/raid1/www/Hosts/bankrupt/TCR_Public/121206.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, December 6, 2012, Vol. 16, No. 339
Headlines
501 GRANT STREET: Involuntary Bankruptcy Halts Sheriff Sale
A123 SYSTEMS: Auction of Assets in Chicago Today
ACADIA HEALTHCARE: Moody's Says Acquisition Financing Credit Neg.
ADVANCED COMPUTER: Wants Plan Exclusivity Extended Until Jan. 31
AES EASTERN: Wants Exclusive Control of Case Until Jan. 25
AHERN RENTALS: Files Chapter 11 Plan of Reorganization Plan
AHERN RENTALS: Dec. 19 Hearing on Lenders' Request for Payments
ALAN MURRAY: Class 8 Claim Entitled to 5% Interest
ALAN MURRAY: Law Firm's Arguments Against Plan Go Astray
ALLOU DISTRIBUTORS: E.D.N.Y. Court Rules in 2004 Clawback Suit
AMC NETWORK: Moody's Changes 'Ba3' CFR Outlook to Positive
AMERICAN AIRLINES: Estimates Value of Collateral at $2.5 Billion
AMERICAN AIRLINES: Dec. 19 Hearing on Exclusivity Extension Bid
AMERICAN AIRLINES: Supreme Court Declines Stay of PSA Election
AMERICAN AIRLINES: Seeks Approval of Boeing Lease Amendments
AMERICAN AIRLINES: ICF SH&E Modified Agreement Approved
AMERICAN AIRLINES: Passenger Service Agents Begin Union Vote
AMERICAN SUZUKI: Settling Dealers to Recover 100%
AMF BOWLING: Junior Lenders Protest Auction Rules
AS SEEN ON TV: CeeLo Green to Endorse Ediets Products
ASCENSUS INC: Moody's Assigns 'B2' Corp. Family Rating
ASSYRIAN BABYLON: Court Finds Plan Feasible Based on Past Success
ATP OIL & GAS: Equity Holders Seek Probe of Oil Reserves' Value
ATP OIL: Shareholders Seek Probe as Firm Moves Toward Sale
BACK YARD BURGERS: Offers Unsecured Creditors $2 Million
BANKATLANTIC BANCORP: To Invest $60MM For Bluegreen Acquisition
BAR STEEL: Tiger Group to Auction Trucks, Equipment
BEALL CORP: Dec. 18 Hearing on Use of Cash and Sale of Assets
BELLISIO FOODS: S&P Raises Ratings on $200MM Secured Debt to 'B+'
BELLWEST HOLDINGS: Lender Wants Case Transferred to Phoenix
BERNARD L. MADOFF: Customers Balk at Trustee Position on Interest
BERNARD L. MADOFF: Trustee, Feeder Funds Reach $24MM Settlement
BON-TON STORES: Board Declares Cash Dividend on Class A Shares
BROOKFIELD RESIDENTIAL: Moody's Assigns B1 CFR; Outlook Stable
BROOKFIELD RESIDENTIAL: S&P Assigns 'B+' Corporate Credit Rating
CAPITOL BANCORP: Committee Objects to Exclusivity Extension Bid
CASCADE AG: Court Approves J. Brian Scott as Appraiser
CDKP DEVELOPMENT: Court Rejects Private Sale of 5 Lots
CEREPLAST INC: Gets Add'l $400,000 Funding from Compass Horizon
CHARLES SCHWAB: Fitch Currently Rates Preference Stock 'BB+'
CINEMARK USA: Moody's Rates New $400MM Sr. Unsecured Notes 'B2'
CINEMARK USA: S&P Assigns 'BB+' Rating to New $800MM Debt
CIRCUIT CITY STORES: Trust, Toshiba Settle $92MM in Claims
CLEAVER-BROOKS INC: S&P Gives 'B' Rating on $285MM Secured Notes
CLUB AT SHENANDOAH: Case Summary & 20 Largest Unsecured Creditors
CLUB AT SHENANDOAH: Files for Chapter 11 in California
COMPREHENSIVE CARE: Elects Jairo Estrada to Board of Directors
COPYTELE INC: Stockholders Elect 4 Directors at Annual Meeting
CYPRESS OF TAMPA: Sec. 341(a) Creditors' Meeting Set for Dec. 17
CYPRESS OF TAMPA: Dec. 13 Final Hearing on Jennis & Bowen Hiring
DESERT HAWK: Fails to Pay $600,000 Promissory Notes
DIGITAL DOMAIN: Hiring Professionals to Sell Port St. Lucie Asset
DIGITAL DOMAIN: Auction and Online Sale on Dec. 12 to 14
DIGITAL DOMAIN: Disney Fights Over 3-D Tech License
DRINKS AMERICAS: Timothy Owens Named CEO and Chairman
ELLIPSAT INC: Trial Begins on Bid to Revoke Confirmation Order
EMPIRE RESORTS: Option to Lease EPT Property Extended to March 8
FIRST SECURITY: Has Until March 25 to Regain NASDAQ Compliance
FLAGSTONE REINSURANCE: Fitch Keeps BB+ Ratings on Sub. Debentures
FUEL DOCTOR: Michael McIntyre Quits From Board of Directors
FUELSTREAM INC: Major Consulting Chief, WCH Exec. Named to Board
GENERAL MOTORS: Dispute Over Dealership Goes to 4th Circuit
GIBRALTAR KENTUCKY: Plan Outline Hearing Continued to Dec. 13
GRANITE DELLS: Dec. 6 Hearing on Bid to Halt Cash Collateral Use
GREENBRIER COS: S&P Raises CCR to 'B+' on Improved Credit Measures
HAWAII OUTDOOR: Dec. 17 Final Hearing on Cash Collateral Use
HAWAII OUTDOOR: Has Interim Okay to Hire Wagner Choi as Counsel
HAWKER BEECHCRAFT: Court Approves Plan Disclosures
HEARTLAND DENTAL: Moody's Assigns 'B2' CFR; Outlook Stable
HOLLYWOOD FILM: Files Schedules of Assets and Liabilities
HOLLYWOOD FILM: Files List of 17 Largest Unsecured Creditors
HOSTESS BRANDS: Suppliers Won't be Sued for Preferences
HOSTESS BRANDS: CEO Rayburn's Pay Subject to Court Approval
INFUSYSTEM HOLDINGS: Has New $36.5 Million Credit Facility
INNOVARO INC: Receives Delisting Notice From NYSE MKT
JAMES RIVER: Moody's Cuts CFR/PDR to 'Caa1'; Outlook Negative
JOURNAL REGISTER: Wants Plan Exclusivity Until May 3
KAYE ELIZABETH SANDFORD: Objection to U.S. Bank Claim Overruled
LDK SOLAR: Incurs $136.9 Million Net Loss in Fiscal Q3 2012
LEHMAN BROTHERS: Alvarez & Marsal Receives $42 Million Bonus
LENNY DYKSTRA: Gets 6.5-Month Prison Sentence for Fraud
LODGENET INTERACTIVE: Moody's Cuts CFR to 'Ca'; Outlook Negative
LON MORRIS: Judge OKs Bankruptcy Loan, Upcoming Auction
LON MORRIS: Texas AG Sides With Foundation on Endowment Funds
MBIA INSURANCE: BofA's CMBS May Be Subordinate in Bankruptcy
MCCLATCHY CO: S&P Keeps B Rating on $910MM Secured Notes Due 2022
MINERVA NATIONAL: Fitch Affirms 'B+' Issuer Default Rating
MORGAN'S FOODS: Further Amends Remodel Agreement with KFC
NATIONAL SECURITY: A.M. Best Hikes Fincl Strength Rating From 'B'
NCR CORP: Moody's Cuts CFR to 'Ba2'; Rates New Senior Notes 'Ba3'
NCR CORP: S&P Gives 'BB' Rating on $400MM Senior Notes Due 2020
NEW PEOPLES: Further Extends Public Offering Until Dec. 20
NEWLEAD HOLDINGS: To Hold Annual Meeting on Dec. 21
NEXSTAR BROADCASTING: Completes Acquisition of 10 TV Stations
NNN 3500 MAPLE: Files for Chapter 11 in Santa Ana
NNN 3500 MAPLE: Sec. 341(a) Creditors' Meeting Set for Jan. 9
NNN LENOX PARK: Files for Chapter 11 in Indiana
OHANA GROUP: Sec. 341(a) Creditors' Meeting Set for Jan. 8
OMNICITY INC: Broadband Networks Purchases Firm
OMTRON USA: Chicken Producer Faces Venue-Transfer Motion
OSHKOSH CORP: S&P Affirms 'BB' Corp. Credit Rating; Off Watch Neg
OVERSEAS SHIPHOLDING: U.S. Trustee Balks at Bond Waiver Bid
PHIL'S CAKE: Hires Baumann Raymondo to Audit 401(k) Plan
PMI GROUP: Private Investor Offers to Put in New Capital
PRINCE MINERAL: S&P Assigns 'B' Corp Credit Rating; Outlook Stable
QUAMTEL INC: Taps Peter Sperling as Company Secretary
RENO REDEVELOPMENT: S&P Raises Rating on Senior Lien 2007A to 'B'
RESIDENTIAL CAPITAL: Ocwen Awaits Regulatory Approval of Deal
REVSTONE INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors
REVSTONE INDUSTRIES: Files for Chapter 11 in Delaware
RG STEEL: Units Sued in Adversary Proceeding by Slag Processor
SAGAMORE PARTNERS: Court OKs Simon Schindler as Litigation Counsel
SAGAMORE PARTNERS: Hiring Mack Law Firm as Special Counsel
SAGAMORE PARTNERS: Taps Mendez & Company as Accountant
SAGAMORE PARTNERS: Hires Meckler Bulger Firm as Expert
SAN BERNARDINO: Bondholders Blame Bankruptcy on Worker Salaries
SANUWAVE HEALTH: David Nemelka to Buy 4 Million Shares
SCHIFF NUTRITION: S&P Keeps 'B' Corp. Credit Rating on Watch Pos
SEALY CORP: Receives Request for Additional Information from FTC
SENTINEL MANAGEMENT: BoNY's $312MM Liens Denied by Appeals Court
SOLOMON DWEK: Accord in Lawsuit Against Cayre, KLLC Rejected
SOUTHERN ONE: Files for Chapter 11 in Texas
SOUTHERN ONE: Case Summary & 9 Largest Unsecured Creditors
SPANSION LLC: Moody's Affirms B1 CFR; Outlook Remains Stable
ST. JOSEPH'S HEALTHCARE: Moody's Affirms 'Ba1' Bond Rating
STAMP FARMS: Has Until Dec. 14 to File Schedules
SUN HEALTHCARE: Moody's Says Genesis' Buyout Modest Credit Pos.
SUNGARD DATA: Moody's Rates $720-Mil. Sr. Secured Term Loan 'Ba3'
SUSQUEHANNA AIRPORT: Moody's Rates Sub. Revenue Bonds 'Ba1'
TARGA RESOURCES: Moody's Rates Add-On Senior Notes 'Ba3'
TEN SAINTS: Court Approves Acceleron Group as Interest Rate Expert
THERAPEUTICSMD INC: John Milligan Discloses 9.5% Equity Stake
THERAPEUTICSMD INC: Robert Finizio Discloses 24.4% Equity Stake
THINKFILM LLC: Owner Sues Bankruptcy Trustee
THIRTEENTH FLOOR: 6th Cir. Keeps Judgment for Louisville Galleria
TMX FINANCE: Moody's Cuts Corporate Family Rating to 'B3'
TPC GROUP: S&P Keeps 'B+' CCR on Watch on Acquisition Agreement
TRANS-LUX CORP: Fires CFO; Todd Dupee Named CFO Pro Tempore
UNIVERSITY GENERAL: To Buy South Hampton Hospital for $30 Million
UNIVERSAL BIOENERGY: Receives Unsolicited Purchase Proposals
USA SPRINGS: Trustee Hiring Firm to Sue Malom Group
USI INC: S&P Affirms 'B-' Counterparty Credit Ratings; Off Watch
VALENCE TECH: Hires Michael White as Consultant
VUZIX CORP: Stockholders OK Reverse Common Stock Split
WASHINGTON MUTUAL: Seeks Probe on Alleged Goldman Naked Shorting
WATERFRONT OFFICE: Seeks to Use Lender's Cash Collateral
WATERFRONT OFFICE: Hiring Zeisler & Zeisler as Counsel
WATERFRONT OFFICE: Sec. 341 Creditors' Meeting on Dec. 31
WENNER MEDIA: Moody's Assigns 'B3' Corp. Family Rating
WEST PENN ALLEGHENY: S&P Cuts Rating on $726MM 2007A Bonds to 'CC'
ZOO ENTERTAINMENT: David Smith Hikes Equity Stake to 84.2%
ZOO ENTERTAINMENT: Obtains Additional $850,000 from MMB Holdings
ZYTO CORP: Deregisters Common Stock, Cancels 2011 Incentive Plan
* Student-Loan Debt Collection Targeted for Overhaul in U.S. Bill
* 9th Circuit Ruling Takes Up Scope of Stern
* Argentina Needn't Deposit for Injunction Stay, Rules 2nd Circ.
* Moody's Says Children's Hospitals to Face Revenue Challenges
* U.S. Bank Earnings Rise 6.6% on Revenue Growth, FDIC Says
* Cadwalader's George Davis Named as One of Bankruptcy Law360 MVPs
* Herrick Feinstein Adds R. Kalikow to New York Office
* Recent Small-Dollar & Individual Chapter 11 Filings
*********
501 GRANT STREET: Involuntary Bankruptcy Halts Sheriff Sale
-----------------------------------------------------------
Mark Belko, writing for Pittsburgh Post-Gazette, reports a sheriff
sale of the Union Trust Building scheduled for Jan. 7 is on hold
after several creditors of 501 Grant Street Partners forced it
into bankruptcy in California last month.
According to Post-Gazette, one of the creditors is Gertrude Fox,
the wife of Gerson Fox, who, together with Michael Kamen, bought
the building in 2008 under the name 501 Grant Street Partners.
Post-Gazette relates the latest bankruptcy filing came after
Judith K. Fitzgerald, a U.S. bankruptcy judge in Pittsburgh,
dismissed a petition filed last August by 501 Grant Street for
Chapter 11 reorganization. The dismissal cleared the way for the
building to be scheduled for sheriff sale on Jan. 7. But with the
new involuntary filing in California, Sgt. Richard Fersch of the
Allegheny County sheriff's office said Dec. 3 he has no choice but
to halt the upcoming sheriff sale.
Post-Gazette says SA Challenger, the lender seeking to foreclose,
has filed a motion in the California bankruptcy court to lift the
stay, arguing among other things that the property is continuing
to decline and that the debtors have no access to cash to manage
it. A hearing is set for Dec. 19.
According to Post-Gazette, SA Challenger said the structure is 60%
to 70% vacant and beset by a number of maintenance problems, from
sidewalk damage that seems to be allowing water to seep into the
basement to issues with some of the elevators. Its lone major
tenant is Siemens, which has been in litigation with the owners.
The report notes the appraiser hired by the lender estimated the
value of the building at $22.6 million -- far less than the $41.4
million the lender is seeking in the foreclosure. Mr. Kamen and
Mr. Fox paid $24.1 million for the property in 2008.
The report also relates Jeremy Kronman, a CBRE executive vice
president who was a former leasing agent for the building,
receives calls weekly from local, regional or institutional
investors inquiring about the real estate. CBRE is serving as the
receiver for the property, although Mr. Kronman is not involved in
that task.
The report also notes Scott Schorr, a Pittsburgher and a graduate
student at the University of St. Andrews in Scotland, said in an
email he is putting together a campaign to raise $50 million to
buy the building through a public-private partnership. His goal
is to recruit as the major tenant the Transatlantic Economic
Council, an organization created in 2007 by the United States and
the Economic Union to foster economic integration and cooperation.
Mr. Schorr has spoken to the Pittsburgh History & Landmarks
Foundation about his idea.
About 501 Grant Street &
Union Trust Building
An involuntary Chapter 11 bankruptcy petition was filed against
501 Grant Street Partners LLC, based in Woodland Hills, California
(Bankr. C.D. Calif. Case No. 12-20066) on Nov. 14, 2012. The
petitioning creditors are Allied Barton Security Services LLC,
owed $960 for security services; Cost Company LP, $5,900 owed for
masonry work; and MSA Systems Integration Inc., owed $2,401 for
unpaid invoice. Malhar S. Pagay, Esq., at Pachulski Stang Ziehl &
Jones LLP, represents the petitioning creditors.
501 Grant Street Partners owns the Union Trust Building in
downtown Pittsburgh, Pennsylvania. It sought Chapter 11
protection (Bankr. W.D. Pa. Case No. 12-23890) on Aug. 3, 2012, to
avert a sheriff sale of the building set for Aug. 6. The August
petition listed under $50,000 in both assets and debts. Roger M.
Bould, Esq., at Keevican Weiss Bauerle & Hirsch, LLC, represented
501 Grant Street as counsel.
In November, U.S. Bankruptcy Judge Judith K. Fitzgerald dismissed
501 Grant Street Partners' Chapter 11 petition, paving for the
sheriff sale of the Union Trust Building on Jan. 7, 2013.
SA Challenger Inc., which acquired interest in the building's
mortgage by U.S. Bank, is seeking to foreclose on the property.
SA Challenger is seeking to collect $41.4 million. Earlier in
November, at the lender's request, Judge Ward appointed the real
estate firm CBRE to serve as receiver for the building, overseeing
its operation and management until the sheriff sale takes place.
A123 SYSTEMS: Auction of Assets in Chicago Today
------------------------------------------------
A123 Systems Inc., is slated to hold an auction of its assets
Thursday.
Milwaukee-based auto-parts manufacturer Johnson Controls Inc.,
which will lead the bidding, will face competition from Wanxiang
America Corp., the Chinese-owned auto-parts company. Lawyers of
Siemens AG, of Germany, and NEC Corp. of Japan, also have
indicated their clients were interested in bidding.
Patrick Fitzgerald, writing for Dow Jones' Daily Bankruptcy
Review, reports that an A123 spokesman declined to comment on the
number of potential bidders. Representatives for Siemens and NEC
weren't immediately available for comment.
Dow Jones noes Wanxiang has offered about $131 million for A123's
assets, according to a person familiar with the proposal. Johnson
Controls has offered $125 million for A123's assets.
The auction will be held Thursday at the Chicago office of Latham
& Watkins , the law firm that is representing A123 in its Chapter
11 case. Bids were due Tuesday at 5:00 p.m. local time.
According to Dow Jones, an A123 adviser said that, given the
complexity of the business and the level of interest in the
battery maker, the auction could last several days. The
bankruptcy court has scheduled a sale hearing for the afternoon of
Dec. 11 in Wilmington, Delaware.
According to Dow Jones, that A123 Systems , which has never made a
profit in its 11-year existence, can go from bankruptcy wallflower
to the "most popular girl at the dance," in the words of U.S.
Bankruptcy Judge Kevin Carey, is even more surprising since the
company is still bleeding cash. The company has lost nearly $300
million so far this year.
Dow Jones also reports that Republican Senators Chuck Grassley and
John Thune, warned of the risk that some of A123's taxpayer-funded
technology could wind up in the hands of a foreign purchaser. In
the past several weeks, two dozen members of Congress have written
to the Committee on Foreign Investment in the United States
warning that a sale to Wanxiang requires careful scrutiny. Any
sale to Wanxiang requires approval from the CFIUS, a government
body led by Treasury Secretary Timothy Geithner, which reviews
deals that could result in the control of a U.S. business by a
foreign person or company.
The report also says another group, an assemblage of former U.S.
military and government dubbed the Strategic Materials Advisory
Council, warned that sale to Wanxiang could pose "serious harm" to
U.S. national interests. A123 has a number of contracts to
provide high-power batteries and other services to the U.S.
military.
The report notes Wanxiang has tried to stem the criticism that
helped derail its earlier deal to buy A123 Systems . The Chinese
manufacturer's most-recent offer excludes A123's government
business and the company has said it intends to keep A123's
Michigan operations in business.
Patrick Fitzgerald and Mike Ramsey at Daily Bankruptcy Review
report that A123 Systems is set to be the unlikely object of a
bidding war when its assets hit the auction block on Thursday.
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.
ACADIA HEALTHCARE: Moody's Says Acquisition Financing Credit Neg.
-----------------------------------------------------------------
Moody's Investors Service commented that the announcement that
Acadia Healthcare Company, Inc. would fund previously announced
acquisitions with a combination of debt and equity is a modest
credit negative because of an increase in leverage. However, this
is mitigated by the fact that Acadia will again access the equity
markets to fund a portion of the purchase price and add EBITDA
from the acquired facilities. Therefore, there is no immediate
impact on the company's ratings, including the B1 Corporate Family
and Probability of Default Ratings.
Ratings unchanged/LGD assessments revised:
Corporate Family Rating, B1
Probability of Default Rating, B1
12.875% senior notes due 2018, to B3 (LGD 5, 87%) from B3 (LGD 5,
81%)
Ratings Rationale
For further details refer to Moody's Credit Opinion and recent
Issuer Comment for Acadia Healthcare Company, Inc. on moodys.com.
The principal methodology used in rating Acadia Healthcare
Company, Inc. was the Global Healthcare Service Providers Industry
Methodology published in December 2011. Other methodologies used
include Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.
Acadia is a provider of inpatient behavioral health care services.
Acadia operates a network of 34 behavioral health facilities with
approximately 2,500 licensed beds in 20 states. Acadia provides
psychiatric and chemical dependency services to its patients in a
variety of settings, including inpatient psychiatric hospitals,
residential treatment centers, outpatient clinics and therapeutic
school-based programs. The company recognized revenue of
approximately $382 million for the last twelve months ended
September 30, 2012.
ADVANCED COMPUTER: Wants Plan Exclusivity Extended Until Jan. 31
----------------------------------------------------------------
Advanced Computer Technology (ACT), Inc., asks the U.S. Bankruptcy
Court for the District of Puerto Rico to extend until Jan. 31,
2013, its exclusive right to file a proposed Chapter 11 plan.
The Debtor filed its request for an extension before the exclusive
period was set to expire Oct. 31.
According to the Debtor, during a Sept. 25 hearing on the Debtor's
motion for leave to use Banco Bilbao Vizcaya Argentaria's cash
collateral, the Debtor and BBVA agreed on a stipulation for the
interim use of cash collateral and adequate protection, and for
the Court to enter an order directing the Court of First Instance
to turn over the funds deposited in Civil Cases for those funds to
be deposited with the Clerk of the Court. In this relation, the
Debtor is still recovering the funds deposited with the Clerk of
the Court of First Instance which will allow the Debtor to
determine feasibility of a bankruptcy-exit plan, together with
future financial projections and payment to creditors.
About Advanced Computer
San Juan, Puerto Rico-based Advanced Computer Technology, Inc.,
filed a Chapter 11 petition (Bankr. D.P.R. Case No. 12-04454) in
Old San Juan on June 6, 2012. The Debtor, an information system
consulting firm, disclosed $10.34 million in assets and $6.176
million in liabilities in its schedules. It said software and
licenses rights are worth $6.30 million. The value of its 100%
ownership of Sprinter Solutions, Inc., is unknown.
The Debtor's only shareholder is Investigacion Y Programas, S.A.
Its president is Jaime Romano and its secretary and chief
executive officer is Osvaldo Karuzic, none of whom hold any shares
in the Debtor.
Bankruptcy Judge Brian K. Tester presides over the case. Charles
Alfred Cuprill, Esq., at Charles A. Cuprill, PSC Law Offices, in
San Juan, P.R., serves as the Debtor's counsel.
William Santiago-Satre, Esq., at De Diego Law Offices, in
Carolina, P.R., represents Banco Bilbao Vizcaya Argentaria Puerto
Rico as counsel.
AES EASTERN: Wants Exclusive Control of Case Until Jan. 25
----------------------------------------------------------
AES Eastern Energy, L.P., et al., ask the U.S. Bankruptcy Court
for the District of Delaware to extend until Jan. 25, 2013, their
exclusive period to solicit acceptances for a proposed Chapter 11
Plan.
The Debtors are hopeful they will be able to successfully confirm
the Proposed Plan by yearend, but in no event later than Jan. 25.
A Dec. 18, 2012 hearing at 10 a.m. has been set on the Debtors'
extension request. Objections, if any, are due Dec. 11, at 4 p.m.
As reported by the Troubled Company Reporter on Nov. 19, the
Debtors scheduled a Dec. 27 hearing for approval of a liquidating
Chapter 11 plan designed to provide 12% recovery to creditors with
$482 million in unsecured claims. The recovery is largely due to
a $47 million settlement negotiated this month with non-bankrupt
parent AES Corp.
The Court has approved disclosure statement explaining the Plan.
The creditors' committee undertook an investigation regarding
$1 billion in dividends the bankrupt companies sent to the AES
parent between 1998 and 2010. The company argued that dividends
amounted to fraudulent transfers if made when the companies were
insolvent. In return for a release of claims against itself and
its officers and directors, AES agreed to pay $47 million when the
Plan becomes effective. The payment represents most of the $57.5
million projected for distribution to unsecured creditors.
The Debtors have sold four non-operational power plants and other
related assets to GMMM Holdings I LLC, a subsidiary of DSA
Services Inc., for $2.25 million pursuant to an asset purchase
agreement dated Oct. 10, 2012. The Debtors have won Court
approval of the sale. Pursuant to the APA, the deal will
terminate if the sale will not have occurred on the close of
business on Dec. 31.
The Debtors said in court papers that the offer by the purchaser
was not the only cash-positive bid, however, the Debtors, working
with their advisors, determined that the proposed transaction with
the purchaser represented the highest and best offer for the
Residual Assets among all the indications of interest received.
The purchaser, which intends to permanently retire the Non-
Operating Facilities, salvage or scrap the equipment, and demolish
the buildings so the sites eventually can be redeveloped, has
extensive experience with power plant demolition, asbestos
abatement, and other necessary skills. In addition, the Purchaser
has presented the strongest evidence of financial ability to pay
the purchase price and satisfy the assumed liabilities.
Earlier this year, AES also received Court permission to sell the
two operating facilities to secured creditors in exchange for
debt. At a court hearing in Wilmington, Judge Kevin Carey signed
off on the sale, which rids the AES Corp. unit of its only
operating power plants, located in Cayuga and Somerset, N.Y.
About AES Eastern
Ithaca, New York-based AES Eastern Energy, L.P., either directly
or indirectly, control six coal-fired electric generating plants
located in New York State. Currently, the Debtors actively
operate two of the six power plants and sell the electricity
generated by those plants into the New York wholesale power market
to utilities and other intermediaries under short-term agreements
or directly in the spot market.
AES Eastern Energy and 13 affiliates filed for Chapter 11
bankruptcy (Bankr. D. Del. Case Nos. 11-14138 through 11-14151) on
Dec. 30, 2011. Lawyers at Weil, Gotshal & Manges LLP and
Richards, Layton & Finger, P.A., are legal counsel to AES Eastern
Energy and affiliates. Barclays Capital is serving as investment
banker and financial advisor. Kurtzman Carson Consultants is the
claims and noticing agent. AES Eastern Energy estimated
$100 million to $500 million in assets and $500 million to
$1 billion in debts. The petition was signed by Peter Norgeot,
general manager.
Gregory A. Horowith, Esq., and Robert T. Schmidt, Esq., at Kramer,
Levin, Naftalis & Frankel LLP; and William T. Bowden, Esq.,
Benjamin W. Keenan, Esq., and Karen B. Skomorucha, Esq., at Ashby
& Geddes, P.A., serve as counsel to the Creditors Committee. FTI
Consulting Inc. is the financial advisor.
AHERN RENTALS: Files Chapter 11 Plan of Reorganization Plan
-----------------------------------------------------------
BankruptcyData.com reports that Ahern Rentals filed with the U.S.
Bankruptcy Court a Chapter 11 Plan of Reorganization and related
Disclosure Statement.
According to the Disclosure Statement, treatment under the Plan
includes the following: "Each Holder of an Allowed Administrative
Claim shall be paid in full and final satisfaction of such Claim
by Reorganized Ahern (or otherwise satisfied in accordance with
its terms), upon the latest of (i) the Distribution Date, (ii) the
date on which its Administrative Claim becomes an Allowed
Administrative Claim, (iii) the date on which its Administrative
Claim becomes payable under any agreement with the Debtor relating
thereto, (iv) in respect of liabilities incurred in the ordinary
course of business, the date upon which such liabilities are
payable in the ordinary course of the Debtor's business,
consistent with past practice, or (v) such other date as may be
agreed upon between the Holder of such Allowed Administrative
Claim and the Debtor or Reorganized Ahern, as the case may be.
Each Holder of an Allowed Priority Tax Claim, if any, will, in
full and final satisfaction of such Claim, be paid in full (or be
treated in compliance with Section 1129(a)(9)(C) of the Bankruptcy
Code) by Reorganized Ahern on the later of (i) the Effective Date
or as soon thereafter as practicable; (ii) such date as may be
fixed by the Bankruptcy Court; (iii) the first Business Day
following the fourteenth (14th) day after the date on which an
order allowing such Claim becomes a Final Order; or (iv) such date
as is agreed to by the Holder of such Claim and Debtor or
Reorganized Ahern, as the case may be."
About Ahern Rentals
Founded in 1953 with one location in Las Vegas, Nevada, Ahern
Rentals Inc. -- http://www.ahern.com/-- now offers rental
equipment to customers through its 74 locations in Arizona,
Arkansas, California, Colorado, Georgia, Kansas, Maryland,
Nebraska, Nevada, New Jersey, New Mexico, North Carolina, North
Dakota, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee,
Texas, Utah, Virginia and Washington.
Ahern Rentals filed a voluntary Chapter 11 petition (Bankr. D.
Nev. Case No. 11-53860) on Dec. 22, 2011, after failing to obtain
an extension of the Aug. 21, 2011 maturity of its revolving credit
facility. Judge Bruce T. Beesley presides over the case. Lawyers
at Gordon Silver serve as the Debtor's counsel. The Debtor's
financial advisors are Oppenheimer & Co. and The Seaport Group.
Kurtzman Carson Consultants LLC serves as claims and notice agent.
Counsel to Bank of America, as the DIP Agent and First Lien Agent,
are Albert M. Fenster, Esq., and Marc D. Rosenberg, Esq., at Kaye
Scholer LLP, and Robert R. Kinas, Esq., at Snell & Wilmer.
Attorneys for the Majority Term Lenders are Paul Aronzon, Esq.,
and Robert Jay Moore, Esq., at Milbank, Tweed, Hadley & McCloy
LLP. Counsel for the Majority Second Lienholder are Paul V.
Shalhoub, Esq., Joseph G. Minias, Esq., and Ana M. Alfonso, Esq.,
at Willkie Farr & Gallagher LLP. Attorney for GE Capital is James
E. Van Horn, Esq., at McGuirewoods LLP. Wells Fargo Bank is
represented by Andrew M. Kramer, Esq., at Otterbourg, Steindler,
Houston & Rosen, P.C. Allan S. Brilliant, Esq., and Glenn E.
Siegel, Esq., at Dechert LLP argue for certain revolving lenders.
Attorneys for U.S. Bank National Association, as successor to
Wells Fargo Bank, as collateral agent and trustee for the benefit
of holders of the 9-1/4% Senior Secured Notes Due 2013 under the
Indenture dated Aug. 18, 2005, is Kyle Mathews, Esq., at Sheppard,
Mullin, Richter & Hampton LLP and Timothy Lukas, Esq., at Holland
& Hart.
In its schedules, the Debtor disclosed $485.8 million in assets
and $649.9 million in liabilities.
The Official Committee of Unsecured Creditors has tapped Covington
& Burling LLP as counsel, Downey Brand LLP as local counsel, and
FTI Consulting as financial advisor.
AHERN RENTALS: Dec. 19 Hearing on Lenders' Request for Payments
---------------------------------------------------------------
The Hon. Bruce T. Beesley of the U.S. Bankruptcy Court for the
District of Nevada will conduct a hearing Dec. 19, 2012, at
10 a.m., to consider a request by Ahern Rentals' majority term
lenders to direct the Debtor to comply with, and make required
adequate protection payments under, a cash collateral stipulation.
As reported in the Troubled Company Reporter on Feb. 2, 2012, the
Debtor signed a stipulation with majority term lenders for access
to the term lenders' cash collateral during the pendency of the
Chapter 11 case.
The majority term lenders comprise Liberty Harbor Master Fund I,
L.P., and Goldman Sachs Palmetto State Credit Fund, L.P.
The stipulation presented by the parties provide the Debtor's
access to cash collateral will expire 11:59 p.m. (New York City
time) on March 22, 2013, or at an earlier date in the event
certain conditions are not met by the Debtor.
The Debtor has said it needs access to DIP financing and cash
collateral to permit the orderly continuation of the business,
preserve the going-concern value of the Debtor and satisfy other
working capital needs.
The parties have agreed to a 13-week cash flow budget.
To the extent of any diminution in value of the prepetition
collateral, the Debtor agrees to provide adequate protection in
the form of, among other things, first lien adequate protection
liens, claims under 11 U.S.C. Sec 507(b), and payment of all
interest accruing on the term loan, and reimbursement of expenses.
The term lenders are entitled to retain one financial advisor or
consultant upon the occurrence of an event of default under the
DIP financing.
About Ahern Rentals
Founded in 1953 with one location in Las Vegas, Nevada, Ahern
Rentals Inc. -- http://www.ahern.com/-- now offers rental
equipment to customers through its 74 locations in Arizona,
Arkansas, California, Colorado, Georgia, Kansas, Maryland,
Nebraska, Nevada, New Jersey, New Mexico, North Carolina, North
Dakota, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee,
Texas, Utah, Virginia and Washington.
Ahern Rentals filed a voluntary Chapter 11 petition (Bankr. D.
Nev. Case No. 11-53860) on Dec. 22, 2011, after failing to obtain
an extension of the Aug. 21, 2011 maturity of its revolving credit
facility. Judge Bruce T. Beesley presides over the case. Lawyers
at Gordon Silver serve as the Debtor's counsel. The Debtor's
financial advisors are Oppenheimer & Co. and The Seaport Group.
Kurtzman Carson Consultants LLC serves as claims and notice agent.
Counsel to Bank of America, as the DIP Agent and First Lien Agent,
are Albert M. Fenster, Esq., and Marc D. Rosenberg, Esq., at Kaye
Scholer LLP, and Robert R. Kinas, Esq., at Snell & Wilmer.
Attorneys for the Majority Term Lenders are Paul Aronzon, Esq.,
and Robert Jay Moore, Esq., at Milbank, Tweed, Hadley & McCloy
LLP. Counsel for the Majority Second Lienholder are Paul V.
Shalhoub, Esq., Joseph G. Minias, Esq., and Ana M. Alfonso, Esq.,
at Willkie Farr & Gallagher LLP. Attorney for GE Capital is James
E. Van Horn, Esq., at McGuirewoods LLP. Wells Fargo Bank is
represented by Andrew M. Kramer, Esq., at Otterbourg, Steindler,
Houston & Rosen, P.C. Allan S. Brilliant, Esq., and Glenn E.
Siegel, Esq., at Dechert LLP argue for certain revolving lenders.
Attorneys for U.S. Bank National Association, as successor to
Wells Fargo Bank, as collateral agent and trustee for the benefit
of holders of the 9-1/4% Senior Secured Notes Due 2013 under the
Indenture dated Aug. 18, 2005, is Kyle Mathews, Esq., at Sheppard,
Mullin, Richter & Hampton LLP and Timothy Lukas, Esq., at Holland
& Hart.
In its schedules, the Debtor disclosed $485.8 million in assets
and $649.9 million in liabilities.
The Official Committee of Unsecured Creditors has tapped Covington
& Burling LLP as counsel, Downey Brand LLP as local counsel, and
FTI Consulting as financial advisor.
ALAN MURRAY: Class 8 Claim Entitled to 5% Interest
--------------------------------------------------
Bankruptcy Judge Alan Jaroslovsky ruled on the objection of Del
Norte County to the confirmation of the Chapter 11 reorganization
plan of Alan and Elizabeth Murray.
Del Norte County, a Class 8 creditor under the plan, is
represented by an attorney from the same law firm that represents
a group of tenants at one of the Murrays' recreational vehicle
parks. Del Norte County holds a note of the Murrays secured by a
second deed of trust to the real property at 16800 Highway 101
North, Smith River, California. The property is encumbered by a
senior deed of trust to South Valley Bank securing an obligation
of $975,516. The plan proposes to pay the secured claim with
interest in monthly payments amortized over 15 years if it is less
than $50,000. Del Norte County did not exercise its right to be
considered fully secured pursuant to Sec. 1111(b) of the
Bankruptcy Code.
The Murrays took the position that the property was worth almost
nothing over the amount owed on the senior lien. Del Norte County
then commissioned a qualified appraisal which valued the property
at $1 million, supporting the plan.
The Court finds that Del Norte County has a secured class 8 claim
for $24,483.84. The Court will sustain the objection only insofar
as interest is concerned; the Murrays have not established that
the interest rate they propose meets the requirements of law.
Accordingly, Judge Jaroslovsky said, the secured class 8 claim
will bear interest at the contract rate of 5% if the plan is
confirmed, notwithstanding anything to the contrary in the plan.
Except as provided, the objection of Del Norte County is
overruled, the judge added.
A copy of the Court's Nov. 29, 2012 Memorandum is available at
http://is.gd/26h1F7from Leagle.com.
Alan and Elizabeth Murray filed a joint Chapter 11 bankruptcy
petition (Bankr. N.D. Calf. Case No. 11-10535) on Feb. 15, 2011.
ALAN MURRAY: Law Firm's Arguments Against Plan Go Astray
--------------------------------------------------------
Bankruptcy Judge Alan Jaroslovsky overruled the confirmation
objection of Hart, King & Coldren, a Class 9 creditor under the
Chapter 11 plan of reorganization of Alan and Elizabeth Murray.
"The court has been hearing cases in Eureka for many years, and
understands that the volume of cases there does not justify any
great degree of expertise in bankruptcy matters. Even so, the
court is astounded by Hart's objection. There is not a word in it
about its own treatment under the plan. Instead, Hart has picked
up the mantle of the Tenants, the very people the Murrays hired it
to fight," said Judge Jaroslovsky.
Hart is a former law firm for the Murrays. It represented the
Murrays in one stage of their ongoing disputed with a handful of
disgruntled tenants of one of the Murrays' recreational vehicle
parks. When the Murrays did not pay their legal bills, the firm
sued them obtained a judgment for $97,393.13, and recorded an
abstract of judgment which created a lien on the Murrays' real
property.
The plan proposes to treat the claim as secured to the extent of
the value of the security. The law firm did not exercise its
right under 11 U.S.C. Sec. 1111(b) to be treated as fully secured.
"Even taking into account the size of the Eureka community, the
court is confounded by this approach. A law firm has a legitimate
right to collect on its legal bills, but it seems to the court
that Hart is more interested in advancing the position of the
people the Murrays hired it to fight than in pursuing collection
of its fees. Hart does not seem to realize that there may well be
a conflict of interest between its legitimate interests and those
of other parties, especially the Tenants. To the extent the plan
gives the Murrays an advantage over the Tenants, they will have an
easier time meeting their obligations to the unsecured creditors,
which includes Hart if its judgment lien proves to be partially or
wholly without value," said Judge Jaroslovsky.
"Moreover, for some reason the court cannot fathom, Hart got the
idea that the final hearing on confirmation was only a preliminary
hearing, even though everyone else in the case understood that it
was a final hearing, including its former counsel. Hart has
accordingly forfeited its right to present evidence in this case.
"In principle, the court finds nothing wrong with Hart's treatment
under the plan," Judge Jaroslovsky said. "It is to be paid in
full with interest as to the value of its security, and will share
in the $85,000.00 pool as an unsecured creditor for the balance,
if any. Accordingly, its objection will be overruled. The court
will defer an order until its independent concerns are addressed.
The court strongly cautions Hart, in any future proceedings before
the court, to limit its arguments to those directly concerning its
right to payment and leave it to others to assert their own
rights."
A copy of the Court's Nov. 29, 2012 Memorandum is available at
http://is.gd/PrjjQWfrom Leagle.com.
Alan and Elizabeth Murray filed a joint Chapter 11 bankruptcy
petition (Bankr. N.D. Calf. Case No. 11-10535) on Feb. 15, 2011.
ALLOU DISTRIBUTORS: E.D.N.Y. Court Rules in 2004 Clawback Suit
--------------------------------------------------------------
Bankruptcy Judge Elizabeth S. Stong granted a motion of Kenneth P.
Silverman, as Chapter 7 Trustee of Allou Distributors, Inc. and
other entities, for partial summary judgment on claims asserted in
a 2004 lawsuit filed by the Allou Trustee and Congress Financial
Corporation, now known as Wells Fargo Bank, N.A., as agent for
itself and other lenders, against certain individual and corporate
defendants in connection with the fraud committed by Allou's
principals.
The Individual Defendants are Silvia Domb a/k/a Sylvia Domb, Eva
Silberstein a/k/a Eva Silverstein a/k/a Eva Jacobowitz, Sara
Jacobowitz, Chanie Jacobowitz, and Ari Jacobowitz a/k/a Aaron
Jacobowitz. The Plaintiffs seek to hold the Individual Defendants
liable under theories of aiding and abetting breach of fiduciary
duty and aiding and abetting fraud, based on the Individual
Defendants' alleged knowledge of and participation in the breach
of fiduciary duty and fraud perpetrated by Allou's former
management.
The Corporate Defendants are A-Z RX, LLC; Ever Ready First Aid
Medical Supply Corp. d/b/a A&M Enterprise; and Dixie EMS Supply
USA LLC. The Plaintiffs bring Claims against the Corporate
Defendants under New York's Debtor and Creditor Law Sections 273,
274, and 275 and Bankruptcy Code Sections 548(a)(1)(B), 550(a),
and 551, to recover funds transferred to the Corporate Defendants
by Allou, its principals, and affiliates.
The Plaintiffs also seek the imposition of a constructive trust
against the Corporate Defendants, and allege the Corporate
Defendants were unjustly enriched by transfers they received from
Allou, its principals, and affiliates.
The Defendants have argued that the Individual Defendants'
knowledge of the transfers is a factual issue that cannot be
resolved on a motion for summary judgment. The Defendants also
argued the Trustee's claims are barred by the three-year statute
of limitations for claims of breach of fiduciary duty and
conversion.
The Defendants rejected the Trustee's attempt to hold them liable
for $200 million. The Defendants assert that at most, the
Trustee's evidence links particular Individual Defendants with
some of the transactions and the Corporate Defendants.
Relying on Stern v. Marshall, 131 S.Ct. 2594 (2011), the
Defendants also argued that the Bankruptc Court lacks jurisdiction
to enter a final judgment because the Complaint asserts state law
causes of action.
In a Dec. 3 ruling, the Bankruptcy Court granted summary judgment
to the Trustee with respect to these Claims:
* unjust enrichment against A-Z, in the amount of $81,533.47,
* unjust enrichment against Ever Ready and Dixie, in the
amount of $85,504,850.42,
* avoid and recover a transfer made by Allou to A-Z in the
amount of $81,533.47,
* avoid and recover a transfer made by the Debtors to A-Z in
the amount of $81,533.47,
* avoid and recover transfers made by the Debtors to Ever
Ready and Dixie in the amount of $85,504,850.42, and
* avoid and recover transfers made by the Debtors to Ever
Ready and Dixie in the amount of $47,964,156.69.
A copy of Judge Stong's Dec. 3, 2012 Memorandum Decision is
available at http://is.gd/yGjijzfrom Leagle.com. Judge Song also
held that in the event the District Court concludes the Bankruptcy
Court may not enter a final order or judgment consistent with
Article III of the Constitution on those claims, her Memorandum
Decision and accompanying order may be treated as proposed
findings of fact and conclusions of law pursuant to 28 U.S.C. Sec.
157(c).
Prior to its bankruptcy filing, Allou Distributors, Inc., was a
distributor of health and beauty aid products, pharmaceuticals,
fragrances, and cosmetics. On April 9, 2003, involuntary Chapter
11 petitions were filed against ADI and three of its affiliates,
M. Sobol, Inc., Direct Fragrances, Inc., and Standford Personal
Care, Inc. (Bankr. E.D.N.Y. Case Nos. 03-82321, through 03-
82325). The Original Debtors consented to the entry of orders for
relief under Chapter 11, and on April 10, 2003, the Court issued
orders for relief in each of the Original Debtors' Chapter 11
cases. On April 18, 2003, involuntary Chapter 11 petitions were
filed against two ADI affiliates, Trans World Grocers Inc. and
Rona Beauty Supplies, Inc. (Bankr. E.D.N.Y. Case Nos. 03-82660 and
03-82661). On May 1, 2003, the Court entered orders for relief in
the Chapter 11 cases of the Subsequent Debtors. On April 25,
2003, voluntary Chapter 11 petitions were filed on behalf of four
ADI subsidiaries, Core Marketing, Inc., HBA Distributors, Inc.,
HBA National Sales Corp., and Pastel Cosmetic & Beauty Aids, Inc.
(Bankr. E.D.N.Y. Case Nos. 03-82838 through 03-82841). On July
11, 2003, Allou Healthcare Inc., a direct or indirect parent of
the Debtors, consented to the entry of an order for relief under
Chapter 11 and the joint administration of its case with those of
the Original Debtors and Subsequent Debtors (Bankr. E.D.N.Y. Case
No. 03-82662). By order dated September 16, 2003, the Debtors'
Chapter 11 cases were converted to liquidation cases under Chapter
7 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 03-82321,
Docket No. 583). Kenneth P. Silverman was appointed as the
Chapter 7 trustee in these cases. Id. The Debtors' cases were
substantively consolidated by order dated December 22, 2003
(Docket No. 923).
Allou's Principals Victor Jacobs and his sons Herman Jacobs and
Jacob Jacobs held approximately 61 percent of the voting stock of
AHI. The Jacobs held various positions as officers of Allou and
were controlling shareholders of Allou at all relevant times. On
June 30, 2003, involuntary Chapter 7 bankruptcy petitions were
filed against Victor Jacobs, Herman Jacobs, and Jacob Jacobs.
Orders for relief were entered on September 9, 2003, and Allan B.
Mendelsohn was appointed as the Chapter 7 trustee in these cases.
AMC NETWORK: Moody's Changes 'Ba3' CFR Outlook to Positive
----------------------------------------------------------
Moody's Investors Service changed AMC Network Inc.'s (Ba3
Corporate Family Rating) rating outlook to positive from stable.
The company's Ba3 CFR, Ba3 PDR (Probability of Default Rating),
and SGL-2 Speculative Grade Liquidity rating remain unchanged.
The outlook change reflects the company's consistent focus on debt
reduction over the past year, it having repaid over $250 million
in debt and reduced leverage by about a turn since mid-2011. A
demonstrated commitment by management to maintain a more
conservative capital structure, and continued EBITDA growth and
debt reduction that reduces leverage to the mid-3.0x range could
result in an upgrade over the next 18 months. Moody's believes
that proceeds from the settlement of the company's VOOM-related
litigation with DISH Network Corporation (DISH) as well as growth
in carriage fees will enhance debt reduction opportunities.
The settlement calls for a cash payout of $700 million, the
proceeds of which would be shared between Ca blevision Systems
Corporation (Cablevision) and AMC, and though the allocation of
settlement proceeds between both parties is yet to be determined,
Moody's believes it may be significant enough for AMC to aid debt
reduction. "We expect the company to apply a material portion of
the settlement proceeds towards debt reduction, accelerating its
de-leveraging trajectory relative to Moody's initial
expectations," stated neil Begley, a Moody's Senior Vice
President. The settlement also resulted in the reinstatement of
the carriage of AMC's networks on DISH, which accounts for about
13% of its subscriber base and which Moody's believes accounts for
a higher proportion of the company's EBITDA. "We believe this will
support the company's strong growth prospects, as greater
distribution of its networks and the continued success of its
programming results in growth across its revenue streams - digital
streaming and licensing fees, affiliate fees as well as
advertising revenue," added Begley.
The following is a summary of the rating actions:
Outlook Changes:
Issuer: AMC Networks, Inc.
Rating Outlook Changed to Positive from Stable
Ratings Rationale
AMC's Ba3 Corporate Family Rating reflects the company's positive
and reliable free cash flow generation, aided by the contractual
nature of over 50% of the company's revenue which is generated by
carriage fees from pay TV providers. The rating is also impacted
by AMC's relatively high, but moderating leverage of approximately
4.85x (incorporating Moody's standard adjustments, pro-forma for
debt pay down in November 2012) at 9/30/2012. Moody's anticipates
that the company will use free cash flow to pay down debt, and
Moody's expects leverage will decline to under 4.0x by the end of
2013. The rating incorporates the risk associated with customer
and revenue concentration (approximately 50% from its AMC Network)
and a highly competitive environment in which programming drives
viewership and advertising revenues. It is also somewhat impacted
by event risk concerns as the company's controlling owner, the
Dolan family, has historically been comfortable with leveraging
and transformative events. These risks remain balanced, however,
by the company's desirable and well distributed cable networks
which Moody's estimates could draw interest from strategic buyers
in the double digit multiple range. The company also has a strong
liquidity profile, as Moody's projects that it will generate over
$200 million of annual free cash flow on average over the
intermediate-term and will maintain a largely undrawn revolver of
$500 million.
The positive rating outlook reflects Moody's expectation for
continued strong operating performance of the core networks (AMC,
WE tv, IFC and Sundance Channel), and that strong free cash flow
generation in addition to a portion of expected litigation
settlement proceeds are used to repay debt. Moody's anticipates
the company will materially reduce leverage over the next 18-24
months and continue to maintain a solid liquidity profile.
An upgrade of the company's CFR could occur if management
demonstrated and made a commitment to a less volatile and more
fiscally conservative capital structure on a sustained basis. The
rating could be upgraded if debt-to-EBITDA leverage is sustained
at or below 3.5x.
The rating could be downgraded if management applies cash to fund
returns to equity investors instead of reducing leverage. In
addition, a view that values were materially diminishing for cable
networks and/or any potential damage to the AMC brand, in
particular, or a more constrained liquidity profile, could also
put downward pressure on the company's ratings.
The principal methodology used in rating AMC was the Global
Broadcast and Advertising Related Industries Methodology published
in May 2012. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
With its headquarters in New York, New York, AMC Networks, Inc.
supplies television programming to cable, direct broadcast
satellite and telecommunications service providers throughout the
United States. The company predominantly operates four
entertainment programming networks - AMC, WE tv, IFC and Sundance
Channel.
AMERICAN AIRLINES: Estimates Value of Collateral at $2.5 Billion
----------------------------------------------------------------
AMR Corporation delivered an appraisal of collateral, dated
Nov. 30, 2012, for the 7.5% senior secured notes due 2016 using a
discount rate of 11.5% and a perpetuity growth rate of 1.5% lists
the Appraised Value of its collateral. AMR valued the Collateral
at $2,575,893,000.
American Airlines, Inc., AMR Corporation, U.S. Bank National
Association, as trustee and Wilmington Trust Company, as
collateral trustee, entered into an indenture on March 15, 2011.
The Company has delivered the appraisal pursuant to Section 4.19
of the Indenture.
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 AIRLINES: Dec. 19 Hearing on Exclusivity Extension Bid
---------------------------------------------------------------
AMR Corp. and its debtor affiliates filed a motion asking Judge
Sean Lane of the U.S. Bankruptcy Court for the Southern District
of New York to further extend their exclusive right to file a
Chapter 11 plan and solicit plan votes from creditors.
The Debtors want the plan filing deadline extended to March 11,
2013, and the solicitation deadline to May 10. The current
exclusivity window is set to end in January.
The request was made jointly with the committee representing AMR's
unsecured creditors.
In the court filing, AMR said it is refining its business plan and
is working with creditors on a "collaborative review of strategic
alternatives."
Sean Collins, a spokesman for American, said in a statement that
the company "has made significant progress in its restructuring."
"The work, while progressing well, takes time."
The extension bars creditors and other parties from filing
competing plans and maintains AMR's control over its
restructuring. That effectively blocks US Airways Group Inc.
from making a hostile bid since any merger plan unveiled during
exclusivity would have to be proposed by AMR itself.
US Airways has been pursuing a merger with American Airlines
since shortly after the latter filed for bankruptcy protection.
It even negotiated tentative labor contracts with the airline's
unions on how they would be treated in a merger to get their
support for a deal.
American Airlines has said it is open to exploring a merger while
it has simultaneously crafted a plan to emerge from bankruptcy
protection as an independent airline.
AMR's pilots union, in the midst of bitter contract talks with
the company, supports the merger and called the extension request
a sign that "things are proceeding in a positive way," according
to a November 30 report by Reuters.
"We assume that the strategic alternative talks, which include US
Airways, are functional," Reuters quoted union spokesman Dennis
Tajer as saying.
A court hearing is scheduled for December 19. Objections are due
by December 12.
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 AIRLINES: Supreme Court Declines Stay of PSA Election
--------------------------------------------------------------
The U.S. Supreme Court cleared the way for a vote on whether the
Communications Workers of America can represent American Airlines
Inc.'s passenger service agents when it denied the airline's bid
to stay a Fifth Circuit ruling allowing the vote, Bankruptcy
Law360 reported.
In a short docket order, Justice Antonin Scalia denied American
Airlines' request to delay judgment in the Fifth Circuit case
while the airline appeals the ruling, which reversed a district
court's decision blocking the vote because of lack of
jurisdiction, according to the report.
In June, American Airlines won a victory 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, saying
only 35% support was required, according to a report by Bloomberg
News.
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. American Airlines sought a rehearing in the appeals
court and lost on Oct. 30.
On Nov. 19, the appeals court refused to hold up implementation
of its October ruling overturning the district court's decision
barring the election. Two days after, the airline asked the
Supreme Court to hold up the election.
The Communications Workers said the NMB scheduled the vote to
begin Dec. 4 and continue through Jan. 15.
The stay motion in the Supreme Court is, American Airlines Inc. v.
National Mediation Board, 12a512, U.S. Supreme Court. The appeal
in the circuit court was American Airlines Inc. v. National
Mediation Board, 12-10680, U.S. Court of Appeals for the Fifth
Circuit (New Orleans).
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 AIRLINES: Seeks Approval of Boeing Lease Amendments
------------------------------------------------------------
American Airlines Inc. and its affiliated debtors asked the U.S.
Bankruptcy Court in Manhattan to approve amendments to certain
aircraft lease agreements.
The airline entered into the agreements prior to its bankruptcy
filing to lease Boeing 737-823 aircraft from Wilmington Trust Co.
The proposed amendments remove from the lease contracts an
exception to American Airlines' obligation to pay rent during any
period in which the airline has been deprived of possession of
the aircraft as a result of a breach of contract.
The amendments have the effect of making American Airlines'
obligations to pay rent "absolute and unconditional" such that
the airline will not be relieved of its obligation under any
circumstance, according to its lawyer, Alfredo Perez, Esq., at
Weil Gotshal & Manges LLP, in New York.
A copy of the court document detailing the proposed changes to
the aircraft lease agreements can be accessed for free
at http://bankrupt.com/misc/AMR_BoeingLeasesAmendments.pdf
A court hearing is scheduled for December 19. Objections are due
by December 12.
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 AIRLINES: ICF SH&E Modified Agreement Approved
-------------------------------------------------------
The U.S. Bankruptcy Court in Manhattan approved AMR Corp.'s
amended consulting agreement with ICF SH&E Inc.
Under the amended agreement, ICF SH&E agreed to appraise AMR's
aviation-related assets in connection with the fresh start
accounting required upon emergence from Chapter 11 protection,
and to conduct a valuation of the company's aircraft leasehold
improvements.
The firm will receive $395,000 for the appraisals of AMR's
aviation-related assets and $20,000 for the appraisals of the
aircraft leasehold improvements.
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 AIRLINES: Passenger Service Agents Begin Union Vote
------------------------------------------------------------
Karen Jacobs, writing for Reuters, reports that American Airlines
passenger service agents, the only major employee group at the
carrier not unionized, began voting Tuesday on whether to be
represented by the Communications Workers of America union. About
9,700 airport agents and reservations representatives are eligible
to cast ballots in a vote being conducted by the National
Mediation Board, said Chuck Porcari, a CWA spokesman. Voting ends
Jan. 15.
Reuters notes the U.S. Supreme Court cleared the way for the vote
last week when it denied American's request for a stay of an
earlier ruling that upheld the election.
The report recounts American says it sought to block the union
vote because at least half of the eligible workers didn't show
interest in joining a union, as required by a law that took effect
this year.
According to the report, the NMB said that the older, 35% standard
should apply because the union had filed for an election before
the law changed earlier this year, according to the CWA. The CWA
says a union is needed to protect American's agents, who perform
tasks such as checking in passengers and taking customer service
calls, as the company has been outsourcing agent jobs and cutting
pay and benefits.
Reuters also notes American's pilots are due to wrap up voting on
a tentative agreement on Friday that offers an initial 4% pay
raise and a 13.5% equity stake in AMR after it exits bankruptcy.
American offered equity stakes of 4.8% and 3%, respectively, in
contracts it reached this year with unionized ground workers and
flight attendants.
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 SUZUKI: Settling Dealers to Recover 100%
-------------------------------------------------
Carla Main, substituting for Bloomberg News bankruptcy columnist
Bill Rochelle, reports that American Suzuki Motor Corp. won
support from 97% of its auto dealers to shut down new-car sales
while continuing warranty work for existing customers.
According to the report, Suzuki's parent company, Suzuki Motor
Corp., had asked its automobile dealers to voluntarily cancel
their existing franchise agreements in exchange for half of what
they are owed immediately and the rest through the normal
bankruptcy process, Suzuki said in court papers filed Dec. 3 in
U.S. Bankruptcy Court in Santa Ana, California.
The report notes that canceling the contracts means the dealers
will be owed about $42 million, according to court papers. The
dealers who accepted the offer will be repaid everything they are
owed, which is rare in bankruptcy court, M. Freddie Reiss,
American Suzuki's chief restructuring officer, said in an
interview.
The report notes that in November, Shizuoka, Japan-based Suzuki
Motor put the distributor into bankruptcy to end losses in the
U.S. market, to avoid the costs of tightening federal regulations
and to shut down a sales network in which 69% of dealers sell
fewer than five cars a month. By winning support from almost all
of its dealers, the company may avoid long court battles over the
franchise agreements, which are often protected by state laws.
Because of the settlement, the company should be able to
restructure and exit bankruptcy on time, American Suzuki said in a
statement.
American Suzuki owes its parent about $152 million, according to
court records. To help guarantee dealers who settled will be
repaid everything owed to them, Suzuki Motor agreed to subordinate
that debt, M. Freddie Reiss, American Suzuki's chief restructuring
officer, said in an interview.
The company plans to reorganize its motorcycle, boat and all-
terrain vehicle business and continue selling through separate
dealers, American Suzuki said in court papers. Dealers will sell
their remaining cars and continue to provide parts and warranty
work and other repairs to hundreds of thousands of Suzuki
automobile owners, the company said in a statement.
American Suzuki auto sales rose 22% in November to 2,224 units,
the company said in a statement. That leaves the company with
about 1,700 cars in the U.S. to be delivered to dealers, Mr. Reiss
said. Those cars are likely to be sold by March, he said.
About American Suzuki
Established in 1986, American Suzuki Motor Corporation is the sole
distributor of Suzuki automobiles and vehicles in the United
States. American Suzuki wholesales virtually all of its inventory
through a network of independently owned and unaffiliated
dealerships located throughout the continental United States.
The dealers then market and sell the Suzuki Products to retail
customers. Suzuki Motor Corp., the 100% interest holder in the
Debtor, manufacturers substantially all of the Suzuki products.
American Suzuki has 295 employees. There are approximately 220
automotive dealerships, over 900 motorcycle/ATV dealerships, and
over 780 outboard marine dealerships.
American Suzuki filed a Chapter 11 petition (Bankr. C.D. Calif.
Case No. 12-22808) on Nov. 5, 2012, to sell the business to SMC,
absent higher and better offers. SMC is not included in the
Chapter 11 filing. The Debtor disclosed assets of $233 million
and liabilities totaling $346 million. Debt includes $32 million
owing to the parent on a revolving credit and $120 million for
inventory financing. There is about $4 million owing to trade
suppliers.
The Debtor also filed a plan of reorganization together with the
petition. Under the proposed Plan, the Motorcycles/ATV and Marine
Divisions will remain largely unaffected including the warranties
associated with the products. NounCo, Inc., a wholly owned
subsidiary of SMC, will purchase the Motorcycles/ATV and Marine
Divisions and the parts and service components of the Automotive
Division. The restructured Automotive Division intends to honor
automotive warranties and authorize the sale of genuine Suzuki
automotive parts and services to retail customers through a
network of parts and service only dealerships that will provide
warranty services.
Bankruptcy Judge Catherine E. Bauer signed an order Oct. 6
reassigning the case to Judge Scott Clarkson. ASMC's legal
advisor on the restructuring is Pachulski Stang Ziehl & Jones LLP,
and its financial advisor is FTI Consulting, Inc. Nelson Mullins
Riley & Scarborough LLP is serving as special counsel on
automobile dealer and industry issues. Further, ASMC has proposed
the appointment of Freddie Reiss, Senior Managing Director at FTI
Consulting, as chief restructuring officer, and has also added two
independent Board members to assist it through this period. Rust
Consulting Omni Bankruptcy, a division of Rust Consulting, Inc.,
is the claims and notice agent. The Debtor has retained Imperial
Capital, LLC as investment banker.
SMC is represented by lawyers at Klee, Tuchin, Bogdanoff & Stern
LLP.
AMF BOWLING: Junior Lenders Protest Auction Rules
-------------------------------------------------
Jacqueline Palank at Daily Bankruptcy Review reports that AMF
Bowling Worldwide Inc.'s junior lenders hope to bid on the company
and are protesting auction rules that they say establish AMF's
senior lenders "as the only game in town" for the bowling alley
chain.
Max Stendahl at Bankruptcy Law360 reports that JPMorgan Chase Bank
NA and a unit of private equity firm Cerberus Capital Management
LP on Monday objected to AMF Bowling Worldwide Inc.'s
restructuring plan, telling a Virginia federal judge the bankrupt
bowling center operator had not won over key lenders.
Bankruptcy Law360 relates that JPMorgan and Cerberus Series Four
Holdings LLC, which hold $79.7 million in AMF Bowling Worldwide
Inc.'s debt, said only a handful of the company's first-lien
lenders approved of the Chapter 11 plan.
About AMF Bowling Worldwide
AMF Bowling Worldwide Inc. is the largest operator of bowling
centers in the world. The Company and several affiliates sought
Chapter 11 protection (Bankr. E.D. Va. Case Nos. 12-36493 to
12-36508) on Nov. 12 and 13, 2012, after reaching an agreement
with a majority of its secured first lien lenders and the landlord
of a majority of its bowling centers to restructure through a
first lien lender-led debt-for-equity conversion, subject to
higher and better offers through a marketing process. At the time
of the bankruptcy filing, AMF operated 262 bowling centers across
the United States and, through its non-Debtor facilities, and 8
bowling centers in Mexico -- more than three times the number of
bowling centers of its closest competitor.
Debt for borrowed money totals $296 million, including
$216 million on a first-lien term loan and revolving credit,
and $80 million on a second-lien term loan.
Mechanicsville, Virginia-based AMF first filed for bankruptcy
reorganization in July 2001 and emerged with a confirmed Chapter
11 plan in February 2002 by giving unsecured creditors 7.5% of the
new stock. The bank lenders, owed $625 million, received a
combination of cash, 92.5% of the stock, and $150 million in new
debt. At the time, AMF had over 500 bowling centers.
Judge Kevin R. Huennekens oversees the 2012 case, taking over from
Judge Douglas O. Tice, Jr. The petitions were signed by Stephen
D. Satterwhite, chief financial officer/chief operating officer.
Patrick J. Nash, Jr., Esq., Jeffrey D. Pawlitz, Esq., and Joshua
A. Sussberg, Esq., at Kirkland & Ellis LLP; and Dion W. Hayes,
Esq., John H. Maddock III, Esq., and Sarah B. Boehm, Esq., at
McGuirewoods LLP, serve as the Debtors' counsel. Moelis & Company
LLC serves as the Debtors' investment banker and financial
advisor. McKinsey Recovery & Transformation Services U.S., LLC,
serves as the Debtors' restructuring advisor. Kurtzman Carson
Consultants LLC serves as the Debtors' claims and noticing agent.
Kristopher M. Hansen, Esq., Sayan Bhattacharyya, Esq., and
Marianne S. Mortimer, Esq., at Stroock & Stroock & Lavan LLP; and
Peter J. Barrett, Esq., and Michael A. Condyles, Esq., at Kutak
Rock LLP, represent the first lien lenders.
An ad hoc group of second lien lenders are represented by Lynn L.
Tavenner, Esq., and Paula S. Beran, Esq., at Tavenner & Beran,
PLC; and Ben H. Logan, Esq., Suzzanne S. Uhland, Esq., and
Jennifer M. Taylor, Esq., at O'Melveny & Myers LLP.
The Official Committee of Unsecured Creditors is represented by
lawyers at Pachulski Stang Ziehl & Jones LLP, and Christian &
Barton LLP.
AS SEEN ON TV: CeeLo Green to Endorse Ediets Products
-----------------------------------------------------
As Seen On TV, Inc., entered into a Binding Memorandum of Terms
Agreement with Eight Entertainment, LLC, and Primary Wave Talent
Management, LLC, on Nov. 28, 2012. Pursuant to the Agreement,
Eight Entertainment and Primary Wave have granted the Company and
eDiets.com, Inc., a license to use CeeLo Green's name and likeness
in connection with his endorsement of eDiets personalized weight-
loss-oriented meal delivery products and services. The term of
the Agreement is for a period of two years.
During the term of the Agreement, CeeLo Green has agreed to appear
for and participate in the filming and production of video footage
and photography and to make personal appearances and utilize
social media to endorse, promote and sell eDiets Products and
Services.
In consideration for granting the License and performing the
Services, the Company has agreed to compensate Eight Entertainment
and Primary Wave with a package consisting of cash, a royalty and
warrants. The consideration includes the issuance of warrants to
purchase 6,500,000 shares of the Company's common stock, subject
to achieving certain milestones, at exercise prices from $.01 to
$2.00 per share. The securities issued above were issued under
the exemption from registration provided by Section 4(a)(2) of the
Securities Act of 1933, as amended. The securities contain a
legend restricting transferability absent registration or
applicable exemption.
About As Seen on TV
Clearwater, Fla.-based As Seen On TV, Inc., is a direct response
marketing company. It identifies, develops, and markets consumer
products.
The Company reported a net loss of $8.07 million for the year
ended March 31, 2012, compared with a net loss of $6.97 million
during the prior fiscal year.
The Company's balance sheet at Sept. 30, 2012, showed
$9.74 million in total assets, $23.42 million in total liabilities
and a $13.68 million total stockholders' deficiency.
As reported by the TCR on Nov. 6, 2012, As Seen On TV entered into
an Agreement and Plan of Merger with eDiets Acquisition Company
("Merger Sub"), eDiets.com, Inc., and certain other individuals.
Pursuant to the Merger Agreement, Merger Sub will merge with and
into eDiets.com, and eDiets.com will continue as the surviving
corporation and a wholly-owned subsidiary of the Company.
ASCENSUS INC: Moody's Assigns 'B2' Corp. Family Rating
------------------------------------------------------
Moody's Investors Service assigned the following first-time
ratings to Ascensus, Inc.: B2 corporate family rating (CFR), B3
probability of default rating (PDR), and B2 ratings to the
proposed $175 million first lien term loan and $10 million
revolver. The rating outlook is stable.
Ratings Rationale
Ascensus' B2 corporate family rating (CFR) reflects the high
financial leverage of over 5 times (adjusted debt to EBITDA) and
small scale relative to larger and financially stronger business
services companies. Ascensus generates lower profit margins (low
teens operating margins) and free cash flow (about $10 million
projected for 2013, adjusting for non-recurring liabilities
associated with the sale of the insurance businesses) than other
transaction processing and business services peers. The company
also has relatively high revenue concentration with about half of
its Plan Services Group (PSG) segment revenues being derived from
three financial institution partners (who refer business to the
Ascensus platform). With the integration challenges arising from
the ExpertPlan acquisition (a provider of recordkeeping and
administrative services for very small plans) and minimal free
cash flow expected until 2014, financial leverage will likely
remain high.
Ascensus has a highly recurring fee model and longstanding
relationships with financial institution partners (average
contract of 3 to 5 years). Ascensus also benefits from a stable
market environment (a large and growing retirement asset industry)
and generally favorable trend of increasing regulatory compliance
and disclosure requirements.
The stable outlook reflects Moody's expectation of organic growth
of at least the mid single digits, smooth integration of the
ExpertPlan acquisition (expected to close by the end of 2012) with
modest synergies ramping in 2014, operating margins of about 11%
for 2013, and adjusted debt to EBITDA of less than 5 times by the
end of 2013.
The ratings could be upgraded if Ascensus achieves meaningful
organic revenue growth in the high single digits, free cash flow
to debt of 15%, and adjusted debt to EBITDA near 3 times on a
sustained basis. Downward ratings pressure could arise if Moody's
anticipates debt to EBITDA could exceed 5.5 times, liquidity
deteriorates due to a decline in profitability or with expectation
of negative free cash flow, or financial policies become more
aggressive (e.g., dividend payment to owners or cash acquisitions
without a proportionate increase in EBITDA).
The following ratings were assigned:
Corporate Family Rating -- B2
Probability of Default Rating -- B3
$10 million 1st lien Revolver -- B2 (LGD3 -- 35%)
$175 million 1st lien Term Loan -- B2 (LGD3 -- 35%)
The rating outlook is stable.
The principal methodology used in rating Ascensus, Inc. was the
Global Business & Consumer Service Industry Rating Methodology
published in October 2010. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
Ascensus, Inc., with projected annual revenues over $175 million,
is a retirement plan solutions and outsourcing provider of
recordkeeping and administrative services.
ASSYRIAN BABYLON: Court Finds Plan Feasible Based on Past Success
-----------------------------------------------------------------
Assyrian Babylon, LLC, may reopen its sports bar in Yuma, Arizona,
after a bankruptcy judge approved its Plan of Reorganization.
Bankruptcy Judge James M. Marlar ruled that the Plan is feasible.
Assyrian Babylon previously operated from leased premises at 2852
W. Highway 95, and was known as "Rumors Sports Bar and Grill." In
November 2010, a fire broke out in the bar, rendering a portion of
the facility uninhabitable or damaged. In June 2012, the Debtor
was required to surrender the premises by Court order due to non-
payment of rent. Since June 2012, the Debtor has had no physical
location from which to operate its bar.
On Aug. 2, 2012, the Debtor filed a Plan and Disclosure Statement.
In September 2012, the Debtor filed a supplemental disclosure
statement, indicating that:
* It finalized a new lease for 4340 E. 32nd Street;
* It was in the process of obtaining liquor license
approvals; and
* An investor, Robert Neufeld, was willing to infuse $30,000
into the enterprise.
Until the Court confirms its Plan, the Debtor cannot open for
business.
The major assets of the Debtor consist entirely of personalty or
general intangibles. Of the $53,055 in value listed for such
items in the Debtor's schedules, the liquor license is valued at
$30,000, while the remainder of the assets is made up, in the
main, of equipment and liquor inventory.
The principal creditors of the Debtor are Majid Jajo, Rasha MJ LLC
and Four Brothers Success, LLC, which filed a secured claim for
$262,724. Jajo et al. asserts a lien on the Debtor's personalty,
including the liquor license. Efforts by Jajo to gain stay relief
to foreclose on collateral, were denied by the Court, pending the
confirmation hearing.
The only other claims filed are for taxes, by both the state and
federal governments, which total $26,825.
According to the Debtor's schedules, unsecured undisputed trade
claims (which are not required to file proofs of claim) total
$19,317. Of that amount, $15,123 is owed to Carol A. Filby, the
enterprise's owner and 100% shareholder.
Prior to confirmation, the Debtor obtained stipulations for the
treatment of the tax-related claims of the State of Arizona. This
left only the opposition of Jajo to be addressed at confirmation.
"The odd part of the instant case is that there exists no
operating history of the Debtor at the new location to which it
intends to relocate. And, as one of the expert witnesses, Mr.
Donald Hulke, noted, the capital required in order to optimize the
chances for success of this venture is extremely thin," said Judge
Marlar. "On the other hand, there are factors which lean toward
making this a confirmable plan. While the initial capital
structure may be marginal, and the outlook for success at a new
location is challenging, we are dealing with a fairly small
business that has successfully operated in the past. Until the
fire occurred at its previous location, there was no evidence
presented to suggest that management was unprofessional or
incompetent, or that it had significant financial problems. Thus,
there is an apparent record of success for the entity."
"While the court understands the arguments made by Jajo, it
nonetheless can conclude, on the record before it, and considering
the differences between the feasibility opinions of the experts,
that the Debtor has met its burden of proof on feasibility.
"Jajo worries about the future status of its collateral. However,
no evidence was presented to show that either the liquor license
or the equipment would diminish in value, at least over the near
term of the Plan's operation, or will exceed in depreciation what
the Debtor proposes to pay each month. Jajo's principal argument
is that the Debtor can survive with a different classification of
liquor license, and that it does not need a No. 6. But that is
not the Debtor's Plan. This court can only evaluate the Plan
which is before it. And that Plan is feasible as written.
"Although legitimate differences of opinion exist over the thin
amount of new capital being infused, and recognizing that, while
more may be better, less is not fatal to feasibility."
A copy of the Court's Dec. 3, 2012 Memorandum Decision is
available at http://is.gd/uIRkPOfrom Leagle.com.
Yuma, Arizona-based Assyrian Babylon, LLC, dba Ron's Place, and
Rumors Sports Bar and Grill, filed a voluntary Chapter 11 petition
(Bankr. D. Ariz. Case No. 11-34059) on Dec. 15, 2011, estimating
under $1 million in both assets and debts. A copy of the petition
is available at http://bankrupt.com/misc/azb11-34059.pdf It is
represented by Dennis M. Breen, III, Esq., at Breen & Olson, PLC.
ATP OIL & GAS: Equity Holders Seek Probe of Oil Reserves' Value
---------------------------------------------------------------
Carla Main, substituting for Bloomberg News bankruptcy columnist
Bill Rochelle, reports that ATP Oil & Gas Corp.'s equity holders
asked a judge to appoint an examiner to investigate the value of
the bankrupt Gulf of Mexico oil producer's petroleum reserves.
The report relates that an examiner is needed to determine whether
the reserves have fallen so far in value that ATP should be sold
in a "fire-sale liquidation," a committee of equity security
holders said Dec. 3 in papers filed in U.S. Bankruptcy Court in
Houston. A report by ATP's bankruptcy lenders claims the reserves
are worth much less than previously estimated, the committee said.
If the report is flawed, "there is no basis for forcing the
liquidation," the committee said. If the company's original
estimates were materially misleading, ATP may be able to sue its
officers, the committee said.
About ATP Oil
Houston, Tex.-based ATP Oil & Gas Corporation is an international
offshore oil and gas development and production company focused
in the Gulf of Mexico, Mediterranean Sea and North Sea.
ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case
No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP,
serve as bankruptcy counsel. Porter Hedges LLP serves as local
co-counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts
counsel. Opportune LLP is the financial advisor and Jefferies &
Company is the investment banker. Kurtzman Carson Consultants LLC
is the claims and notice agent. Blackhill Partners, LLC, provided
James R. Latimer, III as chief restructuring officer to the
Debtor. Filings with the Bankruptcy Court and claims information
are available at http://www.kccllc.net/atpog
ATP disclosed assets of $3.6 billion and $3.5 billion of
liabilities as of March 31, 2012. Debt includes $365 million on a
first-lien loan where Credit Suisse AG serves as agent. There is
$1.5 billion on second-lien notes with Bank of New York Mellon
Trust Co. as agent. ATP's other debt includes $35 million on
convertible notes and $23.4 million owing to third parties for
their shares of production revenue. Trade suppliers have claims
for $147 million, ATP said in a court filing. In its schedules,
the Debtor disclosed $3,249,576,978 in assets and $2,278,831,445
in liabilities as of the Chapter 11 filing.
An official committee of unsecured creditors has been appointed in
the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley &
McCloy, in New York, represents the Creditors Committee as
counsel. Duff & Phelps Securities, LLC, serves as its financial
advisors. The Committee tapped Epiq Bankruptcy Solutions, LLC as
its information agent.
ATP OIL: Shareholders Seek Probe as Firm Moves Toward Sale
----------------------------------------------------------
Peg Brickley at Daily Bankruptcy Review reports that shareholders
are calling for an independent probe of an engineer's estimate of
reserves that triggered a lender drive to push ATP Oil & Gas Corp.
to find a buyer for its shelf and deepwater properties by the
spring.
About ATP Oil
Houston, Tex.-based ATP Oil & Gas Corporation is an international
offshore oil and gas development and production company focused
in the Gulf of Mexico, Mediterranean Sea and North Sea.
ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case
No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP,
serve as bankruptcy counsel. Porter Hedges LLP serves as local
co-counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts
counsel. Opportune LLP is the financial advisor and Jefferies &
Company is the investment banker. Kurtzman Carson Consultants LLC
is the claims and notice agent. Blackhill Partners, LLC, provided
James R. Latimer, III as chief restructuring officer to the
Debtor. Filings with the Bankruptcy Court and claims information
are available at http://www.kccllc.net/atpog
ATP disclosed assets of $3.6 billion and $3.5 billion of
liabilities as of March 31, 2012. Debt includes $365 million on a
first-lien loan where Credit Suisse AG serves as agent. There is
$1.5 billion on second-lien notes with Bank of New York Mellon
Trust Co. as agent. ATP's other debt includes $35 million on
convertible notes and $23.4 million owing to third parties for
their shares of production revenue. Trade suppliers have claims
for $147 million, ATP said in a court filing.
New financing is being provided by some of the first lien lenders.
An official committee of unsecured creditors has been appointed in
the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley &
McCloy, in New York, represents the Creditors Committee as
counsel. Duff & Phelps Securities, LLC, serves as its financial
advisors. The Committee tapped Epiq Bankruptcy Solutions, LLC as
its information agent.
BACK YARD BURGERS: Offers Unsecured Creditors $2 Million
--------------------------------------------------------
Marie Beaudette at Dow Jones' DBR Small Cap reports that Tennessee
restaurant chain Back Yard Burgers has amended its bankruptcy-exit
plan to give unsecured creditors, who were slated to recover
nothing, a $2 million payment.
About Back Yard Burgers
Back Yard Burgers -- http://backyardburgers.com/-- operates and
franchises more than 150 quick-service restaurants in 20 states,
primarily in markets throughout the Southeast region of the United
States. Back Yard Burgers Inc. and three of its affiliates sought
Chapter 11 protection (Bankr. D. Del. Case Nos. 12-12882 to
12-12885) on Oct. 17, 2012, with a pre-negotiated restructuring
plan that has the support of both the Company's majority owner and
secured lender. The debtor-affiliates are BYB Properties, Inc.,
Nashville BYB, LLC, and Little Rock Back Yard Burgers, Inc.
Attorneys at Greenberg Traurig serve as bankruptcy counsel. Saul
Ewing LLP is the conflicts counsel. GA Keen Realty Advisors is
the real estate advisor. Rust Consulting/Omni Bankruptcy is
the claims and notice agent. Back Yard Burgers estimated up to
$10 million in assets and at least $10 million in liabilities.
BANKATLANTIC BANCORP: To Invest $60MM For Bluegreen Acquisition
---------------------------------------------------------------
BBX Capital Corporation, formerly known as BankAtlantic Bancorp,
Inc., and BFC Financial Corporation announced that BBX Capital
plans to participate in the funding of BFC's recently announced
acquisition of Bluegreen Corporation.
BFC, through its wholly-owned subsidiary, Woodbridge Holdings,
LLC, currently owns approximately 54% of Bluegreen's outstanding
Common Stock and, as recently announced, has entered into an
agreement with Bluegreen pursuant to which Bluegreen will merge
with a subsidiary of Woodbridge and the shareholders of Bluegreen
(other than BFC and its subsidiaries) will receive $10 per share
in cash. Upon consummation of the transaction, Bluegreen will
become a direct wholly-owned subsidiary of Woodbridge.
BBX Capital's Board of Directors, after receipt of a
recommendation of a special committee of independent directors,
approved plans to provide equity of approximately $60 million in
cash to Woodbridge and to execute a promissory note in
Woodbridge's favor in the principal amount of approximately $11.75
million. In return, BBX will receive an approximate 46% common
equity interest in Woodbridge. The proceeds from BBX Capital's
investment would be utilized to pay a portion of the merger
consideration with the balance of the acquisition funding
anticipated to come from borrowings and the assets of Bluegreen.
In connection with BBX's investment, Woodbridge's Operating
Agreement will be amended to set forth the parties' respective
rights as members of Woodbridge and provide, among other things,
for unanimity on major decisions and for distributions from
Woodbridge to be made to BFC and BBX pro rata based on their
membership interests of 54% and 46%, respectively. The investment
in Woodbridge is subject to the parties' execution of definitive
agreements in a form acceptable to both BFC and BBX Capital.
"We are pleased that BBX Capital has decided to participate in the
acquisition of Bluegreen Corporation," commented Alan B. Levan,
chief executive officer of both BBX Capital and BFC Financial.
"We believe that Bluegreen is a terrific company with a dynamic
management team and we anticipate that over time Bluegreen will
generate significant revenues and earnings. BBX's investment will
provide it with an opportunity to participate in Bluegreen's
results going forward."
About BankAtlantic Bancorp
BankAtlantic Bancorp (NYSE: BBX) --
http://www.BankAtlanticBancorp.com/-- is a bank holding company
and the parent company of BankAtlantic. BankAtlantic --
"Florida's Most Convenient Bank" with a Web presence at
http://www.BankAtlantic.com/-- has nearly $6.0 billion in assets
and more than 100 stores, and is one of the largest financial
institutions headquartered junior in Florida. BankAtlantic has
been serving communities throughout Florida since 1952 and
currently operates more than 250 conveniently located ATMs.
BankAtlantic reported a net loss of $28.74 million in 2011, a net
loss of $143.25 million in 2010, and a net loss of $185.82 million
in 2009.
The Company's balance sheet at Sept. 30, 2012, showed
$488.35 million in total assets, $233.62 million in total
liabilities and $254.72 million in total stockholders' equity.
* * *
As reported by the TCR on March 1, 2011, Fitch has affirmed its
current Issuer Default Ratings for BankAtlantic Bancorp and its
main subsidiary, BankAtlantic FSB at 'CC'/'C' following the
announcement regarding the regulatory order with the Office of
Thrift Supervision.
BankAtlantic has announced that it has entered into a Cease and
Desist Order with the OTS at both the bank and holding company
level. The regulatory order includes increased regulatory capital
requirements, limits to the size of the balance sheet, no new
commercial real estate lending and improvements to its credit risk
and administration areas. Further, the holding company must also
submit a capital plan to maintain and enhance its capital
position.
BAR STEEL: Tiger Group to Auction Trucks, Equipment
---------------------------------------------------
Tiger Group's Remarketing Services division will auction trucks,
trailers, forklifts, fabrication machines, office equipment and
other assets from Bar Steel Service Inc., a 39-year-old steel-
fabrication and installation company that recently filed for
Chapter 7 bankruptcy. The online-only sale is being conducted by
order of the U.S. bankruptcy court. Bidding is now underway at
www.SoldTiger.com and will close in rapid succession, live auction
style, on Dec. 11th , beginning at 10:30 a.m. (ET).
The preview will be from 9 a.m. to 4 p.m. (PT) on Mon., Dec. 10,
at 8139 36th Ave. in Sacramento. Checkout runs from 9 a.m. to 5
p.m. on Dec. 12-13.
Among other lots, the auction will feature two Freightliner truck
tractors, a Freightliner stake-bed truck with a 26-foot bed, a
Ford F650 super-duty flatbed truck, and a Ford F450 super-duty
pickup. Three trailers available at auction range from 20 to 40
feet in length.
Metal-fabrication equipment being sold includes four rebar
benders, a 2007 RMS radius bender, a 2000 KRB #8 mechanical table
bender, along with various other benders and shears, including an
Arnold shear with RMS computer controls and a manual shear line.
Bidders will also have the opportunity to purchase various
material-handling and plant-support equipment, including an
overhead crane and trolley with a ten-ton capacity, two forklifts
and a rotary-screw air-compressor. In addition, office furniture
such as desks, credenzas, drafting tables, chairs, carts and metal
cabinets will hit the auction block. Office equipment being sold
includes computers, monitors, printers, networking devices, an
Avaya telephone system, and a large-format engineering copier.
Tiger Remarketing Services and its affiliates at Tiger Group
provide advisory, restructuring, valuation, disposition and
auction services within a broad range of retail, wholesale, and
industrial sectors. With over 40 years of experience and
substantial financial backing, Tiger offers a uniquely nimble
combination of expertise, innovation and financial resources to
drive results. Tiger's seasoned professionals help clients
identify the underlying value of assets, monitor asset risk
factors and, when needed, convert assets to capital in a variety
of ways quickly and decisively.
BEALL CORP: Dec. 18 Hearing on Use of Cash and Sale of Assets
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Oregon will convene
a hearing Dec. 18, 2012, at 10:30 a.m., to consider Beall
Corporation's request for authority to use cash collateral.
At the hearing, the Court will also consider approval of
procedures that will govern the sale of the Debtor's assets.
As reported by the Troubled Company Reporter on Oct. 18, 2012, the
Debtor is seeking to sell its assets but hasn't identified a
stalking horse to lead the auction.
About Beall Corporation
Portland, Oregon-based Beall Corporation, a manufacturer of
lightweight, efficient, and durable tanker trucks, trailers and
related products, filed a Chapter 11 bankruptcy petition (Bankr.
D. Ore. Case No. 12-37291) on Sept. 24, 2012, estimating at least
$10 million in assets and liabilities. Founded in 1905, Beall has
four factories and nine sale branches across the U.S. The Debtor
has 285 employees, with an average weekly payroll of $300,000.
Judge Elizabeth L. Perris presides over the case. The Debtor has
tapped Tonkon Torp LLP as counsel. The Debtor disclosed
$14,015,232 in assets and $28,791,683 in liabilities as of the
Chapter 11 filing.
Robert D. Miller Jr., the U.S. Trustee for Region 18, appointed
six members to the official committee of unsecured creditors.
Ball Janik LLP represents the Committee.
BELLISIO FOODS: S&P Raises Ratings on $200MM Secured Debt to 'B+'
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its issue-level ratings
on Bellisio Foods Inc.'s $200 million senior secured credit
facilities, which consist of a $30 million revolving credit
facility due 2016 and $170 million term loan due 2017, one notch
to 'B+' from 'B'. "We revised the recovery rating to '2',
indicating our expectations for substantial (70% to 90%) recovery
in the event of a payment default, from '3'. The recovery rating
revision reflects the company's debt prepayment on its term loan
during the first nine months of fiscal 2012, which we believe has
improved the recovery prospects for this credit facility given
the reduced amount of debt outstanding. We estimate at Oct. 7,
2012 the company had about $160 million outstanding on its term
loan and total adjusted debt outstanding of roughly $234 million,
including a $10.5 million earn-out contingent liability," S&P
said.
"The 'B' corporate credit rating on Bellisio Foods remains
unchanged. In addition to the debt prepayment, the company's
operating performance has improved, with EBITDA growth of over
15.5% for the first nine months of fiscal 2012 from the same
prior-year period. We estimate that adjusted leverage was roughly
3.9x for the 12 months ended Dec. 31, 2012 as compared with nearly
4.5x at December 2011, after the transaction," S&P said.
"The rating action for Bellisio's credit facilities follows our
review of our issue-level ratings on Bellisio Foods' senior
secured credit facilities following release of the company's
third-quarter results," said Standard & Poor's credit analyst Bea
Chiem.
"The ratings on Bellisio Foods Inc. reflect our view of the
company's financial risk profile as 'highly leveraged' and its
business risk profile as 'vulnerable.' Bellisio remained highly
leveraged following its 2011 purchase by Centre Partners, although
leverage has begun to decline in 2012 and we expect further
improvement in credit measures. Key credit factors considered in
our vulnerable business risk assessment include our view of
Bellisio's narrow product portfolio, participation in the highly
competitive frozen food category, exposure to volatile commodity
costs, relatively limited operating scale, and limited customer
and geographic diversity," S&P said.
RATINGS LIST
Bellisio Foods Inc.
Corporate credit rating B/Stable
Upgraded; Recovery Ratings Revised
Senior secured To From
$30 million revolving credit
facility due 2016 'B+' 'B'
Recovery rating '2' '3'
$170 million term loan due 2017 'B+' 'B'
Recovery rating '2' '3'
BELLWEST HOLDINGS: Lender Wants Case Transferred to Phoenix
-----------------------------------------------------------
MLCFC 2007-9 Surprise Retail LLC has asked the Court to change the
hearing site of the entire case of Bellwest Holdings LLC from
Tucson to Phoenix.
Due to the extensive connections to the metropolitan Phoenix area,
for the convenience of all parties-in-interest, the Lender said
all judicial proceedings should be conducted in Phoenix.
The Debtor's counsel had previously advised that he did not expect
the Debtor to oppose transferring the case to the Court's Phoenix
calendar, but only after the conclusion of the Meeting of
Creditors.
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.
BERNARD L. MADOFF: Customers Balk at Trustee Position on Interest
-----------------------------------------------------------------
Carla Main, substituting for Bloomberg News bankruptcy columnist
Bill Rochelle, reports that customers of bankrupt Bernard L.
Madoff Securities LLC objected to a motion by trustee Irving
Picard to pay claims without interest, time-value of money or
inflation adjustments.
The report relates that the Securities Investor Protection Act
supports the payment of damages with interest, Helen Davis
Chaitman of Becker & Poliakoff LLP wrote in an objection to the
motion in U.S. Bankruptcy Court in Manhattan.
According to the report, Mr. Picard asked the court for an order
confirming his calculation of net investment or cash-in/cash-out
damages, based on money deposited and money taken out of the
Madoff firm.
"SIPA does not provide for adjustments to customers' net equity
claims for damages arising from a broker's misrepresentations,
breach of contract, or fraud," Mr. Picard wrote in his motion.
Fairness doesn't favor time-adjusted damages because there are
insufficient funds to cover the cost of returning all principal
losses to customers, Mr. Picard added, according to the report.
In August 2011, the U.S. Court of Appeals in New York, in an
opinion written by Judge Dennis Jacobs, ruled in favor of the
trustee and said a customer's claim is equal to the amount of cash
invested less cash taken out.
The trustee's reliance on the Second Circuit decision "is
misplaced," Ms. Chaitman wrote, saying the issue of interest
wasn't before the court at the time and the court held that the
trustee "has discretion" to utilize the net investment method. A
hearing on the motion to deny time-based damages was requested for
Jan. 10.
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.
BERNARD L. MADOFF: Trustee, Feeder Funds Reach $24MM Settlement
---------------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that U.S. Bankruptcy
Judge Burton R. Lifland approved a $24 million settlement Tuesday
between the liquidating trustee for Bernard Madoff's Ponzi scheme
and a number of feeder fund defendants including Beacon Associates
LLC and Andover Associates LLP.
Bankruptcy Law360 relates that Judge Lifland granted Bernard L.
Madoff Investment Securities LLC trustee Irving H. Picard's motion
for approval of the settlement, which represents a return of 100
percent of the defendants' withdrawals from BLMIS during the six-
year period before its bankruptcy filing.
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.
BON-TON STORES: Board Declares Cash Dividend on Class A Shares
--------------------------------------------------------------
The Board of Directors of The Bon-Ton Stores, Inc., declared a
cash dividend of five cents per share on the Class A Common Stock
and Common Stock of the Company payable Dec. 21, 2012, to
shareholders of record as of Dec. 14, 2012. The Company is
accelerating its dividend payment in advance of likely increases
in taxes in 2013; payment would typically have occurred in the
first quarter of fiscal 2013.
About Bon-Ton Stores
The Bon-Ton Stores, Inc., with corporate headquarters in York,
Pennsylvania and Milwaukee, Wisconsin, operates 276 department
stores, which includes 11 furniture galleries, in 23 states in the
Northeast, Midwest and upper Great Plains under the Bon-Ton,
Bergner's, Boston Store, Carson Pirie Scott, Elder-Beerman,
Herberger's and Younkers nameplates and, in the Detroit, Michigan
area, under the Parisian nameplate.
The Company reported a net loss of $85.81 million on $1.23 billion
of net sales for the 26 weeks ended July 28, 2012, compared with a
net loss of $68.28 million on $1.24 billion of net sales for the
26 weeks ended July 30, 2011.
The Company's balance sheet at Oct. 27, 2012, showed $1.84 billion
in total assets, $1.80 billion in total liabilities and $40.32
million in total shareholders' equity.
* * *
As reported by the TCR on July 13, 2012, Moody's Investors Service
revised The Bon-Ton Stores, Inc.'s Probability of Default Rating
to Caa1/LD from Caa3. The Caa1/LD rating reflects the company's
exchange of $330 million of new senior secured notes due 2017 for
$330 million of its unsecured notes due 2014. Moody's also
affirmed the company's Corporate Family Rating at Caa1 and
affirmed the Caa3 rating assigned to the company's senior
unsecured notes due 2014.
Moody's said the affirmation of the company's 'Caa1' corporate
family rating reflects the company's persistent negative trends in
sales and operating margins and uncertainties that the company's
strategies to reverse these trends will be effective.
BROOKFIELD RESIDENTIAL: Moody's Assigns B1 CFR; Outlook Stable
--------------------------------------------------------------
Moody's Investors Service assigned B1 corporate family and
probability of default ratings to Brookfield Residential
Properties, Inc., a B2 rating to its proposed new $400 million
senior unsecured notes due 2020, and an SGL-2 speculative grade
liquidity assessment. The outlook is stable. This is the first
time Moody's has assigned public ratings to this issuer.
The proceeds from the $400 million senior note offering will be
used to retire portions of the company's existing debt, including
notes payable to an affiliated entity, Brookfield Office
Properties Inc., borrowings outstanding under the company's
various revolving credit facilities, and project specific
financings, with the remainder being designated for general
corporate purposes, including working capital.
The company recently issued $227 million of common shares,
proceeds of which were used to retire approximately $60 million of
senior notes due to Brookfield Office Properties Inc. as well as
to retire a portion of borrowings under the company's $300 million
unsecured revolving credit facility.
The following rating actions were taken:
Corporate family rating, assigned a B1;
Probability of default rating, assigned a B1;
$400 million senior unsecured notes due 2020, assigned a B2,
LGD5-75%;
Speculative grade liquidity assessment, assigned an SGL-2;
Stable outlook.
Ratings Rationale
The B1 corporate family rating reflects Brookfield's relatively
short operating track record in its current configuration; complex
capital structure; moderate size and concentration; the generally
increased risk of a business model that incorporates substantial
land development vs. a pure homebuilding model, although
Brookfield has a very good track record in its land development
activities; relatively thin cash position; the still recovering US
homebuilding market, and the risk of potential overbuild in the
Greater Toronto Area.
At the same time, the rating incorporates the company's solid
positions in many of the markets it serves; healthy gross margins
and profitability, augmented by its expertise in land development;
and moderate homebuilding debt to capitalization, recently
enhanced by a $227 million equity raise. The rating is also
supported by the small amount of recourse joint venture debt, and
by substantial land holdings (16.5 years of total land supply, and
15.5 years of owned land supply), which reduces its need to
constantly invest in new lot inventory. While the company's
extensive land holdings map to a low rating on Moody's
homebuilding methodology grid, it employs a qualitative override
based on Moody's judgment that the land is fairly valued and that
the Canadian housing market enjoys certain features and support
mechanisms that are currently lacking in the US housing market.
Moody's views Brookfield as being strongly positioned in its
rating category.
The stable outlook reflects Moody's expectations for continued
improvement in the company's operating performance, including
relatively healthy gross margins, combined with the maintenance of
homebuilding debt to capitalization ratio below 55%.
Brookfield has a good liquidity profile, reflected in Moody's SGL-
2 speculative grade liquidity assessment. The SGL-2 is supported
by the company's pro forma availability of $540 million under
secured and unsecured revolving credit facilities totaling $864
million; comfortable room under financial covenants; and
substantial land supply that can be sold to raise funds. The
liquidity is, however, constrained by annual maturities of
portions of its credit facilities through 2017, a limited pro
forma cash balance of $13 million, and negative cash flow
generation in 2012.
The proposed new notes, which are unsecured and rated B2, are
notched down from the corporate family rating because of the
significant amount of secured debt in the capital structure.
The principal methodology used in rating Brookfield was the Global
Homebuilding Industry Methodology published in March 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.
Brookfield Residential Properties is a land developer and a
homebuilder, established in March 2011 through the merger between
Brookfield Homes Corporation and BPO Residential (the residential
land and housing division of Brookfield Office Properties). 80% of
the company's revenues are generated in Canada and 20% in the U.S.
In the trailing 12-month period ending September 30, 2012,
Brookfield generated approximately $990 million in revenue and $63
million in net income.
BROOKFIELD RESIDENTIAL: S&P Assigns 'B+' Corporate Credit Rating
----------------------------------------------------------------
Standard and Poor's Ratings Services assigned its 'B+' corporate
credit rating to Brookfield Residential Properties Inc. (BRP). The
outlook is stable. "At the same time, we assigned a 'BB-' issue-
level rating and a '2' recovery rating to the proposed offering of
$400 million of senior unsecured notes due 2020, guaranteed by all
the current and future restricted subsidiaries of the issuer other
than U.S. project subsidiaries. The '2' recovery rating indicates
prospects for a substantial recovery (70% to 90%) of principal in
the event of payment default. The company plans to use proceeds
from the notes to repay existing notes payable provided by
Brookfield Office Properties Inc. ('BBB/Negative'), borrowings
under an unsecured revolving facility provided by Brookfield Asset
Management Inc. (A-/Negative/A-2), and other project and bank
debt," S&P said.
"The ratings on BRP reflects our assessment of an 'aggressive'
financial risk profile, reflecting weak EBITDA-based metrics
(although book leverage is moderate), reliance on secured project
level debt and potential near term refinancing risk due to on-
demand secured credit facilities," said credit analyst George
Skoufis. "We view the business risk profile as 'weak'.
Brookfield's operations rely on the cyclical and capital intensive
land development and homebuilding businesses. While we believe the
nascent housing recovery in the U.S. will continue in 2013, we do
acknowledge there are headwinds, and a significant proportion of
BRP's future growth is reliant on growth derived from its U.S.
operations, which is dependent on a continued recovery in the U.S.
housing market and third party demand for lots."
"The outlook is stable. We expect continued stability in BRP's
Canadian markets and the steady recovery in the U.S. housing
markets to support revenue and EBITDA growth leading to steadily
improving credit metrics and continued adequate liquidity. The
land development business, while cyclical, should support BRP's
growth as many homebuilders continue to invest in new land to
support future growth. We would consider raising the rating if
housing demand recovers more quickly in the U.S. and remains
stable in Canada, resulting in improved cash flow such that
debt/EBITDA improves to the 3x-4x range. Alternatively, we could
lower the ratings if the recovery in the U.S. falters or the
Canadian housing market softens such that debt/EBITDA doesn't
improve over the next two years and/or liquidity becomes
constrained," S&P said.
CAPITOL BANCORP: Committee Objects to Exclusivity Extension Bid
---------------------------------------------------------------
BankruptcyData.com reports that Capitol Bancorp's official
committee of unsecured creditors filed with the U.S. Bankruptcy
Court an objection to the Debtors' motion to extend the exclusive
period during which the Company can file a Chapter 11 plan and
solicit acceptances thereof through and including March 7, 2013
and May 6, 2013, respectively.
The committee asserts, "However, the lengthy 90-day extension of
the exclusive period requested by the Debtors in the Exclusivity
Motion is not in the best interests of creditors. Accordingly, the
Committee requests that the exclusive periods be extended by only
60 days, and that such extension of the exclusive periods be
conditioned upon the Debtors providing the Committee with access
to communicate directly with the proposed equity investors."
About Capitol Bancorp
Capitol Bancorp Ltd. and Financial Commerce Corporation filed
voluntary Chapter 11 bankruptcy petitions (Bankr. E.D. Mich. Case
Nos. 12-58409 and 12-58406) on Aug. 9, 2012.
Capitol Bancorp -- http://www.capitolbancorp.com/-- is a
community banking company with a network of individual banks and
bank operations in 10 states and total consolidated assets of
roughly $2.0 billion as of June 30, 2012. CBC owns roughly 97% of
FCC, with a number of CBC affiliates owning the remainder. FCC,
in turn, is the holding company for five of the banks in CBC's
network. CBC is registered as a bank holding company under the
Bank Holding Company Act of 1956, as amended, 12 U.S.C. Sec. 1841,
et seq., and trades on the OTCQB under the symbol "CBCR."
Lawyers at Honigman Miller Schwartz and Cohn LLP represent the
Debtors as counsel.
In its petition, Capitol Bancorp scheduled $112,634,112 in total
assets and $195,644,527 in total liabilities. The petitions were
signed by Cristin K. Reid, corporate president.
CASCADE AG: Court Approves J. Brian Scott as Appraiser
------------------------------------------------------
Cascade AG Services, Inc. sought and obtained approval from the
U.S. Bankruptcy Court to employ J. Brian Scott to perform an
appraisal of the estate's equipment, which consists mostly of
harvesting and food processing equipment.
Mr. Scott attests he is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The Debtor has agreed to pay Mr. Scott $3,000 for his services.
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.
CDKP DEVELOPMENT: Court Rejects Private Sale of 5 Lots
------------------------------------------------------
Bankruptcy Judge Randy D. Doub rejected CDKP Development, Inc.'s
emergency motion to sell five lots located in Breighmere
Subdivision to Caviness & Cates Building and Development Company
for the purchase price of $157,500 less $53,571 that was
previously paid to the Debtor and used to develop the Debtor's
real property.
The Debtor indicates the net proceeds will total roughly $100,000
and requests that all of the proceeds of the sale of the Property
be held in trust by the Debtor's counsel pending resolution of a
state court lawsuit.
The Debtor's property is subject to a promissory note in favor of
James W. Lee and Marian R. Lee in the principal amount of $300,000
secured by a deed of trust recorded on Aug. 1, 2005. The Debtor
and the Lees entered into a Modification Agreement on Nov. 28,
2011, whereby the parties agreed that Lots 18-26 would be released
at a price of $3,000 per lot. This Modification Agreement was
subsequently recorded. There is due and owing to the Lees on the
promissory note for the Property the sum of at least $15,000.
The Property is also subject to a promissory note in favor of Bank
of North Carolina in the principal amount of $500,000 secured by a
deed of trust recorded on Aug. 3, 2005, describing the Property,
among other real property. The Debtor represented that in the
past, BNC released liens on the real property so long as its loan
was kept current. The Debtor notes that BNC receives monthly
adequate protection payments in the amount of $16,500 for this
loan and its other loans on the Debtor's property. There is
however, no formal release fee agreement between the Debtor and
BNC. BNC filed Proof of Claim No. 4-3 in the amount of
$231,390.57.
Pursuant to the Schedules, there is not enough equity in the
Property to pay all of the liens in full.
According to Judge Doub, the Debtor has failed to show how
satisfaction of the liens could be compelled in a legal or
equitable proceeding. The Debtor intends to hold the proceeds of
the sale in trust, which would prevent the creditors from
receiving proceeds of the sale until some unknown date in the
future. Further, BNC and the Debtor have not entered into a
release fee agreement and would not be subject to a specific
performance action to release its lien. As to the Lees' release
fee agreement, the agreement requires payment of the proceeds
prior to the release of the lien.
A copy of the Court's Nov. 30, 2012 Order is available at
http://is.gd/5NwNqFfrom Leagle.com.
CDKP Development, Inc., based in Arapahoe, North Carolina, filed
for Chapter 11 bankruptcy (Bankr. E.D.N.C. Case No. 12-06871) on
Sept. 26, 2012. Judge Randy D. Doub oversees the case. George M.
Oliver, Esq., at Oliver Friesen Cheek, PLLC, serves as counsel to
the Debtor. In its petition, the Debtor estimated $1 million to
$10 million in both assets and debts. The petition was signed by
Philip Hedrick, president.
Christopher B. and Tandra L. Garner, who are affiliated with CDKP,
sought Chapter 11 bankruptcy protection (Case No. 12-00399) on
Jan. 17, 2012.
CEREPLAST INC: Gets Add'l $400,000 Funding from Compass Horizon
---------------------------------------------------------------
Cereplast, Inc., and Compass Horizon Funding Company, LLC, entered
into a Second Amendment to the Venture Loan and Security Agreement
entered into by both parties on Dec. 21, 2010. Pursuant to the
Amendment, Horizon agreed to extend additional loans to the
Company in the form of Loan C in the amount of $150,000 and Loan D
in the amount of $250,000. The Amendment provides for a maturity
date of April 4, 2013, and an annual rate of interest of 15% for
Loans C and D.
The Amendment also amends other portions of the Loan Agreement to
include Loans C and D and sets forth the terms governing
repayment, interest rate and use of proceeds and conditions to
funding those loans.
About Cereplast
El Segundo, Calif.-based Cereplast, Inc., has developed and is
commercializing proprietary bio-based resins through two
complementary product families: Cereplast Compostables(R) resins
which are compostable, renewable, ecologically sound substitutes
for petroleum-based plastics, and Cereplast Sustainables(TM)
resins (including the Cereplast Hybrid Resins product line), which
replaces up to 90% of the petroleum-based content of traditional
plastics with materials from renewable resources.
The Company's balance sheet at June 30, 2012, showed $31.2 million
in total assets, $21.1 million in total liabilities, and
stockholders' equity of $10.1 million.
Bankruptcy Warning
"We have incurred a net loss of $6.3 million for the six months
ended June 30, 2012, and $14.0 million for the year ended Dec. 31,
2011, and have an accumulated deficit of $63.2 million as of
June 30, 2012. Based on our operating plan, our existing working
capital will not be sufficient to meet the cash requirements to
fund our planned operating expenses, capital expenditures and
working capital requirements through Dec. 31, 2012, without
additional sources of cash.
"Our plan to address the shortfall of working capital is to
generate additional financing through a combination of sale of our
equity securities, additional funding from our new short-term
convertible debt financings, incremental product sales into new
markets with advance payment terms and collection of outstanding
past due receivables. We are confident that we will be able to
deliver on our plans, however, there are no assurances that we
will be able to obtain any sources of financing on acceptable
terms, or at all.
"If we cannot obtain sufficient additional financing in the short-
term, we may be forced to curtail or cease operations or file for
bankruptcy," the Company said in its quarterly report for the
period ended June 30, 2012.
CHARLES SCHWAB: Fitch Currently Rates Preference Stock 'BB+'
------------------------------------------------------------
Fitch Ratings rates Charles Schwab Corporation's (SCHW) $350
million of senior unsecured notes 'A'.
SCHW recently announced its intention to redeem its $494m of
senior notes maturing in 2014. Fitch believes this redemption and
the new $350 million issuance is an attempt to improve funding
costs in the attractive capital markets environment. The new
notes have a 0.85% coupon per annum, 52 basis points over the
three-year U.S. Treasury, and will mature on Dec. 4, 2015.
Rating Drivers and Sensitivities
SCHW's Stable Rating Outlook reflects the expectation for
reasonably stable earnings, stable leverage metrics, and continued
growth from Schwab Bank (SB) as well as the company's asset
management businesses. Fitch notes that SCHW's earnings have
improved amid a challenging interest rate environment and volatile
equity markets.
Fitch notes that SCHW's overall business model is very scalable,
and could show meaningful earnings growth with improved financial
market and interest rate environments. However, from a credit
perspective this elevated sensitivity to stock market trends and
interest rates constrains longer-term upwards ratings potential.
Ratings could come under pressure if SCHW were to lose significant
clients from poor investment performance or operational errors, or
if overall credit metrics--including those at SB--were to begin to
meaningfully deteriorate. Additionally, should the loan portfolio
mix at the bank become less conservative, ratings could be
impacted.
SCHW and its subsidiaries provide securities brokerage and related
financial services to individuals and institutional clients. The
two primary operating entities include Charles Schwab & Co., Inc.,
a securities broker-dealer and Charles Schwab Bank, which offers
mortgage loan and deposit services to clients.
Fitch assigns the following rating:
Charles Schwab Corporation
-- Senior unsecured debt 'A'.
Fitch currently rates Schwab as follows:
The Charles Schwab Corporation
-- Long-term Issuer Default Rating (IDR) 'A';
-- Short-term IDR 'F1';
-- Senior unsecured notes 'A';
-- Short-term debt at 'F1';
-- Preferred stock at 'BB+'
-- Support '5'; and
-- Support Floor 'NF'.
The Rating Outlook is Stable.
CINEMARK USA: Moody's Rates New $400MM Sr. Unsecured Notes 'B2'
---------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to the proposed
$400 million senior unsecued notes of Cinemark USA, Inc. and a Ba1
rating to its proposed senior secured first lien credit facility.
Moody's also affirmed Cinemark's B1 corporate family and
probability of default ratings and SGL-1 speculative grade
liquidity rating.
The company plans to use proceeds primarily to refinance existing
debt and fund the acquisition of 32 theaters from Rave Real
Property Holdco, LLC (Rave) for $240 million. Moody's estimates a
net increase in total debt of approximately $275 million
(including on balance sheet capital lease obligations acquired)
and an increase in interest expense of about $15 to $20 million,
which Cinemark's credit profile and rating can comfortably
accommodate, with support from EBITDA contributed by the
acquisition. The proposed credit facility consists of a $700
million senior secured term loan and a $100 million senior secured
revolver, expected to be undrawn at close.
A summary of the action follows.
Cinemark USA, Inc.
$100M Senior Secured Revolver, Assigned Ba1, LGD2, 16%
$700M Senior Secured Term Loan, Assigned Ba1, LGD2, 16%
$400M Senior Unsecured Bonds, Assigned B2, LGD4, 67%
8.625% Senior Unsecured Bonds ($470 million), Affirmed B2,
LGD adjusted to LGD4, 67% from LGD5, 75%
7.375% Senior Subordinated Bonds ($200 million), Affirmed B3,
LGD adjusted to LGD6, 94% from LGD6, 93%
Outlook, Stable
Ratings Rationale
The proposed transaction increases leverage to about 5.2 times
debt-to-EBITDA (per Moody's standard adjustments, including the
capitalization of operating leases) from 4.8 times as of September
30, well below the 6 times leverage trigger Moody's stated for a
potential downgrade of the corporate family rating. Also, given
that the theaters to be acquired are all digital, capital
expenditures should not increase meaningfully from the
acquisition. Furthermore, with its greater scale, Cinemark can
likely achieve modest cost and revenue synergies, such as
purchasing concessions and selling on-screen advertising.
Cinemark's B1 corporate family rating incorporates its high
leverage (approximately 5.2 times debt-to-EBITDA pro forma for the
acquisition), which poses challenge for operating in an inherently
volatile industry reliant on movie studios for product to drive
the attendance that leads to cash flow from admissions and
concessions. Very good liquidity, including a sizeable cash
balance ($540 million as of September 30, with the transaction
likely to use up about $60 million of cash), enables the company
to better manage attendance related volatility and indicates the
ability to improve the credit profile, though the company has to
date demonstrated limited desire to do so. Cinemark also benefits
from scale and geographic diversity, as well as good growth
prospects for its international business.
Moody's considers North American theatrical exhibition a mature
industry with low-to-negative growth potential, high fixed costs
and increasing competition from alternative media and anticipates
attendance growth will lag behind population growth for the
foreseeable future, with year to year volatility driven by the
popularity of the product. However, the industry remains viable
and stable throughout economic cycles. Cinemark differentiates
itself from rated peers with its industry leading margins and the
better growth prospects in its international operations
The stable outlook incorporates expectations that Cinemark will
continue to generate positive free cash flow and sustain leverage
below 6 times debt-to-EBITDA.
The maturity of the industry and lack of commitment to a stronger
credit profile constrain the rating. An upgrade could result from
evidence of commitment to improving the credit profile such that
Moody's anticipates sustained free cash to debt in excess of 5%
and sustained leverage in the mid 4 times debt-to-EBITDA range.
Sustained negative free cash flow or leverage above 6 times debt-
to-EBITDA, whether due to worsening fundamentals, debt funded
acquisitions, or shareholder returns could pressure the rating
downward. Deterioration of the liquidity profile could also have
negative ratings implications.
Cinemark's ratings were assigned by evaluating factors that
Moody's considers relevant to the credit profile of the issuer,
such as the company's (i) business risk and competitive position
compared with others within the industry; (ii) capital structure
and financial risk; (iii) projected performance over the near to
intermediate term; and (iv) management's track record and
tolerance for risk. Moody's compared these attributes against
other issuers both within and outside Cinemark's core industry and
believes Cinemark's ratings are comparable to those of other
issuers with similar credit risk. Other methodologies used include
Loss Given Default for Speculative-Grade Non-Financial Companies
in the U.S., Canada and EMEA published in June 2009.
Headquartered in Plano, Texas, Cinemark Holdings, Inc., which owns
Cinemark USA, Inc. (Cinemark), operates 461 theatres with 5,207
screens in 39 U.S. states, Brazil, Mexico, Argentina and 10 other
Latin American countries. Its annual revenue is approximately $2.4
billion.
Rave Real Property Holdco, LLC is an affiliate of Rave Cinemas, a
leading domestic motion picture exhibitor, operating 46 theaters
with 687 screens in 18 states, including 11 IMAX theaters and 10
Rave Xtreme large format auditoriums.
CINEMARK USA: S&P Assigns 'BB+' Rating to New $800MM Debt
---------------------------------------------------------
Standard & Poor's Ratings Services assigned Cinemark USA Inc.'s
proposed $700 million term loan due 2019 and $100 million
revolving credit facility due 2017 a 'BB+' issue-level rating (two
notches higher than the 'BB-' corporate credit rating on holding
company Cinemark Holdings Inc.), with a recovery rating of '1',
indicating our expectation for very high (90% to 100%) recovery
for senior secured lenders in the event of payment default.
"We assigned the company's proposed senior notes due 2022 a 'BB-'
issue-level rating (the same as the corporate credit rating), with
a recovery rating of '4', indicating our expectation for average
(30% to 50%) recovery for senior note lenders in the event of
payment default," S&P said.
"At the same time, we are revising the recovery rating on the
company's senior notes due 2019 to '4' from '5', and consequently
raising our issue-level rating on this debt to 'BB-' from 'B+',"
S&P said.
"All other ratings, including the 'BB-' corporate credit rating on
Cinemark, were affirmed. The outlook is stable. Standard & Poor's
analyzes Cinemark Holdings Inc. and subsidiary Cinemark USA Inc.
on a consolidated basis," S&P said.
"The corporate credit rating on Plano, Texas-based Cinemark
Holdings Inc. reflects Standard & Poor's Ratings Services'
expectation that leverage and capital spending will remain
relatively high, but that Cinemark will continue to be among the
most profitable theater chains, despite potential for some
slowing of its long-term growth. We consider the company's
business risk profile to be 'fair' (based on our criteria) because
of its consistent operating performance, despite the inherent
unpredictably of the movie business. Relatively high leverage and
aggressive capital spending plans underpin our view that
Cinemark's financial risk profile is 'aggressive,'" S&P said.
"Although we expect Cinemark to continue outperforming its U.S.
peers and maintain industry-leading EBITDA margins, it operates in
the movie exhibition industry, which we consider both mature and
driven by the success of hit films. We score management and
governance as 'satisfactory' under our criteria, reflecting our
view that, relative to peers, management has demonstrated a
successful track record in expanding and managing its theater
circuit," S&P said.
CIRCUIT CITY STORES: Trust, Toshiba Settle $92MM in Claims
----------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that the trustee
liquidating Circuit City Stores Inc. asked a Virginia bankruptcy
judge Tuesday to approve a settlement with Toshiba America
Information Systems Inc. and an affiliate to settle some
$91.9 million in total claims and avoid the risk of litigation.
Alfred H. Siegel, who's running the Circuit City Stores Inc.
Liquidating Trust, asked U.S. Bankruptcy Judge Kevin R. Huennekens
to sign off on the settlement, which also includes Toshiba
American Consumer Products LLC, Bankruptcy Law360 relates.
About Circuit City
Headquartered in Richmond, Virginia, Circuit City Stores Inc.
(NYSE: CC) -- http://www.circuitcity.com/-- was a specialty
retailer of consumer electronics, home office products,
entertainment software and related services in the U.S. and
Canada.
Circuit City Stores together with 17 affiliates filed a voluntary
petition for relief under Chapter 11 of the Bankruptcy Code
(Bankr. E.D. Va. Lead Case No. 08-35653) on Nov. 10, 2008.
InterTAN Canada, Ltd., which runs Circuit City's Canadian
operations, also sought protection under the Companies' Creditors
Arrangement Act in Canada.
Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, served as the Debtors' general
restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley,
Esq., at McGuireWoods LLP, acted as the Debtors' local counsel.
The Debtors also tapped Kirkland & Ellis LLP as special financing
counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special
securities counsel; and FTI Consulting, Inc., and Rotschild Inc.
as financial advisors. The Debtors' Canadian general
restructuring counsel was Osler, Hoskin & Harcourt LLP. Kurtzman
Carson Consultants LLC served as the Debtors' claims and voting
agent. The Debtors disclosed total assets of $3,400,080,000 and
debts of $2,323,328,000 as of Aug. 31, 2008.
Circuit City opted to liquidate its 721 stores and obtained the
Bankruptcy Court's approval to pursue going-out-of-business sales,
and sell its store leases in January 2009.
In May 2009, Systemax Inc., a multi-channel retailer of computers,
electronics, and industrial products, acquired certain assets,
including the name Circuit City, from the Debtors through a Court-
approved auction.
On Sept. 14, 2010, the Court entered an order confirming the
Debtors' Plan of Liquidation, which created the Circuit City
Stores, Inc. Liquidating Trust and appointed Alfred H. Siegel as
Trustee. The Plan became effective Nov. 1, 2010.
CLEAVER-BROOKS INC: S&P Gives 'B' Rating on $285MM Secured Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services is assigning its 'B' rating to
industrial manufacturer Cleaver-Brooks Inc.'s (B/Stable/--) $285
million senior secured notes due in seven years that the company
is issuing as part of current private equity sponsor Wellspring
Capital's plan to sell Cleaver-Brooks to Harbour Group. "We have
assigned a recovery rating of '4' to the notes, indicating average
(30%-50%) recovery in the event of a default. We are also
assigning our 'BB-' rating to the company's $50 million asset-
based loan (ABL) revolving credit facility due in five years, with
a recovery rating of '1', indicating very high (90-100%) recovery
in the event of a default. Details regarding the proposed capital
structure and new owners result in pro forma credit metrics in
line with current expectations for the 'B' rating. The 'B'
corporate credit rating and stable outlook remain unchanged," S&P
said.
The ratings on Thomasville, Ga.-based Cleaver-Brooks reflect its
"weak" business risk profile and "highly leveraged" financial risk
profile. The company operates in a highly fragmented and
competitive industry, and Standard & Poor's believes that this
competition will remain a business risk. "Still, we expect
Cleaver-Brooks' profitability to remain good in fiscal 2013, and
free operating cash flow should remain positive. This will allow
the company some flexibility to maintain credit measures within
our expectations for the rating, which include total debt to
EBITDA of 5x-6x. The company's ownership by private equity remains
a credit risk, in our view, because of private equity's influence
on the company's overall financial policy," S&P said.
"For the 'B' rating, we currently assume leverage will remain
about 5x to 6x (including our adjustments to add to debt the net
present value of operating leases and underfunded postretirement
obligations). The stable rating outlook reflects our belief that
Cleaver-Brooks will generate positive free operating cash flow in
the current fiscal year with improved year-over-year EBITDA
margins, given the somewhat favorable trend for large industrial
and commercial boiler replacement in core North American markets,"
S&P said.
RATINGS LIST
Cleaver-Brooks Inc.
Corporate Credit Rating B/Stable/--
New Ratings
Cleaver-Brooks Inc.
Senior Secured
$50 mil ABL due in 5 yrs BB-
Recovery Rating 1
$285 mil sr. secd. nts due in 7 yrs B
Recovery Rating 4
CLUB AT SHENANDOAH: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: The Club At Shenandoah Springs Village, Inc., a California
corporation
32700 Desert Moon Drive
Thousand Palms, CA 92276
Bankruptcy Case No.: 12-36723
Chapter 11 Petition Date: December 3, 2012
Court: U.S. Bankruptcy Court
Central District of California (Riverside)
Judge: Mark D. Houle
Debtor's Counsel: Daniel A. Lev, Esq.
SULMEYERKUPETZ
333 S. Hope Street, 35th Floor
Los Angeles, CA 90071
Tel: (213) 626-2311
Fax: (213) 629-4520
E-mail: dlev@sulmeyerlaw.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Liabilities: $10,000,001 to $50,000,000
The petition was signed by Ronald Safren, president.
Debtor's List of Its 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Turner, Reynolds, Greco & O'Hara Attorneys' Fees $231,723
16485 Laguna Canyon Road
Huntington Beach, CA 92648
Western Golf Properties, LLC Management Fees $151,606
One Spectrum Drive, Suite 310
Lake Forest, CA 92630
High Tech Irrigation, Inc. Trade Debt $46,683
80-975 Indio Boulevard, Building A
Indio, CA 92201
Billingsley Trade Debt $21,171
Law Office of Dale S. Gribow Attorneys' Fees $16,525
Western Golf Procurement, LLC Management Fees $10,821
Employment Development Dept. Taxes $9,842
NG Valley Tree Service Trade Debt $5,175
Foster Gardner, Inc. Trade Debt $2,937
Progressive National Collections Trade Debt $2,768
Sports Turf Irrigation Trade Debt $2,339
Bermuda Sands Commercial Services Trade Debt $2,268
Pukka, Inc. Trade Debt $1,806
Staples Advantage Trade Debt $1,804
TaylorMade Trade Debt $1,232
State Board of Equalization Taxes $730
Titleist Trade Debt $535
Prudential Overall Supply Trade Debt $485
Turf Star, Inc. Trade Debt $434
Modular Space Corporation Trade Debt $401
CLUB AT SHENANDOAH: Files for Chapter 11 in California
------------------------------------------------------
The Club At Shenandoah Springs Village, Inc., filed a Chapter 11
petition (Bankr. C.D. Calif. Case No. 12-36723) in Riverside,
California.
The Debtor owns The Club At Shenandoah Springs Village, a golf and
leisure resort in Thousand Palms, a desert region of central
California.
The two largest unsecured creditors of the Thousand Palms,
California-based debtor are Turner, Reynolds, Creco & O'Hara, A
Law Corporation, owed $231,723 for legal fees, and Western Golf
Properties, owed $151,606 for management fees, according to
court papers.
According to the docket, the schedules of assets and liabilities
and the statement of financial affairs are due Dec. 17, 2012. The
Debtor estimated assets and debts of $10 million to $50 million in
the petition.
SulmeyerKupetz has been tapped as general counsel.
COMPREHENSIVE CARE: Elects Jairo Estrada to Board of Directors
--------------------------------------------------------------
Comprehensive Care Corporation appointed international businessman
Jairo A. Estrada to its Board of Directors effective Nov. 28,
2012. Mr. Estrada has served as a consultant to the Company for
the marketing of its innovative pharmacy cost-containment program
since August 2012.
Mr. Estrada has had an impressive business career, owning and
operating several successful companies, most notably Garden Way,
Inc., a marketer of branded consumer and commercial outdoor power
equipment. Garden Way was one of the first U.S. companies to
penetrate the Chinese market through its partnership with the
government of China to manufacture sickle bar mowers to be sold in
the world's most populous nation. In addition, he is currently
the Chairman of NSC Puerto Rico, Inc., a manufacturing company
servicing the pharmaceutical industry on the island of Puerto
Rico.
"Mr. Estrada's decision to join our Board of Directors is
reflective of the progress the Company has made in the last two
years as well as the Company's prospect for future growth. Mr.
Estrada has a proven track record of generating corporate growth
and assisting businesses in prospering, not only in the U.S. but
abroad. I believe that the Company will benefit greatly from Mr.
Estrada's input both as an entrepreneur and a Board member," said
Mr. Clark A. Marcus, CompCare Chairman and CEO.
Mr. Estrada has served on the board of directors of numerous
companies in the past, including Chase Manhattan Bank, Global
Crossing, Garden Way Inc., Stair Master Inc., Russell Sage
Colleges, and the Emma Willard School. He has also been a guest
speaker at several distinguished organizations, including The
Aspen Institute. Mr. Estrada earned a Bachelor's Degree in
Economics and in Business Administration and a Master's Degree in
Organizational Behavioral Sciences from SUNY at Buffalo, New York.
"Clark Marcus and his team have designed and are now positioned to
introduce to the healthcare marketplace a revolutionary new
concept -- a fully-supported guarantee of savings to their clients
by way of a substantial reduction in their annual pharmaceutical
spend. I have been following the Company's progress and the
development of their pharmacy program, and I believe that this new
concept will have a positive impact on both the healthcare
industry and the Company's growth. I am eager to be a part of
this growth and honored to have been asked to join the Company's
Board of Directors," said Mr. Estrada.
About Comprehensive Care
Tampa, Fla.-based Comprehensive Care Corporation provides managed
care services in the behavioral health, substance abuse, and
psychotropic pharmacy management fields.
Following the 2011 results, 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 suffered recurring losses from
operations and has not generated sufficient cash flows from
operations to fund its working capital requirements.
Comprehensive Care reported a net loss of $14.08 million in 2011,
compared with a net loss of $10.47 million in 2010.
The Company's balance sheet at Sept. 30, 2012, showed $15.97
million in total assets, $29.35 million in total liabilities and a
$13.37 million deficit.
COPYTELE INC: Stockholders Elect 4 Directors at Annual Meeting
--------------------------------------------------------------
The Annual Meeting of Stockholders of CopyTele, Inc., which was
originally scheduled for Oct. 31, 2012, but postponed to Nov. 9,
2012, and then subsequently adjourned prior to the conduct of any
formal business was held on Friday, Nov. 30, 2012, at the Fox
Hollow, Woodbury, New York. Stockholders of record at the close
of business on Sept. 10, 2012, were entitled to one vote for each
share of common stock held. On Sept. 10, 2012, there were
184,854,037 shares of common stock issued and outstanding.
At the Annual Meeting, the stockholders of the Company voted to:
(1) elect four directors nominated by the Board of Directors to
serve until the next annual meeting of stockholders,
namely: Lewis H. Titterton, Jr., Henry P. Herms, Bruce F.
Johnson and Kent B. Williams;
(2) ratify the appointment of KPMG LLP, an independent
registered public accounting firm, as the Company's
independent auditors for fiscal year 2012; and
(3) approve the amendment to the certificate of incorporation
to increase the authorized number of shares of common stock
from 240,000,000 shares to 300,000,000 shares.
Board Grants 1-Mil. Stock Options
The Board of Directors of CopyTele granted a stock option to
purchase 1,000,000 shares of Company common stock to Kent B.
Williams, in additional compensation for his service in recruiting
the Company's new management team. The stock option has an
exercise price of $0.211 per share (the average of the high and
low sales price on Nov. 30, 2012), vest in three equal annual
installments of 333,333 commencing on Nov. 30, 2012, and an
expiration date of Nov. 30, 2022. The option otherwise has the
same terms and conditions as options granted under the Company's
2010 Share Incentive Plan.
The stock option and the shares of common stock issuable upon
exercise of the stock option were not issued under an option plan
and will not be registered under the Securities Act of 1933, as
amended, in reliance on an exemption from registration under
Section 492 of the Act, and Rule 506 promulgated thereunder, based
on the fact that Mr. Williams is an "accredited investor", as such
term is defined in Rule 501 of Regulation D.
Number of Directors Hiked Six
The Board increased the number of directors constituting the
entire Board to six directors pursuant to the Company's Bylaws and
elected to the Board Robert A. Berman, President and Chief
Executive Officer of the Company, and Dr. Amit Kumar, a consultant
to the Company, effective immediately, to serve until the 2013
Annual Meeting of Stockholders.
Dr. Kumar has been an investor, founder, director and CEO of
several technology enterprises, both public and private. As CEO,
he took CombiMatrix Corporation public and ran it for a decade
while listed on the NASDAQ Global Market. He has worked in
venture capital with OAK investment Partners, and has been an
advisor to investment funds, venture capital firms, and Fortune
500 companies. Dr. Kumar was on the board of directors of Acacia
Research Corporation, a publicly traded patent monetization
company, from 2002 to 2008. Dr. Kumar is currently CEO of Geo
Fossil Fuels, an energy company, and he sits on the boards of
directors of other public and private companies.
Mr. Berman and Dr. Kumar will not receive any additional
compensation for their service on the Board.
About CopyTele
Melville, N.Y.-based CopyTele, Inc.'s principal operations include
the development, production and marketing of thin flat display
technologies, including low-voltage phosphor color displays and
low-power passive E-Paper(R) displays, and the development,
production and marketing of multi-functional encryption products
that provide information security for domestic and international
users over several communications media.
The Company's balance sheet at July 31, 2012, showed $5.9 million
in total assets, $6.8 million in total liabilities, and a
shareholders' deficit of $893,071.
According to the Company's quarterly report for the period ended
July 31, 2012, based on information presently available, the
Company does not believe that its existing cash, cash equivalents,
and investments in certificates of deposit, together with cash
flows from expected sales of its encryption products and revenue
relating to its display technologies, and other potential sources
of cash flows or necessary expense reductions including employee
compensation, will be sufficient to enable it to continue its
marketing, production, and research and development activities for
12 months from the end of this reporting period. "Accordingly,
there is substantial doubt about our ability to continue as a
going concern.
CYPRESS OF TAMPA: Sec. 341(a) Creditors' Meeting Set for Dec. 17
----------------------------------------------------------------
The U.S. Trustee for the Middle District of Florida will hold a
Section 341 Meeting of Creditors in the Chapter 11 cases of The
Cypress of Tampa LLC and The Cypress of Tampa II LLC on Dec. 17
10:30 a.m. at Tampa, FL (861) - Room 100-B, Timberlake Annex, 501
E. Polk Street.
Proofs of claim are due in the case by Feb. 4, 2013.
The Cypress of Tampa LLC and The Cypress of Tampa II LLC filed
voluntary Chapter 11 petitions (Bankr. M.D. Fla. Case No. 12-17518
and 12-17520) on Nov. 20, 2012. The Cypress of Tampa LLC, a
Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B),
estimated assets and debts of $10 million to $50 million. Judge
K. Rodney May oversees the cases. Jennis & Bowen, P.L., serves as
the Debtors' counsel.
CYPRESS OF TAMPA: Dec. 13 Final Hearing on Jennis & Bowen Hiring
----------------------------------------------------------------
The Cypress of Tampa LLC obtained interim Court approval to employ
the law firm of Jennis & Bowen, P.L., as counsel. The firm's Chad
Bowen and Suzy Tate would assume primary responsibility as lead
bankruptcy counsel.
J&B's current hourly rates range from $100 to $150 for paralegals
to $200 to $400 for attorneys.
J&B attests it has no connection with the Debtor, its creditors,
any other party in interest, their respective attorneys and
accountants, the United States Trustee, or any person employed in
the Office of the United States Trustee. J&B is a disinterested
party and does not hold or represent any interest adverse to the
Debtor's estate.
The Court will hold a Final Hearing on the employment application
on Dec. 13.
The firm's counsel may be reached at:
Suzy Tate, Esq.
JENNIS & BOWEN, P.L.
400 N. Ashley Dr., Suite 2540
Tampa, FL 33602
Telephone: (813) 229-1700
Facsimile: (813) 229-1707
E-mail: state@jennisbowen.com
The Cypress of Tampa LLC and The Cypress of Tampa II LLC filed
voluntary Chapter 11 petitions (Bankr. M.D. Fla. Case No. 12-17518
and 12-17520) on Nov. 20, 2012. The Cypress of Tampa LLC, a
Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B),
estimated assets and debts of $10 million to $50 million. Judge
K. Rodney May oversees the cases.
DESERT HAWK: Fails to Pay $600,000 Promissory Notes
---------------------------------------------------
Under the Amended and Restated 15% Convertible Promissory Notes
entered into on July 14, 2012, between Desert Hawk Gold Corp. and
West C. Street LLC and Ibearhouse, LLC, the Notes are scheduled to
mature and the Company would be required to pay each of the Note
Holders the principal amount of $300,000.
The company was unable to pay the required payments.
On Nov. 30, 2012, the Company's board of directors approved the
issuance of 150,000 shares of the Company's common stock to each
of the Note Holders pursuant to Section 6(f) of the Notes which
each state the following:
"...if the Company defaults in the payment in the principal
amount of this Note on the Maturity Date, the Company shall
issue to the Holder 150,000 fully paid and nonassessable
shares (the "Penalty Shares") of the common stock of the
Company...and the Maturity Date of this Note shall be
automatically extended for an additional 12 months from the
original Maturity Date."
The original maturity date for the Notes was Nov. 30, 2012, and
the new maturity date for the Notes is Nov. 30, 2013.
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.
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.
DIGITAL DOMAIN: Hiring Professionals to Sell Port St. Lucie Asset
-----------------------------------------------------------------
Digital Domain Media Group, Inc., and its affiliates were slated
to return to the Bankruptcy Court for the District of Delaware on
Dec. 4 to seek permission to employ professionals to assist in the
sale of assets related to their property in Port St. Lucie,
Florida.
DeSantis as Real Estate Broker
The Debtors seek to hire DeSantis Commercial, Inc., as real estate
broker. DeSantis will be marketing and selling the Debtors'
property located at SW Gatlin Boulevard, in Port St. Lucie,
Florida.
Pursuant to the engagement agreement, DeSantis will receive a
commission of 6% of the sale price of the property, which may be
split evenly between DeSantis and any buyer's real estate agent.
However, in the event that the property is sold pursuant to a
credit bid, the commission will be 3% of the sale price of the
property. The engagement agreement terminates on the date of the
closing of a sale or disposition of the property. In the event
the engagement agreement is terminated at the Debtors' request,
DeSantis will be entitled to reimbursement of its direct expenses
incurred in marketing the property.
To the best of the Debtors' knowledge, DeSantis is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Heritage Global as Sales Agent
Digital Domain also seeks to employ Heritage Global Partners,
Inc., as sales agent and auctioneer for the sale and auction of
the Debtors' personal property located in Florida consisting
generally of office equipment and computer equipment. The
material terms of the engagement agreement include, among other
things:
-- the auctioneer will act as sales agent and auctioneer
for the auction and sale of the remaining property assets;
-- the auctioneer will charge a buyer's premium of 15% of the
aggregate gross proceeds for the cash sale of remaining
personal property (or 18% if for property purchased by
credit card), payable by the buyers; and
-- no sales commission will be paid to any of the auctioneer
proceeds from the sale of any remaining personal property
assets.
Thomas Johnson as Appraiser
Digital Domain is also hiring Thomas Johnson & Associates, Inc. as
real estate appraiser. Thomas Johnson will, among other things:
-- appraise the real property located at 10250 SW Village
Parkway in Port St. Lucie, Florida, comprising (i) the
Debtor's purpose-built, 115,000 square foot animation studio
and (ii) vacant four acre parcel of real property adjoining
the animation studio;
-- assist the proposed real estate broker in accurately
marketing the property.
About Digital Domain
Port St. Lucie, Florida-based Digital Domain Media Group, Inc. --
http://www.digitaldomain.com/-- engaged in the creation of
original content animation feature films, and development of
computer-generated imagery for feature films and transmedia
advertising primarily in the United States.
Digital Domain Media Group, Inc. and 13 affiliates sought Chapter
11 protection (Bankr. D. Del. Lead Case No. 12-12568) on Sept. 11,
2012, to sell its business for $15 million to Searchlight Capital
Partners LP, subject to higher and better offers.
At the auction on Sept. 21, the principal part of the business was
purchased by a joint venture between Galloping Horse America LLC,
an affiliate of Beijing Galloping Horse Co., and an affiliate of
Reliance Capital Ltd., based in Mumbai. The $36.7 million total
value of the contact includes $3.6 million to cure defaults on
contracts and $2.9 million in reimbursement of payroll costs.
Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the
Debtors. FTI Consulting, Inc.'s Michael Katzenstein is the chief
restructuring officer. Kurtzman Carson Consultants LLC is the
claims and notice agent.
An official committee of unsecured creditors appointed in the case
is represented by lawyers at Sullivan Hazeltine Allinson LLC and
Brown Rudnick LLP. MDT Executive Management Co., LLC as its
financial advisor.
The company disclosed assets of $205 million and liabilities
totaling $214 million. Debt includes $40 million on senior
secured convertible notes plus $24.7 million in interest. There
is another issue of $8 million in subordinated secured convertible
notes.
The Debtors also have sought ancillary relief in Canada, pursuant
to the Companies' Creditors Arrangement Act in the Supreme Court
of British Columbia, Vancouver Registry. Cassels Brock and
Blackwell LLP serves as Canadian counsel.
DIGITAL DOMAIN: Auction and Online Sale on Dec. 12 to 14
--------------------------------------------------------
Heritage Global Partners, a worldwide leader in asset advisory and
auction services and a wholly owned subsidiary of Counsel RB
Capital, disclosed that, subject to Bankruptcy Court approval, it
is selling state-of-the entertainment industry assets utilized in
the digital production of major motion pictures, advertising,
gaming and cutting-edge virtual technology. A Live Global Webcast
auction is scheduled to begin at 10 a.m. ET on Dec. 12 for select
assets. Additionally, a global online auction for the remainder
of the assets begins 7:00 a.m. on Dec. 13 and closes 10 a.m. on
the 14th.
A summary list of items up for sale is available at
http://www.hgpauction.com/?auctionid=287. Prospective bidders are
encouraged to attend a two-day facility preview between 10 a.m.-4
p.m. ET Dec. 10-11 at the Digital Domain office at 10250 S.W.
Village Parkway, Port St. Lucie, FL. Key assets being auctioned
fall into the categories of PC and storage, networking, movie-
related and office furnishings.
"We expect very significant demand from bidders around the world
for these unique entertainment production and technology assets
that have been deployed in helping create some of the most
successful movies of all-time," stated Heritage Global Partners
Director of Sales Nick Dove.
"Over a two-decade span, this organization, originally founded by
cinema visionary James Cameron and partners, contributed cutting-
edge visuals and stunning special effects for some of the
industry's top-grossing titles including Titanic, the first three
installments of the Transformers franchise and Disney's Pirates of
the Caribbean: At World's End, earning members of the Digital
Domain creative team multiple Academy Awards(R)," added Heritage
Global Partners Vice President David Weiss.
Led by auction industry pioneers Ross and Kirk Dove, Heritage
Global Partners is one of the leading worldwide asset advisory and
auction services firms, assisting large and small companies with
buying and selling assets. A Counsel RB Capital company, HGP
specializes in asset brokerage, inspection, and valuations,
industrial equipment and real estate auctions, as well as
enterprise auctions combining tangible and intangible assets.
About Digital Domain
Port St. Lucie, Florida-based Digital Domain Media Group, Inc. --
http://www.digitaldomain.com/-- engaged in the creation of
original content animation feature films, and development of
computer-generated imagery for feature films and trans-media
advertising primarily in the United States.
Digital Domain Media Group, Inc. and 13 affiliates sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-12568) on
Sept. 11, 2012, to sell its business for $15 million to
Searchlight Capital Partners LP, subject to higher and better
offers.
At the auction on Sept. 21, the principal part of the business was
purchased by a joint venture between Galloping Horse America LLC,
an affiliate of Beijing Galloping Horse Co., and an affiliate of
Reliance Capital Ltd., based in Mumbai. The $36.7 million total
value of the contact includes $3.6 million to cure defaults on
contracts and $2.9 million in reimbursement of payroll costs.
Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the
Debtors. FTI Consulting, Inc.'s Michael Katzenstein is the chief
restructuring officer. Kurtzman Carson Consultants LLC is the
claims and notice agent.
An official committee of unsecured creditors appointed in the case
is represented by lawyers at Sullivan Hazeltine Allinson LLC and
Brown Rudnick LLP.
The company disclosed assets of $205 million and liabilities
totaling $214 million. Debt includes $40 million on senior
secured convertible notes plus $24.7 million in interest. There
is another issue of $8 million in subordinated secured convertible
notes.
The Debtors also have sought ancillary relief in Canada, pursuant
to the Companies' Creditors Arrangement Act in the Supreme Court
of British Columbia, Vancouver Registry.
DIGITAL DOMAIN: Disney Fights Over 3-D Tech License
---------------------------------------------------
Jamie Santo at Bankruptcy Law360 reports that Digital Domain Media
Group Inc. and The Walt Disney Co. battled in Delaware bankruptcy
court Tuesday as the big-ticket studio sought to confirm its
rights to patented 3-D film technology set to be auctioned off by
the special effects company this week.
Bankruptcy Law360 relates that Disney contends it holds a broad
license to use the process, which transforms two-dimensional
images into 3-D, and asked for the court affirm its rights ahead
of Wednesday's planned Chapter 11 sale.
About Digital Domain
Port St. Lucie, Florida-based Digital Domain Media Group, Inc. --
http://www.digitaldomain.com/-- engaged in the creation of
original content animation feature films, and development of
computer-generated imagery for feature films and transmedia
advertising primarily in the United States.
Digital Domain Media Group, Inc. and 13 affiliates sought Chapter
11 protection (Bankr. D. Del. Lead Case No. 12-12568) on Sept. 11,
2012, to sell its business for $15 million to Searchlight Capital
Partners LP, subject to higher and better offers.
At the auction on Sept. 21, the principal part of the business was
purchased by a joint venture between Galloping Horse America LLC,
an affiliate of Beijing Galloping Horse Co., and an affiliate of
Reliance Capital Ltd., based in Mumbai. The $36.7 million total
value of the contact includes $3.6 million to cure defaults on
contracts and $2.9 million in reimbursement of payroll costs.
Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the
Debtors. FTI Consulting, Inc.'s Michael Katzenstein is the chief
restructuring officer. Kurtzman Carson Consultants LLC is the
claims and notice agent.
An official committee of unsecured creditors appointed in the case
is represented by lawyers at Sullivan Hazeltine Allinson LLC and
Brown Rudnick LLP. MDT Executive Management Co., LLC as its
financial advisor.
The company disclosed assets of $205 million and liabilities
totaling $214 million. Debt includes $40 million on senior
secured convertible notes plus $24.7 million in interest. There
is another issue of $8 million in subordinated secured convertible
notes.
The Debtors also have sought ancillary relief in Canada, pursuant
to the Companies' Creditors Arrangement Act in the Supreme Court
of British Columbia, Vancouver Registry. Cassels Brock and
Blackwell LLP serves as Canadian counsel.
DRINKS AMERICAS: Timothy Owens Named CEO and Chairman
-----------------------------------------------------
Federico Cabo resigned his positions as Drinks Americas Holdings,
Ltd.,'s Chief Executive Officer, as well as his position serving
as chairman of the Company's board of directors. Federico Cabo's
resignation was not due to any disagreement with the Company on
any matter relating to the Company's operations, policies or
practices.
On Nov. 27, 2012, Richard Cabo resigned his positions as the
Company's Chief Executive Officer, as well as his position serving
on the Company's board of directors. Richard Cabo's resignation
was not due to any disagreement with the Company on any matter
relating to the Company's operations, policies or practices.
Effective Nov. 27, 2012, Timothy J. Owens was appointed to serve
as the Company's Chief Executive Officer and to serve as chairman
of the Company's board of directors.
Timothy Owens, age 56, has over 25 years acting as a financial
consultant across various industries, such as real estate,
electronics, biotech, and environmental. Since 2009, Mr. Owens,
through his consulting company, TJO & Associates Financial and
Consulting Services, specialized in investment services for
developing, buying, selling and leasing commercial and residential
real estate. From 2004 to 2009, Mr. Owens, as chief executive
officer of Connect One World, designed, developed and integrated
remote real time video security systems geared for use in homeland
security. From 1999 to 2004, Mr. Owens served as chief executive
officer of QT 5, Inc. (formerly a publicly traded corporation), a
company focused on the design and development of medical in-vitro
testing devices and a nationally distributed product called "Nico
Water." Mr. Owens' received his Masters of Science Degree in
Finance from La Salle University, Louisiana.
Since June 2011, Mr. Owens has been a consultant to Worldwide
Beverage Imports, LLC. As previously disclosed, in June 2011, the
Company and WBI entered into a licensing agreement giving the
Company the right to distribute and market existing brands and
products of WBI. In accordance with the Licensing Agreement, Mr.
Owens, as consultant to WBI, received an aggregate of 521,918
shares of the Company's common stock.
There is no family relationship between Mr. Owens and any other
executive officer or director of the Company.
About Drinks Americas
Headquartered in Wilton, Conn., Drinks Americas Holdings, Ltd. --
http://www.drinksamericas.com/-- through its majority-owned
subsidiaries, Drinks Americas, Inc., Drinks Global, LLC, D.T.
Drinks, LLC, and Olifant U.S.A Inc., imports, distributes and
markets unique premium wine and spirits and alcoholic beverages
associated with icon entertainers, celebrities and destinations,
to beverage wholesalers throughout the United States.
The Company reported a net loss of $4.58 million on $497,453 of
net sales for the year ended April 30, 2011, compared with a net
loss of $5.61 million on $890,380 of net sales during the prior
year.
After auditing the fiscal 2011 financial statements, Bernstein &
Pinchuk, in New York, 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
from operations since its inception and has a working capital
deficiency.
The Company's balance sheet at July 31, 2012, showed $6.24 million
in total assets, $4.55 million in total liabilities and
$1.68 million in total equity.
ELLIPSAT INC: Trial Begins on Bid to Revoke Confirmation Order
--------------------------------------------------------------
Bankruptcy Judge S. Martin Teel, Jr., denied a second motion for
summary judgment seeking dismissal of an adversary proceeding
filed by John Page to revoke the order confirming the Chapter 11
plan for Ellipsat, Inc., formerly known as Ellipso, Inc.
The summary judgment motion, filed by Plan proponents, contends
Mr. Page is barred from seeking revocation of the confirmation
order because he has repeatedly demanded payment of his allowed
claims and then accepted payment of all that he was entitled to
receive under the confirmed Plan.
Judge Teel noted that Mr. Page neglected to seek a stay of the
distribution of plan payments pending the disposition of the
adversary proceeding. Because all distributions under the Joint
Plan have been made, there may be an issue as to whether
revocation of the confirmation order at this point is
impracticable or "equitably moot".
The Bankruptcy Court was slated to hold a trial Dec. 5 to address
the issue of equitable mootness.
Mr. Page filed the adversary proceeding pursuant to 11 U.S.C. Sec.
1144 alleging that the confirmation order dated May 1, 2012, was
procured by fraud and should be revoked by the court. On May 8,
Mr. Page received the financial records from the chapter 11
trustee which form the basis of his claim of fraud. On May 16,
the Joint Plan became effective, and pursuant to the Joint Plan,
the escrow agent and attorney for the Joint Plan proponents gave
Mr. Page a check for $6,000 for payment of Mr. Page's
administrative expense claim allowed by the Bankruptcy Court. On
June 3, Mr. Page filed the complaint. On Sept. 25, the Court
allowed Mr. Page's priority unsecured claim in the amount of
$10,950 and his general unsecured claim in the amount of $61,050.
Judge Teel noted that if Mr. Page is successful in revoking the
confirmation order, he will be required to disgorge any
distribution he has received under the Joint Plan.
The lawsuit is, JOHN H. PAGE, Plaintiff, v. DAVID CASTIEL, et al.,
Defendants, Adv. Proc. No. 2-10026 (Bankr. D.D.C.). A copy of the
Court's Nov. 29, 2012 Memorandum Decision and Order is available
at http://is.gd/XpLpNIfrom Leagle.com.
About Ellipsat
Ellipsat, Inc., formerly known as Ellipso, Inc., is a privately
held communications satellite system design company, now in
bankruptcy. Its subsidiaries include Mobile Communications
Holdings, Inc., ESBH, Inc., and Virtual Geosatellite,
LLC. Through these subsidiaries, the Company has compiled a
portfolio of intellectual property for various communications
satellite systems and high performance technology. Utilizing
unique and patented elliptical orbits, the systems were intended
to provide low cost voice, data, facsimile, paging and
geolocational services to subscribers around the world at prices
lower than competing systems.
Ellipso filed for Chapter 11 bankruptcy (Bankr. D. D.C. Case No.
09-00148) on Feb. 25, 2009. Kermit A. Rosenberg, Esq., at Tighe
Patton Armstrong Teasdale, PLLC -- now Butzel, Long, Tighe, Patton
-- in Washington, DC, served as the Debtor's counsel. In its
petition, the Debtor estimated under $50,000 in assets and
$1 million to $10 million in debts.
On Jan. 19, 2010, the Court granted the United States Trustee's
motion and directed the appointment of a chapter 11 trustee.
On May 1, 2012, the Court confirmed a joint Chapter 11 plan for
the Debtor.
EMPIRE RESORTS: Option to Lease EPT Property Extended to March 8
----------------------------------------------------------------
The option agreement, by and between Monticello Raceway
Management, Inc., a wholly-owned subsidiary of Empire Resorts,
Inc., and EPT Concord II, LLC, originally entered into on Dec. 21,
2011, was further amended by a letter agreement between the
Parties, dated Nov. 30, 2012. Pursuant to the Option Agreement,
EPT granted MRMI a sole and exclusive option to lease certain EPT
property located in Sullivan County, New York, pursuant to the
terms of a lease negotiated between the parties.
Pursuant to the Letter Agreement, MRMI and EPT agreed to extend
the option exercise period from Feb. 20, 2013, to March 8, 2013.
In addition, the Parties agreed to extend the date by which they
would enter into a master development agreement with respect to
the EPT Property from Nov. 30, 2012, to Dec. 14, 2012. Except for
these amendments, the Option Agreement remains unchanged and in
full force and effect.
A copy of the Letter Agreement is available for free at:
http://is.gd/sQFaWU
About Empire Resorts
Based in Monticello, New York, Empire Resorts, Inc. (NASDAQ: NYNY)
-- http://www.empireresorts.com/-- owns and operates Monticello
Casino & Raceway, a video gaming machine and harness racing track
and casino located in Monticello, New York, 90 miles northwest of
New York City.
The Company reported a net loss of $24,000 in 2011, compared with
a net loss of $17.57 million in 2010.
The Company's balance sheet at Sept. 30, 2012, showed
$51.98 million in total assets, $25.48 million in total
liabilities, and $26.49 million in total stockholders' equity.
FIRST SECURITY: Has Until March 25 to Regain NASDAQ Compliance
--------------------------------------------------------------
First Security Group, Inc., received a ruling from the Hearing
Panel of the NASDAQ Stock Market LLC indicating the approval of
the Company's requested extension of the period to regain
compliance with the listing standards for the Global Select
market. The Company requested a six month extension, or through
March 25, 2013, to regain compliance with the listing standards.
"We appreciate the opportunity that the Hearing Panel provided for
us to present our overall recapitalization plan for FSG and its
direct impact on regaining compliance with the listing standards
of the Global Select exchange. We continue to make progress and
believe that we will be back in compliance by March 25th," said
Michael Kramer, President and CEO of First Security. "The Global
Select market has the highest listing standards of the three
NASDAQ exchanges and the results of our recapitalization plan
would far excess the Global Select's minimum listing standards."
On Nov. 27, 2012, the Company received a notice extending the
compliance period to March 25, 2013. The extension includes
certain conditions, including that the Company receive approval
from the U.S. Treasury, holder of the Company's Series A Preferred
Stock issued under the Capital Purchase Program of the Troubled
Asset Relief Program, to restructure the Preferred Stock as part
of a larger recapitalization plan.
"At this time, we believe that a restructuring plan mutually
agreeable to First Security and the U.S. Treasury should be
achieved by year-end," said John Haddock, Executive Vice President
and CFO of First Security.
NASDAQ previously informed the Company that it would be subject to
delisting based on the Company's non-compliance with the minimum
$5 million market value of publicly held share requirement set
forth in the NASDAQ listing standards for the Global Select
market. At the time, the Company stated that it planned to appeal
to the Hearing Panel with a request to extend the compliance
period.
In the event that the Company does not achieve compliance with the
conditions of the ruling, NASDAQ may transfer trading of the
Company's common stock to the NASDAQ Capital Market exchange.
About First Security Group
First Security Group, Inc., is a bank holding company
headquartered in Chattanooga, Tennessee, with $1.2 billion in
assets as of Sept. 30, 2010. Founded in 1999, First
Security's community bank subsidiary, FSGBank, N.A., has 37 full-
service banking offices, including the headquarters, along the
interstate corridors of eastern and middle Tennessee and northern
Georgia and 325 full-time equivalent employees. In Dalton,
Georgia, FSGBank operates under the name of Dalton Whitfield Bank;
along the Interstate 40 corridor in Tennessee, FSGBank operates
under the name of Jackson Bank & Trust.
In the auditors' report accompanying the financial statements for
year ended Dec. 31, 2011, Joseph Decosimo and Company, PLLC, in
Chattanooga, Tennessee, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has recently incurred substantial
losses. The Company is also operating under formal supervisory
agreements with the Federal Reserve Bank of Atlanta and the Office
of the Comptroller of the Currency and is not in compliance with
all provisions of the Agreements. Failure to achieve all of the
Agreements' requirements may lead to additional regulatory
actions.
The Company reported a net loss of $23.06 million in 2011, a net
loss of $44.34 million in 2010, and a net loss of $33.45 million
in 2009.
The Company's balance sheet at Sept. 30, 2012, showed $1.11
billion in total assets, $1.07 billion in total liabilities and
$44.72 million in total shareholders' equity.
FLAGSTONE REINSURANCE: Fitch Keeps BB+ Ratings on Sub. Debentures
-----------------------------------------------------------------
Fitch Ratings removed the ratings of Flagstone Reinsurance
Holdings, S.A. and subsidiaries (collectively Flagstone) from
Rating Watch Evolving and affirmed them at their current levels.
The Rating Outlook is Positive.
The ratings actions follow the completion of Flagstone's
acquisition by Validus Holdings, Ltd. The transaction was
originally announced on Aug. 30, 2012 and closed on Nov. 30, 2012.
The rating affirmation and Positive Rating Outlook reflects
Fitch's previously announced indication that if the transaction
were to close as planned, the agency would bring Flagstone's
ratings in line with Validus' ratings.
Fitch has removed the following ratings from Rating Watch Evolving
and affirmed them with a Positive Rating Outlook:
Flagstone Reassurance Suisse SA:
-- Insurer Financial Strength at 'A-'.
Flagstone Reinsurance Holdings, S.A.
-- Long-term Issuer Default Rating (IDR) at 'BBB+';
-- $120 million of floating rate subordinated debentures due
Sept. 15, 2036 at 'BB+';
-- Euro13 million of floating rate subordinated debentures due
Sept. 15, 2036 at 'BB+';
-- $25 million of floating rate subordinated debentures due
Sept. 15, 2037 at 'BB+'.
Flagstone Finance S.A.
-- Long-term IDR at 'BBB+';
-- $100 million of floating rate subordinated debentures due
July 30, 2037 at 'BB+'.
FUEL DOCTOR: Michael McIntyre Quits From Board of Directors
-----------------------------------------------------------
Michael McIntyre resigned as a director of Fuel Doctor Holding,
Inc., effective Nov. 28, 2012. There was no disagreement or
dispute between Mr. McIntyre and the Company which led to his
resignation.
"I have decided that there seems to be nothing else left for me to
bring to the Company and would be better for the Company to pursue
someone locally in order to get more of a hand on approach while
the Company goes through these difficult times," Mr. McIntyre
wrote in his letter of resignation. "I appreciate the time I
spent working with you and the Company partners. Best of luck in
your future endeavours."
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 Sept. 30, 2012, showed $1.37
million in total assets, $1.61 million in total liabilities and a
$240,899 total shareholders' deficit.
FUELSTREAM INC: Major Consulting Chief, WCH Exec. Named to Board
----------------------------------------------------------------
John Thomas resigned from the Board of Directors of Fuelstream,
Inc., on Nov. 30, 2012.
Also on Nov. 30, 2012, Paul Douglas Major and Thomas McConnell,
Jr., were appointed to the Board of Directors of the Company.
Since 2006, Mr. Major has been the Chief Executive Officer of
Major Consulting Limited, a consulting firm that offers financial
solutions to public and private sector entities and high net worth
individuals. Prior to 2006, Mr. Major was the Managing Director
of Bahamasair from 2000-2005. Mr. Major has extensive finance and
banking experience, including serving as Vice President and
General Manager of Citibank's Latin American/Carribean division,
and General Manager of the Bahamas Development Bank. Mr. Major
has an MBA from the University of Miami, as well as other
institutions of higher learning including the School of Banking -
New York, Harvard, and the Adam Smith Institute in London.
Since 2006, Mr. McConnell has been a Senior Project Manager for
Weston Custom Homes, Inc., a builder of luxury homes in Florida,
Pennsylvania, and Maryland. Additionally, since 2012, Mr.
McConnell has served as the Senior Project Manager for Robert
Castellano Building and Design, LLC, a builder of luxury home
communities in the eastern United States. From 2006-2008, Mr.
McConnell was a Senior Project Manager for Southern Chateaux
Homes, Inc. Mr. McConnell is a certified Residential Contractor
in the State of Florida.
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.
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.
The Company's balance sheet at Sept. 30, 2012, showed
$3.04 million in total assets, $4.87 million in total liabilities
and a $1.82 million total stockholders' deficit.
GENERAL MOTORS: Dispute Over Dealership Goes to 4th Circuit
-----------------------------------------------------------
District Judge John Preston Bailey in Elkins, West Virginia,
granted, in part, and denied, in part, the request of a General
Motors dealer for stay of the District Court's prior order pending
appeal.
The District Court in October granted summary judgment to General
Motors in its lawsuit to cancel a 2010 dealership agreement with
Bill Kelley, Inc., after Kelley failed to hit certain sales
targets. Kelley was an authorized dealer for GM, selling Pontiac,
Buick and GMC trucks. Kelley refused to comply with the terms of
the parties' agreement, leading to the litigation.
In last week's decision, the District Court said it will stay the
effect of the October Order for a period of 30 days to permit
Kelley to apply for a stay to the U.S. Court of Appeals for the
Fourth Circuit. Any stay beyond that period is denied.
The case is GENERAL MOTORS, LLC, Plaintiff, v. BILL KELLEY, INC.,
d/b/a Kelley Motors, Inc., Defendant, Civil Action No. 2:12-CV-51
(N.D. W.Va.). A copy of the Court's Nov. 29, 2012 Order is
available at http://is.gd/n3PB1Lfrom Leagle.com.
About General Motors
With its global headquarters in Detroit, Michigan, General Motors
Company (NYSE:GM, TSX: GMM) -- http://www.gm.com/-- is one of
the world's largest automakers, traces its roots back to 1908.
GM employs 208,000 people in every major region of the world and
does business in more than 120 countries. GM and its strategic
partners produce cars and trucks in 30 countries, and sell and
service these vehicles through the following brands: Baojun,
Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Isuzu, Jiefang,
Opel, Vauxhall, and Wuling. GM's largest national market is
China, followed by the United States, Brazil, the United Kingdom,
Germany, Canada, and Italy. GM's OnStar subsidiary is the
industry leader in vehicle safety, security and information
services.
General Motors Co. was formed to acquire the operations of
General Motors Corp. through a sale under 11 U.S.C. Sec. 363
following Old GM's bankruptcy filing. The U.S. government once
owned as much as 60.8% stake in New GM on account of the
financing it provided to the bankrupt entity. The deal was
closed July 10, 2009, and Old GM changed its name to Motors
Liquidation Co.
General Motors Corp. and three of its affiliates filed for
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on
June 1, 2009. The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin,
Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges
LLP, assist the Debtors in their restructuring efforts. Al Koch
at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as
the Chief Executive Officer for Motors Liquidation Company. GM
is also represented by Jenner & Block LLP and Honigman Miller
Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP
is providing legal advice to the GM Board of Directors. GM's
financial advisors are Morgan Stanley, Evercore Partners and the
Blackstone Group LLP. Garden City Group is the claims and notice
agent of the Debtors.
The U.S. Trustee appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Unsecured
Creditors Holding Asbestos-Related Claims. Lawyers at Kramer
Levin Naftalis & Frankel LLP served as bankruptcy counsel to the
Creditors Committee. Attorneys at Butzel Long served as counsel
on supplier contract matters. FTI Consulting Inc. served as
financial advisors to the Creditors Committee. Elihu Inselbuch,
Esq., at Caplin & Drysdale, Chartered, represented the Asbestos
Committee. Legal Analysis Systems, Inc., served as asbestos
valuation analyst.
The Bankruptcy Court entered an order confirming the Debtors'
Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan
was declared effect on March 31, 2011.
GIBRALTAR KENTUCKY: Plan Outline Hearing Continued to Dec. 13
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida
continued until Dec. 13, 2012, at 1:30 p.m., the hearing to
consider adequacy of the Amended Disclosure Statement explaining
Gibraltar Kentucky Development, LLC's proposed Chapter 11 Plan.
As reported in the Troubled Company Reporter on Nov. 28, 2012,
Donald F. Walton, U.S. Trustee for Region 21, asked the Court to
deny approval of the disclosure statement. The U.S. Trustee said
the Disclosure Statement does not contain adequate information as
required by Section 1125 of the Bankruptcy Code. According to the
U.S Trustee, the Disclosure Statement must, among other things:
-- disclose the names the equity holders and amount of
membership interests held by each party;
-- provide more information regarding the Debtor's operations;
and
-- provide sufficient information regarding the potential
income the Debtor may receive from litigation against The
Lindley Group.
The Troubled Company Reporter on Oct. 17 reported the terms of the
Plan. The Plan and Disclosure Statement, filed Sept. 21, provides
for this treatment of claims:
1. On the Effective Date, each holder of an allowed taxing
authority claims will receive payment in full.
2. Allowed general unsecured claims will be paid in full plus
interest at 1% on the Confirmation Date.
3. No plan payments other than full retention of paid for
membership interests will be made to the equity interest
holders of the Debtor.
A copy of the Disclosure Statement is available for free at
http://bankrupt.com/misc/GIBRALTAR_KENTUCKY_ds.pdf
About Gibraltar Kentucky
Gibraltar Kentucky Development, LLC, filed a Chapter 11 bankruptcy
petition (Bankr. S.D. Fla. Case No. 12-13289) on Feb. 10, 2012, in
West Palm Beach, Florida. Palm Beach Gardens-based Gibraltar
Kentucky says that it is not a small business debtor under 11
U.S.C. Sec. 101(51D). Documents attached to the petition indicate
that McCaugh Energy LLC owns 42.15% of the "fee simple"
securities.
According to the Web site http://www.gibraltarenergygroup.com/
Gibraltar Kentucky is part of the Gibraltar Energy Group. The
various companies of the group are involved with the drilling,
development and production of oil and gas, as well as, the sale of
coal and timber. Offices are in Michigan and Florida and
investments are in Michigan and Kentucky.
Judge Erik P. Kimball presides over the case. David L. Merrill,
Esq., at Talarchyk Merrill, LLC, serves as the Debtor's counsel.
The Debtor disclosed $175,395,449 in assets and $1,193,516 in
liabilities as of the Chapter 11 filing. The petition was signed
by Bill Boyd, as manager.
Steven R. Turner, Trustee for Region 21, has informed the Court
that, until further notice, he will not appoint a committee of
creditors.
GRANITE DELLS: Dec. 6 Hearing on Bid to Halt Cash Collateral Use
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona will convene
a hearing today, Dec. 6, 2012, at 10 a.m., to consider Arizona Eco
Development LLC's application for temporary restraining order on
Granite Dells Ranch Holdings LLC's use of cash collateral to pay
necessary expenses.
As reported in the Troubled Company Reporter on June 8, 2012, the
Court signed a stipulated order authorizing the Debtor's interim
use of Arizona ECO Development's cash collateral. The Debtor may
use the cash collateral to pay its normal and ordinary operating
expenses (as utilities, insurance, fence repairs and other
ordinary expenses) as will come due in the ordinary course of the
Debtors' business and to maintain and operate the Debtor's
property. As adequate protection from any diminution in value of
the lender's collateral, the Debtor would grant the lender
replacement liens and equity cushion.
About Granite Dells
Scottsdale, Arizona-based Granite Dells Ranch Holdings LLC filed a
bare-bones Chapter 11 petition (Bankr. D. Ariz. Case No. 12-04962)
in Phoenix on March 13, 2012. Judge Redfield T. Baum PCT Sr.
oversees the case. The Debtor is represented by Alan A. Meda,
Esq., at Stinson Morrison Hecker LLP. The Debtor disclosed
$2.22 million in assets and $157 million in liabilities as of the
Chapter 11 filing.
Cavan Management Services, LLC is the Debtor's manager. David
Cavan, member of the firm, signed the Chapter 11 petition.
Arizona ECO Development LLC, which acquired a $83.2 million 2006
loan by the Debtor, is represented by Snell & Wilmer L.L.P. The
resolution authorizing the Debtor's bankruptcy filing says the
Company is commencing legal actions against Stuart Swanson, AED,
and related entities relating to the purchase by Mr. Swanson of a
promissory note payable by the Company to the parties that sold a
certain property to the Company. According to Law 360, AED sued
Granite Dells on March 6 asking the Arizona court to appoint a
receiver. Arizona ECO is foreclosing on a secured loan backed by
15,000 acres of Arizona land.
The United States Trustee said that an official committee has not
been appointed in the bankruptcy case of Granite Dells because an
insufficient number of unsecured creditors have expressed interest
in serving on a committee.
The Debtor's Plan provides for payment to unsecured creditors
(including any unsecured claim of AED) in quarterly installments
over eight years aggregating $5 million. However, the Plan
provides that a holder of an investment promissory note (estimated
to total $21 million) will be given the option of participating in
the funding of the Reorganized Debtor.
Tri-City Investment & Development, LLC, a 39.25% equity holder in
the Debtor, also filed a Consolidated Supplemental Disclosure in
support of Tri-City's Plan, as amended. Tri-City's consolidated
Disclosure Statement incorporates and restates all material terms
of the Tri-City's previous disclosure statements and incorporates
the terms of the agreement that was reached at the Aug. 20, 2012,
mediation.
GREENBRIER COS: S&P Raises CCR to 'B+' on Improved Credit Measures
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Lake Oswego, Ore.-based Greenbrier Cos. Inc.
(Greenbrier) to 'B+' from 'B'. The outlook is stable.
"The upgrade reflects Greenbrier's improved credit measures,
'adequate' liquidity, and our expectation for relatively steady
operating and financial performance in 2013 amid mixed demand
conditions in the rail manufacturing industry and continued slow
debt reduction," said Standard & Poor's credit analyst Gregoire
Buet. "Based on current backlog, our assumptions for modestly
lower new industry orders next year, and assuming a 15%-20% market
share, we expect modestly lower revenues and steady margins. This
should translate into debt to EBITDA remaining between 3x and 3.5x
(leverage was 3.2x at the end of fiscal 2012) and funds from
operations (FFO) to total debt about 25%. These ratios would be
somewhat stronger than our expectations for the rating of 4x-5x
and 10%-15%, respectively. We believe this provides some
flexibility for absorbing potentially weaker-than-expected railcar
demand. This also recognizes some of the uncertainty about the
future strategic direction and leverage profile of the company
arising from potential developments related to activist investor
Carl Icahn, who has currently a minority ownership position
in the company. We view the company's business risk profile as
'weak' and consider its financial risk profile as 'aggressive.' We
view the company's management and governance profile as 'fair,'"
S&P said.
"With 2012 revenues of about $1.8 billion (compared with $1.2
billion in fiscal 2011), Greenbrier manufactures railcars and
marine vessels (69% of sales); provides wheel services,
refurbishment, and parts (about 27%); and provides railcar leasing
services (4%). It is one of the major railcar manufacturer in
North America, with an estimated 15%-20% market share, and in
Europe with a 10%-15% market share. In North America the company
has a strong position in the double-stack intermodal segment, a
good position in conventional railcars, and expanding tank cars
capabilities. Key competitors include, among six main players in
the North American market, Trinity Industries Inc. (BB+/Stable/--)
and American Railcar Industries Inc. (B+/Stable/--)," S&P said.
"Demand for new freightcars is highly cyclical (tied to railroads,
shippers, and equipment lessors' capital spending, and to economic
conditions), which we expect will continue to result in supply-
demand imbalances and periods of overcapacity. This results in a
price competition and large swings in orders, revenues, and
profitability over the cycle. The company's profitability is
also somewhat tied to prices for steel, a primary component of
railcars and barges, which can fluctuate significantly and remain
volatile. The company derives a significant portion of its revenue
and backlog from a few major customers, including BNSF Railway Co.
(BBB+/Stable/--), General Electric Railcar Services Corp. (not
rated), and Union Pacific Railroad Co. (A-/Stable/--). Such
dependence on key customers and the commoditized nature of certain
railcar types limit Greenbrier's pricing power," S&P said.
"Geographic diversity is limited, with only about 11% of
Greenbrier's revenues coming from outside the U.S. Greenbrier
benefits from its relatively more stable refurbishment and parts
business, which it expanded through several acquisitions, and from
a relatively small lease fleet of about 11,000 railcars that helps
diversify its operations, as does its management services for
approximately 219,000 railcars. These also provide higher margins
than the manufacturing unit, but leasing operations can result in
large swings in cash flow generation depending on the timing of
the build-up and replacement cycle of the fleet," S&P said.
"New railcar demand has weakened somewhat in recent quarters, but
it remains relatively sound entering 2013. Energy-infrastructure
continues to provide for a robust demand base, especially in the
tank car segment, and offset softer segments. Nonetheless, we
expect overall demand will continue to correlate with the
prevalent economic conditions in the U.S. We assume industry
orders of 45,000 to 50,000 units next year, based on our GDP
forecasts for continued slow growth in the U.S. economy.
Greenbrier's backlog as of Aug. 31, 2012, was about $1.2 billion.
This provides some visibility for revenues in fiscal 2013. We
expect the stronger pricing of cars in the backlog to largely
offset lower production volumes. However, manufacturing margins
have been and will likely remain, in our view, somewhat weaker
than peers," S&P said.
"We characterize Greenbrier's financial risk profile as
'aggressive.' The company's total debt to EBITDA as of Aug. 31,
2012, has improved to about 3.2x from more than 5x a year ago and
FFO to total debt was about 25%, compared with more than 5x and
about 15% at year-end 2011. We expect leverage to be relatively
steady based on sustained operating metrics. We expect free cash
flow generation will be positive next year, although it could
remain constrained by lease fleet-related capital spending. These
investments are, however, more discretionary in nature and may be
partially offset by railcar asset sales," S&P said.
"The outlook is stable. We expect credit measures to remain
broadly steady next year. Our rating assumes somewhat lower demand
in the freight railcar industry in 2013 than in 2012, and that
Greenbrier will be able to largely offset the impact of fewer
freightcar deliveries through higher average selling prices.
The rating does incorporate some capacity for moderately higher
leverage, although any substantial increase in debt that happens
in connection with a new ownership structure or a shift in
strategic direction would need to be evaluated accordingly," S&P
said.
"We could lower the rating if industry conditions deteriorate
unexpectedly--for example if total industry orders weaken below
30,000 units or if Greenbrier market share weakens meaningfully
below 15% without the prospect of subsequent improvement, as this
would likely cause leverage to deteriorate beyond 5x debt to
EBITDA," S&P said.
"We could raise the rating by one notch if manufacturing margins
show signs of sustainable structural improvement, if the outlook
for industry fundamentals remains sound, and if we believe that
financial policies will be consistent with a higher rating," S&P
said.
HAWAII OUTDOOR: Dec. 17 Final Hearing on Cash Collateral Use
------------------------------------------------------------
Judge Robert J. Faris in Honolulu gave his stamp of approval on
the request of Hawaii Outdoor Tours Inc., to use cash tied to its
pre-bankruptcy secured obligations.
Specifically, Hawaii Outdoors will have interim authority to use
the cash collateral of First-Citizens Bank & Trust Company, a
North Carolina commercial bank, and the State of Hawaii,
Department of Taxation, a junior secured creditor, until a final
hearing on Dec. 17. The cash collateral consists of accounts
receivables, rent, inventory and related proceeds. The Debtor
intends to use cash collateral to pay reasonable and ordinary
expenses, including employee wages, rent, insurance and taxes.
As of Aug. 3, the total amount owed to the bank is $9,948,627,
while the taxing authority has a claim of $459,873.
The Debtor is proposing to pay the principal amount of the bank
debt ($9,476,387) at the contract rate of 6.5% commencing Dec. 20
and on the 20th of each month thereafter until the use of cash
collateral is terminated.
The Debtor also will grant its secured creditors replacement liens
in exchange for the use of the cash collateral. The Debtor also
promises to file its schedules of assets and liabilities, and
statement of financial affairs by Dec. 5; and file a motion
seeking to obtain a bankruptcy loan by Dec. 16.
About Hawaii Outdoor Tours
Hawaii Outdoor Tours Incorporated, operator of the Niloa Volcanoes
Resort in Hilo, Hawaii, filed a Chapter 11 petition (Bankr. D.
Haw. Case No. 12-02279) in Honolulu on Nov. 20, 2012. Niloa
Volcanoes is a 382-room hotel with a nine-hole golf course. The
64-acre property is subject to a 65-year lease, commencing Feb. 1,
2006, and provides for a total ground rent for the first 10 years
of $500,000 annually. The Debtor used a $10 million loan from
First Regional Bank and $10 million of its own cash to invest in
the property.
First Citizens Bank & Trust Company, which acquired the First
Regional note from the Federal Deposit Insurance Corp., commenced
foreclosure proceedings in August. First Citizens asserts a claim
of $9.95 million. The Debtor believes that the value of the hotel
property exceeds the amount of the First-Citizens note. Just the
bricks and mortal alone was valued in excess of $35 million by
First Regional's appraiser and the insurance company.
Bankruptcy Judge Robert J. Faris oversees the case. Wagner Choi &
Verbugge acts as bankruptcy counsel.
In its petition, the Debtor estimated $10 million to $50 million
in both assets and debts. The petition was signed by CEO Kenneth
Fujiyama.
HAWAII OUTDOOR: Has Interim Okay to Hire Wagner Choi as Counsel
---------------------------------------------------------------
Hawaii Outdoor Tours Inc. won interim permission from the
Bankruptcy Court to employ Wagner Choi & Verbrugge as Chapter 11
counsel on an interim basis.
The Court will hold a final hearing Dec. 17 at 10:30 a.m. on the
engagement.
The Debtor will pay the firm at these rates:
James A. Wagner $480
Chuck C. Choi $350
Neil J. Verbrugge $275
Allison A. Ito $220
Paralegals $75
James A. Wagner, Esq., attests his firm has no connection with the
Debtor, the creditors, or any other party in interest; and that
his firm qualifies as a "disinterested person" as that term is
defined in 11 U.S.C. Sec. 101(14).
Mr. Wagner disclosed that within the one year period prior to the
bankruptcy, the firm received $93,500 from the Debtor for services
rendered prepetition, including work in anticipation of the
bankruptcy filing, and consulting services. From the retainer
funds, the firm paid $18,500 to the Hallstrom Group Inc., as
retainer for consulting services. The firm holds a retainer
balance of $39,498 as of the petition date.
About Hawaii Outdoor Tours
Hawaii Outdoor Tours Incorporated, operator of the Niloa Volcanoes
Resort in Hilo, Hawaii, filed a Chapter 11 petition (Bankr. D.
Haw. Case No. 12-02279) in Honolulu on Nov. 20, 2012. Niloa
Volcanoes is a 382-room hotel with a nine-hole golf course. The
64-acre property is subject to a 65-year lease, commencing Feb. 1,
2006, and provides for a total ground rent for the first 10 years
of $500,000 annually. The Debtor used a $10 million loan from
First Regional Bank and $10 million of its own cash to invest in
the property.
First Citizens Bank & Trust Company, which acquired the First
Regional note from the Federal Deposit Insurance Corp., commenced
foreclosure proceedings in August. First Citizens asserts a claim
of $9.95 million. The Debtor believes that the value of the hotel
property exceeds the amount of the First-Citizens note. Just the
bricks and mortal alone was valued in excess of $35 million by
First Regional's appraiser and the insurance company.
Bankruptcy Judge Robert J. Faris oversees the case. Wagner Choi &
Verbugge acts as bankruptcy counsel.
In its petition, the Debtor estimated $10 million to $50 million
in both assets and debts. The petition was signed by CEO Kenneth
Fujiyama.
HAWKER BEECHCRAFT: Court Approves Plan Disclosures
--------------------------------------------------
Hawker Beechcraft, Inc. (Hawker Beechcraft) disclosed the
Disclosure Statement filed in connection with the company's Joint
Plan of Reorganization (POR) has been approved by the U.S.
Bankruptcy Court for the Southern District of New York. Court
approval of the adequacy of the Disclosure Statement allows Hawker
Beechcraft to begin soliciting approval of the POR from its
creditors. The POR is supported by the Official Committee of
Unsecured Creditors, and holders of a majority of the obligations
under the company's prepetition credit facility and senior
unsecured bonds have also committed to support it.
The voting process will be completed by Jan. 22, 2013, and the
company will seek approval from the Court to exit bankruptcy at
the confirmation hearing scheduled for Jan. 31, 2013.
Upon its emergence from Chapter 11, the company plans to enter
into a new financing facility of at least $525 million, consisting
of a term loan and a revolving line of credit, that will be used
to repay the debtor-in-possession (DIP) post-petition credit
facility, issue letters of credit to replace the DIP and fund
ongoing operations.
As part of its reorganization, the company intends to rename
itself Beechcraft Corporation and implement a business plan that
focuses on its turboprop, piston, special mission and
trainer/attack aircraft - the company's leading products - and on
its parts, maintenance, repairs and refurbishment businesses, all
of which are profitable and have high growth potential.
Hawker Beechcraft's legal representative is Kirkland & Ellis LLP;
its financial advisor is Perella Weinberg Partners LP; and its
restructuring advisor is Alvarez & Marsal. The Ad Hoc Committee of
Senior Secured Lenders' legal representative is Wachtell Lipton
Rosen & Katz. Credit Suisse serves as agent for the lenders under
Hawker Beechcraft's secured pre-petition and debtor-in-possession
credit facilities. Credit Suisse' legal representative is Sidley
Austin LLP and its financial advisor is Houlihan Lokey. The
Unsecured Creditors Committee's legal representative is Akin Gump
Strauss Hauer & Feld LLP and its financial advisor is FTI
Consulting, Inc.
About Hawker Beechcraft
Hawker Beechcraft Acquisition Company, LLC, headquartered in
Wichita, Kansas, manufactures business jets, turboprops and piston
aircraft for corporations, governments and individuals worldwide.
Hawker Beechcraft reported a net loss of $631.90 million on
$2.43 billion of sales in 2011, compared with a net loss of
$304.30 million on $2.80 billion of sales in 2010.
Hawker Beechcraft Inc. and 17 affiliates filed for Chapter 11
reorganization (Bankr. S.D.N.Y. Lead Case No. 12-11873) on May 3,
2012, having already negotiated a plan that eliminates $2.5
billion in debt and $125 million of annual cash interest expense.
The plan will give 81.9% of the new stock to holders of $1.83
billion of secured debt, while 18.9% of the new shares are for
unsecured creditors. The proposal has support from 68% of secured
creditors and holders of 72.5% of the senior unsecured notes.
Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and
49%-owned by Onex Corp. The Company's balance sheet at Dec. 31,
2011, showed $2.77 billion in total assets, $3.73 billion in total
liabilities and a $956.90 million total deficit. Other claims
include pensions underfunded by $493 million.
Hawker's legal representative is Kirkland & Ellis LLP, its
financial advisor is Perella Weinberg Partners LP and its
restructuring advisor is Alvarez & Marsal. Epiq Bankruptcy
Solutions LLC is the claims and notice agent.
Sidley Austin LLP serves as legal counsel and Houlihan Lokey
Howard & Zukin Capital Inc. serves as financial advisor to the DIP
Agent and the Prepetition Agent.
Wachtell, Lipton, Rosen & Katz represents an ad hoc committee of
senior secured prepetition lenders holding 70% of the loans.
Milbank, Tweed, Hadley & McCloy LLP represents an ad hoc committee
of holders of the 8.500% Senior Fixed Rate Notes due 2015 and
8.875%/9.625% Senior PIK Election Notes due 2015 issued by Hawker
Beechcraft Acquisition Company LLC and Hawker Beechcraft Notes
Company. The members of the Ad Hoc Committee -- GSO Capital
Partners, L.P. and Tennenbaum Capital Partners, LLC -- hold claims
or manage accounts that hold claims against the Debtors' estates
arising from the purchase of the Senior Notes. Deutsche Bank
National Trust Company, the indenture trustee for senior fixed
rate notes and the senior PIK-election notes, is represented by
Foley & Lardner LLP.
An Official Committee of Unsecured Creditors appointed in the case
has selected Daniel H. Golden, Esq., and the law firm of Akin Gump
Strauss Hauer & Feld LLP as legal counsel. The Committee's
financial advisor is FTI Consulting, Inc.
On June 30, 2012, Hawker filed its Plan, which proposed to
eliminate $2.5 billion in debt and $125 million of annual cash
interest expense. The plan would give 81.9% of the new stock to
holders of $1.83 billion of secured debt, while 18.9% of the new
shares are for unsecured creditors. The proposal has support from
68% of secured creditors and holders of 72.5% of the senior
unsecured notes.
In July 2012, Hawker disclosed it was in exclusive talks with
China's Superior Aviation Beijing Co. for the purchase of Hawker's
corporate jet and propeller plane operations out of bankruptcy for
$1.79 billion.
In October 2012, Hawker unveiled that those talks have collapsed
amid concerns a deal with Superior wouldn't pass muster with a
U.S. government panel and other cross-cultural complications.
Sources told The Wall Street Journal that Superior encountered
difficulties separating Hawker's defense business from those units
in a way that would make both sides comfortable the deal would get
U.S. government clearance. The sources told WJS the defense
operations were integrated in various ways with Hawker's civilian
businesses, especially the propeller plane unit, in ways that
proved difficult to untangle.
Thereafter, Hawker said it intends to emerge from bankruptcy as an
independent company. On Oct. 29, 2012, Hawker filed a modified
reorganization plan and disclosure materials. Hawker said the
plan was supported by the official creditors' committee and by a
"substantial majority" of holders of the senior credit and a
majority of holders of senior notes. Hawker said it will either
sell or close the jet-manufacturing business.
The revised plan still offers 81.9% of the new stock in return for
$921 million of the $1.83 billion owing on the senior credit.
Unsecured creditors are to receive the remaining 18.9% of the new
stock. Holders of the senior credit will receive 86% of the new
stock. The senior credit holders are projected to have a 43.1%
recovery from the plan. General unsecured creditors' recovery is
a projected 5.7% to 6.3%. The recovery by holders of $510 million
in senior notes is predicted to be 9.2% to 10%.
HEARTLAND DENTAL: Moody's Assigns 'B2' CFR; Outlook Stable
----------------------------------------------------------
Moody's Investors Service assigned B2 Corporate Family and
Probability of Default ratings to Heartland Dental Care, LLC. At
the same time, Moody's assigned a B1 rating to the company's
proposed first lien senior secured credit facilities, including a
$450 million term loan and a $100 million revolving credit
facility. Moody's also assigned a Caa1 rating to the company's
proposed $200 million second lien senior secured term loan. The
proceeds from the senior secured credit facilities will be used,
along with an additional equity contribution, to finance the
acquisition of Heartland by Ontario Teachers' Pension Plan Board
("OTPP"). The outlook for the ratings is stable.
This is the first time Moody's has publicly rated Heartland Dental
Care.
Moody's assigned the following ratings:
$100 million 1st lien senior secured revolving credit facility,
rated B1 (LGD 3, 34%)
$450 million 1st lien senior secured term loan, rated B1 (LGD
3, 34%)
$200 million 2nd lien senior secured term loan, rated Caa1 (LGD
5, 86%)
Corporate Family Rating, B2
Probability of Default Rating, B2
The outlook is stable.
The ratings are subject to review of final documantation.
Ratings Rationale
"Heartland's B2 Corporate Family Rating reflects the company's
small absolute size based on revenue and earnings, high financial
leverage, and modest interest coverage relative to other single-B
rated companies," stated Moody's Analyst, Daniel Gon‡alves.
However, Heartland's credit profile benefits from its market
position as the largest dental service organization in the U.S.,
good diversity across services and geographies, positive same
store sales growth, and favorable long-term trends within the DSO
industry," continued Gon‡alves.
On a pro forma basis for the twelve months ended September 30,
2012, Heartland's debt to EBITDA including Moody's Standard
Adjustments was high at approximately 6.2 times. However, Moody's
expects the near-term reduction of financial leverage will remain
largely within the company's control, depending on the pace and
magnitude of the company's growth strategy. While Moody's views
Heartland's base business as stable, the company is likely to
pursue an aggressive acquisition and de novo growth strategy over
the intermediate-term. The ratings are also constrained by the
high degree of regulatory oversight, given the company's operation
under a corporate integrity agreement (CIA).
The rating outlook is stable, and reflects Moody's assumption that
the company's acquisition and de novo growth strategy will be
financed predominantly through internally-generated cash flow. The
stable outlook also reflects Moody's assumption of low-to-mid
single digit same store revenue and earnings growth and Moody's
expectation that the company will improve financial leverage to
below 6.0 times on a Moody's adjusted basis by the end of 2013.
A downgrade could occur if Moody's come to believe that the
company is unlikely to reduce leverage to below 6.0 times by the
end of 2013 on a Moody's adjusted basis, if free cash flow turns
negative, or if liquidity deteriorates. This could occur if
Heartland experiences slower same-store sales growth, or if the
company fails to reduce the recent aggressive pace of acquisition
activity. The ratings could also be lowered if the company faces
any material adverse legal or regulatory event.
An upgrade of the ratings is unlikely over the near-term due to
the company's small absolute size, high degree of regulatory
oversight, and aggressive acquisition and de novo growth strategy,
which Moody's expects will limit debt repayment. Over time, if the
company exhibits sales growth accompanied by a more moderate
growth strategy such that adjusted leverage is sustained below 4.0
times and free cash flow to debt exceeds 8%, Moody's could upgrade
the ratings.
Headquartered in Effingham, Illinois, Heartland Dental Care
("Heartland") is the largest dental support services business in
the United States, both by revenue and number of offices. The
company provides support staff and comprehensive business support
functions under management service agreements (MSA) to its
affiliated dental practices, organized as professional
corporations ("PCs"). Under the MSAs, Heartland provides all
services necessary for the administration of the non-clinical
aspects of the dental operations, while the affiliated practices
are responsible for providing dental care to patients. In addition
to providing dental facilities (leased from third parties), dental
supplies and support staff to the affiliated practices, Heartland
also assists staff recruitment and training, quality assurance,
facilities management, employee benefits administration,
information systems and technology, marketing, and financial
planning and reporting. As of September 30, 2012, Heartland was
affiliated with 381 locally-branded dental offices, supporting 544
dentists across 21 states. During the twelve months ended
September 30, 2011, the company generated net revenue of
approximately $540 million.
The principal methodology used in rating Heartland Dental Care,
LLC was the Global Business & Consumer Service Industry Rating
Methodology Industry Methodology published in October 2010. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
HOLLYWOOD FILM: Files Schedules of Assets and Liabilities
---------------------------------------------------------
Hollywood Film Company has filed with the Bankruptcy Court its
schedules of assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ------ -----------
A - Real Property $0
B - Personal Property $457,104
C - Property Claimed as Exempt
D - Creditors Holding
Secured Claims $0
E - Creditors Holding Unsecured
Priority Claims $0
F - Creditors Holding Unsecured
Nonpriority Claims $1,227,847
------ -----------
Total $457,104 $1,227,847
In its petition, the Debtor estimated less than $500,000 in assets
and under $50 million in liabilities.
Based in Sun Valley, Calif., Hollywood Film Company, aka Hollywood
Film Company, HAV Holdings, Inc. & Subsidiaries, filed a Chapter
11 petition (Bankr. C.D. Calif. Case No. 12-19922) on Nov. 9,
2012. The Debtor said that it opted to pursue a Chapter 11
restructuring due to the continuing deterioration of the economy
and the inability of the Debtor to pay its obligations as they
come due.
Bankruptcy Judge Maureen Tighe oversees the case. The Law Offices
of Jeffrey A. Kopczynski, Esq., serves as the Debtor's counsel.
The petition was signed by Vincent J. Carabello, president.
HOLLYWOOD FILM: Files List of 17 Largest Unsecured Creditors
------------------------------------------------------------
Hollywood Film Company has filed with the Bankruptcy Court a list
of its 20 largest unsecured creditors:
Entity Type of Claim Claim Amount
------ ------------- ------------
Rio America Trading Corp. Contract $358,464
c/o Robert A. Rivas
1 MacArthur Plaza, Suite 200
Santa Ana, CA 92707
Robert A. Rivas, Esq.
Tel: 714-852-6800
FujiFilm Contract $326,209
c/o Alan L. Brodkin & Assoc.
15500 B Rockfield Blvd.
Irvine, CA 92618
Alan L. Brodkin, Esq.
Tel: 949-457-8608
AGFA Contract $252,431
c/o Kopelowitz & Assoc
12702 Via Cortina, Suite 700
DelMar, CA 92014
Jay S. Kopelowitz, Esq.
Tel: 877-755-7997
Young Properties Rent $129,900
355 N. Lantana St.
PMB 377
Camarillo, CA 93010
American Express Vendor $34,091
Rose Snyder and Jacobs CPA $39,775
Air Wings Freight forwarder $13,757
Anthem Blue Cross Medical $3,273
Tiger Direct Vendor $2,863
Mariam Goodman Gallery Vendor $4,672
Maas Hanson Steel Vendor $16,342
Los Angeles DWP Utilities $22,194
F&S Management Management $2,282
Phillips66Conoco76 Vendor $8,893
Tri Star Plastics Vendor $6,459
Lisa L. Maki, Esq. Contract $5,456
Job Shop Web Design Vendor $780
Hollywood Film Company filed a Chapter 11 petition (Bankr. C.D.
Calif. Case No. 12-19922) on Nov. 9, 2012. The Debtor estimated
less than $500,000 in assets and at least $1 billion in
liabilities. The Debtor said that it opted to pursue a Chapter 11
restructuring due to the continuing deterioration of the economy
and the inability of the Debtor to pay its obligations as they
come due.
HOSTESS BRANDS: Suppliers Won't be Sued for Preferences
-------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that in Hostess Brands Inc.'s liquidation, thanks to a
settlement between the creditors' committee and secured lenders,
suppliers' are being given one small benefit: they won't be sued.
According to the report, liquidation means suppliers lost a
customer and won't recover what they were owed when the baker of
Wonder bread sought Chapter 11 protection in January. Adding
insult to injury, liquidation ordinarily is followed by the
commencement of so-called preference suits to recover payments
suppliers received in the last 90 days before bankruptcy. For
suppliers, the only fortunate aspect of the Hostess liquidation is
that they won't be sued for preferences.
The report relates that the official creditors' committee
negotiated a settlement with first-, third- and fourth-lien
secured lenders where they agreed no suppliers will be sued for
preferences or fraudulent transfers. In return, the committee
agreed to the validity of the lenders' liens. In addition, the
lenders will make $1 million available from their collateral for
distribution to workers who lost their jobs.
The report notes that although the financing arrangements for the
Chapter 11 case allowed the committee's lawyers to charge only
$75,000 for investigating the validity of secured claims, the
settlement agreement allows committee professionals to be paid
$660,000 for the investigation.
The release of preference claims will become final if there are no
objections by Dec. 13.
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. DHostess Brands disclosed
assets of $982 million and liabilities of $1.43 billion as of the
Chapter 11 filing.
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).
In the new Chapter 11 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.
The official committee of unsecured creditors 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.
Hostess Brands in mid-November opted to pursue the orderly wind
down of its business and sale of its assets after the Bakery,
Confectionery, Tobacco and Grain Millers Union (BCTGM) commenced a
nationwide strike. The Debtor failed to reach an agreement with
BCTGM on contract changes. Hostess Brands said it intends to
retain approximately 3,200 employees to assist with the initial
phase of the wind down. Employee headcount is expected to decrease
by 94% within the first 16 weeks of the wind down. The entire
process is expected to be completed in one year.
The bankruptcy judge signed a formal order on Nov. 30 giving final
approval to wind-down procedures. The latest budget projects the
$49 million loan for the Chapter 11 case being paid down to
$21.2 million by Feb. 22.
HOSTESS BRANDS: CEO Rayburn's Pay Subject to Court Approval
-----------------------------------------------------------
Hostess Brands Inc. issued a statement to clarify recent reports
about Chairman and CEO Gregory Rayburn's compensation.
Mr. Rayburn is a retained professional in the Company's bankruptcy
proceedings and, as such, his compensation is subject to the final
approval of the Court. Since Mr. Rayburn is not a Hostess
employee, he receives no health or other benefits. Similarly, he
is not included in any incentive plans that have been approved by
the Court for the wind down of the Company.
Mr. Rayburn remains committed to leading the wind down efforts,
including the marketing of the Company's assets, in order to
maximize value for all stakeholders, including employees.
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. DHostess Brands disclosed
assets of $982 million and liabilities of $1.43 billion as of the
Chapter 11 filing.
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).
In the new Chapter 11 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.
The official committee of unsecured creditors 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.
Hostess Brands in mid-November opted to pursue the orderly wind
down of its business and sale of its assets after the Bakery,
Confectionery, Tobacco and Grain Millers Union (BCTGM) commenced a
nationwide strike. The Debtor failed to reach an agreement with
BCTGM on contract changes. Hostess Brands said it intends to
retain approximately 3,200 employees to assist with the initial
phase of the wind down. Employee headcount is expected to decrease
by 94% within the first 16 weeks of the wind down. The entire
process is expected to be completed in one year.
INFUSYSTEM HOLDINGS: Has New $36.5 Million Credit Facility
----------------------------------------------------------
InfuSystem Holdings, Inc., has replaced and refinanced its
$35 million bank facility with a new $36.5 million credit
facility, in order to provide additional financial and operational
flexibility.
On Nov. 30, 2012, the Company, advised by Houlihan Lokey, entered
into a $36.5 million, four-year senior secured credit agreement
with Wells Fargo Bank, N.A., and funds managed by PennantPark
Investment Advisers, LLC. The new credit facility is comprised of
an asset based loan revolver, Senior Term Loan, and Junior Term
Loan bearing interest at a floating rate, which is currently
9.25%, substantially below the cost of the prior credit facility
as amended.
"This new credit facility, developed in partnership with two
preeminent financial lending institutions, optimizes our ability
to execute our strategic business plan," said InfuSystem's Interim
chief executive officer, Dilip Singh. "It also represents another
significant milestone in the reshaping of InfuSystem, and reflects
the solid foundation the Company has established since the current
leadership assumed full control of the Company during the second
quarter of 2012."
On Nov. 14, 2012, the Company reported that it had returned to
profitability in the third quarter ended Sept. 30, 2012.
Jonathan Foster, InfuSytem's chief financial officer, noted that
the new credit facility will further strengthen the balance sheet.
"We were able to obtain the new loan on competitive terms well
ahead of the prior facility expiring on July 1, 2013, and expect
to reduce our scheduled principal loan payments by approximately
$2.1 million on an annual basis, further enhancing operational
cash flow."
About InfuSystem Holdings
InfuSystem Holdings, Inc., operates through operating
subsidiaries, including InfuSystem, Inc., and First Biomedical,
Inc. InfuSystem provides infusion pumps and related services.
InfuSystem provides services to hospitals, oncology practices and
facilities and other alternate site healthcare providers.
Headquartered in Madison Heights, Michigan, InfuSystem delivers
local, field-based customer support, and also operates pump
service and repair Centers of Excellence in Michigan, Kansas,
California, and Ontario, Canada.
After auditing the Company's 2011 financial statements, Deloitte &
Touche LLP, in Detroit, Michigan, said that the possibility of a
change in the majority representation of the Board and consequent
event of default under the Credit Facility, which would allow the
lenders to cause the debt of $24.0 million to become immediately
due and payable, raises substantial doubt about the Company's
ability to continue as a going concern.
The Company reported a net loss of $45.44 million in 2011,
compared with a net loss of $1.85 million in 2010.
The Company's balance sheet at Sept. 30, 2012, showed $74.02
million in total assets, $34.68 million in total liabilities and
$39.33 million in total stockholders' equity.
INNOVARO INC: Receives Delisting Notice From NYSE MKT
-----------------------------------------------------
Innovaro, Inc. has received notice, dated Dec. 4, 2012, that the
NYSE MKT LLC intends to proceed with an application to the United
States Securities and Exchange Commission to remove the Company's
common stock from listing on the NYSE MKT. This determination,
which the Company intends to appeal, was made in light of the NYSE
MKT's position that the Company is not in current compliance with
certain standards for continued listing on the NYSE MKT.
Specifically, the NYSE MKT believes that the Company is not in
compliance with the following sections of the NYSE MKT Company
Guide:
-- Section 1003(a)(ii) of the NYSE MKT Company Guide in that the
Company reported stockholders' equity of less than $4,000,000 at
September 30, 2012 and losses from continuing operations and/or
net losses in its three out of its four most recent fiscal years
ended December 31, 2011;
-- Section 1003(a)(iii) of the NYSE MKT Company Guide in that the
Company reported stockholders' equity of less than $6,000,000 at
June 30, 2012 and had losses from continuing operations and/or net
losses in each of its five consecutive fiscal years ended December
31, 2011; and
-- Section 1003(a)(iv) of the NYSE MKT Company Guide in that the
Company has sustained losses which are so substantial in relation
to its overall operations or its existing financial resources, or
its financial condition has become so impaired that it appears
questionable, in the opinion of the NYSE MKT, that the Company
will be able to continue operations and/or meet its obligations as
they mature.
In accordance with Sections 1009(d) and 1203 of the NYSE MKT
Company Guide, the Company plans to appeal the NYSE MKT's
determination by requesting a hearing before a Listing
Qualifications Panel. There can be no assurance that the
Company's request for continued listing will be granted or that,
if granted, the Company will be able to continue to meet the
minimum listing requirements.
About Innovaro, Inc.
Innovaro -- http://www.innovaro.com/-- offers services and
software to ensure the success of any innovation project,
regardless of the size or intent. The Company's unique
combination of consulting services provides innovation expertise,
its new LaunchPad software product provides an integrated
innovation environment, and Intelligence and Insights services
provide businesses the innovation support to drive success
JAMES RIVER: Moody's Cuts CFR/PDR to 'Caa1'; Outlook Negative
-------------------------------------------------------------
Moody's Investors Service downgraded James River Coal Company's
Corporate Family Rating ("CFR") and Probability of Default Rating
("PDR") to Caa1 from B3, and the senior unsecured notes rating to
B3 from B2. The downgrades reflects weakening credit protection
metrics as a result of a very difficult environment facing coal
producers in Central Appalachia and Moody's view that the
company's earnings and cash flow profile will remain challenged in
the near-term. The rating outlook remains negative.
"James River is dealing with a combination of cost escalation due
to increasing regulatory scrutiny and weak pricing due in part to
low natural gas prices. While the company has taken positive
actions to reposition its operations and shore up its balance
sheet, as described on the third quarter earnings call, we expect
external factors will preclude it from maintaining credit measures
consistent with the B3 rating level," said Moody's analyst Ben
Nelson. Moody's estimates financial leverage near the mid 6 times
adjusted debt/EBITDA and interest coverage near zero times
EBIT/Interest for the twelve months ended September 30, 2012.
Retained cash flow turned negative in the third quarter and could
remain negative absent an improvement in pricing or substantive
operational adjustment. However, the company reported $171 million
of available liquidity at September 30, 2012 comprised of $151
million of balance sheet cash and about $20 million of
availability under its revolver, subject to a springing fixed
charge coverage ratio if available liquidity falls below $35
million. Moody's believes this liquidity position will help the
company navigate through what is expected to be a very challenging
operating environment once again in 2013. The Caa1 CFR and SGL-3
short-term liquidity rating assumes that the company will be able
to make the necessary operational adjustments to maintain at least
$75 million of available liquidity. Moody's believes these
adjustments could include a meaningful reduction in production,
including shutting in higher-cost mines, if coal prices do not
start to evidence signs of improvement over the next six months.
Separately, Moody's appended an /LD designation to James River's
Caa1 PDR. This designation reflects the view that recent debt
repurchases, though a net positive for James River's credit
profile, qualify as a limited default under Moody's definition of
default. Moody's definition of default is intended to capture
events whereby issuers fail to meet debt service obligations
outlined in their original debt agreements. The debt repurchases
do not constitute an event of default under any of the company's
debt agreements.
The actions:
Issuer: James River Coal Company
Corporate Family Rating, Downgraded to Caa1 from B3
Probability of Default Rating, Downgraded to Caa1 from B3,
/LD designation appended
Senior Unsecured Notes due 2019, Downgraded to B3 (LGD3 39%)
from B2 (LGD3 34%)
Outlook, Negative
Rating Rationale
The Caa1 CFR is principally constrained by weak credit protection
measures and expectations for negative free cash flow over at
least the next few quarters. The rating also reflects a high cost
position, significant exposure to the most challenged coal basin,
unfavorable impact of increasingly stringent government
regulations, and the inherent operating risk and capital intensity
of mining. Some operational and product diversity, margin
opportunity from thermal coal in the Illinois Basin and high-
volatility metallurgical coal in Central Appalachia, and adequate
liquidity support the rating. James River is carrying
significantly more balance sheet cash and has fewer covenant-
related restrictions than at a similarly weak point of the market
in late 2008.
The negative outlook reflects Moody's view that without an
improvement in market conditions the company could consume a
meaningful amount of cash over the next several quarters. Moody's
could downgrade the ratings with expectations for financial
leverage in excess of 10 times or deterioration in liquidity to
below $75 million. Moody's could stabilize the rating outlook or
upgrade the rating with expectations for cash margins well in
excess of maintenance capital requirements and liquidity sustained
well above $100 million.
The principal methodology used in rating James River Coal Company
was the Global Mining Industry Methodology published in May 2009.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
James River Coal Company currently operates 36 mines across eight
coal mining complexes in Central Appalachia and the Illinois
Basin. Headquartered in Richmond, Va., the company generated about
$1.2 billion in revenue for the twelve months ended September 30,
2012.
JOURNAL REGISTER: Wants Plan Exclusivity Until May 3
----------------------------------------------------
Carla Main, substituting for Bloomberg News bankruptcy columnist
Bill Rochelle, reports that Journal Register Co. asked the court
to extend its exclusive right to file a reorganization plan to
May 3. The publisher asked the U.S. Bankruptcy Court in Manhattan
for a deadline of July 2 to solicit creditor support for the plan.
Exclusivity is set to expire Jan. 20.
The report relates that Journal Register and affiliates have spent
the three months since the Sept. 5 Chapter 11 filing "streamlining
their operations, critically assessing their asset portfolio, and
attending to the transitional demands" on the business, Andrew L.
Magaziner, a lawyer for the company, said in a filing.
According to the report, the publisher asked that the exclusivity
motion be heard Dec. 20, when a hearing is planned to consider
approval of sale procedures in the case. Objections to the
exclusivity motion must be filed before Dec. 14.
About Journal Register
Journal Register Company -- http://www.JournalRegister.com/-- is
the publisher of the New Haven Register and other papers in 10
states, including Philadelphia, Detroit and Cleveland, and in
upstate New York. The Company's more than 350 multi-platform
products reach an audience of 21 million people each month. JRC
is managed by Digital First Media and is affiliated with MediaNews
Group, Inc., the nation's second largest newspaper company as
measured by circulation.
Journal Register, along with its affiliates, first filed for
Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No.
09-10769) on Feb. 21, 2009. Attorneys at Willkie Farr & Gallagher
LLP, served as counsel to the Debtors. Attorneys at Otterbourg,
Steindler, Houston & Rosen, P.C., represented the official
committee of unsecured creditors. Journal Register emerged from
Chapter 11 protection under the terms of a pre-negotiated plan.
Journal Register returned to bankruptcy (Bankr. S.D.N.Y. Lead Case
No. 12-13774) on Sept. 5, 2012, to sell the business to 21st CMH
Acquisition Co., an affiliate of funds managed by Alden Global
Capital LLC. The deal is subject to higher and better offers.
Journal Register expects to complete the auction and sale process
within 90 days.
Journal Register exited the 2009 restructuring with $225 million
in debt and with a legacy cost structure, which includes leases,
defined benefit pensions and other liabilities that have become
unsustainable and threatened the Company's efforts for a
successful digital transformation. Journal Register managed to
reduce the debt by 28% with the Company servicing in excess of
$160 million of debt.
Alden Global is the holder of two terms loans totaling $152.3
million. Alden Global acquired the stock and the term loans from
lenders in Journal Register's prior bankruptcy.
Journal Register disclosed total assets of $235 million and
liabilities totaling $268.6 million as of July 29, 2012. This
includes $13.2 million owing on a revolving credit to Wells Fargo
Bank NA.
Bankruptcy Judge Stuart M. Bernstein presides over the 2012 case.
Neil E. Herman, Esq., Rachel Jaffe Mauceri, Esq., and Patrick D.
Fleming, Esq., at Morgan, Lewis & Bockius, LLP; and Michael R.
Nestor, Esq., Kenneth J. Enos, Esq., and Andrew L. Magaziner,
Esq., at Young Conaway Stargatt & Taylor LLP, serve as the 2012
Debtors' counsel. SSG Capital Advisors, LLC, serves as financial
advisors. American Legal Claims Services LLC acts as claims
agent. The petition was signed by William Higginson, executive
vice president of operations.
Otterbourg, Steindler, Houston & Rosen, P.C., represents Wells
Fargo. Akin, Gump, Strauss, Hauer & Feld LLP, represents the
Debtors' Tranche A Lenders and Tranche B Lenders. Emmet, Marvin &
Martin LLP, serves as counsel to Wells Fargo, in its capacity as
Tranche A Agent and the Tranche B Agent.
The Official Committee of Unsecured Creditors appointed in the
case has retained Lowenstein Sandler PC as counsel and FTI
Consulting, Inc. as financial advisor.
KAYE ELIZABETH SANDFORD: Objection to U.S. Bank Claim Overruled
---------------------------------------------------------------
Bankruptcy Judge David T. Thuma granted summary judgment allowing
U.S. Bank's secured claim as filed against Kaye Elizabeth
Sandford's Chapter 11 estate. The claim is based on an $862,500
promissory note secured by a mortgage on the Debtor's house.
After the Debtor signed the note and mortgage, the loan documents
were transferred to a securitized mortgage loan pool. The
Debtor's main argument is that her loan documents were transferred
in violation of the applicable pooling and servicing agreement
between the loan pool trustee and the loan seller.
The creditor's full name is U.S. Bank National Association, as
trustee on behalf of the LXH 2006-2N Trust Fund.
A copy of the Court's Dec. 3, 2012 Memorandum Opinion is available
at http://is.gd/9Iq5UBfrom Leagle.com.
Kaye Elizabeth Sandford filed for Chapter 11 bankruptcy (Bankr. D.
N.M. Case No. 10-14424) on Aug. 30, 2010.
LDK SOLAR: Incurs $136.9 Million Net Loss in Fiscal Q3 2012
-----------------------------------------------------------
LDK Solar Co., Ltd., incurred a net loss available to the
Company's shareholders of US$136.94 million on US$291.52 million
of net sales for the three months ended Sept. 30, 2012, compared
with a net loss available to the Company's shareholders of
US$254.34 million on US$235.36 million of net sales for the
quarter ended June 30, 2012.
LDK Solar's balance sheet at Sept. 30, 2012, showed
US$5.76 billion in total assets, US$5.41 billion in total
liabilities, US$299.02 million in redeemable non-controlling
interests and US$45.91 million in total equity.
"We were pleased to deliver third quarter results that were in
line with expectations," stated Xingxue Tong, President and CEO of
LDK Solar. "While we saw improvement to our top and bottom line
in the third quarter, our results continue to reflect the
industry-wide pricing pressure and demand weakness that is
negatively impacting the entire solar supply chain."
"Over the past several weeks, we have taken a number of steps to
increase operating efficiencies and improve our liquidity,
including realigning the management team and the share purchase
agreement with Heng Rui Xin Energy. We are making progress on our
strategy to streamline operations, prudently manage expenses and
diversify our business. We plan to continue to actively manage
our business to adapt to market developments and position the
company for future growth," concluded Mr. Tong.
A copy of the financial report, as filed with the SEC, is
available for free at http://is.gd/7EpQNa
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.
LEHMAN BROTHERS: Alvarez & Marsal Receives $42 Million Bonus
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Alvarez & Marsal North America LLC, the financial
adviser for Lehman Brothers Holdings Inc., is receiving $42
million in incentive bonuses. The approval order by the
bankruptcy judge states that the firm voluntarily reduced the
bonus.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset
LLC sought for bankruptcy protection in December 2009.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history. The Chapter 11 plan for the Lehman companies other than
the broker was confirmed in December 2011.
Lehman made its first payment of $22.5 billion to creditors in
April 2012 and a second payment of $10.2 billion on Oct. 1. A
third distribution is set for around March 30, 2013. The
brokerage is yet to make a first distribution to non-customers.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates. (http://bankrupt.com/newsstand/or 215/945-700)
LENNY DYKSTRA: Gets 6.5-Month Prison Sentence for Fraud
-------------------------------------------------------
Carla Main, substituting for Bloomberg News bankruptcy columnist
Bill Rochelle, reports that former New York Mets outfielder Lenny
Dykstra received a six and a half-month prison sentence for
looting valuables worth hundreds of thousands of dollars from his
mansion after he had filed for bankruptcy.
According to the report, Mr. Dykstra, 49, was sentenced by U.S.
District Judge Dean D. Pregerson in Los Angeles. The former Major
League Baseball player is already serving a three-year California
state prison term for grand theft auto and a nine-month term for
lewd conduct and assault with a deadly weapon.
The report relates that Mr. Dykstra's federal public defender,
Hilary Potashner, told the judge that drug and alcohol abuse were
behind Mr. Dykstra's string of criminal conduct in the past few
years, including the bankruptcy fraud, his efforts to lease cars
with false business information and attempts to have sex with
women who responded to an ad for a personal assistant.
Mr. Dykstra, the report notes, had been "beaten to a pulp" in
state custody and had his front teeth knocked out because of his
celebrity status, the lawyer said.
Mr. Dykstra, dressed in a white prison jumpsuit, made a short
statement apologizing to the government and his family. "I don't
think I'm a bad person," Mr. Dykstra said. "I'm looking forward
to a new start."
The report relates that the judge said he decided to err on the
side of a short prison term and ordered Dykstra to perform 500
hours of community service. The former baseball player won't
serve the entire three years of his state prison term and is
likely to be released sometime next year.
According to the report, federal prosecutors had asked the judge
to sentence Mr. Dykstra to 2 1/2 years in prison, saying he had
been "trading on his celebrity status" and acted as if he was
above the law.
In July, Dykstra pleaded guilty to bankruptcy fraud, concealment
of bankruptcy property and money laundering. The government
alleged that after he filed for bankruptcy in 2009, he stripped as
much as $400,000 in valuables and fixtures from the $18.5 million
mansion north of Los Angeles he had bought two years earlier from
Hall of Fame hockey player Wayne Gretzky.
According to the government's sentencing recommendation,
Mr. Dykstra, who won the World Series with the Mets in 1986, went
through a cycle of poor business decisions and substance abuse
after his retirement from baseball that eventually left him broke
and imprisoned.
The case is U.S. v. Dykstra, 11-00415, U.S. District Court,
Central District of California (Los Angeles).
About Lenny Dykstra
Lenny Dykstra is a former Major League Baseball all-star player.
He was center fielder for the New York Mets and Philadelphia
Phillies. He filed for Chapter 11 bankruptcy protection (Bankr.
C.D. Calif. Case No. 09-18409) on July 7, 2009, in Woodland Hills,
California. The Law Office of M. Jonathan Hayes, in Northridge,
California, represents the Debtor. The Debtor estimated up to
$50,000 in assets and $10 million to $50 million in debts in his
Chapter 11 petition.
A Chapter 11 trustee was appointed in September 2009, and the case
was converted to a liquidation in Chapter 7 on November 20, 2009.
The trustee -- Arturo M. Cisneros -- was investigating the
disposition of personal property both before and after the Chapter
11 filing.
In August 2010, Mr. Cisneros stepped down as Chapter 7 trustee
following issues with his failing to disclose the extent of his
business with J.P. Morgan Chase & Co., which happens to be largest
creditor in Mr. Dykstra's case.
LODGENET INTERACTIVE: Moody's Cuts CFR to 'Ca'; Outlook Negative
----------------------------------------------------------------
Moody's Investors Services downgraded LodgeNet Interactive Corp's
Corporate Family Rating (CFR) to Ca from Caa1 and changed the
Probability of Default Rating (PDR) to Ca from Caa2. The senior
secured bank credit facility was downgraded to Ca from Caa1. The
outlook remains negative. The reason for the downgrade is due to
continued weak performance, poor liquidity, a violation of its
financial covenants and the expectation for a restructuring of its
balance sheet in the near term.
Since the beginning of 2012, revenue has declined by 12%, 13% and
15% in Q1, Q2, and Q3, respectively. This is a dramatic increase
from revenue declines of 7% in 2010 and 2011. EBITDA over the same
period has declined by 28% in Q1 and Q2, and 29% in Q3. LodgeNet
has violated its financial covenant in its credit facility and is
currently operating under forbearance agreements with its lenders
as well as two of its major vendors that all expire on December
17th, 2012.
LodgeNet has fully drawn the amount available to them on its
revolver facility which matures in April 2013 and has no
additional source of liquidity. The company has been working with
financial advisors and has been in restructuring talks with its
lenders. In addition, there is substantial doubt about the
company's ability to continue as a going concern and the company
has categorized its debt that matures in April 2014 as current. As
a result, it is highly likely that the company will file for
Chapter 11 bankruptcy protection in the near term.
Details of the rating action are as follows:
LodgeNet Interactive Corporation
Corporate Family Rating, downgraded to Ca from Caa1
Probability of Default Rating, downgraded to Ca from Caa2
Senior Secured Bank Credit Facility, downgraded to Ca; LGD3,
45% from Caa1; LGD3, 31%
Speculative Grade Liquidity Rating affirmed at SGL-4
Outlook, remains Negative
Rating Rationale
LodgeNet's Ca CFR reflects the likely restructuring of the
company's balance sheet as well as the overall expected recovery
of the bank debt. The accelerated rate of decline in revenue and
EBITDA during the first three quarters of 2012 and Moody's
expectation that results will continue to be weak going forward is
also reflected in the rating. LodgeNet has lost some of its room
base to cable companies and other service providers and the
secular trends in entertainment have continued to pressure its
Hollywood and adult content entertainment offerings. The violation
of its financial covenants with its lenders and a repayment plan
with two of its vendors leaves the company operating under a
forbearance agreement with both parties that expire on December
17th. As it has a poor liquidity position with no additional
access to its revolver, the company could file for bankruptcy
protection in the near term unless it is able to get an extension
from its lenders and two major vendors. The company is in talks
with a group of lenders and certain third parties regarding
restructuring options, including a potential sale transaction with
a third party that would restructure its balance sheet with a
combination of extended maturities and new equity which would
likely include a Chapter 11 filing.
The company's liquidity position is weak as is reflected in
Moody's SGL-4 rating. The company has violated its leverage ratio
as of Q3 2012 with covenant leverage levels of 4.52x against a 4x
test and is operating under the previously mentioned forbearance
agreement that requires the company to achieve certain minimum
EBITDA levels. Two of its vendors required them to enter into a
payment plan and they are currently operating under a revised
forbearance agreement that requires them to make a combined
payment to the vendors of $26 million on December 17th 2012. The
company has a cash balance of $18.7 million as of Q3 2012 and has
fully drawn its available revolver amount leaving it with no
additional capacity. Without another modification to its
forbearance agreement with its lenders and vendors, the company
could be forced into bankruptcy in the near term.
The outlook of the company is negative given the likely near term
restructuring of its balance sheet. Secular changes impacting its
Guest Entertainment business, including the high levels of rooms
lost due to competition from cable providers, and declining
revenue per room rates are expected to continue. Alternative
entertainment offerings available over the web on travelers'
personal entertainment devices for free or at lower costs have
materially disrupted LodgeNet's traditional operating model.
Given the negative outlook, a positive rating change is not likely
barring a strategic transaction that reduces leverage and puts the
company on a more sustainable operating basis.
In the event of a filing for bankruptcy protection or an
acceleration by lenders or vendors, the rating would be changed to
D and subsequently withdrawn.
LodgeNet Interactive's ratings were assigned by evaluating factors
that Moody's considers relevant to the credit profile of the
issuer, such as the company's (i) business risk and competitive
position compared with others within the industry; (ii) capital
structure and financial risk; (iii) projected performance over the
near to intermediate term; and (iv) management's track record and
tolerance for risk. Moody's compared these attributes against
other issuers both within and outside LodgeNet Interactive's core
industry and believes LodgeNet Interactive's ratings are
comparable to those of other issuers with similar credit risk.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Headquartered in Sioux Falls, South Dakota, LodgeNet Interactive
Corporation (LodgeNet) provides interactive TV services, Network
and Cable TV services, video-on-demand, advertising and video game
entertainment services to the lodging industry and healthcare
facilities. Its revenue for the LTM period ending September 2012
was approximately $379 million.
LON MORRIS: Judge OKs Bankruptcy Loan, Upcoming Auction
-------------------------------------------------------
The Hon. Bill Parker of the U.S. Bankruptcy Court for the Eastern
District of Texas has ruled in favor of the Lon Morris College
bankruptcy estate by giving interim approval for a $500,000
debtor-in-possession loan to help complete the sale of the
school's remaining assets.
The 158-year-old college, Texas' oldest junior college, filed for
bankruptcy protection earlier this year. The bankruptcy estate is
represented by attorney Hugh Ray III and other lawyers from the
Texas offices of McKool Smith. In addition to approving the loan,
the bankruptcy court also cleared the way for an asset auction at
McKool Smith's offices in Dallas on Jan. 14, 2013, when the
majority of the school's 112-acre campus will be sold.
"We are extremely pleased that the Court has approved this loan
and cleared the way for what we believe will be a successful
auction," says Dawn Ragan of Austin, Texas-based Bridgepoint
Consulting, the chief restructuring officer for the school's
bankruptcy estate. "The loan approved today will help maximize
the value of the estate as we work toward satisfying the school's
creditors, which include more than 100 former Lon Morris College
employees who have not yet been paid for their work."
In his decision issued from the bench on Dec. 5, 2012, Judge
Parker denied attempts by the Texas Attorney General's Office to
prevent the bankruptcy estate from securing the debtor-in-
possession loan, which will be used to cover insurance, utilities
and similar expenses, in addition to paying the professionals who
are working to increase the estate's value.
"Today's ruling means the bankruptcy court agrees with our
position that this loan and the upcoming auction are the best
options available to pay the college's creditors by maximizing the
value of the estate's assets," says Mr. Ray, a longtime veteran of
Texas bankruptcy courts. "Our goal is to make sure the creditors
are paid what they're owed, and everyone involved is working hard
to make that happen."
The auction will include approximately 50,000 square feet of
academic lecture halls, dormitory buildings, a technology center,
a gymnasium, and fields for football, baseball and other sports.
A detailed auction listing is online at
http://www.ameribid.com/upcoming-auctions/auction-
detail/?id=192730
Tulsa, Okla.-based AmeriBid is coordinating the auction based on
prior approval by the bankruptcy court.
Auction on Jan. 14
Jay Neal, writing for Jacksonville Daily Progress, reports a
bankruptcy judge for the Eastern District of Texas postponed the
auction of Lon Morris College assets to Jan. 14.
A hearing to approve the sale is set for Feb. 4.
Ben Tinsley also at Jacksonville Daily Progress reports that at
Wednesday's hearing Dawn Ragan, chief restructuring officer for
LMC, and Stephen Karbelk, founder of AmeriBid, testified that area
newspapers are guilty of endangering the upcoming sale of the
estate by publishing negative stories.
The report says Hugh Ray III, attorney for Lon Morris College,
asserted that the Texas Attorney General's Office is guilty of
manipulating the media to create these "negative stories."
During the hearing, the judge also permitted LMC to borrow
$150,000 for now out of a $500,000 loan.
The AG is objecting to the loan. "Two weeks from now the judge
allowed us to retain the right to object to their borrowing the
balance, $350,000," AG Spokesman Thomas Kelley explained after the
hearing, according to the report.
About Lon Morris College
Lon Morris College was founded in 1854 as a not-for-profit
religiously affiliated two-year degree granting institution. Over
the past 158 years, the College has impacted the lives of
countless members of the local Jacksonville community in Texas.
Lon Morris College filed a Chapter 11 petition (Bankr. E.D. Tex.
Case No. 12-60557) in Tyler, on July 2, 2012, after lacking enough
endowments to pay teachers, vendors and creditors. In May 2012,
the Debtor missed two payrolls and vendor payables, utilities, and
long term debt were also past due. From a headcount of 1,070 in
2010, enrolments have been down to 547 in 2012. The president of
the College has resigned, as have members of the board of
trustees.
Judge Bill Parker oversees the case. Bridgepoint Consulting LLC's
Dawn Ragan took over management of the College as chief
restructuring officer. Attorneys at Webb and Associates, and
McKool Smith P.C., serve as counsel to the Debtor. Capstone
Partners serves as financial advisor.
According to its books, on April 30, 2012, the College had roughly
$35 million in assets, including $11 million in endowments and
restricted funds, and $18 million in funded debt and $2 million in
trade and other liabilities. The Debtor disclosed $29,957,488 in
assets and $15,999,058 in liabilities as of the Chapter 11 filing.
Amegy Bank is represented in the case by James Matthew Vaughn,
Esq., at Porter Hedges LLP.
The college has a Chapter 11 plan on file to be funded by a sale
of the properties.
LON MORRIS: Texas AG Sides With Foundation on Endowment Funds
-------------------------------------------------------------
Ben Tinsley also at Jacksonville Daily Progress, reports that
officials with the Texas Attorney General's Office on Monday
reinforced their position that the Lon Morris College bankruptcy
estate should not be allowed to use charitable endowment money to
pay for its Chapter 11 bankruptcy costs.
Officials with the Texas Methodist Foundation filed suit against
Lon Morris College and the attorney general last month to protect
the endowments. The AG's office is being sued in its capacity as
protector of the public interest in charity.
In the Monday response, the report says, the AG expressed complete
agreement that the Lon Morris College bankruptcy estate was in the
wrong in its attempt to liquidate five separate charitable
endowments totaling $265,000.
The AG is also trying to block a $500,000 loan to Lon Morris.
According to the report, the endowments at issue in the suit
include the Faubion Endowment Fund; the Buel N. Kiker and Rhena N.
Kiker Memorial Fund; The Herbert E. Dishman and Family Trust; the
Donald G. and Marjorie L. Willis Fund; and The JL "Bo" Wilson
Scholarship Fund.
The report also relates the AG is investigating $1.3 million
missing from an endowment created by Rusk native Dr. James
"Jimmie" Duncan Long, an educator, philanthropist and Lon Morris
College grad. The endowment should have reverted to Sam Houston
State University after LMC declared bankruptcy. Dr. Miles McCall,
college president from July 2005 until he resigned May 24, was
questioned regarding management of that particular endowment.
About Lon Morris College
Lon Morris College was founded in 1854 as a not-for-profit
religiously affiliated two-year degree granting institution. Over
the past 158 years, the College has impacted the lives of
countless members of the local Jacksonville community in Texas.
Lon Morris College filed a Chapter 11 petition (Bankr. E.D. Tex.
Case No. 12-60557) in Tyler, on July 2, 2012, after lacking enough
endowments to pay teachers, vendors and creditors. In May 2012,
the Debtor missed two payrolls and vendor payables, utilities, and
long term debt were also past due. From a headcount of 1,070 in
2010, enrolments have been down to 547 in 2012. The president of
the College has resigned, as have members of the board of
trustees.
Judge Bill Parker oversees the case. Bridgepoint Consulting LLC's
Dawn Ragan took over management of the College as chief
restructuring officer. Attorneys at Webb and Associates, and
McKool Smith P.C., serve as counsel to the Debtor. Capstone
Partners serves as financial advisor.
According to its books, on April 30, 2012, the College had roughly
$35 million in assets, including $11 million in endowments and
restricted funds, and $18 million in funded debt and $2 million in
trade and other liabilities. The Debtor disclosed $29,957,488 in
assets and $15,999,058 in liabilities as of the Chapter 11 filing.
Amegy Bank is represented in the case by James Matthew Vaughn,
Esq., at Porter Hedges LLP.
The college has a Chapter 11 plan on file to be funded by a sale
of the properties.
MBIA INSURANCE: BofA's CMBS May Be Subordinate in Bankruptcy
------------------------------------------------------------
Carla Main, substituting for Bloomberg News bankruptcy columnist
Bill Rochelle, reports that Bank of America Corp., which bought
protection against losses from MBIA Insurance Corp. on $6 billion
of real estate securities, may see the guarantees become
subordinate to other claims if the unit goes bankrupt,
CreditSights Inc. said.
According to the report, credit-default swaps on the commercial-
mortgage bonds would probably be junior to traditional policies if
regulators are forced to seize MBIA's assets, CreditSights
analysts Rob Haines and Eric Axon said in a report dated Dec. 2.
Regulators could order payments stopped on such junior
obligations, while continuing to allow claims from more senior
policyholders be met, they wrote.
The report relates that MBIA bought back $170 million of notes
last week and got enough support from other bondholders to
complete a debt amendment that shields itself from being dragged
into bankruptcy by the cash-strapped insurance unit that
guarantees the commercial-mortgage backed securities debt. The
changes allowed the insurer to replace MBIA Insurance in the
so-called cross-default provision with its more stable National
Public Finance Corp. that holds the insurer's state and municipal
bond guarantee business.
The report recounts that the insurer created that unit as part of
a split of its businesses that New York State regulators approved
in 2009 to revive the public-finance business. About two dozen
banks and investment firms including Morgan Stanley and Bank of
America sued the insurer and regulators after the split. The
Armonk, New York-based firm turned to bondholders to outmaneuver
Bank of America in legal battles. Bank of America sued MBIA over
a 2009 restructuring that it claims was based on misleading
information.
Chuck Chaplin, MBIA's chief financial officer, said in a telephone
interview on Nov. 6 that Bank of America is delaying progress in
its suit, hoping that a default at the insurance unit under the
cross-default provision in place at the time would provoke a
liquidity crisis at MBIA, bolstering the bank's case.
MBIA, the report also notes, is separately suing Bank of America.
It claims the bank's Countrywide unit misrepresented the quality
of mortgage bundled into securities that MBIA insured. It's
arguing Bank of America must repurchase faulty loans in
residential mortgage-backed securities, and it hasn't, creating a
cash crunch for MBIA Insurance, according to Mr. Chaplin.
Credit swaps on structured-finance securities offer payments if
the debt isn't repaid as scheduled, in return for regular and
upfront insurance-like premiums.
* * *
As reported in the Nov. 21, 2012 edition of the TCR, 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.
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 Sept. 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.
Bank of America 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 Nov. 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 Nov. 13 seeks to
obtain ownership of at least 50% of one series of MBIA notes to
block MBIA's consent solicitation.
MCCLATCHY CO: S&P Keeps B Rating on $910MM Secured Notes Due 2022
-----------------------------------------------------------------
Standard & Poor's Ratings Services said its ratings on Sacramento,
Calif.-based The McClatchy Co. (B-/Stable/--) remain unchanged
following a modification of the size of its debt issue. The 'B'
issue-level rating and '2' recovery rating on the company's 9%
first-lien senior secured notes due 2022 remain unchanged
following the increase to $910 million from $750 million.
"The company will now use issue proceeds to fund the tender of all
of its $846 million 11.5% senior secured notes due 2017 and
related call premium. The transaction slightly increases debt
leverage, though it extends the bulk of 2017 maturities and
reduces interest expense. Near- to medium-term debt maturities are
modest, and consist of the $66 million 4.625% debentures due
November 2014, which we expect will be serviced with discretionary
cash flow. The company does not have subsequent maturities until
2017, when $286 million of debt matures," S&P said.
"The 'B-' rating on The McClatchy Co. reflects our expectation
that its financial profile will remain 'highly leveraged' because
of its ongoing revenue declines resulting from the shift of news
consumption and advertising to digital media, and the company's
exposure to weak economic conditions. Pro forma for the
transaction, lease and pension-adjusted total debt to EBITDA,
adjusted for dividends from minority equity stakes of Internet
joint ventures, increased to 5.9x from an actual level of 5.4x for
the 12 months ended Sept. 23, 2012. Standard & Poor's anticipates
that credit measures will gradually deteriorate because of
continued secular pressure on the business, despite efforts at
cost restructuring and development of new digital revenue," S&P
said.
RATINGS LIST
Ratings Unchanged
The McClatchy Co.
Corporate Credit Rating B-/Stable/--
Senior Secured
$910M* first-lien notes due 2022 B
Recovery Rating 2
*$160M increase from $750M.
MINERVA NATIONAL: Fitch Affirms 'B+' Issuer Default Rating
----------------------------------------------------------
Fitch Ratings has upgraded Minerva's National Scale Ratings to
'BBB+(bra)' from 'BBB(bra)'. At the same time, Fitch has affirmed
at 'B' the Foreign and Local Currency Issuer Default Ratings (IDR)
of Minerva S.A. (Minerva) and Minerva Luxembourg S.A. (Minerva
Luxembourg), a wholly owned subsidiary of Minerva incorporated in
Luxembourg.
The rating actions were prompted by the company's announcement
that it successfully raised BRL470 million in equity. The
proceeds will be used to repay short-term debt and to increase
cash balances, allowing the company to expand its operations more
rapidly during the current favorable operating environment. The
company's position domestically will improve, with Minerva's scale
and financial profile comparing more favorably to its peers and
warrants the upgrade of the national scale ratings to BBB+(bra).
The equity issuance also strengthens Minerva's credit profile
within the 'B+' category for the IDRs.
Minerva's ratings continue to be supported by the company's
business position as the third-largest Brazilian exporter of fresh
beef and its strong liquidity. Fitch acknowledges the credit-
friendly measures taken by the company through its decision to
issue equity to support its operations during the challenging
operating environment in the past, and the current issuance to
support growth.
Pro-forma the equity issuance net leverage will decrease by about
one turn, to 2.7x for the last twelve months (LTM) ended Sept. 30
2012. Minerva's ability to further deleverage will be constrained
by its increased investment program and its sensitivity to the
BRL/USD exchange rate, as about 81% of the company's debt as of
Sept. 31, 2012 is denominated in USD. Per Minerva's estimation,
the total exposure to USD is slightly lower at 74%, due to
existing currency swaps.
The larger scale investing during a positive cycle for the
Brazilian beef sector is both well timed and will improve the
company's business profile. Processed food will increase to about
10% of revenue in 2015, while revenue outside of Brazil will
account for 20% - 25% of total revenue by 2015.
Despite the recent positive developments, the company's profile
remains risky, with high product and production concentration in
Brazil, which limit the company's flexibility to respond to
regional bans on exports. Similar to other Brazilian protein
processors, Minerva is exposed to the risks of unfavorable
currency fluctuations and potential disease outbreaks. The
company is more susceptible to these risks than other leading
competitors in the Brazilian industry; however, exports account
for a higher percentage of its revenue.
Leverage to Remain Stable Through 2013
Fitch expects Minerva's free cash flow generation to be negative
to neutral as a result of the company's recently announced plans
to increase expansion capex and to pursue acquisitions in the
Brazilian states of Mato Grosso, Uruguay, Paraguay and Colombia.
As a result, Fitch estimates that leverage will not change
materially by the end of 2013. The current equity issuance helps
the company to support further investments without deteriorating
its credit metrics.
Further weakening of the Brazilian real may lead to a temporary
increase in Minerva's leverage ratios, due to its large unhedged
exposure to USD through its debt. The scenario of a depreciating
Brazilian real results in an instantaneous increase of total debt
when expressed in Brazilian reais, while EBITDA benefits would
accumulate over a longer period.
Positive Recent Performance
During the LTM ended Sept. 30, 2012, the company delivered strong
operational results. EBITDA, profit margins and cash flow
generation were above expectations, mostly because of a strong
export market, helped by the weaker Brazilian real. However, debt
also increased as a result of the weak real, resulting in a net
debt to EBITDA ratio of 3.8x, which was higher than Fitch's
expectation. Previously, Fitch expected Minerva's net leverage to
decrease to around 3.0x by the end of 2012, a level appropriate
for the rating category during a positive cycle.
For the LTM ending Sept. 30, 2012, Minerva's EBITDA increased by
36% to BRL446 million from BRL328 million during 2011. During the
same period, EBITDA margins increased to 10.5% from 8.2% in 2011.
These improvements fed through to the company's cash flows.
Minerva's cash flow from operations (CFFO) was BRL373 million, a
significant improvement from negative BRL10 million in 2011. Free
cash flow (FCF) was BRL244 million, reversing seven straight years
of negative FCF.
Key Rating Drivers
The ratings are likely to remain stable unless cash flow
generation and leverage ratios trend different than Fitch's
expectations. A positive rating action could be triggered
additional decreases in leverage to about 2.0x in mid cycle. This
level of debt reduction is unlikely to be achieved in the short-
to-medium term.
A negative rating action could occur if net leverage increases to
4.0x on a normalized basis. This could be as a result of either a
large debt financed acquisition or asset purchases, or as a result
of operational deterioration due to disruptions in exports.
Fitch rates the following as indicated:
Minerva:
-- Local currency Issuer Default Rating (IDR) affirmed at 'B+';
-- Foreign currency IDR affirmed at 'B+';
-- National scale rating upgraded to 'BBB(bra)+' from
'BBB(bra)';
-- BRL200 million outstanding debentures due 2015 upgraded to
'BBB+(bra)' from 'BBB(bra)'.
Minerva Luxembourg:
-- Local currency IDR affirmed at 'B+';
-- Foreign currency IDR affirmed at 'B+';
-- Senior unsecured notes due in 2017, 2019 and 2022 affirmed at
'B+/RR4'.
The corporate Rating Outlook is Stable.
MORGAN'S FOODS: Further Amends Remodel Agreement with KFC
---------------------------------------------------------
Morgan's Foods, Inc., on Dec. 9, 2011, entered into a Remodel
Agreement with one of its franchisors KFC Corporation. The
Agreement outlines the required image enhancement activities for
all of the Company's KFC and KFC/Taco Bell 2 in 1 restaurant
facilities. The First Amendment to the Agreement was executed on
June 20, 2012, and served to move one facility from the 2012
calendar year to 2013 and replaced it in 2012 with a different
facility that was previously scheduled in 2013, affecting none of
the material terms of the Agreement. The Agreement outlines the
schedule for remodeling certain restaurants to meet the
franchisor's image requirements through the Company's 2015 fiscal
year and specifies a certain number of remodel activities during
each year thereafter through fiscal 2023.
On Nov. 29, 2012, the Company entered into a Second Amendment to
the Remodel Agreement with KFC Corporation, changing the required
remodel dates for certain of its facilities. The material terms
of the Agreement remain unchanged and the Company is required to
complete the remodeling of five facilities in calendar 2012, which
have been completed, and six facilities in calendar 2013.
About Morgan's Foods
Cleveland, Ohio-based Morgan's Foods, Inc., which was formed in
1925, operates through wholly-owned subsidiaries KFC restaurants
under franchises from KFC Corporation, Taco Bell restaurants under
franchises from Taco Bell Corporation, Pizza Hut Express
restaurants under licenses from Pizza Hut Corporation and an A&W
restaurant under a license from A&W Restaurants, Inc.
As of May 20, 2011, the Company operates 56 KFC restaurants,
5 Taco Bell restaurants, 10 KFC/Taco Bell "2n1's" under franchises
from KFC Corporation and franchises from Taco Bell Corporation,
3 Taco Bell/Pizza Hut Express "2n1's" under franchises from Taco
Bell Corporation and licenses from Pizza Hut Corporation,
1 KFC/Pizza Hut Express "2n1" under a franchise from KFC
Corporation and a license from Pizza Hut Corporation and 1 KFC/A&W
"2n1" operated under a franchise from KFC Corporation and a
license from A&W Restaurants, Inc.
The Company reported a net loss of $1.68 million for the year
ended Feb. 26, 2012, compared with a net loss of $988,000 for the
year ended Feb. 27, 2011.
The Company's balance sheet at Aug. 12, 2012, showed
$52.67 million in total assets, $53.47 million in total
liabilities, and a $800,000 total shareholders' deficit.
NATIONAL SECURITY: A.M. Best Hikes Fincl Strength Rating From 'B'
-----------------------------------------------------------------
A.M. Best Co. has upgraded the financial strength rating (FSR) to
B+ (Good) from B (Fair) and the issuer credit rating to "bbb-"
from "bb+" of National Security Insurance Company (NSIC). The
outlook for both ratings is stable.
A.M. Best also has affirmed the FSR of B++ (Good) and ICR of "bbb"
of National Security Fire and Casualty Company (NSFC). The
outlook for these ratings is negative. In addition, A.M. Best has
affirmed the FSR of B+ (Good) and ICR of "bbb-" of NSFC's wholly
owned subsidiary, Omega One Insurance Company, Inc. (Omega). The
outlook for both ratings is stable.
Concurrently, A.M. Best has affirmed the ICR of "bb" of the parent
holding company, The National Security Group, Inc. (NSGI)
(Wilmington, DE) [NASDAQ: NSEC]. The outlook for this rating is
negative. All companies are domiciled in Elba, AL, unless
otherwise specified.
The rating actions taken on NSIC reflect A.M. Best's belief that
the financial resources of the life company will not be materially
impacted by the Mobile Attic, Inc. lawsuit settlement. These
rating actions also reflect NSIC's favorable stand-alone risk-
adjusted capitalization, modestly increasing capital trends, a
generally conservative fixed-income investment portfolio, which is
currently in a unrealized gain position and its positive -- albeit
modest -- overall net operating performance.
These positive factors are offset by NSIC's limited geographic
profile and the challenges it faces to manage its modest capital
levels, sustain and improve its operating performance and reverse
declining trends in its net premium growth.
Given the recent positive movement on NSIC's ratings, A.M. Best
believes the company is well positioned at its current rating
level. Future positive actions could occur on NSIC's ratings from
positive movement in the parent's ratings. Key rating factors
that could result in negative actions on the company's ratings
include a meaningful erosion of absolute and/or risk-adjusted
capitalization, a deterioration of operating performance below
A.M. Best's expectations or negative movement in the parent and/or
property and casualty affiliates' ratings.
The ratings of NSFC and Omega are reflective of their strong
balance sheets; actions being taken by management to improve
earnings primarily through stricter underwriting standards;
catastrophe exposure management; rate increases; cancellation of
underperforming books of business and refined rate making
capabilities.
These positive rating factors are offset in part by both
companies' exposure to hurricane and other severe weather events
in the South and Southeastern United States; significant
underwriting losses in recent years and relatively high net
retention on their catastrophe reinsurance program. The ratings
also acknowledge the $13.0 million unfavorable settlement in the
Mobile Attic, Inc. litigation earlier in the year and the need for
the insurance operating companies to make dividend payments to
NSGI to fund debt obligations.
The outlook for the ratings of NSFC is negative due to an
unfavorable underwriting trend. Negative rating pressure could
intensify if the company's earnings performance does not improve
or if capitalization is weakened. Pressure could be taken off of
the ratings by a favorable operating trend that leads to capital
appreciation without excessive growth.
NCR CORP: Moody's Cuts CFR to 'Ba2'; Rates New Senior Notes 'Ba3'
----------------------------------------------------------------
Moody's Investors Service has assigned Ba3 ratings to NCR's new
$500 million notes due 2021. Moody's also downgraded NCR
Corporation's ("NCR") corporate family and probability of default
ratings to Ba2 from Ba1. In addition, Moody's downgraded the
ratings on the existing senior unsecured notes to Ba3 from Ba2.
This rating action concludes a review initiated on November 29,
2012, which was prompted by NCR's announcement that is acquiring
Retalix Limited ("Retalix"), for net cash consideration of $650
million, to be funded with a combination of the new debt issuance
and balance sheet cash. The outlook is stable.
Rating Actions:
$500 MM senior unsecured notes due 2021 assigned Ba3, (LGD-4,
62%)
$600 MM senior unsecured notes due 2022 downgraded to Ba3,
(LGD-4, 62%) from to Ba2, (LGD-4, 65%)
Corporate Family Rating downgraded to Ba2 from to Ba1
Probability of Default Rating downgraded to Ba2 from to Ba1
Outlook: Stable
Ratings Rationale
NCR's Ba2 CFR reflects the company's high debt balances relative
to its historic levels, resulting from the debt taken on to close
the Retalix acquisition, to reduce its domestic pension liability
and for the Radiant acquisition in 2011. Further, the Retalix
acquisition will add a layer of execution risk to the management
team still working on integrating the 2011 acquisition of Radiant
Systems. In addition, competitor innovation, challenging
macroeconomic forces and technology changes may impact the sales
of the company's products in the future. The Ba2 rating also
recognizes stable recurring revenue stream from long-term
maintenance contracts that result from the strong global market
position across its core financial self-service and retail store
point of sale businesses, and good geographic and customer
diversification. Additionally, the rating is supported by the
company's expansion into higher growth, higher margin hospitality
product lines and its exit from the underperforming entertainment
business, which was consuming cash. The rating also takes into
account NCR's potential for stable free cash flow generation and a
good liquidity profile.
Despite the higher leverage, the Retalix acquisition is generally
seen as a positive for NCR as it is consistent with management's
stated strategy to broaden the scope and enhance the
competitiveness of its product portfolios. Pro forma for the
acquisition NCR will have over $6 billion in revenue and the
additional scale will provide opportunities to improve operating
margins. The Retalix acquisition strengthens NCR's position in the
retail industry, and builds upon the integration of Radiant
Systems into the NCR portfolio. NCR also expects to use Retalix's
software to accelerate the development of NCR's enterprise
software platform, creating new software modules that can be used
across the company's retail industry offerings and grow a platform
to leverage across NCR's financial, travel and hospitality
industries on a global scale.
What Could Change the Rating - UP
NCR's rating could face upward pressure if the company
successfully integrates recent acquisitions and demonstrates
sustained revenue growth, operating margin improvements and
delivers consistent levels of free cash flow with lower
volatility. The rating could also be considered for an upgrade if
the company maintains adjusted leverage below 3.5 times.
Additionally, NCR would need to continue to execute effectively on
new product and technology introductions as measured by market
share gains in financial, retail and hospitality business segments
across business cycles.
What Could Change the Rating - DOWN
NCR's, ratings could be downgraded if NCR fails to reduce leverage
meaningfully, or should leverage increase above 4.5 times. Ratings
could also face pressure if NCR does not maintain free cash flow
above $200 million a year or does not overcome integration
challenges. Additionally, if operating performance does not
improve as anticipated, due to increased business risk, loss of
market share in key business segments, or a change in NCR's
competitive position, the rating may be downgraded.
The principal methodology used in rating NCR Corporation was the
Global Technology Hardware Industry Methodology published in
September 2010. Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the U.S.,
Canada and EMEA published in June 2009.
NCR CORP: S&P Gives 'BB' Rating on $400MM Senior Notes Due 2020
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' issue-level
rating and '5' recovery rating to Duluth, Ga.-based NCR Corp.'s
$400 million senior notes due 2020. NCR provides hardware,
software, and services solutions to the financial services,
retail, and hospitality sectors. NCR plans to raise $400 million
to help fund its proposed $650 million purchase of Retalix Ltd.
The '5' recovery rating indicates expectations for modest (10% to
30%) recovery of principal in the event of a payment default.
"Our 'BB+' corporate credit rating and stable outlook on NCR is
unaffected by the note issuance. NCR's self-service solutions help
businesses connect, interact, and transact with their customers.
Retalix provides point-of-service (POS) and enterprise resource
planning (ERP) software focused on grocery, convenience and food
distribution and will help solidify NCR's position in the retail
segment. While leverage will increase somewhat from anticipated
levels as a result of the merger, we expect synergies and EBITDA
growth to lead to future declines. The corporate credit rating on
NCR reflects our view of NCR's financial risk profile as
'significant' and its business risk profile as 'satisfactory,'"
S&P said.
RATINGS LIST
NCR Corp.
Corporate Credit Rating BB+/Stable/--
New Rating
NCR Corp.
$400 Mil. Senior Unsecured Notes Due 2020 BB
Recovery Rating 5
NEW PEOPLES: Further Extends Public Offering Until Dec. 20
----------------------------------------------------------
New Peoples Bankshares, Inc., Board of Directors extended the
common stock public offering from Nov. 30, 2012, to Dec. 20, 2012.
At this time the offering cannot be extended past Dec. 31, 2012.
The extension is required due to a requested regulatory approval
which is pending. Assuming the approval is received as requested
and prior to the expiration of the offering and based upon
commitments and subscriptions received to date, the Company
believes it will raise approximately $12 million in the offering,
exceeding the $10 million minimum.
About New Peoples Bankshares
New Peoples Bankshares, Inc., is a Virginia bank holding company
headquartered in Honaker, Virginia. New Peoples subsidiaries
include: New Peoples Bank, Inc., a Virginia banking corporation
(the Bank) and NPB Web Services, Inc., a web design and hosting
company (NPB Web).
The Bank is headquartered in Honaker, Virginia and operates 27
full service offices in the southwestern Virginia counties of
Russell, Scott, Washington, Tazewell, Buchanan, Dickenson, Wise,
Lee, Smyth, and Bland; Mercer County in southern West Virginia and
the eastern Tennessee counties of Sullivan and Washington.
According to the Company's quarterly report for the period ended
June 30, 2012, the Company and the Bank are subject to various
capital requirements administered by federal banking agencies.
"The Bank was well capitalized as of June 30, 2012, as defined by
the capital guidelines of bank regulations, however, the Company
continued to be below the minimum capital requirements as a result
of the Tier 1 leverage ratio decreasing to 3.72%, which was below
the minimum requirement of 4.00%. Subject to the conversion of
the director notes, we expect to return to well-capitalized status
at the holding company level in 2012. The Company's capital as a
percentage of total assets was 3.27% at June 30, 2012, compared to
3.70% at Dec. 31, 2011."
The Company's balance sheet at Sept. 30, 2012, showed $708.21
million in total assets, $680.10 million in total liabilities and
$28.11 million in total stockholders' equity.
NEWLEAD HOLDINGS: To Hold Annual Meeting on Dec. 21
---------------------------------------------------
Newlead Holdings Ltd. will hold its general annual meeting of
shareholders on Dec. 21, 2012, at 11:00 a.m. for the following
purposes:
(1) To receive the directors' report and audited financial
statements of NewLead Holdings for the fiscal year
ended Dec. 31, 2011, together with the auditor's report
thereon.
(2) To reappoint PricewaterhouseCoopers S.A. as auditors of the
Company to hold office from the conclusion of the 2012
annual general meeting until the close of the Company's
next annual general meeting, and to authorize the Board of
Directors to determine the auditors' remuneration.
(3) To elect Michail S. Zolotas as a Class I director to hold
office from the conclusion of the 2012 annual general
meeting until the Company's 2015 annual general meeting.
(4) To approve and authorize the Board of Directors, in
accordance with the Company's By-laws, to effect a
consolidation of the Company's common shares at a ratio of
not less than 1-for-5.0000 and not more than 1-for-15.0000
at any time on or prior to March 12, 2013, with the manner
of implementation, ratio and timing of that consolidation
to be determined by the Board of Directors.
(5) To consider any other business that may be properly
presented at the meeting.
About NewLead Holdings
NewLead Holdings Ltd. -- http://www.newleadholdings.com-- is an
international, vertically integrated shipping company that owns
and manages product tankers and dry bulk vessels. NewLead
currently controls 22 vessels, including six double-hull product
tankers and 16 dry bulk vessels of which two are newbuildings. N
ewLead's common shares are traded under the symbol "NEWL" on the
NASDAQ Global Select Market.
PricewaterhouseCoopers S.A. in Athens, Greece, said in a May 15,
2012, audit report NewLead Holdings Ltd. has incurred a net loss,
has negative cash flows from operations, negative working
capital, an accumulated deficit and has defaulted under its
credit facility agreements resulting in all of its debt being
reclassified to current liabilities. These raise substantial
doubt about its ability to continue as a going concern, PwC said.
The Company reported a net loss of US$290.39 million in 2011,
compared with a net loss of US$86.34 million in 2010.
The Company's balance sheet at Dec. 31, 2011, showed US$396.75
million in total assets, US$599.18 million in total liabilities
and a US$202.43 million total shareholders' deficit.
NEXSTAR BROADCASTING: Completes Acquisition of 10 TV Stations
-------------------------------------------------------------
Nexstar Broadcasting Group, Inc., completed the previously
announced acquisition of 10 television stations and two associated
digital sub-channels in seven markets as well as the Inergize
Digital e-Media operations from entities controlled by privately-
held Newport Television, LLC, for $225.5 million in a transaction
that is expected to be immediately accretive to Nexstar. Nexstar
financed the acquisition through borrowings under its new senior
secured credit facilities, which were consummated concurrent with
the closing of the acquisition.
Perry A. Sook, chairman, president and chief executive officer of
Nexstar Broadcasting Group, Inc., commented, "This transaction
squarely meets our acquisition criteria from both an operating and
financial perspective. The addition of the Newport stations
substantially broadens Nexstar's local television broadcasting
platform with stations that are geographically complementary to
and diversify our operating base while also presenting significant
financial and operating synergies with the Company's existing
portfolio. Inergize Digital, an industry leader offering fully
integrated e-Media management solutions on-air, online and for
mobile devices, brings multi-year contracts with approximately 75
stations and other entities outside of the Nexstar platform and
these operations dovetail well and will be integrated with
Nexstar's existing e-Media and GoLocal.biz platforms."
Newport Television Stations to be Acquired by
Nexstar Broadcasting Group
Market Market Rank Station Affiliation
------------------ ----------- ------- -----------
1 Salt Lake City, UT 33 KTVX ABC
2 Salt Lake City, UT 33 KUCW CW
3 Memphis, TN 49 WPTY ABC
4 Memphis, TN 49 WLMT CW
5 Syracuse, NY 84 WSYR ABC
6 Binghamton, NY 157 WBGH NBC
7 Binghamton, NY 157 WIVT ABC
8 Elmira, NY 174 WETM NBC
9 Jackson, TN 176 WJKT FOX
10Watertown, NY 177 WWTI ABC
With the closing of the acquisition and the new credit facility,
Nexstar's previously announced, Board-authorized dividend policy
will become effective. That policy provides Nexstar with the
authorization to declare a total annual cash dividend of $0.48 per
share in equal quarterly installments of $0.12 per share, with
respect to its shares of Class A common stock and Class B common
stock. Dividend determinations are subject to final declaration
by Nexstar's Board of Directors and the first quarterly cash
dividend is expected to be paid in the first quarter of 2013.
Completes Divestiture of KBTV
Nexstar Broadcasting has completed the divestiture of KBTV, the
FOX affiliate serving Beaumont/Port Arthur, Texas to San Antonio
Television LLC and Deerfield Media [Port Arthur] Licensee, LLC,
for $14 million cash. Nexstar intends to use proceeds from the
divestiture to further reduce debt and for general corporate
purposes.
Mr. Sook commented, "Nexstar has established a record of
successfully optimizing its station portfolio through both
strategic acquisitions and divestitures and the sale of KBTV is
consistent with our long-term strategy to divest non-core assets
in transactions that are also additive to our free cash flow. We
are confident that KBTV will continue to offer viewers in
Beaumont/Port Arthur great programming under the management of
Deerfield Media and we will continue to pursue opportunities that
generate additional value for our shareholders."
According to Nielsen Media 2011-2012 Local Market Estimates,
Beaumont/Port Arthur, Texas is the 141st largest television market
in the country. The transaction officially closed on Nov. 30,
2012.
About Nexstar Broadcasting Group
Irving, Texas-based Nexstar Broadcasting Group Inc. currently
owns, operates, programs or provides sales and other services to
62 television stations in 34 markets in the states of Illinois,
Indiana, Maryland, Missouri, Montana, Texas, Pennsylvania,
Louisiana, Arkansas, Alabama, New York, Rhode Island, Utah and
Florida. Nexstar's television station group includes affiliates
of NBC, CBS, ABC, FOX, MyNetworkTV and The CW and reaches
approximately 13 million viewers or approximately 11.5% of all
U.S. television households.
The Company reported a net loss of $11.89 million in 2011, a net
loss of $1.81 million in 2010, and a net loss of $12.61 million in
2009.
The Company's balance sheet at Sept. 30, 2012, showed
$611.35 million in total assets, $771.63 million in total
liabilities and a $160.27 million total stockholders' deficit.
* * *
As reported by the TCR on Oct. 26, 2012, Standard & Poor's Ratings
Services raised its corporate credit rating on Irving, Texas-based
Nexstar Broadcasting Group Inc. and on certain subsidiaries to
'B+' from 'B'. "The rating action reflects our view that the
stations that Nexstar will acquire from Newport will improve the
company's business risk profile and that trailing-eight-quarter
leverage will improve to 6x or less over the intermediate term,"
said Standard & Poor's credit analyst Daniel Haines.
In the Oct. 26, 2012, edition of the TCR, Moody's Investors
Service upgraded the corporate family and probability of default
ratings of Nexstar Broadcasting, Inc. (Nexstar) to B2 from B3.
The upgrade and positive outlook incorporate expectations for
continued improvement in the credit profile resulting from both
the transaction and Nexstar's operating performance.
NNN 3500 MAPLE: Files for Chapter 11 in Santa Ana
-------------------------------------------------
NNN 3500 Maple 26 LLC, a single asset real estate company, filed
for bankruptcy, saying it "is in extreme financial condition and
needs to seek the protection of the bankruptcy court for the
specific purpose of preserving its investment in the real
property."
NNN 3500 Maple 26 filed a Chapter 11 petition (Bankr. C.D. Calif.
Case No. 12-23718) in Santa Ana, California, on Nov. 30. Darvy M.
Cohan, Esq., at Darvy Mack Cohan Attorney At Law, in La Jolla,
California, serves as counsel. The Debtor estimated assets and
debts of $10 million to $50 million.
The Debtor owns an office tower located at 3500 Maple Avenue in
Dallas.
NNN 3500 MAPLE: Sec. 341(a) Creditors' Meeting Set for Jan. 9
-------------------------------------------------------------
The U.S. Trustee in Santa Ana, Calif., will convene a Meeting of
Creditors under 11 U.S.C. Sec. 341(a) in the Chapter 11 case of
NNN 3500 Maple 26, LLC, on Jan. 9, 2013, at 1:30 p.m. at RM 1-159,
411 W Fourth St., in Santa Ana.
NNN 3500 Maple 26 has until Dec. 14 to file schedules of assets
and liabilities and statement of financial affairs.
NNN 3500 Maple 26, LLC, based in Costa Mesa, Calif., filed for
Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 12-23718) on
Nov. 30, 2012. Judge Scott C. Clarkson presides over the case.
Darvy Mack Cohan Attorney at Law serves as the Debtor's counsel.
In its petition, the Debtor estimated $10 million to $50 million
in assets.
NNN LENOX PARK: Files for Chapter 11 in Indiana
-----------------------------------------------
NNN Lenox Park 9, LLC, filed a Chapter 11 petition (Bankr. S.D.
Ind. Case No. 12-92686) in New Albany, Indiana, on Dec. 4.
The Debtor, a Single Asset Real Estate as defined in 11 U.S.C.
Sec. 101(51B), estimated at least $10 million in assets and
liabilities. The Debtor owns the Lenox Park Buildings A & B in
Lenox Park Boulevard, Shelby County, in Memphis, Tennessee.
According to the board resolution, the company is in extreme
financial condition and needs to seek the protection of the
Bankruptcy Code for the protection of its assets and the
reorganization of its debts.
Mubeen Aliniazee, president of Highpoint Management Solutions,
LLC, has been named the restructuring officer.
Jeffrey M. Hester, Esq., at Tucker Hester, LLC, in Indianapolis,
serves, as counsel.
OHANA GROUP: Sec. 341(a) Creditors' Meeting Set for Jan. 8
----------------------------------------------------------
The U.S. Trustee will covene a meeting of creditors under
11 U.S.C. Sec. 341(a) in the Chapter 11 case of Ohana Group LLC on
Jan. 8, 2013, at 10:30 a.m. at US Courthouse, Room 4107.
Ohana Group LLC, in Seattle, Washington, filed for Chapter 11
bankruptcy (Bankr. W.D. Wash. Case No. 12-21904) on Nov. 30, 2012.
Judge Marc Barreca oversees the case. James L. Day, Esq., at Bush
Strout & Kornfeld LLP, serves as bankruptcy counsel. In its
petition, the Debtor scheduled $16,000,000 in assets and
$11,696,131 in liabilities.
OMNICITY INC: Broadband Networks Purchases Firm
-----------------------------------------------
Broadband Networks is now the owner of Rushville-based Omnicity,
Incorporated, a wireless broadband Internet service provider with
subscribers in 30 counties in Indiana and nine counties in Ohio.
Omnicity, Inc., filed a Chapter 11 petition (Bankr. S.D. Ind. Case
No. 11-12303) on Sept. 29, 2011. A reorganization plan was
approved, and ownership was transferred to Broadband Networks.
The new owners have more than 100 years of collective experience
in companies providing high-tech and Internet services.
"Broadband Network's acquisition of Omnicity Incorporated saves a
payroll of more than $1.75 million annually in Indiana and Ohio,
with the majority of employees in Rush County," said Broadband
Networks Principal Buz Nesbit. "We now look to improve Omnicity
with a new management team, new operating capital and plans for
improved equipment and technology. Future developments by
Omnicity will continue to positively impact the economic status of
rural counties in Indiana and Ohio."
The new Omnicity, a Broadband Networks Company, will provide
wireless high-speed Internet service to rural America. It is a
new beginning for Internet services outside major cities, building
strength in rural communities.
"We want to emphasize a change for the better with the new
Omnicity," said Broadband Networks Principal Dave Bash. "Omnicity
has come out of bankruptcy, just like other companies in this
country, as a stronger company with a more focused emphasis on
customer needs and service. Omnicity will provide a much-needed
service to rural areas throughout Indiana and Ohio and bridge the
digital divide with state-of-the-art technology."
The Broadband Networks team has a goal to provide better service
and support, faster speed, more reliability, larger coverage areas
and exciting products for the future. The Omnicity mission is to
serve as many customers as possible while remaining committed to
using the best technology to improve the customer experience.
"We will continue to bring broadband to the Heartland in the most
efficient and cost-effective ways possible," Bash said. The
Omnicity coverage area includes northern and central Indiana as
well as central and eastern Ohio.
Omnicity plans to begin an aggressive expansion to serve more
customers as fast as possible, adding to their existing base of
more than 5,000 Internet and medical care subscribers in Indiana
and Ohio.
OMTRON USA: Chicken Producer Faces Venue-Transfer Motion
--------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Omtron USA LLC will be another case test case
indicating whether bankruptcy judges in Delaware will send
companies' cases to their home states. Omtron paid $24.9 million
in February 2011 for the North Carolina operations belonging to
Townsends Inc., a vertically integrated chicken producer.
According to the report, several farmers who grew chickens for
Omtron filed a motion last week seeking to move the case to
bankruptcy court in North Carolina. The papers stated that Omtron
was being sued in North Carolina by 133 growers, all from that
state.
The report relates that the growers say that moving the Chapter 11
case to North Carolina will facilitate participation by creditors.
The papers state that 80.5% of the 3,000 listed creditors are from
North Carolina.
The report also discloses that an official creditors' committee
was formed last week. It selected Lowenstein Sandler PC from
Roseland, New Jersey, to serve as legal counsel.
The sale of Townsends' assets left nothing to reorganize. The
Townsends case was converted to liquidation in Chapter 7 in
October 2011.
Omtron USA bought poultry producer Townsends Inc. out of
bankruptcy in 2011, shut down operations in later that year,
and filed its own 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 Siler City, North Carolina-based
company estimated assets and debt of $10 million to $50 million
each in Chapter 11 documents.
OSHKOSH CORP: S&P Affirms 'BB' Corp. Credit Rating; Off Watch Neg
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings, including
the 'BB' corporate credit rating, on Oshkosh, Wis.-based Oshkosh
Corp. and removed the ratings from CreditWatch with negative
implications, where they had been placed on Oct. 12, 2012. The
outlook is stable.
"The affirmation reflects Icahn's announcement that he will not
proceed with a tender offer for Oshkosh's shares after less than
25% of outstanding shares were tendered by the Dec. 3 deadline
previously set. We believe this reduces uncertainty regarding the
leverage profile for Oshkosh and its strategic direction," said
Standard & Poor's credit analyst Dan Picciotto.
"The company's announcement on Nov. 16, 2012, that it plans to
repurchase up to $300 million of common stock over the next 12 to
18 months does not have an immediate effect on our assessment of
the company's financial risk profile, which we describe as
'significant.' The company's large cash balances (more than $500
million), good credit measures, and anticipated positive free cash
flow generation provide some capacity for the share repurchase
activity," S&P said.
"We believe risks related to potentially more aggressive policy of
an Icahn-owned or influenced entity have been reduced following
the announcement that Icahn's tender for the company will not be
extended. Icahn and related entities disclosed beneficial
ownership of about 9.5% of Oshkosh stock in July 2011, through a
combination of shares and call options. Although unsuccessful in
electing any of his six nominees in January 2012 following a proxy
fight, we believe the Icahn-led ownership and potentially
heightened shareholder focus caused some uncertainty as to the
strategic direction of the company and had the potential to result
in a more aggressive financial policy," S&P said.
Furthermore, S&P believes risks of strategic actions that could
result in a change in its assessment of the company's business
risk profile, which it currently views as 'satisfactory,' are also
reduced. "We expect Oshkosh to maintain its leading positions in
key segments of the cyclical specialty vehicle market -- such as
being the No. 1 global provider of aerial work platforms -- and
its good product and end-market diversity, which its four
reporting segments prove. The company's diversified product
portfolio is a supporting factor in our business risk profile
assessment. Our base-case expectations include," S&P said:
A continuation of the slow global economic recovery;
A continued recovery in the access equipment in fiscal 2013 at
a slower pace than in fiscal 2012;
Lower sales and profits at its defense segment in each of the
next several years, as Oshkosh transitions away from large
domestic contracts;
Fire and emergency results to deteriorate in 2013, given
pressures on municipal budgets;
Commercial segment revenue and profitability to benefit from
an improving outlook for residential construction spending;
and
Positive free cash flow generation.
"Barring any sizable acquisitions or other strategic shift, we
expect debt to EBITDA to remain close to 2x and funds from
operations (FFO) to total debt to exceed 30% in 2013. These
measures provide some cushion for risks to the company's defense
segment performance or a general economic slowdown. At the current
ratings, we expect Oshkosh to maintain total debt to EBITDA of
about 3.5x and FFO to total debt of about 20% to 25%," S&P said.
"The outlook is stable. We believe Oshkosh will maintain credit
measures that are consistent with the current ratings. We could
lower the ratings if weak results or a debt-financed acquisition
lead to weaker credit measures--for example, if adjusted debt to
EBITDA nears 4x and we do not consider near-term improvement to be
likely. This could occur if revenue declined by more than 10% and
EBITDA margin was less than 4.5% or less in 2013. Conversely, we
could raise the ratings if we believed the company will likely
maintain higher credit measures (such as FFO to debt of more than
25%) through the operating cycle and we did not expect debt-
financed acquisitions or other shareholder-friendly actions to
result in stretched credit measures," S&P said.
OVERSEAS SHIPHOLDING: U.S. Trustee Balks at Bond Waiver Bid
-----------------------------------------------------------
Lance Duroni at Bankruptcy Law360 reports that the U.S. Trustee on
Monday balked at Overseas Shipholding Group Inc.'s bid for a
waiver of a bankruptcy rule requiring bonds to safeguard debtor
bank accounts, saying the troubled oil tanker company hasn't
justified the exception for accounts worth $320 million.
In an objection filed in Delaware bankruptcy court, U.S. Trustee
Roberta DeAngelis said mere inconvenience is not a sufficient
basis for OSG to skirt Section 345(b) of the Bankruptcy Code,
which demands that any debtor investment or deposit be backed by a
bond in favor, according to Bankruptcy Law360.
About Overseas Shipholding
Overseas Shipholding Group, Inc., headquartered in New York, is
one of the largest publicly traded tanker companies in the world,
engaged primarily in the ocean transportation of crude oil and
petroleum products. OSG owns or operates 111 vessels that
transport oil and petroleum products throughout the world.
Overseas Shipholding Group and 180 affiliates filed voluntary
Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on
Nov. 14, 2012. Bankruptcy Judge Peter J. Walsh oversees the case.
Greylock Partners LLC Chief Executive John Ray serves as chief
reorganization officer. Cleary Gottlieb Steen & Hamilton LLP
serves as OSG's Chapter 11 counsel, while Chilmark Partners LLC
serves as financial adviser.
The Debtors disclosed $4.15 billion in assets and $2.67 billion in
liabilities as of June 30, 2012. Liabilities include $1.49
billion on an unsecured credit agreement with DNB Bank ASA as
agent. In addition to the secured Chinese loan, there is $518
million in unsecured notes and debentures plus $267 million on
ship mortgages taken down to finance nine vessels.
The Export-Import Bank of China, owed $312 million used for the
construction of five tankers, is represented by Louis R. Strubeck,
Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski
LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at
Fulbright & Jaworski in New York; and John Knight, Esq., and
Christopher Samis, Esq., at Richards Layton & Finger PA.
PHIL'S CAKE: Hires Baumann Raymondo to Audit 401(k) Plan
--------------------------------------------------------
Phil's Cake Box Bakeries, Inc., dba Alessi's Bakeries, Inc., has
sought permission from the U.S. Bankruptcy Court to employ Baumann
Raymondo, a Skoda Minotti CPA Firm, as 401(k) Plan Audit
Accountants to assist the Debtor in complying with the Department
of Labor's Rules and Regulations for Reporting and Disclosure
under ERISA in connection with the required filing of a Form 5500
and other supporting documents.
The documents were due to be filed Oct. 15.
The primary services to be performed by Baumann Raymondo in
connection with their retention, if approved by the Court, will be
to conduct an audit of (i) the 401(k) statements of net assets
available for benefits of the Plan as of Dec. 31, 2011, and (ii)
the related statements of changes in net assets available for
benefits of that year. Additionally, Baumann Raymondo will also
review the supplemental information accompanying the financial
statements.
The firm's rates are:
Professional Rates
------------ -----
Partners/Principals $280-$300
Managers $190-$280
Staff/senior staff $110-$165
Baumann Raymondo estimates that it will cost roughly $7,500 to
perform the 2011 audit of the Plan. The Debtor has agreed to
advance the retainer amount, subject to reimbursement from the
Plan.
The firm's Gerald L. Appleby attests that the firm is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code.
About Alessi's Bakeries
Phil's Cake Box Bakeries, Inc., dba Alessi's Bakeries, Inc., is a
family-owned bakery and catering business owned and operated in
Tampa, Fla., by four generations of the Alessi family. The
operations have grown from a small bakery delivering bread by
horse and wagon, to the current 100,000 square foot manufacturing
facility serving retail customers nationwide, with a retail
location maintaining and continuing its historic traditions in
Tampa.
Alessi's operates from two locations: a manufacturing facility and
a retail bakery. The Eagle Trail manufacturing facility is located
at 5202 Eagle Trail Drive, Tampa. The Eagle Trail Facility is a
100,000 sq. ft. building which houses various production lines
including five ovens, 40,000 sq. ft. of refrigerated space with
four walk-in freezers and two coolers, and 20,000 sq. ft. of raw
material and packing supplies warehouse space. Alessi's also
operates a retail bakery facility, located at 2909 West Cypress
Street, Tampa. Alessi's owns both locations.
As of the Petition Date, Alessi's estimates that it has assets of
roughly $14.5 million and liabilities of roughly $14.7 million.
Liabilities include $5.9 million owing to Zions. There is another
$3 million owing to the Small Business Administration and $820,000
to trade suppliers.
Alessi's filed for bankruptcy to address the over-leveraging due
to the Eagle Trail Facility acquisition and the inability fully
and timely to service debt during the period in which sales
dropped.
Alessi's filed for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case
No. 12-13635) on Sept. 5, 2012. Bankruptcy Judge K. Rodney May
oversees the case. Harley E. Riedel, Esq., at Stichter Riedel
Blain & Prosser, P.A., serves as the Debtor's counsel. The
petition was signed by Philip Alessi, Jr., president.
PMI GROUP: Private Investor Offers to Put in New Capital
--------------------------------------------------------
The PMI Group, Inc., has received an indication of interest from a
well-known private equity investor who has indicated an interest
in infusing new capital into a reorganized Company in exchange for
a minority equity interest in the reorganized Company and
management control over the reorganized Company.
The Company, in consultation with the Official Committee of
Unsecured Creditors appointed in the Chapter 11 case, is reviewing
the Indication of Interest. The Indication of Interest, however,
is not binding and there can be no assurance that any definitive
agreement for an investment will be reached or that any
transaction will be completed.
Bloomberg News notes that a rebound in the housing market is
fueling investor interest in mortgage insurance after companies
like PMI and Triad Guaranty Inc. were hobbled by losses in the
real estate slump. NMI Holdings Inc. raised $550 million in April
to open a mortgage insurer, and Essent Guaranty Inc., backed by
Goldman Sachs Group Inc. and JPMorgan Chase & Co., bought Triad
software and other assets in 2009.
The expression of private equity interest "is not binding and
there can be no assurance that any definitive agreement for an
investment will be reached or that any transaction will be
completed," the company said in the filing, which didn't identify
who was weighing the capital injection.
About The PMI Group
The PMI Group, Inc., is an insurance holding company whose stock
had, until Oct. 21, 2011, been publicly-traded on the New York
Stock Exchange. Through its principal regulated subsidiary, PMI
Mortgage Insurance Co., and its affiliated companies, the Debtor
provides residential mortgage insurance in the United States.
The PMI Group filed for Chapter 11 bankruptcy (Bankr. D. Del. Case
No. 11-13730) on Nov. 23, 2011. In its schedules, the Debtor
disclosed $167,963,354 in assets and $770,362,195 in liabilities.
Stephen Smith signed the petition as chairman, chief executive
officer, president and chief operating officer.
The Debtor said in the filing that it does not have the financial
resources to pay the outstanding principal amount of the 4.50%
Convertible Senior Notes, 6.000% Senior Notes and the 6.625%
Senior Notes if those amounts were to become due and payable.
The Debtor is represented by James L. Patton, Esq., Pauline K.
Morgan, Esq., Kara Hammond Coyle, Esq., and Joseph M. Barry, Esq.,
at Young Conaway Stargatt & Taylor LLP.
The Official Committee of Unsecured Creditors appointed in the
case retained Morrison & Foerster LLP and Womble Carlyle Sandridge
& Rice, LLP, as bankruptcy co-counsel. Peter J. Solomon Company
serves as the Committee's financial advisor.
PRINCE MINERAL: S&P Assigns 'B' Corp Credit Rating; Outlook Stable
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to New York, N.Y.-based Prince Mineral Holding Corp.
The outlook is stable.
"At the same time, we assigned our 'B' issue-level rating (same as
the corporate credit rating) to the company's proposed $260
million senior secured notes due 2019. The recovery rating is '3',
indicating our expectation of average (50% to 70%) recovery for
bondholders in the event of a payment default under our default
scenario. The notes are being sold pursuant to Rule 144a with
registration rights," S&P said.
"The corporate credit rating takes into account our view of the
company's 'vulnerable' business risk profile and 'aggressive'
financial risk profile," said Standard & Poor's credit analyst
Chiza B. Vitta. "Prince's business risk score is based on our view
of the company's small size and position in the fragmented,
competitive distribution industry; its exposure to cyclical end
markets; and integration risk associated with the GSC acquisition,
which is its largest purchase to date. Our view of the company's
aggressive financial risk profile is based on our expectation that
the company's leverage will remain in the 4x range and on its
private equity ownership."
"Our base-case scenario anticipates that Prince will generate
revenues of roughly $320 million and $340 million in 2013 and
2014. Our assessment reflects our view that activity levels in
Prince's end markets will continue to recover but remain
relatively weak, in line with a slow economic recovery. Our
scenario contemplates a relatively modest increase in the top line
based on a steady state growth rate for the company limited by
integration efforts which are moderated by its higher margin and
faster growing energy division. We expect the company to generate
EBITDA of approximately $65 million and $70 million in 2013 and
2014," S&P said.
"Prince is a value-added distributor of specialty mineral products
and additives used across a broad spectrum of niche industrial
applications. The company serves customers in the brick, glass,
agriculture, foundry, refractory and steel, oil and gas, and coal
end markets. The GSC acquisition increases Prince's exposure to
oil and gas end markets, positioning it to take advantage of
projected increases in domestic production, given new accessible
reserves due to advancements in extraction technologies. Although
Prince benefits from a high level of diversity that includes
thousands of products, a consistent and global customer base,
robust supplier agreements and varied end markets, the company has
been acquisitive, buying, on average, one company a year since
its inception in 2003. As the acquisitions get larger and
represent an entry into new end markets and product lines, as is
the case with GSC, the company faces some risk related to
integration, fit, and competing in a highly specialized field.
Prince is controlled by Palladium Equity Partners, a private
equity firm that purchased Prince in 2003," S&P said.
"Our stable rating outlook for Prince reflects our view that the
company's operating performance will support credit metrics in-
line with our expectations for the 'B' corporate credit rating. We
anticipate that Prince's products will produce EBITDA of about $65
million over the next 12 months. We expect leverage to be about
4.0x, with FFO-to-debt at about 10% and interest coverage of
approximately 2.5x throughout this time frame," S&P said.
"A higher rating is unlikely in the near term, given our view of
the company's vulnerable business profile and its acquisitive
growth strategy. A positive rating action could occur, however, if
the company is able to successfully integrate GSC and future
acquisitions while maintaining its EBITDA margins and credit
measures," S&P said.
"We could lower the rating if the company's liquidity position or
credit profile deteriorates such that we view its liquidity to be
'less than adequate' or if leverage were to be sustained above 5x.
This could occur if there are major changes in industry dynamics,
revolver drawings increase meaningfully, or if the company pursues
additional debt-financed acquisitions or dividends," S&P said.
QUAMTEL INC: Taps Peter Sperling as Company Secretary
-----------------------------------------------------
The Board of Directors of Quamtel, Inc., appointed Peter Sperling
as the company secretary effective Dec. 3, 2012. Mr. Sperling was
appointed to fill a recent vacancy and will serve until his
successor is duly elected and qualified.
For Mr. Sperling's services as secretary, the Company has agreed
to the following compensation package: Cash compensation of $6,000
per year increasing to $15,000 per year once the Company reaches
profitability; and a restricted stock option to purchase 200,000
shares of the Company's common stock vesting over time.
Mr. Sperling has an Associates Degree in Network Administration
and is a Microsoft Certified Professional Director of Information
Technologist. His past employment services include Director of
Information Technology Services for a Boca Raton based Real Estate
company. He is employed at DataJack, Inc., as a key part of the
management team in charge of fulfillment services, procurement and
Business Development.
About Quamtel Inc.
Dallas, Texas-based Quamtel, Inc., is a communications company
offering, through its subsidiaries, a comprehensive range of
mobile broadband and communications products and services that are
designed to meet the needs of individual consumers, businesses,
government subscribers and resellers. The Company's common stock
trades on the OTC Bulletin Board (OTC BB) under the symbol "QUMI."
In its report on the 2011 financial statements, RBSM LLP, in New
York, New York, expressed substantial doubt about Quamtel's
ability to continue as a going concern. The independent auditors
noted that the Company has incurred significant operating losses
in the current year and also in the past.
The Company reported a net loss of $4.49 million on $1.93 million
of revenues for 2011, compared with a net loss of $10.05 million
on $2.18 million of revenues for 2010.
The Company's balance sheet at Sept. 30, 2012, showed $2.16
million in total assets, $2.93 million in total liabilities and a
$771,149 total shareholders' deficiency.
RENO REDEVELOPMENT: S&P Raises Rating on Senior Lien 2007A to 'B'
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term rating and
underlying rating (SPUR) to 'B' from 'CC' on Reno Redevelopment
Agency (RDA), Nev.'s senior-lien 2007A (taxable) and 2007B tax
increment bonds. The outlook is stable.
"The rating actions reflect our view of the recently signed
settlement agreement providing that the RDA receives a minimum of
$2.7 million of annual revenue though fiscal 2018," said Standard
& Poor's credit analyst Bryan Moore.
The ratings reflect S&P's opinion of:
-- The full replenishment of the cash-funded debt service reserve
on both series of bonds;
-- The agency's high volatility ratio of 0.92 in fiscal 2013,
which indicates sensitivity to assessed value (AV)
fluctuations;
-- A relatively small project area that covers 323 acres, or just
0.09% of Reno, and is concentrated in a highly volatile
industry; and
-- Four consecutive years of AV declines, which will reduce
coverage of debt service below 1x after fiscal 2018, when the
settlement agreement expires, absent growth in the tax base.
RESIDENTIAL CAPITAL: Ocwen Awaits Regulatory Approval of Deal
-------------------------------------------------------------
Liz Rappaport, writing for The Wall Street Journal, reports that
Benjamin M. Lawsky, New York's superintendent of financial
services, has yet to approve Ocwen Financial Corp.'s plans to buy
Homeward Residential Holdings Inc. and the mortgage-servicing unit
of Residential Capital LLC. Mr. Lawsky, whose office regulates
the companies because they service loans in New York, is demanding
that Ocwen bring on a monitor of his choice who would oversee the
company's mortgage operations for two years and recommend changes
in business practices. Mr. Lawsky's approval is necessary for the
deals to close. Ocwen has said it expects to close by early 2013.
In a review of dozens of Ocwen's loan cases, Mr. Lawsky's office
found what it sees as evidence of practices it deemed abusive,
according to people familiar with the review, WSJ reports.
According to WSJ, Paul Koches, Ocwen's general counsel, said, "We
have not received from any regulator at the federal or state or
any level any findings or evidence we have wrongfully foreclosed
on any borrower. Further, we do everything in our power to avoid
foreclosure."
Ocwen in October agreed with a partner, Walter Investment
Management Corp., to pay $3 billion for Ally's ResCap unit.
Earlier that month, Ocwen agreed to buy Homeward Residential for
$750 million from WL Ross, the private-equity firm run by
billionaire investor Wilbur Ross. WSJ says the deals stand to
make Ocwen the biggest servicer of loans made to borrowers with
weak credit histories and the fifth-largest mortgage servicer
overall.
WSJ relates a ResCap spokeswoman declined to comment.
"Ocwen is a first-rate servicer of mortgages," said Mr. Ross,
according to WSJ. His firm is taking a 4% stake in Ocwen via
convertible securities to be issued in the Homeward deal. "This
articulates our convictions that this is a good management team."
About Residential Capital
Residential Capital LLC, the unprofitable mortgage subsidiary of
Ally Financial Inc., filed for bankruptcy protection (Bankr.
S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012.
Neither Ally Financial nor Ally Bank is included in the bankruptcy
filings.
ResCap, one of the country's largest mortgage originators and
servicers, was sent to Chapter 11 with 50 subsidiaries amid
"continuing industry challenges, rising litigation costs and
claims, and regulatory uncertainty," according to a company
statement.
ResCap disclosed $15.68 billion in assets and $15.28 billion in
liabilities as of March 31, 2012.
Centerview Partners LLC and FTI Consulting are acting as financial
advisers to ResCap. Morrison & Foerster LLP is acting as legal
adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is
the conflicts counsel. Rubenstein Associates, Inc., is the public
relations consultants to the Company in the Chapter 11 case.
Morrison Cohen LLP is advising ResCap's independent directors.
Kurtzman Carson Consultants LLP is the claims and notice agent.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves
as counsel to Ally Financial.
Nationstar was to make the first bid for the mortgage-servicing
business, while Berkshire Hathaway Inc. would serve as stalking-
horse bidder for the remaining portfolio of mortgages.
The Court extended the general bar date for claims against the
Debtors to Nov. 16, 2012, at 5:00 p.m., due to the events
precipitated by hurricane Sandy.
Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
REVSTONE INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Revstone Industries, LLC
2250 Thunderstick Drive, Suite 1203
Lexington, KY 40505
Bankruptcy Case No.: 12-13262
Chapter 11 Petition Date: December 3, 2012
Court: U.S. Bankruptcy Court
District of Delaware (Delaware)
Debtor's Counsel: Mark D. Collins, Esq.
RICHARDS, LAYTON & FINGER, P.A.
One Rodney Square
920 North King Street
Wilmington, DE 19801
Tel: (302) 651-7700
Fax: (302) 651-7701
E-mail: collins@RLF.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Liabilities: $50,000,001 to $100,000,000
The petition was signed by George S. Hofmeister, chairman.
Debtor's List of Its 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Boston Finance Group, LLC Loan $33,261,028
c/o Craig Neckers
SMITH HAUGHEY RICE & ROEGGE
101 N. Park Street, Suite 100
Traverse City, MI 49684
Schoeller Arca Systems, Inc. Trade $10,000,000
c/o Suann Trimmer
DAWDA, MANN, MULCAHY, & SADLER PLC
39533 Woodlawn Avenue, Suite 200
Bloomfield Hills, MI 48304
JMP Industries, Inc. Loan $8,000,000
c/o Shusheng Wang
MILLER, CANFIELD, PADDOCK & STONE, P.L.C.
840 West Long Lake Road, Suite 200
Troy, MI 48098
Jeffrey Owens & Palm Marketing, Trade $3,271,623
Ltd.
c/o Jeffrey Owen
Dexter Foundry, Inc. Loan $1,850,000
c/o Craig R. Foss
FOSS, KUIKEN & COCHRAN, P.C.
100 E. Burlington Avenue
First National Bank Building, Suite 201
P.O. Box 30
Fairfield, IA 52556
Patrick O'Mara Loan $1,400,000
c/o Scott R. Murphy
BARNES & THORNBURG LLP
171 Monroe Avenue NW, Suite 1000
Grand Rapids, MI 49503
Thule Holdings, Inc. & Thule Trade $1,000,000
Towing Systems, LLC
c/o Mark Schnitzler
IVEY, BARNUM & O'MARA, LLC
170 Mason Street
Greenwich, CT 06830
Kerry Capital Trade $722,600
c/o Tom Janes
Two Liberty Square, 10th Floor
Boston, MA 02109
Phare Capital Trade $710,000
c/o Liz Varley Camp
9 West 57th Street, 26th Floor
New York, NY 10019
SG Equipment Finance USA Corp. Trade $593,242
c/o KEVIN M. CHUDLER & ASSOCIATES
26211 Central Park Boulevard, Suite 211
Southfield, MI 48076
Native American Logistics Trade $378,073
Worldwide, LLC
c/o Kevin N. Summers
DEAN & FULKERSON
801 W. Big Beaver Road, Suite 500
Troy, MI 48084
StormHarbour Securities LP Trade $375,000
c/o PUTNEY, TWOMBLY, HALL & HIRSON LLP
521 Fifth Avenue
New York, NY 10175
Ceridian Trade $367,501
P.O. Box 10989
Newark, NJ, 07193-0989
Och-Ziff Capital Management Group Trade $325,000
c/o Justin L. Browder
9 West 57th Street, 13th Floor
New York, NY 10019
Con-Way Freight Inc. Trade $302,134
c/o Timothy Carl Aires
AIRES LAW FIRM
180 Newport Center Drive, Suite 260
Newport Beach, CA 92660
Lazard Freres & Co., LLC Trade $300,000
190 S. LaSalle Street, 31st Floor
Chicago, IL, 60603
White & Case, LLP Professional Services $288,000
c/o Dr. Axel Pajunk
Bockenheimer Landstr. 20
60323 Frankfurt am Main
Germany
Selwyn Isakow / Hilsel Loan $286,000
c/o Bryan D. Marcus PC
29488 Woodward Avenue
Royal Oak, MI 48073
Deloitte & Touche, LLP Professional Services $278,600
P.O. Box 7247-6446
Philadelphia, PA 19170-6446
H.I.G. Middle Market, LLC Trade $250,000
c/o Brooks B. Gruemmer
MCDERMOTT, WILL & EMERY
227 West Monroe Street
Chicago, IL 60606
REVSTONE INDUSTRIES: Files for Chapter 11 in Delaware
-----------------------------------------------------
Revstone Industries, LLC, a maker of truck-engine parts, filed a
bare-bones Chapter 11 petition (Bankr. D. Del. Case No. 12-13262)
on Dec. 3.
Lexington, Kentucky-based Revstone estimated assets of at least
$10 million and liabilities of less than $100 million. Boston
Finance Group, LLC, is owed $33.3 million and trade creditor
Schoeller Area Systems, Inc., is owed $10 million, according to
the list of largest unsecured creditors.
The Debtor has tapped Richards, Layton & Finger, P.A., and Mayer
Brown LLP as attorneys.
According to http://www.revstone.com/Revstone is a Lexington,
Kentucky and Southfield, Michigan-based manufacturer of
lightweight components and tooling for steering, power trains and
other systems.
Ascalon Enterprises, LLC, owns 100% of the Debtor.
RG STEEL: Units Sued in Adversary Proceeding by Slag Processor
--------------------------------------------------------------
Carla Main, substituting for Bloomberg News bankruptcy columnist
Bill Rochelle, reports that in the bankruptcy case of steel
producer RG Steel LLC, an adversary proceeding has been filed by
Metal Services LLC against the debtor affiliates RG Steel Warren
LLC, CJ Betters Enterprises Inc. and BDM Warren Steel Holdings
LLC, according to court files.
According to the report, Metal Services has brought an "emergency
injunction" asking for a temporary restraining order to keep the
affiliates "from taking certain actions in violation" of the
bankruptcy court's Aug. 31 sale order relating to the sale of the
debtor's steel mill located in Warren, Ohio, according to court
files.
The report relates that Metal Services, also known as Phoenix
Services, also wants the court's order to keep the affiliates from
interfering with access by Phoenix to the site as it removes
assets and processes and stores slag at the site.
The report recounts that the dispute grew out of a 2010 agreement
between Phoenix Services and the debtor for digging and producing
slag at the Warren site, under which Phoenix was to be paid a
royalty, according to the complaint in the adversary case. Slag
is a byproduct of the process of ore-smelting. Phoenix alleges
that the order approving the bankruptcy sale carves out an
exception for assets belonging to Phoenix, according to the
complaint. While the debtor rejected the formal agreement Aug. 13,
Phoenix has continued to provide services at the site under a
"handshake agreement" since the sale and has been "negotiating in
good faith to reach a final agreement" it said in court papers.
A December hearing has been requested.
The case is In re WP Steel Venture LLC, 12-11661, the adversary
case is Metal Services LLC v. RG Steel Warren, 12-bk-51120, U.S.
Bankruptcy Court, District of Delaware (Wilmington).
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.
SAGAMORE PARTNERS: Court OKs Simon Schindler as Litigation Counsel
------------------------------------------------------------------
Sagamore Partners, Ltd. sought and obtained permission from the
U.S. Bankruptcy Court to employ Neal L. Sandberg, Esq., and the
law firm of Simon, Schindler & Sandberg, L.L.P. to represent the
Debtor as special litigation counsel to appear at depositions,
hearings or trial in adversary proceedings.
Mr. Sandberg's hourly rate is $450. Associates, assistants and
paralegals at the firm are billed at hourly rates ranging from
$150 to $325.
The firm attests it is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
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. In July 2012, 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.
According to Judge Cristol, to cure the Loan, the Debtor must
provide for the payment of all amounts due the Secured Lender
under the Loan Documents, including default interest. Absent such
payment, the Debtor may not treat the Secured Lender's claim as
unimpaired under the Plan. Because, as presently structured, the
Plan does not provide for the payment of default interest to the
Secured Lender, the Plan is facially unconfirmable over the
objection of the Secured Lender and approval of the Disclosure
Statement is denied.
The U.S. Trustee has not appointed an official committee in the
case.
SAGAMORE PARTNERS: Hiring Mack Law Firm as Special Counsel
----------------------------------------------------------
Sagamore Partners, Ltd., sought and obtained approval from the
U.S. Bankruptcy Court to employ Jacqulyn Mack, Esq., and The Mack
Law Firm Chartered to represent the Debtor as special litigation
counsel to appear at depositions, hearings or trial in adversary
proceedings.
Ms. Mack's hourly rate is $400. Associates, assistants and
paralegals at her Firm are billed at hourly rates ranging from
$150 to $175.
The firm attests it is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
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. In July 2012, 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.
According to Judge Cristol, to cure the Loan, the Debtor must
provide for the payment of all amounts due the Secured Lender
under the Loan Documents, including default interest. Absent such
payment, the Debtor may not treat the Secured Lender's claim as
unimpaired under the Plan. Because, as presently structured, the
Plan does not provide for the payment of default interest to the
Secured Lender, the Plan is facially unconfirmable over the
objection of the Secured Lender and approval of the Disclosure
Statement is denied.
The U.S. Trustee has not appointed an official committee in the
case.
SAGAMORE PARTNERS: Taps Mendez & Company as Accountant
------------------------------------------------------
Sagamore Partners, Ltd., filed papers in Court seeking permission
to employ Louis Mendez, Jr. and the accounting firm of Mendez &
Company, P.A. as the Debtor's accountant.
The firm will provide these services:
a) federal Income Tax Preparation for the year 2011;
b) Florida Income Tax and Tangible Tax Preparation, if
necessary; and
c) consultations regarding financial reporting, if necessary.
The firm's rates are:
Professional Rates
------------ -----
Partner $390
Manager $250
Supervisor $220
Senior Staff $190
Staff $160
Bookkeeper $125
Administrative $65
Mr. Mendez and MCPA performed services on behalf of the Debtor
pre-petition. The Debtor scheduled an unsecured claim in the
amount of $3,200. However, according to the Debtor's court
papers, MCPA does not have a claim and if the scheduled claim is
deemed an allowed claim, MCPA has agreed to waive its pre-petition
claim.
The firm attests it is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
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. In July 2012, 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.
According to Judge Cristol, to cure the Loan, the Debtor must
provide for the payment of all amounts due the Secured Lender
under the Loan Documents, including default interest. Absent such
payment, the Debtor may not treat the Secured Lender's claim as
unimpaired under the Plan. Because, as presently structured, the
Plan does not provide for the payment of default interest to the
Secured Lender, the Plan is facially unconfirmable over the
objection of the Secured Lender and approval of the Disclosure
Statement is denied.
The U.S. Trustee has not appointed an official committee in the
case.
SAGAMORE PARTNERS: Hires Meckler Bulger Firm as Expert
------------------------------------------------------
Sagamore Partners, Ltd., is seeking to employ Bruce Meckler, Esq.,
and the law firm of Meckler Bulger Tilson Marick & Pearson LLP as
expert relating to the reasonability of fees in the case.
The firm will not be paid by the Debtor but will be paid by Martin
W. Taplin, the Debtor's owner.
The firm attests it is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
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. In July 2012, 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.
According to Judge Cristol, to cure the Loan, the Debtor must
provide for the payment of all amounts due the Secured Lender
under the Loan Documents, including default interest. Absent such
payment, the Debtor may not treat the Secured Lender's claim as
unimpaired under the Plan. Because, as presently structured, the
Plan does not provide for the payment of default interest to the
Secured Lender, the Plan is facially unconfirmable over the
objection of the Secured Lender and approval of the Disclosure
Statement is denied.
The U.S. Trustee has not appointed an official committee in the
case.
SAN BERNARDINO: Bondholders Blame Bankruptcy on Worker Salaries
---------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that San Bernardino, California, filed papers on Nov. 30
rebutting assertions by public employees and the California Public
Employees' Retirement System that the Chapter 9 municipal
bankruptcy should be dismissed. The city's papers explain why it
was unable to undergo 60 days of negotiations before filing
bankruptcy. The city also denies it filed bankruptcy in bad faith
as an "all-out war on public sector employees and retirees."
According to the report, Wells Fargo NA, as bondholders' indenture
trustee, and Ambac Assurance Corp., as insurer for bonds, filed
papers in support of the city squarely taking on public employees.
They point out how the median salary is $128,200 for firefighters,
before benefits, and $95,600 for police, both several times larger
than the average salary of San Bernardino residents. The bank and
Ambac say bankruptcy "was caused by rising employee salaries and
benefits coupled with declining revenues." City workers' salaries
are 74% of the entire budget and more than general fund revenues,
they said. Rather than bad faith in using bankruptcy to cut
salaries, they said "it would be folly to ignore them."
The report discloses that the bankruptcy court will hold a status
conference on Dec. 21 to consider procedures in connection with a
determination as to whether San Bernardino is eligible for
municipal bankruptcy.
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 joined 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.
SANUWAVE HEALTH: David Nemelka to Buy 4 Million Shares
------------------------------------------------------
SANUWAVE Health, Inc., entered into a subscription agreement
whereby David N. Nemelka, an individual, has agreed to purchase
from the Company, and the Company has agreed to sell and issue, a
total of 4,000,000 shares of the Company's common stock, par value
$0.001, at a purchase price equal to $0.25 per share, for an
aggregate sales price of $1,000,000.
The Purchase Price will be payable to the Company as follows: (i)
$50,000 on or before Jan. 31, 2013; (ii) $50,000 on or before
Feb. 15, 2013; and (iii) the balance of $900,000 on or before
May 27, 2014. The Subscriber may make payments of the Purchase
Price at his discretion in minimum installments of $100,000 each,
until the Outside Due Date. In the event that at any time after
Feb. 15, 2013, the Company's total available cash should be less
than $100,000, the Subscriber will, upon demand of the Company,
pay to the Company, $100,000 of the then outstanding balance of
the Purchase Price, which payment will be due within 30 days of
the demand. There is no limit on the number of demands that the
Company may make pursuant to this provision of the Subscription
Agreement, provided, however, that in no event will the Company
provide more than one notice of demand for payment in any 30 day
period.
David N. Nemelka is the brother of John F. Nemelka, who is a
member of the Company's board of directors.
A copy of the Subscription Agreement is available at:
http://is.gd/LRSSLy
About SANUWAVE Health
Alpharetta, Ga.-based SANUWAVE Health, Inc., is an emerging global
regenerative medicine company focused on the development and
commercialization of noninvasive, biological response activating
devices for the repair and regeneration of tissue, musculoskeletal
and vascular structures.
BDO USA, LLP, in Atlanta, Georgia, expressed substantial doubt
about SANUWAVE's ability to continue as a going concern, following
the Company's results for the fiscal year ended Dec. 31, 2011.
The independent auditors noted that the Company has suffered
recurring losses from operations and is economically dependent
upon future issuances of equity or other financing to fund ongoing
operations.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss of $4.70 million on $627,153 of revenue, compared with a
net loss of $7.82 million on $577,180 of revenue for the same
period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $2.28
million in total assets, $7.80 million in total liabilities and a
$5.52 million total stockholders' deficit.
Bankruptcy Warning
"The continuation of our business is dependent upon raising
additional capital. We expect to devote substantial resources to
continue our research and development efforts, including clinical
trials. Because of the significant time it will take for our
products to complete the clinical trial process, and for us to
obtain approval from regulatory authorities and successfully
commercialize our products, we will require substantial additional
capital. We incurred a net loss of $4,707,212 for the nine months
ended September 30, 2012 and a net loss of $10,238,797 for the
year ended December 31, 2011. These operating losses create
uncertainty about our ability to continue as a going concern. As
of September 30, 2012, we had cash and cash equivalents of
$361,263. We are working with select accredited investors to
raise up to $1.25 million in capital in a private placement. The
accredited investors will receive a convertible promissory note
that will convert, at the Company?s option, at the completion of a
larger funding which is expected to close no later than the first
quarter of 2013. If these efforts are unsuccessful, we may be
forced to seek relief through a filing under the U.S. Bankruptcy
Code," the Company said in its quarterly report for the period
ended Sept. 30, 2012.
SCHIFF NUTRITION: S&P Keeps 'B' Corp. Credit Rating on Watch Pos
----------------------------------------------------------------
Standard & Poor's Ratings Services said its ratings on Salt Lake
City, Utah-based Schiff Nutrition Group Inc. would remain on
CreditWatch, where S&P placed them with positive implications on
Oct. 31, 2012.
"The CreditWatch reflects our expectation that we will raise our
rating on Schiff to the 'A+' level of Reckitt Benckiser PLC
following the completion of the transaction," said Standard &
Poor's credit analyst Nalini Saxena. Reckitt's bid to purchase
Schiff was proposed subsequent to that of Bayer Healthcare LLC, a
subgroup of Bayer AG.
Standard & Poor's would also withdraw its ratings on Schiff if the
company's existing debt is repaid by Reckitt following the close
of the acquisition, which it expects by year-end.
"We plan to resolve the CreditWatch listing upon completion of the
transaction," S&P said.
SEALY CORP: Receives Request for Additional Information from FTC
----------------------------------------------------------------
Tempur-Pedic International Inc. and Sealy Corporation received a
request for additional information and documentary materials from
the Federal Trade Commission regarding Tempur-Pedic's proposed
acquisition of Sealy. The information request was issued under
notification requirements of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976.
The effect of the Second Request is to extend the waiting period
imposed by the Act until 30 days after each Company has
substantially complied with the Second Request, unless that period
is extended voluntarily by the companies or terminated sooner by
the FTC. The companies noted that they intend to respond to the
information request and to continue to work cooperatively with the
FTC in connection with this review. Completion of the transaction
remains subject to the expiration or termination of the waiting
period under the HSR Act and satisfaction of other customary
closing conditions. Tempur-Pedic and Sealy continue to expect the
transaction to close during the first half of 2013.
About Sealy Corp.
Trinity, North Carolina-based Sealy Corp. (NYSE: ZZ) --
http://www.sealy.com/-- is the largest bedding manufacturer in
the world with sales of $1.5 billion in fiscal 2008. The Company
manufactures and markets a broad range of mattresses and
foundations under the Sealy(R), Sealy Posturepedic(R), including
SpringFree(TM), PurEmbrace(TM) and TrueForm(R); Stearns &
Foster(R), and Bassett(R) brands. Sealy operates 25 plants in
North America, and has the largest market share and highest
consumer awareness of any bedding brand on the continent. In the
United States, Sealy sells its products to approximately 3,000
customers with more than 7,000 retail outlets.
The Company reported a net loss of $9.88 million for the 12 months
ended Nov. 27, 2011, and a net loss of $13.74 million during the
prior year. The Company reported a net loss of $15.20 million
for the three months ended Nov. 27, 2011.
The Company's balance sheet at Aug. 26, 2012, showed $971.51
million in total assets, $1.01 billion in total liabilities,
$12.13 million in redeemable noncontrolling interest, and a $52.96
million total stockholders' deficit.
* * *
Sealy carries 'B' local and issuer credit ratings, with stable
outlook, from Standard & Poor's.
SENTINEL MANAGEMENT: BoNY's $312MM Liens Denied by Appeals Court
----------------------------------------------------------------
Carla Main, substituting for Bloomberg News bankruptcy columnist
Bill Rochelle, reports that Bank of New York Mellon Corp.'s
victory in a lawsuit challenging its $312 million lien on the
assets of bankrupt Sentinel Management Group Inc. was canceled
without explanation by a U.S. appeals court.
The report relates that a three-judge panel of the U.S. Court of
Appeals in Chicago on Nov. 30 withdrew its prior ruling affirming
the lender's entitlement to the lien in a two-sentence decree.
"The opinion of this court issued on Aug. 9, 2012, is withdrawn
and the judgment is vacated," a three-judge panel of Daniel A.
Manion, Ilana Diamond Rovner and John D. Tinder said, according to
the report. "This appeal remains under consideration by the
panel."
The report relates that after the Northbrook, Illinois-based cash-
management firm filed for bankruptcy in 2007, liquidation trustee
Frederick Grede sued the New York-based bank alleging its
employees knew Sentinel was improperly using investor assets as
collateral for its own line of credit and sought to disallow or
subordinate BNY's lien. Following a 2010 trial, U.S. District
Judge James B. Zagel in Chicago rejected Grede's claims. After
Manion, Rovner and Tinder upheld that decision, Grede's lawyers
petitioned for a rehearing by the full court.
The case is In re Sentinel Management Group Inc., 10-3787, 10-3990
and 11-1123, U.S. Circuit Court of Appeals for the Seventh Circuit
(Chicago).
About Sentinel Management
Based in Northbrook, Illinois, Sentinel Management Group Inc. --
http://www.sentinelmgi.com/-- was a full service firm offering a
variety of security solutions. The Company filed a voluntary
Chapter 11 petition on Aug. 17, 2007 (Bankr. N.D. Ill. Case No.
07-14987). Ronald Barliant, Esq., Randall Klein, Esq., and
Kathryn A. Pamenter, Esq., at Goldberg, Kohn, Bell & Black
Rosenbloom & Moritz, Ltd., represent the Debtor. Lawyers at
Quinn, Emanuel Urquhart Oliver & Hedges, LLP, represent the
Official Committee of Unsecured Creditors. When the Debtor sought
bankruptcy protection, it estimated assets and debts of more than
$100 million.
On Aug. 28, 2007, the Court approved Frederick Grede as the
Debtor's Chapter 11 Trustee. Marc I. Fenton, Esq., at DLA Piper
US LLP, and Vincent E. Lazar, Esq, at Jenner & Block LLP,
represent the Chapter 11 Trustee.
The Court confirmed a plan of liquidation for Sentinel on
Dec. 15, 2008, and Mr. Grede is managing the liquidation.
SOLOMON DWEK: Accord in Lawsuit Against Cayre, KLLC Rejected
------------------------------------------------------------
Bankruptcy Judge Kathryn C. Ferguson refused to put her stamp of
approval on a settlement entered in the lawsuit, Charles A.
Stanziale, Jr., Chapter 11 Trustee for the Estate of Solomon Dwek,
et al., Plaintiff, v. Kenneth Cayre, KLCC Investments, LLC, and
KLC Foundation, Defendants, Adv. Proc. No. 08-1201 (Bankr.
D.N.J.). A copy of the Court's Dec. 3, 2012 Memorandum Opinion is
available at http://is.gd/jP2igCfrom Leagle.com.
Several creditors filed an involuntary Chapter 7 bankruptcy
petition against Solomon Dwek (Bankr. D.N.J. Case No. 07-11757)
on Feb. 9, 2007. On Feb. 13, 2007, SEM filed for voluntary
Chapter 11. On Feb. 22, 2007, the Dwek bankruptcy case was
converted to Chapter 11 and it was administratively consolidated
with the SEM bankruptcy. Charles A. Stanziale, Jr., has been
appointed trustee in Mr. Dwek's Chapter 11 bankruptcy.
SOUTHERN ONE: Files for Chapter 11 in Texas
-------------------------------------------
Southern One Twenty One Investments, Ltd., filed a Chapter 11
petition (Bankr. E.D. Tex. Case No. 12-43311) in Sherman, Texas,
on Dec. 3.
Nicole L. Hay, Esq., at Hiersche Hayward Drakeley & Urbach P.C.,
in Addison, Texas, serves as counsel to the Debtor.
The Debtor, a Single Asset Real Estate as defined in 11 U.S.C.
Sec. 101(51B), estimated assets and liabilities of at least
$10 million.
The Dallas-based company said in a filing that its principal asset
comprises almost 81 acres near Highway 121 and Chelsea Boulevard
in Allen, Texas. The property is close to a shopping mall,
according to Nicole Hay, an attorney for Southern One Twenty One,
Bloomberg News said.
SOUTHERN ONE: Case Summary & 9 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Southern One Twenty One Investments, Ltd.
c/o Nicole Hay
HIERSCHE, HAYWARD, DRAKELEY & URBACH, PC
15303 Dallas Parkway, Suite 700
Addison, TX 75001
Bankruptcy Case No.: 12-43311
Chapter 11 Petition Date: December 3, 2012
Court: U.S. Bankruptcy Court
Eastern District of Texas (Sherman)
Debtor's Counsel: Nicole L. Hay, Esq.
HIERSCHE HAYWARD DRAKELEY & URBACH P.C.
15303 Dallas Parkway, Suite 700
Addison, TX 75001
Tel: (972) 701-7072
Fax: (972) 701-8765
E-mail: nhay@hhdulaw.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Liabilities: $10,000,001 to $50,000,000
The petition was signed by Peter Ng, managing member, Southern 121
Investments GP, Inc.
Debtor's List of Its Nine Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Chiang Chu-Pin Money Loaned $3,365,697
2435 Pfingsten Road
Glenview, IL 60026
Peter Ng and Shu Huel Ng Money Loaned $2,900,000
1715 River Hill Drive
Dallas, TX 75287
Peter Qian and Daisy Liu Money Loaned $1,200,000
9509 Dove Meadow Drive
Dallas, TX 75243
Norman Payson and Fawn Payson Money Loaned $700,000
5048 Tennyson Parkway, Suite 100
Plano, TX 75024
Khen Sheng Ng Money Loaned $620,000
09-01, Block 874, Tampines Street 84
Singapore, 520874
Jimmy An Money Loaned $600,000
1102 Ables Lane
Dallas, TX 75229
Yang Wei Chien Money Loaned $500,000
11181 Harry Hines Boulevard, Suite 140
Dallas, TX 75229
Penny Chen Money Loaned $250,000
2201 East Arapaho Road, Suite 300
Richardson, TX 75081
Sam Yang Money Loaned $200,000
SPANSION LLC: Moody's Affirms B1 CFR; Outlook Remains Stable
------------------------------------------------------------
Moody's Investors Service raised Spansion LLC's Speculative Grade
Liquidity (SGL) rating to SGL-2 from SGL-3 and affirmed the B1
Corporate Family Rating (CFR) and the instrument ratings. The
outlook remains stable.
Ratings Rationale
The upgrade of the SGL reflects Spansion's good liquidity driven
by the following factors: 1) replacement of the existing ABL
facility with a new, unrated, committed revolver ($50 million
availability); 2) extension of the term loan maturity to 2018 from
2015 and a lighter covenant package with additional headroom; 3)
expected future proceeds from the sale of the company's Sunnyvale
headquarters ($65 million). "The proposed amendment and new
revolver meaningfully improves Spansion's liquidity, decreasing
the risk of a covenant default and giving the company access to a
committed source of financing," said Terrence Dennehy, Senior
Analyst at Moody's.
The B1 CFR reflects Spansion's single product focus as an embedded
NOR flash memory manufacturer competing directly against Micron
Technology, which is larger and diversified across NAND, DRAM, and
NOR, and indirectly against focused manufacturers of NAND memory,
such as Toshiba and Hynix. Moreover, the rating reflects the FCF
volatility of the memory semiconductor space, which has
historically experienced large swings in demand and rapid declines
in average selling price (ASP) per unit of memory. The CFR is
supported by the company's leading position in the embedded NOR
segment, which tends to have longer product life cycles than the
wireless NOR segment. Moreover, Spansion's `asset-lite'
manufacturing model provides operational flexibility, which can
result in more consistent free cash flow generation across
business cycles than if Spansion owned all its production.
The stable outlook reflects the expectation that within the next
12-18 months Spansion will: 1) continue to take market share in
the embedded NOR segment as Spansion gets new design wins; 2) gain
traction in and realize material revenues from the embedded NAND
segment; and 3) maintain a conservative financial profile, with
debt to EBITDA (Moody's standard adjustments) under 3.5x, and
abstain from share repurchases and dividend payments. The rating
could be upgraded if Moody's believes that Spansion will maintain
its financial leverage below 2.0x as measured by debt to EBITDA
(Moody's standard adjustments); will achieve a favorable
resolution of the remaining bankruptcy claims without impairing
its liquidity profile; and will improve its cost structure to
exceed Free Cash Flow to debt (Moody's standard adjustments) of
15% on a sustained basis. Ratings may be lowered if Moody's
believes that Spansion's competitive position has weakened, as
reflected in shrinking margins and revenue growth trailing the
industry. Ratings could also be lowered if there is a contraction
in industry demand, operational difficulty in ramping production
of newer technology products, or deterioration in flash memory
prices without a proportional reduction in Spansion's operating
costs. Moreover, to the extent Moody's believes that total debt to
EBITDA (Moody's standard adjustments) will remain above 4.0x for
an extended period, ratings could be downgraded.
Upgrades:
Issuer: Spansion, LLC
Speculative Grade Liquidity Rating, Upgraded to SGL-2 from
SGL-3
Senior Unsecured Regular Bond/Debenture, Upgraded to LGD5,
80% from LGD5, 82% (instrument rating unchanged at B3)
Assignments:
Issuer: Spansion, LLC
Senior Secured Bank Term Loan due 2018, Rated Ba3, LGD3, 30%
Withdrawals:
Issuer: Spansion, LLC
Senior Secured Bank Term Loan due 2015, Withdrawn, previously
rated Ba3, LGD3, 35%
Spansion, based in Sunnyvale, California, is a designer,
manufacturer and developer of flash memory semiconductors
principally focused on the embedded NOR market segment.
The principal methodology used in rating Spansion was the Global
Semiconductor Industry Methodology published in November 2009.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
ST. JOSEPH'S HEALTHCARE: Moody's Affirms 'Ba1' Bond Rating
----------------------------------------------------------
Moody's Investors Service has affirmed St. Joseph's Healthcare
System's (SJHS), NJ Ba1 bond rating on outstanding debt of $238.5
million issued by New Jersey Health Care Facilities Finance
Authority. The rating outlook remains stable.
Summary Rating Rationale
The affirmation of the Ba1 bond rating and stable outlook reflect
SJHS' sizable presence as an academic tertiary medical center,
safety net provider, and state designated trauma center in the
demographically challenged service area of Paterson, New Jersey
and more favorable surrounding townships. Operating performance
and balance sheet measures, while still modest, have improved in
the current fiscal year, following two years of unfavorable
performance. SJHS has completed its major construction at both
campuses and has seen utilization and market share grow during
this period.
Strengths
* Sizable healthcare system with two acute care hospitals, a
combined $700 million revenue base and over 37,000 admissions
in fiscal year (FY) 2011; the flagship hospital is an academic
tertiary medical center and state designated trauma center
offing a wide array of services including cardiac care and
regional perinatal services
* Completed construction and occupation of the new critical care
building at St. Joseph's Regional Medical Center (SJMC) in
Paterson increasing the hospital's capacity for private rooms,
expanding the emergency room, and opening a new operating room
suite in fiscal years 2011 and 2010; final phase to renovate
the old emergency room and connect to the new emergency room
completed in FY 2012
* Strong market share in four county service area growing to 35%
in FY 2011 from 33% in FY 2009 during extensive construction
at both hospital campuses
* Growth in all utilization measures, through nine months of FY
2012, especially in emergency room visits that grew 6.8% over
the prior year and drove inpatient admission growth of 1.4%
over the prior year; continued growth in outpatient surgeries
with the new operating room suites and strong growth in open
heart surgeries with the new cardiologists
* Improved operating performance through nine months of FY 2012
with an operating cash flow margin of 7.9% (after
reclassifying interest income to non-operating revenue from
other operating revenue) compared to the operating cash flow
margin of 5.0% through the same period the prior year
* Growth in absolute unrestricted cash and investments to $134
million or 69 days cash on hand from $120 million or 65 days
cash mainly due to the sale of an asset and good cash flow;
SJMC continues to benefit from a joint venture related to the
sold asset
* Non-unionized workforce and Magnet status designation for the
last nine years; SJHS is the first hospital in New Jersey to
receive the designation for three consecutive terms
Challenges
* The system is leveraged due to a large increase in debt during
FY 2008 to fund extensive renovations and expansion at both
system hospitals; cash-to-debt is light at 51% and debt-to-
cash flow remains elevated at 5.6 times when annualizing nine
months of FY 2012, however improved over the prior year when
cash-to-debt was 44% and debt-to-cash flow was 10.5 times
* Significant reliance on state subsidies for profitability
($84.5 million representing 255% of the $33.1 million in
operating cash flow in FY 2011); thus far the subsidies for
hospitals have remained consistent but with slow economic
recovery, future state budget stress could force funding cuts
placing material strain on cash flow of St. Joseph's
* Location of the flagship hospital, St. Joseph's Regional
Medical Center, in Paterson with a below average socioeconomic
demographic as evidence by the high percentage (25%) of
Medicaid patients, more than twice national median of 13%
Outlook
The stable outlook reflects SJMC's size and presence in the
market, its improved financial performance in interim FY 2012,
good balance sheet growth and the completion of the major
construction projects limiting future capital needs. Furthermore,
utilization metrics and market share have also continued to grow
throughout the construction period.
WHAT COULD MAKE THE RATING GO UP
Continued volume and market share growth; sustained improved
financial performance leading to improved debt ratios; growth in
liquidity and improvement in balance sheet measures
WHAT COULD MAKE THE RATING GO DOWN
Decline in patient volumes leading to material market share loss;
continued modest operating performance leading to softer debt
ratios; weakening of liquidity ratios; material increase in debt
without commensurate increase in cash flow generation
The principal methodology used in this rating Not-For-Profit
Healthcare Rating Methodology published in March 2012.
STAMP FARMS: Has Until Dec. 14 to File Schedules
------------------------------------------------
Stamp Farms, L.L.C., and three affiliates have until Dec. 14 to
file their schedules of assets and liabilities, and statements of
financial affairs, according to the case docket.
The Debtors, upon filing for bankruptcy, have sought Court
permission to pay prepetition trust fund taxes, and sales and use
taxes; and to continue using existing cash management system,
existing bank accounts, and business forms.
Stamp Farms, L.L.C., and three affiliates sought Chapter 11
protection (Bankr. W.D. Mich. Lead Case No. 12-10410) on Nov. 30,
2012, in Grand Rapids, Michigan. Stamp Farms began in 1968 with
its purchase of 168 acres of farmland in Decatur, Michigan. The
family was also heavily involved in the swine industry, operating
a 500 sow swine operation until 1995. In 1997, Mike Stamp took
over operations of Stamp Farms' 1500 acres and has grown the farm
operation to cover 20,000+ acres across six southwestern Michigan
counties.
Stamp Farms estimated at least $10 million in assets and at least
$50 million in liabilities in its bare-bones petition.
Mr. Stamp also filed a Chapter 11 petition (Case No. 12-10430).
Judge Scott W. Dales oversees the case. The Debtor has hired the
law firm of Varnum LLP as counsel.
SUN HEALTHCARE: Moody's Says Genesis' Buyout Modest Credit Pos.
---------------------------------------------------------------
Moody's Investors Service commented that the reported closing of
the acquisition of Sun Healthcare Group, Inc. by Genesis
Healthcare LLC, a wholly owned subsidiary of FC-GEN Operations
Investment, LLC (collectively Genesis) is a modest credit positive
given the repayment of a portion of the term loan. However there
is no immediate impact on the ratings of Genesis.
Moody's understands that simultaneous with the closing of the
merger, Sun's hospice business was sold to Life Choice Hospice for
approximately $85 million. Genesis used the net cash proceeds from
the hospice business divestiture to repay $75 million of its
existing term loan. Therefore, certain LGD assessments have been
revised as described below. Additionally, Moody's has withdrawn
the ratings of Sun.
Following is a summary of Moody's rating actions:
Ratings unchanged/LGD assessments revised:
FC-GEN Operations Investment, LLC:
Corporate Family Rating, B2
Probability of Default Rating, B2
Genesis Healthcare LLC:
Senior secured term loan due 2018, to B2 (LGD 3, 44%) from B2
(LGD 3, 45%)
Ratings withdrawn:
Sun Healthcare Group, Inc.:
Senior secured revolving credit facility expiring 2015, Ba1
(LGD 2, 17%)
Senior secured term loan due 2016, Ba1 (LGD 2, 17%)
Corporate Family Rating, B1
Probability of Default Rating, B1
Speculative Grade Liquidity Rating, SGL-3
Ratings Rationale
The principal methodology used in rating Genesis was the Global
Healthcare Service Providers Industry Methodology published in
December 2011.Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
SUNGARD DATA: Moody's Rates $720-Mil. Sr. Secured Term Loan 'Ba3'
-----------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to SunGard Data
Systems Inc.'s proposed $720 million senior secured term loan B
due 2019. All other ratings, including the B2 corporate family
rating (CFR), and the stable outlook remain unchanged. Proceeds
from these notes along with available cash will be used to fund a
$750 million dividend payment to shareholders.
Ratings Rationale
While the debt financed dividend payment is credit negative, as
the new debt will add about a half turn to SunGard's adjusted debt
to EBITDA (currently 5.3 times), total reported debt will still
have decreased by about $1 billion from December 31, 2011 to about
$6.8 billion. SunGard reduced leverage earlier this year (from mid
6 times adjusted debt to EBITDA) with the completion of the sale
of its Higher Education (HE) business, in which net proceeds of
$1.22 billion were used to repay some of its senior secured credit
facility term loans. In addition, SunGard paid off $500 million of
senior notes using cash on hand.
However, the B2 corporate family rating (CFR) reflects Moody's
expectation that SunGard's financial leverage will likely remain
elevated in the high 5 times range through 2013. The B2 rating
also incorporates the underperformance of the AS business relative
to the FS business. AS' revenues and profits have deteriorated in
recent years, as SunGard has not executed effectively in a
recovery/business continuity industry that is otherwise showing
growth.
This dividend payment issued to the private equity owners is to
provide some return on investment now, given the expectation of
higher dividend tax rates and in Moody's view, a delay in the
anticipated initial public offering (IPO). For a viable IPO story,
Moody's thinks that SunGard will have to demonstrate sustained
organic revenue growth in its core Financial Systems (FS) business
and stabilization of the Availability Services (AS) business. With
the increased leverage, which is a reversal of SunGard's recent
debt reduction initiatives, the IPO timetable will likely be
delayed, by perhaps several years.
Consistent revenue and profitability growth (in the low single
digits) with adjusted debt to EBITDA under 5x on a sustained basis
could result in a higher rating. The rating could be lowered if
revenue or operating profitability were to decline (e.g.,
continued revenue and operating margin erosion in Availability
Services) such that the company's ratio of adjusted debt to EBITDA
were to exceed 7x on a sustained basis.
The stable outlook reflects Moody's expectation of flat revenue
growth in 2013 given the weakness in the global financial services
industry and the time required to turnaround the Availability
Services business. Moody's expects modest improvement to its
financial leverage arising from cost savings and annual free cash
flow of about $400 million. The stable outlook also assumes
SunGard will not increase its debt leverage significantly or make
any further dividend payments to its private equity sponsors.
Ratings assigned:
Senior Secured Term Loan B -- rated Ba3 (LGD2 - 28%)
The principal methodology used in rating SunGard Data Systems Inc.
was the Global Business & Consumer Service Industry Rating
Methodology published in October 2010. Other methodologies used
include Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.
With over $4.2 billion of projected annual revenues, SunGard Data
Systems Inc. is a provider of software and IT services, and is
owned by a consortium of private equity investors (including Bain,
Blackstone, KKR, Silver Lake, Texas Pacific Group, GS Partners,
and Providence Equity).
SUSQUEHANNA AIRPORT: Moody's Rates Sub. Revenue Bonds 'Ba1'
-----------------------------------------------------------
Moody's Investors Service has assigned a Baa3 rating to the
Susquehanna Area Regional Airport Authority's (SARAA) Airport
System Revenue Bonds Series 2012A (AMT) and Airport System Revenue
Bonds Series 2012B (Non-AMT), a Ba1 rating to the Subordinate
Airport System Revenue Bonds Series 2012C (Non-AMT). Moody's has
also affirmed the Baa3 rating on outstanding senior lien parity
bonds. The outlook is stable. The authority operates Harrisburg
International Airport (HIA) and three general aviation facilities:
Capital City Airport, Franklin County Regional Airport, and
Gettysburg Regional Airport.
Opinion
Issue: Airport System Revenue Bonds, Series 2012A (AMT); Rating:
Baa3; Sale Amount: $55,905,000; Expected Sale Date: 12-03-2012;
Rating Description: Revenue: Government Enterprise
Issue: Airport System Revenue Bonds, Series 2012B (Non-AMT);
Rating: Baa3; Sale Amount: $47,100,000; Expected Sale Date: 12-03-
2012; Rating Description: Revenue: Government Enterprise
Issue: Subordinate Airport System Revenue Bonds, Series 2012C
(Non-AMT); Rating: Ba1; Sale Amount: $15,275,000; Expected Sale
Date: 12-03-2012; Rating Description: Revenue: Government
Enterprise
Ratings Rationale
The rating is based on the airport's position in a competitive air
service market, the economic condition of the local area, and the
airport's strained finances. The stable outlook is based on recent
strong recovery in enplanement levels that is expected to improve
financial margins over the next twelve to eighteen months and a
growing history of good management of the airport's financial
challenges.
The authority does not have any fiscal connection to the City of
Harrisburg (rating withdrawn) or the member counties, so there has
been no impact from the fiscal concerns of the city and the
surrounding areas. The below-average economic conditions of the
service area are expected to persist and will continue to limit
enplanement growth; however, the budgetary and fiscal concerns of
the local area governments should not have any impact on the
authority's credit.
Strengths
* HIA was able to replace lost service by AirTran with new
service from Frontier and Allegiant, though incentives and
revenue guarantees from Dauphin County were provided to
attract service
* Newly renovated airfield and terminal facilities should not
require significant capital spending over the long-term and
total debt service requirements are level through 2033
* Total debt service coverage is expected to remain at or above
1.3 times through the forecast period with no enplanement
growth required
Challenges
* High debt levels are expected to keep financial and debt
service coverage margins thin
* Elevated cost per enplanement of $14.66 in 2011, which is
significantly higher than Moody's medians
* Historically volatile enplanement levels indicate a propensity
for airlines to reduce service to this market in times of
financial stress
* Low cash reserves limit financial flexibility
* The airport operates in a highly competitive environment with
two larger airports in Philadelphia and Baltimore within 110
miles.
Outlook
The stable outlook is based on stable enplanements and adequate
revenues that have returned financial margins to satisfactory
levels.
What could change the rating -- UP
Sustained enplanement and revenue growth that widens financial
margins and improves total debt service coverage ratios above 1.30
by Moody's net revenue calculation on a sustained basis could have
a positive impact on the rating. A significant increase in
financial liquidity could also place positive pressure on the
rating.
What could change the rating -- DOWN
Narrowing of financial margins, liquidity or debt service coverage
below the rate covenant due to reduced service from air carriers
could have a negative rating impact.
The principal methodology used in this rating was Airports with
Unregulated Rate Setting published in July 2011.
TARGA RESOURCES: Moody's Rates Add-On Senior Notes 'Ba3'
--------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to Targa Resources
Partners LP's tack-on offering of $200 million senior unsecured
notes due 2023. The proceeds from the new senior notes will be
used to finance a portion of the $950 million acquisition of the
Williston Basin midstream assets of Saddle Butte Pipeline LLC
announced on November 15, 2012. The remainder of the acquisition
will be financed using the $380 million of proceeds from Targa's
recent equity offering and approximately $390 million of
borrowings under the partnership's senior secured revolving credit
facility. Targa's other ratings are unchanged and the outlook
remains stable.
"The Saddle Butte acquisition diversifies Targa's asset base and
contributes a new fee-based revenue stream," said Stuart Miller,
Moody's Vice President and Senior Credit Officer. "However, the
high multiple of trailing EBITDA being paid and the significant
capital expenditures required in 2013 to build out the system have
added a degree of vulnerability to Targa's existing credit
rating."
Issuer: Targa Resources Partners LP
US$250M 11.25% Senior Unsecured Regular Bond/Debenture
US$250M 7.875% Senior Unsecured Regular Bond/Debenture
US$325M 6.875% Senior Unsecured Regular Bond/Debenture
US$400M 6.375% Senior Unsecured Regular Bond/Debenture
US$400M 5.25% Senior Unsecured Regular Bond/Debenture
Assignments:
US$200M Senior Unsecured Regular Bond/Debenture, Assigned
Ba3, LGD5 - 70 %
Ratings Rationale
As a result of the Saddle Butte acquisition, Targa will move from
strongly positioned within its a Ba2 Corporate Family Rating (CFR)
to being weakly positioned. The October 2012 note offering that
was used to fund its base business along with the debt incurred to
purchase the Saddle Butte operations are expected to push Targa's
leverage from 3.1x at September 30, 2012 to 4.3x by the end of
2012 (with Moody's standard adjustments). This is a level that is
considered to be high for a Ba2 CFR given Targa's modest scale and
exposure to commodity prices.
In addition, Moody's is expecting Targa to significantly outspend
free cash flow in 2013. Moody's projects that Targa will generate
roughly $450 million of cash flow from operations in 2013 compared
to over $400 million of unit holder distributions and about $900
million of planned capital expenditures pro forma for the Saddle
Butte acquisition. The $850 million shortfall exceeds the $700
million of pro forma availability Targa has under its $1.2 billion
revolving credit facility -- therefore Moody's anticipates
additional capital markets activity in 2013.
The Ba2 CFR also incorporates Moody's expectation that Targa will
have a weak distribution coverage ratio of less than 1.0x at least
through the middle of 2013 when a number of growth projects begin
to generate cash flow. Prior to the Saddle Butte acquisition, the
partnership's relatively low leverage was an offset to this
aggressive level of distributions. The higher leverage in
combination with a weak distribution coverage ratio and an
expectation for negative free cash flow puts Targa's rating in a
precarious position. That being said, Moody's maintains a stable
outlook which is predicated on Moody's belief that Targa will be
able to manage through this period of elevated leverage. The
Saddle Butte acquisition is viewed as a credit enhancing asset
that adds diversification and additional fee-based revenues to
Targa's portfolio of assets. By 2014, it is possible that the cash
flow from the Saddle Butte acquisition will enable Targa to reduce
its exposure to commodity price-linked businesses to less than
40%.
To satisfy its short term liquidity needs, Targa relies on its
$1.2 billion senior secured revolving credit facility. The credit
facility matures in October 2017. Availability after the Saddle
Butte acquisition and the tack-on senior notes will be
approximately $700 million, an amount that is not sufficient to
support the projected out-spending of internally generated cash
flow in 2013. As a result, Moody's expects Targa to issue
additional debt or equity in 2013 to plug the shortfall. The
credit facility incorporates the following financial covenants: a
maximum leverage ratio of 5.5x, a maximum senior leverage ratio of
less than 4.0x, and a minimum interest coverage ratio of 2.25x.
These covenant levels allow for a significant degradation in
financial performance before they would be triggered.
To be considered for an upgrade, Targa would need to show a
meaningful improvement in the proportion of its operating income
being generated from fee-based arrangements, maintain leverage
below 3.5x, and improve the distribution coverage ratio to at
least 1.1x. Alternatively, a negative rating action could be taken
if leverage is not reduced below 4.0x by the end of 2013.
The principal methodology used in rating Targa Resource Partners
LP was the Global Midstream Energy rating methodology published in
November 2010. Other methodologies and factors that may have been
considered in the process of rating this issuer can also be found
on Moody's website.
Targa Resource Partners LP is a mid-sized midstream master limited
partnership headquartered in Houston, Texas.
TEN SAINTS: Court Approves Acceleron Group as Interest Rate Expert
------------------------------------------------------------------
Ten Saints LLC sought and obtained approval from the U.S.
Bankruptcy Court for the District of Nevada to employ Kenneth M.
Wiles of Acceleron Group, LLC, to provide expert witness services
to the Debtor in connection with the formation and confirmation of
the Debtor's plan of reorganization. Mr. Wiles will serve as the
Debtor's interest rate expert.
The Debtor believes Mr. Wiles and Acceleron's professionals are
disinterested within the meaning of Section 101(14) of the
Bankruptcy Code. Mr. Wiles has agreed to provide his services and
those of Acceleron at the rate of $450 per hour for Managing
Directors and $250 per hour for analysts. Additionally, Mr. Wiles
has requested that the Debtor provide a $5,000 retainer, which
will be applied upon the Court's approval of the professional
fees.
About Ten Saints
Four related Las Vegas, Nevada-based entities sought Chapter 11
bankruptcy protection on July 13, 2011. The businesses are owned
or managed by local business people and firms, including Todd
Nigro, Nigro Development LLC, a Nigro family trust and other
investors.
Horizon Village Square LLC (Bankr. D. Nev. Case No. 11-21034) owns
the Vons-anchored Horizon Village Square Shopping Center near
I-515 and Horizon Drive in Henderson. The property includes five
retail buildings with nearly 43,000 square feet of space.
Ten Saints LLC (Bankr. D. Nev. Case No. 11-21028) owns the 134-
room Hampton Inn & Suites at St. Rose Parkway and Seven Hills
Drive in Henderson.
Beltway One Development Group LLC (Bankr. D. Nev. Case No. 11-
21026) owns the Desert Canyon Business Park at Russell Road and
the Las Vegas Beltway. It has two buildings and 15 acres.
Nigro HQ LLC (Bankr. D. Nev. Case No. 11-21014) owns an office
building at 9115 W. Russell Road occupied by Bank of George,
Infinity Plus LLC and Nigro Construction Inc.
Todd Nigro said the four bankruptcies were caused by threatened
foreclosures -- typically related to Wells Fargo Bank demanding
payments to keep loan-to-value ratios at specified levels.
Judge Mike K. Nakagawa presides over the cases. Lawyers at Gordon
Silver serve as the Debtors' bankruptcy counsel. The bankruptcy
petitions estimated assets and debts from $1 million to $10
million each for Nigro HQ; and from $10 million to $50 million in
both assets and debts for Horizon Village, Ten Saints and Beltway
One. The cases are not jointly administered.
A fifth related business, Russell Boulder LLC, filed for
bankruptcy (Bankr. D. Nev. Case No. 10-29724) on Oct. 19, 2010.
It owns the 600-suite Siena Suites extended stay property at
Boulder Highway and Russell Road.
Edward M. Zachary, Esq., at Bryan Cave LLP, in Bryan Cave LLP, in
Phoenix, Ariz., and Robert M. Charles, Jr., Esq., at Lewis and
Roca LLP, in Los Vegas, Nev., represent Wells Fargo Bank, N.A., as
counsel.
THERAPEUTICSMD INC: John Milligan Discloses 9.5% Equity Stake
-------------------------------------------------------------
In a Schedule 13D filing with the U.S. Securities and Exchange
Commission, John C.K. Milligan, IV, disclosed that, as of
Nov. 30, 2012, he beneficially owns 9,861,216 shares of common
stock of TherapeuticsMD, Inc., representing 9.55% of the shares
outstanding. A copy of the filing is available for free at:
http://is.gd/pkPf2e
About TherapeuticsMD
Boca Raton, Fla.-based TherapeuticsMD, Inc., is a specialty
pharmaceutical company focused on the sales, marketing and
development of branded and generic pharmaceutical and OTC products
primarily for the women's healthcare market. The Company's
products are designed to improve the health and well-being of
women from pregnancy through menopause while using information
technology to lower costs for the Patient, Physician and Payor.
As reported in the TCR on April 2, 2012, Rosenberg Rich Baker
Berman & Company, in Somerset, N.J., expressed substantial doubt
about TherapeuticsMD, Inc.'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 a loss from operations of approximately $5.4 million
and had negative cash flow from operations of approximately
$5.0 million.
The Company's balance sheet at Sept. 30, 2012, showed $3.51
million in total assets, $7.84 million in total liabilities and a
$4.33 million total stockholders' deficit.
THERAPEUTICSMD INC: Robert Finizio Discloses 24.4% Equity Stake
---------------------------------------------------------------
In a Schedule 13D filing with the U.S. Securities and Exchange
Commission, Robert G. Finizio disclosed that, as of Nov. 30, 2012,
he beneficially owns 25,089,067 shares of common stock of
TherapeuticsMD, Inc., representing 24.43% of the shares
outstanding. A copy of the filing is available for free at:
http://is.gd/WFUuPQ
About TherapeuticsMD
Boca Raton, Fla.-based TherapeuticsMD, Inc., is a specialty
pharmaceutical company focused on the sales, marketing and
development of branded and generic pharmaceutical and OTC products
primarily for the women's healthcare market. The Company's
products are designed to improve the health and well-being of
women from pregnancy through menopause while using information
technology to lower costs for the Patient, Physician and Payor.
As reported in the TCR on April 2, 2012, Rosenberg Rich Baker
Berman & Company, in Somerset, N.J., expressed substantial doubt
about TherapeuticsMD, Inc.'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 a loss from operations of approximately $5.4 million
and had negative cash flow from operations of approximately
$5.0 million.
The Company's balance sheet at Sept. 30, 2012, showed $3.51
million in total assets, $7.84 million in total liabilities and a
$4.33 million total stockholders' deficit.
THINKFILM LLC: Owner Sues Bankruptcy Trustee
--------------------------------------------
The Hollywood Reporter's Alex Ben Block reports that movie
financier David Bergstein's UK-based Pangea Media Holdings filed a
lawsuit in federal court in Los Angeles on Monday claiming that
Ronald Durkin, the bankruptcy court trustee of Mr. Bergstein's
five other companies, including ThinkFilm, is "waging a personal
and vindictive war" against him while conspiring in a "broad and
wide-ranging attempt to destroy Bergstein."
The report relates the dispute arises from the company's dealings
with Daro Film Distribution, a Monaco-based film licensing company
that Mr. Bergstein claims owes him money. The suit says Mr.
Bergstein has been frustrated in his efforts to collect because
Mr. Durkin and his counsel Leonard Gumport have pursued the money
because the licensed movies are or were owned by the now-bankrupt
companies they oversee.
"The trustee has taken his improper activity to new heights with
respect to Daro's payment," the suit alleges, according to the
report, adding that the trustee has ignored his attempts to settle
the matter without further litigation. According to the report,
the lawsuit includes a long list of allegations that the trustee
tried to force Mr. Bergstein into a settlement of the bankruptcy
case "on extortionate, egregious, and outrageous terms" that would
require payment of more than $10 million.
Mr. Durkin's lead attorney Mr. Gumport declined to respond
directly to the charges in the suit or to comment on the merits of
the claim, according to the report.
About Thinkfilm LLC
CapCo Group LLC and four other companies controlled by David
Bergstein are part of a wider network of entities that distribute
and finance films. Among the approximately 1,300 films they have
the rights to are "Boondock Saints" and "The Wedding Planner."
Several creditors filed for involuntary Chapter 11 bankruptcy
against the companies on March 17, 2010 -- CT-1 Holdings LLC
(Bankr. C.D. Calif. Case No. 10-19927); CapCo Group, LLC (Bankr.
C.D. Calif. Case No. 10-19929); Capitol Films Development LLC
(Bankr. C.D. Calif. Case No. 10-19938); R2D2, LLC (Bankr. C.D.
Calif. Case No. 10-19924); and ThinkFilm LLC (Bankr. C.D. Calif.
Case No. 10-19912). Judge Barry Russell presides over the cases.
The Petitioners are represented by David L. Neale, Esq., at Levene
Neale Bender Rankin & Brill LLP.
Judge Barry Russell formally declared David Bergstein's ThinkFilm
LLC and Capitol Films Development bankrupt on Oct. 5, 2010.
Mr. Bergstein is being sued for tens of millions of dollars by
nearly 30 creditors -- including advertisers, publicists and the
Writers Guild West. Five Bergstein controlled companies have been
named in the suit.
THIRTEENTH FLOOR: 6th Cir. Keeps Judgment for Louisville Galleria
-----------------------------------------------------------------
The U.S. Court of Appeals for the Sixth Circuit affirmed judgment
entered for Louisville Galleria LLC in a breach of contract
dispute with Premier Health and Fitness Clubs.
Galleria operates a multi-use real estate development in downtown
Louisville, Kentucky, known as Fourth Street Live, which consists
of several buildings, including the historic Kaufman-Strauss
Building. Premier signed a lease with Galleria in 2003 to open a
gym at Fourth Street Live. Problems arose, and the gym never
opened. Premier filed for bankruptcy instead in 2004. Premier
sued Galleria for breach of contract, and Galleria counterclaimed
for unpaid rent.
During Premier's bankruptcy proceedings, Galleria sent a notice of
termination of the lease, and the Chapter 7 trustee for Premier
declined to assume the lease.
Galleria filed proofs of claim. Acting on behalf of the trustee,
Premier sued Galleria, alleging various breaches of the lease.
Galleria counterclaimed.
Aafter a five-day bench trial, the bankruptcy court ruled for
Galleria in March 2012. The bankruptcy court considered the lease
fully integrated, determined that Premier breached the lease and
awarded damages totaling $1,269,739.80, which included unpaid rent
dating from July 29, money spent by Galleria to discharge
mechanics' and materialmen's liens and attorney's fees. The
district court affirmed, and Premier took an appeal to the Sixth
Circuit.
The case before the appeals court is, THIRTEENTH FLOOR
ENTERTAINMENT CENTER, LLC, Appellant, v. LOUISVILLE GALLERIA, LLC,
Appellee, No. 12-5358 (6th Cir.). A copy of the Sixth Circuit's
Nov. 30, 2012 decision is available at http://is.gd/FSfWIPfrom
Leagle.com.
Louisville, Kentucky-based Thirteenth Floor Entertainment Centers,
LLC, fdba Premier Health and Fitness, LLC, filed for Chapter 11
bankruptcy (Bankr. W.D. Ky. Case No. 04-36349) on Oct. 4, 2004.
Judge Thomas H. Fulton presides over the case. Bruce D. Atherton,
Esq., at Atherton & Associates LLC, served as the Debtor's
counsel. In its petition, the Debtor estimated under $50,000 in
assets and $1 million to $10 million in debts.
The case was converted to Chapter 7 on Nov. 8, 2004. Gordon A.
Rowe, Jr., was appointed Chapter 7 trustee.
TMX FINANCE: Moody's Cuts Corporate Family Rating to 'B3'
---------------------------------------------------------
Moody's Investors Service downgraded TMX Finance LLC's Corporate
Family ("CFR") and Senior Secured Note ratings to B3 from B2. The
outlook is stable.
Ratings Rationale
The downgrade reflects Moody's concern regarding the consolidated
company's increased leverage and lower expected debt service
coverage metrics after the issuance by TMX's parent of $100
million of PIK notes on 31 October 2012. The PIK notes issuance
increased the company's consolidated total debt outstanding by 26%
and total effective leverage (balance sheet debt divided by common
equity) to 2.3x from 1.5x. The downgrade also reflects continuing
execution risk associated with TMX's aggressive store growth,
though Moody's expects growth to be limited to existing products
and current geographic footprint. TMX's growth plans coupled with
turnover in the company's senior management team, including
departures of the company's CFO and President, leave TMX exposed
to potential issues with its aggressive store growth.
The B3 CFR also reflects TMX's focus on subprime lending. The high
effective interest rates and fees of the company's lending
products expose it to political, regulatory and litigation risks,
particularly since regulatory focus on subprime financial services
providers has heightened in recent years. TMX's limited geographic
diversification also exposes it to potential state and city-
specific regulation (such as recently passed city ordinances
limiting subprime lending activities in Dallas, Austin and San
Antonio) as well to as adverse economic developments in areas of
operation.
The ratings could be upgraded if over time TMX demonstrates
profitability consistent with the company's targets and as
leverage decreases through earnings retention once new stores
start ramping up. The ratings could be downgraded if the company's
profitability, liquidity or capital position significantly
deteriorates, for example due to elevated net charge-off rates or
a regulatory action against title lenders.
The principal methodology used in this rating was Finance Company
Global Rating Methodology published March 2012.
TMX is an auto title loan company headquartered in Savannah, GA.
TPC GROUP: S&P Keeps 'B+' CCR on Watch on Acquisition Agreement
---------------------------------------------------------------
Standard & Poor's Ratings Services said its ratings on TPC Group
LLC, including the 'B+' corporate credit rating, remain on
CreditWatch with negative implications, where S&P placed them
on Aug. 27, 2012. The initial CreditWatch placement followed the
announcement that TPC has entered into an agreement to be acquired
by First Reserve Corp. and SK Capital Partners at $40 per share.
The ratings have remained on CreditWatch, as the proposed
acquisition price has been increased by First Reserve and SK, in
light of nonbinding offers of interest from a second interested
party, Innospec Inc.
"We also assigned our 'B' issue-level rating (same as the expected
CCR) to TPC Group, Inc. proposed $655 million senior secured
notes, with a recovery rating of '4', indicating our expectation
of average (30% to 50%) recovery in the event of a payment
default. The 'B+' issue-level ratings on the existing $350 million
senior secured notes remain on CreditWatch with negative
implications, and will be withdrawn upon successful close of the
transaction after they have been repaid," S&P said.
"The CreditWatch update follows the announcement that Innospec was
withdrawing its offer to acquire TPC, and that the company's Board
of Directors urged its shareholder to vote for the acquisition by
First Reserve and SK Capital at $45 per share," said credit
analyst Danny Krauss.
"We will monitor developments relating to this transaction and
will resolve the CreditWatch listings if the acquisition closes.
If the transaction closes as currently structured, we expect to
lower TPC's corporate credit rating to 'B' from 'B+'. Conversely,
if the transaction does not proceed, we would likely affirm the
existing ratings on TPC Group at their current levels and withdraw
the issue-level ratings on the $655 million senior secured notes,"
S&P said.
TRANS-LUX CORP: Fires CFO; Todd Dupee Named CFO Pro Tempore
-----------------------------------------------------------
Trans-Lux Corporation terminated the employment of Sami Sassoun,
senior vice president and chief financial officer effective
Nov. 30, 2012.
Effective Dec. 3, 2012, Todd Dupee was appointed by the Company to
serve as the Company's Vice President, Controller and Interim
Chief Financial Officer. Currently, Mr. Dupee receives
compensation of $62,600 per annum. Mr. Dupee, 40, has been with
the Company since 1994 and had previously served as Staff
Accountant, Accounting Manager and Assistant Vice President. Mr
Dupee holds a B.S. in Accountancy from Bentley College.
About Trans-Lux Corporation
Norwalk, Conn.-based Trans-Lux Corporation (NYSE Amex: TLX) is a
designer and manufacturer of digital signage display solutions for
the financial, sports and entertainment, gaming and leasing
markets.
The Company reported a net loss of $1.42 million in 2011, compared
with a net loss of $7.03 million in 2010.
The Company's balance sheet at Sept. 30, 2012, showed $23.62
million in total assets, $20.37 million in total liabilities, and
$3.25 million in total stockholders' equity.
UNIVERSITY GENERAL: To Buy South Hampton Hospital for $30 Million
-----------------------------------------------------------------
University General Health System, Inc., has executed an agreement
to purchase South Hampton Community Hospital in Dallas, Texas,
effective Dec. 31, 2012. The hospital is a 111-bed general acute
care facility located less than 10 miles southwest of downtown
Dallas. The hospital currently has the ability to provide patient
services centered around the following areas of specialization:
* Bariatric
* Emergency Medicine
* Intensive Care
* Diagnostic Imaging
* Laboratory Services
* Orthopedic
* Pain Management
* Physical Therapy
* Respiratory Therapy
* Sleep Lab
* Speech Therapy
* Wound Care
The hospital has five operating rooms, plus an endoscopy lab,
where the following surgical procedures are capable of being
performed:
* Bariatric Surgery
* Colorectal Surgery
* General Surgery
* Minimally Invasive Surgery
* Orthopedic Surgery
* Podiatric Surgery
* Urological Surgery
The hospital currently has 270 physicians on its medical staff
roster and an affiliated 22,000 square-foot medical office
building that is approximately 55% occupied. University General
has agreed to acquire the facilities and operations for $30
million. Texas-based Houston National Bank is expected to finance
$28.5 million of the purchase price.
"This expansion into Dallas and the South Hampton community
represents an opportunity for University General Health System to
further replicate the existing physician-centric, multi-specialty,
integrated, diversified regional health care delivery system we
have successfully established in the Houston metropolitan area,"
stated Hassan Chahadeh, M.D., the Company's Chairman and Chief
Executive Officer. "We believe expansion into the Dallas market
and the current leadership at South Hampton Community Hospital
will be highly complementary to our long-term strategic growth
plan. We expect the South Hampton Hospital to contribute at least
$40 million to the Company's revenue and $15 million to adjusted
EBITDA in the year ending December 31, 2013."
"South Hampton Community Hospital will be renamed and re-branded
in early 2013 as University General Hospital - Dallas," commented
Donald Sapaugh, president of University General Health System,
Inc. "We plan to fund at least one million dollars in capital
investments and to supply working capital, as needed, to assure
that the hospital can provide first-class concierge health care
service in a five-star environment, which University General
considers an important competitive advantage in the marketplace."
About University General
University General Health System, Inc., located in Houston, Texas,
is a diversified, integrated multi-specialty health care provider
that delivers concierge physician- and patient-oriented services.
UGHS currently operates one hospital and two ambulatory surgical
centers in the Houston area. It also owns a revenue management
company, a hospitality service provider and facility management
company, three senior living facilities and manages six senior
living facilities.
In the auditors' report accompanying the consolidated financial
statements for the year ended Dec. 31, 2011, Moss, Krusick &
Associates, LLC, in Winter Park, Florida, expressed substantial
doubt about University General's ability to continue as a going
concern. The independent auditors noted that the Company has
suffered recurring losses and negative operating cash flows, and
has negative working capital.
University General reported a net loss of $2.38 million in 2011,
following a net loss of $1.71 million in 2010.
The Company's balance sheet at Sept. 30, 2012, showed
$140.67 million in total assets, $128.38 million in total
liabilities and $3.79 million in series C, convertible redeemable
preferred stock, and $8.49 million in total equity.
UNIVERSAL BIOENERGY: Receives Unsolicited Purchase Proposals
------------------------------------------------------------
Universal Bioenergy, Inc., disclosed in a regulatory filing that
management has on occasion received unsolicited letters of
interest from several companies over the past few months, that
have expressed an interest in acquiring the Company, acquiring a
large equity stake in the Company, or in purchasing some of its
assets, such as the Company's outstanding corporate debt, or
electric utility customer contracts. These have come from
companies that include but are not limited to; the Company's
creditors, the Company's investors and other parties. The offers
have been made either directly from those companies, or through
their representatives, in which case some of the companies have
desired to remain anonymous for a period of time.
"Management cannot initially, determine the validity of the offer
and the strength of the companies expressing an interest in a
potential acquisition, without opening some exploratory
discussions and some reasonable measure of preliminary due
diligence. Management will typically review all of these
potential inquiries, or expressed interest to ascertain if the
offer is genuine, their true motivations, and attempt to gauge the
real level of interest of the offer, prior to presenting it to the
Board of Directors. In the event that management determines that
an offer is serious, it may open discussions and sign appropriate
non-disclosure documents, and obtain a Letter of Intent or Term
Sheet from the offeror, and begin its due diligence. Some of the
factors that we will consider will be the financial strength of
the company making the offer, obtaining the "best price" for the
acquisition or the assets, the potential economic benefit to our
shareholders, tax liability, legal issues, accounting and
financial impacts, and the potential synergies and strategic fit
of the acquiring company."
Acquisitions can take up a great deal of time and expense, and
require that the Company engages its mergers and acquisitions
(M&A) team of experts, including its experienced investment
bankers, accountants, auditors, lawyers and other technical
personnel to assist in the due diligence and closing the potential
transaction. Although the Company reviews and considers all
unsolicited offers, no decisions have been made on any of these
offers, and furthermore, the Company can provide no assurances
that it would pursue or otherwise enter into a formal agreement
for any of these transactions.
About Universal Bioenergy
Headquartered in Irvine, California, Universal Bioenergy Inc.
develops markets alternative and natural energy products
including, natural gas, solar, biofuels, wind, wave, tidal, and
green technology products.
After auditing the 2011 results, Bongiovanni & Associates, CPA'S,
in Cornelius, North Carolina, noted that the Company has suffered
recurring operating losses, has an accumulated deficit, has
negative working capital, and has yet to generate an internal cash
flow that raises substantial doubt about its ability to continue
as a going concern.
The Company reported a net loss of $2.11 million in 2011,
compared with a net loss of $2 million in 2010.
The Company's balance sheet at Sept. 30, 2012, showed
$7.37 million in total assets, $9.12 million in total liabilities,
and a $1.74 million total stockholders' deficit.
USA SPRINGS: Trustee Hiring Firm to Sue Malom Group
---------------------------------------------------
Bob Sanders, writing for New Hampshire Business Review, reports
that the USA Springs bankruptcy trustee has asked the Bankruptcy
Court for authority to hire the Boston-based firm of Riemer and
Braunstein to try to enforce a $60 million judgment against Malom
Group AG by working with Swiss authorities who are investigating a
massive fraud case against the firm.
The report recounts USA Springs had tried to build a bottling
plant in the towns of Nottingham and Barrington despite opposition
of some residents who claimed that the operation would jeopardize
their drinking water. USA Springs obtained a permit, but ran out
of money and -- with the plant only partly built -- filed for
Chapter 11 bankruptcy in the summer of 2008 to put together a
financing package. The debtor, through its attorney, Alan
Braunstein, put together a package based on $60 million in
promised financing from Malom, which never came through with the
financing.
According to the report, Mr. Braunstein quit as USA Springs'
attorney in August 2012 citing "irreconcilable differences" with
his client, which had been critical of how Mr. Braunstein handled
the Malom matter, but not before obtaining a $60 million judgment
against Malom. Mr. Braunstein claims his firm was owed $2 million
for his work in the case, but the estate won't have enough to
money pay that fee, even it was able fetch a good price for the
land at auction.
The report relates the bankruptcy trustee, Timothy P. Smith, wants
to retain another partner of Braunstein's firm, Peter Sutton, to
attempt to collect on that judgment. Mr. Sutton said his firm
would do the job for free, unless it is able to collect on the
judgment.
The report says Malom indicated it plans to object.
About USA Springs
Based in Nottingham, New Hampshire, USA Springs Inc. filed for
Chapter 11 bankruptcy protection (Bankr. D. N.H. Case No.
08-11816) on June 27, 2008. Armand M. Hyatt, Esq., at Hyatt &
Flynn, PLLC, and Earl D. Munroe, Esq., at Muroe & Chew, represent
the Debtor in its restructuring efforts. The Official Committee
of Unsecured Creditors retained Terrie Harman, Esq., at Harman Law
Offices, as counsel. In its schedules, the Debtor disclosed
$127.0 million in assets and $13.9 million in liabilities.
USI INC: S&P Affirms 'B-' Counterparty Credit Ratings; Off Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B-' counterparty
credit ratings on USI Inc. (USI Holdings Inc. is the current
issuer--all debt is to be issued by Compass Investors Inc., which
is expected to be renamed "USI Inc." following the completion of
the acquisition) and removed it from CreditWatch with developing
implications, where S&P placed it on Nov. 26, 2012, following the
announced acquisition of USI by Onex Corp. The outlook is stable.
"At the same time, we assigned our 'B-' debt rating with a '3'
recovery rating, indicating our expectation for meaningful (50%-
70%) recovery of principal in the event of a default, to USI's
proposed senior secured facilities, consisting of a $1.025 billion
term loan due 2019 and $150 million revolver (undrawn at close)
due 2017. We also assigned our 'CCC' debt rating with a '6'
recovery rating, indicating our expectation for negligible a (0%-
10%) recovery of principal in the event of a default, to USI's
proposed $630 million unsecured notes due 2020," S&P said.
"The rating affirmation reflects our belief that, although the
proposed recapitalization under private equity sponsor Onex
results in meaningfully weaker credit protection measures, USI's
business and financial profile will continue to support the
current rating," said Standard & Poor's credit analyst Julie
Herman. "The stable outlook reflects our view that the company
will be able to de-lever modestly over the next year based on
favorable organic and inorganic earnings growth trends."
"The announced $2.3 billion acquisition of USI by Onex includes a
sizeable debt funding component that materially worsens USI's
credit fundamentals. Specifically, the acquisition is being funded
primarily through $1.655 billion in new debt (with all $1.1
billion of existing debt being retired), as well as an equity
contribution of about $707 million. As a result of the increased
debt load, Standard & Poor's adjusted total debt to EBITDA, pro
forma for the transaction, deteriorates to 8.1x (excluding earnout
payments) from 5.5x for the last 12 months (LTM) ended Sept. 30,
2012, before the transaction. Similarly, adjusted EBITDA fixed-
charge coverage, pro forma for the transaction, deteriorates to
1.7x from 2.9x for the LTM ended Sept. 30, 2012, before the
transaction," S&P said.
"The outlook is stable. For 2013, we expect USI will maintain its
trajectory of improving performance, with an overall organic
growth rate in the positive low-single-digit area arising from
successful sales strategies and producer investments, as well as
improving rate and exposure trends in the company's markets. Total
revenue growth will likely be at least 10% as the company
supplements positive organic traction with acquisition-related
growth. We also expect the company's EBITDA margins (excluding
earn-out payments) to continue to be around 30% as it continues to
focus on efficiency initiatives. As a result of these performance
gains, we also expect credit protection measures to improve
modestly by year-end 2013, with a debt to LTM adjusted EBITDA of
around 7x and EBITDA fixed-charge coverage of around 2x," S&P
said.
"We could lower the ratings if the company's revenue and
profitability fall short of our expectations due to the
unsuccessful execution of recent strategic initiatives, a negative
market occurrence, or more-aggressive financial management," Ms.
Herman continued. "Weak liquidity or debt leverage of more than 9x
would also likely precipitate a downgrade. On the other hand, we
would consider positive rating action if continued favorable
strategic, operating, and financial performance resulting in debt
to adjusted EBITDA sustainable at less than 6.5x."
VALENCE TECH: Hires Michael White as Consultant
-----------------------------------------------
Valence Technology, Inc. asks the U.S. Bankruptcy Court for
permission to employ MJ White, PLLC and designate Michael White as
Consulting CPA.
White will consult with the Debtor on an as-needed, on-call basis
to assist the Debtor with the preparation of its monthly operating
reports to be filed with the Court, and other accounting projects
as needed. The Debtor believes that White will not duplicate the
services that are being provided to the Debtor by any other
professional.
The Debtor proposes to pay MJ White PLLC at the hourly billing
rate of $150.
The firm attests it is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
About Valence Technology
Valence Technology, Inc., filed a Chapter 11 petition (Bankr. W.D.
Tex. Case No. 12-11580) on July 12, 2012, in its home-town in
Austin. Founded in 1989, Valence develops lithium iron magnesium
phosphate rechargeable batteries. Its products are used in hybrid
and electric vehicles, as well as hybrid boats and Segway personal
transporters.
The Debtor disclosed debt of $82.6 million and assets of
$31.5 million as of March 31, 2012. Chairman Carl E. Berg and
related entities own 44.4% of the shares. ClearBridge Advisors,
LLC owns 5.5%.
Valence expects to complete its restructuring during 2012.
Judge Craig A. Gargotta presides over the case. The Company is
being advised by Streusand, Landon & Ozburn, LLP with respect to
bankruptcy matters. The petition was signed by Robert Kanode,
CEO.
On Aug. 8, 2012, the United States Trustee for Region 7 appointed
five creditors to serve on the Official Committee of Unsecured
Creditors of the Debtor.
VUZIX CORP: Stockholders OK Reverse Common Stock Split
------------------------------------------------------
Vuzix Corporation held a special meeting of stockholders at the
Doubletree Hotel, 1111 Jefferson Road, Rochester, New York, on
Nov. 30, 2012.
The stockholders approved an amendment to the Company's Amended
and Restated Certificate of Incorporation to effect a reverse
split of the Company's issued and outstanding Common Stock of not
less than 1 for 25 and not more than 1 for 150, at any time prior
to June 30, 2012, at the discretion of the Company's Board of
Directors.
About Vuzix Corp.
Rochester, New York-based Vuzix Corporation (TSX-V: VZX)
OTC BB: VUZI) -- http://www.vuzix.com/-- is a supplier of Video
Eyewear products in the defense, consumer and media &
entertainment markets.
The Company reported a net loss of $3.87 million in 2011, a net
loss of $4.55 million in 2010, and a net loss of $3.25 million in
2009.
The Company reported a net loss of $3.87 million in 2011, a net
loss of $4.55 million in 2010, and a net loss of $3.25 million in
2009.
The Company's balance sheet at Sept. 30, 2012, showed $2.50
million in total assets, $7.32 million in total liabilities and a
$4.82 million total stockholders' deficit.
After auditing the 2011 annual report, EFP Rotenberg, LLP, in
Rochester, New York, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has incurred substantial losses
from operations in recent years. In addition, the Company is
dependent on its various debt and compensation agreements to fund
its working capital needs. And while there are no financial
covenants with which the Company must comply with, these debts are
past due in some cases.
Bankruptcy Warning
The Company said in its 2011 annual report that its future
viability is dependent on its ability to execute these plans
successfully. If the Company fails to do so for any reason, the
Company would not have adequate liquidity to fund its operations,
would not be able to continue as a going concern and could be
forced to seek relief through a filing under U.S. Bankruptcy Code.
WASHINGTON MUTUAL: Seeks Probe on Alleged Goldman Naked Shorting
----------------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that Washington Mutual
Inc.'s liquidation trust asked a Delaware bankruptcy judge Friday
to let it investigate Goldman Sachs & Co. for potential breach of
contract claims, saying new evidence shows Goldman betrayed its
client by driving its stock price down through a naked short-
selling scheme.
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- was the holding company for Washington
Mutual Bank as well as numerous non-bank subsidiaries.
Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S.
government regulators. The next day, WaMu and its affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns
100% of the equity in WMI Investment. When WaMu filed for
protection from its creditors, it disclosed assets of
$32,896,605,516 and debts of $8,167,022,695. WMI Investment
estimated assets of $500 million to $1 billion with zero debts.
WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal &
Manges LLP in New York City; Mark D. Collins, Esq., at Richards,
Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari,
Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver &
Hedges, LLP. The Debtor tapped Valuation Research Corporation as
valuation service provider for certain assets.
Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New
York, and David B. Stratton, Esq., at Pepper Hamilton LLP in
Wilmington, Del., represent the Official Committee of Unsecured
Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and
William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the
Equity Committee. The official committee of equity security
holders also tapped BDO USA as its tax advisor. Stacey R.
Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis,
Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent
JPMorgan Chase, which acquired the WaMu bank unit's assets prior
to the Petition Date.
Records filed Jan. 24, 2012, say that Washington Mutual Inc.,
former owner of the biggest U.S. bank to fail, has spent
$232.8 million on bankruptcy professionals since filing its
Chapter 11 case in September 2008.
In March 2012, the Debtors' Seventh Amended Joint Plan of
Affiliated, as modified, and as confirmed by order, dated Feb. 23,
2012, became effective, marking the successful completion of the
chapter 11 restructuring process.
The Plan is based on a global settlement that removed opposition
to the reorganization and remedy defects the judge identified in
September. The plan is designed to distribute $7 billion. Under
the reorganization plan, WaMu established a liquidating trust to
make distributions to parties-in-interest on account of their
allowed claims.
WATERFRONT OFFICE: Seeks to Use Lender's Cash Collateral
--------------------------------------------------------
Waterfront Office Building, LP, seeks preliminary and final orders
authorizing it to use cash collateral and grant adequate
protection.
As of the Petition Date, Deutsche Genossenschafts-Hypothekenbank
AG alleges a first priority secured claim against the Debtor's
real estate, including the Debtor's rents to secure a non-recourse
mortgage loan in the face amount of $55,000,000. The Debtor is a
joint borrower with the affiliated debtor, Summer Office Building,
LP.
To the extent the Secured Creditor's liens constitute duly
perfected, nonavoidable liens against the Debtor's assets, and
specifically against the Debtor's cash and accounts receivable,
then the Debtor's cash and cash receipts constitute "cash
collateral," as such term is defined under 11 U.S.C. Sec. 363.
To operate and preserve its going concern value, the Debtor said
it will be required to use and disburse cash collateral during the
period ending Dec. 31, 2012, following the Petition Date, to avoid
immediate and irreparable harm to the Debtor.
As adequate protection against any post-Petition Date erosion of
the Secured Creditor's cash collateral, the Debtor proposes to
grant to the Secured Creditor a replacement lien in all after
acquired cash collateral to the same extent, priority and validity
as existed on the Petition Date, subject and subordinate to a
carveout of the replacements liens for amounts payable by the
Debtor under (i) 28 U.S.C. Sec. 1930(a)(6), and (ii) approved fees
and expenses of the Debtor's and any Committee's court approved
professionals.
About Waterfront Office Building &
Summer Office Building
Stamford, Conn.-based Waterfront Office Building, LP, filed a
voluntary Chapter 11 petition (Bankr. D. Conn. Case No. 12-52121)
in Bridgeport on Nov. 27, 2012, listing $50 million to $100
million in both assets and debts. The Debtor owns a 206,186
square foot multi-tenant office building on 8.1 waterfront acres
with two on site restaurants and an adjacent 71-slip marina.
Summer Office Building LP also filed for Chapter 11 (Bankr. D.
Conn. Case No. 12-52122), listing $10 million to $50 million in
assets and $50 million to $100 million in debts.
Judge Alan H.W. Shiff oversees the Chapter 11 cases. James
Berman, Esq., at Zeisler and Zeisler, P.C., serves as the Debtors'
counsel. The petitions were signed by Paul Kuehner, manager of
managing member of sole member of Debtor's GP.
WATERFRONT OFFICE: Hiring Zeisler & Zeisler as Counsel
------------------------------------------------------
Waterfront Office Building, LP, seeks Bankruptcy Court permission
to employ Zeisler & Zeisler, P.C., as its counsel under a general
retainer.
The Debtor contemplates that Z&Z will render general legal
services to the Debtor as needed throughout the course of the
Chapter 11 case, including litigation and bankruptcy assistance
and advice.
Z&Z will charge the Debtor for its legal services on an hourly
basis in accordance with its ordinary and customary hourly rates
in effect on the date services are rendered. Z&Z will maintain
detailed records of any actual and necessary or
appropriate costs and expenses incurred in connection with the
aforementioned legal services.
The Debtor has provided Z&Z a $35,000 retainer.
To the best of the Debtor's knowledge, information and belief, Z&Z
represents no interest adverse to the Debtor or to its estate in
the matters for which it is proposed to be retained and is a
disinterested person.
About Waterfront Office Building &
Summer Office Building
Stamford, Conn.-based Waterfront Office Building, LP, filed a
voluntary Chapter 11 petition (Bankr. D. Conn. Case No. 12-52121)
in Bridgeport on Nov. 27, 2012, listing $50 million to $100
million in both assets and debts. The Debtor owns a 206,186
square foot multi-tenant office building on 8.1 waterfront acres
with two on site restaurants and an adjacent 71-slip marina.
Summer Office Building LP also filed for Chapter 11 (Bankr. D.
Conn. Case No. 12-52122), listing $10 million to $50 million in
assets and $50 million to $100 million in debts.
Judge Alan H.W. Shiff oversees the Chapter 11 cases. James
Berman, Esq., at Zeisler and Zeisler, P.C., serves as the Debtors'
counsel. The petitions were signed by Paul Kuehner, manager of
managing member of sole member of Debtor's GP.
WATERFRONT OFFICE: Sec. 341 Creditors' Meeting on Dec. 31
---------------------------------------------------------
The U.S. Trustee in New Haven, Conn., will hold a Meeting of
Creditors under 11 U.S.C. Sec. 341(a) meeting in the Chapter 11
case of Waterfront Office Building, LP, on Dec. 31, 2012, at 1:00
p.m. at Office of the UST.
Proofs of claim are due in the case by April 1, 2013.
About Waterfront Office Building &
Summer Office Building
Stamford, Conn.-based Waterfront Office Building, LP, filed a
voluntary Chapter 11 petition (Bankr. D. Conn. Case No. 12-52121)
in Bridgeport on Nov. 27, 2012, listing $50 million to $100
million in both assets and debts. The Debtor owns a 206,186
square foot multi-tenant office building on 8.1 waterfront acres
with two on site restaurants and an adjacent 71-slip marina.
Summer Office Building LP also filed for Chapter 11 (Bankr. D.
Conn. Case No. 12-52122), listing $10 million to $50 million in
assets and $50 million to $100 million in debts.
Judge Alan H.W. Shiff oversees the Chapter 11 cases. James
Berman, Esq., at Zeisler and Zeisler, P.C., serves as the Debtors'
counsel. The petitions were signed by Paul Kuehner, manager of
managing member of sole member of Debtor's GP.
WENNER MEDIA: Moody's Assigns 'B3' Corp. Family Rating
------------------------------------------------------
Moody's Investors Service assigned Wenner Media LLC a B3 Corporate
Family Rating (CFR), Caa1 Probability of Default Rating (PDR), and
a B3 rating to its proposed $215 million senior secured credit
facility. Wenner plans to utilize the proceeds from the credit
facility to refinance its existing term loan due September 2013
and to fund related fees and expenses. This the first time Moody's
has publicly rated Wenner. The rating outlook is stable.
Assignments:
Issuer: Wenner Media LLC
Corporate Family Rating, Assigned B3
Probability of Default Rating, Assigned Caa1
Senior Secured Bank Credit Facility (Revolver), Assigned B3,
LGD3 - 31%
Senior Secured Bank Credit Facility (Term Loan), Assigned B3,
LGD3 - 31%
Outlook Actions:
Issuer: Wenner Media LLC
Outlook, Assigned Stable
Ratings Rationale
Wenner's B3 CFR reflects the company's small scale, operational
focus within the highly competitive and cyclical consumer magazine
publishing business, concentration in three magazines and related
special interest publications, negative magazine distribution and
print media business trends, growing competition from digital news
and advertising sources, and high leverage. Wenner has a good
market position and strong brands within its target market
supported by content generation, the artistic and journalistic
quality of the publications, and consumer interest in celebrity,
lifestyle and entertainment information. The company is smaller
and less diversified overall and within the magazine industry than
most of its major competitors, with more than 60% of revenue
generated by US Weekly, and the bulk of the remainder from Rolling
Stone. The company has good cost management and revenue trends
that are somewhat better than industry averages in part due to
growth at US Weekly, although declining single copy sales are
contributing to EBITDA erosion.
Moody's projects Wenner will generate moderately positive free
cash flow on low single digit percentage revenue and EBITDA
declines over the next two years, with some downside if economic
conditions deteriorate. Moody's expects debt-to-EBITDA leverage
(4.2x LTM 9/30/12 incorporating Moody's standard adjustments and
pro forma for the proposed refinancing) to be in a low 4x range
over the next two years with reduced shareholder distributions and
a proposed credit agreement that directs free cash flow toward
debt reduction ($15 million required annual term loan amortization
and 100% excess cash flow sweep, which percentage steps down if
leverage falls) mitigating modest projected earnings declines.
Moody's expects Wenner's digital revenue will grow, but that it
will be challenging to fully offset pressure on print revenue due
to declines in single copy sales and lower advertising rates
online.
Wenner's digital strategy is focused on content that is more
breaking news oriented than in its print magazines, and on the
reading experience rather than other features such as video. The
company is approaching digital initiatives cautiously with the
goal of cost-efficiently expanding its audience without weakening
the market position and monetization of the print magazines.
Cyclical advertising revenue will be roughly flat in 2012 after
several years of modest growth, and Moody's expects flat to low
single digit percentage declines assuming modest economic growth.
The B3 rating on the credit facility (consisting of a $15 million
revolver and $200 million term loan B) reflects the senior secured
collateral pledge and guarantees from substantially all material
domestic subsidiaries. The credit facility is the sole class of
debt and is therefore rated at the same level as the CFR. The Caa1
PDR is one notch below the B3 CFR based on Moody's use of a 65%
mean family recovery rate for issuers with an all first-lien bank
debt capital structure, in accordance with Moody's Loss Given
Default methodology.
Wenner has an adequate liquidity position over the next 12-18
months with sufficient internal resources to meet the 7.5%
required term loan amortization and limited risk of a covenant
violation. Wenner's cash balance ($13 million as of 9/30/12 pro
forma for the proposed refinancing) and $15 - $20 million of
projected annual free cash flow provide adequate coverage of the
$15 million required annual term loan amortization. An undrawn $15
million revolver provides additional liquidity support. Moody's
does not expect Wenner will utilize the revolver over the next 12-
15 months. The EBITDA cushion within the covenants initially
exceeds 20% but is expected to tighten to a high teens percentage
range by the end of 2013 due to step downs in the leverage
covenant.
The stable rating outlook reflects Moody's view that the U.S.
economy will continue to grow modestly, and that Wenner will
aggressively manage costs and utilize its free cash flow to reduce
debt such that debt-to-EBITDA leverage is maintained in a 4x range
over the next 12-18 months.
An upgrade could occur if revenue and EBITDA expansion leads to
consistent and growing free cash flow generation, debt pay down,
and a sustained reduction in debt-to-EBITDA leverage. Wenner would
also need to maintain a good liquidity position including ample
coverage of required debt amortization in a range of economic
environments to be considered for an upgrade.
A downgrade could occur if Wenner's debt-to-EBITDA leverage is
sustained above 4.5x or if free cash flow were to weaken relative
to the required $15 million annual term loan amortization. Wenner
could also be downgraded if its market share erodes, if liquidity
weakens, or if the company engages in leveraging acquisitions or
shareholder distributions.
The principal methodology used in rating Wenner is the Global
Publishing Industry Methodology published in December 2011. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
Wenner, headquartered in New York, NY, is a publisher of
entertainment and lifestyle magazines in the United States. Its
three titles (Rolling Stone, Us Weekly and Men's Journal) generate
combined weekly/bi-weekly circulation exceeding four million. The
company is owned and controlled by the Wenner family. Revenue on a
GAAP basis for the LTM ended 9/30/12 was approximately $363
million and is split roughly 43% (advertising), 56% (circulation)
and licensing (1%).
WEST PENN ALLEGHENY: S&P Cuts Rating on $726MM 2007A Bonds to 'CC'
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating to 'CC' from
'B-' on $726 million series 2007A bonds issued for West Penn
Allegheny Health System (WPAHS) by the Allegheny County Hospital
Development Authority, Pa. and removed it from CreditWatch where
it had been placed with negative implications on Sept. 28.
"The lower rating reflects our opinion of Highmark Inc.'s desire
to have WPAHS declare bankruptcy or otherwise restructure its debt
and pension obligations prior to any affiliation and the breakdown
of the affiliation discussions after WPAHS notified Highmark that
it was in breach of the agreement," said Standard & Poor's credit
analyst Cynthia Keller. "Although talks have resumed after a legal
ruling prohibited WPAHS from seeking other suitors, there remains
significant uncertainty as to whether the parties will reach an
agreement that will receive subsequent approval by the
Pennsylvania Insurance Department," said Ms. Keller.
Other rating factors considered by Standard & Poor's include
WPAHS':
Extremely low unrestricted cash and investment balances as of
Sept. 30, 2012;
Continued weak financial performance;
Insufficient financial and operating benefits from the
affiliation agreement and the February reopening of The
Western Pennsylvania Hospital (WPH) to reduce the operating
losses, which have been stable to slightly increasing for the
past three quarters;
Steady volume declines over the past five year, which continue
through the first quarter of 2013;
Continued presence of interim management although WPAHS has
extended the current management contact; and
Receipt of a Wells notice from the Securities and Exchange
Commission with potential future financial penalties.
"The negative outlook reflects Standard & Poor's view of the
possibility of a bankruptcy filing or debt restructuring given
WPAHS's thin financial profile and ongoing losses. Standard &
Poor's would assign a lower rating if WPAHS files bankruptcy,
restructures its debt, or misses principal or interest payments. A
higher rating within the one-year term of the outlook period could
be possible if WPAHS consummates its affiliation agreement with
Highmark (A/Stable) with no disruption in debt service payments
and there is evidence of tangible financial and operating benefits
from the affiliation," S&P said.
WPAHS operates five acute-care hospitals in and around Pittsburgh.
ZOO ENTERTAINMENT: David Smith Hikes Equity Stake to 84.2%
----------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, David E. Smith and his affiliates disclosed
that, as of Nov. 28, 2012, they beneficially own 45,508,010 shares
of common stock of indiePub Entertainment, Inc., formerly known as
Zoo Entertainment, Inc., representing 84.2% equity stake.
Mr. Smith previously reported beneficial ownership of 31,070,828
common shares or a 78.9% equity stake as of Sept. 17, 2012. A
copy of the amended filing is available at http://is.gd/9PWDHu
About Zoo Entertainment
Cincinnati, Ohio-based Zoo Entertainment, Inc. (NASDAQ CM: ZOOG)
is a developer, publisher and distributor of interactive
entertainment for Internet-connected consoles, handheld gaming
devices, PCs, and mobile devices.
The Company reported a net loss of $25.87 million in 2011,
compared with a net loss of $14.03 million in 2010.
In the auditors' report accompanying the consolidated financial
statements for the year ended Dec. 31, 2011, EisnerAmper LLP, in
Edison, New Jersey, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has both incurred losses and
experienced net cash outflows from operations since inception.
The Company's balance sheet at Sept. 30, 2012, showed $1.94
million in total assets, $7.44 million in total liabilities and a
$5.49 million total stockholders' deficit.
ZOO ENTERTAINMENT: Obtains Additional $850,000 from MMB Holdings
----------------------------------------------------------------
indiePub Entertainment, Inc. (formerly Zoo Entertainment, Inc.),
Zoo Games, Inc., Zoo Publishing, Inc., and indiePub, Inc., and MMB
Holdings LLC entered into the Third Amendment to Loan and Security
Agreement, pursuant to which the parties agreed to amend that
certain Loan and Security Agreement dated as of March 9, 2012, by
and between the Borrowers and MMB.
Pursuant to the Third Amendment, MMB agreed to provide up to
$850,000 in additional funding to the Borrowers under the LSA.
The Additional Funding will bear interest at the lesser of a rate
of 10% per annum or 18% per annum upon the ocurrence of an event
of default, or the maximum rate permitted by law.
In connection with the Third Amendment, the Company cancelled
warrants to purchase an additional 14,952,775 shares of indiePub
Entertainment common stock at $0.40 per share and reduced the
price at which MMB may convert all or a portion of the loan
balance into indiePub Shares from $0.40 per share to $0.15 per
share.
MMB, a limited liability company organized under the laws of
Delaware, is owned by David E. Smith, a former director of the
Company, Jay A. Wolf, Executive Chairman of the Board of Directors
of the Company, and certain other parties. Mr. Smith is the
managing member of Mojobear Capital LLC, which, in turn, is the
managing member of MMB.
About Zoo Entertainment
Cincinnati, Ohio-based Zoo Entertainment, Inc. (NASDAQ CM: ZOOG)
is a developer, publisher and distributor of interactive
entertainment for Internet-connected consoles, handheld gaming
devices, PCs, and mobile devices.
The Company reported a net loss of $25.87 million in 2011,
compared with a net loss of $14.03 million in 2010.
In the auditors' report accompanying the consolidated financial
statements for the year ended Dec. 31, 2011, EisnerAmper LLP, in
Edison, New Jersey, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has both incurred losses and
experienced net cash outflows from operations since inception.
The Company's balance sheet at Sept. 30, 2012, showed $1.94
million in total assets, $7.44 million in total liabilities and a
$5.49 million total stockholders' deficit.
ZYTO CORP: Deregisters Common Stock, Cancels 2011 Incentive Plan
----------------------------------------------------------------
Zyto Corp. has filed a Form 15 with the U.S. Securities and
Exchange Commission to voluntarily deregister its common stock
and suspend its reporting obligations with the SEC. As of Dec. 4,
2012, there were only 220 holders of the Company's common shares.
Separately, Zyto filed with the SEC a post-effective amendment
no.1 to the Form S-8 registration statement relating to the
registration of 5,000,000 shares of the Company's common stock,
$0.0001 par value per share, for issuance under the Company's 2011
Stock Incentive Plan. The Board of Directors of the Company has
terminated the 2011 Stock Incentive Plan. Therefore, no further
issuances of shares or options will be made pursuant to the plan.
About ZYTO Corp
Lindon, Utah-based ZYTO Corp.'s operations consist of the
manufacturing and distribution of biocommunication devices and
software designed to facilitate communication between computers
and the human body.
Hansen, Barnett, & Maxwell, P.C., in Salt Lake City, Utah,
expressed substantial doubt about ZYTO'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 an accumulated deficit, and negative working capital.
The Company's balance sheet at Sept. 30, 2012, showed $1.22
million in total assets, $3.84 million in total liabilities and a
$2.61 million total stockholders' deficit.
* Student-Loan Debt Collection Targeted for Overhaul in U.S. Bill
-----------------------------------------------------------------
Carla Main, substituting for Bloomberg News bankruptcy columnist
Bill Rochelle, reports that Congress will consider overhauling
debt collection in the $100 billion-a-year U.S. student loan
program, replacing it with automatic withdrawals from borrowers'
paychecks tied to their income -- a system used in the U.K.
Legislation that Wisconsin Republican Representative Tom Petri
plans to introduce as soon as this week would require employers to
withhold payments from wages in the same way they do taxes.
Payments would be capped at 15% of borrowers' income after basic
living expenses.
The bill follows growing concern about the burden of $1 trillion
in outstanding student loans, which now exceed credit-card debt.
Student loans, which can rarely be canceled through bankruptcy,
can balloon to several times their original size, after adding
interest and collection fees.
The legislation would tie the interest charged to Treasury market
rates. Currently, students in the most popular program pay as
much as 6.8%.
The bill would all but eliminate the government's need to hire
private debt-collection companies, which have drawn criticism for
insisting on stiff payments even when borrowers are eligible for
income-based repayment.
* 9th Circuit Ruling Takes Up Scope of Stern
--------------------------------------------
John Pottow, writing for Credit Slips, reports the U.S. Court of
Appeals for the Ninth Circuit's decision in Executive Benefits
Insurance v. Arkinson on Dec. 4 "jumped in as a circuit court
opining that bankruptcy judges lack the constitutional authority
to enter final judgments in fraudulent conveyance actions (yes,
federal ones under section 548 of the Code) -- at least as pled
against 'strangers' to the estate -- and at least if those
strangers' claims are not 'inextricably intertwined' with the
claims resolution process (or whatever test was gleaned from
Stern)." A full-text copy of the article is available at
http://is.gd/kk5y5m
* Argentina Needn't Deposit for Injunction Stay, Rules 2nd Circ.
----------------------------------------------------------------
Carolina Bolado at Bankruptcy Law360 reports that the Second
Circuit refused Tuesday to make Argentina pay a security deposit
as a condition of a stay of an injunction that prevents payments
to bondholders who participated in the country's debt
restructuring unless the country pays holdout investors the money
they're owed.
Bankruptcy Law360 relates that The appeals court denied the motion
by the holdout bondholders requesting that Argentina put up a $250
million deposit as a condition of the stay.
* Moody's Says Children's Hospitals to Face Revenue Challenges
--------------------------------------------------------------
Children's hospitals will face increasing revenue challenges as
healthcare reform moves forward, says Moody's Investors Service.
In the new report, "Children's Hospital Medians Indicate Growing
Revenue Challenges," Moody's says children's hospitals will
continue to benefit from limited competition for their unique and
essential services, as well as from their developed fundraising
capabilities, but the advantages they have traditionally enjoyed
over adult hospitals in terms of credit quality will narrow.
Moody's identifies revenue pressure from rate reductions or lower
rate increases from both private and governmental payers as the
greatest credit risk facing children's hospitals. This risk is the
main driver of Moody's negative outlook on both adult and
children's not-for-profit hospitals, but children's hospitals are
especially vulnerable given a high dependency on Medicaid funding
at a time when state budgets are stressed and additional Medicaid
cutbacks are likely.
Health reform is likely to have more of a negative impact on the
children's hospitals than on the adult hospitals, says Moody's.
"Like adult hospitals, children's hospitals will face cuts in
disproportionate share funding," says Lisa Martin, Senior Vice
President at Moody's and lead author of the report. "However,
children's hospitals will not benefit as much as adult hospitals
from more insured patients that health reform should bring because
a larger proportion of children are already insured through
Medicaid or the Children's Health Insurance Program."
There has already been some tightening in the spreads between
median credit metrics for adult and children's hospitals. For
example, in 2007 the median revenue growth rate for children's
hospitals exceeded that for adult hospitals by almost 3%; by 2011
the gap had narrowed to 0.7%.
The medians also show that in 2011 the median expense growth rate
for children's hospitals exceeded the revenue growth rate for the
first time since 2008, a signal of growing operating pressure.
Moody's currently rates the debt of 22 children's hospitals,
totaling over $7 billion. The median bond rating for Moody's-rated
children's hospitals is A1, compared with A3 for all adult
hospitals.
* U.S. Bank Earnings Rise 6.6% on Revenue Growth, FDIC Says
-----------------------------------------------------------
Carla Main, substituting for Bloomberg News bankruptcy columnist
Bill Rochelle, reports that the Federal Deposit Insurance Corp.
said U.S. banks had net income of $37.6 billion in the third
quarter, a 6.6% increase from the year-earlier period, as
operating revenue increased the most in three years.
According to the report, industry profits beat the prior year for
a 13th straight quarter, with 57.5% of banks reporting gains on
earnings that increased from $34.4 billion in the previous
quarter, the FDIC said in its Quarterly Banking Profile. Lenders
set aside $14.8 billion for bad loans, and the $22.3 billion in
charge-offs showed declines in all categories except residential
real estate.
The report relates that residential lending was up $14.5 billion
in the quarter, trailing the industry's $64.8 billion gain from
commercial and industrial loans, the FDIC said.
Deposit growth increased by $181.7 billion in the third quarter,
after a $61.5 billion increase in the preceding three-month
period.
* Cadwalader's George Davis Named as One of Bankruptcy Law360 MVPs
------------------------------------------------------------------
Stewart Bishop at Bankruptcy Law360 reports that in seeking to get
a fair shake for his noteholder clients in the Dynegy Holdings LLC
restructuring, George Davis of Cadwalader Wickersham & Taft LLP
pulled out all the stops, filing an outside suit, pushing for an
examiner and negotiating a revised plan, earning him a spot on
Law360's Bankruptcy MVPs.
* Herrick Feinstein Adds R. Kalikow to New York Office
------------------------------------------------------
Herrick, Feinstein LLP disclosed that Richard R. Kalikow, a real
estate industry veteran with more than four decades of global
expertise, has joined the firm's New York office as a Partner.
"Herrick's real estate group is known for its diverse talent and
exceptional range of services," said Irwin A. Kishner, Chairman of
the Executive Committee of Herrick, Feinstein. "Richard's arrival
strengthens our existing practice, bringing great experience and a
broad client base."
"Richard is a leader in the real estate industry, having served as
a trusted advisor to major clients locally, nationally and
internationally," noted Real Estate Group co-Chairs Scott Mollen
and Dennis Russo. "We are delighted to welcome him to the team."
Herrick, Feinstein's real estate group is widely regarded as one
of the leading real estate practices in the New York region.
Recently referred to as a "real estate powerhouse" by Crain's New
York Business, the more than 50-member group represents public and
private companies on a full spectrum of issues, including
financing and acquisition, land use and zoning, development and
construction, hospitality, distressed debt, leasing and
litigation.
"Herrick's real estate practice delivers the highest level of
service and the partners and leadership have built outstanding
relationships with premier clients," said Mr. Kalikow. "I am
looking forward to working with this skilled group of attorneys."
Mr. Kalikow joins Herrick from Diamond McCarthy where he was a
Partner, and before that was a Partner with Skadden for 25 years.
Mr. Kalikow has extensive experience representing U.S. and
international clients, including institutional and private
investors in acquisitions, financings, leasing, development, joint
ventures, real estate funds and other real estate-related matters.
He also specializes in representing both lenders and borrowers in
connection with workouts and restructurings across the country.
Mr. Kalikow is admitted to practice law in New York and Florida.
He received his LL.M. from New York University, his J.D. from
Fordham University and his B.S. from Cornell University.
Founded in 1928, Herrick, Feinstein LLP is a prominent 170-lawyer
firm headquartered in New York City providing a full range of
legal services, including art law, real estate, government
relations, bankruptcy and business reorganization, commercial
litigation, corporate law, employment law, insurance, intellectual
property, sports law, and tax and personal planning.
* Recent Small-Dollar & Individual Chapter 11 Filings
-----------------------------------------------------
In re Jerry Ott
Bankr. W.D. Ark. Case No. 12-74376
Chapter 11 Petition filed November 26, 2012
In re Angela Wilson-Goodman
Bankr. D. Ariz. Case No. 12-25281
Chapter 11 Petition filed November 26, 2012
In re Jalopies LLC
Bankr. D. Ariz. Case No. 12-25324
Chapter 11 Petition filed November 26, 2012
Filed pro se
In re Kyle Ogden
Bankr. D. Ariz. Case no. 12-25349
Chapter 11 Petition filed November 26, 2012
In re Joel Spinosi
Bankr. C.D. Calif. Case No. 12-23407
Chapter 11 Petition filed November 26, 2012
In re Kevin Kim
Bankr. C.D. Calif. Case No. 12-23440
Chapter 11 Petition filed November 26, 2012
In re Annabelle Corporation
Bankr. N.D. Calif. Case No. 12-33329
Chapter 11 Petition filed November 26, 2012
See http://bankrupt.com/misc/canb12-33329p.pdf
See http://bankrupt.com/misc/canb12-33329c.pdf
represented by: Arlo Hale Smith, Esq.
Law Offices of Arlo H. Smith
E-mail: halesf7@aol.com
In re Daniel Trush
Bankr. D. Colo. Case No. 12-34037
Chapter 11 Petition filed November 26, 2012
In re Shannon Trush
Bankr. D. Colo. Case No. 12-34037
Chapter 11 Petition filed November 26, 2012
In re Don Biagi Lawn Care Services, LLC
Bankr. D. Conn. Case No. 12-52113
Chapter 11 Petition filed November 26, 2012
See http://bankrupt.com/misc/ctb12-52113.pdf
represented by: Stephen P. Wright, Esq.
Goldman, Gruder & Woods, LLC
E-mail: swright@goldmangruderwoods.com
In re Two Blondes & A Guy, LLC
dba Two Blondes And A Guy Salon
Bankr. M.D. Fla. Case No. 12-07599
Chapter 11 Petition filed November 26, 2012
See http://bankrupt.com/misc/flmb12-07599p.pdf
See http://bankrupt.com/misc/flmb12-07599c.pdf
represented by: Jason A. Burgess, Esq.
The Law Offices of Jason A. Burgess, LLC
E-mail: jason@jasonaburgess.com
In re John Nestor
Bankr. N.D. Ill. Case No. 12-46385
Chapter 11 Petition filed November 26, 2012
In re Bradley Cook
Bankr. D. Kans. Case No. 12-41858
Chapter 11 Petition filed November 26, 2012
In re Community Dialysis Centers, Inc.
Bankr. D. Md. Case No. 12-31063
Chapter 11 Petition filed November 26, 2012
See http://bankrupt.com/misc/mdb12-31063.pdf
represented by: Jeffrey M. Sirody, Esq.
Sirody, Freiman & Associates, P.C.
E-mail: smeyers5@hotmail.com
In re Garn Restoration Services, Inc.
dba Garn Hardscapes
Bankr. W.D. Mich. Case No. 12-10203
Chapter 11 Petition filed November 26, 2012
See http://bankrupt.com/misc/miwb12-10203.pdf
represented by: Kerry D. Hettinger, Esq.
Hettinger & Hettinger PC
E-mail: khett57@hotmail.com
In re Los Mariachis Mexican Food, LLC
Bankr. W.D. Mich. Case No. 12-10198
Chapter 11 Petition filed November 26, 2012
See http://bankrupt.com/misc/miwb12-10198p.pdf
See http://bankrupt.com/misc/miwb12-10198c.pdf
represented by: Steven L. Rayman, Esq.
Rayman & Knight
E-mail: courtmail@raymanstone.com
In re Brian Fink
Bankr. D. Nev. Case No. 12-23035
Chapter 11 Petition filed November 26, 2012
In re Gary DeRusso
Bankr. N.D.N.Y. Case No. 12-13053
Chapter 11 Petition filed November 26, 2012
In re C. Lamb
Bankr. W.D.N.C. Case No. 12-10933
Chapter 11 Petition filed November 26, 2012
In re Debra Lamb
Bankr. W.D.N.C. Case No. 12-10933
Chapter 11 Petition filed November 26, 2012
In re Jabez Consolidated Holdings, Inc.
aka Jabez Consolidated Holdings Inc.
Bankr. W.D.N.C. Case No. 12-32810
Chapter 11 Petition filed November 26, 2012
See http://bankrupt.com/misc/ncwb12-32810.pdf
Filed pro se
In re Ryan Young
Bankr. W.D. Pa. Case No. 12-25744
Chapter 11 Petition filed November 26, 2012
In re Benton Forkum
Bankr. M.D. Tenn. Case No. 12-10783
Chapter 11 Petition filed November 26, 2012
In re Tracht Gut LLC
Bankr. C.D. Calif. Case No. 12-20308
Chapter 11 Petition filed November 27, 2012
See http://bankrupt.com/misc/cacb12-20308.pdf
represented by: William H. Brownstein, Esq.
WILLIAM H. BROWNSTEIN & ASSOCIATES, P.C.
E-mail: Brownsteinlaw.bill@gmail.com
In re Gary Hewitt
Bankr. C.D. Calif. Case No. 12-20324
Chapter 11 Petition filed November 27, 2012
In re Doug Gravink
Bankr. C.D. Calif. Case No. 12-20325
Chapter 11 Petition filed November 27, 2012
In re Myra Chen
Bankr. C.D. Calif. Case No. 12-49208
Chapter 11 Petition filed November 27, 2012
In re Kenco 2000 Inc.
Bankr. M.D. Fla. Case No. 12-07622
Chapter 11 Petition filed November 27, 2012
See http://bankrupt.com/misc/flmb12-07622.pdf
represented by: Ann W. Rogers, Esq.
LAW OFFICE OF ANN W. ROGERS, PA
E-mail: imannrog@aol.com
In re SGB Sky King, Inc.
Bankr. M.D. Fla. Case No. 12-17731
Chapter 11 Petition filed November 27, 2012
represented by: Paige A. Wagner, Esq.
GRAYROBINSON, P.A.
E-mail: paige.wagner@gray-robinson.com
In re SGB Sky King
Bankr. M.D. Fla. Case No. :12-17732
Chapter 11 Petition filed November 27, 2012
represented by: Paige A. Wagner, Esq.
GRAYROBINSON, P.A.
E-mail: paige.wagner@gray-robinson.com
In re Jeffrey Carver
Bankr. E.D. Ky. Case No. 12-53001
Chapter 11 Petition filed November 27, 2012
In re Roxanne Casterline
Bankr. E.D. Mich. Case No. 12-65848
Chapter 11 Petition filed November 27, 2012
In re Discovery Tours LLC
aka Discovery Tours
Bankr. W.D. Wash. Case No. 12-47955
Chapter 11 Petition filed November 27, 2012
Filed as Pro Se
In re Andrew Goehe
Bankr. W.D. Wis. Case No. 12-16425
Chapter 11 Petition filed November 27, 2012
In re Pegasus Communications, Inc.
Bankr. D. Ariz. Case No. 12-25473
Chapter 11 Petition filed November 28, 2012
See http://bankrupt.com/misc/azb12-25473.pdf
represented by: Eric Slocum Sparks, Esq.
Eric Slocum Sparks PC
E-mail: law@ericslocumsparkspc.com
In re Molecular Diagnostics & Therapeutics, Inc.
Bankr. D. Colo. Case No. 12-34188
Chapter 11 Petition filed November 28, 2012
Filed pro se
In re Newvisions Full Service Nursery, Inc.
Bankr. M.D. Fla. Case No. 12-15940
Chapter 11 Petition filed November 28, 2012
See http://bankrupt.com/misc/flmb12-15940.pdf
represented by: Michael Faro, Esq.
Faro & Crowder
E-mail: faro.michael@gmail.com
In re Daniel Casey
Bankr. S.D. Fla. Case No. 12-38377
Chapter 11 Petition filed November 28, 2012
In re Symphony Transport, Inc.
aka Big R Transport
Bankr. N.D. Ill. Case No. 12-46655
Chapter 11 Petition filed November 28, 2012
See http://bankrupt.com/misc/ilnb12-46655.pdf
represented by: Mitchell Elliot Jones, Esq.
Jones Law Offices
E-mail: mej@joneslaw.org
In re Teresa Okala
Bankr. D. Md. Case No. 12-31237
Chapter 11 Petition filed November 28, 2012
In re Wright LLC
Bankr. D. Mass. Case No. 12-44078
Chapter 11 Petition filed November 28, 2012
See http://bankrupt.com/misc/mab12-44078.pdf
represented by: James P. Ehrhard, Esq.
Ehrhard & Associates, P.C.
E-mail: ehrhard@ehrhardlaw.com
In re Elias Peralta-Arrezol
Bankr. D. Nev. Case No. 12-23117
Chapter 11 Petition filed November 28, 2012
In re Michael Zawenski
Bankr. E.D.N.C. Case No. 12-08383
Chapter 11 Petition filed November 28, 2012
In re Carlos Aponte-Nieves
Bankr. D.P.R. Case No. 12-09364
Chapter 11 Petition filed November 28, 2012
In re David Wunderlin
Bankr. W.D. Wash. Case No. 12-21820
Chapter 11 Petition filed November 28, 2012
In re 2 Fair Oaks Holdings LLC
Bankr. C.D. Calif. Case No. 12-23597
Chapter 11 Petition filed November 29, 2012
See http://bankrupt.com/misc/cacb12-23597.pdf
represented by: David G. Epstein, Esq.
THE DAVID EPSTEIN LAW FIRM
E-mail: david@epsteinlitigation.com
In re Emogene Lee
Bankr. C.D. Calif. Case No. 12-49361
Chapter 11 Petition filed November 29, 2012
In re Oreco Duct Systems, Inc.
Bankr. C.D. Calif. Case No. 12-49460
Chapter 11 Petition filed November 29, 2012
See http://bankrupt.com/misc/cacb12-49460.pdf
represented by: Vakhe Khodzhayan, Esq.
KG LAW
E-mail: vahe@lawyer.com
In re Harold Fields
Bankr. N.D. Calif. Case No. 12-49476
Chapter 11 Petition filed November 29, 2012
In re James Arabia
Bankr. S.D. Calif. Case No. 12-15663
Chapter 11 Petition filed November 29, 2012
In re Jim's Carting, LLC
Bankr. D. Conn. Case No. 12-32616
Chapter 11 Petition filed November 29, 2012
See http://bankrupt.com/misc/ctb12-32616.pdf
represented by: Alfred J. Zullo, Esq.
LAW OFFICES OF ALFRED J. ZULLO & ASSOC.
E-mail: alfred.zullo@snet.net
In re Jeffrey Mantei
Bankr. M.D. Fla. Case No. 12-17942
Chapter 11 Petition filed November 29, 2012
In re Thomas Nestor
Bankr. N.D. Ill. Case No. 12-46964
Chapter 11 Petition filed November 29, 2012
In re Yolanda Nevarez
Bankr. N.D. Ill. Case No. 12-47007
Chapter 11 Petition filed November 29, 2012
In re Raman Yosupov
Bankr. E.D.N.Y. Case No. 12-48134
Chapter 11 Petition filed November 29, 2012
In re Avrohom Worch
Bankr. S.D.N.Y. Case No. 12-24038
Chapter 11 Petition filed November 29, 2012
In re Neighborhood Interfaith Movement, Inc.
fdba Northwest Interfaith Movement, Inc.
Bankr. E.D. Pa. Case No. 12-21016
Chapter 11 Petition filed November 29, 2012
See http://bankrupt.com/misc/paeb12-21016.pdf
represented by: Vincent J. Marriott, III, Esq.
BALLARD SPAHR ANDREWS & INGERSOLL
E-mail: marriott@ballardspahr.com
In re Gary Finley
Bankr. M.D. Tenn. Case No. 12-10879
Chapter 11 Petition filed November 29, 2012
In re Temore Willis
Bankr. M.D. Tenn. Case No. 12-10915
Chapter 11 Petition filed November 29, 2012
In re Philip Parker
Bankr. N.D. Tex. Case No. 12-37418
Chapter 11 Petition filed November 29, 2012
In re Mary Battaglia
Bankr. W.D. Tex. Case No. 12-12649
Chapter 11 Petition filed November 29, 2012
In re Kirby Parsons
Bankr. W.D. Tex. Case No. 12-12649
Chapter 11 Petition filed November 29, 2012
In re Paul Mundt
Bankr. W.D. Tex. Case No. 12-13367
Chapter 11 Petition filed November 29, 2012
In re Michael Dunda
Bankr. W.D. Wash. Case No. 12-21879
Chapter 11 Petition filed November 29, 2012
In re Himark
Bankr. D. Wyo. Case No. 12-21173
Chapter 11 Petition filed November 29, 2012
See http://bankrupt.com/misc/wyb12-21173.pdf
represented by: Clark D. Stith, Esq.
GREENHALGH, BECKWITH, LEMICH, STITH
E-mail: clarkstith@yahoo.com
In re Trevi Fashion, Inc.
dba Imagine
Bankr. C.D. Calif. Case No. 12-49819
Chapter 11 Petition filed December 3, 2012
See http://bankrupt.com/misc/cacb12-49819.pdf
represented by: Miyun Lim, Esq.
LAW OFFICES OF MIYUN TERI LIM &
ASSOCIATES
E-mail: teribklaw@gmail.com
In re Richard Kingsborough
Bankr. N.D. Calif. Case No. 12-13142
Chapter 11 Petition filed December 3, 2012
In re W & M Mead LLLP
Bankr. D. Colo. Case No. 12-34548
Chapter 11 Petition filed December 3, 2012
Filed as Pro Se
In re Paul Jallo
Bankr. M.D. Fla. Case No. 12-18227
Chapter 11 Petition filed December 3, 2012
In re Win-Win Investment Network, LLC
Bankr. N.D. Ga. Case No. 12-79987
Chapter 11 Petition filed December 3, 2012
Filed as Pro Se
In re JLH Group, LLC
Bankr. N.D. Ill. Case No. 12-47619
Chapter 11 Petition filed December 3, 2012
See http://bankrupt.com/misc/ilnb12-47619.pdf
represented by: Paul M. Bach, Esq.
Bach Law Offices
E-mail: paul@bachoffices.com
In re Gerald P. Batipps, MD, PC
Bankr. D. Md. Case No. 12-31587
Chapter 11 Petition filed December 3, 2012
See http://bankrupt.com/misc/mdb12-31587.pdf
represented by: Richard B. Rosenblatt, Esq.
THE LAW OFFICES OF RICHARD B. ROSENBLATT
E-mail: rrosenblatt@rosenblattlaw.com
In re John Jensen
Bankr. D. Minn. Case No. 12-46816
Chapter 11 Petition filed December 3, 2012
In re Hector Camacho
Bankr. D. Nev. Case No. 12-23325
Chapter 11 Petition filed December 3, 2012
In re Theresa Petaccio
Bankr. D. N.J. Case No. 12-38364
Chapter 11 Petition filed December 3, 2012
In re Sunset Vista Mobile Village, LLC
Bankr. N.D.N.Y. Case No. 12-13135
Chapter 11 Petition filed December 3, 2012
See http://bankrupt.com/misc/nynb12-13135.pdf
represented by: Joseph Haspel, Esq.
JOSEPH J. HASPEL PLLC
E-mail: jhaspel@haspellaw.net
In re Pyramid Rentals, LLC
Bankr. E.D. Pa. Case No. 12-21208
Chapter 11 Petition filed December 3, 2012
See http://bankrupt.com/misc/paeb12-21208.pdf
represented by: Demetrius J. Parrish, Esq.
THE LAW OFFICES OF DEMETRIUS J. PARRISH
E-mail: djp711@aol.com
In re John Shirley
Bankr. D. S.C. Case No. 12-07483
Chapter 11 Petition filed December 3, 2012
In re Philip Cannady
Bankr. M.D. Tenn. Case No. 12-11018
Chapter 11 Petition filed December 3, 2012
In re Stephens Trucking, LLC
Bankr. M.D. Tenn. Case No. 12-11036
Chapter 11 Petition filed December 3, 2012
See http://bankrupt.com/misc/tnmb12-11036.pdf
represented by: Steven L. Lefkovitz, Esq.
LAW OFFICES LEFKOVITZ & LEFKOVITZ
E-mail: slefkovitz@lefkovitz.com
In re Imagine Hospitality, Inc.
Bankr. E.D. Tex. Case No. 12-10767
Chapter 11 Petition filed December 3, 2012
See http://bankrupt.com/misc/txeb12-10767.pdf
Filed as Pro Se
In re DeCarlo Noble
Bankr. E.D. Tex. Case No. 12-43305
Chapter 11 Petition filed December 3, 2012
In re Weaver W. Wisdom Jr., Trust
Bankr. N.D. Tex. Case No. 12-37665
Chapter 11 Petition filed December 3, 2012
See http://bankrupt.com/misc/txnb12-37665.pdf
represented by: Robert Yaquinto, Jr., Esq.
SHERMAN & YAQUINTO, LLP
E-mail: ryaquinto@syllp.com
In re Rover Dynasty, Inc.
Bankr. S.D. Tex. Case No. 12-38993
Chapter 11 Petition filed December 3, 2012
See http://bankrupt.com/misc/txsb12-38993.pdf
Filed as Pro Se
In re 500 West 29th Street Partnership
Bankr. W.D. Tex. Case No. 12-12707
Chapter 11 Petition filed December 3, 2012
See http://bankrupt.com/misc/txwb12-12707.pdf
represented by: Frank B. Lyon, Esq.
E-mail: franklyon@me.com
In re All Services, Inc.
Bankr. E.D. Wash. Case No. 12-05110
Chapter 11 Petition filed December 3, 2012
See http://bankrupt.com/misc/waeb12-05110.pdf
represented by: Roger William Bailey, Esq.
BAILEY & BUSEY LLC
E-mail: roger.bailey.attorney@gmail.com
In re Joseph Tafoya
Bankr. W.D. Wash. Case No. 12-22030
Chapter 11 Petition filed December 3, 2012
In re High Desert LLC
dba Regency Apartments
Bankr. D. Wyo. Case No. 12-21180
Chapter 11 Petition filed December 3, 2012
See http://bankrupt.com/misc/wyb12-21180.pdf
Filed as Pro Se
*********
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
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re-mailing and photocopying) is strictly prohibited without prior
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herein is obtained from sources believed to be reliable, but is
not guaranteed.
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