/raid1/www/Hosts/bankrupt/TCR_Public/121121.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, November 21, 2012, Vol. 16, No. 324
Headlines
1617 WESTCLIFF: Court Okays James White Estate's Accountant
1617 WESTCLIFF: Can Hire Lee & Associates as Real Estate Broker
9920 FLORA VISTA: S&P Cuts Housing Revenue Bond Rating to 'BB-'
A123 SYSTEMS: Received $1-Mil. Grant From Obama Administration
A123 SYSTEMS: Wanxiang Promises to Preserve Jobs, Plants
AFA FOODS: WARN Class Asks Judge to Deny Exclusivity Extension
ALLEN SYSTEMS: S&P Cuts CCR to 'D' on Missed Interest Payment
AMERICAN AIRLINES: Supreme Court Lone Avenue to Stop PSA Election
AMERICAN LASER: Sends Cases to Chapter 7 Liquidation
ARCELORMITTAL SA: Gets $450MM to Exit S. African Mine Venture
AURORA DIAGNOSTICS: S&P Cuts CCR to 'B-' on Lower MEDICARE Rates
BELLWEST HOLDINGS: Creditors' Proofs of Claim Due Dec. 24
BELLWEST HOLDINGS: Court Approves Eric Slocum as Counsel
BELO CORP: S&P Raises CCR to 'BB' on Reduced Debt Leverage
BERNARD L. MADOFF: Bro-in-Law Loses Standing Defense to Suit
BIOFUELS POWER: Delays Form 10-Q for Third Quarter
BURLINGTON INT'L AIRPORT: Moody's Rates $26.4-Mil. Bonds 'Ba1'
CAMBRIDGE HEART: Incurs $1.1 Million Net Loss in Third Quarter
CASCADE AG: Court Approves Cairncross & Hempelmann as Counsel
CASCADE AG: Hires Hamstreet as Chief Restructuring Officer
CATASYS INC: Incurs $257,000 Net Loss in Third Quarter
CENGAGE LEARNING: S&P Cuts CCR to 'CCC' on Weak Performance
CHELAN COUNTY: S&P Cuts SPUR on General Obligation Debt to 'BB+'
CHINA TEL GROUP: Delays Third Quarter Form 10-Q for Review
COMMUNICATION INTELLIGENCE: Incurs $1.2 Million Net Loss in Q3
COOPERATIVE COMMS: Judge Extends Plan Filing Deadline to March 7
CULLMAN REGIONAL: Moody's Affirms 'Ba1' Rating on $66MM Bonds
CYCLONE POWER: Delays Third Quarter Form 10-Q for Review
DAIS ANALYTIC: Incurs $328,690 Net Loss in Third Quarter
DANCEHALL LLC: Proofs of Claim Due April 7
DDR CORP: Fitch Affirms Low Ratings on Several Sr. Unsecured Loans
DELTA PETROLEUM: Trustee Objects to Akin Gump's $1MM Fee Request
DESERT HAWK: Incurs $281,500 Net Loss in Third Quarter
DR TATTOFF: Incurs $603,640 Net Loss in Third Quarter
EAST COAST DIVERSIFIED: Delays Form 10-Q for Third Quarter
EAT AT JOE'S: Incurs $144,700 Net Loss in Third Quarter
EGPI FIRECREEK: Delays Form 10-Q for Third Quarter
ELITE PHARMACEUTICALS: Posts $1.04-Mil. Profit in Sept. 30 Qtr.
ELPIDA MEMORY: ITC Judge Allows Nanya to End DRAM IP Case
ELPIDA MEMORY: U.S. Judge to Review Rambus Patent Deals
ENNIS COMMERCIAL: Owner Seeks to Convert Own Case to Ch. 7
ETOWAH VALLEY: Files for Chapter 11 Bankruptcy Protection
EXTENDED STAY: Buyout Group to Sell $3.5 Billion in Debt
FILENE'S BASEMENT: Say Cushman's Termination Fee Request Too Early
FUEL DOCTOR: Delays Form 10-Q for Third Quarter
FUELSTREAM INC: President Quits; J. Carlos Ley Named CEO
GENELINK INC: Incurs $974,000 Net Loss in Third Quarter
GLYECO INC: Incurs $446,000 Net Loss in Third Quarter
GREEN EARTH: Incurs $628,000 Net Loss in Sept. 30 Quarter
GUANGZHOU GLOBAL: Reports $112,491 Net Income in 3rd Quarter
GUIDED THERAPEUTICS: Files Form S-1, Registers 15.2MM Shares
HARRISBURG, PA: Advisers Defend Work on Incinerator
HERTZ CORP: S&P Removes 'B+' CCR From Watch on DTAG Acquisition
HMX ACQUISITION: Dec. 10 Auction of Coppley Brand, Other Assets
HOSTESS BRANDS: To Proceed With Wind-Down After Mediation Failed
HOWREY LLP: Trustee Objects to Class Action Against Ex-Partners
HRK HOLDINGS: May Pay Lawyers on Contingency Basis
IMAGEWARE SYSTEMS: Incurs $2.7 Million Net Loss in Third Quarter
IMPLANT SCIENCES: Incurs $12.7-Mil. Net Loss in Sept. 30 Quarter
INERGETICS INC: Incurs $1.3 Million Net Loss in Third Quarter
INDYMAC BANK: FDIC Liable for MBS Losses, MBIA's Tells DC Circ.
INNOVATION VENTURES: S&P Revises Outlook on 'B-' CCR to Negative
INTERNATIONAL COMMERCIAL: Incurs $217,200 Net Loss in 3rd Quarter
INTERNATIONAL FUEL: Incurs $495,000 Net Loss in Third Quarter
INTERSTATE PROPERTIES: Files Schedules of Assets and Liabilities
IZEA INC: Incurs $951,500 Net Loss in Third Quarter
JOHN BECK: U.S. Trustee Wants Bankruptcy Converted to Ch. 7
K-V PHARMACEUTICAL: Exclusivity Period Extended Until Feb. 4
K-V PHARMACEUTICAL: Raises $6.5 Million From Settlement
KINDER MORGAN: Moody's Corrects July 17 Rating Release
LANTERN PARTNERS: Court OKs Darrin L. Boyd as Leasing Agent
LDK SOLAR: Reaches Agreement to Terminate Wafer Contract
LEAGUE NOW: Incurs $124,500 Net Loss in Third Quarter
LOS ANGELES DODGERS: Dewey Wants $500K Bonus for Bankruptcy Work
MBIA INSURANCE: Moody's Downgrades IFS Rating to 'Caa2'
MEDICAL ALARM: In Talks for Possible Expansion in China
MEDICAL CARD: S&P Keeps 'CCC' Counterparty Credit Rating on Watch
MEDYTOX SOLUTIONS: Delays Q3 Form 10-Q for Limited Resources
MF GLOBAL: Commodities Customer Can't Get Priority Status
MIT HOLDING: Delays Form 10-Q for Third Quarter for Review
MMRGLOBAL INC: Incurs $1.5 Million Net Loss in Third Quarter
NETWORK CN: Incurs $664,700 Net Loss in Third Quarter
NEWPAGE CORP: Creditors Demand Docs on Cerberus Deal
NORTHAMPTON GENERATING: Remains Mum on Contours of Plan
NORTHCORE TECHNOLOGIES: Incurs C$535K Loss in Third Quarter
NSG HOLDINGS: S&P Assigns Preliminary 'BB' Corp. Credit Rating
ODYSSEY PICTURES: Delays Form 10-Q for Sept. 30 Quarter
OMTRON USA: Meeting to Form Creditors' Panel on Nov. 29
ORAGENICS INC: Incurs $2.5 Million Net Loss in Third Quarter
OSAGE EXPLORATION: Reports $251,000 Net Income in 3rd Quarter
OSAGE EXPLORATION: Peter Hoffman Discloses 8% Equity Stake
OVERSEAS SHIPHOLDING: Meeting to Form Creditors' Panel on Nov. 28
PACIFIC GOLD: Incurs $2.6 Million Net Loss in Third Quarter
PATRIOT COAL: Gets 6-Month Extension to File Ch. 11 Plan
PAUL KEMSLEY: Seeks Ch. 15; Barclays' $8-Mil. Suit on Hold
PAYMENT DATA: Reports $626,700 Net Income in Third Quarter
PENN NATIONAL: REIT Plan No Impact on Moody's Ratings
PFI HOSPITALITY: Cornerstone Bank Forecloses on Hotel
PHYSICAL PROPERTY: Incurs HK$101,000 Net Loss in 3rd Quarter
PINNACLE AIRLINES: Seeks Approval of Restructuring Term Sheet
PINNACLE AIRLINE: Judge Keeps Pilots Union Ruling Under Wraps
PIPELINE DATA: Credit-Card Processor Files Chapter 11 to Sell
PIPELINE DATA: Case Summary & 20 Largest Unsecured Creditors
POSITIVEID CORP: Delays Form 10-Q for Third Quarter
PRECISION OPTICS: Incurs $358,000 Net Loss in Sept. 30 Quarter
PRESIDENTIAL REALTY: Incurs $628,000 Net Loss in Third Quarter
PRESSURE BIOSCIENCES: Incurs $796,000 Net Loss in Third Quarter
R.E. LOANS: Terra Verde Buys Calif. Development for $45 Million
REFLECT SCIENTIFIC: Posts $3.3 Million Net Income in 3rd Quarter
RENEGADE HOLDINGS: Judge to Consider Liquidation at Jan. 8 Hearing
REVEL CASINO: $850-Mil. Debt Trading at Around 50% Off
RG STEEL: Union Urges Court to Block Payments to 21 Employees
RIVER CANYON: Hires Seter Vander to Challenge UWSD Claim
SAAB CARS: Judge Gives Ally One Month to Submit Rival Plan
SAGAMORE PARTNERS: Wants Chance to Make Up Missed Mortgage Payment
SALON MEDIA: Incurs $660,000 Net Loss in Sept. 30 Quarter
SAN BERNARDINO, CA: Files Budget; To Renegotiate With Calpers
SHINGLE SPRINGS: Moody's Says Gaming Compact No Rating Impact
SIDERA NETWORKS: S&P Rates Proposed $375MM Secured Credit 'B'
SMART-TEK SOLUTIONS: Delays Form 10-Q for Third Quarter
SOLYNDRA LLC: Wins OK to Sell Factory, HG to Seagate for $90MM
SPECTRUM HEALTHCARE: Plans to Close Laurel Hill Nursing Home
STRATUS MEDIA: Delays Form 10-Q for Third Quarter
SUNVALLEY SOLAR: Delays Form 10-Q for Third Quarter
TCI COURTYARD: Hiring Eric Liepins as Bankruptcy Counsel
TCI COURTYARD: Sec. 341 Creditors' Meeting Set for Dec. 28
TEXTRON FINANCIAL: Fitch Holds 'BB' Rating on Junior Sub. Notes
THETA CORP: Moody's Withdraws 'Ba1' Counterparty Rating
TOKLAN OIL: Has 23% Plan for Unsecured Creditors
TRINITY COAL: Auctions Off Fleet of Industrial Equipment
TW & CO: Owes $3 Million to IRS, Judge Hears
W&T OFFSHORE: S&P Retains 'B' Senior Unsecured Debt Rating
ZACKY FARMS: Taps Felderstein Fitzgerald as Bankruptcy Counsel
ZACKY FARMS: Committee Taps Fox Rothschild as Local Counsel
* Argentina Wants 2nd Circ. to Revisit $1.4BB Payout Order
* FHA's $16-Bil. Shortfall Adds Urgency to Mortgage Policy Fight
* Moody's Says Liquidity-Stress Index Rises to 4% in November
* Bond Issuances Provide Liquidity for Junk Companies
* Railroad Retirement Income Payable to Creditors
* House Panel Pushes SEC-CFTC Merger
* Upcoming Meetings, Conferences and Seminars
*********
1617 WESTCLIFF: Court Okays James White Estate's Accountant
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
granted 1617 Westcliff, LLC, permission to employ James White,
CPA, as the estate's accountant. The Debtor requires the
assistance of an accountant to review and analyze reports of the
receiver who is in possession of and largely operating the
Debtor's assets; provide ongoing financial reporting and
bookkeeping; complete accurate monthly operating reports; and
perform any necessary accountancy in connection with sale of
assets.
About 1617 Westcliff
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.
Bankruptcy Judge Mark S. Wallace oversees the case. D. Edward
Hays, Esq., at Marshack Hays LLP, serves as the Debtor's counsel.
1617 WESTCLIFF: Can Hire Lee & Associates as Real Estate Broker
---------------------------------------------------------------
1617 Westcliff, LLC, has obtained authorization from the U.S.
Bankruptcy Court for the Central District of California to employ
J. Mark Larson and Lee & Associates Investment Services Group as
real estate broker and leasing agent.
J. Mark Larson, president of Lee & Associates, will, among other
things, market and sell the commercial property -- real property
commonly known as 1617 Westcliff Drive, Newport Beach, California
-- for the highest price; and lease portions of the commercial
property to appropriate tenants.
About 1617 Westcliff
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.
Bankruptcy Judge Mark S. Wallace oversees the case. D. Edward
Hays, Esq., at Marshack Hays LLP, serves as the Debtor's counsel.
9920 FLORA VISTA: S&P Cuts Housing Revenue Bond Rating to 'BB-'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term rating on
Bellflower, Calif.'s multifamily housing revenue bonds (9920 Flora
Vista - Bellflower Terrace Seniors) series 2002A to 'BB-' from
'AA+'. The outlook is negative. The bonds are backed by a mortgage
loan that is secured by an irrevocable standby Fannie Mae credit
enhancement facility.
"The downgrade is based on our view of the project's inability to
pay full and timely debt service on the bonds sufficiently," said
Standard & Poor's credit analyst Renee J. Berson.
S&P's rating reflects its view:
-- The revenues from mortgage debt service payments and
investment earnings are insufficient to pay full and timely
debt service on the bonds plus fees beyond 2021;
-- The inability to cover the excess call from the excess
revenues as anticipated; and
-- The asset/liability parity below the benchmark from Dec.
2021.
Credit strengths include S&P's opinion:
-- The investments held in Wells Fargo Advantage Government
money market fund (AAAm);
-- The high credit quality of the irrevocable standby Fannie Mae
credit enhancement facility, which S&P considered to be 'AA+'
eligible;
-- The assets that are insufficient to cover the reinvestment
risk required for special redemptions as of Sept. 30, 2012;
and
-- An asset-to-liability ratio of 100.10% as of Sept. 30, 2012.
"Standard & Poor's has analyzed available updated financial
statements. We believe the bonds are unable to meet all bond costs
from transaction revenues until the remarketing date," S&P said.
A123 SYSTEMS: Received $1-Mil. Grant From Obama Administration
--------------------------------------------------------------
Ayesha Rascoe at Reuters reports A123 Systems Inc. told lawmakers
investigating its government grant that the Obama administration
provided nearly $1 million on the day it filed for bankruptcy.
A123 in October received $946,830 as part of its $249 million
clean energy grant from the Energy Department, the company said in
a letter, obtained by Reuters, to Republican Senators John Thune
and Chuck Grassley.
According to Reuters, in the letter, dated Nov. 14, A123 said the
October payment was the most recent disbursement it had received
from the government, with an additional $115.8 million still
outstanding on the grant. Messrs. Thune and Grassley have pressed
the Energy Department for more details about its funding of A123
as the company has faltered.
"The Department of Energy needs to answer for why it appears to
put federal grants on auto-pilot to the detriment of U.S.
taxpayers," the report quotes the two senators as stating. "This
can't stand."
The report relates A123 said it may still need to use the rest of
its grant money if it decides to update or expand its current
manufacturing capacity.
The report says, under the department's grant program, companies
receive funds only after work is completed toward the ultimate
goal of a grant.
The report relates Energy Department spokesman, Bill Gibbons, said
the department's investments have helped to build U.S. advanced
battery manufacturing, supported American workers and ensured the
country can compete in a fiercely competitive global market.
Lance Duroni at Bankruptcy Law360 reports that two Republican
lawmakers blasted the Obama administration on Friday for handing
A123 Systems nearly $1 million from a federal grant on the very
day the company filed for bankruptcy.
U.S. Sens. John Thune, R-S.D., and Chuck Grassley, R-Iowa, said in
a statement that the continued government funding of A123 even as
it toppled into bankruptcy while being chased by a foreign suitor,
Chinese auto parts giant Wanxiang Group Corp., "paints a
disturbing picture," according to Bankruptcy Law360.
About A123 Systems
Based in Waltham, Massachusetts, A123 Systems Inc. designs,
develops, manufactures and sells advanced rechargeable lithium-ion
batteries and battery systems and provides research and
development services to government agencies and commercial
customers.
A123 is the recipient of a $249 million federal grant from the
Obama administration. Pre-bankruptcy, A123 had an agreement to
sell an 80% stake to Chinese auto-parts maker Wanxiang Group Corp.
U.S. lawmakers opposed the deal over concerns on the transfer of
American taxpayer dollars and technology to China.
A123 didn't make a $2.7 million payment due Oct. 15 on $143.75
million in 3.75% convertible subordinated notes due 2016.
A123 and U.S. affiliates, A123 Securities Corporation and Grid
Storage Holdings LLC, sought Chapter 11 bankruptcy protection
(Bankr. D. Del. Case Nos. 12-12859 to 12-12861) on Oct. 16, 2012,
with a deal to sell its auto-business assets to Johnson Controls
Inc. The deal with JCI is valued at $125 million, and subject to
higher offers at a bankruptcy auction.
A123 disclosed assets of $459.8 million and liabilities totaling
$376 million. Debt includes $143.8 million on 3.75% convertible
subordinated notes. Other liabilities include $22.5 million on a
bridge loan owing to Wanziang. About $33 million is owed to trade
suppliers.
The Hon. Kevin J. Carey presides over the case. Lawyers at
Richards, Layton & Finger, P.A., and Latham & Watkins LLP serve as
the Debtors' counsel. Lazard Freres & Co. LLC acts as the
Debtors' financial advisors, while Alvarez & Marsal serves as
restructuring advisors. Logan & Company Inc. serves as the
Debtors' claims and noticing agent. Wanxiang America Corporation
and Wanxiang Clean Energy USA Corp. are represented in the case by
lawyers at Young Conaway Stargatt & Taylor, LLP, and Sidley Austin
LLP. JCI is represented in the case by Josh Feltman, Esq., at
Wachtell Lipton Rosen & Katz LLP.
An official committee of unsecured creditors has been appointed in
the case. The Committee is represented by William R. Baldiga,
Esq., at Brown Rudnick LLP, and Mark Minuti, Esq., at Saul Ewing
LLP.
A123 SYSTEMS: Wanxiang Promises to Preserve Jobs, Plants
--------------------------------------------------------
Patrick Fitzgerald, writing for Dow Jones' Daily Bankruptcy
Review, reports that Wanxiang America Corp., which is looking to
acquire assets of A123 Systems Inc., said it would employ the
firm's U.S. workers and plants if its bid is accepted. According
to the report, Wanxiang said its offer would best preserve the
"integrity" of the battery maker and the jobs of A123's 2,400
employees.
"Wanxiang has a long history as a technology and automotive
company, operating in the United States to ensure plants remain
productive and local U.S. employees keep their jobs," said Pin Ni,
Wanxiang America's president, in a letter to A123 Chief Executive
David Vieau that appears designed to appease congressional
critics, the report notes.
Wanxiang has offered about $131 million for A123's assets,
excluding its government business, according to a person familiar
with the Wanxiang proposal, Dow Jones reports. Johnson Controls
Inc. separately offered $125 million for the company's auto assets
when it filed for bankruptcy.
According to the report, representatives of A123 and Johnson
Controls declined to comment.
An auction for A123's assets will be held Dec. 6 at the Chicago
office of Latham & Watkins, A123's counsel.
Dow Jones notes according to an A123 adviser the auction could
last several days given the complexity of the business and the
level of interest in the battery maker.
Lawyers for electronics makers Siemens AG, of Germany, and NEC
Corp., of Japan, have indicated they were interested in bidding on
A123 assets.
About A123 Systems
Based in Waltham, Massachusetts, A123 Systems Inc. designs,
develops, manufactures and sells advanced rechargeable lithium-ion
batteries and battery systems and provides research and
development services to government agencies and commercial
customers.
A123 is the recipient of a $249 million federal grant from the
Obama administration. Pre-bankruptcy, A123 had an agreement to
sell an 80% stake to Chinese auto-parts maker Wanxiang Group Corp.
U.S. lawmakers opposed the deal over concerns on the transfer of
American taxpayer dollars and technology to China.
A123 didn't make a $2.7 million payment due Oct. 15 on $143.75
million in 3.75% convertible subordinated notes due 2016.
A123 and U.S. affiliates, A123 Securities Corporation and Grid
Storage Holdings LLC, sought Chapter 11 bankruptcy protection
(Bankr. D. Del. Case Nos. 12-12859 to 12-12861) on Oct. 16, 2012,
with a deal to sell its auto-business assets to Johnson Controls
Inc. The deal with JCI is valued at $125 million, and subject to
higher offers at a bankruptcy auction.
A123 disclosed assets of $459.8 million and liabilities totaling
$376 million. Debt includes $143.8 million on 3.75% convertible
subordinated notes. Other liabilities include $22.5 million on a
bridge loan owing to Wanziang. About $33 million is owed to trade
suppliers.
The Hon. Kevin J. Carey presides over the case. Lawyers at
Richards, Layton & Finger, P.A., and Latham & Watkins LLP serve as
the Debtors' counsel. Lazard Freres & Co. LLC acts as the
Debtors' financial advisors, while Alvarez & Marsal serves as
restructuring advisors. Logan & Company Inc. serves as the
Debtors' claims and noticing agent. Wanxiang America Corporation
and Wanxiang Clean Energy USA Corp. are represented in the case by
lawyers at Young Conaway Stargatt & Taylor, LLP, and Sidley Austin
LLP. JCI is represented in the case by Josh Feltman, Esq., at
Wachtell Lipton Rosen & Katz LLP.
An official committee of unsecured creditors has been appointed in
the case. The Committee is represented by lawyers at Brown
Rudnick LLP and Saul Ewing LLP.
AFA FOODS: WARN Class Asks Judge to Deny Exclusivity Extension
--------------------------------------------------------------
Jamie Santo at Bankruptcy Law360 reports that a putative class of
ex-employees suing "pink slime" maker AFA Foods Inc. asked a
Delaware bankruptcy judge Wednesday to deny the company an
extension of its exclusivity period to file a Chapter 11 plan,
repeating their call for a Chapter 7 conversion.
The TCR reported on Nov. 9, 2012, AFA Investment Inc., et al., ask
the U.S. Bankruptcy Court for the District of Delaware to extend
their exclusive periods to file and solicit acceptances for the
proposed chapter 11 plan until Jan.
28, 2013, and March 28, respectively.
The Debtors explained in their second exclusivity extension that
they need additional time to finalize the global settlement
agreement with the Official Committee of Unsecured Creditors, the
second lien agent and other settlement parties, on the key
remaining disputes in the cases.
About AFA Foods
King of Prussia, Pennsylvania-based AFA Foods Inc. was one of the
largest processors of ground beef products in the United States.
The Company had five processing facilities and two ancillary
facilities across the country with annual processing capacity of
800 million pounds. AFA had seven facilities capable of producing
800 million pound of ground beef annually. Revenue in 2011 was
$958 million.
Yucaipa Cos. acquired the business in 2008 and currently owns 92%
of the common stock and all of the preferred stock.
AFA Foods, AFA Investment Inc. and other affiliates filed for
Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11127) on
April 2, 2012, after recent changes in the market for its ground
beef products and the impact of negative media coverage related to
boneless lean beef trimmings -- BLBT -- affected sales.
Judge Mary Walrath presides over the case. Lawyers at Jones Day
and Pachulski Stang Ziehl & Jones LLP serve as the Debtors'
counsel. FTI Consulting Inc. serves as financial advisors and
Imperial Capital LLC serves as marketing consultants. Kurtzman
Carson Consultants LLC serves as noticing and claims agent.
As of Feb. 29, 2012, on a consolidated basis, the Debtors' books
and records reflected approximately $219 million in assets and
$197 million in liabilities. AFA Foods, Inc., disclosed
$615,859,574 in assets and $544,499,689 in liabilities as of the
Petition Date.
Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven
members to the official committee of unsecured creditors in the
Chapter 11 cases of AFA Investment Inc., AFA Foods and their
debtor-affiliates. The Committee has obtained approval to hire
McDonald Hopkins LLC as lead counsel and Potter Anderson &
Corroon LLP serves as co-counsel. The Committee also obtained
approval to retain J.H. Cohn LLP as its financial advisor, nunc
pro tunc to April 13, 2012.
AFA, in its Chapter 11 case, sold plants and paid off the first-
lien lenders and the loan financing the Chapter 11 effort.
Remaining assets are $14 million cash and the right to file
lawsuits.
General Electric Capital Corp. and Bank of America Corp. provided
about $60 million in DIP financing. The loan was paid off in
July.
In October 2012, the Bankruptcy Court denied a settlement that
would have released Yucaipa Cos., the owner and junior lender to
AFA Foods, from claims and lawsuits the creditors might otherwise
bring, in exchange for cash to pay unsecured creditors' claims
under a liquidating Chapter 11 plan. Under the deal, Yucaipa
would receive $11.2 million from the $14 million, with the
remainder earmarked for unsecured creditors. Asset recoveries
above $14 million would be split with Yucaipa receiving 90% and
creditors 10%. Proceeds from lawsuits would be divided roughly
50-50.
ALLEN SYSTEMS: S&P Cuts CCR to 'D' on Missed Interest Payment
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
ratings on Allen Systems Group Inc. to 'D' from 'CCC-'. "We also
lowered our issue-level rating on its first-lien senior secured
loan to 'CC' from 'CCC+'. The recovery rating on its first-lien
senior secured loan remains at '1', indicating our expectation for
a very high (90% to 100%) recovery in the event of payment
default. In addition, we lowered our issue-level rating on the
senior secured second-lien notes to 'D' from 'CC'. The recovery
rating on these notes is unchanged at '5', reflecting our
expectation for modest recovery (10% to 30%) in the event of a
payment default," S&P said.
"The rating action follows the missed interest payment on the
company's 10.5% senior secured second-lien notes due 2016, which
was due on Nov. 15, 2012," said Standard & Poor's credit analyst
Katarzyna Nolan. "A payment default has not occurred relative to
the legal provisions of the notes, which allow for a 30-day grace
period."
"Under our criteria, however, we consider the extension of a due
payment of interest or principal as tantamount to a default if the
payment falls later than five business days (which was Nov. 15,
2012, for Allen Systems) after the scheduled due date," S&P said.
"Although the company has entered into a commitment letter with
TPG Opportunity Partners that contemplates the full refinancing of
the existing first-lien facility, as well as the payment of the
missed second-lien interest at or before consummation of the
financing, we don't believe that the second-lien interest payment
will occur within five business days after the scheduled due date,
due to the uncertain timing of closing of the financing," S&P
said.
"In addition, the company hasn't been in compliance with its total
leverage, fixed-charge coverage, and minimum liquidity covenants
since June 30, 2012. During October 2012, the company entered into
a forbearance agreement with the required lenders under the credit
agreement. However, the forbearance agreement expired on Nov. 7,
2012," S&P said.
AMERICAN AIRLINES: Supreme Court Lone Avenue to Stop PSA Election
-----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that AMR Corp., the parent of American Airlines Inc., has
only one more shot at stopping passenger-service agents from
holding an election to determine whether they will have a union.
As the result of a ruling Nov. 19 from the U.S. Circuit Court of
Appeals in New Orleans, the U.S. Supreme Court is AMR's only
remaining hope at stopping the election.
The report recounts that the bankrupt airline won a victory in
June when a federal district judge in Dallas ruled that the
National Mediation Board was improperly holding an election by
passenger-service agents because 50% hadn't shown a desire for
union representation. The NMB and the Communications Workers of
America appealed, contending only 35% was required.
According to the report, the U.S. Court of Appeals in New Orleans
sided with the workers in ruling on Oct. 3 that the NMB was
correct in using a 35% threshold. AMR sought rehearing in the
appeals court and lost on Oct. 30. AMR returned to the appeals
court on Nov. 8 asking the circuit judges to hold up the election
while the airline applies to the Supreme Court for permission to
appeal. On Nov. 19, the appeals court decided not to hold up the
election.
Mr. Rochelle notes the airline still has the right to ask the
Supreme Court for a stay while seeking permission to appeal. AMR
contends there are conflicting opinions among the circuit courts
justifying an appeal to the country's highest court.
The Communications Workers, the report relates, said the NMB
scheduled the vote to begin Dec. 4 and continue through Jan. 15.
The union said the airline "spent nearly a year and millions of
dollars trying to block employees' democratic right to vote."
The appeal is American Airlines Inc. v. National Mediation
Board, 12-10680, U.S. Court of Appeals for the Fifth Circuit
(New Orleans).
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).
AMERICAN LASER: Sends Cases to Chapter 7 Liquidation
----------------------------------------------------
Stewart Bishop at Bankruptcy Law360 reports that U.S. Bankruptcy
Judge Mary F. Walrath gave the green light to American Laser
Centers LLC to shift its Chapter 11 bankruptcy to a Chapter 7,
weeks after the company said it didn't have the money to fund a
Chapter 11 reorganization plan.
According to Bankruptcy Law360, Judge Walrath granted Michigan-
based American Laser's move for conversion, saying it appeared
"the relief requested by the motion is in the best interests of
the debtors' estates."
About ALC Holdings
Farmington Hills, Michigan-based ALC Holdings LLC dba American
Laser Centers, and American Laser Skincare, provides laser hair
removal treatments.
The Company and its affiliates filed for Chapter 11 protection
(Bankr. D. Del. Lead Case No. 11-13853) on Dec. 8, 2011.
Bankruptcy Judge Mary F. Walrath handles the case. Landis
Rath & Cobb LLP represents the Debtors in their restructuring
efforts. BMC Group Inc. serves as claims agent; SSG Capital
Advisors, LLC serves as financial advisors; and Traverse, LLC
serves as restructuring crisis manager. MBC Consulting and
Melanie B. Cox serve as interim chief executive officer. Qorval
and Eric Glassman serve as restructuring consultant.
As of Oct. 31, 2011, the Debtors disclosed total assets of
$80.4 million and total liabilities including $40.3 million owing
on a first-lien debt, $51 million in subordinated notes, and
$17.9 million is owing to trade suppliers. American Laser Centers
of California LLC disclosed $20,988,454 in assets and $99,951,866
in liabilities as of the Chapter 11 filing. ALC Holdings LLC
disclosed $14,662 in assets and $93,744,094 in liabilities. The
petitions were signed by Andrew Orr, chief financial officer & VP
corporate operations.
Herrick, Feinstein LLP represents the Official Committee of
Unsecured Creditors. The Committee tapped Ashby & Geddes, P.A. as
Delaware Counsel and J.H. Cohn LLP as its financial advisor.
ARCELORMITTAL SA: Gets $450MM to Exit S. African Mine Venture
-------------------------------------------------------------
Kelly Rizzetta at Bankruptcy Law360 reports that ArcelorMittal SA
on Wednesday walked away from a South African manganese mining
operation it had been steering toward bankruptcy, instead inking
an approximately $450 million deal to transfer its half of the
mining company to the project's founder.
Daphne Mashile-Nkosi, chairwoman of South Africa's Kalahari
Resources Pty. Ltd., which already owns 40 percent of the
manganese miner known as Kalagadi Manganese Pty. Ltd., will soon
have personal control over another 50 percent of the company,
Bankruptcy Law360 relates.
About ArcelorMittal
Luxembourg-based ArcelorMittal -- http://www.arcelormittal.com/
-- is the world's leading steel company, with operations in more
than 60 countries.
ArcelorMittal is the leader in all major global steel markets,
including automotive, construction, household appliances and
packaging, with leading R&D and technology, as well as sizeable
captive supplies of raw materials and outstanding distribution
networks. With an industrial presence in over 20 countries
spanning four continents, the Company covers all of the key steel
markets, from emerging to mature.
In 2008, ArcelorMittal had revenues of $124.9 billion and crude
steel production of 103.3 million tonnes, representing
approximately 10% of world steel output.
ArcelorMittal is listed on the stock exchanges of New York (MT),
Amsterdam (MT), Paris (MT), Brussels (MT), Luxembourg (MT) and on
the Spanish stock exchanges of Barcelona, Bilbao, Madrid and
Valencia (MTS).
AURORA DIAGNOSTICS: S&P Cuts CCR to 'B-' on Lower MEDICARE Rates
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Palm Beach Gardens, Florida-based Aurora Diagnostics
Holdings LLC to 'B-' from 'B'.
"We also lowered our rating on subsidiary Aurora Diagnostics LLC's
senior secured debt to 'B+', two notches above the corporate
credit rating, from 'BB-', and our rating on Aurora Diagnostics
Holdings LLC's senior unsecured debt to 'CCC', two notches below
the corporate credit rating, from 'CCC+'. We affirmed our '1'
recovery rating on the senior secured debt, indicating our
expectation for very high (90% to 100%) recovery of principal, and
our '6' recovery rating on the senior unsecured debt, indicating
our expectation for negligible (0 to 10%) recovery of principal,
both in the event of payment default," S&P said.
"The ratings on Aurora Diagnostics Holdings LLC, a provider of
anatomic pathology (AP) diagnostic services, continue to reflect
the company's "vulnerable" business risk profile (according to our
criteria), unchanged as a result of the CMS decision," S&P said.
"We downgraded the company because we expect the Medicare rate cut
to substantially reduce Aurora's revenues, EBITDA generation, and
cash flow, beginning in 2013 and to hinder its ability to generate
cash over the next few years," said Standard & Poor's credit
analyst Gail Hessol. "We previously expected Aurora to borrow
modestly in 2012 and 2013 to finance large earn-out payments, and
then to resume generating discretionary cash flow after earn-out
payments in 2014."
"The rating outlook is negative, reflecting the possibility that
Aurora's cost-reduction initiatives will not sufficiently offset
the Medicare rate cut and other market pressures, and the
potential for slim headroom under Aurora's loan covenant. We would
consider lowering the rating if liquidity is impaired, evidenced
by a projected loan covenant cushion below 10%, limited revolver
availability, or our belief that after 2013 Aurora could not
generate cash after earn-out payments. We would consider revising
the outlook to stable if Aurora is able to reduce its costs or
take other actions that enable it to generate cash after earn-out
payments, and we expect the covenant cushion to stay above 15%,"
S&P said.
BELLWEST HOLDINGS: Creditors' Proofs of Claim Due Dec. 24
---------------------------------------------------------
Creditors of Bellwest Holdings LLC are required to file their
proofs of claim or proofs of interest by Dec. 24, 2012.
Bellwest Holdings LLC, owner of a property in Surprise, Arizona,
filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 12-20126) on
Sept. 10, 2012, in Tucson. The Debtor, a single asset real estate
under 11 U.S.C. Sec. 101 (51B), estimated assets and debts of
$10 million to $50 million in the petition.
Bankruptcy Judge Eileen W. Hollowell presides over the case. Eric
Slocum Sparks, Esq., at Eric Slocum Sparks PC, in Tucson, Ariz.,
serves as counsel.
BELLWEST HOLDINGS: Court Approves Eric Slocum as Counsel
--------------------------------------------------------
Bellwest Holdings LLC sought and obtained permission from the U.S.
Bankruptcy Court to employ Eric Slocum Sparks, P.C. as counsel for
the Debtor. The firm attests that it is a "disinterested person"
as the term is defined in Section 101(14) of the Bankruptcy Code.
Bellwest Holdings LLC, owner of a property in Surprise, Arizona,
filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 12-20126) on
Sept. 10, 2012, in Tucson. The Debtor, a single asset real estate
under 11 U.S.C. Sec. 101 (51B), estimated assets and debts of $10
million to $50 million in the petition.
Bankruptcy Judge Eileen W. Hollowell presides over the case. Eric
Slocum Sparks, Esq., at Eric Slocum Sparks PC, in Tucson, Ariz.,
serves as counsel.
BELO CORP: S&P Raises CCR to 'BB' on Reduced Debt Leverage
----------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on Dallas-
based TV broadcaster Belo Corp., including the corporate credit
rating, to 'BB' from 'BB-'. "At the same time, we are maintaining
our stable rating outlook on the company," S&P said.
"The rating action reflects our expectation that Belo will reduce
its eight-quarter trailing debt leverage to less than 4x with the
redemption of its 6.75% senior notes at the end of November and
will maintain leverage below 4x over at least the next two years,"
said Standard & Poor's credit analyst Naveen Sarma.
"The rating reflects Belo's geographic and revenue concentration
in Texas, and our assumption that the company's TV stations will
maintain good audience ratings compared with local competitors.
Belo has a 'satisfactory' business risk profile, based on our
criteria, because of its strong local market positions,
diversified network affiliations, and high EBITDA margin. Belo's
financial risk profile is 'significant,' in our view, as we expect
the company to maintain its adjusted debt to latest-eight-quarter
EBITDA ratio at less than 4x. As of Sept. 30, 2012, leverage,
adjusted for pension costs and operating leases, was 4.1x, but
will decline to about 3.6x with the redemption of the 2013 senior
notes and modest draw-down of the $200 million revolver," S&P
said.
"Belo owns 20 TV stations in 15 large and midsize TV markets,
reaching about 14% of U.S. TV households. The company operates
more than one station in six of its markets--a structure that
generates operating efficiencies. Most of Belo's TV stations rank
first or second in audience ratings for their local news
broadcasts. This competitive positioning is important to
attracting political advertising. However, the company's four TV
stations in Texas contribute 41% of total revenue, which we regard
as a geographic concentration risk," S&P said.
BERNARD L. MADOFF: Bro-in-Law Loses Standing Defense to Suit
------------------------------------------------------------
Brian Mahoney at Bankruptcy Law360 reports that U.S. District
Judge Jed Rakoff ruled that Bernard L. Madoff's brother-in-law
cannot use a standing argument in his bid to toss a clawback suit
launched by the trustee liquidating Madoff's investment firm,
saying a bankruptcy court can decide whether the trustee has
standing.
Bankruptcy Law360 relates that Judge Rakoff said that, while the
constitutional standing of trustee Irving Picard is an important
threshold for avoidance and recovery claims, the case against
Madoff's brother-in-law Robert Roman does not present a
sufficiently significant constitutional problem.
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.
BIOFUELS POWER: Delays Form 10-Q for Third Quarter
--------------------------------------------------
Biofuels Power Corp.'s financial statements for the quarter ended
Sept. 30, 2012, are not yet ready for distribution as a result of
recent measures the Company has taken with regard to efforts to
sign operating agreements which will effect subsequent events at
the balance sheet date.
Biofuels Power
Humble, Tex.-based Biofuels Power Corporation is a distributed
energy company that is pioneering the use of biodiesel to fuel
small electric generating facilities that are located in close
proximity to end-users. BPC's first power plant is currently
located near Houston, Texas in the city of Oak Ridge North.
The Company reported a net loss of $1.28 million on $0 of sales in
2011, compared with a net loss of $2.05 million on $0 of sales in
2010.
The Company's balance sheet at June 30, 2012, showed $1.54 million
in total assets, $6.71 million in total liabilities and a $5.16
million total stockholders' deficit.
Following the 2011 results, Clay Thomas, P.C., in Houston, Texas,
expressed substantial doubt about the Company's ability to
continue as a going concern. The independent auditors noted that
the Company has suffered significant losses and will require
additional capital to develop its business until the Company
either (1) achieves a level of revenues adequate to generate
sufficient cash flows from operations; or (2) obtains additional
financing necessary to support its working capital requirements.
BURLINGTON INT'L AIRPORT: Moody's Rates $26.4-Mil. Bonds 'Ba1'
--------------------------------------------------------------
Moody's Investors Service has assigned a Ba1 rating to City of
Burlington's $26.4 million Airport Revenue Refunding Bonds, Series
2012. Concurrently, Moody's has affirmed the Ba1 rating on the
airport's outstanding parity debt. The outlook is negative.
Issue: Airport Revenue Refunding Bonds, Series 2012A (Non-AMT);
Rating: Ba1; Sale Amount: $18,555,000; Expected Sale Date:
11/23/2012; Rating Description: Revenue: Government Enterprise
Issue: Airport Revenue Refunding Bonds, Series 2012B (AMT);
Rating: Ba1; Sale Amount: $7,600,000; Expected Sale Date:
11/23/2012; Rating Description: Revenue: Government Enterprise
Issue: Airport Revenue Refunding Bonds, Series 2012C (Taxable);
Rating: Ba1; Sale Amount: $230,000; Expected Sale Date:
11/23/2012; Rating Description: Revenue: Government Enterprise
Ratings Rationale
The Ba1 rating reflects weakness in the airport's market position
shown by recent enplanement declines as well as its financial
volatility shown in recent years. The rating also recognizes the
airport's diverse carrier base and revenue mix, and improving
liquidity and financial performance. The fundamental strength of
the Burlington economy is incorporated in the rating, coupled with
the lack of direct competition that is likely supportive of future
increased rates and charges at the airport.
Strengths
* Large education and health care presence in City of Burlington,
VT
* Diversity of the airport revenues, including significant
parking and concession revenues aside from airline derived
revenues
* Diversified airline carrier mix that minimizes passenger
diversion to airports in Albany, NY and Manchester, New
Hampshire NH
Challenges
* Volatile financial performance evidenced by debt service
coverage below rate covenant of 1.25x in FY2009 and FY2010
* Low liquidity compared to Moody's airport sector median as
measured by less than 20 days cash on hand in FY2011
* Declining enplanements from FY2010 to FY2012 and further
declines in the first four months of FY2013
Outlook
The negative outlook reflects the airport's continuing enplanement
declines and uncertainty regarding financial performance in the
next 12 months. The outlook also acknowledges the City of
Burlington's negative outlook.
What Could Change the Rating - UP
The rating could be pressured upward if the airport experiences
reliable, sustainable enplanement growth, improves debt service
coverage to above 1.4x (calculated per bond ordinance) on a
sustained basis and is able to restore and maintain liquidity to a
reasonable level. The rating could benefit from the improvement of
liquidity position where the airport no longer requires city
support.
What Could Change the Rating - DOWN
The rating could be pressured downward if liquidity and debt
service coverage falls below current levels, and if leverage
increases are not supported by enplanements. Also, the rating
could face negative pressure if the FAA inquiry regarding possible
grant program violations at the airport have a material impact.
The principal methodology used in this rating was Airports with
Unregulated Rate Setting published in July 2011.
CAMBRIDGE HEART: Incurs $1.1 Million Net Loss in Third Quarter
--------------------------------------------------------------
Cambridge Heart, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $1.07 million on $419,062 of revenue for the three months ended
Sept. 30, 2012, compared with a net loss of $1.29 million on
$474,911 of revenue for the same period a year ago.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss of $4.23 million on $1.43 million of revenue, compared
with a net loss of $4.02 million on $1.65 million of revenue for
the same period during the prior year.
The Company's balance sheet at Sept. 30, 2012, showed $1.25
million in total assets, $5.51 million in total liabilities,
$12.74 million in convertible preferred stock, and a $17 million
total stockholders' deficit.
Commenting on the results of the third quarter and recent events,
Cambridge Heart CEO Ali Haghighi-Mood said, "On a sequential
basis, our revenue in the third quarter declined by 9% compared to
the previous quarter. The decline in revenue and reduction in
expenses in the third quarter were a reflection of the
restructuring of our operations that we announced in July." Mr.
Haghighi-Mood added, "In regards to exploring the Company's
strategic alternatives, we continue to push the process forward
and we'll provide an update as events develop."
As of Nov. 14, 2012, 100,112,960 shares of the Company's common
stock were outstanding. On an as-converted basis, the Company has
124,659,416 shares of common stock issued and outstanding,
including 100,112,960 shares of common stock issued, 4,180,602
shares issuable upon conversion of the Series C-1 Convertible
Preferred Stock and 20,365,854 shares issuable upon conversion of
the Series D Convertible Preferred Stock.
A copy of the Form 10-Q is available for free at:
http://is.gd/R6eziU
About Cambridge Heart
Tewksbury, Mass.-based Cambridge Heart, Inc., is engaged in the
research, development and commercialization of products for the
non-invasive diagnosis of cardiac disease.
In its report on the financial statements for the year ended
Dec. 31, 2011, McGladrey & Pullen, LLP, in Boston, Massachusetts,
expressed substantial doubt about Cambridge Heart's ability to
continue as a going concern. The independent auditors noted that
of the Company's recurring losses, inability to generate positive
cash flows from operations, and liquidity uncertainties from
operations.
The Company reported a net loss of $5.40 million in 2011, compared
with a net loss of $5.17 million in 2010.
CASCADE AG: Court Approves Cairncross & Hempelmann as Counsel
-------------------------------------------------------------
Cascade Ag Services, Inc., sought and obtained approval from the
U.S. Bankruptcy Court to employ Cairncross & Hempelmann, P.S. as
bankruptcy counsel.
Cairncross attorneys John R. Rizzardi, Andrew J. Liese, and
Jessica C. Tsao will lead the engagement.
The Debtor has proposed to pay Mr. Rizzardi, Mr. Liese, and Ms.
Tsao for their services at their standard hourly rates of $475,
$275, and $195, respectively.
In the 90 days prior to the bankruptcy filing, the Debtor paid
Cairncross a total of $86,849 to perform legal services related to
the Debtor's efforts to avoid bankruptcy, and the Debtor's
eventual bankruptcy filing. As of the Petition Date, the Debtor
owed Cairncross $4,743 for legal services rendered solely in
connection with the Debtor's bankruptcy petition. Cairncross does
not claim a security interest in property of the estate to secure
fees.
Cairncross is informed and believes that the source of its
compensation will be the Debtor's own funds. Cairncross said it
holds no funds in trust for the Debtor.
Mr. Rizzardi attests that the firm is a "disinterested person" as
the term is defined in Section 101(14) of the Bankruptcy Code.
About Cascade AG
Cascade AG Services, Inc., dba Pleasant Valley Farms, fdba
Mountain View Produce, Inc., fdba Staffanson Harvesting LLC, fdba
Sterling Investment Group, L.L.C., filed for Chapter 11 bankruptcy
(Bankr. W.D. Wash. Case No. 12-18366) on Aug. 13, 2012. It
scheduled $25,820,499 in assets and $22,255,482 in liabilities.
Lawyers at Cairncross & Hempelmann PS, in Seattle, serve as the
Debtor's counsel. The petition was signed by Craig Staffanson,
president.
The U.S. Trustee appointed seven creditors to the Official
Unsecured Creditors' Committee. Lawrence R. Ream, Esq., at
Schwabe, Williamson & Wyatt PC, Seattle, represents the Committee
as counsel.
DIP lender One PacificCoast Bank, FSB, is represented by Brad T.
Summers, Esq., and David W. Criswell, Esq., at Ball Janik LLP.
CASCADE AG: Hires Hamstreet as Chief Restructuring Officer
----------------------------------------------------------
Cascade AG Services, Inc., sought and obtained approval from the
U.S. Bankruptcy Court to employ Clyde A. Hamstreet & Associates,
LLC, as its chief restructuring officer and financial advisor.
Hamstreet professionals Clyde A. Hamstreet, Gary Lawrence, and
Hannah Schmidt will work on the Debtor's case.
The Debtor has requested that Mr. Hamstreet, Mr. Lawrence, and Ms.
Schmidt be employed to, without limitation:
a. assist the Debtor with information and analysis required
pursuant to the Debtor's postpetition financing; and
b. assist the Debtor with the maintenance of cash management
procedures; and
c. assist the Debtor with respect to identification of core
business assets and, if necessary, disposition of assets or
liquidation of unprofitable operations.
Mr. Hamstreet, Mr. Lawrence, and Ms. Schmidt will be paid for
their services at their standard hourly rates of $500, $360, and
$260, respectively.
The firm attests that it is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
About Cascade AG
Cascade AG Services, Inc., dba Pleasant Valley Farms, fdba
Mountain View Produce, Inc., fdba Staffanson Harvesting LLC, fdba
Sterling Investment Group, L.L.C., filed for Chapter 11 bankruptcy
(Bankr. W.D. Wash. Case No. 12-18366) on Aug. 13, 2012. It
scheduled $25,820,499 in assets and $22,255,482 in liabilities.
Lawyers at Cairncross & Hempelmann PS, in Seattle, serve as the
Debtor's counsel. The petition was signed by Craig Staffanson,
president.
The U.S. Trustee appointed seven creditors to the Official
Unsecured Creditors' Committee. Lawrence R. Ream, Esq., at
Schwabe, Williamson & Wyatt PC, Seattle, represents the Committee
as counsel.
DIP lender One PacificCoast Bank, FSB, is represented by Brad T.
Summers, Esq., and David W. Criswell, Esq., at Ball Janik LLP.
CATASYS INC: Incurs $257,000 Net Loss in Third Quarter
------------------------------------------------------
Catasys, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $257,000 on $140,000 of total revenues for the three months
ended Sept. 30, 2012, compared with a net loss of $2.32 million on
$57,000 of total revenues for the same period during the prior
year.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss of $5.88 million on $362,000 of total revenues, compared
with a net loss of $1.32 million on $207,000 of total revenues for
the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $3.67
million in total assets, $11.88 million in total liabilities and a
$8.21 million total stockholders' deficit.
Bankruptcy Warning
As of Nov. 14, 2012, the Company had a balance of approximately
$657,000 cash on hand. The Company had working capital deficit of
approximately $2.2 million at Sept. 30, 2012. The Company has
incurred significant net losses and negative operating cash flows
since its inception. The Company could continue to incur negative
cash flows and net losses for the next twelve months. The
Company's current cash burn rate is approximately $450,000 per
month, excluding non-current accrued liability payments. The
Company expects its current cash resources to cover expenses into
December 2012, however delays in cash collections, fees, or
unforeseen expenditures, could impact this estimate. The Company
will need to immediately obtain additional capital and there is no
assurance that additional capital can be raised in an amount which
is sufficient for the Company or on terms favorable to its
stockholders, if at all.
"If we do not immediately obtain additional capital, there is a
significant doubt as to whether we can continue to operate as a
going concern and we will need to curtail or cease operations or
seek bankruptcy relief. If we discontinue operations, we may not
have sufficient funds to pay any amounts to stockholders."
A copy of the Form 10-Q is available for free at:
http://is.gd/pIJTwR
About Hythiam, Inc.
Based in Los Angeles, California, Hythiam, Inc., n/k/a Catasys,
Inc., is a healthcare services management company, providing
through its Catasys(R) subsidiary specialized behavioral health
management services for substance abuse to health plans.
In its auditors' report accompanying the consolidated financial
statements for the year ended Dec. 31, 2011, Rose, Snyder & Jacobs
LLP, in Encino, California, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has incurred significant operating
losses and negative cash flows from operations during the year
ended Dec. 31, 2011.
The Company reported a net loss of $8.12 million in 2011, compared
with a net loss of $19.99 million in 2010.
CENGAGE LEARNING: S&P Cuts CCR to 'CCC' on Weak Performance
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Stamford, Conn.-based Cengage Learning Holdings II L.P.
to 'CCC' from 'B-'. The outlook is negative.
"We have lowered our issue-level ratings on the company's debt by
two notches in conjunction with the downgrade. Our recovery
ratings on the company's debt issues remain unchanged," S&P said.
"The downgrade reflects weak operating performance in the fiscal
first quarter ended Sept. 30, 2012, which we expect will continue
over the near term," said Standard & Poor's credit analyst Hal
Diamond.
"The company's senior leverage ratio, as defined in its credit
agreement, increased to 6.72x at Sept. 30, 2012, from 4.78x at
June 30, 2012, precipitously narrowing the EBITDA margin of
compliance to 13% from 38%. We believe Cengage will need to amend
covenants to maintain compliance, based on our expectation that
EBITDA will decline for the remainder of its fiscal year ending
June 30, 2013, and into fiscal 2014. Also, the company has $2.08
billion of low-cost term loans due July 2014, as well as $654
million of long-term public debt due 2015, which are trading at
what we regard as a distressed yield. We believe that the costs of
refinancing would be prohibitive and result in interest coverage
below 1x and negative discretionary cash flow," S&P said.
"Our corporate credit rating on Cengage reflects our expectation
that the company will face difficulty maintaining compliance with
its senior leverage covenant and refinancing its 2014 and 2015
debt maturities. We consider the company's business risk profile
as 'weak' (according to our criteria), based on its eroding
business position in U.S. higher education and professional
training publishing, and competitive obstacles facing this
business. We assess Cengage's financial risk profile as 'highly
leveraged,' reflecting thin interest coverage and low
discretionary cash flow compared with its debt burden, as well as
its hurdles to refinancing," S&P said.
"Cengage is the second largest U.S. college textbook publisher and
lacks the breadth and financial resources of Pearson PLC, the
market leader. However, Cengage has been adversely affected by the
growth of the rental textbook market, which has increased the
availability of discounted used books. Cengage's sales to for-
profit educational institutions are declining, because these
buyers are experiencing enrollment pressures as a result of
regulation that significantly tightens their marketing practices.
In addition, lower funding from state and local governments is
hurting the company's library reference and supplemental
publishing businesses," S&P said.
CHELAN COUNTY: S&P Cuts SPUR on General Obligation Debt to 'BB+'
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term rating
and underlying rating (SPUR) to 'BB+' from 'BBB-' on Chelan County
Public Hospital District No. 1 (Cascade Medical Center), Wash.'s
general obligation (GO) debt. The outlook is stable.
"The rating action reflects our view of the district's weakening
property tax base in 2012, which could complicate its financial
recovery following a major facility upgrade, and its longer-than-
planned process of replacing its CEO, although we understand that
the district made its interim CEO permanent in 2012," said
Standard & Poor's credit analyst Chris Morgan.
The rating further reflects S&P's view of the district's:
-- Potential service demand and tax base fluctuations associated
with a local economy focused on tourism, second homes, and
agriculture;
-- Small operating size, which leaves the hospital vulnerable to
wide revenue swings related to small utilization changes;
-- Financial strain associated with a recently completed
renovation project and upcoming costs associated with a
planned information technology upgrade under consideration;
and
-- Reliance on property taxes to offset operating losses; and
High leverage of 85% long-term debt to capitalization in 2011.
"The stable outlook reflects our view that the recent facility
upgrade has weakened the district's financial position but that
the improvements could also support higher patient volumes and
associated positive effects on operating performance," S&P said.
CHINA TEL GROUP: Delays Third Quarter Form 10-Q for Review
----------------------------------------------------------
VelaTel Global Communications, Inc., formerly known as China
Tel Group Inc., notified the U.S. Securities and Exchange
Commission that it will be delayed in filing its quarterly report
on Form 10-Q for the period ended Sept. 30, 2012. The Company
requires additional time to complete disclosure items and for
review by professional advisors.
About China Tel
Based in San Diego, California, and Shenzhen, China, China Tel
Group, Inc. (OTC BB: CHTL) -- http://www.ChinaTelGroup.com/--
provides high speed wireless broadband and telecommunications
infrastructure engineering and construction services. Through its
controlled subsidiaries, the Company provides fixed telephony,
conventional long distance, high-speed wireless broadband and
telecommunications infrastructure engineering and construction
services. ChinaTel is presently building, operating and deploying
networks in Asia and South America: a 3.5GHz wireless broadband
system in 29 cities across the People's Republic of China with and
for CECT-Chinacomm Communications Co., Ltd., a PRC company that
holds a license to build the high speed wireless broadband system;
and a 2.5GHz wireless broadband system in cities across Peru with
and for Perusat, S.A., a Peruvian company that holds a license to
build high speed wireless broadband systems.
After auditing the 2011 results, Kabani & Company, Inc., in Los
Angeles, California, expressed substantial doubt as to the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has incurred a net loss for the
year ended Dec. 31, 2011, cumulative losses of $254 million since
inception, a negative working capital of $16.4 million and a
stockholders' deficiency of $9.93 million.
The Company reported a net loss of $21.79 million in 2011,
compared with a net loss of $66.62 million in 2010.
The Company's balance sheet at June 30, 2012, showed $15.91
million in total assets, $20.01 million in total liabilities and a
$4.09 million total stockholders' deficiency.
COMMUNICATION INTELLIGENCE: Incurs $1.2 Million Net Loss in Q3
--------------------------------------------------------------
Communication Intelligence Corporation filed with the U.S.
Securities and Exchange Commission its quarterly report on Form
10-Q disclosing a net loss attributable to common stockholders of
$1.17 million on $516,000 of total revenue for the three months
ended Sept. 30, 2012, compared with a net loss attributable to
common stockholders of $1.16 million on $512,000 of total revenue
for the same period during the prior year.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss attributable to common stockholders of $3.83 million on
$1.70 million of total revenue, compared with a net loss
attributable to common stockholders of $4.93 million on $1.11
million of total revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $3.07
million in total assets, $5.11 million in total liabilities and a
$2.03 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/WwQcCG
About Communication Intelligence
Redwood Shores, California-based Communication Intelligence
Corporation is a supplier of electronic signature products and the
recognized leader in biometric signature verification.
In its audit report accompanying the financial statements for
2011, PMB Helin Donovan, LLP, in San Francisco, Calif.,
expressed substantial doubt about Communication Intelligence's
ability to continue as a going concern. The independent auditors
noted that of the Company's significant recurring losses and
accumulated deficit.
The Company reported a net loss of $4.50 million for 2011,
compared with a net loss of $4.16 million for 2010.
COOPERATIVE COMMS: Judge Extends Plan Filing Deadline to March 7
----------------------------------------------------------------
Linda Moss at The (N.J.) Record reports that U.S. Bankruptcy Court
Judge Novalyn Winfield has extended the Cooperative Communications
Inc.'s deadline to file a Chapter 11 plan of reorganization to
March 7, 2013, and solicit acceptances of that plan to July 8,
2013.
According to the report, the company originally had until Nov. 7,
2012, to file a reorganization plan, and until Jan. 7, 2013, to
seek acceptances for it from its creditors.
The report relates Cooperative Communications' lawyer, Ilana
Volkov, said the company's case was complex and that it hadn't had
sufficient time to craft an exit strategy yet.
"Although the debtor's Chapter 11 case is not particularly
complex, the debtor does operate in a heavily regulated and
competitive industry," the report says citing court documents.
"As a result, the debtor has had to navigate several intricate
customer-related issues, such as preserving the confidentiality of
its client information and protecting its client base from
aggressive tactics of competitors. These matters have been
extremely time consuming."
The report relates, in September, Louis Lombardi Jr., the chief
operating officer of Cooperative Communications, said the company
wasn't having financial problems. The company, founded in 1990,
was in a dispute with Verizon Communications Inc., and filed for
Chapter 11 to keep the New York-based telecom giant from cutting
off service to it, Mr. Lombardi said at the time. Cooperative
Communications had come to terms with its creditors, he added.
The report notes Cooperative Communications has been paying its
debts, but needs more time to devise an exit strategy from
bankruptcy protection.
Based Lyndhurst, New Jersey, Cooperative Communications Inc. filed
for Chapter 11 protection on July 10, 2012 (Bankr. D. N.J. Case
No. 12-27319). Judge Novalyn L. Winfield presides over the case.
Ilana Volkov, Esq., at Cole, Schotz, Meisel, Forman & Leonard,
P.A., represents the Debtor. The Debtor both estimated assets and
debts of between $1 million and $10 million.
CULLMAN REGIONAL: Moody's Affirms 'Ba1' Rating on $66MM Bonds
-------------------------------------------------------------
Moody's Investors Service has affirmed the Ba1 rating assigned to
Cullman Regional Medical Center's (CRMC) $66 million of
outstanding Series 2009A bonds. The outlook remains negative.
Summary Ratings Rationale
Affirmation of the Ba1 rating is attributable to CRMC's good
market position as the only hospital in Cullman County and
steadily improving balance sheet reserves over the last few years.
In addition, there is indication that core operating performance
improved in fiscal year (FY) 2012, although bad debt write offs
suppressed reported profitability.
The rating is constrained by a high debt load and below average
operating performance resulting in thin debt service coverage and
relatively high debt-to-cash flow metrics. Maintenance of the
negative outlook, despite some positive trends related to
reimbursement and indication that core operating performance
improved in FY 2012, is due to the inconsistent nature of CRMC's
financial performance, inability to meet budget over the last
several years, and recent negative volume trends.
Strengths
* CRMC is the only hospital in Cullman County and owns all the
available bed licenses following the purchase and closure of
the only competitor in 2009
* CRMC recently qualified for sole community provider status
under Medicare, which is expected to increase Medicare
reimbursement by $3 million annually with no incremental
expense
* Multi-year trend of strengthening balance sheet metrics with
growth in unrestricted cash to $30.3 million by fiscal yearend
(FYE) 2012, equating to 120 days cash on hand; cash-to-debt
remains weak at 43% yet both measures are the strongest they
have been in many years
* Physician stability over the past year, providing some
utilization stability for this small hospital
* Successful affiliation with University of Alabama Hospital (UAB
Hospital) for interventional cardiology services that has
reduced cardiology outmigration and helped keep services at
CRMC
Challenges
* Large write off of accounts receivable that was accumulated
over several years totaling $4 million with $2.3 million
recognized in the statement of operations in FY 2012 and $1.7
million to be recognized in FY 2013
* Two consecutive years of declining patient volumes as measured
by combined inpatient admissions and observation stays; Moody's
notes that the decline has largely been in observation stays,
thereby allowing the organization to maintain admissions at a
consistent level; additionally, acuity levels have declined
* Second year of negative revenue growth with total operating
revenue declining to $92.6 million in FY 2012 from $95.7
million (revenue reported with bad debt as a contra revenue)
* Difficulty meeting budget; CRMC has missed budget in each of
the last several years often resulting in an operating loss
when an operating gain was budgeted
* Very challenging payer mix with high exposure to bad debt and
self-pay
* Small hospital with high debt load resulting in a very high 76%
debt-to-revenue
Outlook
Maintenance of the negative outlook reflects Moody's view that
operating performance remains volatile and has not improved
sufficiently to warrant a stable outlook, while taking into
account the growth in unrestricted cash and improved balance sheet
metrics.
What Could Make The Rating Go UP
Improvement and stabilization of operating performance;
improvement in leverage metrics to a level consistent with an
investment grade rating
What Could Make The Rating Go DOWN
Weak operating performance in FY 2013, further revenue or patient
declines, weakening of balance sheet metrics, additional debt
Principal Methodology Used
The principal methodology used in this rating was Not-For-Profit
Healthcare Rating Methodology published in March 2012.
CYCLONE POWER: Delays Third Quarter Form 10-Q for Review
--------------------------------------------------------
Cyclone Power Technologies, Inc., was unable to file its quarterly
report on Form 10-Q for the period ended Sept. 30, 2012, by the
prescribed date without unreasonable effort or expense because the
Company's financial review with its auditors is in process and has
not been completed. The Company believes that the Quarterly
Report will be completed within the five day extension period
provided under Rule 12b-25 of the Securities Exchange Act of 1934.
About Cyclone Power
Pompano Beach, Fla.-based Cyclone Power Technologies, Inc. (Pink
Sheets: CYPW) is a clean-tech engineering company, whose business
is to develop, commercialize and license its patented Rankine
cycle engine technology for applications ranging from renewable
power generation to transportation. The Company is the successor
entity to the business of Cyclone Technologies LLLP, a limited
liability limited partnership formed in Florida in June 2004.
Cyclone Technologies LLLP was the original developer and
intellectual property holder of the Cyclone engine technology.
The Company reported a net loss of $23.70 million in 2011,
compared with a net loss of $2.02 million in 2010.
In its audit report for the year ended Dec. 31, 2011, results,
Mallah Furman, in Fort Lauderdale, FL, noted that the Company's
dependence on outside financing, lack of sufficient working
capital, and recurring losses raises substantial doubt about its
ability to continue as a going concern.
DAIS ANALYTIC: Incurs $328,690 Net Loss in Third Quarter
--------------------------------------------------------
Dais Analytic Corporation filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $328,690 on $849,469 of revenue for the three months
ended Sept. 30, 2012, compared with a net loss of $895,384 on
$625,949 of revenue for the same period during the prior year.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss of $46,936 on $2.53 million of revenue, compared with a
net loss of $3.38 million on $2.60 million of revenue for the same
period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $1.08
million in total assets, $6.02 million in total liabilities and a
$4.94 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/jb7xvE
About Dais Analytic
Odessa, Fla.-based Dais Analytic Corporation has developed and
patented a nano-structure polymer technology, which is being
commercialized in products based on the functionality of these
materials. The initial product focus of the Company is ConsERV,
an energy recovery ventilator. The Company also has new product
applications in various developmental stages.
In the auditors' report accompanying the financial statements for
year ended Dec. 31, 2011, Cross, Fernandez & Riley LLP, in
Orlando, Florida, expressed substantial doubt about the Company's
ability to continue as a going concern. The independent auditors
noted that the Company has incurred significant losses since
inception and has a working capital deficit and stockholders'
deficit of $3.22 million and $4.90 million at Dec. 31, 2011.
The Company reported a net loss of $2.33 million in 2011,
compared with a net loss of $1.43 million in 2010.
DANCEHALL LLC: Proofs of Claim Due April 7
-----------------------------------------------
Creditors of Dancehall, LLC, are required to file proofs of claim
by April 7, 2013. Governmental entities are also subject to the
April 7 bar date.
The U.S. Trustee was scheduled to convene a meeting of creditors
pursuant to 11 U.S.C. 341(a) on Nov. 15, 2012.
Creditors allegedly owed in excess of $160,000 in the aggregate on
account of a prepetition loan, filed an involuntary Chapter 11
petition against Niskayuna, New York-based Dancehall, LLC (Bankr.
N.D.N.Y. Case No. 12-11696) on June 22, 2012. The petitioning
creditors are Carl Florio, Daniel J. Hogarty, Jr., E. Stewart
Jones, Jr., Alexander Keeler, John Murray, Michael Nahl, John
Nigro, Daniel Nolan, James T. O'Hearn, and Peter E. Platt. They
are represented by Peter A. Pastore, Esq., at McNamee, Lochner,
Titus & Williams, PC, as counsel.
DDR CORP: Fitch Affirms Low Ratings on Several Sr. Unsecured Loans
------------------------------------------------------------------
Fitch Ratings has revised the Rating Outlook on DDR Corp. (NYSE:
DDR) to Positive from Stable. In addition, Fitch affirmed the
following credit ratings of DDR:
-- Issuer Default Rating (IDR) at 'BB+';
-- Senior unsecured revolving credit facilities at 'BB+';
-- Senior unsecured term loans at 'BB+';
-- Senior unsecured notes at 'BB+';
-- Senior unsecured convertible notes at 'BB+';
-- Preferred stock at 'BB-'.
The Positive Outlook reflects Fitch's expectation that DDR's
credit profile will improve to a level consistent with a 'BBB-'
IDR over the next 12-24 months. The Outlook reflects the
expansion of net operating income from a prime shopping center
portfolio, a granular roster of retailer tenants that are well
positioned entering the holiday season, and a fixed-charge
coverage ratio that is expected to sustain at levels appropriate
for the 'BBB-' rating due to upward leasing spreads and joint
venture cash flow growth. The Outlook also takes into account the
company's good access to capital on increasingly favorable terms,
and adequate liquidity position including a large unencumbered
pool. Leverage remains consistent with a 'BB+' rating, although
Fitch anticipates that DDR's management team will continue to
utilize equity issuance and retained cash flow from organic growth
and redevelopment to reduce leverage to a level consistent with a
'BBB-' IDR.
The prime portfolio, which consists of assets in higher barrier to
entry markets with strong household income profiles, represented
89.3% of total net operating income in third quarter 2012 (3Q'12),
up from 81.6% at the beginning of 2010 and 70.0% at the beginning
of 2009. DDR continues to acquire prime assets on balance sheet
and in joint ventures while selling non-prime assets, and Fitch
expects this strategy of portfolio recycling to continue going
forward.
A strong tenant roster further evidences high-quality cash flow.
As of Sept. 30, 2012, top tenants by base rental revenue were Wal-
Mart Stores, Inc. (3.1% of rental revenues, Fitch IDR of 'AA' with
a Stable Outlook), TJX Companies (2.5%), PetSmart (2.2%), Bed Bath
& Beyond (2.2%), and Kohl's Corporation (2.1%, Fitch IDR of 'BBB+'
with a Stable Outlook). For 2012 year-to-date, weighted average
lease terms were 8.3 years on new leases and 5.3 years on
renewals, signaling cash flow stability absent tenant
bankruptcies. Fitch's most recent U.S. Retail Stats Quarterly
report noted generally steady operating and credit trends across
the U.S. retail sector.
Fixed-charge coverage continues to improve and was 2.0x in 3Q'12,
up from 1.9x in 2Q'12, 1.8x in 1Q'12 and 1.7x in 2011. 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 total interest incurred
and preferred stock dividends.
New supply is limited, resulting in improved property-level
fundamentals. Same-store net operating income (NO)I grew by 3.7%
in 3Q'12, 3.1% in 2Q'12 and 2.3% in 1Q'12 due to continued
positive leasing spreads of 7.0% in 3Q'12, 6.8% in 2Q'12 and 6.4%
in 1Q'12, coupled with occupancy gains. Recent same-store NOI
results exceeded the 10-year average of 1.5% from 2002-2011 and
contributed towards the improvement in coverage.
Additionally, DDR's 2012 joint venture with Blackstone Real Estate
Partners VII and growth in Sonae Sierra Brasil BV Sarl
distributions resulted in recurring unconsolidated entity cash
flow to DDR of $37.3 million annually, more than 2x levels
achieved in 2011 and bolstering corporate earnings power going
forward.
Fitch anticipates that low same-store NOI growth as well as
incremental earnings from re-development will result in fixed-
charge coverage sustaining in the low 2x range, which is
appropriate for a 'BBB-' rating. In a stress case not anticipated
by Fitch in which DDR's results revert to 2009 levels, coverage
would fall below 2x, which would be more consistent with a 'BB+'
rating.
DDR's funding profile is strong. As of Sept. 30, 2012, the
company had no unsecured debt maturities through May 2015. The
debt maturity schedule as of Sept. 30, 2012 had 0.4% of pro rata
debt maturing in 4Q'12, 8.1% maturing in 2013, and 7.1% maturing
in 2014. Notably, the weighted average debt duration is
approximately 5 years as of Sept. 30, 2012, indicating appropriate
long-term asset and liability matching.
Capital access remains solid as demonstrated by the June 2012
issuance of $300 million 4.625% senior unsecured notes due 2022
priced to yield 4.865% to maturity, or 325 basis points over the
benchmark treasury rate, and the July 2012 issuance of $200
million 6.5% class J preferred stock.
DDR has an adequate liquidity position with liquidity coverage,
defined as liquidity sources divided by liquidity uses, of 1.4x
for the period from Oct. 1, 2012 to Dec. 31, 2014. Liquidity
sources include unrestricted cash, availability under the
company's unsecured revolving credit facilities, and projected
retained cash flows from operating activities after dividends and
distributions. Liquidity uses include pro rata debt maturities
pro forma for expected refinancings prior to year-end and
projected recurring capital expenditures and redevelopment
expenditures. Assuming a 75% refinance rate on upcoming secured
debt maturities, liquidity coverage would be strong at 3.6x.
DDR also has contingent liquidity from a large unencumbered
property pool that is consistent with a 'BB+' rating.
Unencumbered properties valued at an 8% capitalization rate and a
50% haircut on unencumbered land covered unsecured debt by 1.7x as
of Sept. 30, 2012 pro forma for expected refinancings prior to
year-end. A haircut on land is conservative given impairments
incurred on DDR's land during previous years. The covenants in
the company's debt agreements do not restrict financial
flexibility.
Current leverage is consistent with a 'BB+' rating, with net debt
to recurring operating EBITDA of 7.5x as of Sept. 30, 2012
compared with 8.2x as of Dec 31, 2011 and 8.6x as of Dec. 31,
2010. Organic EBITDA growth and equity-funded acquisitions have
resulted in declines in leverage. However, Fitch anticipates that
favorable fundamentals and continued ATM utilization will push
leverage below 7x over the next 12-to-24 months, which is
appropriate for a 'BBB-' rating. In a stress case not anticipated
by Fitch in which DDR's results revert to 2009 levels, leverage
would sustain above 7x, which would be more consistent with a
'BB+' rating.
The two-notch differential between DDR's IDR and preferred stock
rating is consistent with Fitch's criteria for corporate entities
with an IDR of 'BB+'. Based on Fitch research on 'Treatment and
Notching of Hybrids in Nonfinancial Corporates and REIT Credit
Analysis' dated Dec. 15, 2011, these securities are deeply
subordinated and have loss absorption elements that would likely
result in poor recoveries in a corporate default.
The Positive Outlook reflects Fitch's expectation that the
portfolio will remain almost entirely prime, coverage will sustain
above 2.0x, leverage will sustain below 7.0x, and unencumbered
asset coverage will sustain above 2.0x.
The following factors may result in an IDR upgrade to 'BBB-':
-- Fitch's expectation of fixed-charge coverage sustaining above
2.0x (coverage was 2.0x in 3Q'12);
-- Fitch's expectation of leverage sustaining below 7.0x
(leverage was 7.5x as of Sept. 30, 2012);
-- Fitch's expectation of unencumbered asset coverage of
unsecured debt sustaining above 2.0x (unencumbered assets -
valued as unencumbered NOI for the trailing 12 months ended
Sept. 30, 2012 divided by a stressed capitalization rate of
8% plus a 50% haircut to land - to unsecured debt was 1.7x).
The following factors may have a negative impact on DDR's ratings
and/or Outlook:
-- Fitch's expectation of fixed-charge coverage sustaining below
1.8x;
-- Fitch's expectation of leverage sustaining above 8.5x;
-- Base case liquidity coverage sustaining below 1.0x.
DELTA PETROLEUM: Trustee Objects to Akin Gump's $1MM Fee Request
----------------------------------------------------------------
Brian Mahoney at Bankruptcy Law360 reports that the recovery
trustee of Delta Petroleum Corp. on Tuesday asked a Delaware
bankruptcy judge to reduce the compensation for the official
committee of unsecured creditors' co-counsel Akin Gump Strauss
Hauer & Feld LLP, saying the firm's $1 million fees request was
excessive and unreasonable.
Bankruptcy Law360 relates that John T. Young Jr., trustee for the
Delta Petroleum General Recovery Trust, said that the official
creditors committee was appointed relatively late in Delta's
bankruptcy, meaning that the firm didn't perform the "watchdog"
role typical of Chapter 11 committee firms.
About Delta Petroleum
Delta Petroleum Corporation (NASDAQ: DPTR) is an independent oil
and gas company engaged primarily in the exploration for, and the
acquisition, development, production, and sale of, natural gas and
crude oil. Natural gas comprises over 90% of Delta's production
services. The core area of its operations is the Rocky Mountain
Region of the United States, where the majority of the proved
reserves, production and long-term growth prospects are located.
Delta and seven of its subsidiaries sought Chapter 11 bankruptcy
protection (Bankr. D. Del. Case Nos. 11-14006 to 11-14013,
inclusive) on Dec. 16, 2011, roughly six weeks before the Jan. 31,
2012 scheduled maturity of its $38.5 million secured credit
facility with Macquarie Bank Limited and after several months of
unsuccessful attempts to sell the business. Delta disclosed
$375,498,248 in assets and $310,679,157 in liabilities, which also
include $152,187,500 in outstanding obligations on account of the
7% senior unsecured notes issued in March 2005 with US Bank
National Association indenture trustee; and $115,527,083 in
outstanding obligations on account of 3-3/4% Senior Convertible
Notes due 2037 issued in April 2007. In its amended schedules,
the Delta Petroleum disclosed $373,836,358 in assets and
$312,864,788 in liabilities.
W. Peter Beardsley, Esq., Christopher Gartman, Esq., Kathryn A.
Coleman, Esq., and Ashley J. Laurie, Esq., at Hughes Hubbard &
Reed LLP, in New York, N.Y., represent the Debtors as counsel.
Derek C. Abbott, Esq., Ann C. Cordo, Esq., and Chad A. Fights,
Esq., at Morris, Nichols, Arsht & Tunnel LLP, in Wilmington, Del.,
represent the Debtors as co-counsel. Conway Mackenzie is the
Debtors' restructuring advisor. Evercore Group L.L.C. is the
financial advisor and investment banker. The Debtors selected
Epiq Bankruptcy Solutions, LLC as claims and noticing agent. The
petition was signed by Carl E. Lakey, chief executive officer and
president.
Delta Petroleum won confirmation of its reorganization plan at a
hearing on Aug. 15. Laramie Energy II LLC is the plan sponsor.
Delta Petroleum emerged from bankruptcy as Par Petroleum
Corporation. At closing, Laramie and Par Petroleum contributed
their respective assets in Mesa and Garfield counties, Colorado,
to form a new joint venture called Piceance Energy, LLC. Laramie
and Par Petroleum hold 66.66% and 33.34% ownership interests in
Piceance Energy, respectively
The Company reported a net loss of $470.04 in 2011, a net loss of
$194.01 million in 2010, and a net loss of $349.68 million in
2009.
DESERT HAWK: Incurs $281,500 Net Loss in Third Quarter
------------------------------------------------------
Desert Hawk Gold Corp. filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $281,522 on $0 of concentrate sales for the three months ended
Sept. 30, 2012, compared with a net loss of $750,202 on $18,442 of
concentrate sales for the same period during the prior year.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss of $2.36 million on $0 of concentrate sales, compared
with a net loss of $4.23 million on $903,022 of concentrate sales
for the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $1.43
million in total assets, $6.84 million in total liabilities and a
$5.40 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/D5BD1w
About Desert Hawk
Desert Hawk Gold Corp., an exploration stage company, engages in
the acquisition and exploration of mineral properties. The
company has interests in 334 unpatented claims, including the
unpatented mill site claim, 42 patented claims, and 5 Utah state
mineral leases located on state trust lands covering approximately
33 square miles in the Gold Hill Mining District in Tooele County,
Utah. It also holds eight unpatented mining claims in Yavapai
County, Arizona. The company was formerly known as Lucky Joe
Mining Company and changed its name to Desert Hawk Gold Corp. in
April 2009. Desert Hawk Gold Corp. was incorporated in 1957 and
is based in Spokane, Washington.
Desert Hawk reported a net loss of $4.77 million in 2011,
following a net loss of $2.85 million in 2010. Desert Hawk
reported a net loss of $1.44 million for the three months ended
June 30, 2012, compared with a net loss of $2.56 million for the
same period during the prior year.
DeCoria, Maichel & Teague, PS, in Spokane, Washington, issued a
"going concern" qualification on the consolited financial
statements for the hear ended Dec. 31, 2011. The independent
auditors noted that the Company has an accumulated deficit through
Dec. 31, 2011, which raises substantial doubt about its ability to
continue as a going concern.
DR TATTOFF: Incurs $603,640 Net Loss in Third Quarter
-----------------------------------------------------
Dr. Tattoff, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $603,640 on $904,216 of revenue for the three months ended
Sept. 30, 2012, compared with a net loss of $516,579 on $700,258
of revenue for the same period during the prior year.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss of $1.74 million on $2.45 million of revenue, compared
with a net loss of $1.75 million on $2.07 million of revenue for
the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $2.54
million in total assets, $2.64 million in total liabilities and a
$105,114 total shareholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/e647pN
About Dr. Tattoff
Beverly Hills, Calif.-based Dr. Tattoff, Inc., currently operates
or provides management services to five laser tattoo and hair
removal clinics located in Texas and California, all of which
operate under the Company's registered trademark "Dr. Tattoff."
As reported in the TCR on April 9, 2012, SingerLewak LLP, in Los
Angeles, Calif., expressed substantial doubt about Dr. Tattoff's
ability to continue as a going concern, following the Company's
results for the fiscal year ended Dec. 31, 2011. The independent
auditors noted that the Company has suffered recurring losses and
negative cash flows from operations, and has an accumulated
deficit of approximately $4,568,000 at Dec. 31, 2011.
EAST COAST DIVERSIFIED: Delays Form 10-Q for Third Quarter
----------------------------------------------------------
East Coast Diversified Corporation notified the U.S. Securities
and Exchange Commission it will be delayed in filing its quarterly
report on Form 10-Q for the period ended Sept. 30, 2012. The
Company said the compilation, dissemination and review of the
information required to be presented in the Form 10-Q for the
relevant period has imposed time constraints that have rendered
timely filing of the Form 10-Q impracticable without undue
hardship and expense to the registrant. The Company undertakes
the responsibility to file such report no later than five days
after its original prescribed due date.
About East Coast Diversified
East Coast Diversified Corporation, headquartered in Marietta,
Georgia, through its majority owned subsidiary, EarthSearch
Communications International, Inc., offers a portfolio of GPS
devices, RFID interrogators, integrated GPS/RFID technologies and
Tag designs.
As reported in the TCR on April 20, 2012, Drake & Klein CPAs, in
Clearwater, Fla., expressed substantial doubt about East Coast
Diversified'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 not generated
revenue and has not established operations.
The Company's balance sheet at June 30, 2012, showed $2.49 million
in total assets, $3.15 million in total liabilities, $1.10 million
in contingent acquisition liabilities, $709,122 in amounts payable
in common stock, $381,835 in derivative liability, and a $2.85
million total stockholders' deficit.
EAT AT JOE'S: Incurs $144,700 Net Loss in Third Quarter
-------------------------------------------------------
Eat at Joe's Ltd. filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $144,654 on $269,570 of revenue for the three months ended
Sept. 30, 2012, compared with a net loss of $199,679 on $400,967
of revenue for the same period during the prior year.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss of $166,436 on $872,042 of revenue, compared with a net
loss of $187,750 on $735,940 of revenue for the same period a year
ago.
The Company reported a net loss of $152,900 in 2011, compared with
a net loss of $621,800 in 2010.
The Company's balance sheet at Sept. 30, 2012, showed $1.25
million in total assets, $4.86 million in total liabilities and a
$3.60 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/jAcv00
About Eat at Joe's
Scarsdale, N.Y.-based Eat at Joe's, Ltd., presently owns and
operates one theme restaurant located in Philadelphia,
Pennsylvania.
In its audit report for the 2011 results, Robison, Hill & Co., in
Salt Lake City, Utah, noted that the Company has suffered
recurring losses from operations and has a net capital deficiency
that raise substantial doubt about its ability to continue as a
going concern.
EGPI FIRECREEK: Delays Form 10-Q for Third Quarter
--------------------------------------------------
EGPI Firecreek, Inc., is delayed in filing its quarterly report on
Form 10-Q for the quarter ended Sept. 30, 2012, in order to enable
its independent registered public accounting firm to complete its
review of the Company's financial statements to be contained in
the Report and for XBRL processing requirements.
About EGPI Firecreek
Scottsdale, Ariz.-based EGPI Firecreek, Inc. (OTC BB: EFIR) was
formerly known as Energy Producers, Inc., an oil and gas
production company focusing on the recovery and development of oil
and natural gas.
The Company has been focused on oil and gas activities for
development of interests held that were acquired in Texas and
Wyoming for the production of oil and natural gas through Dec. 2,
2008. Historically in its 2005 fiscal year, the Company initiated
a program to review domestic oil and gas prospects and targets.
As a result, EGPI acquired non-operating oil and gas interests in
a project titled Ten Mile Draw located in Sweetwater County,
Wyoming for the development and production of natural gas. In
July 2007, the Company acquired and began production of oil at the
2,000 plus acre Fant Ranch Unit in Knox County, Texas. This was
followed by the acquisition and commencement in March 2008 of oil
and gas production at the J.B. Tubb Leasehold Estate located in
the Amoco Crawar Field in Ward County, Texas.
The Company reported a net loss of $4.97 million in 2011, compared
with a net loss of $4.48 million in 2010.
The Company's balance sheet at June 30, 2012, showed $2.57 million
in total assets, $6.42 million in total liabilities, all current,
$1.86 million in series D preferred stock, and a $5.71 million
total shareholders' deficit.
In its audit report for the 2011 results, M&K CPAS, PLLC, in
Houston, Texas, noted that the Company has suffered recurring
losses and negative cash flows from operations that raise
substantial doubt about its ability to continue as a going
concern.
ELITE PHARMACEUTICALS: Posts $1.04-Mil. Profit in Sept. 30 Qtr.
---------------------------------------------------------------
Elite Pharmaceuticals, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
net income attributable to common shareholders of $1.04 million on
$634,517 of total revenues for the three months ended Sept. 30
,2012, compared with net income attributable to common
shareholders of $13.91 million on $274,132 of total revenues for
the same period during the prior year.
For the six months ended Sept. 30, 2012, the Company reported a
net loss attributable to common shareholders of $9.47 million on
$1.21 million of total revenues, compared with a net loss
attributable to common shareholders of $16.81 million on $1.26
million of total revenues for the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $10.07
million in total assets, $31.87 million in total liabilities and a
$21.80 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/0t9akL
About Elite Pharmaceuticals
Northvale, New Jersey-based Elite Pharmaceuticals, Inc., is a
specialty pharmaceutical company principally engaged in the
development and manufacture of oral, controlled-release products,
using proprietary technology and the development and manufacture
of generic pharmaceuticals. The Company has one product,
Phentermine 37.5mg tablets, currently being sold commercially.
Elite Pharmaceuticals reported a net loss attributable to common
shareholders of $15.05 million for the year ended March 31, 2012,
compared with a net loss attributable to common shareholders of
$13.58 million during the prior year.
Demetrius & Company, L.L.C., in Wayne, New Jersey, issued a "going
concern" qualification on the consolidated financial statements
for the year ended March 31, 2012, citing significant losses
resulting in a working capital deficiency and shareholders'
deficit, which raise substantial doubt about the Company's ability
to continue as a going concern.
ELPIDA MEMORY: ITC Judge Allows Nanya to End DRAM IP Case
---------------------------------------------------------
Eric Hornbeck at Bankruptcy Law360 reports that a U.S.
International Trade Commission judge said that Nanya Technology
Corp. could terminate its investigation into insolvent Elpida
Memory Inc. over four dynamic random access memory patents, citing
Micron Technology Inc.'s proposed acquisition of Elpida.
About Elpida Memory
Elpida Memory Inc. (TYO:6665) -- http://www.elpida.com/ja/-- is
a Japan-based company principally engaged in the development,
design, manufacture and sale of semiconductor products, with a
focus on dynamic random access memory (DRAM) silicon chips. The
main products are DDR3 SDRAM, DDR2 SDRAM, DDR SDRAM, SDRAM,
Mobile RAM and XDR DRAM, among others. The Company distributes
its products to both domestic and overseas markets, including the
United States, Europe, Singapore, Taiwan, Hong Kong and others.
The company has eight subsidiaries and two associated companies.
After semiconductor prices plunged, Japan's largest maker of DRAM
chips filed for bankruptcy in February with liabilities of 448
billion yen ($5.6 billion) after losing money for five quarters.
Elpida Memory and its subsidiary, Akita Elpida Memory, Inc.,
filed for corporate reorganization proceedings in Tokyo District
Court on Feb. 27, 2012. The Tokyo District Court immediately
rendered a temporary restraining order to restrain creditors from
demanding repayment of debt or exercising their rights with
respect to the company's assets absent prior court order.
Atsushi Toki, Attorney-at-Law, has been appointed by the Tokyo
Court as Supervisor and Examiner in the case.
Elpida Memory Inc. sought the U.S. bankruptcy court's recognition
of its reorganization proceedings currently pending in Tokyo
District Court, Eight Civil Division. Yuko Sakamoto, as foreign
representative, filed a Chapter 15 petition (Bankr. D. Del. Case
No. 12-10947) for Elpida on March 19, 2012.
ELPIDA MEMORY: U.S. Judge to Review Rambus Patent Deals
-------------------------------------------------------
Peg Brickley, writing for The Wall Street Journal, reports Judge
Christopher Sontchi on Friday ruled he will take a second look at
patent deals that Elpida Memory Inc., based in Japan, cut with
Rambus Inc. of the U.S. The patent arrangements were earlier
approved by the Japanese court that is supervising Elpida's
restructuring.
The report recounts Elpida had argued that Judge Sontchi was bound
to go along with what the Tokyo court had to say on the patent
arrangement. Lawyers for Elpida cited the principle of comity, or
courtesy between the courts of different countries.
According to the report, Judge Sontchi said the U.S. bankruptcy
law that is safeguarding Elpida's U.S. assets while it works out
its financial troubles in Japan doesn't bind him to automatically
go along with the Japanese courts on matters involving assets
within U.S. borders. The judge said he is bound to evaluate the
patent sale by applying U.S. law instead of just endorsing the
Rambus arrangement because the Japanese court had approved it.
Elpida is seeking to sell itself to Micron Technology Inc. for
$2.5 billion. Disgruntled bondholders have been trying to block
the deal.
According to the report, Elpida didn't respond Monday to an
inquiry about whether it intended to appeal the decision. U.S.-
based Micron also didn't respond to a request for comment.
Ms. Brickley also reports that the Tokyo court in October cleared
the way for creditors to vote on Elpida's restructuring plan,
which depends on the sale to Micron. A rival bondholder proposal
that would have offered voting creditors a second option failed to
clear the Tokyo court. Voting will continue until Feb. 26. If
Elpida gets enough support for its plan, it will then ask the
Tokyo court for final approval.
The report notes bondholder attorney Christopher Shore of White &
Case LLP said at a court hearing that review of the sale documents
indicates there will be no deal with Micron if the U.S. assets are
tied up in the U.S. Bankruptcy Court.
About Elpida Memory
Elpida Memory Inc. (TYO:6665) -- http://www.elpida.com/ja/-- is
a Japan-based company principally engaged in the development,
design, manufacture and sale of semiconductor products, with a
focus on dynamic random access memory (DRAM) silicon chips. The
main products are DDR3 SDRAM, DDR2 SDRAM, DDR SDRAM, SDRAM,
Mobile RAM and XDR DRAM, among others. The Company distributes
its products to both domestic and overseas markets, including the
United States, Europe, Singapore, Taiwan, Hong Kong and others.
The company has eight subsidiaries and two associated companies.
After semiconductor prices plunged, Japan's largest maker of DRAM
chips filed for bankruptcy in February with liabilities of 448
billion yen ($5.6 billion) after losing money for five quarters.
Elpida Memory and its subsidiary, Akita Elpida Memory, Inc.,
filed for corporate reorganization proceedings in Tokyo District
Court on Feb. 27, 2012. The Tokyo District Court immediately
rendered a temporary restraining order to restrain creditors from
demanding repayment of debt or exercising their rights with
respect to the company's assets absent prior court order.
Atsushi Toki, Attorney-at-Law, has been appointed by the Tokyo
Court as Supervisor and Examiner in the case.
Elpida Memory Inc. sought the U.S. bankruptcy court's recognition
of its reorganization proceedings currently pending in Tokyo
District Court, Eight Civil Division. Yuko Sakamoto, as foreign
representative, filed a Chapter 15 petition (Bankr. D. Del. Case
No. 12-10947) for Elpida on March 19, 2012.
ENNIS COMMERCIAL: Owner Seeks to Convert Own Case to Ch. 7
----------------------------------------------------------
Ben A. Ennis has asked the Bankruptcy Court to convert his Chapter
11 case to a liquidation in Chapter 7. Mr. Ennis said it has
become obvious that there is no likelihood for rehabilitation.
The best interests of creditors and the estate will be best served
if the case proceeds under Chapter 7.
Meanwhile, Mr. Ennis filed amended schedules of assets and
liabilities. He disclosed assets just totaling $3.19 million and
liabilities of $135.6 million, of which $38 million is secured.
About Ennis Commercial
Porterville, California-based Ennis Commercial Properties, LLC's
business consists of acquiring raw land and building commercial
developments. The Company then either operates or sells the
commercial buildings comprising the commercial development.
ECP is owned by Ben Ennis, Brian Ennis and Pamela Ennis, in equal
shares. On Sept. 20, 2010, Pam Ennis and Brian Ennis transferred
all of their ownership interests in ECP to Ben Ennis. ECP filed
for Chapter 11 bankruptcy protection (Bankr. E.D. Calif. Case No.
10-12709) on March 16, 2010.
Peter L. Fear, Esq., and Gabriel J. Waddell, Esq., at the Law
Offices of Peter L. Fear, in Fresno, Calif., represent ECP as
counsel. No creditors committee has been formed in the case.
In its schedules, the Debtor disclosed $40,878,319 in assets and
$43,922,485 in liabilities.
Ben Ennis filed a voluntary petition under Chapter 11 (Bankr. E.D.
Calif. Case No. 10-62315) on Oct. 25, 2010.
On May 25, 2011, Terence Long was appointed as Chapter 11 Trustee
in the Benn Ennis bankruptcy. Consequently, the Chapter 11
Trustee stands in the shoes of Ben Ennis, and holds all of the
membership interests in ECP and controls it accordingly. Justin
D. Harris, Esq., at Motschiedler, Michaelides, Wishon, Brewer &
Ryan, LLP, in Fresno, represents the Chapter 11 Trustee as
counsel.
ETOWAH VALLEY: Files for Chapter 11 Bankruptcy Protection
---------------------------------------------------------
Reach Weaver at blueridgenow.com reports that Etowah Valley
Country Club and Golf Lodge, family owned since 1967, was forced
to file Chapter 11 bankruptcy in a fight to save the business from
the blows of the recession and lackluster economic recovery.
According to the report, the club was up for sale last year, but
there weren't a lot of people buying golf courses, said Frank Todd
Jr., who co-owns the club with his siblings. Not many people are
buying golf memberships either -- a lack of revenue that has
crippled the business. In the light of soaring food and gas
prices, club members, like developers, have had to cut back on
luxury expenses, the report says.
The report relates Mr. Todd still hopes they will come out of it
stronger. Etowah Valley Country Club is still open. The 240-acre
property hosts a 27-hole championship golf course, which gives
golfers a choice of nine-hole courses to play. The club offers a
75-unit lodge for travelers, dining room, clubhouse, croquet field
and state-of-the-art tennis courts.
The report notes Mr. Todd said income at the club has been cut in
half since the recession began. "We've cut a lot of expenses, but
we have not been able to overcome the lack of revenue," he added.
The report says the lack of revenue has forced the company to
temporarily lay off some of its 75 employees.
EXTENDED STAY: Buyout Group to Sell $3.5 Billion in Debt
--------------------------------------------------------
Al Yoon and Kris Hudson, writing for The Wall Street Journal,
report that Centerbridge Partners, Paulson & Co. and Blackstone
Group BX, the investment group that acquired the Extended Stay
America hotel chain out of bankruptcy, are preparing to sell $3.5
billion in total debt to refinance the 663-hotel chain that they
bought in 2010. The group plans to put about $700 million of the
proceeds in their pockets and use most of the rest to replace
existing debt.
According to the report, the Extended Stay buyout group is
planning to raise $2.5 billion through the commercial mortgage-
backed securities market. The group also is hoping to capitalize
on the growing demand for high-yield debt by raising $1 billion in
so-called mezzanine debt, which is a riskier investment because
it's backed by the owners' equity rather than the properties
themselves. Deutsche Bank, J.P. Morgan Chase & Co., Goldman Sachs
Group Inc., Citigroup, and Bank of America Merrill Lynch have been
approached about buying junior pieces of this mezzanine debt,
according to three people briefed on the deal, WSJ says.
Sources also told WSJ that Extended Stay's owners may take the
unusual step of trying to securitize the most senior portion of
the mezzanine debt.
The report recounts the trio purchased Extended Stay for roughly
$4.2 billion after prevailing at a May 2010 bankruptcy auction
over a group led by Starwood Capital. The buyers then financed
their purchase partly with $2.7 billion of debt and put in about
$1.5 billion in equity.
About Extended Stay
Extended Stay is the largest owner and operator of mid-price
extended stay hotels in the United States, holding one of the most
geographically diverse portfolios in the lodging sector with
properties located across 44 states (including 11 hotels located
in New York) and two provinces in Canada. As a result of
acquisitions and mergers, Extended Stay's portfolio has expanded
to encompass over 680 properties, consisting of hotels directly
owned or leased by Extended Stay or one of its affiliates.
Extended Stay currently operates five hotel brands: (i) Crossland
Economy Studios, (ii) Extended Stay America, (iii) Extended Stay
Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe
Studios.
Extended Stay Inc. and its affiliates filed for Chapter 11 on
June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M.
Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal
& Manges LLP, in New York, represents the Debtors. Lazard Freres
& Co. LLC is the Debtors' financial advisors. Kurtzman Carson
Consultants LLC is the claims agent. The Official Committee of
Unsecured Creditors tapped Gilbert Backenroth, Esq., Mark T.
Power, Esq., and Mark S. Indelicato, Esq., at Hahn & Hessen LLP,
in New York, as counsel. Extended Stay had assets of
$7.1 billion and debts of $7.6 billion as of the end of 2008.
Extended Stay Inc. in October successfully emerged from Chapter 11
protection. An investment group including Centerbridge Partners,
L.P., Paulson & Co. Inc. and Blackstone Real Estate Partners VI,
L.P. has purchased 100% of the Company for $3.925 billion in
connection with the Plan of Reorganization confirmed by the
Bankruptcy Court in July 2010.
FILENE'S BASEMENT: Say Cushman's Termination Fee Request Too Early
------------------------------------------------------------------
Kelly Rizzetta at Bankruptcy Law360 reports that Syms Corp.
blasted its former real estate broker Cushman & Wakefield Inc. on
Thursday for requesting its $1.25 million termination fee five
months too early, saying deals executed in the interim could incur
fees that would reduce the amount Cushman is owed.
Bankruptcy Law360 relates that Syms and subsidiaries including
Filene's Basement LLC don't deny that they are obligated to pay
Cushman a termination fee after firing the New York-based
commercial real estate broker last month.
About Filene's Basement
Massachusetts-based Filene's Basement, also called The Basement,
is the oldest off-price retailer in the United States. The
Basement focuses on high-end goods and is known for its
distinctive, low-technology automatic markdown system.
Filene's Basement first filed for Chapter 11 bankruptcy protection
in August 1999. Filene's Basement was bought by a predecessor of
Retail Ventures, Inc., the following year. Retail Ventures in
April 2009 transferred the unit to Buxbaum.
Filene's Basement, Inc. and its affiliates filed for Chapter 22
(Bankr. D. Del. Case No. 09-11525) on May 4, 2009, represented by
lawyers at Pachulski Stang Ziehl & Jones LLP. Epiq Bankruptcy
Solutions serves as claims and notice agent. The Debtors
disclosed assets of $236 million, including real estate of $97.7
million, and liabilities of $94 million, including $31.1 million
owing on a revolving credit with Bank of America NA as agent. In
addition, there were $11.1 million in letters of credit
outstanding on the revolver.
The 2009 Debtor was formally renamed FB Liquidating Estate,
following the sale of all of its assets to Syms Corp. in June
2009.
Pursuant to the Liquidating Plan confirmed in January 2010,
secured creditors in the Chapter 11 case have been paid in full,
and holders of priority, administrative and convenience class
claims have received 100% of their allowed claims. As reported by
the Troubled Company Reporter on Dec. 20, 2010, Alan Cohen,
Chairman of Abacus Advisors LLC and Chief Restructuring Officer
for FB Liquidating Estate disclosed that a second distribution of
dividend checks to Filene's unsecured creditors amounting to 12.5%
of approved claims has been made, bringing the cumulative
distributions on unsecured claims to 62.5%.
On Nov. 2, 2011, Syms Corp. placed itself, Filene's Basement and
two other units in Chapter 11 bankruptcy (Bankr. D. Del. Case Nos.
11-13511 to 11-13514) after a failed bid to sell the business.
The two units are Syms Clothing Inc. and Syms Advertising Inc.
Judge Kevin J. Carey presides over the case. Lawyers at Skadden
Arps Slate Meagher & Flom LLP serve as the Debtors' counsel. The
Debtors tapped Rothschild Inc. as investment banker and Cushman
and Wakefield Securities, Inc., as real estate financial advisors.
Syms shuttered its namesake and Filene's Basement outlets upon the
bankruptcy filing and tapped a joint venture of Gordon Brothers
Retail Partners LLC and Hilco Merchant Resources LLC to run the
going-out-of-business sales. The sale may continue until Jan. 31,
2012.
Filene's Basement estimated $1 million to $10 million in assets
and $50 million to $100 million in debts. The petitions were
signed by Gary Binkoski, authorized representative of Filene's
Basement.
The official committee of unsecured creditors appointed in the
2011 case has retained Hahn & Hessen LLP as legal counsel.
Holders of equity in Syms Corp. pushed for an official
shareholders' committee and separation of the Syms and Filene's
Basement bankruptcy estates.
Gordon Brothers and Hilco are represented by Goulston & Storrs,
P.C. and Ashby & Geddes, P.A.
FUEL DOCTOR: Delays Form 10-Q for Third Quarter
-----------------------------------------------
Fuel Doctor Holdings, Inc., notified the U.S. Securities and
Exchange Commission that the compilation, dissemination and review
of the information required to be presented in the Form 10-Q for
the period ended Sept. 30, 2012, has imposed time constraints that
have rendered timely filing of the Form 10-Q impracticable without
undue hardship and expense to the Company. The Company undertakes
the responsibility to file such report no later than five days
after its original prescribed due date.
About Fuel Doctor
Calabasas, Calif.-based Fuel Doctor Holdings, Inc., is the
exclusive distributor for the United States and Canada of a fuel
efficiency booster (the FD-47), which plugs into the lighter
socket/power port of a vehicle and increases the vehicle's miles
per gallon through the power conditioning of the vehicle's
electrical systems. The Company has also developed, and plans on
continuing to develop, certain related products.
Fuel Doctor reported a net loss of $2.69 million in 2011,
compared with a net loss of $2.48 million in 2010.
Rose, Synder & Jacobs LLP, in Encino, California, issued a "going
concern" qualification on the consolidated financial statements
for the period ended Dec. 31, 2011. The indepdent auditors noted
that the Company has sustained recurring operating losses,
continues to consume cash in operating activities, and has an
accumulated deficit at Dec, 31, 2011, which conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
The Company's balance sheet at June 30, 2012, showed $1.5 million
in total assets, $1.6 million in total liabilities, and a
stockholders' deficit of $142,893.
FUELSTREAM INC: President Quits; J. Carlos Ley Named CEO
--------------------------------------------------------
John Thomas resigned as the President and Secretary of Fuelstream,
Inc., on Nov. 13, 2012.
Also on Nov. 13, 2012, Juan Carlos Ley was appointed as Chief
Executive Officer and Secretary of the Company.
Mr. Ley, age 42, as a Hispanic born, first-generation American,
Mr. Ley has a full understanding of the Company's niche market
focus. He is fluent in Spanish, both verbally as well as in
written form because it is his first language. As with many first
generation born Hispanic Americans, education was of primary
importance to his family. Mr. Ley's primary education was
fostered in highly competitive private schools and was graduated
with a Bachelor of Science degree from Cornell University, an Ivy
League institution. His academic concentration was Finance and
Marketing while complementing his education with independent
studies at Cornell's Johnson Graduate School of Management. Mr.
Ley possesses an entrepreneurial spirit and in the last seventeen
years has been involved in several start-up companies in both the
public and private sectors. Mr. Ley's responsibilities have
included, but are not limited to managing the day to day
operations of these businesses. Mr. Ley has also been profoundly
involved with the R & D of new products and product lines,
increasing production efficiencies, maximizing marginal
contributions, financial planning and managing relationships with
vendors and third party service providers on a daily basis. From
December 2011 to March 2012, Mr. Ley served as the Chief Executive
Officer of MedEx Direct, Inc. (Delaware), a filer of reports
pursuant to the Securities Exchange Act of 1934. Since February
2010, Mr. Ley has been a principal and founder of Med Ex Direct
(Florida), Inc., a one-time wholly owned subsidiary of Med Ex
Delaware, a distributor of diabetic supplies throughout the United
States that concentrated principally on Hispanic patients.
Delays Form 10-Q
The Company notified the U.S. Securities and Exchange Commission
that financial information to be contained in its quarterly report
on Form 10-Q for the quarter ended Sept. 30, 2012, cannot be
analyzed and completed on a timely basis.
About Fuelstream
Draper, Utah-based Fuelstream, Inc., is an in-wing and on-location
supplier and distributor of aviation fuel to corporate,
commercial, military, and privately-owned aircraft throughout the
world. The Company also provides a variety of ground services
either directly or through its affiliates, including concierge
services, passenger andbaggage handling, landing rights,
coordination with local aviation authorities, aircraft maintenance
services, catering, cabin cleaning, customsapprovals, and third-
party invoice reconciliation. The Company's personnel assist
customers in flight planning and aircraft routing aircraft,
obtaining permits, arranging overflies, and flight follow
services.
The Company's balance sheet at June 30, 2012, showed $3.1 million
in total assets, $4.9 million in total liabilities, and a
stockholders' deficit of $1.8 million.
The accumulated deficit as of June 30, 2012, was $33.0 million and
the total stockholders' deficit at June 30, 2012 was
$1.8 million.
Morrill & Associates, LLC, in Bountiful, Utah, expressed
substantial doubt about Fuelstream'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 negative working capital, negative cash flows from
operations and recurring operating losses.
GENELINK INC: Incurs $974,000 Net Loss in Third Quarter
-------------------------------------------------------
Genelink, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $974,386 on $425,073 of revenue for the three months ended
Sept. 30, 2012, compared with a net loss of $977,994 on
$1.06 million of revenue for the same period during the prior
year.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss of $2.04 million on $1.72 million of revenue, compared
with a net loss of $2.39 million on $3.80 million of revenue for
the same period during the prior year.
The Company's balance sheet at Sept. 30, 2012, showed $2.69
million in total assets, $5.59 million in total liabilities and a
$2.89 million total shareholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/wgltfG
About Genelink
Based in Orlando, Fla., GeneLink, Inc., is a solution provider in
the genetically customized nutritional and personal care
marketplace.
Hancock Askew & Co., LLP, in Savannah, Georgia, expressed
substantial doubt about GeneLink'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 a working capital deficit of $436,310, has incurred recurring
operating losses since inception including a loss of $3.8 million
in 2011 and had an accumulated deficit at Dec. 31, 2011, of
$24,560,315.
GLYECO INC: Incurs $446,000 Net Loss in Third Quarter
-----------------------------------------------------
Glyeco, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $446,356 on $303,456 of net sales for the three months ended
Sept. 30, 2012, compared with a net loss of $87,224 on $200,256 of
net sales for the same period during the prior year.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss of $1.26 million on $895,390 of net sales, compared with
a net loss of $348,649 on $675,581 of net sales for the same
period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $1.55
million in total assets, $2.24 million in total liabilities and a
$685,243 total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/vR3Vbq
About GlyEco, Inc.
Phoenix, Ariz.-based GlyEco, Inc., is a green chemistry company
formed to roll-out its proprietary and patent pending glycol
recycling technology that transforms waste glycols, a hazardous
material, into profitable green products.
Jorgensen & Co., in Lehi, Utah, expressed substantial doubt about
GlyEco'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 not yet achieved
profitable operations and is dependent on the Company's ability to
raise capital from stockholders or other sources and other factors
to sustain operations.
GREEN EARTH: Incurs $628,000 Net Loss in Sept. 30 Quarter
---------------------------------------------------------
Green Earth Technologies, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $628,000 on $2.08 million of net sales for the three
months ended Sept. 30, 2012, compared with a net loss of $2.26
million on $1.84 million of net sales for the same period during
the prior year.
The Company's balance sheet at Sept. 30, 2012, showed
$3.78 million in total assets, $12.63 million in total liabilities
and a $8.85 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/ic5gEU
About Green Earth Technologies
White Plains, N.Y.-based Green Earth Technologies, Inc. (OTC QB:
GETG) -- http://www.getg.com/-- markets, sells and distributes
bio-degradable performance and cleaning products. The Company's
product line crosses multiple industries including the automotive
aftermarket, marine and outdoor power equipment markets.
Green Earth reported a net loss of $11.26 million for the
year ended June 30, 2012, compared with a net loss of $12.21
million during the prior fiscal year.
Friedman LLP, in East Hanover, New Jersey, issued a "going
concern" qualification on the consolidated financial statements
for the fiscal year ended June 30, 2012. The independent auditors
noted that the Company's losses, negative cash flows from
operations, working capital deficit and its ability to pay its
outstanding liabilities through fiscal 2013 raise substantial
doubt about its ability to continue as a going concern.
GUANGZHOU GLOBAL: Reports $112,491 Net Income in 3rd Quarter
------------------------------------------------------------
China Teletech Holding, Inc., formerly known as Guangzhou Global
Telecom, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing net income
of US$112,491 on US$8.56 million of sales for the three months
ended Sept. 30, 2012, compared with a net loss of US$27,367 on
US$3.09 million of sales for the same period during the prior
year.
For the nine months ended Sept. 30, 2012, the Company reported net
income of US$2.71 million on US$19.64 million of sales, compared
with net income of US$132,002 on US$15.82 million of sales for the
same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $4.31
million in total assets, $2.44 million in total liabilities and
$1.86 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/Z72obK
About Guangzhou Global
Tallahassee, Fl.-based Guangzhou Global Telecom, Inc., was
incorporated as Avalon Development Enterprises, Inc., on March 29,
1999, under the laws of the State of Florida. The Company,
through its subsidiaries, is now principally engaged in the
distribution and trading of rechargeable phone cards, cellular
phones and accessories within cities in the People's Republic of
China.
In its audit report for the 2011 results, Samuel H. Wong & Co.,
LLP, in San Mateo, California, noted that the Company has incurred
substantial losses, and has difficulty to pay the Peoples Republic
of China government Value Added Tax and past due Debenture Holders
Settlement, all of which raise substantial doubt about its ability
to continue as a going concern.
The Company reported a net loss of US$348,124 in 2011, compared
with a net loss of US$2.28 million in 2010.
GUIDED THERAPEUTICS: Files Form S-1, Registers 15.2MM Shares
------------------------------------------------------------
Guided Therapeutics, Inc., filed with the U.S. Securities and
Exchange Commission a Form S-1 registration statement registering
15.16 million shares of common stock issuable upon the exercise of
warrants at an exercise price of $0.40 to $0.80 per share.
The Company will not receive any cash proceeds from the sale of
shares by the selling stockholders, but to the extent that the
warrants are exercised in whole or in part, the Company will
receive payment for the exercise price. The Company will pay the
expenses of registering these shares.
The Company's common stock is dually listed on the OTC Bulletin
Board (OTCBB) and the OTCQB quotation systems under the symbol
"GTHP." The last reported sale price of the Company's common
stock on the OTCBB on Nov. 9, 2012, was $0.64 per share. The
selling stockholders will sell at a prevailing market price per
share as quoted on the OTCBB.
A copy of the Form S-1 is available for free at:
http://is.gd/nYKNIs
About Guided Therapeutics
Guided Therapeutics, Inc. (OTC BB and OTC QB: GTHP)
-- http://www.guidedinc.com/-- is developing a rapid and painless
test for the early detection of disease that leads to cervical
cancer. The technology is designed to provide an objective result
at the point of care, thereby improving the management of cervical
disease. Unlike Pap and HPV tests, the device does not require a
painful tissue sample and results are known immediately. GT has
also entered into a partnership with Konica Minolta Opto to
develop a non-invasive test for Barrett's Esophagus using the
LightTouch technology platform.
In its report on the Company's 2011 Form 10-K, UHY LLP, in
Sterling Heights, Michigan, noted that the Company's recurring
losses from operations and accumulated deficit raise substantial
doubt about its ability to continue as a going concern.
The Company reported a net loss of $6.64 million in 2011, compared
with a net loss of $2.84 million in 2010.
The Company's balance sheet at June 30, 2012, showed $3.51 million
in total assets, $3.08 million in total liabilities and $438,000
in total stockholders' equity.
Bankruptcy Warning
At June 30, 2012, the Company had negative working capital of
approximately $1.0 million and stockholders' equity of
approximately $334,000, primarily due to the recurring losses. As
of June 30, 2012, the Company was past due on payments due under
its notes payable in the amount of approximately $393,000.
"The Company's capital-raising efforts are ongoing. If sufficient
capital cannot be raised during the first quarter of 2013, the
Company has plans to curtail operations by reducing discretionary
spending and staffing levels, and attempting to operate by only
pursuing activities for which it has external financial support,
such as under its development agreement with Konica Minolta and
additional NCI or other grant funding. However, there can be no
assurance that such external financial support will be sufficient
to maintain even limited operations or that the Company will be
able to raise additional funds on acceptable terms, or at all. In
such a case, the Company might be required to enter into
unfavorable agreements or, if that is not possible, be unable to
continue operations, and to the extent practicable, liquidate
and/or file for bankruptcy protection," the Company said in its
quarterly report for the period ended June 30, 2012.
HARRISBURG, PA: Advisers Defend Work on Incinerator
---------------------------------------------------
Matt Fair at Bankruptcy Law360 reports that attorneys and
financial advisers connected to a bungled incinerator project that
saddled Harrisburg with more than $300 million in debt and pushed
the city into state receivership defended their work on the
project during a hearing before a committee of Pennsylvania state
lawmakers Tuesday.
About Harrisburg, Pennsylvania
The city of Harrisburg, in Pennsylvania, is coping with debt
related to a failed revamp of an incinerator. The city is
$65 million in default on $242 million owing on bonds sold to
finance an incinerator that converts trash to energy.
The Harrisburg city council voted 4-3 on Oct. 11, 2011, to
authorize the filing of a Chapter 9 municipal bankruptcy (Bankr.
M.D. Pa. Case No. 11-06938). The city claims to be insolvent,
unable to pay its debt and in imminent danger of having
tax revenue seized by holders of defaulted bonds.
Judge Mary D. France presided over the Chapter 9 case. Mark D.
Schwartz, Esq. and David A. Gradwohl, Esq., served as Harrisburg's
counsel. The petition estimated $100 million to $500 million in
assets and debts. Susan Wilson, the city's chairperson on Budget
and Finance, signed the petition.
Harrisburg said in court papers it is in imminent jeopardy through
six pending legal actions by creditors with respect to a number of
outstanding bond issues relating to the Harrisburg Materials,
Energy, Recycling and Recovery Facilities, which processes waste
into steam and electrical energy. The owner and operator of the
incinerator is The Harrisburg Authority, which is unable to pay
the bond issues. The city is the primary guarantor under each
bond issue. The lawsuits were filed by Dauphin County, where
Harrisburg is located, Joseph and Jacalyn Lahr, TD Bank N.A., and
Covanta Harrisburg Inc.
The Commonwealth of Pennsylvania, the County of Dauphin, and
Harrisburg city mayor Linda D. Thompson and other creditors and
interested parties objected to the Chapter 9 petition. The state
later adopted a new law allowing the governor to appoint a
receiver.
Kenneth W. Lee, Esq., Christopher E. Fisher, Esq., Beverly Weiss
Manne, Esq., and Michael A. Shiner, Esq., at Tucker Arensberg,
P.C., represented Mayor Thompson in the Chapter 9 case. Counsel to
the Commonwealth of Pennsylvania was Neal D. Colton, Esq., Jeffrey
G. Weil, Esq., Eric L. Scherling, Esq., at Cozen O'Connor.
In November 2011, the Bankruptcy Judge dismissed the Chapter 9
case because (1) the City Council did not have the authority under
the Optional Third Class City Charter Law and the Third Class City
Code to commence a bankruptcy case on behalf of Harrisburg and (2)
the City was not specifically authorized under state law to be a
debtor under Chapter 9 as required by 11 U.S.C. Sec. 109(c)(2).
Dismissal of the Chapter 9 petition was upheld in a U.S. District
Court.
That same month, the state governor appointed David Unkovic as
receiver for Harrisburg. Mr. Unkovic is represented by the
Municipal Recovery & Restructuring group of McKenna Long &
Aldridge LLP, led by Keith Mason, Esq., co-chair of the group.
Mr. Unkovic resigned as receiver March 30, 2012.
HERTZ CORP: S&P Removes 'B+' CCR From Watch on DTAG Acquisition
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on Park
Ridge, N.J.-based car and equipment renter and lessor Hertz Global
Holdings Inc. and its major operating subsidiary Hertz Corp.,
including the 'B+' corporate credit rating on both entities. "We
removed the ratings from CreditWatch, where we placed them with
negative implications on Aug. 27, 2012, when Hertz announced it
had entered into a definitive agreement to acquire competitor
Dollar Thrifty Automotive Group Inc. (DTAG). Hertz received
regulatory approval to acquire DTAG on Nov. 15, 2012, for $2.6
billion of cash and the assumption of $1.6 billion of DTAG's fleet
debt, and we expect the acquisition to close shortly. The outlook
is stable," S&P said.
"The affirmation reflects Hertz's relatively stable financial
profile, pro forma for the pending acquisition," said Standard &
Poor's credit analyst Betsy Snyder. "This is Hertz's third attempt
to acquire DTAG since April 2010, and each bid has become
increasingly more costly. The company will fund the acquisition
through a combination of Hertz's cash, DTAG's cash, and debt,
which Hertz has already raised. Hertz will also assume $1.6
billion of DTAG's fleet debt. Hertz has indicated it expects at
least $160 million of annual cost synergies, in addition to
revenue opportunities from combining the two companies. The
Federal Trade Commission approved the acquisition on Nov. 15,
2012, and Hertz agreed to divest its relatively small value brand
Advantage and certain DTAG rental locations to gain approval. We
believe the acquisition will aid Hertz's competitive position,
expanding its reach in the value/leisure car rental segment."
"Hertz's margins have improved over the past two years. Its
operating margin (after depreciation) was 15% for the 12 months
ended Sept. 30, 2012, compared with 10% two years earlier, because
of higher revenues, cost reduction programs, and a strong used-car
market that has resulted in lower vehicle expense. This has
resulted in stronger credit metrics. For the 12 months ended Sept.
30, 2012, EBITDA interest coverage was 4.8x, compared with 3.3x
two years earlier; funds from operations (FFO) to debt was 22%,
compared with 19%; debt to EBITDA was 4.3x, compared with 5.2x;
and debt to capital was 85%, compared with 88%. We expect
incremental earnings and cash flow to result in stable to modestly
improving credit metrics, despite the additional debt, for
the combined entity. Under our criteria, we characterize Hertz's
business risk profile as 'fair,' its financial risk profile as
'aggressive,' and its liquidity as 'adequate,'" S&P said.
"Hertz's acquisition of DTAG will result in an increase in its
market share in the U.S. There currently are three major on-
airport car rental companies: Hertz, Avis Budget Group Inc.
(B+/Stable/--; parent of the Avis and Budget brands), and
Enterprise Rent-A-Car Co. (BBB+/Stable/A-2; parent of the
Enterprise, Alamo, and National brands), and each have
approximately a 30% market share. DTAG accounts for most of the
balance. DTAG focuses on the leisure segment, which has been
faster growing and has been more profitable than business rentals
over the past few years, while Hertz serves a mixture of business
and leisure travelers. The acquisition will result in increased
penetration for Hertz in the leisure segment, giving it a brand
that can compete aggressively without undermining Hertz's pricing
structure," S&P said.
"Our ratings on Hertz reflect an aggressive financial profile and
the price-competitive, cyclical nature of on-airport car rentals
and equipment rentals. The ratings also incorporate the company's
position as the largest global car rental company and the strong
cash flow its businesses generate," S&P said.
"The outlook is stable. Pro forma for the proposed acquisition, we
anticipate Hertz's credit metrics will remain stable or improve
modestly through 2013, with higher earnings and cash flow
offsetting the incremental debt from the acquisition. We expect
FFO to debt of about 20% and EBITDA to interest coverage in the
low-4x area. We could raise the ratings if better-than-expected
earnings or significant debt reduction resulted in FFO to
debt increasing to the mid-20% level on a sustained basis.
Although less likely, we could lower the ratings if demand
declined significantly or used-car prices declined substantially,
resulting in a loss upon the sale of vehicles causing FFO to debt
to decline to the mid-teens percent level on a sustained basis,"
S&P said.
S&P Removes DTAG's 'B+' CCR
Pending Hertz Acquisition
Standard and Poor's Ratings Services affirmed its 'B+' corporate
credit rating on Tulsa, Okla.-based car renter Dollar Thrifty
Automotive Group Inc. (DTAG), based on its expectation that
competitor Hertz Global Holdings Inc. will complete an acquisition
of DTAG now that it has received regulatory approval to complete
the acquisition. DTAG has no rated debt. "We also removed the
rating from CreditWatch, where we placed it with negative
implications on August 27, 2012, when Hertz announced it had
entered into a definitive agreement to acquire DTAG. When the
acquisition is completed, we expect to withdraw our rating on
DTAG, with the combined entity's corporate credit rating at 'B+'.
The outlook on the combined entity is stable," S&P said.
"The affirmation of our rating reflects our view of the combined
entity's relatively stable financial profile, pro forma for the
completed acquisition," said Standard & Poor's credit analyst
Betsy Snyder. "Hertz will fund the acquisition with a combination
of its cash, DTAG's cash, and debt, which Hertz has already
raised."
"Hertz will also assume $1.6 billion of DTAG's fleet debt. Hertz
has indicated it expects at least $160 million of annual cost
synergies, in addition to revenue opportunities from combining the
two companies. The Federal Trade Commission approved the
transaction on Nov. 15, 2012, with Hertz agreeing to divest its
relatively small value brand Advantage and certain DTAG rental
locations to gain approval," S&P said.
"The outlook is stable. Pro forma for the proposed acquisition, we
anticipate the combined entity's credit metrics will weaken from
DTAG's previously strong levels, because of expected weaker
consolidated margins and the incremental acquisition debt. We
anticipate FFO to debt of around 20% and EBITDA to interest
coverage in the low-4x area for the combined entity. However, we
believe the combined entity's market position will improve and
credit measures will rise over time. We could raise the ratings on
the combined entity if better-than-expected earnings or
significant debt reduction resulted in FFO to debt increasing to
the mid-20% level on a sustained basis. Although we consider it
less likely, we could lower the ratings on the combined entity if
demand declined significantly or used car prices fell
substantially, resulting in a loss upon the sale of vehicles,
causing FFO to debt to drop to the mid-teens percent level on a
sustained basis," S&P said.
HMX ACQUISITION: Dec. 10 Auction of Coppley Brand, Other Assets
---------------------------------------------------------------
Matthew Daneman at Democrat and Chronicle reports that HMX
Acquisition Corp. said it plans to sell its Coppley clothing brand
and operations, and auction off the rest of the company --
including Hickey Freeman -- on Dec. 10, 2012.
According to the report, HMX received U.S. Bankruptcy Court
approval to sell Coppley Corp., which is based in Canada, for
$3.5 million to Very Best Apparel Corp. In court paperwork, HMX
said that if it hadn't found a party interested in buying, Coppley
likely would have been shut down and liquidated.
The report says the sale of the Coppley assets was one key
prerequisite to HMX receiving bankruptcy financing, consisting of
a $65 million line of credit including a $5 million term loan.
According to the report, the Coppley sale is only a prelude to
what will likely be the main event of the bankruptcy -- a
scheduled auction of the rest of its assets, including the Hickey
Freeman and Hart Schaffner Marx brands and the Hickey Freeman
plant on North Clinton Avenue, the report adds.
The report notes bids are due Dec. 6, with the auction to be held
four days later.
The report relates leading the pack of bidders is Authentic Brands
Group, a New York City firm that specializes in buying and
licensing brands of distressed companies. Under the proposed sale
agreement to Authentic, it would then lease back those assets and
brands to a new company being formed by and partially financed by
HMX's chief executive, Douglas Williams.
The report adds, however, Authentic and Mr. Williams' plan may
have some competition. Mr. Williams said there were "about 10
different groups that are interested in looking" and thus could
emerge as bidders.
According to the report, Mr. Williams has maintained that a key
aim of his plan is to keep Hickey Freeman and Hart Schaffner Marx
manufacturing in the United States, with the latter doing its
apparel making in Chicago. He said that at least some of the
prospective bidders have similar aims in mind.
The report adds whoever buys HMX's remaining assets might not end
up with the leadership and design help of Joseph Abboud, the noted
menswear designer. Mr. Williams said Mr. Abboud had stepped down
as HMX president and chief creative officer, though he remains an
adviser. Mr. Abboud will not be replaced.
HOSTESS BRANDS: To Proceed With Wind-Down After Mediation Failed
----------------------------------------------------------------
Rachel Feintzeig, writing for Dow Jones Newswires, reports a
spokesman for Hostess Brands Inc. said Tuesday evening the company
will proceed with its wind-down plan after a last-ditch mediation
session with its striking bakers' union failed to save the
Company.
Dow Jones says Hostess Chief Executive Gregory Rayburn confirmed
the mediation hadn't resulted in a deal. Hostess now plans to ask
Judge Robert Drain of the U.S. Bankruptcy Court in White Plains,
N.Y., for approval to proceed with a liquidation.
The report notes both the president and the lawyer for the bakers
union declined to comment.
The report notes that in a statement after the mediation failure,
Teamsters General Secretary-Treasurer Ken Hall said that Hostess's
motion to wind down the company "is a tragic outcome."
The Bankruptcy Court had pushed back for a couple of days the
hearing on Hostess' plan to wind down its business. A hearing on
the Wind-down Plan was originally set for Nov. 19 in the
afternoon. Judge Drain rescheduled the hearing for Nov. 21 at
11:00 a.m.
A summary of Hostess' request was reported in the Nov. 19 edition
of the Troubled Company Reporter. Several creditors and other
parties-in-interest in the case have filed objections to the Wind-
Down Plan.
Mediation
Dow Jones Newswires' Jacqueline Palank and Rachel Feintzeig, and
The Wall Street Journal's Mike Spector reported that Judge Drain
surprised Hostess Brands and its warring union Monday by delaying
the Company's bid to close its 85-year-old bakery business and
sell off its factories, brands and other assets. Instead, Judge
Drain asked both sides to join him Tuesday for a mediation session
where he will try to broker a new contract. If Tuesday's long-
shot session fails, then the Company will be able to return to
court Wednesday to try to move ahead with its plans to close down.
"My desire to do this is prompted primarily by the potential loss
of over 18,000 jobs," the judge said during a hearing in federal
bankruptcy court on Monday, according to the report. He also
cited his "belief that there is a possibility to resolve this
matter notwithstanding the losses that [Hostess has incurred] over
the last week or so and the difficulty of reorganizing this
company."
Hostess and the Bakery, Confectionery, Tobacco Workers and Grain
Millers International Union agreed to the confidential mediation
proceedings.
According to the report, Hostess Chief Executive Gregory Rayburn
said the judge's call for mediation is a "forceful" message to the
company and the union to try to work out their issues. "We'll take
all the help we can get," he said.
The report also relates Bakers union attorney Jeffrey R. Freund of
Bredhoff & Kaiser said after the hearing that the union was
"respectful" of the court's request for mediation.
The report noted that Judge Drain, who was a partner at Paul,
Weiss, Rifkind, Wharton & Garrison LLP before his 2002 appointment
to the bench, said in court Monday he didn't understand why the
union didn't fight the labor concessions in court. "The bakers
union did not object to the relief that was sought. I want to
repeat that," he said, calling its decision to remain silent when
Hostess was on the verge of imposing labor cost cuts "somewhat
unusual, to say the least, and perhaps illogical."
According to the report, Mr. Freund said the union has been
"crystal clear" about what it believes needs to be done to make
Hostess viable. "We laid that out," he said, "again and again and
again and again."
The report also said Heather Lennox, Esq., a Jones Day lawyer
representing Hostess, told Judge Drain Monday that the strike hurt
the company's finances beyond repair. "At this point, your honor,
our customers know we're going out of business. It would be very
hard for us to recover from this damage, your honor, even if there
were to be an agreement in the near term," she said.
Potential Bidders
Dow Jones Newswires' Msses. Palank and Feintzeig, and The Wall
Street Journal's Mr. Spector also reported that potential bidders
are circling Hostess, hoping to get iconic brands or other assets
on the cheap. Flowers Foods Inc. of Thomasville, Ga., whose own
brands include Nature's Own bread, ButterKrust bread and Tastykake
snack cakes, said Monday it has renegotiated lending terms to
allow it to tap additional cash. Analysts see that as a clear
sign it is gearing up to buy Hostess assets.
Private-equity firm Sun Capital, meanwhile, is interested in
bidding on Hostess's entire business, said a person close to the
firm, according to the report. The Boca Raton, Fla., buyout shop,
which owns the Friendly's restaurant chain and specializes in
company turnarounds, would like to try to negotiate a deal with
Hostess's unions, the person said.
Sun's interest was earlier reported by Fortune. According to
Fortune's Dan Primack, Sun co-CEO Marc Leder, said in an
interview, "I think that we could offer a slightly better, more
labor-friendly deal than what was on the table last week. . . .
We also think that one point the unions have made is that there
hasn't been a great amount of reinvestment in the business. We've
found that investing new capital into companies like this can be
very positive for brand, people and profitability. . . . We would
look to invest in newer, more modern, manufacturing assets that
would enable the company to become more productive and to
innovate."
Hostess' CEO Gregory F. Rayburn, in an interview with the WSJ,
however, said "Nobody wants to have anything to do with these old
plants or these unions or these contracts."
Nov. 21 Hearing
The Bankruptcy Court pushed back for a couple of days the hearing
on Hostess Brands Inc.'s plan to wind down its business. A
hearing on the Wind-down Plan was originally set for Nov. 19 in
the afternoon. Judge Robert D. Drain rescheduled the hearing for
Nov. 21 at 11:00 a.m.
A summary of Hostess' request was reported in the Nov. 19 edition
of the Troubled Company Reporter.
Mediation
Dow Jones Newswires' Jacqueline Palank and Rachel Feintzeig, and
The Wall Street Journal's Mike Spector report that Judge Drain
surprised Hostess Brands and its warring union Monday by delaying
the company's bid to close its 85-year-old bakery business and
sell off its factories, brands and other assets. Instead, Judge
Drain asked both sides to join him Tuesday for a mediation session
where he will try to broker a new contract. If Tuesday's long-
shot session fails, then the company will be able to return to
court Wednesday to try to move ahead with its plans to close down.
"My desire to do this is prompted primarily by the potential loss
of over 18,000 jobs," the judge said during a hearing in federal
bankruptcy court in White Plains, N.Y., according to the report.
He also cited his "belief that there is a possibility to resolve
this matter notwithstanding the losses that [Hostess has incurred]
over the last week or so and the difficulty of reorganizing this
company."
Hostess and the Bakery, Confectionery, Tobacco Workers and Grain
Millers International Union agreed to the confidential mediation
proceedings. If they don't make progress, a hearing on Hostess's
liquidation request will resume Wednesday. Meanwhile, the
company's plants remain closed and potential suitors are circling.
According to the report, Hostess Chief Executive Gregory Rayburn
said the judge's call for mediation is a "forceful" message to the
company and the union to try to work out their issues. "We'll take
all the help we can get," he said.
The report also relates Bakers union attorney Jeffrey R. Freund of
Bredhoff & Kaiser said after the hearing that the union was
"respectful" of the court's request for mediation.
The report relates Judge Drain, who was a partner at Paul, Weiss,
Rifkind, Wharton & Garrison LLP before his 2002 appointment to the
bench, said in court Monday he didn't understand why the union
didn't fight the labor concessions in court. "The bakers union
did not object to the relief that was sought. I want to repeat
that," he said, calling its decision to remain silent when Hostess
was on the verge of imposing labor cost cuts "somewhat unusual, to
say the least, and perhaps illogical."
According to the report, Mr. Freund said the union has been
"crystal clear" about what it believes needs to be done to make
Hostess viable. "We laid that out," he said, "again and again and
again and again."
The report also relates Heather Lennox, a Jones Day lawyer
representing Hostess, told Judge Drain Monday that the strike hurt
the company's finances beyond repair. "At this point, your honor,
our customers know we're going out of business. It would be very
hard for us to recover from this damage, your honor, even if there
were to be an agreement in the near term," she said.
Potential Bidders
The report also says potential bidders are circling Hostess,
hoping to get iconic brands or other assets on the cheap. Flowers
Foods Inc. of Thomasville, Ga., whose own brands include Nature's
Own bread, ButterKrust bread and Tastykake snack cakes, said
Monday it has renegotiated lending terms to allow it to tap
additional cash. Analysts see that as a clear sign it is gearing
up to buy Hostess assets.
Private-equity firm Sun Capital, meanwhile, is interested in
bidding on Hostess's entire business, said a person close to the
firm, according to the report. The Boca Raton, Fla., buyout shop,
which owns the Friendly's restaurant chain and specializes in
company turnarounds, would like to try to negotiate a deal with
Hostess's unions, the person said.
Sun's interest was earlier reported by Fortune. According to
Fortune's Dan Primack, Sun co-CEO Marc Leder, said in an
interview, "I think that we could offer a slightly better, more
labor-friendly deal than what was on the table last week. . . .
We also think that one point the unions have made is that there
hasn't been a great amount of reinvestment in the business. We've
found that investing new capital into companies like this can be
very positive for brand, people and profitability. . . . We would
look to invest in newer, more modern, manufacturing assets that
would enable the company to become more productive and to
innovate."
Hostess' CEO Gregory F. Rayburn, in an interview with the WSJ,
however, said "Nobody wants to have anything to do with these old
plants or these unions or these contracts."
About Hostess Brands
Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known
for iconic brands such as Butternut, Ding Dongs, Dolly Madison,
Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride,
Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution
centers and 570 outlets in 49 states.
Hostess filed for Chapter 11 bankruptcy protection early morning
on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through
12-22056) in White Plains, New York. Debtor-affiliates that filed
separate Chapter 11 petition are IBC Sales Corporation, IBC
Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and
MCF Legacy Inc. Hostess Brands disclosed assets of $982 million
and liabilities of $1.43 billion as of Dec. 10, 2011. Debt
includes $860 million on four loan agreements. Trade suppliers
are owed as much as $60 million.
The bankruptcy filing was made two years after predecessors
Interstate Bakeries Corp. and its affiliates emerged from
bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood
Holding LLC, after providing $130 million to finance the plan,
obtained control of IBC's business following the prior
reorganization. Hostess Brands is privately held. The new owners
pursued new Chapter 11 cases to escape from what they called
"uncompetitive and unsustainable" union contracts, pension plans,
and health benefit programs.
In 2011, Hostess retained Houlihan Lokey to explore sales of its
smaller assets and individual brands. Houlihan Lokey oversaw the
sale of Mrs. Cubbison's to Sugar Foods Corporation for
$12 million, but was unable to sell any of Hostess' core assets.
Judge Robert D. Drain oversees the case. Hostess has hired Jones
Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general
corporate counsel and conflicts counsel; Perella Weinberg Partners
LP as investment bankers, FTI Consulting, Inc. to provide an
interim treasurer and additional personnel for the Debtors, and
Kurtzman Carson Consultants LLC as administrative agent.
Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry
Wilson, the head of turnaround and restructuring firm MAEVA
Advisors, are representing the Teamsters union.
Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain
Millers International Union and Bakery & Confectionery Union &
Industry International Pension Fund are Jeffrey R. Freund, Esq.,
at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David
A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright &
Jaworski L.L.P.
An official committee of unsecured creditors has been appointed in
the case. The committee selected New York law firm Kramer Levin
Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein
head the legal team for the committee.
HOWREY LLP: Trustee Objects to Class Action Against Ex-Partners
---------------------------------------------------------------
Stewart Bishop at Bankruptcy Law360 reports that the Chapter 11
trustee in the Howrey LLP bankruptcy case on Thursday pressed a
California judge to stop a proposed class action targeting
hundreds of equity security holders of the defunct firm, saying
the suit interferes with the estate's own recoveries and violates
the automatic stay.
About Howrey LLP
Three creditors filed an involuntary Chapter 7 petition (Bankr.
N.D. Calif. Case No. 11-31376) on April 11, 2011, against the
remnants of the Washington-based law firm Howrey LLP. The filing
was in San Francisco, where the firm had an office. The firm
previously was known as Howrey & Simon and Howrey Simon Arnold &
White LLP. The firm at one time had more than 700 lawyers in 17
offices. The partners voted to dissolve in March 2011.
The firm specialized in antitrust and intellectual-property
matters. The three creditors filing the involuntary petition
together have $36,600 in claims, according to their petition.
The involuntary chapter 7 petition was converted to a chapter 11
case in June 2011 at the request of the firm. In its schedules
filed in July, the Debtor disclosed assets of $138.7 million and
liabilities of $107.0 million.
Representing Citibank, the firm's largest creditor, is Kelley
Cornish, Esq., a partner at Paul, Weiss, Rifkind, Wharton &
Garrison. Representing Howrey is H. Jason Gold, Esq., a partner
at Wiley Rein.
The Official Committee of Unsecured Creditors is represented in
the case by Bradford F. Englander, Esq., at Whiteford, Taylor And
Preston LLP.
In September 2011, Citibank sought conversion of the Debtor's case
to Chapter 7 or, in the alternative, appointment of a Chapter 11
Trustee. The Court entered an order appointing a Chapter 11
Trustee. In October 2011, Allan B. Diamond was named as Trustee.
HRK HOLDINGS: May Pay Lawyers on Contingency Basis
--------------------------------------------------
HRK Holdings LLC sought and obtained an order modifying the terms
of employment of James W. Martin, P.A. and William D. Preston,
P.A., to compensate the firms for certain services after Aug. 31,
2012, on a contingency basis.
The Debtor previously obtained orders authorizing to employ James
W. Martin and William D. Preston as special counsel and to
compensate them on an hourly basis.
According to the new order, the two firms will be paid on a
contingency fee basis with respect to providing advice, consulting
services, and litigation services in connection with pursuing
damages resulting from the planning, design, construction,
maintenance, assembly, product defects, negligence, supervision,
and any direct or indirectly related matters arising out of the
closure of the stack systems and damages to the Gypstack Property
and the Remaining Property against any person, firm, corporation,
agency, government, or entity that might be liable for damages,
including, but not limited to the lawsuit that is currently
pending in the Circuit Court for Manatee County, Florida, as Case
No. 41-2012-CA-003631.
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 disclosed $33,366,529 in assets and $26,092,559
in liabilities in its revised schedules.
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.
IMAGEWARE SYSTEMS: Incurs $2.7 Million Net Loss in Third Quarter
----------------------------------------------------------------
Imageware Systems, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss available to common shareholders of $2.73 million on
$938,000 of revenue for the three months ended Sept. 30, 2012,
compared with net income available to common shareholders of $5.29
million on $1.06 million of revenue for the same period during the
prior year.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss available to common shareholders of $10.30 million on
$3.02 million of revenue, compared with net income available to
common shareholders of $758,000 on $4.48 million of revenue for
the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $10.49
million in total assets, $8.35 million in total liabilities and
$2.14 million in total shareholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/wBb0Z9
About ImageWare Systems
Headquartered in San Diego, California, ImageWare Systems, Inc.,
is a leader in the emerging market for software-based identity
management solutions, providing biometric, secure credential, law
enforcement and enterprise authorization. Its "flagship" product
is the IWS Biometric Engine. Scalable for small city business or
worldwide deployment, the Company's biometric engine is a multi-
biometric platform that is hardware and algorithm independent,
enabling the enrollment and management of unlimited population
sizes. The Company's identification products are used to manage
and issue secure credentials, including national IDs, passports,
driver licenses, smart cards and access control credentials. Its
law enforcement products provide law enforcement with integrated
mug shot, fingerprint LiveScan and investigative capabilities.
The Company also provides comprehensive authentication security
software.
The Company reported a net loss of $3.18 million in 2011,
compared with a net loss of $5.05 million in 2010.
IMPLANT SCIENCES: Incurs $12.7-Mil. Net Loss in Sept. 30 Quarter
----------------------------------------------------------------
Implant Sciences Corporation filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss of $12.74 million on $1.41 million of revenue for the
three months ended Sept. 30, 2012, compared with a net loss of
$3.07 million on $1.03 million of revenue for the same period
during prior year.
The Company's balance sheet at Sept. 30, 2012, showed $6.57
million in total assets, $42.18 million in total liabilities and a
$35.60 million total stockholders' deficit.
Bankruptcy Warning
"Despite our current sales, expense and cash flow projections and
$4,915,000 in cash available from our line of credit with DMRJ, at
September 30, 2012, we will require additional capital in the
third quarter of fiscal 2013 to fund operations and continue the
development, commercialization and marketing of our products. Our
failure to achieve our projections and/or obtain sufficient
additional capital on acceptable terms would have a material
adverse effect on our liquidity and operations and could require
us to file for protection under bankruptcy laws."
A copy of the Form 10-Q is available for free at:
http://is.gd/5vZuOv
About Implant Sciences
Implant Sciences Corporation (OBB: IMSC.OB) --
http://www.implantsciences.com/-- develops, manufactures and
sells sensors and systems for the security, safety and defense
(SS&D) industries.
Marcum LLP, in Boston, Massachusetts, issued a "going concern"
qualification on the consolidated financial statements for the
year ended June 30, 2012. The independent auditors noted that the
Company has had recurring net losses and continues to experience
negative cash flows from operations. As of Sept. 25, 2012, the
Company's principal obligation to its primary lender was
$33,429,000 with accrued interest of $3,146,000. The Company is
required to repay all borrowings and accrued interest to this
lender on March 31, 2013. These conditions raise substantial
doubt about its ability to continue as a going concern.
INERGETICS INC: Incurs $1.3 Million Net Loss in Third Quarter
-------------------------------------------------------------
Inergetics, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $1.33 million on $9,199 of total revenues for the three months
ended Sept. 30, 2012, compared with a net loss of $2.53 million on
$14,537 of total revenues for the same period during the prior
year.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss of $4.45 million on $30,381 of total revenues, compared
with a net loss of $4.20 million on $118,752 of total revenues for
the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $1.11
million in total assets, $6.99 million in total liabilities, and a
$5.88 million total stockholders' deficit.
"However, the Company has a working capital deficit, significant
debt outstanding, incurred substantial net losses for the nine
months ended September 30, 2012 and 2011 and has accumulated a
deficit of approximately $81 million at September 30, 2012. The
Company has not been able to generate sufficient cash from
operating activities to fund its ongoing operations. There is no
guarantee that the Company will be able to generate enough revenue
and/or raise capital to support its operations in the future.
These factors 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/lapgF5
Paramus, N.J.-based Inergetics, Inc., formerly Millennium
Biotechnologies Group, Inc., is a holding company for its
subsidiary Millennium Biotechnologies, Inc. Millennium is a
research based bio-nutraceutical corporation involved in the field
of nutritional science. Millennium's principal source of revenue
is from sales of its nutraceutical supplements, Resurgex Select(R)
and Resurgex Essential(TM) and Resurgex Essential Plus(TM) which
serve as a nutritional support for immuno-compromised individuals
undergoing medical treatment for chronic debilitating diseases.
Millennium has developed Surgex for the sport nutritional market.
The Company's efforts going forward will focus on sales of Surgex
in powder, bar and ready to drink forms.
INDYMAC BANK: FDIC Liable for MBS Losses, MBIA's Tells DC Circ.
---------------------------------------------------------------
Erica Teichert at Bankruptcy Law360 reports that MBIA Insurance
Corp. told a D.C. Circuit panel on Wednesday that the Federal
Deposit Insurance Corp. should be held responsible for the
insurance company's losses stemming from mortgage-backed
securities contracts with collapsed IndyMac Bank FSB, since it
tacitly approved the agreements in its role as the bank's
receiver.
About IndyMac Bank
Based in Pasadena, California, IndyMac Bancorp Inc. (NYSE:IMB) --
http://www.indymacbank.com/-- is the holding company for IndyMac
Bank FSB, a hybrid thrift/mortgage bank that originated mortgages
in all 50 states of the United States. Through its hybrid thrift-
mortgage bank business model, IndyMac designed, manufactured, and
distributing cost-efficient financing for the acquisition,
development, and improvement of single-family homes. IndyMac also
provided financing secured by single-family homes to facilitate
consumers' personal financial goals and strategically invests in
single-family mortgage-related assets.
On July 11, 2008, the Office of Thrift Supervision closed IndyMac
Bank and appointed FDIC as the bank's receiver. Thacher Proffitt
& Wood LLP was engaged as counsel to the FDIC.
Indymac Bancorp filed for Chapter 7 bankruptcy protection on
July 31, 2008 (Bankr. C.D.Calif., Case No. 08-21752).
Representing the Debtor are Dean G. Rallis, Jr., Esq., and John C.
Weitnauer, Esq. Bloomberg noted that Indymac had about
$32.01 billion in assets as of July 11, 2008. In court documents,
IndyMac disclosed estimated assets of $50 million to $100 million
and estimated debts of $100 million to $500 million.
INNOVATION VENTURES: S&P Revises Outlook on 'B-' CCR to Negative
----------------------------------------------------------------
Standard & Poor's Rating Services affirmed its 'B-' corporate
credit rating and revised its outlook on Innovation Ventures LLC
to negative from stable.
"We also affirmed our 'B-' issue-level rating on the company's
$450 million senior secured notes maturing 2019. The '3' recovery
rating, indicating our expectation for meaningful (50% to 70%)
recovery for lenders in the event of payment default, remains
unchanged," S&P said.
"Recent unfavorable media attention has highlighted health
concerns attributed to the company's product, 5-hour ENERGY. In
recent weeks, similar health concerns have been raised with
respect to competing products in the niche energy subset of the
dietary supplement industry," S&P said.
"The company stands behind the safety of its product when used as
directed by adults as an energy shot--not as a beverage," said
Standard & Poor's credit analyst Nalini Saxena. "However, given
the possibility of protracted regulatory investigations and legal
wrangling, we believe the heightened media attention on the safety
of caffeinated energy shots may be sufficient to hurt sales."
"The affirmation of our 'B-' corporate credit rating on the
company predominantly reflects our view of the inherent risks
related to the nature of the company's governance. We continue to
view the company's financial profile as 'highly leveraged,'
particularly informed by what we view as a very aggressive
financial policy, and the business profile as 'vulnerable,' given
its narrow product and brand focus," S&P said.
"Standard & Poor's could consider a downgrade if negative
publicity continues, inducing retailers to materially curtail
purchases, and/or if regulatory actions are taken against the
company. Given the company's product concentration, negative
publicity -- perhaps coupled with a product recall -- and a
resulting compromise of operational performance (including an
EBITDA decline of more than 30%), could effect a downgrade," S&P
said.
"We could also consider a downgrade if the company were to engage
in an even more aggressive financial policy, specifically debt-
financed shareholder dividends to the detriment of reinvesting in
the longer term growth of the business," S&P said.
"We could revise the outlook to stable if the company's sales and
profits remain relatively stable despite the negative publicity
surrounding the niche energy subset of the dietary supplement
industry, and upon a favorable outcome of potential regulatory
investigation," S&P said.
INTERNATIONAL COMMERCIAL: Incurs $217,200 Net Loss in 3rd Quarter
-----------------------------------------------------------------
International Commercial Television Inc. filed with the U.S.
Securities and Exchange Commission its quarterly report on Form
10-Q disclosing a net loss of $217,200 on $6.28 million of net
sales for the three months ended Sept. 30, 2012, compared with net
income of $43,815 on $744,299 of net sales for the same period
during the prior year.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss of $126,334 on $12.78 million of net sales, compared with
a net loss of $184,126 on $1.96 million of net sales for the same
period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed
$2.77 million in total assets, $3.02 million in total liabilities
and a $246,914 total shareholders' deficit.
Bankruptcy Warning
"There is no guarantee that the Company will be successful in
launching new product lines. If the Company is unsuccessful in
achieving this goal, the Company will be required to raise
additional capital to meet its working capital needs or be forced
to delay future product lines due to insufficient cash flows. If
the Company is unsuccessful in completing additional financings,
it will not be able to meet its working capital needs or execute
its business plan. In such case the Company will assess all
available alternatives including a sale of its assets or merger,
the suspension of operations and possibly liquidation, auction,
bankruptcy, or other measures. 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/EM7cMT
About International Commercial
Wayne, Pa.-based International Commercial Television Inc. sells
various consumer products. The products are primarily marketed
and sold throughout the United States and internationally via
infomercials.
EisnerAmper, LLP, in Edison, New Jersey, expressed substantial
douobt about International Commercial Television's ability to
continue as a going concern, following the Company's results for
the fiscal year ended Dec. 31, 2011. The independent auditors
noted that of the Company's recurring losses from operations and
negative cash flows from operations.
INTERNATIONAL FUEL: Incurs $495,000 Net Loss in Third Quarter
-------------------------------------------------------------
International Fuel Technology, Inc., filed with the U.S.
Securities and Exchange Commission its quarterly report on Form
10-Q disclosing a net loss of $495,351 on $47,614 of net revenues
for the three months ended Sept. 30, 2012, compared with a net
loss of $672,026 on $59,281 of net revenues for the same period
during the prior year.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss of $1.42 million on $204,612 of net revenues, compared
with a net loss of $1.78 million on $167,785 of net revenues for
the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $2.45
million in total assets, $4.74 million in total liabilities and a
$2.28 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/pOkpxc
About International Fuel
St. Louis, Mo.-based International Fuel Technology, Inc., is a
technology company that has developed a range of liquid fuel
additive formulations that enhance the performance of petroleum-
based fuels and renewable liquid fuels.
BDO USA, LLP, in Chicago, Illinois, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2011, citing recurring losses from operations,
working capital and stockholders' deficits and cash obligations
and outflows from operating activities that raise substantial
doubt about its ability to continue as a going concern.
The Company reported a net loss of $2.57 million in 2011, compared
with a net loss of $2.21 million in 2010.
INTERSTATE PROPERTIES: Files Schedules of Assets and Liabilities
----------------------------------------------------------------
Interstate Properties, LLC, filed with the U.S. Bankruptcy Court
for the Northern District of Georgia its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $24,500,000
B. Personal Property $2,404
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $26,222,186
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $612,689
----------- -----------
TOTAL $24,502,404 $26,834,876
A copy of the schedules is available for free at:
http://bankrupt.com/misc/INTERSTATE_PROPERTIES_sal.pdf
Interstate Properties, LLC, filed a bare-bones Chapter 11 petition
(Bankr. N.D. Ga. Case No. 12-76037) in Atlanta on Oct. 17, 2012.
George M. Geeslin, Esq., who has an office in Atlanta, Georgia,
serves as the Debtor's bankruptcy counsel.
IZEA INC: Incurs $951,500 Net Loss in Third Quarter
---------------------------------------------------
Izea, Inc., filed with the U.S. Securities and Exchange Commission
its quarterly report on Form 10-Q disclosing a net loss of
$951,570 on $1.05 million of revenue for the three months ended
Sept. 30, 2012, compared with a net loss of $1.59 million on $1.05
million of revenue for the same period during the prior year.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss of $3.70 million on $3.90 million of revenue, compared
with a net loss of $2.83 million on $2.82 million of revenue for
the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $2.38
million in total assets, $3.23 million in total liabilities and a
$855,898 total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/PNMyBC
About IZEA, Inc.
IZEA, Inc., headquartered in Orlando, Fla., believes it is a world
leader in social media sponsorships ("SMS"), a rapidly growing
segment within social media where a company compensates a social
media publisher to share sponsored content within their social
network. The Company accomplishes this by operating multiple
marketplaces that include its platforms SocialSpark,
SponsoredTweets and WeReward, as well as its legacy platforms
PayPerPost and InPostLinks.
The Company has incurred significant losses from operations since
inception and has an accumulated deficit of $20.9 million as of
June 30, 2012.
Cross, Fernandez & Riley, LLP, in Orlando, Florida, expressed
substantial doubt about IZEA's ability to continue as a going
concern, following the Company's results for the fiscal year ended
Dec. 31, 2011. The independent auditors noted that the Company
has incurred recurring operating losses and had an accumulated
deficit at Dec. 31, 2011, of $18.1 million.
JOHN BECK: U.S. Trustee Wants Bankruptcy Converted to Ch. 7
-----------------------------------------------------------
Beth Winegarner at Bankruptcy Law360 reports that a U.S. trustee
urged a California bankruptcy court Wednesday to convert a get-
rich-quick real estate business owner's Chapter 11 case to a
Chapter 7 to prevent the man from using his bankruptcy status to
avoid paying $113 million in fines to the Federal Trade
Commission.
Bankruptcy Law360 relates that U.S. Trustee Barbara Matthews urged
the court to either dismiss John Beck's bankruptcy entirely or
convert it to Chapter 7, arguing that he was using Chapter 11
incorrectly as a shelter against his FTC debt.
John Beck filed Chapter 11 petition (Bankr. N.D. Calif. Case No.
12-47882) on Sept. 24, 2012.
K-V PHARMACEUTICAL: Exclusivity Period Extended Until Feb. 4
------------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that K-V Pharmaceutical
Co. now has until Feb. 4 to file a Chapter 11 plan without
worrying about other constituencies floating their own, as a New
York bankruptcy judge on Friday granted its request for an
extension of the exclusivity period.
According to Bankruptcy Law360, overruling an objection by Hologic
Inc., which had argued that the debtor had made no meaningful
progress and was not financially viable, U.S. Bankruptcy Judge
Allan L. Gropper extended K-V's exclusivity period for filing a
plan by three months.
About K-V Pharmaceutical
K-V Pharmaceutical Company (NYSE: KVa/KVb) --
http://www.kvpharmaceutical.com/-- is a fully integrated
specialty pharmaceutical company that develops, manufactures,
markets, and acquires technology-distinguished branded and
generic/non-branded prescription pharmaceutical products. The
Company markets its technology distinguished products through
ETHEX Corporation, a subsidiary that competes with branded
products, and Ther-Rx Corporation, the company's branded drug
subsidiary.
K-V Pharmaceutical Company and certain domestic subsidiaries on
Aug. 4 filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead
Case No. 12-13346, under K-V Discovery Solutions Inc.) to
restructure their financial obligations.
K-V has retained the services of Willkie Farr & Gallagher LLP as
bankruptcy counsel, Williams & Connolly LLP as special litigation
counsel, and SNR Denton as special litigation counsel. In
addition, K-V has retained Jefferies & Co., Inc., as financial
advisor and investment banker. Epiq Bankruptcy Solutions LLC is
the claims and notice agent.
The U.S. Trustee appointed five members to serve in the Official
Committee of Unsecured Creditors.
K-V PHARMACEUTICAL: Raises $6.5 Million From Settlement
-------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that K-V Pharmaceutical Co. received approval for a
settlement bringing in $6.5 million cash from the generic
pharmaceutical business that was sold in June 2011. When Zydus
Pharmaceuticals USA Inc. and Nesher Pharmaceuticals USA LLC bought
the business, $7.5 million was placed into escrow to cover the
buyers if they were sued by users of the products. After the
buyers made claims against the escrow, the parties entered into a
settlement that was approved by the bankruptcy court in New York
on Nov. 16.
According to the report, from the $7.5 million, K-V receives
$6.5 million while $475,000 goes to the buyers and $500,000
remains in escrow. At the end of last week, the bankruptcy court
also extended K-V's exclusive right to propose a Chapter 11 plan
until Feb. 4.
Liabilities include $455.6 million in long-term debt, including
$225 million on the senior secured notes due 2015. The first-lien
notes traded on Nov. 15 for 62.5 cents on the dollar, according to
Trace, the bond-price reporting system of the Financial Industry
Regulatory Authority. The secured notes have risen 54% since
Oct. 10. There is $200 million owing on 2.5% contingent
convertible subordinated notes due 2033. The notes last traded on
Nov. 16 for 17 cents on the dollar, according to Trace. The price
has risen 148% since Oct. 23.
About K-V Pharmaceutical
K-V Pharmaceutical Company (NYSE: KVa/KVb) --
http://www.kvpharmaceutical.com/-- is a fully integrated
specialty pharmaceutical company that develops, manufactures,
markets, and acquires technology-distinguished branded and
generic/non-branded prescription pharmaceutical products. The
Company markets its technology distinguished products through
ETHEX Corporation, a subsidiary that competes with branded
products, and Ther-Rx Corporation, the company's branded drug
subsidiary.
K-V Pharmaceutical Company and certain domestic subsidiaries on
Aug. 4 filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead
Case No. 12-13346, under K-V Discovery Solutions Inc.) to
restructure their financial obligations.
K-V has retained the services of Willkie Farr & Gallagher LLP as
bankruptcy counsel, Williams & Connolly LLP as special litigation
counsel, and SNR Denton as special litigation counsel. In
addition, K-V has retained Jefferies & Co., Inc., as financial
advisor and investment banker. Epiq Bankruptcy Solutions LLC is
the claims and notice agent.
The U.S. Trustee appointed five members to serve in the Official
Committee of Unsecured Creditors.
K-V's main business now is the sale of Makena, a drug reducing the
risk of premature birth. Hologic Inc. sold the Makena business to
K-V in 2008 and is owed about $95 million plus royalties. Hologic
has a lien on the right to distribute the product to recover the
remaining payments. Hologic wants the bankruptcy judge to grant
permission to foreclose rights to Makena.
K-V is operating with use of cash representing collateral for
$225 million in senior notes.
KINDER MORGAN: Moody's Corrects July 17 Rating Release
------------------------------------------------------
Moody's Investors Service issued a correction to the July 17, 2012
rating release of Kinder Morgan, Inc.
Moody's downgraded the senior secured debt ratings for Kinder
Morgan, Inc. (KMI) to Ba2 from Ba1 with a negative outlook. This
action concludes the review that was initiated on October 18, 2011
after KMI agreed to purchase 100% of the stock of El Paso
Corporation (El Paso). Other actions taken by Moody's included
placing El Paso's ratings on review for upgrade, and the
affirmation of the senior unsecured ratings for Kinder Morgan
Energy Partners, L.P. (KMP) at Baa2 and El Paso Pipeline Partners
Operating Company (EPBO) at Ba1. The El Paso ratings are under
review to reflect the possibility that KMI will guarantee El
Paso's debt. If not for the guarantee, a downgrade of El Paso's
rating is likely.
A number of affiliated companies had their outlooks changed, the
most notable being the change to a positive outlook from a
negative outlook for Tennessee Gas Pipeline Company and El Paso
Natural Gas Company in line with KMI's announced intent to move
these pipelines from El Paso to KMP later this year. A complete
list of Moody's rating actions is as follows:
Kinder Morgan, Inc.
Corporate Family Rating -- assigned a Ba2 CFR
Probability of Default -- assigned a Ba2 PDR
Senior Secured Credit Facility -- downgraded to Ba2 (LGD3-49%)
from Ba1
Senior Secured Debt -- downgraded to Ba2 (LGD3-49%) from Ba1
Junior Subordinated Debt -- downgraded to B1 (LGD6-97%) from Ba3
Speculative Grade Liquidity Rating -- assigned at SGL3
Outlook -- changed to Negative from RUR-D
Kinder Morgan Finance Company
Backed Senior Secured Debt -- downgraded to Ba2 from Ba1
Outlook -- changed to Negative from RUR-D
KN Capital Trust I
Backed Preferred Stock -- downgraded to B1 from Ba3
Outlook -- changed to Negative from RUR-D
KN Capital Trust III
Backed Preferred Stock -- downgraded to B1 from Ba3
Outlook -- changed to Negative from RUR-D
Kinder Morgan G.P.
Cumulative Preferred Stock -- downgraded to Ba2 from Ba1
Outlook -- Negative
Kinder Morgan Energy Partners, L.P.
Commercial Paper -- affirmed at P-2
Senior Unsecured Debt -- affirmed at Baa2
Senior Unsecured Shelf -- affirmed at (P) Baa2
Subordinated Shelf -- affirmed at (P) Baa3
Outlook -- changed to Stable from Negative
El Paso Corporation
Corporate Family Rating -- Ba3
Probability of Default -- Ba3
Senior Secured Debt -- Ba3 (LGD4-55%)
Medium Term Note Program - (P) Ba3 (LGD4-55%)
Convertible Subordinated Debt - B2 (LGD6-97%)
Speculative Grade Liquidity Rating -- SGL3
Outlook -- RUR-U
El Paso Energy Capital Trust I
Backed Preferred Stock --B2 (LGD6-97%)
Outlook -- RUR-U
El Paso CGP
Senior Unsecured Debt - Ba3
Backed Senior Unsecured Debt -- Ba3
Outlook -- RUR-U
Colorado Interstate Gas Company
Senior Unsecured Debt -- affirmed at Baa3
Outlook -- changed to Stable from Negative
Sonat Inc.
Backed Senior Unsecured Debt -- Ba3
Outlook - RUR-U
Southern Natural Gas Company
Senior Unsecured Debt -- affirmed at Baa3
Outlook - changed to Stable from Negative
El Paso Natural Gas Company
Senior Unsecured Debt -- affirmed at Baa3
Outlook -- changed to Positive from Negative
El Paso Tennessee Pipeline Company
Senior Unsecured Debt -- affirmed at Baa3, LGD changed to LGD4-
55% from LGD4-57%
Outlook -- changed to Positive from Negative
Tennessee Gas Pipeline Company
Senior Unsecured Debt -- affirmed at Baa3
Outlook -- changed to Positive from Negative
El Paso Pipeline Partners Operating Company
Corporate Family Rating -- affirmed at Ba1
Probability of Default -- affirmed at Ba1
Backed Senior Unsecured Debt -- affirmed at Ba1, LGD changed to
LGD4-51% from LGD4-50%
Backed Senior Unsecured Shelf -- affirmed at (P) Ba1
Speculative Grade Liquidity Rating -- changed to SGL2 from SGL3
Outlook -- changed to Stable from Negative
According to Stuart Miller, Moody's Vice President and Senior
Credit Officer, "The rating actions capture the breadth, scale,
and credit quality of Kinder Morgan's portfolio of assets. The
actions also reflect the aggressive financial policies employed by
the management of Kinder Morgan as evidenced by the high level of
distributions that are regularly paid out at multiple levels of
the organization to equity holders, as well as the financial
leverage employed. Moody's rating assessment is highly dependent
on Kinder Morgan delivering on its plan to reduce leverage at the
parent level over the next two to three years."
RATINGS RATIONALE
Kinder Morgan Inc. and Kinder Morgan Energy Partners, L.P.
KMP's portfolio of infrastructure assets generates a relatively
stable source of cash flow that is used to fund expansions along
with distributions to its unitholders. KMP's Baa2 rating reflects
its superior scale, but tempered by an aggressive financial policy
as evidenced by the high leverage on a combined basis with its
parent, KMI. KMP's rating also incorporates the higher earnings
volatility and capital intensity associated with its oil, gas, and
CO2 production business. By the end of the third quarter of 2012,
KMP is expected to have completed the purchase of most of TGP and
a portion of EPNG which will improve KMP's business profile by
adding high quality, regulated pipelines to its portfolio while
diluting the contribution of the CO2 business segment. However,
KMP's corporate structure as a MLP creates a heavy distribution
burden as most of the partnership's available cash flow must be
paid to its unitholders to maintain its status as a tax pass-
through entity. With the competing demand to grow the underlying
business to support distribution growth, KMP has a heavy reliance
on third party funding in the debt and equity capital markets.
KMP's rating incorporates the impact that KMI's and El Paso's debt
has on the combined family of companies despite the debt being
non-recourse. To varying degrees, KMP provides support for the
debt at all three entities. On a proportionately consolidated
basis and including Moody's standard adjustments, at the closing
of the El Paso acquisition in May 2012, leverage at KMI was 7.1x,
at El Paso it was 6.9x, and at KMP it was 4.3x. Over the next
three years, the assets of El Paso are expected to be sold to KMP
and EPBO. As assets are "dropped down", KMI has the option to use
the proceeds of the sales to reduce debt at the KMI or El Paso
level. This could reduce the leverage at KMI, but the sale of
assets out of El Paso will likely cause El Paso's leverage to rise
from its already elevated level and could approach 10.0x debt to
EBITDA if priority is given to debt reduction at the KMI level.
The possibility for this extraordinarily high level of leverage
would influence the ratings throughout the KMI family of
companies, including KMP. KMI's rating is three notches below
KMP's rating to reflect its structural subordination to the
significant amount of debt at KMP.
KMP generates significant cash flow from operations. However,
little is used for debt reduction; it is either re-invested or
distributed to equity holders. KMI almost exclusively relies on
distributions from KMP which KMI uses to pay dividends to its
shareholders. For day to day liquidity, the companies' primary
sources of liquidity are their bank credit facilities and KMP's CP
program. In both cases, maintenance financial covenants do not
appear to limit either company's ability to access its credit
facility in the next twelve months. Moody's considers KMP's
liquidity to be good and KMI's liquidity to be adequate
(speculative grade liquidity rating of SGL-3) as KMI's credit
facility is currently scheduled to expire within the next twelve
months - in May 2013. KMP has a $2.2 billion credit facility that
matures in July 2016. The credit facility backs up a similarly-
sized commercial paper program. At March 31, 2012, there was $584
million of usage under the credit facility and CP program leaving
about $1.6 billion of additional borrowing capacity. The credit
facility is unsecured, therefore secondary liquidity options are
available, if necessary. KMI has a $1.75 billion credit facility.
Usage at March 31, 2012, pro forma for the borrowings made at the
time of the El Paso acquisition, was approximately $560 million
leaving over $1.1 billion of availability. Because this facility
is secured by essentially all of KMI's assets, secondary liquidity
is more limited.
The stable outlook for KMP reflects Moody's expectation that
leverage will remain in the 4.0 to 4.5x range and leverage will
decline at KMI and El Paso combined to approximately 5.0x by the
end of 2014. The negative outlook for KMI reflects its initially
high leverage along with the possibility that KMI will guarantee
the debt of El Paso. A rating upgrade for KMP is unlikely until
the combined leverage at KMI and El Paso is below 5.0x and KMP's
leverage is below 4.0x. Similarly, an upgrade of KMI is unlikely
until the combined leverage of KMI and El Paso is less than 5.0x,
assuming KMP's leverage is no greater than 4.5x. KMP's rating
could be downgraded if leverage increases and approaches 5.0x on a
stand-alone basis or leverage at KMI and El Paso remains over
6.0x. Similar ratios would apply as potential triggers for a
downgrade of KMI's rating.
El Paso Corporation:
El Paso's rating reflects its large and diversified network of
natural gas pipelines along with its highly leveraged balance
sheet. Most of El Paso's pipelines maintain an investment grade
profile and generate significant levels of distributable cash.
However, as a result of the company's failed attempt to become a
major player in the energy marketing business in the early 2000s,
El Paso incurred significant levels of debt as it wound down and
exited the business. Putting additional stress on the company's
financial position, in 2008 El Paso launched an $8 billion
pipeline expansion and building program which was completed in
2011. More recently, as part of its acquisition by KMI in May
2012, El Paso sold its exploration and production (E&P) operations
for $7.15 billion. The sales proceeds were up-streamed to KMI to
reduce debt at the KMI level. As a result of this series of
events, El Paso's leverage, as measured by debt to EBITDA on a
proportionately consolidated business, was 6.9x at the end of May
2012. Looking forward and compounding matters, over the next two
to three years KMI intends to drop down the remaining assets owned
by El Paso to EPBO and to KMP. The sales proceeds received by El
Paso could be up-streamed to KMI to repay the $5.4 billion of
acquisition debt at the KMI level. If this occurs, it could push
the leverage at El Paso to about 10.0x, an unsustainable level on
a stand-alone basis.
Once the drop downs are complete, the company will rely on
distributions from EPBO and possible investments by KMI to service
its debt. El Paso owns approximately 44% of EPBO which means that
there is significant leakage to public unit holders for any
distributions paid by EPBO. El Paso is also structurally
subordinated to the significant debt burden at EPBO and its
subsidiaries. While KMI benefits from significant distributions
from KMP, it has nearly $9 billion of debt to service along with
an aggressive dividend program to its shareholders. As such, KMI
is expected to be reluctant to down-stream funds to El Paso to
support its debt service requirements.
El Paso's SGL-3 liquidity rating reflects adequate coverage of
interest expense, working capital, capital expenditures, and the
$128 million of debt maturities that occur prior to the end of
2013. At the closing of the KMI-El Paso acquisition, El Paso's
credit facility was repaid and cancelled. Therefore, El Paso is
highly reliant on secondary sources of liquidity such as proceeds
from asset sales, or alternatively, from liquidity support from
KMI. At the closing of the acquisition, KMI pledged certain assets
of El Paso as collateral for the acquisition loans, as well as the
secured notes of KMI and the unsecured notes of El Paso. As a
result, KMI's bank credit facilities now limit the ability to the
sell El Paso's assets to generate liquidity.
El Paso's rating has been put under review for upgrade on the
possibility that KMI elects to guarantee the El Paso debt. At
most, the guarantee could result in a one notch upgrade to Ba2 to
match KMI's rating. Without a guarantee, Moody's would consider
downgrading El Paso's rating, likely by one notch to B1 to reflect
its elevated leverage and likelihood that leverage will increase
as assets are sold and dropped down to KMP and EPBO.
El Paso Pipeline Partners Operating Company
EPBO's Ba1 CFR reflects the relative strength of EPBO's business
profile that is tempered by the elevated leverage levels of El
Paso and KMI on a consolidated and proportional share basis. On a
standalone basis, EPBO has credit characteristics that could
support an investment grade rating. Its assets generate cash flow
that is relatively stable and predictable. However, EPBO provides
significant credit support for the debt obligations of El Paso,
and to a lesser degree, for KMI. The credit-worthiness of EPBO is
influenced and constrained by the highly leveraged balance sheet
of El Paso where leverage is expected to increase as assets are
dropped down out of El Paso. The financial metrics of KMI, and El
Paso in particular, are the primary drivers for El Paso's rating.
EPBO's Ba1 CFR represents a significant improvement over El Paso's
stand-alone credit, but also represents an approximate three notch
reduction from its potential rating given the high-quality
pipeline and infrastructure assets it owns.
EPBO's SGL-2 liquidity rating reflects Moody's expectation that
EPBO will have sufficient liquidity over the next twelve months to
cover its maintenance capital spending, interest expense,
distributions, and working capital needs using internally
generated cash flow and through its access to the El Paso Pipeline
Partners, L.P. (EPB) revolving credit facility. Any significant
growth capital expenditures at EPBO would need to be financed
externally, while any acquisitions of assets from El Paso would be
expected to be financed by the issuance of new debt and equity,
but the drop down would only occur if these markets are available.
EPB's $1 billion senior unsecured revolving credit facility was
unused at March 31, 2012 and expires in 2016. The partnership is
in compliance with the maintenance covenants of the revolving
credit facility by a margin that would permit full usage of the
credit facility without the addition of any incremental EBITDA.
Alternate liquidity is limited as EPBO's assets are limited to
stock positions in its operating subsidiaries. The stock of these
operating subsidiaries is not publicly traded. The credit facility
limits EPB and EPBO asset dispositions to an amount that
represents less than 10% of consolidated tangible assets.
The outlook for EPBO is stable. EPBO's ratings are constrained by
the rating of El Paso. Until El Paso's and KMI's combined leverage
is reduced to less than 5.5x, EPBO's rating is unlikely to be
upgraded. Assuming there are no changes to its business profile,
an upgrade is possible when EPBO's leverage is below 4.5x and the
parent level leverage is less than 5.5x. EPBO could be downgraded
if EPBO's leverage approaches 5.0x or if growth in distributions
becomes more aggressive putting additional pressure on EPBO's cash
flows and liquidity.
The principal methodology used in rating Kinder Morgan was the
Global Midstream Energy Industry Methodology published in December
2010 and the Natural Gas Pipelines 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.
Kinder Morgan, Inc. is one of the largest midstream companies in
the US. The company operates product pipelines, natural gas
pipelines, liquids and bulk terminals, and CO2, oil, and natural
gas production and transportation assets. The company is
headquartered in Houston, Texas.
LANTERN PARTNERS: Court OKs Darrin L. Boyd as Leasing Agent
-----------------------------------------------------------
Lantern Partners LLC sought and obtained permission from the U.S.
Bankruptcy Court to employ Darrin L. Boyd as leasing agent.
Lantern Partners LLC filed a Chapter 11 petition (Bankr. S.D. Ind.
Case No. 12-06288) on May 25, 2012, in Indianapolis, Indiana. The
Debtor is a single asset real estate as defined in 11 U.S.C., Sec.
101 (51B). The Debtor's principal asset is located at 10500
Kincaid Drive, Fishers, Indiana.
Jeffrey A. Hokanson, Esq., and Jeremy M. Dunn, Esq., at Frost
Brown Todd LLC, serve as the Debtor's bankruptcy counsel. Judge
Anthony J. Metz, III, presides over the case.
LDK SOLAR: Reaches Agreement to Terminate Wafer Contract
--------------------------------------------------------
LDK Solar Co., Ltd., has reached an agreement with a Europe-based
PV customer to terminate their long-term solar wafer supply
agreement.
Under the terms of the agreement, originally signed in 2008, LDK
Solar was to supply multicrystalline silicon wafers over a ten-
year period. As part of the original agreement, the PV customer
made an advanced payment representing a portion of the contract
value to LDK Solar.
As part of the settlement, the parties mutually agreed to
terminate the supply agreement, and that LDK Solar will receive
approximately $37 million.
"We are pleased to reach a mutual agreement to terminate our 2008
wafer supply agreement with this customer," stated Xingxue Tong,
President and CEO of LDK Solar. "We will continue to work closely
with our customers and partners in the currently challenging
environment for the PV industry."
LDK Solar is assessing the extent of financial impact on its full
year 2012 earnings of the termination and related contract
termination charges.
About LDK Solar
LDK Solar Co., Ltd. -- http://www.ldksolar.com-- based in Hi-Tech
Industrial Park, Xinyu City, Jiangxi Province, People's Republic
of China, is a vertically integrated manufacturer of photovoltaic
products, including high-quality and low-cost polysilicon, solar
wafers, cells, modules, systems, power projects and solutions.
LDK Solar was incorporated in the Cayman Islands on May 1, 2006,
by LDK New Energy, a British Virgin Islands company wholly owned
by Xiaofeng Peng, LDK's founder, chairman and chief executive
officer, to acquire all of the equity interests in Jiangxi LDK
Solar from Suzhou Liouxin Industry Co., Ltd., and Liouxin
Industrial Limited.
KPMG in Hong Kong, China, said in a May 15, 2012, audit report,
there is substantial doubt on the ability of LDK Solar Co., Ltd.,
to continue as a going concern. According to KPMG, LDK Solar has
a net working capital deficit and is restricted to incur
additional debt as it has not met a financial covenant ratio under
a long-term debt agreement as of Dec. 31, 2011. These conditions
raise substantial doubt about the Group's ability to continue as a
going concern.
The Company's balance sheet at June 30, 2012, showed US$6.40
billion in total assets, US$5.95 billion in total liabilities,
US$254.44 million in redeemable non-controlling interests and
US$192.17 million in total equity.
LEAGUE NOW: Incurs $124,500 Net Loss in Third Quarter
-----------------------------------------------------
League Now Holdings Corporation filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss of $124,585 on $1 million of revenue for the three
months ended Sept. 30, 2012, compared with a net loss of $4,200 on
$0 of revenue for the same period during the prior year.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss of $334,381 on $2.90 million of revenue, compared with a
net loss of $16,700 on $0 of revenue for the same period during
the preceding year.
The Company's balance sheet at Sept. 30, 2012, showed $1.59
million in total assets, $1.81 million in total liabilities and a
$217,959 total stockholders' deficiency.
A copy of the Form 10-Q is available for free at:
http://is.gd/LOWemW
About League Now
Brecksville, Ohio-based League Now Holdings Corporation, through
its subsidiary, Infiniti Systems Group, Inc., provides technology
integration services to businesses in the midwestern United
States.
As reported in the TCR on April 23, 2012, Harris F. Rattray CPA,
in Pembroke Pines, Florida, expressed substantial doubt about
League Now's ability to continue as a going concern, following the
Company's results for the fiscal year ended Dec. 31, 2011. The
independent auditor noted that the Company has incurred
accumulated net losses of $207,200 and needs to raise
additional funds to meet its obligations and sustain its
operations.
LOS ANGELES DODGERS: Dewey Wants $500K Bonus for Bankruptcy Work
----------------------------------------------------------------
Eric Hornbeck at Bankruptcy Law360 reports that Dewey & LeBoeuf
LLP told a Delaware bankruptcy court Tuesday that it deserved a
$500,000 fee enhancement for its "Herculean" work on the Los
Angeles Dodgers baseball team's bankruptcy as the law firm itself
was collapsing.
Bankruptcy Law360 says Dewey, represented by its former attorneys
who are now with Jones Day, argued it deserved the bonus on top of
the $12.4 million it planned to request in its final fee
application because its work met the "rare and exceptional"
standard for fee enhancements.
About Dewey & LeBoeuf
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 LLP operated as a prestigious, New York City-
based, law firm that traced its roots to the 2007 merger of Dewey
Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird
-- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in
1929. In recent years, more than 1,400 lawyers worked at the firm
in numerous domestic and foreign offices.
At its peak, Dewey employed about 2,000 people with 1,300 lawyers
in 25 offices across the globe. When it filed for bankruptcy,
only 150 employees were left to complete the wind-down of the
business.
Dewey's offices in Hong Kong and Beijing are being wound down.
The partners of the separate partnership in England are in process
of winding down the business in London and Paris, and
administration proceedings in England were commenced May 28. All
lawyers in the Madrid and Brussels offices have departed. Nearly
all of the lawyers and staff of the Frankfurt office have
departed, and the remaining personnel are preparing for the
closure. The firm's office in Sao Paulo, Brazil, is being
prepared for closure and the liquidation of the firm's local
affiliate. The partners of the firm in the Johannesburg office,
South Africa, are planning to wind down the practice.
The firm's ownership interest in its practice in Warsaw, Poland,
was sold to the firm of Greenberg Traurig PA on May 11 for
$6 million. The Pension benefit Guaranty Corp. took $2 million of
the proceeds as part of a settlement.
Judge Martin Glenn oversees the case. Albert Togut, Esq., at
Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy
Solutions LLC serves as claims and notice agent. The petition was
signed by Jonathan A. Mitchell, chief restructuring officer.
JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the
lenders under the Revolver Agreement, hired Kramer Levin Naftalis
& Frankel LLP. JPMorgan, as Collateral Agent for the Revolver
Lenders and the Noteholders, hired FTI Consulting and Gulf
Atlantic Capital, as financial advisors. The Noteholders hired
Bingham McCutchen LLP as counsel.
The U.S. Trustee formed two committees -- one to represent
unsecured creditors and the second to represent former Dewey
partners. The creditors committee hired Brown Rudnick LLP led by
Edward S. Weisfelner, Esq., as counsel. The Former Partners hired
Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt &
Winters, LLP, as counsel.
About Los Angeles Dodgers
Los Angeles Dodgers LLC operates the Los Angeles Dodgers, a
professional Major League Baseball club in the Los Angeles
metropolitan area. Frank McCourt, a Boston real-estate developer
who unsuccessfully bid for the Boston Red Sox, bought the Dodgers
from Rupert Murdoch's Fox Entertainment Group Inc. in 2004 for
$330 million. Mr. McCourt also bought the Dodgers Stadium from
Fox for $100 million.
Los Angeles Dodgers LLC filed for bankruptcy protection (Bankr.
D. Del. Lead Case No. 11-12010) on June 27, 2011, after MLB
Commissioner Bud Selig rejected a television deal with News
Corp.'s Fox Sports, leaving Mr. McCourt unable to make payroll for
June 30 and July 1. Fox Sports has exclusive cable television
rights for Dodgers games until the end of 2013 baseball season.
Chapter 11 filings were also made for LA Real Estate LLC, an
affiliated entity which owns Dodger Stadium, and three other
related holding companies.
According to Forbes, the Dodgers is worth about $800 million,
making it the third most valuable baseball team after the New York
Yankees and the Boston Red Sox.
Judge Kevin Gross presides over the case. Lawyers at Young,
Conaway, Stargatt & Taylor and Dewey & LeBoeuf LLP serve as the
Debtors' bankruptcy counsel. Epiq Bankruptcy Solutions LLC is the
claims and notice agent. Public relations specialist Kekst and
Company has been hired for crisis support. Covington & Burling
LLP serves as special counsel.
An official committee of unsecured creditors has been appointed in
the case. The panel has tapped Lazard Freres & Co. as financial
adviser and investment banker, and Morrison & Foerster LLP and
Pinckney, Harris & Weidinger, LLC as counsel.
The LA Dodgers is the 12th sports team in North America to have
sought bankruptcy protection.
The reorganization is being financed with a $150 million unsecured
loan from the Commissioner of Major League Baseball. The loan
gives the Commissioner few of the controls lenders often demanded
from bankrupt companies.
The Dodgers emerged from bankruptcy on April 30, 2012. The plan
is based on a $2.15 billion sale of the baseball club and Dodger
Stadium to Guggenheim Baseball Management. The plan pays all
creditors in full, with the excess going to Mr. McCourt.
MBIA INSURANCE: Moody's Downgrades IFS Rating to 'Caa2'
-------------------------------------------------------
Moody's Investors Service has downgraded to Caa2, from B3, the
insurance financial strength rating of MBIA Insurance Corporation
(MBIA Corp.) and to Caa1, from B2, the senior debt rating of MBIA
Corp.'s parent company, MBIA Inc. The MBIA Corp. rating action
concludes a review initiated in December 2011. The ratings
outlooks for both companies are developing.
The rating actions have implications for various transactions
wrapped by MBIA Insurance Corporation as discussed later in this
press release.
RATING RATIONALE -- MBIA INSURANCE CORPORATION
Moody's stated that the downgrade of MBIA Corp. to Caa2, from B3,
reflected a number of factors:
1) The insurer's weak liquidity position. At September 30, 2012,
MBIA Corp. had approximately $386 million of liquid assets -- a
modest amount relative to the insurer's contingent liabilities;
2) Ongoing deterioration of MBIA's commercial real estate
portfolio that could lead to meaningful claims in the near future
and threaten MBIA's already strained liquidity;
3) The likelihood that any potential global settlement with Bank
of America over outstanding claims would be consummated at terms
characteristic of a distressed exchange;
4) The likelihood of a claims payment deferral or other regulatory
intervention at MBIA Corp. absent a settlement with Bank of
America should significant claims materialize.
Last week, Bank of America Corporation announced that it had made
a tender offer to purchase at par any and all of MBIA Inc.'s
outstanding senior notes due 2034. The tender offer follows MBIA's
announcement on November 7 that it would solicit consent from its
senior noteholders to amend its debt indentures by substituting
National Public Finance Guarantee Corporation for MBIA Corp. in
the definitions of "Restricted Subsidiary" and "Principal
Subsidiary." The proposed indenture amendments, if approved by
more than 50% of the noteholders of each series of MBIA Inc.
notes, would allow MBIA Inc. to avoid a default on its own debt if
MBIA Corp. were placed into a rehabilitation or liquidation
proceeding. BAC's tender offer on 13 November seeks to obtain
ownership of at least 50% of one series of MBIA notes in order to
block MBIA's consent solicitation.
The insurance financial strength rating of MBIA Mexico, S.A. de
C.V. was also downgraded to Caa2 (national scale rating of
Caa2.mx) with a developing outlook, given its reliance on the
support from MBIA Corp.
The developing outlook of MBIA Corp. reflects the meaningful
uncertainty faced by MBIA Corp. and the potential that a global
settlement between MBIA and Bank of America could lead to either
an improvement or deterioration in the credit profile of the
insurer, depending on the specific terms.
Rating Drivers -- MBIA Insurance Corporation
Moody's cited the following factors that could lead to a rating
upgrade for MBIA Insurance Corporation:
- A global settlement between Bank of America and MBIA that would
leave MBIA Corp. solvent
- Substantial improvements in MBIA Corp.'s commercial real estate
exposure that would limit its potential claims
- A meaningful capital infusion into MBIA Corp.
Moody's cited the following factors that could lead to a rating
downgrade for MBIA Insurance Corporation:
- Inability to reach a global settlement with Bank of America
that would leave MBIA corp. solvent
- Regulatory intervention that could reduce or disrupt payment of
claims, such as a payment deferral plan or rehabilitation, that
would cause significant loss severity to policyholders
incommensurate with the current rating
Not affected by the rating actions were MBIA UK Insurance Limited
(insurance financial strength of B3, under review for downgrade)
and National Public Finance Guarantee Corporation (MBIA National
financial strength of Baa2, negative outlook).
RATING RATIONALE -- MBIA INC.
The rating agency commented that the downgrade of MBIA Inc.'s
senior debt to Caa1 reflects:
1) The ongoing stress at MBIA Corp. and the risk of claims payment
deferral or other regulatory action including potentially a
rehabilitation or an insolvency proceeding, in the event that MBIA
and Bank of America cannot reach a global settlement that would
leave MBIA solvent;
2) The credit linkage between MBIA Inc. and its MBIA Corp.
subsidiary given the cross default provision in MBIA Inc.'s senior
debt indentures. A rehabilitation proceeding at MBIA Corp. is an
event of default;
3) The limited liquidity at MBIA Inc. relative to potential debt
repayments due under a possible cross default with MBIA Corp. At
September 30, 2012, MBIA Inc. had $432 million of liquid assets
and $897 million of senior notes outstanding;
4) Bank of America's recent tender offer on one class of MBIA
Inc.'s senior bonds which, if successful, could prevent MBIA from
completing a consent solicitation that would have removed the
cross default provision between MBIA Corp. and MBIA Inc.
The developing outlook of MBIA Inc., similar to the outlook on
MBIA Corp., reflects the divergent possibilities for its credit
profile over the near-to-medium term.
Rating Drivers -- MBIA Inc.
Moody's cited the following factors that could lead to a rating
upgrade for MBIA Inc.:
- A successful consent solicitation from MBIA that would further
delink MBIA Inc. from its MBIA Corp. subsidiary
- A material strengthening of MBIA Inc.'s liquidity through
dividends and/or potential capital raises
- A global settlement between MBIA and Bank of America that would
leave MBIA Corp. solvent
Moody's cited the following factors that could lead to a rating
downgrade for MBIA Inc.:
- Further deterioration at MBIA Corp. that increases the risks of
an insolvency proceeding
- A successful tender offer by Bank of America that would keep
the cross default provisions in debt indentures
- Further deterioration of MBIA Inc.'s liquidity
TREATMENT OF WRAPPED TRANSACTIONS
Moody's ratings on securities that are guaranteed or "wrapped" by
a financial guarantor are generally maintained at a level equal to
the higher of the following: a) the rating of the guarantor (if
rated at the investment grade level); or b) the published
underlying rating (and for structured securities, the outlined in
Moody's special comment entitled "Assignment of Wrapped Ratings
When Financial Guarantor Falls Below Investment Grade" (May 2008);
and Moody's November 10, 2008 announcement entitled "Moody's
Modifies Approach to Rating Structured Finance Securities Wrapped
by Financial Guarantors".
In light of the downgrade to Caa2 and developing outlook of MBIA
Insurance Corp.'s rating, Moody's will adjust the rating of
securities wrapped by MBIA Corp. based on the approach discussed
above.
LIST OF RATING ACTIONS
The following ratings have been downgraded:
MBIA Inc. -- senior unsecured debt to Caa1 developing, from B2
MBIA Insurance Corporation: Insurance financial strength to Caa2
developing, from B3; surplus notes to C (hyb) from Caa3 (hyb) ;
and preferred stock to C (hyb) from Ca (hyb)
MBIA Mexico S.A. de C.V. -- insurance financial strength to Caa2
developing, from B3; and national scale insurance financial
strength to Caa2.mx developing, from B1.mx
The last rating action was on December 19, 2011, when Moody's
downgraded MBIA Inc. to B2.
The principal methodology used in this rating was Moody's Rating
Methodology for the Financial Guaranty Insurance Industry,
published in September 2006.
OVERVIEW OF MBIA
MBIA Inc. provides financial guarantees to issuers in the
municipal and structured finance markets in the United States, as
well as internationally. MBIA also offers various complementary
services, such as investment management and municipal investment
contracts.
Moody's insurance financial strength ratings are opinions of the
ability of insurance companies to pay punctually senior
policyholder claims and obligations.
NOTE: Moody's National Scale Ratings (NSRs) are intended as
relative measures of creditworthiness among debt issues and
issuers within a country, enabling market participants to better
differentiate relative risks. NSRs differ from Moody's global
scale ratings in that they are not globally comparable with the
full universe of Moody's rated entities, but only with NSRs for
other rated debt issues and issuers within the same country. NSRs
are designated by a ".nn" country modifier signifying the relevant
country, as in ".mx" for Mexico. For further information on
Moody's approach to national scale ratings, please refer to
Moody's Rating Implementation Guidance published in October 2012
entitled "Mapping Moody's National Scale Ratings to Global Scale
Ratings.
MEDICAL ALARM: In Talks for Possible Expansion in China
-------------------------------------------------------
Medical Alarm Concepts Holdings, Inc., entered into negotiations
with an institutional investor that has expressed interest in
completing a strategic investment in the Company. This investment
would be used to expand current operations both domestically and
internationally, raise inventory levels and allow the Company
flexibility in negotiating tactical and strategic acquisitions.
On Nov. 6, 2012, the Company responded to a Request For Proposal
(RFP), which, if awarded, would include the opening of an office
in the People's Republic of China and a possible additional
strategic investment in the Company. This strategic investment,
if consummated, would be utilized to expand both international and
domestic distribution of the MediPendant product and associated
monitoring services, and to expand working capital balances.
About Medical Alarm
Plymouth Meeting, Pa.-based Medical Alarm Concepts Holding, Inc.,
utilizes new technology in the medical alarm industry to provide
24-hour personal response monitoring services and related products
to subscribers with medical or age-related conditions.
The Company's balance sheet at March 31, 2011, showed
$1.40 million in total assets, $3.41 million in total liabilities,
and a $2 million total stockholders' deficit. As of March 31,
2011, the Company had $0 in cash.
The Company said in its quarterly report for the period ended
March 31, 2012, that "We believe we cannot satisfy our cash
requirements for the next twelve months with our current cash and,
unless we receive additional financing, we may be unable to
proceed with our plan of operations. We do not anticipate the
purchase or sale of any significant equipment. We also do not
expect any significant additions to the number of our employees.
The foregoing represents our best estimate of our cash needs based
on current planning and business conditions. Additional funds are
required, and unless we receive proceeds from financing, we may
not be able to proceed with our business plan for the development
and marketing of our core services. Should this occur, we will
suspend or cease operations."
"We anticipate incurring operating losses in the foreseeable
future. Therefore, our auditors have raised substantial doubt
about our ability to continue as a going concern."
MEDICAL CARD: S&P Keeps 'CCC' Counterparty Credit Rating on Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services said its 'CCC' long-tern
counterparty credit rating on Medical Card System Inc. (MCS)
remains on CreditWatch with developing implications, where
we initially placed it on July 26, 2012. "The 'B' long-term
financial strength and counterparty credit ratings on MCS's
operating companies, MCS Advantage Inc., MCS Life Insurance Co.,
and MCS Health Management Options Inc. also remain on CreditWatch
with developing implications," S&P said.
"The continuing CreditWatch reflects our expectation that MCS will
improve its financial profile through positive operating results
in 2012, compared with losses in 2011 and first-quarter 2012,"
said Standard & Poor's credit analyst Neal Freedman. "This
expectation is based on the company's positive operating results
for second-quarter 2012 and further significant improvement in
third-quarter 2012. This improvement is driven by various
corrective actions taken by the company's new senior management
team, which joined the company in December 2011 and includes
enhanced medical-management capabilities and an improved financial
infrastructure. Furthermore, management is meeting regularly with
the lending group regarding potential waivers or revisions to
the credit agreement to avoid a liquidity event, and we expect
audited year-end 2011 financial statements to be available in
December 2012."
"We could raise or lower the ratings on MCS and its operating
companies in connection with its operating performance and its
lender negotiations. Improved operating performance and a near-
term successful lender negotiation could result in a one-notch or
more upgrade. Conversely, if the company produced operating losses
in 2012 or if lender negotiations prove unsuccessful beyond the
near term, we could lower the ratings by one or more notches," S&P
said.
MEDYTOX SOLUTIONS: Delays Q3 Form 10-Q for Limited Resources
------------------------------------------------------------
Medytox Solutions, Inc., notified the U.S. Securities and Exchange
Commission it cannot file its quarterly report on Form 10-Q for
the quarter ended Sept. 30, 2012, within the prescribed time
period because of delays in completing the preparation of its
financial statements and management's discussion and analysis in
light of the Company's limited financial resources, personnel and
accounting expertise available for this purpose.
About Medytox Solutions
West Palm Beach, Florida-based Medytox Solutions, Inc., formerly
Casino Players, Inc., is a provider of laboratory services
specializing in providing blood and urine drug toxicology to
physicians, clinics and rehabilitation facilities in the United
States.
Peter Messineo, CPA, in Palm Harbor, Florida, expressed
substantial doubt about Medytox Solutions' ability to continue as
a going concern following the 2011 financial results. The
independent auditor noted that the Company has an accumulated
deficit and negative cash flows from operations, and additionally,
there is certain litigation involving a consolidated entity which
is unresolved.
The Company reported net income of $92,701 of $3.99 million of
revenues for 2011, compared with a net loss of $327,041 on
$77,591 of revenues for 2010.
The Company's balance sheet at March 31, 2012, showed $3.90
million in total assets, $6.06 million in total liabilities and a
$2.15 million total stockholders' deficit.
MF GLOBAL: Commodities Customer Can't Get Priority Status
---------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that U.S. District Judge
Katherine B. Forrest upheld a bankruptcy judge's ruling that
commodity customers of MF Global Inc. shouldn't be allowed to jump
ahead of other creditors in parent company MF Global Holdings
Ltd.'s Chapter 11 case.
About MF Global
New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/
-- is one of the world's leading brokers of commodities and
listed derivatives. MF Global provides access to more than 70
exchanges around the world. The firm is also one of 22 primary
dealers authorized to trade U.S. government securities with the
Federal Reserve Bank of New York. MF Global's roots go back
nearly 230 years to a sugar brokerage on the banks of the Thames
River in London.
MF Global Holdings Ltd. and MF Global Finance USA Inc. filed
voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-
15059 and 11-5058) on Oct. 31, 2011, after a planned sale to
Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF
Global had $41,046,594,000 in total assets and $39,683,915,000 in
total liabilities. It is easily the largest bankruptcy filing so
far this year.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of
MF Global Finance USA Inc.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at
Hughes Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.
U.S. regulators are investigating about $633 million missing from
MF Global customer accounts, a person briefed on the matter said
Nov. 3, according to Bloomberg News.
MIT HOLDING: Delays Form 10-Q for Third Quarter for Review
----------------------------------------------------------
MIT Holding, Inc., notified the U.S. Securities and Exchange
Commission it will be delayed in filing its quarterly report on
Form 10-Q for the period ended Sept. 30, 2012, because the review
of the Company's financial statements for the quarter ending
March 31, 2012, has not been completed.
MIT Holding distributes wholesale pharmaceuticals, administers
intravenous infusions, operates an ambulatory center where
therapies are administered and sells and rents home medical
equipment.
At June 30, 2012, the Company had negative working capital of
$2.0 million. From inception, the Company has incurred an
accumulated deficit of $10.6 million. "These factors raise
substantial doubt as to the Company's ability to continue as a
going concern."
MMRGLOBAL INC: Incurs $1.5 Million Net Loss in Third Quarter
------------------------------------------------------------
MMRGlobal, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $1.52 million on $345,821 of total revenues for the three
months ended Sept. 30, 2012, compared with a net loss of $2.14
million on $352,058 of total revenues for the same period during
the prior year.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss of $4.48 million on $717,398 of total revenues, compared
with a net loss of $6.24 million on $1.08 million of total
revenues for the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed
$2.02 million in total assets, $8.48 million in total liabilities,
and a $6.45 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/Cr5Urq
About MMRGlobal
Los Angeles, Calif.-based MMR Global, Inc. (OTC BB: MMRF)
-- http://www.mmrglobal.com/-- through its wholly-owned operating
subsidiary, MyMedicalRecords, Inc., provides secure and easy-to-
use online Personal Health Records (PHRs) and electronic safe
deposit box storage solutions, serving consumers, healthcare
professionals, employers, insurance companies, financial
institutions, and professional organizations and affinity groups.
In the auditors' report accompanying the financial statements for
year ended Dec. 31, 2011, Rose, Snyder & Jacobs LLP, in Encino,
California, expressed substantial doubt about the Company's
ability to continue as a going concern. The independent auditors
noted that the Company has incurred significant operating losses
and negative cash flows from operations during the years ended
Dec. 31, 2011, and 2010.
The Company reported a net loss of $8.88 million in 2011, compared
with a net loss of $17.90 million in 2010. The Company reported a
net loss of $10.3 million in 2009.
NETWORK CN: Incurs $664,700 Net Loss in Third Quarter
-----------------------------------------------------
Network CN Inc. filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $664,759 on $356,480 of advertising services revenues for the
three months ended Sept. 30, 2012, compared with a net loss of
$420,990 on $458,770 of advertising services revenues for the same
period during the prior year.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss of $129,812 on $1.29 million of advertising services
revenues, compared with a net loss of $1.69 million on $1.17
million of advertising services revenues for the same period a
year ago.
The Company's balance sheet at Sept. 30, 2012, showed $634,095 in
total assets, $4.03 million in total liabilities, and a
$3.40 million in total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/CVlvUo
About Network CN
Causeway, Hong Kong-based Network CN Inc. operates in one single
business segment: Media Network, providing out-of home advertising
services.
As reported in the TCR on April 18, 2012, Baker Tilly Hong Kong
Limited, in Hong Kong SAR, expressed substantial doubt about
Network CN's ability to continue as a going concern, following the
Company's results for the fiscal year ended Dec. 31, 2011. The
independent auditors noted that the Company has incurred net
losses of $2,102,548, $2,603,384 and $37,383,361 for the years
ended Dec. 31, 2011, 2010, and 2009, respectively. "Additionally,
the Company used net cash in operating activities of $388,278,
$1,552,403 and $5,428,273 for the years ended Dec. 31, 2011, 2010,
and 2009, respectively. "As of Dec. 31, 2011, and 2010, the
Company recorded stockholders' deficit of $5,056,418 and
$3,524,536 respectively.
NEWPAGE CORP: Creditors Demand Docs on Cerberus Deal
----------------------------------------------------
Lance Duroni at Bankruptcy Law360 reports that NewPage Corp.'s
unsecured creditors demanded Tuesday that the Company turn over
documents on a proposed settlement with its majority owner
Cerberus Capital Management LP, alleging the deal gives up
valuable claims against the private equity firm for little in
return.
About NewPage Corp
Headquartered in Miamisburg, Ohio, NewPage Corporation was the
leading producer of printing and specialty papers in North
America, based on production capacity, with $3.6 billion in net
sales for the year ended Dec. 31, 2010. NewPage owns paper mills
in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and
Nova Scotia, Canada.
NewPage Group, NewPage Holding, NewPage, and certain of their U.S.
subsidiaries commenced Chapter 11 voluntary cases (Bankr. D. Del.
Case Nos. 11-12804 through 11-12817) on Sept. 7, 2011. Its
subsidiary, Consolidated Water Power Company, is not a part of the
Chapter 11 proceedings.
Separately, on Sept. 6, 2011, its Canadian subsidiary, NewPage
Port Hawkesbury Corp., brought a motion before the Supreme Court
of Nova Scotia to commence proceedings to seek creditor protection
under the Companies' Creditors Arrangement Act of Canada. NPPH is
under the jurisdiction of the Canadian court and the court-
appointed Monitor, Ernst & Young in the CCAA Proceedings.
Initial orders were issued by the Supreme Court of Nova Scotia on
Sept. 9, 2011 commencing the CCAA Proceedings and approving a
settlement and transition agreement transferring certain current
assets to NewPage against a settlement payment of $25 million and
in exchange for being relieved of all liability associated with
NPPH. On Sept. 16, 2011, production ceased at NPPH.
NewPage originally engaged Dewey & LeBoeuf LLP as general
bankruptcy counsel. In May 2012, Dewey dissolved and commenced
its own Chapter 11 case. Dewey's restructuring group led by
Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M.
Abelson, Esq., moved to Proskauer Rose LLP. In June, NewPage
sought to hire Proskauer as replacement counsel.
NewPage is also represented by Laura Davis Jones, Esq., at
Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, as
co-counsel. Lazard Freres & Co. LLC is the investment banker, and
FTI Consulting Inc. is the financial advisor. Kurtzman Carson
Consultants LLC is the claims and notice agent.
In its balance sheet, NewPage disclosed $3.4 billion in assets and
$4.2 billion in total liabilities as of June 30, 2011.
The Official Committee of Unsecured Creditors selected Paul
Hastings LLP as its bankruptcy counsel and Young Conaway Stargatt
& Taylor, LLP to act as its Delaware and conflicts counsel.
An affiliate, Newpage Wisconsin System Inc., disclosed
$509,180,203 in liabilities in its schedules.
NORTHAMPTON GENERATING: Remains Mum on Contours of Plan
-------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Northampton Generating Co. still doesn't give a hint
about when there will be a reorganization plan or what it will
look like. Last week the company filed papers with the U.S.
Bankruptcy Court in Charlotte, North Carolina, seeking a one-month
extension until Jan. 18 of the exclusive right to propose a plan.
The company again said it's continuing to analyze options
regarding a reorganization plan. The hearing on the exclusivity
motion will take place Dec. 1.
About Northampton Generating
Northampton Generating Co. LP is the owner of a 112 megawatt
electric generating plant in Northampton, Pennsylvania. The plant
is fueled with waste products, including waste coal, fiber waste,
and tires. The power is sold under a long-term agreement to an
affiliate of FirstEnergy Corp.
Northampton Generating filed for Chapter 11 bankruptcy (Bankr.
W.D.N.C. Case No. 11-33095) on Dec. 5, 2011. Hillary B. Crabtree,
Esq., and Luis Manuel Lluberas, Esq., at Moore & Van Allen PLLC,
in Charlotte, N.C., serve as counsel to the Debtors. Houlihan
Lokey Capital, Inc., is the financial advisor.
The Debtor disclosed $205,049,256 in assets and $121,515,045 in
liabilities as of the Chapter 11 filing.
No request for the appointment of a trustee or examiner has been
made, and no statutory committee or trustee has been appointed in
the case.
NORTHCORE TECHNOLOGIES: Incurs C$535K Loss in Third Quarter
-----------------------------------------------------------
Northcore Technologies Inc. reported a loss and comprehensive loss
of C$535,000 on C$387,000 of revenue for the three months ended
Sept. 30, 2012, compared with a loss and comprehensive loss of
C$820,000 on C$203,000 of revenue for the same period during the
prior year.
For the nine months ended Sept. 30, 2012, the Company reported a
loss and comprehensive loss of C$1.82 million on C$1.03 million of
revenue, compared with a loss and comprehensive loss of C$3.27
million on C$573,000 of revenue for the same period during the
prior year.
The Company's balance sheet at Sept. 30, 2012, showed C$3.49
million in total assets, C$1.27 million in total liabilities and
C$2.21 million in total shareholders' equity.
"Our focus continues to be on building shareholder value through
our enterprise and social commerce offerings," said Amit Monga,
CEO of Northcore Technologies. "We are working closely with the
Envision team to bid on larger projects and increase our presence
in Ottawa. In the coming months, we plan to launch platforms
exploiting our proprietary intellectual property for variety of
industry verticals."
A copy of the press release is available for free at:
http://is.gd/D20jKo
About Northcore Technologies
Toronto, Ontario-based Northcore Technologies Inc. (TSX: NTI; OTC
BB: NTLNF) -- http://www.northcore.com/-- provides a Working
Capital Engine(TM) that helps organizations source, manage,
appraise and sell their capital equipment. Northcore offers its
software solutions and support services to a growing number of
customers in a variety of sectors including financial services,
manufacturing, oil and gas and government.
Northcore owns 50% of GE Asset Manager, LLC, a joint business
venture with GE. Together, the companies work with leading
organizations around the world to help them liberate more capital
value from their assets.
The Company reported a loss and comprehensive loss of
C$3.93 million in 2011, compared with a loss and comprehensive
loss of C$3.03 million in 2010.
NSG HOLDINGS: S&P Assigns Preliminary 'BB' Corp. Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'BB'
corporate credit rating to NSG Holdings LLC. The outlook is
stable. "At the same time, we assigned a preliminary 'BB+' issue
rating to the proposed $146 million term loan facility maturing
2019 with a preliminary recovery rating of '2'. The '2'
preliminary rating indicates a substantial recovery (70% to 90%)
if a default occurs," S&P said.
The ratings on NSGH reflect an "aggressive" financial risk profile
marked by high debt balances following the dividend
capitalization. "Although the dividend recapitalization weakens
the financial measures for 2012 from the improved 2011 levels,
almost pushing it back to 'highly leveraged', we expect that the
measures will strengthen in line with 'aggressive' in 2013 and
2014 driven by amortization of the project-level debt and the debt
at NSGH. We view NSG's business risk profile as 'satisfactory,'
reflecting the company's strong long-term contracted revenue
profile (86% of revenues and 94% of distributions are contracted
until the debt matures in 2025) with creditworthy counterparties,
favorable fuel supply contracts, and known operating track record,
tempered by the company's moderate portfolio diversity," S&P said.
NSGH is a wholly owned subsidiary of Northern Star Generation LLC,
which owns or has beneficial interest in eight electric generation
facilities that consist of about 1,400 megawatts of units fueled
with natural gas, coal, waste coal, and distillate fuel oil, with
a net ownership of 1,135 MW. The facilities are in four states,
and currently all but one have power purchase agreements (PPA) or
tolling agreements that expire between 2015 and 2027. Cambria
operates as a merchant power facility in the PJM day-ahead market,
following the expiry of its PPA," S&P said.
"The stable outlook reflects our expectation that the dividend
recapitalization reflects the one-time monetization of future
benefits of the commencement in June 2012 of the credit-
supportive, long-term power sale for Vandolah," S&P said.
"We expect the company to improve its current capital structure
over the next two years, such that by 2014 it is comfortably below
5x, although we expect it to be slightly above this level in
2013," said Standard & Poor's credit analyst Trevor D'Olier-Lees.
"This should be achievable with no additional issuance of holding
company debt and reflects the benefits of debt amortization at the
project level. We also expect adjusted funds from operations to
total debt to slightly improve to 13% to 14% over the next two
years. We would lower the ratings if leverage does not trend down
after this year, and if funds from operations to total debt
consistently stays below 12% in 2013 and 2014. This would most
likely occur if NSGH exercised its flexibility to raise additional
debt, but could also be caused by a sharp increase in gas prices
for the company's unhedged position or a decrease in energy
revenues driven by a decline in coal prices, which we do not
anticipate. We could raise the rating if the company's financial
profile is more in line with 'significant', with debt/EBITDA of
less than 4x and funds from operations to total debt of at least
20%. Such improvement would likely result from an asset sale that
lowers debt," S&P said.
ODYSSEY PICTURES: Delays Form 10-Q for Sept. 30 Quarter
-------------------------------------------------------
Odyssey Pictures Corporation has not been able to compile all of
the requisite formatted financial data and narrative information
necessary for it to have sufficient time to complete its quarterly
report on Form 10-Q for the interim period ended Sept. 30, 2012,
without unreasonable effort or expense. The Form 10-Q will be
filed as soon as reasonably practicable and in no event later than
Nov. 20, 2012.
About Odyssey
Plano, Tex.-based Odyssey Pictures Corp., during the nine months
ended March 31, 2012, realized revenues from the sale of branding
and image design products and media placement services. The
Company's ongoing operations have consisted of the sale of these
branding and image design products, increasing media inventory,
productions in progress and development of IPTV Technology and
related services.
The Company reported net income to the Company of $34,775 for the
year ended June 30, 2012, compared with net income to the Company
of $60,400 during the prior fiscal year.
Patrick Rodgers, CPA, PA, in Altamonte Springs, Florida, issued a
"going concern" qualification on the consolidated financial
statements for the year ended June 30, 2012. The independent
auditors noted that the Company may not have adequate readily
available resources to fund operations through June 30, 2013,
which raises substantial doubt about the Company's ability to
continue as a going concern.
OMTRON USA: Meeting to Form Creditors' Panel on Nov. 29
-------------------------------------------------------
Roberta A. DeAngelis, the United States Trustee for Region 3, will
hold an organizational meeting on November 29, 2012, at 12:00 p.m.
in the bankruptcy case of Omtron USA, LLC. The meeting will be
held at:
J. Caleb Boggs Federal Building
844 King Street, Room 5209
Wilmington, DE 19801
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' case.
The organizational meeting is not the meeting of creditors
pursuant to Section 341 of the Bankruptcy Code. A representative
of the Debtor, however, may attend the Organizational Meeting, and
provide background information regarding the bankruptcy cases.
To increase participation in the Chapter 11 proceeding, Section
1102 of the Bankruptcy Code requires that the United States
Trustee appoint a committee of unsecured creditors as soon as
practicable. The Committee ordinarily consists of the persons,
willing to serve, that hold the seven largest unsecured claims
against the debtor of the kinds represented on the committee.
Section 1103 of the Bankruptcy Code provides that the Committee
may consult with the debtor, investigate the debtor and its
business operations and participate in the formulation of a plan
of reorganization. The Committee may also perform other services
as are in the interests of the unsecured creditors whom it
represents.
Omtron USA, LLC filed a Chapter 11 petition (Bankr. D. Del. Case
No. 12-13076) on Nov. 9, 2012, in Delaware. John H. Strock, III,
Esq., at Fox Rothschild LLP, in Wilmington, Delaware, serves as
counsel to the Debtor. The Debtor estimated up to $50 million in
both assets and liabilities.
ORAGENICS INC: Incurs $2.5 Million Net Loss in Third Quarter
------------------------------------------------------------
Oragenics, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $2.55 million on $264,248 of net revenues for the three months
ended Sept. 30, 2012, compared with a net loss of $1.80 million on
$350,351 of net revenues for the same period during the prior
year.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss of $11.10 million on $901,182 of net revenues, compared
with a net loss of $5.73 million on $1.04 million of net revenues
for the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $12.58
million in total assets, $1.75 million in total liabilities, all
current, and $10.83 million in total shareholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/NcvXUM
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 on the Company's 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.
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.
OSAGE EXPLORATION: Reports $251,000 Net Income in 3rd Quarter
-------------------------------------------------------------
Osage Exploration and Development, Inc., filed with the U.S.
Securities and Exchange Commission its quarterly report on Form
10-Q disclosing net income of $250,976 on $1.85 million of total
operating revenues for the three months ended Sept. 30, 2012,
compared with a net loss of $142,787 on $854,200 of total
operating revenues for the same period during the prior year.
For the nine months ended Sept. 30, 2012, the Company reported net
income of $93,518 on $4.57 million of total operating revenues,
compared with net income of $2.56 million on $2.45 million of
total operating revenues for the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $13.19
million in total assets, $5.16 million in total liabilities and
$8.03 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/PMl9wt
About Osage Exploration
Based in San Diego, California with production offices in Oklahoma
City, Oklahoma, and executive offices in Bogota, Colombia, Osage
Exploration and Development, Inc. (OTC BB: OEDV) --
http://www.osageexploration.com/-- is an independent exploration
and production company with interests in oil and gas wells and
prospects in the US and Colombia.
GKM, LLP, in Encino, California, expressed substantial doubt about
the Company's ability to continue as a going concern following the
Company's 2011 financial results. The independent auditors noted
that the Company has suffered recurring losses from operations and
has an accumulated deficit as of Dec 31, 2011.
Bankruptcy Warning
Management of the Company has undertaken steps as part of a plan
to improve operations with the goal of sustaining the Company's
operations for the next 12 months and beyond. These steps include
(a) assigning a portion of the Company's oil and gas leases in
Logan County, Oklahoma (b) participating in drilling of wells in
Logan County, Oklahoma within the next 12 months, (c) controlling
overhead and expenses and (d) raising additional equity or debt.
There is no assurance the Company can accomplish these steps and
it is uncertain the Company will achieve profitable operations and
obtain additional financing. There is no assurance additional
financings will be available to the Company on satisfactory terms
and conditions, if at all. If the Company is unable to continue
as a going concern, the Company may elect or be required to seek
protection from its creditors by filing a voluntary petition in
bankruptcy or may be subject to an involuntary petition in
bankruptcy.
OSAGE EXPLORATION: Peter Hoffman Discloses 8% Equity Stake
----------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Peter Hoffman, Jr., disclosed that, as of
Oct. 4, 2012, he beneficially owns 3,871,741 shares of common
stock of Osage Exploration and Development, Inc., representing 8%
of the shares outstanding. Mr. Hoffman previously reported
beneficial ownership of 4,768,634 common shares or a 9.9% equity
stake as of June 13, 2012. A copy of the amended filing is
available for free at http://is.gd/lStOYd
About Osage Exploration
Based in San Diego, California with production offices in Oklahoma
City, Oklahoma, and executive offices in Bogota, Colombia, Osage
Exploration and Development, Inc. (OTC BB: OEDV) --
http://www.osageexploration.com/-- is an independent exploration
and production company with interests in oil and gas wells and
prospects in the US and Colombia.
GKM, LLP, in Encino, California, expressed substantial doubt about
the Company's ability to continue as a going concern following the
Company's 2011 financial results. The independent auditors noted
that the Company has suffered recurring losses from operations and
has an accumulated deficit as of Dec 31, 2011.
The Company's balance sheet at Sept. 30, 2012, showed $13.19
million in total assets, $5.16 million in total liabilities and
$8.03 million in total stockholders' equity.
Bankruptcy Warning
Management of the Company has undertaken steps as part of a plan
to improve operations with the goal of sustaining the Company's
operations for the next 12 months and beyond. These steps include
(a) assigning a portion of the Company's oil and gas leases in
Logan County, Oklahoma (b) participating in drilling of wells in
Logan County, Oklahoma within the next 12 months, (c) controlling
overhead and expenses and (d) raising additional equity or debt.
There is no assurance the Company can accomplish these steps and
it is uncertain the Company will achieve profitable operations and
obtain additional financing. There is no assurance additional
financings will be available to the Company on satisfactory terms
and conditions, if at all. If the Company is unable to continue
as a going concern, the Company may elect or be required to seek
protection from its creditors by filing a voluntary petition in
bankruptcy or may be subject to an involuntary petition in
bankruptcy.
OVERSEAS SHIPHOLDING: Meeting to Form Creditors' Panel on Nov. 28
-----------------------------------------------------------------
Roberta A. DeAngelis, the United States Trustee for Region 3, will
hold an organizational meeting on Nov. 28, 2012, at 11:30 a.m. in
the bankruptcy case of Overseas Shipholding Group Inc., et al. The
meeting will be held at:
The Hotel Dupont
11th and Markets Streets
Wilmington, DE 19801
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' case.
The organizational meeting is not the meeting of creditors
pursuant to Section 341 of the Bankruptcy Code. A representative
of the Debtor, however, may attend the Organizational Meeting, and
provide background information regarding the bankruptcy cases.
To increase participation in the Chapter 11 proceeding, Section
1102 of the Bankruptcy Code requires that the United States
Trustee appoint a committee of unsecured creditors as soon as
practicable. The Committee ordinarily consists of the persons,
willing to serve, that hold the seven largest unsecured claims
against the debtor of the kinds represented on the committee.
Section 1103 of the Bankruptcy Code provides that the Committee
may consult with the debtor, investigate the debtor and its
business operations and participate in the formulation of a plan
of reorganization. The Committee may also perform other services
as are in the interests of the unsecured creditors whom it
represents.
Overseas Shipholding Group, Inc., filed a Chapter 11 petition
(Bankr. D. Del. Case No. 12-20000) on Nov. 14, 2012. James L.
Bromley, Esq., and Luke A. Barefoot, Esq., at Cleary Gottlieb
Steen & Hamilton LLP, serve as counsel to the Debtor. The Debtor
posted $4,151,334,000 in assets and $2,674,281,000 in liabilities.
PACIFIC GOLD: Incurs $2.6 Million Net Loss in Third Quarter
-----------------------------------------------------------
Pacific Gold Corp. filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $2.58 million on $82,457 of total revenue for the three months
ended Sept. 30, 2012, compared with a net loss of $14,620 on
$71,019 of total revenue for the same period during the prior
year.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss of $5.72 million on $161,115 of total revenue, compared
with a net loss of $726,467 on $71,019 of total revenue for the
same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $1.61
million in total assets, $5.12 million in total liabilities and a
$3.51 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/QJutpP
About Pacific Gold
Las Vegas, Nev.-based Pacific Gold Corp. is engaged in the
identification, acquisition, and development of prospects believed
to have gold mineralization. Pacific Gold through its
subsidiaries currently owns claims, property and leases in Nevada
and Colorado.
In the auditors' report accompanying the consolidated financial
statements for the year ended Dec. 31, 2011, Silberstein Ungar,
PLLC, in Bingham Farms, Michigan, expressed substantial doubt
about the Company's ability to continue as a going concern. The
independent auditors noted that the Company has incurred losses
from operations, has negative working capital and is in need of
additional capital to grow its operations so that it can become
profitable.
The Company reported a net loss of $1.38 million in 2011, compared
with a net loss of $985,278 in 2010.
PATRIOT COAL: Gets 6-Month Extension to File Ch. 11 Plan
--------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that U.S. Bankruptcy
Judge Shelley C. Chapman granted Patriot Coal Corp. a six-month
extension of its exclusive right to file a Chapter 11 plan
Thursday, which the debtor had argued was necessary to let it
avoid having to formulate a reorganization plan prematurely.
Bankruptcy Law360 relates that Judge Shelley C. Chapman granted
Patriot's Oct. 18 request for a 180-day extension of the
exclusivity period under Section 1121(d) of the Bankruptcy Code,
giving the company and its 98 affiliated debtors until May 5 to
file a plan.
About Patriot Coal
St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer
and marketer of coal in the eastern United States, with 13 active
mining complexes in Appalachia and the Illinois Basin. The
Company ships to domestic and international electricity
generators, industrial users and metallurgical coal customers, and
controls roughly 1.9 billion tons of proven and probable coal
reserves.
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. GCG, Inc. serves as claims and noticing
agent.
The case has been assigned to Judge Shelley C. Chapman.
The U.S. Trustee appointed a seven-member creditors committee.
PAUL KEMSLEY: Seeks Ch. 15; Barclays' $8-Mil. Suit on Hold
----------------------------------------------------------
Eric Hornbeck at Bankruptcy Law360 reports that a New York state
judge on Wednesday postponed Barclays Bank PLC's attempts to
collect on an $8 million loan it made to a British property
developer and professional soccer executive, giving him time to
pursue possible bankruptcy protection.
Bankruptcy Law360 relates that Judge Barbara R. Kapnick said
during a hearing that she had put the case off for another month
while U.S. Bankruptcy Judge James M. Peck considers a Chapter 15
bankruptcy petition from Paul Kemsley, a former CEO of the revived
New York Cosmos soccer franchise.
PAYMENT DATA: Reports $626,700 Net Income in Third Quarter
----------------------------------------------------------
Payment Data Systems, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
net income of $626,742 on $2.33 million of revenue for the three
months ended Sept. 30, 2012, compared with net income of $262,541
on $1.43 million of revenue for the same period during the prior
year.
For the nine months ended Sept. 30, 2012, the Company reported net
income of $800,120 on $5.09 million of revenue, compared with a
net loss of $119,958 on $2.99 million of revenue for the same
period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $4.47
million in total assets, $2.80 million in total liabilities, all
current, and $1.67 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/8P2itE
About Payment Data Systems
San Antonio, Tex.-based Payment Data Systems, Inc. provides
integrated electronic payment processing services to merchants and
businesses, including credit and debit card-based processing
services and transaction processing via the Automated
Clearinghouse Network. The Company also operates an online
payment processing service for consumers under the domain name
http://www.billx.com/through which consumers can pay anyone.
PENN NATIONAL: REIT Plan No Impact on Moody's Ratings
-----------------------------------------------------
Moody's Investors Service said Penn National Gaming Inc.'s ratings
are not affected by the company's announcement that it intends to
pursue a plan to separate its gaming operating assets and real
property assets into two publicly traded companies.
The principal methodology used in rating Penn National Gaming Inc.
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.
As reported by the Troubled Company Reporter on Oct. 19, 2012,
Moody's raised Penn National Gaming, Inc.'s Corporate Family and
Probability of Default ratings to Ba1 from Ba2, and the company's
$325 million 8 3/4% senior subordinated notes to Ba2 from B1.
Penn's Ba1 senior secured credit facilities rating were affirmed.
The rating outlook was changed to stable from positive following
the rating upgrade.
Penn National Gaming, Inc. owns, manages, or has ownership
interests in twenty-seven gaming and pari-mutuel facilities in the
following nineteen jurisdictions: Colorado, Florida, Illinois,
Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Mississippi,
Missouri, Nevada, New Jersey, New Mexico, Ohio, Pennsylvania,
Texas, West Virginia, and Ontario.
PFI HOSPITALITY: Cornerstone Bank Forecloses on Hotel
-----------------------------------------------------
Bill Bowden at Arkansas Democrat-Gazette reports that Cornerstone
Bank of Eureka Springs took possession of Harrison's Hotel Seville
after PFI Hospitality was unable to find a buyer for the 83-year
old building.
The report relates the three-story, 57-room Spanish revival hotel
will be closed until spring, while the bank searches for a buyer
or property-management company, said Charles Cross, president and
CEO of Cornerstone.
According to the report, PFI Hospitality owed $1.6 million to the
bank on a first mortgage loan and $1.2 million to the U.S. Small
Business Administration on a second mortgage. Mr. Cross said the
bank will try to sell the hotel to recoup the amount it is owed,
which is now "a little more" than stated in the bankruptcy filing.
The report notes the previous owners spent about $3.5 million on
the project.
The report says PFI Hospitality bought the hotel in 2008 for
$600,000 and spent about $2.9 million renovating it, said Jack
Moyer, one of the majority investors in the group. PFI
Hospitality was asking $2.1 million for the Seville. In lieu of a
buyer, the group also was seeking an investor willing to pay
$250,000 and guarantee the debt.
The report relates Mr. Cross said the bank may find a buyer before
Spring. He said he's been talking to three potential buyers, all
of whom have experience in the hotel business.
Based in Eureka Springs, Arkansas, PFI Hospitality, Inc., dba The
1929 Hotel Seville filed for Chapter 11 protection on May 10, 2012
(Bankr. W.D. Ark. Case No. 12-71888). Stanley V. Bond, Esq., at
Bond Law Office, represents the Debtor. The Debtor estimated both
assets and debts of between $1 million and $10 million.
PHYSICAL PROPERTY: Incurs HK$101,000 Net Loss in 3rd Quarter
------------------------------------------------------------
Physical Property Holdings Inc. filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss and total comprehensive loss of HK$101,000 on
HK$248,000 of total operating revenues for the three months ended
Sept. 30, 2012, compared with a net loss and total comprehensive
loss of HK$110,000 on HK$203,000 of total operating revenues for
the same period during the prior year.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss and total comprehensive loss of HK$373,000 on HK$624,000
of total operating revenues, compared with a net loss and total
comprehensive loss of HK$381,000 on HK$604,000 total operating
revenues for the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed HK$10.06
million in total assets, HK$11.45 million in total liabilities,
all current, and a HK$1.39 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/PsLAKu
About Physical Property
Physical Property Holdings Inc. (formerly known as Physical Spa &
Fitness Inc.), through its wholly-owned subsidiary Good Partner
Limited, owns five residential apartments located in Hong Kong.
The Company was incorporated on Sept. 21, 1988, under the laws
of the United States of America.
In the auditors' report accompanying the consolidated financial
statements for the year ended Dec. 31, 2011, Mazars CPA Limited,
in Hongkong, noted that the Company had a negative working capital
as of Dec. 31, 2011, and incurred loss for the year then ended,
which raised substantial doubt about its ability to continue as a
going concern.
PINNACLE AIRLINES: Seeks Approval of Restructuring Term Sheet
-------------------------------------------------------------
BankruptcyData.com reports that Pinnacle Airlines filed with the
U.S. Bankruptcy Court a motion for authorization to perform under
certain restructuring term sheets with the Association of Flight
Attendants and the Transport Workers Union. The restructuring
term sheets provide for reductions in pay and benefits and
modifications to work rules that the Debtors expect will result in
annual labor cost savings to Pinnacle of approximately
$6.4 million under the flight attendant restructuring term sheet
and $288,049 under the dispatcher restructuring term sheet. The
Court scheduled a Nov. 28, 2012 hearing on the matter.
About Pinnacle Airlines
Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/--
a $1 billion airline holding company with 7,800 employees, is the
parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.;
and Colgan Air, Inc. Flying as Delta Connection, United Express
and US Airways Express, Pinnacle Airlines Corp. operating
subsidiaries operate 199 regional jets and 80 turboprops on more
than 1,540 daily flights to 188 cities and towns in the United
States, Canada, Mexico and Belize. Corporate offices are located
in Memphis, Tenn., and hub operations are located at 11 major U.S.
airports.
Pinnacle Airlines Inc. and its affiliates, including Colgan Air,
Mesaba Aviation Inc., Pinnacle Airlines Corp., and Pinnacle East
Coast Operations Inc. filed for Chapter 11 bankruptcy (Bankr.
S.D.N.Y. Lead Case No. 12-11343) on April 1, 2012.
Judge Robert E. Gerber presides over the case. Lawyers at Davis
Polk & Wardwell LLP, and Akin Gump Strauss Hauer & Feld LLP serve
as the Debtors' counsel. Barclays Capital and Seabury Group LLC
serve as the Debtors' financial advisors. Epiq Systems Bankruptcy
Solutions serves as the claims and noticing agent. The petition
was signed by John Spanjers, executive vice president and chief
operating officer.
Pinnacle Airlines' balance sheet at Sept. 30, 2011, showed $1.53
billion in total assets, $1.42 billion in total liabilities and
$112.31 million in total stockholders' equity. Debtor-affiliate
Colgan Air, Inc. disclosed $574,482,867 in assets and $479,708,060
in liabilities as of the Chapter 11 filing.
Delta Air Lines, Inc., the Debtors' major customer and post-
petition lender, is represented by David R. Seligman, Esq., at
Kirkland & Ellis LLP.
The official committee of unsecured creditors tapped Morrison &
Foerster LLP as its counsel, and Imperial Capital, LLC, as
financial advisors.
Pinnacle has the exclusive right to propose a reorganization plan
until Jan. 25.
PINNACLE AIRLINE: Judge Keeps Pilots Union Ruling Under Wraps
-------------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that Pinnacle Airlines
Corp.'s pilots union will remain in the dark for now on whether
the airline can reject its collective bargaining agreement, after
U.S. Bankruptcy Judge Robert E. Gerber filed -- under seal -- his
decision on the debtor's request Thursday.
Bankruptcy Law360 relates that Judge Gerber added to Pinnacle's
docket two new filings, both sealed: a decision on the debtor's
motion to reject the CBA with the Air Line Pilots Association and
a supplement to that decision.
About Pinnacle Airlines
Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/--
a $1 billion airline holding company with 7,800 employees, is the
parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.;
and Colgan Air, Inc. Flying as Delta Connection, United Express
and US Airways Express, Pinnacle Airlines Corp. operating
subsidiaries operate 199 regional jets and 80 turboprops on more
than 1,540 daily flights to 188 cities and towns in the United
States, Canada, Mexico and Belize. Corporate offices are located
in Memphis, Tenn., and hub operations are located at 11 major U.S.
airports.
Pinnacle Airlines Inc. and its affiliates, including Colgan Air,
Mesaba Aviation Inc., Pinnacle Airlines Corp., and Pinnacle East
Coast Operations Inc. filed for Chapter 11 bankruptcy (Bankr.
S.D.N.Y. Lead Case No. 12-11343) on April 1, 2012.
Judge Robert E. Gerber presides over the case. Lawyers at Davis
Polk & Wardwell LLP, and Akin Gump Strauss Hauer & Feld LLP serve
as the Debtors' counsel. Barclays Capital and Seabury Group LLC
serve as the Debtors' financial advisors. Epiq Systems Bankruptcy
Solutions serves as the claims and noticing agent. The petition
was signed by John Spanjers, executive vice president and chief
operating officer.
Pinnacle Airlines' balance sheet at Sept. 30, 2011, showed $1.53
billion in total assets, $1.42 billion in total liabilities and
$112.31 million in total stockholders' equity. Debtor-affiliate
Colgan Air, Inc. disclosed $574,482,867 in assets and $479,708,060
in liabilities as of the Chapter 11 filing.
Delta Air Lines, Inc., the Debtors' major customer and post-
petition lender, is represented by David R. Seligman, Esq., at
Kirkland & Ellis LLP.
The official committee of unsecured creditors tapped Morrison &
Foerster LLP as its counsel, and Imperial Capital, LLC, as
financial advisors.
Pinnacle has the exclusive right to propose a reorganization plan
until Jan. 25.
PIPELINE DATA: Credit-Card Processor Files Chapter 11 to Sell
-------------------------------------------------------------
Pipeline Data Inc., a processor of debit and credit cards for
smaller retailers, filed a Chapter 11 petition (Bankr. D. Del.
Case No. 12-13123) Nov. 19 in Delaware with plans for selling the
business as a going concern.
Alpharetta, Georgia-based Pipeline Data provides credit and debit
card payment processing services to approximately 15,000
merchants. The Company has 36 employees.
Pipeline, which sough bankruptcy together with affiliates, owes
$66.6 million in principal and interest to first-lien creditors
who have liens on all assets.
Pipeline started experiencing financial difficulties in 2008.
Normal industry attrition rates spiked, merchant closures
increased, and new merchant origination channels weakened. In the
second half of 2010, Pipeline's processing and technology partner,
Fidelity Information Systems, exited the processing business and
shut down operations, forcing Pipeline to abandon its technology
investment and to pursue an alternative strategy.
The Company has determined that a sale of its business as a going
concern would be in the best interest of creditors and other
parties in interest. The Debtors have tapped AlixPartners and
Dragonfly Capital LLP to market and sell the business.
Pipeline has identified a purchaser for its business and intends
to pursue Bankruptcy Court approval of the sale, subject to any
higher and better offers that may be received in accordance with
Section 363 of the Bankruptcy Code.
The Debtors have not filed the sale motion and have not yet
identified the buyer in court filings.
The Debtors on the Petition Date filed motions to pay prepetition
wages, deem utilities adequately assured, use cash collateral, and
honor obligations to customers.
According to the case docket, the schedules of assets and
liabilities and the statement of financial affairs are due Dec. 4,
2012. The Chapter 11 plan and the disclosure statement are due
March 19, 2013.
Bloomberg News notes that a credit-card processor from Canoga
Park, California, named Process America Inc. filed for Chapter 11
protection one week ago in Woodland Hills, California.
PIPELINE DATA: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Pipeline Data, Inc.
3 West Main Street
PO Box 300
Brasher Falls, NY 13613-0300
Bankruptcy Case No.: 12-13123
Affiliates that simultaneously sought Chapter 11 protection:
Debtor Case No.
------ --------
Northern Merchant Services, Inc. 12-13124
PayPassage, Inc. 12-13125
Paynet Systems, Inc. 12-13126
Aircharge, Inc. 12-13127
SecurePay.com, Inc. A Pipeline Data, Inc. Company 12-13128
Pipeline Data Processing, Inc. 12-13129
Valadata, Inc. 12-13130
Pipeline Data Portfolio Acquisition, Inc. 12-13131
Paypipe, Inc. 12-13133
CardAccept.com, Inc. 12-13134
Type of Business: Pipeline Data, Inc., provides of payment-
processing services for merchants
Chapter 11 Petition Date: Nov. 19, 2012
Court: U.S. Bankruptcy Court
District of Delaware (Delaware)
Judge: Kevin J. Carey
Debtors'
Counsel: Thomas Joseph Francella, Jr.
WHITEFORD TAYLOR PRESTON LLC
The Renaissance Centre, Suite 500
405 North King Street
Wilmington, DE 19801
Tel: (302) 357-3252
Fax: 302-357-3272
E-mail: tfrancella@wtplaw.com
Debtors'
Counsel: KIRKLAND & ELLIS L.L.P.
Debtors'
Financial
Advisor: ALIXPARTNERS L.L.P.
Debtors'
Investment
Banker: DRAGONFLY CAPITAL PARTNERS L.L.C.
Estimated Assets: $1 million to $10 million
Estimated Debts: $50 million to $100 million
The petition was signed by Thomas Tesmer, president.
Pipeline Data's List of Its 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Cynergy Data LLC Trade Claim $1,615,430
30-30 47th Avenue, 9th Floor
Long Island City, NY 11101
ComVest Advisors, LLC Trade Claim $520,825
525 Okeechobee Blvd.
Suite 1050
West Palm Beach, FL 33401
Obertek, Inc. Trade Claim $173,569
Charge.com Pymt Solutions, Trade Claim $121,780
Inc.
TransFirst Holdings, Inc. Trade Claim $58,209
Highwoods DLF 98/29, LLC Rent $41,811
Delaware Secretary of State Taxes $36,146
Division of Corporations
ADP Inc. Benefits $29,624
ComVest Group Holdings, LLC Trade Claim $27,971
AT&T Utilities $20,801
Merchant Business Services Trade Claim $20,289
LLC
dba Paysmart360
AEFT, Inc. Trade Claim $18,656
Tesmer, Thomas Wages $17,279
CGLIC-Chattanooga EASC Benefits $16,860
Weller, Kevin Wages $15,179
Capital Merchant Services, Trade Claim $11,792
Inc.
Gruneisen, Donald Wages $11,032
Vantiv Holding, LLC Trade Claim $8,891
dba Skipjack
Carousel Industries, Inc. Utilities $7,659
Hoffman, Richard Wages $7,503
POSITIVEID CORP: Delays Form 10-Q for Third Quarter
---------------------------------------------------
PositiveID Corporation was unable, without unreasonable effort or
expense, to file its quarterly report on Form 10-Q for the period
ended Sept. 30, 2012, by the Nov. 14, 2012, filing date applicable
to smaller reporting companies due to a delay experienced by the
Company in the completion of its independent auditor's review of
the financial statements included in the Quarterly Report. The
Company anticipates that it will file the Quarterly Report no
later than Nov. 19, 2012.
About PositiveID
Delray Beach, Fla.-based PositiveID Corporation has historically
developed, marketed and sold RFID systems used for the
identification of people in the healthcare market. Beginning in
early 2011, the Company has focused its strategy on the growth of
its HealthID business, including the continued development of its
GlucoChip, its Easy Check breath glucose detection device, its
iglucose wireless communication system, and potential strategic
acquisition opportunities of businesses that are complementary to
its HealthID business.
EisnerAmper LLP, in New York, expressed substantial doubt about
PositiveID'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 a working capital
deficiency and an accumulated deficit. "Additionally, the Company
has incurred operating losses since its inception and expects
operating losses to continue during 2012.
The Company's balance sheet at June 30, 2012, showed $3.18 million
in total assets, $5.58 million in total liabilities, all current,
and a $2.39 million total stockholders' deficit.
PRECISION OPTICS: Incurs $358,000 Net Loss in Sept. 30 Quarter
--------------------------------------------------------------
Precision Optics Corporation, Inc., filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss of $358,094 on $563,398 of revenue for the
three months ended Sept. 30, 2012, compared with net income of
$1.99 million on $504,749 of revenue for the same period during
the prior year.
The Company reported net income of $960,972 on $2.15 million of
revenue for the year ended June 30, 2012, compared with a net loss
of $1.05 million on $2.24 million of revenue during the prior
fiscal year.
The Company's balance sheet at Sept. 30, 2012, showed $3.38
million in total assets, $984,227 in total liabilities, all
current, and $2.40 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/qdSBg3
About Precision Optics
Headquartered in Gardner, Massachusetts, Precision Optics
Corporation, Inc., has been a developer and manufacturer of
advanced optical instruments since 1982. The Company designs and
produces high-quality micro-optics, medical instruments and other
advanced optical systems. The Company's medical instrumentation
line includes laparoscopes, arthroscopes and endocouplers and a
world-class product line of 3-D endoscopes for use in minimally
invasive surgical procedures.
PRESIDENTIAL REALTY: Incurs $628,000 Net Loss in Third Quarter
--------------------------------------------------------------
Presidential Realty Corporation filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $628,248 on $194,202 of total revenues for the three
months ended Sept. 30, 2012, compared with a net loss of $1.03
million on $182,228 of total revenues for the same period during
the prior year.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss of $1.73 million on $579,062 of total revenues, compared
with a net loss of $4.17 million on $798,471 of total revenues for
the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $16.23
million in total assets, $18.94 million in total liabilities and a
$2.70 million total deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/tSIKzL
About Presidential Realty
Headquartered in White Plains, New York, Presidential Realty
Corporation, a real estate investment trust, is engaged
principally in the ownership of income-producing real estate and
in the holding of notes and mortgages secured by real estate or
interests in real estate. On Jan. 20, 2011, Presidential
stockholders approved a plan of liquidation, which provides for
the sale of all of the Company's assets over time and the
distribution of the net proceeds of sale to the stockholders after
satisfaction of the Company's liabilities.
Following the 2011 results, Holtz, Rubenstein Reminick LLP, in
Melville, New York, 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 from
operations and has a working capital deficiency.
The Company reported a net loss of $6.16 million in 2011,
compared with a net loss of $2.57 million in 2010.
PRESSURE BIOSCIENCES: Incurs $796,000 Net Loss in Third Quarter
---------------------------------------------------------------
Pressure Biosciences, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $796,038 on $391,616 of total revenue for the three
months ended Sept. 30, 2012, compared with a net loss of $561,723
on $280,422 of total revenue for the same period during the prior
year.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss of $2.36 million on $1.02 million of total revenue,
compared with a net loss of $2.15 million on $651,751 of total
revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed
$1.91 million in total assets, $2.64 million in total liabilities
and a $730,839 total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/z4voYm
About Pressure Biosciences
Pressure BioSciences, Inc., headquartered in South Easton,
Massachusetts, holds 14 United States and 10 foreign patents
covering multiple applications of pressure cycling technology in
the life sciences field.
As reported in the TCR on March 2, 2012, Marcum LLP, in Boston,
Massachusetts, expressed substantial doubt about Pressure
Biosciences' 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 had recurring net
losses and continues to experience negative cash flows from
operations.
R.E. LOANS: Terra Verde Buys Calif. Development for $45 Million
---------------------------------------------------------------
Carolina Bolado at Bankruptcy Law360 reports that Terra Verde
Group LLC on Tuesday said it has bought Rancho Las Flores, a
foreclosed 10,000-acre planned residential community in Hesperia,
Calif., for $45 million from bankrupt lender R.E. Loans.
Richardson, Texas-based Terra Verde bought the planned community
from the estate of R.E. Loans, a private mortgage lender that had
loaned more than $80 million to the development and just emerged
out of Chapter 11 protection in June. Terra Verde paid $45 million
for the project, according to bankruptcy court documents cited by
Bankruptcy Law360.
About R.E. Loans
R.E. Loans, LLC, was, for many years, in the business of providing
financing to home builders and developers of real property. R.E.
Future LLC and Capital Salvage own the real property obtained
following foreclosure proceedings initiated by R.E. Loans against
its borrowers. R.E. Loans is the sole shareholder of Capital
Salvage and the sole member of R.E. Future. B-4 Partners LLC is
the sole member of R.E. Loans. As a result of the multiple
defaults by R.E. Loans' borrowers, R.E. Loans has transitioned
from being a lender to becoming a property management company.
Lafayette, California-based R.E. Loans, R.E. Future and Capital
Salvage filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case
Nos. 11-35865, 11-35868 and 11-35869) on Sept. 13, 2011. Judge
Barbara J. Houser presides over the case. Stutman, Treister &
Glatt Professional Corporation, in Los Angeles, and Gardere, Wynne
Sewell LLP, in Dallas, represent the Debtors as counsel. James A.
Weissenborn at Mackinac serves as R.E. Loans' chief restructuring
officer. The Debtors tapped Hines Smith Carder as their
litigation and outside general counsel. The Debtors tapped
Alixpartners, LLP as noticing agent, and Latham & Watkins LLP as
special counsel in real estate matters. R.E. Loans disclosed
$713.6 million in assets and $886.0 million in liabilities as of
the Chapter 11 filing.
Akin Gump Strauss Hauer & Feld LLP, in Dallas, represents
the Official Committee of Note Holders as counsel.
REFLECT SCIENTIFIC: Posts $3.3 Million Net Income in 3rd Quarter
----------------------------------------------------------------
Reflect Scientific, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
net income of $3.28 million on $305,713 of revenue for the three
months ended Sept. 30, 2012, compared with a net loss of $186,160
on $481,325 of revenue for the same period during the prior year.
For the nine months ended Sept. 30, 2012, the Company reported net
income of $2.81 million on $988,427 of revenue, compared with a
net loss of $768,948 on $1.56 million of revenue for the same
period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $3.77
million in total assets, $1.24 million in total liabilities and
$2.53 million in total shareholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/5ik9mS
About Reflect Scientific
Orem, Utah-based Reflect Scientific, Inc., is engaged in the
manufacture and distribution of innovative products targeted at
the life science market. Customers include hospitals and
diagnostic laboratories, pharmaceutical and biotech companies,
universities, government and private sector research facilities,
and chemical and industrial companies.
After auditing the 2011 results, Mantyla McReynolds, LLC, in Salt
Lake City, Utah, expressed substantial doubt about the Company's
ability to continue as a going concern. The independent auditors
noted that the Company has experienced recurring losses from
operations and negative working capital.
RENEGADE HOLDINGS: Judge to Consider Liquidation at Jan. 8 Hearing
------------------------------------------------------------------
Richard Craver at Winston-Salem Journal reports that Judge Thomas
Schroeder has postponed a hearing on the fate of three Mocksville
tobacco companies until 9:30 a.m. Jan. 8, 2013, after receiving
requests from multiple groups involved in the case.
According to the report, Judge Schroeder's eventual ruling has
the potential to force the liquidation of Renegade Holdings Inc.,
Renegade Tobacco Co. and Alternative Brands Inc., perhaps as soon
as early 2013, or allow the companies to emerge from Chapter 11
bankruptcy protection. The companies have a combined 85
employees.
The report relates bankruptcy trustee Peter Tourtellot requested
the postponement to give him more time to review his option
following a recent U.S. District Court judge's ruling that the
companies owe at least $4.1 million in disputed federal excise
taxes. That likely could include amending the reorganization plan
a third time.
The report notes objections to Mr. Tourtellot's current
reorganization plan have been filed by the National Association of
Attorneys General, the U.S. Justice Department's Alcohol Tobacco
Tax and Trade Bureau, the bankruptcy case administrator and three
creditors, including Carolina Bank.
The report says the federal agency and the association said
Alternative has not paid all of the federal excise tax applicable
to large filtered cigars.
The report relates the goal has been for Renegade to exit
bankruptcy in early 2013, focusing primarily on filtered cigars,
including international contract sales, and taking its discount
brands national. At that time, it would be branded as Alternative
Brands.
About Renegade Holdings
Renegade Holdings and two subsidiaries -- Alternative Brands, Inc.
and Renegade Tobacco Company -- filed for Chapter 11 protection
(Bankr. M.D.N.C. Lead Case No. 09-50140) on Jan. 28, 2009, and
exited bankruptcy on June 1, 2010. They were put back into
bankruptcy July 19, 2010, when Judge William L. Stocks vacated the
reorganization plan, in part because of a criminal investigation
of owner Calvin Phelps and the companies regarding what
authorities called "unlawful trafficking of cigarettes."
Alternative Brands is a federally licensed manufacturer of tobacco
products consisting primarily of cigarettes and cigars. Renegade
Tobacco distributes the tobacco products produced by ABI through
wholesalers and retailers in 19 states and for export. ABI also
is a contract fabricator for private label brands of cigarettes
and cigars which are produced for other licensed tobacco
manufacturers.
The stock of RHI is owned indirectly by Calvin A. Phelps through
his ownership of the stock of Compliant Tobacco, LLC which, in
turn, owns all of the stock of RHI which in turn owns all of the
stock of RTC and ABI. Mr. Phelps was the chief executive officer
of all three companies. All three of the Debtors' have their
offices and production facilities in Mocksville, North Carolina.
In August 2010, the Bankruptcy Court approved the appointment of
Peter Tourtellot, managing director of turnaround-management
company Anderson Bauman Tourtellot Vos & Co., as Chapter 11
trustee.
REVEL CASINO: $850-Mil. Debt Trading at Around 50% Off
------------------------------------------------------
Suzette Parmley, writing for the Philadelphia Inquirer, reported
last week that the Revel casino's $850 million loan, which comes
due in 2017, now is priced at about 52 cents on the dollar, a
significant drop from where it traded in September and right
before Hurricane Sandy as well. According to the Inquirer,
analysts call that a clear sign that investors have lost
confidence in Revel's ability to pay its debt and stay in
business, though such pricing does not mean default is definite.
"Where the [loan] and bonds are trading indicates the market is
quite concerned," said Robert Heller, managing director and head
of gaming and leisure at UBS Securities L.L.C., the Inquirer
report said. Revel is "challenged because of the stress in
Atlantic City compounded by the storm damage, which sets the city
back even further."
According to the Inquirer, gaming-industry analysts say Hurricane
Sandy delivered a gut punch that Revel, teetering toward
insolvency even before the hurricane, will be hard-pressed to
recover from. Analysts say there is little hope in the
foreseeable future that Revel will avoid defaulting on its massive
debt.
"There is no doubt the probability of default has increased,"
Andrew Zarnett of Deutsche Bank AG said last week, according to
the report. "There is no way to dispute that, given what has
happened to Atlantic City the last two weeks."
According to the report, Revel opened seven months ago, is
carrying the most debt, and is still trying to develop a
clientele. The $2.4 billion mega-casino, built with more than
$300 million in state credits and tax rebates, lost five days of
business to Sandy, reopening at noon Nov. 3. Getting customers
back has been slow, as it has been for all the casinos.
Revel, the Inquirer report said, was eighth in revenue among
Atlantic City casinos in May, June, July, August, and September.
In October, even the smaller and older Atlantic Club and Resorts
Casino outperformed it.
RG STEEL: Union Urges Court to Block Payments to 21 Employees
-------------------------------------------------------------
Beth Winegarner at Bankruptcy Law360 reports that former RG Steel
LLC workers urged the Delaware bankruptcy court Thursday not to
greenlight a plan that would pay the bankrupt steel company's
remaining 21 employees salaries and benefits through the end of
the year while the former workers "face financial ruin."
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.
The Debtor has sold off the principal plants. The sale of the
Wheeling Corrugating division to Nucor Corp. brought in $7
million. That plant in Sparrows Point, Maryland, fetched the
highest price, $72.5 million.
RIVER CANYON: Hires Seter Vander to Challenge UWSD Claim
--------------------------------------------------------
River Canyon Real Estate Investments, LLC, sought and obtained
permission from the Bankruptcy Court to employ Seter Vander Wall,
P.C., as special counsel.
On Aug. 15, 2012, the United Water & Sanitation District filed
Proof of Claim No. 30 in the bankruptcy case. UWSD asserts a
fully secured claim in the amount of $9,756,355. UWSD asserts the
basis for the Claim is Colo.Rev.Stat. Sec. 32-1-1001(1)(j)(I).
The Debtor disputes the validity, priority and extent of the UWSD
Claim.
Title 32, Article 1 of the Colorado Revised Statutes is the
"Special District Act". The Act provides the statutory framework
for special districts in Colorado. UWSD is a special district
created under the Act.
The Debtor asserts and believes the employment of special counsel
to assist lead counsel Sender & Wasserman, P.C., in the
prosecution of the objection to USWD's claim and any and all other
matters arising in the case relating to the Act and its interplay
with the bankruptcy case is reasonable and appropriate.
Kim Seter, Esq., attests that the firm is a "disinterested person"
as the term is defined in Section 101(14) of the Bankruptcy Code.
SVW anticipates that Kim Seter will provide the bulk of the legal
services rendered by the firm. Mr. Seter charges $295 per hour.
Other SVW attorneys who may provide services bill at rates between
$200 and $235 per hour. SVW bills its paralegals at the rate of
$130 per hour.
The Debtor has not provided a postpetition retainer to SVW.
About River Canyon Real Estate
River Canyon Real Estate Investments, LLC, is the developer of the
Ravenna residential real estate project in Douglas County,
Colorado and the owner of The Golf Club at Ravenna, among other
assets.
River Canyon filed a Chapter 11 petition (Bankr. D. Colo. Case No.
12-20763) on May 23, 2012, in Denver as part of its settlement
negotiations with lender Beal Bank Nevada, and to preserve the
value of its assets.
At Beal Bank's behest, Cordes & Company was named, effective
Oct. 15, 2010, as receiver for the 643-acre real estate
development with golf course in Douglas County, Colorado.
The Debtor disclosed assets of $19.7 million and liabilities of
$45.3 million in its schedules. The property and golf course are
estimated to be worth $11 million, and secures a $45 million debt.
Judge Elizabeth E. Brown presides over the case. The Debtor is
represented by Sender & Wasserman, P.C., as its Chapter 11
counsel.
Alan Klein, Glenn Jacks, Dan Hudick, and Bill Hudick own most of
the Debtor. Mr. Jacks, which has a 12.8% membership interest,
signed the Chapter 11 petition.
Richard A. Wieland, the U.S. Trustee for Region 19, was unable to
form an official committee of unsecured creditors because an
insufficient number of persons holding unsecured claims against
the Debtor have expressed interest in serving on a committee. The
U.S. Trustee reserves the right to appoint such a committee should
interest develop among the creditors.
SAAB CARS: Judge Gives Ally One Month to Submit Rival Plan
----------------------------------------------------------
Jamie Santo at Bankruptcy Law360 reports that a Delaware
bankruptcy judge on Friday gave Ally Financial Inc. one month to
submit its own Chapter 11 liquidation plan for Saab Cars North
America Inc., deferring approval of the disclosure statement
presented by SCNA and its creditors committee until after the
deadline.
Bankruptcy Law360 relates that SCNA and the committee filed a
joint liquidation plan Oct. 17 and looked to start it down the
road to confirmation Friday with approval of their disclosure
statement and solicitation procedures, but Ally asked for a 60-day
delay to submit a rival plan.
About Saab Cars N.A.
More than 40 U.S.-based Saab dealerships have signed an
involuntary chapter 11 bankruptcy petition for Saab Cars North
America, Inc., (Bankr. D. Del. Case No. 12-10344) on Jan. 30,
2012. The petitioners, represented by Wilk Auslander LLP, assert
claims totaling $1.2 million on account of "unpaid warranty and
incentive reimbursement and related obligations" and/or "parts and
warranty reimbursement." Leonard A. Bellavia, Esq., at Bellavia
Gentile & Associates, in New York, signed the Chapter 11 petition
on behalf of the dealers.
Donlin, Recano & Company, Inc. (DRC), has been retained to provide
claims and noticing agent services to Saab Cars North America,
Inc. in its Chapter 11 case.
The dealers want the vehicle inventory and the parts business to
be sold, free of liens from Ally Financial Inc. and Caterpillar
Inc., and "to have an appropriate forum to address the claims of
the dealers," Leonard A. Bellavia said in an e-mail to Bloomberg
News.
Saab Cars N.A. is the U.S. sales and distribution unit of Swedish
car maker Saab Automobile AB. Saab Cars N.A. named in December an
outside administrator, McTevia & Associates, to run the company as
part of a plan to avoid immediate liquidation following its parent
company's bankruptcy filing.
Saab Automobile AB is a Swedish car manufacturer owned by Dutch
automobile manufacturer Swedish Automobile NV, formerly Spyker
Cars NV. Saab Automobile AB, Saab Automobile Tools AB and Saab
Powertain AB filed for bankruptcy on Dec. 19, 2011, after running
out of cash.
On Feb. 24, 2012, the Court, inconsideration of the petition filed
on Jan. 30, 2012, granted Saab Cars North America, Inc., relief
under Chapter 11 of the Bankruptcy Code.
On March 9, 2012, the U.S. Trustee formed an official Committee of
Unsecured Creditors and appointed these members: Peter Mueller
Inc., IFS Vehicle Distributors, Countryside Volkwagen, Saab of
North Olmstead, Saab of Bedford, Whitcomb Motors Inc., and
Delaware Motor Sales, Inc. The Committee tapped Wilk Auslander
LLP as general bankruptcy counsel, and Polsinelli Shughart as its
Delaware counsel.
SAGAMORE PARTNERS: Wants Chance to Make Up Missed Mortgage Payment
------------------------------------------------------------------
Kelly Rizzetta at Bankruptcy Law360 reports that the owner of
Miami Beach's bankrupt Sagamore Hotel on Wednesday endorsed the
ruling of a Florida bankruptcy judge who ordered lender LNR
Partners LLC to give the debtor a chance to make up a missed 2009
payment on the hotel's $31.5 million mortgage before foreclosing.
Sagamore Partners Ltd. lambasted LNR for asking U.S. Bankruptcy
Judge A. Jay Cristol to reconsider his Nov. 8 decision to
partially dismiss LNR's bid to be named a secured creditor on the
struggling hotel's mortgage, according to Bankruptcy Law360.
About Sagamore Partners
Bay Harbor, Florida-based Sagamore Partners, Ltd., owns and
operates the oceanfront Sagamore Hotel, also known as The Art
Hotel due to its captivating art collection from recognized
artists and its contemporary design. The all-suite boutique hotel
is situated within Miami's Art Deco Historic District on South
Beach. Sagamore Partners is owned by Martin Taplin.
Sagamore Partners filed for Chapter 11 bankruptcy (Bankr. S.D.
Fla. Case No. 11-37867) on Oct. 6, 2011. Judge A. Jay Cristol
presides over the case. Joshua W. Dobin, Esq., and Peter D.
Russin, Esq., at Meland Russin & Budwick, P.A., in Miami, Fla.,
serve as the Debtor's counsel. The Debtor disclosed $71,099,556
in assets and $52,132,849 in liabilities as of the Chapter 11
filing. In its latest schedules, the Debtor disclosed $67,963,210
in assets and $52,060,862 in liabilities. The petition was signed
by Martin W. Taplin, president of Miami Beach Vacation Resorts,
Inc., manager of Sagamore GP, LLC, general partner.
The Debtor has requested for an extension in its solicitation
period. Bankruptcy Judge A. Jay Cristol denied approval of
the disclosure statement explaining its Plan of Reorganization.
Pursuant to the Plan, the Debtor proposes to reinstate the
maturity date of its loan with JPMCC 2006-LDP7 Miami Beach
Lodging, with interest from the Effective Date of the Plan at the
loan's non-default interest rate; and cure monetary defaults under
the Loan by paying the Secured Lender unpaid interest which has
accrued on the Loan at the Interest Rate, but not interest which
has accrued on the Loan at the Default Rate.
The U.S. Trustee will not appoint an official committee under 11
U.S.C. Sec. 1102 has not been appointed in the bankruptcy case of
Sagamore Partners Ltd until further notice. The U.S. Trustee
reserves the right to appoint such a committee should interest
developed among the creditors.
SALON MEDIA: Incurs $660,000 Net Loss in Sept. 30 Quarter
---------------------------------------------------------
Salon Media Group, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss of $660,000 on $853,000 of net revenue for the three
months ended Sept. 30, 2012, compared with a net loss of $866,000
on $844,000 of net revenue for the same period during the prior
year.
For the six months ended Sept. 30, 2012, the Company reported a
net loss of $2.19 million on $1.68 million of net revenue,
compared with a net loss of $1.54 million on $1.77 million of net
revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $1.41
million in total assets, $16.25 million in total liabilities and a
$14.84 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/I7TJMC
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.
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: Files Budget; To Renegotiate With Calpers
-------------------------------------------------------------
Tim Reid, writing for Reuters, reports the interim city manager
for San Bernardino, California, on Monday presented a "pendency
plan" -- in effect the city's operating budget while it seeks
bankruptcy protection under Chapter 9 of the Bankruptcy Code.
According to Reuters, the pendency plan, which must be adopted by
a deeply split city council before it can take effect:
-- seeks to close the city's $45.8 million General Fund
deficit, which has left San Bernardino barely able to
meet its city payroll;
-- proposes deferring payments to the California Public
Employees' Retirement System, negotiating payments over
time and discussing the "reamortization" of its liability;
-- seeks cuts elsewhere, such as the city's payment of its
employees' contribution to Calpers, the elimination of
vacant sworn positions in the Police Department, and the
reduction of available overtime in the Fire Department.
The report notes San Bernardino lists Calpers as its biggest
creditor, with unfunded pension obligations totaling $143.3
million. Calpers says it uses a different calculation method and
pegs the debt at $319.5 million.
According to the report, the city has already halted payments to
Calpers since it declared bankruptcy, and owes more than $6
million in dues to the fund. The report relates the city says its
halted payments to Calpers are merely deferrals, but the move is
in stark contrast to the path taken by two other Californian
cities -- Vallejo, which emerged from bankruptcy in 2011, and
Stockton, which is seeking bankruptcy protection. Both cities
decided to keep current on all payments to the pension fund.
According to Reuters, San Bernardino's move, underscored in
Monday's budget plan, sets up a showdown between Calpers and other
creditors, particularly Wall Street bondholders and bond insurers,
over how they will be treated as creditors in the city's
bankruptcy. Wall Street has already signaled that it intends to
fight Calpers' historical primacy as a creditor in the San
Bernardino case.
Calpers and city workers are challenging the city's right to be in
Chapter 9.
About San Bernardino
San Bernardino, California, filed an emergency petition for
municipal bankruptcy under Chapter 9 of the U.S. Bankruptcy Code
(Bankr. C.D. Calif. Case No. 12-28006) on Aug. 1, 2012. San
Bernardino, a city of about 210,000 residents roughly 65 miles
(104 km) east of Los Angeles, estimated assets and debts of more
than $1 billion in the bare-bones bankruptcy petition.
The city council voted on July 10, 2012, to file for bankruptcy.
The move lets San Bernardino bypass state-required mediation with
creditors and proceed directly to U.S. Bankruptcy Court.
The city is represented that Paul R. Glassman, Esq., at Stradling
Yocca Carlson & Rauth.
San Bernardino joins two other California cities in bankruptcy:
Stockton, an agricultural center of 292,000 east of San Francisco,
and Mammoth Lakes, a mountain resort town of 8,200 south of
Yosemite National Park.
SHINGLE SPRINGS: Moody's Says Gaming Compact No Rating Impact
-------------------------------------------------------------
Moody's Investors Service said that the amended Tribal State
Compact signed by the Shingle Springs Band of Miwok Indians and
Gov. Brown of California on November 15, has no immediate rating
impact on Shingle Springs Tribal Gaming Authority (owned by the
Tribe)'s rating and outlook (Caa2, negative). The Amended Compact
is designed to improve the Authority's financial position by
reducing Compact fees paid to the State, among other changes, in
an effort to ensure the long-term financial viability of the
casino and the Authority. However, the amendment is still subject
to California legislature approval and subsequent approval by the
Department of Interior, timing and final terms of which remain
uncertain in Moody's view. The rating and outlook also incorporate
the uncertainty from potential debt restructuring and adverse
impact from the on-going litigation which is being appealed by the
Tribe currently.
The principal methodology used in rating Shingle Springs 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.
Shingle Springs is an unincorporated governmental authority of the
Shingle Springs Band of Miwok Indians. The Authority was formed to
develop, own and operate the Red Hawk Casino, which opened on
December 17, 2008 near Sacramento, California.
SIDERA NETWORKS: S&P Rates Proposed $375MM Secured Credit 'B'
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' issue-level
rating and '4' recovery rating to Sidera Networks Inc.'s proposed
$375 million senior secured credit facilities, which consist of a
$325 million term loan due 2018 and $50 million revolving credit
facility due 2017. "The '4' recovery rating on this debt indicates
our expectation for average (30% to 50%) recovery in the event of
a payment default. The company will use proceeds from the proposed
credit facilities to refinance its existing credit facilities,
provide for ongoing working capital, and pay transaction fees and
expenses," S&P said.
"We also affirmed our 'B' corporate credit rating and stable
outlook on Sidera," S&P said.
"The 'B' corporate credit rating on New York City-based fiber-
optic network operator Sidera reflects Standard & Poor's Ratings
Services' assessment of the company's financial risk profile as
'highly leveraged,' based on its high debt levels and our
expectation that capital expenditures will remain elevated,
resulting in minimal or negative free operating cash flow [FOCF]
generation for the next few years," said Standard & Poor's credit
analyst Michael Weinstein.
"Our assessment of Sidera's business risk profile as 'weak' is
based on significant competition in the large urban markets in
which the company operates and high customer concentration. In our
view, these risks outweigh our expectation for strong industry
demand growth for data bandwidth providers, particularly in the
wireless and financial services segments that Sidera serves, as
well as the company's recurring revenue business model and solid
overall profitability with EBITDA margins in the mid-30% area,"
S&P said.
"The stable outlook reflects our expectation that EBITDA growth
will improve to the high-single-digit area in 2013, with Sidera
benefiting from new sales growth and cost-cutting initiatives. We
could lower the rating if sales performance falls well below our
expectation and churn increases above the current mid-1% rate,
causing EBITDA to decline more than 10% relative to performance
thus far in 2012. A significant debt-financed acquisition or
dividend payment to private equity sponsors that leads to EBITDA
coverage of cash interest declining to the low-2x area could also
result in a downgrade," S&P said.
"Although we view an upgrade as unlikely in the next year, we
could contemplate a higher rating if cost improvements and new
sales growth lead to an EBITDA increase of more than 25% with
improvements in customer churn back toward 1% per month," S&P
said.
SMART-TEK SOLUTIONS: Delays Form 10-Q for Third Quarter
-------------------------------------------------------
Smart-Tek Solutions, Inc., notified the U.S. Securities and
Exchange Commission that it will be delayed in filing its
quarterly report on Form 10-Q for the period ended Sept. 30, 2012.
The review of the financials by the outside auditors will be
completed on or about Nov. 16, 2012.
About Smart-tek Solutions
Newport Beach, Calif.-based Smart-tek Solutions Inc. has two
business lines. Through its wholly owned subsidiary Smart-Tek
Communications Inc. the Company specializes in the design and
development of Radio Frequency Identification (RFID) integration,
monitoring and tracking solutions to meet industry demands.
Through its wholly owned subsidiary Smart-Tek Automated Services
Inc. the Company provides professional employer organization
services.
The Company reported a comprehensive loss of $8.12 million on
$21.74 million of revenue for the year ended Dec. 31, 2011,
compared with a comprehensive income of $855,188 on $17.22 million
of revenue during the prior year.
After auditing the financial statements for 2011, PMB Helin
Donovan, LLP, in Dallas, Texas, expressed ubstantial doubt about
the Company's ability to continue as a going concern. The
independent auditors noted that the Company has sustained
recurring losses from operations and has an accumulated deficit of
approximately $13 million at Dec. 31, 2011.
The Company's balance sheet at June 30, 2012, showed $8.58 million
in total assets, $19.10 million in total liabilities, and a
$10.51 million total stockholders' deficit.
SOLYNDRA LLC: Wins OK to Sell Factory, HG to Seagate for $90MM
--------------------------------------------------------------
Lance Duroni at Bankruptcy Law360 reports that Solyndra LLC
received a Delaware bankruptcy judge's blessing Thursday to sell
its sprawling solar panel factory and headquarters in Fremont,
Calif., to hard drive manufacturer Seagate Technology LLC for
$90.3 million, wrapping up the company's yearlong liquidation.
At a court hearing, U.S. Bankruptcy Judge Mary F. Walrath approved
Cupertino, Calif.-based Seagate's purchase of the 411,000-square-
foot facility and surrounding 30 acres, Bankruptcy Law360 relates.
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 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.
Solyndra filed a liquidating plan at the end of July and scheduled
a hearing on Sept. 7 for approval of the explanatory disclosure
statement. The Plan is designed to pay 2.5% to 6% to unsecured
creditors with claims totaling as much as $120 million. Unsecured
creditors with $27 million in claims against the holding company
are projected to have a 3% dividend.
The TCR reported on Nov. 12, 2012, Bloomberg News said Solyndra
LLC gave formal notice that its reorganization plan was confirmed
and substantially consummated. The amended joint Chapter 11 plan
became effective Nov. 7, according to a court filing that fixed
Jan. 13 as the professional fee bar date and Dec. 7 as the bar for
administrative claims.
SPECTRUM HEALTHCARE: Plans to Close Laurel Hill Nursing Home
------------------------------------------------------------
Bruno Matarazzo, Jr., at Republican-American reports that Spectrum
Healthcare has notified the state Department of Labor of its plan
to shutter Laurel Hill Healthcare nursing home.
The report says the company, which owns six nursing homes in the
state and four in the region, is in Chapter 11 bankruptcy.
The nursing home has 75 beds and 115 employees.
"It's not 100 percent it's going to close yet," said Deborah
Chernoff, director of communications for Service Employees
International Union District 1199. "It's a requirement when
there's a possible closure," she said of the company's notice to
the state.
Spectrum Healthcare has six nursing facilities that have 716 beds
and employ 725 employees. About 420 employees are part of a
union. The Company and its affiliates filed for Chapter 11
protection on Sept. 10, 2012 (Bankr. D. Conn. Case No. 12-22206).
Judge Albert S. Dabrowski presides over the case. Elizabeth J.
Austin, Esq., at Pullman and Comley, represents the case. The
Debtor estimated assets of $100,000 and $500,000, and debts of
between $1 million and $10 million.
STRATUS MEDIA: Delays Form 10-Q for Third Quarter
-------------------------------------------------
Stratus Media Group, Inc., informed the U.S. Securities and
Exchange Commission it requires additional time to complete the
financial statements for the three and nine months ended Sept. 30,
2012, and cannot, without unreasonable effort and expense, file
its Form 10-Q on or before the prescribed filing date.
About Stratus Media
Santa Barbara, Calif.-based Stratus Media Group, Inc., is an
owner, operator and marketer of live sports and entertainment
events. Subject to the availability of capital, the Company
intends to aggregate a large number of complementary live sports
and entertainment events across North America and internationally.
The Company reported a net loss of $15.83 million in 2011,
compared with a net loss of $8.41 million in 2010.
Goldman Kurland and Mohidin LLP, in Encino, California, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2011, citing recurring
losses and negative cash flow from operations which raised
substantial doubt as to the ability of the Company to continue as
a going concern.
The Company's balance sheet at June 30, 2012, showed $3.71 million
in total assets, $8.77 million in total liabilities, all current,
and a $5.06 million total shareholders' deficit.
SUNVALLEY SOLAR: Delays Form 10-Q for Third Quarter
---------------------------------------------------
SunValley Solar, Inc., was unable to compile the necessary
financial information required to prepare a complete filing of its
quarterly report on Form 10-Q for the period ended Sept. 30, 2012.
Thus, the Company was unable to file the periodic report in a
timely manner without unreasonable effort or expense. The Company
expects to file within the extension period.
About Sunvalley Solar
Sunvalley Solar, Inc., is a California-based solar power
technology and system integration company. Since the inception of
its business in 2007, the company has focused on developing its
expertise and proprietary technology to install residential,
commercial and governmental solar power systems.
Sunvalley Solar reported a net loss of $398,866 in 2011, compared
with a net loss of $375,839 in 2010.
In its audit report for the 2011 results, Sadler, Gibb &
Associates, LLC, in Salt Lake City, UT, noted that the Company had
losses from operations of $104,000 and accumulated deficit of
$1.36 million, which raises substantial doubt about the Company's
ability to continue as a going concern.
The Company's balance sheet at June 30, 2012, showed $6 million in
total assets, $5.43 million in total liabilities and $567,993 in
total stockholders' equity.
TCI COURTYARD: Hiring Eric Liepins as Bankruptcy Counsel
--------------------------------------------------------
TCI Courtyard, Inc., filed papers in Court seeking to employ Eric
A. Liepins and the law firm of Eric A. Liepins, P.C., as
bankruptcy counsel.
The Debtor believes a variety of legal matters exist as to the
assets and liabilities of the estate which require legal
assistance.
Mr. Liepins, the Firm's sole shareholder, attests his Firm does
not presently or hold or represent any interest adverse to the
interest of the Debtor or the bankruptcy estate and is
disinterested within the meaning of 11 U.S.C. Sec. 101(13).
The Firm has received a retainer of $7,500 plus the filing fee.
The Firm will be paid at these hourly rates:
Eric A. Liepins $250 per hour
Paralegals and
Legal Assistants $30 - 50 per hour
The Debtor also has agreed to reimburse the Firm for all
reasonable out-of-pocket expenses incurred on the Debtor's behalf.
There's a hearing Jan. 2, 2012, on the Liepins engagement.
About TCI Courtyard
Dallas, Texas-based TCI Courtyard, Inc., dba Quail Hollow
Apartments, filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case
No. 12-37284) on Nov. 15, 2012. Judge Stacey G. Jernigan presides
over the case. Eric A. Liepins, Esq., serves as the Debtor's
counsel. In its petition, the Debtor scheduled $13,790,254 in
assets and $15,964,116 in liabilities. The petition was signed by
Steven Shelley, vice president.
According to Troubled Company Reporter's records, TCI Courtyard
previously filed a Chapter 11 petition (Bankr. N.D. Tex. Case No.
11-34977) on Aug. 1, 2011. The Liepins firm also served as
counsel in the previous case. The Debtor estimated assets of up to
$10 million and debts of up to $50 million in the 2011 petition.
TCI COURTYARD: Sec. 341 Creditors' Meeting Set for Dec. 28
----------------------------------------------------------
The U.S. Trustee in Dallas, Texas, will convene a Meeting of
Creditors under 11 U.S.C. Sec. 341(a) in the Chapter 11 case of
TCI Courtyard, Inc. on Dec. 28, 2012, at 10:00 a.m. at Dallas,
Room 976.
Proofs of claim are due by March 28, 2013.
About TCI Courtyard
Dallas, Texas-based TCI Courtyard, Inc., dba Quail Hollow
Apartments, filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case
No. 12-37284) on Nov. 15, 2012. Judge Stacey G. Jernigan presides
over the case. Eric A. Liepins, Esq., serves as the Debtor's
counsel. In its petition, the Debtor scheduled $13,790,254 in
assets and $15,964,116 in liabilities. The petition was signed by
Steven Shelley, vice president.
According to Troubled Company Reporter's records, TCI Courtyard
previously filed a Chapter 11 petition (Bankr. N.D. Tex. Case No.
11-34977) on Aug. 1, 2011. The Liepins firm also served as
counsel in the previous case. The Debtor estimated assets of up to
$10 million and debts of up to $50 million in the 2011 petition.
TEXTRON FINANCIAL: Fitch Holds 'BB' Rating on Junior Sub. Notes
---------------------------------------------------------------
Fitch Ratings has affirmed the Issuer Default Rating (IDR) and
long-term debt ratings for Textron Inc. (TXT) and Textron
Financial Corporation (TFC) at 'BBB-'. The Rating Outlook for
both is Stable. In addition, TXT's short-term ratings have been
affirmed at 'F3'.
TXT's ratings reflect the company's well-established market
positions in its aerospace, defense and industrial businesses;
improved liquidity; positive annual free cash flow (FCF); and
improving risk profile at TFC which continues to exit its non-
captive portfolio. Debt/EBITDA at TXT's manufacturing businesses
declined to 1.9x at Sept. 29, 2012 from 2.1x at the end of 2011
and nearly 2.4x at the end of 2010. Leverage and other credit
metrics could improve further as performance at TXT's
manufacturing businesses improves over the long term.
The possibility of a positive rating action is reduced in the near
term by concerns including pressure on U.S. defense spending,
which is an important part of the Bell and Textron Systems
businesses, low unit deliveries and margins at Cessna, execution
problems on several unmanned aerial programs at Textron Systems,
and expectations for weaker demand in Kautex's automotive markets
in Europe and Asia. These concerns are exacerbated by uncertainty
surrounding the fiscal cliff and the effect of possible
sequestration on defense spending.
If the U.S. addresses these fiscal issues effectively in the near
term, visibility could improve in TXT's aerospace and defense
related businesses. The possible favorable impact of improved
visibility, combined with TXT's priority for debt reduction
(approximately $500 million is scheduled to mature in the first
half of 2013), could potentially lead to a positive rating action
in the next few quarters.
Fitch estimates FCF after dividends could improve to a range of
$400 million - $500 million in 2012 compared to $311 million in
2011. The increase largely reflects substantially lower pension
contributions. FCF was slightly negative through the first nine
months of 2012, reflecting lower advance payments on military
contracts related to timing, and higher used-business-jet
inventory due to trade-ins. FCF could be strong in the fourth
quarter and will depend on business jet deliveries, which can be
seasonal, and on an improvement in the pace of advance payments on
military contracts. FCF could be lower than expected if the tepid
recovery in demand for business jets limits deliveries.
TXT contributed $642 million to its pension plans in 2011 and $181
million through the first nine months of 2012. The company plans
to contribute a total of $200 million in 2012. At the end of
2011, the pension deficit was $1.3 billion (79% funded). TXT
estimates the unfunded position will be stable at the end of 2012
as contributions offset the negative impact of a lower discount
rate.
Other uses of cash include product development expenditures at
Cessna and Bell, and the possible resumption of higher dividend
payments which have been low for several years while TXT addressed
challenges at TFC's non-captive portfolio. Also, acquisition
activity has been modest for several years but has the potential
to increase.
At Cessna, deliveries of business jets are up modestly from the
previous year, but the business jet recovery has been slower than
anticipated. Demand is weakest in the light end of the business
jet market where Cessna's deliveries are concentrated, and the
market could be weak through much of 2013. As a result, Cessna's
backlog has declined to $1.3 billion, increasing the risk that
Cessna could cut production if orders weaken further. Margins are
low due to weak sales, pricing pressure, and product mix,
including recent sales of used jets, which typically generate
little profit.
Helicopter sales at Bell are benefiting from a recovery in demand
for commercial helicopters, with segment revenue up more than 20%
through the first three quarters of 2012. Concerns about military
spending are mitigated by Bell's position on the H-1 and V-22
aircraft programs where deliveries should be generally stable
through 2014. Also, Bell has a substantial installed base which
could benefit from aftermarket spending and modernization
programs.
At Textron Systems, results are likely to be negatively affected
by delays in certain programs and by execution challenges on
unmanned aerial programs that could depress margins for several
quarters before they are fully resolved. However, Textron Systems
provides a broad mix of products that reduces exposure to single
programs.
TXT's Industrial segment performance has improved modestly during
2012, but the automotive fuel systems business could be challenged
in the near term by lower automotive production in Europe and
lower sales by Japanese OEM customers in China. The Industrial
segment's golf and turf markets have begun to improve;
construction remains weak but could potentially benefit from the
beginning of a recovery in residential construction.
At Sept. 29, 2012, TXT's liquidity included manufacturing cash of
$1.2 billion and a $1 billion four-year bank facility that expires
in 2015. The facility includes a maximum debt to capitalization
covenant of 65% and a requirement that TFC's leverage not exceed
9:1. Fitch calculates these covenants were well within
compliance. Manufacturing cash balances could increase by the end
of 2012 if TXT generates strong seasonal FCF in the fourth
quarter.
Liquidity is offset by scheduled debt maturities at TXT's
manufacturing business, including EUR239 million of notes due in
March 2013 and $215 million face value of convertible notes due in
May, including debt discount. The amount of convertible notes
excludes approximately $214 million conversion value of the notes
which TXT may pay in cash or shares. There are no other material
debt maturities owed by the manufacturing business until 2015.
Liquidity is also affected by TXT's support for TFC through
capital contributions and intercompany loans. However, TFC's
liquidity has been sufficient to pay dividends to TXT in excess of
capital contributions. TFC has also repaid much of the
intercompany loans during 2012 previously borrowed from TXT.
Fitch expects future support for TXT, net of dividends, to be
minimal although loans may be required temporarily in 2013 to help
fund TFC's scheduled debt maturities.
TFC's non-captive portfolio was less than $500 million at Sept.
30, 2012. Fitch views positively the progress TFC has made in
liquidating the non-captive portfolio, but believes risks remain.
Asset quality for the first nine months of 2012 improved as non-
accrual finance receivables declined 55% from Dec. 31, 2011.
However, golf mortgage receivables, which typically have 20+ year
maturities, continue to account for the largest portion of the
portfolio.
Cash collections on liquidated receivables have supported a
reduction in debt. However, if cash generated from the
liquidation of TFC's non-captive portfolio is less than expected
as a result of higher credit losses or discounting, TXT would need
to provide further support to TFC. TFC's leverage was 3.4x at
Sept. 30, 2012, as estimated by Fitch, compared to 4.5x at the end
of 2011 and 4.8x at the end of 2010.
Fitch believes the amount and timing of some of TFC's debt
maturities and asset liquidations in 2013 could be mismatched and
expects TFC may borrow against the intercompany facility to repay
a portion of its 2013 debt maturities. However, Fitch expects the
impact on TXT will be limited as TXT has sufficient cash balances
and operating cash flow to support TFC at its current size.
Fitch's concerns about liquidity should decline as the non-captive
portfolio shrinks further.
TFC's captive portfolio totaled $1.7 billion at Sept. 30, 2012,
and consisted primarily of aviation receivables. Non-accrual
accounts were 5.5% of total captive receivables at Sept. 30, 2012
compared to 7.0% at the end of fiscal 2011. Although the level of
non-accrual accounts is relatively high, potential concerns about
credit quality in the captive portfolio are mitigated by an
improving trend in the level of accruals and TFC's expertise
managing aviation receivables.
Fitch could take a positive rating action if Cessna's business jet
market improves materially, TXT adjusts effectively to lower
defense-related revenue at Bell and Textron Systems, net pension
liabilities are reduced, and TFC continues to liquidate the non-
captive portfolio successfully. Also, the repayment of
approximately $500 million of near-term debt maturities in 2013
would further reduce leverage and support a positive rating
action. The ratings could be negatively affected if TFC requires
material support from TXT in excess of temporary support
anticipated by Fitch during 2013, revenue and margins at the
manufacturing businesses are impaired by an economic downturn, or
spending for acquisitions or other discretionary uses
significantly reduces TXT's liquidity.
TFC's ratings are equalized with TXT's ratings as Fitch believes
TFC is a core subsidiary to its parent as illustrated through a
support agreement and other factors. The support agreement
requires TXT to maintain full ownership, minimum net worth of $200
million and fixed-charge coverage of 1.25x. Other factors
supporting the rating linkage include a shared corporate identity,
common management, and the extension of intercompany loans to TFC.
Fitch has affirmed the ratings for TXT and TFC as follows:
TXT
-- IDR at 'BBB-';
-- Senior unsecured bank facilities at 'BBB-';
-- Senior unsecured debt at 'BBB-';
-- Short-term IDR at 'F3';
-- Commercial paper at 'F3'.
TFC
-- IDR at 'BBB-';
-- Senior unsecured debt at 'BBB-';
-- Junior subordinated notes at 'BB'.
Approximately $4.1 billion of debt outstanding at Sept. 30, 2012
is affected by the ratings, including nearly $2.4 billion at TXT
and $1.7 billion at TFC.
THETA CORP: Moody's Withdraws 'Ba1' Counterparty Rating
-------------------------------------------------------
Moody's Investors Service withdrew the counterparty rating of
Theta Corporation, a limited purpose financial operation company,
for business reasons.
Issuer: Theta Corporation
Counterparty Rating, Withdrawn (sf); previously on Oct. 5,
2012 downgraded to Ba1 (sf)
Ratings Rationale
Moody's has withdrawn the rating for its own business reasons.
The methodologies used in this rating were "Moody's Approach to
Rating Credit Derivative Product Companies" published in March
2006, and "Moody's Approach to Rating Corporate Collateralized
Synthetic Obligations" published in September 2009.
TOKLAN OIL: Has 23% Plan for Unsecured Creditors
------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Toklan Oil & Gas Corp. scheduled a Dec. 13
confirmation hearing for approval of a reorganization plan
estimated to pay unsecured creditors 23 cents on the dollar toward
their $29.5 million in claims.
According to the report, the bankruptcy judge in Tulsa, Oklahoma,
conducted an auction this month for the right to buy the company
through the plan. The opening bid of less than $6.1 million
increased to $13.1 million until Rampart Holdings Inc. was
declared the winner.
The report relates that the sale is sufficient for full payment of
the $3.9 million secured claim owing to Bank of Oklahoma. There is
a $2.4 million tax claim that must be paid in full as a result of
the sale of assets before the Chapter 11 filing.
The disclosure statement approved last week by the bankruptcy
court contains an estimate that $6.78 million will remain for
distribution to unsecured creditors.
About Toklan Oil
Toklan Oil & Gas, an oil and gas producer, was started as Duncan
Corp. in October 1960 and also was named Cobb Oil and Gas Co. The
Cobb family owns the company, which employs 10 people and
generated $7.7 million in revenue last year from its wells and
properties, which are mainly in Oklahoma and Texas.
Toklan Oil filed a Chapter 11 petition (Bankr. N.D. Okla. Case No.
12-11916) on July 13, 2012, in Tulsa, Oklahoma. The formal list
of assets and debt shows property with a value of $6.1 million and
liabilities totaling $30.8 million, including $3.8 million in
secured debt.
TRINITY COAL: Auctions Off Fleet of Industrial Equipment
--------------------------------------------------------
Kris Maher, writing for The Wall Street Journal, reports mining
company Trinity Coal Corp. put up on the block one of the largest
fleets of equipment ever offered at auction. The report says the
auction, held Sept. 27, was run by Ritchie Bros. Auctioneers Inc.,
which specializes in industrial equipment.
According to the report, Trinity Coal, a West Virginia company, is
in the midst of a restructuring that it hopes will keep it out of
bankruptcy court. Earlier this year, the company closed its
Kentucky operations after losing its largest contract with a
utility, and it has since seen demand from other customers fall
off.
"It was a very burdensome amount of equipment to maintain," said
David Stetson, chief restructuring officer for Trinity, the report
relates. Mr. Stetson said the company, which is owned by India-
based Essar Group, plans to focus on higher-margin grades of
metallurgical coal that are sold to steelmakers.
TW & CO: Owes $3 Million to IRS, Judge Hears
--------------------------------------------
Brian Mahoney at Bankruptcy Law360 reports that the Internal
Revenue Service on Thursday told a Maryland bankruptcy judge that
TW & Co. Inc. can?t dodge part of its $3 million in employee
benefits and tax liabilities because the company has chosen a
wind-down over a restructuring and therefore does not need extra
funds to continue business operations.
About TW & Co.
TW & Co., a provider of security-guard services for the federal
government, filed a Chapter 11 petition (Bankr. D. Md. Case No.
12-17363) on April 18, 2012. Based in Lanham, Maryland, TW said
customers include the U.S. Army and Air Force, the Department of
Homeland Security and the General Services Administration. The
Debtor disclosed assets of $7.4 million and debt of $13 million.
Judge Wendelin I. Lipp presides over the case. James Greenan,
Esq., at McNamee, Hosea, et al., serves as the Debtor's counsel.
The petition was signed by Tanya Walker, president.
W&T OFFSHORE: S&P Retains 'B' Senior Unsecured Debt Rating
----------------------------------------------------------
Standard & Poor's Ratings Services revised its recovery rating on
W&T Offshore Inc.'s senior unsecured debt to '4', indicating its
expectation of average (30% to 50%) recovery in the event of a
payment default, from '3'. The issue-level rating on W&T's
unsecured debt remains 'B' (same as the corporate credit rating).
"The lower recovery expectation reflects the company's increased
borrowing base and commitment amounts, which were raised in
November 2012 to $725 million from $575 million," S&P said.
"The ratings on Houston-based W&T reflect our assessment of the
company's 'vulnerable' business risk and 'aggressive' financial
risk. The ratings on W&T incorporate the company's participation
in the competitive and highly cyclical oil and gas industry,
geographic concentration in the high-risk offshore Gulf of Mexico,
weak internal reserve replacement measures, and current softness
in natural gas prices. Our ratings also reflect W&T's 'adequate'
liquidity, management's long operating history in the Gulf of
Mexico, current healthy oil prices, and a well-balanced production
mix between crude oil and natural gas," S&P said.
RATINGS LIST
W&T Offshore Inc.
Corporate credit rating B/Stable/--
Recovery Rating Revised
To From
Senior unsecured debt B B
Recovery rating 4 3
ZACKY FARMS: Taps Felderstein Fitzgerald as Bankruptcy Counsel
--------------------------------------------------------------
Zacky Farms, LLC, has sought permission from the U.S. Bankruptcy
Court for the Eastern District of California to employ Felderstein
Fitzgerald Willoughby & Pascuzzi LLP as bankruptcy counsel.
Felderstein Fitzgerald will, among other things, assist the Debtor
in obtaining debtor in possession financing and the use of cash
collateral and other bankruptcy issues which may arise in the
operation of the Debtor's businesses, and assist the Debtor with
the preparation of and confirmation of a plan of reorganization at
these hourly rates:
Steven H. Felderstein, Managing Partner $595
Donald W. Fitzgerald, Partner $475
Thomas A. Willoughby, Partner $475
Paul J. Pascuzzi, Partner $450
Jason E. Rios, Partner $385
Jennifer E. Niemann, Counsel $350
Holly A. Estioko, Associate $325
Karen L. Widder, Legal Assistant $195
To the best of the Debtor's knowledge, Felderstein Fitzgerald is a
"disinterested person' as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Zacky Farms
Fresno, California-based Zacky Farms LLC, whose operations include
the raising, processing and marketing of poultry products, filed
for Chapter 11 bankruptcy protection (Bankr. E.D. Calif. Case No.
12-37961) on Oct. 8, 2012 in Sacramento. The company has roughly
1,000 employees and operates in multiple plants, farms and offices
in California, including operations in Los Angeles, Fresno,
Tulare, Kings, San Joaquin and San Bernardino Counties. The
company blames high feed prices for losses in recent years.
The Company has plans to sell itself to pay creditors. It listed
between $50 million and $100 million in both assets and debts.
Bankruptcy Judge Thomas Holman presides over the case. The
petition was signed by Keith F. Cooper, the Debtor's sole manager.
An official committee of unsecured creditors has been appointed in
the case. Lowenstein Sandler represents the Committee. The
Lowenstein team includes Kenneth A. Rosen, Bruce S. Nathan,
Jeffrey D. Prol, Wojciech F. Jung and Keara Waldron.
The Debtor's DIP lender, The Robert D. Zacky and Lillian D. Zacky
Trust U/D/T dated July 26, 1988, is represented by Thomas Walper,
Esq., at Munger Tolles & Olson LLP; and McKool Smith LLP.
ZACKY FARMS: Committee Taps Fox Rothschild as Local Counsel
-----------------------------------------------------------
The Official Committee of Unsecured Creditors of Zacky Farms, LLC,
has asked for authorization from the U.S. Bankruptcy Court for the
Eastern District of California to retain Fox Rothschild LLP as
local counsel to the Committee, effective as of Oct. 19, 2012.
The Committee selected Fox Rothschild because the firm has
considerable experience in reorganization matters, its San
Francisco office is well located to assist with the representation
of the Committee's interests in the Chapter 11 case, and the
firm's extensive experience in bankruptcy cases in California and
California law allow it to supplement general counsel Lowenstein
Sandler LLP's representation of the Committee as may be needed to
address additional legal issues that may arise in this Chapter 11
case. Fox Rothschild will work closely with Lowenstein, the
Committee's general counsel, to ensure that there will not be
duplication of services provided between the two firms.
Fox Rothschild will, among other things:
a. attend meetings and negotiations with other parties in
interest on the Committee's behalf in this Chapter 11
case;
b. take all necessary action to maximize distributions to
the creditors of the Debtor's estate;
c. review and participate in the negotiation of any plans of
reorganization, disclosure statements and all papers and
pleadings related thereto and in support thereof and
attending court hearings related thereto;
d. represent the Committee in all proceedings before the
Court or other courts of jurisdiction in connection with
the Chapter 11 case; including, preparing and reviewing
all motions, answers and orders necessary to protect
Committee's interests; and
e. assist the Committee in developing legal positions and
strategies with respect to all facets of these
proceedings.
Fox Rothschild will be paid at these hourly rates:
Michael A. Sweet $495
Dale L. Bratton $450
Avi E. Muhtar $350
Partners $340-$750
Counsel $310-$750
Associates $210-$500
Legal Assistants/Paralegals $100-$295
To the best of the Committee's knowledge, Fox Rothschild is a
"disinterested person' as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Zacky Farms
Fresno, California-based Zacky Farms LLC, whose operations include
the raising, processing and marketing of poultry products, filed
for Chapter 11 bankruptcy protection (Bankr. E.D. Calif. Case No.
12-37961) on Oct. 8, 2012 in Sacramento. The company has roughly
1,000 employees and operates in multiple plants, farms and offices
in California, including operations in Los Angeles, Fresno,
Tulare, Kings, San Joaquin and San Bernardino Counties. The
company blames high feed prices for losses in recent years.
The Company has plans to sell itself to pay creditors. It listed
between $50 million and $100 million in both assets and debts.
Bankruptcy Judge Thomas Holman presides over the case. Lawyers at
Felderstein Fitzgerald Willoughby & Pascuzzi LLP represent the
Debtor. The petition was signed by Keith F. Cooper, the Debtor's
sole manager.
An official committee of unsecured creditors has been appointed in
the case. Lowenstein Sandler represents the Committee. The
Lowenstein team includes Kenneth A. Rosen, Bruce S. Nathan,
Jeffrey D. Prol, Wojciech F. Jung and Keara Waldron.
The Debtor's DIP lender, The Robert D. Zacky and Lillian D. Zacky
Trust U/D/T dated July 26, 1988, is represented by Thomas Walper,
Esq., at Munger Tolles & Olson LLP; and McKool Smith LLP.
* Argentina Wants 2nd Circ. to Revisit $1.4BB Payout Order
----------------------------------------------------------
Carolina Bolado at Bankruptcy Law360 reports that Argentina asked
the Second Circuit to reconsider its ruling that the country must
pay approximately $1.4 billion to private equity firms and other
investors that opted out of restructuring deals on Argentina's
debt following its 2001 default.
* FHA's $16-Bil. Shortfall Adds Urgency to Mortgage Policy Fight
----------------------------------------------------------------
Evan Weinberger at Bankruptcy Law360 reports that the prospect of
an unprecedented government bailout of the Federal Housing
Administration, raised Friday by an audit that revealed a
$16 billion shortfall in the agency's reserves due to mortgage
delinquencies, will lend a new urgency to fights in Washington
over what role the federal government should play in the mortgage
market.
Bankruptcy Law360 relates that even before the real estate bubble
burst, lawmakers and regulators had struggled with how to get more
private money into the mortgage market while maintaining the
government's role in promoting homeownership.
* Moody's Says Liquidity-Stress Index Rises to 4% in November
-------------------------------------------------------------
Moody's Liquidity-Stress Index (LSI) rose to 4.0% at mid-November,
up from 3.6% in October but still near historical lows, Moody's
Investors Service says in its latest edition of SGL Monitor.
November's reading is the highest since March, although the LSI
remains well below its 7.5% long-term average, suggesting that
liquidity problems are neither severe nor widespread among
speculative-grade companies.
Moody's Liquidity-Stress Index falls when corporate liquidity
appears to improve and rises when it appears to weaken.
"Companies have generally been able to resolve liquidity issues
before they become too severe," says Vice President -- Senior
Credit Officer John Puchalla. "But a number of factors could
reduce corporate revenues and access to credit, including
contagion from the European debt crisis, continued slow global
economic growth and the combination of US tax increases and
spending cuts due to begin in the US in January."
November's low LSI is consistent with Moody's expectation that the
US speculative-grade default rate will decline over the coming
year, then inch up to 3.0% in October 2013.
Liquidity rating downgrades among speculative-grade companies (6)
have outpaced upgrades (5) so far in November, with the uptick in
the LSI reflecting the downgrade of API Technologies and Cengage
Learning due to anticipated lower earnings and tighter covenants
at those companies.
While the shift is not dramatic, the liquidity of new issuers has
weakened in recent months owing in part to weaker internal
resources, Puchalla says. "Recent very strong high-yield bond
issuance might be attracting companies with more questionable
cash-flow profiles, which could spell trouble down the road as
these companies begin to season."
The average speculative-grade liquidity ratings for companies that
were assigned them over the past two months were up over the prior
six months, and were the weakest readings since December 2011.
Moody's Covenant-Stress Index held steady at 2.2% in October,
unchanged from September. The index measures the extent to which
speculative-grade companies are at risk of violating debt
covenants, and declines when headroom under covenants appears to
increase. October's low reading suggests that the vast majority
of speculative-grade companies continue to have adequate cushion
under their covenants.
* Bond Issuances Provide Liquidity for Junk Companies
-----------------------------------------------------
Moody's Liquidity-Stress Index (LSI) rose to 4.0% at mid-November,
up from 3.6% in October but still near historical lows, Moody's
Investors Service says in its latest edition of SGL Monitor.
November's reading is the highest since March, although the LSI
remains well below its 7.5% long-term average, suggesting that
liquidity problems are neither severe nor widespread among
speculative-grade companies.
Moody's Liquidity-Stress Index falls when corporate liquidity
appears to improve and rises when it appears to weaken.
"Companies have generally been able to resolve liquidity issues
before they become too severe," says Vice President -- Senior
Credit Officer John Puchalla. "But a number of factors could
reduce corporate revenues and access to credit, including
contagion from the European debt crisis, continued slow global
economic growth and the combination of US tax increases and
spending cuts due to begin in the US in January."
November's low LSI is consistent with Moody's expectation that the
US speculative-grade default rate will decline over the coming
year, then inch up to 3.0% in October 2013.
Liquidity rating downgrades among speculative-grade companies (6)
have outpaced upgrades (5) so far in November, with the uptick in
the LSI reflecting the downgrade of API Technologies and Cengage
Learning due to anticipated lower earnings and tighter covenants
at those companies.
While the shift is not dramatic, the liquidity of new issuers has
weakened in recent months owing in part to weaker internal
resources, Mr. Puchalla says. "Recent very strong high-yield bond
issuance might be attracting companies with more questionable
cash-flow profiles, which could spell trouble down the road as
these companies begin to season."
The average speculative-grade liquidity ratings for companies that
were assigned them over the past two months were up over the prior
six months, and were the weakest readings since December 2011.
Moody's Covenant-Stress Index held steady at 2.2% in October,
unchanged from September. The index measures the extent to which
speculative-grade companies are at risk of violating debt
covenants, and declines when headroom under covenants appears to
increase. October's low reading suggests that the vast majority
of speculative-grade companies continue to have adequate cushion
under their covenants.
* Railroad Retirement Income Payable to Creditors
-------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that an annuity under the Railroad Retirement Act is
included in the calculation of "projected disposable income" that
determines how much an individual must pay creditors in a Chapter
13 plan, according to a ruling last week from the U.S. Court of
Appeals in San Francisco.
The report relates that the controversy surrounded a provision in
the RRA which says that an annuity can't be taxed, garnished or
attached and payment can't be "anticipated." The bankrupt took
the word "anticipated" to mean that the annuity shouldn't be
included in the calculation of future disposable income. The
appeals court in San Francisco disagreed in an opinion by Circuit
Judge Paul J. Watford.
According to the report, Judge Watford said that the term is taken
from trust law, meaning that a beneficiary can't receive payment
ahead of schedule. Simply counting annuity income thus isn't
anticipation, he said. The appeals court found a right to appeal
even though the Bankruptcy Appellate Panel had remanded the case
to the bankruptcy court for recalculation of disposable income.
The circuit court, the report notes, said that the flexible
standard for bankruptcy appeals came into play because the case
involved a purely legal issue that would "materially aid the
bankruptcy court in its disposition on remand."
The case is Meyer v. U.S. Trustee (In re Scholz), 9th U.S.
Circuit Court of Appeals (San Francisco).
* House Panel Pushes SEC-CFTC Merger
------------------------------------
Brian Mahoney at Bankruptcy Law360 reports that the U.S. Commodity
Futures Trading Commission and the U.S. Securities and Exchange
Commission should consider merging as one regulatory agency after
a failure in communication between the agencies contributed to the
downfall of the broker-dealer MF Global Inc., a report released by
House Republicans said on Thursday.
The SEC and the CFTC failed to share critical information about MF
Global before the firm's October 2011 collapse and could have
saved some investor funds if the agencies had worked together,
according to a 99-page critique of MF, Bankruptcy Law360 relates.
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
Nov. 26, 2012
BEARD GROUP, INC.
19th Annual Distressed Investing Conference
The Helmsley Park Lane Hotel, New York, N.Y.
Contact: 240-629-3300 or
http://bankrupt.com/DI2012/
Nov. 29-30, 2012
MID-SOUTH COMMERCIAL LAW INSTITUTE
33rd Annual Bankruptcy & Commercial Law Seminar
Nashville Marriott at Vanderbilt, Nashville, Tenn.
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
Nov. 29 - Dec. 1, 2012
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
JW Marriott Starr Pass Resort & Spa, Tucson, Ariz.
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
Dec. 4-8, 2012
AMERICAN BANKRUPTCY INSTITUTE
ABI/SJUSL Mediation Training Symposium
St. John's University, Queens, N.Y.
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
Jan. 24-25, 2013
AMERICAN BANKRUPTCY INSTITUTE
Rocky Mountain Bankruptcy Conference
Four Seasons Hotel Denver, Denver, Colo.
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
Feb. 7-9, 2013
AMERICAN BANKRUPTCY INSTITUTE
Caribbean Involvency Symposium
Eden Roc Renaissance, Miami Beach, Fla.
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
Feb. 17-19, 2013
AMERICAN BANKRUPTCY INSTITUTE
Advanced Consumer Bankruptcy Practice Institute
Charles Evans Whittaker Courthouse, Kansas City, Mo.
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
Feb. 20-22, 2013
AMERICAN BANKRUPTCY INSTITUTE
VALCON
Four Seasons Las Vegas, Las Vegas, Nev.
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
Apr. 10-12, 2013
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
JW Marriott Chicago, Chicago, Ill.
Contact: http://www.turnaround.org/
Apr. 18-21, 2013
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center,
National Harbor, Md.
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
June 13-16, 2013
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort, Traverse City, Mich.
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
July 11-13, 2013
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Hyatt Regency Newport, Newport, R.I.
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
July 18-21, 2013
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
The Ritz-Carlton Amelia Island, Amelia Island, Fla.
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
Aug. 8-10, 2013
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hotel Hershey, Hershey, Pa.
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
Aug. 22-24, 2013
AMERICAN BANKRUPTCY INSTITUTE
Southwest Bankruptcy Conference
Hyatt Regency Lake Tahoe, Incline Village, Nev.
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
Oct. 3-5, 2013
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Wardman Park, Washington, D.C.
Contact: http://www.turnaround.org/
Nov. 1, 2013
AMERICAN BANKRUPTCY INSTITUTE
NCBJ/ABI Educational Program
Atlanta Marriott Marquis, Atlanta, Ga.
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
Dec. 2, 2013
BEARD GROUP, INC.
19th Annual Distressed Investing Conference
The Helmsley Park Lane Hotel, New York, N.Y.
Contact: 240-629-3300 or
http://bankrupt.com/
Dec. 5-7, 2013
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Terranea Resort, Rancho Palos Verdes, Calif.
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via
e-mail to conferences@bankrupt.com are encouraged.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers"
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors" Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Carmel
Paderog, Meriam Fernandez, Ronald C. Sy, Joel Anthony G. Lopez,
Cecil R. Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman,
Editors.
Copyright 2012. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $775 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
*** End of Transmission ***