/raid1/www/Hosts/bankrupt/TCR_Public/121218.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, December 18, 2012, Vol. 16, No. 351
Headlines
A123 SYSTEMS: Johnson Controls Fights for Bidder Protections
A123 SYSTEMS: Seeks Approval of DIP Loan Amendment
ADAJIO LLC: Case Summary & Unsecured Creditor
AFA INVESTMENT: Has Control of Case Until March 28
AFA INVESTMENT: Yucaipa Wins Dismissal of Workers' Class Suit
ALDERMAN RAILCAR: Case Summary & 20 Largest Unsecured Creditors
ALETHEIA RESEARCH: SEC Accuses CEO of Trading Scheme
ALLIANCE 2009: Can Hire H3GM as Bankruptcy Counsel
AMC INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors
AMERICAN AIRLINES: Pilots Rebuff AMR CEO on Standalone Exit
ARISTA LLC: Faces Fraud Charges; Calif. Court Freezes Assets
ARROW ALUMINUM: Voluntary Chapter 11 Case Summary
B&J RIGHT: Voluntary Chapter 11 Case Summary
BAILEY ELECTRIC: Case Summary & 20 Largest Unsecured Creditors
BEARINGPOINT INC: Trustee Wants Ex-Directors Held in Contempt
BODIN OIL: Case Summary & 20 Largest Unsecured Creditors
BRANDYWINE OPERATING: Fitch Rates $250-Mil. Unsecured Notes 'BB+'
CAPSUGEL HOLDINGS: Moody's Affirms 'B2' CFR; Outlook Positive
CHOCTAW GENERATION: S&P Cuts Rating on $321MM Certificates to 'D'
COMMONWEALTH GROUP: Files Schedules of Assets and Liabilities
CORDILLERA GOLF: Wind Rose Wins Auction at $14.2 Million
CROWN CASTLE: S&P Keeps 'B+' Rating on $1.5-Bil. Credit Facilities
D H L ASSOCIATES: Voluntary Chapter 11 Case Summary
DAFFY'S INC: Asks for Court OK for $12 Million Emergency Loan
DAVE'S DOWNTOWN: Case Summary & 15 Unsecured Creditors
DELUXE ENTERTAINMENT: S&P Cuts CCR to 'CCC+' on Declining Results
DEWEY & LEBOEUF: Aviva Sues Davis et al. Over Bond Placement
DEWEY & LEBOEUF: Insurer Sues Execs Over Losses on $35MM Notes
DOG HOUSE: Case Summary & 3 Largest Unsecured Creditors
DREIER LLP: Marc Dreier's Former Landlord to Cough Up $300,000
EDISON MISSION: Commences Chapter 11 Reorganization
EDISON MISSION: Case Summary & 30 Largest Unsecured Creditors
EL CENTRO: Hires GlassRatner as Financial Advisor
ETHAN ALLEN: S&P Raises CCR to 'BB-' on Improved Profitability
EXOTIQUE SALON: Case Summary & 20 Largest Unsecured Creditors
FIRST PLACE: Wins Court Approval for Talmer Sale
FORT LAUDERDALE BOATCLUB: Dec. 19 Hearing on Schedules Extension
FRIENDSHIP DAIRIES: Court Approves Levenfeld as Panel's Counsel
FUSION BRANDS: Involuntary Chapter 11 Case Summary
GENESIS HEALTHCARE: S&P Retains 'B' Corporate Credit Rating
GENOA HEALTHCARE: Moody's Affirms 'B2' CFR/PDR; Outlook Negative
GREDE HOLDINGS: Moody's Affirms 'B1' CFR/PDR; Outlook Stable
GREDE HOLDINGS: S&P Affirms 'B+' Corporate Credit Rating
GUILDMASTER INC: Case Summary & 20 Largest Unsecured Creditors
HARRISBURG, PA: New Pennsylvania Bill Aims to Scrutinize Debt
HOLLYWOOD COMMUNITY: Case Summary & 11 Unsecured Creditors
HOSTESS BRANDS: Wal-Mart, Kroger, Bimbo Among Bidders
JETBLUE AIRWAYS: S&P Revises Outlook on 'B-' CCR to Positive
JOURNAL REGISTER: PBGC Balks at 'Rushed' Efforts to Auction Itself
LCI HOLDING: Seeks Court Approval on Several Hirings
LEHMAN BROTHERS: Trustee Takes $360 Million From Citigroup
LOWER BUCKS: BoNY Seeks to Overturn Ruling Over $8MM Settlement
MARCO POLO: Voluntary Chapter 11 Case Summary
MELKE LAND: Voluntary Chapter 11 Case Summary
METRO FUEL: Creditors Seek Probe of Former CFO
MF GLOBAL: Parent Bonds Trading for Twice Chapter 11 Recovery
MIRANT CORP: Successor Cries Perjury in $305-Mil. Oil Lease Suit
MIXED NUTS: Case Summary & 20 Largest Unsecured Creditors
MORREALE HOTELS: Case Summary & 13 Unsecured Creditors
MTS GOLF: Court OKs Amended Employment of OZ as Architects
MTS GOLF: Court OKs FAMCO Advisory as Feasibility Expert
NEWPAGE CORP: Confirms Plan With Stock for First Lien
NRG ENERGY: Moody's Reviews 'Ba3' CFR for Possible Downgrade
NUSTAR ENERGY: Agrees to Sell Antonio Refinery
ORANGE COUNTY: Case Summary & 20 Largest Unsecured Creditors
ORLEANS HOMEBUILDERS: S&P Cuts Corp. Credit Rating to 'CCC+'
PARAGON SHIPPING: Obtains Waivers From Commerzbank
PATMONT MOTOR: Case Summary & 19 Largest Unsecured Creditors
PAUL SCHIMMEL: No Substantial Contribution Claim in Chapter 7
PAXFIRE INC: Case Summary & 20 Largest Unsecured Creditors
PERRY HOLDINGS: Case Summary & 9 Unsecured Creditors
PT BERLIAN: Involuntary Chapter 11 Case Summary
QUAD/GRAPHICS INC: Moody's Says Special Dividend Credit Negative
QUAD/GRAPHICS INC: S&P Cuts Corporate Credit Rating to 'BB'
RAPID-TORC INC: Voluntary Chapter 11 Case Summary
REVSTONE INDUSTRIES: Sec. 341 Creditors' Meeting Set for Jan. 9
RIVERBED TECHNOLOGY: S&P Keeps 'BB' Corporate Credit Rating
RIVERBOAT CORP: Moody's Assigns 'B3' CFR/PDR; Outlook Stable
RYAN INT'L: Exclusivity Period to File Plan Extended to Jan. 11
SAN BERNARDINO: In Court in January Over Landfill Payments
SATCON TECHNOLOGY: Bank Appeals Right to Use Cash Collateral
SATCON TECHNOLOGY: US Trustee, Creditors Balk at $1.6MM Bonus Plan
SCOTSMAN INDUSTRIES: S&P Removes 'B+' CCR From Watch Positive
SEACOR HOLDINGS: Moody's Cuts CFR to 'Ba3'; Outlook Stable
SOLYNDRA LLC: IRS Drops Appeal on Plan Confirmation
SPRINT NEXTEL: S&P Keeps 'B+' CCR on Watch on Clearwire Stake Buy
STOCKTON, CA: Didn't Need Bankruptcy Protection, Insurers Say
SYNERGETICS INC: Case Summary & 8 Unsecured Creditors
TAMINCO ACQUISITION: S&P Gives 'B-' Rating on $250-Mil. Notes
TRANSFIRST HOLDINGS: Moody's Affirms 'B3' CFR; Outlook Stable
TRIDENT USA: Moody's Says Acquisition Financing Credit Negative
UFOOD RESTAURANT: Updated Case Summary & Creditors' Lists
UNIVERSITY OF PUERTO RICO: Moody's Cuts Rating on Bonds to 'Ba1'
VALLEJO, CA: Talks With Workers Union Extended Into 2013
VISANT CORP: Moody's Corrects December 5 Rating Release
VITRO SAB: 5th Circuit Declines to Enforce Mexican Plan
VITRO SAB: Seeks Reconsideration of Ruling Denying Mexican Plan
VULCAN MATERIALS: S&P Affirms 'BB' Corp. Credit; Outlook Stable
WILSON/BATIZ: Case Summary & 7 Unsecured Creditors
WOMAN'S CLUB: Case Summary & 2 Unsecured Creditors
ZACKY FARMS: Imperial Capital Approved as Investment Banker
ZACKY FARMS: Court OKs Fitzgerald Willoughby as Bankruptcy Counsel
ZACKY FARMS: Court OKs Fox Rothschild as Panel's Counsel
* Short Sale Saves Owner from Ch. 13 Bankruptcy
* Moody's Says Global Base Metals Sector's Outlook Remains Neg.
* Large Companies With Insolvent Balance Sheets
*********
A123 SYSTEMS: Johnson Controls Fights for Bidder Protections
------------------------------------------------------------
Jacqueline Palank at Daily Bankruptcy Review reports that Thwarted
A123 Systems Inc. buyer Johnson Controls Inc. is appealing the
battery maker's sale to a rival to get the bidder protections to
which it says it's entitled.
As reported in the Dec. 14, 2012 edition of the TCR, A123 Systems
received approval from the bankruptcy judge to sell the business
to China's Wanxiang Group Corp. for about $256.6 million. The
sale is still subject to approval by the Committee on Foreign
Investment in the U.S.
Bloomberg News reported that JCI, which lost the auction, said it
might be interested in buying the business if Wanxiang can't
obtain government approval.
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.
A123 SYSTEMS: Seeks Approval of DIP Loan Amendment
-------------------------------------------------
BankruptcyData.com reports that A123 Systems filed with U.S.
Bankruptcy Court a motion for approval to enter into an amendment
to its existing debtor-in-possession financing facility to extend
the December 31, 2012 maturity date to March 31, 2013. The Court
scheduled a Dec. 27, 2012 hearing on the matter.
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.
ADAJIO LLC: Case Summary & Unsecured Creditor
---------------------------------------------
Debtor: Adajio LLC
dba Adajio LLC, A Nevada LLC
140 Lathrop Rd.
Lathrop, CA 95330
Bankruptcy Case No.: 12-41455
Chapter 11 Petition Date: December 14, 2012
Court: United States Bankruptcy Court
Eastern District of California (Sacramento)
Judge: Christopher M. Klein
Debtor's Counsel: Timothy J. Walsh, Esq.
1319 Travis Blvd.
Fairfield, CA 94533
Tel: (707) 429-1990
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company's list of its 20 largest unsecured creditors contains
only one entry:
Entity Nature of Claim Claim Amount
------ --------------- ------------
State Board of Underground storage $21,534
Equalization tank main fee
P.O. Box 942879
Sacramento, CA 94279-0058
The petition was signed by James English, officer/member.
AFA INVESTMENT: Has Control of Case Until March 28
--------------------------------------------------
At the behest of AFA Investment Inc., AFA Foods Inc., and their
debtor-affiliates, Bankruptcy Judge Mary F. Walrath extended the
Debtors' exclusive periods to file and solicit acceptances of a
Chapter 11 plan of reorganization. The exclusive plan filing
period is extended to Jan. 28 and the exclusive solicitation
period is extended to March 28.
This is the Debtors' second request for extension.
In a stipulation dated Dec. 14, the so-called Second Lien Secured
Parties agreed to extend the termination date under the Interim
Cash Collateral Order, thereby allowing the Debtors continued use
of cash collateral, through Dec. 17. The termination date under
the Interim Cash Collateral Order was previously extended through
Dec. 13, Dec. 7, Nov. 30, Nov. 21, Nov. 16, Nov. 12, Nov. 5, and
Oct. 29.
About AFA Foods
King of Prussia, Pennsylvania-based AFA Foods Inc. was one of the
largest processors of ground beef products in the United States.
The Company had five processing facilities and two ancillary
facilities across the country with annual processing capacity of
800 million pounds. AFA had seven facilities capable of producing
800 million pound of ground beef annually. Revenue in 2011 was
$958 million.
Yucaipa Cos. acquired the business in 2008 and currently owns 92%
of the common stock and all of the preferred stock.
AFA Foods, AFA Investment Inc. and other affiliates filed for
Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11127) on
April 2, 2012, after recent changes in the market for its ground
beef products and the impact of negative media coverage related to
boneless lean beef trimmings -- BLBT -- affected sales.
Judge Mary Walrath presides over the case. Lawyers at Jones Day
and Pachulski Stang Ziehl & Jones LLP serve as the Debtors'
counsel. FTI Consulting Inc. serves as financial advisors and
Imperial Capital LLC serves as marketing consultants. Kurtzman
Carson Consultants LLC serves as noticing and claims agent.
As of Feb. 29, 2012, on a consolidated basis, the Debtors' books
and records reflected approximately $219 million in assets and
$197 million in liabilities. AFA Foods, Inc., disclosed
$615,859,574 in assets and $544,499,689 in liabilities as of the
Petition Date.
Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven
members to the official committee of unsecured creditors in the
Chapter 11 cases of AFA Investment Inc., AFA Foods and their
debtor-affiliates. The Committee has obtained approval to hire
McDonald Hopkins LLC as lead counsel and Potter Anderson &
Corroon LLP serves as co-counsel. The Committee also obtained
approval to retain J.H. Cohn LLP as its financial advisor, nunc
pro tunc to April 13, 2012.
AFA, in its Chapter 11 case, sold plants and paid off the first-
lien lenders and the loan financing the Chapter 11 effort.
Remaining assets are $14 million cash and the right to file
lawsuits.
General Electric Capital Corp. and Bank of America Corp. provided
about $60 million in DIP financing. The loan was paid off in
July.
In October 2012, the Bankruptcy Court denied a settlement that
would have released Yucaipa Cos., the owner and junior lender to
AFA Foods, from claims and lawsuits the creditors might otherwise
bring, in exchange for cash to pay unsecured creditors' claims
under a liquidating Chapter 11 plan. Under the deal, Yucaipa
would receive $11.2 million from the $14 million, with the
remainder earmarked for unsecured creditors. Asset recoveries
above $14 million would be split with Yucaipa receiving 90% and
creditors 10%. Proceeds from lawsuits would be divided roughly
50-50.
AFA INVESTMENT: Yucaipa Wins Dismissal of Workers' Class Suit
-------------------------------------------------------------
Bankruptcy Judge Mary F. Walrath granted the request of Yucaipa
Corporate Initiatives Fund II, LLC, to dismiss a purposed class
action complaint filed by Nadia Sanchez, a former employee of AFA
Foods Inc. The Court, however, granted Ms. Sanchez leave to amend
the complaint within 30 days.
AFA Foods is wholly owned by AFA Investment, Inc., which, in turn,
is owned by Yucaipa. AFA Foods and its various subsidiaries were
leading distributors of ground beef and hamburger patties for
major retail and food-service clients and operated beef-processing
facilities in California, Georgia, New York, Pennsylvania, and
Texas. In March 2012, Debtors' business took an unexpected
downturn as a result of extensive negative media coverage over the
use of boneless lean-beef trimmings, dubbed "pink slime," in beef
products sold by AFA Foods to retail and food-service clients.
Public outcry led to a precipitous drop in sales of all ground-
beef products, including those that did not contain boneless lean-
beef trimmings.
On April 2, 2012, the Debtors filed voluntary Chapter 11
bankruptcy petitions. Later that week, the Debtors reduced the
workforce at some of its facilities, terminating many employees
including Ms. Sanchez, who worked at AFA Foods' facility in Los
Angeles, California.
On May 10, 2012, Ms. Sanchez filed a Class Action Complaint
alleging that she and 200 or so other employees at AFA Foods'
plants around the country were terminated without advance notice
in violation of the federal Worker Adjustment and Retraining
Notification Act, 29 U.S.C. Sec. 2101 et seq. and the California
Labor Code Sec. 1400 et seq. On Aug. 8, 2012, Yucaipa filed a
Motion to Dismiss the Complaint for failure to state a claim.
The case is NADIA SANCHEZ, on behalf of herself and all others
similarly situated, Plaintiff, v. AFA FOODS, INC., AFA INVESTMENT,
INC., and YUCAIPA CORPORATE INITIATIVES FUND II, LLC, Defendants,
Adv. Proc. No. 12-50710 (Bankr. D. Del.).
A copy of the Court's Dec. 14, 2012 Memorandum Opinion is
available at http://is.gd/4VyFlVfrom Leagle.com.
About AFA Foods
King of Prussia, Pennsylvania-based AFA Foods Inc. was one of the
largest processors of ground beef products in the United States.
The Company had five processing facilities and two ancillary
facilities across the country with annual processing capacity of
800 million pounds. AFA had seven facilities capable of producing
800 million pound of ground beef annually. Revenue in 2011 was
$958 million.
Yucaipa Cos. acquired the business in 2008 and currently owns 92%
of the common stock and all of the preferred stock.
AFA Foods, AFA Investment Inc. and other affiliates filed for
Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11127) on
April 2, 2012, after recent changes in the market for its ground
beef products and the impact of negative media coverage related to
boneless lean beef trimmings -- BLBT -- affected sales.
Judge Mary Walrath presides over the case. Lawyers at Jones Day
and Pachulski Stang Ziehl & Jones LLP serve as the Debtors'
counsel. FTI Consulting Inc. serves as financial advisors and
Imperial Capital LLC serves as marketing consultants. Kurtzman
Carson Consultants LLC serves as noticing and claims agent.
As of Feb. 29, 2012, on a consolidated basis, the Debtors' books
and records reflected approximately $219 million in assets and
$197 million in liabilities. AFA Foods, Inc., disclosed
$615,859,574 in assets and $544,499,689 in liabilities as of the
Petition Date.
Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven
members to the official committee of unsecured creditors in the
Chapter 11 cases of AFA Investment Inc., AFA Foods and their
debtor-affiliates. The Committee has obtained approval to hire
McDonald Hopkins LLC as lead counsel and Potter Anderson &
Corroon LLP serves as co-counsel. The Committee also obtained
approval to retain J.H. Cohn LLP as its financial advisor, nunc
pro tunc to April 13, 2012.
AFA, in its Chapter 11 case, sold plants and paid off the first-
lien lenders and the loan financing the Chapter 11 effort.
Remaining assets are $14 million cash and the right to file
lawsuits.
General Electric Capital Corp. and Bank of America Corp. provided
about $60 million in DIP financing. The loan was paid off in
July.
In October 2012, the Bankruptcy Court denied a settlement that
would have released Yucaipa Cos., the owner and junior lender to
AFA Foods, from claims and lawsuits the creditors might otherwise
bring, in exchange for cash to pay unsecured creditors' claims
under a liquidating Chapter 11 plan. Under the deal, Yucaipa
would receive $11.2 million from the $14 million, with the
remainder earmarked for unsecured creditors. Asset recoveries
above $14 million would be split with Yucaipa receiving 90% and
creditors 10%. Proceeds from lawsuits would be divided roughly
50-50.
ALDERMAN RAILCAR: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Alderman Railcar Services, Inc.
P.O. Box 298
Keysville, VA 23947
Bankruptcy Case No.: 12-62820
Chapter 11 Petition Date: December 14, 2012
Court: United States Bankruptcy Court
Western District of Virginia (Lynchburg)
Judge: William E. Anderson
Debtor's Counsel: C. Connor Crook, Esq.
BOYLE, BAIN, REBACK & SLAYTON
420 Park Street
Charlottesville, VA 22902
Tel: (434) 979-7900
Fax: (434) 293-5017
E-mail: connor.crook@bbrs.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 20 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/vawb12-62820.pdf
The petition was signed by William H. Alderman, Jr., president.
ALETHEIA RESEARCH: SEC Accuses CEO of Trading Scheme
----------------------------------------------------
Maria Chutchian at Bankruptcy Law360 reports that the U.S.
Securities and Exchange Commission on Friday accused a Santa
Monica-based hedge fund manager and his bankrupt investment
advisory firm of "cherry picking" winning trades for their own
accounts and and favored clients, while sticking other unlucky
clients with losing trades.
Aletheia Research and Management Inc., which filed for Chapter 11
protection in November, and its CEO, Peter Eichler Jr., allegedly
allocated losing trades disproportionately to the accounts of two
hedge funds managed by the firm, causing the funds' investors to
lose $4.4 million, according to Bankruptcy Law360.
Aletheia Research and Management, Inc., filed a bare-bones
Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-47718) on
Nov. 11, 2012. Attorneys at Greenberg Glusker represent the
Debtor. The board voted in favor of a bankruptcy filing due to
the company's financial situation and ongoing litigation.
According to the list of top largest unsecured creditors, Proctor
Investments has unliquidated and disputed claims of $16 million on
account of pending litigation.
ALLIANCE 2009: Can Hire H3GM as Bankruptcy Counsel
--------------------------------------------------
Alliance 2009 LLC sought and obtained approval from the Bankruptcy
Court to employ Harwell Howard Hyne Gabbert & Manner, P.C., as its
Chapter 11 counsel at these hourly rates:
Partners/Shareholders $300 - $550 per hour
Associates $190 - $285 per hour
Law Clerks $150 - $190 per hour
Paralegals $140 - $185 per hour
Craig Vernon Gabbert, Jr., at Harwell Howard Hyne Gabbert & Manner
PC, leads the engagement.
In the year preceding the petition date, the Debtro has paid the
firm, also called H3GM in court papers, a total of $31,023 for
services provided and expenses incurred in connection with or in
contemplation of the Chapter 11 case. The firm holds a $150,000
retainer from the Debtor. According to the Debtor's court filing,
the money paid to H3GM and the money held on retainer was funded
in part, $11,715, by the Debtor's operating funds, and the balance
by a prepetition loan or advance from the Debtor's managing member
and payment direct to the law firm of the last prepetition bill.
H3GM attests it does not represent any interest adverse to the
Debtor or its estate in the matters upon which it is to be
engaged.
About Alliance 2009
Alliance 2009, LLC, filed a bare-bones Chapter 11 petition (Bankr.
M.D. Tenn. Case No. 12-08515) on Sept. 17, 2012. Bankruptcy Judge
Marian F. Harrison presides over the case. Harwell Howard Hyne
Gabbert & Manner PC, serves as the Debtor's counsel. The Debtor
estimated assets of $10 million to $50 million and up to debts of
up to $10 million as of the Chapter 11 filing.
In May, Regions Bank filed a lawsuit against Alliance 2009 and
Milton A. Turner (N.D. Ala. 2:2012cv01789) for breach of contract.
According to the Birmingham Business Journal, the lawsuit was on
account of the Debtor's failure to pay a $7.5 million loan. The
lawsuit claims the borrower failed to make payments due Oct. 15,
2011, on the $7.5 million loan made in December 2010. Mr. Turner
guaranteed the debt.
AMC INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: AMC Industries, LLC
P.O. Box 760
Holmdel, NJ 07733-0000
Bankruptcy Case No.: 12-39056
Chapter 11 Petition Date: December 13, 2012
Court: U.S. Bankruptcy Court
District of New Jersey (Trenton)
Judge: Kathryn C. Ferguson
Debtor's Counsel: Joseph Casello, Esq.
COLLINS, VELLA & CASELLO
1451 Highway 34 South, Suite 303
Farmingdale, NJ 07727
Tel: (732) 751-1766
Fax: (732) 751-1866
E-mail: jcasello@cvclaw.net
Scheduled Assets: $1,034,900
Scheduled Liabilities: $6,969,683
A copy of the Company's list of its 20 largest unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/njb12-39056.pdf
The petition was signed by Denise Mautone, managing member.
AMERICAN AIRLINES: Pilots Rebuff AMR CEO on Standalone Exit
-----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that a three-hour meeting with the chief executive of
officer of AMR Corp. failed to persuade leaders of the pilots'
union to back away from supporting a merger with US Airways Group
Inc. The union meets this week with the CEO of US Airways.
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).
ARISTA LLC: Faces Fraud Charges; Calif. Court Freezes Assets
------------------------------------------------------------
The U.S. Commodity Futures Trading Commission on Dec. 13 said it
filed a civil enforcement action in the U.S. District Court for
the Southern District of New York against Arista LLC, a registered
Commodity Pool Operator (CPO) with its principal place of business
in Newport Coast, Calif., and its principals Abdul Sultan Walji
(a/k/a Abdul Sultan Valji) and Reniero Francisco, both California
residents. The CFTC complaint charges the defendants with
defrauding investors in connection with operating a commodity pool
to trade commodity futures contracts and options, making false
statements to pool participants, misappropriating pool funds, and
making false statements in filings with the National Futures
Association (NFA). The CFTC complaint also charges the defendants
with failing to register with the CFTC during Arista's first year
of operating as a CPO.
On December 12, 2012, the same day the complaint was filed, U.S.
District Court Judge Paul A. Engelmayer entered an ex parte
restraining order freezing the defendants' assets, authorizing
expedited discovery by the CFTC, and prohibiting the defendants
from destroying or concealing books and records. The judge set a
hearing date on the CFTC's motion for a preliminary injunction for
December 21, 2012.
The CFTC complaint alleges that from at least February 2010
through January 2012, the defendants carried out a fraudulent
scheme to misappropriate millions of dollars from investors in
commodity futures and options. The defendants allegedly collected
funds from 39 investors totaling more than $9.5 million, of which
the defendants paid themselves $4.125 million in purported fees
while losing over $4.8 million trading. In order to perpetuate
their scheme, the defendants allegedly provided false quarterly
statements to investors and filed false quarterly reports with the
NFA. For example, the complaint alleges that the NFA, as a result
of its examination, determined that Arista's September 2011 pool
quarterly report (PQR) had falsely reported a positive 99 percent
rate of return in September 2011, when in reality Arista's rate of
return was negative 46.98 percent. NFA also determined that
Arista's PQR had falsely reported a net asset value (NAV) of
$8,421,139 as of September 30, 2011, when in reality Arista's NAV
as of that date was approximately $523,000, according to the
complaint.
In its continuing litigation, the CFTC seeks restitution and a
return of ill-gotten gains, civil monetary penalties, trading and
registration bans, and permanent injunctions against further
violations of the federal commodities laws, as charged.
In a parallel criminal action, on December 12, 2012, the U.S.
Attorney's Office for the Southern District of New York announced
that it filed a criminal complaint charging both Walji and
Francisco with conspiracy, securities fraud, and wire fraud
offenses. Walji is also charged with commodities fraud. Both
defendants were arrested in California by agents from the Federal
Bureau of Investigation (FBI).
The CFTC appreciates the assistance of the U.S. Department of
Justice, U.S. Attorney's Office for the Southern District of New
York, the FBI, and the NFA.
CFTC staff members responsible for this case are Michael P.
Geiser, Laura A. Martin, Douglas K. Yatter, Philip D. Rix, Ricardo
Smalls, Manal M. Sultan, Lenel Hickson, Jr., Stephen J. Obie, and
Vincent A. McGonagle.
ARROW ALUMINUM: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Arrow Aluminum Industries, Inc.
113 Neal Street
Martin, TN 38237
Bankruptcy Case No.: 12-13482
Chapter 11 Petition Date: December 13, 2012
Court: U.S. Bankruptcy Court
Western District of Tennessee (Jackson)
Judge: George W. Emerson, Jr.
Debtor's Counsel: Curtis D. Johnson, Jr., Esq.
LAW OFFICE OF JOHNSON AND BROWN, P.C.
11 South Idlewild Street
Memphis, TN 38104
Tel: (901) 725-7520
Fax: (901) 725-7570
E-mail: johnson775756@gmail.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Ted Blackwell, president.
B&J RIGHT: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: B&J Right of Way Maintenance, Inc.
690 Pebble Road
Kinston, AL 36353
Bankruptcy Case No.: 12-12278
Chapter 11 Petition Date: December 14, 2012
Court: United States Bankruptcy Court
Middle District of Alabama (Dothan)
Judge: William R. Sawyer
Debtor's Counsel: Gary A. Hudgins, Esq.
P.O. Box 1142
Dothan, AL 36302
Tel: (334) 794-8773
Fax: (334) 677-4650
E-mail: gahattheoffice@graceba.net
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by Lynnial J. Jones, president.
BAILEY ELECTRIC: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Bailey Electric, Inc.
1600 South 36th Avenue
Yakima, WA 98902
Bankruptcy Case No.: 12-05280
Chapter 11 Petition Date: December 13, 2012
Court: U.S. Bankruptcy Court
Eastern District of Washington (Spokane/Yakima)
Judge: Frank L. Kurtz
Debtor's Counsel: James P. Hurley, Esq.
HURLEY & LARA
411 N. Second Street
Yakima, WA 98901
Tel: (509) 248-4282
Fax: (509) 575-5661
E-mail: jamesphurley@hotmail.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 20 largest unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/waeb12-05280.pdf
The petition was signed by Robert W. Bailey, president.
BEARINGPOINT INC: Trustee Wants Ex-Directors Held in Contempt
-------------------------------------------------------------
Ciaran McEvoy at Bankruptcy Law360 reports that the liquidating
trustee for technology consulting firm BearingPoint Inc. on
Thursday asked a New York bankruptcy judge to hold the firm's
former executives in contempt and impose sanctions for allegedly
violating a court order by filing a malpractice and fraud lawsuit
against him in Virginia court.
Bankruptcy Law360 relates that John DeGroote also asked U.S.
Bankruptcy Judge Robert E. Gerber to order former BearingPoint CEO
F. Edward Harbach and former directors Roderick C. McGeary and
Eddie R. Munson to voluntarily dismiss the Virginia lawsuit they
filed in November.
About BearingPoint Inc.
BearingPoint, Inc. -- http://www.BearingPoint.com/-- was one of
the world's largest providers of management and technology
consulting services to Global 2000 companies and government
organizations in more than 60 countries worldwide.
BearingPoint, Inc., fka KPMG Consulting, Inc., together with its
units, filed for Chapter 11 protection (Bankr. S.D.N.Y., Case No.
09-10691) on Feb. 18, 2009. BearingPoint disclosed total assets
of $1.655 billion and debts of $2.201 billion as of Dec. 31, 2008.
The Debtors' legal advisor was Weil, Gotshal & Manges, LLP. Their
restructuring advisor was AlixPartners LLP, and their financial
advisor and investment banker was Greenhill & Co., LLC. Jeffrey
S. Sabin, Esq., at Bingham McCutchen LLP represented the
Creditors' Committee. Garden City Group served as claims and
notice agent.
On the Petition Date, BearingPoint filed a Chapter 11 plan of
reorganization negotiated with lenders prepetition. BearingPoint,
however, changed course and pursued a sale of its units, after
determining that creditor recoveries would be maximized through
sales of the businesses.
On Dec. 22, 2009, the Bankruptcy Court entered an order confirming
the Debtors' Modified Second Amended Joint Plan. On Dec. 31,
2009, a Notice of Effective Date of the Plan was filed with the
Bankruptcy Court. John DeGroote was appointed as liquidating
trustee under the Plan. The liquidating trustee is represented by
Katherine Dobson, Esq., at Bingham McCutchen, in Hartford,
Connecticut. The trustee also has retained McKool Smith P.C. and
Whiteford, Taylor & Preston L.L.P. to pursue claims against former
company officers.
BODIN OIL: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Bodin Oil Recovery, Inc.
18101 W. LA Hwy. 330
Abbeville, LA 70510
Bankruptcy Case No.: 12-51540
Chapter 11 Petition Date: December 14, 2012
Court: United States Bankruptcy Court
Western District of Louisiana (Lafayette)
Judge: Robert Summerhays
Debtor's Counsel: H. Kent Aguillard, Esq.
P.O. Drawer 391
Eunice, LA 70535
Tel: (337) 457-9331
E-mail: kaguillard@yhalaw.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 20 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/lawb12-51540.pdf
The petition was signed by Michael Williams, chief restructuring
officer.
BRANDYWINE OPERATING: Fitch Rates $250-Mil. Unsecured Notes 'BB+'
-----------------------------------------------------------------
Fitch Ratings assigns a credit rating of 'BB+' to the $250 million
aggregate principal amount 3.95% senior unsecured notes due 2023
issued by Brandywine Operating Partnership, L.P., a subsidiary of
Brandywine Realty Trust (NYSE: BDN). The notes were issued at
99.27% of par to yield 4.04%, representing a 235-basis point (bp)
spread to the benchmark treasury.
BDN will use the proceeds to fund previously announced tender
offers for up to $217 million of outstanding 7.5% senior notes due
2015 and up to $250 million of 6.0% senior notes due 2016. Any
excess proceeds will be used for general corporate purposes
including the repayment or repurchase of other debt.
Fitch currently rates Brandywine Realty Trust and its affiliates
as follows:
Brandywine Realty Trust
-- Issuer Default Rating (IDR) 'BB+';
-- Preferred stock 'BB-'.
Brandywine Operating Partnership, L.P.
-- IDR 'BB+';
-- Unsecured revolving credit facility 'BB+';
-- Senior unsecured term loans 'BB+';
-- Senior unsecured notes 'BB+.'
The Rating Outlook is Stable.
The ratings reflect the company's credit strengths, including its
manageable debt maturity and lease expiration schedules, granular
tenant base, and healthy access to capital markets. Operating
fundamentals in Brandywine's markets remain weak and likely will
be so in the near-to-medium term. However, Fitch expects the
company's leverage and coverage metrics to remain appropriate for
the rating category over the next 12-24 months.
Overall, Brandywine's credit profile is improving, and
fundamentals, though still weak are showing signs of improvement.
Despite this improvement, Fitch does not anticipate that
Brandywine's credit profile will improve enough over the next 12-
24 months to warrant an Outlook revision to Positive at this
time,.
The economic recovery remains fragile, with the high unemployment
rate continuing to adversely impact business prospects of many of
Brandywine's tenants. Brandywine's portfolio is focused in the
Mid-Atlantic region, with the top regions represented by the
Pennsylvania suburbs (29.5% of net operating income [NOI] for the
three months ended Sept. 30, 2012) Philadelphia central business
district (24.3%), Metropolitan D.C. (18.8%), New Jersey/Delaware
(12.3%), Richmond, VA (6.1%), Austin (5.7%) and California (3.0%).
Fitch views the geographic concentration as a modest credit
negative.
The company's portfolio benefits from tenant diversification, with
the top 10 tenants representing 24.3% of total base rent at Sept.
30, 2012, and no tenant except for the U.S. Government Services
Administration (GSA) comprises more than 3% of total base rent.
The company's geographic focus, with exposure to some weaker
submarkets with low barriers to entry, has provided limited growth
notwithstanding decent performance by the stronger CBD and urban
core markets, most notably the Philadelphia CBD and the
Pennsylvania Crescent markets. Same-store NOI on a cash basis
declined 5.2%, 3.7% and 2.7% in 2011, 2010 and 2009, respectively.
SSNOI grew 1.8% in 1Q 2012, declined 0.7% in second quarter
(2Q'12) and grew 3.4% in 3Q'12, driven primarily by rising
occupancy.
Since 2006, Brandywine has underperformed a selected office peer
group by approximately 310 bps in both same-property NOI growth
performance and occupancy metrics. Brandywine has also
underperformed its markets on an NOI growth basis, as followed by
Property & Portfolio Research (PPR), by approximately 150 bps
since 2006.
Weak occupancy and rent growth combined with elevated recurring
capital expenditures have had a negative impact on fixed-charge
coverage levels. Fixed-charge coverage for the 12 months ended
Sept. 30, 2012 was 1.6x, compared with 1.5x in 2011, and 1.6x in
2010. This coverage is appropriate for the 'BB+' IDR and
significantly below BDN's investment-grade suburban office peers.
Fitch expects the company's fixed-charge coverage ratio to rise
toward 1.9x through 2014, driven by moderately positive SSNOI
growth and moderating recurring capital expenditures. Fitch
defines fixed-charge coverage as recurring operating EBITDA less
recurring capital expenditures less straight line rent
adjustments, divided by interest expense, capitalized interest,
and preferred dividends.
Leverage (net debt divided by recurring operating EBITDA) remains
appropriate for the 'BB+' rating. Leverage was 7.0x at Sept. 30,
2012, compared with 7.2x and 7.5x at Dec. 31, 2011, and 2010,
respectively. Fitch expects leverage to decline to 6.7x in 2014,
due primarily to modestly improving fundamentals and asset sales
driving debt reduction.
The Stable Outlook reflects Fitch's view that Brandywine maintains
healthy access to capital, adequate liquidity and solid
unencumbered asset coverage of unsecured debt.
The company's liquidity coverage ratio is solid at 1.4x for the
period Oct. 1, 2012 through Dec. 31, 2014. Fitch defines
liquidity coverage as sources of liquidity (unrestricted cash,
availability from the company's unsecured revolving credit
facility, projected retained cash flows from operating activities
after dividends and distributions) divided by uses of liquidity
(debt maturities, projected recurring capital expenditures and
development/redevelopment expenditures).
The company has adequate unencumbered asset coverage of unsecured
debt for the 'BB+' IDR of 1.5x as of Sept. 30, 2012, which is
lower than investment-grade rated suburban office REIT peers.
Fitch calculates unencumbered assets by estimating BDN's
unencumbered NOI divided by a stressed 9% capitalization rate.
The two-notch differential between Brandywine's IDR and preferred
stock rating is consistent with Fitch's criteria for corporate
entities with an IDR of 'BB+'. Based on 'Treatment and Notching
of Hybrids in Nonfinancial Corporate and REIT Credit Analysis',
these preferred shares are deeply subordinated and have loss
absorption elements that would likely result in poor recoveries in
the event of a corporate default.
The following factors may result in positive momentum on the
ratings and/or Rating Outlook:
-- Sustained positive same-store NOI growth;
-- Fitch's expectation of net debt-to-recurring operating EBITDA
sustaining below 6.5x (leverage was 7.0x for the 12 months
ended Sept. 30, 2012);
-- Fitch's expectation of fixed-charge coverage sustaining above
2.0x (coverage was 1.6x for the 12 months ended Sept. 30,
2012).
The following factors may result in negative momentum on the
ratings and/or Rating Outlook:
-- Fitch's expectation of leverage sustaining above 8.0x;
-- Fitch's expectation of BDN maintaining fixed-charge coverage
below 1.5x;
-- A sustained decline in unencumbered asset coverage below 1.5x
(defined as annualized unencumbered property net operating
income divided by a 9% capitalization rate).
CAPSUGEL HOLDINGS: Moody's Affirms 'B2' CFR; Outlook Positive
-------------------------------------------------------------
Moody's Investors Service changed the outlook of Capsugel Holdings
S.A. and related entities to positive from stable. Moody's
affirmed the B2 Corporate Family rating as well as the B1 rating
on the existing secured credit facility and the Caa1 rating on the
unsecured notes.
The positive outlook reflects Moody's expectation that Capsugel
will continue to deleverage over the next year through EBITDA
growth and voluntary debt repayment. The company has meaningfully
reduced debt /EBITDA since Kohlberg Kravis Roberts & Co. L.P.
(KKR) acquired the company in August 2011 and Capsugel has
executed the transition away from Pfizer extremely well.
Ratings affirmed:
Capsugel Holdings S.A
Corporate Family Rating, B2
Probability of Default Rating, B2
Capsugel FinanceCo S.C.A.
EUR325 million senior unsecured notes due 2019, Caa1 (LGD5, 86%)
Capsugel Holdings US, Inc and other borrowers
$150 million senior secured revolving facility expiring 2016, B1
(LGD3, 33%)
$875 million senior secured term loan due 2018, B1 (LGD3, 33%)
RATINGS RATIONALE
The B2 CFR reflects Capsugel's leverage, which though
significantly improved over the last 18 months, remains high as
well as the company's moderate free cash flow relative to debt.
The rating also reflects the company's modest overall size (by
revenue), and high concentration in a niche oral solids dosing
market. Other credit risks include the company's exposure to
gelatin costs, which have been rising rapidly, as well as the
potential for shareholder dividends, given its ownership by KKR.
The rating and positive outlook is supported by the company's
impressive track record of organic, constant currency revenue
growth, operating margin expansion and debt repayment since the
leveraged buyout. The rating is also supported by the company's
leadership in supplying hard capsules to the pharmaceutical and
dietary supplement industries, its good diversity by geography and
customer and its strong liquidity.
If Capsugel continues to grow EBITDA and reduce debt such that
adjusted debt to EBITDA is sustained below 5.0 times (including
Moody's standard adjustments), and free cash flow to debt is
sustained around 8% Moody's could upgrade the ratings. An upgrade
would also require continued stability in profit margins despite
fluctuations in commodity prices (including gelatin).
Though not anticipated, Moody's could downgrade the ratings if the
company sees deterioration in sales or profitability or if
leverage increases, such that debt/EBITDA rises above 6.5 times.
The principal methodology used in rating Capsugel was the Global
Heavy Manufacturing Rating Methodology published November 2009.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA, published June 2009.
Capsugel, headquartered in Morristown, New Jersey, is a developer
and manufacturer of capsule products and other drug delivery
systems for the pharmaceutical and dietary supplement industries.
The company was a business unit of Pfizer Inc. prior to being sold
in 2011 to Kohlberg Kravis Roberts & Co. L.P. (KKR) for $2.375
billion. Revenue for the twelve months ended September 30, 2012
approximated $888 million.
CHOCTAW GENERATION: S&P Cuts Rating on $321MM Certificates to 'D'
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on Choctaw
Generation L.P.'s $321 million series A and B pass through trust
certificates to 'D' from 'CC' as per its criteria. Currently there
is $282 million outstanding. On Dec. 13, 2012, Choctaw reached a
forbearance agreement with the lenders that expires on Feb. 15,
2013. "We consider this to be a default under our criteria even
though the next debt payment is due on Dec. 15, 2012," S&P said.
"The recovery rating is '4' indicating our expectation for average
(30% to 50%) recovery. The recovery rating assumes that the power
purchase operating agreement (PPOA) remains in place because it
includes a provision that project bankruptcy is not an event of
default unless it affects the project's ability to deliver
capacity or energy to the Tennessee Valley Authority. The recovery
also assumes that the capital expenditures to improve the heat
rate are made post-default and reduce the heat rate by roughly 400
Btu to 500 Btu per kilowatt-hour (kWh). At the end of 2012, the
project will have about $282 million of debt outstanding, or $641
per kW. We base our recovery rating on discounted cash flows from
2013 through when the PPOA expires, reduced by 5% for
administrative expenses, for a total of about $141 million. We
increase debt by six months of prepetition interest, for a total
of about $298 million. The result is a 47% recovery, or a recovery
rating of '4' (average recovery)," S&P said.
RATING LIST
Ratings Lowered
To From
Choctaw Generation L.P.
Series A and B pass through
trust certificates D CC/Negative
Recovery rating 4 4
COMMONWEALTH GROUP: Files Schedules of Assets and Liabilities
-------------------------------------------------------------
Commonwealth Group-Mocksville Partners, LP filed with the
Bankruptcy Court for Eastern District of Tennessee its schedules
of assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $11,263,628
B. Personal Property $127,950
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $7,515,229
E. Creditors Holding
Unsecured Priority
Claims $69,275
F. Creditors Holding
Unsecured Non-priority
Claims $15,084,492
----------- -----------
TOTAL $11,391,578 $22,668,998
About Commonwealth Group - Mocksville Partners
Commonwealth Group-Mocksville Partners, LP, owns a retail center
and adjacent undeveloped land in Davie County, North Carolina.
Mocksville Partners filed a bare-bones Chapter 11 petition (Bankr.
E.D. Tenn. Case No. 12-34319) on Oct. 25, 2012, in Knoxville,
Tennessee. The Debtor's principal assets are located at Cooper
Creek Drive, in Mocksville, North Carolina. Judge Richard Stair
Jr. presides over the case. Maurice K. Guinn, Esq., at Gentry,
Tipton & McLemore P.C., serves as counsel. The Debtor estimated
assets and debts of $10 million to $50 million. The formal
schedules of assets and liabilities are due Nov. 8, 2012. The
petition was signed by Milton Turner, chief manager and general
partner.
CORDILLERA GOLF: Wind Rose Wins Auction at $14.2 Million
--------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the four-course golf club at the Cordillera resort
community in Edwards, Colorado, will be purchased by Wind Rose
Properties LLC for $14.2 million. Wind Rose won the auction last
week. The sale goes up for approval at Dec. 17 hearing.
The report relates the auction underpins a proposed Chapter 11
reorganization plan jointly sponsored with the official creditors'
committee. The plan includes a settlement announced in September
designed to wrap up both the bankruptcy and accompanying class
lawsuits by club members against owner David Wilhelm. If Wind
Rose doesn't complete the purchase, secured lender Alpine Bank is
the backup purchaser.
The settlement, the report points out, required selling the club,
with proceeds distributed in the order of priority specified in
bankruptcy law. Club members have unsecured claims. The
settlement gave Alpine Bank an approved secured claim of
$13 million while Mr. Wilhelm's secured claim is $7.5 million.
About Cordillera Golf
Cordillera Golf Club, LLC, owns an exclusive 730-acre four-course
golf club at the Cordillera resort community in Edwards, Colorado.
The club is located at the 7,000-acre Cordillera development,
which has 1,087 residential lots. Non-equity club membership is
open to community residents. The club has three golf courses, a
Dave Pelz designed short course, five swimming pools, and tennis
courts. The membership plan provides that there will be no more
than 1,085 golf memberships and up to 100 social memberships.
Half of all property owners within Cordillera are club members.
Cordillera Golf Club filed for Chapter 11 bankruptcy protection
(Bankr. D. Del. Case No. 12-11893) on June 26, 2012, the same day
a $12.7 million loan was due to Alpine Bank of Colorado. The club
blamed lower membership rates and tensions with current members
for the bankruptcy.
David A. Wilhelm, manager of CGH Manager LLC, manager, signed the
Chapter 11 petition. Mr. Wilhelm acquired 100% interest in the
Debtor in 2009 following an arbitration that stemmed from
revelations that the then owners of the 70% interests had diverted
funds away from the Debtor's operations.
In the petition, the Debtor estimated $10 million to $50 million
in assets and debts, including secured debt of $12.7 million owed
to Alpine Bank and a $7.5 million secured claim by Mr. Wilhelm.
Delaware Bankruptcy Judge Christopher S. Sontchi presided over the
case. Lawyers at Young, Conaway, Stargatt & Taylor and Foley &
Lardner LLP serve as the Debtor's counsel. Omni Management Group
LLC serves as the Debtor's claims agent.
On July 16, 2012, the Delaware Court granted the request of
certain club members to transfer the venue of the case to the
Bankruptcy Court in Colorado. The case was endorsed to Hon.
A. Bruce Campbell in Denver (Bankr. D. Colo. Case No. 12-24882).
An official committee of unsecured creditors has been appointed in
the case. The Committee members consist of various homeowner and
trade creditors of the Debtor. All members have Colorado
addresses. The Committee is represented by Munsch Hardt Kopf &
Harr PC as counsel.
Certain homeowners also have retained separate counsel, Michael S.
Kogan, Esq., at Kogan Law Firm, APC.
Secured lender, Alpine Bank in Vail, Colo., is represented by
lawyers at Ballard Spahr LLP.
CROWN CASTLE: S&P Keeps 'B+' Rating on $1.5-Bil. Credit Facilities
------------------------------------------------------------------
Standard & Poor's Ratings Services said that its issue-level
rating on Crown Castle Operating Co.'s secured credit facilities
remains unchanged at 'B+', following the company's upsizing of its
revolving credit facility to $1.5 billion from $1 billion through
an amendment to the credit agreement. "However, we revised the
recovery rating on the credit facilities to '4' from '3',
indicating average (30% to 50%) recovery prospects in the event of
a payment default," S&P said.
"The revision primarily reflects the larger amount of secured debt
at this entity, which results in a higher claim in a default
scenario, coupled with less residual value from indirect
subsidiary CC Holdings GS V LLC following its recent addition of
secured debt which is structurally senior to the Crown Castle
Operating Co. secured debt," S&P said.
RATINGS LIST
Crown Castle International Corp.
Corporate Credit Rating B+/Stable/--
Issue Ratings Unchanged; Recovery Ratings Revised
To From
Crown Castle Operating Co.
Senior Secured Credit Fac. B+ B+
Recovery Rating 4 3
D H L ASSOCIATES: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: D H L Associates, Inc.
7370 Borman Road
New Tripoli, PA 18066
Bankruptcy Case No.: 12-21471
Chapter 11 Petition Date: December 13, 2012
Court: U.S. Bankruptcy Court
Eastern District of Pennsylvania (Reading)
Judge: Richard E. Fehling
Debtor's Counsel: John R.K. Solt, Esq.
JOHN R. K. SOLT, P.C.
1425 Hamilton Street
Allentown, PA 18102
Tel: (610) 433-9717
Fax: (610) 433-6771
E-mail: jrksolt@verizon.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Leroy F. Buskirk, president.
DAFFY'S INC: Asks for Court OK for $12 Million Emergency Loan
-------------------------------------------------------------
American Bankruptcy Institute reports that Daffy's Inc. said it
needs to immediately tap a fresh $12 million loan in order to
complete the sale of its real estate assets.
About Daffy's Inc.
Secaucus, New Jersey-based Daffy's Inc., a 19-store chain, off-
price retailer of designer fashions for women, men, children, and
the home, located in the New York metropolitan area and
Philadelphia, filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y.
Case No. 12-13312) on Aug. 1, 2012, with a plan to shutter the
business and pay off creditors in full. A copy of the Plan is
available at:
http://bankrupt.com/misc/Daffys_Chapter_11_Plan.pdf
The Debtor has an Asset Purchase, Assignment and Support
Agreement, dated as July 18, 2012, with Marcia Wilson, The Wilson
2003 Family Trust, and Jericho Acquisitions I LLC, pursuant to
which the Debtor's leasehold interests will be sold to Jericho
Acquisitions I LLC through the Plan.
The Debtor has hired Gordon Brothers Retail Partners, LLC and
Hilco Merchant Resources LLC to liquidate the Debtor's inventory.
The Debtor estimates that the proceeds received from the
liquidation of its inventory and the sale of its leasehold
interests will exceed at least $60 million to satisfy
approximately $37 million in claims. Cost of administering the
chapter 11 case will not exceed approximately $5 million (after
certain expenses are reimbursed pursuant to the Purchase
Agreement). Accordingly, the Debtor believes that the disposition
of the Debtor's principal assets will generate more than
sufficient cash to pay all holders of Allowed Claims (as such term
is defined in the Plan) in full, with interest, thus rendering all
classes under the Plan unimpaired.
The Debtor has filed its schedules, disclosing $51,106,469 in
total assets and $36,646,856 in total liabilities.
Bankruptcy Judge Martin Glenn presides over the case. The Debtor
is represented by Andrea Bernstein, Esq., and Debra A. Dandeneau,
Esq., at Weil, Gotshal & Manges LLP as counsel. Donlin, Recano &
Company, Inc., serves as claims and notice agent.
The Debtor's case is being funded by a $10 million postpetition
financing with Vim-3, L.L.C., Vimwilco, L.P., and Marcia Wilson,
as successor to Vim Associates, as guarantors; and Wells Fargo,
National Association, as DIP lender. The DIP loan consists of
$2.5 million in new money loans available on a revolving basis;
and the roll up of $6.2 million of existing prepetition debt.
Counsel for the DIP Lender are Donald E. Rothman, Esq., and
Nathan C. Pagett, Esq., at Riemer & Braunstein LLP.
Gordon Brothers and Hilco Merchant Resources are represented by
Curtis, Mallet-Prevost, Colt & Mosle LLP
Jericho Acquisition is represented by Brad Eric Scheler, Esq., at
Fried, Frank, Harris, Shriver & Jacobson LLP.
Marcia Wilson is represented by Dana B. Cobb, Esq., at Beattie
Padovano, LLC.
DAVE'S DOWNTOWN: Case Summary & 15 Unsecured Creditors
------------------------------------------------------
Debtor: Dave's Downtown Taverna, LLC
aka Dave's Taverna Express, LLC
957 Summit Avenue
Harrisonburg, VA 22802
Bankruptcy Case No.: 12-51585
Chapter 11 Petition Date: December 13, 2012
Court: U.S. Bankruptcy Court
Western District of Virginia (Harrisonburg)
Judge: Rebecca B. Connelly
Debtor's Counsel: Dale A. Davenport, Esq.
342 South Main Street
Harrisonburg, VA 22801
Tel: (540) 433-2444
E-mail: ddavenport@hooverpenrod.com
- and ?
Hannah White Hutman, Esq.
HANNAH W. HUTMAN, PLLC
64 W. Water Street
Harrisonburg, VA 22801
Tel: (540) 437-2970
Fax: (540) 437-2972
E-mail: hannah@hutmanlaw.com
Scheduled Assets: $429,611
Scheduled Liabilities: $1,820,980
A copy of the Company's list of its 15 unsecured creditors filed
with the petition is available for free at:
http://bankrupt.com/misc/vawb12-51585.pdf
The petition was signed by David P. Miller, manager.
DELUXE ENTERTAINMENT: S&P Cuts CCR to 'CCC+' on Declining Results
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on U.S. entertainment services provider Deluxe
Entertainment Services Group Inc. to 'CCC+' from 'B-'. The outlook
is negative.
"We also lowered our issue-level rating on Deluxe Entertainment's
senior secured term loan to 'B-' from 'B'. The recovery rating on
this debt remains at '2', indicating our expectation for
substantial (70% to 90%) recovery for lenders in the event of a
payment default," S&P said.
"The rating action reflects our expectation that the company's
film processing and distribution segment will continue to decline
at a steep pace, pressuring covenant compliance and discretionary
cash flow, which could potentially strain liquidity," said
Standard & Poor's credit analyst Daniel Haines.
The ratings on Deluxe Entertainment reflect Standard & Poor's view
that the company will continue to have a "vulnerable" business
risk profile and a "highly leveraged" financial risk profile. "Our
view of the company's financial risk profile is based on its high
mandatory amortization requirements relative to its discretionary
cash flow, aggressive financial policy, and thin margin of
compliance with financial covenants. Our opinion of Deluxe
Entertainment's business profile is based on its exposure to the
widespread adoption of digital projection technology by motion
picture exhibitors. We expect the company's film processing and
distribution business to continue to decline over the next few
years. We expect the company's creative service business will grow
at a moderate pace, but not sufficiently to prevent revenue
declines in the fourth quarter of 2012 and in 2013. We view Deluxe
Entertainment's management and governance as 'fair,'" S&P said.
"Deluxe Entertainment derives about one-quarter of its revenue
from film processing, an industry that has been in rapid decline
as theaters replace film projectors with digital projectors,
reducing the number of film prints they need. This business is
also vulnerable to fluctuations in the number of films slated for
release by the studios it services. We expect film processing to
remain under tremendous pressure going forward. Separately, the
company provides various creative services to film, television,
and advertising content providers, which now account for about
three-quarters of revenue. These services have healthier long-term
fundamentals than film-release print manufacturing. This division
distributes digital movie content to theaters by shipping hard
drives, which should benefit from the rollout of digital
projectors in movie theaters. This business also stores and
distributes digital motion picture content to various devices or
content providers. Its revenues should be bolstered by the
proliferation of new content distribution channels. It stands to
gain from increasing demand for 2D-to-3D conversion of content
because of the increase in 3D theatrical releases and the
availability of 3D TVs," S&P said.
DEWEY & LEBOEUF: Aviva Sues Davis et al. Over Bond Placement
------------------------------------------------------------
The Wall Street Journal's Jennifer Smith and Dow Jones Newswires'
Peg Brickley report that British insurance company Aviva Plc is
suing Dewey & LeBoeuf LLP's former top managers, claiming they
lied about revenues and hid hundreds of millions of dollars in
obligations to "rainmaker" partners at the firm. Aviva is
accusing former Dewey Chairman Steven Davis, former Executive
Director Stephen DiCarmine and the law firm's former finance
chief, Joel Sanders, of violating federal and state securities
laws.
The report relates the lawsuit turns on a private bond placement
that Dewey floated in 2010 to refinance about $150 million in
existing debt. Aviva's U.S. arm bought $35 million in secured
notes, but took a nearly $16 million hit when it sold the bonds in
May this year, shortly before Dewey sought Chapter 11 protection.
According to the report, the lawsuit was filed Friday in federal
court in Iowa where Aviva's U.S. arm is based. The lawsuit
alleges Messrs. Davis, DiCarmine and Sanders failed to disclose
Dewey's partner-pay deals to prospective bondholders and painted
an unfairly rosy picture of the law firm's finances at a time when
"Dewey's financial situation was so dire that it was unable to
make required payments due and owing to retired partners."
The report relates attorneys for Messrs. Davis, DiCarmine and
Sanders said the lawsuit had no merit. "Aviva was a sophisticated
investor who conducted its own due diligence but, rather than
accept responsibility for its own investment decisions, now looks
for someone else to blame," said Kevin Van Wart, Esq., a partner
at Kirkland & Elllis LLP who represents Mr. Davis.
According to the report, Ned Bassen, Esq., a partner at Hughes
Hubbard & Reed LLP who represents Mr. DiCarmine and Mr. Sanders,
said he would seek to have the Aviva suit moved to bankruptcy
court in Manhattan, which oversees Dewey's case. "They were
acting on behalf of the firm, not in their personal capacities,"
Mr. Bassen said. He called the Aviva lawsuit "an insurance grab."
About Dewey & LeBoeuf
Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y.
Case No. 12-12321) to complete the wind-down of its operations.
The firm had struggled with high debt and partner defections.
Dewey disclosed debt of $245 million and assets of $193 million in
its chapter 11 filing late evening on May 29, 2012.
Dewey & LeBoeuf LLP operated as a prestigious, New York City-
based, law firm that traced its roots to the 2007 merger of Dewey
Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird
-- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in
1929. In recent years, more than 1,400 lawyers worked at the firm
in numerous domestic and foreign offices.
At its peak, Dewey employed about 2,000 people with 1,300 lawyers
in 25 offices across the globe. When it filed for bankruptcy,
only 150 employees were left to complete the wind-down of the
business.
Dewey's offices in Hong Kong and Beijing are being wound down.
The partners of the separate partnership in England are in process
of winding down the business in London and Paris, and
administration proceedings in England were commenced May 28. All
lawyers in the Madrid and Brussels offices have departed. Nearly
all of the lawyers and staff of the Frankfurt office have
departed, and the remaining personnel are preparing for the
closure. The firm's office in Sao Paulo, Brazil, is being
prepared for closure and the liquidation of the firm's local
affiliate. The partners of the firm in the Johannesburg office,
South Africa, are planning to wind down the practice.
The firm's ownership interest in its practice in Warsaw, Poland,
was sold to the firm of Greenberg Traurig PA on May 11 for
$6 million. The Pension benefit Guaranty Corp. took $2 million of
the proceeds as part of a settlement.
Judge Martin Glenn oversees the case. Albert Togut, Esq., at
Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy
Solutions LLC serves as claims and notice agent. The petition was
signed by Jonathan A. Mitchell, chief restructuring officer.
JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the
lenders under the Revolver Agreement, hired Kramer Levin Naftalis
& Frankel LLP. JPMorgan, as Collateral Agent for the Revolver
Lenders and the Noteholders, hired FTI Consulting and Gulf
Atlantic Capital, as financial advisors. The Noteholders hired
Bingham McCutchen LLP as counsel.
The U.S. Trustee formed two committees -- one to represent
unsecured creditors and the second to represent former Dewey
partners. The creditors committee hired Brown Rudnick LLP led by
Edward S. Weisfelner, Esq., as counsel. The Former Partners hired
Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt &
Winters, LLP, as counsel.
Dewey on Nov. 21, 2012, filed a Chapter 11 liquidating plan and
disclosure statement, which incorporates the partner contribution
plan approved by the bankruptcy court in October. Under the so-
called PCP, 440 former partners will receive releases in exchange
for $71.5 million in contributions. The plan is also based on a
proposed settlement between secured lenders and the unsecured
creditors' committee. Secured lenders will have an allowed
secured claim for $261.9 million, along with a $100 million
unsecured claim for the shortfall in collections on their
collateral. Unsecured creditors will have $285 million in allowed
claim. In the new lender settlement, secured creditors would
permit $54 million in collection of accounts receivable to be
utilized in the liquidation. From the first $67.5 million
collected in the partners' settlement, the plan offers 80% to
secured lenders, with the remaining 20% earmarked for unsecured
creditors. Collections from the partners settlement above $67.5
million would be split 50-50 between secured and unsecured
creditors. Meanwhile, secured creditors will receive no
distribution on the $100 million deficiency claim from the first
$67.5 million from the partners' settlement. If secured lenders
don't agree to release partners, they receive nothing from the
partners' settlement payments. From collection of other assets --
such as insurance, claims against firm management and lawsuits --
the plan divides proceeds, with lenders receiving 60% to 70% and
unsecured creditors taking the remainder.
A hearing to approve the explanatory Disclosure Statement is set
for Jan. 3 at 2:00 p.m. Objections to the Disclosure Statement
are due Dec. 24. The Debtor aims a confirmation hearing to
approve the plan by the end of February.
DEWEY & LEBOEUF: Insurer Sues Execs Over Losses on $35MM Notes
--------------------------------------------------------------
Maria Chutchian at Bankruptcy Law360 reports that Aviva Life and
Annuity Co. on Friday accused three former Dewey & LeBoeuf LLP
executives of lying about the true state of the firm's finances
when it issued $35 million in senior secured notes in April 2010,
which resulted in substantial losses for the insurer.
About Dewey & LeBoeuf
Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y.
Case No. 12-12321) to complete the wind-down of its operations.
The firm had struggled with high debt and partner defections.
Dewey disclosed debt of $245 million and assets of $193 million in
its chapter 11 filing late evening on May 29, 2012.
Dewey & LeBoeuf LLP operated as a prestigious, New York City-
based, law firm that traced its roots to the 2007 merger of Dewey
Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird
-- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in
1929. In recent years, more than 1,400 lawyers worked at the firm
in numerous domestic and foreign offices.
At its peak, Dewey employed about 2,000 people with 1,300 lawyers
in 25 offices across the globe. When it filed for bankruptcy,
only 150 employees were left to complete the wind-down of the
business.
Dewey's offices in Hong Kong and Beijing are being wound down.
The partners of the separate partnership in England are in process
of winding down the business in London and Paris, and
administration proceedings in England were commenced May 28. All
lawyers in the Madrid and Brussels offices have departed. Nearly
all of the lawyers and staff of the Frankfurt office have
departed, and the remaining personnel are preparing for the
closure. The firm's office in Sao Paulo, Brazil, is being
prepared for closure and the liquidation of the firm's local
affiliate. The partners of the firm in the Johannesburg office,
South Africa, are planning to wind down the practice.
The firm's ownership interest in its practice in Warsaw, Poland,
was sold to the firm of Greenberg Traurig PA on May 11 for
$6 million. The Pension benefit Guaranty Corp. took $2 million of
the proceeds as part of a settlement.
Judge Martin Glenn oversees the case. Albert Togut, Esq., at
Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy
Solutions LLC serves as claims and notice agent. The petition was
signed by Jonathan A. Mitchell, chief restructuring officer.
JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the
lenders under the Revolver Agreement, hired Kramer Levin Naftalis
& Frankel LLP. JPMorgan, as Collateral Agent for the Revolver
Lenders and the Noteholders, hired FTI Consulting and Gulf
Atlantic Capital, as financial advisors. The Noteholders hired
Bingham McCutchen LLP as counsel.
The U.S. Trustee formed two committees -- one to represent
unsecured creditors and the second to represent former Dewey
partners. The creditors committee hired Brown Rudnick LLP led by
Edward S. Weisfelner, Esq., as counsel. The Former Partners hired
Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt &
Winters, LLP, as counsel.
Dewey on Nov. 21, 2012, filed a Chapter 11 liquidating plan and
disclosure statement, which incorporates the partner contribution
plan approved by the bankruptcy court in October. Under the so-
called PCP, 440 former partners will receive releases in exchange
for $71.5 million in contributions. The plan is also based on a
proposed settlement between secured lenders and the unsecured
creditors' committee. Secured lenders will have an allowed
secured claim for $261.9 million, along with a $100 million
unsecured claim for the shortfall in collections on their
collateral. Unsecured creditors will have $285 million in allowed
claim. In the new lender settlement, secured creditors would
permit $54 million in collection of accounts receivable to be
utilized in the liquidation. From the first $67.5 million
collected in the partners' settlement, the plan offers 80% to
secured lenders, with the remaining 20% earmarked for unsecured
creditors. Collections from the partners settlement above $67.5
million would be split 50-50 between secured and unsecured
creditors. Meanwhile, secured creditors will receive no
distribution on the $100 million deficiency claim from the first
$67.5 million from the partners' settlement. If secured lenders
don't agree to release partners, they receive nothing from the
partners' settlement payments. From collection of other assets --
such as insurance, claims against firm management and lawsuits --
the plan divides proceeds, with lenders receiving 60% to 70% and
unsecured creditors taking the remainder.
A hearing to approve the explanatory Disclosure Statement is set
for Jan. 3 at 2:00 p.m. Objections to the Disclosure Statement
are due Dec. 24. The Debtor aims a confirmation hearing to
approve the plan by the end of February.
DOG HOUSE: Case Summary & 3 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: Dog House Music, Inc.
525 Courtney Way
Lafayette, CO 80026
Bankruptcy Case No.: 12-35149
Chapter 11 Petition Date: December 13, 2012
Court: U.S. Bankruptcy Court
District of Colorado (Denver)
Judge: A. Bruce Campbell
Debtor's Counsel: Leigh Flanagan, Esq.
KUTNER MILLER BRINEN, P.C.
303 E. 17th Avenue, Suite 500
Denver, Co 80203
Tel: (303) 832-2400
Fax: (303) 832-1510
E-mail: laf@kutnerlaw.com
Scheduled Assets: $15,690
Scheduled Liabilities: $1,090,401
The petition was signed by Gary Lennox, president.
Affiliates that simultaneously filed for Chapter 11:
Debtor Case No.
------ --------
Gary Lennox 12-35152
D&G Music, LLC 12-35150
Assets: $560,000
Liabilities: $1,085,758
A. A copy of Dog House Music's list of its three largest unsecured
creditors is available for free at:
http://bankrupt.com/misc/cob12-35149.pdf
B. A copy of D&G Music's list of its two largest unsecured
creditors is available for free at:
http://bankrupt.com/misc/cob12-35150.pdf
DREIER LLP: Marc Dreier's Former Landlord to Cough Up $300,000
--------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that renting a luxurious apartment to a Ponzi schemer can
turn out to be a painful experience, as the owner of a fancy
apartment building in Manhattan learned the hard way.
The report recounts that convicted swindler Marc Dreier rented a
penthouse apartment on the east side of Manhattan. The trustee
for Dreier's law firm sued the apartment owner for about $885,000
in rent over a period of 18 months. Mr. Dreier's fraud involved
selling fraudulent notes, with proceeds turned over to the law
firm he headed. Some of the stolen money, according to the
trustee, was used to pay Mr. Dreier's personal rent for the
penthouse, thus constituting a fraudulent transfer.
According to the report, Sheila M. Gowan, trustee for the Drier
firm, and the landlord agreed to settle for $300,000. From the
total, $200,000 will be paid in monthly installments over two
years. The settlement comes up for approval at U.S. Bankruptcy
Court in Manhattan at a Jan. 17 hearing.
About Marc Dreier and Dreier LLP
Marc Dreier founded New York-based law firm Dreier LLP --
http://www.dreierllp.com/-- in 1996. On Dec. 8, 2008, the U.S.
Securities and Exchange Commission filed a suit, alleging that Mr.
Dreier made fraudulent offers and sales of securities in several
cities, selling fake promissory notes to hedge and other private
investment funds. The SEC asserted that Mr. Dreier also
distributed phony financial statements and audit opinions, and
recruited accomplices in connection with that scheme. Mr. Dreier,
currently in prison, was charged by the U.S. government for
conspiracy, securities fraud and wire fraud (S.D.N.Y. Case No.
09-cr-00085).
Dreier LLP sought Chapter 11 protection (Bankr. S.D.N.Y. Case No.
08-15051) on Dec. 16, 2008. Stephen J. Shimshak, Esq., at Paul,
Weiss, Rifkind, Wharton & Garrison LLP, was tapped as counsel.
The Debtor estimated assets of $100 million to $500 million, and
debts between $10 million and $50 million in its Chapter 11
petition.
Sheila M. Gowan, a partner with Diamond McCarthy, was appointed
Chapter 11 trustee for the Dreier law firm. Ms. Gowan is
represented by Jason Porter, Esq., at Diamond McCarthy LLP.
Wachovia Bank National Association, the Dreier LLP Chapter 11
trustee, and Steven J. Reisman as post-confirmation representative
of the bankruptcy estate of 360networks (USA) Inc. signed a
petition that put Mr. Dreier into bankruptcy under Chapter 7 on
Jan. 26, 2009 (Bankr. S.D.N.Y. Case No. 09-10371). Mr. Dreier,
60, pleaded guilty to fraud and other charges in May 2009. The
scheme to sell $700 million in fake notes unraveled in late 2008.
Mr. Dreier is serving a 20-year sentence in a federal prison in
Minneapolis.
EDISON MISSION: Commences Chapter 11 Reorganization
---------------------------------------------------
Edison Mission Energy has reached an agreement with the holders of
a majority of EME's $3.7 billion of outstanding public
indebtedness and its parent company, Edison International EIX,
that, pursuant to a plan of reorganization and pending court
approval, would transition Edison International's equity interest
to EME's creditors, retire existing public debt and enhance EME's
access to liquidity. As EME implements its financial
restructuring, which will ultimately result in a substantial
deleveraging of the Company's balance sheet, its operations are
expected to continue in the normal course without interruption.
Under the agreement, Edison International will, among other
things, consensually transfer its 100% equity interest in EME to
unsecured creditors, including the Noteholders, and continue
certain tax sharing agreements through Dec. 31, 2014. The
continuation of the tax sharing agreements results in the
potential recognition of a substantial amount in tax sharing
payments to EME. As part of the restructuring process, Edison
International and EME will begin immediately to negotiate
agreements to ensure EME's smooth and effective transition to
operating as an independent entity following its separation from
Edison International, which is anticipated to occur by December
2014.
EME and several of its subsidiaries filed voluntary petitions with
the U.S. Bankruptcy Court for the Northern District of Illinois
under Chapter 11 of the U.S. Bankruptcy Code. The Company's
agreement with the Noteholders and Edison International is subject
to Bankruptcy Court approval.
"We are pleased to have reached this agreement, which we believe
reflects the long-term value potential of our organization," said
Pedro Pizarro, president of EME. "This is an important first step
in the process to reduce our debt, enhance our liquidity profile
and position EME for continued operation and future success while
preserving our ability to generate power safely and reliably at
our electric facilities across the country. Throughout this
process, business operations will continue in the normal course,
and we will continue to support our customers, suppliers and
employees."
Like other independent power generators, EME has been challenged
by depressed energy and capacity prices and high fuel costs
affecting its coal-fired facilities, combined with pending debt
maturities and the need to retrofit its coal-fired facilities to
comply with environmental regulations. EME has taken numerous
actions to address these external challenges, including retiring
uneconomic power plants, implementing labor reductions,
significantly reducing expenses without compromising safety and
compliance, diversifying its portfolio of power generation assets,
and developing a cost-effective environmental compliance program.
The Company believes that these efforts, together with its
financial restructuring, will position EME for profitability and
long-term success.
Pizarro continued, "EME is operationally healthy, and with the
support of the Noteholders, we plan to emerge from our
restructuring as a recapitalized company separate from Edison
International. We believe this financial restructuring--coupled
with the existing strength of our employees and assets--will
position us to take advantage of new opportunities while
preserving our focus on safe, reliable operations. We appreciate
the ongoing dedication of all our employees, whose commitment,
focus and expertise is essential to our success, and look forward
to continuing to work with our suppliers and project partners."
The Company filed a number of customary first-day motions
requesting authority to continue operations in the ordinary
course. The motions include requests to make wage and salary
payments and provide other normal-course benefits to employees, as
well as to pay all suppliers for goods and services delivered
post-petition. The Company expects to receive Court approval for
these requests, and it has ample liquidity to fund its business as
it enters the restructuring process.
The EME subsidiaries that filed for Chapter 11 protection include
Midwest Generation, which manages the Company's fleet of coal-
fired plants in Illinois. Certain other subsidiaries--including
Edison Mission Marketing & Trading, Edison Mission Operation &
Maintenance, and the Company's wind energy projects--were not
included in the filings.
Kirkland & Ellis LLP is serving as legal counsel to EME, Perella
Weinberg Partners, LP is acting as financial advisor and McKinsey
Recovery & Transformation Services U.S., LLC is acting as
restructuring advisor.
About Edison Mission
Santa Ana, California-based Edison Mission Energy is a holding
company whose subsidiaries and affiliates are engaged in the
business of developing, acquiring, owning or leasing, operating
and selling energy and capacity from independent power production
facilities. EME also engages in hedging and energy trading
activities in power markets through its subsidiary Edison Mission
Marketing & Trading, Inc.
EME was formed in 1986 and is an indirect subsidiary of Edison
International. Edison International also owns Southern California
Edison Company, one of the largest electric utilities in the
United States.
As of Dec. 31, 2010, EME's subsidiaries and affiliates owned or
leased interests in 39 operating projects with an aggregate net
physical capacity of 10,979 MW of which EME's pro rata share was
9,852 MW. At Dec. 31, 2010, EME's subsidiaries and affiliates
also owned four wind projects under construction totaling 480 MW
of net generating capacity.
The Company reported a $360 million net loss for the first nine
months of 2012 on operating revenue of $1.01 billion. It had a
net loss of $1.07 billion in 2011, compared with net income of
$163 million in 2010.
The Company's balance sheet at Sept. 30, 2012, showed
$8.17 billion in total assets, $6.68 billion in total liabilities
and $1.48 billion in total equity.
EDISON MISSION: Case Summary & 30 Largest Unsecured Creditors
-------------------------------------------------------------
Lead Debtor: Edison Mission Energy
3 MacArthur Place, Suite 100
Santa Ana, CA 92707
Bankruptcy Case No.: 12-49219
Affiliates that simultaneously sought Chapter 11 protection:
Debtor Case No.
------ --------
Camino Energy Company 12-49222
Chestnut Ridge Energy Company 12-49220
Edison Mission Energy Fuel Services, LLC 12-49221
Edison Mission Fuel Resources, Inc. 12-49223
Edison Mission Fuel Transportation, Inc. 12-49224
Edison Mission Holdings Co. 12-49225
Edison Mission Midwest Holdings Co. 12-49226
Midwest Finance Corp. 12-49227
Midwest Generation EME, LLC 12-49228
Midwest Generation, LLC 12-49218
Midwest Generation Procurement
Services, LLC 12-49229
Midwest Peaker Holdings, Inc. 12-49230
Mission Energy Westside, Inc. 12-49231
San Joaquin Energy Company 12-49232
Southern Sierra Energy Company 12-49233
Western Sierra Energy Company 12-49234
Type of Business: Edison Mission Energy is a holding company
whose subsidiaries and affiliates are engaged
in the business of developing, acquiring,
owning or leasing, operating and selling
energy and capacity from independent power
production facilities. EME also engages in
hedging and energy trading activities in power
markets through its subsidiary Edison Mission
Marketing & Trading, Inc.
Chapter 11 Petition Date: December 17, 2012
Court: U.S. Bankruptcy Court
Northern District of Illinois
Judge: Hon. Jacqueline P. Cox
Debtors'
Counsel: James H.M. Sprayregen, P.C.
Joshua A. Sussberg, Esq.
KIRKLAND & ELLIS LLP
601 Lexington Avenue
New York, New York 10022-4611
Tel: (212) 446-4800
Fax: (212) 446-4900
E-mail: james.sprayregen@kirkland.com
joshua.sussberg@kirkland.com
-- and --
David R. Seligman, P.C.
Sarah H. Seewer, Esq.
KIRKLAND & ELLIS LLP
300 North LaSalle
Chicago, Illinois 60654
Tel: (312) 862-2000
Fax: (312) 862-2200
E-mail: david.seligman@kirkland.com
sarah.seewer@kirkland.com
Debtors'
Restructuring
Advisor: MCKINSEY & COMPANY
Recovery and Transformation Services
55 East 52nd St., Suite 2100
New York, NY 10055
Tel: (707) 722-7653
Debtors'
Financial
Advisor: Michael A. Kramer
Kevin Cofsky
PERELLA WEINBERG PARTNERS
767 Fifth Avenue
Tel: (212) 287-3200
Fax: (212) 287-3201
Debtors'
Claims and
Noticing
Agent: GCG, Inc.
PO Box 9942
Dublin, OH 43017-5942
Telephone: (866) 241-6491
International Toll: (202) 470-4956
Fax: (866) 697-5553
E-mail: edisonmissioninfo@gcginc.com
Total Assets: $5,125,949,426 as of Nov. 30, 2012
Total Debts: $5,089,389,443 as of Nov. 30, 2012
The petition was signed by Maria Rigatti, authorized signatory.
Debtors' Consolidated List of Their 30 Largest Unsecured
Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
WELLS FARGO BANK, NA, AS 7.00% Senior Notes $1,249,728,000
INDENTURE TRUSTEE due May 15, 2017
ATTN MADDY HALL
ATTN: CORPORATE TRUST
ADMINISTRATION
707 WILSHIRE BLVD, 17TH FLR
LOS ANGELES, CA 90017
Tel: (213) 614-2588
WELLS FARGO BANK, NA, AS 7.20% Senior Notes $834,104,320
INDENTURE TRUSTEE due May 15, 2019
ATTN MADDY HALL
ATTN: CORPORATE TRUST
ADMINISTRATION
707 WILSHIRE BLVD, 17TH FLR
LOS ANGELES, CA 90017
Tel: (213) 614-2588
WELLS FARGO BANK, NA, AS 7.625% Senior Notes $731,612,826
INDENTURE TRUSTEE due May 15, 2027
ATTN MADDY HALL
ATTN: CORPORATE TRUST
ADMINISTRATION
707 WILSHIRE BLVD, 17TH FLR
LOS ANGELES, CA 90017
Tel: (213) 614-2588
WELLS FARGO BANK, NA, AS 7.75% Senior Notes $519,590,277
INDENTURE TRUSTEE due June 15, 2016
ATTN MADDY HALL
ATTN: CORPORATE TRUST
ADMINISTRATION
707 WILSHIRE BLVD, 17TH FLR
LOS ANGELES, CA 90017
Tel: (213) 614-2588
WELLS FARGO BANK, NA, AS 7.50% Senior Notes $518,958,333
INDENTURE TRUSTEE due June 15, 2013
ATTN MADDY HALL
ATTN: CORPORATE TRUST
ADMINISTRATION
707 WILSHIRE BLVD, 17TH FLR
LOS ANGELES, CA 90017
Tel: (213) 614-2588
NESBITT ASSET RECOVERY Leveraged Lease $23,373,648
SERIES P-1 Transaction
ATTN: ROBERT HINES, JR.
C/O WILMINGTON TRUST COMPANY
ATTN: CORPORATE TRUST
ADMINISTRATION
RODNEY SQUARE NORTH
1100 NORTH MARKET STREET
WILMINGTON, DE 19890
Tel: (302) 651-1000
NESBITT ASSET RECOVERY Leveraged Lease $20,135,833
SERIES J-1 Transaction
ATTN: ROBERT HINES, JR.
C/O WILMINGTON TRUST COMPANY
ATTN: CORPORATE TRUST
ADMINISTRATION
RODNEY SQUARE NORTH
1100 NORTH MARKET STREET
WILMINGTON, DE 19890
Tel: (302) 651-1000
COMMONWEALTH EDISON COMPANY $19,161,750
THREE LINCOLN CENTER
OAKBROOK TERRACE, IL 60181-4260
Tel: (630) 437-2271
POWERTON TRUST II Leveraged Lease $13,988,402
ATTN ROBERT HINES, JR. Transaction
C/O WILMINGTON TRUST COMPANY
ATTN: CORPORATE TRUST
ADMINISTRATION
RODNEY SQUARE NORTH
1100 NORTH MARKET STREET
WILMINGTON, DE 19890
Tel: (302) 651-1000
JOLIET TRUST II Leveraged Lease $11,430,658
ATTN ROBERT HINES, JR. Transaction
C/O WILMINGTON TRUST COMPANY
ATTN: CORPORATE TRUST
ADMINISTRATION
RODNEY SQUARE NORTH
1100 NORTH MARKET STREET
WILMINGTON, DE 19890
Tel: (302) 651-1000
KERN RIVER GAS TRANSMISSION Contract $2,171,314
COMPANY Holdback
ATTN KRISTIN GILLETTE
2755 EAST COTTONWOOD PARKWAY
SALT LAKE CITY, UT 84121
SOUTHERN ENVIRONMENTAL Trade Vendor $1,899,300
ATTN MICK CHAMBERS, DIRECTOR
OF CONTRACTS
6690 WEST NINE MILE ROAD
PENSACOLA, FL 32526
Tel: (850) 982-1826
INTER-CON SECURITY SYSTEMS Trade Vendor $680,930
ATTN GERARD NEVILLE
210 SOUTH DE LACEY AVE
PASADENA, CA 91105-2048
Tel: (626) 535-2229
PATTEN INDUSTRIES, INC. Trade Vendor $670,529
ATTN CLYDE KESSEL
635 WEST LAKE STREET
ELMHURST, IL 60126
Tel: (630) 279-4400
PEABODY COAL SALES Trade Vendor $591,406
ATTN MIKE SIEBERS
701 MARKET STREET
ST. LOUIS, MO 63101-1826
Tel: (314) 342-7528
UNION PACIFIC RAILROAD Trade Vendor $537,735
PO BOX 502453
ST. LOUIS, MO 63150-2453
Tel: (402) 544-7821
ROWELL CHEMICAL CORP Trade Vendor $495,138
ATTN KIP COCO, ACCT MGR
15 SALT CREEK LANE SUITE 205
HINSDALE, IL 60521
BEEMSTERBOER, INC. Trade Vendor $492,232
ATTN SIMON BEEMSTERBOER
22013 S. SCHOOLHOUSE RD
NEW LENOX, IL 60451
ALTORFER INC. Trade Vendor $482,433
ATTN TIM KIRCHNER
1 CAPITAL DRIVE
EAST PEORIA, IL 61611
Tel: (309) 264-4377
MITSUBISHI POWER SYSTEMS, INC Trade Vendor $470,000
ATTN RICHARD D. SIDKOFF, ESQ.
NEW YORK BRANCH (USA)
100 BAYVIEW CIRCLE
NEWPORT BEACH, CA 92660
Tel: (949) 856-8455
SAFWAY SERVICES, LLC Trade Vendor $334,392
ATTN SCOTT METZ, ACCT MGR
OS 490 ROUTE 83
OAKBROOK TERRACE, IL 60181
Tel: (630) 833-5840
STOCK EQUIPMENT Trade Vendor $275,406
ATTN TONY LEGAN
SOLVERA PARTICULATE CONTROLS
INC
16490 CHILLICOTHE ROAD
CHAGRIN FALLS, OH 44023-4398
Tel: (440) 543-6000
ARCH COAL SALES COMPANY, INC. Trade Vendor $269,796
ATTN ROWDY SMITH
PO BOX 96828
CHICAGO, IL 60603
Tel: (314) 994-2720
ABB, INC. Trade Vendor $257,738
ATTN JOHN JOHNSON
29801 EUCLID AVENUE
WICKLIFFE, OH 44092
Tel: (630) 767-0549
YARA NORTH AMERICA, INC Trade Vendor $256,836
ATTN DAN HEFFERNAN
100 NORTH TAMPA ST.
SUITE 3200
TAMPA, FL 33602
Tel: (519) 641-3777
BP CANADA ENERGY Trade Vendor $253,307
ATTN SANDRA ONSTOTT
3464 SOLUTIONS CENTER
Tel: (713) 323-8933
PEOPLE'S GAS Trade Vendor $243,092
CLENNON ELECTRIC Trade Vendor $231,869
LAFARGE NORTH AMERICA Trade Vendor $228,166
NORIT AMERICAS INC Trade Vendor $220,300
EL CENTRO: Hires GlassRatner as Financial Advisor
-------------------------------------------------
El Centro Motors, dba Mighty Auto Parts, asks the U.S. Bankruptcy
Court for permission to employ GlassRatner Advisory & Capital
Group, LLC as financial advisor and investment banker.
Mike Issa attests that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
GlassRatner will identify buyers for the Debtor's dealership and
advise the Debtor in connection with a sale process and the
potential outcome of a sale process, and GlassRatner will
undertake the following related tasks:
* preparing an offering memorandum for distribution to
prospective buyers;
* developing a list of prospective buyers; and
* distributing the offering memorandum and related documents to
prospective buyers.
GlassRatner seeks Court approval of its proposed book fee of
$25,000.
El Centro Motors, dba Mighty Auto Parts, operates a Ford-Lincoln
automobile dealership in El Centro, California. It filed a
Chapter 11 petition (Bankr. S.D. Calif. Case No. 12-03860) on
March 21, 2012, listing $10 million to $50 million in assets and
debts. Chief Judge Peter W. Bowie presides over the case. Krifor
Meshefajian, Esq., at Levene, Neale, Bender, Yon & Brill LLP,
serves as counsel.
The prior owner of the dealership operated the business since
1932. The business is presently owned by Dennis Nesselhauf and
Robert Valdes.
The Debtor claims that its assets, which include the property
constituting the dealership in El Centro, and new and used
vehicles, have a value of $14 million. The Debtor owes Ford Motor
Credit Company $4.3 million on a term-loan secured by a first
priority deed of trust against the El Centro property, 380,000 on
a revolving credit line, and $6 million on a flooring line of
credit used to purchase vehicle inventory. The Debtor also owes
$1.03 million to Community Valley Bank, which loan is secured by a
second priority deed of trust against the property. In addition
to $3.95 million arbitration award owed to Dealer Computer
Systems, Inc., the Debtor owes $3 million in unsecured debt.
According to a court filing, the dealership generally operated at
a profit, until it suffered the same economic setbacks suffered by
dealerships across the country. In 2007, the Debtor suffered an
$806,000 loss; in 2008, it had a $4.5 million loss, and in 2009,
it suffered a $957,000 loss.
Dealer Computer Services, which provided the dealer management
system, obtained in November 2001, an arbitration award in the
amount of $3.95 million, following a breach of contract lawsuit it
filed against the Debtor. DCS has commenced collection efforts
attempting to levy the Debtor's bank accounts and place liens on
its assets.
The Debtor filed for bankruptcy to preserve and maximize the
Debtor's estate for the benefit of creditors, to provide the
Debtor a reprieve from highly disruptive and financially
detrimental collection efforts, and to provide the Debtor an
opportunity to reorganize its financial affairs in as efficient a
manner as possible.
The Debtor disclosed at least $8,332,571 in total assets and
$19,624,057 liabilities as of the Chapter 11 filing.
ETHAN ALLEN: S&P Raises CCR to 'BB-' on Improved Profitability
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Danbury, Conn.-based Ethan Allen Interiors Inc. to 'BB-'
from 'B+'. "The issue-level rating on the company's senior
unsecured notes remains a 'BB-', while we revised the recovery
rating to '3' from '2'. While a '3' recovery rating generally
reflects our expectation of recovery in the 50%-70% range in the
event of default, our recovery analysis suggests much higher
recovery for Ethan Allen's notes. However, given the change in
corporate credit rating to 'BB-', we cap the recovery rating for
the unsecured notes at '3' because the company has the potential
to incur secured debt in a distressed situation," S&P said.
"Key credit factors in Standard & Poor's Ethan Allen ratings
include the company's good brand awareness, strong retail
distribution network, exposure to the highly competitive
residential furnishings industry, and vulnerability to reduced
discretionary spending in an economic downturn. We believe the
potential for slowing economic conditions and continued weakness
in the housing market remains a risk to further operating
performance improvement," said Standard & Poor's credit analyst
Rick Joy.
"Our rating outlook on Ethan Allen is stable. We expect Ethan
Allen to further improve operating performance and credit measures
as its business continues to recover," S&P sad.
EXOTIQUE SALON: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Exotique Salon Essentials, Inc.
Ave. Condado #700
San Juan, PR 00907
Bankruptcy Case No.: 12-09801
Chapter 11 Petition Date: December 13, 2012
Court: U.S. Bankruptcy Court
District of Puerto Rico (Old San Juan)
Debtor's Counsel: Alexis Fuentes Hernandez, Esq.
FUENTES LAW OFFICES
P.O. BOX 9022726
San Juan, PR 00902-2726
Tel: (787) 722-5216
Fax: (787) 722-5206
E-mail: alex@fuentes-law.com
Scheduled Assets: $982,263
Scheduled Liabilities: $1,363,649
A copy of the Company's list of its 20 largest unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/prb12-09801.pdf
The petition was signed by Jose Santiago Roberts, president.
FIRST PLACE: Wins Court Approval for Talmer Sale
------------------------------------------------
Jacqueline Palank at Daily Bankruptcy Review reports that First
Place Financial Corp. won bankruptcy-court approval to sell itself
to Talmer Bancorp. after no rival buyers stepped forward.
About First Place
First Place Financial Corp. is a $3.1 billion financial services
holding company, based in Warren, Ohio. The First Place
bank subsidiary isn't in bankruptcy.
First Place filed a Chapter 11 petition (Bankr. D. Del. Case No.
12-12961) in Delaware on Oct. 28, 2012, to sell its bank unit to
Talmer Bancorp, Inc., absent higher and better offers.
The Debtor declared $175 million in total assets and $65.6 million
in total liabilities as of Oct. 26, 2012.
The Debtor has tapped Patton Boggs LLP and The Bayard Firm, PA as
legal counsel. Donlin, Recano & Company, Inc. --
http://www.donlinrecano.com-- is the claims and notice agent.
FORT LAUDERDALE BOATCLUB: Dec. 19 Hearing on Schedules Extension
----------------------------------------------------------------
A hearing on the request filed by Fort Lauderdale BoatClub Ltd.
for extension of its deadline to file its schedules of assets and
liabilities is set for Dec. 19, 2012, at 1:30 p.m. at 299 E
Broward Blvd Room 308 (RBR), Fort Lauderdale.
Naples, Florida-based Fort Lauderdale BoatClub, Ltd., owns a fully
developed and operational marina facility formerly known as
Jackson Marine Center in Fort Lauderdale. The marina, which has a
12-acre prime intracoastal waterway real estate, is being leased
to G. Robert Toney & Associates Inc. doing business as National
Liquidators, for $75,000 per month (reduced from the previous rate
$160,000 per month).
The Company filed for Chapter 11 protection (Bankr. S.D. Fla. Case
No. 12-28776) on Aug. 2, 2012. Bankruptcy Judge Raymond B. Ray
presides over the cases. Barry P. Gruher, Esq., and Mariaelena
Gayo-Guitian, Esq., at Genovese Joblove & Battista, P.A., in Fort
Lauderdale, Fla., represent the Debtor in its restructuring
effort. The Debtor has scheduled assets of $13,483,209 and
liabilities of $10,340,756. The petition was signed by Edward J.
Ruff, president.
No creditors' committee has yet been appointed in this case.
FRIENDSHIP DAIRIES: Court Approves Levenfeld as Panel's Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
cases of Friendship Dairies sought and obtained permission from
the U.S. Bankruptcy Court for the Northern District of Texas to
retain Levenfeld Pearlstein as its lead counsel.
The hourly rates of Levenfeld Pearlstein's personnel are:
Partners $350 to $575
Associates $295 to $375
Paralegals $190 to $210
Levenfeld Pearlstein has agreed to cap the hourly rates of its
attorneys and legal assistants as:
Partners $450
Associates $350
Paralegals $175
The Committee is not seeking a retainer or professional fee
"carve-out" from existing cash collateral orders in connection
with the application, but reserves the right to do so by separate
application in the event it is unable to reach an agreement in
respect thereof with the Debtor and the lead secured lenders in
the case.
About Friendship Dairies
Friendship Dairies filed a Chapter 11 petition (Bankr. N.D. Tex.
Case No. 12-20405) in Amarillo, Texas, on Aug. 6, 2012. The
Debtor estimated assets and debts of $10 million to $50 million.
The Debtor operates a dairy near Hereford, Deaf Smith County,
Texas. The dairy consists of 11,000 head of cattle, fixtures and
equipment. The Debtor also farms 5,000 acres of land for
production of various crops used in feeding for the cattle.
The Debtor owes McFinney Agri-Finance, LLC, $16 million secured
by the Debtor's property, which is appraised at more than
$24 million. The debtor disclosed $44,421,851 in assets and
$45,554,951 in liabilities as of the Chapter 11 filing.
Bankruptcy Judge Robert L. Jones oversees the case. J. Bennett
White, P.C. serves as the Debtor's counsel. The petition was
signed by Patrick Van Adrichem, partner.
The U.S. Trustee appointed a six-member creditors committee in the
Debtor's case. The Committee tapped Levenfeld Pearlstein
as lead counsel, and Mullin, Hoard & Brown as local counsel.
FUSION BRANDS: Involuntary Chapter 11 Case Summary
--------------------------------------------------
Alleged Debtor: Fusion Brands, Inc.
444 Madison Avenue, 7th Floor
New York, NY 10022
Bankruptcy Case No.: 12-14898
Involuntary Chapter 11 Petition Date: December 14, 2012
Court: U.S. Bankruptcy Court
Southern District of New York (Manhattan)
Petitioners' Counsel: Christopher J. Major, Esq.
MEISTER SEELIG & FEIN LLP
140 East 45th Street, 19th Floor
New York, NY 10017
Tel: (212) 655-3579
Fax: (646) 539-3679
E-mail: cjm@msf-law.com
Creditors who signed the Chapter 11 petition:
Petitioners Nature of Claim Claim Amount
----------- --------------- ------------
Toly Group Goods Sold $92,215
c/o William Wait
BLB 006
Boulebel Industrial Estate
Zejtun ZTN 3000
Malta
Overhead, Inc. Goods Sold $37,647
c/oGuilliaume Pajolec
1154 Hi Point Street
Los Angeles, CA 90035
KMR Label L.L.C. Goods Sold $9,397
c/o Dave Poupolo
1360 W. Walnut Parkway
Carson, CA 90220
Tobu Print Group, Inc. Goods Sold $8,833
c/o Marcia Mosko
510 East Harvard Street
Glendale, CA 91205
GENESIS HEALTHCARE: S&P Retains 'B' Corporate Credit Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services revised its recovery rating on
Kennett Square, Penn.-based nursing home operator Genesis
Healthcare LLC's senior secured term loan to '2' from '3',
indicating its expectation of substantial (70%-90%) recovery for
lenders in the event of a payment default, after the company
repaid a portion of the debt with proceeds from the sale of Sun
Healthcare's hospice business. "The issue-level rating has been
upgraded to a 'B+' from 'B', in accordance with our notching
criteria. Our 'B' corporate credit rating and stable outlook
remain unchanged," S&P said.
"Our rating on Genesis reflects our assessment of the company's
business risk profile as weak and the financial risk profile as
highly leveraged, according to our criteria," said Standard &
Poor's credit analyst John Bluemke. "With the integration of Sun's
facilities, we expect revenue of approximately $4.8 billion for
2013, reflecting the full-year effect of the Sun acquisition, and
an approximate 2% increase in 2013 reimbursement rates for skilled
nursing facilities. Because of uncertainty associated with the
mandated reimbursement cut in 2013 of up to 2%, as required under
the Budget Control Act of 2011, we have not incorporated a
reimbursement reduction into our estimates for 2013. However, a 2%
cut in 2013 would not be significant enough to alter our ratings
or outlook. We expect adjusted EBITDA margins of between 14%-15%,
reflecting our adjustment for operating leases. We believe
unadjusted EBITDA margins will improve slightly in 2013 as
synergies are realized, but will remaining in the low-single-digit
area," S&P said.
GENOA HEALTHCARE: Moody's Affirms 'B2' CFR/PDR; Outlook Negative
----------------------------------------------------------------
Moody's Investors Service changed the ratings outlook of Genoa
Healthcare Group, LLC to negative from stable. Concurrently,
Moody's affirmed Genoa's B2 corporate family and probability of
default ratings as well as the Ba2 ratings on the company's first
lien credit facilities.
The change in the ratings outlook to negative from stable reflects
the company's weak liquidity profile. Specifically, headroom under
the financial maintenance covenants is significantly less than
previously projected. The narrowing of the headroom is partly due
to the tightening of required covenant levels in October 2012 when
the company approached the bank group in order to increase its
capital expenditures basket. In addition, Genoa's recent weak
operating performance is expected to contribute to the covenant
issue due to the domino effect of the trailing twelve month EBITDA
calculation.
The affirmation of the B2 corporate family rating reflects
projected improvement in overall credit metrics by the end of 2013
and in 2014. The improvement in projected metrics is primarily due
to the recalibration of Genoa's Medicaid rates and cost basis due
to the change of the company's ownership. In order to improve the
Medicaid rates, Genoa is expected to spend about $14 million in
additional capital expenditures in 2012 resulting in a $30 million
revenue benefit over the next two years.
The following rating actions were taken:
Corporate family rating, affirmed at B2;
Probability of default rating, affirmed at B2;
$10 million revolving credit facility, due August 10, 2014,
affirmed at Ba2; LGD assessment changed to LGD2, 15% from LGD2,
17%;
$49 million first lien term loan, due August 10, 2014, affirmed
at Ba2; LGD assessment changed to LGD2, 15% from LGD2, 17%.
Rating Rationale:
The B2 corporate family rating reflects Genoa's revenue
concentration by payor and geography with government programs
representing approximately 85% of revenues and revenues from
Florida representing over 95% of total revenues. Additionally, the
rating reflects Genoa's high leverage and weak free cash flow
generation. However, Moody's anticipates the company's revenue and
EBITDA to increase by a maximum of $15 million per year over the
next two years as a result of the Florida Medicaid rate
recalibration from the change of ownership. Over the next 12 to 18
months, Moody's expects the company's fully adjusted debt-to-
EBITDA (includes present value lease adjustment, Florida change of
ownership rate recalibration, and debt reduction) to decline to
approximately 6.4 times from 7.8 times at September 30, 2012. Free
cash flow-to-debt is projected to be 1.5% in 2013 versus -4% in
the trailing twelve month period ended September 30, 2012.
Additionally, adjusted interest coverage (EBITA-to-interest
expense) is expected to be around 2 times over the next twelve
months.
The rating is supported by favorable longer-term demographics,
especially in the state of Florida, that should drive volume
growth as the senior population continues to grow as a percent of
the total population. The rating is also supported by the
projected occupancy rates of above 90%.
The negative ratings outlook reflects Genoa's weak liquidity
profile.
The ratings could be downgraded if the company's liquidity
position deteriorates. In addition, the ratings could be
downgraded if adjusted free cash flow-to-debt is anticipated to be
breakeven or negative. Furthermore, if Florida implements
additional material reductions to Medicaid reimbursement to
skilled nursing facilities or if there are further Medicare
reimbursement pressures the ratings could face downward pressure.
Given Genoa's high revenue concentration in Florida and the
longer-term pressures expected on federal and state reimbursement,
Moody's does not anticipate an upgrade in the near-term. However,
if the company increases in scale and size and is able to improve
its credit metrics such that adjusted debt-to-EBITDA is below 4.5
times on a sustained basis and adjusted free cash flow-to-debt
above 6%, the ratings could be upgraded.
The principal methodology used in rating Genoa Healthcare Group,
LLC 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.
Headquartered in Tampa, FL, Genoa Healthcare Group, LLC ("Genoa"),
through its subsidiaries, provides skilled nursing and specialty
healthcare services in skilled nursing facilities throughout the
state of Florida. Revenues for the last twelve months ended
September 30, 2012 were approximately $617 million. Genoa is
privately-owned by a collaboration of investors sponsored by
Formation Capital that purchased the company in December 2011.
GREDE HOLDINGS: Moody's Affirms 'B1' CFR/PDR; Outlook Stable
------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Grede Holdings,
LLC (Grede) - Corporate Family and Probability of Default Ratings
at B1 following the company's announcement of its intention to
upsize its senior secured debt by $100 million to partially fund
an additional shareholder distribution. In a related action,
Moody's affirmed the B2 rating on the existing $196 million senior
secured term loan, and assigned a B2 rating to the new $100
million add-on term loan. The proceeds from the add-on senior
secured term loan along with cash on hand and a partial drawing
under the unrated asset based revolving credit facility will be
used to fund a distribution to the shareholders, and pay fees and
expenses related to the transaction. The rating outlook is stable.
The following ratings were affirmed :
Corporate Family Rating, B1;
Probability of Default, B1;
B2 (LGD4, 59%), for the existing $196 million senior secured
term loan
The following ratings was assigned:
B2 (LGD4, 59%), for the add-on $100 million senior secured term
loan
Rating Rationale
The affirmation of Grede's B1 Corporate Family Rating incorporates
the company's better than expected performance since the
assignment of its initial ratings in March 2012, offset by the
incremental debt being incurred to support a second special
dividend to the company's sponsors. Moody's continues to expect
Grede's interest coverage and debt leverage following the special
dividend to support the assigned rating. Pro forma for the
contemplated transaction, EBIT/interest coverage (including
Moody's standard adjustments) for the LTM period ending September
3, 2012 approximates 6x, and Debt/EBITDA approximates 2.0x. While
Moody's believes these credit metrics are strong, the ratings are
tempered by the company's exposure to the cyclical automotive and
commercial vehicle industries, relatively modest size, and current
headwinds in the company's end market. These headwinds included
the uncertain impact of unresolved U.S. government fiscal policies
on the level of consumer passenger car demand, and the softening
commercial vehicle build rates which are likely to continue into
2013.
The stable outlook incorporates Grede's relatively strong credit
metrics following the special dividend and maintenance of an
adequate liquidity profile.
Grede is expected to have an adequate liquidity profile over the
near term supported by anticipated free cash flow generation and
availability under the asset based revolving credit facility.
Moody's believes that Grede's strong operating margins and modest
capital expenditure requirements will support free cash flow
generation over the next twelve months. Cash balances following
the close of the transaction are expected to be nominal. Yet,
borrowing base availability under the $90 million asset based
revolving credit facility should provide necessary operating
flexibility over the near-term. Amended financial covenants under
the term loans are anticipated to include a maximum total leverage
test and a minimum fixed charge coverage test with adjusted step-
downs over the remaining life of the term loans. Alternate
liquidity is limited as essentially all of the company's assets
secure the credit facilities.
An improvement in Grede's rating or outlook is limited by the
company's relatively small scale, and the cyclical nature of the
casting, automotive, and commercial vehicle markets. The outlook
or rating could improve if the company is able to sustain
EBIT/Interest above 5x and Debt/EBITDA below 3.0x while
demonstrating a financial policy that is focused on debt reduction
rather than shareholder returns.
The outlook or rating could be lowered if North American
automotive production levels deteriorate or if the company
encounters problems with the integration of recent acquisitions,
resulting in substantially weaker profitability or a deterioration
in liquidity. If operations were to weaken such that debt/EBITDA
were to approach 4x and free cash flow generation was not
realized, the company's rating and/or outlook could be lowered.
Additional shareholder distributions could also lower the
company's rating or outlook.
The principal methodology used in rating Grede was the Global
Automotive Supplier Industry Methodology published in January
2009. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Grede Holdings, LLC., headquartered in Southfield, Michigan, is a
leading manufacturer of cast, machined and assembled components
for the transportation and industrial markets. The company is a
full-service supplier with design for manufacturing, engineering,
machining, and manufacturing capabilities, operating 20 facilities
throughout North America with approximately 5,100 employees. Grede
is majority owned by a private investment fund managed by Wayzata
Investment Partners LLC.
GREDE HOLDINGS: S&P Affirms 'B+' Corporate Credit Rating
--------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating and 'BB' issue-level ratings on Southfield, Mich.-
based casting supplier Grede Holdings LLC following the company's
announcement that it plans to increase its existing term loan by
$100 million. The outlook is stable. "The '1' recovery rating on
the term loan indicates our expectation that lenders would receive
very high (90% to 100%) recovery in the event of a payment
default," S&P said.
"The ratings reflect what we consider to be Grede's 'weak'
business risk profile and 'aggressive' financial risk profile. Our
business risk assessment incorporates the multiple industry risks
facing companies supplying the light-vehicle and commercial
vehicle markets, including volatile demand, high fixed costs,
competition, and pricing pressures," said Standard & Poor's
credit analyst Nishit Madlani.
"Pro forma for the dividend transaction, we estimate debt to
EBITDA, including our adjustments, to be less than 2.5x at the end
of 2012. For the rating, we expect this adjusted ratio to be at
about 4x or less. We assume Grede's financial policies will be
aggressive, given the private-equity ownership and the possibility
that Grede may pursue additional targeted acquisitions or,
eventually, another distribution of capital," S&P said.
"We assume Grede's revenue growth for 2013 and 2014 will be
determined by the pace of stabilizing auto production in North
America and some ongoing recovery in commercial-truck and
industrial demand. In the U.S. light-vehicle market, we expect
2013 and 2014 sales to increase 7% and 3% to 15.4 million and 15.8
million units. Sales in recent months have been higher than our
2012 estimate of 14.4 million, but we also believe production
could return to more historical levels of volatility. Now that
inventories seem more normalized, longer-term prospects for higher
gas prices could begin to more strongly influence consumer vehicle
mix preferences and potentially sales volumes," S&P said.
"In our opinion, Grede's EBITDA margin is fair by industry
standards, in part because of improved capacity utilization. We
believe continued success in recovery of potential raw material
price increases, which is critical to maintain margins around
current levels, is likely given Grede's recent track record. The
company should continue to benefit in 2013 from price increases it
has already implemented on the majority of its contracts.
Nevertheless, we consider Grede's margins to be sensitive to
future demand, given our view of its high operating leverage.
Grede benefits from some market diversity compared with many
automotive suppliers. The automotive segment represents 44% of its
2011 revenues, commercial trucks represents about 24%, and a
diverse group of industrial customers account for the remainder.
Geographic diversity is limited, however, as virtually all sales
are in North America and we do not expect any meaningful shift in
its end-market diversity over the next two years," S&P said.
"Our economists currently forecast U.S. GDP growing modestly in
2013 and 2014. We expect unemployment to remain high, at more than
7% in both years. Considering these economic assumptions, our
forecast for Grede's operating performance over the next year
incorporates these expectations," S&P said:
Sales will grow in the low- to mid-single digits in 2013 and
2014, roughly in line with North American production
improvement in these years in its automotive end markets but
somewhat offset by relatively lower growth prospects in
industrial end markets.
Modest improvement in gross margin in the coming years will
reflect improved utilization and some pricing power from a
sustained industry shortfall in ductile iron capacity.
EBITDA margin will be between 12% and 14%.
Free cash flow to debt will remain in the low-teens on steady
earnings expansion and low capital expenditure requirements of
about 3%-4% of sales, mostly for maintenance and improvement
of existing facilities.
"We expect a $24 million annual debt amortization requirement in
addition to an excess cash flow sweep requirement to result in
moderate improvement of credit metrics over the next two years.
Private equity firm Wayzata Investment Partners owns the majority
of the equity and acquired the former Grede and Citation assets as
a result of their respective bankruptcies. Although we believe
Grede's end-market diversity and experienced management team
demonstrated positive results in 2011 and so far in 2012, the
company's track record as a combined entity is somewhat limited
(since February 2010). However, we consider end-market conditions
favorable during this period," S&P said.
"In our view, fair margins and relatively low capital spending
needs over the next few years are likely to support Grede's
prospects for some positive free cash flow generation. We assume
capital spending could increase if capacity utilization continues
to rise. Accordingly, we assume the company will generate positive
free operating cash flow in 2013 and 2014. However, the level of
cash generation is highly sensitive to future production, which
could eventually be volatile, in our view," S&P said.
"Overall, we believe there is a reasonable cushion built in
Grede's credit metrics under our base case for the 'B+' rating.
This partly alleviates the risks of its relatively limited track
record and the cyclicality of the light- and commercial-vehicle
end markets. Grede's liquidity profile should provide sufficient
operating flexibility to manage through the potential of a more
modest general economic recovery than we currently expect," S&P
said.
"Our stable rating outlook reflects our belief that Grede can
achieve positive discretionary cash flow into 2013, given the
anticipated slow recovery for light- and heavy-vehicle production
in North America, EBITDA margins between 12% and 14%, and our
expectation of continued liquidity (cash and bank facility
availability) of about $40 million to $50 million or more," S&P
said.
"However, visibility in the auto sector is notoriously limited and
we believe that, if the economic recovery or auto sales falter,
future production could become more volatile, with higher fixed
overheads leading to some margin contraction. We could lower our
rating if prospects for negative free operating cash flow
generation emerge in 2013 or if we believed that debt to EBITDA,
including our adjustments, would trend toward 4.5x or higher. For
example, we estimate this could occur if Grede's EBITDA margin
falls by more than 250 basis points (from our base case) on a low-
double-digit revenue decline," S&P said.
"We consider an upgrade unlikely because we believe the company's
financial policies will remain aggressive under its private equity
owners--and there is a distinct possibility that the company may
pursue additional targeted acquisitions or eventually, another
distribution of capital," S&P said.
GUILDMASTER INC: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: GuildMaster, Inc., a Delaware Corporation
aka Decorize, Inc.
1938 E. Phelps
Springfield, MO 65802
Tel: (800) 269-9907
Bankruptcy Case No.: 12-62234
Chapter 11 Petition Date: December 13, 2012
Court: U.S. Bankruptcy Court
Western District of Missouri (Springfield)
Judge: Arthur B. Federman
Debtor's Counsel: Mark A. Shaiken, Esq.
STINSON MORRISON HECKER
1201 Walnut Street, Suite 2700
Kansas City, MO 64106
Tel: (816) 842-8600
Fax: (816) 691-3495
E-mail: mshaiken@stinson.com
- and ?
Nicholas J. Zluticky
STINSON MORRISON HECKER
1201 Walnut, Suite 2900
Kansas City, MO 64106
Tel: (816) 691-3278
Fax: (816) 412-9388
E-mail: nzluticky@stinson.com
Scheduled Assets: $3,426,296
Scheduled Liabilities: $3,556,713
A copy of the Company's list of its 20 largest unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/mowb12-62234.pdf
The petition was signed by Stephen Crowder, president/CEO.
HARRISBURG, PA: New Pennsylvania Bill Aims to Scrutinize Debt
-------------------------------------------------------------
Ama Sarfo at Bankruptcy Law360 reports that a Pennsylvania state
senator has announced a legislative package seeking to investigate
the city of Harrisburg's financial problems in the wake of a
bungled incinerator project that saddled the city with more than
$300 million in debt and pushed it into state receivership.
The package, announced Wednesday by state Sen. Mike Folmer, R-
Lebanon County, follows two Pennsylvania senate hearings on the
debts. If approved, it will allow for the investigation of
financial transactions by Harrisburg and other municipal entities
to determine if criminal proceedings are appropriate, Bankruptcy
Law360.
About Harrisburg, Pennsylvania
The city of Harrisburg, in Pennsylvania, is coping with debt
related to a failed revamp of an incinerator. The city is
$65 million in default on $242 million owing on bonds sold to
finance an incinerator that converts trash to energy.
The Harrisburg city council voted 4-3 on Oct. 11, 2011, to
authorize the filing of a Chapter 9 municipal bankruptcy (Bankr.
M.D. Pa. Case No. 11-06938). The city claims to be insolvent,
unable to pay its debt and in imminent danger of having
tax revenue seized by holders of defaulted bonds.
Judge Mary D. France presided over the Chapter 9 case. Mark D.
Schwartz, Esq. and David A. Gradwohl, Esq., served as Harrisburg's
counsel. The petition estimated $100 million to $500 million in
assets and debts. Susan Wilson, the city's chairperson on Budget
and Finance, signed the petition.
Harrisburg said in court papers it is in imminent jeopardy through
six pending legal actions by creditors with respect to a number of
outstanding bond issues relating to the Harrisburg Materials,
Energy, Recycling and Recovery Facilities, which processes waste
into steam and electrical energy. The owner and operator of the
incinerator is The Harrisburg Authority, which is unable to pay
the bond issues. The city is the primary guarantor under each
bond issue. The lawsuits were filed by Dauphin County, where
Harrisburg is located, Joseph and Jacalyn Lahr, TD Bank N.A., and
Covanta Harrisburg Inc.
The Commonwealth of Pennsylvania, the County of Dauphin, and
Harrisburg city mayor Linda D. Thompson and other creditors and
interested parties objected to the Chapter 9 petition. The state
later adopted a new law allowing the governor to appoint a
receiver.
Kenneth W. Lee, Esq., Christopher E. Fisher, Esq., Beverly Weiss
Manne, Esq., and Michael A. Shiner, Esq., at Tucker Arensberg,
P.C., represented Mayor Thompson in the Chapter 9 case. Counsel to
the Commonwealth of Pennsylvania was Neal D. Colton, Esq., Jeffrey
G. Weil, Esq., Eric L. Scherling, Esq., at Cozen O'Connor.
In November 2011, the Bankruptcy Judge dismissed the Chapter 9
case because (1) the City Council did not have the authority under
the Optional Third Class City Charter Law and the Third Class City
Code to commence a bankruptcy case on behalf of Harrisburg and (2)
the City was not specifically authorized under state law to be a
debtor under Chapter 9 as required by 11 U.S.C. Sec. 109(c)(2).
Dismissal of the Chapter 9 petition was upheld in a U.S. District
Court.
That same month, the state governor appointed David Unkovic as
receiver for Harrisburg. Mr. Unkovic is represented by the
Municipal Recovery & Restructuring group of McKenna Long &
Aldridge LLP, led by Keith Mason, Esq., co-chair of the group.
Mr. Unkovic resigned as receiver March 30, 2012.
HOLLYWOOD COMMUNITY: Case Summary & 11 Unsecured Creditors
----------------------------------------------------------
Debtor: Hollywood Community Synagogue, Inc.
2221 North 46 Avenue
Hollywood, FL 33021
Bankruptcy Case No.: 12-39875
Chapter 11 Petition Date: December 14, 2012
Court: United States Bankruptcy Court
Southern District of Florida (Fort Lauderdale)
Judge: Raymond B. Ray
Debtor's Counsel: Richard R Robles, Esq.
LAW OFFICES OF RICHARD R. ROBLES, P.A.
905 Brickell Bay Dr. #228
Miami, FL 33131
Tel: (305) 755-9200
E-mail: rrobles@roblespa.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 11 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/flsb12-39875.pdf
The petition was signed by Arthur Eckstein, president and
director.
HOSTESS BRANDS: Wal-Mart, Kroger, Bimbo Among Bidders
-----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that, according to a person familiar with the matter,
retailer Wal-Mart Stores Inc., supermarket operator Kroger Co. and
Mexican baker Grupo Bimbo SAB are among the two dozen bidders for
Hostess Brands Inc. Some bids are for all the assets, the person
said.
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.
JETBLUE AIRWAYS: S&P Revises Outlook on 'B-' CCR to Positive
------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings, including
its 'B-' corporate credit rating, on New York City-based airline
JetBlue Airways Corp. (JetBlue). "At the same time, we revised our
outlook on the rating to positive from stable. We also raised our
issue rating on the company's senior convertible debt to 'CCC+'
from 'CCC' and revised our recovery rating on that debt to '5'
from '6', indicating our expectation of modest (10%-30%) recovery
in a default scenario," S&P said.
"The outlook revision on JetBlue is based on the company's
improved financial profile over the past year because of stable
operating performance and debt reduction," said Standard & Poor's
credit analyst Betsy Snyder. "For the 12 months ended Sept. 30,
2012, EBITDA interest coverage rose to 3x from 2.4x a year
earlier, funds from operations (FFO) to debt rose to 15% from 11%,
and debt to capital declined to 71% from 74%. We anticipate
further improvement in these credit metrics, assuming fuel prices
remain relatively stable, the economy grows modestly, and the
company continues to reduce debt."
"The corporate credit rating on JetBlue reflects its participation
in the high-risk U.S. airline industry and a substantial debt
burden. Competitive operating costs are a positive credit factor,
in Standard & Poor's assessment. Under our criteria, we
characterize JetBlue's business profile as 'weak,' its financial
profile as 'highly leveraged,' and its liquidity as 'adequate,'"
S&P said.
"JetBlue is a midsize U.S. low-cost, low-fare airline that started
operating in 2000 from New York's JFK International Airport, which
remains its principal hub. JetBlue's profitability has been more
consistent than most other airlines since 2010. Still, the
airline's financial profile remains highly leveraged. Assuming
fuel prices remain relatively consistent, the economy grows
modestly, and the company continues to reduce debt, we expect
JetBlue's credit metrics to improve somewhat in 2013. We expect
the company to finance its capital spending for new aircraft
primarily through cash and cash generated from operations.
Potential threats to this scenario include materially higher fuel
prices and a significant slowdown in the already sluggish U.S.
economic recovery. The company has substantial debt maturities and
capital spending for new aircraft in 2013 and 2014. In 2013, debt
maturities are $397 million and committed capital spending for new
aircraft is $450 million; in 2014, debt maturities are $576
million and committed capital spending for new aircraft is $520
million. We anticipate the company will be able to refinance a
significant portion of upcoming debt maturities and finance new
aircraft deliveries from cash, cash generated from operations, and
from various lenders," S&P said.
JetBlue serves destinations in the U.S., Puerto Rico, the
Caribbean, and Latin America. Its primary hub is at JFK, with
smaller focus cities of Boston; Fort Lauderdale, Fla.; Long Beach,
Calif.; Orlando, Fla.; and San Juan, Puerto Rico. Although it is
less diversified than larger airlines because of the substantial
percentage of its operations at JFK, it does benefit from its
operations at Boston, where it is the largest airline, as well as
its many interline relationships with other airlines, including
Hawaiian Airlines, Air Lingus, Lufthansa, and American Airlines.
JetBlue operates a relatively young, fuel-efficient fleet
consisting of 123 Airbus 320s (a midsize narrowbody plane) and 52
Embraer 190s (a large regional jet) as of Sept. 30, 2012.
JetBlue's operating costs remain among the lowest in the U.S.
airline industry, mostly because of the high productivity of its
assets and labor. The airline's employees are not unionized (in
contrast with those at Southwest Airlines Co., the largest low
cost airline) but are well paid by industry standards,
particularly following wage cuts at the legacy carriers.
JetBlue has taken on substantial debt and leases to finance its
fleet growth. The company began its operations relatively well-
capitalized (for a start-up), added to retained earnings in its
first several years of operations, and undertook several offerings
of common shares. Debt to capital was 71% as of Sept. 30, 2012--
high but less than those of most U.S. airlines. JetBlue opened
a new terminal at JFK Airport in October 2008, which it leases
from the Port Authority of New York and New Jersey, but it is
carried on JetBlue's balance sheet as "assets constructed for
others," totaling $561 million as of Sept. 30, 2012. The related
liability is shown as "construction obligation" ($517 million),
which we include as debt. JetBlue has no defined-benefit pension
plans or retiree medical liabilities.
"The outlook is positive. We expect JetBlue's credit metrics to
improve somewhat as a result of increased cash flow generation and
debt reduction, with EBITDA interest coverage increasing to the
low-3x area from 3x for the 12 months ended Sept. 30, 2012; FFO to
debt increasing to the high-teens percent area from 15%; and debt
to capital declining to below 70% from 71%. We could raise ratings
if the company's credit metrics continue to improve as we expect
and it is successful in refinancing substantial upcoming debt
maturities in 2013 and 2014. We could revise the outlook to stable
if reduced earnings and cash flow cause FFO to debt to remain in
the low-teens percent area or if liquidity falls to less than 15%
of annual revenues on a sustained basis," S&P said.
JOURNAL REGISTER: PBGC Balks at 'Rushed' Efforts to Auction Itself
------------------------------------------------------------------
Rachel Feintzeig at Dow Jones' DBR Small Cap reports that Journal
Register Co.'s sale plans have elicited protests from parties
including the Pension Benefit Guaranty Corp., which said it is
taking aim at the company's "rushed" efforts to auction off its
assets.
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.
LCI HOLDING: Seeks Court Approval on Several Hirings
----------------------------------------------------
BankruptcyData.com reports that LifeCare Holdings filed with U.S.
Bankruptcy Court motions to retain:
-- Kurtzman Carson Consultants (Contact: Albert Kass) as
claims/noticing agent and to provide administrative
services;
-- Skadden, Arps, Slate, Meagher & Flom (Contact: Kenneth S.
Ziman) as bankruptcy counsel at hourly rates ranging from
$195 to $1,150;
-- Huron Management Services (Contact: Stuart Walker ) as
interim chief financial officer and certain additional
personnel and to designate Stuart Walker as chief financial
officer at hourly rates ranging from $250 to $750 and a
monthly fee of $65,000 for the interim C.F.O.;
-- Rothschild (Contact: Neil A. Augustine) as financial advisor
and investment banker for a monthly advisory fee of $150,000
and a completion fee of $3,425,000;
-- KPMG (Contact: Steven C. Gullat) as service provider for
audit, tax compliance and tax consulting matters at hourly
rates ranging from $260 to $840; and
-- Young Conaway Stargatt & Taylor (Contact: David R. Hurst) as
conflicts counsel at hourly rates ranging from $150 to $570.
About LifeCare
LCI Holding Inc. and its affiliates, doing business as LifeCare
Hospitals, operate eight "hospital within hospital" facilities and
19 freestanding facilities in 10 states. The hospitals have about
1,400 beds at facilities in Louisiana, Texas, Pennsylvania, Ohio
and Nevada. LifeCare is controlled by Carlyle Group, which holds
93.4 percent of the stock following a $570 million acquisition in
August 2005.
LifeCare Holdings and its affiliates, including LifeCare Holdings
Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No.
12-13319) on Dec. 11, 2012, with plans to sell assets to secured
lenders.
Ken Ziman, Esq., and Felicia Perlman, Esq., at Skadden, Arps,
Slate Meagher & Flom LLP, serve as counsel to the Debtors.
Rothschild Inc. is the financial advisor.
The steering committee of lenders is represented by attorneys at
Akin Gump Strauss Hauer & Feld LLP and Blank Rome LLP. The agent
under the prepetition and postpetition secured credit facility is
represented by Simpson Thacher & Barlett LLP.
The Debtors disclosed assets of $422 million and liabilities
totaling $575.9 million as of Sept. 30, 2012. As of the
bankruptcy filing, total long-term obligations were $482.2 million
consisting of, among other things, institutional loans and
unsecured subordinated loans. A total of $353.4 million is owing
under the prepetition secured credit facility. A total of
$128.4 million is owing on senior subordinated notes.
LEHMAN BROTHERS: Trustee Takes $360 Million From Citigroup
----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the trustee liquidating the Lehman Brothers Holdings
Inc. brokerage subsidiary received approval for a settlement with
Citigroup Inc. generating $360 million in cash while ending
disputes and lawsuits going back to the week the bankruptcies
began in September 2008.
According to the report, the Lehman parent also received court
approval Dec. 13 for a change in rules governing mandatory
mediation on claims by or against Lehman. The change was designed
to prevent parties to derivatives contracts and special-purpose
vehicles from wiggling out of the requirement to mediate in good
faith.
The report recounts that Citigroup affiliates provided various
banking and settlement services for the Lehman brokerage
subsidiary. A few days before bankruptcy, the bank seized $1
billion to cover alleged debts owed by the Lehman broker. Lehman
trustee James Giddens sued the bank in March 2011 to recover the
$1 billion setoff and another $300 million in cash and securities.
New York-based Citigroup claimed the setoff was valid and asserted
another $440 million in setoff rights.
The settlement, the report discloses, gives the trustee $360
million cash while the bank drops the right to attempt recovering
$75 million that was provisionally paid to Mr. Giddens early in
the liquidation. In return, the bank has an approved secured
claim for $1.04 billion to use in offsetting amounts the bank
otherwise would owe Mr. Giddens. In addition, the bank was given
an approved unsecured claim for about $255 million. The change in
mediation eliminates the 120-day limit, after which third parties
were free to drop out and force Lehman to sue in court. As
consequence of the change, mediation now can end only if both
parties consent or the mediator agrees. Lehman claimed that the
modification was required to ensure third parties mediate in good
faith.
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)
LOWER BUCKS: BoNY Seeks to Overturn Ruling Over $8MM Settlement
---------------------------------------------------------------
Matt Fair at Bankruptcy Law360 reports that a Bank of New York
Mellon Trust Co. attorney asked a Pennsylvania federal judge
Wednesday to overturn a bankruptcy court's ruling rejecting an
$8.1 million settlement with bondholders for a suburban
Philadelphia hospital, arguing that the creditors were
sufficiently informed of the details of the deal.
Bankruptcy Law360 relates that a bankruptcy judge rejected the
$8.1 million payment, part of a reorganization plan for the
nonprofit Lower Bucks Hospital, on grounds that bondholders had
signed off on the agreement without being sufficiently informed of
a stipulation.
About Lower Bucks Hospital
Lower Bucks Hospital is a non-profit hospital based in Bristol,
Pennsylvania. The Hospital is licensed to operate 183 beds.
Together with affiliates Advanced Primary Care Physicians and
Lower Bucks Health Enterprises, Inc., Lower Bucks owns a 36-acre
campus with several medical facilities. The Hospital's emergency
room serves 30,000 patients annually. For the fiscal year ending
June 30, 2009, Lower Bucks had $114 million in consolidated
revenues.
The Hospital filed for Chapter 11 bankruptcy protection (Bankr.
E.D. Pa. Case No. 10-10239) on Jan. 13, 2010. The Hospital's
affiliates -- Lower Bucks Health Enterprises, Inc, and Advanced
Primary Care Physicians -- also filed Chapter 11 petitions.
Jeffrey C. Hampton, Esq., and Adam H. Isenberg, at Saul Ewing LLP,
in Philadelphia, assist the Hospital in its restructuring effort.
Donlin, Recano & Company, Inc., is the Hospital's claims and
notice agent. The Debtors tapped Zelenkofske Axelrod LLC for tax
preparation services. The Hospital estimated assets and
liabilities at $50 million to $100 million.
Regina Stango Kelbon, Esq., at Blank Rome LLP, in Philadelphia,
represents the Official Committee of Unsecured Creditors as
counsel.
The Bankruptcy Court confirmed the hospital operator's Chapter 11
plan in December 2011. It emerged from bankruptcy in January
2012. The Plan is centered around a settlement of the litigation
between LBH and The Bank of New York Mellon Trust Company, N.A.,
as bond trustee, regarding several issues, including whether the
Bond Trustee, on behalf of the holders of bonds, holds a secured
claim against LBH, as opposed to a claim that is secured. General
unsecured creditors were to realize 18.5% recovery; bondholders
were to get 35% recovery.
MARCO POLO: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: Marco Polo Capital Markets, LLC
75 Broad Street
New York, NY 10004
Bankruptcy Case No.: 12-14870
Chapter 11 Petition Date: December 13, 2012
Court: U.S. Bankruptcy Court
Southern District of New York (Manhattan)
Judge: Shelley C. Chapman
Debtor's Counsel: Jonathan S. Pasternak, Esq.
RATTET PASTERNAK, LLP
550 Mamaroneck Avenue, Suite 510
Harrison, NY 10528
Tel: (914) 381-7400
Fax: (914) 381-7406
E-mail: jsp@rattetlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Hugh Webb, chief operating officer.
MELKE LAND: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: Melke Land Co., LLC
230 Clifton Ave.
Kingston, NY 12401
Bankruptcy Case No.: 12-38080
Chapter 11 Petition Date: December 14, 2012
Court: United States Bankruptcy Court
Southern District of New York (Poughkeepsie)
Judge: Cecelia G. Morris
Debtor's Counsel: Thomas Genova, Esq.
GENOVA & MALIN, ATTORNEYS
Hampton Business Center
1136 Route 9
Wappingers Falls, NY 12590-4332
Tel: (845) 298-1600
Fax: (845) 298-1265
E-mail: genmallaw@optonline.net
Scheduled Assets: $1,755,200
Scheduled Liabilities: $1,374,103
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by William N. Melkesetian, managing
member.
METRO FUEL: Creditors Seek Probe of Former CFO
----------------------------------------------
Ciaran McEvoy at Bankruptcy Law360 reports that the unsecured
creditors committee for Metro Fuel Oil Corp. on Thursday asked a
New York bankruptcy judge to allow it to examine the fuel supply
company's former chief financial officer in connection with
alleged financial irregularities that occurred on his watch.
Bankruptcy Law360 relates that the committee told U.S. Bankruptcy
Judge Elizabeth S. Stong that it was necessary to interrogate
Thomas J. Torre, Metro Fuel Oil's chief financial officer until
his termination last summer, about the company's money problems,
court papers said.
About Metro Fuel
Metro Fuel Oil Corp., is a family-owned energy company, founded in
1942, that supplies and delivers bioheat, biodiesel, heating oil,
central air conditioning units, ultra low sulfur diesel fuel,
natural gas and gasoline throughout the New York City metropolitan
area and Long Island. Owned by the Pullo family, Metro has 55
delivery trucks and a 10 million-gallon fuel terminal in Brooklyn.
Financial problems resulted in part from cost overruns in building
an almost-complete biodiesel plant with capacity of producing 110
million gallons a year.
Based in Brooklyn, New York, Metro Fuel Oil Corp., fka Newtown
Realty Associates, Inc., and several of its affiliates filed for
Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Lead Case No.
12-46913). Judge Elizabeth S. Stong presides over the case.
Nicole Greenblatt, Esq., at Kirkland & Ellis LLP, represents the
Debtor. The Debtor selected Epiq Bankruptcy Solutions LLC as
notice and claims agent.
The petition showed assets of $65.1 million and debt totaling
$79.3 million. Liabilities include $58.8 million in secured debt,
with $48.3 million owing to banks and $10.5 million on secured
industrial development bonds.
MF GLOBAL: Parent Bonds Trading for Twice Chapter 11 Recovery
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the $1 billion in MF Global Holdings Ltd. unsecured
bonds may be trading for twice what holders will recover in
bankruptcy, according to a report yesterday from CRT Capital
Group LLC. MF Global Holdings owns the similarly bankrupt
commodity broker MF Global Inc.
Fortified by a report in late November from the U.K. brokerage
subsidiary and a separate report this month by the trustee for the
U.S. brokerage, CRT's Kevin Starke concluded that that his "mid-
case" shows a recovery of 34% for holders of $1.02 billion in four
issues of unsecured bonds of the holding company.
The report notes that the $325 million in 6.25% unsecured bonds
maturing in 2016 traded Dec. 13 for 65 cents on the dollar,
according to Trace, the bond-price reporting system of the
Financial Industry Regulatory Authority.
"I want someone to tell me where I'm wrong because I don't see how
they recover 65 cents," Mr. Starke said in an interview. Mr.
Starke is a managing director with CRT.
According to the report, Mr. Starke qualified his evaluation by
saying that unsecured bondholders could recover "par" in his "high
case." Still, Mr. Starke said "too many things have to go right
to hit the high end of the range."
The size of recoveries by creditors of the MF Global holding
company depend in large part on the amounts collected by the
brokerage subsidiaries in the U.S. and the U.K. Mr. Starke said
that "value in the two broker dealer entities gets chewed up on
the way up to the holding company because much of the value held
by the parent is in the form of subordinated debt."
Mr. Starke projects that creditors on the $1.18 billion in
revolving credits are "likely" to recover 65%. Mr. Starke also
said U.S. customers are "likely" to have full recovery. So-called
30.7 claims from trading in futures or options on foreign
exchanges are being quoted from 91.5 to 92.5 cents on the dollar,
Starke said. For so-called 4d customers with commodity futures
and options accounts, claims are being quoted between 97.5% and
98.5%, according to Mr. Starke.
About MF Global
New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/--
is one of the world's leading brokers of commodities and listed
derivatives. MF Global provides access to more than 70 exchanges
around the world. The firm is also one of 22 primary dealers
authorized to trade U.S. government securities with the Federal
Reserve Bank of New York. MF Global's roots go back nearly 230
years to a sugar brokerage on the banks of the Thames River in
London.
MF Global Holdings Ltd. and MF Global Finance USA Inc. filed
voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059
and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive
Brokers Group collapsed. As of Sept. 30, 2011, MF Global had
$41,046,594,000 in total assets and $39,683,915,000 in total
liabilities. It is easily the largest bankruptcy filing so far
this year.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of MF
Global Finance USA Inc.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at Hughes
Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.
U.S. regulators are investigating about $633 million missing from
MF Global customer accounts, a person briefed on the matter said
Nov. 3, according to Bloomberg News.
Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by MF Global Holdings and other insolvency and
bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
MIRANT CORP: Successor Cries Perjury in $305-Mil. Oil Lease Suit
----------------------------------------------------------------
Jess Davis at Bankruptcy Law360 reports that a successor to Mirant
Corp. on Tuesday accused Castex Energy Inc. and a group of its
shareholders of "unrepentant misconduct" and submitting a perjured
affidavit in the company's Texas federal suit alleging it was
cheated in a $305 million oil and gas lease sale.
MC Asset Recovery LLC asked the court to impose "the most severe
of sanctions" against Castex for its alleged dishonesty in
discovery, arguing that Castex has refused to comply with a court
order to turn over "case-critical" financial statements, according
to Bankruptcy Law360.
About Mirant
Mirant Corporation -- http://www.mirant.com/-- produces and sells
electricity in the United States. Mirant owns or leases
approximately 10,097 megawatts of electric generating capacity.
The company operates an asset management and energy marketing
organization from its headquarters in Atlanta, Georgia.
Mirant Corporation filed for Chapter 11 protection on July 14,
2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of a
confirmed Second Amended Plan on Jan. 3, 2006. Thomas E. Lauria,
Esq., at White & Case LLP, represented the Debtor in its
restructuring. When the Debtor filed for protection from its
creditors, it listed $20,574,000,000 in assets and $11,401,000,000
in debts. The Debtors emerged from bankruptcy on Jan. 3, 2006.
On March 7, 2007, the Court entered a final decree closing 46
Mirant cases.
Mirant NY-Gen LLC, Mirant Bowline LLC, Mirant Lovett LLC, Mirant
New York Inc., and Hudson Valley Gas Corporation, were not
included in the parent's bankruptcy exit plan.
In February 2007, Mirant NY-Gen filed its Chapter 11 Plan of
Reorganization and Disclosure Statement. The Court confirmed an
amended version of the Plan on May 7, 2007. Mirant NY-Gen emerged
from Chapter 11 on May 7, 2007.
On July 13, 2007, Mirant Lovett filed its Chapter 11 Plan. The
Court confirmed Mirant Lovett's Plan on Sept. 19, 2007. Mirant
Lovett emerged from bankruptcy on Oct. 2, 2007.
MIXED NUTS: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Mixed Nuts, LLC
dba The Outside Inn
9941 W. Charleston Boulevard
Las Vegas, NV 89117
Bankruptcy Case No.: 12-23611
Chapter 11 Petition Date: December 13, 2012
Court: U.S. Bankruptcy Court
District of Nevada (Las Vegas)
Judge: Bruce A. Markell
Debtor's Counsel: Seth D. Ballstaedt, Esq.
THE BALLSTAEDT LAW FIRM
9480 S. Eastern Avenue, Suite 213
Las Vegas, NV 89123
Tel: (702) 715-0000
Fax: (702) 666-8215
E-mail: seth@ballstaedtlaw.com
sethballs@gmail.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 20 largest unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/nvb12-23611.pdf
The petition was signed by William R. Phillips, managing member.
MORREALE HOTELS: Case Summary & 13 Unsecured Creditors
------------------------------------------------------
Debtor: Morreale Hotels, LLC
111 Broadway
Suite 200
Denver, CO 80203
Bankruptcy Case No.: 12-35230
Chapter 11 Petition Date: December 14, 2012
Court: United States Bankruptcy Court
District of Colorado (Denver)
Judge: A. Bruce Campbell
Debtor's Counsel: Lee M. Kutner, Esq.
KUTNER MILLER BRINEN, P.C.
303 E. 17th Ave., Suite 500
Denver, CO 80203
Tel: (303) 832-2400
Fax: (303) 832-1510
E-mail: lmk@kutnerlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 13 unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/cob12-35230.pdf
The petition was signed by Jesse Morreale, manager.
MTS GOLF: Court OKs Amended Employment of OZ as Architects
----------------------------------------------------------
MTS Land LLC and MTS Golf LLC have sought and obtained amended
order authorizing the Debtors to employ OZ Architects, Inc., as
architect.
The firm will redevelop the Debtors' property.
The firm's Don Ziebell attests that OZ Architects is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code.
Mr. Ziebell's hourly rate is $225.
MTS Land LLC and MTS Golf LLC own and operate the now dormant
Mountain Shadows Golf Club. They filed separate Chapter 11
petitions (Bankr. D. Ariz. Case Nos. 12-16257 and 12-16257) in
Phoenix on July 19, 2012. Mountain Shadows Golf Club --
http://www.mountainshadowsgolfclub.com/-- is an 18 hole, par 56
course located at Paradise Valley. Nestled in the foothills of
Camelback Mountain, the 3,081-yard Executive course claims to be
one of the most scenic golf courses in Arizona. MTS Land and MTS
Golf are affiliates of Irvine, Calif.-based Crown Realty &
Development Inc. MTS Land and MTS Golf each estimated assets and
debts of $10 million to $50 million.
Judge Charles G. Case II oversees the Debtors' cases. Lawyers at
Gordon Silver serve as the Debtors' counsel. The petition was
signed by Robert A. Flaxman, administrative agent.
Lender U.S. Bank is represented in the case by Snell & Wilmer
L.L.P.
MTS GOLF: Court OKs FAMCO Advisory as Feasibility Expert
--------------------------------------------------------
MTS Land LLC and MTS Golf LLC sought and obtained approval from
the U.S. Bankruptcy Court to employ Kenneth B. Funsten of FamCo
Advisory Services to provide witness services to the Debtors in
connection with the plan confirmation proceedings. Mr. Funsten
will serve as an interest rate and feasibility expert in
conjunction with the confirmation of the Debtors' plan of
reorganization.
Mr. Funsten attests that his firm is a "disinterested person" as
the term is defined in Section 101(14) of the Bankruptcy Code.
The firm's rates are:
* Mr. Funsten's analytical work and travel: $400
* Mr. Funsten's deposition testimony, trial preparation &
testimony: $600
* Associates: $250/hr
Mr. Funsten has requested for a $25,000 deposit.
MTS Land LLC and MTS Golf LLC own and operate the now dormant
Mountain Shadows Golf Club. They filed separate Chapter 11
petitions (Bankr. D. Ariz. Case Nos. 12-16257 and 12-16257) in
Phoenix on July 19, 2012. Mountain Shadows Golf Club --
http://www.mountainshadowsgolfclub.com/-- is an 18 hole, par 56
course located at Paradise Valley. Nestled in the foothills of
Camelback Mountain, the 3,081-yard Executive course claims to be
one of the most scenic golf courses in Arizona. MTS Land and MTS
Golf are affiliates of Irvine, Calif.-based Crown Realty &
Development Inc. MTS Land and MTS Golf each estimated assets and
debts of $10 million to $50 million.
Judge Charles G. Case II oversees the Debtors' cases. Lawyers at
Gordon Silver serve as the Debtors' counsel. The petition was
signed by Robert A. Flaxman, administrative agent.
Lender U.S. Bank is represented in the case by Snell & Wilmer
L.L.P.
NEWPAGE CORP: Confirms Plan With Stock for First Lien
-----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that NewPage Corp. won approval of a Chapter 11
reorganization plan when the bankruptcy judge in Delaware said at
a confirmation hearing Dec. 13 that he will sign an order
approving the plan.
According to the report, first-lien creditors are slated for 56.6%
recovery by receiving all the new stock in exchange for debt.
Second-lien noteholders and some unsecured creditors are sharing
$30 million in cash and the first $50 million collected by a
litigation trust. The disclosure statement advises holders of
$1.06 billion in second-lien debt that their recovery should equal
5.9%. Depending on which election some creditors make, the
recovery by holders of $29.3 million in unsecured claims is 5.3%,
according to the disclosure statement. Trade suppliers with $21.4
million in claims who agree to provide credit in the future will
receive 15% on their claims over two years. Holders of
$207.9 million in senior subordinated debt are projected for a
0.2% recovery. After the initial $50 million from the trust,
additional distributions will be shared by the first- and second-
lien noteholders and some unsecured creditors.
NewPage, the report discloses, will fund the litigation trust with
$40 million in cash and specified lawsuit recoveries. NewPage is
to loan the trust $5 million to pay administrative expenses. The
official creditors' committee supported the plan.
The $1.77 billion in 11.375% first-lien notes maturing in 2014
traded on Dec. 12 for 46 cents on the dollar, according to Trace,
the bond-price reporting system of the Financial Industry
Regulatory Authority. The $806 million in 10% second-lien notes
traded on Dec. 12 for 4.751 cents on the dollar, according to
Trace.
Fourt Amended Plan
BankruptcyData.com reports that NewPage Corporation filed with
U.S. Bankruptcy Court a Modified Fourth Amended Joint Chapter 11
Plan. The Plan explains, "This Joint Chapter 11 Plan consists of
twelve separate chapter 11 Plans - one Plan for each of the
Debtors that will emerge as a reorganized entity. This Plan does
not substantively consolidate any Estates. Two Debtors - NewPage
Group Inc. and NewPage Holding Corporation - are not proposing a
chapter 11 plan and intend to dissolve as described in Section
4.5.1 of the Plan." The Debtors also filed an Amended Supplement
to the Modified Fourth Amended Joint Chapter 11 Plan.
About NewPage Corp
Headquartered in Miamisburg, Ohio, NewPage Corporation was the
leading producer of printing and specialty papers in North
America, based on production capacity, with $3.6 billion in net
sales for the year ended Dec. 31, 2010. NewPage owns paper mills
in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and
Nova Scotia, Canada.
NewPage Group, NewPage Holding, NewPage, and certain of their U.S.
subsidiaries commenced Chapter 11 voluntary cases (Bankr. D. Del.
Case Nos. 11-12804 through 11-12817) on Sept. 7, 2011. Its
subsidiary, Consolidated Water Power Company, is not a part of the
Chapter 11 proceedings.
Separately, on Sept. 6, 2011, its Canadian subsidiary, NewPage
Port Hawkesbury Corp., brought a motion before the Supreme Court
of Nova Scotia to commence proceedings to seek creditor protection
under the Companies' Creditors Arrangement Act of Canada. NPPH is
under the jurisdiction of the Canadian court and the court-
appointed Monitor, Ernst & Young in the CCAA Proceedings.
Initial orders were issued by the Supreme Court of Nova Scotia on
Sept. 9, 2011 commencing the CCAA Proceedings and approving a
settlement and transition agreement transferring certain current
assets to NewPage against a settlement payment of $25 million and
in exchange for being relieved of all liability associated with
NPPH. On Sept. 16, 2011, production ceased at NPPH.
NewPage originally engaged Dewey & LeBoeuf LLP as general
bankruptcy counsel. In May 2012, Dewey dissolved and commenced
its own Chapter 11 case. Dewey's restructuring group led by
Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M.
Abelson, Esq., moved to Proskauer Rose LLP. In June, NewPage
sought to hire Proskauer as replacement counsel.
NewPage is also represented by Laura Davis Jones, Esq., at
Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, as
co-counsel. Lazard Freres & Co. LLC is the investment banker, and
FTI Consulting Inc. is the financial advisor. Kurtzman Carson
Consultants LLC is the claims and notice agent.
In its balance sheet, NewPage disclosed $3.4 billion in assets and
$4.2 billion in total liabilities as of June 30, 2011.
The Official Committee of Unsecured Creditors selected Paul
Hastings LLP as its bankruptcy counsel and Young Conaway Stargatt
& Taylor, LLP to act as its Delaware and conflicts counsel.
An affiliate, Newpage Wisconsin System Inc., disclosed
$509,180,203 in liabilities in its schedules.
NRG ENERGY: Moody's Reviews 'Ba3' CFR for Possible Downgrade
------------------------------------------------------------
Moody's Investors Service placed all of the ratings of NRG Energy
Inc. (NRG, Ba3 Corporate Family Rating) and the Ba1 Senior Secured
rating of GenOn Energy MidAtlantic, LLC (GENMA) under review for
possible downgrade. Concurrent with these rating actions, Moody's
affirmed the ratings of GenOn Energy Inc. (GEN, B2 Corporate
Family Rating) and the debt instrument ratings of GenOn Americas
Generation, LLC (GENAG, B3 Senior Unsecured) and GenOn REMA, LLC
(GREMA, B1 Senior Secured), in anticipation of the expected
closing in the next several days of the merger of NRG and GEN in
an all-stock transaction. Additionally, Moody's has revised the
outlook of GEN, GENAG, and GREMA to developing and has affirmed
the Speculative Grade Liquidity Ratings of NRG and GEN at SGL-2.
RATINGS RATIONALE
"Our decision to maintain separate Corporate Family Ratings for
NRG and GEN at this juncture is based on our assessment that NRG's
intention, at least initially, is to conduct certain key aspects
of the business between the entities on an arm's length basis, in
order to reinforce GEN's status as an excluded project finance
subsidiary", stated Bill Hunter, VP, the lead analyst for NRG and
GEN. These key aspects include contractual liquidity agreements
under which NRG will assume the role of senior secured lender to
GEN as well as corporate service contracts that permit NRG to
garner most of the benefits of the anticipated cost synergies
other than interest reduction from expected debt prepayments. As
excluded project finance subsidiaries, GEN and its subsidiaries
will neither be guarantors of NRG debt nor benefit from a
guarantee by NRG. In addition, the GEN family debt will be
excluded from some NRG covenant tests (as would any disposition of
GEN's assets), and there will be no cross-default between the GEN
family debt and NRG's debt.
"As the integration of GEN into NRG develops during 2013, we may
obtain more clarity regarding the value of GEN as part of the NRG
family that could lead to assigning a single merged Corporate
Family Rating despite some of these initial arm's length
arrangements," continued Hunter. "The developing outlook for GEN,
GENAG and GREMA acknowledges that their standalone outlooks prior
to the merger announcement were negative based on the continuing
challenges facing the merchant power sector, but also acknowledges
that a merged Corporate Family Rating would likely be higher than
B2." Although GEN will prepay $684 million of debt in conjunction
with the merger, its cash balance will be reduced by the amount of
debt prepayment as well as severance and merger transaction costs,
and GEN's senior unsecured creditors will be subordinate to the
new inter-company secured revolving credit, expected to be in the
range of $500 million. NRG's collateral as senior secured lender
is expected to include mortgages on a portfolio of gas and coal
fired assets as well as upstream guarantees from certain GEN
subsidiaries.
The placement of NRG's ratings under review for possible downgrade
is based on recent operating results that have been negatively
impacted by weak power prices and the continued weakness in the
price of natural gas, combined with substantial debt-financed
capital expenditures. NRG benefits from a diversified fleet of
wholesale power generation assets underpinned by hedges, contracts
or sales from its retail business. However, in light of continued
low natural gas prices, a weak economic recovery that has dampened
demand for power, and Moody's expectation that fuel switching from
coal to natural gas will continue to negatively impact volumes and
margins, Moody's currently anticipates that the metrics that NRG
will generate through 2014 will be similar to its most recent
results, which are more aligned to a B rated power generator.
Moody's review will focus on whether capacity constraints in NRG's
core Texas market, in combination with construction completion of
several greenfield renewable and natural gas power projects that
will operate under long term power sales agreements, will provide
sufficient certainty of an improvement in cash flows for us to
regard the current trough in metrics as temporary and finite, or
whether it represents a lower baseline for the company over the
medium term. While Moody's acknowledges that the approximately $5
billion of debt (including lease debt) acquired in the GEN merger
will initially reside in excluded project finance subsidiaries,
Moody's will include GEN's debt in Moody's analysis of NRG, since
Moody's views GEN as a core business. If Moody's were to downgrade
NRG's Corporate Family Rating, it would most likely cause a
downgrade of all NRG's debt instrument ratings, including a
downgrade of its Senior Secured debt to below investment grade.
The placement of GENMA's Ba1 Senior Secured rating under review
for possible downgrade is based on recent operating results that
were below Moody's expectations through the third quarter of 2012,
indicating that coal to gas switching has had a continued negative
impact despite the company's hedge book, a mid-year rebound in
natural gas prices off their earlier lows and a reasonably warm
summer. While Moody's acknowledges the locational value of these
assets (situated near Washington, DC), based on recent
transactions for scrubbed coal plants in eastern metropolitan
markets, a four notch uplift above GEN's B2 Corporate Family
Rating may no longer be warranted. In addition, while these assets
were clearly the crown jewels of the GEN family, they may have
less relative importance within the much larger NRG family.
NRG's speculative grade liquidity rating of SGL-2 reflects Moody's
expectation that the company will maintain a good liquidity
profile over the next 4-quarter period as a result of internal
cash flow generation combined with continued access to credit
availability, sufficient headroom under the company's covenants
and the ability to raise cash from asset sales, if necessary.
Total liquidity at September 30, 2012, was approximately $2.7
billion, including credit facility availability of approximately
$1.133 billion and unrestricted cash on hand of around $1.610
billion. NRG's liquidity is aided by the existence of standalone
financing arrangements to fund the capital investments for the
construction of solar generation and natural gas power plants.
While Moody's anticipates that the decline in energy margins will
continue to reduce the headroom under the company's financial
covenants, Moody's believes that the company will remain in
compliance on a ongoing basis. Moody's also believes that NRG owns
non-core assets that could be monetized for additional liquidity,
if necessary. For example, earlier this year NRG completed the
sale of its 41% interest in Schkopau for approximately $174
million.
GEN's B2 Corporate Family Rating is based on a diversified
portfolio of power plants, a meaningful percentage of hedged and
contracted revenues, an apparently successful integration of its
2010 merger with Reliant Resources, and the combination of
diminished but still relatively good liquidity after the merger
with NRG, balanced against high leverage (albeit somewhat reduced
by the planned prepayment of approximately $684 million of term
loans), lower volumes, margin compression, and substantial
announced retirements and deactivations in its primarily coal
fired fleet due to increasingly stringent environmental
regulations. GEN's liquidity was of considerable importance to
prior senior management, and the maintenance of good stand-alone
liquidity by NRG will be extremely important to GEN's ratings in
light of its status as an excluded project finance subsidiary.
GEN's SGL-2 liquidity rating takes into account good internal
sources (Moody's estimates about $800 million of cash after merger
close based on $1.8 billion of cash as of 9/30/12, balanced
against expectations for negative Free Cash Flow in 2012 and
potentially in 2013), good external sources (although GEN's new
revolver will be bilateral with the parent, it will be indirectly
backed by NRG's $2.3 billion syndicated revolver, and if the
facility is in the expected range of $500 million, Moody's
estimates about $270 million available based on GEN's $228 million
of LC usage at 9/30/12), strong covenant compliance (GEN had ample
room under its existing sole financial covenant, a senior secured
leverage ratio, and Moody's assumes that new covenants, if any,
will be no more restrictive), and limited alternate liquidity
(sale of individual power plants would not harm the core business,
but the company's assets will remain largely encumbered). While
GEN is likely to meet its obligations over the next 12 months from
internal sources, the company may rely on external sources of
committed financing, including the Marsh Landing project loan
facility. GEN's access to a substantial level of liquidity will
continue to be an important driver for its ratings during the
current period of low natural gas prices. In light of expected
near-term negative free cash flow, Moody's anticipates that the
level of unrestricted cash will decline over time. Consequently,
the degree of cash burn will be an important future determinant
for the ratings, especially if GEN continues for an extended
period as an excluded project finance subsidiary of NRG.
In light of NRG's review for possible downgrade, its substantial
capital investment program, the continued weak market for
unregulated power in most regions, and its merger with the
financially weaker GEN, limited prospects exist for NRG's ratings
to be upgraded in the near-term. However, if Moody's can obtain
clarity that NRG's consolidated metrics, on a post-merger
consolidated basis, will return to levels consistent with a low Ba
rating in the relatively near term, NRG's outlook could stabilize.
Additional factors that would be important to stabilizing the
outlook include management's ability to keep the construction of
its numerous solar project investments on time and on budget, a
successful integration of GEN that achieves the projected cost
synergies of approximately $300 million annually, modest levels of
improvement in unregulated power margins, a material abatement of
future capital spending, and incremental debt retirement.
NRG's ratings could be downgraded if, in its review, Moody's were
to conclude that the current trough in metrics will persist, such
that, on a sustained basis, Interest Coverage were below 2x, CFO
Pre-WC/Debt continued to be below 13%, or free cash flow to debt
continued to be below 0%. In addition, should material problems
surface with the company's growth strategies, if weaker than
expected market conditions were to continue across NRG's
generation fleet, if the cost synergies of the GEN merger were not
realized or if the company materially altered its capital
allocation program in a way that is detrimental to creditors,
ratings could be downgraded.
Headquartered in Princeton, New Jersey, NRG owns and operates a
portfolio of power-generating facilities, primarily in Texas and
the Northeast, South Central and Western regions of the US. NRG
also has ownership interests in a generating facility in
Australia. As of 31 December 2011, NRG owned approximately 25,135
megawatts (MW) of electric generation, and had 1,450 MW under
construction. NRG's retail businesses Reliant Energy, Green
Mountain Energy, and Energy Plus Holdings combined serve more than
2 million residential, business, commercial and industrial
customers in Texas and, increasingly, in select markets in the
northeast US. On 22 July 2012, NRG announced a stock for stock
merger with GEN. GenOn Energy Inc., based in Houston, Texas, is a
US merchant power holding company that was formed in December 2010
from the merger of Mirant Corporation and Reliant Resources, Inc.
The combined entity, with an enterprise value estimated at $18
billion on the merger announcement date, will own approximately
47,000 MW of capacity.
Ratings Placer Under Review for Downgrade:
Issuer: NRG Energy, Inc
Corporate Family Rating: Ba3
Probability of Default Rating: Ba3
Senior Secured Bank Facility: Baa3, LGD2 - 15%
Sussex County, Delaware Recovery Zone Facility Bonds Sr Secured
Bonds: Baa3, LGD2 - 15%
Chautauqua (Cnty of) NY, Ind. Dev. Agency; Sr Sec Revenue Bonds
due 2042: Baa3, LGD2 - 15%
Delaware Economic Dev. Auth: Senior Secured Revenue Bonds due
2045: Baa3, LGD2 - 15%
Fort Bend County Industrial Development Corporation Industrial
Revenue Bonds Series 2012 and 2012B: Baa3, LGD2 - 15%
Senior Unsecured: B1, LGD4 - 66%
Speculative-Grade Liquidity Rating: SGL-2
Outlook: Revised to Under Review for Downgrade from Negative
Issuer: GenOn Mid-Atlantic, LLC
Senior Secured: Ba1, LGD 2 -- 15%
Outlook: Revised to Under Review for Downgrade from Stable
Ratings Affirmed with Revised Outlook and Revised LGD Assessment:
Issuer: Genon Energy, Inc.
Corporate Family Rating: B2
Probability of Default Rating: B2
Senior Unsecured: B3, LGD 5 -- 74% from LGD 5 -- 77%
Speculative-Grade Liquidity Rating: SGL-2
Outlook: Revised to Developing from Positive
Issuer: GenOn Americas Generation, LLC
Senior Unsecured: B3, LGD 5 -- 74% from LGD 5 - 77%
Outlook: Revised to Developing from Stable
Ratings Affirmed with Revised Outlook:
Issuer: GenOn REMA, LLC
Senior Secured: B1, LGD 3 -- 32%
Outlook: Revised to Developing from Stable
Ratings withdrawn:
Issuer: Genon Energy, Inc.
Senior Secured: B1, LGD 3 -- 32%
Senior Secured Bank Facility: B1, LGD 3 -- 32%
The principal methodology used in this rating was Unregulated
Utilities and Power Companies published in August 2009 and
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
NUSTAR ENERGY: Agrees to Sell Antonio Refinery
----------------------------------------------
NuStar Energy L.P. NS has entered into a purchase agreement to
sell its San Antonio refinery and related assets, including a
terminal in Elmendorf, TX and a pipeline connecting the terminal
and refinery, to Calumet Specialty Products Partners, L.P., for
$100 million, plus closing date inventory estimated to be $15
million. NuStar purchased the refinery and terminal out of
bankruptcy in April 2011 for $41 million, and the company has
invested approximately $54 million since then on improvements to
the refinery. NuStar announced its plans to sell the refinery
last month as part of its strategic redirection away from the
earnings volatility associated with the margin-based refining
business in order to further grow its more stable, fee-based
pipeline and storage operations through internal growth projects
and acquisitions, especially in the Eagle Ford Shale region and
other U.S. shale plays, where NuStar already has extensive
pipeline and storage operations. NuStar will use proceeds from
the transaction, which is expected to have an effective date of
Jan. 1, 2013 and close on January 2, to fund the growth of those
fee-based pipeline and storage operations.
"As we stated when we announced our intent to sell the refinery,
it was an excellent opportunistic purchase for us, even though
fuels refining wasn't part of our strategic plan," said NuStar
President and CEO Curt Anastasio. "The refinery has an
outstanding group of employees and we enjoyed working with them to
make a tremendous amount of improvements to the refinery that made
it a safer and more environmentally sound facility that is also
much more reliable and profitable.
"This transaction will give the refinery employees the opportunity
to be a part of a refining company with multiple refineries that
has the depth of refining resources and expertise to provide the
support the refinery needs to succeed over the long-term,"
Anastasio added. "This is especially important since we completed
a joint venture for our asphalt refining assets with Lindsay
Goldberg that essentially makes the San Antonio refinery a 'stand-
alone' facility, which is a very difficult position for a refinery
because it limits resources and available capital. Calumet is
committed to safety excellence, as well as continued improvements
at the refinery and in the surrounding community. And one of the
key reasons we chose Calumet's bid is because they are well-known
for their commitment to their employees. Our San Antonio refinery
employees received significant increases in their compensation and
benefits when they joined NuStar, and Calumet is also known for
their strong compensation and benefits programs."
Located on the South Side of San Antonio, the 14,500-barrel-per-
day refinery produces and sells various products, including jet
fuels, ultra-low sulfur diesel (ULSD), naphtha, reformates,
liquefied petroleum gas (LPG), specialty solvents and other highly
specialized fuels, to commercial and retail customers and the U.S.
military. The Elmendorf terminal, which is approximately 12 miles
away from the refinery, stores the crude oil that is processed at
the refinery.
To significantly improve efficiency, NuStar built and recently put
into service a 12-mile pipeline between the terminal and the
refinery that now moves the crude to the refinery. The effort
effectively removed approximately 80 crude delivery trucks per day
from San Antonio roads. Not only is this pipeline reducing
traffic and cutting transportation costs, it also is expected to
reduce refinery unplanned outages and increase refinery runs
because the crude oil delivered by pipeline has a more consistent
quality. To further enhance the safety of refinery employees, the
company moved all non-operating personnel out of the refinery and
into an 18,000-square-foot office complex at Brooks City Base in
San Antonio that includes a state-of-the-art laboratory. In
addition to safety and reliability improvements, NuStar also has
conducted significant environmental cleanup as well as
beautification efforts that benefited the surrounding community.
About NuStar Energy
NuStar Energy L.P., -- http://www.nustarenergy.com/--is a
publicly traded master limited partnership based in San Antonio,
is one of the largest independent liquids terminal and pipeline
operators in the nation.
ORANGE COUNTY: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Orange County Environmental, LLC
P.O. Box 909
Sorrento, FL 32776
Bankruptcy Case No.: 12-16730
Chapter 11 Petition Date: December 14, 2012
Court: United States Bankruptcy Court
Middle District of Florida (Orlando)
Judge: Karen S. Jennemann
Debtor's Counsel: Elizabeth A. Green, Esq.
Jimmy D. Parrish, Esq.
BAKER & HOSTETLER LLP
200 S Orange Ave.
Suntrust Center, Suite 2300
Orlando, FL 32801
Tel: (407) 649-4000
Fax: (407) 841-0168
E-mail: egreen@bakerlaw.com
jparrish@bakerlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $10,000,001 to $50,000,000
A copy of the Company's list of its 20 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/flmb12-16730.pdf
The petition was signed by Ross Johnston, authorized
representative of managing member, BBLF, LLC.
ORLEANS HOMEBUILDERS: S&P Cuts Corp. Credit Rating to 'CCC+'
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Orleans
Homebuilders Inc. (Orleans) to 'CCC+' from 'B-'. This includes the
corporate credit rating and the issue-level rating on the
company's secured term loan. The outlook is unchanged at negative.
"We also maintain a '3' recovery rating on the company's secured
term loan, indicating our expectation for a meaningful (50%-70%)
recovery in the event of a payment default," S&P said.
"We lowered our ratings on Orleans to reflect the company's slower
than anticipated turnaround following its exit from Chapter 11 in
February 2011," said credit analyst Matthew Lynam. "We also
believe Orleans will be a limited participant in a potential
homebuilding recovery given its smaller platform in weaker markets
and capital constraints that would prevent rapid near-term
growth."
"The negative outlook reflects our belief that Orleans currently
has inadequate liquidity to grow its platform and generate enough
EBITDA to support its debt burden without access to a revolver. We
would lower our ratings by one or more notches if liquidity
weakened further, perhaps through the permanent loss of its
revolver or further cash burn. We would consider revising the
outlook back to stable if the company demonstrated adequate
liquidity and an ability to operate the business closer to
profitability," S&P said.
PARAGON SHIPPING: Obtains Waivers From Commerzbank
--------------------------------------------------
Paragon Shipping Inc. has entered into a binding agreement with
Commerzbank AG, subject to certain conditions and final
documentation, to amend terms in its loan agreement dated Aug. 12,
2011.
More specifically, the Company has obtained waivers and
Commerzbank has agreed to the relaxation of several financial and
security coverage ratio covenants, and to the deferral of a
portion of its scheduled quarterly installments. This agreement
is subject to the satisfaction of a number of conditions similar
in nature to our agreements with other lenders of the Company
announced by the Company on Dec. 12, 2012, and includes the
execution of documentation.
Commenting on the agreement, Michael Bodouroglou, the Company's
Chairman and Chief Executive Officer stated, "We are happy to
announce an agreement with our largest lender, Commerzbank, as we
work towards a common goal of ensuring the Company's continued
stability. We believe we will enter into agreements with our
remaining two lenders in due course."
Paragon Shipping -- http://www.paragonship.com/-- is a Marshall
Islands-based international shipping company with executive
offices in Athens, Greece, specializing in the transportation of
drybulk cargoes. The Company's current fleet consists of twelve
drybulk vessels with a total carrying capacity of 779,270 dwt. In
addition, the Company's current newbuilding program consists of
two Handysize drybulk carriers that are scheduled to be delivered
in 2013 and two 4,800 TEU containerships that are scheduled to be
delivered in 2014.
PATMONT MOTOR: Case Summary & 19 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Patmont Motor Werks, Inc.
2220 Meridian Blvd.
Minden, NV 89423
Bankruptcy Case No.: 12-52799
Chapter 11 Petition Date: December 14, 2012
Court: United States Bankruptcy Court
District of Nevada (Reno)
Judge: Bruce T. Beesley
Debtor's Counsel: Chris D. Nichols, Esq.
PETRONI & NICHOLS, LTD
417 W Plumb Ln
Reno, NV 89509
Tel: (775) 786-7600
E-mail: noticesbh&p@renolaw.biz
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $10,000,001 to $50,000,000
A copy of the Company's list of its 19 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/nvb12-52799.pdf
The petition was signed by Gabriel Patmont, director.
PAUL SCHIMMEL: No Substantial Contribution Claim in Chapter 7
-------------------------------------------------------------
Bankruptcy Judge Alan Jaroslovsky denied the request of an
unsecured creditor for allowance of a substantial contribution
claim in a Chapter 7 case, holding that such claim is only allowed
in Chapter 11 and Chapter 9 cases.
McCall River Ranch Company is an unsecured creditor of Paul
Schimmel. McCall filed a proof of claim and requested that Linda
Green, the Chapter 7 Trustee, take action to deny Mr. Schimmel's
discharge based on his alleged misrepresenting the value of a
scheduled corporation. Ms. Green investigated the allegations and
concluded that there was insufficient evidence of misconduct to
object. At that time, there were only a few days remaining until
Mr. Schimmel's discharge would be granted, so McCall instructed
its counsel to file an adversary proceeding objecting to
discharge. McCall named Ms. Green as a defendant in the action,
hoping that she would participate. Ms. Green demanded that she be
dismissed from the proceeding and McCall accordingly dismissed
her. At no time did McCall seek court approval or authorization
of employment, nor was Ms. Green amenable to such employment.
McCall tried the case and obtained a judgment denying Mr.
Schimmel's's discharge. The court made certain findings in its
memorandum that caused Ms. Green to investigate Mr. Schimmel's
affairs further. Ms. Green now has an application pending for
approval of a settlement whereby Mr. Schimmel will pay $85,000
into the bankruptcy estate.
McCall argues that the $85,000 was discovered because of the
adversary proceeding that it filed and tried. It has moved for
allowance of its attorneys' fees and costs of $64,652.94 as an
administrative expense under Sec. 503 or Sec. 105 of the
Bankruptcy Code, to the extent that there are sufficient estate
assets, or under Sec. 327 for retroactive employment as estate
counsel. Ms. Green opposes the motion.
According to Judge Jaroslovsky, Section 503(b)(4) of the
Bankruptcy Code permits the court to allow an administrative
expense to a creditor on account of its attorneys' fees, but only
in five specific circumstances. The only such circumstances
remotely applicable are where the creditor recovers, after court
approval, any property concealed by the debtor or, in a Chapter 9
or 11 case, the creditor incurred the fees while making a
substantial contribution to the case. Neither is present in the
Schimmel case.
In this case, Judge Jaroslovsky said, McCall did not actually
recover anything for the estate; its action led Ms. Green to a
claim which was compromised. More importantly, McCall never
obtained court approval. Therefore, this provision (Sec.
503(b)(3)(B)) does not permit what McCall seeks. The court cannot
use Sec. 105(a), as McCall argues, to re-write Sec. 503(b)(3)(B).
Judge Jaroslovsky also held that, by bringing its action to deny
Mr. Schimmel's discharge, McCall made a substantial contribution
to the case. However, recovery of fees under this section (Sec.
503(b)(3)(D)) is only permitted in Chapter 9 and Chapter 11 cases.
This case is a Chapter 7. The wording of the statute makes this
provision inapplicable.
McCall argues that the list of allowable administrative expenses
in Sec. 503(b) is not exclusive, and has cited a few cases in
which courts have gone outside the four corners of the statute to
allow expenses not enumerated in the section.
Judge Jaroslovsky held that Section 503(b)(4) only permits a
creditor to recover its attorneys' fees from the estate under
certain, specified conditions. McCall does not meet those
conditions.
"The maxim that inclusio unius, exclusio aterius applies here; any
flexibility the court may have to deal with unanticipated
situations does not apply when Congress has set forth the law
applicable to an anticipated situation. It is an abuse of
discretion to allow an administrative expense when the express
provisions of Sec. 503(b) are not met," Judge Jaroslovsky said.
A copy of the Court's Dec. 13, 2012 Memorandum is available at
http://is.gd/dHqwN3from Leagle.com.
Paul Schimmel filed for Chapter 7 bankruptcy (Bankr. N.D. Calif.
Case No. 11-10272) in 2011.
PAXFIRE INC: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Paxfire, Inc.
43490 Yukon Drive
Suite 102
Ashburn, VA 20147
Bankruptcy Case No.: 12-17341
Chapter 11 Petition Date: December 14, 2012
Court: United States Bankruptcy Court
Eastern District of Virginia (Alexandria)
Judge: Robert G. Mayer
Debtor's Counsel: Kevin M. O'Donnell, Esq.
HENRY & O'DONNELL, P.C.
300 N. Washington Street
Suite 204
Alexandria, VA 22314
Tel: (703) 548-2100
Fax: (703) 548-2105
E-mail: kmo@henrylaw.com
Scheduled Assets: $2,348,987
Scheduled Liabilities: $3,739,817
A copy of the Company's list of its 20 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/vaeb12-17341.pdf
The petition was signed by Mark Lewyn, president.
PERRY HOLDINGS: Case Summary & 9 Unsecured Creditors
----------------------------------------------------
Debtor: Perry Holdings, LLC
P.O. Box 958
Bluefield, WV 24701
Bankruptcy Case No.: 12-10165
Chapter 11 Petition Date: December 13, 2012
Court: U.S. Bankruptcy Court
Southern District of West Virginia (Bluefield)
Judge: Ronald G. Pearson
Debtor's Counsel: Joseph W. Caldwell, Esq.
CALDWELL & RIFFEE
P.O. Box 4427
Charleston, WV 25364-4427
Tel: (304) 925-2100
Fax: (304) 925-2193
E-mail: joecaldwell@frontier.com
- and ?
Marshall C. Spradling, Esq.
3818 MacCorkle Avenue SE
Charleston, WV 25304
Tel: (304) 343-2544
Fax: (304) 343-2546
E-mail: marshall@spradlinglaw.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $0 to $50,000
A copy of the Company's list of its nine largest unsecured
creditors filed with the petition is available for free at:
http://bankrupt.com/misc/wvsb12-10165.pdf
The petition was signed by Ward B. Perry, member.
PT BERLIAN: Involuntary Chapter 11 Case Summary
-----------------------------------------------
Alleged Debtor: PT Berlian Laju Tanker, Tbk
Jl. Abdul Muis No. 40
Jakarta 10160, Indonesia
Case Number: 12-14874
Involuntary Chapter 11 Petition Date: December 13, 2012
Court: Southern District of New York (Manhattan)
Petitioner's Counsel: Daniel Shamah, Esq.
Gary Svirsky, Esq.
O'MELVENY & MYERS LLP
7 Times Square
New York, NY 10036
Tel: (212) 326-2000
Fax: (212) 326-2061
E-mail: dshamah@omm.com
gsvirsky@omm.com
Creditors that signed the involuntary Chapter 11 petition:
Petitioner Nature of Claim Claim Amount
---------- --------------- ------------
Gramercy Distressed Monies Owed $21,700,000
Opportunity Fund II LP
20 Dayton Avenue
Greenwich, CT 06830
Gramercy Distressed Monies Owed $73,406,000
Opportunity Fund Ltd.
20 Dayton Avenue
Greenwich, CT 06830
Gramercy Emerging Monies Owed $30,370,000
Markets Fund
20 Dayton Avenue
Greenwich, CT
QUAD/GRAPHICS INC: Moody's Says Special Dividend Credit Negative
----------------------------------------------------------------
Moody's Investors Service said Quad/Graphics, Inc.'s (Quad; Ba2,
Stable) pending $94 million special dividend is credit-negative
but ratings-neutral.
The principal methodology used in rating Quad/Graphics was 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.
Headquartered in Sussex, Wisconsin, Quad/Graphics, Inc. is a
publicly traded provider of print and related multichannel
solutions for consumer magazines, special interest publications,
catalogs, retail inserts/circulars, direct mail, books,
directories, and commercial and specialty products, including in-
store signage. Annual sales are approximately $4 billion, almost
90% of which comes from United States-based operations. In turn,
more than 60% of U.S. sales come from magazines, catalogues and
retail inserts.
QUAD/GRAPHICS INC: S&P Cuts Corporate Credit Rating to 'BB'
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Sussex,
Wis.-based printing company Quad/Graphics Inc., including the
corporate credit rating, to 'BB' from 'BB+'. This follows Quad's
plan to pay a $94 million special dividend (about 16% of past 12
months' EBITDA) and 30% of discretionary cash flow to shareholders
in December 2012. The U.S. Bankruptcy Court approved Quad's
proposed purchase to acquire the assets of printer Vertis Holdings
Inc. for $258 million ($170 million net of normalized working
capital, or 3x estimated 2012 EBITDA). Quad expects to close the
purchase in January. "We have removed our ratings from
CreditWatch, where we placed them with negative implications on
Oct. 12, 2012 when Quad announced the proposed acquisition of
Vertis," S&P said.
"The downgrade reflects our view that Quad's business risk profile
will be weakened with the acquisition of Vertis and that leverage
will increase as a result of the acquisition, the resulting
integration costs, and the payment of the special dividend," said
Standard & Poor's credit analyst Naveen Sarma. "We believe these
actions leave Quad with limited financial flexibility if trends
worsen and the integration of Vertis does not go smoothly. We
believe the Vertis acquisition will weaken Quad's business risk
profile by increasing its exposure to a poorly performing company
in an already declining sector. Vertis will require significant
management attention to be integrated efficiently. Because of the
integration and Vertis' lower EBITDA margin, we expect Quad's
EBITDA margin to be hurt over the next two years. We estimate its
margin will decline to about 12% from about 14% pro forma for the
acquisition (not including synergies or restructuring costs to
achieve these synergies). We expect the margin to be lower over
the first two years after the acquisition's close, as
restructuring costs exceed synergies. At the same time, we believe
Quad will continue to face negative structural trends and economic
pressures that the proposed acquisition and ongoing operational
restructuring will only partly offset."
RAPID-TORC INC: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Rapid-Torc, Inc.
2406 East Pasadena Fwy
Pasadena, TX 77506
Bankruptcy Case No.: 12-39217
Chapter 11 Petition Date: December 14, 2012
Court: United States Bankruptcy Court
Southern District of Texas (Houston)
Judge: Karen K. Brown
Debtor's Counsel: Barbara Mincey Rogers, Esq.
ROGERS & ANDERSON, PLLC
1415 North Loop West, Suite 1020
Houston, TX 77008
Tel: (713) 868-4411
Fax: (713) 868-4413
E-mail: brogers@ralaw.net
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by Rogert Dischert, president.
REVSTONE INDUSTRIES: Sec. 341 Creditors' Meeting Set for Jan. 9
---------------------------------------------------------------
The U.S. Trustee for Region 3 in Delaware will convene a meeting
of creditors under 11 U.S.C. Sec. 341(a) in the Chapter 11 case of
Revstone Industries LLC on Jan. 9, 2013, at 9:00 a.m. at J. Caleb
Boggs Federal Building, 844 King St., Room 5209 in Wilmington.
Lexington, Kentucky-based Revstone Industries LLC, a maker of
truck parts, filed for Chapter 11 bankruptcy (Bankr. D. Del. Case
No. 12-13262) on Dec. 3, 2012. Judge Brendan Linehan Shannon
oversees the case. Lawyers at Richards, Layton & Finger, P.A.,
serve as the Debtor's counsel. In its petition, Revstone
estimated under $50 million in assets and debts.
RIVERBED TECHNOLOGY: S&P Keeps 'BB' Corporate Credit Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services said the upsizing of San
Francisco, Calf.-based application and network performance
management solutions provider Riverbed Technology Inc.'s term loan
due 2019, to $575 million from $500 million, does not affect the
'BBB-' issue-level rating or '1' recovery rating on the loan. The
company intends to use the additional debt proceeds, instead of
cash from the balance sheet, to fund the purchase price of Opnet
Technologies Inc. "As a result of the upsizing, we estimate that
the company's adjusted leverage will only increase modestly, to
2.6x from 2.3x for fiscal 2012," S&P said.
"Our 'BB' corporate credit rating and stable outlook on the
company remain unchanged. The 'BB' rating reflects reflects
Riverbed's 'fair' business risk profile and 'significant'
financial risk profile, incorporating relatively narrow target
markets, a modest revenue base, and a limited track record at its
current operating scale and profitability. Riverbed's growing
addressable markets, leading market share in the wide area network
(WAN) optimization market, and solid cash flow generation partly
offset these factors," S&P said.
RATINGS LIST
Riverbed Technology Inc.
Corporate Credit Rating BB/Stable/--
$575M term loan due 2019 BBB-
Recovery Rating 1
RIVERBOAT CORP: Moody's Assigns 'B3' CFR/PDR; Outlook Stable
------------------------------------------------------------
Moody's Investors Service assigned a B3 Corporate Family Rating
and Caa1 Probability of Default Rating to Riverboat Corporation of
Mississippi, Inc. (Riverboat), the owner/operator of the Golden
Nugget Biloxi Hotel and Casino. Moody's also assigned a B3 (LGD3,
33%) rating to the company's proposed $95 million guaranteed
senior secured term loan due 2016. Riverboat's $5 million senior
secured first out revolving credit facility expiring in June 2016
was rated Ba3 (LGD1, .1%). The rating outlook is stable.
Proceeds from the proposed senior secured term loan along with $25
million of contributed cash common equity from Tilman Fertitta and
affiliates, were used to acquire The Riverboat Corporation of
Mississippi from Isle of Capri Casinos Inc. for approximately $42
million, and to provide approximately $70 million to fund a
renovation of the property. The property will be renamed The
Golden Nugget Biloxi Hotel and Casino.
Ratings are subject to review of final documentation. This is the
first time Moody's assigned a rating to Riverboat Corporation of
Mississippi, Inc.
New ratings assigned:
Corporate Family Rating (CFR) rated B3
Probability of Default Rating (PDR) rated Caa1
$5 million guaranteed first out senior secured revolver due June
2016 rated Ba3 (LGD 1, .1%)
$95 million guaranteed senior secured term loan due December 2016
rated B3 (LGD 3, 33%)
RATINGS RATIONALE
Riverboat's B3 CFR reflects its small size and single asset
profile. The source of repayment for the company's debt will be
one casino with annual revenues that were only about $67 million
for full year ending April 2012. The ratings also consider Moody's
view that, despite the benefits of the renovation and
repositioning of the property, the company could find it difficult
to achieve targeted business volumes in a gaming market that
Moody's believes is vulnerable to further weakness in gaming
revenue as consumer spending remains soft and competition will
remain high with several other casinos that are within close
proximity.
The ratings are supported by Moody's view that the renovation and
repositioning of the Riverboat will attract additional traffic to
the property. Once the renovation is fully complete in March 2014,
the casino will have a more appealing interior and exterior and
broader selection of non-gaming amenities in terms of restaurants
and shopping venues. The ratings also reflect Riverboats adequate
liquidity that includes a $10 million interest reserve and $10
million restaurant contribution agreement with Landry's Inc. The
ratings also benefit from a completion guarantee from Fertitta
Entertainment, Inc.
The ratings do not incorporate any credit support from Mr.
Fertitta's other rated entities -- Landry's Holdings, Inc and its
subsidiaries, including the Golden Nugget Resort and Casino in Las
Vegas, Nevada -- or anticipate that the Riverboat will provide any
credit support to these entities. Moody's also expects that there
will be sufficient restrictions on the Riverboat's ability to
distribute funds outside the company.
The stable rating outlook reflects Riverboats adequate liquidity
and the fully-funded nature of the company's planned renovation
along with the cash interest reserve that will pay interest on the
term loan through the renovation period and completion guarantee
in the event of cost overruns. Also considered is the fact that
the company will have time to improve its earnings before the
financial covenants take effect in September 2014.
A higher rating over the near term is unlikely given Golden
Nugget's ramp-up challenges. Evidence that the company will be
able to achieve and sustain positive operating performance and
improve credit metrics with EBIT coverage of interest exceeding
1.75 times and debt to EBITDA of under 5.0 times could result in
an upgrade. A downgrade could occur if the renovation is
materially delayed or costs significantly more than currently
planned, or if there are indications that Riverboat's EBITDA will
not be sufficient to cover its interest and maintenance capital
expenditures.
The principal methodology used in rating Golden Nugget Biloxi was
the Global Gaming Industry Methodology published in December 2009.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Golden Nugget Biloxi, Inc. owns The Riverboat Corporation of
Mississippi, Inc. which in turn owns and operates the Golden
Nugget Biloxi Hotel and Casino in Biloxi, Mississippi.
RYAN INT'L: Exclusivity Period to File Plan Extended to Jan. 11
---------------------------------------------------------------
Ryan International Airlines Inc. sought and obtained an extension
until Jan. 11, 2013, of the deadline to file its Chapter 11 plan
and disclosure statement.
Ryan International Airlines, Inc., filed for Chapter 11 protection
(Bankr. N.D. Ill. Case No. 12-80802) in its hometown in Rockford,
Illinois, on March 6, 2012. Ryan International, which filed for
bankruptcy along with 10 affiliates, estimated assets and debts of
up to $100 million.
Ryan and its affiliates -- http://www.flyryan.com/-- provide
commercial air charter services, to a diverse mix of customers
including U.S., Canadian and British military entities, the
Department of Homeland Security, the U.S. Marwill Service,
leisure travelers, professional and college sports teams and an ad
hoc charter services. Ryan has 460 employees, with the cockpit
crew, flight attendants and dispatchers are represented by labor
unions.
Judge Manuel Barbosa presides over the case. Matthew M. Hevrin,
Esq., and Thomas J. Lester, Esq., at Hinshaw & Culbertson LLP,
serve as the Debtors' counsel. Silverman Consulting serves as
financial advisor. The petition was signed by Mark A. Robertson,
executive vice president.
On March 19, 2012, the U.S. Trustee for Region 11 appointed the
official committee of unsecured creditors of the Debtors. Brian J
Lohan, Esq., Lydia R. H. Slaby, Esq., Matthew A. Clemente, Esq.,
Matthew G. Martinez, Esq., at Sidney Austin LLP, in Chicago; and
Michael G. Burke, Esq., at Sidney Austin LLP, in New York City,
represent the Creditors' Committee as counsel.
INTRUST Bank, the prepetition lender owed $53.2 million, is
represented by Thomas P. Sandquist, Esq., of WilliamsMcCarthy LLP;
and Edward J. Nazar, Esq., at Redmond & Nazar LLP.
The Bankruptcy Court later dismissed the Chapter 11 proceeding of
Ryan 763K, a debtor-affiliate of Ryan International.
SAN BERNARDINO: In Court in January Over Landfill Payments
----------------------------------------------------------
American Bankruptcy Institute reports that the city and county of
San Bernardino are set to skirmish in bankruptcy court in January
over more than $1.9 million in landfill payments that the city has
stopped making.
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.
SATCON TECHNOLOGY: Bank Appeals Right to Use Cash Collateral
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Satcon Technology Corp. won final approval to use
cash, followed immediately by an appeal from secured lender
Silicon Valley Bank owed more than $14.5 million.
The report relates that the bankruptcy judge in Delaware gave
Satcon permission to use cash representing collateral for the bank
and other secured lenders. Silicon Valley contends the so-called
equity cushion of $10.5 million no longer exists, partly because
of approval given last week for secured credit from principal
supplier China Great Wall Computer Shenzhen Co.
Along with approval of credit from Great Wall, the judge gave the
supplier a $5 million secured claim to come ahead of Silicon
Valley, according to the report.
About SatCon Technology
Based in Boston, SatCon Technology Corporation (NasdaqCM: SATC) --
http://www.satcon.com/-- and its wholly owned subsidiaries
provide utility-grade power conversion solutions for the renewable
energy market, primarily for large-scale commercial and utility-
scale solar photovoltaic markets.
Satcon Technology Corporation, along with six related entities,
filed Chapter 11 petitions (Bankr. D. Del. Case No. 12-12869) on
Oct. 17, 2012. Satcon disclosed assets of $92.3 million and
liabilities totaling $121.9 million. Liabilities include $13.5
million in secured debt owing to Silicon Valley Bank. There is
another $6.5 million in secured subordinated debt. Unsecured
liabilities include $16 million on subordinated notes.
The Hon. Kevin Gross presides over the case. Dennis A. Meloro,
Esq., at Greenberg Traurig serves as the Debtors' counsel. Fraser
Milner Casgrain LLP acts as the general Canadian counsel. Lazard
Middle Market LLC serves as the Debtors' financial advisor and
investment banker. Epiq Bankruptcy Solutions, LLC, serves as the
Debtors' claims and noticing agent.
An official committee of unsecured creditors has not yet been
appointed in these cases by the Office of the United States
Trustee.
SATCON TECHNOLOGY: US Trustee, Creditors Balk at $1.6MM Bonus Plan
------------------------------------------------------------------
Marie Beaudette at Dow Jones' DBR Small Cap reports that unsecured
creditors and the U.S. Justice Department's bankruptcy watchdog
are opposing Satcon Technology Corp.'s proposed $1.6 million bonus
plan, arguing that it doesn't set a high-enough performance
standard for the company's top executives.
About SatCon Technology
Based in Boston, SatCon Technology Corporation (NasdaqCM: SATC) --
http://www.satcon.com/-- and its wholly owned subsidiaries
provide utility-grade power conversion solutions for the renewable
energy market, primarily for large-scale commercial and utility-
scale solar photovoltaic markets.
Satcon Technology Corporation, along with six related entities,
filed Chapter 11 petitions (Bankr. D. Del. Case No. 12-12869) on
Oct. 17, 2012. Satcon disclosed assets of $92.3 million and
liabilities totaling $121.9 million. Liabilities include $13.5
million in secured debt owing to Silicon Valley Bank. There is
another $6.5 million in secured subordinated debt. Unsecured
liabilities include $16 million on subordinated notes.
The Hon. Kevin Gross presides over the case. Dennis A. Meloro,
Esq., at Greenberg Traurig serves as the Debtors' counsel. Fraser
Milner Casgrain LLP acts as the general Canadian counsel. Lazard
Middle Market LLC serves as the Debtors' financial advisor and
investment banker. Epiq Bankruptcy Solutions, LLC, serves as the
Debtors' claims and noticing agent.
An official committee of unsecured creditors has not yet been
appointed in these cases by the Office of the United States
Trustee.
SCOTSMAN INDUSTRIES: S&P Removes 'B+' CCR From Watch Positive
-------------------------------------------------------------
Standard & Poor's Ratings Services removed its ratings on Vernon
Hills-Ill.-based ice machine manufacturer Scotsman Industries
Inc., including its 'B+' corporate credit rating, from CreditWatch
with positive implications. "We had placed the ratings on
CreditWatch on Nov. 7, 2012. All debt outstanding has been repaid,
and we are subsequently withdrawing our ratings at the request of
the company. We indicated that when the bank debt outstanding was
repaid at the close of the deal we would withdraw our ratings on
this debt," S&P said.
"We placed the ratings on CreditWatch with positive implications
based on our view of potential improvement in credit quality
following the purchase by ALI Group," said Standard & Poor's
credit analyst John Sico. "Our view was supported by the strategic
acquisition by a much more broadly diverse global food service
equipment manufacturer that should enhance the business risk
profile and by less aggressive financial policies absent private
equity ownership."
SEACOR HOLDINGS: Moody's Cuts CFR to 'Ba3'; Outlook Stable
----------------------------------------------------------
Moody's Investors Service downgraded SEACOR Holdings Inc.'s
(SEACOR) Corporate Family Rating (CFR) and senior notes ratings to
Ba3 from Ba1. The rating outlook was changed to stable from
negative. This rating action follows the company's recent debt
issuance and special dividend announcement.
Issuer: SEACOR Holdings Inc.
Rating Downgrades and Changes:
Corporate Family Rating, Downgraded to Ba3 from Ba1
Probability of Default Rating, Downgraded to Ba3 from Ba1
7.375% Senior Unsecured Notes, Downgraded to Ba3 from Ba1
7.375% Senior Unsecured Notes, Changed to a range of LGD4,
57% from a range of LGD4, 62%
Senior Unsecured Shelf, Downgraded to (P)Ba3 from (P)Ba1
Senior Unsecured Shelf, Changed to a range of LGD4, 57% from
a range of LGD4, 62%
Subordinated Shelf, Downgraded to (P)B2 from (P)Ba2
Preferred Shelf and Non-cumulative Preferred Shelf,
Downgraded to (P)B2 from (P)Ba2
RATINGS RATIONALE
"The two-notch downgrade to Ba3 was primarily driven by SEACOR's
smaller asset base following the pending Era Group spin-off and
the company's increasingly aggressive financial policies," said
Pete Speer, Moody's Vice President. "The downgrade also
incorporated the company's weak operating performance and high
financial leverage metrics."
Since the rating outlook was changed to negative on August 17,
2012, SEACOR definitively decided to spin-off its Era Group (B1
stable) subsidiary to shareholders. The Era spin-off increases
SEACOR's already elevated leverage metrics and reduces its asset
base and business line diversification. While the company will
receive $50 million of cash from Era prior to the separation, that
amount is effectively being applied towards the special dividend
of approximately $105 million to be paid out before year end.
Moody's views the spin-off and special dividend as an aggressive
shareholder focused financial policy, particularly in light of the
company's subdued earnings and weaker credit metrics.
Pro forma for last week's $300 million convertible notes offering,
the October maturity of approximately $171 million of senior
notes, the Era spin-off and special dividend, Moody's estimates
that SEACOR's Debt/EBITDA (including Moody's standard adjustments)
was around 4.5x at September 30, 2012. It's pro forma cash,
marketable securities (net of short sale liabilities) and
construction/Title XI reserve funds of approximately $524 million
at September 30, 2012 still provides an important financial
cushion, but the amount is down significantly from the beginning
of the year.
EBITDA in the third quarter of 2012 did sequentially increase from
surprisingly weak second quarter levels, with profitability
improving in its core Offshore Marine Services segment. However,
the extent of cyclical improvement in SEACOR's earnings remains
uncertain given the significant investment in new vessels being
made by its competitors. This may limit the company's ability to
increase earnings despite the steady rise of offshore drilling
activity in the US Gulf of Mexico.
The stable outlook is based on Moody's expectation of modest
cyclical earnings recovery that reduces Debt/EBITDA to around 4x
and that the company maintains ample cash and investment balances.
If Debt/EBITDA rises above 5x or cash and investment balances fall
below $300 million then the ratings could be downgraded. A rating
upgrade is unlikely through 2013 given the company's elevated
leverage metrics and aggressive financial policies.
The Ba3 rating on the company's senior notes due 2019 could also
be downgraded beneath the Ba3 CFR if SEACOR has to enter into a
secured credit facility when its present unsecured credit facility
matures in November 2013. A senior secured credit facility of a
similar size would result in a one notch downgrade of the senior
notes rating to B1 under Moody's Loss Given Default Methodology.
The principal methodology used in rating SEACOR was the Global
Oilfield Services Industry Methodology published in December 2009.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
SEACOR Holdings, Inc., headquartered in Fort Lauderdale, Florida,
provides offshore marine services to oil and gas companies. The
company also provides marine and inland river transportation and
other services.
SOLYNDRA LLC: IRS Drops Appeal on Plan Confirmation
---------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the Internal Revenue Service dropped its appeal of
the confirmation order in October approving the Chapter 11
reorganization plan for Solyndra LLC.
The report recounts that the IRS contended the plan violated
bankruptcy law because the principal purpose was to avoid paying
taxes. The IRS withdrew the appeal at the end of last week.
Solyndra on Nov. 7 implemented the Chapter 11 reorganization plan
that the bankruptcy court approved on Oct. 22. The IRS failed in
its efforts at holding up consummation of the plan pending appeal.
According to the report, the IRS may have concluded that the
doctrine of equitable mootness would eventually result in
dismissal of the appeal. The doctrine sometimes results in
dismissal of confirmation appeals if the appellate court concludes
it would be inequitable to revise the plan in part once
implemented.
About Solyndra LLC
Founded in 2005, Solyndra LLC was a U.S. manufacturer of solar
photovoltaic solar power systems specifically designed for large
commercial and industrial rooftops and for certain shaded
agriculture applications. The Company had 968 full time employees
and 211 temporary employees. Solyndra has sold more than 500,000
of its panels since 2008 and generated cumulative sales of over
$250 million.
Fremont, California-based Solyndra and affiliate 360 Degree Solar
Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D.
Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at
least the third solar company to seek court protection from
creditors since August 2011.
Judge Mary F. Walrath presides over the Debtors' cases. The
Debtors are represented by Pachulski Stang Ziehl & Jones LLP as
legal adviser. AlixPartners LLP serves as noticing claims and
balloting agent. Imperial Capital LLC serves as the company's
investment banker and financial adviser. The Debtors also tapped
former Massachusetts Governor William F. Weld, now with the law
firm McDermott Will & Emery, to represent the company in
government investigations and related litigation. BDO Consulting,
a division of BDO USA, LLP, as financial advisor and BDO Capital
Advisors, LLC, serves as investment banker for the creditors'
panel.
The Official Committee of Unsecured Creditors of Solyndra LLC has
tapped Blank Rome LLP as counsel and BDO Consulting as financial
advisors.
In October 2011, the Debtors hired Berkeley Research Group, LLC,
and designated R. Todd Neilson as Chief Restructuring Officer.
Solyndra owed secured lenders $783.8 million, including
$527.8 million to the U.S. government pursuant to a federal loan
guarantee, and held assets valued at $859 million as of the
Petition date. The U.S. Federal Financing Bank, owned by the U.S.
Treasury Department, is the Company's biggest lender.
When they filed for Chapter 11, the Debtors pursued a two-pronged
strategy to effectuate either a sale of their business to a
"turnkey" buyer who may acquire substantially all of Solyndra's
assets or, if the Debtors were unable to identify any potential
buyers, an orderly liquidation of the assets for the benefit of
their creditors.
Solyndra did not receive acceptable offers to buy the business as
a going concern. Two auctions late last year brought in a total
of $8 million. A three-day auction in February generated another
$3.8 million. An auction in June generated $1.79 million from the
sale of 7,200 lots of equipment.
Solyndra filed a liquidating plan at the end of July and scheduled
a hearing on Sept. 7 for approval of the explanatory disclosure
statement. The Plan is designed to pay 2.5% to 6% to unsecured
creditors with claims totaling as much as $120 million. Unsecured
creditors with $27 million in claims against the holding company
are projected to have a 3% dividend.
The TCR reported on Nov. 12, 2012, Bloomberg News said Solyndra
LLC gave formal notice that its reorganization plan was confirmed
and substantially consummated. The amended joint Chapter 11 plan
became effective Nov. 7, according to a court filing that fixed
Jan. 13 as the professional fee bar date and Dec. 7 as the bar for
administrative claims.
SPRINT NEXTEL: S&P Keeps 'B+' CCR on Watch on Clearwire Stake Buy
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings on
Overland Park, Kan.-based wireless carrier Sprint Nextel Corp.,
including the 'B+' corporate credit rating, remain on CreditWatch.
The ratings were placed on CreditWatch with positive implications
on Oct. 11. 2012, following Sprint Nextel's announcement that
SoftBank Corp. was in talks to buy all or part of the company.
"The CreditWatch update follows the announcement that Sprint
Nextel is offering to purchase the remaining 49% stake in
Clearwire it does not already own for about $2.1 billion," said
Standard & Poor's credit analyst Allyn Arden. "We believe the
transaction, which includes the assumption of Clearwire's debt, is
valued at about $6 billion."
"As stated previously, we view Sprint Nextel's business risk
profile as 'fair' and its financial risk profile as 'highly
leveraged'. Factoring in the proposed sale of a 70% stake in
Sprint Nextel to Japan-based SoftBank Corp. (BBB/Watch Neg/--), we
believe that Sprint Nextel's business risk profile could benefit
from the acquisition of Clearwire. Sprint Nextel would obtain full
control over a vast quantity of much needed spectrum, which would
give it a competitive advantage in the U.S. wireless market and,
depending on SoftBank's strategy in the U.S. market, potentially
enable Sprint Nextel to continue offering unlimited data plans as
a competitive differentiator. Sprint Nextel's primary competitors,
AT&T and Verizon, are employing tiered data plans, which limit the
amount of data subscribers can use without paying monthly
overages," S&P said.
"We expect to resolve the CreditWatch listing on Sprint Nextel
when the proposed SoftBank transaction closes, most likely in the
second quarter of 2013. However, we would expect to provide more
clarity on the ultimate ratings outcome as the companies provide
more information on financial policy and strategic direction," S&P
said.
"In resolving the CreditWatch, we will assess the effect of the
proposed Clearwire transaction, if it is successfully consummated,
on Sprint Nextel's financial risk profile and stand-alone credit
profile. Additionally, our analysis will focus on the overall
business strategy and synergies from the acquisition, as well as
the strategic relationship between SoftBank and Sprint Nextel,"
S&P said.
STOCKTON, CA: Didn't Need Bankruptcy Protection, Insurers Say
-------------------------------------------------------------
Katy Stech at Daily Bankruptcy Review reports that Wall Street
bond insurers say Stockton, Calif., leaders overlooked cost-
cutting measures and failed to raise taxes on the city's roughly
300,000 residents before putting it under bankruptcy protection --
a move to cut payments to municipal bondholders who have extended
$700 million to fund the city's operations.
About Stockton, Calif.
The City of Stockton, California, filed a Chapter 9 petition
(Bankr. E.D. Calif. Case No. 12-32118) in Sacramento on June 28,
2012, becoming the largest city to seek creditor protection in
U.S. history. The city was forced to file for bankruptcy after
talks with bondholders and labor unions failed. Stockton
estimated more than $1 billion in assets and in excess of
$500 million in liabilities.
The city, with a population of about 300,000, identified the
California Public Employees Retirement System as the largest
unsecured creditor with a claim of $147.5 million for unfunded
pension costs. In second place is Wells Fargo Bank NA as trustee
for $124.3 million in pension obligation bonds. The list of
largest creditors includes $119.2 million owing on four other
series of bonds.
The city is being represented by Marc A. Levinson, Esq., at
Orrick, Herrington & Sutcliffe LLP. The petition was signed by
Robert Deis, city manager.
Mr. Levinson also represented the city of Vallejo, Calif. in its
2008 bankruptcy. Vallejo filed for protection under Chapter 9
(Bankr. E.D. Calif. Case No. 08-26813) on May 23, 2008, estimating
$500 million to $1 billion in assets and $100 million to $500
million in debts in its petition. In August 2011, Vallejo was
given green light to exit the municipal reorganization. The
Vallejo Chapter 9 plan restructures $50 million of publicly held
debt secured by leases on public buildings. Although the Plan
doesn't affect pensions, it adjusts the claims and benefits of
current and former city employees. Bankruptcy Judge Michael
McManus released Vallejo from bankruptcy on Nov. 1, 2011.
SYNERGETICS INC: Case Summary & 8 Unsecured Creditors
-----------------------------------------------------
Debtor: Synergetics Incorporated
1520 S. College Ave., Suite 2
Fort Collins, CO 80524
Bankruptcy Case No.: 12-35241
Chapter 11 Petition Date: December 14, 2012
Court: United States Bankruptcy Court
District of Colorado (Denver)
Judge: Elizabeth E. Brown
Debtor's Counsel: Laurie Stirman, Esq.
STIRMAN LAW OFFICE, LLC
2000 S. College Ave., Suite 201
Ft. Collins, CO 80525
Tel: (970) 484-5111
Fax: (970) 797-4001
E-mail: laurie@stirmanlawoffice.com
Estimated Assets: $100,001 to $500,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its eight largest unsecured
creditors filed together with the petition is available for free
at http://bankrupt.com/misc/cob12-35241.pdf
The petition was signed by Rajiv P. Mehta, president.
TAMINCO ACQUISITION: S&P Gives 'B-' Rating on $250-Mil. Notes
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' issue rating
and '6' recovery rating to Taminco Global Chemical Corp.'s parent
company Taminco Acquisition Corp.'s proposed $250 million
unsecured notes due 2017. The proposed notes have pay-in-kind
(PIK) options on interest payments. "The '6' recovery rating
indicates our expectation for negligible (0%-10%) recovery for
creditors in the event of a payment default. Ratings are based on
preliminary terms and conditions," S&P said.
"We expect proceeds from the issue to fund an approximately $244
million cash distribution to the equity sponsor Apollo Global
Management and its affiliates," S&P said.
"At the same time, we affirmed our existing ratings--including our
'B+' corporate credit rating on the company. The outlook is
stable. We also affirmed our 'BB-' issue rating and '2' recovery
rating on the company's existing first-lien senior secured
facility consisting of a $194 million revolving credit facility
and $509 million term loan. In addition we affirmed our 'B-' issue
rating and '6' recovery rating on the company's $400 million
second-priority notes. The '2' and '6' recovery ratings indicate
our expectation for substantial (70%-90%) recovery for the first-
lien creditors and negligible (0%-10%) recovery for second-lien
creditors, in the event of a payment default," S&P said.
"Standard & Poor's Ratings on Allentown Pa.-based Taminco Global
Chemical Corp. reflect the company's aggressive financial risk
profile, and its satisfactory business risk profile as a market
leading producer of alkylamines and alkylamine derivates in a
niche global market," said credit analyst Paul Kurias.
"The stable outlook reflects our assumption that the company's
EBITDA will remain resilient to potential economic downturns, and
will grow modestly in 2013. We anticipate positive free cash flow
generation. Importantly, we assume management will remain
committed to credit quality and exhibit prudence in the use of
debt so that credit metrics remain appropriate for the rating,"
S&P said.
"We could lower ratings if acquisitions or shareholder
distributions weaken credit metrics. More specifically, we could
lower ratings if management actions or unexpected earnings
weakness such as a decline in EBITDA margins to levels below 20%
or flat to negative revenue growth caused the ratio of total debt-
to-EBITDA to increase above 5x without prospects for improvement
over the next 12 months," S&P said.
"We consider an upgrade to be unlikely at this time especially
given the proposed debt funded shareholder distribution. The
company's private-equity ownership and our view of its financial
policies as aggressive currently constrain ratings. We could
reassess and raise ratings if the company goes ahead with its
planned public offering of shares and uses proceeds to lower debt
levels in a sustainable manner," S&P said.
TRANSFIRST HOLDINGS: Moody's Affirms 'B3' CFR; Outlook Stable
-------------------------------------------------------------
Moody's Investors Service affirmed TransFirst Holdings, Inc. B3
Corporate Family Rating (CFR) and assigned B1 and Caa2 ratings to
the company's proposed first and second lien credit facilities,
respectively. In addition, Moody's will withdraw the ratings for
TransFirst's existing credit facilities at the close of the
proposed transaction. The rating outlook is revised to stable from
positive.
RATINGS RATIONALE
Moody's revised TransFirst's ratings outlook to stable from
positive to reflect the increase in debt. Accordingly, Moody's
believes that it will take longer for TransFirst to de-lever to a
level that would warrant an upgrade (i.e., adjusted debt-to-EBITDA
leverage of less than 6x and free cash flow to debt in the high
single digit percentages).
The company will use the proceeds from the new credit facilities
and cash on hand to refinance $425 million of existing debt, and
pay a distribution to common and preferred shareholders of
approximately $200 million. The proposed transaction will increase
TransFirst's total debt-to-EBITDA leverage to the high 6x range
from 5.2x (including a 25% attribution to the preferred stock).
The B3 rating considers TransFirst's high debt leverage and
tolerance for high financial risk under its financial sponsors.
The rating additionally reflects TransFirst's limited operating
scale and highly competitive market for payment processing
services to small and medium size businesses. TransFirst's credit
profile is supported by the predictability of its recurring
revenues derived from a highly diverse customer base with low
industry concentration.
The stable outlook reflects Moody's expectation that TransFirst
will maintain organic EBITDA growth in the low teens percentage
driven by good sales execution, stable revenue attrition levels,
and growth in processing volumes. Moody's expects the company to
produce free cash flow in excess of $40 million in 2013.
TransFirst's ratings could be upgraded if Moody's anticipates that
the company will achieve sustained organic revenue and EBITDA
growth, reduces total Debt-to-EBITDA to below 6x (including 25%
debt attribution to preferred stock) and free cash flow to total
debt ratio in the high single digit percentages.
Moody's could downgrade TransFirst's ratings if liquidity
deteriorates, the company is unable to sustain adjusted debt-to-
EBITDA below 7x, or free cash flow turns negative for an extended
period of time.
Moody's has taken the following ratings:
Issuer: TransFirst Holdings, Inc.
Corporate Family Rating -- Affirmed B3
Probability of Default Rating -- Affirmed B3
$50 million Senior Secured Revolving Credit Facility, due 2017
-- Assigned B1 (LGD3, 31%)
$400 million Senior Secured 1st Lien Term Loan, due 2017 --
Assigned B1 (LGD3, 31%)
$200 million Senior Secured 2nd Lien Term Loan, due 2018 --
Assigned Caa2 (LGD5, 84%)
Existing Senior Secured Revolving Credit Facility, due 2013 --
B2 (LGD3, 33%), to be withdrawn
Existing Senior Secured 1st Lien Term Loan, due 2014 -- B2
(LGD3, 33%), to be withdrawn
Existing Senior Secured 2nd Lien Term Loan, due 2015 -- Caa2
(LGD5, 84%), to be withdrawn
Outlook: Stable, changed from positive
The principal methodology used in rating TransFirst Holdings, 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.
New York-based TransFirst Holdings, Inc. is a merchant acquirer
and provides payment processing services to small and medium size
businesses in the U.S. TransFirst reported net revenues of
approximately $216 million in the twelve months ended September
30, 2012 and is owned by funds affiliated to private equity firm
Welsh, Carson, Anderson & Stowe.
TRIDENT USA: Moody's Says Acquisition Financing Credit Negative
---------------------------------------------------------------
Moody's Investors Service said Trident USA Health Service, LLC.
(Trident) announcement that the incremental increase up to $35
million to its second lien term loan facility is a credit
negative, because of an increase in leverage.
The last rating action on Trident USA was the initial rating
assignment on April 3, 2012.
The principal methodology used in rating Trident USA Holdings
Services, LLC. was the Global Business and Consumer Services
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.
As reported by the Troubled Company Reporter on April 5, 2012,
Moody's Investors Service assigned B2 Corporate Family and
Probability of Default Ratings to Trident USA Health Services,
LLC. At the same time, Moody also assigned a Ba3 rating to
Trident USA's proposed $50 million revolving credit facility and
$175 million senior secured 1st lien term loan, as well as a Caa1
rating to TridentUSA's proposed $100 million senior secured 2nd
lien term loan. Moody's said the outlook is stable.
Trident USA, headquartered in Burbank, CA, is a leading vertically
integrated national provider of bedside diagnostics services
offering mobile x-ray, ultrasound, teleradiology and laboratory
services to skilled nursing home, assisted living, home
healthcare, hospice and correctional markets. Trident is owned by
private equity sponsors Audax Group and Frazier Healthcare.
UFOOD RESTAURANT: Updated Case Summary & Creditors' Lists
---------------------------------------------------------
Lead Debtor: UFood Restaurant Group, Inc.
255 Washington Street
Suite 150
Newton, MA 02458
Bankruptcy Case No.: 12-19702
Chapter 11 Petition Date: December 14, 2012
Court: United States Bankruptcy Court
District of Massachusetts (Boston)
Judge: Henry J. Boroff
Debtor's Counsel: Thomas H. Curran, Esq.
MCCARTER & ENGLISH, LLP
265 Franklin Street
Boston, MA 02110
Tel: (617) 449-6567
Fax: (617) 326-3065
E-mail: tcurran@mccarter.com
Estimated Assets: $100,001 to $500,000
Estimated Debts: $1,000,001 to $10,000,000
Affiliates that simultaneously sought Chapter 11 protection:
Debtor Case No.
------ --------
Knowfat Franchise Company, Inc. 12-19704
Assets: $100,001 to $500,000
Debts: $1,000,001 to $10,000,000
KFLG Watertown, Inc. 12-19705
Assets: $0 to $50,000
Debts: $100,001 to $500,000
Knowfat of Landmark Center, Inc. 12-19708
Assets: $0 to $50,000
Debts: $0 to $50,000
Knowfat of Downtown Crossing, Inc. 12-19706
The petitions were signed by Richard Golden, CEO/chairman of the
board.
A. A copy of UFood Restaurant's list of its 20 largest unsecured
creditors filed together with the petition is available for free
at http://bankrupt.com/misc/mab12-19702.pdf
B. A copy of Knowfat Franchise's list of its 20 largest unsecured
creditors filed together with the petition is available for free
at http://bankrupt.com/misc/mab12-19704.pdf
C. A copy of KFLG Watertown's list of its 20 largest unsecured
creditors filed together with the petition is available for free
at http://bankrupt.com/misc/mab12-19705.pdf
D. A copy of Knowfat of Landmark Center's list of its six largest
unsecured creditors filed together with the petition is available
for free at http://bankrupt.com/misc/mab12-19708.pdf
UNIVERSITY OF PUERTO RICO: Moody's Cuts Rating on Bonds to 'Ba1'
----------------------------------------------------------------
Moody's Investors Service has downgraded the University of Puerto
Rico's University System Revenue Bonds and Pledged Revenue Bonds
to Ba1 from Baa2 and Educational Facilities Revenue Bonds, 2000
Series A issued through AFICA to Ba2 from Baa3. The rating
differential reflects the subordinate pledge and lease structure
on the 2000 Series A bonds. The rating action affects $599 million
of rated debt. The ratings remain under review for possible
downgrade.
SUMMARY RATING RATIONALE
The downgrade of the University of Puerto Rico's bonds follows the
downgrade of the Commonwealth of Puerto Rico and the Government
Development Bank (GDB) to Baa3 with a negative outlook for both
from Baa1 with a negative outlook. Driving the two notch downgrade
of the University of Puerto Rico is its extraordinarily high
reliance on the commonwealth for operating revenue and its
dependence on the GDB for operating lines for liquidity. In
addition, the university has limited ability to grow revenue,
given resistance to raising tuition as well as economic challenges
that limit families' ability to pay higher costs.
The ratings for University of Puerto Rico remain on review for
possible downgrade to assess the university's FY 2012 results and
projections for 2013, focusing on financial support from the
commonwealth and GDB, enrollment, and operations of the hospital.
Moody's will also evaluate alternative sources of liquidity in the
event the GDB faces issues of market access due to the downgrade
of its long-term debt rating. Moody's expects to conclude Moody's
review within 90 days.
CHALLENGES
* Extremely high reliance on operating appropriations from the
Commonwealth of Puerto Rico, which was downgraded to Baa3 from
Baa1. In FY 2011, 68.0% of operating revenue was from the
commonwealth, compared to a median of 27.5% in FY 2011 for public
universities.
* Dependence on the GDB for liquidity. In FY 2011, of the
university's $106 million of unrestricted monthly liquidity, $93.7
million reflects a draw on the GDB revolving liquidity facility.
* Ownership and operation of Servicios Medicos Universitarios
(SMU), the university's academic medical center that had produced
substantial operating losses with an accumulated deficit of $59.2
million at June 30, 2011.
* Decline in enrollment in both fall 2010 and fall 2011 from a
peak of 61,312 FTEs in fall 2009 following student protests in
2010 that disrupted operations at 10 of the university's eleven
units for up to 62 days and resulted in a period probationary
accreditation status for most of its campuses which since then was
fully restored. The university reports that current enrollment is
57,045, up from fall 2011.
* Expectation of some management changes at the university and
GDB, with uncertain impact of those changes on the positive
momentum demonstrated by the fiscal stabilization plan. However,
UPR's president is appointed by the Board of Trustees and should
help provide stability through the political changes.
STRENGTHS
* Strong market position as the public university system in
Puerto Rico, with enrollment of over 57,000 full-time equivalent
(FTE) students for fall 2012, enrolling a high percentage of high
school graduates from the commonwealth.
* Prior changes in university governance and management, with the
current president and officers installed in 2010 and 2011 and
support of GDB to implement the university's fiscal stabilization
plan and revenue and expense initiatives at SMU.
* Positive debt service coverage, with FY 2011 operating results
showing 2.2 times debt service coverage for the year, as
calculated by Moody's, improved from 1.3 times for FY 2010 and
negative coverage in FY 2009. FY 2011 cash flow generation
improved to a 9.5% operating cash flow margin from 4.4% in FY
2010.
* Improved hospital operations, with SMU generating operating
cash flow margins of 13.2% and 10.0% for FY 2010 and FY 2011,
respectively, following a negative 1.5% for FY 2009 (and weaker
results prior to FY 2009). A "Going Concern" note in SMU's
previous financial statements is not included in its FY 2011
audit. The university has not extended any financial support to
the hospital in either FY 2010 or FY 2011.
The principal methodology used in this rating was U.S. Not-for-
Profit Private and Public Higher Education published in August
2011.
VALLEJO, CA: Talks With Workers Union Extended Into 2013
--------------------------------------------------------
American Bankruptcy Institute reports that Vallejo's first
contract negotiated since the city left chapter 9 bankruptcy in
November 2011 will take longer than expected to complete, city
officials said.
About Vallejo, California
Vallejo -- http://www.ci.vallejo.ca.us/-- is a city in Solano
County, California in the United States. As of the 2000 census,
the city had a total population of 116,760. It is located in the
San Francisco Bay Area on the northern shore of San Pablo Bay. It
was named for General Mariano Guadalupe Vallejo.
Vallejo filed for protection under Chapter 9 of the U.S.
Bankruptcy Code (Bankr. E.D. Calif. Case No. 08-26813) on May 23,
2008, after it was unable to persuade labor unions to accept
salary concessions as the recession began cutting into local
government tax collections nationwide. Marc A. Levinson, Esq.,
and Norman C. Hile, Esq., at Orrick, Herrington & Sutcliffe LLP in
Sacramento, California, represented the City. The city estimated
$500 million to $1 billion in assets and $100 million to $500
million in debts in its petition. According to Vallejo's
comprehensive annual report for the year ended June 30, 2007, the
city has $983 million in assets and $358 million in debts.
In August 2011, Vallejo was given green light to exit the
municipal reorganization. The Chapter 9 plan restructures
$50 million of publicly held debt secured by leases on public
buildings. Although the Plan doesn't affect pensions, it adjusts
the claims and benefits of current and former city employees.
A federal judge released the city of Vallejo from bankruptcy on
Nov. 1, 2011.
VISANT CORP: Moody's Corrects December 5 Rating Release
-------------------------------------------------------
Moody's Investors Service issued a correction to the December 5,
2012 rating release of Visant Corporation.
Moody's downgraded the Corporate Family and Probability of Default
Ratings of Visant to B3 from B2. In addition, Moody's downgraded
the $165 million revolving credit facility and $1,250 million
senior secured term loan to B1 (LGD 2, 29%) from Ba3 (LGD 3, 31%).
In addition, Moody's downgraded the $750 million senior unsecured
notes to Caa2 (LGD 5, 83%) from Caa1 (LGD 5, 85%). The rating
outlook is stable.
The downgrade of Visant's Corporate Family Rating reflects greater
than expected declines in EBITDA and cash flow, which has resulted
in very high leverage. Moody's expects further declines in 2013
which will limit any credit metric improvement.
The following ratings were downgraded:
Corporate family rating to B3 from B2
Probability of default rating to B3 from B2
$1,250 million proposed senior secured term loan due 2016 to B1
(LGD 2, 29%) from Ba3 (LGD3, 31%);
$165 million proposed revolving credit facility due 2015 to B1
(LGD 2, 29%) from Ba3 (LGD3, 31%)
$750 million proposed senior unsecured notes due 2017 to Caa2 (LGD
5, 83%) from Caa1 (LGD 5, 85%)
The following rating was assigned:
SGL-2 Speculative Grade Liquidity Rating
RATING RATIONALE
The B3 Corporate Family Rating reflects Visant's very high
leverage and declining earnings and cash flow trends that will
limit credit metric improvement. Moody's expects that weak
consumer spending will result in further EBITDA declines,
resulting in leverage remaining over 7 times through 2013. The
company recently provided guidance that EBITDA will decline in the
fourth quarter 2012 at a similar amount to the third quarter (-
14.7%). Moody's expect pressures to remain in 2013 with revenue
and EBITDA declining in the low to mid single digit percentage
range. However, the rating is supported by Visant's leading market
positions, strong operating margins and good free cash flow.
The stable outlook reflects the benefit of cost cutting
initiatives in 2013 and the expansion of the profitable samples
business, which should moderate EBITDA and cash flow declines as
compared to 2012. Moody's also notes the company's good liquidity
profile with the nearest debt maturity being the revolver in 2015.
A downgrade could occur if earnings decline more than expected and
result in materially higher leverage or cause a deterioration in
liquidity. For example, if compliance with the covenants under the
credit facility become less certain the rating could be
downgraded.
An upgrade is unlikely in the near term given that unfavorable
earnings and cash flow trends will make material deleveraging
unlikely in the near term. However, longer-term, the ratings could
be upgraded if the company achieves debt to EBITDA of under 5.5
times and free cash flow to debt in excess of 4% for a sustainable
period of time. Other considerations that could contribute to an
upgrade would be strategic initiatives that would fuel growth and
enhance the company's geographic diversity.
The principal methodology used in rating Visant Corporation was
the Global Consumer Durables 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.
The Visant Corporation, headquartered in Armonk, New York, is a
leading marketing and publishing services enterprise, services
school affinity, direct marketing, fragrance and cosmetics
sampling and educational publishing markets. The company has 3
segments: Scholastic (mostly class rings and other graduation
products), Memory Book (mostly school yearbooks) and Marketing and
Publishing Services (mostly magazine inserts and other innovative
direct marketing products). The company reported revenue of
approximately $1.2 billion for the last twelve months ended
September 29, 2012.
VITRO SAB: 5th Circuit Declines to Enforce Mexican Plan
-------------------------------------------------------
A three-judge panel of the U.S. Court of Appeals for the Fifth
Circuit affirmed a U.S. district court judgment affirming a Texas
bankruptcy court's recognition of the Mexican reorganization
proceeding of Vitro S.A.B. de C.V., and Vitro's appointed foreign
representatives under Chapter 15 of the Bankruptcy Code. The
Fifth Circuit also affirmed the bankruptcy court's order denying
enforcement of the Mexican reorganization plan.
The Fifth Circuit ruled that the temporary restraining order
originally entered by the bankruptcy court, the expiration of
which was stayed by the Court of Appeals, is vacated effective
Dec. 14, 2012.
The Ad Hoc Group of Vitro Noteholders, a group of creditors
holding a substantial amount of Vitro's debt, appeal from the
district court's decision recognizing the Mexican proceedings.
Vitro and one of its largest third-party creditors, Fintech
Investments, Ltd., each appeals directly to the Fifth Circuit the
bankruptcy court's decision denying enforcement of the Mexican
reorganization plan because the plan would extinguish the
obligations of non-debtor guarantors.
Between February 2003 and February 2007, Vitro borrowed a total of
roughly $1.216 billion, predominately from United States
investors, evidenced by three series of unsecured notes. Payment
in full of the Old Notes was guaranteed by substantially all of
Vitro's subsidiaries. The guaranties provide that the obligations
of the Guarantors will not be released, discharged, or otherwise
affected by any settlement or release as a result of any
insolvency, reorganization, or bankruptcy proceeding affecting
Vitro. The guaranties further provide that they are to be
governed and construed under New York law and include the
Guarantors' consent to litigate any disputes in New York state
courts.
In the latter half of 2008, Vitro's fortunes took a turn for the
worse when the global financial crisis significantly reduced
demand for its products. Vitro's operating income declined by
36.8% from 2007 to 2008, and an additional 22.3% from 2008 to
2009. In February of 2009, Vitro announced its intention to
restructure its debt and stopped making scheduled interest
payments on the Old Notes.
After Vitro stopped making payments on the Old Notes, it entered
into a series of transactions restructuring its debt obligations.
On Dec. 15, 2009, Vitro entered into a sale leaseback transaction
with Fintech Investments Ltd., one of its largest third-party
creditors, holding roughly $600 million in claims (including $400
million in Old Notes). Under the terms of this agreement, Fintech
paid $75 million in exchange for the creation, in its favor, of a
Mexican trust composed of real estate contributed by Vitro's
subsidiaries. This real estate was then leased to one of Vitro's
subsidiaries to continue normal operations. The agreement also
gave Fintech the right to acquire 24% of Vitro's outstanding
capital or shares of a sub-holding company owned by Vitro in
exchange for transferring Fintech's interest in the trust back to
Vitro or its subsidiaries.
Partly as a result of these transactions, Vitro generated a large
quantity of intercompany debt. Previously, certain of Vitro's
operating subsidiaries directly and indirectly owed Vitro an
aggregate of approximately $1.2 billion in intercompany debt. As a
result of a series of financial transactions in December 2009,
that debt was wiped out and, in a reversal of roles, Vitro's
subsidiaries became creditors to which Vitro owed an aggregate of
approximately $1.5 billion in intercompany debt. Despite requests
by holders of Old Notes, Vitro did not disclose these
transactions.
In August of 2010, Fintech purchased claims by five banks holding
claims against Vitro and its subsidiaries and extended the
maturity of various promissory notes issued by Vitro's
subsidiaries. Pursuant to a "Lock-up Agreement" completed between
Fintech and Vitro, Fintech also agreed not to transfer any debt it
held in Vitro unless such transfer was in line with the terms of
that agreement.
In October 2010, roughly 300 days after completing the
transactions with its subsidiaries, did Vitro disclose the
existence of the subsidiary creditors. This took the transactions
outside Mexico's 270-day "suspicion period," during which such
transactions would be subject to additional scrutiny before a
business enters bankruptcy.
Between August 2009 and July 2010, Vitro engaged in negotiations
with its creditors and submitted three proposals for
reorganization. Each was rejected by creditors. After the last
proposal, the Ad Hoc Group of Vitro Noteholders, a group of
creditors holding roughly 60% of the Old Notes, issued a press
release "strongly recommend[ing]" that all holders of the Old
Notes deny consent to any reorganization plan that the Noteholders
had not approved. On Nov. 1, 2010, Vitro disclosed its intention
to commence a voluntary reorganization proceeding in Mexico,
together with a pre-packaged plan of reorganization. On Dec. 13,
2010, Vitro initiated in a Mexican court a concurso proceeding
under the Mexican Business Reorganization Act, or Ley de Concursos
Mercantiles.
The Mexican court initially rejected Vitro's filing on Jan. 7,
2011, because Vitro could not reach the 40% creditor approval
threshold necessary to file a concurso petition without relying on
intercompany claims held by its subsidiaries. On April 8, 2011,
that decision was overruled on appeal and Vitro was then declared
to be in bankruptcy, or concurso mercantil. Pursuant to Mexican
law, Javier Luis Navarro Velasco was appointed as conciliador. He
was tasked with filing an initial list of recognized claims and
mediating the creation of a reorganization plan.
On Aug. 5, 2011, the conciliador filed a proposed final list of
recognized creditors, which included those subsidiaries holding
intercompany debt. The conciliador then negotiated terms of a
reorganization plan between Vitro and the recognized creditors to
submit to the Mexican court for approval. Throughout this process,
the parties were apparently in frequent contact with the Mexican
court on an ex parte basis.
On Dec. 5, 2011, the conciliador submitted to the Mexican court a
proposed restructuring plan substantially identical to the one
Vitro had originally proposed. Under the terms of the Plan, the
Old Notes would be extinguished and the obligations owed by the
Guarantors would be discharged.
The Plan further provides that Vitro would issue new notes payable
in 2019, with a total principal amount of $814,650,000. The New
2019 Notes would be issued to Vitro's third-party creditors (not
including those subsidiaries holding intercompany debt, who would
forgo their pro rata share of the Plan's consideration and instead
receive other promissory notes). The New 2019 Notes would bear a
fixed annual interest rate of 8.0%, but would "not have . . .
payments of principal during the first 4 (years) years [sic]. . .
and from the fifth year of operation and until the seventh year
. . . will have repayments or payments of [a] total principal
amount of $23,960,000.00 USD . . . payable semiannually on June 30
and December 31 of each year and the remaining balance upon due
date." The New 2019 Notes would also "be unconditionally and
supportively guaranteed for each of the Guarantors."
Payment under the New 2019 Notes would go into a third-party
payment trust, which would deliver payment to those creditors who
had consented to the Plan. A second trust would be created to pay
non-consenting creditors upon their written agreement to the terms
of the Plan. In addition to the New 2019 Notes, Vitro would also
provide to the holders of the Old Notes $95,840,000 aggregate
principal amount of new mandatory convertible debt obligations
("MCDs") due in 2015 with an interest rate of 12%, convertible
into 20% equity in Vitro if not paid at full maturity. Finally,
the Plan also provided cash consideration of approximately $50 per
$1000 of principal of Old Notes.
Under Mexican law, approval of a reorganization plan requires
votes by creditors holding at least 50% in aggregate principal
amount of unsecured debt.
As distinguished from United States law, Mexico does not divide
unsecured creditors into interest-aligned classes, but instead
counts the votes of all unsecured creditors, including insiders,
as a single class. As a result, although creditors holding 74.67%
in aggregate principal amount of recognized claims voted in favor
of the plan, over 50% of all voting claims were held by Vitro's
subsidiaries in the form of intercompany debt. The 50% approval
threshold could not have been met without the subsidiaries' votes.
After the initial approval, the LCM provides a period during which
objecting creditors can veto the plan. A veto requires agreement
by recognized creditors holding a minimum of 50% in aggregate
principal amount of debt or by recognized creditors numbering at
least 50% of all unsecured creditors.
As only 26 of the 886 recognized creditors sought to veto the
Concurso plan, and as those creditors held less than 50% of the
aggregate recognized debt, the veto failed.
The Mexican court approved the Concurso plan on Feb. 3, 2012. On
Feb. 23, 2012, the Plan went into effect, and Vitro issued New
2019 Notes and MCDs and paid restructuring cash into two third-
party payment trusts, one for consenting creditors and the other
for non-consenting creditors. The Concurso plan approval order
has been appealed, and such appeal has been accepted by, and is
currently pending in, the Mexican judicial appellate system; no
stay of effectiveness of the Concurso plan was entered.
While objecting to the concurso proceeding in Mexico, creditors
dissatisfied with Vitro's reorganization efforts attempted to
collect on the Old Notes and guaranties in a variety of ways. By
April 2010, Vitro had received acceleration notices for all the
Old Notes.
On Nov. 17, 2010, involuntary Chapter 11 petitions were filed
against fifteen Guarantors domiciled in the United States.
Various holders of Old Notes also commenced two substantially
identical lawsuits in New York state court against Vitro and 49
Guarantors, resulting in orders of attachment with respect to any
property located in New York.
Parallel to the concurso proceeding, in August 2011, Wilmington
Trust, National Association, the indenture trustee for the Old
Notes due in 2012 and 2017, filed suit in New York state court
against various of the Guarantors, seeking a declaratory judgment
confirming the Guarantors' obligations under the related
indentures. The state court granted partial summary judgment in
Wilmington's favor on Dec. 5, 2011.
The court held that New York law applied to the dispute and that
under the unambiguous terms of the relevant Old Notes, "any non-
consensual release, discharge or modification of the obligations
of the Guarantors . . . is prohibited." The court went on to
find, however, that "whether such prohibitive provisions may be
modified or eliminated by applicable Mexican laws is not at issue
here." A separate suit brought by U.S. Bank National Association,
the indenture trustee for the Old Notes due in 2013, achieved the
same outcome.
On Oct. 29, 2010, Vitro's Board of Directors appointed Alejandro
Sanchez-Mujica to act as Vitro's foreign representative. On April
14, 2011, Sanchez-Mujica commenced a Chapter 15 proceeding in
United States bankruptcy court by filing a petition for
recognition of the Mexican concurso proceeding. The petition was
originally filed in the U.S. Bankruptcy Court for the Southern
District of New York, but, on May 13, 2011, by motion of objecting
creditors, venue was transferred to the U.S. Bankruptcy Court for
the Northern District of Texas. Because Sanchez-Mujica could not
leave Mexico -- a result of certain travel restrictions imposed by
the Mexican court because of his role in Vitro's restructuring --
Vitro filed a supplemental petition to recognize Javier
Arechavaleta-Santos, another appointee of Vitro's Board of
Directors, as "co-foreign representative."
The bankruptcy court, over objections, held that the Mexican
reorganization proceeding was a "foreign main proceeding" and
approved the petition confirming Sanchez-Mujica and Arechavaleta-
Santos as foreign representatives pursuant to 11 U.S.C. Sections
1515 and 1517.9 The U.S. District Court for the Northern District
of Texas affirmed the bankruptcy court's order.
On March 2, 2012, Vitro's foreign representatives filed a motion
(I) to enforce the Mexican Plan of Reorganization, and (II) for
permanent injunction. The Noteholders, Wilmington, and U.S. Bank
objected, and the matter proceeded to trial on June 4, 2012.
Following a four-day trial, the bankruptcy court denied the
Enforcement Motion. As part of that ruling, the court also denied
Vitro's motion to enjoin the Objecting Creditors from initiating
litigation against the Guarantors. To permit Vitro time to
appeal, the bankruptcy court did, however, extend a previously
issued temporary restraining order.
The cases before the Appeals Court are: AD HOC GROUP OF VITRO
NOTEHOLDERS, Appellant, v. VITRO SAB DE CV, Appellee; VITRO SAB DE
CV, Appellant, v. AD HOC GROUP OF VITRO NOTEHOLDERS; WILMINGTON
TRUST, NATIONAL ASSOCIATION, solely in its capacity as indenture
trustee; U.S. BANK NATIONAL ASSOCIATION, Appellees; FINTECH
INVESTMENTS, LIMITED, Appellant, v. AD HOC GROUP OF VITRO
NOTEHOLDERS; WILMINGTON TRUST, NATIONAL ASSOCIATION, solely in its
capacity as indenture trustee; U.S. BANK NATIONAL ASSOCIATION,
Appellees; No. 12-10542, Consolidated with Nos. 12-10689, 12-10750
(5th Cir.). A copy of the Fifth Circuit's Dec. 14, 2012 decision
is available at http://is.gd/Ns8TRlfrom Leagle.com.
VITRO SAB: Seeks Reconsideration of Ruling Denying Mexican Plan
---------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Vitro SAB is asking all judges on the federal appeals
court in New Orleans to reconsider a November decision by a three-
judge panel precluding the Mexican glassmaker from enforcing a
bankruptcy plan in the U.S. A court in Mexico approved the plan
early this year.
The November ruling "departs from established legal precedent" and
"calls into question the efficacy of Chapter 15 as a means for
foreign companies to globally restructure," Roberto Riva Palacio,
a Vitro spokesman, said in an e-mailed statement, according to the
report.
In papers filed Dec. 12 with the Fifth U.S. Circuit Court of
Appeals in New Orleans, Vitro, the report relates, contends that
the November opinion "would effectively preclude enforcement in
the U.S. of the majority of successful Mexican reorganizations."
Vitro, the report discloses, said the "novel" ruling "will place
an extraordinary burden" on foreign companies undergoing
reorganization primarily broad. "Our arguments warrant review by
all judges on the Fifth Circuit" because the November opinion
"deals a blow to the mutual respect typically displayed between
U.S. and Mexican courts," Mr. Palacio said.
The defeat in the appeals court wasn't Vitro's only recent loss.
On Dec. 4, the bankruptcy court in Dallas ruled that 10 Vitro
subsidiaries should be in bankruptcy involuntarily because they
guaranteed $1.2 billion in defaulted bonds. Elliott Management
Corp. and other holders of 60% of the bonds successfully opposed
recognition of Vitro's Mexican reorganization in the bankruptcy
and appeals courts.
The report recounts that in putting subsidiaries into involuntary
bankruptcy, Bankruptcy Judge Harlin "Cooter" Hale said he was
persuaded partly because Vitro failed to make several disclosures
that were "particularly disturbing because of previous
questionable acts." Judge Hale said a Vitro subsidiary
transferred $100 million out of the U.S. when "there was not a
single shred of documentary evidence" to show a "bona fide tax
purpose." He also noted that Vitro reincorporated several
subsidiaries in the Bahamas without even telling their own
lawyers. The actions "were taken, apparently, to prevent
creditors with guarantees claims from taking steps to collect on
their judgments," Judge Hale said. Judge Hale's decision
contained "numerous inaccurate assertions," Vitro General Counsel
Alejandro Sanchez Mujica said in an e-mailed statement.
The appeals court's 60-page opinion in November was written by
Circuit Judge Carolyn King, who was a bankruptcy expert before
appointment to the circuit court. She nixed the Mexican plan
partly because Vitro "has not shown that there exist truly unusual
circumstances necessitating the release" preventing bondholders
from suing subsidiaries who weren't then in bankruptcy.
Defeated in courts in Mexico, the bondholders won a victory in the
Vitro parent's Chapter 15 case in Dallas when Hale ruled in June
that the Mexican reorganization couldn't be enforced in the U.S.
The appeal in the Circuit Court is Vitro SAB de CV v. Ad Hoc Group
of Vitro Noteholders (In re Vitro SAB de CV), 12-10689, U.S. Court
of Appeals for the Fifth Circuit (New Orleans). The suit in
bankruptcy court where the judge decided not to enforce the
Mexican reorganization in the U.S. is Vitro SAB de CV v. ACP
Master Ltd. (In re Vitro SAB de CV), 12-03027, U.S. Bankruptcy
Court, Northern District of Texas (Dallas). The bondholders'
previous appeal in the circuit court is Ad Hoc Group of Vitro
Noteholders v. Vitro SAB de CV (In re Vitro SAB de CV), 11-11239,
U.S. Court of Appeals for the Fifth Circuit (New Orleans). The
bondholders' appeal of Chapter 15 recognition in district court is
Ad Hoc Group of Vitro Noteholders v. Vitro SAB de CV (In re Vitro
SAB de CV), 11-02888, U.S. District Court, Northern District of
Texas (Dallas).
About Vitro SAB
Headquartered in Monterrey, Mexico, Vitro, S.A.B. de C.V. (BMV:
VITROA; NYSE: VTO), through its two subsidiaries, Vitro Envases
Norteamerica, SA de C.V. and Vimexico, S.A. de C.V., is a global
glass producer, serving the construction and automotive glass
markets and glass containers needs of the food, beverage, wine,
liquor, cosmetics and pharmaceutical industries.
Vitro is the largest manufacturer of glass containers and flat
glass in Mexico, with consolidated net sales in 2009 of MXN23,991
million (US$1.837 billion).
Vitro defaulted on its debt in 2009, and sought to restructure
around US$1.5 billion in debt, including US$1.2 billion in notes.
Vitro launched an offer to buy back or swap US$1.2 billion in
debt from bondholders. The tender offer would be consummated
with a bankruptcy filing in Mexico and Chapter 15 filing in the
United States. Vitro said noteholders would recover as much as
73% by exchanging existing debt for cash, new debt or convertible
bonds.
Concurso Mercantil & Chapter 15 Proceedings
Vitro SAB on Dec. 13, 2010, filed its voluntary petition for a
pre-packaged Concurso Plan in the Federal District Court for
Civil and Labor Matters for the State of Nuevo Leon, commencing
its voluntary concurso mercantil proceedings -- the Mexican
equivalent of a prepackaged Chapter 11 reorganization. Vitro SAB
also commenced parallel proceedings under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-16619) in Manhattan
on Dec. 13, 2010, to seek U.S. recognition and deference to its
bankruptcy proceedings in Mexico.
Early in January 2011, the Mexican Court dismissed the Concurso
Mercantil proceedings. But an appellate court in Mexico
reinstated the reorganization in April 2011. Following the
reinstatement, Vitro SAB on April 14, 2011, re-filed a petition
for recognition of its Mexican reorganization in U.S. Bankruptcy
Court in Manhattan (Bankr. S.D.N.Y. Case No. 11-11754).
The Vitro parent received sufficient acceptances of its
reorganization by using the US$1.9 billion in debt owing to
subsidiaries to vote down opposition by bondholders. The holders
of US$1.2 billion in defaulted bonds opposed the Mexican
reorganization plan because shareholders could retain ownership
while bondholders aren't being paid in full.
Vitro announced in March 2012 that it has implemented the
reorganization plan approved by a judge in Monterrey, Mexico.
In the present Chapter 15 case, the Debtor seeks to block any
creditor suits in the U.S. pending the reorganization in Mexico.
Chapter 11 Proceedings
A group of noteholders opposed the exchange -- namely Knighthead
Master Fund, L.P., Lord Abbett Bond-Debenture Fund, Inc.,
Davidson Kempner Distressed Opportunities Fund LP, and Brookville
Horizons Fund, L.P. Together, they held US$75 million, or
approximately 6% of the outstanding bond debt. The Noteholder
group commenced involuntary bankruptcy cases under Chapter 11 of
the U.S. Bankruptcy Code against Vitro Asset Corp. (Bankr. N.D.
Tex. Case No. 10-47470) and 15 other affiliates on Nov. 17, 2010.
Vitro engaged Susman Godfrey, L.L.P. as U.S. special litigation
counsel to analyze the potential rights that Vitro may exercise
in the United States against the ad hoc group of dissident
bondholders and its advisors.
A larger group of noteholders, known as the Ad Hoc Group of Vitro
Noteholders -- comprised of holders, or investment advisors to
holders, which represent approximately US$650 million of the
Senior Notes due 2012, 2013 and 2017 issued by Vitro -- was not
among the Chapter 11 petitioners, although the group has
expressed concerns over the exchange offer. The group says the
exchange offer exposes Noteholders who consent to potential
adverse consequences that have not been disclosed by Vitro. The
group is represented by John Cunningham, Esq., and Richard
Kebrdle, Esq. at White & Case LLP.
A bankruptcy judge in Fort Worth, Texas, denied involuntary
Chapter 11 petitions filed against four U.S. subsidiaries. On
April 6, 2011, Vitro SAB agreed to put Vitro units -- Vitro
America LLC and three other U.S. subsidiaries -- that were
subject to the involuntary petitions into voluntary Chapter 11.
The Texas Court on April 21 denied involuntary petitions against
the eight U.S. subsidiaries that didn't consent to being in
Chapter 11.
Kurtzman Carson Consultants is the claims and notice agent to
Vitro America, et al. Alvarez & Marsal North America LLC, is the
Debtors' operations and financial advisor.
The official committee of unsecured creditors appointed in the
Chapter 11 cases of Vitro America, et al., has selected Sarah
Link Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP, in
Dallas, Texas, and Michael S. Stamer, Esq., Abid Qureshi, Esq.,
and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP,
in New York, as counsel. Blackstone Advisory Partners L.P.
serves as financial advisor to the Committee.
The U.S. Vitro companies sold their assets to American Glass
Enterprises LLC, an affiliate of Sun Capital Partners Inc., for
US$55 million.
U.S. subsidiaries of Vitro SAB are having their cases converted
to liquidations in Chapter 7, court records in January 2012 show.
In December, the U.S. Trustee in Dallas filed a motion to convert
the subsidiaries' cases to liquidations in Chapter 7. The
Justice Department's bankruptcy watchdog said US$5.1 million in
bills were run up in bankruptcy and hadn't been paid.
On June 13, 2012, U.S. Bankruptcy Judge Harlin "Cooter" Hale in
Dallas entered a ruling that precluded Vitro from enforcing
its Mexican reorganization plan in the U.S. Vitro's appeal is
pending.
In November, the U.S. Court of Appeals Judge Carolyn King ruled
that Vitro SAB won't be permitted to enforce its bankruptcy
reorganization plan in the U.S. She said that Vitro "has not
shown that there exist truly unusual circumstances necessitating
the release" preventing bondholders from suing subsidiaries.
VULCAN MATERIALS: S&P Affirms 'BB' Corp. Credit; Outlook Stable
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings, including
the 'BB' long-term corporate credit rating, on Birmingham, Ala.-
based aggregates producer Vulcan Materials Co. The outlook is
stable.
"The affirmation of our 'BB' corporate credit rating on Vulcan is
based on our view of the company's 'aggressive' financial risk;
'satisfactory' business risk; and 'strong' liquidity, based on our
criteria," said Standard & Poor's credit analyst Thomas Nadramia.
"We view the financial risk as aggressive despite our estimate
that year-end 2012 total debt/EBITDA leverage (adjusted for leases
and post-retirement expenses) is likely to be in a range of 6.5x
to 7x, which we view as weak for the rating. We are forecasting
that 2012 EBITDA could approximate $500 million, which is about
10% below our prior expectation, but still a significant
improvement over the 2011 level of about $350 million," S&P said.
"The ratings also incorporate expectations under our baseline
scenario that credit measures will improve over the next 12 to 24
months to levels more consistent with a 'BB' rating, given the
company's satisfactory business risk profile," S&P said.
"The ratings on Vulcan also incorporate our view of the company's
satisfactory business risk profile, reflecting aggregates' long-
term favorable growth prospects, high barriers to entry, and the
supply and demand characteristics of the industry. The ratings
also reflect Vulcan's exposure to cyclical construction markets
and very high debt levels, offset somewhat by its leading position
in the fragmented U.S. aggregates market, presence in higher
growth markets, and the longer term need for increased
infrastructure spending," S&P said.
Vulcan Materials is the nation's largest producer of construction
aggregates, primarily crushed stone, sand, and gravel. The company
is also a major producer of asphalt mix and ready-mixed concrete
in certain states.
"The stable rating outlook reflects our expectation that Vulcan's
credit measures will improve to about 5.5x by the end of 2013 with
opportunity for further debt reductions from asset sales and
improved construction markets in 2014. We expect EBITDA of $500
million to $550 million for 2013 and $600 million or more for 2014
if construction markets continue to recover. The outlook also
reflects our view that the company will maintain its strong
liquidity, which can be further enhanced by the company's plans to
generate $500 million of net proceeds from asset sales," S&P said.
"We could take a negative rating action if Vulcan fails to show
improvement in its results over the next year, such that leverage
increases or fails to continue to trend downward to 5x or lower,
or if the company pursues a more aggressive financial policy, such
as using asset sale proceeds to fund increased dividend, share
repurchases, or acquisitions prior to reducing leverage to levels
more appropriate for a 'BB' rating (i.e., 3x to 4x)," S&P said.
"We consider a positive rating action unlikely in the near term,
given our expectation that the company's credit measures will
remain weak for the rating. However, we would consider a positive
rating action if residential and non-residential construction
markets were to recover faster than expected, or if Vulcan made
quicker progress in improving EBITDA to $600 million or more or if
significant debt reductions occurred from proceeds of Vulcan's
asset sales, reducing total adjusted debt to well below 3.0
billion such that debt leverage trended to well below 5x with
prospects for further improvement," S&P said.
WILSON/BATIZ: Case Summary & 7 Unsecured Creditors
--------------------------------------------------
Debtor: Wilson/Batiz of California LLC
dba Otay Mesa International Services
9925 Airway Rd
San Diego, CA 91910
Bankruptcy Case No.: 12-16368
Chapter 11 Petition Date: December 14, 2012
Court: United States Bankruptcy Court
Southern District of California (San Diego)
Judge: Christopher B. Latham
Debtor's Counsel: Jack Fitzmaurice, Esq.
FITZMAURICE & DEMERGIAN
1061 Tierra del Rey, Suite 204
Chula Vista, CA 91910
Tel: (619) 591-1000
Fax: (619) 591-1010
E-mail: lalmaraz@fitzmauricelaw.com
Scheduled Assets: $5,055,444
Scheduled Liabilities: $5,611,372
A copy of the Company's list of its seven largest unsecured
creditors filed together with the petition is available for free
at http://bankrupt.com/misc/casb12-16368.pdf
The petition was signed by Pedro Batiz, member manager.
WOMAN'S CLUB: Case Summary & 2 Unsecured Creditors
--------------------------------------------------
Debtor: The Woman's Club of Hollywood, California
1749 No. La Brea Avenue
Los Angeles, CA 90046
Tel: (310) 309-7714
Bankruptcy Case No.: 12-50767
Chapter 11 Petition Date: December 13, 2012
Court: U.S. Bankruptcy Court
Central District of California (Los Angeles)
Judge: Barry Russell
Debtor's Counsel: Alda Shelton, Esq.
LAW OFFICE OF ALDA SHELTON
11736 Woodbine Street
Los Angeles, CA 90066
Tel: (310) 309-7714
Fax: (310) 397-0598
E-mail: aldashelton@yahoo.com
Scheduled Assets: $6,410,150
Scheduled Liabilities: $1,139,000
A copy of the Company's list of its two largest unsecured
creditors is available for free at:
http://bankrupt.com/misc/cacb12-50767.pdf
The petition was signed by Jennifer Morgan, CEO.
ZACKY FARMS: Imperial Capital Approved as Investment Banker
-----------------------------------------------------------
Zacky Farms LLC sought and obtained approval from the U.S.
Bankruptcy Court to employ Imperial Capital LLC investment banker
to assist the Debtor in the sale of substantially all of the
Debtor's business assets.
The firm, will among other things, provide these services:
a. analysis of the Debtor's business, operations, properties,
financial condition, competition, forecast, prospects and
management;
b. assisting the Debtor in asset sales pursuant to a plan or asset
sales under section 363 of the Bankruptcy Code, including
negotiations with potential stalking horse bidders and
assistance in securing and evaluating competing proposals,
including the preparation of offering materials with respect to
such Sale Transaction; and
c. assisting the Debtor in developing, evaluating, structuring and
negotiating the terms and conditions of a potential
restructuring plan.
Jason S. Thomas attests that the firm is a "disinterested person"
as the term is defined in Section 101(14) of the Bankruptcy Code.
Imperial Capital will receive a monthly fee until the conclusion
or termination of its engagement at the rate of $50,000 per month,
payable monthly in advance. One hundred percent (100%) of the
first six Monthly Advisory Fees paid to Imperial Capital will be
credited against the Sale Transaction Fee.
About Zacky Farms
Fresno, California-based Zacky Farms LLC, whose operations include
the raising, processing and marketing of poultry products, filed
for Chapter 11 bankruptcy protection (Bankr. E.D. Calif. Case No.
12-37961) on Oct. 8, 2012 in Sacramento. The company has roughly
1,000 employees and operates in multiple plants, farms and offices
in California, including operations in Los Angeles, Fresno,
Tulare, Kings, San Joaquin and San Bernardino Counties. The
company blames high feed prices for losses in recent years.
The Company has plans to sell itself to pay creditors. It listed
between $50 million and $100 million in both assets and debts.
Bankruptcy Judge Thomas Holman presides over the case. The
petition was signed by Keith F. Cooper, the Debtor's sole manager.
An official committee of unsecured creditors has been appointed in
the case. Lowenstein Sandler represents the Committee. The
Lowenstein team includes Kenneth A. Rosen, Bruce S. Nathan,
Jeffrey D. Prol, Wojciech F. Jung and Keara Waldron.
The Debtor's DIP lender, The Robert D. Zacky and Lillian D. Zacky
Trust U/D/T dated July 26, 1988, is represented by Thomas Walper,
Esq., at Munger Tolles & Olson LLP; and McKool Smith LLP.
ZACKY FARMS: Court OKs Fitzgerald Willoughby as Bankruptcy Counsel
------------------------------------------------------------------
Zacky Farms LLC sought and obtained approval from the U.S.
Bankruptcy Court to employ Felderstein Fitzgerald Willoughby &
Pascuzzi LLP as counsel.
Thomas A. Willoughby attests that his firm is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code.
The firm's rates are:
Professional Position Rates
------------ -------- -----
Steven H. Felderstein Managing Partner $595 per hour
Donald W. Fitzgerald Partner $475 per hour
Thomas A. Willoughby Partner $475 per hour
Paul J. Pascuzzi Partner $450 per hour
Jason E. Rios Partner $385 per hour
Jennifer E. Niemann Counsel $350 per hour
Holly A. Estioko Associate $325 per hour
Karen L. Widder Legal Assistant $195 per hour
About Zacky Farms
Fresno, California-based Zacky Farms LLC, whose operations include
the raising, processing and marketing of poultry products, filed
for Chapter 11 bankruptcy protection (Bankr. E.D. Calif. Case No.
12-37961) on Oct. 8, 2012 in Sacramento. The company has roughly
1,000 employees and operates in multiple plants, farms and offices
in California, including operations in Los Angeles, Fresno,
Tulare, Kings, San Joaquin and San Bernardino Counties. The
company blames high feed prices for losses in recent years.
The Company has plans to sell itself to pay creditors. It listed
between $50 million and $100 million in both assets and debts.
Bankruptcy Judge Thomas Holman presides over the case. The
petition was signed by Keith F. Cooper, the Debtor's sole manager.
An official committee of unsecured creditors has been appointed in
the case. Lowenstein Sandler represents the Committee. The
Lowenstein team includes Kenneth A. Rosen, Bruce S. Nathan,
Jeffrey D. Prol, Wojciech F. Jung and Keara Waldron.
The Debtor's DIP lender, The Robert D. Zacky and Lillian D. Zacky
Trust U/D/T dated July 26, 1988, is represented by Thomas Walper,
Esq., at Munger Tolles & Olson LLP; and McKool Smith LLP.
ZACKY FARMS: Court OKs Fox Rothschild as Panel's Counsel
--------------------------------------------------------
The Official Committee of Unsecured Creditors of Zacky Farms LLC
sought and obtained permission from the U.S. Bankruptcy Court to
employ Fox Rothschild LLP as local counsel.
Michael A. Sweet, Esq., a partner at Fox Rothschild, attests that
the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.
The firm, will among other things, provide these services:
a. advising the Committee of its rights and obligations and
performance of its duties during administration of this
Chapter 11 Case;
b. attending meetings and negotiations with other parties in
interest on the Committee's behalf in this Chapter 11 Case;
and
c. taking all necessary action to maximize distributions to the
creditors of the Debtor's estate.
The firm's rates are:
Professional Hourly Rate
------------ -----------
Partners $340 to $750
Counsel $310 to $750
Associates $210 to $500
Paralegals $100 to $295
About Zacky Farms
Fresno, California-based Zacky Farms LLC, whose operations include
the raising, processing and marketing of poultry products, filed
for Chapter 11 bankruptcy protection (Bankr. E.D. Calif. Case No.
12-37961) on Oct. 8, 2012 in Sacramento. The company has roughly
1,000 employees and operates in multiple plants, farms and offices
in California, including operations in Los Angeles, Fresno,
Tulare, Kings, San Joaquin and San Bernardino Counties. The
company blames high feed prices for losses in recent years.
The Company has plans to sell itself to pay creditors. It listed
between $50 million and $100 million in both assets and debts.
Bankruptcy Judge Thomas Holman presides over the case. The
petition was signed by Keith F. Cooper, the Debtor's sole manager.
An official committee of unsecured creditors has been appointed in
the case. Lowenstein Sandler represents the Committee. The
Lowenstein team includes Kenneth A. Rosen, Bruce S. Nathan,
Jeffrey D. Prol, Wojciech F. Jung and Keara Waldron.
The Debtor's DIP lender, The Robert D. Zacky and Lillian D. Zacky
Trust U/D/T dated July 26, 1988, is represented by Thomas Walper,
Esq., at Munger Tolles & Olson LLP; and McKool Smith LLP.
* Short Sale Saves Owner from Ch. 13 Bankruptcy
-----------------------------------------------
Las Vegas short sale agent, Tania Michaels of Focus Commercial
Group, has closed a Bank of America short sale that saved a
homeowner from filing a Chapter 13 bankruptcy. A Chapter 13
bankruptcy would have required the homeowner to make monthly
payments on the remaining balance of the mortgage. "The homeowner
would have been making monthly payments on the debt of a house
they didn't even live in anymore," says Michaels.
Laws passed in recent years have made it more difficult to obtain
approval for a Chapter 7 bankruptcy which allows for total
elimination of debt. Many homeowners are not aware that even if
they do not qualify for bankruptcy, a short sale can still be an
option. On a short sale, the mortgage company can forgive the
balance of the mortgage and repayment is not required. In Las
Vegas, that amount typically ranges from $100,000 to $300,000.
Michaels has developed a quick, online survey that provides
answers right away on whether or not a borrower might qualify for
a short sale. The tool is accessible from her website at:
http://MichaelsRealEstate.com/HAFA
"For homeowners who are facing a foreclosure, a short sale is an
option which can save a person from overwhelming debt, get them
some cash back and help avoid a very bad hit to their credit,"
says Michaels.
Homeowners who are behind on their payments are often not aware of
the benefits of a short sale. Short sales are being used to solve
immediate problems and for establishing the foundation to obtain a
better interest rate on a future mortgage.
Tania Michaels is a Las Vegas CDPE certified short sale agent. A
CDPE is knowledgeable of the entire landscape of foreclosure
avoidance options and is distinctly qualified to negotiate with
banks and help struggling homeowners regain peace of mind and a
sense of stability for the future.
"Once homeowners stop making their payment," says Michaels, "they
often think it is too late to take advantage of a short sale.
Nothing could be further from the truth."
Tania Michaels is a certified Las Vegas short sale agent.
Considered an expert short sale closer by her peers and
colleagues, Las Vegas real estate owners may also benefit from her
experience in the residential and land sector which allows her to
offer insight from the vantage point of an all-around insider.
* Moody's Says Global Base Metals Sector's Outlook Remains Neg.
---------------------------------------------------------------
Demand and price expectations for the Global Base Metals industry
will remain muted across all end markets over the next 12-18
months, as macroeconomic factors challenge the industry's ability
to move out of its present lackluster state, Moody's Investors
Service says in a new report.
Moody's outlook for the global base metals industry -- mainly
producers of aluminum, copper, nickel and zinc -- remains
negative.
"Recession in Europe, sluggish economic growth and anxiety about
the fiscal cliff in the US, and slower growth in China all weigh
on the industry as we head into the new year," says Carol Cowan,
Vice President and author of the report, "Base Metals Industry
Faces Challenging Road in 2013." "China is a key driver of metal
consumption and its appetite for metals remains the wild card in
the direction of metal prices in 2013."
Market conditions and prices have not rebounded from their strong
levels last year and prices remain volatile, with risk to the
downside, Cowan says. Demand and prices for base metals are
directly correlated with global industrial production, since base
metals are an integral ingredient across all industries.
Financing transactions for nickel and aluminum will continue to
mask weak underlying supply/demand fundamentals in the near term,
particularly for aluminum producers including Alcoa, Norsk Hydro
and Noranda, the new report says. Copper is best positioned among
base metals due to its more favorable supply/demand
characteristics, to the benefit of companies such as Southern
Copper and Freeport-McMoRan Copper & Gold.
Despite weak metal prices, costs will not fall enough next year to
allow producers to maintain 2012 margins and profitability.
"Energy, fuel and labor will continue to account for a significant
portion of overall costs," Ms. Cowan says. "There is a limit to
how much these costs can be reduced, notwithstanding efforts to
control them."
Prospects for the base metals industry could meaningfully improve
if the world's largest economies institute economic stimulus
programs, uncertainty over the European debt crisis diminishes and
growth in China picks up again.
* Large Companies With Insolvent Balance Sheets
-----------------------------------------------
Total
Share Total
Total Holders' Working
Assets Equity Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------ -------- -------
ABSOLUTE SOFTWRE ABT CN 128.8 (7.2) 2.7
AK STEEL HLDG AKS US 3,920.7 (413.9) 450.0
AMC NETWORKS-A AMCX US 2,152.9 (915.4) 505.9
AMER AXLE & MFG AXL US 2,674.2 (497.7) 372.3
AMER RESTAUR-LP ICTPU US 33.5 (4.0) (6.2)
AMERISTAR CASINO ASCA US 2,096.6 (25.6) (26.5)
AMYLIN PHARMACEU AMLN US 1,998.7 (42.4) 263.0
ANACOR PHARMACEU ANAC US 42.8 (6.2) 15.9
ARRAY BIOPHARMA ARRY US 85.5 (96.4) 4.1
AUTOZONE INC AZO US 6,398.0 (1,591.4) (682.2)
BERRY PLASTICS G BERY US 5,025.0 (452.0) (4,000.0)
BOSTON PIZZA R-U BPF-U CN 167.0 (86.0) 0.4
CABLEVISION SY-A CVC US 7,285.3 (5,730.1) (85.3)
CAPMARK FINANCIA CPMK US 20,085.1 (933.1) -
CC MEDIA-A CCMO US 16,402.3 (7,847.3) 1,449.3
CENTENNIAL COMM CYCL US 1,480.9 (925.9) (52.1)
CHOICE HOTELS CHH US 483.1 (569.4) 7.5
CIENA CORP CIEN US 1,881.1 (89.0) 730.7
CINCINNATI BELL CBB US 2,752.3 (684.6) (68.2)
CLOROX CO CLX US 4,747.0 (20.0) 20.0
COMVERSE INC CNSI US 825.3 (24.6) (45.1)
DELTA AIR LI DAL US 44,352.0 (48.0) (5,061.0)
DIRECTV DTV US 20,353.0 (4,735.0) 953.0
DOMINO'S PIZZA DPZ US 441.0 (1,345.5) 74.0
DUN & BRADSTREET DNB US 1,821.6 (765.7) (615.8)
DYAX CORP DYAX US 57.2 (48.4) 26.7
DYNEGY INC DYN US 5,971.0 (1,150.0) 1,364.0
FAIRPOINT COMMUN FRP US 1,798.0 (220.7) 31.1
FERRELLGAS-LP FGP US 1,429.0 (69.6) (70.7)
FIESTA RESTAURAN FRGI US 289.7 6.6 (13.1)
FIFTH & PACIFIC FNP US 843.4 (192.2) 33.5
FREESCALE SEMICO FSL US 3,329.0 (4,489.0) 1,305.0
GENCORP INC GY US 908.1 (164.3) 48.1
GLG PARTNERS INC GLG US 400.0 (285.6) 156.9
GLG PARTNERS-UTS GLG/U US 400.0 (285.6) 156.9
GRAHAM PACKAGING GRM US 2,947.5 (520.8) 298.5
HCA HOLDINGS INC HCA US 27,302.0 (6,563.0) 1,411.0
HEADWATERS INC HW US 680.9 (3.1) 73.5
HOVNANIAN ENT-A HOV US 1,684.2 (485.3) 870.1
HOVNANIAN ENT-B HOVVB US 1,684.2 (485.3) 870.1
HUDSON'S BAY CO HBC CN 3,859.6 (171.9) (75.3)
HUGHES TELEMATIC HUTCU US 110.2 (101.6) (113.8)
HUGHES TELEMATIC HUTC US 110.2 (101.6) (113.8)
INCYTE CORP INCY US 296.5 (220.0) 141.1
INFOR US INC LWSN US 5,846.1 (480.0) (306.6)
IPCS INC IPCS US 559.2 (33.0) 72.1
ISTA PHARMACEUTI ISTA US 124.7 (64.8) 2.2
JUST ENERGY GROU JE US 1,536.5 (279.0) (177.1)
JUST ENERGY GROU JE CN 1,536.5 (279.0) (177.1)
LIMITED BRANDS LTD US 6,427.0 (515.0) 973.0
LIN TV CORP-CL A TVL US 864.4 (35.0) 67.2
LORILLARD INC LO US 3,424.0 (1,564.0) 1,364.0
MARRIOTT INTL-A MAR US 5,865.0 (1,296.0) (1,532.0)
MERITOR INC MTOR US 2,501.0 (982.0) 270.0
MONEYGRAM INTERN MGI US 5,247.0 (163.6) (95.3)
MORGANS HOTEL GR MHGC US 577.0 (125.2) (8.7)
NATIONAL CINEMED NCMI US 828.0 (347.7) 107.6
NAVISTAR INTL NAV US 11,143.0 (358.0) 1,585.0
NEXSTAR BROADC-A NXST US 611.4 (160.3) 35.1
NPS PHARM INC NPSP US 165.5 (46.7) 121.9
NYMOX PHARMACEUT NYMX US 2.1 (7.7) (1.6)
OMEROS CORP OMER US 32.8 (0.8) 9.6
PALM INC PALM US 1,007.2 (6.2) 141.7
PDL BIOPHARMA IN PDLI US 249.9 (115.5) 170.6
PLAYBOY ENTERP-A PLA/A US 165.8 (54.4) (16.9)
PLAYBOY ENTERP-B PLA US 165.8 (54.4) (16.9)
PRIMEDIA INC PRM US 208.0 (91.7) 3.6
PROTECTION ONE PONE US 562.9 (61.8) (7.6)
QUALITY DISTRIBU QLTY US 513.1 (19.7) 62.0
QUICKSILVER RES KWK US 2,490.2 (146.7) 68.0
REALOGY HOLDINGS RLGY US 7,351.0 (1,742.0) (484.0)
REGAL ENTERTAI-A RGC US 2,198.1 (552.4) 77.4
REGULUS THERAPEU RGLS US 40.7 (8.5) 21.0
RENAISSANCE LEA RLRN US 57.0 (28.2) (31.4)
REVLON INC-A REV US 1,183.6 (680.7) 104.7
RLJ ACQUISITI-UT RLJAU US 0.0 (0.0) (0.0)
RURAL/METRO CORP RURL US 303.7 (92.1) 72.4
SALLY BEAUTY HOL SBH US 2,065.8 (115.1) 686.5
SAREPTA THERAPEU SRPT US 53.1 (4.6) (13.0)
SHUTTERSTOCK INC SSTK US 46.7 (29.9) (32.9)
SINCLAIR BROAD-A SBGI US 2,245.5 (52.4) (14.1)
TAUBMAN CENTERS TCO US 3,152.7 (86.1) -
TEMPUR-PEDIC INT TPX US 913.5 (12.5) 207.0
TESLA MOTORS TSLA US 809.2 (27.9) (101.3)
TESORO LOGISTICS TLLP US 291.3 (78.5) 50.7
THRESHOLD PHARMA THLD US 86.2 (44.1) 68.2
ULTRA PETROLEUM UPL US 2,593.6 (109.6) (266.6)
UNISYS CORP UIS US 2,254.5 (1,152.6) 371.3
VECTOR GROUP LTD VGR US 885.6 (102.9) 243.0
VERISIGN INC VRSN US 1,983.3 (26.6) (86.9)
VIRGIN MOBILE-A VM US 307.4 (244.2) (138.3)
WEIGHT WATCHERS WTW US 1,198.0 (1,720.4) (273.7)
*********
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.
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