/raid1/www/Hosts/bankrupt/TCR_Public/120727.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, July 27, 2012, Vol. 16, No. 207
Headlines
3100 BERGENLINE: Voluntary Chapter 11 Case Summary
ABSOLUTE LIFE: Posts $14.5-Mil. Net Loss in May 31 Quarter
ADELPHIA COMMS: Presents Closing Arguments Spar Over Valuation
AHERN RENTALS: Wants Plan Exclusivity Until Nov. 30
ALLEN FAMILY: Court Extends Exclusive Plan Filing to Aug. 31
AMERICAN ARCHITECTURAL: Balks at Skanska Bid for Contract Decision
ARKANOVA ENERGY: Inks Employment Pacts With CEO and CFO
ARRAY BIOPHARMA: Achieves $8.5MM Clinical Milestone in Amgen
BERNARD L MADOFF: Picard Seeks to Make $2.4 Billion Payout
BIOMET INC: Moody's Rates New Senior Unsecured Note Offering 'B3'
BIOMET INC: S&P Affirms 'B+' Corp. Credit Rating; Outlook Stable
BIOMET INC: S&P Rates $550-Mil. Senior Unsecured Notes 'B-'
BNC FRANCES WAY: To Present Plan for Confirmation on Sept. 17
BUD'S CAR WASH: Defendants' Response Deadline Moved to September
CANYON HOLDINGS: Plan Trustee Has OK to Complete Asset Sale
CARDTRONICS INC: S&P Keeps 'BB' Corporate Credit Rating
CLAYTON WAGES: Can't Modify JPMorgan Mortgage on Property
COMMUNITY CHOICE: S&P Affirms 'B-' Issuer Credit Rating
CONVERTED ORGANICS: Has 209.3 Million Outstanding Common Shares
CROWNROCK LP: S&P Raises Senior Unsecured Debt Ratings to 'B'
DAIS ANALYTIC: Obtains $2 Million Financing from Investor
DEEP DOWN: Consummates 1-for-20 Reverse Stock Split
DENBURY RESOURCES: Moody's Alters Rating Outlook to Stable
DEWEY & LEBOEUF: Has $90.4MM Settlement Offer for Ex-Partners
DEWEY & LEBOEUF: Judge Seeks More Info Before Bonus Ruling
DIAMOND BEACH: Plan of Liquidation Confirmed
DIRECTCASH PAYMENTS: Moody's Assigns 'B1' Corp. Family Rating
DIRECTCASH PAYMENTS: S&P Assigns 'B+' Credit Corporate Rating
EMMIS COMMUNICATIONS: GRC Has Until Aug. 8 to Buy KXOS-FM Station
FIRST YORKSHIRE: Case Summary & 5 Unsecured Creditors
FRESH CHOICE: Case Summary & 20 Largest Unsecured Creditors
GAC STORAGE: Copley Place's Plan Confirmation Hearing Sept. 6
GAC STORAGE: El Monte's Plan Has Sept. 7 Confirmation Hearing
GAC STORAGE: Sept. 7 Confirmation Hearing on Makena's Plan
GAC STORAGE: Wells Fargo Opposes Plan Exclusivity Extension
GARY STANCIL: Court Declines to Dismiss Suit v Bradley Investments
GATEWAY CASINOS: S&P Affirms 'BB-' CCR Over Add'l. C$50-Mil. Loan
GLOBAL GREEN: Posts C$224,600 Net Loss in First Quarter
GRANITE BROADCASTING: S&P Assigns 'B' Corporate Credit Rating
HAWKER BEECHRAFT: IAMAW, U.S. Trustee Balks at Exec. Bonus Plan
INTERNATIONAL HOME: Seeks to Amend Schedules and Statements
KIWIBOX.COM INC: Releases New iphone and ipad Application
KV PHARMACEUTICAL: Receives Non-Compliance Notice from NYSE
LODGENET INTERACTIVE: Incurs $101.6 Million Net Loss in Q2
LUPER ENTERPRISES: Bankruptcy Filing Blocks Bank Foreclosure
KLEEN ENERGY: Fitch Cuts Rating on $435-Mil. Term Loan A to 'BB'
LAGUARDIA ASSOCIATES: Meeting to Form Panel Set for Aug. 8
LEE BRICK: Capital Bank Seeks to Block Use of Cash Collateral
LEE BRICK: Files Schedules of Assets and Liabilities
LICHTIN/WADE: Court Okays Charles M. Ivey as Mediator
LIFEPOINT HOSPITALS: S&P Rates New $750MM Sr. Secured Debt 'BB-'
LSP ENERGY: Sale Approval Met With Objection by TPF Group
LUCID INC: To Issue 3.2-Mil. Common Shares Under Incentive Plans
M3 TECHNOLOGY: Loses Bid to Halt Servicing Of Infringing Software
MACCO PROPERTIES: Disclosures for Full-Payment Plan Amended
MUSCLEPHARM CORP: Has Equity & Registration Rights Pact with TCA
MUSCLEPHARM CORP: Sells 100 Million Common Shares for $1 Million
NEXSTAR BROADCASTING: S&P Puts 'B' Rating on $325MM Notes on Watch
NII CAPITAL: S&P Lowers Rating on Senior Unsecured Debt to 'B'
NORTH FOREST: Moody's Confirms 'Ba3' Rating on $56.5MM G.O. Debt
NORTHAMPTON GENERATING: Asks for Third Plan Extension
NORTHSTAR AERO: Files Schedules of Assets and Liabilities
NJ MOBILE DENTAL: Owner Denied Chapter 7 Discharge
OCWEN FINANCIAL: Moody's Affirms 'B1' CFR; Outlook Stable
ORLANDO CARLO: Case Summary & 12 Unsecured Creditors
OWENS & MINOR: Moviato Deal No Impact on Moody's 'Ba1' Rating
PACESETTER FABRICS: Davidoff Gold Can Replace Rutter as Counsel
PACESETTER FABRICS: Can Hire Hernandez Schaedel as Labor Counsel
PATRIOT COAL: Said to Set Price on Portion of DIP Loan Financing
PEREGRINE FIN'L: Court Cancels Detention Hearing for CEO
PEREGRINE FIN'L: CFTC Access to Firm Accounts Could Prevent Theft
PONCE DE LEON: Has Nod to Hire Roberto Alsina as Tax Consultant
POSITIVEID CORP: Scott Silverman Discloses 24% Equity Stake
RADIOSHACK CORP: Fitch Cuts IDR to 'CCC' on Profitability Decline
RADIOSHACK CORP: Moody's Cuts CFR to 'B3'; Outlook Negative
REOSTAR ENERGY: Plan Confirmation Hearing on Aug. 28
RESIDENTIAL CAPITAL: Proposes Towers Watson as HR Consultant
RESIDENTIAL CAPITAL: Rubenstein Hired as Communications Consultant
RESIDENTIAL CAPITAL: Curtis Mallet-Prevost Is Conflicts Counsel
RESIDENTIAL CAPITAL: Committee Has Kramer Levin as Counsel
RESIDENTIAL CAPITAL: Committee Proposes Moelis as Inv. Banker
RG STEEL: Court Approves Employment of Direct Fee as Fee Examiner
ROBERT LUPO: Jacobs Allowed $23K Unsecured Claim, No Admin Claim
RYAN INTERNATIONAL: Court Sets Oct. 5 as Claims Bar Date
RYAN INTERNATIONAL: DIP Financing Extended Until Sept. 30
SAN BERNARDINO, CA: To Defer $6.4 Million in Bond Payments
SEA TRAIL: Court OKs Cox & Watts as Atty. for Limited Work
SEA TRAIL: Gets Court's Nod to Hire Marcus & Millichap as Broker
SEA TRAIL: Has OK to Hire Christovich as Management Consultant
SKINNER ENGINE: 3rd Circ. Confirms Ch. 11 Conversion to Ch. 7
SMART ONLINE: Terminates Web Services Agreement with URA
SEARS HOLDINGS: Bruce Johnson to Serve as SHO CEO and President
SINCLAIR BROADCAST: To Buy 6 Newport TV Stations for $412.5-Mil.
SEARCHMEDIA HOLDINGS: Phillip Frost Owns 7.8MM Ordinary Shares
SMF ENERGY: Hires Ahearn Jasco & Company as Audit Accountant
SMF ENERGY: Hires Holland & Knight as Securities Counsel
T3 MOTION: Founder Ki Nam Named CEO for R3 Motion
TELETOUCH COMMUNICATIONS: Stratford Equity Stake Hiked to 36.1%
TOKLAN OIL: Files for Chapter 11 Bankruptcy Protection
TRAMCON INC: Case Summary & 20 Largest Unsecured Creditors
UNITED GILSONITE: Plan Filing Deadline Extended to Aug. 27
WALTER INVESTMENT: Moody's Affirms 'B1' CFR; Outlook Stable
WATERLOO GARDENS: Eyes Ch.11 Exit Later This Year or Early 2013
WAVE2WAVE COMMS: To Amend Plan; In Talks for Exit Funding
WOOD VENDING: Case Summary & 20 Largest Unsecured Creditors
WOUND MANAGEMENT: Has Forbearance with Juventas Until Sept. 13
WVSV HOLDINGS: Court to Consider 10K's Motion to Dismiss on Aug. 2
WVSV HOLDINGS: U.S. Trustee Balks at Postpetition Financing
* Moody's Says US Company Defaults Slow in 2012 Second Quarter
* Clifford Chance Announces Memorandum on Real Estate Provisions
* BOOK REVIEW: Ralph H. Kilmann's Beyond the Quick Fix
*********
3100 BERGENLINE: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: 3100 Bergenline Avenue Realty, LLC
3100 Bergenline Avenue
Union City, NJ 07087
Bankruptcy Case No.: 12-28385
Chapter 11 Petition Date: July 24, 2012
Court: United States Bankruptcy Court
District of New Jersey (Newark)
Judge: Rosemary Gambardella
Debtor's Counsel: Chad Brian Friedman, Esq.
RAVIN GREENBERG LLC
101 Eisenhower Parkway
Roseland, NJ 07068
Tel: (973) 226-1500
E-mail: cfriedman@ravingreenberg.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by Jose Katz, managing member.
ABSOLUTE LIFE: Posts $14.5-Mil. Net Loss in May 31 Quarter
----------------------------------------------------------
Absolute Life Solutions, Inc., filed its quarterly report on Form
10-Q, reporting a net loss of $14.49 million for the three months
ended May 31, 2012, compared with net income of $6.33 million for
the three months ended May 31, 2011.
For the nine months ended May 31, 2012, the Company reported a net
loss of $20.47 million, compared with net income of $22.16 million
for the nine months ended May 31, 2011.
The net loss for the three and nine months ended May 31, 2012, is
primarily attributable to a decrease of approximately $37,200,000
and $75,700,000 change in fair value and approximately $0 and
$2,200,000 in realized gains offset by a decrease of approximately
$16,200,000 and $33,800,000 change in deferred taxes and
approximately $260,000 and $1,100,000 in general and
administrative expenses.
The Company's balance sheet at May 31, 2012, showed $67.93 million
in total assets, $5.95 million in total liabilities, and
stockholders' equity of $61.98 million.
Marcum LLP, in New York, N.Y., expressed substantial doubt about
Absolute Life's ability to continue as a going concern following
the Company's results for the fiscal year ended Aug. 31, 2011.
The independent auditors noted that the Company that the continued
existence of the Company is dependent upon its ability to generate
profit from its life settlement investments and to meet its
obligations as they become due. "The demand for and selling
prices of the Company's products, may not be sufficient to meet
cash flow expectations. These conditions raise substantial doubt
about the Company's ability to continue as a going concern."
A copy of the Form 10-Q is available for free at:
http://is.gd/0B5pml
New York, N.Y.-based Absolute Life Solutions, Inc., is a specialty
financial services company engaged in the business of purchasing
life settlement contracts for long-term investment purposes.
ADELPHIA COMMS: Presents Closing Arguments Spar Over Valuation
--------------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that Adelphia
Communications Corp. and FPL Group Inc. presented closing
arguments Wednesday following a four-day trial in Adelphia's bid
to recover $149 million it paid to buy back stock before going
bankrupt, with the debtor rehashing its stance that the stock was
worthless.
Bankruptcy Law360 relates that Adelphia's argument before U.S.
Bankruptcy Judge Robert E. Gerber in New York essentially revolved
around two lines in its June 22 post-trial brief that are central
to its case.
About Adelphia Communications
Based in Coudersport, Pennsylvania, Adelphia Communications
Corporation was once the fifth-biggest cable company. Adelphia
served customers in 30 states and Puerto Rico, and offered analog
and digital video services, Internet access and other advanced
services over its broadband networks.
Adelphia collapsed in 2002 after disclosing that founder John
Rigas and his family owed $2.3 billion in off-balance-sheet debt
on bank loans taken jointly with the company. Mr. Rigas is
serving 12 years in prison, and his son Timothy is serving 15
years.
Adelphia Communications and its more than 200 affiliates filed for
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 02-41729) on
June 25, 2002. Willkie Farr & Gallagher represented the Debtors
in their restructuring effort. PricewaterhouseCoopers served as
the Debtors' financial advisor. Kasowitz, Benson, Torres &
Friedman LLP and Klee, Tuchin, Bogdanoff & Stern LLP represented
the Official Committee of Unsecured Creditors.
Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas-Managed Entities, were
entities that were previously held or controlled by members of the
Rigas family. In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision LLC. The RME Debtors filed for Chapter 11 protection
(Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642) on March 31,
2006. Their cases were jointly administered under Adelphia
Communications and its debtor-affiliates' Chapter 11 cases.
The Bankruptcy Court confirmed the Debtors' Joint Chapter 11 Plan
of Reorganization on Jan. 5, 2007. That plan became effective on
Feb. 13, 2007.
The Adelphia Recovery Trust, a Delaware Statutory Trust, was
formed pursuant to the Plan. The Trust holds certain litigation
claims transferred pursuant to the Plan against various third
parties and exists to prosecute the causes of action transferred
to it for the benefit of holders of Trust interests. Lawyers at
Kasowitz, Benson, Torres & Friedman, LLP (NYC), represent the
Adelphia Recovery Trust.
AHERN RENTALS: Wants Plan Exclusivity Until Nov. 30
---------------------------------------------------
BankruptcyData.com reports that Ahern Rentals filed with the U.S.
Bankruptcy Court a motion to extend the exclusive period during
which the Company can file a Chapter 11 plan and solicit
acceptances thereof through and including November 30, 2012 and
February 1, 2013, respectively.
Ahern Rentals states, "The Debtor is in the process of formulating
a Plan that would pay creditors the full amount of their claims
against Debtor's estate, consistent with its intentions since the
commencement of this Chapter 11 Case. Indeed, as permitted by this
Court, the undisputed unsecured claims in this case have been
reduced to about $3.0 Million."
About Ahern Rentals
Founded in 1953 with one location in Las Vegas, Nevada, Ahern
Rentals Inc. -- http://www.ahern.com/-- now offers rental
equipment to customers through its 74 locations in Arizona,
Arkansas, California, Colorado, Georgia, Kansas, Maryland,
Nebraska, Nevada, New Jersey, New Mexico, North Carolina, North
Dakota, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee,
Texas, Utah, Virginia and Washington.
Ahern Rentals filed a voluntary Chapter 11 petition (Bankr. D.
Nev. Case No. 11-53860) on Dec. 22, 2011, after failing to obtain
an extension of the Aug. 21, 2011 maturity of its revolving credit
facility. Judge Bruce T. Beesley presides over the case. Lawyers
at Gordon Silver serve as the Debtor's counsel. The Debtor's
financial advisors are Oppenheimer & Co. and The Seaport Group.
Kurtzman Carson Consultants LLC serves as claims and notice agent.
Counsel to Bank of America, as the DIP Agent and First Lien Agent,
are Albert M. Fenster, Esq., and Marc D. Rosenberg, Esq., at Kaye
Scholer LLP, and Robert R. Kinas, Esq., at Snell & Wilmer.
Attorneys for the Majority Term Lenders are Paul Aronzon, Esq.,
and Robert Jay Moore, Esq., at Milbank, Tweed, Hadley & McCloy
LLP. Counsel for the Majority Second Lienholder are Paul V.
Shalhoub, Esq., Joseph G. Minias, Esq., and Ana M. Alfonso, Esq.,
at Willkie Farr & Gallagher LLP. Attorney for GE Capital is James
E. Van Horn, Esq., at McGuirewoods LLP. Wells Fargo Bank is
represented by Andrew M. Kramer, Esq., at Otterbourg, Steindler,
Houston & Rosen, P.C. Allan S. Brilliant, Esq., and Glenn E.
Siegel, Esq., at Dechert LLP argue for certain revolving lenders.
Attorneys for U.S. Bank National Association, as successor to
Wells Fargo Bank, as collateral agent and trustee for the benefit
of holders of the 9-1/4% Senior Secured Notes Due 2013 under the
Indenture dated Aug. 18, 2005, is Kyle Mathews, Esq., at Sheppard,
Mullin, Richter & Hampton LLP and Timothy Lukas, Esq., at Holland
& Hart.
In its schedules, the Debtor disclosed $485.8 million in assets
and $649.9 million in liabilities.
The Official Committee of Unsecured Creditors has tapped Covington
& Burling LLP as counsel, Downey Brand LLP as local counsel, and
FTI Consulting as financial advisor.
ALLEN FAMILY: Court Extends Exclusive Plan Filing to Aug. 31
------------------------------------------------------------
The U.S. Bankruptcy Court approved Allen Family Foods, Inc.
and its debtor affiliates' request for an extension of their
exclusive right to file a chapter 11 plan through Aug. 31, 2012,
and their exclusive right to solicit acceptances of that plan
through Oct. 31, 2012.
In their third request for extension, the Debtors explained they
need more time and the opportunity to fully reconcile and object
to claims filed in their cases, as appropriate. The Debtors added
that parties involved need more time to have an understanding of
the extent to which any of the estates' remaining assets may be
unencumbered by the liens of the Debtors' prepetition lenders
before they potentially propose a chapter 11 plan or an
alternative resolution of the cases.
About Allen Family Foods
Allen Family Foods Inc. is a 92-year-old Seaford, Del., poultry
company. Allen Family Foods and two affiliates, Allen's Hatchery
Inc. and JCR Enterprises Inc., filed for Chapter 11 bankruptcy
protection (Bankr. D. Del. Case No. 11-11764) on June 9, 2011.
Allen estimated assets and liabilities between $50 million and
$100 million in its petition.
Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young,
Conaway, Stargatt & Taylor, in Wilmington, Delaware, serve as
counsel to the Debtors. FTI Consulting is the financial advisor.
BMO Capital Markets is the Debtors' investment banker. Epiq
Bankruptcy Solutions LLC is the claims and notice agent.
Roberta DeAngelis, U.S. Trustee for Region 3, appointed seven
creditors to serve on an Official Committee of Unsecured Creditors
in the Debtors' cases. Lowenstein Sandler PC and Womble Carlyle
Sandridge & Rice, PLLC, serve as counsel for the committee. J.H.
Cohn LLP serves as the Committee's financial advisor.
AMERICAN ARCHITECTURAL: Balks at Skanska Bid for Contract Decision
------------------------------------------------------------------
Erica Terrini at The USGlass News Network reports that American
Architectural Inc. objects to Skanska USA's request to expedite
the court's decision to order AAI to resume or cease its interior
glass works and interior glass railing subcontracting work for the
World Trade Center PATH Hall, which is part of the Center's
Transportation Hub.
According to the report, AAI said if it was forced to make a
decision regarding the subcontracting work it could potentially
risk losing "profitable projects and possibly an opportunity to
reorganize. Conversely, if [AAI] assumes either or both of the
contracts without having time to adequately evaluate the costs and
revenues attendant to same, [AAI's] Chapter 11 process might be
impaired or even halted if the burdens attendant to such contracts
saddle the estates with administrative liabilities non-
commensurate with their respective benefits."
The report relates AAI also claims in its objection that the
request comes too early on in its Chapter 11 bankruptcy case for
the company to commit to "a decision of this magnitude without
allowing them time to adequately analyze all of the economic and
practical considerations that go into an informed assumption or
rejection decision. Given the nature of [AAI's] business, it is
critical that these agreements remain in place for the time being
and that the respective counter-parties timely honor all of their
obligations under such agreements. It would clearly be pre-
mature, at this stage of this brand new Chapter 11 case, to force
[AAI] into a hasty decision that could squander potential value
for the benefit of all creditors."
The Port Authority of New York and New Jersey granted Skanska the
PATH Hall contract in 2010 and had subcontracted AAI at $6.2
million for projects including glass railings and other glazing
items. However, the general contractor claims that before AAI
filed for Chapter 11 bankruptcy, it had paid the company $696,485
for work completed in the entire month of May, the report says.
About American Architectural and
Advanced Acquisitions
Bensalem, Pennsylvania-based American Architectural, Inc., and
Advanced Acquisitions, LLC, filed for Chapter 11 bankruptcy
(Bankr. E.D. Pa. Case Nos. 12-15818 and 12-15819) on June 15,
2012. Judge Magdeline D. Coleman oversees the case. Maschmeyer
Karalis P.C. serves as the Debtors' general bankruptcy counsel.
Douglas Ziegler LLC serves as accountants.
American Architectural provides quality building enclosures.
Advanced Acquisitions is the beneficial owner of a 98,000 square
feet facility in Bensalem, 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 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.
AAI estimated $10 million to $50 million in both assets and debts.
Advanced Acquisitions estimated $1 million to $10 million in both
assets and debts. The petitions were signed by John Melching,
president and CEO.
ARKANOVA ENERGY: Inks Employment Pacts With CEO and CFO
-------------------------------------------------------
Arkanova Energy Corporation entered into an executive employment
agreement with Pierre Mulacek, the Company's chief executive
officer, president and director. The Company agreed to pay an
annual salary of US$240,000 to Mr. Mulacek in consideration for
him carrying out his duties as an executive of the company.
Mr. Mulacek disclosed his interest with respect to the executive
employment agreement and abstained from voting on the approval of
the agreement.
Pursuant to the terms of the agreement, and in the event the
Company undergoes a Change of Control Event, the agreement will
automatically terminate and the company is required to pay to
Mr. Mulacek an amount equal to the total of:
1. US$360,000 (calculated as 18 months salary payable under the
agreement); and
2. the cost for a period of 18 months to obtain family or
spousal health insurance that is similar in coverage to that
provided to Mr. Mulacek as of the date of the change of
control.
The Company also entered into an executive employment agreement
with Reginald Denny, the Company's chief financial officer and
director. The Company agreed to pay an annual salary of
US$190,000 to Mr. Denny in consideration for him carrying out his
duties as an executive of the company. Mr. Denny disclosed his
interest with respect to the executive employment agreement and
abstained from voting on the approval of the agreement.
Pursuant to the terms of the agreement, and in the event the
company undergoes a Change of Control Event, the agreement will
automatically terminate and our company is required to pay to Mr.
Denny an amount equal to the total of:
1. US$285,000 (calculated as 18 months salary payable under the
agreement); and
2. the cost for a period of 18 months to obtain family or
spousal health insurance that is similar in coverage to that
provided to Mr. Denny as of the date of the change of
control.
Under both executive employment agreements, a Change of Control
Event means the occurrence of any one of the following events:
1. the acquisition, other than from the company, of beneficial
ownership of 50% or more of either the then outstanding
shares of common stock of the company or the combined voting
power of the then outstanding voting securities of the
company entitled to vote generally in the election of
directors;
2. the approval by the stockholders of the company of a
reorganization, merger or consolidation of the company in
which the individuals and entities who were the respective
beneficial owners of the common stock and voting securities
immediately prior to that reorganization, merger or
consolidation do not, following that reorganization, merger
or consolidation, beneficially own, directly or indirectly,
more than 50% of, respectively, the then outstanding shares
of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the
corporation resulting from that reorganization, merger or
consolidation; or
3. a liquidation or dissolution of the company or the sale or
disposition of all or substantially all of the assets of the
company, which, for greater certainty, is deemed to occur in
the event the company sells or disposes of all or
substantially all of the assets of a subsidiary of the
company.
About Arkanova Energy
The Woodlands, Tex.-based Arkanova Energy Corporation is currently
participating in oil and gas exploration activities in Arkansas,
Colorado and Montana. All of Arkanova's oil and gas properties
are located in the United States.
In the auditors' report accompanying the 2011 financial statements
MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt
about the Company's ability to continue as a going concern. The
independent auditors noted that the Company has incurred losses
since inception, which raises substantial doubt about its ability
to continue as a going concern.
The Company reported a net loss of $2.06 million on $1.32 million
of total revenue for the year ended Sept. 30, 2011, compared with
a net loss of $13.87 million on $1.03 million of total revenue
during the prior year.
The Company's balance sheet at March 31, 2012, showed $2.83
million in total assets, $8.66 million in total liabilities and a
$5.83 million total stockholders' deficit.
ARRAY BIOPHARMA: Achieves $8.5MM Clinical Milestone in Amgen
------------------------------------------------------------
Array BioPharma Inc. announced that an $8.5 million milestone was
achieved in its collaboration with Amgen. Array entered into an
agreement with Amgen in December 2009 for the worldwide
development of the small-molecule glucokinase activator (GKA)
program, including AMG 151. The milestone was achieved after
Amgen reached a pre-defined patient enrollment level in a Phase 2a
clinical trial.
The Phase 2a trial is a randomized, double-blind, placebo-
controlled study of AMG 151 in combination with metformin in
patients with Type 2 diabetes. The primary endpoint is change in
fasting plasma glucose levels from baseline to end of treatment.
Amgen continues to advance the trial and seeks to enroll
approximately 224 patients.
Under the agreement, Amgen paid an up-front fee of $60 million.
Array is also entitled to receive up to approximately $658 million
in additional aggregate milestone payments if all clinical and
commercialization milestones specified in the agreement for AMG
151 and at least one backup compound are achieved. Array will
also receive royalties on sales of any approved drugs developed
under the agreement.
Boulder, Colo.-based Array BioPharma Inc. is a biopharmaceutical
company focused on the discovery, development and
commercialization of targeted small-molecule drugs to treat
patients afflicted with cancer and inflammatory diseases. Array
has four core proprietary clinical programs: ARRY-614 for
myelodysplastic syndromes, ARRY-520 for multiple myeloma, ARRY-797
for pain and ARRY-502 for asthma. In addition, Array has 10
partner-funded clinical programs including two MEK inhibitors in
Phase 2: selumetinib with AstraZeneca and MEK162 with Novartis.
The Company's balance sheet at March 31, 2012, showed
$120.04 million in total assets, $198.81 million in total
liabilities, and a stockholders' deficit of $78.77 million.
The Company said in its quarterly report for the period ended
March 31, 2012, that "If we are unable to obtain additional
funding from these or other sources when needed, or to the extent
needed, it may be necessary to significantly reduce the current
rate of spending through further reductions in staff and delaying,
scaling back, or stopping certain research and development
programs, including more costly Phase 2 and Phase 3 clinical
trials on our wholly-owned programs as these programs progress
into later stage development. Insufficient liquidity may also
require us to relinquish greater rights to product candidates at
an earlier stage of development or on less favorable terms to us
and our stockholders than we would otherwise choose in order to
obtain upfront license fees needed to fund operations. These
events could prevent us from successfully executing our operating
plan and in the future could raise substantial doubt about our
ability to continue as a going concern."
BERNARD L MADOFF: Picard Seeks to Make $2.4 Billion Payout
----------------------------------------------------------
The Wall Street Journal's Reed Albergotti reports that Irving
Picard, the trustee assigned to the Bernard Madoff bankruptcy,
asked a federal judge Thursday to allow him to make a $2.4 billion
payout -- more than double the amount released so far -- to
victims of the massive Ponzi scheme. If approved, WSJ says more
than a thousand people who lost money investing with Mr. Madoff
could receive checks as early as this fall.
WSJ, however, noted it is unclear when U.S. District Judge Burton
Lifland will make a decision, and legal challenges to Mr. Picard's
motion are likely, say lawyers who have followed the case.
Mr. Picard has filed more than 1,000 lawsuits to try to recover
just over $17 billion in principal that he estimated was lost by
investors who entrusted their money with Mr. Madoff. He has
recovered about $11 billion, including government forfeitures, but
has only made one previous distribution of $1.1 billion because of
legal challenges by some of the investors over how to divide the
money.
According to the Journal, in Thursday's request, Mr. Picard noted
that there is a continuing dispute over whether investors should
be awarded interest on the money they deposited into Mr. Madoff's
fund. Some believe investors are owed 9% interest on their
deposits; Mr. Picard doesn't believe they are owed any.
According to the Journal, Joe Sarachek, managing director at CRT
Capital Group, said some investors are "throwing road blocks in
Picard's way. CRT buys and sells Madoff claims on the secondary
market.
WSJ also relates Judith Welling, a New Yorker who worked in book
manufacturing before retiring, saw a significant portion of her
life savings evaporate with Mr. Madoff. She has watched the legal
battles closely and last month decided to sell her stake to a
claims-trading company for about 80 cents on the dollar.
WSJ also notes a letter sent to a Madoff victim last week and
reviewed by The Wall Street Journal offered to pay 85% for the
victim's claim.
BIOMET INC: Moody's Rates New Senior Unsecured Note Offering 'B3'
-----------------------------------------------------------------
Moody's Investors Service assigned a B1 to Biomet, Inc.'s newly
amended and extended cash flow revolver and term loan and a B3 to
its new senior unsecured note offering. Proceeds are anticipated
to be used to refinance existing bank debt and fund the tender of
existing PIK option notes. The ratings on Biomet's existing cash
flow revolver and the PIK option notes will be withdrawn when the
new facility closes and assuming a full tender of the PIK notes is
completed. At the same time, Moody's affirmed Biomet's existing
ratings including its B2 Corporate Family and Probability of
Default Ratings, as well as its SGL-2 Speculative Grade Liquidity
Rating. The rating outlook is stable.
Ratings assigned:
Biomet, Inc.
$330 million Amended and Extended secured cash flow revolver at B1
(LGD3, 36%)
New Amended and Extended secured term loan at B1 (LGD 3, 36%)
$1.0 billion New senior unsecured notes at B3 (LGD 4, 66%)
Ratings affirmed:
Biomet, Inc.:
Corporate Family Rating at B2
Probability of Default Rating at B2
Speculative Grade Liquidity Rating at SGL-2
Ratings affirmed with point estimates revised:
Biomet, Inc.:
$350 million ABL revolver at Ba2 (LGD 2, 15%) from Ba2 (LGD 2,
16%)
Remaining secured term loan at B1 (LGD 3, 36%) from B1 (LGD 3,
34%)
$775 million unsecured senior notes at B3 (LGD 4, 66%) from B3
(LGD 4, 65%)
$775 million unsecured PIK option notes at B3 (LGD 4, 66%) from B3
(LGD 4, 65%)
$1.015 billion unsecured subordinated notes at Caa1 (LGD 6, 93%)
Rating to be withdrawn:
Biomet, Inc.
$400 million existing cash flow revolver at B1 (LGD 3, 34%)
Ratings Rationale
"Biomet's leverage will remain high, especially if it separates
its dental business, but we expect the company to be able to
deleverage as it benefits from new product launches and spinal
products acquired from J&J," said Diana Lee, a Moody's Senior
Credit Officer. This transaction represents a refinancing of
existing debt and therefore, on its own, is not expected to result
in incremental debt.
Biomet's B2 Corporate Family Rating largely reflects its very high
leverage and overall weak financial strength ratios, which
represent key credit risks. However, the rating also reflects the
company's relatively large size compared to other B2 companies and
opportunities associated with favorable demographics. Despite
historical stability, Moody's expects the sector to see ongoing
volume and pricing pressure because of the weak economy, as well
as hospital cost savings initiatives and high levels of
competition. The reconstructive market will continue to evolve to
one where product innovation is more critical; thus Moody's
anticipates higher R&D spending and potentially greater movement
of market share in certain product lines over time.
If the company does separate its 3i dental implant business, which
accounts for about 9% of revenues and would likely result in
higher leverage and even weaker credit metrics, Moody's does not
expect an effect on ratings. Biomet should benefit from new
product launches and the pending acquisition of Johnson &
Johnson's (Aaa stable) Depuy trauma business, and Moody's expects
leverage would gradually decline.
The stable outlook reflects Moody's expectation that, although
leverage remains very high and reconstructive use rates and
pricing pressures continue, top-line growth rates will remain at
least at market levels, supported by new product launches. A large
debt-financed transaction, a recall action or material loss in
market share that results in higher leverage or declining cash
flow such that EBITA/interest approaches 1.0 time or debt/EBITDA
exceeds 7.0 times, could result in a downgrade. If the company is
able to demonstrate its ability to sustain at or above-market
growth rates in core hips and knees and continue deleveraging such
that debt/EBITDA and FCF/debt approach 5.0 times and 5%,
respectively, and appear sustainable, the ratings could be
upgraded.
The SGL-2 rating reflects Moody's view that Biomet's liquidity
will be good over the next year. Cash balances are adequate and
free cash flow will remain modest, but the company should
generally have sufficient internal cash to support operations. In
addition, Biomet is expected to have access to ample external
facilities with limited financial covenants. However,
substantially all of the company's assets are pledged to bank
lenders.
Moody's notes that the proposed transactions do not substantially
change the capital structure of the company. However, currently
the B3 senior unsecured notes benefit from the presence of
substantial junior capital in the form of subordinated notes. If
the amount of junior subordinated notes decreases materially or if
the amount of secured debt, which is ahead of the senior unsecured
notes increases, the B3 rating on the senior unsecured notes could
be lowered to Caa1 even in the absence of a change in the CFR.
The principal methodology used in rating Biomet, Inc. was the
Global Medical Products & Device Industry Methodology published in
October 2009. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
Biomet, Inc., headquartered in Warsaw, Indiana, is a global
manufacturer of orthopedic products and is among the leaders in
the U.S. reconstructive market. A private equity consortium,
consisting of the Blackstone Group, Goldman Sachs Capital
Partners, Kohlberg Kravis Roberts and TPG, acquired Biomet for
approximately $11.6 billion in July 2007.
BIOMET INC: S&P Affirms 'B+' Corp. Credit Rating; Outlook Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings and
outlook on Biomet Inc., including the 'B+' corporate credit
rating. "We assigned our 'BB-' senior secured debt and '2'
recovery ratings to the proposed cash flow revolver and term loan
extension (amounts undisclosed), both maturing 2017," S&P said.
"The ratings on Biomet Inc. reflect its 'satisfactory' business
risk profile and 'highly leveraged' financial risk profile,
according to our criteria. The ratings overwhelmingly reflect our
expectation for minimal debt reduction: Our fiscal 2013 forecast
for adjusted funds from operations (FFO) to total debt is between
5% and 10%, well within the less-than-12% guideline for a highly
leveraged financial risk profile," S&P said.
"We believe this key debt protection measure will not improve,
because we expect modest revenue growth in fiscal 2013 and pricing
pressure, constraining EBITDA expansion and significant
improvements in cash flow; we believe debt to EBITDA will remain
well above the 5x threshold for a highly leverage financial risk
profile," said Standard & Poor's credit analyst Jesse Juliano.
"Fiscal 2012 revenue growth of 3% in constant currency was
consistent with our expectations. Constant-currency revenue growth
improved to 5% in the May 2012 quarter, which we believe reflects
improved industry growth and some modest market-share gains for
Biomet, likely related to the launch of new products and the near
completion of the trend away from metal-on-metal hips. We believe
revenue growth will remain in the low- to mid-single digits in
fiscal 2013, consistent with our expectations for the industry and
about twice the rate of GDP growth. We believe EBITDA margins,
including our usual adjustments, could remain relatively flat
(excluding the impact of the Affordable Care Act 2.3% medical
device tax), despite ongoing pricing pressures. We expect debt
leverage to remain relatively flat in fiscal 2013," S&P said.
"Biomet's satisfactory business risk profile reflects the
relatively stable nature of the orthopedic products industry.
While Biomet predominantly operates within the orthopedic space,
we believe it has a relatively full product offering. It is the
No. 4 participant in reconstructive products, competing with
Zimmer Holdings Inc., Stryker Corp., and Johnson & Johnson's
DePuy division. Still, surgeons are generally loyal to known and
proven products, sales force relationships are sticky, and product
innovations are of an evolutionary nature. Growth is generally a
function of total market demand rather than redistribution of
market share, although we believe Biomet is currently outgrowing
the market," S&P said.
BIOMET INC: S&P Rates $550-Mil. Senior Unsecured Notes 'B-'
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' issue-level
and '6' recovery ratings to Warsaw, Ind.-based medical products
manufacturer Biomet Inc.'s proposed $550 million senior unsecured
notes maturing 2020. "The recovery rating reflects our expectation
for negligible recovery (0 to 10%) in the event of default. The
notes will rank equally with the company's existing and future
senior unsecured indebtedness. We expect notes offering proceeds
to fund the purchase of the company's senior toggle notes in a
tender offer. We expect the offering will not meaningfully alter
Biomet's outstanding debt or credit metrics, which include pro
forma total adjusted debt to EBITDA of roughly 6x as of May 31,
2012. We expect debt leverage to remain consistent with the
company's 'highly leveraged' financial risk profile (partially
defined as adjusted debt to EBITDA of more than 5x)," S&P said.
"The ratings on Biomet Inc. reflect its 'satisfactory' business
risk profile and 'highly leveraged' financial risk profile,
according to our criteria. Biomet's satisfactory business risk
profile reflects its somewhat narrow focus in orthopedic products
and pricing pressure, as well as the relatively stable nature of
the orthopedic products industry, Biomet's relatively full product
offering, and favorable long-term volume trends. The financial
risk profile and corporate credit rating overwhelmingly reflect
our expectation for minimal debt reduction: Our fiscal 2013
forecast for adjusted funds from operations (FFO) to total debt is
between 5% and 10%, well within the less-than-12% guideline for a
highly leveraged financial risk profile. We believe this key debt
protection measure will not improve, because we expect modest
revenue growth in fiscal 2013 and pricing pressure, constraining
EBITDA expansion and significant improvements in cash flow. We
believe debt to EBITDA will remain well above the 5x threshold for
a highly leverage financial risk profile," S&P said.
"Fiscal 2012 revenue growth of 3% in constant currency was
consistent with our expectations. Constant-currency revenue growth
improved to 5% in the May 2012 quarter, which we believe reflects
improved industry growth and some modest market-share gains for
Biomet, likely related to the launch of new products and the near
completion of the trend away from metal-on-metal hips. We believe
revenue growth will remain in the low- to mid-single digits in
fiscal 2013, consistent with our expectations for the industry and
about twice the rate of GDP growth. We believe EBITDA margins,
including our usual adjustments, could remain relatively flat
(excluding the impact of the Affordable Care Act 2.3% medical
device tax), despite ongoing pricing pressures. We expect debt
leverage to remain relatively flat in fiscal 2013," S&P said.
RATINGS LIST
Biomet Inc.
Corporate credit rating B+/Stable/--
Rating Assigned
$550 mil. sr unsec notes due 2020 B-
Recovery rating 6
BNC FRANCES WAY: To Present Plan for Confirmation on Sept. 17
-------------------------------------------------------------
Judge Barbara J. Houser in Dallas, Texas, will convene a hearing
Sept. 17, 2012, to consider confirmation of the Plan of
Reorganization of BNC Frances Way LP.
Prior to the hearing, JPMCC 2007-CIBC19 Frances Way, LLC, which
has a $8.55 million secured claim, filed an objection to the
Disclosure Statement. JPMCC noted that it never saw an appraisal
valuing the Debtor's property at $11 million, and said that the
12-month financial projections should be extended to 60 months.
Nonetheless, the judge approved the Disclosure Statement and
allowed the Debtor to proceed with the solicitation of votes on
the Plan.
JPMCC and other parties in interest still have an opportunity to
oppose the Plan. The deadline to submit written objections to the
Plan is on Sept. 10. Written acceptances or rejections of the
Plan are also due Sept. 10.
According to the Amended Disclosure Statement dated June 29, 2012,
the Reorganized Debtor will continue in business. The Debtor said
that a recent broker's opinion values its apartment complex at $11
million. It said that if the property were to be liquidated in a
forced sale, the property would bring less and would not cover all
the secured creditors. The Debtor said the property is currently
stable and maintains a 94% occupancy rate.
An exhibit says that in a fire sale, the real property would be
sold only for $8.5 million. The Debtor said that at a foreclosure
sale it is unlikely that a bid higher than the amount owed to the
lender would be realized. Projected dividend to non-insider
unsecured creditors would be 0% in this scenario.
Creditors and interests will be treated as follows:
* Secured lender JPMCC 2007-CIBC19 Frances Way, LLC will have
an allowed secured claim of $8.55 million. The debt will be
amortized over 300 monthly payments but will be payable
commencing on the Effective Date in 59 equal monthly
payments of $47,526 and one payment on the 60th month after
the Effective Date of all outstanding principal and
interest. JPMCC is impaired.
* Unsecured creditors who are non-insiders expected to have
claims aggregating $110,000 are impaired. They will be paid
100% of their allowed claims in 60 equal payments with
interest at 5% per annum.
* Unsecured creditors who are insiders are impaired and will
receive 10% of their claims. They will receive their pro
rata portion of payments made by the Debtor into a creditors
pool for the class, after payments to higher ranked claims
are completed. The Debtor will make 60 equal monthly
payments of $1,000 per month. The Debtor believes the class
will consist of the claims of Barry S. Nessbaum Co.,
Watersong Apartments LP, and Dallas Bayou Bend, Ltd. The
total amount of the claims will be approximately $600,000.
* Holders of equity interests will retain their current
ownership interests.
JPMCC is represented by:
Eli O. Columbus, Esq.
Matthew T. Ferris, Esq.
WINSTEAD PC
5400 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270-2199
Tel: (214) 745-5400
Fax: (214) 745-5390
A copy of the Disclosure Statement filed July 10, 2012, is
available at http://bankrupt.com/misc/BNC_Frances_DS_071012.pdf
About BNC Frances
BNC Frances Villas, L.P., owns a 200-unit apartment complex in
Richardson, Texas known as Frances Way Villas. BNC Frances filed
a Chapter 11 petition (Barnk. N.D. Tex. Case No. 12-32154) in
Dallas on April 2, 2012, to halt a foreclosure sale of its
property. The Debtor disclosed $11,072,048 in assets and
$9,292,375 in liabilities as of the Chapter 11 filing. Eric A.
Liepins, P.C., serves as the Debtor's bankruptcy counsel.
BUD'S CAR WASH: Defendants' Response Deadline Moved to September
----------------------------------------------------------------
Bankruptcy Judge David E. Rice signed off on separate stipulations
extending the time within which defendants must answer or respond
to these complaints:
* Charles W. Irwin, Jr. and Judith G. Irwin, Plaintiffs, v.
The Estate of Howard Alan Diener, et al., Defendants, Adv.
Proc. No. 12-00367 (Bankr. D. Md.); and
* AMR, Inc., Plaintiff, v. The Estate of Howard Alan Diener,
et al., Defendants, Adv. No. 12-00375 (Bankr. D. Md.).
According to the Stipulations both dated July 24, 2012, available
at http://is.gd/Aygh7dfrom Leagle.com, because the parties are
currently engaged in the drafting of a settlement agreement that
will resolve all of the issues raised in this adversary
proceeding, and the deadline for the defendants to file an answer
or otherwise respond to the complaint is July 17, the plaintiffs
and defendants (other than Equity Trust Company, whose claim has
been transferred to Darlene Scher), stipulate and agree that the
time within which each defendant is required to file an answer or
otherwise respond to the complaint is extended to and including
Sept. 4, 2012.
Based in Cockeysville, Maryland, Bud's Car Wash Mountain Road,
LLC, and AMR, Inc., filed for Chapter 11 bankruptcy (Bankr. D. Md.
Case Nos. 10-26052 and 10-26054) on July 16, 2010. Bud's Car Wash
scheduled assets of $45,723 and debts of $4,629,977. AMR Inc.
scheduled assets of $3,673,296 and debts of $4,640,090. James
Greenan, Esq., at McNamee, Hosea, et al., serves as the Debtors'
counsel. The petition was signed by Charles W. Irwin, Jr.,
managing member.
CANYON HOLDINGS: Plan Trustee Has OK to Complete Asset Sale
-----------------------------------------------------------
Marc S. Stern, the Plan Trustee for Canyon Holdings LLC Series
Southgate 42, obtained authorization from the Hon. Marc Barreca of
the U.S. Bankruptcy Court for the Western District of Washington
to complete the sale of assets to J. Hugh Wiebe in accordance with
the Purchase and Sale Agreement, free and clear of all liens and
encumbrances.
As reported by the Troubled Company Reporter on July 3, 2012, the
Plan Trustee asked the Court to authorize the closing of an asset
sale provided in the confirmed plan. The Plan Trustee agreed to
reduce the purchase price related to repairs, mold mitigation, and
related items totaling $121,800.76. The TCR reported on June 5,
2012, that the Court confirmed the Plan of Reorganization dated as
of March 20, 2012, proposed by the Debtor and Nantucket Fund, Inc.
The plan contemplates the sale of real estate property under a
Commercial & Investment Real Estate Purchase and Sale Agreement
(CIREPSA) dated Feb. 6, 2012, between J. Hugh Wiebe and Canyon
Holdings, LLC.
The Court ordered that from closing escrow will pay to East-West
Bank and Business Bank the full amount of their liens on the
property. In the event that the debtor objects to any amount, the
non-disputed amount will be tendered and any disputed amount will
be held by escrow pending either agreement of the parties or a
court order.
The full amount of security deposits, among other things, held by
the Debtor will be accounted for at closing and, if there is any
dispute, the disputed amount will be held back. If the Debtor is
claiming any security deposit from a former tenant, proof of
compliance with the Landlord Tenant Act will be provided prior to
those funds being released. The Court ordered that from closing
the escrow will hold back the sum of $30,000 for the purpose of
paying plan trustee's expenses herein and an additional $40,000
for payment of fees for the attorney for the debtor in possession.
The sums will be disbursed upon further court order.
About Canyon Holdings
Clyde Hill, Wash.-based Canyon Holdings LLC Series Southgate 42
owns a condominium project in Bellingham, Wash., and is presently
leasing the units it owns in the facility.
Petitioner Joseph Novack filed an involuntary Chapter 11
bankruptcy petition against the Company (Bankr. W.D. Wash. Case
No. 12-11327) on Feb. 13, 2012. Jeffrey B. Wells, Esq., in
Seattle, Washington, assist the Debtor in its restructuring
efforts.
Mr. Novak obtained an order from the Bankruptcy Court declaring
Canyon Holdings in default as required under Section 303 of the
Bankruptcy Code.
The U.S. Trustee has not appointed a committee of unsecured
creditors in the Debtor's case.
CARDTRONICS INC: S&P Keeps 'BB' Corporate Credit Rating
-------------------------------------------------------
Standard & Poor's Ratings Services revised the recovery rating on
the Cardtronics Inc.'s $200 million 8.25% senior subordinated
notes due 2018 to '3' from '4', based on an increase to its
default-level enterprise valuation on the company. "The higher
valuation reflects the successful integration of recent
acquisitions, the corresponding larger scale from these
acquisitions as well as organic growth, and the maintenance of
improved profitability. The 'BB' issue-level rating on the notes
is unchanged. While our increased valuation has resulted in an
estimated numerical recovery in the 70% to 90% range for the
subordinated notes, we have capped the recovery rating at '3' (50%
to 70% expected recovery) due to our policy of limiting the
recovery on unsecured debt at '3' for issuers in the 'BB'
category," S&P said.
"The 'BB' corporate credit rating and stable outlook on
Cardtronics remain unchanged and reflect its 'fair' business risk
profile and 'significant' financial risk profile. The business
risk assessment incorporates the company's sustained improvement
in EBITDA margins and return on capital over the past three years,
and its clear leadership position in its niche product market, but
these positive attributes are offset by its relatively limited
scale, limited product and geographic diversity, material customer
concentration (7-Eleven), and strong competition from electronic
payment technologies. The financial risk profile reflects leverage
and other credit metrics currently somewhat better than a
significant financial profile, but also its acquisitive track
record. In addition, cash flow levels are modest on an absolute
basis and provide only moderate financial flexibility within the
rating," S&P said.
RATINGS LIST
Cardtronics Inc.
Corporate Credit Rating BB/Stable/--
Recovery Rating Revised
To From
Cardtronics Inc.
Senior Subordinated BB BB
Recovery Rating 3 4
CLAYTON WAGES: Can't Modify JPMorgan Mortgage on Property
---------------------------------------------------------
Bankruptcy Judge Jim D. Pappas in Idaho declined to confirm a
Chapter 11 reorganization plan that proposes to restructure a
mortgage debt secured by property that serves as the debtors'
residence and is also used in the operation of their business.
According to Judge Pappas, the Plan does not satisfy 11 U.S.C.
Sec. 1129(a)(1) because it violates an applicable provision of the
Bankruptcy Code, Sec. 1123(b)(5).
Clayton and Andrea Wages reside in a house situated on roughly 11
acres near Heyburn, Idaho. They also use the Property in the
operation of their trucking business.
In May 2011, JPMorgan Chase Bank, N.A., filed a $127,418 secured
claim in the Debtors' bankruptcy case based on a mortgage debt.
Per the mortgage note's terms, the Debtors agreed to make monthly
payments through April 1, 2029, at an annual interest rate of
7.5%. The debt was secured by a mortgage on the Property.
The Debtors filed a chapter 11 plan in November 2011, proposing to
modify the terms of JPMorgan's mortgage by reducing the interest
rate to 5.0% per year, and extending the payoff date to March 1,
2032. JPMorgan objected to confirmation of the Plan, asserting
that, per 11 U.S.C. Sections 1129(a)(1) and 1123(b)(5), the
Debtors may not modify the bank's contract rights because its
claim is secured solely by an interest in property that the
Debtors use as their principal residence. The Debtors, for their
part, argue that, because they also operate a business on the
Property, the claim is not secured by real property used solely as
their residence, and, therefore, Sec. 1123(b)(5) is inapplicable.
A copy of the Court's July 24, 2012 Memorandum of Decision is
available at http://is.gd/TtNnM4from Leagle.com.
Brian Langford, Esq., at Routh Crabtree Olsen, P.S., in Boise,
argues for JPMorgan.
Clayton and Andrea Wages filed for Chapter 11 bankruptcy (Bankr.
D. Idaho Case No. 11-40249) on March 4, 2011. They are
represented by:
Brent T. Robinson, Esq.
ROBINSON, ANTHON & TRIBE
615 H. Street
P.O. Box 396
Rupert, Idaho 83350
Tel: (208)436-4717
Fax: (208)436-6804
E-mail: btr@idlawfirm.com
COMMUNITY CHOICE: S&P Affirms 'B-' Issuer Credit Rating
-------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Ohio-
based Community Choice Financial (CCFI) to positive from stable.
"At the same time, we affirmed the 'B-' issuer credit rating," S&P
said.
"The outlook revision reflects our view that the weakness of
CCFI's business position as a result of legislative risk has
diminished slightly because we believe the company will continue
to operate under the Ohio Mortgage Loan Act regulations," said
Standard & Poor's credit analyst Igor Koyfman. "Although
regulatory and legislative matters at both the state and federal
levels will continue to be a credit weakness, we believe that the
management team has demonstrated an ability to mitigate these
risks and maintain revenues through product innovation."
"Based on regulatory decisions the Consumer Financial Protection
Bureau (CFPB) has made to date, we think that risks related to
regulation by the CFPB will be less adverse than our initial
expectations, which we factored into the current rating. We
believe that the CFPB will concentrate largely on improved
disclosure and consumer understanding of the products offered by
CCFI, which will not have a devastating effect on CCFI's ability
to continue operations. We also expect regulatory costs to be
manageable."
"In our view, the company's diversification and expansion strategy
is a positive ratings factor," said Mr. Koyfman. "During the past
few years, CCFI's management team has successfully acquired
several companies--with the acquisition of California Check
Cashing Stores in April 2011 being the largest--and improved the
store-level financial performance of these companies through
introduction of CCFI's existing suite of products and operating
strategies. Nevertheless, CCFI's business is still substantially
concentrated in two states--California and Ohio--with about 60% of
stores located in those states," S&P said.
"The positive outlook reflects our expectation that CCFI should be
able to manage legislative and regulatory risks. At the same time,
CCFI has maintained stable earnings and cash flows, which we
expect to continue. CCFI's financial metrics are largely in line
with a 'B' rating. We could raise the rating within the next 12
months if CCFI maintains its financial metrics and CFPB's
examination findings do not result in changes that significantly
affect future earnings--either by eliminating or severely limiting
CCFI's ability to originate certain products, or through fines for
practices that the CFPB finds inappropriate. We could lower the
rating if leverage, measured as a ratio of debt to EBITDA,
increases by more than 20%, or if legislative or regulatory issues
arise," S&P said.
CONVERTED ORGANICS: Has 209.3 Million Outstanding Common Shares
---------------------------------------------------------------
On Jan. 3, 2012, Converted Organics entered into an agreement with
an institutional investor whereby the Company agreed to sell to
the investor twelve senior secured convertible notes. The initial
January Note was issued on Jan. 3, 2012, in an original principal
amount of $247,500. The remaining eleven January Notes will each
have an original principal amount of up to $237,600. Each January
Note matures eight months after issuance. The total face value of
the twelve notes under this agreement will be $2,861,100, assuming
each note is sold for the full face value, to the investor, of
which there is no assurance. The January Notes are convertible
into shares of our common stock at a conversion price equal to 80%
of lowest bid price of the Company's common stock on the date of
conversion. Also, as previously reported on March 12, 2012, the
Company entered into an agreement with two investors, pursuant to
which the Company agreed to effect an additional closing under the
Jan. 12, 2012, convertible note in which the Company issued the
buyers new notes having an aggregate original principal amount of
$550,000. As of July 17, 2012, the total principal outstanding on
these notes was $1,927,660.
As of July 19, 2012, the principal amount of the Notes has
declined to $1,890,160. From July 17, 2012, until July 19, 2012,
a total of $37,500 in principal had been converted into 10,639,439
shares of common stock. Since the issuance of the Original Note
and the addtional closing, a total of $112,500 in principal has
been converted into 28,759,982 shares of common stock (after
effect of the November 2011 and March 2012 reverse stock splits).
The Note holders are accredited investors and the shares of common
stock were issued in reliance on Section 3(a)(9) under the
Securities Act of 1933, as amended.
As of July 19,2012, the Company had 209,290,454 shares of common
stock outstanding.
About Converted Organics
Boston, Mass.-based Converted Organics Inc. utilizes innovative
clean technologies to establish and operate environmentally
friendly businesses. Converted Organics currently operates in
three business areas, namely organic fertilizer, industrial
wastewater treatment and vertical farming.
After auditing the 2011 results, Moody, Famiglietti & Andronico,
LLP, noted that the Company has suffered recurring losses and
negative cash flows from operations and has an accumulated deficit
that raises substantial doubt about its ability to continue as a
going concern.
Converted Organics reported a net loss of $17.98 million in 2011,
compared with a net loss of $47.81 million in 2010.
The Company's balance sheet at March 31, 2012, showed $7.18
million in total assets, $6.81 million in total liabilities and
$367,679 in total stockholders' equity.
CROWNROCK LP: S&P Raises Senior Unsecured Debt Ratings to 'B'
-------------------------------------------------------------
Standard & Poor's Ratings Services raised its senior unsecured
debt ratings on Midland, Texas-based CrownRock LP to 'B' (one
notch higher than the corporate credit rating) from 'CCC+'. "We
simultaneously revised the recovery rating on these notes to '2',
indicating our expectation of substantial (70% to 90%) recovery
in the event of a payment default, from '5'," S&P said.
"The revised recovery reflects changes to CrownRock's reserve
values following a company-provided PV-10 report using mid-year
2012 reserves at our stressed pricing assumptions of $45 per
barrel of West Texas Intermediate (WTI) crude oil and $4.00 per
million British Thermal Units (BTU) of Henry Hub natural gas," S&P
said. F
"The corporate credit rating on CrownRock reflects its small oil
and gas reserve and production base as an independent E&P company.
The ratings also incorporate the company's aggressive capital
spending requirements to hold its acreage, a high percentage of
undeveloped reserves, its participation in a volatile and
commodity-based industry, and reliance on one basin (the Wolfberry
region of the Permian Basin) for its production growth and cash
flows. These negative credit factors are only partially buffered
by an oil-weighted reserve profile and a competitive cost
structure. We consider CrownRock's business risk to be
'vulnerable' and its financial profile to be 'highly leveraged',"
S&P said.
RATINGS LIST
CrownRock LP
Corporate credit rating B-/Stable/--
Ratings Raised; Recovery Rating Revised
To From
CrownRock LP
CrownRock Finance Inc.
Senior unsecured debt ratings B CCC+
Recovery rating 2 5
DAIS ANALYTIC: Obtains $2 Million Financing from Investor
---------------------------------------------------------
Dais Analytic Corporation, on July 13, 2012, issued a Secured
Convertible Promissory Note and Patent Security Agreement to an
investor. Pursuant to the terms and subject to the conditions set
forth in the Financing Agreements, the Investor provided a loan in
the amount of $2,000,000 to the Company, which will be secured by
all current and future patents, patent applications and similar
protections of the Company and all rents, royalties, license fees
and "accounts" with respect to those intellectual property assets.
Pursuant to the Secured Convertible Promissory Note, interest in
the amount of 6% per annum, calculated on a 365 day year, and the
principal amount of $2,000,000 and accrued interest will be paid
on or before Oct. 15, 2012.
The Investor has the right to convert principal and accrued
interest into the Company's common stock at $.26 per share, as
adjusted to reflect subsequent stock dividends, splits,
combinations and recapitalizations; provided, however, that in the
event any such conversion of the Note would result in the Investor
beneficially owning in excess of 9.99% of the then issued and
outstanding shares of Common Stock at that time then instead of
Company issuing shares of common stock in excess of the Threshold,
Company will pay in cash those excess amounts of principal and
interest. Investor may waive the Threshold and convert all or any
part of the excess amount upon providing the required prior
written notice to Company.
Pursuant to the Patent Security Agreement, the Company will not,
without the Investor's prior consent, sell, dispose or otherwise
transfer all or any portion of the Collateral, except for license
grants in the ordinary course of business. In addition, the
Company will take all actions reasonably necessary to prosecute to
allowance applications for patents and maintain all patents, and
to seek to recover damages for infringement, misappropriation or
dilution of the Collateral with limited exceptions.
The proceeds of the Note were used in part to pay in full all
outstanding principal and interest due pursuant to the Secured
Convertible Promissory Note issued to Platinum-Montaur Life
Sciences, L.L.C., on March 22, 2011. The remainder of the
proceeds will augment Company's working capital.
About Dais Analytic
Odessa, Fla.-based Dais Analytic Corporation has developed and
patented a nano-structure polymer technology, which is being
commercialized in products based on the functionality of these
materials. The initial product focus of the Company is ConsERV,
an energy recovery ventilator. The Company also has new product
applications in various developmental stages.
In the auditors' report accompanying the financial statements for
year ended Dec. 31, 2011, Cross, Fernandez & Riley LLP, in
Orlando, Florida, expressed substantial doubt about the Company's
ability to continue as a going concern. The independent auditors
noted that the Company has incurred significant losses since
inception and has a working capital deficit and stockholders'
deficit of $3.22 million and $4.90 million at Dec. 31, 2011.
The Company reported a net loss of $2.33 million in 2011,
compared with a net loss of $1.43 million in 2010.
The Company's balance sheet at March 31, 2012, showed $1.56
million in total assets, $6.44 million in total liabilities and a
$4.87 million total stockholders' deficit.
DEEP DOWN: Consummates 1-for-20 Reverse Stock Split
---------------------------------------------------
Deep Down, Inc., will completed a one-for-twenty reverse stock
split of its authorized and outstanding common stock on July 18,
2012.
Immediately before the Reverse Stock Split, Deep Down had
490,000,000 shares of common stock authorized, of which
approximately 204,000,000 shares were outstanding. As a result of
the Reverse Stock Split, Deep Down will have 24,500,000 authorized
shares of common stock, of which 10,200,000 shares will be
outstanding, pending fractional-share rounding-up calculations to
adjust for the Reverse Stock Split.
The Company noted that the purpose of the reverse split is to
increase the per share trading price of its common stock in the
hope of attracting a larger pool of investors. The Company also
intends to upgrade its listing to the OTCQX as soon as it
qualifies. Trading of the Company's common stock on a post-
reverse split-adjusted basis on the OTC QB Market is to begin as
of the opening of trading on July 18, 2012.
Registered shareholders of Deep Down who hold existing physical
stock certificates will receive a letter of transmittal from Deep
Down's transfer agent, Standard Registrar & Transfer Co. Inc.,
12524 South 1840 East, Draper, UT 84020, containing instructions
on how to receive new share certificates.
"This is one more important step in the maturity and growth of
Deep Down as a publicly held company," stated Ron Smith, president
and CEO.
Deep Down's ticker symbol will change from 'DPDW' to 'DPDWD' for
the next 20 days following the completion of a 1-for-20 reverse
stock split. After the 20th business day, the ticker symbol will
revert back to its original symbol DPDW.
About Deep Down
Houston, Tex.-based Deep Down, Inc. --
http://www.deepdowncorp.com/-- is an oilfield services company
specializing in complex deepwater and ultra-deepwater oil
production distribution system support services, serving the
worldwide offshore exploration and production industry.
The Company's balance sheet at March 31, 2012, showed $31.91
million in total assets, $7.35 million in total liabilities and
$24.56 million in stockholders' equity.
During the Company's fiscal years ended Dec. 31, 2010, and 2009,
the Company has supplemented the financing of its capital needs
through a combination of debt and equity financings. Most
significant in this regard has been the Company's debt facility
the Company has maintained with Whitney National Bank. The
Company's loans outstanding under the Amended and Restated Credit
Agreement with Whitney become due on April 15, 2012. The Company
will need to raise additional debt or equity capital or
renegotiate the existing debt prior to such date. The Company is
currently in discussions with several lenders who have expressed
interest in refinancing its debt. The Company's plan is to
refinance the outstanding indebtedness under the Restated Credit
Agreement or seek terms with Whitney that will provide an
extension of such Restated Credit Agreement along with additional
liquidity. However, the Company cannot provide any assurance that
any financing will be available to it on acceptable terms or at
all. If the Company is unable to raise additional capital or
renegotiate its existing debt, this would have a material adverse
impact on the Company's business or would raise substantial doubt
about its ability to continue as a going concern. In addition, as
of Dec. 31, 2010, the Company was not in compliance with the
financial covenants under the Restated Credit Agreement. On
March 25, 2011 the Company obtained a waiver for these covenants
as of Dec. 31, 2010.
DENBURY RESOURCES: Moody's Alters Rating Outlook to Stable
----------------------------------------------------------
Moody's Investors Service changed Denbury Resources Inc.'s outlook
to stable from negative. Moody's also affirmed Denbury's Ba3
Corporate Family Rating, the B1 rating on its senior subordinated
notes and its SGL-3 Speculative Grade Liquidity Rating.
"The stable outlook reflects Denbury's progress in implementing
its CO2 projects, as indicated by the positive production
responses achieved thus far in 2012, and the company's high cash
margins and good return expectations relative to peers as a result
of its oil-weighted production," commented Gretchen French,
Moody's Vice President. "Although financial leverage is still
considered high for the rating, Moody's expects leverage will
trend modestly lower over the near-term with further growth in
production and reserves."
Moody's current ratings for Denbury Resources Inc. are:
Corporate Family Rating of Ba3
Probability of Default Rating of Ba3
Senior Subordinated Notes rated B1 (LGD 4, 69%, changed from
LGD 4, 68%)
Rating Rationale
Denbury's Ba3 Corporate Family Rating reflects its large scale,
low risk, and long-lived asset base. Denbury is heavily engaged in
CO2 driven enhanced oil recovery (EOR) projects across several
mature basins in the US, and EOR projects are expected to be the
primary source of growth for the company over the long run.
Denbury has created a strong operational advantage for itself
through ownership of vital CO2 transportation infrastructure and
substantial CO2 reserves. The Ba3 rating also considers the
company's heavy exposure to oil production (93% of first quarter
2012 production), with favorable pricing fundamentals translating
into relatively strong margins and return expectations for the
company.
The Ba3 rating is tempered by Denbury's high financial leverage
and the heavy upfront capital needs and long-lead times associated
with CO2 operations. Leverage remains on the higher end of
similarly rated peers as a result of a heavy capital spending
program, the partially debt funded Thompson Field acquisition in
June of this year, and the impact of share buybacks in late 2011.
Denbury's pro-forma debt has increased to roughly $47,300/boe of
production and $12.40/boe of proven developed (PD) reserves, which
is high for the Ba3 rating. The company does not have any material
debt reduction plans over the near to mid-term. However, as EOR
production responses ramp up, Moody's expects leverage to modestly
decrease, with Denbury's leverage on production trending closer to
$40,000/boe by 2013. Furthermore, Denbury has been conservative in
booking EOR reserves prior to proven responses. Hence, Moody's
expects material reserve bookings to follow the long anticipated
EOR production responses in 2012 and 2013.
The rating is further restrained by the high breakeven costs of
tertiary oil production. Moody's currently estimates Denbury's
tertiary full-cycle costs at around $60/barrel (including F&D,
interest (including capitalized interest) and G&A costs) and
around $45/barrel on an incremental cash cost basis. However, with
Denbury's high average price realizations and a favorable price
outlook for oil ($85/barrel WTI over the medium term), the company
should continue to generate healthy margins and returns.
Denbury has approximately $305 million remaining on its original
$500 million share repurchase program that it implemented in
October 2011. While the company has not bought back any shares
thus far in 2012, Moody's expects that management will continue to
have a degree of shareholder return focus. Given Denbury's high
financial leverage profile, the Ba3 rating and stable outlook
assume that any potential future share buybacks will not be
financed with debt and will not materially curtail Denbury's
expected production and reserve growth profile.
Denbury's SGL-3 liquidity rating reflects adequate liquidity over
the next twelve months, with internally generated cash flow and
borrowings under its revolving credit facility expected to cover
capital expenditures and any potential small-scale bolt-on
acquisitions. By year-end 2012, the company is expected to have
minimal cash balances (estimated around $20 million) and around
$800 to $900 million of availability under its $1.6 billion
borrowing base revolving credit facility, which matures in 2016.
Denbury is expected to be well within the maintenance covenants
under the revolving credit facility, ensuring access during the
next four quarters. Denbury believes that its reserve profile is
indicative of a significantly larger borrowing base, providing a
degree of flexibility for alternate sources of liquidity. There
are no significant long term debt maturities until 2016.
The B1 rating on Denbury's senior subordinated notes reflects both
the overall probability of default of Denbury, to which Moody's
assigns a Probability of Default Rating of Ba3, and a loss given
default rating of LGD 4, 69%. Denbury has a $1.6 billion secured
borrowing base revolving credit facility. The revolver is secured
by nearly all of the company's oil and gas properties. The size of
the potential senior secured claims relative to the subordinated
notes results in the notes being notched one rating beneath the
Ba3 Corporate Family Rating under Moody's Loss Given Default
Methodology.
The ratings could be upgraded if Denbury reduces its leverage to
less than $30,000/boe of daily production and $10/boe PD reserves
on a sustainable basis, while maintaining its positive production
trends and good margins.
Conversely, the ratings could be downgraded if Denbury's retained
cash flow/debt declines below 35% on a long term basis. The
ratings could be also pressured if the company engages in debt
funded share repurchases or predominately debt funded material
acquisitions.
The principal methodology used in rating Denbury Resources was the
Independent Exploration and Production (E&P) 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.
Denbury Resources Inc. is headquartered in Plano, Texas.
DEWEY & LEBOEUF: Has $90.4MM Settlement Offer for Ex-Partners
-------------------------------------------------------------
The Wall Street Journal's Jennifer Smith reports the team shutting
down Dewey & LeBoeuf LLP on Thursday briefed hundreds of former
partners on a new, $90.4 million settlement plan intended to get
ex-partners to return some of the cash they were paid in 2011 and
2012 as Dewey headed toward bankruptcy.
WSJ notes an initial "clawback" proposal made earlier this month
seeking as much as $103.6 million drew howls of outrage from some
partners, who said the plan was skewed to favor the highest
earners.
According to the report, the latest proposed settlement
significantly eases the burden for rank-and-file partners and
retirees who took in relatively modest sums in 2011 and 2012. The
new plan seeks just $4.3 million in pay clawbacks from those who
earned as much as $400,000, compared with $8.9 million in pay
clawbacks under the original plan. And the minimum partner
contribution has been lowered to $5,000, compared with $25,000.
The new proposal places a slightly heavier burden on top earners
and those who were in leadership positions at Dewey, according to
a document reviewed by The Wall Street Journal. It would boost
the maximum partner contribution to $3.5 million from $3 million
and impose a new premium of up to 20% on members of the firm's
executive committee, who would be most at risk for lawsuits from
creditors or disgruntled partners who blame them for the firm's
failure. The pay clawbacks sought from the top-tier who earned $2
million or more would be at least $38.3 million, compared with
$36.2 million under the old plan.
According to WSJ, Joff Mitchell, Dewey's chief restructuring
officer and a managing partner at restructuring firm Zolfo Cooper
LLC, said the changes followed more than 1,000 e-mails and
conversations with former partners.
"I don't think anybody is going to be happy," Mr. Mitchell said
Thursday, according to WSJ. "What partners are being asked to do
is make a choice between two outcomes, neither of which they
particularly like, and hopefully the settlement is better than the
alternative."
WSJ says the latest plan targets 672 former Dewey partners,
including hundreds who left the firm earlier but received cash
payments for pension benefits or to pay back equity stakes they
had invested in the firm. Dewey had more than 300 partners at the
start of 2012. While the new plan would offer creditors about $13
million less than the previous plan, assuming full participation,
the Dewey bankruptcy team said that more partners were likely to
sign on to this version.
Creditors "are fully conversant with the plan," Mr. Mitchell said,
according to the report. Mr. Mitchell believes he will be able to
secure creditors' approval if enough partners sign on.
WSJ says former Dewey partners have until Aug. 7 to decide whether
to participate, and together they would have to contribute $50
million in order for Dewey's estate to present the plan in
bankruptcy court.
DEWEY & LEBOEUF: Judge Seeks More Info Before Bonus Ruling
----------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that U.S. Bankruptcy
Judge Martin Glenn requested more information Wednesday before
he'd rule on collapsed law firm Dewey & LeBoeuf LLP's request to
pay up to $450,000 in retention bonuses to keep certain employees
working to help the firm wind down and collect accounts
receivable.
Judge Glenn declined to rule on the issue at a hearing, saying
he'd need a breakdown of employees' salaries versus the bonuses
they're expected to get before he could make a decision.
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 Former Partners hired Tracy L. Klestadt, Esq., and
Sean C. Southard, Esq., at Klestadt & Winters, LLP, as counsel.
Dewey & LeBoeuf has won Court authority to use lenders' cash
collateral through July 31, 2012.
DIAMOND BEACH: Plan of Liquidation Confirmed
--------------------------------------------
Bankruptcy Judge Richard S. Schmidt early this month signed an
agreed order confirming the Chapter 11 plan of liquidation of
Diamond Beach VP.
The agreed order was presented by attorneys for the Debtor, the
partner, and the secured lenders. Gary Leach, an unsecured
creditor and an 8.82% limited partner of the Debtor, previously
filed an objection, noting that the Plan does not deal with Mr.
Leach's alleged guaranty liability to International Bank of
Commerce arising from Diamond Beach's debt.
The objection was resolved. According to the confirmation order,
the settlement agreement reached by the Debtor with its lender
would not be binding upon Mr. Leach in any action between IBC and
Leach. The order also provides that the Debtor's objection to Mr.
Leach's claims are deemed withdrawn.
The Plan contemplates approval of the settlement agreement with
IBC which provides for a liquidation of the Debtor, through
foreclosure of the Diamond Beach Property, valuation of property
by the Court, limited payment of deficiency, if any, by Randall J.
Davis, and distribution of litigation proceeds to fund payments of
the Plan.
IBC, which has an allowed secured claim of $28.19 million, is
impaired and voted to accept the Plan. The parties agreed that
title to the Diamond Beach property will be transferred to IBC by
foreclosure in exchange for a credit against the debt equal to the
value of the property.
Holders of general unsecured claims, which include the allowed
claim of $126,000 of Gary T. Leach, voted to accept the Plan.
Equity holders also voted in favor of the Plan.
According to the Disclosure Statement, the Plan provides for the
payment to Creditors as follows in the order of priority required
by the Bankruptcy Code: (1) allowed administrative claims will be
paid in cash in full with the "cash infusion" unless otherwise
agreed; (2) ad valorem property taxes will be paid in full by IBC
when due; (3) in full satisfaction of its allowed $28.19 million
secured claim, IBC will receive, among other things, the title to
the Diamond Beach property; (4) Allowed general unsecured claims
will be paid a pro rata share of the "litigation trust proceeds",
until paid in full, without interest; (5) Equity interest holders
will receive any funds remaining after full payment to holders of
allowed general unsecured claims.
The source of funds to achieve consummation of and carry out the
Plan will be (i) the Diamond Beach property; (ii) the Cash
Infusion; and (iii) the Litigation Trust Proceeds, which are to be
utilized to satisfy claims.
According to the liquidation analysis, unsecured creditors are
expected to recover 0% to 25% depending upon the allowance of
disputed claims and recovery on "reserved litigation claims."
Gary T. Leach is represented by:
Preston T. Towber, Esq.
TOWBER LAW FIRM PLLC
6750 West Loop South, Suite 920
Bellaire, Texas 77401
Tel: (832) 485-3555
Fax: (832) 485-3550
E-mail: preston@towberlaw.com
The secured lender is represented by:
John F. Higgins, Esq.
Thomas A. Woolley, III, Esq.
PORTER HEDGES LLP
1000 Main Street, 36th Floor
Houston, TX 77002
Tel: (713) 226-6000
Fax: (713) 226-6233
About Diamond Beach VP
Houston, Texas-based Diamond Beach VP, LP, filed a Chapter 11
petition (Bankr. S.D. Tex. Case No. 12-10175) in Brownsville on
April 2, 2012. The Debtor, a Single Asset Real Estate as defined
in 11 U.S.C. Sec. 101 (51B), disclosed $30.05 million in assets
and $28.24 million in liabilities in its schedules.
The Debtor owns the Diamond Beach Condominiums located at
Galveston, Texas. The Debtor valued the property at $29.4 million
in its schedules. The property serves as collateral to secured
loans of $29.57 provided by International Bank of Commerce.
Judge Richard S. Schmidt oversees the case. Edward L. Rothberg,
Esq., at Hoover Slovacek, LLP, serves as the Debtor's counsel.
The petition was signed by Randall J. Davis, as manager of the
Debtor's general partner.
IBC filed a motion to dismiss the Chapter 11 case in order to
begin foreclosure on the project. The parties later reached a
settlement.
IBC also sought to transfer the case to the Galveston Division.
If the Plan is confirmed, IBC agreed to withdraw this motion from
consideration by the Court.
A related entity, Sapphire VP LP, owner of Sapphire Condominiums
located at South Padre Island, Texas, filed a Chapter 11 petition
(Bankr. S.D. Tex. Case No. 12-10173) in Brownsville on April 2,
2012. IBC objected to Diamond Beach's request for joint
administration. If the Plan is confirmed, the Debtor will
withdraw this motion from consideration by the Court.
DIRECTCASH PAYMENTS: Moody's Assigns 'B1' Corp. Family Rating
-------------------------------------------------------------
Moody's Investors Service assigned B1 corporate family and
probability of default ratings (CFR and PDR respectively) to
automated teller machines (ATM) provider/operator, DirectCash
Payments Inc., in connection with financing arrangements related
to the recent acquisitions of Customers Limited in Australia and
InfoCash Holdings Limited in the United Kingdom. The rating
outlook is stable. At the same time, Moody's assigned a B3 rating
to the company's $125 million 7-year senior unsecured notes.
Moody's also assigned an SGL-2 speculative grade liquidity rating
(good liquidity). This is the first time Moody's has rated
DirectCash.
The rating action stems from a significant acquisition, which
accounts for the company's somewhat limited financial flexibility,
execution risks related to pending and recently completed
acquisitions, and the potential of acquisition activity continuing
for the foreseeable future such that debt repayment is
significantly deferred.
DirectCash has two classes of debt, a $200 million senior secured
bank credit facility ($85 million term loan and $115 million
revolving term loan, the latter of which, pro forma for the notes
issue and related equity offering, will be un-drawn at closing)
and $125 million of senior unsecured notes. The preferential
access to realization proceeds afforded to the relatively large
pool of secured obligations disadvantages the unsecured notes so
that the latter are rated two notches below the CFR at B3.
Moody's assesses DirectCash's liquidity as being good (SGL-2
speculative grade liquidity rating) based on Moody's expectations
that the company will be cash flow positive and will also have
access to a sizeable multi-year revolving credit facility.
The following summarizes the rating actions and DirectCash's
ratings:
Issuer: DirectCash Payments Inc.
Corporate Family Rating, Assigned B1
Probability of Default Rating, Assigned B1
Speculative Grade Liquidity Rating, Assigned SGL-2
Senior Unsecured notes, Assigned B3 (LGD5, 80%)
Outlook, Stable
Rating Rationale
DirectCash's B1 CFR rating is primarily influenced by somewhat
limited financial flexibility, the consequence of a dividend that
consumes a significant proportion of EBITDA, as well as somewhat
small aggregate scale which limits access to alternative sources
of financing. As well, the maturity of the company's Canadian home
market and related products prompts acquisitiveness, and suggests
that de-levering potential will be invested in additional growth
opportunities as they arise rather than debt reduction. There are
also execution risks stemming from the relative scale, timing,
geographic dispersion and complexity of two recent acquisitions.
Potential management dilution, a matter that is exacerbated by the
key role that DirectCash's CEO plays in both strategic and day-to-
day operations as the company attempts to integrate the recently
acquired businesses, are also factors that constrain the rating.
While overall customer concentration shows good diversification,
Canadian operations are somewhat reliant on a couple of key
relationships, albeit this latter risk is partially mitigated by
DirectCash's use of long-term contracts with built-in renewal
clauses. DirectCash also records relatively strong margins and is
using moderate debt leverage of EBITDA with which to fund the two
pending acquisitions. As well, since operations are not capital
intensive, free cash generation is not constrained by ongoing
capital requirements.
Rating Outlook
The company's stable and sustainable cash flow stream in the
context of moderate financial leverage allows the ratings outlook
to be stable.
What Could Change the Rating - Up
In the event that leverage of debt to EBITDA (measured inclusive
of Moody's standard adjustments) is expected to be sustained below
2.5x and, given solid fundamentals and liquidity, positive outlook
and rating actions would be considered.
What Could Change the Rating - Down
In the event that debt to EBITDA leverage was expected to be
sustained above 3.5x, or were free cash flow to be significantly
limited, adverse outlook and rating actions would be considered.
Corporate Profile
Headquartered in Calgary, Alberta, Canada, publicly traded
DirectCash Payments Inc., is a member of Canadian Interac debit
network and part of the Visa and Mastercard networks, offering
automated teller machines (ATM's), prepaid phone, debit and credit
cards, and debit terminals. DirectCash operates primarily in
Canada but also in the United States and Mexico, and, with two
recent acquisitions, also in Australia, New Zealand and Great
Britain.
DIRECTCASH PAYMENTS: S&P Assigns 'B+' Credit Corporate Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' long-term
corporate credit rating to Calgary, Alta.-based automated teller
machine (ATM) and prepaid card provider DirectCash Payments Inc.
The outlook is stable.
"At the same time, Standard & Poor's assigned its 'B' issue-level
rating and '5' recovery rating to the company's proposed C$125
million senior unsecured note. The '5' recovery rating indicates
our expectations of modest (10%-30%) recovery in the event of
default," S&P said.
"DirectCash will use the proceeds from the note issuance to repay
bridge financing that it used to fund a portion of the Customers
Ltd. acquisition," said Standard & Poor's credit analyst David
Fisher.
"The ratings on DirectCash reflect what Standard & Poor's views as
the company's 'weak' business risk profile and 'aggressive'
financial risk profile, as defined by our criteria," S&P said.
"The company recently entered new senior secured credit facilities
that included a C$85 million term loan and a C$115 million
revolver. These facilities were used to repay the previous credit
facilities and to partially fund the acquisitions of Customers and
InfoCash Holdings Ltd. Pro forma these acquisitions, as of March
31, 2012, DirectCash operated approximately 18,900 ATM sites, and
had trailing 12 months revenue and EBITDA of C$243 million and
C$73 million, respectively," S&P said.
"The stable outlook reflects our expectation that DirectCash will
maintain its pro forma debt-to-EBITDA ratio (adjusted as per
Standard & Poor's criteria) below 3.5x in the next year. Pro forma
credit metrics are stronger than those typically indicative of an
aggressive financial risk profile, reflecting what we view as the
potential for integration/execution challenges associated with
the company's recent sizable acquisitions to weigh on operating
results. We could raise the ratings on DirectCash if it integrates
these acquisitions successfully while simultaneously demonstrating
that it can stabilize or increase transaction volumes and EBITDA
on a pro forma basis. We could lower the ratings if pro forma
leverage increases to above 4x, which we believe would most likely
occur if unforeseen integration/execution challenges arise from
the acquisitions," S&P said.
EMMIS COMMUNICATIONS: GRC Has Until Aug. 8 to Buy KXOS-FM Station
-----------------------------------------------------------------
Subsidiaries of Emmis Communications Corporation entered into a
Second Amendment to Put and Call Agreement with a subsidiary of
Grupo Radio Centro, S.A.B. de C.V. and certain of GRC's "Qualified
Designees".
The First Amendment to Put and Call Agreement Dated April 13,
2012, gave GRC's Qualified Designees the right, but not the
obligation, to purchase radio station KXOS-FM (f/k/a KMVN-FM), Los
Angeles, CA, for $85.5 million (instead of the $110 million
originally set forth in the Put and Call Agreement) provided that
the closing occur on or before the thirtieth day after FCC
approval of the transfer of the Station's main FCC license. The
FCC approved the transfer on June 22, 2012. The Second Amendment
extends to Aug. 8, 2012, the date by which the Qualified Designees
may purchase the station for the $85.5 million purchase price.
Any closing under the Put and Call Agreement, as amended, is
subject to customary representations, warranties, covenants and
conditions.
A copy of the Second Amendment is available for free at:
http://is.gd/CrtTjR
About Emmis Communications
Headquartered in Indianapolis, Indiana, Emmis Communications
Corporation -- http://www.emmis.com/-- owns and operates 22 radio
stations serving New York, Los Angeles, Chicago, St. Louis,
Austin, Indianapolis, and Terre Haute, as well as national radio
networks in Slovakia and Bulgaria. The company also publishes six
regional and two specialty magazines.
The Company's balance sheet at May 31, 2012, showed $350.94
million in total assets, $360.51 million in total liabilities,
$46.88 million in series A cumulative convertible preferred stock,
and a $56.45 million total deficit.
* * *
Emmis carries Caa2 corporate family rating and a Caa3 probability
of default rating from Moody's.
In July 2011, Moody's Investors Service placed the ratings of
Emmis on review for possible upgrade following the company's
earnings release for 1Q12 (ended May 31, 2011) including
additional disclosure related to the pending sale of controlling
interests in three radio stations. The sale of the majority
ownership to GCTR will generate estimated net proceeds of
approximately $100 million to $120 million, after taxes, fees and
related expenses. Emmis will retain a minority equity interest in
the operations of the three stations and Moody's expects senior
secured debt to be reduced resulting in improved credit metrics.
FIRST YORKSHIRE: Case Summary & 5 Unsecured Creditors
-----------------------------------------------------
Debtor: First Yorkshire Holdings, Inc.
7318 Topanga Canyon Blvd
Canoga Park, CA 91303
Bankruptcy Case No.: 12-16641
Chapter 11 Petition Date: July 24, 2012
Court: United States Bankruptcy Court
Central District of California (San Fernando Valley)
Judge: Maureen Tighe
Debtor's Counsel: Moises S. Bardavid, Esq.
LAW OFFICES OF MOSES S. BARDAVID
16133 Ventura Blvd 7th Fl
Encino, CA 91436
Tel: (818) 377-7454
Fax: (818) 377-7455
E-mail: mbardavid@hotmail.com
Scheduled Assets: $1,265,000
Scheduled Liabilities: $3,768,648
A copy of the Company's list of its five unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/cacb12-16641.pdf
The petition was signed by Oscar Broederlow, vice president.
FRESH CHOICE: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Fresh Choice, LLC
1310 65th Street
Emeryville, CA 94608
Bankruptcy Case No.: 12-46157
Chapter 11 Petition Date: July 24, 2012
Court: United States Bankruptcy Court
Northern District of California (Oakland)
Judge: Roger L. Efremsky
Debtor's Counsel: Basil J. Boutris, Esq.
LAW OFFICES OF VAUGHT AND BOUTRIS
80 Swan Way #320
Oakland, CA 94621
Tel: (510) 430-1518
E-mail: basil@vaughtboutris.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 20 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/canb12-46157.pdf
The petition was signed by David S. Boyd, president.
GAC STORAGE: Copley Place's Plan Confirmation Hearing Sept. 6
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
according to The Makena Great American Anza Company, LLC's case
docket, will convene a hearing on Sept. 6, 2012, at 10:30 a.m., to
consider the confirmation of GAC Storage Copley Place, LLC's
Chapter 11 Plan of Reorganization dated June 12, 2012.
Ballots accepting or rejecting the Plan were due July 23.
According to Second Amended Disclosure Statement, the Plan
proposes to pay all Allowed Administrative Expense Claims and
Allowed Priority Claims in full on the Plan's Effective Date
(unless other treatment is agreed to), with Holders of Allowed
Unsecured Claims receiving a single cash distribution based on pro
rata share of $10,000 within 60 days of the Effective Date.
The Plan proposes to fully pay claims of Class 1 (Priority Non-tax
Claims), Class 2 (Bank Claim), Class 3 (Other Secured Claims).
Class 4 (General Unsecured Claims) will receive their pro rata
share of the unsecured claim distribution. Distribution is
estimated at 50%.
Class 5 (Interests) will neither receive nor retain any property
under the Plan or any interest in the property of the Debtor's
estate.
A copy of the Disclosure Statement is available for free at
http://bankrupt.com/misc/GACSTORAGE_Coopley_ds2amended.pdf
About GAC Storage & Makena Great American Anza Co.
GAC Storage Lansing LLC -- which owns and operates a warehouse and
storage facility with 522 storage units, generally located at 2556
Bernice Road, Lansing, Illinois -- filed for Chapter 11 bankruptcy
(Bankr. N.D. Ill. Case No. 11-40944) on Oct. 7, 2011. Jay S.
Geller, Esq., D. Sam Anderson, Esq., and Halliday Moncure, Esq.,
at Bernstein, Shur, Sawyer & Nelson, P.A., represents the Debtor
as counsel. Robert M, Fishman, Esq., and Gordon E. Gouveia, Esq.,
at Shaw Gussis Fishman Glantz Wolfson, & Towbin LLC, in Chicago,
represents the Debtor as local counsel. It estimated $1 million
to $10 million in assets and debts. The petition was signed by
Noam Schwartz, secretary and treasurer of EBM Mgmt Servs, Inc.,
manager of GAC Storage, LLC.
The Makena Great American Anza Company LLC --
http://www.makenacapital.net/-- a commercial shopping center
developers in Southern California, filed a Chapter 11 petition
(Bankr. N.D. Ill. Case No. 11-48549) on Dec. 1, 2011, in Chicago.
Anza leads the way in the acquisition and development of
"A-Location" small commercial shopping centers and corner
properties in Southern California. Lawyers at Shaw Gussis Fishman
Glantz Wolfson & Towbin, LLC, in Chicago, and Bernstein, Shur,
Sawyer & Nelson, P.A., in Portland, Maine, serve as counsel to the
Debtor. Makena disclosed $13,938,161 in assets and $17,723,488 in
liabilities.
Other affiliates that sought bankruptcy protection are GAC Storage
Copley Place LLC, GAC Storage El Monte LLC, and San Tan Plaza LLC.
The cases are being jointly administered under lead case no.
11-40944.
At the behest of lender Bank of America, N.A., the Bankruptcy
Court dismissed the Chapter 11 case of San Tan Plaza, as reported
by the Troubled Company Reporter on July 17, 2012.
GAC STORAGE: El Monte's Plan Has Sept. 7 Confirmation Hearing
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
according to The Makena Great American Anza Company, LLC's case
docket, will convene a hearing on Sept. 7, 2012, at 1 p.m., to
consider the confirmation of GAC Storage El Monte, LLC's Chapter
11 Plan of Reorganization. Objections, if any, are due Aug. 20,
2012.
Ballots accepting or rejecting the Plan are due Aug. 20.
According to the Disclosure Statement, GAC Storage El Monte's
Chapter 11 Plan provides for the reorganization of the Debtor's
business and the resolution of all outstanding Claims against and
interests in the Debtor. The Plan also contemplates the issuance
of new equity interests in the Reorganized Debtor to an entity
owned entirely by Ronnie Schwartz in exchange for substantial new
equity contributions to fund (i) $146,000 of the Payment Reserve
and (ii) payment of any Allowed Administrative Claims, Allowed
Priority Tax Claims, Allowed Non-Tax Priority Claims, Allowed
Other Secured Claims, and the Allowed Secured Real Estate Tax
Claim if the Reorganized Debtor's available Cash or business
operations are insufficient to fund such payments.
The Debtor believes that the New Equity Contributions constitute
fair consideration for the Reorganized Debtor's equity interests.
Neither GAC Storage, LLC, which is the Debtor's current owner, nor
any of its members, nor any of the Guarantors of the Bank Claim
will have any ownership interest in the Reorganized Debtor or
Newco. Furthermore, none of the foregoing entities or individuals
will have any involvement in, or receive any compensation from,
the Reorganized Debtor or Newco. The Plan also provides for an
injunction against the commencement or continuation of any action,
the employment of process, or any act to collect, recover or
offset any Claim of any Holder against the Guarantors under the
Bank Loan Documents or otherwise, so long as the Reorganized
Debtor is performing its obligations under the Plan and no Default
has occurred. In consideration for the Guarantor Injunction, the
Guarantors will contribute $100,000 to fund a portion of the
Payment Reserve. The New Equity Contributions by Newco constitute
additional consideration for the Guarantors Injunction because
Newco is not willing to fund the New Equity Contributions without
the Guarantors Injunction.
About GAC Storage & Makena Great American Anza Co.
GAC Storage Lansing LLC -- which owns and operates a warehouse and
storage facility with 522 storage units, generally located at 2556
Bernice Road, Lansing, Illinois -- filed for Chapter 11 bankruptcy
(Bankr. N.D. Ill. Case No. 11-40944) on Oct. 7, 2011. Jay S.
Geller, Esq., D. Sam Anderson, Esq., and Halliday Moncure, Esq.,
at Bernstein, Shur, Sawyer & Nelson, P.A., represents the Debtor
as counsel. Robert M, Fishman, Esq., and Gordon E. Gouveia, Esq.,
at Shaw Gussis Fishman Glantz Wolfson, & Towbin LLC, in Chicago,
represents the Debtor as local counsel. It estimated $1 million
to $10 million in assets and debts. The petition was signed by
Noam Schwartz, secretary and treasurer of EBM Mgmt Servs, Inc.,
manager of GAC Storage, LLC.
The Makena Great American Anza Company LLC --
http://www.makenacapital.net/-- a commercial shopping center
developers in Southern California, filed a Chapter 11 petition
(Bankr. N.D. Ill. Case No. 11-48549) on Dec. 1, 2011, in Chicago.
Anza leads the way in the acquisition and development of
"A-Location" small commercial shopping centers and corner
properties in Southern California. Lawyers at Shaw Gussis Fishman
Glantz Wolfson & Towbin, LLC, in Chicago, and Bernstein, Shur,
Sawyer & Nelson, P.A., in Portland, Maine, serve as counsel to the
Debtor. Makena disclosed $13,938,161 in assets and $17,723,488 in
liabilities.
Other affiliates that sought bankruptcy protection are GAC Storage
Copley Place LLC, GAC Storage El Monte LLC, and San Tan Plaza LLC.
The cases are being jointly administered under lead case no.
11-40944.
At the behest of lender Bank of America, N.A., the Bankruptcy
Court dismissed the Chapter 11 case of San Tan Plaza, as reported
by the Troubled Company Reporter on July 17, 2012.
GAC STORAGE: Sept. 7 Confirmation Hearing on Makena's Plan
----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
according to The Makena Great American Anza Company, LLC's case
docket, will convene a hearing on Sept. 7, 2012, at 9 a.m., to
consider the confirmation of Makena Great's Chapter 11 Plan.
Objections if any, are due Aug. 20, 2012.
Ballots accepting or rejecting the Plan are due Aug. 20.
According to Makena Great's Amended Plan of Reorganization, the
Plan provides for the reorganization of the Debtor's business and
the resolution of all outstanding Claims against and Interests in
the Debtor. The Plan also contemplates the issuance of new equity
interests in the Reorganized Debtor to a newly-formed entity owned
entirely by Ronnie Schwartz in exchange for substantial new equity
contributions to fund (i) $50,000 of the Payment Reserve, (ii)
$275,000 of the Construction Litigation Fund, and (iii) payment of
any Allowed Administrative Claims, Allowed Priority Tax Claims,
Allowed Non-Tax Priority Claims, and any Allowed Other Secured
Claims, if the Reorganized Debtor's available Cash or business
operations are insufficient to fund the payments.
The Debtor believes that the New Equity Contributions constitute
fair consideration for the Reorganized Debtor's equity interests.
Neither Makena LLC, nor GAC Storage, LLC, nor any of their
members, nor any of the Guarantors of the Bank Claim will have any
ownership interest in the Reorganized Debtor or Newco.
Furthermore, none of the foregoing entities or individuals will
have any involvement in, or receive any compensation from, the
Reorganized Debtor or Newco.
The Plan also provides for an injunction against the commencement
or continuation of any action, the employment of process, or any
act to collect, recover or offset any Claim of any Holder against
the Guarantors under the Bank Loan Documents or otherwise, so long
as the Reorganized Debtor is performing its obligations under the
Plan and no Default has occurred.
In consideration for the Guarantor Injunction, the Guarantors will
fund $275,000 of the Construction Litigation Fund. The New Equity
Contributions by Newco constitute additional consideration for the
Guarantors Injunction because Newco is not willing to fund the New
Equity Contributions without the Guarantors Injunction.
The Plan provides that any portion of the Construction Litigation
Fund that is not used to pay for attorneys' fees and expenses
incurred in connection with the Construction Lawsuit, once
completed, will be retained by the Reorganized Debtor as working
capital.
About GAC Storage & Makena Great American Anza Co.
GAC Storage Lansing LLC -- which owns and operates a warehouse and
storage facility with 522 storage units, generally located at 2556
Bernice Road, Lansing, Illinois -- filed for Chapter 11 bankruptcy
(Bankr. N.D. Ill. Case No. 11-40944) on Oct. 7, 2011. Jay S.
Geller, Esq., D. Sam Anderson, Esq., and Halliday Moncure, Esq.,
at Bernstein, Shur, Sawyer & Nelson, P.A., represents the Debtor
as counsel. Robert M, Fishman, Esq., and Gordon E. Gouveia, Esq.,
at Shaw Gussis Fishman Glantz Wolfson, & Towbin LLC, in Chicago,
represents the Debtor as local counsel. It estimated $1 million
to $10 million in assets and debts. The petition was signed by
Noam Schwartz, secretary and treasurer of EBM Mgmt Servs, Inc.,
manager of GAC Storage, LLC.
The Makena Great American Anza Company LLC --
http://www.makenacapital.net/-- a commercial shopping center
developers in Southern California, filed a Chapter 11 petition
(Bankr. N.D. Ill. Case No. 11-48549) on Dec. 1, 2011, in Chicago.
Anza leads the way in the acquisition and development of
"A-Location" small commercial shopping centers and corner
properties in Southern California. Lawyers at Shaw Gussis Fishman
Glantz Wolfson & Towbin, LLC, in Chicago, and Bernstein, Shur,
Sawyer & Nelson, P.A., in Portland, Maine, serve as counsel to the
Debtor. Makena disclosed $13,938,161 in assets and $17,723,488 in
liabilities.
Other affiliates that sought bankruptcy protection are GAC Storage
Copley Place LLC, GAC Storage El Monte LLC, and San Tan Plaza LLC.
The cases are being jointly administered under lead case no.
11-40944.
At the behest of lender Bank of America, N.A., the Bankruptcy
Court dismissed the Chapter 11 case of San Tan Plaza, as reported
by the Troubled Company Reporter on July 17, 2012.
GAC STORAGE: Wells Fargo Opposes Plan Exclusivity Extension
-----------------------------------------------------------
Wells Fargo Bank, N.A., successor-by-merger to Wachovia Bank,
N.A., asks the U.S. Bankruptcy Court for the Northern District of
Illinois to deny the request to extend the exclusive solicitation
periods of GAC Storage El Monte, LLC, and The Makena Great
American Anza Company, LLC.
As reported in the Troubled Company Reporter on July 25, 2012, El
Monte and Anza, as well as a third debtor, GAC Storage Copley
Place LLC, have sought an extension of the exclusive periods
within which to obtain acceptances of their Chapter 11 plans of
reorganization through and including the confirmation hearing
dates on the Plans.
Copley filed a Chapter 11 plan and related disclosure statement on
March 30, 2012. Debtors El Monte and Anza filed their Plans on
May 1.
According to Wells Fargo, the motion does not present the full
story. The Debtors' reasons for requesting the second extension
are inaccurate and otherwise do not demonstrate "cause", says the
bank.
Wells Fargo notes that the Chapter 11 cases have been pending for
seven to nine months. The deadlines they are seeking to extend
were extensions of the Debtors' original exclusive periods for
soliciting acceptances of their plans, which terminated on
April 4, 2012 for El Monte and May 29, 2012 for Anza. The
original extensions were the product of extensive negotiations
between the Debtors and the Lender which included agreements for
the Debtors' continued use of cash collateral. The solicitation
process in each case has been delayed by the Debtors' own failure
to file adequate disclosure statements -- something that was not
influenced by the Court's calendar.
About GAC Storage & Makena Great American Anza Co.
GAC Storage Lansing LLC -- which owns and operates a warehouse and
storage facility with 522 storage units, generally located at 2556
Bernice Road, Lansing, Illinois -- filed for Chapter 11 bankruptcy
(Bankr. N.D. Ill. Case No. 11-40944) on Oct. 7, 2011. Jay S.
Geller, Esq., D. Sam Anderson, Esq., and Halliday Moncure, Esq.,
at Bernstein, Shur, Sawyer & Nelson, P.A., represents the Debtor
as counsel. Robert M, Fishman, Esq., and Gordon E. Gouveia, Esq.,
at Shaw Gussis Fishman Glantz Wolfson, & Towbin LLC, in Chicago,
represents the Debtor as local counsel. It estimated $1 million
to $10 million in assets and debts. The petition was signed by
Noam Schwartz, secretary and treasurer of EBM Mgmt Servs, Inc.,
manager of GAC Storage, LLC.
The Makena Great American Anza Company LLC --
http://www.makenacapital.net/-- a commercial shopping center
developers in Southern California, filed a Chapter 11 petition
(Bankr. N.D. Ill. Case No. 11-48549) on Dec. 1, 2011, in Chicago.
Anza leads the way in the acquisition and development of
"A-Location" small commercial shopping centers and corner
properties in Southern California. Lawyers at Shaw Gussis Fishman
Glantz Wolfson & Towbin, LLC, in Chicago, and Bernstein, Shur,
Sawyer & Nelson, P.A., in Portland, Maine, serve as counsel to the
Debtor. Makena disclosed $13,938,161 in assets and $17,723,488 in
liabilities.
Other affiliates that sought bankruptcy protection are GAC Storage
Copley Place LLC, GAC Storage El Monte LLC, and San Tan Plaza LLC.
The cases are being jointly administered under lead case no.
11-40944.
At the behest of lender Bank of America, N.A., the Bankruptcy
Court dismissed the Chapter 11 case of San Tan Plaza, as reported
by the Troubled Company Reporter on July 17, 2012.
GARY STANCIL: Court Declines to Dismiss Suit v Bradley Investments
------------------------------------------------------------------
Bankruptcy Judge S. Martin Teel, Jr., denied the request of Greg
S. Friedman and Susan H. Friedman for dismissal of the adversary
proceeding, Gary Stancil, Plaintiff, v. Bradley Investments, LLC,
et al., Defendants, Adv. Proc. No. 12-10006 (Bankr. D.D.C.). The
lawsuit seeks to invalidate a foreclosure sale wherein 12th Street
Real Estate, LLC, acquired real property that is owned 50-50 by
Mr. Stancil and his mother. The Court earlier rejected a motion
to dismiss filed by 12th Street Real Estate. A copy of the
Court's July 24, 2012 Memorandum Decision and Order is available
at http://is.gd/oPd3Xsfrom Leagle.com.
Gary Stancil filed for Chapter 11 bankruptcy (Bankr. D.D.C. Case
No. 11-00747) on Oct. 6, 2011.
GATEWAY CASINOS: S&P Affirms 'BB-' CCR Over Add'l. C$50-Mil. Loan
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings, including
the 'BB-' long-term corporate credit rating, on Gateway Casinos &
Entertainment Ltd., as the company proposes a C$50 million
addition to its term loan A to fund a C$75 million distribution to
shareholders. At the same time, Standard & Poor's raised its
recovery rating on the company's second-lien notes to '3' from
'4', reflecting our expectation of meaningful (50%-70%) recovery
in a default scenario. The outlook is stable.
"The ratings reflect what we view as the company's fair business
risk profile, characterized by a strong share of the concentrated
gaming market in British Columbia," said Standard & Poor's credit
analyst Donald Marleau. "Steady growth and a supportive regulatory
regime in British Columbia (B.C.) have translated into industry-
leading margins for the company. That said, Gateway's business
risk profile is constrained by its limited diversity, with cash
flows heavily concentrated in a few key assets in B.C. We view the
company's financial risk profile as aggressive, with high debt
leverage offset by solid free cash flow and strong liquidity. The
C$75 million debt-funded one-time capital distribution in the wake
of its postponed IPO is consistent with Gateway's historical
capital structure, returning pro forma debt to last 12 months
EBITDA to about 5.5x. We maintain that we could lower the rating
if leverage increased beyond 6.0x."
"Gateway is majority-owned by Toronto-based Catalyst Capital Group
Inc. (not rated), with Tennenbaum Capital Partners LLC (not rated)
holding a significant minority stake, and others investors holding
the remainder. Gateway operates three casinos in the Vancouver
region, four in the Okanagan Valley, and two in Edmonton, Alta.,
as well as three recently acquired community gaming centers and a
bingo license in B.C."
"The stable outlook on Gateway stems from our expectation that the
company's robust discretionary cash flow supports aggressive
amortization and debt reduction in the next several years. We
could raise the rating if Gateway lowers its debt to EBITDA to
about 4x and improves funds from operations to debt to about 20%.
An upward rating action would also likely be predicated on the
continuing regulatory and economic stability in Gateway's core
markets in western Canada that support its fair business risk
profile and contribute to steady margins and cash flow generation.
On the other hand, operating difficulties or intense competition
could negatively affect profitability and potentially lead to
higher leverage, though we believe this is less likely in view of
steady free cash flow. Nevertheless, fully adjusted leverage of
more than 6x because of weaker operating performance or debt-
funded shareholder returns could compel a downgrade," S&P said.
Gateway does not release its financial statements to the public.
GLOBAL GREEN: Posts C$224,600 Net Loss in First Quarter
-------------------------------------------------------
Global Green Matrix Corporation reported a net loss of C$224,607
on C$118,570 of revenues for the three months ended March 31,
2012, compared with a net loss of C$67,635 on no revenue for the
same period a year ago.
The Company's balance sheet at March 31, 2012, showed
C$3.98 million in total assets, C$1.12 million in total
liabilities, and total equity of C$2.86 million.
As reported in the TCR on July 5, 2012, K.R. Margetson Ltd., in
Vancouver, Canada, expressed substantial doubt about Global
Green's ability to continue as a going concern, following the
Company's results for the fiscal year ended Dec. 31, 2011. The
independent auditors noted that the Company has suffered recurring
losses from operations and has a net working capital deficiency.
A copy of the Company's Condensed Interim Consolidated Financial
Statements for the three months ended March 31, 2012, is available
for free at http://is.gd/RQpTLy
Headquartered in Gabriola, British Columbia, Canada, Global Green
Matrix Corp., formerly Poly-Pacific International Inc., was
incorporated under the Alberta Business Corporations Act on Oct.
25, 1995. The Company is pursuing business in eco-friendly
solutions to industrial waste by-products. Global Green explores
and pursues environmentally sound methods and technologies in
waste management and the energy sector.
GRANITE BROADCASTING: S&P Assigns 'B' Corporate Credit Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned New York City-based TV
broadcaster Granite Broadcasting Corp. its 'B' corporate credit
rating. The outlook is stable.
"At the same time, we assigned our 'B' issue-level ratings to the
company's $215 million senior secured term loan B due 2018 with a
recovery rating of '3', indicating our expectation of meaningful
(50% to 70%) recovery for first-lien lenders in the event of a
payment default. The company also issued $45.6 million of second-
lien debt (unrated) and $22 million of equity, both of which are
held by its sponsor, Silver Point Capital. The company used the
proceeds of these issues to repay its existing debt, accrued
interest, and transaction fees and expenses," S&P said.
"The stable rating outlook reflects our expectation that the
company will maintain well in excess of a 10% EBITDA cushion of
covenant compliance," said Standard & Poor's credit analyst Daniel
Haines, "and adequate liquidity over at least the next 12 to 18
months as a result of EBITDA growth and modest debt repayment."
"Our 'B' corporate credit rating reflects our view that the
company has a 'weak' business risk profile and a 'highly
leveraged' financial risk profile, based on our criteria. The
company's portfolio of low-ranked independent TV stations in its
large markets and major network affiliated stations in several
small TV markets, along with its relatively low EBITDA margin
compared with peers', support our assessment of the business risk
profile as weak. We regard Granite's financial risk profile as
highly leveraged because of its very high debt leverage, at 7.7x
as of June 30, 2012," S&P said.
"The stable rating outlook reflects our expectation that Granite's
operating performance will improve significantly in 2012,
benefiting from political ad revenue and sharply higher
retransmission fees. In addition, we expect Granite to maintain an
appropriate cushion of covenant compliance of 15% or more and
adequate liquidity over at least the next 12 to 18 months as a
result of EBITDA growth and modest debt repayment," S&P said.
"We could lower our rating if operating performance is below our
expectations because of lower net retransmission fee revenue or
weaker political ad spending, or if a faltering economy weakens
core ad revenue, causing EBITDA coverage of total interest to fall
below 1.3x with no expectation of a turnaround. For example, a
downgrade could occur if EBITDA falls by 20% or more in 2013 from
our EBITDA expectation for 2012, compared with our expectation of
a mid-teen percentage EBITDA decline in 2013. We could also lower
our rating if we become convinced that covenant headroom will
contract to 10% or less because of EBITDA declines in a
nonelection year, increasing the risk of a covenant violation. An
upgrade, which we view as unlikely over the intermediate term,
would entail meaningful de-leveraging as a result of EBITDA growth
and debt repayment," S&P said.
HAWKER BEECHRAFT: IAMAW, U.S. Trustee Balks at Exec. Bonus Plan
---------------------------------------------------------------
Daniel McCoy at Wichita Business Journal reports the International
Association of Machinists and Aerospace Workers has filed an
official opposition to Hawker Beechcraft Corp.'s proposed bonus
plan for a group of its top executives.
The U.S. Trustee, according to BankruptcyData.com, is also
objecting to the key employee incentive plan and key employee
retention plan.
Hawker is seeking Court permission to pay up to $5.3 million to
eight executives based on their performance in helping it emerge
from bankruptcy or complete a sale of the company. According to
the Wichita Business Journal, although the awards are tied to
incentives, the union says the plan fails to specify any true
"incentive thresholds" as required by U.S. Bankruptcy Code.
The U.S. Trustee asserts, "The Debtors seek to pay in excess of $5
million of bonuses to eight insiders. The Debtors, however, fail
to establish that the metrics to be met before any bonuses may be
paid represent 'challenging results.' In the absence of
demonstrating that the metrics are challenging, the Bonuses to
these eight insiders appear to be disguised retention awards."
"The attempt to implement such a lucrative bonus program for the
very executives who led Hawker Beechcraft into bankruptcy is
particularly outrageous after thousands of Hawker employees have
already lost their jobs and thousands more could lose jobs and
pension benefits," the report quotes Machinists Aerospace
Coordinator Ron Eldridge as saying. "These executives, who
already have a fiduciary duty to maximize Hawker Beechcraft's
value, should not need any additional incentive to complete their
most basic responsibilities."
However, in its motion proposing the bonus plan, Hawker said the
proposal had been designed in conjunction with, and ultimately
approved by, its unsecured creditors committee. The Machinists
are part of that committee, the report says.
KEIP Motion
The Debtors filed a motion asking the Bankruptcy Court to:
a) approve and authorize the Debtors' proposed key employee
incentive plan and Key Employee Retention Plan; and
b) authorize the Debtors to make payments to certain management
employees under the KEIP and certain non-insider employees
under the KERP.
The Debtors related that they filed the chapter 11 cases to
implement a consensual debt-to-equity recapitalization transaction
that has been agreed to by holders of a majority of the Debtors'
prepetition secured debt and prepetition senior bond debt.
In this connection, a related restructuring support agreement
provided that the Debtors and their advisors would engage in a
marketing process to determine whether a third-party sale or plan
sponsorship transaction might be more attractive than the
Standalone Transaction.
The Debtors' senior management team will play an indispensable
role in the performance of the business over the next few months,
which will drive the overall outcome of the Standalone Transaction
or the Third-Party Transaction.
The Debtors developed the KEIP to achieve one primary goal: to
motivate the members of the Debtors' management and align their
incentives with those of the Debtors' stakeholders. Accordingly,
the KEIP is focused on incentivizing those key employees who
possess significant knowledge of the industry and the Debtors'
businesses and who drive the high-level operations that dictate
the Debtors' financial performance.
In addition, in order for a member of the SLT to receive a KEIP
award payment, (a) the SLT member must waive all prepetition
unsecured claims, including prepetition unsecured claims for
severance, bonus or incentive awards, and any right to payment
upon a change of control triggered by the Standalone Transaction
or Third-Party Transaction, whether arising under such member's
prepetition employment agreement, the Debtors' organizational
documents, or other agreements and (b) the economic distributions
to creditors, whether in the form of cash, equity in the
reorganized Debtors, or other form of consideration, in the
Standalone Transaction or Third-Party Transaction must be
consistent with the distribution formula set forth in the RSA.
For the avoidance of doubt, the SLT is not waiving any claims for
indemnification, contribution, reimbursement, or any right to
payment under the Debtors' director and officer insurance policies
and the Debtors' organizational documents.
A copy of the terms of the KEIP is available for free at
http://bankrupt.com/misc/HAWKERBEECHCRAFT_KEIP.pdf
A court hearing on the matter was scheduled for July 26, 2012.
About Hawker Beechcraft
Hawker Beechcraft Inc., a designer and manufacturer of light and
medium-sized jet, turboprop and piston aircraft, filed for
Chapter 11 reorganization together with 17 affiliates (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.
The Senior Secured Lenders' legal representative is Wachtell
Lipton Rosen & Katz and their financial advisor is Houlihan
Lokey.
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. The Committee tapped
FTI Consulting, Inc., as its financial advisor.
Hawker Beechcraft has entered into exclusive negotiations with
Superior Aviation Beijing Co., Ltd. regarding a $1.79 billion
strategic combination. As part of the exclusivity agreement,
Superior will provide $50 million to sustain Hawker Beechcraft's
jet business.
Any definitive agreement reached with Superior would be subject to
approval by the Committee on Foreign Investment in the United
States and other regulatory agencies. In addition, any definitive
agreement with Superior will be subject to termination if another
potential purchaser succeeds in the mandatory competitive auction
process which will be overseen by the U.S. Bankruptcy Court.
If negotiations with Superior are not concluded in a timely
manner, Hawker Beechcraft will proceed with seeking confirmation
of the Joint Plan of Reorganization it filed with the U.S.
Bankruptcy Court on June 30, 2012, which contemplates Hawker
Beechcraft emerging as a standalone entity with a more focused
portfolio of aircraft. Under the Standalone Plan, the company
would wind down the company's jet-related businesses, a process
that likely would have commenced already but for Superior's
compelling proposal to the company.
Superior's legal representative is Locke Lord LLP and its
financial advisor is Grant Thornton.
INTERNATIONAL HOME: Seeks to Amend Schedules and Statements
-----------------------------------------------------------
International Home Products, Inc., and Health Distillers
International, Inc., ask the U.S. Bankruptcy Court for the
District of Puerto Rico for authorization to amend the schedules
of assets and liabilities and the statements of financial affairs.
On the May 29, 2012 meeting of creditors, the U.S. Trustee
requested that the schedules and statements be amended.
About International Home Products
International Home Products, Inc., is engaged in the sale,
financing of "Lifetime" cookware and other kitchenware as well as
sale of account receivables in the secondary market. It is the
exclusive distributor of "Lifetime" products in Puerto Rico for
over 40 years. The Company filed for Chapter 11 bankruptcy
protection (Bankr. D. P.R. Case No. 12-02997) on April 19,
2012. Carmen D. Conde Torres, Esq., in San Juan, P.R.,
serves as the Debtor's counsel. Wigberto Lugo Mendel, CPA,
serves as its accountants. The Debtor disclosed $66,155,798 and
$43,350,031 in liabilities as of the Chapter 11 filing.
Secured lender First-Bank Puerto Rico is represented by Manuel
Fernandez-Bared, Esq., and Jane Patricia Van Kirk, Esq., at Toro,
Colon, Mullet, Rivera & Sifre, P.S.C.
KIWIBOX.COM INC: Releases New iphone and ipad Application
---------------------------------------------------------
The Kiwibox network proudly announced the release of its latest
iPhone and iPad application, complete with new updates. The
network is also proud to announce German social network KWICK! has
been named one of Germany's top five mobile dating applications.
Specifically, the latest version of the iPhone and iPad
application features support multilingual users (expanding from
the current support for both English and German language offered),
push notification messaging via the application and ipad support
including the application's new blog feature. Multilingual
support will allow users from across the globe to interact with
one another in their language of choice, and when combining this
with other new added features to the mobile app, users will be
able to continue the fullness of the browser based Kiwibox on
their mobile phone.
KWICK!'s ascension to a stop five status in the mobile dating
category should come as little surprise, as the social network's
application is amongst Germany's highest rated applications.
According to recent statistics, 122 million people globally log
into dating sites each month, with 15 million of those who log in
via mobile devices. Likewise, the total number of mobile dating
applications has tripled over the past several years.
Specifically, up to 15% of daily log ins on German mobile
applications are for the purpose of dating, with time spent on
these apps more than doubling year over year. Maintaining a top
five position in this market further shows how KWICK! has
supplanted itself as one of Germany's top social networks overall.
Following the trend of mobile usage, kiwibox.com announced 25%
growth in user activity and an 80% rise in user registrations over
the past three months. Additionally, viewership on Kiwibo's
KiwiLIVE has grown 32% week over week with the inclusion of live
feeds during Kiwibox parties at premiere New York nightlife
venues.
About Kiwibox.com
New York-based Kiwibox.com, Inc., acquired in the beginning of
2011 Pixunity.de, a photoblog community and launched a U.S.
version of this community in the summer of 2011. Effective July
1, 2011, Kiwibox.com, Inc., became the owner of Kwick! --a top
social network community based in Germany. Kiwibox.com shares are
freely traded on the bulletin board under the symbol KIWB.OB.
In its report on the 2011 financial statements, Rosenberg Rich
Baker Berman & Company, in Somerset, New Jersey, expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
has suffered losses from operations and has a working capital
deficiency as of Dec. 31, 2011.
The Company reported a net loss of $5.90 million in 2011, compared
with a net loss of $3.97 million in 2010.
The Company's balance sheet at March 31, 2012, showed $8.27
million in total assets, $16.92 million in total liabilities, all
current, and a $8.64 million total stockholders' impairment.
KV PHARMACEUTICAL: Receives Non-Compliance Notice from NYSE
-----------------------------------------------------------
K-V Pharmaceutical Company was notified by the New York Stock
Exchange Regulation, Inc., that it is below listing standard
criteria due to the Company's average market capitalization being
less than $50 million over a 30-day trading period and its
stockholder's equity being less than $50 million. Per NYSE
regulations, K-V intends to submit a plan to the NYSE within 45
days of receipt of the notification to demonstrate its ability to
achieve compliance with these continued listing standards within
18 months of receipt of the notice.
In addition, the Company was notified by the NYSE that its Class B
common shares are below criteria for the average closing price of
a security of less than $1.00 over a consecutive 30-day trading
period. The Company will have a six-month period from the date of
the NYSE notification to cure the deficiency related to its Class
B common shares. Per NYSE procedures, K-V intends to notify the
NYSE within 10 business days from the receipt of the NYSE
notification of its intent to cure the deficiency related to its
Class B common shares within the six-month cure period.
As previously announced on June 29, 2012, the Company's Class A
common shares are below criteria for the average closing price of
a security of less than $1.00 over a consecutive 30 day trading
period. The Company informed the NYSE of its intent to cure this
deficiency within the six-month cure period on July 10, 2012.
About KV Pharmaceutical Company
KV Pharmaceutical Company (NYSE: KVa/KVb) --
http://www.kvpharmaceutical.com/-- is a fully integrated
specialty pharmaceutical company that develops, manufactures,
markets, and acquires technology-distinguished branded and
generic/non-branded prescription pharmaceutical products. The
Company markets its technology distinguished products through
ETHEX Corporation, a subsidiary that competes with branded
products, and Ther-Rx Corporation, the company's branded drug
subsidiary.
The Company reported a net loss of $102.30 million for
the year ended March 31, 2012, a net loss of $271.70 million for
the year ended March 31, 2011, and a net loss of $283.60 million
for the year ended March 31, 2010.
The Company's balance sheet at March 31, 2012, showed
$253.40 million in total assets, $734.10 million in total
liabilities and a $480.70 million total shareholders' deficit.
BDO USA, LLP, in Chicago, Illinois, issued a "going concern"
qualification on the consolidated financial statements for the
fiscal year ended March 31, 2012. The independent auditors noted
that the Company among other things has experienced recurring
losses from operations, has a significant shareholders' deficit,
and negative working capital. These factors raise substantial
doubt about the Company's ability to continue as a going concern.
LODGENET INTERACTIVE: Incurs $101.6 Million Net Loss in Q2
----------------------------------------------------------
LodgeNet Interactive Corporation reported a net loss of $101.66
million on $92.78 million of total revenues for the three months
ended June 30, 2012, compared with a net loss of $2.92 million on
$106.63 million of total revenues for the same period during the
prior year.
The Company reported a net loss of $103.75 million on
$187.48 million of total revenues for the six months ended June
30, 2012, compared with a net loss of $3.83 million on $214.36
million of total revenues for the same period a year ago.
The Company's balance sheet at June 30, 2012, showed $283.34
million in total assets, $439.32 million in total liabilities and
a $155.98 million total stockholders' deficiency.
"Results in the quarter primarily reflect a $94 million non-cash
charge for the impairment of Goodwill and Purchased Intangibles,"
said LodgeNet Senior Vice President and CFO Frank P. Elsenbast.
"The charge relates primarily to the Goodwill and Purchase
Intangibles created in 2007 at the time of the On Command
acquisition. While these charges had a significant impact on our
Net Income for the quarter, it is important to note that these
were non-cash charges and in no way impact our ability to operate
our business on a going-forward basis. We continue to prudently
manage our operations and delivered a 8% reduction in cash
Operating Expenses in the quarter. We generated Free Cash Flow of
nearly $18 million in the quarter after funding $11 million
dollars of capital investment as we installed 15,000 HD rooms. In
addition, we reduced our outstanding debt by $19 million to $329
million."
A copy of the press release is available for free at:
http://is.gd/lLnJmF
About LodgeNet Interactive
Sioux Falls, South Dakota-based LodgeNet Interactive Corporation
(Nasdaq:LNET), formerly LodgeNet Entertainment Corp. --
http://www.lodgenet.com/-- provides media and connectivity
solutions designed to meet the unique needs of hospitality,
healthcare and other guest-based businesses. LodgeNet Interactive
serves more than 1.9 million hotel rooms worldwide in addition to
healthcare facilities throughout the United States. The Company's
services include: Interactive Television Solutions, Broadband
Internet Solutions, Content Solutions, Professional Solutions and
Advertising Media Solutions. LodgeNet Interactive Corporation
owns and operates businesses under the industry leading brands:
LodgeNet, LodgeNetRX, and The Hotel Networks.
The Company reported a net loss of $631,000 in 2011, a net loss of
$11.68 million in 2010, and a net loss of $10.15 million in 2009.
* * *
Lodgenet carries a 'B3' long term corporate family rating and a
'Caa1' probability of default rating, with 'stable' outlook, from
Moody's. It has 'B' long term foreign and local issuer credit
ratings, with 'stable' outlook, from Standard & Poor's.
"In Moody's opinion, continued cautious investment from LodgeNet's
hotel customers will hamper intermediate term growth in its core
hospitality services business, and over the long term competing
forms of entertainment will pressure this revenue stream as the
company seeks to defend its relevance to both hotel operators and
hotel guests. The B3 corporate family rating incorporates these
weak growth prospects, mitigated somewhat by the company's
moderately high financial risk profile and demonstrated capacity
to generate positive free cash flow throughout challenging
economic conditions, along with a measure of stability from the
monthly fees it receives from hotels regardless of occupancy,"
Moody's said in October 2010.
LUPER ENTERPRISES: Bankruptcy Filing Blocks Bank Foreclosure
------------------------------------------------------------
Michael Braga at Herald-Tribune reports that Luper Enterprises
Inc., managed by Gayle Luper, filed for Chapter 11 bankruptcy
protection to keep Fifth Third Bank from seizing its Bungalow
Beach Resort on Bradenton Beach.
According to the report, Fifth Third won a $4.5 million
foreclosure judgment against Ms. Luper's company in April and a
foreclosure sale had been set for July 10. Two days prior to that
date, Ms. Luper submitted the bankruptcy filing.
The report says the Company's bankruptcy filing lists $1.45
million in assets and $7.328 million in debts. It also states
that Bungalow Beach generated income of $736,667 in 2010; $836,787
in 2011 and $514,839 so far in 2012. The company's largest
creditors are:
Fifth Third Bank $4.185 million
Iberia Bank $2.297 million
Ron Shenkin $800,000
David Altier $27,556
Bank of America $7,604
Based in Bradenton Beach, Florida, Luper Enterprises, Inc., dba
Bungalow Beach Resort filed for Chapter 11 protection (Bankr. M.D.
Fla. Case No. 12-10465) on July 8, 2012. R. John Cole, II, Esq.,
at R. John Cole, II, PA, represents the Debtor. The Debtor
disclosed assets of $1,451,689, and liabilities of $7,328,011.
KLEEN ENERGY: Fitch Cuts Rating on $435-Mil. Term Loan A to 'BB'
----------------------------------------------------------------
Fitch Ratings has downgraded to 'BB' from 'BBB-' the rating of
Kleen Energy Systems, LLC's $435 million ($362.5 million
outstanding) term loan A due 2018 and $295 million ($286 million
outstanding) term loan B due 2024 (the term loans). The rating
action reflects a sharp upward shift in Kleen's cost structure and
unexpected shortfalls in contractual revenues. The Rating Outlook
has been revised to Negative from Stable.
KEY RATING DRIVERS
-- Fixed Price Agreements: Kleen's revenues are initially
derived from fixed-price tolling and capacity agreements with
investment-grade counterparties, partially mitigating price
risks through 2017. Once the tolling agreement expires, a
scheduled step-down in debt service should moderate Kleen's
energy price exposure during the merchant period. Capacity
payments should provide additional revenue support over the
long term.
-- Lack Of Operational History: Kleen has not yet established a
stable cost profile or demonstrated a pattern of consistent
operating performance. Fitch anticipates that actual costs
will exceed original projections by a wide margin,
heightening the potential impact of operational
underperformance going forward. Kleen must meet target
availability and heat rate requirements to avoid contractual
penalties and maximize revenues. Favorably, Kleen benefits
from commercially proven, reliable technology operated and
maintained by experienced O&M providers.
-- Weakened Financial Profile: Fitch-projected debt service
coverage ratios (DSCRs) range between 1.25x and 1.35x during
the tolling period under a revised Fitch rating case that
considers a combination of low availability, technical
underperformance, and further increases to a deteriorating
cost profile. The rating is not constrained by financial
performance during the merchant period, primarily due to
declining debt service relative to higher projected revenues.
-- Mitigated Refinancing Risk: Fitch believes it is likely that
Kleen will fully prepay the term loan A balloon payment prior
to maturity. The supplemental amortization mechanism relies
upon contractual cash flows during the tolling period, and
catch-up provisions provide some protection against temporary
interruptions in cash flow.
WHAT COULD TRIGGER A RATING ACTION
-- Cost Escalation: Additional increases in O&M costs would
further erode cash flow and heighten the project's
vulnerability to operating event risks.
-- Operating Performance Shortfall: Persistently low
availability or an accelerated degradation in heat rates
would reduce revenue and potentially subject the project to
contractual penalties.
-- Inability To Refinance: In the event that an outstanding
balance remains on the Term Loan A at maturity, market
conditions and/or project-specific factors could prevent
Kleen from refinancing.
SECURITY
The collateral includes a first-priority security interest in the
ownership interests in Kleen, all real and personal property,
including Kleen's rights under the project documents, the project
accounts, and all revenues.
CREDIT UPDATE
The rating downgrade reflects a sharp upward shift in Kleen's cost
structure and unexpected reduction in contractual revenues. Fitch
expects cash flow to fall short of original projections by an
estimated $20 million per year. The Negative Outlook is based
upon the heightened uncertainty surrounding Kleen's cost
structure, as it is unknown whether the current operating budget
fully captures the upward movement in costs or the deterioration
in the project's revenue profile.
Kleen is incurring a combination of unanticipated costs previously
excluded from the sponsor's original projections and an escalation
of other operating and financing costs. The Connecticut Gross
Receipts Tax, Regional Greenhouse Gas Initiative (RGGI)
allowances, and interconnection costs were not included in the
sponsor's original financial projections. Other costs, primarily
labor, insurance premiums, and letter of credit fees have risen
well above original projections.
Fitch's revised estimate of Kleen's revenues is driven by a
disagreement over capacity pricing and an expansion of locational
marginal price (LMP) differentials under the tolling agreement.
Connecticut Light & Power (CL&P; Fitch IDR of 'BBB+' with a Stable
Outlook) is disputing the forward capacity market price, and it is
uncertain whether the current dispute will be resolved in Kleen's
favor or similar disagreements will arise in the future. Kleen is
also receiving a lower than expected energy payment under the
tolling agreement due to an increase in the LMP differential
between Kleen's nodal price and the contractual Connecticut zonal
price.
Fitch expects that increased operating expenses, which exceed
original projections by approximately $13.5 million, will remain a
permanent part of Kleen's cost structure. Kleen may also incur
other unanticipated costs that were excluded from previous
projections or an escalation in newly identified variable costs,
such as RGGI compliance or taxes. Revenue reductions account for
the $6.5 million balance of the $20 million cash flow shortfall.
It is unclear whether future changes to the forward capacity
market or an expansion of the LMP differential will exacerbate the
loss of revenue.
Kleen's operating performance has thus far enabled the project to
meet debt service obligations, including target amortization
payments, despite increased costs and lower revenues. Kleen's
operational metrics are consistent with original projections.
Capacity factors have averaged 70% to 75%, and availability and
heat rates have met or exceeded contractual thresholds. There is
no evidence that the process of restoring the facility has
negatively affected Kleen's performance, though additional
operating history is required before consistent results can be
reliably established.
Kleen is a special-purpose company created to own and operate the
project, which consists of a 620-megawatt combined-cycle electric
generating facility located near Middletown, CT. Kleen sells
capacity under a 15-year agreement with CL&P. Constellation
Energy Commodities Group, Inc. (CCG) purchases the facility's
energy output under a seven-year tolling agreement. Exelon Corp.
(Fitch IDR of 'BBB+' with a Stable Outlook), CCG's parent, has
partially guaranteed CCG's contractual obligations.
LAGUARDIA ASSOCIATES: Meeting to Form Panel Set for Aug. 8
----------------------------------------------------------
Roberta A. DeAngelis, the United States Trustee for Region 3, will
hold an organizational meeting on Aug. 8, 2012, at 2:00 p.m. in
the bankruptcy cases of LaGuardia Associates, L.P. The meeting
will be held at:
Office of the United States Trustee
833 Chestnut Street, Suite 501
Philadelphia, PA 19107
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' cases.
The organizational meeting is not the meeting of creditors
pursuant to Section 341 of the Bankruptcy Code. A representative
of the Debtor, however, may attend the Organizational Meeting, and
provide background information regarding the bankruptcy cases.
To increase participation in the Chapter 11 proceeding, Section
1102 of the Bankruptcy Code requires that the United States
Trustee appoint a committee of unsecured creditors as soon as
practicable. The Committee ordinarily consists of the persons,
willing to serve, that hold the seven largest unsecured claims
against the debtor of the kinds represented on the committee.
Section 1103 of the Bankruptcy Code provides that the Committee
may consult with the debtor, investigate the debtor and its
business operations and participate in the formulation of a plan
of reorganization. The Committee may also perform other services
as are in the interests of the unsecured creditors whom it
represents.
About LaGuardia Associates
ECBM, Landmark Food Corp. and Penn Glass filed an involuntary
Chapter 11 petition (Bankr. E.D. Pa. Case No. 11-19334) against
King of Prussia, Pennsylvania-based LaGuardia Associates L.P. on
Dec. 6, 2011. LaGuardia Associates owns and operates the
LaGuardia Plaza Hotel, formerly known as LaGuardia Crowne Plaza
Hotel. The petitioning creditors alleged holding roughly $171,000
in debt. Judge Stephen Raslavich oversees the case, replacing
Judge Jean K. FitzSimon. The petitioning creditors are
represented by Ashely M. Chan, Esq., at Hangley Aronchick Segal &
Pudlin.
This is the second bankruptcy for LaGuardia Associates. The
company and its debtor-affiliate, Field Hotel Associates LP,
sought Chapter 11 protection (Bankr. E.D. Pa. Case No. 04-34514)
on Oct. 29, 2004. Martin J. Weis, Esq., at Dilworth Paxon LLP,
represented the Debtors as counsel in the 2004 case. Ashely M.
Chan, Esq., and Myron Alvin Bloom, Esq., at Hangley Aronchick
Segal & Pudlin, represented the Official Committee of Unsecured
Creditors. In its 2004 petition, LaGuardia Associates estimated
assets and debts of $10 million to $50 million.
In March 2007, the Bankruptcy Court confirmed the Third Amended
Chapter 11 Liquidation Plan filed by U.S. Bank NA, as successor in
interest to SunTrust Bank, for Field Hotel Associates.
LEE BRICK: Capital Bank Seeks to Block Use of Cash Collateral
-------------------------------------------------------------
Capital Bank, N.A., fka NAFH National Bank, successor by merger
with Capital Bank, a North Carolina banking corporation, by and
through its counsel, Paul A. Fanning -- paf@wardandsmith.com --
asks the U.S. Bankruptcy Court to prohibit Lee Brick & Tile
Company from using cash collateral.
Prepetition, the Debtor executed a promissory note in favor of the
Bank in the principal amount $20 million. The Debtor owes the
bank $13,395,490 as of June 15, 2012, plus interest at the rate of
$1,787 per day thereafter until paid in full. The note is past
due and in default.
As security for the note, the Debtor granted the Bank a first
priority Deed of Trust covering the property referred to as
37.69-acre portion of a larger 309.50-acre tract located on the
west side of US Highway 15/501, approximately 1.50 miles north of
its intersection with US Highway 1, Sanford, NC 27330.
The Bank said the Debtor continues to use the Collateral. The
Bank asserts the inventory and any rents collected constitute its
cash collateral within the meaning of 11 U.S.C. Sec. 363.
The Bank does not consent to the Debtor's use of any item of cash
collateral. Unless the Bank receives adequate protection of its
interests, the Court should enter an Order prohibiting the Debtor
or any other party from using the cash collateral other than to
deliver it to the Bank.
About Lee Brick & Tile
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, 2012. The Debtor
estimated assets and debts of $10 million to $50 million. Capital
Bank is owed $13.0 million, of which $6.5 million is secured.
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.
Judge Randy D. Doub presides over the case. Kevin L. Sink, Esq.,
at Nicholls & Crampton, P.A., serves as the Debtor's counsel. The
petition was signed by Don W. Perry, president.
LEE BRICK: Files Schedules of Assets and Liabilities
----------------------------------------------------
Lee Brick & Tile Company filed with the Bankruptcy Court for the
Eastern District of North Carolina its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $11,421,200
B. Personal Property $16,430,768
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $14,035,158
E. Creditors Holding
Unsecured Priority
Claims $32,308
F. Creditors Holding
Unsecured Non-priority
Claims $67,673
----------- -----------
TOTAL $27,851,968 $14,135,140
A full text copy of the schedules of assets and liabilities is
available free at:
http://bankrupt.com/misc/LEE_BRICK_sal.pdf
About Lee Brick
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, 2012. The Debtor
estimated assets and debts of $10 million to $50 million. Capital
Bank is owed $13.0 million, of which $6.5 million is secured.
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.
Judge Randy D. Doub presides over the case. Kevin L. Sink, Esq.,
at Nicholls & Crampton, P.A., serves as the Debtor's counsel. The
petition was signed by Don W. Perry, president.
LICHTIN/WADE: Court Okays Charles M. Ivey as Mediator
-----------------------------------------------------
The Hon. Randy D. Doub of the U.S. Bankruptcy Court for the
Eastern District of North Carolina entered a consented order
appointing Charles M. Ivey of Ivey, McClellan, Gatton & Talcott,
LLP, as mediator in the Chapter 11 case of Lichtin/Wade, LLC.
Mr. Ivey will be compensated at a rate of $300.00 per hour for any
time spent in connection with the mediation of this matter,
including any preparation for the mediation.
The Debtor and secured creditor ERGS II, L.L.C., consented to the
appointment of mediator.
As reported by the Troubled Company Reporter on June 12, 2012, the
Court directed the Debtor and ERGS to undergo a mediated
settlement conference. The Court determined that a global
mediation is in the best interest of the bankruptcy estate of the
Debtor; the secured creditor; the Bankruptcy Administrator; and
the unsecured creditors.
About Lichtin/Wade
Lichtin/Wade LLC filed for Chapter 11 bankruptcy (Bankr. E.D.N.C.
Case No. 12-00845) on Feb. 2, 2012. Lichtin/Wade, based in Wake
County, North Carolina, owns and operates an office park known as
the Offices at Wade, comprised of two Class A office buildings and
vacant land approved for additional office buildings. The
buildings are known as Wade I and Wade. Each building is over 90%
leased, with only three vacant spaces remaining between the two
buildings.
Judge Randy D. Doub presides over the case. Trawick H. Stubbs,
Jr., Esq., and Laurie B. Biggs, Esq., at Stubbs & Perdue, P.A.,
serve as the Debtor's counsel. A. Kent Pittman, CPA of Hughes,
Pittman & Gupton, LLP, serves as accountant.
In its schedules, the Debtor disclosed $47,053,923 in total assets
and $52,548,565 in total liabilities. The petition was signed by
Harold S. Lichtin, president of Lichtin Corporation, the Debtor's
manager.
LIFEPOINT HOSPITALS: S&P Rates New $750MM Sr. Secured Debt 'BB-'
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' corporate
credit and senior debt ratings, and 'B' subordinated debt ratings
on Brentwood, Tenn.-based LifePoint Hospitals Inc. "At the same
time, we assigned 'BB-' issue-level ratings (the same as the
corporate credit rating) and '3' recovery ratings to LifePoint's
proposed $450 million term loan A debt and $350 million revolver,
each due in 2017. The '3' recovery rating indicates our
expectation of meaningful (50%-70%) recovery for lenders in the
event of default," S&P said.
"The issue-level and recovery ratings on the senior secured debt
reflect the equal right of payment with the unsecured notes;
because the secured debt only has a pledge of subsidiaries' stock,
rather than assets, we treat the secured debt effectively as
unsecured," said Standard & Poor's credit analyst Michael Kaplan.
"The ratings on LifePoint Hospitals Inc. incorporate our
assessment that the rural hospital chain has a 'weak' business
risk profile, given its relatively limited size and market
exposure, and reimbursement risk. We view Lifepoint's financial
risk profile as 'significant,' reflecting a debt-to-EBITDA level
that ranges within its publicly stated 3x-4x target," S&P said.
"LifePoint's weak business risk profile reflects the particular
challenges LifePoint faces amid industry utilization pressures.
While 52 of its 55 hospitals are sole community providers, average
market shares are under 60%, given competition from tertiary care
facilities in other communities and outpatient centers. LifePoint
attempts to limit patient outmigration to facilities in other
communities by expanding the breadth of its services. However, the
limited supply of health care professionals in its largely
nonurban markets is a hurdle, especially in relatively profitable
specialties, such as oncology, cardiology, and orthopedics," S&P
said.
LSP ENERGY: Sale Approval Met With Objection by TPF Group
---------------------------------------------------------
Carla Main, substituting for Bloomberg News bankruptcy columnist
Bill Rochelle, reports that LSP Energy LP is faced with an
objection by a group known as TPF II, to its motion to approve the
sale of its assets, according to court papers.
According to the report, the bid would permit the payment of a
break-up fee of $7.5 million to stalking horse bidder South
Mississippi Electric Power Association, or SMEPA.
Three limited partnerships together known as TPF II have objected
to the approval of SMEPA's bid, Grant H. Davis, senior vice
president of Tenaska PFG II, LLP, the general partner of TPF II,
LP, one of limited partnerships, said in court papers.
The report relates that TPF II, which has conducted due diligence
and negotiations with the Debtor before and since the bankruptcy
filing, "was ready to submit a qualified bid" and intended to
participate in the July 18 auction under the rules established by
the court's bidding procedures order. That order, Mr. Davis said
in a filing, "prohibited bidders from receiving break-up fees or
other stalking horse benefits."
The Debtor has asked the Court for an amended sales procedures
order.
"The stalking horse bid did not induce TPF II to submit a bid,"
Mr. Davis said. TPF II "is willing to submit a higher and better
bid than SMEPA's current bid if all parties are treated equally,"
Davis said in the filing.
A hearing was scheduled July 26 on TPF's motion.
About LSP Energy
LSP Energy Limited Partnership, LSP Energy, Inc., LSP Batesville
Holding, LLC, and LSP Batesville Funding Corporation filed
separate Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case
No. 12-10460) on Feb. 10, 2012.
LSP owns and operates an electric generation facility located in
Batesville, Mississippi. The Facility consists of three gas-fired
combined cycle electric generators with a total generating
capacity of roughly 837 megawatts and is electrically
interconnected into the Entergy and Tennessee Valley Authority
transmission systems. LSP's principal assets are the Facility and
the 58-acre parcel of real property on which it is located, as
well as its rights under a tolling agreements.
LSP filed bankruptcy to complete an orderly sale of its assets or
the ownership interests of LSP Holding in LSP, LSP Energy and LSP
Funding for the benefit of all stakeholders. The remaining three
Debtors filed bankruptcy due to their relationship as affiliates
of LSP and their ultimate obligations on a significant portion of
LSP's secured bond debt. The Debtors also suffered losses due to
a mechanical failure of a combustion turbine at their facility and
resultant business interruption.
LSP Energy is the general partner of LSP. LSP Holding is the
limited partner of LSP and the 100% equity holder of LSP Energy
and LSP Funding. LSP Funding is a co-obligor on the Debtors' bond
debt, and each of LSP Energy and LSP Holding has pledged their
equity interests in LSP and LSP Funding as collateral for the bond
debt.
No statutorily authorized creditors' committee has yet been
appointed in the Debtors' cases by the United States Trustee.
Judge Mary F. Walrath oversees the case. Lawyers at Whiteford
Taylor & Preston LLC serve as the Debtors' counsel.
LUCID INC: To Issue 3.2-Mil. Common Shares Under Incentive Plans
----------------------------------------------------------------
Lucid, Inc., filed with the U.S. Securities and Exchange
Commission a Form S-8 registering 3.2 million shares of common
stock issuable under the Company's 2010 Long-Term Equity Incentive
Plan, 2007 Long-Term Incentive Plan and Year 2000 Stock Option
Plan. The proposed maximum aggregate offering price is $22.46
million. A copy of the prospectus is available for free at:
http://is.gd/j27lVr
About Lucid Inc.
Rochester, N.Y.-based Lucid, Inc., is a medical device company
that designs, manufactures and sells non-invasive cellular imaging
devices that assist physicians in the early detection of disease.
The Company's VivaScope(R) platform produces rapid noninvasive,
high-resolution cellular images for subsequent diagnostic review
by physicians, pathologists and other diagnostic readers.
The Company's balance sheet at March 31, 2012, showed
$2.82 million in total assets, $5.91 million in total liabilities,
and a stockholders' deficit of $3.09 million.
As reported in the TCR on April 9, 2012, Deloitte & Touche LLP, in
Rochester, New York, expressed substantial doubt about Lucid's
ability to continue as a going concern, following the Company's
results for the fiscal year ended Dec. 31, 2011. The independent
auditors noted that of the Company's recurring losses from
operations, deficit in equity, and projected need to raise
additional capital to fund operations.
M3 TECHNOLOGY: Loses Bid to Halt Servicing Of Infringing Software
-----------------------------------------------------------------
Jeremy Heallen at Bankruptcy Law360 reports that U.S. Bankruptcy
Judge David R. Jones on Wednesday ruled that although by M3
Technology Inc. infringed copyrights held by Aspen Technology
Inc., M3 must be allowed to continue servicing its petrochemical
clients to avoid a significant disruption to U.S. refining
operations.
M3 Technology Incorporated filed for Chapter 11 protection (Bankr.
S.D. Tex. Case No. 12-34444) on June 7, 2012. H Miles Cohn, Esq.,
at Sheiness, Scott, Grossman & Cohn, LLP, serves as the Debtor's
Counsel. Hon. David R. Jones presides over the case.
The Debtor estimated assets between $1 million to $10 million and
debts between $10 million to $50 million.
MACCO PROPERTIES: Disclosures for Full-Payment Plan Amended
-----------------------------------------------------------
The owner of Macco Properties Inc. filed early this month an
amended disclosure statement that provides updated details on how
the Chapter 11 plan will pay creditors in full. According to the
Second Amended Disclosure Statement filed July 2, 2012, the Debtor
expects to have a minimum of $6.5 million -- which can safely
satisfy the $2.5 million in claims necessary to consummate the
Plan.
The U.S. Trustee previously filed an objection to the May 11, 2012
version of the Disclosure Statement. It said that Jennifer Price,
the sole shareholder, should provide additional information so
that creditors can determine whether the Plan is beneficial or
feasible.
According to the Second Amended Disclosure Statement, the Debtor
expects to emerge from bankruptcy with a minimum available cash
cushion of $4 million with which to augment future operations.
It explains that under the Plan, unclassified claims, including
the professional fee claims, are expected not to exceed $700,000.
The Debtor estimates that liquidated, there will be non guaranty
secured claims totaling $1.75 million, plus $3,500 in Plan
interest, to be satisfied on the effective date.
At his most recently filed monthly operating report, the Chapter
11 trustee had cash-on-hand, on May 31, 2012 of $1.2 million.
Under the Plan, this amount, plus $300,000 from the June 29, 2012
sale of the property, and the value of the yet-to-be-liquidated
LLC membership interests, will inure the reorganized Debtor on the
Effective Date. The assets, plus the available funds under the $5
million line of credit, will result in a reorganization fund in
the minimum amount of $6.5 million.
The prior iteration of the Disclosure Statement projected that the
Debtor will exit bankruptcy with a minimum cash cushion of
$2.55 million. Funding required was estimated at $3.45 million,
including administrative claims estimated at $500,000, and
unsecured claims estimated at $727,000, with $2,540 Plan interest.
The prior iteration of the Disclosure Statement contemplated that
a class of secured claims -- held by FAA Credit union -- in the
aggregate amount of $2.087 million plus ad valorem taxes of
$135,000 would be satisfied on the Effective Date. The Second
Amended Disclosure Statement says that no longer dropped did not
include a class of secured claims and only identified FAA Credit
Union as holder of a Debtor's guaranty of note obligations, which
guaranties will be reaffirmed under the Plan.
Ms. Price believes 11 U.S.C. Sec. 1129(a)(7) is not applicable
because no claims are impaired under the Plan. However, in the
event that a class is ultimately deemed impaired, the "best
interest test" is satisfied because all classes entitled to
payment will receive payment in full with interests, which by,
definition is not less than the amount that would be received upon
claims under any Chapter 7 liquidation scenario. Claims not
receiving monetary payment under the Plan (e.g. preserved guaranty
and indemnification claims) will also retain as much, or more,
property (contingent execution rights) than they would receive
under any Chapter 7 liquidation scenario.
Under the Plan, Ms. Price will maintain ownership of the Debtor.
A copy of the Second Amended Disclosure Statement is available for
free at http://bankrupt.com/misc/MACCO_DS_070612.pdf
About Macco Properties
Oklahoma City, Oklahoma-based Macco Properties, Inc., is a
property management company that is the sole or controlling member
and/or manager of numerous multi-family residential rental units
in Oklahoma City, Oklahoma, Wichita, Kansas, and Dallas, Texas,
and several and commercial business properties in Oklahoma City,
Oklahoma, and Holbrook, Arizona.
The Company filed for Chapter 11 bankruptcy protection (Bankr.
W.D. Okla. Case No. 10-16682) on Nov. 2, 2010. The Debtor
disclosed $50,823,581 in total assets, and $4,323,034 in total
liabilities. Receivership Services Corp., a division of the
Martens Cos., serves as property manager for the six Wichita
apartment complexes caught up in the bankruptcy of Macco
Properties of Oklahoma City.
Michael E. Deeba, the Chapter 11 trustee, is represented by
Christopher T. Stein, of counsel to the firm of Bellingham & Loyd,
P.C. Grubb & Ellis/Martens Commercial Group LLC, to act as the
Chapter 11 Trustee's exclusive listing broker/realtor for
properties. The trustee wants to real estate holdings wants to
sell some of the property off, including a luxury high-rise
condominium in Dallas valued at more than $2.5 million and several
run-down apartment complexes in the metro area.
The Official Unsecured Creditors' Committee is represented by
Ruston C. Welch, at Welch Law Firm, P.C., in Oklahoma City,
Oklahoma.
MUSCLEPHARM CORP: Has Equity & Registration Rights Pact with TCA
----------------------------------------------------------------
MusclePharm Corporation finalized a committed equity facility with
TCA Global Credit Master Fund, LP, a Cayman Islands limited
partnership, whereby the parties entered into (i) a committed
equity facility agreement and (ii) a registration rights
agreement.
Pursuant to the terms of the Equity Agreement, for a period of 24
months commencing on the effective date of the Registration
Statement, TCA will commit to purchase up to $3,000,000 of the
Company's common stock, par value $0.001 per share, pursuant to
Advances, covering the Registrable Securities. The purchase price
of the Shares under the Equity Agreement is equal to 95% of the
lowest daily volume weighted average price of the Company's common
stock during the five consecutive trading days after the Company
delivers to TCA an Advance notice in writing requiring TCA to
advance funds to the Company, subject to the terms of the Equity
Agreement. A copy of the Committed Equity Facility Agreement is
available for free at http://is.gd/uPNJMN
Pursuant to the terms of the Registration Rights Agreement, the
Company will use its commercially reasonable best efforts to file
a registration statement with the U.S. Securities and Exchange
Commission to cover the Registrable Securities no later than 45
days from the Closing Date. In the event the Registration
Statement is not declared effective by the SEC by a date that is
no later than 150 days from the earlier to occur of: (A) the date
the Registration Statement is filed; or (B) the Filing Deadline,
the Company will be subject to certain penalties as further
detailed in the Registration Rights Agreement. A copy of the
Registration Rights Agreement is available for free at:
http://is.gd/M2OWDB
On July 13, 2012, MusclePharm entered into a security agreement
with TCA related to a $750,000 promissory note issued by the
Company in favor of TCA. The Security Agreement grants to TCA a
continuing, first priority security interest in all of the
Company's assets, wheresoever located and whether now existing or
hereafter arising or acquired.
The maturity date of the Note is July 12, 2013, and the Note bears
interest at a rate of 12% per annum. At any time prior to the
Maturity Date, the Company has the option to pre-pay the Note, in
full or in part, without penalty.
About MusclePharm
Headquartered in Denver, Colorado, MusclePharm Corporation
(OTC BB: MSLP) -- http://www.muslepharm.com/-- is a healthy life-
style company that develops and manufactures a full line of
National Science Foundation approved nutritional supplements that
are 100% free of banned substances. MusclePharm is sold in over
120 countries and available in over 5,000 U.S. retail outlets,
including GNC and Vitamin Shoppe. MusclePharm products are also
sold in over 100 online stores, including bodybuilding.com,
Amazon.com and Vitacost.com.
In the auditors' report accompanying the consolidated financial
statements for the year ended Dec. 31, 2011, Berman & Company,
P.A., in Boca Raton, Florida, expressed substantial doubt about
the Company's ability to continue as a going concern. The
independent auditors noted that the Company has a net loss of
$23,280,950 and net cash used in operations of $5,801,761 for the
year ended Dec. 31, 2011; and has a working capital deficit of
$13,693,267, and a stockholders' deficit of $12,971,212 at Dec.
31, 2011.
The Company's balance sheet at March 31, 2012, showed
$7.55 million in total assets, $24.76 million in total
liabilities, and a $17.21 million total stockholders' deficit.
The Company's restated statement of operations reflects a net loss
of $23.28 million in 2011, compared with a net loss of $19.56
million in 2010.
MUSCLEPHARM CORP: Sells 100 Million Common Shares for $1 Million
----------------------------------------------------------------
MusclePharm Corporation, on July 13, 2012, entered into a
Securities Purchase Agreement with six investors pursuant to which
the Company:
(i) sold 100,000,000 shares of its common stock, $0.001 par
value per share, at a per share price of $0.01 for an
aggregate purchase price of up to $1,000,000; and
(ii) issued warrants with a term of five years to purchase an
aggregate of up to 50,000,000 shares of Common Stock at an
exercise price per share of $0.01, subject anti-dilution
provisions reducing the exercise price if the Company
issues shares for less than the exercise price of the
Warrants.
The SPA includes price protection provisions whereby for so long
as an Investor holds shares of the Common Stock purchased pursuant
to the SPA, in the event that the Company issues or sells any
shares of Common Stock or any Common Stock equivalent pursuant to
which shares of Common Stock may be acquired or issued at a price
less than the $0.01 per share purchase price, then the Company is
obligated to issue additional shares of common stock to each such
Investor, for no additional consideration, so that the Investor's
cost basis in the shares originally purchased plus the shares
issued due to the price protection provision equals the Diluted
Price Per Share.
Pursuant to the terms of the SPA, the Company may sell an
additional 100,000,000 shares of Common Stock and 50,000,000
Warrants in one or more additional closings pursuant to the terms
of the SPA; provided, however, that each subsequent closing is for
a minimum of $250,000 and the holders of a majority of the Common
Stock/Warrants purchased in the initial closing have consented to
the sale of the additional securities.
Pursuant to a Registration Rights Agreement, the Company is
obligated to register for resale with the Securities and Exchange
Commission the shares of Common Stock received by the investors in
the private placement.
A copy of the SPA is available for free at http://is.gd/fsj7Vo
Consulting Agreements
On July 14, 2012, the Company entered into two consulting
agreements with two corporate advisers to provide certain
consulting services relating to introducing the Company to banking
relationships and advising on corporate structure issues and
strategic acquisition planning. Each agreement has a term of 12
months. In consideration for the Services, the Company agreed to
issue as consideration for the Services shares of the Company's
common stock in an amount equal to 4.2% of the outstanding shares
of common stock of the Company on a fully diluted (as-converted)
basis upon the Company effectuating a contemplated reverse stock
split and completion of a qualified financing, which requirement
has been met by the completion of the private placement.
Notwithstanding the foregoing, in the event that the Company fails
to consummate the reverse stock split within 45 days from the date
of the agreement, the Company is required to take all requisite
action to increase the number of its authorized common stock
outstanding and issue the Compensation Shares no later than 60
days from the date of the agreement. In addition, until the
Company has issued and outstanding 3.5 billion shares of Common
Stock (subject to adjustment for stock splits), the Company is
obligated to ensure that the Consultant maintains its 4.2% fully
diluted equity position by issuing additional shares for no
further consideration on a fully diluted basis after future
issuances of common stock or securities exercisable for or
convertible into common stock.
If the Company fails to issue the Compensation Shares within 60
days of the date of the agreement, and that failure remains
uncured for 15 days, then the Equity Anti-Dilution Adjustment
rights will be extended to a period of two years from the date of
the agreement. In addition, the Company will not affect any
change of control transaction unless the Consultant will have
received all of the Compensation Shares it is entitled to receive.
The Company has agreed to register with the Securities and
Exchange Commission the Compensation Shares for resale by the
Consultants.
On July 14, 2012, the Company appointed Mark Groussman to its
Board of Directors. Mr. Groussman's appointment to the Board was
pursuant to the terms of one of the Consulting Agreements between
the Company and Melechdavid, Inc., a corporation owned by Mr.
Groussman.
Mr. Groussman, age 39, was appointed as the Chief Executive
Officer of American Strategic Minerals Corporation in June 2012.
Mr. Groussman has been a consultant and investor in both private
and public companies for the past 11 years. Mr. Groussman has
been the managing member of Bull Hunter LLC since 2001 and the
president of Melechdavid, Inc., since 2001. Both of these
companies invest in small capitalization in private and public
companies. Mr. Groussman received his B.A. from George Washington
University in 1995 and received a M.S. in Real Estate Finance from
New York University in 1999. Mr. Groussman's appointment to the
Board was pursuant to the terms of a consulting agreement between
the Company and Melechdavid, Inc., a corporation owned by Mr.
Groussman.
About MusclePharm
Headquartered in Denver, Colorado, MusclePharm Corporation
(OTC BB: MSLP) -- http://www.muslepharm.com/-- is a healthy life-
style company that develops and manufactures a full line of
National Science Foundation approved nutritional supplements that
are 100% free of banned substances. MusclePharm is sold in over
120 countries and available in over 5,000 U.S. retail outlets,
including GNC and Vitamin Shoppe. MusclePharm products are also
sold in over 100 online stores, including bodybuilding.com,
Amazon.com and Vitacost.com.
In the auditors' report accompanying the consolidated financial
statements for the year ended Dec. 31, 2011, Berman & Company,
P.A., in Boca Raton, Florida, expressed substantial doubt about
the Company's ability to continue as a going concern. The
independent auditors noted that the Company has a net loss of
$23,280,950 and net cash used in operations of $5,801,761 for the
year ended Dec. 31, 2011; and has a working capital deficit of
$13,693,267, and a stockholders' deficit of $12,971,212 at Dec.
31, 2011.
The Company's balance sheet at March 31, 2012, showed
$7.55 million in total assets, $24.76 million in total
liabilities, and a $17.21 million total stockholders' deficit.
The Company's restated statement of operations reflects a net loss
of $23.28 million in 2011, compared with a net loss of
$19.56 million in 2010.
NEXSTAR BROADCASTING: S&P Puts 'B' Rating on $325MM Notes on Watch
------------------------------------------------------------------
Standard & Poor's Rating Services placed its 'B' issue-level
rating on the $325 million senior secured second-lien notes due
2017 issued by Nexstar Broadcasting Inc. and Mission Broadcasting
Inc. on CreditWatch with developing implications. All other
ratings, including the 'B' corporate credit rating, are unchanged.
The outlook is stable.
"We expect to withdraw the 'BB-' issue-level rating on the
existing senior secured credit facility and the 'CCC+' issue-level
rating on the senior subordinated notes when they are repaid,"
said Standard & Poor's credit analyst Daniel Haines.
"The rating action reflects Nexstar's plans to issue new debt to
refinance its existing senior secured credit facility (consisting
of a $148 million term loan B and a $75 million revolver with $6.7
million drawn as of March 31, 2012), repay its senior subordinated
notes (approximately $116 million), and fund the acquisition of 12
stations from Newport Television Holdings. We expect the new
capital structure could lead us to revise our recovery rating
on the senior secured second lien notes. If the new capital
structure consists of first-lien debt equal to 3.5x EBITDA or
more, the issue-level rating on the second-lien notes could be
lowered to a 'B-' from a 'B'. However, if the new capital
structure consists of first-lien debt equal to 2x EBITDA or less
and the amount of second-lien debt stays the same, we could raise
our issue-level rating on the second-lien notes 'B+' from 'B',"
S&P said.
NII CAPITAL: S&P Lowers Rating on Senior Unsecured Debt to 'B'
--------------------------------------------------------------
Standard & Poor's Ratings Services revised the recovery rating on
NII Capital Corp.'s senior unsecured debt to '5' from '4',
lowering S&P's issue-level rating on the debt to 'B' from 'B+'.
The '5' recovery rating indicates expectations for modest (10%-
30%) recovery in the event of payment default.
"At the same time, we affirmed all other ratings, including the
'B+' corporate credit rating, on Reston, Va.-based parent company
NII Holdings Inc. (NII), a wireless operator in Latin America,"
S&P said.
"The rating action follows our review of the recovery methodology
for NII," S&P said.
"As a result," said Standard & Poor's credit analyst Allyn Arden,
"we lowered NII's implied valuation multiple at default to 4x its
projected emergence EBITDA, from 5x given out less favorable view
of the business in a default scenario. Competitive factors are
more likely to contribute to lower valuation at default than our
previous assessment."
"The ratings on NII reflect a 'weak' business risk profile and an
'aggressive' financial risk profile. Key business risk factors
include a competitive wireless industry conditions and exposure to
country risk in its key markets, including regulatory, economic,
and foreign exchange risks. Moreover, the company faces some
technology risk because of its partial dependence on Motorola
Inc.'s integrated digital enhanced network (iDEN) technology.
Tempering factors include NII's niche business focused on high
average revenue per user (ARPU) and low-churn corporate customers,
some geographic diversity, and solid subscriber growth. Standard &
Poor's financial risk assessment is based on NII's currently
moderate leverage, which we expect to increase over the next few
years, and our expectation for ongoing free operating cash flow
(FOCF) deficits because of the company's aggressive expansion
plans and capital intensity of the industry," S&P said.
"The outlook is stable and incorporates our expectation that
operating and financial performance will likely be weaker in 2012
than 2011 due to increased price-based competition, depreciating
local currencies, and costs associated with building out 3G
networks in Brazil and Mexico. Still, we believe that NII's
moderate leverage provides support for the ratings. Nevertheless,
we could lower the ratings if competitive pressures or adverse
currency movements result in leverage increasing to the high-4x
area. Although unlikely in the near term, an upgrade would hinge
on NII's ability to maintain healthy subscriber growth in its
markets while managing its expansion plans such that it is on a
trajectory to generate sustained positive FOCF and achieve
leverage of 3x or below," S&P said.
NORTH FOREST: Moody's Confirms 'Ba3' Rating on $56.5MM G.O. Debt
----------------------------------------------------------------
Moody's Investors Service has confirmed the Ba3 rating on North
Forest Independent School District's (TX) $56.5 million general
obligation debt. We have removed the rating from watch and there
is currently no outlook on the rating
Summary Rating Rationale
The Ba3 rating reflects the district's history of financial
mismanagement demonstrated by the district's failure to address
staffing levels despite steep and ongoing enrollment decline;
misreporting of district enrollment resulting in a large liability
to the state; and the use of bond funds for operating expenses.
Financial mismanagement has resulted in deficit fund balances and
narrow cash positions. As a result of financial mismanagement and
educational deficiencies, the Texas Education Agency (TEA) moved
to dissolve the district and merge the district with neighboring
Houston ISD (Aaa) effective July 1st 2012. North Forest ISD
received a last minute reprieve which allows them to be open for
another year. The removal of the watch and no outlook reflects the
last minute reprieve, as well as the sustained appointment of the
conservator who acts as a financial, academic and governance
overseer for the district. It also reflects the district's recent
increase of the debt service levy (the debt service levy can only
be used to pay voter approved debt) which lends some credit to the
district's ability and willingness to repay debt service. The
general obligation bonds are secured by the district's unlimited
tax pledge.
STRENGTHS
Recent debt service tax rate increase
CHALLENGES
Narrow financial liquidity
Declining enrollment
The removal of watch and return to no outlook reflects the last
minute reprieve granted to the district, as well as a recent tax
rate increase in debt service levy generating sufficient revenues
to repay debt service.
WHAT COULD CHANGE THE RATING - UP:
Annexation of NFISD into HISD
WHAT COULD CHANGE THE RATING -- DOWN:
Inability or failure to repay debt service
Deterioration in finances
PRINCIPAL METHODOLOGY
The principal methodology used in this rating was General
Obligation Bonds Issued by U.S. Local Governments published in
October 2009.
NORTHAMPTON GENERATING: Asks for Third Plan Extension
-----------------------------------------------------
Carla Main, substituting for Bloomberg News bankruptcy columnist
Bill Rochelle, reports that Northampton Generating Co. LP has
asked the U.S. Bankruptcy Court in Charlotte, North Carolina to
extend its time as the only one that may file a plan of
reorganization and gather support for it. This is the debtor's
third request for more time. On the current request, Northampton
is asking that the period of exclusivity be extended to Sept. 14
and the time to solicit support extended to Nov. 13. A hearing is
scheduled on the motion for Aug. 14.
The report recounts that the Debtor previously persuaded the Court
to enlarge its exclusive time to submit a proposed plan. While
Northampton wanted an enlargement of exclusivity by three months
to Sept. 30, the court in Charlotte, North Carolina, at that time
only pushed the deadline out to Aug. 17.
About Northampton Generating
Northampton Generating Co. LP is the owner of a 112 megawatt
electric generating plant in Northampton, Pennsylvania. The plant
is fueled with waste products, including waste coal, fiber waste,
and tires. The power is sold under a long-term agreement to an
affiliate of FirstEnergy Corp.
Northampton Generating filed for Chapter 11 bankruptcy (Bankr.
W.D.N.C. Case No. 11-33095) on Dec. 5, 2011. Hillary B. Crabtree,
Esq., and Luis Manuel Lluberas, Esq., at Moore & Van Allen PLLC,
in Charlotte, N.C., serve as counsel to the Debtors. Houlihan
Lokey Capital, Inc., is the financial advisor.
The Debtor estimated assets and debts of up to $500 million. Debt
includes $73.4 million owing on senior bonds issued through the
Pennsylvania Economic Development Financing Authority.
No request for the appointment of a trustee or examiner has been
made, and no statutory committee or trustee has been appointed in
this case.
NORTHSTAR AERO: Files Schedules of Assets and Liabilities
---------------------------------------------------------
Northstar Aerospace (Chicago) Inc., filed with the U.S. Bankruptcy
Court for the Bankruptcy Court District of Delaware its schedules
of assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $0
B. Personal Property $59,360,572
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $60,090,065
E. Creditors Holding
Unsecured Priority
Claims $126,291
F. Creditors Holding
Unsecured Non-priority
Claims $2,349,748
----------- -----------
TOTAL $$59,360,572 $62,566,104
Affiliates also filed their respective schedules, disclosing:
Company Assets Liabilities
------- ------ -----------
D-Velco Manufacturing Of Arizona, Inc. $24,879,530 $61,134,729
Derlan USA, Inc. $60,090,064 $60,090,064
Northstar Aerospace (USA) Inc. $175,897 $60,400,127
Copies of the schedules are available for free at:
http://bankrupt.com/misc/NORTHSTAR_derlan_sal.pdf
http://bankrupt.com/misc/NORTHSTAR_d-velco_sal.pdf
http://bankrupt.com/misc/NORTHSTAR_sal.pdf
http://bankrupt.com/misc/NORTHSTAR_sal_b.pdf
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.
Northstar Aerospace, along with affiliates, 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.
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.
Certain Canadian affiliates are also seeking protection pursuant
to the Companies' Creditors Arrangement Act, R.S.C.1985, c. C-36,
as amended.
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.
NJ MOBILE DENTAL: Owner Denied Chapter 7 Discharge
--------------------------------------------------
Bankruptcy Judge Donald H. Steckroth granted the request of Rama
Gvildys for summary judgment denying discharge as to Dr. Stephen
Beukas pursuant to 11 U.S.C. Sections 727(a)(3), (a)(4)(A), and
(a)(5). The Court, however, granted, with prejudice, the
Beukases' cross-motion to dismiss as to the claims against Mrs.
Sandra Beukas.
Gvildys alleges that Dr. Beukas opened a bank account in the name
of a non-operating corporation, Mobile Dental Practice, P.C.,
shortly before filing a Chapter 11 petition for his business, New
Jersey Mobile Dental Practice, P.A. Dr. Beukas allegedly used the
Mobile Dental accounts for personal expenses and, over a four-year
period, deposited in excess of $2.7 million into the accounts,
some funds of which belonged to NJMDP. Gvildys alleges that the
Beukases failed to (i) disclose this activity on their monthly
operating reports; (ii) keep or preserve records regarding the
account; and (iii) explain the loss of assets through use of the
account. Gvildys argues that those failures to report and
disclose, together with the misuse of NJMDP funds, require denial
of the Beukases' discharge under section 727(a).
In defense, the Beukases appear to argue, among other things, that
(i) the MORs were professionally prepared; (ii) the Mobile Dental
account belongs to a separate legal entity, thus disclosure of its
activity was not necessarily required; (iii) Dr. Beukas was never
asked to explain the loss of any assets; (iv) discovery has yet to
take place; and (v) Mrs. Beukas was not involved in any of the
alleged wrongdoing. The remainder of the Beukases' defense rests
largely on evidentiary objections, and specifically, that Gvildys
relies on hearsay or otherwise inadmissible evidence to support
her claims.
A copy of the Court's July 24, 2012 Opinion is available at
http://is.gd/EoaXvKfrom Leagle.com.
Dr. Stephen Beukas caused Clifton, New Jersey-based New Jersey
Mobile Dental Practice, P.A., to file a Chapter 11 petition
(Bankr. D.N.J. Case No. 05-17772) on March 15, 2005. Jonathan I.
Rabinowitz, Esq., at Booker, Rabinowitz, Trenk, Lubetkin, Tully,
DiPasquale & Webster, P.C., served as counsel in the 2005 case.
The 2005 petition estimated NJMDP's assets between $100,000 and
$500,000 debts at $1 million to $10 million. NJMDP's plan of
reorganization was confirmed in January 2009. The case was
subsequently closed.
The Beukases filed their individual joint petition for Chapter 11
relief (Bankr. D.N.J. Case No. 08-10463) in January 2008. In
August 2009, Barry R. Sharer was appointed as examiner. Robert
Wasserman was appointed as chapter 11 Trustee in February 2010.
In March 2010, the Examiner issued a report, concluding that the
Beukases could not demonstrate a feasible plan of reorganization
and thus, the case should be converted to Chapter 7. The case was
converted to chapter 7 shortly thereafter. At the same time, the
NJMDP case was reopened, converted to chapter 7, and the Trustee
was appointed to administer NJMDP's estate.
OCWEN FINANCIAL: Moody's Affirms 'B1' CFR; Outlook Stable
---------------------------------------------------------
Moody's Investors Service affirmed Ocwen Financial Corporation's
corporate family and senior secured ratings at B1. Ocwen Capital
Trust I, an issuance vehicle for trust preferred securities, is
rated Caa1. The outlook for all ratings is stable.
Ratings Rationale
Ocwen's ratings reflect the company's rapid recent growth and its
solid track record as a non-prime residential mortgage servicer -
a high-margin recurring fee-based business model with stable free
cash flow generation. In addition, the ratings reflect the
company's strong capital and leverage metrics for a B1 rated
financial services company.
The ratings are constrained by Ocwen's high level of encumbered
assets and the short average maturity of the company's servicer
advance securitizations which limit the company's financial
flexibility. The ratings are also constrained by the fact that
virtually all new servicing volume is obtained through
opportunistic bulk acquisitions and that the company is a monoline
financial services company concentrating on the residential
mortgage servicing market. Management also has a history of
exploring new ancillary business opportunities, potentially
distracting management from its focus on the core servicing
franchise.
The rating outlook is stable. Over the last eighteen months, the
company, along with several other non-prime specialty servicers,
has grown at a rapid pace. The rapid growth poses operational
integration risks for the mortgage servicers. The stable outlook
reflects Moody's expectation that Ocwen will continue to grow its
third party servicing business at a rapid, albeit manageable, pace
while continuing to maintain its solid performance. Once growth
moderates and assuming Ocwen develops sustainable organic growth,
positive ratings pressure could develop.
The notching for the B1 corporate family rating and Caa1 trust
preferred ratings reflect the leverage and subordination of the
trust preferred securities.
The principal methodology used in this rating was the Finance
Company Global Rating Methodology published March 2012.
Ocwen Financial, a publicly-traded company, is a provider of
residential and commercial loan servicing, special servicing and
asset management services with headquarters in Atlanta, Georgia
and offices in West Palm Beach and Orlando, Florida, Houston,
Texas and Washington, DC and global support operations in Uruguay
and India.
ORLANDO CARLO: Case Summary & 12 Unsecured Creditors
----------------------------------------------------
Debtor: Orlando Carlo, Inc.
P.O. Box 1120
Mayaguez, PR 00680
Bankruptcy Case No.: 12-05849
Chapter 11 Petition Date: July 24, 2012
Court: United States Bankruptcy Court
District of Puerto Rico (Ponce)
Debtor's Counsel: Antonio I Hernandez Santiago, Esq.
HERNANDEZ LAW OFFICES
P.O. Box 8509
San Juan, PR 00910-0509
Tel: (787) 250-0575
E-mail: ahernandezlaw@yahoo.com
Scheduled Assets: $2,168,248
Scheduled Liabilities: $1,913,561
A copy of the Company's list of its 12 unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/prb12-05849.pdf
The petition was signed by Orlando R. Carlo Font, president.
Affiliate that simultaneously filed Chapter 11 petition:
Debtor Case No.
------ --------
Orlando Carlo-Font 12-05850
OWENS & MINOR: Moviato Deal No Impact on Moody's 'Ba1' Rating
-------------------------------------------------------------
Moody's Investors said distributor Owens & Minor, Inc. (Ba1
stable) announced on July 24 it entered into a definitive
agreement to acquire the majority of the Movianto Group from
Celesio AG for approximately $160 million of cash. The acquisition
is credit positive because it increases the size and scale of
Owens & Minor's third party logistics segment and allows for
global distribution growth over the longer-term with a relatively
modest cash investment.
The acquisition does not affect the ratings because the cash
transaction is small compared to Owens & Minor's financial
position including revenue of approximately $8.7 billion and
Moody's adjusted EBITDA of approximately $300 million, as of the
12 months ended March 31, 2012. The transaction will result in
minimal impact to credit metrics: debt/EBITDA (below 2 times) and
[EBITDA-capital expenditures]-to-interest expense (above 6 times).
Founded 1882, Owens & Minor, Inc. is a leading national
distributor of medical and surgical supplies to the acute-care
market. The company distributes products from over 1,200 suppliers
to approximately 4,000 healthcare provider customers from 48
distribution and service centers nationwide. Owens & Minor
reported revenues of approximately $8.7 billion for the 12 months
ended March 31, 2012.
PACESETTER FABRICS: Davidoff Gold Can Replace Rutter as Counsel
---------------------------------------------------------------
Pacesetter Fabrics, LLC, sought and obtained authorization from
the U.S. Bankruptcy Court for the Central District of California
to employ Davidoff Gold LLP as its successor general bankruptcy
counsel, effective as of and retroactive to Feb. 1, 2012.
The Debtor requested authority to employ and compensate DG as its
successor general bankruptcy counsel on terms substantially
identical to the terms of the employment of the predecessor
counsel Rutter Hobbs & Davidoff Incorporated. The Debtor
previously employed at RHD as its general bankruptcy counsel. RHD
rendered services to the Debtor in connection with this bankruptcy
case from the Petition Date through Jan. 31, 2012. The former RHD
attorneys who rendered services to the Debtor in the Debtor's
bankruptcy case, including Brian L. Davidoff, Esq., C. John M.
Melissinos, Esq., and Claire E. Shin, Esq., left RHD and began
practicing law with DG on Feb. 1, 2012, when the firm was formed1.
DG has since been providing services to the Debtor in connection
with this bankruptcy case.
DG will, among other things, provide legal advice with respect to
the Debtor's duties and responsibilities in its Chapter 11
bankruptcy case. The normal billing rates of DG range from $325
to $590 per hour for attorneys, and $100 per hour for paralegals.
The current hourly billing rates of the principal attorneys who
will work on the case are:
Brian L. Davidoff $590
C. John M. Melissinos $450
Claire E. Shin $350
Brian L. Davidoff, Esq., partner and founding member at DG,
attested to the Court that the firm is a "disinterested person" as
that term is defined in Section 101(14) of the Bankruptcy Code.
About Pacesetter Fabrics
Based in City of Commerce, California, Pacesetter Fabrics, LLC,
dba Pacesetter Off Price and Pacesetter Garments, is a distributor
of quality textile and garment fabrics in the United States and
international markets. The Company has been in business for over
14 years. The Company is owned 98% by Net, LLC, a California
limited liability company, 1% by Leora Namvar (Ramin Namvar's
wife), and 1% by Massoud Poursalimi (Leora Namvar and David
Poursalimi's father). Net LLC is in turn owned 99% by Ramin
Namvar and 1% Leora Namvar.
Pacesetter Fabrics filed for Chapter 11 bankruptcy (Bankr. C.D.
Calif. Case No. 11-36330) on June 17, 2011. Judge Ernest M.
Robles presides over the case. The Debtor disclosed $33,695,869
in assets and $28,599,582 in liabilities as of the Chapter 11
filing.
Brian Wygle president of Lazarus Resources Group, LLC, a corporate
turnaround consultant, assists Pacesetter with its turnaround and
reorganization efforts and the financial affairs and management of
the Company.
PACESETTER FABRICS: Can Hire Hernandez Schaedel as Labor Counsel
----------------------------------------------------------------
Pacesetter Fabrics, LLC, sought and obtained permission from the
U.S. Bankruptcy Court for the Central District of California to
employ Hernandez Schaedel & Associates LLP as its special labor
and employment counsel, effective as of and retroactive to
April 5, 2012.
The Debtor has been investigated by California's Employment
Development Department which has notified the Debtor of its audit
results and has issued a notice of assessment. The Debtor
requires Hernandez Schaedel's guidance as to the impact of EDD's
findings and representation vis-a-vis EDD, including appeal and
negotiation. The Debtor also seeks Hernandez Schaedel's advice
and counsel with respect to ongoing labor and employment law
issues, including compliance with wage/hour rules, hiring, and
recordkeeping, among other things. Hernandez Schaedel will
represent the Debtor before EDD in connection with the notice of
assessment, and providing general employment and labor advice
regarding compliance with state and federal employment laws as may
be necessary.
Hernandez Schaedel requires an initial retainer deposit of $10,000
in connection with the engagement to serve as a security retainer
to secure the payment of Hernandez Schaedel's fees and expenses.
Of this amount, $5,000 was paid to Hernandez Schaedel by Net, LLC
(a non-debtor source) and is held on deposit in a client trust
account. The remaining $5,000 will be provided to Hernandez
Schaedel by the Debtor upon the court approval.
The normal billing rates of Hernandez Schaedel range from $225 to
$500 per hour for attorneys, and from $55 to $150 per hour for
paralegals. The current hourly billing rates of the attorneys who
are expected to provide services to the Debtor are:
Jack Schaedel, Esq. $475
Jennifer Tsao, Esq. $275
John P. Schaedel, Esq., a partner and founding member at Hernandez
Schaedel, attested to the Court that the firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
About Pacesetter Fabrics
Based in City of Commerce, California, Pacesetter Fabrics, LLC,
dba Pacesetter Off Price and Pacesetter Garments, is a distributor
of quality textile and garment fabrics in the United States and
international markets. The Company has been in business for over
14 years. The Company is owned 98% by Net, LLC, a California
limited liability company, 1% by Leora Namvar (Ramin Namvar's
wife), and 1% by Massoud Poursalimi (Leora Namvar and David
Poursalimi's father). Net LLC is in turn owned 99% by Ramin
Namvar and 1% Leora Namvar.
Pacesetter Fabrics filed for Chapter 11 bankruptcy (Bankr. C.D.
Calif. Case No. 11-36330) on June 17, 2011. Judge Ernest M.
Robles presides over the case. Davidoff Gold LLP serves as the
Debtor's general bankruptcy counsel. The Debtor disclosed
$33,695,869 in assets and $28,599,582 in liabilities as of the
Chapter 11 filing.
Brian Wygle president of Lazarus Resources Group, LLC, a corporate
turnaround consultant, assists Pacesetter with its turnaround and
reorganization efforts and the financial affairs and management of
the Company.
PATRIOT COAL: Said to Set Price on Portion of DIP Loan Financing
----------------------------------------------------------------
Carla Main, substituting for Bloomberg News bankruptcy columnist
Bill Rochelle, reports that according to a person with knowledge
of the matter, Patriot Coal Corp. set the price it will sell a
$375 million portion of its debtor-in-possession loan.
According to the report, Patriot is proposing to sell the debt at
98 cents on the dollar, said the person, who asked not to be
identified because the terms are private. The so-called original
issue discount reduces proceeds for the borrower and boosts the
yield for investors.
The report relates that the St. Louis-based coal producer will pay
interest at 8 percentage points more than the London interbank
offered rate on the debt and the lending benchmark will have a
1.5% minimum, according to data compiled by Bloomberg.
Citigroup Inc., Barclays Plc and Bank of America Corp. are
arranging the debt, which includes a $125 million line of credit
that pays interest at 3.25 percentage points more than Libor.
Lenders must let the banks know by 5 p.m. in New York on July 31
if they will participate in the deal, the person said.
About Patriot Coal Corp.
St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer
and marketer of coal in the eastern United States, with 13 active
mining complexes in Appalachia and the Illinois Basin. The
Company ships to domestic and international electricity
generators, industrial users and metallurgical coal customers, and
controls roughly 1.9 billion tons of proven and probable coal
reserves.
Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11
petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y.
Lead Case No. 12-12900) on July 9, 2012. Patriot said it had
$3.57 billion of assets and $3.07 billion of debts, and has
arranged $802 million of financing to continue operations during
the reorganization.
Davis Polk & Wardwell LLP is serving as legal advisor, Blackstone
Advisory Partners LP is serving as financial advisor, and AP
Services, LLC is providing interim management services to Patriot
in connection with the reorganization. Ted Stenger, a Managing
Director at AlixPartners LLP, the parent company of AP Services,
has been named Chief Restructuring Officer of Patriot, reporting
to the Chairman and CEO.
The case has been assigned to Judge Shelley C. Chapman.
PEREGRINE FIN'L: Court Cancels Detention Hearing for CEO
--------------------------------------------------------
Jacob Bunge and Jack Nicas, writing for Dow Jones Newswires,
report that U.S. District Court Judge Leonard Strand on Thursday
granted a motion filed by Peregrine Financial Group CEO Russell
Wasendorf Sr.'s public defender to cancel a scheduled detention
hearing today, July 27. He also waived his right to a preliminary
hearing, according to court documents.
According to Dow Jones, legal experts said the move could
foreshadow a plea or grand jury indictment.
The report says Mr. Wasendorf Sr. will remain in a detention
facility in Cedar Rapids, Iowa, after being charged earlier this
month with lying to government regulators as part of an alleged
scheme to defraud clients at his futures brokerage over 20 years.
The authorities continue efforts to trace an estimated $215
million in missing client funds.
The report notes Mr. Wasendorf did not enter a plea at his initial
hearing on July 13. The U.S. government has 30 days from the time
of his arrest to bring an indictment, or ask the court for more
time.
"In a large, significant case like this involving alleged fraud,
it's not unusual to see someone waive a preliminary hearing," said
Eric Sussman, Esq., partner and Chicago co-chairman of the white-
collar litigation practice for law firm Kaye Scholer, according to
Dow Jones.
According to Dow Jones, Mr. Sussman, who prosecuted former media
executive Conrad Black on tax and securities fraud charges, said
defense attorneys often see little gain from a preliminary hearing
in which law-enforcement agents essentially repeat what has
already been stated in a formal complaint. In return for waiving
preliminary hearings, defense lawyers may obtain early discovery
materials, he said.
Jane Kelly, Esq., represents Mr. Wasendorf.
PEREGRINE FIN'L: CFTC Access to Firm Accounts Could Prevent Theft
-----------------------------------------------------------------
Ian Thoms at Bankruptcy Law360 reports that weeks after Peregrine
Financial Group Inc. was revealed as a fraud in the latest scandal
to rock the futures industry, U.S. financial regulators are
demanding electronic access to brokerage accounts, a move experts
say could help ensure the protection of customer funds and prevent
another multimillion-dollar theft.
Earlier on July 10, at the behest of the U.S. Commodity Futures
Trading Commission, a U.S. district judge appointed a receiver and
froze the firm's assets. The firm put itself into bankruptcy
liquidation in Chicago later the same day. The CFTC had sued
Peregrine, saying that more than $200 million of supposedly
segregated customer funds had been "misappropriated." The CFTC
case is U.S. Commodity Futures Trading Commission v. Peregrine
Financial Group Inc., 12-cv-5383, U.S. District Court, Northern
District of Illinois (Chicago).
About Peregrine Financial
Peregrine's Chief Executive Russell R. Wasendorf Sr.
unsuccessfully attempted suicide outside a firm office in Cedar
Falls, Iowa, on July 9.
The bankruptcy petition was signed in his place by Russell R.
Wasendorf Jr., the firm's chief operating officer. The resolution
stated that Wasendorf Jr. was given a power of attorney on July 3
to exercise if Wasendorf Sr. became incapacitated.
Peregrine Financial Group Inc. is the regulated unit of the
brokerage PFGBest.
At a quickly-convened hearing on July 13, the bankruptcy judge
authorized the Chapter 7 trustee to operate Peregrine's business
on a "limited basis" through Sept. 13.
PONCE DE LEON: Has Nod to Hire Roberto Alsina as Tax Consultant
---------------------------------------------------------------
Ponce De Leon 1403 Inc sought and obtained authorization from the
Hon. Enrique S. Lamoutte Inclan of the U.S. Bankruptcy Court for
the District of Puerto Rico to employ Roberto Alsina of Polis
Group, LLC, as tax consultant for complex residential projects,
including tax benefits and governmental and municipal incentives.
A retainer in the amount of $5,500 has been required in this case.
Mr. Alsina will also be paid on a contingent basis at a rate of 2%
of the net profit received from any tax benefit. In no event the
compensation will be less than the retainer received.
Roberto Alsina, tax consultant and president of Polis Group,
attested to the Court that he is a "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code.
About Ponce De Leon
San Juan, P.R.-based Ponce De Leon 1403, Inc., developed,
constructed, and operates the Metro Plaza Tower condominium and
commercial property project in Santurce, Puerto Rico. The Metro
Plaza Tower project consists of two 15-story towers atop a base
structure that serves as a parking garage, common area, and retail
space. Each tower houses 87 residential units. The base
structure provides approximately 567 parking spaces and has
approximately 14,000 square feet of commercial space available for
lease. The common areas of the project include a swimming pool, a
gym, gardens and a gazebo.
Ponce De Leon 1403 Inc. filed for Chapter 11 protection (Bank. D.
P.R. Case No. 11-07920) on Sept. 19, 2011. The Debtor estimated
both assets and debts of between US$10 million and US$50 million.
Carmen Conde Torres, Esq., at C. Conde & Assoc., in Old San Juan,
Puerto Rico, represents the Debtor as counsel.
U.S. Bankruptcy Court for the District of Puerto Rico has
granted Ponce De Leon 1403 Inc. permission to employ Doris Barroso
Vicens as accountant, with compensation to be paid in such amounts
as may be allowed by the Court.
POSITIVEID CORP: Scott Silverman Discloses 24% Equity Stake
-----------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Scott R. Silverman disclosed that, as of
June 30, 2012, he beneficially owns 26,612,271 shares of common
stock of PositiveID Corporation representing 24% of the shares
outstanding. R&R Consulting Partners, LLC, beneficially owns
2,785,008 shares, representing 2.5% of the outstanding Shares. A
copy of the filing is available for free at:
http://is.gd/tFxytw
About PositiveID
Delray Beach, Fla.-based PositiveID Corporation (OTC BB: PSID) is
a technology development company with two divisions: HealthID and
MicroFluidic Systems. HealthID develops unique medical devices,
focused primarily on diabetes management, and MicroFluidic Systems
develops molecular diagnostic systems, focused primarily on bio-
threat detection products.
The Company's balance sheet at March 31, 2012, showed
$2.99 million in total assets, $4.17 million in total liabilities,
and a $1.18 million total stockholders' deficit.
"The Company's ability to continue as a going concern is dependent
upon its ability to obtain financing to fund the continued
development of its HealthID products, the operations of
MicroFluidic, and working capital requirements. Until the Company
is able to achieve operating profits, it will continue to seek to
access the capital markets," the filing said.
On Aug. 31, 2011, the Company received notification that its stock
was being delisted from the Nasdaq Capital Market and on Sept. 1,
2011, the Company's stock began trading on the OTC Bulletin Board.
The delisting from Nasdaq could adversely affect the market
liquidity of the Company's common stock and harm the business and
may hinder or delay the Company's ability to consummate potential
strategic transactions or investments. That delisting could also
adversely affect the Company's ability to obtain financing for the
continuation of its operations and could result in the loss of
confidence by investors, suppliers and employees.
These conditions raise substantial doubt about the Company's
ability to continue as a going concern.
RADIOSHACK CORP: Fitch Cuts IDR to 'CCC' on Profitability Decline
-----------------------------------------------------------------
Fitch Ratings has downgraded its long-term Issuer Default Rating
(IDR) for RadioShack Corporation to 'CCC' from 'B-'. As of June
30, 2012, RadioShack had approximately $680 million of debt
outstanding.
The downgrade reflects the significant decline in RadioShack's
profitability, which has become progressively more pronounced over
the past four quarters. Results have been disappointing, due in
particular to pressure on the company's mobility segment, leading
to a marked deterioration in the company's credit profile.
There is a lack of stability in the business and no apparent
catalyst to stabilize or improve operations. In addition, sharp
declines in cash flow, together with the expected repayment of the
$375 million of convertible notes maturing in August 2013, will
materially reduce the company's financial flexibility.
RadioShack's comparable store sales were flat in the second
quarter ended June 30, 2012, and have been negative in four of the
past five quarters due to mixed results in the mobility segment
(51% of 2011 sales), sharp declines in the consumer electronics
segment (19% of sales), and flattish sales in the signature
segment (29% of sales).
Weakness in sales have coincided with significant margin
compression, with the gross margin off by over 800 basis points in
the second quarter versus the second quarter of 2011, due
primarily to pressure within the mobility segment. EBITDA for
2Q'12 was negative $0.1 million (assuming stock based comp of $1.8
million) versus $83 million in 2Q'11. In the 12 months ended June
30, 2012, EBITDA fell to $145 million from $284 million in 2011
and $473 million in 2010.
This caused lease adjusted debt/EBITDAR to increase to 6.8 times
(x) at June 30, 2012, from with 5.1x at end-2011. Fitch now
expects leverage will trend above 7x over the next two years as
EBITDA will likely erode further, potentially to the $100 million
range for 2012.
RadioShack's mobility segment generated 3.3% growth in the second
quarter, while margins declined sharply due to the growth of smart
phone sales (iPhones in particular). The growth in the Verizon
Wireless business has been slower than expected since it was
introduced in September 2011.
The mobility segment is a lower-margin business operating in a
competitive space, and consumer awareness of RadioShack's mobile
phone offerings is low, as the bulk of industry-wide wireless
transactions are completed at the carrier's stores. The longer-
term prospects for this segment are uncertain.
RadioShack's other two segments are in decline: signature (29% of
2011 sales) and consumer electronics (19%). The signature
business, which includes sales of accessories, power and technical
products sales, generates healthy margins but had flat sales in
the second quarter following a 4% sales decline in 2011. The
consumer electronics segment experienced a 26.5% sales decline in
the second quarter and a 19% sales decline in 2011, reflecting the
competitive nature of that business as sales shift to the online
channel.
The 'other' segment includes the Target mobile centers, which are
contributing to top line growth, though Fitch believes they are a
drag to earnings. Overall, Fitch expects that the company will
need to continue to be promotional given the challenging economy,
price-sensitive consumer and largely commoditized consumer
electronics space.
RadioShack currently has adequate liquidity, with $517 million in
cash (excluding restricted cash) and $393 million available on its
secured credit facility as of June 30, 2012. Availability on the
credit facility, which expires on Jan. 4, 2016, has been reduced
by 12.5% ($56.3 million) from $450 million given that the fixed
charge coverage (FCC) ratio dropped below 1x as of the end of the
second quarter.
RadioShack is suspending its dividend (annual rate of $50 million)
to preserve liquidity. In addition, while the company has
sufficient cash on hand to repay its nearest debt maturity, the
$375 million of 2.5% convertible notes due August 2013, doing so
will materially reduce its financial flexibility. The company is
contemplating refinancing approximately 50% of the maturity over
the coming months.
The ratings on the various securities reflect Fitch's recovery
analysis which is based on a liquidation value of RadioShack in a
distressed scenario of around $660 million. Applying this value
across the capital structure results in an outstanding recovery
prospect (91%-100%) for the asset-based revolver. This revolver
is collateralized by a first lien on inventory and receivables.
The revolver, which is currently unused, is subject to a borrowing
base, which currently exceeds the facility size. There are no
maintenance covenants in the revolver or the notes, although
availability is reduced by 12.5% of the facility size if the
company's fixed charge coverage ratio drops by 1:1.
The downgrade of the Recovery Rating on the unsecured senior notes
and convertible notes to RR5 from RR4 reflects more conservative
assumptions with regard to advance rates against receivables and
inventories in a distressed liquidation. These notes have below
average recovery prospects (11%-30%).
WHAT COULD TRIGGER A RATING ACTION?
Positive: A stabilization in the business leading to a sustainable
recovery in operating trends and financial flexibility could lead
to an upgrade. This is not expected in the near to intermediate
term.
Negative: Continued deterioration in EBITDA that further
constrains cash flow and liquidity and impedes the company's day
to day operations would lead to a downgrade.
Fitch has downgraded the following ratings:
RadioShack Corporation
-- IDR to 'CCC' from 'B-';
-- $450 million secured revolving credit facility to 'B+/RR1'
from 'BB-/RR1';
-- Senior unsecured notes to 'CC/RR5' from 'B-/RR4'.
RADIOSHACK CORP: Moody's Cuts CFR to 'B3'; Outlook Negative
-----------------------------------------------------------
Moody's Investors Service downgraded RadioShack Corporation's
corporate family and probability of default ratings to B3 from B1.
In addition, the ratings for RadioShack's senior unsecured
convertible notes and senior unsecured notes were downgraded to
Caa1 from B2. The ratings outlook remains negative. RadioShack's
SGL-1 Speculative Grade Liquidity rating is affirmed.
Mickey Chadha, Senior Analyst at Moody's said: "The negative trend
in RadioShack's margins continues unabated resulting in a
precipitous drop in profitability as its business mix is
increasingly skewed towards the highly competitive mobility
business and low margin smart phones causing continued
deterioration in credit metrics." Mr. Chadha went on to say:
"Sales of RadioShack's consumer electronics segment also continue
to shrink due to cannibalization from multi-use smart phones which
has further exacerbated the decline in profitability".
Ratings Rationale
RadioShack's B3 Corporate Family Rating reflects the company's
increasing reliance on its low margin mobility business which has
resulted in margin erosion and weak credit metrics, its
vulnerability to product renewal cycles, product volatility driven
by price competition from a variety of retail formats, small store
size with the constant need to re-balance product mix and
obsolescence risk inherent in consumer technology. The Rating is
supported by RadioShack's very good liquidity profile, balanced
financial policy, and its selection of price-competitive national
and private label products. The company's breadth of peripherals
for digital and audio-visual products, which often require high-
touch sales efforts, helps differentiate it from big-box stores.
Although near term debt maturity concerns are mitigated by the
company's high cash balance which is more than enough to pay off
the convertible notes due 2013, Moody's expects the company to be
increasingly reliant on its unrestricted cash balances as
operating performance continues to deteriorate. While there still
remains very good availability under the company's ABL revolving
credit facility, there has been a $56 million contractual
reduction in availability under the ABL as the company did not
meet a specified consolidated fixed charge coverage ratio during
the trailing twelve month period ending June 30, 2012.
The following ratings are downgraded and point estimates updated:
Corporate Family Rating to B3 from B1
Probability of Default Rating to B3 from B1
$375 million senior unsecured convertible notes due 2013 to Caa1
(LGD 5 , 72%) from B2 (LGD 4, 67%)
$325 million senior unsecured notes due 2019 to Caa1 (LGD 5, 72%)
from B1 (LGD 4, 67%)
Senior unsecured shelf rating to (P) Caa1 from (P) B2
The negative outlook reflects Moody's opinion that the overall
business strategy of the company to reverse the sequential
quarterly declines in profitability has not gained any traction
and Moody's expectation that the 2012 retail operating environment
will remain challenging and the increasing price competition
within the wireless mobility sector including wireless carriers
will continue to pressure margins. Therefore Moody's believes that
RadioShack's ongoing lackluster operating performance and margin
erosion will likely continue in the near to medium term.
Given the negative outlook and the steep decline in the company's
operating performance and profitability, upward movement in
RadioShack's ratings is unlikely in the near to medium term.
Stabilization of the outlook will require sustained improvement in
operating margins and absence of any further operating missteps.
Stabilization of the outlook will also require good liquidity, and
EBITDA demonstrating tangible incremental progress toward a level
that would result in debt/EBITDA being sustained below 6.0 times
and EBITA to interest being sustained above 1.25 times.
In the longer term a higher rating will require no deterioration
in liquidity, sustained positive comparable store sales growth and
improvements in operating margins and profitability such that debt
/ EBITDA is sustained below 5.5 times and EBITA to interest is
sustained above 1.75 times.
The failure of the company to reverse the sequential quarterly
decline in EBITDA and earnings will lead to a downgrade. Given
that debt/EBITDA and EBITA/interest for the LTM period ended June
30, 2012 is 7.6 times and less than 1.0 time respectively, ratings
could be downgraded if there is no improvement in credit metrics
in the near to medium term. Ratings could also be downgraded due
to increases in dividends or share buyback's and any deterioration
in liquidity.
The principal methodology used in rating RadioShack was the Global
Retail Industry Methodology published in June 2011. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
RadioShack is a retailer of consumer electronics and peripherals,
as well as a retailer of cellular phones. It operates roughly
4,700 stores in the U.S. and Mexico. It also operates about 1,500
wireless phone kiosks in Target stores. The company also generates
sales through a network of 1,100 dealer outlets worldwide.
Revenues for the LTM period ending June 30, 2012 were
approximately $4.4 billion.
REOSTAR ENERGY: Plan Confirmation Hearing on Aug. 28
----------------------------------------------------
ReoStar Energy Corp. and its affiliates will seek confirmation of
their Chapter 11 Plan at a hearing on Aug. 28, 2012 at 9:30 a.m.
A hearing to consider final approval of the Disclosure Statement
was held July 24. No approval order has been entered as of
July 25. But according to the case docket, following the status
conference held Tuesday, a confirmation will be set for Aug. 28.
The Debtors on July 20, 2012, filed a Third Amended Plan as well
as a new disclosure statement. According to the Plan, BT and MK
Energy and Commodities, LLC, will be paid $7.5 million on the
effective date of the Plan, and will have no deficiency claim.
The prior iteration of the Plan contemplated that BT & MK will
receive deferred cash payments of 35 equal monthly payments of
$75,000 per month, with a $8.175 million balloon payment on the
37th month, and will have a deficiency claim that would be treated
as an unsecured claim.
As with the prior iteration of the Plan, holders of general
unsecured claims in each of the Debtors will have 100% of the net
proceeds from all estate actions, and 20% of their allowed claim
amounts over 36 equal monthly payments, without interest.
According to the July 20 Plan, BT & MK has an estimated unsecured
claim of $185,000 against each of the Debtors only for voting
purposes. Unsecured creditors are impaired.
Holders of existing interests won't receive anything. New
interests will be sold to Russco Energy LLC.
A copy of the Debtors' Third Amended Plan is available at:
http://bankrupt.com/misc/Reostar_Debtor_Plan_072012.pdf
Settlement Reached
As reported in the June 4, 2012 edition of the Troubled Company
Reporter, BT & MK previously filed a competing plan. But
consideration of the disclosure statement explaining the Plan was
deferred. A copy of the Disclosure Statement, as amended June 25,
2012, explaining the competing plan is available at:
http://bankrupt.com/misc/Reostar_BT_DS_062512.pdf
According to the July 20 Plan, the Debtors and the BTMK parties
reached a settlement. The Debtors' Plan constitutes a motion to
settle under Bankruptcy Rules 9014 and 9019, and seeks approval
within the confirmation order of the global settlement of all
issues and claims asserted between the Debtors on the one hand and
the BTMK Released Parties on the other hand. The effectiveness of
the Plan is expressly conditioned upon approval of the settlement
and mutual releases among such parties. Such approvals and
releases within the confirmation order will include,
contemporaneously upon (i) BTMK's receipt of the $7.5 million
payment on its secured claim, and (ii) BTMK's release of all liens
securing its claims, including subordination agreements and stock
pledges, and consent to the presentation of an agreed order
authorizing and directing the disbursement of the funds in the
registry of the Bankruptcy Court (i.e., the Russco cash bond) to
Russco (including interest) based upon forms of documents drafted
by Russco and agreed to by BTMK.
About ReoStar Energy
Fort Worth, Texas-based ReoStar Energy Corporation is engaged in
the exploration, development and acquisition of oil and gas
properties, primarily located in the state of Texas. The Company
owns roughly 9,000 acres of leasehold, which include 5,000 acres
of exploratory and developmental prospects as well as 4,000 acres
of enhanced oil recovery prospects. ReoStar filed for Chapter 11
bankruptcy protection (Bankr. N.D. Tex. Case No. 10-47176) on
Nov. 1, 2010.
Bankruptcy Judge D. Michael Lynn presides over the case. Bruce W.
Akerly, Esq., and Arthur A. Stewart, Esq., at Cantey Hanger LLP,
in Dallas, represent the Debtors in their restructuring efforts.
Greenberg Taurig, LLP, serves as special corporate/securities
counsel. Reostar Energy disclosed $15.3 million in assets and
$16.4 million in liabilities.
ReoStar Energy's bankruptcy case is jointly administered with
ReoStar Gathering, Inc., ReoStar Leasing, Inc., and ReoStar
Operating, Inc. ReoStar Energy is the lead case.
No trustee was appointed in the Debtors' cases. On Jan. 10, 2011,
Michael McConnell was appointed as Chapter 11 examiner.
ReoStar filed for bankruptcy a few weeks after BT and MK Energy
and Commodities LLC, a Delaware Limited Liability Corporation
comprised of two members, BancTrust International, Inc., and MK
Oil Ventures LLC, accelerated a Union Bank note and issued a
foreclosure notice. BTMK acquired full interest in ReoStar's $25
million line of credit from Union Bank. Earlier in 2010, BT and
MK Capital expressed interested in investing in ReoStar and in
acquiring the line of credit for that purpose. Roughly
$10.8 million of the Union Bank loan were then outstanding, and
Union Bank assigned the loan to BTMK for roughly $5.4 million.
RESIDENTIAL CAPITAL: Proposes Towers Watson as HR Consultant
------------------------------------------------------------
Residential Capital LLC and its affiliates seek the Bankruptcy
Court's authority to employ Towers Watson Delaware Inc., as their
human resources consultant, nunc pro tunc to June 25, 2012.
The Debtors' employees currently maintain their medical, dental,
vision, retirement and other benefits for the 2012 year under
programs that are administered by Ally Financial Inc. Following
the Asset Sales, the Debtors' employees will be transitioned to
the purchaser and will no longer maintain their benefits programs
through AFI. The Debtors' employees are only permitted to
participate in the AFI programs until March 30, 2013, after which
date they will need to switch to a different plan (either a
stand-alone plan provided by the Debtors, or if no such plan is
available, a yet-to-be-determined plan offered by the purchaser).
Any mid-year plan change could complicate matters for the
employees with respect to their deductibles and other
limitations. The Debtors would like to provide their employees
with greater certainty regarding their health and retirement
program options and believe it is in the best interests of their
estates to solidify the terms of their employees' benefits
programs for the 2013 year prior to this year's end. In
addition, the Debtors believe that they can develop a stand-alone
program that will be more cost-effective than the programs
currently provided by AFI.
The Debtors have engaged Towers Watson as their benefits and
systems specialist to assist the Debtors with benefit design and
vendor selection, vendor selection for Payroll, HR, Time and
Attendance processes and Benefits Administration, and related
employee communications. The Debtors believe that Towers Watson
has the expertise and experience necessary to guide them through
this plan development process.
Among others, Towers Watson will provide:
a) Benefits consulting services, including but not limited to
the design and implementation of benefit programs and
vendor negotiation assistance;
b) HR systems review, selection and assistance; and
c) Employee communications assistance.
The Debtors will pay Towers Watson for its services on an hourly
basis under this rate structure:
a. Senior Consultant $450-700
b. Consultant $320-550
c. Analyst $260-375
d. Administrator $120-270
Philip Logan Ullom, a Managing Consultant of the firm Towers
Watson Delaware Inc., assures the Court that to the best of his
knowledge, Towers Watson is a "disinterested person" as that term
is defined in Section 101(14) of the Bankruptcy Code, as modified
by Section 1107(b) of the Bankruptcy Code. Mr. Ullom filed a
supplemental affidavit relating that Towers Watson believes that
its prior work with AFI does not constitute a conflict because
Towers Watson approaches the particular needs of each client when
delivering consulting services.
About Residential Capital
Residential Capital LLC, the unprofitable mortgage subsidiary of
Ally Financial Inc., filed for bankruptcy protection (Bankr.
S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012.
Neither Ally Financial nor Ally Bank is included in the bankruptcy
filings.
ResCap, one of the country's largest mortgage originators and
servicers, was sent to Chapter 11 with 50 subsidiaries amid
"continuing industry challenges, rising litigation costs and
claims, and regulatory uncertainty," according to a company
statement.
ResCap disclosed $15.68 billion in assets and $15.28 billion in
liabilities as of March 31, 2012.
ResCap is selling its mortgage origination and servicing
businesses to Nationstar Mortgage LLC, and its legacy portfolio,
consisting mainly of mortgage loans and other residual financial
assets, to Ally Financial. Together, the asset sales are expected
to generate approximately $4 billion in proceeds.
Centerview Partners LLC and FTI Consulting are acting as financial
advisers to ResCap. Morrison & Foerster LLP is acting as legal
adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is
the conflicts counsel. Rubenstein Associates, Inc., is the public
relations consultants to the Company in the Chapter 11 case.
Morrison Cohen LLP is advising ResCap's independent directors.
Kurtzman Carson Consultants LLP is the claims and notice agent.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves
as counsel to Ally Financial.
Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
RESIDENTIAL CAPITAL: Rubenstein Hired as Communications Consultant
------------------------------------------------------------------
Residential Capital LLC and its affiliates sought and obtained the
Court's authority to employ Rubenstein Associates, Inc., as their
communications consultant, nunc pro tunc to the Petition Date.
Rubenstein will provide the Debtors with, among other services,
strategic public relations advice, guidance, and media relations
services relative to financial issues affecting the Debtors.
Rubenstein will also help craft internal communications for the
Debtors in connection with audiences important to it, including
employees, customers, vendors, and other interested parties.
Rubenstein will be paid according to its hourly rates: $750 for
president, $525 for senior vice president, $475 for executive
vice president, $425 for senior vice president, $325 for
associate vice president, $300 for senior account executive, $275
for account executive, $250 for associate account executive, and
$185 for project assistant.
Rubenstein will also be reimbursed for any necessary out-of-
pocket expenses and indemnified from claims and causes of action
arising out of the firm's utilization of any authorized
information.
Howard Rubenstein, president of Rubenstein Associates, Inc.,
assured the Court that his firm is a "disinterested person" as
the term is defined in Section 101(14) of the Bankruptcy Code, as
modified by Section 1107(b) of the Bankruptcy Code, and does not
represent any interest adverse to the Debtors and their estates.
Mr. Rubenstein disclosed that prior to the Petition Date, the
Debtors paid the firm $150,000 on account of services rendered
from February 2012 through the Petition Date.
About Residential Capital
Residential Capital LLC, the unprofitable mortgage subsidiary of
Ally Financial Inc., filed for bankruptcy protection (Bankr.
S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012.
Neither Ally Financial nor Ally Bank is included in the bankruptcy
filings.
ResCap, one of the country's largest mortgage originators and
servicers, was sent to Chapter 11 with 50 subsidiaries amid
"continuing industry challenges, rising litigation costs and
claims, and regulatory uncertainty," according to a company
statement.
ResCap disclosed $15.68 billion in assets and $15.28 billion in
liabilities as of March 31, 2012.
ResCap is selling its mortgage origination and servicing
businesses to Nationstar Mortgage LLC, and its legacy portfolio,
consisting mainly of mortgage loans and other residual financial
assets, to Ally Financial. Together, the asset sales are expected
to generate approximately $4 billion in proceeds.
Centerview Partners LLC and FTI Consulting are acting as financial
advisers to ResCap. Morrison & Foerster LLP is acting as legal
adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is
the conflicts counsel. Rubenstein Associates, Inc., is the public
relations consultants to the Company in the Chapter 11 case.
Morrison Cohen LLP is advising ResCap's independent directors.
Kurtzman Carson Consultants LLP is the claims and notice agent.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves
as counsel to Ally Financial.
Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
RESIDENTIAL CAPITAL: Curtis Mallet-Prevost Is Conflicts Counsel
---------------------------------------------------------------
Residential Capital LLC and its affiliates sought and obtained the
Court's authority to employ Curtis, Mallet-Prevost, Colt & Mosle
LLP, as conflicts counsel effective as of the Petition Date.
The Debtors believe the retention of Curtis will enhance the
ability of Morrison & Foerster LLP as their lead counsel to
represent them generally and assist them in carrying out their
duties.
Curtis will render professional services to the Debtors for
certain discrete matters, which may include these services, in
connection with matters where MoFo or other counsel to the
Debtors may not be able to act as a result of an actual or
potential conflict of interest:
a. advise the Debtors with respect to their powers and duties
as debtors-in-possession in the continued management and
operation of their businesses and properties;
b. attend meetings and negotiate with representatives of
creditors and other parties in interest;
c. take necessary action to protect and preserve the Debtors'
estates, including prosecuting actions on the Debtors'
behalf, defending any action commenced against the Debtors
and representing the Debtors' interests in negotiations
concerning litigation in which the Debtors are involved,
including objections to claims filed against the estates;
d. prepare motions, applications, answers, orders, appeals,
reports and papers necessary to the administration of the
Debtors' estates;
e. take any necessary action on behalf of the Debtors to obtain
approval of a disclosure statement and confirmation of one
or more Chapter 11 plans;
f. represent the Debtors in connection with obtaining
postpetition financing, including use of cash
collateral;
g. advise the Debtors in connection with any potential sale of
assets;
h. appear before the Court, any appellate courts and the U.S.
Trustee, and protect the interests of the Debtors' estates
before those Courts and the U.S. Trustee;
i. consult with the Debtors regarding tax matters; and
j. perform all other legal services for the Debtors in
connection with these cases.
The Debtors will pay for Curtis' services at the firm's current
hourly rates, which are:
Partners $730 to $830
Counsel $510 to $625
Associates $300 to $590
Paraprofessionals $190 to $230
Managing Clerks $450
Other Support Personnel $55 to $325
The firm will also charge the Debtors reasonable expenses
incurred with its contemplated services.
Steven J. Reisman, Esq., a partner at Curtis, assures the Court
that his firm does not hold or represent any interests adverse to
the Debtors, their creditors, or any other party-in-interest, or
their attorneys. Curtis is a 'disinterested person,' as that
phrase is defined under Section 101(14) of the Bankruptcy Code,
he asserts.
About Residential Capital
Residential Capital LLC, the unprofitable mortgage subsidiary of
Ally Financial Inc., filed for bankruptcy protection (Bankr.
S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012.
Neither Ally Financial nor Ally Bank is included in the bankruptcy
filings.
ResCap, one of the country's largest mortgage originators and
servicers, was sent to Chapter 11 with 50 subsidiaries amid
"continuing industry challenges, rising litigation costs and
claims, and regulatory uncertainty," according to a company
statement.
ResCap disclosed $15.68 billion in assets and $15.28 billion in
liabilities as of March 31, 2012.
ResCap is selling its mortgage origination and servicing
businesses to Nationstar Mortgage LLC, and its legacy portfolio,
consisting mainly of mortgage loans and other residual financial
assets, to Ally Financial. Together, the asset sales are expected
to generate approximately $4 billion in proceeds.
Centerview Partners LLC and FTI Consulting are acting as financial
advisers to ResCap. Morrison & Foerster LLP is acting as legal
adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is
the conflicts counsel. Rubenstein Associates, Inc., is the public
relations consultants to the Company in the Chapter 11 case.
Morrison Cohen LLP is advising ResCap's independent directors.
Kurtzman Carson Consultants LLP is the claims and notice agent.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves
as counsel to Ally Financial.
Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
RESIDENTIAL CAPITAL: Committee Has Kramer Levin as Counsel
----------------------------------------------------------
The official Committee of Unsecured Creditors in Residential
Capital LLC's Chapter 11 cases sought and obtained the Court's
authority to retain Kramer Levin Naftalis & Frankel LLP as counsel
whose responsibilities include assisting the Committee in the
negotiation and evaluation of financings, proposed sale of the
Debtors' assets, and negotiation and confirmation of a plan of
reorganization.
Kramer Levin will also assist the Committee in its investigation
into the reasonableness and appropriateness of the proposed
settlement by or among the Debtors, Ally Financial Inc., holders
of the 9.625% junior secured notes due 2015, and certain RMBS
litigation claimants.
Kramer Levin will be paid according to these hourly rates:
partners $675 to $1,025; counsel $725 to $1,065; special counsel
$700 to $780; associates $375 to $765; and legal assistants $180
to $310. The firm will also be reimbursed for any necessary out-
of-pocket expenses.
Kenneth H. Eckstein, Esq., a member of Kramer Levin Naftalis &
Frankel LLP, in New York, assured the Court that his firm is a
"disinterested person" as the term is defined under Section
101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Committee, the Debtors and their estates.
About Residential Capital
Residential Capital LLC, the unprofitable mortgage subsidiary of
Ally Financial Inc., filed for bankruptcy protection (Bankr.
S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012.
Neither Ally Financial nor Ally Bank is included in the bankruptcy
filings.
ResCap, one of the country's largest mortgage originators and
servicers, was sent to Chapter 11 with 50 subsidiaries amid
"continuing industry challenges, rising litigation costs and
claims, and regulatory uncertainty," according to a company
statement.
ResCap disclosed $15.68 billion in assets and $15.28 billion in
liabilities as of March 31, 2012.
ResCap is selling its mortgage origination and servicing
businesses to Nationstar Mortgage LLC, and its legacy portfolio,
consisting mainly of mortgage loans and other residual financial
assets, to Ally Financial. Together, the asset sales are expected
to generate approximately $4 billion in proceeds.
Centerview Partners LLC and FTI Consulting are acting as financial
advisers to ResCap. Morrison & Foerster LLP is acting as legal
adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is
the conflicts counsel. Rubenstein Associates, Inc., is the public
relations consultants to the Company in the Chapter 11 case.
Morrison Cohen LLP is advising ResCap's independent directors.
Kurtzman Carson Consultants LLP is the claims and notice agent.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves
as counsel to Ally Financial.
Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
RESIDENTIAL CAPITAL: Committee Proposes Moelis as Inv. Banker
-------------------------------------------------------------
The Official Committee of Unsecured Creditors in Residential
Capital LLC's Chapter 11 case seeks the Court's authority to
retain Moelis & Company LLC as investment banker to, among other
things, assist it in conducting a business and financial analysis
of the Debtors and assist it in reviewing any proposals for any
restructuring.
Moelis will be paid a $225,000 non-refundable cash fee per month
and, upon the consummation of any restructuring, a $7,750,000
non-refundable cash fee. The Restructuring Fee would be offset
by 50% of the aggregate Monthly Fees actually paid by the Debtors
in cash, commencing with the tenth full Monthly Fee.
Moelis will also be reimbursed for any necessary out-of-pocket
expenses. As part of the overall compensation payable to Moelis,
the Committee has agreed to certain indemnification, contribution
and reimbursement obligations.
Jared J. Dermont, a managing director of Moelis & Company LLC,
assures the Court that his firm is a "disinterested person" as
the term is defined under Section 101(14) of the Bankruptcy Code
and does not represent any interest adverse to the Committee, the
Debtors and their estates.
About Residential Capital
Residential Capital LLC, the unprofitable mortgage subsidiary of
Ally Financial Inc., filed for bankruptcy protection (Bankr.
S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012.
Neither Ally Financial nor Ally Bank is included in the bankruptcy
filings.
ResCap, one of the country's largest mortgage originators and
servicers, was sent to Chapter 11 with 50 subsidiaries amid
"continuing industry challenges, rising litigation costs and
claims, and regulatory uncertainty," according to a company
statement.
ResCap disclosed $15.68 billion in assets and $15.28 billion in
liabilities as of March 31, 2012.
ResCap is selling its mortgage origination and servicing
businesses to Nationstar Mortgage LLC, and its legacy portfolio,
consisting mainly of mortgage loans and other residual financial
assets, to Ally Financial. Together, the asset sales are expected
to generate approximately $4 billion in proceeds.
Centerview Partners LLC and FTI Consulting are acting as financial
advisers to ResCap. Morrison & Foerster LLP is acting as legal
adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is
the conflicts counsel. Rubenstein Associates, Inc., is the public
relations consultants to the Company in the Chapter 11 case.
Morrison Cohen LLP is advising ResCap's independent directors.
Kurtzman Carson Consultants LLP is the claims and notice agent.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves
as counsel to Ally Financial.
Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
RG STEEL: Court Approves Employment of Direct Fee as Fee Examiner
-----------------------------------------------------------------
The Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware authorized WP Steel Venture LLC, et al., to
employ Direct Fee review LLC as fee examiner.
The fee examiner will, among other things:
-- review monthly fee applications, interim fee applications
and final fee applications filed by each applicant in the
Chapter 11 cases, along with the fee detail related thereto;
-- during the course of its review of an application, consult,
as it deems appropriate, with each applicant concerning the
application; and
-- serve each final report on counsel for the Debtors, counsel
for the Committee, the U.S. Trustee and each applicant whose
fees and expenses are addressed in the final report.
The order will apply to all professionals in the Chapter 11 cases
requesting compensation and reimbursement of expenses for services
rendered.
The Court also ordered that the fee examiner will be available for
deposition and cross-examination by the Debtors, the Committee and
the U.S. Trustee and other interested parties.
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.
An official committee of unsecured creditors has been appointed in
the case. Kramer Levin Naftalis & Frankel LLP represents the
Committee. Huron Consulting Services LLC serves as its financial
advisor.
ROBERT LUPO: Jacobs Allowed $23K Unsecured Claim, No Admin Claim
----------------------------------------------------------------
Bankruptcy Judge Joan N. Feeney allowed Lisa Jacobs, who worked as
a salesperson and property manager for the real estate properties
of Robert Lupo, a prepetition unsecured of $23,701 in Mr. Lupo's
bankruptcy estate. The Court denied Ms. Jacobs' request for
payment of any sums as administrative expenses of the Chapter 11
bankruptcy estate. Ms. Jacobs filed a proof of claim for
$74,191.60 on account of her services before and during the
bankruptcy. The claim also includes damages for gender
discrimination and sexual harassment (still under investigation).
The Chapter 7 trustee liquidating Mr. Lupo's estate objected.
A copy of the Court's July 23, 2012 Memorandum is available at
http://is.gd/lCJx5xfrom Leagle.com.
About Robert N. Lupo
Weston, Massachusetts-based Robert N. Lupo filed for Chapter 11
bankruptcy protection on December 10, 2009 (Bankr. D. Mass. Case
No. 09-21945). Andrew G. Lizotte, Esq., at Hanify & King, P. C.,
assists the Debtor in his restructuring effort. The Debtor
estimated $10 million to $50 million in assets and $1 million to
$10 million in liabilities.
The Court on Nov. 15, 2010, denied Mr. Lupo's emergency motion to
reconsider a prior order converting his case to Chapter 7
effective Sept. 18, 2010. This was the Debtor's third attempt to
vacate the Court's conversion of the case to Chapter 7.
As reported by the Troubled Company Reporter on Feb. 8, 2011,
Judge Feeney denied the request of Ms. Jacobs to remove Joseph B.
Collins as Chapter 7 Trustee and install herself as Trustee.
Based on the report of the U.S. Trustee, as amended, Ms. Jacobs
did not have sufficient eligible votes to be elected Chapter 7
Trustee.
RYAN INTERNATIONAL: Court Sets Oct. 5 as Claims Bar Date
--------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
has established Oct. 5, 2012, as the last day for creditors to
file proofs of claim in the Chapter 11 case of Ryan International
Airlines, Inc. Meanwhile, government entities have until Jan. 6,
2013, to file proofs of claim.
About Ryan International
Ryan International Airlines, Inc., filed for Chapter 11 protection
(Bankr. N.D. Ill. Case No. 12-80802) in its hometown in Rockford,
Illinois, on March 6, 2012. Ryan International, which filed for
bankruptcy along with 10 affiliates, estimated assets and debts of
up to $100 million.
Ryan and its affiliates -- http://www.flyryan.com/-- provide
commercial air charter services, to a diverse mix of customers
including U.S., Canadian and British military entities, the
Department of Homeland Security, the U.S. Marwill Service,
leisure travelers, professional and college sports teams and an ad
hoc charter services. Ryan has 460 employees, with the cockpit
crew, flight attendants and dispatchers are represented by labor
unions.
Judge Manuel Barbosa presides over the case. Thomas J. Lester,
Esq., at Hinshaw & Culbertson LLP, serves as the Debtors' counsel.
Silverman Consulting serves as financial advisor. The petition
was signed by Mark A. Robertson, executive vice president.
INTRUST Bank, the prepetition lender owed $53.2 million, is
represented by Thomas P. Sandquist, Esq., of WilliamsMcCarthy LLP;
and Edward J. Nazar, Esq., at Redmond & Nazar LLP.
The Bankruptcy Court later dismissed the Chapter 11 proceeding of
Ryan 763K, a debtor-affiliate of Ryan International.
RYAN INTERNATIONAL: DIP Financing Extended Until Sept. 30
---------------------------------------------------------
Ryan International Airlines, Inc., et al., obtained approval from
the Hon. Manuel Barbosa of the U.S. Bankruptcy Court for the
Northern District of Illinois to extend the financing period
authorized by the final order authorizing post-petition financing
to Sept. 30, 2012, 11:59 p.m. CDT.
A copy of the budget is available for free at:
http://bankrupt.com/misc/RYAN_INTERNATIONAL_finalbudget.pdf
As reported by the Troubled Company Reporter on March 30, 2012,
the Debtors obtained final authority to up to $4.5 million under a
revolving advance note from INTRUST Bank N.A., the Debtor's
prepetition lender. The DIP Facility was set to mature no later
than July 9, 2012. The DIP loan bears interest at 7% per annum.
A loan origination fee of 0.005% of the principal amount of DIP
Facility will also be charged. The DIP Lender will also be
entitled to reimbursement of attorney's fees of not more than
$50,000.
As of the petition date, INTRUST Bank is owed $53.2 million under
a prepetition credit facility. The debt is secured by liens on
the Debtors' assets.
About Ryan International
Ryan International Airlines, Inc., filed for Chapter 11 protection
(Bankr. N.D. Ill. Case No. 12-80802) in its hometown in Rockford,
Illinois, on March 6, 2012. Ryan International, which filed for
bankruptcy along with 10 affiliates, estimated assets and debts of
up to $100 million.
Ryan and its affiliates -- http://www.flyryan.com/-- provide
commercial air charter services, to a diverse mix of customers
including U.S., Canadian and British military entities, the
Department of Homeland Security, the U.S. Marwill Service,
leisure travelers, professional and college sports teams and an ad
hoc charter services. Ryan has 460 employees, with the cockpit
crew, flight attendants and dispatchers are represented by labor
unions.
Judge Manuel Barbosa presides over the case. Thomas J. Lester,
Esq., at Hinshaw & Culbertson LLP, serves as the Debtors' counsel.
Silverman Consulting serves as financial advisor. The petition
was signed by Mark A. Robertson, executive vice president.
INTRUST Bank, the prepetition lender owed $53.2 million, is
represented by Thomas P. Sandquist, Esq., of WilliamsMcCarthy LLP;
and Edward J. Nazar, Esq., at Redmond & Nazar LLP.
The Bankruptcy Court later dismissed the Chapter 11 proceeding of
Ryan 763K, a debtor-affiliate of Ryan International.
SAN BERNARDINO, CA: To Defer $6.4 Million in Bond Payments
----------------------------------------------------------
Carla Main, substituting for Bloomberg News bankruptcy columnist
Bill Rochelle, reports that San Bernardino, California, will defer
paying $3.4 million in pension bonds and $2.2 million toward
retiree health care to tide it over before seeking court
protection from creditors.
According to the report, San Bernardino suspended a total of
$6.4 million in payments under an emergency budget adopted July 24
in a unanimous City Council vote.
"These measures are intended to enable the city to meet its
obligations over a three-month period and will not result in a
sustainable, balanced budget," interim City Manager Andrea Travis-
Miller and Finance Director Jason Simpson said in a memo to the
council recommending approval, according to a report by
Bloomberg's James Nash.
According to Bankruptcy Law360, the City Council voted 7-0 in
favor of the measure, which will allow San Bernardino to save
about $11.5 million in July, August and September. In particular,
the council voted to freeze hiring for vacant jobs and defer $3.4
million in pension bond payments and about $1.7 million.
The city will need to cut long-term expenses by 30% to stay
solvent, she said.
About San Bernardino
The city council of San Bernardino, California, voted on July 10,
2012, to file for bankruptcy. The move lets San Bernardino bypass
state-required mediation with creditors and proceed directly to
U.S. Bankruptcy Court.
The decision by the leaders of San Bernardino, a city of about
210,000 residents approximately 65 miles (104 km) east of Los
Angeles, followed a report by city staff that projected city
spending would exceed revenue by $45 million in the current fiscal
year. Revenues have dropped 9.8 percent since their peak in 2008.
If the city seeks bankruptcy protection, it would join
California's Stockton, an agricultural center of 292,000 east of
San Francisco, and Mammoth Lakes, a mountain resort town of 8,200
south of Yosemite National Park.
SEA TRAIL: Court OKs Cox & Watts as Atty. for Limited Work
----------------------------------------------------------
The Hon. Stephani W. Humrickhouse of the U.S. Bankruptcy Court for
the Eastern District of North Carolina finally approved Sea Trail
Corporation's second application to employ S. Denise Watts and the
Law Firm of Cox & Watts PLLC, as special counsel.
Last year, the Court denied the Debtor's request to employ Cox &
Watts as the Debtor's special counsel after objections were filed
by Waccamaw Bank and the Bankruptcy Administrator.
Ms. Watts has represented the Debtor since 2006 in various legal
matters, and has acted as general counsel for the Debtor. Her
representation of the Debtor included performing services for the
Debtor's resort division, real estate division, corporate
division, and golf division. From 2006 through May 2007, Ms.
Watts represented the Debtor while working with Cynthia D. Smith,
P.C. In May 2007, the Watts Law Offices, PC, opened and merged
with Cox Law in 2009 to form Cox & Watts PLLC. At the time of the
filing of the petition, the Debtor owed the Law Firm $123,208.47
for prepetition services.
The Court has allowed the Debtor to employ the Law Firm as special
counsel to provide these services:
a. preparation of all necessary documentation in connection
with any individual lot sale and real estate transaction
which the Debtor, as seller, is required to provide in
order to close the transaction, like deeds, release
deeds, or other similar documents, as well as performing
any title searches which may be necessary in order to
prepare the same. The Law Firm will not provide any
services related to obtaining court approval of the
contract(s) to the extent that the approval is required.
To date, the Law Firm has not provided any post-petition
services which would fall within this category of
services to be provided; and
b. advising the Debtor with regard to any employment law
issues regarding a layoff or placing employees on
reduced hours or reduced wages.
The Court ruled that the Debtor's request to employ the Law Firm
is denied as to all other categories and services set forth in the
Debtor's second application, and the Law Firm is not authorized to
be employed to perform those services.
The Law Firm will no longer provide services to the Debtor post-
petition in its previous role as general counsel. The Law Firm
will no longer provide general services like reviewing all
contracts with vendors, professionals, agents, or other entities,
except for those related to the rental program. The Law Firm will
also no longer perform legal services as they relate to the golf
division. The Law Firm will also no longer provide general legal
services to the Debtor as they relate to the corporate division
and the real estate division. The Law Firm understands that the
Debtor is represented by Stubbs & Perdue, P.A., in its Chapter 11
case, and will not handle any matters related to the Chapter 11
case.
The Law Firm is willing to be compensated by the Debtor for post-
petition services on an hourly rate basis of $175, and understands
the payment of these services is made after application with the
Court pursuant to the Bankruptcy Administrator's guidelines,
notice to creditors and parties in interest and pursuant to orders
of the Court, nunc pro tunc, from the date of the filing of the
bankruptcy petition, Sept. 27, 2011.
S. Denise Watts, Esq., a member at Cox & Watts, attested to the
Court that the Law Firm is a "disinterested person" as that term
is defined Section 101(14) of the Bankruptcy Code.
About Sea Trail Corporation
Sunset Beach, North Carolina-based, Sea Trail Corporation operates
the Sea Trail Golf Resort and Conference Center. The Debtor's
business operations are comprise of three operating divisions,
including the golf division, the convention and resort division,
and the real estate division.
Sea Trail Corporation filed a Chapter 11 petition (Bankr. E.D.N.C.
Case No. 11-07370) on Sept. 27, 2011, in Wilson, North Carolina.
The Debtor reported $34,222,281 in assets and $22,174,201 in
liabilities as of the Chapter 11 filing. Stubbs & Perdue P.A. is
the Debtors' attorney. McIntyre, Paradis, Wood & Company CPA's
PLLC is the Debtor's accountants. The Finley Group, Inc., is the
Debtor's financial consultant.
Sea Trail Corporation's official committee of unsecured creditors
retained J.M. Cook and his firm, J.M. Cook, P.A., as counsel.
SEA TRAIL: Gets Court's Nod to Hire Marcus & Millichap as Broker
----------------------------------------------------------------
Sea Trail Corporation sought and obtained permission from the Hon.
Stephani W. Humrickhouse of the U.S. Bankruptcy Court for the
Eastern District of North Carolina to employ Steven M. Ekovich of
Marcus & Millichap Real Estate Investment Services as broker, to
aid the Debtor in the sale of the Debtor's property.
M&M will list for sale all of the real and personal property of
the Debtor, except a property known as the "Carve Out Property".
M&M will agree to reduce its fee 20% if the buyers are well known
to M&M and 40% if they are not known to M&M.
Price Fee for Service
----- ---------------
$$5.1 - $10MM 4.0% if M&M sells the property,
5% if another agent sells it
$10+ 3.75% if M&M sells the property,
4.75% if another agent sells it
A copy of the representation agreement is available for free at:
http://bankrupt.com/misc/SEA_TRAIL_brokerrepagreement.pdf
Mr. Ekovich, a broker at M&M, attested to the Court that the Law
Firm is a "disinterested person" as that term is defined Section
101(14) of the Bankruptcy Code.
About Sea Trail Corporation
Sunset Beach, North Carolina-based, Sea Trail Corporation operates
the Sea Trail Golf Resort and Conference Center. The Debtor's
business operations are comprise of three operating divisions,
including the golf division, the convention and resort division,
and the real estate division.
Sea Trail Corporation filed a Chapter 11 petition (Bankr. E.D.N.C.
Case No. 11-07370) on Sept. 27, 2011, in Wilson, North Carolina.
The Debtor reported $34,222,281 in assets and $22,174,201 in
liabilities as of the Chapter 11 filing. Stubbs & Perdue P.A. is
the Debtors' attorney. McIntyre, Paradis, Wood & Company CPA's
PLLC is the Debtor's accountants. The Finley Group, Inc., is the
Debtor's financial consultant.
Sea Trail Corporation's official committee of unsecured creditors
retained J.M. Cook and his firm, J.M. Cook, P.A., as counsel.
SEA TRAIL: Has OK to Hire Christovich as Management Consultant
--------------------------------------------------------------
Sea Trail Corporation sought and obtained authorization from the
Hon. Stephani W. Humrickhouse of the U.S. Bankruptcy Court for the
Eastern District of North Carolina to employ Christovich and
Associates, LLC, as management consultant to manage certain
aspects of the Debtor's golf operations, to aid the Debtor in
increasing the efficiency of its operations, and to identify
opportunities for enhancing the value of the Debtor's assets for
sale.
Christovich will, among other things:
a. provide interim management support to assist in day-to-
day operational and management needs of the Debtor,
including conducting weekly staff meetings, and
prioritizing and developing an implementation plan for
all operating and physical tasks and needs;
b. complete a full assessment of the operations, facilities,
organizational structure, work environment, financial
history, and marketing efforts to provide the Debtor with
improved information relative to improvements that need
to be made prior to a sale and that a likely buyer would
require as a part of a possible sale transaction; and
c. work with the Debtor and the broker to prepare due
diligence information, and provide support to the Debtor
and broker during the sale process.
Christovich will be paid a flat fee of $12,500 per month for
management and consulting services. Due to the nature and
complexity of the project needs, the hourly rates of $250 per
billable hour for senior management time and $150 per hour for
support personnel would be a significantly higher cost to the
project than the fixed fee arrangement. The Debtor will engage
Bill Shiles, as interim general manager at the rate of $2,400 per
week.
A copy of the consulting service agreement is available for free
at http://is.gd/F0ZsAQ
Greg Christovich, president and CEO of Christovich and Associates,
attested to the Court that the Law Firm is a "disinterested
person" as that term is defined Section 101(14) of the Bankruptcy
Code.
About Sea Trail Corporation
Sunset Beach, North Carolina-based, Sea Trail Corporation operates
the Sea Trail Golf Resort and Conference Center. The Debtor's
business operations are comprise of three operating divisions,
including the golf division, the convention and resort division,
and the real estate division.
Sea Trail Corporation filed a Chapter 11 petition (Bankr. E.D.N.C.
Case No. 11-07370) on Sept. 27, 2011, in Wilson, North Carolina.
The Debtor reported $34,222,281 in assets and $22,174,201 in
liabilities as of the Chapter 11 filing. Stubbs & Perdue P.A. is
the Debtors' attorney. McIntyre, Paradis, Wood & Company CPA's
PLLC is the Debtor's accountants. The Finley Group, Inc., is the
Debtor's financial consultant.
Sea Trail Corporation's official committee of unsecured creditors
retained J.M. Cook and his firm, J.M. Cook, P.A., as counsel.
SKINNER ENGINE: 3rd Circ. Confirms Ch. 11 Conversion to Ch. 7
-------------------------------------------------------------
Amanda Bransford at Bankruptcy Law360 reports that the Third
Circuit on Wednesday upheld a bankruptcy court's order converting
Skinner Engine Co.'s Chapter 11 bankruptcy to a Chapter 7 without
first holding a confirmation hearing because its plan, under which
Skinner's insurers would fund numerous asbestos settlements, is
clearly unworkable.
Bankruptcy Law360 relates that the appellate court confirmed that
a bankruptcy court can make the determination to reject a Chapter
11 plan and move onto Chapter 7 without a confirmation hearing
when a plan is "patently unconfirmable" on its face and can't be
fixed,
About Skinner
Skinner Engine Company, Inc., one of Erie, Pa.'s oldest industrial
companies, and American Capital Equipment, Inc., filed for chapter
11 protection (Bankr. W.D. Pa. Case Nos. 01-23987 and 01-23988) in
2001. The Bankruptcy Court denied confirmation of the Companies'
Fifth Amended Plan on May 26, 2009, and the cases will be
converted to Chapter 7 liquidation proceedings.
SMART ONLINE: Terminates Web Services Agreement with URA
--------------------------------------------------------
Smart Online, Inc., on Oct. 11, 2010, entered into a renewal of
the Web Services Agreement with URAssociation, LLC, as part of a
relationship that commenced in early 2007.
On July 13, 2012, the Company delivered to URA a notice of
termination of the Agreement, which termination will become
effective Oct. 11, 2012. The Company has decided to terminate the
Agreement at the contract termination date because it no longer
intends to provide the specialized type of services required by
URA. The Company will not incur any material termination
penalties as a result of its termination of the Agreement.
About Smart Online
Durham, North Carolina-based Smart Online, Inc., develops and
markets a full range of mobile application software products and
services that are delivered via a SaaS model. The Company also
provides Web site and mobile consulting services to not-for-profit
organizations and businesses.
The Company's balance sheet at March 31, 2012, showed
$1.03 million in total assets, $24.89 million in total
liabilities, and a stockholders' deficit of $23.85 million.
Cherry, Bekaert & Holland, L.L.P., in Raleigh, North Carolina,
expressed substantial doubt about Smart Online's ability to
continue as a going concern, following the Company's results for
the fiscal year ended Dec. 31 2011. The independent auditors
noted that the Company has suffered recurring losses from
operations and has a working capital deficiency as of Dec. 31,
2011.
SEARS HOLDINGS: Bruce Johnson to Serve as SHO CEO and President
---------------------------------------------------------------
Bruce Johnson, executive vice president, Off-Mall Businesses, of
Sears Holdings Corporation, agreed to serve as the Chief Executive
Officer and President of Sears Hometown and Outlet Stores, Inc.
As previously reported, Sears Holdings intends to effect the
separation of SHO from Sears Holdings through a rights offering
transaction. Following the separation of SHO from Sears Holdings,
Mr. Johnson will cease being an employee and officer of Sears
Holdings.
The rights offering transaction is subject to the approval of the
Board of Directors of Sears Holdings, as well as approval of the
terms of the rights offering, including the record date,
subscription price, subscription ratio and other terms of the
proposed rights offering.
About Sears
Hoffman Estates, Illinois-based Sears Holdings Corporation
(Nasdaq: SHLD) -- http://www.searsholdings.com/-- is the nation's
fourth largest broadline retailer with more than 4,000 full-line
and specialty retail stores in the United States and Canada.
Sears Holdings operates through its subsidiaries, including Sears,
Roebuck and Co. and Kmart Corporation. Sears Holdings also owns a
94% stake in Sears Canada and an 80.1% stake in Orchard Supply
Hardware. Key proprietary brands include Kenmore, Craftsman and
DieHard, and a broad apparel offering, including such well-known
labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the
Apostrophe and Covington brands. It also has the Country Living
collection, which is offered by Sears and Kmart.
Kmart Corporation and 37 of its U.S. subsidiaries filed voluntary
Chapter 11 petitions (Bankr. N.D. Ill. Lead Case No. 02-02474) on
Jan. 22, 2002. Kmart emerged from chapter 11 protection on May 6,
2003, pursuant to the terms of an Amended Joint Plan of
Reorganization. John Wm. "Jack" Butler, Jr., Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, represented the retailer in its
restructuring efforts. The Company's balance sheet showed
$16,287,000,000 in assets and $10,348,000,000 in debts when it
sought chapter 11 protection. Kmart bought Sears, Roebuck & Co.,
for $11 billion to create the third-largest U.S. retailer, behind
Wal-Mart and Target, and generate $55 billion in annual revenues.
Kmart completed its merger with Sears on March 24, 2005.
The Company's balance sheet at April 28, 2012, showed $21.60
billion in total assets, $17.02 billion in total liabilities and
$4.57 billion in total equity.
Negative Outlook
Standard & Poor's Ratings Services in January 2012 lowered its
corporate credit rating on Hoffman Estates, Ill.-based Sears
Holdings Corp. to 'CCC+' from 'B'. "We removed the rating from
CreditWatch, where we had placed it with negative implications on
Dec. 28, 2011. We are also lowering the short-term and commercial
paper rating to 'C' from 'B-2'. The rating outlook is negative,"
S&P said.
"The corporate credit rating reflects our projection that Sears'
EBITDA will be negative in 2012, given our expectations for
continued sales and margin pressure," said Standard & Poor's
credit analyst Ana Lai. She added, "We further expect that
liquidity could be constrained in 2013 absent a turnaround
or substantial asset sales to fund operating losses."
Moody's Investors Service in January 2012 lowered Sears Holdings
Family and Probability of Default Ratings to B3 from B1.
The outlook remains negative. At the same time Moody's affirmed
Sears' Speculative Grade Liquidity Rating at SGL-2.
The rating action reflects Moody's expectations that Sears will
report a significant operating loss in fiscal 2011. Moody's added
that the rating action also reflects the company's persistent
negative trends in sales, which continue to significantly
underperform peers.
SINCLAIR BROADCAST: To Buy 6 Newport TV Stations for $412.5-Mil.
----------------------------------------------------------------
Sinclair Broadcast Group, Inc., has entered into a definitive
agreement to purchase the broadcast assets of six television
stations owned and operated by Newport Television for $412.5
million. The six stations are located in five markets and reach
3.0% of the U.S. TV households. The transaction is subject to
approval by the Federal Communications Commission and antitrust
clearance. The Company anticipates the closing and funding of the
acquisition to occur no earlier than December 2012, subject to
closing conditions. Upon closing, the Company expects to finance
the $412.5 million purchase price, less a $41.25 million deposit,
through cash on hand along with a bank loan or by accessing the
capital markets.
"In the past year, we have announced the acquisition of 23
television stations, representing the addition of almost $1
billion in assets," commented David Smith, President and CEO of
Sinclair. "The Newport stations acquisition is consistent with
our focus of adding "big four" affiliates in mid-sized markets and
strengthening our in-market positions. Assuming our ability to
create synergistic opportunities and given current market
conditions, we believe the stations will be free cash flow
accretive and add approximately $55.0 to $60.0 million of pro
forma TV operating cash flow, on average, for 2012/2013. We are
excited to add the stations to our portfolio and look forward to
welcoming the Newport employees to the Sinclair family."
The stations to be acquired are:
WKRC (CBS 12) Cincinnati, Ohio (DMA 35)
WOAI (NBC 48) San Antonio, Texas (DMA 36)
WHP (CBS 21) Harrisburg/Lancaster/Lebanon/York, Pennsylvania (DMA
41)
WPMI (NBC 15) and WJTC (IND 45) Mobile, Alabama/Pensacola, Florida
(DMA 60)
KSAS (FOX 26) Wichita/Hutchinson, Kansas (DMA 67)
Sinclair will also acquire Newport's rights under the local
marketing agreements with WLYH (CW 23) in Harrisburg, PA and KMTW
(MNT 35) in Wichita, KS, as well as options to acquire the license
assets.
The Company has also entered into agreements with Deerfield Media,
Inc., to sell Deerfield the license assets of one of Sinclair's
stations in San Antonio (KMYS CW), and Sinclair's station in
Cincinnati (WSTR MY), subject to FOX Television Stations purchase
option with respect to WSTR which expires March 31, 2013, and to
assign Deerfield the right to buy the license assets of WPMI and
WJTC in the Mobile/Pensacola market, after which the Company will
provide sales and other non-programming services to each of these
four stations pursuant to shared services and joint sales
agreements.
Newport also broadcasts several secondary channels, including CW
and MNT, among others, which will also be acquired as part of this
transaction.
Separately, the Company entered into an agreement to purchase the
assets of Bay Television, Inc. (Bay TV), which owns WTTA-TV (MNT)
in the Tampa/St. Petersburg, Florida market, for $40 million. Bay
TV is owned primarily by our controlling shareholders. Since
1998, Sinclair has operated WTTA pursuant to a local marketing
agreement, which will be terminated upon closing. As this
transaction is between entities under common control, a fairness
opinion was obtained by Sinclair's Board of Directors. The
transaction is expected to close in the fourth quarter of 2012,
subject to approval of the FCC.
About Sinclair Broadcast
Based in Baltimore, Maryland, Sinclair Broadcast Group, Inc.
(Nasdaq: SBGI) -- http://www.sbgi.net/-- one of the largest and
most diversified television broadcasting companies, currently owns
and operates, programs or provides sales services to 58 television
stations in 35 markets. The Company's television group reaches
roughly 22% of U.S. television households and includes FOX,
ABC, CBS, NBC, MNT, and CW affiliates.
The Company said in the Form 10-Q for the quarter ended March 31,
2012, that any insolvency or bankruptcy proceeding relating to
Cunningham, one of its LMA partners, would cause a default and
potential acceleration under a Bank Credit Agreement and could,
potentially, result in Cunningham's rejection of the Company's
seven LMAs with Cunningham, which would negatively affect the
Company's financial condition and results of operations.
The Company's balance sheet at March 31, 2012, showed
$1.77 billion in total assets, $1.85 billion in total liabilities,
and a $87.21 million total deficit.
* * *
As reported by the TCR on Feb. 24, 2011, Standard & Poor's Ratings
Services raised its corporate credit rating on Hunt Valley, Md.-
based TV broadcaster Sinclair Broadcast Group Inc. to 'BB-' from
'B+'. The rating outlook is stable. "The 'BB-' rating on
Sinclair reflects S&P's expectation that the company could keep
its lease-adjusted debt to EBITDA below historical levels
throughout the election cycle, absent a reversal of economic
growth, meaningful debt-financed acquisitions, or significant
shareholder-favoring measures," explained Standard & Poor's credit
analyst Deborah Kinzer.
In September 2010, Moody's raised its ratings for Sinclair
Broadcast and subsidiary Sinclair Television Group, Inc.,
including the Corporate Family Rating and Probability-of-Default
Rating, each to Ba3 from B1, and the ratings for individual debt
instruments. Moody's also assigned a B2 (LGD 5, 87%) rating to
the proposed $250 million issuance of Senior Unsecured Notes due
2018 by STG. The Speculative Grade Liquidity Rating remains
unchanged at SGL-2. The rating outlook is now stable.
SEARCHMEDIA HOLDINGS: Phillip Frost Owns 7.8MM Ordinary Shares
--------------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission Phillip Frost, M.D., and Frost Gamma
Investments Trust disclosed that, as of May 2, 2012, they
beneficially own 7,827,559 ordinary shares, par value $0.0001 per
share, of SearchMedia Holdings Limited, representing 33.77% of the
shares outstanding.
Dr. Frost previously reported beneficial ownership of 5,352,033
ordinary shares representing 22.76% as of Aug. 30, 2011.
A copy of the amended filing is available for free at:
http://is.gd/ggcBy1
About SearchMedia
SearchMedia is a leading nationwide multi-platform media company
and one of the largest operators of integrated outdoor billboard
and in-elevator advertising networks in China. SearchMedia
operates a network of high-impact billboards and one of China's
largest networks of in-elevator advertisement panels in 50 cities
throughout China. Additionally, SearchMedia operates a network of
large-format light boxes in concourses of eleven major subway
lines in Shanghai. SearchMedia's core outdoor billboard and in-
elevator platforms are complemented by its subway advertising
platform, which together enable it to provide a multi-platform,
"one-stop shop" services for its local, national and international
advertising clients.
Marcum Bernstein & Pinchuk LLP, in New York, expressed substantial
doubt about SearchMedia Holdings' ability to continue as a going
concern following the 2010 financial results. The independent
auditors noted that the Company has suffered recurring net losses
from operations and has a working capital deficiency.
Searchmedia Holdings reported a net loss of $13.45 million
in 2011, a net loss of $46.63 million in 2010, and a net loss of
$22.64 million in 2009.
The Company's balance sheet at Dec. 31, 2011, showed $50.45
million in total assets, $63.90 million in total liabilities and a
$13.45 million total shareholders' deficit.
SMF ENERGY: Hires Ahearn Jasco & Company as Audit Accountant
------------------------------------------------------------
SMF Energy Corporation, et al., ask permission from the U.S.
Bankruptcy Court to employ Anthony M. Palermo, CPA, and Ahearn
Jasco & Company to audit the 401k Plan for the years ending
Dec. 31, 2011 and 2012 in compliance with the annual reporting
obligation under the Employee Retirement Income Security Act of
1974.
Mr. Palermo attests that the firm is a "disinterested person" as
the term is defined in Section 101(14) of the Bankruptcy Code.
AJC's hourly rates range from $60 to $390 an hour.
AJC estimates that it will cost approximately $8,500 to perform
the 2011 audit of the 401k Plan. However, if access is not
permitted and AJC is required to re-audit the 2010 statement of
net assets available for the benefits of the 401k Plan, AJC
estimates that its fees for professional services for the 2011
audit would be approximately $9,750.
About SMF Energy
SMF Energy Corporation, a provider of fuel and lubricants for the
trucking, manufacturing and construction industries, and three of
its subsidiaries filed for Chapter 11 bankruptcy (Bankr. S.D. Fla.
Lead Case No. 12-19084) on April 15, 2012. The affiliates are SMF
Services, Inc., H&W Petroleum Company, Inc., and Streicher Realty,
Inc. Fort Lauderdale, Florida-based SMF Energy -- dba Streicher
Mobile Fueling and SMF Generator Fueling Services -- disclosed
$37.0 million in assets and $25.17 million in liabilities as of
Dec. 31, 2011.
SMF sought bankruptcy protection after Wells Fargo Bank, N.A.,
shut off access to a revolving credit loan and declared a default.
The bank is owed $11.2 million, including $8 million on a
revolving credit secured by all assets. SMF Energy disclosed
$16,387,456 in assets and $31,160,009 in liabilities as of the
Chapter 11 filing.
On March 22, 2012, the Company appointed Soneet Kapila of Kapila &
Company, Ft. Lauderdale, Florida, as its chief restructuring
officer.
Judge Raymond B. Ray oversees the case. Lawyers at Genovese
Joblove & Battista, P.A., serves as the Debtors' counsel. Trustee
Services Inc. serves as claims agent. Bayshore Partners, LLC,
serves as their investment banker. The petition was signed by
Soneet R. Kapila, the CRO.
The Debtors tapped Harry Stampler and Stampler Auctions for the
sale and liquidation of the assets of the Debtors located at 200
West Cypress Creek Road, Suite 400, Fort Lauderdale, Florida
through an auction sale scheduled for July 19, 2012, at the
Property.
The Debtors entered an asset purchase agreement, subject to higher
and better offers, with Sun Coast Resources which provides that
Sun Coast would acquire the assets and vehicles outside of Texas
for a total purchase price of $9 million plus the value of the
Companies' inventory that is acquired plus the cure amounts
necessary to assume and assign executory contracts.
Steven R. Turner, the Assistant U.S. Trustee 21, appointed three
members to the Official Committee of Unsecured Creditors. Robert
Paul Charbonneau and the law firm of Ehrenstein Charbonneau
Calderin represents the creditors.
SMF ENERGY: Hires Holland & Knight as Securities Counsel
--------------------------------------------------------
SMF Energy Corporation et al., ask for permission from the U.S.
Bankruptcy Court to employ Mitchell E. Herr, Esq. and Holland &
Knight to represent the Debtors as special securities counsel in
their Chapter 11 cases.
Soneet R. Kapila attests that the firm is a "disinterested person"
as the term is defined in Section 101(14) of the Bankruptcy Code.
The firm's hourly rates are:
Professional Rates
------------ -----
Rodney H. Bell $685
Mitchell E. Herr $650
Laurie L. Green $560
About SMF Energy
SMF Energy Corporation, a provider of fuel and lubricants for the
trucking, manufacturing and construction industries, and three of
its subsidiaries filed for Chapter 11 bankruptcy (Bankr. S.D. Fla.
Lead Case No. 12-19084) on April 15, 2012. The affiliates are SMF
Services, Inc., H&W Petroleum Company, Inc., and Streicher Realty,
Inc. Fort Lauderdale, Florida-based SMF Energy -- dba Streicher
Mobile Fueling and SMF Generator Fueling Services -- disclosed
$37.0 million in assets and $25.17 million in liabilities as of
Dec. 31, 2011.
SMF sought bankruptcy protection after Wells Fargo Bank, N.A.,
shut off access to a revolving credit loan and declared a default.
The bank is owed $11.2 million, including $8 million on a
revolving credit secured by all assets. SMF Energy disclosed
$16,387,456 in assets and $31,160,009 in liabilities as of the
Chapter 11 filing.
On March 22, 2012, the Company appointed Soneet Kapila of Kapila &
Company, Ft. Lauderdale, Florida, as its chief restructuring
officer.
Judge Raymond B. Ray oversees the case. Lawyers at Genovese
Joblove & Battista, P.A., serves as the Debtors' counsel. Trustee
Services Inc. serves as claims agent. Bayshore Partners, LLC,
serves as their investment banker. The petition was signed by
Soneet R. Kapila, the CRO.
The Debtors tapped Harry Stampler and Stampler Auctions for the
sale and liquidation of the assets of the Debtors located at 200
West Cypress Creek Road, Suite 400, Fort Lauderdale, Florida
through an auction sale scheduled for July 19, 2012, at the
Property.
The Debtors entered an asset purchase agreement, subject to higher
and better offers, with Sun Coast Resources which provides that
Sun Coast would acquire the assets and vehicles outside of Texas
for a total purchase price of $9 million plus the value of the
Companies' inventory that is acquired plus the cure amounts
necessary to assume and assign executory contracts.
Steven R. Turner, the Assistant U.S. Trustee 21, appointed three
members to the Official Committee of Unsecured Creditors. Robert
Paul Charbonneau and the law firm of Ehrenstein Charbonneau
Calderin represents the creditors.
T3 MOTION: Founder Ki Nam Named CEO for R3 Motion
-------------------------------------------------
T3 Motion, Inc., announced that Ki Nam, visionary founder of T3
Motion, will immediately assume the role of Chief Executive
Officer of R3 Motion Inc., a wholly owned subsidiary of T3 Motion
Inc., that will focus on launching the R3 Motion consumer vehicle.
Mr. Nam and R3 Motion will seek joint venture partners for this
new endeavor to bring the R3 into production. R3 Motion will have
an exclusive licensing arrangement with T3 Motion for all
intellectual property related to the design and production of the
R3 Motion consumer vehicle.
In addition, R3 Motion will become the exclusive marketing agent
of T3 Motion products in the Republic of Korea. In order to focus
his efforts on this endeavor, Mr. Nam has resigned as an officer
and Chairman of T3 Motion. He will remain as a director and a
valued advisor.
"We are confident that Ki Nam's unique vision and entrepreneurial
expertise will ensure great success with R3 Motion. T3 Motion
will continue to focus on expanding our patented award-winning
products to commercial markets and we look forward to faster
growth and improving financial performance in the months ahead,"
said Rod Keller, Chief Executive Officer of T3 Motion, Inc.
A complete copy of the Form 8-K is available for free at:
http://is.gd/PkGaZ4
About T3 Motion
Costa Mesa, Calif.-based T3 Motion, Inc., develops and
manufactures T3 Series vehicles, which are electric three-wheel
stand-up vehicles that are directly targeted to the public safety
and private security markets.
After auditing the 2011 results, KMJ Corbin & Company LLP, in
Costa Mesa, California, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has incurred significant operating
losses and has had negative cash flows from operations since
inception, and at Dec. 31, 2011, has an accumulated deficit of
$54.9 million.
The Company reported a net loss of $5.50 million in 2011, compared
with a net loss of $8.32 million in 2010.
The Company's balance sheet at March 31, 2012, showed $3.37
million in total assets, $2.47 million in total liabilities and
$903,439 in total stockholders' equity.
TELETOUCH COMMUNICATIONS: Stratford Equity Stake Hiked to 36.1%
---------------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Stratford Capital Partners, L.P., and its
affiliates disclosed that, as of July 16, 2012, they beneficially
own 17,610,000 shares of common stock of Teletouch Communications,
Inc., representing 36.1% of the shares outstanding.
Stratford Capital previously reported beneficial ownership of
2,610,000 common shares or a 5.4% equity stake as of Aug. 11,
2011.
A copy of the amended filing is available for free at:
http://is.gd/tw7Btb
About Teletouch
Teletouch Communications, Inc., offers a comprehensive suite of
wireless telecommunications solutions, including cellular, two-way
radio, GPS-telemetry and wireless messaging. Teletouch is an
authorized provider of AT&T (NYSE: T) products and services
(voice, data and entertainment) to consumers, businesses and
government agencies, as well as an operator of its own two-way
radio network in Texas. Recently, Teletouch entered into national
agency and distribution agreements with Sprint (NYSE: S) and
Clearwire (NASDAQ: CLWR), providers of advanced 4G cellular
network services. Teletouch operates a chain of 26 retail and
agent stores under the "Teletouch" and "Hawk Electronics" brands,
in conjunction with its direct sales force, customer care (call)
centers and various retail eCommerce Web sites including:
http://www.hawkelectronics.com/and http://www.hawkexpress.com/
Through its wholly-owned subsidiary, Progressive Concepts, Inc.,
Teletouch operates a national distribution business, PCI
Wholesale, primarily serving large cellular carrier agents and
rural carriers, as well as auto dealers and smaller consumer
electronics retailers, with product sales and support available
through http://www.pciwholesale.com/and
http://www.pcidropship.com/among other B2B oriented Web sites.
As reported by the TCR on Sept. 1, 2011, BDO USA, LLP, in Houston,
Texas, noted that the Company has increasing working capital
deficits, significant current debt service obligations, a net
capital deficiency along with current and predicted net operating
losses and negative cash flows which raise substantial doubt about
its ability to continue as a going concern.
The Company's balance sheet at Feb. 29, 2012, showed
$18.35 million in total assets, $24.81 million in total
liabilities, and a $6.45 million total shareholders' deficit.
TOKLAN OIL: Files for Chapter 11 Bankruptcy Protection
------------------------------------------------------
Rod Walton at Tulsa World reports that Toklan Oil & Gas Corp.,
which has filed for Chapter 11 bankruptcy protection, is a victim
of West Coast banking and real estate collapse dating back to
2008.
Toklan is headed by Pat Cobb, company president and a well-known
figure in the Oklahoma energy sector.
"This bankruptcy had nothing to do with Pat Cobb's ability in the
oil and gas business," the report quotes Tulsa attorney Neal
Tomlins, Esq., as saying. "His family has been successful in the
business for decades."
The report says Mr. Cobb's company was brought down due to its
connection with PHR LLC and Oresund Capital, which held interests
in Northgate Crossing LLC, heading up a planned residential and
commercial development in the Coachella Valley area of
southeastern California, Mr. Tomlins said. Toklan owned interest
in and Cobb was a managing member of PHR, which in turn had a 50%
stake in Northgate Crossing.
The report notes La Jolla Bank FSB provided financing for the
Northgate project, but the bank failed in early 2010. OneWest
Bank bought La Jolla's assets, which included Toklan's $26.27
million guarantee of debt related to the project.
"OneWest refused to fund the remaining obligations for Northgate,
which ultimately caused Northgate to file bankruptcy in
California," the report quotes a court motion asking a judge to
let Toklan use cash collateral to stay in operation during
Chapter 11. "Debtor had guaranteed repayment of the debt owed to
La Jolla Bank."
The report says, on April 6, a California judge ordered the debtor
to pay the $26.27 million guarantee. One month later, Toklan sold
a majority of its oil properties for $5.6 million, but it held on
to its natural gas assets. Toklan also owes Bank of Oklahoma
about $20 million, the report notes
Tulsa-based oil and gas company NBI Services Inc. has emerged as a
stalking-horse bidder to buy Toklan once it emerges from Chapter
11 bankruptcy. The purchase amount was listed at $6.078 million in
court records.
Toklan Oil & Gas was started as Duncan Corp. in October 1960 and
also was named Cobb Oil and Gas Co. The Cobb family owns the
company, which employs 10 people and generated $7.7 million in
revenue last year from its wells and properties, which are mainly
in Oklahoma and Texas.
TRAMCON INC: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Tramcon, Inc.
aka Paradise Point
9617 Estate Thomas
St. Thomas, VI 00802
Bankruptcy Case No.: 12-30011
Chapter 11 Petition Date: July 24, 2012
Court: United States Bankruptcy Court
District Court of the Virgin Islands
Bankruptcy Division (St. Thomas)
Judge: Mary F. Walrath
Debtor's Counsel: Benjamin A. Currence, Esq.
BENJAMIN A. CURRENCE P. C.
P.O. Box 6143
St. Thomas, VI 00804-6143
Tel: (340) 775-3434
E-mail: currence@surfvi.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $100,001 to $500,000
A copy of the Company's list of its 20 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/vib12-30011.pdf
The petition was signed by Vinod Dadlani, chief executive officer.
UNITED GILSONITE: Plan Filing Deadline Extended to Aug. 27
----------------------------------------------------------
At the behest of United Gilsonite Laboratories, the U.S.
Bankruptcy Court extended the Debtor's exclusive right to file a
chapter 11 plan through Aug. 27, 2012, and exclusive right to
solicit acceptances on that plan through Oct. 25, 2012. This was
the third extension request filed by the Debtor.
About United Gilsonite
Scranton, Pennsylvania-based United Gilsonite Laboratories is a
small family-owned corporation engaged in the manufacturing of
wood and masonry finishing products and paint sundries. United
Gilsonite filed for Chapter 11 bankruptcy protection (Bankr. M.D.
Pa. Case No. 11-02032) on March 23, 2011.
Judge Robert N. Opel, II, oversees the case. Mark B. Conlan,
Esq., at Gibbons P.C., serves as the Debtor's bankruptcy counsel.
Joseph M. Alu & Associates P.C. serves as accountants. K&L Gates
LLP serves as special insurance counsel. Garden City Group is the
claims and notice agent. The Company disclosed $21,084,962 in
assets and $3,008,688 in liabilities as of the Chapter 11 filing.
Roberta A. DeAngelis, United States Trustee for Region 2,
appointed five creditors to serve on an Official Committee of
Unsecured Creditors. Montgomery, McCracken, Walker & Rhoads, LLP,
represents the Committee. The Committee retained Legal Analysis
Systems, Inc., as its consultant on the valuation of asbestos
liabilities.
James L. Patton, Jr., has been appointed as legal representative
for future holders of personal injury or wrongful death claims
based on alleged exposure to asbestos and asbestos-containing
products. He retained Young Conaway Stargatt & Taylor LLP as his
attorneys.
Charter Oak Financial Consultants LLC serves as financial advisor
to the Unsecured Creditors Committee and the Future Claimants
Representative.
WALTER INVESTMENT: Moody's Affirms 'B1' CFR; Outlook Stable
-----------------------------------------------------------
Moody's Investors Service affirmed Walter Investment Management
Corp.'s B1 Corporate Family Rating (CFR), B1 Senior Secured First
Lien Term Loan, and B3 Senior Secured Second Lien Term Loan
ratings, all with stable outlooks.
Rating Rationale
Walter Investment's ratings benefit from its growing position in
the U.S. mortgage third party servicing market - a high-margin,
recurring fee-based business model with stable free cash flow
generation as well as the company's "asset-light" servicing model
resulting in a much smaller balance sheet from lower servicer
advance obligations and servicer rights versus other residential
mortgage servicers.
The ratings are constrained by Walter Investment's high level of
encumbered assets and the short average maturity of the company's
servicer advance securitizations which limit the company's
financial flexibility. The ratings are also constrained by the
fact that virtually all new servicing volume is obtained through
opportunistic bulk acquisitions and that the company is a monoline
financial services company concentrating on the residential
mortgage servicing market.
Versus other B1 rated mortgage servicers, Walter Investment's high
leverage and negative tangible equity is a credit weakness. This
weakness resulted primarily from its acquisition of Green Tree in
2011 which was primarily funded by debt. In addition, a
significant portion of the company's equity is comprised of the
residual interest in company-originated non-prime securitizations.
Although the performance of these securitizations has been very
solid through the credit crisis, the company's success is subject
to the strength of the third party servicing business as well as
the continued strong performance of the company's non-prime
mortgages.
The rating outlook is stable. Over the last eighteen months, the
company, along with several other non-prime specialty servicers,
has grown at a rapid pace. The rapid growth poses operational
integration risks for the mortgage servicers. The stable outlook
reflects Moody's expectation that Walter Investment will continue
to grow its third party servicing business at a rapid, albeit
manageable, pace while continuing to maintain its solid
performance. In addition, given the company's high leverage and
negative tangible equity, particular focus will be on the
company's ability to continue to maintain its performance
trajectory and meet or exceed its financial projections, in
particular with regard to the company's EBITDA, amortization of
the term loans, tangible net worth, and net income targets.
The B3 Senior Secured rating on the Second Lien Term Loan reflects
the debt instrument's junior position in Walter Investment's debt
capital structure and the amount of otherwise unencumbered assets.
The principal methodology used in this rating was the Finance
Company Global Rating Methodology published March 2012.
Walter Investment, based in Tampa, Florida, is an asset manager,
mortgage portfolio owner and mortgage servicer specializing in
less-than-prime, non-conforming and other credit challenged
mortgage assets.
WATERLOO GARDENS: Eyes Ch.11 Exit Later This Year or Early 2013
---------------------------------------------------------------
The Daily Local News reports Jerry Monagle, chief financial
officer of Waterloo Gardens, said he anticipates the company will
come out of bankruptcy later this year or early 2013.
According to the report, Waterloo Gardens filed for Chapter 11
bankruptcy protection last month after an announcement it would
shut down its Devon location. Management had originally planned
to keep the Devon location open through the end of the year, and
possibly to spring of 2013. Instead, with the bankruptcy filing
completed June 26, the closing of the Devon garden center was
moved up to July 15. The garden center is currently moving its
inventory and some of its Devon staff to Waterloo's 50-acre Exton,
Pa., location at 200 N. Whitford Road.
According to the report, the garden center and Waterloo
Landscaping Inc., took a beating in the sour economy and had to
deal with pressures from its bank. The report notes the bank
problems centered around the 2007 purchase of a building in
Warminster. Waterloo opened a garden center there, the same year
it opened a location in Wilmington. The Warminster store closed
in 2008 when the economy really started to tank, Mr. Monagle said.
The Wilmington location closed three years later.
The report adds the bankruptcy and subsequent closing of the Devon
location comes on the heels of the October 2011 passing of Linda
LeBoutillier, who owned and operated the company together with her
husband, Bo, after they purchased it from her parents in 1972.
The report says Susan LeBoutillier, another family member, ran the
company's landscaping business for a number of years. She has
left the company and now own and operates LeBeau Landscapes LLC.
Waterloo Gardens, Inc., and Waterloo Landscaping, Inc., sought
Chapter 11 protection (Bankr. E. D. Penn. Case Nos. 12-16080 and
Case No. 12-16081) on June 26, 2012 in Philadelphia, Pennsylvania.
Albert A. Ciardi, III, Esq., and Jennifer E. Cranston, Esq., at
Ciardi Ciardi & Astin, P.C., serves as counsel to the Debtors.
Waterloo Gardens estimated up to $10 million in assets and up to
$50 million in debts.
WAVE2WAVE COMMS: To Amend Plan; In Talks for Exit Funding
---------------------------------------------------------
Wave2Wave Communications, Inc., will file revisions to its
Chapter 11 plan that would resolve objections by the U.S.
Securities and Exchange Commission and is in talks with the
existing lender for funding that would fund the company's
bankruptcy exit, the Debtor's lawyer told the Troubled Company
Reporter.
The Debtor is scheduled to seek approval of the disclosure
statement explaining their Chapter 11 Plan at a hearing on
Aug. 16, 2012 at 10:00 a.m., unless the Debtors seek another
adjournment of the hearing.
The hearing was originally scheduled May 17, 2012, but has been
adjourned a number of times. According to the Debtor's counsel,
Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman &
Leonard, P.A., the Debtors had delayed the hearing to "finalize
exit financing, business plan and projections."
The Debtors in April submitted to the bankruptcy court a Plan that
contemplates two alternative transactions. Under the first
transaction, the Debtors will consummate a reverse merger with a
soon to be identified public company, simultaneously with the
raising of capital/indebtedness to satisfy the Debtors'
obligations under 11 U.S.C. Sec. 1129. If the reverse merger
conditions are not satisfied, the Debtors will enter into an
alternative transaction pursuant to which, among other items, the
DIP Loan will be converted into a term loan in exchange for 70% of
the outstanding equity of Reorganized Wave2Wave.
Both transactions require the Debtors to raise additional
capital/indebtedness to consummate either of those transactions
for which the Debtors currently have no commitment to raise
additional capital/indebtedness, the Debtors said in the April
filing.
The Securities and Exchange Commission in early May submitted an
objection to the disclosure statement explaining the Plan. The
SEC said the document describes a scheme designed to evade the
federal securities laws and effectuate a back door initial public
offering for Wave2Wave's stock. The SEC pointed out that it has
already issued an order that has prevented the Debtors from
offering their securities through an S-1 registration statement
and the SEC is currently conducting an investigation into whether
the registration statement violated anti-fraud provisions of the
federal securities laws.
While the SEC objection has not been resolved at this time, the
SEC will receive will receive a copy of an amended disclosure
statement that the Debtors believe will resolve their objection,
Mr. Sirota told the TCR in an e-mail yesterday.
"If we can't resolve the objection consensually, we will ask the
Court to decide the dispute," he said.
The Debtors are currently in talks for financing that would fund
the transactions contemplate by the Plan. According to Mr.
Sirota, the existing lender has "agreed to fund additional dollars
which amount is being negotiated."
The Debtors in March obtained approval to access $3.5 million of
DIP financing from the Robert DePalo Special Opportunity Fund,
LLC.
A full-text copy of the Disclosure Statement filed in April is
available for free at:
http://bankrupt.com/misc/WAVE2WAVE_COMMUNICATIONS_ds.pdf
About Wave2Wave Communications
Wave2Wave Communications Inc., a provider of voice and data
services to businesses, filed for bankruptcy (Bankr. D. N.J. Case
No. 12-13896) on Feb. 17, 2012. Wave2Wave, which estimated up to
$100 million assets and debts, says it sought Chapter 11
protection, after access provider Verizon Communications Inc.
threatened to cut off its service.
Affiliates RNK Inc. and RNK VA LLC also filed petitions.
Wave2Wave was founded in 1999. Judge Donald H. Steckroth presides
over the case. Michael D. Sirota, Esq., at Cole, Schotz, Meisel,
Forman & Leonard, P.A., serves as the Debtors' counsel. Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C., serves as their
special counsel. Kurtzman Carson Consultants LLC serves claims,
noticing and balloting agent. J.H. Cohn LLP serves as financial
advisor. The petition was signed by Steven Asman, president and
chairman of the Debtors' board.
The official committee of unsecured creditors is represented by
Cooley LLP.
WOOD VENDING: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Wood Vending, Inc.
dba Wood Vending Service
3387 Progress Road
Norfolk, VA 23502
Bankruptcy Case No.: 12-73156
Chapter 11 Petition Date: July 24, 2012
Court: United States Bankruptcy Court
Eastern District of Virginia (Norfolk)
Judge: Frank J. Santoro
Debtor's Counsel: Kelly Megan Barnhart, Esq.
Robert V. Roussos, Esq.
ROUSSOS, LASSITER, GLANZER & BARNHART PLC
580 E. Main St., Suite 300
P.O. Box 3127
Norfolk, VA 23514-3127
Tel: (757) 622-9005
Fax: (757) 624-9257
E-mail: barnhart@rlglegal.com
roussos@rlglegal.com
Scheduled Assets: $1,018,122
Scheduled Liabilities: $3,407,288
A copy of the Company's list of its 20 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/vaeb12-73156.pdf
The petition was signed by Thomas M. Simpson, president.
WOUND MANAGEMENT: Has Forbearance with Juventas Until Sept. 13
--------------------------------------------------------------
In connection with a settlement agreement entered into with
Juventas, LLC, Wound Management Technologies, Inc., Wound Care
Innovations, L.L.C., and certain of their affiliates issued to
Juventas a Secured Promissory Note, dated as of March 20, 2012, in
the principal amount of $930,000. The Company Parties also
entered into a security agreement with Juventas pursuant to which
the 2012 Note was secured by all inventory of the Company Parties
and all other assets of the Company Parties.
On June 26, 2012, the Company, along with the other Company
Parties, received notice from Juventas that -- pursuant to
Juventas's rights under the Security Agreement and as the result
of the Company Parties' default under the 2012 Note for a failure
to make payments due thereunder as of May 21, 2012 -- Juventas
would be exercising its right to (i) take immediate and exclusive
possession of the Collateral and (ii) sell, lease, or license the
Collateral in order to satisfy unpaid obligations under the 2012
Note.
On July 13, 2012, Juventas and the Company Parties entered into a
forbearance agreement pursuant to which Juventas agreed to suspend
efforts to execute on the Collateral while the Company completes a
debt offering, the proceeds of which are being used to repay
amounts owed under the 2012 Note. The Forbearance Agreement
provides for a forbearance period terminating upon the earlier of
Sept. 13, 2012, or the occurrence of one or more default events.
On July 13, 2012, the Company delivered an initial payment of
$465,000 to Juventas; under the terms of the Forbearance
Agreement, if the Company can deliver a second payment of $465,000
to Juventas on or before Aug. 13, 2012, all interest or other
amounts remaining unpaid under the 2012 Note will be forgiven by
Juventas.
The Company has initiated an offering of subordinated notes
coupled with warrants for the purchase of the Company's common
stock1. The Bridge Notes, which mature on Oct. 12, 2012, provide
for an interest rate of 5% until the Maturity Date, with a rate of
18% on amounts remaining outstanding following the Maturity Date.
Additionally, holders of Bridge Notes will have a pro rata right
to certain revenue streams in the event, and to the extent, that
amounts remain outstanding under the Bridge Notes after the
Maturity Date. Investors in the Bridge Notes will also receive
Warrants for the purchase, at a price of $0.15 per share, of one
share of the Company's common stock for every dollar in principal
amount under that investor's Bridge Note.
As of July 13, 2012, the Company had issued Bridge Notes in the
aggregate principal amount of $610,000, $465,000 of which has been
used to pay amounts owed to Juventas under the 2012 Note.
The Company has received a commitment letter for an additional
subscription of between $300,000 and $400,000 in principal amount
of Bridge Notes, subject to (i) Juventas's continued forbearance,
(ii) the Company's continued solvency, and (iii) the receipt of a
total of $700,000 in subscriptions from other parties.
A copy of the Forbearance Agreement is available for free at:
http://is.gd/InNuro
About Wound Management
Fort Worth, Texas-based Wound Management Technologies, Inc.,
markets and sells the patented CellerateRX(R) product in the
expanding advanced wound care market; particularly with respect to
diabetic wound applications.
The Company's balance sheet at March 31, 2012, showed
$3.27 million in total assets, $6.90 million in total liabilities,
and a stockholders' deficit of $3.63 million.
Pritchett, Siler & Hardy, P.C., in Salt Lake City, Utah, expressed
substantial doubt about Wound Management's ability to continue as
a going concern, following the Company's results for the fiscal
year ended Dec. 31, 2011. The independent auditors noted that the
Company has incurred substantial losses and has a working capital
deficit.
WVSV HOLDINGS: Court to Consider 10K's Motion to Dismiss on Aug. 2
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona will convene
a hearing on Aug. 2, 2012, at 11 a.m., to consider 10K, L.L.C.'s
motion to dismiss the Chapter 11 case of WVSV Holdings, LLC.
According to 10K, a bad faith bankruptcy filing was initiated by
the Debtor to illegally prejudice its creditors and avoid
resolution of a two-party dispute that has been pending before the
Arizona state courts for nearly a decade.
10K alleges that the bankruptcy case is the outgrowth of nine
years of litigation involving an improper and illegal attempt to
transfer 13,260 acres of real estate in Buckeye, Arizona to WVSV
through massive fraud and a breach of fiduciary duty owed to 10K,
which a jury found WVSV and its principals to have aided and
abetted. In April 2012, the Court of Appeals for the State of
Arizona issued an Opinion that allows 10K to challenge the
validity of the underlying transaction that gave rise to WVSV's
interest in the property and retry its tort claim that resulted in
a $360 million verdict against the Debtor.
10K was formed to acquire, develop and sell approximately 10,000
acres of undeveloped real property in Buckeye, Arizona. Phoenix
Holdings II, L.L.C., an entity controlled by real estate developer
Robert Burns, originally served as 10K's exclusive manager and was
entrusted with near total authority to control 10K's business.
At the hearing, the Court will also consider the objection to the
application to employ Land Advisors as real estate broker.
About WVSV Holdings
W.V.S.V. Holdings LLC, the owner of about 13,000 acres of vacant
land in Buckeye, Arizona, filed a petition for Chapter 11
protection (Bankr. D. Ariz. Case No. 12-10598) on May 14, 2012, in
Phoenix. The Debtor claims that the three tracts of land planned
for "future development" are worth $120 million and secure $57.3
million in debt. The Debtor scheduled $120.04 million in assets
and $57.35 million in liabilities.
West Valley Ventures, LLC, owns 75% of the Debtor, and Breycliffe,
LLC, owns the remaining 25%.
Judge Redfield T. Baum, Sr., presides over the case. Michael W.
Carmel, Esq., serves as the Debtor's counsel. The petition was
signed by Lee Allen Johnson, manager of West Valley Ventures,
manager.
The U.S. Trustee has not appointed an official committee of
unsecured creditors in the Debtor's case because an insufficient
number of persons holding unsecured claims against the Debtor have
expressed interest in serving on a committee. The UST reserves
the right to appoint the committee should interest develop among
the creditors.
WVSV HOLDINGS: U.S. Trustee Balks at Postpetition Financing
-----------------------------------------------------------
The U.S. Trustee for Region 14 filed with the U.S. Bankruptcy
Court for the District of Arizona limited objection to WVSV
Holdings, LLC's motion for authorization to obtain postpetition
secured financing.
As reported in the Troubled Company Reporter on July 17, 2012, the
Debtor asked for authorization to obtain $2,250,000 postpetition
secured financing from Kennedy Funding.
The U.S. Trustee says that the Debtor failed to provide the final
terms and conditions in the form of a finalized loan agreement
upon which the debtor-in-possession financing will be predicated.
Based upon the documents presented to the Court, the parties are
not even certain whether the proposed DIP lender, Kennedy Funding
Financial, LLC, is requiring a priming lien over other secured
parties (e.g. Maricopa County, Perkins Coie, etc.)
Further, the U.S. Trustee is concerned that the DIP Lender does
not have the requisite corporate authority to have proposed, let
alone fund, the DIP Financing.
About WVSV Holdings
W.V.S.V. Holdings LLC, the owner of about 13,000 acres of vacant
land in Buckeye, Arizona, filed a petition for Chapter 11
protection (Bankr. D. Ariz. Case No. 12-10598) on May 14, 2012, in
Phoenix. The Debtor claims that the three tracts of land planned
for "future development" are worth $120 million and secure $57.3
million in debt. The Debtor scheduled $120.04 million in assets
and $57.35 million in liabilities.
West Valley Ventures, LLC, owns 75% of the Debtor, and Breycliffe,
LLC, owns the remaining 25%.
Judge Redfield T. Baum, Sr., presides over the case. Michael W.
Carmel, Esq., serves as the Debtor's counsel. The petition was
signed by Lee Allen Johnson, manager of West Valley Ventures,
manager.
The U.S. Trustee has not appointed an official committee of
unsecured creditors in the Debtor's case because an insufficient
number of persons holding unsecured claims against the Debtor have
expressed interest in serving on a committee. The UST reserves
the right to appoint the committee should interest develop among
the creditors.
* Moody's Says US Company Defaults Slow in 2012 Second Quarter
--------------------------------------------------------------
Defaults by US companies slowed in the second quarter from the
elevated pace of the prior two quarters, says Moody's Investors
Service in the latest US Corporate Default Monitor. The default
forecast remains benign as speculative-grade companies maintain
good liquidity.
There were eight defaults of rated US non-financial corporate
families representing more than $5.5 billion of debt in the second
quarter of 2012, compared with 15 defaults representing about $7
billion of debt in the first quarter of 2012 and 16 defaults
totaling about $10 billion of debt in the fourth quarter of 2011,
says Moody's.
"The threat to speculative-grade liquidity is that contagion from
Europe's sovereign-debt problems could depress the US economy and
corporate profits, and also cause US credit markets to tighten,"
said Lenny Ajzenman, a Moody's Senior Vice President. "But the
historically low levels of Moody's Liquidity Stress Index indicate
good liquidity for US high-yield companies."
The US speculative-grade default rate was 3.1% at the end of the
second quarter, up from 2.9% at the end of the first quarter, says
Moody's. The rating agency forecasts the default rate will peak at
4.0% in October and decline to 3.0% by June 2013, well below the
late-2009 peak above 14%.
The eight defaults during the quarter spanned industries, with the
largest defaulter, Houghton Mifflin Harcourt Publishers Inc.,
defaulting on more than $3 billion of debt in connection with its
prepackaged bankruptcy filing.
Distressed exchanges made up six of the eight defaults, says
Moody's. The rating agency expects distressed exchanges to
continue as a popular restructuring strategy as the preponderance
of higher-ranking loans in the capital structures of leveraged
companies persuades junior bondholders to agree to debt exchanges
rather than risk low recovery in a bankruptcy.
* Clifford Chance Announces Memorandum on Real Estate Provisions
----------------------------------------------------------------
A recent decision by the United States Bankruptcy Court for the
Southern District of Georgia holds that a debtor owning multiple
commercial properties is nevertheless subject to the single asset
real estate provisions of the Bankruptcy Code when a secured
creditor holds a lien on one of the properties and that property
generates substantially all the debtor's gross income and
otherwise satisfies the "single asset real estate" definition.
A copy of the full memorandum is available in downloadable format
at http://is.gd/hTbnXm
* BOOK REVIEW: Ralph H. Kilmann's Beyond the Quick Fix
------------------------------------------------------
Author: Ralph H. Kilmann
Publisher: Beard Books
Hardcover: 320 pages
Listprice: $34.95
Review by Henry Berry
Every few years, a new approach is offered for unleashing the full
potential of organized efforts. These are the quick fixes to
which the title of this book refers. The jargon of the quick fix
is familiar to any businessperson: decentralization, human
resources, restructuring, mission statement, corporate strategy,
corporate culture, and so on. These terms are all limited in
scope or objective, and some are even irrelevant or misconceived
with regard to the overall well-being and purpose of a
corporation.
With his extensive experience as a corporate consultant, author of
numerous articles, and professor in business studies, Kilmann
recognizes that each new idea for optimum performance and results
is germane to some area of a corporation. However, he also
recognizes that each new idea inevitably falls short in bringing
positive change -- that is, a change that is spread throughout the
corporation and is lasting. At best, when a corporation relies on
an alluring, and sometimes little more than fashionable, idea, it
is a wasteful distraction. At worst, it can skew a corporate
organization and its operations, thereby allowing the
corporation's true problems or weaknesses to grow until they
become ruinous. As the author puts it, "Essentially, it is not
the single approach of culture, strategy, or restructuring that is
inherently ineffective. Rather, each is ineffective only if it is
applied by itself -- as a "quick fix"."
Kilmann tells corporate leaders how to break the cycle of
embracing a quick fix, discarding it after it proves ineffective,
and then turning to a newer and ostensibly better quick fix that
soon proves to be equally ineffective. For a corporation to break
this self-defeating cycle, the author offers a five-track program.
The five tracks, or elements, of this program are corporate
culture, management skills, team-building, strategy-structure, and
reward system. These elements are interrelated. The virtue of
Kilmann's multidimensional five-track program is that it addresses
a corporation in its entirety, not simply parts of it.
Kilmann's five tracks offer structural and operational aspects of
a corporation that executives and managers will find familiar in
their day-to-day leadership and strategic thinking. Thus, the
author does not introduce any unfamiliar or radical perspectives
or ideas, but rather advises readers on how to get all parts of a
corporation involved in productive change by integrating the five
tracks into "a carefully designed sequence of action: one by one,
each track sets the stage for the next track." Kilmann does more,
though, than bring all significant features of a modern
corporation together in a five-track program and demonstrate the
interrelation of its elements. His singularly pertinent and
useful contribution is providing a sequence of steps to be
implemented with respect to each track so that a corporation
progresses toward its goals in an integrated way.
Beyond the Quick Fix is a manual for implementing and evaluating
the progress of a five-track program for corporate success. The
book should be read by any corporate leader desiring to bring
change to his or her organization.
Ralph H. Kilmann has been connected with the University of
Pittsburgh for 30 years. For a time, he was its George H. Love
Professor of Organization and Management at its Katz Graduate
School of Business. Additionally, he is president of a firm
specializing in quantum transformations.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers"
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors" Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise
Marie Varquez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R.
Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman,
Editors.
Copyright 2012. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $775 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
*** End of Transmission ***