
change its name to "Contessa Liquidating Co., Inc." following the
sale of substantially all of its assets to Premium Foods
Acquisition, Inc., for roughly $51,000,000 on Jul. 15, 2011.
As reported by the Troubled Company Reporter on March 9, 2012, the
Court confirmed Contessa's Second Amended Chapter 11 Plan of
Liquidation.
CORUS BANKSHARES: Trustee Targets Former Executives Over Demise
---------------------------------------------------------------
Max Stendahl at Bankruptcy Law360 reports that Corus Bankshares
Inc.'s liquidation trustee sued the real estate lender's former
top executives in Illinois federal bankruptcy court on Wednesday,
alleging their reckless lending practices brought about the
company's downfall.
Bankruptcy Law360 says Trustee Salvatore A. Barbatano launched an
adversary suit against Corus' former CEO Robert Glickman and
former chief financial officer Tim Taylor. The pair failed to
curtail Corus's large commercial real estate portfolio in 2007
despite signs of a total collapse in the housing market, the
adversary complaint alleges.
About Corus Bankshares
Chicago, Illinois-based Corus Bankshares, Inc., is a bank holding
company. Its lone operating unit, Corus Bank, N.A., was closed
on Sept. 11, 2009, by regulators, and the Federal Deposit
Insurance Corporation was named receiver. To protect the
depositors, the FDIC entered into a purchase and assumption
agreement with Chicago-based MB Financial Bank, National
Association, to assume all of the deposits of Corus Bank.
Corus Bankshares sought Chapter 11 protection (Bankr. N.D. Ill.
Case No. 10-26881) on June 15, 2010, disclosing $314,145,828 in
assets and $532,938,418 in liabilities as of the Chapter 11
filing.
Kirkland & Ellis LLP's James H.M. Sprayregen, Esq., David R.
Seligman, Esq., and Jeffrey W. Gettleman, Esq., serve as the
Debtor's bankruptcy counsel. Kinetic Advisors is the Company's
restructuring advisor. Plante & Moran is the Company's auditor
and accountant. Kilpatrick Stockton LLP's Todd Meyers, Esq., and
Sameer Kapoor, Esq.; and Neal Gerber & Eisenberg LLP's Mark
Berkoff, Esq., Deborah Gutfeld, Esq., and Nicholas M. Miller,
Esq., represent the official committee of unsecured creditors.
Corus Bankshares' Third Amended Plan of Reorganization has been
declared effective, and the Company emerged from Chapter 11
protection. The Court confirmed the Plan on Sept. 27, 2011.
CPI CORP: Tom Gallahue to Retire as EVP Operations
--------------------------------------------------
Tom Gallahue, the executive vice president, operations of CPI
Corp., communicated to the Company of his intention to retire from
his position with the Company effective June 30, 2012.
About CPI Corp
Headquartered in St. Louis, Missouri, CPI Corp. provides portrait
photography services at more than 2,500 locations in the United
States, Canada, Mexico and Puerto Rico and offers on location
wedding photography and videography services through an extensive
network of contract photographers and videographers. CPI's
digital format allows its studios and on location business to
offer unique posing options, creative photography selections, a
wide variety of sizes and an unparalleled assortment of
enhancements to customize each portrait - all for an affordable
price.
The Company reported a net loss of $56.86 million for the fiscal
year ended Feb. 4, 2012, compared with net income of $11.90
million for the fiscal year ended Feb. 5, 2011.
The Company's balance sheet at Feb. 4, 2012, showed $94.53 million
in total assets, $153.34 million in total liabilities and a $58.81
million total stockholders' deficit.
KPMG LLP, in St. Louis, Missouri, issued a "going concern"
qualification on the consolidated financial statements for the
period ended Feb. 4, 2012, noting that the Company has suffered a
significant loss from operations, is not in compliance with the
financial covenants under its credit agreement, and has a net
capital deficiency, all of which raise substantial doubt about its
ability to continue as a going concern.
DETROIT, MI: Moody's Lowers Rating on GOULT Bonds to 'B3'
---------------------------------------------------------
Moody's Investors Service has downgraded the City of Detroit's
(MI) General Obligation Unlimited Tax (GOULT) and Certificates of
Participation (COPs) ratings to B3 from B2 due to recent events
that have highlighted risks associated with the city's illiquid
cash position and lack of a clear political consensus to
successfully implement the city's Financial Stability Agreement
(FSA). Concurrently, Moody's has downgraded the city's General
Obligation Limited Tax (GOLT) rating to Caa1 from B3. The GO, COPs
and GOLT ratings remain on review for possible downgrade pending
completion of the sale of the Michigan Finance Authority's Local
Government Loan Program Revenue Bonds, Series 2012B (Second Lien)
and Series 2012C (Third Lien), along with the release of the
escrowed proceeds from a private placement loan with Bank of
America Merrill Lynch (BAML)(long term rated Baa1/ratings under
review for possible downgrade).
Moody's also downgraded the ratings for the Detroit Water and
Sewage Enterprise Revenue debt to Baa2 (Senior Lien) and Baa3
(Second Lien) as the risk of a city bankruptcy filing has
incrementally increased in light of persistent liquidity pressures
at the city level and ongoing political instability. This rating
action also applies to the Sewage Disposal System Revenue and
Revenue Refunding Senior Lien Bonds, Series 2012A. Ratings for the
Detroit Water and Sewage Enterprise Revenue Bonds remain under
review for possible downgrade pending the completion of the above
referenced Michigan Finance Authority sale along with the release
of the escrowed funds from the private placement with BAML. Also a
focus of the review is the continued uncertainty of how the water
and sewage systems would be treated in the event of a bankruptcy
filing by the city. Additionally, the sewage system ratings remain
under review for possible downgrade pending the successful
completion of the planned Series 2012A sale and successful
unwinding of the system's swap portfolio.
Summary Rating Action
Moody's Investors Service has downgraded the City of Detroit's
(MI) ratings as follows:
* $510.8 million of General Obligation Unlimited Tax Bonds to B3
from B2; ratings are under review for possible downgrade
* $520.2 million of Series 2005A and $948.5 million of Series
2006A and 2006B Certificates of Participation to B3 from B2;
ratings are under review for possible downgrade
* $453.4 million of General Obligation Limited Tax Bonds to Caa1
from B3; ratings are under review for possible downgrade
* $1.9 billion of Senior Lien Water Enterprise Revenue Bonds to
Baa2 from Baa1 and $642 million of Second Lien Water
Enterprise Revenue Bonds to Baa3 from Baa2; ratings are under
review for possible downgrade
* $1.9 billion of Senior Lien Sewage Enterprise Revenue Bonds to
Baa2 from Baa1 and $1.0 billion of Second Lien Sewage
Enterprise Revenue Bonds to Baa3 from Baa2; under review for
possible downgrade. This rating action also applies to the
Sewage Disposal System Revenue and Revenue Refunding Senior
Lien Bonds, Series 2012A.
WHAT COULD CHANGE THE GO & COPs RATINGS - UP
(or removal from review for downgrade)
- Successful completion of the city's planned financing with the
Michigan Finance Authority
- Release of funds held in escrow pursuant to the private
placement with BAML
- Material operating surpluses, achieved through structurally
balanced financial results that will carry forward to future
fiscal years
- Sustained economic improvement coupled with revenue
enhancements
- A material improvement in the city's unrestricted cash and
investment position such that the city continues to be less
dependent on cash flow borrowing and/or other cash management
strategies
- Improved liquidity and cash management such that the city's
ability to ensure timely debt service payments are not in
question
WHAT COULD CHANGE THE GO & COPs RATINGS - DOWN
- Inability for the city's to complete the planned financing
with the Michigan Finance Authority
- Severe general fund cash flow pressures for fiscal 2013 if the
state were to continue withholding funds held in escrow
pursuant to the private placement with BAML and divert state
aid to repay the bank
- Revenue challenges that continue to exceed expenditure (and
alternate revenue) solutions
- Continued operating deficits leading to heightened cash-flow
weakness
- Further increase of the city's leveraged position
- Economic performance which would be unable to sustain revenue
growth or revenue stability
- Increase in likelihood of either a bankruptcy filing or plan
to default on debt obligations
WHAT COULD CHANGE THE WATER SYSTEM RATINGS - UP
(or removal from review for downgrade)
- Successful completion of the city's planned financing with the
Michigan Finance Authority
- Release of funds held in escrow pursuant to the private
placement with Bank of America
- Statutory or other legal action to definitively remove the
system's assets from the estate of the city
- Stabilization or reversal of the city's trajectory towards
bankruptcy as the FSA is fully implemented
- Moderation of above average debt levels
- Increases in absolute current net revenue and improvement to
current debt service coverage levels
- A material improvement in the system's unrestricted cash and
investment position such that the city is better positioned to
meet unplanned draws on liquidity
WHAT COULD CHANGE THE WATER SYSTEM RATINGS - DOWN
- Inability for the city's to complete the planned financing
with the Michigan Finance Authority
- Severe general fund cash flow pressures for fiscal 2013 if the
state were to continue withholding funds held in escrow
pursuant to the private placement with BAML and divert state
aid to repay the bank
- City defaulting on debt or filing for bankruptcy
- Weak operating performance resulting in decreased debt service
coverage levels
- Further increased debt ratio
- Weakening of the service area through economic forces or
wholesale contract changes
WHAT COULD CHANGE THE SEWAGE SYSTEM RATINGS - UP
(or remove the rating from review)
- Successful completion of the city's planned financing with the
Michigan Finance Authority
- Release of funds held in escrow pursuant to the private
placement with Bank of America
- Statutory or other legal action to definitively remove the
system's assets from the estate of the city
- Stabilization or reversal of the city's trajectory towards
bankruptcy as the FSA is fully implemented
- Successful termination of system's outstanding swap agreements
- Moderation of above average debt levels
- Increases in absolute current net revenue and improvement to
current debt service coverage levels
- A material improvement in the system's unrestricted cash and
investment position such that the city is better positioned to
meet unplanned draws on liquidity
WHAT COULD CHANGE THE SEWAGE SYSTEM RATINGS - DOWN
- Inability to successfully close the Series 2012A sale and
unwind the system's swap portfolio
- Inability for the city's to complete the planned financing
with the Michigan Finance Authority
- Severe cash flow pressures for fiscal 2013 if the state were
to continue withholding funds held in escrow pursuant to the
private placement with BAML and divert state aid to repay the
bank
- City defaulting on debt or filing for bankruptcy
- Unscheduled swap termination payment coming due
- Weak operating performance resulting in decreased debt service
coverage levels
- Further increased debt ratio
- Weakening of the service area through economic forces or
wholesale contract changes
The principal methodology used in this rating was General
Obligation Bonds Issued by U.S. Local Governments published in
October 2009.
DEWEY & LEBOEUF: Agrees to Scrap Pension Plans in Deal With PBGC
----------------------------------------------------------------
Max Stendahl at Bankruptcy Law360 reports that Dewey & LeBoeuf LLP
agreed Wednesday to terminate its retirement plans in a settlement
in New York federal court with the Pension Benefit Guaranty Corp.,
which had claimed the plans were underfunded by more than $80
million.
U.S. District Judge Jesse M. Furman filed a consent order
terminating the three plans Wednesday evening, shortly after PBGC
announced that it had resolved its May 14 lawsuit against Dewey on
a consensual basis, according to Bankruptcy Law360.
About Dewey & LeBoeuf
New York-based law firm Dewey & LeBoeuf LLP sought Chapter 11
bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the
wind-down of its operations. The firm had struggled with high
debt and partner defections. Dewey disclosed debt of $245 million
and assets of $193 million in its chapter 11 filing late evening
on May 29, 2012.
Dewey & LeBoeuf was formed by the 2007 merger of Dewey Ballantine
LLP and LeBoeuf, Lamb, Greene & MacRae LLP. At its peak, Dewey
employed about 2,000 people with 1,300 lawyers in 25 offices
across the globe. When it filed for bankruptcy, only 150
employees were left to complete the wind-down of the business.
Dewey's offices in Hong Kong and Beijing are being wound down.
The partners of the separate partnership in England are in process
of winding down the business in London and Paris, and
administration proceedings in England were commenced May 28. All
lawyers in the Madrid and Brussels offices have departed. Nearly
all of the lawyers and staff of the Frankfurt office have
departed, and the remaining personnel are preparing for the
closure. The firm's office in Sao Paulo, Brazil, is being
prepared for closure and the liquidation of the firm's local
affiliate. The partners of the firm in the Johannesburg office,
South Africa, are planning to wind down the practice.
The firm's ownership interest in its practice in Warsaw, Poland,
was sold to the firm of Greenberg Traurig PA on May 11 for $6
million. The Pension benefit Guaranty Corp. took $2 million of
the proceeds as part of a settlement.
Judge Martin Glenn oversees the case. Albert Togut, Esq., at
Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy
Solutions LLC serves as claims and notice agent. The petition was
signed by Jonathan A. Mitchell, chief restructuring officer.
JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the
lenders under the Revolver Agreement, hired Kramer Levin Naftalis
& Frankel LLP. JPMorgan, as Collateral Agent for the Revolver
Lenders and the Noteholders, hired FTI Consulting and Gulf
Atlantic Capital, as financial advisors. The Noteholders hired
Bingham McCutchen LLP as counsel.
The U.S. Trustee formed two committees -- one to represent
unsecured creditors and the second to represent former Dewey
partners. The creditors committee hired Brown Rudnick LLP led by
Edward S. Weisfelner, Esq., as counsel. The Former Partners hired
Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt &
Winters, LLP, as counsel.
DIVERSINET CORP: KPMG Canada Raises Going Concern Doubt
-------------------------------------------------------
Diversinet Corp. will hold an annual and special meeting of
shareholders at its offices at 2235 Sheppard Avenue East, Suite
1700, in Toronto, Ontario, Canada, on June 28, 2012, 10:00 a.m.
Toronto time:
1. to consider and receive the financial statements of
the Company for the year ended Dec. 31, 2011, together
with the report of the auditors;
2. to elect directors;
3. to appoint auditors and authorize the directors to fix
their remuneration;
4. to consider and, if deemed advisable, approve the issuance
of up to 75,000 common shares to each non-management
Director as compensation;
5. to consider and, if deemed advisable, approve the
reservation of an additional 1,400,000 common shares of
the Company for issuance under an Amended and Restated
Stock Option Plan; and
6. to transact other business as may properly come before
the Meeting or any adjournments thereof.
KPMG LLP in Toronto, Canada, said in a Feb. 27, 2012 audit report
the Company incurred a significant loss from operations and used
significant amounts of cash in operating activities during 2011,
and there is substantial doubt about its ability to continue as a
going concern.
Diversinet has posted net losses in three of the past five years.
The Company reported a net loss of US$5,536,595 for the year ended
Dec. 31, 2011, from net income of US$1,867,074 in 2010 and
US$1,910,799 in 2009. For the years ended Dec. 31, 2011, 2010 and
2009, the Company reported revenues of US$1,292,000, US$4,932,000,
US$7,972,929, respectively.
As of Dec. 31, 2011, the Company had total assets of US$7,955,733
against total liabilities, all current, of US$783,133.
The Company does not currently have any debt financing from which
operations may be funded. The Company said should revenue from
operations, together with existing cash and cash equivalents,
prove inadequate to meet short-term working capital requirements
during the next 12 months, it may need to raise additional amounts
to meet working capital requirements, including through private or
public financings, strategic relationships or other arrangements.
Toronto, Ontario-based Diversinet Corp. develops, markets and
distributes mobile security infrastructure solutions and
professional services to the health services, financial services,
software security, and telecommunications marketplaces.
DM 668: Failed Buyer Not Entitled to Bargain Damages
----------------------------------------------------
Bankruptcy Judge A. Jay Cristol said the inability of a seller to
close does not automatically, by operation of law, mean that the
buyer is entitled to benefit of bargain damages. The Court
disallowed Claim 3 filed by Dr. Nader Afrooz and Daisy Afrooz in
the general unsecured sum of $1,053,854 plus interest and attorney
fees, against DM 668 LLC for the failed acquisition of condominium
units. The Debtor sold the Condominium for $6,250,000 to a third
party, not the Afroozes. However, the Afroozes did bid at the
sale. The Afroozes filed Claim 3 and sought "benefit of the
bargain" damages ($1,050,000), plus attorney fees and costs, based
upon the difference between the sale price of $6,250,000 and their
original offer price of $5,200,00000.
A copy of the Court's June 12, 2012 Order is available at __ from
Leagle.com.
James B. Miller, Esq. -- bkcmiami@gmail.com -- at JAMES B. MILLER,
P.A., in Miami, Florida, serves as the Debtor's counsel.
Thomas R. Lehman, Esq., and Amanda Quirke, Esq. -- trl@LKLlaw.com
and aq@LKLlaw.com -- at Levine Kellogg Lehman Schneider &
Grossman, LLP, in Miami, represent Dr. Nader and Daisy Afrooz.
DM 668 LLC filed a Chapter 11 bankruptcy petition (Bankr. S.D.
Fla. Case No. 09-33059) on Oct. 23, 2009. DM 668 LLC is a New
York entity, and is wholly owned by David Marvisi. The Debtor and
Michael Yaron are co-owners of Condominium Unit 3804 and
Condominium Unit 3805 and certain parking rights and appurtenances
thereto in a building known as the Continuum located in South
Beach.
DREIER LLP: Trustee Asks Court to Sanction Cochran Firm
-------------------------------------------------------
Amanda Bransford at Bankruptcy Law360 reports that the liquidating
trustee for Dreier LLP asked a New York bankruptcy court Wednesday
to sanction personal injury firm The Cochran Firm for evading a
discovery order and taking action in state court in violation of a
stay.
Bankruptcy Law360 relates that Trustee Sheila Gowan asked the
court to force Cochran and Professional Traders Management LLC to
comply with an order that they provide information related to a
fee for legal work Dreier performed before its sole partner, Marc
Dreier, was arrested for fraud in 2008.
About Marc Dreier and Dreier LLP
Marc Dreier founded New York-based law firm Dreier LLP --
http://www.dreierllp.com/-- in 1996. On Dec. 8, 2008, the U.S.
Securities and Exchange Commission filed a suit, alleging that Mr.
Dreier made fraudulent offers and sales of securities in several
cities, selling fake promissory notes to hedge and other private
investment funds. The SEC asserted that Mr. Dreier also
distributed phony financial statements and audit opinions, and
recruited accomplices in connection with that scheme. Mr. Dreier,
currently in prison, was charged by the U.S. government for
conspiracy, securities fraud and wire fraud (S.D.N.Y. Case No.
09-cr-00085).
Dreier LLP sought Chapter 11 protection (Bankr. S.D.N.Y. Case No.
08-15051) on Dec. 16, 2008. Stephen J. Shimshak, Esq., at Paul,
Weiss, Rifkind, Wharton & Garrison LLP, was tapped as counsel.
The Debtor estimated assets of $100 million to $500 million, and
debts between $10 million and $50 million in its Chapter 11
petition.
Sheila M. Gowan, a partner with Diamond McCarthy, was appointed
Chapter 11 trustee for the Dreier law firm. Ms. Gowan is
represented by Jason Porter, Esq., at Diamond McCarthy LLP.
Wachovia Bank National Association, the Dreier LLP Chapter 11
trustee, and Steven J. Reisman as post-confirmation representative
of the bankruptcy estate of 360networks (USA) Inc. signed a
petition that put Mr. Dreier into bankruptcy under Chapter 7 on
Jan. 26, 2009 (Bankr. S.D.N.Y. Case No. 09-10371). Mr. Dreier,
60, pleaded guilty to fraud and other charges in May 2009. The
scheme to sell $700 million in fake notes unraveled in late 2008.
Mr. Dreier is serving a 20-year sentence in a federal prison in
Minneapolis.
DYNEGY HOLDINGS: Proposes to Reject Houston Office Lease
--------------------------------------------------------
Dynegy Holdings LLC is asking the U.S. Bankruptcy Court for the
Southern District of New York for permission to reject a contract
with 1000 Louisiana LP.
The contract allows Dynegy Holdings to lease an office space at
Wells Fargo Plaza in Houston, Texas. The company leases floors
58, 60 and 61 of the office building. Dynegy Holdings no longer
uses the office space and wants the bankruptcy court authorize the
rejection of the lease effective June 1, 2012.
A court hearing to consider approval of the request is scheduled
for June 22. Objections are due by June 15.
About Dynegy Inc.
Through its subsidiaries, Houston, Texas-based Dynegy Inc.
(NYSE: DYN) -- http://www.dynegy.com/-- produces and sells
electric energy, capacity and ancillary services in key U.S.
markets. The power generation portfolio consists of approximately
12,200 megawatts of baseload, intermediate and peaking power
plants fueled by a mix of natural gas, coal and fuel oil.
In August, Dynegy implemented an internal restructuring that
created two units, one owning eight primarily natural gas-fired
power generation facilities and another owning six coal-fired
plants.
Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and
said it was discussing options for managing its debt load with
certain bondholders.
Dynegy Holdings LLC and four other affiliates of Dynegy Inc.
sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case
No. 11-38111) Nov. 7 to implement an agreement with a
group of investors holding more than $1.4 billion of senior notes
issued by Dynegy's direct wholly-owned subsidiary, Dynegy
Holdings, regarding a framework for the consensual restructuring
of more than $4.0 billion of obligations owed by DH. If this
restructuring support agreement is successfully implemented, it
will significantly reduce the amount of debt on the Company's
consolidated balance sheet.
Dynegy Holdings disclosed assets of $13.77 billion and debt of
$6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each
estimated $100 million to $500 million in assets and debt.
Dynegy Holdings and its affiliated debtor-entities are represented
in the Chapter 11 proceedings by Sidley Austin LLP as their
reorganization counsel. Dynegy and its other subsidiaries are
represented by White & Case LLP, who is also special counsel to
the Debtor Entities with respect to the Roseton and Danskammer
lease rejection issues.
Dynegy was advised by Lazard Freres & Co. LLC and the Debtor
Entities' financial advisor is FTI Consulting.
The Official Committee of Unsecured Creditors has tapped Akin Gump
Strauss Hauer & Feld LLP as counsel nunc pro tunc to November 16,
2011.
Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceeding undertaken
by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or
215/945-7000).
ENERGYSOLUTIONS INC: S&P Cuts Corporate Credit Rating to 'B'
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Salt Lake City-based EnergySolutions Inc. and its
subsidiaries by two notches to 'B' from 'BB-'. "At the same time,
we removed the ratings from CreditWatch, where we placed them on
June 12, 2012, with negative implications. We also lowered our
issue ratings on the senior secured credit facilities to 'BB-'
from 'BB+', and our ratings on the senior unsecured notes to 'B'
from 'BB-'. The recovery ratings on the secured credit facilities
remain unchanged at '1'. We revised the recovery rating on the
senior unsecured notes to '3' from '4', as the company reduced its
debt balances over the past year, resulting in slightly higher
recovery prospects for unsecured lenders. The '3' recovery rating
indicates our expectation of meaningful recovery (50% to 70%) in
the event of payment default," S&P said.
"The downgrade reflects weakening credit metrics and the added
uncertainty stemming from the unexpected change in management
since the company's strategic and financial priorities are now
less clear," said Standard & Poor's credit analyst James Siahaan.
"The company last changed CEOs relatively recently, in 2010, and
it remains to be seen whether the new management will be able to
execute on its growth objectives while maintaining a commitment to
improving credit quality. The downgrade also reflects the
increased probability that weaker-than-expected operating results
will result in a ratio of adjusted funds from operations (FFO) to
debt in the 10% to 12% area instead of the 15% to 20% that we had
previously expected. As of March 31, 2012, the company's FFO to
debt was 12% and the timing of improvement in the nuclear waste
disposal operating environment remains uncertain."
"Shipments of low-level radioactive waste to the company's
disposal site in Clive, Utah, have been lower than we expected.
Although we anticipated government-related waste volumes would
decline this year because certain projects that relied on stimulus
funding would not recur, the magnitude of the decline has been
greater and weaker commercial volumes have compounded matters, as
waste generators have opted to store the volumes on their own
sites. In addition, benefits from cost reduction initiatives may
take longer to achieve than we originally thought," S&P said.
"Other areas of concern relate to the company's decommissioning of
Exelon Generation Co. LLC's (BBB/Stable/A-2) Zion 1 and 2 nuclear
reactors in Illinois. Although the company asserts that the
project is ahead of schedule, the difference between the values of
the company's nuclear decommissioning trust fund assets (NDT) and
its asset retirement obligation (ARO) for the Zion decommissioning
is quite low, at less than $6 million as of March 31, 2012.
Although this difference has improved slightly from $2.6 million
as of Dec. 31, 2011, such low values increase the risk that the
project's profitability could decline. The difference was greater
as of Sept. 30, 2011, and Sept. 30, 2010, at $84 million and $121
million, respectively, as NDT balances were higher and cost
estimates for the Zion ARO were lower than what were ultimately
realized. The company has already lowered its profit estimates
related to the Zion decommissioning, as management reduced its
estimated operating margins on the Zion decommissioning project to
5% to 10% from 10% to 15%. In addition, the company has indicated
that the returns on the 10-year project are not likely to exceed
the company's capital costs, and that its value to the company is
mainly strategic, as a representation of the company's capability
to successfully execute upon a long-term license stewardship
contract as opposed to being accretive from a return on capital
standpoint," S&P said.
"The ratings on EnergySolutions reflect the company's 'highly
leveraged' financial risk profile that incorporates significant
debt and its 'weak' business risk profile characterized by the
operational risks associated with participating in the highly
regulated low-level radioactive waste (LLRW) industry, including
competitive contract bidding. The company's leading market
position in the specialized niche of nuclear waste services,
limited competition in primary service areas, and reasonable free
cash flow generation partially offset these factors," S&P said.
"The negative outlook reflects our view that business and
management uncertainties could cause EnergySolutions' operating
results to underperform our base case expectations for 2012. The
company's operating results have become increasingly variable and
difficult to predict, but we expect weaker volumes and operating
margins in 2012, with the company not realizing the bulk of
profitability until the fourth quarter. Despite this, we expect
the company to generate moderate, though weaker, free cash flow,
as working capital swings and capital expenditures tend to be
manageable. This should support future cash outlays and adequate
liquidity. Still, we could lower the ratings if liquidity and cash
flow generation deteriorate meaningfully because of unexpected
business challenges or underperformance of the NDT. Based on our
scenario forecasts, we could lower the rating if revenues contract
by 10% from 2011 and operating margins weaken to less than 6.5%.
At this point, FFO to total adjusted debt could decrease to less
than 10%. We could also lower the ratings if unexpected cash
outlays or aggressive financial policy decisions reduce the
company's liquidity or stretch the financial profile beyond
current debt leverage levels," S&P said.
"Although we do not expect to do so any time soon, we could raise
the ratings modestly if the FFO to total adjusted debt ratio
returns to 15% and remains there. We would also look for
management to express prudent views with regard to its future
strategic and financial policy decisions related to growth,
acquisitions, and shareholder rewards," S&P said.
ENGILITY CORP: Moody's Assigns 'B1' CFR; Outlook Stable
-------------------------------------------------------
Moody's Investors Service has assigned initial ratings to Engility
Corporation, including B1 Corporate Family and Probability of
Default ratings. Engility will be spun-off of L-3 Communications
Holdings, Inc.("L-3"), and will raise debt of $450 million to fund
a dividend to L-3 at separation. A low initial debt to revenue
ratio of only 34% supports the rating because Moody's thinks that
defense service contractors will face margin pressure in coming
years as tighter federal procurement practices take hold. Also,
Engility's revenues will likely decline as U.S. troops prepare to
leave Afghanistan by 2014. The rating outlook is stable.
Ratings are:
Corporate Family, assigned at B1
Probability of Default, assigned at B1
$100 million first lien revolver due 2017, assigned at Ba1 LGD2,
18%
$200 million first lien term loan due 2017, assigned at Ba1
LGD2, 18%
$250 million senior unsecured notes due 2019, assigned at B2
LGD5, 75%
Speculative Grade Liquidity, assigned at SGL-2
Outlook is Stable.
Ratings Rationale
The B1 CFR reflects a beginning debt to EBITDA ratio (LTM 6/30/12
and proforma for the dividend to L-3) of just over 3x and Moody's
expectation of positive near-term free cash flow against an
unfavorable business environment for defense services contractors,
one where Engility's falling earnings trend since 2009 will
continue -- minimally into 2013 with a reasonably good likelihood
for better stability then. Moody's expects that debt to EBITDA
will rise to about 4x by year-end on both weaker revenues and
EBITDA margin since the number of U.S. troops in-theatre is
winding down.
Beyond 2012, bidding opportunities will open up for Engility that
could boost backlog, but execution on several challenging
initiatives will also be crucial to stem the earnings decline.
Separation from L-3 will widen the range of Engility's bidding
opportunities because ownership by L-3 brought organizational
conflicts of interest that discouraged some potential customers
and in some cases precluded bid proposals. Yet Engility will also
need to restructure its operations to become more operationally
streamlined and competitive, notably through lower overhead rates.
Possession of lower overhead has become a competitive imperative
of late for defense service contractors as fiscal austerity is
causing more price-focused task award decisions by procurement
officers. Lower overhead will be needed to prevent further loss of
contracts and better position the company to win task orders and
contract re-competes in coming years. The achievement of lower
overhead will be tested as the company is concurrently expected to
add marketing staff to broaden its bidding pool and will incur
costs to develop stand-alone information and human resource
systems to migrate from the transition services arrangement with
L-3. Further, although Engility possesses good credentials for
mission-oriented services support work, such as translation,
logistics and law enforcement support services internationally for
the DoD, the more likely buyers of such services in the future are
the U.S. Department of State or other internationally focused
organizations. Establishing deeper marketing inroads to these
communities could take time while other players already possess
strong ties there. The low beginning debt load helps prospects for
credit resiliency as Engility navigates this executionally
challenging set of objectives during its early years independent
from L-3.
The more challenging environment for defense services contracting
ahead and the need for growth as a public company also could
encourage Engility to debt fund acquisitions of businesses that
add commercial or federal civilian agency contracts. But Moody's
does not expect that Engility will heavily utilize its revolver
for acquisition financing and Moody's anticipates that
acquisitions will be incremental in size and funded mainly through
internal cash flow.
Moody's views the liquidity profile to be good as denoted by the
speculative grade liquidity rating of SGL-2. Moody's expects near-
term positive free cash flow, enough to cover the quarterly term
loan amortization of $5 million beginning in 2013 and quarterly
interest of about $8 million. Current tax needs could be material
but Moody's expects low capital spending near-term. Although the
revolver's $100 million size is not large against the revenue
base, Moody's does not think that much revolver dependence will
develop. Sufficient covenant compliance headroom will initially
exist; headroom could get tighter in 2013 if cost reduction
initiatives prove hard to achieve, however. Little in the way of
alternative liquidity will exist since virtually all assets will
be pledged to secured creditors.
The rating outlook is stable. Good liquidity and low beginning
debt should provide Engility enough maneuvering room to generate
some early free cash flow and start growing its backlog. The
falling earnings trend since 2009 may continue beyond 2012 but
Moody's thinks the degree of erosion should abate, permitting debt
to EBITDA in the 4x range. Low capital intensity also helps free
cash flow prospects.
The Ba1 ratings on the first lien debts, three notches above the
CFR, reflects their favorable recovery prospects (LGD-2, 18%) that
Moody's would expect in a stress scenario, pursuant to Moody's
Loss Given Default Methodology. The presence of the large senior
unsecured debt class would offer loss-absorption benefit in a
stress scenario, thereby helping first-lien recovery prospects.
Upward rating momentum would depend on expectation of debt to
EBITDA remaining below 4x with a growing backlog, steady free cash
flow generation and good liquidity. Downward rating pressure would
mount with diminishing covenant headroom, debt to EBITDA above 5x
or low free cash flow generation.
The principal methodology used in rating Engility was the Global
Aerospace and Defense Industry Methodology published in June 2010.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Following the spin-off from L-3 Communications Holdings, Inc.,
Engility Corporation, a provider of systems engineering services,
training, program management and operational support for the U.S.
Government worldwide, will be the main subsidiary of Engility
Holdings, Inc. Engility Holdings, Inc. had 2011 revenues of $2
billion.
ENGILITY CORP: S&P Gives 'BB-' Corp. Credit Rating; Outlook Stable
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' corporate
credit rating to Chantilly, Va.-based Engility Corp. The outlook
is stable.
"We also assigned 'BB+' issue-level and '1' recovery ratings to
Engility's proposed $300 million senior secured credit facilities,
which consist of a $100 million revolving credit facility and a
$200 million term loan, both due 2017. The '1' recovery rating
indicates our expectations for very high (90%-100%) recovery in
the event of payment default," S&P said.
"Additionally, we assigned 'BB-' issue-level and '3' recovery
ratings to the company's proposed $250 million senior unsecured
notes due 2019. The '3' recovery rating indicates our expectations
for meaningful (50%-70%) recovery in the event of payment
default," S&P said.
Ratings are based on preliminary documentation and are subject to
review of final documents.
"The company intends to use proceeds of the debt issuance to pay a
special cash dividend to its parent, L-3," S&P said.
"The rating on Engility reflects the company's long-standing
relationship with the Department of Defense (DoD) and other key
U.S. government agencies and high recurring revenue on its
contracts unrelated to the Iraq and Afghanistan wars,' said
Standard & Poor's credit analyst David Tsui. At the same time,
Standard & Poor's expectation that the U.S. government contracting
industry will be increasingly competitive and that U.S. government
budget pressures will continue to intensify," S&P said.
"We view the company's business risk profile as 'weak' as we
consider the headwinds faced by the company related to the U.S.
federal government budget reductions and drawdown in overseas
contingency missions, and the risk associated with Engility's
transition to a stand-alone company from L-3," added Mr. Tsui.
"The outlook is stable, reflecting our expectations for the
company's revenue to decline to the $1.6 billion in 2012, but with
an expected modest revenue growth trajectory in the intermediate
term as a result of new revenue generation from Iraq and
Afghanistan-related contingency operations already at a low level.
Although unlikely in the near term, we could raise the rating if
the company develops a track record as a stand-alone entity,
executes on its strategy as a lower cost provider, and generates
organic growth in its business that is unrelated to overseas
contingency missions in Iraq and Afghanistan, leading to a higher
EBITDA base and adjusted leverage sustained in the low-3x area,"
S&P said.
"We could lower the rating, however, if the company can't generate
new business to offset contract losses from the expected $1.6
billion level in 2012, such that adjusted leverage is sustained in
excess of 4x. We could also lower the rating if there is a shift
in financial policy that allows for significant debt-financed
acquisitions, or an aggressive share repurchase or dividend policy
post spin-off from L-3," S&P said.
FARMERS BANK: Closed; Clayton Bank and Trust Assumes All Deposits
-----------------------------------------------------------------
The Farmers Bank of Lynchburg in Lynchburg, Tenn., was closed on
Friday, June 15, by the Tennessee Department of Financial
Institutions, which appointed the Federal Deposit Insurance
Corporation as receiver. To protect the depositors, the FDIC
entered into a purchase and assumption agreement with Clayton Bank
and Trust, Knoxville, Tennessee, to assume all of the deposits of
The Farmers Bank of Lynchburg.
The four branches of The Farmers Bank of Lynchburg will reopen
during their normal business hours as branches of Clayton Bank and
Trust, including the one branch that operates as First State Bank,
Chapel Hill, Tenn., and the two branches that operate as Oakland
Deposit Bank, Oakland, Tenn. Depositors will automatically become
depositors of Clayton Bank and Trust. Deposits will continue to
be insured by the FDIC, so there is no need for customers to
change their banking relationship in order to retain their deposit
insurance coverage up to applicable limits. Customers of The
Farmers Bank of Lynchburg should continue to use their existing
branch until they receive notice from Clayton Bank and Trust that
it has completed systems changes to allow other Clayton Bank and
Trust branches to process their accounts as well.
As of March 31, 2012, The Farmers Bank of Lynchburg had
approximately $163.9 million in total assets and $156.4 million in
total deposits. Clayton Bank and Trust will pay the FDIC a
premium of 0.10 percent to assume all of the deposits of The
Farmers Bank of Lynchburg. In addition to assuming all of the
deposits of the failed bank, Clayton Bank and Trust agreed to
purchase essentially all of the assets.
Customers with questions about the transaction should call the
FDIC toll-free at 1-800-774-8035. Interested parties also can
visit the FDIC's Web site at
http://www.fdic.gov/bank/individual/failed/farmersbank.html
The FDIC estimates that the cost to the Deposit Insurance Fund
will be $28.3 million. Compared to other alternatives, Clayton
Bank and Trust's acquisition was the least costly resolution for
the FDIC's DIF. The Farmers Bank of Lynchburg is the 31st FDIC-
insured institution to fail in the nation this year, and the third
in Tennessee. The last FDIC-insured institution closed in the
state was Tennessee Commerce Bank, Franklin, on Jan. 27, 2012.
FIFTH & PACIFIC: Moody's Affirms B2 CFR, Rates EUR53MM Notes B2
---------------------------------------------------------------
Moody's Investors Service changed Fifth & Pacific Companies, Inc.
("FNP") Speculative Grade Liquidity rating to SGL-2 from SGL-3.
Moody's also upgraded the rating on the company's EUR53 million
notes due 2013 to B2 from Caa1. The company's B2 Corporate Family
and Probability of Default ratings were affirmed as well as the B2
rating on FNP's $372 million senior secured notes due 2019. The
rating outlook remains stable.
The following ratings were affirmed (and LGD assessments amended)
Corporate Family Rating at B2
Probability of Default Rating at B2
$372 million senior secured notes due 2019 at B2 (LGD 4, 54%)
The following ratings were upgraded:
Speculative Grade Liquidity rating to SGL-2 from SGL-3
EUR53 million notes due 2013 to B2 (LGD 4, 54%) from Caa1 (LGD
6, 91%)
Ratings Rationale
The change in the Speculative Grade Liquidity rating to SGL-2 from
SGL-3 primarily reflects the improvement in the company's overall
liquidity following completion of the sale of $152 million (face
amount) of additional senior secured notes due 2019. Proceeds will
be used to repay approximately $37 million drawn under the
company's (unrated) asset based revolver, to tender for the
remaining EUR 53 million of senior unsecured notes due 2013 and to
fund the buyout of FNP's joint venture partner in Kate Spade
Japan.
The upgrade of the company's EUR 53 million notes due 2013
reflects that these notes are now secured with the same guarantees
and collateral that secure the company's 2019 secured notes,
including the first liens on the domestic trademarks for Juicy
Couture, Lucky Brand Jeans and kate spade. The company has
commenced a tender offer to redeem all remaining 2013 notes and
Moody's expects it will withdraw the rating on these notes when
they are redeemed.
FNP's B2 Corporate Family Rating reflects its still sizable debt
burden despite recent asset sales. Debt/EBITDA remains in the mid
five times range and EBITDA less capital expenditures remains
insufficient to fully cover cash interest costs. The ratings also
reflect the negative recent trends at its Juicy Couture brand. The
rating is supported by the company's good overall liquidity
profile The rating also reflects the strong growth at kate spade
and Moody's expectations its growth will continue, as well as
expectations meaningful reductions in corporate overhead can be
achieved over the course of 2012 and into 2013.
The SGL-2 Speculative Grade Liquidity rating reflects the
company's good overall liquidity at the current time. Moody's
expects the company will be able to fund the redemption of its
remaining 2013 Euro notes from available cash now that it has
closed the sale of the additional secured notes due 2019. The SGL-
2 rating also reflects the company's access to the asset based
revolver which has a significant amount of excess capacity (in
excess of $200 million as of 3/31/12).
The stable rating outlook reflects Moody's expectation that FNP
will continue to have high leverage and moderate interest
coverage, but that interest coverage will improve as earnings
recover. The stable outlook also incorporates Moody's expectations
the company will make meaningful reductions in corporate overhead
over the course of 2012.
Ratings could be upgraded if FNP is able to reverse negative
trends at Juicy Couture, retain a good liquidity profile, and
improves interest coverage. Quantitatively, ratings could be
upgraded if EBITDA less capital expenditures/interest rises above
1.75 times.
Ratings could be lowered if Juicy Couture's negative trends
persist and/or it appears that the company will report a
consolidated operating loss over the course of 2012.
The principal methodology used in rating Fifth & Pacific was the
Global Apparel Industry Methodology published in May 2010. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
GENOIL INC: Won't Be Profitable in Next 12 Months
-------------------------------------------------
Genoil Inc. said in a regulatory filing with the U.S. Securities
and Exchange Commission it is not expected to be profitable during
the ensuing 12 months and therefore must rely on securing
additional funds from either issuance of debt or equity financing
for cash consideration.
The Company also said its use of cash may increase in the future
as it expands operations to meet near term business opportunities.
The Company will continue to review the prospects of raising
additional debt and equity financing to support its operations
until such time that its operations become self-sustaining. While
the Company is expending its best efforts to achieve its plans,
there is no assurance that any such activity will generate
sufficient funds for operations.
As reported by the Troubled Company Reporter on June 8, 2012,
Genoil reported a net loss of C$416,405 for the three months ended
March 31, 2012, compared with a net loss of C$1.47 million for the
same period during the prior year. The Company's balance sheet at
March 31, 2012, showed C$4.51 million in total assets, C$4.72
million in total liabilities and a C$210,368 deficit.
Genoil reported a net loss of C$1,758,748 for the year ended Dec.
31, 2011, compared with a net loss of C$7,856,827 for the same
period during the prior year. The Company's balance sheet at Dec.
31, 2011, showed C$4,570,764 in total assets, C$4,469,425 in total
liabilities.
MNP LLP in Calgary, Alberta, in an April 30, 2012 audit report
said there exists a material uncertainty that may cast significant
doubt on the Company's ability to continue as a going concern.
In its Annual Report for the year ended Dec. 31, 2011, the Company
said at Dec. 31, 2011, it has a working capital deficiency of
C$3,300,571 (2010 - C$2,225,854) and for the year ended Dec. 31,
2011 has incurred a loss of C$1,758,748 (2010 - C$7,856,827).
"The ability of the Company to continue as a going concern is in
substantial doubt and is dependent on achieving profitable
operations, commercializing its technologies, and obtaining the
necessary financing in order to develop these technologies
further. The outcome of these matters cannot be predicted at this
time. The Company will continue to review the prospects of raising
additional debt and equity financing to support its operations
until such time that its operations become self-sustaining, to
fund its research and development activities and to ensure the
realization of its assets and discharge of its liabilities. While
the Company is expending its best efforts to achieve the above
plans, there is no assurance that any such activity will generate
sufficient funds for future operations," the Annual Report said.
During 2011, the Company received net cash proceeds of C$1,853,941
pursuant to financing activities.
About Genoil Inc.
Genoil Inc. is a technology development company based in Alberta,
Canada. The Company has developed innovative hydrocarbon and oil
and water separation technologies.
The Company specializes in heavy oil upgrading, oily water
separation, process system optimization, development, engineering,
design and equipment supply, installation, start up and
commissioning of services to specific oil production, refining,
marine and related markets.
GRUBB & ELLIS: Plan Filing Exclusivity Extended to Sept. 30
-----------------------------------------------------------
BankruptcyData.com reports that the U.S. Bankruptcy Court approved
Grubb & Ellis' motion for an extension of the exclusive period
during which the Company can file a plan of reorganization and
solicit acceptances thereof through and including September 30,
2012 and November 30, 2012, respectively.
According to the Company, "The Debtors have been communicating
regularly and working cooperatively with counsel for BGC and the
Committee, as well as other major constituents in these cases.
Additionally, the Debtors timely filed their Schedules and
Statements of Financial Affairs, an enormous undertaking for all
17 debtor entities. In light of the Debtors' progress in the first
100 days of these cases, an extension of the Exclusive Periods is
warranted. Such an extension is necessary to provide the Debtors
with the time needed to complete the transition of the business to
BGC and to allow for the Bar Date to pass. The Debtors will
thereafter be able to formulate, in consultation with the
Creditors Committee, a Chapter 11 plan, reconcile claims, and
otherwise conclude the administration of these cases."
About Grubb & Ellis
Grubb & Ellis Company -- http://www.grubb-ellis.com/-- is a
commercial real estate services and property management company
with more than 3,000 employees conducting throughout the United
States and the world. It is one of the oldest and most recognized
brands in the industry.
Grubb & Ellis and 16 affiliates filed for Chapter 11 bankrutpcy
(Bankr. S.D.N.Y. Lead Case No. 12-10685) on Feb. 21, 2012, to sell
almost all its assets to BGC Partners Inc. The Santa Ana,
California-based company disclosed $150.16 million in assets and
$167.2 million in liabilities as of Dec. 31, 2011.
Judge Martin Glenn presides over the case. The Debtors have
engaged Togut, Segal & Segal, LLP as general bankruptcy counsel,
Zuckerman Gore Brandeis & Crossman, LLP, as general corporate
counsel, and Alvarez & Marsal Holdings, LLC, as financial advisor
in the Chapter 11 case. Kurtzman Carson Consultants is the claims
and notice agent.
BGC Partners, Inc., and its affiliate, BGC Note Acquisition Co.,
L.P., the DIP lender and Prepetition Secured Lender, are
represented in the case by Emanuel C. Grillo, Esq., at Goodwin
Procter LLP.
On March 27, 2012, the Court approved the sale to BCG. An auction
was cancelled after no rival bids were submitted. Pursuant to the
term sheet signed by the parties, BGC would acquire the assets for
$30.02 million, consisting of a credit bid the full principal
amount outstanding under the (i) $30 million credit agreement
dated April 15, 2011, with BGC Note, (ii) the amounts drawn under
the $4.8 million facility, and (iii) the cure amounts due to
counterparties. BGC would also pay $16 million in cash because
the sale was approved by the March 27 deadline. Otherwise, the
cash component would have been $14 million.
Approval of the sale was simplified when BGC settled with
unsecured creditors by increasing their recovery.
Several parties in interest have taken an appeal from the sale
order.
HANLEY-WOOD: Bank Debt Trades at 46% Off in Secondary Market
------------------------------------------------------------
Participations in a syndicated loan under which Hanley-Wood is a
borrower traded in the secondary market at 53.75 cents-on-the-
dollar during the week ended Friday, June 15, an increase of 3.75
percentage points from the previous week according to data
compiled by Loan Pricing Corp. and reported in The Wall Street
Journal. The Company pays 225 basis points above LIBOR to borrow
under the facility. The bank loan matures on Aug. 1, 2012. The
loan is one of the biggest gainers and losers among 137 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
Headquartered in Washington, DC, Hanley Wood is a business-to-
business media company serving customers in the residential
housing and commercial construction end markets. Revenues for the
twelve month period ended June 30, 2009, were $170 million.
HAWKER BEECHCRAFT: Creditors Committee Retains Advisors
-------------------------------------------------------
BankruptcyData.com reports that Hawker Beechcraft Acquisition
Company's official committee of unsecured creditors filed with the
U.S. Bankruptcy Court motions to retain:
-- FTI Consulting (Contact: Matthew Diaz) as financial
advisor for a fixed monthly fee of $200,000 and a
$1 million completion fee; and
-- Crowe & Dunlevy (Contact: Preston G. Gaddis, II) as
special federal aviation administration counsel at
these hourly rates: shareholders and director at $250
to $535, of counsel at $230 to $475, associate at $190
to $235 and paraprofessional at $105 to $197.50.
About Hawker Beechcraft
Hawker Beechcraft Acquisition Company, LLC, headquartered in
Wichita, Kansas, manufactures business jets, turboprops and piston
aircraft for corporations, governments and individuals worldwide.
Hawker Beechcraft reported a net loss of $631.90 million on
$2.43 billion of sales in 2011, compared with a net loss of
$304.30 million on $2.80 billion of sales in 2010.
Hawker Beechcraft Inc. and 17 affiliates filed for Chapter 11
reorganization (Bankr. S.D.N.Y. Lead Case No. 12-11873) on May 3,
2012, having already negotiated a plan that eliminates $2.5
billion in debt and $125 million of annual cash interest expense.
The plan, to be filed by June 30, will give 81.9% of the new stock
to holders of $1.83 billion of secured debt, while 18.9% of the
new shares are for unsecured creditors. The proposal has support
from 68% of secured creditors and holders of 72.5% of the senior
unsecured notes.
Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and
49%-owned by Onex Corp. The Company's balance sheet at Dec. 31,
2011, showed $2.77 billion in total assets, $3.73 billion in total
liabilities and a $956.90 million total deficit. Other claims
include pensions underfunded by $493 million.
Hawker's legal representative is Kirkland & Ellis LLP, its
financial advisor is Perella Weinberg Partners LP and its
restructuring advisor is Alvarez & Marsal. Epiq Bankruptcy
Solutions LLC is the claims and notice agent.
Sidley Austin LLP serves as legal counsel and Houlihan Lokey
Howard & Zukin Capital Inc. serves as financial advisor to the DIP
Agent and the Prepetition Agent.
Wachtell, Lipton, Rosen & Katz represents an ad hoc committee of
senior secured prepetition lenders holding 70% of the loans.
Milbank, Tweed, Hadley & McCloy LLP represents an ad hoc committee
of holders of the 8.500% Senior Fixed Rate Notes due 2015 and
8.875%/9.625% Senior PIK Election Notes due 2015 issued by Hawker
Beechcraft Acquisition Company LLC and Hawker Beechcraft Notes
Company. The members of the Ad Hoc Committee -- GSO Capital
Partners, L.P. and Tennenbaum Capital Partners, LLC -- hold claims
or manage accounts that hold claims against the Debtors' estates
arising from the purchase of the Senior Notes. Deutsche Bank
National Trust Company, the indenture trustee for senior fixed
rate notes and the senior PIK-election notes, is represented by
Foley & Lardner LLP.
An Official Committee of Unsecured Creditors appointed in the case
has selected Daniel H. Golden, Esq., and the law firm of Akin Gump
Strauss Hauer & Feld LLP as legal counsel.
HEALTHWAYS INC: S&P Affirms 'BB-' Counterparty Credit Rating
------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' long-term
counterparty credit rating on Nashville, Tenn.-based Healthways
Inc. (NASDAQ: HWAY), and then withdrew the rating at the company's
request.
"The rating actions follow Healthways's announcement on June 11,
2012, that it completed refinancing its senior credit facilities
(which were set to expire in December 2013) with new (unrated)
facilities consisting of a new $200 million five-year term loan A
and a $200 million five-year revolving credit facility," S&P said.
"The rating actions incorporate our review of the company's year-
to-date performance and our expectations for the rest of 2012,"
said Standard & Poor's credit analyst James Sung. "The company's
revenues and earnings for 2012 are being weighed down by the
gradual wind-down of the Cigna contract (its largest client) and
by the implementation costs and delayed revenues of new, large-
scale contracts. Although revenues could increase in 2012, we
don't expect operating margin expansion until 2013, at the
earliest. However, our rating affirmation considered that the
company's relative debt leverage and coverage metrics were
adequate for the rating."
"Prior to the rating withdrawal, we had a stable outlook on
Healthways. This outlook reflected our expectations for Healthways
to achieve 2012 revenues of $665 million to $705 million (versus
$688.8 million in 2011), EBITDA of $85 million to $100 million
(versus $126.5 million in 2011), and an EBITDA margin of 12% to
15% (down from historical levels closer to 20%). In addition, our
outlook assumed that Healthways would be able to maintain credit
metrics in the general range of a debt-to-EBITDA ratio of 3x to
4x, a debt-to-capital ratio of 45% to 50%, EBITDA coverage of at
least 6x, and a funds from operations-to-debt ratio of 20% to
30%," S&P said.
HERTZ CORPORATION: DBRS Affirms 'BB' Issuer Rating
--------------------------------------------------
DBRS, Inc. has commented that the ratings of Hertz Corporation
(Hertz or the Company), including its Issuer Rating of BB, are
unaffected following the Company's announcement of 1Q12 financial
results. The ratings remain Under Review Developing, where they
were placed on May 16, 2011.
Hertz's results evidence the impact of the strengthening U.S.
economy and the benefits of managements cost control initiatives
and strategic investments for growth. For the quarter, Hertz
reported a loss before tax, on a GAAP basis, of $36.8 million as
compared to a pre-tax loss of $158.9 million a year ago. On an
adjusted basis, excluding such items as restructuring charges,
non-cash debt charges and acquisition related costs, Hertz
reported pre-tax income of $29.4 million, a record for the first
quarter, compared to a pre-tax loss of $16.0 million in 1Q11. The
quarter's results reflect a 10.7% increase in worldwide revenues,
excluding the effects of foreign currency movements, to $2.0
billion. Revenue growth was underpinned by record first quarter
revenues in worldwide rental car, which increased 10.3%, excluding
FX movements, to $1.7 billion driven by good transaction growth in
both the U.S. on-airport and off-airport businesses. Moreover,
revenue expansion was supported by a 13.4% improvement, excluding
FX movements, in worldwide equipment rental revenue to $302.1
million reflecting the Company's efforts to penetrate new markets
as well as higher transaction volumes as more companies turn to
renting versus buying equipment in an uncertain environment.
The results were supported by lower fleet costs demonstrating the
Company's solid fleet management acumen. Fleet costs benefited
from the still healthy used vehicle market, the Company's focus on
disposing of risk-vehicles in higher return retail channels, and
the strategic purchase and rotation of fleet. Despite the U.S.
fleet increasing 8% year-on-year, U.S. vehicle depreciation per
unit for the quarter totaled $249 per month, 11.4% lower than a
year ago. As a result, U.S. car rental adjusted pre-tax margins
improved by 240 basis points year-on-year to 10.7%. DBRS views
positively that the improvement in revenue generation and margins
were achieved, while Hertz continues to invest in the expansion of
its off-airport business and Advantage brand demonstrating that
operating costs remain under control.
By operating segment, Global Car Rental generated adjusted pre-tax
income of $91.6 million, an increase of 49% year-on-year. Results
were underpinned by a 10% (yoy) increase in transaction volumes,
which more than offset the slight decline in revenue per day
(RPD). U.S. off-airport demand continues to demonstrate solid
growth with volumes increasing 11% year-on-year. As a result,
off-airport accounts for 26.4% of U.S. car rental revenue,
illustrating Hertz's success in broadening the revenue base.
International Car Rental reported acceptable performance although
revenues were modestly lower from last year. For the quarter,
Hertz Equipment Rental Corporation (HERC) generated adjusted pre-
tax income of $25.9 million, a notable 154% increase over 2011, on
the aforementioned revenue growth. Nevertheless, given the
uncertainties as to the strength and sustainability of the global
economic recovery, DBRS remains cautious regarding further
improvement in the operating environment.
Hertz's liquidity and funding profile remains acceptable supported
by good access to the markets. During 1Q12, Hertz issued $250
million of corporate debt, the proceeds of which, along with
corporate liquidity, were utilized to redeem the Company's
highest-rate U.S. and Euro notes due in 2014. DBRS notes Hertz
has no sizable corporate or fleet debt maturities in 2012.
Corporate liquidity at quarter-end totaled a respectable $1.5
billion.
The ratings remain Under Review Developing reflecting Hertz's
ongoing discussions with the Federal Trade Commission (FTC)
regarding antitrust clearance for a potential acquisition of
Dollar Thrifty Automotive Group, Inc. (DTAG). The review status
considers DBRS's view that a potential acquisition of DTAG would
be a long-term positive for Hertz strengthening the Company's
overall franchise. While DBRS notes that there are certain
uncertainties regarding this potential transaction, including the
lack of a signed definitive merger agreement between the
companies, the transaction would combine two complementary
businesses: Hertz with its strong presence in the premium and
corporate travel segment, and DTAG, with its solid position in the
value-oriented leisure travel segment. Conversely however, DBRS
sees potential risks in this transaction especially should the
purchase price increase resulting in increased leverage, which in
turn would weaken the Company's financial profile and be less
accretive. Should a final consent order be received and a deal
progress with a final purchase price and financing composition
become more certain, DBRS will complete its review assessing the
impact on Hertz's franchise, risk profile, capital structure, and
its earnings generation ability. Also, DBRS will continue to
monitor the structure of the purchase, the actual level of net
debt incurred, goodwill and the ultimate impact on leverage.
Furthermore, the review status also considers DBRS's view that the
upside potential offered by the transaction may be muted should
industry fundamentals deteriorate.
HOLOGIC INC: S&P Affirms 'BB' Corp. Credit Rating; Off Watch Neg
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB' corporate
credit rating on Bedford, Mass.-based Hologic Inc. The rating was
removed from CreditWatch, where it was placed with negative
implications April 30, 2012. The rating outlook is stable.
"We rated the company's new secured credit facility (composed of a
$1 billion tranche A term loan due 2017, a $2 billion tranche B
term loan due 2019, and a $300 million revolver due 2017) 'BBB-'
with a recovery rating of '1', indicating expectations of very
high (90% to 100%) recovery of principal in the case of a payment
default. We also rated a new $500 million senior unsecured note
issue 'BB' with a recovery rating of '4', indicating a average
(30% to 50%) recovery of principal," S&P said.
"Because of this new debt ahead of the existing subordinated
convertible notes in Hologic's capital structure, we revised our
recovery rating on the convertible notes to '6', indicating our
expectation of negligible (0% to 10%) recovery for noteholders in
the event of a payment default, from '3' (50% to 70% recovery
expectation). We lowered our issue rating on these notes to 'B+',
two notches lower than the 'BB' corporate credit rating, in
accordance with our notching criteria for a recovery rating of
'6'," S&P said.
"We base our assessment of Hologic's business and financial risk
profiles on our expectations for cash flow and the company's solid
positions in narrow markets," said Standard & Poor's credit
analyst Cheryl Richer.
"We expect increasing acceptance of Hologic's newer Dimensions 3-D
tomosynthesis system and the launch of Gen-Probe Inc.'s new
analytical instrument 'Panther' to propel revenues to about $2.7
billion by 2013. With expanding high-margined sales, we expect
free operating cash flow (FOCF) to reach about $700 million in
2013. This cash flow, and the flexibility it provides for debt
repayment, is a key consideration in a financial risk profile that
is 'aggressive,' in our view. The 'fair' business risk profile
still considers the company's strong, defensible positions in
narrow markets as a key factor," S&P said.
"The stable outlook is underpinned by our expectation that
leverage will quickly fall, bringing credit measures in line with
an aggressive financial risk profile. Although we believe it
unlikely, slower-than-expected acceptance of Gen-Probe's new
Panther diagnostic instrument or slowing sales of Hologic's
Dimensions mammography systems could pressure revenues and margins
enough to significantly delay this leverage reduction. We estimate
that a 300-bp decline in gross margins would reduce EBITDA such
that debt to EBITDA would stay above 5x by year-end 2013," S&P
said.
"We could raise the rating if the benefits of an expanded product
offering were apparent in more rapidly growing sales and
decreasing leverage, such that debt to EBITDA remained below 4x.
However, this is likely to only manifest after the one-year span
of an outlook," S&P said.
INERGETICS INC: Deficit, Net Losses Raise Going Concern Doubt
-------------------------------------------------------------
Inergetics Inc., formerly Millennium Biotechnologies Group Inc.,
said it has a working capital deficit, significant debt
outstanding, incurred substantial net losses for the three months
ended March 31, 2012 and 2011 and has accumulated a deficit of
roughly $78 million at March 31, 2012. The Company has not been
able to generate sufficient cash from operating activities to fund
its ongoing operations. There is no guarantee that the Company
will be able to generate enough revenue or raise capital to
support its operations. Inergetics said these factors raise
substantial doubt about its ability to continue as a going
concern.
Inergetics said management believes they can raise the appropriate
funds needed to support their business plan and develop an
operating company which is cash flow positive.
Inergetics reported wider net loss of $1,648,898 for the three
months ended March 31, 2012, from a net loss of $885,829 for the
same period a year ago. As of March 31, 2012, the Company had
total assets of $1,632,043 against total liabilities of
$6,518,158.
A copy of the Company's quarterly report filed on Form 10-Q, as
amended, for the quarter ended March 31, 2012, is available at
http://is.gd/8PUWo9
Inergetics, Inc., formerly Millennium Biotechnologies Group, Inc.,
is a holding company for subsidiary Millennium Biotechnologies,
Inc. Paramus, New Jersey-based Millennium is a research based
bio-nutraceutical corporation involved in the field of nutritional
science. Its principal source of revenue is from sales of its
nutraceutical supplements, Resurgex Select(R) and Resurgex
Essential(TM) and Resurgex Essential Plus(TM) which serve as a
nutritional support for immuno-compromised individuals undergoing
medical treatment for chronic debilitating diseases. Millennium
has developed Surgex for the sport nutritional market. Its
efforts going forward will focus on sales of Surgex in powder, bar
and ready to drink forms.
The Company changed its name to Inergetics on March 15, 2010.
INTERLINE BRANDS: S&P Keeps 'BB' Corp. Credit Rating on Watch Neg
-----------------------------------------------------------------
Standard & Poor's Ratings Services' ratings on Jacksonville, Fla.-
based Interline Brands Inc., including its 'BB' corporate credit
rating, remain on CreditWatch, where it placed them with negative
implications on May 30, 2012. "The CreditWatch listing indicates
the rating could be lowered following the completion of our
analysis," S&P said.
"The CreditWatch listing follows Interline's announcement that it
had entered into a definitive agreement for affiliates of GS
Capital Partners LP and P2 Capital Partners LLC (not rated) to
acquire the company, in a leveraging transaction valued at
approximately $1.1 billion, including the assumption of debt. In
its 8-K published May 29, 2012, the company indicated that it had
obtained the equity and debt financing commitments for the
transaction, including a $369 million equity contribution, a $250
million senior secured asset-based revolving credit facility, a
$303 million senior unsecured bridge facility at the operating
company, and a $375 million senior unsecured bridge facility to be
held at the holding company," S&P said.
"Based on our initial analysis, we have determined that if the
transaction is completed as currently proposed, we would lower the
corporate credit rating on Interline Brands Inc. to 'B+' from
'BB'. The rating outlook would be stable," S&P said.
"The lower rating would reflect the company's weaker credit
metrics following the increase in debt to support the
acquisition," said Standard & Poor's credit analyst Megan
Johnston. "Our base-case scenario for 2012 assumes that
Interline's revenue growth will be in the mid-single digit area,
given declining vacancy rates and increasing rents among
multifamily REITs, a key market for Interline. However, we
previously assumed that leverage would be about 3x by year-end
2012, given approximately $300 million of existing balance sheet
debt. As a result of the significant increase in debt associated
with the leveraged recapitalization, leverage will likely rise to
about 6x by year-end 2012 and about 5.5x by year-end 2013, which
we believe to be more in line with an 'aggressive' financial risk
profile and a lower rating," S&P said.
"Assuming the transaction is completed as currently proposed, we
would assign a 'B-' rating to Interline's proposed $375 million
senior unsecured notes, two notches below the expected corporate
credit rating, with a recovery rating of '6', indicating our
expectation for negligible (0% to 10%) recovery in the event of
payment default. We would also lower the rating on Interline's
existing $300 million senior subordinated notes to 'B+', the same
as the expected corporate credit rating. The recovery rating on
the existing notes would remain '4', indicating our expectation
for average (30% to 50%) recovery in the event of payment
default," S&P said.
"Interline acts primarily as a distributor and direct marketer of
broad-line maintenance, repair, and operations (MRO) products that
serve facilities maintenance, specialty distributors, and
professional contractor markets. Interline competes against
numerous local and regional distributors, a handful of national
players--some of which are significantly larger and financially
stronger--and other traditional sales channels, including retail
outlets and large warehouse stores," S&P said.
"We expect to resolve our CreditWatch listing upon completion of
GS Capital Partners LP and P2 Capital Partners LLC's proposed
acquisition of Interline," S&P said.
JASMINE AT ORLANDO: Files for Chapter 11 in Miami; Seeks Cash Use
-----------------------------------------------------------------
Jasmine at Orlando East, LLC, filed a Chapter 11 petition (Bankr.
S.D. Fla. Case No. 12-24621) on June 15, 2012 in Miami.
The Debtor owns a multi-family apartment development containing
296 units contained in 32 two-story buildings located on 19.64
acres located in Orlando, Florida. The Debtor estimated assets
and liabilities of $10 million to $50 million.
The Debtor financed its acquisition of its Florida properties
through, inter alia, a $12.9 million acquisition loan provided by
Lehman Brothers Holdings Inc. d/b/a Lehman Capital, a Division of
Lehman Brothers Holdings Inc. The loan has been assigned to
LaSalle Bank National Association, as trustee for certain
commercial mortgage pass-through certificates.
The Debtor on the petition date filed motions to condition the use
of cash collateral and continue administering its insurance
policies. A hearing is scheduled for June 20, 2012 at 10:00 a.m.
In its request to use cash collateral, the Debtor said the lender
will be adequately protected because the Debtor's use of cash
collateral will preserve the value of the property for the benefit
of not only the Debtor but the lender as well by facilitating the
Debtor's financial rehabilitation.
JOHN HAMILTON: Bankruptcy Counsel Disqualified
----------------------------------------------
Bankruptcy Judge J. Rich Leonard denied separate requests for
appointment of a chapter 11 trustee in the Chapter 11 case of John
Glass Hamilton, Sr. The Bankruptcy Administrator and Kimberly
Nifong Mitchell's ex-husband, Brian Keesee, made the requests.
The Court, however, granted the BA's request to disqualify Mr.
Hamilton's bankruptcy counsel.
Mr. Hamilton and Ms. Mitchell are both represented by Oliver
Friesen Cheek, PLLC. The Court held that in the two weeks prior
to Ms. Mitchell's filing, she was involved in a transaction with
Mr. Hamilton through an LLC in which he is a 50% owner. The Court
said there may be legal defects in the way the deal was structured
that need to be seriously investigated.
Mr. Hamilton is Ms. Mitchell's listing agent on her real property
located at 1108 W. Yacht Dr. Ms. Mitchell's property management
company, Better Beach Rentals, Inc., acts as management company
for Mr. Hamilton's rental real property.
On Nov. 4, 2011, Ms. Mitchell executed a North Carolina General
Warranty Deed conveying two pieces of real property to JP Double H
Properties, LLC. That same day Ms. Mitchell executed a North
Carolina Gift Deed conveying one piece of real property to JPDHP.
Both deeds were recorded with the Brunswick County Register of
Deeds on Nov. 7. The tax stamps on the warranty deed reflected a
sales price of $640,000, and the tax stamps on the gift deed
reflected a sales price of $0.
Mr. Hamilton filed a voluntary chapter 11 petition (Bankr.
E.D.N.C. Case No. 11-07491) on Sept. 30, 2011.
Ms. Mitchell filed a voluntary Chapter 11 petition (Bankr.
E.D.N.C. Case No. 11-08880) on Nov. 21, 2011.
A copy of the Court's June 14, 2012 Order is available at
http://is.gd/dFGNOLfrom Leagle.com.
KIMBERLY MITCHELL: Bankruptcy Counsel Disqualified
--------------------------------------------------
Bankruptcy Judge J. Rich Leonard denied separate requests for
appointment of a chapter 11 trustee in the Chapter 11 case of
Kimberly Nifong Mitchell. The Bankruptcy Administrator and Ms.
Mitchell's ex-husband, Brian Keesee, made the requests.
The Court, however, granted the BA's request to disqualify Ms.
Mitchell's bankruptcy counsel.
Ms. Mitchell is represented by Oliver Friesen Cheek, PLLC, which
also serves as counsel to John Hamilton, who filed a voluntary
chapter 11 petition (Bankr. E.D.N.C. Case No. 11-07491) on Sept.
30, 2011.
The Court held that in the two weeks prior to Ms. Mitchell's
filing, she was involved in a transaction with Mr. Hamilton
through an LLC in which he is a 50% owner. The Court said there
may be legal defects in the way the deal was structured that need
to be seriously investigated.
Mr. Hamilton is Ms. Mitchell's listing agent on her real property
located at 1108 W. Yacht Dr. Ms. Mitchell's property management
company, Better Beach Rentals, Inc., acts as management company
for Mr. Hamilton's rental real property.
On Nov. 4, 2011, Ms. Mitchell executed a North Carolina General
Warranty Deed conveying two pieces of real property to JP Double H
Properties, LLC. That same day Ms. Mitchell executed a North
Carolina Gift Deed conveying one piece of real property to JPDHP.
Both deeds were recorded with the Brunswick County Register of
Deeds on Nov. 7. The tax stamps on the warranty deed reflected a
sales price of $640,000, and the tax stamps on the gift deed
reflected a sales price of $0.
Ms. Mitchell filed a voluntary Chapter 11 petition (Bankr.
E.D.N.C. Case No. 11-08880) on Nov. 21, 2011.
A copy of the Court's June 14, 2012 Order is available at
http://is.gd/3mIpb5from Leagle.com.
KIOWA POWER: S&P Affirms 'BB-' Rating on $73.5-Mil. Secured Bonds
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BBB-' rating on
Kiowa Power Partners LLC's (KPP) $642 million senior secured bonds
due in 2013 and 2021. "We also affirmed our 'BB-' rating on
Tenaska Oklahoma I L.P.'s (TOILP) $73.5 million senior secured
bonds due 2014. Tenaska Oklahoma pays debt with distributions from
KPP. The outlook on both ratings is negative," S&P said.
"The ratings reflect our view that the project now has greater
certainty regarding its property tax assessment," said Standard &
Poor's credit analyst Grace Drinker.
"This year, the company resolved a property tax valuation dispute
on the generation facility with the county, settling on taxation
levels for 2009 through 2011 based on an average property value of
$419 million. This results in taxes that average approximately
230% of the original forecast for the disputed years. We assume
that the property will continue to be valued at this level," S&P
said.
"The negative outlook reflects our view of increased near-term
cash flow volatility resulting from increased operating risk,
based on a history of operating issues at the plant," S&P said.
KODI KLIP: Financial Woes Cue Chapter 11 Bankruptcy Filing
----------------------------------------------------------
Based in Lebanon, Tennessee, Kodi Klip Corporation filed for
Chapter 11 protection on June 1, 2012 (Bankr. M.D. Tenn. Case No.
12-05132). Robert L. Scruggs, Esq., represents the Debtor.
Nevin Batiwalla, staff reporter at Nashville Business Journal,
reports that Kodi Klip listed between $1 million and $10 million
in both assets and liabilities. Among the company's largest
unsecured creditors are Solidus CO LP of Nashville for $486,000,
STELAC SPV VII LLC of New York City for $500,000 and Lee Beaman of
Nashville for $234,000.
The report says founder Jon Kodi said the Company fell behind
paying back investors due to delays in research and development
that kept its products off the sales market. "We were needing
some additional time, an extension of a few months, and they were
not wanting to do that without trying to leverage the company,"
The report quotes Mr. Kodi as saying. "They wanted to take
additional stock and have control of the board. It's what we
viewed as a takeover move."
LDK SOLAR: Deficit, Covenant Violation Raise Going Concern Doubt
----------------------------------------------------------------
KPMG in Hong Kong, China, said in a May 15, 2012 audit report
there is substantial doubt on the ability of LDK Solar Co., Ltd.
to continue as a going concern. According to KPMG, the Group has
a net working capital deficit and is restricted to incur
additional debt as it has not met a financial covenant ratio under
a long-term debt agreement as of Dec. 31, 2011. These conditions
raise substantial doubt about the Group's ability to continue as a
going concern.
A unit, LDKHF, has outstanding borrowings of US$15,871,000 from
Bank of Communication. The loan contains a financial covenant
that specifies that if LDKHF's debt to asset ratio exceeds 80% or
the net profit to revenue ratio is below 2% -- which is calculated
based on its financial statements prepared under generally
accepted accounting policies in the People's Republic of China --
Bank of Communication may take actions as defined in the borrowing
agreement, including but limited to the demand of immediate
repayment of the outstanding borrowing balance. As of Dec. 31,
2011, LDKHF's debt to asset ratio was 80.2% and the net profit to
revenue ratio was negative 10.2%. LDKHF has obtained a waiver
letter dated May 15, 2012 from Bank of Communication confirming
that it will not require LDK HF to repay the outstanding
borrowings prior to maturity date or provide additional pledge or
collateral as a result of the breach of above financial covenants.
LDKHF's outstanding debt of US$2,185,000 from Agricultural Bank of
China also specifies that if LDKHF's debt to asset ratio exceeds
75% -- which is calculated based on its financial statements
prepared under PRC GAAP -- Agricultural Bank of China may take
actions, including but limited to the demand of immediate
repayment of the outstanding borrowing balance. Agricultural Bank
of China has the right to accelerate the borrowings in accordance
with the borrowing agreements, but to date, LDKHF has not received
any notice of event of default or any threat to accelerate the
stated maturity of the borrowings.
Another unit, JXLDK, is required under its US$25,000,000
outstanding long-term borrowings from China Development Bank not
to allow debt to asset ratio to exceed 75% or the current ratio
not to exceed 0.7. As of Dec. 31, 2011, JXLDK's debt to asset
ratio was 80% and the current ratio was 0.83.
LDK is also operating under a working capital deficit. As of Dec.
31, 2009, 2010 and 2011, the Company had a working capital deficit
-- total consolidated current liabilities exceeds total
consolidated current assets -- of $833.6 million, $1,602.4 million
and $2,099.4 million.
LDK incurred a net loss of $234.0 million and $609.0 million,
respectively, for the years ended Dec. 31, 2009 and 2011 although
it generated a net profit of $296.5 million for the year ended
Dec. 31, 2010.
As of Dec. 31, 2011, LDK had cash and cash equivalents of $244.1
million, majority of which was held by subsidiaries in China.
As of Dec. 31, 2011, the Group has total revolving credit of
US$4,153,881,000 and unused credit of US$1,650,126,000, which it
can draw upon. LDK had short-term borrowings and current
installments of long-term borrowings totaling $2,032.0 million as
of Dec. 31, 2011, most of which were the obligations of the
Chinese subsidiaries.
LDK said it has been negotiating with a number of vendors,
including suppliers of equipment and construction materials, for
them to provide the Company with lower prices or more favorable
payment terms in order to achieve cost savings. LDK also has
decided to postpone a substantial portion of planned capital
expenditures for the next 12 months, and implemented measures to
more closely monitor inventory levels and collection of receivable
balances with an aim to improving liquidity.
From Jan. 1 to April 30, 2012, LDK has obtained additional secured
and unsecured short-term bank borrowings in the aggregate
principal amount of $924.3 million with interest rates ranging
from 2.484% to 9.500% and secured and unsecured long-term bank
borrowings in the aggregate principal amount of $45.3 million with
interest rates ranging from 5.900% to 7.050% (subject to
repricing). It has repaid short-term borrowings and current
installments of long-term borrowings in the aggregate principal
amount of $937.0 million during this period.
LDK believes it will be able to obtain additional facilities from
the banks so that, together with its existing bank revolving
facilities, it will be able to re-finance any bank loans due for
repayment within the next 12 months to the extent necessary.
As of Dec. 31, 2011, the Company had total assets of $6,853.8
million. Total liabilities amounted to $6,009.2 million, with
outstanding short-term borrowings (including current installments
of long-term borrowings) and short-term PRC notes at $2,095.5
million, and outstanding long-term borrowings (excluding current
installments) and long-term PRC notes at $969.8 million.
A copy of the Company's Annual Report on Form 20-F, as amended,
for the fiscal year ended Dec. 31, 2011, is available at
http://is.gd/FHe6vX
About LDK Solar
LDK Solar Co., Ltd. -- http://www.ldksolar.com-- based in Hi-Tech
Industrial Park, Xinyu City, Jiangxi Province, People's Republic
of China, is a vertically integrated manufacturer of photovoltaic
products, including high-quality and low-cost polysilicon, solar
wafers, cells, modules, systems, power projects and solutions.
LDK Solar was incorporated in the Cayman Islands on May 1, 2006,
by LDK New Energy, a British Virgin Islands company wholly owned
by Xiaofeng Peng, LDK's founder, chairman and chief executive
officer, to acquire all of the equity interests in Jiangxi LDK
Solar from Suzhou Liouxin Industry Co., Ltd., and Liouxin
Industrial Limited.
LEE BRICK: Files for Chapter 11 in Wilson, North Carolina
---------------------------------------------------------
Sanford, North Carolina-based Lee Brick & Tile Company filed a
bare-bones Chapter 11 petition (Bankr. E.D.N.C. Case No. 12-04463)
on June 15, 2012, in Wilson on June 15.
The Debtor estimated assets and debts of $10 million to
$50 million. Capital Bank is owed $13.00 million, of which
$6.5 million is secured.
According to the case docket, schedules and statements and other
incomplete filings are due July 24, 2012.
A meeting of creditors under 11 U.S.C. Sec. 341(a) is set for July
24, 2012 at 10:00 a.m.
Lee Brick -- http://www.leebrick.com/-- began its operations in
1951 after Hugh Perry and 10 local businessmen from Lee County
decided three years prior to invest in the business of
brickmaking. In the late 1950's Hugh Perry bought out the
investing partners, making Lee Brick a solely owned and operated
family company. Hugh Perry named his son Frank president in 1970,
which he served until 1999 and currently serves as CEO. Since
1999 Don Perry succeeded his father and serves as the company's
president. Frank Perry, along with his sons Don and Gil, and
brother-in-law JR (rad) Holton have helped guide the family
business through revolutionary changes in brick manufacturing that
few people in the ceramic industry could have ever anticipated.
LKQ CORP: S&P Affirms 'BB+' CCR on Sustainable Positive Earnings
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' corporate
credit rating on LKQ Corp. The outlook is stable.
"We revised our assessment of the company's financial risk profile
to intermediate from significant to reflect the company's strong
liquidity and our expectation that leverage will decline to about
2x in the year ahead," said Standard & Poor's credit analyst Nancy
Messer. "The ratings on Chicago-based LKQ Corp. reflect the
company's intermediate financial risk profile, with positive free
cash flow, and its fair business risk profile with consistent
double-digit EBITDA margins. It also reflects a strategy of growth
through acquisitions, including those overseas."
"Our stable outlook on LKQ reflects our assumption that its
resilient business model will support continuing organic EBITDA
expansion and free cash generation, despite the sluggish economic
outlook. It also reflects our belief that LKQ will fund
acquisitions in a manner consistent with our expectation that key
credit measures--which weakened with the recent acquisition of
ECP--will improve by year-end 2013 through earnings growth and
debt reduction with cash from operations. At the current rating,
we expect LKQ to achieve and sustain lease-adjusted leverage of 2x
or less and lease-adjusted FFO to total debt of 30% in the year
ahead," S&P said.
"The likelihood of an upgrade is limited by LKQ's business risk
profile, including its ongoing business strategy of rapid growth
through acquisitions. For an upgrade to an investment-grade
rating, we would need to reassess LKQ's business risk profile as
'satisfactory.' Absent an improvement in the business risk
assessment, we are less likely to raise the rating, since we would
need to come to believe that LKQ's credit measures would improve
such that lease-adjusted leverage falls to 1.5x and FFO to total
debt reaches 45% on a sustainable basis. For the 12 months ended
March 31, 2012, leverage stood at 2.7x and FFO to total debt was
29%. To raise the rating from the current level, we would also
need to believe LKQ's strategic business and financial policies
and capital structure would be consistent with an investment-grade
rating," S&P said.
"We could lower the ratings if LKQ's EBITDA fell 10% or more below
our estimate of $546 million for 2012 (per our calculation)--
because of operating problems, loss of business, or other adverse
market conditions such as an unfavorable change in how the auto
insurance industry chooses to fulfill collision claims--if these
events led to minimal free cash flow. LKQ's EBITDA for the 12
months ended March 31, 2012 reached $482 million. We estimate that
EBITDA at this lower level would cause leverage to exceed 2.5x for
2012," S&P said.
"We could also lower the ratings if LKQ undertakes another
material debt-financed acquisition in the year ahead, or if there
was a change in financial policy because of an altered strategy
for business operations or shareholder value creation," S&P said.
LUMBER PRODUCTS: Court OKs Sussman Shank as Chapter 11 Attorneys
----------------------------------------------------------------
Lumber Products sought and obtained permission from the U.S.
Bankruptcy Court to employ the firm Sussman Shank LLP as its
attorneys to provide professional services in connection with the
administration of the Chapter 11 case.
Robert L. Carlton, Esq., at Sussman Shank LLP, disclosed payments
received from the Debtor or a third party for services rendered on
the Debtor's behalf:
02/14/12 $38,452 which included payment of $3,452
from November 2011 billings and $35,000
retainer;
02/27/12 Payment of $831;
03/20/12 Retainer applied $17,085;
04/10/12 Retainer of $40,000;
04/11/12 Balance of retainer 57,915 and current
billings due approximately $36,222;
Retainer applied to fees of roughly $36,222.
The firm attests that it has no connection with the Debtor's
creditors or any other adverse party or its attorneys, except
that:
-- it represented Wachovia Bank on several matters unrelated
to Lumber Products. Two of those matters remain open.
Wells Fargo acquired Wachovia and Sussman Shank is
finishing the representation in those two matters;
-- it represents Federal Express Ground on unrelated matters
involving environmental issues;
-- it represents NACM on unrelated collection matters.
About Lumber Products
Lumber Products -- http://www.lumberproducts.com/-- is a
wholesale distributor of some of the finest hardwood lumber,
hardwood plywood, and door and millwork products to the Northwest,
Intermountain, and Southwest states since 1938. It has
headquarters in Tualatin, Oregon, and operations in Oregon,
Washington, Idaho, Montana, Utah, Arizona, and New Mexico. Lumber
Products is the sole owner of Lumber Products Holding and
Management Company. Holdco is the sole owner of: Lumber Products
Holding and Management Company; Sunrise Wood Products, Inc.;
Lumber Products Washington, Inc.; Components & Millwork, Inc.;
Wood Window Distributors, Inc.; D&J Wood Resources, Inc.; and
Brady International Hardwoods Company.
Lumber Products filed for Chapter 11 bankruptcy (Bankr. D. Ore.
Case No. 12-32729) on April 11, 2012, listing under $50 million in
assets and debts. Judge Elizabeth L. Perris presides over the
case. The petition was signed by Craig Hall, president and chief
operating officer.
The Debtor owes Wells Fargo in excess of $22.8 million. Wells
Fargo is represented by Lane Powell PC.
LUMBER PRODUCTS: Edward Hostmann Named as Chapter 11 Trustee
------------------------------------------------------------
Edward C. Hostmann, the Chapter 11 Trustee for Lumber Products,
sought and obtained permission from the U.S. Bankruptcy Court to
employ Edward Hostmann, Inc. to assist the Trustee in carrying out
his duties.
The Lumber Products Trustee anticipates that EHI provide services
related to budgeting and forecasting; cash management; financial
and operational management; relations with the Debtor and the
Debtor's creditors, the Bankruptcy Court, the Trustee's attorneys,
and the office of the United States Trustee; preparation of
financial and other reports; and other services of a similar
nature as the Trustee may request or deem appropriate from time to
time.
The firm's rates are:
Personnel Rates
--------- -----
Joanne Conway $295
Pete Lahni $295
Jim Feeham $295
Associates $150 - $235
About Lumber Products
Lumber Products -- http://www.lumberproducts.com/-- is a
wholesale distributor of some of the finest hardwood lumber,
hardwood plywood, and door and millwork products to the Northwest,
Intermountain, and Southwest states since 1938. It has
headquarters in Tualatin, Oregon, and operations in Oregon,
Washington, Idaho, Montana, Utah, Arizona, and New Mexico. Lumber
Products is the sole owner of Lumber Products Holding and
Management Company. Holdco is the sole owner of: Lumber Products
Holding and Management Company; Sunrise Wood Products, Inc.;
Lumber Products Washington, Inc.; Components & Millwork, Inc.;
Wood Window Distributors, Inc.; D&J Wood Resources, Inc.; and
Brady International Hardwoods Company.
Lumber Products filed for Chapter 11 bankruptcy (Bankr. D. Ore.
Case No. 12-32729) on April 11, 2012, listing under $50 million in
assets and debts. Judge Elizabeth L. Perris presides over the
case. The petition was signed by Craig Hall, president and chief
operating officer.
The Debtor owes Wells Fargo in excess of $22.8 million. Wells
Fargo is represented by Lane Powell PC.
LUMBER PRODUCTS: Cushman Approved as Ch.11 Trustee's Consultant
---------------------------------------------------------------
Edward C. Hostmann, the Chapter 11 Trustee for Lumber Products,
sought and obtained permission from the U.S. Bankruptcy Court to
employ Cushman & Wakefield of Oregon, Inc. as its real estate
consultants.
Mark Watson will lead the engagement. He charges $250 per hour.
About Lumber Products
Lumber Products -- http://www.lumberproducts.com/-- is a
wholesale distributor of some of the finest hardwood lumber,
hardwood plywood, and door and millwork products to the Northwest,
Intermountain, and Southwest states since 1938. It has
headquarters in Tualatin, Oregon, and operations in Oregon,
Washington, Idaho, Montana, Utah, Arizona, and New Mexico. Lumber
Products is the sole owner of Lumber Products Holding and
Management Company. Holdco is the sole owner of: Lumber Products
Holding and Management Company; Sunrise Wood Products, Inc.;
Lumber Products Washington, Inc.; Components & Millwork, Inc.;
Wood Window Distributors, Inc.; D&J Wood Resources, Inc.; and
Brady International Hardwoods Company.
Lumber Products filed for Chapter 11 bankruptcy (Bankr. D. Ore.
Case No. 12-32729) on April 11, 2012, listing under $50 million in
assets and debts. Judge Elizabeth L. Perris presides over the
case. The petition was signed by Craig Hall, president and chief
operating officer.
The Debtor owes Wells Fargo in excess of $22.8 million. Wells
Fargo is represented by Lane Powell PC.
LUMBER PRODUCTS: U.S. Trustee Appoints 5-Member Creditors Panel
---------------------------------------------------------------
The U.S. Trustee appointed five members to the official committee
of unsecured creditors in the Chapter 11 case of Lumber Products.
The Creditors Committee members are:
1. Roseburg Forest Products
c/o Otis Foglesong
PO Box 1088
Roseburg, OR 97470
2. Columbia Forest Products
c/o Jeff Spatz
7900 Triad Center Drive, Suite 200
Greensboro, NC 27409
Tel: (336) 291-5868
Fax: (336) 605-9020
E-mail: jspatz@cfpwood.com
3. Simpson Door Company
c/o Mike Lybrand
917 E. 11th Street
Tacoma, WA 98421
Tel: (253) 779-6477
Fax: (253) 280-9140
E-mail: mike.lybrand@simpson.com
4. Lamination Technology Industries, Inc.
c/o Richard Clark
1213 Avenue C
White City, OR 97503
Tel: (541) 826-7767
Fax: (541) 826-8130
E-mail: rick@ltionline.net
5. Gary Amoth Trucking, Inc.
c/o Gary Amoth
1874 Highland Avenue E
Twin Falls, ID 83301
Tel: (208) 733-1545
Fax: (208) 733-1091
E-mail: gary@garyamothtrucking.com
About Lumber Products
Lumber Products -- http://www.lumberproducts.com/-- is a
wholesale distributor of some of the finest hardwood lumber,
hardwood plywood, and door and millwork products to the Northwest,
Intermountain, and Southwest states since 1938. It has
headquarters in Tualatin, Oregon, and operations in Oregon,
Washington, Idaho, Montana, Utah, Arizona, and New Mexico. Lumber
Products is the sole owner of Lumber Products Holding and
Management Company. Holdco is the sole owner of: Lumber Products
Holding and Management Company; Sunrise Wood Products, Inc.;
Lumber Products Washington, Inc.; Components & Millwork, Inc.;
Wood Window Distributors, Inc.; D&J Wood Resources, Inc.; and
Brady International Hardwoods Company.
Lumber Products filed for Chapter 11 bankruptcy (Bankr. D. Ore.
Case No. 12-32729) on April 11, 2012, listing under $50 million in
assets and debts. Judge Elizabeth L. Perris presides over the
case. The petition was signed by Craig Hall, president and chief
operating officer.
The Debtor owes Wells Fargo in excess of $22.8 million. Wells
Fargo is represented by Lane Powell PC.
MEDICAL EDUCATIONAL: Court Won't Revise March 2012 Order
--------------------------------------------------------
In the lawsuit, MAYAGUEZ MEDICAL CENTER DR RAMON E BETANCES, INC.,
Plaintiff, v. MEDICAL EDUCATIONAL AND HEALTH SERVICES, INC.,
Defendant, Adv. Proc. No. 10-00146 (Bankr. D. P.R.), Bankruptcy
Judge Brian K. Tester denied the Plaintiff's Motion for
Reconsideration for Additional and Amended Findings of Facts and
the Defendant's Opposition to the Plaintiff's Motion. The
Plaintiff requests that the Court reconsider its findings of facts
entered on March 12, 2012, which pertain to a complaint filed by
Mayaguez Medical against Medical Educational and Health Services
for declaratory judgment, collection of monies, and injunctive
relief under 28 U.S.C. Sec. 2201. The Court held the Plaintiff
does not argue that it is presenting newly discovered evidence,
and its proposed amendments and additions do not demonstrate a
manifest error of law or fact. In addition, the proposed
amendments and additions fall outside the scope of the trial. The
scope of this trial was limited to determining whether the
contract between the Defendant and the Municipality of Mayaguez
was validly terminated. The Court found that the Municipality of
Mayaguez did not follow the termination procedure that was clearly
established contractually. None of the Plaintiff's proposed
amendments or additions pertain to the process that the
Municipality of Mayaguez used to terminate the contract.
Therefore, they are not essential findings for the judgment made
by the Court. A copy of the Court's June 14, 2012 Opinion and
Order is available at http://is.gd/27umCCfrom Leagle.com.
In a separate lawsuit, MAYAGUEZ MEDICAL CENTER DR RAMON E
BETANCES, INC. Plaintiff, v. MEDICAL EDUCATIONAL AND HEALTH
SERVICES, INC. Defendant, Adv. Proc. No. 10-00146 (Bankr. D.
P.R.), Bankruptcy Judge Brian K. Tester denied the Defendant's
request that the Court reconsider its findings of facts and
conclusions of law entered on March 12, 2012. The Court also held
the Defendant's Motion to Amend Findings and Judgment did not
demonstrate the existence of manifest errors of law or fact in the
Court's original findings. Also, the Defendant did not present
newly discovered evidence. A copy of the Court's June 14, 2012
Opinion and Order is available at http://is.gd/q8Erisfrom
Leagle.com.
About Mayaguez Advanced Radiotherapy Center
Based in Mayaguez, Puerto Rico, Mayaguez Advanced Radiotherapy
Center filed for Chapter 11 bankruptcy (Bankr. D. P.R. Case No.
09-04540) on June 2, 2009. Fausto D. Godreau Zayas, Esq. --
dgodreau@LBRGlaw.com -- at Latimer, Biaggi, Rachid & Godreau, LLP,
serves as Debtor's counsel. The Debtor disclosed US$3,810,510 in
total assets and US$1,357,473 in total debts in its schedules
attached to the petition.
About Medical Educational and Health Services
Headquartered in Mayaguez, Puerto-Rico, Medical Educational and
Health Services Inc. was created, specifically, to promote and
advance the establishment and operation of medical educational
facilities and institutions along the western areas of Puerto
Rico. The Company filed for Chapter 11 bankruptcy protection on
June 3, 2010 (Bankr. D. P.R. Case No. 10-04905). The Company
estimated US$10 million to US$50 million in assets and
US$1 million to US$10 million in liabilities. The Debtor is
represented by Rafael Gonzalez Velez, Esq.
MGM RESORTS: 10 Directors Elected at Annual Meeting
---------------------------------------------------
MGM Resorts International held its annual meeting of stockholders
on June 12, 2012, at which stockholders elected 10 directors,
namely:
(1) Robert H. Baldwin;
(2) William A. Bible;
(3) Burton M. Cohen;
(4) Willie D. Davis;
(5) Alexis M. Herman;
(6) Roland Hernandez;
(7) Anthony Mandekic;
(8) Rose McKinney-James;
(9) James J. Murren; and
(10) Daniel J. Taylor
The stockholders ratified the selection of Deloitte & Touche LLP
as the independent registered public accounting firm for the year
ending Dec. 31, 2012, and approved, on an advisory basis, the
compensation of the Company's named executive officers.
On June 12, 2012, MGM Resorts adopted a change of control policy
for executive officers. The Change of Control Policy provides a
uniform severance policy for terminations by the Company without
good cause, or by an executive officer with good cause, following
a change of control, as defined in the Change of Control Policy.
None of the Company's named executive officers is currently a
participant under the Change of Control Policy. However, the
Company expects that the Change of Control Policy will eventually
be the only source of change of control benefits for the Company's
named executive officers as the employment agreements with them
expire and are replaced with new agreements. Alternatively, the
Company may offer named executive officers the opportunity to
become covered under the Change of Control Policy in replacement
of their current employment agreement provisions. The executive
officers to be covered by the Change of Control Policy will be
determined by the Compensation Committee of the Board of Directors
from time to time. The benefits available under the Change of
Control Policy to a covered executive officer in connection with a
Qualifying Termination are as follows, provided that the covered
executive officer delivers to the Company and does not revoke a
general release in a form prescribed by the Company:
CEO: 2.0 times the sum of base salary and target bonus
(subject to a $10 million cap) and accelerated vesting
of equity awards (with up to a 12-month continued
exercise period for stock appreciation rights following
termination), plus a lump sum payment equal in value to
24 months of continued health and insurance benefits.
Other covered executive officers: 2.0 times the sum of
base salary and target bonus (subject to a $4 million cap)
and accelerated vesting of equity awards (with up to a 12-
month continued exercise period for stock appreciation rights
following termination), plus a lump sum payment equal in
value to 24 months of continued health and insurance
benefits.
About MGM Resorts
MGM Resorts International (NYSE: MGM) --
http://www.mgmresorts.com/-- has significant holdings in gaming,
hospitality and entertainment, owns and operates 15 properties
located in Nevada, Mississippi and Michigan, and has 50%
investments in four other properties in Nevada, Illinois and
Macau.
The Company reported net income of $3.23 billion in 2011 and a net
loss of $1.43 billion in 2010.
The Company's balance sheet at March 31, 2012, showed $27.39
billion in total assets, $17.89 billion in total liabilities, and
$9.49 billion in total stockholders' equity.
Bankruptcy Warning
In the Form 10-K for the year ended Dec. 31, 2011, the Company
said that any default under the senior credit facility or the
indentures governing the Company's other debt could adversely
affect its growth, its financial condition, its results of
operations and its ability to make payments on its debt, and could
force the Company to seek protection under the bankruptcy laws.
* * *
As reported by the TCR on Nov. 14, 2011, Standard & Poor's Ratings
Services raised its corporate credit rating on MGM Resorts
International to 'B-' from 'CCC+'. In March 2012, S&P revised
the outlook to positive from stable.
"The revision of our rating outlook to positive reflects strong
performance in 2011 and our expectation that MGM will continue to
benefit from the improving performance trends on the Las Vegas
Strip," S&P said.
In March 2012, Moody's Investors Service affirmed its B2 corporate
family rating and probability of default rating. The affirmation
of MGM's B2 Corporate Family Rating reflects Moody's view that
positive lodging trends in Las Vegas will continue through 2012
which will help improve MGM's leverage and coverage metrics,
albeit modestly. Additionally, the company's declaration of a $400
million dividend ($204 million to MGM) from its 51% owned Macau
joint venture due to be paid shortly will also improve the
company's liquidity profile. The ratings also consider MGM's
recent bank amendment that resulted in about 50% of its
$3.5 billion senior credit facility being extended one year from
2014 to 2015.
MODUSLINK GLOBAL: Receives NASDAQ Notification Letter
-----------------------------------------------------
ModusLink Global Solutions(TM), Inc. confirmed that it received on
June 13, 2012, the anticipated notification from the Listing
Qualifications Department of The NASDAQ Stock Market LLC of
ModusLink's noncompliance with NASDAQ Listing Rule 5250(c)(1) due
to the Company's previously announced delay in filing its Form 10-
Q for the period ended April 30, 2012.
As previously disclosed on June 11, 2012, the Company expected
that NASDAQ would provide this notice. The NASDAQ notification
letter indicates that the Company has 60 days to submit a plan to
regain compliance. The Company intends to submit a plan to NASDAQ
in accordance with the notification.
If NASDAQ accepts the plan, it can grant an exception of up to 180
calendar days from the filing's due date, or until December 10,
2012, to regain compliance. If NASDAQ does not accept the
Company's plan, NASDAQ will provide notice that the Company's
common stock will be subject to delisting. ModusLink has the
right to appeal a determination to delist its common stock, and
the common stock would remain listed on the NASDAQ Global Market
until the completion of the appeal process.
About ModusLink Global
ModusLink Global Solutions, Inc. designs and executes global
supply chain and e-Business strategies that drive revenue growth,
reduce cost and enhance the customer brand experience for the
world's leading companies.
NAVISTAR INTERNATIONAL: M. Rachesky Discloses 13.6% Equity Stake
----------------------------------------------------------------
In a Schedule 13D filing with the U.S. Securities and Exchange
Commission, Mark H. Rachesky, M.D., and his affiliates disclosed
that, as of June 7, 2012, they beneficially own 9,335,837 shares
of common stock of Navistar International Corporation representng
13.6% of the shares outstanding. A copy of the filing is
available for free at http://is.gd/OwlCMS
About Navistar International
Navistar International Corporation (NYSE: NAV) --
http://www.Navistar.com/-- is a holding company whose
subsidiaries and affiliates subsidiaries produce International(R)
brand commercial and military trucks, MaxxForce(R) brand diesel
engines, IC Bus(TM) brand school and commercial buses, Monaco RV
brands of recreational vehicles, and Workhorse(R) brand chassis
for motor homes and step vans. It also is a private-label
designer and manufacturer of diesel engines for the pickup truck,
van and SUV markets. The company also provides truck and diesel
engine parts and service. Another affiliate offers financing
services.
The Company's balance sheet at Jan. 31, 2012, showed
$11.50 billion in total assets, $11.69 billion in total
liabilities, and a $195 million total stockholders' deficit.
* * *
Navistar has 'B1' Corporate Family Rating and Probability of
Default Rating from Moody's Investors Service.
Moody's said in summary credit opinion at the end of April 2012
that the B1 Corporate Family Rating of Navistar International
reflects the company's highly competitive position in the North
American medium and heavy duty truck markets, and the continuing
recovery in demand. It also reflects the progress Navistar
continues to make in implementing a strategy that should reduce
its vulnerability to cyclical downturns and strengthen returns.
The key elements of this strategy include: expanding its scale and
operating efficiencies by offering a full line of medium and
heavy-duty trucks equipped with Navistar engines; building its
position in international truck and engine markets through
alliance and joint ventures; and, strengthening its domestic
dealer network.
As reported by the TCR on June 13, 2012, Standard & Poor's Ratings
Services lowered its ratings on Navistar International Corp.,
including the corporate credit rating to 'B+', from 'BB-'.
"The downgrade and CreditWatch placement reflect the company's
operational and financial setbacks in recent months," said
Standard & Poor's credit analyst Sol Samson.
MOUNTAIN PROVINCE: Shareholders Approve KPMG as Auditors
--------------------------------------------------------
Mountain Province Diamonds Inc. announced that at its annual and
special meeting of shareholders held in Toronto, the shareholders
approved the election of the directors nominated by management,
appointed KPMG LLP as the Company's auditors, and, subject to
regulatory approval, the shareholders re-approved, confirmed and
ratified the Company's stock option plan. The stock option plan
requires the shareholders' re-approval every three years with the
next re-approval to be on or before June 14, 2015.
About Mountain Province
Headquartered in Toronto, Canada, Mountain Province Diamonds Inc.
(TSX: MPV, NYSE AMEX: MDM) -- http://www.mountainprovince.com/--
is a Canadian resource company in the process of permitting and
developing a diamond deposit known as the "Gahcho Kue Project"
located in the Northwest Territories of Canada. The Company's
primary asset is its 49% interest in the Gahcho Kue Project.
The Company's balance sheet at March 31, 2012, showed
C$66.84 million in total assets, C$13.13 million in total
liabilities, and C$53.70 million in total shareholders' equity.
In the auditors' report accompanying the financial statements for
year ended Dec. 31, 2011, KPMG LLP, in Toronto, Canada, noted that
the Company has incurred a net loss in 2011 and expects to require
additional capital resources to meet planned expenditures in 2012
that raise substantial doubt about the Company's ability to
continue as a going concern.
The Company reported a net loss of C$11.53 million for the year
ended Dec. 31, 2011, compared with a net loss of C$14.53 million
during the prior year.
The Company's balance sheet at Dec. 31, 2011, showed C$66.55
million in total assets, C$9.42 million in total liabilities, all
current, and C$57.13 in total shareholders' equity.
NEDAK ETHANOL: Temporarily Halts Production in Nebraska
-------------------------------------------------------
NEDAK Ethanol, LLC, has temporarily suspended production of
ethanol at the plant it operates in Atkinson, Nebraska, in order
to conduct its regular spring maintenance and to monitor the corn
and ethanol markets.
President and General Manager, Jerome Fagerland, stated that "The
early months of the year usually have fewer miles driven by
consumers, which reduces the demand for gasoline and ethanol.
Normally, consumer driving increases by the Memorial Day holiday,
but it has been less so this year. We are also experiencing a
much stronger local basis for current corn deliveries, resulting
in relatively higher local corn prices." Fagerland also noted
that "The surplus of ethanol combined with the increased demand
for corn from developing countries has further contributed to the
negative crush margins the ethanol industry is currently
experiencing."
The Company is still determining the impact the halt in production
will have on its workforce and whether it will lay off a portion
of its workforce or require the entire workforce to work reduced
hours. At a minimum, the Company will need to maintain the staff
necessary to conduct its regular spring maintenance and cleaning
while the plant is idle. Fagerland stated "We hope to resume
production as soon as we have completed our spring maintenance and
the crush margins have returned to a level that will enable
profitable production."
About NEDAK Ethanol
Atkinson, Neb.-based NEDAK Ethanol, LLC
-- http://www.nedakethanol.com/-- operates a 44 million gallon
per year ethanol plant in Atkinson, Nebraska, and produces and
sells fuel ethanol and distillers grains, a co-product of the
ethanol production process. Sales of ethanol and distillers
grains began in January 2009.
NEDAK Ethanol reported a net loss of $781,940 on $152.11 million
of revenue in 2011, compared with a net loss of $2.08 million on
$94.77 million of revenue in 2010.
The Company's balance sheet at March 31, 2012, showed
$73.42 million in total assets, $33.68 million in total
liabilities, $10.80 million in preferred units Class B, and
$28.93 million in total members' equity.
Amends Agreement with AgCountry
In February 2007, the Company entered into a master credit
agreement with AgCountry Farm Credit Services FCA regarding a
senior secured credit facility. As of Dec. 31, 2010, and
throughout 2011, the Company was in violation of several loan
covenants required under the original credit agreement and
therefore, the Company was in default under the credit agreement.
However, the Company entered into a forbearance agreement with
AgCountry which remained effective until June 30, 2011. This
default resulted in all debt under the original credit agreement
being classified as current liabilities effective as of Dec. 31,
2010. The loan covenants under the original credit agreement
included requirements for minimum working capital of $6,000,000,
minimum current ratio of 1.20:1.00, minimum tangible net worth of
$41,000,000, minimum owners' equity ratio of 50%, and a minimum
fixed charge coverage ratio of 1.25:1.00, and also included
restrictions on distributions and capital expenditures.
On Dec. 31, 2011, the Company and AgCountry entered into an
amended and restated master credit agreement pursuant to which the
parties agreed to restructure and re-document the loans and other
credit facilities provided by AgCountry.
Under the amended agreement, the Company is required to make level
monthly principal payments of $356,164 through Feb. 1, 2018.
Beginning on Sept. 30, 2012, and the last day of the first,
second, and third quarters thereafter, the Senior Lender will make
a 100% cash flow sweep of the Company's operating cash balances in
excess of $3,600,000 to be applied to the principal balance. In
addition, the Company is required to make monthly interest
payments at the one month LIBOR plus 5.5%, but not less than 6.0%.
The interest rate was 6.0% as of Dec. 31, 2011. In addition to
the monthly scheduled payments, the Company made a special
principal payment in the amount of $7,105,272 on Dec. 31, 2011.
As of Dec. 31, 2011, and 2010, the Company had $26,000,000 and
$38,026,321 outstanding on the loan, respectively.
NORTHSTAR AEROSPACE: Files for Chapter 11 to Pursue Asset Sale
--------------------------------------------------------------
Northstar Aerospace (USA) Inc., a manufacturer of gears and
gearboxes for military helicopters, filed for Chapter 11
protection (Bankr. D. Del. Lead Case No. 12-11817) in Wilmington,
Delaware, on June 14, 2012, to sell its business to affiliates of
Wynnchurch Capital, Ltd., absent higher and better offers.
Certain Canadian affiliates are also seeking protection pursuant
to the Companies' Creditors Arrangement Act, R.S.C.1985, c. C-36,
as amended.
Craig A. Yuen, senior VP of Finance and CFO of the Debtors,
explains in a court filing that Northstar is facing severe
liquidity issues as a result of, among other things, (i) low to
negative profit margins on significant customer contracts, (ii)
decreases in defense spending and a resulting stretch out of
deliveries of backlog orders and a decline in new business orders
placed, and (iii) the inability to secure additional funding. As
a result, Northstar is unable to meet various financial and other
covenants with its secured lenders and does not have the liquidity
needed to meet its ongoing payment obligations.
As of March 31, 2012, Northstar disclosed total assets of $165.1
million and total liabilities of $$147.1 million. Approximately
60% of the assets and business are with the U.S. debtors.
As of June 11, the Debtors owe $18.89 million under a term lon and
$39.5 million under revolving loans provided by Fifth Third and
other lenders. The Debtors also have $1.6 million outstanding
under a capital equipment loan provided by lenders. A Canadian
unit owes C$1.43 to the Federal Economic Development Agency for
Southern Ontario. Northstar Canada also owes $1.720 under a
Technology Partnership Canada program with the Canadian Minister
of Industry. The Debtors also have $21.67 million of trade debt.
The Debtors also have environmental liabilities in connection with
facilities in Phoenix, Arizona, and Cambridge, Ontario.
Sale to Heligear
Northstar is in the process of completing an extensive marketing
process for the sale of its business or assets.
Northstar has entered into an asset purchase agreement, subject to
approval of the Courts with Heligear Acquisition Co. and Heligear
Canada Acquistion Corporation, affiliates of Wynnchurch Capital,
Ltd., pursuant to which substantially all of the assets of
Northstar will be sold for an aggregate purchase price of
approximately US$70 million, together with the assumption of
certain liabilities.
Wynnchurch's "stalking horse bid" will be subject to a competitive
bidding procedure, whereby, higher and better offers may be
obtained. The bidding procedure and timelines are subject to
approval of the Courts, but it is currently anticipated that the
deadline for superior bids will be on or around July 14, 2012.
If no superior offers are received, there would be insufficient
proceeds to repay Northstar's secured creditors and consequently
no proceeds to pay any of the Company's unsecured creditors or
shareholders, according to a press release by the Debtors.
In consideration for Wynnchurch's expenditure of time and money
and agreement to act as the initial bidder, the Stalking Horse APA
contemplates a break-up fee and expense reimbursement for costs in
an amount of 3.5% of the cash purchase price, payable by the
Debtors to Wynnchurch only in the event that it is not the
successful bidder.
$11 Million DIP Financing
Northstar's existing secured lenders have agreed to provide
additional postpetition financing of up to US$4 million during the
CCAA and Chapter 11 proceedings, subject to customary terms and
conditions. Northstar has also obtained junior DIP financing of
up to US$7 million, subject to customary terms and conditions,
from Boeing Capital Loan Corporation.
Northstar's existing lenders are also providing a loan facility
for the CCAA entities.
The DIP lenders have a right to credit bid.
Chapter 11 Case
U.S. Bankruptcy Judge Mary Walrath convened a hearing on the first
day motions on June 15, 2012. The judge granted interim or final
orders authorizing the Debtors to pay employees, bar utilities
from discontinuing service, continue their bank accounts and pay
employee wages and benefits.
The judge also granted interim approval to the DIP facilities.
The judge's order provides that pending final approval, the
principal amount of the senior DIP facility will not exceed $3.2
million and the junior DIP facility will not exceed $6.2 million.
The hearing to consider final approval of the loans is set for
July 3, 2012, with objections due June 28.
Attorneys at SNR Denton US LLP and Bayard, P.A. serve as counsel
to the Debtors. The Debtors have obtained approval to hire Logan
& Co. Inc. as the claims and notice agent.
Fifth Third is represented by J. Mark Misher and Jason M. Torf,
Esq., at Schiff Hardin LLP in Chicago Illinois, and Eric D.
Schwartz and Gregory W. Werkheiser. The Junior DIP lender is
represented by Ryan Blaine Bennett and Michelle Kilkenney, Esq.,
at Kirkland & Ellis LLP, in Chicago, Illinois.
CCAA Case
The Company will be requesting CCAA protection for an initial
period of 30 days, expiring on July 14, 2012.
The Company's Board of Directors has elected to resign their
positions concurrently with the CCAA filing. The Corporation is
seeking the appointment of FTI Consulting Canada, Inc., as Chief
Restructuring Officer under the Initial Order. The Corporation
also is proposing that Ernst & Young Inc. be appointed as monitor
in the CCAA proceeding.
Business as Usual
While under CCAA and Chapter 11 protection, creditors and others
are stayed from pursuing any claims or enforcing any rights
against the filing entities.
It is intended that Northstar's operations will continue
uninterrupted during the CCAA and Chapter 11 proceedings and
obligations to employees and suppliers of goods and services
provided after the filing date will continue to be met.
About Northstar Aerospace
Chicago, Illinois-based Northstar Aerospace --
http://www.nsaero.com/-- is an independent manufacturer of flight
critical gears and transmissions. With operating subsidiaries in
the United States and Canada, Northstar produces helicopter gears
and transmissions, accessory gearbox assemblies, rotorcraft drive
systems and other machined and fabricated parts. It also provides
maintenance, repair and overhaul of components and transmissions.
Its plants are located in Chicago, Illinois; Phoenix, Arizona and
Milton and Windsor, Ontario. Northstar employs over 700 people
across its operations.
ONCURE HOLDINGS: Moody's Cuts CFR to 'Caa3'; Outlook Negative
-------------------------------------------------------------
Moody's Investors Service downgraded OnCure Holdings, Inc.'s
corporate family and probability of default ratings to Caa3.
Concurrently, Moody's downgraded the company's $210 million sr.
secured notes to Caa3. The ratings outlook is negative.
The downgrade of the corporate family rating to Caa3 reflects the
company's untenable capital structure and Moody's expectation that
the company may not be able to meet its interest payment
obligations over the next 12 to 18 months due to projected weak
liquidity and financial performance.
The following rating actions were taken:
Corporate family rating, downgraded to Caa3 from Caa1;
Probability of default rating, downgraded to Caa3 from Caa1;
$210 million senior secured notes, due May 2017, downgraded
to Caa3 (LGD4, 57%) from Caa1 (LGD4, 56%).
Ratings Rationale:
The Caa3 corporate family rating reflects Moody's view that the
company's profitability and cash flow generation will deteriorate
from increasing competition for census in the radiation therapy
industry, reductions in Medicare reimbursement rates, and decrease
in EBITDA due to the ICON contract renegotiations. These issues
will also significantly limit reinvestment in the business and
further hamper the company's competitive position. Additionally,
OnCure's small size of approximately $100 million in revenues as
well as concentration by state, payor, and management service
agreement, constrain the rating. At the same time, the rating
positively reflects OnCure's diversification by treatment and the
longer-term growth fundamentals of the industry.
The negative outlook reflects projected weak liquidity profile.
The ratings could be downgraded if OnCure's liquidity weakens
further and/or the company is not able to meet its interest
obligations.
The ratings could be upgraded if OnCure's financial performance
and liquidity profile improve such that (EBITDA-CAPEX)/interest
expense is above 1.5 times (including expansion CAPEX) on a
projected basis and free cash flow/debt is above 3% on a projected
basis.
The principal methodology used in rating OnCure was the Global
Healthcare Service Providers Industry Methodology published in
December 2011. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
OnCure Holdings, Inc. is a provider of capital equipment and
business management services to radiation oncology physician
groups that treat patients at the company's cancer centers. OnCure
generated $102 million in revenues for the trailing twelve month
period ended March 31, 2012. The company operates 38 facilities
and is owned by Genstar Capital.
PEMCO WORLD: Court Approves Sale to VT Aerospace
------------------------------------------------
The Bankruptcy Court on Friday approved the sale of Pemco World
Air Services Inc.'s aerospace maintenance facility in Tampa, Fla.,
to Vision Technologies Aerospace Incorporated and its assignee, VT
Aerospace Tampa, Inc., for $41.9 million in cash plus assumption
of liabilities. As to the assumed liabilities, the buyer will
deposit $7.81 million, according to an asset purchase agreement.
VT Aerospace is a segment of Vision Technologies Systems Inc. in
Alexandria, Va. VT Aerospace was identified as the highest and
best bidder at the June 7 auction, topping a credit bid from Avion
Services Holdings LLC, the stalking horse bidder. Avion is an
affiliate of private equity firm Sun Capital Partners LP, Pemco's
current owner.
The Sun affiliate acquired a $31.8 million senior secured debt
from Merrill Lynch Credit Products LLC and also holds a $5.6
million subordinated secured loan.
The deal with VT Aerospace is anticipated to close in July.
Subsequent to the sale, the Debtors, VT Aerospace and The Boeing
Company entered into a stipulation providing for payments to
Boeing as a critical vendor.
The Pemco Debtors seek to assume and assign, effective upon
closing of the sale, certain agreements with Boeing to VT
Aerospace. They also seek to assume and assign to VT Aerospace
certain revised agreements amending and restating a Data License
Agreement with Boeing. The Pemco Debtors will reject other
agreements with Boeing.
As of March 5, 2012, the Pemco Debtors and Boeing agree that the
Pemco Debtors owed Boeing $1,100,672. Under the Stipulation, the
Pemco Debtors will pay $275,168 pursuant to Debt Cure Letter
Agreement No. 2012-HB3C04 and $137,584 in six monthly installments
beginning July 1.
Counsel to The Boeing Company are:
Brian A. Jennings, Esq.
PERKINS COIE LLP
1201 Third Avenue, 49th Floor
Seattle, WA 98101
Telephone: (206) 359-3679
Facsimile: (206) 359-4679
Counsel to Vision Technologies Aerospace Incorporated and VT
Aerospace Tampa, Inc., are:
Deborah D. Williamson, Esq.
Meghan E. Bishop, Esq.
COX SMITH MATTHEWS INCORPORATED
112 E. Pecan St., Suite 1800
San Antonio, TX 78205
Telephone: (210) 554-5500
Facsimile: (210) 226-8395
- and -
David M. Powlen, Esq.
BARNES & THORNBURG LLP
1000 N. West Street, Suite 1200
Wilmington, Delaware 19801
Telephone: (302) 888-4536
Facsimile: (302) 888-0246
About Pemco World Air Services
Headquartered in Tampa, Florida Pemco World Air Services --
http://www.pemcoair.com/-- performs large jet MRO services, and
has operations in Dothan, AL (military MRO and commercial
modification), Cincinnati/Northern Kentucky (regional aircraft
MRO), and partner operations in Asia.
Pemco filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Case
No. 12-10799) on March 5, 2012. Young Conaway Stargatt & Taylor,
LLP has been tapped as general bankruptcy counsel; Kirkland &
Ellis LLP as special counsel for tax and employee benefits issues;
AlixPartners, LLP as financial advisor; Bayshore Partners, LLC as
investment banker; and Epiq Bankruptcy Solutions LLC as notice and
claims agent.
On March 14, 2012, the U.S. Trustee appointed an official
committee of unsecured creditors.
On April 13, 2012, Sun Aviation Services LLC (Bankr. D. Del. Case
No. 12-11242) filed its own Chapter 11 bankruptcy petition. Sun
Aviation owns 85.08% of the stock of Pemco debtor-affiliate WAS
Aviation Services Holding Corp., which in turn owns 100% of the
stock of debtor WAS Aviation Services Inc., which itself owns 100%
of the stock of Pemco World Air Services Inc. Pemco also owes Sun
Aviation $5.6 million. As a result, Sun Aviation is seeking
separate counsel. However, Sun Aviation obtained an order jointly
administering its case with those of the Pemco debtors.
PHOENIX SERVICES: S&P Affirms 'B+' Corporate Credit Rating
----------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on U.S.-
based Phoenix Services International LLC to negative from stable.
"We affirmed our 'B+' corporate credit rating on the company and
our 'BB-' issue rating and '2' recovery rating on the company's
$245 million senior secured credit facilities. The '2' recovery
rating reflects our expectation for substantial (70% to 90%)
recovery in the event of a payment default," S&P said.
"The negative outlook revision follows the announcement that one
of Phoenix Services' customers, RG Steel LLC (not rated), recently
filed for protection under Chapter 11 of the U.S. bankruptcy code
and reflects the potential that revenues from the RG Steel sites
over the next 12 months will be significantly less than we
previously anticipated," said Standard & Poor's credit analyst
Maurice Austin. "Less-than-robust growth in the U.S., heightened
economic uncertainty in Europe, and (to a lesser extent) slowing
growth in the Chinese economy also influenced our outlook
revision. Given all of these factors, we now expect Phoenix
Services' EBITDA and credit measures to come in near the weaker
end of our previous expected ranges and with a slimmer covenant
cushion."
"The corporate credit rating on Pennsylvania-based Phoenix
Services reflects what we consider to be the company's
'vulnerable' business risk profile and 'significant' financial
risk profile. Although 2012 EBITDA is likely to be weaker than we
had previously anticipated, we still expect EBITDA to be higher
year over year and for leverage to end the year near 3.5x. This is
within the 3x to 4x EBITDA range that we typically associate with
a significant financial risk profile. We hold this view because we
expect the recent acquisition of French competitor Gagneraud
Industrie SAS (not rated) and newer service contracts with other
steel producers to somewhat offset diminished revenues from the RG
Steel sites," S&P said.
"Our original baseline scenario assumed domestic capacity
utilization to continue to recover toward the historical cyclical
average (about 80%) but with slower production or temporary
shutdowns at some mills in the U.S. as well as Europe. Our revised
baseline scenario assumes a slower recovery in domestic capacity
utilization and longer-term shutdowns, including mills RG Steel
operates and some mills in Europe. In this scenario, we expect
leverage to be within 3x and 4x, which would still support our
significant financial risk assessment," S&P said.
"Phoenix Services is privately owned and does not file public
financial statements. The company was founded in 2006 to provide
steel mill services including the handling and processing of slag,
a byproduct of steel production. Its operations are geographically
diverse, with roughly half of pro forma revenues derived from the
U.S. and the balance derived from France, Romania, and South
Africa. However, customer concentration is high, with
ArcelorMittal (BBB-/Negative/A-3) accounting for a significant
amount of pro forma revenues. Our vulnerable business risk
assessment reflects Phoenix's high customer concentration, as well
as our view that the outsourced steel services industry is very
competitive and that the variable component of Phoenix's service
contracts could expose the company's cash flow to cyclical
swings," S&P said.
"Our negative outlook on Phoenix Services reflects the potential
that its EBITDA will be weaker than we had previously expected
with slimmer covenant cushion, given RG Steel's bankruptcy filing
and generally weaker-than-anticipated conditions in the U.S. and
Europe. We would lower our rating if EBITDA slips further and
Phoenix Services' covenant cushion dropped below 15%. This could
occur if EBITDA margins receded sharply because more of Phoenix
Services' customers temporarily idled plants and its larger
customers extracted concessions from Phoenix Services," S&P said.
"An upgrade is unlikely because of uncertainty about the near-term
impact and ultimate resolution of the RG Steel bankruptcy and, to
a lesser extent, the less transparent operating strategy and
financial policy inherent with private equity-owned firms. We
would revise our outlook to stable if the RG Steel quickly sells
its mills and Phoenix is retained to provide essential services
at these sites without material diminution in currently contracted
fees," S&P said.
PINNACLE AIRLINES: Swings to $31.5 Million Net Loss in 2011
-----------------------------------------------------------
Pinnacle Airlines Corp. filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing
a net loss of $31.47 million on $1.23 billion of total operating
revenues in 2011, compared with net income of $12.77 million on
$1.02 billion of total operating revenue in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $1.47 billion
in total assets, $1.38 billion in total liabilities and $89.66
million in total stockholders' equity.
A copy of the Form 10-K is available for free at:
http://is.gd/SrRwow
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.
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.
PRETIUM PACKAGING: S&P Lowers Corporate Credit Rating to 'B-'
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Pretium Packaging LLC to 'B-' from 'B'. The outlook is
stable.
"At the same time, we lowered the issue ratings on the company's
$150 million senior secured notes due 2016 to 'B-' (same as the
corporate credit rating) from 'B'. The '3' recovery rating remains
unchanged, indicating our expectation for a meaningful (50% to
70%) recovery in the event of a payment default," S&P said.
"The downgrade reflects our expectation that Pretium will not be
able to materially improve its financial profile in the near
term," said Standard & Poor's credit analyst Henry Fukuchi.
"Despite initiatives to improve profitability, we expect operating
margins and volumes will remain at or close to historical levels,
limiting improvement in its credit metrics. Nevertheless, we
continue to expect stable to modestly improving operating trends
over the next few years supported by increased volumes, the
benefits of ongoing rationalization of facilities, and various
cost reduction efforts."
"The ratings on Chesterfield, Mo.-based plastic packaging company
Pretium reflect the company's highly leveraged financial profile
and weak business risk profile. Our financial risk assessment
incorporates the company's very aggressive financial policies,
weak cash flow protection, and high leverage. Our expectations for
adequate liquidity, a favorable debt maturity profile, and
unrestrictive financial covenants offset these weaknesses to some
extent. Our business risk assessment incorporates Pretium's low
geographic diversity in a competitive and fragmented industry,
narrow product focus, and somewhat limited track record. Positive
factors are relatively stable end markets, decent operating
margins, and contractual raw material pass-through provisions for
a large portion of its business," S&P said.
"Pretium has annual revenues of about $235 million. It generates
about 84% of revenues in the U.S. Pretium's end markets--food and
beverage, consumer, and pharmaceuticals--are relatively stable,
but its product diversity is limited to various types of
polyethylene terephthalate (PET) and high-density polyethylene
(HDPE) containers. Its customer concentration is moderate. The
company's largest customer accounts for about 5% of sales, and its
top 10 customers account for about 38% of sales. However, the
company's niche market positions in medium to short runs, its
facilities strategically located near customers, and its
established and contractual relationships with key customers
provide some barriers to entry in this highly fragmented and
competitive industry," S&P said.
"Last year, volatile raw material costs hurt operating margins,
but we expect the company to restore margins to levels acceptable
for the ratings. About 60% of Pretium's sales are under three- to
five-year contracts with customers that allow for pass-through of
raw material costs, typically with a short time lag. We expect
Pretium to maintain margins in the low to mid teens percentage
area as a result of moderate business conditions, modest economic
growth, and our expectation of a less-volatile HDPE and PET market
this year," S&P said.
"Pretium's financial profile is highly leveraged. The company has
payment-in-kind (PIK) preferred equity, which we consider as debt-
like in our calculations. As of March 31, 2012, the company's
total adjusted debt to EBITDA (with PIK preferred treated as debt)
is about 9.3x and funds from operations (FFO) to total debt at
approximately 3%. If we exclude the PIK preferred from debt, the
ratios are about 6.3x and 4.3%. Although we recognize the
qualitative benefits the PIK securities provide to the company in
terms of the lack of debt service and their perpetuity, these
instruments do not receive formal equity treatment under our
hybrid criteria for financial ratio analysis because we question
their permanence," S&P said.
"Based on our scenario forecasts, we expect credit metrics to
remain generally unchanged for the next few years, reflecting
stable to slightly improving operating trends. Our forecasts do
not incorporate future dividend payments or large debt-funded
acquisitions that could increase total leverage and weaken the
financial profile. In our scenario forecasts (including the PIK
preferred as debt), total adjusted debt to EBITDA will remain
about 9x and FFO to total adjusted debt will remain in the mid
single digit percentage area within the next year," S&P said.
"The stable outlook reflects stable to gradually improving
operating results and business conditions that should allow
Pretium to maintain its current financial profile within the next
year. We expect operating results over the next few years to
reflect gradually increasing volumes and stable operating
margins, consistent with our expectation for economic growth. The
outlook also reflects modest cash flow generation, which should
continue to support future cash outlays and adequate liquidity,"
S&P said.
"We could lower the ratings if liquidity declines meaningfully or
if free cash flow generation is lower than we project because of
unexpected business challenges. Based on our scenario forecasts,
we could lower the rating if operating margins weaken by 200 basis
points or more, or if volumes decrease by 10% or more from current
levels. At this point, FFO to total adjusted debt (PIK preferred
treated as debt) would decrease toward the low-single-digit
percentage area and total adjusted debt to EBITDA would increase
to 10x or more. We could also lower the ratings if unexpected cash
outlays or aggressive financial policy decisions reduce the
company's liquidity or stretch the financial profile beyond
current debt leverage levels," S&P said.
"Although we do not expect to do so any time soon, we could raise
the ratings modestly if FFO to total adjusted debt approaches 10%
(PIK preferred treated as debt) and remains there. We would also
need to be more comfortable with future financial policy decisions
related to growth, acquisitions, and shareholder rewards," S&P
said.
PUTNAM STATE BANK: Closed; Harbor Community Assumes All Deposits
----------------------------------------------------------------
Putnam State Bank of Palatka, Fla., was closed on Friday, June 15,
by the Florida Office of Financial Regulation, which appointed the
Federal Deposit Insurance Corporation as receiver. To protect the
depositors, the FDIC entered into a purchase and assumption
agreement with Harbor Community Bank of Indiantown, Fla., to
assume all of the deposits of Putnam State Bank.
The three branches of Putnam State Bank will reopen during their
normal business hours beginning Saturday as branches of Harbor
Community Bank. Depositors of Putnam State Bank will automatically
become depositors of Harbor Community Bank. Deposits will continue
to be insured by the FDIC, so there is no need for customers to
change their banking relationship in order to retain their deposit
insurance coverage up to applicable limits. Customers of Putnam
State Bank should continue to use their existing branch until they
receive notice from Harbor Community Bank that it has completed
systems changes to allow other Harbor Community Bank branches to
process their accounts as well.
As of March 31, 2012, Putnam State Bank had approximately $169.5
million in total assets and $160.0 million in total deposits. In
addition to assuming all of the deposits of the failed bank,
Harbor Community Bank agreed to purchase essentially all of the
assets.
The FDIC and Harbor Community Bank entered into a loss-share
transaction on $112.3 million of Putnam State Bank's assets.
Harbor Community Bank will share in the losses on the asset pools
covered under the loss-share agreement. The loss-share
transaction is projected to maximize returns on the assets covered
by keeping them in the private sector. The transaction also is
expected to minimize disruptions for loan customers. For more
information on loss share, please visit:
http://www.fdic.gov/bank/individual/failed/lossshare/index.html
Customers with questions about the transaction should call the DIC
toll-free at 1-800-640-2631. Interested parties also can visit
the FDIC's Web site at
http://www.fdic.gov/bank/individual/failed/putnam.html
The FDIC estimates that the cost to the Deposit Insurance Fund
will be $37.4 million. Compared to other alternatives, Harbor
Community Bank's acquisition was the least costly resolution for
the FDIC's DIF. Putnam State Bank is the 29th FDIC-insured
institution to fail in the nation this year, and the fourth in
Florida. The last FDIC-insured institution closed in the state
was Security Bank, National Association, North Lauderdale, on
May 4, 2012.
QUALITY DISTRIBUTION: Completes Acquisition of RM Resources
-----------------------------------------------------------
Quality Distribution, Inc., has completed its previously announced
acquisition of the operating assets and rights of RM Resources,
LLC.
Together with the previously announced closing of the acquisition
of certain operating assets of Wylie Bice Trucking, LLC, on
June 1, 2012, the aggregate purchase price for the combined
businesses is approximately $81.5 million plus potential
additional consideration of $19.0 million if certain future
operating and financial performance criteria are satisfied. The
increased purchase price was primarily due to new revenue
producing assets purchased after the initial valuation date.
Quality utilized borrowings under its asset-based credit facility
to finance the cash portion of these transactions.
The transactions were structured as asset acquisitions, with
aggregate consideration paid to the sellers as follows: (i)
approximately $52.2 million in cash; (ii) a total of $21.3 million
in 5-year subordinated seller notes bearing interest at a 5% fixed
rate; and (iii) $8.0 million in unregistered restricted shares of
Quality common stock. Up to an additional $19.0 million may be
payable in cash one year after the closing date, contingent upon
the collective businesses meeting certain future operating and
financial performance criteria.
"A year ago we embarked on a growth strategy to enter into the
emerging frac shale energy market, with the intention of providing
fluid hauling and disposal services in multiple shale regions,"
said Quality CEO Gary Enzor. "The Bice and RM acquisitions
represent one of our most significant steps in this strategy by
diversifying our energy logistics business and broadening our
reach into the oil rich Bakken shale. We are excited about the
growth prospects that well-established operations like Bice and RM
bring to our shareholders."
On a combined basis for the twelve-month period ended March 31,
2012, the Bice and RM businesses generated approximately $129.1
million of revenue and $15.2 million of adjusted EBITDA. Adjusted
EBITDA excludes approximately $1.0 million of charges not expected
to recur. A reconciliation of the combined net income of Bice and
RM to adjusted EBITDA is attached as a financial exhibit. Quality
expects the collective acquisitions to be accretive to earnings
beginning in the third quarter of 2012.
About Quality Distribution
Quality Distribution, LLC, and its parent holding company, Quality
Distribution, Inc., are headquartered in Tampa, Florida. The
company is a transporter of bulk liquid and dry bulk chemicals.
The company's 2010 revenues are approximately $686 million.
Apollo Management, L.P., owns roughly 30% of the common stock of
Quality Distribution, Inc.
The Company reported net income of $23.43 million in 2011,
compared with a net loss of $7.40 million in 2010.
The Company's balance sheet at March 31, 2012, showed $330.79
million in total assets, $398.38 million in total liabilities and
a $67.58 million total shareholders' deficit.
Bankruptcy Warning
In its Form 10-K for 2011, the Company noted that it had
consolidated indebtedness and capital lease obligations, including
current maturities, of $307.1 million as of Dec. 31, 2011. The
Company must make regular payments under the New ABL Facility and
its capital leases and semi-annual interest payments under its
2018 Notes.
The New ABL Facility matures August 2016. However, the maturity
date of the New ABL Facility may be accelerated if the Company
defaults on its obligations. If the maturity of the New ABL
Facility or such other debt is accelerated, the Company does not
believe that it will have sufficient cash on hand to repay the New
ABL Facility or such other debt or, unless conditions in the
credit markets improve significantly, that the Company will be
able to refinance the New ABL Facility or such other debt on
acceptable terms, or at all. The failure to repay or refinance
the New ABL Facility or such other debt at maturity will have a
material adverse effect on the Company's business and financial
condition, would cause substantial liquidity problems and may
result in the bankruptcy of the Company or its subsidiaries. Any
actual or potential bankruptcy or liquidity crisis may materially
harm the Company's relationships with its customers, suppliers and
independent affiliates.
REAL AMERICA: Court Rejects Cash Use, Dismisses Case
----------------------------------------------------
Bankruptcy Judge Mary Ann Whipple denied Real America, Inc.'s
request for continued authority to use cash collateral, saying the
Debtor has failed to show a reasonable probability that its
revenues will be sufficient such that the bank lender's interest
in its cash collateral can be adequately protected based on the
high degree of unreliability with respect to 25% of the revenues
in an amended budget presented. A copy of the Court's June 14,
2012 order denying use of cash collateral is available at
http://is.gd/xU20qQfrom Leagle.com.
In a separate order, the judge dismissed the Debtor's case.
Secured creditor Citizens Bank has not consented and objects to
the Debtor's continued use of its interest in cash collateral,
which interest the Debtor has not disputed, after a previous
agreed interim order in which there was a default.
The Court held the Debtor has no ability to reorganize or to
operate without administrative insolvency without authority to use
the Bank's cash collateral. To permit the Debtor to continue to
incur expenses without authorization to use cash collateral and in
the absence of a reasonable likelihood of rehabilitation given the
lack of authorized post-petition operating funding is resulting in
a continuing loss to the bankruptcy estate as the Debtor's summer
resort operations on Middle Bass Island in Lake Erie proceed
without any identified and authorized sources of cash. A copy of
the Court's June 14 dismissal order is available at
http://is.gd/tby8AMfrom Leagle.com.
About Real America
Real America, Inc., in Middle Bass, Ohio, filed for Chapter 11
bankruptcy (Bankr. N.D. Ohio Case No. 12-31142) on March 15, 2012.
Judge Mary Ann Whipple presides over the case. Thomas C. Pavlik,
Esq., at Novak & Pavlik, LLP, serves as the Debtor's counsel. The
Debtor scheduled assets of $441,000 and liabilities of $12.2
million. The petition was signed by Edmund Gudenas, president.
Prior to the petition date, a foreclosure action had been
commenced in state court to foreclose liens on property owned by
the Debtor, as well as property owned by U.S. Erie Islands
Development LLC on Middle Bass Island in Ottawa County, Ohio, and
a receiver had been appointed. Together, the property subject to
the foreclosure action is known as St. Hazard's Resort. The
receivership included assets owned by Real America, Erie Islands
and Hazards Adventures Company. Only Real America filed for
Chapter 11 bankruptcy, and the state court receivership continued
with respect to the other entities and assets.
REDDY ICE: Suspends Filing of Reports with SEC
----------------------------------------------
Reddy Ice Holdings, Inc., filed a Form 15 notifying of its
suspension of its duty under Section 15(d) to file reports
required by Section 13(a) of the Securities Exchange Act of 1934
with respect to its common stock, par value $0.01 per share,
11.25% Senior Secured Notes due 2015 and 13.25% Senior Secured
Notes due 2015. Pursuant to Rule 12h-3, the Company is suspending
reporting because there are currently less than 300 holders of
record of the common shares and Senior Notes.
Approximate number of holders of record as of May 31, 2012:
Common Stock, par value $0.01 per share: 236
11.25% Senior Secured Notes due 2015: 40
13.25% Senior Secured Notes due 2015: 39
The Company filed with the SEC post-effective amendments to its
Form S-8 registration statements relating to the registration of
shares of common stock under the Company's 2005 Long-Term
Incentive and Share Award Plan.
On April 12, 2012, the Company and its wholly-owned subsidiary
Reddy Ice Corporation filed voluntary petitions in the United
States Bankruptcy Court for the Northern District of Texas seeking
relief under the provisions of Chapter 11 of the United States
Bankruptcy Code. On May 22, 2012, the Bankruptcy Court entered an
order confirming the Company's Plan of Reorganization.
Pursuant to the Plan of Reorganization, upon effectiveness of the
Plan of Reorganization the Plan will terminate and no further
awards will be made under the Plan. As contemplated by the Plan
of Reorganization, the securities registered under this
Registration Statement will be cancelled on the effective date of
the Plan of Reorganization. Accordingly, the Company filed post-
effective amendments to deregister the Unused Shares concurrently
with the effectiveness of the Plan of Reorganization.
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.
The Company's balance sheet at March 31, 2012, showed
$414.68 million in total assets, $555.44 million in total
liabilities and a $140.76 million total stockholders' deficit.
Reddy Holdings and Reddy Corp. on April 12, 2012, filed voluntary
Chapter 11 bankruptcy petitions (Bankr. N.D. Tex. Case Nos. 12-
32349 and 12-32350) together with a plan of reorganization and
accompanying disclosure statement to complete a previously
announced plan to strengthen its balance sheet and ensure strong
financial footing for the future. As part of the restructuring,
Reddy Ice seeks to pursue a strategic acquisition of all or
substantially all of the businesses and assets of Arctic Glacier
Income Fund and its subsidiaries, including Arctic Glacier Inc., a
major producer, marketer and distributor of packaged ice in North
America.
Arctic Glacier on Feb. 22, 2012, filed for protection under the
Companies' Creditors Arrangement Act in Canada and Chapter 15 of
the Bankruptcy Code in the United States. Arctic is seeking sale
or investment proposals from qualified bidders.
Reddy Ice's Plan provides for the restructuring of the Company's
obligations with respect to $300 million of First Lien Notes;
$139.4 million of Second Lien Notes; and $11.7 million of Discount
Notes. If the Plan is approved, all Second Lien Notes will be
exchanged and will be retired and cancelled and all Discount Notes
will be cancelled. Reddy Ice said the Plan has the support of a
majority of its lenders and major creditors, led by Centerbridge
Capital Partners II, L.P. A hearing to approve the Disclosure
Statement and confirm the Plan has been set for May 18, 2012.
Judge Stacey G. Jernigan presides over the case. Reddy Ice's
financial advisors are Jefferies & Company, Inc. and FTI
Consulting, Inc. Kurtzman Carson Consultants serves as claims and
notice agent.
Centerbridge Partners is represented by Jonathan S. Zinman, Esq.,
Joshua A. Sussberg, Esq., James H.M. Sprayregen, Esq., and Anup
Sathy, Esq., at Kirkland & Ellis.
Macquarie Bank Limited is represented by Sarah Hiltz Seewer, Esq.,
and David R. Seligman, Esq., also at Kirkland & Ellis.
The ad hoc group of First Lien and Second Lien Noteholders is
represented by Joshua Andrew Feltman, Esq., at Wachtell Lipton
Rosen & Katz. Wells Fargo Bank, National Association, serves as
First Lien and Second Lien Agent.
The U.S. Bankruptcy Court for the Northern District of Texas,
Dallas Division confirmed the first amended joint plan of
reorganization of the Company and its direct subsidiary, Reddy Ice
Corporation. The Company currently expects to emerge from Chapter
11 in late May 2012 after the conditions to effectiveness of the
Plan are satisfied.
RESIDENTIAL CAPITAL: DBRS Downgrades Issuer Rating to 'D'
---------------------------------------------------------
DBRS, Inc. has downgraded the ratings of Residential Capital, LLC
(ResCap or the Company), including its Issuer and Long-Term Debt
ratings to 'D' from 'C'. Concurrently, the Company's Short-Term
Debt rating has been downgraded to 'D' from R-5. All ratings have
been removed from Under Review with Negative Implications, where
they were placed on April 18, 2012.
This rating action follows ResCap's announcement that it has filed
a bankruptcy petition under Chapter 11 of the U.S. Bankruptcy
Code. As such, the downgrade to 'D' for all instruments is in
accordance with DBRS Rating Policy.
RG STEEL: Massey Unit Wants to Remove $32MM Suit Over Coal Supply
-----------------------------------------------------------------
Maria Chutchian at Bankruptcy Law360 reports that an A.T. Massey
Coal Co. unit on Wednesday sought the removal of a $32 million
West Virginia state court action brought by an entity partially
owned by RG Steel Wheeling LLC that accuses the company of
breaching a coal supply contract for a coke plant.
Bankruptcy Law360 relates that Mountain State Carbon LLC, a joint
venture between RG Steel and SNA Carbon LLC, accuses Central West
Virginia Energy Co. of failing to deliver the high volatile
metallurgical coal required to operate the Follansbee Plant.
About RG Steel
RG Steel LLC -- http://www.rg-steel.com/-- is the United States'
fourth-largest flat-rolled steel producer with annual steelmaking
capacity of 7.5 million tons. It was formed in March 2011
following the purchase of three steel facilities located in
Sparrows Point, Maryland; Wheeling, West Virginia and Warren,
Ohio, from entities related to Severstal US Holdings LLC. RG
Steel also owns finishing facilities in Yorkville and Martins
Ferry, Ohio. It also owns Wheeling Corrugating Company and has a
50% ownership in Mountain State Carbon and Ohio Coatings Company.
RG Steel along with affiliates, including WP Steel Venture LLC,
sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12-
11661) on May 31, 2012, to pursue a sale of the business. The
bankruptcy was precipitated by liquidity shortfall and a dispute
with Mountain State Carbon, LLC, and a Severstal affiliate, that
restricted the shipment of coke used in the steel production
process.
The Debtors estimated assets and debts in excess of $1 billion as
of the Chapter 11 filing. The Debtors owe (i) $440 million,
including $16.9 million in outstanding letters of credit, to
senior lenders led by Wells Fargo Capital Finance, LLC, as
administrative agent, (ii) $218.7 million to junior lenders, led
by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million
on account of a subordinated promissory note issued by majority
owner The Renco Group, Inc., and (iv) $100 million on a secured
promissory note issued by Severstal.
Judge Kevin J. Carey presides over the case.
The Debtors are represented in the case by Robert J. Dehney, Esq.,
and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP,
and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T.
Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the
Debtors.
Conway MacKenzie, Inc., serves as the Debtors' financial advisor
and The Seaport Group serves as lead investment banker. Donald
MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson
Consultants LLC is the claims and notice agent.
Wells Fargo Capital Finance LLC, as Administrative Agent, is
represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo,
Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura
Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang
Ziehi & Jones LLP.
Renco Group is represented by lawyers at Cadwalader, Wickersham &
Taft LLP.
RG STEEL: PBGC Says No Basis to Shield Parent from Liability
------------------------------------------------------------
Lance Duroni at Bankruptcy Law360 reports that the Pension Benefit
Guaranty Corp. entered the fray in RG Steel LLC's bankruptcy on
Thursday, criticizing the steelmaker for shielding its parent from
liability for a $70 million pension shortfall.
Bankruptcy Law360 notes that in a limited objection filed in
Delaware bankruptcy court, the PBGC took issue with releases
granted to parent The Renco Group Inc. in RG Steel's debtor-in-
possession financing package. The agency believes it has
"substantial claims" against Renco related to the steelmaker's
pension plans and said there is "no basis whatsoever" for
shielding the parent from liability.
About RG Steel
RG Steel LLC -- http://www.rg-steel.com/-- is the United States'
fourth-largest flat-rolled steel producer with annual steelmaking
capacity of 7.5 million tons. It was formed in March 2011
following the purchase of three steel facilities located in
Sparrows Point, Maryland; Wheeling, West Virginia and Warren,
Ohio, from entities related to Severstal US Holdings LLC. RG
Steel also owns finishing facilities in Yorkville and Martins
Ferry, Ohio. It also owns Wheeling Corrugating Company and has a
50% ownership in Mountain State Carbon and Ohio Coatings Company.
RG Steel along with affiliates, including WP Steel Venture LLC,
sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12-
11661) on May 31, 2012, to pursue a sale of the business. The
bankruptcy was precipitated by liquidity shortfall and a dispute
with Mountain State Carbon, LLC, and a Severstal affiliate, that
restricted the shipment of coke used in the steel production
process.
The Debtors estimated assets and debts in excess of $1 billion as
of the Chapter 11 filing. The Debtors owe (i) $440 million,
including $16.9 million in outstanding letters of credit, to
senior lenders led by Wells Fargo Capital Finance, LLC, as
administrative agent, (ii) $218.7 million to junior lenders, led
by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million
on account of a subordinated promissory note issued by majority
owner The Renco Group, Inc., and (iv) $100 million on a secured
promissory note issued by Severstal.
Judge Kevin J. Carey presides over the case.
The Debtors are represented in the case by Robert J. Dehney, Esq.,
and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP,
and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T.
Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the
Debtors.
Conway MacKenzie, Inc., serves as the Debtors' financial advisor
and The Seaport Group serves as lead investment banker. Donald
MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson
Consultants LLC is the claims and notice agent.
Wells Fargo Capital Finance LLC, as Administrative Agent, is
represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo,
Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura
Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang
Ziehi & Jones LLP.
Renco Group is represented by lawyers at Cadwalader, Wickersham &
Taft LLP.
RIVERS PITTSBURGH: S&P Ups Corp. Credit Rating to 'B'; Off Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Rivers Pittsburgh Borrower (RPB), the operator of the
Rivers Casino in Pittsburgh, to 'B' from 'CCC+', and removed the
rating from CreditWatch, where it was placed with positive
implications on May 21, 2012. The rating outlook is stable.
"In addition, we assigned our 'BB-' issue-level and '1' recovery
ratings to the company's new first-lien senior secured credit
facilities, which consists of a $15 million revolving credit
facility and a $185 million term loan A, both due 2017. We also
assigned our 'B' issue-level and '4' recovery ratings to the
company's $275 million second-lien senior secured notes due 2019,"
S&P said.
The company used 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.
"The upgrade reflects our view that RPB's refinancing creates a
more sustainable capital structure and significantly reduces the
company's total interest burden," said Standard & Poor's credit
analyst Jennifer Pepper. "Additionally, the repayment of the
company's senior preferred capital, which was accruing PIK
interest at 27.5%, substantially reduces future claims on cash."
"The corporate credit rating on RPB reflects our assessment of the
company's business risk profile as 'weak' and our assessment of
the company's financial risk profile as 'highly leveraged,'
according to our criteria," S&P said.
"Our assessment of RPB's business risk profile as weak reflects
its reliance on a single gaming property in an intensifying
competitive environment, marked by the recent opening of a new
gaming facility in Cleveland, but also a competitive position that
we view as defensible given the location and quality of the
asset," S&P said.
"Our assessment of HGB's financial risk profile as highly
leveraged reflects leverage in excess of 8x when adjusted for
about $150 million third-party PIK debt. There are additional
preferred interests in RPB's capital structure held by the
company's primary shareholder, but we view these instruments as
essentially benign in the intermediate term as they do not carry
mandatory redemption provisions or maturity dates and are not
redeemable," S&P said.
ROSETTA GENOMICS: Closes Sale of 570,755 Ordinary Shares
--------------------------------------------------------
Rosetta Genomics Ltd. closed the previously announced sale of
570,755 ordinary shares at a price of $11.50 per Share to various
investors in a registered direct offering. Aegis Capital Corp.
served as the exclusive placement agent for the Offering.
The net proceeds to Rosetta from the Offering, after deducting
placement agent's fees and expenses and Rosetta's estimated
Offering expenses are expected to be approximately $6.0 million.
Rosetta intends to use the net proceeds for its operations and for
other general corporate purposes, including, but not limited to,
repayment or refinancing of existing indebtedness or other
corporate borrowings, working capital, intellectual property
protection and enforcement, capital expenditures, investments,
acquisitions or collaborations, research and development and
product development. Based on current operations, Rosetta expects
that its existing funds, together with the net proceeds from the
Offering, will be sufficient to fund operations for at least the
next 16 months.
As previously announced, on April 17, 2012, Rosetta received
notice from The NASDAQ Stock Market LLC that it was not in
compliance with NASDAQ's stockholders' equity requirement for
continued listing on The NASDAQ Capital Market of $2.5 million.
Pursuant to the NASDAQ Listing Rules, Rosetta was afforded the
opportunity to submit a plan of compliance for the NASDAQ Staff's
consideration by June 1, 2012. Based upon the completion of the
Offering, Rosetta believes that as of May 31, 2012, its
stockholders' equity exceeds the NASDAQ requirement of $2.5
million. Also as previously announced, pursuant to the NASDAQ
Listing Rules, Rosetta was afforded a grace period to regain
compliance with the $1.00 per share bid price requirement by
demonstrating at least ten consecutive days of a closing bid price
of at least $1.00 per share on or before May 29, 2012. On May 29,
2012, Rosetta demonstrated its tenth consecutive day with a
closing bid price in excess of $1.00 per share, and on May 30,
2012, Rosetta received a notification from NASDAQ that it had
regained compliance with the bid price requirement. Rosetta is
awaiting confirmation from NASDAQ that it now satisfies all
applicable requirements for continued listing on The NASDAQ
Capital Market and intends to make a further announcement upon
receipt of that confirmation.
About Rosetta
Located in Rehovot, Israel, Rosetta Genomics Ltd. is seeking to
develop and commercialize new diagnostic tests based on a recently
discovered group of genes known as microRNAs. MicroRNAs are
naturally expressed, or produced, using instructions encoded in
DNA and are believed to play an important role in normal function
and in various pathologies. The Company has established a CLIA-
certified laboratory in Philadelphia, which enables the Company to
develop, validate and commercialize its own diagnostic tests
applying its microRNA technology.
In its auditors' report for the 2011 financial statements, Kost
Forer Gabbay & Kasierer, in Tel-Aviv, Israel, expressed
substantial doubt about Rosetta Genomics' ability to continue as a
going concern. The independent auditors noted that the Company
has incurred recurring operating losses and generated negative
cash flows from operating activities in each of the three years in
the period ended Dec. 31, 2011.
The Company reported a net loss after discontinued operations of
$8.83 million on $103,000 of revenues for 2011, compared with a
net loss after discontinued operations of $14.76 million on
$279,000 of revenues for 2010.
The Company's balance sheet at Dec. 31, 2011, showed $2.04 million
in total assets, $2.40 million in total liabilities, and a
stockholders' deficit of $356,000.
Bankruptcy Warning
The Company said in its annual report for the year ended Dec. 31,
2011, "We have used substantial funds to discover, develop and
protect our microRNA tests and technologies and will require
substantial additional funds to continue our operations. Based on
our current operations, our existing funds, including the proceeds
from the January 2012 debt financing, will only be sufficient to
fund operations until late May, 2012. We intend to seek funding
through collaborative arrangements and public or private equity
offerings and debt financings. Additional funds may not be
available to us when needed on acceptable terms, or at all. In
addition, the terms of any financing may adversely affect the
holdings or the rights of our existing shareholders. For example,
if we raise additional funds by issuing equity securities, further
dilution to our then-existing shareholders may result. Debt
financing, if available, may involve restrictive covenants that
could limit our flexibility in conducting future business
activities. If we are unable to obtain funding on a timely basis,
we may be required to significantly curtail one or more of our
research or development programs. We also could be required to
seek funds through arrangements with collaborators or others that
may require us to relinquish rights to some of our technologies,
tests or products in development or approved tests or products
that we would otherwise pursue on our own. Our failure to raise
capital when needed will materially harm our business, financial
condition and results of operations, and may require us to seek
protection under the bankruptcy laws of Israel and the United
States.
SABINE PASS: S&P Rates $2.575-Bil. Sr. Secured Term Loan 'BB+'
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'BB+'
rating to Sabine Pass Liquefaction LLC's (SPL) $2.575 billion
senior secured term loan A, and its $1.250 billion senior secured
term loan B, both due 2019. "In addition, we've assigned a
preliminary '3' recovery rating, indicating expectations of
meaningful (50% to 70%) recovery if a payment default occurs. The
preliminary rating is subject to our review of executed
documentation that includes terms that the sponsor Cheniere Energy
Partners L.P. (CQP; B+/Stable/--) has represented and that we have
included in our rating conclusion. We have not reviewed executed
documents, and we have not seen draft copies of several documents
including the intercreditor agreement, nonconsolidation opinion,
interest rate swap agreements, trustee agreements, pipeline
agreements, or gas supply agreements, either because they had not
been drafted at the time of our review or were not made available
to us. The final rating could differ if any terms change
materially," S&P said.
The outlook is stable.
"The rating reflects our expectation of stable cash flows from
long-term take-or-pay contracts with creditworthy counterparties
that support strong debt service coverage ratios," said Standard &
Poor's credit analyst Mark Habib. "At the same time, we cap the
rating at three notches above the rating on SPL's parent, CQP."
"The outlook is stable based on our assessment of current
construction arrangements and counterparty dependency assessments.
We consider an upgrade unlikely during construction, even if the
project is fully financed and we upgrade the counterparties, based
on the construction, structural, business, and financial risks.
After construction, we could raise the rating if performance meets
or exceeds our current expectations over the debt's tenor and the
reserve account is fully funded. We could lower the rating if
major construction problems result in significantly higher costs
or a delay in the schedule, if key counterparties' credit quality
deteriorates, if the project is not fully funded, or if the credit
profile at CQP, which current caps the SPL rating, deteriorates,"
S&P said.
SADLER CLINIC: Files for Chapter 11 With Liquidating Plan
---------------------------------------------------------
Sadler Clinic PLLC and Montgomery County Management Company, LLC,
filed a Chapter 11 petition (Bankr. S.D. Tex. Case Nos. 12-34546
and 12-34547) in Houston on June 15, 2012, with a plan to
liquidate the business after losing support from Hospital
Corporation of America.
The Debtors operated a multi specialty physician clinic known as
Sadler Clinic. Sadler Clinic was founded in 1958 by Dr. Deane
Sadler, Dr. Irving Watson and Dr. Walter Wilkerson. Sadler Clinic
grew steadily through the years. At its peak in 2010, Sadler
Clinic had 13 locations, over 100 providers, and a staff of more
than 600 healthcare professionals. In 2010, the Debtors' annual
revenue exceeded $250,000,000.
The Debtors began experiencing financial issues after the
departure of 24 physicians in April 2010. The Debtors' revenues
decreased immediately but the cost of running Salder Clinic,
however, remained at pre-departure levels. Soon, the creditors
could not be paid timely and a back log of accounts payable built
up.
In an effort to solve the financial difficulties facing the
Debtors in 2010, the Debtors explored various opportunities for
restructuring their business and operations.
On Feb., 17, 2012, the Debtors sold the majority of their assets
to Hospital Corporation of America (HCA) for $21.3 million
pursuant to the Asset Purchase Agreement. The related affiliated
agreement provided for a lease of the equipment, furniture and
software back to the Debtors, and a revenue participation by HCA.
But the sale and affiliate agreement did not solve the Debtors'
problems. Insufficient funds precluded the Debtors from right
sizing its balance sheet.
At the beginning of May 2012, the Debtors began defaulting on
numerous obligations to HCA.
The Debtors prepared a restructuring plan but was unable to obtain
support of a plan from HCA.
In an effort to develop an operating chapter 11 model, the Debtors
prepared operational and financial restructuring plans. Pursuant
to one of the plans, the Debtors terminated certain low-producing
doctors, consolidated from 11 locations to four locations and
decreased the amount of equipment leased from HCA. The Debtors
considered implementing its restructuring plan through a chapter
11 plan of reorganization which would cap the damage claims under
long-term leases. After HCA declined to support the plan, the
Debtors as a result sent a letter to HCA terminating the
affiliation agreement on May 30, 2012.
The Debtors are now preparing for an orderly liquidation. Over the
last several weeks, the Debtors have terminated nearly all of
their physician employees and staff. The Debtors are also working
with their former physician employees and landlords to assign
leases to the physicians and reduce the lease damages against the
Debtors. The Debtors are also working with HCA to protect HCA's
equipment and re-deploy the equipment to the Debtors' former
physicians. Finally, the Debtors are working on formulating a
long-term plan to maintain medical records and address requests
for medical records from doctors and patients.
According to the disclosure statement explaining the Debtors'
Chapter 11 plan, unsecured creditors with claims aggregating $31
million are expected to recover 4% of their claims. Higher ranked
creditors, including HCA, will recover 100 cents on the dollar.
HCA, which has a $3.378 million claim under the affiliation
agreement, will be paid over time and is still impaired under the
Plan. Holders of equity interests in Sadler will be paid after
all unsecured creditors are paid in full.
A copy of the Disclosure Statement is available for free at:
http://bankrupt.com/misc/Sadler_Clinic_DS.pdf
SAVERS INC: S&P Lowers Corp. Credit Rating to 'B'; Outlook Stable
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Bellevue, Wash.-based for-profit thrift store operator
Savers Inc. to 'B' from 'B+'. The outlook is stable.
"At the same time, we assigned 'B' issue-level and '3' recovery
ratings to the company's proposed $75 million revolver and $655
million term loan. The '3' recovery ratings indicate our
expectation for meaningful (50% to 70%) recovery of principal in
the event of a payment default," S&P said.
"Private-equity firms Leonard Green & Partners L.P. and TPG
Capital, in partnership with Savers Inc. Chairman Thomas Ellison
and the company's management team, are acquiring Savers in a $1.7
billion LBO. Savers expects to fund the LBO with proceeds from the
term loan, $295 million in unsecured notes (unrated), $8 million
in revolver borrowing and $764 million in common equity from the
private-equity sponsors, Mr. Ellison, and the management team,"
S&P said.
"The rating on Savers reflects our expectation that despite
moderate operational gains the company's financial risk profile
will remain 'highly leveraged' in the coming year," said Standard
& Poor's credit analyst Diya Iyer.
"The rating outlook is stable. We believe Savers will continue to
perform well over the near term as still-high unemployment and a
weak U.S. housing market spur demand for used goods," S&P said.
"We would consider lowering our rating if the integration of the
Apogee store base faltered or if U.S. and Canadian economic
slowdowns led to lower-than-expected charitable donations and
subsequent merchandising supply shortages. This would lead to
slower revenue growth and margin contraction such that leverage
would remain in the 7x-range. In our view, that could occur if
sales grow in the single-digit percentage area or gross margin
declines 50 bps in fiscal 2012. This would result in EBITDA
declining about 5% from current pro forma levels. We could also
lower ratings if the company's new owners add significant
additional debt in the coming year to fund a dividend or
acquisition in the intermediate term," S&P said.
"Given Savers' credit measures, U.S. expansion plans, and Apogee
integration risks, we are not expecting to raise our ratings over
the coming year," S&P said.
SECURITY EXCHANGE BANK: Closed; Fidelity Bank Assumes All Deposits
------------------------------------------------------------------
Security Exchange Bank of Marietta, Ga., was closed on Friday,
June 15, by the Georgia Department of Banking and Finance, which
appointed the Federal Deposit Insurance Corporation as receiver.
To protect the depositors, the FDIC entered into a purchase and
assumption agreement with Fidelity Bank of Atlanta, Ga., to assume
all of the deposits of Security Exchange Bank.
The two branches of Security Exchange Bank will reopen during
their normal banking hours as branches of Fidelity Bank.
Depositors of Security Exchange Bank will automatically become
depositors of Fidelity Bank. Deposits will continue to be insured
by the FDIC, so there is no need for customers to change their
banking relationship in order to retain their deposit insurance
coverage up to applicable limits. Customers of Security Exchange
Bank should continue to use their existing branch until they
receive notice from Fidelity Bank that it has completed systems
changes to allow other Fidelity Bank branches to process their
accounts as well.
As of March 31, 2012, Security Exchange Bank had approximately
$151.0 million in total assets and $147.9 million in total
deposits. In addition to assuming all of the deposits of the
failed bank, Fidelity Bank agreed to purchase essentially all of
the assets.
The FDIC and Fidelity Bank entered into a loss-share transaction
on $102.8 million of Security Exchange Bank's assets. Fidelity
Bank will share in the losses on the asset pools covered under the
loss-share agreement. The loss-share transaction is projected to
maximize returns on the assets covered by keeping them in the
private sector. The transaction also is expected to minimize
disruptions for loan customers. For more information on loss
share, please visit:
http://www.fdic.gov/bank/individual/failed/lossshare/index.html
Customers with questions about the transaction should call the
FDIC toll-free at 1-800-760-3641. Interested parties also can
visit the FDIC's Web site at
http://www.fdic.gov/bank/individual/failed/securityexchange.html
The FDIC estimates that the cost to the Deposit Insurance Fund
will be $34.3 million. Compared to other alternatives, Fidelity
Bank's acquisition was the least costly resolution for the FDIC's
DIF. Security Exchange Bank is the 30th FDIC-insured institution
to fail in the nation this year, and the fifth in Georgia. The
last FDIC-insured institution closed in the state was Covenant
Bank & Trust, Rock Spring, on March 23, 2012.
SHERIDAN HEALTHCARE: S&P Rates New $670MM First Lien Credit 'B+'
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned ratings to Sunrise,
Fla.-based Sheridan Holdings Inc.'s proposed senior secured first-
lien credit facility, consisting of a $100 million revolver due
2017 and a $570 million term loan due 2018. The credit facility
was rated 'B+' (at the same level as the 'B+' corporate credit
rating on parent company Sheridan Healthcare Inc.) with a recovery
rating of '3', indicating our expectation of meaningful (50% to
70%) recovery for lenders in the event of a payment default," S&P
said.
"We also assigned ratings to the company's proposed $140 million
senior secured second-lien term loan due 2019. The second-lien
loan was rated 'B-' (two notches lower than the 'B+' corporate
credit rating) with a recovery rating of '6', indicating our
expectation of negligible (0% to 10%) recovery for lenders in the
event of a payment default," S&P said.
The 'B+' corporate credit rating on the company was affirmed. The
rating outlook is stable.
"Sheridan will use loan proceeds to refinance its $485 million
first-lien term loan and $150 million second-lien term loan. We
believe that about $50 million of the proceeds will be cash on the
balance sheet, but expect that the company would use it for
acquisitions in the near term. It will use the remaining funds for
transaction fees and expenses," S&P said.
"The 'B+' corporate credit rating reflects Standard & Poor's
expectation that the company's financial risk profile will remain
'aggressive', with leverage below 5x. We assess the company's
business risk profile as 'weak,' given its geographic
concentration and narrow operating focus, which intensifies
reimbursement risk. Our base-case scenario assumes organic revenue
growth in the mid-single-digit range, driven by commercial payor
price increases and some increase in surgical volume; we expect
EBITDA margins to be stable in the upper teens. Our base-case
economic view is that there will be modest improvement in
employment levels this year; higher levels of privately insured
patients should indicate moderately higher surgical volume," S&P
said.
"The company has a large debt burden as a result of its $925
million leveraged buyout (LBO) in 2007 by private-equity firm
Hellman & Friedman--Sheridan's third financial sponsor in the past
decade. Still, Sheridan has reduced debt leverage significantly,
mostly by growing EBITDA organically and through disciplined
acquisitions. The rating considers our expectation that management
will use its cash flow for accretive acquisitions and that credit
metrics will continue to improve over the next year, but remain
commensurate with our aggressive financial risk (i.e., debt
leverage between 4x and 5x). Leverage at March 31, 2012 was 4.7x.
Given the proposed refinancing, there are no near-term
maturities," S&P said.
SOLAR TRUST: New Ownership Claim Clouds Planned Solar Plant Sale
----------------------------------------------------------------
Jamie Santo at Bankruptcy Law360 reports that Global Finance Corp.
launched an adversary complaint in Delaware bankruptcy court on
Thursday asserting ownership of a planned 500-megawatt solar plant
project that Solar Trust of America LLC plans to sell at a Chapter
11 auction this week.
Las Vegas-based GFC contends it is now the rightful owner of the
500-megawatt Amargosa Valley project in Nevada because Solar Trust
reneged on the terms of their joint development agreement,
according to Bankruptcy Law360.
About Solar Trust
Solar Trust of America LLC, Solar Millennium Inc., and nine
affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead
Case No. 12-11136) on April 2, 2012.
Solar Trust is a joint venture created by Solar Millennium AG and
Ferrostaal AG to develop solar projects at locations in California
and Nevada. Located in the "Solar Sun Belt" of the American
Southwest, the project sites have extremely high solar radiation
levels, and allow the Debtors' projects to harness high levels of
solar power generation. Projects include the rights to develop
one of the world's largest permitted solar plant facilities with
capacity of 1,000 MW in Blythe, California. Two other projects
contemplated 500 MW solar power facilities in Desert Center,
California and Amargosa Valley, Nevada.
Although the Debtors have obtained highly valuable transmission
right and permits, each project is only in the developmental phase
and does not generate revenue for the Debtors. Ferrostaal ceased
providing funding two years ago and SMAG, due to its own
deteriorating financial condition, stopped providing funding after
December 2011.
NextEra Energy Resources LLC has committed to provide a
postpetition secured credit facility and has expressed an interest
in serving as stalking horse purchaser for certain of the Debtors'
assets.
Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as
counsel to the Debtors. K&L Gates LLP is the special corporate
counsel.
Ridgecrest Solar Power Project, LLC, and two entities filed for
Chapter 11 protection (Bankr. D. Del. Case Nos. 12-11204 to
12-11206) on April 10, 2012.
Ridgecrest Solar, et al., are affiliates of Solar Trust of America
LLC. STA Development, LLC, one of the debtors that filed for
bankruptcy April 2, owns 100% of the interests in Ridgecrest, et
al.
Ridgecrest Solar Power estimated up to $50,000 in assets and
debts. Ridgecrest Solar I, LLC, estimated up to $50,000 in assets
and up to $10 million in liabilities.
SPRINT NEXTEL: Owns 57% of Clearwire Class A Common Shares
----------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Sprint Nextel Corporation and its affiliates
disclosed that, as of June 8, 2012, they beneficially own
705,359,348 shares of Class A common stock of Clearwire
Corporation representing 57% of the shares outstanding. A copy of
the filing is available for free at http://is.gd/RtStOJ
About Sprint Nextel
Overland Park, Kan.-based Sprint Nextel Corp. (NYSE: S)
-- http://www.sprint.com/-- is a communications company offering
a comprehensive range of wireless and wireline communications
products and services that are designed to meet the needs of
individual consumers, businesses, government subscribers and
resellers.
The Company's balance sheet at March 31, 2012, showed
$50.61 billion in total assets, $40.02 billion in total
liabilities, and $10.59 billion in total shareholders' equity.
* * *
In February 2012, Moody's Investors Service assigned a B3 rating
to Sprint Nextel's proposed offering of Senior Unsecured Notes and
a Ba3 rating to Sprint's proposed offering of Junior Guaranteed
Unsecured Notes. The proceeds will be used for general corporate
purposes, the repayment of existing debt, network expansion and
modernization, and the potential funding of Clearwire. All of
Sprint's ratings remain on review for possible downgrade,
including those assigned and the company's B1 corporate family
rating and B1 probability of default rating.
Standard & Poor's Ratings Services assigned its 'BB-' issue-level
rating and '2' recovery rating to Sprint's proposed $1 billion of
senior guaranteed notes due 2020. These notes have subordinated
guarantees from all the subsidiaries that guarantee the existing
$2.25 billion revolving credit facility. The '2' recovery rating
indicates expectations for substantial (70% to 90%) recovery in
the event of payment default.
Fitch Ratings has assigned ratings to Sprint's $2 billion notes
offering. This includes a 'BB/RR2' rating to the junior
guaranteed unsecured notes due 2020 and a 'B+/RR4' rating to the
unsecured senior notes due 2017.
STAR BUFFET: Committee Taps Advisors Late in the Case
-----------------------------------------------------
Star Buffet, Inc. informed that the Creditors' committee had
retained legal and financial experts to explore alternatives to
the Company's Reorganization Plan. The Disclosure Statement
detailing the Reorganization Plan was approved by the Bankruptcy
Court on May 24, 2012. The company believes that the appointment
of legal and financial experts at this late date materially
lessens the likelihood of a successful resolution of the
bankruptcy proceeding for all stakeholders.
The confirmation hearing for the Plan is scheduled for July 12,
2012.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reported that the plan is designed to pay off $13.2 million in
debt. Payments required when the plan is approved will be made
with a $300,000 secured loan from the company's chief executive
who has about 45% of the stock. The secured creditor owed $5.7
million will be paid in four years and three months. Unsecured
creditors will begin receiving payments when the bank debt has
been paid.
About Star Buffet
Based in Arizona, Star Buffet, Inc. filed for Chapter 11
protection (Bankr. D. Ariz. Case No. 11-27518) on Sept. 28, 2011.
Judge George B. Nielsen Jr. presides over the case. S. Cary
Forrester, Esq., at Forrester & Worth, PLLC, represents the
Debtor. The Debtor estimated both assets and debts of between
$1 million and $10 million.
None of the Company's subsidiaries were included in the bankruptcy
filing except for Summit Family Restaurants, Inc.
STEINWAY MUSICAL: S&P Affirms 'B' Corp. Credit Rating; Off Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on Steinway Musical Instruments Inc. "At the same
time, we removed the rating from CreditWatch, where we had placed
it with developing implications on July 6, 2011. The outlook is
developing," S&P said.
"The developing outlook reflects the uncertainty associated with
the outcome of the company's strategic evaluation," said Standard
& Poor's credit analyst Jeffrey Burian. "Specific information
regarding the terms of any potential transaction is not yet
available, and we will assess the impact on Steinway's business
risk profile, financial risk profile, and overall corporate credit
rating as more information becomes available."
"The developing outlook means that Standard & Poor's could
potentially lower or raise the ratings depending upon the outcome
of Steinway's strategic review," S&P said.
Steinway had $71 million of total debt outstanding as of March 31,
2012.
"The ratings on Steinway reflect our view that the company's
financial risk profile has improved to 'aggressive' from 'highly
leveraged,' and business risk profile has declined to 'vulnerable'
from 'weak.' Key credit factors in our assessment of Steinway's
business risk profile include its narrow business focus, the
discretionary nature of its products, and its vulnerability to
economic cycles. We also considered the benefits of Steinway's
good market positions, its well-recognized brand names, and the
geographic diversity of its sales," S&P said.
STERLING SHOES: CCAA Stay Order Extended Until Oct. 15
------------------------------------------------------
Sterling Shoes Inc. and Sterling Shoes GP Inc. obtained an order
on June 14, 2012 from the Supreme Court of British Columbia under
the Companies' Creditors Arrangement Act (Canada) extending the
stay of proceedings initially granted pursuant to the Initial
Order obtained by the Company on Oct. 21, 2011.
The Extension Order extends the stay period until Oct. 15, 2012,
to be further extended as required and approved by the Court.
During this period, all proceedings on the part of the Company's
creditors continue to be stayed.
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.
SUN PRODUCTS: S&P Affirms 'B-' Corp. Credit Rating; Outlook Neg
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B-' corporate
credit rating on Wilton, Conn.-based The Sun Products Corp. The
outlook is negative.
"In addition, we lowered our issue rating on the company's first-
lien senior secured credit facilities to 'B' (one notch above than
the corporate credit rating) from 'B+'. We revised the recovery
rating on the company's first-lien secured debt to '2', indicating
our expectation for substantial (70% to 90%) recovery in the event
of a payment default, from '1'. At the same time, we affirmed our
'CCC' issue rating (two notches below the corporate credit rating)
on Sun Products' senior secured second-lien term loan facility.
The recovery rating on this debt remains '6', indicating our
expectation for negligible (0% to 10%) recovery in the event of a
payment default," S&P said.
"Our lowering the rating on Sun Products' first-lien secured debt
primarily reflects our view that recovery prospects will be weaker
for first-lien secured lenders in the event of a payment default,
based on a lower enterprise value under our simulated default
scenario," said Standard & Poor's credit analyst Mark Salierno.
"Our reduced valuation reflects the company's ongoing declines in
profitability declines in the business."
"Our affirmation of the 'B-' corporate credit rating on the
detergent and households products company reflects our expectation
that the company's operating performance will stabilize somewhat
in 2012, and that the company will address its debt maturities
ahead of the maturity dates, with some improvement in cash flow
and EBITDA margins. However, the negative outlook reflects our
opinion that liquidity is 'less than adequate,' based on the high
refinancing risk that the company faces over the next two years
(Sun Products has a $125 million revolving credit facility that
matures in April 2013, and about $1 billion of term loans coming
due in 2014). In addition, we believe that highly competitive
industry conditions will limit a more pronounced rebound in the
company's business performance over the next one to two years,"
S&P said.
"Our ratings on Sun Products reflect our view that the company
will maintain a 'vulnerable' business risk profile and a 'highly
leveraged' financial risk profile," S&P said.
TIMMINCO LIMITED: Closes Assets Sales; CCAA Stay Extended Sept. 30
------------------------------------------------------------------
Timminco Limited and its wholly-owned subsidiary Becancour Silicon
Inc. have closed the sales transactions contemplated by the
Successful Bid, which was comprised of: (i) the bid submitted by
QSI Partners Ltd., a subsidiary of Globe Specialty Metals, Inc.,
for substantially all of the silicon metal business and assets of
Becancour Silicon, including its 51% ownership interest in Quebec
Silicon Limited Partnership; and (ii) the bid submitted by Grupo
FerroAtlantica S.A., for substantially all of the assets relating
to the inactive solar grade silicon business formerly conducted by
Timminco Solar, a division of Becancour Silicon.
The proceeds of sale are being held by FTI Consulting Canada Inc.,
as the Court-appointed monitor for the Company, and will be
disbursed in accordance with applicable priorities and orders of
the Ontario Superior Court of Justice.
"I very much appreciate the dedication of everyone at Timminco,
Becancour Silicon and QSLP that worked so diligently over the past
several months to successfully complete these complicated
transactions," said Mr. Douglas A. Fastuca, Chief Executive
Officer of the Company. "I'd also like to thank the teams at
Globe and FerroAtlantica for their perseverance and
professionalism throughout the process. Congratulations and we
wish you the very best in the future."
In addition, the Company also announced that, in connection with
the proceedings commenced by the Company under the Companies'
Creditors Arrangement Act on Jan. 3, 2012, the Court has approved
a claims procedure for soliciting and adjudicating claims that may
be submitted by creditors and other stakeholders against the
Company. The Court also granted an order extending the CCAA stay
of proceedings from June 20, 2012 to Sept. 30, 2012.
TRIBUNE CO: Bank Debt Trades at 34% Off in Secondary Market
-----------------------------------------------------------
Participations in a syndicated loan under which Tribune Co. is a
borrower traded in the secondary market at 65.94 cents-on-the-
dollar during the week ended Friday, June 15, an increase of 1.69
percentage points from the previous week according to data
compiled by Loan Pricing Corp. and reported in The Wall Street
Journal. The Company pays 300 basis points above LIBOR to borrow
under the facility. The bank loan matures on May 17, 2014. The
loan is one of the biggest gainers and losers among 137 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
About Tribune Co.
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8,
2008. The Debtors proposed Sidley Austin LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North America LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets
and $12,972,541,148 in total debts. Chadbourne & Parke LLP and
Landis Rath LLP serve as co-counsel to the Official Committee of
Unsecured Creditors. AlixPartners LLP is the Committee's
financial advisor. Landis Rath Moelis & Company serves as the
Committee's investment banker. Thomas G. Macauley, Esq., at
Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the
Committee in connection with the lawsuit filed against former
officers and shareholders for the 2007 LBO of Tribune.
Protracted negotiations and mediation efforts and numerous
proposed plans of reorganization filed by Tribune Co. and
competing creditor groups have delayed Tribune's emergence from
bankruptcy. Many of the disputes among creditors center on the
2007 leveraged buyout fraudulence conveyance claims, the
resolution of which is a key issue in the bankruptcy case. The
bankruptcy court has scheduled a May 16 hearing on Tribune's plan.
Tribune CRO Don Liebentritt said it is possible the media company
could emerge late in the third quarter of 2012.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRONOX INC: Witness Says Kerr-McGee Misstated Liabilities
---------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that a Tronox Inc.
accounting expert took the stand Thursday in a trial pitting the
company against ex-parent Kerr-McGee Corp. over legacy
environmental liabilities the pigment maker was allegedly saddled
with, testifying that flawed reserve practices caused
understatements in Tronox's environmental and tort liabilities.
According to Bankruptcy Law360, AlixPartners LLP managing director
Robert J. Rock, testifying in the monthslong trial before U.S.
Bankruptcy Judge Allan L. Gropper in Manhattan, said Kerr-McGee
employed flawed practices for setting reserves for possible
environmental and litigation liabilities ahead of its November
2005 initial public offering.
About Tronox Inc.
Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 09-
10156) on Jan. 13, 2009, before Hon. Allan L. Gropper. Richard M.
Cieri, Esq., Jonathan S. Henes, Esq., and Colin M. Adams, Esq., at
Kirkland & Ellis LLP in New York, represented the Debtors. The
Debtors also tapped Togut, Segal & Segal LLP as conflicts counsel;
Rothschild Inc. as investment bankers; Alvarez & Marsal North
America LLC, as restructuring consultants; and Kurtzman Carson
Consultants served as notice and claims agent.
An official committee of unsecured creditors and an official
committee of equity security holders were appointed in the cases.
The Creditors Committee retained Paul, Weiss, Rifkind, Wharton &
Garrison LLP as counsel.
Until Sept. 30, 2008, Tronox was publicly traded on the New
York Stock Exchange under the symbols TRX and TRX.B. Since then,
Tronox has traded on the Over the Counter Bulletin Board under the
symbols TROX.A.PK and TROX.B.PK. As of Dec. 31, 2008, Tronox
had 19,107,367 outstanding shares of class A common stock and
22,889,431 outstanding shares of class B common stock.
On Nov. 17, 2010, the Bankruptcy Court confirmed the Debtors'
First Amended Joint Plan of Reorganization under Chapter 11 of the
Bankruptcy Code, dated Nov. 5, 2010. Under the Plan, Tronox
reorganized around its existing operating businesses, including
its facilities at Oklahoma City, Oklahoma; Hamilton, Mississippi;
Henderson, Nevada; Botlek, The Netherlands and Kwinana, Australia.
TXU CORP: Bank Debt Trades at 41% Off in Secondary Market
---------------------------------------------------------
Participations in a syndicated loan under which TXU Corp., now
known as Energy Future Holdings Corp., is a borrower traded in the
secondary market at 58.80 cents-on-the-dollar during the week
ended Friday, June 15, an increase of 1.14 percentage points from
the previous week according to data compiled by Loan Pricing Corp.
and reported in The Wall Street Journal. The Company pays 450
basis points above LIBOR to borrow under the facility. The bank
loan matures on Oct. 10, 2017, and carries Moody's 'B2' rating and
Standard & Poor's 'CCC' rating. The loan is one of the biggest
gainers and losers among 137 widely quoted syndicated loans with
five or more bids in secondary trading for the week ended Friday.
About Energy Future
Energy Future Holdings Corp., formerly known as TXU Corp., is a
privately held diversified energy holding company with a portfolio
of competitive and regulated energy businesses in Texas. Oncor,
an 80%-owned entity within the EFH group, is the largest regulated
transmission and distribution utility in Texas.
The Company delivers electricity to roughly three million delivery
points in and around Dallas-Fort Worth. EFH Corp. was created in
October 2007 in a $45 billion leverage buyout of Texas power
company TXU in a deal led by private-equity companies Kohlberg
Kravis Roberts & Co. and TPG Inc.
The Company's balance sheet at Dec. 31, 2011, showed
$44.07 billion in total assets, $51.83 billion in total
liabilities, and a $7.75 billion total deficit.
Energy Future had a net loss of $1.91 billion on $7.04 billion of
operating revenues for the year ended Dec. 31, 2011, compared with
a net loss of $2.81 billion on $8.23 billion of operating revenues
during the prior year.
* * *
In late January 2012, Moody's Investors Service changed the rating
outlook for Energy Future Holdings Corp. (EFH) and its
subsidiaries to negative from stable. Moody's affirmed EFH's Caa2
Corporate Family Rating (CFR), Caa3 Probability of Default Rating
(PDR), SGL-4 Speculative Grade Liquidity Rating and the Baa1
senior secured rating for Oncor.
EFH's Caa2 CFR and Caa3 PDR reflect a financially distressed
company with limited flexibility. EFH's capital structure is
complex and, in our opinion, untenable which calls into question
the sustainability of the business model and expected duration of
the liquidity reserves.
TXU CORP: Bank Debt Trades at 38% Off in Secondary Market
---------------------------------------------------------
Participations in a syndicated loan under which TXU Corp., now
known as Energy Future Holdings Corp., is a borrower traded in the
secondary market at 61.60 cents-on-the-dollar during the week
ended Friday, June 15, an increase of 0.94 percentage points from
the previous week according to data compiled by Loan Pricing Corp.
and reported in The Wall Street Journal. The Company pays 350
basis points above LIBOR to borrow under the facility. The bank
loan matures on Oct. 10, 2014, and carries Standard & Poor's CCC
rating. The loan is one of the biggest gainers and losers among
137 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Friday.
About Energy Future
Energy Future Holdings Corp., formerly known as TXU Corp., is a
privately held diversified energy holding company with a portfolio
of competitive and regulated energy businesses in Texas. Oncor,
an 80%-owned entity within the EFH group, is the largest regulated
transmission and distribution utility in Texas.
The Company delivers electricity to roughly three million delivery
points in and around Dallas-Fort Worth. EFH Corp. was created in
October 2007 in a $45 billion leverage buyout of Texas power
company TXU in a deal led by private-equity companies Kohlberg
Kravis Roberts & Co. and TPG Inc.
The Company's balance sheet at Dec. 31, 2011, showed
$44.07 billion in total assets, $51.83 billion in total
liabilities, and a $7.75 billion total deficit.
Energy Future had a net loss of $1.91 billion on $7.04 billion of
operating revenues for the year ended Dec. 31, 2011, compared with
a net loss of $2.81 billion on $8.23 billion of operating revenues
during the prior year.
* * *
In late January 2012, Moody's Investors Service changed the rating
outlook for Energy Future Holdings Corp. (EFH) and its
subsidiaries to negative from stable. Moody's affirmed EFH's Caa2
Corporate Family Rating (CFR), Caa3 Probability of Default Rating
(PDR), SGL-4 Speculative Grade Liquidity Rating and the Baa1
senior secured rating for Oncor.
EFH's Caa2 CFR and Caa3 PDR reflect a financially distressed
company with limited flexibility. EFH's capital structure is
complex and, in our opinion, untenable which calls into question
the sustainability of the business model and expected duration of
the liquidity reserves.
UNIFI INC: S&P Withdraws 'B' Corp. Credit Rating on Request
-----------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'B' corporate
credit rating on Unifi Inc.
"Following the May redemption in full of the company's remaining
principal amount of its outstanding 11.5% senior secured notes due
2014, we no longer rate any of Unifi Inc.'s debt. We are
withdrawing the corporate credit rating on Unifi Inc. at the
request of the company," S&P said.
VAIL RESORTS: Moody's Affirms 'Ba2' CFR/PDR; Outlook Stable
-----------------------------------------------------------
Moody's Investors Service affirmed all existing ratings of Vail
Resorts, Inc. including the Ba2 Corporate Family Rating ("CFR"),
the Ba2 Probability of Default Rating and the Ba3 senior
subordinated notes rating. Moody's also assigned a first time
Speculative Grade Liquidity rating of SGL-1. The outlook remains
stable.
While the 2011/2012 ski season in the United States proved to be
very challenging due to very low snowfall levels, resulting in
weaker than expected operating performance for Vail, Moody's
affirmed the Ba2 CFR because of the company's ability to maintain
modest financial leverage, solid cash flow to debt metrics as well
as a very good liquidity profile.
Moody's believes that the improved consumer spending, Vail's
successful season pass program and ability to improve yield per
customer through pricing and ancillary business sales helped
partially mitigate the adverse impact of a roughly 12.1% decline
in visitation during the 2011/2012 ski season. "We currently
expect ski resort revenue to rebound modestly next year based on
positive indications from spring season pass sales for the
2012/2013 ski season, however remain cautious due to the on-going
macroeconomic uncertainties and will continue monitoring actual
bookings as the year progresses," commented Moody's lead analyst
John Zhao.
Rating assigned:
- Speculative Grade Liquidity Rating of SGL-1
Ratings affirmed:
- Corporate Family Rating at Ba2
- Probability of Default Rating at Ba2
- $390 million senior subordinated notes due 2019 at Ba3
(LGD 5, 76%)
Ratings Rationale
Vail's Ba2 corporate family rating reflects Vail's strong balance
sheet, modest leverage and solid cash flow to debt metrics as well
as good liquidity profile. The rating also considers the company's
position as owner and operator of premier destination ski resorts
in the western United States, its command of pricing power and the
industry's high entry barriers. Conversely, the rating is
constrained by the company's relatively small revenue size, low
overall margins and return on assets, and its earnings
concentration in the ski resort industry, which is highly seasonal
and sensitive to weather conditions. Additionally, Vail's rating
incorporates the capital intensive nature and high fixed cost
structure of its operations, and somewhat aggressive financial
policy.
The assignment of Speculative Grade Liquidity rating of SGL-1
denotes very good liquidity. The SGL-1 rating is based on Moody's
expectation that internally generated cash flow combined with
existing cash balances should be sufficient in funding working
capital fluctuations, the company's capital spending, debt service
requirements and dividend payments over the next 12 months. The
SGL-1 rating anticipates that Vail will be well in compliance with
debt covenants over that same period and will maintain a
significant amount of availability under its $400 million
revolving credit facility.
The stable outlook assumes a modest rebound in visitation in the
2012/2013 ski season, and steady revenue growth in the ski resort
business. The outlook also anticipates that Vail's core ski resort
business model will remain resilient and that the company's
current credit metrics will have some cushion to absorb future
shocks to earnings.
Negative rating pressure would develop if operating performance
deteriorates such that total debt/EBITDA (Moody's adjusted)
deteriorates to a level approaching 4.0 times and/or retained
cash/ net debt falls below 20%. Additionally, should the company
implement a more aggressive financial policy with share buy backs,
acquisitions or dividend distributions resulting in higher debt
levels or a weaker liquidity, downgrade pressures could develop.
Positive pressures are unlikely to develop in the near term,
considering the modest operating margin, relatively small revenue
size and high earnings volatility. Over time, in order to consider
any positive movement in Vail's ratings, the company would need to
improve its EBIT margin close to 15% and EBIT/Interest near 3.0
times on a sustained basis.
Vail is a publicly-traded holding company (NYSE: MTN) that owns
and operates through its subsidiaries seven premier ski resort
properties in the Colorado Rocky Mountains and the Lake Tahoe area
of California/Nevada, as well as ancillary businesses, primarily
including ski school, dining and retail/rental operations. The
company also owns and/or manages lodging properties, and develops
real estate in and around the resort communities. Net revenues for
the last twelve months ending April 30, 2012 were approximately
$1.0 billion.
The principal methodologies used in this rating were Global
Lodging & Cruise Industry Rating Methodology published in December
2010, and Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.
VITRO SAB: Disappointed by US Court's Clarification on Plan Order
-----------------------------------------------------------------
Vitro S.A.B. de C.V. disclosed that the U.S. Bankruptcy Court in
Dallas, Texas, has issued a clarification to its June 13, 2012
opinion regarding enforcement in the U.S. of Vitro's financial
restructuring. The Bankruptcy Court's clarification order made
clear that enforcement in the United States of Vitro's Mexican
court-approved Concurso plan was denied in its entirety. Vitro
intends to immediately seek appeal to the United States Court of
Appeals for the Fifth Circuit.
"We are disappointed by the judge's clarification in this matter,
and will appeal this decision," said Claudio Del Valle, Vitro's
Chief Restructuring Officer. Mr. del Valle added, "We will
continue to defend the enforcement of our restructuring."
Vitro's restructuring complied with applicable Mexican bankruptcy
law which, since its enactment in 2000 by the Mexican legislature,
has been recognized by U.S. courts in Chapter 15 proceedings
without exception as providing fair, clear rules for the
administration of multinational restructurings such as Vitro's.
Notably, no U.S. bankruptcy court has ever denied a request to
enforce a plan of reorganization approved under the Mexican
bankruptcy law in its 12 year history.
About Vitro SAB
Headquartered in Monterrey, Mexico, Vitro, S.A.B. de C.V. (BMV:
VITROA; NYSE: VTO), through its two subsidiaries, Vitro Envases
Norteamerica, SA de C.V. and Vimexico, S.A. de C.V., is a global
glass producer, serving the construction and automotive glass
markets and glass containers needs of the food, beverage, wine,
liquor, cosmetics and pharmaceutical industries.
Vitro is the largest manufacturer of glass containers and flat
glass in Mexico, with consolidated net sales in 2009 of MXN23,991
million (US$1.837 billion).
Vitro defaulted on its debt in 2009, and sought to restructure
around US$1.5 billion in debt, including US$1.2 billion in notes.
Vitro launched an offer to buy back or swap US$1.2 billion in debt
from bondholders. The tender offer would be consummated with a
bankruptcy filing in Mexico and Chapter 15 filing in the United
States. Vitro said noteholders would recover as much as 73% by
exchanging existing debt for cash, new debt or convertible bonds.
Concurso Mercantil & Chapter 15 Proceedings
Vitro SAB on Dec. 13, 2010, filed its voluntary petition for a
pre-packaged Concurso Plan in the Federal District Court for
Civil and Labor Matters for the State of Nuevo Leon, commencing
its voluntary concurso mercantil proceedings -- the Mexican
equivalent of a prepackaged Chapter 11 reorganization. Vitro SAB
also commenced parallel proceedings under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-16619) in Manhattan
on Dec. 13, 2010, to seek U.S. recognition and deference to its
bankruptcy proceedings in Mexico.
Early in January 2011, the Mexican Court dismissed the Concurso
Mercantil proceedings. But an appellate court in Mexico
reinstated the reorganization in April 2011. Following the
reinstatement, Vitro SAB on April 14, 2011, re-filed a petition
for recognition of its Mexican reorganization in U.S. Bankruptcy
Court in Manhattan (Bankr. S.D.N.Y. Case No. 11- 11754).
The Vitro parent received sufficient acceptances of its
reorganization by using the US$1.9 billion in debt owing to
subsidiaries to vote down opposition by bondholders. The holders
of US$1.2 billion in defaulted bonds opposed the Mexican
reorganization plan because shareholders could retain ownership
while bondholders aren't being paid in full.
Vitro announced in March 2012 that it has implemented the
reorganization plan approved by a judge in Monterrey, Mexico.
In the present Chapter 15 case, the Debtor seeks to block any
creditor suits in the U.S. pending the reorganization in Mexico.
Chapter 11 Proceedings
A group of noteholders opposed the exchange -- namely Knighthead
Master Fund, L.P., Lord Abbett Bond-Debenture Fund, Inc.,
Davidson Kempner Distressed Opportunities Fund LP, and Brookville
Horizons Fund, L.P. Together, they held US$75 million, or
approximately 6% of the outstanding bond debt. The Noteholder
group commenced involuntary bankruptcy cases under Chapter 11 of
the U.S. Bankruptcy Code against Vitro Asset Corp. (Bankr. N.D.
Tex. Case No. 10-47470) and 15 other affiliates on Nov. 17, 2010.
Vitro engaged Susman Godfrey, L.L.P. as U.S. special litigation
counsel to analyze the potential rights that Vitro may exercise
in the United States against the ad hoc group of dissident
bondholders and its advisors.
A larger group of noteholders, known as the Ad Hoc Group of Vitro
Noteholders -- comprised of holders, or investment advisors to
holders, which represent approximately US$650 million of the
Senior Notes due 2012, 2013 and 2017 issued by Vitro -- was not
among the Chapter 11 petitioners, although the group has
expressed concerns over the exchange offer. The group says the
exchange offer exposes Noteholders who consent to potential
adverse consequences that have not been disclosed by Vitro. The
group is represented by John Cunningham, Esq., and Richard
Kebrdle, Esq. at White & Case LLP.
A bankruptcy judge in Fort Worth, Texas, denied involuntary
Chapter 11 petitions filed against four U.S. subsidiaries. On
April 6, 2011, Vitro SAB agreed to put Vitro units -- Vitro
America LLC and three other U.S. subsidiaries -- that were
subject to the involuntary petitions into voluntary Chapter 11.
The Texas Court on April 21 denied involuntary petitions against
the eight U.S. subsidiaries that didn't consent to being in
Chapter 11.
Kurtzman Carson Consultants is the claims and notice agent to
Vitro America, et al. Alvarez & Marsal North America LLC, is the
Debtors' operations and financial advisor.
The official committee of unsecured creditors appointed in the
Chapter 11 cases of Vitro America, et al., has selected Sarah
Link Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP, in
Dallas, Texas, and Michael S. Stamer, Esq., Abid Qureshi, Esq.,
and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP,
in New York, as counsel. Blackstone Advisory Partners L.P.
serves as financial advisor to the Committee.
The U.S. Vitro companies sold their assets to American Glass
Enterprises LLC, an affiliate of Sun Capital Partners Inc., for
US$55 million.
U.S. subsidiaries of Vitro SAB are having their cases converted to
liquidations in Chapter 7, court records in January 2012 show. In
December, the U.S. Trustee in Dallas filed a motion to convert the
subsidiaries' cases to liquidations in Chapter 7. The Justice
Department's bankruptcy watchdog said US$5.1 million in bills were
run up in bankruptcy and hadn't been paid.
WABASH NATIONAL: S&P Assigns 'B+' Corporate Credit Rating
---------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to Lafayette, Ind.-based Wabash National Corp. The
outlook is stable.
"At the same time, we assigned the company's $300 million term
loan B a 'B+' issue rating and '4' recovery rating, indicating our
expectation of average (30% to 50%) recovery for debtholders in
the event of a payment default," S&P said.
"The ratings reflect our view of Wabash National Corp.'s business
profile as 'weak' and the financial profile as 'aggressive,'" S&P
said.
"We believe Wabash's acquisition of Walker Group Holdings could
transform Wabash into a more profitable company with steady cash
flow," said Standard & Poor's credit analyst Lawrence Orlowski.
"The acquisition should also provide opportunities for Wabash to
expand into new end markets and into other regions and countries.
We expect sales growth in 2012, boosted by solid North American
trailer and aftermarket demand. We believe some cost synergies
with Walker are possible in the next 12 months and that free cash
flow should enable some voluntary debt reduction over the next
few years," S&P said.
WIDEOPENWEST FINANCE: S&P Hikes Corporate Credit Rating to 'B'
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Englewood, Colo.-based cable service provider
WideOpenWest Finance LLC (WOW) to 'B' from 'B-' and removed it
from CreditWatch, where it was placed with positive implications
on April 18, 2012, following its agreement to acquire West Point,
Ga.-based cable operator Knology Inc. for about $1.5 billion. The
outlook is stable.
"We are also assigning a 'B' issue-level rating and '3' recovery
rating to the company's proposed $1.92 billion senior secured term
loan due 2019 and $200 million senior secured revolver due 2017.
The '3' recovery rating indicates our expectation for meaningful
(50%-70%) recovery in the event of payment default. Additionally,
we expect the company to issue about $1.02 billion of senior
unsecured notes at a later date, which we have factored into our
ratings," S&P said.
"In addition, we raised all existing issue-levels ratings on WOW
by one notch and removed them from CreditWatch Positive. All
recovery ratings on the debt remain unchanged. However, we expect
to withdraw the existing issue-level ratings on both WOW and
Knology when the transaction closes. We will also withdraw our
'B+' corporate credit rating on Knology," S&P said.
"The company plans to use proceeds from the new debt, coupled with
about $200 million of sponsor equity, to fund the $807 million
equity purchase price, refinance around $676 million of existing
Knology net debt and $1.5 billion of existing WOW debt, pay about
$156 million of transaction fees and related expenses, and add $23
million of cash to the balance sheet," S&P said.
"The upgrade reflects our improved view of WOW's business risk
profile, which we now consider 'fair' (as opposed to the previous
'weak') given the increased scale and improved geographic
diversity," said Standard & Poor's credit analyst Allyn Arden.
"Additionally, we believe the acquisition will enable WOW to
generate modest levels of free operating cash flow (FOCF) and
reduce leverage in the near term. Pro forma debt to EBITDA is
elevated, at around 6.8x and modestly higher than WOW's leverage
of about 6.7x as of March 31, 2012 (including a full quarter of
the recently acquired assets from Broadstripe). Our rating assumes
that leverage will remain at 7x or lower over the next two years."
"The outlook is stable and reflects our expectation for modest
revenue growth and EBITDA margins remaining in the mid-30% area
over the next year despite competitive pressures. Still, the
company's highly leveraged financial risk profile, especially
financial policy considerations surrounding the concentrated
ownership and history of shareholder-friendly actions, limit a
possible upgrade," S&P said.
"Conversely, we could lower the ratings if WOW were to initiate a
debt-financed acquisition or dividend to shareholders, which
results in leverage increasing to 7x or above without a clear path
to reduce leverage to the mid-6x area. Additionally, aggressive
competition that results in price compression and higher churn
could prompt a revision of our business risk profile assessment
back to 'weak' and result in a lower rating," S&P said.
WIRECO WORLDGROUP: Moody's Affirms 'B1' CFR; Outlook Negative
-------------------------------------------------------------
Moody's Investors Service affirmed WireCo WorldGroup Inc.'s
Corporate Family Rating at B1 and its Probability of Default
Rating at B1 but changed the rating outlook to negative from
stable. Concurrently, Moody's assigned a Ba2 rating to the
company's proposed $465 million senior secured bank credit
facility, but downgraded the rating of the $425 million Sr. Unsec.
Notes due 2017 to B3 from B2. These rating actions result from
WireCo's recent announcement that it is acquiring Netherlands-
based Koninklijke Lankhorst-Euronete Group B.V for approximately
$231.2 million, excluding fees and expenses. Proceeds from the
proposed bank credit facility and $82.5 million of other unsecured
debt will be used to facilitate the purchase of Lankhorst, to
refinance about $152 million of existing WireCo debt, to add about
$16 million of cash to the balance sheet, and to pay related fees
and expenses. WireCo's Speculative Grade Liquidity assessment
remains SGL-2.
The following rating actions were taken:
Corporate Family Rating affirmed B1;
Probability of Default Rating affirmed at B1;
Proposed Senior Secured Bank Credit Facility rated Ba2 (LGD2,
19%); and,
$425 million Senior Unsecured Notes due 2017 downgraded to B3
(LGD5, 76%) from B2 (LGD4, 69%).
Speculative Grade Liquidity assessment remains SGL-2.
Rating outlook changed to negative from stable
Ratings Rationale
WireCo's B1 corporate family rating incorporates Moody's
expectations that it will benefit from continued growth in its
primary end markets. Full-year earnings derived from Lankhorst and
the mid-November 2010 acquisition of Grupo Oliveira Sa, which
closed in mid-November 2010, will add to WireCo's global and
product diversification. Moody's also anticipates solid operating
margins in the mid-teens, net of foreign exchange fluctuations.
Supportive of the rating is the company's good liquidity profile
characterized by a much larger revolving credit facility. Upon
closing of the proposed bank credit facility, WireCo will have a
$135 million cash flow revolving credit facility versus the
company's existing $66 million asset-based revolving credit
facility. The doubling in the size of the revolving credit
facility and removal of borrowing base restrictions give WireCo
financial flexibility to contend with a more highly-leveraged
capital structure than Moody's had previously contemplated. The
debt-financed acquisition of Lankhorst will result in key leverage
credit metrics that are weak for the rating category. Moody's
projects that WireCo's adjusted debt leverage will be around 5.0
times range over the next 12 to 18 months and adjusted interest
coverage (defined as EBITA-to-interest expense) of about 2.0 times
over that time horizon. Lankhorst is the largest acquisition to
date for WireCo and could cause unexpected integration risk.
The negative rating outlook reflects Moody's view that the
company's capital structure will remain highly leveraged for the
current rating. Moody's also remains concerned about the overall
economic environment within the euro zone, since the acquisition
of Lankhorst will raise WireCo's European exposure to 44%. Moody's
recognizes, however, that WireCo is currently heavily concentrated
within northern Europe.
The corporate family rating and probability of default rating are
being reassigned to WireCo WorldGroup Inc., the primary obligor of
all rated debt, from WireCo WorldGroup (Cayman) Inc., parent
holding company of all of WireCo. The proposed transaction will
simplify WireCo's capital structure and eliminate the need to have
ratings assigned at the parent holding company entity. The
proposed partial refinancing of WireCo's capital structure pays
off its Term Loan due 2014 and EUR40.0 million asset-based Senior
Secured Revolving Credit Facility due 2016, whose ratings will be
withdrawn upon closing. WireCo WorldGroup (Cayman) Inc. will
guarantee all rated debt.
The Ba2 rating assigned to the proposed $460 million senior
secured bank credit facility, two notches above the corporate
family rating, primarily reflects its collateral and its position
in the capital structure. This bank facility consists of a $135
million revolving credit facility and a $325 million term loan
that will be pari passu to each other and will have a first
priority lien on the company's domestic and guarantors' assets.
WireCo WorldGroup (Cayman) Inc. will guarantee this debt as well
as that of most of its overseas operating subsidiaries. The
secured bank credit facility also benefits from approximately $408
million of more junior debt.
The downgrade of the $425 million Senior Unsecured Notes due 2017
to B3, two notches below the corporate family rating, from B2,
results from the large increase in more senior debt in WireCo's
capital structure. The proposed senior secured bank credit
facility represents a threefold increase in size compared with
WireCo's existing U.S. credit facilities, resulting in lower
recovery values for more junior debt and warranting the rating
downgrade to the Notes due 2017. WireCo has indicated that the
Notes due 2017 and the proposed $82.5 million Senior Unsecured
Notes due 2017 ("Mirror Notes" and unrated) would be pari passu to
each other in a recovery scenario.
Factors that might stress the ratings include erosion in the
company's financial performance due to an unexpected decline in
WireCo's end markets or deterioration in the company's liquidity
profile. Debt-to-EBITDA sustained above 5.0 times or EBITA-to-
interest expense remaining below 2.0 times (all ratios incorporate
Moody's adjustments) could pressure the rating.
Stabilization of the rating could occur if WireCo fully integrates
its acquisitions and demonstrates its ability to generate
meaningful earnings and significant levels of free cash flow that
result in Debt-to-EBITDA of around 4.5 times or EBITA-to-interest
trending towards 3.0 times (all ratios incorporate Moody's
adjustments).
The principal methodology used in rating WireCo was the Global
Manufacturing Industry Methodology, published December 2010. Other
methodologies used include Loss Given Default for Speculative
Grade Issuers in the US, Canada, and EMEA, published June 2009.
WireCo WorldGroup, Inc., headquartered in Kansas City, MO, is a
leading global manufacturer and seller of wire ropes, high-tech
synthetic ropes, electromechanical cable, and other related
products. The company sells into diverse industries including
infrastructure, industrials, oil and gas, mining, and marine and
fishing. Paine and Partners, LLC, through its respective
affiliates, owns about 80% and management owns the remaining 20%
of WireCo. Revenues for the twelve months through March 31, 2012
totaled approximately $633 million.
WIRECO WORLDGROUP: S&P Affirms 'B+' Corporate Credit Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on Kansas City, Mo.-based WireCo WorldGroup Inc. The
rating outlook is stable.
"At the same time, we assigned a 'BB-' issue rating (one notch
above the corporate credit rating) to the company's proposed $460
million senior secured credit facility due 2017, consisting of a
$135 million revolving credit facility and a $325 million term
loan. The recovery rating on the credit facility is '2',
indicating our expectation of substantial (70% to 90%) recovery in
the event of payment default," S&P said.
"In addition, we also affirmed our 'B' issue-level rating (one
notch below the corporate credit rating) on the company's $425
million senior unsecured notes due 2017. The recovery rating
remains a '5', indicating our expectation for modest (10% to 30%)
recovery in the event of a payment default," S&P said.
The company will use proceeds from the credit facility in part to
fund an acquisition as well as to repay a portion of debt
outstanding.
"The rating affirmation reflects our view that WireCo's operating
performance should improve over the next several quarters, which
should lead to credit metrics that are in line with the rating
despite higher debt," said Standard & Poor's credit analyst Megan
Johnston. "WireCo recently announced its intention to enter into a
new $460 million credit facility and $82.5 million of privately
placed senior unsecured notes (not rated) in part to finance its
pending acquisition of Koninklijke (Royal) Lankhorst Euronete
Group B.V. (Lankhorst, not rated), a leading synthetic producer
serving the offshore, oil and gas, fishing, and marine markets,
among others, for approximately $230 million, including debt
assumed. In our view, the Lankhorst acquisition increases WireCo's
end market, and geographic and product diversity."
"Under our base case scenario, we expect 2012 EBITDA of
approximately $180 million, an increase of more than 50% over 2011
because of the Lankhorst acquisition and better operating
performance amid improving economic conditions. Standard & Poor's
economists project 2.1% and 2.4% GDP growth in 2012 and 2013,
respectively. In 2013, excluding the impact of any additional
acquisitions, we expect EBITDA to increase to about $200 million
as the economy continues to improve and WireCo realizes synergies
from its recently integrated acquisitions," S&P said.
"As a result, we expect debt to EBITDA of about 5x by year-end
2012, in spite of higher debt to support the recent acquisitions.
In 2013, we expect debt to EBITDA to further improve to about
4.5x. We consider these metrics to be in line with the rating. We
also expect interest coverage and liquidity to remain 'adequate'
to finance internal working capital needs and capital
expenditures," S&P said.
"The rating on WireCo reflects Standard & Poor's assessment of the
company's business risk profile as 'weak' and financial risk
profile as 'aggressive.' The company is exposed to intensely
competitive and cyclical end markets, import penetration concerns,
and somewhat aggressive debt leverage for the rating. We believe
it will continue to pursue acquisitions in an effort to enhance
its product and end-market diversification. WireCo's penetration
into higher-margin businesses and its adequate near-term liquidity
partially offset these factors," S&P said.
"A key aspect of our assessment of WireCo's weak business risk
profile is the varying demand in its end markets. Historically,
downturns in general economic conditions have resulted in lower
product demand, excess manufacturing capacity, and lower average
selling prices. The company's flexible cost structure and
increased exposure to more value-added, higher-margin business
have enabled WireCo to maintain pricing and profitability even in
a downturn," S&P said.
"With operations in Europe, the U.S. and Mexico, WireCo
manufactures steel wire rope, synthetic rope, and steel wire for
use in various industrial end markets, including mining, oil and
gas, and construction. WireCo focuses on highly engineered
products that are less susceptible to competition from imports
because producers of imported wire rope primarily target general-
purpose applications. Nevertheless, we are concerned that
competition from international producers will continue to
intensify in the construction business as they begin to develop
more sophisticated products," S&P said.
"The stable rating outlook reflects our expectation that WireCo's
operating performance will improve in the next several quarters
because of the combination of recently completed acquisitions,
strong domestic sales growth, and increasing demand in cyclical
end markets amid an improving economy. We expect these trends to
continue into 2013. This should lead to improving profitability
and credit metrics despite higher debt. As a result, we expect
leverage to decline to about 5x in 2012 and further decline to
4.5x in 2013, levels we would consider to be in line with the
rating and aggressive financial risk profile," S&P said.
"We could lower the ratings if demand weakens; raw material costs
rise, hampering cash flow; the company fails to realize EBITDA
gains from recent acquisitions; or liquidity declines
unexpectedly, resulting in debt to EBITDA weakening to greater
than 6x. This could occur if 2012 revenues fail to strengthen and
gross margins fall below 26%," S&P said.
"An upgrade is less likely in the near term given the company's
somewhat aggressive financial policy. However, we could raise the
ratings if industry conditions strengthen sufficiently to allow
the company to reduce debt such that adjusted leverage improves to
less than 4x, and we expect it will stay there. This could occur
if operating efficiencies resulting from the integration of its
acquisitions result in sustainable gross margins in excess of
35%," S&P said.
* Healthcare Reform Ruling Not Positive for Non-Profit Hospitals
----------------------------------------------------------------
The three most likely outcomes of the US Supreme Court's review of
the constitutionality of federal healthcare reform would have
neutral or negative implications for the credit ratings of US not-
for-profit hospitals and healthcare systems, says Moody's
Investors Service in a new report.
The report, "US Supreme Court's Pending Decision on Healthcare
Reform: Credit Implications for Not-for-Profit Hospitals,"
analyzes the three most likely outcomes of the court's review of
the 2010 Patient Protection and Affordable Care Act (PPACA) in
terms of their likely effects on the not-for-profit health sector.
Those possible outcomes include upholding the law as a whole; a
court finding that the law's mandate that individuals purchase
health insurance is struck down while other provisions are
retained; and a third possible scenario in which the justices find
that the mandate is unconstitutional and that the law cannot stand
without it, striking down the entire law.
"If the court decides that the law as a whole is constitutional,
Moody's would view the ruling itself as a credit neutral event as
not-for-profit hospitals have been preparing to operate within the
full provisions of the law since its passage in April 2010," said
Moody's Mark Pascaris, author of the report. "Since its passage,
we have viewed healthcare reform as a net credit negative because
it mandates annual Medicare reimbursement reductions to hospitals,
which outweigh the benefits of lower rates of uncompensated care."
If the individual mandate is struck down but the court upholds
other provisions of PPACA, it would be a clear negative for the
not-for-profit healthcare sector, according to Moody's. "Without
the individual mandate -- which we consider the most credit
positive feature of healthcare reform for not-for-profit hospitals
-- the number of uninsured Americans will remain high," said
Pascaris. "This will result in continued growth in uncompensated
care provided by hospitals while Medicare reimbursement rate
increases would decelerate."
Finally, it would also be credit negative, says Moody's, if the
court finds the individual mandate unconstitutional and not
severable from the rest of the law, effectively striking down
healthcare reform. "The resulting absence of legislative and
regulatory framework for curtailing unsustainable Medicare
spending creates substantial new uncertainties and is credit
negative for the sector," said Mr. Pascaris. "Combined with
economic weakness, high unemployment, and the erosion of
healthcare coverage offered by employers, the net result could be
material pressure on not-for-profit hospital operating margins."
* Moody's Downgrades Rating on California TABs to 'Ba1'
-------------------------------------------------------
Moody's Investors Service has downgraded to Ba1 all California tax
allocation bonds that were rated Baa3 or higher. All of Moody's
California tax allocation bond ratings remain on review for
possible withdrawal. This continued review reflects the likelihood
that insufficient information will be available to evaluate the
relative probability of default due to the new cash flow pattern
established in the redevelopment dissolution law (AB 1x 26). The
new cash distribution procedure effectively eliminates bond
indentures' flow of funds, and it is clearly subject to differing
procedural interpretations. These differing interpretations can,
without warning, give rise to the potential for debt service
defaults that did not exist prior to the passage of this law.
Absent administrative or legislative correction of this weakness
in the law's terms, Moody's will likely withdraw its ratings on
California tax allocation bonds.
Rating Rationale
The downgrades for the bonds rated Baa3 and higher primarily
reflect the heightened cash flow risks arising from the
implementation of state legislation dissolving all redevelopment
agencies. This legislation effectively altered the flow of funds
to be used to pay bondholders.
Even with strong credit fundamentals and intact legal security,
timely debt service payments on California tax allocation bonds
cannot currently be assured. This uncertainty primarily arises
from the potential for legal and political disputes on the correct
procedure for distributing cash according to the redevelopment
agency dissolution law, AB 1x 26. This risk was recently
highlighted by a dispute (discussed below) between the City of San
Jose's Successor Agency and Santa Clara County that, according to
a public notice filed by the City of San Jose, threatens timely
payment of debt service in August despite sufficient tax increment
revenues derived from the legal pledge to bondholders.
The downgrade also reflects the absence of a robust mechanism
within the dissolution law itself to resolve such disputes and the
evolution of the California Department of Finance's guidelines on
distributing tax increment revenues. While the law has a
reallocation procedure in the event of a shortfall that results
solely from the new cash distribution procedure, the process for
resolving disputed calculations and varying legal interpretations
is not sufficiently detailed or prescribed so as to provide
assurances of full or timely bond payments. The resolution of such
issues may be left up to the courts if the state does not pass
additional "cleanup" legislation. The current state guidance to
county auditor-controllers to withhold property tax distributions
in the absence of a state approved payment schedule also injects
an element of payment timing uncertainty that did not exist prior
to the dissolution law's adoption.
While the implementation of the law has given rise to new cash
flow risks, Moody's believes the law is clear that fundamental
legal security for tax allocation bonds is intended to be
preserved. Therefore, Moody's would expect that any defaults
stemming solely from the new law's cash distribution procedure
would likely over time be corrected. Moody's believes that after a
default, recovery would likely be at or close to 100%.
All ratings remain on review for possible withdrawal due to the
potential that insufficient information will be available on a
continuing, long-term basis with which to determine the relative
probability of cash flow disputes leading to defaults.
Strengths
- Successor agencies, which replaced the dissolved redevelopment
agencies, remain explicitly obligated to honor existing bond
contracts, with recognition of legally pledged revenue streams,
debt service reserve funding requirements, and other performance
requirements in existing bond documents.
- County auditor-controllers have generally indicated a very
strong willingness and ability to comply with the new revenue
allocation requirements on a sufficiently timely basis to allow
successor agencies to meet existing debt service payment
obligations.
- In the long-run, existing contract law should protect
bondholder's interests, minimizing losses that might result solely
from new procedural requirements in the redevelopment dissolution
law.
Challenges
- While the legislature's intent to honor existing obligations is
clearly stated in the law, the mechanics of the new law do not
provide sufficient clarity on process to realize this intent.
- The law creates significant uncertainty with respect to timing
and mechanics of cash flows, which in Moody's views effectively
trumps the strength of the legal security and debt service
coverage of bonds.
- The law establishes an initial allocation of property tax
revenues that conflicts with existing bond documents, and the
effectiveness of the resolution process on a timely basis is
uncertain.
- The timeframe for property tax disbursements is more restricted
than it had been previously, potentially resulting in mismatched
receipt and disbursement schedules over the course of a year.
- The new law's audit requirements and sheer complexity have
resulted in unexpected payment delays. These will require legal
and/or administrative clarification.
What Could Make The Ratings Go Up
- Implementation of the legislation in a manner that clearly
preserves timely debt service payment and enables compliance with
bond documents
- Legislative or judicial clarification that compliance with bond
documents takes precedence over other, apparently conflicting
aspects of the legislation
What Could Make The Ratings Go Down
- Continued implementation of the legislation in a way that does
not clearly preserve timely debt service payment
- Continued legal uncertainty and conflict between the law's
requirements and strict compliance with existing bond documents
- Judicial determination that compliance with bond documents is
subordinate to, or to be balanced against, other objectives of the
legislation
The principal methodology used in this rating was Moody's Analytic
Approach To Rating California Tax Allocation Bonds published in
December 2003.
* BOND PRICING -- For Week From May 28 to June 1, 2012
------------------------------------------------------
Company Coupon Maturity Bid Price
------- ------ -------- ---------
AMBAC INC 9.375 8/1/2011 21.419
AMBAC INC 9.5 2/15/2021 21
AMBAC INC 7.5 5/1/2023 17.003
AMBAC INC 6.15 2/7/2087 1.75
AES EASTERN ENER 9 1/2/2017 26.5
AGY HOLDING COR 11 11/15/2014 40.25
AHERN RENTALS 9.25 8/15/2013 62
ALION SCIENCE 10.25 2/1/2015 42.25
AMR CORP 9 8/1/2012 46
AM AIRLN PT TRST 10.18 1/2/2013 67.55
AM AIRLN PT TRST 7.379 5/23/2016 31
A123 SYSTEMS INC 3.75 4/15/2016 21.75
ATP OIL & GAS 11.875 5/1/2015 52.25
ATP OIL & GAS 11.875 5/1/2015 52.25
ATP OIL & GAS 11.875 5/1/2015 53.25
BAC-CALL06/12 5.85 12/15/2022 100
BAC-CALL06/12 6.7 12/15/2026 100
BAC-CALL06/12 6.8 6/15/2027 100
BAC-CALL06/12 6.125 12/15/2027 100
BAC-CALL06/12 5.75 11/15/2028 99.95
BAC-CALL06/12 6.2 6/15/2029 100
BAC-CALL06/12 6.25 6/15/2029 100
BAC-CALL06/12 6 12/15/2032 100
BAC-CALL06/12 6.25 5/15/2036 100
BAC-CALL06/12 6.2 6/15/2036 100
BAC-CALL06/12 6.3 6/15/2036 100
BROADVIEW NETWRK 11.375 9/1/2012 76.875
BUFFALO THUNDER 9.375 12/15/2014 37
CHRCH CAP FNDING 6.6 5/15/2013 25
DELTA AIR 1993A1 9.875 4/30/2049 19.26
DIRECTBUY HLDG 12 2/1/2017 17.625
DIRECTBUY HLDG 12 2/1/2017 18
EDISON MISSION 7.5 6/15/2013 55.61
EASTMAN KODAK CO 7.25 11/15/2013 12.878
EASTMAN KODAK CO 7 4/1/2017 10.26
EASTMAN KODAK CO 9.95 7/1/2018 11.571
EASTMAN KODAK CO 9.2 6/1/2021 11
ENERGY CONVERS 3 6/15/2013 45
EVERGREEN SOLAR 13 4/15/2015 42
GLB AVTN HLDG IN 14 8/15/2013 26.8
GMX RESOURCES 5 2/1/2013 77.001
GMX RESOURCES 5 2/1/2013 78
GLOBALSTAR INC 5.75 4/1/2028 49.25
HAWKER BEECHCRAF 8.5 4/1/2015 17.5
HAWKER BEECHCRAF 8.875 4/1/2015 17.25
HAWKER BEECHCRAF 9.75 4/1/2017 3.05
ELEC DATA SYSTEM 3.875 7/15/2023 95
JAMES RIVER COAL 4.5 12/1/2015 36.5
KENDLE INTL INC 3.375 7/15/2012 95.75
LEHMAN BROS HLDG 0.25 12/8/2012 22
LEHMAN BROS HLDG 0.25 12/8/2012 22
LEHMAN BROS HLDG 1 12/9/2012 22
LEHMAN BROS HLDG 1.5 3/29/2013 22
LEHMAN BROS HLDG 1 10/17/2013 22
LEHMAN BROS HLDG 0.25 12/12/2013 22
LEHMAN BROS HLDG 0.25 1/26/2014 22
LEHMAN BROS HLDG 1.25 2/6/2014 22
LEHMAN BROS HLDG 1 3/29/2014 22
LEHMAN BROS HLDG 1 8/17/2014 22
LEHMAN BROS HLDG 1 8/17/2014 22
LEHMAN BROS INC 7.5 8/1/2026 10.25
LIFECARE HOLDING 9.25 8/15/2013 59.65
MASHANTUCKET PEQ 8.5 11/15/2015 9.25
MASHANTUCKET PEQ 8.5 11/15/2015 8.25
MASHANTUCKET TRB 5.912 9/1/2021 9.25
MF GLOBAL LTD 9 6/20/2038 45.875
MANNKIND CORP 3.75 12/15/2013 53
NEWPAGE CORP 10 5/1/2012 4.625
NETWORK EQUIPMNT 7.25 5/15/2014 33
OSI PHARMACEUTIC 3 1/15/2038 79.51
PATRIOT COAL 3.25 5/31/2013 60.075
PMI GROUP INC 6 9/15/2016 20.525
PENSON WORLDWIDE 8 6/1/2014 27.752
PENSON WORLDWIDE 12.5 5/15/2017 41.5
POWERWAVE TECH 3.875 10/1/2027 20.375
POWERWAVE TECH 3.875 10/1/2027 18.941
RAD-CALL06/12 9.375 12/15/2015 101.8
REDDY ICE HLDNGS 10.5 11/1/2012 55.5
REDDY ICE CORP 13.25 11/1/2015 28.2
RESIDENTIAL CAP 6.5 4/17/2013 19
RESIDENTIAL CAP 6.875 6/30/2015 18.5
ISTAR FINANCIAL 5.5 6/15/2012 100
THORNBURG MTG 8 5/15/2013 8
TOUSA INC 9 7/1/2010 16.9
TOUSA INC 9 7/1/2010 31
TRAVELPORT LLC 11.875 9/1/2016 35.125
TRAVELPORT LLC 11.875 9/1/2016 39.25
TIMES MIRROR CO 7.25 3/1/2013 31.5
TRIBUNE CO 5.25 8/15/2015 36.815
TRICO MARINE 3 1/15/2027 0.75
TRICO MARINE 3 1/15/2027 0.031
TERRESTAR NETWOR 6.5 6/15/2014 10
TEXAS COMP/TCEH 7 3/15/2013 15
TEXAS COMP/TCEH 10.25 11/1/2015 21.625
TEXAS COMP/TCEH 10.25 11/1/2015 22.5
TEXAS COMP/TCEH 10.25 11/1/2015 23
TEXAS COMP/TCEH 15 4/1/2021 33.75
TEXAS COMP/TCEH 15 4/1/2021 29.5
USEC INC 3 10/1/2014 39
WASH MUT BANK FA 6.875 6/15/2011 0.01
WASH MUT BANK FA 5.65 8/15/2014 0.01
WASH MUT BANK FA 5.125 1/15/2015 0.01
WASH MUT BANK NV 6.75 5/20/2036 0.875
*********
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
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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
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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.
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