/raid1/www/Hosts/bankrupt/TCR_Public/120806.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, August 6, 2012, Vol. 16, No. 217
Headlines
1617 WESTCLIFF: Files for Chapter 11 in California
30DC INC: Incurs $71,500 Net Loss in March 31 Quarter
ALCOA INC: Fitch Affirms 'BB' Rating on Preferred Stock
AMBAC ASSURANCE: Rehabilitator Files Policy Claim Rules
AMERICAN AIRLINES: Eagle FAs Union to Send Deal to Members
ANCHOR BANCORP: C. Bauer and H. Berkenstadt Named to Board
AMERICAN APPAREL: Reports $53.8 Million Total Net Sales in July
ASHLAND INC: Moody's Assigns 'Ba2' Rating to Proposed Notes
ASHLAND INC: S&P Affirms 'BB' Corp. Credit Rating; Outlook Stable
AURASOUND INC: Presient A. Singha Resigns; Acting CFO Named
BENADA ALUMINUM: Case Summary & 20 Largest Unsecured Creditors
BERNARD L. MADOFF: Trustee Firm Charges $43.3MM for Oct. 1-Jan. 31
BERRY PLASTICS: S&P Affirms 'B-' Corp. Credit Rating; Outlook Pos
BITI LLC: Files for Chapter 11 in New York
BLUE BUFFALO: S&P Affirms Prelim. 'B' Corp. Credit Rating
CANNERY CASINO: Moody's Affirms 'Caa1' CFR; Outlook Negative
CATALYST PAPER: U.S. Court Confirms Plan of Arrangement
CATALYST PAPER: To Permanently Close Snowflake Recycle Paper Mill
CELL THERAPEUTICS: Files Form 10-Q, Incurs $50.1MM Net Loss in Q2
CENTRAL EUROPEAN: Commences Consent Solicitation to Obtain Waiver
CENTRAL EUROPEAN: M. Kaufman Asked to be Appointed as Director
CHEMTURA CORP: Reorganization Items Down to $1-Mil. in Q2
CIRCLE ENTERTAINMENT: Posts $2.3 Million Net Loss in Q2 2012
COMARCO INC: Has $2MM Bridge Financing & $3MM Equity Commitment
COMARCO INC: Louis Silverman Appointed to Board of Directors
CONDOR DEVELOPMENT: Court OKs Shannon & Associates as Accountant
CONDOR DEVELOPMENT: Court Approves Dave Magee as Realtor
CLAIRE'S STORES: Jay Friedman Quits as Head of N.A. Business
CLEAR CHANNEL: Incurs $39 Million Net Loss in Second Quarter
CLEAR CHANNEL: Bank Debt Trades at 23.83% Off in Secondary Market
DAFFY'S INC: Jemb Realty Is Purchaser of Leasehold Interests
DAFFY'S INC: Case Summary & 30 Largest Unsecured Creditors
DAVITA INC: Moody's Confirms 'Ba3' CFR; Outlook Stable
DELPHI CORP: DPH Seeks Final Decree Closing ASEC, et al., Cases
DELPHI CORP: DPH Holdings Files Report for 2nd Quarter 2012
DELPHI CORP: Obama Aides Defend Bailout Cash for Retirees
DELPHI CORP: Summit Polymers Opposes Amended Complaints
DELPHI CORP: Withdraws Injunction Plea vs. Antitrust Suit
DENNY'S CORP: Files Form 10-Q, Reports $4.6MM Net Income in Q2
DEWEY & LEBOEUF: Executive's Pay May be Targeted
DEX MEDIA EAST: Bank Debt Trades at 46.64% Off in Secondary Market
DIMENSIONS HEALTH: Moody's Affirms 'B3' Rating on $57-Mil. Bonds
DOLLAR THRIFTY: DBRS Affirms 'B' Issuer Rating
DUKE ENERGY: Jenner & Block Tapped by NCUC to Probe Progress Deal
DYNEGY INC: Signs First Amendment to Plan Support Agreement
EASTMAN KODAK: Wins Partial Victory Against Apple in Patent Fight
ECOSPHERE TECHNOLOGIES: Reports $920,000 Net Income in Q2
EDISON MISSION: Bondholders May Recover 54%, JPM Analysts Say
ELEPHANT TALK: Incurs $4.9 Million Net Loss in Second Quarter
EMMIS COMMUNICATIONS: Delays Vote on Preferred Stock Amendments
FIRST DATA: Fitch Rates Proposed $750-Mil. Senior Notes 'BB-'
FIRST DATA: Moody's Rates $750MM Sr. Sec. First Lien Notes 'B1'
FIRST DATA: S&P Rates Proposed 8-Yr. First Lien Notes at 'B+'
FOREST OIL: Moody's Downgrades CFR to 'B1'; Outlook Negative
FORT LAUDERDALE BOATCLUB: Files for Chapter 11 in Florida
GAC STORAGE: Use of Cash Collateral Extended Through Aug. 31
GARLOCK SEALING: Affiliates Deconsolidated Following Chapter 11
GENERAL NUTRITION: Moody's Affirms 'B1' CFR/PDR; Outlook Stable
GENERAL NUTRITION: S&P Affirms 'BB' Rating on $1.4-Bil. Loan
GENTA INC: To File Chapter 7 Bankruptcy Petition in Delaware
GEOMET INC: Receives Delisting Notification From NASDAQ SM
GETTY PETROLEUM: Ch. 11 Impacts Getty Realty Q2 Results
GOOD SAM: Completes Offer to Purchase $4.9-Mil. of Senior Notes
HARPER BRUSH: Committee Proposes Day Rettig as Local Counsel
HARPER BRUSH: Committee Taps MorrisAnderson as Financial Advisor
HARPER BRUSH: Hires Patent and Trademark Valuation Expert
HARPER BRUSH: Hires Bradshaw Fowler as Patent Counsel
HIGHLANDS BANKSHARES: William Chaffin to Retire from Board
HORIZON LINES: Incurs $46.1 Million Net Loss in Second Quarter
HOST HOTELS: S&P Rates New $350MM Senior Notes Due 2023 'BB+'
HRK HOLDINGS: Has Green Light to Hire Litigation Counsel
HYDROGENICS CORPORATION: Posts $3.1-Mil. Net Loss in 2nd Quarter
J.C. PENNEY: Fitch Downgrades IDR to 'BB'; Outlook Negative
JOSE CANSECO: Former MLB MVP Files Chapter 7 Bankruptcy
KEOWEE FALLS: Amends Schedules of Assets and Liabilities
LEGENDS GAMING: Moody's Cuts PDR to 'D' After Bankruptcy Filing
LIGHTSQUARED INC: Lenders Ask to Investigate Harbinger Capital
LPATH INC: Aberdare Ventures Partner Kisner Appointed to Board
MAKENA GREAT: Aug. 7 Hearing on Continued Cash Use
MANISTIQUE PAPERS: mBank Prevented Liquidation
MASHANTUCKET PEQUOT: Foxwoods Owner to Restructure $2.2-Bil. Debt
MAUI LAND: Posts $1 Million Net Loss in Second Quarter
MAUI LAND: Incurs $1 Million Net Loss in Second Quarter
MGIC INVESTMENT: Breaches Capital Limit After Loss
MMODAL INC: Moody's Assigns 'B2' Corp. Family Rating
MOORE SORRENTO: Court Enters New Plan Confirmation Order
NAVISTAR INT'L: Obtains $1-Bil. Commitment from JPMorgan, et al.
NEF LLC: Fitch Cuts Rating on Subordinate Note to 'BBsf'
NEXTWAVE WIRELESS Has Merger and Note Purchase Pacts with AT&T
OMEGA NAVIGATION: Files Chapter 11 Plan of Reorganization
OMNICOMM SYSTEMS: Reports $1.55-Mil. Net Income in 2nd Quarter
OMNICOMM SYSTEMS: Five Directors Elected at Annual Meeting
ONLINE RESOURCES: Has $832,000 Net Loss Available to Common in Q2
ORAGENICS INC: Completes $13 Million Private Placement Financing
ORCHARD SUPPLY: Sale/Leaseback No Impact on Moody's 'B3' CFR
OVERSEAS SHIPHOLDING: Moody's Cuts CFR to 'Caa1'; Outlook Neg.
PATRIOT COAL: Judge to Approve $802 Million Loan Agreement
PEAK RESORTS: Greek Peak Mountain Resort Owner in Chapter 11
PEER REVIEW: Peter Messineo Raises Going Concern Doubt
PENINSULA GAMING: Fitch Assigns 'B' Issuer Default Rating
PEREGRINE FINANCIAL: District Judge Rebecca Denied Lawsuit Case
PERFECTENERGY INTERNATIONAL: BDO China Raises Going Concern Doubt
PHI GROUP: Directors Convert Debts to Common Stock
PROLOGIS INC: Fitch Rates $582 Million Preferred Stock 'BB'
RADIAN ASSET: S&P Affirms 'B+' Counterparty Credit Finc'l. Rating
RADIAN GROUP: S&P Cuts Issuer Credit Rating to 'CCC-'; Outlook Neg
RCS CAPITAL: Plan Confirmation Hearing Rescheduled for Aug. 20
REDPRAIRIE CORP: Moody's Says Debt Upsize Slightly Credit Neg.
RESIDENTIAL CAPITAL: Wins OK for Towers Watson as HR Consultant
RESIDENTIAL CAPITAL: Can Hire Fortace as RMBS Consultant
RESIDENTIAL CAPITAL: May Tap Severson as Calif. Litigation Counsel
REVEL ENTERTAINMENT: Bank Debt Trades at 19% Off
RG STEEL: To Sell Wheeling, Martins Ferry Assets for $9 Million
SALON MEDIA: A. Fernandez Promoted to Interim CFO
SAN BERNARDINO, CA: S&P Cuts Rating on Series 1997A Bonds to C
SELECT MEDICAL: Moody's Reviews 'Ba2' Debt Rating for Downgrade
SEVEN ARTS: Gets NASDAQ Delisting Determination
SINO-FOREST: Discusses Business Models in CCAA Filings
SOLYNDRA LLC: White House Aide Warned About Loss
SPRINT NEXTEL: Files Form 10-Q, Incurs $1.4BB Net Loss in Q2
STEEL DYNAMICS: Moody's Assigns 'Ba2' Rating to Sr. Unsec. Notes
STEEL DYNAMICS: S&P Rates New Senior Unsecured Notes 'BB+'
STEREOTAXIS INC: Files 2nd Amendment to Form S-1 Prospectus
STEREOTAXIS INC: Amends 7.5 Million Common Shares Offering
STRATUM HOLDINGS: Reports $62,300 Net Income in 2nd Quarter
SUBURBAN PROPANE: S&P Downgrades CCR to 'BB-' After Acquisition
SUGARLEAF TIMER: Hearing on Plan, Stay Relief Bid Moved to Nov.
TAYLOR, MI: Moody's Downgrades GOLT Rating to 'Ba1'
TRAFFIC CONTROL: Has Final OK to Obtain $12.77-Mil. DIP Financing
TRANSFIRST HOLDINGS: Moody's Alters Ratings Outlook to Positive
TRIBUNE CO: Bond Trustees Ask Court to Suspend Confirmation Order
TRIBUNE CO: Lining Up $1.1-Billion Bankruptcy-Exit Financing
TRIBUNE CO: Committee Wants Document Depository Order Revised
TRIBUNE CO: Bank Debt Trades at 27.77% Off in Secondary Market
TRUE BEGINNINGS: True.com Files for Chapter 11 in Texas
TRUE BEGINNINGS: True.com's Chapter 11 Case Summary
TXU CORP: Bank Debt Trades at 30.78% Off in Secondary Market
UNITED CONTINENTAL: Pilots Reach Deal-In-Principle on New Contract
UNIVERSAL FIDELITY: A.M. Best Affirms 'B' Finc'l Strength Rating
UNIVERSITY GENERAL: Buys Texas Clinics, Sees $6MM Yearly Revenue
VALENCE TECHNOLOGY: Robbins Umeda Probes Executives
VALENCE TECHNOLOGY: JCF Head F. Fisher Named Independent Director
VIASPACE INC: Signs Term Sheet to Separate VGE
WAUKEGAN SAVINGS BANK: Closed; First Midwest Bank Assumes Deposits
WESTMORELAND COAL: Incurs $13.6 Million Net Loss in Second Qtr.
WPCS INTERNATIONAL: Ex Jones Intercable CFO Named to Board
ZOO ENTERTAINMENT: MMB Agrees to Provide $1.6MM Add'l Financing
ZOO ENTERTAINMENT: David Smith Discloses 78.2% Equity Stake
* OCC & Federal Reserve Extend Independent Foreclosure Review
* Moody's Says US Unregulated Power Companies' Outlook Negative
* Ascension Servicing Unit Sold by Encore Capital
* Bruce Buchanan Joins PwC US's Business Recovery Services Group
* Chadbourne & Parke Adds Two Lateral Partners for LA Office
* BOND PRICING -- For Week From July 30 to Aug. 3, 2012
*********
1617 WESTCLIFF: Files for Chapter 11 in California
--------------------------------------------------
1617 Westcliff, LLC, filed a bare-bones Chapter 11 petition
(Bankr. C.D. Calif. Case No. 12-19326) on Aug. 2, 2012 in Santa
Ana, California.
The Debtor estimated assets of $10 million to $50 million and
liabilities of $1 million to $10 million.
According to the case docket, the schedules of assets and
liabilities and the statement of financial affairs are due
Aug. 16, 2012.
Gary Rettig, president of Rettig Portfolio, Inc., signed the
Chapter 11 petition.
30DC INC: Incurs $71,500 Net Loss in March 31 Quarter
-----------------------------------------------------
30DC, Inc., filed with the U.S. Securities and Exchange Commission
its quarterly report on Form 10-Q disclosing a net loss of $71,494
on $401,436 of total revenue for the three months ended March 31,
2012, compared with a net loss of $266,083 on $445,592 of total
revenue for the same period during the prior year.
The Company reported a net loss of $354,163 on $1.32 million of
total revenue for the nine months ended March 31, 2012, compared
with a net loss of $1.35 million on $1.41 million of total revenue
for the same period a year ago.
The Company's balance sheet at March 31, 2012, showed $1.82
million in total assets, $2.21 million in total liabilities and a
$394,450 total stockholders' deficiency.
The Company said in its quarterly report for the period ending
March 31, 2012, that if it is unable to raise additional capital
or encounters unforeseen circumstances, it may be required to take
additional measures to conserve liquidity, which could include,
but not necessarily be limited to, issuance of additional shares
of the Company's stock to settle operating liabilities which would
dilute existing shareholders, curtailing its operations,
suspending the pursuit of its business plan and controlling
overhead expenses. The Company cannot provide any assurance that
new financing will be available to it on commercially acceptable
terms, if at all. 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/dMJ6LB
About 30DC Inc.
New York-based 30DC, Inc., provides Internet marketing services
and related training to help Internet companies in operating their
businesses. It operates in two divisions, 30 Day Challenge and
Immediate Edge.
The Company reported a net loss of $1.44 million for the fiscal
year ended June 30, 2011, following a net loss of $1.06 million in
fiscal 2010.
As reported in the TCR on Dec. 19, 2011, Marcum LLP, in New York,
expressed substantial doubt about 30DC's ability to continue as a
going concern, following the Company's results for the fiscal year
ended June 30, 2011. The independent auditors noted that the
Company has had recurring losses, and has a working capital and
stockholders' deficiency as of June 30, 2011.
ALCOA INC: Fitch Affirms 'BB' Rating on Preferred Stock
-------------------------------------------------------
Fitch Ratings has affirmed Alcoa Inc.'s (NYSE:AA) Issuer Default
Rating (IDR) at 'BBB-'. The Rating Outlook is Stable.
The ratings reflect Alcoa's strong liquidity offsetting the
likelihood of persistent weak aluminum prices as new low cost
capacity in the industry is added and high cost capacity is
subsidized resulting in systemic oversupply. Fitch believes that
high cost capacity will be curtailed in the medium term but that
current economic softness makes it politically expedient to offer
subsidies.
Fitch expects that earnings and cash flow generation should
continue to improve with economic recovery longer term but will
decline in 2012 on lower metals prices and weakness in Europe.
Fitch believes 2012 EBITDA could decline to $2 billion which would
result in financial leverage remaining above 4 times (x) in 2012.
Results in 2013 should be enhanced by improvements and
curtailments undertaken in 2012. Flat-rolled and engineered
products results are improving on higher end-market demand and the
benefits of past restructuring efforts.
Alcoa's guidance remains that it will be free cash flow positive
in 2012 after capital expenditures of $1.35 billion and $550
million cash contribution to pension funds but before dividends
and the $350 investment in the Ma'aden joint venture. In
addition, Alcoa has agreed to sell its 351-megawatt Tapoco
Hydroelectric Project for proceeds of $600 million, the sale of
which is expected to close by year end.
First half ended June 30, 2012 EBITDA was $1.1 billion, free cash
flow was negative $326 million, cash on hand was $1.7 billion and
net new borrowing was $171 million. Total debt at the end of the
period was $9.5 billion or 4x latest 12 months (LTM) EBITDA of
$2.4 billion. At June 30, 2012, the $3.75 billion revolver
maturing July 25, 2016 was fully available (commercial paper
outstanding was $318 million). The revolver has a covenant that
limits consolidated indebtedness to 150% of consolidated net
worth.
Fitch expects free cash generation to be challenged in 2012 and
2013 given low aluminum prices related to persistent oversupply in
the market. Fitch does expect debt to be reduced by at least $450
million representing borrowings under the short-term facilities
added in the first quarter of 2012.
Near term scheduled debt maturities are estimated to be: $995
million in 2012, $549 million in 2013, $743 million in 2014, $45
million in 2015 and $26 million in 2016. Of the aggregate
maturity in 2014, $575 million represents the convertible notes
due March 15, 2014; the initial conversion rate was equivalent to
a conversion price of approximately $6.43/share.
Alcoa contributed $352 million to its pension funds in the first
half of 2012 under the assumption that required contributions for
the year would be $650 million globally. The company announced
that they anticipate recent changes to legislation would reduce
this amount by $100 million to $130 million in 2012 and by $225
million to $250 million in 2013. Management believes that ERISA
funding would then be up to about 90%. At Dec. 31, 2011, pension
plans were under funded by $3.2 billion and the U.S. pension plans
were under funded by $2.7 billion.
WHAT COULD TRIGGER A RATING ACTION?
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
-- Continued weak earnings.
-- Constrained liquidity.
-- Absence of debt repayment.
Positive: Not anticipated over the next 12 months given over
supply in the aluminum market but future developments that may
lead to a positive rating action include:
-- EBITDA anticipated to be sustainably over $4 billion, total
debt below $8 billion, and free cash flow positive on
average.
Fitch has affirmed the following ratings, with a Stable Outlook:
-- Issuer Default Rating (IDR) at 'BBB-';
-- Senior unsecured debt at 'BBB-';
-- $3.25 billion revolving credit facility at 'BBB-';
-- Preferred stock at 'BB'.
-- Short-term IDR at 'F3';
-- Commercial paper at 'F3'.
AMBAC ASSURANCE: Rehabilitator Files Policy Claim Rules
-------------------------------------------------------
Ambac Assurance Corporation disclosed that the Wisconsin
Commissioner of Insurance, acting as the Rehabilitator of the
Segregated Account of Ambac Assurance has promulgated and filed
with the Circuit Court for Dane County, Wisconsin the Rules
Governing the Submission, Processing and Partial Payment of Policy
Claims in accordance with the June 4, 2012 Interim Cash Payment
Order.
The Policy Claim Rules provide guidance to all Segregated Account
policyholders regarding the process for submission, processing and
partial payment of policy claims of the Segregated Account.
On Jun. 4, 2012, the Rehabilitation Court issued an order
approving a motion by the Rehabilitator relating to the
commencement of interim partial distributions on Policy Claims.
The Rehabilitator has filed the Policy Claim Rules in order to
facilitate an efficient and orderly process for the submission,
evaluation, processing, and partial payment of Policy Claims in
accordance with the Interim Cash Payment Order. Policyholders may
now commence submitting Policy Claims in accordance with the
Policy Claim Rules. Policyholders that submit permitted Policy
Claims in any calendar month are eligible to receive 25% of the
amount of the Policy Claim from the Segregated Account on or
around the 20th day of the following calendar month. Accordingly,
policyholders that submit permitted Policy Claims during the month
of August 2012, in accordance with the Policy Claim Rules, will
receive 25% of the amount of each permitted Policy Claim from the
Segregated Account on Sept. 20, 2012. A copy of the Policy Claim
Rules is available at www.ambacpolicyholders.com .
No decision has been announced with respect to effectuating or
amending the Segregated Account Rehabilitation Plan or whether
surplus notes will be issued with respect to the remaining balance
of unpaid Policy Claims. The Rehabilitator has previously
announced that more specific information regarding the status of
the Segregated Account Rehabilitation Plan, including possible
modifications, will be provided as soon as appropriate.
About Ambac Financial
Ambac Financial Group, Inc., headquartered in New York City, is a
holding company whose affiliates provided financial guarantees and
financial services to clients in both the public and private
sectors around the world.
Ambac Financial filed a voluntary petition for relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No.
10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will
continue to operate in the ordinary course of business as "debtor-
in-possession" under the jurisdiction of the Bankruptcy Court and
in accordance with the applicable provisions of the Bankruptcy
Code and the orders of the Bankruptcy Court.
Ambac's bond insurance unit, Ambac Assurance Corp., did not file
for bankruptcy. AAC is being restructured by state regulators in
Wisconsin. AAC is domiciled in Wisconsin and regulated by the
Office of the Commissioner of Insurance of the State of Wisconsin.
The parent company is not regulated by the OCI.
Ambac's consolidated balance sheet -- which includes non-debtor
Ambac Assurance Corp -- showed US$30.05 billion in total assets,
US$31.47 billion in total liabilities, and a US$1.42 billion
stockholders' deficit, at June 30, 2010.
On an unconsolidated basis, Ambac said in a court filing that
it has assets of (US$394.5 million) and total liabilities of
US$1.6826 billion as of June 30, 2010.
Bank of New York Mellon Corp., as trustee to seven different types
of notes, is listed as the largest unsecured creditor, with claims
totaling about US$1.62 billion.
Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L.
Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's
bankruptcy counsel. The Blackstone Group LP is the Debtor's
financial advisor. Kurtzman Carson Consultants LLC is the claims
and notice agent. KPMG LLP is tax consultant to the Debtor.
Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller,
Esq., at Morrison & Foerster LLP, in New York, serve as counsel
to the Official Committee of Unsecured Creditors. Lazard Freres
& Co. LLC is the Committee's financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceeding undertaken
by Ambac Financial Group and the restructuring proceedings of
Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945-
7000).
AMERICAN AIRLINES: Eagle FAs Union to Send Deal to Members
----------------------------------------------------------
Flight Attendant leaders from American Eagle, represented by the
Association of Flight Attendants-CWA (AFA), unanimously approved
the recent tentative agreement and will now send it out to the
over 1,800 Flight Attendants for a vote. AFA American Eagle
leadership convened a special meeting to review the terms of the
agreement, announced on July 27 and, after a review of the
provisions, recommended that the membership vote to ratify the
deal.
"This process has been difficult and has taken an enormous amount
of time and effort, but AFA was successful in pushing back against
outrageous contract cuts first proposed by management. We forced
onerous concessions off the table, mitigated the ones we accepted
and negotiated early snap-backs for some of them. There are no
pay cuts or wage freezes. It is now up to American Eagle Flight
Attendants to decide if this is an agreement that they can live
with in the context of bankruptcy wherein all the negotiating
advantages lie with management," said Robert Barrow, AFA President
at American Eagle.
AFA is preparing member meetings at each Flight Attendant base to
outline the tentative agreement and answer questions.
A comprehensive summary and the full language of the tentative
agreement will be provided to each Flight Attendant. Ballots will
be mailed out the week of August 5 and the count date is scheduled
for September 7.
American Eagle is a wholly owned subsidiary of AMR Corporation,
with Flight Attendant domiciles in Dallas, Miami, Chicago, San
Juan, Los Angeles and JFK-LaGuardia.
The Association of Flight Attendants -- http://www.afacwa.org/--
is a Flight Attendant union.
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on $18.02 billion
of total operating revenues for the nine months ended Sept. 30,
2011. AMR recorded a net loss of $471 million in the year 2010, a
net loss of $1.5 billion in 2009, and a net loss of $2.1 billion
in 2008.
AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion
in total assets, $29.55 billion in total liabilities, and a
$4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
ANCHOR BANCORP: C. Bauer and H. Berkenstadt Named to Board
----------------------------------------------------------
Anchor BanCorp Wisconsin Inc. held its 2012 annual meeting of
shareholders on July 31, 2012. At this meeting, the shareholders
of the Company elected Chris M. Bauer and Holly C. Berkenstadt to
the Board of Directors. The shareholders approved an advisory
(non-binding) proposal to approve the compensation for the
Company's executive officers, pursuant to the American Recovery
and Reinvestment Act of 2009. In addition, the shareholders
ratified the appointment of McGladrey & Pullen LLP as the
Company's independent registered public accounting firm for the
fiscal year ending March 31, 2013.
The American Recovery and Reinvestment Act of 2009 requires
recipients of TARP CPP funds, such as the Company, to conduct
annually a separate non-binding shareholder vote to approve the
compensation of executive officers. Accordingly, there was no
vote solicited on the frequency of the vote for approval of
compensation, since it must occur annually.
About Anchor Bancorp
Madison, Wisconsin-based Anchor BanCorp Wisconsin Inc. is a
registered savings and loan holding company incorporated under the
laws of the State of Wisconsin. The Company is engaged in the
savings and loan business through its wholly owned banking
subsidiary, AnchorBank, fsb.
Anchor BanCorp and its wholly-owned subsidiaries, AnchorBank fsb,
each consented to the issuance of an Order to Cease and Desist by
the Office of Thrift Supervision. The Corporation and the Bank
continue to diligently work with their financial and professional
advisors in seeking qualified sources of outside capital, and in
achieving compliance with the requirements of the Orders. The
Corporation and the Bank continue to consult with the successors
to the OTS, Federal Reserve, the the Office of the Comptroller of
the Currency and Federal Deposit Insurance Corporation on a
regular basis concerning the Corporation's and Bank's proposals to
obtain outside capital and to develop action plans that will be
acceptable to federal regulatory authorities, but there can be no
assurance that these actions will be successful, or that even if
one or more of the Corporation's and Banks proposals are accepted
by the Federal regulators, that these' proposals will be
successfully implemented. While the Corporation's management
continues to exert maximum effort to attract new capital,
significant operating losses in fiscal 2009, 2010 and 2011,
significant levels of criticized assets and low levels of capital
raise substantial doubt as to the Corporation's ability to
continue as a going concern. If the Corporation and Bank are
unable to achieve compliance with the requirements of the Orders,
or implement an acceptable capital restoration plan, and if the
Corporation and Bank cannot otherwise comply with those
commitments and regulations, the OCC or FDIC could force a sale,
liquidation or federal conservatorship or receivership of the
Bank.
The Company reported a net loss of $36.73 million on $127.25
million of total interest income for the fiscal year ended March
31, 2012, a net loss of $41.17 million on $166.46 million of total
interest income for the year ended March 31, 2011, and a net loss
of $176.91 million on $217.08 million of total interest income for
the year ended March 31, 2010.
The Company's balance sheet at March 31, 2012, showed $2.78
billion in total assets, $2.81 billion in total liabilities and a
$29.55 million total stockholders' deficit.
McGladrey LLP, inMadison, Wisconsin, issued a "going concern"
qualification on the consolidated financial statements for the
fiscal year ended March 31, 2012. The independent auditors noted
that all of the subsidiary bank's regulatory capital amounts and
ratios are below the capital levels required by the cease and
desist order. The subsidiary bank has also suffered recurring
losses from operations. Failure to meet the capital requirements
exposes the Corporation to regulatory sanctions that may include
restrictions on operations and growth, mandatory asset
dispositions, and seizure of the subsidiary bank. In addition,
the Corporation's outstanding balance under the Amended and
Restated Credit Agreement is currently in default. These matters
raise substantial doubt about the ability of the Corporation to
continue as a going concern.
AMERICAN APPAREL: Reports $53.8 Million Total Net Sales in July
---------------------------------------------------------------
American Apparel, Inc., announced preliminary sales for the month
ended July 31, 2012. The Company reported that for the month of
July, total net sales on a preliminary basis increased 14% to
$53.8 million when compared to the month ended July 31, 2011.
Between the same periods, comparable store sales on a preliminary
basis increased an estimated 20% and wholesale net sales increased
an estimated 7%.
"We are pleased to announce very strong performance across our
retail, wholesale, and online channels," said Dov Charney, Chief
Executive Officer. "Our stores are now posting double digit
comparative store sales and more than ninety percent of our stores
posted positive comparative results during the month of July. We
are confident that our inventory and merchandising strategy is
aligned to continue this trend into the back to school selling
season."
A copy of the press release is available for free at:
http://is.gd/ViLFhA
About American Apparel
Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP)
-- http://www.americanapparel.com/-- is a vertically integrated
manufacturer, distributor, and retailer of branded fashion basic
apparel. As of September 2010, American Apparel employed over
10,000 people and operated 278 retail stores in 20 countries,
including the United States, Canada, Mexico, Brazil, United
Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the
Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan,
South Korea and China.
Amid liquidity problems and declining sales, American Apparel in
early 2011 reportedly tapped law firm Skadden, Arps, Slate,
Meagher & Flom and investment bank Rothschild Inc. for advice on a
restructuring.
In April 2011, American Apparel said it raised $14.9 million in
rescue financing from a group of investors led by Canadian
financier Michael Serruya and private equity firm Delavaco Capital
Corp., allowing the casual clothing retailer to meet obligations
to its lenders for the time being. Under the deal, the investors
were buying 15.8 million shares of common stock at 90 cents
apiece. The deal allows the investors to purchase additional
27.4 million shares at the same price.
The Company reported a net loss of $39.31 million in 2011 and a
net loss of $86.31 million in 2010.
The Company's balance sheet at March 31, 2012, showed $331.38
million in total assets, $288.97 million in total liabilities and
$42.41 million in total stockholders' equity.
ASHLAND INC: Moody's Assigns 'Ba2' Rating to Proposed Notes
-----------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to Ashland Inc.'s
(Ashland) proposed notes due 2022. Ashland's Ba1 Corporate Family
Rating (CFR) and the ratings on its existing debt remain
unchanged. The proceeds from the new notes will be used to
partially refinance the $650 million 9-1/8% notes due 2017, for
which the company announced a cash tender offer that expires on
August 2, 2012. The ratings outlook is stable.
The following summarizes the rating activity:
Ashland Inc.
Unsecured notes due 2022 - Ba2 (LGD5, 78%)
The Baa3 rating on the notes due 2017 will be withdrawn should the
entire issue be repaid as a result of its tender offer.
Ratings Rationale
Ashland is taking advantage of the current low interest rate
environment to refinance its high coupon 9-1/8% notes due 2017,
extend the maturity of a tranche of its debt and raise senior
unsecured debt. Additionally, it may reduce debt by using existing
cash balances to partially fund the tender offer.
Ashland's Ba1 CFR is supported by a diversified portfolio of
chemical businesses, large and diverse revenue base in the US and
internationally, meaningful market shares in certain businesses
(e.g., Water Technologies, Specialty Ingredients), and operational
diversity also support the rating. The company continues to focus
on achieving an investment grade rating. Moody's expects that
Ashland will apply free cash flow towards debt reduction and
reduce its leverage (3.5x as of June 30, 2012 pro forma for the
acquisition and refinancing of its 9.125% notes or 2.8x before
Moody's analytical adjustments which add approximately $1.7
billion to debt) to its stated 2.0x target (before Moody's
analytical adjustments). Moody's expects it will limit the size of
acquisitions over the near-term in order to reduce leverage. The
CFR also reflects significant asbestos-related litigation and
environmental liabilities from both the legacy Ashland business
and the Hercules business.
The ratings outlook is stable. The ratings could be upgraded if
Ashland were to maintain steady EBITDA margins above 12%, Debt /
EBITDA below 3.0x and free cash flow / debt of at least 10%. The
ratings could be downgraded if Ashland is not successful in
realizing the targeted synergies from the ISP acquisition, is not
able to maintain its profit margins, does not generate free cash
flow / debt greater than 6% on a sustained basis (that is applied
towards debt reduction) or pursues further debt-financed
acquisitions prior to improving its credit metrics.
The principal methodology used in rating Ashland was the Global
Chemical Industry Methodology published in December 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
Ashland, headquartered in Covington, Kentucky, is a manufacturer
of specialty chemicals (including specialty ingredients,
intermediate chemicals, performance materials and water
technologies), and, through its Valvoline brand, a marketer of
premium-branded automotive and commercial lubricants. Ashland had
revenue of $8.3 billion for the twelve months ended June 30, 2012,
pro forma for the ISP acquisition.
ASHLAND INC: S&P Affirms 'BB' Corp. Credit Rating; Outlook Stable
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' senior
unsecured debt rating and a '5' recovery rating to Ashland Inc.'s
proposed offering of $500 million of senior unsecured notes due
2022. "The '5' recovery rating indicates our expectation of modest
(10%-30%) recovery in the event of a payment default. Ashland
plans to use the proceeds of this offering and cash on hand to
fund its tender offer for its $650 million secured 9-1/8% notes
due 2017," S&P said.
"At the same time, we affirmed our 'BB' corporate credit rating on
Ashland. We also affirmed our 'BB-' senior unsecured debt and 'B+'
subordinated debt ratings on the company," S&P said.
"Based on our updated recovery analysis, we are raising our senior
secured debt rating on Ashland to 'BB+' from 'BB' and revising the
recovery rating to '2' from '3'. These actions reflect the
significant reduction in the amount of senior secured debt
outstanding following the proposed refinancing. The '2' recovery
rating indicates our expectation of substantial (70%-90%) recovery
in the event of a payment default. The outlook is stable," S&P
said.
"Our ratings on Ashland Inc. reflect our assessment of the
company's business risk profile as 'satisfactory' and our
financial risk profile as 'aggressive'," said credit analyst
Cynthia Werneth. "The proposed refinancing, if successful, will
significantly lower Ashland's borrowing costs and will extend debt
maturities."
"The outlook is stable. The acquisition of ISP enhanced Ashland's
business risk profile through the addition of a substantial, high-
margin specialty chemicals business and should reduce earnings
cyclicality. We expect the proposed refinancing to result in a
substantial reduction in interest expense. This should increase
discretionary cash flow, which we expect the company to apply
primarily to debt reduction until it reaches management's target
debt to EBITDA ratio of about 2x (low-3x area after Standard &
Poor's adjustments). Thereafter, we expect the company to use
excess cash for bolt-on acquisitions and potentially higher
shareholder rewards. Until debt reduction is more significant, we
expect credit metrics to remain in a range appropriate for the
current ratings, including FFO to debt of 15%-20%," S&P said.
"We could raise the ratings slightly if earnings and cash flow
strengthen, and the company continues to reduce debt, resulting in
FFO to debt of more than 20% and debt to EBITDA of about 3x. We
think this could occur if revenue increases 7.5% from expected
2012 levels, the company achieves and maintains 18.5% EBITDA
margins, it reduces debt by another few hundred million dollars,
and other debt-like liabilities remain unchanged," S&P said.
"Although we view it as unlikely, we would lower the ratings if
FFO to debt dropped to less than 12% without clear prospects for
recovery. Our projections indicate that this could happen if
revenues were flat and EBITDA margins declined to about 13%," S&P
said.
AURASOUND INC: Presient A. Singha Resigns; Acting CFO Named
-----------------------------------------------------------
Aman Singha resigned as President of Aurasound, Inc., effective
July 24, 2012.
On June 12, 2012, the board of directors of the Company appointed
Anthony J. Fidaleo as acting Chief Financial Officer of the
Company. Mr. Fidaleo, age 53, has operated an accounting and
consulting practice since 1992, primarily acting in that role as
an acting chief financial officer or senior consultant for
publicly-traded companies of various sizes. From November 2005 to
February 2009, Mr. Fidaleo served as Chief Financial Officer,
Chief Operating Officer, Executive Vice President and a member of
the board of directors and operating committee of iMedia
International, Inc., an early-stage publicly-traded interactive
content solutions company. Mr. Fidaleo was recently appointed as
an independent member of the board of directors of OriginOil,
Inc., a developer of a breakthrough technology to convert algae
into renewable crude oil. Mr. Fidaleo is an inactive certified
public accountant in California and worked in the public
accounting field from 1982 to 1992, primarily with BDO Seidman,
LLP, where he attained the level of audit senior manager. Mr.
Fidaleo received a B.S. degree in Accounting from California State
University, Long Beach. There are no family relationships known
to the Company between Mr. Fidaleo and any other officers or
directors of the Company.
On July 20, 2012, the board of directors of the Company appointed
Bruce L. Graham, Edward Wu and Yu Zhang to fill vacant seats on
the board of directors. In connection with their appointments to
the board of directors of the Company, Mr. Graham, Mr. Wu and Ms.
Zhang will each receive compensation consisting of $10,000 per
year paid in equal quarterly installments. There are no
arrangements or understandings between any of Mr. Graham, Mr. Wu
or Ms. Zhang and any other persons pursuant to which such
individual was appointed to serve on the board of directors of the
Company.
On July 31, 2012, the Company's subsidiary, Aurasound Wuhan Co.,
Ltd., applied with the Wuhan Municipal Bureau of Commerce for
dissolution and liquidation of all of its assets. The Company
authorized the dissolution of Aurasound Wuhan because Aurasound
Wuhan had incurred substantial losses in recent periods.
About AuraSound, Inc.
Santa Ana, Calif-based AuraSound, Inc. (OTC BB: ARUZE) --
http://www.aurasound.com/-- develops, manufactures, and markets
audio products. AuraSound's products include TV soundbars, high-
drivers for TVs and laptops, subwoofers, and tactile transducers.
Hein & Associates LLP, in Irvine, Calif., expressed substantial
doubt about the Company's ability to continue as a going concern.
During the year ended June 30, 2011, the Company had negative cash
flow from operating activities amounting to $1.91 million and an
accumulated deficit of $36.9 million.
The Company's balance sheet at Dec. 31, 2011, showed $40.8 million
in total assets, $34.6 million in total liabilities, all current,
and $6.14 million in total stockholders' equity.
BENADA ALUMINUM: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Benada Aluminum Products, LLC
dba NONE
2540 Jewett Lane
Sanford, FL 32771
Bankruptcy Case No.: 12-10518
Chapter 11 Petition Date: August 1, 2012
Court: United States Bankruptcy Court
Middle District of Florida (Orlando)
Judge: Karen S. Jennemann
About the Debtor: Benada owns an aluminum products manufacturing
facility in Sanford, Florida. It has 135
employees. Benada was formed in 2011 to
purchase assets of two aluminum products
manufacturing companies. It purchased via 11
U.S.C. Sec. 363 the Sanford facility of Florida
Extruders International (Case No. 08-07761). It
also purchased the assets Miami, Florida-based
Benada Aluminum of Florida Inc. The Debtor has
since consolidated operations and operates only
out of its location in Sanford.
Debtor's Counsel: R. Scott Shuker, Esq.
LATHAM SHUKER EDEN & BEAUDINE LLP
P.O. Box 3353
Orlando, FL 32802
Tel: (407) 481-5800
Fax: (407) 481-5801
E-mail: bknotice@lseblaw.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Paul Melnuk, chairman and CEO.
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Hydro Aluminum Trade Debt $1,361,295
999 Cororate Blvd.
Suite 100
Linthicum, MD 21090
Premier Rollout Demand Letter re $380,000
Awnings Inc. misuse of proprietary
c/o Eric J. Newman, Esq. designs
Buckingham, Doolittle
P.O. Box 810155
Boca Raton, FL 33481-0155
Panther Trading AG Trade Debt $304,157
Baarerstrasse 63
6300 Zug, GR
Glencore Ltd. Trade Debt $252,927
Three Stamford Plaza
301 Tresser Blvd.
Stamford, CT 06901
Hunter Douglas Trade Debt $236,655
Metals, Inc.
915 W 175Th. Street
Homewood, IL 60430
Famis Trade Debt $184,575
Exco USA Trade Debt $101,924
Florida Power & Utility $75,642
Light Co.
Brown & Brown Inc. Insurance $62,044
Noble America Trade Debt $61,413
Bryan Cave LLP Legal Services $61,038
Rubin Brown, LLC Auditors $59,951
R.L.Best Company Trade Debt $49,368
Accounting Career Trade Debt $45,000
Consultants
Florida Public Utility $32,801
Utilities
Bulk Chemicals Trade Debt $27,351
American Douglas Trade Debt $25,800
Metals Inc.
Associated Packaging, Trade Debt $24,826
Inc.
CDT USA Inc. Trade Debt $19,994
Pesco Trade Debt $19,647
BERNARD L. MADOFF: Trustee Firm Charges $43.3MM for Oct. 1-Jan. 31
------------------------------------------------------------------
Michael Bathon, substituting for Bloomberg News bankruptcy
columnist Bill Rochelle, reports that the liquidator of Bernard
Madoff's brokerage and his firm put in a bill for $43.3 million in
fees for work from Oct. 1,2011, through Jan. 31, according to a
federal court filing in Manhattan. The law firm, Baker &
Hostetler LLP, has previously been paid $273 million for
liquidating the estate since 2008.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970. The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims
agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
US$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.)
The SIPA Trustee has said that as of March 31, 2012, through
prepetition litigation and other settlements, he has successfully
recovered, or reached agreements to recover, more than $9 billion
-- over 50% of the principal lost in the Ponzi scheme by those who
filed claims -- for the benefit of all customers of BLMIS.
The liquidation has so far has cost the Securities Investor
Protection Corp. $1.3 billion, including $791 million to pay a
portion of customers' claims.
Mr. Picard has so far made only one distribution in October of
$325 million for 1,232 customer accounts. Uncertainty created by
the appeals has limited Mr. Picard's ability to distribute
recovered funds. Outstanding appeals include the $5 billion
Picower settlement and the $1.025 billion settlement.
BERRY PLASTICS: S&P Affirms 'B-' Corp. Credit Rating; Outlook Pos
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Berry
Plastics Corp. to positive from stable. "At the same time, we
affirmed the 'B-' corporate credit rating on the company," S&P
said.
"We also affirmed the issue-level and recovery ratings on Berry's
first-lien senior secured debt rated at 'B' (one notch above the
corporate credit rating) with a recovery rating of '2', indicating
our expectation of a substantial recovery (70% to 90%) in the
event of a payment default. We rate Berry's second-lien and
subordinated debt and its parent company's senior unsecured debt
'CCC' (two notches below the corporate credit rating) with
recovery ratings of '6', which indicate our expectation of a
negligible recovery (0% to 10%)," S&P said.
"The outlook revision reflects our expectation of improving
operating trends supported by stable volumes and manageable raw
material costs," said credit analyst Henry Fukuchi. "Our ratings
on the company reflect the risks associated with its high debt
leverage and growth-via-acquisition strategy, as well as its
'fair' business risk profile."
"The positive outlook reflects our expectation that modest free
cash generation will result in gradual deleveraging that will1
improve the financial profile. If economic conditions and consumer
demand gradually improve, operating performance meets our
expectations, and Berry doesn't undertake any leveraging
acquisitions, then we believe credit metrics could strengthen
sufficiently to warrant an upgrade during the next 12 months. The
outlook does not incorporate unexpected debt funded acquisitions
or raw material spikes in the next few quarters. We could raise
the ratings by one notch if adjusted debt to EBITDA improves to
and seems likely to remain at about 6x or lower and if FFO to
total adjusted debt is about 9% to 10% consistently through a
business cycle. A downgrade seems unlikely at this time, given the
relative stability of most of Berry's end markets, sufficient
liquidity, in our view, to handle working capital swings, and our
belief that additional large leveraging acquisitions are
unlikely," S&P said.
BITI LLC: Files for Chapter 11 in New York
------------------------------------------
Oyster Bay, New York-based Biti LLC filed a Chapter 11 petition
(Bankr. S.D.N.Y. Case No. 12-74810) in New York on Aug. 2, 2012.
The Debtor, a Single Asset Real Estate as defined in 11 U.S.C.
Sec. 101(51B), estimated assets and debts of at least $10 million.
The Debtor owns 11.701 acres of property located at the south side
of Skillman Street, west of Bryant Avenue, Village of Roslyn.
According to the case docket, the Chapter 11 Plan and Disclosure
Statement are due Nov. 30, 2012.
BLUE BUFFALO: S&P Affirms Prelim. 'B' Corp. Credit Rating
---------------------------------------------------------
Standard & Poor's Ratings Services affirmed its preliminary 'B'
corporate credit rating on Wilton, Conn.-based Blue Buffalo Co.
Ltd., a manufacturer and marketer of pet food, and S&P revised the
outlook to positive from stable.
"We also affirmed our preliminary 'B+' issue-level rating on Blue
Buffalo's proposed $390 million senior secured credit facilities,
which consist of a $40 million revolving credit facility due 2017
and a $350 million term loan B due 2019. The preliminary recovery
rating remains unchanged at '2', reflecting our expectation that
lenders would receive substantial recovery (70%-90%) in the event
of a default. We understand that the company will use all of the
gross proceeds from the proposed term loan to fund a special
dividend to its shareholders," S&P said.
The ratings are subject to review upon receipt of final
documentation.
"Pro forma for the proposed transaction, we estimate Blue Buffalo
will have about $350 million in total debt outstanding," S&P said.
"The outlook revision reflects our estimate of reduced leverage
pro forma for the financing as the company has reduced the
proposed term loan to $350 million from $470 million and lowered
the amount of the proposed dividend," said Standard & Poor's
credit analyst Jeff Burian. "We could now consider an upgrade over
the outlook period if Blue Buffalo is able to continue to improve
and sustain its improvement in credit measures."
"The ratings on Blue Buffalo reflect our view that the company's
financial risk profile is 'highly leveraged' and its business risk
profile is 'vulnerable' under our criteria. Key credit factors in
our assessment of Blue Buffalo's business risk profile include its
narrow product focus; customer, supplier, and geographic
concentration; and the company's small size relative to its
financially stronger and larger competitors. We also considered
the benefits of Blue Buffalo's good market position and
participation in the faster growing natural segment of the U.S.
pet food industry, as well as the somewhat nondiscretionary and
recession-resistant nature of pet food," S&P said.
CANNERY CASINO: Moody's Affirms 'Caa1' CFR; Outlook Negative
------------------------------------------------------------
Moody's Investors Service revised Cannery Casino Resorts, LLC's
rating outlook to negative from stable. At the same time, Moody's
affirmed the company's Caa1 Corporate Family and Probability of
Default ratings along with its B3 first lien senior secured term
loan and revolver and Caa3 second lien term loan ratings.
The change in Cannery's rating outlook to negative considers the
near-term refinancing risk and the potential increase in the
company's debt cost that could erode interest coverage. The
company's $70 million revolver expires in February 2013 and its
1st lien term loan (approximately $155 million outstanding) and
delayed draw term loan (approximately $130 million outstanding)
both mature in May 2013.
While Moody's expects Cannery has a reasonable chance of being
able to refinance its capital structure given the quality of its
casino properties, its modestly improving EBITDA, lower capital
spending needs going forward, and past sponsor support, Moody's
believes volatile capital markets and high leverage could make it
difficult for the company to refinance in a manner that maintains
the company's relatively low weighted average cost of debt.
Cannery's weighted average cost of debt is currently at about 6%
but could increase significantly as part of any future
refinancing.
Cannery's Caa1 Corporate Family Rating reflects Moody's
expectation that Cannery will continue to be pressured by weak
gaming demand at its two Las Vegas properties, and as a result,
leverage will likely remain high. Debt/EBITDA was at about 6.8
times for the last twelve month period ended March 31, 2012 --
including a portion of the company's preferred stock. The ratings
are supported by Cannery's free cash flow and the contribution
from the company's Pennsylvania property which has seen improved
EBITDA for the last twelve month period ended March 31, 2012
compared to the prior year.
Ratings could be lowered if Cannery has not taken steps to address
its refinancing needs by the end of fiscal 2012, appears unable to
refinance for any reason, or operating performance deteriorates.
Cannery's rating outlook could return to stable if the company
successfully addresses the refinancing of its bank facilities at a
cost of capital that does not materially degrade the company's
interest coverage. A rating upgrade would require Cannery to
demonstrate a further, material and sustainable improvement in
earnings and leverage.
Ratings affirmed and LGD assessments revised:
Corporate Family Rating at Caa1
Probability of Default Rating at Caa1
Senior secured first lien term loan due May 2013 at B3 (LGD 3,
37% from LGD 3, 38%)
Senior secured first lien revolver maturing in February 2013 at
B3 (LGD 3, 37% from LGD 3, 38%)
Senior secured delayed draw term loan due May 2013 at B3 (LGD 3,
37% from LGD 3, 38%)
Senior secured second lien term loan due May 2014 at Caa3 (LGD 5,
87% from LGD 5, 89%)
The principal methodology used in rating Cannery Casino Resorts,
LLC was the Global Gaming Industry Methodology published in
December 2009. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
Cannery Casino Resorts, LLC is a privately held gaming company
that owns and operates one casino in Pennsylvania and two casinos
in Las Vegas, NV. The company generates about $500 million of
annual net revenue.
CATALYST PAPER: U.S. Court Confirms Plan of Arrangement
-------------------------------------------------------
Catalyst Paper Corporation reported a net loss of C$11.7 million
on C$312.8 million of sales in the second quarter of 2012,
compared with a net loss of C$47.4 million on sales of
C$297.8 million in the second quarter of 2011.
Net loss attributable to the company decreased by C$35.7 million
primarily due to higher after-tax operating earnings of
C$37.6 million, a C$6.0 million after-tax credit to reorganization
items in the quarter, an after-tax loss on fires of C$5.3 million
in Q2 2011, an after-tax gain on the disposal of fixed assets of
C$6.6 million, and an after-tax foreign exchange gain on the
revaluation of U.S. dollar denominated working capital of
C$3.9 million compared to an after-tax loss of C$1.1 million in Q2
2011, partially offset by higher after-tax interest expense of
C$7.1 million and an after-tax foreign exchange loss on
translation of U.S. dollar denominated debt of C$12.8 million
compared to an after-tax gain of $4.5 million in Q2 2011.
For the six months ended June 30, 2012, the Company reported a net
loss of C$38.1 million on C$628.6 million of sales, compared with
a net loss of C$60.6 million on C$601.4 million of sales for the
same period of 2011.
Net loss attributable to the company decreased by C$23.0 million
primarily due to higher after-tax operating earnings of
C$58.1 million, an after-tax loss on fires of C$5.3 million in
2011, and an after-tax gain on the disposal of fixed assets of
C$7.1 million, partially offset by a year-to-date after-tax
reorganization charge of C$16.4 million, higher after-tax interest
expense of C$14.6 million and an after-tax foreign exchange loss
on translation of U.S. dollar denominated debt of C$1.2 million
compared to an after-tax gain of C$15.2 million in 2011.
The Company's balance sheet at June 30, 2012, showed
C$730.7 million in total assets, $1.385 billion in total
liabilities, and a stockholders' deficiency of C$653.9 million.
Creditor Protection Proceedings
On Jan. 31, 2012, Catalyst Paper Corporation and certain of its
subsidiaries obtained an Initial Order from the Supreme Court of
British Columbia (the Court) under the Companies' Creditors
Arrangement Act (CCAA). The Company applied for recognition of
the Initial Order under Chapter 15 of title 11 of the U.S.
Bankruptcy Code. The Company entered into a Debtor-In-Possession
(DIP) Credit Agreement, pursuant to which a DIP Credit Facility of
approximately $175 million was confirmed by the Court.
On June 14, 2012, the company announced a second amended plan of
arrangement after receiving consent from a requisite number of
holders of 2016 Notes to move forward to a vote. The second
amended plan of arrangement included proposed changes regarding
the compromise of certain extended health benefits, modifications
to the salaried pension plan and application for additional
solvency deficit funding relief.
On June 25, 2012, the Company announced that it had received the
necessary creditor approval for the second amended plan of
arrangement. Approval of more than 99% of secured and unsecured
creditors was received. The Company also received confirmation of
regulatory approval by provincial order in council of the proposed
modifications to the salaried pension plan and the application for
additional funding relief.
The Court sanctioned the second amended plan of arrangement on
June 28, 2012, and the U.S. Bankruptcy Court in Delaware confirmed
the plan under the Chapter 15 process in a confirmation hearing on
July 27, 2012.
The British Columbia Supreme Court has approved an extension of
the Company's CCAA protection to Sept. 30, 2012. Implementation
of the second amended plan of arrangement is conditional on the
Company securing a new asset-based loan facility (ABL Facility)
and/or other exit loan facility. This condition must be met
before the Company can exit the CCAA process.
A copy of the 2012 Second Quarter Report is available for free at:
http://is.gd/NUFh5z
Headquartered in Richmond, British Columbia, Catalyst Paper
Corporation is largest producer of mechanical printing papers in
western North America. It also produces NBSK pulp which is
marketed primarily in Asia. Its business is comprised of three
business segments: specialty printing papers; newsprint; and pulp.
The Company operates four paper mills, three of which are located
in British Columbia (B.C.) in Crofton, Port Alberni, and Powell
River, and one in Snowflake, Arizona, which produces 100%
recycled-content paper.
CATALYST PAPER: To Permanently Close Snowflake Recycle Paper Mill
-----------------------------------------------------------------
Catalyst Paper announced the permanent closure of its Snowflake
recycle mill located in northeastern Arizona and its subsidiary
the Apache Railway Company. This follows extensive efforts to
improve the operation's financial performance in the face of
intense supply input and market pressures. The operation is
scheduled to shut production on Sept. 30, 2012.
"The decision to close Snowflake is an extraordinarily difficult
one given the exceptional effort that employees, unions and public
officials have given to address the unique challenges at this
mill, said President and CEO Kevin J. Clarke. "We understand and
regret the difficult impact within the Snowflake community and
surrounding region created by closure of the mill. I want to
acknowledge and thank all who have given us their unwavering
support and cooperation. There were no stones left unturned."
Catalyst implemented a number of measures since acquiring the
Snowflake operation in 2008, to address market challenges and
input cost pressures. These included production of higher-value
specialty paper grades at what was formerly a newsprint-only mill,
capital investment, productivity, quality and service
improvements, full leverage of the mill's environmental
attributes, and competitive labour agreements. Catalyst has also
explored a range of alternatives, including attempting to sell the
mill on a going concern basis.
However with newsprint demand down more than 10 per cent annually
since the end of 2008, old newsprint (ONP) price volatility and
higher freight costs as procurement and sales have been forced to
go further afield to source recycled paper supply and secure
product orders, the mill's profitability could not be restored.
ONP prices have increased approximately 163% since 2009. A US$5
per ton increase in ONP price has a negative impact of
approximately US$2 million on EBITDA and approximately US$1
million on net earnings. Snowflake generated negative EBITDA
since 2009. The closure of the mill is expected to result in
savings of annualized selling, general and administrative expenses
and avoid future operating losses associated with Snowflake.
Catalyst recorded a $161.8 million asset impairment charge,
required under GAAP, in the latter half of 2011. The closure will
result in some initial cash costs, which are expected to be
recouped from working capital and the sale of Snowflake mill
assets in 2013.
"Reduced quality of ONP as municipalities moved to single stream
waste recovery combined with ONP price volatility driven by export
markets were obstacles on the input side. Added to these
challenges are the protracted demand decline for recycled
newsprint and other printing papers. While we did everything
possible to prevent this outcome, employees, vendors and customers
needed the certainty that today's announcement provides," Mr.
Clarke said.
Mr. Clarke and other Catalyst executives met with employees and
union representatives at the Snowflake Mill and Apache Railway
Company to outline the closure plan. The operations currently
employ 308 salaried and hourly workers. Catalyst will honor its
obligations to employees and will work closely with suppliers,
customers and regulators through the wind-down of operations. The
site will subsequently be prepared for sale and repurposing.
Catalyst contacted Snowflake customers to advise them of specific
transition plans. The closure is not anticipated to have any
impact on operations at Catalyst's other mills. The Company
offers a range of environmentally preferred products, using fibre
sourced from sustainably managed forests and manufactured at its
low-carbon mills in BC.
About Catalyst Paper
Catalyst Paper Corp. -- http://www.catalystpaper.com/--
manufactures diverse specialty mechanical printing papers,
newsprint and pulp. Its customers include retailers, publishers
and commercial printers in North America, Latin America, the
Pacific Rim and Europe. With four mills, located in British
Columbia and Arizona, Catalyst has a combined annual production
capacity of 1.9 million tons. The Company is headquartered in
Richmond, British Columbia, Canada and its common shares trade on
the Toronto Stock Exchange under the symbol CTL.
Catalyst on Dec. 15, 2011, deferred a US$21 million interest
payment on its outstanding 11.00% Senior Secured Notes due 2016
and Class B 11.00% Senior Secured Notes due 2016 due on Dec. 15,
2011. Catalyst said it was reviewing alternatives to address its
capital structures and it is currently in discussions with
noteholders. Perella Weinberg Partners served as the financial
advisor.
In early January 2012, Catalyst entered into a restructuring
agreement, which will see its bondholders taking control of the
company and includes an exchange of debt for equity. The
agreement said it would slash the company's debt by C$315.4
million ($311 million) and reduce its cash interest expenses.
Catalyst also said it will continue to "operate and satisfy" its
obligations to customers, trade creditors, employees and retirees
in the ordinary course of business during the restructuring
process.
On Jan. 17, 2012, Catalyst applied for and received an initial
court order under the Canada Business Corporations Act (CBCA) to
commence a consensual restructuring process with its noteholders.
Affiliate Catalyst Paper Holdings Inc., filed for creditor
protection under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D.
Del. Case No. 12-10219) on the same day and sought recognition of
the Canadian proceedings.
Catalyst joins a line of paper producers that have succumbed to
higher costs, increased competition from Asia and Europe, and
falling demand as more advertisers and readers move online. In
2011, Cerberus Capital-backed NewPage Corp. filed for bankruptcy
protection, followed by SP Newsprint Co., owned by newsprint
magnate and fine art collector Peter Brant. In December, Wausau
Paper said it will close its Brokaw mill in Wisconsin, cut 450
jobs and exit its print and color business.
The Supreme Court of British Columbia granted Catalyst creditor
protection under the CCAA until April 30, 2012.
As of Dec. 31, 2011, the Company had C$737.6 million in total
assets and C$1.35 million in total liabilities.
As reported by the TCR on July 2, 2012, Catalyst received approval
for its reorganization plan from the Supreme Court of British
Columbia. The Company's second amended plan under the Companies'
Creditors Arrangement Act received 99% support from creditors.
CELL THERAPEUTICS: Files Form 10-Q, Incurs $50.1MM Net Loss in Q2
-----------------------------------------------------------------
Cell Therapeutics, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss attributable to CTI of $50.13 million for the three
months ended June 30, 2012, compared with a net loss attributable
to CTI of $16.99 million for the same period a year ago.
The Company reported a net loss attributable to CTI of
$67.58 million for the six months ended June 30, 2012, compared
with a net loss attributable to CTI of $36.73 million for the same
period during the prior year.
The Company's balance sheet at June 30, 2012, showed $38.34
million in total assets, $39.83 million in total liabilities,
$13.46 million in common stock purchase warrants, and a $14.95
million total shareholders' deficit.
The Company's available cash and cash equivalents were $14.8
million as of June 30, 2012. Subsequent to period end, the
Company received approximately $15.0 million in gross proceeds
from the issuance of preferred stock and warrants.
The Company does not expect that its existing cash and cash
equivalents, including additional funds received to date, will be
sufficient to fund its presently anticipated operations beyond the
fourth quarter of 2012. This raises substantial doubt about the
Company's ability to continue as a going concern.
The report of Marcum LLP, in San Francisco, Calif., dated
March 8, 2012, expressed an unqualified opinion, with an
explanatory paragraph as to the uncertainty regarding the
Company's ability to continue as a going concern.
Bankruptcy Warning
"Accordingly, we will need to raise additional funds and are
currently exploring alternative sources of equity or debt
financing. We may seek to raise such capital through public or
private equity financings, partnerships, joint ventures,
disposition of assets, debt financings or restructurings, bank
borrowings or other sources of financing. However, we have a
limited number of authorized shares of common stock available for
issuance and additional funding may not be available on favorable
terms or at all. If additional funds are raised by issuing equity
securities, substantial dilution to existing shareholders may
result. If we fail to obtain additional capital when needed, we
may be required to delay, scale back, or eliminate some or all of
our research and development programs and may be forced to cease
operations, liquidate our assets and possibly seek bankruptcy
protection."
A copy of the Form 10-Q is available for free at:
http://is.gd/gvqts9
To Issue $150-Million of Securities
The Company filed with the SEC a Form S-3 registration statement
relating to the sale of any combination of common stock, preferred
stock, debt securities, warrants, rights and units in one or more
offerings, up to an aggregate offering price of $150,000,000.
The Company's common stock is quoted on The NASDAQ Capital Market
and on the Mercato Telematico Azionario stock market in Italy
under the symbol "CTIC." On Aug. 1, 2012, the last reported sale
price of the Company's common stock on The NASDAQ Capital Market
was $0.49 per share.
A copy of the Form S-3 prospectus is available for free at:
http://is.gd/BbkjEM
About Cell Therapeutics
Headquartered in Seattle, Washington, Cell Therapeutics, Inc.
(NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is
a biopharmaceutical company committed to developing an integrated
portfolio of oncology products aimed at making cancer more
treatable.
Cell Therapeutics reported a net loss attributable to CTI of
US$62.36 million in 2011, compared with a net loss attributable
to CTI of US$82.64 million in 2010.
CENTRAL EUROPEAN: Commences Consent Solicitation to Obtain Waiver
-----------------------------------------------------------------
Central European Distribution Corporation is soliciting consents
from holders of the $380,000,000 principal amount of 9.125% Senior
Secured Notes due 2016 and EUR430,000,000 principal amount of
8.875% Senior Secured Notes due 2016 issued by CEDC Finance
Corporation International, Inc., and guaranteed by CEDC to obtain
a limited waiver with respect to the reporting covenants contained
in the indenture for the Notes.
CEDC currently anticipates that it may not be able to timely file
its quarterly report on Form 10-Q for the financial quarter ended
June 30, 2012, with the United States Securities and Exchange
Commission. Accordingly, the Consent Solicitation is being made
to obtain a waiver up to and including Nov. 12, 2012, of any and
all Defaults and Events of Default, and the consequences thereof,
that may have occurred or may occur under Section 4.14 (Reports)
of the Indenture including any Default that would result if CEDC
fails to file its 2nd Quarter Form 10-Q.
CEDC is offering to pay a consent fee of $2.50 in cash for each
$1,000 in principal amount of its 9.125% Notes for which it has
received and accepted consents and EUR2.50 in cash for each
EUR1,000 in principal amount of its 8.875% Notes for which it has
received and accepted consents. The consent fee will only be
payable in the event that CEDC fails to file with the SEC the 2nd
Quarter Form 10-Q by Aug. 14, 2012.
The Consent Solicitation will expire at 5:00 p.m., New York City
time, on Aug. 10, 2012, unless extended. Holders of the Notes who
validly deliver consents to the Waiver prior to the Consent
Deadline and do not validly revoke those consents will receive the
applicable consent fee described above if CEDC receives validly
delivered consents that are not validly revoked from the holders
of not less than a majority in aggregate principal amount of the
outstanding Notes, provided that the Consent Solicitation has not
been terminated prior to the Consent Deadline and the Waiver
becomes operative as per its terms as described in the Consent
Solicitation Statement. Holders may deliver their consents at any
time before the Consent Deadline. Holders may revoke their
consents as described in the Consent Solicitation Statement dated
Aug. 2, 2012. If CEDC files its 2nd Quarter Form 10-Q by Aug. 14,
2012, no consent fee will be payable.
The record date for determining the holders who are entitled to
consent is Aug. 1, 2012. The Waiver will become effective
following receipt by Deutsche Trustee Company Limited, as trustee,
of certification by CEDC that the Requisite Consents have been
received.
CEDC has retained Houlihan Lokey and Knight as solicitation agents
for the consent solicitation. Questions concerning the terms of
the consent solicitation should be directed to Houlihan Lokey
(Attn: Liability Management Group, +1 (212) 497-7864 or
liability_mgmt@hl.com) or Knight (Attn: Liability Management
Group, +44 (207) 997-7742 or liabilitymanagement@knight.com).
CEDC has also retained D.F. King & Co., Inc., to serve as its
Information and Tabulation Agent for the Consent Solicitation.
Requests for documents should be directed to cedc@dfking.com or in
the US on +1-212-269-5550 or (800) 549-6746 (toll free) or in
Europe on +44-207-920-9700.
Update on Financial Restatement and Annual Meeting
CEDC is currently reviewing its financial statements and has
commenced an internal investigation regarding CEDC's retroactive
trade rebates and related accounting issues. As the review is not
yet complete, CEDC anticipates that it may be unable to file its
2nd Quarter Form 10-Q with the SEC by Aug. 14, 2012, the due date
under SEC regulations. CEDC intends to file its amended periodic
reports including the restated financial statements and its 2nd
Quarter Form 10-Q with the SEC as soon as practicable.
In addition, the board of directors of CEDC, along with senior
management, continue to review the timing of CEDC's 2012 Annual
Meeting of Stockholders previously scheduled to be held on
June 29, 2012, in light of the need to restate its accounts and
expects to hold its 2012 Annual Meeting of Stockholders as soon as
practicable after completing the internal investigation.
About CEDC
Mt. Laurel, New Jersey-based Central European Distribution
Corporation is one of the world's largest vodka producers and
Central and Eastern Europe's largest integrated spirit beverages
business with its primary operations in Poland, Russia and
Hungary.
The Company's balance sheet at March 31, 2012, showed
US$2.033 billion in total assets, US$1.674 billion in total
liabilities, and stockholders' equity of US$358.45 million.
According to the regulatory filing, "[C]ertain credit and
factoring facilities are coming due in 2012, which the Company
expects to renew. Furthermore, our Convertible Senior Notes are
due on March 15, 2013. Our current cash on hand, estimated cash
from operations and available credit facilities will not be
sufficient to make the repayment on Convertible Notes and, unless
the transaction with Russian Standard Corporation is completed as
scheduled, the Company may default on them. The Company's cash
flow forecasts include the assumption that certain credit and
factoring facilities that are coming due in 2012 will be renewed
to manage working capital needs. Moreover, the Company had a net
loss and significant impairment charges in 2011 and current
liabilities exceed current assets at March 31, 2012. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern unless the transaction with Russian
Standard is completed as scheduled."
Ernst & Young Audit sp. z o.o., in Warsaw, Poland, expressed
substantial doubt about Central European'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
certain of the Company's credit and factoring facilities are
coming due in 2012 and will need to be renewed to manage its
working capital needs.
CENTRAL EUROPEAN: M. Kaufman Asked to be Appointed as Director
--------------------------------------------------------------
Mark Kaufman sent a letter to Roustam Tariko, non-executive
chairman of the Board of Directors of Central European
Distribution Corporation, and N. Scott Fine, lead director of the
Company. Mr. Kaufman proposed to be appointed as director
following William S. Shanahan's resignation from the Board.
"Since my appointment to the Russian Oversight Committee, I have
had the opportunity to make a preliminary assessment of the
Russian operations of CEDC," Mr. Kaufman wrote. "There is room
for significant improvement. Considering the stakes are high for
CEDC, I believe that no time should be wasted and new nominations
should focus on those with solid operational backgrounds and a
strong knowledge of the wine and spirit industry."
According to Mr. Kaufman, his appointment to the Board will also
help to facilitate and improve communication from the bottom
upward in the Company at a time when the Board urgently needs a
real-time and comprehensive understanding of the actual
operational situation in Russia.
Mr. Kaufman previously reported beneficial ownership of 6,960,250
common shares of the Company or a 9.6% equity stake as of Aug. 18,
2011.
A copy of the amended Schedule 13 filing is available for free at:
http://is.gd/Ihr3ns
About CEDC
Mt. Laurel, New Jersey-based Central European Distribution
Corporation is one of the world's largest vodka producers and
Central and Eastern Europe's largest integrated spirit beverages
business with its primary operations in Poland, Russia and
Hungary.
The Company's balance sheet at March 31, 2012, showed
US$2.033 billion in total assets, US$1.674 billion in total
liabilities, and stockholders' equity of US$358.45 million.
According to the regulatory filing, "[C]ertain credit and
factoring facilities are coming due in 2012, which the Company
expects to renew. Furthermore, our Convertible Senior Notes are
due on March 15, 2013. Our current cash on hand, estimated cash
from operations and available credit facilities will not be
sufficient to make the repayment on Convertible Notes and, unless
the transaction with Russian Standard Corporation is completed as
scheduled, the Company may default on them. The Company's cash
flow forecasts include the assumption that certain credit and
factoring facilities that are coming due in 2012 will be renewed
to manage working capital needs. Moreover, the Company had a net
loss and significant impairment charges in 2011 and current
liabilities exceed current assets at March 31, 2012. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern unless the transaction with Russian
Standard is completed as scheduled."
Ernst & Young Audit sp. z o.o., in Warsaw, Poland, expressed
substantial doubt about Central European'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
certain of the Company's credit and factoring facilities are
coming due in 2012 and will need to be renewed to manage its
working capital needs.
CHEMTURA CORP: Reorganization Items Down to $1-Mil. in Q2
---------------------------------------------------------
Chemtura Corporation's reorganization items net were $1 million in
the second quarter of 2012 which was $5 million lower than the
second quarter of 2011. The expense in both periods is comprised
of professional fees directly associated with the Chapter 11
reorganization and the impact of negotiated settlements of claims
for which Bankruptcy Court approval has been requested or
obtained. The Company made the disclosure in a press release
announcing the second quarter results. A copy of the report is
available free at http://is.gd/StpJJR
About Chemtura Corp.
Based in Middlebury, Connecticut, Chemtura Corporation --
http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a
global manufacturer and marketer of specialty chemicals, crop
protection products, and pool, spa and home care products.
Chemtura Corporation and 26 of its U.S. affiliates filed voluntary
petitions for relief under Chapter 11 (Bankr. S.D.N.Y. Case No.
09-11233) on March 18, 2009. The Debtors disclosed total assets
of $3.06 billion and total debts of $1.02 billion as of the
Chapter 11 filing.
M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York,
served as bankruptcy counsel for the Debtors. Wolfblock LLP was
the Debtors' special counsel. The Debtors' auditors and
accountant were KPMG LLP; their investment bankers are Lazard
Freres & Co.; their strategic communications advisors were Joele
Frank, Wilkinson Brimmer Katcher; their business advisors were
Alvarez & Marsal LLC and Ray Dombrowski served as their chief
restructuring officer; and their claims and noticing agent was
Kurtzman Carson Consultants LLC.
The Official Committee of Equity Security Holders tapped
Jay Goffman, Esq., and David Turetsky, Esq., at Skadden Arps Slate
Meagher & Flom LLP, in New York, as counsel. the Official
Committee of Unsecured Creditors retained Daniel H. Golden, Esq.,
Philip C. Dublin, Esq., and Meredith A. Lahaie, Esq., at Akin Gump
Strauss Hauer & Feld LLP, in New York, as counsel.
Chemtura completed its financial restructuring and emerged from
protection under Chapter 11 in November 2010. In connection with
the emergence, reorganized Chemtura is now listed on the New York
Stock Exchange under the ticker "CHMT".
CIRCLE ENTERTAINMENT: Posts $2.3 Million Net Loss in Q2 2012
------------------------------------------------------------
Circle Entertainment Inc. filed its quarterly report on Form 10-Q,
reporting a net loss of $2.26 million for the three months ended
June 30, 2012, compared with a net loss of $1.03 million for the
same period a year earlier.
For the six months ended June 30, 2012, the Company reported a net
loss of $3.62 million, compared with a net loss of $2.80 million
for the same period of 2011.
No revenue was generated for the three and six months ended
June 30, 2012, and 2011.
The Company's balance sheet at June 30, 2012, showed $7.00 million
in total assets, $16.50 million in total liabilities, and a
stockholders' deficit of $9.50 million.
As reported in the TCR on March 30, 2012, L.L. Bradford & Company,
LLC, in Las Vegas, Nevada, expressed substantial doubt about
Circle Entertainment'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 limited available cash, has a working capital deficiency and
will need to secure new financing or additional capital in order
to pay its obligations.
A copy of the Form 10-Q is available for free at:
http://is.gd/TE7Fn6
New York City-based Circle Entertainment Inc. has been pursuing
the development and commercialization of its new location-based
entertainment line of business since Sept. 10, 2010, which has and
will continue to require significant capital and financing. The
Company does not currently generate any revenues from this new
line of business. The Company has no long-term financing in place
or commitments for such financing to develop and commercialize its
new location-based entertainment line of business.
COMARCO INC: Has $2MM Bridge Financing & $3MM Equity Commitment
---------------------------------------------------------------
Comarco, Inc., entered into a combined debt and equity financing
transaction with its largest shareholder, Broadwood Partners, L.P.
Pursuant to this transaction, Broadwood has made a $2.0 million
six month secured loan to the Company to provide the Company with
near term liquidity. Broadwood also entered into a stock purchase
agreement with the Compay, by which it has agreed to purchase up
to 3.0 million shares of the Company's common stock, at a price of
$1.00 per share. This $1.00 per share purchase price
substantially exceeds the closing price of the Company's common
stock of $0.20 per share on Friday, July 27, 2012.
"Broadwood has made a strong commitment to Comarco by agreeing to
provide us with the Bridge Loan and committing to purchase up to
$3.0 million of our common stock at a substantial premium to
recent trading prices," said Tom Lanni, Chief Executive Officer of
Comarco. "We believe that this strong support from our largest
shareholder reflects Broadwood's view, shared by the Company, that
with additional capital we can succeed in using our patented
technology to grow our multi-function mobile power products
business. Also, with this financing, and the recent resolution of
a dispute with a former supplier announced last week, we continue
to rebuild Comarco?s balance sheet," added Mr. Lanni.
The $2.0 million Bridge Loan bears interest at a rate of 5.0% per
annum, is secured by all of the Company's assets, including its
patents and technology rights, will rank senior to all other
Company indebtedness and is due and payable in full, together with
accrued interest, on Jan. 28, 2013. The Company intends to use
the net proceeds of the Bridge Loan to fund its working capital
requirements and, to a lesser extent, capital expenditures
required in the operation of its business.
Broadwood currently owns approximately 21% of the Company's
outstanding shares. If the Company sells the maximum of 3.0
million shares to Broadwood under the Stock Purchase Agreement,
then Broadwood's ownership would increase to approximately 43% of
the Company's outstanding shares, and would further increase to
approximately 55% of the Company's outstanding shares, if
Broadwood were to exercise the Warrants in their entirety.
A copy of the Form 8-K disclosure is available for free at:
http://is.gd/RBtXK3
A copy of the Loan Agreement is available for free at:
http://is.gd/3e88Dq
A copy of the Stock Purchase Agreement is available at:
http://is.gd/s8EYlG
About Comarco Inc.
Based in Lake Forest, California, Comarco, Inc. (OTC: CMRO)
-- http://www.comarco.com/-- is a provider of innovative,
patented mobile power solutions that can be used to power and
charge notebook computers, mobile phones, and many other
rechargeable mobile devices with a single device.
Comarco reported a net loss of $5.31 million for the year ended
Jan. 31, 2012, compared with a net loss of $5.97 million during
the prior year.
After auditing the fiscal 2012 financial results, Squar, Milner,
Peterson, Miranda & Williamson, LLP, in Newport Beach, California,
expressed substantial doubt about the Company's ability to
continue as a going concern. The independent auditors noted that
the Company has suffered recurring losses and negative cashflow
from operations, has had declining working capital and
uncertainties surrounding the Company's ability to raise
additional funds.
The Company's balance sheet at April 30, 2012, showed $4.88
million in total assets, $6.89 million in total liabilities and a
$2.01 million total stockholders' deficit.
COMARCO INC: Louis Silverman Appointed to Board of Directors
------------------------------------------------------------
Comarco, Inc., announced that Louis E. Silverman (53), has been
appointed to the Company's Board of Directors. Mr. Silverman's
appointment was effective on July 28, 2012, and brings the total
number of board members to seven. Mr. Silverman was also elected
Chairman of the Board at that time.
Mr. Silverman most recently served as Chief Executive Officer of
Marina Medical Billing Service, a private equity-backed provider
of revenue cycle management services to emergency room physicians
nationally. At Marina, Mr. Silverman successfully focused the
Company's investments and growth efforts on the development and
implementation of industry-leading technology tools and on the
expansion of the Company's sales force and marketing efforts,
increasing facilities served by approximately 50%. These and
other development initiatives culminated in the Company's
successful sale in June 2012. Prior to joining Marina, Mr.
Silverman served as Chief Executive Officer of LifeComm, Inc., a
Qualcomm Inc.-incubated wireless health services start-up. Prior
to LifeComm, Mr. Silverman spent eight years as President and
Chief Executive Officer of Quality Systems Inc., where he led the
developer of medical and dental practice management software to
600% organic revenue growth and an increase in market value from
$42 million to approximately $1.2 billion. Previously, Mr.
Silverman was the Chief Operations Officer of Corvel Corporation.
He earned a Bachelor of Arts degree from Amherst College and a
Masters in Business Administration from Harvard Graduate School of
Business Administration.
"We are very excited that Lou has joined our Board as Chairman,"
said Tom Lanni, Chief Executive Officer of Comarco. "Lou is a
very experienced executive who brings to the Board, the Company,
and its shareholders a strong reputation for building significant
shareholder value in both private and public companies. He has an
impressive track record of turning business opportunities into
successful companies with significant revenue and profit growth,
resulting in substantial shareholder value creation. With Lou
joining our board as Chairman, the successful completion of the
financing that we announced yesterday, and the resolution of our
dispute with a former supplier that we announced last week, we
believe we are now positioned to pursue our strategy to drive the
successful adoption of our industry leading ChargeSource product.
We look forward to Lou's contributions and leadership as we enter
this exciting phase of our company's history."
"Comarco's patented technology and the sizable market potential
for its innovative products are compelling," said Mr. Silverman.
"These assets, along with a high-quality Board of Directors, an
established partnership with Lenovo, a supportive shareholder
base, and Tom Lanni's intimate knowledge of the product and market
provide a strong foundation from which the Company can pursue
future success. I am eager to begin my board service, and look
forward to working closely with Tom and my fellow board members to
further develop Comarco's business strategies and capabilities,
and to further position the Company to capitalize on its
technological advantages and growth opportunities."
Mr. Lanni continued, "We are grateful to Michael Levin for his
leadership as Chairman of the Board during the initial phase of
our turnaround. As Chairman of the Board, Mike led the effort to
position the Company for sustainability and viability and for that
we are thankful. Mike remains an integral member of the Board as
the Company enters the next phase of its development."
Mr. Silverman will receive compensation consisting of a cash
retainer of $13,000 per month. In addition, on Aug. 2, 2012, Mr.
Silverman was granted an option to purchase 250,000 shares of the
Company's common stock under the Company's 2011 Equity Incentive
Plan. The option has an exercise price of $0.40, which is higher
than the closing stock price of the Company's common stock on the
grant date. The option vests in full on the first anniversary of
the grant date.
In connection with Mr. Silverman's election as a director, the
Company intends to enter into its standard form of indemnification
agreement for directors with Mr. Silverman.
Concurrent with the appointment of Mr. Silverman as the Chairman
of the Board, Mr. Michael Levin will step down as the Chairman of
the Board, but will continue to serve as a director of the Company
and as the Chairman of the Audit and Finance Committee of the
Board. Mr. Levin's monthly cash retainer will be decreased to
$850 per month.
Effective July 28, 2012, at a special meeting of the Board, the
Board approved an amendment to Section 1(b) of Article IV of the
Company's Bylaws to increase the authorized number of directors
from five to six. The text of Section 1(b) of Article IV of the
Company's Bylaws, as amended, reads as follows:
"The exact number of directors shall be seven, until changed
as provided in subdivision (a) of this Section."
About Comarco Inc.
Based in Lake Forest, California, Comarco, Inc. (OTC: CMRO)
-- http://www.comarco.com/-- is a provider of innovative,
patented mobile power solutions that can be used to power and
charge notebook computers, mobile phones, and many other
rechargeable mobile devices with a single device.
Comarco reported a net loss of $5.31 million for the year ended
Jan. 31, 2012, compared with a net loss of $5.97 million during
the prior year.
After auditing the fiscal 2012 financial results, Squar, Milner,
Peterson, Miranda & Williamson, LLP, in Newport Beach, California,
expressed substantial doubt about the Company's ability to
continue as a going concern. The independent auditors noted that
the Company has suffered recurring losses and negative cashflow
from operations, has had declining working capital and
uncertainties surrounding the Company's ability to raise
additional funds.
The Company's balance sheet at April 30, 2012, showed $4.88
million in total assets, $6.89 million in total liabilities and a
$2.01 million total stockholders' deficit.
CONDOR DEVELOPMENT: Court OKs Shannon & Associates as Accountant
----------------------------------------------------------------
Condor Development, LLC, sought and obtained permission from the
U.S. Bankruptcy Court for the Western District of Washington to
employ Shannon & Associates, LLP, as accountant to prepare tax
returns, U.S. Trustee reports, and accounting information for a
reorganization plan.
The Debtor will hire Shannon & Associates on general retainer,
with their fees to be fixed on proper notice and hearing.
The firm attests it is a "disinterested person" within the meaning
of Section 101(14) of the Bankruptcy Code.
About Condor Development
Condor Development LLC, aka Ciara Inn and Condor Management Group,
operates the Comfort Inn Suites, a hotel located at Seatac,
Washington.
Condor Development filed a Chapter 11 petition (Bankr. W.D. Wash.
Case No. 12-13287) on March 30, 2012, in Seattle. The petition
was signed by Joseph Ciaramella, managing member. In its
schedules, the Debtor disclosed $16.4 million in total assets and
$9.11 million in total liabilities.
Affiliate Seattle Group also filed for Chapter 11 protection
(Bankr. Case No. 12-13263) on March 30, 2012, disclosing
$16.3 million in total assets and $9.21 million in total
liabilities.
CONDOR DEVELOPMENT: Court Approves Dave Magee as Realtor
--------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Washington
authorized Condor Development, LLC, to employ Dave Magee as
realtor to list, market and sell real property located in SeaTac,
Washington.
Mr. Magee will be paid a 5% commission with 2.5% being paid to Mr.
Magee as Listing/Seller's Agent and 2.5% to the Buyer's agent.
The Debtor believes it would be in the best interest of the estate
to have the property listed in the various multiple listing
services to gain the widest possible exposure.
Mr. Magee attests he's is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code.
About Condor Development
Condor Development LLC, aka Ciara Inn and Condor Management Group,
operates the Comfort Inn Suites, a hotel located at Seatac,
Washington.
Condor Development filed a Chapter 11 petition (Bankr. W.D. Wash.
Case No. 12-13287) on March 30, 2012, in Seattle. The petition
was signed by Joseph Ciaramella, managing member. In its
schedules, the Debtor disclosed $16.4 million in total assets and
$9.11 million in total liabilities.
Affiliate Seattle Group also filed for Chapter 11 protection
(Bankr. Case No. 12-13263) on March 30, 2012, disclosing
$16.3 million in total assets and $9.21 million in total
liabilities.
CLAIRE'S STORES: Jay Friedman Quits as Head of N.A. Business
------------------------------------------------------------
Claire's Stores, Inc., announced that Jay Friedman, President of
Claire's Stores North America, has resigned effective Aug. 2,
2012. Claire's has commenced a search with the executive
recruiting firm of Spencer Stuart to fill the open position.
Until a replacement is appointed, James D. Fielding, Claire's
Chief Executive Officer, will assume Mr. Friedman's duties.
Mr. Fielding commented: "We thank Jay for his efforts since
joining Claire's in January 2011. Jay has played a key role in
refining the Claire's and Icing strategies and launching Claire's
e-commerce site in North America. We wish Jay well in his future
endeavors. I look forward to working with Jay's talented North
America team during this interim period, and continuing our steps
for growth of the Claire's and Icing brands."
About Claire's Stores
Claire's Stores, Inc. -- http://www.clairestores.com/-- operates
as a specialty retailer of fashion accessories and jewelry for
preteens and teenagers, as well as for young adults in North
America and internationally. It offers jewelry products that
comprise costume jewelry, earrings, and ear piercing services; and
accessories, including fashion accessories, hair ornaments,
handbags, and novelty items.
Based in Pembroke Pines, Florida, Claire's Stores operates under
two brands: Claire's(R), which operates worldwide and Icing(R),
which operates only in North America. As of Jan. 31, 2009,
Claire's Stores, Inc., operated 2,969 stores in North America and
Europe. Claire's Stores also operates through its subsidiary,
Claire's Nippon, Co., Ltd., 213 stores in Japan as a 50:50 joint
venture with AEON, Co., Ltd. The Company also franchises 198
stores in the Middle East, Turkey, Russia, South Africa, Poland
and Guatemala.
The Company's balance sheet at April 28, 2012, showed $2.77
billion in total assets, $2.80 billion in total liabilities and a
$39.53 million stockholders' deficit.
CLEAR CHANNEL: Incurs $39 Million Net Loss in Second Quarter
------------------------------------------------------------
Clear Channel Communications, Inc., filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss attributable to the Company of $39.02
million on $1.60 billion of revenue for the three months ended
June 30, 2012, compared with a net loss attributable to the
Company of $53.17 million on $1.60 billion of revenue for the same
period during the prior year.
The Company reported a net loss attributable to the Company of
$182.65 million on $2.96 billion of revenue for the six months
ended June 30, 2012, compared with a net loss attributable to the
Company of $185.01 million on $2.92 billion of revenue for the
same period a year ago.
The Company's balance sheet at June 30, 2012, showed
$16.45 billion in total assets, $24.31 billion in total
liabilities and a $7.86 billion total member's deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/MErOmM
About Clear Channel
San Antonio, Texas-based CC Media Holdings, Inc. (OTC BB: CCMO) --
http://www.ccmediaholdings.com/-- is the parent company of Clear
Channel Communications, Inc. CC Media Holdings is a global media
and entertainment company specializing in mobile and on-demand
entertainment and information services for local communities and
premier opportunities for advertisers. The Company's businesses
include radio and outdoor displays.
Clear Channel reported a net loss of $302.09 million on $6.16
billion of revenue in 2011, compared with a net loss of $479.08
million on $5.86 billion of revenue in 2010. The Company had a
net loss of $4.03 billion on $5.55 billion of revenue in 2009.
Bankruptcy Warning
At March 31, 2012, the Company had $20.7 billion of total
indebtedness outstanding.
The Company said in its quarterly report for the period ended
March 31, 2012, that its ability to restructure or refinance the
debt will depend on the condition of the capital markets and the
Company's financial condition at that time. Any refinancing of
the Company's debt could be at higher interest rates and increase
debt service obligations and may require the Company and its
subsidiaries to comply with more onerous covenants, which could
further restrict the Company's business operations. The terms of
existing or future debt instruments may restrict the Company from
adopting some of these alternatives. These alternative measures
may not be successful and may not permit the Company or its
subsidiaries to meet scheduled debt service obligations. If the
Company and its subsidiaries cannot make scheduled payments on
indebtedness, the Company or its subsidiaries, as applicable, will
be in default under one or more of the debt agreements and, as a
result the Company could be forced into bankruptcy or liquidation.
* * *
The Troubled Company Reporter said on Feb. 10, 2012, Fitch Ratings
has affirmed the 'CCC' Issuer Default Rating of Clear Channel
Communications, Inc., and the 'B' IDR of Clear Channel Worldwide
Holdings, Inc., an indirect wholly owned subsidiary of Clear
Channel Outdoor Holdings, Inc., Clear Channel's 89% owned outdoor
advertising subsidiary. The Rating Outlook is Stable.
Fitch's ratings concerns center on the company's highly leveraged
capital structure, with significant maturities in 2014 and 2016;
the considerable and growing interest burden that pressures free
cash flow; technological threats and secular pressures in radio
broadcasting; and the company's exposure to cyclical advertising
revenue. The ratings are supported by the company's leading
position in both the outdoor and radio industries, as well as the
positive fundamentals and digital opportunities in the outdoor
advertising space.
CLEAR CHANNEL: Bank Debt Trades at 23.83% Off in Secondary Market
-----------------------------------------------------------------
Participations in a syndicated loan under which Clear Channel
Communications, Inc., is a borrower traded in the secondary market
at 76.17 cents-on-the-dollar during the week ended Friday, Aug. 3,
2012, a drop of 1.50 percentage points from the previous week
according to data compiled by LSTA/Thomson Reuters MTM Pricing and
reported in The Wall Street Journal. The Company pays 365 basis
points above LIBOR to borrow under the facility. The bank loan
matures on Jan. 30, 2016, and carries Moody's 'Caa1' rating and
Standard & Poor's 'CCC+' rating. The loan is one of the biggest
gainers and losers among 174 widely quoted syndicated loans with
five or more bids in secondary trading for the week ended Friday.
About Clear Channel
San Antonio, Texas-based CC Media Holdings, Inc. (OTC BB: CCMO) --
http://www.ccmediaholdings.com/-- is the parent company of Clear
Channel Communications, Inc. CC Media Holdings is a global media
and entertainment company specializing in mobile and on-demand
entertainment and information services for local communities and
premier opportunities for advertisers. The Company's businesses
include radio and outdoor displays.
Clear Channel had a net loss of $143.63 million on $1.36 billion
of revenue for the three months ended March 31, 2012. It reported
a net loss of $302.09 million on $6.16 billion of revenue in 2011,
compared with a net loss of $479.08 million on $5.86 billion of
revenue in 2010. The Company had a net loss of $4.03 billion on
$5.55 billion of revenue in 2009.
The Company's balance sheet at March 31, 2012, showed
$16.48 billion in total assets, $24.29 billion in total
liabilities, and a $7.80 billion total members' deficit.
At March 31, 2012, the Company had $20.7 billion of total
indebtedness outstanding.
Bankruptcy Warning
The Company said in its quarterly report for the period ended
March 31, 2012, that its ability to restructure or refinance the
debt will depend on the condition of the capital markets and the
Company's financial condition at that time. Any refinancing of
the Company's debt could be at higher interest rates and increase
debt service obligations and may require the Company and its
subsidiaries to comply with more onerous covenants, which could
further restrict the Company's business operations. The terms of
existing or future debt instruments may restrict the Company from
adopting some of these alternatives. These alternative measures
may not be successful and may not permit the Company or its
subsidiaries to meet scheduled debt service obligations. If the
Company and its subsidiaries cannot make scheduled payments on
indebtedness, the Company or its subsidiaries, as applicable, will
be in default under one or more of the debt agreements and, as a
result the Company could be forced into bankruptcy or liquidation.
* * *
The Troubled Company Reporter said on Feb. 10, 2012, Fitch Ratings
has affirmed the 'CCC' Issuer Default Rating of Clear Channel
Communications, Inc., and the 'B' IDR of Clear Channel Worldwide
Holdings, Inc., an indirect wholly owned subsidiary of Clear
Channel Outdoor Holdings, Inc., Clear Channel's 89% owned outdoor
advertising subsidiary. The Rating Outlook is Stable.
Fitch's ratings concerns center on the company's highly leveraged
capital structure, with significant maturities in 2014 and 2016;
the considerable and growing interest burden that pressures free
cash flow; technological threats and secular pressures in radio
broadcasting; and the company's exposure to cyclical advertising
revenue. The ratings are supported by the company's leading
position in both the outdoor and radio industries, as well as the
positive fundamentals and digital opportunities in the outdoor
advertising space.
DAFFY'S INC: Jemb Realty Is Purchaser of Leasehold Interests
------------------------------------------------------------
Daffy's, Inc., which commenced a voluntary case under chapter 11
of title 11 of the Bankruptcy Code in the Southern District of New
York on Aug. 1, 2012 an affiliate of JEMB Realty Corporation has
agreed to purchase Daffy's leasehold interests, certain real
estate fixtures and certain intellectual property. In addition,
pursuant to the agreement, a separate affiliate of JEMB Realty
Corporation has agreed to purchase three real estate properties
from Daffy's. The purchase price was not disclosed.
Said Morris Bailey, CEO of JEMB Realty, "JEMB Realty Corporation
is looking forward to capitalizing on its long-term experience and
knowledge in the greater New York area and to have the opportunity
to work with Daffy's with respect to the orderly wind up of
Daffy's operations and to provide payment in full to all of
Daffy's creditors. JEMB Realty looks forward to the expeditious
conclusion of the chapter 11 case and the closing of the
transactions described above."
JEMB Realty Corp., is an experienced real estate owner, developer
and manager headquartered in Manhattan that acquires, upgrades and
repositions commercial, retail and residential property in
existing and emerging city business districts. With its
subsidiary BUSAC Real Estate in Montreal, Quebec, JEMB owns and
operates in excess of 7.2 million square feet of commercial space
in North America.
As reported in the Troubled Company Reporter on Aug. 3, 2012,
Daffy's Inc., the 19-store chain selling discount designer brands
in the U.S. Northeast, will shut the business and has a bankruptcy
plan that would pay off creditors in full. Daffy's, which has
1,162 employees, filed simultaneously with its Aug. 1 bankruptcy
petition a Chapter 11 plan that would pay all holders of allowed
claims in full, with interest. The Debtor has not filed a
disclosure statement as it is no longer soliciting votes on the
Plan.
DAFFY'S INC: Case Summary & 30 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Daffy's, Inc.
aka Daffy's, Inc and Affliate
aka Daffy Dan's Bargaintown
aka Daffy's Corporation
One Daffy's Way
Secaucus, NJ 07094
Bankruptcy Case No.: 12-13312
Chapter 11 Petition Date: August 1, 2012
Court: United States Bankruptcy Court
Southern District of New York (Manhattan)
Judge: Martin Glenn
About Daffy's: Daffy's is a 19-store chain selling discount
designer brands in the U.S. Northeast. The Debtor
said it will shut the business. Daffy's, which has
1,162 employees, filed simultaneously with its
Aug. 1 bankruptcy petition a Chapter 11 plan that
would pay all holders of allowed claims in full,
with interest.
Debtor's Counsel: Andrea Bernstein, Esq.
Debra A. Dandeneau, Esq.
WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, NY 10153
Tel: (212) 310-8007
(212) 310-8000
E-mail: andrea.bernstein@weil.com
debra.dandeneau@weil.com
Debtor's
Claims Agent: DONLIN, RECANO & COMPANY, INC
Gordon Brothers
and Hilco
Merchant
Resources
Counsel' Steven Reisman, Esq.
CURTIS, MALLET-PREVOST, COLT & MOSLE LLP
101 Park Avenue
New York, NY 10178
Tel: 212-696-6065
E-mail: sreisman@curtis.com
Counsel for
Jericho
Acquisition,
Buyer of the
leasehold
interests: Brad Eric Scheler, Esq.
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON LLP
One New York Plaza
New York, NY 10004
Fax: (212) 859-4000
E-mail: Brad.Eric.Scheler@friedfrank.com
Daffy's Scheduled Assets: $51,106,469
Daffy's Scheduled Liabilities: $36,646,856
The petition was signed by Marcia Wilson, president & CEO.
Debtor's List of 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Chris Friedlander Trade debt $612,993
21 Pondfield Pkwy
Mt Vernon, NY 10552
Devito Verdi Trade debt $352,739
100 5th Ave., 16th fl.
New York, NY 10011
Falc USA Inc. Trade debt $271,574
21 Industrial Park Ave.
Westmoreland, NH 03467
Peerless Clothing Trade debt $267,753
International Inc.
200 Industrial Park Rd.
St. Albans, VT 05478
Latico Leathers Trade debt $238,863
321 Palmer Road
Denville, NJ 07834
Babakul Trade debt $176,307
Timberland LLC Trade debt $154,645
El International Trade debt $123,014
USA Inc.
International Trade debt $103,715
Intimates Inc.
NY Accessory Group LLC Trade debt $93,840
Sweet Romeo Trade debt $91,973
Westport Corporation Trade debt $86,814
Harbor Footwear Trade debt $86,105
Collection 18 Trade debt $80,977
Delta Galil USA Trade debt $80,836
Romeo & Juliet Trade debt $78,791
The Echo Design Trade debt $78,717
Group, Inc.
Annalee & Hope Trade debt $77,259
Kaktus Sportswear Inc. Trade debt $76,576
The Isabella Co. Trade debt $76,089
(New York), Inc.
Madden Mens Trade debt $71,774
Portolano Products Inc. Trade debt $70,358
Dreamwear Inc. Trade debt $69,148
2B Rych Trade debt $60,010
Nautica Mens Sleepwear Trade debt $57,568
Three Hands Corporation Trade debt $57,287
Oakhurst Partners LLC Trade debt $56,801
Derkon Leather Fashion Trade debt $55,290
Marc Fisher LLC Trade debt $55,441
Taching Inc. Trade debt $54,285
DAVITA INC: Moody's Confirms 'Ba3' CFR; Outlook Stable
------------------------------------------------------
Moody's Investors Service confirmed DaVita Inc.'s ("DaVita")
Corporate Family and Probability of Default Ratings at Ba3.
Moody's also assigned a Ba2 rating to the company's proposed $1.35
billion senior secured term loan A-3 and $1.65 billion senior
secured term loan B-2. Moody's understands that the proceeds of
the credit facilities, along with a contemplated offering of
unsecured notes and about $928 million in DaVita common stock,
will be used to fund the $4.4 billion acquisition of HealthCare
Partners Holdings, LLC ("HCP") (Ba2, rating under review for
downgrade). The rating outlook is stable. This rating action
concludes the ratings review on DaVita initiated on May 21, 2012.
HealthCare Partners is a multi-specialty provider organization
with over 700 physicians employed directly or through affiliates
in California, Florida and Nevada in addition to contracting with
more than 7,200 independent physicians. The company's revenues are
derived primarily by contracting with HMO's under a capitated
(prepaid) delegate model. The company had total revenues and
EBITDA of $2.4 billion and $527 million, respectively for fiscal
2011.
Following is a summary of Moody's ratings actions for DaVita Inc.:
Ratings assigned:
$1.35 billion senior secured term loan A-3 due 2017 at Ba2
(LGD 3, 33%)
$1.65 billion senior secured term loan B-2 due 2019 at Ba2
(LGD 3, 33%)
Ratings confirmed and LGD estimates revised:
Corporate Family Rating at Ba3
Probability of Default Rating at Ba3
$350 million senior secured revolving credit facility expiring
2015 at Ba2 (LGD 3, 33%) from (LGD 3, 34%)
$1.0 billion senior secured term loan A due 2015 at Ba2 (LGD 3,
33%) from (LGD 3, 34%)
$1.75 billion senior secured term loan B due 2016 at Ba2 (LGD 3,
33%) from (LGD 3, 34%)
$1.55 billion senior unsecured notes due 2018 and 2020 at B2
(LGD 5, 86%)
Rating to be withdrawn:
$200 million senior secured term loan A-2 credit facility due
2016 at Ba2 (LGD 3, 34%)
Ratings Rationale
DaVita's Ba3 Corporate Family Rating reflects its high leverage
following its acquisition of HealthCare Partners and the
challenges of operating an integrated care business for the first
time. Furthermore, despite a lower percentage of total revenues
-- post-acquisition -- expected to be earned from government
contracts, the acquisition will increase its exposure to the
potentially more volatile Medicare reimbursement rate system and
ongoing regulatory scrutiny facing the healthcare sector.
The rating is supported by the company's position as the second
largest dialysis service provider in an otherwise very fragmented
segment. Additionally, DaVita benefits from the recurring nature
of the treatments and customers' high loyalty to their clinic,
reflected in the company's strong profitability and stable cash
flow. Further, the acquisition should benefit DaVita's revenue
diversification as it enters into a new line of business, while
providing opportunities for further growth.
The stable rating outlook reflects Moody's expectation of near
term reimbursement stability in the dialysis segment but also
reimbursement pressures in its newly acquired integrated care
business. Moody's expects the company to focus on debt reduction
following the transaction and limit acquisitions to small tuck-
ins. The outlook also reflects Moody's expectation that leverage
will improve to below 4 times by the end of fiscal 2013.
Although, not likely in the near-term, Moody's could upgrade the
ratings if the company repays debt or grows earnings such that
leverage metrics were expected to be sustained below 3.5 times.
Additionally, Moody's could consider upgrading the ratings if cash
flow from operations and free cash flow to adjusted debt ratios
were expected to be sustained in the high and mid-teens level,
respectively.
Moody's could downgrade the rating if leverage continues to
increase following the transaction. For example, Moody's could
downgrade the ratings if Medicare reimbursement cuts are greater
than expected or if the company takes on additional debt for
acquisitions or shareholder initiatives. More specifically,
Moody's could downgrade the ratings if leverage is expected to
increase and be sustained above 4.5 times or free cash flow to
debt is expected to be sustained below 3%.
DaVita, headquartered in Denver, CO, is an independent provider of
dialysis services primarily in the US for patients suffering from
end-stage renal disease (chronic kidney failure). DaVita's
services are predominantly provided in the company's outpatient
dialysis centers. However, the company also provides home dialysis
services, inpatient dialysis services through contractual
arrangements with hospitals, laboratory services and other
ancillary services. The company recognized approximately $7.3
billion of revenue for the twelve months ended March 31, 2012.
The principal methodology used in rating DaVita, Inc. was the
Global Healthcare Service Providers Industry Methodology published
in December 2011.Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the U.S.,
Canada and EMEA published in June 2009.
DELPHI CORP: DPH Seeks Final Decree Closing ASEC, et al., Cases
---------------------------------------------------------------
Pursuant to Section 350 of the Bankruptcy Code, DPH Holdings Corp.
asks Judge Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York to enter a final decree and order
closing the Chapter 11 cases of another five of its debtor-
affiliates.
The Closing Debtors are:
Closing Debtor Case No. Petition Address
-------------- -------- ----------------
ASEC Manufacturing 05-44482 1301 Main General Parkway
General Partnership Catoosa, OK 74015
Tax ID#73-1474201
ASEC Sales 05-44484 1301 Main General Parkway
General Partnership Catoosa, OK 74015
Tax ID# 73-1474151
Delphi Automotive Systems 05-44596 5785 Delphi Drive
(Holding), Inc. Troy, MI 48098
Tax ID# 38-3422378
Delphi Automotive Systems 05-44593 5725 Delphi Drive
Overseas Corporation Troy, MI 48098
Tax ID#38-3318021
Delphi Automotive Systems 05-44632 5725 Delphi Drive
Services LLC Troy, MI 48098
Tax ID#38-3568834
DPH Holdings is also asking the Bankruptcy Court to retain
jurisdiction to enforce and interpret its own orders pertaining to
the Closing Debtors.
The Reorganized Debtors assert that as of July 6, 2012, they have
completed the process of reconciling all claims and have fully
consummated the Court-approved Modified Chapter 11 Plan with
respect to the Chapter 11 cases of ASEC Manufacturing General
Partnership and four other debtor affiliates.
Entry of a final decree as to the Closing Debtors is appropriate,
Cynthia J. Haffey, Esq., at Butzel Long, in Detroit, Michigan,
maintains.
She relays that that all six factors set forth in the 1991
Advisory Committee's Notes to Bankruptcy Rule 3022 have been
satisfied with respect to each of the Closing Debtors'
reorganization cases, where specifically (a) the Modified Plan
was approved on July 30, 2009 pursuant to a final order of
Bankruptcy Court, (b) there are no deposits that need to be
distributed with respect to the Closing Debtors, (c) the property
to proposed to be transferred pursuant to the Modified Plan has
been transferred with respect to each of the Closing Debtors, (d)
DPH Holdings is managing the assets of the Reorganized Debtors in
accordance with the Modified Plan, (e) DPH Holdings has commenced
distributions under the Modified Plan and will make the
distributions on account of Allowed Claims set forth in the
Modified Plan, and (f) all motions, contested matters, and
adversary proceedings will be finally resolved with respect to
each Closing Debtor prior to entry of the Final Decree and Order.
Likewise, Ms. Haffey says, each of the cases of the Closing
Debtors has reached the point of "substantial consummation" as
defined under Section 1101(2) of the Bankruptcy Code.
The Chapter 11 case of DPH Holdings and certain other Reorganized
Debtors will remain open to complete the administration and
implementation of the Modified Plan until a final decree is
entered in those cases, Ms. Haffey clarifies. Therefore, the
closing of the Closing Debtors' case will not impact the
continued implementation of the Modified Plan, she cites.
The Court has issued final decrees closing the Chapter 11 cases
of about 30 DPH Holdings' debtor affiliates in 2010 and 2011.
About Delphi Corp.
Based in Troy, Michigan, Delphi Corporation --
http://www.delphi.com/-- is a global supplier of electronics and
technologies for automotive, commercial vehicle and other market
segments. Delphi operates major technical centers, manufacturing
sites and customer support facilities in 30 countries.
The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead
Case No. 05-44481) on Oct. 8, 2005. John Wm. Butler Jr., Esq.,
John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps,
Slate, Meagher & Flom LLP, represented the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represented the Official Committee of Unsecured Creditors. As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.
The Court confirmed Delphi's plan on Jan. 25, 2008. The Plan
was not consummated after a group led by Appaloosa Management,
L.P., backed out from their proposal to provide US$2,550,000,000
in equity financing to Delphi. At the end of July 2009, Delphi
obtained confirmation of a revised plan, build upon a sale of the
assets to a entity formed by some of the lenders who provided
$4 billion of debtor-in-possession financing, and General Motors
Company.
On Oct. 6, 2009, Delphi's Chapter 11 plan of reorganization became
effective. A Master Disposition Agreement executed among Delphi
Corporation, Motors Liquidation Company, General Motors Company,
GM Components Holdings LLC, and DIP Holdco 3, LLC, divides
Delphi's business among three separate parties -- DPH Holdings
LLC, GM Components, and DIP Holdco 3.
Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings is
responsible for the post-Effective Date administration and
eventual closing of the Chapter 11 cases as well as the
disposition of certain retained assets and payment of certain
retained liabilities as provided under the Modified Plan.
Delphi Automotive PLC is UK-based company formed in May 2011 as a
holding company for US-based automotive parts manufacturer Delphi
Automotive LLP. Delphi Automotive LLP is the successor to the
former Delphi Corporation. At the time of its formation, Delphi
Automotive PLC filed an initial public offering seeking to raise
at least $100 million.
Bankruptcy Creditors' Service, Inc., publishes DELPHI BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceedings of Delphi
Corp. and its debtor-affiliates (http://bankrupt.com/newsstand/or
215/945-7000).
DELPHI CORP: DPH Holdings Files Report for 2nd Quarter 2012
-----------------------------------------------------------
DPH Holdings Corp. and its affiliates submitted to Judge Robert
D. Drain of the U.S. Bankruptcy Court for the Southern District of
New York on July 26, 2012, a consolidated operating report for the
quarter period ended June 30, 2012.
DPH Holdings President John C. Brooks said that the Reorganized
Debtors posted an operating income of $7 million for the second
quarter of 2012.
DPH Holdings Corp., et al.
Schedule of Disbursements
Three Months Ended June 30, 2012
DPH Holdings Corp. $4,958,000
ASEC Manufacturing General Partnership 0
ASEC Sales General Partnership 0
DPH Medical Systems Colorado LLC 0
DPH Medical Systems Texas LLC 0
DPH Medical Systems LLC 0
DPH-DAS Overseas LLC 0
DPH-DAS (Holding), LLC 0
DPH Diesel Systems LLC 0
DPH Connection Systems LLC 0
DPH-DAS Services LLC 0
DPH-DAS LLC 540,000
Mr. Brooks noted that disbursements were allocated to the legal
entities but all disbursements are being made by DPH Holdings
Corp.
In connection with the consummation of Delphi Corp.'s Confirmed
Modified First Amended Joint Plan of Reorganization, DIP Holdco
LLP, now known as Delphi Automotive LLP, as assignee of DIP
Holdco 3 LLC, through various subsidiaries and affiliates,
acquired on October 6, 2009, substantially all of the global core
business of Delphi Corp., now known as DPH Holdings Corp. and its
debtor affiliates, including the stock of Delphi Technologies,
Inc., and the membership interests in Delphi China LLC. Thus,
neither Delphi Technologies, Inc., nor Delphi China LLC is
included in the current quarterly operating report.
Debtor Delphi Technologies, Inc. filed with the Court a separate
operating report for the quarter ended June 30, 2012, disclosing
that its disbursements for the period totaled $50,482,000.
Delphi Corp. Treasurer Keith D. Stipp related that operating
expenses plus any applicable cure payments for the quarter ended
June 30, 2012, was used as a proxy for disbursements for Delphi
Technologies, Inc. Delphi Technologies, he added, had an
operating income of $43 million for the first quarter of 2012.
About Delphi Corp.
Based in Troy, Michigan, Delphi Corporation --
http://www.delphi.com/-- is a global supplier of electronics and
technologies for automotive, commercial vehicle and other market
segments. Delphi operates major technical centers, manufacturing
sites and customer support facilities in 30 countries.
The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead
Case No. 05-44481) on Oct. 8, 2005. John Wm. Butler Jr., Esq.,
John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps,
Slate, Meagher & Flom LLP, represented the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represented the Official Committee of Unsecured Creditors. As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.
The Court confirmed Delphi's plan on Jan. 25, 2008. The Plan
was not consummated after a group led by Appaloosa Management,
L.P., backed out from their proposal to provide US$2,550,000,000
in equity financing to Delphi. At the end of July 2009, Delphi
obtained confirmation of a revised plan, build upon a sale of the
assets to a entity formed by some of the lenders who provided
$4 billion of debtor-in-possession financing, and General Motors
Company.
On Oct. 6, 2009, Delphi's Chapter 11 plan of reorganization became
effective. A Master Disposition Agreement executed among Delphi
Corporation, Motors Liquidation Company, General Motors Company,
GM Components Holdings LLC, and DIP Holdco 3, LLC, divides
Delphi's business among three separate parties -- DPH Holdings
LLC, GM Components, and DIP Holdco 3.
Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings is
responsible for the post-Effective Date administration and
eventual closing of the Chapter 11 cases as well as the
disposition of certain retained assets and payment of certain
retained liabilities as provided under the Modified Plan.
Delphi Automotive PLC is UK-based company formed in May 2011 as a
holding company for US-based automotive parts manufacturer Delphi
Automotive LLP. Delphi Automotive LLP is the successor to the
former Delphi Corporation. At the time of its formation, Delphi
Automotive PLC filed an initial public offering seeking to raise
at least $100 million.
Bankruptcy Creditors' Service, Inc., publishes DELPHI BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceedings of Delphi
Corp. and its debtor-affiliates (http://bankrupt.com/newsstand/or
215/945-7000).
DELPHI CORP: Obama Aides Defend Bailout Cash for Retirees
---------------------------------------------------------
Former members of the US automotive industry bailout task force
maintained that U.S. taxpayers and auto workers would have fared
worse if President Barack Obama's auto bailout hadn't improved
pension of some of Delphi Automotive Plc union retirees while
cutting those of salaried workers, Angela Greiling Keane of
Bloomberg News reported.
"I remain convinced today that it was the best course of action
available at that time," Matthew Feldman, Esq., a bankruptcy
attorney who was on the task force, said at a U.S. House
subcommittee hearing on July 11, 2012, Bloomberg cited. "I
recognize that the restructuring process imposed painful but
necessary actions on many of Delphi stakeholders."
Mr. Feldman and fellow task force members Ron Bloom and Harry
Wilson were called before a House Oversight and Government Reform
hearing on July 11, Bloomberg relayed. They agreed to answer
questions from Inspector General Christy Romero at the hearing.
The July 11 hearing was the panel's third on Delphi's pension and
General Motors' involvement in it, Bloomberg stated.
As part of U.S. assistance to GM and Chrysler Group LLC in 2009,
about $1 billion of U.S. Treasury money was spent on a so-called
top-off of pension for hourly employees at Delphi, which was spun
off from GM in 1999, the report recounted. Salaried Delphi
retirees had their pensions cut as part of the deal.
Mr. Bloom insisted at the hearing that GM was honoring its
contracts when it topped off the United Auto Workers pensions,
Bloomberg said.
However, certain members of the panel are not convinced the three
officials are fully cooperating in the investigation into the
Delphi pensions. "It's clear from their attitude that they have
no interest in telling what happened," U.S. Rep. Michael Turner,
R-Ohio, said in a July 11 interview, according to Daniel Howes of
The Detroit News. "We want to get the pension restored. We
believe what they did was wrong and we want to prove it."
DSRA Get Docs From PBGC
Meanwhile, the Delphi Salaried Retirees Association disclosed the
Pension Benefit Guaranty Corporation finally made its first
document production on June 7, 2012, turning over 62,000 pages of
emails and documents. The materials concern PBGC's 2009
termination of the pension plan of more than 20,000 current and
future salaried Delphi retirees during the auto bailout, resulting
in the reductions of earned pensions by as much as 70%.
The DSRA noted that the document production was done 20 months
after Federal U.S. District Judge Arthur Tarnow ordered in
September 2010 that Delphi's salaried retirees were entitled to
conduct discovery in their lawsuit against the PBGC.
About Delphi Corp.
Based in Troy, Michigan, Delphi Corporation --
http://www.delphi.com/-- is a global supplier of electronics and
technologies for automotive, commercial vehicle and other market
segments. Delphi operates major technical centers, manufacturing
sites and customer support facilities in 30 countries.
The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead
Case No. 05-44481) on Oct. 8, 2005. John Wm. Butler Jr., Esq.,
John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps,
Slate, Meagher & Flom LLP, represented the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represented the Official Committee of Unsecured Creditors. As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.
The Court confirmed Delphi's plan on Jan. 25, 2008. The Plan
was not consummated after a group led by Appaloosa Management,
L.P., backed out from their proposal to provide US$2,550,000,000
in equity financing to Delphi. At the end of July 2009, Delphi
obtained confirmation of a revised plan, build upon a sale of the
assets to a entity formed by some of the lenders who provided
$4 billion of debtor-in-possession financing, and General Motors
Company.
On Oct. 6, 2009, Delphi's Chapter 11 plan of reorganization became
effective. A Master Disposition Agreement executed among Delphi
Corporation, Motors Liquidation Company, General Motors Company,
GM Components Holdings LLC, and DIP Holdco 3, LLC, divides
Delphi's business among three separate parties -- DPH Holdings
LLC, GM Components, and DIP Holdco 3.
Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings is
responsible for the post-Effective Date administration and
eventual closing of the Chapter 11 cases as well as the
disposition of certain retained assets and payment of certain
retained liabilities as provided under the Modified Plan.
Delphi Automotive PLC is UK-based company formed in May 2011 as a
holding company for US-based automotive parts manufacturer Delphi
Automotive LLP. Delphi Automotive LLP is the successor to the
former Delphi Corporation. At the time of its formation, Delphi
Automotive PLC filed an initial public offering seeking to raise
at least $100 million.
Bankruptcy Creditors' Service, Inc., publishes DELPHI BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceedings of Delphi
Corp. and its debtor-affiliates (http://bankrupt.com/newsstand/or
215/945-7000).
DELPHI CORP: Summit Polymers Opposes Amended Complaints
-------------------------------------------------------
On behalf of Summit Polymers, Inc., Bryan R. Walters, Esq., at
Varnum LLP, in Grand Rapids, Michigan, asserts DPH Holdings and
certain of its affiliated debtors' motion for leave to file
amended complaints should be denied as futile:
-- with regard to the $674,588 in alleged transfers that were
not made by Plaintiff Delphi Automotive Systems LLC and
were instead made by Delphi Mechatronic Systems;
-- with respect to the $787,803 in alleged transfers involving
contracts that were expressly assumed under the First
Amended Joint Plan of Reorganization;
-- with regard to the $939,904 in alleged transfers involving
contracts that were assumed by the Reorganized Debtors
pursuant to a letter agreement dated April 13, 2006, between
Summit and the Reorganized Debtors. The agreement was
entered pursuant to the Court Order approving procedures to
assume certain amended and restated sole source supplier
agreements; and
-- with regard to the $999,214 alleged transfer governed by a
letter agreement dated March 22, 2006, between the
Reorganized Debtors and Summit. The agreement was entered
pursuant to the Court Order authorizing continuation of
vendor rescue program and payment of prepetition claims of
financially distressed sole source suppliers and vendors
without contracts, in which the Reorganized Debtors agreed
to waive and release any preference claims with regard to
the alleged transfer.
Summit will suffer prejudice if the Court allows the Reorganized
Debtors to pursue preference claims on the amounts noted, Mr.
Walters argues.
He elaborates that Summit (i) agreed to a number of terms and
conditions for future business that were highly favorable to the
Reorganized Debtors, and (ii) waived its lien rights and
reclamation rights -- in exchange for the Reorganized Debtors
agreeing to assume those contracts and waive their preference
claims.
Summit's statement was filed in the complaint captioned Delphi
Corporation, et al., plaintiff v. Summit Polymers, Inc.,
defendant, Adv. Proc. No. 07-02661 (RDD) (Bankr. S.D.N.Y.)
DPH & Heraeus Stipulate
DPH Holdings Corp. and its reorganized debtor affiliates entered
into a stipulation with Heraeus Metal Processing, LLC and Heraues
Precious Metals Management LLC for the dismissal with prejudice
of the complaints the Reorganized Debtors filed against Heraeus,
Adversary Proceeding Nos. 07-02442 (RDD) and 07-02445 (RDD)
(Bankr. Ct. S.D.N.Y.).
The Reorganized Debtors are represented by Cynthia Haffey, Esq.,
at Butzel Long, in Detroit, Michigan. The Heraeus Entities are
represented by William M. Barron, Esq., at Epstein Becker & Green
P.C., in New York.
About Delphi Corp.
Based in Troy, Michigan, Delphi Corporation --
http://www.delphi.com/-- is a global supplier of electronics and
technologies for automotive, commercial vehicle and other market
segments. Delphi operates major technical centers, manufacturing
sites and customer support facilities in 30 countries.
The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead
Case No. 05-44481) on Oct. 8, 2005. John Wm. Butler Jr., Esq.,
John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps,
Slate, Meagher & Flom LLP, represented the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represented the Official Committee of Unsecured Creditors. As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.
The Court confirmed Delphi's plan on Jan. 25, 2008. The Plan
was not consummated after a group led by Appaloosa Management,
L.P., backed out from their proposal to provide US$2,550,000,000
in equity financing to Delphi. At the end of July 2009, Delphi
obtained confirmation of a revised plan, build upon a sale of the
assets to a entity formed by some of the lenders who provided
$4 billion of debtor-in-possession financing, and General Motors
Company.
On Oct. 6, 2009, Delphi's Chapter 11 plan of reorganization became
effective. A Master Disposition Agreement executed among Delphi
Corporation, Motors Liquidation Company, General Motors Company,
GM Components Holdings LLC, and DIP Holdco 3, LLC, divides
Delphi's business among three separate parties -- DPH Holdings
LLC, GM Components, and DIP Holdco 3.
Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings is
responsible for the post-Effective Date administration and
eventual closing of the Chapter 11 cases as well as the
disposition of certain retained assets and payment of certain
retained liabilities as provided under the Modified Plan.
Delphi Automotive PLC is UK-based company formed in May 2011 as a
holding company for US-based automotive parts manufacturer Delphi
Automotive LLP. Delphi Automotive LLP is the successor to the
former Delphi Corporation. At the time of its formation, Delphi
Automotive PLC filed an initial public offering seeking to raise
at least $100 million.
Bankruptcy Creditors' Service, Inc., publishes DELPHI BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceedings of Delphi
Corp. and its debtor-affiliates (http://bankrupt.com/newsstand/or
215/945-7000).
DELPHI CORP: Withdraws Injunction Plea vs. Antitrust Suit
---------------------------------------------------------
DPH Holdings and certain of its affiliated debtors and Delphi
Automotive LLP withdrew in its entirety their Joint Motion for
entry of an order enforcing the Modified Plan and Plan
Modification Order, which sought to enjoin certain multidistrict
antitrust litigation pending against the Reorganized Debtor and
New Delphi captioned In re Automotive Wire Harness Sys. Antitrust
Litig., No. 2:12-md-02311-MOB (E.D. Mich.)
On June 14, 2012, the plaintiffs in the Antitrust Actions
voluntarily dismissed the Reorganized Debtors and New Delphi from
the Antitrust Actions without prejudice.
About Delphi Corp
Based in Troy, Michigan, Delphi Corporation --
http://www.delphi.com/-- is a global supplier of electronics and
technologies for automotive, commercial vehicle and other market
segments. Delphi operates major technical centers, manufacturing
sites and customer support facilities in 30 countries.
The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead
Case No. 05-44481) on Oct. 8, 2005. John Wm. Butler Jr., Esq.,
John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps,
Slate, Meagher & Flom LLP, represented the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represented the Official Committee of Unsecured Creditors. As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.
The Court confirmed Delphi's plan on Jan. 25, 2008. The Plan
was not consummated after a group led by Appaloosa Management,
L.P., backed out from their proposal to provide US$2,550,000,000
in equity financing to Delphi. At the end of July 2009, Delphi
obtained confirmation of a revised plan, build upon a sale of the
assets to a entity formed by some of the lenders who provided
$4 billion of debtor-in-possession financing, and General Motors
Company.
On Oct. 6, 2009, Delphi's Chapter 11 plan of reorganization became
effective. A Master Disposition Agreement executed among Delphi
Corporation, Motors Liquidation Company, General Motors Company,
GM Components Holdings LLC, and DIP Holdco 3, LLC, divides
Delphi's business among three separate parties -- DPH Holdings
LLC, GM Components, and DIP Holdco 3.
Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings is
responsible for the post-Effective Date administration and
eventual closing of the Chapter 11 cases as well as the
disposition of certain retained assets and payment of certain
retained liabilities as provided under the Modified Plan.
Delphi Automotive PLC is UK-based company formed in May 2011 as a
holding company for US-based automotive parts manufacturer Delphi
Automotive LLP. Delphi Automotive LLP is the successor to the
former Delphi Corporation. At the time of its formation, Delphi
Automotive PLC filed an initial public offering seeking to raise
at least $100 million.
Bankruptcy Creditors' Service, Inc., publishes DELPHI BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceedings of Delphi
Corp. and its debtor-affiliates (http://bankrupt.com/newsstand/or
215/945-7000).
DENNY'S CORP: Files Form 10-Q, Reports $4.6MM Net Income in Q2
--------------------------------------------------------------
Denny's Corporation filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing net income
of $4.60 million on $124.73 million of total operating revenue for
the quarter ended June 27, 2012, compared with net income of $8.13
million on $135.85 million of total operating revenue for the
quarter ended June 29, 2011.
The Company reported net income of $10.46 million on $251.46
million of total operating revenue for the two quarters ended
June 27, 2012, compared with net income of $12.25 million on
$271.65 million of total operating revenue for the two quarters
ended June 29, 2011.
The Company's balance sheet at June 29, 2012, showed $328.88
million in total assets, $331.65 million in total liabilities and
a $2.77 million total shareholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/NZBkfE
About Denny's Corporation
Based in Spartanburg, South Carolina, Denny's Corporation (NASDAQ:
DENN) -- http://www.dennys.com/-- Denny's is one of America's
largest full-service family restaurant chains, consisting of 1,348
franchised and licensed units and 232 company-owned units, with
operations in the United States, Canada, Costa Rica, Guam, Mexico,
New Zealand and Puerto Rico.
The Company said in its annual report for the year ended Dec. 28,
2011, that as the Company is heavily franchised, its financial
results are contingent upon the operational and financial success
of its franchisees. The Company receives royalties, contributions
to advertising and, in some cases, lease payments from its
franchisees. The Company has established operational standards,
guidelines and strategic plans for its franchisees; however, the
Company has limited control over how its franchisees' businesses
are run. While the Company is responsible for ensuring the
success of its entire chain of restaurants and for taking a longer
term view with respect to system improvements, the Company's
franchisees have individual business strategies and objectives,
which might conflict with the Company's interests. The Company's
franchisees may not be able to secure adequate financing to open
or continue operating their Denny's restaurants. If they incur
too much debt or if economic or sales trends deteriorate such that
they are unable to repay existing debt, it could result in
financial distress or even bankruptcy. If a significant number of
franchisees become financially distressed, it could harm the
Company's operating results through reduced royalties and lease
income.
* * *
Denny's carries 'B2' corporate family and probability of default
ratings from Moody's Investors Service and a 'B+' corporate credit
rating from Standard & Poor's.
As reported by the TCR on April 20, 2012, Standard & Poor's
Ratings Services withdrew all of its ratings, including the 'B+'
corporate credit rating on Spartanburg, S.C.-based Denny's Corp.
at the company's request. There is no rated debt outstanding.
DEWEY & LEBOEUF: Executive's Pay May be Targeted
------------------------------------------------
Michael Bathon, substituting for Bloomberg News bankruptcy
columnist Bill Rochelle, reports that Dewey & LeBoeuf LLP's former
executive director, Stephen DiCarmine, may have received almost
$3 million in salary, bonuses and expense reimbursements from May
31, 2011 to May 15,2012, the defunct law firm estimated in a
filing. Chief Financial Officer Joel Sanders may have been paid
slightly less, at $2.9 million, including a $600,000 bonus on Feb.
15.
The report notes the executives were listed in a category of
creditors who were also insiders as part of a routine case filing
on July 26 showing payments made within a year of the company's
bankruptcy. Such payments are sometimes subject to clawbacks or
lawsuits by a firm's liquidators, along with outflows in other
periods.
According to Bloomberg, the numbers in Dewey's financial
statements are mostly estimates and shouldn't be relied on, the
defunct firm said. Executives are listed by title, not by name,
in the compensation pages.
Kathryn Coleman represents Mr. DiCarmine. Mr. Sanders's lawyer is
William Schwartz.
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.
DEX MEDIA EAST: Bank Debt Trades at 46.64% Off in Secondary Market
------------------------------------------------------------------
Participations in a syndicated loan under which Dex Media East LLC
is a borrower traded in the secondary market at 53.36 cents-on-
the-dollar during the week ended Friday, Aug. 3, 2012, an increase
of 3.21 percentage points from the previous week according to data
compiled by LSTA/Thomson Reuters MTM Pricing and reported in The
Wall Street Journal. The Company pays 250 basis points above
LIBOR to borrow under the facility. The bank loan matures on Oct.
24, 2014. The loan is one of the biggest gainers and losers among
174 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Friday.
About R.H. Donnelley & Dex Media East
Dex One, headquartered in Cary, North Carolina, is a local
business marketing services company that includes print
directories and online voice and mobile search.
R.H. Donnelley Corp. and 19 of its affiliates, including Dex
Media East LLC, Dex Media West LLC and Dex Media Inc., filed for
Chapter 11 protection (Bank. D. Del. Case No. 09-11833 through 09-
11852) on May 28, 2009. They emerged from bankruptcy on Jan. 29,
2010. On the Effective Date and in connection with its emergence
from Chapter 11, RHD was renamed Dex One Corporation.
Dex One reported a net loss of $518.96 million in 2011 compared
with a net loss of $923.59 million for the eleven months ended
Dec. 31, 2010.
* * *
As reported in the April 2, 2012 edition of the TCR, Moody's
Investors Service has downgraded the corporate family rating (CFR)
for Dex One Corporation's to Caa3 from B3 based on Moody's view
that a debt restructuring is inevitable. Moody's has also changed
Dex's Probability of Default Rating (PDR) to Ca/LD from B3
following the company's purchase of about $142 million of par
value bank debt for about $70 million in cash. The Caa3 rating
also reflects Moody's view that additional exchanges at a discount
are likely in the future since the company amended its bank
covenants to make it possible to repurchase additional bank debt
on the open market through the end of 2013.
As reported by the TCR on April 4, 2012, Standard & Poor's Ratings
Services raised its corporate credit rating on Cary, N.C.-based
Dex One Corp. and related entities to 'CCC' from 'SD' (selective
default). "The upgrade reflects our assessment of the company's
credit profile after the completion of the subpar repurchase
transaction in light of upcoming maturities, future subpar
repurchases, and our expectation of a continued week operating
outlook," explained Standard & Poor's credit analyst Chris
Valentine.
DIMENSIONS HEALTH: Moody's Affirms 'B3' Rating on $57-Mil. Bonds
----------------------------------------------------------------
Moody's Investors Service affirms the B3 bond rating assigned to
approximately $57 million of Series 1994 fixed rate bonds issued
by Dimensions Health Corporation (DHC) through the Prince George's
County, MD. The rating outlook remains stable.
Summary Rating Rationale
The B3 rating affirmation and stable rating outlook reflect a
history of demonstrated financial support from the State and
County that continue to keep DHC in operation. The operating
subsidies are intended to continue through FY 2015 as the State,
County, University of Maryland Medical System (UMMS), University
Systems of Maryland, and DHC collaborate toward a goal of
revamping and transforming healthcare delivery in the County with
the proposed establishment of a new regional medical center
supported by a network of primary care physicians and ambulatory
care sites. The affirmation is further supported by growth in
unrestricted cash balance, reduced expenses in recent years, and
management's continued focus on improving performance and quality
in collaboration with UMMS during the transition to a potential
new healthcare system. However, these factors only partially
offset the continued large operating losses (excluding operating
grants) that are budgeted to increase in FY 2013, large
outstanding liabilities including debt, unfunded pension and
retiree health benefit liabilities, significant capital needs from
deferred maintenance and reliance on government funding to remain
viable. There is also uncertainty on how the new healthcare
system, and DHC's existing bond and pension obligations will be
funded.
Strengths
* A large, essential safety-net healthcare system located in
Prince George's County, Maryland serving a large Medicaid and
uninsured population (revenue base of $340 million, 18,000
admissions, and 120,000 ER visits).
* Fully funded debt service reserve fund on all fixed rate debt
outstanding; track-record of making monthly debt service
payments and semi-annual bond payments in full and on time and
never missing a bond payment
* State of Maryland (rated Aaa/negative) and Prince George's
County, MD (rated Aaa/negative) have demonstrated historical
support to keep DHC in operation by providing operating grants
totaling approximately $194 million over the last eleven years
and through FY 2012. DHC received State and County combined
operating grants of $30 million in ($15 million each from the
State and County) in FY2011 and FY 2012, which is the highest
combined amounts to date. As per the letter of intent signed on
October 20, 2011, the State and County committed to DHC and/or
any new owner or owners, additional combined $30 million ($15
million each) in FY's 2013 through FY 2015 subject to State and
County appropriations process. The combined $30 million has
been approved for FY 2013. The State has also approved $14.5
million of capital grants of which $14 million will be received
in FY 2013 ($4 million for FY 2012 and $10 million for FY 2013)
and remaining $10 million in FY 2014
Challenges
* Although improved, unrestricted liquidity levels remain thin
relative to outstanding debt and unfunded pension liabilities;
as of May 31, 2012, unrestricted liquidity increased to $39.7
million relative to total comprehensive debt of $149 million
outstanding, equating to improved but still weak 38 days cash
on hand, 63% cash-to-debt and 28% cash-to-comprehensive debt
* Continued large operating losses and operating cash flow
deficit excluding operating grants. Through eleven months of FY
2012, DHC posted a large operating loss of $18.2 million (-5.4%
margin) and operating cash flow deficit of $6.7 million (-2.0%
margin) (3.9% and 7.3% margins, respectively, including
combined $31.4 million of State, County, and Magruder Memorial
Hospital Trust operating grants); DHC received the full
expected $30 million ($15 million each) from the State and
County on a quarterly basis through May 31, 2012
* Very modest capital spending over last the last ten years (less
than one times depreciation expense) resulting in a steadily
increased and well above median 22 years average age of plant
in FY 2012; deferred maintenance remains an ongoing challenge;
planned capital spending on implementation of electronic
medical record will be funded through cash reserves; the
estimated cost of the replacement of the existing Siemens
system and installation of the Cerner system is estimated to be
approximately $35-$40 million to be spent over five years
* Serves a high government (Medicare (29%) and Medicaid (28%) and
Self Pay (11.2%) population (combined represent 68% of gross
revenues in FY 2012)
Outlook
The stable outlook reflects continued demonstrated financial
support from the State and County approved for FY 2013 and
intended to continue through FY 2015, growth in unrestricted cash
balance and management's continued focus on improving performance
and quality in collaboration with UMMS.
What Could Make the Rating Go - Up
A rating upgrade is unlikely in the short-term; over the longer-
term, a rating upgrade would be considered if DHC secures stable
and permanent external funding, demonstrates and sustains
substantial operating improvement; rebuilds cash to demonstrate
long-term viability.
What Could Make the Rating Go - Down
Inability to find a solution to financial challenges and failure
to secure long-term funding; further erosion of operating
performance, decline in cash balance; payment default on bonds and
pension plan payments and/or bankruptcy filing
Prinicipal Rating Methodology
The principal methodology used in this rating was Not-For-Profit
Healthcare Rating Methodology published in March 2012.
DOLLAR THRIFTY: DBRS Affirms 'B' Issuer Rating
----------------------------------------------
DBRS, Inc. has commented that the ratings of Dollar Thrifty
Automotive Group, Inc. (DTAG or the Company), including its Issuer
Rating of B (high) are unaffected following the Company's
announcement of 2Q12 results. The trend on all ratings remains
Positive.
In a slowing economic environment, DTAG reported record second
quarter profits reflecting the benefits of the Company's focus on
profitable transaction channels, sound fleet management, and
management's focus on cost containment initiatives, all of which
were aided by a strong used vehicle market. For 2Q12, DTAG
reported net income of $49.4 million, up from $42.5 million in the
comparable period a year ago. Revenues were stable year-on-year
(YoY) at $395.4 million as higher rental volumes and improved
fleet utilization largely offset the softening in price. DBRS
sees DTAG's ability to offset weakness in pricing without
increasing fleet incrementally as demonstrating sound fleet
management. For 2Q12, fleet utilization was 80.3% compared to
77.4% a year ago. Direct vehicle and operating expenses increased
to 61.7% of revenues compared to 60.7% a year ago reflecting less
favorable loss experience on its vehicle insurance programs
compared to 2Q11. Corporate adjusted EBITDA of $88.3 million the
quarter was 9% higher than a year ago, on higher margins. To this
end, Corporate-Adjusted EBITDA margin expanded to 22.3% in 2Q12,
180 basis points higher than a year ago, primarily reflecting the
higher gains from vehicle sales. DBRS considers DTAG's 2Q12
results as demonstrating the solid earnings ability of the
franchise and the benefits of improving industry fundamentals.
Fleet cost trends remain favorable. For 2Q12, vehicle depreciation
per unit stood at $162 per month, 14% lower than a year ago. The
lower per unit depreciation costs reflects lower base depreciation
rates on the fleet due to the current strength of the used vehicle
market and higher gains on sale of risk vehicles. For the
quarter, DTAG disposed of 18,700 risk vehicles compared to
approximately 8,400 in the year ago quarter as the Company
continued the significant fleet refresh begun in 1Q12. As a
result, gains on the sale of vehicles totaled $22.5 million in the
current quarter compared to $17.8 million.
Total vehicle rental revenue was stable YoY at $378.9 million, as
an increase in rental demand was offset by lower pricing
reflecting the competitive rate environment. Transaction days
increased 4.2%, demonstrating the rebound in leisure travel demand
as consumer confidence recovers from recessionary lows. However,
pricing, revenue per day, was down 3.8% lower from the comparable
period a year ago.
From DBRS's perspective, DTAG maintains a well-managed liquidity
and funding profile supported by good access to the capital
markets. Demonstrating the Company's prudent management of
liquidity, in 2Q12, DTAG utilized excess cash to provide
collateral enhancement under its fleet financing facilities in
lieu of incurring additional interest expense by using letters of
credit. DBRS notes that DTAG has the flexibility to replace a
portion of the cash collateral with funds borrowed under its
revolving credit facility or with letters of credit. Available
liquidity at quarter end totaled $869 million, including cash,
restricted cash and capacity available under the revolving credit
facility. At June 30, 2012, tangible net worth was $663 million
and the Company had no corporate debt outstanding.
DUKE ENERGY: Jenner & Block Tapped by NCUC to Probe Progress Deal
-----------------------------------------------------------------
Jenner & Block and Partner Anton R. Valukas have been retained as
outside counsel by the North Carolina Utilities Commission to
assist in its investigation of whether the Commission was misled
regarding the approval and closing of the business combination of
Duke Energy Corporation and Progress Energy, Inc. The Commission
initially held hearings to receive the testimony of James E.
Rogers, William D. Johnson and four members of Duke's board of
directors. The Commission has also requested the production of
certain documents related to its investigation.
Mr. Valukas served as the court-appointed Examiner in the Lehman
Brothers Holdings bankruptcy, reportedly the largest bankruptcy in
U.S. history. He and a team of Jenner & Block attorneys
representing Mr. Valukas, as Examiner, produced a 2,200-page
account of the factors leading to the banking giant's collapse, an
event many commentators point to as triggering the economic crisis
of 2008.
Jenner & Block -- http://www.jenner.com/-- is a national law firm
with approximately 450 attorneys and offices in Chicago, Los
Angeles, New York and Washington, DC. Founded in 1914, Jenner &
Block is known for both its successful litigation practice and
sophisticated transactional work.
About Duke Energy
Duke Energy Corporation is an energy company. Duke Energy's
segments are U.S. Franchised Electric and Gas (USFE&G), Commercial
Power and International Energy. The remainder of Duke Energy's
operations is presented as Other. Its regulated utility
operations serve four million customers located in five states in
the Southeast and Midwest United States. Its Commercial Power and
International Energy business segments own and operate diverse
power generation assets in North America and Latin America,
including a portfolio of renewable energy assets in the United
States. Duke Energy operates in the United States primarily
through its direct and indirect wholly owned subsidiaries, Duke
Energy Carolinas, LLC (Duke Energy Carolinas), Duke Energy Ohio,
Inc., which includes Duke Energy Kentucky, Inc., and Duke Energy
Indiana, Inc. Effective July 2, 2012, the Company merged with
Progress Energy Inc. In July 2012, the Company acquired Chilean
Campanario power plant.
DYNEGY INC: Signs First Amendment to Plan Support Agreement
-----------------------------------------------------------
Dynegy Inc., Dynegy Holdings, LLC, the Consenting Senior
Noteholders, the Consenting Lease Certificate Holders and
Resources Capital Management Corporation entered into the First
Amendment to the Amended Plan Support Agreement.
In particular, the First Amendment provides among other things,
modifications made to conform to the Joint Plan:
(i) only (a) the holders of a majority of the aggregate
principal amount of the Senior Notes and constituting not
less than two Consenting Senior Noteholders or (b) the
holders of a majority of the aggregate principal amount of
Lease Certificates, and no other parties, may assert that
the Plan is not a "Conforming Plan" because of claims
asserted against Dynegy; and
(ii) in the event of a Non-Conforming Plan Assertion:
(a) the applicable parties, agree to seek a Conforming
Plan Determination or Non-Conforming Plan
Determination on an expedited basis and request that
the Bankruptcy Court set a hearing date no later than
20 days after the Non-Conforming Plan Assertion is
delivered;
(b) none of the parties to the Amended Plan Support
Agreement or the creditors' committee appointed in
the DH Chapter 11 Cases will seek, direct any other
person to seek, or support any other party in
seeking, appellate review of any Conforming Plan
Determination or Non-Conforming Plan Determination;
(c) if a Non-Conforming Plan Assertion is delivered by
either the Majority Consenting Senior Noteholders or
the Majority Consenting Lease Certificate Holders,
but not both, the parties who did not deliver a Non-
Conforming Plan Assertion will not be permitted to
deliver a Non-Conforming Plan Assertion once the
Bankruptcy Court renders a Conforming Plan
Determination or a Non-Conforming Plan Determination;
and
(d) if, and only if, a Non-Conforming Plan Assertion is
delivered by the Majority Consenting Senior
Noteholders or the Majority Consenting Lease
Certificate Holders, the Creditors' Committee may
appear and be heard in connection with that Non-C
Conforming Plan Assertion in the Bankruptcy Court;
provided that (i) the Creditors' Committee will not
(x) seek appellate review of a Conforming Plan
Determination or a Non-Conforming Plan Determination
or (y) file or otherwise initiate any request for
reconsideration of such determination and (ii) in the
event Dynegy and the party or parties who have made
the Non-Conforming Plan Assertion agree to a
consensual resolution of that assertion, the
Creditors' Committee will not have any further right
to appear or be heard in connection therewith;
(iii) Dynegy agrees to provide by Aug. 6, 2012, (a) copies of
all proofs of claim timely filed against Dynegy (and will
provide copies of untimely proofs of claim promptly after
receipt), and (b) on an expedited basis, any reasonably
requested diligence materials relating to the claims filed
against Dynegy, in each case to the PSA Parties;
(iv) the Sept. 10, 2012, deadline for entry of the Confirmation
Order will be extended to September 21, 2012; and
(v) solely in the event of a Non-Conforming Plan Assertion,
if, as of Sept. 21, 2012, the Bankruptcy Court has not yet
rendered a Conforming Plan Determination or a Non-
Conforming Plan Determination, (a) the deadline for the
entry of an order confirming a Conforming Plan shall be
extended to the date that is five days after the
Bankruptcy Court makes a Conforming Plan Determination or
a Non-Conforming Plan Determination; and (b) the deadline
for the occurrence of the effective date of a Conforming
Plan (currently Oct. 1, 2012) will be extended to the date
that is 15 days after the Plan Confirmation Milestone.
On June 8, 2012, Dynegy and DH, as co-plan proponents filed a
Third Amended Chapter 11 Plan of Reorganization for DH and a
related disclosure statement with the Bankruptcy Court reflecting
agreements reached among the Plan Proponents and DH's major
creditor constituencies. On June 18, 2012, the Plan Proponents
filed a Modified Third Amended Chapter 11 Plan of Reorganization
and a related disclosure statement with the Bankruptcy Court
reflecting certain amendments to the Third Amended Plan pursuant
to further agreements reached among DH, Dynegy and DH?s major
creditor constituencies. On July 3, 2012, the Bankruptcy Court
entered an order approving the Disclosure Statement in the DH
Chapter 11 cases.
On July 6, 2012, Dynegy filed a voluntary petition for relief
under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court.
On July 10, 2012, the Bankruptcy Court entered an order approving
the Disclosure Statement in the Dynegy Chapter 11 Case. The
orders approving the Disclosure Statement in the DH Chapter 11
Cases and the Dynegy Chapter 11 Case allowed DH and Dynegy to
begin soliciting formal creditor votes on the Plan and authorized
them to modify the Plan and the Disclosure Statement such that
they reflect the commencement of the Dynegy Chapter 11 Case and
constitute a plan of reorganization and disclosure statement for
both DH and Dynegy, each as debtors thereunder.
On July 12, 2012, DH and Dynegy filed in their respective Chapter
11 Cases a Joint Chapter 11 Plan of Reorganization for DH and
Dynegy and related disclosure statement, which reflects such
modifications. The Joint Plan is subject to confirmation by the
Bankruptcy Court and the confirmation hearing is scheduled for
Sept. 5, 2012.
A copy of the First Amendment is available for free at:
http://is.gd/VajsdT
About Dynegy
Through its subsidiaries, Houston, Texas-based Dynegy Inc.
(NYSE: DYN) -- http://www.dynegy.com/-- produces and sells
electric energy, capacity and ancillary services in key U.S.
markets. The power generation portfolio consists of approximately
12,200 megawatts of baseload, intermediate and peaking power
plants fueled by a mix of natural gas, coal and fuel oil.
Dynegy Holdings LLC and four other affiliates of Dynegy Inc.
sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case
No. 11-38111) Nov. 7, 2011, to implement an agreement with a
group of investors holding more than $1.4 billion of senior notes
issued by Dynegy's direct wholly-owned subsidiary, Dynegy
Holdings, regarding a framework for the consensual restructuring
of more than $4.0 billion of obligations owed by DH. If this
restructuring support agreement is successfully implemented, it
will significantly reduce the amount of debt on the Company's
consolidated balance sheet. Dynegy Holdings disclosed assets of
$13.77 billion and debt of $6.18 billion.
Dynegy Inc. on July 6, 2012, filed a voluntary petition to
reorganize under Chapter 11 (Bankr. S.D.N.Y. Case No. 12-36728) to
effectuate a merger with Dynegy Holdings, pursuant to Holdings'
Chapter 11 plan.
A settlement, which has already been approved by the bankruptcy
court, provides for Dynegy Inc. and Holdings to merge and for the
administrative claim granted to Dynegy Inc. in the Holdings
Chapter 11 case to be transferred out of Dynegy Inc. for the
benefit of its shareholders.
Dynegy Holdings and its affiliated debtor-entities are represented
in the Chapter 11 proceedings by Sidley Austin LLP as their
reorganization counsel. Dynegy and its other subsidiaries are
represented by White & Case LLP, who is also special counsel to
the Debtor Entities with respect to the Roseton and Danskammer
lease rejection issues. The financial advisor is FTI Consulting.
The Official Committee of Unsecured Creditors in Holdings' cases
has tapped Akin Gump Strauss Hauer & Feld LLP as counsel.
Dynegy Inc. is represented by White & Case LLP and advised by
Lazard Freres & Co. LLC.
EASTMAN KODAK: Wins Partial Victory Against Apple in Patent Fight
-----------------------------------------------------------------
David McLaughlin at Bloomberg News reports that Eastman Kodak Co.
won a partial victory against Apple Inc. over patents, defeating
Apple's ownership claims to two of 10 patents that Kodak plans to
sell as part of its bankruptcy restructuring.
According to the report, U.S. Bankruptcy Judge Allan Gropper in
Manhattan ruled in favor of Kodak on the patents, saying the
iPhone maker waited too long to assert its claims, according to an
Aug. 1 decision. Kodak sued Apple in June over the assets,
accusing Apple of trying to disrupt the patent auction planned for
next week.
The report relates Kodak asked Judge Gropper to rule in its favor
in a pretrial decision known as summary judgment. Kodak, based in
Rochester, New York, filed for bankruptcy in January and is
selling more than 1,000 patents related to the capture,
manipulation and sharing of digital images. An auction is
scheduled for Aug. 8.
The Bloomberg report discloses Judge Gropper said Kodak's ability
to sell the assets would be "cut off" if "unreasonably late
claims" by Apple aren't barred. The judge rejected claims of
inventorship and state law ownership by Apple to the two patents.
"If Apple's claims proceed despite their unreasonably delayed
commencement, Kodak might have to go back to the drawing board for
ways to fund its case," the judge wrote.
According to Bloomberg on the eight other patents, Judge Gropper
denied Kodak's motion for summary judgment. The judge said Kodak
could renew the request based on "a more complete record."
Apple spokeswoman Kristin Huguet declined to comment on the
decision. Apple has filed counterclaims against Kodak, saying
Kodak is claiming Apple's technology as its own.
Kodak spokeswoman Stefanie Goodsell said the company was pleased
with the part of ruling in its favor. Judge Gropper also ruled
against Flashpoint Technology Inc. with respect to the two patents
and three additional ones, according to the decision.
"With respect to several other patents to which Apple and
Flashpoint only recently asserted ownership claims, Kodak believes
that the facts will show that they are baseless, and nothing but
an attempt to interfere with the sale of our patent portfolio,"
Ms. Goodsell said in e-mailed statement, according to the report.
About Eastman Kodak
Rochester, New York-based Eastman Kodak Company and its U.S.
subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11
petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan.
Subsidiaries outside of the U.S. were not included in the filing
and are expected to continue to operate as usual.
Kodak, founded in 1880 by George Eastman, was once the world's
leading producer of film and cameras. Kodak sought bankruptcy
protection amid near-term liquidity issues brought about by
steeper-than-expected declines in Kodak's historically profitable
traditional businesses, and cash flow from the licensing and sale
of intellectual property being delayed due to litigation tactics
employed by a small number of infringing technology companies with
strong balance sheets and an awareness of Kodak's liquidity
challenges.
In recent years, Kodak has been working to transform itself from a
business primarily based on film and consumer photography to a
smaller business with a digital growth strategy focused on the
commercialization of proprietary digital imaging and printing
technologies. Kodak has 8,900 patent and trademark registrations
and applications in the United States, as well as 13,100 foreign
patents and trademark registrations or pending registration in
roughly 160 countries.
Kodak disclosed $5.10 billion in assets and $6.75 billion in
liabilities as of Sept. 30, 2011. The net book value of all
assets located outside the United States as of Dec. 31, 2011 is
$13.5 million.
Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtors. FTI Consulting,
Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is
the investment banker. Kurtzman Carson Consultants LLC is the
claims agent.
The Official Committee of Unsecured Creditors has tapped
Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel.
Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi,
Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the
Unofficial Second Lien Noteholders Committee.
Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato,
Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners
II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth
S. Grossman; and Paul Martin.
ECOSPHERE TECHNOLOGIES: Reports $920,000 Net Income in Q2
---------------------------------------------------------
Ecosphere Technologies, Inc., reported net income of $919,934 on
$8.62 million of total revenues for the three months ended
June 30, 2012, compared with a net loss of $1.54 million on
$2.36 million of total revenues for the same period during the
prior year.
The Company reported net income of $1.66 million on $16.98 million
of total revenues for the six months ended June 30, 2012, compared
with a net loss of $5.29 million on $4.59 million of total
revenues for the same period a year ago.
The Company's balance sheet at June 30, 2012, showed $11.89
million in total assets, $4.61 million in total liabilities, $4.03
million in total redeemable convertible cumulative preferred
stock, and $3.25 million in total equity.
"We are pleased to report our second consecutive quarter of net
income," stated Ecosphere Chairman and CEO Charles Vinick. "We
are building on the foundation we established in 2011, which is
paying off as we move through this year. Our revenue is up both
year-over-year and sequentially, and we continue to generate solid
margins. To date, we have delivered eight Ozonix EF80s to
Hydrozonix, and look forward to continuing to build an installed
base of systems that will generate recurring revenue and royalties
in the years ahead."
A copy of the press release is available for free at:
http://is.gd/xs2Rl1
About Ecosphere Technologies
Stuart, Fla.-based Ecosphere Technologies, Inc. (OTC BB: ESPH)
-- http://www.ecospheretech.com/-- is a diversified water
engineering, technology licensing and environmental services
company that designs, develops and manufactures wastewater
treatment solutions for industrial markets. Ecosphere, through
its majority-owned subsidiary Ecosphere Energy Services, LLC
("EES"), provides energy exploration companies with an onsite,
chemical free method to kill bacteria and reduce scaling during
fracturing and flowback operations.
The Company reported a net loss of $5.86 million in 2011,
following a net loss of $22.66 million in 2010, and a net loss of
$19.05 million in 2009.
EDISON MISSION: Bondholders May Recover 54%, JPM Analysts Say
-------------------------------------------------------------
Michael Bathon, substituting for Bloomberg News bankruptcy
columnist Bill Rochelle, reports that, according to JPMorgan Chase
& Co. analysts, bondholders of Edison International's generation
unit may recover more than 54 cents on the dollar in an
increasingly probable bankruptcy scenario for the unprofitable
power producer.
According to the report, Edison Mission Energy's bonds are trading
at about 54 cents, which JPMorgan high yield utilities analysts
Dave Katz and Bayina Bashtaeva estimate to be the recovery rate,
excluding net operating losses. Edison Mission may need to cut
its $3.7 billion debt by more than its $1 billion forecast, the
analysts wrote yesterday in a note. Chief Executive Officer Ted
Craver said the company would have to reduce a "sufficient" amount
to be able to achieve credit metrics allowing it to refinance the
remainder, according to a July 31 earnings conference call.
"This is an indication Edison would like to pursue a greater than
$1 billion reduction," the analysts wrote according to the report.
The Bloomberg report discloses even in bankruptcy, future payment
through the tax allocation agreement "is a positive for the
credit" and "increases the risk of a bankruptcy as it increases
the implied recovery of the credit with a filing" above 54 cents
on the dollar, they wrote.
The report relates that Edison International, owner of
California's second-largest electric utility, said in an Aug. 1
filing with the U.S. Securities and Exchange Commission that its
money-losing, unregulated generation unit may have to file for
Chapter 11 protection. Edison Mission has been hurt by a slump in
power prices and rising environmental-compliance costs for its
coal-fired power plants, and is in talks with bondholders to
restructure debt and may have to reorganize its generation unit
under new ownership if talks are unsuccessful, Craver said on a
conference call with investors.
About Edison Mission
Santa Ana, California-based Edison Mission Energy is a holding
company whose subsidiaries and affiliates are engaged in the
business of developing, acquiring, owning or leasing, operating
and selling energy and capacity from independent power production
facilities. EME also engages in hedging and energy trading
activities in power markets through its subsidiary Edison Mission
Marketing & Trading, Inc.
EME was formed in 1986 and is an indirect subsidiary of Edison
International. Edison International also owns Southern California
Edison Company, one of the largest electric utilities in the
United States.
As of Dec. 31, 2010, EME's subsidiaries and affiliates owned or
leased interests in 39 operating projects with an aggregate net
physical capacity of 10,979 MW of which EME's pro rata share was
9,852 MW. At Dec. 31, 2010, EME's subsidiaries and affiliates
also owned four wind projects under construction totaling 480 MW
of net generating capacity.
The Company reported a net loss of $1.07 billion in 2011, compared
with net income of $163 million in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $8.32 billion
in total assets, $6.66 billion in total liabilities, and
$1.66 billion in total equity.
* * *
As reported by the TCR on July 4, 2012, Standard & Poor's Ratings
Services lowered its corporate credit rating on Edison Mission
Energy (EME) and its subsidiaries Midwest Generation LLC (Midwest
Gen) and Edison Mission Marketing & Trading Inc. (EMMT), to 'CCC'
from 'CCC+' based on greater refinance risk in 2013 due to lower
cash flow over the medium term and reduced liquidity and greater
potential for corporate restructuring.
In the April 26, 2012, edition of the TCR, Fitch Ratings has
lowered Edison Mission Energy (EME) and Midwest Generation LLC's
(MWG) long-term Issuer Default Ratings (IDRs) to 'CC' from 'B-'.
The lower IDRs for EME and MWG reflect the challenges to the
companies' future solvency and liquidity caused primarily by a
prolonged decline in historic and forward power price curves,
rising operating and capital costs due to environmental
regulations and an unsustainably high debt burden.
ELEPHANT TALK: Incurs $4.9 Million Net Loss in Second Quarter
-------------------------------------------------------------
Elephant Talk Communications Corp. filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss of $4.99 million on $7.08 million of revenue
for the three months ended June 30, 2012, compared with a net loss
of $6.72 million on $7.79 million of revenue for the same period
during the prior year.
The Company reported a net loss of $10.99 million on
$15.66 million of revenue for the six months ended June 30, 2012,
compared with a net loss of $11.43 million on $16.29 million of
revenue for the same period a year ago.
The Company's balance sheet at June 30, 2012, showed $44.63
million in total assets, $17.30 million in total liabilities and
$27.32 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/jMQ0bw
About Elephant Talk
Lutz, Fla.-based Elephant Talk Communications, Inc. (OTC BB: ETAK)
-- http://www.elephanttalk.com/-- is an international provider of
business software and services to the telecommunications and
financial services industry.
EMMIS COMMUNICATIONS: Delays Vote on Preferred Stock Amendments
---------------------------------------------------------------
Emmis Communications Corporation is a party to litigation in the
United States District Court for the Southern District of Indiana
in which certain holders of the Company's 6.25% Series A
Cumulative Convertible Preferred Stock are seeking to enjoin a
shareholder vote on proposed amendments to the terms of the
Preferred Stock set forth in the Company's Second Amended and
Restated Articles of Incorporation. The shareholder vote on the
proposed amendments is scheduled to occur at a special meeting on
Aug. 14, 2012.
At the conclusion of a preliminary injunction hearing on Aug. 1,
2012, the Company agreed to defer any shareholder vote on the
proposed amendments until after Sept. 3, 2012, Labor Day. The
Company intends to effect this agreement by convening the special
shareholders' meeting on Aug. 14, 2012, and promptly adjourning
the meeting until after Labor Day. The District Court stated that
its ruling on the preliminary injunction would be issued on
Aug. 31, 2012.
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 DATA: Fitch Rates Proposed $750-Mil. Senior Notes 'BB-'
-------------------------------------------------------------
Fitch Ratings has assigned a 'BB-/RR2' rating to First Data
Corp.'s (FDC) proposed $750 million 10-year senior secured note
offering. Proceeds from the offering will be used to repay an
approximately equivalent amount of borrowings outstanding under
the company's remaining $3.4 billion senior secured term loan
maturing 2014. FDC's Issuer Default Rating (IDR) is currently
'B'. The Rating Outlook is Negative.
For an in-depth review of Fitch's credit analysis and outlook for
FDC, please see the report published June 6, 2012.
FDC reported solid results for its June 2012 quarter on Aug. 1.
For the quarter, adjusted revenue (which excludes reimbursable
expenses plus other adjustments) increased 3% over the prior year
period. Fitch's estimate of EBITDA for the quarter at $594
million was up 8.4%. For the latest 12 month (LTM) period, Fitch
estimates EBITDA at $2.3 billion, up 13% over the prior period.
Growth in the quarter was led by the company's domestic Retail
Alliance Services (RAS) segment which posted 8% revenue growth and
18% EBITDA growth. The RAS business continues to represent two-
thirds of consolidated EBITDA. International revenue declined 6%
but EBITDA declined only 1% due both to mix and continued
operational improvements.
Fitch estimates free cash flow for the quarter at $282 million and
$168 million on an LTM basis (adjusted for distributions to
minority partners). FDC's cash flow has been benefitting from
favorable working capital trends (related to the timing of
settlement payables and receivables) principally during its second
and fourth quarters over the past few years. This trend continued
in the June 2012 quarter but typically evens out in the third
quarter. Total working capital benefit to cash in the quarter was
$201 million and $138 million for the LTM period. The net working
capital benefit over the LTM period largely represents FDC's focus
on improved working capital management (exclusive of the quarterly
timing issues related to settlements).
Total liquidity as of June 30, 2012 was solid and consisted of
$484 million in cash ($223 million available for corporate use)
and $1.4 billion available under a $1.5 billion senior secured
revolving credit facility, roughly $500 million of which expires
in September 2013 with the remaining expiring September 2016.
Total debt as of June 30, 2012 was $22.5 billion, which includes
approximately $15.5 billion in secured debt, $4.8 billion in
unsecured debt and $2.5 billion in subordinated debt (all figures
approximate).
In addition, a subsidiary of New Omaha Holdings L.P. (the parent
company of First Data Corp.) has outstanding $1.7 billion senior
unsecured PIK notes due 2016. These notes are not obligations of
FDC, and FDC provides no credit support of these notes.
Fitch currently rates FDC as follows:
-- Long-term IDR at 'B';
-- $499 million senior secured revolving credit facility
expiring September 2013 at 'BB-/RR2';
-- $1 billion senior secured revolving credit facility expiring
September 2016 at 'BB-/RR2';
-- $3.4 billion senior secured term loan B due 2014 at
'BB-/RR2';
-- $2.4 billion senior secured term loan B due 2017 at
'BB-/RR2';
-- $4.7 billion senior secured term loan B due 2018 at
'BB-/RR2';
-- $1.6 billion 7.375% senior secured notes due 2019 at
'BB-/RR2';
-- $510 million 8.875% senior secured notes due 2020 at
'BB-/RR2';
-- $2 billion 8.25% junior secured notes due 2021 at 'CCC/RR6';
-- $1 billion 8.75%/10.0% PIK Toggle junior secured notes due
2022 at 'CCC/RR6';
-- $3 billion 12.625% senior unsecured notes due 2021 at
'CCC/RR6'.
-- $784 million 9.875% senior unsecured notes due 2015 at
'CCC/RR6';
-- $748 million 10.55% senior unsecured notes with mandatory
paid-in-kind (PIK) interest through September 2011 due 2015
at 'CCC/RR6'; and
-- $2.5 billion 11.25% senior subordinated notes due 2016 at
'CC/RR6'.
The Rating Outlook is Negative.
The Recovery Ratings (RRs) for FDC reflect Fitch's recovery
expectations under a distressed scenario, as well as Fitch's
expectation that the enterprise value of FDC, and hence recovery
rates for its creditors, will be maximized in a restructuring
scenario (as a going concern) rather than a liquidation scenario.
In deriving a distressed enterprise value, Fitch applies a 20%
discount to FDC's estimated operating EBITDA (adjusted for equity
earnings in affiliates) of approximately $2.3 billion for the LTM
ended June 30, 2012, which is equivalent to Fitch's estimate of
FDC's total interest expense and maintenance capital spending.
Fitch then applies a 6x distressed EBITDA multiple, which
considers FDC's prior public trading multiple and that a stress
event would likely lead to multiple contraction. As is standard
with Fitch's recovery analysis, the revolver is fully drawn and
cash balances fully depleted to reflect a stress event. The 'RR2'
for FDC's secured bank facility and senior secured notes reflects
Fitch's belief that 71%-90% recovery is realistic. The 'RR6' for
FDC's second lien, senior and subordinated notes reflects Fitch's
belief that 0%-10% recovery is realistic. The 'CC/RR6' rating for
the subordinated notes reflects the minimal recovery prospects and
inherent subordination in a recovery scenario.
WHAT COULD TRIGGER A RATING ACTION
Future developments that may, individually or collectively, lead
to negative rating action include:
-- Fitch believes the risk of a downgrade of FDC in the near
term is largely macro driven. If the U.S. were to slip into
an economic decline or if the European economy declines
significantly, it is possible that the ratings could be
negatively affected.
-- The ratings could also be downgraded if FDC were to
experience sustained market share declines or if typical
price compression accelerates.
Future developments that may, individually or collectively, lead
to positive rating action include:
-- The current Rating Outlook is Negative. As a result, Fitch
does not currently anticipate developments with a material
likelihood, individually or collectively, leading to a rating
upgrade.
FIRST DATA: Moody's Rates $750MM Sr. Sec. First Lien Notes 'B1'
---------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to First Data
Corporation's proposed $750 million Senior Secured First Lien
Notes due 2020. All other ratings, including the B3 corporate
family rating (CFR), and the stable outlook remain unchanged.
The proceeds will be used to pay down a portion of the $3.385
billion term loan due September 2014. First Data will still have
about $2.6 billion due in September 2014, with another $1.5
billion maturing September 2015. While total debt of about $24
billion will not change with the new $750 million of secured
notes, First Data continues to improve its debt maturity profile
with this issuance.
Rating Rationale
The B3 CFR and stable outlook reflect Moody's expectation that
First Data will generate low to mid-single digit percentage
revenue growth with higher EBITDA growth (mid to high single
digits) through 2013, as the economy slowly recovers in the midst
of still high unemployment rates, consumer debt levels, and weak
housing markets. Although this represents solid growth in the
context of uncertain economic conditions, the resulting free cash
flow is expected to remain light in relation to the very large
debt total. Moody's expects First Data will improve its credit
metrics modestly, with Debt to EBITDA of about 9 times and free
cash flow to debt in the low single digit percentage. These
metrics would be weak, although within the range of other
companies also rated at B3.
Debt rating assigned:
$750 million Senior Secured First Lien Notes at B1
Principal Methodology
The principal methodology used in rating First Data was the Global
Business & Consumer Service Industry Methodology published in
October 2010. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
Based in Atlanta, Georgia, First Data Corporation, with about $11
billion of projected annual revenues, provides commerce and
payment solutions for financial institutions, merchants, and other
organizations worldwide.
FIRST DATA: S&P Rates Proposed 8-Yr. First Lien Notes at 'B+'
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' issue-level
rating to First Data Corp.'s proposed first-lien notes due 2020.
"The recovery rating is '2', reflecting our expectation of
substantial (70% to 90%) recovery for first-lien debtholders in
the event of default," S&P said.
"In addition, we affirmed our 'B' corporate credit rating on the
company. The rating outlook is stable," S&P said.
"The proposed notes will rank equally with all of First Data's
existing and future first-lien debt. The company intends to use
the proceeds from this offering to redeem a like portion of its
LIBOR+275 term loan due 2014," S&P said.
"The ratings reflect First Data's capital structure and weak
credit protection measures," said Standard & Poor's credit analyst
John Moore, "which we characterize as a 'highly leveraged'
financial risk profile as a result of the company's 2007 LBO.' The
ratings also reflect the company's leading market presence as a
provider of payment processing services for merchants and
financial institutions, with high barriers to entry, significant
recurring revenues, and a broad customer base, which we
characterize as a 'strong' business risk profile."
"The stable outlook reflects First Data's strong business profile
and relatively stable historical operating performance. Ratings
improvement is constrained by very high debt leverage for the
rating, and the company's limited capacity to reduce debt from
cash flow in the near term," S&P said.
"We could revise the outlook to negative if revenue weakness
and/or cost pressures result in reported annual EBITDA growth
below 5% in 2012," S&P said.
FOREST OIL: Moody's Downgrades CFR to 'B1'; Outlook Negative
------------------------------------------------------------
Moody's Investors Service downgraded Forest Oil Corporation's
(Forest) Corporate Family Rating (CFR) to B1 from Ba3, and
downgraded its senior unsecured notes rating to B2 from B1.
Forest's Speculative Grade Liquidity rating is changed to SGL-3
from SGL-2. The outlook is negative.
"The downgrade reflects deteriorating cash flow metrics as a
consequence of Forest's exposure to weak US natural gas and
natural gas liquids (NGLs) commodity prices coupled with increased
leverage," commented Andrew Brooks, Moody's Vice President.
"Declining production and reserves as a result of asset
repositioning has magnified the extent of the company's increase
in relative debt leverage."
Rating Rationale
Forest's B1 CFR reflects its size, albeit on a three-year downward
trajectory since 2008 as a result of the repositioning its oil and
gas portfolio through assets sales largely into acreage deemed to
have greater productive upside. With 68% of 2012's second-quarter
56 mBoe per day of production comprised of natural gas, and 17%
NGLs, Forest is heavily exposed to the weak commodity pricing
environment notwithstanding hedges covering about 70% of its gas
production and 25% of its NGLs over the balance of 2012. While
absolute debt levels have remained relatively flat since 2009,
debt on production has increased, reflecting serial declines in
annual production, and is approaching $37,000 per Boe at June 30,
2012. Year-end 2011 proved reserves totaled 317.4 million Boe (76%
natural gas, 55% proved developed), however, the level is likely
to continue its decline at year-end 2012 as a result of planned
asset sales.
Reflecting Forest's newly articulated focus on debt reduction, the
company has identified certain non-core acreage holdings, which it
intends to divest, with proceeds used to reduce debt. An effort
launched in late 2011 to joint venture its 103,000 net Eagle Ford
acreage failed to produce a transaction acceptable to Forest,
which was a setback in its efforts to raise capital and further
accelerate its Eagle Ford development. On an ongoing basis, Forest
is focusing its development efforts on oil and liquids-rich plays
in the Eagle Ford Shale and the Texas Panhandle to which the
majority of 2012's $625-$645 million of capital spending will be
allocated, through a five-rig drilling program. Second quarter
2012 net oil production increased 27% versus 2011's second
quarter, evidence of progress in this effort. Currently operating
under an interim CEO, Forest is also engaged in a search for a
permanent replacement as a result of a management change
instituted in June 2012.
The negative outlook reflects Moody's concerns regarding increased
debt leverage at Forest, and while there is a plan, under interim
senior management, to reduce that leverage through asset sales,
like most mid-course corrections, it is not without execution
risk. A further downgrade could be considered if Forest fails to
execute on an asset sale program or other capital raising
initiatives that generate proceeds for debt reduction such that
debt on production is sustained below $30,000 per Boe. Moreover,
should cash flow metrics including retained cash flow (RCF) to
debt continue their decline below 20%, and EBITDA interest
coverage fall below 3x, a downgrade could also be considered.
Given its negative outlook, an upgrade is unlikely at this time.
However, the outlook could be stabilized depending on the success
of Forest's asset sale and debt reduction efforts. An upgrade
could be considered should Forest reduce debt on production below
$27,000 per Boe, and increase RCF to debt above 30%.
Forest's SGL-3 Speculative Grade Liquidity rating reflects Moody's
expectation of adequate liquidity through mid-2013 based
principally based on the availability it maintains under its $1.25
billion secured borrowing base revolving credit facility ($1.5
billion commitment). At June 30, 2012, Forest had $348 million of
outstanding borrowings under the revolver. The revolver is secured
by a mortgage and security interest in its proved oil and gas
properties and related assets of Forest and its US subsidiaries,
and includes a leverage covenant limiting its debt to EBITDA to
4.5x. At June 30, Forest was in compliance with the covenant at
3.9x, however, at this level access to the full amount of the
remaining undrawn balance could become compromised. The revolver
has a June 2016 scheduled maturity date, and its $1.25 billion
borrowing base was reaffirmed in April 2012 with no changes to its
existing terms and conditions. Forest's next upcoming scheduled
debt maturity is its $600 million 8.5% senior notes due February
2014.
The B2 rating on the senior unsecured notes reflects both the
overall probability of default of Forest, to which Moody's assigns
a PDR of B1, and a loss given default of LGD5 (72%). Forest's
senior unsecured notes are subordinate to it $1.25 billion secured
revolving credit facility's potential priority claim to the
company's assets. The size of the potential claims relative to
Forest's outstanding senior unsecured notes results in the notes
being rated one-notch below the B1 CFR under Moody's Loss Given
Default Methodology.
The principal methodology used in rating Forest Oil Corporation
was the Global Independent Exploration and Production Industry
Methodology published in December 2011. Other methodologies used
include Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.
Forest is an independent exploration and production company
headquartered in Denver, Colorado.
FORT LAUDERDALE BOATCLUB: Files for Chapter 11 in Florida
---------------------------------------------------------
Fort Lauderdale BoatClub, Ltd., filed a Chapter 11 bankruptcy
petition (Bankr. S.D. Fla. Case No. 12-28776) on Aug. 2, 2012, in
Fort Lauderdale, Florida, four years after purchasing a marina
facility for $16 million.
The Debtor on the Petition Date filed an emergency application to
employ Barry P. Gruher, Esq. and the Law Firm of Genovese Joblove
& Battista, P.A. as counsel.
The Debtor also filed a motion to use cash collateral of Bank of
Florida-Southwest.
The Debtor owns a fully developed and operational marina facility
formerly known as Jackson Marine Center in Fort Lauderdale. The
marina, which has a 12-acre prime intracoastal waterway real
estate, is currently being leased to G. Robert Toney & Associates
Inc. doing business as National Liquidators, for $75,000 per month
(reduced from the previous rate $160,000 per month).
The Debtor owes $11 million to EverBank, as assignee to lenders
that provided financing for the purchase of the property. In
August 2011, EverBank filed a foreclosure suit against the Debtor
in Broward Count Circuit Court (Case No. 11-2017). In November,
the court appointed Maggie Smith as receiver. The parties engaged
in negotiations but were unable to resolve their issues.
The Debtor commenced the bankruptcy case to restructure the
secured debt by EverBank, so that the Marina can continue to
operate.
A July 2007 appraisal valued the Marina at $27.9 million. While
the value of the property has declined, the Debtor asserts that
the current value of the Marina would yield in excess of the
existing indebtedness due on the loan to EverBank.
GAC STORAGE: Use of Cash Collateral Extended Through Aug. 31
------------------------------------------------------------
The U.S. Bankruptcy Court entered an order mid-July that extends a
stipulation allowing GAC Storage Lansing, LLC, to use cash
collateral securing the obligations to its lender. The
stipulation was amended to change the termination date from
"July 1, 2012" to "Aug. 31, 2012."
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.
Anza, Copley and El Monte have filed separate bankruptcy exit
plans. The Court is slated to consider approval of those plans at
hearings on Sept. 6 and 7, 2012.
GARLOCK SEALING: Affiliates Deconsolidated Following Chapter 11
---------------------------------------------------------------
EnPro Industries' results for the second quarter and first six
months of 2012 reflect the deconsolidation of Garlock Sealing
Technologies LLC (GST) and its subsidiaries, effective June 5,
2010, when GST filed a voluntary petition under Chapter 11 of the
U.S. Bankruptcy Code to begin a process in pursuit of an efficient
and permanent resolution to all current and future asbestos claims
against it.
Deconsolidation is required by generally accepted accounting
principles. To aid in comparisons of year-over-year data, the
company has attached a schedule to this press release showing key
operating measures for both EnPro and GST on a pro
About Garlock Sealing
Headquartered in Palmyra, New York, Garlock Sealing Technologies
LLC is a unit of EnPro Industries, Inc. (NYSE: NPO). For more
than a century, Garlock has been helping customers efficiently
seal the toughest process fluids in the most demanding
applications.
On June 5, 2010, Garlock filed a voluntary Chapter 11 petition
(Bankr. W.D. N.C. Case No. 10-31607) in Charlotte, North Carolina,
to establish a trust to resolve all current and future asbestos
claims against Garlock under Section 524(g) of the U.S. Bankruptcy
Code. The Debtor estimated $500 million to $1 billion in assets
and up to $500 million in debts as of the Petition Date.
Affiliates The Anchor Packing Company and Garrison Litigation
Management Group, Ltd., also filed for bankruptcy.
The filing covers only Garlock operations in Palmyra, New York and
Houston, Texas. Garlock Rubber Technologies, Garlock Helicoflex,
Pikotek, Technetics, Garlock Europe and Garlock operations in
Canada, Mexico or Australia are not affected by the filing, nor is
EnPro Industries or any other EnPro operating subsidiary.
Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A.,
represents the Debtor in its Chapter 11 effort. Garland S.
Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel
for asbestos matters.
The Official Committee of Asbestos Personal Injury Claimants in
the Chapter 11 cases is represented by Travis W. Moon, Esq., at
Hamilton Moon Stephens Steele & Martin, PLLC, in Charlotte, NC,
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New
York, and Trevor W. Swett III, Esq., Leslie M. Kelleher, Esq., and
Jeanna Rickards Koski, Esq., in Washington, D.C. 20005.
Joseph W. Grier, III, the Court-appointed legal representative for
future asbestos claimants, has retained A. Cotten Wright, Esq., at
Grier Furr & Crisp, PA, and Richard H. Wyron, Esq., and Jonathan
P. Guy, Esq., at Orrick, Herrington & Sutcliffe LLP, as his co-
counsel.
About 124,000 asbestos claims are pending against Garlock in
stateand federal courts across the country. The Company says
majority of pending asbestos actions against it is stale and
dormant -- almost 110,000 or 88% were filed more than four years
ago and more than 44,000 or 35% were filed more than 10 years ago.
GENERAL NUTRITION: Moody's Affirms 'B1' CFR/PDR; Outlook Stable
---------------------------------------------------------------
Moody's Investors Service affirmed General Nutrition Centers, Inc.
("GNC") Corporate Family Rating and Probability of Defualt Rating
at B1. The affirmation follows GNC's announcement that they have
increased their existing term loan by $200 million. The senior
secured term loan rating was also affirmed at Ba3. The stable
outlook is maintained. At the same time, Moody's upgraded GNC's
Speculative Grade Liquidity rating to SGL-1 from SGL-2.
The following rating is upgraded:
Speculative Grade Liquidity rating to SGL-1 from SGL-2
The following ratings are affirmed
Corporate Family Rating at B1
Probability of Default Rating at B1
Senior secured bank credit facilties at Ba3 (LGD 3, 42%)
Ratings Rationale
The proceeds of the $200 million term loan add-on along with
excess cash will be used to finance a $300 million share
repurchase program by GNC. Moody's estimates that the incremental
debt will increase debt to EBITDA from 4.0 times to 4.3 times for
the lagging twelve month period ended June 30, 2012. The
affirmation acknowledges that although GNC's leverage will
increase, the increase in leverage will only be temporary and
credit metrics will remain in line with GNC's B1 Corporate Family
Rating. Furthermore, the B1 Corporate Family Rating reflects
Moodys' expectation that GNC will not make regular debt financed
share repurchases going forward.
The upgrade to SGL-1 reflects GNC's very good liquidity profile as
a result of its solid cash balances and Moody's expectation that
its cash balance will grow further over the next twelve months.
Moody's expect GNC to have over $300 million in cash at September
31, 2012.
GNC's B1 Corporate Family Rating continues to be supported by the
company's well known brand name in its target markets along with
Moody's favorable view of the vitamin, mineral, and nutritional
supplement ("VMS") category which accounts for about one-third of
GNC's consolidated revenues. This product category performed well
during the recent economic recession and it is a relatively large
market that should continue to benefit from an increasing number
of Americans over the age of 50. The rating also reflects GNC's
moderate leverage with pro forma debt to EBITDA of 4.3 times and
good interest coverage with pro forma EBITA to interest expense of
3.0 times.
Key credit concerns include GNC's sizable concentration in sports
nutrition which is a much more limited product segment with a
relatively smaller target market than the VMS product category.
Also considered is the potential risk arising from adverse
publicity and product liability claims with regard to certain
products sold by GNC, particularly diet products and herbs, two
faddish product categories that are more exposed to such product
liability risks and earnings volatility.
The stable outlook incorporates Moody's view that that GNC will
continue to benefit from an increasing number of Americans over
the age of 50, along with GNC's demonstrated ability to perform
well during a prolonged period of economic weakness. The stable
outlook also reflects Moody's belief that GNC is unlikely to
increase its debt levels further and that its credi t metrics will
remain at levels appropriate for its B1 rating.
A higher rating would require that GNC achieve debt to EBITDA at
or below 4.0 times, and maintain EBITA to interest expense above
2.5 times. In addition, an upgrade would require that GNC adhere
to a financial policy that would support credit metrics remaining
at these levels.
Ratings could be lowered if it appears that debt to EBITDA will
rise above 5.0 times or EBITA to interest expense will drop below
2.25 times. Independent of any qualitative metrics, ratings could
be lowered if GNC experiences new product-related risks that
result in material obligations that negatively impact the
company's earnings and liquidity profile.
The principal methodology used in rating General Nutrition
Centers, Inc. 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.
General Nutrition Centers, Inc., ("GNC") headquartered in
Pittsburgh, PA, manufactures and retails vitamins, minerals,
nutritional supplements domestically and internationally. About
75% of its revenue is generated by over 3,000 company owned stores
and website. It also has about 2,600 franchise locations in the
U.S. and 56 countries that generate about 15% of its revenue.
Total revenues are about $2.2 billion.
GENERAL NUTRITION: S&P Affirms 'BB' Rating on $1.4-Bil. Loan
------------------------------------------------------------
Standard & Poor's Ratings Services said its 'BB' rating on General
Nutrition Centers Inc.'s tranche B term loan facility due March 2,
2018, remains unchanged following the $200 million increase in the
term loan. "The '3' recovery rating, indicating our expectation of
meaningful (50% to 70%) recovery for holders in the event of a
payment default, also remains unchanged. With the completion of
the add-on, the company has $1.1 billion outstanding on the $1.4
billion tranche B term loan facility," S&P said.
"We expect the company to use proceeds to partially fund the
previously announced $300 million share repurchase program by GNC
Holdings Inc., General Nutrition's parent, and for general
corporate purposes," S&P said.
"The amendment to the credit agreement for the incremental term
loan has the same terms, including interest rate, and conditions
as the original facility. The restricted payment covenant was also
amended to permit General Nutrition Centers to pay GNC Holdings an
additional $50 million of cash dividends. GNC Holdings and General
Nutrition Center's direct and indirect domestic subsidiaries
guarantee the company's credit facility," S&P said.
"The ratings on GNC Holdings and its wholly owned subsidiary
General Nutrition Centers reflect our assessment that the
company's financial risk profile is 'significant,' given its good
cash flow generation, stable credit metrics, and more moderate
financial policies. In our view, the company's business risk
profile is 'fair,' reflecting GNC's leading position in the highly
competitive and fragmented nutritional supplement specialty retail
sector, good profitability measures, and our expectation for near-
term sales growth to be above the industry average of 3% to 6%,"
S&P said.
RATING LIST
GNC Holdings Inc.
General Nutrition Centers Inc.
Corporate Credit Rating BB/Stable/--
General Nutrition Centers Inc.
$1.4 bil. tranche B term loan fac BB
Recovery Rating 3
GENTA INC: To File Chapter 7 Bankruptcy Petition in Delaware
------------------------------------------------------------
Genta Incorporated intends to file a voluntary petition for relief
under Chapter 7 of the United States Bankruptcy Code in the U.S.
Bankruptcy Court for the District of Delaware. Upon the filing, a
Chapter 7 trustee will assume control of the Company and the
assets of the Company will be liquidated in accordance with
Chapter 7 of the Code.
Upon the filing, the officers of the Company will be terminated,
and the directors will resign effective immediately.
According to the Form 10-K for the year ended Dec. 31, 2011, the
Company in September 2011, issued $12.7 million of units,
consisting of $4.2 million of senior secured convertible notes and
$8.5 million of senior secured cash collateralized convertible
notes. In connection with the sale of the units, the Company also
issued two types of debt warrants in an amount equal to 100% of
the purchase price for each unit. The Company had direct access
to $4.2 million of the proceeds, and the remaining $8.5 million of
the proceeds were placed in a blocked account as collateral
security for the $8.5 million senior secured cash collateralized
convertible notes. Presently, with no further financing, the
Company projects that it will run out of funds during the first
quarter of 2012. The Company currently does not have any
additional financing in place.
The Company previously warned that if it is unable to raise
additional funds, the Company could be required to reduce its
spending plans, reduce its workforce, license one or more of its
products or technologies that it would otherwise seek to
commercialize itself, sell some or all of its assets, cease
operations or even declare bankruptcy.
About Genta Incorporated
Berkeley Heights, New Jersey-based Genta Incorporated (OTC BB:
GNTA) -- http://www.genta.com/-- is a biopharmaceutical company
engaged in pharmaceutical (drug) research and development. The
Company is dedicated to the identification, development and
commercialization of novel drugs for the treatment of cancer and
related diseases.
In its report on the financial statements for 2011, EisnerAmper
LLP, in Edison, New Jersey, noted that the Company's recurring
losses from operations and negative cash flows from operations and
current maturities of convertible notes payable raise substantial
doubt about its ability to continue as a going concern.
The Company reported a net loss of $69.42 million in 2011,
compared with a net loss of $167.30 million during the prior year.
The Company's balance sheet at March 31, 2012, showed $4.56
million in total assets, $34.74 million in total liabilities and a
$30.17 million total stockholders' deficit.
GEOMET INC: Receives Delisting Notification From NASDAQ SM
----------------------------------------------------------
GeoMet, Inc., said that it received a notice from The NASDAQ Stock
Market advising the Company that it has failed to regai compliance
with the $1.00 minimum bid price requirement for continued listing
on the NASDAQ Capital Market and, as a result, the Company's
common stock will be delisted from the NASDAQ Capital Market at
the opening of business on Aug. 13, 2012. The Company's preferred
stock will continue to be traded on the NASDAQ Capital Market.
The Company does not currently intend to request an appeal hearing
regarding the delisting of its common stock. The Company expects
that its common stock will trade on the OTC Bulletin Board.
Houston, Texas-based GeoMet, Inc., is an independent energy
company primarily engaged in the exploration for and development
and production of natural gas from coal seams ("coalbed methane"
or "CBM") and non-conventional shallow gas. It was originally
founded as a consulting company to the coalbed methane industry in
1985 and has been active as an operator, developer and producer of
coalbed methane properties since 1993. Its principal operations
and producing properties are located in the Cahaba and Black
Warrior Basins in Alabama and the central Appalachian Basin in
Virginia and West Virginia. It also owns additional coalbed
methane and oil and gas development rights, principally in
Alabama, Virginia, West Virginia, and British Columbia. As of
March 31, 2012, it owns a total of approximately 192,000 net acres
of coalbed methane and oil and gas development rights.
GETTY PETROLEUM: Ch. 11 Impacts Getty Realty Q2 Results
-------------------------------------------------------
Getty Realty Corp. reported its financial results for the second
quarter ended June 30, 2012. Reported results for the quarter
ended June 30, 2012 continued to be materially affected by events
related to Getty Petroleum Marketing Inc.'s filing for Chapter 11
protection under the Federal Bankruptcy Code including a reduction
in the net contribution from the properties that were subject to
the Master Lease with Marketing and the net expenses for April
2012 related to Marketing. Getty Realty reported net earnings for
the quarter ended June 30, 2012 of $3.6 million, or $0.11 per
share, as compared to earnings of $15.2 million, or $0.45 per
share, for the quarter ended June 30, 2011. A full text copy of
the press release is available free at: http://is.gd/Q5XsW9
About Getty Petroleum
A remnant of J. Paul Getty's oil empire, Getty Petroleum Marketing
markets gasolines, hydraulic fluids, and lubricating oils through
a network of gas stations owned and operated by franchise holders.
A former subsidiary of Russian oil giant LUKOIL, the company
operates in the Mid-Atlantic and Northeastern US states. Getty
Petroleum Marketing's primary asset is the more than 800 gas
stations in the Mid-Atlantic states which are located on
properties owned by Getty Realty. After scaling back the
company's operations to cut debt, in 2011 LUKOIL sold Getty
Petroleum Marketing to investment firm Cambridge Petroleum Holding
for an undisclosed price.
Getty Petroleum and three affiliates filed for Chapter 11
bankruptcy (Bankr. S.D.N.Y. Case Nos. 11-15606 to 11-15609) on
Dec. 5, 2011. Judge Shelley C. Chapman presides over the case.
Loring I. Fenton, Esq., John H. Bae, Esq., Kaitlin R. Walsh, Esq.,
and Michael J. Schrader, Esq., at Greenberg Traurig, LLP, in New
York, N.Y., serve as Debtors' counsel. Ross, Rosenthal & Company,
LLP, serves as accountants for the Debtors. Getty Petroleum
Marketing, Inc., disclosed $46.6 million in assets and $316.8
million in liabilities as of the Petition Date. The petition was
signed by Bjorn Q. Aaserod, chief executive officer and chairman
of the board.
The Official Committee of Unsecured Creditors is represented by
Wilmer Cutler Pickering Hale and Dorr LLP. Alvarez & Marsal North
America, LLC, serves as the Committee's financial advisors.
GOOD SAM: Completes Offer to Purchase $4.9-Mil. of Senior Notes
---------------------------------------------------------------
Good Sam Enterprises, LLC, completed an offer to purchase up to
$4,950,000 in principal amount of the Company's outstanding 11.50%
Senior Secured Notes due 2016. The Offer to Purchase was made
pursuant to the terms of the indenture governing the Notes and
expired at 5:00 p.m., New York City time, on July 31, 2012.
The amount of Notes tendered was $4,000. These Notes will be
purchased by the Company and retired on Aug. 7, 2012.
About Good Sam
Ventura, Calif.-based Affinity Group Holding, Inc., now known as
Good Sam Enterprises, LLC, is a holding company and the direct
parent of Affinity Group, Inc. The Company is an indirect wholly-
owned subsidiary of AGI Holding Corp, a privately-owned
corporation. The Company is a member-based direct marketing
organization targeting North American recreational vehicle owners
and outdoor enthusiasts. The Company operates through three
principal lines of business, consisting of (i) club memberships
and related products and services, (ii) subscription magazines and
other publications including directories, and (iii) specialty
merchandise sold primarily through its 78 Camping World retail
stores, mail order catalogs and the Internet.
The Company's balance sheet at March 31, 2012, showed
$232.60 million in total assets, $486.69 million in total
liabilities, and a $254.09 million total members' deficit.
* * *
Affinity Group Inc. carries 'B3' long term corporate family and
probability of default ratings, with 'stable' outlook, from
Moody's Investors Service.
As reported in the Troubled Company Reporter on November 9, 2010,
Standard & Poor's Ratings Services assigned Affinity Group Inc.'s
proposed $325 million senior secured notes due 2016 its
preliminary 'B-' issue-level rating. Following the close of the
proposed transaction, S&P expects to assign a 'B-' corporate
credit rating to Affinity Group Inc., and withdraw S&P's current
'D' corporate credit rating on Affinity Group Holding Inc. A
portion of the proceeds of the new notes will be used, in
conjunction with cash contributions from Holding's parent, to
repay in full $88 million of senior notes that are currently
outstanding at Holding.
S&P said the expected 'B-' corporate credit rating on Affinity
Group reflects S&P's expectation that, following the proposed
refinancing transaction, adjusted debt leverage will be reduced by
about 1x, the company will not have any meaningful near-term debt
maturities, and the company will generate some discretionary cash
flow (albeit minimal). Still, credit measures will remain
relatively weak, as adjusted debt leverage will remain above 6.0x
(S&P's operating lease adjustment adds about a turn to leverage),
and S&P expects interest coverage to remain in the low- to mid-
1.0x area over the intermediate term.
HARPER BRUSH: Committee Proposes Day Rettig as Local Counsel
------------------------------------------------------------
The Unsecured Creditors' Committee of Harper Brush Works, Inc.,
asks the U.S. Bankruptcy Court for permission to retain Day Rettig
Peiffer, P.C., as its local counsel.
The Committee needs the firm to, among other things:
(a) attend the first meeting of creditors;
(b) prepare motions and applications and conducting
examinations incidental to any related proceedings or to
the administration of the Chapter 11 case; and
(c) develop the relationship of the status of the Debtor to
the claims of creditors in the case.
The firm attests it is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The firm's shareholder, Joseph A. Peiffer, Esq., will lead the
engagement. He will charge at a discounted rate of $360 per hour.
The discounted rate for associates of the firm is $270 per hour.
The rate for paralegal services charged by DRP is $100 per hour.
All payments will be subject to approval and allowance by the
Court.
About Harper Brush Works
Fairfield, Iowa-based Harper Brush Works, Inc., filed a Chapter 11
petition (Bankr. S.D. Iowa) in Des Moines on May 29, 2012.
Family-owned Harper Brush -- http://www.harperbrush.com/--
provides more than 1,000 products, including pushbrooms, mops,
floor squeegees, automotive brushes, dust pans, and buckets. The
Company disclosed assets of $10.4 million against debt totaling
$10 million, including $6 million owing to secured creditors.
Judge Anita L. Shodeen presides over the case. Donald F. Neiman,
Esq., and Jeffrey D. Goetz, Esq., at Bradshaw, Fowler, Proctor &
Fairgrave, P.C., serve as bankruptcy counsel to the Debtor. Marc
B. Ross serves as the Debtor's Chief Restructuring Officer.
An official committee of unsecured creditors has been appointed in
the case. The panel is represented by Freeborn & Peters LLP as
general bankruptcy counsel.
HARPER BRUSH: Committee Taps MorrisAnderson as Financial Advisor
----------------------------------------------------------------
The Unsecured Creditors' Committee of Harper Brush Works, Inc.,
asks the U.S. Bankruptcy Court for permission to retain
MorrisAnderson as financial advisor to, among other things, assist
the Committee:
(a) in the review of financial related disclosures required by
the Court, including the Debtor's Schedules of Assets and
Liabilities, the Statement of Financial Affairs and Monthly
Operating Reports;
(b) with information and analyses required pursuant to a
possible Debtor-In-Possession financing, including, but not
limited to, preparation for hearings regarding the use of
cash collateral and DIP financing; and
(c) with a review of any of the Debtor's proposed key
employee retention and other critical employee benefit
programs.
MorrisAnderson will charge for its services on an hourly basis, in
accordance with its hourly rates. The firm's billing rates for
professionals for the 2012 calendar year range from $75 per hour
for administrative support to $525 per hour for work performed by
principals.
MorrisAnderson personnel expected to provide work for the
Committee and their hourly rates are:
Professional Rates
------------ -----
Daniel F. Dooley (Principal) $525/hour
Mark T. Iammartino (Director) $325/hour
Aaron G. Gillum (Director) $325/hour
Other professionals as needed $250-$350 per hour
Administrative Assistance $75/hour
MorrisAnderson director, Mark T. Iammartino --
miammartino@morrisanderson.com -- attests that the firm is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code.
About Harper Brush Works
Fairfield, Iowa-based Harper Brush Works, Inc., filed a Chapter 11
petition (Bankr. S.D. Iowa) in Des Moines on May 29, 2012.
Family-owned Harper Brush -- http://www.harperbrush.com/--
provides more than 1,000 products, including pushbrooms, mops,
floor squeegees, automotive brushes, dust pans, and buckets. The
Company disclosed assets of $10.4 million against debt totaling
$10 million, including $6 million owing to secured creditors.
Judge Anita L. Shodeen presides over the case. Donald F. Neiman,
Esq., and Jeffrey D. Goetz, Esq., at Bradshaw, Fowler, Proctor &
Fairgrave, P.C., serve as bankruptcy counsel to the Debtor. Marc
B. Ross serves as the Debtor's Chief Restructuring Officer.
An official committee of unsecured creditors has been appointed in
the case. The panel is represented by Freeborn & Peters LLP as
general bankruptcy counsel.
HARPER BRUSH: Hires Patent and Trademark Valuation Expert
---------------------------------------------------------
Harper Brush Works, Inc., asks for permission from the U.S.
Bankruptcy Court to employ Michael J. Pellegrino and Pellegrino &
Associates LLC as its patent and trademark valuation expert in the
bankruptcy case.
Michael Pellegrino will be the primary contact with the Debtor and
will render services to the Debtor. The Debtor proposes to engage
Pellegrino to prepare a written report on the value of both the
Debtor's patent asset portfolio and its trademark asset portfolio
on a flat fee basis of $37,425. To the extent Mr. Pellegrino is
called as a witness to testify, the Debtor proposes to pay his
regular hourly testimony rate of $525 per hour, plus his actual,
reasonable, and necessary expenses.
Michael Pellegrino attests that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code.
The Debtor proposes that upon approval of the employment
application and completion of the written report, Pellegrino will
be entitled to payment of the $37,425 flat fee, and at the
conclusion of the hourly portion of the engagement, for testimony,
Pellegrino will file an appropriate final application seeking
allowance of all hourly fees and costs. Upon allowance of the
hourly fees and costs, the Debtor will pay Pellegrino the allowed
compensation.
About Harper Brush Works
Fairfield, Iowa-based Harper Brush Works, Inc., filed a Chapter 11
petition (Bankr. S.D. Iowa) in Des Moines on May 29, 2012.
Family-owned Harper Brush -- http://www.harperbrush.com/--
provides more than 1,000 products, including pushbrooms, mops,
floor squeegees, automotive brushes, dust pans, and buckets. The
Company disclosed assets of $10.4 million against debt totaling
$10 million, including $6 million owing to secured creditors.
Judge Anita L. Shodeen presides over the case. Donald F. Neiman,
Esq., and Jeffrey D. Goetz, Esq., at Bradshaw, Fowler, Proctor &
Fairgrave, P.C., serve as bankruptcy counsel to the Debtor. Marc
B. Ross serves as the Debtor's Chief Restructuring Officer.
An official committee of unsecured creditors has been appointed in
the case. The panel is represented by Freeborn & Peters LLP as
general bankruptcy counsel.
HARPER BRUSH: Hires Bradshaw Fowler as Patent Counsel
-----------------------------------------------------
Harper Brush Works, Inc., asks for permission from the U.S.
Bankruptcy Court to employ Gerald T. Shekleton, Esq. and the law
firm of Husch Blackwell LLP as special patent and trademark
counsel.
Mr. Shekleton and the firm represented the Debtor in patent and
trademark matters prior to its bankruptcy.
During the pendency of the Chapter 11 case, Mr. Shekleton will
advise, counsel, represent and assist the Debtor with respect to
maintenance and protection of its patent, trademarks, and other
intellectual property assets, including various reporting
compliance issues under applicable state, federal, and
international laws regarding the Debtor's patents ands trademarks
and other intellectual property.
Mr. Shekleton's hourly rate is $515 per hour.
Mr. Shekleton and the firm hold a general, unsecured claim against
the Debtor for accrued but unpaid fees and cost incurred for
providing prepetition legal services, in the approximate amount of
$21,4650. However, they attest that they do not have an interest
adverse to the Debtor or its estate.
About Harper Brush Works
Fairfield, Iowa-based Harper Brush Works, Inc., filed a Chapter 11
petition (Bankr. S.D. Iowa) in Des Moines on May 29, 2012.
Family-owned Harper Brush -- http://www.harperbrush.com/--
provides more than 1,000 products, including pushbrooms, mops,
floor squeegees, automotive brushes, dust pans, and buckets. The
Company disclosed assets of $10.4 million against debt totaling
$10 million, including $6 million owing to secured creditors.
Judge Anita L. Shodeen presides over the case. Donald F. Neiman,
Esq., and Jeffrey D. Goetz, Esq., at Bradshaw, Fowler, Proctor &
Fairgrave, P.C., serve as bankruptcy counsel to the Debtor. Marc
B. Ross serves as the Debtor's Chief Restructuring Officer.
An official committee of unsecured creditors has been appointed in
the case. The panel is represented by Freeborn & Peters LLP as
general bankruptcy counsel.
HIGHLANDS BANKSHARES: William Chaffin to Retire from Board
----------------------------------------------------------
William E. Chaffin announced his retirement from the Board of
Directors of Highlands Bankshares, Inc., and its banking
subsidiary, Highlands Union Bank, effective Aug. 15, 2012, for
personal health reasons.
About Highlands Bankshares
Abingdon, Va.-based Highlands Bankshares, Inc., is a one-bank
holding company organized under the laws of Virginia in 1995 and
registered under the Federal Bank Holding Company Act of 1956.
The Company conducts the majority of its business operations
through its wholly-owned bank subsidiary, Highlands Union Bank.
The Company has two direct subsidiaries as of Dec. 31, 2011: the
Bank, which was formed in 1985, and Highlands Capital Trust I, a
statutory business trust (the "Trust") which was formed in 1998.
The Bank is a Virginia state chartered bank that was incorporated
in 1985. The Bank operates a commercial banking business from its
headquarters in Abingdon, Virginia, and its thirteen area full
service branch offices.
The Company's balance sheet at March 31, 2012, showed
$612.09 million in total assets, $583.03 million in total
liabilities, and stockholders' equity of $29.06 million.
"During the first quarter of 2011, the Bank's total risk based
capital ratio fell below the required minimum to be "well -
capitalized," the Company said in its quarterly report for the
period ended March 31, 2012. "The Bank's Tier 1 Capital to Risk
Weighted assets ratio and Tier 1 capital to Adjusted Total Assets
remained above the "well-capitalized" thresholds. Because the
Bank's total risk- based capital ratio was below 10% as of Dec.
31, 2011, and March 31, 2012, the Bank is considered to be
"adequately-capitalized" under the regulatory framework for prompt
corrective action. As a result of our status as "adequately-
capitalized" for regulatory capital purposes, we cannot renew or
accept brokered deposits without prior regulatory approval and we
may not offer interest rates on our deposit accounts that are
significantly higher than the average rates in our market area.
The Bank has increased its total risk based capital ratio from
8.77% at March 31, 2011, to 9.44% at March 31, 2012. The Bank's
total risk based capital ratio was 9.08% at Dec. 31, 2011."
HORIZON LINES: Incurs $46.1 Million Net Loss in Second Quarter
--------------------------------------------------------------
Horizon Lines, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $46.07 million on $270.93 million of operating revenue for the
quarter ended June 24, 2012, compared with a net loss of $5.41
million on $253.73 million of operating revenue for the quarter
ended June 26, 2011.
The Company reported a net loss of $78.58 million on $534.29
million of operating revenue for the six months ended June 24,
2012, compared with a net loss of $39.48 million on $494.45
million of operating revenue for the six months ended June 26,
2011.
The Company's balance sheet at June 24, 2012, showed $620.40
million in total assets, $619.62 million in total liabilities and
$786,000 in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/VWRo7i
About Horizon Lines
Charlotte, N.C.-based Horizon Lines, Inc. (NYSE: HRZ) is the
nation's leading domestic ocean shipping and integrated logistics
company. The Company owns or leases a fleet of 20 U.S.-flag
containerships and operates five port terminals linking the
continental United States with Alaska, Hawaii, Guam, Micronesia
and Puerto Rico. The Company provides express trans-Pacific
service between the U.S. West Coast and the ports of Ningbo and
Shanghai in China, manages a domestic and overseas service partner
network and provides integrated, reliable and cost competitive
logistics solutions.
Horizon Lines reported a net loss of $229.41 million in 2011, a
net loss of $57.97 million in 2010, and a net loss of
$31.27 million in 2009.
Refinancing
The Company was not in compliance with the maximum senior secured
leverage ratio and the minimum interest coverage ratio under its
Senior Credit Facility at the close of its third fiscal quarter
ended Sept. 25, 2011. Non-compliance with these financial
covenants constituted an event of default, which could have
resulted in acceleration of the maturity. None of the
indebtedness under the Senior Credit Facility or Notes was
accelerated prior to the completion of a comprehensive refinancing
on Oct. 5, 2011.
The Senior Credit Facility and 99.3% of the 4.25% Convertible
Senior Notes were repaid as part of the refinancing. In addition,
as a result of the completion of the refinancing, the short-term
obligations under the Senior Credit Facility, the Notes and the
Bridge Loan have been classified as long-term debt.
As a result of the efforts to refinance the Company's debt and the
2011 amendments to the Senior Credit Facility, the Company paid
$17.3 million in financing costs and recorded a loss on
modification of debt of $0.6 million during 2011.
* * *
In June 2012, Moody's Investors Service affirmed Horizon Lines,
Inc.'s Corporate Family Rating (CFR) and Probability of Default
Rating ("PDR") at Caa2 and removed the LD ("Limited Default")
designation from the rating in recognition of the conversion to
equity of the $228 million of Series A and Series B Convertible
Senior Secured notes due in October 2017 ("Notes").
Moody's said the affirmation of the Corporate Family and
Probability of Default ratings considers that total debt has been
reduced by the conversion of the Notes, but also recognizes the
significant operating challenges that the company continues to
face.
HOST HOTELS: S&P Rates New $350MM Senior Notes Due 2023 'BB+'
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned Bethesda, Md.-based
Host Hotels & Resorts L.P.'s proposed $350 million senior notes
due 2023 its 'BB+' issue-level rating, with a recovery rating of
'1', indicating its expectation of very high (90% to 100%)
recovery for lenders in the event of a payment default. "Host
expects to use the proceeds to redeem the remaining $250 million
of the company's $650 million in outstanding Series O notes due
2015 and for general corporate purposes," S&P said.
"In November 2011, Host closed on a new $1 billion revolver (which
we do not rate) that released former subsidiary guarantees and
pledges of equity interests. As a result, the company's existing
senior notes and debentures indentures also released former
subsidiary guarantees and stock pledges under provisions in the
indentures that require the same guarantees and collateral
provided to the revolving credit facility. Effectively, the
proposed and existing senior notes are currently unsecured.
However, if Host's leverage ratio exceeds 6x for two consecutive
fiscal quarters at a time when Host does not have an investment-
grade, long-term unsecured debt rating, the subsidiary guarantees
and equity pledges will spring back into place in Host's revolver
and notes indentures. Given that our simulated default scenario
for Host incorporates the assumption that the company's leverage
ratio will be above 6x, our '1' recovery rating on the company's
existing notes remained unchanged," S&P said.
"Our 'BB-' corporate credit rating on Host Hotels & Resorts Inc.
reflects our assessment of the company's financial risk profile as
'highly leveraged' and our assessment of the company's business
risk profile as 'satisfactory,' according to our criteria," said
Standard & Poor's credit analyst Emile Courtney.
"Our assessment of Host's financial risk profile as highly
leveraged reflects total lease adjusted debt to EBITDA at 5.4x and
funds from operations (FFO) to total lease adjusted debt in the
low-teens percentage area at June 2012, and the company's reliance
on external sources of capital for growth as a real estate
investment trust (REIT). These credit measures include Host's pro
rata share of joint venture debt and EBITDA. We believe continued
revenue per available room (RevPAR) growth in the U.S. lodging
industry in 2012 and 2013, and Host's relatively prudent use of
equity capital to expand its hotel portfolio will enable it to
improve these credit measures over time. Additionally, EBITDA
coverage of interest expense was 3x at June 2012, which was good
for the current rating. We expect coverage to increase in 2012 and
2013 on EBITDA growth and lower aggregate interest expense because
of recent debt issuances with favorable coupon rates, and that
Host will otherwise maintain an adequate liquidity profile," S&P
said.
HRK HOLDINGS: Has Green Light to Hire Litigation Counsel
--------------------------------------------------------
HRK Holdings LLC sought and obtained Bankruptcy Court approval to
employ James W. Martin, P.A., as special counsel, according to the
case docket.
The Debtor requires the services of special counsel to provide
advice, consulting services, and litigation services in connection
with:
(a) pending lawsuit for claims of the Debtors against Ardaman &
Associates, Inc., Comanco Environmental Corporation, The
Comanco Group, Inc., Comanco Construction Corporation, CDM
Constructors Inc., CDM Smith Inc., Shaw Environmental,
Inc., Shaw Environmental & Infrastructure, Inc., WRS
Infrastructure & Environment, Inc. d/b/a WRSCompass, and
Environmental Consulting & Technology, Inc., and possible
lawsuits for claims of the Debtors against additional
parties, and individual licensed professionals, for design
and construction defects and breaches of contract relating
to gypstack systems and water management on the Property;
(b) sale of portions of real estate, including but not limited
to sale pursuant to an executed contract for purchase;
(c) pending real estate easement litigation brought by
Reeder/Snell regarding an old railroad track usage easement
on a portion of the Property;
(d) contract and document drafting, interpretation, analysis,
and advice regarding agreements and relationships with
government agencies, including but not limited to Florida
Department of Environmental Property and Manatee County Port
Authority; and
(e) coordination of the above with Debtors' bankruptcy counsel
and other special counsel.
The hourly rate of James W. Martin, Esq., is $275. Mr. Martin
attests his firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The Debtors also won authority to hire William D. Preston, P.A.,
as special counsel, according to information on the case docket.
About HRK Holdings
Based in Palmetto, Florida, HRK Holdings LLC owns roughly 675
contiguous acres of real property in Manatee County, Florida.
Roughly 350 acres of the property accommodates a phosphogypsum
stack system, called Gypstaks, a portion of which was used as an
alternate disposal area for the management of dredge materials
pursuant to a contract with Port Manatee and as authorized under
an administrative agreement with the Florida Department of
Environmental Protection. The remaining acres of usable land are
either leased to various tenants or available for sale. HRK
Industries holds various contracts and leases associated with the
Debtors' property.
HRK Holdings and HRK Industries LLC filed for Chapter 11
protection (Bankr. M.D. Fla. Case Nos. 12-09868 and 12-09869) on
June 27, 2012. Judge K. Rodney May oversees the case. Barbara A.
Hart, Esq., at Stichter, Riedel, Blain & Prosser, P.A., represents
the Debtors. HRK Holdings scheduled $33,366,529 in assets and
$26,069,208 in liabilities. The petitions were signed by William
F. Harley, III, managing member.
According to the Debtors, the bankruptcy filing was necessitated
by the immediate need to sell a portion of the remaining property
to create liquidity for (a) funding the urgent management of the
site-related environmental concerns; the benefit of creditors;
funding a litigation filed by the Debtors; and funding of expenses
related to additional sales of the remaining property.
HYDROGENICS CORPORATION: Posts $3.1-Mil. Net Loss in 2nd Quarter
----------------------------------------------------------------
Hydrogenics Corporation reported a net loss of US$3.14 million on
US$8.26 million of revenues for the second quarter ended June 30,
2012, compared with a net loss of US$2.18 million on
US$3.88 million of revenues for the same period a year earlier.
Net loss for the six months ended June 30, 2012, was
US$6.33 million on US$13.98 million of revenues, compared with a
net loss of US$6.84 million on US$11.27 million of revenues for
the same period of 2011.
"Revenues increased 113% to US$8.3 million, reflecting higher
bookings within the OnSite Generation business unit fueled by
growth in energy storage and increased demand in industrial
markets, partially offset by a decrease in the value of the euro
relative to the US dollar."
"Revenues were US$14.0 million, an increase of 24%, reflecting
increased order bookings within OnSite Generation driven by growth
in renewable energy storage and increased demand in industrial
markets partially offset by a decrease in the value of the euro
relative to the US dollar."
At June 30, 2012, the Company's balance sheet showed
US$30.60 million in total assets, US$21.20 million in total
liabilities, and stockholders' equity of US$9.40 million.
According to the regulatory filing, there are material
uncertainties related to certain conditions and events that cast
substantial doubt on the Corporation's ability to continue as a
going concern.
"These events and conditions include the Corporation's ability to
generate profits and related positive operating cash flows which
require the Corporation to increase its revenues. There are
various uncertainties affecting the Corporation's revenues,
including the current market environment, the level of sales
orders, the adoption of new technologies by customers, the
continuing development of products by the Corporation, price
competition, and the ability of customers to finance purchases.
In addition, the Corporation also requires additional funding in
the form of debt or equity and there are uncertainties surrounding
the Corporation's ability to access additional capital, including
the volatility of prevailing economic conditions."
A copy of the second quarter 2012 consolidated financial
statements and results of operations is available for free at:
http://is.gd/BHoy65
A copy of the press release announcing Hydrogenics' second quarter
2012 results is available for free at http://is.gd/U1XzNE
Based in Mississauga, Ontario, Canada, Hydrogenics Corporation
(Nasdaq: HYGS) (TSX: HYG) -- http://www.hydrogenics.com/--
provides hydrogen generation, energy storage and hydrogen power
modules to its customers and partners around the world.
J.C. PENNEY: Fitch Downgrades IDR to 'BB'; Outlook Negative
-----------------------------------------------------------
Fitch Ratings has downgraded its Issuer Default Rating (IDR) on
J.C. Penney Co., Inc. and J.C. Penney Corporation, Inc. to 'BB-'
from 'BB+'. The Rating Outlook is Negative.
The ratings downgrades reflect Fitch's concern that top line is
likely to remain materially negative going into the critical back-
to-school and holiday seasons when promotional events tend to pick
up to drive traffic. J.C. Penney continues to struggle in terms
of moving toward a more everyday value strategy with significantly
reduced promotions.
The recent revisions around the promotional stance and messaging
could further exacerbate traffic trends, and gross margins could
be impacted by the need to clear out any excess merchandise. In
addition, the overall sales environment for moderate department
stores remains soft as reflected in second quarter sales
performance. Fitch therefore does not see any catalyst that would
lead to an improving trend versus J.C. Penney's first quarter
reported results (18.9% negative comparable store sales).
Fitch expects gross margin in 2012 will be worse than 2011 levels
(of 37.2% of sales excluding any one-time charges, the lowest
level over the last decade, versus an average of 39% between 2005
and 2010), and selling, general and administrative expense (SG&A)
to decline over 10% in dollar terms.
As a result, Fitch expects 2012 EBITDA to be $600 to $650 million
and leverage is expected to be in the mid-5.0x range (these
figures exclude non-cash pension expense, stock-based compensation
and restructuring charges).
The jury remains out on whether J.C. Penney has done some
irrevocable damage or whether it can begin to turn around
faltering sales and sustainably improve the profitability of its
business once it gets through this transformational year and
'rebases' its revenue level. The company's new merchandise and
upgraded stores, along with its pricing strategy, would have to
resonate with both its core and new customers to gain top line
traction.
Fitch expects that sales trends could remain in the negative low
single digit range in 2013 and gross margin to be between 37%-
37.5% (still below the normalized 39% range the company should
realize if inventory is appropriately aligned to sales
expectations). This would lead to leverage in the high 4.0x
range. Stabilization in sales trends and gross margin in the 39%
range could see leverage improve to the mid-3x range although
Fitch is not building this into its expectations currently unless
it starts seeing evidence of positive traction early next year.
Liquidity is expected to remain adequate to fund its investments
(including an undrawn $1.5 billion credit facility) and Fitch
assumes working capital to be cash neutral for the year. Fitch
does not expect J.C. Penney will need to draw on its credit
facility to fund working capital this year and expects year-end
cash balance to be in excess of $1.0 billion. This assumes
negative free cash flow of about $500 million and the recent debt
maturity paydown of $230 million. The company will have no debt
maturities prior to Oct. 2015 (and maturities between 2015 - 2018
are $200 million - $300 million annually).
The company's cost savings (projected at $900 million annually),
the dividend cut, and the monetization of non-core assets should
support the company's liquidity position.
WHAT COULD TRIGGER A RATING ACTION
A negative rating action would occur if J.C. Penney is unable to
stabilize its top line sometime in 2013 and profitability remains
pressured leading to leverage over 5.0x.
A change in Outlook to Stable or a Positive Rating action would
occur if top line starts to stabilize and the company realizes
more normalized gross margin levels, pushing EBITDA to over $1.0
billion.
Fitch has downgraded the ratings on J.C. Penney as follows:
J.C. Penney Co., Inc.
-- IDR to 'BB- from 'BB+'.
J.C. Penney Corporation, Inc.
-- IDR to 'BB- from 'BB+';
-- $1.5 billion senior secured bank credit facility to 'BB+'
from 'BBB-';
-- $2.9 billion senior unsecured notes and debentures to 'BB-'
from 'BB+'.
The Rating Outlook is Negative.
JOSE CANSECO: Former MLB MVP Files Chapter 7 Bankruptcy
-------------------------------------------------------
Michael Bathon, substituting for Bloomberg News bankruptcy
columnist Bill Rochelle, reports that Jose Canseco Jr., the former
Major League Baseball slugger, filed for bankruptcy protection to
liquidate his assets (Bankr. D. Nev. Case No. 12-18916) in Las
Vegas. Canseco, the 1988 American League MVP, listed about
$21,000 in assets and owes creditors about $1.7 million, according
to Chapter 7 documents filed July 31. The 48-year-old former
Oakland Athletic outfielder owes the Internal Revenue Service more
than $500,000, court papers show.
The report relates Mr. Canseco earns about $7,500 a month, taking
home about $3,000 after expenses. Mr. Canseco hit 462 homeruns
during his career, which spanned 17 years and seven different MLB
teams, according to ESPN.com. He won numerous awards during his
career including the 1986 AL Rookie of the Year, four Silver
Slugger awards for the best offensive player, and two World Series
titles.
The report notes the six-time all-star may best be known for what
he did off the field when he wrote "Juiced" a book in which he
admitted using steroids. The book, in which Canseco described
rampant use of performance-enhancing drugs in baseball, led to
congressional hearings and increased drug testing in the sport.
KEOWEE FALLS: Amends Schedules of Assets and Liabilities
--------------------------------------------------------
Keowee Falls Investment Group, LLC, filed with the U.S. Bankruptcy
Court for the District of South Carolina amended schedules of
assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $32,150,000
B. Personal Property $521,753
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $19,353,613
E. Creditors Holding
Unsecured Priority
Claims $75,627
F. Creditors Holding
Unsecured Non-priority
Claims $484,604
----------- -----------
TOTAL $32,671,753 $19,913,844
The changes aren't that significant from the original iteration of
the schedules, which disclosed $32,707,346 in total assets and
$19,662,041 in total liabilities.
A full text copy of the amended schedules of assets and
liabilities is available for free at:
http://bankrupt.com/misc/keoweefalls.doc63.pdf
About Keowee Falls Investment Group
Travelers Rest, South Carolina-based Keowee Falls Investment
Group, LLC, filed a Chapter 11 petition (Bankr. D. S.C. Case
No. 12-01399) in Spartanburg, South Carolina, on March 2, 2012.
Bankruptcy Judge John E. Waites presides over the case.
R. Geoffrey Levy, Esq., at Levy Law Firm, LLC assists the Debtor
in its restructuring effort. Keowee Falls estimated assets at
$100 million to $500 million and debts at $10 million to
$50 million.
The Cliffs Communities, Inc., owns 100% of the shares.
Units of The Cliffs Communities, led by The Cliffs Club &
Hospitality Group, Inc., doing business as The Cliffs Golf &
Country Club, along with 10 affiliates, sought Chapter 11
protection (Bankr. D. S.C. Lead Case No. 12-01220) on Feb. 28,
2012.
The Cliffs has eight premier, private master-planned residential
communities, each to have its own world-class golf course.
Approximately 3,734 lots have been sold. There are currently
1,385 finished homes, with 63 under construction. The properties
for sale are owned by non-debtor DevCo entities.
The Feb. 28 Debtors operate the exclusive membership clubs for
golf, tennis, wellness and social activities at The Cliffs'
communities in North and South Carolina. The clubs have 2,280
members, and there are 766 resigned members with refundable
deposits totaling $37 million. The Debtors do not own the golf
courses -- they only own or lease all the "core amenities" for the
operation of the golf courses.
LEGENDS GAMING: Moody's Cuts PDR to 'D' After Bankruptcy Filing
---------------------------------------------------------------
Moody's Investors Service downgraded Legends Gaming, LLC's
Probability of Default Rating (PDR) to D from Ca/LD following the
company's announcement that it filed for Chapter 11 bankruptcy
protection in the United States Bankruptcy Court in Western
District of Louisiana on July 31, 2012. Legends' Ca Corporate
Family Rating (CFR) and Caa3 first lien credit facilities ratings
remain unchanged.
The following ratings were downgraded and will be withdrawn:
-- Probability of Default Rating to D from Ca/LD
The following ratings will be withdrawn:
-- Corporate Family Rating at Ca
-- $163.5 million 1st lien senior secured term loan due 2014 at
Caa3 (LGD3, 34%)
-- Rating Outlook: Negative
Ratings Rationale
Subsequent to the actions, Moody's will withdraw the ratings
because Legends has entered bankruptcy.
The principal methodology used in rating Legends Gaming, LLC was
the Global Gaming Industry Methodology published in December 2009.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Legends Gaming, LLC, headquartered in Las Vegas, NV, currently
owns and operates two gaming properties located in Bossier City,
LA and Vicksburg, MS under the DiamondJacks Casino brand.
LIGHTSQUARED INC: Lenders Ask to Investigate Harbinger Capital
--------------------------------------------------------------
Michael Bathon, substituting for Bloomberg News bankruptcy
columnist Bill Rochelle, reports that a group of LightSquared Inc.
secured lenders asked for court permission to force Philip
Falcone's Harbinger Capital Partners LLC to produce documents,
saying they may have claims against the hedge fund that could
provide "significant value" to the estate.
According to the report, the lender group said the documents,
which it says Harbinger has refused to turn over, would aid its
investigation and if the claims prove viable they will seek court
authority to sue Harbinger. It appears Light Squared "made
preferential transfers to or for the benefit of Harbinger" within
one year of its bankruptcy filing, according to the lenders. The
group argues that last year, while only Harbinger entities were
lenders to LightSquared Inc., unsecured debt incurred on July 1,
2011 became secured debt more than 30 days later on Aug. 23, 2011.
"It appears there was no consideration provided by Harbinger for
such liens," the lender group said in court papers filed July 31
in Manhattan. "Harbinger's basis for its blanket refusal is that
'as these cases progress, it will become clear that sufficient
value exists to pay all creditors in full under a chapter 11
plan'," the lenders said in their court filing, according to the
report.
The report relays, separately the National Aeronautics and Space
Administration's inspector general dismissed LightSquared's
complaint that the vice chairman of a panel advising the U.S.
government on the company's proposed broadband network had
conflicts of interest. Bradford Parkinson's participation in
meetings of a NASA supervised committee where LightSquared's plan
was discussed wasn't a conflict with his role as a board member of
Trimble Navigation Ltd., a maker of GPS-enabled equipment, Paul
Martin, the space agency's Inspector General, said in a report
released Aug. 2, 2012. Although Trimble and other GPS companies
lobbied against LightSquared's plan, Mr. Parkinson has "disclosed
his ties to Trimble on his annual financial disclosure statements
and made no attempt to hide his board membership or stock
ownership," the inspector general said in a summary statement.
About LightSquared
LightSquared Inc. and 19 of its affiliates filed Chapter 11
bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on
May 14, 2012, as the Company seeks to resolve regulatory issues
that have prevented it from building its coast-to-coast integrated
satellite 4G wireless network.
LightSquared had invested more than $4 billion to deploy an
integrated satellite-terrestrial network. In February 2012,
however, the U.S. Federal Communications Commission told
LightSquared the agency would revoke a license to build out the
network as it would interfere with global positioning systems used
by the military and various industries. In March 2012, the
Company's partner, Sprint, canceled a master services agreement.
LightSquared's lenders deemed the termination of the Sprint
agreement would trigger cross-defaults under LightSquared's
prepetition credit agreements.
LightSquared and its prepetition lenders attempted to negotiate a
global restructuring that would provide LightSquared with
liquidity and runway necessary to resolve its issues with the FCC.
Despite working diligently and in good faith, however,
LightSquared and the lenders were not able to consummate a global
restructuring on terms acceptable to all interested parties,
prompting the bankruptcy filing.
As of the Petition Date, the Debtors employed roughly 168 people
in the United States and Canada. As of Feb. 29, 2012, the Debtors
had $4.48 billion in assets (book value) and $2.29 billion in
liabilities.
LightSquared also sought ancillary relief in Canada on behalf of
all of the Debtors, pursuant to the Companies' Creditors
Arrangement Act (Canada) R.S.C. 1985, c. C-36 as amended, in the
Ontario Superior Court of Justice(Commercial List) in Toronto,
Ontario, Canada. The purpose of the ancillary proceedings is to
request the Canadian Court to recognize the Chapter 11 cases as a
"foreign main proceeding" under the applicable provisions of the
CCAA to, among other things, protect the Debtors' assets and
operations in Canada. The Debtors named affiliate LightSquared LP
to act as the "foreign representative" on behalf of the Debtors'
estates.
Judge Shelley C. Chapman presides over the Chapter 11 case.
Lawyers at Milbank, Tweed,Hadley & McCloy LLP serve as counsel to
the Debtors. Kurtzman Carson Consultants LLC serves as claims and
notice agent.
Counsel to UBS AG as agent under the October 2010 facility is
Melissa S. Alwang, Esq., at Latham & Watkins LLP.
The ad hoc secured group of lenders under the Debtors' October
2010 facility was formed in April 2012 to negotiate an out-of-
court restructuring. The members are Appaloosa Management L.P.;
Capital Research and Management Company; Fortress Investment
Group;Knighthead Capital Management LLC; and Redwood Capital
Management. Counsel to the ad hoc secured group is Thomas E.
Lauria, Esq., at White & Case LLP.
Philip Falcone's Harbinger Capital Partners indirectly owns 96% of
LightSquared's outstanding common stock. Harbinger and certain of
its managed and affiliated funds and wholly owned subsidiaries,
including HGW US Holding Company, L.P., Blue Line DZM Corp., and
Harbinger Capital Partners SP, Inc., are represented in the case
by Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP.
LPATH INC: Aberdare Ventures Partner Kisner Appointed to Board
--------------------------------------------------------------
Lpath, Inc., has appointed Daniel L. Kisner, M.D., to its board of
directors. The appointment adds a seat to the board, bringing the
total number of directors to six, including five independent
directors.
"With his more than 30 years of experience with public and private
companies focused on biopharmaceuticals, oncology, and
biotechnology, Dr. Kisner will be a strong addition to our board,"
said Daniel H. Petree, Lpath's chairman. "As an independent
member of the board and chair of a new board committee that will
focus on advancing the drug candidates in our clinical and pre-
clinical pipeline, we believe he will make important contributions
as we move toward regulatory approval and commercialization of our
proprietary and novel lipidomics-based therapeutics."
Most recently, Dr. Kisner served as a partner at Aberdare Ventures
and, prior to that, he was president and CEO of Caliper
Technologies, leading its development from a start-up focused on
microfluidic lab-on-a-chip technology to a publicly-traded,
commercially successful organization. Prior to Caliper, he was
president and COO of Isis Pharmaceuticals.
Earlier in his career, Dr. Kisner served as division vice
president of pharmaceutical development for Abbott Laboratories
and vice president of clinical research and development at
SmithKline Beckman Pharmaceuticals. He has also held a tenured
position at the Division of Oncology at the University of Texas,
San Antonio School of Medicine, and is certified by the American
Board of Internal Medicine in Internal Medicine and Medical
Oncology. He serves as chairman of the board for Tekmira
Pharmaceuticals and is also a director of Dynavax Technologies.
He holds a B.A. from Rutgers University and an M.D. from
Georgetown University.
Pursuant to the Company's director compensation program, Dr.
Kisner will receive: an annual retainer of $30,000, payable in
quarterly installments, for his Board service; an annual retainer
of $9,000, payable in quarterly installments, for his service as
chair of the Compensation Committee; and an annual retainer of
$10,000, payable in quarterly installments, for his service as
chair of the new clinical development committee. Each of these
annual retainers will be pro-rated based on the date of his
appointment to the Board.
In addition, the Board issued Dr. Kisner a restricted stock unit
representing 35,295 shares of the Company's common stock, vesting
in 12 equal quarterly installments commencing on July 30, 2012.
The Board also issued Dr. Kisner a restricted stock unit for
35,295 shares, vesting in 4 equal quarterly installments
commencing on July 30, 2012. The restricted stock units provide
for accelerated vesting in the event of a change of control of the
Company.
About Lpath, Inc.
San Diego, Calif.-based Lpath, Inc. is a biotechnology company
focused on the discovery and development of lipidomic-based
therapeutics, an emerging field of medical science whereby
bioactive lipids are targeted to treat human diseases.
The Company reported a net loss of $3.11 million in 2011, compared
with a net loss of $4.60 million in 2010.
The Company's balance sheet at March 31, 2012, showed $23.28
million in total assets, $16.07 million in total liabilities and
$7.21 million in total stockholders' equity.
MAKENA GREAT: Aug. 7 Hearing on Continued Cash Use
--------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
continued until Aug. 7, 2012, at 10:00 a.m., the hearing to
consider the request of The Makena Great American Anza Company,
LLC for further access to cash collateral. The hearing will be
held at 219 South Dearborn, Courtroom 680, in Chicago.
The bankruptcy judge previously entered interim orders allowing
the Debtor access to cash collateral of Wells Fargo Bank, N.A.,
As adequate protection for any diminution in the value of its
prepetition collateral, the lender is granted replacement liens in
the prepetition collateral, including, without limitation, cash
collateral. The replacement liens will be in addition to the
security interests of the lender in the prepetition collateral and
cash collateral. In addition, the lender is granted a
superpriority administrative claim under Section 507(b) of the
Bankruptcy Code in the full amount allowable.
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.
Anza, Copley and El Monte have filed separate bankruptcy exit
plans. The Court is slated to consider approval of those plans at
hearings on Sept. 6 and 7, 2012.
MANISTIQUE PAPERS: mBank Prevented Liquidation
----------------------------------------------
Mackinac Financial Corporation discloses that as noted in its 2011
annual report, its banking subsidiary mBank was very close to
consummating the sale of Manistique Papers Inc. out of a Chapter
11 bankruptcy process where it had played the lead role in
facilitating since August 2011.
When mBank stepped in as the Senior Lender through a variety of
transactions to purchase legacy debt of the corporation and
provide new working capital funding to prevent the liquidation and
closure of this 91 year old paper mill and the loss of
approximately 150 jobs.
"We are very pleased to announce that in May of this year, though
the collective efforts of various parties, we were able to close a
sale to The Watermill Group, a private equity firm located in
Boston Mass., to become the new owner of the local mill and ensure
its continued vital operations for our local community in
Manistique," President and CEO of mBank said.
Mr. George commenting on the sale events, "We could not be happier
for the outcome of this endeavor we chose to take on 10 months ago
to support our second largest employer and icon of the local
business community Manistique Papers and all the good people who
have worked there for years. Manistique Papers will benefit
greatly from The Watermill Group's financial stability,
operational expertise and experience in environmental paper and we
appreciate the Watermill team's creative strategies for
revitalizing the mill and the commitment they've shown to the
company and local community. We're pleased to be working with
them going forward and look forward to a mutually rewarding
banking relationship as we move into a new rewarding chapter of
the paper mills legacy."
The disclosure was made in a press release announcing Mackinac's
second quarter results http://is.gd/qnBNAA
About Manistique Papers
Manistique Papers Inc. operates a landfill in Manistique,
Michigan, whereby residuals resulting from paper production are
deposited. It owns a 125,000 ton-a-year plant making specialty
papers from recycled fiber.
Manistique Papers filed for Chapter 11 bankruptcy protection
(Bankr. D. Del. Case No. 11-12562) on Aug. 12, 2011. Godfrey &
Kahn, S.C. represents the Debtor in its restructuring effort.
Morris, Nichols, Arsht & Tunnell LLP serves as its Delaware
bankruptcy co-counsel. Vector Consulting, L.L.C., serves as its
financial advisor. Baker Tilly Virchow Krause, LLC, serves as its
accountant.
The Official Committee of Unsecured Creditors appointed in the
case is represented by Lowenstein Sandler PC as lead counsel and
Ashby & Geddes, P.A., as Delaware counsel. J.H. Cohn LLC serves
as the panel's financial advisor.
Manistique Papers disclosed $19,688,471 in assets and $24,633,664
in liabilities as of the Chapter 11 filing.
MASHANTUCKET PEQUOT: Foxwoods Owner to Restructure $2.2-Bil. Debt
-----------------------------------------------------------------
Michael Bathon, substituting for Bloomberg News bankruptcy
columnist Bill Rochelle, reports that the Mashantucket Pequot
Tribal Nation, owner of the Foxwoods Resort Casino in Connecticut,
reached a preliminary agreement with lenders to restructure $2.2
billion in debt.
The report relates that the accord lowers the debt balance and
extends maturities at favorable rates, Foxwoods Chief Executive
Officer Scott Butera said yesterday in a statement, without
disclosing specifics. The tribe will work with lenders and
bondholders to build support for the agreement over the next
several months.
"This represents a critical step forward for our business," Mr.
Butera said in the statement, according to the report. "It
provides for a capital structure that will support significant
investments in our gaming and hospitality businesses."
Since it is located on tribal land, lenders cannot foreclose and
the property can't be restructured in a Chapter 11 bankruptcy
proceeding, Mr. Butera told the New York Times this year. He
described the situation as "sort of like being stuck in no man's
land."
About Mashantucket Pequot
Mashantucket Pequot Tribal Nation owns and operates Foxwoods
Resort Casino in Ledyard, Connecticut. Foxwoods, among the
largest casinos in the U.S. by gambling space, is on tribal land
in the town of Ledyard. It opened a casino hotel expansion under
the MGM Grand brand in 2008 just as the recession began to pinch
gambling revenue and nearby states expanded their gaming
offerings.
The Wall Street Journal's Mike Spector reported in July 2010 that
the tribe was in talks with banks and bondholders about how best
to restructure more than $2 billion in debt that it can no longer
afford. According to Mr. Spector's report, a mid-July deadline
for a big payment to lenders loomed, and people familiar with the
matter said the tribe wants bondholders to wipe out a significant
portion of its roughly $1.3 billion in bond debt, in some cases
paring the tribe's obligations by at least half.
As reported by the Troubled Company Reporter on August 30, 2010,
Standard & Poor's Ratings Services withdrew its ratings on the
Mashantucket Western Pequot Tribe. S&P lowered its issuer credit
rating on the Tribe to 'D' on Nov. 16, 2009, following the Tribe's
announcement that it did not make the full interest payment due on
its notes.
MAUI LAND: Posts $1 Million Net Loss in Second Quarter
------------------------------------------------------
Maui Land & Pineapple Company, Inc., filed its quarterly report on
Form 10-Q, reporting a net loss of $1.03 million on $3.45 million
of total operating revenues for the three months ended June 30,
2012, compared with a net loss of $2.46 million on $3.82 million
of revenues for the same period of 2011.
For the six months ended June 30, 2012, the Company reported a net
loss of $1.28 million on $8.76 million of total operating
revenues, compared with net income of $9.96 million on
$7.66 million of total operating revenues for the same period last
year.
Consolidated revenues during the six months ended June 30, 2012,
includes the January 2012 sale of an 89-acre parcel in Upcountry
Maui for $1.5 million.
Income from discontinued operations for the six months ended
June 30, 2011, included a gain of $15.1 million recognized in
March 2011 from sale of the Kapalua Bay Golf Course (Bay Course).
The Company's balance sheet at June 30, 2012, showed
$62.52 million in total assets, $89.37 million in total
liabilities, and a shareholders' deficiency of $26.85 million.
As reported in the TCR on March 9, 2012, Deloitte & Touche LLP, in
Honolulu, Hawaii, expressed substantial doubt about Maui Land'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 negative cash flows
from operations and deficiency in stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/P2nrqy
Located in Kapalua, Maui, Hawaii, Maui Land & Pineapple Company,
Inc., Maui Land & Pineapple Company, Inc., consists of a
landholding and operating parent company, its principal
subsidiary, Kapalua Land Company, Ltd., and certain other
subsidiaries of the Company.
The Company owns approximately 23,400 acres of land on Maui and
develops, sells, and manages residential, resort, commercial, and
industrial real estate.
MAUI LAND: Incurs $1 Million Net Loss in Second Quarter
-------------------------------------------------------
Maui Land & Pineapple Company, Inc., reported a net loss of $1.03
million on $3.45 million of total operating revenues for the three
months ended June 30, 2012, compared with a net loss of $2.46
million on $3.81 million of total operating revenues for the same
period during the prior year.
The Company reported a net loss of $1.27 million on $8.76 million
of total operating revenue for the six months ended June 30, 2012,
compared with net income of $9.96 million on $7.66 million of
total operating revenue for the same period a year ago.
"We continue to recognize improvements in our ongoing cash flow
from operations through increased leasing revenues from our
primary land holdings, sales of non-core real estate assets, and
by cost reduction efforts," said Tim Esaki, Chief Financial
Officer.
A copy of the press release is available for free at:
http://is.gd/KqF5o3
About Maui Land & Pineapple Co.
Maui Land & Pineapple Company, Inc. (NYSE: MLP) --
http://mauiland.com/-- develops, sells, and manages residential,
resort, commercial, and industrial real estate. The Company owns
approximately 23,000 acres of land on Maui and operates retail,
utility operations, and a nature preserve at the Kapalua Resort.
The Company's principal subsidiary is Kapalua Land Company, Ltd.,
the operator and developer of Kapalua Resort, a master-planned
community in West Maui.
The Company's balance sheet at March 31, 2012, showed
$64.03 million in total assets, $90.12 million in total
liabilities, and a $26.09 million stockholders' deficiency.
Following the financial results for the year ended Dec. 31, 2011,
the Company's independent auditors expressed substantial doubt
about the Company's ability to continue as a going concern.
Deloitte & Touche LLP, in Honolulu, Hawaii, noted that the
Company's recurring negative cash flows from operations and
deficiency in stockholders' equity raise substantial doubt
about the Company's ability to continue as a going concern.
MGIC INVESTMENT: Breaches Capital Limit After Loss
--------------------------------------------------
Michael Bathon, substituting for Bloomberg News bankruptcy
columnist Bill Rochelle, reports that MGIC Investment Corp.
plunged by more than half after the Milwaukee-based mortgage
insurer reported its biggest loss since 2009 and the company's
risk-to-capital ratio breached regulatory standards.
MGIC fell 64 percent to close at 88 cents in New York Aug. 2, its
biggest one-day drop since going public in 1991, after posting a
net loss of $273.9 million compared with $151.7 million a year
earlier.
According to the report the cost to protect the debt of MGIC from
default soared. The firm is counting on sales of new policies to
help rebuild capital after the deepest housing crash in seven
decades drained liquidity at mortgage insurers including MGIC,
which cover losses when homeowners default and foreclosures fail
to recoup costs.
The report relates MGIC's preliminary ratio of risk to capital for
combined operations rose to 30-to-1 as of June 30 from 22.2-to-1
at March31, exceeding the 25-to-1 level required by some
regulators to write new policies, the firm said yesterday in a
statement. The company said it has received waivers from some
overseers to continue sales.
"This is an extremely troubled company and its ongoing viability,
obviously the markets are putting a big question mark about that,"
said Rob Haines, an analyst at CreditSights Inc, according to the
report. "It seems like it's inevitable that the company will
ultimately end up in some kind of regulatory receivership."
The report notes Chief Executive Officer Curt Culver said the
company's results were hurt by a "lackluster economic recovery" in
the U.S. The insurer has enough cash to meet obligations to
clients, he said. "There is no liquidity issue at the insurance
operation," Culver, 60, said on a conference call with analysts.
"We have sufficient claims-paying resources to meet all
obligations to policyholders. "Mortgage-guarantor PMI Group Inc.
filed for bankruptcy protection in November and Triad Guaranty
Inc. stopped selling new policies in 2008 as capital ran short.
Losses also prompted.
About MGIC Investment
MGIC Investment Corporation is a holding company. Through its
wholly owned subsidiaries, the Company provides private mortgage
insurance in the United States. As of Dec. 31, 2009, the
Company's principal subsidiary, Mortgage Guaranty Insurance
Corporation, was licensed in all 50 states of the United States,
the District of Columbia, Puerto Rico and Guam. During the year
ended Dec. 31, 2009, MGIC wrote all of its new insurance
throughout the United States. In addition to mortgage insurance
on first liens, the Company, through its subsidiaries, provides
lenders with various underwriting, and other services and products
related to home mortgage lending. There are two principal types
of private mortgage insurance: primary and pool. As of Dec. 31,
2009, the Company was not issuing new commitments for pool
insurance.
MGIC Investment reported a net loss for the quarter ended March
31, 2012 of $19.6 million, compared with a net loss of
$33.7 million for the same quarter a year ago.
MMODAL INC: Moody's Assigns 'B2' Corp. Family Rating
----------------------------------------------------
Moody's Investors Service assigned to MModal Inc. (M*Modal) a
corporate family rating of B2, a probability of default rating of
B2, a Ba3 instrument rating to its proposed $75 million senior
secured credit facility and $440 million senior secured term loan
B and a Caa1 instrument rating to its proposed $250 million senior
unsecured notes. The outlook for all ratings is stable.
The proceeds of the senior secured term loan and senior unsecured
notes will be used to finance the acquisition of M*Modal by
affiliates of One Equity Partners, refinance existing debt and pay
associated deal expenses. Sponsor equity will provide additional
cash to complete the transaction.
The following ratings were assigned:
Corporate Family Rating, B2
Probability of Default Rating, B2
$75 million Senior Secured Revolver due 2017, Ba3 (LGD-3, 31%)
$440 million Senior Secured Term Loan B due 2019, Ba3 (LGD-3,
31%)
$250 million Senior Notes due 2020, Caa1 (LGD-5, 85%)
Ratings Rationale
M*Modal's B2 corporate family rating reflects its high financial
leverage, total revenue size below $500 million, reliance on new
products for accelerated revenue growth and free cash flow
generation, limited operating history and single market focus on
medical transcription and voice recognition services and
technology. Debt to EBITDA at closing is about 8.6 times before
non-standard adjustments, and 5.4 times as adjusted. M*Modal was
formed from the merger of four predecessor organizations over the
last four years, so operating history is limited. Most revenues
are from large surgical hospitals, which rely on M*Modal's
transcription outsourcing services (TOS) for core clinical
documentation, decision support and reimbursement activities. TOS
client annual retention of over 97% reflects the quality and
embedded nature of M*Modal's service; Moody's expects high client
retention to continue. Individual customer concentration is
moderate. Future revenue and free cash flow growth is dependent
upon recently released and still unreleased new products. However,
Moody's believes M*Modal's new products, which demonstrate
"meaningful use" of new electronic health record (EHR) systems,
will be widely adopted by existing TOS customers. In addition,
M*Modal's voice recognition technology is licensed by EHR systems
vendors, further broadening its reach.
The stable outlook reflects Moody's expectation for recurring TOS
revenue, new product profitability and free cash flow generation,
driving debt to EBITDA of less than 5.0 times and free cash flow
to debt of over 8% in the next 12 to 18 months. A downgrade could
occur if material new product sales or profitability fail to
materialize or existing TOS revenues or profitability decline
faster than expected, causing us to expect debt to EBITDA and free
cash flow to debt to be maintained above 6.0 times and below 5%,
respectively. An upgrade is unlikely in the near term given the
company's revenue size, limited operating history and
concentration in a single market. However, over the longer term,
the ratings could be upgraded if customer growth expands into new
markets, new products become widely adopted and free cash flow
expands materially such that Moody's comes to expect debt to
EBITDA and free cash flow to debt to be maintained at about 4.0
times and above 10%, respectively.
The principal methodology used in rating M*Modal was the Global
Software Industry Methodology published in May 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.
M*Modal is a provider of Transcription Outsourcing Services (TOS)
and related Automated Speech Recognition (ASR) technology serving
clinical healthcare institutions the U.S., Canada and United
Kingdom. Moody's expects 2012 revenues of over $475 million.
MOORE SORRENTO: Court Enters New Plan Confirmation Order
--------------------------------------------------------
Moore Sorrento, LLC, presented an amended Chapter 11 plan for
confirmation at a hearing on July 26, 2012, after the prior
iteration of the Plan and the May 15 plan confirmation was
declared null and void.
Moore Sorrento in mid-May won confirmation of a Chapter 11 Plan
that required the Debtor to complete the sale of its shopping
center The Shops at Moore by May 31. The Plan, which proposes to
provide a 100% recovery to creditors, also required the Debtor to
make a cash payment of $37,875,000 (from the proceeds of the sale)
to Wells Fargo Bank N.A. by the closing date.
But the buyer, Inland, failed to close on the sale and instead
sought to renegotiate certain terms of the sale.
The parties later entered negotiations and reached a new asset
purchase agreement on July 18. Wells Fargo participated in the
negotiations and agreed to a payment of $37,275,000 cash payment
on closing of the sale, and a promissory note in the amount of
$300,000 payable in two years.
At a hearing on July 26, the Court approved the sale of the
shopping center under modified terms and entered a new order
confirming the Plan.
About Moore Sorrento
Hurst, Texas-based Moore Sorrento, LLC, owns real property located
in Moore, Oklahoma, commonly known as the Shops at Moore, which
the Company operates as a retail shopping center. The center's
current 23 tenants offer various goods and services to retail
customers.
Moore Sorrento filed Chapter 11 bankruptcy protection (Bankr. N.D.
Tex. Case No. 11-44651) on Aug. 17, 2011. In its
schedules, Moore Sorrento disclosed assets of $43,259,900 and
liabilities of $42,262,158 as of the Petition Date.
Attorneys for Wells Fargo Bank, N.A., Successor-by-Merger to
Wachovia Financial Services, Inc., is:
J. Robert Forshey, Esq., and Matthew G. Maben, Esq., at Forshey &
Prostok, LLP, in Fort Worth, Tex., serve as the Debtor's counsel.
J. Frasher Murphy, Esq., at Winstead PC, in Dallas, represents
Wells Fargo.
NAVISTAR INT'L: Obtains $1-Bil. Commitment from JPMorgan, et al.
----------------------------------------------------------------
Navistar International Corporation announced significant actions
that build on the Company's introduction of ICT+ (In-Cylinder
Technology Plus) and are designed to enhance the Company's
competitive position and drive profitable growth and shareholder
value. These actions include:
* Adopting a U.S. market proven after treatment solution to
accelerate delivery of ICT+, Navistar's next generation clean
engine solution;
* A market transition plan for Class 8 engine sales; and
* Securing a $1.0 billion loan commitment, which further
enhances Navistar's liquidity
Navistar also provided an outlook for fiscal third quarter 2012
and announced it will provide updated guidance on full-year fiscal
2012 when the company releases its third quarter results in
September.
"The actions announced today establish a clear path forward for
Navistar and position the company to deliver a differentiated
product to our customers and provide a platform for generating
profitable growth," said Daniel C. Ustian, Navistar chairman,
president and CEO.
ICT+ Update
The introduction of ICT+ leverages the advances Navistar has made
in clean engine technology, while also providing greater certainty
for its customers, dealers, and other key constituents. To
accelerate delivery of ICT+, Navistar has entered into a non-
binding memorandum of understanding, under which Cummins Emission
Solutions would supply its proven urea-based aftertreatment system
to Navistar. This would be combined with Navistar's advanced in-
cylinder engine to create ICT+.
Navistar expects that by combining Cummins' aftertreatment system
with its existing MaxxForce engines, its ICT+ will meet 2010 U.S.
Environmental Protection Agency (EPA) emissions regulations and
position the company to meet greenhouse gas (GHG) rules in advance
of 2014 and 2017 requirements. "With this clean engine solution,
we are taking the best of both technology paths to provide our
customers with the cleanest and most fuel efficient engines and
trucks on the market and to meet stringent U.S. emission
regulations," Ustian said.
Market Transition Plan
During the transition to ICT+, Navistar will continue to build and
ship current model EPA-compliant trucks in all vehicle classes
using appropriate combinations of earned emissions credits or non-
conformance penalties (NCPs). The Company continues to have
productive discussions with the EPA and the California Air
Resources Board (CARB) regarding its transition to ICT+.
As part of the expanded relationship with Cummins Inc., Navistar
plans to offer the Cummins ISX15 engine in certain models,
expanding the Company's vehicle lineup and on-highway market
opportunity. Navistar plans to introduce the Cummins ISX15 engine
as a part of its North American on-highway truck line-up beginning
in January 2013 and to begin the introduction of ICT+ in its
MaxxForce 13-liter in early 2013.
Financing Commitment & Cash Update
The Company anticipates that its manufacturing cash will be
between $575 million and $625 million at the end of the third
quarter. Additionally, to support these actions and to improve
its financial flexibility, Navistar has entered into a firm
commitment letter with a group of banks led by JPMorgan Chase
Bank, N.A., and Goldman Sachs Lending Partners LLC, and including
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Credit
Suisse, pursuant to which the banks have committed to provide an
up to five year $1.0 billion senior secured term loan. A portion
of the proceeds from this financing will be used to pay down the
existing borrowings under Navistar's ABL credit facility.
A copy of the Commitment Letter is available for free at:
http://is.gd/UeCeyL
Business Outlook
Navistar also provided an outlook for fiscal third quarter 2012
and withdrew its full-year fiscal 2012 guidance until the company
releases its third quarter results in September, at which time it
will provide an updated full-year outlook. The changes reflect
the Company's transition to the ICT+ engine solution, its ongoing
work with EPA regarding this solution, and uncertainty regarding
overall global demand for trucks and engines, particularly in key
markets such as India and Brazil.
Navistar's overall market share for the fiscal third quarter is
projected to remain flat: Class 8 at 17-18%; Class 6-7 at 35-36%;
and school bus at 48-49%. The Company's third quarter revenues
are expected to be $2.8 billion to $3 billion. Navistar expects
fiscal third quarter adjusted manufacturing segment profit to be
between $15 and $40 million, excluding the impact of the Company's
engineering integration and non-conformance penalties. Including
the impact of these charges the manufacturing segment profit is
estimated to be between a $15 million loss to $15 million of
profit. Navistar expects an adjusted pretax loss of between $115
million and $80 million. Including the impact of the engineering
integration and non-conformance penalties Navistar expects a
pretax loss of between $145 and $105 million.
"We expect to sustain our current market share through the balance
of the year, and with the addition of ICT+ and an expanded model
lineup, improve our market share in 2013," Ustian said. "We
expect to return to profitability in the fourth quarter and
believe the company will be in a position to improve margins in
2013 as we realize the benefits of our integration and ongoing
cost reduction initiatives. We look forward to providing further
details of our plan to drive shareholder value on our third
quarter results conference call in September."
Additional Update
The Company also disclosed that it has received a formal letter of
inquiry from the United States Securities and Exchange Commission
requesting additional information related to certain accounting
and disclosure matters. Navistar is cooperating fully with this
request.
About Navistar International
Navistar International Corporation (NYSE: NAV) --
http://www.Navistar.com/-- is a holding company whose
subsidiaries and affiliates subsidiaries produce International(R)
brand commercial and military trucks, MaxxForce(R) brand diesel
engines, IC Bus(TM) brand school and commercial buses, Monaco RV
brands of recreational vehicles, and Workhorse(R) brand chassis
for motor homes and step vans. It also is a private-label
designer and manufacturer of diesel engines for the pickup truck,
van and SUV markets. The company also provides truck and diesel
engine parts and service. Another affiliate offers financing
services.
The Company's balance sheet at Jan. 31, 2012, showed
$11.50 billion in total assets, $11.69 billion in total
liabilities, and a $195 million total stockholders' deficit.
* * *
In the Aug. 3, 2012, edition of the TCR, Moody's Investors Service
lowered Navistar International Corporation's Corporate Family
Rating (CFR), Probability of Default Rating (PDR), and senior note
rating to B2 from B1. The downgrade of Navistar's ratings
reflects the significant challenges the company will face during
the next eighteen months in re-establishing the profitability and
competitiveness of its US and Canadian truck operations in light
of the failure to achieve EPA certification of its EGR emissions
technology, the significant reductions in military revenues and
substantially higher engine warranty reserves.
As reported by the TCR on June 13, 2012, Standard & Poor's Ratings
Services lowered its ratings on Navistar International Corp.,
including the corporate credit rating to 'B+', from 'BB-'. "The
downgrade and CreditWatch placement reflect the company's
operational and financial setbacks in recent months," said
Standard & Poor's credit analyst Sol Samson.
NEF LLC: Fitch Cuts Rating on Subordinate Note to 'BBsf'
--------------------------------------------------------
Fitch Ratings downgrades the Subordinate note issued by National
Ed Financing LLC (NEF LLC) to 'BBsf' from 'Asf' . The Outlook
remains Stable.
The downgrade is driven by the under-collateralization of the
subordinate note. The trust has not been able to build up parity
since the deal's inception. As of June 30, 2012, the total parity
is 97.73%.
This review of NEF LLC is based on collateral performance data as
of June 2012. The trust collateral consists of 89.42% FFELP Loans
with 10.58% of private loans. The parity stagnation is due to
continuous elevated default levels for the private loans, and the
high cost of funds associated with the class A notes the trust has
incurred in the past few years, which has contributed to a lower
interest margin.
Fitch has taken the following rating actions:
NEF LLC
Series 2008-A
-- Class B downgraded to 'BBsf' from 'Asf'; Outlook Stable.
NEXTWAVE WIRELESS Has Merger and Note Purchase Pacts with AT&T
--------------------------------------------------------------
NextWave Wireless Inc. has entered into a definitive agreement to
be acquired by AT&T. In addition, the holders of NextWave's
secured notes have entered into separate note purchase agreements
with AT&T.
Merger Agreement
The AT&T merger agreement provides that AT&T will acquire all of
the outstanding common shares of NextWave for $1.00 per share plus
a contingent payment right representing a $25 million interest in
an escrow fund, representing up to approximately $0.95 per share,
such escrow fund being subject to reduction to satisfy
indemnification rights held by AT&T in respect of breaches of
representations and warranties, certain pre-closing liabilities,
balance sheet adjustments and other items described in the
Agreement.
At the time of the acquisition, NextWave will hold only its U.S.
WCS and AWS spectrum assets, with the remainder of its assets and
liabilities, including its Canadian WCS spectrum and its 2.5 MHz
EBS/BRS spectrum assets, being held by a new holding company.
NextWave will transfer the equity interest in NextWave Holdco in
partial redemption of its secured notes.
Note Purchase Agreements
AT&T has entered into note purchase agreements with each of the
holders of NextWave's 15% Senior Secured Notes due 2012, its
Senior-Subordinated Secured Second Lien Notes due 2013 and its 16%
Third Lien Subordinated Secured Convertible Notes due 2013.
Pursuant to the note purchase agreements, upon consummation of the
merger, AT&T will purchase the Notes for a cash amount equal to
$600 million, less the consideration paid by AT&T in the merger
and subject to a $25 million escrow hold-back to secure post-
closing indemnification rights held by AT&T. The amount of cash
to be paid at closing in respect of the Convertible Notes will
also be subject to reduction for closing date liabilities of
NextWave, including certain tax amounts, and amounts necessary to
repay a new working capital facility of up to $15 million to be
provided by the holders of the Senior Notes. AT&T will also have
the option in the event the merger is not consummated and upon the
occurrence of certain other events, to purchase the Convertible
Notes. The total amount of indebtedness of NextWave currently
outstanding under the Notes is approximately $1.1 billion. Upon
completion of the AT&T note purchase transactions, NextWave will
redeem the remaining outstanding amount of its Convertible Notes
for the equity interests in NextWave Holdco.
Transaction Process
The merger and the transactions contemplated thereby were
unanimously approved by the Independent Committee of NextWave's
Board of Directors and the Board of Directors. Moelis & Company
LLC acted as financial advisor to the Independent Committee.
The transaction is subject to customary closing conditions,
including approval of NextWave's shareholders' of record as of
Sept. 4, 2012, and regulatory approvals, including approval of the
Federal Communications Commission. Certain stockholders of
NextWave, who are entitled to vote an aggregate of approximately
59 percent of the outstanding common shares, have agreed to vote
in favor of the transaction.
About Nextwave Wireless
NextWave Wireless Inc. (PINK: WAVE) is a holding company for
holding company for a significant wireless spectrum portfolio.
Its continuing operations are focused on the management of ikts
wireless spectrum interests. Total domestic spectrum holdings
consist of approximately 3.9 billion MHz POPs. Its international
spectrum included in continuing operations include 2.3 GHz
licenses in Canada with 15 million POPs covered by 30 MHz of
spectrum.
The Company disclosed total assets of $457.139 million, total
current liabilities of $1,064.058 million, deferred income tax
liabilities of $84.148 million and long-term obligations, net of
current portion of $14.854 million, and total stockholders'
deficit of $705.921 million.
In its report on the Company's annual report for year ended
Dec. 31, 2011, Ernst & Young, said, "The Company has incurred
recurring operating losses and has a working capital
deficiency, primarily comprised of the current portion of long
term obligations of $142.0 million at December 31, 2011 that is
associated with the maturity dates of its debt. The Company
currently does not have the ability to repay this debt at
maturity. These conditions raise substantial doubt about the
Company's ability to continue as a going concern."
OMEGA NAVIGATION: Files Chapter 11 Plan of Reorganization
---------------------------------------------------------
Omega Navigation Enterprises Inc. has filed before the bankruptcy
court in Houston, Texas, a Chapter 11 Disclosure Statement and
proposed Plan of Reorganization. The key components of the Plan
include:
-- the continuation of Omega's operations in the ordinary
course of business on a reorganized basis, including
the continued ownership and management of Omega's
fleet;
-- a "new value" equity investment of $2,500,000 or
$2,600,000 (depending on the circumstances) from an
entity affiliated with Omega's Founder and Chief
Executive Officer, subject to agreement as to the
finalterms of such investment and satisfaction of
related conditions;
-- the replacement of the current Senior Facilities
Agreement with a New Facilities Agreement maturing on
October 30, 2017, which would include a new money
working capital facility in the maximum amount of
$7,500,000 to fund certain Omega Chapter 11 expenses
and for working capital purposes going forward;
-- a rights offering entitling Omega's general unsecured
creditors to purchase equity of the reorganized Omega
on a dollar-for-dollar basis with the new value equity
investment, and in which Omega's Junior Lenders can
also participate if they accept the Plan;
-- a cash distribution of approximately 10% to Omega's
Unsecured creditors over time if they accept the Plan
(but no distribution if they do not accept the Plan);
and
-- the payment in full of all administrative expenses and
other priority claims.
Because the Plan does not propose to pay Omega's unsecured
creditors in full, Chapter 11 does not permit a distribution to
current shareholders. Accordingly, the Plan contemplates that
Omega's current shareholders will not receive or retain any shares
or other distributions on account of their equity interests and
that Omega will emerge from Chapter 11 as a private company no
longer subject to public reporting requirements.
The Plan is subject to various conditions, including the
acceptance of the Plan by Omega's Senior Lenders. While Omega
remains in discussions with its Senior Lenders, there can be no
assurance that the Senior Lenders will ultimately agree to accept
the Plan. If they have not agreed to accept the Plan by the date
of the Bankruptcy Court hearing on approval of the Disclosure
Statement (Sep. 4, 2012), Omega has reserved the right to withdraw
the Plan and to pursue other options.
Omega believes that the Plan, if accepted by the Senior Lenders
and certain other persons and approved by the Bankruptcy Court,
will enable Omega to emerge from Chapter 11 in early Nov. 2012 as
a financially stronger business that will be positioned to enjoy
future growth based on the strength of its existing modern fleet
of product tanker vessels.
About Omega Navigation
Athens, Greece-based Omega Navigation Enterprises Inc. and
affiliates, owner and operator of tankers carrying refined
petroleum products, filed for Chapter 11 protection (Bankr. S.D.
Tex. Lead Case No. 11-35926) on July 8, 2011, in Houston, Texas in
the United States.
Omega is an international provider of marine transportation
services focusing on seaborne transportation of refined petroleum
products. The Debtors disclosed assets of US$527.6 million and
debt totaling US$359.5 million. Together, the Debtors wholly own
a fleet of eight high-specification product tankers, with each
vessel owned by a separate debtor entity.
Judge Karen K. Brown presides over the case. Bracewell &
Giuliani LLP serves as counsel to the Debtors. Jefferies &
Company, Inc., is the financial advisor and investment banker.
The Official Committee of Unsecured Creditors has tapped Winston
& Strawn as local counsel; Jager Smith as lead counsel; and First
International as financial advisor.
OMNICOMM SYSTEMS: Reports $1.55-Mil. Net Income in 2nd Quarter
--------------------------------------------------------------
OmniComm Systems, Inc., filed its quarterly report on Form 10-Q,
reporting net income of $1.55 million on $4.07 million of total
revenues for the three months ended June 30, 2012, compared with a
net loss of $997,312 on $3.35 million of total revenues for the
same period a year earlier.
For the six months ended June 30, 2012, the Company reported a net
loss of $1.83 million on $7.84 million of total revenues, compared
with a net loss of $4.89 million on $6.67 million of total
revenues for the same period of 2011.
The Company's balance sheet at June 30, 2012, showed $3.77 million
in total assets, $26.77 million in total liabilities, and a
stockholders' deficit of $23.00 million.
Webb & Company, P.A., in Boynton Beach, Fla., expressed
substantial doubt about OmniComm' 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 a net loss attributable to common shareholders of
$3.73 million, a negative cash flow from operations of $310,964, a
working capital deficiency of $6.68 million and a stockholders'
deficiency of $21.20 million.
A copy of the Form 10-Q is available for free at:
http://is.gd/C1Nfix
Ft. Lauderdale, Fla.-based OmniComm Systems, Inc., is a healthcare
technology company that provides Web-based electronic data capture
("EDC") solutions and related value-added services to
pharmaceutical and biotech companies, clinical research
organizations, and other clinical trial sponsors principally
located in the United States and Europe.
OMNICOMM SYSTEMS: Five Directors Elected at Annual Meeting
----------------------------------------------------------
Omnicomm Systems, Inc., held its annual stockholders' meeting on
Aug. 2, 2012, at which Randall G. Smith, Cornelis F. Wit, Guus van
Kesteren, Dr. Jonathan Seltzer and Matthew D. Veatch were elected
to the board of directors to serve until the date of the Company's
next annual meeting until their successors have been elected and
qualified. The stockholders also ratified the appointment of Webb
& Company as the Company's independent auditors.
About OmniComm Systems
Ft. Lauderdale, Fla.-based OmniComm Systems, Inc. (OTC: OMCM.OB)
-- http://www.OmniComm.com/-- provides customer-driven Internet
solutions to pharmaceutical, biotechnology, research and medical
device organizations that conduct life changing clinical trial
research. OmniComm Systems, Inc., has U.S. headquarters in Fort
Lauderdale, Fla. and European headquarters in Bonn, Germany, with
satellite offices in New Jersey and the United Kingdom, as well as
sales offices throughout the U.S. and Europe.
The Company reported a net loss of $3.52 million in 2011, compared
with a net loss of $3.13 million in 2010.
The Company's balance sheet at March 31, 2012, showed $3.38
million in total assets, $27.94 million in total liabilities and a
$24.55 million total shareholders' deficit.
The Company said in its quarterly report for the period ended
March 31, 2012, that its ability to continue in existence is
dependent on its having sufficient financial resources to bring
products and services to market for marketplace acceptance. As a
result of the Company's historical operating losses, negative cash
flows and accumulated deficits for the period ending March 31,
2012, there is substantial doubt about the Company's ability to
continue as a going concern.
ONLINE RESOURCES: Has $832,000 Net Loss Available to Common in Q2
-----------------------------------------------------------------
Online Resources Corporation filed its quarterly report on Form
10-Q, reporting net income of $1.72 million on $40.42 million of
total revenues for the three months ended June 30, 2012, compared
with net income of $124,000 on $38.33 million of total revenues
for the same period a year earlier.
Net loss available to common stockholders decreased $1.51 million
to a net loss of $832,000 for the three months ended June 30,
2012, compared to net loss of $2.34 million for the three months
ended June 30, 2011.
For the six months ended June 30, 2012, the Company reported net
income of $4.33 million on $81.71 million of total revenues,
compared with a net loss of $4.63 million on $77.61 million of
revenues for the same period of 2011.
Net loss available to common stockholders decreased $8.77 million
to net loss of $747,000 for the six months ended June 30, 2012,
compared to net loss of $9.52 million for the six months ended
June 30, 2011.
The Company's balance sheet at June 30, 2012, showed
$302.91 million in total assets, $45.24 million in total
liabilities, $125.18 million of redeemable convertible preferred
stock, and stockholders' equity of $132.49 million.
According to the regulatory filing, the holder of the Company's
outstanding Series A-1 Preferred Stock has a right to request that
the Company redeem all, or any part, of the Series A-1 Preferred
Stock at any time on or after July 3, 2013, which is the seventh
anniversary of the issue date of the Series A-1 Preferred Stock.
Similarly, the Company has a right to call for redemption of all
or any part of the outstanding shares of Series A-1 Preferred at
any time on or after July 3, 2013.
The Series A-1 Preferred Stock provides that, in the event the
holder of the shares elects to cause the Company to redeem all or
part of the shares, such shares called for redemption will be
redeemed by the Company by payment of the redemption price in cash
"in full, from the funds legally available therefor."
"Upon the holder's election to exercise this right of redemption
with respect to all or any substantial portion of the Series A-1
Preferred Stock, we anticipate that we will not have the necessary
funds legally available to redeem the shares of Series A-1
Preferred Stock and that we may not have the ability to raise
funds for this purpose, whether on favorable terms or at all."
"If the holder of our Series A-1 Preferred Stock exercises its
right to redemption on or after July 3, 2013, such exercise and
the resulting obligations of the Company with respect to the
exercise could have a material adverse impact on our stock price,
business, financial condition and results of operations. Further,
unless we are able to renegotiate the terms of the Series A-1
Preferred Stock or otherwise raise the funds for redemption in
advance of the redemption date, we may experience a material
adverse impact on our stock price, business, financial condition
and results of operations in advance of the redemption date due to
market concerns relating to our ability to operate our business in
the face of our potential redemption obligations."
A copy of the Form 10-Q is available for free at:
http://is.gd/7kfO5X
Online Resources Corporation, headquartered in Chantilly,
Virginia, develops and supplies proprietary "Digital Payment
Framework" to power ePayments choices between millions of
consumers and financial institutions, creditors and billers. The
Company services two primary business lines: bill payment and
transaction processing, and online banking and account
presentation.
ORAGENICS INC: Completes $13 Million Private Placement Financing
----------------------------------------------------------------
Oragenics, Inc., has completed its previously announced private
placement in connection with that certain Stock Purchase Agreement
dated July 30, 2012. The Company sold an aggregate of 8,666,665
shares of Company common stock to accredited investors at $1.50
per share for an aggregate purchase price of approximately $13
million. New investors constituted a majority of the
participating investors in the Private Placement and the Company's
Chairman of the Board, Dr. Frederick W. Telling, also
participated. In conjunction with the Private Placement, the
Company's outstanding secured notes payable of $2.5 million to the
Koski Family Limited Partnership were converted into shares of
Oragenics' common stock at the same price per share as paid by the
investors in the Private Placement financing which eliminates all
the long-term debt of the Company .
"We are delighted to have such strong support from our new
investors, including healthcare-focused institutional investors,
who share our vision for the potential of the lantibiotics field
and our oral care probiotics products," stated Dr. John Bonfiglio,
Chief Executive Officer. "This financing provides us with a
strong cash position going forward and allows us to advance our
novel lantibiotics program through our Exclusive Channel
Collaboration with Intrexon Corporation, as well as expand the
sales and marketing of our commercial Evora and ProBiora3
probiotic product lines. We believe that we are well-positioned
to achieve significant milestones related to both initiatives."
"The success of this financing speaks strongly about our future
prospects and will enable us to accelerate our progress towards
becoming a world leader in probiotics for oral health for humans
and pets and in novel antibiotics against infectious disease, as
well as to enhance the long-term growth of the company and value
for shareholders," added Dr. Telling, Chairman of the Board.
In addition to the Lantibiotic program, the Company plans to
continue to grow and focus on its probiotic business through
expansion internationally and domestically. It will also address
its pipeline of potential products through partnering. These
potential products include the SMaRT program in early clinical
development that could eventually eliminate dental caries and
LPT3, a novel natural weight-loss program that recently completed
a successful weight-loss clinical trial.
The common stock sold in the Private Placement transaction has not
been registered under the Securities Act of 1933, as amended, or
applicable state securities laws and was issued and sold in
reliance upon the exemption from registration contained in Section
4(2) of the Securities Act and Regulation D promulgated
thereunder. Accordingly, the securities issued in the Private
Placement may not be offered or sold in the United States except
pursuant to an effective registration statement or an applicable
exemption from the registration requirements of the Securities Act
and such applicable state securities laws.
Griffin Securities, Inc., served as the Company's exclusive
financial advisor and placement agent for the offering.
Additional details regarding the Private Placement can be found in
the Company's current report on Form 8-K filed Aug. 2, 2012, a
copy of which is available for free at http://is.gd/RRkl6U
About Oragenics Inc.
Tampa, Fla.-based Oragenics, Inc. -- http://www.oragenics.com/--
is a biopharmaceutical company focused primarily on oral health
products and novel antibiotics. Within oral health, Oragenics is
developing its pharmaceutical product candidate, SMaRT Replacement
Therapy, and also commercializing its oral probiotic product,
ProBiora3. Within antibiotics, Oragenics is developing a
pharmaceutical candidate, MU1140-S and intends to use its
patented, novel organic chemistry platform to create additional
antibiotics for therapeutic use.
In its audit report for the 2011 financial statements, Mayer
Hoffman McCann P.C., in Clearwater, Florida, expressed substantial
doubt about the Company's ability to continue as a going concern.
The independent auditors noted that the Company has incurred
recurring operating losses, negative operating cash flows and has
an accumulated deficit.
The Company reported a net loss of $7.67 million in 2011, compared
with a net loss of $7.80 million in 2010.
The Company's balance sheet at March 31, 2012, showed
$1.94 million in total assets, $2.25 million in total liabilities,
and a $314,253 total shareholders' deficit.
Bankruptcy Warning
The Company said in its annual report for the year ended Dec. 31,
2011, that its loan agreement with the Koski Family Limited
Partnership matures in three years and select material assets of
the Company relating to or connected with its ProBiora3, SMaRT
Replacement Therapy, MU1140 and LPT3-04 technologies have been
pledged as collateral to secure the Company's borrowings under the
Loan Agreement. This secured indebtedness could impede the
Company from raising the additional equity or debt capital the
Company needs to continue its operations even though the amount
borrowed under the Loan Agreement automatically converts into
equity upon a qualified equity financing of at least $5 million.
The Company's ability to repay the loan will depend largely upon
the Company's future operating performance and the Company cannot
assure that its business will generate sufficient cash flow or
that the Company will be able to raise the additional capital
necessary to repay the loan. If the Company is unable to generate
sufficient cash flow or are otherwise unable to raise the funds
necessary to repay the loan when it becomes due, the KFLP could
institute foreclosure proceedings against the Company's material
intellectual property assets and the Company could be forced into
bankruptcy or liquidation.
ORCHARD SUPPLY: Sale/Leaseback No Impact on Moody's 'B3' CFR
------------------------------------------------------------
Moody's Investors Service said Orchard Supply Hardware Stores
Corp.'s (OSH) announcement that it has entered into a sale-
leaseback transaction for six properties, generating gross
proceeds of approximately $43 million is a positive for the
company's liquidity profile, however there is no immediate impact
on OSH's B3 Corporate Family Rating or the negative outlook.
Orchard Supply Hardware Stores Corporation, headquartered in San
Jose, California, is a neighborhood hardware and garden store
focused on paint, repair and the backyard. As of April 28, 2012,
the Company had 88 stores in California.
OVERSEAS SHIPHOLDING: Moody's Cuts CFR to 'Caa1'; Outlook Neg.
--------------------------------------------------------------
Moody's Investors Service lowered its ratings of Overseas
Shipholding Group, Inc, ("OSG"); Corporate Family and Probability
of Default, each to Caa1 from B3; senior unsecured to Caa2 from
Caa1, Issuer rating to Caa2 from Caa1 and Senior Unsecured Shelf
to (P)Caa2 from (P)Caa1. Moody's affirmed the SGL-4 Speculative
Grade Liquidity rating. The outlook remains negative.
Downgrades:
Issuer: Overseas Shipholding Group, Inc.
Issuer Rating, Downgraded to Caa2 from Caa1
Probability of Default Rating, Downgraded to Caa1 from B3
Corporate Family Rating, Downgraded to Caa1 from B3
Multiple Seniority Shelf, Downgraded to (P)Caa2 from (P)Caa1
Senior Unsecured Regular Bond/Debenture, Downgraded to Caa2
from Caa1
Adjustments:
Issuer: Overseas Shipholding Group, Inc.
Senior Unsecured Regular Bond/Debenture, Adjusted to LGD4,
69% from LGD5, 70 %
Ratings Rationale
The downgrade of the ratings reflects potential liquidity pressure
as the step-down of the $1.5 billion senior unsecured revolving
credit on February 8, 2013 approaches. Moody's believes that the
company faces a cash deficit of between $200 million and $250
million through December 31, 2013 due to ongoing weak fundamentals
that prevent the generation of free cash flow. Net of cash on hand
of over $550 million at August 30, 2012, the step down of the
revolving credit to $900 million will require OSG to raise
additional funds to relieve pressure on its liquidity profile
going forward.
Moody's believes that freight rates should modestly improve from
current levels in line with the historical seasonal pattern as
winter approaches. However, the challenging outlook for trading
conditions across OSG's international crude and international
product tanker segments because of excess capacity in the world
fleet accentuates the need for it to now address the step-down of
its revolving credit facility. OSG will need to either raise
capital to allow it to comfortably comply with the existing terms
of the forward-start facility or negotiate an increase in the
committed amount of this facility and higher thresholds for
financial covenants to have the needed cushion for absorbing weak
earnings and cash flow generation, now likely into 2014.
Moody's believes that OSG is likely to seek to monetize its more
attractive, non-core assets rather than encumber or sell some of
its traditional oil tankers or product carriers since the market
values of these vessels remain in the doldrums. A re-negotiated
credit agreement would likely raise its cost of funds, but more
significantly, would require pledging of vessels as collateral.
Having a significant number of unsecured vessels to pledge and
certain investments to monetize provide OSG important financial
flexibility and supports the Caa1 rating as it addresses its
current liquidity.
The negative outlook reflects the uncertainty of OSG's ability to
timely raise the capital needed to sufficiently reduce drawings on
the revolver and comply with the terms of the forward-start
facility. The terms of the forward start credit agreement remove
the add-back for treasury stock the existing credit agreement
allows when calculating the leverage (debt-to-total
capitalization) ratio and minimum net worth covenants. Under
Moody's forecast assumptions, compliance with the leverage
covenant could be challenged as early as at year end 2012 and
possibly on the minimum net worth covenant sometime in 2013 if
spot tanker rates do not meaningfully improve. The negative
outlook also considers the execution risk in, and uncertain
timeframe for, completing the liquidity-raising initiatives the
company has under way.
The Caa1 Corporate Family rating reflects the increased credit
risk as the company's liquidity remains stressed while the freight
rate recession continues. "Moody's does not expect average annual
tanker freight rates to meaningfully strengthen above their 2011
levels before well into 2013. Values of international tankers are
also not likely to improve as deliveries from the global order
book outstrip growth in ton-miles," said Moody's Senior Credit
Officer, Jonathan Root. "Contributions of the company's Jones Act
fleet have helped to prevent a difficult situation from being even
worse and should continue to do so going forward," continued Root.
OSG remains a market leader in the majority of its trades. Its
market position and potential alternate sources of liquidity help
mitigate additional downwards rating pressure. However, estimated
ongoing operating losses and a continuing burn in cash through
2013 will continue to pressure the company's liquidity and prevent
improvements in credit metrics. The Caa1 rating also considers
that the company's 46 owned, debt-free vessels and interests in
three joint ventures provide alternative sources of liquidity.
The outlook could be changed to stable if OSG can create a
sustainable capital structure, by either refinancing the forward
start facility, raising equity or monetizing assets, or a
combination thereof. Building an adequate liquidity cushion,
comprised of a significant amount of unrestricted cash and
availability under the forward start facility could also support
an outlook change. Sustained improvements in tanker-market
fundamentals will be required in order to support an upgrade of
the ratings. Sustained improvements in credit metrics, such as
Debt to EBITDA of less than 6.5 times, Funds from Operations +
Interest to Interest of at least 3.0 times and positive free cash
flow generation that is applied to debt reduction could lead to an
upgrade; however, Moody's does not anticipate OSG achieving these
metrics levels before 2014 at the earliest. Following the
stabilization of an adequate liquidity profile, debt-funded fleet
growth that limits improvements in credit metrics could derail any
positive ratings momentum. The inability to complete liquidity
raising actions by November 30, 2012 could lead to a downgrade of
the ratings.
The principal methodology used in rating Overseas Shipholding
Group was the Global Shipping Industry Methodology published in
December 2009. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
Overseas Shipholding Group, Inc., headquartered in New York City,
NY, is one of the largest publicly traded tanker companies in the
world, engaged primarily in the ocean transportation of crude oil
and petroleum products.
PATRIOT COAL: Judge to Approve $802 Million Loan Agreement
----------------------------------------------------------
Michael Bathon, substituting for Bloomberg News bankruptcy
columnist Bill Rochelle, reports that Patriot Coal Corp.'s
bankruptcy judge said she plans to approve an amended version of
an $802 million loan agreement that will help the coal producer
fund operations while it tries to reorganize.
The report relates that U.S. Bankruptcy Judge Shelley Chapman
reviewed last-minute changes to the agreement after Marshall
Huebner, a lawyer for St. Louis-based Patriot, said Aug.03, 2012
in Manhattan that talks with lenders led to an interest-rate
reduction of 25 basis points, or 0.25 percentage point, for a
portion of the loan.
"Lower interest rates, lower fees to extend the loan, and a
partial rebate are coming to the debtor," Mr. Huebner, with the
law firm Davis Polk & Wardwell LLP, told Chapman. Barclays Plc,
Citigroup Inc. and Bank of America Corp. all agreed to cut their
fees for the loan, Huebner said. Judge Chapman said her approval
is conditional upon the lenders' completing syndication of the
loan, which Mr. Huebner said is expected within 48 hours,
according to the report.
The report relates that the loan was provisionally approved in
July by another judge filling in for Judge Chapman.
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.
PEAK RESORTS: Greek Peak Mountain Resort Owner in Chapter 11
------------------------------------------------------------
Peak Resorts, Inc., and its affiliates filed for Chapter 11
protection (Bankr. N.D.N.Y. Lead Case No. 12-31471) in Syracuse on
Aug. 1, 2012.
The Debtors filed motions to obtain credit under 11 U.S.C. Sec.
364(b), maintain its cash management system, pay prepetition
wages, and pay customers.
Peak Resorts owns 888.5 acres of real estate, including the "Greek
Peak Mountain Resort", a four season resort development located in
Virgil, New York. The 888.5-acre property is located 8 miles from
Cortland, New York and has the largest day trip area in Central
New York state. An affiliate, REDI LLC, owns 402.7 acres of
adjacent property. Another affiliate, Hope Lake Investors, LLC,
owns the Hope Lake Lodge & Cascades Indoor Water Park, a 151-room
hotel and resort facility in Virgil, Cortland County. The
Debtors have a total of 264 employees.
The winter of 2011-2012 was the worst ski season for PRI in 50
years due to a lack of snow and warm temperatures. In addition,
in January, the main lender, Tennessee Commerce Bank, was taken
over by the Federal Deposit Insurance Company in January 2012.
For the past five months, the Debtors worked to resolve their
financial situation with the FDIC. The Debtors also tapped BDO
Capital Advisors, LLC, but the firm was unable to obtain
replacement financing or raise capital for the Debtors.
The Debtors say they have filed for Chapter 11 protection to
stabilize the businesses to explore a sale of the assets pursuant
to 11 U.S.C. Sec. 363, or restructure their debts while
maintaining operations.
PEER REVIEW: Peter Messineo Raises Going Concern Doubt
------------------------------------------------------
Peter Messineo, CPA, in Palm Harbor, Fla., expressed substantial
doubt about Peer Review Mediation and Arbitration, Inc.'s ability
to continue as a going concern, following the Company's results
for the fiscal year ended Dec. 31, 2011. Mr. Messineo noted that
the Company has recurring losses from operations, a working
capital deficit, negative cash flows from operations and a
stockholders' deficit.
The Company reported a net loss of $2.80 million on $8.33 million
of revenue for 2011, compared with a net loss of $6.03 million on
$1.30 million of revenue for 2010.
The Company's balance sheet at Dec. 31, 2011, showed $1.24 million
in total assets, $5.04 million in total liabilities, and a
shareholders' deficit of $3.80 million.
A copy of the Form 10-K is available for free at:
http://is.gd/P0Jify
Deerfield Beach, Fla.-based Peer Review Mediation and Arbitration,
Inc., was incorporated in the State of Florida on April 16, 2001.
The Company provides peer review services and expertise to law
firms, medical practitioners, insurance companies, hospitals and
other organizations in regard to personal injury, professional
liability and quality review.
PENINSULA GAMING: Fitch Assigns 'B' Issuer Default Rating
---------------------------------------------------------
Fitch Ratings has assigned an Issuer Default Rating (IDR) of 'B'
to Peninsula Gaming, LLC (Peninsula) and to Peninsula Gaming,
Corp. (co-issuer of the notes). Fitch has also assigned a
'BB/RR1' rating to Peninsula's anticipated $875 million senior
secured credit facility and 'CCC/RR6' to $350 million in
anticipated senior unsecured notes. The notes will be issued by
Boyd Acquisition Sub, LLC and Boyd Acquisition Finance Corp.,
which will be merged into Peninsula and Peninsula Gaming Corp,
respectively, upon the consummation of the merger with Boyd Gaming
Corp (Boyd). The Rating Outlook is Stable.
The proceeds from the credit facility and the unsecured notes will
partially fund the $1.45 billion acquisition of Peninsula by Boyd
(rated 'B' IDR with Negative Outlook by Fitch). The balance of
the acquisition cost will be funded with a $200 million equity
contribution by Boyd and a $144 million promissory note that will
be issued to the seller. Boyd made the $200 million equity
contribution to Boyd Acquisition I, LLC on May 30, 2012. The
transaction is expected to close by year-end 2012.
The 'B' IDR reflects Peninsula's solid free cash flow (FCF)
profile, healthy liquidity profile and a desirable asset
portfolio, consisting of several locals-oriented properties that
are well insulated from competitive pressures. Peninsula's credit
profile also benefits from a degree of diversification relative to
the company's revenue size (roughly $520 million projected by
Fitch for full-year 2012).
Peninsula's flagship property, Kansas Star (about 15 miles south
of Wichita, KS) opened December 2011 and generated nearly $50
million in EBITDA in the first two full quarters of operation, or
about 46% of the company's total property EBITDA during the
period. Kansas Star is the only casino in the immediate vicinity
of the Wichita market with the nearest competitors being Oklahoma
tribal casinos located approximately 40 miles south of Kansas
Star. Per Kansas' gaming law passed in 2009, the state may only
award four gaming licenses, each designated for a distinct zone,
until 2032. Kansas Star, which is in an interim facility, will
open a permanent facility in January 2013. The permanent facility
will increase gaming space and add a 150-room hotel to the casino.
Peninsula's two Iowa casinos also operate in relatively benign
competitive environments and account for about 30% of the last two
quarters' total property EBITDA. The balance of EBITDA (about
25%) comes from Peninsula's Louisiana properties. Louisiana
properties are located within 80-100 miles of Baton Rouge, where
Pinnacle Entertainment will open L'Auberge Baton Rouge later this
month. However, the impact should be manageable given Peninsula's
emphasis on local clientele.
Credit Metrics:
Per Fitch's base case, Peninsula's restricted group leverage pro
forma for the transactions will be around 6.5x by the end of 2012.
This is high relative to Peninsula's business risk but is
commensurate with the 'B' IDR. Fitch's leverage calculation
subtracts management fees from EBITDA and does not include the
$144 million promissory note, which will be outside the restricted
group. Leverage is expected to remain elevated but improve to
below 6x by 2015. Peninsula's credit facility has a 50% excess
cash flow sweep provision and a 1% per year amortization on the
term loans, which will aid de-leveraging.
Peninsula's credit facility has leverage maintenance covenants
that start in 2013 at 7.25x and step down by about half-a-turn per
year thereafter. Fitch forecasts a comfortable covenant cushion
through the forecast horizon. Peninsula covenant calculation is
net of excess cash and adds back management fees into EBITDA.
Excess cash for the purpose of the covenant calculation cannot
exceed $50 million and allows for $20 million in cage cash. If
Peninsula's revolver is drawn, excess cash equals $0.
Fitch estimates interest coverage (calculated pursuant to
covenants) to be in the 2.5x-2.75x range relative to the 2x
covenant.
FCF:
Peninsula's discretionary FCF profile pro forma for the
transactions and full-year of Kansas Star should remain in the $57
million-$82 million range, per Fitch's base case. The
discretionary cash flow range incorporates the following
estimates:
-- $170 million-$180 million EBITDA range;
-- $80 million-$85 million in cash-based interest expense;
-- $10 million-$20 million in maintenance capex;
-- $8 million in mandatory term loan amortization.
In Fitch's more conservative stress case, discretionary FCF
remains healthy at or above $40 million. Fitch assumes that at
least 50% of the cash will be used to pay down the term loan per
the credit agreement's cash sweep provision. Up to 50% of excess
cash can be upstreamed to Boyd assuming covenant leverage remains
a half-turn below the maintenance covenant threshold.
Following the opening of the permanent facility at Kansas Star
there are no major capital projects anticipated. Peninsula does
have plans for a phase II at Kansas Star but the project's scope
is relatively modest at $44 million. Of this amount only $29
million will be funded by Peninsula (balance is third-party
related), which can easily be funded from cash flow.
Relationship to Boyd:
At this time, Fitch does not link the IDRs of Boyd and Peninsula,
which will be an unrestricted subsidiary of Boyd once the
acquisition closes. Peninsula's debt is not guaranteed by Boyd
and vice-versa and there are no cross-default provisions.
Importantly, Boyd's financial flexibility and debt covenants
constrain its capacity to support Peninsula. Should Boyd's
financial and credit quality improve materially, Fitch may start
linking the IDRs.
Boyd's ability to pull cash from Peninsula is limited by the
restricted payment covenants in the credit agreement and the bond
indenture. The credit agreement permits Peninsula to make
restricted payments equal to 50% of excess cash flow in addition
to an initial $20 million restricted payment basket. Under the
credit agreement, restricted payments per the above provision are
only permissible if the covenant leverage is a half-turn below the
maintenance covenant threshold. The bond indenture has a separate
restricted basket criteria equal to $15 million plus 50% of net
income. Under the indenture, restricted payments per the above
criteria are subject to a 2x fixed charge test but there is a $20
million general carve-out.
Boyd plans to consolidate Peninsula restricted group into its own
at some point after the acquisition closes. In an event that Boyd
does consolidate the restricted groups Fitch may withdraw the
ratings on Peninsula, depending on how Boyd merges the groups.
Security Specific Ratings:
The 'RR1' Recovery Rating on the senior secured credit facility
incorporates Fitch's recovery estimate that is in the 91%-100%
range. The credit facility will consist of an $825 million term
loan and a $50 million revolver. The revolver will have a
security priority over the term loan. The revolver is expected to
be undrawn upon the close of the transaction but Fitch's recovery
analysis assumes full draw upon the event of default. The 'RR6'
Recovery Rating on the senior unsecured notes reflects Fitch's
estimate of no recovery for the noteholders.
Fitch's recovery scenario assumes 35% stress on Peninsula's mature
properties' LTM EBITDA through June 30, 2012 and a $75 million
EBITDA for Kansas Star. Fitch further assumes stressed EBITDA
multiples of 5.5x for the Louisiana properties and 6.0x for the
Iowa properties, which are newer and operate in a more benign
competitive environment. Fitch assigns a 7.0x multiple to Kansas
Star to reflect the lack of competition in the market and the
anticipated investment into the property. Fitch estimates
administration fees at 10% of enterprise value.
Rating Triggers:
There is limited upside for Peninsula's IDR given the company's
high leverage relative to its operating profile. Also, as
Peninsula's credit profile begins to improve materially Boyd will
likely look to consolidate Peninsula into its own restricted
group. Fitch thinks this may occur prior to 2015, when Boyd's
sizable credit facility comes due. The notes become callable in
August 2014 and can be redeemed prior to that subject to make-
whole provisions.
Negative rating action could be triggered if Peninsula comes close
to its leverage maintenance covenant. This is consistent with
Fitch's stress case scenario which assumes 15% revenue impact on
the Louisiana properties from the opening of Pinnacle's Baton
Rouge casino and Kansas Star margins dropping to around 40% in
2013. The stress case further assumes prolonged low single-digit
revenue declines across all of Peninsula's assets, indicative of
mild recessionary pressures.
In Fitch's stress case Peninsula will likely remain in the 'B'
category, since the company is still expected to generate a
comfortable FCF cushion. This in turn may sway the lenders to
amend or waive the covenants.
PEREGRINE FINANCIAL: District Judge Rebecca Denied Lawsuit Case
---------------------------------------------------------------
Michael Bathon, substituting for Bloomberg News bankruptcy
columnist Bill Rochelle, reports that nine Peregrine Financial
Group Inc. clients lost a bid to have their group lawsuit heard by
the same judge who is presiding over an action filed against the
failed firm by the U.S. Commodity Futures Trading Commission.
The report relates that on Aug. 2, 2012, U.S. District Judge
Rebecca Pallmeyer in Chicago denied the request made by a lawyer
for Hong Kong-based Power Vanguard Ltd. and other customers, who
sued on July 20. Judge Pallmeyer rejected the argument from Claire
Gorman Kenny, a Power Vanguard attorney, that while her clients'
case was procedurally different from the CFTC lawsuit, they shared
a common nucleus of facts. "I'm disinclined," Judge Pallmeyer
said before denying the motion outright. Ms. Kenny's request was
opposed by the CFTC and by an attorney for another group of
Peregrine clients who filed a similar lawsuit on July 13.
According to the report, Power Vanguard and its co-plaintiffs sued
Mr. Wasendorf and other Peregrine executives for allegedly
commingling firm and client funds. Their lawsuit, third of three
now pending in federal court in Chicago, seeks class status for
24,000 similarly situated businesses and individuals.
About Peregrine Financial
Peregrine Financial Group Inc. on July 10, 2012, filed to
liquidate under Chapter 7 of the U.S. Bankruptcy Code (Bankr. N.D.
Ill. Case No. 12-27488), disclosing between $500 million and $1
billion of assets, and between $100 million and $500 million
ofliabilities.
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).
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.
PERFECTENERGY INTERNATIONAL: BDO China Raises Going Concern Doubt
-----------------------------------------------------------------
BDO China Shu Lun Pan Certified Public Accountants LLP, in
Shanghai, China, expressed substantial doubt about Perfectenergy
International Limited's ability to continue as a going concern,
following the Company's results for the eleven months ended
Sept. 30, 2011.
The independent auditors noted that the Company has suffered
recurring losses from operations and has negative working capital.
The Company reported a net loss of $7.63 million on $50.33 million
of revenues for the eleven months ended Sept. 30, 2011, compared
with a net loss of $2.73 million on $74.60 million of revenues for
the fiscal year ended Oct. 31, 2010.
The Company's balance sheet at Sept. 30, 2011, showed
$35.26 million in total assets, $32.35 million in total
liabilities, and stockholders' equity of $2.91 million.
A copy of the Form 10-K is available for free at:
http://is.gd/3TpqPL
Based in Shanghai, China, Perfectenergy International Limited was
formed as a Nevada corporation in 2005. It conducts operations
through its wholly owned subsidiary, Perfectenergy International
Limited, a private British Virgin Islands corporation
("Perfectenergy BVI"), and Perfectenergy BVI's three wholly owned
subsidiaries (i) Perfectenergy (Shanghai) Limited, a company
organized under the laws of the People's Republic of China
("Perfectenergy Shanghai"), (ii) Perfectenergy GmbH, a German
corporation ("Perfectenergy GmbH"), and (iii) Perfectenergy Solar-
Tech (Shanghai) Ltd., a company organized under the laws of the
People's Republic of China ("Perfectenergy Solar-Tech").
Perfectenergy BVI, through Perfectenergy Shanghai and
Perfectenergy Solar-Tech, is principally engaged in the research,
development, manufacturing, and sale of solar cells, solar
modules, and photovoltaic systems.
The Company conducts sales in Europe through Perfectenergy GmbH,
which was formed in Germany on Nov. 9, 2007, located at Tannenweg
8-10, 53757 Sankt Augustin, Germany. The principal function of
Perfectenergy GmbH is marketing, installation, and other after-
sales services for the Company's PV products.
PHI GROUP: Directors Convert Debts to Common Stock
--------------------------------------------------
A creditor and director of PHI Group, Inc., on July 19, 2012,
converted $250,000 of debts into 1,021,711 shares of restricted
common stock of the Company at the conversion price of $0.24469
per share.
On July 19, 2012, a creditor and director of the Company converted
$57,000 of debt into 174,713 shares of restricted common stock of
the Company at the conversion price of $0.32625 per share.
On July 31, 2012, seven creditors of the Company converted a total
of $177,333.33 of debts into 504,865 shares of unrestricted common
stock of the Company at the conversion price of $0.35125 per
share. All these debts were at least one year old at the time of
conversion.
All of the conversions were effectuated pursuant to the
resolutions of the Board of Directors of the Company dated
March 12, 2012, and June 6, 2012, by the Board of Directors of the
Company with respect to the provision for creditors of the Company
to convert any or all of their outstanding indebtedness and
accrued and unpaid interest thereof into shares of common stock of
PHI Group, Inc., by relying on the exemption from the registration
requirements of the United States Securities Act of 1933, as
amended, provided by Section 4(2) of the Act or by Rule 506 of
Regulation D promulgated thereunder.
About PHI Group
Huntington Beach, Calif.-based PHI Group, Inc., through its wholly
owned and majority-owned subsidiaries, is engaged in a number of
business activities, the scope of which includes consulting and
merger and acquisition advisory services, real estate and
hospitality development, mining, natural resources, energy, and
investing in special situations. The Company invests in various
business opportunities within its chosen scope of business,
provides financial consultancy and M&A advisory services to U.S.
and foreign companies, and acquires selective target companies
under special situations to create additional long-term value for
its shareholders.
In its auditors' report accompanying the consolidated financial
statements for the fiscal year ended June 30, 2011, Dave Banerjee
CPA, in Woodland Hills, Calif., expressed substantial doubt about
PHI Group's ability to continue as a going concern. The
independent auditors noted that the Company has accumulated
deficit of $28,177,788 and net loss amounting $1,178,297 for the
year ended June 30, 2011.
The Company reported a net loss of $1.2 million for the fiscal
year ended June 30, 2011, compared with a net loss of $3.6 million
for the fiscal year ended June 30, 2010.
The Company's balance sheet at Dec. 31, 2011, showed $2.46 million
in total assets, $10.11 million in total liabilities, all current,
and a $7.65 million total stockholders' deficit.
PROLOGIS INC: Fitch Rates $582 Million Preferred Stock 'BB'
-----------------------------------------------------------
Fitch Ratings has withdrawn the 'BBB-' rating on the JPY10 billion
3.25% private placement senior unsecured term loan due 2020 with
Prologis Japan Finance Y.K. as borrower and assigned a 'BBB-'
rating to the same term loan with Prologis Tokyo Finance
Investment Limited Partnership as the new borrower.
Fitch has also withdrawn the 'BBB-' rating on the JPY36.5 billion
senior unsecured revolving credit facility with Prologis Japan
Finance Y.K. as borrower, and Prologis, L.P. is listed as the
borrower under this facility below. The ratings for Prologis
Japan Finance Y.K. are no longer considered by Fitch to be
relevant to the agency's coverage. Fitch currently rates
Prologis, Inc. (NYSE: PLD) and its operating partnership,
Prologis, L.P. (collectively, Prologis or the company) as follows:
Prologis, Inc.
-- Issuer Default Rating (IDR) 'BBB-';
-- $582 million preferred stock 'BB'.
Prologis, L.P.
-- IDR 'BBB-';
-- $1.7 billion global senior credit facility 'BBB-';
-- $4.7 billion senior unsecured notes 'BBB-';
-- $1.3 billion senior unsecured exchangeable notes 'BBB-';
-- EUR487.5 million senior unsecured term loan 'BBB-';
-- JPY36.5 billion senior unsecured revolving credit facility
(previously listed as an obligation of Prologis Japan Finance
Y.K.) 'BBB-'.
The Rating Outlook is Positive.
As noted in a Fitch press release dated March 14, 2012, Prologis
has the right to substitute the borrower under the July 8, 2010
JPY10 billion loan agreement and pursuant to an amendment dated
June 29, 2012, Prologis Tokyo Finance Investment Limited
Partnership is now the term loan borrower. The JPY10 billion
3.25% private placement senior unsecured term loan due 2020
remains a senior unsecured obligation that is guaranteed by
Prologis, Inc. and Prologis, L.P. The terms of the loan agreement
have not been modified. In addition, the JPY36.5 billion
revolving credit facility remains a senior unsecured obligation
that is guaranteed by Prologis, Inc. and Prologis, L.P. under the
Yen revolver agreement dated June 3, 2011.
The Positive Outlook reflects that the company's credit profile is
migrating toward a 'BBB' IDR. The Positive Outlook takes into
account improving fundamentals across the company's broad
industrial real estate platform and the ongoing implementation of
a strategy to de-lever the company through property dispositions
and fund contributions. In addition to the de-levering
implications, Fitch anticipates that this strategy will result in
improving portfolio asset quality via sales of lower quality
assets in non-core markets.
PLD's credit strengths include a global franchise (including the
private capital platform), a granular tenant roster, strong access
to capital, and a large unencumbered asset base. Credit concerns
include high leverage for the rating as a result of PLD's large
land holdings (though leverage is trending toward a level
consistent with a 'BBB' IDR) and sizeable debt maturities through
2015. In addition, PLD's liquidity position will depend
materially on its ability to sell and contribute assets to funds.
Operating performance continues to improve due to favorable tenant
demand. Occupancy increased to 92.4% in the second quarter of 2012
(2Q'12) from 92.3% in 1Q'12, and rental rates declined by 3.9% in
2Q'12 compared with negative 1.1% in 1Q'12. Overall, same-
property NOI grew by 40 basis points (bps) in 2Q'12 compared with
a decline of 1.1% in 1Q'12 and Fitch forecasts this will continue
to grow by 1% to 2% over the next 12-to-24 months. Fixed charge
coverage was 2.1 times (x) in 2Q'12, up from 2.0x during the
previous two quarters, principally due to stabilizing
fundamentals. When combining the results of legacy ProLogis and
AMB Property Corporation, fixed charge coverage was 1.6x in 2010
and 1.4x in 2009. Fitch defines fixed charge coverage as
recurring operating EBITDA including Fitch's estimate of recurring
cash distributions from unconsolidated entities less recurring
capital expenditures and straight-line rent adjustments divided by
cash interest incurred and preferred dividends.
Fitch anticipates that fixed charge coverage may decline somewhat
in the near term due to earnings reductions from expected asset
sales but that coverage will sustain in the low 2x range over the
next 12 to 24 months due to flat-to-low single digit same store
results, incremental earnings from development and private capital
income, and merger synergies. The low 2x range is appropriate for
a 'BBB' IDR for an industrial REIT of PLD's size. In a stress
case not anticipated by Fitch resulting in negative same-store
NOI, fixed-charge coverage could sustain below 2x, which would be
appropriate for a 'BBB-' IDR.
One of the company's strategic initiatives since the ProLogis and
AMB Property Corporation merger in June 2011 is aligning the
portfolio with an investment strategy focused on global markets.
Consistent with that strategy, during first half of 2012, PLD
completed approximately $1.2 billion in building and land
dispositions and fund contributions in predominantly non-global
markets, of which approximately $953 million was PLD's share.
Fitch has forecasted $3.5 billion of dispositions in 2012 alone,
and therefore continued progress is a meaningful driver of the
outlook. In 2Q'12, the percentage of NOI from global markets was
83.2% compared with 82.6% in 1Q'12. Additionally, the company
continues to selectively develop in high growth potential markets,
which Fitch views favorably.
Bondholders benefit from Prologis' global franchise as it
mitigates exposure to regional demand drivers. As of Dec. 31,
2011, PLD's operating portfolio consisted of 3,082 buildings in 21
countries in the Americas, Europe and Asia. As of June 30, 2012,
the company had approximately $43.9 billion in total assets under
management including $21.4 billion in the private capital segment.
PLD's tenant roster is granular and includes more than 4,500
customers. As of June 30, 2012 top tenants were DHL at 2.6% of
annual base rents, CEVA Logistics at 1.4%, Kuehne & Nagel at 1.4%,
Amazon.com, Inc. at 1.0% and SNCF Geodis at 0.9%, and no other
tenant exceeds 1% of total rent. Lease expirations are manageable
with 2.5%, 4.1% and 16.4% of Prologis' share of annual base rents
expiring for the remainder of 2012, full year 2013 and full year
2014, respectively.
Prologis has strong access to capital and financial flexibility.
The company completed $1.2 billion of debt financings, re-
financings and pay-downs, with approximately $989 million related
to the REIT and $176 million on behalf of property funds during
the 2Q'12. Fitch calculates that unencumbered assets to unsecured
debt ranged from 2.6x to 2.9x as of June 30, 2012 when annualizing
2Q'12 unencumbered NOI and utilizing a capitalization rate from 7%
to 8%, which is appropriate for a 'BBB' IDR. When including 50%
of PLD's book value of unencumbered land and development, asset
coverage increases to a range from 2.7x to 3.1x. In addition, the
covenants in the company's senior note indentures and credit
agreements do not restrict PLD's financial flexibility.
Leverage remains high for an industrial REIT. Net debt to 2Q'12
annualized recurring operating EBITDA including Fitch's estimate
of recurring cash distributions from unconsolidated entities was
8.4x compared with 8.5x in 1Q'12. As part of the company's goal
to strengthen its financial position, Prologis is focused on
reducing leverage. Fitch anticipates that leverage will approach
7.0x over the next 12 to 24 months prior to a recapitalization of
PEPR principally due to debt repayment from asset sale and
contribution proceeds. Leverage sustaining between 7.0x and 8.0x
is appropriate for a 'BBB' IDR for an industrial REIT of PLD's
size and good asset quality. In a stress case not anticipated by
Fitch resulting in negative same-store NOI, leverage could sustain
above 8.0x, which would be appropriate for a 'BBB-' IDR.
PLD's liquidity position changes materially when layering in
proceeds from expected asset sales and fund contributions.
Sources of liquidity (unrestricted cash, availability under the
company's credit facilities, and projected retained cash flows
after dividends and distributions) divided by uses of liquidity
(PLD's share of debt maturities and projected recurring capital
expenditures) was 0.7x for July 1, 2012 to Dec. 31, 2013. Adding
the forecasted $3.5 billion of proceeds from asset sales as a
liquidity source and $1.1 billion of capital requirements from
acquisitions and development starts as a liquidity use, liquidity
coverage would be 1.5x.
Despite Prologis' solid capital raising track record, execution
risks are present in the company's deleveraging and debt repayment
strategy. An economic slowdown or the company's inability to sell
and contribute assets to funds as contemplated could place
pressure on the company's ability to address debt maturities and
its liquidity position. Debt maturities are heavily weighted in
2013-2014, with 0.6% of debt maturing in 2012, 13.3% maturing in
2013, and 24.8% in 2014.
While Prologis operates a global portfolio, Europe represented
approximately 22.8% of 2Q'12 NOI. Despite macroeconomic
uncertainties in the Eurozone, European industrial property
fundamentals are somewhat stable and PLD's European property
occupancy increased to 92.8% in 2Q'12 from 92.1% in 1Q'2. The
majority of Prologis' consolidated assets in Europe are held in
Prologis European Properties (PEPR). PEPR unit holders approved
the liquidation of the fund during its annual meeting held on June
27, 2012 and Prologis currently owns 99.5% of the ordinary units
and 98.6% of the preferred units of PEPR. Presently, the future
structure for PEPR remains unclear and the aforementioned
macroeconomic environment adds to the uncertainty. A PEPR
recapitalization would enable PLD to monetize a portion of its
investment, with the proceeds likely used to repay debt or fund
development.
The two-notch differential between PLD's IDR and preferred
stock rating is consistent with Fitch's criteria for corporate
entities with an IDR of 'BBB-'. Based on Fitch research titled
'Treatment and Notching of Hybrids in Nonfinancial Corporate
and REIT Credit Analysis', available on Fitch's web site at
'www.fitchratings.com', these preferred securities are deeply
subordinated and have loss absorption elements that would likely
result in poor recoveries in the event of a corporate default.
The following factors may result in an upgrade to 'BBB':
-- Fixed charge coverage sustaining above 2.0x (fixed charge
coverage ratio was 2.1x in 2Q'12);
-- Net debt to recurring operating EBITDA sustaining below 8.0x
(leverage was 8.4x in 2Q'12);
-- Unencumbered asset coverage sustaining above 2.0x (as of June
30, 2012, when including 50% of PLD's book value of
unencumbered land and development, unencumbered asset
coverage ranged from 2.7x to 3.1x).
The following factors may result in negative momentum on the
Outlook:
-- An inability to continue executing on the company's strategic
priorities, which entail substantial dispositions and fund
contributions to reduce leverage;
-- Fixed charge coverage sustaining below 2.0x;
-- Net debt to recurring operating EBITDA sustaining above 8.0x;
-- Unencumbered asset coverage sustaining below 2.0x.
The following factors may result in negative momentum on the
rating:
-- Fixed charge coverage ratio sustaining below 1.5x;
-- Leverage sustaining above 9.0x;
-- Liquidity coverage after dispositions, fund contributions,
acquisitions and development starts sustaining below 1.0x.
RADIAN ASSET: S&P Affirms 'B+' Counterparty Credit Finc'l. Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' long-term
counterparty credit, financial strength, and financial enhancement
ratings on Radian Asset Assurance Inc. (Radian Asset). The outlook
is negative. "Our downgrade of Radian Guaranty Inc. does not
affect our current rating on Radian Asset," S&P said.
"Although the organization of Radian Asset as a direct subsidiary
of Radian Guaranty Inc. (B-/Negative/--) was to provide regulatory
capital and liquidity support via dividends, our current rating on
Radian Asset is a stand-alone, supported by its capital adequacy
and the limited extraordinary support provided to its direct
parent, Radian Guaranty. We also recognize Radian Asset's
determination to actively reduce its risk-in-force exposure via
strategic commutations, reinsurance, and counterparty
terminations," S&P said.
"We view Radian Asset's continued focus on mitigating losses and
reducing its net par exposure; its satisfactory liquidity and
conservative investment portfolio to meet near-term claim
payments; and its portfolio running off smoothly with significant
structured finance maturities in the near term as positives to the
rating," said Standard & Poor's credit analyst Marc Cohen.
"The outlook on Radian Asset is negative. The rating on Radian
Asset is linked to the rating on Radian Guaranty, as reflected by
the liquidity support provided to the parent in the form of
continued dividend distributions that support the parent's
mortgage insurance operation. Its parent also currently has a
negative outlook," S&P said.
"If Radian Asset's capital-management strategy changes (i.e., an
extraordinary dividend or capital redeployment to Radian Guaranty
that changes our view of Radian Asset's capital position or
financial flexibility), we will reassess the company's financial
risk profile, which could lead to a downgrade," S&P said.
RADIAN GROUP: S&P Cuts Issuer Credit Rating to 'CCC-'; Outlook Neg
------------------------------------------------------------------
Standard & Poor's Rating Services lowered its insurer financial
strength ratings and long-term issuer credit ratings on Radian
Guaranty Inc., Radian Mortgage Insurance Inc., Radian Mortgage
Assurance Inc. (collectively Radian MI), and Mortgage Guaranty
Insurance Corp. and MGIC Indemnity Co. (collectively MGIC). "At
the same time, we lowered our long-term issuer credit rating on
Radian Group Inc. (Radian) to 'CCC-' from 'CCC'. We affirmed the
ratings on Radian Asset Assurance Inc. (Radian Group's bond
insurance subsidiary), Genworth Mortgage Insurance Corp. (GMICO),
Genworth Residential Mortgage Insurance Corp. of North Carolina,
and the unsolicited ratings on MGIC's parent company MGIC
Investment Corp. (MTG). The outlook on all of the companies is
negative," S&P said.
"Radian MI had approximately $924 million in statutory capital as
of the end of second-quarter 2012. Because this capital is
entirely attributable to the investment in its wholly owned
subsidiary, Radian Asset Assurance, we continue to view Radian's
capital quality as low. The holding company had $350 million in
cash and investment at the end of second-quarter 2012. However, we
expect this to decline by the end of 2013 due to the upcoming 2013
debt maturity of $92 million and potential capital contributions
to the operating subsidiaries," S&P said.
"MTG had cash and short-term investments totaling approximately
$400 million as of June 30, 2012. Under terms provided to MTG by
Freddie Mac, MTG will be required to contribute $200 million of
capital to MGIC by Sept. 30, 2012, to continue writing new
business in states where waivers have not been received. The
company repurchased debt of approximately $70 million par
outstanding of the 5.375% senior notes due in November 2015 during
the quarter, leaving approximately $100 million outstanding. Our
affirmation of the unsolicited ratings on MTG reflect our belief
that MTG will continue to have the wherewithal to meet holding
company obligations in the near term," S&P said.
"GMICO reported a loss of $25 million in second-quarter 2012, in
line with our expectations. Although the company is still at risk
for adverse reserve development, we believe that the risk for
GMICO is more muted than peers'. At approximately $30,600 in
reserves per delinquency, GMICO has the highest reserve per
delinquency in the mortgage insurance sector, and GMICO's reserves
do not incorporate reserve benefits attributable to future
rescissions. Furthermore, GMICO has minimal claim denial activity,
keeping the risk of adverse development related to overturned
claims low. The company is very focused on claims curtailment, but
maintains reserves sufficient to cover curtailed amounts," S&P
said.
"The outlooks for MGIC, Radian MI, and GMICO are negative. This
reflects the continuing risk of significant adverse reserve
development; the current trajectory of operating performance; and
the impact we expect ongoing losses to have on the companies'
capital positions. Although new NODs have decreased in the past
three months, we expect this trend to reverse in the second half
of the year, due to the lack of significant improvement in the
jobs markets and normal adverse seasonality. As a result, we
expect operating performance to deteriorate in the remainder of
the year for all of the companies," S&P said.
"As indicated in our criteria, as a general rule, companies that
face a 50-50 chance of eventual default should be rated in the
'CCC' category. 'CCC' is also appropriate--even at a lower
probability threshold--if the risk of default is near term (within
the next 12 months). At this time, we do not believe the operating
company ratings on MGIC, Radian MI, or GMICO meet these
thresholds. However, lack of more-significant improvement in the
jobs markets leading to high levels of new NODs and further
declines in cure rates may lead to further adverse development due
to higher assumptions of claims incidence. To the extent these
adjustments are significant and operating results during a rolling
12-month period show lack of significant improvement, we may lower
the ratings for MGIC and Radian MI to the 'CCC' category, as this
may be a sign of an eventual or near-term default. GMICO, because
its average reserve per delinquency is higher than its peers', may
be downgraded one notch. We may also lower the ratings for the
respective MIs if we believe state insurance regulators will
retract regulatory capital waivers to write new business, which
might be a precursor to further regulatory intervention," S&P
said.
"We may also lower the ratings if MTG or Radian downstream capital
to the extent that they have less-than-adequate resources to
service debt and related expenses for their respective 2013 and
2015 maturities," S&P said.
RCS CAPITAL: Plan Confirmation Hearing Rescheduled for Aug. 20
--------------------------------------------------------------
RSC Capital Development LLC will face objections from the Official
Committee of Unsecured Creditors and Kenneth S. Krynsky at the
confirmation hearing on the Plan of Reorganization on Aug. 20, at
2:30 p.m., unless the objections are resolved.
The unsecured creditors committee claims that the Debtor's Fourth
Amended Plan of Reorganization Plan is unconfirmable.
The Creditors Committee points out the Plan violates the absolute
priority rule, allowing existing equity to retain their ownership
interests while creditors' claims will not be fully satisfied.
The Committee says in an Aug. 1 filing that profits from the
property sales will likely be less than $1 million -- which will
be inadequate to satisfy over $8 million in unsecured claims.
The Second Amended Disclosure Statement explaining the Fourth
Amended Plan of Reorganization provides that City of North Las
Vegas, holder of a $293,000 secured claim, will receive proceeds
from the sale of property in West Ann Road, in North Las Vegas.
The remaining proceeds of the property, estimated to be worth not
less than $500,000, will be paid for the claims of other classes.
With respect to Hill Crest Bank, a secured creditor, the Debtor
would convey to Hill Crest the properties at South Valley View,
and Simmons Properties to Hill Crest. Unsecured creditors other
than ABC Learning Centres are impaired although they are expected
to be paid in full using the remaining proceeds from the Ann Road
Sale the Debtor's profit participation in the property at East
Russell Road, in Las Vegas. ABC Learning's unsecured claim is
unimpaired under the Plan. Owners of the Debtor will retain their
equity interests.
The Creditors Committee is represented by Daniel P. Collins, Esq.,
at Collins, May, Potenza, Baran & Gillespie, PC
A copy of the Second Amended Disclosure Statement is available at:
http://bankrupt.com/misc/RCS_2nd_Amended_DS.pdf
About RCS Capital
RCS Capital Development, LLC, et al., filed a Chapter 11 petition
(Bankr. D. Ariz. Case No. 11-28746) on Oct. 12, 2011. Michael W.
Carmel, Esq., at Michael W. Carmel, Ltd., in Phoenix, Ariz.,
represents the Debtor as counsel.
RCS's bankruptcy schedules reflect assets of US$57,038,210, of
which the largest is a judgment in the approximate amount of
US$57,000,000 against ABC Learning Centres Ltd., an Australia-
based operator of childcare centers. RCS's bankruptcy schedules
reflect liabilities of approximately of US$47,169,203, the most
significant of which is the disputed US$41,000,000 claim of ABC.
Judge Randolph J. Haines presides over RCS's case.
RCS had various contractual relationships with ABC that resulted
in litigation in Maricopa County. That litigation resulted in a
US$50 million jury verdict against ABC and judgment (worth
US$56,456,732 as of Nov. 15, 2011). Liquidators for ABC filed for
recognition under Chapter 15 of the Bankruptcy Code in the U.S.
Bankruptcy Court for the District of Delaware about two weeks
after RCS obtained its verdict. Judge Kevin Gross entered an
order on Nov. 16, 2010, that recognized the Chapter 15 proceeding.
ABC liquidators contended in papers filed in Delaware that RCS
violated the Chapter 15 order by continuing actions in Nevada to
seize property in which the liquidators claimed an interest. At a
hearing in U.S. Bankruptcy Court in Delaware on Oct. 4, 2011, the
liquidators asked Judge Gross to rule that RCS violated the
automatic stay. The liquidators also wanted RCS to be held in
contempt, directed to return property and assessed with punitive
damages. Judge Gross concluded the Oct. 4, 2011 hearing and said
he would rule later.
As reported by the Troubled Company Reporter on Oct. 17, 2011,
Bill Rochelle, the bankruptcy columnist for Bloomberg News, noted
that perhaps hoping to preclude Judge Gross from handing down an
unfavorable ruling, RCS filed its own Chapter 11 petition on
Oct. 12, 2011, in Phoenix.
REDPRAIRIE CORP: Moody's Says Debt Upsize Slightly Credit Neg.
--------------------------------------------------------------
Moody's Investors Service said the B2 corporate family rating of
RedPrairie Corporation's (RedPrairie) and the ratings for the
company's proposed credit facilities are unchanged following the
company's plans to upsize its first lien term loans by $20 million
to $360 million. The company is in the process of raising $400
million of new credit facilities, which include $40 million of
revolving loans, to refinance existing indebtedness and pay a one-
time dividend to its shareholders.
RedPrairie's ratings are as follows:
Issuer: RedPrairie Corporation
Corporate Family Rating -- B2
Probability of Default Rating -- B3
$40 million new senior secured revolving credit facility due
2017 -- B2, LGD3 (33)
$360 million new senior secured term loan facility due 2018 --
B2, LGD3 (33%)
The principal methodology used in rating RedPrairie was the Global
Software Industry Methodology published in May 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.
Headquartered in Alpharetta, Georgia, RedPrairie provides
inventory, transportation and workforce management products and
related services to enterprise customers globally. The company
generated $382 million in revenues in the twelve months ended
March 31, 2012.
RESIDENTIAL CAPITAL: Wins OK for Towers Watson as HR Consultant
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave Residential Capital LLC the go-ahead to employ Towers Watson
Delaware Inc. as its human resources consultant.
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: Can Hire Fortace as RMBS Consultant
--------------------------------------------------------
Residential Capital LLC obtained a court order authorizing the
company to employ Fortace LLC as consultant and possible expert
witness.
Fortace will provide these consulting services and possible expert
witness services to Morrison & Foerster LLP, for the benefit of
the Debtors:
(a) develop an expert report and opinion with respect to the
RMBS Settlement and related Plan Support Agreements
entered into on May 13, 2012 with a group of residential
mortgage-backed securities institutional investors and the
reasonableness of the corresponding settlement amount; and
(b) provide other expert related testimony, consulting or
advisory services as requested by M&F on behalf of the
Debtors.
Fortace proposes to charge the Debtors these hourly rates:
Expert Report Deposition & Court
& Consulting Testimony Hourly Rates
Personnel Category Hourly Rates (4 hour minimum)
------------------ ------------- ----------------------
Administrative Analyst $75 N/A
Document Specialist $65 N/A
Document Supervisor $95 N/A
Business Analyst $150 N/A
Subject Matter Expert $200 $275
Senior Manager $250 $325
Project Manager $325 $395
Partner $395 $475
Frank Sillman, a co-founder and managing partner of Fortace LLC,
believes that Fortace 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. Sillman filed a
supplemental affidavit disclosing additional parties-in-interest
and reiterating that his firm does not anticipate its
representation of the Debtors will require it to be adverse to
its other clients.
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: May Tap Severson as Calif. Litigation Counsel
------------------------------------------------------------------
Residential Capital LLC and its affiliates obtained the Bankruptcy
Court's authority to employ Severson & Werson PC as their Special
California Litigation Counsel, nunc pro tunc to May 14, 2012.
The Debtors want Severson & Werson to continue providing legal
services in connection with, inter alia, (a) defending claims
brought in California by individual borrowers pertaining to
consumer lending issues, (b) defending class action claims
regarding consumer lending issues, and (c) defending claims in
California bankruptcy courts with respect to consumer lending
issues brought by individual borrowers in their respective
bankruptcy cases.
Severson & Werson will coordinate with Morrison & Foerster so that
the services provided by both Severson & Werson and Morrison &
Foerster are complimentary of each other and not duplicative.
Specifically, the firm is expected to:
(a) defend claims brought in California by individual
borrowers pertaining to consumer lending issues,
including, but not limited to, allegations of wrongful
foreclosure, irregularities in the foreclosure process,
violation of applicable statutes related to pre-
foreclosure requirements, breach of alleged oral
modification, breach of promises to forebear from
foreclosing, quiet title and partition actions, unfair
business practices act claims and other mortgage lending
issues;
(b) defend class action claims regarding alleging
improprieties with loan origination and/or servicing;
(c) defend mass tort actions and qui tam actions raising
document recording issues and relating to the utilization
of Mortgage Electronic Registration Systems services;
(d) defend claims objections, contested relief from stay
motions and adversary proceedings related to consumer
lending issues brought by individual borrowers in their
respective bankruptcy cases pending in California; and
(e) provide any other services as mutually agreed upon by the
Debtors and Severson & Werson.
The hourly billing rates approved by the Debtors for Severson &
Werson professionals expected to spend significant time on these
cases range from $340 to $480 for members and special counsel,
$250 to $350 for associates, and $150 for paralegals. In
addition to the hourly billing rates set forth herein, Severson &
Werson customarily charges its clients for all reimbursable
expenses incurred.
As of the Petition Date, Severson & Werson holds a prepetition
claim for $212,052 for services rendered to the Debtors. The
Debtors believe that holding such a claim does not create an
interest materially adverse to the Debtors, their creditors, or
other parties-in-interest on the matters for which Severson &
Werson would be employed and is not disqualifying under section
327(e) of the Bankruptcy Code.
Mary Kate Sullivan, Esq., a member of Severson & Werson PC,
assures the Court that except as disclosed in her declaration,
Severson & Werson does not represent or hold any interest adverse
to the Debtors or the Debtors' estates with respect to the
matters on which Severson & Werson is to be employed in the
Debtors' Chapter 11 cases. Ms. Sullivan filed a supplemental
declaration pointing out that her firm has not represented
potential parties-in-interest in matters related to the Debtors'
bankruptcy cases.
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).
REVEL ENTERTAINMENT: Bank Debt Trades at 19% Off
------------------------------------------------
Participations in a syndicated loan under which Revel
Entertainment Group LLC is a borrower traded in the secondary
market at 81.00 cents-on-the-dollar during the week ended Friday,
Aug. 3, 2012, a drop of 0.75 percentage points from the previous
week according to data compiled by LSTA/Thomson Reuters MTM
Pricing and reported in The Wall Street Journal. The Company pays
750 basis points above LIBOR to borrow under the facility. The
bank loan matures on Feb. 15, 2017, and carries Moody's 'B3'
rating and Standard & Poor's 'B' rating. The loan is one of the
biggest gainers and losers among 174 widely quoted syndicated
loans with five or more bids in secondary trading for the week
ended Friday.
Revel Entertainment -- revelresorts.com -- owns Revel, a newly
opened beachfront resort that features more than 1,800 rooms with
sweeping ocean views. The smoke-free resort has indoor and
outdoor pools, gardens, lounges, a 32,000-square-foot spa, a
collection of 14 restaurant concepts, and a casino. Revel is
located on the Boardwalk at Connecticut Avenue in Atlantic City,
New Jersey.
RG STEEL: To Sell Wheeling, Martins Ferry Assets for $9 Million
---------------------------------------------------------------
Michael Bathon, substituting for Bloomberg News bankruptcy
columnist Bill Rochelle, reports that RG Steel LLC will sell
assets at its Wheeling, West Virginia, and Martins Ferry, Ohio,
facilities to two separate buyers for a combined $9 million.
The Bloomberg report discloses that the Debtor held an auction on
July 31 for assets of its RG Steel Wheeling LLC unit after
delaying the auctions for its Sparrows Point, Maryland, and
Warren, Ohio, assets. RG Steel will sell assets of its Wheeling
Corrugating division to Nucor Corp. for $7 million. The Martins
Ferry assets will be sold to W. Quay Mull II and Joseph N.Gompers
for $2 million. The company will seek court approval of the sales
at an Aug. 8 hearing. The steelmaker will also sell its equity in
Ohio Coatings Co. to Esmark Steel Group LLC for $1.5 million,
according to court papers.
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.
SALON MEDIA: A. Fernandez Promoted to Interim CFO
-------------------------------------------------
The Board of Directors of Salon Media Group, Inc., formally
appointed Mr. Alex Fernandez to serve as the Company's Interim-
Chief Financial Officer in place of Mr. Norman M. Blashka, who
resigned as Chief Financial Officer effective as of May 31, 2012.
Mr. Fernandez had been performing the functions of the office of
chief financial officer on an interim basis prior to the Board's
formal action.
Mr. Fernandez, age 44, has served as the Company's Corporate
Controller since Feb. 18, 2009, and will continue to do so during
his service as Interim-Chief Financial Officer. Prior to joining
the Company, Mr. Fernandez served as Corporate Controller for SBM
Site Services for two and one-half years. From 2004 through 2006,
Mr. Fernandez served as Brokerage Accounting Manager for E*Trade
Financial Corporation. Prior to this, Mr. Fernandez served as
Senior Program Manager with Oracle Corporation. From 1997 through
1999, Mr. Fernandez served as Senior Accountant with Exodus
Communications. From 1994 through 1995, Mr. Fernandez served as
Accounting Manager for Homestake Mining Company. Mr. Fernandez
began his professional career in 1991 with Deloitte & Touche as a
Staff Accountant. Mr. Fernandez's financial background includes
experience with accounting and program management and he holds a
Bachelor of Science degree in Business Administration from the
University of San Francisco.
About Salon Media
San Francisco, Calif.-based Salon Media Group (OTC BB: SLNM.OB)
-- http://www.Salon.com/-- is an online news and social
networking company and an Internet publishing pioneer.
The Company reported a net loss of $4.09 million for the
year ended March 31, 2012, a net loss of $2.58 million for fiscal
2011, and a net loss of $4.86 million for fiscal year 2010.
The Company's balance sheet at March 31, 2012, showed
$1.55 million in total assets, $14.34 million in total liabilities
and a $12.78 million total stockholders' deficit.
Burr Pilger Mayer, Inc., in San Francisco, California, 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 has suffered recurring
losses and negative cash flows from operations and has an
accumulated deficit of $112.5 million at March 31, 2012, which
raise substantial doubt about the Company's ability to continue as
a going concern.
SAN BERNARDINO, CA: S&P Cuts Rating on Series 1997A Bonds to C
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term rating to
'C' from 'CC' on San Bernardino, Calif.'s series 1997A lease
revenue bonds outstanding. "In addition, we removed the rating
from CreditWatch and assigned a negative outlook to the bonds,"
S&P said.
"We lowered our rating on the lease revenue bonds to reflect our
view of the city's filing for protection under Chapter 9 of the
U.S. Bankruptcy Code on Aug. 1, 2012," said Standard & Poor's
credit analyst Li Yang. "Based on the fiscal emergency operating
plan published by the city on July 23, 2012, we understand the
city plans to defer the payment of certain general fund
obligations, although the 1997A bonds were not specifically named,
and the city has other outstanding general fund obligations,"
added Mr. Yang.
"The negative outlook on the city's lease revenue bonds reflects
our view of the potential for the city, which, as noted above, has
filed for bankruptcy protection, to not make timely payments on
the series 1997A bonds," S&P said.
"The city's next lease payment for its 1997A lease revenue bonds
is due Aug. 15, 2012 for a Sept. 1, 2012 debt service payment. The
series 1997A bonds mature on Sept. 1, 2013. We understand that the
bonds are secured by a debt service reserve fund, cash funded at
the maximum annual debt service; we estimate that this is
currently sufficient to cover the next two debt service payments,"
S&P said.
SELECT MEDICAL: Moody's Reviews 'Ba2' Debt Rating for Downgrade
---------------------------------------------------------------
Moody's Investors Service placed the Ba2 (LGD 2, 28%) rating on
the senior secured debt of Select Medical Corporation, a wholly
owned subsidiary of Select Medical Holdings Corporation
(collectively Select Medical), under review for downgrade. The
review follows Select Medical's announcement that the company has
initiated discussions regarding an incremental extension of credit
under its senior secured credit facility. The remaining ratings of
Select Medical -- including its B1 Corporate Family and
Probability of Default ratings -- are not under review and remain
unchanged. However, LGD assessments on other debt instruments
could be adjusted once the proposed transaction closes.
The possible downgrade of the senior secured debt, which Moody's
expects would be only one notch, reflects the increase in the
senior secured claim in the capital structure and corresponding
decline in expected recovery as determined by the application of
Moody's Loss Given Default Methodology. The conclusion of the
review will be based on the ultimate amount of the incremental
extension of senior secured credit and its use.
Following is a summary of Moody's actions.
Ratings placed under review for downgrade:
Select Medical Corporation:
Senior secured revolving credit facility expiring 2016, Ba2 (LGD
2, 28%)
Senior secured term loan B due 2018, Ba2 (LGD 2, 28%)
Ratings unchanged:
Select Medical Corporation:
7.625% senior subordinated notes due 2015, B3 (LGD 5, 80%)
Select Medical Holdings Corporation:
Senior floating rate notes due 2015, B3 (LGD 6, 94%)
Corporate Family Rating, B1
Probability of Default Rating, B1
Speculative Grade Liquidity Rating, SGL-2
Ratings Rationale
Select Medical's B1 Corporate Family Rating reflects the company's
moderately-high leverage, as well as its reliance on the specialty
hospital segment for the majority of its EBITDA, which presents
risk given the concentration of revenue from Medicare. The rating
also reflects Moody's consideration of Select Medical's
considerable scale and position as one of the largest long-term
acute care hospital operators and outpatient rehabilitation
providers in the US. Ratings also reflect Moody's expectation that
the company will continue to generate strong free cash flow that
can be used to repay debt and invest in growth opportunities.
Moody's could upgrade the rating if it expects the company to
maintain leverage below 4.0 times either through additional debt
repayment or EBITDA growth. Moody's would also have to be
comfortable that the current operations could absorb potential
negative regulatory developments at the higher rating level or see
evidence that the regulatory environment was becoming more benign.
The considerable reduction in leverage over the last two years and
the improvement in the maturity profile of the company mitigates
the likelihood of a rating downgrade in the near term. Moody's
could downgrade the rating if adverse developments in Medicare
reimbursement result in significant deterioration in margins or
cash flow coverage metrics, or if the company completes a material
debt financed acquisition or shareholder initiative. More
specifically, Moody's could downgrade the rating if it expects
leverage to rise and be sustained above 5.0 times.
For further details, refer to Moody's Credit Opinion for Select
Medical Holdings Corporation on moodys.com.
The principal methodology used in rating Select Medical was the
Global Healthcare Service Providers Industry Methodology published
in December 2011. Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the U.S.,
Canada and EMEA published in June 2009.
Select Medical, headquartered in Mechanicsburg, PA, provides long-
term acute care hospital services and inpatient acute
rehabilitative care through its specialty hospital segment. The
company also provides physical, occupational, and speech
rehabilitation services through its outpatient rehabilitation
segment. Select Medical recognized approximately $2.9 billion in
revenue, before considering the provision for bad debt, in the
twelve months ended March 31, 2012.
SEVEN ARTS: Gets NASDAQ Delisting Determination
-----------------------------------------------
Seven Arts Entertainment Inc. has received notice from the NASDAQ
Listing Qualifications Staff indicating that the Staff has
determined to delist the Company's securities from NASDAQ. The
Company plans to request a hearing before the Listing
Qualifications Panel, which will stay any action arising from the
Staff's determination until the Panel renders a decision
subsequent to the hearing. For additional information, please
refer to the Current Report on Form 8-K as filed by the Company
with the Securities and Exchange Commission on Aug. 3, 2012.
Los Angeles-Calif.-based Seven Arts Entertainment, Inc., is the
successor to Seven Arts Pictures Plc, which was founded in 2002 as
an independent motion picture production and distribution company
engaged in the development, acquisition, financing, production,
and licensing of theatrical motion pictures for exhibition in
domestic (i.e., the United States and Canada) and foreign
theatrical markets, and for subsequent worldwide release in other
forms of media, including home video and pay and free television.
SINO-FOREST: Discusses Business Models in CCAA Filings
------------------------------------------------------
Sino-Forest Corporation provided a status update regarding its
efforts to collect accounts receivable owing to subsidiaries of
the Company.
In support of the Company's March 30, 2012 application under the
Companies' Creditors Arrangement Act ("CCAA"), Sino-Forest filed
an affidavit that, among other things, described the two business
models used by the Company to carry on business in the People's
Republic of China. One business model involves the use of
subsidiaries incorporated in the British Virgin Islands, and the
other involves subsidiaries incorporated in the PRC as a wholly
foreign-owned enterprise.
As disclosed in the Initial Affidavit, owing to historic
restrictions on foreign companies carrying on business in the PRC,
a substantial portion of the Company's business in the PRC has
been conducted through "authorized intermediaries" that acted as
sales agents for Sino-Forest in the PRC. Under this model,
standing timber forestry assets are acquired by Sino-Forest
through its subsidiaries incorporated in the BVI. Authorized
intermediaries receive payments due to Sino-Forest from the sale
of standing timber forestry assets owned by certain of the
Company's BVI subsidiaries and, at the Company's direction, make
payments to the Company's suppliers on account of other standing
timber forestry assets purchased by the Company's BVI
subsidiaries. Under these set-off arrangements, no cash flows
directly through the Company's BVI subsidiaries.
As disclosed in the Initial Affidavit, after foreign ownership
restrictions were relaxed, the Company established WFOE
subsidiaries that carry on the forestry business directly in the
PRC. Under the WFOE model, WFOEs directly pay suppliers for the
purchase of forestry assets and directly receive payment from
customers when forestry assets are sold.
The Initial Affidavit discussed difficulties faced by the Company
in collecting accounts receivable owing to subsidiaries of the
Company. The affidavit reported that Sino-Forest's counsel in the
PRC had sent demand letters to 17 entities and that further demand
letters were in preparation.
As at March 30, 2012, according to the Company's records, a total
of $79.6 million was owing to WFOE subsidiaries of Sino-Forest, a
total of $887.4 million was owing to BVI subsidiaries of Sino-
Forest from authorized intermediaries arising from the sale of
standing timber forestry assets and a total of $126.2 million was
owing to other BVI subsidiaries of Sino-Forest from certain PRC
and BVI domiciled corporate customers from the sale of imported
logs and wood products.
Subsequent to March 30, 2012 the Company has continued efforts
through its PRC counsel and otherwise to collect receivables owing
to its WFOE subsidiaries and to preserve receivables owing to the
Company's BVI subsidiaries held by authorized intermediaries and
other PRC and BVI domiciled corporate customers. In taking these
steps, the Company has learned that certain of the entities with
receivables owing to the Company's subsidiaries have recently
deregistered under PRC law. Deregistration has the effect of
terminating the existence of the entity.
Of the $887.4 million the Company's records show as owed to BVI
subsidiaries from authorized intermediaries, approximately $504.8
million is owed by three authorized intermediaries that the
Company has learned have been deregistered.
Of the $126.2 million the Company's records show as owed to other
BVI subsidiaries from certain PRC and BVI domiciled corporate
customers, approximately $63.8 million is owed by six PRC
corporate customers that Sino-Forest has learned have been
deregistered. One of these six companies also is one of the three
authorized intermediaries that deregistered.
The Company believes that the deregistrations were improper under
PRC law, and that remedies are available to it as a result of the
actions taken. The Company intends to take all steps necessary to
collect receivables owing to it, and to enforce its rights against
persons and entities responsible for the deregistrations. In
addition, as part of its efforts to collect receivables, the
Company is closely monitoring the registrations and status of its
counterparties.
About Sino-Forest Corp.
Sino-Forest Corporation -- http://www.sinoforest.com/-- is a
commercial forest plantation operator in China. Its principal
businesses include the ownership and management of tree
plantations, the sale of standing timber and wood logs, and the
complementary manufacturing of downstream engineered-wood
products. Sino-Forest also holds a majority interest in
Greenheart Group Limited, a Hong-Kong listed investment holding
company with assets in Suriname (South America) and New Zealand
and involved in sustainable harvesting, processing and sales of
its logs and lumber to China and other markets around the world.
Sino-Forest's common shares have been listed on the Toronto Stock
Exchange under the symbol TRE since 1995.
Sino-Forest Corporation on March 30, 2012, obtained an initial
order from the Ontario Superior Court of Justice for creditor
protection pursuant to the provisions of the Companies' Creditors
Arrangement Act.
Under the terms of the Order, FTI Consulting Canada Inc. will
serve as the Court-appointed Monitor under the CCAA process and
will assist the Company in implementing its restructuring plan.
Gowling Lafleur Henderson LLP is acting as legal counsel to the
Monitor.
During the CCAA process, Sino-Forest expects its normal day-to-
day operations to continue without interruption. The Company has
not planned any layoffs and all trade payables are expected to
remain unaffected by the CCAA proceedings.
SOLYNDRA LLC: White House Aide Warned About Loss
------------------------------------------------
Jim Snyder at Bloomberg News reports that according to a report by
the Republican-led House Energy Committee, a White House budget
official warned that a last-ditch Energy Department plan to save
Solyndra LLC from collapsing could end up costing taxpayers tens
of millions of dollars more than letting the company close.
According to the report, Kelly Colyar, an analyst at the Office of
Management and Budget, estimated the U.S. could lose about $141
million if Solyndra shut its doors in January 2011, as the
department and private investors negotiated a deal to restructure
the terms of the solar-panel maker's U.S. loan, according to the
report released Aug. 2.
The report relates the Energy Department went ahead with the
restructuring plan, which put taxpayers behind private investors
in the event of Solyndra's collapse. Ms. Colyar estimated losses
could reach $385 million under the plan. The company filed for
bankruptcy six months after the restructuring was approved.
The Bloomberg report discloses Ms. Colyar's concerns were included
in the 154-page report, the culmination of an 18-month
investigation into Solyndra's $535 million loan guarantee, the
first awarded under President Barack Obama's 2009 economic
stimulus.
"Solyndra is a prime example of the perils that come when the
federal government plays investor, tries to keep a company and
industry afloat with subsidies, and attempts to pick the winners
and losers in a particular marketplace," the report concludes,
according to Bloomberg.
The report notes Damien LaVera, an Energy Department spokesman,
said in a statement that "decisions related to this loan were made
solely on the merits after careful review by experts in our loan
program." A White House official said the report failed to find
any political influence in the Solyndra award.
The report relays senior officials at the budget office, including
then director Jack Lew, who is now the White House chief of staff,
knew about the concerns of OMB staff and decided not to intervene,
letting Energy officials determine whether to go forward with the
restructuring, according to the report.
According to the report, Ms. Colyar said recoveries under an
immediate liquidation would be "significantly HIGHER than DOE's
estimate," meaning that the government "is better off liquidating
the assets today than restructuring," according to the report,
which quoted January e-mails from Colyar. The content of the e-
mails were reported by the Washington Post.
About Solyndra LLC
Founded in 2005, Solyndra LLC was a U.S. manufacturer of solar
photovoltaic solar power systems specifically designed for large
commercial and industrial rooftops and for certain shaded
agriculture applications. The Company had 968 full time employees
and 211 temporary employees. Solyndra has sold more than 500,000
of its panels since 2008 and generated cumulative sales of over
$250 million.
Fremont, California-based Solyndra and affiliate 360 Degree Solar
Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D.
Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at
least the third solar company to seek court protection from
creditors since August 2011.
Judge Mary F. Walrath presides over the Debtors' cases. The
Debtors are represented by Pachulski Stang Ziehl & Jones LLP as
legal adviser. AlixPartners LLP serves as noticing claims and
balloting agent. Imperial Capital LLC serves as the company's
investment banker and financial adviser. The Debtors also tapped
former Massachusetts Governor William F. Weld, now with the law
firm McDermott Will & Emery, to represent the company in
government investigations and related litigation. BDO Consulting,
a division of BDO USA, LLP, as financial advisor and BDO Capital
Advisors, LLC, serves as investment banker for the creditors'
panel.
The Official Committee of Unsecured Creditors of Solyndra LLC has
tapped Blank Rome LLP as counsel and BDO Consulting as financial
advisors.
In October 2011, the Debtors hired Berkeley Research Group, LLC,
and designated R. Todd Neilson as Chief Restructuring Officer.
Solyndra is at least the fourth solar company to seek court
protection from creditors since August 2011. Other solar firms
are Evergreen Solar and start-up Spectrawatt Inc., both of which
filed in August, and Stirling Energy Systems Inc., which filed for
Chapter 7 bankruptcy late in September.
Solyndra owed secured lenders $783.8 million, including
$527.8 million to the U.S. government pursuant to a federal loan
guarantee, and held assets valued at $859 million as of the
Petition date. The U.S. Federal Financing Bank, owned by the U.S.
Treasury Department, is the Company's biggest lender.
When they filed for Chapter 11, the Debtors pursued a two-pronged
strategy to effectuate either a sale of their business to a
"turnkey" buyer who may acquire substantially all of Solyndra's
assets or, if the Debtors were unable to identify any potential
buyers, an orderly liquidation of the assets for the benefit of
their creditors.
Solyndra did not receive acceptable offers to buy the business as
a going concern. Two auctions late last year brought in a total
of $8 million. A three-day auction in February generated another
$3.8 million. An auction in June generated $1.79 million from the
sale of 7,200 lots of equipment.
SPRINT NEXTEL: Files Form 10-Q, Incurs $1.4BB Net Loss in Q2
------------------------------------------------------------
Sprint Nextel Corporation filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss of $1.37 billion on $8.84 billion of net operating
revenues for the three months ended June 30, 2012, compared with a
net loss of $847 million on $8.31 billion of net operating
revenues for the same period during the prior year.
The Company reported a net loss of $2.23 billion on $17.57 billion
of net operating revenues for the six months ended June 30, 2012,
compared with a net loss of $1.28 billion on $16.62 billion of net
operating revenues for the same period a year ago.
The Company's balance sheet at June 30, 2012, showed $49.02
billion in total assets, $39.79 billion in total liabilities and
$9.22 billion in total shareholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/g7X1wC
About Sprint Nextel
Overland Park, Kan.-based Sprint Nextel Corp. (NYSE: S)
-- http://www.sprint.com/-- is a communications company offering
a comprehensive range of wireless and wireline communications
products and services that are designed to meet the needs of
individual consumers, businesses, government subscribers and
resellers.
* * *
In February 2012, Moody's Investors Service assigned a B3 rating
to Sprint Nextel's proposed offering of Senior Unsecured Notes and
a Ba3 rating to Sprint's proposed offering of Junior Guaranteed
Unsecured Notes. The proceeds will be used for general corporate
purposes, the repayment of existing debt, network expansion and
modernization, and the potential funding of Clearwire. All of
Sprint's ratings remain on review for possible downgrade,
including those assigned and the company's B1 corporate family
rating and B1 probability of default rating.
Standard & Poor's Ratings Services assigned its 'BB-' issue-level
rating and '2' recovery rating to Sprint's proposed $1 billion of
senior guaranteed notes due 2020. These notes have subordinated
guarantees from all the subsidiaries that guarantee the existing
$2.25 billion revolving credit facility. The '2' recovery rating
indicates expectations for substantial (70% to 90%) recovery in
the event of payment default.
Fitch Ratings has assigned ratings to Sprint's $2 billion notes
offering. This includes a 'BB/RR2' rating to the junior
guaranteed unsecured notes due 2020 and a 'B+/RR4' rating to the
unsecured senior notes due 2017.
STEEL DYNAMICS: Moody's Assigns 'Ba2' Rating to Sr. Unsec. Notes
----------------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to senior
unsecured notes being offered in two tranches by Steel Dynamics,
Inc. (SDI). The company intends to use a portion of the net
proceeds of the offering to repay the outstanding balances under
the senior unsecured notes due November 2012 and tender for the
senior unsecured notes due April 2016. At the same time, Moody's
affirmed SDI's Ba1 corporate family rating and probability of
default rating and the Ba2 rating on its senior unsecured notes.
The rating outlook is stable.
Ratings Rationale
The Ba1 corporate family rating considers the company's low cost
mini-mill operating structure and its diversified product mix,
which has shifted in recent years toward higher value-added steel
and specialty alloys. The rating also acknowledges the ongoing but
slow recovery in end markets, which should benefit sales volumes
and capacity utilization rates in the steel making operations. In
addition, Moody's believes that SDI is among the lowest cost steel
producers in the U.S., on a per ton basis, which enables the
company to better manage through periods of low prices and
sluggish demand.
At the same time, the rating is constrained by a continued
weakness in non-residential construction, an end market served
primarily by SDI's steel fabrication and structural steel
operations. While Moody's acknowledges that the downward demand
trajectory in the non-residential construction sector has likely
bottomed, any recovery over the near to medium term may be
protracted. In addition, input cost pressures together with steel
price headwinds will limit the level of improvement that can be
achieved in the steel segment. Finally volatile scrap prices are
likely to pressure earnings performance in SDI's metals recycling
division despite providing some input cost relief to the company's
steel operations.
Moody's anticipates that SDI will experience flat or slightly
weaker operating performance over the next 12 to 18 months, with
revenue and profits pressured by the decline in prices of steel
and scrap products and continued challenges at its steel
fabrication operations. Drivers of these trends include industry-
wide sheet production overcapacity, oversupply of scrap due to
lower demand from steel mills in Europe and China and the
construction sector's uneven recovery. Notwithstanding the
aforementioned challenges, SDI's debt protection metrics will
likely remain appropriate for the "Ba" rating category over the
same time horizon.
The company's credit profile will continue to be supported by its
efficient, low-cost operations characterized by the company's
mini-mill business model, vertical integration into downstream
fabrication and upstream scrap and iron, flexible labor
arrangements, technological capabilities, absence of a defined
benefit pension program, and manageable environmental liabilities.
The company's profitability is further enhanced by its greater
focus on higher value-added steel and specialty alloys that are
priced at a premium versus more commodity-like hot-rolled steel
products. Furthermore, Moody's believes that SDI will maintain its
good liquidity position -- further enhanced by the extension of
its overall debt maturity profile- and have the ability to pay
down the remainder of its near-term debt with internally-generated
cash flow and higher year-over-year cash balances.
The stable outlook incorporates Moody's expectation for improving
trends in SDI's steelmaking operations and a turnaround in the
structural steel and downstream fabrication divisions, although
these are expected to remain weak in 2012 and into 2013. The
outlook recognizes the headwinds currently challenging the steel
industry, but anticipates that SDI will continue to achieve
acceptable metrics. The outlook also anticipates that the company
will continue to maintain a solid liquidity position.
The Ba2 rating on SDI's senior unsecured notes reflects the junior
position of these instruments to the company's $1.1 billion asset-
backed revolving credit facility (ABL revolver), senior secured
term loan and priority accounts payables. The senior unsecured
notes, ABL revolver and term loan are guaranteed by SDI's material
subsidiaries.
Given the continued weakness in the structural steel and
downstream fabrication divisions, a ratings upgrade is unlikely
over the near term. However, should SDI sustain debt-to-EBITDA
under 3.0 times, EBIT-to-interest coverage above 4.0 times, EBIT
margins in the mid teens, and consistently generate free cash
flow, its ratings and/or outlook could be favorably impacted.
However, upward rating movement to investment grade is constrained
by the secured nature of the ABL revolver and term loan facility.
A negative rating action is unlikely over the near term absent a
significant debt financed acquisition or material contraction in
the company's liquidity profile. However, if SDI's debt-to-EBITDA
were to exceed 4.0 times, EBIT-to-interest track below 3.0 times
on a sustainable basis, and free cash flow generation be negative,
downward pressure on the rating or outlook would result.
The principal methodology used in rating Steel Dynamics, Inc. was
the Global Steel Industry Methodology published in January 2009.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Headquartered in Fort Wayne, Indiana, Steel Dynamics, Inc. (SDI)
manufactures steel through its domestic mini-mills, which have an
estimated annual production capacity of approximately 6.4 million
tons. In addition, the company ranks among the largest scrap
processors in the United States, with shipments of approximately
5.9 million gross tons of ferrous materials and 1.1 billion pounds
of nonferrous metallic's in the last 12 months (LTM) ending March
31, 2012. Lastly, SDI operates steel fabrication facilities, which
manufacture trusses, girders, joists, and decking; and two iron-
making facilities. During the twelve months to June 30, 2012, the
company shipped approximately 5.9 million tons and generated
approximately $7.8 billion of net sales.
STEEL DYNAMICS: S&P Rates New Senior Unsecured Notes 'BB+'
----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' (same as the
corporate credit rating) issue-level rating to Steel Dynamics
Inc.'s proposed senior unsecured notes. The company plans to issue
the notes in seven- and 10-year tranches. "The recovery rating on
the notes is '3', indicating our expectation of a meaningful (50%-
70%) recovery in the event of a payment default. The notes are
being issued under rule 144A with registration rights," S&P said.
"Certain subsidiaries of Steel Dynamics will guarantee the notes
on an unsecured basis. The notes will be senior unsecured
obligations and will rank equally with all of Steel Dynamics'
existing and future unsecured and unsubordinated indebtedness. The
company intends to use the proceeds from this offering to tender
for up to $210 million of its 7.375% notes due 2012 and all of its
7.75% notes due 2016. Currently, about $420 million of the 7.375%
notes and $500 million of the 7.75% notes are outstanding. As of
June 30, 2012, the company had about $2.4 billion of adjusted debt
outstanding," S&P said.
"The 'BB+' corporate credit rating and positive rating outlook
reflects the combination of what we consider to be its
'satisfactory' business risk and 'significant' financial risk
profiles. The company's business is supported by its low-cost,
flexible operations and its product diversity. Still, the company
operates in the highly competitive, volatile, and cyclical steel
industry, which remains vulnerable to economic weakness. Moreover,
it has traditionally spent heavily on capital projects and for
potential acquisitions. The company also has a history of
shareholder-friendly initiatives, although we expect the company
to maintain a measured approach in the future," S&P said.
"We expect that full-year 2012 EBITDA should be between $650
million and $700 million, reflecting current steel market
weakness. Still, we expect this to result in debt-to-EBITDA below
3.5x and funds from operations (FFO) to total debt around 20%,
consistent with the rating. However, we expect Steel Dynamics
operating performance will improve over time as steel industry
conditions strengthen in tandem with the general economy. This
should allow the company to reduce debt-to-EBITDA below 3x and
FFO-to-total debt around 30%," S&P said.
RATING LIST
Steel Dynamics Inc.
Corporate credit rating BB+/Positive
New Rating
Steel Dynamics Inc.
Proposed senior unsecured notes BB+
Recovery rating 3
STEREOTAXIS INC: Files 2nd Amendment to Form S-1 Prospectus
-----------------------------------------------------------
Stereotaxis, Inc., filed with the U.S. Securities and Exchange
Commission a Pre-Effective Amendment No. 2 to the Form S-1
relating to the offer and sale, from time to time, of up to
2,819,345 shares of the Company's common stock, par value $0.001
per share, of Stereotaxis, Inc., which includes 650,618 shares of
the Company's common stock issuable to certain of the selling
stockholders upon the exercise of warrants to purchase the
Company's common stock, by the selling stockholders. The shares
and the warrants were issued in connection with that certain Stock
and Warrant Purchase Agreement dated as of May 7, 2012, between
Stereotaxis and Alafi Capital Company LLC, Sanderling Venture
Partners VI Co-Investment Fund, L.P., Franklin Strategic Series -
Franklin Small-Mid Cap Growth Fund, et al.
The Company's common stock is listed on the Nasdaq Global Market
under the symbol "STXS." On July 31, 2012, the last reported sale
price for the Company's common stock on the Nasdaq Global Market
was $1.85 per share.
A copy of the amended prospectus is available for free at:
http://is.gd/Knv2N1
About Stereotaxis
Based in St. Louis, Mo., Stereotaxis, Inc., designs, manufactures
and markets the Epoch Solution, which is an advanced remote
robotic navigation system for use in a hospital's interventional
surgical suite, or "interventional lab", that the Company believes
revolutionizes the treatment of arrhythmias and coronary artery
disease by enabling enhanced safety, efficiency and efficacy for
catheter-based, or interventional, procedures.
For the year ended Dec. 31, 2011, Ernst & Young LLP, in St. Louis,
Missouri, expressed substantial doubt about Stereotaxis' ability
to continue as a going concern. The independent auditors noted
that the Company has incurred recurring operating losses and has a
working capital deficiency.
The Company reported a net loss of $32.0 million for 2011,
compared with a net loss of $19.9 million for 2010.
The Company's balance sheet at March 31, 2012, showed
$36.79 million in total assets, $60.16 million in total
liabilities, and a $23.36 million total stockholders' deficit.
STEREOTAXIS INC: Amends 7.5 Million Common Shares Offering
----------------------------------------------------------
Stereotaxis, Inc., filed with the U.S. Securities and Exchange
Commission a Pre-Effective Amendment No. 2 to the Form S-1
relating to the offer and sale, from time to time, by DAFNA
LifeScience Ltd, Prescott Group Aggressive Small Cap Master Fund,
G.P., Tenor Opportunity Master Fund Ltd, et al., of up to
7,474,153 shares of the Company's common stock, which includes (i)
up to 4,070,032 shares of the Company's common stock issuable upon
conversion of or otherwise underlying the Company's subordinated
convertible debentures and (ii) up to 3,404,121 shares of the
Company's common stock issuable upon the exercise of warrants to
purchase common stock. This prospectus also covers any additional
shares of common stock that may become issuable upon anti-dilution
adjustment pursuant to the terms of these debentures warrants by
reason of stock splits, stock dividends, or similar events. The
debentures and warrants to purchase common stock were acquired by
the selling stockholders in a private placement by the Company
that closed on May 10, 2012.
The Company's common stock is listed on the Nasdaq Global Market
under the symbol "STXS." On July 31, 2012, the last reported sale
price for the Company's common stock on the Nasdaq Global Market
was $1.85 per share.
A copy of the amended prospectus is available for free at:
http://is.gd/VBXzTb
About Stereotaxis
Based in St. Louis, Mo., Stereotaxis, Inc., designs, manufactures
and markets the Epoch Solution, which is an advanced remote
robotic navigation system for use in a hospital's interventional
surgical suite, or "interventional lab", that the Company believes
revolutionizes the treatment of arrhythmias and coronary artery
disease by enabling enhanced safety, efficiency and efficacy for
catheter-based, or interventional, procedures.
For the year ended Dec. 31, 2011, Ernst & Young LLP, in St. Louis,
Missouri, expressed substantial doubt about Stereotaxis' ability
to continue as a going concern. The independent auditors noted
that the Company has incurred recurring operating losses and has a
working capital deficiency.
The Company reported a net loss of $32.0 million for 2011,
compared with a net loss of $19.9 million for 2010.
The Company's balance sheet at March 31, 2012, showed
$36.79 million in total assets, $60.16 million in total
liabilities, and a $23.36 million total stockholders' deficit.
STRATUM HOLDINGS: Reports $62,300 Net Income in 2nd Quarter
-----------------------------------------------------------
Stratum Holdings, Inc., filed its quarterly report on Form 10-Q,
reporting net income of $62,354 on $754,657 of total revenues for
the three months ended June 30, 2012, compared with net income of
$2.84 million on $828,703 of revenues for the same period last
year.
For the six months ended June 30, 2012, the Company reported a net
loss of $255,690 on $1.46 million of revenues, compared with net
income of $2.87 million on $1.59 million of total revenues for the
same period of 2011.
Income from discontinued operations, net of income taxes, was zero
for the three months ended June 30, 2012, versus net income of
$2.87 million for the three months ended June 30, 2011. The
Company sold the outstanding capital stock of its Canadian Energy
Services subsidiary, Decca, to a private company on June 3, 2011.
Income from discontinued operations, net of income taxes, was zero
for the six months ended June 30, 2012, versus net income of
$3.10 million for the six months ended June 30, 2011.
The Company's balance sheet at June 30, 2012, showed
$8.65 million in total assets, $6.29 million in total liabilities,
and stockholders' equity of $2.36 million.
As reported in the TCR on March 30, 2012, MaloneBailey LLP, in
Houston, expressed substantial doubt about Stratum Holdings'
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 losses from
continuing operations and has a working capital deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/3ik3bU
Houston, Tex.-based Stratum Holdings, Inc., is a holding company
whose operations are presently focused on the domestic Exploration
& Production business. In that business, the Company's wholly-
owned subsidiaries, CYMRI, L.L.C., and Triumph Energy, Inc., own
working interests in approximately 60 producing oil and gas wells
in Texas and Louisiana, with net production of approximately 700
MCF equivalent per day.
SUBURBAN PROPANE: S&P Downgrades CCR to 'BB-' After Acquisition
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior unsecured ratings on Suburban Propane Partners L.P. to
'BB-' from 'BB' and removed the ratings from CreditWatch, where
they were placed with negative implications on April 26, 2012. The
outlook is stable. "At the same, we assigned a 'BB-' issue rating
and '4' recovery rating to Suburban's 7.50% notes due 2018 and
7.375% notes due 2021. The '4' recovery rating indicates our
expectation for average (30% to 50%) recovery in the event a
payment default occurs," S&P said.
"The rating action on Suburban reflects our view that its
acquisition of Inergy's retail propane business will result in
higher financial leverage, which more than offsets the increased
scale the propane business brings," said Standard & Poor's credit
analyst Michael Grande. "Suburban's credit measures are
aggressive, based on the increase in debt from the exchange and an
unseasonably warm winter that significantly affected financial
results over the trailing-12-month period. We expect total debt to
EBITDA to be slightly more than 5x as of year-end 2012, compared
with 2.4x as of Sept. 30, 2011. We are revising the financial risk
profile to 'significant' from 'intermediate' under our criteria
because we anticipate credit measures will likely remain weaker
than our prior expectations. However, we expect the company's
ratios to improve in 2013. Specifically, we estimate that total
debt to EBITDA will decrease to about 3.8x in 2013, assuming
propane volumes recover to more normal levels and retail margins
remain somewhat stable," S&P said.
"The stable outlook reflects our view that the partnership will
maintain total debt to EBITDA of about 4x in 2013. We could lower
the ratings if cash flows drop below our expectations due to
increased customer conservation, mild winter weather, or reduced
margins, resulting in a debt to EBITDA ratio of 5x or higher
outside of the working capital borrowings peak. Although we don't
consider an upgrade likely at this time, we could raise the
ratings if Suburban can increase the amount of retail gallons it
sells and maintain strong margins such that financial leverage is
sustained below 3x," S&P said.
SUGARLEAF TIMER: Hearing on Plan, Stay Relief Bid Moved to Nov.
---------------------------------------------------------------
The hearing to consider confirmation of Sugarleaf Timber LLC's
Chapter 11 Plan has been continued or rescheduled to Nov. 1 and 2
at 9:30 a.m. The hearing on Farm Credit's motion for relief from
stay or for dismissal of the Debtor's Chapter 11 case has also
been moved to the same date. A hearings on the Plan and the
motion for stay relief have been moved a number of times.
The Debtor's plan that was filed in October provides for the
delivery of a portion of the Debtor's properties which are subject
to Farm Credit's liens, which delivery the Debtor asserts will
provide the "indubitable equivalent" of Farm Credit's secured
claim. Management of the reorganized Debtor will remain the same
after the bankruptcy exit. Counsel for Farm Credit has opposed
the Plan, citing that the Plan is a partial "dirt for debt" plan
seeking to force Farm Credit to receive a portion of its real
property in full satisfaction of approximately $27,400,000 in
secured claims while the Debtor retains approximately 622 acres of
real property collateral which Farm Credit is forced to release
under the Plan.
About Sugarleaf Timber
Sugarleaf Timber, LLC, in Jacksonville, Florida, is in the
business of purchasing, developing, and reselling real property in
Northeast Florida. The Company filed for Chapter 11 bankruptcy
(Bankr. M.D. Fla. Case No. 11-03352) on May 8, 2011. Chief
Bankruptcy Judge Paul M. Glenn presides over the case. Robert D.
Wilcox, Esq., at Brennan, Manna & Diamond, P.L., in Jacksonville,
Fla., serves as the Debtor's bankruptcy counsel.
In its schedules, the Debtor disclosed assets of $31,016,486 and
liabilities of $26,781,079. The petition was signed by Victoria
D. Towers, manager of Diversified Investments of Jacksonville LLC,
which serves as manager to the Debtor.
An Official Committee of Unsecured Creditors has not been
appointed. Additionally, no trustee or examiner has been
appointed.
TAYLOR, MI: Moody's Downgrades GOLT Rating to 'Ba1'
---------------------------------------------------
Moody's Investors Service has downgraded the City of Taylor's (MI)
GOLT rating to Ba1 from Baa3, affecting $33.1 million of Moody's-
rated debt. The outlook remains negative.
Summary Rating Rationale
The downgrade to the Ba1 rating reflects the city's deficit
unassigned fund balance at the close of fiscal 2011, which
worsened in fiscal 2012; the need for the city to begin supporting
component unit debt out of the General Fund in fiscal 2013; and a
tax base experiencing significant declines. The rating
additionally incorporates the expectation that the district will
remain in a deficit financial position at least until fiscal 2016.
The negative outlook is based on the possibility that the city's
financial operations will deteriorate further if the city is
unable to meet the targets of its deficit elimination plan. The
general obligation limited tax pledge of the city represents a
first budget obligation, though no dedicated levy is available to
pay debt service.
Strengths:
- Moderately-sized tax base
- State-approved deficit elimination plan that projects
elimination of deficit fund balance by 2016
Challenges:
- Significant declines in tax base in recent years with further
declines anticipated in coming year
- General Fund support needed for debt service on Brownfield
Development Authority debt beginning in fiscal 2013
- Limited financial flexibility
Outlook
The assignment of the negative outlook reflects Moody's
expectation that the city's major revenue streams will remain
pressured, limiting the city's ability to eliminate its deficit
fund position, restore positive operations, and comfortably cover
its General Fund debt obligations.
What Could Move the Rating Up (or removal of negative outlook):
- Right-sizing expenditures to match revenues resulting in
structural balance in the General Fund and elimination of the
deficit financial position.
- Stabilization of valuation levels
- Management of contingent liability risks
What Could Move the Rating Down:
- Inability to reduce expenditures to match declines in revenues
- Continued reductions in General Fund reserves
Principal Methodology Used
The principal methodology used in this rating was General
Obligation Bonds Issued by U.S. Local Governments published in
October 2009.
TRAFFIC CONTROL: Has Final OK to Obtain $12.77-Mil. DIP Financing
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
authorized, on a final basis, Traffic Control and Safety
Corporation, et al., to (i) use cash collateral in which the First
Lien Lender has an interest, (ii) obtain postpetition financing
from Fifth Street Finance Corp. ("FSFC") and other entities in the
maximum amount of $12,775,000, and (iii) provide adequate
protection to the first lien lenders and the second lien lenders.
The DIP Lenders are granted a superpriority administrative claim
pursuant to Section 364(c)(1) of the Bankruptcy Code and first
priority priming liens on and security interests in substantially
all assets and property of the Debtors. The DIP superpriority
claim will be subject and subordinate only to the payment of Case
Expenses up to the Carve Amount.
The prepetition secured lenders are granted, as of the Petition
Date, Adequate Protection superpriority claims upon all of the DIP
Collateral, and the adequate protection liens to the extent of any
diminution in value resulting from, among other things, the use,
sale or lease by the Debtors of the Prepetition Collateral, the
granting of the DIP Liens, the subordination of the Prepetition
Liens thereto and to the payment of Case Expenses up to the Carve
Amount.
The Maturity Date of the DIP Loan Agreement will be on the
earliest to occur of (i) 6 months after the Closing Date, (ii) the
effective date of the Borrowers' Reorganization Plan and (iii) or
the closing of the Sale.
All Revolving Loans will bear interest at LIBOR plus 12% p.a.
A complete text of the Final DIP Order is available for free at:
http://bankrupt.com/misc/trafficcontrol.doc126.pdf
As reported in the TCR on Aug. 1, 2012, the Bankruptcy Court
approved the sale of Traffic Control and Safety Corp. to a company
controlled by Fifth Street Finance Corp.
As reported in the Troubled Company Reporter on July 23, 2012, the
auction was canceled after no other party submitted a bid that
would rival the stalking horse offer by the Company's lenders.
Second-lien creditors have signed a deal to buy the Company in
exchange for $20 million of the junior secured debt. In addition,
they will assume the first-lien obligations of about
$18.5 million, pay expenses of the Chapter 11 case, and provide
$500,000 toward expenses not paid with financing for the
reorganization. When the sale is completed, the second-lien
lenders will waive the remainder of their claim.
About Traffic Control
Traffic Control and Safety Corporation and six subsidiaries filed
Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-11287) on
April 20, 2012. TCSC is the largest independent provider of
safety services and products in California and Hawaii. Formed by
Marwit Capital Partners II, L.P., in June 2007, TCSC has 430 full-
time employees and serves state and local agencies, public works
organizations, general contractors, the motion picture industry,
and provide services at special events.
TCSC estimated assets of up to $50 million and debts of up to
$100 million as of the Chapter 11 filing.
Judge Kevin J. Carey presides over the case. Latham & Watkins LLP
serves as the Debtors' bankruptcy counsel and Young Conaway
Stargatt & Taylor LLP as Delaware counsel. Broadway Advisors, LLC
serves as financial advisors, and Epiq Bankruptcy Solutions LLC as
the claims and notice agent.
TRANSFIRST HOLDINGS: Moody's Alters Ratings Outlook to Positive
---------------------------------------------------------------
Moody's Investors Service raised the outlook for TransFirst
Holdings, Inc.'s ratings to positive from stable and affirmed
TransFirst's B3 corporate family and probability of default
ratings as well as the B2 and Caa2 ratings for the company's
existing first and second lien credit facilities, respectively.
Moody's revised the ratings outlook to reflect the company's
strong business execution and the potential for further
improvement in the company's credit profile in the next 12 to 18
months.
Rating Rationale
The positive ratings outlook reflects Moody's expectations that
TransFirst's leverage should decline towards 4.5x (excluding a 25%
debt attribution to the preferred stock which raises leverage by
about 0.5x) in the next 12 to 18 months and the company should
produce stable free cash flow of about 12% of total debt during
this period. Moody's also expects TransFirst to maintain a good
liquidity profile and address the approaching debt maturities in a
timely manner. TransFirst revolving credit facility matures in
June 2013 and its first and second lien term loans are due in 2014
and 2015, respectively. TransFirst's debt-to-EBITDA leverage
(including the 25% debt attribution to the preferred stock)
declined to 5.3x at 2Q 2012 from 6.3x a year ago, mainly driven by
EBITDA growth of 18% in the twelve months ended June 30, 2012.
Although acquisitions partly contributed to EBITDA growth, the
majority of the increase in EBITDA was driven by strong growth in
new merchant accounts reflecting improved sales execution, lower
revenue attrition levels, and increase in processing volumes on a
same store sales basis.
The B3 corporate family rating (CFR) reflects TransFirst's high
leverage, the highly competitive market for payment processing
services to small and medium size businesses, and the company's
limited operating scale. The B3 rating is constrained by the
potential for a meaningful increase in leverage from debt-funded
acquisitions or dividends to financial sponsors which could offset
the deleveraging attained over the past 2 years. Although Moody's
accounts for 25% of the outstanding preferred stock as debt due to
some debt like features of the preferred stock, the ratings agency
believes that the impact on TransFirst's leverage from debt-
financed shareholder distributions or a redemption of the
preferred stock could far exceed the adjustment in debt leverage
that results from accounting for 25% of the preferred stock as
debt.
The B3 CFR is supported by Moody's expectations of growing cash
flows from operations resulting from good organic revenue growth
despite a slowly growing U.S. economy. The rating also benefits
from the predictability of TransFirst's transactions-based
recurring revenues derived from a highly diverse customer base
with low customer or industry concentration.
Moody's could upgrade TransFirst's ratings if the company
successfully addresses its debt maturities and maintains good
liquidity. The ratings could be upgraded if Moody's believes that
the company could sustain total debt-to-EBITDA leverage of less
than 6.0x (including 25% of preferred stock accounted as debt)
incorporating the potential for small acquisitions and debt-
financed distributions to its shareholders, the company maintains
organic EBITDA growth in the mid to high single digit rates, and
produces free cash flow in excess of 10% of total debt on a
sustainable basis.
Conversely, the rating could be downgraded or the ratings outlook
could change if liquidity deteriorates, free cash flow turns
negative or Debt-to-EBITDA leverage approaches 7.0x (including 25%
of preferred stock accounted as debt).
The following ratings were affirmed:
Issuer: TransFirst Holdings, Inc.
Corporate Family Rating -- B3
Probability of Default Rating -- B3
Senior Secured Revolving Credit Facility, due 2013 -- B2,
LGD3, 33%
Senior Secured 1st Lien Term Loan, due 2014 -- B2, LGD3, 33%
Senior Secured 2nd Lien Term Loan due 2015 -- Caa2, LGD5, 84 %
Rating Outlook -- Changed to Positive from Stable
The principal methodology used in rating TransFirst Holdings was
the Global Business & Consumer Service Industry Methodology
published in October 2010. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
New York-based TransFirst Holdings, Inc. is a merchant acquirer
and provides payment processing services to small and medium size
businesses in the U.S. TransFirst reported net revenues of
approximately $210 million in the twelve months ended June 30,
2012 and is owned by funds affiliated to Welsh, Carson, Anderson &
Stowe.
TRIBUNE CO: Bond Trustees Ask Court to Suspend Confirmation Order
-----------------------------------------------------------------
Law Debenture Trust Co. of New York and Deutsche Bank Trust Co.
have filed a motion to suspend a bankruptcy judge's order
approving Tribune Co.'s Chapter 11 plan of reorganization.
The bond trustees asked Judge Kevin Carey to put on hold
temporarily his July 23 order until a higher court hears their
appeal to review his decision that gives a group of senior
creditors control of the newspaper chain.
Law Debenture and Deutsche Bank want the Third Circuit to
determine whether the bankruptcy judge erred in confirming the
restructuring plan which, they said, unfairly discriminates
against senior noteholders.
Wilmington Trust Co. is also taking an appeal from Judge Carey's
order confirming Tribune's Chapter 11 plan. Wilmington Trust said
the plan unfairly discriminates against holders of notes issued
under the indenture.
One of the issues raised in the appeal concerns the allocation of
funds that will be distributed under the restructuring plan to
certain Tribune creditors. The trustees said the plan
undercompensates senior bondholders relative to other, similarly
situated creditors.
The bond trustees are seeking to have their case heard by the
Third Circuit. A motion for certification of the appeal has
already been filed with the appeals court.
The move to suspend the bankruptcy judge's order drew support from
Wilmington Trust.
Wilmington Trust, which serves as trustee under an indenture
governing Tribune's notes, said the structure for handling
creditor claims unfairly discriminates against holders of those
notes.
Earlier, junior creditors led by Aurelius Capital Management LP, a
New York-based investment fund, also challenged the bankruptcy
judge's decision, saying the settlement of claims which is part of
the restructuring plan is unreasonable. The group said holders
of some $2 billion in Tribune debt stand to recover very little
under the settlement, and are being barred from suing the banks
that financed the 2007 leveraged buyout of Tribune.
The Aurelius-led group also filed a motion to temporarily suspend
the court order until its appeal is resolved.
Judge Carey Issues Scheduling Order
In a related development, Judge Carey signed off a scheduling
order proposed by Tribune and other proponents of the plan.
The scheduling order sets an August 6 deadline for filing motions
to suspend the confirmation order and motions for certification of
appeal. Responses have to be filed by August 8.
Deposition of witnesses produced by a party who files a response
is set for August 10. Judge Carey will hold a hearing on Aug. 17
to consider approval of the motions.
A copy of the scheduling order is available without charge at
http://bankrupt.com/misc/Tribune_SchedOrder080112.pdf
About Tribune Co.
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
10 daily newspapers and commuter tabloids, 23 television stations,
WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8,
2008. The Debtors proposed Sidley Austin LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North America LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets
and $12,972,541,148 in total debts. Chadbourne & Parke LLP and
Landis Rath LLP serve as co-counsel to the Official Committee of
Unsecured Creditors. AlixPartners LLP is the Committee's
financial advisor. Landis Rath Moelis & Company serves as the
Committee's investment banker. Thomas G. Macauley, Esq., at
Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the
Committee in connection with the lawsuit filed against former
officers and shareholders for the 2007 LBO of Tribune.
Protracted negotiations and mediation efforts and numerous
proposed plans of reorganization filed by Tribune Co. and
competing creditor groups have delayed Tribune's emergence from
bankruptcy. Many of the disputes among creditors center on the
2007 leveraged buyout fraudulence conveyance claims, the
resolution of which is a key issue in the bankruptcy case. The
bankruptcy court has scheduled a May 16 hearing on Tribune's plan.
Judge Kevin J. Carey issued an order dated July 13, 2012,
overruling objections to the confirmation of Tribune Co. and its
debtor affiliates' Plan of Reorganization. Before it formally
emerges from bankruptcy, Tribune must still get approval from the
Federal Communications Commission on new broadcast licenses and
waivers for overlapping ownership of television stations and
newspapers in certain markets.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRIBUNE CO: Lining Up $1.1-Billion Bankruptcy-Exit Financing
------------------------------------------------------------
Peg Brickley at Dow Jones' Daily Bankruptcy Review reports Tribune
Co. is in talks aimed at lining up a new $1.1 billion senior
secured term loan, and is close to a deal with Bank of America
Corp. to provide one-third of a $300 million bankruptcy-exit loan.
Tribune and its debtor-affiliates filed with the U.S. Bankruptcy
Court for the District of Delaware seeking authority from Judge
Kevin Carey to enter into an expense letter with Bank of America
and Merrill Lynch, Pierce, Fenner & Smith in connection with exit
financing and pay certain fees and expenses and furnish certain
indemnities in relation to the financing.
The funding consists of a $300 million asset-based senior secured
credit with a letter of credit sub-facility of up to $100
million.
On July 23, 2012, the Court confirmed the Fourth Amended Joint
Plan of Reorganization for the Debtors proposed by the Debtors,
the Official Committee of Unsecured Creditors, Oaktree Capital
Management, L.P., Angelo, Gordon & Co., L.P., and JPMorgan Chase
Bank, N.A. As a result of the plan confirmation, the Debtors'
Chapter 11 cases are now near conclusion, and the Debtors are
preparing to emerge from bankruptcy protection.
The Plan contemplates that the Debtors may, in their discretion,
enter into a post-Effective Date Facility.
The Court scheduled an Aug. 7, 2012 hearing on the matter.
About Tribune Co.
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
10 daily newspapers and commuter tabloids, 23 television stations,
WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8,
2008. The Debtors proposed Sidley Austin LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North America LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets
and $12,972,541,148 in total debts. Chadbourne & Parke LLP and
Landis Rath LLP serve as co-counsel to the Official Committee of
Unsecured Creditors. AlixPartners LLP is the Committee's
financial advisor. Landis Rath Moelis & Company serves as the
Committee's investment banker. Thomas G. Macauley, Esq., at
Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the
Committee in connection with the lawsuit filed against former
officers and shareholders for the 2007 LBO of Tribune.
Protracted negotiations and mediation efforts and numerous
proposed plans of reorganization filed by Tribune Co. and
competing creditor groups have delayed Tribune's emergence from
bankruptcy. Many of the disputes among creditors center on the
2007 leveraged buyout fraudulence conveyance claims, the
resolution of which is a key issue in the bankruptcy case. The
bankruptcy court has scheduled a May 16 hearing on Tribune's plan.
Judge Kevin J. Carey issued an order dated July 13, 2012,
overruling objections to the confirmation of Tribune Co. and its
debtor affiliates' Plan of Reorganization. Before it formally
emerges from bankruptcy, Tribune must still get approval from the
Federal Communications Commission on new broadcast licenses and
waivers for overlapping ownership of television stations and
newspapers in certain markets.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRIBUNE CO: Committee Wants Document Depository Order Revised
-------------------------------------------------------------
The committee of Tribune Co.'s unsecured creditors filed a motion
seeking revision of Judge Kevin Carey's order, which authorized
the company to create a centralized document depository.
The motion, if granted, would permit the committee to turn over
documents to the litigation trustee including those in the
depository that should be kept confidential.
The turnover of documents is governed by an agreement entered
into between the committee and the litigation trustee as part of
Tribune's restructuring plan.
The depository was created following approval in December 2009 by
the bankruptcy court to allow anyone, who was involved in
negotiations to resolve "potential causes of action" related to
the 2007 transactions, to access the documents collected by the
committee.
The committee collected the documents from its investigation into
the series of transactions that returned Tribune to private
ownership in 2007.
A copy of the proposed order is available without charge
at http://bankrupt.com/misc/Tribune_PropOrdTurnOverDocs.pdf
About Tribune Co.
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
10 daily newspapers and commuter tabloids, 23 television stations,
WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8,
2008. The Debtors proposed Sidley Austin LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North America LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets
and $12,972,541,148 in total debts. Chadbourne & Parke LLP and
Landis Rath LLP serve as co-counsel to the Official Committee of
Unsecured Creditors. AlixPartners LLP is the Committee's
financial advisor. Landis Rath Moelis & Company serves as the
Committee's investment banker. Thomas G. Macauley, Esq., at
Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the
Committee in connection with the lawsuit filed against former
officers and shareholders for the 2007 LBO of Tribune.
Protracted negotiations and mediation efforts and numerous
proposed plans of reorganization filed by Tribune Co. and
competing creditor groups have delayed Tribune's emergence from
bankruptcy. Many of the disputes among creditors center on the
2007 leveraged buyout fraudulence conveyance claims, the
resolution of which is a key issue in the bankruptcy case. The
bankruptcy court has scheduled a May 16 hearing on Tribune's plan.
Judge Kevin J. Carey issued an order dated July 13, 2012,
overruling objections to the confirmation of Tribune Co. and its
debtor affiliates' Plan of Reorganization. Before it formally
emerges from bankruptcy, Tribune must still get approval from the
Federal Communications Commission on new broadcast licenses and
waivers for overlapping ownership of television stations and
newspapers in certain markets.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRIBUNE CO: Bank Debt Trades at 27.77% Off in Secondary Market
--------------------------------------------------------------
Participations in a syndicated loan under which Tribune Co. is a
borrower traded in the secondary market at 72.23 cents-on-the-
dollar during the week ended Friday, Aug. 3, 2012, an increase of
1.42 percentage points from the previous week according to data
compiled by LSTA/Thomson Reuters MTM Pricing and reported in The
Wall Street Journal. The Company pays 300 basis points above
LIBOR to borrow under the facility. The bank loan matures on May
17, 2014. The loan is one of the biggest gainers and losers among
174 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Friday.
About Tribune Co.
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8,
2008. The Debtors proposed Sidley Austin LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North America LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets
and $12,972,541,148 in total debts. Chadbourne & Parke LLP and
Landis Rath LLP serve as co-counsel to the Official Committee of
Unsecured Creditors. AlixPartners LLP is the Committee's
financial advisor. Landis Rath Moelis & Company serves as the
Committee's investment banker. Thomas G. Macauley, Esq., at
Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the
Committee in connection with the lawsuit filed against former
officers and shareholders for the 2007 LBO of Tribune.
Protracted negotiations and mediation efforts and numerous
proposed plans of reorganization filed by Tribune Co. and
competing creditor groups have delayed Tribune's emergence from
bankruptcy. Many of the disputes among creditors center on the
2007 leveraged buyout fraudulence conveyance claims, the
resolution of which is a key issue in the bankruptcy case. The
bankruptcy court has scheduled a May 16 hearing on Tribune's plan.
Judge Kevin J. Carey issued an order dated July 13, 2012,
overruling objections to the confirmation of Tribune Co. and its
debtor affiliates' Plan of Reorganization. Before it formally
emerges from bankruptcy, Tribune must still get approval from the
Federal Communications Commission on new broadcast licenses and
waivers for overlapping ownership of television stations and
newspapers in certain markets.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRUE BEGINNINGS: True.com Files for Chapter 11 in Texas
-------------------------------------------------------
Denton, Texas-based True Beginnings, LLC, doing business as
True.com, filed a bare-bones Chapter 11 petition (Bankr. S.D. Tex.
Case No. 12-42061) on Aug. 1, 2012, in Sherman, Texas. The Debtor
is required to submit its schedules, statements and other
documents by Aug. 6, 2012. The Debtor estimated under $50,000 in
assets and liabilities in excess of $50 million.
Founded by Herb Vest, True.com provides site visitors "a safer,
smarter way" to find their soul mates. "Through a unique blend of
science, technology and personalized attention, we'll guide you
through the process of finding and keeping lasting love," the Web
site says.
TRUE BEGINNINGS: True.com's Chapter 11 Case Summary
---------------------------------------------------
Debtor: True Beginnings, LLC
dba True.com
2201 Long Prairie Road
Suite 107-394
Flower Mound, TX 75022
Bankruptcy Case No.: 12-42061
Chapter 11 Petition Date: August 1, 2012
Court: United States Bankruptcy Court
Eastern District of Texas (Sherman)
About the Debtor: Founded by Herb Vest, True.com provides site
visitors "a safer, smarter way" to find their
soul mates. "Through a unique blend of science,
technology and personalized attention, we'll
guide you through the process of finding and
keeping lasting love," the Web site says.
Debtor's Counsel: Eric A. Liepins, Esq.
ERIC A. LIEPINS P.C.
12770 Coit Road
Suite 1100
Dallas, TX 75251
Tel: (972) 991-5591
E-mail: eric@ealpc.com
Estimated Assets: $0 to $50,000
Estimated Debts: $50,000,001 to $100,000,000
The petition was signed by Herb Vest, managing member.
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Herb Vest $61,514,164
5015 brookview Drive
Dallas, TX 75220
Daniel Vest Trust $6,815,175
6613 Canon Wren Drive
Austin, TX 78746
SP III 909 Lake Carolyn $5,400,000
Parkway, L.P.
Lockbox 730024
Dallas, TX 75373-0024
Matthew Vest Trust $4,826,318
11 Melbourne Place
Asheville, NC 28801
Kerensa Vest $2,330,029
2505 Turtle Creek
Apt 9G
Dallas, TX 75219
Epic Media Group, Inc. $1,639,741
60 Columbia Way, Ste 310
Markham, Ontario L3R-0C9
Mitel NetSolutions $1,023,400
PO Box 53230
Phoenix, AZ 85072-3230
Rancho Fairway $645,614
c/o Stream Realty Partners,
LP
2200 Ross Avenue #5400
Dallas, TX 75201
Mundo Media $297,017
11 Allstate Parkway
Suite 300
Markham, Ontario L3R 9T8
American Express $239,693
c/o Jaffe & asher, LLP
600 Third Avenue
New York, NY 10016-1901
Zoobuh $205,125
c/o Hill, Johnson & Schmutz,
4844 North 300 West #300
Provo, UT 84604-5663
Mitel Leasing $195,539
RevenueAds Affiliate $174,163
Network
Neverblue $160,804
Microsoft Online, Inc. $153,794
Unified Messaging $150,000
Solutions LLC
Datran Media $134,503
Atrinsic, Inc. $120,235
Net Margin, LLC $108,063
Microsoft LLC $86,708
TXU CORP: Bank Debt Trades at 30.78% Off in Secondary Market
------------------------------------------------------------
Participations in a syndicated loan under which TXU Corp., now
known as Energy Future Holdings Corp., is a borrower traded in the
secondary market at 69.22 cents-on-the-dollar during the week
ended Friday, Aug. 3, 2012, an increase of 1.37 percentage points
from the previous week according to data compiled by LSTA/Thomson
Reuters MTM Pricing and reported in The Wall Street Journal. The
Company pays 350 basis points above LIBOR to borrow under the
facility. The bank loan matures on Oct. 10, 2014, and carries
Standard & Poor's CCC rating. The loan is one of the biggest
gainers and losers among 174 widely quoted syndicated loans with
five or more bids in secondary trading for the week ended Friday.
About Energy Future
Energy Future Holdings Corp., formerly known as TXU Corp., is a
privately held diversified energy holding company with a portfolio
of competitive and regulated energy businesses in Texas. Oncor,
an 80%-owned entity within the EFH group, is the largest regulated
transmission and distribution utility in Texas.
The Company delivers electricity to roughly three million delivery
points in and around Dallas-Fort Worth. EFH Corp. was created in
October 2007 in a $45 billion leverage buyout of Texas power
company TXU in a deal led by private-equity companies Kohlberg
Kravis Roberts & Co. and TPG Inc.
The Company's balance sheet at Dec. 31, 2011, showed $44.07
billion in total assets, $51.83 billion in total liabilities, and
a $7.75 billion total deficit.
Energy Future had a net loss of $1.91 billion on $7.04 billion of
operating revenues for the year ended Dec. 31, 2011, compared with
a net loss of $2.81 billion on $8.23 billion of operating revenues
during the prior year.
* * *
In late January 2012, Moody's Investors Service changed the rating
outlook for Energy Future Holdings Corp. (EFH) and its
subsidiaries to negative from stable. Moody's affirmed EFH's Caa2
Corporate Family Rating (CFR), Caa3 Probability of Default Rating
(PDR), SGL-4 Speculative Grade Liquidity Rating and the Baa1
senior secured rating for Oncor.
EFH's Caa2 CFR and Caa3 PDR reflect a financially distressed
company with limited flexibility. EFH's capital structure is
complex and, in our opinion, untenable which calls into question
the sustainability of the business model and expected duration of
the liquidity reserves.
UNITED CONTINENTAL: Pilots Reach Deal-In-Principle on New Contract
-----------------------------------------------------------------
The pilots of United and Continental Airlines, after more than two
years of negotiating with the company for a joint collective
bargaining agreement, and with the assistance of the National
Mediation Board (NMB), have reached an agreement-in-principle
(AIP) with United Continental Holdings, Inc., on most major
economic issues. While some details of an agreement still remain
open, the pilots are confident a final AIP can be worked out in
the coming days.
"After working under a bankruptcy contract for nearly 10 years,
the substantial contributions of the pilots in helping United
Airlines survive its darkest economic days and make the
United/Continental merger possible will, at last, be respected and
rewarded," said Captain Jay Heppner, chairman of the United Master
Executive Council of the Air Line Pilots Association. "This pilot
group has endured more than its share of sacrifices since 9/11.
We have flown through the airline's bankruptcy, taking drastic pay
cuts and losing our pensions. We've witnessed the loss of
thousands of United pilot jobs through outsourcing and off-
shoring.
"This is a great win for the pilots, a great win for the American
people, a great win for those who put safety first in America, and
a great win for U.S. jobs. Once today's agreements are finalized
and approved by our membership, we look forward to getting to work
under this new agreement and doing what we do best, which is
providing United customers with a safe and comfortable traveling
experience.
"We stand at the threshold of a new day at United Airlines and we
are ready to join forces with our Continental brethren to help
build the new United into the world's preeminent airline."
"After many years of enduring the hardships of concessionary and
bankruptcy-era contracts, we are pleased to have finally reached
an agreement that will allow our pilots and their families to see
gains in compensation, work rules, job protections, and retirement
and benefits," said Captain Jay Pierce, chairman of the ALPA unit
representing Continental pilots. "Our pilots must be recognized
for the hundreds of millions of dollars in annual givebacks that
ultimately allowed our airline to remain competitive, prosper and
avoid the economic turmoil that befell others in the industry.
Further, they deserve to be recognized for their role in building
the success of the company and for the role they will play in the
success of the merger of equals with United. We are pleased to be
able to move forward with true progress towards completion of the
merger of our airlines. Once there is pilot approval of this
contract, the operations of the two airlines can finally begin to
be integrated for the ultimate benefit of our passengers, pilots
and United employees, and shareholders. We can begin to deliver
on the promise of the world's largest and best airline."
Negotiations for the JCBA have been under the supervision of the
National Mediation Board (NMB). Terms of the agreement must now
be converted into a tentative agreement (TA). Until that process
is complete, details of the TA will not be released. The TA will
be presented independently to ALPA's governing bodies for each of
the Continental and United pilot groups for consideration. If
approved, it will be sent to the pilots of both carriers for a
combined ratification vote.
The Air Line Pilots Association, International (ALPA) is the
largest airline pilot union in the world and represents more than
53,000 pilots at 37 U.S. and Canadian airlines. There are
approximately 7,000 pilots at United and 5,000 pilots at
Continental Airlines.
About United Continental
United Continental Holdings, Inc. (NYSE: UAL) --
http://www.UnitedContinentalHoldings.com/-- is the holding
company for both United Airlines and Continental Airlines.
Together with United Express, Continental Express and Continental
Connection, the airlines operate a total of 5,800 flights a day to
371 airports throughout the Americas, Europe and Asia from their
hubs in Chicago, Cleveland, Denver, Guam, Houston, Los Angeles,
New York, San Francisco, Tokyo and Washington, D.C.
United Air Lines, UAL Corp. and their affiliates filed for Chapter
11 protection (Bankr. N.D. Ill. Case No. 02-8191) on Dec. 9, 2002.
Kirkland & Ellis represented the Debtors in their restructuring
efforts. Sonnenschein Nath & Rosenthal LLP, nka SNR Denton,
represented the Official Committee of Unsecured Creditors. Judge
Eugene R. Wedoff confirmed a reorganization plan for UAL on Jan.
20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006.
United Continental carries 'B2' corporate family and probability
of default ratings, with stable outlook, from Moody's, 'B' issuer
credit ratings, with stable outlook, from Standard & Poor's, and
'B' issuer default rating from Fitch.
Fitch upgraded United Continental's IDR from 'B-' to 'B' in
September 2011, citing, "The upgrade follows a year of significant
debt reduction and strong free cash flow (FCF) generation since
the closing of the United-Continental merger on Oct. 1, 2010. In
the face of heavy fuel cost pressure during the first half of
2011, UAL has consistently reported industry-leading revenue per
available seat mile (RASM) growth while funding heavy debt
maturities out of internally generated cash flow.
UNIVERSAL FIDELITY: A.M. Best Affirms 'B' Finc'l Strength Rating
----------------------------------------------------------------
A.M. Best Co. has affirmed the financial strength rating of B
(Fair) and issuer credit rating (ICR) of "bb+" of Universal
Fidelity Life Insurance Company (UFLIC) (Oklahoma City, OK). The
outlook for both ratings is stable. Concurrently, A.M. Best has
withdrawn the ratings at the company's request to no longer
participate in A.M. Best's interactive rating process.
UFLIC markets primarily third-party administrative (TPA) services
nationally and student accident and life insurance products
chiefly in the south central United States. The company is
currently focusing on partnering with other carriers to market
life and Medicare supplement products, in addition to growing its
TPA business.
As its risk business is concentrated in student accident
insurance, UFLIC is exposed to marketing and regulatory risks.
A.M. Best believes the company will be challenged to achieve its
short-term financial projections due to a highly competitive
student accident market, which may experience lower profit margins
and possible adverse impact from health care reform.
A.M. Best notes that UFLIC has recently implemented business
improvement initiatives in order to improve selections in its
student accident business, reduce general and administrative
expenses, temper sales of its capital-intensive single premium
whole life product and emphasize growth in its Employee Retirement
Income Security Act TPA revenue.
UNIVERSITY GENERAL: Buys Texas Clinics, Sees $6MM Yearly Revenue
----------------------------------------------------------------
University General Health System, Inc., has completed the
acquisition of diagnostic imaging, physical therapy and sleep
clinics in Kingwood, Texas, a suburb of Houston, for a combination
of stock, cash, and the acquisition of debt. The agreement was
executed with Management Affiliates of Northeast Houston, LLC,
d/b/a Kingwood Diagnostic and Rehabilitation Center, which
represents an association of thirteen physicians and primary care
practitioners, including physician assistants and nurse
practitioners.
"This acquisition will contribute to the expansion of our regional
network in the north Houston metropolitan area," observed Hassan
Chahadeh, M.D., Chairman and Chief Executive Officer of University
General Health System, Inc. "The Company estimates that the
acquired clinics should generate at least $6.5 million in annual
net patient revenues, along with a projected yearly EBITDA of $2.6
million. The clinics will become hospital outpatient departments
(HOPDs) of our flagship University General Hospital, which is
located near the Texas Medical Center in Houston, Texas."
"Joining University General Health System represents a significant
milestone in our development of the clinics in Kingwood, and we
look forward to the expansion of services for our physicians and
patients that should result from this transaction," stated Randy
Butler, Chief Executive Officer of Kingwood Diagnostic Affiliates
and Rehabilitation Center. "Our decision to enter into this
agreement was based upon University General's expansion strategy
and its ability to provide the highest quality of care, which is
paramount to our patients."
About University General
University General Health System, Inc., located in Houston, Texas,
is a diversified, integrated multi-specialty health care provider
that delivers concierge physician- and patient-oriented services.
UGHS currently operateS one hospital and two ambulatory surgical
centers in the Houston area. It also owns a revenue management
company, a hospitality service provider and facility management
company, three senior living facilities and manages six senior
living facilities.
In the auditors' report accompanying the consolidated financial
statements for the year ended Dec. 31, 2011, Moss, Krusick &
Associates, LLC, in Winter Park, Florida, expressed substantial
doubt about University General's ability to continue as a going
concern. The independent auditors noted that the Company has
suffered recurring losses and negative operating cash flows, and
has negative working capital.
University General reported a net loss of $2.38 million in 2011,
following a net loss of $1.71 million in 2010.
The Company's balance sheet at March 31, 2012, showed $113.64
million in total assets, $113.75 million in total liabilities and
a $108,610 total deficit.
VALENCE TECHNOLOGY: Robbins Umeda Probes Executives
---------------------------------------------------
Shareholder rights firm Robbins Umeda LLP disclosed an
investigation into Valence Technology, Inc. that concerns
shareholders who would like more information about their rights
and potential remedies can contact attorney Gregory E. Del Gaizo
at (800) 350-6003, inquiry@robbinsumeda.com, or via the
shareholder information form on the firm's Web site.
Robbins Umeda LLP is investigating whether officers and directors
at Valence Technology issued materially false and misleading
statements to investors that were designed to deceive the market
and artificially inflate the company's stock price.
In particular, the firm is examining allegations that senior
officials at Valence Technology misled investors by providing
false statements regarding the company's capital position.
Specifically, when asked about the balance sheet during the
company's appearance at Jefferies Global Clean Technology
Conference on Feb, 23, 2012, Mr. Robert Kanode, Valence President
and Chief Executive Officer, stated that "[m]oving forward our
cash needs will not be significant. " In contrast, on March 31,
2012, the company submitted its annual report on Form 10-K with
the U.S. Securities and Exchange Commission for fiscal year ended
March 31, 2012, identifying its risk factors, including the
company's ongoing losses, lack of liquidity and debt obligations.
The Form 10-K notes that it has experienced significant operating
losses in the current and prior fiscal years, that its limited
financial resources could materially affect its business, and that
if further financing is not obtained, the company may be forced to
cease operations and liquidate assets.
On July 12, 2012, Valence Technology declared bankruptcy.
Following the emergence of this fact, shares of Valence Technology
lost approximately 92% of their value. After closing at $0.65 per
share on July 13, 2012, shares of Valence Technology common stock
closed on July 16, 2012 at just $0.05 per share.
Robbins Umeda LLP highlights that one option available to Valence
Technology shareholders is filing a class action lawsuit on behalf
of investors to recover damages incurred as a result of the
wrongdoing.
Robbins Umeda LLP -- http://www.robbinsumeda.com/-- is a
nationally recognized leader in securities litigation and
shareholder rights law. The reholder derivative and securities
class action lawsuits, and has helped its clients realize more
than $1 billion of value for themselves and the companies in which
they have invested.
About Valence Technology
Valence Technology, Inc., filed a Chapter 11 petition (Bankr. W.D.
Tex. Case No. 12-11580) on July 12, 2012, in its home-town in
Austin. Founded in 1989, Valence develops lithium iron magnesium
phosphate rechargeable batteries. Its products are used in hybrid
and electric vehicles, as well as hybrid boats and Segway personal
transporters.
The Debtor disclosed debt of $82.6 million and assets of $31.5
million as of March 31, 2012. It owes $35 million in loans to
affiliates of Chairman Carl E. Berg, about $34 million in interest
on those loans, and $3 million on a third-party loan. The company
also owes about $9 million on two series of convertible preferred
stock held by Berg affiliates and has $11 million in trade debt
and accrued expenses. Mr. Berg and related entities own 44.4% of
the shares. ClearBridge Advisors, LLC owns 5.5%.
Valence expects to complete its restructuring during 2012.
Judge Craig A. Gargotta presides over the case. The Company is
being advised by Streusand, Landon & Ozburn, LLP with respect to
bankruptcy matters. The petition was signed by Robert Kanode,
CEO.
VALENCE TECHNOLOGY: JCF Head F. Fisher Named Independent Director
-----------------------------------------------------------------
The Board of Directors of Valence Technology, Inc., voted to
appoint Joseph Fisher, III, to the Board. Mr. Fisher does not
have any understandings or relationships with third parties
pursuant to which he was appointed to the Board. The Board has
determined that Mr. Fisher meets the definition of an independent
director under applicable rules.
From 2008 to 2012, Mr. Fisher served as CEO and President of
Contour Energy Systems, Inc., a privately held advanced battery
company based in Azusa, CA. From 2007 to present, Mr. Fisher
served as owner and president of JCF International, LLC, an
international consulting firm focused on the battery market.
Prior to that, Mr. Fisher was a Vice President for Energizer
Holdings, Inc., in the areas of Business Development and Global
Rechargeables. Additionally, Mr. Fisher was employed by Union
Carbine Corporation in their strategic planning group. Mr. Fisher
earned a Bachelor of Science degree from the University of
Cincinnati, a Masters of Business Administration from West
Virginia College of Graduate Studies - Marshall University, and
completed an Executive Financial Management Program at the
University of Pennsylvania's Wharton School of Finance.
Upon his appointment to the Board, Mr. Fisher was granted an
option, pursuant to the Company's 2009 Equity Incentive Plan, to
purchase 100,000 shares of the Company's common stock with an
exercise price of $0.02 per share, the closing price of the
Company's common stock on the OTC Bulletin Board on July 31, 2012,
the date of the grant. The option will vest in equal quarterly
installments over four years, subject to his continued service on
the Board. Additionally, Mr. Fisher, as a non-employee director,
is eligible to receive $2,000 for each regularly scheduled
quarterly meeting of the Board and reimbursement for his expenses
incurred in connection with attendance at Board meetings.
About Valence Technology
Valence Technology, Inc., filed a Chapter 11 petition (Bankr. W.D.
Tex. Case No. 12-11580) on July 12, 2012, in its home-town in
Austin. Founded in 1989, Valence develops lithium iron magnesium
phosphate rechargeable batteries. Its products are used in hybrid
and electric vehicles, as well as hybrid boats and Segway personal
transporters.
The Debtor disclosed debt of $82.6 million and assets of $31.5
million as of March 31, 2012. It owes $35 million in loans to
affiliates of Chairman Carl E. Berg, about $34 million in interest
on those loans, and $3 million on a third-party loan. The company
also owes about $9 million on two series of convertible preferred
stock held by Berg affiliates and has $11 million in trade debt
and accrued expenses. Mr. Berg and related entities own 44.4% of
the shares. ClearBridge Advisors, LLC owns 5.5%.
Valence expects to complete its restructuring during 2012.
Judge Craig A. Gargotta presides over the case. The Company is
being advised by Streusand, Landon & Ozburn, LLP with respect to
bankruptcy matters. The petition was signed by Robert Kanode,
CEO.
VIASPACE INC: Signs Term Sheet to Separate VGE
----------------------------------------------
The VIASPACE Board of Directors and Management said that formal
term sheets outlining the mechanism and orderly separation of
VIASPACE Inc. and VIASPACE Green Energy Inc. have been signed by
VIASPACE and Mr. Sung Chang. In addition, term sheets have also
been signed which give VGE the right to commercially develop Giant
King Grass in China and Taiwan and give VIASPACE the right to
commercially develop Giant King Grass in the rest of the world
outside China and Taiwan. Under the terms, VIASPACE will no
longer have any ownership in VGE and the VIASPACE debt to Chang
will be satisfied. The term sheets will now be drafted into legal
documents.
As part of the separation, Dr. Carl Kukkonen will remain as CEO of
VIASPACE and as a member of the VIASPACE Board of Directors and
will resign as CEO of VGE and as a member of the VGE Board of
Directors. Mr. Stephen Muzi will continue as Chief Financial
Officer for both companies. Dr. Kevin Schewe will become the
Chairman of the Board of VIASPACE.
The details of the term sheet agreements will be announced and
made public when the final legal documents have been signed and
filed with the Securities and Exchange Commission. VIASPACE CEO
Dr. Carl Kukkonen stated, "I have worked side by side with Mr.
Chang since 2008, and appreciate that we were able to negotiate
term sheets that give both VIASPACE and VIASPACE Green Energy a
satisfactory way forward for their respective shareholders."
VIASPACE Board Member Dr. Kevin Schewe commented, "We have much
work to do in making Giant King Grass the world's recognized
leading, renewable bioenergy platform and we intend to make this
our mission every working day. We plan to keep our shareholders
informed every step of the way and have the goal of building
future value for all VSPC shareholders."
About VIASPACE Inc.
Irvine, Calif.-based VIASPACE Inc. (OTC Bulletin Board: VSPC -
News) -- http://www.VIASPACE.com/-- is a clean energy company
providing products and technology for renewable and alternative
energy that reduce or eliminate dependence on fossil and high-
pollutant energy sources. Through its majority-owned subsidiary
VIASPACE Green Energy Inc., the Company grows Giant King Grass as
a low carbon fuel for electricity generating power plants and as a
feedstock for cellulosic biofuels.
Viaspace reported a net loss of $668,000 on $588,000 of total
revenues for the three months ended March 31, 2012. The Company
reported a net loss of $9.36 million in 2011, compared with a net
loss of $2.96 million in 2010.
The Company's balance sheet at March 31, 2012, showed
$9.82 million in total assets, $7.32 million in total liabilities
and $2.50 million in total equity.
Going Concern
The Company has incurred significant losses from operations,
resulting in an accumulated deficit of $43,650,000. The Company
expects such losses to continue. In addition, the Company has
limited working capital and based on current cash flows does not
have sufficient funds to pay the May 14, 2012, installment due on
the note to Changs LLC. These raises substantial doubt about the
Company's ability to continue as a going concern.
After auditing the financial results for the year ended Dec. 31,
2011, Hein & Associates LLP, in Irvine, Calif., expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that he Company has
incurred significant losses from operations, resulting in an
accumulated deficit of $43.05 million. The Company expects those
losses to continue. In addition, the Company has limited working
capital and based on current cash flows does not have sufficient
funds to pay the May 2012 instalment due on the note to Changs
LLC.
WAUKEGAN SAVINGS BANK: Closed; First Midwest Bank Assumes Deposits
------------------------------------------------------------------
Waukegan Savings Bank of Waukegan, Ill., was closed Friday, Aug.
3, by the Illinois Department of Financial and Professional
Regulation, which appointed the Federal Deposit Insurance
Corporation as receiver. To protect the depositors, the FDIC
entered into a purchase and assumption agreement with First
Midwest Bank of Itasca, Ill., to assume all of the deposits of
Waukegan Savings Bank.
The two branches of Waukegan Savings Bank will reopen during
normal business hours as branches of First Midwest Bank.
Depositors of Waukegan Savings Bank will automatically become
depositors of First Midwest Bank. Deposits will continue to be
insured by the FDIC, so there is no need for customers to change
their banking relationship in order to retain their deposit
insurance coverage up to applicable limits. Customers of Waukegan
Savings Bank should continue to use their existing branch until
they receive notice from First Midwest Bank that it has completed
systems changes to allow other First Midwest Bank branches to
process their accounts as well.
As of March 31, 2012, Waukegan Savings Bank had about $88.9
million in total assets and $77.5 million in total deposits. In
addition to assuming all of the deposits of the failed bank, First
Midwest Bank agreed to purchase essentially all of the failed
bank's assets.
Customers with questions about the transaction should call the
FDIC toll-free at 1-800-823-3215. Interested parties also can
visit the FDIC's Web site at
http://www.fdic.gov/bank/individual/failed/waukegan.html
The FDIC estimates that the cost to the Deposit Insurance Fund
will be $19.8 million. Compared to other alternatives, First
Midwest Bank's acquisition was the least costly resolution for the
FDIC's DIF. Waukegan Savings Bank is the 40th FDIC-insured
institution to fail in the nation this year, and the sixth in
Illinois. The last FDIC-insured institution closed in the state
was Second Federal Savings and Loan Association of Chicago,
Chicago, on July 20, 2012.
WESTMORELAND COAL: Incurs $13.6 Million Net Loss in Second Qtr.
---------------------------------------------------------------
Westmoreland Coal Company reported a net loss of $13.64 million on
$132.84 million of revenue for the three months ended June 30,
2012, compared with a net loss of $7.91 million on $112.14 million
of revenue for the same period a year ago.
The Company reported a net loss of $13.86 million on $280.07
million of revenue for the six months ended June 30, 2012,
compared with a net loss of $26.64 million on $239.90 million of
revenue for the same period during the prior year.
"We consider this to be a very solid quarter when considering the
fact that the current year quarter included major scheduled
outages at both our Beulah Mine's primary customer and at our ROVA
facility. The difference in Adjusted EBITDA for these two
facilities was $6.9 million less in the second quarter of 2012
than in 2011 when these facilities were fully operational," said
Keith E. Alessi, Westmoreland's Chief Executive Officer. "As we
have previously stated, the timing of maintenance outages can
significantly impact comparability of quarters and we had expected
that our second quarter would be our weakest quarter of the year.
In the face of weak demand and a highly competitive market, we
remain pleased with the performance of our business, including the
performance from our recently acquired Kemmerer Mine."
A copy of the press release is available for free at:
http://is.gd/cnxi0m
About Westmoreland Coal
Colorado Springs, Colo.-based Westmoreland Coal Company (NYSE
AMEX: WLB) -- http://www.westmoreland.com/-- is the oldest
independent coal company in the United States. The Company's coal
operations include coal mining in the Powder River Basin in
Montana and lignite mining operations in Montana, North Dakota and
Texas. Its power operations include ownership of the two-unit
ROVA coal-fired power plant in North Carolina.
The Company reported a net loss of $36.87 million in 2011, a net
loss of $3.17 million in 2010, and a net loss of $29.16 million
in 2009.
The Company's balance sheet at March 31, 2012, showed $955 million
in total assets, $1.20 billion in total liabilities and a $249.08
million total deficit.
* * *
In March 2011, Standard & Poor's Ratings Services said that it
assigned a 'CCC+' corporate credit rating to Colorado Springs,
Colorado-based Westmoreland Coal Co. In January 2012, S&P revised
its outlook on Westmoreland to positive from stable and affirmed
its 'CCC+' credit rating.
"The outlook revision reflects our expectation that the
acquisition, improved reserve position, and stronger coal pricing
could bring WLB's credit metrics in line with a higher rating over
the next several quarters," said Standard & Poor's credit analyst
Gayle Bowerman.
The rating and outlook for WLB also incorporate the combination of
what S&P considers to be its 'vulnerable' business risk profile
and 'highly leveraged' financial risk profile. The ratings also
reflect WLB's high-cost position in the Powder River Basin (PRB)
and Texas, relatively short reserve life, high customer
concentration, challenges posed by the inherent risks of coal
mining, and liquidity that's less than adequate to meet the
company's near-term obligations.
WPCS INTERNATIONAL: Ex Jones Intercable CFO Named to Board
----------------------------------------------------------
WPCS International Incorporated appointed of Kevin P. Coyle as a
director effective Aug. 1, 2012.
Mr. Coyle has over thirty years of experience in finance,
operations, strategic planning and mergers & acquisitions. He
spent over eighteen years at the multi-billion dollar publicly
held Jones Intercable Inc. where he held the title of Chief
Financial Officer prior to the sale of the business to Comcast.
Mr. Coyle was also a Senior Vice President for Comcast focused on
business development. Currently, Mr. Coyle manages a consulting
firm that works with private equity groups.
Mr. Coyle received his B.S. in Finance at Villanova University and
his MBA at Drexel University. He resides in Wayne, Pennsylvania.
Andrew Hidalgo, Chairman and CEO of WPCS International
Incorporated commented, "We are very pleased to have Kevin join
our board of directors. With his years of experience in SEC
financial reporting, Kevin gives us increased depth. In addition,
Kevin has deep experience in mergers & acquisitions and strategic
planning that will help our company going forward. I look forward
to his involvement as we continue to focus on building shareholder
value."
Effective Aug. 1, 2012, Michael Doyle resigned for personal
reasons, effective immediately, as a director of WPCS
International Incorporated. In submitting his resignation, Mr.
Doyle did not express any disagreement with the Company on any
matter relating to the Company's operations, policies or
practices.
About WPCS International
Exton, Pennsylvania-based WPCS International Incorporated provides
design-build engineering services that focus on the implementation
requirements of communications infrastructure. The Company
provides its engineering capabilities including wireless
communication, specialty construction and electrical power to the
public services, healthcare, energy and corporate enterprise
markets worldwide.
As reported by the TCR on Dec. 8, 2011, WPCS International and its
United Stated based subsidiaries, previously entered into a loan
agreement, dated April 10, 2007, as extended, modified and amended
several times, with Bank of America, N.A. The Company is seeking
alternative debt financing and has conducted discussions with
other senior lenders to replace the Loan Agreement. The Company
may not be successful in obtaining alternative debt financing or
additional financing sources may not be available on acceptable
terms. If the Company is required to repay the Loan Agreement,
the Company has sufficient working capital to repay the
outstanding borrowings.
J.H. COHN LLP, in Eatontown, New Jersey, issued a "going concern"
qualification on the consolidated financial statements for the
fiscal year ended April 30, 2012. The independent auditors noted
that the Company is in default of certain covenants of its credit
agreement and has incurred operating losses, negative cash flows
from operating activities and has a working capital deficiency as
of April 30, 2012. These matters raise substantial doubt about
the Company's ability to continue as a going concern.
The Company's balance sheet at April 30, 2012, showed
$35.79 million in total assets, $29.91 million in total
liabilities, and stockholders' equity of $5.88 million.
WPCS reported a net loss attributable to the Company of $20.54
million for the year ended April 30, 2012, compared to a net loss
attributable to the Company of $36.83 million during the prior
fiscal year.
ZOO ENTERTAINMENT: MMB Agrees to Provide $1.6MM Add'l Financing
---------------------------------------------------------------
indiePub Entertainment, Inc., (formerly Zoo Entertainment, Inc.),
Zoo Games, Inc., Zoo Publishing, Inc., and indiePub, Inc., and MMB
Holdings LLC, entered into the First Amendment to Loan and
Security Agreement, pursuant to which the parties agreed to amend
that certain Loan and Security Agreement dated as of March 9,
2012, by and between the Borrowers and MMB.
Pursuant to the LSA Amendment, MMB agreed to provide up to
$1,600,000 in additional funding to the Borrowers under the LSA.
The Additional Funding will bear interest at the lesser of a rate
of 15% per annum, or the maximum rate permitted by law.
In connection with the LSA Amendment, the Company issued MMB a
warrant to purchase an additional 4,000,000 shares of indiePub
Entertainment common stock at $0.40 per share. The Additional
Warrant may be exercised any time prior to July 30, 2017.
MMB, a limited liability company organized under the laws of
Delaware, is owned by David E. Smith, a former director of the
Company, Jay A. Wolf, Executive Chairman of the Board of Directors
of the Company, and certain other parties. Mr. Smith is the
managing member of Mojobear Capital LLC, which, in turn, is the
managing member of MMB.
About Zoo Entertainment
Cincinnati, Ohio-based Zoo Entertainment, Inc. (NASDAQ CM: ZOOG)
is a developer, publisher and distributor of interactive
entertainment for Internet-connected consoles, handheld gaming
devices, PCs, and mobile devices.
The Company reported a net loss of $25.87 million in 2011,
compared with a net loss of $14.03 million in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $2.06 million
in total assets, $15.24 million in total liabilities and a $13.18
million total stockholders' deficit.
In the auditors' report accompanying the consolidated financial
statements for the year ended Dec. 31, 2011, EisnerAmper LLP, in
Edison, New Jersey, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has both incurred losses and
experienced net cash outflows from operations since inception.
ZOO ENTERTAINMENT: David Smith Discloses 78.2% Equity Stake
-----------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, David Smith and his affiliates disclosed
that, as of July 30, 2012, they beneficially own 28,895,828 shares
of common stock of indiePub Entertainment, Inc., formerly Zoo
Entertainment, Inc., representing 78.2% of the shares outstanding.
Mr. Smith previously reported beneficial ownership of 24,109,629
common shares or a 75% equity stake as of July 12, 2012.
A copy of the amended filing is available for free at:
http://is.gd/ijgorD
About Zoo Entertainment
Cincinnati, Ohio-based Zoo Entertainment, Inc. (NASDAQ CM: ZOOG)
is a developer, publisher and distributor of interactive
entertainment for Internet-connected consoles, handheld gaming
devices, PCs, and mobile devices.
The Company reported a net loss of $25.87 million in 2011,
compared with a net loss of $14.03 million in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $2.06 million
in total assets, $15.24 million in total liabilities and a $13.18
million total stockholders' deficit.
In the auditors' report accompanying the consolidated financial
statements for the year ended Dec. 31, 2011, EisnerAmper LLP, in
Edison, New Jersey, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has both incurred losses and
experienced net cash outflows from operations since inception.
* OCC & Federal Reserve Extend Independent Foreclosure Review
-------------------------------------------------------------
Borrowers seeking a review of their mortgage foreclosures under
the federal banking agencies' Independent Foreclosure Review now
have until Dec. 31, 2012, to submit their requests.
The Office of the Comptroller of the Currency (OCC) and the Board
of Governors of the Federal Reserve System (Federal Reserve) that
the deadline for submitting requests for review under the
Independent Foreclosure Review has been extended. The new
deadline provides additional time for borrowers to request a
review if they believe they suffered financial injury as a result
of errors in foreclosure actions on their homes in 2009 or 2010 by
one of the servicers covered by enforcement actions issued in
April 2011.
The deadline extension provides more time to increase awareness
about the Independent Foreclosure Review and how eligible
borrowers may request a review, and to encourage the broadest
participation possible. The agencies will work with the servicers
to expand their outreach and marketing efforts through the end of
the year to encourage as much participation as possible.
As part of enforcement actions issued in April 2011, the agencies
required 14 large mortgage servicers to retain independent
consultants to conduct a comprehensive review of foreclosure
activity in 2009 and 2010 to identify borrowers who may have been
financially injured due to errors, misrepresentations, or other
deficiencies in the foreclosure process. If the review finds that
financial injury occurred, the borrower may receive remediation
such as lump-sum payments, suspension or rescission of a
foreclosure, a loan modification or other loss mitigation
assistance, correction of credit reports, or correction of
deficiency amounts and records. Lump-sum payments can range from
$500 to, in the most egregious cases, $125,000 plus equity,
according to guidance issued by the agencies.
Requesting a review does not preclude borrowers from taking other
actions related to their foreclosures. A servicer is not
permitted to require a borrower to sign a waiver of the borrower's
ability to pursue claims against the servicer in order to receive
compensation under the Independent Foreclosure Review.
* Moody's Says US Unregulated Power Companies' Outlook Negative
---------------------------------------------------------------
A negative outlook for US unregulated power companies reflects
near and longer-term challenges facing the sector while a stable
outlook for regulated companies is underpinned by the monopolistic
nature of electric and gas utilities in the US, says Moody's
Investors Service in a pair of updated outlook reports.
The reports, "Six Month Update: US Unregulated Power Companies"
and "Six Month Update: US Regulated Utilities," capture conditions
for the two distinct power sectors, and update the annual sector
outlooks that were published early this year.
"Near-term challenges for unregulated companies include low
natural gas prices that have reduced power prices, and negatively
impacted the sector's operating margins," said Moody's VP-Senior
Analyst Scott Solomon, author of the report on the unregulated
sector. "Many of the factors that influence margin creation and
sustained cash flow are beyond the control of management, and we
do not see any near-term improvement in several of these factors."
Moody's reports that operating costs are rising for unregulated
companies along with capital expenditures, largely to comply with
steadily increasing environmental mandates.
"The mandates have begun to shift some issuers' strategic plans,
while illustrating the differences among industry players in such
areas as operating characteristics, cash flow volatility,
liquidity requirements, and capital structure formation," said
Solomon.
Moody's stable outlook for the regulated sector is underpinned by
a generally constructive regulatory environment that has also been
affected by low natural gas prices due to a significant supply-
demand imbalance.
"Low natural gas prices are generally positive for the regulated
utility industry but have changed the landscape," said VP-Senior
Analyst William Hunter, author of the report. "They have affected
dispatch curves, customer rates, coal inventory and supply
management, relative competitiveness of different regions, and
investment plans."
He said the regulated sector also benefits from welcoming capital
markets, good liquidity and fairly stable financial profiles.
"The industry is relatively well positioned to face the challenges
of a large capital expenditure program for environmental retrofits
over the next several years to conform to new air admissions
standards," said Mr. Hunter.
Both reports indicate that the specifications and timing of
implementation of the current round of environmental regulations
will depend on the outcome of this fall's national elections with
Moody's overall view that stricter emissions limits will be
implemented over time.
Both the stable outlook for the regulated sector and the negative
outlook for the unregulated sector reflect Moody's expectations
for the fundamental business conditions in the two industry
segments over the next 12 to 18 months.
Moody's subscribers can access the report on regulated facilities
at http://is.gd/dkKdX4
The report on unregulated facilities is available at:
http://is.gd/2o9uFi
* Ascension Servicing Unit Sold by Encore Capital
--------------------------------------------------
Encore Capital Group, Inc. disclosed that during the second
quarter, on May 16, 2012, the company completed the sale of
substantially all of the assets and certain liabilities of its
bankruptcy servicing subsidiary Ascension Capital Group, Inc., to
a subsidiary of American InfoSource, L.P. As part of the sale,
the Company agreed to fund normal operating losses in the first
year of ownership, not to exceed $4.0 million. If the business
grows and becomes profitable, the Company will be paid an earn-out
equal to 30 to 40% of the EBITDA of the Ascension business for the
first five years after closing.
The operations, including goodwill and intangible impairment
losses of Ascension and the loss on the sale including the $4.0
million loss contingency, are presented as discontinued operations
for the three and six months ended Jun. 30, 2012 and 2011, in the
Company's consolidated statements of comprehensive income.
* Bruce Buchanan Joins PwC US's Business Recovery Services Group
----------------------------------------------------------------
PricewaterhouseCoopers US disclosed that Bruce Buchanan joined the
firm as a managing director with the firm's Business Recovery
Services (BRS) group based in New York. In his new role with PwC,
Buchanan serves in the restructuring services arm of PwC's Deals
team, assisting clients in evaluating strategic and financial
alternatives and providing structuring advice to ensure successful
recapitalizations and restructurings. As a veteran restructuring
and capital markets specialist, he has participated in more than
100 restructuring-related transactions over the course of his
career.
"Bruce is a results-driven restructuring specialist with strong
fundamental credit and debt capital advisory experience across a
broad spectrum of industries, products and markets," said Perry
Mandarino, U.S. Business Recovery Services Leader with PwC. "His
track record of supporting companies in working with the various
stakeholders involved during these complex transactions while
addressing their corporate financing needs is highly regarded, and
his unique skill sets will greatly benefit our clients and our
practice. We are very excited to welcome him to our team."
With a strong background in restructurings, recapitalizations and
capital markets services, Buchanan has served in a variety of
leadership roles with leading investment banking firms. Prior to
joining PwC, he served as managing director, head of strategic
finance and global restructuring group team leader at RBS
Securities Inc., evaluating restructuring alternatives and driving
corporate solutions to maximize recoveries and reduce risk and
exposure. He has also led the restructuring divisions at Morgan
Stanley, Bank of America Merrill Lynch and GE Capital. In each of
these positions, Buchanan played a significant role in providing
capital markets advisory services and arranging financing to
address clients' specific and evolving capital needs. Buchanan
started his career in the financial audit group at PwC.
Buchanan received his B.S. in accounting with a minor in business
administration from State University of New York at Albany and an
MBA in finance from New York University. He is a CPA, holds NASD
Series 7, 63 and 79 licenses and has presented at various
turnaround and restructuring conferences. Buchanan was also
listed as "People to Watch" in Turnaround & Workouts publication.
PwC's Business Recovery Services practice is a leading advisor to
stakeholders during complex financial restructurings, bankruptcies
and turnaround situations. With its focus on broad advisory,
complex financial services and crisis management, PwC provides
strategic, operational and financial alternatives to preserve and
restore the performance and value of businesses. With the power
of its professionals around the world, PwC delivers specific
industry and technical expertise with its hand-on, solutions
driven approach.
PwC's Deals practitioners help corporate and private equity
executives navigate transactions to maximize value and returns.
In today's increasingly daunting economic and regulatory
environment, experienced M&A specialists assist clients on a range
of transactions from smaller and mid-sized deals to the most
complex transactions, including domestic and cross-border
acquisitions, divestitures and spin-offs, capital events such as
IPOs and debt offerings, and bankruptcies and other business
reorganizations. We help clients with strategic planning around
their growth and investment agendas and advise on the business-
wide risks and value drivers in their transactions for more
empowered negotiations, decision making and execution.
Clients can then expedite their deals, minimize their risks,
capture and deliver value to their stakeholders, and quickly
return to business as usual.
PwC's local and global deal strength is derived from over 1,400
deal professionals in 21 cities in the U.S. and over 9,800 deal
professionals across a global network of firms in 75 countries.
In addition, PwC's network firm PwC Corporate Finance can provide
investment banking services within the U.S.
* Chadbourne & Parke Adds Two Lateral Partners for LA Office
------------------------------------------------------------
The international law firm of Chadbourne & Parke announced that
project finance lawyers Paul J. Kaufman and Evelyn Lim have joined
the firm as partners in the Los Angeles office, bolstering
Chadbourne's West Coast project finance capabilities.
Both are veteran renewable energy lawyers.
Mr. Kaufman most recently was executive vice president for
transactions of enXco, the North American development arm of
Electricite de France. He joined enXco as general counsel in
2008. Mr. Kaufman has been a well regarded energy lawyer since
1984. He began as a regulatory lawyer for the Public Power
Council, a trade group of 118 public utility districts, municipal
utilities and electric cooperatives and then practiced for 11
years as a lawyer with a firm in Oregon, where he acted for one of
the two big coalitions of independent power companies active in
California.
He appeared in regulatory proceedings for a variety of clients
before the Federal Energy Regulatory Commission and public utility
commissions in the western US from Arizona to Alaska. In 1997, he
moved to Enron where he directed government and regulatory affairs
in the western US for five years. After Enron, he became general
counsel of what was then PPM Energy, one of the top three US wind
companies, headquartered in Portland. During Mr. Kaufman's
tenure, PPM was owned initially by Scottish Power, the Scottish
utility, and then by Iberdrola, a Spanish utility, at which time
it changed its name to Iberdrola Renewables. During Mr. Kaufman's
tenure as general counsel, the company not only developed wind
farms, but also had active gas storage and gas and electricity
trading businesses.
Ms. Lim comes to Chadbourne from Element Power, a global renewable
energy company headquartered in Oregon, where she served as senior
vice president and general counsel. Before moving to Element, she
had been general counsel of First Wind and was previously a
partner with McDermott Will & Emery firm in Los Angeles and
London. At First Wind, she helped raise more than $2 billion from
various sources, including turbine, construction and term lenders,
tax equity investors, financial sponsors and other investors.
In her legal career, Ms. Lim has also worked for underwriters in
private and public offerings of debt and equity securities,
including Rule 144A and Reg. S, high-yield and structured debt
offerings, monetizations of energy contracts and other structured
products. She has also spent significant time on non-power
infrastructure projects, including a submerged tunnel road project
in Greece, the Monterrey-Cadereyta toll road project in Mexico and
the Autopista Central toll road project in Chile.
"We are very fortunate to have two such capable people join us,"
said Keith Martin, co-head of Chadbourne's project finance
practice. "The sort of experience they bring at leading renewable
energy developers should make them stand out in the market. They
understand the business at a deeper level than most outside
counsel."
"Both should fit seamlessly into what is already a huge renewable
energy practice," added practice co-chair Rohit Chaudhry. "They
will bring the headcount in our project finance group to 80
lawyers. Roughly 70% of the group's work is in the renewable
energy sector. This work is increasingly outside the United
States, particularly in Latin America and Africa."
"The hiring of Mr. Kaufman and Ms. Lim puts us back on the ground
in California in project finance. We expect to grow from there,"
remarked Robin Ball, Managing Partner of Chadbourne's L.A. office.
"What particularly appealed to us about Paul and Evelyn is they
are not just renewable energy lawyers, but they have also done
other things: Paul with his work for Enron and on gas storage and
electricity and gas trading, and Evelyn with her work on
complicated capital markets and structured finance transactions
and other types of infrastructure projects," said Chadbourne
Managing Partner Andrew Giaccia.
Mr. Kaufman earned a B.S. in natural resources from Cornell
University and a J.D. from Northwestern School of Law.
Ms. Lim received a B.S. in applied economics and business
management from Cornell University and a J.D. from Fordham
University School of Law.
About Chadbourne & Parke LLP
Chadbourne & Parke LLP-- http://www.chadbourne.com/--
an international law firm headquartered in New York City,
provides a full range of legal services, including mergers and
acquisitions, securities, project finance, private funds,
corporate finance, venture capital and emerging companies,
energy/renewable energy, communications and technology, commercial
and products liability litigation, arbitration/IDR, securities
litigation and regulatory enforcement, special investigations and
litigation, intellectual property, antitrust, domestic and
international tax, insurance and reinsurance, environmental, real
estate, bankruptcy and financial restructuring, executive
compensation and employee benefits, employment law, trusts and
estates and government contract matters. Major geographical areas
of concentration include Russia, Central and Eastern Europe,
Turkey, the Middle East and Latin America. The Firm has offices
in New York, Washington D.C., Los Angeles, Mexico City, S?o Paulo,
London, Moscow, Warsaw, Kyiv, Istanbul, Dubai and Beijing.
* BOND PRICING -- For Week From July 30 to Aug. 3, 2012
-------------------------------------------------------
Company Coupon Maturity Bid Price
------- ------ -------- ---------
A123 SYSTEMS INC 3.750 4/15/2016 23.50
AES EASTERN ENER 9.000 1/2/2017 15.50
AES EASTERN ENER 9.670 1/2/2029 9.00
AGY HOLDING COR 11.000 11/15/2014 42.50
AHERN RENTALS 9.250 8/15/2013 55.02
ALION SCIENCE 10.250 2/1/2015 57.93
AMBAC INC 6.150 2/7/2087 2.25
AMER GENL FIN 5.000 8/15/2012 99.25
ATP OIL & GAS 11.875 5/1/2015 36.38
ATP OIL & GAS 11.875 5/1/2015 36.38
ATP OIL & GAS 11.875 5/1/2015 36.55
BAC-CALL08/12 4.900 5/15/2023 100.00
BAC-CALL08/12 5.000 5/15/2023 100.10
BAC-CALL08/12 5.000 5/15/2028 100.13
BAC-CALL08/12 5.100 2/15/2020 100.00
BAC-CALL08/12 5.500 11/15/2029 100.00
BAC-CALL08/12 5.600 2/15/2016 100.00
BAC-CALL08/12 5.600 2/15/2029 100.00
BAC-CALL08/12 6.000 2/15/2037 100.00
BAC-CALL08/12 6.150 8/15/2021 100.00
BAC-CALL08/12 6.550 8/15/2027 100.00
BETHEL BAPTIST 7.900 7/21/2026 11.00
BROADVIEW NETWRK 11.375 9/1/2012 64.38
BUFFALO THUNDER 9.375 12/15/2014 35.50
DIRECTBUY HLDG 12.000 2/1/2017 18.00
DIRECTBUY HLDG 12.000 2/1/2017 18.63
EASTMAN KODAK CO 7.000 4/1/2017 26.00
EASTMAN KODAK CO 7.250 11/15/2013 26.00
EASTMAN KODAK CO 9.200 6/1/2021 23.03
EASTMAN KODAK CO 9.950 7/1/2018 28.00
EDISON MISSION 7.500 6/15/2013 54.00
ELEC DATA SYSTEM 3.875 7/15/2023 97.00
ENERGY CONVERS 3.000 6/15/2013 37.00
GEOKINETICS HLDG 9.750 12/15/2014 54.41
GLB AVTN HLDG IN 14.000 8/15/2013 28.10
GLOBALSTAR INC 5.750 4/1/2028 45.25
GMX RESOURCES 4.500 5/1/2015 33.00
GMX RESOURCES 5.000 2/1/2013 75.50
HAWKER BEECHCRAF 8.500 4/1/2015 16.25
HAWKER BEECHCRAF 8.875 4/1/2015 15.50
HAWKER BEECHCRAF 9.750 4/1/2017 0.88
JAMES RIVER COAL 4.500 12/1/2015 31.00
KELLWOOD CO 7.625 10/15/2017 29.20
KV PHARM 12.000 3/15/2015 47.00
LEHMAN BROS HLDG 0.250 12/12/2013 21.75
LEHMAN BROS HLDG 0.250 1/26/2014 21.75
LEHMAN BROS HLDG 1.000 10/17/2013 21.75
LEHMAN BROS HLDG 1.000 3/29/2014 21.75
LEHMAN BROS HLDG 1.000 8/17/2014 24.25
LEHMAN BROS HLDG 1.000 8/17/2014 21.75
LEHMAN BROS HLDG 1.250 2/6/2014 21.75
LEHMAN BROS HLDG 1.500 3/29/2013 21.75
LEHMAN BROS INC 7.500 8/1/2026 7.55
LIFECARE HOLDING 9.250 8/15/2013 57.40
MANNKIND CORP 3.750 12/15/2013 57.00
MASHANTUCKET PEQ 8.500 11/15/2015 9.25
MASHANTUCKET PEQ 8.500 11/15/2015 9.53
MASHANTUCKET TRB 5.912 9/1/2021 9.25
MF GLOBAL LTD 9.000 6/20/2038 39.90
MGIC INVT CORP 9.000 4/1/2063 17.08
NETWORK EQUIPMNT 7.250 5/15/2014 50.00
NEWPAGE CORP 10.000 5/1/2012 7.00
NGC CORP CAP TR 8.316 6/1/2027 14.00
PATRIOT COAL 3.250 5/31/2013 14.00
PENSON WORLDWIDE 8.000 6/1/2014 35.83
PMI CAPITAL I 8.309 2/1/2027 0.38
PMI GROUP INC 6.000 9/15/2016 21.66
POWERWAVE TECH 3.875 10/1/2027 13.25
POWERWAVE TECH 3.875 10/1/2027 12.64
PRU-CALL08/12 5.550 2/15/2030 100.00
PRU-CALL08/12 6.300 8/15/2031 100.05
REAL MEX RESTAUR 14.000 1/1/2013 46.45
REDDY ICE CORP 13.250 11/1/2015 28.20
RESIDENTIAL CAP 6.500 4/17/2013 24.13
RESIDENTIAL CAP 6.875 6/30/2015 24.61
SAVIENT PHARMA 4.750 2/1/2018 25.00
TERRESTAR NETWOR 6.500 6/15/2014 10.00
TEXAS COMP/TCEH 7.000 3/15/2013 15.70
TEXAS COMP/TCEH 10.250 11/1/2015 29.88
TEXAS COMP/TCEH 10.250 11/1/2015 32.00
TEXAS COMP/TCEH 10.250 11/1/2015 31.25
TEXAS COMP/TCEH 15.000 4/1/2021 38.50
TEXAS COMP/TCEH 15.000 4/1/2021 35.13
THORNBURG MTG 8.000 5/15/2013 8.25
TIMES MIRROR CO 7.250 3/1/2013 34.50
TOUSA INC 9.000 7/1/2010 13.00
TOUSA INC 9.000 7/1/2010 19.88
TRAVELPORT LLC 11.875 9/1/2016 37.89
TRAVELPORT LLC 11.875 9/1/2016 35.63
TRIBUNE CO 5.250 8/15/2015 37.00
USEC INC 3.000 10/1/2014 46.63
WASH MUT BANK FA 5.125 1/15/2015 0.01
WASH MUT BANK NV 6.750 5/20/2036 0.88
WCI COMMUNITIES 4.000 8/5/2023 0.13
WCI COMMUNITIES 4.000 8/5/2023 0.13
WESTERN EXPRESS 12.500 4/15/2015 55.00
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
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then-ending.
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*********
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
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